Thank you and good afternoon, everyone. Welcome to our Second Quarter 2022 Earnings Call. Here with me this afternoon is Dave Boennighausen, our Chief Executive Officer. I'd like to start by going over a few regulatory matters. During our opening remarks in our response to your questions, we may make forward-looking statements regarding future events or the future financial performance of the company. Any such items, including details relating to our future performance, should be considered forward-looking statements within the meaning of the Private Securities Litigation Reform Act. Such statements are only projections and actual events or results could differ materially from those projections due to a number of risks and uncertainties. The safe harbor statement in this afternoon's news release and the cautionary statement in the company's annual report on Form 10-K for its 2021 fiscal year and subsequent filings with the SEC are considered a part of this conference call, including the portions of each that set forth the risks and uncertainties related to the company's forward-looking statements. I refer you to the documents in the company's files from time to time with the Securities and Exchange Commission, specifically the company's annual report on Form 10-K for its 2021 fiscal year and subsequent filings we have made. These documents contain and identify important factors that could cause actual results to differ materially from those contained in our projections or forward-looking statements. During the call, we will discuss non-GAAP measures, which we believe can be useful in evaluating the company's operating performance. These measures should not be considered in isolation or as a substitute for our financial results prepared in accordance with GAAP. A reconciliation of these measures to the most directly comparable GAAP measures is available in our Second Quarter 2022 Earnings Release and our supplemental information. Now, I would like to turn it over to Dave Boennighausen, our Chief Executive Officer. Thanks, Carl, and good afternoon, everyone. I would like to start today by sharing some of the highlights from our Second Quarter Results, which overall met our expectations despite volatility in the market environment. I would also like to spend some time addressing our confidence level and strategies towards achieving our 2024 accelerated growth objectives. Our second quarter revenue of $131.1 million reflected system-wide comparable restaurant sales of 5.1% and was highlighted by record average unit volumes of $1.42 million at company restaurants, 18.3% above pre-COVID 2019 levels. After a challenging first quarter due to the impact of temporary closures from the Omicron variant, our restaurants are now staffed above pre-COVID levels, and we recaptured meaningful momentum relative to Q1, including restaurant level margins of 15.5% compared to 9.7% in the first quarter. As we move to our ongoing strategy, I would like to remind you of our accelerated growth objectives, which include first, $1.5 million AUV by 2024. Second, 20% restaurant level margin again by 2024. Finally, at least 10% unit growth commencing in 2023. Let's start with our average unit volume target of $1.5 million. The company has made clear progress over the last few years in growing our average unit volume from $1.2 million in Q2 of 2019 to $1.42 million in the recently completed second quarter of 2022. The brand's ability to meet the needs of today's consumer, and particularly with the variety inherent in our flavorful menu, our digital strengths, and how well our food travels, positions the brand for continued growth in our average unit volumes. As we've all witnessed throughout the restaurant industry, we experienced some softening in our sales trends during the last part of Q2 and into the beginning of Q3. That said, sales have quickly stabilized, and we expect positive comparable restaurant sales in the current third quarter. The stability of our recent sales is encouraging. However, we recognize the near-term economic environment is unstable and difficult to predict. As a reminder, though, the company achieved positive comparable restaurant sales during the 2008 and 2009 recession, driven by the strength of the brand's value proposition as well as our ability to be a trade down beneficiary in a softer consumer environment. This ability to succeed in a more difficult environment is bolstered by the strength of our menu innovation as well as our strong entry-level price point. From our recently introduced LEANguini offering, which offers 56% less net carbs and 44% more protein than a traditional wheat pasta, to our zucchini noodle, to our artisanal sauces, our menu offers great variety that is not easy to replicate at home or at other restaurant competitors. Additionally, we are leaning into the strength of our entry-level price point with increased communication and messaging of seven core dishes that are priced at $7, including popular favorites such as our Wisconsin Mac & Cheese. This core menu strength and value proposition is further supported by the insights and engagement that we are able to derive from our digital ecosystem and our rewards program, an asset that we did not have during prior economic downturns. Our frequency and guest metrics have improved meaningfully in recent months, and we will continue to leverage this strengthening capability to drive consumer engagement that is personalized, relevant, and develops guest loyalty. In coming months, you can expect us to continue to evolve and fine-tune these areas of the business, streamlining and improving our digital experience for guests, and continue to increase our trial and awareness of LEANguini, which we are seeing is associated with higher repurchase, taste of food, and frequency metrics. We continue to believe that LEANguini will be