Lauren Silberman • Deutsche Bank

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CEO George Holm explained that new accounts are acquired with a significant piece of their business upfront, and the company is seeing positive trends with sales growing as fast as lines per drop. He added that a larger salesforce helps reduce account losses. Regarding M&A, Holm described the pipeline as having a 'great amount of activity' with actionable conversations, though none are of significant size. CFO Patrick Hatcher confirmed the company's M&A strategy remains unchanged.

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CFO Patrick Hatcher confirmed the guidance increase reflects approximately 38 weeks of Cheney's results and expressed confidence in the core business. CEO George Holm added that initial guidance was cautious due to hurricane activity, but Cheney's performance has been strong. Regarding private brands, Holm noted Reinhart's penetration grew by about 10 percentage points post-acquisition but could not provide a figure for Cheney yet, as PFG is still evaluating which Cheney brands to adopt into its portfolio.

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Michael Bailen, Senior Director & Head of IR, noted that the April period had a 70 basis point negative impact from the timing of Easter, while the start of Q3 saw a 60 basis point negative impact from the July 4th calendar shift. He stated that performance was solid seven days a week across all regions, with no specific areas of weakness or outsized strength to report.

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Executive Michael Bailen provided the breakdown for the first five weeks of Q2: a 5% comp increase consisting of 3.1% traffic growth and a 1.9% check increase (which included 2.3% pricing, implying a 0.4% negative mix). He reiterated that performance remains strong across all regions and days of the week.

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CFO David Monroe attributed the recent slowdown to numerous external factors, including over a dozen named winter storms, flu, and school closures across the country. Executive Michael Bailen highlighted the negative impact of the Valentine's Day calendar shift and noted the Western U.S. outperformed, suggesting more normalized underlying trends. Regarding cattle, he stated it takes time to rebuild herds and that ranchers have not yet begun retaining heifers for breeding in significant numbers, suggesting the current cattle cycle could persist.

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CEO Dave Flitman stated there has been no change to the company's M&A philosophy, referring to his prepared remarks about exploring strategic opportunities to create value. Regarding traffic, Flitman noted that while chain restaurant traffic improved sequentially, it remained down year-over-year. He confirmed that independent restaurant traffic also accelerated, per Surcana data, and that US Foods' own independent case growth accelerated through Q2 and into July.

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CEO Dave Flitman stated that while April's independent case growth was at the lower end of the 2-5% range, he expects it to move toward the mid-to-high end, driven by accelerating net new account generation, which was the strongest of the year in April. On competition, Flitman noted he has not seen a significant change in intensity, describing the industry as consistently competitive and fragmented, with the 'big 3' continuing to gain share.

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CFO Dirk Locascio stated that growth slowed in December due to holiday timing but accelerated in a noisy January, with the expectation for growth to build throughout the year. He confirmed the 2-4% case growth guidance includes already-transacted M&A, like IWC and Jake's Finer Foods, and described the overall M&A pipeline as healthy, with the company remaining opportunistic.

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CEO David Flitman and CFO Dirk Locascio attributed the strong performance to disciplined execution on initiatives across the P&L, including gross profit and operating expense management, rather than pulling projects forward. Flitman confirmed seeing an acceleration in independent case growth across the country, suggesting improving consumer confidence post-election.

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Chairman & CEO Chris Kempczinski acknowledged that inflation has pressured franchisee P&Ls but emphasized that there is strong alignment on the power of nationally advertised price points, which drive superior incrementality. He cited the $2.99 Snack Wrap as a recent success in franchisee collaboration. He recognized that diverse wage rates across the U.S. add complexity, necessitating ongoing dialogue to find solutions that support the P&L of every franchisee.

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President, IOM Ian Borden reiterated that both low- and middle-income consumers are under pressure, cohorts where McDonald's over-indexes. Despite this, he stressed that McDonald's achieved a positive comparable guest count gap versus most near-end competitors in Q1, indicating traffic share gains. He expressed confidence that the combination of strong value and upcoming initiatives will allow them to win across all consumer groups.

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CFO Ian Borden did not provide specific comp figures but suggested that Q1 2025 would likely be the low point for the year. He cited headwinds from lapping a leap year and a sluggish start to the U.S. QSR industry. Borden expressed expectations for a gradual and progressive improvement in operating conditions as the year unfolds, driven by the execution of the 'Accelerating the Arches' strategy.

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CFO Ian Borden stated the impact was 'a bit more' concentrated in the affected areas but also had a 'broader impact' due to national news. He declined to provide a detailed comp breakdown but reiterated that momentum was strong before the incident, with the $5 meal deal resonating well and driving a strong check lift when combined with other marketing efforts.

