The company missed on EPS, posted a 6th straight quarter of negative comps and still has little to show for 12 months of work CEO Brian Niccol has put in since he was plucked away from Chipotle for a cool $100 million. But Niccol is a vibe guy with analytic skills. A double threat. That's why he was hired, and unlike last quarter, when Starbucks came off as defensive and a bit confused by a cool reception to 2nd Quarter earnings, Starbucks' messaging was tight and on point.
Niccol pronounced the Starbucks turnaround to be "ahead of expectations" and cited invisible metrics like Customer Satisfaction and same-store sales in Canada going positive as evidence of gaining traction. It takes a certain level of charisma and bullshit to pull off such a quarter and Niccol has plenty of both.
By the time the call started $SBUX had reversed a 4% knee-jerk sell-off and gone well positive. When the first analyst question started by offering "congrats on the early progress," it was abundantly clear Niccol and his executive team were going to get more than enough runway to execute this turnaround. You could hear the Bears chewing through the keyboards, but it was clear no one was going to be hassling the company over earning 50c vs 65c expectations.
Project Green Apron isn't about earnings. Not yet. "It's going to take a little bit of time for customers to realize they are getting a better level of service," explained Niccol. If he was wrong, then why was the stock higher?
Honestly, it was good enough for me. Let's break down the grade in SAT fashion, scoring for Math and Verbal.
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