You Know It's Bad When Starbucks Closes....

Starbucks to close 100 stores
Birmingham Business Journal

Starbucks Corp. said it will close 100 stores and slow down its opening of new U.S. stores from 1,600 to 1,175 this year.

"By reducing the number of openings, we expect to optimize our resources and potentially reduce cannibalization of our existing stores," said CEO and Chairman Howard Schultz in a statement.

Starbucks did not say if any of the store closings would take place in the Birmingham area, where it has more than 20 locations.

The Seattle coffee giant announced the closings and slowdown plan when reporting that its first-quarter earnings increased 2 percent, to $208 million, or 28 cents a share, from $205 million, or 26 cents a share, in 2006. Total revenues rose to $2.8 billion from $2.4 billion a year earlier. Analysts polled by Thomson Financial Network expected first-quarter earnings of 27 cents per share and revenue of $2.8 billion.

Starbucks said it expects "low double-digit earnings per share expansion" for this fiscal year and Schultz called 2008 "a year of refocus and renewal for Starbucks."

Starbucks (Nasdaq: SBUX) shares dropped 1.46 percent, to $18.94, in after-hours trading.