Starbucks CEO on Q2 miss: Didn't communicate the value we provide in a more aggressive manner
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- čas přidán 30. 04. 2024
- Starbucks CEO Laxman Narasimhan joins 'Squawk on the Street' to discuss the company's Q2 results, which reported weaker-than-expected quarterly earnings and revenue, fueled by a surprise decline in same-store sales, news of the company cutting its full-year guidance, state of the consumer, expansion plans, China market competition, economic outlook, and more.
Bro looks so nervous lol. Prices are horrifically bad value
Blinks hundred times more than my grandpa
The CEO is probably already booking flights to Monaco with that severance package he has coming
Their coffee is pricey and worst than Macdonald’s coffee so I don’t know what is a reason Y we need to return.
I prefer the Burger King coffee ☕️
@@timtsech88 for real you can get a McDonalds coffee for $2 where I am.
wow Cramer actually grilled an executive
Probably has skin in the game
@@bluezaton yeah that probably explains it
@bluezaton im pretty sure cramers charitable trust owns sbux
@@bluezaton Lol he's thinking this guy talks about customer value and the stock plummeted he must be mad not to short it now.
Tbf he's no Elizabeth homes
Mocha went from $4.75 by my house to $6.25 in 24 months. Was already overpriced before the price hike. That's why your quarter sucked
You must pay carbon taxes owed to.coumtry like Guyana. But John Jerry won't tell you 😊
Lol
Are you the type does do not provide the 18% tips?
Yeah the price increases were so bad. I stopped going to the stores
@@Ravi-re1bt well last WEF already discussed to charge carbon over your points😂😂
"We're working on action plans" should worry everyone. Those are not the words of a leader, that's a manager.
action plans == its over
Their only action plan is to lay off workers
@@abhir4982pretty much ….. I’m selling my Starbucks shares. Too many other options for coffee.
thats literally the verbiage that middle management at cvs uses 🤣
well said.
I just spit out my coffee when he said “ we didn’t communicate the value we provide” …… since when is a 300x markup considered “value”…….
😂😂😂
Hope it wasn’t Starbucks coffee
LOL. Really has to laugh at that statement.
I think one of my blood vessel just bursted😂
Couldn’t have said it better
he is selling overpriced coffee, what value is he talking about?
selling "an experience".... whatever that means
corporate mumbo jumbo, they all talk like that. He could have said something as simple as "we will be offering more deals and discounts in the app than before" and that would have sufficed instead of rambling for 2 minutes about vague nonsense.
@@abbottmd experience to go broke lol
Robotic infused coffee value
And served incredibly hot to take a sip... that is not how coffee works :))
Not really instilling confidence in Starbucks...
Would you believe this guy makes 14 million dollars a year being this bad
@@moneyglitchjon 🤦🏻
He doesn't have the guts to mention the boycott!
I'm not usually one to call for a CEO to resign, but this was an awful performance by Laxman. He seems at a loss for words, just parroting back the same lines over and over again. I think the board needs to look for a new CEO, as SBUX strategy is clearly failing. His insistence that Starbucks coffee is a "good value" is silly. It's a premium product that became too expensive, with costs above their peers. They raised prices too much and consumers are going elsewhere. A basic small coffee should not be over $5.
classic case of losing touch with your customer. Elon recognized this problem in EVs and cut prices immediately and that helped Tesla a ton. If Starbucks announced they will cut prices 25% the stores would be mobbed again. Idk what the right number is to cut but coffee demand is definitely not dropping.
not exactly -- the problem is that its not a premium product anymore, but is still priced like one. you have to pick: value or premium. You cant charge like its premium and not deliver -- people will go elsewhere.
I agree. He needs to go. And the problem isn’t his performance here. It’s the fact that he’s putting on a performance in the first place. State the facts and move on to the business of fixing the business.
A single cake pop is almost $4. If you want an iced white mocha with foam on it, it’ll cost you close to $10. And half the cup is ice.
“Value we provide”
Dude.. it’s coffee.
I’m a big Starbucks coffee fan, but this line doesn’t make sense.
