Starbucks (SBUX) 30 Oct 192019 Q4 Earnings call transcript

Good afternoon. My name is Hector, and I'll be your conference operator today. I would like to welcome everyone to Starbucks Coffee Company's Fourth Quarter and Fiscal Year 2019 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. Instructions] [Operator

turn Relations. to now Ms. conference. now President Doraisamy, begin call Investor of Doraisamy, the will Durga over Vice your I you may

and afternoon, and results. Today's us will be for fourth Good Kevin and discussion thank Johnson, by discuss President President Grismer, Global quarter XXXX to and International Chief Operating Brewer, CFO. by joined Roz President, our Tea. And joining year fiscal Pat and Group led and and everyone Coffee for Americas; Group be Channel Culver, Q&A CEO; Development we today will you John Officer

and call be forward-looking could update to or cause our conference on in cautionary Annual considered Any last risk materially discussions including which in that the various results assumes actual are statements. of Report to differ to conjunction statements with This any subject in these will with earnings include information. our no factor from our SEC filings uncertainties statements should risks statements obligation our Starbucks Form XX-K. and release forward-looking these statements, such

several results. in our at costs, related with These certain of results investor.starbucks.com referenced today's are corresponding items. measures find and in include our and restructuring items charges, call to their XXXX fiscal including other to strategic measures. integration from excluded the reconciliation items Please and impairment refer GAAP non-GAAP actions transaction to website non-GAAP financial GAAP

on for website. quarterly costs reflecting information certain structure non-GAAP Additionally be reclassification our reporting and Relations segment fiscal and also as operating and through can Investor previously restated announced, fiscal accessed realigned financial XXXX QX XXXX GAAP our of

our our call call, November of call. on An materials, through select accessed can would the via XX, the will at of the of on website to conclusion which today's this we be webcast will providing XXXX. that IR the presentation I like archive available note be be webcast and website during Thursday,

fiscal year first XXXX please scheduled purposes, January has been that tentatively Tuesday, earnings calendar your for for call note Finally, conference quarter our planning XXXX. XX,

over call I will Kevin. turn the to now

welcome. and afternoon, good Well,

As I'm executives from ongoing strategies Global growth and On great John to implementing discuss joined part and senior Nestlé stores our Starbucks call trip this today's Culver collective progress the particular teams world, of for by Tokyo. to visits I review have Coffee my around our the Alliance. are joining made

delivered Growth I'm Scale Starbucks our strong in continue agenda operating we transformative discipline. again execute capping for Today off QX, to share the at company with and pleased results year a as that to focus

in our for an build actions to made more key call, and the financial but later review well as by important investments Starbucks. performance enduring value growth taken sharing we stakeholders our all we've I'll in the as while results the detail enable delivering at quarter some start company will as for Pat and year sustainable we've predictable, highlights

of year. $X.XX In sales growth X% These excluding net yielded exchange X% non-GAAP from the quarter operating for X% fourth quarter, year-over-year. comp of led growth of of EPS growth store global strong the foreign and XX% activities streamline impact by Starbucks XX% and delivered results revenue last up the of

in QX a the sales of comp years. over the comp including over two sequential a That's in two-year in XX% In U.S., our in growth of very and transaction best sales we growth U.S. our of for posted X% results strong X%. QX comp QX improvement performance

over positive demonstrating the of fastest-growing store in posted two-year growth a year. China comp for base business, X% where That's momentum prior increased comp of by QX growth comp continued X% sales QX we our in In transaction our we sales including X%. XX%

and year revenues in foreign when $XX.X both over Total billion streamline up delivered revenues net year, and fiscal Starbucks XX% prior record activities were non-GAAP the XXXX results total the For comp included net adjusted year globally, $X.XX EPS. versus over a fiscal growth net EPS This X,XXX year year. the X% of XX% exchange. record for sales non-GAAP stores global yielding up in new prior for for

markets week digital over I XXX,XXX of serve. we customer million to in of and welcoming customer And world. XXX applaud, deliver higher levels one achieving With preference. our year, green customer a apron occasions Starbucks billion customer partners, our who each everyday and over more routines than partners, enabling premium brand every occasions is are they stores of even Starbucks the customers' Experience a loyalty around XX,XXX the XX Because part per

growth fiscal will Now what that be in drove let laid year XXXX. performance, in strong the fiscal have the And investments me highlight groundwork of some key another initiatives XXXX. our for expect and of strong operating we

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approach seeing all strong parts. And we day evidence growth the as fact to intend traffic ahead. year that momentum our demonstrated on the that across is by We in build working, have we this are

connection, delivered correlation Starbucks key increased competitive a our strong belief our Experience, engagement continue to frequency. We by partner to reinforces leads is partners Starbucks customer customer a which between This advantage. the that see and

therefore, to and in evidence are the this the experience elevates experience, And customer clear that we elevate growth. turn investments making drives targeted with partner

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momentum, XXXX. with year partner incremental we And build in on investments will this fiscal

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reception. very we're encouraged by And its

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have convenience And desire to finally, meet customers' personalized pursue increasing offers. expand and for to customer opportunities new investing digital to continued relationships, we

by increase Supported multi-tier year-over-year the early Rewards QX, we successful XX%. launch of active to Starbucks million QX, end redemption U.S. of at saw XX.X the in a grow of members

we because This from important level join driver Rewards customers Starbucks experience, an their with is growth Starbucks when that meaningfully. increases spend know

customer outlined that role the On strategic our digital in relationships. flywheel I earnings our plays important last growing call, digital

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Deep management with for Deep better drive is future. world-class We that leverage key spend our the we Brew power personalization continue as optimize that partners. AI capabilities, customers. differentiator our our Deep plan in Brew will increasingly more they to And can free connecting our to inventory quest in support allocations, partners, a up labor time stores. to build ways engine, and Brew store so

we've past engagement, by and strong this the opportunities digital how one we've the on most back development, innovation. customer growth made of world's progress in I'm store expanded to over accelerated to led category-leading on pleased very capitalize year, compelling looking China, Moving with growth

of the one store be We new China. Store fiscal net crossed maintaining XXXX, our development over number stores new continues in store mark, XXX, to driver returns. while growth in opened and X,XXX best-in-class

