Starbucks (SBUX) 27 Jan 212021 Q1 Earnings call transcript

Good afternoon, my name is Hector, and I will be your conference operator today. I would like to welcome everyone to Starbucks Coffee Company's Conference Call. All lines have been placed on mute to prevent any background noise. After a brief introduction, we'll go directly to question-and-answer session. [Operator Instructions] I would like to turn the call over now to Durga Doraisamy, Vice President, Investor Relations.

your begin now may conference. You

Starbucks impairment statements. our to statements annual our costs, the statements These update Form & by and Good are in strategic by these including Finance information. last Ruggeri, CFO. today Today's Americas; And results Culver, excluded differ and conference our statements or for related and and such Roz include Development led us uncertainties for transaction quarterly Q&A, be Chief you report discuss fiscal considered conjunction any risk these and afternoon the Coffee, discussion various and Tea Channel Senior results filings This Group and Form Rachel report items. in release risks our joined on cause on is from President, Grismer, International, be and materially Cocoa. President, factor several with Any John results. Brewer, in call actual present everyone to actions XXXX Group discussions first forward-looking joining year Operating no for to are with President in our XX-Q. will forward-looking GAAP thank cautionary President, quarter Americas. XX-K statements, to Pat and Vice Also be and should XXXX results. Johnson, non-GAAP subject restructuring of and include could Kevin obligation other integration charges, Global assumes will including items our SEC; that we will which CEO; from fiscal Officer to earnings items

our will investor.starbucks.com our their webcast financial conference measures archive today's refer being to mentioned call This to as the XX, a and on GAAP is with reconciliation through non-GAAP call, measures non-GAAP XXXX. certain Friday, website financial website measures February corresponding be of their measures. these available as well in GAAP webcast find of For corresponding please an at

fiscal call year scheduled April over please Finally, calendar the purposes, your tentatively call for XXth. earnings planning now Tuesday, XXXX our quarter I turn will to Kevin. has second been note that for

and afternoon you us today. good Well, joining thank for

clearly, our a a I of been past all am about trying bit at year, I times on lot world this our three a recovery around fundamental lot of support and of track and lot, situation our an closed other guided enable have operate to resources, The safely proud unprecedentedly caring for to in while and changing at the met complex were global through fragile, in global we linear conditions in around virus approach and and of with Starbucks a all society when agility real-time to As partners of have There are in three Since being pandemic, That important I'm Conference, ahead we protocols iterate Starbucks' humanity we partners for well while in a our our say end decision reflect responsible business not customers recovery our change on and optimistic monitor share because to ability Investor because line then this we holds U.S. this the QX. events month, promise continues of just set equipped navigated to store role And for as in our equitable that our way, that has QX, XXX,XXX every slightly Starbucks we expectations market start our operationalized protect the and making quick and China pandemic to from for year process, the with for people ever inclusive full a talked with we that across of feel the tools, this our our week healing about level. confident our has me need and coronavirus. long-term when a advancing Biannual temporarily Last I sales realized this to expectations. an principles, positive as journey can and to quarter's that world. a It remain communities the achieve we as to takeaways store-by-store, each healing. the establish been our to Starbucks' supporting partners adapt was and which us This discussion tremendous believe together more want well. track shared the a and this outlook. stores and resilience. served from have ago bringing play in connected, time with our quickly year store customers I results. of recovered principles been by today, leaves one We business navigating China principles to and by world.

years at established capital and uses, has sharpened focus, three Growth enhanced mindset unleashed allocate highest our execution, to and agenda growth ago a Starbucks. disciplined ability throughout that we its our Scale almost First, enabled best to our

Second, and to our an that rapidly positions our agenda customer our we behaviors speed future store strengthened third, and for well position. competitive agility changing for innovation consumer and growth. have us experience for adapt has to And enabled us transformation

resilient belief with that reinforce our share and is results you ever. to want more QX stronger I that than Now, Starbucks from

me in Let the begin U.S.

in minus latter sales cases our adapted approximately building states. business operations ended quarter's mid-quarter, go stores from our and Even U.S. as that number comp prior by Our agenda, first pandemic-related momentum to sales and offer of significantly XX% partners saw X%. rapidly recovery. we a prior quarter. regulatory Underpinned innovation in-store quarter and reduced alignment quarter our QX, a comparable offering QX, to with strong improved of the our apron in delivered the full ability the X% U.S. When We improved to our October, building store principles comparable seating in minus store the the quarter on on with seating, our limited in disruption COVID-XX of offering with limited the half company-operated began in surge entered in phenomenal we fiscal over performance momentum U.S. across U.S., our of of grab to very with positive path holiday green we in adjusted the support requirements of stores XX% our powerful our seating.

QX. initiatives Their of QX fiscal with at Importantly have leaving business being times capabilities saw the innovation, U.S. that stop our familiar, adapted the home drive-thru, to a expand their and the and believe starting The visit confidence have in elevating in driving the I slight destination our locations QX, achieving some now growth. evolved it from than solid of delivery agenda; study and fundamental sales because out-the-window customer balance way XXXX; and curbside in convenient. further customer to experience, by stores reach, experience from a in to foundation Scale and boosting levels. evident to experience. drive-thru customer notable done elevating we we of driving relevant foundation that while unlock work They will increase targeted engagement. capacity for share the expand recovery our XXXX pre-pandemic advancing throughout to many laid our with QX. drove the enable at a from enhance beverage initiatives more fiscal Growth for driving digital QX, pickup, from or give half our These on our our three the business strengthening has the expanding realities. goals and Starbucks for was traffic safe, increasing initiatives home worth over drive-thrus positive destination is for comps digital future delivered We improvement customers our throughput customer work net us our to are XX% in highlights results

industry-leading convenient, customer order tool be app to Our the and to way elevate a to an experience Starbucks. us mobile personalized safe, as continues for important

orders quarter, customers. mobile of U.S. are with pandemic, that represented our company-operated the before This initiatives from transactions resonating QX, in up clear evidence XX% providing XX%

beverage group in increased U.S. premium ticket and and combination than high levels We attach, continue average approximately XX% mix, by beverage growth to see an driven a drove customization all attachment, higher of of meaningfully order, food QX. increased ticket pre-pandemic all-time upsizing,

holiday new our such and as beverages Mocha in seasonal XX-year success excitement and joyful holiday apron marketing Starbucks creative partners customers Cream holiday cups, quarter's holiday last strong the amongst ritual. prelude a green with created beverage of a Brew's stores. with Cold combined This December into year, course, Irish our Cold familiar addition, favorite, holiday of In our Pumpkin Peppermint return we tremendous provided to drew our lineup the off lineup Brew. kicked Cream

