Starbucks attributes its portfolio of cold beverages to a shift in generational taste preferences in response to a question on its earnings call. An analyst, who estimates that since 2016 US cold drink sales have grown while hot drink sales have declined, asks if Starbucks has less of an everyday hot drink customer and more of a new type of customer who comes in less frequently and opts for cold drinks. CMO Brady Brewer notes that the coffee chain doesn’t see a trade-off in frequency between cold beverage customers and hot beverage customers. He adds that with cold beverages there are infinite possible customizations, offering a great opportunity. “On hot beverage, I would say we’re not leaving that customer behind. We’re continuing to innovate on hot beverages,” says Brewer.

Starbucks’ (SBUX) fiscal Q1 results and the accompanying commentary were more “constructive” than expected, while the early part of Q2 presents challenging trends in China and the Middle East, Morgan Stanley said Wednesday in a report. Starbucks acknowledged hurdles in its Middle East licensed business due to boycotts of US brands, and the company previously cited China concerns, Morgan Stanley said. The company is introducing product innovations to address these issues in the short term, though same-store sales assumptions were adjusted downward, the report said. Starbucks expects low single-digit percentage growth in China’s same-store sales for the rest of the year, down from 4% to 6% anticipated previously, and Q2 expectations are lower, likely flat or negative, before a potential improvement in H2, the report said. North American same-store sales grew 5% in Q1, topping estimates by investors, the report said. “Starbucks called out the strength of its most loyal