Starbucks CFO Retirement Adds to Uncertainty After Schultz’s Departure
(Bloomberg) -- Starbucks Corp.’s chief financial officer will retire this year, sparking investor pessimism as the coffee giant already braces for a future without visionary leader Howard Schultz.
Scott Maw’s retirement comes as Starbucks grapples with slowing sales in the U.S., a tricky expansion in the key Chinese market and the departure of longtime executive Schultz, who built the chain into a coffee powerhouse. The news sent the shares to their lowest point in almost three years amid uncertainty about the company’s future leadership.
Schultz -- who had already transitioned away from running the coffee chain’s day-to-day operations and passed the reins to Chief Executive Officer Kevin Johnson -- announced earlier this month he’d be leaving his post as executive chairman effective June 26.
The company’s shares fell as much as 5 percent to $47.37 on Thursday, the lowest intraday level since August 2015. They were already down 13 percent through Wednesday’s close.
Wall Street may be wondering whether Starbucks’ management bench is deep enough. Troy Alstead, once seen as a possible successor to Schultz, left the company in 2015 after more than two decades. He had served as chief financial officer before taking over as operations chief.
Maw, 50, is departing after the company last week said it was closing stores in the U.S. Starbucks also said it expects comparable sales to rise just 1 percent globally in its current quarter -- the worst performance in about nine years. The world’s biggest coffee chain is struggling with slower afternoon sales and a decline in its signature Frappuccino line.
“The sudden nature of this announcement and Maw’s relatively young age and tenure in his role suggest the decision the leave was perhaps not entirely voluntary,” Sanford C. Bernstein & Co. analyst Sara Senatore said in a note. “While the fundamental deterioration may have tested the ability of any CFO to provide accurate guidance, we think Maw may be viewed at least partly to blame for the damage to Starbucks credibility that has resulted.”
Starbucks said Maw will exit on Nov. 30 after seven years with the company, which he originally joined as global controller. The coffee chain, which has launched an external search for a new CFO, said Maw will stay on as a senior consultant through March 2019.
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