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Three quintessentially American companies — Starbucks, Nike and Boeing — share a common predicament at the moment.
Each has a new CEO at the helm with a mission to clean house and, critically, return the brand to its former glory. None of them have an easy job ahead, as this week made painfully clear.
Here’s the tea: A preliminary earnings report Tuesday revealed yet another quarter of falling sales at Starbucks — its third in a row. The drop was especially steep in the US, where sales fell 10%; and in China, where they were down 14%. Basically, demand hasn’t been this low since the first year of the pandemic.
The numbers were so ugly that Starbucks took the uncommon step of suspending its financial guidance for the rest of the year — a move that should, in theory, give the new boss time to figure out a plan.
Brian Niccol took the reins last month, leaving the top job at Chipotle to become Starbucks’ third CEO in three years. But even for Niccol, the guy known throughout the industry as something of a savior to spiraling companies, this is going to be a Herculean task.
So far, Niccol has said he wants to simplify the menus, improve staffing levels and he may even — please, for the love of God — put the milk and sugar out from behind the counter.
“We need to fundamentally change our strategy so we can get back to growth,” he said. “People love Starbucks, but I’ve heard from some customers that we’ve drifted from our core.”
In short: Bring back the chill community coffee shop vibe from the ’90s. And maybe stop trying to make us drink olive oil.
Just Do It (Again)
Nike is in a similar boat.
Its stock is down some 25% this year, and revenue fell 10% last quarter from a year earlier. Like Starbucks, it’s got a new boss who everyone hopes will swoop in with big ideas to return the brand to its former glory.
Easier said than done, of course. Nike’s problems stem from its own strategic missteps — like not focusing enough on making cool shoes — as well as growing competition from younger upstart brands like Hoka and On.
The new guy, Elliott Hill, is only a couple of weeks in but already secured a 12-season extension of Nike’s partnership with the NBA and WNBA, ensuring the swoosh will stay on pro-basketball’s uniforms and official apparel.
Next on the list of to-dos: Figure out how to make the shoes cool again.
The problem child
And finally, there’s Boeing. Boeing Boeing Boeing….
Things were already a shambles when Kelly Ortberg took over as CEO in August, and somehow they’ve actually deteriorated.
On Wednesday, union workers who’ve been striking for the past six weeks rejected Boeing’s offer to return to work, meaning the work stoppage that’s draining about $1 billion a month from the company will carry on. Oh, and on the same day, Boeing reported a $6 billion third-quarter loss, one of the largest quarterly losses in the company’s history.
All of that’s happening on the heels of a year that started with one of its plane’s door plugs blowing out in mid-air. Which came on the heels of a six-year chapter marked by dual tragedies, damning revelations about the company’s systemic failures and the near-total erosion of Boeing’s reputation for quality and safety.
Like Nike and Starbucks, Boeing is looking to its past self to guide its future. Unfortunately for Ortberg, the rot goes back well over a decade. And Boeing won’t be able to build the time machine it so desperately needs without the 33,000 machinists currently on strike.
