Q2 2014 Earnings Call Transcript

Transcript Call Date 04/24/2014

Operator: Good afternoon. My name is Mike and I will be your conference operator today. At this time, I would like to welcome everyone to Starbucks Coffee Company's Second Quarter Fiscal Year 2014 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session.

Thank you. Ms. DeGrande, you may begin your conference.

JoAnn DeGrande - IR: Thank you, Mike. Good afternoon. This is JoAnn DeGrande, Vice President of Investor Relations for Starbucks Coffee Company. Joining me on the call today to discuss our Q2 results are Howard Schultz, Chairman, President and CEO; Troy Alstead, COO; and Scott Maw, CFO. Also joining us for Q&A are Cliff Burrows, Group President, U.S. and Americas; John Culver, Group President, China, Asia Pacific and Channel Development; and Adam Brotman, Chief Digital Officer.

This conference call will include forward-looking statements, which are subject to various risks and uncertainties that could cause our actual results to differ materially from these statements. Any such statements should be considered in conjunction with cautionary statements in our earnings release and risk factor discussions in our filings with the SEC, including our last Annual Report on Form 10-K. Starbucks assumes no obligation to update any of these forward-looking statements or information. This conference call is being webcast, and an archive of the webcast will be available on our website at investor.starbucks.com.

Before I turn the call over to Howard, I would like to announce the date of our next biennial analyst conference. That would be December 4th of this year. Although we are in the early planning stages and we'll not be formally sending out invitations soon, it is important to note that we will be hosting this event in our home market, Seattle. We hope you’ll be able to join us for the first conference in Seattle since 2006.

I would now like to turn the call over to Howard Schultz. Howard?

Howard Schultz - Chairman, President and CEO: Thank you, JoAnn, and welcome to everyone on today's call. I'm very pleased to comment on the record second quarter results that Starbucks announced today and to provide detail around several exciting new initiatives we have underway.

Q1's momentum continued in Q2 with each of our retail segments around the world contributing positively to global comps for sales increase of 6%, representing our 17th consecutive quarter of comp growth of 5% or greater and record Q2 revenues of $3.9 billion. Particularly noteworthy was a 7% comp increase delivered by our China and Asia Pacific segment, and the 6% comp increase delivered by our EMEA segment, the strongest comp growth in EMEA in 14 quarters. EMEA's performance in Q2 provides powerful evidence of the success of our continuing efforts to transform that important region, where we currently operate 2,065 stores and to position EMEA to resume delivering revenue growth and operating profitable new stores fulfilling the commitment we made on prior calls.

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