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 Fourth Quarter and Fiscal Year 2014 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 to discuss our fourth quarter and fiscal 2014 year end results. Today on the call with prepared remarks are Howard Schultz, Chairman, President, and CEO; Troy Alstead, COO; and Scott Maw, CFO. And joining us for Q&A are Cliff Burrows, Group President, U.S. and Americas; John Culver, Group President, China, Asia Pacific, Channel Development and Emerging Brands; Adam Brotman, Chief Digital Officer; and Matt Ryan, Global Chief Strategy 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 measures. This conference call is being webcast and an archive of the webcast will be available on our website at investor.starbucks.com. Before I turn the call over to Howard, I want to once again extend an invitation for you to join us here in Seattle on December 4th for our biennial Investor Day. The event kicks off Wednesday evening with the reception at our new roastery, which we are very excited to unveil, followed on Thursday by presentations and onsite experiences here at our headquarter. Please contact Investor Relations if you need more information and we hope to see you here in early December. With that, let me turn the call over Howard.

Thank you, JoAnn, and welcome to everyone on today’s call. Starbucks record Q4 and fiscal 2014 financial and operating results again demonstrate the power and relevancy of the Starbucks brand and the success and scalability of our operating strategies and global business model. Meaningful contributions from each of our business units drove a better than 10% increase in Q4 revenues, to a record $4.2 billion, while improved store operations enabled us to deliver an elevated experience for our customers and our 19th consecutive quarter of comp store sales growth at or above 5%. Sales leverage, increased operating efficiency and disciplined expense management, each contributed to 280 basis point increase in operating margin over last year, to a record 20.5% and a 23% increase in non-GAAP earnings to a Q4 record of $0.74 per share. For the full fiscal year Starbucks grew revenues by 11% to a record $16.4 billion, posted global comp store sales growth of 6%, squarely in line with our targets and grew non-GAAP EPS by 21% to a record $2.66 per share. Starbucks performance in fiscal 2014 was extraordinary by any metric or comparison and results remain even more stunning by the fact that they were achieved in the face of continued challenging retail and consumer environments, the accelerating shift in consumer behavior from bricks and mortar to ecommerce purchasing and on the heels of 7% comp growth in fiscal ’13. I’ve spent many of these calls discussing the quarter or year ahead, but today I am going to leave that to Troy and Scott, and instead lay out for you a roadmap that demonstrates how Starbucks is positioned to benefit from the massive cultural shift in consumer behavior underway and how we will continue to lead, thrive and win in fiscal 2015 and beyond. The most…

Thanks, Howard and good afternoon everyone. 2014 was an incredibly strong and record year for Starbucks across the board. Each of our reportable segments set new fourth quarter records to revenue and operating income. The results we reported today are that much more significant when considered against the backdrop of the very soft global retail environment in which they were accomplished. The hardwork and dedication of our Starbucks partners has enabled us to be where we are today and we have the solid foundation needed to continue to profitably grow both emerging and existing lines of business into the future. I will provide an overview of our fourth quarter and fiscal 2014 performance for each reporting business, and then turn the discussion over to Scott for additional details, along with an update on targets for fiscal 2015. For the total company in the fourth quarter, we produce net revenue of $4.2 billion, up 10% from the same period in fiscal 2013. In a difficult consumer environment, we delivered comparable store sales growth of 5% for the quarter, driven by a 4% increase in average ticket and a 1% increase in traffic. And new store openings continued at a healthy pace, with 503 net new stores opened in the fourth quarter. In terms of segment results, the Americas net revenue for the quarter was $3.0 billion, a 9% increase over the same period last year. The increase was primarily driven by a 5% increase in comparable store sales, comprised of a 1% increase in traffic and a 4% increase in average ticket. Incremental revenues from 698 net new store openings over the past 12 months also contributed to the growth in revenue. While we delivered comparable store sales growth solidly within our stated target range for the consolidated business and all…

