Danilo Gargiulo

Danilo Gargiulo from Bernstein inquired about the confidence in second-half guidance after lapping the steak launch and asked about potential long-term benefits from tax law changes on depreciation and unit growth.

Answer

CFO Tricia Tolivar expressed confidence in the second-half outlook, citing the upcoming chicken shawarma launch and loyalty program enhancements. Regarding tax law, she noted the primary benefit would be pushing out the utilization of Net Operating Losses (NOLs), which is positive for cash flow, and that tariff impacts are already factored into guidance.

Sagar, on behalf of Danilo Gargiulo from Bernstein, asked about the impact of the Kitchen Display System (KDS) on throughput and the factors driving performance differences between top and bottom-tier stores.

Answer

CEO Brett Schulman stated that KDS improves order management, accuracy, and guest satisfaction, with a rollout to 250 restaurants planned by year-end. CFO Tricia Tolivar added that store performance variation is not tied to a single factor, but top-decile stores often have more consistent demand throughout the day. She noted bottom-quartile stores are typically younger and still maturing, while top-quartile stores achieve AUVs over $4 million with 30%+ margins.

Danilo Gargiulo of Bernstein asked for a breakdown of the 2025 same-store sales guidance drivers and which areas of the business require the most investment to support future growth.

Answer

CFO Tricia Tolivar explained the guidance is based on a high-30s three-year stack, with 1.7% from price and the remainder from robust traffic. CEO Brett Schulman added that the company is well-positioned for growth, having invested ahead of the curve in people, technology, and infrastructure, and no single area requires disproportionate investment now.

Danilo Gargiulo inquired about the incrementality of the Smart Kitchen, specifically how long it might take for franchise stores to fully realize benefits and any challenges delaying implementation. He also asked about the amount of cannibalization seen with the strong net unit growth and its potential impact on Wingstop's future performance.

Answer

President and CEO Michael Skipworth emphasized the transformational nature of the Smart Kitchen and the new operating standard, noting brand partner buy-in and improved guest satisfaction. He cited the Southwest region's mid-single-digit comp spread as evidence of consistent 10-minute speed of service. SVP and CFO Alex Kaleida stated that cannibalization typically impacts comps by about one point, concentrated in high-volume restaurants, and mentioned a recent dynamic of lapping strong initial sales from new market openings.

Danilo Gargiulo asked about the incrementality of the Wingstop Smart Kitchen, specifically the mid-single-digit outperformance in high-concentration areas. He inquired about the estimated timeline for franchisees to fully adopt the new operating standards and any challenges they might face. Additionally, he questioned the amount of cannibalization from new unit growth and its impact on Wingstop's 'honeymoon' period for new stores.

Answer

President and CEO Michael Skipworth highlighted the transformational change of the Wingstop Smart Kitchen and new operating standard, noting that the Southwest region's consistent 10-minute speed of service led to a mid-single-digit comp spread. SVP and CFO Alex Kaleida explained that cannibalization typically remains around one point in comps, but recent dynamics included lapping strong 'honeymoon' openings in new markets from the prior year, which is a near-term effect.

Danilo Gargiulo asked for details on Wingstop's international expansion, including the five new markets planned for 2025 and the status of the China opportunity. He also questioned the strategy behind the relaunched chicken tenders, including early learnings and differentiation from competitors.

Answer

CEO Michael Skipworth highlighted strong international momentum, with a record opening in Kuwait and Australia launching in Q2. He noted China remains a long-term opportunity but is not a near-term priority due to the geopolitical climate, with India being another key focus. Regarding tenders, he explained they are driving record new guest acquisition, with these customers behaving like individual-occasion chicken sandwich buyers. Differentiation comes from offering 12 sauce-and-toss flavors, unlike competitors' simpler offerings.

Asked for details on international expansion, including the five new markets and the status of China, and also inquired about the early learnings from the relaunched chicken tenders and their strategic positioning.

Answer

Internationally, momentum is strong with record openings and new markets like Australia coming online. China remains a long-term opportunity but is not a near-term priority due to the geopolitical climate; India is another key focus. The relaunched tenders are driving record new guest acquisition, with these customers behaving similarly to chicken sandwich buyers. Differentiation comes from the ability to have tenders sauced and tossed in 12 flavors.

Danilo Gargiulo inquired about Wingstop's international expansion, including details on the five new markets, progress in China, and China's role in the 10,000-unit global target. He also asked about the relaunched tenders, including early learnings and competitive differentiation.

