Good day, ladies and gentlemen, and thank you for standing by. Welcome to the El Pollo Loco first quarter 2022 earnings conference call. At this time, all participants have been placed in a listen only mode, and lines will be open for your questions following the presentation. Please note that this conference is being recorded today, May 4, 2022. Now I'd like to turn the conference over to Larry Roberts, Chief Executive Officer, Interim Chief Financial Officer. Please proceed. Thank you, operator, and good afternoon. By now, everyone should have access to our first quarter 2022 earnings release. If not, it can be found at www.elpolloloco.com in the investor relations section. Before we begin our formal remarks, I need to remind everyone that our discussions today will include forward-looking statements, including statements related to the impact of the COVID-19 pandemic on our business and strategic actions we are taking in response, as well as our marketing initiatives, cash flow expectations, capital expenditure plans, and plans for new store openings, among others. These forward-looking statements are not guarantees of future performance, and therefore, you should not put undue reliance on them. These statements are also subject to numerous risks and uncertainties that could cause actual results to differ materially from what we currently expect. We refer you to our recent SEC filings, including our Form 10-K, for a more detailed discussion of the risks that could impact our future operating results and financial condition. We expect to file our Form 10-Q for the first quarter of 2022 tomorrow, and we encourage you to review that document at your earliest convenience. During today's call, we will discuss non-GAAP measures which we believe can be useful in evaluating our performance. The presentation of this additional information should not be considered in isolation or as a substitute for results prepared in accordance with GAAP, and reconciliations to comparable GAAP measures are available in our earnings release. With that, I'd like to touch on our first quarter results and the progress we are making on our strategic initiatives. While the COVID resurgence heavily impacted our restaurant performance in January and early February, I'm pleased to say that the Omicron impact largely dissipated and became negligible in the second half of the quarter. System-wide comparable restaurant sales increased 7.8% in the first quarter, including a 2.3% increase at company-owned restaurants and an 11.5% increase at franchise locations. From an earnings standpoint, COVID related costs negatively impacted store level income during the first quarter results by approximately $2.3 million, while commodity and labor inflation also continued to persist, which I will speak to in a moment. However, despite the challenges, our teams managed the external headwinds well, and we earned pro forma diluted earnings per share of $0.07. More importantly, the launch of our Shredded Beef Birria limited time offer on March 17th significantly accelerated our top line momentum, which has continued into the second quarter with system-wide comparable restaurant sales growth of 12.4% through April 27th. This is our first promotion utilizing several new marketing strategies, so we are very excited by the positive results we are seeing and our prospects for the balance of the year. To further strengthen our business and accelerate growth in 2022 and beyond, we've been working on executing the four pillars of our strategic priorities during the quarter, which are culture, brand differentiation and awareness, customer service, and accelerated development. For today's call, I'd like to update you on two of the pillars. The first pillar I would like to discuss is brand differentiation and awareness. What clearly distinguishes El Pollo Loco from other restaurant concepts is our food, and this was clearly demonstrated by the Shredded Beef Birria launch. A couple of years ago, our team identified a popular California food trend in which shredded meat, housed in tacos and burritos, was dipped into a Mexican consommé and eaten similar to beef au jus. As we've said in the past, our food combines our Mexican roots with the culinary culture of Los Angeles, and our Beef Birria offering embodies this characteristic perfectly. Our take on the product consists of marinated shredded beef served in tacos, quesadillas, and burritos, and comes with a unique Mexican consommé dipping sauce, all served in a unique box with chips and salsa. The timing of the offer could not have been better for us as it coincided with the completion of new marketing strategies that have combined to make Shredded Beef Birria one of, if not the most, successful new product launches we have ever implemented. Our marketing campaign refocused on what differentiates El Pollo Loco, which is our freshly prepared food, and significantly increased our emphasis on social media. Not only did we increase our marketing spend on social media, we created new unique content across the major social media platforms, enabling us to send targeted messages to various user groups, particularly to our younger consumers. As an example, we created a dip and drip TikTok campaign to promote our Beef Birria offerings