Starbucks Corporation, together with its subsidiaries, operates as a roaster, marketer, and retailer of coffee internationally. The company operates through three segments: North America, International, and Channel Development. Its stores offer coffee, tea, and other beverages, roasted whole beans and ground coffees, complementary food, packaged coffees, single-serve products, and ready-to-drink beverages; and various food products, such as pastries, breakfast sandwiches, and lunch items. The company also licenses its trademarks through licensed stores, and grocery and foodservice accounts. The company offers its products under the Starbucks Coffee, Teavana, Seattle's Best Coffee, Ethos, and Starbucks Reserve brands. Starbucks Corporation was founded in 1971 and is based in Seattle, Washington.
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Starbucks Workers United calls for boycott on pumpkin spice latte launch day
Starbucks Workers United, representing 12,000 members, is calling for a boycott of all Starbucks restaurants on the same day the company launched its pumpkin spice latte. The union is demanding a $17 per hour wage, increased staffing, and more hours for baristas, while accusing Starbucks of violating U.S. labor laws and wasting money on artificial intelligence. The union said the company's refusal to settle a fair contract leaves workers with no choice but to boycott. Last year, foot traffic at Starbucks surged 27% on the pumpkin spice latte launch day. Starbucks has not yet responded to a request for comment.
Starbucks Raises Fiscal 2026 Guidance After Strong Turnaround
Starbucks raised its fiscal 2026 outlook, now expecting U.S. comparable store sales growth slightly above 6% and adjusted earnings of $2.55 to $2.65 per share, up from a prior range of $2.25 to $2.45. The company's Back to Starbucks turnaround has driven a 27.2% year-to-date stock gain, with fiscal third-quarter operating margin expanding about 430 basis points to 14.4% and EPS rising roughly 70% to 85 cents. Starbucks also surpassed 1,000 North American coffeehouse uplifts and raised its fiscal 2026 target to at least 1,500, while about 90% of its international portfolio now operates through licensing after the China joint-venture transition. Despite the momentum, the stock trades at a forward price-to-sales multiple of 3.09, below the industry average of 3.18, and faces tougher traffic comparisons and an uncertain consumer backdrop, leading Zacks to rate it a Hold.
Starbucks to Lay Off Over 200 Workers at Seattle HQ
Starbucks is eliminating more than 200 Seattle-based positions this fall as it restructures corporate operations and shifts some employees to its Nashville office. According to a WARN notice filed with the Washington State Employment Security Department, the first separations are expected October 19, with all affected employees leaving by November 1. Approximately 120 of the separations involve employees who declined to relocate to Nashville, while roughly 104 positions are tied to organizational changes from restructuring announced in May. The cuts span corporate functions including accountants, engineers, managers, real estate representatives, and store designers, and include two vice president positions. Starbucks said the job losses are permanent, and affected employees are receiving 60 days' notice without union representation or bumping rights.
Starbucks cuts 104 more corporate jobs in store development
Starbucks is cutting 104 employees in its Store Development and Design department as it wraps up its Back to Starbucks restructuring. Another 120 employees who choose not to relocate from Seattle to a new corporate office in Nashville will also be let go. The moves complete a plan to trim $2 billion in costs over two years, bringing total corporate job eliminations since early 2025 to as many as 2,500. CEO Brian Niccol said savings are being funneled into increased hours for in-store baristas, technical upgrades, and store redesigns aimed at making locations more welcoming. The company reported its fourth consecutive quarter of positive global comparable store sales and second consecutive quarter of consolidated margin growth.
Starbucks Unicorn Frappuccino Drives Record North America Sales Weekend
Starbucks reported its highest-ever North America sales weekend, driven by the limited-time Unicorn Frappuccino promotion. The colorful beverage tapped into social media and pop culture trends, generating heavy store traffic and strong demand. Management linked the performance to a focus on fresh menu ideas that connect with current cultural moments. The company has a market cap of about $122.7 billion and operates its own stores worldwide.