Thanks, Troy, and good afternoon, everyone. Our fourth quarter and full year 2014 saw strong financial growth and profitability for Starbucks. Our results were once again driven by the customer experience delivered by our partners around the world. Q4 revenue grew 10% and our strong comps store sales of 5% once again showed the strength of our brand in a difficult environment. One of the most significant financial items to highlight is the 280 basis point increase in non-GAAP operating margin reflecting our ongoing ability to leverage operating cost and control cost of goods sold. This is the highest level of non-GAAP operating margin expansion we have driven in nearly four years. Before I go into specifics, I want to ensure that everyone is clear on what we are including in our non-GAAP adjustments for comparison purposes. For both 2013 and 2014, we have excluded charges and adjustments related to the Kraft litigation. We have also excluded gains, losses and cost from certain transactions related to equity interest and retail operations in specific geographies. You can see the amounts, timing and description of these items in the detailed reconciliation table provided at the end of the earnings release. I recommend you review that in conjunction with our results. Operating income from each of our reportable segments reached new all-time highs contributing up to margin expansion I mentioned earlier. Our fourth quarter results across the segments to have anther of strong growth with earnings per share of $0.77 on a GAAP basis. Our fourth quarter non-GAAP earnings per share was $0.74 which is the highest we have ever achieved in a single quarter. This represents 23% growth over the prior year non-GAAP EPS. On the segment basis operating income in the Americas grew to 743 million up 23% over the prior…

(Operator Instructions) Your first question comes from Sara Senatore with Sanford Bernstein.

Hi. Thank you very much. I was interested to hear Howard talk about some of the product innovation like the Chestnut Praline Latte. And I guess I was wondering if you could put that in the context of maybe the competitive environment, it feels like a lot of companies have tried to replicate what Starbucks is doing, whether it's Pumpkin Spice Latte or digital and loyalty. I know that what you're doing is distinct and different, but is it possible that competition has had something to do with a little bit of the deceleration that we've seen in the traffic? I ask only because some other parts of the restaurant industry have actually seen a little bit of improvement recently and so I'm just trying to sort of understand the divergence there? Thank you.

Thank you. We see no indication whatsoever from any competitive threat in any region in the country. Specifically, even in those markets where companies were giving away coffee for weeks at a time. We saw no dilution whatsoever in our customer base. With regard to product, it’s clear that over the last 10 years, we created a category that did not exist with Pumpkin Spice Latte. Having said that, PSL did very well for the season. One of the hallmarks of Starbucks is surprising and delighting our customers with proprietary beverages. The interesting thing about the beverage we are introducing Chestnut Praline Latte, this is something we tested kind of under the radar last year. It surprised us at the high end and this is a product that’s coming into the system with as much enthusiasm internally as things -- anything we’ve done in the past during the holiday season and I put it in the same spirit as when we introduce Eggnog Latte many, many years ago. This is the beverage that’s going to do very well. But the short answer to your question, no competitive attrition whatsoever to our business. We do not see it.

Thank you.

The next question is from John Ivankoe with JPMorgan.

Hi. Great. Thanks. A follow-up on that, if we are to kind of isolate competition that's not have -- being an issue in the 1% traffic that I think even in Troy's remarks, he said, he was not satisfied or you are not satisfied with 1% traffic, what do you think it would have been, I mean, if we were to identify what issue of -- that led to that 1% being disappointing relative to your own expectations? And I’d ask that in the context of, have you begun to hit a throughput wall maybe temporarily that can be at least partially solved through technology, is that an issue? And have you been able to isolate your own impact on comps through possible cannibalization as you have been recently taking up the store count, if it's not one of those two issues, what might it be? Thanks.

