Good morning, ladies and gentlemen, and welcome to the CAVA Q4 2023 earnings conference call. At this time, all lines are in listen-only mode. Following the presentation, we will conduct a question-and-answer session. If at any time during this call you require immediate assistance, please press star zero for the operator. This call is being recorded on Tuesday, February 27th, 2024. I would now like to turn the conference over to Matt Milanovich, SVP Finance. Please go ahead. Good morning and welcome to CAVA's Q4 and full year 2023 financial results conference call. Before we begin, I want to thank you for joining us today on late notice. Yesterday, a media outlet breached an embargo agreement and released a story about our financial results in error, prompting us to issue our earnings release and host this call ahead of schedule. If you do not already have a copy, the earnings release and related 8-K furnished with the SEC are available on our website at investor.cava.com, which we encourage you to review. The purpose of this conference call is to give investors further details regarding the company's financial results, as well as a general update on the company's progress. You will find reconciliations of any non-GAAP financial measure discussed on today's call to the most directly comparable financial measure calculated in accordance with GAAP to the extent available without unreasonable efforts in today's earnings release and supplemental deck, each of which is posted on the company's website. Before we begin, let me remind everyone that this call will contain forward-looking statements. For this purpose, any statements made during this call that are not statements of historical fact may be deemed to be forward-looking statements. Investors should be aware that any forward-looking statements are subject to various risks and uncertainties that could cause actual results to differ materially from those discussed here today. These risk factors are explained in detail in CAVA's filings with the SEC. Please refer to these filings for a more detailed discussion of forward-looking statements and the risks and uncertainties of such statements. All forward-looking statements are made as of today and except as required by law, CAVA undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future developments, or otherwise. And now I'll turn the call over to the company's co-founder and CEO, Brett Schulman. Thanks, Matt, and welcome to the call, everyone. In 2023, we demonstrated the power of our category-defining brand and the significant white space opportunity ahead of us. We opened 72 net new restaurants during the year, growing our footprint by more than 30%. Traffic in our existing restaurants continued to climb and, following a successful IPO, we generated three consecutive quarters of positive net income. As we create the next large-scale cultural cuisine category, our extraordinary potential is clear. We fulfill consumers' growing desire for bold, unique flavors with no compromise between taste and health. Our Mediterranean concept has broad appeal across genders, generations, and income levels, and proven portability from coast to coast in cities and suburbs. We now have a presence in 24 states and the District of Columbia and continue to target annual unit growth of 15% or more with a long-term goal of 1,000 restaurants by 2032. We've built a strong foundation to support that growth, and our powerful unit economic engine continues to drive us forward. Even with continued macroeconomic and geopolitical uncertainty, our value proposition is resonating with consumers. The investments we make in our team members and our guests support that value proposition. We are working on behalf of our team members by investing in attractive wages and benefits, enhanced training, and career development opportunities. We are working on behalf of our guests by mitigating price increases and by not taking outsized pricing to offset unplanned costs related to the impact of new legislation like AB 1228 in California, which includes aspects of its predecessor bill known as the FAST Act. We see the impact of these investments come to life every day. I was on a plane the other day heading home from visiting our team in L.A. when one of the flight attendants saw my CAVA sweatshirt, stopped, and let me know effusively how much she and her daughter love and appreciate our food and, most importantly, the value we offer. When it comes to the team, there's no better example of the return on our investment than the recent promotion of a team member in our Virginia Beach restaurant, Ricky Martin Jr. Ricky joined us as an entry-level role four years ago, just before the pandemic. He has grown under the training of our Academy General Manager, Nick Blaylock, and was just promoted to Guest Experience Manager. Investing in our teams and our guests enables us to deliver on the Mediterranean way that sets us apart and, we believe, will continue to drive traffic and support sustainable expansion while increasing profitability and shareholder value over the long term. Our results in the Q4 of 2023 were outstanding, with a more than 