Global Store Development, Digital Innovation,
and World-Class Partner (Employee) Engagement –– Spotlighted During
Forum for More than 2,800 Shareholders, Partners and Special
Guests
Starbucks Outlines Progress and Additional
Social Impact Commitments in Support of Coffee Farming Communities,
Feeding the Hungry, and Increasing Participation in U.S. Local and
National Elections
Company Builds on Single-Serve Coffee
Leadership Position by Updating its Agreement and Partnership with
Keurig Green Mountain
Starbucks Corporation (NASDAQ: SBUX) today hosted its 24th
Annual Meeting of Shareholders, with more than 2,800 partners,
shareholders, invited guests and board members in attendance.
Howard Schultz, chairman and ceo of Starbucks, honored the
accomplishments of the company in delivering record financial
results and introduced the company’s next level of social impact
initiatives.
“There are very few consumer brands in the world – products or
experiences – that have created both an undeniable customer
attachment to the brand while also seeing universal acceptance.
And, we take none of that for granted. We have to earn it every
day,” said Howard Schultz, chairman and ceo of Starbucks
Corporation. “In addition to earning our customers’ trust and
respect, we also cannot be a bystander at a time in our nation’s
history when government gridlock, economic disparity and partisan
polarization continue to stunt our progress. In our view, the
private sector must contribute more as an economic and social force
in partnership with all other sectors.”
FY15 Financial Highlights/ Achievements
Starbucks highlighted the interdependence of business success
with driving social impact at scale and cited Starbucks record
revenues of $19.2 billion (17 percent growth over FY14) and record
non-GAAP earnings per share of $1.581 (19 percent growth on a
non-GAAP basis1) in fiscal 2015; $3.7 billion in non-GAAP operating
income2 (19 percent growth on a non-GAAP basis2) in fiscal 2015;
and $2.4 billion returned to shareholders in the form of dividends
and share repurchases. Starbucks also invested $284 million in
healthcare benefits and $167 million in Bean Stock in FY15.
Starbucks Growth Agenda Outlined Across Geographies and
Disciplines
Kevin Johnson, president and chief operating officer,
highlighted Starbucks approach to elevating the brand across
retail, channel development and digital through new innovation,
reaching new customers and creating new occasions for customer
visits. Johnson highlighted the company’s growth ambitions across
the Americas, EMEA and China/Asia Pacific in retail, digital and
channel development.
Building on the success of the Teavana brand in Starbucks
channels in the U.S. and Canada, Johnson unveiled the company’s
plans to extend the Teavana brand into Starbucks retail stores
across EMEA and China/Asia Pacific by the end of the fiscal year.
Tea has grown by 17 percent over the prior year with all tea
categories posting strong growth, led by iced tea at 29
percent.
“Our focus on connecting with customers and delivering
experiences across our retail, channel development, and
digital businesses, continues to elevate the Starbucks brand,” said
Kevin Johnson, president and chief operating officer of
Starbucks. “This is a tribute to the 300,000 people who
proudly wear the Green Apron and serve customers in 70 countries
around the world. This focus and hard work has enabled us to
deliver record results and significant value for
our shareholders."
Starbucks Cementing its Global Leadership Role in Single
Serve Coffee and Ready to Drink Beverages
By bringing the Starbucks Experience to customers outside its
retail stores in a brand accretive way, Starbucks Channel
Development continues to demonstrate industry leading growth with
$1.7 Billion in revenue in FY15 and 17.4 percent growth in
operating income. “We are elevating Starbucks by taking inspiration
from our stores and bringing high quality, innovative products to
our customers around the world,” said Michael Conway, president,
Global Channel Development from the stage at today’s meeting. Two
key announcements were shared during Conway’s remarks. The first
being the launch of Starbucks Ready to Drink Cold Brew Coffee in
the U.S. through the North American Coffee Partnership with
PepsiCo. This premium, smooth tasting coffee delivers craft cold
brew on the go and will be introduced this summer. The second was
Starbucks commitment to strengthening its global leadership
position in the nearly $8 Billion premium single cup coffee
category. This will come to life through an updated agreement with
Keurig Green Mountain to continue to be the supplier of Starbucks
K-cup pods. The companies updated their agreement to provide
greater flexibility in driving product innovation and more control
over quick and deep expansion of our products into channels beyond
grocery. Additionally, this summer in the U.S., Starbucks will
launch an entirely new beverage line for the Keurig hot system -
the Starbucks Latte which will include customer favorites including
Caramel, Mocha and Vanilla Latte. Lastly, this summer in Europe,
Starbucks will launch espresso capsules which are compatible with
Nespresso®* machines which will be sold first in UK and France
through sales in Starbucks retail stores, grocery and online.
