Seattle coffee company says global recession will cut into sales at existing Starbucks cafes.
Starbucks expects same-store sales to continue falling in fiscal 2009, given that “a several global recession of uncertain length now appears likely,” the Seattle coffee chain said in a securities filing today.
Analysts and investors use same-store sales as a gauge of whether growing companies are doing well at existing stores.
Starbucks saw an annual drop in same-store sales in fiscal 2008. The 3 percent decline contributed to a 53 percent profit drop for the year to $315.5 million.
The company said on Nov. 10 that it can sustain another 7 percent drop in same-store sales without profits dropping, which some analysts took as evidence that Starbucks has done sufficient cost-cutting.
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Executives have not said how much further they expect same-store sales to drop.
In Monday’s filing, Starbucks said, “As a retailer that is dependent upon consumer discretionary spending, the company expects to face an extremely challenging fiscal 2009 because of these economic conditions.”
Melissa Allison: 206-464-3312 or firstname.lastname@example.org