Starbucks announced plans to close around 250 underperforming cafes, representing about 1% of its North American locations, as part of a continued effort to revamp its operations under CEO Brian Niccol. This move marks the second round of closures in Niccol’s two-year leadership, focusing on enhancing the customer experience and improving financial performance by shuttering sites that do not meet company standards. The exact locations of these closures have yet to be disclosed.

The coffee giant also revised its fiscal 2026 outlook, lowering projected net new openings in North America from an earlier forecast of 600-650 to 440 cafes. This adjustment reflects a strategic shift to international markets for expansion while maintaining a focus on strengthening its North American portfolio. Starbucks emphasized its long-term growth potential in North America, noting it is actively developing a pipeline of future coffeehouse openings.

Financially, the company expects to incur approximately $300 million in restructuring costs tied to the store closures. Around $200 million will cover expenses related to early lease terminations and employee separation benefits, while the remaining $100 million will account for noncash charges linked to asset impairments and disposals. Most closures are scheduled to occur before the end of Starbucks’ fiscal year, which concludes later this month.

This latest round of closures follows broader cost-cutting initiatives including layoffs and store optimization strategies intended to boost profitability amid changing consumer behaviors. Starbucks continues to focus on delivering a high-quality in-store experience, aiming to close locations where it is challenging to maintain its service standards or achieve acceptable financial results. The company’s efforts reflect an ongoing transformation aimed at securing sustainable growth in a competitive retail environment.