Name: Starbucks’ Big Sales Beat Stokes Confidence in Turnaround
Uploaded: 2026-01-28T21:41:47+00:00
Duration: 312 s

Speakers

Michael Halen — Senior Restaurant Analyst, Bloomberg Intelligence

Paul Sweeney — Anchor, Bloomberg

Summary

Bloomberg Intelligence's Michael Halen discussed Starbucks' stronger-than-expected sales and turnaround progress, including improving operations, food innovation, and cost savings. He also highlighted Brinker International's Chili's turnaround, with strong same-store sales and menu improvements. Halen said coffee competition remains intense but sees broad strength across the restaurant industry, supported by tax relief, cheaper gas, a better economy, and less inflation.

Starbucks reported 4% systemwide same-store sales growth, with US improvement and China up 7%.
Michael Halen attributed Starbucks' progress to better operations, food innovation, and marketing, while noting margin pressure from added labor.
Starbucks has identified $2 billion in annual cost savings over one to two years.
Brinker International raised its full-year profit outlook; Chili's posted strong same-store sales on menu and food-quality improvements.
Coffee competition is intense from younger chains like Dutch Bros and Seven Brew and high-end coffee shops.
Halen expects restaurant spending to rise this year, helped by tax relief, cheaper gas, a better economy, and less inflation.

Ideas

Michael Halen Senior Restaurant Analyst, Bloomberg Intelligence 0:00

Starbucks turnaround gains traction; comps improve

Starbucks' turnaround is taking hold. Systemwide same-store sales rose 4%, with US improvement and China up 7%. Better operations from new standards rolled out late last year are speeding service, creating happier customers who return more frequently, while food innovation like protein cold foam and better marketing are helping. Management has identified $2 billion in annual cost savings over one to two years, though margins remain compressed because adding labor to stores was costly. CEO Brian Niccol says operations are not yet where they need to be throughout the day, but the foundation is improving.

Michael Halen Senior Restaurant Analyst, Bloomberg Intelligence 3:18

Brinker's Chili's turnaround drives strong comps

Brinker International boosted its full-year profit outlook and is executing a turnaround similar to Starbucks under CEO Kevin Hochman, who worked at Yum Brands with Brian Niccol. It simplified the menu to improve execution, then focused on better food quality and portions: nacho sales jumped 170% on relaunch, bacon burger sales rose 30-40%, and queso relaunch sales rose 20%. The added spending pressures cost of sales, but customer satisfaction and repeat visits are improving, and Chili's posted an 8%-plus same-store sales comp against a 30%-plus prior-year comp.

Michael Halen Senior Restaurant Analyst, Bloomberg Intelligence 4:52

Restaurant spending to rise this year

He sees life throughout the restaurant industry and expects same-store sales to increase. January was strong until winter storm Ferne, and he thinks tax relief, cheaper gas prices, a better economy, and less inflation will all support restaurant spending this year.

Starbucks’ Big Sales Beat Stokes Confidence in Turnaround

Summary

Ideas

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