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Starbucks Coffee Japan Ltd., the Japanese unit of Starbucks Corp. (NasdaqNM: SBUX), announced on Wednesday that profits for the first half of the business year fell 55%, according to Rueters.
Net profit for the period April through September was 220 million yen ($1.8 billion) as compared to 489 million yen for the previous year period.
Sales were up 22 percent to 27.5 billion yen in the first half, due to 109 new store openings since September 2001. Excluding new stores, sales have dropped for the fifteenth straight month.
The company announced that it will slow new store growth to 80 stores for the next business year as compared to a projected 115 for this year. It also expects to close 5 to 10 underperforming stores per year.
"We felt it was time to slow down the pace of new store openings and put our existing stores back on the path to sales growth," said Yuji Tsunoda, Starbucks Japan representative director and CEO, at a news conference.
Starbucks Japan stock has spiraled downward, hitting a record low of 10,000 yen before this announcement, down 90% from a high of 84,300 last November.