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Well, can Starbucks continue to heat this kind of home-runs? Joining me now / the man who created it, its founder, its chairman, its, I guess big one -Howard Schultz .
Hi, Neil ,how are you doing ?
I am fine, good to have you .
Thank you .
We believe in a lot of razmataz(razzmatazz) in drums and music when we introduce big guests, so, good to have you on. Let, let's talk what happened here, I mean, I, I remember during the holidays a lot of people were taking the advantage of gift cards and special coffees, but what, what was it ?
Well, I don't think it was one thing, I think when you have a quarter like this, er, coupled with January results of 10% incomes , you can sense of the underlining business is quite strong and forward momentum on a go-forward basis is as well. What I think is going on is that the relevancy of the Starbucks' experience, er, coupled with the fact that we have become such an extension of people's lives, not only here at home, but now around the world. Our international business had 79% increase in operating income. Our business in China continues to do well on a unit level, and domestically as you mentioned in your remarks are the Starbucks' gift card really had er, the kind of reception that we didn't plan on, and that bodes significantly well for the balance of the year because those cards are starting to come back to us now.
Let me ask you...
I think all, er sorry.
But, but the only thing I don't understand, I know there is a mystic and cult status to Starbucks, but what do you think of the people who seem to sit in there all day long? They don't leave. (We don't,)They nurse(We) a single latte, (No, we)and you can't kick them out.
Huh huh huh. We love it, we love it because Starbucks has become the third place between home and work, and as I said an extension of people's lives, and...
But, but Howard, come on, come on , some of these guys, come on, some of them have to get lives, they love the coffee ,and I can understand that it's great stuff. But they don't leave. They nurse the same thing. A lot of other people are looking for the same seat. What do you tell them?
No, er, we have not had that kind of problem, Neil. I think you're going to too busy of a store, you should go across the street to Starbucks .
Ok, by the way, they are all pretty busy. But, let me ask you ur, this. Your expansion plans, er, the 516 new stores in the latest quarter, you are opening up, I think, eighteen hundred a year, thirteen of them, a hundred here, five hundred abroad, too much? too fast?
Well, not at all. I mean, if you go back to the history of the company , we have been a growth company for the last 20 years and the hallmark of that growth has been our ability to invest ahead of the growth curve in people'systems and infrastructure and that's exactly what we've been doing . We're opening 5 new stores a day. We are serving 40 million customers a week, and we are in a position right now to really capitalize on the investments we've made over the last couple of years. You are seeing that in a kind of quarter which had record earnings, and we are very optimistic, we invent the cards for the balance of the year by raising estimates, and very optimistic about the balance of the year, and specifically what is going on internationally and in China.
Um, are you dating Maureen Dowd ?
Ha ha, no, no, I think,
She showed up, she showed up at a Seattle on a book-signing event at your, one of your stores I guess. Everyone is saying you and her are an item, aren't you?.
No , I am a happily married man, and Maureen Dowd is a good friend of mine. I took her out to dinner on a book tour at Seattle and there you have it .
Alright, cause she was singing your praises , but there is nothing going on. I don't want to get personal with you. I am sorry I even mentioned it, don't...
No problem, Neil.
That was out there. The other thing, too. With the crowds in the stores, er, they pay a lot for the coffee they get. It's good stuff, we all know that, but do you think there, there is a limit to that? I know , you are going to expand a warm sandwich zone. Do you think there is a limit on that?
Well, I think the limit is always based on whether or not any retailer is providing the kind of value service and experience that people think is consistent for value, for their money. When you look at the fact that, month over month, we have not only increased incomes, but increased significantly in traffic, what it demonstrates to you is that Starbucks is providing much more than a cup of coffee, and we are able to create experiences to complement the Corp-Business. And I think our customers are voting very strongly, domestically , and internationally that Starbucks(All right.) is such an important part of their lives .
All right ,Howard, great having you on. Thank you very much, and even for indulging the stupid personal questions, all right , thank you!
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