52% increase in CAVA revenue, 11.4% CAVA same restaurant sales growth, including a 6.2% increase in traffic, 19 net new restaurants ending the quarter with 309 restaurants, a 30% increase year-over-year, Adjusted EBITDA of $15.7 million, a $12.2 million increase over the Q4 of 2022, and net income of $2 million. For the full year, we delivered record results, including a nearly 60% increase in CAVA revenue, 17.9% CAVA same restaurant sales growth, including a 10.4% increase in traffic, 72 net new restaurants, adjusted EBITDA of $73.8 million, a $61.2 million increase over 2022, and net income of $13.3 million. Our 2023 performance was grounded in the execution of our strategic plan. I'm going to touch on the highlights of what we accomplished in Q4 and the full year before laying out the evolution of our strategy and what we are setting out to accomplish in 2024. In Q4, we continued our expansion across the country, opening locations in nine different states, further exhibiting the portability of our brand. We also opened our last remaining Zoës conversion and are operating under a single, powerful CAVA brand. As we work to build a best-in-class organization, we rolled out updated food safety protocols in Q4, including the completion of our transition to a new third-party auditor with more frequent and stringent restaurant audits. We also expanded training content and further strengthened our robust accountability procedures through our Critical Four initiative, which codifies our food safety priorities for our team. To deliver on these standards, as well as efficient operations and an incredible guest experience as we scale, we continue to grow our people development pipeline. We ended 2023 with 55 Academy GMs, including 7 recently promoted to the multi-unit leader position, exceeding our target for the year. In addition, we delivered on our 2023 target to internally place 75% of our new restaurant GMs. Our team-building work, both at our restaurants and in our collaboration centers, has created a highly engaged team. According to industry expert Denison Consulting, an employee net promoter score, or ENPS, above the 50th percentile indicates a high level of engagement. In our most recent team member survey, we ranked in the top quartile, our highest score to date. Team members also rated us in the top quintile, on average, in the diversity and inclusion category, and we are proud to be named by Newsweek as one of America's Greatest Workplaces for Diversity. To further the success of our team and our business as we scale, we've built additional infrastructure to support our plans for growth. We're excited to announce that our new manufacturing facility in Verona, Virginia, has commenced operations. A 55,000 sq ft production facility, Verona produces CAVA dips and spreads and, along with our existing facility in Laurel, Maryland, can support at least 750 restaurants, as well as the growth of our CPG business. This vertically integrated model takes complexity out of the restaurants and improves costs overall and lets us maintain the quality and integrity of our chef-crafted recipes. On the culinary front, our best-in-class team continues to innovate, creating newness in our menu and giving guests reasons to try CAVA and come back more often. A prime example of this is our new grilled steak protein. Our Mediterranean take on this beloved main demonstrates the bold, unique flavors that make CAVA special. It is rich but not heavy and features the brightness of sun-dried tomato, herby oregano, and a touch of red chili for fruity heat. Our Dallas and Boston market tests are progressing well, and we expect to roll steak out company-wide in the second half of 2024. Turning to loyalty, we are in the early stages of launching a new program aimed at developing deeper connections with our passionate customer base, creating more frequent, relevant experiences, and further driving traffic, mix, and check. At the end of 2023, we transitioned all loyalty members to a new construct that lets them earn and bank points. In the Houston market, we started testing new types of rewards to redeem and new ways to engage guests. We are moving to the next stage gate with an expanded test of the Houston pilot in the Carolinas market. Early results are meeting expectations, and we expect to roll out a new rewards program company-wide at the end of this year. Before turning the call over to Tricia, I'd like to touch on our 2024 strategic plan, which reflects our evolving strategy and builds on our accomplishments to date with four key pillars. The first pillar, expand our Mediterranean way in communities across the country, encompasses three key areas. The first area is growing our footprint and expanding channel access. This includes new restaurant growth and initiatives like our catering test. The second area is fueling our culinary innovation and communication engine to drive traffic, mix, and check, illustrated by our planned steak launch in the second half of the year. And the last area is expressing our concept essence consistently across brand properties, which includes the rollout of Project Soul, our new finalized 3.0 