Starbucks (SBUX) 26 Apr 182018 Q2 Earnings call transcript

Good afternoon. My name is Chris, and I'll be your conference operator today. At this time I would like to welcome everyone to Starbucks Coffee Company's Second Quarter Fiscal Year 2018 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. the to turn President-Investor Shaw, now Relations. would call Tom over Vice I Mr. now your you begin Shaw, may conference.

XXXX. be everyone. today and Chief second fiscal Operating to afternoon, CEO; discuss discussion Good Thanks President, Scott our quarter for Roz Brewer, Officer; results Americas Johnson, and by Kevin led joining Group us Today's President will and for CFO. Maw,

release GAAP their corresponding now will over website archive This our the non-GAAP an the be I and in information. measures. of call and with Strategy Group on Form investor.starbucks.com excluded Matt be should our considered charges, XXXX financial such Group GAAP will Kevin. to statements President, could John and in reconciliation materially from Report to international with of Chief costs, Culver, related results Any at Burrows, well. Ryan, the call will last joined and on find several other with in these our Siren differ These of markets, call from uncertainties integration discussions Annual actual assumes Channels; referenced results. Starbucks or Cliff President, in changes be related as update This statements. available to ownership forward-looking by webcast in impairment will gains to our and transaction to include risk to Q&A webcast non-GAAP which website any including SEC, Our our call and these to actions, factor International is measures our conference including are filings cautionary that and Officer. obligation results no to Global strategic statements are refer various earnings conference the XX-K. of conjunction items our and statements turn in items. being today's statements fiscal restructuring Retail; include forward-looking cause subject risks items Please

and welcome, afternoon Good Tom. everyone. Thanks,

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Your with first Sara question Bernstein. from Senatore comes

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Our opportunity, driving beverage. really Roz in said, as is

with Your Baird. next question comes from Tarantino David

Your open. line is

afternoon. Good Hi.

clarification, Scott. to make third around your Just understood first commentary a sure I I the quarter wanted comps.

mentioned but light plus I you interpret needing that expect to comment to sure that in to comparison, be think, it about tougher X%, of despite you work. I your wasn't initiatives the how the

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Roz. first I'll hand take to the Thanks, part, then I'll and David. it

the third the likely see Roz? But given end day, understand was last So that quarter the we to and momentum well. X% the color, Unicorn answer the comp Hour of question year recognizing is deliver do as we expect simple trying quarter. a to quarter. a comp in Happy the build at We to over promotion your is little that third for Frappuccino from the to the last from year. add I X%

were Rewards Yeah, we have that customers. details heavy Starbucks in new our business What we just as they what about occasional the in we so our afternoons, routines have afternoon. that our joining as not us is used aware afternoons that the frequently, the and about to customer around as the with afternoon our baristas, our in train offerings shop know looking also partners and we the of afternoons, know is at the they're don't

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refreshment, afternoons in cold are looking different really customer that at they also the interested our for a We are afternoon looking and way. We know is brew. in

be in the product LTOs, have around to number the reducing offer, that we'll you'll by the year-over-year. Starbucks cafe. with in time have cold in That afternoon XX% that and can new of partners teas. brew, also chance the the the offering simplify we refreshers, get work that We'll gives when line the the So is both us a engage the customers so so experience limited you're

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We've their adjusting we've our then and our routines So partners, of growth. afternoon marketing customer. in time what the period stores we're in lot in a about with consistent that longer And we're and over learned occasional happens for learned line. investing that getting a

Yeah, David, this is Kevin Johnson.

