What We Learned This Week

Starbucks Investing in People: Starbucks provided another update on its turnaround efforts last week with the release of quarterly earnings. The numbers themselves weren’t great - same-store sales declined again year over year, and it’s clear the company is still working through some deep-rooted challenges. That said, the tone from management was more optimistic than in past calls, pointing to sequential improvements in U.S. traffic and early signs of stabilization. Encouraging, but not yet enough to show real momentum in the numbers.

One of the more interesting takeaways came from CEO Brian Niccol, who compared their progress favorably to the early days of Chipotle’s turnaround. Beyond the expected focus on technology and operational efficiency, a big part of Starbucks’ strategy is actually centered on improving the in-store human experience, something they believe they’ve ceded to independent coffee shops in recent years. Their new “Green Apron” initiative focuses on better training, hospitality, and reconnecting with customers. Backing that up, the company is planning to invest an additional $500 million in labor hours over the next year to support friendlier cafes and a return to the brand’s roots. It’s a bold approach (especially as most quick-service peers double down on automation) but one that acknowledges the fundamentally different role a coffee shop plays in people’s daily lives. There’s still a long road ahead, but the priorities seem well placed.

Big Week for ESPN: It was a formative week for ESPN, as Disney unveiled two major media deals and officially set the launch date for its long-awaited ESPN streaming app. Early in the week, Disney announced a deal with the NFL that grants the league a 10% equity stake in ESPN. In return, Disney will acquire the NFL Network and select programming rights, including NFL RedZone and NFL Fantasy, a major content win for ESPN heading into football season. Though terms weren’t disclosed, analysts estimate the value of the deal between $2-3 billion, placing ESPN’s implied valuation in the hundreds of billions.

That wasn’t all. Disney also struck a five-year deal with WWE for exclusive streaming rights to its premium live events, including WrestleMania and Royal Rumble, previously held by NBC’s Peacock. The agreement brings additional reach and engagement, tapping into a surprisingly broad and loyal fan base. Capping it all off, Disney announced the ESPN streaming app will officially launch on August 21. For $29.99/month, subscribers will finally get full access to all ESPN programming in one place, a long-awaited move that marks a major strategic shift after nearly a decade of hesitation. This is a pivotal next step for ESPN and a critical test for Disney’s broader streaming ambitions.

Facebook and Google Winning Digital Ads: There’s a clear divide forming in the digital ad space. Meta, Google, and Reddit all reported strong ad growth last week, pointing to a healthy spending environment and rewarding shareholders with solid stock gains. But Snap told a different story. The company missed on revenue expectations, with weak average revenue per user numbers sending the stock down nearly 20%.

Snap’s struggles aren’t new - inconsistent ROI for advertisers and stalled user growth continue to weigh on the business. While some of this is execution-related, it also reflects a broader shift: in today’s environment, the digital ad dollars are consolidating around proven, high-ROI platforms like Meta, Google, and Amazon. When uncertainty rises, advertisers stick with what’s working. Right now, the gap between the winners and everyone else is only getting wider.