design, which creates a more inviting physical space for in-restaurant occasions. Our second pillar is focused on developing personal relationships with guests even as we scale. This includes creating a cohesive physical and digital journey for guests, driven by a reimagined loyalty program, and using our digital ecosystem for one-to-one communication that can deepen connections with guests and create more personalized experiences. Based on the results we're seeing to date, we believe this work can further strengthen our value proposition, powerfully express our brand across multiple touchpoints, and create differentiated, thoughtful moments that make the CAVA experience stand out. The third pillar, run great restaurants every location, every shift, emphasizes an ongoing focus on enhancing our training and standards to consistently deliver our CAVA hospitality and food safety protocols. We believe that this work, combined with a focus on streamlining and automating prep, as well as leveraging AI technologies to improve forecasting and accuracy through our new Connected Kitchen initiative, will make our restaurants easier to operate, drive improved operational efficiency and effectiveness, and enhance the guest experience. Our fourth and final pillar, operate as a high-performing team, includes deepening our culture of accountability, developing enhanced data capabilities to unlock powerful, actionable insights, and improved productivity, and implementing programs and tools to further engage, retain, and connect our teams. We will continue to evolve and enhance our talent strategies, expand and deepen our knowledge of the customer, and strengthen our HR systems while fostering a mindset of growth and discipline. I want to thank our team members for their contributions to a record-setting year and for their commitment to bringing heart, health, and humanity to food. We are proud of all we have accomplished in 2023, including our entrance into the public market, but we know that we are just at the beginning of all that is possible for CAVA, and we look forward to the journey ahead. With that, I'll let Tricia walk you through the financials. Thanks, Brett, and good morning, everyone. CAVA revenue in the Q4 of 2023 grew 52.5% year-over-year to $175.5 million. Same restaurant sales increased 11.4%, driven by traffic growth of 6.2%. Fiscal 2023 had a 53rd week, which we excluded from our same restaurant sales calculation. We noted broad-based same restaurant sales strength across vintages, regions, and both suburban and urban locations. We opened 19 net new CAVA restaurants in the Q4, bringing our total CAVA restaurant count to 309. We continue to be pleased with the top-line and margin performance of new restaurant openings. In addition, our proven portability is reflected in our overall AUV above $2.6 million, with all geographies $2.3 million or more. CAVA restaurant-level profit in the Q4 was $39.3 million, or 22.4% of revenue, versus $23 million, or 20% of revenue in the prior year, representing a 70.7% increase. The margin expansion was largely a result of improved food, beverage, and packaging costs and sales leverage, including the impact of the 53rd week, partially offset by incremental wage investments. CAVA's food, beverage, and packaging costs were 28.8% of revenue, lower than the Q4 of 2022 by 210 basis points, driven by lower input costs and higher incidence of premium menu items driving favorable product mix. CAVA labor and related costs were 27.8%, up 50 basis points from the Q4 of 2022. The increase reflects investments in our team member wages that we discussed on the third quarter earnings call, partially offset by leverage from increased sales compared to the prior year. CAVA occupancy and related expenses were 8.3% of revenue, an improvement of 100 basis points from the Q4 of 2022 due to increased sales leverage. CAVA other operating expenses were 12.7% of revenue, an increase of 20 basis points from the Q4 of 2022, reflecting investments in the integrity of our physical spaces in support of our increased restaurant volumes. Shifting to overall performance, our general and administrative expenses for the quarter, excluding stock-based compensation, was $21.3 million compared to $15.3 million in Q4 of 2022. This $6 million increase is primarily driven by investments to support our growth, performance-based incentive compensation, recurring public company costs, and legal accruals. As a percentage of revenue, G&A excluding stock-based compensation, was 12% in the current quarter, an increase of 30 basis points from the prior year quarter driven by the aforementioned items, partially offset by sales leverage. Adjusted EBITDA, including the burden of pre-opening costs for the quarter, was $15.7 million, which was $12.2 million higher than Q4 of 2022. The increase in Adjusted EBITDA was driven by 11.4% CAVA same-restaurant sales growth, improved CAVA restaurant-level profit margin, and the performance of new openings. Keep in mind Q4 pre-opening costs included expenses related to the restaurants opened during the quarter, as well as costs related to the 11 units we opened to date in