Howard Schultz, former CEO of Starbucks Corp., drinks from a Starbucks cup during a Senate Health, Education, Labor and Pensions Committee hearing in Washington, DC, U.S., Wednesday, March 29, 2023.
To Drago | Bloomberg | fake images
Former starbucks CEO Howard Schultz weighed in on the coffee chain's dismal latest quarterly report Sunday, saying he believes the company will recover if it improves its U.S. stores.
Schultz, who no longer has a formal role within Starbucks, wrote that the company needs to improve its mobile ordering and payment experience and overhaul the way it creates new drinks to focus on premium items that set it apart.
“Stores require a manic focus on the customer experience, through the eyes of a merchant. The answer is not in the data, but in the stores,” Schultz wrote in a Sunday afternoon letter posted on LinkedIn.
Starbucks on Tuesday cut its full-year forecast after a surprise drop in comparable sales led the company to miss Wall Street estimates for quarterly earnings and revenue. Since the report, the company's shares have fallen 17%, dragging its market value to $82.8 billion.
Analysts, caught off guard by the chain's poor performance, have been searching for an explanation for why Starbucks' U.S. traffic fell 7% in the quarter. The network could still be dealing with the fallout from social media backlash related to its position on the conflict in the Middle East, Bank of America Securities analyst Sara Senatore wrote in a research note on Monday.
Schultz, who turned Starbucks from a small chain into a coffee giant, stepped down from his last stint as CEO a little more than a year ago. He handed the reins to Laxman Narasimhan, who was previously CEO of Lysol owner Reckitt. Schultz also resigned from Starbucks' board of directors last year.
He appeared to offer advice to his successor as he tries to improve the chain's sales.
“Leaders must model both humility and confidence as they work to restore trust and increase performance throughout the organization,” Schultz wrote.
A year and a half ago, Schultz told CNBC that he doesn't plan to be CEO of Starbucks again.
