And that’s really driven by, what I’d say, is the sustained operational efficiencies from our reinvention. So, the investments we made are fueling growth, investments in our partners, in wages, in training, in our new store and equipment, and that’s leading to a more stable environment overall, which is supporting that leverage. It’s allowing us to be more efficient in how we serve the customer. So that’s the biggest driver in the quarter. Next is sales leverage, followed by a strategic pricing. And that sales leverage really comes from the fact that in Q4, our fall launch resonated with customers, and we saw record demand really across the globe, but largely in our U.S. business, and that also fueled the margin expansion. And then that all helped to offset the investments we’ve made, including investments in G&A, investment in partner wages, as well as investment in G&A.
Now when we look to FY ’24, we will expect some of that momentum to continue. But I would say it’s more important to look on a full-year basis, and we’ll continue to see margin expand more in line with what we saw on the full-year basis. But again, continued margin expansion. And it’s that combination of strength in our revenue, but also strength in our reinvention, which is delivering very tangible financial results.
Laxman Narasimhan: If I could just add to this. Growth is clearly a real enabler of leverage, and you’ll see that reflected in the various lines in our P&L. Additionally, we see efficiency opportunities. And later this afternoon, we’re going to detail out a $3 billion savings program and efficiency over three years, with a big portion of that coming from outside the store in the supply chain, in particular, and you’ll see that a portion of that is certainly coming out in our top line. And so, this gives us the real confidence as we look ahead around the kind of efficiency that we have, that gives us the ability to invest in the business and at the same time, deliver the progressive margin expansion that Rachel talked about.
Operator: Next question is coming from Lauren Silberman from Deutsche Bank. Your line is now live.
Lauren Silberman : Thank you. Congrats on the, quarter. Also, on just U.S. comps and traffic. Can you help unpack where the growth is coming from? Is it new customers, existing customers, rewards members or more occasional customers? And then can you give us an update on where you’re running with transactions per store per day? Thank you.
Rachel Ruggeri: Lauren, I’ll start by just saying, overall, our traffic continues to be strong and it’s growing. So, when you look at the success of our performance in the quarter, particularly in the U.S., our highest-ever average weekly sales were driven by a combination of strength in traffic but also strength in overall ticket. And we saw a record number of customers coming into our stores and spending a record amount. Now those customers are both our rewards customers as well as our non-Starbucks Rewards customers. So, we’re seeing growth in our customer base across the segments. And that’s driving strong performance as each customer is spending more. And I think what’s unique about our business, particularly over the past couple of years is we’ve evolved and adapted towards our changing consumer demands.
And so, we’re seeing total transactions growing overall, both in our comp stores, in our new stores as well as our licensed stores. And importantly, we’re seeing units per transaction significantly higher. And that’s driven by the growth we’re seeing in drive-through as well as delivery, which has a higher attach rate or more group orders. And that’s all leading to the stronger performance that we saw in the quarter and will fuel the momentum as we go forward. And in terms of traffic, when I think about FY ’24, the comp guidance range that we provided includes continuing improvement in our traffic. So, our transactions per store per day improved this quarter versus last quarter and the year before. And we’ll expect that improvement to continue in FY ’24, as well as we’ll continue to expect an improvement in ticket as we very purposely innovate around customization, more premium beverages as well as ensure we’re able to continue to drive attach.
And the combination of that will support our double-digit revenue growth that I guided to.
Laxman Narasimhan: If I can just add one thing to it. I think what has happened over the last several years is how much this business has evolved in order to meet the customer where it’s at. And I think you’re seeing that as well in traffic, in transactions, but also in what we’re doing in purpose-defined stores, and later this afternoon, we’re going to talk a bit about how we’re going to lean in even further around how we meet customers where they are at.
Operator: Next question is coming from Sharon Zackfia from William Blair. Your line is now live.
Sharon Zackfia: Hi, good morning. Thanks, for taking my question. I was hoping you could give us an update as you talk about the transaction improving, how speed is improving or throughput, whether how you measure that in the drive-through or kind of on the front line as I would think of it walking into the store.
Laxman Narasimhan: Let me start and then Rachel can add to it. One of the things that the team has worked on incredibly on over the last year or so is putting in place a much stronger operating foundation in the stores. And I’m very proud of the progress that they are making. And that includes how we deal with the processes in the drive-thrus. You’re seeing real improvement in terms of out of the window of time in the drive-thru. The team has put operating practices across these various formats. And I feel very good about the progress that they are making in that area. I think in terms of the automation or the equipment that we have also brought into the store, that has also been a driver of some of the changes that we have seen.
I think just ahead of the summer, we were able to get in the portable cold foam blender into stores, which really helped our partners deal with the growth in volume on beverages in the summer. So, a combination of operating practices, the equipment that we are putting in place, all of that adds to much stronger operational foundation in our store, and we expect that to continue.
Rachel Ruggeri: The only thing I would add to that, Sharon, is that’s all part of our reinvention. So, it’s all about finding ways to be able to optimize the production environment so we can better support our partners in serving our customers. And to Laxman’s point, we’ve seen tangible benefits in the quarter and actually throughout the year has driven improvements in our out-the-window time. We measure what good looks like, and we’ve made great improvements and there’s more opportunity ahead. And that’s helping us to not only more efficiently serve the customers, but it’s what’s leading to the margin expansion as well as the earnings growth that we’re seeing. And we’ll continue to further those, what I’d say, areas of focus in FY ’24, specifically on staffing and scheduling as we continue to work on ensuring we have the right hours for our partners at their periods of preferences, which will create another level of stability in our store environment and greater engagement overall that will, again, help us in terms of the efficiency in serving our customers.
So, we expect that momentum to continue.
Operator: Next question is coming from John Ivankoe from JPMorgan. Your line is now live.
John Ivankoe: Hi, thank you. There’s been a lot of conversation this quarter about throughput, particularly at the drive-thru, but we can also talk in-store. Can you talk about your peak hour or peak 15-minute throughput opportunity? That firstly, you’ve already realized that you think you can realize with a more optimized store operational platform and especially having employees with greater tenure. How much more of an opportunity do we have from here?
Laxman Narasimhan: John, if I could take that on. Thank you for your question. We have more opportunities than what we have realized, but we make very good progress. If you look at staffing and scheduling and how we are working on that, I think we’ve made material progress in that area. And I think as a consequence of that, you’ve seen attrition levels now lower than where they were pre-COVID. You see tenures of partners in the store increase. And that’s going to continue. I think if you just look at what we’ve been able to achieve with the investments that we’ve made in our partners with wages and other benefits that have been provided to them. If you take a look at the take-home income, on average for our partners on a year-over-year basis, it’s up 20% on average.