Answer

CEO Michael Skipworth described international momentum as 'supercharged,' with record Q1 unit openings and strong sales. He noted that while China is a significant long-term opportunity, it is not currently being prioritized due to the geopolitical climate, with markets like India also presenting meaningful potential. Regarding tenders, he said the relaunch drove record new guest acquisition in March, with these customers behaving similarly to initial chicken sandwich adopters. He highlighted flavor variety as a key differentiator.

Asked to weigh the sales upside from brand awareness vs. frequency, and for details on the kitchen technology test, including the number of stores, observed results, and the plan to market the improved speed.

Answer

Both brand awareness and frequency are key drivers that work together to reach the $3M AUV target. The new kitchen technology was tested in about 30 stores and showed significant improvements in speed and consistency, outperforming control groups. A marketing message will be developed to communicate this benefit to consumers after the system is rolled out over the next year.

Danilo Gargiulo asked for details on the development pipeline for both domestic and international stores and for an updated view on the company's infill strategy. He also inquired about which growth lever management is most excited about for 2025.

Answer

CEO Michael Skipworth stated the development pipeline is the strongest on record, with 95% of growth from existing partners. He explained that the 6,000+ domestic unit target was developed using trade-area-specific playbooks that account for infill while supporting the $3M AUV target. For 2025, he reiterated excitement for how all current strategies work in concert to drive growth.

Danilo Gargiulo from Bernstein inquired about Yum! Brands' strategic priority to strengthen franchisee store-level economics, asking about specific goals for EBITDA growth, the timeline for achieving these, how teams will be incentivized, and the key levers available to improve franchisee P&L.

Answer

CEO Chris Turner emphasized that strong unit economics are the lifeblood of the system, with many markets seeing 2-3 year paybacks. He outlined levers such as leveraging Yum's global supply chain scale, accelerating Byte technology deployment in international markets for top-line and productivity gains, and the creation of a Chief Scale Officer role to streamline franchisee access to global scale benefits.

Danilo Gargiulo asked about Yum! Brands' strategic priority of strengthening franchisee store-level economics, especially amidst industry-wide deterioration of four-wall EBITDA and potential labor headwinds. He sought details on specific goals for franchisee EBITDA growth, timelines, incentives for teams, and levers to improve franchisee P&L.

Answer

CEO Chris Turner emphasized that strong unit economics and franchisee success are vital for unit development. He mentioned two-to-three-year paybacks in top development markets and highlighted opportunities to unlock growth in white space markets by improving unit economics. Key levers include leveraging Yum!'s global supply chain scale (e.g., RSCS in U.S., global supply chain team), accelerating Byte technology adoption in international markets for top-line and productivity gains, and the new Chief Scale Officer role to facilitate global scale integration for franchisees.

Danilo Gargiulo asked about the strategy to accelerate growth from KFC U.S. and Pizza Hut, which constitute the remaining portion of operating profit beyond the 'twin growth engines.'

Answer

CEO David Gibbs affirmed that while the twin engines power the algorithm, the company is excited about the potential of its other businesses. He highlighted growing traction for Taco Bell International. For KFC U.S., he noted its positive transaction growth in Q1 and expressed confidence in new leadership and the Saucy concept. For Pizza Hut, he acknowledged the tough category but pointed to past successes and the plans of its new U.S. leadership, as well as positive international same-store sales growth.

Danilo Gargiulo asked Scott Boatwright about specific operational actions Chipotle is taking in the near term to drive traffic, independent of macroeconomic conditions, given that current menu and marketing efforts are not fully offsetting traffic retraction. He also asked Adam Rymer for an update on the ROIC of incremental units, current cannibalization rates, and the reasonableness of the 8-10% net unit growth guidance.

Answer

Scott Boatwright (CEO) highlighted renewed problem detection studies, addressing key operational concerns under COO Jason Kidd's leadership, and modifying quarterly bonus incentives to align with digital order accuracy and guest experience. He also mentioned reimagining the loyalty program, improving value communication, and accelerating culinary innovation. Adam Rymer (CFO) stated that new restaurants have a similar per-restaurant impact on existing ones as in the past, with a roughly 100 basis point impact on overall comparable sales. Scott Boatwright (CEO) affirmed confidence in the 8-10% unit growth pace, noting that cannibalized restaurants typically recover within 12-13 months.

