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%.
He also pointed to the impact of the company's response to the April arrest of two black men in a Philadelphia store, including the May 29 afternoon closure of 8,000 US stores for anti-racial bias training.
The company said comparable sales growth at existing stores, a key measure of retail performance, was expected to be just 1 percent in the current quarter, despite a booming economy and a broadly healthy restaurant industry. Starbucks closed its US stores on May 29 to conduct racial-bias training for its employees.
"The company's streamlining initiatives will enable greater agility in adapting more quickly to changes in consumer preferences, " the company stated. Starbucks said it traditionally closes about 50 underperforming locations annually. Schultz had operated Starbucks at a growth rate that has made many people a lot of money, as stock prices have increased in eight of the last 10 years.More news: One Killed, Four Injured in Sweden Shooting
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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.
Starbucks closed 8,000 stores on the afternoon of May 29 to offer about 175,000 employees mandatory anti-bias training after two black men were arrested at a store in Philadelphia while waiting for a friend. It also said that it would return about $25 billion in cash to shareholders through buyback programs as well as dividend offerings - which was about a $10 billion increase from the previously announced target. One area executives have targeted is wasted product, which costs Starbucks $500 million a year in the U.S.
"Our growth has slowed a bit", said Starbucks CEO Kevin Johnson.