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
SEATTLE--(BUSINESS WIRE)--
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:
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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.
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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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Source: Starbucks Corporation