At this time, I would like to welcome everyone to Starbucks Coffee Company’s third quarter fiscal year 2014 earnings conference call. [Operator instructions.] Ms. DeGrande, you may begin your conference call.

Thanks, operator. Good afternoon. This is JoAnn DeGrande, vice president of investor relations for Starbucks Coffee Company. Joining me on the call today to discuss our fiscal third quarter results are Howard Schultz, chairman, president, and CEO; Troy Alstead, COO; and Scott Maw, CFO. Also joining us for Q&A are Cliff Burrows, group president, US and Americas; John Culver, group president, China, Asia Pacific, and channel development; and Matt Ryan, global chief strategy officer, who is part of our digital team, along with Howard and Adam Brotman, our chief digital officer. This conference will include forward-looking statements, which are subject to various risks and uncertainties that could cause our actual results to differ materially from these statements. Any such statements should be considered in conjunction with cautionary statements in our earnings release and risk factor discussions in our filings with the SEC, including our last annual report on Form 10-K. Starbucks assumes no obligation to update any of these forward-looking statements or information. Please refer to our website, at investor.starbucks.com to find a reconciliation of non-GAAP financial measures referenced in today’s call with our corresponding GAAP results. This conference call is being webcast and an archive of the webcast will be available on our website later today. Before I turn the call over to Howard, I would like to remind you again of our biennial investor day taking place the first week of December in Seattle. We’re in the early planning stages, and invitations will be sent in the fall. We hope you’ll be able to join us for the first conference in Seattle since 2006. With that, I’d like to turn the call over to Howard.

Thank you, JoAnn, and welcome to everyone on today’s call. Starbucks Q3 represents another quarter of outstanding operating and financial performance around the world, demonstrating once again the power and relevancy of the Starbucks brand and the success and scalability of our business model and go-to-market strategies. Today, over 300,000 Starbucks partners are serving over 70 million customers from almost 21,000 stores in 65 countries every week. I’m particularly pleased to report that each of our reporting segments delivered solid performance in Q3 and contributed to our accelerated 11% increase in revenues to $4.2 billion. Particularly noteworthy is that our U.S. retail store business delivered comp growth of 7%, ahead of our own expectations and a stunning achievement on a base of over 6,800 stores against 9% comps in Q3 last year and in the face of continuing challenging U.S. economic and consumer environments. Over the last two years, our U.S. business has produced revenue growth of over 22%. Our business in China, now approaching 1,300 stores, has never been stronger, contributing to a strong comp growth of 7% in China Asia Pacific. And EMEA demonstrated continued progress against transformation plan, delivering comp growth of 3% with key U.K. market comps outpacing the EMEA regions overall. Globally, store comps grew 6%, our 18th consecutive quarter of comp store sales gains of 5% or more. Innovation and share expansion also drove strong gains in our premium single-serve packaged coffee and tea portfolios, contributing to a solid 13% increase in channel development revenues. Overall, our operating performance in Q3 resulted in a 200 basis point expansion in our consolidated operating margin to a Q3 record of 18.5%, and a 22% increase in earnings per share to a Q3 record of $0.67 per share. The results we announced today reflect the success of…

Thanks, Howard, and good afternoon everyone. Our third quarter results are a testament to the growing strength and global relevancy of the Starbucks brand. Q3 performance was driven by continued beverage and food innovation, deepening our connection to customers and elevating our customer experience through phenomenal execution by our partners. I’ll discuss our third quarter performance for each reporting segment and then turn the discussion over to Scott for additional details on our financial results, our outlook for the balance of fiscal ’14 and preliminary targets for fiscal 2015. Each of our reportable segments set new third quarter records for revenue and operating income. Let me start with the Americas segment, which delivered another quarter of strong results, despite a persistently difficult retail environment. Total net revenues in the Americas were $3.1 billion in Q3, up 10% over the prior year. The largest driver of this increase was strong comp growth of 6%, with 4% coming from ticket growth and 2% from transactions. These results are particularly significant given the 9% comp we were lapping from a year ago. Comp growth for our U.S. business outpaced that of the Americas, accelerating to 7%. One of the primary drivers of this growth is the strong progress we’re making with food. The improved quality and variety of our food offerings once again drove 2 points of comp growth, and we expect that the ongoing innovations we’re planning will continue to drive comps in the coming years. In addition to providing a meaningful contribution to our comp growth, our food program is also driving significant margin improvement. Working closely with our vendors, we’re benefitting from improved manufacturing costs. In our stores, our efforts to improve inventory management and waste are paying off. A major contributor to our success in food is our breakfast…

