Good afternoon. My name is Mike, and I will be your conference operator today. At this time, I would like to welcome everyone to Starbucks Coffee Company’s Second Quarter Fiscal Year 2015 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session. [Operator Instructions] Thank you. Ms. DeGrande, you may begin your conference.

Thank you, Mike. Good afternoon. This is JoAnn DeGrande, Vice President of Investor Relations for Starbucks Coffee Company. Thank you for joining us today to discuss our second quarter fiscal 2015 results, which will be led by Howard Schultz, Chairman, President and CEO; Kevin Johnson, President and COO, and Scott Maw, CFO. Also joining us for Q&A are Cliff Burrows, Group President, U.S., Americas and Teavana; John Culver, Group President, China, Asia Pacific, Channel Development and Emerging Brands; Mike Conway, President, Global Channel Development; Adam Brotman, Chief Digital Officer; and Matt Ryan, Global Chief Strategy Officer. This conference call 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 their corresponding GAAP measures. This conference call is being webcast and an archive of the webcast will be available on our website at investor.starbucks.com. With that, today, let me now turn the call over to Howard. Howard?

Thank you, JoAnn, and welcome to everyone on today’s call. Q2 of fiscal 2015 was a stunning quarter for Starbucks on almost every level. Record Q2 revenues of $4.6 billion, record Q2 operating income of $778 million and record split adjusted Q2 EPS of $0.33 per share, all clearly demonstrated a continuation of the strength, momentum and robustness we saw in our business during holiday Q1. Equally impressive is that Q2 results were delivered despite foreign exchange headwinds and soft consumer environments in several key markets. Our global comp store sales increased a strong 7% in Q2 with 3% coming from increased traffic, our 21st consecutive quarter of comp sales growth of 5% or greater and a spectacular result given that our comps are now calculated off of the US store base of over 7000 stores and a global store base of over 10,000 stores. No other global retailer approaching our size or store base comes remotely close to posting such consistently strong comp performance. Our Americas segment delivered another outstanding quarter with performance driven by the successful introduction of several innovative new coffee beverages, including Starbucks Flat White, our new tiramisu and caramel flan beverage, an expanded selection of Teavana branded tea beverages and very positive customer response to our new breakfast sandwich lineup, all of which contributed to increased food attach across virtually all regions and day parts. Turning to China and Asia Pacific. Now with over 5000 stores, our China Asia-Pacific segment delivered a company leading 12% comp increase in Q2, almost entirely coming from increased traffic and a strong increase in operating income as well. We also completed the acquisition of Starbucks Japan in Q2 and are in a position to aggressively go after business across all channels in Japan both in and outside of our…

Thank you, Howard and good afternoon everyone. Q2 was an excellent quarter for Starbucks across the board. Before providing operating highlights for each of our segments, I thought I would share a very brief update on my transition into day to day management. Since January, I have been working closely with Howard and Starbucks senior leadership team to ensure a smooth transition and ramp up beginning on March 1. I am now almost four months into a deep immersion across all key business functions as well as deal business to stores and facilities throughout North America and Europe, engaging with our partners, customers and suppliers. Next week my immersion takes me to Asia where I will have the opportunity to visit Starbucks stores and partners in the region with our group president, John Culver. This immersion process is providing me with a more comprehensive understanding of Starbucks business and operations. But more than that, the immersion is providing with an even greater appreciation of the enormous global opportunity that lies ahead with this fantastic company and the remarkably talented management team. I am committed to doing everything I can to create value for our Starbucks partners and shareholders, always through the lens of humanity around the world and into the future. Thanks to Howard and all the Starbucks partners for their warm welcome, for their help in making my transition into this role so seamless. Now I would like to tell you about Q2. Our Americas business continued to deliver strong consistent profitable growth, with the 7% increase in comp sales in Q2 and record revenue up 11% over last year, record operating margin and record operating income. Our US food program continues to be a key focus and the tremendous opportunity for us. I am pleased to report that…

