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Jun, 29 2018

Starbucks worries biz after CFO Scott Maw announces exit

Schultz, who already had transitioned away from running the chain's day-to-day operations and passed the reins to Chief Executive Kevin Johnson, announced this month that he would be leaving his post as executive chairman effective June 26.

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.

 retirement comes as Starbucks grapples with slowing sales in the United States, a tricky expansion in the key Chinese market and the departure of longtime executive Schultz, who built the chain into a powerhouse. The news sent the company’s shares to their lowest point in almost three years amid uncertainty about the company's future leadership.

Schultz, who already had transitioned away from running the chain's day-to-day operations and passed the reins to Chief Executive Kevin Johnson, announced this month that he would be leaving his post as executive chairman effective June 26.

Starbucks shares fell 2.6% to $48.54. The stock is down 15.5% so far this year.

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 said last week that it was closing some stores in the United States. Starbucks also said it expects comparable sales to rise just 1% globally in its current quarter — its 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 [to] 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 Nov. 30 after seven years with the company, which he originally joined as global controller. The chain, which has launched an external search for a new CFO, said Maw will stay on as a senior consultant through March.

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