Hello, and welcome to McDonald's third quarter 2022 investor conference call. At the request of McDonald's Corporation, this conference is being recorded. Following today's presentation, there will be a question-and-answer session for investors. At that time, investors only may ask a question by pressing star one on their touch-tone phone. I would now like to turn the conference over to Mr. Mike Cieplak, Investor Relations Officer for McDonald's Corporation. Mr. Cieplak, you may begin. Good morning, everyone, and thank you for joining us. With me on the call today, our President and Chief Executive Officer, Chris Kempczinski, and Chief Financial Officer, Ian Borden. As a reminder, the forward-looking statements in our earnings release and 8-K filing also apply to our comments on the call today. Both of those documents are available on our website as our reconciliations of any non-GAAP financial measures mentioned on today's call, along with their corresponding GAAP measures. Following our prepared remarks this morning, we will take your questions. Please limit yourself to one question and then reenter the queue for any additional questions. Today's conference call is being webcast and is also being recorded for replay via our website. Now, I'll turn it over to Chris. Thanks, Mike, and good morning. I'm proud to report that our Q3 performance demonstrated our broad-based business momentum against an evolving macroeconomic backdrop. McDonald's unmatched scale and operational resilience, powered by our three-legged stool, has enabled us to deliver strong results this quarter. Global comp sales were up nearly 10%, and most of our major markets are growing share, which gives us confidence that we are operating from a position of strength even during difficult times. As the macroeconomic landscape continues to evolve and uncertainties persist, we continue to consider a wider range of scenarios as we look ahead. As I've said before, our base case scenario going forward is that we expect to experience a mild to moderate recession in the U.S. and one that will be potentially a little deeper and longer in Europe. That said, we operate in more than 100 countries around the world in varying economic environments. This has provided our teams valuable experience as McDonald's has proven to be successful in just about any business environment. I remain confident in our Accelerating the Arches strategy as our teams around the world continue to execute at a high level. Thanks to the resilience of the system and our continued investments at scale, we're laser-focused on meeting the changing needs of our customers. Before we get into those details, I want to introduce Ian Borden on his first earnings call as our Chief Financial Officer. Ian brings a wealth of experience to this role, having spent the past several years as a member of our global senior leadership team. He first joined our system in Canada in 1994, and from there, went on a bit of a McDonald's world tour. Over the past 30 years, he has served as CFO for Asia-Pac, Middle East, and Africa region, and CFO for Russia and Eastern Europe. He's also held several leadership roles across our markets and regions, most recently as president of McDonald's International. I'm thrilled for Ian to be stepping into this new role, and I'll now turn it over to him to share more on our Q3 results. Thanks, Chris, and great to be with everyone this morning for my first earnings call. Let me start with a few headlines on our overall performance. Our global comp sales of 9.5% for the quarter are a testament to the continued resilience of our business. It goes without saying that we are seeing global macroeconomic challenges that haven't been experienced in many years. Inflationary pressures and related interest rate increases taken by central banks are combining to put significant pressure on the consumer and our industry. Despite the challenging backdrop, our system's focus on Accelerating the Arches that I've seen at work across more than 100 countries gives me confidence in our ability to navigate these challenges. The power of our strategy is brought to life through our actions against our M, C, and D framework, working together with the customer at the center. In the third quarter, we remain focused on delivering delicious and affordable food with the convenience McDonald's is known for, which is now more important than ever to our customers. This continued to drive our market leadership and strong underlying sales growth across all segments of our business. In our international operated markets, comp sales grew 8.5% for the quarter, with positive comps across all markets. This demonstrates the underlying strength of the IOM segment, where we continue to gain market share. In France, we're operating from a position of market share strength, particularly with families, as French consumers have resumed more normal routines. We continue to grow loyalty in the market with a record mix of our transactions coming through our mobile app. By utilizing global mobile app offers in combination with traditional value offerings, Germany further highlighted our affordability and accelerated loyalty adoption at the same time. This drove strong growth in digital sales, which now represent more than 50% of system-wide sales in the market. Australia showcased our beef equities with a Winter Together and Lovin' It campaign, tapping into the role McDonald's plays in making everyday moments special. The campaign featured both the Angus and Quarter Pounder sandwiches and resulted in a meaningful lift in beef sales. With the U.K. launch of MyMcDonald's Rewards in July, we now have loyalty programs in place across all of our top six global markets. The U.K. built on the successful rollout, driving additional adoption with exclusive app offers throughout the quarter. With the Monopoly promotion in September, the team developed an innovative incentive that allowed customers to virtually peel their game board pieces right in the app. The focus on driving digital engagement paid off as our active loyalty members grew to over 3 million in just the first 3 months. While the expiration of VAT benefits impacted our quarterly comp sales in the market, we continued to grow QSR market share. Although our business performance has remained resilient, as I mentioned earlier, we recognize that this is a challenging environment. The inflationary impact on costs is putting pressure on restaurant cash flows for our franchisees, particularly in our European markets. Similar to actions that we took during COVID, our financial strength puts us in a position to be there for franchisees that may need temporary and targeted support to ensure our system is financially healthy and aligned on