Thanks, Troy, and good afternoon everyone. Our business has performed exceptionally well once again this year, and the third quarter continued that trend, thanks to fantastic execution and customer focus by our partners across the globe. I’m particularly pleased with our consolidated comp store sales, which increased 6% and revenue growth of over 11%. Our consolidated operating income grew 25% to $769 million, a new third quarter record. This translates into 18.5% operating margin, an increase of 200 basis points over the prior year. In terms of segment profitability, operating income in the Americas grew to $728 million, up 18% over the last third quarter. Operating margin expanded 150 basis points to 24%, primarily driven by strong sales leverage. These are clearly fantastic results, and our 7% U.S. comp growth in particular takes on even greater significance given recent same-store sales trend data reported by many other retailers. EMEA’s profitability continues to improve as we remain focused on the turnaround in that market. Operating income more than tripled to $29 million over the prior third quarter and operating margin expanded 580 basis points to 9%. Sales leverage, combined with our intense cost focus throughout the P&L, were key drivers to the margin expansion. We are also very pleased with the performance in China Asia Pacific, which delivered strong operating income exceeding $100 million for the very first time. This 19% increase over last year, which translated into a 35% operating margin, reflects particularly strong performance from China company owned stores and our JV partnerships in South Korea, Japan, and East China. The ongoing portfolio shift towards more company operated stores and the impact of unfavorable foreign currency exchange from a weaker yen were partially offset by strong sales leverage, leading to a 120 basis point operating margin reduction. Margin expansion…

[Operator instructions.] Your final question comes from Matt DiFrisco with Buckingham Research.

On the same-store sales front in the U.S., commentary on sort of the contributors to that as far as what you’re seeing from food and other items that might be driving that, and even very early results, but results that you see in the markets where you have Fizzio, if that encourages you to maybe even expand that out further.

We’re very pleased with the strength of the 7% comp in the U.S. business. It is a mixture of both ticket and transaction. We have seen continued strength from our food business, as we roll out that launch. It has been a contributor of 2% to the comp in the quarter. It has been underpinned and supported by beverage innovation, whether it is the iced teas from Teavana or whether it is Fizzio in its early days, in the Sun Belt region. And also, the Frappuccino limited time offers this season have also performed strongly, so really, really pleased in company operated and licensed, and with our new store performance. So all around, very strong performance in the U.S.

I would just add, it’s clear to us that we have a significant opportunity in the need state of refreshment. And shaken Teavana iced tea and Fizzio has reaffirmed that, and we see that as just the beginning of both afternoon and evening opportunities. And we are bullish on all things tea, and we are excited about what’s happening with the introduction of Fizzio. Just the beginning.

Your next question comes from Keith Siegner with UBS.

Just a quick question on channel development. Very strong numbers. Particularly on the margin, and what’s most impressive is those margins are before you even include the pricing [unintelligible]. So I was just wondering, maybe Scott, if you could talk a little bit about, as we think through the channel development margins during the next few quarters, what other factors do we need to consider in modeling out that margin beyond the late July price increase? Are there investments you’re making? Mix changes? International? What other factors should we consider?