Danilo Gargiulo asked about the specific operational actions Chipotle is taking in the near term to inflect traffic, independent of macro conditions, given that current menu and marketing efforts are not fully offsetting traffic retraction. He also inquired about the ROIC of incremental units, cannibalization rates, and the achievability of the 8-10% net unit growth guidance.

Answer

CEO Scott Boatwright highlighted renewed problem detection studies identifying key operational concerns, which Chief Operating Officer Jason Kidd and his team are addressing. This includes modifying quarterly bonus incentives to align with desired outcomes, focusing on consumer friction points, and delivering value as a benefit over price. He also mentioned reimagining the loyalty program and digital commerce, and rapidly increasing culinary innovation for 2026. CFO Adam Rymer stated that new restaurants' impact on existing ones remains similar to the past, with about a 100 basis point impact on overall comps from new restaurant growth. Boatwright affirmed confidence in the 8-10% growth pace, citing industry-leading unit economics and quick recovery of cannibalized restaurants (within 12-13 months).

Danilo Gargiulo from Bernstein asked about the impact of competition versus macro pressures and sought details on loyalty member frequency, specifically which consumer segments were most affected.

Answer

CEO Scott Boatwright clarified that while there was some share loss in April and May, it was regained in June and July, attributing the shifts to macro trends and consumer sentiment rather than a specific competitor. He identified the low-frequency user as the most at-risk segment and noted that the 'Summer of Extras' promotion was successful in re-engaging this group.

Danilo Gargiulo of AllianceBernstein asked about potential future unlocks, specifically the progress on restaurant-level margins in the U.K. and the opportunity to retrofit more existing stores with Chipotlanes.

Answer

CEO Scott Boatwright stated that U.K. margins have improved measurably, giving the company confidence to begin building a development pipeline again in Western Europe. On retrofits, he explained that they take a hard look at converting legacy stores where it makes sense and provides a nice return, but the decision is complex, involving factors like lease term, lot space, and permitting.

Danilo Gargiulo asked Interim CEO Scott Boatwright about his potential long-term vision and areas for strategic acceleration. He also inquired about the timeline for unit growth in Europe and what is needed to close the performance gap with North America.

Answer

Interim CEO Scott Boatwright stated his focus would be on the five existing strategic priorities, creating a more guest-connected organization, and elevating Chipotle to an iconic global brand. On Europe, he drew parallels to the successful turnaround in Canada, noting the new leadership is already making progress on culinary and operational alignment. While he did not provide a specific timeline, he expressed confidence in the potential for hundreds of restaurants in current European markets and thousands over time.

Danilo Gargiulo inquired about the market reception and pricing feedback for the new Protein Platform, seeking an updated view on sustainable pricing strategies for fiscal year 2026 and beyond.

Answer

Brian Niccol, Chairman and CEO, Starbucks, expressed excitement about the Protein Platform's performance, noting building awareness and positive customer feedback on taste and value. He highlighted its versatility across over 90% of drinks and its appeal to less frequent customers, contributing to improved value scores.

Danilo Gargiulo inquired about the market reception and customer feedback on the new Protein Platform, specifically regarding its pricing point, and asked for Starbucks' updated view on sustainable pricing strategies for fiscal year 2026 and beyond.

Answer

Brian Niccol, Chairman and CEO, expressed excitement about the Protein Platform's performance, noting building awareness and its availability in over 90% of Starbucks drinks. He highlighted positive customer feedback on taste and value, with value scores continuing to increase, and expressed optimism for future health and wellness innovation.

Danilo Gargiulo of Bernstein asked for an assessment of whether transaction declines were due to lapping promotions versus consumers finding alternatives, and which new initiative is most critical for driving traffic.

Answer

Chairman & CEO Brian Niccol stated that while multiple initiatives will contribute, the 'Green Apron Service' model is 'mission critical' and the foundational first step to bring customers back consistently. This, combined with relevant innovation, forms the core strategy. He emphasized focusing on controllable factors like the customer experience to grow the brand regardless of the macroeconomic environment.

Danilo Gargiulo from Bernstein asked for an assessment of whether the transaction decline was driven more by lapping promotions or by competitive pressures, and which new initiative is most critical for bringing customers back.

Answer

CEO Brian Niccol responded that a combination of initiatives will drive customer return, but the 'mission critical' first step is establishing the Green Apron service model. This operational foundation will then be layered with relevant innovation in menu, digital, and rewards. While acknowledging macro pressures, he emphasized focusing on controllable factors like customer value and partner success to grow share in any environment.

