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Starbucks reported a profit that was almost halved compared with last year's earnings and came up shy of the Street's expectations.
The also company said it will close 300 more outlets and slash nearly 7,000 jobs.
Starbucks, struggling to get ahead of its weakening U.S. business by cutting costs, plans to shut an additional 300 stores globally in fiscal 2009, on top of a previously announced 600 store closures in the United States, Chief Executive Howard Schultz said in a letter to employees.
It is hoped that the cost-cutting moves will save Starbucks $500 million in fiscal 2009.
The company said it earned 15 cents a share in its fiscal first quarter, against earnings of 28 cents a share in the same quarter last year.
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CNBC.com |
Analysts who follow Starbucks expected the company to post a profit of 17 cents a share, according to Thomson Reuters.
Starbucks shares [SBUX
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], which rose 5.46 percent to close at $9.65 Wednesday, fell by about 4 percent in late trading.
Sales for the recently ended quarter hit $2.62 billion, down from $2.768 billion last year and short of a consensus estimate of $2.694 billion.
- Reuters contributed to this report.
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