I’ll take that question. In terms of the margin expansion, we’re very pleased with the 800 basis point improvement on the quarter. We’re seeing strong execution across all categories. If you look at our share growth across packaged coffee, across K-cups, as well as RTD and Tazo tea, huge share gains in each of those categories, so very pleased with that. What’s driving that is the innovation that we’re pushing into each of these areas, in packaged coffees with limited time offerings, single origins, new K-cup SKUs coming into the mix with the Blond product as well as the flavors. We’ve got innovation coming in in tea. And then couple that with the fact that we saw strong execution down the aisle from a display standpoint. We feel as though we’re hitting on all cylinders in terms of what the team’s delivering. We also had some upside as it relates to coffee costs in the quarter, which helped contribute to the margin expansion. And we’re really focused and disciplined on managing the operations in a way that is going to continue to drive growth on the bottom line. We’re very much encouraged in terms of these stars down the aisle, and the fact that we had 1.5 million members redeem nearly 7 million stars since we introduced that program. And that program continues to gain traction. And then we also have the Starbucks siren, the Starbucks siren down the aisle that we have about 400 locations that we’re targeting to have built out by the end of this year, which is also helping us as well.

The next question is from Jeff Bernstein with Barclays.

Just looking at the Americas specifically, in terms of the comp, it looks like the last few quarters the ticket continues to rise. So it was 1%, then 3%. Now it’s 4%. Related to that, a couple of question. Just one, I’m wondering whether that’s a conscious push of maybe premium products if there’s anything in particular, whether that’s being driven by food. And then as it ties into food, I’m just wondering, it seems like lunch, the rollout was targeted for fiscal ’15. I’m wondering what you expect the contribution to be. I’m assuming that it will be meaningfully incremental relative to the breakfast and maybe boost up that 2 percentage point contribution. Any thoughts on that would be great.

There’s no doubt that the work we’ve done with food over the last two years, with the investment in La Boulange and then the rollout of these fantastic new morning pastries, and the products around all day parts supported by whether it’s pastries [unintelligible], loaf cakes, all of that is really helping us to increase our attach. And it is giving us an opportunity to improve quality. And we’ve had a benefit from ticket in their area. We also went in and we are now in, I guess, our 10th year of breakfast sandwiches. And we did a major overhaul and upgrade of the ingredients. And we really did see a 40% growth versus the previous year. So there is absolute confidence that we’re heading in the right direction with food. As Troy said earlier, we introduced two new lunch products, two new sandwiches, and we’ve seen those perform well. And we are testing in a couple of markets a lot of innovations around lunch. And we will keep testing. And as we prove out new products, new ideas, we will roll them out. And really, that will happen from now throughout 2015. As Howard said, the beverages we’ve got around refreshment, whether it’s the iced shaken teas from Teavana, or whether it is Fizzio, they again support this lunchtime occasion. We’re equally excited about the opportunity with evenings, and that is not just around the wine and beer element, but it will be around food, the opportunity to sell tea and coffee beverages, and we’re in the early days there. So there is an opportunity for us not only to continue to grow transactions, but also to grow ticket in different day parts.

I would add one thing, and I think this is an important opportunity to make this statement. Food at Starbucks, I think we could all admit, for many, many years was a weakness and a challenge for us, and I would say, unequivocally, with the acquisition of La Boulange and the execution of Cliff and his team, has now become a significant strength and a driver of multiple occasions, need states, and the opportunity for Starbucks to leverage day parts that we did not have access to before. And we’re just getting started.

The next question is from Joe Buckley with Bank of America Merrill Lynch.

Maybe some follow up on the recent food comment. Can you talk about food attachment rates? I guess I’d be most interested in the morning day part, but maybe in total, and how those are trending, where you think they might go? And then I wanted to ask one more, too, on the expansion. The Americas number being bumped up by 50 units this year, is that in the United States? Or someplace else within the Americas? That you’re raising that target?

