Nov. 11 (Bloomberg) -- Starbucks Corp. Chief Executive Officer Howard Schultz backed away from his goal of opening 40,000 stores after the world's largest chain of coffee shops reported fourth-quarter profit that plunged 96 percent.

Starbucks fell in New York trading today after saying 2009 earnings per share may be as low as 71 cents or as high as 90 cents, depending on how steeply sales deteriorate. In July it forecast earnings per share of 90 cents to $1. Analysts had estimated 87 cents.

Sales at stores open at least 13 months, a key measure of retail performance, declined 8 percent in the U.S., more than Starbucks expected, as consumers paying higher gasoline and grocery prices cut back on premium coffee. The results and Schultz's retreat underscored the company's need to focus less on growth and more on profits.

``This is not a time for lofty goals,'' Schultz said yesterday in a telephone interview.

Fourth-quarter net income fell to $5.4 million, or 1 cent a share, from $158.5 million, or 21 cents, a year earlier, Seattle- based Starbucks said yesterday. Excluding costs to close underperforming stores and cut jobs, the company earned 10 cents a share, missing analysts' average estimate by 3 cents.

``The economy is not cooperating,'' Emily Sanders, the CEO of Sanders Financial Management in Atlanta, said in an interview on Bloomberg Television. ``They are fighting an uphill battle.''

Fewer Cafes

Starbucks declined 21 cents, or 2.1 percent, to $9.99 at 4 p.m. in Nasdaq Stock Market composite trading. Yesterday, the stock lost 2.9 percent in after-hours trading following the earnings report. The shares have lost 51 percent this year.

The coffee chain said it will open 700 net new stores outside the U.S. in 2009, down from the 900 it previously forecast. Same-store sales overseas were little changed in the fourth quarter, primarily because of weakness in the U.K., Starbucks said.

The company will end 2009 with 20 fewer stores in the U.S. than when it started the year.

Same-store sales in October dropped less than they did in the fourth quarter, signaling a possible bottom to the decline, Schultz reiterated yesterday in the interview, without specifying the monthly figure.

If the company's same-store results for the year ending in September 2009 are similar to October's, earnings per share will grow by 20 percent, he said. Starbucks said profit growth would be flat even with a 7 percent decline in same-store sales.

Years of Growth

``That in itself is a very big conclusion for us to be able to share because of the work we've done in 2008,'' Schultz said.

Schultz is now betting on a raft of new initiatives to boost sales in existing cafes as the chain weans itself from years of growth driven by store development. The chain doubled in size to more than 16,000 stores since 2004 as it reached for its ultimate aim of more than twice that number. Tightening credit markets, the U.S. housing market collapse and low consumer confidence brought those plans to a halt.

Starbucks said July 1 it would close 600 underperforming cafes in major U.S. cities, 70 percent of which were less than three years old. The company is eliminating as many as 13,000 jobs, the most in its history. It also shut three-quarters of its 84 stores in Australia, backing away from a market it entered eight years ago.

Starbucks opened a net total of 883 new stores in the U.S. in 2008, less than it opened in 2007, Chief Financial Officer Pete Bocian said during a conference call after the results.

The chain retrained its baristas to improve the way they made espresso, introduced a milder coffee to encourage afternoon purchases, and added a protein smoothie drink and oatmeal to its food lineup. Executives also enhanced its customer loyalty-card program with increased discounts and gave away more free coffee to lure consumers back.

The average fourth-quarter estimate in a Bloomberg survey was 13 cents a share, excluding one-time items.

To contact the reporter on this story: Duane D. Stanford in Atlanta dstanford2@bloomberg.net.

Last Updated: November 11, 2008 16:19 EST