Starbucks is closing roughly 250 North American stores, cutting its growth forecast and taking a $300 million restructuring charge as CEO Brian Niccol gets more aggressive about removing underperforming locations.
Starbucks Is Cutting Stores That Aren’t Working
The coffee giant said Thursday it will shutter approximately 1% of its more than 18,000 North American cafes, with most of the closures expected to happen before the end of fiscal 2026.
Starbucks says the locations were identified after a broader review of its North American portfolio. The company focused on stores where it either could not consistently deliver the customer experience it wants or could not see a reasonable path toward acceptable financial performance.
The move will come with a meaningful price tag.
Starbucks expects approximately $300 million in restructuring charges, including about $200 million in cash costs tied primarily to exiting leases and employee separation benefits. Another $100 million will come from noncash asset write-downs and disposals.
Starbucks has not yet disclosed which individual stores will close.
The Bigger Number Investors Should Watch
The 250 closures grab attention, but the more important development may be Starbucks cutting its store-growth expectations.
The company now expects approximately 440 net new global coffeehouse openings in fiscal 2026, down from its previous forecast of 600 to 650. Higher international openings are expected to partially offset the North American closures.
That is a significant change for a company whose growth story has historically relied heavily on adding locations.
It also tells investors something about Niccol’s strategy: Starbucks appears increasingly willing to sacrifice store count in the short term if management believes it can improve the economics of the remaining system.
The Turnaround Is Moving From Fixing Stores to Pruning Them
Niccol’s “Back to Starbucks” strategy has focused on faster service, better staffing, simpler operations and making cafes feel more like places customers want to spend time.
There are signs the effort has gained traction. Starbucks reported in July that it had delivered four consecutive quarters of comparable-store sales growth. The company is also accelerating renovations, with at least 1,500 North American coffeehouse “uplifts” targeted by the end of fiscal 2026.
That makes these closures more interesting.
Starbucks isn’t simply responding to collapsing sales across the entire chain. Management is using improving performance elsewhere in the system to identify locations that are still failing to meet expectations.
In other words, the turnaround is entering the cleanup phase.
What It Means for Starbucks Stock
For investors, closing 250 stores is not automatically a negative signal.
Weak locations can consume labor, lease expenses and capital while contributing little profit. Removing them can eventually improve store-level economics, especially if nearby Starbucks locations absorb some of the displaced customer traffic.
The tradeoff is that Starbucks is spending heavily to get there. The latest $300 million charge comes while the company continues investing in labor, technology and store renovations.
The next question is whether those expenses eventually translate into stronger operating margins.
Starbucks has laid out longer-term targets that include operating margins of 13.5% to 15% by fiscal 2028 and at least 3% global and U.S. comparable-store sales growth. Those targets become more important as management moves deeper into the restructuring.
Keep an Eye on These Three Numbers
Investors should watch three things from here:
- Comparable-store sales. Continued growth would suggest Starbucks can generate more revenue from the stores it already has.
- Operating margins. This is where investors should eventually see the payoff from closing weak locations and improving operations.
- North American store growth. Starbucks still sees substantial expansion potential in the region. If closures continue beyond the weakest locations, investors may have to rethink how quickly the domestic footprint can grow.
The Bottom Line
Starbucks closing 250 stores sounds like another sign of trouble at first glance. The situation is more nuanced.
Niccol is shrinking the weakest part of the chain while spending heavily to improve the rest.
The real test now is whether a smaller, healthier store base can produce better margins and stronger sales. If it can, the $300 million restructuring bill may look like the cost of cleaning up Starbucks’ footprint. If it can’t, investors will start asking how many more stores still need to go.
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