Starbucks' second-quarter profit rises more than eight-fold

Starbucks earned a better-than-expected $217.3 million, or 28 cents per share. It said a key performance measure -- sales in stores open at least a year -- climbed 7 percent in the U.S. for the second quarter. This was the fourth consecutive quarter that Starbucks' profit rose and the second that its revenue did. || Read "Starbucks' 2Q profit soars" || Starbucks' press release

Comments

[SBUX Alum Bill]

Impressive! It looks like consumers & investors have rewarded SBUX for discarding the Founding Principles!

[ICU]

I wonder if we'll get another crappy CD at Xmas time as a bonus. Gee, can't wait.

[BaristaLA]

Rumor has it that we will be getting some sort of bonus like we used to when the company was doing well before the recession. I remember as a barista I got an extra $150 added to my paycheck during Christmas

[Sense]

Figures you would be the first to whine about our success bill.

[Lisa V]

Awesome! Maybe soon I'll be able to exercise and sell some of the stock I was granted 4 years ago. The exercise price was so high I thought Starbucks would never reach it again.

[Darth Sidamo.]

In defense of bill, major cutting of labor and training may have immediate results but will severely damage the company long term. There are only so many new customers you can get from dumbing down a product and cheapening a brand. The decisions made in the past two years have caused the company to lose many loyal customers in exchange for an impulse buy. No matter how loyal a customer is, eventually they will quit coming to stores that are understaffed and undertrained.

[Georgia Latte]

The cutting labor comments are getting old. Sure, we aren't overstaffed like in the past, but honestly.... most stores are adequately staffed. Heck even when we had Mr. Valdez's weekly reviews, he found I think only a few, if any stores that could be considered understaffed. People just don't want to work...

[AmericanoMan]

WOW, I didn't realize my 10% Gold Card discount had been costing Starbucks so much...

[Darth Sidamo.]

Mr Valdezs, trips didnt leave the pacific midwest. Stores within a stones throw of corporate are staffed better. In Mid America an 18k a week store gets two man deployment and 3 man on morning rushes in a DT store.

[Coffee Soldier]

Darth Sidamo, that is not true at all...my store does 18k a week and we run a 4 partner deploment in a DT store 5 during the peak times and even 6 layered on Saturday to cover the breaks and normally come in a -1% variance to ideal.

[BaristaDude]

Realistically DSid, look at how many long shifts are being run. Your store may benefit from shorter shifts as then you could have more on in the same time window and still not be over in labor.

If you see a lot of 8 hour partners, that is what is eating up your coverage hours...

[BaristaDude]

Also, a mix of longer shifts (lunches) and shorter shifts (no lunches) can mean less partners off the floor (no one lunch after another, after another) effectively giving more coverage without more labor...just a thought....

[@usorthem3]

@Georgia Latte when would be the last time you spent twenty-five minutes talking to a single customer about a french press and what they like for characters of coffee away from the register? Just a question. I don't get that kind of time to teach customers anymore.

[Corvex Corvidae]

And to think, it only took completely disenfranchising the workforce. Great job, Schultz.

[Melody]

Amen @usorthem3. Baristas can still sling drinks fast, move a line, and even mostly keep a store clean, and perhaps genuinely smile a lot, but the the Starbucks experience WAS built on a lot more than that. And that required more labor.

@GeorgiaLatte - Just because you're tired of hearing about thin labor doesn't mean that you now actually have the labor to do all of the legendary experiences you used to (I recommend the book the Starbucks Experience by Joseph Michelli, published in 2007) AND do all the coffee education you used to too. Perhaps it just means you've given up on the idea of ever being able to do that again (if you can remember back to pre-about 2006-2007)

[koolaid free]

I'm super sick of all the whining on this site. Yes, we went through some changes. Yes, it was hard and some people I knew personally were affected by the layoffs and cutbacks. BUT...this job, just like everything else in life, is what we chose to make of it. I love my store, my partners, my peer group, and dun dun dun...my boss.
Get over it or move on.
I'm done reading this site.

[dcstateofmind]

I have such thin coverage at my store that its hard to get anything done. We're a pretty busy store and we get only two people often times in the afternoon (for more than two hours). If Ecosure walks in we are totally screwed...

[gc]

The great coffee place I go to everyday actually comes out and talks to you when you remotely look like you're going to buy some beans.

They experiment with different ways to make coffee. Heck, their standard method of "drip" coffee is french press. They don't even have brewers.

The place has a great vibe to it. The people seem happy. I've even been told they get to head on down to Africa and Latin America to view the origins of the beans they use everyday.

There's even a roaster downstairs where they roast the beans you get in your coffee everyday.

I say this because there's more than Starbucks for coffee. That means there's more than Starbucks to work if you're going to work with coffee. You all have options and all the whining back and forth isn't going to change the reality you face everyday. Something to think about...

