Tyler Prause

Tyler Prause asked about consumer engagement per ad spend and whether the competitive environment would necessitate increased marketing dollars in 2026, despite the guidance for flat G&A as a percentage of sales. He also inquired if the company had observed any noticeable step change in the Hispanic consumer cohort due to tighter immigration policies.

Answer

Matt Clark, EVP and Chief Financial Officer, stated that the company continues to increase spending, primarily within the rewards program, as an on-brand approach, and would likely dedicate more funding to social media rather than traditional ad placement. Regarding the Hispanic consumer, he noted that the company does not parse out specific cohorts, attributing observed softening to broader macroeconomic factors like tariffs, fewer jobs, and low consumer sentiment, which he believes are cyclical and will normalize in the coming months.

Tyler Prause asked about consumer engagement per ad spend and whether the competitive environment might necessitate increased marketing dollars in 2026 despite flat G&A guidance. He also inquired if the company observed any noticeable step change in the Hispanic consumer cohort's behavior.

Answer

Matt Clark, EVP and CFO, stated that increased spending is primarily directed towards the rewards program and social media, rather than national TV advertising, as the on-brand approach. He reiterated that they don't parse out specific cohorts, viewing the softness as broad-based due to macroeconomic factors, and believes it's cyclical and will normalize.