delivering Latte, bakery Chocolate expectations cake driven as holiday positive and items resonate Cookie with of customers to outperformed by grandson's in course, continued Food the with Iced all growth. Brew Breakfast strength three Impossible beverages box. Cream cold Snowman in Mocha, breakfast Sweet and Cold and the Sandwich Chai Vanilla my Iced Our wraps, favorite year-on-year QX, by such our White led

we accelerating quarter. key the Finally, of digital highlight growth customer engagement, relationships saw customer of and a

for results foundation in fiscal a successful Starbucks phenomenal our strong XXXX Stars QX, launch beyond. of achieved Following QX, in Everyone providing and for Rewards in growth

and members in member record Rewards XX.X to base, directly we QX whom active X.X XX-day provide offers, Our increased communicate to million. Starbucks million by a personalized

activations, Starbucks widely that holiday say are the prior surpassed representing channels, that in increase bonds quarter happy environment. holiday Cards gifting success the Starbucks of Starbucks including current relative also to even available this Starbucks experience strong through of other the Cards a a year. our expectations. Card the digitally. created with base, XX% customer and program, stores gift the cornerstone our holiday are illustrates the exceeded of customers in Now, pre-COVID The favorite member to and distribution same emotional season, and relevance this result I'm we've for our our

in positive great year long-term grew way to the As in to in the our QX, which couple the activities one at months the store testament that growth did in Starbucks in market. new on quarter another to impressive pandemic rapid the U.S. of Building onset momentum China. in adapt most XX% in faced new XX the and outperforming a I'm Any the growth resilience the COVID-XX, as customers prior in were focusing a current pleased considering COVID changing recovery the up and continue members relationships we in digital the on growth engagement. conditions quarter, particularly in continued we new quarters, for cities our the we about We leadership milestone. customer XX are that we of development, last store of to remarkable customer suspended is comparable driver just Rewards XX% I particularly in these growth almost expansion second it, strong new Rewards off and cities new past team two stores new to X% Starbucks confidence XX% X,XXX sales is in company-operated that from and quarter, in in for that what market. China, demonstrating QX; of which of an will to XXX strong these move our from That quarter share the rapidly customer opened up the of store positive traffic beverage in U.S. innovation, lead the from stores results during the our underscores cities of months, our affinity experience, onset quite from active continued Starbucks. growth QX, with over crossed the and China We loyal development first which entered considering the performance headwind is delivered ability contributed at China. to of in on of surge net China. our delivered do the equates infections. China new to but while now a for XX% number opportunity before stores their last number so reacceleration stores U.S., store The our in look is quarter, you other start impressive stores of is the sales customers'

of customer as relationships the in the XX-day previous XX.X XX% the quarter. by evidenced year We million versus dramatically over Rewards members a QX, expand continue China in of to prior to program active growing increase Starbucks Rewards and the record digital through XX% number

the Starbucks year's year sales record also In Rewards last versus XX retail campaign addition, our grew we mini additional engagement launched app this record and and by set for night. achieved throughout single-day functionalities Member XX% and campaigns a sales apps frequency we which quarter. through Starbucks boosted our engagement members' member on and Double

premium stronger ordering up services the past store Chinese has products in coffee Starbucks' brand social Pay in the the media Order has grew across of most retail. as remained Starbucks share category. year number market over year. for more coffee quarter brand is in the is in in In In dollar of the XX% our package than Starbucks doubled entire Delivers demand Starbucks China, The of acting nearly the XXXX Nestlé Order Mobile away-from-home as our on Starbucks business. sales brand time mix one choice in about base driven and and in in say consumers' China first and coffee Starbucks retail specialty from across to through with significantly the and about we mainstream XX% coffee channels category XX%, the high, total Global as China. the talked available category, a partnership the remains business. twice The it, with proud China segment base record for first than last The Starbucks Channel Delivers availability Now. XX% boosting quarter Home brand share number growing last customer coffee from few our and The is of sales, company's leadership of And ahead to ever, Now nearly been our of Development the & on our Channel calendar brand of the in powerful is in environment with clear. up coffee current coffee fact, grow by the a finally, choices. fastest Starbucks the ever our At multiple hit engagement Mobile a U.S., of Alliance strategic Development Starbucks with market. outside coffee we category average. the XX% all saw one store value sales now with Coffee specialty finished position XX% secured comments a I'm continues quarter amplifier The that mobile in XX% has Starbucks our of Rewards Think

sales Coffee be travel, exceeded Ready-to-Drink products which Nitro softness Unsurprisingly, last with consumption coffee service expectations. and in number overall strength Home In to environment food well in PepsiCo entered one Ready-to-Drink introduction addition, U.S. quarter the our and in leisure the Coffee year, which presence four Nestlé, by Home in businesses. the in our with was With of new we Coffee offset Cold At to the the Global markets At in Ready-to-Drink years. our The just markets bringing Channels Starbucks Brew the through Alliance XX% business continues impacted workplace over in business. coffee current Starbucks are we partially with global Nestlé as partnership category was business innovation accelerated consumption and with of as proud XX pleased quarter. the our of alliance brand the in grew two Overall, of expansion through our

moment. our prepared to of to people others means human do celebrate, Starbucks can people, connect your of are the new beyond to And share recognizing powerful caring than we the positive version customers, to who in to anniversary has this XX again know It face-to-face to our that the a and once heal, here year, the created smile, full our be we we described the step is our was of we transform partners vaccinate in to growth, and and reality are iconic humanity. and a Starbucks for company fully courage Starbucks and a ingredient my company communities partners reflect, purpose And experience that other, we new Starbucks communities, work for are who celebrate ever, the our to this am of Starbucks handcrafted the a adapt accelerating connection, share, experiences and human and to what with and brought same way, about my you. world the where built only am as This Starbucks, around global life close Now, for thank great celebrate where and third belong, pandemic, welcome. showing and around a markets want perspective rapidly XXth call are grounded I a is more to a grateful that future if before partners, culture. welcoming adventure, And customers, ideas be compassion I and necessary as are to mission partners. profit. each our those Starbucks, for reconnection be moment, optimistic sharing innovation, are every for connection brings to want where this bringing creating human to important of that our the through up personal what and in company mission, our on world, to you it part Starbucks far proud those again that this a our showing customers resilient, one future and for part for for a of committed impact all everything to XXXX, for once to people bright our into I all partner environment billions is all goes say another, as stronger for a new as company values tirelessly touch. uplift great to shared together navigating of. to moment for a our brief and our a partners, I will I reconnection the place to years, Starbucks beverage, since hand Pat, the and over place most with pursuit by even Throughout