using multiple influencers. The campaign has resulted in over 21 million social media impressions and thousands of pieces of organic user-generated content created by customers online. We recently crossed 125,000 followers on TikTok, and the El Pollo Loco hashtag now has more than 120 million views on the platform. The Shredded Beef Birria product and our messaging clearly resonated with our customers as we experienced a strong acceleration in our birria sales even before our TV marketing went live. Shredded Beef Birria product mix reached 12.5%, which helped drive new company, franchise, and system sales records three weeks in a row during March and April. To build upon this excitement, we promoted the birria burrito on National Burrito Day, which resulted in a record sales day for the system. Sales mix for Shredded Beef Birria remained above 10% for six straight weeks, and as a result of this success, we're testing the use of the shredded beef product for future LTOs to further diversify our offerings while still staying true to our L.A. Mex positioning. Next up on the marketing calendar are Tostadas, which was our strongest limited time offer promotion last year. Tostadas are a customer favorite, and we believe they will be successful once again, especially when combined with our new marketing tactics. Looking to the longer term, we are furthering our research and customer segmentation efforts. We believe that COVID has changed the way consumers access our brand, and we have active research underway in overall customer segmentation, value, and the family meal group occasion. In addition, we continue to invest in our loyalty, delivery, and digital marketing platforms to improve the user experience and to more finely segment consumer data in order to increase the effectiveness of our promotions. These platforms continue to grow, with e-commerce now contributing over 12% of our sales mix and delivery approximately 8%. Needless to say, we are very excited by our marketing initiatives and believe that they will continue generating strong sales results. That brings us to our next pillar, customer service, which, because of employment issues, has been a challenge across certain segments of our company-operated restaurants. While things have improved slightly, hiring and retaining employees has been challenging in a number of areas, especially Las Vegas and East of Los Angeles, where there's heavy competition from casinos and warehouse facilities. In addition to our cultural initiatives launched last year, we are taking additional actions to recruit, train, and retain team members. These include adding both external and internal recruiting resources, further wage adjustments, retention bonuses, revamped training programs, and other incentives. While these may result in incremental cost to our business, we are confident that they will be more than offset by increased sales from improved customer service. While we have many company-operated restaurants executing at a high level, we are very focused on improving our operations. To improve execution, we have rolled out a new operation scorecard and tools to enable our area leaders and general managers to better manage their restaurants and remedy issues as they arise. We've also made drive-through execution the number one priority for all our company-operated restaurants. With approximately 55% of our sales coming via the drive-through, we believe better execution has potential to significantly improve sales at company-operated restaurants. Longer term, we continue to work on initiatives to simplify our operations, including additional product reductions, revamped back-of-house processes, new equipment, and a revised menu board. As the gap between franchise and company sales performance demonstrates, many company-operated restaurants have a significant sales opportunity by improving their operations, especially at the drive-through. As evidenced by our system sales, El Pollo Loco is resonating with consumers. I am confident that our company operations will significantly improve, which will just further strengthen our brand. In summary, we believe the strategic initiatives we've put in place are gaining traction and positioning the El Pollo Loco brand to capture the opportunities ahead. Most importantly, I'd like to thank all of our team members and franchise partners for their passion, commitment, and dedication in making this brand and this family truly special. With that, let me briefly review our first quarter financial results in greater detail. For the first quarter ended March 30th, 2022, total revenue increased 2.2% to $110.1 million, compared to $107.7 million in the first quarter of 2022. Company-operated restaurant revenue decreased slightly to $94 million from $94.2 million in the same period last year. The decrease in company-operated restaurant sales was primarily due to a $2.6 million decrease due to the sale of 8 company-owned restaurants to a franchisee during 2021 and $0.5 million from restaurants closed during the past year. The decrease was partially offset by a 2.3% increase in company-operated comparable restaurant sales and $1.1 million in non-comparable restaurant sales, which included restaurants temporarily closed due to the pandemic during last