Starbucks (SBUX) Gets Creamed

By Douglas A. McIntyre Published Nov 15, 4:13PM EST

Starbucks (SBUX) was down over 2% much of the day, but rallied into the close. Analysts expected quarterly revenue to come in at $2.42 billion and EPS to run $.21.

As it turned out consolidated net revenues for the quarter were $2.4 billion, a 22 percent increase. But, same-store sales growth was only 4%.

Earnings per share was $0.21, compared to $0.15 per share in the quarter last year.

During the fiscal year ending October 1, Starbucks opened 2,571 new store; 70 percent in the U.S. and 30 percent in International markets.

Cost of sales including occupancy increased to 43.7 as a percent of total net revenues for the 13 weeks ended September 30, 2007, compared to 41.7 percent in the corresponding 13-week period of fiscal 2006. The increase was primarily due to a shift in sales to higher cost products and higher dairy costs.

Wall St. took the same store sales and gross margin news badly and pushed the shares down 4%.

Douglas A. McIntyre

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Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.