Q1 of 2024. We reported $2 million of net income compared with a net loss of $18.8 million in Q4 of 2022, representing an increase of $20.8 million. We reported diluted earnings per share of $0.02 in the quarter compared with a diluted loss per share of $13.72 in Q4 of 2022. Shifting to liquidity. At the end of the quarter, we had zero debt outstanding, $332.4 million in cash on hand, and access to a $75 million undrawn revolver with an option to increase our liquidity if needed. We delivered cash flow from operations of $97.1 million for the year compared with $6 million in the prior year. The increase was primarily driven by our improved operations, driving increased profitability across the fleet. I would like to touch on our development pipeline. The pipeline we've built is diverse and not dependent on a small number of markets, landlords, or site profiles. Our development team has built increased buffer into our pipeline to ensure we are insulated from potential delays in equipment availability, permitting, and inspections. At the same time, we are actively building a robust pipeline for 2025, positioning us for continued growth in new and existing markets. Turning to our outlook for full year 2024, we expect the following: 48-52 net new CAVA restaurant openings, CAVA same restaurant sales growth of 3%-5%, CAVA restaurant-level profit margin between 22.7% and 23.3%, pre-opening costs between $11.5 million and $12.5 million, and Adjusted EBITDA, including the burden of pre-opening costs between $86 million and $92 million. I want to share some additional thoughts for our 2024 outlook. As you know, we took an approximate 3% in-restaurant menu price increase in January 2024. We continue to invest in creating value for our guests, and we do not have plans at the current time to take further price increases in response to AB 1228, whose predecessor was the California FAST Act. We expect approximately a 30 basis points reduction in restaurant-level profit margin in the near term, which is contemplated in our full year guidance, but to also drive value for our guests and shareholders over the long term. Our 2024 same restaurant sales guidance implies a two-year stack in the low 20s, which is in line with the back half of 2023. Our same restaurant sales guidance also takes into consideration the Q1 2023 benefit of an unseasonably mild winter and the halo from our IPO that benefited Q2 2023 and, to a lesser extent, the third quarter of 2023. Our results in 2023 demonstrate the power of our operating model. This is an important time in our growth trajectory, and our 2024 guidance reflects our investments to deliver on our model as we scale and grow. We expect restaurant-level profit margin to be between 22.7%-23.3%, or 150-210 basis points below 2023. This incorporates the previously discussed 120 basis point increase in wages implemented in the Q4 of 2023 as part of our investment in team members, along with additional near-term investments to drive restaurant-level margin expansion over the long term. We expect similar seasonality of restaurant-level profit margin throughout 2024, and as a reminder, that our Q1 includes 16 weeks. Before going to Q&A, I want to acknowledge our restaurant manufacturing and collaboration center teams for the outstanding results they delivered in 2023. Through their collective ambition and passion for positivity, they reinforced our proven portability and powerful unit economics. CAVA continues to get stronger with every new restaurant we open and every new guest we welcome to our table. Now, I will turn the call back over to the operator to open it up for Q&A. Thank you. If you wish to ask a question, please dial star one on your telephone keypads now to enter the queue. Once your name has been announced, you can ask your question. If you find your question is answered before it's your turn to speak, you can dial star two to cancel. And in the interest of time, please limit yourself to one question per turn. You can rejoin the queue to ask a further question. Our first question comes from the line of Brian Harbour at Morgan Stanley. Please go ahead. Your line is open. Yeah, thank you. Good morning, guys. Maybe as you think about that same store sales range for this year, obviously, the low end of that is just kind of your pricing plan. Are you still seeing, do you still expect kind of more premium attached? What do you see as kind of mixed drivers of that this year? And then how much traffic, perhaps, would you expect within that range that you've talked about? Hey, Brian. Good morning. So our 3%-5% guide really reflects two-year same-restaurant stack in the low 20s for the full year, with higher in the first part of the year than it is in the back part of the year because of those Q1 impacts from favorable weather that we had talked about previously. The other thing that it considers is the IPO halo in Q2 and, to a lesser extent, in Q3. It does reflect the 3% price that you called out, and traffic and mix is the remainder. But the way we're looking at it is if PPA continues to expand, you'd likely see the same-restaurant sales guide, the actual results to be closer to