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Starbucks CEO: No signs of recession



Despite market fears that a recession may be nearby, Starbucks CEO Kevin Johnson told CNBC Monday that customers are telling a different story.

The coffee chain is more in line with customers than ever before, thanks to investments in its digital customer relationship, and the company is seeing results, he said.

Starbucks' loyalty program, which contributes to 42% of sales, now has more than 17 million active users who use their mobile app regularly, Johnson said.

"We haven't seen any signs in the United States of anything related to a slowdown, but we know these things go in cycles," he said in a seat with "Mad Money & # 39; s" Jim Cramer, "but right now we are shooting at all cylinders and consumers in [the] seems to be doing well. "

Starbucks collected $ 6.8 billion in sales in the last quarter, more than 8% from the same period a year ago. Sales of the same store in the US increased by 7%, with booming trade tensions between the world's largest economies, 6% in China. Management raised full-year guidance to $ 26.4 billion.

Johnson, who became head of the Seattle-based coffee franchise in 201

7, said adding new cold brew drinks and improving the customer experience both in-store and in a digital ecosystem. . Technology has allowed the company to automate staffing plans, improve partner engagement and bring customer engagement scores to all-time highs, he added.

"The company is on a path where we are now accelerating the pace of innovation in ways we believe are relevant to our customers, inspiring our partners, and they are absolutely meaningful to our business," said Johnson, a Microsoft technical veteran formally and Juniper Networks.

In the area of ​​beverage innovation, Starbucks announced it will debut pumpkin-brewed brew as part of its fall menu on Tuesday. It's the coffee maker's first pumpkin drink since pumpkin spice latte was brought to the market nearly two decades ago, CNBC reported.

Coffee drinkers tend to consume the hot beverage in the morning to prepare for the work day, but Johnson said it is cold caffeinated beverage. , which brews for 24 hours in cold water, has opened up new possibilities past noon. Starbucks was able to project a shift to cold drinks and saw that it performed well especially among millennials, he said. The CEO expects their nitro-cold brews, which include nitrogen to make it sweeter and creamier, will be available in all coffee shops by the end of September.

"The combination of cold brew – nitro cold brew, refresher – has opened the afternoon section," Johnson said. "In fact, just over half of our drinks are now cold drinks."

Johnson has also committed to looking beyond the profits it returns to investors in determining Starbucks & # 39; s value. He joined nearly 200 other CEOs to sign a business roundtable package that redefined the "purpose of a company" to include customers, employees, suppliers and the community as stakeholders.

Johnson paid tribute to former CEO Howard Schultz and other former executives for developing a "purpose that goes far beyond the pursuit of profits."

"That means we are going to invest and take care of our partners, whether it is health care, college performance," he said. "We have just exceeded the … target of hiring 25,000 veterans or military spouses. We have surpassed that goal three years early and we now have a rate of hiring 5,000 veterans a year."

"All the things you know add up to what we do to really drive a purpose that goes beyond the pursuit of profit."

After trading sideways for about three years, Starbucks & # 39; almost 50% this year. The stock climbed 1.9% to close at $ 96.50 on Monday.


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