McDonald's Launches National Energy Drink Push Against Starbucks
McDonald's launched its Red Bull Dragonberry Energizer nationwide Monday, marking its first national push into energy drinks and opening a new front in the afternoon beverage battle against Starbucks, Dutch Bros and convenience-store chains. The drink combines Red Bull with blue raspberry flavoring and freeze-dried dragonfruit pieces, with a reduced-sugar version made with Red Bull Zero also available. A Citi survey found 60% of energy-drink consumption at restaurants and coffee shops is incremental, and 74% of respondents said they were very or somewhat interested in buying energy drinks from restaurants or coffee shops. Morgan Stanley has called McDonald's energy-drink platform a swing factor to watch during the second half. McDonald's shares slipped 0.3% in premarket trading to $272.13, near the lower end of their 52-week range of $260.96 to $341.75.
Starbucks Korea Posts First Loss in 27 Years After Boycott
Starbucks Korea posted its first quarterly operating loss since it started operations 27 years ago after a marketing debacle triggered a boycott, criticism from President Lee Jae Myung, and a police raid of its corporate offices. SCK Company Co., which operates Starbucks in Korea, recorded an operating loss of 18.4 billion won ($12.9 million) in the three months through June, compared with an operating profit of 40.3 billion won a year earlier, according to a statement Thursday. Net sales fell 6.1% to 747.3 billion won from a year ago, even as the company added 49 more stores in the quarter in South Korea, which is their largest market outside the US and China. The company unleashed public anger with a "Tank Day" promotion in May, offering discounts on large "Tank" tumblers on the anniversary of South Korea's 1980 Gwangju uprising, when troops and tanks were deployed to suppress pro-democracy protesters. US-based Starbucks Corp. issued a statement calling the campaign "unacceptable," Starbucks Korea's chief executive was dismissed, and Shinsegae Group Chairman Chung Yong-jin bowed repeatedly during a televised apology and took responsibility for the episode.
Starbucks raises full-year 2026 guidance after reporting fiscal Q3 results
Starbucks raised its full-year 2026 guidance after reporting fiscal third quarter results on July 29, 2026, with revenue of US$9.32 billion and net income of US$1.05 billion. Management now expects consolidated net revenues to be flat or show slight growth year over year, with diluted GAAP earnings per share in a range of US$2.14 to US$2.24. The company also confirmed that no additional shares were repurchased between March 30 and June 28, 2026, while 670,188,630 shares have been bought back since the program began in 2006. Starbucks shares trade at US$105.58, with a year-to-date return of 25.74%, and the most followed valuation narrative puts fair value at US$106.25, almost exactly in line with the recent close.
Jim Cramer Sees Merit in Starbucks Turnaround After Earnings Beat
Jim Cramer expressed optimism about Starbucks Corporation's turnaround efforts following the company's fiscal third-quarter earnings beat. Starbucks reported revenue of $9.32 billion and adjusted earnings per share of $0.85, surpassing analyst estimates of $9.16 billion and $0.66. Key metrics included North America same-store sales growth of 8.1%, global same-store sales growth of 7.9%, and an operating margin expansion of 430 basis points to 14.4%. Cramer commented on the results in a series of tweets, stating that the company was making progress. The stock has risen 16% over the past year and 26% year-to-date.
Companies defy macro uncertainty and raise guidance
A growing number of companies are raising their profit outlooks despite macroeconomic uncertainty. More S&P 500 firms are lifting guidance than cutting it, and Wall Street analysts have raised third-quarter earnings estimates for the index for the second consecutive quarter. Argus research analyst Christine Dooley views consistent guidance raises as a catalyst for market-beating returns. Among the companies that have raised guidance in the second quarter so far are Cheesecake Factory, Ford, General Motors, Hasbro, Starbucks, Coca-Cola, Charles Schwab, PayPal, US Bancorp, ASML, Seagate Technology, Supermicro Computer, Bristol Myers Squibb, Johnson & Johnson, UnitedHealth Group, 3M, Lockheed Martin, Northrop Grumman, United Airlines, and United Parcel Service.
