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CEO Kevin Hochman stated that since the upgrade, rib incidents are already up over 20% without advertising, driven by menu merchandising and product quality. The plan is to turn on digital marketing in Q2 to leverage the 'wow' factor of the product to drive traffic. While not expected to be as large as burgers, he sees a significant opportunity to grow the category.

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CEO Kevin Hochman identified continued operational simplification and equipment upgrades to handle volume as key needs. He mentioned a 'Heart of House 2030' project looking at investments like faster TurboChef ovens and increased fryer capacity. CFO Mika Ware added that they are closely monitoring the labor model and have added positions like bussers to ensure service levels are maintained with higher traffic.

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COO Scott McPherson attributed the strong margins primarily to favorable sales mix and excellent OpEx leverage across all three segments. CFO Patrick Hatcher noted that inventory gains were a slight benefit in Q4 but are not factored into the 2026 guidance. Regarding trends, McPherson acknowledged a 'haves and have-nots' environment among restaurants but pointed to improving overall traffic and PFG's success in partnering with growing chains as sources of stability.

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CEO George Holm clarified that the Convenience segment's improvement stems from market penetration and new business wins, not a recovery in the underlying industry. COO Scott McPherson added that despite a difficult prior-year comparison, the segment's underlying EBITDA trends are strong. George Holm also noted that recent trends show independent restaurants performing better than chains, with casual dining remaining particularly challenged.

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CFO Patrick Hatcher noted that all PFG employees are documented and they don't foresee a direct impact on the company. COO Scott McPherson added that the company's workforce is in great shape. CEO George Holm commented that he sees continued growth in independent restaurants as closed chain locations are reoccupied, suggesting a healthy environment for new customer acquisition.

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CEO George Holm reported that the financial impact from the hurricanes was not material, as business from remaining open restaurants offset losses from closures. He credited the swift closing of the Cheney deal to PFG's complementary, specialized business footprint in Florida, which streamlined the process. On inflation, Holm noted that while cheese prices remain elevated year-over-year, they have been declining sequentially for the past couple of months.

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President & CEO Todd Penegor highlighted a two-pronged approach. First, a national message creates a halo effect for carryout. Second, success is driven locally through co-ops with compelling offers, friendly in-store service, and active community engagement to connect with customers around key local events. He noted that seeing franchisees "hustling" in their communities drives significant growth.

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CEO Kevin Hourican asserted that international success is expected to continue, not moderate, driven by adding sales resources in key metro areas, deploying technology like 'Sysco Your Way', and expanding strategic sourcing globally. CFO Kenny Cheung added that there is no structural barrier to international margins reaching U.S. levels and noted that recent acquisitions in Ireland and Great Britain are performing ahead of their deal models.

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CEO Kevin Hourican stated that sales headcount is expected to grow by approximately 4% year-over-year. He pointed to stronger performance in March and April and a record new customer win rate as proof points. He noted these gains are currently offset by a headwind from higher sales consultant turnover in the first half of the year, which he expects to become a tailwind in fiscal 2026. CFO Kenny Cheung added that many new hires are now reaching their peak productivity phase, which should benefit Q4 local volume.

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CEO Kevin Hourican expressed high confidence in the international segment, stating it will be a key growth engine for years with no structural barriers to margin expansion, driven by initiatives like assortment expansion and M&A. CFO Kenny Cheung framed sale-leasebacks as a routine part of their capital allocation strategy, used to redeploy capital from certain assets to fund higher-return growth projects, consistent with their focus on ROIC.

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CEO Kevin Hourican identified three primary drivers for the nominal gross margin decline: customer mix (stronger national sales), timing of strategic sourcing benefits, and a slight dip in Sysco brand penetration. CFO Kenny Cheung emphasized that most of the expected margin improvement in the second half will come from controllable internal actions, such as specialty growth and logistics optimization, rather than market lift, underpinning their confidence in the full-year outlook.

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President and CEO Tony Sarsam stated that the Hispanic stores have been top performers and the latest conversion is already seeing double-digit sales growth. EVP & CFO Jason Monaco added that the strategy is to expand from their strong base in Omaha, noting that remodels typically yield double-digit revenue growth. Monaco also confirmed that the recent Fresh Encounter and Markham acquisitions are performing largely in line with expectations.

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President and CEO Tony Sarsam responded that the timing for the acquisitions was opportune for the sellers, with whom SpartanNash has long-standing relationships. He emphasized that M&A is a key growth lever in a slow-growth industry. Regarding Amazon, Sarsam noted the business is stabilizing after previous declines but clarified that the company is not forecasting significant growth from that channel in its future plans.

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President and CEO Tony Sarsam explained that the CVP pilot is in its very early stages, having launched in one store less than a month ago, with a second store launching shortly. He noted that early returns are positive and the learnings will be rolled out more broadly in 2025 and are considered "absolutely applicable" to wholesale customers. Regarding own brands, Mr. Sarsam stated that their success, including the strong performance of the new Finest Reserve line, is tied to meeting consumer demand for both value and indulgence, which is driving penetration growth.