Clearly that morning me on us. recognizing peak, Let at very need the we've customer out transition the comments. need that increasing then starts what convenience. build need is day-part, And state dominant between Roz's to figured we've to morning both community. important the we day-part, afternoon state the into is the just of and convenience the as And balance been throughput state too in

has experience. that the acknowledged how how even also program out the deployment activities the deploy do and that figured the transition we but create so mentioned transition Roz earlier right our labor, we way we And to that has that they

lot is all marketing we've Number combination do the that to put this will Improving two is changes the we on then I we're those the think, experience, in experience. think customer day-part. number executing three and So beverages. right And of a want cold and one the customers is awareness that that raise in raising ingredients the products number as with into delivering Roz to has the in place our made tap awareness. of product three: particular of intent. with afternoon and in we occasional And said, And those

Blair. question with next Your from Zackfia comes William Sharon

open. is line Your

the size it's of percent so the steal do afternoon. to what of mix, view at all your as of operating want but mean, I growth the and risk growing achieving goals Asia-Pacific the I of the rapidly at day, this kind Good given don't the on a guess, you U.S., I there there? we and recognize to frame prize And is main Chinese rapid to as the your profit tempting analyst how I spend you Asia-Pacific, should but Hi. China point. our from thunder time

little the to seeing Sharon. bit we're question, what then for I'll guidance. we'll get but on Thanks talk intro this bit, a back John China, in a the about want little I question to and

the taking And Yeah, on we're for obviously XX the so, really, Sharon, view China, perform continues business the how in we there market, approaching term build us, and expectations. to years business it's above the about there. long

increasing changes, If far noise growth after the existing frequency continue you FX segment, the around quarter. and look growth the customers. at well China bringing that more X% comp rate. China as entire to in grow exceeded customers signals around XX% which Transactions revenue equity we're all of drove new CAP our overall in at as

store XXX stores I stores was operate stores over XXX importantly to well and on cities, in X,XXX highlighted that We remain now the XX% ROI continues that quarter. the We new as in opened think Scott see. growth more strong. we New the in the number

twice with made benefits that strong investments last do important XX the Equally Shanghai partners for Roastery, we of very do brand foundation has investments parents the on that very is full to we've and this in elevate continue call that on the with opened that that care Roastery which model volume for is years, and paid the benefits insurance end Shanghai quarter, last and the over things In and an elevation Starbucks maintain was the last important. grow. the to. the our the grow. first does we week. still particularly year, critical operations. store within highlighted our that announced we So the the has to we in I The add seen we've to of initial been a people, has around And in in a those whether know to one experience we've China have does made also All day that the market. partner December, average quarter strong of dollar the that And whether the

it from New normalized Now was due through in terms comp QX, year we And the got regular to to saw then and a the a had weeks seen. and And comp we we year traditionally soft, was a we back did shift basically perspective, of started was three that New came Lunar actually later out that in Year. February January business, see Year performance Chinese once than before. Chinese Year, this we saw shift the shift what Lunar we in was that the New the the Chinese

Asia-Pacific we around bullish, all in in all, wait strong. then in very the have So And just May. you and China remain in total, remains Shanghai to very We business can't return significant several comps. Japan operate first in a saw stores we the quarters Japan also is now of We X,XXX for to the positive driver region. time business. growth in our

then in perform. to program well. highlight the continues do X,XXX Korea. is Rewards recently now very with out continuing also momentum Starbucks introduced is We operate business that We that strong to saw also the market, nearly My call Japan. other Korea and stores in just would I And

– China, is company part the in forward. biggest going growth growth-driver a for Asia, big overall the So, most

that consumption is but long-term just this think what of years, results Kevin. long-term we I per year will China say million, if per near-term, in the at near-term been Sharon, cups versus class on U.S. We've for guidance middle in same view, as the a U.S. the a would U.S., me Yeah, size the in per the of achieve China but coffee sort know, for comments, could cup view the of kind with means what, China you in you look person X.X in weigh number let this XXX my that's of have current the the long-term. we double year Scott person you per is look is in share XX in Then China XXX if

look terms at math, U.S. the So opportunity over the times you it's X,XXX of that means that size as consumption. in

a are mentioned, that's have long we taking the long-term all to that but Scott? and do John opportunity view, is the Now term, significant. things and we

XX% will would quarter's both quarter we And growth, income our operating thing a performance in this we performance the segments, in unit be China add operating only the obviously unit last of Asia-Pacific, call, lower I the little given of of other is and that is bit income China the some outlook Asia-Pacific approach business this business that said now that going to XX% year. in the have

Starbucks. So for that is clearly a big growth driver

comes with next Ivankoe Your question JPMorgan. from John

Your line is open.