Thanks Kevin and good afternoon everyone. I am very pleased to comment on the strong Q2 financial results that Starbucks announced today, especially in light of the fact that each of our segments contributed meaningfully to the results. Strong global comp growth of 7% in the quarter demonstrates once again the increase in strength and relevancy of the Starbucks brand. Transaction comps of 3% driven in large part by excellent execution in our key fast growing CAP region exceeded transaction comps in the Americas, reflecting the increasingly global nature of our brand. Revenues grew to $4.6 billion, an 18% increase over prior year, despite nearly 2 percentage points of headwind through foreign currency translation. GAAP EPS came in at $0.33 and our non-GAAP EPS also at $0.33 came in ahead of the pre-split consensus. We raised our guidance modestly at our annual shareholders meeting in March and the results we announced today were at the top end of that revised range. Excluding non-GAAP items, operating income increased 23% over Q2 last year to $789 million while non-GAAP operating margin expanded 70 basis points to 17.3% in the quarter. Importantly we saw a meaningful increase in COGS leverage this quarter as supply chain initiatives we’ve previously discussed increasingly benefit our operations. Our year-over-year operating performance improvement becomes even more meaningful in light of the ongoing investments we continue to make around building new stores and renovating existing stores, the partner investments we are making and unfavorable foreign currency translation. I will now tell you about each of our segments and how they performed in Q2. Our Americas segment revenues grew 11% in Q2 primarily driven by a strong 7% comp growth and another quarter of 2% transaction growth. Of the 7% comp growth, food sales drove 2 points of the increase,…

[Operator Instructions] Your first question is from Sara Senatore with Bernstein.

I was wondering if you could talk a little bit more about mobile order and pay. Couple of questions related, one of them is you are about halfway through the year, and you have 650 stores and you are looking to accelerate I think quite nicely in the back half. If you could talk a little bit about what you’ve learned that will allow you to accelerate that pace. And the other piece we are curious about is are you seeing that only people who already used mobile pay are using the order and pay or are you actually attracting new customers to the use of the app now that you have the ordering capability?

This is Adam Brotman. I will take the second question first. The answer is yes, we are seeing new customers coming in and use – joining us are using mobile app and also use mobile order and pay. So this is not just leveraging the strong base and you already have in our mobile commerce platform. In terms of the rollout plans and what we are learning, we are very pleased with how this has started. We will actually see a significantly ramped up accelerated pace of rollout in the second half of the year, as you mentioned, we have a big wave of stores coming on this summer and while we continue to learn and optimize couple of areas, for example, the estimated wait time pickup, we are dialing in store level menu and inventory management. These are all things that we are going to continue to improve on but frankly we are ecstatic about the fact that out of the gate our customer and our partners are really pleased with how this is going. In fact, Seattle started out even quicker than Portland and as we roll it into more urban environment that bodes really well and how this is going to continue to drive transactions and be a great thing for our customers. And operationally our partners are telling us there is no impact and are very happy with this as well. So we are excited to accelerate that rollout as you mentioned in the second half of the year. We are also going to be adding for Android app and launching this in the UK and in Canada, all before the end of the year. So we are truly just getting started.

Your next question is from Keith Siegner with UBS.

I want to ask a question about the Americas with the check growth. Very impressive, the highest to your ticket growth we’ve seen in many years. And with some of these new premium products like Flat White, like Reserve, like Cold Brew, with them all rolling throughout this year, with the food attach increasing as you talked about, lots of tailwinds here. Could this be the beginning of a run of closer to mid single digit ticket growth in the US?

Keith, thank you for your comments about our ticket growth. Perhaps if you like, ticket growth in the quarter we have seen 2% come from food, we have seen 1% from tea, we have seen strength from our base business whether it’s Frappuccino in the Sunbelt, or as you say Flat White all of which helped our ticket in the quarter, plus our routine and disciplined approach to price in the quarter all have helped. Starting the future, I will pass it over to --

The only thing I would add, Keith, is that ticket mix was blended nicely across the three drivers that Cliff is talking about. So little bit of price, a little bit of above level of premiumization with Flat White and some of the things that we are doing with food and a nice increase in attach. So the mix of that is really helping and so as I said in my comments, I think we are quite excited about how the rest of the year looks but we are still holding to our mid single digit comp guidance as we look forward.

The next question is from David Palmer with RBC Capital Markets.

A couple of P&L oriented ones, perhaps for Scott. The COGS leverage was really strong in the quarter as you mentioned and you mentioned in the release, supply chain efficiencies were driving a good bit of this particularly in the channel development segment. But as we look forward how should we think about that COGS line that plus coffee, will that kind of leverage continue? And then separately with regard to G&A, you had a significant increase in the quarter, I think it was 27%. What investments are driving and how should we think about that line as well?

