Hi, everyone. I'm Brian Harbour. I cover restaurants and food distributors at Morgan Stanley. This is our last session of today, which is Krispy Kreme. Josh Charlesworth is incoming CEO. Incoming. Haven't officially, but close. We're close to passing. Feels like it, for sure. Yeah. Right. Agreed. Jeremiah Ashukian is the CFO. Thank you, guys, for joining us here. Maybe, you know, just given that you're... Josh, Josh, you're not new to the company, you're, you know, in a new role. Jeremiah, you've joined recently. What's you know, what's kind of surprised you about, you know, your new roles, perhaps? Yeah, you're almost yet to start, so maybe I'll go first on surprise. But, yeah, I heard about it coming in. So I spent 21 years at Mars Incorporated as the CFO of Mars Wrigley, North America, before joining. Growth was much harder to get at, and I think the thing that surprised me most, you know, operating in a sweet treat space like this, was the potential for growth of this company. There's so much opportunity to grow. It's white space in the U.S., in markets in the U.S., like Boston, Minneapolis. It's white space in channels like QSR and club. It's international, it's low frequency. There's just so many opportunities and levers to grow the business. That it's very much around, you know, how we start to prioritize and focus those things. So I wasn't expecting that much, which you would have seen us take some action around brand and sweet treats early to help create some focus, and you would have seen the recent announcement around strategic alternatives for Insomnia. So yeah, by far, you know, growth. Yep. Seven years in Krispy Kreme. I don't think I'm surprised, but I will say that coming into the role of CEO, I previously was COO. The growth that Jeremiah talks about is so clear that I think a lot of my focus as the CEO is gonna be about maximizing the potential of Krispy Kreme, because of those so many growth levers in front of us. And the strategy Mike Tattersfield, our outgoing CEO, established is pretty straightforward: Make our donuts available in more places and just keep reminding people of the joy that is Krispy Kreme to eat, but actually, perhaps more importantly, to give and share with others. Given that the number one reason why somebody may not purchase Krispy Kreme is it's just inconvenient, let's get those donuts out to more places. We're still in a fraction of the potential we could be in. 13,500 locations sounds like a lot, but they're generally grocery convenience stores, and a big CPG player would be in millions. And we're still relatively infrequently purchased, so less than 3x a year. In that context, for me as coming into the role, it's really focusing on making sure that the operations of the company live up to that promise and servicing all this growth. We make 5 million donuts a day already. That's a lot to get perfect every time. And with, you know, channel opportunities like QSR being an obvious one, the standards expected by our customers are gonna be high. So that's really I think the only shift you'll see is a real focusing in on leveraging that growth opportunity. You have shifted focus somewhat versus the IPO, because at the time, you know, it was more about being a broader sweet treats leader, and you had a couple different businesses. Now, you're shifting to basically just a fresh donut focus. So, you know, what was behind that? Maybe it's something to do with the fresh donut TAM. Has anything else changed in your mind? Yeah, if we go even back before the IPO, which was in 2021, I joined the business in 2017, shortly after it was taken private. And you know, we were exploring what's the right strategy to deploy. And I think by the time we get to the IPO, we had three really interesting growth businesses: the fresh donuts in new channels and internationally, which is obviously our focus today, a longer shelf life range, and Insomnia Cookies. And so we talked about all three, as you'd expect in an IPO. I think what's happened is the longer shelf life proven to be interesting from a consumer point of view, but not necessarily from a business point of view. So we exited that. And then the fresh donuts, particularly... I mean, I think we said that our long-term goal was 20,000 points of access at the IPO. Then we went to 50,000, then we went to 75,000. Clearly, the TAM, as you say, of these fresh donuts in new countries, we're adding three to five a year now. Actually, we're gonna be more like seven this year, I think, aren't we? Of course. The channels that we realize that we can distribute these fresh donuts into, that aren't cannibalizing each other, has made us realize that that opportunity is so big that let's focus all our resources, not just money. You know, every morning when we get up in the morning, I just wanna think about donuts. I wanna think about donuts and cookies. The cookie business turned out to be a great investment, turned out to be a, you know, phenomenal business that was a college business, that became a city business, now becoming a suburbs business, and Insomnia Cookies, now international. There's so much growth there, but that requires a lot for a team to