Starbucks chairman and ceo Howard Schultz
commemorates final Annual Meeting in current role; joins incoming
ceo Kevin Johnson in highlighting company’s record performance
since its IPO, unparalleled shareholder returns, and strong
pipeline of innovation for future growth across coffee, tea, food,
digital, China and partner investments
Starbucks announces plans to create more than
240,000 new jobs globally (68,000 in the U.S.) as it reiterates
intent to open 12,000 new stores globally and 3,400 new stores in
the U.S. by FY21, including 100 more Military Family Stores in the
U.S. to support military communities
After accomplishing ambitious goals, Starbucks
doubles down on hiring commitments – plans to expand current
initiatives and hire 25,000 Veterans and Military Spouses by 2025
and 100,000 Opportunity Youth by 2020 in the U.S.
Starbucks shareholders elect Rosalind Brewer,
former President and Chief Executive Officer of Sam's Club; Jørgen
Vig Knudstorp, Executive Chairman of the LEGO Brand Group; and
Satya Nadella, CEO of Microsoft Corporation, to the Starbucks Board
of Directors
Starbucks Corporation (NASDAQ: SBUX) today hosted its 25th
Annual Meeting of Shareholders, with more than 3,300 partners,
shareholders, invited guests and board members in attendance.
Howard Schultz, chairman and ceo of Starbucks, marked his last
Annual Meeting of Shareholders in his current capacity of ceo and
honored the accomplishments of the company in delivering record
financial results, including approximately 18,000% in shareholder
returns since the company’s Initial Public Offering 25 years ago,
and more than $10 billion in cash to shareholders via dividends and
share repurchases over the past five years alone. Coupled with its
long history of creating opportunities for partners (employees) and
investing in the communities it serves, Starbucks reinforced its
long-term commitment to driving performance through the lens of
humanity.
“Every hour of every day, someone somewhere is walking into one
of our 26,000 Starbucks stores in 75 countries around the world. As
we approach our 25th year as a publicly traded company, the
Starbucks brand is as relevant today as it has ever been, driven by
the 330,000 people who proudly wear the green apron,” said Schultz.
“As I move into my new role as executive chairman, there is only
one person who can lead us into the future. For his skill, his
leadership, and above all, his love for the company, I am proud to
call Kevin Johnson the next ceo of Starbucks. He is perfectly
positioned to lead our brand into the future together with the
strongest leadership team and board in the history of Starbucks.
And yet, we are still in the early stages of growth as we strive to
meet our highest growth aspirations for the company.”
Financial Highlights, Achievements
Starbucks highlighted the interdependence of business success
with driving social impact at scale and cited Starbucks returns
over the past five years – returning $10 billion of cash to
shareholders via dividends and share repurchases, with an average
growth rate of 23% over that period. In FY16, the company delivered
record revenues of $21.3 billion (11 percent growth over FY15) and
record non-GAAP earnings per share of $1.851 (17 percent growth on
a non-GAAP basis1); $4.1 billion in non-GAAP operating income2 (12
percent growth on a non-GAAP basis2); and $3.2 billion returned to
shareholders in the form of dividends and share repurchases.
Starbucks also invested $322 million in healthcare and other
benefits, $15M in helping partners achieve a college degree through
the Starbucks College Achievement Plan, and $221.6 million in Bean
Stock in FY16.
Innovation in Customer Experience and Partner
Benefits
Kevin Johnson, who will become Starbucks ceo on April 3,
reinforced Starbucks approach to elevating the brand across retail,
channel development and digital through innovation, reaching new
customers and creating new occasions for customer visits.
“For almost 50 years we have been in the human connection
business, and in today's world the need and desire for that human
connection has never been greater. With our growing store footprint
all around the globe and the engagement of our partners, we will
continue to deliver financial growth to our shareholders,
opportunities for our partners, and connect with more and more
customers around the world,” said Johnson. “At the heart of this
growth is innovation across our business, and I’m fortunate to work
alongside the best leadership team in the company’s history as we
serve our partners, customers and shareholders to deliver the
growth they have come to expect from us.”