On the COGS point, the short answer is yes. We expect continued leverage. I don’t expect it to be as high as it was this quarter, this was a really good quarter with some of the initiatives that we talked about kicking in and also in crisp business significant continued traction around wage. But we see that leverage continuing in the quarter and we’ve got a number of things stacked up against making sure that happens. And then on G&A, the biggest driver of that at the corporate level is some true-ups that we had around total compensation.

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

Just couple of clarification questions, even if I missed it, but could you give the Mainland China same store sales increase for the quarter within that strong CAP number.

We didn’t break it out, Joe but as always China is obviously the biggest contributor to that growth. So we were really happy with what we saw in China this quarter.

Joe, this is John. I would just add that, I mean the main driver for the comp growth has been transactions. And the experience that we are providing across the region has never been stronger and in particular what we are seeing is that Starbucks is becoming part of the daily ritual of our customers in China and Japan or in the other markets that we operate in and then the level of frequency of our existing customers and the new customers that we are attracting continues to grow. We are now serving well over 5 million customers a week across the region and extremely proud of the job our team is doing over there.

And then just a question on the Tingyi, if I pronounced that correctly, agreement, how quickly will that ramp up and the bullet in the release mentioned, it’s ready to drink coffee category, will that cover tea products as well?

Yes, Joe, this is Mike Conway. So we currently distribute the Frappuccino product and China today although is in a more limited geographical presence than we would have. From a timing perspective we’re going to be transitioning in 2016 to Tingyi and we expect that with strength of their distribution and their knowledge of the marketplace combined with our strong brand that we will significantly a lot of the growth for China.

Mike, you want to just spend a little bit more time on channel development since we haven’t had an opportunity. And also with regard to tea being talked about how many points of distribution it has.

Yes, absolutely. So you also – Joe mentioned about tea, and yes we will over time be launching tea as well with the Tingyi distribution. We will from a channel to distribution perspective points of distribution they have well over 100,000 points of distribution within China, and for channel development for this quarter, actually very pleased with our results, our 16% growth was quite exceptional and was driven by a number of factors for us. First of all, very very strong programming in-store execution as well as the success of – and launch of innovations like our new iced K-Cup platform and as we think about the remainder of the year we have other innovations coming on as well including the launch of iced or rather our Coco K-Cups as well and so we expect very strong performance in the back half although expect it’d be more in line with our historical growth of around 10%.

The next question is from Karen Holthouse with Goldman Sachs.

Actually another question on the channel development side of the business. So we’ve seen in the last probably few months of on IRI data that pricing has actually come in for Starbucks both on an absolute basis and relative to the market. Just curious so with just the logic behind that if that was seen as an opportunity, even that profit accretion, is it defending off potential entrants into the market with Dunkin moving into more points of distribution, just on the logic behind that and of course congratulations for a fantastic quarter?

Thank you. From a pricing perspective we actually are quite pleased with the way we were able to balance our base with promotional pricing, you combine that with the strong in-store merchandising that we had, we were able to achieve significant share growth across all of our businesses during the quarter. And so we will continue to monitor the market, continue to monitor pricing and make appropriate shifts but at the moment we are quite pleased with how our pricing is lining up in the marketplace and then in particular how we are driving share in the market.

The next question is from John Glass with Morgan Stanley.

A few quarters ago there was a notion of maybe greater partnerships in the tech side either using some of their technology, maybe white labelling some of Starbucks payment platform et cetera. So where does that stand now, what’s your current thinking on that and Kevin, as you come to this full time, maybe are there specific areas that you think are even greater opportunities that you bring your outside experience into Starbucks?

Sure. We continue to be in a number of active dialogues right now, about a number of different partnerships leveraging mobile. We see the continued growth as being our permission to do more and more in that space. We are not prepared to announce anything specific today and what I can tell you is in the months and year to come there will be more on that front.

Yes, in terms of opportunities for us to better leverage technology, early observation I think we are ahead of the industry in thought leadership around the digital customer experience and we’re going to keep pushing the envelope on that. I think we’ve outlined that for you and there is more ideas even behind that. The area that I think we have opportunity certainly is with our in-store partners on leveraging technology to help our in-store partners with the tasks they have to do that are more about the administrative side of things like inventory management, making it easier for them to do scheduling of our store partners, communicating with our store partners the way we reach in-store partners with training and communications. We’ve got tremendous opportunity to step up our game in that particular area and we’re going to do more there. And then certainly if you look at how we are utilizing information across the enterprise to make more informed and better decisions, whether it’s using data, big data kinds of analytics to help us with store location or big data analytics to help us understand how to do a better job of promoting to our customers at different times of the year. I think those are the big opportunities that we see and we’re going to continue to drive forward with those.

