Starbucks Is Shrinking in Order to Grow

Shares of Starbucks (NASDAQ: SBUX) fell over 4% on Wednesday, June 10, after the company filed a report with the Securities and Exchange Commission that gave new forward guidance well below analyst expectations. While Starbucks did note that it had seen improving traffic trends as more and more stores reopened, those improvements are coming off a very, very low base.

In addition, Starbucks announced a speeding-up of plans to transition some of its cafes in busy city centers to a new "Starbucks Pickup" format. It also suggested it may downsize some of its store associates, or transfer them to reduced hours. This paints a picture of a company that isn't fully recovered from the COVID-19 pandemic, and might not be for a while.

Image source: Starbucks.

Source Fool.com