Okay. I think, this is the central question of the day. So I really want to make sure we spend as much time as possible that everyone understands it and we’re transparent as we possibly can. We do not have a throughput issue and Cliff will talk about that specifically. But a year ago today, we began talking about the macro shift in the amount of traffic that was going through malls and main streets in America. And as a result of what happened last year and that is less people shopping with bricks and mortar stores and much more people shopping online in their mobile devices, as I talked about in my remarks. We began dramatically transforming the holiday season in anticipation of another holiday season that would even be more - greater than last year in terms of attrition of people shopping in physical stores. What we did see though and we did not expect is that we saw it come earlier than last years holiday season. And so, we’re ready to go in terms of the fall and holiday season based of what we have re-imagine and Starbucks for Life is going to be a big holiday product and we believe is going to create incrementality in our stores. But the short answer to the question is, there is nothing internal about what’s going on within the Starbucks store in terms of throughput. There is nothing external in terms of competitive issues. This is a micro issue and we’re addressing it with great a vengeance and as a result of that we are well-positioned. As I said in my remarks to not only we believe have a kind of holiday season that will demonstrate the change but heading into calendar ‘15 with mobile order and pay and all the things we are going to do in terms of technology and delivering the second half of the year we are going to be the company that is positioned to overcome and navigate through the macro change in the cultural shift of consumer behavior. So the net issue and this is so important, this is not a Starbucks issue. All the companies that you follow and all the retail companies that are reporting in other spaces are experiencing a downturn in traffic that is a result of a cultural macro shift that I spoke about in Q1 of last year. We’re positioned and aggressive for holiday. We saw it a little earlier than we expected. But come holiday and Starbucks for Life and what we have done in the store to re-imagine what gift -- the gift of choice in term of card, we are well-positioned to take advantage of what we think the situation is all about. And Cliff just hit, specifically, the issue of throughput and productivity, so there is no misunderstanding.

Yeah. Thank, John and thanks, Howard. In the quarter we’ve just finished, we saw our strongest productivity numbers for the year and it was the greatest improvement on the previous year. The volumes we are putting through our stores at the moment are in excess of anything we have ever seen. I think the other thing that is significant, we opened in the final quarter over 200 stores in the U.S. and for the year 505 stores about half of them company-operated, half of them licensed. They are all performing at record levels and they continue to contribute significantly towards growth. So, it’s all good, very positive about possibility and the potential to continue to grow.

I’ll just add one point to that, John. Thanks, Cliff. We in the quarter are growing across all day parts, even the busiest morning day part is producing nice comp growth. So I think we are demonstrating increased throughput, as Cliff just said, highest productivity of fiscal ‘14 happened in the fourth quarter and it was a significant improvements over productivity in the fourth quarter of the prior year. It’s not a throughput issue whatsoever and we continue to invest in the ability to move lines more quickly, put more volumes through our stores, digital with mobile order pay is just one example of what’s yet to come.

And if I'm still on, have you been able to isolate the impact, if any of cannibalization, you’ve given that store growth that accelerated through the fourth quarter?

We are seeing nothing in terms of cannibalization. The quality of the new stores and I think our discipline around opening these new stores while maintaining our operational excellence and focus on the customer in the existing stores, we have never had so much success and strength in this area.

And John you heard Howard comment in is prepared remarks about convenience. We know the convenience is a huge, very important driver of the customer experience and ultimate size of the opportunity in the business. As we become increasingly disciplined around market mapping, around store location, around store formats, around performance of our dry fruits, about the ability to tap into new trade areas and demand like never before, as we are opening up accelerated numbers of new stores, basically opening them up almost at mature volume levels in year one, extremely high performance across all history, as we are able to do that, we are still performing with strong store results, strong comp growth and improve the untapped opportunity we have ahead for us in store growth in the U.S. and around the world.

Thank you.

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

Hi. Good evening. We've seen Starbucks react several times in the last few years to patches of weakness with marketing pushes, sometimes in social media and it's worked. Is it safe to say that you might be teeing up corrective measures such as the ones you've done in the last few years?

David can you repeat the question, I am not clear exactly what you’re asking.