[Darth Sidamo.]

A four hour shift here is unheard of. We get strictly 8 hour ones with some 7.5s trickled in. This is because we have a total of 9 people working at a store including the SM. Everybody averages 37 hours a week (we actually ask for much less because nobody can take a vacation. who is supposed to cover 37 hours if everybody is at almost 40 and overtime is not allowed). This store is at the corner of a district to where two other districts are less than 5 miles away. They have the same issues so I know it is not from a DM. Our RM is actually amazing (worked their way up from barista, do you remember when that used to happen!).

Your area may be allowed 4 people. However in the Midwest I hear grumblings no matter where I go besides Chicago of course, that they experience these same labor problems. We operate on a bare minimum. Baristas do not take tens in the evenings because the plate is full that a ten means they get out ten minutes later. Most of us work on our lunches so we get out only an hour after close. This is a store where most baristas have been employed for years. At two people even at a 12k a week store getting anything done would not be possible if customers spread their selves out well enough. At 18k this is impossible.

If you invest the bare minimum then you get bare minimum results. This goes for labor as well. I see tons of business we lose every day because a customer is not willing to wait on two baristas, being outnumbered 10 to 2 at all times, trying to be in two places at once.

Eventually that customer will stop passing because we are busy and just start skipping us all together. McDonalds is adequately staffed. While the quality is not the same, atleast they can get a mock latte in a timely fashion.

[Darth Sidamo.]

Lastly I do not blame this all on Seattle corporate. Every time Jim McDermott comes to town they renovate every store he walks into and double the staff for that day. This is why Seattle does not have an adequate picture of what a real store is like.

We have been trying to get minor things like workable lighting and we have had faulty furniture for years and have tried to get a fix to no avail. That was, until Seattle comes to town. Of course they want to cut labor when every time they walk into a store they have over twice the labor they would ever see on a normal day.

[Coffee Drinker]

Dear Gossipers, I'm at SBUX. Brought in my new gold card. I wasn't expecting an actual card; just the new benefits. I like my old Red card and what it stands for.

The baristas here don't know much about the cards. I asked if free tea refills mean a whole new teabag and water. She said tea refills are for iced tea only. After reeading the rewards FAQ again, I think she's mistaken.

Usually when the don't know the answer here they say " let's ring it up and see what it does."

I don't mind they don't read up on the cards- it's fun for me.

So what is a free tea refill? Is hot a new bag and water or water only?

Congrats on the profits. I had thrown away 2 cards when the Pike roast debacle ensued. Then found a store that brews bold all day ; ). And then more and more stores that do. Also the current bold program is genius.

But I sm considering trying tea if refill is a new bag;)

[erstwhile]

75% of my stock options are worth something now! Granted, a few are only worth a few cents. But this is good news.

@Darth:

I'm located in Des Moines, IA and our store does about 18k/week on average. We earn about 55-60 hours of labor a day, which translates mostly to 3 person coverage, 5 during peak, open from 5:30AM to 10PM. It's usually manageable but there will be times when the back-to-back-to-back lunch thing kicks in making some afternoons a little rough.

Curious why you have so little labor. Do you sell zero Frappuccinos?

I do agree with the comment that having some dead-weight baristas can make a shift a lot more challenging. I think the problem Starbucks has is not the lack of allotted labor, but the fact that they are not attracting the caliber of employees they once did. Paying 10 cents more than minimum wage is going to get you just that in terms of effort.

[Emipow]

@Coffee Drinker

You're correct, tea refills are for both hot and iced teas, and if hot will include a new tea bag and water.

[Darth Sidamo.]

good question about frappuccinos. Our USDs hovers around 150. New frap goal is around 165.

[pdxmgr]

NO!!!! Hot Tea is NOT refillable. Why are you people so stupid. Emipow, how do you ring up that refill?

[black apron boy]

again with the just say yes! AHHH From a tea drinkers standpoint, don't use another bag. as tea dries, oxidation occurs giving it a bitter taste. As we bloom the tea, heat releases the chemicals in the tea releasing that bitter taste. Most tea drinkers will actually dump the first and second cup of water. This is referred to as FLUSHING. most teas will give of their more floral and sweet notes around the third or fourth flushing. Good luck!

[(former) FLA SM]

"Figures you would be the first to whine about our success bill."

So, he's supposed to be happy that the success you speak of came at the expense of his livelihood? He, and thousands of others of us, should jump for joy that the company (who said it would take care of us) has turned a profit by kicking us to the curb?

"this job, just like everything else in life, is what we chose to make of it."

I don't recall getting a choice when they closed my store. I don't recall getting a choice when I was cut loose, after being promised a position at another store. I'm pretty sure Bill didn't get a choice when he was cast out. Yes, life is what we choose to make of it, but the job is not.

[Christinschu]

My store was closed but I'm still with the company. They wouldn't let me go. Even let me transfer to where ever I wanted. Just saying.....

