Brian Mullan

Brian Mullan inquired about the potential opportunity size for Sweetgreen's new wraps platform, both qualitatively and as a customer acquisition tool, and whether it would be a digital-only offering or available across all channels. He also asked about the company's development strategy beyond 2026, focusing on balancing a current slowdown with maintaining a healthy pipeline for future acceleration.

Answer

Co-founder and CEO Jonathan Neman expressed excitement for wraps, highlighting two years of development and successful operational testing. He noted that wraps are hitting new occasions and customers, expanding the addressable market, and will be priced disruptively below $15. Wraps will be available across all channels, not just digital. He also explained the strategy of maintaining a solid pipeline for 2027 to allow for future acceleration once unit economics improve, while being disciplined with current commitments.

Brian Mullan inquired about the potential opportunity of the wraps launch, including its role in customer acquisition and channel availability, and asked about Sweetgreen's development strategy beyond 2026, balancing pipeline health with disciplined cash management.

Answer

CEO Jonathan Neman expressed strong excitement for wraps, confirming no negative impact on throughput from rapid ops testing and positive early feedback from a broader market pilot. He anticipates wraps will attract new customers and occasions, available across all channels, starting at $10.95 and priced below $15. For development, Jonathan Neman emphasized maintaining a healthy pipeline for optionality to accelerate when unit economics improve, with a solid pipeline for 2027 and selective Infinite Kitchen retrofits.

Brian Mullan of Piper Sandler Companies asked about the performance of the Monday LTOs and the potential for menu innovation in categories like beverages, desserts, or handhelds, questioning if testing could occur alongside the 'Project One Best Way' operational focus.

Answer

Co-Founder, CEO & Director Jonathan Neman described the LTOs as very successful in driving frequency through a combination of price and newness. He affirmed that menu innovation will continue under a more rigorous stage-gate process to ensure operational feasibility. He noted a house-made beverage test is already live and performing well in three markets, with plans for a broader rollout, demonstrating that disciplined innovation can proceed alongside operational improvements.

Brian Mullan from Piper Sandler asked for the key drivers behind the strong and sustained growth of the third-party marketplace sales channel, which has outpaced other channels for several quarters.

Answer

CEO Jonathan Neman attributed the strength in the marketplace channel to three factors: the product travels well, making it suitable for delivery; optimized relationships and marketing on the platforms; and the previous lack of a compelling native loyalty program, which gave customers less reason to order directly. He noted the new SG Rewards program should help shift some volume to their own digital channels over time.

Brian Mullan of Piper Sandler asked about progress in reducing the core store build-out cost for the class of '25 and '26, and whether the planned menu innovation necessitates operational simplification.

Answer

CEO Jonathan Neman confirmed a strong focus on reducing development costs, with a target of $1.4 million to $1.5 million for the core build-out and expectations for further improvements in 2026. He affirmed that menu innovation is paired with simplification efforts, stating they are constantly looking to streamline operations through upstreaming prep, implementing new tools, and optimizing recipes to manage complexity in the restaurants.

Brian Mullan asked about the manufacturing cost for Infinite Kitchen (IK) units in 2025 and the timeline for cost reductions. He also sought clarification on whether the Penn Plaza retrofit has lifted sales or if benefits have been isolated to margin.

Answer

CEO Jonathan Neman confirmed the incremental IK cost of $450k-$550k and expects savings over time with scale and manufacturing maturity, noting a focus on reducing total build-out costs. CFO Mitch Reback clarified that the Penn Plaza store has seen sales growth, which has accelerated over the months since the retrofit.

Brian Mullan inquired about the current awareness of Outback's Steak Excellence and other changes, and what the marketing message would be as spending ramps up in the latter half of the year. He also asked for the G&A dollar perspective for 2026.

Answer

CEO Mike Spanos stated that the Outback brand has incredible overall awareness. He explained that marketing will be focused on the back half of the year, after the sequential rollout of the steak lineup (launched November 2025) and the new service model. The marketing message will emphasize consistency of execution, quality, and service to drive repeat visits. CFO Eric Christel provided the G&A guidance for 2026 at $215 million, which is approximately 5.3% of sales.

Brian Mullan inquired about the current awareness of Outback's Steak Excellence and service improvements, the planned marketing message as spending ramps up, and the embedded G&A dollar perspective for 2026 guidance.

Answer

CEO Mike Spanos stated that the Outback brand has incredible overall awareness. He explained that marketing will focus on the back half of the year, after ensuring consistency in steak execution and the new service model. The message will be sequential, emphasizing quality, service, and the overall experience to drive repeat visits. CFO Eric Christel provided the G&A guidance for 2026 at $215 million, or approximately 5.3% of sales.

Brian Mullan from Piper Sandler Companies inquired about the impact of Outback's menu reduction on guest and employee experience, and also asked about the drivers of Carrabba's strong same-store sales performance.

Answer

CEO Mike Spanos stated that the Outback menu reduction simplified operations for employees and improved execution consistency for guests, with plans for further reductions. Regarding Carrabba's, he credited its success to strong daypart conversion strategies, including experiential wine dinners, catering growth driven by new products, and robust off-premise sales.

Brian Mullan asked for feedback from guests and employees on the recent 10% menu reduction at Outback and the criteria used for item removal. He also questioned when marketing might play a more significant role in the brand's turnaround strategy.

Answer

CEO Mike Spanos explained that menu items are being removed based on low satisfaction scores, high operational complexity, and inconsistent execution, with feedback gathered from both guests via Ziosk and employees. Regarding marketing, he stated that while brand positioning is a key part of the strategic plan, the primary marketing tool will be the tangible improvements in food quality, value, and the guest experience.