focus on as well. Let's allow another team to focus on that, and we'll focus on Krispy Kreme. Okay. Let's say you focus on the U.S., first. Your business is more occasion driven than, you know, some of the companies I cover, for example, right? It's a little bit different. Maybe just talk about how that form of demand is holding up. You know, noted some improvement into the Q4. Is that more holiday driven? Do you think it's just kind of, you know, "Look, some of the collaborations we did are working"? What's driving that, and how is that holding up? I wouldn't say it's an improvement into the Q4, more of a continuation of the great momentum we're seeing. Q3 reflects the summer months, Q4 is filled with holiday season and celebratory events. And so creating momentum and excitement around the brand, an infrequently purchased brand, a brand that's often a gifting, sharing brand, is always going to be leveraged best in the Q4, for us, around those holidays we had. Yes, we announced a fantastic Halloween with our Scooby-Doo donuts. We have Elf donuts out in the market right now, if any of you are interested. We create an enormous amount of energy around these specialty occasions by creating talk about the donuts people want to talk about. And the media impressions we generate 40 billion of those a year are all about getting buzz toward the brand. And when people come to buy, in this case, Elf donuts, they tend to buy Original Glazed and our other products at the same time. And so, yeah, we're pleased with the Q4. We said that in the earnings call, but we expect to be, 'cause that's when the excitement comes to the brand. Yeah. Yep. Yeah, I think, you know, very much permissible time, so it very much follows consumer kind of sentiment. So, you know, now is the time where things like treating yourself is more permissible for consumers, so they're just naturally more to pick it up. As Josh mentioned, we started the Q4 growing double digit again, so we feel pretty good that demand is holding. Okay, makes sense. Do you have a sense for, y ou know, in that vein, you do have generally a lower frequency business because it's occasion driven, and that's, you know, you said that's how you want it to be, right? But I guess, the question is, do you have a sense of kind of what share of U.S. consumers you're not reaching or haven't bought Krispy Kreme? Because it's not just necessarily about, like, where the footprint is, but who do you think is kind of not coming in the door? Well, as I mentioned earlier, the number one reason why someone doesn't purchase is convenience. And so they may know the brand. Often when I introduce the company to people, it's, I mean, even though it's in 38, soon to be 39 markets, only $1.6 billion of revenue. People are like, "Oh, I thought the brand would be bigger than that," is because we're not convenient, we're not available to a lot of folks, even in America. So, it's about 85% of people will not have bought Krispy Kreme, to answer your question directly. So it tells you how much upside there is, putting it in front of them. And I think that's why we see when we put it in different channels, we put it in drugstores, we put it in a QSR environment, as well, of course, as subway stations and in our own shops, we see very little cannibalization between them because people aren't going as a destination that often. There are some, they're going for another reason to the Walmart, and they go, "Oh, wow! There's donuts here. I forgot about those. I haven't tried those since I was a kid," or, "I heard about that on social media, that they've got these cool donuts. Let me try them." But yeah, the penetration is still very low, and it's a penetration strategy that's our biggest opportunity, both in the U.S. and in new markets around the world. What have you learned about promotions just in the past couple of years, right? I think you've, you know, done a few different ones. Yeah, maybe I can start and build, and you have a bit of history, but I would say lots, in short. Obviously, promotional activity is important for us as we think about driving traffic and volume in the business, but also driving the right ROI on promotions is something I think we've learned more recently, I would say. We are building a lot of capability in this space, so call it Revenue Growth Management. You know, how we activate list price changes, how we think about premiumizing the portfolio, how we think about price pack architecture, and then more importantly, how we drive the right return on investment on our promotional activity, 'cause it is a way for us to drive price realization in the business by getting smarter at this. I think you would have seen us walk away from unprofitable promotions that we ran last year. I think Pizza Pump was probably the poster child for this, where it was great for driving traffic and driving volume, but terrible for margins, and this is where we matched the price of donuts to the price of gas for a very long time. So this whole point around when's the right to go depth, when's the, you know, the right frequency as we think about promotional activity, and then how do we pair it with also