Starbucks to cut more costs

By Lisa Baertlein

NEW YORK (Reuters) - Starbucks (SBUX.O), whose sales are slowing as U.S. consumers buy fewer premium coffee drinks, said on Thursday it does not expect to meet Wall Street estimates for the current quarter and would double its cost cuts for the full year.

Company executives, speaking at an analyst day in New York, also warned that Starbucks' results had not hit a bottom in the prior quarter, as previously suggested.

Chief Executive Howard Schultz noted that consumer spending patterns were erratic in a U.S. recession and said the holiday selling environment was tough.

The coffee shop operator's shares, which had jumped as much as 9 percent earlier in the day, pared their gains after the outlook was announced. They were up 1 percent in afternoon trading.

"We do not expect to meet current consensus estimates for this quarter," said Starbucks Chief Financial Officer Troy Alstead.

In the first nine weeks of the fiscal first quarter, which began in late September, Alstead said sales at U.S. stores opened at least a year fell 9 percent.

"We did see some deterioration of comp growth" in the fiscal first quarter, which ends in December, he said.

Analysts on average were expecting earnings of 22 cents a share on revenue of $2.77 billion (1.88 billion pounds) for the quarter. Starbucks did not provide its own forecasts for the quarter or fiscal year.