Starbucks profits slow for quarter
Seattle-based Starbucks Corp. said Wednesday its fiscal first-quarter profits rose by less than 2 percent, and it detailed plans to open fewer domestic stores and more overseas to revitalize the coffee house chain.
During fiscal 2008, the company plans to open about 425 fewer domestic stores and 75 more overseas than previously planned, for a global total of 2,150 new stores. The company also plans to close about 100 poorly performing stores in the United States.
Chairman and Chief Executive Howard Schultz said the slowdown in U.S. growth will allow the company to make better use of its time, money and staff and could reduce “cannibalization” of existing stores.
By 2009, Starbucks said it aims to open more stores overseas than domestically for the first time – more than 1,000 stores in its international markets, where Schultz has said he sees enormous potential for growth, and fewer than 1,000 in the United States.
The world’s largest coffee retailer said sales at stores open at least 13 months, a key measure of a retailer’s health, grew only 1 percent in the latest quarter, well below its target.
For the 13 weeks that ended Dec. 30, Starbucks posted net earnings of $208.1 million, or 28 cents a share, up from $205 million, or 26 cents a share, during the same period a year ago.
Revenue for the quarter was $2.77 billion, up from $2.36 billion a year ago.
Amazon.com Inc., of Seattle, said Wednesday its fourth-quarter profit more than doubled, helped by fast-growing international sales.
Amazon’s earnings in the crucial holiday quarter climbed to $207 million, or 48 cents a share, from $98 million, or 23 cents a share, in the same period last year.
Revenue rose 42 percent to $5.67 billion from $3.9 billion in the year-ago quarter.
The company said changes in foreign exchange rates lifted sales by $200 million.
International sales growth outpaced U.S. sales in the holiday quarter. U.S. and Canada sales rose 40 percent to $3.08 billion, while sales to other countries climbed 46 percent to $2.59 billion.
Boeing Co. posted better-than-expected fourth-quarter earnings Wednesday on the strength of still-booming commercial airplane sales and improved productivity, easing investor concerns for now about the possibility of another setback for its thrice-delayed 787 Dreamliner.
What it delivered instead was evidence of strong momentum in the commercial airplane business and optimism that the surge of orders will continue, regardless of a potential recession that could hurt its domestic customers.
The company’s 4 percent profit rise and prediction of “strong” earnings growth next year satisfied Wall Street despite a slight reduction in its estimates for 2008 revenue and airplane deliveries due to the 787 glitches.
Boeing’s net income for the past three months of 2007 was $1.03 billion, or $1.36 a share, up from $989 million, or $1.29 a share, in the fourth quarter of 2006. That was 4 cents a share better than the consensus estimate of analysts polled by Thomson Financial.
Revenue was virtually unchanged at $17.5 billion.