year's first quarter. The increase in company-operated comparable restaurant sales was comprised of a 6% increase in average check and a 3.5% decrease in transactions. During the quarter, our effective price increase versus 2021 was 8.2%. As I mentioned earlier, our momentum continued into the second quarter and through April 27th. Second quarter system-wide comparable restaurant sales increased 12.4%, consisting of a 6.5% increase at company-owned restaurants and a 16.4% increase at franchise restaurants. Franchise revenue was $9.3 million during the first quarter, compared to $7.6 million in the prior year period. This increase was driven by a franchise comparable restaurant sales increase of 11.5%, as well as the opening of four new franchise restaurants during or subsequent to the first quarter of 2021, and revenue generated from eight company-owned restaurants sold to an existing franchisee during 2021. This was partially offset by the closure of two franchise restaurants during the same period. Turning to expenses. Food and paper costs as a percentage of company restaurant sales increased 360 basis points year-over-year to 29.5% due to increased commodity costs and investments in new packaging, partially offset by higher menu prices. Commodity inflation during the first quarter was approximately 18%. We have yet to see any easing in commodity inflation and currently expect it to be approximately 21% in the second quarter and 18% for the full year. Labor and related expenses as a percentage of company restaurant sales increased 210 basis points year-over-year to 34.8% due to higher wage inflation, overtime costs, and other labor-related costs. Based on the continued labor pressure that we're experiencing, we're expecting wage inflation of 7%-8% for the full year. As I noted, during the first quarter, we incurred approximately $2.3 million of COVID-related expenses, including leave of absence and overtime pay. Occupancy and other operating expenses as a percentage of company restaurant sales increased 10 basis points to 25.4% due to higher marketplace delivery fees and utility costs, partially offset by lower operating supplies costs. Our restaurant contribution margin for the quarter was 10.3%. Margins were especially challenged in January, but recovered during the quarter to 14.3% in March. As I noted previously, effective pricing during the first quarter was 8.2% versus 2021. Due to continued commodity inflation, pricing in the second quarter will be approximately 9% and roughly the same for the full year. Our planned pricing may be adjusted based on economic conditions and consumer sentiment. In addition to our pricing actions, we are currently testing cost reduction initiatives to further mitigate the impact of labor and commodity inflation on our margins. General and administrative expenses decreased to $10 million from $10.5 million in the year ago period, primarily due to a decrease in management bonus expense. As a percent of total revenue, G&A decreased approximately 70 basis points to 9%. We recorded a provision for income taxes of $0.9 million in the first quarter of 2022 for an effective tax rate of 30%. This compares to a provision for income taxes of $1.6 million and an effective tax rate of 28.7% in the prior year first quarter. We reported GAAP net income of $2.1 million or $0.06 per diluted share in the first quarter compared to GAAP net income of $4 million or $0.11 per diluted share in the prior year period. Pro forma net income for the quarter was $2.6 million or $0.07 per diluted share compared to pro forma net income of $4.7 million or $0.13 per diluted share in the first quarter of last year. For a reconciliation of pro forma net income and earnings per share to the comparable GAAP measures, please refer to our earnings release. Regarding development, during the first quarter, one company restaurant was opened in Las Vegas and two franchise restaurants were opened in California. Turning to liquidity, as of March 30, 2022, we had $40 million of debt outstanding and $25.5 million in cash and cash equivalents. Lastly, due to the uncertainty surrounding the COVID-19 pandemic and current economic conditions, we won't be providing a full financial outlook for the year ending December 28th, 2022. However, we are providing the following limited guidance for fiscal 2022. The opening of 3-6 company-owned restaurants and 6-10 franchise restaurants. Remodeling of 10-15 company-operated restaurants and 20-30 franchise restaurants. Capital spend of $20 million-$25 million and a pro forma income tax rate of 26.5%. This concludes our prepared remarks. I'd like to thank you again for joining us on the call today, and I'm now happy to answer any questions you may have. Thank you. We will now conduct a question and answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star key. One moment while we pull for our first question. Our first question comes from Jake Bartlett with Truist Securities. Please proceed. Great. Thanks for taking the question and congrats, Larry, on the recent improvements. It's great to see in sales. My first question is, you know, you mentioned excitement and how much the shredded beef promotion has helped. Do you attribute all the increased improvement to that? Or, you know, to what