SBUX 4Q Down 97 Percent


Ouch. The New York Times reports (via AP) that Starbucks' fourth quarter profits dropped almost 100 percent, due largely to closing stores. But declining sales have to be a factor, too, as the subprime mortgage crisis and related macroeconomic woes find their way to the street. It's the trickle-down theory all over again: More bankers, and workers of every stripe, are out of work; borrowers need to save every cent to pay their mortgages; and premium coffee becomes just another luxury to cut from the daily budget.

Year to date, the share price is down also by over 50 percent, from a market high of $20 to less than $10 earlier this month. The company also reports that while overall revenue is up 3 percent, same-store sales are down 8 percent in the U.S. Here's the full company release, courtesy of Yahoo!

Starbucks closed its fourth quarter on Sept. 28; so its first quarter will next include the holiday season of gift cards, coffee mugs, and other low-cost presents during our present recession economy. I'm guess the company won't be selling as many CDs or $500 espresso machines. But how low do the denominations on a gift card go? None of your friends or family members will know you gave them only $5 worth of joe until the second time they use it.

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