Good day, and thank you for standing by. Welcome to the Papa Johns Second Quarter 2024 Conference Call and Webcast. At this time, all participants are on a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star one one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. Please be advised that today's conference is being recorded. I would now like to turn the conference over to your speaker today, Stacy Frole, Vice President of Investor Relations. Please go ahead. Good morning, and Welcome to our Second Quarter 2024 Earnings Conference Call. This morning, we issued our second quarter earnings release. A copy of the release can be obtained on our investor relations website at ir.papajohns.com under the News Releases tab, or by contacting our investor relations department at investor_relations@papajohns.com. Joining me on the call this morning are Todd Penegor, our President and Chief Executive Officer, and Ravi Thanawala, our Chief Financial Officer. Before we begin, I need to remind you that comments made during this call will include forward-looking statements within the meaning of the federal securities laws. These statements may involve risks and uncertainties that could cause actual results to differ materially from these statements. Forward-looking statements should be considered in conjunction with the cautionary statements in our earnings release and the risk factors included in our SEC filings. In addition, please refer to our earnings release for the required reconciliation of non-GAAP financial measures discussed on today's call. Lastly, let me thank you in advance for asking only one question and getting back in the queue for more follow-ups. Now, let me turn the call over to Todd. Thank you, Stacy, and good morning, everyone. I am honored to be with you today as I begin this journey as the CEO of Papa Johns. This brand is synonymous with delivering the best pizza in the industry, and I am excited to learn from and work with our board, Ravi, team members, and our franchise community to build on this legacy. As we move forward together, our number one priority will be to create great experiences for our customers and employees in our restaurants, while also ensuring the restaurant economic model is very strong. My immersion into the culture is well underway. We have a passionate team, a system committed to ensuring we become the best Papa Johns we can be. The team understands what we need to check and adjust to compete and win in the pizza business. You'll hear some of this from Ravi today. As I have begun to share with our organization, I believe in winning as a team and will be collaborative, yet quick and decisive, as we focus on growing this premium QSR brand. Together, we need to move quickly to build on our strengths and execute today as we evolve to be even better tomorrow. I've enjoyed talking with our stakeholders this past week and look forward to meeting you all in the coming months and updating you on our progress. Ravi, I'm going to turn the call over to you to discuss the current state of the business and our second quarter results. But before I do, I want to give you my sincerest thanks for the work you have done over the past five months to lead this organization through this transition period. We are deeply grateful for your leadership and dedication to Papa Johns. Thank you. Ravi? Thank you, Todd, and welcome to Papa Johns. It has been a pleasure getting to know you over the past few weeks. I look forward to partnering with you as we unlock the full potential of Papa Johns and together continue to create value for our stakeholders. Turning to our results. As you read in our earnings release this morning, the challenging sales trends we experienced in the first quarter within our North America restaurants have persisted into the second quarter. While our core product, pizza, and the quality of our brand remained in demand, the macro environment continues to be challenging as consumers pull back on their spend and increasingly focus on value. Despite these challenges, I'm very proud of our team's discipline in managing the P&L, which helped to completely offset the softer sales in the second quarter. On today's call, we'll provide context for our results and highlight the decisive actions we are taking to sharpen our focus, improve unit economics, drive unit development, and provide an excellent consumer experience. In the second quarter of 2024, North America comparable sales were down approximately 4% from a year ago. Similar to our first quarter, this was primarily driven by lower transactions, as continued growth in our aggregator channel was more than offset by a decline in our organic delivery and, to a lesser extent, our carryout business. We estimate this year-over-year shift in channel mix created an approximate 100 basis points headwind to our comparable sales in the second quarter, driven by the relatively profit-neutral impact of reduced delivery fees. And while sales were solid with customers buying two or more pizzas, we saw lower transactions in our lower-ticket items. In this current economic cycle, consumers have become more deliberate in managing their overall ticket and are showing a preference for brands that are offering compelling value. While we know we offer an attractive value for our customers, our marketing and innovation efforts have primarily focused on premium product offerings at premium price