Back -- I remember back in the June quarter in 2012, the first quarter where you had a little bit of a soft patch and you did some stuff on social media? And in terms of discounts or incentives for people to come back and those measures worked then, you employed them later? I'm wondering if you had a soft patch late in this quarter, you've not had a chance to adjust and whether you might be thinking about making some pushes like that to help offset the bricks and mortar weakness you are talking about?

Yeah. David, thanks for the question. There is no doubt that the work that we’ve done in preparing for holiday on the specific promotional overlay of Starbucks for Life is going to have a comprehensive and significant social and digital media component, leveraging all of the learnings we’ve had in the past. And I think if you go back in history, we’ve been able to leverage that and in doing so lower our cost of customer acquisition versus traditional media. And you are going to see that in spades, ones the holiday season kicks-off. Now, Starbucks for Life does not start until the first week in December but we’ve got a tremendous offering between that. But you are going to see a lot of promotional material and I think based on the people we talk to and the demand that’s already come from people who’ve heard about Starbucks for Life. This has the potential to be quite a frenzy with regard to being, perhaps a number one gift that only 13 people in America and Canada are going to get.

Thank you.

And the next question is from Keith Siegner with UBS.

Thank you. And congratulations on the record year. Scott, if I could ask you a question about the cost saves and efficiencies that you talked about clearly having an impact on the margins and good job on that. Could you talk a little bit about -- maybe put all of fiscal 2014 into a -- if you could quantify it maybe into some perspective. And then when we look at the guidance for fiscal 2015, how do the costs saves transition from this year to next year? In other words, what’s built into the guidance on that front? Thanks.

The first thing I’ll say is I will be giving a significant more level of specificity in investor day including specific dollar amounts. But let me sort of frame it up what we are doing. If you look at cost of goods sold efficiencies, the challenge that we give our supply chain every year, last year, the number that we gave them was and I will give this in investor day with X. Next year, the number we’re going to give them is two times of that. And so what we’ve done over the course of two years is double the amount of savings that’s going through the P&L. And that’s what’s in the forecast next year. And what’s important to note is last year with that initial target, we drove no cost of goods sold leverage in the P&L. This year, particularly in the fourth quarter, for the first time, we turn that to cost of goods sold leverage and next year that leverage become significant. So we will walk through all of that in investor day, but that will give you some rough sense of the numbers.

Thanks.

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

Hi. Thank you. Hey Howard, can I just clarify -- are you saying you are seeing this shift in retail that you noted last year starting earlier seasonally this year? Was that your observation?

Yes. Let me try and take a shot at that. If you remember last year, I spoke very specifically about the seismic change in consumer behaviors. And what I talk about specifically was a downturn in kind of traffic that we saw historically that I felt strongly was being displace be e-commerce and mobile shopping. As result of what happened last year, as soon as Christmas ended, we worked diligently to literally transform the entire Christmas holiday beginning in middle of November. In anticipation of another year of the downturn in traffic that could be worst in the year before. And the work that I’ve outlined in terms of Starbucks for Life and all the plans we have around the 100 proprietary cards and leveraging the success we’ve had with card in the last couple of years. Most specifically last year, we sold over $1 billion of cards. All of that is in place, beginning for the holiday season. What we saw though was that downturn in traffic which literally, I think when you think about back-to-school. If you talk about all the national retailers, back-to-school this year was almost a non-event for most retailers, physical retailers. And so once again, we saw the downturn in physical traffic. But we did not anticipate seeing it in the fall, we anticipated and we prepared for the holiday season that is what I’m saying. This is not a throughput issue and this is definitely not a competitive space issue. This is a shift, a cultural shift in consumer behavior. I also want to just reiterate one thing. We strongly believe that the opportunity around convenience. Leveraging will be around drive-throughs and creating convenient opportunities for customers to get access to Starbucks is going to be another way and which we are going to win.

Okay. Thank you for that clarification. Can I ask one more? Just on the transaction of growth, the composition of the same-store sales mix, I think there's no question you are executing at all-time record levels. Traffic was still up. But is the challenge creating the opportunity for that incremental traffic growth? Are the speed-of-service productivity measures up year over year, but is that gap year-over0year starting to narrow that perhaps just makes it more difficult to drive transactions -- incremental transactions?

