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Starbucks reveals 77% net profit fall in Q2
Starbucks has announced that fiscal second-quarter net income fell 77% to $25m, or three cents a share, due to charges to close stores.
A year ago, Starbucks earned $108.7m, or 15 cents a share. Sales fell to $2.3bn from $2.5bn. Excluding charges, Starbucks said it made 16 cents a share.
Analysts had expected Starbucks to earn 16 cents a share on sales of $2.38bn, according to FactSet Research Systems. Starbucks said sales at stores open one year (a gauge of retailer health) fell 8% in the US.
Starbucks shares are up 45% so far this year, making the stock one of the best performers in the food and beverage sector. The S&P 500 Index is down 3%. Starbucks closed at $13.69 ahead of the report.
Despite the deterioration in sales and profit, Starbucks plans to launch a new marketing campaign and will slow its growth to 20 new stores this year, according to reports.
The campaign will focus “on the quality, value and values that Starbucks offers”, said chief executive, Howard Schultz, during a conference call with analysts. “We’re confident that our voice and message will break through with current and future customers.”
Source: The Seattle Times, Starbucks
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