Conference Transcript - SG 2026-06-02

Andrew Charles, Analyst — TD Cowen

Good morning, everyone. I'm Andrew Charles, TD's Restaurants Analyst, and I want to welcome everyone to the 10th Annual Future of the Consumer Conference. We're thrilled to have everyone here today and excited to kick it off with Sweet Cream. Sweet Cream features nearly 300 U.S. restaurants and has a mission to build healthier communities by connecting people to real food. This is primarily through salads, warm bowls, plates, and most recently, wraps. Representing the company today are going to be CFO Jamie McConnell, Chief Commercial Officer Zip Ballin, and Head of Investor Relations Anthony Wiginton. And so thank you guys so much for joining us today and thank you as well for helping us kick off the conference. So I want to kick off, you know, just kind of a look backwards that you guys have been vocal that you haven't been satisfied with your same-store sales trends since 1Q25. You know, now you've identified numerous initiatives you're working on to now improve sales trends and obviously had a variable update on your conference call about the path ahead. But maybe just to look backwards, what have you diagnosed to be the key challenges and how have you used that to inform your priorities and initiatives in 2026?

Jamie McConnell, CFO

Yeah, so I'd say we're about two quarters into our transformation plan, and Jason, our chief operating officer, is about a year in, and it turns out that when you go into a restaurant, people want a good experience and delicious food, and those are all the things that we've been focused on. So Jason has been working on one best way, which is really setting the standards across the fleet, and then he's also making sure that we're cooking our food at the appropriate cook times, making sure our chicken is delicious and yummy. And then also leaning into hospitality and throughput so there's been a lot of work being done around throughput And so it used to be that one person would take you down the line But now it's more of that assembly line moving people down the line And so that's really what we've been focused on this year is really leaning into operations Still a long way to go and then we're working on our menu price architecture that goes live in Q2 And I don't know if there's anything else you would add

Zip Ballin, Analyst — Other

Yeah, I would say that when we look at what are the barriers to a consumer choosing sweet grain first, the number one barrier is our price value perceptions. And so we've identified that at the top of the year. And so you've seen us start to really make investments in that, both through our menu innovation and then also through our loyalty and CRM program. So things like pricing of the wraps and expanding the use occasions through price points starting at $10.95, going up to $13.95. And then our loyalty program really getting personalized with how we think about that value.

Andrew Charles, Analyst — TD Cowen

Awesome. So let's talk a little bit about the wraps. They launched just over a month ago or so. Raise of hands. Anyone had the wraps so far? All right. More opportunity. I love it. There we go. Thank you. You know, in the pilot for the wraps, were there specific operational metrics you monitored that gave you confidence that wraps did not present any complexities?

Zip Ballin, Analyst — Other

So, I want to back up a second and just talk about the strategy with wraps. And the strategy with wraps is really about getting more customers to visit us for more occasions. When you think about Sweetgreen, everything comes in a bowl or a plate, and it requires a fork. And so when we looked at the consumer needs across the category and we looked at where we had a right to win with our ingredient quality, with our healthier and quality standards of our food, we saw an opportunity to make that more portable for consumers. So that's the first place. But obviously, when we look at introducing a new category like wraps, there's operational complexity that we need to really take into account. And so our stage gate process, which you've heard John talk about a lot over the last year, has really been instrumental in how we validated wraps as a category. So very early in the development process, we actually went into a restaurant and did an op shakedown. And so what is an op shakedown? That meant that we all got in there from a cross-functional perspective, and we looked at things like where are we going to put the tortilla press? Is that going to be at the beginning of the line, or is that going to be at the end of the line? We had a product principle that the first bite had to be the best bite. And so how do you actually execute that? That means that you need to experiment with mixing and cutting. So we had a lot of internal debate and a lot of just runs down the line of like, okay, how many wraps can we get in in a 15-minute period when we change some of these variables? So we had a lot of learnings going into market test. And then when we went into market test, we went in with three wraps, the chicken Caesar, the chicken jalapeno ranch and then the club and with the club that one was really interesting we had started and tested with a chicken salad which was operationally actually very complex it meant that we had a lot of prep in the restaurant we needed to make the chicken salad every day it was great from a cogs perspective but the consumer wasn't really giving us credit for the level of prep that we had and so what you see in our national launch as of about a month ago we actually changed that and optimized that to just include our roasted chicken so a lot of operational learning went into that so to make sure that we could execute at scale and leveraging our stage gate process to measure what would happen into the restaurants as well as what the impact

