Earnings Call Transcript - JACK Q3 2025

Operator, Operator

Hello, and thank you for standing by. My name is Lacey, and I will be your conference operator today. At this time, I would like to welcome everyone to the Jack in the Box Third Quarter 2025 earnings webcast. Thank you. I would now like to turn the conference over to Rachel Webb, Vice President of Finance and Investor Relations. You may begin.

Rachel Webb, Vice President of Finance and Investor Relations

Thanks, operator, and good afternoon, everyone. We appreciate you joining today's conference call, highlighting results from our third quarter 2025. With me today are Chief Executive Officer, Lance Tucker; and our Chief Financial Officer, Dawn Hooper. Following their prepared remarks, we will be happy to take questions from our covering sell-side analysts. Note that during both our discussion and Q&A, we may refer to certain non-GAAP items. Please refer to the non-GAAP reconciliations provided in the earnings release, which is available on our Investor Relations website at jackinthebox.com. We will also be making forward-looking statements based on current information and judgments that reflect management's outlook for the future. However, actual results may differ materially from these expectations because of business risk. We, therefore, consider the safe harbor statement in the earnings release and the cautionary statements in our most recent 10-K to be part of our discussion. Material risks factors as well as information relating to company operations are detailed in our most recent 10-K, 10-Q and other public documents filed with the SEC and are available on our Investor Relations website. With that, I would like to turn the call over to our Chief Executive Officer, Lance Tucker.