Danilo Gargiulo questioned Starbucks' pricing strategy, asking if the company would maintain its plan to hold prices through 2026 amid rising coffee costs and tariffs, or if it would prioritize margin protection.

Answer

Brian Niccol, Chairman and CEO, reiterated the plan to hold prices for fiscal 2025, stating price is the 'last lever' he wants to pull. He emphasized focusing on growth and cost-cutting via zero-based budgeting first. CFO Cathy Smith added that green coffee is only 10-15% of product costs and that the company's hedging program mitigates volatility.

Danilo Gargiulo of Bernstein asked for quantification of recent operational improvements, specifically the percentage of stores meeting the 4-minute service goal and the comparable sales difference between high-performing stores and those needing more time.

Answer

CEO Brian Niccol stated that the primary bottleneck is the mobile ordering system's lack of sequencing, not store capacity. He noted that a high percentage of stores are already comping positively where this bottleneck is less of an issue. While the company is implementing systems to measure service times, he highlighted a very small, recent pilot of a new algorithm that is showing promising results in financial performance and satisfaction.

Danilo Gargiulo asked about any momentum in Darden's speed of service improvements, especially with the increased focus on affordability, and if there are early signs of picking up share from fast food. He also inquired about the key characteristic driving increased performance in top-performing stores within the same brand and how to standardize it.

Answer

Rick Cardenas, President and CEO, stated that some brands are showing speed of service improvement, with a company-wide refocus expected to drive greater gains over time. He noted that casual dining's positive year-over-year growth across all income groups suggests potential share gains from other categories experiencing traffic decline. He identified the quality and consistency of managers and their teams as the primary driver of performance within a brand, emphasizing leadership.

Danilo Gargiulo asked about Darden's progress and key performance indicators related to improving speed of service, especially with an increased focus on affordability, and whether there are signs of taking market share from fast food. He also inquired about the primary characteristic driving performance differences between top and bottom-performing stores within the same brand and how to standardize it.

Answer

Rick Cardenas, President, CEO & Director, noted that some brands show speed of service improvement, but it's a long-term effort with renewed focus from the GM Conference. He suggested that positive year-over-year growth across all income groups in casual dining indicates potential share gains from other categories. He emphasized that the quality and consistency of restaurant managers and their teams (leadership) are the most critical drivers of performance differences between stores.

Danilo Gargiulo asked about Darden's progress and key performance indicators (KPIs) for improving speed of service, especially given the increased focus on affordability and potential overlap with fast food consumers. He also inquired about the driving characteristics of increased performance between top and bottom-performing stores within the same brand, and how to standardize this across the group.

Answer

CEO Rick Cardenas stated that while some brands show improvement in speed of service, a company-wide refocus at the General Manager Conference is expected to drive greater improvement in upcoming years. He emphasized that the primary driver of performance within a brand is the quality and consistency of its managers and team, and adherence to Darden's standards.

Danilo Gargiulo from Bernstein asked for comments on the current labor environment, specifically regarding turnover rates. He also inquired about the long-term objectives for Darden's international franchising business, including potential unit counts and geographic focus.

Answer

President & CEO Rick Cardenas stated that Darden is not seeing any material impact on labor turnover, attributing this to the company's strong employment proposition and record retention levels. On international franchising, he expressed excitement about recent progress in markets like India and Spain but declined to provide a specific long-term unit target, emphasizing that it is a growing, capital-light contributor to profit.

Danilo Gargiulo requested an update on the progress of Darden's speed-of-service initiatives and asked about the strategic criteria for expanding the Uber Direct partnership to other brands, as well as what it would take to consider using a third-party marketplace.

Answer

President and CEO Ricardo Cardenas described the speed-of-service initiative as a long-term project, currently in the 'first inning,' focused on change management to enhance the guest experience. For delivery expansion, he said they prioritize brands where food travels well and that have strong existing to-go operations. He reiterated a preference for the first-party Uber Direct model, stating they would only consider third-party marketplaces if their fundamental concerns with that model were resolved.

Danilo Gargiulo asked about the potential labor impact of tighter immigration policies and Darden's pricing response. He also asked what management is most excited about and concerned about for 2025.

Answer

Executive Ricardo Cardenas stated it was too early to comment on future policy but reiterated Darden's strategy to price below competitors by finding efficiencies. He expressed excitement about his team, brand initiatives, and improving consumer sentiment, stating they are focused on internal execution and will handle any external challenges.