Andrew Charles, Analyst — TD Cowen

to consumers would be yeah how should we think about you also did interest in doing the Korean barbecue as well I mean should we think about this is a limited time offering that there's future opportunity as you do seasonal offerings to future lto's or is this kind of a a new a new variety you're going to keep oh with the korean barbecue yeah yeah uh

Zip Ballin, Analyst — Other

so we we tested with three uh flavor profiles and what we found is that the classic chicken caesar for any of you that have had that that is my personal favorite wrap it is uh just that perfect combination it has that great fresh lemon squeeze in that which consumers give us a lot of credit it for. And it is done with that sweet green wink, that sweet green way. The chicken jalapeno ranch, that really meets that bigger eating occasion. It's a rice forward, more of like a burrito competitor. You can think about it that way. And then the club, that really brings together a lot of different flavors. Why we went with the Korean barbecue was we do see an opportunity for us to introduce LTOs and limited time flavors and bring that craveability to our menu through a vehicle like wraps um and so when we looked at the flavor profile going into launch there was an opportunity for us to just extend that flavor profile and get into that craveability more grubby saucy more satisfying flavor awesome and then i'm curious

Andrew Charles, Analyst — TD Cowen

what the load if we tie it together what does the loyalty program data tell you about the wraps customer you know are they substituting salads and other entrees or are they new and laps customers

Zip Ballin, Analyst — Other

bring into the brand i would say it's both so um when we look at our customer data and we looked at this really carefully so we tested wraps in market for over 60 days before we made the call on whether or not we would uh launch them nationally and what we were looking for was incrementality incrementality on the top line and incrementality on the bottom line and from a top line perspective what we found was that wraps yes in the beginning you were seeing consumers kind of trade into wraps as they were noticing them on our menu boards but what you actually found was that it was increasing their frequency and compressing their visit visitation so they were coming to us more often for more occasions the other thing that we saw was when we put a little bit of media against it in the market test and we're seeing this in spades now that we are in from a national perspective is we're seeing incremental traffic we're seeing new customers come into the brand and we saw that in our market test we tested in about 70 restaurants across three markets so new york midwest and la to give us a wide swath of what consumer behavior could look like and then the last thing i'll say is that we're seeing a higher attachment weight with wraps they are more portable they are a different occasion so drinks beverages sides etc and then we are seeing behavior that is maybe bucking some of the patterns that we see in our base business so higher incidents on the weekends higher incidents in afternoon day parts great and then can you compare a little bit

Andrew Charles, Analyst — TD Cowen

more about you know since the since you were launched the national May 6 you compare what you're seeing you know with more advertising around the platform relative to what you saw in kind of initial pilot you know what have been

Zip Ballin, Analyst — Other

kind of surprises that you've seen I would say on social media for any of you that have looked at our tick tock or seen some of the virality of wraps the that has been really intentional in the way that we thought about that campaign so this was our first and biggest really social first campaign we partnered with influencers on a macro level on a micro level on a nano level to really make sure that we got that trial and awareness and what we're seeing is that our social share of voice now that we kind of seated with influencers there's two things that are happening one is you're seeing organic pickup uh and the organic conversation around sweet green pickup and that's leading to a higher share of voice on social so i would say that that's really what has been driving a lot of interest around wraps and particularly that that chicken caesar wrap is

Andrew Charles, Analyst — TD Cowen

doing really well for us get it get it with the blackened chicken i think it's even better when

Zip Ballin, Analyst — Other

you do it that way i don't know i'm a hot sauce girl interesting all right that's right um okay

Andrew Charles, Analyst — TD Cowen

And then you talked a little about this, but just on the topic of menu innovation, talk about the efforts in place to expand sides. Ripple fries were something that were tried a year ago. It was deemed too operationally complex. But it seems like an opportunity for you guys to build tickets. So what other opportunities are there on the sides?