degree did increased staffing, your ability to staff the restaurants and, you know, operate, you know, full hours, you know, contribute to that increase, do you think? Yeah, I think that may have helped a little bit, Jake. I do think though we really saw a big inflection point with launch of Birria. You know, we've been seeing steady, I'll call comp sales improvement, you know, through late February, early March, a pretty consistent basis. The launch of the Birria product with the marketing initiatives, really, you just saw again an inflection point where it really accelerated to the point where we're seeing obviously our high comp sales and as I highlighted, you know, record sales across the company, the franchisees and the system for three straight weeks. That product launch, again, we were seeing improvements, but that product launch really accelerated that improvement. Great. That's good to hear. The next question is on the differential between average week or the same store sales between the company and the franchise. It sounded in your comments like you attribute a lot of that differential to, you know, operations and the franchisees just, you know, running better operations. The question is, you know, how? Is that true? I mean, is that how you're looking at it now that really is the operations the opportunity to close that gap? Or, you know, I think historically over the last year or two, you've talked about the company stores being more impacted by labor shortages just given where you have the stores. I'm wondering if you can differentiate or just disaggregate the impact of the pace of operations, the quality of operations versus just being in stores that are hindered by staffing more. Sure, Jake. Yeah. Let me first start by saying, a huge shout out to our franchisees and our franchise system. I mean, they have done really a phenomenal job of operating throughout COVID, and throughout the current economic challenges. I mean, when you look at the ops metrics or the key ops metrics, you know, they continue to operate, and throughout they've operated at really high levels of execution. A real shout out to our franchisees. We have a number of company restaurants operating at really high levels. When I step back and look at the business, and you see this sales gap between company and franchise, in general, it is entirely driven by transactions. For example, I think the first quarter, as I highlighted, we were down 3.5% in transactions. Franchisees were +5%. The franchisees has been consistently around, you know, 5% transaction growth while we have, you know, generally been negative. That immediately points to, you know, the execution in a number of our restaurants that is, you know, creating that gap. Now, I will say a number of our company restaurants, you know, especially as I highlighted in the call in Vegas and I'll call out the east of L.A., Inland Empire, the desert area, they are the most staffing challenged. We have a little bit more exposure in those markets than franchisees, but, you know, and so that's where we're really focused on. You know, again, I just look at the way the franchisees have reacted. Remember, our franchisees tend to be small to mid-sized. When I look at it, and when I talk to the franchisees, I think the thing that stands out to me is they react very, very quickly to what's going on in the economic environment. If they need to make changes quickly, they make it in days. Quite frankly, while we think in the company we're moving fast, we're still taking too much time. In this environment, we have to move faster. We can't be taking three weeks to a month to make a decision. We need to be moving in days or weeks. I think that's one area where the franchisees really excel. I think it's an area that we can emulate our franchisees. Me and my team are very on how do we accelerate the adjustments we need to make out in the restaurants where we're especially challenged around, you know, staffing to move faster to make sure that we recruit and retain people. I think the other area where and I highlighted this a little bit on the call that we're really focused on now is, you know, we have a number of new employees in our restaurants. That really means we have to build what I would call know-how in the restaurants. I mean, we have to build the knowledge in the restaurants. Obviously one way to run that is training. The other way is to be more prescriptive about. You know, what we want people to do from our, you know, area leaders down to our general managers, down to our team members, and really lay out in detail around, you know, here's what you do at certain points of the day for an area leader. Here's when you visit the restaurants. Here's what your restaurant visits look like. Here's the coaching you leave behind, for them in writing. So we're getting more prescriptive, you know, as we try to build that knowledge base, within our system. Like I said, the other thing is just a maniacal focus on the drive-thru. In fact, we're launching, we're retraining every company restaurant on the drive-thru on May 6th. Then we're going to have a drive-thru incentive scheme, which will be, I think, fairly significant, that to really drive the execution of the drive-thru. I just really believe when you