The Starbucks Coffee Company’s First Quarter Fiscal Year 2016 Earnings Conference Call has recently been held to discuss the first quarter 2016 results. The call was led by Howard Schultz, Chairman and CEO; Kevin Johnson, President and COO; Michael Conway, President, Global Channel Development; and Scott Maw, CFO.
During the conference call, the company’s CEO Howard Schultz revealed that 21 percent of Starbucks transactions are done on mobile. Those are transactions either made in store at the point of sale (via the application) or using Starbucks’ application (with Mobile Order & Pay).
As said by Schultz, during the month of December, the figure was up to 22 percent. During peak hours, Mobile Order & Pay application accounts for 10 percent of all orders.
“We have just scraped the surface. We have bigger aspirations for our digital plan, and we are expanding our digital agenda across four key pillars,” he said.
The company has managed to take one of its greatest strengths — loyalty and customers dedicated to a daily habit — and monetize it with a service aimed at making the transaction and ordering process easier — via mobile. That is why CEO Howard Schultz calls his company the “undisputed leader in mobile commerce.”
Schultz announced that the number of active My Starbucks Reward members was 11.1 million, which is a 23 percent increase from the year prior. During the conference call, $1.9 billion was loaded on Starbucks cards in the U.S. and Canada.
As said by Schultz, in Q1, Starbucks delivered a 12% increase in revenue to a record $5.4 billion and 15% increase in non-GAAP EPS to a record $0.46 per share.
“Despite the significant investments we continue to make in our partners and in our business. And we served over 23 million more customer occasions from our global comp store base in Q1 and roughly 18 million more customer occasions in the U.S. alone and we did in our very strong Q1 last year.”
Concerning the Mobile Order & Pay application, Starbucks is now seeing 6 million transactions a month and has plans to expand to more cities and even more countries. China was a region that was specifically discussed during the conference as having great potential as Starbucks’ next big country to bring mobile ordering to. It was revealed during the call that 40 percent of transactions come from the Starbucks loyalty card. In China, the loyalty is already built into the business.
“We just can’t wait to introduce Mobile Order & Pay in China. It’s going to be a runaway success,” Schultz said.