Starbucks Same-Store Sales to Get Boost from Mass Cafe Closures, Analysts Say — Market Talk
Davidson analysts expect that the closing of hundreds of underperforming Starbucks cafes will create a significant boost to same-store sales. They expect the company's 2027 guidance to include a 3% to 4% increase in same store sales, helped in part by the closure of 250 stores late last month. The analysts are still impressed with the management's turnaround efforts, which have likely set up the coffee giant for sustainable growth over multiple years. Starbucks is scheduled to post earnings on Oct. 29.([email protected])1805 ET - Despite masses of consumers avoiding lettuce in mid-July after the Cyclospora outbreak, Chipotle recovered from that lull by reeling people in during back-to-school season, Davidson analysts say in a note. The burrito chain leaned on new menu items and its rewards programs to help, which the analysts say may help Chipotle post same-store sales north of 3% in the 4Q, a level it hasn't achieved in two years. For 3Q, the analysts expect same-store sales to come in at 2%. Chipotle is scheduled to report earnings on Oct. 28. ([email protected])1531 ET - The U.S. arm of Binance is hoping to roll out a prediction markets on its platform in the first half of next year, CEO Steve Gregory says at the NEXTPredict summit in New York. Gregory pegs the likely timeline at six to eight months, based on expectations around how long it will take to clear the regulatory process required to offer prediction markets, he says. The company has reportedly applied for regulatory approval and aims to incorporate prediction markets into its existing cryptocurrency exchange platform. ([email protected])1521 ET - Higher gas prices and other broad pressure continue to weigh on Wingstop's core customer base in 3Q, Davidson analysts say in a note, while projecting that the restaurant chain will post a 4.5% decline in comparable-store sales. Wingstop has amped up promotions that focused below the $10 price point in September, and results could be bolstered as the football season intensifies, the analysts note. Despite six straight quarters of negative comparable-store sales, Wingstop's unit growth remains a bright spot because of healthy franchisee demand. The restaurant chain is scheduled to post earnings on Oct. 28. ([email protected])1502 ET - DraftKings isn't investing in products that appeal to institutional players and algorithmic traders, CEO Jason Robins says at the NEXTPredict summit in New York. The more those kinds of products are introduced, the more likely that it will lead to a worse customer experience for DraftKing's retail users, who are its core focus, Robins says. That said, DraftKings also can't prevent those bigger players from using its platform, he says. ([email protected])1501 ET - DraftKings has a slew of tools that it uses to combat reckless gaming behavior without automatically cutting people off, CEO Jason Robins says at the NEXTPredict summit in New York. The CEO is pushing back on reporting that it encouraged problematic betting rather than working to assuage it. He says leadership preaches responsible gaming to DraftKings staff and that the company has a team that helps high-volume gamblers reduce problematic betting behavior. Encouraging frequent losers to bet less is more effective than cutting them off, which just pushes them to use DraftKing's competitors, Robins says. "If people do things themselves, they're less likely to just go to another platform," he says. ([email protected])1448 ET - DraftKings has been using artificial intelligence to code faster and using machine learning to serve customers with content and products that relevant to them, CEO Jason Robins says at the NEXTPredict summit in New York. The CEO is pushing back on reporting that DraftKings is using AI to target gamblers who are the most likely to lose. "The degree to which AI is used is overblown," according to Robins. "People are generally fearful of it," he says. ([email protected])1358 ET - Tesla's capital expenditures came in below consensus, but StoneX analysts think the company could be deferring spending. Tesla lowered its capital expenditure outlook for the year to $20 billion, from $25 billion. However, the analysts think spending will expand again as the robotaxi fleet, Optimus robots and other AI products scale. Tesla did say its operating expenditure base will keep rising until new products commercialize, the analysts say. They lower their 2026 through 2028 adjusted earnings estimates, citing the higher operating expenditures. ([email protected])1351 ET - Tesla is spending more on operating expenses to fuel its transition from autos to AI, Truist analysts say in a note. The company ramped OpEx, despite lowering capital expenditure guidance for the year. The operating spending is going toward AI projects, including robotaxi, cybercab, Optimus robots and a semiconductor fab. "We continue to believe these investments will pave the way for TSLA's AI transition, but they will weigh on margins and cash flow for a while," the analysts say. They believe near-term earnings are less important than Tesla's broader progress in transitioning toward AI. ([email protected])1345 ET - Binance US, the American arm of the largest cryptocurrency exchange internationally, is being purposeful in not jumping into offering prediction markets for U.S. customers. "We're going to take our time, find out what products customers want to see," says Steve Gregory, CEO of Binance US, during a panel discussion at the NEXTPredict summit held in New York. Even so, Gregory says that the goal of exchanges like Binance is to grow into being an all-in-one-type of exchange, being able to trade numerous kinds of assets. ([email protected])1342 ET - Tesla's commentary about Optimus could have been a disappointment to investors, Oppenheimer analysts say in a note. Initial Optimus production has started, but the company is going through a pronged ramp as the complexity of the supply chain, manufacturing and training will lead to challenges, the analysts say. This timing will likely disappoint bullish investors. Plus, Chief Executive Elon Musk didn't share many more details on a potential merger between Tesla and SpaceX. This leaves questions about valuation and could weigh on the stock, the analysts say. Tesla is down 2%. ([email protected])1332 ET - Mortgage rates fall for the first time in months, potentially offering relief to home-buyers. The decline follows a pullback in the 10-year Treasury yield as investors seek safety in government bonds. However, economists say not to get carried away by the move. "This fall's surge saw rates climb 74 basis points in just over a month, so this week gives back barely a tenth of that, and the 10-year remains about 40 basis points above its late-August level even after backing off its recent highs," analysts at Realtor.com say in a note. The 30-year fixed rate mortgage averaged 7.32% as of October 22, down from last week when it averaged 7.40%, according to Freddie Mac data. ([email protected])