Brian Mullan of Piper Sandler inquired about the plan to reach the long-term G&A target of 5% of sales and asked if further dividend reductions were being considered to fund other capital priorities.

Answer

CEO Mike Spanos acknowledged that 2025 G&A would be above the 5% goal, likely in the 5.5%-5.8% range, and stated the path to the target involves both driving profitable sales and finding productivity. Regarding the dividend, he affirmed the current capital allocation priorities are reinvesting in the business, reducing debt, and then returning cash to shareholders, positioning the dividend as a reliable method for the latter.

Brian Mullan questioned the company's dividend policy, noting the high yield might suggest the market isn't giving credit for it, and asked if more strategic domestic store closures could be expected given the tough industry trends.

Answer

CEO Mike Spanos suggested the high dividend yield is a function of an undervalued stock price, which he is confident will improve over time. He confirmed the company's commitment to the dividend, which was just re-approved, but noted that detailed capital allocation plans will be shared after the strategic review. Regarding closures, Spanos stated the focus is first on improving operations within the four walls, and any decisions on remodels, relocations, or closures will be part of a disciplined process during long-range planning.

Brian Mullan asked for an update on CAVA's catering strategy, including learnings from the Houston market test, plans for a second market test, the envisioned expansion approach (region-by-region versus national), and requirements such as dedicated sales teams or other awareness-building methods.

Answer

CEO Brett Schulman expressed excitement for catering's potential, confirming a second market test later in 2026 and potential expansion to additional markets in 2027, emphasizing a methodical, non-national launch approach. He highlighted progress in packaging, self-service technology, and leveraging an existing B2B sales team, while focusing on balancing catering's high-volume production rhythm with operational success and guest experience.

Brian Mullan asked CEO Brett Schulman for an update on catering, including learnings from the Houston market test, plans for a new market test, and the future expansion strategy (region-by-region vs. national, dedicated sales, awareness growth).

Answer

CEO Brett Schulman expressed excitement for catering's potential, confirming a second market test later in the year, with potential expansion to additional markets in 2027. He envisions a phased, market-by-market expansion rather than a national launch, highlighting progress on packaging and technology, and an existing B2B sales team. He emphasized a thoughtful, methodical approach due to catering's high-volume production rhythm.

Brian Mullan inquired about the salmon test, asking for more details on its performance, any interesting insights from a daypart, guest demographic (age, gender, income) perspective, and how operations are handling it.

Answer

CEO Brett Schulman stated that the salmon test is performing well, facilitated by TurboChef ovens in every restaurant for easy cooking. He noted it's driving incremental occasions with broad-based appeal across consumer segments and dayparts. If current progress continues, CAVA plans a broader launch in late spring 2026.

Brian Mullan inquired about the salmon test, asking for more details on its performance, including any interesting trends from a daypart, guest demographic, or operational perspective.

Answer

Brett Schulman, CEO, highlighted that the TurboChef ovens in every restaurant facilitate easy cooking for salmon. He noted encouraging results, with the salmon driving incremental occasions and showing broad appeal across consumer demographics and dayparts. If current progress continues, a broader launch is expected in late spring 2026.

Brian Mullan of Piper Sandler Companies asked about CAVA's investment in Hyphen, an automated make-line company, inquiring what makes the technology attractive and what would define success for the upcoming pilot.

Answer

CEO Brett Schulman explained that the investment aims to make restaurants easier to run and improve the guest experience. The pilot will focus on the second digital make-line to enhance order accuracy, speed, and convenience, freeing up team members to focus on hospitality. Success will be measured by improved guest experience and the ability to reallocate labor.

Alison, on behalf of Brian Mullan from Piper Sandler, requested an update on the chicken shawarma test, including consumer reception, operational impact, and the potential for a wider rollout.

Answer

CEO Brett Schulman reported that the chicken shawarma test is progressing very well. He described the item as a core Mediterranean staple that offers a complementary texture to existing chicken options. Operationally, it is a 'light lift' with minimal complexity. Schulman indicated that if its current positive trajectory continues, it will be rolled out across the system in coming quarters.

Brian Mullan of Piper Sandler asked for an update on the priorities for the catering channel in 2025 and the potential timeline for a broader rollout.

Answer

CFO Tricia Tolivar explained that CAVA is taking a patient, stage-gate approach to catering. In 2025, the plan is to expand the test to an entire major metro market to refine production models, packaging, and technology. A national launch is not expected in early 2026, as the focus remains on ensuring operational success first.

Brian Mullan inquired about Portillo's consumer value proposition and value scores in Chicagoland, seeking an assessment of their historical trend and the path to recovery. He also asked for an update on the Texas market strategy, focusing on priorities, the role of marketing, and lessons learned from Arizona's expansion.

Answer

Michelle Hook, CFO, reported improved value perception scores in 2025, attributing it to the Portillo's Perks program and specific offers. Michael Miles, Chairman of the Board and Interim CEO, provided historical context, highlighting significant growth in Chicago's restaurants, revenue, and margins since 2014. For Texas, Michael Miles emphasized building sales as the top priority, with labor adjustments already implemented. He discussed short-term levers like Perks and bundled meals, and the ongoing challenge of marketing to unfamiliar consumers, which is a key focus for the new CMO, Denise Lauer.

