Laxman Narasimhan: I think, John, thank you for the question. Let me first start with your peak question. We’re doing definitely better than what we did before because of the investments that we are making, but we still have further headroom. And I think as we make more investments as we sort of further refine how we think about scheduling and staffing, how we ensure that we get the flows right in our store, we will have the ability to take that up even further. So the peak day parts are actually growing and growing really well. Now to answer your question about opportunities, there’s opportunity pretty much across the board. If I look at beverage and beverage innovation, terrific, strong innovation coming, more to come. If I look at dayparts, we have opportunities in the afternoon daypart.
And our Starbucks Refreshers is a way for us to attack that. And as you know, we have — it’s a big and sizable business, but it doesn’t yet fully meet the full needs of what we could do in the afternoon. If I look at food attach, it’s at the highest level we’ve had, but we have the ability for us to continue to elevate and innovate in food in order for us to further grab the opportunity that we have there. Delivery is an opportunity that, as I said, it’s just early days. I mean, we’ve also built a $1 billion lag. And that’s just the U.S. If I look at China, too, it’s growing enormously. So we have a leg there too in terms of what we can do with delivery. And furthermore, I said earlier that we actually have an opportunity with regard to the net store growth in the U.S. There’s real headroom for us to also locate our stores where we see customer growth, smaller towns, different geographies.
And we’re clearly looking at all of it, not just with our own stores but also with licensed stores. So John, it’s a pretty rich set of areas as I look at growth and what we could get that is available for us, and this is just North America.
Operator: Thank you. Your next question comes from Peter Saleh with BTIG. Please state your question.
Peter Saleh: Great. Thanks. I just wanted to come back to North America operating margins. Could you maybe give us a sense of some of the drivers of North America operating margins going forward, maybe in order of magnitude? Do you see a path back to, if not, exceeding pre-pandemic levels? And then I guess, within that, do you feel like the mix of drive-throughs maybe heavier on drive-throughs these days versus where you were pre-pandemic? Does that help push the operating margins back up and above pre-pandemic levels? Thank you.
Rachel Ruggeri: Hi, Peter. This is Rachel. Thank you for the question. We’ve been encouraged by the performance we’ve seen in North America, both on the top line and on the bottom line. And year-to-date in North America, we’re sitting at about 19.9% (ph) margin with about 40 basis points of expansion, and that’s driven by a combination of sales leverage, pricing, the benefits from the reinvention plan showing up in productivity, which is helping to offset some of the investments we’ve made and we see opportunity to continue to expand margin over the long term as the benefits of the reinvention continue to amplify. And so I would look at that as really the reinvention is a significant driver of our opportunity in terms of margin expansion.
Through reinvention, we’re unlocking capacity to be able to serve demand that leads to sales leverage. And in addition to that, we’re creating efficiency and resiliency in the middle of the business that’s also supporting margin expansion. So I look at it more about what we’ve already seen progress today with reinvention, what we would expect to see going forward. And that leads us to solid margin expansion at the company level this year and progressive margin expansion in the future, which of course, will be driven in large part by North America.