look at our ops metrics, fixing the drive-thru fixes a lot of things. Yeah, we have a lot of improvement we can make in the drive-thru in a number of our restaurants. That's what we're really gonna focus on. That starts May 6th, as we kick off the training and then, like I said, the incentives program to really drive that execution. Just to summarize, it's really around getting faster and how we react to the market conditions. Really building knowhow in our restaurants through being more prescriptive and more training. Really focus on the drive-thru, get maniacal about that because so much of our business goes through the drive-thru, and so much of our consumer feedback and consumer you know experience is really driven by the drive-thru. That's what we're focused on. Great. Thank you so much. I appreciate it. Our next question comes from Andy Barish with Jefferies. Please proceed. Hey, Larry. Just trying to kind of level set on, you know, some of the margin commentary. Obviously, you know, there's about 250 basis points of COVID stuff in the first quarter, but then you kind of left the quarter, as you mentioned, doing about 14% in March. I mean, is that, you know, kind of a good run rate on restaurant level margins? You know, again, taking into account, some of what you just went through in terms of, you know, some incremental costs from, you know, retention and training and wages and things like that. How should we kind of level set on restaurant level margins here? Yeah. If I look at the balance of the year and, you know, the things we have in place, you know, especially around the pricing and some of the cost reduction things we're working on. You know, I think March is a starting point, but I expect to see a gradual improvement in margins through the end of the year. You know, starting out, you know, March, I'll call that mid-teens%. Again, I would expect to improve every quarter and get up to call it the mid slash, you know, I'll call it the mid/upper teens% by end of the year. Great. Thanks. Very helpful. I guess on the learnings from Birria, I mean, it sounds like the consumer certainly associated you know, a crazy chicken chain with beef for the last month or so. You know, what else, I guess, did you learn from you know, from the Birria and the beef promotion, and how might we see that you know, return at different points you know, later in the year or next year? Well, I'll break it into two things. The first is the product itself, with Birria. I guess, I mean, in Birria, you have the beef, which is a shredded beef product, and then you have the consommé. Yeah, we are, you know, looking to test. We're actually—it's in a limited test run right now as a limited time offer item as part of a mix. Some of it will be chicken, some of it will be beef, that we would look to do in what we call module five, which would be kicking off, I think, early November. So we think there could be a place for beef, at least in one more LTO, possibly even a full-time menu item at some point. You know, we're really looking at the full-blown Birria that we're doing now as something we'll look at doing next year as another LTO, given the success. We call a Birria 2.0. We'll make some changes in terms of the product and the packaging, but we definitely see it as something that we can look to do again next year. That's on the product side. The second piece is just around the approach to marketing that we've taken. Real kudos, a real shout-out to the marketing team and the way they executed against this. Even the ops team, which we executed. We actually rolled out, I'll call it pre-training for this product to make sure the execution was really strong as we rolled it out. On the marketing side, you're just gonna see more and more of, you know, what we did with Birria. Again, it just happened to coincide with Birria, these new marketing tactics that we wanted to put in place, which was again, you know, heavier spend on social media and really going on those platforms to attract a younger customer. We really felt like Birria was going to appeal to a younger customer base, and it was a great opportunity for us to bring younger consumers into the brand. We really focused, especially on TikTok. Yeah, I'll just give you an insight into, you know, how much of an impact that had. Yeah, we did a soft rollout of Birria, probably about four or five days before we did anything on social media or TV. It was mixing, you know, in the software, what you would expect, probably about 1.5%. All you had was point-of-sale materials up, so it wasn't great. We then went on TikTok, and that day, that mix went up to 8.5% just by TikTok. It's a phenomenal platform for us, but it just really caught on in some way you could call it going viral. Just that alone really grew it. Then, of course, we went on TV the following week, which it took it up to the 12.5% mix levels that we saw initially with the product. A lot more of that to come as we launch the balance of the year, our limited time offers and just, you know, more and more focus on these social media platforms. Again, creating separate content for the platforms, which we talked about before, is a must do. You can't just use your common, you know, TV advertising and cut it up and put it on there. You really