Starbucks 3Q profits see huge fall

Falling customer numbers and the cost of closing under-performing outlets led Starbucks to see its fourth-quarter profit almost wiped out.

Starbucks reported it global results for Q3 that showed its net profits $5.4m that were $158.5m a year earlier.

According to Starbucks, this $105m fall is because of its continuing restructuring work.

However, in the US, Starbucks sales were down around 8% from a year back.

In the summer this year, Starbucks announced that it would close those 600 US outlets in US and 61 in Australia that were not performing well. The company also announced 1,000 job cuts in an effort to turnaround its fortune.

Howard Schultz, who is the founder and chief executive of the company, led the company to return to growing sales and profits. It is worth mentioning that Howard Schultz returned to lead the company earlier this year.

“With a new cost structure, we have started the new fiscal year with a healthier store portfolio that enables us to operate margin expansion,” Howard added.

“Though the current global environment doesn’t show some immediate signs of improvement, the company would achieve remarkable growth in 2009. I am optimistic, as we are well prepared to weather this challenging economic environment,” he added.