Zip Ballin, Analyst — Other

We see a huge opportunity for not just sides, but you think about desserts, beverages, other attachments. And that is really what wraps as a category opens up for us. But beyond that, there are new occasions that we can open up. When you think about where our peaks are in our business, lunch and dinner day parts, snacking day parts, fries was the right strategy, just really difficult for us to execute. We are going back to our stage gate innovation process where we've got a whole pipeline of development around sides, beverages, desserts that are currently in development, going to be in test soon as we look at expanding some of those occasions.

Andrew Charles, Analyst — TD Cowen

That's great. Zip, you talked earlier about operations, you know, a big focus under Jason and Project One Best Way. Is there a way you can frame up what portion of restaurants are meeting your standards today relative to six and 12 months ago?

Jamie McConnell, CFO

Yeah, so I would say he's about one year into Project One Best Way, and so I would say two-thirds are meeting our standards. However, I'd say step one was getting the operational standards across the fleet, and then really step two, we're starting to raise that bar and layer in some of the hospitality components the throughput so i would say we're still early innings and operations we're happy with the progress we've seen so far but there's still a lot of work to be done very good and where is the lowest

Andrew Charles, Analyst — TD Cowen

hanging fruit operationally you know is it throughput order accuracy ingredient availability

Jamie McConnell, CFO

or something else i would say throughput and hospitality really making sure that when our customers come into our restaurants that they're greeted there's eyes on them and they're smiling They're asking them if they've been to Sweetgreen before, have they tried the Harvest Bowl. Really leaning into the hospitality component is something that we're focused on.

Andrew Charles, Analyst — TD Cowen

Is there a way to think about, you know, the same-store sales differential at stores that are meeting the operational standards compared to those that are still in process?

Jamie McConnell, CFO

Yeah, so there is a gap, and there's also a gap with labor if we have a full staff of labor during that peak hour. So that's really where we're seeing the gaps in the same-store sales.

Andrew Charles, Analyst — TD Cowen

Okay. And then is part of Project One Best Way, I mean, have you seen a notable difference, you know, from instead of having someone take the bullet on the line, you know, and they pass it off, is that a key unlock that you guys have found within the Project One Best Way?

Jamie McConnell, CFO

Yeah, so I would say that we're doing a really good job right now on our digital line, but now it's like, how do we focus on the front line? Because 40% of our guests do come in, so that's a focus that we have right now, is really making sure we have those planted positions during the peak hour, and we have that assembly line bringing them down the line. Okay.

Andrew Charles, Analyst — TD Cowen

Great. And then in the middle of last year, you implemented some portion sizing investments. Have you seen anything that tells you the guest is noticing these?

Zip Ballin, Analyst — Other

Yeah. I would say, you know, one of our number one complaints or one of our top complaints was that portion size. Consumers were telling us that they didn't feel like we were giving them enough. And so Jason and the team, and from a food quality standpoint, we really looked at how do we make sure that we are being generous with our portions and meeting the guests where their expectation is. So we made that investment last year. We did go out with a campaign to tell consumers about that at the end of last year, where we highlighted the realness of our protein, the fact that it is antibiotic-free chicken, and the opportunity to highlight the protein grammage that you get in a variety of our bowls. So we have eight bowls that are over 35 grams of protein right now. And what we're seeing in the consumer is that they are giving us credit for that. so complaints on portion sizing have come way down uh and we also updated our app and our experience to be able to show our consumer what the macros is um in in each one of the ingredients and each one of the menu items so we are getting credit for that okay very good um you know we take

Andrew Charles, Analyst — TD Cowen

a step back the younger consumers since you have fast changing consumer cohort that you guys obviously have a lot of exposure to how have you seen in the health of that younger consumer of all over the last few months?