points. As a result, our price-value perception is not as strong as it should be in this unique environment. In the second quarter, we began shifting our efforts and investments to focus on initiatives that improve our value perception while still protecting our brand positioning.... We are being thoughtful and intentional in our approach by focusing on opportunities for modest transaction lifts without placing unneeded pressure on store-level profitability. We believe this is critical and are aligned with our franchisees on this core approach. There are 3 opportunities we are focused on in the balance of the year that are geared towards driving sustainable, profitable growth over the long term. First, improving our value perception. We believe showcasing our better pizza, better ingredients at appropriately valued price points will improve our overall value perception and improve transaction trends. For example, in June, we launched our Cheeseb urger Pizza, a fan favorite limited time offer at an attractive $9.99 price point. We also shifted more media towards our $6.99 Papa Pairings, which is our mix-and-match value platform, and recently launched our extra large New York-Style Pizza for $10.99, a more competitive price point than last year. These products are priced attractively and at parity with competitors' offers within the QSR pizza segment. And over the past 8 weeks, we have seen our value perception improved. This gives us confidence that if we maintain an appropriate balance of value offerings and premium products, it will lead to improved sales trends over time. We know that driving trial of our product is critical to winning consumers' wallets in the future. At our company-owned restaurants, we are also testing various value offers in certain markets to analyze repeat rates, identify potential basket starters, and larger basket motivators. These test and learn opportunities provide us with data points to help our entire system better understand initiatives that can increase conversion rates and enable transactions that drive growth in restaurant-level profit dollars. Second, reigniting and expanding our innovation pipeline. We are expanding our pipeline with unique and differentiated offers focused on crave. Over the past 40 years, Papa Johns has built its brand of better ingredients, better pizza, and we have a strong pantry of consumer-tested innovations. Our teams are actively collaborating to identify new opportunities to improve overall customer satisfaction, enhance crave, and increase the visual appeal to further improve the strong value proposition Papa Johns provides. We attended a tasting this past week as our teams presented various products at different stages of ideation and validation. This is one of the best parts of the job, and I must say, we can't wait to share some of these innovations over the next year. They are nothing short of absolutely delicious and are must-try products. Third, improving our digital and loyalty experience. We are focused on improving conversion and reducing friction within the customer experience. Most of our sales occur through digital channels, with nearly one-third of our sales occurring through apps with customers who tend to purchase more frequently. We are actively identifying opportunities to more quickly assess information, streamline the ordering journey, and improve the overall user experience. For example, in July, we rolled out an app update that improves call to actions and navigation, elevates imagery, and more prominently features loyalty rewards. We are also actively evolving our holistic digital platform to improve conversion, drive repeat transactions, and streamline customer insights. In addition, we are maintaining a strong focus on the customer experience in our restaurants, which we know is another key pillar in customer retention. In the second quarter, our restaurant team continued to improve out-the-door times, leading to higher overall customer satisfaction scores year-over-year. I'd also like to touch upon our recent initiatives to enhance our national marketing efforts and effectiveness. In the second quarter, we launched our all-new brand platform, Better Get You Some, which is a modern refresh of our brand visuals, tone, and message. Since the launch, we have seen quarter-over-quarter improvement in our aided brand awareness, along with a higher intent to purchase. Our work now is to couple this new brand platform with value messaging so that we are best positioned to convert intention to sales. In the third quarter, we are making incremental investments to test the marketing messages and impact when combined with our new national brand platform to drive repeat purchase and stronger conversion. We anticipate these investments will place additional near-term pressure on company-owned restaurant-level margins, but the insights we gain will benefit our entire system over time. Now, moving to an international perspective. Our cross-functional teams are executing at a high level. In the second quarter, we experienced an improving comp sales trend line, which was approximately flat when compared with last year, despite continued pressure from our Middle East region. Excluding this region, our international comparable sales were up approximately 3% from a year ago. The number one focus of our international transformation initiatives has been to set the right foundation to support