Starbucks' new boss says he will overhaul the global coffee chain's menu as the company continues to see sales decline.
Brian Niccol also announced that he was suspending the company's financial guidance for the coming year due to “the current state of affairs.”
At the same time, the company reported preliminary quarterly earnings, indicating a decline in sales and profits.
Starbucks shares fell more than 4% after the announcement.
Starbucks needed to “fundamentally change” to bring back customers, said Mr. Niccol, who took over as chief executive in September.
“We will simplify our overly complex menu, fix our pricing architecture, and ensure that every customer feels Starbucks is worth it every time they visit.”
Starbucks saw its customers cut back on spending as the rising cost of living squeezed people's budgets.
A week before releasing its results for the three months ended September, Starbucks said it expected its U.S. comparable sales to decline 6% from a year earlier.
The slowdown was more dramatic in China, where sales fell 14% over the same period as the economy slowed.
“Despite our increased investments, we have not been able to change the trajectory of our traffic decline,” said Rachel Ruggeri, Starbucks’ chief financial officer.
Mr. Niccol, who previously ran Mexican food chain Chipotle, was recruited by Starbucks to help turn around the company.
But he was criticized for his plan to travel nearly 1,000 miles from his family home in Newport Beach, Calif., to the company's headquarters in Seattle on a corporate jet.
Critics saw this as a contradiction with the company's public stance on ecological issues.
