Brian Harbour

Raj credited owned distribution and scale for outperforming market commodity costs by mid-to-high single digits.

Raj confirmed Q4 implies margin growth across most P&L lines. Declined to specify individual line items, manages holistically for bottom line.

Raj confirmed growth above $50k across all brands, biggest from $150k+. Fine dining strongest above $200k. Larger disparity between lower and higher income cohorts.

Raj cited retail demand destruction accelerating (November steaks down ~14%), prices starting to improve, 45% coverage locked for back half. Beef production increased to near prior year levels recently.

Rick confirmed pleased with 4% without Q2 marketing. Tracking with overall to-go business. Marketing options available to drive higher if desired.

Rick said lighter portions will dilute check slightly if guests trade down, but believe it will drive traffic long term. Seeing slightly more frequency already without marketing.

Raj explained only 25% beef coverage for next 6 months due to belief that elevated prices are unsustainable. Beef and tariff-impacted shrimp are biggest variables.

Raj projected mid-2s pricing for FY2026, starting close to 2% in Q1 and rising. Pricing will still likely be below total inflation.

Rick described investments in affordability (menu mix), labor for speed of service, and continued pricing below inflation. Investments in 10-20 basis point range.

Rick attributed more of the momentum to fan favorites LTO than delivery, which wasn't broadly rolled out until February.

Rick shared Uber Direct is 6% of to-go with growing order volume, higher average order than pickup, and 15% of orders include catering items.

Scott cited measurable improvements in staffing KPIs, GM turnover at historic lows, and rising taste of food and GSAT scores coming out of the All Managers Conference push.

Adam broke down comp: transactions +60bps, check -10bps (price +90bps offset by -100bps mix from lower group size, BYOC cannibalization, snack occasions). Expects mix closer to flat in Q2.

Adam gave detailed breakdown: in-restaurant flow-of-food initiatives plus supply chain savings from supplier diversification and logistics optimization yielded 30-40bps net gain beyond the portion investment offset.

Adam confirmed ~8% two-year comp expected to continue into H2 with fall campaign replacing summer initiatives. Expect to maintain or build upon current trend.

Scott explained hospitality push came from a problem detection study showing cleanliness and friendliness gaps. Already seeing refunds drop and brand perception improve.

Adam detailed COGS impact: beef from Australia, packaging from Vietnam/Indonesia/Thailand, avocados from Colombia/Peru. New build impacts from lumber, shelving, China-sourced items.

Adam highlighted strong performance with broad protein switching, new customer acquisition, and sustained incidence. Noted pent-up demand from years without brisket.

Scott confirmed both labor redeployment and margin capture from equipment. Detailed efficiency gains for dual-vat fryer, plancha, and rice cooker.

Qualitative on uplift performance across formats and dayparts; Smith added the $150,000 average investment and overnight execution, but no per-store transaction lift was quantified.

Niccol confirmed 80% of stores hitting 4/4/12 targets. Scheduled ordering rolling out in May expected to improve MOP queue management. Team also learning to better sequence mobile orders from on-premise customers.

Brian outlined $2 billion cost reduction program over next two to three years across entire P&L including G&A, procurement, and technology. Emphasized it is not dependent on a single project but a diversified portfolio of initiatives with clear ownership.

Brian confirmed no additional investment needed beyond initial Green Apron rollout; future labor growth will be earned through transaction growth. Cathy added Green Apron investment will annualize into early FY2026; coffee expected as headwind at least through first half.

Brian confirmed mid-August rollout start with assistant managers part of the roster. Noted it takes time for partners to reach rhythm and customers to recognize improved experience before transactions respond.

Brian dismissed concern about simplification hurting transactions, citing 80% increase in stores with positive transaction comps. Innovation pipeline being rebuilt using stage gate process for food, drinks, and afternoon daypart.

Brian explained the reorganization creates accountability through new Chief Store Officer and Chief Development Officer roles. Rachel confirmed G&A savings start in Q4 but full-year G&A still higher due to lapping lower performance-based comp.

Niccol said menu simplification spans beverage and food and is underway, and will reinstate a stage-gate innovation process, but gave no SKU count or timeline.

CEO said about 1/3 of the system didn't follow recommended EDAP pricing (10 items under $3 leaves wide latitude vs a fixed $5 deal); noncompliance is now factored into franchisee business reviews affecting growth eligibility.

CEO explained need for both meal deals and everyday affordable price points. Noted France was an exception lacking strong programs on both dimensions, now being fixed.

Ian attributed the CapEx increase to December 2023 Investor Day commitments, FX headwinds, and building ahead on 2026-2027 pipeline with returns meeting expectations.

Chris said value matters to all income cohorts, not just low-income; EVMs and McValue attract the upper income consumer too.

Chris walked through consumer, restaurant and company platform benefits; Ian reinforced 2025-2027 as the investment phase before efficiency benefits flow.

Ian acknowledged ongoing mix adjustment through Q2 until lapping the June 2024 $5 Meal launch in Q3.

Ian gave specific mix (about 70% IOM of wholly-owned) and confirmed new-unit first-year returns in the low to mid-teens area.

Harbour asked about Salmon's staying power and mix drivers; Tolivar said incidence was in line and constant, with premium attachments also aiding mix.

Brett said salmon is performing in line with market tests; not committed as an everyday item but expected to run through Q4 at minimum.

Direct: top operations priorities are the people-development pipeline, elevating hospitality, and consistency of execution every location, every shift.

Attributed the margin cut to Q3 sales plus persistent higher repair-and-maintenance costs; preopening is up on more units under construction and GM travel to high-volume markets.

CFO acknowledged the macro fog on consumers but attributed the deceleration mainly to lapping the steak launch and the 2024 class honeymoon effect, noting no change in premium attachments or incident rates.

CFO walked through steak cost impact, low-single-digit food inflation, and no outsized labor investments planned, a direct answer.

Jordan pointed to the marketing calendar and DomOS with its orchestration agent to improve store consistency.

Russell acknowledged they can get better in all aspects. CMO Kate Trumbull working closely with agency on new stories for H2. Not just spending the most money, need most compelling stories too. Russell (former CMO) said he's really excited about stories on the H2 calendar.

Sandeep declined to discuss current quarter trends in detail. Broad observation about restaurant industry sequential slowing. Initiatives unchanged but monitoring macro. Russell separately confirmed brand refresh costs funded by ad fund (addressing prior Christine Cho follow-up).

Sandeep separated corporate store noise (insurance charge in Q2) from franchisee EBITDA which remains very good and expected to grow. Food inflation heavier H1, lighter H2, full-year low single digits unchanged.

Sandeep confirmed remaining closures will be normal-course, unit guidance unchanged. The 1-2% international SSS guide bakes in macro and geopolitical deceleration from Q1 levels.

Russell confirmed share gains in both channels. Sandeep emphasized expect balanced growth between delivery/carryout and ticket/transaction in 2025 with continued pricing discipline.