Last week coffee supremo Starbucks (Nasdaq: SBUX) announced it would close 600 stores in the US and slash 12,000 jobs. But Irwin Greenstein still considers the company a good long-term investment. He says lurking behind the grim headlines is an encouraging growth story in emerging markets.

Take a look at the chart, and you’ll see that SBUX looks like a massive cardiac arrest…

But there’s a much bigger part of the story that, in fact, Starbucks played down. Like a good corporate lap dog, Big Media ignored this important piece of news — depriving investors of a key piece of market intelligence that could make Starbucks a good long-term play.

For us emerging-market bulls, this glossed-over aspect of the Starbucks’ closures proves once again that alternative investments in growing nations could be the best opportunity of our time.

Here’s what Starbucks and Big Media didn’t tell you…

During same time that the company plans to close stores, it will continue a very aggressive international expansion with a heavy emphasis on emerging markets.

In 2009, Starbucks expects to open about 1,000 new foreign stores. If successful, it would mark the first time that international expansion outpaced the U.S. Starbucks’ biggest foreign growth has been in Asia, the Middle East, and Latin America — with Europe holding a steady pace. So as Starbucks throttles back here in the U.S., it’s revving up growth overseas.

“The response to the Starbucks brand has been phenomenal in our international markets,” Howard Schultz, CEO of Starbucks, told Fortune in January.

That was about the same time that Starbucks entered into a partnership with Kishore Biyani, founder of the biggest publicly traded Indian retailer, to open 1,000 new outlets in India.

“When you look at that market and couple it with China, those are two places that Starbucks can continue to grow for a long time,” Schultz told Bloomberg that very same week he spoke with Fortune.

You would have to read the Starbucks Q1 2008 10-Q report to see the magnitude of the chain’s enthusiasm for international development.

You’d see that while U.S. operating income declined by 4% to $310.9 million, international operating income grew 63% to $54.1 million. This remarkable Q1 revelation set the stage for Schultz, chairman at the time, to take on the additional role of chief executive officer, effective immediately, replacing Jim Donald, who left the company.

In conjunction with Schultz’s new hands-on role, Starbuck’s announced a series of initiatives “aimed at driving shareholder value…” Among those new initiatives Starbucks said it was “accelerating expansion and increasing the profitability of Starbucks outside the U.S., including redeploying a portion of the capital originally earmarked for U.S. store growth to the international business.”

When you read the table below, it’s obvious that most of Starbuck’s new international initiatives could take place in emerging markets such as Australia, Brazil, China, Thailand and Turkey — as well as Western Europe.

Few people have probably seen this table. But it completely substantiates Schultz’s remarks three weeks ago to the German newspaper Frankfurter Allgemeine Zeitung (FAZ): “The international business is cushioning the weakness in America at the moment,” he said.

He also told FAZ that Starbucks plans to license 150 new coffee shop locations in Germany, Britain and France in the next three years, with 120 of those in Germany.

Starbucks, he said, is aiming to raise its sales abroad by 20% per year over the next three years while annual growth of only 6% is expected in the U.S.

In its multi-pronged expansion, Starbucks opened its first store in Argentina on May 30th. Prior to the new Buenos Aires store, Starbucks had a presence in seven Latin American countries, including 18 stores in Brazil. The president of the company’s Latin American division said he expects to open four new stores in Argentina by year-end.

The company is also widening its footprint in China. This year will see 80 new locations added to its existing 300 Chinese stores.

Starbucks is now positioning itself to set up shop in Easter and Central Europe. Also in April, the company opened its first story in Bucharest, Romania. It’s a
joint venture with Marinopoulos Holding SARL. The Bucharest outlet followed on the heels of Starbucks first Moscow store.

With nearly 4500 coffeehouses in 45 countries, Starbucks is fully committed to emerging and other foreign markets. Whether or not the company pans out as a long-term investment is anyone’s guess. Still, Starbucks is following a path set down by the likes of GM, IBM and Caterpillar (CAT) where emerging markets are an alternative path to continued growth.

Source: What Starbucks Didn’t Tell You