- Starbucks will close 250 underperforming North American stores by fiscal 2026
- Closures will incur restructuring costs of about $300 million for the company
- The closures represent roughly 1% of Starbucks' 18,000 North American locations
Starbucks will close 250 underperforming coffeehouses in North America, the company said in a regulatory filing on Thursday, as CEO Brian Niccol steps up efforts to revive sales and turn around the coffee chain's business.
The latest closures come about a year after Starbucks shut several underperforming stores across North America as part of a broader restructuring. The company's Seattle Roastery was also among the locations closed during that period, according to reports
"We have carefully reviewed our North America coffeehouse portfolio and identified locations where we do not believe we can consistently deliver the experience we want for customers and partners or where we don't see a path to acceptable financial performance," Mike Grams, Starbucks chief operating officer, wrote in a letter addressed to employees, as reported by CNBC.
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The earlier restructuring was estimated to cost Starbucks around $1 billion as the company worked to streamline its operations and improve financial performance.
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Starbucks revealed on Thursday that the new closures will result in restructuring expenses of approximately $300 million. The closures account for about 1% of Starbucks' roughly 18,000 North American stores, with most of the closures expected to be completed by the end of fiscal 2026, as reported by Reuters.
In its July quarterly results, Starbucks raised its outlook for fiscal 2026. The company expects adjusted earnings per share (EPS) of $2.55 to $2.65, compared with its earlier forecast of $2.25 to $2.45 per share.
Starbucks also expected global same-store sales to grow by nearly 6% and US same-store sales to increase by more than 6%, up from its previous forecast of at least 5% growth in both markets.
"This was the quarter our momentum became truly measurable," CEO Brian Niccol said in a video shared with the company's earnings press release at that time.
In an interview with CNBC's "Squawk on the Street" on Thursday, Niccol added that a combination of cafe renovations, menu improvements and marketing has helped the company's image rebound among consumers. "I think they just feel better about the coffee house, and then ultimately they feel better about the Starbucks brand," he added.
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