The closures represent about 1 per cent of Starbucks’ more than 18,000 North American coffeehouses, with the company expecting most of the shutdowns to be completed by the end of fiscal 2026. Starbucks said the closures will result in approximately $300 million in restructuring charges.
The move comes roughly a year after Starbucks undertook another major restructuring that included closing underperforming locations in North America and reducing its corporate workforce. That earlier restructuring was estimated to cost the company around $1 billion.
Starbucks identifies stores with limited path to profitability
Starbucks said it reviewed its North American coffeehouse portfolio to identify locations where it could not consistently deliver the customer and employee experience it wants or where there was no clear path to acceptable financial performance.
Mike Grams, Starbucks’ chief operating officer, said the company had carefully reviewed its portfolio before deciding which locations should close.
The latest closures are therefore part of a broader effort to reshape the company’s store network rather than a reduction of its overall long-term ambitions for North America.
Starbucks said it continues to see significant growth opportunities in the region and is developing a pipeline of new coffeehouses.
Closures will cost about $300 million
The company expects the latest round of closures to generate approximately $300 million in restructuring charges.
According to Starbucks’ regulatory disclosure, about $200 million of those charges are expected to be cash expenses, primarily related to lease-exit costs and employee separation benefits. The remaining approximately $100 million is expected to consist of non-cash charges associated with the disposal and impairment of company-operated coffeehouse assets.
Most of the closures are expected to take place by the end of fiscal 2026.
The company has been using restructuring and store-level changes as part of Niccol’s broader turnaround programme, which aims to improve service, simplify operations and restore the traditional coffeehouse experience.
Starbucks also cuts its store-opening forecast
The latest closures have also affected Starbucks’ outlook for its overall store network.
The company now expects approximately 440 net new global coffeehouse openings in fiscal 2026, down from its previous forecast of between 600 and 650 net new stores.
Starbucks said the revised figure reflects the approximately 250 North American closures, partly offset by higher net new openings in international markets.
The change does not mean Starbucks is abandoning expansion in North America. Instead, the company said it is continuing to develop a pipeline of new locations while removing stores that do not meet its expectations for customer experience or financial performance.
Starbucks’ turnaround strategy shows signs of growth
The latest restructuring comes as Starbucks reports improving sales momentum.
In its fiscal third-quarter results, the company reported strong comparable-store sales and raised its full-year outlook. Starbucks now expects full-year fiscal 2026 US comparable-store sales growth of slightly more than 6 per cent, while global comparable-store sales growth is expected to approach 6 per cent.
The company also raised its fiscal 2026 non-GAAP earnings-per-share outlook to $2.55-$2.65, compared with its earlier projection of $2.25-$2.45.
Starbucks’ third-quarter results showed that comparable sales growth was being supported by improvements in both customer transactions and average spending. The company has linked the progress to its efforts to improve service and the coffeehouse experience.
Back to Starbucks focuses on coffeehouse experience
Niccol’s “Back to Starbucks” strategy has focused on returning the chain to what the company describes as its core coffeehouse experience.
The plan includes improvements to store design, faster service, menu changes and greater support for employees.
Starbucks said in September that it had completed more than 1,000 coffeehouse redesigns across the US and Canada since late 2025. The redesigned locations feature elements such as softer seating, artwork, greenery and local design touches aimed at making stores more welcoming.
The company is targeting 1,500 coffeehouse uplifts, while continuing to roll out its Green Apron Service operating model.
Niccol has previously described the strategy as an effort to make Starbucks coffeehouses more welcoming, improve service consistency and give customers more reasons to visit.
Earlier restructuring included major store closures
The latest move follows a significant restructuring announced in September 2025.
At that time, Starbucks announced plans to close underperforming stores, primarily in North America, while eliminating approximately 900 jobs. The company said some locations faced physical limitations that made it difficult to deliver the desired customer experience, while others did not have a viable financial outlook.
The restructuring formed part of the company’s wider attempt to simplify its operations and improve financial performance.
The latest 250 closures indicate that Starbucks is continuing to review its physical footprint even as sales trends improve.
Starbucks continues to expand globally
Despite the North American closures, Starbucks is not abandoning store expansion.
The company expects international markets to partly offset the reduction in North American locations when calculating its global net new store total for fiscal 2026. Starbucks said it continues to see opportunities for long-term growth in North America as well.
The company has also continued to invest in its wider operations. In September, Starbucks announced plans for a new technology hub in Chennai, India, which is expected to support its global business and bring some work currently handled by third-party providers in-house over time.
What the closures mean for Starbucks
The decision to close 250 North American coffeehouses represents another stage of Starbucks’ ongoing restructuring under Brian Niccol.
While the company is removing locations that it says cannot deliver the desired customer experience or financial performance, it is simultaneously investing in store renovations, service improvements and new locations.
The latest plan is expected to result in approximately $300 million in restructuring charges, with most closures scheduled for completion by the end of fiscal 2026.
At the same time, Starbucks is entering the final part of fiscal 2026 with a stronger sales outlook, higher earnings guidance and plans for continued international expansion.
The combination of store closures, coffeehouse renovations and selective new openings reflects the company’s effort to reshape its network while pursuing its broader “Back to Starbucks” strategy.