Operator: longer more profitable sweetgreen over the long term with that I'll turn the call over to the operator to begin Q a operator at this time I would like to remind everyone in order to ask a question press star then the number one on your telephone keypad and your first question comes from a line of John Tower with City please go ahead
John Tower: Hey, great. Thanks for taking the question. I guess maybe thinking through the comp guidance that you offered, it sounds like you're not going to be taking much price on the year, if any at all. But can you help us think through the puts and takes with respect to comp growth? I know you provided the cadence, but what you're expecting for timing, say, of wraps if they make it through the stage gate process in terms of when they may come through the year and any other drivers to the top line as you're thinking through the business for 26 and beyond.
Jamie: Yeah. Hi, John. This is Jamie. We expect, like you said, guidance between negative four and negative two. And so we've had a really choppy beginning of the year with the storms, January and February. However, we have seen a couple of really good weeks. We're being conservative, giving the economic backdrop, but we're excited about all the things that we have in place. And then we're also excited if wraps do well in tests, which is looking great, that they do launch in Q2. Okay.
John Tower: And in terms of pricing, do you plan on taking any more or taking any during the year?
Jamie: We're being cautious, given the consumer backdrop, but we'll reevaluate throughout the year. But that's not in our guide.
John Tower: Okay. And then just last one, in terms of thinking about the building blocks to returning store margins to kind of that high teens, low 20s rate, obviously sales are going to be a key component in it. But can you speak to any specific cost levers that you have already pulled or plan to pull in 26 to kind of, you know, work with you guys as the sales begin to improve?
Jamie: Yeah, so there's a lot of things that we're working on for margins. So sales leverage is obviously going to be the biggest piece. But there's also some operational inefficiencies that we're working on. And one example would be around optimizing our order system for our team members to make sure they're ordering the right items. And we're taking the guesswork out of it. So we're looking to streamline that tool and making sure we get rid of all those manual inputs so we're ordering correctly. So we do see some opportunity there. We also see opportunity within our supply chain, streamlining and doing some supplier diversification.
Jonathan Neman: Yeah, and John, the only thing I'll add to that is we've continued to see encouraging signs around our ability, our head coach stability and reducing turnover. And we know when we get stable head coaches and reduce turnover, we have more productive teams, which also leads to higher margins. So, you know, obviously sales leverage will be the biggest component, but there's a number of operational moves that we're putting in place that, you know, even without any sales leverage, we do have some margin gains to go for. Thanks for taking the questions. Thanks, John.
Operator: Your next question comes from the line of Rahul Crow with JPMorgan. Please go ahead.
Rahul Crow: Good afternoon, guys. Can you discuss how the rollout of the Project OneWay, maybe the first iteration, understanding this is an ongoing process, is progressing? And specifically, can you share some metrics maybe on store performances for the cohort of stores where the rollout has been the earliest, either a margin side or anything else to give us more confidence that we are at the inflection, we are closer to the inflection, and I have a follow-up.
Jonathan Neman: Absolutely. Hi, Rahul. So, we're very encouraged by the work we're doing from an operational excellence perspective. You know, huge shout out to our operations team and our field leadership. We've instituted Project One Best Way. And, you know, over two quarters, you've seen the restaurants that have been scored great through our internal audits double just in two quarters. We do see better comps and better return rates of customers in those stores as they perform better on those operational metrics. And those operational metrics are everything from, you know, our standards and process, but a lot in terms of hospitality and food quality as well. So they're very in-depth studies. We're going to continue pushing on that with a huge focus as we look forward, not only on throughput, but on hospitality and continuing to elevate our food quality. One thing that we talked, you know, I mentioned earlier in the prepared remarks was around a lot of the moves we made around the quality of many of our core items. So we, you know, we talked about the salmon where we've increased We've elevated the quality of the salmon through some of our culinary techniques, and we've seen salmon, as an example, increase its velocity by almost 20% as we've done that. Similarly, we've upgraded how we season the rice. It's much more delicious. If you haven't tried it, I highly recommend. And we've upgraded our quinoa from a kind of a classic plain quinoa to a golden quinoa, and even changed how we cook our chicken in terms of the cycle time of how often we cook it and the way in which we cook it to be juicier. So a huge focus on the guest and the product and elevating that. And we know when we do that, customers become more loyal and stay with us longer.