ensuring that we're buying something at full price versus just offering a discount on a single product, so. As well as the financial angle, there's this sort of top-of-mind awareness point as well. I mean, what's the point of, you know, of training the customer to look for a discount? There's no real benefit to that. But there is a benefit to getting a lot of attention on the brand for perhaps a one-off type event or something that's really differentiated. So, you know, we've done things like on Friday the 13th, get the second dozen for $0.13. Media picks it up, they can talk about Friday the 13th. Tax Day, what was it? We will pay the tax, I think, was on the second, or we'll- you only- we'll only charge you for the tax, I think it was on the second dozen. We actually went even further recently on World Kindness Day. We actually said the first 500 dozen doughnuts that was picked up that day at every doughnut shop would be free for you to then give to somebody else as a gift. Created enormous media awareness, and I think same sales were up 30% as well. So because of course people come to the shop, and they buy other things or what have you. So those kind of promotions that really break through and put the brand top of mind are the ones that I'm most excited about, as opposed to normal discounting. Okay. It's so infrequent, people can barely remember what they last paid for it. Yeah. It's more about bringing excitement to the brand. Right. And then maybe just on the footprint itself, remind us, are you through, 'cause you had some closures? Are you through the closure program at this point in the U.S.? Yeah. No, I think we are. So we went from about 240 hubs last year, tail end of last year, down to around 225 now. It was quite an extensive program, so it's not just rationalizing unprofitable hubs without spokes, if you will. We also looked at the hubs that didn't have spokes, and where we could add, you know, routes and to those areas. We, you know, we've done so as well, and we've seen profitability improve significantly. Obviously, as we reassess the network for DFD expansion in new channels, essentially QSR, we'll probably slow our rationalization of hubs in the space, knowing that there could be potential use for them in the future, so. You know, sometimes I get feedback about, oh, strange language, so at least it's worth saying what we mean by Hub and Spoke model. Yeah, we can provide people. One of the big shifts in the strategy in the last few years is to recognize that the donut shops that hopefully you're all familiar with, where we make the donuts and you can get a hot donut off the line, they can make a lot of donuts. They can make 270 donuts an hour, and that's more donuts than we can sell on-site. And so the strategy has been, well, let's sell those same donuts somewhere else, and hence why we've expanded into these Points of Access, so grocery stores, convenience stores, and what have you. The other thing is, and so typically, you can, by adding spokes to the hub, is what we'd call it, from where we start to then distribute out, we can significantly improve the efficiency and productivity of that site. Not obviously the capital return, but indeed, the lot of fixed costs there can be covered, and hence you get margin flow-through. But some of them were old, very old, and just can't be converted, and it was closing some of those that was behind that strategy. Now, we are finding the economics are so compelling that some of the ones we decided not to convert, we are adding hub spokes all the time. But clearly, we need to move to a phase, and we talked a little bit about it in our last earnings release, of investing for the future in modern facilities that can support not 40 or 50 of these off-site locations, but hundreds of points of access, in order to realize the growth opportunity that we have. That sort of leads to my next question, which is, would you expect net hub growth as we look over the next year or two? Because there are some new markets that you're going to bring on, but then also to that point, you know, can you sustain double-digit DFC door growth with the current hub footprint, or are there some existing markets where you, in fact, need to build more hubs at this point? So, with, I'm sure we'll talk about it, the opportunity of entering the QSR channel and doing a pilot with McDonald's, which we've been doing this year, we've obviously looked at what it would take to support a customer like McDonald's. And so we've done a lot of detailed work on this, and we think we can support 6,000 incremental points of access with the existing capacity. But that would leave certain parts of the country completely not served yet, and still some underserved even if we didn't do a McDonald's expansion. There are parts like New England, Upstate New York, Minneapolis, where we don't sell at all, and there are just other cities where we're just maxed out, particularly Florida, California, where they just love our donuts. So, we do expect the net hubs to start growing now. We're just opening one this week in Philadelphia, for example, modestly, sort of 5-10 next year, I would expect, but then it would expand