Tag Archives: Troy Alstead

Business, Finance, Occupation & Industry

Why Starbucks Will Keep Raising Its Dividend

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By Tom Gardner, The Motley Fool

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In the video below, Motley Fool CEO Tom Gardner sits down with Starbucks CFO Troy Alstead during a recent visit to Starbucks headquarters in Seattle. In this portion of the video, they discuss whether Starbucks would be open to taking on more debt considering the low-interest-rate environment. Alstead says that the company is focused on using its cash flow to continue to raise its dividend, with a payout ratio of 35% to 40%. Alstead says he is committed to elevating that payout ratio, and that the company has considered taking on balance sheet debt in the future. 

A full transcript follows the video.

Starbucks is one of Tom Gardner‘s favorite stocks, but you can never have too many great companies in your portfolio. If you’re looking for more ideas, our chief investment officer has selected a different stock as his favorite for this year. Find out which stock it is in the free report: “The Motley Fool’s Top Stock for 2013.” Just click here to access the report and find out the name of this under-the-radar company. 

Tom Gardner: Why not, in this low-interest-rate environment, with your pristine balance sheet, more aggressively use leverage to expand more rapidly?

Troy Alstead: The answer to that is we might. We look closely at that. We haven’t needed funding. We have such a strength of cash flow in our business that we have committed to our dividend and committed to raising our dividend year after year, which we’ve been doing. We initiated that dividend at a 35[%] to 40% payout ratio a couple of years ago. I am committed over time, not immediately, but when we can, to elevating that ratio, to really growing that dividend as a way to return cash. We’re active in share repurchases. We believe that’s valuable to shareholders as one way to provide that distribution back. 

And we’re also heavily focused on: What’s the right balance sheet? Should we optimize it? So we are always looking at bringing some balance sheet debt on; at some point in time we may well do that. 

The article Why Starbucks Will Keep Raising Its Dividend originally appeared on Fool.com.


Tom Gardner owns shares of Starbucks. The Motley Fool recommends Starbucks. The Motley Fool owns shares of Starbucks. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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From: http://www.dailyfinance.com/2013/04/11/why-starbucks-will-keep-raising-its-dividend/

Business, Finance, Occupation & Industry

Starbucks CFO on the Company's Huge International Opportunities

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By Tom Gardner, The Motley Fool

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In the video below, Motley Fool CEO Tom Gardner sits down with Starbucks CFO Troy Alstead during a recent visit to Starbucks headquarters in Seattle. In this portion of the video, they discuss the massive international opportunities for Starbucks, particularly in China and India. Alstead says that China will be Starbucks’ second biggest market within the next couple of years, and that stores in India have seen huge demand after opening two months ago. 

A full transcript follows the video.

Starbucks is one of Tom Gardner‘s favorite stocks, but you can never have too many great companies in your portfolio. If you’re looking for more ideas, our chief investment officer has selected a different stock as his favorite for this year. Find out which stock it is in the free report: “The Motley Fool’s Top Stock for 2013.” Just click here to access the report and find out the name of this under-the-radar company. 

Tom Gardner: Let’s talk about international. You were very involved in international as part of your journey here to becoming [CFO] at Starbucks, and very involved in China. So let’s start with China. What is the potential market size? I know you call it your second home, your future second home, your future second home market at Starbucks is China, so what do you see as the potential and where, for example, do you think operating margins can go for the Chinese locations?

Troy Alstead: China, as you’ve heard us say, and as we’ve articulated publicly, is a huge opportunity. We’ll have thousands of stores there at some point. How many specifically? Hard to say. We have put out a public target to say a few years from now we’ll hit 1,500 stores on mainland China and at about 700 or 800 stores today, we’re well on the pace to get there. But that’s just a milepost to what is a much, much bigger opportunity, and that is even before we start talking about going outside of the Starbucks store with our products in other channels that has been so powerful for us in our more mature markets over time. 

So China is a tremendous opportunity. What’s interesting about China, and I think this is an important reflection as we look at the whole world, coffee consumption in China is very, very low. Coffee consumption before we entered and the whole idea of this Starbucks store, this coffeehouse environment that we offer, was unknown, it was unheard of to a large extent. 

