Starbucks Corp. (NASDAQ: SBUX) has posted disappointing earnings. The coffee giant reported $0.15 non-GAAP EPS and $2.62 billion in revenue. Thomson Reuters (First Call) had estimates were $0.17 EPS and $2.69 billion in revenue. The net number after items was $0.09 EPS. The cost cuts are going to have a "human cost" with them.
Just yesterday we saw reports showing that Starbucks was going toremove decaffeinated coffee after 12. The company expects to cut an additional$400 million in costs.That figure rises to $500 million when cap-ex cuts are considered. The company is closing 300 more stores and is opening fewer stores. That is in addition to the cuts already announced. It is also seeing a $30 million workforce cut charge that will mostly be taken in Q2. It also sees $140 million in lease terminations
As far as the job cuts, the additional store closures will put the tally around 6,000 jobs.
Shares were up over 5% at $9.65 in regular trading today, and the stock was basically flat in after-hours trading. Its52-week trading range is $7.06 to $20.37.
Jon C. Ogg
January 28, 2009
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