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Chairman & CEO Brian Niccol reported that test stores saw progress in peak morning transactions and throughout the day. On the Rewards program, he explained it had become a 'one-size-fits-all' discounting tool. The future program will be more tailored to recognize loyalty and build engagement for different customer segments, moving beyond simple discounts.

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CEO Brian Niccol reported that Green Apron pilots showed 'really nice progress' in peak morning transactions and growth throughout the day. On the rewards program, he explained it had become a 'one size fits all' discounting tool. The reimagined program will move away from this to better recognize loyalty and build engagement, tailoring the experience for different customer frequencies rather than just offering broad discounts.

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CEO Brian Niccol explained that initial investments in 3,000 stores were based on precision scheduling to address thin coverage. A new 700-store pilot will determine the labor model needed for optimal customer connection and speed. CFO Rachel Ruggeri added that while these targeted investments have a near-term margin impact, they are expected to be accretive long-term by driving traffic. She reiterated that ongoing efficiency work will also help balance these investments.

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CEO Brian Niccol stated there is a major opportunity to simplify the pricing structure, particularly around customizations, to provide more clarity and value. He believes the brand's inherent value is strong, citing the quality of the core coffee. He is confident that initiatives like eliminating the non-dairy upcharge and improving the cafe environment will reinforce the brand's worth to customers, driving a positive perception of value.

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CFO Adam Rymer confirmed a positive low-single-digit one-year comp for July, with a continuing mix headwind of about -1%. CEO Scott Boatwright stated bluntly that he does not believe Chipotle is getting sufficient credit for its value proposition and that the team is actively working on new ways to communicate this value to consumers without resorting to simple price-point advertising.

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CFO Adam Rymer clarified that the new store impact on comps is stable at 80-100 basis points and not worsening. He stated that reaching mid-single-digit comps for the full year would likely require macro relief, but the second half could get there with current initiatives. He confirmed the Q2 exit rate is expected to be a positive comp, with traffic near flat.

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CFO Adam Rymer stated there was nothing significant to report regarding shifts in income cohorts, noting that all groups were contributing nicely to comps, consistent with Q4 trends. He attributed the perceived step-down in transaction growth primarily to lapping a very strong prior year comp of 5.3% transaction growth.

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Interim CEO Scott Boatwright stated that the brand is seeing strength across all income cohorts, attributing it to strong value perception. CFO Adam Rymer added that performance is broad-based across regions. For Q4 guidance, Adam Rymer clarified that the strong transaction trend from September has continued into October, and the assumption is for it to continue, implying a total comp in the mid-5% range, not a deceleration.

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CFO Raj Vennam explained that the company aims for flat to positive EAT margin growth, indicating a willingness to reinvest upside from sales to support long-term growth rather than maximizing short-term profit flow-through. He noted that while Q4 momentum has continued, the annual guidance is prudent due to macro uncertainty, and comps are expected to be stronger in the first half of the year before lapping tougher comparisons.

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CFO Raj Vennam confirmed that the quarter-to-date performance is running in line with the 'above 3%' guidance. President and CEO Ricardo Cardenas attributed LongHorn's sustained success to long-term investments in food quality. He noted that after adjusting for holiday shifts and weather, its Q3 performance was stable, and the brand is a significant contributor to the strong Q4 outlook.

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Executive Rajesh Vennam noted that underlying traffic trends, when adjusted for weather and holidays, improved across all brands versus the prior two quarters. Executive Ricardo Cardenas clarified that of the three items being featured in January, two are permanent menu additions at regular price, while one will be a limited-time offer at a compelling promotional price point.

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President and CEO Rick Cardenas noted that while the overall preference for Never Ending Pasta Bowl is up slightly, the mix of guests trading up to add a protein is up more significantly, now at 60-65%. Regarding delivery, he stated that while it's early, they believe it will be incremental over the long term by serving a consumer need for small-order delivery that has existed for years. The full impact will become clearer following the pilot phase.

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CEO Lance Tucker attributed an estimated 1% to 2% of same-store sales pressure to temporary IT integration issues and also noted the brand's over-indexing with the low-income consumer as a headwind. Chief Customer and Digital Officer Ryan Ostrom explained they are lapping the successful Smashed Jack launch and outlined a back-half plan focused on driving ticket with Munchie Meals, transaction growth with new curly fry flavors, and attracting guests with strong core value.