Starbucks Q3 FY2026 EPS beats estimates by 29% as turnaround gains traction
Starbucks reported third-quarter fiscal 2026 non-GAAP earnings of $0.85 per share, beating the consensus estimate of $0.66 by nearly 29%. Revenue dipped slightly to $9.32 billion due to the China retail divestiture to a Boyu Capital joint venture, but global comparable sales surged 7.9%, North America comps rose 8.1%, and operating margin expanded 430 basis points to 14.4%. CEO Brian Niccol called the results "the turn in our turnaround," crediting his "Back to Starbucks" plan focused on baristas, throughput, and in-store experience. A $10,000 investment in Starbucks at the 2011 rebrand has grown to $82,271, nearly doubling the S&P 500's return over the same period. Shares trade at 35 times forward earnings with a consensus price target of $111.74, leaving limited cushion if operational improvements falter.
Starbucks Sales Rebound but Dutch Bros Offers Bigger Growth Runway
Starbucks reported a 7.9% increase in U.S. same-store sales for the third quarter, driven by a 4.2% rise in transactions, as CEO Brian Niccol's turnaround plan gains traction. The company raised its full-year earnings per share guidance to around $2.60, representing 22% year-over-year growth, and expects global same-store sales growth to approach 6%. Meanwhile, Dutch Bros, which operates 1,177 stores and aims to reach 2,029 by 2029 with a long-term target of 7,000 U.S. locations, continues to benefit from strong demand for customizable energy drinks. Dutch Bros generates only about a third of its sales in the morning, compared to roughly half for its peers, and is using a new food program and a loyalty program of over 15 million members to boost morning traffic. While Starbucks trades at 34 times forward earnings, Dutch Bros trades at 66 times, reflecting its larger growth runway.
Starbucks and Coca-Cola show scale still wins as tech stocks burn
This week’s tech selloff underscored a classic investing lesson: the market still rewards large, scaled companies that find a new gear. Meta shares tumbled after CFO Susan Li declined to provide a 2027 capex outlook, fueling fears of runaway AI spending. In contrast, Starbucks posted a 7.9% jump in global comparable-store sales, its fourth straight quarter of growth under CEO Brian Niccol, with adjusted earnings of $0.85 per share beating estimates by $0.19 and operating margin expanding to 14.4%. Coca-Cola delivered a 7% net sales increase to $13.4 billion and an 11% rise in comparable earnings per share to $0.97, driven by a 5% volume gain for its trademark brand and a 16% surge in Coca-Cola Zero Sugar. Both consumer giants raised guidance or signaled durable momentum, reminding investors to look beyond the AI trade.
Starbucks Stock Has More Upside Than Chipotle on Margin Recovery Potential
Starbucks and Chipotle both reported better-than-expected same-store sales last quarter, but Starbucks may be the better buy due to its opportunity to recapture lost operating margins. Starbucks global comparable sales rose 7.9%, above the 5.7% consensus, while Chipotle's comps increased 2.2%, topping the 1.3% estimate. Starbucks North American operating margin improved 30 basis points to 13.6%, still well below its prior 21% level, suggesting significant room for recovery under CEO Brian Niccol. Chipotle's restaurant-level margin fell to 25.2% from 27.4% amid commodity and wage inflation. Starbucks trades at a forward price-to-earnings ratio of 35.5 times fiscal 2027 estimates, compared to 28.5 times for Chipotle, but the potential margin expansion gives Starbucks the edge in execution-driven outperformance.
Starbucks CEO says pumpkin spice latte will remain a seasonal offering
Starbucks chair and CEO Brian Niccol said the pumpkin spice latte will not become a permanent menu item, calling it the defining drink of the fall season. Speaking on Yahoo Finance's Opening Bid, Niccol noted the company has discussed the idea multiple times but concluded the beverage should remain seasonal, kicking off the fall-to-holiday run. The pumpkin spice latte, first introduced in 2003, has sold hundreds of millions globally and typically returns to US menus in late August. The decision comes as Starbucks reported a 7.9% rise in global comparable-store sales, adjusted earnings of $0.85 per share, and an expanded operating margin of 14.4%, while raising its full-year guidance.