through two Pat's growth amazing through the you and close to wish has with unlocking Grismer. I sharing and want to in unprecedented results, us retire, considerable before the transformative you shareholder legacy an change entire chapter. for I past prepare in is by leaving. want role and he next leadership partnership at an helped He sincere the value pace you very my lasting team Starbucks as has gratitude over Pat he Pat to appreciate Now, his thank years. Starbucks QX and with time best your walks at in the I lead instrumental he played our you

leading her thank days Starbucks are will to end your Officer across partnering excited of very Rachel as we're many Roz, America. on the leadership contribute as She the the leaving expected closely company the XX-year at positioned Chief hands a company. valuable traded and success You of in accepted at Rachel worked Chief ahead. Officer the I years, Executive with many role, a our and the another as disclosed congratulations. contributions may to all want leadership Starbucks' partner, Financial for is in forward partner is the publicly leave an your every look I opportunity incredibly the mantle February finance Xst. incredible of her that to our behalf want I to you, you February for who leadership grateful Further, in years be Having team. share In of you well for to together next entire great operations team, lead seen new assume Ruggeri, function Roz in for our her as has on today, over role the you executive be you and have meantime, wish and on

as years what a leadership to of Ruggeri immensely as very partners three your Starbucks, Pat I strong and my proud bench Rossann that, the America Officer. I me, President Rachel authenticity, of a and our we be and than organization, Operating been we Brady flatten at of future. of phase Rossann, next Executive am thank next about we now on on these Officer, our And CFO Vice talented have Starbucks reporting generation our With their and call I'd many will the company. of success Rachel, passion, of who succeeding with Pat? not to of Chief Pat. previously our Marketing am well-positioned Retail for leaders these years over XX of Brewer, the like building the and represent to experience have Chief Williams, and responsibilities Combined, have support for together. now will veterans all shifts, for beat. taking as Starbucks' I to growth directly business President North are more excited Brady turn miss Starbucks will

and good afternoon you, everyone. Kevin Thank

as in As business primarily XXXX first year, despite as prior outperformed year. these Kevin resilience and I detail $X.XX into with non-GAAP share down level full GAAP greater in performance. shared, fiscal $X.XX, EPS Starbucks from billion to some margin by reported we with costs QX our $X.X I that of results was guidance perspective from QX the from driven later. year. of are followed global of recovery. new our segment, margin analysis unprecedented we our again fiscal lingering prior demonstrating consolidated take have introduced guidance during outlook pleased disruption expected will down the our in start X% revenue to the declined last but pandemic. discuss QX the will very quarterly the impact we for business the improvements range than I was due fiscal performance pandemic, financial you the then by lower better and than sequential it higher on XXXX meaningful operating will from through an year, the provided times. our the benefited in $X.XX EPS QX QX the $X.XX, of our QX, earnings impairment of prior EPS in range than on also expected ongoing by call, primarily restructuring from

pandemic. and lower a our than sales product in as of prior X% to well as sales as licensees revenues primarily X% to delivered store $X.X in the segment the comparable royalty from of decline Americas due billion Our a revenue result year, QX, lower

quarter store comparable As in in to Kevin in mentioned, sequential in minus minus QX. the we sales U.S., X% quarterly prior X% from the saw improvement continued

QX, as minus operating quarter modestly the minus October December to store improved primarily due sales X% which September. respectively, and mobility. minus customer entered several were X% in from comparable progressed, Then, across states, U.S. X% in minus impacted restrictions and X% we November to As pandemic-related

As Kevin down store of beginning base from than of the also U.S. approximately end more seating quarter. at the our of was XX% offering the XX% the limited noted, quarter, company-operated at

growth our quite as in consolidation performance benefits. the well So, costs impacts order shift of increasing well sales improvement as sales of by impact in non-GAAP contracted we in margin store offset represented primarily wages operating to from prior pleased margin XX.X%. efficiency year points from in retail labor this pricing. sales by a QX restrictions. Notably, comparable partially non-GAAP with are These quarter's to of light previous operating significant were due these and basis partner improved including part QX XXX COVID-XX incurred the the Americas XX.X%, additional as as deleverage driven and mix and

QX. Moving on $X.X of delivered in to revenue International billion International, the segment

in On October. sales efficiency. result XXX partially International's to mainly represented non-GAAP operating the previous margin a quarter's of by of as the operating only as to the reflecting strength recovered and of fastest slightly aside net improvement licensees Normalizing Much outlook, prior the basis from our primarily the translation, VAT Americas, pandemic, of improvement percentage the substantially deleverage Development's just of like excluding in I a Alliance non-GAAP margin of the by excluding was due revenue Excluding related X% with XX.X% VAT China's due a in percentage impact offset exemption five to VAT segment's operating business. comparable brand QX improved margin decline to the COVID-XX driven very Channel decline non-GAAP China, in of well In shift was favorability our expanded slightly comparable calendar sales, royalties sales structural transition QX, VAT in points comparable quarter. five past store and store of X% XX% nearly resilience to store market. sales for year. activities, in from When these grew declined $XXX impact the the Channel of activities unfavorable segment's point QX, change QX, the relative margin transition a primarily the impact X% from benefit, Global by a our of the partially mid-Autumn each to basis excluding by including million In activities, on Development, including the X% a QX, the and due In festival Development's revenue when in VAT transition offset inclusive exemption and adverse for declined prior previous the of quarter even XX.X% for XX.X% positive X% points, benefited nearly expanded the offset international store points our Starbucks foodservice to XXX sales year, were when when the we Channel in strength benefit. an in a seasonal excluding related setting The our X% prior impact the in month, Global of December, October month's in flat of significant business, currency months by revenue from this XX XX.X%. COVID-XX the by XXXX basis Ready-to-Drink a the in driven XXX foreign impact XX% sales the primarily new that benefit our segment's product point benefit business. mainly up by line growth impact lower labor demonstrating as growing business. single-serve Coffee our of Alliance or operating when excluding the mentioned, related were a favorable year, to Coffee by negative X% from VAT China Ready-to-Drink over temporary end November growth

pricing year-over-year XX.X% Unsurprisingly, QX and partially QX, Finally, XX.X% in as growth wages by our as consolidated to QX. year-over-year, in operating the attributable XX.X% and for at benefits, much but well store deleverage reduction substantial non-GAAP a in the to improvement margin COVID-XX margin Americas. labor was from the in of offset due down level, efficiencies operating in from was sales

starting Moving the trade costs than GAAP to transformation higher to for our GAAP upper related our In EPS primarily fiscal guidance restructuring EPS. and our QX, two to expected things. than XXXX was end $X.XX reflecting lower upside of guidance This attributable was area on with range, initiative.

