Starbucks profits rise 35 percent

Starbucks Corp. said Thursday its fiscal fourth-quarter profit jumped 35 percent, despite a slowdown in store openings and a drop in U.S. traffic.

Shares plummeted in after-hours trading.

For the 13 weeks ended Sept. 30, the world’s largest chain of coffee houses posted net earnings of $158.5 million, or 21 cents a share, compared with $117.3 million, or 15 cents a share for the same period last year.

Quarterly revenue was $2.44 billion, up from $2 billion last year.

Analysts surveyed by Thomson Financial were projecting 21 cents a share on $2.43 billion in revenue.

Same-store sales, a key measure of a retailer’s health, increased 4 percent, toward the low end of the company’s guidance.

Starbucks shares closed down 15 cents at $24.10, then tumbled another $2.15 in extending trading. The stock has fallen more than 40 percent over the past year amid rising dairy costs, increased competition and economic woes that appear to have forced customers to pare back on fancy drinks.

Starbucks opened 615 stores in the latest quarter and 2,571 in fiscal 2007, boosting its worldwide store count to 15,011.

For the full fiscal year, Starbucks earned $672.6 million, or 87 cents a share, compared with $564.3 million, or 71 cents a share in fiscal 2006. Revenue in fiscal 2007 was $9.4 billion, compared with $7.8 billion last year.

Hoping it can boost holiday sales, Dell Inc. has enlisted Burt Reynolds, Ice T and other celebrities to help customers raise money to buy products for themselves or others.

Through a Web site launching today, visitors to will be able to create a virtual piggy bank where friends and relatives can donate money for gifts. There are tools to create e-mail distribution lists, and gift-seekers can embed their fundraising requests on their Facebook and MySpace pages.

The e-mails are embedded with celebrity video clips, each pitch based on a theme.

Actress Estelle Harris, who played George Costanza’s nagging mom in the sitcom Seinfeld, solicits funds through the “guilt sell.”

“Not that it’s any of my business, but you usually get them a thoughtless gift every year anyway,” she groans. “Would it kill you to get them something nice this holiday season?”

Consumers must be age 18 and older to enlist in the virtual fund and have a PayPal account to receive money.

Admittedly, there’s no way to guarantee the money will be used for Dell gear, said David Clifton, the marketing and communication director of Dell’s consumer business.


Click here to comment on this story »



Contact the Spokesman

Main switchboard:
(509) 459-5000
Customer service:
(509) 747-4422
(509) 459-5400
(800) 789-0029
Back to Spokesman Mobile