Can’t wait for Luckin to come to the US so can break up the Starbucks monopoly
@@hh0686 just buy from a local cafe/coffee shop, everything is overpriced because these giant chains stiff arm every small business so they have little competition. Another one coming in from China and doing the same thing doesn't change the problem.
You should be boycotting them if you are not a nazi
@@retrodripsupport7510 most of the time even Chinese chain giants still keep prices below the American counterparts just to stay competitive. Say BYD vs Tesla, Huawei vs Apple
yup@@retrodripsupport7510
Starbucks CEO: We should do a better job communicating to customer why our Ice Latte is valued at $7.
I get premium italian ice-cream in my area for that price..
7$? Oh my! Absolutely crazy!
If you want an iced White Mocha with foam on it its going to cost you close to $10. A single cake pop is almost $4.
how does a CEO of a conglomerate not know how to handle questions? Because of this interview, I lost whatever confidence in SBUX's recovery.
In defense, there wasn't anything he could say. What is there to say when the company didn't perform? Especially given something like a coffee business. At least with tech you can trick shareholders (a la Elon Musk) and just say big words, repeat "artificial intelligence" and then the stock price shoots up. With selling coffee what do you say? That we will sell more next quarter? That's about it. hahaha.
Not trying to defend him. It was a bad interview. I just don't know what you could say.
bring back the old guy
@@Swagtildawn Maybe the CEO could choose not to appear on TV to avoid embarrassing himself? There is no law that says CEOs must do TV interviews after earnings calls. In fact, many executives of public traded companies rarely do any interviews.
Laxman did not explain why he did not prepare the market for this bad news. He kept saying they are working on a plan to translate value to the occasional Starbucks client. It sounds to me like a non answer. Count on more stock price depreciation.
roasted ☕️
Dark Roasted
I think the video cut the last portion, which was even worst.
Kek
😂
lol ppl are clueless that ppl under 30 years old are boycotting Starbucks over the Israel/ Palestine war. 🤦♂️. My daughter hasn’t bought Starbucks all year. She’s still spending on Dunkin and Dutch Bros.
God bless your daughter for standing against injustice.
@@dargay386 I think young ppl are just tired of these 70 year old war hungry leaders on both sides.
what does the boycott against Starbucks do for that war ? every kills in that part of the world
This clearly played a major part in the bad results.
But what i don't get, is: what exactly did Starbucks do to deserve a boycott? They sued the union which took a pro-Palestine stance while illicitly using the Starbucks logo. So what? It simply shows that Starbucks wants to remain apolitical and doesn't tolerate anyone taking a stance in their name. It doesn't mean they're actively supporting Israel.
This boycott makes no sense to me.
@@stephenkatz1032 it’s a standard pressure campaign. Adjacent companies that support a cause start to hurt when being boycotted. Their overt support for said cause is theorized to decline.
It’s pretty textbook.
Too much jargon and not enough action plan, time to sell
one more bad quarter this guy is gone.
People will want Howard Schultz back, like everyone wanted disney to bring Iger back
Any moment now…
no，he has to go now！
why would u want him dead?
Didn't howard hire this guy?@justinspire6058
Cramer is only mad because he's long Starbucks.
lol certainty very transparent he's long
He knows this guy is telling sh*t.
Did he have a stroke or something? His speech is garbled
Why can't Jim be like this with all CEO's?
Because he’s probably long on Starbucks and lost a bunch of money haha
let me help you out mr CEO, your customers ordering on mobile bogging down your store every weekday makes it so you can’t walk in and get a coffee anymore. so we now go to smaller coffee shops where we can walk in and actually get a coffee and not be late during the week. then when the weekend comes around we got used to better cheaper coffee and bathrooms that don’t smell like urine so we decide to go there again. I hope this helps you stop your declines over the next couple quarters
Then people go on to criticise Jim: he is brilliant here, showing the weakness of this CEO
one of his better performances , obviously long
Rough interview for this guy
He doesn’t care. He knows he can’t control the biz nor the share price. He just have to be able to talk and convince the Anglo Saxons to continue to not remove him as the CEO.
