Starbucks pulls a profit despite internet losses
US coffee bar chain Starbucks saw profits climb 35% in its fourth quarter, but lost almost half the cash on bombing internet investments.
LONDON (Brand Republic) – US coffee bar chain Starbucks saw profits climb 35% in its fourth quarter, but lost almost half the cash on bombing internet investments.
The Seattle-based company said the $43.8m profits for the quarter were hit by losses from failing internet ventures. In August, it was forced to write off $20m from its stake in failed online furniture retailer Living.com.
Chief executive officer Orin Smith pledged to focus on the retail business and said the company had only achieved about a third of its market potential.
“Our success outside the USA has been much greater and come much earlier than we ever expected. We have also developed a sense of urgency now that others are copying us,” he said.
He added that revenues would increase up to 30% in the next year, with 1,100 new stores opening during the period.
Revenues for the quarter were $582m, up from $475m for the same period last year.
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