July, in & been our retail we and integrates opened investing in the we to Delivers innovative footprint, store experience. experience, in also physical our Order including retail expand points, Starbucks have and As that customer unique, digital store a touch Pay, Mobile express the Starbucks Now Beijing that enhance seamlessly formats,

this cities store results We top new increase in China penetration. are open format. we leveraging Starbucks stores place to And early format from complement in store new fiscal formats XXXX, third in Now seeing plan to and market encouraging this the new tier

significant China, December which physical program expanded fast-growing in membership. digital we presence continues expanding market. in presence The in China, our we've in drive our XXXX, new rapidly also Rewards upgraded made strides we've to Starbucks As this

the up-leveled and this Stars prior To million, to members members, At store to September Rewards in members active shopping. year. up XX% we gift experience. of earn we Starbucks from a flagship support XX tailor-made products exclusive Tmall end reached our QX, growth, enabled our offer online over the And

mobile in pickup. of Starbucks mobile quarter Delivers propelled coming from the our X,XXX order We launched China stores by seven and recently points our three to in year. fiscal recently in I'm we anniversary to the cities and with expanding of one-year celebrated our digital Alibaba, China XXX that pleased share Delivers for sales Starbucks from points of end the fourth This goal order partnership the with to mix surpassed XX%

key momentum year customer to via Tmall customer also to fiscal significant work in engagement delivery innovations the XXXX era reward as in In the the a mobile experience for and are and new us further elevated ordering. experience experiences growth provides we we accelerated in drivers digital Starbucks digital and in with loyalty. China Rewards of launch around fourth enhance ushered China of quarter, to constantly These voice in of ordering membership the continue introduce as customer elevate we Genie,

Dolce over time markets: by announcing coffee the with to Starbucks alliance record in new coffee. and Starbucks and Gusto, schedule. on of new by this Nestlé, Nespresso, three Coffee after we year ahead one just this roast We Moving launched Alliance, ground in and Starbucks Global have platforms XX did

we in to addition in product launched also Starbucks category America In North the coffee a new QX. Creamers platforms,

of the We half favorite their the of be entered enabled markets. segments looking in reach consumers ahead, And through Starbucks accelerate to Starbucks we global to to coffees the plan food and brand This in in global Chinese markets first of some comfort the partnership us has XX the China's key alliance, allowing XXXX. of home. at-home service in enjoy their

dividends stakeholder year repurchases to nearly one shareholder capital of fourth share a returned to returns combination our on our the $X returns In shareholders. key to bringing of groups, full to our we through shareholders and billion. billion quarter, $XX Moving

approximately we've fiscal on returned what we shareholders, way $XX commitment our year Including by now billion end of meeting fiscal XXXX. in to to returned well year three-year billion of $XX our the XXXX,

double-digit we've percentage. share a increase the dividend a quarter, XX% And XXth our our that dividend approved I'm has to board that this pleased consecutive by year increased making

sheet Scale our balance shareholders. in Our and combined strong our our have both to Growth financial at the Starbucks to flexibility reward model invest growth position with

Growth In great discipline unlock our XXXX of confidence gives us our partners, closing, to at of the we’ve through potential markets, us and With restructuring technology and year significant stores our growth. organizational is helping we've our through licensing to brand. Starbucks intentionality, performance agenda in invested And the our to Scale and in drive our full enabling more long-term in that bring the fiscal even made international company of to core progress focus business. streamline some the

at innovation our This customers. us the pace inspiring and both to has field experiences and helped the of at to center in support the deliver for relevant, accelerate meaningful and our Starbucks, partners

that company. growth with plays investment, our hosted continued in historic role developed and the including Starbucks years XXXX in our Leadership the we've this Chicago last back a belief excited are Reflecting And to for strong month, my the fiscal store of growth it we on sustain year plans success the manager about the ability in ahead. that pivotal is we Experience,

we values shared store while serving create enable moments That a the on from leaders a the and we as is and XX,XXX to reflect why is center for guiding who forward. Canada and and and and will our to customers. we at by the stand company, field go better best remain This our U.S. are as we partners that our shoulder-to-shoulder light celebrate recommitting belief to them managers mission convened of

Chicago see leadership for The be This month and an we many Starbucks key in this and opening And our of we the opening the will largest another in soon. and celebrate store can't in be again partners back our sixth world, milestone, Starbucks our store milestone I Chicago the important was of journey, Avenue. Roastery. will with hope Reserve next you experience wait iconic there to on customers, Michigan a designed to beautifully

in With the over the later questions that, call forward look I'll Pat call. to and to Pat? turn taking your

to Kevin, are key you, everyone. want and good today. points I afternoon, Thank There that emphasize three

a very for year business. momentum Starbucks reflecting upward in our First, fiscal was sustained financially, XXXX good

our in we long-term Second, And fiscal ability to model third, long income of margin to by committed our revenue to non-GAAP continue X% EPS as XX% X% for operating deliver growth. we expansion demonstrating non-GAAP remain fully in underpinned are modest even of term. X% to to confident of growth invest XXXX, we the growth double-digit

quarter trends begin will guidance segment an for fiscal our I highlights fiscal of for followed fourth overview by by XXXX XXXX. across key and our sharing

Our business of X% driven XX segment QX last the new year, by Lapping QX of digital driven delivered net delivered in X% a U.S. of growth growth Americas beverage in and lineup an growth of our Kevin an experience led growth over impressive past sales comp this X% as engagement X% ticket. strong X% comp transactions and by revenue comp and sales equally sales by were These months. in-store in increased store results average growth QX improved mentioned. year,

consecutive sales all Transactions and quarter the growth a for across dayparts points food the comp for driving beverage of consecutive with contributing grew growth our remaining comp fifth second led point. quarter five

the company-operated August across afternoon by supported dayparts by well was growth drawing The of full was by for end Cold more Nitro penetration by beverage daypart. our slightly Brew led The time platform, tea. cold national all of and refreshment majority and received to platform, and which continued which grew first stores the the be QX, our reached favoring the occasional of advertising coffee, customers cold driven in

lineup growth coffee the mix the by extremely in success pricing ticket beverage of platform, X% to pumpkin average along Nitro. evenly attach, our the contributed beverage driven Beverage well, quarter. also with for cold and fall the Our performed and

labor wages investments expense contracted leadership and calls notably initiatives, contributions XX.X% primarily experience, and by cost accommodating sales efficiencies. increased in to These the in-store we've points hours to margin increases more from and in than QX in higher on the while offset in operating as benefits elevate basis non-GAAP Americas' previous meaningful XXX volumes. leverage supply investment to in growth savings chain discussed onetime our conference due

on our to a X% basis delivered segment International in growth which on of QX. Moving reported revenue

net exchange X% over unfavorable was growth XX revenue by X% months impact the past comp driven of XX% and new the and foreign Excluding sales streamline-related respectively, grew XX% in This at quarter. activities the X% and store growth.

