Starbucks lowers profit forecast, speeds closures of poorly performing stores

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Starbucks shares fell as much as 3% in after-hours trading Tuesday after the coffeehouse chain provided a weak sales forecast for its upcoming quarter and said it would shutter 150 stores in fiscal 2019.

Starbucks said it will accelerate the rate at which it is closing underperforming company-owned stores in areas that are already packed with them.

"Our recent performance does not reflect the potential of our exceptional brand and is not acceptable", Starbucks CEO Kevin Johnson said in a statement.

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In July 2017, Starbucks closed all 379 Teavana locations after the tea shop showed poor sales and little hope of improving.

Starbucks shares slipped almost 2 percent in after-hours trading. Analysts had expected same-store sales to grow 3% in that period.

Starbucks fans may be in for some bad news.

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"We're putting more of our energy into that afternoon day part and the portfolio of beverages that are offsetting some of the declines we're seeing in Frappuccino beverages", Johnson said. There's going to be a new way for non-rewards customers to earn stars and rewards starting next spring, allowing visitors to cash in on loyalty without fully signing up.

Through 2020, Starbucks expects to return about $25 billion in cash to shareholders through buybacks and dividends, a $10 billion increase from its previously announced target. New cafes will continue to open in markets that demand it, the company said, and it is "actively exploring strategic options to license company-operated stores in other appropriate markets".

The company also said it would look to cut general and administrative expenses with plans to partner with an external consultant to speed up the process.

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Oversaturation of the market could also be an issue plaguing the coffee chain, which is why the store closings will be focused on urban areas with a higher concentration of Starbucks locations.