First, on food, we don’t specifically disclose specific attach rates, so I won’t give you a specific number to hang on. I will tell you, though, unequivocally, we are selling more food in the morning day part. Food is becoming an increasing driver - the fastest transaction growth we have in our entire store system is happening at midday and into the afternoon. And food, along with the refreshment category that Howard has spoken about, is the primary driver of that additional day part expansion. So across all throughout the day, food is giving us an uplift in ticket, is contributing to, we believe, traffic growth into the stores, and there’s no question it’s driving an improved customer experience and frankly, increased pride among our partner base as we elevate the food program. So very, very healthy results all around. And at our investor conference this fall, we look forward to telling you about what the next wave of that looks like as we’ll go deeper into our expanding lunch program at that point in time. In the U.S. stores, and I’ll make a comment, Cliff may jump in here, but what has been one of the most phenomenal stories for us in the past year or two or three has been first recovery several years ago but now the phenomenal returns we’re seeing from new store growth and acceleration of that growth in our U.S. and broadly in the Americas, but specifically within the big system of the U.S. The new store formats, flagship stores as Howard spoke about earlier, footprints that allow us to reach traffic that we never had access to previously, all are contributing as we’re growing the system to an opportunity in the U.S. for an accelerating store growth both this year, which you saw in our revised targets today, but as we go into the coming years ahead, beyond any expectation we had previously. You’ll see us continue to drive more stores throughout the U.S. in addition to day part expansion, comp growth, and increasing margin expansion and return on capital across the system. We’re very pleased with what we’re seeing across new stores in the U.S. market.

I think I’d only add two other things. The opportunity that we identified a couple of years ago around drive-thru, that continues to strengthen. And I think the other thing is the geographic opportunity across a wide geography of the U.S. is what encourages us that this is a really good base to build on. And Troy said it, with the quality of the real estate and our absolute discipline maintaining our sales to investment ratio of two to one, and I also think the design quality, the team we have now, and you’ve seen some great stores around the globe, but some of the stores we’re now opening - you know, New Orleans in Canal Street is just phenomenal. Disney, Anaheim, just wonderful, wonderful stores that are really stretching those and giving us an opportunity to attract new customers and give us locations that we’re incredibly proud of. And customers are reacting so well to these new locations.

The next question is from David Tarantino with Robert W. Baird.

Scott, I had a question about the comments you made in reference to the fiscal 2015 guidance. I think you referenced some investments that you’re planning to make, and I was wondering if you could elaborate on those and potentially the magnitude of those investments. And then secondly, if you could talk about, I think in the past you’ve talked about the ability to carve out some costs out of the P&L through productivity and efficiencies. And I was wondering if those might start to kick in next year and offset some of those investments.

On the first part of that question, we make a number of investments across the business to make sure that we can continue to drive the growth that you saw in this quarter, and so far this year. And those include things that we’ve talked about before, around digital investments, technology investments, investments in our partners and in the stores, some of the things Howard talked about around innovation, around store design. All of that is an ongoing thing that’s there to some level every year. As we look forward to next year, there are some of those areas where we’ll go a little bit farther, where we see an opportunity to extend our lead. For example, in digital card and mobile. We see things that we can do there. We’re going to support that with the right level of investment. Obviously, the overall revenue growth is more than offsetting that. We’re still expanding margin. But we’ll continue to set aside that amount of investment as we see fit, as we go through time. We’ll be more specific as we get through the fourth quarter and finalize our operating plan. We’ll be able to sort of articulate a bit more about what those investments are. But that’s the general scope of what we’re talking about. And we do have, baked into the numbers that we’ve shown you, an increase in a leverage, particularly around cost of goods sold and working capital, which we’ve talked some about. So when you look at the target, every year we come out with a target for our supply chain organization. They’ve done a tremendous job of hitting those targets. But when we look at the targets that we’ve set for next year across a number of different factors, we’ve actually taken that up significantly, and that’s contributing to the overall range that we’ve provided.

Let me punctuate a comment Scott made, and that is that we are very, very bullish about the fourth quarter ahead, and about fiscal 2015. The targets we provided to you today that Scott’s outlined reflect another quarter ahead of us as we finish out fiscal 2014 of very, very strong top line growth and earnings growth, earnings per share growth, equal or better than what we just delivered in the third quarter. As we move into fiscal 2015 we’re once again committing to double digit revenue growth to earnings per share growth in that 15% to 20% range, which we have consistently delivered for years now. And we can reaffirm that we will keep, as Scott has articulated, investing back into the business to drive that growth, take care of our partners, to make investments to the future, to make sure that this trajectory that we’re on is sustainable. And we anticipate making those investments and delivering another fantastic year ahead.

Our next question is from Sara Senatore with Sanford Bernstein.