the high end of the range. Okay, thank you. Thank you. Our next question comes from the of Jon Tower at Citi Group. Please go ahead. Your line is open. Great, thanks. I appreciate taking the question. I was curious, Brett, you had mentioned earlier two things that I was hoping you could expand upon. First, you talked about new design for some of the stores and expanding space for in-store occasions. I'm just curious if you could dig into whether or not you feel like new store prototypes will require a bigger footprint in general versus what you've got today for the store base. And then the second is if you could maybe provide a little bit more color on where you are in the Connected Kitchen initiative, how much more you see with respect to investment over the next 12 months and kind of specifically where you plan on within the store kind of going after. Yeah, thanks, Jon. Thanks for the question. In regards to the footprint, we don't see any change in our footprint. It's really enhancing and warming the aesthetic in our physical space to really accommodate and invite more in-restaurant occasions. 64% of our guests opt to come and engage with us in our physical channel. We have 36% that engage in our digital channels. We have great digital channels. We have 31 pickup-by-car digital pickup lanes, as well as all of our pickup-off-the-shelf opportunities. And we have great physical channels. We don't think it's an either/or. We think it's an and. And so we want to really take advantage of that opportunity to drive additional physical occasions along with those digital occasions. In regards to the Connected Kitchen initiative, this is the beginning of a multi-year journey where we see a tremendous opportunity to improve productivity, to drive greater operational effectiveness and efficiency by taking a lot of complexity off the team members' plate. So it's really taking to another level of sophistication things like predictive scheduling, predictive prep, predictive cook batching through the use of data and AI models. And any expense or CapEx investment is reflected in our guidance, in our longer-term guidance. But again, this is a multi-year initiative that we're excited about, and we see the opportunity again to drive greater productivity and make it easier for our team to run our CAVA restaurants and deliver that great Mediterranean hospitality and food. Thank you. Thank you. Our next question comes from the line of Brian Mullan at Piper Sandler. Please go ahead. Your line is open. Hey, thank you. Just kind of a question on menu innovation. Brett, you shared in the prepared remarks, you're going to roll steak out across the system, I think, in the second half of this year, which is exciting. Can you just talk about what you saw in the tests, what caused you to go ahead and take this next step for the full launch, and just maybe talk about the benefits to the business from a consumer perspective and then maybe an economic perspective? Thank you. Yeah, we're excited to be on track to launch this in the second half of the year. What we're seeing in the test is the consumer receptivity as well as the operational effectiveness that we were looking to validate. And so that's the stage gate we're in with the multi-market test in Dallas and Boston. And we've seen results have been meeting our expectations in both markets. And if you remember, we used to have grilled meatballs on our menu that we removed back in January. And so a beef item is definitely a perceived gap in our menu that we think is an opportunity to drive incremental occasions and frequency that doesn't currently exist on the menu. So we're excited to launch that in the H2 of the year. As it relates to the economics, the test is designed to meet margin dollar equivalence. So we're continuing to evaluate the results of those tests, and we'll have updates on our next call and how that might impact our guidance. At this point, the guidance does not reflect any impact as a result of the steak test. We'll continue to give you updates as we move forward. Okay, thank you. Thank you. Our next question comes from the line of Andy Barish at Jefferies. Please go ahead. Your line is open. Hey, guys. Good morning. I guess it's kind of a connected question. Just the southeast and southwest markets are your lower-volume markets coming out of the Zoës conversions. Any specific kind of plans in that region of the country, or does it really tie into kind of the real estate pipeline and just continuing to build out and drive awareness? And I'll have a follow-up, I guess, shortly. Hi, Andy. Thanks for the question. The southeast and the southwest are at $2.3 million AUVs and $2.4 million, respectively. And really, those AUVs reflect a relatively young fleet of restaurants in those markets, and that's what's driving the AUVs. So we don't see a need to do anything to necessarily impact those markets any differently, but just continue to execute on incredible hospitality and amazing culinary innovation, and that you should see those results continue to increase like the rest of the fleet. And then anything on the real estate pipeline you can share with us? Obviously, a