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Shares in coffee giant Starbucks Corporation (Nasdaq: SBUX) are down significantly in premarket trading this morning after the chain announced its Q2 2025 earnings results yesterday after the bell. Those results were described as disappointing by Starbucks’s own CEO, Brian Niccol, and demonstrate that the companys turnaround efforts still have a long way to go. Here’s the latest on Starbucks and what has investors nervous: Starbucks Q2 2025 results below expectations In January of this year, Starbucks announced its Q1 2025 earnings, in which it beat Wall Street expectationsa small win for the company and for Niccol, who joined as CEO from Chipotle Mexican Grill in the summer of 2024. But its not a win that was repeated in the companys second quarter. Yesterday, Starbucks reported earnings for its Q2 of fiscal 2025. That quarter had 13 weeks in it and ended on March 30. Unlike the previous quarter, Starbucks did not beat Wall Street expectations. Wall Street analysts had expected revenue of $8.83 billion and an adjusted earnings per share (EPS) of 49 cents, according to Yahoo Finance. Instead, Starbucks posted the following: Revenue: $8.76 billion Adjusted EPS: 41 cents But the revenue and EPS miss isnt what seems to be rattling investors most. That would be Starbuckss disappointing comparable sales results. Comparable sales are a metric that looks at the sales of the same stores that have been open for at least a year. If comparable sales are increasing, thats a good sign as it means the same stores are bringing in more customers, larger orders, or both. But if comparable sales are down, it suggests lower foot traffic or that customers are reducing the amount of money they spend at the store. Unfortunately for Starbucks, comparable sales in U.S. stores that have been open for at least a year fell during Q2and it was the fifth straight quarterly fall of U.S. comparable sales. Starbucks says that U.S. comparable store sales declined 2% during the quarter, and U.S. comparable transactions were down 4%. It was a little better in China, however, which is the companys second-largest market after the United States. In China, comparable sales were at least flat quarter-over-quarter. But you would be right to wonder if flat comparable sales in China could get worse, as consumer sentiment across the globe is increasingly becoming anti-American due to President Trumps trade wars, which are leading to economic strife with America’s largest trading partners. Niccol seemed keen to paint a rosy picture of Starbucks’s operations and future in the country. As noted by Yahoo Finance, the Starbucks CEO said on the companys earnings call yesterday, I want to be clear that we remain committed to China for the long term. We see great potential for our business there in the years ahead, and remain open to how we achieve that growth.” Back to Starbucks”. . . or not Late last summer, Niccol was brought on board at Starbucks as its new CEO in order to turn the struggling chain around. As part of that turnaround, Niccol unveiled the Back to Starbucks plan in which he implemented a number of changes, including a simplified menu and a controversial no-loitering policy. However, Starbuckss latest Q2 results and the companys continued decline in comparable U.S. sales will leave many industry watchers wondering just how well that Back to Starbucks plan is working. Niccol himself acknowledged that Starbuckss Q2 results are disappointing, but quickly noted that “behind the scenes we made a lot of progress and have real momentum with our ‘Back to Starbucks’ plan, according to Yahoo Finance. Niccol also addressed the plan directly in the companys official earnings release, saying, My optimism has turned into confidence that our ‘Back to Starbucks’ plan is the right strategy to turn the business around and to unlock opportunities ahead. He added: “Improving transaction comp in a tough consumer environment at our scale is a testament to the power of our brand and partners getting ‘Back to Starbucks.’ We are on track and if anything, I see more opportunity than I imagined. SBUX stock sinks However, while Niccol might see more opportunity, investorsfor today at leastseem to have a hard time imagining the same. As of the time of this writing, Starbucks stock is now down over 8% in premarket trading to $78 per share. SBUX shares had closed yesterday up about 1.1% to $84.85 before the company announced its Q2 results. Year to date, Starbucks shares were already down over 7% as of yesterdays closebefore todays further 8% premarket drop. As of yesterdays close, shares were also down nearly 4% over the past 12 months.