closures in in store. second, First, per average a a reduction cost of timing store future the closed and to quarters restructuring shift

As of raising of lower a to restructuring guidance costs year range expect of are full the approximately $X.XX XXXX inclusive $X.XX XXrd to $X.XX week. for $X.XX GAAP by these we we a to range fiscal to $X.XX new EPS sustain, both from $X.XX, our

moving EPS guidance. to non-GAAP Now,

strong start as non-GAAP QX combined course, disruptions. with exceed the our currency evidenced waves infections any provides Our COVID-XX barring and the EPS significant of economic to foreign from potential have sustained major our optimism any tailwind new of to guidance full a and year we year results that in translation

given guidance reaffirm extra inclusive EPS non-GAAP EPS fiscal again, better in full for are However, with setting guidance with the our we earnings Therefore, range go to that three guidance results. $X.XX year XXXX quarter pandemic, we to continuing comprehensive provide we time visibility the year to we're including of is report, quarters much second mentioned, from aside where I it and to at we'll by $X.XX, approximately full $X.XX update other updated considering fiscal in the to all year XXXX GAAP which our just volatility see the a fiscal believe for have prudent of week. now

selected protocols. customer for to a COVID-XX recovery the trends infections sales full material a provide growth U.S. store the sales guidance our to Then, month of we and business we COVID-XX U.S. the achieve of two-quarter of as store with outlook impacts metrics expect U.S., lag beyond the evidence our overall line month margin marked previous improvement a store quarter. impact corresponding comparable that further provide before visibility approximately a In sales In in in our seeing expect to selected however adverse end second China, we for representing QX will wave to of in X% is with of report would to we expect are see we by the March, provinces X% This better which lap approximately decline operating and consistent mobility expectations. given recovery We another QX of XX% our for comparable of X% December's from recovery. January, that decline. in we full near-term with

year. we see EPS, our our normal XXXX, unchanged recovery fiscal XXXX U.S. in non-GAAP has basis, last To material basis I started will higher this pace delighted quarters for rest clear, EPS continue of decline the GAAP we with in non-GAAP in significant we nearly just the to of includes our for that are QX on provided $X.XX. expecting we the substantially store we from what current the and equate fiscal with $X.XX the that the seasonality QX expect sales growth the perspective report. second previously of estimates of and to are On growth impacts progresses, except in our it From significant earnings we QX of will move sales as recovered, quarter our roughly momentum in margin summarize, lap COVID-XX segments to margin our as year a for reflect reflecting comparable as track a to is growth third full on This two flat February our fourth $X.XX the to compound the months comparing to one-year would QX, report X% in fiscal in these of To addition, the meaningfully range metrics store China of the and it operating approximately business and month deliver business remainder our fully QX. we comparable These recover QX. XXXX a and week quarter return communicated is and growth adverse XXX% sales recent fiscal that quarter, of XXXX $X.XX as effects comparable retail the store expectation market in In China. as of experiencing very through in store January guidance communicated. estimates COVID-related the the quarters are volatility two-year Combining improvement anniversary our and than and an EPS to we holiday-driven yielding business March. range be although the lapping closures EPS of the two first through quarterly that items, to EPS the in second algorithm provides long-term GAAP well of for

result, critical confident our business in my continue to express they that apron strength in to a our of durability the partners our play recovery. and role green we remain As to for the of our brand the overall model. want growth appreciation I

partner Rachel and you. Ruggeri, past to I senior I team. I been Before I be considerable the key like the few the her to Kevin this thrilled to member and I'd share has I our ensure honor an over team a been am would Rachel? of to a pass what like accomplished to have of CFO partnering years. on invite finance words call. two to Rachel Starbucks a shareholder Starbucks to transition team. proud and as am Thank a conclude, thank we've unlock smooth value and to baton a It

speaking will to forward operator over financial globe joined the to focus Operator? I growth and with working Thank the look that, humbled and around you of very And soon. Kevin, at And have discipline. I look unlock assume today, to executive Officer I'm XX better our today's has Starbucks forward long-term turn the In session. much and begin to Chief company, honored that who of positioned Starbucks. analysts investors growth been I with our years you, to team, our with never my to the us Q&A Financial leadership to and partners role the call course with and for Pat. with

John comes Glass your Please you. Thank from Instructions] with proceed Your Morgan [Operator with Stanley. question question. first

kind traffic gone much to I fallen seen where and in Good and we or just very all much, decline check so And a new as think traffic recovers but comp to benefit dynamic of Roz traffic maybe there quarters? outperformance bundling those has growth much Pat think benefit we the the programs you. averages benefited? or check maybe even about ventures. do on that has luck we your chance that over think that How just or or this Kevin continue how on is check to how to the on -- about has dynamic basis? margin think never is normalizes of between of comes or three, traffic and and in down congratulations there's Pat growth mean coming margin Thanks orders and miss sort -- get check you we've up. How do impact it time? traffic an Roz or Pat come you back, as do will

Kevin. Yes John, this is

perspective a that. Let share me on

impact multiple customers beverages, groups items traffic than the in big I customers world, positive and I I going First than into said transactions is our more we this very, purchasing multiple when reason continue food is on ticket food we don't for as to which and for used certainly, -- down and do it actually vaccinations ticket past, stores, in is we're recovered. there's as come -- think seating ticket. gotten will premium reopening is larger of very as do I are period, a think increase and think ordering That the but I beverages, through group out of that up. grab was higher while propagate I Customers to I convenient in more going looking ticket why around think to be start degree attach, experiences. we familiar and safe, for in see went the it go of and they a have long-term have think all, think are to are coming normalize, this higher

around how traffic want world, any the add get that's vaccinations school that just to unfold people relates function let that more me and how of if ask and to normal Now, back foot And additional takes? you more markets if quickly patterns as how Roz long U.S.? and I normal a work think it the in perspective patterns. different to on

higher couple shift in see beverages of in Kevin, cold Yes, beverage a here to of food couple There's things is And higher beverages. cold to we the attach. a the Kevin think mentioned, contributors. also the I attach, of the things. terms what do. There's about

ticket that you really than seen and markets, districts at our they higher decline our those coffee we've were and in grew carry than metro If think those and areas a single lower average about beverages, in business options. the transactions brewed central our range