Anglo Saxons. ha. More like the Larry Fink's and Jeremy Dimons
@@bobbobertson7568 ding ding ding
@@bobbobertson7568 anglos saxons have left the building a long time ago unfortunately
cuz creamer has been holding his bag since 120, lol
Sbux needs to get rid of this CEO hack.
Back to selling Clorox for this guy!
This was brutal.
Wow. Jim really grilled him. Very rehearsed answers by the CEO. He needs to improve his overall delivery
this feels relevant to me. I don't go to Starbucks at all any more. Too expensive. Better service and value from supporting smaller more local businesses. I don't just go to Starbucks less frequently, I actively avoid it now, and didn't really think about it much until watching this rambling interview
Jimmy was mad!
He holds that cr*p
Value!!!, it is expensive
Some company looks like they need a new CEO 🤣
I was going 6 times a week but throwing away the horrible coffee 50% of the time. I also was tired of the tipping and then having to throw away bad coffee after.
You have to tip at Starbucks?
I never tip at Starbucks.
plus served extremely hot to take a sip w/out a burn... that is not how coffee works :))
God this is so accurate. . Im literally sipping on a cup right now and kinda dissapointed but I also have skin in the game XD
Pastry and plastic wrapped food at Starb. are null and void. Colorful drinks aren't coffee.
Aside from the extremely high prices and terrible food menu they have also created a toxic working environment for their staff by reducing headcount in stores to the point where everyone feels intense pressure. This company needs a new CEO to clean house and change the culture. You can charge premium prices for premium products and service but they're trying to charge premium prices for mediocre products and declining service all in the middle of an inflation/cost of living crisis. I wouldn't touch this stock with a 10 foot pole until this CEO is gone.
The food menu is sad and needs an upgrade. Also, they need decaffeinated options. If they made these two changes, I would go there pretty often, but as is, I go a few times a year. The CEO has the power to make these upgrades but I have not seen any meaningful change in the last year. It’s just been addling locations while those they have are loosing market share as it is.
New CEO needed, this guy was blowing smoke out of the rear end. High prices, the result of corporate greed, is the cause of this value miscommunication. Plain and simple!
They need to lengthen their hours and reduce their prices...And apparently they don't want you coming into a store anymore...Just go to the drive thru and throw your money out the window. Their cup sizes are ridiculously small for what they are charging.
He did the McKinsey there are three reasons thing 😂
Please tell me he is not from that crap-machine consulting company.
@@rufuspipemoshe worked there for 20 years
Jim grilled him like a man who owns a fair amount of the stock. Would like to see more of this Jim!
I can sense how under pressure this guy is, his job is in jeopardy, calm down and bring lower prices with same quality and next quarter will be better!!!
I give him less than 12 months before he's out.
It's strange that his main strategies seem to be communicating value to the consumer and promotions. Neither of those is as effective of a business model as ensuring the core offering is something consumers want (and this includes price).
absolutely agree. consistency and service have been bad for a while. price is just the last straw for people. every time they bring schultz back he focuses on consistency and service. every time some other bozo takes over, they focus on promotions.
Yes, I think he's failing to see the problem - and you can't fix what you won't acknowledge
When they ask for a tip when I go through drive through was the end of my starbucks patronage.
I haven't been to the states for a while. You are not joking?
@@definitelyno601lots of places do this now, not just starbucks
@@definitelyno601I have never been asked to tip.
Same here... 18% tips for those liberals baristas getting college loans forgiveness from my taxes....? just forget it... Lol...
It's wild that companies refuse to pay their employees enough and demand that customers fund their salaries too. Country is broken.
Holy crap. After listening to the CEO im looking at getting out!
Same. I don't think these issues will be resolved
Cramer must have held a lot of shares through earnings lmao
Schultz is the only ceo that has ever made starbucks work
Value ? 6 plus gor coffee drinks? Value ?
The Boycott Effect
It costs Starbucks like 50 cents to make each of their coffees. Yet they charge $7. Wonder why they are getting less customers. Starbucks shouldn't be charging more than $3-4 for a coffee. That's enough profit per coffee but these people are greedy.
What do you think it costs Apple to manufacture an iPhone? What do you think it costs Microsoft to make a CD with Office on it? This is standard margins for American businesses. As shareholders we look for ROE which is impossible for a F500 company to provide without large gross margins.
