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Jeff Bezos wants the bottom half of earners to pay zero income tax—he says nurses making just $75K should save $12K a year

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Jeff Bezos wants the bottom half of earners to pay zero income tax—he says nurses making just $75K should save $12K a year

2

Despite a $500 million net worth, Shaq just finished his fourth degree. He warns graduates: 'Your character will take you further than your resume'

3

Bolt CEO says he let go of his entire HR team for creating problems that didn’t exist: ‘Those problems disappeared when I let them go’ 
Retail

Starbucks is feeling the pain from employee tuition, wage hikes

Phil Wahba
By
Phil Wahba
Phil Wahba
Senior Writer
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Phil Wahba
By
Phil Wahba
Phil Wahba
Senior Writer
Down Arrow Button Icon
October 29, 2015, 7:18 PM ET
Photograph by Stephen Chernin — Getty Images

Better customer service and reduced turnover comes at a cost.

Starbucks (SBUX) reported another set of stellar quarterly results, but its stock got slammed when it forecast a profit for the current quarter that missed Wall Street’s expectations because of rising employee costs and higher mobile tech investments.

The world’s largest coffee-shop operator reported global sales at cafes open at least 13 months rose 8% in the quarter ended Sept. 27, the 23rd straight quarter of 5%-plus growth. Starbucks’ amazing run, which has sent shares up more than 50% this year, has been helped by CEO Howard Schultz’s investments in the retailer’s tech to speed up service.

Starbucks has also been spending more on employees, which the company calls “partners,” providing college-tuition help and a raise, something Schultz said is lowering employee turnover, which in turn helps with customer service.

“We are seeing improvements in partner attrition, a direct result of our partner investments at a time when the industry overall is actually moving in the opposite direction,” Schultz told Wall Street analysts. “Our comp (comparable sales) results are strongest where we are having the greatest success in reducing turnover.”

The coffee giant rolled out mobile ordering in the U.S. last month and recently launched it in Canada, something aimed at improving a problem that has dogged it for some time: long lines in its stores..

Starbucks will increase spending on employees and tech by between $100 million and $125 million in the current fiscal year that just got underway. That compares to $145 million in fiscal 2015.

About the Author
Phil Wahba
By Phil WahbaSenior Writer
LinkedIn iconTwitter icon

Phil Wahba is a senior writer at Fortune primarily focused on leadership coverage, with a prior focus on retail.

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