Starbucks Recruits Company Veteran for CFO Role -- Update
January 07 2021 - 11:52AM
Dow Jones News
By Nina Trentmann and Heather Haddon
Starbucks Corp. named a 16-year company veteran as its new
finance chief as it works to recover from the coronavirus pandemic,
which hurt its sales across the globe.
Rachel Ruggeri, who returned to Starbucks in June last year
after a two-year stint as chief financial officer of bakery
products company Continental Mills Inc. will take over its finances
Feb. 1, the Seattle-based coffee chain said Thursday.
Current CFO Patrick Grismer, who joined Starbucks as finance
chief from Hyatt Hotels Corp., in late 2018, will remain with the
company as an adviser to Chief Executive Kevin Johnson and Ms.
Ruggeri through May 2.
Mr. Grismer, 58 years old, decided to retire to devote more time
to philanthropy, community service and his family, the company
said.
Ms. Ruggeri currently serves as senior vice president finance
for Starbucks's Americas business and has held various positions at
the company before, including in its financial planning and
analysis team. She first joined Starbucks in 2001 and helped launch
the first Starbucks Card, a precursor to the chain's digital
membership programs, the company said.
"It gives me great confidence to know that Rachel, a long-time
Starbucks colleague and a seasoned financial executive, is stepping
into this role, " Mr. Johnson said.
Starbucks shares fell nearly 1% before recovering to trade
little changed at just over $104 a share in late morning.
David Tarantino, a restaurant industry analyst at Robert W.
Baird & Co., said he was disappointed by Mr. Grismer's
departure but believed Ms. Ruggeri would be a good fit for the
role.
"We are surprised by the fairly sudden nature of this
transition," Mr. Tarantino wrote in an analyst note.
Starbucks Thursday reaffirmed its guidance for its current
quarter and the 2021 fiscal year, having earlier forecast full-year
earnings per share in the range of $2.34 to $2.54.
As CFO, Ms. Ruggeri will likely be tasked with helping Starbucks
regain lost ground and pay for new costs, including rising staff
wages.
Mr. Johnson last month said he wants to raise pay for all U.S.
store workers to at least $15 an hour over the next three
years.
Starbucks has suffered a fall in sales amid coronavirus-related
restrictions and remote work in many parts of the world.
The pandemic resulted in closures of many of the chain's cafes,
prompting a double-digit decline in same-store sales. Many of its
stores are running again, while others, including in airports and
on university campuses, remain closed.
Still, Starbucks said in October that customers were returning
to its cafes quicker than initially forecast. The company reported
a profit of $392.6 million during the quarter ended Sept. 27, down
51% with $802.9 million in the prior year period.
The chain said it expects to fully heal from the pandemic in its
current fiscal year, and anticipates opening around 22,000 stores
globally over the next decade. It had 32,660 stores as of Sept. 27
2020.
Starbucks is also closing hundreds of stores as part of a plan
to build new ones more geared toward to-go service. It recently
added more locations where baristas can deliver coffee to customers
in their cars, and opened three to-go only stores, including ones
now operating in New York City and Toronto.
Sales growth projected for this fiscal year and beyond will help
the chain cover the plan to increase pay, Mr. Grismer said in
December.
"We believe they are absolutely essential to our brand
positioning," he said, referring to the planned wage increases.
Write to Nina Trentmann at Nina.Trentmann@wsj.com and Heather
Haddon at heather.haddon@wsj.com
(END) Dow Jones Newswires
January 07, 2021 11:37 ET (16:37 GMT)
Copyright (c) 2021 Dow Jones & Company, Inc.
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