Starbucks expects sales in existing cafes to drop in 2009
Seattle coffee company says global recession will cut into sales at existing Starbucks cafes.
Seattle Times business reporter
Starbucks expects same-store sales to continue falling in fiscal 2009, given that "a several global recession of uncertain length now appears likely," the Seattle coffee chain said in a securities filing today.
Analysts and investors use same-store sales as a gauge of whether growing companies are doing well at existing stores.
Starbucks saw an annual drop in same-store sales in fiscal 2008. The 3 percent decline contributed to a 53 percent profit drop for the year to $315.5 million.
The company said on Nov. 10 that it can sustain another 7 percent drop in same-store sales without profits dropping, which some analysts took as evidence that Starbucks has done sufficient cost-cutting.
Executives have not said how much further they expect same-store sales to drop.
In Monday's filing, Starbucks said, "As a retailer that is dependent upon consumer discretionary spending, the company expects to face an extremely challenging fiscal 2009 because of these economic conditions."
Melissa Allison: 206-464-3312 or email@example.com
Copyright © 2008 The Seattle Times Company
UPDATE - 09:46 AM
Exxon Mobil wins ruling in Alaska oil spill case
UPDATE - 09:32 AM
Bank stocks push indexes higher; oil prices dip
UPDATE - 08:04 AM
Ford CEO Mulally gets $56.5M in stock award
UPDATE - 07:54 AM
Underwater mortgages rise as home prices fall
NEW - 09:43 AM
Warner Bros. to offer movie rentals on Facebook