continuing to drive growth. Moving to the U.S., the efforts and investments by our franchisees, employees, restaurant teams, and suppliers over the last several years are paying off. The modernization of our estate, combined with strong discipline and execution across our core menu and backed by award-winning marketing, is connecting with customers and driving results. In the U.S., third quarter comp sales were up more than 6%, marking our ninth consecutive quarter of growth and achieving positive comp sales in 20 of the last 23 quarters. Higher average check, supported by strategic price increases and positive guest counts, contributed to performance. Loyalty remained a significant growth driver for the quarter, in part fueled by the Camp McDonald's promotion. A year after the launch of My McDonald's Rewards in the US, we continue to increase digital customer frequency quarter after quarter. Of the customers that have engaged with the app over the last year, about two-thirds have been active in the last 90 days. Turning to the international developmental license markets, comp sales were up nearly 17% for the quarter, with strong sales growth across all geographies in the segment. Japan delivered strong growth at the dinner daypart with popular returning limited-time offerings across both chicken and beef. We also highlighted our off-premise channels, further elevating customer convenience with an emphasis on McDelivery. It continues to be a challenging operating environment in China. With ongoing COVID resurgences and government restrictions, consumer confidence remains low. While comps for the quarter were slightly negative, the market continued to grow share, leaning into the strength of our delivery and digital business with the team on track to open about 800 restaurants this year, an all-time high. Now let me turn it back over to Chris. Thank you, Ian. Over the last few months, I've visited markets around the world hearing from employees, franchisees, and restaurant teams about how the challenges we face globally impact our restaurants locally. Three themes came through loud and clear. There is increasing uncertainty and unease about the economic environment. The resilience of the McFamily, alongside our scale and efforts to build a more connected and convenient McDonald's, set us apart. Our franchisees remain confident that we have the right business plans to work together and drive growth as a system. We see this in real time. Even as U.K. customers grapple with cost of living and energy impacts, our customers are coming back to McDonald's because of the value we offer. In Germany, as customers deal with the highest inflation on record, our teams continue to focus on branded affordability. No matter the issues our customers face, we are dedicated to meeting their needs. Ray Kroc said it best, "When we look after our customers, the business will look after itself." I'm proud that our business can be there to provide a warm space and a hot meal for families when they need it most. Accelerating the Arches is our playbook that is guiding our business and driving growth. By focusing on executing our strategy, I am confident that McDonald's will continue to show up for our customers across our MCDs. Our foresight to double down on digital and delivery, to execute culturally relevant marketing campaigns across the world, to highlight our core menu capabilities, and to invest in our asset base is really paying off. Our size, scale, and financial results put us in an advantageous position as we head into more volatile times, and we will lean into these strengths as a system. Digital is a primary driver to improve the customer experience, reduce complexity, and drive profitability. In our top six markets, it now represents over one-third of system-wide sales, fueled by over 43 million active customers on our app in the third quarter. In the U.S., our digital business is powered by over 25 million active customers driven through MyMcDonald's Rewards. Our loyalty program is driving growth and exceeding expectations. Delivery also remains a key driver of our business. To enhance convenience, we're integrating a new feature where customers can earn loyalty points, order and pay for delivery within the McDonald's app. This streamlined and more rewarding experience is available to customers in the U.K. and is currently being rolled out in the U.S. Further implementation of this solution will only enhance our strong performance, as the third quarter was one of our highest delivery sales quarters ever in the U.S. Each reward a customer redeems and each preference a customer shares on our app helps power our personal touch. We are using this deeper understanding of our customers to create relevant content and offers through the channels they prefer. By tailoring messages, our customers feel more connected to McDonald's, ultimately driving engagement and increasing frequency. It also gives us more ways to reunite with customers who haven't visited in a while. Our markets are also using digital to drive engagement with our fans through exclusive activations. In Australia, the success of their digitally exclusive Monopoly program speaks to the endurance of our marketing platforms and our ability to adapt existing equities to meet our customers where they are. The team incorporated loyalty into the Monopoly promotion in order to make it even more rewarding for consumers, and the promotion drove significant incremental sales for the market. Marketing has been an important growth driver for us. Our creative excellence is making our brand not just more recognizable, but more relevant to our fans. I can confidently say that the McDonald's marketing team is truly firing on all cylinders. Earlier this month, through a collaboration with Cactus Plant Flea Market in the U.S., we tapped into one of the most nostalgic McDonald's experiences, enjoying a Happy Meal as a kid, and repackaged it to make it relevant for adult fans. This promotion re-engaged our fans to our core food, including Big Mac and Chicken McNuggets. It's fair to say that this sentimental experience was a success, as 50% of our supply of collectibles was sold in the first four days of the promotion. These increased visits also drove the highest weekly digital transactions ever in the U.S. business, and we expect October comp sales in the U.S. to be in the low double digits. The heart of this marketing idea taps into emotional connections with our fans, adding the fun of collectibles with a relevant artist. All of these campaigns featured our core menu items and built upon our successful marketing platforms, which kept operations simple and brought our customers closer to the iconic menu items they love. Speaking of our food, as