Brian Mullan asked for an assessment of Portillo's consumer value proposition and value scores in Chicagoland, outlining a path to recovery, and followed up on the Texas strategy, focusing on priorities, marketing's role, and lessons from Arizona.

Answer

Michelle Hook, CFO, reported improved value perception scores in 2025, attributing it to the Portillo's Perks program and specific offers, alongside operational focus on hospitality and speed. Michael Miles, Chairman of the Board and Interim CEO, added that Chicago's business remains very healthy, with significant growth since 2014. For Texas, Miles emphasized building sales as the top priority, leveraging short-term offers, and tasking new CMO Denise Lauer with finding ways to market to consumers unfamiliar with the brand.

Brian Mullan of Piper Sandler Companies asked for an update on the Chicago breakfast test's incrementality and inquired about the learnings from the limited menu strategy used in Houston.

Answer

CEO Michael Osanloo reported that the breakfast test is performing well, appearing to be incremental without cannibalizing core business, with a decision on its future to be made by year-end. Regarding the Houston menu, he noted that while some simplifications were successful, removing items like beer was a mistake as it eliminated a key guest occasion, and it has since been reinstated.

Brian Mullan inquired about how breakfast awareness is being communicated during the current test and whether the limited menu used in Houston might be adopted for future openings.

Answer

CEO Michael Osanloo explained that the breakfast test is in 'stealth mode,' with marketing limited to in-store materials to prioritize the operational test. He confirmed a wider rollout would require a dedicated marketing push. Regarding the limited menu, he noted positive impacts on the P&L and operations and stated the company is seriously considering using a similar leaner menu for future new restaurants.

Brian Mullan requested an update on the development of drive-thru-only formats and asked about the strategic rationale for choosing an 'app-less' loyalty program.

Answer

CEO Michael Osanloo stated that the drive-thru-only concept is being fine-tuned for thoughtful growth in dense markets and that the company is also exploring in-line and airport locations. Regarding loyalty, he explained the app-less approach, which integrates with a user's digital wallet, is designed to avoid 'app fatigue' and enable more convenient, one-to-one marketing and customer relationship management.

Brian Mullan of Piper Sandler inquired about the performance of the initial Houston restaurant and what learnings from the Dallas expansion are being applied to the new market.

Answer

CEO Michael Osanloo reported that the first Houston location is performing 'exceptionally well.' A key learning from Dallas is to open subsequent locations in closer succession to better manage initial volume spikes and build market momentum. He also noted that Houston is serving as a test market for a slightly rationalized menu to reduce kitchen complexity.

Brian Mullan inquired about recent performance trends across First Watch's dayparts (weekday breakfast, weekday lunch, weekend) and the biggest opportunities within beverage offerings over the next few years.

Answer

Chris Tomasso, CEO and President, reported strength in the weekday breakfast segment in Q4 and all of 2025, recovering from weakness in 2024, with weekends also slightly outperforming in Q4 and 2025. He highlighted the beverage category, including the fresh juice program and cold caffeinated beverages, as a significant driver and an area of continued innovation, in addition to the alcohol platform.

Brian Mullan with Piper Sandler asked for insights into the recent performance across different dayparts, specifically weekday breakfast, weekday lunch, and weekend business, and how these are expected to behave in 2026. He also inquired about current beverage innovation and the biggest opportunities in this category over the next few years.

Answer

CEO Chris Tomasso noted strength in the weekday breakfast segment and slight outperformance from weekends in Q4 and all of 2025, recovering from previous weakness in weekday breakfast. He highlighted the continued success of the fresh juice program and cold caffeinated beverages, with new juices on seasonal menus and some added to the core. He confirmed that the beverage category, including the alcohol platform, remains a significant innovation opportunity.

Brian Mullan of Piper Sandler Companies asked if consumers are noticing and appreciating in-restaurant value enhancements like the improved Trifecta and 'surprise and delight' initiatives. He also inquired about the drivers of sales mix during the quarter.

Answer

President & CEO Chris Tomasso stated that he believes consumers are absolutely noticing these efforts, especially as they seek hospitality, quality, and value. He emphasized that these actions, combined with conservative pricing and increased portion sizes, are an opportunity for First Watch to stand out. He also clarified that sales mix was slightly positive for the quarter, with any PPA impact coming from the reduction of the third-party surcharge.

Brian Mullan of Piper Sandler asked for an update on the testing of an expanded beverage line and inquired about the number of franchise stores remaining that are subject to purchase rights.

Answer

Chief Brand Officer Matt Eisenacher reported that the company is in the final stages of moving the expanded beverage test into the market, with the goal of driving incremental beverage attachment. CFO Mel Hope stated that after the current acquisitions, 67 franchise locations will remain, with 8 of them being subject to purchase rights.

Brian Mullan asked about the long-term vision for Flower Child, including optimal formats and locations, the balance between standardization and customization, and what would be needed to accelerate its development pace beyond the current 6-7 units per year.

Answer

President David Gordon expressed enthusiasm for Flower Child's performance, noting its success in new and existing markets due to healthy, on-trend food and an experiential dining atmosphere. He highlighted consistent execution enabled by operational systems. While the concept can accelerate, the primary constraint is ensuring sufficient 'people power' (GM and executive chef leadership) to maintain consistent brand execution, thus maintaining the current 20% growth rate for the near term.

Brian Mullan asked about the long-term vision for Flower Child, including insights into optimal formats and locations, the degree of standardization versus customization, and what would be needed to accelerate its development pace beyond the current six or seven units per year.