a transformative introduction for Noodles & Company, with our focus now shifting from introduction and commercialization to increasing trial amongst new, lapsed, and loyal guests alike. While we are prepared for potential volatility during coming months, as I noted, sales have quickly stabilized, and we anticipate positive comparable restaurant sales in the third quarter. Moreover, during the second quarter, 41% of our restaurants achieved our accelerated growth objective of an average unit volume of over 1.5 million, with strength from coast to coast and in a variety of different restaurant formats. The average restaurant margin of these restaurants was nearly 21%, which brings us to our second accelerated growth objective, achieving a target for 20% company restaurant level margin by 2024. As a reminder, our pre-inflation results from Q2 of last year included restaurant level margin of 18.9%. Clearly, the unprecedented inflationary environment that we are now seeing has led to some challenges thus far in 2022. With a combination of more normalized commodity markets and execution of our efficiency initiatives that I will discuss further, our 20% target remains in sight. As you know, cost of goods sold has been the most challenging area of the margin story in recent months. Our cost of goods sold in the second quarter was 27.8% of sales, 280 basis points above our target for COGS of approximately 25%. Carl will go into more depth later, but importantly, we are confident that we have reached the peak of our COGS inflationary pressures. Several key ingredients, in particular chicken and durum wheat, have seen meaningful declines from recent historic highs. Additionally, we are currently rolling out a more efficient cut of our boneless chicken breast with significant cost savings. While our COGS will remain elevated in Q3, given the timing of lower cost items rolling through the system, we expect to exit Q3 and enter Q4 with meaningfully lower COGS than we saw during the second quarter. As we consider our 2024 target of 20% restaurant level margin, we additionally see opportunity in several other areas of the P&L. Delivery fees are beginning to come down as percentage of sales as this area of the business normalizes, and we are also seeing strong leverage on our fixed costs from recent price actions. Additionally, the company is focused on a few key optimization activities to support margin expansion over both the short and long term, including menu optimization to eliminate select higher cost ingredients and better highlight menu items that are both guest favorites and margin accretive, testing of high ROI equipment alternatives to improve efficiencies within our restaurants, particularly focused on our prep activities and our protein preparation, and the introduction of technology within our restaurants to drive consumer behavior and eliminate select current expense items. Importantly, today we announced a refinance of our credit facility, which gives us additional flexibility to pursue and implement these and other high return initiatives to achieve our 20% restaurant level margin target. With stronger AUVs and restaurant level margin, we are well positioned to take advantage of our third accelerated growth objective, which is to achieve at least 10% unit growth by 2023, taking advantage of the tremendous white space potential for the brand. It's no surprise that certain external factors, including municipal and landlord delays and supply chain issues, have added challenges to the typical restaurant development timeline, and that's currently reflected in our unit growth expectations for 2022. However, we remain confident in our long-term target. Fortunately, an improving real estate and cost climate has allowed us to shift more resources into the 2023 pipeline, which is the strongest I have seen in many years in Noodles & Company. We already have 20 company deals for 2023 that are either complete or in final stages of negotiation, with a significant number of deals in various stages of LOIs to support our growth objective. The pipeline as it sits today is three times stronger than it was at this point last year in all phases of phases of development, and we see unit growth of at least 10% in 2023. This pipeline is bolstered by improvements that we are currently seeing in much of our development input cost, as well as an overall more favorable real estate environment to execute our lower square footage, off-premise oriented prototype. Moreover, our confidence in achieving our 30% cash on cash return is supported by the success of our recent leases, including our first restaurant in the suburbs of Las Vegas, which is tracking above our $1.5 million AUV objective. Finally, supporting our unit growth objective is progress we are making in our franchise sales program. We are in the final stages of an agreement for a large area development in the southern part of the United States and have been very pleased with the increase in franchise interest that we have seen in recent months. As I turn it over to Carl, I'd like to reiterate my confidence in how well the brand is positioned to succeed in the short term as well as achieve our accelerated growth objectives. Our unique brand positioning with strong value offerings allows us to navigate a more challenging consumer environment. Our strong digital ecosystem and guest insights allow the brand to drive consumer engagement, and our improving operating model, bolstered by high return, low square footage new units, allows us to take advantage of the tremendous white space potential. Now I'd like to turn it over to Carl. Thank you, Dave, and good afternoon, everyone. I am pleased to share our second quarter results, including our record average unit volumes of 1.42 million, which reflects continued recapturing of momentum. In terms of the financial