Starbucks Corp., believing the gloomy market in the U.S. will hamper its sales, reduced its earnings forecast for the second quarter and full year on Wednesday.
The seller of coffee said that U.S. store sales fell by mid-single digits due to less traffic. It estimates its profit in the second-quarter will be of 15 cents per share compared to forecasts of 21 cents per share from analysts, according to Reuters.
The current economic environment is the weakest in our company's history marked by lower home values, and rising costs for energy, food and other products that are directly impacting our customers'' Starbuck's chief executive officer Howard Schultz said in the statement.
Global same-store sales rose just 1% in the first fiscal quarter been the lowest figure since 1992.
The company justified its losses on the second quarter on the closing of some stores and costs made to turnaround the business.
Profit in 2008 fiscal year may be lower than the 87 cents a share predicted in 2007, the company said. Analysts estimated 97 cents a share for the same year.
As Schultz returned at the head of the company, Starbucks announced at the beginning of the year that it would close about 100 stores and slow the pace of new domestic openings as the traffic on its stores has significantly fell.
The largest coffee chain has been setting up new strategies including training for employers in the U.S. to turnaround the development of the company which has been affected from a fast expansion and lower traffic.
Shares of Starbucks fell 12.61 percent in after day trading on Wednesday in Nasdaq to $15.63.