Yeah. Just to be clear and I think Howard said this. This is not a productivity issue. Productivity in the fourth quarter was stronger than all year long and significantly stronger than it was in the fourth quarter. The year ago productivity as measured by transaction per labor hour. Our ability to put more traffic through those busiest day parts. So that really isn’t the issue. The broader issue is about less traffic out there for us to capture and bring in, as Howards just described this. Fundamentally, it’s not a throughput issue whatsoever. And as we continue to drive in issue such as Mobile, Order and Pay and a larger percentage coming through the mobile app and payment technologies and whole digital experience, all that does is raise the lid on our ability to increase traffic for the stores and all day parts.

I’d just add to that that the -- when you look at the 42% of our stores are drive-through and offering tremendous convenience to our customers, we are seeing some of our strongest performance there. What we are anticipating in this coming year is the same step change and convenience that was offered in those stores to drive-through, is going to begin to happen through Mobile, Order and Pay. So the urban customer and the metro customer can begin to have that same convenience that people have shown by staying seated in their cars and quickly grabbing Starbucks on the go. We think it’s a step change driver of our business.

Thank you. Appreciate the thought.

The next question is from John Glass with Morgan Stanley.

Thanks very much. I'm wondering as you think about the role a check will play in the next couple of quarters, particularly as you start to anniversary the first big markets you've rolled food out. So can you talk about how those early markets are performing as they comp? Specifically, could check continue to grow in a year or two and by the same magnitude? And at the same token, I don't think this is the direction you're heading, but if you talk about if it's a change in the consumer, what role does increased value play in driving greater transaction counts, if any?

Yes, John. Hi. It’s Cliff here. With regard to food, obviously, we’ve rolled out now the La Boulange platform to all of our stores. We’ve got about 11,000 stores across the U.S. for company operated and license stores. And what we are seeing is all the learnings that we got from the early markets, we applied to more recent rollouts and we are seeing continued improvement in our operation around food, both on the sell side with another 2% contribution from food growth. We’ve seen the learnings from bakery has really helped us, enhances strengthening our performance around breakfast sandwiches. We’ve started to rollout lunch, which is the next important day part was around food. So we are seeing our ability, our operation ability around food and also we’ve been able to refine and improve food, not only in the morning day part, we’ve had a record breakfast sandwich yet and that’s grown by about 30%, lunch has grown by 14%. And we’ve only just started that, so year-on-year food is growing and is definitely helping check as is beverage mix as well. Howard, do you want to answer?

Yeah. And I would just add in terms of, Mobile, Order and Pay, our research and our design indicates that we look to see an improvement in ticket as well through the way we are designing that program as well. So it’s not just traffic. It’s not just throughput. It’s not just convenience but we believe it will track. It will hit ticket as well

Just to clarify, in year two, the stores that have had food for 14, 15, 16 months, they are still selling an incremental 2% traffic check growth over the year ago period.

Yeah, I wouldn’t break it out as purely check. Some of it is growth of attach, but makes sure attach and mix -- yes, we are seeing that growth across the system.

Thank you.

The next question is from R.J. Hottovy with Morningstar.

Thanks. Just had a question about the logistics around the delivery plants. First, if you've had any test markets that you've had the delivery plans in place, what kind of learnings you've had there? And then secondly, will these be facilitated out of existing stores or will some of these alternative footprint stores you've talked about play a part in that? Just any color on the delivery plans would be helpful?

Matt Ryan here. Its very early days at this but we are moving ahead, full speed ahead. The pilots are coming soon. We are going to be looking at a number of different options. There will probably be a multiple number of solutions that we go with them in terms of how we operationalize this. And at this point, we are not ready to tip our hand on that but suffice it to say we have lots of different ways of doing this in front of us and you can expect to see things in 2015.

The next question is from Jeffrey Bernstein with Barclays.