highlights, total revenue for the second quarter increased 4.3% to $131.1 million compared to last year. Comparable restaurant sales increased 5.1% system-wide, comprised of a 5.1% increase at company-owned restaurants and a 5.3% increase at franchise restaurants. Our second quarter revenue was negatively impacted from the January 2022 sale of our California locations, which we estimate was approximately $4.1 million and includes lost revenue net of royalty payments received. As a reminder, that transaction will be EBITDA neutral for 2022 and accretive in future years. Underlying our revenue growth, our average unit volumes were $1.42 million for the quarter, a 5.3% increase from last year and an 18.3% increase versus pre-COVID levels in 2019. As Dave mentioned, we experienced some softening in sales trends during the latter part of the quarter, particularly in June. However, it's worth noting that in June, our average unit volumes were $1.39 million, which represents 15% average unit volume growth from pre-COVID levels in 2019. We are encouraged that AUV growth quickly stabilized at these levels and have remained at approximately 15% thus far in July. For the second quarter, restaurant contribution margin was 15.5%, which was a significant improvement from the first quarter levels of 9.7%. Restaurant margin did decrease 340 basis points compared to our Q2 of 2021, with the vast majority of that decrease found in our cost of goods sold, which improved 20 basis points relative to the first quarter, but at 27.8% was nearly 300 basis points above both the second quarter of 2021 and our historical norm. The cost of chicken remains the most material driver of inflation in our basket, as over 50% of our guests choose boneless all-white meat chicken breast as an add-on to their noodle dishes. The price of chicken rose throughout the second quarter to unprecedented levels, peaking at the end of May. However, as of today, the market has already declined 20% versus those historical highs, and we anticipate continued normalization. Adjusting for the processing through our distribution systems, we estimate that the decline in chicken price will lead to a 50 basis point improvement in COGS as we exit the third quarter from peak levels in July. We will be able to realize this benefit having remained in variable pricing with our vendors, which was both a strategic decision to remain flexible on our purchases and driven by our vendors who are unable to set fixed pricing given the high volatility in the chicken market. Additionally, we have strategically worked with our existing and new vendors to optimize the cut of our chicken breast to further reduce waste. These vendors are now able to deliver the same high-quality boneless chicken breast in a more cost-effective way, reducing the required preparation. The run rate impact of this initiative is nearly 100 basis points of COGS improvement. This initiative is expected to be rolled out during the third quarter and largely complete by the end of October, positively impacting COGS in the fourth quarter and beyond. Other areas of our commodity basket remain fairly stable. We are seeing some modest increases across our dairy and produce basket, but more favorable costs in such areas like durum wheat, a core ingredient of our pastas. For the third quarter, we anticipate cost of goods sold slightly below our second quarter levels, ahead of realizing the benefits of more favorable chicken pricing and efficiency initiatives during the fourth quarter, when we expect to see COGS closer to the mid- to high-26% area. Labor costs for the quarter were 30.3% of sales, which is 200 basis points better than the first quarter and 50 basis points unfavorable to last year. Our labor margins continue to benefit from the full annualized impact of our Kitchen of the Future initiative, which has allowed us to offset continued wage inflation, which grew nearly 13% during the quarter. While wage inflation is moderating somewhat, we anticipate elevated levels will continue through the third quarter, with our labor margins expected to be largely in line with second quarter levels. Other operating costs for the quarter were 17.8% of sales, compared to 17.0% in prior year. This increase was driven by an increase in marketing expense related to the launch of our Uncommon Goodness platform and rollout of LEANguini. Marketing expense for the second quarter was 2% of sales, an increase of 80 basis points versus prior year. We expect third quarter other operating costs to be at similar level to the second quarter as marketing normalizes to approximately 1.5% of sales, offset by an anticipated increase in our utility expense due to normal seasonality. Pricing during the second quarter was just north of 10%, a level we expect to maintain during the third quarter. We are fortunate to maintain a strong value proposition with an attractive entry-level price point of around $7. This has allowed us to take price without meaningful guest resistance, bolstered by the fact that our core price has been relatively stable during the last few years as most pricing has been concentrated on third-party delivery. G&A for the quarter was $12.7 million, compared to $13 million last year. G&A includes non-cash stock-based compensation of $1.5 million during the second quarter, compared to $1.6 million last year. For the third quarter, we anticipate G&A in line with the second quarter and approximately $1.4 million stock-based compensation. GAAP net income for the second quarter was $1.3 million, or $0.03 per diluted share, compared to net income of $5.7 million last year, or $0.12 per diluted share. We also report net income on an adjusted basis, which adjusts for the impact of impairments, divestitures, and closures. Excluding these adjustments, our second quarter net income was $2.4 million, or $0.05 per diluted