Answer

President David Gordon expressed enthusiasm for Flower Child's performance, noting its success in new and existing markets due to its healthy, on-trend, and experiential fast-casual dining. He explained that the primary constraint to accelerating development beyond a 20% growth rate is ensuring sufficient 'people power' and strong leadership at the GM and executive chef levels to maintain consistent brand execution.

Brian Mullan inquired about the exhaustiveness and flexibility of Wendy's system optimization efforts, specifically the planned closure of 5-6% of U.S. restaurants, and whether this represents the final wave of closures. He also asked about the impact on rental income in 2026.

Answer

Ken Cook, Interim CEO and CFO, explained that system optimization is a disciplined, restaurant-by-restaurant process with franchisees to improve economics and customer experience. He confirmed 28 closures in Q4 2025, with the majority of the 5-6% U.S. system closures expected in H1 2026. Cook stated that system optimization is projected to have a 4% impact on global system-wide sales and a $15M-$20M drag on Adjusted EBITDA for the full year. Suzie Thuerk, Chief Accounting Officer and Global Head of FP&A, clarified that rental income for 2026 is expected to be relatively flat due to the time required to work with landlords.

Brian Mullan asked about the thoroughness and flexibility of the system optimization efforts, specifically the planned 5-6% U.S. restaurant closures, and whether this addresses all desired closures. He also inquired about the impact on the rental income line in 2026.

Answer

Interim CEO and CFO Ken Cook explained the disciplined, restaurant-by-restaurant process with franchisees to improve economics and customer experience. He confirmed 28 stores closed in Q4 2025, with 5-6% of U.S. restaurants expected to close, primarily in H1 2026, after evaluating trade areas, operational metrics, and profitability. Cook stated system optimization is expected to have a 4% impact on global system-wide sales and a $15M-$20M drag on adjusted EBITDA for the full year. Chief Accounting Officer and Global Head of FP&A Suzie Thuerk added that rental income for 2026 will be relatively flat, as landlord negotiations take time.

Brian Mullan of Piper Sandler Companies asked if, separate from promotions, anything needs to be done to address the pricing of Wendy's everyday core menu, referencing a competitor's view that value perception comes from the menu board.

Answer

Interim CEO & CFO Ken Cook responded that core menu pricing is something the company will evaluate more precisely with its new data analytics capabilities. He emphasized that value is a combination of price, food quality, and customer experience, and reiterated the plan to re-emphasize Wendy's superior quality story as a key part of its value proposition.

Brian Mullan asked about the breakfast daypart, inquiring where the next phase of growth will come from, particularly regarding innovation and the role of the beverage offering.

Answer

Kirk Tanner, President and CEO, affirmed that breakfast remains a top priority with significant upside potential. He announced that a key innovation is coming to the beverage platform this summer with a new lineup of 'exceptional' cold brew coffees. Additionally, he noted that the '100 days of summer' program will feature value offerings on morning beverages to help drive traffic to the daypart, with a longer-term innovation pipeline also in place.

Brian Mullan of Piper Sandler asked for an assessment of the breakfast daypart, including key learnings, the long-term strategy, and whether it will require sustained corporate investment.

Answer

CEO Kirk Tanner confirmed that breakfast remains a high priority due to its significant growth potential. He reported that breakfast sales grew 6% in 2024, outpacing the category. The strategy moving forward involves continued investment in awareness with an outsized advertising share, product innovation planned for later in the year, and a focus on executional excellence. Tanner stated that breakfast will continue to be a tailwind for top-line growth.

Brian Mullan of Piper Sandler Companies inquired about the beverage component of the breakfast offering, asking if management is satisfied with the current platform and if it represents an area for future innovation.

Answer

CEO Kirk Tanner confirmed that beverages are a significant opportunity for Wendy's, both at breakfast and throughout the day. He emphasized that it is a profit-driving category and that the company intends to innovate across its entire beverage portfolio.

Brian Mullan from Piper Sandler inquired about Tim Hortons Canada's speed of service, asking if there's still room for improvement despite being a long-standing tailwind. He also sought an update on the loyalty program, specifically efforts to grow membership, recognizing its correlation with higher visitation and spend.

Answer

CEO Josh Kobza confirmed continued opportunities for speed of service improvement, particularly in the PM day part, and highlighted remodels as a key driver for enhancing back-of-house efficiency. CFO Sami Siddiqui added that Tim Hortons' loyalty program achieved 33% of sales from 7 million active members in 2025, with members spending over 50% more post-joining. He emphasized the new partnership with Canadian Tire and member-only offers as strategies to further drive penetration.

Brian Mullan asked about further opportunities to enhance Tim Hortons Canada's speed of service and the strategies for expanding membership and engagement within its loyalty program.

Answer

CEO Josh Kobza confirmed continued efforts to improve speed of service, particularly in the PM day part where there's more room for progress than in the already fast AM. He noted remodels help by reconfiguring back-of-house for efficiency. For the loyalty program, he highlighted pushing adoption through events like Roll Up the Rim and new partnerships, such as with Canadian Tire, to offer compelling reasons for engagement. CFO Sami Siddiqui added that 33% of 2025 sales came from 7 million active loyalty members, who spend over 50% more and visit more often post-joining, with member-only offers planned.

Brian Mullan of Piper Sandler asked for an update on speed of service at Tim Hortons Canada, questioning if it was a positive contributor in Q1, how current times compare to historical bests, and its potential as a future traffic driver.

