Starbucks (SBUX) said Thursday that it plans to shut down about 1% of its North American locations as part of a restructuring program and now expects fewer net new coffeehouse openings in fiscal 2026.
The coffee giant will close about 250 stores in North America, representing 1% of its nearly 18,000 coffeehouses in the region, according to the company's regulatory filing. The restructuring will cost about $300 million, including $200 million in cash charges related to lease exit expenses and employee separation benefits, and $100 million for disposal and impairment of its assets.
"We have carefully reviewed our North America coffeehouse portfolio and identified locations where we do not believe we can consistently deliver the experience we want for customers and partners or where we don't see a path to acceptable financial performance," Chief Operating Officer Mike Grams said in a letter to employees.
The majority of these store closures will likely be completed by the end of the current fiscal year, with a substantial portion of restructuring charges falling in fiscal 2026. The restructuring is part of the "Back to Starbucks" turnaround strategy that was launched in September 2024 to revive traffic growth and support long-term margin expansion.
Shares of the company were down 0.6% in Thursday trading and have gained 11% this year.
The latest round of store closures comes after Starbucks cut 300 US corporate support jobs in May and a $1 billion turnaround in September last year that eliminated 900 non-retail partner roles. In February 2025, the company laid off 1,100 support partner roles.
The company also reduced its projection for net new openings to 440 coffeehouses in fiscal 2026, down from its prior guidance of 600 to 650 locations. The closures in North America are offset by openings in international markets, Starbucks said in the filing.
Seaport Research Partners said last week that long-term unit growth to reach 2,000 net new openings by fiscal 2028 will be heavily weighted toward international markets and existing partnerships rather than North American expansion. "New builds are being designed for approximately 20% lower cost around an omnichannel format that outperforms single-channel stores, targeting a three-year cash-on-cash payback," the investment firm added.
Earlier this month, Oppenheimer said Starbucks is poised for a same-store sales growth recovery following two consecutive years in negative territory driven by management's strategic actions of closing underperforming units, expanding delivery availability, and extending store hours.
In late July, Starbucks' fiscal third-quarter results topped Wall Street's view, and the company raised its full-year earnings per share outlook as global comparable sales jumped, driven by an increase in transactions and average ticket size.
Drive-through coffee chain Dutch Bros (BROS) also reported second-quarter results ahead of analysts' estimates and increased 2026 revenue guidance to between $2.1 billion and $2.13 billion from $2.05 billion and $2.08 billion previously.
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