Starbucks has scaled back its ambitious expansion plans following a disappointing earnings report, announcing plans to fold and focus on revamping its existing stores.

U.S. sales fell 6%, the iconic coffee chain reported in its financial report on Wednesday. fourth quarter resultscontributing to a 3% year-over-year decline in revenue.

“Our results do not reflect the strength of our brand and what we are capable of,” said Rachel Ruggeri, chief financial officer. according to a transcription of the company’s earnings call.

“We plan to reduce the number of our new stores and renovations in fiscal 2025 to allow for a redesign while freeing up capital to support our broader turnaround,” she added.

The move marks a major turnaround for Starbucks, which less than a year ago announced plans to open 17,000 new stores by 2030. CoStar reported. The chain opened 722 new stores in the quarter ending September 30, up 37% from the previous quarter but down from the 816 locations opened in the fourth quarter of fiscal 2023.

It is not yet clear how many new stores will be opened or renovated in the coming months, but the CEO Brian Nicol said on the call that he was looking to make a “fundamental change” at the channel.

The company’s efforts to reverse declining U.S. sales will include a simplified menu and additional staff so orders can be fulfilled in four minutes or less, Starbucks executives said. Starbucks will also limit the type of customizations customers can request as part of the plan to limit long wait times that have led some to abandon the chain.

Starbucks reported a 7% drop in same-store sales this quarter, the biggest decline the company has seen since the start of the pandemic. according to NBC.

The coffee giant is also in difficulty in China. Sales in Starbucks’ second-largest market fell 14% in the fourth quarter, according to its report. The chain faces stiff competition from local startup Luckin Coffee, which plans to expand to the United States from next year.

Starbucks’ recent sales woes are partly due to politically motivated boycotts. The much publicized unionization effort Some employees in recent years have taken to highlighting what some see as the chain’s low wages, chronic understaffing and oppositional attitude toward unions.

The Israeli-Palestinian conflict has caused even more customers to boycott Starbucks. Although the company did not have stores in Israel since 2003 and does not provide any funding to the government or the army of the nation, to former influential Howard Schultz, CEO has ties to Israeli cybersecurity company Wiz. Schultz resigned last April but remains one of the company’s largest shareholders.

Schultz was replaced by Laxman Narasimha, who was ousted by the Starbucks board five months later. Niccol took office in September. The old Chipotle The CEO managed to increase the Mexican chain’s revenue during his tenure starting in 2018, Forbes reported.

Niccol announced plans to strengthen enforcement of the chain’s hybrid work policy. Starting in January, company employees could be punished or fired if they don’t come to the office at least three days a week, according to an internal memo obtained by Bloomberg earlier this week.