share, compared to net income of $6 million, or $0.13 per diluted share last year. We expect our effective tax rate to remain low at least through 2022, and we do not expect to be a cash taxpayer for the foreseeable future, given our sizable NOL and other tax credit of over $150 million. Switching to our outlook. For the third quarter, we anticipate total revenue to range between $125.5 million and $128.5 million, with positive low single digit comparable restaurant sales. The midpoint of our range assumes that the stabilization of average unit volume growth at approximately 15% growth relative to 2019 and reflects the historical negative impact on our absolute sales of the third quarter, containing both the 4th of July and Labor Day holidays. From a contribution margin perspective, we anticipate third quarter restaurant level margins between 15%-15.5%, as cost in particular is expected to remain elevated during the first part of the third quarter. During the quarter, we opened 3 new locations, all of which are company-owned. We anticipate 21-23 openings for the full year, reflecting 5% unit growth versus prior year, including 4 openings during the third quarter. For the full year, we now expect $30 million-$33 million of capital expenditure from our previous guidance of $30 million-$34 million, supporting new unit growth and continued innovation of our website and mobile app. Turning to the balance sheet. At quarter end, we had cash and cash equivalents of $1.8 million and a total debt balance of approximately $32.2 million, representing approximately $3 million of debt paydown relative to the first quarter. We are very pleased with the closing of our amended credit agreement yesterday, which upsized the credit facility from $100 million-$125 million, eliminated the term loan and principal amortization components of the credit facility, lowered the spread within the company's cost to borrowing, improved financial covenants, and enhanced overall flexibility. We are confident that with our amended facility, our highly supportive lender partners, and our strong liquidity profile, we are well capitalized to support our accelerated growth objectives and strategic investments. With that, I would like to turn the call back over to Dave for final remarks. Thanks, Carl. As we consider the current environment, we are very confident in the brand's positioning. The uniqueness of our menu, our strong value proposition, and our digital strengths, all executed by a team of dedicated, passionate team members, allows us the opportunity to directly engage with guests and be a beneficiary of potential trade down within the industry. Additionally, we remain confident in our accelerated growth objectives as our 2023 unit pipeline strengthens, AUVs quickly approach the 1.5 million target, and we see a clear pathway and progress to a 20% restaurant level margin by 2024. With that, please open the lines for Q&A. As a reminder, if you'd like to ask a question, please press star one one. Our first question comes from Nicole Miller Regan with Piper Sandler. Your line is open. Good evening, and thank you. Can you talk a little bit about the cohort you're trying to speak to with the 7 entrees at $7? Wondering specifically, how did you land on $7? Then in terms of maybe income profiles, you know, how much of your sales come from a lower end household income versus a higher end household income? Sure. We'll start with the actual price point of $7. What's exciting is that that actually is already, Nicole, the natural starting price point for so many of our dishes. So we're able to lean into what already is a great value proposition. To answer your question in terms of the percentage of our guests that are low income is pretty small. As we look at the trends that we saw in the business throughout Q2, one thing that's important to note is that a lot of the traffic trends actually didn't change at all. Our core guests actually remained very strong. No real change in their purchase behavior, channel, day part. We actually saw their frequency improve throughout the quarter. What you saw is that pullback from that low income consumer seemingly across all channels. We see that through our rewards program, other third-party data we have, that that's the one that we potentially lost. Now, interestingly, and I think encouragingly, we really just started messaging more explicitly on our digital assets and on our menu that $7 entry price point, just about a week ago. We're already seeing some nice momentum actually from that, particularly from the low income consumer, and we're not seeing any trade down at all either. We feel that that's able to address what's not the largest part of our guests. We definitely tend to skew towards higher income. For that low income guest, just reminding them of the great value proposition that we have at Noodles & Company. Nicole, to add on to what Dave said, about 52% of our guests have average household income over $75,000. Gotcha. Okay. That messaging piece was helpful too, because I was curious about exactly that. Can you just quickly touch on a 5% company comp? I think you ran just under 10% price in the quarter. There's a lot of noise in terms of transaction with both mix and traffic in there. Can you just validate those numbers if I was spot on or help us out and help me fix that or and then speak to the transaction part? Yeah, that is correct. We're just north of 10% on price. Overall same-store sales are just north of 5%. You did see traffic was modestly negative, was tracking on the higher side of our expected range, closer to flat to slightly positive traffic prior to when we saw that slowdown that kind of occurred in June, but that quickly stabilized from that point forward. Thank you so much. Our next question comes from Andrew Barish with Jefferies. Your line is open. Hey, guys. It