Zip Ballin, Analyst — Other

I'd say it's really encouraging. So when you think about Sweetgreen as a brand and where we have the most relevance, it is with that millennial consumer that is where the brand started 20 years ago. And that consumer has grown up with us. But we see a huge opportunity to reach a new audience and reach a younger demographic. I don't necessarily think about it in age cohorts. i think about it as like lifestyle or life stage where we need to be recruiting those those folks that are coming out of school that are just getting started on their their adult life and have sweet green be a part of that habit and so with product introductions like wraps with what we've been doing from a social first campaign messaging with what we've been doing with our loyalty program and our one-to-one marketing we are seeing that younger consumer and our relevance with that younger consumer start to gain traction and we've had our sweet green food trucks

Jamie McConnell, CFO

passing out free wraps at all the college campuses so that's been fun to see that's great

Andrew Charles, Analyst — TD Cowen

um okay and then just on the loyalty program can you talk about where you are with the evolution of it you know you guys revamped it uh not terribly long ago what have you learned from that and kind of you know just look forward what other opportunities do you see ahead for the

Zip Ballin, Analyst — Other

loyalty program so we revamped the loyalty program a little over a year ago so we lapped that in april and what we're seeing is two things one moving to a point space program does give us a lot more flexibility to deliver a more personalized experience from a consumer perspective and then we've got a great head of digital growth on the team that has really started to unlock the power of that data so a couple of things that we've been doing i mentioned price value perceptions and how we have a lot of work to do on changing those perceptions with consumers those don't change overnight, and so that takes a really targeted, consistent approach to messaging. We launched our Cravings of the Month program at the top of the year, really to experiment with how we can compress that consumer behavior. How can we drive back those last customers? How can we recruit customers into our loyalty program? And so with Cravings of the Month, we've seen that that has resurrected customers that we haven't seen in over 90 days. It has a compressed frequency with customers that are within our current existing active user base. And we want to make sure that we are doing that in a profitable way. And so as we have experimented with that month over month, we have continued to refine that program. And so now we are using it just to really reengage lapsed customers. The other thing that we're seeing is we're driving signups into our loyalty program. Consumers want the ability to get that benefit on that first transaction and so when we look at our cost of acquisition versus the lifetime or annual value of that customer there's an investment that we're making to get that cost of acquisition and so we've had since the beginning of the year this $5 off on your first order that has been really driving sign-ups for us and driving interest in the program and then the last thing is we have started as of this week you'll see our loyalty program include things like wraps into the program and so giving the customer the opportunity to leverage the loyalty program and get credit so a three dollar credit is going into the reward structure and so we're starting to experiment with how we can drive that frequency even faster yeah let's talk a little about value I mean you guys

Andrew Charles, Analyst — TD Cowen

obviously known for customized bowls you know great ingredients strong portion sizing uh you know i think about wraps obviously it's a it's a lower price point still great value for the money etc you know the 12 cravings of the month you know i guess i'm curious as we look forward here what would you need to see to say that hey you have strong value perceptions you get credit for obviously the value you offer we might see the sun setting something like that versus you know continuing to offer uh great customized portioning um combined with wraps

Zip Ballin, Analyst — Other

obviously a great price point as well yeah with uh with cravings of the month what we see is there's an opportunity for us to just right size that program and so that works really well from a lapsed customer standpoint and then as far as perceptions we are measuring that with our brand health tracking and so we are measuring that not just with our consumers but we are measuring that versus the category because we know that that is one of the key drivers of visitation in the category and then when we look at our price value architecture overall there's an opportunity for us to be more clear in our pricing Jamie talked about our focus on the front line, and one of the key menu items that really drives that value perceptions is our create your own menu item. That is about 25% of our new customer transactions, and right now it's not as great of an experience as it could be for the customer. It's not super clear for the customer what is included in create your own. You've got to pay extra for the protein right now. And it can feel like a nickel and diming experience. And so Jamie and John have talked about this from an earnings perspective. We are getting into test on that menu price architecture, both addressing that transparency on our create your own pricing. As of this quarter, we're going to be in test with that. and then also looking at how we can drive really smart entry prices onto the menu with our chef-crafted bowls.

Andrew Charles, Analyst — TD Cowen

Let's talk a little bit more about kind of the re-architected pricing ladder. You know, we're going to see something later this month. How can we think about how this looks different to what's in place today? And I guess is the goal here to provide more transparency around pricing? Is it to reduce the pricing of the base, you know, for Create Your Own? You know, I'm kind of curious about kind of the vision you have for this.