Danilo Gargiulo asked about the potential impact of tighter immigration controls on labor costs and the overall labor outlook for fiscal 2025. He also inquired about actions being taken to address the ongoing challenges in the Fine Dining segment.

Answer

CFO Raj Vennam stated that the labor environment is stable, with hourly wage inflation around 4% and strong applicant flow, and they do not see significant risk for the remainder of the fiscal year. President and CEO Rick Cardenas explained that for Fine Dining, the strategy is not to aggressively chase the aspirational consumer who has pulled back. Instead, they are focused on their core, frequent guests, while using targeted promotions like 'Wagyu & Wine' at Capital Grille to selectively drive traffic.

Danilo Gargiulo of Bernstein asked about the expected impact of sales deleverage and commodity inflation on franchisee profitability in 2025 and whether this could lead to higher store closures and a need for company support.

Answer

Interim CEO & CFO Ken Cook acknowledged that sales declines put pressure on the system but emphasized that franchisees are starting from a strong position after growing sales, EBITDA, and margin in 2024. Chief Accounting Officer Suzie Thuerk added that new restaurant-level P&L data allows for proactive conversations and sharing of best practices to improve profitability. Cook concluded that focusing on an exceptionally compelling restaurant economic model is the best way to drive net unit growth and they feel good about their prospects.

Danilo Gargiulo requested an update on franchisee cash flows and profitability. He also asked about the expected balance in 2025 between the headwinds from a tough macro environment and the potential tailwinds from the company's operational excellence initiatives.

Answer

Ken Cook, CFO, advised that the customary update on franchisee profitability would be provided on the second-quarter call. He highlighted the rollout of a new P&L benchmarking tool that is currently collecting data. He expressed excitement that this tool will provide franchisees with more granular data to compare performance against similar restaurants, helping them uncover opportunities to enhance their individual restaurant economics.

Danilo Gargiulo of AllianceBernstein asked new CFO Ken Cook for his early observations on the business and what best practices he plans to implement from his previous experiences.

Answer

CFO Ken Cook expressed that Wendy's has all the necessary components for value creation: a top product, a great brand, passionate employees, and a strong franchise system. He stated his primary contribution will be driving operational excellence through 'focus, execution, and speed.' This involves allocating resources to high-impact initiatives, ensuring detailed plans with accountability, and empowering faster decision-making to ultimately build more restaurants and increase restaurant profitability.

Danilo Gargiulo of AllianceBernstein inquired about the health of the consumer, both domestically and internationally, given the challenging Q3 macro environment, and whether these pressures have shown signs of easing in the fourth quarter.

Answer

CEO Kirk Tanner acknowledged the challenging consumer environment in Q3 but noted that momentum improved in the second half of the quarter and continued to accelerate into Q4. This trend provides confidence in meeting guidance and suggests a brighter outlook for 2025.

Danilo Gargiulo from Bernstein asked for an analysis of value creation at Burger King U.S., noting its performance seems less reliant on a single value meal, and inquired about the brand's marketing calendar for the second half of the year.

Answer

CEO Josh Kobza explained that Burger King maintains a stable, balanced approach to value with its '$5 duos and $7 trios' and does not plan a major shift in strategy. He emphasized a three-pronged focus on premium innovation, family offerings, and relevant value. The marketing calendar for the second half will continue this strategy with new partnerships and Whopper innovations.

Danilo Gargiulo asked a two-part question regarding Burger King U.S. First, he requested the comparable sales contribution from remodels and the expected impact for 2025. Second, he asked about the performance of recent value promotions like the '$5 Duos' and how the brand's value strategy is evolving.

Answer

CFO Sami Siddiqui stated that the comp sales impact from remodels is currently small but will grow as the pace of renovations accelerates, reiterating that uplifts are holding in the mid-teens. CEO Josh Kobza clarified his earlier remarks on value, stating the plan is not to increase investment in value but to continue refreshing the offerings throughout the year, similar to the shift from '$1 meals' to '$5 Duos and $7 Trios,' to keep the platform engaging for guests.

Danilo Gargiulo inquired about franchisee feedback on the new espresso machines at Tim Hortons, their potential impact on speed of service, and the effect of rising coffee prices on supply chain margins and consumer demand.

Answer

CEO Joshua Kobza explained the espresso machine tests are more focused on enhancing quality than speed, which is already improving through other initiatives. CFO Sami Siddiqui added that coffee is only 15% of the Tims commodity basket and a forward-buying strategy smooths volatility, reaffirming the 2025 supply chain margin guidance of around 19%.