looks like you saw some, you know, normalization in the digital mix. Did that surprise you, or is that just kind of a normal resumption of guest behavior back into the restaurants? How much do you think that impacted, you know, just that channel impacted the overall, you know, mix numbers as a component of same store sales? Yeah. As we look at the mix over the course of the quarter, Andy, it's actually been remarkably consistent. I think there was a little bit of a decline in delivery that we saw at a certain point, but then that quickly rebounded. It's been actually remarkably consistent. As a reminder, we have always been one of the leaders when it comes to digital sales, and we see that as continuing to be a very sticky channel for us. Still north of 50%, even as we sit, thus far 3 or 4 weeks into Q3, still at very similar figures. We also think we're just getting started in terms of as we get more insight into our guests and continue to be more personalized with our communication, which we think is a great asset as we head into a more uncertain environment, being able to hold on to that digital sales while at the same time dine-in is now starting to increase. You're seeing dine-in come back to about 20% of sales during the second quarter, still well below where we were pre-COVID, which was closer to 35%-40%. There's still opportunity for some tailwind as dine-in returns, but at the same time as digital remains very sticky and still has some growth opportunity. Okay. On the development pipeline, those, you know, kind of 10 or so units that you took out of this year, how do we think about that next year? I mean, does that make the development pipeline a little more even? Do those units stick around, I imagine? You know, you add on top of that. Just give us a little more color on the cadence of openings, you know, next year? Sure Which, you know, obviously significantly ramp? Certainly more even cadence than what we saw here in 2022. As I said earlier, the 2023 pipeline is stronger than I've ever seen it, as we have actually 3 times as many sites in the various stages of development. What I consider there is restaurants that were already lease assigned, sites that are in lease negotiation, or sites with LOIs out. We are significantly stronger today than where we were at any, really any time I've seen in the last several years. Would also remind that back 18 months ago, Andy, is when we set out to really accelerate growth at Noodles & Company. Indeed, that is what we are doing in 2022. We will open over 20 restaurants. That's the most that we've opened in several years. Back 18 months ago, we didn't foresee that the development environment would have these unusual delays, which is certainly what's caused some of that push into 2023, which also gives us, we believe, upside to that potential 10% unit growth target. Okay, thanks for the update, guys. Our next question comes from Todd Brooks with The Benchmark Company. Your line is open. Hey, thank you. Good afternoon, guys. Good afternoon, Todd. Couple questions for you. Hey, Dave. A couple questions. One, with the relief that you've seen recently in chicken prices and the benefit that you're expecting from the new cuts, what's the status of the chicken surcharge and how long you think that's gonna stick around on the menu? Is that based on the response to it, is that a longer, stickier type of pricing upcharge that we're gonna be able to harvest going forward, even as the commodity corrects? Sure. Todd, as an update, that chicken surcharge, which was, we viewed as temporary, has rolled off the menu. It rolled off about a week and a half ago. At the same time, to keep pricing consistent, we spread that increase throughout the entire menu. There really is a neutral effect in terms of overall pricing. You're right, the chicken improvement has really driven the decision for us to take that pricing off of the chicken specifically. Yeah. I'd also like to reiterate something, Todd, that Carl mentioned on the call in terms of our overall inflationary basket has been impacted more than many in the industry during the first half of 2022. We firmly believe that we are actually in a position where you're gonna start seeing improvement. As we get the rollout of significantly lower market that you're seeing from chicken breast, as well as some of the initiatives around that cut. As Carl mentioned, we see, you know, very clearly that's getting worked through the system as we speak, being able to exit Q3 at meaningfully lower COGS than where we are today, and then have nice improvement as you go into Q4 and really beyond. We feel that there's been kind of an outlier in chicken breast that has caused us to have some, you know, particular inflation here in the first half that we are now on the better side of that equation. Okay. Great. Thanks, Dave. Second question on the franchise deal that you teased. It's close to the finish line. Is there anything you can share with us on type of partner compared to the California deal? Is this another large multi-brand, multi-unit operator, well capitalized that you're bringing into the fold? You probably can't give us any sense of scale yet, but I guess, where are we in the process as far as being able to get some visibility on what this means towards the pipeline as we get out to 2024, 2025? Sure. I can share that unlike the California deal, this is not a refranchise. It is a new market. We'll share more details as the deal gets finalized, but we're in the final stages of one that's for one of the southern markets that we've targeted, a good-sized deal. As a reminder, and you alluded to it, Todd, we target well-established multi-unit operators. As you can imagine, in the uncertain environment, that's increased the lead time a bit as they navigate inflation and demand in their own businesses. What we're saying, we're