Lance Tucker, CEO

Thanks, Rachel, and I appreciate everyone joining us today. As I've now been back with Jack in the Box for six months, I'd like to take a moment to share my observations thus far. Despite the last six months being some of the most challenging I can recall in my time in the QSR industry, I've been struck by the energy, passion, and grit that I've seen from our teams and our franchisees at both Jack in the Box and Del Taco, giving me even greater confidence that we can and will leverage the many equities at both brands to deliver strong long-term results for our franchisees and investors. I continue to be grateful for the opportunity to lead such an amazing group of people as we work to drive these brands forward. Another reason for my confidence is the excitement generated by our recent entrants in new markets, highlighting the relevance and potential of both brands: Jack in the Box, with fantastic new market openings, including recently opened restaurants in Chicago, while Del Taco entered the Durham, North Carolina market. In both cases, these restaurants are opening with very high volumes and are expected to be excellent performers. I want to thank the operations teams at both brands as well as our newly appointed Chief Development Officer, Van Ingram, and the entire development team for their contributions to these fantastic new market openings. Turning to third quarter results, there were several challenges we had to continue with during the quarter. As many in the QSR industry have already pointed out, the macro environment is very difficult, and consumers remain cautious. Jack in the Box significantly over-indexes with Hispanic guests, who, especially in our core markets, face uncertainty and have pulled back their spending. This issue is having an outsized impact on our sales. In addition, we have seen lower income cohorts pull back as well, in line with industry trends. We are also continuing with some difficult comparisons as we continue to lap successful Smashed Jack promotions from last year, as well as significant price increases by many of our restaurants in 2024 and as a result of California minimum wage increases. Both of these have negatively impacted Jack's growth on a year-over-year basis. As I look at our Q3 results and what is needed to drive better sales performance in spite of the headwinds, we need to get back to our barbell strategy and more specifically provide more demonstrable value to our customers. So we're doing just that as we move through the fourth quarter. Recently, we reintroduced our Bonus Jack combo, a fan favorite at a very compelling introductory price point. In addition, we launched our popular Spicy Chicken Strips featuring a new craveable hot and honey flavor that really resonates with our core guests. Our always-popular Sauced and Loaded Potato Wedges are also back for a limited time. To combat late-night competition and help bolster some of the softness in check, we'll continue to promote our Munchie Meals with culturally relevant collaborations, including our current Munchie Meal featuring Coca-Cola Starlight. As you can tell, our current lineup is strong, and we are investing $5.5 million in incremental marketing across the fiscal fourth quarter to fully support it. A portion of this spending is to overcome the shortfall created by our sales performance in Q3, while the majority is to add media weight so our guests are fully aware of these capable offerings. Long term, the entire guest experience requires improvement in the coming months and years. The value equation has gotten a bit off track across the broader QSR industry, and Jack in the Box is no different. So we need to work on the entire guest experience, not just promotion or price. As such, we are refocusing on three key areas to enable the sustained strength of the Jack brand. We'll do this by getting back to our roots and leaning on our 75-year heritage, which we refer to as Jack's Way. While JACK on Track is intended to quickly fortify the financial foundation for both the company and its franchisees, it comprises structural actions and is not an actual operating plan. In contrast, Jack's Way will be our ongoing strategy for driving a better overall experience for our guests. First, doing things Jack's Way means improving service quality and getting back to emphasizing operational excellence. It’s as simple as getting back to basics. Initially, this means delivering a better experience through improved guest interactions and focusing on consistent service quality across our core menu items, from burgers to our fried offerings. It includes additional training and support for employees at both our restaurant and field levels, and it also includes holding our restaurants more accountable for performance, as well as rewarding them for outstanding work by reintroducing key recognition programs to motivate and recognize our team members in every restaurant. While operational changes don't impact sales overnight, we know these are table stakes for the long-term brand success. That's why we are thrilled to have Shannon McKinney back at Jack in the Box as our COO. Shannon has hit the ground running and is already building a great rapport with our team members and franchisees to improve our system-wide operations. Second, doing things Jack's Way means serving high-quality food at a good value. Recently, we have missed the mark on delivering the value to our guests that they've come to expect. What I like most about the rest of this year is the marketing lineup has a strong balance of innovation and ownable value that will keep guests coming back more often. In addition, we are entering Jack's 75th anniversary in 2026. We are fully embracing the out-of-the-box qualities that make Jack in the Box such a distinctive and iconic brand. While I won't get into specifics, you will see more innovation and improved quality across our core products, as well as the return of some classic Jack throwback products our loyal fans have been asking for. You'll also see acknowledgments to Jack's history in our marketing, including a modern twist on iconic commercials from the brand's past that will feature Jack's irreverent quirky personality in a way that we expect will resonate. These improvements, coupled with the improved operations, will deliver the incredibly hot, flavorful food our guests crave. The third key element of doing things Jack's Way is the modernization of our restaurants. We want our guests to enjoy a consistent experience from our mobile app all the way to the drive-thru. The guest experience has suffered over the years as many of our restaurants have not received timely updates. To remedy this, we intend to deploy a multi-year reimage initiative to touch at least 1,000 additional restaurants beyond our current program. We'll share more plans about this in November as part of our capital planning discussions, but please know I am committed to reviving the Jack in the Box brand stores. Underlying all of our plans around an improved guest experience is a solid foundation in technology. The digital mix reached a total of 18.5% of sales for the Jack brand this quarter. We are pleased with the progress the teams have made in enabling our restaurants with technology and we’re well ahead of schedule in achieving our initial goal of 20% of sales through digital channels. I'm also pleased to announce that as of last week, over 2,000 restaurants now have the new point-of-sales system installed. I want to thank Doug Cook and the IT organization, our ops team, our vendor partners, and our franchisees for installing these ahead of schedule. It has been a true team effort. We anticipate the new POS will be fully rolled out to the entire Jack system by the end of this month. While we continue to see implementation impacts from temporary downtime, we anticipate these impacts will be short-term in nature. Notably, the vast majority of issues we discussed last quarter related to our technology modernization have been mitigated. While there's been a lot of progress, we still have several items on our technology roadmap, with future enhancements to our digital platforms, loyalty program, and data capabilities yet to come. There is considerable long-term upside from enabling our restaurants with better technology. Switching gears, Dawn will speak to the specifics regarding the JACK on Track program and updates, but I am pleased with the progress we've made thus far. There are many puts and takes throughout the plan, and my commitment is to provide as much transparency as I can, knowing that our timing will be challenging to predict. I want to spend a moment on the balance sheet component of the program; we remain committed to reducing our leverage but want to be very clear about why this is a priority. Jack in the Box has a very flexible existing securitization debt structure and is well over $100 million from approaching its debt covenants, so our cash flow easily supports our debt. We simply feel it is prudent to operate with more modest leverage as we move forward, and we also want to mitigate increases in our interest expense as we begin to refinance the various tranches in this higher interest rate environment. Lastly, while there are certainly a lot of activities occurring in Jack in the Box, I want to make it very clear that my number one priority is improving performance at our restaurants to ensure long-term health across the system now and for years to come. Before I pass it over to Dawn, I want to take a moment to acknowledge Dawn's much-deserved promotion to Chief Financial Officer. The stability, consistency, and over 20 years of Jack knowledge she provides gives me great confidence in her ability to drive shareholder value. Now I'll turn the call over to her for her prepared remarks, after which we'll take your questions.