I actually wanted to ask a question on digital and mobile. Essentially, I think a couple of calls ago, or maybe last call, there was talk about potentially other retailers being interested in using the Starbucks platform. You know, white labeling I think. Could you talk about whether there’s anything else to update us on? I mean, from the perspective of what you might think of as offering from a Starbucks ecosystem around that or where you’re going longer term with that?

We can tell you right now that we are in a series of very active conversations on this with both technology and financial services companies that would be potential partners here. And while those conversations are going on, I can’t tell you the specifics of them, but what I can tell you is we remain absolutely confident in the nature of the opportunity here, both in terms of what we’ve started with mobile loyalty as a platform as well as the appeal of stars as currency. And I’ll leave it at that, and you’ll hear more from us in the future.

The next question is from John Glass with Morgan Stanley.

I wanted to ask about digital too, but on the potential for ordering on the mobile platform. Are your stores currently equipped to handle mobile ordering such that there’s technology for the baristas to see an order come in? And some other retailers that have started to do this have seen a work process reengineering, because there’s [unintelligible] that cash register as being the flow meter for products. Suddenly, there’s the potential for a lot more velocity of orders to come in quickly. So are you thinking about labor reallocation in stores as you start to test this?

I just want to frame this issue for you. I think at our core, the hallmark of everything we’ve done for now, 40-plus years, has been the customer experience. We want to do everything we can as a company historically and in the future of really not becoming a fast food classic QSR company. And so the experience of Starbucks is really based on customized beverages and really creating this third place between home and work. And we’ve created that now around the world. It’s clear to us in our research that express order and pay is a big, big idea, and a big enough idea that can create significant incrementality if done right. And I think the operative phrase here is, “if done right.” This is not something we are coming to overnight. This is something that has been very thoughtful, very disciplined, and part of the digital team of people, wide swath of people, looking at this to ensure the fact that not only do we deliver the capability, but we do it in a way that does not dilute the integrity of the Starbucks experience. And I can tell you unequivocally that Cliff and his team are going to execute this in a way that is going to be seamless and accretive to the Starbucks experience.

Thanks, Howard, and the opportunity that our mobile MSR platform affords is just incredible, because we know the customers, they know how to use that technology in our stores, and I really see this as a great enhancement. As you can imagine, we’ve got a lot of people working on this to make sure the input comes in in the right place, the production falls into line with our regular rhythms, and that we are very clear on the handoff, how do we keep that interaction between our barista and the customer. And really, it enhances the relationship we have with the customers, and we think this is going to be just such a great opportunity to increase capacity in stores at peak and just find new ways to fit into customers’ lives. And we’re going to do a significant market test before the holiday, and I’m sure we’ll learn from this and very rapidly then we’ll start to roll out.

The next question is from Bonnie Herzog with Wells Fargo.

First, I have just a quick follow on question from earlier, on Fizzio. Could you quantify any potential lift you saw in the quarter, and the lift you’re ultimately expecting. And I’d be curious to hear if you think it’s in fact attracting new customers or primarily driving additional day parts. And then I was hoping you could talk about any new relationships you’re forming and distribution agreements you’re signing to build your multibillion dollar global coffee packaged business, and what you’re looking for in these partners, especially as you try to increase your global points of distribution, which actually could prove to be quite challenging.

We had the real benefit of testing Fizzio. We tried to test it kind of under the radar, but many of you heard about it and saw it. That was last summer in Atlanta and Austin, and Tokyo and Singapore. So we had a lot of insight, a lot of knowledge, and we saw firsthand that we were creating something that had a day part opportunity and a refreshment need state that was beyond and accretive to Starbucks core products and core morning day parts. And that is what’s playing out. In addition to that, as Cliff said earlier, the food attachment that is linked to refreshment beverages, I think, is going to prove to be a plus for Starbucks. And with have certainly seen that with shaken iced tea on the Teavana side, and now with Fizzio. It’s still early. I can tell you we’re enthusiastic. It’s a proprietary machine. I think our customers really like the fact - and this is something we saw in test and we’re seeing it play out - in addition to the three Fizzio flavors, not unlike almost everything we do at Starbucks, our customers are now responding on their own and creating their own customizable carbonated beverage that is not even close to anything we’re offering. So we’re seeing an opportunity to leverage carbonation beyond the initial flavor profile. And this is something part and parcel with Frappuccino for 20 years. And it’s very interesting. It’s exciting, and we’re just giving it to the customer and let them be in control. And that’s benefitting Starbucks. With regard to packaged coffee and global partnerships, I’ll give that to John.

