TIME Companies

Starbucks CEO Howard Schultz Is Stepping Down

He will become executive chairman of the company

(NEW YORK) — Starbucks Chairman Howard Schultz is stepping down as CEO of the coffee chain he joined more than 30 years ago and transformed into a global brand.

Schultz will become executive chairman in April to focus on innovation and social impact activities, the Seattle-based chain announced Thursday. Kevin Johnson, who was named president and chief operating officer last year, will be chief executive as of April 3.

Schultz, 63, is credited with turning around Starbucks’ fortunes since returning as its CEO in 2008. He has overseen the expansion of the chain’s food and beverage offerings and the growth of its popular loyalty program and mobile app.

Starbucks has credited the rewards program and app for helping consistently increase sales in the U.S., although growth has slowed more recently and traffic slipped in the latest quarter. Schultz has said such technology adaptions will become increasingly critical for brick-and-mortar retail businesses to thrive as shopping habits change.

Shares of Starbucks slid 3.6 percent to $56.44 in after-hours trading.

During a conference call to discuss the announcement, an analyst called Schultz a “master merchant” who has been able to determine and even stimulate “what the Starbucks customer wants and needs” and asked if that “merchant gene” would still be present in those leading the company. Another noted that Starbucks struggled after Schultz stepped away as CEO in 2000, and asked what was different this time.

Schultz said the company has built a strong leadership team in recent years. He also noted that he is not leaving the company, and would be working on developing the Starbucks Reserve Roasteries, which are high-end retail concepts featuring coffee beans and drinks like “cold brew” coffee. Schultz called it the “next wave of retail innovation.”

“But Kevin and the team are in charge,” Schultz said.

In a note issued before Starbucks announced the change, RBC Capital Markets analyst David Palmer said he believed the company can regain its domestic sales momentum by focusing on expanding its rewards program and the changes it is making to its food menu.

Over the years, Schultz has said that people expect more from public companies, and has aligned himself and Starbucks with social issues like race and jobs for underprivileged youth. In September, he publicly endorsed Democratic presidential nominee Hillary Clinton in an interview with CNN, and did not rule out running for office at some point.

Schultz said during the call that he has been working closely with Johnson, who joined the Starbucks board in 2009.

Johnson, 56, will take charge of the company’s global business and operations. He spent years at technology companies including 16 years with Microsoft and five as Juniper Networks CEO.

Your browser is out of date. Please update your browser at http://update.microsoft.com


YOU BROKE TIME.COM!

Dear TIME Reader,

As a regular visitor to TIME.com, we are sure you enjoy all the great journalism created by our editors and reporters. Great journalism has great value, and it costs money to make it. One of the main ways we cover our costs is through advertising.

The use of software that blocks ads limits our ability to provide you with the journalism you enjoy. Consider turning your Ad Blocker off so that we can continue to provide the world class journalism you have become accustomed to.

The TIME Team