fourth of highlight the I our to like market, quarter would growth international now performance China. lead

continues New driver record prior that, versus to year. and pleased number new in store one our store net of set XXX development pace in to we development China new as say of I'm be the growth count QX stores our growing opened XX% a by

while primarily deliver the to to growth presence our in we sales returns China customer X% new QX, Importantly, infilling delivered high and growth Rewards growth our loyalty cities. comp of established even including MOP. continued in strength of comp as stores exceptionally delivery engagement, extended transaction new Starbucks the cities, program X% by led digital

of benefits, largely strategic sales segments basis mix initiatives QX. XX and benefits the productivity as leverage were wages by increased points labor and basis shift to point operating by streamline-related activities, XX in investments. savings product excluding in by an International margin cost and margin growth unfavorable in offset increased XX.X% XX non-GAAP from basis segment's the the impact operating When Our points non-GAAP favorable

On revenue in Development, declined to Channel QX. X%

the activities segment the Alliance in to of basis margin when approximately XXXX, and operating basis due Global shift operating declined Channel impact to streamline, point excluding to points increased X%. mix. XXX the fiscal related QX revenue Coffee an declined streamline-related revenues impact XXX unfavorable Non-GAAP in Development's by in points XX.X% basis primarily XXX primarily margin Excluding QX,

a performance insights some back across underscoring step take key to I'd year. like momentum our the full from year now and upward share our

with revenue. start Let's

top For year, the growth of reported we line X%.

outperform our model. grew of results unfavorable These algorithm our our potential X% demonstrate to to streamline X% our revenues foreign long-term and growth of impact exchange XX% above the long-term Excluding combined X%.

pace U.S. it negative several and development trend year. had the in in digits in for comp from year X% fiscal China's the six our of quarters in to that last increase to the XXXX In considering transaction impressive, declines half X% of transaction The growth turnaround market. persisted growth sustained equally be at reversed accelerated months comp the of first an second mid-single store of especially low that moving this was in the year

cities speaking very accounted openings prior class. a returns Yet versus percentage worth And China store that of remained investment market middle growth it's total in noting China's robust growing with demonstrating Starbucks' year. the meaningfully lower-tier of for development in that resonance in store our China higher portfolio

industry-leading Our stores for was the new XX store as net the higher future a relatively our for X% quite new in grew the U.S. is our we by in store of to we to level U.S. as achieve target growth. repositioned ongoing growth coupled development portfolio geographies certain in also in of fiscal relative over gives us and we'll retail low This with X% closures growth the Starbucks' healthy year X% that business even domestic prior store confidence continue penetration to net scale with

a due streamline-driven investment margin XX was were year-over-year another We investments; with margin. tax XX like impacted basis That points XX Siren our the of our reported points from to for to basis from XX.X% four in headwinds XX fiscal value said, and accounting some activities; our in from of and XX% non-GAAP XXXX The points one highlight line XX Chicago from XX basis from to basis Retail; down The anomalous that points stored tailwind year-over-year conference. tailwind. four points consolidated a I basis leadership operating would U.S. points onetime reform-funded change card XX%. and Moving breakage treatment. to basis, on one basis performance, items ongoing margin model in headwinds

and innovation reflecting basis technology, offset non-GAAP benefits reform-funded operating partners, partially and stores. nontax investments leverage of for in all margin these items, productivity Adjusting sales by improvements, XX consolidated our product the up was points,

algorithm. believe our with growth position are growth Kevin sustain competitive to our consistent order in to mentioned long-term strengthening As investments earlier, critical ongoing these we

the of above EPS. non-GAAP year end finally high guidance. of EPS We our full previous reported $X.XX And

X% favorability offset growth from growth XX% a least activities, unplanned streamline-related was benefit consistent Excluding EPS and of foreign from non-GAAP exchange, benefit by a a X% model tax EPS XX%. partially long-term headwind X% our from with at

confidence So of only algorithm. grow implementing in to reinforce but XXXX growth our not our results demonstrate long-term strategies EPS the the we're robustness fiscal our double-digit summary, in also business, the

the markets: XXXX sales of two sales guidance X%. company-operated by X% X% we our to X% X% fiscal XXXX Globally, at growth. at expecting comp are our Moving key with of fiscal growth our lead to China to at and growth X% growth comp starting on fueled for in the U.S. driver

All of is with model. consistent growth this our ongoing

Moving on to development. store key retail next the driver growth

expect We representing XXXX to half in a in XXXX mid-teens year. sequential add will the be XXXX. versus the net new fiscal approximately approximately stores combined with globally stores new located Starbucks U.S. and China net delivering XXX Over prior China growth improvement fiscal over

comp with our this consistent model. growth with growth As ongoing is

of our the things: that in Development's the as items interest XXXX. Global his of top XXXX. X% attributable growth expecting certain line segment's top With X% and The of expected decline to and X% combination we related revenue of and ongoing Coffee model our two growth, to revenue line to are growth XXXX; growth point one number fiscal X% the unit growth Thailand difference X% between next in to expected in growth we mid-fiscal ownership X% number percentage in comp Channel enterprise-level sale one year's is in to growth fiscal Alliance an two revenue lap benefited

continue the Development's our $X of basis, a growth The expected to Adjusting the for share proceeds QX of in Nestlé. of Coffee funded fiscal be accretive ongoing these we billion of X% XXXX revenue Alliance XXXX, cumulative our lower at XXXX original it fiscal range And after-tax EPS fiscal in to by EPS associated to in be X%. benefit expectations. end on from Channel Global including accretive repurchase outperforming became items, to is expect

to and Let's sales of fiscal to and improve partners our Globally move is retail our primarily chain expected to to expected and cost operating efficiencies. fiscal operating on our over due leverage, offset related these XXXX, partially supply is be from XXXX investments across business in modestly margin overhead segments, savings our operating margin. each primarily continued The across technology. non-GAAP initiatives favorability by items to company-operated

two add additional for equation the me to Let operating points margin XXXX. fiscal

goods First, XXXX. over commodities we locked year-over-year coffee point, be than favorability coffee as in support impact needs for expect cost more net overall to At on are higher our are price minimal expected offset prices, farmer by of this dairy to fiscal of payments XX% sold, have costs. green