@@tvm73836standard margins for a world that no longer exists, a dying world of corporate nihilism. This is the beginning. People are speaking with their money because voting clearly isn’t doing that.
The labor and overhead is the killer. The profit margin is very high but the relative cost per transaction is very small. If they got rid of baristas, we would see a whole new level of profit. So far, no mention of this, even though McDonald’s is starting to do it.
@@tvm73836MacBook sales are down, iPhone sales are down. Turns out people aren't buying these products.
I love how he pushed the dude on his bad numbers. He was right to do so and was not shy about it. Good interview.
but what are they going to do about the occasional customer?
Laxman: answer the questions Jim is asking!
Drop the prices dude - lol like what is the problem it's water and beans. jesus
Starbucks is $74 right now. It was the very same price exactly 5 years ago. No growth. And it was $37 in 2014!!! Only a double in 10 years. Ouch.
The CEO doesn’t have a clue. Companies that bet big on China and the CCP end up paying for it at some point-look at Tesla and Starbucks. Secondly, the bread and butter for Starbucks are the masses. It’s no longer a “premium” coffee brand-but yet-they think that they can just raise prices endlessly with no ramifications. Starbucks has the buying power, the distribution power, has a solid online infrastructure with its app to reduce prices and gain market share. The margin that they would be sacrificing on each individual transaction would totally be made back with profit through the increase in volume. Starbucks should be using their size and buying power to put pressure on Tim Hortons, Dunkin’ and McDonalds--yet-they are just letting those other companies take market share from them.
3:07 he talks about "bundles" and says a "beverage and a drink at a certain price". A beverage is a drink sir
Not a huge Cramer fan and would never be long starbucks but he crushed it here. Hold these people to task on the BS.
The CEO knows their coffee is overpriced. There is nothing "value" about a $6-$10 cup of basic coffee.
I quit Starbucks long ago… just don’t see a compelling reason to go back either.. they are mid..
They are learning that there is in fact a ceiling to what people will pay for…coffee. Stop using the word “value”, for the prices they charge it simply does not compute.
CNBC should add subtitle to all their videos, something like "All data is of May 1, 2024" to avoid confusion in the viewers' minds everytime they show some data.
Does Starbucks serve more milk than coffee? I rarely see a customer ordering only coffee. Mostly, I observe customers ordering milk-based concoctions full of syrup with a splash of espresso. Usually 16oz or larger with at least 250 calories. None of which I consider coffee.
This guy is dancing around every question.. refuse to address his damn mistakes and foolish political ties
I don't own Starbucks stock but if I did, not only would I sell...but I would short!
Stop allowing stores to ask for tips on a 7 dollar coffee.
Exactly. It’s an insult when you pay over $7 and on top they almost force you to tip…
I agree. The high prices compounded by “tipping guilt” these days is making me reluctant to buy anything other than groceries.
Strangely enough you won’t find drip pre made in Japan. It’s all ground in front of you.
Value?? You're selling 99% water and 1% coffee! Yes, that is what drip coffee is people.
After listening to this I value the stock at $30
Cat slapping the naughty cat meme on Instagram- lol Jim is the one doing the scolding
This is classic! Cramer being tough on poor Starbucks CEO who’s unable to communicate the “Value” in 8 dollar coffee 😂 memeworthy!!
He is not kidding in Japan. Starbucks in Japan is one of the cheaper options for food and coffee. I can get a sandwich and a specialty matcha latte there for under $8.
The same thing in the US would be $16 with probably lower quality ingredients lmao
Prices are way too high at Starbucks. I definitely cut down on visits for that reason. Charging so much extra for another type of milk or another shot is also outrageous.
I remember 2-3 month ago I got a frappe at Target came around $5 plus cents then the other day I went for a frappe at Starbuck is now over $6 plus cents more than a gallon of milk
The last time I walked into a starbucks I was in a slight rush, I had about 8 minutes for a latte which seemed like lots of time. There were zero people in line and they couldn't give me my over priced drink in that time so I got a refund. They are all about pre-ordering on the stupid app and serving the drive thru, which alienates people who just want to walk in and get a over priced coffee without ordering food through their phone.
