Is Starbucks' Howard Schultz Setting Up a Succession Plan?
NEW YORK (TheStreet) - Starbucks
The move, along with two other promotions effective Feb. 3, comes as Chairman and CEO Howard Schultz looks to focus on more on "the convergence and integration of our retail and e-commerce, digital, card and mobile assets around the world," according to a statement. Schultz is taking on more "innovation," leaving less time in the way of daily company management.
Shares finished down 3.2% in Wednesday trading, closing at $71.56.
But was the late-Wednesday announcement a nod to what will eventually be the succession line up behind the coffee chain's beloved Schultz? It seemed clear that Schultz, who turned 60 this past July, was signaling something.
"Ever so quietly, Howard Schultz has signaled his intention to hand over the reins to three possible internal candidates within the next three to five years," says Brian Sozzi, CEO and chief equity strategist of Belus Capital Advisors and RealMoney contributor.
Starbucks said in the release Schultz will work closely with others in the senior leadership team, including chief digital officer Adam Brotman and chief strategy officer Matt Ryan, to "expand his focus on innovation in coffee, tea and the Starbucks Experience as well as next generation retailing and payments initiatives in the areas of digital, mobile, card, loyalty and e-commerce to position Starbucks for its next wave of global growth."
"He will also continue to work closely with his senior leadership team to ensure continued disciplined growth and operational excellence around the world."
Last Thursday, Starbucks reported first-quarter earnings of 71 cents a share that beat consensus by 2 cents. Revenue rose 12% to $4.24 billion, however Wall Street was expecting more, looking for $4.29 billion.
Same-store sales in the U.S. also missed consensus expectations for the December-ending quarter, coming in at 5%, versus expectations of 6.4%. It was clear that even darling Starbucks felt some of the same troubles that many retailers felt during the holiday season.