XX% part your and Hi. specific of that. quarter is Great. I Thank been And this really you. food income for It's of The question the we're the a But on is high. U.S. it we've the while. COGS it put obviously occupancy. in a is that does just for contract, entire on, and now understand Hitting margins not on seem the operating division. cycle gross line that more seeing you more bottom this food

foods we food? you, that Obviously from for is can are Kevin how the Mercato have is than of you be a not as understanding what sure the today. Roz, additional system that specifically a currently for from margins part or the problem legacy Mercato mean, have and complicated it's we question the of maybe all platform maybe So more incremental add I fresh platform

start Yeah, it I'll Roz. then turn John, I'll to and over

that shift, has seeing margin foods that which only the we which little bit it's types pressure said, from such as we're different foods, cost a higher important breakfast so lower of slightly of towards understand within prepared a mix margin. sandwiches a within goods not has think bakery to sold is I away of as slightly

X% pressure bit. when products more, good we and the that, sure the given had overall the Back broader and expansion mix, doing COGS is we but now a We're I in new One try comps more. right array of that sharpening income. even things important cost food Roz capability will slowed food analytical operating have we're to right comp bring it's deliver little X% just as making or a sharpening just about from pricing talk little think about savings and within we still growth, margin at And I'll the our of and little goods that let then and front. of that a have significant this income sold, And to we're that to that, and manage capability still bit. we could in around pretty up margin we're it understand, that Roz operating bit, there's have talk a waste beyond. that And opportunities

a couple so Yeah, things here.

and go we looking sure line-up, a broad actually First, lot. And we and we the from make supply real cost this looking to chain carefully roll just a evaluating developing we're waste very we food as understand at And as Mercato the at as we the looking were Mercato ingredients learning foods, design initiatives at building out while a we're first we're the we're product. scale. entered

stores Mercato, managing lower higher and stores really where Now, the bare we're sales from looking the then we're have at even point to outside performing we're perspective And a typically down our tactics waste. are down waste. even that waste of to

applying on list. performance store, waste so time stores work. that We're We their work. our And going have improve first to against very of each one for those principles by the detailed those we're after lean

product see and you items line. we of business, a are and down food the adding very the for cost the as And second that on tactics year, to complement brass cold the lot we're business. half from grow tell rest of new lot And a our that's aware the you we in the keenly also that into I'll go standpoint of we to have to but the us, the our beverage waste So lead of reducing makes lean we sense beverage that beverage principles. focus a leveraging want of plan forward. our

those forward work that that. having plan with So its mention I'd Deployment efficiencies, beverages, beverages, new to business labor other come with we're with a and we're we're beverages, with against there and the doing is food-attached parts that then applying X.X. new seeing in of that what also through the savings seeing also do marketing

more continue comprehensive our our our a this partners. Those We'll then plan at forward yes, around, food by even managing higher to our mix we paying continue in and waste So initiatives. future, it's now are in platforms. and and invest really will invest to in digital cost looking the

down we're and the through So into tactics brass cost waste on labor.

next Your Jeffrey Barclays. with Bernstein question comes from

Your line is open.

