Starbucks stock fell in after-hours trading.
"Our recent performance dos not reflect the potential of our exceptional brand and is not acceptable", he said.
"The company's streamlining initiatives will enable greater agility in adapting more quickly to changes in consumer preferences, " the company stated. In April, Schultz worked closely alongside Chief Executive Kevin Johnson to help limit damage to the company's image after a racial profiling incident involving the arrest of two black men in a Philadelphia store. This was weaker than the forecast for 2.9% growth according to Bloomberg.
In early May, Swiss-based Nestle said it would pay Starbucks $7.15 billion for exclusive rights to sell Starbucks coffees and teas.
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Starbucks will close 150 poorly performing company-operated stores next year, about three times as many as it typically closes. But the news was not all bad for investors.
Although business overseas has been booming and the chain has been opening more and more cafes, USA sales growth has stalled for the company that brought espresso to the masses. Outgoing company chairman Howard Schultz said the closing may have cost the company tens of millions of dollars, although Johnson said that is not an excuse for the sales performance.
Starbucks also announced a number of strategic changes. "That becomes an area of concern for Starbucks".
On a conference call with analysts, CEO Kevin Johnson said those regions include the Midwest and the South, where Starbucks is far less ubiquitous than it is in Manhattan and Washington, D.C. The news was reminiscent of Starbucks' efforts a decade ago to close stores following years of aggressive expansion that led to softening comparable sales growth.
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.