have to create unique content on these social media platforms. The team did a fantastic job, and you're gonna see a lot more of that as the year progresses. That's great. Then, just on the product itself, I mean, I know it's priced, you know, in a premium kind of band on your menu. Was it gross margin, you know, dilutive or neutral or, you know, maybe even slightly favorable just given how expensive chicken is right now? How should we think about that? No, it had a higher food cost. From a calendar perspective, it was an investment on food costs. Again, through the second quarter, you'll have Birria on there for really the month of May. Obviously April it comes off. Then we go to Tostadas, which is a lower food cost item. Birria is the most expensive item from a food cost, you know, percentage that we'll do this year. That's great. Thanks, and have a happy Cinco de Mayo tomorrow. All right. Thanks, Andy. Our next question comes from Sharon Zackfia with William Blair. Please proceed. Hi, good afternoon. I guess I'm curious on Birria. Of that kind of 10% plus mix that it generated over the last six weeks, how much of that do you think is incremental versus kind of consumers swapping around on the menu? I ask that because I think the LTO ends June first. I'm kind of wondering, you know, how you think about any potential comp fall off that we should all be thinking about, you know, as the Birria LTO ends. Then secondarily, as you brought in these younger consumers, and it sounds like you did bring in maybe, you know, some newer demographics to El Pollo Loco, were you successful kind of getting any kind of rewards sign-ups in tandem with those new demographics that were coming in? How do you kind of plan on continuing the momentum, that you've built with those younger demographics? Yeah. Thanks, Sharon. First on the Birria mix. We didn't really see much shift in the menu mix overall across the rest of our categories. Maybe a little bit on you know, family meal. Difficult to tell because we actually changed our approach on the family meals a bit. Overall, you know, Birria didn't really look to pull much from other items on the menu. Now having said that, you know, we're going in with Tostadas. If you recall, Tostadas last year, you know, normally they're like a 7%-8% mix, somewhere in that range. They were about 14% mix during our limited time offer last year. We really feel like Tostadas is a really strong follow-up to Birria, and we'll be able to maintain the momentum we've built. Now, shifting to, I'll call it the demographics piece. You know, there's no doubt we have seen a lot of new users come into the concept, at least by the Birria product. We've seen that through our loyalty program and just some of the consumer research that we have. Now the challenge is, you know, how do we keep them coming? As you look at our approach around Tostadas and even the balance of the calendar, a lot of the work we're doing is really analyzing, you know, what is gonna resonate with younger consumers and get them excited. We do think Tostada is a unique product and has that capability just around the different ways you can eat Tostada and the variations, and you can do a lot with that on social media, especially TikTok. They really make it exciting and resonate with younger consumers. Then looking at the product balance of the year, I mean, everything we look at now is, you know, even just bone-in chicken, we're looking at that saying, well, you know, normally we just go on there and we show families eating the chicken and just drive the family meals. The reality is there's a lot of different ways that you can use bone-in chicken that could be, I think, exciting for younger consumers. That's all the work we're doing is everything through the lens of not just our core customer, but how do we make it interesting and exciting, for a younger consumer base to keep them engaged with our brand, just as Birria really created that engagement. Hey, Larry. In tandem with kind of thinking about that younger consumer, are you toying with the idea of any changes to your hours or doing any kind of later night, you know, day parts? Right now, no. Really right now, given the staffing issues and challenges, I think it'd be a challenge to extend it out. I think at some point as we develop a better menu for late night, that's certainly something on the, I'll call it longer-term strategy, something to look at. The team is starting to look at, you know, products that are, I'll call it more snackable. Things that we could put on the menu that would be more appealing, you know, to a younger consumer and also to a late night consumer. I think that's down the road. It's probably not this year, but maybe something that we look at next year. Okay. Thank you. Thanks. Our next question comes from David Tarantino with Baird. Please proceed. Hi. Good afternoon, Larry. I wanted to come back to this question about marketing. I guess, you know, the way I think I will ask it is, you know, is there anything in your consumer data or your learning thus far that would suggest that the lift you've seen from Birria is more about the marketing than the product itself? You know, the reason I ask that, I guess, is that would perhaps be a leading indicator for success on future