Episode summary
Starbucks Sales Accelerate as Turnaround Gains Steam | Bloomberg Intelligence
Bloomberg Intelligence
· · Hosts: Paul Sweeney, Scarlet Fu · Guests: Michael Halen, John Butler, Caroline Hyde, Andrea Felsted
Summary
Starbucks showed the clearest evidence yet that Brian Niccol’s turnaround is working, with U.S. same-store sales up 4% and China up 7% as faster service, new operating standards, protein cold foam, and stronger marketing pulled customers back. The analyst said the company is still carrying margin pressure because it added labor to stores, and management is targeting $2 billion in annual cost savings over the next one to two years.
AT&T posted revenue and profit above estimates, helped by broadband strength and more customers buying multiple connectivity services. The telecom analyst argued AT&T is well positioned versus rivals because it is the fiber leader and is about to add roughly 1 million more fiber subscribers through the Lumen deal, while still spending heavily on network upgrades and fiber buildouts before capital intensity eases.
On tech, ASML’s record 13.2 billion euros of fourth-quarter orders reinforced confidence in AI-related chip spending, even as it cut 1,700 jobs to become more agile. Amazon announced 16,000 more corporate layoffs as part of a push to strip out bureaucracy, while SoftBank was said to be in talks to invest as much as $30 billion more in OpenAI. LVMH’s results were mixed, with jewelry strong but Chinese demand still uneven and luxury shares already pricing in a rebound.
Key takeaways
- The analyst said Starbucks’ turnaround is gaining traction, with U.S. same-store sales up 4% and China up 7% on better operations and food innovation.
- Starbucks is still under margin pressure because it added labor to stores, and management is targeting $2 billion in annual cost savings.
- AT&T is positioned to defend share in broadband because it is the fiber leader and plans to add about 1 million more fiber subscribers through Lumen.
- ASML’s 13.2 billion euros of quarterly orders suggest AI-related chip equipment demand remains strong, even as it cuts 1,700 jobs.
- Amazon’s 16,000 corporate layoffs reflect Andy Jassy’s push to reduce bureaucracy and make AI improve efficiency.
- SoftBank’s reported plan to invest up to $30 billion more in OpenAI shows Masayoshi Son is leaning further into generative AI.
Notable quotes
“the turnaround plans are are starting to to really uh take a take a hold right now”
“they've identified $2 billion in annual costs that they want to get after over the next one to two years”
“I actually think AT&T is in a great position relative to their competitors because they're the fiber leader”
“this is a company that signal this. Look, Andy Jasse in his letter to his shareholders had said, "I am going to make AI work for me”
How the episode opens
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Starbucks uh reported some pretty darn good numbers today. Mike, tell us about what's going on in Starbucks.
Yeah, you know, the the turnaround plans are are starting to to really uh take a take a hold right now and and um results really improved, rising, you know, 4% uh systemwide same store sales US as well. China was up 7%. You know, here in the US, it's, you know, mainly about better operations, right?
They they rolled out uh new operating standards. um late last year and that they seem to be um really boosting the speed of service which is creating happier customers that come back more frequently, right? Um some food innovation including uh protein cold foam uh seems to be hitting the mark, right?
And and they're doing a better job on the marketing side. So So all those are are driving drove better same star sales than expected.
Yeah, I I don't know. I I the one I go to, the Starbucks, Route 35, Wall Township, New Jersey, they do a great job for for me and I've noticed the change. I mean, you know, little things like, you know, writing your name back on the cup like they used to back in the early days as in addition to that sticker which was a little antiseptic, I guess.
Um, talk to us about costs there. Are they looking at their costs as well? Yeah, they they've identified $2 billion in annual costs that they want to get after over the next one to two years.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- starbucks turnaround
- at&t earnings
- ai chip equipment demand
- amazon layoffs
- lvmh sales outlook
Companies and tickers mentioned
- SBUX
- T
- ASML
- AMZN
- SFTBY
- LVMUY
- Starbucks
- AT&T
- ASML
- Amazon.com
- SoftBank Group
- OpenAI
- LVMH
Watch the episode
Watch “Starbucks Sales Accelerate as Turnaround Gains Steam | Bloomberg Intelligence” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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