The Seattle-based company stated that it plans to shut more unprofitable stores in big US cities in the fiscal year 2019 and will slow the pace at which it opens new stores.
For the upcoming quarter, Starbucks provided weaker-than-expected sales outlook. The company expects just 1% rise in its same-store sales, much below the analysts’ estimate of 3%.
The strategic plans — which includes accelerating growth in China and US, focusing on shareholder return, as well as expanding the global reach of the company — are expected to boost the company’s returns. The company now plans to return approx. $25 billion in cash to its shareholders either through share buybacks or dividends through 2022. Starbucks declared a 20% hike to its dividend to a quarterly return of $0.36 a share.
“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,” said CEO Kevin Johnson in a statement.