Starbucks CEO to Step Down
Starbucks CEO and Chairman Howard Schultz announced on Thursday he would step down from his post of CEO. He said he would hand those responsibilities over to current COO and president at Starbucks Kevin Johnson.
The news has come as a surprise to investors as the shares fell by as much as 10% following the news. Shares of Starbucks have recovered since the initial drop and during afterhours trading were only down 3.5%.
The transition at the top will take place in early April of 2017 and will give Schultz the opportunity to focus on a turnaround of the Reserve-branded coffee bars, making them into new destination restaurants.
The current CEO reminded analysts quickly during a call that he would not be leaving the business, but rather transitioning into a new role.
The Reserve Roastery and Tasting Room was opened to the public in Seattle the home market for the company in 2014. The megastores have been designed as larger than the traditional café layout of Starbucks and allow small batch roasting to be done of exotic and rare coffees.
Schultz during July told reporters that this was the company’s opportunity to elevate it food. This he added again reaffirms the leadership of Starbucks in everything related to coffee.
Schultz joined Starbucks back in 1982 working as the director of marketing and operations when the business had just four locations. Over the years he worked, he grew the business into the iconic brand it is today.
This is not the first time a CEO role has been vacated by Schultz. He served previously as the CEO at the company between 1987 and 2000 then returned in 2008.
There have been some that have said that they see the planned departure of Schultz as a solid sign for the outlook of Starbucks.
The company said during the conference call there were no other changes planned for its leadership over the short term.
Johnson has been COO and president of Starbucks since joining in 2015. He has been a member of board of directors at the company since 2009.
He previously was the CEO with Juniper Networks as well as the platforms division president at Microsoft.
Schultz praised his successor noting that for the past two fiscal years the company has experienced the best in its history in part due to Johnson.
Get Analysts' Upgrades and Downgrades Daily - Enter your email address below to receive a concise daily summary of analysts' upgrades, downgrades and new coverage with MarketBeat.com's FREE daily email newsletter.