much faster after that as we support the growth. But, you know, I think that it's been a shift from utilizing the existing capacity to now starting to think about where we can put in capacity to support this growth and what is now a proven growth and a value creation model. Yeah. As part of adding spokes and adding spokes to hubs without them, right? Some of that is also margin optimization, improving margins of your U.S. stores, and you've always used Europe as the example of a more dense, higher-margin market. But where do you think you are on that journey to sort of optimize the margin footprint in the U.S.? Maybe, can I just talk a little bit about specifically, maybe- Yeah, go ahead. -you go into where, why you can't see it yet, maybe. Yeah. Because, like, you know, in the U.S., we feel like we are really motoring on this now. We can see the cities where we are adding the spokes, benefiting from these additional spokes to the bottom line. The model was invented in the U.K. and to a certain extent in Australia by franchisees some years ago, and we've brought it here in the U.S., and they've really got to a level of maturity where we're consistently delivering over 20% margins, with 40%-50% of sales off-premise. We're still at 25% in the U.S., so we still got a way to go, but I believe that we can get to that long-term, long-term number. You can't see it yet in the numbers because of a few things. Yeah, and so there, there's not only kind of driving top line and absorption of the hubs, there's also the productivity work that's happening underlying that as well. So things like demand planning to drive improvement in some waste, and in labor efficiency, things like digitization and automation, where it's possible, things like design to value are definitely kind of areas that we're—I would say we're probably early innings on the margin, productivity kind of plans versus, you know, a bit more ahead of the game on the productivity. In the U.S. specifically, you know, we saw decent improvement in margin in the Q3, so 30 basis points we were up. When you actually de-average what was happening, 'cause there's a few things in the U.S. segment, like Insomnia, in addition to the fresh doughnut business, we were up well over 100 basis points in margin in the U.S. fresh doughnut business in Q3, and that's despite having to lap a bit of a headwind where the performance of the business wasn't strong last year, so we needed to replenish the bonus accrual as well. So we were getting closer to almost 200 basis points in margin expansion. So, you know, we're definitely kind of seeing the improvement sequentially and year-over-year come through. Okay. Why, why don't you talk about McDonald's, a bit? Which as many people I'm sure know, you're testing, serving your doughnuts in McDonald's restaurants in Greater Louisville still, right? Is this the only partner you're working with at the moment? How might you think about working with others? Yeah, we're testing with 164 restaurants across all of Kentucky with McDonald's. We've been doing that since, I want to say, March. And you know, McDonald's, obviously, not just a big partner, but a very, very impressive operator, and is very diligently running that test. We are learning from it, and I'm sure they are before a final decision is made by them. But obviously, we're in advanced discussions to consider a rollout. And because we're in those advanced discussions, and you know, the sheer size and opportunity of the McDonald's QSR expansion, why would we be, you know, looking at anything else? It is a significant growth lever for us, and we want to do, you know, if and when a decision is like made by McDonald's like that, we'd want to do it very, very well. So we appreciate taking this time to be diligent. We're taking the time to improve our operations and we wouldn't want to start chasing growth. We want to make sure it's really high-quality, sustainable growth. But, you know, absolutely, if it doesn't work out in the discussions with McDonald's, the QSR channel is, in our eyes, proven as a great growth driver. Whether that's in the U.S. or around the world, we think that'll be really interesting. I hope it's McDonald's. They've been great to work with so far, and I think that our brand also overlaps really well with them around the world, but that's further down the road. Do you think it would work, in theory, anywhere in the McDonald's system? I think most of it, as far as we understand it, yeah. And, you know, I think Kentucky, it, you know, from our view, it works there. And so, we would be hopeful that it would work everywhere. And, you know, I really, really hope it works out because I think that our customers are really looking for a Krispy Kreme when they're out and about doing other things. And so, you know, being reminded of that, as much as they will be when they go to the McDonald's, which obviously a much higher frequency business, will be great for the brand. And indeed, we talked a little bit about seasonality earlier. I think it's very complementary. It's stronger in the summer, as far as I understand McDonald's. We're stronger in the colder months, so it'll bring