Starbucks Q3 2031 Earnings Call — "We're Selling a Feeling"

Starbucks Corporation

Q3 Fiscal 2031 Earnings Call [TRANSCRIPT EXCERPT]

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ANALYST (Goldman Sachs): “Can you walk us through the Heritage Collection performance? The street was expecting $2.1B domestic and you came in at $1.4B.”

CFO: “Heritage has been a journey. Customer response to the brand repositioning has been… mixed. We’re seeing strong adoption among our core loyalty base. The challenge has been price sensitivity. Hawaiian-grown coffee simply costs more to produce than our legacy supply chain. We’re confident that as consumers internalize the value of an all-American supply chain—”

ANALYST (Morgan Stanley): “Let me be direct. You went from 35,000 global locations in 2024 to 2,100 US-only locations today. You lost 94% of your store footprint. Your stock is at $14 from a peak of $115. At what point does the board consider strategic alternatives?”

CFO: “We believe the domestic market opportunity is significant. The Heritage brand resonates with—”

ANALYST (Morgan Stanley): “Your own filing says same-store traffic is down 31% year-over-year. Heritage resonates with whom?”

CEO: “I’ll take this one. Look, we’re in a transitional period. The international business is gone — we acknowledge that. But Starbucks has always been about community. About the third place. And in a country where a lot of people feel uncertain, we’re offering something familiar. Something warm. We’re not selling coffee. We’re selling… a feeling.”

ANALYST (Goldman Sachs): “With respect, your competitor in Santiago is selling a cortado for the equivalent of $1.20 and their barista AI remembers every customer’s name and order. I think ‘feelings’ might not be enough.”

[SILENCE: 4 seconds]

CEO: “Next question.”