we come up with fresh spins on our classics, we're creating new yet craveable moments for a new generation of McDonald's fans. In Italy, we drove strong comps for the quarter as we highlighted simple yet compelling core menu items paired alongside great marketing with a Big Mac event featuring a Chicken Big Mac and a Big Mac Bacon. We're also focused on growing our business through chicken by leaning into the strength of core icons like Chicken McNuggets. At the same time, we are very confident in new global favorites like the McCrispy Chicken Sandwich, and we will look to bring a select number of these new equities to scale. Canada and Germany launched the McCrispy in Q3, and it launched in our most recent market, the UK, just last week. Australia recently promoted a spicy event featuring Spicy McNuggets and the McSpicy Chicken Sandwich. Spain promoted McSpicy in July and is planning future spicy events to bring relevant tastes and flavors to their customers. Chicken is a strong growth driver of comp sales in the quarter across our major markets and will remain a focus for us as we continue to grow our global market share in this important category. Our success wouldn't be possible without the incredible dedication of our restaurant teams that I saw in action and heard from directly during my travels. The people that bring the McDonald's experience to life in our restaurants are truly the face of our brand. That's the premise of a new advertising campaign for Best Burger in Belgium that highlights the individuals making our delicious food versus just the juicy burgers themselves. The people in our restaurants are truly our secret sauce and the ingredient we are most proud of. Thanks to the resilience of the system and our continued investment at scale in the M, C, and Ds, we're staying relevant to our customers as their needs continue to change. Now I'll turn it back to Ian to finish walking through the financials. Thanks, Chris. Our strong performance during the third quarter resulted in earnings per share of $2.68. This reflects an adjusted increase of 4% in constant currencies after excluding the prior year gain for the partial divestiture of our ownership in McDonald's Japan. Company-operated margins remain pressured by significant commodity and wage inflation, as well as elevated energy costs. We believe these pressures will continue to impact margins for the next several quarters. G&A costs increased about 7% in constant currencies for the quarter, driven by a combination of continued investment in growth-driving initiatives such as restaurant technology and inflationary pressures on costs. For the full year, we now expect G&A to be between 2.3% and 2.4% of system-wide sales. This is primarily due to the inflationary pressures I just mentioned, as well as a stronger US dollar having a greater impact on sales which are predominantly outside of the U.S., whereas most of our G&A expense is US dollar based. However, despite these headwinds, our year-to-date adjusted operating margin percentage has grown and is now in the mid-40s%. Our effective tax rate was 21.9% for the quarter. The strong US dollar I just mentioned created a foreign currency headwind to quarter three earnings per share of $0.19. Based on current exchange rates, we expect foreign exchange to impact fourth quarter earnings per share by between $0.14-$0.16, with the full-year headwind totaling about $0.50. As always, this is directional guidance only as rates will likely change as we move through the remainder of the year. Transitioning to capital expenditures, we now anticipate spending about $2 billion, an adjustment from our previous guidance due to foreign exchange rates and slightly lower spend. A few weeks ago, our board of directors approved a dividend increase of 10%, the company's forty-sixth consecutive annual increase. As we've talked about today, the Accelerating the Arches plan is driving strong financial results and cash flow. As we continue to execute against this plan, we remain very confident in our ability to deliver sustained long-term profitability for our system, all of which is reflected in the recent dividend increase. Before I close and hand it back to Chris, I just want to take the opportunity to personally congratulate Kevin on his successful tenure as McDonald's CFO. He's been a great partner to me as I've transitioned into this role, and I look forward to building on the strong foundations that he has put in place. It was a pleasure to meet so many of you last month. As I mentioned then, I expect that you'll find a great deal of consistency between Kevin and myself, particularly when it comes to the financial priorities of our business. While the environment remains dynamic and challenging times may lie ahead, I remain incredibly confident in our strategy, our business momentum, and our system. I look forward to meeting and working with all of you. With that, let me turn it back over to Chris to close. Thank you, Ian. Before we close and head into the Q&A portion, I wanted to take a moment to acknowledge that next week marks my third year as CEO of McDonald's and therefore my third year of discussions with many of you in this capacity. In some of our first conversations in late 2019, I highlighted three areas that I expected to focus on as CEO. The need to elevate our marketing with programs that are culturally relevant and accretive to our business, the need to develop a digital strategy to drive frequency, retention, and engagement at scale, and the need to ensure that McDonald's attracts and retains the best talent in the world. You saw much of this come to life in our Accelerating the Arches growth strategy, which provided a roadmap to focus the system across our MC&Ds. Since our conversations first began and in the many we've had over the last three years, I'm proud of what McDonald's has accomplished on these fronts, all while navigating an increasingly complicated world. Our investments in digital are keeping us relevant to customers and creating business momentum. In addition to what Ian shared, I'll just emphasize that delivery now is in over 100 countries, and our loyalty program is now in over 50 markets around the world, driving growth and exceeding expectations. Our marketing programs have enabled us to recapture the imagination of our customers, bringing new joy and excitement to their interactions with our brand. With fresh approaches, we are staying relevant to the fans we serve across generations who are driving meaningful contributions to our business. When you look at the leadership teams at the global segment and market levels, I am proud to have welcomed and promoted leaders who infuse new energy, new perspective, deep values, and strong capabilities