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Starbucks (SBUX) Falls Apart, Completely: Shares Down 11%

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By Douglas A. McIntyre Published
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Starbucks (SBUX) is now dead, just not buried.

The company warned on earnings for the quarter and the year. Howard Schultz’s attempt at a turnaround never made it out the door. He was too late firing his old CEO and management and the company’s tremendous growth and success slipped away from him. No matter how wealthy he is now, his shareholders have lost half the value of their stock in just over a year.

For the second fiscal quarter ended March 30, 2008, SBUX now expects revenue to increase 12 percent and earnings per share to be $0.15, compared with $0.19 per share for the same period a year ago. The language used to explain some of the short-fall cannot be found in the any dictionary available at local libraries in most cities. "Starbucks estimates that costs associated with the implementation of its transformation agenda, and charges related to the rationalization of its store portfolio, negatively impacted EPS by approximately $0.03 per share in its fiscal 2008 second quarter." The CFO and someone in PR actually approved that.

Starbucks now expects same-store sales in the US to be down "middle digits" for the quarter just ended. Because of weakness in the company’s home market Starbucks now expects full-year fiscal 2008 EPS to be somewhat lower than the $0.87 reported in fiscal 2007.

How humiliating.

Douglas A. McIntyre

Photo of Douglas A. McIntyre
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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