In june with coffee prices down and realizing they can make their profit numbers, starbucks started emailing their clients and offering free drinks(and I don't mean buy one get one, I mean just show up with your card and get a free drink) and they were also selling a 10 dollar starbucks card for the price of 5 dollars on Groupon, they booked all that as sales to show that sales were up when in reality they pulled the wool over wall street by giving away their products. If you remove all the free give aways their sales were down 3 percent.
Minus the 600 or so million in giveaway drinks( 400 to 500 million in free drinks and around 200 million in the 10 for 5 deal) from their sales and you get a 3 percent drop in sales year over year. Yes they did what they had to do, but for people to cheer the results that are FAKE is ridiculous. Amazon is the king of doing this, always lowering the price of their kindle when they are falling short at the end of a quarter and now starbucks is doing it too, that is a sign that things going forward are gonna fall apart as soon as wholesale coffee prices go back up to their much higher historical price, then their hands will be tied in doing that kind of stunt because it will kill their earnings. They raised their prices to the moon over the last few years when wholesale coffee prices hit an all time high, now with wholesale prices near all time lows they are reaping the benefit of that because they are robbing their customers by not lowering the price of their coffee drinks. etc...
I think we all know what really happened, teengirlsquad78 was the one who 'called' her FRIENDS in for free coffee and SBUX figured it out when their sales dropped. Fortunately that security camera cold busted the perp and SBUX fired teengirlsquard78 for theft. Being unemployed and unable to collect unemployment since teengirlsquad78 was fired for a valid reason, she now makes random things up on a MB that won't affect the stock price to try and vindicate herself. So LAME...
Have you ever managed a business before? Probably not. A free drink is rung up ( shows up as a sale) and then you minus the price of the drink ( shows up as advertising) and therefore it counts towards your sales and it affects your profits. They mailed out over 500 million dollars worth of free drinks just in the US, minus that from there total sales and where does that leave you and that is not counting the other gimmicks mentioned above.
The easiest think for any business is to show higher sales, the problem is showing higher profits. The only reason Starbucks is showing higher profits is they raised their prices and the price of coffee got pummeled, when coffee prices go back up (and they will), their profits will drop to almost nothing.
I guess Joey, you need to go back to sucking your thumb.
Um, a free drink would show up as $0 in sales. It would increase their cost of goods sold, but wouldn't affect the revenue amount. Where did you get the 3 percent number? Where did you get any of the information you're stating as fact?
Sorry but a free drink is rung up at normal price (adds to sales) and then it is taken out as a promotion(affects profits), an accounting gimmick. As far as the 3 percent, if you back out the fake sales from the reported sales, you get a 3 percent actual drop in sales. Profits are not a problem right now since the cost of coffee is at all time low.