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Lance Tucker, Interim Principal Executive Officer, clarified that company-owned store builds are not intended to lead growth but rather to complement franchisee development in new markets, maintaining an asset-light model. Regarding sales, Tucker expressed confidence in the company's marketing calendar, innovation pipeline, value leadership, and expanding digital capabilities to regain positive momentum despite consumer pressures.

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CEO Darin Harris attributed the momentum to a well-aligned marketing calendar featuring both innovation and value. He also highlighted the growing contribution from digital initiatives, including the new iOS app, which are effectively driving sales.

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Ken Cook, CFO, confirmed that the low end of the new guidance assumes the pressured traffic pattern seen in March persists. He projected that Q2 results would be similar to Q1, with momentum expected to build in Q3 and Q4 driven by summer initiatives, while noting the tough comparison in Q4. He highlighted the strength of the international business, which saw 8.9% system-wide sales growth with positive contributions from all regions.

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CFO Gunther Plosch expressed confidence in sustaining momentum through Q4, citing a strong pipeline including a new Frosty flavor, the return of the Mushroom Bacon Cheeseburger, and national media for the Spicy Chicken sandwich. He also stated that Wendy's maintained both traffic and dollar share across lower and higher income cohorts in Q3.

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EVP and CFO Matt Clark stated that sales patterns by daypart and day-of-week remain incredibly consistent, with regional variations attributable to weather and holiday shifts. He expects the negative mix trend to continue due to menu strategy and a shift from alcoholic to non-alcoholic beverages. President David Gordon noted that the off-premise business remains remarkably stable at 22% of sales, with consistent demand across delivery and takeout channels.

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EVP and CFO Matt Clark described Q4 trends as steady and confirmed the Q1 outlook implies comps consistent with the prior year's performance. Regarding margins, he noted that Q4 is seasonally high and they focus on the annual rate (17% for 2024). He added that reinvestment also includes maintaining high standards in training and portion sizes, which competitors have cut, rather than just lowering price.

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President and CEO Todd Penegor attributed the expected ticket improvement to a return to a more traditional barbell menu strategy with higher price points (e.g., $13.99 Epic Stuffed Crust), a robust innovation pipeline for the second half of the year, and strategic price increases. CFO Ravi Thanawala added that while consumers are currently favoring medium pizzas, the company is constantly testing to find the right balance between ticket and transactions.

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CEO Mike Spanos noted a slight 100-150 basis point increase in check management from Q4 to Q1, which he views as short-term. He also stated that for the full year, the company is approximately 76% locked on commodities and expects beef inflation to be in the mid-single digits, which is included in the annual guidance.

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CEO Rob Lynch stated that despite early concerns about a push to value, the company has found its premium positioning to be an advantage. He noted that Shake Shack's real estate and brand attract a higher-income, less price-sensitive guest, insulating it from hyper-value consciousness. The success of the high-priced Truffle Burger LTO demonstrates continued demand for high-quality food that customers perceive as a great value, especially as the price gap with QSR competitors has narrowed.

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CEO Joshua Kobza declined to comment on intra-quarter trends, preferring to wait for the full Q1 results. He revealed that Tim Hortons Canada's Q4 comp was driven approximately two-thirds by traffic. For 2025 pricing, he noted the company is mindful of CPI, and its hedging strategy creates a delayed impact from commodity price changes.

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CEO Josh Kobza confirmed Tim Hortons' growth was healthy and transaction-driven. CFO Sami Siddiqui detailed the 2025 outlook, explaining that RBI's $60 million annual ad fund contribution will end, creating a significant tailwind for AOI and EPS. To maintain marketing firepower, franchisees will increase their ad fund levy from 4.0% to 4.5%. He also noted that capital investments in remodels are expected to accelerate.

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CEO Kevin Hourican attributed the choppy Q2 performance to a hurricane and holiday timing shifts, asserting that underlying performance was solid versus Q1. CFO Kenny Cheung detailed the $100 million in savings, explaining it stems from strategic sourcing, supply chain efficiencies, and organizational optimization, with benefits to both gross profit and operating expenses expected to materialize starting in the second half.

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CEO Josh Kobza reiterated the full-year outlook for mid-4% net restaurant growth, noting that development is typically back-half weighted and Q1 is seasonally quiet. He stated that visibility will improve as the year progresses and that it is too early to provide specific details on the 2025 pipeline.

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CEO Josh Kobza reiterated the full-year outlook for mid-4% unit growth, noting that development is typically weighted towards the second half of the year. He stated that it was too early to provide specific details on the 2025 pipeline, with more visibility expected later in the year.

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