Expect significant new tariffs on Chinese imports and moderate levies on goods from other nations , as President-elect Donald Trump rolls out his protectionist agenda. However, with his preference for chaotic policymaking and sudden shifts , there’s uncertainty on how soon these import taxes will actually hit. Dubbed “ Tariff Man ,” Trump aims to use tariffs both strategically and tactically . He’s mentioned taxing all Chinese goods up to 60% and potentially setting 10%-20% tariffs on imports globally , but details on these plans remain vague . Key players within Trump’s team are divided: Robert Lighthizer , a staunch tariff advocate, sees permanent duties as crucial to balance US trade , while others, like billionaires John Paulson and Scott Bessent , view tariffs as temporary leverage. Trump’s previous administration had mixed feelings, especially on national security-related trade limits , which he sometimes dismissed, favoring an “open for business” approach. High-profile busin
Starbucks' operational improvements helped the coffee giant meet Wall Street expectations for quarterly profit, even as global sales declined due to persistent weakness in consumer spending in its key markets, the US and China.
Key Highlights:
- Quarterly Profit: Profit of 93 cents per share met LSEG estimates.
- Operational Efficiency: Starbucks rolled out the Siren System plan, updating equipment to increase service pace, deployed across US-operated stores. The company aims to have the system in less than 10% of global stores by year-end.
- Operating Margin: Fell by 70 basis points in the third quarter, a sequentially smaller drop.
- New Store Openings: Opened 526 new stores in the quarter.
Market Reaction:
- Starbucks' shares, down 22% this year, rose 5% in extended trading after executives reaffirmed annual forecasts.
Consumer Strategies:
- In response to cost-conscious consumers, Starbucks introduced discounts and promotions, including a coffee or tea paired with a butter croissant for US$5 in June and 50% off deals on Fridays in May.
Challenges in Key Markets:
- China: Same-store sales tumbled 14%, following an 11% drop in the second quarter, amid weak consumer spending and competition from local chains like Luckin' Coffee.
- International Sales: Missed expectations, reflecting trends seen by McDonald's and Domino's, with weakness in the Middle East, South Asia, and parts of Europe due to boycotts related to the war in Gaza.
CEO Statement:
- "We are focused on what we can control in a consumer environment that can be best described as complex," said CEO Laxman Narasimhan.
Investor Relations:
- Starbucks confirmed on a post-earnings call that Elliott Investment Management is a shareholder and that discussions with the activist investor have been "constructive."
Outlook:
- Starbucks reaffirmed its global and US comparable sales forecast in the range of a low single-digit decline to flat, with annual profit projected to range from flat to low-single digits.
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