Starbucks Corporation‘s SBUX new CEO Laxman Narasimhan revealed the company’s updated strategic plan, called the “Triple-Shot Reinvention Strategy,” at a recent investor event in New York.
According to Barron’s report, this is the first time many investors have heard from Narasimhan about his long-term vision for the company since he took over from former CEO Howard Schultz eight months ago. Narasimhan’s strategy is said to build “on the foundation” of Schultz’s previous reinvention plan.
Triple-Shot will focus on three key areas: enhancing the store experience, expanding digital capabilities, and increasing global outreach. The plan also promises to boost efficiency and reinvest in Starbucks’ employees.
The company anticipates this strategy will lead to a long-term revenue growth of 10% or more and an earnings per share growth of 15% or more. Starbucks also declared a $3 billion cost savings plan, to be executed over the next three years.
See Also: Japan Is In Trouble – US Treasury Department Trying To Catch Up To Them
Starbucks’ store expansion plan remains largely unaltered, with the company restating its goal to operate 55,000 stores by 2030, a 45% increase from its current 38,000 stores. Most of the new store openings will take place outside North America. The company also expects to double its current 79 million reward members within the next five years.
As part of its employee investment, Starbucks announced plans to invest $1 billion in initiatives including new technology, wage hikes, enhanced benefits, and better scheduling. By 2025, the company aims to double hourly incomes compared to 2020.
Starbucks’ commitment to expanding in China, despite rising operational challenges, was also reaffirmed. Narasimhan expressed long-term bullishness on the China market, with plans for further expansion in other international markets.
The company’s stock closed 9.5% higher on Thursday, following the announcement of the strategy and a stronger-than-expected fiscal fourth quarter. After-hours trading saw shares remaining largely unchanged, up by 0.2%.
Image: Shutterstock/ Harun Ozmen
Engineered by Benzinga Neuro, Edited by Pooja Rajkumari
The GPT-4-based Benzinga Neuro content generation system exploits the extensive Benzinga Ecosystem, including native data, APIs, and more to create comprehensive and timely stories for you. Learn more.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Comments
Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.
