Looks to increase market cap to $100 billion.
Starbucks Corp. kicked off its 23rd Annual Meeting of Shareholders, with more than 2,800 partners, shareholders, invited guests and board members in attendance.
Together with the Starbucks leadership team, Howard Schultz, chairman and CEO of Starbucks, will honor the accomplishments of the company over the past year of delivering record financial results as the company heads toward achieving a $100 billion market cap.
“When I look back at the last 23 years of our public life or Starbucks 44-year history, so much of our success is deeply rooted in the values, culture and guiding principles of who we are, who we’ve been and who we are striving to be as a company,” said Schultz. “The long history of Starbucks is steeped in trying to build a different type of business proposition from Day One: one that achieves the balance between profitability and a social conscience. And to continually ask ourselves what it takes to build a great enduring company. Even as our share price hits new all-time highs, we have never lost sight of this vision, and our goal of bringing our people along with us on the journey and sharing our success.”
FY14 Financial Highlights / Achievements
Starbucks has reported record revenues of $16.4 billion (11% growth) and record non-GAAP earnings per share of $2.661 (21% growth on a non-GAAP basis) in fiscal 2014; $3.1 billion in non-GAAP operating income (25% growth on a non-GAAP basis) in fiscal 2014 ; and $1.6 billion returned to shareholders in the form of dividends and share repurchases. Starbucks also invested $233 million in healthcare benefits and $210 million in Bean Stock in FY14.
Digital Customer Experience
As Starbucks continues to find opportunities to meet customers where they are in their day while providing both convenience and brand engagement, the company will elaborate on plans to roll out Mobile Order & Pay. A mobile ordering feature integrated into Starbucks world-class mobile app and My Starbucks Rewards loyalty program, Mobile Order & Pay officially launched in the Pacific Northwest this week and Starbucks remains on track for a full national roll-out in 2015. This expansion will also lay the groundwork for Starbucks to begin testing various food and beverage delivery options in the coming year.
In an effort to integrate service solutions that meet the “on demand” customer, Starbucks will unveil two complementary delivery models including
A strategic collaboration with Postmates, a leading on-demand delivery service, which will allow customers to order their food and beverage items via the Starbucks mobile app and receive on-demand delivery within defined areas. This rapidly growing organization—operating in 22 markets with more than 1.5 million deliveries to date—brings robust logistics technology, courier-enabled delivery and quality of service expertise. This Starbucks delivery pilot will begin in Seattle in the second half of 2015.
A “Green Apron” barista delivery option enabling customers within specified office-buildings to order food and beverages for convenient delivery by Starbucks baristas. Supported by its world class real-estate capabilities, this model allows Starbucks to identify targeted solutions for environments that can benefit from an integrated service model. This Starbucks delivery test will begin in New York the second half of 2015.
Starbucks has the unique ability to leverage its store platforms, suite of digital offerings and mobile commerce innovation to provide delivery options as a natural extension of the Starbucks Experience.
Starbucks will outline its plans to continue to build its leadership position in coffee including the sourcing, roasting, brewing and serving of its handcrafted beverages.
In addition to providing its customers with a portfolio of products that reflect its core espresso craft like the Flat White, the company remains committed to expanding its line of super-premium, small lot Starbucks Reserve coffee. Starbucks plans to open its next Roastery location in Asia in 2016 and is actively looking for real estate for its second Roastery in the United States. Additionally, Starbucks will announce its achievement of ethically sourcing 99% of its coffee in FY15 supported by its 15-year relationship with Conservation International.
In addition to coffee, Starbucks will unveil its strategy to grow and develop the Teavana brand and will announce plans to offer Teavana teas in Starbucks stores in China/Asia Pacific in 2016. Teavana Shaken Iced Teas, Teavana Oprah Chai and Teavana hot brewed teas in Starbucks stores have already shown strong revenue contribution, and tea remains the fastest growing beverage category within Starbucks North America business.
Pathway for Opportunity
Starbucks will also outline its commitment to attracting and retaining people who share in the company’s mission to nurture and inspire the human spirit, by investing in partners who will deliver a superior customer experience.
As part of this, Starbucks has committed to hiring 10,000 veterans and military spouses and has already placed more than 3,300 in jobs to leverage their leadership and dedication to operational excellence. Starbucks will also outline its opportunity to address unemployment in young people by committing to hire at least 10,000 over the next three years where Starbucks will focus on creating new career opportunities for young adults. And, Starbucks will today outline its ambitious plans to have at least 25,000 college graduates by 2025 through the Starbucks College Achievement Plan program, and announced that nearly 2,000 partners have already enrolled in the program. The company’s hope is that a large number of these graduates will be “Opportunity Youth:” young people between the ages of 16-24 who are not enrolled in school or are out of the workforce.
Meaningful employment and a top-notch education is the foundation through which Starbucks can help create a sustainable future for its partners whether they build on a rewarding career with Starbucks or if their aspirations take them on a different journey.
A Conversation About Race
In the second half of the Annual Meeting of Shareholders, Schultz plans to address the subject of race relations in America and unconscious bias through a personal reflection of his time spent with more than 2,000 partners during Partner Open Forums in Seattle, St. Louis, Oakland, New York, Los Angeles, and Chicago. Schultz plans to announce that Starbucks and USA TODAY will jointly publish national inserts called “Race Together,” and launch a digital hub at racetogether.usatoday.com, which will all serve as learning tools and conversation starters for Starbucks customers, partners and the nation to encourage a greater understanding, empathy, and compassion toward one another. More than 2 million of these inserts will be available across the country in USA TODAY newspapers, and special standalone “Race Together” inserts will also be available in Starbucks company-operated stores beginning on Friday, March 20.
Joining Schultz on stage will be Starbucks board member Mellody Hobson, who will deliver her acclaimed speech, entitled “Color Blind or Color Brave.” This is expected to be one of the signature moments of the meeting, and will demonstrate the commitment the company has to equal and respectful opportunity for all.
“Doing what is right for society and what is right for business cannot be mutually exclusive endeavors. Today more than ever, companies such as Starbucks must use their resources to create opportunities for their people as well as for the communities they serve,” said Schultz. “Last year on this very stage, I posed the question: ‘What is the role and responsibility of a for-profit, public company in today’s society?’ This year, I hope that we have answered that question and showcased how Starbucks can truly use our scale for good and play a role in changing the narrative and national conversation to create opportunities for all.”