Johnson also shared the following updates during the Starbucks
Annual Meeting of Shareholders:
- Innovation in Coffee: Opened in
2014, Starbucks first Roastery located in Seattle is already
serving as a foundation for the company’s coffee innovation
pipeline, providing a halo to the rest of the business. Earlier
this year, Starbucks offered a new beverage in U.S. stores, Cascara
Latte, which has a flavor profile that originated in the Roastery
and accompanied the returning Smoked Butterscotch latte which led
the “inspired by Roastery” portfolio of beverages in 2016. Just one
year ago this week, the Roastery introduced Starbucks customers to
nitro cold brew which is now available at more than 570 Starbucks®
stores – across the U.S., Canada, Japan, China and U.K. – offering
endless opportunities for a “draft” portfolio of products. The
company is also testing new offerings inspired by the Seattle
Roastery’s Affogato menu at 20 Starbucks Reserve® bar stores and
100 Starbucks locations in California. Only a few weeks ago,
Starbucks also introduced its first ever barrel-aged Starbucks
Reserve coffee which is already outperforming projections. This
premium coffee pipeline will continue to expand as the company
opens Roastery locations in Shanghai (2017), New York (2018), Milan
(2018) and Tokyo (2018) with the potential for 20-30 Roasteries
globally over time.
- Elevated Food Options: Building
on its food business through customer-driven innovation, Johnson
unveiled the company’s plans to launch Starbucks Mercato, a new
menu of lunch items that features fresh and flavorful grab-and-go
salads and sandwiches that meet a variety of dietary lifestyles and
are made daily, with leftover items donated nightly to local food
banks through Starbucks FoodShare program with Feeding America. As
Starbucks continues to see strong growth in Lunch, the company sees
a significant opportunity to drive attach at lunch through the new
Mercato menu as well as existing products. The Mercato menu will
start with more than 100 stores in Chicago on April 11, with plans
to expand to other U.S. markets in the future. Additionally, on the
heels of the successful launch of protein-forward, wheat-free Sous
Vide Egg Bites, Starbucks also highlighted the introduction of a
Gluten-Free Smoked Canadian Bacon Breakfast Sandwich and certified
vegan Sprouted Grain Bagel in Starbucks stores across the U.S. Both
are examples of how the company is meeting customers’ needs for
on-the-go choices that fit their lifestyle. Starbucks has grown its
food business by 1.5 times since 2013 and plans to double its food
business by the year 2021.
- Innovation in Premium Craft Iced
Teas: This summer, Starbucks is reinventing craft iced tea
through the launch of new Teavana Shaken Iced Tea Infusions with no
artificial flavors or sweeteners. This new offering will join
Starbucks core line-up of Teavana Shaken Iced Teas and be available
in three new varieties, Pineapple Black Tea Infusion, Strawberry
Green Tea Infusion and Peach Citrus White Tea Infusion. The taste
is a perfect balance of premium tea and freshly steeped fruit and
botanical blends.
Advancing the Digital Flywheel Globally
Starbucks chief technology officer Gerri Martin-Flickinger and
China digital vp Molly Liu addressed growth plans for the company’s
digital flywheel around the globe. Starbucks continues to offer the
largest and most robust mobile ecosystem of any retailer in the
world, with over 13 million Starbucks Rewards members,
approximately 9 million mobile paying customers, with one out of
three now using Mobile Order & Pay, and more than $6 billion
loaded onto prepaid Starbucks Cards in North America during 2016
alone.
Today, Starbucks announced the expansion of its Mobile Order
& Pay platform to give customers more options to order their
favorite Starbucks beverage while on the go, by leveraging its
skill for Amazon Alexa announced earlier this year. Now, with the
planned integration of Amazon Alexa and Ford vehicles later this
year, Starbucks customers with a Ford car equipped with SYNC 3 will
be able to order their favorite Starbucks beverage on the go by
saying, “Alexa, ask Starbucks to start my order.”
