00:00I want to start off first with Starbucks. We had already seen some pretty good momentum with
00:05regards to same store sales growth. The company now saying that you had 7 plus percent, 7.9 percent
00:11in the most recent quarter. They're anticipating 6.5 percent in the quarter up ahead. It looks
00:17like they're slightly nudging up their profitability estimates as well. I know this was a concern that
00:22the revenue growth was there, the comp sales growth was there, but would the actual profitability
00:27catch up with it? What was your expectation and did it meet that with this report? Yeah, thank you
00:33for having me. The report certainly met our expectations. I think we were expecting to see some
00:38continued strong complementum and we saw that above and beyond our expectations. But if we think too
00:44on the profitability side of things, after a couple of quarters of very good top line results from the
00:50companies that we were going to start to need to see the profitability also flow through. And the results
00:55this quarter were very good, very happy to see them starting to make some improvements because,
01:00as you said, you know, investors investors really starting to want to see some good improvement
01:05there. So this is this is the first quarter we hope of many to come of them continuing to show
01:09some
01:09solid execution on the profitability side. What do you think you get to help? I mean, we talk
01:14other than we should just point out the range to 25 to 265 for the full year. So basically keeping
01:18the bottom
01:18end of the range where it was the top end of the range goes up, I think, 20 cents or
01:22so. Give me a sense here
01:24of what you think could help get them to a point where they could actually see material improvement
01:29over that because the story so far has been that all of the changes that they're making, you know,
01:35they cost money. It's basically, you know, kind of the CapEx spend, but for not AI, but for, you know,
01:40but for the consumer facing companies here. Does that ever end? Does that ever get to a point where
01:45those costs subside? You know, we think it's a balance for them. I think they've had to make
01:51improvements for the different members who are coming in and getting their cup of coffee to be
01:56able to improve the experience for those loyalty members. But we think sort of, you know, through
02:01the process over the last couple of years, that experience was lacking when coming to Starbucks.
02:07So we think they've been making those investments, improving the coffee houses, improving the menu.
02:12They talked a little bit on the little portion of the call that I heard before this about some of
02:16the
02:16success that they've seen in terms of making transformations there. But we think, you know,
02:21it is a bit of a balance, right? And they've been able to drive comp growth. And now we're encouraged
02:25to see
02:25some progress in terms of them driving the comp growth growth and then really, you know, trimming the fat
02:30where they need to in terms of the P&L, but continuing to see both strong momentum and then, you
02:36know,
02:36cutting expenses where they need to and being able to use comps to leverage the P&L. Hey, Abby, I
02:42do want to
02:43pivot to Chipotle because that stock is also moving higher in the after hours. The company upping its
02:49comp restaurant sales growth for the full year. Looks like nothing mentioned about that cyclospora
02:55parasite, at least in the earnings results. But do you expect that to come up in the call?
03:02Is that going to weigh on their potential outlook for the rest of the year? I would be surprised if
03:07they didn't address it. Obviously, it's been top of mind for investors who have had a bit of indigestion
03:12around the restaurant space as a whole, just given this outbreak. But I think, you know, the company
03:18obviously has, you know, in the history dealt with foodborne illness outbreaks. So I would be
03:24surprised if they didn't mention kind of anything extra that they're doing to be able to help
03:28mitigate any risk. But I think in the past, they went through, you know, a long process to be able
03:32to
03:32help improve safety standards. So I imagine that they will mention it just given it will be topical with
03:37investors. But they seem to be doing a good job navigating the environment.
03:41When we talk about sort of the momentum there on comp stores, I mean, when we had a chance to
03:46catch up
03:46a few weeks ago with Scott Boatwright and the discussion, of course, it was a lot about, you
03:50know, menu items, whether they're going to be continued to do a lot of these sort of limited
03:53type of deals. There was a lot of talk about what was it, the honey chicken and a few other
03:58things
03:58here. Do you think that is sort of the recipe, pun intended, to actually get more people in the store
04:04and keep that foot traffic up? I do. I think, you know, them increasing from two LTOs, limited time
04:11offerings to four a year, I think drums up that additional excitement for the consumers. I know
04:16they've thrown, you know, dips and sauces as well to kind of be able to spice things up for them
04:20from their
04:21menu to be able to get more customers coming back into the restaurants. They've also, you know, revamped from a
04:27marketing from a menu innovation standpoint and from a loyalty standpoint to help to be able to get
04:32customers more excited about coming back to Chipotle. So I think it's really a balance of things kind
04:38of across both the menu and the marketing to be able to get that customer coming back and get that
04:43traffic continuing to be solid.
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