Seattle, Washington (WiredPRNews.com) — Prominent coffee house giant, Starbucks, has reported that the company’s profits have plummeted by 28% in the second quarter of 2008. The nationwide chain has commented that the drop in profits has resulted from CEO Howard Schultz’s effort to alter the performance of the company which affected the profits severely.
Schultz commented that 2008 was a “transitional year” and said that there would be an improvement in the company’s growth in the long term. Starbucks is a Washington-based company situated in Seattle. This company has said that the net income dipped up by 15 cents per share.
According to the Wichita Business Journal, “The Seattle coffee giant (NASDAQ: SBUX) had warned analysts of the impending dismal results last week, when it said it had been hit hard in its two biggest U.S. markets, California and Florida.”
Analysts had anticipated that the company would be able to earn profits of 21 cents per share, but the Starbucks had lowered the expectations of its profits to 15 cents per share in the second quarter. Analysts had also predicted that the company would be able to earn sales revenue of $2.55 billion in the second fiscal quarter but the company came in just shy of that goal with a recorded revenue of $2.5 billion.
According to research studies conducted by the coffee company about its performance, Starbucks has said that its customers are not opting for their competitors such as Dunkin’ Donuts, but instead aren’t spending as much money as they previously used to spend on their Starbucks beverage.
Wired Business Reporter