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Starbucks Reduces Store Opening Plans
May 02, 2008

Seattle-based Starbucks Corp. has continued to refine its planned fiscal 2008 U.S. store openings given the current economic environment and its impact on financial results. The company lowered its U.S. store opening targets for fiscal 2008 to approximately 1,020 net new stores; 620 company-operated and 400 licensed stores. International store openings are expected to remain as previously announced at 975 stores. Capital expenditures for fiscal year 2008 are still expected to be approximately $1.1 billion, as the reduction in store opening investment is being offset by investment in the company's transformation agenda around innovation. "Despite the challenges of the current operating environment, we are focused on the parts of the business we can control such as store count, use of capital and controlling expenses, while still investing for the long term," said Pete Bocian, executive vice president and CFO of Starbucks. "We believe our plan balances these key objectives and drives long-term shareholder value." Starbucks plans to open significantly fewer new stores in the United States--over the 2009 to 2011 period--to less than 400 net new stores per year, opening approximately 250 company-operated stores in each of the three years. At the same time, the company plans to continue to accelerate its international expansion, targeting net new store openings as follows: approximately 1,050 in 2009; 1,150 in 2010; and 1,300 in 2011. Including a somewhat lower 2008 U.S. store target, total store count will be approximately 21,500 stores by the end of fiscal 2011, with the company's international presence growing from approximately 30 percent to more than 40 percent of the global store portfolio. The company expects capital expenditures of roughly $800 million per year, beginning in fiscal 2009. Of this amount, approximately 70 percent will be for investment in stores.

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