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Starbucks to close 150 cafes in US, amid poor performance

Historically, the Seattle-based company closed roughly 50 stores a year.


Reuters United States
Updated: 20-06-2018 07:07 IST
Starbucks to close 150 cafes in US, amid poor performance

Starbucks said it would be more important to explore the marketplace. China is the company's biggest growth driver with same-store sales rising 4 percent in the last reported quarter. (Image Credit: Twitter)

Starbucks Corp. forecasts on Tuesday slower sales growth in Wall Street is expected to close after 150 US cafes next fiscal year to boost performance, sending its shares down 2 percent after hours.

The world's largest coffee chain is facing both McDonald's Corp. and Dunkin 'Donuts .

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

The company anticipates lower net sales in the United States for fiscal 2019 and says it would be important to address the issue of consumer goods.

Starbucks' Executive Chairman and co-founder Howard Schultz said earlier this month that he is stepping away from the company on June 26, ending an era. In April, Schultz worked closely alongside Chief Executive Kevin Johnson to help out a racial profiling incident involving the arrest of two black men in a Philadelphia store.

"It seems fairly clear that the low-hanging fruit is on everyone's face," said Tony Scherrer, director of research at Smead Capital Management.

"At least in the Starbucks heavy markets, the people who are going to drink coffee are already drinking it."

Starbucks said it would be comparable to the third quarter, which is estimated to be 3% higher, according to Thomson Reuters.

"While certain claims are made in the future, our recent performance does not reflect the potential of our exceptional brand and is not acceptable," Johnson said in a statement.

Historically, the Seattle-based company closed roughly 50 stores a year.

Starbucks said it would be more important to explore the marketplace. China is the company's biggest growth driver with same-store sales rising 4 percent in the last reported quarter.

The company also said it would look to cut the costs of the process.

In early May, Swiss-based Nestle said it would pay Starbucks $ 7.15 trillion for exclusive rights to sell Starbucks coffees and teas. That alliance frees Starbucks to focus on improving its US mainstay business cafe, where traffic growth had stalled.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)

COUNTRY : United States

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