Posted by Jennifer Heigl
Ouch! Is Starbucks headed in the way of the big 3 auto dealers? After raking in cash, and expanding exponentially over the last few years, the coffee giant has been hit hard by the challenging economy.
This week, Starbucks announced that their second quarter earnings for 2009 saw a 77% decline in quarterly earnings, with the average customer spending 3% less per transaction. The company noted, however, that their reduction and reorganization plans had saved the company $120 million for the quarter. Owner Howard Schultz remains confident that Starbucks is headed in the right direction.
“Our focus on delivering value while staying true to the premium quality and values of the brand is paying off,” said Schultz.
In an effort to stave off slumping sales, Starbucks closed nearly 800 stores over the course of 2008, while trying to lure in customers with new coffee brewers and smoothies. By the end of 2008, Schultz was encouraged that his coffee brand would continue to grow.
Daily Blender 
Is that a 77% drop in sales?……or a 77% drop in net income with 5% drop in sales?….or other?
According to their numbers, it looks like this was a 77% drop in operating income with a (5% reduction in number of customer transactions in US) with a decrease of 7.6% in net revenue.
Oy, you’re right. I’ll adjust. Thanks Randall!