Creating jobs is one of the top focuses at Starbucks, CEO Howard Schultz said today during the chain’s 25th annual shareholders meeting.
Schultz told the 3,300 attendees that the chain is on target to create more than 240,000 jobs globally — 68,000 in the U.S. — by opening 12,000 stores globally and 3,400 new stores in the U.S. by 2021. Jobs were just one of the many topics Starbucks execs addressed during the meeting. They also talked about digital initiatives to enhance the customer experience, growth plans, employee issues, social gifting and the appointment of board members.
Howard congratulated attendees on the chain’s solid financial results, including 18,000 percent 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.
“Every hour of every day, someone somewhere is walking into one of our 26,000 Starbucks stores in 75 countries around the world,” said Schultz,who officially handed his CEO title to Kevin Johnson during the meeting. “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.
“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”
Johnson, who will officially become CEO on April 3, pointed out several financial highlights, including:
- Returns over the past five years which averaged a growth rate of 23 percent.
- 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 basis); $4.1 billion in non-GAAP operating income (12 percent growth on a non-GAAP basis); and $3.2 billion returned to shareholders in the form of dividends and share repurchases.
- It invested $322 million in health care and other benefits, $15 million in helping partners achieve a college degree through the Starbucks College Achievement Plan and $221.6 million in Bean Stock in FY16.
Advancing digital initiatives
CTO Gerri Martin-Flickinger and China digital VP Molly Liu addressed growth plans for the company’s digital flywheel around the globe. They pointed out that Starbucks offers the largest and most robust mobile ecosystem of any retailer in the world with over 13 million Starbucks Rewards members, about 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.
Starbucks today said it was expanding its Mobile Order & Pay platform to give customers more ordering options 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 on the go by saying, “Alexa, ask Starbucks to start my order.”
Starbucks also shared more details on the expansion of My Starbucks barista, available to more than 100,000 customers across the U.S. Powered by Artificial Intelligence for the Starbucks Mobile App, customers can now place their orders via voice command or messaging interface, delivering speed and convenience.
The chain is also focused on delivering personalized offers to customers via the mobile app, including the rollout of suggested selling and recommendations. Total Starbucks Rewards member spend, for example, is up over 20 percent versus last year, driven by member growth and higher spend per member.
Social gifting
Starbucks also said social gifting is playing an important role in the overall customer experience. With the introduction of the Outlook add-in, customers can gift beverages through Microsoft Outlook. The chain 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.
Starbucks doubles down on giving back
Johnson said the chain’s strong financial performance has allowed it to carry out a variety of social impact initiatives, such as reaching its goal of hiring 10,000 veterans and military spouses ahead of schedule. It has expanded that number to hit 25,000 by 2025. It’s also exceeded its goal of hiring 10,000 opportunity youth ahead of schedule with 40,000 hires and has recommitted to increasing that number to 100,000 by 2020, according to the company.
In support of its January 2017 promise to hire 10,000 refugees by 2022, the chain today formally joined 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, according to the company.
Lastly, Starbucks has promised to deepen its investment in Starbucks College Achievement Plan with a program called, the Pathway to Admission. Working in partnership with Arizona State University, 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 receive an individualized path created just for them by ASU to work toward admission based on each partner’s unique situation and academic history, according to the company.
Starbucks shareholders elect new Board Members
The company’s shareholders elected Rosalind Brewer, former President and CEO 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 reelected directors. The Starbucks Board of Directors now includes a total of 14 members.
Cover photo: Kevin Johnson, who will take over as Starbucks CEO April 3, addresses shareholders during the brand’s 25th annual shareholders meeting.
Photo courtesy of Starbucks
