What Starbucks told employees about Wednesday's earnings report
With the second quarter earnings
announcement behind us, we wanted to take a few moments to reiterate
some of the key themes from the call and give context to the early
reaction from media and analysts.
As we discussed today, we are
very encouraged by some positive trends in our second-quarter
performance. While some of the initial press headlines are focused on
an excessive profit decline, they are not taking into account
the one-time restructuring charges we are taking for store closures and
associated expenses. In short, we beat the consensus analyst estimates
this quarter and we’re making progress on our cost-savings initiatives
and the overall U.S. business. Our progress
today is in large measure due to the tough decisions and sacrifices we
have made across the business during this past year of restructuring.
The company has come a long way and we have much more to do, but we
should all feel good about today’s results.
A few key themes emerged from the earnings call today. Let us share a few of these with you:
We are Healthy
With a strong balance sheet and
cash flow, continued cost savings, Starbucks is in strong financial
shape and is well positioned for the future. Most important, we continue to be profitable – a claim many companies
cannot make these days.
We are Encouraged
While the global economic crisis
continues, we are seeing early signs of improvement in our business.
Traffic declines have leveled off, consumer confidence seems to be
rising, and new initiatives like Starbucks VIA Ready
Brew are showing promise in our initial, limited roll-out.
We are Ready to Tell our Story
With the upcoming launch of our new marketing campaign, and with your help, we’re ready to tell our story.
Over the next few days there will be more commentary about our business performance and our upcoming marketing campaign. Thanks again for all your contributions to the company and we will update you periodically with financial
and media updates.