Bloomberg Intelligence Podcast – Episode Summary

Episode Title: Starbucks Sales Accelerate as Turnaround Gains Steam
Date: January 28, 2026
Hosts: Scarlett Fu, Paul Sweeney
Key Guests: Brian Nowak (Bloomberg Intelligence Analyst), John Butler (Senior Telecom Analyst), Caroline Hyde (Bloomberg Tech Co-anchor), Andrea Felstead (Bloomberg Opinion Columnist)
Main Theme:
This episode unpacks the latest financial results and strategies among top companies—Starbucks’ accelerating turnaround, competitive dynamics in the restaurant sector, telecom shifts amid tech rotations, developments in AI and chipmaking, and trends in luxury goods, notably LVMH’s earnings and market sentiment.

Starbucks: Turnaround Takes Hold (00:40–04:56)

Key Insights:

• Improved Sales and Operations:
  • Starbucks’ same store sales rose 4% in the US; China saw a 7% increase.
  • "...The turnaround plans are starting to really take a hold right now. And results really improved, rising 4% system wide. Same store sales US as well. China was up 7%." — Brian Nowak (00:49)
  • New operating standards led to faster service and higher customer satisfaction.
  • Food innovation (including protein cold foam) and improved marketing drove customer return rates.
  • Notable Moment:
    Scarlett Fu described her own improved customer service experience, emphasizing a more personal touch at her local Starbucks. (01:37)
• Cost Management and Margins:
  • Focus on reducing $2 billion in annual costs over the next 1–2 years.
  • Margin compression observed due to additional labor costs, reallocated to support in-store experience.
  • CEO Brian Nichols sees more room for improvement, especially outside peak hours.
  • "They got those same store sales and traffic numbers up by adding labor to the stores...seeing margin compression still." — Brian Nowak (02:01)
• Competitive Landscape:
  • Competitors like Dutch Bros and Seven Brew are attracting Gen Z with drive-thrus.
  • Urban competition features premium coffee shops with elevated food experiences.
  • Starbucks is investing in health/wellness, updated food offerings, and new drinks to target afternoons.
  • "Competition is tough and that's why Starbucks is, is making some changes...This is just the beginning of what Starbucks...thinks they need to do for long term." — Brian Nowak (02:57)

Restaurant Sector Spotlight: Brinker International & Cracker Barrel (04:01–06:03)

Brinker International (Chili’s):

• Led by CEO Kevin Hockman, executed a turnaround mirroring strategies from Yum! Brands.
• Focus initially on simplifying operations—reducing menu complexity—then shifted to improving food quality and portions.
• Relaunches (e.g., nachos, bacon burgers) resulted in huge sales lifts (e.g., nachos up 170%).
• Margins impacted by increased cost of sales, but higher customer satisfaction and loyalty.
• "They did...eight plus percent same store sales comp at Chili's...over a 30 plus percent. I've never seen this in the restaurant business." — Brian Nowak (05:11)

Cracker Barrel:

• Share price up 18% year-to-date; optimism returns across the restaurant industry.
• Factors supporting restaurant growth: tax relief, lower gas prices, improving economy, and moderating inflation.

Telecom Trends: AT&T Earnings and Industry Competition (07:21–13:26)

AT&T Performance and Strategy:

• Revenue beat estimates due to broadband strength.
• AT&T is positioned as the fiber leader in the US, set to acquire Lumen’s fiber business, adding one million subscribers (07:54).
• Investing $20–22 billion annually in capex, primarily to expand fiber and upgrade 5G networks.
• Plan to cut capex in coming years, focusing on increasing free cash flow and funding dividend growth/share buybacks.
  • "A lot of capital is getting spent this year...to build out that fiber network and that 5G wireless network." — John Butler (08:57)

Market Rotation and Yield:

• AT&T and Verizon viewed as “bond proxies” due to high yields (AT&T 4.6%, Verizon nearly 7%).
• Concerns about increased wireless competition as new CEOs at Verizon and T-Mobile look to make changes.