offerings. I just wanted to get your thoughts on whether you think it was more about the marketing than the product, or do you think it was the combination of the two? Oh, I definitely think it was a combination of the two. Yeah, I just say that, you know, Birria, you know, had six straight weeks of over 10% mix. You know, and it's coming down the curve, but it continues to be a very strong mix, which just tells us, and we'll dig into it more with data, but it indicates that there's a good amount of repeat. Now, the one area where we do know that we've seen repeat is around loyalty. There's probably been, I think, in the first couple of weeks, about a 25% repurchase rate, which is actually, you know, pretty good in that short timeframe. We feel good that the product has definitely resonated. Certainly, when you see the kickoff with the TikTok and other social media channels and the growth we saw with that clearly indicates, I think it's the power of the "and," when you have a great product that really resonates, along with a great marketing strategy. Again, that's why we're excited about Tostadas, because again, you know, we know that Tostadas is a distinctive product for us, is a great product for us. You know, working through, you know, how we promote that, you know, similar to how the Birria, you know, our target isn't to get back to last year's mix on Tostadas. It is to beat last year's mix on Tostadas and continue driving the brand and, you know, how it resonates with the younger consumers. Yep, makes sense. I had one clarification on your margin outlook you mentioned. Is that, you know, the move to high teens, would that be assuming the current momentum in the business continues, or are you making some assumption that the sales trajectory will change in the second half of the year? No. I mean, it really assumes continuation of where we are, you know, more or less. I would caution. I mean, I expect from where we are in March to continue improving margins. I would say it's gonna be, you know, in between mid- to high teens where I would, you know, project to be out towards the end of the year. That does rely on, again, inflation doesn't get any worse, and that, you know, our sales continue to perform as they have, you know, at the current unit volumes that we're seeing. Got it. Then on the commodity costs, I think you had locked in chicken prices at perhaps more favorable rates than the current market conditions. I guess, is that correct? Have you given any initial thoughts on what 2023 could look like if the market stays the way it is? Yeah. The majority of our chicken on the bone is locked in at certainly favorable cost to current market conditions. We do have a portion with one supplier that is not locked in. But the key, the big inflation drivers obviously are the boneless breast meat and boneless thigh, mainly boneless breast meat. That's what we're really watching. I have to say, I don't think at this point we have an outlook for next year. It just continues to be a tight market, chicken as a whole, but especially around boneless breast meat. You know, you've just got so much demand out there, and suppliers are having a hard time keeping up with that. It's a little premature for us to be taking stabs at what next year will look like. You know, we need another quarter or so, and then I think we'll have a better idea of what next year looks like from a chicken supply standpoint. Yep, makes sense. Thank you. All right. Thanks. Once again, ladies and gentlemen, to ask a question, that's star one on your telephone keypad. Our next question comes from Todd Brooks with the Benchmark Company. Please proceed. Hey, Larry. How are you? Good. Question for you. With the strength of Birria, which is impressive in and of itself, do you have a sense of what your consumer was seeing otherwise? We've heard other concepts talk about stimulus lapping in kind of period three, period four as a headwind. We've heard concepts talk about fuel price increases with the Ukrainian war that we saw in March being a headwind. Do you have a sense of where your consumer stands and maybe how much, if any, kind of weakness or lapping pressure you were able to overcome with Birria, actually implying that Birria is that much more powerful than the reported number. Yeah, I mean, great question. I guess I go back and look at, again, the first quarter. Yeah, I mean, we had, you know, fairly good momentum coming out of March, especially when you look at our franchisee comps, you know, first quarter 11.5% and, you know, they were still, you know, improving. It felt like from a consumer standpoint, and I said this on the March call, is that from a consumer standpoint, you know, our brand looks to be really strong. I mean, we're seeing, you know, sales growth across the business, our franchisees especially seeing transaction growth with our franchisees. The reality is, I mean, their price points are still higher than ours. The brand is clearly resonating. Now, you know, Birria took it to a new level, but, you know, when I look at, you know, are we seeing any consumer pushback at this point? I'm not seeing it yet. That's not to say it won't happen, but, you know, our transaction numbers are roughly pretty comparable to where they've been over the last