Rahul Crow: Thank you. And then reducing complexity is something you mentioned again in the prepared remarks. Can we revisit this topic on what the top priority areas here in the store for 2026 and what kind of changes or impact we should see?
Jonathan Neman: In terms of what we actually do in the restaurant?
Rahul Crow: Yes, on the complexity reduction.
Jonathan Neman: Yeah, we're constantly looking at tools and processes as well as what we do in restaurant and where we can leverage value-added partners to make the work easier in our restaurants. Again, given our food ethos and focus on made from scratch, we're very, very careful on this. So one of the big rollouts last year was around de-stemmed kale as an example. We should see continued efficiencies from that. There's a number of other opportunities, whether it be how we cook our steak is one thing that we're looking at. Chicken protein marination is another one we're looking at, and we're constantly looking at which dressings and sauces could be upstreamed as long as they can be upstreamed in line with our values. So we've really built this commercialization muscle over the past couple of years, and we will continue to lean into that to make it easier for our team members to work in store, lower the prep hours, and move more of the hours to focus on hospitality and the guest experience.
Brian Bittner: Thank you.
Operator: Your next question comes from the line of Brian Bittner with Oppenheimer. Please go ahead.
Brian Bittner: Thank you. You know, as it relates to the trends in the business, I realize the storms have had a huge impact, obviously, on the first quarter for the industry, and particularly you, given where your store base is. But have you attempted to perhaps strip out that headwind and think about the underlying trends and what those look like? Or do you have an estimate, perhaps, of how big the impact from the storms could be for the first quarter so we can try to better think about the trends in the business?
Jamie: Yeah, so January and February are choppy. The impact of the storms to date is about 320 basis points, but that does not include this latest storm where we have a little over 100 restaurants. So it's really hard to read the first quarter. What I can tell you, given our Northeast densification, but what I can tell you is the weeks where we're not seeing Any weather, we are seeing some momentum in the business, so that's been great to see.
Brian Bittner: Okay. That's helpful. And just my follow-up question is related to the restaurant margin guidance for 2026. Maybe you can help unpack how to think about maybe the COGS and labor line items. They've obviously been large sources of deleverage looking backwards, but I think in order to get to the guidance for 26, we need much more stable performance in those two line items, but you're not taking much price and you are anticipate comps to be down two to 4%. Can you maybe shape expectations for the building blocks of that restaurant margin guidance?
Jamie: Yeah, absolutely. So about half of it is, a little over half of it is sales deleverage, but then we do see opportunities when it comes to making up that protein portion. And that's through supplier diversification and some refinements that we're doing in the supply chain while making sure we keep the quality in our delicious ingredients. And then also a lot of it's related to these operational inefficiencies. Jason's doing an awesome job with the team, but what we're realizing as we go out into these restaurants is that we're making things complicated for our team members. So it's really been a focus of getting into the restaurants and seeing how we can make their life easier. And so one of them was that predictive ordering tool that we're implementing and optimizing. So I think that that's probably going to be the other half is more of the supply chain initiatives and the AVT.
Jonathan Neman: Yeah, if I could just add one thing, you know, we did put in a new labor management tool last year, our new workforce management, and we're continuing to optimize that and make sure we have the right labor at the right time in order to capture sales, but also really just not wasting labor, reducing overtime. And so, you know, a number of levers for us to pull around operational efficiencies.
Operator: Yeah.
Brian Bittner: Thank you.
Operator: Your next question comes from the line of Brian Mullen with Piper Sandler. Please go ahead.
Brian Mullen: Thank you. Question on the RACs. I think this is something you've been contemplating for a long time. Is there a way to maybe frame up how big of an opportunity this could be, even qualitatively, including as a customer acquisition tool if you get the product and the operations right? And then separately, you know, are you viewing this as a digital only offering, um, or is this something you can envision, you know, walking the line and being able to order as well?
