Logan Reich

Logan Reich asked for an update on how new store productivity has been tracking throughout the year, specifically for the Q4 openings.

Answer

CFO Jamie McConnell stated that it's too early to comment definitively on 2025 new store productivity due to business deceleration, but the company is monitoring it closely. She highlighted promising results from new markets like Arizona, which haven't been impacted by weather, and emphasized a focus on securing the best sites for 2026.

Logan Reich asked for an update on how new store productivity has been tracking throughout the year, specifically for the Q4 openings.

Answer

CFO Jamie McConnell stated it's too early to definitively comment on 2025 new store productivity due to business deceleration, but the company is monitoring it and focusing on securing the best sites for 2026. She noted promising results in new markets like Arizona, which haven't been impacted by weather.

Logan Reich of RBC Capital Markets inquired about the average cost associated with store relocations and asked for a breakdown of the Q2 same-store sales weakness, such as by income cohort or geography.

Answer

CFO Mitch Reback and CEO Jonathan Neman explained that relocation costs are minimal and primarily related to any outstanding lease obligations on the closed stores, while the new locations have standard build-out costs. Regarding Q2 performance, Reback attributed the weakness to a roughly 250 basis point impact from the loyalty program transition and a more pronounced negative impact in the Northeast, reflecting broader macro-environmental concerns.

Logan Reich of RBC Capital Markets asked for details on the nationwide launch of Ripple Fries, inquiring about its performance relative to expectations and any available data on its mix or contribution to comparable sales.

Answer

CEO Jonathan Neman described the launch of Ripple Fries as very encouraging, citing great customer feedback, social media awareness, and strong trial. He stated that it has become the "most attached side" item, which should continue to help drive both comparable sales and overall ticket averages, though he did not provide specific mix metrics.

Logan Reich asked for the same-store sales growth in mature markets to compare against the double-digit growth in emerging markets, and requested a breakdown of the 2% traffic and mix component, specifically the contribution from steak.

Answer

CFO Mitch Reback declined to break out comps by market maturity or to separate the traffic and mix components. He reiterated that emerging markets performed very well, the company-wide comp was 6%, and the combined traffic and mix benefit was 2%.

Logan Reich asked CEO Brett Schulman about CAVA's Q1 year-to-date performance, inquiring about the drivers of its outperformance compared to the industry and any quantifiable impact of January weather.

Answer

CEO Brett Schulman attributed outperformance to sequential two-year comp improvement throughout 2025, cycling through short-term headwinds, and the underlying strength of the brand (best new restaurant class). He also highlighted CAVA's focus on delivering great holistic value in a discerning consumer environment and the relevance of Mediterranean cuisine. He stated that Q1 guidance includes all weather impacts.

Logan Reich asked about CAVA's Q1 year-to-date performance, specifically the drivers behind its outperformance relative to the industry and any quantifiable impact of January weather on results.

Answer

CEO Brett Schulman explained that the re-acceleration of comps stemmed from cycling through "idiosyncratic" hurdles in 2025 (like the Steak launch and government shutdown), which had previously obscured the brand's underlying strength. He attributed current momentum to CAVA's compelling value proposition—quality ingredients, relevant Mediterranean cuisine, and a strong multi-channel experience—which resonates with discerning consumers. He confirmed that the impact of winter weather was already factored into the guidance.

Logan Reich asked for directional commentary on the Q4 same-store sales outlook, given the relatively wide range provided in the full-year guidance.

Answer

CFO Tricia Tolivar stated that the Q4 guidance was set judiciously due to the tough prior-year lap (21.2% same-restaurant sales) and ongoing consumer headwinds. She mentioned that current trends are slightly better than the midpoint of the range, but a wide range was maintained due to market uncertainty, including potential impacts from the government shutdown.

Logan Reich requested directional commentary on the Q4 same-store sales outlook, given the relatively wide range implied by the full-year guidance.

Answer

Tricia Tolivar, CFO, stated that CAVA took a judicious approach to Q4 guidance due to the tough prior-year lap (21.2% same-restaurant sales) and ongoing consumer headwinds, leading to a choppy environment. She noted that current trends are slightly better than the midpoint of the range, but the wide range accounts for uncertainty, including potential impacts from the government shutdown.

