Coffee retail giant Starbucks announced Tuesday its plan to close approximately 150 stores across the United States as a result of "slow growth", sending the Seattle-based corporation's stock prices down almost 7%. "It is not an excuse", for the 1 percent growth rate, he added.
Starbucks' Executive Chairman Howard Schultz stepped away from the company in June surprising investors at time when the company has faced raft of worrying headlines. He said the entire "slushy coffee" category is in decline as consumers look for healthier options.
Starbucks said its third quarter forecasts had been impacted by its decision to close 8,000 stores on the afternoon of May 29 to provide roughly 175,000 employees with anti-bias training.
"In this last quarter, we had an unplanned initiative related to the incident in Philadelphia that culminated in closing stores", Johnson said on a call from the Oppenheimer Consumer Conference, according to CNN. And Tesley Advisory Group downgraded the stock to "market perform", cutting its share price target from $70, among the Street's highest, to $60, "pending stabilization in Starbucks' volatile trends". Maw said the company is bringing in an outside consulting firm to find cost savings, which Starbucks hopes to realize as soon as its fourth quarter. It says it is going to concentrate on opening stores in markets that have fewer locations. "That becomes an area of concern for Starbucks".
As for store closures, Johnson said the ones it's targeting are unlikely to be moved or replaced, with their business ideally moving to other shops and raising overall system performance. Starbucks closed its US stores on May 29 to conduct racial-bias training for its employees.
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