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Starbucks Launches Virtual Store In China; To Roll Out Nitro In All U.S. Stores

Starbucks Corp. (SBUX) said it launched its first-ever, virtual Starbucks store today in China. It announced long-term growth algorithm delivering double-digit growth in non-GAAP earnings per share. It plans to roll out Nitro Cold Brew in all U.S. company-operated stores in fiscal year 2019.

The Chief executive officer Kevin Johnson and other members of Starbucks leadership team updated investors and analysts on the company's strategic priorities as it aims to expand its retail store portfolio by approximately 6% to 7% net new units and grow same store sales by 3% to 4%, globally, each year while continuing to invest in its partners and elevate the Starbucks Experience.

In his first Investor Conference presentation as Starbucks executive vice president and chief financial officer, Patrick Grismer reiterated the company's fiscal year 2019 targets, while also articulating a sustainable double-digit non-GAAP earnings per share growth model for the future.

Longer term, Starbucks expects consolidated revenue growth of 7% to 9% and non-GAAP earnings per share growth of at least 10%.

Starbucks announced it plans to roll out Draft Nitro Cold Brew to all U.S. company-operated stores by the end of fiscal year 2019.

Starbucks said it continues to see significant promise in its digital initiatives as an enabler for customer convenience, awareness and value. To unlock further growth, the company announced three key areas of focus expected to drive 1 to 2 points of comp, including new member acquisition and related spend lift; further adoption of Mobile Order & Pay and the habituation it drives; and upcoming enhancements to the popular Starbucks Rewards loyalty program enabling customers to redeem for a variety of options, and to earn rewards even faster.

Starbucks group president, International and Channel Development John Culver provided an update on the strategic partnership in China with Alibaba Group, which was announced in August.

As part of this partnership, Starbucks is launching its first-ever, virtual Starbucks store today in China. The virtual Starbucks store provides customers a one touch digital Starbucks Experience, utilizing the Starbucks app and Alibaba's customer-facing mobile apps, including Taobao, Tmall and Alipay.

Starbucks said it has been working with Ele.me, China's leading on-demand food delivery platform with 3 million registered delivery riders, to bring a delivery experience to the market. Starbucks has also piloted two 'Star Kitchens' within two FRESHIPPO (previously known as Hema) supermarkets in Shanghai and Hangzhou, making Starbucks the first retail brand to establish a dedicated back of house presence in FRESHIPPO locations to utilize its distinct fulfillment and delivery capabilities to further reach and better serve customers.

As part of the Investor Conference today, the company announced Starbucks Delivers has reached 2,000 stores across 30 cities in China since launching three months ago.

The company recently initiated pilots of Starbucks Delivers in both Tokyo and Miami with Uber Eats. Today, Starbucks announced plans to expand Starbucks Delivers to nearly a quarter of its U.S. company-operated stores in early 2019.

Under the Global Coffee Alliance, Starbucks and Nestlé are moving with speed to innovate and develop go-to-market strategies for the global rollout of Starbucks At-Home Coffee portfolio.

Starbucks announced that both companies have developed a range of Starbucks-branded products for the Nespresso and Dolce Gusto platforms and Roast & Ground and Whole Bean coffees. The launch of these products in traditional CPG and Foodservice channels will take place beginning in the spring of next year.

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