and drive long-term success. In particular, our team has made significant progress in advancing our efforts to optimize the U.K. business model. In the second quarter, we closed 43 underperforming company restaurants in the U.K., and to date, we have refranchised 60 restaurants. As a result, only 13 company-owned restaurants remain in the U.K. market. Based on these actions and the continued operating success of our franchisees, we expect the U.K. market to be profit accretive in the second half of this year. Our attention is now turning towards growth, how we drive higher AUVs, and partner with developing franchisees in this important market for Papa Johns. Additionally, our new international hub leaders are doing a fantastic job focusing on our most important markets, driving partnership with local franchisees on local marketing strategies, and building a foundation of a strong, locally relevant brand for profitable restaurants. For example, in the second quarter, we introduced our biggest international marketing campaign in Papa Johns history with the launch of Cheddar Pizza. This insight-led innovation, integrated with our Better Get You Some campaign and local programming, led to improving global results across each regional hub. The work these teams are doing provides valuable insights that will inform our approach to operations, product innovation, and market development across the globe. All of these initiatives I have discussed today are designed to ultimately drive unit-level productivity, which is the primary driver of unit development. Over the past five months, I have had the opportunity to spend additional time with some of our larger developing franchisees. While comp sales remain challenged, the profit-neutral shift in channel mix, combined with the loss of lower-margin transactions, has had less of an impact on their overall profitability. We also have multiple initiatives in place to deliver real-time cost savings throughout the development process. In addition to greater contractor, supplier, and equipment optionality based on market and anticipated restaurant volumes. Our teams have made substantial progress this past quarter, and I'm now hearing from some of our developing franchisees that their build costs are much more in line with industry norms. Solid unit economics, attractive development incentives, and lower build costs are resulting in continued growth in our gross North America openings, which are on track to be 15%-20% higher than the prior year gross openings. It is also important to point out that many of our new restaurants that have opened over the past two years are producing AUVs that are at or higher than the system average of $1.2 million. These AUVs for our gross openings are significantly higher than those of the closures. Now to dive a little deeper into our second quarter results and outlook. For the second quarter of 2024, global system-wide restaurant sales were $1.2 billion, down 1% in constant currency. The lower sales were largely attributable to lower North America comp sales, partially offset by a 2% net unit growth on a trailing twelve-month basis. Total revenues for the second quarter were $508 million, down 1% from a year ago, primarily reflecting a $9 million decrease in North America commissary revenues due to lower commodities prices in the quarter and, to a lesser extent, lower transaction volumes, and a $3 million decrease in domestic company-owned restaurant revenues, reflecting lower transaction volumes, somewhat offset by a higher average ticket. Partially offsetting these revenue declines was higher international revenues, primarily driven by the net impact of the U.K. company-owned restaurants versus the prior period. Turning to profits. Adjusted operating income for the second quarter of 2024 was $38 million, up 4% from a year ago. The higher year-over-year adjusted operating income was the result of higher North America restaurant margins as we continued to drive cost discipline across our operations, as well as domestic commissary margin improvement. In addition, the second quarter benefited by approximately $2 million from local advertising savings. These positive impacts were partially offset by a roughly $3 million dollar impact related to the operations of our UK franchisee acquisitions when taking into consideration a second quarter 2024 operating loss, an approximately $2 million dollar increase in D&A expense as we continue to invest in our restaurants and technology platforms, and the consolidation of the acquired UK restaurants and lower North America comp sales. Adjusted operating margin for the second quarter was 7.6%, up from 7.2% a year ago, primarily reflecting improved margins at our domestic company-owned restaurants and supply chain. Overall, our domestic company-owned margins improved approximately 130 basis points compared with the prior year's second quarter. Driving the improved margin was an approximately 140 basis points benefit from a higher ticket and an approximately 30 basis points benefit from lower food basket costs as we continued to see relief in cheese and dough prices. Partially offsetting these benefits was an increase in labor costs of approximately 30 basis points. Our teams continue to do a great job optimizing the business model and delivering an excellent customer experience, while also adjusting for shifts in channel mix and consumer demand trends. Over