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SW Retail Advisors founder Stacey Widlitz analyzes why Starbucks’ stock is soaring after its new CEO announcement on ‘The Claman Countdown.’
Starbucks CEO Brian Niccol is focused on fixing the company’s U.S. business within his first 100 days on the job, which includes making stores more comfortable for customers and improving workforce morale.
“We’re making investments in technology that enhance the partner and customer experience, improve our supply chain and evolve our app and mobile ordering platform,” Niccol said in a letter to Starbucks staff, otherwise known as partners. “This is our plan for the U.S., and where I need to focus my time initially.”
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| SEX | STARBUCKS CORP. | 91.15 | -0.41 |
-0.45% |
In early August, Starbucks ousted CEO Laxman Narasimhanreplacing him with Niccol after the company faced a slumping stock price and sales drop that prompted pressure from activist investors and former CEO Howard Schultz, who posted on social media in May that the company needed a strategic overhaul.
Niccol, who left his post as Chipotle’s top boss, is tasked with turning around the company as it contends with growing unionization pressures and slowing sales in back-to-back quarters.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| CMG | CHIPOTLE MEXICAN GRILL INC. | 53.68 | +0.65 |
+1.23% |
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Starbucks signage in Warsaw, Poland, on July 31, 2024. (Aleksander Kalka/NurPhoto via / Getty Images)
To do so, he is deviating from the company’s prior strategy, and narrowing his focus on four “key areas” that he said will “have the biggest impact” on the business.
One key area will be focusing on career opportunities for partners and ensuring they have a “clear path to growth.” He will also focus on ensuring baristas have the needed tools and necessary time to make the drinks.
Brian Niccol in New York City on June 10, 2015. (Robin Marchant / Getty Images)
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Another key focus area will be making sure drinks and food are made “on time” and that stores will be more inviting. His aim is to create more comfortable seating, so people will linger longer, and create a better distinction between “to-go” and “for-here” services.
Starbucks’ fall beverage line includes two new drinks, as well as returning favorites. (Starbucks / Fox News)
As a final initiative, Niccol said he wants to remind “people of our unmatched coffee expertise, our role in communities and the special experience that only Starbucks can provide.”
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“My focus for the first 100 days is clear,” he continued. “I’ll spend time in our stores and at our Support Centers, meeting with key partners and suppliers, and working with our team to drive these critical first steps.”
Afterward, he is going to focus on a “potential path to capture growth” in China. He said he also sees “enormous potential for growth” in regions like the Middle East and in Asia Pacific, Europe and Latin America.
Shares of Starbucks have fallen over 3% for the past 12 months, trailing the S&P 500’s 21% gain over the same time period.
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