FOMC Holds Rates Steady for Fifth Meeting as Bond Yields Climb
The Federal Open Market Committee kept the federal funds rate at 3.50 to 3.75 percent for the fifth consecutive meeting, with three dissenting members voting for a 25-basis-point hike. Fed Chair Warsh emphasized the 2 percent inflation goal and attributed elevated inflation to supply shocks, including oil price increases tied to the war in Iran. The 10-year Treasury yield rose from 4.63 percent to 4.69 percent during the session, while the 2-year yield edged down to 4.26 percent, widening the yield curve beyond 40 basis points for the first time in several sessions. After the bell, Meta Platforms shares fell 7 percent after reporting mixed fiscal second-quarter results, with earnings of 6.18 dollars per share missing the Zacks consensus and revenues of 60.80 billion dollars beating estimates. Microsoft posted earnings of 4.74 dollars per share on revenues of 90.01 billion dollars, both above expectations, aided by a 3.2-billion-dollar gain from Anthropic and 43 percent Azure growth. Qualcomm shares dropped 4.4 percent on a one-cent earnings miss to 2.21 dollars per share, while Starbucks beat earnings estimates with 85 cents per share but missed on revenues at 9.3 billion dollars, and Chipotle Mexican Grill modestly outperformed with earnings of 33 cents per share on revenues of 3.35 billion dollars.
Starbucks afternoon business gains traction with new drinks and food
Starbucks is seeing its long-untapped afternoon business begin to perk up, CEO Brian Niccol told analysts on the company's earnings call. The midday and afternoon daypart generates $11 billion in sales after 11:00 a.m., and Niccol said the company is testing wraps and will soon debut sparkling beverages to build on transaction growth that has been stronger in the morning. Global comparable-store sales rose 7.9%, well ahead of expectations, marking the fourth straight quarter of same-store sales growth under Niccol's turnaround plan. Adjusted earnings reached $0.85 per share, beating the $0.66 forecast, and the operating margin expanded to 14.4% from 10.1%. Starbucks raised its full-year guidance and shares rose 6% in early trading, with the stock up nearly 30% this year.
Meta and Microsoft lead premarket swings after quarterly results
Several major companies saw sharp premarket moves following their latest earnings reports. Microsoft jumped 9% after quarterly revenue of $90.01 billion beat the $87.62 billion estimate, with Azure growth of 43% at constant currency exceeding expectations and Azure revenue surpassing $100 billion for the first time in the 2026 fiscal year. Meta Platforms tumbled nearly 9% after earnings per share of $6.18 missed estimates by $1.04 and its third-quarter revenue forecast of $61 billion to $64 billion came in light at the lower end. Teladoc Health plunged 18.5% on a revenue miss and lowered full-year guidance, while Norwegian Cruise Line fell 7% after cutting its full-year earnings forecast to $1.50 per share. Starbucks rose 6% on raised full-year outlook and same-store sales growth of 7.9%, and Fortinet soared 12% on strong billings and an upbeat third-quarter forecast. MarketAxess shares were halted on news of its acquisition by Intercontinental Exchange for $167 per share in a deal valued at more than $5 billion.
Microsoft surges 8% on AI-driven earnings beat while Meta drops 7% on spending concerns
Microsoft shares surged 8% after the company delivered a strong fiscal fourth-quarter beat fueled by accelerating AI and cloud demand, while Meta Platforms fell 7% as surging expenses and a higher capital-expenditure outlook overshadowed solid growth. Microsoft reported revenue up 18% to $90 billion and adjusted earnings per share of $4.74, with Azure revenue growing 43% and Intelligent Cloud sales exceeding expectations; Azure surpassed $100 billion in annual revenue for the first time and Microsoft 365 Copilot reached more than 30 million paid seats. Meta’s second-quarter earnings per share missed estimates as operating expenses surged 55% on higher AI investment, legal costs, and restructuring charges, and the company raised the lower end of its fiscal 2026 expense outlook and increased capex guidance to $130 billion to $145 billion. Among other movers, Chipotle Mexican Grill gained 6% on stronger-than-expected comparable sales and an improved full-year outlook, Starbucks jumped 5% after its fourth consecutive quarter of positive comparable sales and upbeat guidance, Teladoc Health plunged 17% on a revenue miss and weak guidance, and Qualcomm fell 5% as its fourth-quarter adjusted earnings-per-share guidance came in below expectations.