the trailing four quarters, our company-owned restaurant profits have increased significantly as we place a stronger focus on unit economics improvement. Moving on to cash flow and our balance sheet. For the first six months of the year, net cash provided by operating activities was $42 million. Free cash flow was $13 million, reflecting unfavorable changes in working capital and timing of cash payments for income taxes, partially offset by a $6 million decrease in capital expenditures. We continue to operate with ample liquidity, which totaled approximately $260 million in cash and borrowings available under our revolving credit facility and a gross leverage ratio of 3.1 times. Overall, our teams around the globe continue to take a disciplined approach to running the business. We've improved restaurant-level margins and operating profits through commodities normalization, revenue management, and labor optimization in the quarter, despite the lower sales. While our efforts to date have had a positive impact on our bottom line, we recognize there is more work to do. Looking at our outlook for the balance of the year. For the first four weeks of the third quarter, North America comp sales were down approximately 6%. We anticipate comp sales to remain under pressure and be down mid-single digits throughout our third quarter. We then expect comp sales to begin sequentially improving into the fourth quarter as seasonal demand increases. Our value perception continues to improve from the initiatives I just discussed, and we execute on our strategy. For the full year 2024, we anticipate North America comps to be down 3%-5% as we balance transaction trends and unit economics. Internationally, we anticipate full year 2024 international comps will be down slightly as we remain in a dynamic environment. We are pleased with the progress of our transformational initiatives and expect this segment of our business to be a profit contributor go forward. We anticipate 2024 adjusted operating income to be between $135 million-$155 million, a broader range than we have previously guided to, as our teams focus on executing against our strategy, maintaining flexibility on pricing, and increasing testing to improve North America transaction trends. While our first half operating profits suggest we could maintain our previously stated adjusted operating income guidance, we believe additional investment flexibility is warranted to accelerate actions to drive long-term growth. We continue to expect benefits from three areas: the increase to our fixed commissary margin, two, our international transformation initiatives, notably the closure and refranchising of the U.K. restaurants we mentioned earlier, and three, continued growth in North America development. However, these benefits will be somewhat offset by lower North American comparable sales and higher DNA expense. While higher company-owned restaurant margins have been a tailwind to adjusted operating income during the first half of the year, we are anticipating lower year-over-year margins in the second half as we reinvest some of our first half earnings into improving transactions. We also expect to hold pricing within our company-owned restaurants, despite increasing commodity costs relative to last year in the second half of 2024, particularly in cheese and proteins. In terms of other non-operating expense items, we expect net interest expense to be between $40 million and $45 million, our capital expenditures to be between $75 and $85 million, and our tax rate to be between 23% and 26%, all consistent with our prior guidance. From a development perspective, the North America market is our most accretive development for Papa Johns, and we remain committed to accelerating the expansion of our domestic footprint moving forward. Through the first six months of the year, we've opened 31 new restaurants and have closed 17, resulting in a total of 14 net new North America units. This brings our total North America restaurant count to 3,447. For fiscal year 2024, we expect to open more than 100 new restaurants, but the closures of underperforming units could be slightly higher than originally anticipated, although well within historical norms. As such, we anticipate net new openings in 2024 to be between 45 and 65 restaurants. As a reminder, the AUVs of new openings are significantly higher than our anticipated closures. From an international perspective, through the first six months of the year, we've opened 79 restaurants on a gross basis. These new restaurant openings were all set by 116 closures, primarily in the U.K., certain Middle East markets, and China. This brings our total international restaurant count to 2,436. Our regional teams are doing an excellent job engaging with franchisees in their local markets, and we now expect gross openings to be at the higher end, if not exceeding, our current guidance of 100-140 new international restaurants for fiscal 2024. We continue to review the performance of our international franchisees, and while the vast majority of strategic closures within the UK market have been completed, we may initiate additional strategic closures in other regions to improve marketplace health. As such, our net openings could be impacted by the closure of underperforming locations to strengthen our franchisee base and enhance long-term profitability. Finally, as we look to the longer term, we