Category:
E-Commerce
The NFT market crash has a long tail. In the late 2010s, crypto enthusiasts and web3 advocates celebrated the arrival of digital art. Non-Fungible Tokens, they argued, could offer the permanence and investment value of a traditional painting. Not anymore: even amid President Trumps memecoin surge, NFT valuations continue to hit new lows. The market has been in free fall for nearly two years, with no bottom in sight. While NFTs may be dead, NFT lawsuits are alive and well. Corporate suppliers are beginning to regret their blockchain experiments. The NFT lawsuit boom Most recently, buyers of Nikes NFTs sued the retailer for $5 million. Nike had acquired the virtual sneaker shop RTFKT in 2021, generating nearly $200 million in NFT sales. But in 2024, Nike began winding the operation down. The lawsuit alleges that the shutdown destroyed demand for RTFKTs NFTs, effectively causing “the rug to be pulled out from under” buyers, according to Reuters. Some RTFKT NFTs even briefly displayed error messages during the turmoil. The online sportsbook DraftKings also ventured into the NFT space, only to shut down its Reignmakers NFT marketplace in July 2024. Meanwhile, a 2023 lawsuit alleged that DraftKings sold NFTs as unlicensed securities, reaping the full benefit of initial sales and a 5% commission on secondary sales. That case has since been settled, with DraftKings agreeing to pay out $10 million in February to those who purchased NFTs between 2021 and the shutdown. NFT buyers have also gone after the celebrities who hawked their fast-declining digital assets. Shaquille ONeals 2023 lawsuit recently concluded, with the former NBA player agreeing to pay out $11 million (plus $2.9 million in attorneys fees) to buyers of his Astrals Project NFTs. Meanwhile, the MAGA-friendly Nelk Boys are still battling their own lawsuit, which claims the YouTubers promised additional perks with their NFT sales that were never fulfilled. For corporations and celebrities, NFTs were a side business. But for companies dedicated solely to producing digital assets, these lawsuits are far more threatening. Dapper Labswhich partners with companies like Disney and the NFL to build branded NFTsrecently settled for $4 million over claims that its NBA Top Shot moments were unregistered securities. Yuga Labs, meanwhile, has been stuck in court for years fighting copyright battles over its Bored Ape Yacht Club. Recently, it even petitioned for access to a copying artists crypto wallet. How NFTs became a bad corporate bet Just a few years ago, major companies from Nike to Coca-Cola were racing to launch web3 ventures. Some are still ongoing; many have flamed out. And with the barrage of lawsuits now hitting NFT suppliers, these blockchain bets are looking increasingly risky. They may also fail to deliver value. NFTs were meant to serve as brand extensionsespecially for luxury companies, which sold highly expensive goods in digital form. But according to a recent study in the Journal of the Association for Consumer Research, NFT availability may actually have a negative effect on consumer sentiment. The researchers found that for goods with web3 iterations, the physical counterparts were perceived as less luxuriousand thus less worth spending on. NFTs have lost their value to major companies. Theyre not effective brand extensions, theyre not sustainable investments, and theyre barely even good cash grabs anymore. All theyre left with is a mess of lawsuits.
Category:
E-Commerce
Billionaire entrepreneur, NBA owner, and CEO of Wonder Marc Lore reveals that he plans all his meals with AIand he loves it. Its just one part of his vision for transforming peoples relationship to food and health. His startup, Wonder, has already acquired Blue Apron, Grubhub, and the media brand Tastemade. Lore shares how these acquisitions and embrace of personalized AI-driven dining are all laddering up to a superapp for mealtime. This is an abridged transcript of an interview from Rapid Response, hosted by Robert Safian, former editor-in-chief of Fast Company. From the team behind the Masters of Scale podcast, Rapid Response features candid conversations with todays top business leaders navigating real-time challenges. Subscribe to Rapid Response wherever you get your podcasts to ensure you never miss an episode. How do you describe what Wonder is? At the core, Wonder is a vertically integrated food-delivery platform. So think Grubhub, but we actually own the restaurants. So we both do the delivery, we own the restaurants, and we cook the food. That enables us to have a superior delivery experience. So out of a single, 2,800-square-foot kitchen, we can cook 30 different restaurants across 30 different cuisines, so everything from a high-end steakhouse, Bobby Flay Steak, José Andrés, Spanish tapas, burgers, barbecue, Chinese, Mexican, Italian, Middle Eastern, Thai, 30 different cuisines with only two pieces of electric cooking equipment. It’s set up more like a micro-fulfillment center. All the food is fresh and it’s cooked to order. How does one kitchen offer hundreds of menu items and operate with as few as two staffers? You’re not reheating frozen food. So are you using different kind of equipment, different kind of processes, all of that? Yeah, it’s different equipment, different processes. The proteins are sous vide, so they’re par-cooked. They sit in a tank of hot water. Restaurants do something similar, but we do that ahead of time so we’re able to finish a steak in six minutes to perfect temp every time. We’re able to cook a pizza in 90 seconds. We can cook pasta without water. We’ve invented new ways of cooking food where we can replicate the quality, but also do it with a lot less labor. And the benefit