some stability there as well for our operations. So a really, it'd be a great partnership, and we're obviously doing our best to make it happen with them and hopeful that we're able to get to an announcement. Okay. Great. And then, you know, how do you think about, y ou alluded to it, but how do you think about kind of capital investment ahead of that? How long would that take? You know, how much do you think you'd have to do to be able to serve, in theory, kind of their whole system? We can do just under half their system pretty quickly. We just need trucks and drivers and some infrastructure around that. But I'm sure, if, if, they do make the decision, they're interested in the total system, so we've been evaluating that. And anyway, DFD expansion is so big, not just with McDonald's opportunity, but QSR in general and other channels. I mean, we've recently opened DFD with Amazon Fresh. I think the club opportunity is really big. We're in Costco in various countries around the world. I think it could be a big opportunity in the US, drug and so on and so forth. And indeed, if we were going to a McDonald's or a QSR location, we'll be driving past a Walmart on the way. So we're only in a quarter of the Walmarts already. So there's so many places to get behind an investment strategy, without it being fully dependent on McDonald's. If we did get to a rollout of McDonald's, you're probably talking two to three years, just because of the nature of development. Although we'd obviously look, you know, once that decision is made, to fast track some elements of it. We think that production hubs we may build them slightly differently, than we have in the past, and that might be a way of speeding it up. But, you know, it's you know, investing behind what is a great return on capital is a relatively easy decision to make right now, given the expansion we have with all these customers. Okay. Makes sense. Let's maybe just talk about the costs and operation side a little bit. Could you, you know, maybe just talk about the cost outlook for next year as you see it at the moment on the food and labor side, any sort of, like, labor investment that you think you'll have to make? Yeah, it's a bit, it's a bit of a mixed bag, to be quite honest. We're seeing some commodities and things like wheat and edible oils come down, so deflationary. We're seeing some commodities like sugar remain at 10- to 12-year highs, and so we'll, we'll expect continued kind of inflation next year. We talked about this, I think in Q3, where we expect high single-digit inflation on the commodity basket of goods for us. Which would include things like cartons as well, which is unhedgable, so it's a bit of variability in there, but for the most part, we're thinking high single digit. Labor, obviously, you can't hedge, and there's a lot more potential for variability there. We'll continue to invest in our Krispy Kremers, so we do expect high single-digit inflation in labor. We're also dealing with things potentially like California, where legislation will change and therefore, labor and inflation in that market could be as high as, you know, mid-teens. Yeah. We do expect a continued kind of inflationary environment as we head into 2024. Yeah. Will you handle that similar to others, where you obviously take wages up that much, price to offset it, presumably? Yeah, that's right. I mean, pricing will always be a play a role for us and be part of our strategy. And the plan for us is to take price where we can to offset as much inflation as we can. We do recognize that we're heading into a different environment over the next 12-18 months, and we're being very cautious around, you know, how much pricing we can take, and where we take it. And things like I just mentioned, the early innings on productivity improvements, labor efficiency, waste, and some of those other things are gonna play a bigger role for us next year. So we're definitely kind of looking at how to manage margin more holistically than I think we have in the past. Yeah. Could you talk more about that? What do you think will be kind of most impactful on, on just some of the, you know, productivity stuff, any operational changes, et cetera? The largest part of our cost structure is labor. So obviously we want to minimize waste and improve productivity and yields in our manufacturing processes, but labor efficiency is always going to be the biggest unlock. And fundamentally, our primary strategy for that is hub and spoke productivity and, you know, actually expanding the spokes and leveraging the fixed costs. That's our primary focus. On top of that, though, I will admit that we still make the donuts the same way that we have for probably decades. Yeah. They are all hand-processed, for example, decorated, literally. These Elf donuts here, a Krispy Kreme will have diligently decorated them, him or herself, by hand. Which you'd think, oh, well, that's cool, but the consumer doesn't know that. They don't appreciate that. They don't necessarily see that. And so, there are definitely automation opportunities that we are testing right now, and to a certain extent, deploying already, particularly what we call