see significant opportunities to drive higher system-wide sales, global development, franchisee health, and overall profitability. Todd? Thank you, Ravi. In summary, we are pleased with our improved restaurant-level margins and profitability in the second quarter, which completely offset the sales shortfall for the quarter. Our brand and core product remain in demand in the highly competitive pizza category, but we know there's more work to be done to realize the full potential of the Papa Johns brand. We are sharpening our focus, investing in digital, and accelerating development through improved economics. We are also evolving our marketing to ensure we meet the consumer's value expectations. By prioritizing customer experience, franchisee success, and operational excellence, we're confident in Papa Johns' continued growth and value creation. I am excited to be part of a culture where people feel empowered, valued, and appreciated to be their very best. I also look forward to building a strong and collaborative partnership with our franchisees and help to attract new franchisees to Papa Johns to build an even stronger brand. Our team here at Papa Johns has set up an aggressive plan to immerse me in the business over the next several months. My plan is to come back to all of you when we are ready to discuss how we'll amplify our differentiated position and unlock future value for Papa Johns and all of our stakeholders. At this point, we'd like to open up the call for any questions you may have. Thank you. As a reminder, to ask a question, please press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. We ask that you please limit to one question. You may requeue for any additional questions. Our first question comes from the line of Jim Salera with Stephens Inc. Your line is now open. Hi, good morning, guys. Thanks for taking our question. Todd or Ravi, I wanted to dig into the trends into 3Q. You know, Ravi, you had mentioned that in the first four weeks, down 6%, it seems like kind of holding that trend, you know, through 3Q. Is there a reason that we shouldn't expect maybe a little incremental lift in 3Q, just given some of the innovation you have, more media behind the Papa Pairings, and what I would think would be a more kind of favorable in-market activation for some of your value offerings? Morning, Jim, and thanks for the question. As I shared, we're really focused on three things to continue to drive the long-term run rate of the business improvement. The first is like, as you talked about, improving the value perception, and that is by bringing Papa Pairings and our New York Style, which are both at great, fantastic price points, front and center in the business. Two, I hope you have the app downloaded and seeing how we reskinned the digital experience, and we're really excited about those two elements of the business. But what we'd say is that what we're seeing in the consumer data is that the consumer is more value-focused right now. We're trying to take a really balanced perspective in terms of the second half of the year, making sure we're finding that artful balance of sales comps focus, transaction trends focus, as well as unit economics. I think, more broadly, we're excited to continue to test in the market a couple of new ideas which we think are gonna help the business for the long term. Okay. And then, if I can follow up on the digital piece, some of your competitors have seen frequency growth after making tweaks to the loyalty structures of their digital offerings, particularly lowering the threshold to redeem for items, you know, rather than saving up for pizzas or something after multiple visits, you can get add-ons like drinks or dipping sauces. Is that maybe something that we could see, you know, in the near term, in the back half of the year, that could add some incremental value and maybe provide a lift alongside the other, you know, in-market activations you guys have going on? Yeah, Jim, this is Todd. I think that's a big opportunity for us. If you look at what it takes to earn $10 off in Papa, Papa Dough and to get to that $75 threshold, you know, on average, that's three visits from our consumer base. And, you know, our average consumer only comes four times a year. So the ability to actually start to earn rewards quicker to get folks more active in the app to drive frequency and get them to return more often is a big opportunity. We'll work through that in short order to make sure we can bring that to life. The great news is that's been on the roadmap for the team, and we know it's a big opportunity for us. Yeah, maybe Todd, maybe the only other thing I'd add to this conversation, Jim, is like, you know, like Todd's been here for all of the week, and, you know, we've had a number of great sessions with them. A few that we came out the gate right away with is, you know, getting right into the test kitchen to talk about innovation. Second, making sure we were talking about our digital experience, and third, was making sure our loyalty strategy was front and center in front of Todd, because, we are strong believers that getting consumers into our app, they drive higher frequency. We think it's stickier. And to Todd's point, like, we believe that in this value-conscious world that we're living in, driving stronger immediate gratification could bear some real fruit for our franchisees in the business, and also continue to