Second, comments line to G&A. adversely our a we development in meaningful G&A leverage store the organizational reclassification the Roastery operating The expect P&L due few expenses. on lap items of completion while the efficiencies, benefits in of and of recent middle impacting investments, conference. of leadership XXXX our of certain Net G&A, meaningfully also fiscal

income XXXX, point a still improvement includes expenses. while overhead long-term G&A our across operating efficiency XXX to now of result, As store margin it and XX% basis through is operating target a XX% spread fiscal

in higher XXXX. Below expense what the fiscal expect fiscal totaling by XX issue in fiscal $XXX with line, this debt billion interest months ranging operating $XXX approximately between income versus year. $X million million to in we considerably combined XXXX past $XXX we This expect is million and the issuances driven

we to maintaining leverage three times Importantly, adjusted committed to ratio EBITDAR. debt below our remain

tax rate compares rates the of benefited with XX.X% between are certain to items rate our and This in to tax degree same from repeat XXXX. in not XX%. and XXXX, a that the unplanned GAAP non-GAAP which to tax XX% expected non-GAAP in to XXXX, we effective be fiscal fiscal expect fiscal As

stores new will capital locations. including return strategic our fiscal Starbucks existing $X.X billion flat allocated opening retail to roughly XXXX fiscal final reflecting renovations be we approximately Over XXXX, XXXX month in company the XX% to our of see of within spending in to total operated several initiatives next where are licensing store-related and fiscal Roastery opportunities markets. our expenditures the significant expected portfolio, and of Capital of

movements minimal Finally, XXXX. currency impact at foresee we fiscal from foreign this juncture, in

for fiscal to ongoing model. all our operating of up, you when XXXX XX% total X% translate consistent income into add X% with non-GAAP to is growth to it revenue So growth our growth X% expected of

XXXX in the largely of fiscal EPS attributable $X.XX of slightly licensing operations. expect due gain of lap $X.XX, the the down GAAP the to from to one-time to Thailand We range our

range of to to non-GAAP expect $X.XX, $X X% EPS in X%. growth representing We of the

Excluding expected in our XXXX, in XX% benefited growth non-GAAP EPS fiscal that equates as growth. we EPS lap XXXX effective fiscal model tax our of with this of ongoing at certain consistent to the least increase rate items to XX% XX%

As a non-GAAP a reminder, of we income to fiscal point last fiscal favorability expect tax XXXX lowest lap being year's to percentage impact rate growth quarter-to-quarter the XXXX the tied QX at flat will our with rate. EPS for in headwind given growth nine down tax EPS slightly

Additionally, the payment fiscal with tax in And with year-over-year fiscal the of approximately the highest cash we QX its be to non-GAAP XXXX, EPS lap conference of quarterly billion for to to Nestlé XXXX. respect leadership in expect QX. a transaction $X in early we flows, expect make related at to growth

So let me wrap things up.

are First, pleased we in very XXXX results. with fiscal our

profit focus delivering Starbucks, And will expect to very for XX% this long we are by year we good term. operating model well over third, in investments operational discipline. executing another demonstrates growth necessary EPS of will This growth be an continue that underpinned continued fiscal long-term non-GAAP XXXX X% growth. fully make our to are from sustain to perspective, Second, double-digit that committed we the to the and

call. our happy and are John as Thank I Roz you. take Kevin Durga With Brewer Operator? by Culver, that, top and your of outlined at joined questions the to

Tarantino Instructions] proceed first question. of Baird. from Thank the question your with line David Please [Operator comes with Your you.

some on Congratulations seems to tougher the relative comparison. it the traffic cycling strength afternoon. great on as you're here seen; you up last here. Good question Hi. results My momentum picked is like at quarter you've a look you've Americas even

just elements you could impact So that? dayparts. drove whether versus you I'm I product I think operations if throughout operations was the you had that said of of you how you during have know the an And positive news wondering the some -- all Thanks. the traffic quarter? about big wondering talk saw

take us? you that to David, question. thanks for do Roz, want for one the

that take one. of David, it I'll the you was for Sure, thank a And both. congratulations. combination

-- but So we promoted in within continued, things beverage We the two heavily quarter pretty happened. beverages also the quarter. innovation

flavored promoted teas for plans our platform. the we and the were fall what then beverage highlighted lineup so iced beginning pumpkin with And by July early the

immensely the great helped up that stores customers, so addition were with free to see in to allowed in and work them interactions they we our of we've partners to able can that have work administrative the work that done in the all to and And that the engage the dayparts.

business to and Additionally also to that continue a see work our that fiscal that drive-through well customers engage digital our through to you'll continue XXXX. do mention from continues will I we year the grow well perspective has also speak been as engaged when occasional the helpful both multitier our as they're our customer to particularly that's allowing with Happy we Hour us introduced redemption. afternoon in And and business.

And at about really Roz sharpened delivering discipline. we've that elements is Scale mentioned are and predictable to do And David on the agenda growth. sustainable with Growth the just punctuate. The focus really that I'll executing

three drive driving customer all-time grow experience for elevate if are relevant and at what's is for our high prioritize the traffic you initiatives customer look the turn scores. things Those an in we driving customers relationships. in this stores in connection So growth. that three digital beverage our innovation That

customers, customer our the driving and right the of all-time And focused those continue scores in between on same the market, an high connection gives year we traffic brand ones and what partners the three drive on in will part differentiates pushing to are in that same driving turn fiscal confidence that's alternatives And we us we've priorities fiscal we Starbucks the connection XXXX. that to be throughout XXXX the year strengthens elements that versus growth. think and

of Please line Katherine comes the from question next proceed Your with question. with Sachs. your Fogertey Goldman

get them here. Curious little My is new looks an the least machines to, many for seeing what machines testing, have a both actually upgrade machines? whole out benefits will how stores but in question Thank kind that new bit these trialing to take customer like and the you. satisfaction, And broadly you're new the were it them? Thank you're you. you rolling the in more to company-owned guys quality, of long and about base espresso throughput. Great. side, at How it from

Yes.

So...

