Starbucks CEO addresses 'misrepresentation' concerns in memo

Starbucks (SBUX) CEO Laxman Narasimhan penned a holiday memo on Tuesday addressing current events as well as 'inaccurate claims' about the company.

"While I am grateful for so much, I am concerned about the state of the world we live in," Narasimhan wrote. "There are conflicts in many parts. It has unleashed violence against the innocent, hate and weaponized speech, and lies — all of which we condemn."

Narasimhan added: "Many of our stores have experienced incidents of vandalism. We see protestors influenced by misrepresentation on social media of what we stand for. We have worked with local authorities to ensure our partners and customers are safe. Our stance is clear. We stand for humanity."

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- It's been quite a year for Starbucks in March. A new CEO came to the helm. Laxman Narasimhan took the reins from long-time leader, Howard Schultz. The change happened at a critical moment for the green siren. The company embarked on a high profile reinvention plan and was still contending with a unionization push from baristas nationwide.

In November, it faced a backlash from Union members on its Red Cup Day demanding contract negotiations, which the company says it will resume in the new year.

- Well, the company's shares haven't had a great run as of late and sit far off the highs reached in the summer of 2021. Head for the coming year finding around $3 billion in cost savings, so plenty for shareholders to think about for the world's largest coffee company to address.

Now, the CEO coming out today in a holiday memo with a holiday memo. Yahoo Finance's Brooke DiPalma has the details on that for us. Brooke, what did we hear?

BROOKE DIPALMA: Good morning, Seana. Good morning, Brad. The CEO of Starbucks really looking to set the story straight ahead of the new year, 2024. As he says, the company has had to fend against misinformation this past year.

In the memo, CEO, Laxman Narasimhan, saying, quote, "Many of our stores have experienced incidents of vandalism. We see protesters influenced by misrepresentation on social media of what we stand for." Now, many of these incidents sparked by that ongoing tension between Starbucks and the labor union Starbucks Workers United.

Now, a Starbucks spokesperson telling Yahoo Finance that some of the examples misrepresentation are some of the ones that we highlighted earlier about the company's support for the LGBT community after Workers United tweeted that it had banned Pride Month decorations. Starbucks at the time said that it needed to set clearer guidelines.

Then in October, the union, Starbucks Workers United, tweeted solidarity for Palestine which then was interpreted that Starbucks supported Hamas and that then too led to a boycott. And most recently, as you noted, the Red Cup rebellion on its annual Red Cup holiday promotion. The union then asked employees to essentially walk off the job to protest over staffing, scheduling issues, and demanded Starbucks comes to the table.

Now, as you noted earlier, on December 13, Starbucks did reaffirm its intent to negotiate, that is, but Narasimhan ending the letter saying, quote, "No one can solve the many different problems in the world alone but at Starbucks, we can provide people with places to come together, to connect, to find common ground, and to feel and bring a little bit of joy. And Narasimhan really looking to reinvigorate that partner culture here, really looking to set the story straight, and ultimately aims to bring this company back together.

- I mean, it didn't seem like this was ultimately the holiday cheer meister type of memo to the company that many CEOs perhaps would have penned at a time like this, considering all the brand has moved forward over the course of this year. What are investors supposed to take away from this?

BROOKE DIPALMA: Yeah, well Laxman did highlight that of course he's grateful for all they accomplished this year. But right now, shares of Starbucks are down year to date, roughly 1 and 1/2 to 2%. And many of its competitors think McDonald's, think even Yum Brands, Restaurant Brands International which owns Tim Hortons, even say a Chipotle in the category, they're all moving higher year to date.

And since that record close, as we noted earlier, on July 26 2021, shares of Starbucks are down 23.4% as of Monday's close. And so since that peak, the following day on July 27, Starbucks has lost $38.8 billion in its market cap since then. And so really Starbucks heading into 2024, really hoping to regain that footing and come out once again on top.