Change in Starbucks management
On June 4, Starbucks (SBUX) announced that Howard Schultz is stepping down as executive chairman on June 26. After that, he will be honored with the status of chairman emeritus. The board has chosen Myron E. Ullman, former chair of JCPenney (JCP), to replace Schultz. Mellody Hobson will be vice chair.
Schultz joined Starbucks as director of operations and marketing in 1982 and became CEO in 1987. He served as CEO until 2000, when he became chairman of the company. He again took the CEO position in 2008 and served until April 3, 2017. Currently, he is serving as executive chairman and has been focusing on the company’s innovations, the development of reserve roasteries, reserve stores, and social impact initiatives. During his tenure, Starbucks grew from 11 stores to more than 28,000 in 77 countries. SBUX stock has increased 21,000% since its IPO in 1992.
The stock, however, has been struggling in the last couple of years. In 2017, it rose only 3.4%, while its peers Dunkin’ Brands (DNKN) and McDonald’s (MCD) have returned 22.9% and 41.4%, respectively.
Year-to-date, SBUX stock has fallen 0.6%. During that same period, McDonald’s stock has fallen 6.9%, while Dunkin’ Brands has been flat. The broader comparative indexes, the S&P 500 Index (SPY) and the Consumer Discretionary Select Sector SPDR ETF (XLY), have returned 2.7% and -12%, respectively.
On June 4, Starbucks was trading 0.7% lower in after-market hours. The announcement of Schultz stepping down as executive chairman appears to have led to a fall in the stock.