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Starbucks profit falls 97% on fewer customers and rising costs

LA Times [1]
Tuesday, Nov 11, 2008

Fewer U.S. customers and venti-sized costs for closing poorly performing stores led to lower sales and profit in Starbucks Corp.’s fiscal fourth quarter, the company said.

Seattle-based Starbucks said profit fell 97% to $5.4 million, or a penny a share, from $158.5 million, or 21 cents a share, a year earlier. Revenue rose 3% to $2.52 billion from $2.44 billion. Same-store sales, or sales at locations open at least a year, dropped 8% in the U.S. as fewer customers came into the stores.

Starbucks began shutting the U.S. and Australian stores this summer as part of a campaign to reverse slowing sales and falling profit at the company.