00:00I want to get a check on Starbucks shares this morning because they are nearing an all-time high.
00:05They reported a strong second quarter sales.
00:07Shares are up almost 4%, or now they're up more than 4%.
00:12Again, it's a turnaround and it's also a question of the consumer.
00:16Clearly, there is still healthy spending.
00:17We've seen that in the macro data.
00:19So Starbucks shares up 4% and Bloomberg The Clothes anchor Romain Bostic and Starbucks CEO Brian Nicol join us
00:25now.
00:26Romain.
00:27Welcome to our audiences across all of our Bloomberg platforms worldwide, television, radio, our partnership with YouTube.
00:34Romain Bostic here, joined now by the CEO of Starbucks, Brian Nicol, fresh off the company's most recent quarterly report,
00:427.1% same-store sales growth in the U.S.
00:45That's a huge turnaround from how this company had been performing in the years past, Brian.
00:50And when you look at that growth in the most recent quarter, was that based on transactions?
00:55Was that based on volume in the store?
00:57Was that based on higher prices?
01:00Yeah.
01:01Well, good morning, Romain.
01:02And yeah, look, we had a terrific quarter around the world.
01:06And yes, the U.S. market definitely stood out for its performance.
01:10As you mentioned, we did 7%, 7.1% comp in sales.
01:15And the thing that is really exciting is it was driven by transactions.
01:18So a little over 4%, which just basically means more people were coming into Starbucks every day.
01:25And, you know, what I think that really speaks to is the right menu offerings, the right service experience, and
01:34then obviously having an entire environment where people felt like they could actually experience the coffee in the moment or
01:41the drink in the moment that they wanted to have in their local community.
01:45When you look at some of the momentum over the last couple of quarters, 7% in the most recent
01:50fiscal quarter, fiscal Q1, I think it was 4%, there are a lot of questions about the full year guidance
01:56that you gave, which seems to suggest a potential slowdown in the second half of the year, 5% comp
02:02sales growth.
02:02And in terms of consolidated revenue, you're guiding to flat.
02:05What's going on there?
02:07Yeah, well, so look, if you look at the first half of the year, we ended up being about a
02:125%.
02:13And when we look at the back half of the year, we took up our guidance from 3% or
02:17better to 5% or better to finish the full year.
02:21And, you know, the good news is we had great momentum in the second quarter.
02:24That momentum has continued into April, and we'll see how it plays out throughout the year.
02:29Obviously, there's a lot of, you know, different things happening in the world right now that we want to make
02:35sure we are prepared to handle, and we don't want to get ahead of ourselves.
02:38But we're optimistic about what the business can deliver, and we're very optimistic about where Starbucks goes from here.
02:45You know, on the guidance, obviously, the good news is we think we've got the right plans to drive the
02:50top line.
02:51We've got the right plans to work the cost side of things so that we'll also see it flow through.
02:56So we're really excited about where we are.
02:58Have you seen any impact yet on consumer behavior because of what's been going on with regards to higher energy
03:04prices, inflation?
03:06You know, we've not seen that affect the consumer behavior at Starbucks.
03:11And the thing that I'm really excited about is our sales growth and our transaction growth was supported by just
03:17about every income cohort.
03:18We had growth in every income cohort.
03:20And I talked about this a little bit in the call, which I really do think is something to remember,
03:25which is when Starbucks does the experience right, our coffeehouse leaders, our baristas create that moment of connection,
03:33that craft experience, the customization that our customers want at the speed at which they want.
03:39People come back saying, you know what, that was well worth it.
03:42And, you know, I think the fact that we can give you just a little touch of luxury, regardless of
03:47where you fall in the income scale,
03:50people appreciate it, whether it feels like a little bit of a splurge or whether it feels like, you know,
03:54an affordable premium experience.
03:57In both cases, people are walking away saying, you know what, that was really well worth it.
04:01I want to do that again.
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