As Bloomberg explains, some of the "streamlining" Johnson referenced will come in the form of shutting down "about 150 company-operated stores in densely penetrated U.S. markets next fiscal year, three times the number it historically shuts down annually."

While Starbucks' growth abroad has been quite strong, it's struggling in the States amid racially-charged controversy and the continued push by many big cities to raise the minimum wage and impose more strenuous regulations, prompting the company to shift its focus to more rural areas. Bloomberg reports:

With about 14,000 stores domestically, Starbucks is now pumping the brakes on licensed and company-operated locations, with a renewed focus on rural and suburban areas—not over-caffeinated urban neighborhoods where locals already joke that the next Starbucks will open inside an existing store.

The closing stores are often in “major metro areas where increases in wage and occupancy and other regulatory requirements” are making them unprofitable, Johnson said. “Now, in a lot of ways, it's middle America and the South that presents an opportunity.”


Another major factor putting a dent in Starbucks' earnings in the States is fast-food chains, particularly McDonald's, which is continuing to improve the quality of the coffee and specialty drinks they offer, and do so at far lower costs than the coffee giant.


Starbucks Gives 'Disappointing' News Amid 'Racial Bias' Backlash And Minimum Wage Hikes