New Game-Changing Advances in Digital Customer Experience –
With Loyalty at the Core
Also on stage, Johnson presented the growth of the company’s
strategic digital flywheel of platforms. At the core of Starbucks
digital ecosystem is loyalty. In February, Starbucks unveiled
changes to its loyalty program which created a level playing field
for Starbucks customers to earn 2 stars for every dollar
spent. Since that announcement, more than 500,000 customers
signed up for Starbucks Rewards. In addition, total active members
of Starbucks Rewards are now reaching more than 12 million members
in the U.S., up 1 million over the past quarter. The new program
will go into effect on April 12.
This evolution also allows Starbucks the ability to create new
ways for customers to engage in the program outside of Starbucks.
Last October, Starbucks announced that Chase Commerce Solutions
replaced Square as its payments processor. And recently, Starbucks
entered into a payments agreement to accept Chase Pay. Today,
Starbucks expands this partnership with the announcement of a new
product called the Starbucks Rewards Prepaid Card from Chase.
Available by the end of this year, the Starbucks Rewards Prepaid
Card is a reloadable prepaid card that allows customers to earn
stars for all card purchases made virtually anywhere that Visa is
accepted. Customers will be able to apply for the Starbucks Rewards
Prepaid Card through the Starbucks Mobile App or
Starbucks.com. This new model is just the beginning of
Starbucks opening up its digital ecosystem as well as extending its
payment platform.
Creating Social Impact/Building a Purpose-Driven
Workforce
Starbucks partners represent diverse views, backgrounds,
experiences and ideas, creating a culture of people unified in an
aspiration to make a positive difference both in and outside
of stores. At recent Partner Open Forums, in direct conversations,
and across social platforms, Starbucks partners have voiced their
aspirations as global citizens, asking the company to engage on
important societal issues and participate in their communities and
countries. Today, Starbucks is making three specific commitments in
collaboration with leading institutions in an effort to help find
solutions to complex societal problems and to create long term
impact and sustainability.
- Starbucks Teams Up with Democracy
Works to launch TurboVote Challenge: Building upon its
demonstrated track record of joining like-minded organizations to
create meaningful social impact at scale, Starbucks will support
the non-profit Democracy Works and its TurboVote project to
strengthen democracy and elevate citizenship in America. In the
“TurboVote Challenge,” Starbucks will be joined by Airbnb, Arizona
State University, Fusion, Lyft, Mic, Spotify, Target, theSkimm,
Univision, The Video Game Voters Network, Westfield Corporation,
WeWork and others in an effort to engage 80 percent of all eligible
voters to participate in our democracy by 2020. By comparison,
fewer than 60 percent of eligible voters cast ballots in the 2012
national elections. Today’s announcement follows Starbucks long
history of encouraging civic engagement, including supporting
the Bipartisan Policy Center’s nationwide initiative to
strengthen our election process and, most recently, making the
TurboVote digital tool accessible to all partners in the U.S. in an
effort to increase voter registration and keep partners informed of
local and national elections throughout the year.
- Creating A Sustainable Supply of
Coffee For Future Generations: Together with Conservation
International, and 40 other organizations, Starbucks has
launched the Sustainable Coffee Challenge, an
industry-led initiative working to make coffee the first
sustainable agricultural product. As part of that ongoing
commitment and Starbucks comprehensive approach to ethical
sourcing, Starbucks today announced that its highly
successful, One Tree for Every Bag program is on track to donate 20
million rust resistant coffee tree seedlings to farmers in need by
the end of the year. Designed to engage its customers in
understanding more about where their coffee comes from, and
offering a new way to scale farmer support, this program donates a
coffee tree for every bag of coffee purchased in the U.S. through
its partnership with Conservation International**. With many coffee
growing regions around the world feeling the impact of coffee rust
on their quality and supply of arabica coffee, this becomes a
critical element in ensuring the longevity of the industry. In
addition to the millions of pounds of green coffee this program
will help farmers grow - helping to create economic stability for
their communities and families - the development of seedling
nurseries and a delivery infrastructure with supplier ECOM for the
initiative will generate more than 1,600 jobs in the process. An
initial 11 million rust resistant coffee seedlings will begin to be
distributed in Guatemala, Mexico and El Salvador in May ahead of
planting season in each of these countries. All of this work will
be supported by Starbucks open sourced ethical sourcing program,
C.A.F.E Practices, which offers agronomy information and tools in
addition to financing for farmers worldwide in collaboration with
Conservation International.
