With record sales numbers, Starbucks reported a good 3rd Quarter, beating expected revenues and earnings, primarily on the strength of US and North American sales. US same-store-sales were up plus 9 percent, with average ticket up plus 8 percent and transactions up 1 percent. Interim CEO Howard Schultz announced increased Rewards memberships (now 27.4 million members) and also reported that food attachment rates had also grown in all three dayparts. On the flip side, the North American operating margin was down 220 basis points from 2021, due to commodity cost inflation along with significant labor and wage investments. John Gordon, DDIFO’s restaurant analyst, noted that FY23 earnings will be depressed until the new wage, staffing, and other CAPEX investments are offset by improved sales, something Starbucks executives expect. With the company still opening new stores during a full-fledged transformation period, morning sales are slowly recovering – even in urban core locations and with cold beverage sales mix now at 75%, there is no evidence of any trade-down by some guests. They discussed the high-level notions of new equipment and store designs while touting its Gen Z guest affinity for handcrafted cold drinks. There were no questions about the ongoing unionization efforts, now with some 200 stores unionized.