Coffee retail giant Starbucks announced Tuesday its plan to close approximately 150 stores across the United States as a result of "slow growth", sending the Seattle-based corporation's stock prices down almost 7%.
Johnson said Starbucks has not reached saturation point in the US, but it will be more strategic about where it puts new stores, focusing on underpenetrated markets in "Middle America".
Starbucks shares slipped almost 2 percent in after-hours trading. That period has seen big strategic moves in China, a globe-spanning partnership with Nestle, a high-profile racially charged incident and unprecedented corporate response, and executive chairman Howard Schultz's quasi-retirement, effective next week.
Starbucks shares are virtually unchanged for the year. Investors reacted to news that Starbucks could experience its worst performance in about nine years by sending the shares down 3.8% in pre-market trading.
The world's largest coffee chain has faced increasing competition from upscale coffee houses and fast-food chains like McDonald's Corp and Dunkin Donuts in recent years, missing analysts' estimates for same-store sales in the USA -dominated Americas region in five of the last six quarters.
"While certain demand headwinds are transitory, and some of our cost increases are appropriate investments for the future, our recent performance does not reflect the potential of our exceptional brand and is not acceptable", Starbucks CEO and President Kevin Johnson said in a statement.
"We lost momentum", Johnson said in a presentation to analysts at the Oppenheimer Consumer Conference on Tuesday. The overall number of stores will continue to increase, but that growth will be focused.