Starbucks CEO: Vaccines and the 'great human reconnection' create a 2- to 3-year tailwind
Starbucks (SBUX) CEO Kevin Johnson says the deployment of the COVID-19 vaccine and the pent-up demand of customers looking to reconnect and socialize again is a tailwind for the next few years for the coffee giant.
"This was a quarter that really demonstrated how vaccinations just unlock customer mobility and create what we call the 'great human reconnection.' And we certainly saw that across the United States this past quarter," Johnson told Yahoo Finance Live on Wednesday.
On Tuesday, Starbucks reported fiscal second-quarter results, beating on earnings and missing on revenue. For the quarter, Starbucks posted adjusted earnings per share of 62 cents versus forecasts of 52 cents, while revenue came in at $6.67 billion compared to estimates of $6.77 billion.
[Read more: Starbucks Q2 results show full sales recovery in the U.S., raises fiscal 2021 guidance]
As vaccinations roll out globally, Johnson said, "People are more comfortable, more confident, getting out and being mobile."
"And one thing we know is that people have isolated this last year through this pandemic. And in many ways, there's this desire, this craving to reconnect, to socialize with others, to be part of a community, and to heal. And in many ways, Starbucks is a destination that's allowing consumers to do that, and we certainly saw that across the United States, and we're seeing that unfold, and other markets as vaccinations roll out."
Starbucks also raised its fiscal 2021 revenue and EPS guidance. The company expects to report revenue between $28.5 billion and $29.3 billion, up from the previous $28 billion to $29 billion range. Starbucks sees its fiscal 2021 non-GAAP EPS in the range of $2.90 to $3.00, up from the previous $2.70 to $2.90 range.
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While Johnson expressed optimism for the back half of the 2021 fiscal year, he also believes the company is positioned for growth in the years ahead.
Johnson, who hails from a tech background, having served as the CEO of Juniper Networks (JNPR) and a top executive at Microsoft (MSFT) before taking the top spot at Starbucks in April 2017, sees artificial intelligence playing an increasing role in the success of the business and its growth.
Starbucks' internal artificial intelligence program, known as "Deep Brew," allows the coffee giant to innovate and experiment with machine learning and artificial intelligence not only to personalize its mobile app but also to automate time-consuming tasks such as inventory management and preventive maintenance on its internet of things (IoT) connected espresso machines.
Johnson recently asked Starbucks' Deep Brew team to focus its machine learning on tracking what's happening with the vaccination rollouts globally, and the data look promising.
"[I] did that because as I sort of watched the day the FDA announced emergency authorization for the Pfizer (PFE) vaccine, for Moderna (MRNA), for J&J (JNJ) and then as I saw vaccinations, increase, or hit 3 to 4 million a day across the United States, I was correlating that with what we saw happening in our stores," Johnson said.
He added that Deep Brew's machine learning is looking at the correlation between the vaccination deployment globally and activity in stores providing "a line of sight to how quickly this recovery is unfolding and how this great human reconnection is going to happen in every market around the world. "
"Now, as that happens, I think that gives Starbucks a two- to three-year tailwind in our business," Johnson said.
Julia La Roche is a correspondent for Yahoo Finance. Follow her on Twitter.
