"When Starbucks Corp. ( NASDAQ: SBUX) releases earnings on October 29, the report will likely confirm what many people who follow that company believe. Same-store sales will still be in trouble. Revenue is expected to remain flat, and earnings are projected to decline. CEO Brian Niccol has frantically changed Starbucks' direction. The latest move was to close several hundred stores. Closing stores is rarely a good tactic when same-store sales are struggling."
"Niccol tends to give names to his significant corporate changes. The store closing one is called "Project Bloom." During the last earnings call, he referred to a "Back to Starbucks" strategy. This included creating new barista uniforms, reducing the number of menu items, positioning Starbucks as a local coffee shop, and laying off hundreds of corporate employees. Independent lead director Jørgen Vig Knudstorp will have to push the plan for a replacement."
Starbucks is expected to report continued weak same-store sales, flat revenue, and declining earnings when it releases results on October 29. CEO Brian Niccol has rapidly changed strategy, including closing several hundred stores, naming initiatives like Project Bloom, and pursuing a "Back to Starbucks" plan of uniforms, a smaller menu, local positioning, and corporate layoffs. The stock has declined 15% over the past year while the S&P 500 rose 17%, and a poor earnings report could push the price lower. The board may consider leadership options, with candidates including Howard D. Schultz, Josh Kobza, and Rick Cardenas.
Read at 24/7 Wall St.
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