Dawn Hooper, CFO

Thanks, Lance, and good afternoon, everyone. I will start by reviewing our two brands individually, followed by details on our consolidated performance and capital allocation, as well as an update on guidance. Starting with our Jack brand, the third quarter system same-store sales decreased 7.1%, composed of a franchise restaurant same-store sales decrease of 7.2% and a company-owned same-store sales decrease of 6.4%. This resulted from a decrease in transactions and negative mix, partially offset by many price increases. Now looking at restaurant-level performance. Jack's restaurant-level margin percentage in the quarter decreased to 17.9% and down from 21% a year ago, driven primarily by sales deleverage. Food and packaging costs as a percentage of sales were favorable in the quarter, declining 60 basis points from the prior year to 28.6%. This was driven by an increase in beverage funding related to a new contract and menu price increases partially offset by commodity inflation of 4% in the quarter. Labor costs as a percentage of sales were 34.5%, increasing 220 basis points from the prior year. This increase was primarily driven by a California unemployment payroll tax adjustment as well as wage inflation, which was 1.5% for the quarter. Wage inflation was relatively low for the quarter as we lapped the impact of AB1228, and we expect wage inflation to be 2 to 3 percentage points on a go-forward basis. Occupancy and other operating expenses increased 160 basis points, driven primarily by sales deleverage and higher costs for rent, utilities, and other operating expenses. Franchise-level margin was $66.2 million or 39.3% of franchise revenues compared to $74.6 million or 41.1% a year ago. The decrease in dollars was mainly driven by lower sales, driving lower rent revenue and royalties, partially offset by franchise lease buyout transactions in the current year. Turning to restaurant count, there were six restaurant openings and 21 restaurant closures in the quarter, of which 13 were associated with our JACK on Track closure program. Turning now to Del Taco, system same-store sales declined 2.6%, with a franchise same-store sales decline of 2.7% and a company-owned same-store sales decrease of 2.2%. The lower sales were the result of a decline in transactions and mix, partially offset by an increase in price. Del Taco benefited from a strong value promotion in Big Boxes and bolstered check later in the quarter by adding a premium protein promotion in Carnitas. All Del Taco company-owned restaurants have kiosks installed, and we continue to see franchisees increasing their adoption rate as well, including kiosks along with third-party delivery, and the digital mix now makes up roughly 20% of system-wide sales. Del Taco restaurant-level margin was 9.7%, down 370 basis points from the prior year. The margin percentage decline was driven primarily by lower sales and higher costs, including higher utilities, labor, and other operating costs as well as commodity inflation. Food and packaging costs as a percentage of sales increased 100 basis points to 26.6% due to unfavorable menu mix and commodity inflation of 4.7% in the quarter. Labor costs as a percentage of sales increased 100 basis points to 39.6%, primarily due to higher insurance and a California unemployment payroll tax adjustment, partially offset by wage deflation of 0.5% for the quarter. Occupancy and other operating expenses increased 170 basis points, driven primarily by higher utility costs and other operating expenses. Franchise global margin was $6.4 million or 27% of franchise revenues compared to $5.8 million or 27.1% last year. The increase was driven by the benefit of refranchising, early termination fees, and lower IT costs, partially offset by negative sales and higher bad debt expense. Del Taco's restaurant count at quarter end was 585, with three openings and nine closures during the quarter. Moving on to our consolidated results, SG&A for the quarter was $26.8 million or 8.1% of revenues compared to $29.6 million or 8% a year ago. The decrease of $2.7 million was primarily due to fluctuations in the cash surrender value of our company-owned life insurance policies, net of changes in our nonqualified deferred compensation obligation supported by these policies of $2.6 million. Lower incentive-based compensation of $1.7 million also contributed to the decrease. These decreases were partially offset by increases in insurance of $3.3 million. Excluding net COLI gains of $6.1 million, as well as advertising costs, G&A was 2.2% of total system-wide sales for the quarter, and total G&A spend was $25.5 million, which is an increase of $1 million versus the prior year. Consolidated adjusted EBITDA was $61.6 million, down from $78.9 million in the prior year due primarily to the impact from sales deleverage. We reported a consolidated GAAP diluted earnings per share for the third quarter of $1.15 compared to a net loss per share of $6.26 in the third quarter of the prior year. Operating earnings per share, which includes adjustments for certain items, was $1.02 for the quarter versus $1.65 