Starbucks announces it's closing 150 stores in 2019

Signage at a Starbucks store in New York

Signage at a Starbucks store in New York

Starbucks will close 150 poorly performing stores in 2019.

Analysts were expecting same-store sales to grow by about 3 percent during the third quarter of 2018, but sales are only on pace to increase by 1 percent.

"The company's streamlining initiatives will enable greater agility in adapting more quickly to changes in consumer preferences, " the company stated.

Here, Johnson says the company still has work to do to improve in-store efficiently and make the most out of its loyalty programs.

"The competitive environment has really become a lot stronger in the US and a lot of that is the fast-food chains really improving the quality and breadth of their offerings in terms of hot beverages and breakfast", said Bloomberg Intelligence analyst Jennifer Bartashus. That alliance frees Starbucks to focus on improving its mainstay US cafe business, where traffic growth had stalled.

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.

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Johnson indicated that the store closings would be mostly in major metro areas, where wage expectations and other regulations make it hard to operate at a greater profit.

He'd relinquished his CEO title to Johnson in April 2017.

Starbucks' Executive Chairman Howard Schultz stepped away from the company in June surprising investors at time when the company has faced raft of worrying headlines. One area executives have targeted is wasted product, which costs Starbucks $500 million a year in the U.S.

Starbucks also said it will shift new store openings to under penetrated markets and slow licensed store growth.

On Tuesday, Starbucks said that it will return more cash to shareholders-about $25 billion in buybacks and dividends through fiscal 2020, representing a $10 billion increase from the previous guidance.

The company also said it would look to cut general and administrative expenses with plans to partner with an external consultant to speed up the process.

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