Howard Schultz, former CEO of Starbucks Corp., drinks from a Starbucks mug during a hearing of the Senate Committee on Health, Education, Labor and Pensions in Washington, DC, U.S., on Wednesday, March 29, 2023.
Al Drago | Bloomberg | Getty Images
Former Starbucks CEO Howard Schultz weighed in on the coffee chain's dismal latest quarterly report on Sunday, saying he believes the company will bounce back as it improves its U.S. stores.
Schultz, who no longer has a formal role within Starbucks, sees an obvious reason for the decline. He wrote that the company needs to improve its mobile ordering and payment experience and overhaul the way it creates new drinks to focus on premium items that differentiate it.
“The stores require a maniacal focus on the customer experience, through the eyes of a merchant. The answer lies not in the data, but in the stores,” Schultz wrote in a letter on LinkedIn on Sunday evening.
On Tuesday, Starbucks lowered its full-year forecast after a surprise decline in same-store sales caused the company to miss Wall Street estimates for quarterly profit and revenue. Since the report, the company's shares have fallen 17%, dropping its market value to $82.8 billion.
Analysts, blindsided by the chain's underperformance, have been looking for an explanation for why Starbucks' U.S. traffic fell 7% this quarter. The chain could still face fallout from social media backlash over its stance on the Middle East conflict, Bank of America Securities analyst Sara Senatore wrote in a research note on Monday.
Schultz, who turned Starbucks from a small chain into a coffee giant, left his last position as CEO just over a year ago. He handed over the reins to Laxman Narasimhan, who was previously CEO of Lysol owner Reckitt. Schultz also stepped down from Starbucks' board last year.
He appeared to offer advice to his successor as he tries to turn around the chain's sales.
“Leaders must model both humility and trust as they work to rebuild trust and improve performance throughout the organization,” Schultz wrote.
A year and a half ago, Schultz told CNBC that he has no plans to return as CEO of Starbucks.