Starbucks will close ~250 underperforming coffeehouses in North America this week, the company said in a regulatory filing Thursday. The closures represent about 1% of its more than 18K North American stores.
The company expects $300M in restructuring charges, including $200M in cash charges for lease exits and employee separation benefits and $100M in non-cash charges tied to asset disposal and impairment.
Starbucks also cut its fiscal 2026 outlook for global net new store openings to about 440, down from an earlier target of 600 to 650 openings.
The second closure wave under Niccol
Chairman and CEO Brian Niccol joined in 2024 and has pushed a "Back to Starbucks" plan built on shorter wait times and simpler menus. Last September, the company closed 627 stores in North America and Europe in a restructuring effort estimated to cost roughly $1B.
That round also included 900 nonretail layoffs, followed by another 300 corporate cuts in May and the shutdown of some underused US offices. The company had 18.37K stores in the region at the end of June.
COO Mike Grams told employees the targeted locations either miss financial expectations or can't deliver the intended customer experience.
Starbucks said it will transfer affected employees to other stores where possible, or provide severance support.
The company didn't disclose which stores will close, how many sit in the US, or how many are unionized. More than 700 US Starbucks stores have voted to unionize since late 2021 without reaching a labor agreement.
The turnaround is working on sales, not yet on margins
Starbucks has reported four straight quarters of comparable sales growth as of July, with traffic rising across all income cohorts. Its pricier drinks have held up against a broader pullback in discretionary spending among lower-income US households.
The retrofit program continues, with 1.5K North American stores expected to be remodeled by Sept. 30, the end of the fiscal year. Grams said Starbucks remains committed to growing its North American store count.
"This is a sensible but costly step in Starbucks' turnaround," said Lale Akoner, global market strategist at eToro, who warned investor patience could fade if sales and margin gains stall.
The next test is whether trimming the weakest stores lifts profitability rather than just tidying the map.
