Starbucks long-term profit growth
Recent news seems to suggest that Starbuck is heading for a rocky path. According to recent growth studies in the coffee, the company seems to have slowed down dramatically. The company came out recently and announced the drastic decline of sale. This disappointing outcome has made the company to close down around 379 Teavana mall stores by spring 2018.
The adverse condition has caused the coffee company to cancel any prior commitments made between them and Tazo tea. The decline in sales forced Starbucks to stop long-term profit growth forecast. This has been a hard blow to Starbucks forcing them to sell its mass Tazo tea to Unilever for a sum of $384. The sellout move was to allow the coffee company to focus on their premium brand; though times call for tough choices.
From a recent chart, it can be noted that while coffee boom might have picked, coffee competitors Dunking Donuts might be experiencing the same fate as Starbucks. The company has also been struggling with the decline of sales.
Chief Financial Officer Scott Maw refuted the claims that opening new Starbuck stores is a poor move. The New Starbuck stores would eat into the sales from existing cafes. Scott was adamant on his standpoint claiming that was not the case; from observing the current trend Scott declared a need for more Starbuck stores to be opened. For more details follow the link below.
The companies CEO Kevin Johnson assured the public that the company has strongest quarterly returns. Kevin Johnson tried to assure everyone despite the hard times and the company operating under the adverse climatic condition the company has been resilient since 2016. But Starbucks investors showed a lack of confidence in the report given.
The investors experienced a great disappointment hours after trading when more than 7% of the shares went down. The future of the coffee company remains unknown with many holding their breath and hoping for an economic miracle.