Starbucks Raises Full-Year Profit Guidance by About 10% on Strong Comparable Sales
Starbucks raised its fiscal 2026 adjusted earnings-per-share guidance to a range of $2.55 to $2.65, up from the prior $2.25 to $2.45, an increase of roughly 10% at the midpoint. The upgrade was driven by global comparable store sales growth of 7.9% in the fiscal third quarter, with comparable transactions rising 4.2% and average ticket increasing 3.5%. In the U.S., comparable sales also rose 7.9%, supported by 4.2% transaction growth and a 3.6% higher ticket. Non-GAAP operating margin expanded 430 basis points year over year to 14.4%, and adjusted earnings per share reached $0.85, up 70% from a year earlier. Revenue slipped 1% to $9.3 billion, reflecting the conversion of the China business to a joint venture structure, while the company ended the quarter with 41,304 stores worldwide after 175 net new openings. Shares rose about 5% in after-hours trading, moving back near their 52-week high of $109.23.
Meta shares tumble 10% on earnings miss while Microsoft and Starbucks rise after hours
Meta Platforms shares tumbled almost 10% in extended trading after the company reported earnings per share of $6.18, missing analysts' estimates by $1.04 per share, and forecast third-quarter revenue between $61 billion and $64 billion, the lower end of which is lighter than the $63.15 billion estimated by analysts. Microsoft shares rose about 3% after quarterly revenue of $90.01 billion topped estimates of $87.62 billion, with Azure growth of 43% at constant currency beating StreetAccount estimates of 40.2% growth, and the company said Azure revenue in the 2026 fiscal year surpassed $100 billion for the first time. Starbucks shares jumped 5% after the coffee retailer raised its full-year outlook and reported same-store sales growth of 7.9%, with adjusted earnings of 85 cents per share beating estimates of 66 cents per share and revenue of $9.32 billion exceeding the $9.16 billion expected. Carvana shares tumbled 14% after the online used-car retailer's full-year earnings guidance of between $2.7 billion and $3 billion missed Wall Street expectations, which included forecasts of $3 billion to $3.2 billion from Deutsche Bank and $4.45 billion from Morgan Stanley. Other notable movers included Fortinet soaring more than 11% on strong billings, Lam Research jumping more than 6% on better-than-expected results, and Qualcomm falling more than 5% on mixed quarterly results.
Starbucks reported Q2 CY2026 results that exceeded market revenue expectations, with sales falling 1.4% year on year to $9.32 billion. Its non-GAAP profit of $0.85 per share was 30.8% above analysts' consensus estimates. Same-store sales rose 7.9% year on year, an acceleration from historical levels. The company provided full-year adjusted EPS guidance of $2.60 at the midpoint, beating analyst estimates by 8.8%. The stock traded up 9.1% to $112.42 immediately after reporting.
Microsoft, Meta, and Ten Other Major Companies Report Earnings After the Bell on July 29
A slate of major companies including Microsoft, Meta Platforms, and Lam Research are scheduled to report quarterly earnings after the market closes on July 29, 2026. Microsoft is expected to post earnings per share of $4.21, a 15.34% increase from the same quarter last year, with a forward price-to-earnings ratio of 23.55. Meta Platforms' consensus estimate stands at $7.10 per share, a slight 0.56% decline year-over-year, and its P/E ratio is 20.18. Lam Research is forecast to report $1.69 per share, up 27.07%, with a P/E of 47.47. Other notable reports include Arm Holdings with a consensus of $0.18 per share, Qualcomm at $1.54, Starbucks at $0.66, Fortinet at $0.66, Equinix at $10.14, Canadian Pacific Kansas City at $0.89, O'Reilly Automotive at $0.85, Robinhood Markets at $0.43, and Deutsche Bank at $0.91. Several of these companies have consistently beaten estimates in recent quarters, while a few, such as Arm Holdings and Robinhood, missed in the prior quarter.
