Danilo Gargiulo: Thank you and congratulations again, Howard. I want to expand a question that was asked earlier regarding the staffing level, but now expanded and maybe focus on the U.S. situation. So the labor market is still relatively tight. So can you share some update on the level of employee retention, turnover and staffing versus 2019. And perhaps if you can also comment on the evolution of the sentiment on partners and the connection scores now that you’re unfolding your level of investment?
Howard Schultz: Frank Britt?
Frank Britt: Yes. Thank you for the question. As a fundamental part of the reinvention agenda, as you know, is labor stability, lowering turnover and increasing throughput. And we are pleased with the traction we are starting to see in retention specifically. We’ve improved hourly partner retention rates by over 5% versus prior year same period. We’ve improved over 8% versus the highest turnover period, which was in Q2 of ’22 and this reduces the time and the investment required for additional new hires and it helps stabilize operations, and we’re now running in a pre-COVID level relative to the stores being open. As far as the labor market at large, as you well know, the sector does face challenges relative to capacity and talent and the record low unemployment, 3.5%.
However, we continue to see and experience strong and consistent overall applicant flow to support our store hiring with the typical seasonality. Our data continues to show that we are the employer of choice in retail at top tier, including the 100 percentile relative to benefits. And finally, we see lots of opportunities to continue to make Starbucks the best job in retail. And we have a very robust master plan as part of the reinvention agenda to make sure we can deliver on that brand promise to our partners in the same way we do with our customers.
Howard Schultz: Thanks Frank.
Operator: Your next question comes from Jon Tower with Citigroup. Please state your question.
Jon Tower: Thanks for taking the question. And best wishes to Howard on what’s next. Curious if you could just two things. First, talk about any incremental pricing that might be planned for fiscal ’23, particularly in the U.S., given that inflation while moving lower, in aggregate is still pretty sticky. Wondering your thoughts on pricing has changed? Then secondly, if you could dig into the progress the company has made on testing the Siren system in the U.S. and when investors can expect any sort of initial feedback on expected returns and say, the impact on stores going forward?
Howard Schultz: Rachel will take the first part, and then Sara Trilling, who runs U.S. retail will take the second.
Sara Trilling: Sure.
Howard Schultz: Rachel?
Rachel Ruggeri: Yes. Thanks, Jon. So in terms of incremental pricing, our comp and our revenue in North America right now, largely in our U.S. business is benefiting from pricing that was taken in back half of last year. So we’re benefiting from the annualization of that pricing. As we comp that this year, we’ll start to see our pricing levels normalize more to historical level ranges than what we had seen previously. And typically, our pricing had been taken in line with inflationary pressures. So given that we’re seeing inflation, we’re still seeing inflation elevated relative to prior years below FY ’22, but we’re starting to see it soften slightly. So we don’t have expectations that we’ll have to further that pricing increase. And instead, what we’ll see is, we’ll start to see pricing normalize to more historical levels by the back half of the year.
Howard Schultz: Thank you. Sara?
