Starbucks provides weak sales outlook, will close 150 stores

Starbucks provides weak sales outlook, will close 150 stores

According to Bloomberg News, the comparable sales performance would be Starbucks' weakest in nine years.

Meanwhile, sales are expected to grow just 1 percent in the next quarter.

The company anticipates lower net new store growth in the United States for fiscal 2019 and said it would address rapidly changing consumer preferences by introducing new cold drinks like a mango dragon fruit beverage and focusing on growing health and wellness trends.

"Our recent performance does not reflect the potential of our exceptional brand and is not acceptable", CEO Johnson said in the statement. The company will hike its dividend 20% to 36 cents per share.

Earlier this month, Howard Schultz stepped down as president, which fueled reports that he was gearing up for a 2020 presidential run.

In early May, Swiss-based Nestle (NESN.S) said it would pay Starbucks $7.15 billion for exclusive rights to sell Starbucks coffees and teas.

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Johnson laid blame for the disappointing sales growth at the feet of the once-vaunted Frappuccino, which accounted for 14 percent of revenue at company-operated stores as recently as three years ago.

It has missed analysts' estimates for same-store sales in the US -dominated Americas region in five of the last six quarters.

"In this last quarter, we had an unplanned initiative related to the incident in Philadelphia that culminated in closing stores", Johnson said on a call from the Oppenheimer Consumer Conference on Tuesday afternoon. One area executives have targeted is wasted product, which costs Starbucks $500 million a year in the U.S.

In March, Rosalind Brewer, Starbucks' COO, also said the market for vegan food was significant and that the company was working on launching more plant-based food and drinks.

The company apologized to the two men, and closed all locations for a half day to give employees diversity training.

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