Starbucks Corp. announced Wednesday that Chief Executive Kevin Johnson will retire after 13 years with the company, and Howard Schultz, the company’s founder and former CEO, will take on the role again on an interim basis.
Schultz will also rejoin the company’s board, and will help with the search for a new CEO. He will be compensated $1 for his work.
Johnson was chief executive for five years after serving as chief operating officer. He has been on the board since 2009.
Johnson will step down from his current role on April 4, and will remain on the board until September. Starbucks
anticipates it will choose a permanent successor in the fall.
Mellody Hobson, Starbucks board chair, and Johnson will give an update during the coffee company’s annual shareholders event, taking place on Wednesday.
“During Schultz’s tenure, Starbucks stock price gained 21,000% from the time of its initial public offering in 1992 until he stepped down as executive chairman in 2018,” the company said in the announcement.
Shares rose 5.1% in Wednesday premarket trading after the news.
Starbucks was also upgraded to overweight from neutral at JPMorgan. Analysts maintained their $101 price target.
Traffic in the U.S. is still down 11% from pre-COVID levels, but JPMorgan says the recovery is under way. And average ticket is driving comparable sales results.
“Taking price to an increasingly broad and frequent customer base always poses a risk, but the brand should still maintain its ‘affordable luxury’ status,” analysts said.
China comparable sales have been negative, with slower-than-anticipated improvement from the pandemic.
“Getting timing right of China’s domestic policy is beyond our purview, but as the worlds #2 economy, we believe time will at least sort out COVID-era restrictions as it has nearly everywhere else in the world,” JPMorgan said.
Starbucks shares have slumped 25.4% over the past year while the S&P 500 index
has gained 7.6%.