Fewer US customers and venti-sized costs for closing poorly performing stores led to lower sales and profit in the fourth quarter at Starbucks Corp, the company said on Monday.
Seattle-based Starbucks said profit fell 97 percent to US$5.4 million, or a US$0.01 a share, from US$158.5 million, or US$0.21 per share, a year earlier. The coffee retailer earned US$0.10 per share when the costs from closing about 600 stores in the US and 61 locations in Australia are excluded.
Analysts expected profit of US$0.13 per share, according to a poll by Thomson Reuters.
Starbucks began shutting the US and Australian stores this summer as part of a campaign to reverse slowing sales and falling profits at the company. That turnaround began at the start of the year when former chief executive Howard Schultz took back the reins of the company to again fill the CEO and chairman posts.
Besides closing the stores, Starbucks has cut more than 1,000 positions — many of which were unfilled — and introduced a slew of new products, including Vivanno smoothie drinks and breakfast pastries.
The company also replaced aging espresso makers and launched new single-cup Clover brewing machines in some markets.
But all the changes did little to boost sales in the fourth quarter, particularly in the US, where the turmoil in the economy during the summer months took a gulp out of consumer spending. Revenue rose 3 percent to US$2.52 billion from US$2.44 billion.
Analysts expected sales of US$2.58 billion. Same-store sales, or sales at locations open at least a year, dropped 8 percent in the US as fewer customers came into the stores. Those that did also spent less, the company said. Same-store sales were flat overseas.
Despite the sales slowdown, Schultz said the company was doing what it needed to get back on track.
“We appear to be more resilient than many other premium brands,” Schultz said in a statement. “And while we cannot call isolated signs of improving sales a trend, we are encouraged by our ability to drive increased traffic at a relatively low cost, as we did on Election Day” when the company offered customers a free “tall” drip coffee.
For the current fiscal year, Starbucks earned US$315.5 million, or US$0.43 per share, down from US$672.6 million, or US$0.87 per share last year. Revenue rose to US$10.38 billion from US$9.41 billion.
Starbucks said it expects next year’s profit excluding one-time costs between US$0.71 and US$0.90 per share depending on how steeply same-store sales decline during the year. Analysts predict profit of US$0.87 per share for the year.
The company also said it will open about 700 net new stores overseas during the next year. In the US, the company said it will close about 225 stores and open 205 new ones.
Shares fell US$0.13 to US$10.07 in electronic after-hours trading after dipping US$0.35, or 3.3 percent, to close at US$10.20.
Taiwan last night blanked world No. 1 Japan 4-0 to win the World Baseball Softball Confederation’s (WBSC) Premier12 for the first time. Taiwanese ace Lin Yu-min (林昱珉) held defending champions Japan to just one hit and no runs in the first four innings, before catcher Lin Chia-cheng (林家正) opened the fifth inning with a solo home run. That was soon followed by a three-run homer from Taiwanese captain Chen Chieh-hsien (陳傑憲) to put Taiwan ahead in the prestigious tournament of the world’s top 12 baseball teams. In addition to a superb performance from 21-year-old Arizona Diamondbacks prospect Lin, three more Taiwanese pitchers
Taiwan yesterday advanced to the gold medal match of the World Baseball Softball Confederation’s (WBSC) Premier12 for the first time in history, despite last night losing 9-6 to Japan. Taiwan advanced after the US defeated Venezuela in the first game on the last day of the Super Round. However, the US had no chance of advancing to the championship game unless it defeated Venezuela by at least nine points. The US won 6-5. As a result, the two teams — who both had one win and two losses in the Super Round — are to face off again in the
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s biggest contract chipmaker, yesterday held an equipment installation ceremony for its first 2-nanometer fab in Kaohsiung, six months ahead of schedule, Kaohsiung Mayor Chen Chi-mai (陳其邁) said. “To cope with the strong global demand for advanced chips, TSMC is to start moving in equipment for its first-ever 2-nanometer fab half a year earlier than scheduled,” Chen said at an question-and-answer session at the Kaohsiung City Council. TSMC’s 2-nanometer process technology would help accelerate the development of artificial intelligence (AI) applications as well as the transformation of local industries in Kaohsiung, Chen said in a
TEAM TAIWAN: While lawmakers proposed declaring Nov. 24 a national day, the CPBL commissioner urged the legislature to pass the budget for sports development Lawmakers yesterday proposed designating Nov. 24 as National Baseball Day and updating the design of the NT$500 bill to honor the national team’s victory in the World Baseball Softball Confederation’s Premier12 championship on Sunday, as thousands of fans came out to see the players parade down the streets of Taipei. Players, coaches and staff from the national team returned home on Monday night after achieving their best-ever performance in an international baseball tournament. After receiving a rapturous welcome at the airport, the players turned out yesterday for a street parade in front of thousands of adoring fans waving Taiwanese flags and