Today, we operate in 30 countries selling our either packaged goods or ready to drink product. Right now we’re really focused on continuing to expand both the partnerships, but then also our opportunity for distribution in new countries, as well as going deeper in our existing countries. We’ve seen strong performance in China, in the U.K., in Canada this year, which is driving our international growth. And we continue to look at opportunities for business partnerships who have capabilities in the areas of manufacturing, in the areas of sales, also in the area of distribution as we identify potential business relationships. But this is an area that we are investing heavily in as a company. We see it as a future growth driver for the channel development business, since we’re only in about half of our total markets we’re in around the world.

We’ve always believed that we had to be able to create the equity of that Starbucks brand in our retail stores first, create kind of impressions, the economies of scale, and the emotional connection in our stores, and then sequentially, as a result of that, be able to create new channels of distribution. And as a result of that, the success we’re seeing, and you saw it this quarter, is a result of the equity in the Starbucks brand being now available in places where people can find coffee and other Starbucks products where they shop for food. And you know, I’ve said this before, but we are probably the only traditional four-wall, bricks and mortar retailer that has now created multiple channels of distribution outside of our store base. One reason for that is we’re a company owned system, so we don’t have the franchise relationships, and we’re not encumbered by them. But the other thing is the fact that our customers want Starbucks coffee and related products outside of our stores. And when you look at comps of Starbucks at 7% U.S., what’s not in the P&L, and probably was not in our remarks, is not only are we achieving 7% comps on a base of 6,800 stores, but we’re also self-cannibalizing many, many things that we sell in our stores by having 100,000 points of distribution of Starbucks coffee and related products throughout the United States.

The next question is from John Ivankoe with JPMorgan.

La Boulange and Evolution Fresh are about to be fully national within the company, at least the company store base within the U.S. Does this give you an as of yet taken advantage opportunity to market nationally the improvement and differentiation of these product lines? I ask this in the context, as I was surprised to see Teavana Shaken Tea on television these past months, and I was curious how advertising that product in a fairly new way did, and if you might see a similar reaction to some of your other sub-brands.

Let’s talk about Teavana fist, because I think it’s a very interesting case test and study. When we acquired Teavana, the going in assumption was we’ve got a $90 billion category that we believe was ripe for innovation. But we also had the inherent benefit of the opportunity to not only expand Teavana traditional stores in the U.S. and around the world - and I think over time, it will prove out that Teavana’s greatest strength is going to be outside of the U.S. But that’s for another day. But I think the benefit going in was the fact that we believed that we could create significant incrementality inside Starbucks. Our tea business, before the acquisition, was less than half of 1% in Starbucks stores. By leveraging the Teavana brand and the quality of the tea, we are building a new category inside Starbucks. We’re seeing significant growth in tea as a result of Teavana and Oprah Chai. But the real benefit is not only inside Starbucks, but the halo and the fact that we’re creating awareness, we’re creating a unique opportunity to build the Teavana retail brand as well. So the advertising benefit is we’re not only getting a return on the investment of advertising Teavana Shaken Tea in our stores, but we’re getting the added benefit of being able to communicate the benefit of going into Teavana stores. And this is just the beginning. With regard to Evolution, we haven’t talked about this in a while, but you know, a while back we announced a relationship and a partnership with Dannon. And in calendar 2015, you’ll see the benefits of the partnership of Dannon, which will be integrated into Evolution products in yogurt.

And today, Evolution sits in over 12,000 points of distribution, whether it’s through our retail stores or down the aisle.

: And do you have an opportunity to put La Boulange on television, once that gets further along into your stores, in terms of how big that will be within the system?

