Starbucks set to close 150 stores

Signage at a Starbucks store in New York

After seeing a slump in growth, the company has announced that it will be closing 150 stores in 2019.

The company said global comparable store sales were on pace to rise 1% in the current third fiscal quarter, far below the 3% jump Wall Street was expecting.

Starbucks shares slipped almost 2 percent in after-hours trading.

"The company's streamlining initiatives will enable greater agility in adapting more quickly to changes in consumer preferences, " the company stated.

According to Bloomberg, the nationwide chain plans to reduce its amount of stores in "densely populated markets" across America, with the newly announced CEO saying "our shareholders deserve better".

Earlier this month, Starbucks raised the price of its brewed coffee 10 cents to 20 cents at the majority of its company-owned stores stateside and company executive chairman Howard Schultz stepped down.

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On Tuesday, Starbucks also announced plans to close some 150 US cafes, triple the number it typically shuts in a year, and open many fewer locations in its 2019 fiscal year, beginning in October, a result of intensifying competition that has seen new coffee chains, convenience stores and fast-food chains improve quality and cut prices aggressively.

Although business overseas has been booming and the chain has been opening more and more cafes, US sales growth has stalled for the company that brought espresso to the masses.

When Starbucks released its second-quarter earnings in late April, the chain had net revenues of $6 billion, a 13.9 percent increase from $5.29 billion in the same period in fiscal year 2017. One area executives have targeted is wasted product, which costs Starbucks $500 million a year in the U.S.

Starbucks said it would look to open more stores in under penetrated markets and explore strategic options to license company-operated stores.

Analysts also pointed to lower-than-expected same-restaurant sales in five of the previous six quarters at Starbucks' Americas business, which is dominated by its roughly 8,000 USA cafes.

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