Great. Thank you very much. So question on the Americas -- on the operating margin. But -- it continues to push new highs, I think we are now in the mid-23% range. It was up close to 200 basis points this year. I know you mentioned we're going to go more modest improvement next year. Just wondering what you would attribute the greatest driver as perhaps where you think that could go without changes in the ownership towards more licensing. But that does kind of lead to my other connected question, which is just it looks like fiscal ‘15 is going to be over roughly half licensed in terms of new openings. I'm just wondering why we wouldn't consider pushing more heavily licensed or relicensing existing stores. I think you're at 40% today. But why wouldn't the U.S. or the Americas be at 60%, 70%-plus licensed just to kind of effectively push that margin even higher and take some of the onus off of you from an operational standpoint?

It’s Scott. I’ll take the margin question in the U.S. I think the short answer is we think we can continue to grow operating margin in the U.S. business. If you look at the strength of the comp growth and the number of drivers we have lined up next year. And you look at how we’ve been leveraging margin over the past couple of years through really all opened down the P&L store operating margin leverage, cost of goods sold leverage and G&A leverage. I think we can continue to drive more of that. I think we can continue to drive labor productivity as Troy talked about. So I don’t see a limit to the operating margin growth. I think this year was an extraordinary year but I think we see it continue to expand in the future.

Jeff, let me speak to your last question. We generate unlike many others in company operated retail extremely strong return of capital as we deploy capital into company-operated stores. That’s true all around the world. So our decision around when to license and when to company own are not surely driven by simply percentage margin because that’s one thing. But we very significantly look at the overall size of the P&L, our ability to deploy capital and generate very, very strong return on capital, which we can do, the ability to use company-operated formats but in some case license operations to get access to geographies where we are not able to operate specific sites in real estate where we are able to operate ourselves. And so there is a wide range of board decisions that lead us to what we believe to be the awful mix of ownership, company operated and license in the U.S. and that’s same analysis, sometimes a different answer to that same set of analytics lead us to think about license versus JD versus company operated all around the world. So we’re very pleased with the direction we are going, both in terms of our company-operated development which will continue to accelerate and our license store development which will also continue to accelerate.

I think it’s also good to say that there has been some exciting developments in recent years in license which traditionally was transport and grocery which continues to grow. But we’ve also had the opportunity whether it is in Vegas, in hotels, in entertainment areas but more recently in Disney, which has just been incredible to offer Starbucks to a whole group of new customers in a captive space. And we see that continue to grow so we are pushing ahead on that as we push ahead on plans to expand our company-operated stores across the U.S., Canada and Brazil within the Americas.

Thank you.

The next question is from Matt DiFrisco with Buckingham Research.

Thank you. I had a couple -- just one question on the modeling side and a clarification. I just want to understand when you said the 31% tax rate for 2015, is that a number that you are applying or using for both earnings numbers or is there a normalized tax rate associated with the 308 to 313? And then my question was with respect to the marketing. There was a quick reference in 1Q, and I think David asked also about that, pulling forward or your reaction to the 1% traffic. Are you going to spend more on marketing? Could you quantify for us maybe how much of a wait on 1Q's earnings -- that marketing, as well as the partner conference is going to have on your growth rate? Thank you.

Let me clarify the marketing issue. There is no additional marketing spend for this quarter than we previously had in our operating budget. We anticipated how big Starbucks for life could and would be. And we’ve allocated marketing money against that that is in our AOP and in the guidance that we’ve already shared with you. So there is no additional market expense beyond the normal course of business.

But additional for last year? Additional relative to last year though, it is. Correct? Because you didn't hold it out.

No. Actually its -- we are not going to get into specifics of how much we exactly spend on marketing but we are not spending -- I can tell you we are spending more on marketing for this holiday than we did last year. We’re just reallocating the money against Starbucks for a while.

Okay, and then the partner conference?

Pretty even.

