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Starbucks (SBUX) has struggled in its recent earnings as high-priced menu items turn consumers away. AB Bernstein senior analyst Danilo Gargiulo joins the Morning Brief to discuss the performance of the coffee giant and whether it can overcome consumer pullbacks.

Gargiulo has a Market Perform rating on the stock despite recent weak earnings. He explains: "Management is working toward a set of demand-driving initiatives that could be helping in the short term, I think, to really realign the value positioning of Starbucks toward what consumers might be looking for."

In the long term, he notes there may be "some realignment of pricing versus the expectations and the willingness of consumers potentially to pay." This may come down to improvements in-store experience, as he believes the company today is a "much more complex store compared to the Starbucks that we used to see in pre-COVID levels."

Starbucks is set to report its fiscal third quarter earnings results after the market close on Tuesday, July 30.

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This post was written by Melanie Riehl