Starbucks
Despite this success, the company is looking to achieve faster growth with its reinvention plan that involves increased automation, increasing speed, and an expanded loyalty program. As a result, the company now sees double-digit growth in revenue and earnings per share from its previous forecast of projected adjusted earnings per share growth of 10% to 12%, revenue growth of 8% to 10%, and global same-store sales growth of 4% to 5%.
CEO Howard Schultz said that the company was making 'self-induced mistakes' and had 'lost its way'. Many consider the changes long overdue given how the business has evolved with more people going through drive-throughs and the mobile app. Cold coffee drinks which take longer to make now account for 60% of orders.
It also plans to add 2,000 new stores by 2025 with a goal of 45,000 locations worldwide by 2025. The company is also restarting its stock buyback program which it had suspended earlier this year as it ramped up spending on store renovations.
The company is investing $450 million to upgrade its cafes with new equipment that will speed up and simplify operations. As an example, the company said that it would take 35 seconds to make a Mocha Frappuccino due to a new machine that handles many steps of the process - a significant improvement from the current 86 seconds. There are similar improvements for cold brew coffee and hot coffee that would increase automation and result in faster service. Automated ordering will also remove the bottleneck that can form at the register.
The company is also expanding its loyalty program by offering it at its licensed cafes which include airport locations and retailers like Barnes & Noble. It will also link the loyalty program to outside vendors like airlines and other retailers.
