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Starbucks (SBUX) +6.5% as Howard Schultz returns as CEO
Starbucks (SBUX) shares traded 6.5% higher in midweek following the announcement that former CEO Howard Schultz will return to the top role on an interim basis.
Starbucks (SBUX) shares jumped 6.5% on Wednesday as investors reacted positively to news that Howard Schultz will return as the coffee chain’s CEO on an interim basis.
In a surprise announcement, Starbucks said that Schultz will replace current boss Kevin Johnson, who is set to retire in the coming months after around five years in the top job.
Schultz is very much a known quantity for the world’s biggest coffee chain as he served as chairman and CEO between 1986 and 2000 before returning for a second stint between 2008 and 2017.
Johnson took on both duties following the departure of Schultz and played a crucial role in Starbucks’ pivot to digital offerings with its Starbucks Rewards system, which now has almost 45 million members.
Starbucks director Mellody Hobson added: “Kevin and the entire executive team stepped up to the challenge of the pandemic and navigated one of the most difficult periods in modern history.”
Schultz will now take on the mantle for the third time, but it could only be a short stint as Starbucks plans to hire a permanent CEO later this year.
SBUX stock has surged 58% during Johnson’s time in the role, though that does not quite match the pace of the S&P 500’s 79.2% rise since 2017.
While Starbucks has impressive brand power, its latest quarterly report underwhelmed as $0.72 earnings per share missed the Wall Street consensus.
Sales did climb 19% to more than $8.1bn in Q1, but it recently cut its profit guidance for the year due to supply chain problems.
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