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As I sit in my neighborhood Starbucks (NASDAQ: SBUX) outlet, the song playing through the coffeeshop speakers is Everybody Hurts by REM. How appropriate. This fiscal year, especially these past two quarters, hurt Starbucks. Fiscal fourth quarter 2008 profits were $5.4 million, or a penny per share, after restructuring costs associated with store closings; but only 10 cents a share before charges, three cents less than analysts expected and a very painful 11 cents a share less than the year-ago period.Ouch.
On a somewhat healthier note, net revenues were up a bit, to $2.5 billion, a 3% increase from a year earlier. Not a growth story exactly, but at least not negative! There's something! And CEO Howard Schultz had all kinds of positive spin, touting Starbucks as "more resilient than many other premium brands" (see how he snuck that "premium" in there? Talk about setting a subconscious benchmark!) and pointing out that he is "encouraged by our ability to drive increased traffic at a relatively low cost, as we did on Election Day" with the free tall coffee promotion.
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