Starbucks CEO Talks Turnaround Plan, Palo Alto-CyberArk $25B deal, Hassett on GDP, Tariffs and the Fed 7/30/25

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Carl Quintanilla (1:02)

Market moving insight and analysis. Join Jim Cramer, David Faber and me, Carl Quintanilla, on the opening bell hour of CNBC Squawk on the Street.

David Faber (1:11)

Good morning, welcome to Squawk on the Street. I'm David Faber. He is Jim Cramer at Post 9 Here we are both, of course, the New York Stock Exchange. Carl is a morning off. Take a look at stock futures. They are up ahead of the Fed's decision later this afternoon, actually, early afternoon. GDP, by the way, returns to 3% growth in the second quarter after it contracted in the first quarter of the year. We got a lot of big guests on tap for you this morning with the CEOs of Palo Alto and CyberArk joining us, talking about their just announced $25 billion cash in stock deal in which Palo Alto was buying CyberArk. And up first, we're going to have the CEO of Starbucks. And Jim, let's just get right to it.

Jim Cramer (1:51)

Yeah, right to it because the stock was down, bad when it was reported. And then the man worked his magic on the comp school, Brian Niccol. Brian, it is so great to have you on the show. And I want to start, I'm a student of yours. And the one thing I know is you never say something's ahead of expectations unless it is. So I'm going to ask you how that happened.

Brian Niccol (2:12)

Yeah, hey, guys, good morning. Yeah, look, we had a really great couple months as we worked hard on the foundational elements of the business, specifically the operating side of it. And you heard us talk about how we're really excited to be rolling out the Green Apron Service Model. And we really picked up momentum in our pilot across our 1500 stores. Right around the time we had our leadership experience where we brought in all 14,000 store managers. And I think as we better explained what the program was going to look like, I got to tell you, our partners really left there energized, believing in the mission and values of Starbucks again. And then also really excited about getting back to being a great customer service company. And that's really what the Green Apron service model is all about. And that's what we saw kind of kick into gear in our pilots, and which gave us the confidence to say, you know, we're not just going to roll this out to another 1000 or 2000 stores. We're going to put it across the entire system. And we're really excited to get that going in the middle of August. And as we roll this out, we think customers are going to love it. We know our partners are energized to bring that experience forward.

Jim Cramer (3:19)

All right, so Brian, it's obvious Green Apron is working. What kind of lift do you think it could give you? And what exactly is driving the lift?

Brian Niccol (3:28)

Yeah. So, you know, you've heard us talk about this right as I started in this job about 10 months ago. We wanted to get back to winning the morning day part. And then we wanted to make sure we were staffed correctly throughout the balance of the day. So what you'll see with the Green Apron service model is we're reducing the number of hours where we have minimum staffing. And then we're making sure that we have the right number of partners in the right position at the right times. So specifically during peak, that means you're going to see more Green Apron partners. You're going to see in the case of a drive-thru, you're going to see a dedicated person at the drive-thru window. If it's a cafe with a big mobile order business, you might see a person that is, we're calling a play caller, standing in position, being almost like a digital host, so that we can keep order to our mobile order business. And then behind the scenes, what's happening is we've got technology that we're calling the smart queue, which ensures we sequence the orders correctly, so that we can deliver on cafe orders in less than four minutes, the drive-thru under four minutes, and then obviously we want mobile orders to be on time and accurate. So I think what you'll see is nice improvements in the morning day part, and then the balance of the day, what we've seen is we've also seen transaction gains there.