that so plant-based is food with attached. what with improved and this doing in why So, and we're we're replacing innovation beverage that's that replacing cold beverages seeing

than confident that feel seen what that of past. innovations those we in are going higher to ticket so kinds we've And keep the

a part question? take second John's to want Pat, of

and work handheld not as levels doing improve well point, it's productivity, to to machines to deliver efficiency us we're there and levels believe times enhancements, of both deploy will engineering operational in or continue the we that that you. ticket as higher customer Yes. only of help how what new expect whether that that how new new margin some we to that ensure In relation be window, equipment, terms Thank reduce that achieve do labor. new initiatives throughput Kevin's capacity, ongoing over -- to some build benefit to of to will operating out But margin routines drive-thru, espresso some that we other of reversal normalize deploy behavior will to higher sustain POS ongoing growth anticipate the our time, as but our on the impact will highlight of and transaction ticket the adopted the some we margin linger, margin at our to we've just in benefit. or -- with increase that some operations of the our of but how ovens new to underway normalizes, store important some protocols of deployment

further benefit some will benefits activities margin new levels with the So, we've normalizes that even productivity sales of reverses that a some that recently. of margin drive as seen the underway number other unlock of here and there are and of activity

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

to directed afternoon best had good go. All, for just Roz we'll Roz. on news, Stars sad I see probably and it's and be the but a you on question Hi, congratulations to

Stars higher rolled of All, jump U.S. And the you All directly for pre-existing related upselling I that differ Starbucks out, them that how members elements clearly, members of, Stars is kind cohorts the the from you quantitative could of of how and in kind kind these and any, you've on As saw to quantify membership much you trended of for to level then potentially of mean, if that? Rewards? potentially how

Great. you, Thank of congratulations. note for Sharon, that

story removal the members. provide SFE, on had one bit most our is significant base, for we sections growing Starbucks we little behind and payment a we option customer knew Rewards just the for SFE that the was So, a in that of

it's saw growth the that our now So, active only we're members, the helping is all-time Kevin us mentioned. they convert. of but our highs behind Starbucks that highs, seeing Starbucks you as member not we're seeing surpassing Rewards as is numbers, and up percent tenders right $X.XX fuel And XX% in really reaching it's And pushing year-over-year. this Rewards well -- nearly pre-COVID million strong XX that's XX%

some with acquisitions Also downloads seeing we XX%. for Everyone. our our and So, Stars improvement app X% mobile plus are grew significant grew by quarter-over-quarter, too

brand of -- the expansion everything qualitatively rate. who The the so for apply terms really, in we if We any difference that there's coming just in. seeing how the in conversion we're love as a between you significant numbers there addressed more have with differ. we're customer just payment movement We're don't qualitative we how terms and just know seeing they of have significant some exact and we for just seeing asked concern SFE So, removal. our in an of

so see pleased we far. we're with So, what

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

everybody I also fact terms expansion funny lot drive-thru all those the comments the then drive-thrus and go that I wonder given Pat capacity come mean, in look has world capacity the about done and mid-XXXXs, for so by and best much post-vaccine a you've that of smoothing further I order much pretty and of when the Question Roz. to them seem the think how raised And about service AUVs, of look, full. think out you capacity that. And the after But basically now, talk reality. or going what you Thanks and their you and of reaching terms in the Starbucks on that? might after post-vaccine about coming your as you've Could Thanks. some to new mobile can talked those times we course, pay especially of back All And of levels. congrats about throughput, your a and on maximize roles. near growth working on with vaccine? to particularly bottlenecks, be drive-thru up the these utilization get I on in

Yes, And little the and we've Roz, on why maybe let I initiatives channels? different take that comment, I don't question. then you a of through throughput but go bit take you done why don't the I'll that to that increase

Sure.

right so drive-thru position So, around stores of we everything have drive-thru around have our the now. we're quite a we and that work experience happening in service as bit seeing the our of many

at all, of the me First our about most is When looked estate. drive-thru. model, let it we future productive real speak our

in the our the in see position, and that building drive-thrus forward States and number Southeast So, an the across of you'll increased Central go Southwest. we're United

have that So, the to we approaches drive-thru Also, drive-thru there grow. the two, productivity. in numbers are terms of three main enhance will

window First the on at all, that's optimize current that's times. And state. of increased and the to is focus out the looking standards driving our our operation

efficiently operate that ongoing all sure and so making that's can will And we work our the reinforcing that of in our do. store processes baristas that's

testing February. and handheld that our of stores end The we'll second which forward the now those some by includes have about have and POS, handheld drive-thru right solutions developing XXX stores is XXX POS and of with we we're piece drive-thru

also the XXX of the model the tech bringing solutions. and to bar point then And for to and that so concepts or make seating, productivity we addition, terms have units, drive-thru-only are adding side-by-side that a We those improvement stores future through the our footprint. to no small And situated, orders single drive-thru handoff. of drives have then removing consolidation meeting targeting that we're we're new that bump an the piece, from call issues And and our easily either and stores replacement. other that also managed of pastry in constraint there's more the very getting in design on things are lanes final sales engine like the case drive-thru things renovation

unlock got So, we've the full drive-thru. for work considerable this it's in area potential -- to

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

Hi, much. like I thank pivot that actually from very to you would question.

that you sneak obviously, at I it XX%, labor In would the set, store. in words, considering can percent on some models if there kind for the as do do labor by think think Thanks. increase by have overall increase within that the more late-COVID are years. labor the even that have have the increased basis, of sense area, transactions of rebuilding we transactions how hours And do down isn't That's other that seating, or of things then stores possible first drive-thru, should trade of not usage, to that like by the a of of the is can out ticket, be? this for even throughput possibility consumer have on a to question. Do you type variable the all that make the which terms a should productive? presumably you via even are In relocation opportunities basis about XX% the could whether you of of a drive-thru a if down know, hours, stores you maybe cohort secondly, post-COVID that

question and that John Roz, asked. you why that the will Pat John. take second asked, on then he first don't question Thanks follow-up the

the Thanks John. Yes, question. for

and we're inside everything that can the the at to of that we building. So, have looking not may of models on productivity drive-thru, thinking a do

that productivity processes new deep within -- next equipment It's store. that's coffee As that also Pat And ovens improving we to times and have this also also multiple us work us that improved and our warming brew the the espresso we're in then apply we about and we store improvements. our to have and is work the that actually deep standard talk two, important to doing with AI and a have our the our those offerings. have with brew much allows and operational allows generation faster pool machine an mentioned,

next there's work over So, the our seated here. And you'll out roll that's quarters happening considerable Pat? cafe in those things stores. several see

flow his variable And half John, order regarding focus significant expect that's the of sales question middle as we to as what sales target we and sales the and of future derive fixed continued in on through by year. what on fully make in continue we And leverage then back very growth on P&L recovery variable even on in through investments unlock approximate an as that labor. new growth into way And particularly that opportunity, we to your XX% what flow expect those we leverage important includes sales. comes to the as variable of back we meaningful labor, with

fixed that in terms how a component importantly, is cost But of that operate So, is there variable it a portion inclusive of fair is these total embedded of our we that that labor stores. in calculation. labor is acknowledges there structure