for consumers is being able to order from multiple restaurants in a single delivery so you can order from five different restaurants and get it all delivered hot in under 30 minutes. When I asked you how you describe what Wonder is, I was curious which direction you were going to go in because your history and part of Wonder is sort of the tech side, and there’s been talk about being a superapp, which is kind of a buzzy term these days. So can you square those things for me? The bigger vision is a superapp for mealtime, meaning all the ways in which a consumer might want to consume food. It could be first-party through Wonder, it could be from your local restaurant delivered via Grubhub, it could be a meal kit from Blue Apron, it could be groceries, it could be even restaurant reservations, so all the ways in which you eat. The reason why we want to capture all those occasions is because we’re building this AI-based platform wrapper around it that’s going to, in the future, be able to autonomously feed you according to your budget and health goals. Autonomously feed you. So I’m not going to decide what it is I want to eat. The AI is going to tell me what I want to eat or what I should eat? AI will learn your food preferences better than you do yourself and that you’ll be happy to rely on AI. So personally, now about 90% of my meals are all AI derived. So AI tells me what to eat for breakfast, lunch, and dinner. That’s the oatmeal that I was explaining to you this morning. I should ask you to tell everybody what you had for breakfast this morning. You told me this story before I started recording, and I was compelled by the specificity of it. It was steel-cut oatmeal with fivenot four, not sixfive raw walnuts, two tablespoons of flaxseed, two tablespoons of chia seed, half a banana, and half a teaspoon of cinnamon. It’s your custom recipe. But just because that’s what you had today doesn’t mean that that’s what AI’s going to tell you to have tomorrow. No, but I rate it very highly, so AI does know I do like to eat that, so I do get that quite often. I basically get my blood work done. I have my Oura ring, my blood glucose monitoring, all the blood results, all the biomarkers, all the data gets fed to AI. I set health goals, and based on the health goals and based on the foods I love, it basically tells me, Okay, well then eat this for breakfast, eat this for lunch, eat this for dinner. In the future, if I go out to a restaurant for dinner, AI will be able to tell me what to order off the menu because now we have 375,000 menus via Grubhub. So that’s the future. It’s pretty technocratic though, right? A lot of people take joy in sort of choosing what to eat, or being . . . I don’t know, trying something different that maybe they didn’t know they liked. I mean, based on my own personal experience, I love it. I can’t imagine having to think about what I want to eat because it knows the ingredients you like and so it comes up with different meals that are new and you’re like, “Wow, I never even thought about eating this,” and then you wind up liking it, so the variety’s there. It remembers every great meal you’ve ever had. So if I rated something 9.5 six months ago, I forgot it two weeks later. AI doesn’t forget. And so these great dishes get rotated. If you leave it up to me, I’m thinking of the same three things, probably what I had yesterday or the day before, and maybe a couple other things. The brain, it’s not good at remembering all the great meals you’ve ever had, but AI doesn’t forget. So think about it not as a computer telling you what to do, but it’s really a better version of yourself. It’s sort of like if you could capture the best of your brain’s abilities to think about food, that’s AI. And when you talk to the celebrity chefs you deal with, José Andrés or Bobby Flay or Marcus Samuelsson, and you tell them this story, are they like, “Oh, that’s great,” or are they like, “Well, wait a minute, that’s what we bring to it? No. I mean, it doesn’t change. hink about it. You could as an artist, as a creative, as a chef, create a bunch of dishes that you hope resonate with people, and then each individual person’s AI is going to have different preferences, and it’s going to prefer certain meals over others. So nothing changes. The creative canvas is still necessary. It’s still valuable. It doesn’t change that at all. What it does change is having to go to a restaurant and having to spend time, look at the menu, look at everything. I mean, it’s just, boom, there it is, get this. AI knows you better than your partner or better than your best friend. You might have biomarkers that have issues. I had low iodine, I had high mercury. I don’t have to think about it. AI is giving me kelp to fix my iodine. I’m not getting tuna because I have high mercury. It’s taking care of all these health issues in the background without having to think about it. So it’s like my personal food critic and my personal doctor working together to give me what’s ideal. It’s really fascinating because it’s able to fix your health issues but still get good scores. So number one, you have to love the food. Okay. Now, given the foods you love, AI, you have to now make Marc healthy. And so AI does these little things, and I see it trying things that are a little bit more healthy, and I give it a bad rating. It’s like, “Okay, he doesn’t want to. . . . That’s too healthy for him,” right? And so it’s found a really nice happy medium now where I love every meal, and I’ve never been healthier, and I’m not having to think about what I want to eat. I don’t spend any time on it. I sit down. It’s a great meal. I mean, this is the future.
Category:
E-Commerce
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