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Starbucks CFO Maw to retire, shares tumble
[NEW YORK] Starbucks Corp said on Thursday that chief financial officer Scott Maw will retire at the end of November, a surprise departure that sent shares of the world's largest coffee shop chain down 2.61 per cent.
Mr Maw, 50, lasted just four years in the CFO role. The company did not provide details on what prompted the retirement.
"Our discussions with the company indicate that Mr Maw's decision was of a personal nature," William Blair analyst Sharon Zackfia wrote in a research note. "Plans to identify roughly US$300 million in cost savings over the next three years remain unchanged."
Starbucks had strong sales growth and topped analyst earnings estimates during the first half of Mr Maw's tenure but stumbled more recently, with the company's chief executive earlier this month calling its performance "not acceptable".
The Seattle-based company said in a regulatory filing that it had launched an external search for a replacement for Mr Maw, who will become a senior consultant until March 31, 2019, earning US$250,000 per month.
"As we enter our next phase of continued growth, I am confident in the finance team Scott has developed and am appreciative of his willingness to support through the transition into new leadership," Starbucks CEO Kevin Johnson said in a statement.
It was Starbucks' second high-profile departure announced in recent weeks. Earlier this month, executive chairman Howard Schultz said he would step away from the company, effective this week.
Analysts were stunned by Mr Maw's retirement, pointing to his relatively young age and short stint as CFO. Some described him as a competent executive, but also noted the chain's deteriorating performance and outlook in recent quarters.
"We believe the departure of Mr Maw - who we viewed as a capable leader – will be perceived be as a loss for SBUX in the near and long-term," Wells Fargo Securities analyst Bonnie Herzog said in a research note.
Mr Maw was promoted to CFO in February 2014, and his first two years in the role were marked by a pickup in comparable store sales growth and Starbucks consistently topping Wall Street earnings forecasts.
But the coffee chain fell short of analyst estimates for same-store sales in the Americas region in five of the last six quarters.
Last week it forecast slower sales growth than expected this quarter and said it plans to shutter about 150 US cafes next fiscal year, triple its normal number of closures.
"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," Bernstein analyst Sara Senatore wrote in a research note.
"While a new CFO may bring greater experience in the types of capital allocation strategies we have advocated, the fundamentals of the business need to at least stabilise and the responsibility for that lies with SBUX's CEO and COO."