WHAT YOU NEED TO KNOW
  • Starbucks plans to close about 250 underperforming North American cafes, representing roughly 1% of its regional locations.
  • The company lowered its fiscal 2026 net opening forecast to 440 cafes from a previous range of 600 to 650.
  • Starbucks expects approximately $300 million in restructuring charges connected with closures, lease exits, employee benefits and asset impairments.
  • Most closures are expected before the end of fiscal 2026, while projected new cafes will come from international markets.

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Starbucks announced Thursday that it plans to close about 250 underperforming cafes in North America, eliminating roughly 1% of its regional locations as management pushes forward with a broader turnaround. The company operates more than 18,000 cafes across North America.

The decision marks the second round of North American closures during CEO Brian Niccol’s two year tenure. His overhaul of the company’s United States business has concentrated on improving the customer experience, including face to face interactions inside cafes.

Starbucks has not disclosed which locations will close. It was not immediately clear where the affected cafes are located, leaving the geographic scope of the plan unspecified.

“We have carefully reviewed our North America coffeehouse portfolio and identified locations where we do not believe we can consistently deliver the experience we want for customers and partners or where we don’t see a path to acceptable financial performance,” Mike Grams, Starbucks chief operating officer, wrote in a letter addressed to employees.

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The company’s review identified two central concerns at the targeted stores. Starbucks cited locations where it could not consistently provide its intended experience and cafes where management saw no route to acceptable financial performance.

The closure announcement came alongside a reduced expansion forecast for fiscal 2026. Starbucks now projects 440 net new cafe openings, down from its previous outlook of 600 to 650 locations.

Those projected new cafes will come from Starbucks’ international markets. The updated forecast therefore combines a smaller companywide net opening target with a round of closures focused on the North American business.

“The Company continues to see significant longer-term growth opportunity ahead in North America and is actively developing a strong pipeline of new coffeehouses,” Starbucks said in a regulatory filing.

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That statement maintains the company’s expectations for future North American growth even as Starbucks prepares to remove hundreds of underperforming locations. The company did not provide further details about that pipeline in the source material.

Most of the planned closures will occur before the end of fiscal 2026, according to the regulatory filing. Starbucks’ fiscal year ends later this month, while the bulk of the closing program is scheduled for the coming fiscal period.

Starbucks expects the closures to generate approximately $300 million in restructuring charges. The expense reflects both the cost of leaving locations and accounting charges connected with company owned restaurant assets.

About $200 million of the projected restructuring charge will be tied to exiting leases early and paying separation benefits to employees. These costs make up the larger portion of the total expense disclosed by the company.

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The remaining $100 million will consist of noncash charges stemming from the disposal and impairment of company owned restaurant assets. Starbucks did not provide a more detailed division of those noncash expenses.

Niccol’s turnaround has placed the cafe experience at the center of the United States revamp. The portfolio review applies that priority directly to individual locations by measuring whether they can deliver the desired experience and produce acceptable financial performance.

The plan affects about 1% of Starbucks’ North American cafes, but it brings a substantial restructuring bill. The company is preparing to absorb hundreds of millions of dollars in costs while closing roughly 250 locations.

At the same time, Starbucks has lowered its fiscal 2026 net opening projection from the earlier range of 600 to 650 cafes. The revised target of 440 net new locations will be supplied by international markets rather than North America.

The latest announcement combines store closures, lease exits, employee separation benefits and asset impairment charges under the company’s turnaround program. Starbucks continues to describe North America as a significant longer term growth opportunity, despite the current reduction in its cafe portfolio.

DISCLAIMER: GoldInvestors.news is not a registered investment, legal or tax advisor or broker/dealer. All investment/financial opinions expressed by GoldInvestors.news are from the personal research and experience of the owner of the site and are intended as educational material. Although best efforts are made to ensure that all information is accurate and up to date, occasionally unintended errors and misprints may occur.