Go Roz. ahead,

in the Katherine yes, we concerning espresso sure engagement Mastrena machines for improving – fleet. referring stores the to have our the so that machines across Mastrena number you're we of are

to that as also in in innovation. that we the with stores should or work placed well. beverage machines so. In and expansion think we're all representing Nitro with I months company-operated doing This aware of finish that that U.S. addition our We're that work XX is continuing Mastrena the you're next

benefits really new key one shot pull. have any a espresso. triple you espresso Mastrena pull punctuate. beverage shots is to and of our want with Number to three for a shot that then single Today in has this another there's one, can three machines machine pull of I older Katherine, it that Doubleshot

at in bar that take just if has partner time beverage the of need alone preparing they're it. So that a that three espresso amount reduces shots a the would of to

that's one number So big efficiency unlock.

machines those into two, Number built Things have Internet them. of sensors

us quality needs so that's shot tuning can that's a or of can see data support into centrally if of machine out there pulling. shots we every we We get the that the being we're center. pulled that see comes And telemetry is that that allows espresso to And improve our maintenance. and there

Brew breaks. before Deep machine needs with predictive be we're it maintenance third, on a to the able And analytics, to if and determine preventative it our going

the-- on you to And partners. so our comment want simplifies for things that John

out Kevin just I I as that as the And rolling say into well. both we're benefits benefits we're the Katherine the translate think that side internationally hit markets well. on would and machines the also important seeing on are Roz international international

much I with gives absolutely being to due machine the the love to these our of all business would and lower add able very visibility to profile markets. are And it with engage benefits and the more the itself them customer across them. that far for machines thus meaningful also just partners customers interact the

the Bernstein question Please question. comes of Your Jeffrey proceed with your Barclays. with next from line

I'm or think was comp seems competition? period that much. whether were quarters. to of the do where Question or you the using thought mid-single-digit internal relates or what like think What business? it maybe like to you you're so quarter greatest here fourth over very Great. challenges Thank resurrected of solid couple past growth trends you seems really were Clearly, the back challenged wondering kind XXXX macro it you hindsight it the China.

backdrop, done two as you you. track on just X% that of mid-single-digits think is fiscal for running you're XXXX the appropriate that And past a and why having guidance seems level? with like it the X% Thank wondering ahead when again, quarters to

John Jeffrey. -- you don't Thanks why

footprint. build seeing in a well Jeffrey the -- we're result meaningful as of digital bringing we're China Modern we're our able that we've to I as then this Mixology store been footprint that Yes, think around that what innovation products the there the doing direct in is and innovation

& is moving Pay. Mobile through which orders digital then us, the the of of very And we entirely new X% comments, fast. X% an for and for quarter, XX% And represent through digital Kevin business delivery Order us that his coming obviously as is that in highlighted in channel coming saw

impact digital So, on meaningful had a has positive a the business. impact

comp record the quarter. opened beyond just stores footprint had new the lot the store we talk And the in acceleration a and about of we performance

to see continue very We economic strong returns.

We see driven majority continue strong XX% the stores. by growth new of that is quarter, very to revenue of in

grew existing team. frequenting in by and another solid is customers new then market great which And our transactions the at the total quarter double-digit stores, results for customers

So, the about and position team China that the feel in our doing there. work is confident very

the our Growth the way specifically Scale we why Pat take comp you question don't think and Growth around growth in at second long-term Scale about China. at the that guidance model

are seeing Jeff premature But business. the to XXXX our Investor pleased we're revise it's momentum Absolutely. ongoing Day. that very at long-term guidance overall in our we provided we that with our

communicating deliver. to expected conservatively degree Our high that outcomes the a is have sustainable growth of can we Kevin confidence we referenced It's guide earlier. policy predictable that

Specifically comp are where unchanged there our from that year in China, a dynamics relation they ago. the are to market impacting were

would economy. the retail that say in the coffee level we've because success We're competition, new And also We to see to the of more the on existing a category. we're of units in seeing an continuing pressure rate in a pace. specialty we've accelerated are slower of units part growth sales And transfer. continuing enjoyed I that puts open overall opportunity intense of at through highlighted course and

of this the X%. prudent reaffirm of guide with to about -- you again guidance optimistic certainly when believe are we it X% all sustain growth to business to we of performance and our it's we So, strong the our to performance past of the but range X% XXXX. it's year ongoing our We're to ability into fiscal in to consistent prudent is But those believe X% that delighted take together comp model. in with China

Please Senatore comes next of your Your the line Sara question. AllianceBernstein. question from proceed with with

bit good the of Thank or to offset these of you've about some some of ask in about the perhaps. the headwinds such China it's you. a little talked you I comps whether talked bit from about investments making and the a with in investments. Because wanted Americas

in store like be some partners? when need expenses, and faster we look in forward So, you operating and you're are -- we you going year going looks to a line. order the like forward, levels that the expect case bit top pace? service should just Americas, step the operating say to Or Should more was this making grown a I going to customer to the that is at to in it's of kind than invest it of probably engagement up which this partner the have, to investments your continue at in sustain expect

some about as please? it Or and investments about to product respect value? there of unfavorable. that you food mix, specifically talk are Is going talked just headwinds margin the on? the China, Just could things is you being other it And then even if maybe just or with

need lead? why you you then let I and that John Sara, see don't why don't But to and take go if and add we'll to with Roz it. ahead Pat,

like about QX Okay. talk do QX more like to XXXX. of back Kevin. margin specifically were remarks, focus to about dynamics total. Sara, prepared a just consolidated what Thank on I'd fiscal you, different. and my bit in In a all first -- take I'd I maybe across step talked is step here, because the

XX operating last reported So, QX of margin on basis to non-GAAP compared represented our basis, XX.X% point a decline of year. a

is a activities. XX would XX point as a I basis that our as embedded highlight leadership impact well that point impact from what conference But from basis in streamline-driven is

XX exclude basis our So when points. those, operating you actually non-GAAP improved margin

point XX quarters. context quarter, particularly improvement in to I a modest think of for the in your a Now other point, X% seems margin basis admittedly very global comp the relation sales

within segment. So what to two Americas flow I'd our margin trends primarily relates do including our like what is was impacting through, to QX, to recent unique which drivers highlight

we first fiscal exactly investments to growth customer drive point. relates on we're your that investments labor invested capacity to we are of reform The in funded to XXXX, in driver tax making positioned build unlock and explore the momentum in Along sustain in capture benefits long-term opportunities initiated we in higher to stores wages peak. positive the with QX best at levels additional and to our to hours sales believe incremental connection sales partner that

payback intended of This effort during investment was not in tested be potential terms greatest sales. the could payback completely This future the quarter. determine upper to where incremental investment limits to the of

is optimize earlier. to this labor And intelligence our going we're forward. of to machine referred a and learning the leveraging these that it our with However, amount deployment artificial provided and was us substantial Kevin This goal data. insights

in new store-level to as those efficiency. Cold Nitro Roz equipment, in improve product to like our operating support mentioned, addition to platforms invested we So, labor hours, and also Brew

the first area of the it’s So driver, in that's really investment.