The next question is from John Ivankoe with JPMorgan.

Howard and Kevin, you are very very clear that mobile order and pay exceeded every goal that you set. So I wanted to get just a little bit more into the details of this. I guess one would think that mobile order we broke the best the constraint or the pinch point I think in your words, would be at the register and not at the barista, and so as that rollout has continued, I mean what you’ve actually learned about increasing barista capacity, I mean is it just an issue of adding more baristas, adding more equipment? And as you think about mobile order, mobile pay over time, how much more latent capacity is just within the existing Starbucks unit because of this technology?

John, this is Howard. Cliff is going to take that in terms of the details of the question. I think it’s fair to say that we did not intend nor do we foresee adding equipment as a result of mobile order and pay. The incrementality that we are seeing in the early stages strongly suggests that we are going to be able to integrate this well within the engine of Starbucks, with regard to labor, and how we are deploying, I will let Cliff take it. But I would say as Adam shared with you that these early signs of mobile order and pay, this is going to be a much more seamless integration than we really anticipated both in terms of customer response and level of convenience and also I wouldn’t underestimate one other thing which we learned with Flat White and then as our people are so excited and so proud of this initiative and this technology, they’ve embraced it, they are enthused about it, and as a result of that, it’s one of the primary reasons why it’s working so well.

Let me just talk about this. I think one of the things that we are seeing is convenience, improved relationship between the customer and their store where they order, they feel much more in control of it. Food attach is strong in it, and the repeat nature of these transactions is really really helping. It is convenient for the customer, they have no queue time, they come in and go straight to that handout pan and collecting that in turn is bringing up space and taking stress away from the register transaction and we are seeing really encouraging signs of growth peak in our busier stores, which is what is most exciting here. Of those busier stores, we cannot really talk about the Seattle, but where we have put in mobile order and pay we are seeing really strong growth at peak and there has been no additional equipment over and above putting in a printer and receive orders from customers, and it’s really encouraging that we will be able to get more capacity at peak at our existing stores with the addition of mobile order and pay.

And could you or Kevin, just talk about how this has been integrated into the ecosystem with regard – this is not a bolt-on.

First of all, the ecosystem you are referring to is the mobile commerce platform which includes loyalty, the mobile app, our card program, our POSs in our store, we’ve integrated all of those together, and it’s actually that entire mobile commerce platform or ecosystem as you heard earlier is accelerating. We are seeing unbelievable numbers of active MSR members, mobile user, will keep the transactions. So it’s into that momentum that we’ve launched mobile order and pay. So this is not a bolt-on, this gets to leverage that existing ecosystem. And I think that’s why frankly our customers are loving it. They don’t have to download a new app, they don’t have to learn something new, this is just seamless for the customers just like additional department.

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

Just a follow up on the mobile order and pay initiative. It sounds like you might be starting to see some increases in My Starbucks Rewards members also as a result of rolling this out. So just wondering if you maybe comment on the though process or how you sort of think about the increase you are seeing in the loyalty program members and how you want to utilize that as you get this rollout, maybe more one to one offers and what you are doing currently or maybe that’s not part of the plan but any thoughts there would be helpful.

Sure. This is Matt Ryan and thanks for the question. There are two ways looking at – there are lots of ways that we’re actually growing our membership and mobile order and pay is one of them. We are actually increasing the strength of our value proposition over time with more offers through one to one, people are recognizing that. People see the convenience within the stores. And because it is a overall initiative to recruit more and more people, we are seeing the growth in the platform. That begets a virtuous cycle, provides and do more things with that platform. Certainly the ability to become more and more targeted and send more offers to the right person at the right time in the way that they want it, is the capability we have been growing here. But the growth of that platform is in fact the permission that we have to do more over time in the digital space because as we grow that engaged space of customers, the adjacent things we can do with them, starting with mobile order and pay, moving on to delivery, and on to other opportunities, it’s going to be an enormous long run play for us.

And have you seen in fact that the membership levels in the Northwest has increased since you’ve rolled the mobile order and pay out?

Well, I think as Adam commented earlier, we have seen increase in MSR, with new MSR customers coming to use mobile order and pay. And granted, we're just in the Pacific Northwest right now, so it's still early days. But I think that's a fantastic example of a feature that is a customer-focused feature. It's all about that benefit to the customer, and the consumer. And we think offering those types of benefits and those types of features is part of our mobile app, it will bring more people into the MSR program.

