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Starbucks Corporation SBUX has made leadership appointments to support the Growth at Scale plan and in turn bring sustainable growth in the long term. On Tuesday, Starbucks named John Culver as its newest chief operating officer or COO.
Notably, this move of the coffee giant to reinstate the COO role is just the opposite of earlier plans to remove the role in a bid to promote a flat management structure.
In this regard, Kevin Johnson, president and chief executive officer, said, "As we plan for the 2022 fiscal year and beyond, Starbucks is fortunate to have a deep, talented and diverse team of senior executives we are able to tap to help lead us forward.”
John Culver succeeded Roz Brewer, who exited Starbucks earlier this year to become the chief executive of Walgreens Boots Alliance. Additionally, John — who has been with the coffee chain since 2002 — has been promoted to North American group president.
The Seattle-based coffee chain also promoted Michael Conway as group president of International and Channel Development. He currently serves as the president of international licensed markets. Also, Michelle Burns has been promoted to the executive vice president role for Global Coffee, Tea and Cocoa.
The promotions will take effect from Jun 28, 2021.
Starbucks has had a rough patch for more than a year due to the pandemic. Now, resurgence in coronavirus cases has been impacting customer mobility. In China, travel restrictions impacted the stores located in travel centers. It is important to note that investor sentiments were hurt after the company reported lower-than-expected second-quarter fiscal 2021 revenues in April 2021. Revenues missed estimates for the second straight quarter.
Nonetheless, the company is witnessing faster-than-anticipated sales recovery in the United States. In April, despite lagging analysts’ expectations, Starbucks reported an 11% increase in revenues, and raised 2021 revenue forecast to $28.5-$29.3 billion. It expects adjusted earnings per share between $2.90 and $3.00.
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Shares of Starbucks have advanced 45.1% over the past year, outperforming the Zacks Retail – Restaurants industry’s 33.4% growth. This Zacks Rank #3 (Hold) company has been benefiting from initiatives with respect to opening stores in new and existing markets, remodeling existing stores, deploying technology, controlling costs along with aggressive product innovation and brand building. This apart, focus on the Global Coffee Alliance with Nestle bodes well for Starbucks, which shares space with McDonald's Corporation MCD, Yum! Brands, Inc. YUM and Domino's Pizza, Inc. DPZ in the same space.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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