Logan Reich asked about the strategic long-term level for the delta between rack rate and average member dues, and whether this delta is expected to converge over time. He also sought clarification on the composition of the 2026 same-store sales guidance, specifically regarding member growth, pricing, and in-center growth.

Answer

Bahram Akradi, Founder, Chairman, and CEO, explained that the company analyzes club-by-club to set prices, which sometimes necessitates raising rates, causing the delta to persist around $17 million-$20 million per month. He expects the delta to shrink in the future but not immediately. Erik Weaver, Executive Vice President and CFO, added that the gap will likely never fully close due to the retention benefit of members paying under rack rate. For 2026 guidance, Bahram Akradi stated that revenue per membership will increase, and membership count will exceed 2025, with the remainder coming from in-center growth and optimized revenue per member.

Logan Reich asked for the strategic and longer-term view on the delta between rack rates and average member dues, specifically if there's a target level or if it should converge over time. He also inquired about the composition of the 2026 guidance on same-store sales, breaking it down by member growth, pricing, and in-center growth.

Answer

Bahram Akradi, Founder, Chairman, and CEO, explained that the delta is currently managed club-by-club to maximize experience and brand positioning, leading to price increases. He expects the gap to shrink in the future as rack rates won't continue to rise at current levels, but Erik Weaver, EVP and CFO, doesn't see it ever fully closing due to retention plays. For 2026 guidance, Bahram Akradi stated revenue per membership will increase, and membership count will see growth exceeding 2025. Erik Weaver clarified that 'pricing' includes arbitrage from members turning out at lower rates, with the overall focus on optimizing revenue and EBITDA through membership experience.

Logan Reich inquired about pricing increases on legacy members in Q2, the rationale for the implied deceleration in same-store sales guidance, and what would be required to accelerate unit growth beyond the 2026 target.

Answer

EVP & CFO Erik Weaver confirmed that legacy member pricing was adjusted in Q2, consistent with strategy, and noted that guidance includes some conservatism. Founder, Chairman, and CEO Bahram Akradi explained that maintaining double-digit top-line growth requires at least 10-12 new clubs per year, with potential for more when conditions permit.

Logan Reich asked about the high incremental revenue-to-EBITDA flow-through of 30-35% and questioned what factors would prevent margins from expanding further, in line with guidance.

Answer

EVP and CFO Erik Weaver noted the need to reinvest in centers to maintain their 'like new' condition. Founder, Chairman and CEO Bahram Akradi strongly cautioned against raising margin expectations beyond ~25%, prioritizing brand elevation through investments in facilities and staff. He also pointed out that growth in lower-margin businesses like the Cafe and Spa will naturally pressure the overall margin percentage, even as they contribute to total profit.

Logan Reich asked for additional details on the Clutch acquisition, specifically the investment required to transition those 20 locations to Dutch Bros and the timeline for their openings.

Answer

Josh Guenser, CFO, explained that the all-in cost for converting the Clutch locations is not inconsistent with building new shops. He noted that since Clutch Coffee Bar's founder was a former Dutch Bros employee, the existing stands already have a similar look and feel, requiring relatively light capital for equipment, signage, and branding. Guenser expects these locations to open during Q2 and Q3 of the current year.

Logan Reich asked for additional color on the Clutch acquisition, specifically the required investment to transition the 20 locations to Dutch Bros and the timeline for their openings, following the $20 million purchase price.

Answer

Josh Guenser, CFO, explained that the additional investment for converting Clutch locations is a relatively light capital lift, making the all-in cost consistent with building new Dutch Bros shops, as they were already coffee stands with a similar look and feel. He expects these locations to open in Q2 and Q3 of the current year.

Logan Reich of RBC Capital Markets questioned the trend in mobile order mix, noting a slowdown in its growth rate from Q1 to Q2, and asked about the long-term target for this channel.

Answer

CEO Christine Barone stated they feel "really good" about the current mobile order mix of 11.5%, which is in line with expectations. She noted that some newer markets see double that mix. The overall average is influenced by legacy double drive-thru locations without walk-up windows. She added that a key goal of balancing demand is working, with the walk-up window channel growing from 10% to 15% of transaction mix since the mobile order launch.

Logan Reich asked about the outperformance of Jack in the Box's company-owned store same-store sales relative to the franchisee base, seeking reasons behind this trend.