in-line icing. So you can imagine a donut flips over into a bath of chocolate and comes out again, through to more complex things like a robot putting the donuts into the box or onto the tray. Those are happening, and could well be significant. I mean, just I know the number in the U.S., we spend $100 million on making the donuts just in the U.S., labor. You know, obviously, that would be a material improvement if we could find ways of doing that more efficiently in the long run. And I believe we would maintain quality and consistency, which is becoming increasingly important to our more sophisticated customers now. Right. Is there a situation where U.S. margins, you think, could be similar to the international, you know, the markets that you own, at least, right? There are density differences, but is there anything limiting that? Well, we're already seeing in markets like Atlanta, L.A., where we are well-established with the Hub and Spoke model and have hundreds of Points of Access, margins that are at or even higher, Miami, another one, than in Europe. So definitely. Now, the whole system and the nature of the geography of the U.S. has always had me assume that that would be something that maybe we couldn't quite get to a, you know, U.K. level. Right. I think my views are evolving now, because when you think about distributing to a customer like a McDonald's through the whole system and all the places on the way to McDonald's that we could also sell in, suddenly you start to think, "Well, we could make this, this, this look like an international efficient system." And so I think it's really, really exciting to see the growth of DFD in all these new channels, and I believe it not just gives us top-line opportunity, but the opportunity to get efficiency and get density, as you describe it. Yeah. Touching on the international side, maybe at least in some of the major markets, what's kind of your outlook there for 2024? Which do you think will be strongest? I think, you know, the U.K. has perhaps been a bit weaker this year, but, you know, how do you think these trend into next year? We've got an interesting portfolio of international markets. Obviously, the franchise markets, where we're seeing a lot of new growth, we're opening in Paris just next week. We think Europe is a really, really high growth opportunity for us. Really interesting. You know, we will see a lot of growth from those new markets, whether it's franchise or some of them we own, like Japan and Canada and Mexico, and we also see those as very high growth engines. The availability to donuts is quite low, the brand is loved, the model is profitable and working. We're adding production hubs in Japan and Canada, as we speak, and Mexico, to support long-term growth there. So it's actually a very similar story, as we've discussed a lot for the U.S.. U.K. and Australia are more advanced in their distribution levels. The Hub and Spoke model is older, but there are still significant opportunities, interestingly. We are not really in grocery stores in Australia. We just went into Woolworths in the last year. The other big player is Coles. We're not really in convenience stores in the U.K., so there's still some white space opportunity in both of those. So, this is what Jeremiah talked about at the beginning. There's so many places to grow. No wonder we're focusing on the donuts, not cookies or other things, when those are all the opportunities we have. So international, we feel good about, yeah. Remind us, which are the new ones coming next year? So we've got France, and then we'll roll out France, which is quite an exciting plan, a great partner there. What else have we announced? 'Cause I've got ones in my head that we haven't announced. I know. know. I'm looking at a chart of stuff we had disclosed or not. But we've got, we definitely think Europe is gonna be a big opportunity. Turkey is a big, growing, one that we have announced. And then, yeah, we've got some big countries to come. I'm gonna- Yeah. We haven't disclosed any. Yeah, I don't think we have. Yeah. Okay. Well, yeah, we'll wait for that in the future. Yeah. Could you remind us where you are on pricing currently in, you know, the major markets? And what have you learned kind of about, you know, timing that? So pricing right now is trending in the kind of low double digit across, you know, most markets. We do expect some of that to carry forward into 2024 as a bit of a tailwind for us, which is why we think we can take a little less price than the inflation rate and still kind of manage, in addition to kind of the productivity work we need to do. As I also mentioned, pricing, we're thinking broader about it. So there's lots of different levers that I won't go through again. But a lot of different levers we'll pull from a pricing point of view to drive net price realization versus just list price perspective. In terms of what we've learned, we need to be much more agile in this space. We need to be looking internally and externally of what's happening, what our competitors are doing, when we take, when we don't take, regionally, and all those types of things. So there's been lots of