[Christinschu]

I don't necessarily mean that as a slight against you guys. I don't know how you performed. But, it might have been your fault, or it might have been you DM's and RD's fault.

Fortunately, even though my store closed, my bosses managed their personnel well enough to not let people go, as should have been the case with most of the closings. Yes a few baristas and shifts were let go from my closed store, but they were bad partners who would have been fired eventually anyway. We made sure to make homes for the great partners in other stores.

[javagirl666]

Transactions earn labor..got some slow ass new partner on POS?? Bad news. Im in the mid-west and have no trouble staffing my $14,000/wk store..If you or your manager is having issues maybe you should trouble shoot. As someone said before..shorter shifts. If you are all averaging 37/hrs./wk. you need to hire another partner.

[The Starbucks Truth Hurts]

The Darth Sidamo pile-on over labor just amazed me. Hey, Partners: if your store is adequately staffed to the point that you don't feel like you are going to lose your mind, I am happy for you. The reality at other locations is very different. There's an equation here to be written that takes into account how close you are to Seattle or one of the other regional center, the population of your area, and how sucky your work environment is. An equation with inverse probabilities.

[Darth Sidamo.]

I totally agree that we need to hire maybe even two extra partners. The issue is the lock down on number of employees. As a store we are not allowed to hire any additional employees. If we lose a partner we can replace them but there is a cap on how many we are allowed to have in store. This goes on not just in my district but the low number is synonymous for the surrounding region.

My store manager lives at the store and does his best to get us even the smallest of breaks. This however cannot go on forever. A SM working 50 hours so one person a week can take a day off each week is not the answer. As far as number of transactions our morning peak does about 170-180 transactions on average.

Our store does a 60-40 DT split. The registers are quite a bit away from each other. Turnover is very low. On average our partners have been with the company for 3 years and are very capable. at 37 hours average a week shorter shifts are not possible unless people work 6 days a week. This is not possible because Starbucks employs many students or people with lives that must go on.

[(former) FLA SM]

@ christinschu:

As has been related over the past year, I was literally promised by my DM that I would have a position waiting for me after my store closed. I was repeatedly told these exact words: "Trust me." Turns out I was lied to. When my store closed, I was told the nearest store with an SM position open was in a city approx. four hours away. Roughly half the stores in our district were closed in one year. Mine was the last to close of the original 600+ and any local openings were filled. Foolishly, I believed my lying DM.
I cannot speak to Bills situation directly, but I believe he was let go without explanation and was denied/ignored when requesting a hearing. I realize you didn't make the original comment saying he was "whining" but it's not whining when you have truly been wronged and then inform others.

[javagirl666]

I have never heard of there being a cap on the number of partners allowed on staff. If you are in the midwest, you should be on optimized scheduling and with that, they want the hourly partner average to be around 28-29 hrs./week. Thats the formula they use to determine if you are under/over staffed.

[Darth Sidamo]

Yes we are on optimized scheduling and no they tell us our hours have to be at 35 or more.

[DoubleShotOnIce]

Darth,
Who is the 'they' you speak of who say partners need to be at 35? In my region, and as far as I can tell company-wide, the rule is 35% of the partners need to be full-time (excluding manager), which is 32 or more hours.
You seem to have an answer/excuse for everything. Generally, that indicates a partner who always thinks they are right or are entitled to more than they deserve.
If I'm wrong, I'm sorry, but if it is REALLY that bad, you have an awful DM or RD. I suggest a call to compliance.

[Darth Sidamo.]

Awful DM is correct. As for full time we have one older employee that works less than 30 hours, mainly mornings (every store has one) The rest, even those in school, work full time. I have had 3 SMs at this store and all have asked to hire more employees to lower average hours.

As far as ethics I have seen them called many times from a store manager showing up intoxicated to work, to a manager insensitively making hurtful comments to a barista with a disability. The last one actually had most of the stores partners have an intervention per say with another DM about it three different times (One group of partners went to her about it, nothing happened and they quit, new partners, happened with them etc).

Ethics sadly is not very effective as many of these are either investigated by whoever is the problem, or too much of it is brushed off.

[shift misto]

RE: Labor
yes it sucks in general. BUT if you have a line, you will gain labor by having someone else there. your labor is eccrued in 15 min intervals. if one more person staffed means that you will have more transactions in that 15 minute period, you will earn labor by spending it. of course, you have to have enough of those rush rush rushes to make it worth a persons shift, even if just 4 hours, but they can pay for themselves and relieve everyone else a little stress. of course, that doesn't do anything to help the 'one customer ever 3 minutes' situation that leaves the 2man closing crew painfully behind.

@black apron boy.
good tea information. i didn't know that - thanks!!! :)

Re: Tea Refills on hot tea.
we don't charge for hot water. but you can hit the water button with steamed to nomnom some labor.