Answer

CEO Lance Tucker attributed the outperformance primarily to easier comparisons for company stores and more favorable pricing strategies, noting that company restaurant pricing is currently a little below many franchisees, which contributes to the difference in markets where they operate head-to-head.

Logan Reich inquired about the outperformance of Jack in the Box's company-owned store same-store sales relative to the franchisee base. He asked if this was due to easier comparisons, operational changes first appearing in company stores, or other factors.

Answer

CEO Lance Tucker attributed the outperformance primarily to a combination of slightly easier comparisons for company stores and the company's pricing strategy appearing more favorable (lower absolute pricing) compared to many franchisees.

Logan Reich from RBC Capital Markets asked about the nature of conversations with franchisees following the 'JACK on Track' plan announcement and also inquired about the amount of menu pricing expected to roll off through the rest of the year.

Answer

CEO Lance Tucker characterized franchisee conversations as very positive, noting their strong support for the plan's long-term objectives to strengthen the business for the future. Interim CFO Dawn Hooper added that the carryover menu price for the remainder of the year is a little over 2%.

Logan Reich followed up on franchisee profitability, asking about its current state and the outlook for 2025 given ongoing headwinds.

Answer

CEO Darin Harris stated that franchisee profitability is currently flat year-over-year and that future improvement hinges on top-line sales growth. He acknowledged that the full-year impact of AB1228 will be a headwind, citing the $15 million impact on company stores as a proxy. CFO Brian Scott added that the system is healthy and that multi-unit owners are able to absorb near-term pressures.

Logan Reich requested observations from the Black Card pricing test, focusing on any differences in Black Card mix, member retention, or net adds. He also asked how many clubs currently have the $29.99 Black Card price.

Answer

CEO Colleen Keating reported that the test showed no material difference in churn or performance between the $27.99 and $29.99 price points, leading them to anchor to the higher price. She noted the narrower price gap to the Classic Card has successfully driven higher Black Card penetration. The higher price is currently active in the New York and Charlotte markets.

Logan Reich asked how competitive intensity trended in Q1 and what impact was seen from elevated discounting by burger QSR chains.

Answer

Chief Executive Officer Russell Weiner noted that within pizza, key competitors launched their own stuffed crust promotions. More broadly, he cited headwinds from lower consumer disposable income. Chief Financial Officer Sandeep Reddy added that Domino's superior franchisee economics allow it to withstand promotional pressure better than competitors, which is a long-term advantage.

Logan Reich from RBC Capital Markets asked about the underlying assumptions for the consumer environment embedded in the 2025 guidance. He questioned whether the outlook assumes the consumer will improve, stabilize, or potentially worsen.

Answer

CEO Russell Weiner responded that the company's strategy is not dependent on predicting the consumer environment. He stated that Domino's will continue to lean into all pillars of its 'Hungry for MORE' strategy regardless of whether the macro backdrop is predictable or not, implying the plan is designed to work in various economic conditions.

Logan Reich of RBC Capital Markets requested a breakdown of the 2025 same-store sales outlook, distinguishing between expectations for the U.S. and International segments.

Answer

CEO Kirk Tanner provided a forecast for system-wide sales growth, expecting low single-digit growth in the U.S. and high single-digit to low double-digit growth for the international business. He added that the company's plan is benchmarked against an assumption of U.S. industry traffic being flat to down 1%, with Wendy's aiming to perform in line with or better than the market.

Logan Reich of RBC Capital Markets asked for a follow-up on consumer trends, inquiring if the sales improvement seen through Q3 and into October was consistent across low, middle, and high-income cohorts.

Answer

CFO Gunther Plosch reiterated that Wendy's maintained market share with both lower and higher income cohorts during Q3. However, he stated that specific data for October's performance broken down by income cohort was not yet available.

Logan Reich of RBC Capital Markets asked about any observed changes in consumer behavior across different income cohorts and about the company's value proposition relative to grocery store prices.

Answer

CFO David Monroe stated the company is not seeing any change in consumer behavior or a trade-down to value items on the menu, with trends remaining historically consistent. He affirmed that they monitor grocery prices as a key competitor (cooking at home) and that this awareness informs their conservative approach to menu pricing to ensure they 'scream value'.