to the McDonald's system. Looking forward, my focus and responsibility is to ensure that McDonald's uses its position of strength that we find ourselves in today to create even more value for our stakeholders. We will do this by continuing to work even more collaboratively and effectively in a world that is only moving faster. We will do this by building on our inherent strengths, harnessing our competitive advantages, and investing in innovation that allows us to deliver on our brand promise to consumers. We will do this by focusing collectively on solving the needs of our customers. That is ultimately how we will ensure that we are unleashing the full potential of McDonald's to those we serve. I'd like to extend a wholehearted thanks to the McDonald's system for these collective successes and everything that we will continue to deliver in the future. Thanks to all of you for the discussions that we've had up to this point. Now we'll begin Q&A. Thank you. As a reminder, if you are an investor and would like to ask a question, please press star followed by one on your telephone keypad. We ask that you limit yourself to one question and re-queue for any additional questions. Our first question is from John Glass with Morgan Stanley. Thanks, good morning, all. Hi, good morning. Can you hear me okay? Yeah, we can hear you, John. Thanks. Great. Good morning. I was curious about the IOM markets and your comments about the economic pressures there. Have you seen evidence of trade down? It wouldn't seem such given same-store sales, but maybe underneath that, is there evidence of consumer strain and maybe it's trade down or what have you? Can you also talk about or update your inflationary expectations for that market? I thought those margins were strong, but you also talked about the need to support franchisees given their cash flow situation. So maybe just an update on where you think inflation in the back half or fourth quarter into early next year leads you to in the IOMs. Thanks. John, it's Chris. So if you focus on our IOM markets, you know, right now, broadly, we are not seeing significant trade down happening in our menu. I think we do believe we're benefiting from trade down that happens as perhaps people coming out of other parts of IEO into QSR. So we do think that we're perhaps seeing some of that benefit. But within our own business in IOM, we're not seeing significant evidence of trade down there. As far as you know, how we're thinking about the market, it's mostly right now showing up just in sentiment, where we're seeing consumer sentiment in Europe remains low. Obviously, a lot of that is driven by the inflation that they're seeing, cost of living increases related to both food, but also energy. That's what is weighing on our mind. You've seen also the central banks in Europe today. I think this morning, the ECB raised interest rates another 75 basis points. All of that is factoring into what we think is gonna be a challenging environment in Europe. It certainly, as we mentioned in our comments, putting some pressure on the P&Ls of our franchisees. As far as outlook and how we're thinking about that, I'll maybe just have Ian give you his thoughts. Yeah. Thanks, Chris, and good morning, John. Maybe just a little bit of a build on what Chris talked about. I mean, I think certainly in Europe, we're seeing higher levels of inflation. I think you've heard us talk about that before, in food and paper, and also in energy prices, which obviously are impacted, particularly in Europe, knowing some of the European markets were quite dependent on Russia as an energy source and have had to obviously look for alternative supplies. I think you've got the combination of those pressures hitting some of our European markets. What I would say about Europe is it's obviously a wider range of scenarios because the context is not consistent. There are differences across the European markets that we do business in. I think if I took a step back, though, I just go to IOM and 8.5% comp in quarter three. I mean, I think as Chris talked about, we continue to see strong, broad-based, and consistent momentum across the business. I think we've got some inherent strengths in Europe, as I'm sure you've heard us talk about previously, which is the fact that we've got a modernized asset base. We've done a lot of work, I think, on marketing and around our MCD framework. There are less competitive activity across a number of our European markets, and so our business and our brand is in a position of strength. I certainly think that's a strong tailwind for us as we kinda head into this more volatile period that Chris referred to. All right, next question is from Dennis Geiger with UBS. Great, thanks for the question. I want to just ask a similar question as it relates to the U.S. You know, if anything different from a behavior perspective, and I guess more with your customer. I guess more importantly, given you've got positive guest counts in the U.S., maybe one of the only brands seeing that right now and the strength that you've seen over the last few quarters and last several years, is there anything more you can say about the customer now? Has the customer, you know, evolved at all, you know, Chris, over the last, under your tenure? Anything more that you about that customer, how it may have changed and what that means kind of on the go forward? Thank you. Sure. Well, I think the biggest thing that's changed over the last several years with the customer is just this focus on the kinda takeaway part of the business, and that shows up whether it's in delivery and you know, significant growth that we've seen in delivery. Digital has been a key enabler on that. For us, I think that's been the biggest thing that we've seen. Certainly we still have a dine-in business, but it is less pronounced than it was pre-COVID. We're certainly expecting that that's gonna sustain in terms of just this focus on drive-thru and what we're describing as the three Ds. I think that's been one broad-based change that we've seen. I do think that because of the environment that we're in right now and the investments that we've made previously, we feel very good about sort of what is the McDonald's value proposition. It shows up when we look at consumer scores around value for money, affordability. We see in the U.S. that we continue to lead in this, and it's allowed us to push through some of this pricing. I think because of the strength of the brand and the proposition, as evidenced by the results, the consumers are willing to tolerate it. I think they're willing to do that because of, again, all the other things that we've done to just strengthen our offering, the brand proposition, et cetera. I think that for us, as