Answer

CEO Josh Kobza confirmed continued progress, citing an 8% year-over-year improvement in drive-thru speed. He noted that the new Flatbread Pizza launch might create a temporary slowdown, as seen in market tests, but expects the teams to adapt quickly and resume the positive trend.

Brian Mullan asked about the components (transactions, menu price, mix) and expected cadence for the flat comparable sales guidance, especially given encouraging January trends. He also inquired about quantifying the throughput and comp sales lift from the High-Efficiency Equipment Package (HEEP) in the 350 restaurants and the potential to accelerate its rollout.

Answer

Adam Rymer, Chief Financial Officer, stated that the full-year guidance is conservative due to early year and unpredictable consumer trends, with only a modest impact from initiatives, but expects comps to improve throughout the year. Scott Boatwright, Chief Executive Officer, highlighted compelling results from HEEP, including hundreds of basis points improvement in comp sales, and confirmed acceleration to 2,000 restaurants by year-end with a path to finish rollout in 2027.

Brian Mullan asked about the components of Chipotle's flat comparable sales guidance for the full year, including transactions, menu price, and mix, and the expected cadence given encouraging January trends. He also inquired about the quantified comp sales lift from the high-efficiency equipment package in the 350 restaurants where it's deployed and the potential to accelerate its rollout.

Answer

Cindy Olsen, Head of Investor Relations, explained that the full-year guidance is conservative despite positive January momentum, with comps expected to improve throughout the year as initiatives drive transactions and comparisons ease. Scott Boatwright, CEO, added that the high-efficiency package is showing hundreds of basis points of improvement in comp sales, better engagement, and food quality scores, with an accelerated rollout targeting 2,000 restaurants by year-end and completion by 2027.

Brian Mullan asked for insights into the retail business for the upcoming holiday season, specifically regarding assortment, team execution, and expected retail gross margins in fiscal Q2, including any contributing factors.

Answer

President and CEO Julie Masino stated that the retail team continues to transform the business, focusing on assortment and shopping experience. She expressed satisfaction with holiday execution despite a tumultuous year with tariffs, noting that holding Christmas floor setup later resulted in a fresher assortment. She mentioned that the ornament business is currently on markdown due to being heavy on inventory and guest price point requirements. Senior Vice President and CFO Craig Pommells explained that retail margins are impacted by tariffs, with the plan to mitigate the dollar impact while expecting margin rates to decrease. He also cited a mix shift where guests are trading down and lower attach rates leading to more markdowns.

Brian Mullan asked for insights into the retail business for the upcoming holiday season, including assortment and execution, and expectations for retail gross margins in fiscal Q2, followed by a clarification on adjusted G&A dollars or a quarterly run rate post-restructuring.

Answer

President and CEO Julie Masino expressed satisfaction with the retail team's execution, assortment strength despite tariff impacts, and inventory management for the holiday season. Senior Vice President and CFO Craig Pommells explained that retail margins are impacted by tariffs, a mix shift towards lower-priced items, and increased markdowns, expecting lower margin rates but neutral margin dollars. Regarding G&A, Craig Pommells stated that the $20 million-$25 million annualized savings from restructuring would be largely executed by the end of Q2, impacting Q3 and Q4, accelerating prior commitments to historical G&A rates.

Brian Mullan inquired about Cracker Barrel's marketing plan and spending strategy for the upcoming year, particularly how it might adapt to recent traffic performance following the logo change. He also asked if the focus on improving food quality and back-of-house processes was a pre-existing plan or a reaction to recent feedback.

Answer

Julie Felss Masino (President & CEO) stated that marketing as a percentage of sales is expected to be higher in fiscal 2026, especially in Q1, to drive traffic. She clarified that food quality has always been a core focus of the multi-year plan, alongside process simplification, with Phase 1 rolled out in Q3 and Phase 2 testing in Q4, continuously evaluating processes and guest feedback.

Brian Mullan asked about Cracker Barrel's marketing plan and spending strategy for the upcoming year, especially in light of recent traffic performance following the logo change, and whether the company plans to leverage the recent attention. He also inquired about the timeline and drivers for food quality improvements and back-of-house process changes, specifically if these were pre-planned or a reaction to recent feedback.

Answer

Julie Masino, President and CEO, stated that marketing as a percentage of sales is expected to be slightly higher in fiscal 2026, particularly in Q1, to drive traffic. She clarified that food quality has always been a 'North Star' in their multi-year plan, alongside process simplification, and that back-of-house initiatives are complex, multi-phase, and continuously evaluated based on learnings and feedback. Craig Pommells, SVP and CFO, did not directly address this question.

Brian Mullan asked about Cracker Barrel's marketing plan for the year, specifically if spending levels would change given recent traffic performance, and sought clarification on the back-of-house initiatives, inquiring if food quality improvements were always planned or a reaction to recent feedback.

Answer

President and CEO Julie Felss Masino stated that marketing as a percentage of sales would be slightly higher in fiscal 2026, particularly in Q1, to drive traffic. She confirmed that food quality has always been a core focus of the plan, alongside process simplification, with Phase One rolled out in Q3 and Phase Two testing in Q4, continuously evaluating processes and guest feedback.

Brian Mullan from Piper Sandler Companies asked about the back-of-house optimization initiative, specifically regarding permanent labor reductions and the flow-through of savings. He also requested an update on learnings from the store remodel program.

Answer

President & CEO Julie Felss Masino outlined the three phases of the back-of-house initiative, focusing on process, ingredients, and equipment. SVP and CFO Craig Pommels confirmed that savings are expected to flow to the bottom line, contributing to the company's overall cost-saving targets. Regarding remodels, Masino stated it is still a 'test and learn' year and a comprehensive update on learnings and future plans will be provided in September.

