Starbucks lowers profit forecast, speeds closures of poorly performing stores

The company closed over 8,000 stores in the United States for the afternoon to conduct racial-bias training for its employees following an incident invo

FILE PHOTO: A Starbucks store is seen inside the Tom Bradley terminal at LAX airport in Los Angeles, California, U.S. on October 27, 2015.

Starbucks said it expects global comparable store sales to rise 1 percent in the third quarter, below the 3 percent increase estimated by analysts, according to Thomson Reuters I/B/E/S.

"We must move faster to address the more rapidly changing preferences and needs of our customers."Our recent performance does not reflect the potential of our exceptional brand and is not acceptable", CEO Kevin Johnson said in a statement".

For a chain that has so many stores that they often in sight of each other, Starbucks said Tuesday is finally ready to pull the plug on more of its losers. That alliance frees Starbucks to focus on improving its mainstay US cafe business, where traffic growth had stalled.

The controversy was the biggest public relations test yet for new Starbucks Chief Executive Kevin Johnson, who already was fighting to boost traffic to Starbucks amid competition from coffee sellers ranging from hipster cafes to fast-food chains and convenience stores. 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.

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The former Chairman Howard Schultz stepped down earlier in June. Most of the new locations it opens will be in underserved markets.

The company faced a backlash earlier this year when two black men were arrested at one of the company's Philadelphia locations when staff called the police.

Starbucks also highlighted a focus on teas, health-and-wellness options and "product innovation around core beverages". Additionally, it plans to cut general and administrative costs, and has hired a consultant to help in this area.

The chain, which operates more than 8,000 USA 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.

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