we look out forward, it gives us confidence that, yes, we're gonna continue to have inflation in through 2023, both food and paper as well as labor. We like our position relative to competitors in terms of where we stand. All right, next question is from Eric Gonzalez with KeyBanc. Hi. Thanks. My question is on the US business. You know, you're clearly gaining share and executing against what is certainly not the easiest macro environment. Just wondering if you could isolate maybe the one or two things that you're doing better than your peers and discuss why you believe that's a sustainable moat. You know, is it staffing? Is it your ability to hire, retain talent? Is this about real estate, perhaps speed of service, or maybe any other factors that you think you have contributed to your relative performance gap versus peers? I'm gonna maybe take you back to where we were several years ago in the U.S., where we talked about, you know, we were in a different time and performance was in a little different place. We talked about needing to do a number of things to improve our relative position. We talked about needing to invest in our asset base. As you know, we've cumulatively invested about $9 billion over the last five or six years between us and the franchisees in updating our asset base in the U.S. We talked about improving the quality of our food, improving our operations, which we've done, where speed of service is faster today than it was in 2019. We've been able to do that despite a more challenging labor environment. I also talked about the brand and digital. For us, at least the way I look at it, and I think the U.S. team would look at it's not any one thing that is the answer. It's the fact that we've been able to move over a number of years on a number of these things that gives us the momentum that the team is driving right now. Of course, wanna acknowledge also just the great partnership we're getting from our franchisees and from our suppliers in the US because it's certainly a team effort. Our next question is from David Tarantino with Baird. Hi, good morning. I have a question about Europe. I think you referenced that you may need to provide support to some of your franchisees, and I was hoping that perhaps you could elaborate on what you mean by that and how extensive that support might need to be in the current environment, just to kind of frame up, you know, I guess, how the health of the system in general. Thanks. Morning, David. It's Ian. Thanks for the question. Let me try and hit on that one. Look, I think what I would start with is, you know, part of our strategic advantage as a system is our scale and financial strength. I think as you heard me talk to in my remarks, and Chris alluded to it earlier, our franchisees in Europe are seeing, you know, elevated inflation, particularly obviously in food and paper and energy prices. Energy prices, as an example, in some of our European markets would be up 2-3 times from what they were 12 months ago. When you put the combination of all those impacts together, there's a fair bit of headwind in some of our European markets on our franchisee cash flow. I think using our financial strength to provide support to certain franchisees who may need it in a targeted and temporary way, I think is we think of that obviously to keep our system financially healthy, but also to keep the system aligned and focused behind the things that are gonna drive growth and investing behind those initiatives that are gonna continue to drive growth. Certainly think of that as a strategic advantage. You may remember back during the COVID period, we made some decisions around providing temporary and targeted support. I can tell you just from my old role leading our international business, that I think those were critically important strategic decisions that were a key factor in the acceleration and momentum that our system had as we came out of that COVID period. We've got the capability to do that if we need to do that, and I think that, as I said, is a strategic advantage that we carry with us. Our next question is from Lauren Silberman with Credit Suisse. Thank you. I wanted to ask about the marketing strategy. Camp McDonald's in July, the partnership with Cactus Plant Flea Market more recently. How are these partnerships helping you either reach a new audience or increase engagement with your audience? I guess, what changes are you seeing in terms of your consumer base? Do you generally see once, you know, you get the increase in digital utilization with a lot of these programs that sustains? Thank you. Thanks for the question. For us, one of the things that I've certainly believed about our brand is McDonald's is one of those brands that actually is very much a part of culture. You see it when you just look at social media and all the ways that consumers will talk about on their own McDonald's and their McDonald's experience. I think what we in the past maybe didn't do enough of is lean into our relevance and how our brand is a part of culture. I think what you've seen over the last several years for us, and credit to the marketing team and our agency partners on this, is just finding more ways that we can connect our equities, that we can connect our experience to what's also going on in culture. Whether it's famous orders or Camp McDonald's or now more recently, the Adult Happy Meals and, you know, the McRib coming back and just all these different things, shows to us and just as a reminder that we are charged with shepherding and stewarding one of the most fantastic equities in the world, and that we've actually got to find ways to continue to keep it fresh. In terms of evidence of it's just, it's the little things. When you see actually that, you know, we're selling out of our Adult Happy Meals and it's happening in days, not weeks, that is a real proof point. When you see that people are posting on social media, the, you know, fun ways where they've got their Boo Buckets and ready to go out and do Halloween, all of those are proof points for us. What I say to our team as well is, you know, if you're having to sort of look with a microscope to see the impact of marketing on your P&L, then it's not big enough. I think what we're starting to see now is we're starting to see marketing and our marketing programs show up as significant, meaningful comp drivers for us. That's what gives us confidence about, you know, that we're finding that right engagement with consumer. Our next question is from Jared Garber with Goldman Sachs. Great. Thank you for the question. I wanted to ask about the health of the U.S. consumer. Obviously, the trends you posted remain really strong and encouraging. I guess two pieces. One, can you help frame maybe