drive folks into 1P, which is very important. Great. I appreciate the color, guys. I'll, I'll pass it on. Thank you. Our next question comes from the line of Sara Senatore with Bank of America. Your line is now open. Great. Thank you very much. I, a question, I guess, maybe a two-part question. The question, first part is, you know, you're seeing a lot of improvement in kind of underlying consumer metrics, value proposition, brand awareness, your service speed. I mean, how long should it take for that to translate into transaction growth? I guess, you know, my thought was, I know that, you know, Todd just said this is a kind of three times a year, but, you know, typically speaking, I guess I would've expected to see some improvement in June versus, you know, what we saw in the beginning of the quarter into July, and we're not really seeing that. So just trying to understand how long it takes for these kinds of initiatives or improvements to translate. And then, related to that, you know, I know you've been testing some value options in your restaurants already, but again, you didn't really see any difference in the comps trajectory for company-operated versus the broader system. So I'm wondering, you know, how do you get these initiatives to resonate, I guess, is fundamentally the question, and how long should it take? Well, Sara, I'll start. You know, it does take a little bit of time to be out there consistently with a strong value message. The great news is, the teams made those adjustments. You know, as you think about New York style extra large at $10.99, that's great value. You think about Papa Pairings at $6.99, that's great value. We just need to continue to be out there with the appropriate pressure, both nationally and locally, to make sure that the consumer understands there is great value time and again from Papa Johns. And that will build over time, so we've got to work towards that. I'll turn it over to Ravi to talk about the test. I'm excited, we've got some good tests underway in the company restaurants, but just a little too early to have all of the learnings. But Ravi, why don't you talk a little bit more about that? Yeah. So first, Sarah, just on your question around progression throughout the quarter, the only thing I wanna remind you on is kind of the underlying or the baseline comp trend from the prior year. We did see sequential improvement in terms of the comp run rate as we progressed through the quarter, and we see that fairly directly correlated with us improving the value perception. Again, we're comping in Q3 +3% from the prior year, so you can see the progression on a two-year stack. From a testing standpoint in market, what we're really focused in on is making sure we are taking actions that improve repeat rate, which is another code word for long-term gains and frequency, to making sure that we're finding a really healthy balance of getting consumers into our 1P channel, buying the products that differentiate us. And third, we're really focused in on making sure we're finding that artful balance of our premium product proposition. But how do we continue to be very successful in these more value-conscious moments in time? So we don't want to share too much details on the test just yet, given where we are in the cycle, but we're taking a highly disciplined approach to running and operating the business and making sure that we're making the right investments in the business to improve both our digital experience and our value proposition, which should help over time bend the curve on sales comp and do it in a way that is gonna deliver strong unit economics for our franchisees. Yeah, and the focus of our programs immediately, Sara, is we have to get folks to show up more often at Papa Johns, and we're really trying to make sure that we drive transactions and get folks into the restaurant. We know if we have them show up, over time, we can trade them up across the menu. You know, we're trying to make sure we do that in partnership with the franchise community and in concert with the restaurant economic model. Teams working that plan really hard, and I do feel like we've got some solid plans in place to start to build some momentum over the course of last year, notwithstanding the comps from a year ago that Ravi just talked about, but really starting to set up a really strong plan as we go into next year. Thank you. Thank you. Our next question comes from the line of Peter Saleh with BTIG. Your line is now open. Great. Thanks for taking the question. I did want to ask about the development costs. It sounds like you guys made some progress on reducing some of the costs, which were, I think, well above where you wanted them to be and where the franchisees wanted them to be. So can you maybe elaborate a little bit on what you're seeing on development costs, maybe in the most recent build? And if you did see some reduction in those costs, where exactly are you seeing the savings recently? Thanks, Peter, for the question. And I think what you're hitting on is exactly the right topics for us to kind of unpack. First, we're taking a highly disciplined approach to how we're engineering our development costs. And what I shared at the Q1 call is, like, we had three vectors we're focusing on. First, improving our architectural designs to ensure that we're building a box that is highly effective, supports service, but it is cost effective. Two, we've