very happy with the amount of interest we're seeing over the past few months, again, with these type of high quality, well-capitalized partners that see the overall potential and future of this brand. More information to come on that particular deal, but we're feeling pretty good with where the momentum's going from the franchise side. That's great, Dave. Then finally on amending the credit facility, congrats on getting that done. You talked about some covenant relief without much specifics. I know the old facility had a covenant prohibiting share repurchase. Can we comment on any covenants regarding share repurchase in the new facility? First of all, thanks for that. We are very encouraged by the closing of our credit facility. The amendment is highly favorable to us. It provides us with the additional flexibility on certain covenants, which indeed you pointed out, specifically on restricted payments. Yes, this does provide us enhanced flexibility there. Of course, any type of restricted payment is a topic we discuss frequently with the management. Yeah, I'm very pleased with just the work we've seen with our partners. Continue to have the same lead bank with U.S. Bank. They've been fabulous partners and certainly a favorable outcome in terms of giving us flexibility as we pursue these objectives. Okay, great. Congrats, guys. As a reminder, to ask a question, please press star one one. Our next question comes from Andrew Strelzik with BMO Capital Markets. Your line is open. Great, thank you, and good afternoon. My first question, you had a couple of encouraging initiatives, I guess, that launched during what was a challenging period to drive sales in LEANguini and the brand building, the campaign. Can you just comment, obviously kinda some of the results are obscured by the macro, but can you comment on what you saw as a result of that was in line with what you expected? Are you happy with how that went or any tweaks or anything like that? Yeah. Great question. We're very pleased with what we're seeing from both the LEANguini launch as well as Uncommon Goodness. With LEANguini, as we saw in test, it's associated with higher frequency, higher repurchase. The objective right now is really to increase trial. As you know, particularly in this environment, it can be difficult to get people to shift from their familiar favorites. But we see that when they do try LEANguini, they're amazed at the quality, the taste given the nutritional benefits. Still believe this is very much a transformative introduction from a culinary side. As for Uncommon Goodness, it's less of a short-term traffic driver, more of a long-term positioning of the brand, showcasing how we infuse Uncommon Goodness into every aspect that we do, from how we treat our people, to how we actually sauté and do real, sophisticated cooking methodologies to the quality of our ingredients. We're very pleased with some of the leading indicators we're seeing as we track brand regard, brand perceptions, seeing nice improvement across all of those, as well as the power of this potentially, but not just externally but internally. You are correct. You know, there's obviously a lot more talk in the industry around the overall market dynamics and inflation and so forth. Underneath the foundation of Noodles, we're very pleased with what we're seeing with LEANguini Uncommon Goodness and think that is going to be a key factor as we grow to 1.5 million in AUV. Okay, great. I guess I was just hoping you could help frame the different, you know, COGS opportunities, 'cause it sounds like there's a lot there. You have the new chicken agreement. You have other commodities that are coming down. You have some cost-saving efficiencies internally that you're also working on. I mean, can you frame kind of the magnitudes or the cadence, how quickly maybe you could start to realize some of the commodity declines should they sustain? It just, there's a lot there, and I'm trying to frame the potential impact that it could have. Yeah. We'll let Carl walk through this, but one thing that I think is important to note is that these are known savings. These are ones that it's a matter of them just working through the system. As you can imagine, when you purchase chicken this morning, it's not going to the guest plate that afternoon. Takes some time to get through the system, but they are known savings that we'll start realizing in short order. Carl maybe can go in through a few of those. Sure. In terms of the savings, chicken really is the outlier here. As Dave alluded to, the worst is behind us in terms of the market volatility. There's two major components. The first is purely just the price of chicken, which has come down by over 20% from historical highs. We're expecting just where the prices are today, that's a 50 basis point run rate improvement on COGS. The second is the initiatives that we're executing with our vendors. That's about efficiency, it's about reducing waste, and a run rate improvement on that initiative is 100 basis points. In total, 150 basis points. Really adjusting for the lead times and working inventory quickly through our systems, that's where we get the confidence in, and really the certainty about in fourth quarter, we're gonna forecast COGS in the mid- to high-20%, 26% area. Got it. Okay, that makes sense. Just one quick last one for me. You said the stores that are at or above the 1.5 million AUV are doing a 21% restaurant margin, which is already ahead of the 20% target. You've got these COGS savings obviously coming in on top of that. Is there a reason that you would be limited in the rest of the system to 20%, or is that just a nice starting point and then maybe we start to build from there, even at that 1.5 AUV? I'm just trying to make sure I understand the different pieces. Thank you. Yeah, you know, don't wanna get premature given