Starbucks coming in and now a few others coming in around the edges, has really introduced to that consumer this experience, a place, all the things that other customers in other markets around the world have come to embrace over time, we are seeing that happen rapidly in China, and adopting our beverages, the innovation, and the experience in-store.

People are using it for business meetings, they’re using it for dates, they’re using it for a

Source: FULL ARTICLE at DailyFinance

Business, Finance, Occupation & Industry

1 Way Starbucks Keeps People Coming Back for More

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By Tom Gardner, The Motley Fool

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In the video below, Motley Fool CEO Tom Gardner sits down with Starbucks CFO Troy Alstead during a recent visit to Starbucks headquarters in Seattle. In this portion of the video, they discuss Starbucks’ loyalty card, including how the idea evolved and how it helps to increase customer loyalty and gift-giving.

A full transcript follows the video.

Starbucks is one of Tom Gardner‘s favorite stocks, but you can never have too many great companies in your portfolio. If you’re looking for more ideas, our chief investment officer has selected a different stock as his favorite for this year. Find out which stock it is in the brand-new free report: “The Motley Fool’s Top Stock for 2013.” Just click here to access the report and find out the name of this under-the-radar company. 

Tom Gardner: One of the things I loved reading about Steve Jobs in the Jobs biography and other things about Apple is just how many things he said “no” to repeatedly over time and then as they arrived, and so obviously there’s refinement to the idea over the years, so I’m wondering about the Starbucks Loyalty Card, the Starbucks card in that context. How did that one travel through the system as an idea and what is happening with that now?  It’s obviously been an incredibly pleasing result here…

Troy Alstead: Very powerful, and you’re right, that is an idea that when it first came up, time was not right. Not unlike drive-thrus in 1990. Loyalty in the ’90s was not the right time for that. We first introduced a Starbucks card non-loyalty, but as a transaction type, a store value card 10 years ago or so.  And at first it had no loyalty components on it, but it was transaction-only. So customers could load value onto the card, it was an easier way to transact in the store, and what we found over time is that customers loved that, even though it had no loyalty element to it, they loved that tool.

Tom: They gave it as a gift, also a gift tool.

Alstead: It became a very gift-giving tool, it became a transaction tool, it became a way to identify with Starbucks.  That had a lot to do with how it resonated over time, is that customers found that identification, that connection to who we are in their wallet or in their pocket every day meant a huge amount to them.

So as time went on and as our experience with the card grew, we began to recognize that perhaps there’s more to this. Perhaps there is an ability to use loyalty in some way. Then, as we came through our challenges in 2008 and really relooked at all elements of the business, loyalty as a tool came up again, came up as an idea to both help us incent our customers to provide them some value at a time when they needed value, when it was a challenging environment, when …read more

Source: FULL ARTICLE at DailyFinance

Business, Finance, Occupation & Industry

Why Drive-Thru Locations Are So Important for Starbucks

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By Tom Gardner, The Motley Fool

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In the video below, Motley Fool CEO Tom Gardner sits down with Starbucks CFO Troy Alstead during a recent visit to Starbucks headquarters in Seattle. In this portion of the video, they discuss why drive-thru locations are important for Starbucks. Alstead says that 60% of new locations opened in the U.S. will have drive-thrus. Drive-thru locations realize higher margins for Starbucks, and allow the company to expand to different areas, such as off-highway locations. 

A full transcript follows the video.

Starbucks is one of Tom Gardner‘s favorite stocks, but you can never have too many great companies in your portfolio. If you’re looking for more ideas, our chief investment officer has selected a different stock as his favorite for this year. Find out which stock it is in the free report: “The Motley Fool’s Top Stock for 2013.” Just click here to access the report and find out the name of this under-the-radar company. 

Tom Gardner: Can you talk about drive-thru locations and what’s happening there? The majority of your new store openings have drive-thru attached to them. They’re higher margin and I’m curious, is this opening up new real estate opportunities, new locations for you as well? I mean, is this opening up highways and putting you more in the… just a bunch of scenarios that Starbucks… when people say Starbucks has already saturated the market, when you opened up drive-thru opportunities, it broadens your opportunities. 

