Starbucks Stock In Focus As CEO Announces Layoffs: Retail Stays Bullish

Shares of Starbucks Corp (SBUX) rose more than 1.30% on Monday after the company reportedly announced it will lay off 1,100 corporate employees and freeze open positions, with retail sentiment staying bullish.

According to media reports, the coffee giant doesn’t plan to fill “several hundred other open positions,” CNBC reported, citing CEO Brian Niccol. The cuts won’t impact employees at its cafes.

Starbucks is reportedly “simplifying our structure, removing layers and duplication and creating smaller, more nimble teams, ” CNBC report added.

“Our intent is to operate more efficiently, increase accountability, reduce complexity and drive better integration,” Niccol was quoted as saying. “All with the goal of being more focused and able to drive greater impact on our priorities.”

Sentiment on Stocktwits inched up in the ‘bullish’ zone from a week ago. Message volume was in the ‘low’ zone compared to ‘extremely low’.

One comment noted the prospect of using AI and how the layoffs could be beneficial for future earnings.

Starbucks reported earnings per share of $0.69, beating consensus estimates of $0.67 at its most recent earnings.

Its first-quarter revenue stood at $9.4 billion, against consensus estimates of $9.31 billion. Consolidated net revenues of $9.4 billion were flat compared to prior year, including on a constant currency basis.

Starbucks’ management embarked on a strategic overhaul termed “back to Starbucks” under its CEO Brian Niccol, who joined the company from Chipotle Mexican Grill last year. Niccol is reportedly reorganizing leadership at Starbucks, hiring certain former executives of Taco Bell. 

Starbucks stock is up 24% year-to-date.

For updates and corrections, email newsroom[at]stocktwits[dot]com.