Zip Ballin, Analyst — Other

You want to go first? No, you just go first. um so it it is to address those price value perceptions but we need to do that in a way that is going to be check neutral and margin neutral so we've done a lot of work in the background to understand what drives those perceptions with consumers we know create your own is a big anchor because that is very comparable across brands for consumers and we also know that we need to do it in a way that is going to be really smart so that we are Maintaining that check average and we are maintaining that margin on the transaction so that is really what we're trying to test in market and then when we look at the overall pricing ladder of the menu we were really intentional with the pricing that we put in place for wraps to make sure that that gave an accessible entry price but we have flexibility to take price across the across the breadth of that that menu offering and so we're looking from a category basis and then we're also looking at how we can invest from a menu perspective and things that will drive check up so attachments beverages uh sides desserts etc and is the plan that um how do you plan to market it as well to

Andrew Charles, Analyst — TD Cowen

tell consumers about this a little bit more i mean is there a way saying starting at blank price point

Zip Ballin, Analyst — Other

or how do you envision it being communicated to guests we've still we're still early days on how we're going to commute that communicate that to guests um as you can imagine we want to make sure that we can signal value perceptions we want to signal the transparency something like protein included in the create your own price point is going to be a big reason to believe that the pricing is more transparent and clearer from a consumer perspective but we'll have more to share

Andrew Charles, Analyst — TD Cowen

on that later great okay um jamie i want to spend some time on margins the guidance embeds underlying improvement in the back half of this year and it sounds like you're attributing this to three factors, including reducing waste, supply chain efficiencies, and labor management. So if we unpack that a bit, on the waste, it was about 140 basic points of a headwind in the first quarter. What efforts are you putting in place to mitigate this going forward?

Jamie McConnell, CFO

Yeah, so I'd say step one has been really giving the field kind of the visibility to the data and the waste. But what's really going to unlock it is the suggestive ordering. So right now we have about 300 head coaches placing orders every single day. and there's a lot of guesswork in that so how do we make sure that we can give them the exact amount of order and so what unlocks that is right now we have a suggestive ordering tool but not all the inputs into that tool are automated so how do we get forecasted sales in there how do we make sure the items that we're prepping are in there and what we've we have a task force working on that right now and what we have found is that these systems are really integrated So we're really trying to make sure that we get this right. So this is something that we expect to launch in the beginning of Q3. But as we've gone down this path, we've realized there's a lot of inputs in there. And we want to make sure that when we roll it to the field that it works. And so that's what we're working on right now.

Andrew Charles, Analyst — TD Cowen

And then you talk about supply chain efficiencies as well on the call. What have you seen so far? And where are there incremental opportunities on this going forward?

Jamie McConnell, CFO

Yeah, so I'd say there's a lot of good work going on. And so really taking a category review and looking at each one of our categories to make sure that we have the best prices. And for areas where we've been a little bit more local, can we have a national brand or supply chain that we can use? So really, it's just been looking at those two items to make sure that we're never compromising on the quality of our ingredients and making sure we're getting the best prices.

Andrew Charles, Analyst — TD Cowen

Okay. And then on the labor front, you're undergoing a labor study. What have you learned so far, and how should we think about the timeline for implementing some of these learnings?

Jamie McConnell, CFO

So the labor study just wrapped up, and we actually have the readout on it next week, so more to share when it comes to the labor study. But the goal with the labor study is not necessarily to cut labor, but to make sure we have the right labor deployed during that peak hour. But then there may be some shoulder periods where we have too much labor, and so really that study should unlock that and then making sure that we're prepping things at the right time so that labor

Andrew Charles, Analyst — TD Cowen

studies should unlock all of that okay great um let's turn now to development you know you talked about needing to get the sales fly a little going for stepping on the gas again in terms of new store development um is there a certain level of same store sales that would make you feel comfortable accelerating new restaurant growth again or can you walk through the psyche around kind of what you need to see before you would accelerate development yeah so we just hired on ryan

Jamie McConnell, CFO

Simmons as a chief development officer so he's what about a month in role and so I think right now he's taking a look at the unit economics and really making sure when we have our build-out costs and that there that there are set build-out costs that were RFP in the supplies etc so that's something that he's working on and when it comes to sales and margin we really want to make sure that we're getting that two-year cash on cash returns that we expect of 40 percent or above and so until we see that we've slowed down growth this year and I expect to be at the same level next year as well as we work to get our transformational plan

