Starbucks earnings call: Leveraging the 9M loyalty member army is the plan
- Starbucks (SBUX +5.7%) execs talked more about the future than the past quarter during its conference call last night.
- Delivery: The company will roll out two different models, say execs. One will be an in-house solution and the second will be in partnership with another company. A sales lift is expected from the venture.
- China: The comp in China outpaced the overall +8% pace of the CAP segment.
- Mobile: The order-by-app service will be expanded to more than 600 stores in the Pacific Northwest. A question on the functionality of ordering a hot drink for pickup is tackled eagerly and pretty effectively.
- Packaged coffee: The company's massive loyalty program seems to be helping grocery sales. Starbucks increased market share for packaged coffee to over 28% in Q4 and topped 30% for the key week of the holiday period.
- Commodity costs: Starbucks sees "significant" coffee pricing advantages in Q1, but that environment easing off in the back half of the year. Dairy and diesel costs should become more favorable in the back half (hedges play a factor).
- The big picture: CEO Howard Schultz brings back up the "seismic" shift in consumer behavior by saying the shift to digital/mobile/delivery won't work for many brick-and-mortar mainstays. The company is planning on leveraging its 9M My Starbucks Rewards members in making the jump.
- Starbucks earning call transcript
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