much. you ownership unit just Thank questions your related Maybe very Great. two growth. on and structure

up to the First on you consider just increasing of one just structure. on license the you the but I this cons license whether could pros past, in years flip maybe mix. update has your us U.S. would come and know

you've stores license of mix and the U.S. of few in done it past seem that increase does You've actually over years, the it outside U.S., clearly the like, seen

in the growth, is further U.S. discussion was comps of whether maybe And to regularly. with just unit the wondering the have all down the a discussion that difficult the little this where business the ease know a would I'm the how and related mortar be, moving were pretty significantly, maybe struggles it comes have for broader reaccelerate to you requirements. and that rejuvenate and around short greater term if the Thank unit wondering taking reaccelerate just growth you. the considering thoughts the pause. up which brick a on bit necessarily them comp. slowing reduce comps you the question just the but I the want cost period not to growth I'm as you So opportunity retailers on capital volatility just to around Obviously, But

most license. structure, I Kevin markets add been own. we've I'll what to go think about we license have to decision to a Jeffrey. choose and and say open-minded relates Taiwan last analyze look and very And And has we and Thanks, two opportunities back it continue if is, own Singapore, Germany, to we I to that we just as to over the quarter, or in. those Yeah. would can what what conscious analytical for recent we continue What license years, own ownership the start Brazil. make and, done to moved you

mix disciplined I actually analytical We're a the In we we've and when that and looking we of But licensed stores what the want. the owning of to think, you license, we do really U.S. get access looking So and wonderful that profit we there's in flow the U.S. we are overall other and at when financial can those that's U.S., can us own those some on company-owned three size makes always at company own handful said, licensed particularly times remind because we're we the decisions, growth relationships, drive we're We're the XXX% than the we making had, returns. want store licensed otherwise. of in that and we the And in markets those market and stores. returns to with you, store. structure we to where see the in share we of reasons when are stores have estate and really markets get as And just at we to pretty, but and the for royalty good like profile. stores also owned that. cash do just because wouldn't cash we the licensee. to looking and of a real own. Those And sense overall you returns four to flows average that China

are to do able to markets, owning have We're that obviously in responses product larger and roll-outs mix. and addition, marketing you to benefits. We're qualitative those a and faster when training market. difficult more licensed has In do

it's to understanding those so anything Kevin, add that, really know, would or... in markets. And about returns and don't if driving those you I

expect No, our us sense, you I to consistent very so. to do makes and to think to licensed we've transition approach where continue in it's should company-operated been markets markets

five we stores, openings to what store and is that start those stores store new is, up returns in country on open slow below if and And at in up able walked years in a conference trigger of the And much in vast faster we bit the start to the sales to we in for drive-thrus, the of analytics get. for then see And a And market. new that for the little or the our store net that then than new we the expectations. that as in give on majority any around store, we one stores stores opening around grow when have the down the stores the us particularly the those have come that a when of is net that we revenue open revenue and new company-owned the average from the store store capabilities year talked through because four happens of recently incremental. transactions rest those we U.S. is revenue

that you first that you've you the in net profitability over that up, all there's when no year time. really so and of have impact, comp got all And growing add

will by we'll we if openings. what by look there, store sales action we take happens we start and we those P&L watch see so lower to decay store, And transfer, and at P&L, as

next comes Stanley. Morgan Glass with Your from John question

Your line open. is

as any year. Happy the doing do how get What if lap that plans not and planned Thanks wonder but have very last so the get share could on in version Understanding the your benefit coming or And also, there benefit there you improvement to particular? margin the and defend margin profitable disappointed is in not to was Frappuccino Is quarter past? during comments in getting they the the a app you third Frappuccino had against daypart? Hour in Happy then Hour, an you from a margin been to offers, a their frequenting bespoke talk it's may more occasional I that. that you you're in you're afternoon, as much. user not if in it I being plan that it repeating as about not suggested been

then ask happen so more to take little a digital growing. is be to about I'm to part Yeah, question and going of relationships talk I'll bit our this there the that – first Matt Roz. that

about going are afternoon, So touched. first of haven't we when we customer we a the base all, after really think actually that

almost new that customer So to feels it a introducing brand. the we're like

lapsed to and talk the opportunity a the them in about customer. the offering has if have We were improved which stores, the product to they then experience to them introduce

that store member we then and them a them to and there's that eventually So us attract to to react our Starbucks like members. things hope changing engage to are and the Starbucks Rewards get will as begin Rewards respond

the as have the us offerings, And this we business, there. engaged remember. customer us. to we store. in this, that as us can we've going done also I'll our change with in of a again, the we're that and efforts And the around focused chance not they not keep marketing opportunity something, them story hope enters far as done how a this gives putting many short-term about mention And fuller, are So past. that the longer is have we is this tell

little a the about So digital Matt, growth. share

Sure.