Jonathan Neman: Absolutely. So we're very excited about wraps. It's something we've been working on for a very, very long time. Um, probably two years, two years of, uh, of product development, getting everything perfected, both the flavors. getting the supply chain ready to have a really clean wrap, and of course, perfecting the operation. We went instituting our new stage gate process. We went into our rapid ops test in January in eight stores in Los Angeles. The main question we had was, how is it going to impact our restaurants operationally, specifically any impact to throughput? I'm very confident that it will not be a drag on throughput, and that was the big question. We've now moved onto a market test with about 68 restaurants featuring wraps started about a week ago. Results have been really encouraging. We have seen incidents tick up almost every day since launch. The feedback we've gotten from guests is phenomenal. It is really hitting a new occasion and in many ways a new customer. If you look at the addressable market, you know, wraps, handhelds, there's, you know, a huge segment of the population with it being a bowl-only concept that we were not capturing. So this opens up the aperture a lot for the type of customers and occasions, uh, the type of customers and occasions that, uh, that we can see. Uh, the last thing I'll say is, uh, you know, we, we have, we have, uh, we, we talked about in the prepared remarks, but wraps will all be sub $15 starting at 1095. Uh, so I think really disruptive from a price perspective. And the other thing we, we see is when people are, you know, coming in at those lower prices, their second order rates are significantly higher. So we expect to see the lifetime value or the annual spend of guests increase as we do that. So overall, very encouraging, still perfecting things, getting ready for a mid-year launch as long as it passes stage gate. But we do expect wraps to be a really big moment for us. We will put significant marketing around it. And I'll say I think it's going to be a huge moment for the brand. Okay, that's great to hear. I didn't answer your question. Your last part of it was, will it be digital only? No, it will be available on all channels. So today, even in test, I encourage everyone to go try them and please share your feedback. We have three wraps today. We may expand the lineup, but they're available across all own channels. Eventually, we'll be available on all channels, including Marketplace. But for right now, they're available both in-store, on pickup, and through our pickup channel. Okay, that is exciting. Thank you.
Brian Mullen: And then a follow-up, just a question on development. Maybe you could just talk about what the team is focused on beyond this year. You know, I know given the lead times, you'd normally be focused on 27, 28. Maybe you don't want to sign as many leases as you normally would, you know, right now. So just talk about how you're managing striking the right balance of slowing down now but not having a gap later in the pipeline if you want to accelerate.
Jonathan Neman: Yeah, that's, that's pretty, I mean, you kind of nailed the approach. It's, it's making sure we have a healthy pipeline. So we have the optionality, uh, to speed up as comps improve and we feel good about the unit economics. However, keeping it, uh, you know, not necessarily sign committing to too much, um, to, you know, make sure we're disciplined from a cash perspective. We've learned a lot about where, where sweet green really works. We do have a really, really solid pipeline. We feel very confident about for this year. and do have a really solid pipeline built for 27. But, you know, really kind of taking a wait-and-see approach in terms of signing too many deals as we really perfect the unit economics in the business. Once we do see comps start, you know, turn positive and the flywheel starts going, we do expect to begin to accelerate development back to our previous algorithm. Thank you.
Operator: Your next question comes from the line of Dennis Geiger with UBS. Please go ahead.
Dennis Geiger: Great. Thanks, guys. I wanted to touch on loyalty a little more, if you could share a bit more on what you saw in the quarter, including the impact to the comp in the quarter first, and then just anything else on the customer observation, including those most frequent guests, how they're using the program, where they are right now versus the old program, if any updates on that front. Thank you.
Jonathan Neman: Yeah, absolutely. So overall, the program is doing well. We're continuing to see weekly year-over-year growth with the new members signing up to the program. We do see, you know, loyalty members on an annual spend at more than two times non-loyalty members. So it is definitely working. However, we also see a lot of opportunities. So there's a lot of, you will see kind of a re-envisioning or an optimization of the program later this year. things like improving perks, adding tiers, boosting benefits of the program. You know, for example, that we need more options at lower tiers. And then we also are seeing a lot of opportunities in how we can leverage AI and personalization around offers and communications, which we think will improve our targeting and continue to drive frequency. So overall, feeling pretty good about the program, but more optimizations coming to really make it a best-in-class program. The best thing about this versus the sweet passes is much more broadly appealing. Last thing I'll say is, you know, we introduced scan to pay in our restaurants last year. And I think we may be one of the, maybe the only restaurant that allows you to scan and pay with a single transaction. And that percentage inside of our restaurants has doubled over the past two quarters. So we're now seeing about 20% of in-store transactions. being a scan-to-pay transaction. And again, those are more customers that we can target with communications and offers.