Competitive Dynamics:

• Cable companies struggling due to legacy coaxial infrastructure, with further growth hampered compared to telecom fiber.
• Fixed wireless gaining popularity due to ease of installation and reliability, but not matching fiber on performance.
• "Fiber really is a superior product to everything else on the market." — John Butler (11:17)

iPhone Adoption:

• AT&T has more iPhone users than competition, but the expected foldable iPhone may not significantly boost sales despite excitement.
• "I actually think foldables are going to resonate well with people...but we'll have to see in the fall." — John Butler (12:24)

Tech & AI Sector: ASML, Amazon, SoftBank, and AI Investment (14:43–18:37)

ASML Results:

• Delivered strong earnings and record €13.2 billion in orders, yet announced 1,700 job cuts aimed at efficiency and agility.
• "This is AI. This is efficiency. This is agility, as the CEO calls it..." — Caroline Hyde (15:09)
• Most sales to China (for legacy equipment), with growth in Taiwan and the US due to global chip manufacturing investments.

Amazon Job Cuts:

• Announced a further 16,000 corporate job reductions, 30,000 over three months, citing a move toward greater efficiency, especially in AI.
• Focus on AI and automation as growth engines; rebuilding workforce in key tech areas despite overall reduction.
• "Andy Jassy...said I am going to make AI work for me, but...I'm going to have a smaller employee base." — Caroline Hyde (16:38)

SoftBank & OpenAI:

• SoftBank reportedly preparing a $30 billion investment in OpenAI, potentially making it its primary holding.
• Move signals SoftBank’s strategy to double down on AI after missing early generative AI opportunities.
• "Masa is really committing to OpenAI in particular...he's a guy who makes big bets. Sometimes they work really well, like Alibaba. Sometimes...less well like WeWork." — Caroline Hyde (17:46)

Luxury Sector: LVMH Earnings and Consumer Behavior (18:57–24:37)

LVMH Results:

• Disappointing earnings driven by weak drinks division and lackluster holiday period, but not a catastrophe.
• Investors had become overly optimistic about luxury, leading to increased market sensitivity to even small misses.
  • "These weren’t really there was nothing really terrible about these results apart from the drinks division..." — Andrea Felstead (19:17)

Segment Performance:

• Jewelry is the standout performer, benefiting from steep price inflation in handbags and a consumer shift toward branded jewelry.
  • "Jewelry is absolutely sparkling. There's a few reasons for that...actually jewelry...is seen as better value for money than a handbag." — Andrea Felstead (21:27)
• Handbags have become so expensive that jewelry is now viewed as a comparative value.
• Trend toward branded jewelry (e.g., Cartier, Tiffany) over unbranded.

China & Japan:

• Chinese luxury demand stabilized but remains muted.
• Shoppers oscillate between domestic purchases and traveling to Japan (driven by currency movements).
• Sales in Japan are less profitable for LVMH compared to China.

American Consumers:

• US luxury demand closely tracks stock market and bitcoin performance.
• "US luxury demand tends to be very correlated with stock markets and also bitcoin...we’re testing new highs on markets, that is very good for luxury demand." — Andrea Felstead (23:47)
• Middle class consumers, priced out by past increases, have yet to return; luxury relies on top-tier consumers for continued resilience.

Notable Quotes

• Brian Nowak:
  "The turnaround plans are starting to really take a hold right now." (00:49)
  "They got those same store sales and traffic numbers up by adding labor to the stores...but costly." (02:01)

• John Butler:
  "Fiber really is a superior product to everything else on the market." (11:17)
  "I actually think foldables are going to resonate well with people..." (12:24)

• Caroline Hyde:
  "This is AI. This is efficiency. This is agility, as the CEO calls it..." (15:09)
  "Andy Jassy...said I am going to make AI work for me, but...I'm going to have a smaller employee base." (16:38)

• Andrea Felstead:
  "Jewelry is absolutely sparkling...actually jewelry...is seen as better value for money than a handbag." (21:27)
  "US luxury demand tends to be very correlated with stock markets and also bitcoin..." (23:47)

Timestamps for Key Segments

• Starbucks Turnaround Analysis: 00:40–04:56
• Brinker International/Cracker Barrel: 04:01–06:03
• Telecom Earnings & Strategy (AT&T, Verizon, T-Mobile): 07:21–13:26
• Tech & AI (ASML, Amazon, SoftBank): 14:43–18:37
• Luxury Goods & LVMH Earnings: 18:57–24:37

Overall Tone

The episode maintains Bloomberg’s upbeat, insightful, and conversational tone, blending analyst expertise with anecdotes and direct quotes for accessible yet substantive market intelligence.