Tuesday, November 25, 2008 - Business First of Louisville

The deteriorating world economy will slam Starbucks Corp. next year, company officials warned in a filing with the Securities and Exchange Commission.

“The company will face an extremely challenging fiscal 2009 because Starbucks customers may have less money for discretionary purchases as a result of job losses, foreclosures, bankruptcies, reduced access to credit and sharply falling home prices. Any resulting decreases in customer traffic or average value per transaction will negatively impact the company’s financial performance,” officials at the Seattle coffee giant (NASDAQ: SBUX) warned.

The company said it expects same-store sales (comparable sales at stores that have been open for a year or more) to drop in fiscal 2009 compared with 2008 and also expects “relatively flat” revenues in fiscal 2009 compared with a year earlier.

“As the global financial crisis has broadened and intensified, other sectors of the global economy have been adversely impacted and a severe global recession of uncertain length now appears likely. 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,” they wrote in the filing.