Starbucks says it will open fewer stores in the US this year than planned as Americans hit by an economic slowdown cut back on their coffees.
Instead, it will open more overseas stores to lift the chain's fortunes.
The coffee chain said that its profits for the three months to the end of December rose by less than 2% from the same period a year ago.
As well as grappling with a consumer slowdown, Starbucks faces higher milk prices and stiffer competition.
The chain plans to open 1,175 US outlets in the 2008 financial year, about 425 fewer than previously planned.
Meanwhile, it will increase international store openings by 75 outlets to 975.
Starbucks reported net profit of $208.1m in the three months to the end of December up slightly from $205m during the same period a year ago
Recession looming
Starbucks said sales at its US stores open for more than one year dropped 1% in the quarter.
"There's a macroeconomic headwind that we're all facing that strongly suggests that the consumer is in a recession," Starbucks boss Howard Schultz said.
Earlier this month, Starbucks sacked its chief executive Jim Donald and handed the reins back to its chairman and former chief executive, Mr Schultz.
The change was part of the coffee giant's plans to revive its fortunes, which also includes closing some US stores and slowing the pace of opening new ones.
Starbucks has been struggling in the US as hard-up consumers have cut back their spending on expensive coffee.
There has also been increased competition with the likes of Dunkin' Donuts and McDonald's introducing their own lines of gourmet coffee.
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