Starbucks announces additional US store closures (15.62)

SBUX decided to close approximately 600 underperforming company-operated stores in the U.S. market. This decision includes the 100 stores targeted for closure in the company’s previously announced plans. In addition, Starbucks now expects to open fewer than 200 new U.S. Company-operated stores in fiscal 2009. The majority of the store closures are scheduled to occur during the remainder of fiscal 2008 and H1 of fiscal 2009. Pre-tax charges related to the store closures include approximately $200M of asset write-offs to be recognized in Q3 of fiscal 2008. In addition, a projected $120 to $140M for lease termination costs and future lease obligations are currently expected, nearly all of which will be recognized in Q4 of fiscal 2008 and H1 of fiscal 2009. The aggregate pre-tax charges associated with the closures are estimated to be in the range of $328 to $348M. Upon the completion of the actions, cash charges are expected to result in a net cash outflow of approximately $100M. Conference call today at 17:30ET.