Starbucks to close two Santa Monica stores in latest wave of cuts
Starbucks will close 250 underperforming stores in North America, including two in Santa Monica. The company expects $300M in charges, with $200M for lease exits and severance. U.S. same-store sales rose 7.9% in Q2, while revenue fell 1% to $9.3B. The closures are part of a turnaround effort, 'Back to Starbucks,' with 1,500 store renovations planned.
How this was made
The 30-second read
Why it matters
The announced closures represent the latest phase of cost reduction, with immediate earnings impact from lease termination fees and severance.
Market read
The announcement introduces a material restructuring charge for a large-cap consumer discretionary name, likely influencing short‑term price action.
What to watch
Potential cost savings from lease exits and the ongoing 'Back to Starbucks' renovation program may offset the $300M charge.
Background
Starbucks is executing a multi‑year turnaround plan, having already closed stores and cut jobs in prior years.
Ticker impact
Starbucks announced the closure of about 250 North American stores with $300M in charges, a fresh restructuring move.
Potential near‑term downside pressure on SBUX price, 2‑4% decline over the next week.
Large charge and reduced footprint suggest lower near‑term profitability; however, long‑term efficiency gains could offset later.
Market effects
Highlights pressure on the broader coffee shop and quick‑service restaurant sector as operators reassess store economics.
North American consumer‑discretionary stocks may see modest pullback amid restructuring news.
Limited to U.S. and Canadian markets; minimal global ripple.
Counterpoint
The closures could improve same‑store sales and margins, positioning SBUX for stronger growth once the restructuring completes.
Key entities
- ExecutiveMike Grams
Chief Operating Officer who communicated the closure plan.
