NEW YORK (Standard&Poor's) Nov. 12, 2008--The ratings on Seattle-based Starbucks Corp. (BBB/Stable/A-2) remain unchanged after the company announced fourth-quarter and fiscal 2008 earnings on Nov. 10, 2008. Credit metrics deteriorated as expected during the fourth quarter due to a very difficult consumer environment—net profit for the quarter dropped 97% from the same quarter a year ago, but this was largely due to $99.2 million of restructuring costs. For the year, leverage increased to about 3x for the year ended Sept. 28, 2008, from 2.6x the prior year and interest coverage weakened to about 4.4x from 6.1x during the same period. These metrics are weak for the rating, but our assessment of Starbucks' business risk is still a positive