Dennis Geiger: Great. And then just if I may, one more on IK. Just as it relates to the higher AUVs that you called out, any additional comments there, high-level quantification, or perhaps anything on throughput metrics, et cetera, on the IK side of things? Thank you.
Jonathan Neman: Yeah, IK continues to be encouraging. We're seeing similar results that we've talked about in the past, at least 700 basis points of leverage. We did introduce our newer formats with the IK, much better from a customer experience perspective and from an operations perspective. And so we're going to continue to have that as a huge part of our toolkit. We opened two more stores with Infinite Kitchens this year in Q1, so we're up to 32 stores featuring the Infinite Kitchen. We continue to see the benefits around throughput, accuracy, wait times, and over time, we think that also gives us a lot of pricing power. So, very encouraged by the IK, and we'll continue to use it, especially in our more high-volume locations.
Dennis Geiger: Thanks, Jonathan.
Operator: Your next question comes from the line of Sarah Senator with Bank of America. Please go ahead.
Sarah Senator: Oh, thank you. I guess maybe just two follow-ups. One is on the wraps. What is the implication for maybe operational complexity? I think to your point about bowls, even the protein plates probably looked kind of similar in terms of the build or how they went down the make line. But is this going to add complexity? And I guess it sounds like probably not something that you can use the Infinite Kitchen for. As you're stage gating, I assume you're looking at the operational implications, but just anything you can say on that.
Jonathan Neman: Absolutely. So that was the major focus of our testing. So even before our rapid ops testing, we did a lot of testing in single restaurants where we brought team members together, worked together to co-create the operation. Things like where does tortilla placement go? How does the food move down the line? You know, one of the things that we heard from customers in a lot of our surveys and focus groups was the product is better when the ingredients are mixed before wrapped and the product is better when the wrap is cut. And so those were things that we wanted to ensure we brought to market. And luckily, we did a lot of hard work from our operations team. Those are things that we've enabled and are not seeing any slowdown on throughput. We do not expect any additional labor needs. in order to do it, it really works beautifully within our current workflows. And it actually does work with the IK. The Infinite Kitchen does put together all of the ingredients and our team members wrap things up on the finishing station. So it actually works beautifully in those locations as well.
Sarah Senator: Oh, okay. Well, that's good to hear. And I guess then the second question was about some of your comments about marketing and value. And I guess you did You did invest in value in the fourth quarter, and I think you said you saw some initial good reactions, but then obviously I think the quarter didn't end up where you had hoped. So is there an opportunity here to not just maybe improve the value proposition, but improve how you communicate it? I don't know if it's something beyond what you do with the loyalty program or the in-app marketing or just anything you have in terms of thinking about whether the communication maybe could be more effective, as well as just the more like introductory price points.
Jonathan Neman: Yeah, so we see a lot of opportunities there. And, you know, we ran a lot of tests and pilots over the past six months to better understand the price value equation, how that resonates with customers. So one was our Tis the He's $10 Tis the Season Harvest Bowl, where we saw, you know, incredible reactivation rates, great customer acquisition. Interestingly, the, the reorder rate, you know, holding those customers was really high. So very encouraging is, you know, that brought people into the brand and then they stayed with us past that promo. We followed that up this year with what we're calling our craving of the month, which is a, you know, it's a value offering only for loyalty members. So it really works in that loyalty flywheel of bringing people on the brand. And again, what we're seeing. is not only are they coming, many people are reactivating or elapsed customers are reactivating or new customers are joining with it. But again, they're not just ordering there, they're sticking with us. But there's a lot more work we're doing on value. Wraps is something we've talked about with anchor pricing on wraps. But in the prepared remarks, I mentioned a lot of the overall price value architecture work that we're doing. We are going to test a new pricing structure for our make your own bulls. And we are also looking at our pricing ladders and where we have our opportunities for more entry level pricing. Of course, we want to be very careful not to dilute our margins as we do this. But what we've seen is having different options for different groups of consumers. Ultimately, Sweetgreen's mission of connecting people to real food, we want to democratize real food and make it accessible to all. And so these pricing ladders give options for all different types of consumers. And you'll see a lot more work on On the price side, at the same time, you're going to see a lot more work on the, you know, offering more value. You know, last year we increased our protein portions. We've upgraded a number of our ingredients and we're, we're improving the experience in our restaurant. So the combination of those together, I think we'll start to really, um, really start to get that flywheel of growth going for us. And we've seen some really, really encouraging early signs.
