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- Starbucks Makes BIG Move
Good Morning!
Happy Tuesday! Let’s see what is moving markets:
👉Starbucks makes a big move
👉Home Depot earnings
👉Macy’s announces closures
STARBUCKS: New CEO
Starbucks announced that CEO Laxman Narasimhan is stepping down and will be replaced by Chipotle's CEO, Brian Niccol. Starbucks shares jumped big time in premarket trading, while Chipotle's dropped.
Source: CNBC
Narasimhan, who took over in March 2023, faced challenges with weak sales in the U.S. and China, leading to a 21% drop in Starbucks shares during his tenure. Former CEO Howard Schultz and activist investor Elliott Management recently weighed in on the company’s struggles. Niccol has been credited with turning Chipotle around since 2018 and will officially take over Starbucks on Sept. 9. Chipotle's COO Scott Boatwright will be the interim CEO.
🎯GRIT TAKE: This Starbucks leadership change is… upgrade to VIP now to read the full GRIT Take!
EARNINGS: Home Depot
Home Depot exceeded quarterly expectations but warned of weaker sales in the latter half of the year due to high interest rates and consumer uncertainty. The company expects full-year comparable sales to drop 3% to 4%, a sharper decline than the previously forecasted 1%.
Source: CNN
Despite the boost from its recent acquisition of SRS Distribution, which adds $6.4 billion in sales, Home Depot faces challenges from a "deferral mindset" among consumers, delaying home purchases and renovations. Net income for the fiscal second quarter dipped slightly, with comparable sales dropping 3.3%, marking the seventh consecutive quarter of declines.
CLOSURES: Macy’s
Macy’s is closing nearly a third of its stores, impacting malls and communities across the U.S. The retailer plans to shut down about 150 locations by early 2027, though specific stores haven't been announced.
Source: NBC
These closures represent 25% of Macy's total square footage but only 10% of its sales. Macy’s will focus on its remaining 350 stores and expand its Bloomingdale’s and Bluemercury brands. This move will push malls to adapt to shifting consumer trends. Some malls might decline, while others will seize the opportunity to revitalize and repurpose the space for new developments that better align with local needs.
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