Jim Cramer says Howard Schultz's open letter to Starbucks is unlike anything he's seen before

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The difficult road ahead for Club holding Starbucks took a dramatic, unexpected turn this weekend — one that Jim Cramer said he's not seen before in his four decades on Wall Street. Former Starbucks CEO Howard Schultz, who built the coffee chain into a global brand and served in the top job on three occasions, on Sunday chimed in on the company's terrible quarterly earnings report last week . In a LinkedIn post , Schultz emphasized the urgent need to revitalize the company's U.S. business, writing that its operations are "the primary reason for the company's fall from grace." Starbucks' brutal report Tuesday night triggered a nearly 16% plunge in its stock price the following day. Shares have lost an additional 1% or so in recent days. The stock is down about 24% year to date and more than 31% over the past 12 months. "Candidly, I've never seen this done," Jim said Monday on CNBC, referring to an ex-CEO authoring essentially a public letter that's critical of the current leadership and offers advice on problems. "I think he's coming from the point of view just sadness about where the franchise is," Jim said. Schultz no longer serves on Starbucks' board, having stepped down in September , but he remains a significant shareholder. Schultz handed over the reins to CEO Laxman Narasimhan in March 2023 after serving as interim chief executive for nearly a year. Schultz, whose prior stints as CEO spanned from 1986 to 2000 and then from 2008 to 2017, returned for a third time after his successor Kevin Johnson retired . In his LinkedIn post Sunday, Schultz said people inside and outside Starbucks had asked him for his thoughts on "what should be done" in light of the company's much weaker-than-expected second-quarter results. Starbucks also cut its full-year outlook after its same-store sales declined in the key markets of North America and China. It was the company's second consecutive earnings miss. Schultz's post stressed the importance of Starbucks' customers. "The stores require a maniacal focus on the customer experience, through the eyes of a merchant," Schultz wrote. "Senior leaders—including board members—need to spend more time with those who wear the green apron," he added, referring to the company's baristas. Starbucks did not immediately respond to CNBC's request for comment on Schultz's remarks. SBUX YTD mountain SBUX stock performance year-to-date. For its part, Starbucks has chalked up its disappointing second-quarter results to a number of factors — some of which were outside its control and others within it. "A deteriorating economic outlook has weighed on customer traffic," Narasimhan said during the post-earnings call. "We continue to feel the impact of a more cautious consumer," the CEO added. At the same time, elevated wait times or product unavailability during the quarter turned many customers away, management said, which hurt sales, too. Narasimhan said Starbucks is working on a plan to speed up customer service and improve its supply chain. Jim has viewed management's response to the quarter as unsatisfactory. The day after Starbucks reported, Jim was sharply critical of Narasimhan during an interview on "Squawk on the Street," later saying he was "distressed" about the situation. "Howard, like many, like us, expected a bad quarter, but we did not expect the worst quarter of the year," Jim added Monday during the Club's Morning Meeting. Schultz's decision to weigh in on the situation, while certainly unusual, does not change our calculus on our investment. We're standing pat for now, as Jim outlined in his Sunday column , believing that the depths of the fall could spark action. Following last weeks' earnings report, we downgraded our rating on Starbucks shares to 2 and cut our price target to $90 apiece. (Jim Cramer's Charitable Trust is long SBUX. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust's portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED. Former Starbucks CEO Howard Schultz testifies about the company's labor and union practices during a Senate Committee on Health, Education, Labor and Pensions hearing on Capitol Hill in Washington, DC, March 29, 2023. Saul Loeb | AFP | Getty Images