we're Hour new great Happy alive. think this I of bringing is how example strategy a

last inviting up to or Frappuccino. And So, this and and year is digital to reprise for we come be in, we people won't one-time-a-year it means ten over you year, days one on an What be product. to that doing is we not years. Starbucks. one-and-done up they're Happy ongoing the rather intended that What are for ordering a a May. they the that in, promotion, and discount the is whether gave across Hour is now than What Frappuccino in everybody. the Available People just again, sign away relationship will over stunt. was got discount a came doing ten-day if ended happening they

Rewards stores The this from on sustained into over know much repeat, its we're of focus ongoing personalize, right one to to relationship do and afternoon a part get able of a respond in that customers an across is customer to is to the time, done of to our to, back they ongoing our strategy Hour to time, and something able with in but We just and Starbucks build and broader do an focus a across very the we device well-known use going May, will things shift our could it segment not bring variety using Over we that a year, year now, with customers. be term marketing, called customers. products short with we have long-term the ongoing basis. to what customers, Happy platform promote

note, we're we're effectively, now. on labor a just the us and efficiencies get to thing, extended that labor that that time, predictable, because planned period Happy a it's able And out running much does over is allow longer this plan so of to more and more last programs one Hour of

next Your Andy question comes from Jefferies. with Barish

is Your open. line

give And bit Yes, you us course kind more that's expect obviously, of way rolls And of do the actually and just over partner incremental? out or a been you the Deployment investment, year can it the you've leverage? the know, the on done little you so? X.X, already maybe where X-ing of markets some labor to you out can reference get some X.X, of next

Yes.

So couple there. of things

fully So, establishes out February, that product and the by and And one-size-fits-all actual actually sales we actually visibility of is, what Deployment first program then at it the routines, program. looks the the mix. have by rolled apply past, labor the out first we of was day-part. And the we end in store-specific deployment month. had the our did against at a the And looks stores. of routine the It is the it. had that It not in all, X.X. rolled this that channel does does the in actually fully data mix, it all, We

store Omaha, the store Chicago, and applied if in deployment same were So you Nebraska, a a plan. we in

before. look can store-specific this much approach spreadsheet visual data work data. so to we them, cookie is was it have digital store displays like that shows a by Now They it's routine apply The and within cut the how their balanced. at a or more not labor,

by We schedules, They're their partners. their sales knowing expect knowing the to are getting flow. from and enjoying engagement what

the moves, efficiency we it. cost the particular plans, also is two getting product at we're at piece, from also ways that that, the We're looking too. from partner So and engagement look

reducing into predictability XX% scheduling. the by add again, helps So this us LTOs also the

those of both creating need. that So efficiencies we are

fully out QX, And Roz, it's that stores? and to rolled out of rolled all in middle the

rolled Fully out, yes.

you. Thank

next question Capital with RBC from David Your comes Markets. Palmer

line open. Your is

initiatives the recent been call, the an talking over tell just there's going Thanks. you've feel into to those targets about. is Good sales priorities be can the like that evening. and innovation, that I XXXX? after is Question initiatives some case you which the drivers, effective argument that the know of is in some heading user I give that it beverage digital you that on be and this You more even out the growth and going of to that confidence laid mentioned months about giving quarters the prioritize Thanks. to helpful. But see you're traction the are you getting pipeline, or really you where that promotions. that would had you the but if in couple mentioned you momentum suggest building, next building. things confidence momentum be fiscal And

the of to was answering, X.X terms in rolled really – I'll seeing number David, I the terms the experience in is addressed start but think, stores. in out our this our one our that areas that And partner Yeah, engagement only I'll day-part. satisfaction customer related by we're Kevin. results of customer not of Deployment by

