Starbucks to Close More Stores Amid Glut of Coffee Shops

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Starbucks Corp on Tuesday said it would close 150 cafes in some saturated US markets and warned comparable sales globally this quarter would miss Wall Street expectations, sending shares down 3 percent after hours.

The Seattle-based company announced Tuesday that it will close approximately 150 underperforming stores in its most densely populated USA markets amid sluggish sales - up from its usual rate of 50 per year.

Oversaturation of the market could also be an issue plaguing the coffee chain, which is why the store closings will be focused on urban areas with a higher concentration of Starbucks locations.

Starbucks Chief Financial Officer Scott Maw reportedly acknowledged that the incident "had an impact" on the low same-store sales growth rate of 1 percent expected for the quarter beginning next month.

He also pointed to the impact of the company's response to the April arrest of two black men in a Philadelphia store, including the May 29 afternoon closure of 8,000 USA stores for anti-racial bias training.

The firm organized the session following the public outcry over two black men getting arrested for sitting at one of the tables without ordering a drink.

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Starbucks shares slipped almost 2 percent in after-hours trading.

The company says it is closing 150 locations in 2019.

"We must move faster to address the more rapidly changing preferences and needs of our customers", Kevin Johnson, Starbucks' CEO, said in a statement.

The former Chairman Howard Schultz stepped down earlier in June. China is the company's biggest growth driver with same-store sales rising 4 percent in the last reported quarter.

Starbucks said it will return an additional $25 billion more to shareholders than initially planned in the form of share buybacks and dividends.

The company also said it would look to cut general and administrative expenses with plans to partner with an external consultant to speed up the process.