The next question is from Jeff Bernstein with Barclays Capital.

Just two questions, one on the Americas comp. I don't know if you mentioned this, but in terms of the traffic growth across all dayparts, I was wondering whether you were seeing again stability across all those dayparts, and whether or not that would imply that at this point there are still no real signs of throughput constraints despite obviously the outside comp growth. And then my other question was just on the Americas units. I know that in fiscal ‘15, I guess half of your opening is going to be licensed. Just wondering whether there's any underlying strategy in coming years to move towards more licensed over time, not unlike I guess many of your international markets.

Thanks, Jeff, and I'll take both the questions. This is Cliff. As we said earlier in the script, we have seen growth in the Americas in all dayparts, all geographies, and across all platforms. It really was a very balanced portfolio. And we are seeing growth at peak times in our busiest stores, which really gives us the encouragement that we are -- we still have room for capacity. And mobile order and pay will only help that in the coming months. Secondly, around store growth, this quarter, as we said, was a bit of an anomaly with the closure of the 132 licensed stores in Canada. So that will distort the number a little bit this year. But I think over the coming years, you will see us continue a balance between company-operated and licensed stores. There may be times where it goes up or down, one way or the other. But in terms of strategy, we continue to look for opportunities to grow both our company-operated, and even here in the US, we still see a very healthy pipeline of new opportunities. And we open very soon our first small footprint store in New York, which gives us another opportunity for growth. And as Howard said earlier, with the premium nature of the -- building off the Roastery, we have again another opportunity for growth. So, we see the pipeline out into the future being very healthy, balanced between company-operated and licensed.

Let me just add a few things to that. For those of you who have followed the company for many years, it wasn't that long ago that our stores closed early in the evening, 7, 8 o'clock at night. And most of our business, 15% or so was driven before 10, 11 AM. In the last few years, I think Cliff and his team have done a wonderful job of two primary things. One, dealing with peaks times and being able to drive throughput in a way that would not create a transaction driven environment but really honor the customer and now with mobile order and pay that’s going to leverage it more but the big news in the last couple of years is identifying dayparts and need states through unique products in which we could leverage the fixed asset of the store. So lunch, as an example, is driving a significant level of visits and incrementality both in traffic and in ticket. The new opportunity with smoothies in terms of health and wellness, identifying that need state and leveraging that daypart opportunity, which is mostly refreshment in the afternoon in health and wellness. And the one thing we have not talked about, either in the script or the Q&A, is the advancement of evenings, which we're very excited about. And so all these things have given us the ability to integrate new product, new levels of innovation, and identify need states and dayparts that five years ago, candidly, were not part of the unit average volume. If you looked at the average volume of Starbucks both in terms of mature stores and probably most importantly, new stores, we are experiencing the best performing new store class in our history. And one of the primary reasons is what I've just described. Then you leverage MSR and mobile order and pay on that, and your imagination can really -- I can't begin to think about how much volume we can put through these stores. And I think we're just getting started with a level of innovation we think that food team can create. And so that's why we're so excited about the future in terms of the opportunity to drive incrementality in existing and new stores.

Next question is from Nicole Miller with Piper Jaffray.

Whoever put the coffee in Delta, thank you so much. And on that note, can you talk a little bit or just walk us through, I think it's 100% of coffee blocks for this year. We know it's favorable. Can you give us any color on how much? We were also supposed to see a benefit of lower on dairy and diesel, I think, in the back half of the year. Are you seeing that? And then also, thank you for the color on ‘16 and the lock there. Price is lower again -- by how much? Just wondering, can we flow that through, or do you want us to assume you'll make investments against that? Thanks.

Thanks, Nicole. So as it relates to ‘15, what you have to remember is that coffee prices throughout 2014 were quite low. So for a long time, they were in the $1.20 and $1.30 range. And so 2015 coffee prices, despite the fact that we were patient and waited out all the spikes above $1.90 and bought it far below average market prices, our coffee is actually a little bit unfavorable year over year. But that's much more about how low 2014 was and -- than it is around 2015. We actually did a really good job buying below the market. So a little bit of unfavorability, and a very little bit, offset by favorability in dairy and diesel. That's kind of how the year is shaping up. When we gave guidance all the way back in the summer, we expected coffee prices to come down, just given what we saw in the market. We didn't know they were going to come down, but we expected that. We waited, and we were patient; and when they came into our target range, we filled up our needs for the year. So that's how to think about ’15, roughly flat, a little bit unfavorable on coffee, a little bit favorable on dairy. On ‘16, because we did so well in ‘15, despite the fact that we've locked at slightly lower prices, again, that favorability while meaningful it is probably not as high as you might calculate based upon average market prices. So we'll give you more update. We still have a full third of our coffee to price. We will give you a bit more update as we move into ‘16 and become more specific.

