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Starbucks' Schultz Has Positive Message Of Recovery

Howard Schultz was in London yesterday, reporting Starbucks surprisingly perky quarterly results from outside the U.S. for the first time. David Teather suggests that the founder/ chairman/ president/ CEO was perhaps trying to patch things up across the pond after remarking last year that the UK economy was in a spiral. Teather also took the occasion to observe Schultz as he sat with a dozen young people who had overcome problems such as drug dependencies and abusive parents.

Schultz told them of his own rise from poverty in Brooklyn with a homespun story that Teather says verged on the hokey but, in the end, captivated the listeners who were all part of a social program that Starbucks sponsors. He told them that he had once been in a similar place: "I was fearful, I was insecure, I was somewhat angry, you know: 'Why don't I have the same privileges as everybody else?'"

Schultz also announced yesterday that Starbucks saw a 4% gain in same-store sales and profits of $353 million for its first quarter, a 200% boost. And he admitted to other gaffes in the past, such as his company's rapacious quest to grow in the face of a shifting economy. "The big issue I think was that growth is not a strategy, it is a tactic, and if growth becomes a strategy I don't think it is an enduring one. I think growth covers up mistakes."

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