good start with 11 so far quarter to date. Just on the state-by-quarter or the balance by type of stores, new markets, developing markets, etc.? Yeah, so our real estate pipeline is very robust. The team's been executing really well on our strategy. So we have a very balanced pipeline, meaning about 10% in established markets and then another 10%-20% in those emerging markets, excuse me, the greenfield markets, which are those brand new markets like Chicago where we'll be opening up. And the rest of it's in our growth and emerging markets. And so we're executing against that, feel really good about it, built in the appropriate buffers in the timeline, and we're envisioning a fairly even spread of restaurant openings throughout the year. Great. Thank you very much. Thank you. Our next question comes from the line of David Tarantino at Baird. Please go ahead. Your line is open. Hi, good morning, and congratulations on a great 2023. My question, Tricia, I had a clarification question on the Q4 revenue number. Just looking at relative to how we and others modeled it, the upside on the revenue was not quite as high as the upside on the comps. I was wondering if you could maybe if there's anything to call out related to something outside the comp line that might have influenced that outcome. Maybe in particular, as a follow-up, if you could comment specifically on what you're seeing in the most recent class of openings in terms of average unit volumes, that'd be great. Thanks. David, thanks for that. Certainly, I'll start with the last part first. Our new restaurant openings have been exceeding our expectations both on the AUV side as well as on the restaurant-level margin side. So really pleased with, again, the real estate process and the pipeline and what those new restaurants have been delivering and continue to deliver throughout the year. So when we think about the models themselves and how you might have been looking at it, it looks like the impact of average weekly sales doesn't properly reflect all of the seasonality associated with our business. So the Q4 is our seasonally softest quarter with the lowest average weekly sales of any quarter for us at CAVA. At the same time, I think there could have been a little bit of an overestimation of the impact of the 53rd week, keeping in mind that week had holiday impacts on top of the seasonality component to it. Great. Thank you very much. You're welcome. Thank you. Our next question comes from the line of Chris O'Cull at Stifel. Please go ahead. Your line is open. Thanks and congrats on an excellent year. Brett, what are the key performance goals for the store ops team as you enter into 2024? I was hoping you could describe maybe the KPIs that will measure that progress and maybe where those measures are today and where you want them to be at the end of the year? Yeah, hey, Chris. Thanks for the question. From an operations metrics, we have our proprietary ops scorecard where we have seven key operating and financial metrics that we track. And that's everything from that incorporates customer experience scores to management of COGS and labor, ensuring accuracy, consistent portions, as well as food safety adherence and accountability. So we are looking at throughput opportunities as well. We think that they exist, but we want to make sure we're not pushing on the gas pedal too far, too fast. And so we are testing some different labor deployments to take advantage of that opportunity as the year progresses. Great. Thanks. Thank you. Our next question comes from the line of Sharon Zackfia at William Blair. Please go ahead. Your line is open. Hi, good morning. A question on development. As you've accelerated greenfield throughout 2023, have you encountered any surprises, kind of positive or negative? How has that kind of pipeline been manifesting? Obviously, you raised the 2024 outlooks. Are you seeing more predictability in timing of delivery of sites and ability to get them up and running as you would have anticipated maybe pre-pandemic? I know there's been a lot of moving parts in getting units up and running the last few years. Hey, Sharon. Yeah, certainly lots of moving parts. Us, like many others in the space, have seen development pipeline timelines expand, so increasing a month or two over the past few years. Nothing's really surprised us. We were anticipating there would be challenges, built that into our pipeline so that it would be appropriately reflective of what we could deliver. We're continuing to just evaluate where the opportunities are. I mean, we're in 24 states today, but still a lot of white space across the country. So the real estate teams are out scoping out new markets where there's lots of opportunity, and there are many of them. So if there was ever a situation where a market may not be materializing the way we'd like, we feel like we've got the appropriate mindset to develop patience and find the right sites that are going to deliver the right returns and drive that overall value. Can I ask a follow-up? Have you changed the way you build brand awareness as you're doing greenfield, or is it really similar to kind of