The next question is from Diane Geissler with CLSA.

I wanted to ask on the CPG business. I think Danone announced on its earnings call that it was co-branding an Evolution Fresh product with you, yogurt product. Obviously the Tingyi deal, I think, is a big deal in the CPG space in China for 2016. So, just kind of going back two analyst days ago, which would've been, I appreciate, quite a while ago, where you talked about the CPG space, and how you thought it could rival the size of the US retail business at some point in the future. Could you talk about your growth plans within CPG which I think you've obviously crystallized around the K-Cup business. But there's lots of opportunities in a lot of different aisles in not only the Americas, but also in China. So could you talk a little bit, maybe add a little bit more detail around that?

Yes, Diane, this is John Culver, and I am going to take that. Clearly the CPG business, first off, had a very strong quarter and it continues to grow. Our expectation is that it will continue to grow at that double-digit rate in the foreseeable future. Now as we look at the growth, that growth is being driven by our core coffee, and really K-Cups is a big piece of that. As we look at other areas of growth, though, we see tremendous opportunity to grow outside of coffee. The biggest is the tea opportunity, and in particular with the Tazo Tea, and then as we introduce Teavana tea down the aisle and through ready-to-drink as well. And then we've also worked very closely on Evolution Fresh. And Evolution Fresh today stands in over 11,000 doors across the country. The CPG share that we have both in natural as well as in traditional FDM is very strong, and it continues to grow. We just repackaged the product. And we now have new packaging, an 11-ounce and a 15.2 ounce. And then we've also launched Evolution Fresh smoothies in our stores. And we anticipate launching Evolution Fresh yogurt, with fruit on the bottom, in our stores with our Danone partnership. So, for us, these are all investments that we continue to make in our channel business given the relevance and the strength of the business. And also we are very optimistic about the future growth of the business going forward.

The next question is from Will Slabaugh with Stephens Inc.

One more question on channel development, but more on the international front. I don't know if you had an update that you could give us there on some key markets internationally, sort of where you stand now versus what type of growth you might expect in those key markets in the next couple of years as you might hit your goals.

Well, thank you. This is Mike Conway. We see channel A specific as being one of our most important markets going forward. Certainly with the partnership we have with Tingyi, China will be a big market for us, particularly driven by the size of the ready-to-drink energy and coffee business. And we also -- Japan is one of our longest-standing ready-to-drink markets. While it is somewhat mature, at the same time there's a lot of growth for us there, particularly with the move that we made now fully owning the Japan market. Beyond that, there are a number of the emerging markets that we're really focused on. We still have fairly emerging business within our Latin America region. And we're looking at markets like Brazil to establish a presence there, another big market for us. And then we have an established relationship in Arla but we have probably the largest number of markets – I am sorry, in Europe -- we have the largest number of markets in the EMEA, and we are going to continue to drive our business there as well. But the UK, France -- those are some of our largest markets. So as I think about the significant growth that we have for ready-to-drink coffee, we are really looking at the CAP region as well as Latin America.

The last question is from Andrew Charles with Cowen and Company.

Just wanted to touch base with Adam on the mobile payment just jumping to roughly 19%; had been stuck for a while around 15%. Just wanted to know what you attributed the increase in mix to.

Thanks, Andrew. This is Adam. It's a great question. I would say the core ecosystem that Howard and I were talking about earlier is an interconnected set of parts that all have momentum. So the fact that MSRs -- you've seen the momentum in MSR. You've seen the momentum in mobile active users in general. You’re seeing the momentum in card loads and card redemptions. And those things are all tied together, so like the flywheel, they all power one another. And so it's not a surprise that we're seeing that kind of acceleration happen when it comes to mobile payments as well, over 8 million per week, approaching 19%-plus in the US in terms of percentage of tender. And it just speaks to the momentum and the overall mobile commerce platform in general. End of Q&A

Thanks, Mike. This concludes Starbucks' Q2 fiscal 2015 earnings call. Thank you all for joining us today.

This concludes Starbucks Coffee Company's second-quarter fiscal year 2015 earnings conference call. You may now disconnect.