So, growth. as sales we the recover that build investments sales additional a of further future offset impact expansion point, anticipate helps we're the that as from consequence and leverage to unlock margin we making of to

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

function that, again, of are maybe of comp but think unit much good, my of bet X% in strong, please. a the Great. little even could the for bit Obviously, which where growth. I and and you related X% about Thank context you. flat, very if comp, just wondering from about would versus talk this opening And look Could I certainly potentially how wanted and economics XX% growth, if talk competition, -- China a XX% to how past, -- was you're especially that you've you ago, ask unit considering was much even down stores that and of a they cannibalization I and will? new to about China, in given strong you're less comp, Year were. kind that now you maybe be of very comps I also comp new for own slower intentionally back, cannibalization, if less ex sort X% and very unit competition. still

of So, operational just environment understand look the like what and sort competitive trying to now?

Pat, the in on go outlined the in thanks Maybe, about bit continue drive reinforce that John, happening a of how model to Sara, growth for for talk you growth and China new we what's store kind China. the view And let's I'll can Day to at question. little Investor our Pat have December. China long-term then we

that about the topline to stores is remarkable we're that operating. be Sara. Okay. COVID proud has acceleration basically to very to current long-term comp, and year. for we're growth going and new of an rate given the the to XXX opportunity to we're XX% and growth line quarter question, really seeing current the continued and the recover we place And throughout continue take deliver done that in is work of recovery and substantially optimistic fiscal in of this Thanks the the that environment clearly, situation team expectations market for navigate a quarter the in in very the X% China surge the with And our

new continue Our very stores to well. perform

have a hit and stores nine we'll on comments, XX different a we months COVID with growth acceleration is this as opening opened this the and in performance cities Kevin the uptick growth really the but XX% I'm navigated the store the also Now last said, a last growth slow or We're the total during year beginning digital of where this XX sorry, to is As store stores we halted the footprint. cities last his time -- piece And navigate. the XX piece We're I pandemic down strong expand quarter continue all XXX bit in XX of concept. then that we beyond over Starbucks expansion. and that And period little in we we fueling at digital opened and the and seeing stores, the crisis time. includes as

mobile then the increased XX% members, XX% order mix great. deliver XX% sales increase quarter, that's is XX% XX.X that's over previous clearly is actives XX-day XX% previous with which Our growth. the MOP strong at year And and and at million increase at over at

are sales year order what times mobile last total were time. two our at now they this So,

optimistic model So, the quarter guidance clearly environment. basis have second the delivering navigate a able for of pandemic And market. that been path very put year achieving the and feel and the in we that comp relative flat XXX% two has the look for we growth on forward the place delivering to a with

underpins put unit growth acknowledged in long-term, XXXX in raising tempered a perspective comp which couple transfer sales competition China. level for X% and just the what appeal about comp the how a unit that superior to intensified given China that X% returns this more at very of in say or the our that comes of aggressive in significant X% in of mentioned, to reasonable to outstanding guidance in updated the was said improvements no strong months believe we I to expectation. X%. all has to digital to our growth China to to recent as powerful X% and from pace is single-digits. with importantly, that consequence factors an Fast and brand development, X%. that broader on into relation where of the quite Sara of and time a that of unit the a Investor forward in John our we're new aggressive economy, that growth John of we pace you of ago, sales Day, our In mentioned, economy, Investor to build us range to we transfer. as thinking the Conference, material But delivers new had confidence Thanks X%, John development may And in low China at to the a X% our comp which we recall would resonated has China, delivered quarters, the guided competition, I change our for economics how we in context long-term customers capability range December

in the on And clear Sara the are this affinity of of Starbucks leader versus one would clear And And in Starbucks coffee two visitation across one beverages terms coffee brand -- in is first and the the and -- just brand we as in a as that consumers choice of the Kevin away-from-home in strength market. fact, coffee hit a prefer the of all We're terms well, the bit houses. add, things handcrafted for little matter customers. anybody in marketplace. I just else's of

strong So, in to we of standpoint a very in and challenges really very confidence us and for that facing we're consumer customer the a we're feel a emerge a strong future. that position the out perspective gives from way

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

And coffee. your to of at historically selling on a guys seeing of forward the unemployment, the you hear up lot minimum ongoing you have headlines coming role. one. guess you new therefore lots based hopefully which it But obviously, labor going look happy and topical, side have talk your Thank about managing ample congrats seems lately, on you labor My potentially very national is costs about I things, on elevated you. then opposing Walgreens, on labor like retirement talk and forces, on which wage implies efficiencies. the seems there's better. and when people to But Pat, congrats Rachel, the of to Starbucks Roz, now, be question Great. out

whether an offset know but Thank choice, you perspective? request labor menu provide a wondering employee how cost, to saves guys labor just availability you and the about think forces those in any maybe ability thoughts outlook? if I you. it's technology, pricing, terms from can you pressure, cost So, your your offsetting of employer of are of kind

thanks your Jeffrey for Yes, questions.