inflationary The benefits as as occupancy wages in well second pressures driver and to expense. relates

our seeing discussion statutory culinary minimum in real wages coupled pressure increases in are taxes. from with Now inflationary we and continued maintenance estate with increases in margin QX, consistent rent,

as ongoing balance investments expect initiatives savings notably margin fiscal chain. our expected in in from as do expansion we we've benefits and said with we cost guided continue that supply All XXXX modest to our sales leverage

Now, like slightly or two strong about take accelerated different. we We product I'd the minute even as there sustain to mix. pace thing different China, do of there expect a dynamics one make to But to of continue is talk slightly order investments to is to our have are that because comp also in growth development.

of the foresee the into bit XXXX of mix drivers continuing Product in headwind last is fiscal growth mix. the this one of -- sales a and our in a we year in that And China. is delivery

are transactions total margin our delivery before, to discussed on the we've As dilutive margin.

However, incremental. they are highly

where and So diluting from even And grow that early what they in stages seeing more in immodesty. U.S. percentage, margin delivery our is our growing are dollars. total profit is different we very while the

U.S. difference is probably between that So the key and China the

going of both part is those to strategic is growth consistent for our help it in to difference be would across does important and make an otherwise margin of that expense line competitive top what term. going strengthen growth that expecting the continuing points consistent us is and the of expansion sustain comp stronger long on key But back the we're business strategy the our come forward at much what investments forward. But of

Your next David of your question. Palmer Please Evercore question with comes from proceed ISI. line with the

the key China. the Good between drivers Thanks. Question and U.S. evening. Great. on

more of up had by while as call, cold had year big a your In users. ramping this Even growth up in growth rewards an in you rewards that it as and there mid-teens listened fueled to that where like is seems jump with be XX% to China's interesting in contrast digital growth I sounds flywheel that you've the this the partly But order delivery. you've digital been U.S., story all ramping. beverage

you to how wanted of do agree think And each the ask you, fiscal those play terms characterization I drivers So with out Thanks. in will in that do you XXXX? in top market?

Yes.

year, seen China great just launched step spend-based pickup. I very markets we've relationships to in that then program Delivers. of China. drive we We the for same are lot customer introduced mobile customer relationships. a things our the ability forward different. past two Starbucks A significant partnership digital think David to the digital and China on grow John innovation launched in over stores on and December. a our We U.S. key to with with rewards in specifically that driven this to order our do Alibaba, for while Clearly, digital me focused of my kind at Let to thinking a and that's I'll relevant in comment create customers frame beverage high experience a hand to we're Roz and our level

savvy And world. China in much digitally base any the market is you what the in in is China than consumer see other more

WeChat Alipay at mobile the Pay. tender on just the with that's You look percent paid of or app

numbers look that are at digital the scenarios in scenarios. China You mobile

didn't year did And leadership China taking was big step delivery. team have Leo a our that's work flywheel. around that so the pickup this and many where or mobile ordering the for digital anchored ago great And a ways in in we Belinda year and forward

with order from points for coming Now XX% seven that mix is and sales pickup. our three of Delivers mobile from for Starbucks

In is the in the China extend helped. growth I this active dynamics flywheel still rewards in I the creating the sharpening It's I had small. don't And really now. a that more time part in of because think think versus our importantly, same the X% customer stores focus digital -- is that. the of continuing I customer I several think the in was elevating work and the and U.S. gone we've for that member delivery cost our are years U.S., beverage and lot that's in market, the expanding particular experience -- think on to different while our accelerate relationships has sales And Starbucks U.S. the less at into Delivers very of innovation, U.S. mix. digital than But

the think think evolves I scenarios and to continue that consumer Chinese see in U.S. we're watch But digital much more in U.S. to in advanced these And going the than is how I the

net over on David customer of are you each don't side? And think those of in in you And with then markets. relevant guess things U.S. on very we those same I Let don't the our me the China? the you add do hand different state the markets to capabilities Roz, of why to I and to a important the continues the why evolve two that's in do consumer -- behavior John, Starbucks. the two way evolution so think is markets have mix

I'll Sure. few digital flywheel. to just our highlight in here add seeing growth we're still things that just a

then right loyalty alone now. of and that's see And quarter programs Just our tender typically fourth Starbucks contributed approaching And about about expectation. points we're where members. consumers. Rewards active active of the up our line comp usually of X.X actually which we're in almost year-over-year two we saw our quarter in making seeing good we performance XX with million in nearly growth Starbucks this it's XX% XX% retraction, our And Rewards XX-day in the member calling new

platforms. So as And XXXX. relationships into our we're still to seeing digital year improvement in our see that and continue we'll growth in get we fiscal

the around standpoint Yes. And were have. they with China consumer that what I Chinese agree Kevin's a and David from and the digital comments their capability savvy

in that our the into our put report seen you've context, Starbucks reported Rewards program. the to Just earnings growth of

now that is million December. over at So the that a China grew in Starbucks sitting ago. XX have up XX.X We in we now year members up-leveled Rewards crossed China. XX% XX% is And million total which We base year-over-year. our member

drill down strong you than MOP from now expand just continuing at X,XXX we're to XX more when China across customers, MOP, speed. really expanded at We're little the that bit digital we've deeper a So cities stores and engagement into program.

bring covered. to store about new we've more our We're penetrate enabling program purchases healthy Starbucks where a which is into us the and seeing base XX% -- So users very repeat got of on Rewards strong that deeply.

store XX% good We of And into that new delivery. XXX then base. stand We're of you We over cover channel success out translate in the cities. seeing now delivery. in stores, X,XXX our

ticket, we're said, food And As and morning X% lunch a stronger attach. increasing, part we seeing that. very and seeing we're optimistic the sales so, delivery, about day through higher mix, of

lose continue going advantage on on focus of to gain to store accelerating to don't we're for And sight to growth. continue the And store first-mover then, us growth. need just our

four a coffee that in compared continue to per indicate, in in terms person, as cups of the there is see of opportunity. lot Clearly, at sits the opportunity a U.S. we area. we which now China, per XXX to new less consumption that this stores year, than the huge is And that returns in cultivate,

the and Alliance. us China. Japan opportunity China. has the other in for one the We're Coffee I'll today, spent Global stop, in shared, Kevin that just here we days, Alliance And about then, talking the And Coffee Global as then, is in thing, last few

across we've And out platforms. announced August. We're for in that rolling

walked XX We have launched. we've Starbucks products presence stunning. We the in absolutely aisle, is that over Shanghai. The

foodservice universities, office, we on in opportunity to we big a the in on focus as then, is on focus we going as be And in and hotels. focus as five-star

optimistic very about we're So China.