the uncertainties in the environment, but yeah, absolutely. We feel that there is really strong capability to continue to leverage those sales growth. The concept itself, fundamentally, historically, and we think in the near future, has a great strength and low cost of goods sold. We've absolutely improved the labor model to be significantly more efficient, and you see that in those restaurants that are north of $1.5 million up into being at 20%. We absolutely believe there could be upside. You know, that said, we recognize there's work to be done. We need to see where the markets ultimately land in certain areas. We're as confident as we've been in terms of that 20% restaurant-level margin. As a reminder, just a year ago we were, you know, approaching 19%. We know the fundamental operating model is actually quite strong. Great. Thank you very much. Our next question comes from Mr. Brooks with The Benchmark Company. Your line is open. Hey, thanks. Just a quick follow-up, guys, if I may. You talked about the average unit volumes kind of stabilizing after the pullback that you saw in June and maintaining that stability so far in July. Just wanna triangulate that to the low single digit positive same store sales guidance. Does that level of AUV, that 1.39 type of level, does that support positive low single digit same store sales, or do we require a bit of a lift as the quarter progresses to get to the positive low single digit same store sales? Thanks. Sure. First, the way we look at the growth as we look at third quarter for average unit volume, there is a normalization for closures. As we think about the trajectory for the rest of the quarter and the stability in terms of what we're seeing so far in July, there will be somewhat of a closure impact, so that would help support the low single digit same store sales. As a reminder, I mean, sorry, last year in the third quarter, we saw about 150 basis points from a comp perspective for closures. Yeah. I'd also add to it, we're already, as we sit today, in Q3, we are in our range for what we're targeting here for Q3. The absolute dollar figure though, Todd, to your point, there is a little bit more seasonality from we have both the 4th of July and Labor Day in Q3, relative to what you see in Q2, which doesn't have as much impact. Actually that 139 mathematically would translate to even higher same store sales. Okay, great. Thanks, guys. Our next question comes from Jake Bartlett with Truist. Your line is open. Great. Thanks for taking the questions. You know, my first thing, I just wanna build on that, on that last one, and maybe if you could explicitly, you know, frame your sales trajectory and the trends, you know, in terms of same store sales, kind of in relation to the guidance of low single digits. Dave, did you just say that essentially in July you've seen low single digit same store sales? I believe as of the last call, April was roughly 4%, if I got that right. Sounds like it went up and then it came down. If you could just help us with the trajectory of the same store sales, you know, by month and, you know, just what you're running today, or in the last, you know, month would be really helpful? Yeah. As we said, you know, so far here in July, we are in low single-digit positive, Jake. And encouragingly, especially as we started to highlight the 7 for $7, we're seeing continued stabilization and potentially even a little bit of improvement in some of those underlying metrics. As you bifurcate out Q2, the P6 or June, I should say, fiscal month, was actually softer than low single digits for the last couple weeks of the quarter. It actually started off reasonably strong and then actually saw some deceleration just in the past, the last two or three weeks of the quarter. Then you saw immediate stabilization and then now starting to see a little bit of bounce. Hopefully that helps a bit. Ultimately sales were sort of flat in that late June time frame. Okay. Then, you know, as we think, you know, going forward from here, can you help us understand some of the drivers of sales? Sounds like you're getting an incremental boost from the marketing of the 7 for $7. Anything else? You talked about kind of more effectively you're kind of driving frequency or trial with the LEANguini. You know, how confident are you in terms of really material, you know, tangible drivers to offset, you know, some concern about further weakness on the consumer? Well, I think part of the confidence just comes from the fact that we've actually started seeing some momentum here in the last week or two that's showing that a lot of the efforts we've done are having an impact. Whether it be LEANguini, which we see continuing to increase week after week. We feel that that will continue to be a kind of slow burn, but will continue to be a driver of sales as we go forward, just against our operations. We are seeing our net promoter scores, our guest metrics improve dramatically over the last several months. Our teams are running at better cook times than what they did a year ago. Staffing is back to prior levels. We do see a tailwind as you have more dine-in guests come that will help as you've seen with the delivery or the digital numbers, we've been able to retain that. Between the digital strengths, LEANguini gaining traction, already some momentum we're seeing in some of the really targeted marketing around 7 for $7. We still feel that there's quite a bit of potential tailwinds. Not to mention, we will kind of reinforce catering for the first time in a few years as we go into Q4. There will be some culinary innovation looking at plant-based protein potentially rolling out nationwide during Q4. We'll have continued innovation pipeline as well to help support that average unit volume growth target. Great. You know, on the development for 2022, you know, obviously a pretty