I like Starbucks but what Jim asked was spot on. The CEO was still planning failure.
Value, value, value! Dude, when your drinks are overpriced, there’s no freaking value! You just don’t get it!
They have WiFi and seating though! That’s was cool a decade ago but it’s not enough these days.
Well that wasn't inspiring.
Tough questions for a change. You should try it more often.
Thank you Jim and the crew for grilling the CEO to help us the tiny shareholder. Sick of these C Suite that never provide any substance and meaning in their conversation, bunch of BS and time wasting.
No starbucks no fast food beautiful life feel freedom
Prices are too high and he blaming weather lol
I’m always impressed with people who can stay calm and focused during these high-pressure grillings. I’m still working on this in my own career.
Used to do Starbucks daily long time ago. With the prices rising, we have completely dropped visiting Starbucks.
My wife use to go there daily as well. In fact, that’s where I met her! She doesn’t go anymore because the drinks are loaded with sugar and she’s learned how that impacts her diabetes and she also doesn’t tolerate caffeine anymore and they don’t cat or to decaffeinated drinks at all. They need to make these change to stay relevant. Reduce sugar (keto trend) and offer decaf across the menu.
Stores in Honduras and Ecuador, seriously?
lol agreed
Luckin will probably follow them around and kick their tail all over the globe.
This is the Cramer we want
Best interview by Cramer this year by far, really great questions.
During Recessions, premium coffee retailers suffer.. are we in one?
$3 for a tall ice tea (ice, water and maybe 2 tea leaves) is a great value?
The problem with Starbucks coffee isn’t that it’s too expensive, it’s that it sucks
Nah its good quality coffee, just way too expensive
at least he has action plans lmao...what value do CEOs actually provide?
Dilute shareholders
They go on live television and get grilled by Cramer
Entertainment.
You can tell this guy doesn’t listen to anyone on his team. “Action plan”
he said "occasional" 107 times😂
and "value" 108 times.
The other day I went to Starbucks I was surprised that a frappe was now $6 and something cents when months ago it was around $5
Buying one pack of organic milk can be used more than a week rather than having Starbucks one cup of coffee.. I hope this drop will make them realize their mistake of price hike..
He reminds me of famed businessman Michael Scott laying out his plan at the Dunder Mifflin shareholders meeting
SBUX needs a new CEO. All Starbucks coffee shops are closing at 7 pm now, "trying to cut costs". Yes you will lose traffic and revenue.
the "occasional visitor" needs to rely on you being available when they need it. with all stores closing early, youre no longer forming a habit of being able to go there when needed. So you find an alternative and that becomes your new habit.
If you’re gonna charge this much for a cup of coffee, have atleast a decent and clean washrooms in your stores. Who wants to go to a pin locked dirty washroom?
Cramer’s questions were very on point but that CEOs answers were terrible. There are many reasons only for this interview this CEO to be fired. Looks like the dude has no clue what’s next and no answers.
Good news boss. I will continue to enjoy the awesome coffee flavor while walking past your stores. But won’t wast my precious money on drinking your coffee
Hmmm skyrocketing cost of living, less visits? What could go wrong?
Good questions Jim
Oh thank god, there are going to be “bundles” on the app. I haven’t laughed this hard in months. If I didn’t know this was real I would swear it was an SNL skit 🤣🤣🤣
Keeps talking about how they bring great value, yet dodges the question on why consumers are not going to starbucks as much and decreasing spending.
I may not be the ceo of starbucks, but let me take a wild guess. Maybe its because the overpriced coffee/drinks that you guys are selling and keeps increasing the price, and the "please leave a tip" when you're at the drive through or the cash register?
Yea, the tipping thing is really starting to bug me to the point I avoid buying food and drinks out.
This CEO does not know the reality. A cup of coffee is a cup of coffee. we know how much it costs，we do not need you to communicate the “value” of the coffee. It is nonsense！He is clueless！This guy got to go away！
Oleato Golden Foam™ Iced Shaken Espresso with Toffeenut. Cost $8.11! Crazy!