Zacks Highlights Five Earnings Charts to Watch Beyond the Magnificent Seven
Zacks Investment Research identifies five companies with strong earnings track records as key reports to watch this week, shifting focus away from the Magnificent Seven. Visa has never missed on earnings since its 2008 IPO, with shares up 8% in the last month and a forward P/E of 27. Lam Research has missed only once in five years, yet its stock is down 30.5% in the last month despite expected earnings growth of 37.2% this year. Starbucks, amid a turnaround under CEO Brian Niccol, beat earnings last quarter after four consecutive misses and trades at a forward P/E of 42.8. Robinhood Markets missed last quarter after five straight beats, with shares down 6.9% over the past year and a forward P/E of 51. MasTec, an AI infrastructure play, has missed only once in five years and expects earnings to jump 46.3% this year, though its stock has fallen 20% in the last month.
Starbucks Stock Up 23% This Year Ahead of Q3 Earnings Report
Starbucks is set to report fiscal third-quarter results after market close on Wednesday, July 29, with analysts expecting just over $9.1 billion in revenue and $0.65 per share in net income. That revenue projection is nearly 4% below the year-ago quarter, largely due to the shift of its China business into a 60/40 joint venture with Boyu Capital, while the earnings estimate represents a 30% improvement. The company's second quarter saw net revenue rise nearly 9% to over $9.5 billion and adjusted earnings jump 22% to $0.50 per share, prompting management to raise full-year comparable sales growth guidance to at least 5% and adjusted EPS to a range of $2.25 to $2.45. North America same-cafe sales grew over 7% in the second quarter, but international growth was weaker, with China posting a 1.6% decline in average ticket. The stock trades at a forward P/E of nearly 35, and the author expresses caution, viewing Starbucks as a mature business with limited room for expansion despite recent operational improvements under the Back to Starbucks strategy.
Starbucks options market prices in 5.51% post-earnings stock move
Starbucks is set to report its third-quarter results on July 29 after the closing bell, with the options market implying a post-earnings move of about 5.51% in either direction. Based on the current share price of $105.36, that suggests an expected trading range of roughly $99.55 to $111.17. Wall Street expects revenue of $9.12 billion and non-GAAP earnings per share of $0.65. Near-term options positioning shows a bullish tilt, with 9,554 call contracts versus 7,699 put contracts and a put/call open interest ratio of 0.81. Further out, the $110 call holds the largest overall call open interest at 35,041 contracts, while the $60 put has the highest put open interest at 43,737 contracts.
Starbucks to report Q2 earnings with revenue expected to decline 3%
Starbucks is set to announce its second-quarter earnings this Wednesday after market close. Analysts expect revenue to decline 3% year on year, a reversal from the 3.8% increase recorded in the same quarter last year. The company beat revenue expectations last quarter, reporting $9.53 billion, up 8.8% year on year, with strong same-store sales and EPS beats. Over the last 30 days, analyst estimates have remained largely unchanged, though Starbucks has missed Wall Street revenue estimates multiple times over the past two years. The average analyst price target stands at $106.45, compared to the current share price of $104.
Tata Consumer Products Reports 12% Revenue Growth in Q1 FY27
Tata Consumer Products Ltd reported a consolidated revenue growth of 12% for the first quarter of fiscal year 2027. The company's growth businesses saw a 47% year-on-year increase, now accounting for more than one-third of the India business, while EBITDA grew by 19% with margins expanding 70 basis points to 13.6%. India tea volumes increased by 2% but revenue declined 4% due to passing on cost benefits to consumers, and the non-branded business saw a 7% revenue decline. The company launched 14 new products during the quarter and its Starbucks joint venture reported an 11% revenue growth year-on-year.
Detpak Opens New Manufacturing Facility in Spartanburg, South Carolina
Global packaging supplier Detpak has opened a new manufacturing facility in Spartanburg, South Carolina. The multi-million dollar facility spans 175,000 square feet and will initially employ over 50 people from the local community. Equipment commissioning is currently underway, with full production expected to commence in August. The new plant strengthens Detpak's ability to support major Quick Service Restaurant customers with locally produced paper-based packaging solutions, serving clients such as McDonald's, KFC, Starbucks, and Wendy's. CEO Sascha Detmold Cox stated the investment marks a key milestone in the company's global expansion and reinforces its long-term commitment to the North American market.
