Starbucks, the global coffee giant, has announced its first loss since 1992 after the cost of closing 600 store closures pushed it $6.7 million into the red during the third quarter.
The company fell into a loss compared to a profit of $158.3 million in the third quarter last year while total revenue rose a slower-than-expected 9 percent to $2.6 billion as US business continued to deteriorate.
International sales rose by 24 per cent to $535.6 million as the company expanded outside the US.
The world’s largest coffee shop chain also forecast that its profits this year would be in the “mid-70-cent range” per share, excluding restructuring costs, because of “declining economic conditions”.
Starbucks had initially predicted that full-year profit would come in “somewhat below” the 87 cents a share it reported for 2007.
After years of rapid expansion, Starbucks is beginning to slow down. This month it has announced the closure of 600 outlets in big US cities, six times as many as previously planned, and said it will cut three quarters of its 84 stores in Australia.