Financial Data and Key Metrics Changes - Consolidated revenue for Q4 was $9.6 billion, reflecting a 5% increase year-over-year, driven by 2% net new company-operated store growth and a 1% increase in global comparable store sales [22][24] - Earnings per share (EPS) for Q4 was $0.52, down 34% from the prior year, primarily due to inflation and investments in the Back to Starbucks strategy [27][32] - Consolidated operating margin was 9.4%, contracting 500 basis points from the prior year, mainly due to inflation and increased labor costs [26][27] Business Line Data and Key Metrics Changes - U.S. comparable store sales were flat year-over-year, with ticket up 1%, while transaction comps were down 1% [22][24] - International segment reported 9% year-over-year net revenue growth in Q4, reaching over $2 billion, with strong performance in China, Japan, the U.K., and Mexico [24][25] - The channel development segment saw a 16% year-over-year revenue growth due to higher revenue from the Global Coffee Alliance [26] Market Data and Key Metrics Changes - The international business ended the year with record revenues of $7.8 billion, with 316 net new coffee houses opened in Q4 [14][24] - Starbucks China achieved 2% comparable store sales growth in Q4, driven by a 9% improvement in comparable transactions [24][25] - The college and university segment showcased year-over-year growth, supported by a good start to the fall semester [24] Company Strategy and Development Direction - The company launched the Back to Starbucks strategy to enhance customer experience and improve profitability, focusing on customer connection and craft [4][6] - Investments were made in staffing and hours to improve customer service, with the Green Apron Service becoming the new standard for customer experience [7][8] - The company is piloting a new coffee house prototype with lower build costs and optimized space utilization to enhance customer experience [10][11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the turnaround strategy, noting that Q4 marked the first positive quarter in seven quarters, with momentum continuing into Q1 [4][30] - The holiday season is expected to be a significant opportunity for growth, with a focus on delivering a warm and welcoming environment [15][16] - Management acknowledged the challenges posed by inflation and dynamic coffee prices but remains optimistic about long-term growth potential [31][32] Other Important Information - The company completed 107 net store closures globally as part of its restructuring efforts, which are expected to be slightly accretive to profitability [27][28] - The company plans to continue disciplined capital deployment and expects to reduce G&A expenses in fiscal 2026 [29][30] Q&A Session Summary Question: Concerns about the Back to Starbucks strategy - Management clarified that the Back to Starbucks strategy is comprehensive and aims to enhance customer connection and craft across all service channels, not just in-cafe [34][36] Question: Feedback on the Protein Platform - The Protein Platform has received positive feedback, with customers appreciating the customization options and value, leading to increased awareness and sales [40][42] Question: Current state of Green Apron Service - Management noted that the Green Apron Service is still in its early stages but is showing positive trends, with initial pilot stores outperforming others [46][48] Question: Impact of store closures on profitability - Store closures were based on the inability to meet customer experience standards and profitability, but they are expected to positively impact overall margins [66][68] Question: Future pricing strategy - The company plans to be strategic with pricing, monitoring value perception while addressing inflation and commodity costs [75][76]