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Get Four
|  | FEBRUARY 3, 2005
 WORD ON THE STREET Citigroup Downgrades Starbucks Analyst Mark Kalinowski says a lower-than-expected same-store sales rise hints at growing traffic issues Starbucks (SBUX ) posted 7% higher January same-store sales. Citigroup downgraded the shares to hold from buy. Analyst Mark Kalinowski says the 7% same-store sales rise is a key part of the downgrade, as he had forecast 10% growth. He says the miss hints at growing traffic issues. Kalinowski says he had thought 30%-plus growth in the Starbucks Card over the December quarter would lead to accelerating traffic gains in January, but he now fears underlying fundamentals may be weaker than expected (he notes the organic monthly comparison is the lowest number seen in 37 quarters). He also says upside to operating margins looks more limited than he thought. The analyst cut his 25-cent second-quarter EPS estimate to 24 cents, his $1.18 fiscal 2005 (ending September) forecast to $1.17, and his $1.44 projection for fiscal 2006 to $1.43.  All of the views expressed in this research report accurately reflect the research analyst's personal views regarding any and all of the subject securities or issuers. No part of analyst compensation was, is or will be, directly or indirectly related to the specific recommendations or views expressed in this research report. Standard & Poor's Regulatory Disclosure Any advice, analysis, or recommendations contained in articles labeled "Insight from Standard & Poor's" reflect the views of Standard & Poor's, which operates separately from and independently of BusinessWeek Online. It is possible that BWOL may from time to time publish information that is not consistent with advice, analysis, or recommendations that are published by Standard & Poor's. Standard & Poor's and BusinessWeek Online are each units of The McGraw-Hill Companies, Inc. Get BusinessWeek directly on your desktop with our RSS feeds.  Add BusinessWeek news to your Web site with our headline feed. Click to buy an e-print or reprint of a BusinessWeek or BusinessWeek Online story or video. To subscribe online to BusinessWeek magazine, please click here. Learn more, go to the BusinessWeekOnline home page  | | |
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