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Starbucks provides weak sales outlook, will close 150 stores
[FOXBUSINESS] Starbucks shares fell as much as 3% in after-hours trading Tuesday after the coffeehouse chain provided a weak sales forecast for its upcoming quarter and said it would shutter 150 stores in fiscal 2019.Maybe they can leave the bathrooms open? The Seattle-based company said it would close underperforming stores in "densely penetrated markets" and slow its rate of store growth. Starbucks said it traditionally closes about 50 underperforming locations annually. Starbucks said it expects same-store sales to grow 1% in its third fiscal quarter of 2017. Analysts had expected same-store sales to grow 3% in that period. "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," Starbucks CEO and President Kevin Johnson said in a statement. "We must move faster to address the more rapidly changing preferences and needs of our customers." Starbucks said it will return an additional $25 billion more to shareholders than initially planned in the form of share buybacks and dividends. The company will hike its dividend 20% to 36 cents per share. The chain, which operates more than 8,000 U.S. 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. Starbucks said it would provide additional details on its plans at an investor presentation on Tuesday afternoon. The changes came weeks after Starbucks Executive Chairman Howard Schultz announced he would leave the role in June. Schultz is widely rumored to have political aspirations. Posted by: Fred 2018-06-20 |
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