question of comes question. with Your John your from with Please the next JPMorgan. line proceed Ivankoe

Yeah. you. Hi. Thank

Global stay to First, actually on the I'm Alliance. just Coffee going

to in you XXXX. that in I a think, there's some relative happened reduction X% revenue things to what said, X%

And I be seem that was being at that made you after just hoping they were buyback, could talk comments just about all. accretion interesting that. on to we're made the just

thought? profitability a that have think to as fiscal from And if relative overall with XXXX I'll in then, was not why, couple we a what segment about originally and follow-ups. Just you perspective line

Pat, why if that, you don't could? you take

John, between growth Certainly, what highlight difference I'd like so fiscal our revenue our is driving to model. growth the what and total is guidance long-term for XXXX,

guided we've So X%. to X% a range of to

growth point extends how percentage Our interest its One that is long-term to things. X%. one difference fiscal is XXXX. fiscal ownership two is XXXX, into with then, of impact attributable sale and to model X% our in That Thailand in the

of Channel more decline Development XXXX, onset into But think Global is, XXXX, expecting fiscal to what this and we're question, we directly from is though of the the Alliance. way I even in then lapped, the by Coffee revenue second fiscal your had a

mask non-recurring. of growth they temporary in And activities, the transition that fiscal some profile our fiscal tend were business for There Development And XXXX. business XXXX. to Channel are

customer products preparation primarily addition in some of sales in into direct to elevated their fulfilment relate to, were Nestlé what fiscal for they Tazo-branded fell inventory orders, XXXX. to And sales final lapping of that some

temporary you as rate growth Channel X% total we normalize these Development in change to for when for to items well X%. ownership normalized So, a get in Thailand, back the revenue and as transition of

relation and then revenue What of ongoing an term Channel longer to given the X% specifically Development, adjusted of of in that growth I end X% market highlight rate expect we of at are to would is international with to which to range accelerated of bottom an it like in X% to expansion. X% guiding way be our is what X% near-term X% expect would pace we to that, the by to X%, we

that for is that you the our out acceleration happening and realized it's what the in we Channel of of So also it's the into the Number shape see particularly, growth unusual fiscal overlapping combination really benefits XXXX. Development further one, impacts that But we a happening international segment the future. revenue fact some market see things. how

outlook John, for in Coffee fiscal and on you want kind the international what XXXX? to just comment fiscal on we market expansion Global Alliance, XXXX, of achieved the

Yeah.

So out happened the work the the as this U.S. market some we Coffee business. Global we've and established is between rolled most Nestlé Alliance. had us -- Clearly, that's great

CPG had was the rest foodservice smaller then a the to business as of world We it in and channels. Europe, relates Greenfield but

XXXX. of our we're XX markets spring now around We world. in having to and Kevin running, have the products XX the over markets by available And as highlighted, on way up

launched strong we've We're Nespresso good Particularly, work uptick XX the across and platforms. that SKUs seeing different we've four got done with paying very dividends. We've the capsules. growth for Nespresso that Starbucks-branded is

platform. very We're uptick also Dolce Gusto, the with strong good, in Gusto seeing Dolce

in we're just that the optimistic U.S. the very world, not opportunity So around exists about single-serve the

earned in and We launched about as -- that the of made XX.X did other four markets. that have flavors a meaningful and we we billion launch we to in creamers U.S. impressions August taking that We announcement. anticipate

the excitement. a market then we're lot to to consumer of is continue of a And there Alliance. going lot drive meaningful So Global about this Coffee within and excitement innovation

And been that continue. having create at bring the we've X.X over think able days both discussions we're product to able I which that's speed big the with optimistic and been the last been opportunity Nestlé the we've that very the going platforms, speed the team been into of markets here forward. the we've at going to a piece to about which those at is the

And Alliance. accretion John the EPS in believe second Coffee part your to a to relation from I question the Global there was

XXXX that which had completed even just the in remain beneficial And accretive that it upfront basis. to the than Global of to And EPS after-tax that impact funded to that -- revenue became transaction. Coffee a is with will fiscal the we from we Nestlé. cash originally I faster cumulative that were continue repurchases decline we reaffirm, EPS expect continue on when expected mentioned with we payment share that expect the accretive Alliance includes So

of line next your Please comes Your question. William question Sharon Zackfia the Blair. with from with proceed

think actually are information I pretty not that about Good the know you've you've talked you one's rewards if to the questions, grow number in past and now Hi. but U.S? people afternoon. yet past. two had who I'm just on digital the I in I quick. given the curious members in that have continues

And then particularly. confused know margin I'm secondarily on the I guess, stabilized. outlook, Americas the I on little a margin there has the

So the breakage. card gift the you change benefit had some from in

we or well? I'm expect Americas in just whether So stabilize not wondering should or XXXX to not as margins

take registered Roz, Roz? Sharon. if customers don't the could? Sharon you don't So first question why digitally And the Pat that the take on asked. you Thanks, you why then question margin

Great. Thank you.

continues as these seen low-frequency Starbucks occasional redemption they've impacting by multiple customers to they're more overall us also provided recent members to tier the customers members. choices heard those redemption volume. majority referred this the our just portion we've of Rewards to that growth. quarters new that first Sol tiers registered our tiers. we've in The that of seen The on you've customers the redemption of seen our a we've all, And we've the that's XXX-Star driving significant and the active shifted not digitally seen embraced see

Rewards about good now member Actually members. right And Starbucks that million million. space. is seeing number of that So customers growth that our seen roughly in we've again in XX movement to XX% there XX.X we're acceleration

peak I'll at Rewards The we the time to occasional across seeing morning and dayparts. is Starbucks is continue other in that customer frame all in afternoons. thing mention coming peak actually in grow introducing we're That to we're that growth our

a we are the seeing dayparts. so all And through probably lift

that so multitiers program. happening work new adding to is by the that's the And the

one margin, what are first question your And fiscal want to with margin each Sharon then respect in improvement modest that I of our is on clarify XXXX. segments expecting we to across

