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Media

24/7 Wall St. TV: Starbucks (SBUX) Doesn’t Take Food Stamps

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By Douglas A. McIntyre Updated Published
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24/7 WallSt TVThe earnings of companies including Starbucks (SBUX) and Caterpillar (CAT) have been better than expected. A number of analysts and the press have pointed out that one-time cost cuts, including lay-offs, can’t be sustained. Top line revenue will have to begin to grow to fuel long-term earnings improvement.

The problem is greater than keeping earnings moving up.

[youtube=http://www.youtube.com/watch?v=C0hzC0LJmws&w=560&h=340&fmt=18]

Starbucks and Caterpillar did well in the second quarter because each fired several thousand people and made other cost cuts.

Firms that have mass layoffs do a great deal of damage to the economy. It is damage that will eventually come back to bit them as unemployment undermines a chance for a rebound in consumer spending and capital investment.

The government may provide unemployment benefits to workers for a relatively brief period, but that will do nothing for the fortunes of a number of companies. Starbucks doesn’t take food stamps.

24/7 Wall St. TV executive producer: Philip MacDonald

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About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.

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