Sales Trends and Guidance
Q: Why did comps slow to 6% in June and July?
A: Comps moderated to about 6% in June, continuing into July, due to seasonal behavior shifts like extended holidays and potential macro factors. Despite this, brand metrics remain strong with positive customer feedback on value and culinary experience.

Margin Outlook and Cost Pressures
Q: What are the factors impacting margins in coming quarters?
A: Margins face pressure from inflation in avocados and dairy, expected to normalize by early next year, and investments in generous portions to uphold brand equity. Additionally, the temporary mix shift from Chicken al Pastor affects margins but will reverse with future LTOs.

Pricing Strategy
Q: Do you plan further price increases this year or next?
A: Currently, there are no plans for further pricing this year. The 3% price increase from last year rolls off in October. Future pricing will depend on inflation and consumer trends, aiming to avoid increases unless the economy is robust with accelerating transactions.

Operational Improvements
Q: How are throughput and staffing improvements progressing?
A: Over 50% of units have an expeditor during peak hours, aiming to increase this to over 70%. Staffing levels are strong with low turnover, and teams are focused on great throughput and culinary execution to enhance performance.

Automation Initiatives
Q: What is the status of the automated digital make line?
A: The automated make line, named Python, will be in a restaurant by late August or early September. It's part of a portfolio of innovations, including prep efficiency tools and AI assistance, aimed at improving consistency and speed over short, medium, and long terms.

LTO Strategy and Impact
Q: How do LTOs impact comp growth each year?
A: LTOs like Chicken al Pastor boost comps by enhancing customer experience. Strong operational execution amplifies their effectiveness, leading to accelerated comps even on a higher base.

Consumer Demand Trends
Q: Are value promotions by competitors affecting your results?
A: No significant impact observed; Chipotle continues to gain market share with strong brand metrics and a solid value proposition. Focus remains on their own strategy of great culinary and customer experience rather than competing on promotions.

California Price Increases Impact
Q: How have California price hikes affected consumer behavior?
A: A step-down in spending was observed across California, but it's attributed to a macro impact rather than the price increase. Resistance matched the 100 bps price hike, indicating broader industry trends.

European Expansion
Q: When will unit growth accelerate in Europe?
A: Significant progress has been made in Europe by applying U.S. tools, improving top-line and bottom-line results. Optimistic about proving these markets as investable for faster expansion, similar to growth in Canada.

Marketing Initiatives
Q: How effective are your marketing activation events?
A: Events like the barbacoa promotion effectively increased incidents and are likely to be revisited. Marketing activations, combined with a strong loyalty program, are powerful tools, especially if consumer spending becomes challenging.