Please, this is Squawk Pod and I'm CNBC producer Cameron Costa. On today's episode, from burritos to baristas, Starbucks's new CEO Brian Niccol was poached from Chipotle, and now that he's leading the iconic coffee brand, he sat for an exclusive interview with our own Andrew Ross Sorkin, and he shared his big plans for a Starbucks turnaround.
We just made the announcement about not charging for alt milk, so that we're going to make our pricing architecture more transparent, easier for people to understand. Oat milk upcharge, no more. Our team has other ideas too. It's obvious to me: taco-flavored coffee. Big buyer of that taco, maybe a burrito flavor.
And you've seen it on your counter, in your closet, or on your social media feed. It's SharkNinja CEO Mark Barrocas talking about his many, many products, like a new slushy maker.
That product has only launched six weeks ago and it has 200 million impressions already on social media.
Those conversations, plus Elon Musk is in hot water over his million-dollar giveaway, and our parent company Comcast has some big news this quarter. It's Thursday, October 31st. Happy Halloween! Squawk Pod begins right now.
Please, good morning. Morning everybody, and welcome to Squawk Box right here on CNBC. We are live from the Nasdaq MarketSite in Times Square. I'm Becky Quick, along with Joe Kernen and Andrew Ross Sorkin. And Starbucks's new CEO Brian Niccol announcing fundamental changes to its strategy. The company reported quarterly results after the bell. It missed expectations on same-store sales in the US and China, something we knew was in the offing. I spoke with Niccol yesterday in an exclusive and wide-ranging interview, and his first TV interview since taking the helm of the iconic American company.
The thing that I get most excited about is, I think if we get our business back to being about first and foremost the coffee, the craft, that moment where the barista hands somebody their beverage, I think people just re-fall in love with the brand. And you know, it's an iconic brand, it's an enduring brand, and I think all those things got validated for me in the last eight weeks.
Yesterday, on his earnings call, he outlined his plan to bring down the time for customers to get their drink to four minutes or less. We're going to show you his comments on how he plans to make that actually happen, as well as changes to the pricing structure and so much more. And we've batted around a lot of ideas ourselves, I think, over the years about how to improve the Starbucks situation, but he's got a ton of them.
It's obvious to me: taco-flavored coffee. The first thing. Big buyer of that taco, maybe a burrito flavor of some kind.
I think the biggest is fewer flavors, getting a delivery, less money, simpler, less money. Although somebody said they get like 30% of their sales now from those crazier drinks, the new flavors.
Well, that's one of the things we talk about later, and you'll see is, look, the highest-margin drinks are the most complicated drinks. But if you believe that that's really a gating factor to just throughput, and the reason why there are lines, and the reason why the average get turned off, you may not want that. The other thing that they're doing is, you know, things like alt milk, right? Now they upcharge you for that kind of stuff.
Yeah, but they're going to put it back out front. That's going to be free now.
Yeah, they're going to have it and they're going to make it actually out front where you're going to do it yourself. That's something that customers have wanted for a very, very long time. So I think you'll see a lot of the moves, and you'll see a lot of them actually, I think that kind of stuff you're going to see quickly. I think it's probably all the right move, but it could be painful if you're going to lose some of these other things along the way.
Milk, it's not milk. You don't got milk if it's almond milk. If it's not, you see others on almonds. If you see those, don't eat them.
The next thing we'd like to do is announce today's winner of the million-dollar prize. The judge has ordered Elon Musk to attend an emergency court hearing in Philadelphia this morning to address a bid by the city's top prosecutor to stop Musk's $1 million voter sweepstakes. The lawsuit accuses Musk and his America PAC of operating an illegal lottery and trying to influence voters in the presidential election. Attorneys for the Philadelphia district attorney asked the judge to order enhanced security for the hearing after the DA was targeted by some anti-Semitic attacks on social media. One account on X posted the DA's home address and wrote that he loves visitors. Mask up and leave all cell phones at home.
