Brain freeze

20 June 2018 By Amanda Gomez Follow @alpgomez

The coffee chain is serving slowing sales in the U.S. and China, and a lukewarm valuation. Boss Kevin Johnson is using his tech background to attract customers, but still faces venti-sized challenges. Starbucks is shaking up the menu. It could also consider slimming down faster.

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Starbucks announced new initiatives to boost growth on June 19, including closing underperforming stores. The coffee-shop chain will close about 150 company-operated stores in fiscal 2019, up from its average of 50 store closures a year.

Starbucks now expects comparable-store sales to increase 1 percent in the third quarter ending in June, year on year. The company also lowered its fiscal 2018 earnings-per-share estimate because of costs related to weak China growth, slower afternoon traffic in U.S. locations, and anti-racial-bias training it gave to staff in May.

The company increased its quarterly dividend and expects to return $25 billion to shareholders through fiscal 2020.

Shares of Starbucks were down 8.5 percent to $52.55 at 11:23 a.m. EDT on June 20.

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