the level of price that's running through the system right now as a component of the comp with that encouraging sign of positive traffic? Wanted to see if you're seeing any sort of deltas or differences between day parts as the consumer is increasingly pressured by the macro, and if you're seeing any consumer behavior changes related to that just yet. Thank you. Let's have Ian maybe just take the first couple parts of that, and then I can maybe offer just a few more general thoughts on it. Yeah, thanks for the question, Jared. Let me talk a little bit about pricing and just kind of, I think, you know, the reactions that we're seeing in the U.S., just knowing the U.S. is a little further along, and I think our data's a little clearer there. I think if you look at our quarter three comp in the U.S., that's just over 6%. That was obviously largely driven by average check. As you noted, we had a slightly stronger positive contribution from guest counts in quarter three than we saw in quarter two. Again, the majority of that check growth continues to come through price. Year-over-year in quarter three, our average price increase in the U.S. was just over 10%. That's roughly where we expect the kind of the full year pricing in the US to be. We continue to see pretty good flow through in the U.S., about 70%, which would be close to our historical range. If you think about that price increase of roughly 10%, flow through of about 70%, the difference between that and the average check growth that we're seeing, which really continues to be driven by two factors that we've talked about previously. The first one would be less units per transaction. Most of that is being driven by kind of a reversion of ordering channels. Obviously, during COVID, we saw elevated ordering through kind of off-premise channels like delivery and drive-thru. We're getting obviously more traffic now back in restaurants, for example. Drive-thru is basically back to kind of what it was pre-COVID in terms of percentage of sales. Obviously, we continue to see elevated delivery ordering, but in total, we still see more units per transaction than we were seeing pre-COVID. You had a reversion to more traditional ordering channels. The second factor, but to a lesser extent, would be we are seeing some trade down. That trade down is mainly with our lower income consumers, and we're seeing that shift from meal purchases to more value offer items. Those would be the two factors that are kind of offsetting pricing to get to that net average check growth. I think to the second part. I would say in total, we're getting, you know, pretty healthy continued flow through, which is a good sign that we're getting the balance right with our U.S. c onsumers. I think on the second part on day parts, you know, what I would say is we're seeing pretty consistently strong comps in the U.S. business across all of the day parts. I think dinner and breakfast would be a little better. As I say, pretty consistently strong. Again, that gives us a pretty good indication, you know, that what we're doing is resonating with consumers pretty broadly. Yeah, nothing to add. Ian handled it all. I think we're ready for the next question. Our next question is from Andrew Charles with Cowen. Great, thanks. Ian, I appreciate the FX guidance for Q4, but just given the extraordinary strengthening of the US dollar in recent months and unusual FX circumstances, can you perhaps comment on the impact of current exchange rates on 2023 EPS? Our math's just somewhere around a $0.25-$0.30 impact, and just wanted to see if we're thinking about that correctly. Yeah. Thanks, Andrew. Look, I'm not gonna get into talking about 2023 today. To be honest, we're still in the midst of working through our 2023 plans. In fact, we've got our managing directors coming into Chicago in a couple of weeks to take us through their plans for 2023. I think that's something that we can give you more texture around when we get into our quarter four earnings call. Our next question is from Christopher Carril with RBC. Hi, good morning. Thanks for the question. Maybe following up on some of the earlier questions, I do wanna ask about the competitive environment in the U.S., maybe both for the burger category and just broader fast food. Specifically, I mean, do you see potential for increased promotional activity here going forward? Are you expecting the industry and peers to kind of remain largely rational here going forward, just given the still dynamic and evolving backdrop here? Thanks. Yeah. Certainly our expectation is that the industry is gonna stay rational from a pricing standpoint. I think part of that is just gonna be born out of self-interest, which is everybody's experiencing the food and paper inflation, everybody's experiencing the labor inflation. You know, some of our competitors. Their franchisees are not in the same position as our franchisees. I think even if there's a desire to try to get more promotional in some areas to address maybe any traffic headwinds that somebody might face, you're gonna run into a lot of resistance from franchisees who are just not gonna be in a position to engage in that. Our expectation is the environment is gonna continue to stay rational. I think the other thing that's going on right now is you just have food away from home versus food at home. You still have significant gaps there. I think we are in 2022, the gap between food away from home versus food at home, it's the widest gap that it's ever been. There is still a benefit that the industry is getting relative to food at home that I think is keeping everybody you know being smart about pricing. The last thing I would say for us, and I mentioned a little bit earlier for us, is that what we look at is we just look at our value and affordability. Industry-wide, the industry overall is doing well on value and affordability, and we also like our relative position. I mean, we are leading the industry as we have historically on our value and affordability, the gap versus the industry. Those are all things that we monitor and look at, but the expectation is certainly that the industry is gonna stay rational. Our next question is from Jeffrey Bernstein with Barclays. Great. Thank you very much. Shifting gears maybe to China specifically. I think you mentioned opening a record 800 units this year. Wondering whether that's safe to assume that's accelerating into 2023. I think you mentioned that comps were slightly negative. I'm just trying to assess whether there's any reason for concern on the underlying fundamentals of the business, or do you really believe it's purely COVID? Any kind of updated thoughts on the region, especially with the most recent political environment in China creating