learnings, I think, in the last... And And you've probably been here longer than I have, like, last 12 months, I would say, in terms of how to, how to kind of manage pricing going forward. I'm really interested in specialty donuts, particularly when we're using branded partners. We're basically running out of donuts every time we do it. One way of addressing that is obviously is there an opportunity there to push up the price of the specialty donuts when it's worth it for the consumer? They obviously think it's worth it and maintain the more accessible price point of the Original Glazed. And so I think there is a learning there, which is around our ability to differentiate between the tiers more than we do today. Yeah, makes sense. Do you have a sense for your plans for next year or, like, when, when you would take pricing at this point, or you're still figuring that out? Yeah, we're still figuring that out. Yeah. But we will- We will, yeah. ... cover inflation- Inflation -strategy. Yeah. Right. Yeah. We look at it every quarter now. We used to look at it once a year. That obviously caught us out. And we look at it across the channels because we want—although we can't tell our customers what to then charge the consumer, we want them to be similar, so that the consumer understands they're getting a fresh donut and it's a similar experience, and therefore, price point across all those channels. Okay. Got it. What, as you think about your 2026 plans, how fast would you kind of expect SG&A leverage in there? Or how do you think about that, roughly? Yeah. Well, Josh and I have been talking a lot about, you know, the next phase of this business, and one of the most important things for us is gonna be drive consistent operating leverage year over year, you know, going forward, and really focusing on improving every line of the P&L, whether it's gross profit, whether it's contribution margin, or whether it's SG&A, for that, for that matter. I do expect us to start to bring the SG&A line down starting next year. We are obviously, as I mentioned, lapping some headwinds this year with the U.S. bonus structure. It was zero last year. It's, it's paying a bonus this year. International is obviously on the flip side because they're having a more challenging year, so we'll have a bit of headwind in SG&A internationally. But for the most part, overall, we'll be very focused on bringing that number down, starting to see that benefit to the P&L. The Krispy Kreme of today is the product of more than 25 franchisee acquisitions over the last few years. One of the outcome impacts of that is our teams are somewhat autonomous in the way they work around the world, and we have quite a lot of people trying to solve problems around the world locally. We think through better coordination of our efforts, we will have more efficiency, and in fact, we'll probably solve some of those challenges quicker, particularly some of the operating productivity areas that we've talked about already. So I do believe that SG&A is an opportunity as we do that, even though we'll be working to expand the business, it'll be in a different way. So it's, it's pretty exciting to think about all the ways through rigor and discipline and focus and KPIs and all those things that you'd expect from a great company, that we can take this growth and see the operating leverage drop to the bottom line over the coming years, including G&A. Okay. On the CapEx side, your target is 6% of sales. It's above that now. Is that gonna remain the case, you think, over a couple of year timeframe, if you're putting some money into the U.S. network to build that out? Yeah. The tick up that we're seeing this year is largely driven through foreign exchange. So that's playing an impact right now on the CapEx investment. We do expect around a 6%-7% CapEx range over the next couple of years, as we move through this. But then obviously, longer-term guide down to that 6% by 2026 is definitely kind of part of our plan. Yeah, 'cause we're talking about CapEx to support DFD. Yeah. But fundamentally, DFD is a low, fixed asset solution. A DFD door costs less than $2,000 to add to a grocery store. It's these production hubs that can cost $3 million-$5 million, depending on how big they are. And if we can put down ones that service hundreds and hundreds of points of access, we think that the return on the capital could significantly improve, get paybacks of less than three years on these investments, and then just keep utilizing these production hubs to the max. So, you know, you can see a couple of years of investment to support the expansion, but fundamentally, this coming back down to something lower will be more appropriate. That's what the model unlocks. Yep. Okay, sounds good. I'll, I think we're about out of time, so I will leave it there. But, very much appreciate you guys joining us. Thank you. Thanks. It's been fun to talk- Thank you about donuts. There are donuts outside if you want to grab. There, there are donuts all around, so You can grab a, grab a box. Give them, give them to others. You don't have to eat them all yourself, but you can if you want. Take care. Thank you. Thanks, everyone.