Starbucks also shared more details on the expansion of My
Starbucks® barista, now available to more than 100,000 customers
across the U.S. Powered by groundbreaking Artificial Intelligence
for the Starbucks Mobile App, customers can now place their orders
via voice command or messaging interface, delivering speed and
convenience. Starbucks continues to deliver innovation that
enhances customer loyalty and engagement and further extends the
accessibility of the Starbucks® Mobile App. The My Starbucks®
barista is currently rolling out to iOS customers with Android™
users being added in subsequent releases.
Starbucks digital flywheel continues to gain momentum with the
launch of true one-to-one personalization. While still early in the
evolution of this service, Starbucks has delivered personalized
offers to customers directly on the front of the screen of the
mobile app, including the complete rollout of suggested selling and
recommendations. Total Starbucks Rewards member spend is up over 20
percent versus last year, driven by member growth and higher spend
per member, reflecting a more engaged member base that takes
advantage of Mobile Order and Pay and personalized marketing offers
and recommendations.
Starbucks also provided more detail on the important role that
social gifting is playing in the overall customer experience. With
the introduction of the Outlook add-in, customers can gift a
favorite beverage to friends, colleagues and loved ones through
Microsoft Outlook. Starbucks also unveiled the availability of
gifting through Apple’s Messages app with Apple Pay beginning in
April, expanding the platform and offering customers new ways to
share the Starbucks Experience.
China Experiences Accelerated Growth, Grounded in Starbucks
Brand and Innovation
In China, customers have continued to embrace the Starbucks
brand, with some of the company’s most innovative, efficient and
profitable stores producing record revenue and strong same-store
sales growth in FY16. Starbucks now operates more than 2,600 stores
in 127 cities in China and employs nearly 40,000 partners, opening
over a store a day – a growth rate that will continue to accelerate
well into the future. While Starbucks business in China is in its
very early stages of growth, the company shared more detail on its
new social gifting feature “用星说” (Say it with Starbucks) on Weixin,
a sister product of WeChat targeting Chinese domestic users.
Co-created by Starbucks and Weixin, this pioneering social gifting
innovation encourages everyday acts of kindness and appreciation
among family and friends, by enabling users to instantly and
conveniently gift a Starbucks beverage or digital gift card.
Starbucks has seen more than 1 million transactions on its social
gifting platform since it launched in China on Feb. 10, and Weixin
Pay has now reached 27 percent of tender in Starbucks stores in
China.
Starbucks Doubles Down on Hiring Commitments
Starbucks announced plans to create more than 240,000 jobs
globally (68,000 in the U.S.) as it highlighted its growth plans to
open 12,000 new stores globally and 3,400 new stores in the U.S. by
FY21.
Starbucks strong financial performance over the last 25 years as
a publicly traded company has allowed for strategic investments in
social impact initiatives – driving greater connection between
partners and the millions of customers it serves in 75 countries
worldwide. The company has already reached critical milestones for
its hiring initiatives for Veterans, Military Spouses, and
Opportunity Youth and announced plans on building on this progress
by expanding its hiring goals as it continues to grow the U.S.
business. Creating opportunities and building a diverse and
inclusive workforce has been critical to meeting the company’s
mission to inspire and nurture the human spirit – one person, one
cup and one neighborhood at a time.
- Starbucks Reaches Goal of Hiring
10,000 Veterans and Military Spouses Ahead of Schedule; Expands
Goal to 25,000 by 2025: Announced in 2013, Starbucks has
already reached its initial goal to hire 10,000 Veterans and
Military Spouses ahead of the original 2018 deadline. Based on the
success of this program, today Starbucks proudly reaffirmed its
commitment to supporting service members and military spouses and
increased its hiring goal to 25,000 total hires by 2025. In
addition, the hiring commitment has led to expanded ambitions to
reconnect Americans and service members through the following
programs and relationships: Military Mondays, an in-store program
that offers a range of resources to assist with the transition
process from military to civilian life; the Adopt A Unit program
which supports the need of deployed units and their families; and
partnerships with organizations that help us bridge the
civilian-military divide and enable Veterans to serve in their
communities, such as Blue Star Families, Team RWB, Team Rubicon
,The Mission Continues and the USO.