Sarah Senator: Okay. And then just the marketing question is sort of more, you know, that sounds like you have a lot of initiatives. You know, is there a, do you think about a contemplation of maybe marketing outside of just the app more broadly, you know, maybe to your, the, the more infrequent customers and people, you know, I don't know if it's a point of purchase or how you do that. I know you're relatively small, but just, um, I guess my, my question was more, you have good value. Um, you know, is there a way to communicate it more broadly?
Jonathan Neman: Yeah. Yeah. I think you'll see, I think you'll see more, more of that from us, um, across many of our channels. I think you'll also see, you know, we've, we've reevaluated our marketing mix. You know, we spending a lot of our, a lot of our money, lower funnel. And I think we'll, you'll start to see more top of funnel brand awareness. We know as we do that, as we create more brand salience, it actually improves our return on ad spend lower in the funnel. And if you go back to kind of what made sweet green, you know, going back to our roots, it was really a lot of that brand marketing and storytelling. So I think you'll see a healthy balance of the brand marketing top of, you know, top of funnel brand awareness, you know, things like collaborations and ways we play into culture, as well as getting really efficient, optimized bottom of bottom funnel, whether that be, whether that be our media spend, and or what we can do through our own channels in our in our loyalty program. So You know, kudos to our marketing team really reinventing how we go to market and speak to more guests, and I think you'll only see that improve throughout the next couple quarters.
Sarah Senator: Okay, that makes a lot of sense. Thank you very much.
Operator: Your next question comes from the line of Brian Harber with Morgan Stanley. Please go ahead.
Brian Harber: Yeah, good afternoon, guys. Are you still doing IK retrofits at this point? I guess I'm just curious because that's, you know, clearly something that kind of reduces complexity, or is that not a focus at this point?
Jonathan Neman: It's not a huge focus for us. We have done a handful of them. You know, I think we will continue to look at them as leases come up, you know, when we're doing full renovations or relocations. So, for example, in the past few months, we did relocate two stores, one being our Union Square restaurant that the lease was up. We moved to a better location. on the avenue and opened with an IK. Similarly, our first New York store at the Nomad moved across the street and opened it with an IK. So you'll see it being done selectively, but the retrofit is not a huge focus for us right now.
Brian Harber: Okay, got it. And just the slight change to store openings this year, you know, are those just getting delayed or, you know, you haven't sort of signed some of those leases anywhere? I guess like the broader question is, you know, are you sort of, you sort of have different views about where it makes sense to open at this point?
Jonathan Neman: You know, I think we've seen a lot of success in our new and emerging markets, I think, which proves the TAM question this year. You know, in the past couple of quarters, we opened new markets such as Arkansas, Phoenix, which is doing incredibly well, and even, you know, a place like Cincinnati. So you continue to go where we know it works. We're really trying to open really places where we have a high degree of confidence, where we can both have the right real estate, have the people leadership there, support it from a supply chain perspective. And so we have a high degree of confidence in the pipeline for this year, and we've gotten just a lot smarter about where to put new locations in what formats. I also had it in the prepared remarks, but we have seen a lot of success with our suite lane. We have our first one in Schaumburg. We opened another one in Costa Mesa. We have another one coming very soon, and obviously those are harder to find, but it's a really great format for us that we're continuing to lean into.
Operator: Your next question comes from the line of Andrew Charles with TD Cowan. Please go ahead.
Andrew Charles: Great, thank you. Jonathan, with your greater focus on protein and fiber as part of the marketing efforts, is there any evidence that your efforts are resonating with GLP users via your loyalty program or any other data you can collect on this? And then I have a follow-up.