Danilo Gargiulo asked how RBI is responding to competitors' expanding value messages and inquired about franchisee profitability expectations for brands beyond Burger King, as well as the most significant feedback received from franchisees across the portfolio.

Answer

CEO Josh Kobza stated that Burger King performs best when it balances strong value offerings with compelling innovation and a focus on the Whopper, citing the successful Addams Family promotion. He confirmed that franchisee profitability is a key focus and is seeing good progress not only at Burger King but also at Popeyes and Tim Hortons, where improved unit economics are being achieved through sales growth and cost management.

Danilo Gargiulo from AB Bernstein noted RBI's strong performance and asked about pressures on Canadian franchisees from rising labor costs, questioning what measures are being taken to alleviate operating costs beyond equipment upgrades.

Answer

CEO Josh Kobza conveyed a positive outlook for Tim Hortons' Canadian franchisee profitability for 2024. He cited that strong same-store sales growth, combined with favorable commodity trends, is expected to more than offset pressures from factors like increased labor costs.

Danilo Gargiulo asked about the performance of the breakfast daypart, including its current sales mix compared to pre-COVID levels, and whether the strategy to strengthen it relies more on the new beverage lineup or on enhanced value offerings.

Answer

Chairman & CEO Chris Kempczinski confirmed that breakfast is the most economically sensitive daypart and is currently the weakest for the industry, reflecting consumer stress. He affirmed that McDonald's has a right to win in this space and can drive traffic with the right value programs. He noted that the U.S. has resumed national breakfast advertising and is exploring additional breakfast value initiatives to restimulate growth in the daypart.

Danilo Gargiulo asked about the impact of international boycotts on U.S. brands and what measures McDonald's is taking to protect its brand.

Answer

CEO Christopher Kempczinski reported that while company surveys show a recent 8-10 point increase in anti-American sentiment, particularly in Northern Europe and Canada, there has been no change in global consumer sentiment toward the McDonald's brand itself. President, IOM Ian Borden added that the local franchisee model is a key strength, helping the brand integrate into the communities it serves in over 100 countries.

Danilo Gargiulo of Bernstein inquired about market share gains in international markets, the competitive landscape in the top five markets, and the progress of 'Hungry for More' strategy adoption by international master franchisees.

Answer

CEO Russell Weiner highlighted India as a prime example of success, where the local franchisee has fully embraced all pillars of the 'Hungry for More' strategy, driving strong results. CFO Sandeep Reddy added that Canada and Mexico have also shown strong performance, particularly with successful stuffed crust launches, indicating broad adoption of the strategy.

Danilo Gargiulo inquired about the potential impact of international geopolitical pressures on the Domino's brand, specifically asking if the company is observing any consumer weakness or boycotts in international markets.

Answer

Chief Financial Officer Sandeep Reddy responded that the company's guidance incorporates caution for geopolitical volatility and its potential downstream impact on consumer demand. This risk is factored into the full-year international same-store sales growth forecast of 1% to 2%.

Danilo Gargiulo from AllianceBernstein asked why the pizza category is not proving more resilient and gaining relevance with the low-income consumer during a decelerating macro environment, despite being considered a cheap meal option.

Answer

CFO Sandeep Reddy explained that the low-income consumer has been impacted by the accumulation of pricing taken across the industry over the last couple of years. While Domino's is winning in carryout with compelling value, the higher price point of first-party delivery can be a hurdle. CEO Russell Weiner added that the category does respond to value, but Domino's ability to sustain value promotions better than competitors is why it is significantly outgrowing the category.

Danilo Gargiulo of AllianceBernstein noted RBI's strong performance in a weak environment and asked about pressures on Canadian franchisees from rising labor costs, inquiring about plans to mitigate these costs beyond equipment upgrades.

Answer

CEO Josh Kobza expressed a very positive outlook for Tim Hortons' Canadian franchisee profitability for 2024. He stated that strong same-store sales growth combined with favorable commodity trends are expected to drive further profit growth, helping to offset other pressures like labor costs.

Danilo Gargiulo from Bernstein noted RBI's strong performance and asked about pressures on Canadian franchisees from rising labor costs, questioning what measures are being taken to mitigate these costs beyond equipment upgrades.

Answer

CEO Josh Kobza conveyed a very positive outlook for Tim Hortons' Canadian franchisee profitability for 2024. He stated that strong same-store sales growth, combined with favorable commodity cost movements, is expected to support continued profit growth for franchisees throughout the year, helping to offset other pressures.