Starbucks posted their third quarter results today, a net loss of $6.7 million or a loss of a penny per share, down from a profit of $158.3 million, or 21 cents, a year ago. Revenue for the three months ended June 30 rose 9.1% to $2.57 billion from $2.36 billion a year ago. The company said it earned 18 cents per share once the costs for restructuring and closing stores are excluded.
The company, which previously announced plans to close more than 600 stores in the U.S. and 61 in Australia, said Tuesday it is also cutting almost 1,000 office jobs as part of its bid to re-energize the brand and boost profits. Of the new cuts, 550 of the positions are layoffs and the rest are unfilled jobs. Starbucks employees on message boards were calling yesterday "Black Tuesday." For company investors, the store closures and layoffs offer some hope that the chain's declining traffic, profit and stock price may all rise again. But many Starbucks employees say the company is hurting its workers and customers to save its stock price. Starbucks shares have sunk 47 percent in the past year.
Analysts say the closures and cuts will let Starbucks focus on increasing sales at its remaining stores and selling new products including two varieties of a new smoothie drink, called Vivanno, a new energy drink and changes to its warm breakfast sandwiches. (AP)
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