Starbucks to close 150 stores amid slowing sales

The company closed over 8,000 stores in the United States for the afternoon to conduct racial-bias training for its employees following an incident invo

Starbucks shares fell as much as 3% in after-hours trading Tuesday after the coffeehouse chain provided a weak sales forecast for its upcoming quarter and said it would shutter 150 stores in fiscal 2019.

Starbucks now operates about 13,900 locations in the US, putting it within sipping distance of the 14,400 restaurants operated by McDonald's.

The company said comparable sales growth at existing stores, a key measure of retail performance, was expected to be just 1 percent in the current quarter, despite a booming economy and a broadly healthy restaurant industry. After stores reopened following the May 29 training, sales have started to rebound at USA locations, with the chain expecting domestic same-store sales growth of around 3 percent in June, a person familiar with the situation said. Starbucks just added a new mango-dragon fruit iced drink to its permanent menu in the USA and Canada.

The run of bad press has seemingly caught up with coffee giant Starbucks, as the company told investors late Tuesday that the company is preparing to close roughly 150 shops that have underperformed.

The company also said it would look to cut general and administrative expenses with plans to partner with an external consultant to speed up the process.

More news: Jose Mourinho Wants £60m Brazil Star At Manchester United

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 earlier this year said the cash it got from a licensing deal with Nestle SA would go to support the company's growth in the USA and China, where its expansion has been explosive.

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".

"The China market still offers a lot of potential", Bartashus said.

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