Brian Mullan asked for specifics on the P&L impact from back-of-house efficiency initiatives and questioned the outlook for the retail business during the holiday season, including full-year gross margin expectations.

Answer

CFO Craig Pommells explained that the initial benefits from back-of-house work will primarily impact labor productivity and improve employee job satisfaction, representing the early stages of a multiyear cost-saving plan. CEO Julie Masino addressed retail, noting the team is managing well despite industry headwinds, with lower inventory and higher margins in Q1. She highlighted a new 'Seasons of Savings' promotion for the holidays. However, Mr. Pommells cautioned that full-year retail margins are expected to be slightly unfavorable.

Brian Mullan inquired about Cracker Barrel's fiscal 2025 remodel plans, asking for details on the differences between the high, medium, and low-cost options. He also sought information on the new, lower-cost 'refresh' option and followed up on the drivers behind the fiscal 2025 menu pricing guidance.

Answer

CFO Craig Pommells explained the remodel tiers, noting the 'refresh' involves paint and decor, while the 'low' adds furniture and lighting, and 'medium' and 'high' options include progressively more extensive flooring and other work. He emphasized that fiscal 2025 is a testing year to determine the best ROI. Pommells also confirmed the 5% pricing guidance for the year is a blend of all pricing actions, including stores moving to higher and lower tiers.

Brian Mullan asked if Dave & Buster's needs to significantly increase the dollar amount of marketing investments to drive traffic, beyond just refining the media mix and messaging.

Answer

Tarun Lal, CEO & Board Director, stated that he does not believe the company needs to change the current run rate of marketing investments at this time. He emphasized that the focus is on further refining the media mix to make the existing spend more effective.

Brian Mullan asked CEO Tarun Lal for his assessment on whether Dave & Buster's needs to significantly increase its dollar amount of marketing investments to effectively drive traffic back to stores, beyond just changing the media mix and messaging.

Answer

CEO Tarun Lal stated that he does not believe the company needs to change the run rate of marketing investments at this time. The focus is on refining the existing media mix to make the spend more effective.

Brian Mullan asked if the business needs to significantly increase the dollar amount of marketing investments to drive traffic, beyond just changing the media mix and messaging.

Answer

Tarun Lal (CEO) stated he does not believe they need to change the run rate of marketing investments at this time, focusing instead on refining the media mix for effectiveness.

Brian Mullan of Piper Sandler Companies inquired about tests to extend game play time for consumers and asked about recent changes to the menu design and the response.

Answer

CFO Darin Harper highlighted the 'all you can play' option and tests of a simplified kiosk rate card to extend play time. Interim CEO Kevin Sheehan explained a two-phase menu strategy: first, a successful 'reskin' of the current menu, and second, a new menu featuring historical best-sellers, which is currently in testing for a fall rollout.

Brian Mullan asked for an assessment of the current competitive environment and whether the growth of competitors has been a significant factor in recent top-line struggles, or if the issues are primarily related to internal execution.

Answer

Interim CEO Kevin Sheehan asserted that the recent struggles were "mostly our own execution" rather than a result of competitive pressures. He expressed confidence that if the company executes its strategy correctly, it will not need to be overly concerned about competition. He then highlighted internal opportunities to drive revenue, such as focusing on underutilized dayparts like lunch and late-night happy hour.

Brian Mullan of Piper Sandler asked about the sales mix evolution of the core menu items (now 'Five to Try') and whether other platforms like steaks and salads would be addressed in fiscal 2026.

Answer

CEO Kevin Hochman confirmed the 'Five to Try' platform, which includes the Triple Dipper, continues to grow its sales mix. He outlined the fiscal 2026 food innovation plan, which focuses on a full year of upgraded Ribs, a new Queso platform, a major chicken sandwich relaunch, and base ingredient upgrades. Major steak and salad platform upgrades are planned for fiscal 2027.

Brian Mullan from Piper Sandler Companies requested background on the 85-unit refranchising deal and asked about the broader strategy for future transactions, particularly regarding development agreements.

Answer

President & CEO Todd Penegor confirmed that refranchising is a core strategy and future deals will include development and reimaging commitments. EVP & CFO Ravi Thanawala specified the transaction is in the Mid-Atlantic with a well-capitalized existing franchisee (not the current JV partner) who has a strong transaction-driving mindset, aiming to accelerate market share gains.

Brian Mullan of Piper Sandler inquired about the company's plans for remodeling stores, particularly for the company-owned asset base, and efforts to encourage franchisees to pursue remodels to boost the carryout business.

Answer

President and CEO Todd Penegor stated that the company is in the 'early innings' of developing the business case for store 'reimaging,' with tests underway in the Orlando market. He noted that a significant rollout is not expected until 2026-2027 as they refine the economics for franchisees. An executive, likely CFO Ravi Thanawala, added that conviction around the carryout opportunity is growing, with order growth seen in Q1 and quarter-to-date in Q2, viewing it as an incremental sales layer.

Brian Mullan from Piper Sandler asked for an update on operational simplification efforts, specifically regarding the removal of 'rhythm breakers' from the menu and the timeline for addressing oven-related issues.

Answer

President and CEO Todd Penegor confirmed the company is moving with speed, having already removed several low-volume SKUs and tested removing items like Papadias during peak periods like Valentine's Day. He stated the company is running hard to address oven temperature and gas pressure issues this year to improve pizza quality and enable future innovation, setting up for success into next year.

