Starbucks CEO Kevin Johnson to retire

Yahoo Finance Live's Jared Blikre and Brian Sozzi report that retail sales have increased in February and that Howard Schultz will be replacing Kevin Johnson as Starbucks CEO.

Video Transcript

BRIAN SOZZI: There's big breaking news out of coffee giant Starbucks. With its stock down 25% in the past year and union efforts picking up, the company's Babe Ruth is coming back as CEO. Howard Schultz, the company's longtime CEO and visionary behind the brand, will assume the top job as Kevin Johnson retires.

Schultz has pulled this move before, leaving as CEO in the mid-2000s only to reclaim the title in 2008. With the stock under pressure and operations languishing, Schultz stepped down as executive chairman in 2018. And you can see that Howard Schultz magic, Jared, is impacting Starbucks shares here, up about 6% pre-market-- big move by Starbucks.

JARED BLIKRE: Oh, you bet, Brian. I told you I love this morning show because something lands in our lap every single day. Let's go to the YFi interactive, where I'm charting fast-food restaurants. I have a little heat map up here I want to show you. Yes, the stock is up about 5%, 6% in pre-market trading. I'm going to take these quotes off because I want to chart what's happened over the last five years.

That is Kevin Johnson's tenure. I'm going to sort by performance. And you can see that Chipotle in the number one spot. We're going to talk about that in a little bit. But Domino's Pizza, Shake Shack, McDonald's, Yum! Brands, Wendy's, and then we get down to Starbucks, up 52% over that time period, so underperforming its peers on this time frame.

And then you take a look at what's happened over the last three months. So we've been in a-- basically, a 3, 3 and 1/2-month sell-off, and Starbucks has been taking it on the chin. It is down 27 and 1/2%, underperforming its peers. So I think this is in line with the strategy. You know, if you have somebody who's not performing, you need to change them out.

So Sozzi, I know this is exciting for you, and there's a ton of stats to get to. And we can talk about that later in the show. But this is an exciting story.

BRIAN SOZZI: Yeah, big story, Jared. Let me add two quick sub-bullets. First, our very own Brooke DiPalma has more on this leadership transition at Starbucks on the Yahoo Finance home page right now. And then secondarily, I will add this. Unlike when Schultz came back in 2008, this is a different Starbucks.

I would say they're dealing with more cultural issues, of course, as the company pushes-- gets pushed to unionize its workforces. When he came back in 2008, it was really more of an operational thing he had to fix. He famously closed all the US stores down in 2008 to get things right. But again, Howard Schultz coming back is a big deal, and we will have more on it.