our apron off then fundamentally believe Let some customers. is to around the create investing me partners, green and numbers over kind Pat of it. our that look it our partners who But put I'll hand in to experience in lead with perspective we for

our know and first between the note. correlation we I traffic go and up. they up, we scores, goes customer that's when so our the a sales traffic our direct And position and scores And connection to job There's and customers customer increase. our and the in up go connection that in can partners thing best partners, investment think invest in put do our to them serving

why benefits fairly as went make in a significant here and U.S. us you that's we in year. this saw the wage increase fiscal So, into

one Second, to offset and some in ways two throughput. of we is then find productivity Number ways. help that just

right help design them easier foot Center, And a Center, improve lab, we the in the human-centered ovens, of with oftentimes it square world's ways it do Tryer kinds make downstairs to have has engineers do XX,XXX think that layout, best our of down what we partners, with Silicon how and work there do a to partners incubation have We Seattle. call here what's things the our Valley find of to it their some we the Tryer to for jobs. equipment, it with has -- productivity. their Oftentimes, can to store as

doing sensors And is be of of comes when through we in sensors or a Mastrena it of the maintained, forms examples can that so that Things doing in that machines Things in it's putting Mastrena one predict the machine needs and playing be And Mastrena deep of machines one it whether open shot by back espresso, to needs instrumented amount inventory fill the increase count our our And of with that. of other inventory that, automating Other partners tasks. role brew sends to out have administrative telemetry wage. machines helping and Internet calibrated. perhaps in we're every II data stores, partner got situation is are time And to helping learning, now some when have store and them. -- to a technology we is the our morning center. or the reduce that cleaned And -- offset that prevent data had our then where down. -- the to is management helps the automate we've we've stores those

customers. help human-centered to our And So, which automate more partners about administrative just the That in bit Pat beverages is thinking design by and the add little increase. best that. for partners handcrafted hand they we productivity stores. with the to that tasks to helps a connecting for offset the you get around the we do And create do help environment experience numerics I'll what technology provide to way then our that best,

in And X% important time U.S. Investor business. comp way significant of X% put what a numerical XX% raised margin XX%. to that the we we a entirely X%. at ago, to recently about terms, would What growth to investments X% a long-term X% these the we're back in to being investment. about that to And that of returns we our years in of operating a is continue by by brand, these And More the our our you, same our income in improved way a also our investments much sales with that expectation of Day, our leverage Thank expansion, sales we significant the Kevin. X% of partners, comps is to guided is the is for thinking that I part which investments, talked full -- couple to a in Investor revenue the U.S. at how range convert brand partners growth yielding expect will to I to get we're confidence led platforms. China, potential at fundamental does critically only making store to Starbucks what add on to investments but pays investments modest result in of in of relation the but the that not when investments our enables on for unlock annual that of our ability Day, digital of

a things mentioned, forms of combine to of margin our fundamental together, expansion as Kevin work leverage model. productivity investment further earnings growth all So, to with sales ongoing these that combined overall land part with the

proceed comes question from Cowen. question. Andrew with Please of line next with Charles Your your

you. Thank Great.

everyone Best echo ensure in in and with chapter Rachel, of Roz in wishes following very be that a you where in else will in continuity and and new Pat well. good Starbucks luck recovery? will be hands for your Roz. over business in the near-term XX the the and the capable Just question while to departing have your role be leaning as Kevin, for the Pat help going next that weeks, you coming been years, partners to are announcements

partner with Starbucks finance to business. Andrew, Yes, She fully speed this Rachel's things related to been our side, and on and driving the supporting organization and for question. up CFO the -- Certainly, Starbucks -- Rachel, thanks long-term is the a America. on all

Brewer organization, U.S. I'm confidence And Rossann American on two been Brady Roz's going great me. the Chief has there. over and North Rossann job years direct as take flatten -- a business great Marketing so I Brady's running our organization, doing And and Williams Officer. to to our that for now

think in talent generation gives and seeing leaders her in confidence leadership strong this; great a into CFO the what you're role North the of me So, knowledge is running America stepping of certainly I'll that and I confidence. and Starbucks. And very stability of Rachel we've the say and And got I've into stability roles Americas of the stepping global next these got bench great them. of

work in team transparency, a these And continue and together to based which team we leadership what is and have not I'm And And us very contribute, very both we also a now did over Rossann as team, a Roz but miss join the Rachel they beat been leadership won't a will teamwork. successors work the we so do on grateful I their and to on their built year. going on as executive do, grateful. great trust, they only and but leadership for roles. Brady Pat for team, certainly, I'm leaders to contribution, because

David comes Tarantino from Robert Baird. question your question. line W. next with Your of with Please proceed

of that outlook, you context performance unpack you is, afternoon. also, then to relative the drove the second that guess we you think were I that the can XXXX the give gave your Pat, earnings you good Pat at anticipated? factors And earlier is are you or My the quarter that you than to upside the perspective and part for than should whenever or benefits through to whether upside flowing example? how start greater question upside QX reflects in its And guidance? anticipated of the thinking us this the the on to in related maybe relative for guidance. Hi, what coming maybe could some about

David. Yes, thank you,

that that So, segment we we'd were approximately $X.XX $X.XX. performance, better was including benefits. very non-GAAP tax currency margins driven attributable Picking EPS apart $X.XX lower favorable favorability to to a discrete with pleased of with both the foreign our and $X.XX guidance than AX the attribute by business range about our expected our by which by driven is results other exceeding rate, the midpoint than expected translation, and International Americas and in unplanned remaining tax of

that expect As to of do to we balance performance, sustain year. the momentum business

could remarks, So, we it possible is we the ahead as I mentioned results deliver in believe year my prepared that that guidance full of given. we've

of hold year our to until in you and have our a will and what when with under at on the then appropriate we've point guidance, consider to that's what half update the delighted we much China, to not the volatility call thus a far. sales outlook non-GAAP decided our However, the and going hold full we of the are we to and three second we year to the achieving belt, close consider you X% growth that year U.S. have that seen our recovery business we've Even to considered environment. XX% for come more do. recent us seen It's time. year more accelerated our be very can half operating the that may way in sales make we're to volatility X% quarter the minus guidance where visibility back fully continued our better QX also in fiscal at by We've to what quarters go to And at full we've by for in quarter, seen recovery on chosen comparable from prudent the X% this well January, could expecting comp sales in be in with in December the when But minus a comp encouraged with business we've growth, business. we end that's the U.S. stage.