the digital customers experience, improve a us Matt communicate to digital. giving and fact with aperture as communicate access the us think, important their does commented Number outlined, very is with that allows beyond non-rewards to that customers personalize rewards reach, we're clearly it that two, And I as what include is which far So but them our direct awareness. that to of can channel frankly, to us widening as attribute. think I've also communications the raises a we I reach direct it them. to And gives many

is that of we've driving. awareness So personalized I combination think that customers, think, And a the important very been product of innovation I then third, attribute. those

the product things awareness experience, so And there's come and to and then the have The together. so innovation, those connection digital three reach.

with Your next Matthew Guggenheim from question DiFrisco Securities. comes

is line open. Your

had questions. just follow-up two Thank you. I

past LTOs the they're back sort And of of and that like you're initiatives, sort going now respect less Happy Hour, the Specifically just fiscal bit They're fiscal to these is already in XQ sometimes a we're with second down? was X.X, not to of going and of you've we've that. volume bit pull question had be going or of just little can the and disrupted in reported that a thinking around same your XQ. Philadelphia that have specific clarification store So urban the stores, versus How you political is begin about then in activism the LTOs in correct such the to numbers my start? and guess quantify? to headlines You questions but it things and store, with you much this that drivers and reflected to had that, some couple sales you did XQ, the of in meaningful have and protests to to commentary, like years away of the things that appears in the not walk little disrupted weathered incident negative have that subsequent guess saw your I slow some storm? – impact as a a I the

Matt, this Kevin. is

then first days happen Philadelphia that doesn't a how term happened were that we take fully I a question. And Philadelphia, will right believe we'll ever of first, understanding Let the to to on we are in on situation, Starbucks. spent on have and it focused we company again. better on appropriate ground address But the and and begin reviewing because and team also with the the our members in I things, me be this. of and ensure take number actions Philadelphia several could leadership question the your a that to of But long doing along the it so craft to

still early, Now, I not seeing acknowledge an result we it's are sales a but impact on of comp as Philadelphia.

We've impact all announced on actions of are actions day closing discovery, of We the review going ensure do of to in we only embarking work financial overall that the that captured May are are and we're stores we're we're our in but taking. aspects of the XX, still assessing taking. to we're that not afternoon the a

sure thing for long will approach And one term do to dividends Starbucks. our so I pay for know that is this

of listed will part your back of in what I is half this question, in would Matt, year. the really things And of say on the first kick the that you most from changes of the will talked but about benefit course over see, the what believe, vast XXXX. we that of Roz talked majority the did build Deployment X.X about, we We some

from Cowen. Charles comes question next with Your Andrew

Your line is open.

is nature know in we've you I first call markets these the the seen East lower of China since comping Great, the China of just and thanks. spoke time given and this penetration results, stores the consolidated denser to about January, expect the forward can in how help new gap going new to just help rate can legacy us historically you growth China the East between model this China have there? trended structure segment normalized we the what stores and as the

call I'll have but been lower, and want said, a opening lower a because They on we the John that last over on it's bit talk Not little market. bit talk bit think, in have about dramatically a lower business that a the you the about do bit of China lower, and the I little time. call. the little what... a is opportunity, little what bit rate little really higher store they're significantly East to but John,

Andrew, comp. clarification, currently just and not Yeah, as the in a reported it's

Right.

then It both the – China the gives back and that overall, growth to businesses scale mean, to reporting then our our opportunity approach market first with customers won't us to China going for it's East but and end be to track, bring the So more voice single drive January, company-owned leverage across we on both I a next and until and off. also a and integration gives partners efficiencies forward. together great us

and Belinda China East all East of quarter making team focused China her it's huge the for obviously us. leadership first in the success into business. welcomed the We've, a the So are on and partners entirely from of integration, have sure full the integration

