🧊 Starbucks' cold-brewed quarter

Meet the old crew for a Cold Brew... People are meeting for coffee again, lines are back at Starbucks, and Linda still can't decide if she wants the egg white bite or the cake pop. Starbucks had its best third quarter revenue ever, whipping up $7.5B in sales — up a frothy 78% from last year. And same-store sales jumped 10% from even pre-pandemic levels.

• To-go is a lifestyle: Nearly half of all transactions came from drive-thru, and over a quarter came from mobile orders for pickup and delivery.
• Go oat or go home: Alt-milks accounted for 25% of total milk-related bev sales, thanks to drinks like Iced Brown Sugar Oatmilk Shaken Espresso.

Too cold to handle... One theme stood out to us from Starbs' earnings: iced drinks are hot commodities. Cold drinks accounted for nearly three-quarters of total sales, up 10% from two years ago. Now, Starbucks is doubling down on the chill factor, since cold concoctions tend to be more profitable than plain old cups of Joe:

• Cold science: Starbs has a lab where it develops tech like “Tapitha" (cute), the system that cranks out its Nitro Cold Brews.
• Cold menus: In May, Starbs launched the “As Summer As Possible” (ASAP) menu, featuring premium cold drinks like the $5.25 Strawberry Funnel Cake Frappuccino.

Seeing the chip bowl half empty… Tesla reported record profit and deliveries for last quarter. Apple posted its best third quarter in its entire 45-year history. Despite these killer earnings, investors weren’t impressed: Tesla shares have fallen 3% since earnings, and Apple has dipped 1.5%. Why investors are feeling salty:

• Apple and Tesla are the latest victims of the global chip shortage, which has been affecting the supply of everything from smartphones to washing machines and cars.
• Apple warned that supply shortages will affect iPhone production this quarter, slowing overall sales growth. Technoking Elon raised concerns that Cybertruck production could be dinged by the chip shortage.

Chip-outta-luck... The WFH life ate up all the chips, which are crucial ingredients in everything from Chromebooks, to PlayStations, and cloud servers. When the economy rebounded faster than expected, the chip shortage got shorter — Ford and GM even had to shut down car-making plants. But for chip-makers, it’s more of a “bowl half-full” situation:

• Intel reported expectation-beating earnings thanks to growing sales of PC chips, and raised its forecast for the year. Its CEO warned the shortage could last till 2023.
• AMD, another chip giant, saw its quarterly profit more than quadruple compared to last year, and it also boosted its full-year forecast.

• Slowdown: Facebook's sales jumped 56% last quarter from a year ago, the fastest quarterly growth in five years — but Zuck warned of a big slowdown ahead.
• Jabs: Pfizer expects $33.5 billion in Covid vax sales this year, up 30% from its previous forecast. Last quarter, the vax made up nearly $8B of its $19B total sales.
• VaxOn: Google and Facebook will require vaccinations for all employees returning to US offices. Meanwhile, Uncle Sam will require vax shots or frequent tests for federal employees.
• Moody: Spotify shares fell 6% after the streamer reported weak monthly user growth, despite expectation-beating earnings and strong ad growth.
• Checkout: Shopify topped $1B in quarterly sales for the first time as the ecomm boom keeps booming. Small businesses that moved online mid-pandemic are staying virtual.

• Weekly jobless claims
• Earnings expected from Amazon, Mastercard, Comcast, T-Mobile, Bud-owner AB Inbev, Twilio, Shell, PG&E, and Zendesk

Authors of this Snacks own shares of: Starbucks and Tesla

ID: 1741090