So providing more hours for our partners per store. We have a ways to go, but we know that that’s a high driver of engagement. All of those efforts together have led to lower turnover and a more stable environment. And it’s that stability that really allows us to create a better efficiency in serving our customers. So as an example, I already spoke about our morning daypart of this quarter in the US was the strongest that we’ve seen. And that’s a function of all of those efforts and activities that I just spoke about being realized in supporting our demand. So creating a better experience for our partners leads to the better experience for our customers. Now, some of that was annualization from the efforts that we made last year, but we continue to see quite a bit of opportunity ahead when we think about continuing to focus on scheduling, continual focus on improvements in staffing.
We have more work ahead of us there, as well as in-store, or excuse me, out-of-store efficiencies, the way we scrutinize our sourcing, the way we distribute to our stores. We’ve seen some benefits from that this quarter. That won’t show up in store operating expense. That’ll be in our product and distribution cause. But between those two lines, that’s where we see potential opportunity going forward. So it gives us confidence in the progressive margin expansion, but importantly, our ability to continue to meet that 15% to 20% earnings growth.
Operator: Your next question comes from David Palmer with Evercore ISI.
David Palmer: Hi. A big picture question. I don’t know if this is maybe one for Brady, but by our math, just looking back to 2016 just because you gave some percentages on what was cold and what was hot of your beverages. It looks like your US cold beverage sales have grown by roughly $750,000 per store while hot beverage sales have declined by $150,000 per store. And since pre-COVID, your rewards membership has more than doubled. But traffic is down since that time. And we don’t see your customer like you do. So this is a bit of a question. But it looks like you maybe have less of that everyday hot coffee and latte consumer and more of a new type of consumer that comes less frequently and probably has ops for cold beverage.
I’m envisioning them being my daughter and three of her friends coming in some afternoon. So it’s more of an episodic visit, big orders, cold beverage led. So with this happening, if this is what’s happening, how does that inform your strategy for growth going forward? I know you’re doing some things to increase capacity on cold beverage and maybe that helps fuel the summer months a little bit more. But I’m just wondering like what are — do you share that perspective and how does that fuel your strategy? Thank you.
Brady Brewer: Yeah, thank you, David. It’s a great question. My perspective is a little different in that we don’t see a tradeoff in frequency between cold beverage customers and hot beverage customers. It’s really a shift in generational taste preferences where that highly frequent millennial Gen Z customer is drinking cold coffee every day, just as people of different generations were drinking hot coffee to start their day every day. So we’ve seen a continued increase in our cold beverage in our portfolio, as you noted. But what I found with the cold beverages is there are infinite customizations possible on the cold beverage platform. And what that means is that it’s increasingly a beverage you can’t get anywhere else. And so it has a staying power to it.
So we don’t see a trade-off in frequency from hot or cold. Cold is a great business for us, and we don’t see a threat there, we see a great opportunity. You mentioned about the capacity that we can put in place with Siren Systems and other aspects of the things we’re doing in reinvention, which is really about accelerating our capacity to create and craft cold beverages at pace with our customers, both in drive-through, mobile order, and delivery in particular. So that is a huge opportunity for the company. And on hot beverage, I would say we’re not leaving that customer behind. We’re continuing to innovate on hot beverages just as we did today with the launch of our Oleato beverages. We’re launching Clover Vertica store across our portfolio.
We’re in 10% of stores now. And that is the best cup of brewed coffee you’ve ever been able to get at Starbucks rolling out on a proprietary machine. And then lastly, you mentioned, or Lax mentioned, our Milano Roast, which is really our passion for coffee coming to fruition. So whether you’re a cold coffee customer or a hot coffee customer, we’re increasingly creating a reason for you to visit and we see no trade-off there.
Operator: Your next question comes from Sara Senatore with Bank of America.
Sara Senatore: Thank you very much. I just wanted to ask about unit growth. I know in both the US and China, I know you mentioned new, the most recent vintage of high volumes and strong ROIs in the US, but I was curious if you are seeing anything that might suggest that the acceleration and unit growth may be translating into slower same-store transaction growth? I know this is a very kind of idiosyncratic quarter, but in the past, I think when we have seen faster growth, it has sometimes corresponded with slower same-store transactions and I wanted to see if you had any color on any variation in markets or infill versus greenfield? And then if you could just maybe address that same question in China. Thank you.
Laxman Narasimhan: Rachel, do you want to take on the US? And, Belinda, I’d love you to take on China.
Rachel Ruggeri: Sure. Thanks, Sarah, for the question. In the US, what we see is we continue to see that our unit volumes, as we shared in Laxman’s prepared remarks, are continuing to grow. And importantly, when you look at the growth in North America and in the US businesses this quarter, our revenue grew 9%. So you’ve got a 5% comp in there. And we’ve already spoken to, though we were pleased with the performance and the strength we saw, particularly our most loyal customers, we talked about some of the headwinds that related to some of the impact we saw there. But when you look broadly and you look at the combination of comp and new store growth driving to that 9%, it shows you that we still have a lot of, I’d call it, opportunity even in the US in terms of continuing to open more new stores.
When we do it through purpose design, we’re able to look at the market and determine how do we drive the overall trade area higher with a variety of different types of stores to meet customers where they are. So we see a lot of opportunity there. And with that, I’ll turn it over to…