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CFO Dirk Locascio expressed confidence in achieving the $260 million COGS savings target, noting that suppliers remain eager to partner with a growing distributor and negotiations have not slowed. He attributed the temporary increase in OpEx per case to weather-related inefficiencies in Q1, such as lost shipping days, and reiterated that gross profit per case growth continues to significantly outpace OpEx growth.

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CEO David Flitman attributed the strong private label momentum to normalized supply chains, seller confidence, and innovative product launches through the 'Scoop' program, which he expects to continue. CFO Dirk Locascio added that recent acquisitions are progressing well with their integration into US Foods' systems and are largely performing as expected.

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CEO Mike Spanos clarified that holiday results were decent but simply fell short of internal expectations. He identified households earning under $100,000 as the most pressured consumer segment, noting a downtick in alcohol sales. Regarding market share, Spanos attributed the underperformance to the cumulative effect of needing to fix the entire value proposition—food, value, and consistency—stating the company is in the early stages of a multi-year turnaround.

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CEO Mike Spanos detailed that leadership changes and the Brazil refranchising are complete. He noted that menu reductions of 10-15% for most brands will be done by May, with Outback's larger reduction taking more time. The Ziosk rollout will finish by the end of April. Spanos also confirmed that the sales trends by brand seen in Q4 2024 are expected to continue into Q1 2025.

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CEO Mike Spanos shared that operators have been consistent in their feedback, requesting simplification, a return to the core guest experience, and improvements to center-of-the-plate items. Regarding future investments, Spanos outlined a framework prioritizing operational execution first, followed by redeploying resources and reducing non-revenue-driving costs. He stated that any new investments would be sharply targeted with clear returns to ensure revenue outgrows costs sustainably, but deferred specific 2025 margin guidance until the February call.

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CFO Tom Houdek explained that roughly half of the 100 bps margin improvement came from sales leverage, with the remainder from sustainable labor efficiencies. He noted these improvements are factored into the updated guidance. President and Chief Concept Officer Lyle Tick added that simplification is an ongoing process, highlighting POS enhancements that improve accuracy and efficiency. Regarding the check, Houdek cited the Pizookie Meal Deal and lapping a strong menu launch as drivers of negative mix, but expects the check component to be closer to flat moving forward.

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CFO Thomas Houdek stated that the guidance implies margin expansion, driven by initiatives in food cost, labor, and O&O, not just pricing. He noted that traffic is the main comp driver, and the company has intentionally underpriced inflation to boost value scores. Interim CEO Carl Richmond added that the focus is on growing absolute profit dollars, leveraging the high-volume potential of their large restaurant boxes.

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Interim CEO Brad Richmond explained that while new units are vital for long-term growth, the immediate priority is improving same-restaurant sales. He stated that the pace of new openings in 2025 would likely not change dramatically as the company refines its site selection and market strategy, with a potential acceleration in 2026 or 2027. CFO Tom Houdek highlighted two recent, very successful new openings and confirmed that capital will also be allocated to share repurchases. Richmond emphasized that these openings provide key learnings for their future growth strategy.

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Christopher Pappas, Founder, Chairman and CEO, stated that the company is prepared for potential tariffs, noting that they represent a small percentage of the overall business and costs can be passed on or mitigated through a diversified supply chain. He added that they have not observed any significant impact on demand, as their high-end clientele appears more insulated from economic shifts and it remains difficult to get reservations at good restaurants.

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CEO Christopher Pappas and CFO James Leddy responded. Pappas explained that the goal is to incrementally improve operating leverage and EBITDA margin by 20-25 basis points annually, driven by projects impacting both gross profit and OpEx. He also noted that the Hardie's cross-sell growth will continue, and any outsized impact on reported inflation will be called out. Leddy added that the company's evolution into a 'total solution' provider will cause mix fluctuations, emphasizing the focus on the spread between operating costs and gross profit dollars.

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CFO Jim Leddy stated that the Hardie's integration is expected to contribute to future margin improvement and currently dilutes overall EBITDA margin by 20-25 basis points, which they aim to recover. CEO Chris Pappas attributed strong performance to market share gains from long-term investments, which allows them to thrive in challenging environments. He noted that gross margins are up, demonstrating that customers value their reliability and service, which drives cross-selling and mitigates churn.

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CEO Darin Harris explained the focus is on improving the guest experience, especially by creating a frictionless digital pickup process. Key initiatives include enhancing order accuracy for both digital and drive-thru channels to reduce guest alerts. CFO Brian Scott added that these operational improvements are underpinned by foundational technology investments like the new app, loyalty program, and POS system.

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CEO Kirk Tanner attributed the success to a combination of factors working in concert: a great menu foundation, a strong collaboration partner, and effective execution across all channels. He specifically noted that their 'social game' was very impactful and that the growing digital business provided an elevated platform for the promotion.

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