Troy Alstead: It absolutely does.  And we are a long ways from saturation, by the way, that’s clear to us. One of the things we learned in ’08 when we had to close some stores and we had to trim the portfolio and really relook at what is the potential depth of penetration in the U.S., even before you think about outside the country, and how can we get to more of that coffee consumption? That opened our eyes up to we had to clean the portfolio up and then we have years and years and years of growth left in the U.S. And some of that, yes, will come from accessing real estate and real estate opportunities that perhaps we couldn’t have got to quite so easily before. Innovative designs, different footprints, depth of penetration. We understand trade areas better than we ever have before, and yes, drive-thrus are an important part of that. We have fantastic economics through our drive-thrus. We’re providing a great experience to our customers who are on the go, they’re moving fast, they want that ability to stay in their car and experience Starbucks at the same time. 

We have about 40% of our U.S. store base today as drive-thrus.  But going forward, about 60% of the new stores we’ll open are drive-thrus, to your point. It’s about accessing real estate and intercepting traffic and providing customers more access. It allows us to get to some off-highway kinds of locations, for example, that perhaps a stand-alone cafe wouldn’t …read more

Source: FULL ARTICLE at DailyFinance

Business, Finance, Occupation & Industry

Starbucks CFO: Food Is a Huge Opportunity

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By Tom Gardner, The Motley Fool

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In the video below, Motley Fool CEO Tom Gardner sits down with Starbucks CFO Troy Alstead during a recent visit to Starbucks headquarters in Seattle. In this portion of the video, they discuss the big opportunity for enhancing the food offerings at Starbucks through the acquisition of La Boulange.

A full transcript follows the video. 

Starbucks is one of Tom Gardner‘s favorite stocks, but you can never have too many great companies in your portfolio. If you’re looking for more ideas, our chief investment officer has selected a different stock as his favorite for this year. Find out which stock it is in the brand-new free report: “The Motley Fool’s Top Stock for 2013.” Just click here to access the report and find out the name of this under-the-radar company. 

Troy Alstead: Food is a critical part of our business. It’s a long-standing, core part of that coffeehouse experience, and yet we’ve recognized we have opportunity to do more in food.  

Food represents about one-third of our transactions in our stores across our system today, meaning of all the transactions, the rings through the register every single day in our stores, one-third have a food item on them. What that tells you is two-thirds don’t. That’s the opportunity. Of those two-thirds who don’t have food on them, we’ve already brought the customer in the door, we’ve acquired them, and we don’t have to pay to get them in. We know they want to be at a Starbucks and they want to experience what we have to offer them, and many of them want food.

Our opportunity is to really innovate against the quality of the food, the appearance and how we merchandise it, how they engage with the food when they come in the store, how our partners inspire them to want the food that’s there, to create that opportunity for us to attach more food items on to those hundreds and hundreds of beverage transactions that we have for our average store every day.

We’ve made great progress over the last several years and slowly but surely elevating food, driving food as a quality of our business, growing it faster than our overall category ,and yet the La Boulange acquisition allows us in ways that we’ve been excited about for a long time now, to step-change that.  So over the next two to three to four years, I would fully expect within the store system, food with La Boulange as a catalyst, to be the No. 1 driver of comp growth as we go through the next few years. 

The article Starbucks CFO: Food Is a Huge Opportunity originally appeared on Fool.com.


Tom Gardner owns shares of Starbucks. The Motley Fool recommends Starbucks. The Motley Fool owns shares of Starbucks. Try any of our Foolish newsletter services free for 30 days. We Fools may …read more

Source: FULL ARTICLE at DailyFinance

Business, Finance, Occupation & Industry

Starbucks CFO: Tea Will Be Big Growth Driver

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By Tom Gardner, The Motley Fool

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In the video below, Motley Fool CEO Tom Gardner sits down with Starbucks CFO Troy Alstead during a recent visit to Starbucks headquarters in Seattle. In this portion of the video, they discuss what Alstead believes is one of the biggest growth opportunities for Starbucks: the recent acquisition of Teavana. Alstead points out that tea is the second most consumed beverage in the world, after only water, and is a good complement to Starbucks’ core coffee business. 

A full transcript follows the video.

Starbucks is one of Tom Gardner‘s favorite stocks, but you can never have too many great companies in your portfolio. If you’re looking for more ideas, our chief investment officer has selected a different stock as his favorite for this year. Find out which stock it is in the free report: “The Motley Fool’s Top Stock for 2013.” Just click here to access the report and find out the name of this under-the-radar company. 