what the strategy has been over the last five or so years? Hey, Sharon. It's Brett. We have updated our local store marketing campaign to drive increased local press awareness and elevated our community day. I'm excited that our recent opening in Hollywood, California, had a record-setting community day of raising donations for our philanthropic partner in the market. So I think the team has done some nice tactical improvements to drive greater awareness around openings at a local level. So we have done some things around that. And as we open up Chicago, given the size and scale of the market, we will be doing a bit more of an upper-funnel type campaign to announce our arrival in the market. Okay, great. Looking forward to Chicago. Thank you. Thanks. Thank you. Our next question comes from the line of Andrew Charles at TD Cowen. Please go ahead. Your line is open. Great, thanks. I wanted to ask about the digital pickup lanes. How is that performing versus the original expectations for about 10%-15% higher volumes? And what I'm really trying to understand is if you're approaching the point where it makes sense to either ramp the mix of new stores above the 50% run rate or test retrofits or relocations, just given the favorable ROIC you're likely observing. Hey, Andrew. So we've got 31 pickup lanes today. And the pickup lanes do continue to look better from an overall AUV perspective and slightly higher from a restaurant-level margin perspective. What we're thinking about and how we're executing is making sure we're being thoughtful around the choices we're making on pickup lanes and don't get pressured into chasing a number. And so while you mentioned a 50% target itself, we're likely going to be over a third but less than 50% as we think about pickup lanes going forward. Our focus is driving the best cash-on-cash return that we possibly can and making sure that we're exceeding those 35% targets for cash-on-cash return and really delivering a lot of value. So what we don't want to do is feel a lot of pressure to really go into a site and compete with a Raising Cane's or a Chick-fil-A on something that we really can't underwrite in the same way and get us in a spot that doesn't drive those returns in the attempt to meet a goal to have as many pickup lanes as possible. Great news is we perform really well, whether we're in line, freestanding, or have a pickup lane. And so we're just making sure we can optimize those returns in the best way possible. That makes sense. Then, Tricia, last quarter, you flagged to not expect materially positive comps for 1Q24 given the tough comparison. Now that we're two months into the year with unfavorable weather for the industry in January that's improved in February, are there any other pieces that you call out for modeling 1Q comps? Thanks for the question, Andrew. As you all know, we don't give interquarter guidance. So we're not going to speak to what we're seeing in Q1 itself. But I will say that nothing's changed our approach to our guide of 3%-5% as we thought about it last year and into this year. Appreciate it. Thanks. Thank you. Our next question comes from the line of Nick Setyan at Wedbush Securities. Please go ahead. Your line is open. Thanks. I just wanted to hone in on margins a bit, just what you guys expect in terms of inflation, food cost inflation in 2024. And with 3% pricing, why we couldn't, particularly with the upside in Q4, why we couldn't see flat to down COGS in 2024? Nick, thanks for the question. When we think about food cost inflation, we're thinking low- to mid-single digits. But there are some increases, particularly around chicken and olives and olive oil. So our chicken, we had great pricing last year related to chicken. And as we go into next year, there'll be some increase in that area. And then also, olives and olive oil were impacted by an unseasonably warm climate or temperatures overseas in Europe where we secure our products that have some impact overall. So we wanted to take that into account as we're thinking about COGS and what that will look like. The other piece around COGS is 2023, and we've talked about this before, but really benefited from very high same restaurant sales growth that was creating efficiencies in COGS from a waste perspective and other items. And so that will drive into the impact on COGS as you go into 2024 itself. And then just in terms of the unit growth outlook, would you mind telling us what Q1's number of units might look like? From a Q1 perspective, we've already opened 11. Keep in mind Q1 has 16 weeks. I'm anticipating that openings will be fairly even throughout the year. Thank you. Thank you. Our next question comes from the line of Brian Vaccaro at Raymond James. Please go ahead. Your line is open. Hi, thanks. Just following up on Nick's question on store margins, could you help us parse out the incremental labor versus other investments that are embedded within that guidance? And then add a quick follow-up. Yes. So as we talked about on the third-quarter call, we did invest in incremental labor in Q4 of 2023, about 120 basis points. And that'll be offset with just the natural leverage in