been out there procuring new deals with our general contractors, which is absolutely delivering some benefits. And third is really a focus on making sure we have the right optionality in terms of furniture and fixtures. Across all three of these elements, which are the three critical elements of the build, we're seeing progress. We shared with our franchisees, just in the last month or so, another wave of cost savings that we'll be able to deliver. So I think it's a little bit too early for me to share a specific number. What I can definitely tell you is that our costs are coming down year over year in our builds. I don't want to get too specific on that just yet, but I wanna kind of reaffirm to you, as I said in the prepared remarks, that what I'm hearing from our larger, developing franchisees is that their build costs are coming in much more in line with industry norms. We think that this is another example of how we're improving the unit economic model, as we're delivering better restaurant margins, bringing down build-out costs. We believe that both of these are critical elements to driving gains, and I look forward to updating you in future calls on just the progress we're making on North American development. Now I've been pleased to see the work underway on a lot of the value engineering, and I know we're making a lot of progress and committed to making that progress very quick. In the interim, we'll look to make sure we've got the right incentive plans in place to bridge the gap until we get those costs in line, to make sure we're continuing to put shovels in the ground to get new restaurants open and build a really strong pipeline into the future. Understood. Then just, Todd, you know, I think you guys mentioned potentially, you know, made changes to the rewards program to allow customers to earn rewards faster. Just trying to understand how heavy a lift this is. Is this something that could happen, in the second half of 2024, or is this more of a 2025 type of event? Yeah, not so new into the role, Peter, to see, and, and to be fair to my technology team, I, I think it'd take a little bit of time. We've got a little bit of work to do to, one, optimize what that program truly looks like, and then to work through the internal, technology work to make sure the platform sets itself up to deliver on that promise seamless and, and very easily for the consumer. I know some of the work has already started, so I'll have, Ravi comment if he has anything more to add. Yeah, first, we're not taking a waterfall approach to how we evolve our digital platforms. Like, we're acting in a really agile way. So if you'll actually look at our recent app update, one of the simple but important changes that we made is that we put loyalty rewards front and center for the consumer. As soon as you get to the homepage, it immediately tells you if you have value and can redeem some Papa Dough. So I think that's one example. And second is, we're constantly working the digital roadmap in terms of future updates that we're gonna make. So as I think about how we create more value for the consumer from a loyalty program, one, is the mechanics of the actual program. Two, it's the natural things that great digital companies do to elevate for the consumer, how they can earn and redeem rewards. And, one of the last things I just wanted to share on that is, in this recent app update, we made deals much more front and center for our consumers. Actually, no change from like, if you're a promotion standpoint, but just how we were showcasing our deals, simplifying navigation, has increased the penetration of the number of consumers who are opting in. And I think this is an example of how we're working really cross-functionally to make sure that we're finding opportunities to bring value to our consumer. I'm excited to partner with Todd on the future of our loyalty program, because driving the loyalty program is gonna drive 1P, it's gonna drive frequency, and will support our strategy around continuing to gain share through our better ingredients, better pizza mindset. Thank you. Our next question comes from the line of Eric Gonzalez with KeyBanc. Your line is now open. Hey, good morning, and thanks for the question. It seems like the international business is really turning the corner, you know, particularly outside the Middle East and China. So perhaps you could discuss where some of the upside is coming from, and maybe also address those problem areas, such as the Middle East and China, and how you see those markets evolving over the next few quarters. Also, it might be helpful if you could talk about the comp trends in U.K., specifically, just given the size of that market and its contribution and profitability. Thanks. Yeah, thanks for the question, Eric. I think this quarter in international is a little bit of an example of how we're taking a thoughtful and structured approach to our international transformation. We have GMs now based across the globe in key markets or in key hubs, such as Singapore, clearly the U.K., as well as in Dubai. And what that's really done is broaden the Papa Johns management team much closer to consumer centricity and deeper understanding and partnership with the franchisees. So, we're just getting better at being highly consumer-centric and partnering with the franchisees to identify opportunities around menu innovation, to making sure we're