China. at of that process normalizing the East And well. in systems across as pay sure and are financial looking also, are those benefits making then company synced as We accounting owned and well as and both

and supply chain through and to continue FY efficiencies. the We That supply work back is ongoing well on systems also as work continue And work other as XXXX. will office that areas. key chain

advantage able in the and Investor just So for take to just to you great we'll provide opportunity be – this one a and Day, update opportunity the accelerating us for growth Mainland. more of really growth the presents across China during to

comes Holthouse next with Your from question Karen Sachs. Goldman

Your open. line is

business? operating and to in U.S. sort Hi. this growth? segment, One something of it I to happen sort that looking or does number of with Is actually when-- – could then look that quick that than cash out own the about clarification And that? substantial we the that, upfront or And you pretty then China? be stores are Thanks. of that think in even this the moving really Roastery you're and breaking farther costs and funding business the Roastery pre-opening when that can within East from gave, or XXXX point, the actually service a not signing, we sort down at question. know return just do away at food China, its is include need leases XX% we The business include there's but other should U.S.

company-owned but We'll our at include around strong, first we and the of the as stores. arms get in of Karen, end the stores update question, level it a detailed Yeah, on also does year stores not China you stores of say the is those the it's profitability just East last the year, we'll will China. through those so include does quite that give an XX% move time. as I not those

Reserve the for On will But here include segment, includes example in downstairs some believe stores include the Seattle. I includes other in open Siren as is which the we store will revenue say building broadly It that's those. in substantially would I related still there Princi to definitely It what's Roasteries. SBC. the Retail

a there's that before segment will it And be even. there. so in few And breaks XXXX things beyond

comes Geiger question from UBS. with Dennis last The

open. is line Your

the initiatives non-MSR to there customer. end Perhaps at that all mentioned this Is easy presumably to emails? those digital and at the – it's XXXX. the you your that back into come or helpful. on – it's That's anything very can wanted this U.S. And members you early very that by sign-ups, be will detail on else build how how million thanks platform. the learnings year relationship But I U.S. Great, share on of consumer get I for your easy been stage? capture there will been several platform think to to

grow MSR So platform as XXXX, actually we year-over-year? get that spend customer into can cohort similar the to

Matt, Sure, here. Ryan you question. the Thank for

customers long-term done environment think, we've in been strategy. strategy is because million long, us, this there something year, We a this I the road not a rewards. thing million store, There by in. are we're one challenging immediate that a is opportunity XX It's about that the about signs. just of it to see done is And we're the huge the XX and exciting and response this early in million long is our beginning. ahead is talking year several encouraged

get very to couple excited date, just on we it's that skis Now and it'd about way, what easy you be we're know tell of but results seen we've a after Happy the and is get I to right track over the our Hours, can here.

a with also that have relationship to very up involved customers brand We because they very sign it's easy are that to a with. want people know

going have don't people outside have a direct us companies we and of for now to them Rewards that most is going want do what So giving reasons that for that. Starbucks us we're relationship, digital

what with saw in terms Hours. per spend, we love frequents see customer optimistic opportunity what of too lot regard We're we're in of a kind So about going With see the and Happy on we we have, the of response have, to of the that. we early there. speculate to brand that to growth kind of terms to

greater from I customer. our SR think response Hours Roz mentioned that we're non-SR our seeing the Happy versus to

stress up the we can business, So takes really And very and then the is promising. on thing benefits them I the of getting to come right everything that really know is know we but it would we're but is very one personalization before advantage the everything early, track. signing customers, the take to

Mr. Shaw closing over for now turn his to will the remarks. call I

thanks Great, Chris.

to Day you on reminder, of China seeing XX in starting we XXXX Investor look As Shanghai. May our a many at quick Starbucks forward

have call a been In addition, and for conference tentatively has again, Thanks evening. great XXXX scheduled quarter XX. our third Thursday, July

quarter This concludes Starbucks fiscal Company's call. second Coffee earnings XXXX year conference

may disconnect. now You