Brian Mullan asked whether the current 15% company-owned store mix is optimal long-term and if refranchising with development agreements could be a future strategy.

Answer

President and CEO Todd Penegor confirmed they are actively evaluating the optimal ownership mix, stating the goal is to partner with growth-minded operators. He noted that while owning some stores is crucial for being a brand steward, the right level is likely 'something less than we have today.' He indicated that refranchising is a tool to stimulate system growth.

Brian Mullan of Piper Sandler Companies asked for an evaluation of the food test against its key goals, inquiring which aspects (e.g., broista satisfaction, throughput) have been seamless and which, if any, have been more challenging.

Answer

CEO Christine Barone reported that they are pleased with performance across all metrics. She noted that throughput is strong, with food execution fitting within the beverage service time. Broista satisfaction is high and has grown with systemized training, and customer satisfaction with the simple, eight-item assortment is also high. Crucially, she highlighted that they are seeing both a ticket and a transaction lift, validating the strategy to capture customers who previously went elsewhere for food.

Brian Mullan from Piper Sandler asked about the IHOP 'House Faves' value platform, questioning its impact on franchisee profitability and the rationale for expanding it from five to seven days a week. He also followed up on progress made in reducing operational complexity at IHOP.

Answer

Lawrence Kim, President of IHOP, explained that the decision to expand 'House Faves' to seven days was driven by successful in-market tests that produced positive traffic and sales, earning franchisee support. Regarding operational complexity, Kim highlighted key wins, including leveraging server tablets (now in over 96% of restaurants) and reducing the number of LTOs by more than half. These changes have improved order accuracy and sped up table turns by over four minutes year-to-date.

Brian Mullan asked for impactful examples of IHOP's operational simplification initiatives and inquired about franchisee receptivity to these changes under new leadership.

Answer

IHOP President Lawrence Kim provided examples such as optimizing server tablets to improve table turns by two minutes and simplifying food prep procedures. He also mentioned using short-form videos for more effective training. Kim described franchisee receptivity as 'fantastic,' emphasizing that a franchisee task force was engaged early in the process to ensure the initiatives were practical and well-received.

Brian Mullan from Piper Sandler asked new IHOP President Lawrence Kim what attracted him to the role, especially considering the challenging traffic trends within the family dining segment.

Answer

IHOP President Lawrence Kim stated he saw 'amazing potential' in the iconic brand, citing the passion in food preparation and deep consumer love for IHOP. He shared an anecdote of a highly loyal guest as an example of the brand's strength, expressing confidence that the negative transaction trends are reversible and that significant growth opportunities exist.

Brian Mullan of Piper Sandler Companies inquired about the drivers behind Benihana's positive same-store sales, the key learnings from the successful San Mateo restaurant opening, and the strategy for managing the STK brand's traffic versus average check in the current consumer environment.

Answer

President & CEO Emanuel Hilario explained that Benihana's Q3 outlook is strong due to proactive HVAC improvements, avoiding last year's post-acquisition issues. He detailed that the new San Mateo prototype's success stems from design changes like removing the sushi bar for more tables, a brighter aesthetic, and a dedicated takeout station. For STK, Hilario confirmed the focus remains on driving traffic through value offerings like happy hour, while using a barbell menu strategy to also promote premium items.

Brian Mullan of Piper Sandler Companies inquired about the company's strategy for its off-premise business and whether there was any consideration of offering the Pizookie Meal Deal on weekends.

Answer

CEO & President Lyle Tick outlined three key opportunities for off-premise: reducing friction in the ordering process, improving order accuracy, and optimizing the online menu for the off-premise occasion. Regarding the Pizookie Meal Deal, Tick explained that it is strategically used to drive traffic during weekdays when there is more capacity and is not needed on weekends when demand is already high. SVP Daniel Duran added that the deal has a halo effect, driving repeat visits on weekends.

Brian Mullan of Piper Sandler requested a history of the pizza platform's importance to the brand, its potential impact upon renovation, and the planned communication strategy for its relaunch.

Answer

President Lyle Tick described pizza as a core brand association and a top traffic driver, especially in California, that serves a complementary group occasion. CFO Tom Houdek noted that pizza mix is currently in the mid-to-high single digits but is nearly double that in Southern California, indicating a significant opportunity. Tick confirmed that the relaunch will be supported by external marketing to tell a reenergizing story, while Interim CEO Brad Richmond highlighted its potential to expand the occasions for which the brand is relevant.

Brian Mullan of Piper Sandler asked about the scope and timing of menu simplification and sought an assessment of current service levels, including whether labor hours might be reallocated.

Answer

President Lyle Tick confirmed plans to streamline the menu by removing underperforming items, likely starting in H2 2025, to make room for innovation. He noted that while service can be a differentiator, consistency is an issue. The focus is on simplification and training rather than a net increase in labor, with data suggesting opportunities to reallocate hours from shoulder periods to peak times. Interim CEO Carl Richmond emphasized this is about optimizing, not cutting, labor.

Brian Mullan asked about the renewed focus on menu simplification, questioning if prior efforts were insufficient. He also inquired about the company's current brand awareness levels and the strategy to improve them.

Answer

President Lyle Tick explained that menu simplification involves both short-term operational tweaks and a longer-term, data-driven menu architecture review. On brand awareness, Tick acknowledged that BJ's trails competitors, especially outside California, but sees significant opportunity. He cited the success of the Pizookie Meal Deal with limited media spend as evidence of strong brand affinity and headroom for growth, noting that media markets significantly outperformed non-media markets.

