Starbucks Corp. (NASDAQ: SBUX) saw its shares dip on Wednesday after the company announced that it would be undertaking new initiatives to help grow the company in the United States and China. Part of these initiatives would be accelerating its store closures as a result of sluggish sales.
According to the coffee chain, it is “optimizing its U.S. store portfolio,” including shifting new company-operated store growth to underpenetrated markets, slowing licensed store growth and closing stores. On the store closure front, Starbucks said that it is increasing the closure of underperforming company-operated stores in its most densely penetrated markets to roughly 150 in fiscal 2019 from a historical average of up to 50 annually. The firm believes this will result in a slightly lower growth rate in net new company-operated stores.
In the coming fiscal year, the company also expects newer digital initiatives to contribute one to two points of comparable growth in the United States, supported by a redesigned Starbucks Rewards program that provides customers more choice around redemptions and payment, as well as expanded personalization capabilities for customers that have a digital relationship with the company.
Looking ahead, the company now anticipates 1% growth in comparable store sales globally in the fiscal third quarter of this year.
Kevin Johnson, Starbucks president and CEO, commented:
While certain demand headwinds are transitory, and some of our cost increases are appropriate investments for the future, our recent performance does not reflect the potential of our exceptional brand and is not acceptable. We must move faster to address the more rapidly changing preferences and needs of our customers. Over the past year we have taken several actions to streamline the company, positioning us to increase our innovation agility as an organization and enhance focus on our core value drivers which serve as the foundation to re-accelerate growth and create long-term shareholder value.
Shares of Starbucks were last seen down about 8% at $52.81, with a consensus analyst price target of $63.88 and a 52-week range of $52.58 to $61.94.
24/7 Wall St.100 Million Americans Are Missing This Crucial Retirement Tool
The thought of burdening your family with a financial disaster is most Americans’ nightmare. However, recent studies show that over 100 million Americans still don’t have proper life insurance in the event they pass away.
Life insurance can bring peace of mind – ensuring your loved ones are safeguarded against unforeseen expenses and debts. With premiums often lower than expected and a variety of plans tailored to different life stages and health conditions, securing a policy is more accessible than ever.
A quick, no-obligation quote can provide valuable insight into what’s available and what might best suit your family’s needs. Life insurance is a simple step you can take today to help secure peace of mind for your loved ones tomorrow.
Click here to learn how to get a quote in just a few minutes.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Latest from 24/7