Jonathan Neman: You know, it's hard to say because our users don't tell us that they're on GLP-1s. So it's hard to say, but clearly, you know, many people are. What I can tell you is, you know, I do think we would be, we would long-term as JLP1 adoption increases, we will be a beneficiary, you know, from all of our research as people get on JLP1s, they want more protein dense, they want fresher food. And, you know, I think, you know, I think William Blair put out a study a lot, you know, a couple of years ago about, you know, actually studying which brands what customers want to eat once on JLB1s. And I think we were the only one where actually frequency increased. So overall, we do see it as a tailwind, but we have no real evidence of it in our current data.
Andrew Charles: Okay. And then, Jamie, I know in 2025, you know, the brand closed three restaurants that were near the end of their lease. And I'm curious if you had enough time in your role to review the portfolio to identify stores where It might make sense to be closed stores permanently before they're in the lease term as a way to improve same-store sales, margins, and free cash flow as a way to help accelerate the turnaround.
Jamie: Yeah, no, we definitely are looking at that. And there was one that was closed in Q4, and we have a handful that are closing this year. But those are all near the lease term. But absolutely, we're looking at the whole portfolio. And the ones that are not cash flow positive, we're taking a hard look at.
Andrew Charles: Thank you.
Operator: Your next question comes from the line of Chris Carroll with KeyBank Capital Markets. Please go ahead.
Chris Carroll: Hi, thanks for taking the question. So can you maybe talk to the digital mix growth that you're seeing more recently, both across total and owned channels? Is that a function of increasing loyalty engagement or scan to pay or Is it maybe driven by non-digital customers reducing frequency? And if it is that latter guest, how do you plan to reengage those non-digital guests?
Jamie: Yeah, so I will say that we're seeing some healthy pickup in our native business, our first-party channel, and I think that's part of some of the loyalty promotions that we're doing. Last year in Marketplace, it was a tough environment. There was a lot of value going on, but I think we intentionally put them through our own channels. And like Jonathan said, we're seeing the stickiness of those transactions and that second order rate increase. But however, we do see tremendous opportunity in the Marketplace area and to grow our third party as well. So that's all work that's being underway.
Jonathan Neman: Yeah. And on your question around the, I think you're referring to our in-store business, it's in some ways, our most important channel. You know, it's where we acquire so many of our guests. It's where you, in the food quality, you're eating it fresh, you're getting that hospitality experience, you're learning about the brand. And so really focused on that, really from a hospitality perspective and a throughput perspective. And we've gotten very clear on how to measure the right metrics to show that we're on the right track. Really, there's so much around, you know, that second order rate of how do we How do we give, you know, how do we incentivize teams around giving such a great experience where those customers come back within 30 days? When you have that customer come back within 30 days, their annual spend is significantly higher of when they don't. We know Sweetgreen is a frequency and loyalty, like it's a habitual play. And so that in-store experience is a really, really important channel that we're highly focused on this year.
Chris Carroll: got it thank you um and then i guess as my follow-up can you maybe comment on any differences you're seeing in sales trends um across geographic range regions if any uh curious specifically if you're seeing any material differences between your legacy markets versus uh newer markets thank you yeah so i'd say northeast is still under pressure but i will tell you when i started in september that was the first market that we visited as a management team
Jamie: And there was a lot of work that's being done by Jason and team and they hired a new RGM. And so we went back just this month and it was encouraging to see all the work that's getting done and how delicious our food is and how operations is turning around. So that's been promising of kind of the hope and future ahead. But one thing that's been great to see is our California market That market has been under pressure. If you think about last year, we had the fires and different things, but we are seeing some nice momentum in our business in California.
Brian Harber: Great. Thank you.
Operator: Your next question comes from the line of Jeffrey Bernstein with Barclays. Please go ahead.
Jeffrey Bernstein: Great. Thank you very much. Johnson, it seems like over the past couple of quarters, there was lots of talk of know trends by income age ethnicity but it does seem like at least in recent months perhaps there's some talking about maybe less bifurcation between those buckets and maybe less of a concern just wondering if there's any update in terms of your trends by any of those cohorts and if there is an income concern when i see you talk more about value like how do you measure your your value perception maybe where do you score You know, you're willing to reset the margin target to be more aggressive, pushing value. And then I had one follow-up.