Andrew Charles, Analyst — TD Cowen

underway can you talk more about the sweet lane the digital drive you guys have I think you've to an operation yeah okay yeah talk about that prototype is that something you want to see more over is it more that you know this was a interesting test but we're happy with other design formats yeah three excuse

Jamie McConnell, CFO

me thank you yeah so what I would say is in some of those suburban areas so last year we went into Phoenix in Sacramento and then we just actually launched a sweet lane in Irvine but I think what we've seen some of these suburban areas is people like that convenience so I think you will see that

Andrew Charles, Analyst — TD Cowen

when the economics makes sense great okay and now that infinite kitchen technology is owned by wonder you know how do you anticipate this will impact your plan cadence retrofits and inclusion in new stores yes and we still

Jamie McConnell, CFO

plan to open about 50% with infinite kitchen and wonder has been a great partner to us so really with their scale we're hoping that it unlocks um better pricing of the infinite kitchen going forward but it's still a big piece of our model okay um okay and then uh

Andrew Charles, Analyst — TD Cowen

you talked to as well about you know another year of guiding the 50 development including iks what would make you comfortable having a larger portion development being you know in that using that technology going forward you talked about perhaps how wonder can potentially manufacture the cost down a bit uh is there anything else that you're looking for around how you can ramp this up because I know it's been a big aspiration of yours. Yeah so I really say

Jamie McConnell, CFO

it's the hurdle rate so we need it only works in higher AUV restaurants so to the extent we think that we're going to get the higher AUV 3 million plus we will put an infinite kitchen but it really

Andrew Charles, Analyst — TD Cowen

comes down to the economics. Yep. Very good. Okay. Zip I probably should have let off with this but you know you've been in your role almost a year now. Where have you been spending most of your time

Zip Ballin, Analyst — Other

and where do you see the largest opportunities yeah uh it's been such a pleasure to be at sweet green for almost a year and you know you mentioned our mission at the top and our mission is to create healthy communities by connecting people to real food and it's just an absolute joy to get up every day and think about that when you um when you have the high quality food that we have when you have the health halo that the brand has and when that matches up with where the consumer is going and where consumers are eating. There's just a huge opportunity ahead of us. And from the outside, what I saw were really three main opportunities for the brand. The first, we talked a lot about menu. Got to get beyond the bowl. And we are starting to do that with wraps as really the first entry into a new category beyond the bowl. Lots of opportunity for us to do things like even out our seasonality of our business summer tends to be or warmer days tend to be better for sweet green and so how do we innovate from a menu standpoint how do we leverage platforms like we have with plates etc to really start to get into the consumer mindset for different occasions so i'd say that's one the second is price value perceptions and so we've got a lot of work going against price value perceptions both from a menu architecture and a pricing standpoint going to this big test in q2 here but then also on a more personalized basis how do we leverage our customer data through our loyalty program to not just drive those price value perceptions and drive that value for the money how do we tell stories about the brand that help consumers understand that what they are paying for is different at sweet green than it is at uh maybe other competitors out there our food standards our quality are made from scratch is just a totally different model and a totally different value proposition for the consumer and then how we drive that behavior on a one-to-one basis how do we leverage loyalty as a way to incentivize disrupt frequency patterns win back laps customers and invite new customers into a more personalized experience with the brand and then i would say the third one is brand relevance and that's where i get really excited with a background in marketing where the brand has an opportunity to get back to its roots of creating culture, creating new and exciting conversational moments around food and ingredients. And so we're bringing back summer in about a week's time here, and seasonality of our ingredients is a huge pillar of the Sweetgreen brand. Our culinary credentials with collaborations with chefs and thought partners and I guess tastemakers in the category and then an opportunity to just really recruit that younger generation so I'm energized and I feel like to Jamie's point we're we're early innings early days in this transformation there's still so much more work to do but those are the three

Andrew Charles, Analyst — TD Cowen

things that I see as opportunity that's great it sounds like it obviously too On the marketing side, what do you view as the best avenues for how to get the brand out there and communicate the changes? Is it still going to be social-led as well as loyalty? Are there other avenues you think the brand has opportunity to participate?

