Starbucks posts first loss

By Lisa Baertlein

LOS ANGELES (Reuters) - Starbucks (SBUX.O) posted its first quarterly loss as a public company on Wednesday and said its U.S. coffee chain would shrink in the year ahead, but investors stunned by months of uncertainty sent shares up 4 percent as it stuck by its profit target for 2009.

Starbucks had been an engine of steady expansion since it went public in 1992, but sales growth has been slowing in the United States for more than a year, and the problem worsened as the housing market slumped and gas prices rose.

On Wednesday, the company lowered its 2008 profit forecast, saying fewer customers were visiting U.S. stores and costs were rising.

Chief Executive Howard Schultz warned that U.S. consumers were still hurting and cut the 2008 U.S. store-opening target for the third time this year.

"We want to be as cautious as possible and not over-expand at a time when the consumer may be under significant pressure," Schultz said on a conference call.

He also lowered 2008 and 2009 targets for opening international stores. Overseas growth had been cast as the growth engine of a recovering company.

Morningstar analyst John Owens said Starbucks isn't yet out of the woods.

"Over the long run, I think Starbucks has very good prospects for turning the business around, but whether we really start to see some benefits in 2009, that's uncertain," Owens said.