Troy Alstead: Another item certainly in that top three or four would be Teavana. And tea as a general category, again, with Teavana being a piece of that, tea is the second most consumed beverage in the world, second only to water. Consumed more than coffee is, and it’s in the core, in the heritage of Starbucks.  It was part of the original name of our company, Starbucks Coffee, Tea, and Spices, and yet it’s been a category that we have not put enough focus into.  We have a fantastic brand in Tazo, but we recognize we have opportunity both through our stores and through the CPG channels and globally to really reignite what tea means to us.

Tea is wonderfully complementary to coffee. If you think about the U.S. consumer, coffee is about that morning experience. It’s get up and go, it’s moving fast, it’s on your way to work, it’s on the way to taking the kids to school. Coffee is more of a morning experience in the U.S.

Tom Gardner: Tea is at four o’clock when you’re watching Downton Abbey. 

Alstead: There it is. Tea is a slower, Zen-like experience for people. It tends to skew to the afternoon. It skews to the evening. It skews to the weekend.

Tom: Is Teavana going to be mostly separate locations from Starbucks? Will there be any combined locations or will there be a significant presence inside of Starbucks’ locations for the Teavana brand? 

Alstead: Tom, it will be both and more. There’s opportunity to leverage the premium nature of Teavana into Starbucks’ stores, and we will do that. To use the deep capabilities that that Teavana team has around tea sourcing and blending, the wonderful things they do, brought together with our capabilities around beverage innovation, around store execution and to bring that capability into the Starbucks store, and we think add some layers of growth within Starbucks and to help us drive day-parts, which are also a critical part of our strategy.

Another leg of that Teavana growth …read more

Source: FULL ARTICLE at DailyFinance

Business, Finance, Occupation & Industry

Starbucks Introduces Innovative Cross-Channel, Multi-Brand Loyalty Program and Announces Global Soci

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By Business Wirevia The Motley Fool

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Starbucks Introduces Innovative Cross-Channel, Multi-Brand Loyalty Program and Announces Global Social Impact Initiatives at Annual Meeting of Shareholders

Company Recognizes the Contributions of its 200,000 Global Partners (Employees) in Delivering Record Financial Performance and a 38% Total Return to Shareholders in Fiscal 2012, Reaffirms Long-Term Growth Targets

SEATTLE–(BUSINESS WIRE)– Howard Schultz, chairman, president and ceo of Starbucks Coffee Company (NAS: SBUX) , opened the company’s Annual Meeting of Shareholders by recognizing company partners (employees) and highlighting the company’s continuing robust operating performance. Schultz and other company executives announced a breakthrough innovation in Starbucks loyalty and rewards program, shared progress and future plans for its recent La Boulange, Evolution Fresh and Teavana acquisitions and offered a comprehensive overview of how Starbucks is using its global scale to create positive, local impact in the communities where it operates and where its partners and customers live and work.

Annual meeting highlights included:

  • Thanks and appreciation from company shareholders via webcast to the 200,000 Starbucks partners around the world who deliver the Starbucks Experience to over 70 million customers in 62 countries each week.
  • The announcement by Adam Brotman, chief digital officer, of an expansion of the company’s loyalty and rewards program, and an industry-first innovation that will enable customers to earn rewards for grocery channel purchases that can be redeemed in Starbucks retail stores and is expected to double the number of customers enrolled in the company’s programs in fiscal 2013.
  • Brotman also announced that Starbucks mobile payment platform is now generating over three million U.S. mobile payment transactions per week.
  • Blair Taylor, Starbucks chief community officer, announced the launch of a new nonprofit corporation with a $1 million seed grant to introduce job skills, leadership and apprenticeship programs to young people across the company’s multi-billion-dollar supply chain, and further expansion of the company’s support for U.S. manufacturing through an order for 100,000 ceramic mugs from a supplier in Ohio whose operations Starbucks helped expand through previous purchasing commitments.
  • A discussion by Troy Alstead, chief financial officer, of region-by-region and individual segment performance for fiscal 2012 and a reaffirmation of the company’s fiscal 2013 revenue and EPS growth targets.
  • Schultz’s recognition of Starbucks 15-year business …read more
    Source: FULL ARTICLE at DailyFinance