Brian Mullan of Piper Sandler inquired about the key priorities for the Del Taco brand while it undergoes a review of strategic alternatives and asked for CEO Lance Tucker's fresh perspective on opportunities for the brand.

Answer

CEO Lance Tucker outlined three key priorities for Del Taco: maintaining strong operational execution, revamping the marketing strategy for a new tone, and introducing exciting menu innovations that may draw from the brand's successful past. He emphasized the focus on driving marketing, innovation, and operations.

Brian Mullan asked about the Del Taco restaurant-level margin guidance for the year, the path to normalized margins, and management's confidence in improvement strategies amid headwinds like AB1228.

Answer

CEO Darin Harris acknowledged that while operational fundamentals like inventory management have improved food costs, significant labor inflation from AB1228 and rising utility costs are pressuring margins. He emphasized that driving top-line sales is the key to margin improvement and noted that a new menu rollout, which performed well in tests, is expected to boost both top and bottom-line performance.

Brian Mullan from Piper Sandler inquired about the menu pricing assumptions embedded in the long-term margin expansion target and whether there is flexibility to take less pricing if traffic remains weak.

Answer

CFO Katherine Fogertey responded that the confidence in margin expansion is primarily driven by operational improvements and supply chain opportunities, not pricing assumptions. She noted that Q1 results demonstrated their ability to expand margins even with pressured traffic, and this focus on controllables is expected to create significant leverage when macro conditions improve.

Brian Mullan of Piper Sandler asked about the roadmap for a loyalty program and how the company plans to balance standard loyalty features with its unique 'enlightened hospitality' brand ethos.

Answer

CEO Rob Lynch explained that the focus is on moving beyond simple points-based discounting. The strategy is to use guest data for 'surgical incentives' and to enhance the in-Shack experience, such as prompting a guest at a kiosk about a new LTO they might enjoy based on past purchases. Lynch stated the goal is to drive self-selection trade-up and improve the guest experience, avoiding a pure discounting program which they feel is unnecessary for the brand.

Brian Mullan of Piper Sandler asked for details on the 2025 development pipeline, specifically the number of planned drive-thru units and how new learnings are being incorporated.

Answer

CEO Rob Lynch confirmed that drive-thrus are a significant part of the future strategy but did not disclose a specific mix for 2025. He stated the top operational priority is improving process flows and speed of service, which is critical for drive-thru success. Future formats will incorporate optimized kitchen flows and equipment to enhance productivity across different real estate types.

Brian Mullan asked about the P&L impact of outsourcing U.S. logistics and the scope of the international refranchising strategy, including which markets are being considered.

Answer

CFO Jeremiah Ashukian stated that while there will be transition costs, the goal for logistics outsourcing is to be EBIT-neutral for the year, with costs contemplated in the guide. CEO Josh Charlesworth explained that the company is evaluating refranchising all of its company-owned international markets (U.K./Ireland, Australia/New Zealand, Japan, Mexico, Canada) to find strong local partners and focus corporate resources on U.S. expansion.

Brian Mullan asked about the targeted store volumes in smaller DMAs and requested a clarification of the traffic and price/mix components of the quarter's comparable sales.

Answer

Hajime Uba, speaking through interpreter Benjamin Porten, explained that the company's primary focus for site selection, including in smaller DMAs, is on achieving target cash-on-cash returns rather than a specific average unit volume (AUV). Benjamin Porten then provided the Q1 comparable sales breakdown as -2.3% traffic and +4.1% price and mix.

Brian Mullan from Piper Sandler inquired about the potential for Domino's to launch a stuffed-crust pizza in the U.S. market. He asked about the operational factors that would need to be considered and whether management believes the product would be well-received by consumers.

Answer

CEO Russell Weiner acknowledged that stuffed crust is a large pizza sub-category where Domino's U.S. does not compete, despite offering it in many international markets. He explained that the decision not to launch it domestically has been based on maintaining operational excellence and quality given the significant store volumes. However, he stated that it is 'not off the table' but would require the right circumstances in the store to execute properly.

On behalf of Brian Mullan, Ally Arfstrom asked for an update on the potential remodels for the Keke's fleet in Florida, specifically regarding the timeline and cost per unit.

Answer

CEO Kelli Valade explained that it is too early to provide a definitive timeline or cost for the Keke's remodel program, as the first test location is only six weeks into its post-remodel period. She stated they need to test more units to optimize costs and scale the program effectively. CFO Robert Verostek added that since the brand has never had a remodel program, the potential for a significant sales lift is high.

Brian Mullan of Piper Sandler asked for an update on speed of service at Tim Hortons Canada, questioning if it was a benefit in Q1, where the brand is in its improvement journey, and its potential as a future traffic driver.

Answer

CEO Josh Kobza confirmed that speed of service at Tim Hortons Canada continued to improve, with drive-thru times down 8% year-over-year. He noted the new Flatbread Pizza launch might create a temporary headwind as teams adjust, but they expect to learn the process quickly and get back on track with improvements.

Brian Mullan of Piper Sandler asked for an update on Tim Hortons Canada's speed of service, its improvement in Q1, its historical context, and its potential as a future traffic driver.

Answer

CEO Josh Kobza confirmed that speed of service at Tim Hortons Canada continued to improve, with drive-thru times down 8% year-over-year. He noted a potential short-term slowdown due to the new Flatbread Pizza launch but expects a quick recovery, as seen in market tests, allowing the positive trend to continue.