Starbucks Shares Surge 24% in 2026, Poised to Beat Nasdaq-100 for First Time Since 2022
Starbucks shares have climbed 24% so far in 2026 as of July 21, putting the company on track to outperform the Nasdaq-100 index for the first time since 2022. The coffee chain reported growing global comparable transactions for a second straight quarter in its fiscal second quarter ended March 29, with CEO Brian Niccol noting that U.S. company-operated business grew transactions across all day parts. Starbucks raised its full-year profit guidance to adjusted earnings per share of $2.25 to $2.45, implying a 10% year-over-year jump at the midpoint, and has a target to achieve 5% annual revenue growth by fiscal 2028 after a flat top line expected in fiscal 2026. The stock trades at a forward price-to-earnings ratio of 35.6 and offers a dividend yield of 2.37%, more than double the S&P 500's yield, with payouts increasing 210% over the past decade.
Motley Fool Contributors Discuss China Market Challenges and S&P 500 Volatility
Motley Fool contributors Tyler Crowe, Matt Frankel, and Jon Quast discussed the challenges of the China market and the volatile first half of 2026 for the S&P 500. They noted that 22 S&P 500 stocks doubled or more in the first half, with AI infrastructure plays like Micron and Corning among the winners, while SaaS companies and some consumer brands faced headwinds. The conversation highlighted how China has shifted from a growth engine to a headwind for many U.S. companies, citing Nike's 30% sales decline over five years, Starbucks selling a majority stake in its China operations, and declining market share for non-Chinese automakers. They identified Apple and memory companies as potentially facing similar pressures, with Chinese competitors like Huawei and ChangXin Memory Technologies closing the technology gap. The group also debated whether companies with heavy international exposure are weaker investments today compared to those with more domestic focus, and they addressed a listener question about valuation discrepancies between AI hardware suppliers and software giants.
Moderate Coffee Intake Linked to Lower Cardiovascular Risk, Says American Heart Association
The American Heart Association said moderate caffeine intake appears safe for most adults and may be linked to lower cardiovascular risk. Up to 400 milligrams of caffeine per day, roughly 3 to 5 cups of coffee, is generally considered safe. Drinking caffeinated coffee without added sugar, flavoring or cream was associated with a lower risk of Type 2 diabetes, heart disease, stroke, heart failure and some irregular heart rhythms. The findings could support coffee demand at companies including Starbucks, Dutch Bros and McDonald's, as well as packaged coffee businesses such as J.M. Smucker, Nestle and Keurig Dr Pepper. Higher caffeine doses, particularly from energy shots, may raise the risk of high blood pressure and abnormal heart rhythms, which could weigh on companies such as Monster Beverage and Celsius.
Starbucks to replace Microsoft and IBM software with in-house AI tools, targeting millions in savings
Starbucks is shifting software development in-house using AI tools to replace traditional applications from vendors like Microsoft and IBM, according to a leaked internal presentation reviewed by Bloomberg. The company currently spends about $400 million annually on software, and Chief Technology Officer Anand Varadarajan earlier this year cited clear opportunities to reduce that spend. The move contributed to Microsoft shares sliding 2.4% and IBM losing 5.2% within 24 hours of the report, while Starbucks shares climbed 3% and are up 25% year-to-date. Starbucks expects to save $30 million in enterprise technology spending in 2026, including $10 million on software alone, and plans to launch a new inventory tracking and maintenance management system in late 2027 to replace its Microsoft and IBM software. The company is also developing an in-house point-of-sales system that could replace Oracle's Simphony, as leadership examines every contract and service.
Starbucks Shows Turnaround Momentum While McDonald's Faces Cost Pressures
Starbucks is showing encouraging signs in its turnaround, while McDonald's continues to navigate a challenging consumer environment. Starbucks reported its first year-over-year revenue and earnings growth in more than two years in the second quarter of fiscal 2026, with global comparable-store sales up 6% and North American comparable sales up over 7%. The company raised its fiscal 2026 outlook to at least 5% global comparable sales growth and a higher earnings-per-share range. McDonald's posted 3.8% global comparable sales growth and a 6% rise in constant-currency systemwide sales in the first quarter of 2026, gaining market share in nearly all of its top 10 markets. However, McDonald's acknowledged that U.S. company-operated restaurant margins were below expectations due to higher labor investments and restrained pricing, while franchisees face cash-flow pressure from rising input costs. Starbucks trades at a forward price-to-earnings multiple of 35.91 times, well above McDonald's 19.56 times, but its stronger earnings growth outlook and improving fundamentals give it a slight edge according to Zacks Investment Research.