large decrease to 21-23 from 35 new openings. You know, before you had given us that 70% were expected to be company owned. You know, of the 21-23, how many of those are expected to be company owned? The vast majority. There will only be three or four that'll likely be franchise. They're encountering some of the same challenges that we've seen and you've seen it throughout the industry as well. Again, when we set those targets in early 2021, we didn't foresee how challenging the environment would get from a real estate timing perspective. The availability actually is quite strong. It's been the timing, and we hope that we'll be able to navigate through that here in 2022. Ultimately, just to give examples, we've seen things like utility companies not having the staff to turn power on time. We've seen developers with a new development not being able to get asphalt to complete their base building delivery date for us. You've seen permitting take a lot longer than historical. Much of that has been seen just not by the company, but also in franchise as well. Also gives us confidence that as we see the strength of that 2023 pipeline, we see some of the benefit of some of the carryovers of some of these sites that have taken longer, that we've got great confidence in that target for 2023. Okay, great. My last question is just on pricing. You mentioned that your pricing in the second quarter was about 10%. You saying you think it's gonna be about 10% in the third quarter. You know, I'm wondering just what, when new pricing has come on, when it's rolled off, just, you know, in terms of the impact of that $1 surcharge, you know, that's now no longer gonna be an impact. Just if you can help us understand, you know, when you've taken price so we can, you know, kind of also have some visibility into the fourth quarter. Also whether you're open, you know, one of your larger competitors has taken more price, and that's helping margins. You know, what's your appetite for, you know, continuing to take any price, even in this environment? Yeah, I'll let Carl answer some of the roll-off timing questions, and I'll talk through the overall value proposition. That's right. You're right for the second quarter, we had pricing just over 10%, and we're expecting the same for the third quarter, predominantly because that chicken surcharge, which contributed about 3% of price, is rolling over towards the core menu. Encouragingly, when we had the surcharge in place, we did not see really any impact in terms of chicken or protein attachment. We didn't see guests opting out of chicken or swapping chicken for other protein, in terms of attachment. That continues to build our confidence in terms of the price that we have on the menu. When we thought about pushing the surcharge throughout the entire menu, again, we look at this surgically through inelasticity of the dishes, but predominantly we were preserving $7 entry point still for 7 of our core dishes because that's really critical in terms of an entry point. Even by pushing that price out, we were able to preserve that, and that helps just underscore the value proposition. Yeah. In terms of additional price, we have seen the impact on the low-income consumer in terms of some pullback. That's, I think, others have seen similar things. Fortunately, again, for us, that's not much of our consumer. I would say that what is maybe a little bit unique, Jake, is for us, the particular inflation we believe has peaked, and we are now on the other side of it. So in terms of needing incremental pricing to overcome additional inflation, when you see chicken prices down pretty dramatically for chicken breast, and it's really chicken breast as a reminder, as that comes down dramatically, as you see some of these initiatives roll in, we believe we can absolutely expand margins without having to go to the menu. Not to say we don't have pricing power, we absolutely believe we do. We feel that there is enough momentum that we can see that we are actually on the right side of seeing inflation start to come down. Great. Then I'll just sneak one quick one in. You mentioned, you know, 13% wage inflation. I think you start to lap just industry-wide as well as I would imagine you know, higher wage inflation from the second half of last year. You know, is your expectation that wage inflation is gonna, you know, come into a more historical range? Or are you kind of planning for it to remain, you know, quite high for the back half of the year? Embedded into our Q3 guidance is that we continue to see some relatively high inflation, so above double-digit. There are signs that you're seeing throughout not just the industry, but kind of throughout the economy, that this is starting to normalize. Similar to many others, we did a lot of investment in our teams during the back half of 2021. So mathematically, we would assume that there's potentially some relief there, but it would probably be premature to kind of guide to what we would expect that inflation number to be in Q4 of this year. Great. I appreciate it. Great. Thank you, Jake. There are no further questions. I'd like to turn the call back over to Dave Boennighausen for any closing remarks. Thank you, Michelle. You know, lots of discussion inside and outside the industry on the current economic environment, everything from demand to inflation. I will tell you from our brand's perspective, we remain extremely confident in the business's trajectory and our ability to meet our objectives. Importantly, we're seeing strong signs and we have a clear path toward accelerated unit growth and margin expansion. We feel we're on the positive side of both of those initiatives, and we look forward to sharing with you those progress on our future calls. Thank you and stay safe. This concludes the program. You may now disconnect. Everyone, have a great day.