Summary
Starbucks Corporation (SBUX) reported its third quarter fiscal year 2008 results on August 5, 2008, for the period ending June 29, 2008. The company faced significant headwinds, particularly in the U.S. market, marked by declining customer traffic and a challenging economic environment. This resulted in an operating loss of $21.6 million for the quarter and a net loss of $0.01 per diluted share, a stark contrast to the previous year's profitability. The company announced a significant restructuring plan, including the closure of approximately 600 underperforming U.S. stores, aimed at revitalizing the business and improving long-term financial performance. While these actions will incur substantial restructuring charges in the current quarter, management expects them to yield benefits in fiscal year 2009. International operations continued to show growth, albeit with some signs of softening in certain markets.
Financial Highlights
28 data points| Revenue | $2.57B |
| Cost of Revenue | $1.16B |
| Gross Profit | $1.41B |
| Operating Expenses | $2.62B |
| Operating Income | -$21.60M |
| Interest Expense | $12.50M |
| Net Income | -$6.70M |
| EPS (Basic) | $-0.01 |
| EPS (Diluted) | $-0.01 |
| Shares Outstanding (Basic) | 1.46B |
| Shares Outstanding (Diluted) | 1.46B |
Key Highlights
- 1Reported a net loss of $6.7 million ($0.01 per diluted share) for the third quarter of fiscal 2008, compared to a net earning of $158.3 million ($0.21 per diluted share) in the prior year's quarter.
- 2Announced plans to close approximately 600 underperforming U.S. stores and incur $167.7 million in restructuring charges for the quarter.
- 3Total net revenues increased 9.1% year-over-year to $2.57 billion for the quarter, driven by new store openings, but U.S. comparable store sales declined mid-single digits.
- 4International segment revenue grew 24.0% year-over-year to $535.6 million, demonstrating resilience despite some market softness.
- 5Operating income decreased significantly due to the impact of restructuring charges and lower U.S. revenues.
- 6The company's stock-based compensation expense decreased compared to the prior year, largely due to higher forfeiture rates.
- 7Investment in auction rate securities (ARS) became illiquid due to market failures, with a significant portion reclassified to long-term investments.