some incremental headwinds. Thank you. Thanks, Jeff. Let me start knowing in the last role that I had, I was overseeing China as part of that remit. Look, I think as you heard in my opening comments, you know, I think China continues to be impacted by the zero COVID policy that continues to be in place. Obviously, that continues to be disruptive, not just to us, but I think to consumer confidence in the kind of broader macro environment in China. I think that's certainly what we feel is the driver of the shorter term results and challenge in China. As you heard me talk to, we continue to gain share, and it's a pretty competitive marketplace, as you would know. I think we feel that the team in China has done a pretty nice job to work through this more challenging period. The 800 openings, I think you can expect that'll be kind of consistent as we go forward. I certainly think it speaks to the confidence we have in the longer term opportunity in China, which remains in place. That volatility I think is going to exist until there's a change in kind of focus about how they're handling COVID. The only things I would add, just keep in mind that in China, there were still 33 cities and about 65 million people in this last quarter that were in either full or partial lockdown as a result of the zero COVID policy. I think, you know, sometimes here in the US and in our Western markets, where we're in a different position relative to the pandemic, we sometimes lose sight of in China, there is still significant restrictions, which is impacting mobility, and ultimately that impacts our business. Long term, our outlook on China remains very bullish. We're gonna continue to build restaurants at an aggressive pace like Ian was talking about. We do hope and expect that in 2023, the situation in China is gonna improve for us. Our next question is from John Ivankoe with JP Morgan. You there, John? Sorry about that. I did a different conference call system, I suppose. Thank you. The G&A level that you talked about, 2.3%-2.4%, you know, you're obviously spending a lot of money, but you're clearly getting results. I just wanted to, you know, kind of have a sense, you know, both in G&A, and if we can also comment on CapEx, you know, the future spending levels for the business. I mean, is this, you know, kind of a time in the environment, you know, where the system might be looking for efficiencies? Or, is it the opposite that you actually have an opportunity to spend more and get more, and drive, you know, future sales and overall market share? You know, again, both on G&A and in CapEx. Thanks. Yeah. Thanks, John. Let me take those two questions. I think on G&A, as you kind of heard me talk to in my commentary, there are really a couple of drivers for this year that resulted in that adjusted outlook. The first one is the stronger impact of the stronger US dollar. So if you think of our G&A, let's call it formula to get to the percentage, 60% of our sales come from outside of the U.S. So obviously we're translating those sales back into less US dollars, and 70% of our G&A spend is US dollar based. So that's the first impact. The second impact is obviously just the general inflationary pressures that we're seeing on costs, which obviously is also Coming into play in our G&A expenses. I think what I would say coming into the role is, certainly it's an area that I'm gonna be focused on. I think we continue to believe that in terms of running the business part of our G&A spend, we should be able to drive efficiency and gain leverage as we continue to grow our top line as we go forward. That's important for two reasons. One, the efficiency part, but also, we wanna make sure we've got the G&A capacity to ensure that we can spend on areas like technology and digital or innovation where we wanna drive things that are gonna drive growth. I think the net of that formula is that we continue to believe we should gain leverage in G&A as we go forward. I think the second part on capital, you know, there were kind of two reasons why we adjusted guidance down from the $2-$2.2 billion to now about $2 billion. Again, one of them is just the stronger US dollar. About 60% of our capital spend is outside of the US, so we're just translating that spend back into fewer US dollars. I think the second bit is, you know, slightly less openings due to kind of the permit timelines in some markets, slightly fewer projects getting done just to project lead times. What I would say on capital is, I think, and again, coming out of my previous role, you know, continue to believe we've got an opening opportunity across many of our owned markets. We continue to get really good returns on new restaurant openings. I think that's something that we'll continue to look at as we go forward. I think Chris wanted to just jump in. Yeah, a couple closing thoughts here. I appreciated in the question that for us, and the way I think about it is, it's the effectiveness of our spend. As you noted in the question, you know, we've been able to see that for the investment in the G&A, it's certainly driving the type of performance. I would tell you that I think we have an opportunity to get even more effective on the impact of our G&A investments. For me, it shows up where we're still too slow. I think we have to get faster. I don't think that we're fully leveraging our scale. We have to find ways to do that. We're still solving the same problems multiple times in different markets as opposed to having one solution that we can very quickly share across the globe. As I look at the effectiveness of G&A, there's still a lot of work for us in that area. Our next question is from Brian Bittner with Oppenheimer. Good morning. Thank you. Just with your base case being a U.S. recession, and I think a deeper one in Europe, it's obviously hard not to go back and recall how strong the U.S. business performed best in class during the 2008, 2009 recession period. Do you see the business as defensively positioned today as it was then? I also just wanted you to comment some more on the low-end consumer. Your U.S. trends are so strong in the third quarter in October, in light of the weakening we're hearing about this low-end consumer. I know you said you're seeing trade down from the low-end consumer within your own business. As this cohort of consumers just generally seeks more value, is this actually? You're breaking up a little bit, Brian. We'll try to maybe get questions we could hear. Yeah. I'll answer what I could hear, and then afterward, if we missed anything, you can follow up with Mike on this. Certainly, there are lessons from 2008, 2009, but there are also differences from 2008, 2009. It is true that our business performed well in that last downturn