in the third quarter of the prior year. The effective tax rate for the third quarter of 2025 was negative 2.4%, compared to a negative 0.1% for the same quarter a year ago. The lower tax rate in the current year was primarily driven by nontaxable gains from the market performance of insurance products. The adjusted tax rate used to calculate the non-GAAP operating earnings per share this quarter was 26.1%. On the investing front, our capital expenditures were $22.5 million for the quarter and $70.3 million on a year-to-date basis, which included investments in our restaurant technology and digital initiatives as well as the development of new company restaurants. We did not repurchase any shares of stock during the quarter, and as previously announced, we discontinued our dividend. As of quarter end, we had available borrowing capacity of $96.5 million under our variable funding notes, net of letters of credit issued. Our total debt outstanding at quarter end was $1.7 billion, and our net debt to adjusted EBITDA leverage ratio was 5.7x. I'd like to spend a few moments reiterating our JACK on Track plan elements and provide a progress update. As discussed during our April 23 call, our objective is to position Jack in the Box for long-term sustainable growth. Reviewing the primary actions as part of this plan, I'll start with the restaurant block closure program. In Q3, we closed 13 restaurants as part of this program. Five of these closures were company-owned restaurants, and we don't anticipate any more company-owned closures as part of the program. To give you more insight on the roughly 200 restaurants in the JACK on Track closure program, we expect the profile of a restaurant to resemble the following: average annual sales volumes of roughly $1.2 million per restaurant; average annual four-wall EBITDA of negative $70,000 per restaurant, which has been a drag on our franchise operators. The average annual Jack in the Box contribution from rent and royalties to franchise-level margin is $80,000 per restaurant. By closing these restaurants, we expect the health of our franchisees' overall portfolios to improve. We do expect there will be a sales transfer benefit to nearby restaurants, many of which are owned by the same franchise operator. Because we are closing these restaurants over a span of years, the total impact depends on restaurant closure dates. As announced in April, we are on track to close 80 to 120 restaurants by the end of calendar year 2025, and the majority of these have performed more poorly than the averages I just outlined. As it pertains to real estate sales, we did not sell any real estate in the third quarter. We expect to sell real estate with proceeds of at least $100 million, most of which will occur within the next fiscal year. On the last component of JACK on Track, the Del Taco strategic process, we have good interest and are progressing through the process. Ideally, we will have news to share with you by the end of this calendar year. Lastly, we have updated our outlook for the remainder of fiscal year 2025. These are updated from our April JACK on Track call. As a reminder, we do not include the impacts of future JACK on Track activities in these estimates. On a company-wide basis, we expect total capital expenditures for the year of $85 million to $90 million. We do not plan to repurchase any additional shares beyond the $5 million that was repurchased in the first quarter. Our tax rate expectations remain the same at about 26%. We expect SG&A spending of $155 million to $160 million for the full year, which includes the $5.5 million in incremental marketing spend in the fourth quarter that Lance mentioned, but does not include any COLI gains. We expect G&A as a percentage of system-wide sales, also excluding COLI gains, to be roughly 2.3%. Depreciation and amortization are expected to be closer to $57 million to $59 million for the full year. We expect adjusted EBITDA of $270 million to $275 million, which includes the $5.5 million in incremental marketing spend in the fourth quarter. We expect operating EPS of $4.55 to $4.73. For Jack in the Box specifically, we expect same-store sales to decline in low- to mid-single digits, consistent with our expectations from April. We anticipate 30 to 35 gross restaurant openings and a restaurant-level margin of 19% to 21%. This includes the full-year impact of AB1228, as well as higher costs for utilities and low- to mid-single-digit commodity inflation. We look forward to sharing our outlook for fiscal year 2026 on our upcoming earnings call in November. In closing, we expect the JACK on Track program to set the groundwork to improve the long-term financial performance of the company. As we refocus on our customer experience, from improving the value equation to modernizing the image of our restaurants, we expect to return to Jack's Way of delivering best-in-class results. We look forward to speaking with you again in November when we release the fourth quarter results and set expectations for fiscal 2026. Thanks again for your time this afternoon. Operator, please open the line for questions.

