Stepping into the chief executive position in any company can be daunting. Even more so, when the role was once filled by a leader who earned his reputation by building a brand as big as Starbucks.
That’s what Kevin Johnson faced when he took over as CEO of the coffee giant last year.
Johnson’s ascension came as founder and ex-CEO Howard Schultz stepped down to focus his efforts on trying to turn Starbucks’ Reserve Roastery-branded coffee bars into destination restaurants.
“That’s no easy task following up Howard,” R.J. Hottovy, a Morningstar analyst, told CNBC. “It’s not an enviable position for any executive… but Kevin has a great working relationship with [him].”
Johnson is clearly still laboring in Schultz’s shadow. The December opening of the Shanghai Roastery once again propelled Schultz to the forefront of the brand, with analysts and investors alike praising the new business.
Not to mention, that Roastery is averaging $64,000 in sales each week and continuously attracts a line of people waiting to get inside.
At the annual shareholders’ meeting last week, Johnson took the lead, addressing investors about the company’s plans for menu and tech innovation, as well as pay equity. Attendees cheered Starbucks’ new parental leave plan, which allows adoptive parents to take time off, as well as its commitment to creating a greener to-go cup.
But nothing could compare to the thunderous applause and standing ovation that welcomed Schultz on stage nearly an hour and a half into the presentation.
Nearly a year after Johnson took over as CEO, investors and analysts are still trying to gauge the success of his leadership. Some have praised his tech-savvy innovation and the company’s growth in China, while others have lamented over the ongoing weak sales of food and beverages and merchandise in the U.S.
“I think Starbucks’ performance in the last year has been underwhelming,” Hottovy said. “[Same-store sales], in particular, have been flat to negative, and the company has admitted that they’ve made some mistakes on merchandising. It’s a disappointing start to his tenure.”