Schultz retakes helm of Starbucks; suspends share buybacks
Howard Schultz wasted no time in making his presence felt as interim CEO of Starbucks.
On his first day back at the helm of the company he grew into a global coffee café giant, Schultz announced that Starbucks is suspending its stock buyback program — effective immediately — to invest back into operations, including employees and stores. (In March, Starbucks said that Schultz would return to the company as interim chief executive officer and a board director in the wake of the resignation of Kevin Johnson, effective April 4.)
In a letter to employees, Schultz said that the decision to suspend Starbucks’ stock repurchasing program would allow the company “to invest more into our people and our stores — the only way to create long-term value for all stakeholders.” In October, under Johnson, Starbucks had committed to spending $20 billion on buybacks and dividends during the next three years.)
Schultz returns to the company as it is dealing with a growing push among its store employees to unionize. To date, nine of its locations have voted to unionize.
In his letter, Schultz acknowledged that Starbucks, similar to many companies, is facing “new realities in a changed world.” He cited “pinched supply chains, the decimation caused by COVID, heightened tensions and political unrest, a racial reckoning and a rising generation which seeks a new accountability for business.”
Schultz said his first task is to spend time with employees.
“I am returning to the company to work with all of you to design our next Starbucks — an evolution of our company deep with purpose, where we each have agency and where we work together to create a positive impact in the world,” he wrote. “My first work is to spend lots of time with partners. To lift up voices.”
During Schultz’s previous four decades as CEO and chairman, the company grew from 11 stores to more than 28,000 stores in 77 markets around the world. During his tenure, Starbucks delivered a 21,000% gain in the value of its stock price between its initial public offering in 1992 and Schultz's departure as CEO in 2017.
As of January 2, 2022, Starbucks has 34,317 stores across the globe, of which 51% and 49% were company-operated and licensed, respectively. The company plans to expand to approximately 55,000 company-operated and licensed stores across 100 markets by 2030.