Operator, Operator

Your first question comes from the line of Brian Bittner with Oppenheimer.

Brian Bittner, Analyst

Two questions. First, is the guidance for Jack in the Box same-store sales down low- to mid-single digits for the fiscal year, it does imply a very wide range for the fourth quarter. So any help on the rate of change we should be expecting relative to Q3's performance would be helpful, particularly given the incremental advertising you're deploying in Q4. If you could kind of help us understand what that's going to be used for specifically?

Lance Tucker, CEO

Sure, Brian, it's Lance. On Q4, what we're really doing is pivoting to a little bit better value. The first several weeks of the quarter were difficult because we were still in kind of the same window that we were coming out of Q3. But then when you look at what we've seen for the last couple of weeks since we rolled out the new window, we've rolled out very attractive price-pointed combo in our Bonus Jack. We have also rolled out our Spicy Chicken Strips with a really good new flavor in hot honey. We also are rolling out Sauced and Loaded Potato Wedges, which is a fan favorite. We're bringing those back for a limited time, continuing to pulse in Munchie Meals, which is one of our best-performing products. Right now, we have a collaboration with Coca-Cola Starlight. We're going to put the media weight mainly behind the Bonus Jack combo. And so again, that's price pointed. I think that's been a little bit of a miss for us throughout the quarter. We didn't have quite enough price point of value. So as we look to Q4, what I'll tell you is that the first few weeks started off a little rough, but the last couple of weeks have looked much improved. We definitely think we're on the right track. And I think the theme is going to be we probably need to look at a little more price-pointed value, a little more consistent value honestly, and making sure it's visible by being on the menu board, which we're also doing, which we don't always do when we do an LTO.

Brian Bittner, Analyst

Okay. And my follow-up is just on the JACK on Track strategy and specifically the real estate sales of potentially $100 million over the next fiscal year. How did you decide on that dollar amount figure without knowing the final result of the Del Taco strategic review? I was assuming that the Del Taco dynamic could impact the amount of real estate sales you may have been targeting. So if you could just help us better understand the $100 million and how that got constructed?

Lance Tucker, CEO

Absolutely. The way you should think about that $100 million is kind of an at least $100 million. We're going to use the real estate sales as really a balancer. We'll see where the Del Taco process lands. We'll also see what cash we're able to accumulate via other means, a little bit less CapEx spending, etc. We know we'll want to sell at least $100 million of real estate, and then beyond that, we'll kind of wait and see.

Operator, Operator

Your next question comes from the line of Gregory Francfort with Guggenheim.

Arian Razai, Analyst

This is Arian Razai for Greg. Lance, with Shannon McKinney coming back to Jack, what do you think you can bring or change operationally? And then I have a quick follow-up on income cohorts. It seems like the low-income consumer has been struggling for the last two, maybe two and a half years. And the mid-income consumer for the past six to eight months. Can you provide more color on what you're seeing at Jack within these two and how it tracks over the recent quarters?

Lance Tucker, CEO

Sure. Let me start with Shannon. We are thrilled to have him back. He used to be in the system many years ago in a senior role at that time as well. What you'll see Shannon bring back is a real focus on operations. Specifically, we're going to get back to the basics on some things where we really were falling a little short. For instance, things like friendliness and ensuring some real basics are taken care of in our food prep. We're also going to hold our franchisees and ourselves as the company operators more accountable. Shannon will be leading that charge. Just in the first month or so that he's been here, he's already been out in several of our major markets, spending the last couple of weeks in 50 or 60 restaurants in Texas and on the East Coast. So he's been all over the place and is bringing that field-based leadership and driving results.

Ryan Ostrom, Chief Marketing Officer

I think the only thing to add is, we have a higher propensity for the Hispanic communities. We have to work on how we bring that customer back in as well.

Operator, Operator

Your next question comes from the line of Jon Tower with Citi.

Jon Tower, Analyst

Great. I was just wondering if you could discuss the pivot to doing more value in the fourth quarter, and you outlined a handful of the LTOs that are coming to Bonus Jack and Spicy Chicken Strips. I'm curious how you can get the franchisees bought into a more consistent, ongoing everyday value menu and messaging around that beyond these LTO windows. Is that one of the efforts that you're hoping to pursue going forward?

Lance Tucker, CEO

There are a couple of things to say, Jon. First, we are taking a fresh look at our menu architecture and overall pricing. We're engaging a third party to assist us. The first thing is to ensure our menu is constructed correctly. We don't have enough entry-level items if you think about a good, better, best structure, so we'll be looking at that. Regarding how to get franchisees on board, they understand the need to bring customers back in, which is evident by our slowed customer pace. We're focusing on profitability while balancing when and where we do add more value and ensuring that transactions remain profitable.

