Starbucks (SBUX) Shares Drop 1.54% on Restructuring Plan Amid 4-Day 7.7% Slide

Starbucks (SBUX) shares fell 1.54% on Tuesday, marking a four-day losing streak with a cumulative drop of 7.70%. The stock dipped to its lowest level since April 2025, with an intraday decline of 1.67%, reflecting investor concerns over the company’s strategic shifts and operational challenges.

The decline follows CEO Brian Niccol’s $1 billion restructuring plan announced in late September 2025, which includes closing approximately 500 North American stores and eliminating 900 corporate roles. The move targets underperforming locations and non-essential roles, aiming to realign resources toward core markets and enhance the customer experience. The closures and layoffs, however, have raised concerns about short-term costs, including $850 million in store closure expenses and $150 million in employee separation charges, primarily recognized in fiscal 2025.

Central to the restructuring is the “Back to Starbucks” strategy, focusing on store renovations, increased in-store staffing during peak hours, and a return to the brand’s foundational principles of community-centric design. Over 1,000 locations will undergo upgrades to improve ambiance and functionality, while a $500 million investment in “Green Apron Service” aims to boost service efficiency. The plan also involves leadership changes, with new executives overseeing operational discipline and innovation. Despite these efforts, same-store sales in North America have declined for six consecutive quarters, driven by competitive pressures and shifting consumer preferences.

Investor sentiment remains cautious as the restructuring’s near-term costs weigh on profitability. While a modest dividend increase to $0.62 per share signals commitment to shareholder returns, analysts highlight risks related to labor tensions, store closure logistics, and the ability to attract customers to renovated locations. The company projects $45.5 billion in revenue and $4.6 billion in earnings by 2028, contingent on successful execution of the strategy. However, the long-term success hinges on balancing cost-cutting with customer experience investments, a delicate balance that could impact both employee morale and brand loyalty.

Market reactions have been mixed, with the stock down over 8% in 2025 amid broader market uncertainties. The restructuring’s effectiveness will depend on mitigating execution risks, maintaining operational efficiency, and adapting to evolving consumer demands. For now, the focus remains on whether these strategic shifts can restore Starbucks’ growth trajectory and reinforce its position as a leader in the competitive coffee market.