Jamie: Yeah, so in terms of our age cohort, we're seeing similar data. I'm going to back up. For Q4, we did see a slight decline in all cohorts, but we are seeing a little bit of pickup in Q1, which is great to see. And then I'll let you comment on the value piece.
Jonathan Neman: Yeah, you know, I think the goal here is obviously anything we do from a value perspective, we have to make up in transactions so we don't see the margin, you know, we don't see the margin deleverage. And so that's why, you know, we're looking very carefully at the price architecture. It's not a wholesale price decrease. It's more of a value ladder to have more options in. And we know as we do that, we see more frequency. So, you know, we're trying to do both, protect the margin as we offer more price value.
Jamie: Yeah, and we're definitely going to test every price move that we do to make sure we're getting those incremental transactions.
Jeffrey Bernstein: Gotcha. And then my follow-up, Jamie, you talked about for 2026 G&A reduction. I know you never know when best to temper spend versus reinvest more. I think some were thinking maybe you'd see an uptick in spend to reinforce the brand positioning and the store level support. So just wondering how you guys think about it as a management team you know, which direction to go within G&A and maybe can you share the largest buckets that are actually driving that reduction in spend in 26?
Jamie: Yeah, so we've done a lot of work around G&A and we will continue to lever that. But what is most importantly is we're investing in things that are driving returns. So we're super focused on our sweet growth transformation plan. So when it comes to marketing and now having Zip on board, we're really focused on that return and driving that value. So I would say you're going to see us investing heavily when there's a return, but you are going to see us reduce vendor spend in areas that are not creating returns and are not focused on our growth plan. So it's really just cutting the dollars that we're not creating returns and then focus on the dollars that are creating returns for us. But there's a lot of opportunity. I mean, yeah, a lot of opportunity ahead, I would say, to lever that further.
Brian Bittner: Thank you.
Operator: Your next question comes from the line of Sharon Zacfia with William Blair. Please go ahead.
Sharon Zacfia: Hi, thanks for taking the question. I guess, Jonathan, I'm intrigued by the idea of simplifying the pricing architecture, particularly for the create your own. Can you remind us kind of what percent of your sales are create your own at this point? And kind of how simple can you make it? It does feel like sometimes I need a quantum physics, you know, degree to figure out what my bowl might cost before I order it.
Jonathan Neman: Yes, we hear you on that. So it's about a quarter of our business in terms of the make your own. There's, you know, obviously many more people are ordering signatures and modifying them, but in the true make your own, it's about a quarter of our business. So it's a very important segment for us. You know, it's a little early to say exactly what we're doing, but it'll be radically simplified and I think better for the guests. um today that you know to your point it does maybe feel like you're getting nickel and dime down the line so we want to make it where you kind of know what you're getting for a for you know a very simple price and making sure that is really competitive in in the marketplace so more to come on that that will be uh that will be thoroughly tested through our stage gate process but I do think that will be a major lever for us as we simplify our pricing structure and offer better price value
Sharon Zacfia: Is it fair to think that that would be anchored around the proteins on the pricing and then would you, it seems like you would give some margin up, you know by doing that, would that be kind of I guess derailing some of that kind of clawback of the protein reinvestment or the increased portion sizes that you did last summer?
Jamie: Yeah, so I would say that we're looking at it in a couple of pieces. We will be looking at those value ladders, but then we'll also be looking at the elasticity of other items to sort of offset that benefit, but all of these will be carefully tested.
Operator: Thank you. Thanks, Sharon. Your next question comes from the line of Logan Reich with RBC Capital Markets. Please go ahead.
Logan Reich: Hey, good evening. Thanks for taking the question. I'm just wondering if you could give an update on how the new store productivity has been tracking through the year and for the Q4 openings.
Jamie: Yeah, so I would say for the Q4 openings, it's hard to tell, right? There's been a deceleration in the business. So I would say it's something that we're continuing to monitor and we're looking forward to make sure in 2026 we're only getting the best sites and we're working on all the things under the growth plan. So I would say it's too early to comment on the 2025 productivity, but we are seeing some great things when you look at areas, some of the new markets like Arizona that haven't been impacted by weather, very promising results there.
Jeffrey Bernstein: Got it. Thank you.
Operator: There are no further questions at this time. Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect.
