Chairman and Chief Executive Howard Schultz and other executives at Starbucks Corp. won’t receive salary increases in the next fiscal year, according to an internal memo sent this week. The move is part of the Seattle-based coffee chain’s effort to cut spending. All U.S. workers at the vice president level and above will not get raises for the coming fiscal year that starts at the end of September, the memo said. The memo first appeared on www.starbucksgossip.com and a Starbucks spokeswoman confirmed its authenticity. The memo also said that, based on Starbucks’s year-to-date performance, the company doesn’t appear likely to hit the financial targets that trigger management payouts.
EgyptAir to buy two Boeing 777s
Boeing says EgyptAir has ordered two 777s. The order worth $529 million at list prices previously had been attributed to an unidentified customer. The airline is upgrading its widebody, long-haul fleet. Boeing says the business class seats in the new 777s will recline into beds.
Dell’s profit shortfall hammers stock price
Computer maker Dell Inc. said Thursday its fiscal second-quarter profit fell 17 percent, hurt in part by lower prices and restructuring charges. The earnings were short of Wall Street estimates, and Dell shares plunged. For the three-month period that ended Aug. 1, Dell’s earnings dropped to $616 million, or 31 cents per share, from $746 million, or 32 cents per share in the same period last year. Excluding amortization and business realignment charges, Dell said it would have earned 33 cents per share. Analysts surveyed by Thomson Reuters had forecast a profit of 36 cents per share. Investors sent Dell shares down $2.54, or 10 percent, to $22.67 in after-hours trading. Earlier, the stock dropped 42 cents to close at $25.21.
Online discounter offers cheap shipping
With gas prices high and consumers stretching shopping dollars, competition is heating up online for deals — and a discount retail site hopes to fan the flames by shipping orders for $1.95. Chicago-based Enable Holdings Inc. plans to launch RedTag.com today and sell retailers’ excess inventory at a fixed price. Its shipping charge will undercut a similar site, Overstock.com Inc., which charges $2.95 for standard ground shipping. “We’re willing to take less for shipping because we think you’ll buy five more items from us,” said Enable Holdings’ Chief Executive Jeffrey Hoffman.
Banks increase borrowing from Fed
Banks borrowed more over the past week from the Federal Reserve’s emergency lending program, while Wall Street firms passed for the fourth straight week. A Fed report released Thursday said commercial banks averaged $18.47 billion in daily borrowing over the past week. That compared with a daily average of $17.51 billion in the previous week. For the week ending Aug. 27, Wall Street firms didn’t take out any loans, the fourth straight period of no action. Their borrowing, however, averaged as high as $38.1 billion a day in early April.
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