Transcript:
Conways Gittens: I’m Conway Gittens reporting from the New York Stock Exchange. Here’s what we’re watching on TheStreet today.
Wall Street is taking comfort in the latest inflation reading. July producer prices rose just 0.1 percent, which was less than expected. Over the past 12 months, wholesale inflation is up 2.2 percent. Meanwhile, Home Depot topped second-quarter sales and profit forecasts. However, the number of transactions per customer fell for the 13th straight quarter and the company is forecasting weaker sales for the rest of 2024.
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In other news – there’s a big shake-up at the top of Starbucks. CEO Laxman Narasimhan is out effective immediately and Brian Niccol, the head of Chipotle, is in.
The Board issued a statement saying: “Brian is a culture carrier who brings a wealth of experience and a proven track record of driving innovation and growth. Our board believes he will be a transformative leader for our company, our people, and everyone we serve around the world.”
Niccol has his work cut out for him. Starbucks is in a slump with customers complaining about high prices and long wait times. It has also struggled to switch to a post-pandemic world that favors mobile take-out and quick drive thru over sitting down and lounging around in a coffee shop. He’s also inheriting a stock that’s lost one-fifth of its value over the past five years and a struggle with activist investor Elliott Investment Management.
There’s also growing tension between the company and its workers. Employees have been fighting to unionize. Former CEO and major investor Howard Schultz weighed in on the subject in May on LinkedIn, saying Starbucks had lost its way and needed to patch things up with workers.
Niccol comes to Starbucks after a star run at Chipotle; under his tenure of more than five years, sales grew roughly 800 percent.
That’ll do it for your Daily Briefing. From the New York Stock Exchange, I’m Conway Gittens with TheStreet.
Related: Starbucks makes major announcement about new fall flavor releases