Zip Ballin, Analyst — Other

Yeah, social is a huge opportunity for us, and we are still very early days in that. RAPS was the first campaign that we really architected to be social first, partnering with influencers in a completely new way for Sweetgreen, where we really invited them in to tell the story with us. We invited them in to collaborate with us. And we were intentional about the influencers that we picked so that we could get a wide breadth of consumer communities out there. There's a huge opportunity for us to get back to more of that community engagement. I go back to our mission of connecting communities to real food. And so how do we do that on a very local level, but then how do we do that on a macro level? And then next year is our 20th anniversary as a brand, so that presents a huge opportunity for us to celebrate all of the things that we've done from an ingredient and a food quality standpoint. You know, you think about something with our wraps platform like the tortilla. Our tortilla only has four ingredients, which is actually bananas in our category. It's flour, salt, water, and olive oil. and when we were developing the tortilla and when we were developing wraps the tortilla became the anchor point for us to really innovate around because we could not find a tortilla that was on the food service market that didn't have a bunch of the artificial gums and binders and all the things that you just don't want in your food and so credit to our culinary and our supply chain team they just pushed and pushed and pushed and so when i think about what the brand can do and what the future of the brand is, we have created a whole new standard for tortillas in the category, and there's so much more that we can do on that.

Andrew Charles, Analyst — TD Cowen

That's great. Jamie, I wanted to also ask, last week, big hire with Cindy Olson as the new chief strategy officer. She's someone the investment community is familiar with, given her time at Chipotle and IR and strategy. I know you two work closely together. Can you talk about the vision for her role at Sweet Cream, especially given that it's a newly created role as well?

Jamie McConnell, CFO

Yeah, so we're very excited to have Cindy on board. So if you think about our transformation plan, gosh, we're two quarters in, a long way to go. But really, Cindy is going to be looking at our long-term strategy and making sure we're sizing the opportunities and really making sure that our strategy is focused on the winning things. So I think that's what you'll see from Cindy is really making sure we're sizing all the opportunities and strategy ahead and making sure that we're focused on the right things to win.

Andrew Charles, Analyst — TD Cowen

Great. We've got about two minutes left. I'll probably just unfortunately end with some boring modeling questions, but let's start first. You know, sales spice, you know, help fortify your balance sheet. This year will still be free cash flow negative, though. I mean, what's the path to getting closer to free cash flow neutral?

Jamie McConnell, CFO

Well, I think right now it's really the transformation plan, but we're really focused on growing that top line. Right. And so all the things that Zip talked about with menu innovation, the price value architecture, that's really our number our number one thing to free cash flow. And then really also looking at our margins, so all the things that we have underway there. But really, we're hoping to drive that top line.

Andrew Charles, Analyst — TD Cowen

And then talk about the pricing lever as well. You know, is this something, you know, within your 2026 guidance for margins or EBITDA that you're considering contemplating? Or is that excluded from our guidance?

Jamie McConnell, CFO

It's excluded from guidance because right now we want to make sure that we're meeting the consumer where they are. And that's why we're excited about the menu price architecture work. so really when we think about pricing it's really that whole value we're getting to consumer that experience that hospitality and then also that price point so right now when we're looking at our mini price architecture that's going in tested the end of June like zip said we're gonna have the entry price in but then there is some elasticity on some other items that we're gonna test and then also that create your own so if that tests okay then I think you'll see a little bit of price there but also some of those entry price end but the goal is to meet the consumer where they are and make sure we're getting those

Andrew Charles, Analyst — TD Cowen

incremental transactions okay last one for me you know you're expecting G&A dollars to decline in 26 relative to 25 from support center reduction sales spice should we think of kind of 2026 as a new base that we should grow G&A off of or do you expect additional efficiencies reduction take place as you look out to

Jamie McConnell, CFO

27 28 etc yeah so I think you will see we expect to lever that over time so that you should see it going down over time okay and so there's a lot of focus on gna and so i would say this year obviously we guided to the underlying support center around 13 so i think as we grow you'll see us lever that okay very good yeah very good thank you

Andrew Charles, Analyst — TD Cowen

all right with only seconds left i want to thank jamie zip and anthony for other time and insights today and thank you for everyone as well thanks thank you