Seattle-based Starbucks Coffee Co. reported a 14 percent sales growth in the second quarter of the fiscal year, to more than $6 billion, but its profit margins narrowed amid changes to its business in China, including streamlining its operations and investments in its workforce, reports the Seattle Times.
The company’s CEO Kevin Johnson said last Thursday, April 26, 2018, that he did not believe its profits had yet been affected by a recent controversial incident in a Philadelphia Starbucks, where a store manager called police to remove two men who were allegedly loitering while waiting for a business associate. Starbucks plans to close 8000 stores on May 29 for sensitivity training related to the incident.
In the past year, Starbucks has decreased its operating margin to 15.6 percent in Q2, down from 18.8 percent, which falls in line with its forecasts. It plans to improve comp growth and profitability using a new scheduling system, which lets managers customize work schedules depending on sales, by ramping up personalized promotions to customers through digital channels and by focusing efforts on increasing afternoon sales with new cold beverages.