Starbucks CEO Indicates More Store Closings Due To Safety Issues

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Since the beginning of the year, Starbucks ($NASDAQ:SBUX) has announced 16 store closures in major cities due to safety issues. In a leaked video footage being addressed to company employees, CEO Howard Schultz indicated that there are more store closures to come. Business Insider cited “This is just the beginning.” It is unclear how many more stores Starbucks plans to close, but it is likely that the company will continue to experience declining sales and earnings in the coming months as a result of these closures.

Market Reaction

This caused the stock to open at $81.1 and close at $82.6, up by 2.9% from the prior closing price of $80.2.

VI Analysis

Company’s fundamentals reflect its long term potential. The following analysis on Starbucks is made simple by the VI app. According to the VI Risk Rating, Starbucks is a low risk investment in terms of financial and business aspects.
However, there are potential risks in some business and financial areas that investors should be aware of.

Summary

The potential for future store closures indicates that investing in STARBUCKS may not be as secure as it once was. However, the stock price rose 2.9% the day after the CEO’s indications, which shows that investors are still confident in the company. It is difficult to say what the future will hold for STARBUCKS, but it is still a strong company that is worth investing in.