Well I’d say we did not go for any specifics to that. We have a number of investments that Scott spoke about including the partner conference as we travel through this quarter that lead to the guidance with the initiative to the quarter and no specifics attached to any one of those items specifically.

And then on the tax rate, if you think about the guidance I gave on 31% which included 4 points related to the Japan transaction and the difference between GAAP and non GAAP, Matt, is all due to the Japan transaction and so you get back into what the non GAAP rate is?

And if I can just wrap up one point on that, not related to tax but related to the previous thing. Things such as the leadership conference which we have conducted in year’s past and conducted on just a couple week ago here in Seattle. Investments in our partner experience, those are critical investments that you should not view as cost or margin pressure. On the contrary, those have consistently in our business lead to a sustained growth in the partner experience and the partner’s ability in our source to drive great customer experiences which is fundamentally what fuels the kind of comp growth in margin structure and volumes in Starbucks business that nobody else can replicate. These are investments in the current year and in the future that we are very proud of.

Right. I was just looking at within the prepared remarks, I think it was cited for 1Q's growth. I wasn't suggesting it; I thought it was cited in the prepared remarks that marketing and the partner were one of the reasons why the growth would be slower than the full year. Is there something else?

Understand. No, just a wide range of investments that we make in the business constantly, nothing more specific to provide there.

Great. Thanks.

The next question is from Andy Barish with Jefferies.

Hey guys. I guess, I would like to just follow up on that on the two key investment areas for 2015 in terms of the partner pay and benefits and then digital. It does sound like those are very strategic step-ups, though. So I guess any help in terms of quantification in that regard would be useful?

Yeah I think I mentioned those in my prepared remarks. I think the way to think about that is if you look at our long term EPS growth rate of 15% to 20%, we’ve guided right in the middle of that. What’s bringing us down a point or two of the top end of that is some of those investments. So we don’t have the commodities favorability this year. And we are going a little bit more forward into some benefits around partner paying benefits and around digital. So that’s what really brings us down from the upper end towards the middle. So we add all the things Troy referenced across the business together is a pointer to on the growth rate.

I’ll jump in, Andy, on other question and then Adam can add. Starbucks for life is the main core element of holiday. However how many giftings and the loyalty program MSR, the opportunity to begin launching XOP Mobile Order and Pay in Oregon. And then our mobile payment in app, all of these things are skewed towards the recognition of the cultural ship we saw last year and what we strongly believe will put us in a position to win over a long period of time. And that is integrated into what Matt talked about earlier about taking a page out of our drive-through business which has been so strong and cracking the code on what the analog is of our urban stores and using Mobile Order and Pay and then the second half of the year delivery to accomplish that. And that -- these investments are going to pay off big time and we already know that Mobile Order and Pay is going to drive traffic in comp growth. Adam, you want to add anything about the specifies of that?

Yeah, what’s important to call out is both with regard to the Starbucks for life card program this holiday as well as the launch of Mobile Order and Pay that we have the significance competitive advantage. We’re not starting from scratch. We are rolling out Mobile Order and Pay. We are doing Starbucks For Life on the back of the leveraging already having built a world class mobile commerce and loyalty platform. So we have $12 million customers that are highly active on our mobile app $8 million active unless our loyalty members. One of the successful is not the most successful gift program in the world. We are integrating everyone of these programs, Card For Life, Mobile Order and Pay and eventually delivery right into that seamlessly. That’s going to give us a huge competitive advantage going forward and give us the belief this is going to significantly drive throughput in incremental transactions.

Okay. Let me have the last word and just share with you that we are playing offence here. I mean, we understand that there is a macro issue in the consumership. We are playing offence and we began that last year right after holiday and come this holiday in calendar ‘15, we are going to be in a position to win. End of story. JoAnn, I think that’s it.

Thank you, Howard. Thank you all for joining us today and sticking with us a little bit longer this afternoon. We will hopefully see you here in December and have a good evening, Thank you.

This concludes Starbucks Coffee Company’s fourth quarter fiscal year 2014 conference call. You may now disconnect.