- Starbucks to Dedicate 100 More
Military Family Stores across the U.S. in Next Five Years:
Starbucks® Military Family Stores are located near major military
bases and have been given the special designation as a place of
welcoming and support for military communities around the country.
Having reached its initial goal of opening 32 Military Family
Stores, Starbucks today announced plans to dedicate 100 more such
stores across the U.S. over the next five years. The stores
function as a hub within the military community, and are staffed by
Veterans, advocates and Military Spouses. Partners in the stores
help create a culture of understanding between military and
non-military customers – an important step toward ensuring service
men and women experience smooth transitions back into the civilian
world.
- Starbucks Exceeds Goal of Hiring
10,000 Opportunity Youth Ahead of Schedule; Expands Goal to 100,000
Hires by 2020: Starbucks has a long-standing commitment to
creating opportunities for youth who are not in school or
unemployed. In 2015, the company announced a commitment to hire
10,000 opportunity youth in the U.S. by 2018 and has already
exceeded that commitment with 40,000 hires. Building on this
progress, the company announced that it will expand that goal to
100,000 hires by 2020, giving even more opportunity youth – an
estimated 4.9 million young Americans – a fair shot at that first
job and pathway to lifelong success.
- Starbucks Teams Up with UNHCR - the
UN Refugee Agency, International Rescue Committee, Tent Foundation,
and No One Left Behind to Support the Hiring of 10,000 Refugees
Globally: Announced in January 2017, Starbucks plans to welcome
and hire 10,000 refugees across its global business in 75 countries
by 2022. In support of this commitment, today Starbucks is formally
joining the UNHCR’s #WithRefugees Campaign and the Tent Partnership
for Refugees to scale up the company’s support and efforts to reach
refugee candidates. Also, the company unveiled partnerships with
non-governmental organizations to provide skills training to
refugees and connect work authorized candidates to job
opportunities. Starbucks is teaming up globally with the
International Rescue Committee (IRC), UNHCR - the UN Refugee
Agency, and in the U.S., with No One Left Behind, an organization
founded by a veteran and his translator, and dedicated to
resettling interpreters, personnel and their families who served
alongside U.S. forces.
- Expanding Partner Education
Benefits: The company further deepened its investment in the
revolutionary Starbucks College Achievement Plan (SCAP) with the
announcement of the Pathway to Admission program. Working in
partnership with Arizona State University (ASU), Starbucks aims to
help even more eligible partners earn their bachelor’s degrees by
helping those applicants who may need additional assistance in
meeting admission requirements. Through Pathway to Admission,
partners can now receive an individualized path created just for
them by ASU to work toward admission based on each partner’s unique
situation and academic history.
Starbucks Shareholders Elect New Board Members
The company’s shareholders elected Rosalind Brewer, former
President and Chief Executive Officer of Sam's Club; Jørgen Vig
Knudstorp, Executive Chairman of the LEGO Brand Group; and Satya
Nadella, CEO of Microsoft Corporation, to the Starbucks Board of
Directors, among other re-elected directors. The Starbucks Board of
Directors now includes a total of 14 members.
Additionally, James (Jamie) Shennan Jr., a Starbucks
director since March 1990, retired from the Board effective
immediately prior to the shareholder meeting in accordance with the
company’s Corporate Governance Principles and Practices’ mandatory
retirement age requirements.
Starbucks Annual Meeting of Shareholders began at 10 a.m. PT
today, and will be live-streamed on Yahoo Finance at
http://finance.yahoo.com/live/starbucks, and simultaneously
available at http://investor.starbucks.com. A replay of the webcast
will be available on the company’s website until Friday, Sept. 22,
2017. Please visit Starbucks Newsroom at http://news.starbucks.com
to find images, video clips and live updates of the Annual Meeting
of Shareholders.