Jim Cramer Continued To Believe In International Business Machines
Jim Cramer continued to support International Business Machines throughout 2025 despite modest share price performance. He praised the company for its strong software business and its quantum computing initiatives, calling it one of the most developed in the industry. In late June, IBM announced a partnership with Deloitte and Red Hat to help fortify supply chains against cyberattacks. Cramer also noted the risk of companies switching from current programs to AI, citing a potential loss of IBM's partnership with Starbucks.
Starbucks affirms $0.62 dividend and targets $400 million in software cost cuts
Starbucks confirmed its board approved a quarterly cash dividend of US$0.62 per share, payable on August 28, 2026, to shareholders of record as of August 14, 2026. The company is also pushing an intensive turnaround that includes US$400 million in targeted annual software cost savings alongside new bonus and pay structures for cafe workers. These technology savings aim to relieve pressure on profitability as labor investments, unionization pressures, and rising build costs weigh on margins. Starbucks' narrative projects $42.0 billion in revenue and $4.4 billion in earnings by 2029, implying 3.0% yearly revenue growth and an earnings increase of about $2.9 billion from $1.5 billion today.
Starbucks Channel Development Revenue Jumps 39% in Fiscal Q2
Starbucks reported a 39% year-over-year increase in Channel Development net revenues for the second quarter of fiscal 2026, driven by higher revenues from the Global Coffee Alliance. The segment, which covers packaged coffee, ready-to-drink products, and consumer-packaged platforms, provides an additional revenue path beyond company-operated stores. Starbucks highlighted strong early performance for its multi-serve Refreshers concentrate in North America, calling it the company's largest CPG launch in more than a decade, along with strong customer reception and repeat purchases. The company also launched coffee and protein ready-to-drink beverages at the end of the quarter, complementing its growing protein platform in coffeehouses. While company-operated stores remain central to the broader turnaround, Channel Development is becoming a more visible incremental revenue opportunity.
Jim Cramer recommends buying 5 stocks after rotation sell-off
Jim Cramer says a weak June jobs report triggered a rotation that pushed down shares of Johnson & Johnson, PepsiCo, Starbucks, Constellation Brands, and TJX Companies, creating a buying opportunity. On CNBC's Mad Money, he called the five stocks collateral damage from indiscriminate selling by large funds moving into AI winners. Johnson & Johnson and PepsiCo report earnings on July 15 and July 9, respectively, which Cramer sees as near-term tests. Starbucks is an accumulation play during its turnaround, Constellation's beer business is stabilizing, and TJX benefits as consumers trade down. Cramer stressed that the sell-off was driven by sector rotation, not company fundamentals.
Dan Niles says Microsoft lacks its own leading AI model
Niles Investment Management founder Dan Niles said he does not view Microsoft as a compelling investment, citing its lack of a proprietary leading large language model and reliance on OpenAI's ChatGPT. He noted that Microsoft's 27% stake in OpenAI may not shield it from competitive pressures, with Anthropic focused on the corporate market and Google dominant among consumers. Niles also pointed to a report that Starbucks is using AI to reduce $400 million in annual software spending, some of which involves Microsoft and IBM, as a sign of AI-driven disintermediation risk. He contrasted Microsoft with Meta, which owns its own large language model and trades at a cheaper valuation.
Three Beaten-Down Consumer Stocks to Watch in July
Nike, Starbucks, and McDonald's are highlighted as beaten-down consumer stocks with turnaround potential amid a gap between low consumer sentiment and rising spending. Nike posted a 465% earnings beat with EPS of 72 cents versus a 13-cent estimate, driven by its Sport Offense strategy, though revenue still declined 1.1% year-over-year. Starbucks reported a 6.2% rise in global comparable sales and raised its full-year guidance, with shares still down over 12% over five years despite a 23% year-to-date gain. McDonald's offers a $1.86 quarterly dividend backed by $7.19 billion in free cash flow, with global comparable sales up 3.8% in its latest quarter.