several quarters. The franchisees are driving positive transactions despite taking, you know, pricing. Thus far, not seeing the pushback that maybe other concepts are seeing. I think Birria propelled us to a new level. I'm not sure from a brand standpoint whether we were seeing the impact that others have highlighted, you know, from reduced stimulus checks and things like that. I just wasn't seeing it in the business leading up to Birria. Perfect. That's great to hear. You talked about still working against staffing, especially in the company stores in some of the tight markets. Do you have a sense, even though the reported numbers were great for the quarter, what either reduced operating hours or, yeah, I don't know if you had any full unit closures anymore as once we got out of Omicron, but what staffing might have cost you from a same-store sales point, standpoint on the corporate store side in the quarter? Well, in terms of what we look at is not necessarily the impact of overall staffing, but it's the impact where we've had to either close early or reduce our service channels. That continues to be, I don't know, 15, 20 restaurants a day. And that can be from staffing, from call-outs, which as I recall, I have to think the numbers. I mean, it's it could be 1% of sales. You know, 1% sales impact, as I recall, when I was looking at the numbers. It's not a huge impact on the business overall. It's a very, very slight drag on our comps, but not huge. Okay, great. Thanks for the questions, Larry. Appreciate it. Thank you. My next question comes from Jake Bartlett with Truist Securities. Please proceed. Great. Thanks for taking the follow-up. Larry, my question is gonna require kind of looking way back in time, you know, it'd be, you know, definitely before your time at the brand. The question is: you know, how El Pollo Loco is positioned, you know, in a downturn. You know, what were same-store sales? My model doesn't go back that far, you know, during the Great Recession. I don't know if you have that, but just maybe if you could, if you have that'd be helpful. Maybe just how the brand is positioned now versus then in terms of value and your ability to pivot towards that, if need be, if this big R word comes to pass. Okay. You can't hold me 100% accountable for these numbers, but as I recall, the Great Recession, when I looked at the numbers years ago, I mean, El Pollo Loco was definitely impacted. I think they were down somewhere in the 5%-10% range during one of the years. So definitely saw an impact. Now, if you go back to that time, you know, El Pollo Loco was very, very reliant on it. It was just strictly, I mean, not strictly, it had entrees, but really reliant on chicken on the bone, family meals and individual meals. I mean, that was the core. If you recall, you kind of coming out of that timeframe is when the brand began shifting more focus or at least emphasizing more the entree side of the business. I say pre-2013, 2012, you know, if you recall, we were at 55%-60% chicken on the bone, and the balance was entrees. Then coming out of 2013, 2014, it flipped around to basically being the other way around. That part of the business. I'm not sure you can use the last recession as the best bellwether because the business has changed in terms of, you know, what we offer on the entree side of the equation and the value we offer on the entree side of the question. That's my recollection of what took place back years ago, but I'm also very optimistic that you know, given you know, our positioning today and even you know, more of the value offerings that we have today versus where we were previously, that I think we're well situated. If there's a recession, not that we won't feel something, but I think we'll hold up very well and see hopefully quite a bit of trade down into our brand. Great. That's really helpful. Actually, I did have another one. I believe last quarter you gave an indication of what you thought G&A was gonna be up year-over-year in 2022. I think the first quarter came in a little lighter than we were expecting. Any change on just you know how we should think about G&A for the second through the fourth quarter? Yeah. I think second through fourth quarter G&A should be a little higher year-over-year than it was. When I look at the full year, you know, I'm expecting it to be again higher than last year. I'm thinking probably somewhere in, I don't know, just probably $2 million-$3 million range overall. Great. Thank you so much. It's helpful. Okay. Thank you. At this time, I would like to turn the call back over to Mr. Roberts for closing comments. Now, well, thanks, everybody, for joining the call today. I really appreciate it, and I hope you took away that we really feel great about where the business is, where it's situated. We've got a lot of great things in the pipeline from a product standpoint, a lot of great marketing initiatives, and a real focus on the company operations and a big opportunity there as we improve those. Very confident that we're gonna see additional sales growth come from those company restaurants. Thanks again, everybody. Have a great night. Thank you. This does conclude today's teleconference. You may disconnect your lines at this time, and thank you for your participation.