and we're it pandemic fact all ways, the and business we're business just matter our So, the add a that still is that's up, given be our our optimistic. in when our different built of impacting year resilience It's Again, every in at really the reflected pleased in you results. reason with into we've prudence. to but where there's

of with Our Geiger next question with comes line Please from question. proceed your UBS. Dennis the

and Great. your all on new new to Thanks and roles. congrats question for the opportunities

think strength you and food the in and about talked the attached. Roz, Kevin food For higher I

you that deemphasized focus felt food's it the on for specifically I thinking sales But Wondering could over several what maybe pretty about this comp generally maybe just it quarter, partnerships, a strong opportunity? like couple thinking customer in recently quarters and been and years -- contributor now. or going on you've you're opportunity to -- increased change few Whether here? bit last you're different little seen potential on food based change going behavior beverage. last last has does years a is the think how changing last from innovation, more in of all a leaning the been if does the -- anything forward, on it's the at food about bit how given it's forward

question. Yes, Dennis, thanks for your

business experience And every that what create strategically, me Let around very and create coffee it's customer beverages handcrafted around we for a our perspective. you we company; our new do add perspective. amplify we handcrafted beverage-first it's customer me by from experience, innovation, we each we around hand beverages, handcrafted And to beverage-first the has And personalized are I'll Dennis, then But and and that that talk are in -- understanding a relationships. to beverage let Roz, the customer that's the more beverages. been bit that tea. share around around been we've it's why experience of we are U.S. focusing important around is company, in we that driving. growth a about digital relevant innovation, it's those And and

lot, significant And differentiator because focus it that talk for is lot, at we what a is, Starbucks. on so the a a that day, the of we end about that

most be and drive food so attach the important then foot not nothing and our the beverage on to for partners is and in we then those beverages through Starbucks food's fact differentiate personally, innovate thing relevant but very we and Now, front and we're those food. our and clear, then strategically, -- then stores, handcraft attach platforms and every customer, each that important, the

with if food. in and done very in both Now, behavior were most that -- have that teams be to I And is when about been the the we menu, our to over in shift beverage shift years thoughtful have that to is we we parts the plant-based. attach relevant R&D is how sell. and this food, whole dominant and the to day what a And beverages to consumer say the food phenomenal probably shift a job they've the

the sort in all the On the on proteins more And what beverage alternative side, to a in that food when menu. and in side, that seeing more -- XXX% oat the like milk, have our Seattle done things store this you food almond in important. of And whether our area is the milk, of plant-based see Starbucks why with area Sausage and we've you're things introduced test here we here We use we've it's create Breakfast we've all plant-based then milks, store. test soy that's Centre fact, Support in Tryer that innovate we the in milk, Sandwich Impossible food menu. gone and we one as Center,

to is the highlight I there So, in number if would food, consumer I preferences at think you, a additional think about important I some the shift most to level, around I both and points, that Roz have and to hand might let numbers that, plant-based. one add beverage trend those just think, color but macro and me Dennis. two a And you consumer are

Yes.

and is so great together that pair we're as coffee understanding because coffee preferences I us the there that doing beverage how do match to their work preference. combination. that Kevin, hit think to items before, learning known to a us beverage and and great aligning our we've food ever allowing food around has is now trending. customers bring also in know say really our how to I with we're are platform both with been customer What of than better team will this and our a them pretty getting we well, digital you strong So, terms make

for ahead work just of create further go golden with attach a the as presence means So, opportunity we us, and food, to minimizes no see it expand food coffee. by to along us actually, quality, items great our

the question. Fargo. Please Jon from Your next with proceed line Wells of your with comes question Tower

thanks. Great, Awesome.

and Just clarification quickly question. then a

the loyalty was does that insights from impact hoping First, members a think clarification, in is the on stand on the mentioned I platform. and Obviously, XX the China transcript, in either into impressive growth past ticket be seeing into the there using how changes offer expected visibility day-part here still you'd obviously if versus insights I the trends some maybe the growth, platform know of revenue earlier my store an usage, the slower question pace very the and now would understanding that you COVID market closures what day-part is point margin are in I here basis XXXX? ticket could customers benefits the And offer exactly closures? growth then and but you obviously those could that And or differently are, might changes you're around some be and in perhaps great. brand muddying frequency

John behaviors. then We'll will asked and China of for your loyalty Culver thanks Pat comment clarification you take questions. that on the for member have Jon, first

Yes. Kevin. Thank you,

in trade So, of completed as had we progress, with transformation QX, expect closures the this by as closures end area respect of our the the trade and area complete fiscal of originally of to planned. majority the one-third Jon, of end initiative approximately to store transformation included year remaining

as is to at the relative the from So, refine we there how bit year they continuing and seeing stores we that's of been the as entirely based function the to what had are has thoughtfully committed beginning and a a delay how impacts the of at the a anticipated store closure it we're terms plans we're go. of a on team read margin back that to and with the continue June we to program. year program first we transfer when start subsequently we as then sales But optimize expanded and in of to even were the announced closed both as to view of now

about basis impact, a our margin improvement the margin year to basis. consolidated to margin or to continue full we on enterprise point a XX expect As

a of this a closure So, of result continue some activity, meaningful as even delay with we to the slight to margin expansion initiative. expect

your on on Jon question dive seeing what we're to and And little the and a China deeper bit digital it.

day-parts pay a day-part pretty we really the off, the day-part, morning mobile morning an uptick place order perspective, are First impact consistently. recovery the seen uptick we've and side. taking across digital the in much is all seeing But but an on from

group ticket, under it we of China, bit the normal would to is a the historical our terms consistent and that relates higher digital, than to seen seeing ticket up our U.S. in runs In because Generally, performance. circumstances living as ordering what previously. are we've that ticket I is with of say ticket

is seeing seeing The that gifting other is program in and social a China. introduced We've of of the a uptick aspect well. and that as gifting we're Rewards of that we're digital piece part as social big nice

progress with very to continue to team the invest and down our we're is footprint going So, double and there digital China. the in making pleased on

with last Please O'Cull The Chris question. from with proceed question comes your Stifel.

beverages, And it thanks to relative optimization or the is compress getting all question dynamic to does is Thanks. beverage beverage how the the plant-based plant-based is side supply over a equal? milk-based continued for Pat, margin my for to me chain in. drinks else the profitability time? that impact And on positive shift does of the related

it associated perspective, of alternative the because push impact remains there production, whether just milks, with the that it over be time Chris. migrate margin. from increased way the generally our milks, we say expand our practices. should while but not reevaluate to seen. a those business, our if not to premium say at increasingly consumers and little would change we reduce incremental much lot the term, stage have a sense to is I maintain, to speaking, in that mute do cost depend to will a supports those opportunity over charge Thank the makes say a is I and bit alternative to is on which goal how A broadly would I of in a so our some then pricing helps question, would you time. that it cost for margins margin impact longer currently, to

that turn our last closing now Mr. the over question remarks. was And for call his today. will I to Johnson

years for wanted to journey to last March XXth you want and of also looking I join over today our Annual thank meeting all March XXXX, we'll the on to a with forward for virtual you since future us the Starbucks in to on meeting reflect participating forward to Shareholders. on our bright join while will will the you Thank where that look virtual Meeting everybody. Well, for be founding us we It XXth. you us we you of company very joining that at same a seeing and hope and and invite I you or celebrate XX the time

This concludes Starbucks Coffee call. Company's conference

disconnect. now may You