- Starbucks FoodShare – Hunger Relief
in Action: Starbucks is leading a national effort to provide
nourishing, ready-to-eat meals to people in need with Starbucks
FoodShare. Through a new and unique strategic alliance with Feeding
America, Starbucks has set a goal to rescue 100% of food available
to donate from its more than 7,000 U.S. stores. Working
together, Starbucks will bring ready-to-eat, nourishing meals
to scale for the millions who are in need, including breakfast
sandwiches, Paninis, Bistro Boxes and salads. True to Starbucks
mission to “act with courage, challenge the status quo and find new
ways to grow our company and each other,” Starbucks partners
advocated for a solution to donate unsold food and distribute
it to those in need. In response to this call for action, Starbucks
invested in research and quality assurance testing to develop a
program to safely donate ready-to-eat meals to the 1 in 7 Americans
who may not know where they will find their next meal. By this time
next year, Starbucks hopes that partners in its U.S.
company-operated stores will be able to add 5 million meals to the
pastries they already donate today. And in the next five years,
Starbucks will build on this commitment by engaging other
companies and organizations to help end hunger with its strategic
partner, Feeding America, the nation’s largest domestic
hunger-relief organization, and its nationwide network of food
banks.
Starbucks Annual Meeting of Shareholders began at 10 a.m. PT
today, and will be webcast and can be accessed at
http://investor.starbucks.com. A replay of the webcast will be
available on the company’s website until Friday, April 22, 2016.
Please visit http://news.starbucks.com to find images, b-roll 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 material breaches of our information
technology systems to the extent we experience a material breach,
potential negative effects of incidents involving food-borne
illnesses, food tampering, food contamination or mislabeling,
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 September 27, 2015. The company assumes no
obligation to update any of these forward-looking statements.
* Third-party brand with no link to Starbucks Coffee
Company.
** Starbucks will contribute $.70, the average cost of a tree,
to Conservation International for every bag of coffee sold from
participating stores in the U.S. to foster thriving coffee
communities. To learn more, visit conservation.org.
1 The comparable FY15 GAAP EPS of $1.82 includes certain
Starbucks Japan acquisition-related items, specifically a $0.26 per
share gain resulting from a fair value adjustment of Starbucks
preexisting 39.5% ownership interest in Starbucks Japan and
expenses of $0.03 per share related to ongoing amortization of
acquired intangible assets and transaction and integration costs.
In addition to the Starbucks Japan acquisition-related items, FY15
GAAP EPS includes a $0.03 per share loss related to the redemption
of the company's $550 million of 6.250% 2017 Senior Notes and $0.04
per share incremental tax benefit related to U.S. manufacturing
deductions to be claimed on our consolidated tax returns. The FY15
non-GAAP EPS growth rate is calculated over FY14 non-GAAP EPS of
$1.33. FY14 GAAP EPS of $1.35 includes a $0.01 per share litigation
credit related to the arbitration with Kraft Foods Global, Inc. and
a $0.02 net benefit from transactions in Q4 FY14. The net benefit
from transactions in Q4 FY14 relates primarily to a $0.02 gain on
the sale of our Malaysia equity method investment, partially offset
by a loss on the sale of our Australia retail operations and
transaction costs incurred in Q4 FY14 related to the planned
acquisition of Starbucks Japan.
2 The comparable 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.
The FY15 non-GAAP operating income growth rate is calculated over
FY14 non-GAAP operating income of $3,063.3 million. FY14 GAAP
operating income of $3,081.1 million includes a credit of $20.2
million related to the arbitration with Kraft Foods Global, Inc.
and $2.4 million of costs from transactions in Q4 FY14. The costs
from transactions in Q4 FY14 include a portion of the transactions
costs incurred in Q4 FY14 related to the acquisition of Starbucks
Japan and costs related to the sale of our Australia retail
operations in Q4 FY14.
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version on businesswire.com: http://www.businesswire.com/news/home/20160323006248/en/
Starbucks CorporationInvestor Relations:Durga Doraisamy,
206-318-7118investorrelations@starbucks.comorMedia:Linda
Mills, 206-318-7100press@starbucks.com
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