Starbucks to close 150 locations in 2019

Daniel Fowler
June 20, 2018

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%.

"We must move faster to address the more rapidly changing preferences and needs of our customers", Kevin Johnson, Starbucks' CEO, said in a statement.

It has missed analysts' estimates for same-store sales in the USA -dominated Americas region in five of the last six quarters.

Starbucks Corp. said it will close more coffee shops in the increasingly crowded USA market where it was a pioneer.

The company also said it expects 1 percent growth in global sales for the third quarter, a period that encompassed an uproar over the arrest of two black men at a Philadelphia Starbucks.

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Starbucks shares are virtually unchanged for the year.

Chief financial officer Scott Maw said the company is piling another $5 billion onto its already planned $20 billion budget for stock buybacks and dividends through 2020.

The former Chairman Howard Schultz stepped down earlier in June. In addition to the lost sales on that day and the costs of the training, Starbucks delayed its seasonal marketing push, which it would have begun in mid-April.

The Seattle-based company said it will close about 150 stores in fiscal 2019 in its most densely penetrated markets, 100 more than its historical average. "It is not an excuse", for the 1 percent growth rate, he added.

The chain, which operates more than 8,000 US stores, said the changes were made to address the weaker-than-expected sales growth, adding that several digital initiatives were expected to add 1% to 2% in comparable sales in fiscal 2019.

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