About Starbucks
Since 1971, Starbucks Coffee Company has been committed to
ethically sourcing and roasting high-quality arabica coffee. Today,
with stores around the globe, the company is the premier roaster
and retailer of specialty coffee in the world. Through our
unwavering commitment to excellence and our guiding principles, we
bring the unique Starbucks Experience to life for every customer
through every cup. To share in the experience, please visit us in
our stores or online at www.starbucks.com.
Forward Looking Statements
Certain statements contained herein are “forward-looking
statements” within the meaning of the applicable securities laws
and regulations. Generally, these statements can be identified by
the use of words such as “anticipate,” “expect,” “believe,”
“could,” “estimate,” “feel,” “forecast,” “intend,” “may,” “plan,”
“potential,” “project,” “should,” “will,” “would,” and similar
expressions intended to identify forward-looking statements,
although not all forward-looking statements contain these
identifying words. These statements are based upon information
available to Starbucks as of the date hereof, and Starbucks actual
results or performance could different materially from those stated
or implied due to risks and uncertainties associated with its
business. These risks and uncertainties include, but are not
limited to, fluctuations in U.S. and international economies and
currencies, our ability to preserve, grow and leverage our brands,
potential negative effects of incidents involving food or
beverage-borne illnesses, tampering, contamination or mislabeling,
potential negative effects of material breaches of our information
technology systems to the extent we experience a material breach,
material failures of our information technology systems, costs
associated with, and the successful execution of, the company’s
initiatives and plans, the acceptance of the company’s products by
our customers, the impact of competition, coffee, dairy and other
raw materials prices and availability, the effect of legal
proceedings, and other risks detailed in the company filings with
the Securities and Exchange Commission, including the “Risk
Factors” section of the Starbucks Annual Report on Form 10-K for
the fiscal year ended October 2, 2016. The company assumes no
obligation to update any of these forward-looking statements.
1 Non-GAAP EPS. FY16 GAAP EPS of $1.90 includes ongoing
amortization of acquired intangible assets and transaction and
integration costs related to the Starbucks Japan acquisition
(+$0.04 per share), additional domestic manufacturing deductions
claimed on our consolidated tax returns (-$0.01 per share) and the
impact from the extra week in our 53-week fiscal 2016 (-$0.09 per
share). The income tax effect for FY16 non-gaap adjustments was
+$0.02 per share. The FY16 EPS growth rate is calculated over FY15
non-GAAP EPS of $1.58. FY15 GAAP EPS of $1.82 includes certain
Starbucks Japan acquisition-related items, specifically the gain
resulting from a fair value adjustment of Starbucks preexisting
39.5% ownership interest in Starbucks Japan (-$0.26 per share) and
expenses related to ongoing amortization of acquired intangible
assets and transaction and integration costs (+$0.04 per share). In
addition to the Starbucks Japan acquisition-related items, FY15
GAAP EPS includes a loss related to the redemption of the company's
$550 million of 6.250% 2017 Senior Notes (+$0.04 per share). The
income tax effect for FY15 non-gaap adjustments was -$0.02 per
share; we also had an incremental tax benefit related to additional
domestic manufacturing deductions claimed on our consolidated tax
returns (-$0.04 per share).
2 Non-GAAP Operating Income. FY16 GAAP operating income of
$4,171.9 million includes expenses of $57.4 million related to
certain Starbucks Japan acquisition-related items, specifically
amortization of acquired intangible assets and transaction and
integration costs, and expenses of $2.8 million incurred on the
sale of our Germany retail operations. The FY16 operating income
growth rate is calculated over FY15 non-GAAP operating income of
$3,655.6 million. FY15 GAAP operating income of $3,601.0 million
includes expenses of $54.6 million related to certain Starbucks
Japan acquisition-related items, specifically amortization of
acquired intangible assets and transaction and integration
costs.
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version on businesswire.com: http://www.businesswire.com/news/home/20170322005777/en/
Starbucks CorporationInvestor Relations:Tom Shaw,
206-318-7118investorrelations@starbucks.comorMedia:Linda
Mills, 206-318-7100press@starbucks.com
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