Starbucks Corporation (NASDAQ:SBUX) Q1 2020 Earnings Conference Call - Final Transcript

Jan 28, 2020 • 05:00 pm ET


Starbucks Corporation (NASDAQ:SBUX) Q1 2020 Earnings Conference Call - Final Transcript


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Good afternoon. My name is Hector and I will be your conference operator today. I would like to welcome everyone to Starbucks Coffee Company's First Quarter Fiscal Year 2020 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. [Operator Instructions]

I will now turn the call over to Durga Doraisamy, Vice President of Investor Relations. Ms. Doraisamy, you may now begin your conference.

Durga Doraisamy

Good afternoon everyone and thank you for joining us today to discuss our first quarter fiscal year '20 results. Today's discussion will be led by Kevin Johnson, President and CEO, and Pat Grismer, CFO. And for Q&A, we will be joined by Roz Brewer, Chief Operating Officer and Group President Americas, John Culver, Group President, International, Channel Development and Global Coffee & Tea.

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. GAAP results in fiscal '20 include several items related to strategic actions, including restructuring and impairment charges, transaction and integration costs and other items. These items are excluded from our non-GAAP results. Please refer to our website at to find the reconciliation of certain non-GAAP financial measures referenced in today's call with their corresponding GAAP measures. This conference call is being webcast and an archive of the webcast will be available on our website through Thursday, February 27, 2020.

Finally, for your calendar planning purposes, please note that our second quarter fiscal year '20 earnings conference call has tentatively been scheduled for Tuesday, April 28, 2020.

I will now turn the call over to Kevin. Kevin?

Kevin Johnson

Good afternoon and welcome. Q1 was an exceptional quarter for Starbucks. The positive business momentum we've created over the past fiscal year continues with a strong start to fiscal 2020. These results were fueled by a healthy balance of comparable sales growth and new store development, as well as continued expansion of our Global Coffee Alliance with Nestle. I'm especially pleased that we delivered meaningful margin expansion in the quarter, even as we continued to invest in the key areas to support sustainable growth, first and foremost in our partners as well as in beverage innovation and digital customer relationships. Given the strength of our Q1 results, we had intended to raise certain aspects of our full-year financial outlook for fiscal 2020. However, due to the dynamic situation unfolding with the corona virus, we are not providing guidance at this time. And as we get more clarity on the situation, we will transparently communicate with investors.

Our immediate focus is on two key priorities in China. First, hearing for the