Updated version 3 - Starbucks will close another 250 coffee shops in North America

Charts and analyst comments were added in paragraphs 5 and 11

Reuters, September 24 - Starbucks SBUX.O said in a regulatory filing on Thursday that it will close 250 underperforming coffee shops in North America, as CEO Brian Niccol steps up efforts to push forward a business transformation to boost sales.

This round of store closures comes a year after Starbucks (link) last shut multiple underperforming locations in the region—including its flagship Seattle Roastery—in a restructuring move estimated to have cost about $1 billion.

The company disclosed on Thursday that this latest wave of closures will result in approximately $300 million in restructuring costs, accounting for about 1% of its roughly 18,000 stores in North America. The company plans to complete most of the store closures by the end of fiscal 2026.​​​​

Starbucks also expects the net increase in global company-operated and licensed stores for fiscal 2026 to be approximately 440, down from a previously set target of 600 to 650.

eToro global markets strategist Lale Akoner said, “This is a smart but costly move for Starbucks in its path to return to profitability.” He also cautioned that if improvements in sales and margins stall, investor patience may quickly run out.

Niccol (Brian Niccol) completed his two-year tenure as Starbucks CEO in September (link). The former Chipotle Mexican Grill CMG.N executive attempted to win back customers by reducing wait times and simplifying the U.S. menu as part of his “Return to Starbucks” program.

Starbucks also invested in improving store and back-of-house operations and controlled costs by cutting (link) several corporate management positions and closing some regional offices.

As of July this year, the company had achieved same-store sales growth (link) for four consecutive quarters. Niccol said in April this year that foot traffic increased across all income groups.

Its high-priced lattes have remained resilient amid an overall slowdown in discretionary spending. Notably, while American households have struggled with high fuel and food costs, spending among lower-income consumers has remained strong.

“Niccol has shown progress... The next key step is to translate that momentum into stronger margins,” said Brian Jacobsen, chief economist at Annex Wealth Management.

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