labor over time as AUVs grow. But the other thing to think about is other investments that could be related to our pillar around running great restaurants every day and every shift. So think about things like increased managerial resources at higher-volume restaurants that would drive increased productivity and further pipeline depth, but at the same time, creating productivity over the long term. So there'll be investments that we're making that we've shared. And then it'll be offset by leverage overall as we continue to scale and grow the business and the restaurants. I think you mentioned opportunities to improve throughput in certain markets as well. Is there a thought that you'll need to add hourly hours per store in a significant number of stores? Hey, Brian. It's Brett. No, we think there's opportunity to be more efficient with our labor deployments and recalibrate how we deploy labor along with some of the aspects I talked about in relation to the Connected Kitchen Initiative that will drive even greater productivity through our data. All right, great. My real question kind of is just, can you provide some more color on how the converted Zoës units are performing? Perhaps you could touch on the year-on-year comp growth to the class of the 2021 conversions or some color on where AUVs are currently running for the class of 2022 conversions. Thank you. Yeah, so we're pleased with our Zoës conversions. We look at those as new restaurant openings. We evaluate those with the others. As I mentioned, our new restaurant openings are exceeding our expectations and really excited about Zoës conversions as well as our organic ground-up NROs. Thank you. Our next question comes from the line of Rahul Krotthapalli at J.P. Morgan. Please go ahead. Your line is open. Good morning, guys. Thanks for taking my question. Can you elaborate a little more on the three-point design, Brett? Are you guys trying to lower the cost of the box, or are you actually scaling up and increasing the cost while you're trying to increase the movement space in the box? Yeah, Rahul, thanks for the question. No expected change in the cost of what we've guided to. This is really about warming up, using some of our refreshed palette colors, some environmental aspects, softer seating. We think we have a great opportunity. You've seen the full-service model be challenged to the modern consumer to deliver a relevant value proposition. And we think about value proposition as quality, relevance, experience, and convenience. We're able to deliver that quality food, relevant food, Mediterranean diet, number one-ranked diet, seven years running, really that unique cuisine where taste and health unite, convenience, certainly with our digital channels and our fast format, and then experience. We think we can deliver great experience and an enhanced dining room aesthetic to drive even greater physical occasions as we drive greater digital occasions. We're just kind of reimagining how we show up in our dining rooms to make it more inviting and drive greater in-restaurant occasions and occasions across all channels. That's perfect. Thanks for that, Brett. I have a follow-up. Thanks for all your color on the Connected Kitchen Initiative. Looks like there is a lot to look forward to here. Meanwhile, are there any low-hanging fruit within your existing operational structure that can be addressed outside this in a shorter time frame? Anything related to labor or in-store ops, anything that you guys can discuss here? Yeah, I mentioned it just a bit ago. We think we have an opportunity to be more efficient with our labor hours and how we deploy our labor when we do our prep versus our peak times and how we create more consistent labor efficiency across both day parts. And we are actually, that test was deployed this past week on the initial labor redeployments. Understood. So does this involve any movement of prep off-premise, more prep off-premise, or anything else related of that sort? No, it's simply balancing out prep and cook and deployments to better match the revenue curves of the restaurants. Perfect. That's helpful. Thank you. And there are no further questions in the queue at this time. So I'll hand the floor back to Brett for the closing comments. I want to thank everyone for joining the call today. Before we sign off, I want to say once again how proud I am of our CAVA team for delivering a record year in 2023. With 72 net new restaurant openings and success in new and existing markets, we proved the portability and broad appeal of our Mediterranean concept. Our guests were resilient, as evidenced by 10.4% traffic growth, and our powerful unit economic engine continued to deliver impressive results. We've built a solid foundation for the growth we can achieve as we create the next major cultural cuisine category. And we are making thoughtful investments to drive long-term growth, profitability, and shareholder value. Thanks again for joining us. Happy spring on Friday. And I look forward to speaking with you next quarter. Thank you. This now concludes the conference. Thank you all very much for attending. You may now disconnect your lines.