No, La Boulange, for us, was the credibility and the base to grow quality pastries and that morning day part within Starbucks stores. Over time, it is about the full array of food that we serve at Starbucks, some of which will be pastries and some of those other day parts that Howard talked about earlier. And obviously the big opportunity is to have food that complements our beverages. So the beverage will drive and the food will support that. We wanted to make sure that as we invested in food that we had great quality food that matches the customer expectation. And that’s the role La Boulange has played in that morning day part.

The next question is from Brian Bittner with Oppenheimer.

Can you remind us what percentage of the company operated stores have drive-thrus today? And on top of that, I’d really like to hear what inning you think you’re in on your speed and throughput opportunities at the drive-thru, and whether you view throughput at the drive-thru as a meaningful comp opportunity going forward, still as we sit here today.

We have just under about 50% of our company operated stores are drive-thru. In the new stores that we’re opening, it is more than half of them, with the current year are going to be drive-thru. So it is a growing part of our portfolio. We have seen considerable improvement in throughput, and the drive-thru stores have been strong contributors to comp, both in the drive-thru lane and also in the in-store experience as well. And that’s because we’ve really focused on how do we serve the two customer need states. We talked several calls ago about an enhanced drive-thru experience, and that really is we’re going to have the opportunity to have face-to-face conversations with customers through technology and through digital, enhancing the experience for the customer, both in terms of how they order and how they pay in drive-thru, and how they keep out of the rain in those drive-thru lanes. So all of those are investments we have tested. Really encouraged by it. And really, it will be three years we will do that rollout. Some will be on cycle renovation, and some will be to speed it up, where that opportunity exists. So I think it’s fair to say drive-thru will be a significant contributor, and it’s an opportunity for comp. The good news is customer feedback, and what they’re telling us, is the drive-thru experience is really important to them, because we meet them where they’re at. It is not how they build the relationship, but that convenience and the ability for a mother to be in the car with her kids rather than offload the family is important. And the morning commuter. So drive-thru is a focus. It has been a contributor to our comps over recent years, and it will continue to be so.

I want to add to Cliff’s comments, because it’s very important to step back and put several pieces together here. We just delivered a 7% comp growth in the U.S., across a huge system. Nobody with a system the size of this, with these volumes, at that age of portfolio, is delivering that kind of sustainable comp growth and driving margin expansion at the same time, while opening stores, while expanding our license footprint, and while expanding our CPG business in that same huge geography. And things such as drive-thru and all the effort that Cliff and his team have put into enhancing the drive-thru experience to improving the flow-through and the speed of the car stack, the experience of the customer through drive-thru, has contributed, over the last years, and certainly in this quarter we just reported, that very, very strong comp growth, just as has the investments we’ve made in food and beverage innovation, in the MSR program. What you’re seeing is the coming together of all these very strategic investments in the core of our business, and the brand, and the experience, and the product offering, and the channels of distribution, contributing to what is a world-class and quite a rare delivery of same-store sales growth through the big U.S. system.

The last question comes from Jason West of Deutsche Bank.

: Just going back to 2015 outlook, Scott, I believe that in the past you guys have provided some color on the margins that are embedded in the guidance. I don’t know if you could offer any color on that for 2015. And just on the commodity piece, what you’re assuming there for the unhedged portion. Are you kind of taking the current spot prices or futures, or are you making some other assumptions?

On the first part, obviously consolidated margin will expand, just given the relationship of revenue growth and overall EPS growth. We’re not going to give quite yet the individual business unit margin results. We’ll wrap up our annual operating plan over the next couple of months, and then the fourth quarter will be far more specific about what we expect by each business unit. As far as coffee goes, it’s a good question. So we have about 60% of our coffee needs price locked for next year. And those prices are roughly flat to this year, up perhaps a little bit. Where we actually end up for the year, we still think it will be roughly neutral, but it will depend on how we lock in that last 40%. So right now, we’re thinking neutral, perhaps up a little bit. If coffee prices come down, there may be an opportunity to ease that a bit.

But where the coffee futures are today would be sort of in line with that flat to up slightly?

Yeah, I mean, where we’ve locked in is what it’s in line - where we end up with that, that last 40%, will determine how much we swing within that range.

This concludes Starbucks’ third quarter 2014 earnings call. Thank you very much for joining us. Have a good day.