Jon Tower, Analyst

Understood. And regarding the size of the menu, is that part of the discussion as well?

Lance Tucker, CEO

A lot of our brand equity at Jack in the Box comes from variety; we offer a range of options for different audiences. We need to ensure we're examining our menu carefully, but it is a tough task because so much of the equity relies on variety while attempting to make it simpler in the back of the house.

Ryan Ostrom, Chief Marketing Officer

We have a strong entry-point value around Munchies under $4, but our combos are mostly priced at $10 or more. We're trying to create ownable value on the menu between that $4 price point and the $10 price point. This is where you see us working on this value creation.

Operator, Operator

Your next question comes from the line of Teddy Farley with Goldman Sachs.

Dawn Hooper, CFO

Yes. We only give specifics for company restaurants, but for Jack Company, same-store sales were down 6.4%. That included transactions down 6.6% and price of up 2.2% with mix down 2%. On the Del Taco side, company sales were down 2.2%, with transactions down 5.2%, mix unfavorable at 1%, and price up 4.1%.

Operator, Operator

Your next question comes from the line of Jim Sanderson with Northcoast Research.

James Sanderson, Analyst

I was hoping you could update us on average weekly sales trends in Salt Lake City and Lexington, Kentucky, and how they compare to the new store openings you've seen in Chicago to date?

Lance Tucker, CEO

We won't give the exact numbers, Jim, but I can tell you Salt Lake continues to perform very strongly. Chicago has opened at levels above where both Salt Lake and Lexington are today and has been a very strong opening overall. We do have three restaurants up, and we actually plan to have eight within about a two-month period. So we’re excited about the early results in Chicago.

James Sanderson, Analyst

I had just one other follow-up question on your commentary regarding low-income consumers in Hispanics. Can you provide any insight into what share of traffic those groups drive for Jack in the Box?

Lance Tucker, CEO

We significantly over-index on the Hispanic consumer, at least 1.7 times the general industry. In some cases versus major competitors, it's twice as high. The lower-income consumer aligns more similarly to the rest of the industry. I can't provide exact percentages of what they represent in our sales base, but that gives you a feel for our competitive standing.

Operator, Operator

Your next question comes from the line of Chris O'Cull with Stifel.

Ella Zhou, Analyst

EBITDA was better than expected with comps down 7% at Jack. Can you help us understand the sensitivity of Jack's restaurant margin to a 1% change in comps? And then I have a follow-up question.

Lance Tucker, CEO

Give us a moment; we're looking up some numbers.

Dawn Hooper, CFO

It would be 10 basis points based on a 1% change in the comp.

Ella Zhou, Analyst

Great. Is there a risk that the soft sales would impact the timing or sequence of the JACK on Track plan?

Lance Tucker, CEO

No, there really isn't. While we prefer not to execute some things in a down sales environment, the downturn hasn't been so severe that it's impacting our JACK on Track program. Importantly, closures happening over four to five years mean that EBITDA impacts will leak over a significant number of years. The same goes for real estate sales, which will have little EBITDA impact throughout 2026. So, nothing in the current environment would slow down what we're doing for JACK on Track.

Operator, Operator

Your final question comes from the line of Jake Bartlett with Truist Securities.

Jake Bartlett, Analyst

Mine is on the operational improvements that you're targeting in Jack's Way. If you can, maybe frame the opportunity: where are some key metrics currently compared to where they were a few years ago? How much opportunity do you see there, whether in speed of service or customer satisfaction? I'm trying to understand the potential for growth here.

Ryan Ostrom, Chief Marketing Officer

When we evaluate the operational opportunities under Jack's Way, it's really about going back to the basics, as Lance mentioned. A key driver of guest experience and satisfaction will be accuracy and friendliness in our execution at stores, which we will focus on for the next six months. Making sure we deliver consistent quality in core items, such as fries and burgers, is another one of our ongoing objectives.

Lance Tucker, CEO

We have been consistent amid the challenges faced recently. The customer trajectory has not shifted dramatically. Our footprint in regions like California and Texas speaks to our resiliency continuing forward.

Operator, Operator

This concludes today's question-and-answer session.

Lance Tucker, CEO

Thank you, everybody.

Operator, Operator

Thank you for joining the call. You may disconnect.