The run of bad press has seemingly caught up with coffee giant Starbucks, as the company told investors late Tuesday that the company is preparing to close roughly 150 shops that have underperformed.
The Seattle-based company announced Tuesday that it will close 150 underperforming stores in heavily penetrated markets, up from the usual rate of 50 closings a year.
Johnson said Starbucks has not reached saturation point in the US, but it will be more strategic about where it puts new stores, focusing on underpenetrated markets in "Middle America".
The Seattle-based company announced Tuesday that it will close approximately 150 underperforming stores in its most densely populated USA markets amid sluggish sales - up from its usual rate of 50 per year.
And not to be overlooked is the incident at a Philadelphia location that resulted in two black men being arrested after an employee called the police on them for being in the store without ordering anything.
Here, Johnson says the company still has work to do to improve in-store efficiently and make the most out of its loyalty programs. Outgoing chairman Howard Schultz said the training cost Starbucks "tens of millions" of dollars. It will also try to optimize the store formats it offers, from small mobile-order pickup locations to drive-through to more elaborate high-end Roastery and Reserve stores. China is the company's biggest growth driver with same-store sales rising 4 percent in the last reported quarter. At Starbucks, Frappuccino sales were down 3 percent this year through May.
Starbucks said it now expects earnings in the range of $3.23 to $3.26 a share for the current fiscal year, down about a dime from its previous targets.