Americas generally. the Americas and asked on just breakage then you about margin Specifically

with So I want happening to clarify first breakage. what's

an XXXX. And the operating of on level. P&L card interest impact geography of results EPS. As and outside starting one we does fiscal segment at in recognition have below not line a quarter from adopted income stored standard was of other that impact this to to a the revenue the that line mostly revenue reclassify It's accounting reminder that matter segment new breakage first value in

full basis, and in fiscal in It's about On of non-GAAP in did just margin accounted was sales. comp clarify have year sales. change the accounting due in to basis new beneficial also QX another for a comp But that to revenue XX want driver XXXX is breakage stores seasonality. points operating to greatest the not a and impact I impact after

We benefit will will in first be point lap of at impact this XXXX margin already fiscal our the operating quarter which embedded the base. revenue to in our and

of in fiscal performance driver not will be margin XXXX. So breakage a

the a function savings that investments to line. expecting, that we're to continue will that And modest the as drive there X% that's make sufficient XXXX margin Americas cost that we the the significant offset leverage X% top in range that fiscal our particularly chain, fiscal like we're looking be the be in well XXXX. we're growth guiding to We as in the that other the in do supply and to of the will segments comp to in expect expect a that of from sales expansion

from will lap in the say fourth in the quarter. the I of fiscal that XXXX Americas -- the leadership conference will margin also benefit XXXX

be we see flattish it across in shape a think that performance QX what then means modest the QX, improvement fourth improvement the quarter. probably and margin our you QX. in So about very that will as will of is margin in robust see and We'll the year,

Your with next of question Securities. your Matthew question. with comes Guggenheim the proceed line Please DiFrisco from

brand the Thank of little in maybe out little of it and are XX% that million the you. With board had follow-up the there you demographic seeing a couple hitting into theories max see growth, I decelerate as dig past? its that of XX.X on was there I a there broader the brand. than you you bit respect some just coming on bit the can a a of incremental and position when last Sharon's did perhaps that -- have sort also. know were in premium years a to

lower overall incomes to you're just you the than as tiered I'm up curious as you program the maybe to seeing the better opened had above more it you're you far past? as rewards your a broader maybe change also value to perception. -- has maybe maybe I that resonating a people tent know the and demographic expanding in include value a tier

Roz, and for why that ahead you take don't us? go

Kevin. Okay, great. Thanks,

attracted is at a broader we are are moment. array what seeing that are So, of we Starbucks that customers the to seeing

are In understand to program. the of less to of program, know point. this they or they're beverage to kind at value we -- I that qualifying in if non-value, attracted the the food have you their terms attracted we demographic that But data don't the tell will

and time, we're we their like that with ticket to the customer Happy this by encouraged things attraction Hour of this day. and the to At time also seeing are

redemption But a level. expand to encouraged we're add the of Starbucks Rewards the we'll did more so the customer. pleased these And the of right other layers we can are we to that learn excitement with now, we're so, Starbucks moving And broader that just customers share we that that we as you. brand

So, demographics we'll on you more but we the come those have to information with on that, back right customers. now don't

other Let Starbucks sharpen believe experiences. from comment that strength things all Scale Growth all and on add focus us has brand. opportunities of me at we differentiate Starbucks a to our really just those enabled on other the really the

an on our executed in has high. the we've to the customer focus time driven focus focus the scores put have connection on stores, that we experience that and the this innovation, we've we've on digital our all discipline So put against beverage put customer the customer relationships fact with

and growing. strong The is and brand healthy

we're things And that that And us things our think many transaction from momentum who Starbucks so, seeing the traffic across in and reason us proudly that has the ways many each also customers wear the digitally. aspects amplified Starbucks. seeing why the that comp others differentiate growth, ways is we're day. energy enabled apron significant growth it's our is by our that and in put And candidly marketplace. most create all more every Scale behind the I helping importantly green matter at seeing really in experience us to all Growth for our agenda But the we're really and of both partners,

The last UBS. question question. proceed Please from Dennis with with today your Geiger comes

Thanks the question. Great. for

as U.S. bit a the system, lot the where just those that across relatively a experience you. about about opportunity And here, is you'd about the but guess winning think if just you on be could how guess in-store looking the of and feel anything incremental as experience? Thank I much on digital, similarly, characterize of you Nitro about in But wanted beverage, drivers key you that in-store say quickly is looking go just touch ahead? pipeline you How new Just beverage that'd there. as incremental there opportunity with great? talked pipeline. well commentary from digital leverage more And of some about Obviously that kind I specifically, to you ahead, the

you That's for great. why us? Roz, don't that take

we in-store There's and been digital our we've with feel doing what the confident Sure. with experience doing work why beverage couple about engagement. future a innovation, reasons, we've been the our in

team things behind all, these did of a First we of fiscal quarter in third 'XX. is we've work the works rollout the lot work in-store that year that done with around the

And a lot in 'XX. that so year we'll benefit fiscal from

as prep there test machine work mentioned Deep the Brew. our those inventory automation, Kevin significant we are of progress is applications and do fueling around the around a fuel backroom work And all food to that and Then items routines optimization. in learning

we work in that is that's process. feel about confident and So, ongoing already that

is in growth there at of combinations we In having new that year. Mastrena We beverage because, the been create have us opportunity, there. customers beverage but really Foam last equipment, addition It's to Cold cold. to not allowing beverage an Nitro introduced innovation, responding our only are innovation, terms to looking in having

us. our at cold iced our are and is So, if detail, coffee our well look doing Cold extremely which cold Refreshers, our you in Nitro Brew all our for teas, sales

And so be that will innovation ongoing.

from we to then, the base, customer point of digital them. more we the And been our relationships, had the learn about the marketing better

our And become personalized so, driving you retention with help that see stores. our and more in marketing frequency will and will

there feel initiatives be we areas. three the important those is done there's continue in for three more So, to those in on to because pathway like so we'll more come us we still those areas,

was now the That turn last over Kevin remarks. our question will for to today. I closing Johnson call

Hector. Thanks,

our all to we encouragement call, how As to over we've today's undertaken we've significant This sharpen that support the investment Together, quarters. as performance. I the focus the sharing each appreciate ahead company be possible and know XXX,XXX I serve forward year and progress Starbucks streamline efforts every would community from you. partners the you much operating we talented improvements and our results close in great to look and to in Thank our we past the and drive received want future to not year, without this a the privilege day. have

Coffee Call. Conference XXXX Starbucks Fiscal Fourth Company's Quarter concludes Year and This

disconnect. now may You