Starbucks (NYSE: SBUX) made news on Wednesday after the company announced that its current chief executive officer, Kevin Johnson, would be stepping down from the company. While a sudden CEO resignation generally isn’t good news, investors cheered after hearing that former CEO and founder Howard Schultz will likely take the reigns once again as interim CEO.
After five years of serving as CEO, Johnson stated that he wanted to step down for personal reasons, including enjoying his retirement. The company said that the decision was entirely Johnson’s and that he wasn’t pressured to leave by the board in any way. It’s possible Johnson wanted to retire even earlier but chose not to due to everything going on with the pandemic, having only now decided the time was right.
Effective April 4th, 2022, Schultz is expected to return to lead his coffee giant amidst growing inflationary pressures, supply chain issues, and labor costs. Many experts have said that bringing back Schultz seems like a way to reassure shareholders about the company’s stability during an otherwise uncertain time.
Morningstar equity analyst Sean Dunlop said that Schultz’ return “reads like a move that is working towards engineering stability with a brand that has seen a lot of trouble in the press over the last couple of weeks and months.
Dunlop added that one of Schultz’s first big tests in leadership would be how he handles the ongoing unionization efforts across U.S. stores. Although just six out of 9,000 company stores have successfully formed a union, over 120 stores have already filed union petitions. Unless Schultz finds an interim CEO quickly, which he likely won’t, it will be up to him to handle the growing unionization trend.
Schultz’s primary responsibility during this time will also be to help search for a new CEO and onboard the new candidate into his role as head of the company. The resignation of Johnson isn’t that surprising, especially considering how many other retail CEOs have chosen to retire. This includes Domino’s CEO Ritch Allison.
Starbucks also recently announced its plan to grow its global store count to over 55,000 by 2030. If successful, that would make it the single largest restaurant chain in the world by units, far more than McDonald’s, KFC, and Subway. The company also promised to shareholders that it could buy back over $20 billion in stock over the next three years.
Shares of Starbucks were up around 5.5% over the course of the day. Since 2022 began, however, shares have retreated more than 25.1%, with similar results being seen from a 12-month perspective. Over 19 Wall Street analysts are currently bullish on Starbucks, whereas 15 are neutral and none are bearish.
Starbucks Company Profile
Starbucks is one of the most widely recognized restaurant brands in the world, operating more than 34,300 stores across more than 80 countries as of the end of the first quarter of fiscal 2022. The firm operates in three segments: North America, international markets, and channel development (grocery and ready-to-drink beverage). The coffee chain generates revenue from company-operated stores, royalties, sales of equipment and products to license partners, ready-to-drink beverages, packaged coffee sales, and single-serve products. – Warrior Trading News
