Starbucks cuts 250 stores in North American overhaul

Starbucks is pushing ahead with its restructuring strategy under CEO Brian Niccol, who took leadership in September 2024 to lift profitability. In September, the chain announced the closure of around 250 stores across North America, representing about 1% of its more than 18,000 locations in the region. The company stated it identified branches unable to deliver the desired customer experience or lacking a path to acceptable financial returns, without specifying the exact number of impacted workers.

The latest cut follows an earlier wave that shut 627 locations, more than 90% in North America, and cut about 900 non-store jobs. Both rounds fit into Niccol's "Back to Starbucks" initiative, which aims to trim costs by approximately $2 billion through fiscal 2028. Niccol stated in July that more work remains as the chain refocuses on serving as a community gathering space.

The operational overhaul comes alongside improving financials. In fiscal third-quarter results reported in July, global comparable sales grew 7.9%, matching a 7.9% rise in the United States. Net profit surged 87.2% year over year to $1.045 billion, while operating margin expanded to 10.5% from 9.9% a year earlier.

In China, its second-largest market with roughly 8,000 stores after more than 26 years of expansion, comparable sales moved from an 11% decline in the second fiscal quarter of 2024 to a 0.5% gain in the second fiscal quarter of 2026. Facing competition from domestic chains like Luckin Coffee, Starbucks formed a joint venture in November with Boyu Capital. The Chinese fund holds 60% of the retail business while Starbucks retains 40%, supporting a long-term target of 20,000 locations through broader licensing.

Starbucks shares trade near $94, marking a gain of about 14% in 2026. In April, Morgan Stanley analyst Brian Harbour raised his price target on the stock from $105 to $110, while cautioning that debate over the company's profit-generating power will persist despite top-line progress.