period, and there were a number of factors for that. Keep in mind back at that time, we had dollar menu as an embedded part of our value offering. We also were launching McCafé and starting to scale that. Those were things that were helpful to us in the last downturn. We're in a different dynamic right now. You have not just the pressure on inflation with food and paper, but you've also got labor inflation in a very tight labor market. That's different than 2008, 2009. Our expectation is that we are gonna perform well in this environment, certainly on a relative basis to our competitors here. There are different factors at play, and I think they're gonna be different drivers. It's this focus on digital and delivery. We do think that those are gonna be more pronounced now. The fact that we have scale and we also have the ability to do it, we think at lower cost than our competitors, that's gonna be one thing that we believe works in our favor. The fact, as I mentioned earlier, that our brand and our asset base, we think is in a better position, gives us a little bit more pricing power than maybe in the past where we're leaning in the dollar menu. We actually think we've got the pricing power right now. The only other thing I would just add as evidence of that is one of the things that we look at is we look at our share by income group. In the U.S., we can actually look at what is our share among low-income consumers. We're gaining share right now among low-income consumers, and that goes back to the fact that we are positioned as the leading brand in terms of value for money and affordability. So long as we continue to stay on the right side of that, we are seeing the benefit, like I said, with the low-income consumer. To the degree that we end up in a more challenging economic environment in 2023, that's gonna be helpful to our business trends. Our next question is from David Palmer with Evercore. Thank you. A question on Europe and the IOM. During its quarter, The Coca-Cola Company mentioned that there was a strong summer in Europe, partially helped by weather, but then weather was negative towards the end of the quarter. You know, I would imagine there might be some noise because of weather and there might be noise that to tease out in terms of COVID comparisons. Are you seeing any real trends in Europe in recent months in terms of sales and traffic? Has there been any slowing in particular markets that you would attribute to consumer confidence and discretionary income? Given what you know about what's gonna happen in terms of rising utilities in the coming months, what impact do you think these will have on your IOM company restaurant margins and consumer traffic? I know the last part is difficult, but any thoughts would be helpful. Thanks. Yeah. Thanks, David. Good morning. Well, look, I think what I would say in Europe on trends is I think we've seen pretty good consistency of strength across our European markets. Don't think we've been impacted by the weather factor that you talked about, perhaps as others have. I think our momentum there is really strong. As you and I have talked about before, you know, as Chris talked about, the strength of our brand in Europe, again, modernized asset base, you know, I think strong teams, strong alignment with our franchisees and our system in Europe, all of those things are coming to play. As you heard Chris talk about, you know, a little bit in the U.S. context, I just think all of those things coming together put us in a position of strength. If you look at things like value for money and affordability across the majority of our European markets, we are the leader on those measures, which I think are really important as we head into this, you know, more dynamic environment. I think on margins, as you heard me talk to in my opening remarks, you know, certainly in Europe, if you look at food and paper, we think inflation in Europe is gonna be a little higher and last a little longer than what we are seeing in the U.S. Energy prices, as I talked to earlier, you know, in some of our European markets are up 2-3 times what they were 12 months ago. Those are certainly pressures that are facing some of our markets and certainly our franchisees in our European business. I think, you know, we've done a lot of work over the last couple of years around pricing capability, and what I mean by that is the advisors that we use, the tools, the data and the analytics. I feel like we're in a good position where we're using the right facts and data, the right consumer insights to make really, I think, consumer-facing decisions. We're taking, you know, the right levels of pricing and getting that balance right between, you know, recovering inflation, but also not getting ahead of the consumer. I think the momentum to Europe kind of speaks to, you know, how we're doing on that. I would just add, one of the things that is a factor in all of this is, you know, we give pricing recommendations, but ultimately it's up to the franchisees as to whether they adopt those pricing recommendations. We're still seeing very strong adherence with our franchisees to our pricing recommendations, which we take as a signal that there's confidence in how we're going about the decision-making on that. As we near the hour, we got time for one more question from Gregory Francfort with Guggenheim. Hey, I have a two-part question. I know, Mike, you might kill me for that. The first one is this really the McRib farewell tour? That's the first one. Then the second one is a follow-up to John's question from earlier. Just maybe can you talk about how you're thinking about accelerating unit growth? You talked a little bit about delays in permitting, but the confidence in the timing and magnitude of maybe getting back up close to kind of 3.5%-4% unit growth, when we might expect that to happen? Thanks. The McRib is the GOAT of sandwiches on our menu. Like the GOATs of Michael Jordan, Tom Brady and others, you're never sure if they're fully retired or not. Ian, over to you. I think, you know, I think, Greg, what I would just reiterate is what I talked about earlier. I mean, I think if you look across our IOM markets, and the U.S., I think, you've heard us talk about the strength of the brand and the business. I think certainly we continue to see, as I talked about earlier, really good returns, around the unit openings that we are doing in those markets. I think certainly there's more opportunity there. I think that's something we'll talk to you more about as we kinda get into 2023 and our fourth quarter earnings. Okay. Thank you, Chris. Thank you, Ian. Thanks, everybody, for joining. Have a great day. This concludes McDonald's Corporation investor call. You may now disconnect.