Starbucks CEO On Coffee Chain's Buyback Program, China Recovery: 'We Are Going To Be Just Fine'

Coffee chain Starbucks Corporation (NASDAQ: SBUX) plans on buying back additional shares of its stock as it looks to take advantage of its "strong balance sheet," CEO Kevin Johnson said Wednesday on CNBC's "Mad Money."

The Starbucks Buyback Program

Starbucks has sufficient financial resources to not only navigate the coronavirus crisis pandemic but "come out stronger as a company," Johnson told "Mad Money" host Jim Cramer.

On Wednesday, the board of directors approved both a quarterly dividend of 41 cents per share and a "normal" buyback authorization of an incremental 40 million shares, he said. 

The share buyback authorization is consistent with prior authorizations and part of Starbucks' plan through fiscal 2021, the CEO said.

"We modeled every possible scenario that we think can happen, even extreme scenarios and we are going to be just fine," he said. "We are resilient and we thought that through both from how we are operating in our stores, we are resilient on the balance sheet."

Starbucks' China Turnaround Plan

Starbucks slowly started to reopen stores in China over the past few weeks and 90% of all stores are now open, Johnson said.

By the end of March, the total should rise to 95%, he said, adding that as of Wednesday, some stores at the epicenter of the outbreak in the Hubei have reopened.

"That is a big accomplishment."

Johnson's strategy to navigate the coronavirus in China is being duplicated in the U.S. and other markets, he said. It includes additional cleaning procedures, a shift toward takeaway and closing mall-based stores and in areas where there are outbreaks.

Starbucks shares were trading 8.22% higher at $60.96 at the time of publication Thursday. 

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