The Nasdaq is the fly in the ointment, the wrench in the works, whatever it is, but that's what's happening. I mean, these companies, the stocks have done so well, but there are a couple that are down today. Meta and Microsoft both sharply lower. eBay is on that laggard list. Earnings of $1.19 a share beat estimates by a penny. Revenue also was above, but current-quarter guidance fell short of what analysts were expecting. The company CEO said the guidance was due to a number of one-time factors, including hurricanes at the beginning of the quarter and shoppers being distracted in the run-up to the presidential election in November. He also warned that there are five fewer days now between Thanksgiving and Christmas this year compared to last year.
You better start shopping.
It's late. Oh, this year, now I see. So there's this, there's crunch time. You think you can wait till Thanksgiving, but you're going to have a lot less time. I mean, there's still 365 days.
Yes, but Thanksgiving alternates on where it falls.
We'll get them back then. That's my point. You get the days back.
Well, we're not really losing that. It's just, you know what I'm saying.
I was worried for a second. I mean, if that starts happening, that's all I need. Getting older and shorter years would be horrible.
We got some breaking news about our parent company this morning. On the earnings call, telling investors that they are considering spinning off the cable channels that are owned by Comcast, perhaps including CNBC and some of the others as well.
We are now exploring whether creating a new, well-capitalized company owned by our shareholders and comprised of our strong portfolio of cable networks would position them to take advantage of opportunities in the changing media landscape and create value for our shareholders. We are not ready to talk about any specifics yet, but we'll be back to you as and when we reach firm conclusions.
They're also looking for potentially a partner for Peacock. The stock moving on the back of both the earnings this morning, but I think even more so after making those comments on the call. The stock up now about 8% on the back of that news.
It would be the shareholders. It'd be interesting to see whether the Roberts family, which of course has a controlling stake in Comcast, in those shares of a spun-off company, would also want to control those.
I think they're thinking about the entertainment networks, USA Network, Syfy, or not include, not news. I think at this point it's all on the table. But I think a lot of people looking now at what that would ultimately mean. What does it mean for growth of that business if you spun it off without too much debt? What does that business look like versus the cable business? The cable business still kicks off a lot of cash, etc. So a lot to chew on this morning. A little bit of Homer news, if you will.
Tees will be next. Still to come on Squawk Pod, more of that big interview with Starbucks CEO Brian Niccol. He's about eight weeks into the job, but he's clear about the work ahead. He's got a plan for a turnaround.
What I'm really excited about with Starbucks is, I think most of the issues we're dealing with are very fixable and are in our control.
What he's thinking and why it might end up with cheaper coffee for you. Welcome back to Squawk Pod. Starbucks's new CEO Brian Niccol made his case to investors and to Wall Street yesterday.
I would like to welcome everyone to Starbucks's fourth quarter and full fiscal year 2024 conference call.
Almost eight full weeks into a job that he was directly recruited to by the Starbucks board, Niccol's goal is to get Starbucks back on track following three straight quarters of sales declines.
With that, I now have the privilege of turning it over to Brian.
Thank you, Tiffany, and good afternoon, and thank you for joining today.
His first steps are focused on the customer experience in Starbucks stores.
We want to hand-deliver a high-quality, handcrafted beverage to our cafe customers in four minutes or less and deliver orders on time for our mobile order and pay customers every time. We have work to do to achieve this consistently.
I'll toss it back to Andrew now with the rest of the highlights from his big exclusive interview with Brian Niccol, the CEO's first TV interview since swapping Chipotle bowls for Starbucks cups. I asked him about the relationship with baristas and the efforts to unionize some of these stores.
What I've shared with all of our partners, and specifically the folks that work in our stores where the green apron is, I want to create the best barista experience, in-store experience, for our employees. You know, we just announced we're going to be focusing on promoting from within at a rate of about 90%, so that their career grows with the company as well. And I also think that when we give the partner experience a terrific everyday experience, that results in a great customer experience. And you know, that's what I want to have happen is I want our partners to thrive and I want the business to thrive.