partnering to understand which store formats, restaurant formats are working well. When I think about, like, more broadly, what we're seeing in terms of success, like, we're seeing strong gains in some of our really stronghold markets that we have in Latin America, which is fantastic to see. But we're also seeing pockets of strength all across the globe. And we're spending time, like, consistently talking about those shared best practices and thinking a little bit further out on how we're gonna gain additional momentum. Within the quarter, we also used the power of our marketing offense and our consumer centricity to launch cheddar pizza. It launched across 23 countries. It was one of those LTOs where we had great consumer research, and that LTO, in terms of penetration, grew and improved the run rate across the globe. So we think we're identifying a recipe of success there. Specific to the U.K.., we're really four quarters in into the real work here. This quarter really represented the culmination of refranchising 60 locations and closing 43 stores. So the market did shrink a little bit in size, but we did it in a highly strategic way to make sure we were setting up franchisees to have better unit economics. Second, being really thoughtful in partnering with the franchisees to improve the sales trend. And what I'll say is, like, as we look at the results, the stores that are changing hands between our franchisees, we're seeing either high single-digit or low double-digit increases in terms of comp sales performance in those stores that are changing hands. So comps are improving in the UK. My attention right now in the U.K. is really turned to, like, setting that innovation engine up in a way that is gonna drive great value perception, as well as have a premium positioning. And second, like, continuing to evolve our marketing model. So from my standpoint, like, I'm not done focusing on the U.K., but I am increasing my attention to some other markets, such as China, because I believe that there's a lot of opportunity for us to unlock there. And I was just talking to our international team, that they're planning on getting out on the road in just a few weeks to really attack our 2025 planning from both a menu standpoint as well as from a restaurant format standpoint. I'm excited for what that market can deliver for us for the long term, but we also recognize that the world is dynamic. Yeah, what I'm pleased to see is, the team has really built a really strong playbook. The team that can go partner, the team that can go execute, really enhance and turn around these markets in concert with the franchise community there. So, credit to the work that's been done in the UK. I think that sets us up to continue to strengthen the brand across the globe. Thank you. Our next question comes from the line of Alexander Slagle with Jefferies. Your line is now open. Thanks. Good morning. Really good job on the restaurant level profit line, despite the softer traffic, and you provided some good details on the moving pieces, but just wanted to clarify some things. I guess, the local marketing spend reduction, I think that falls in the restaurant level line. Just wanted to clarify that. And then, I guess, how that shift in spend might impact the restaurant level line, if you have any dollar impact to talk about. And also if that local spend had any impact on the softer company-owned North America same store sales, or if that was pretty immaterial. Yeah. So first, yes, local marketing savings are part of restaurant margins. So one, I just wanna make sure I answer that question for you. Two, we're taking a really, like, thoughtful approach to assessing our overall marketing strategy. What you'll see as we went through the quarter of Q2, we started with Cuppy Pepperoni. We We saw the consumer trends. We rebalanced our media mix at a national level to have a higher mix towards our mix and match $6.99 offer, which we call Papa Pairings, which actually, that's the price point we've been running it at, and it's at parity with some of our key competitors. One of the things that we are doing as we progress into Q3 is, like, we are in certain of our corporate markets, testing different value offers. The goal of our value offers here is to find that balance of great value perception, things that drive basket starters or larger baskets as a whole, and continue to assess, like, what is the right mix between national and local marketing. You know, like, we have to be, like, very thoughtful that the consumer is dynamic, and we need to continue to be agile and check and adjust along the way. Yeah, no, I do think, Ravi, and just an observation from where I sit, is, as we made some of the shifts in the late first quarter into the second quarter and put a really big bet on the national plan, pulled a little bit back on the local advertising, with the new campaign, the new agency, and, you know, at a time where we've actually focused a little bit more on our premium quality messaging, you know, it's a great plan, but it was probably at the wrong time for the consumer environment. With all the shift, didn't have enough focus on value, with the shift. You know, we probably didn't have the pressure that we needed balanced at the local level to really compete with some of the regional differences. So it's one for me to continue to look at as we move forward. Do we have that right balance between kind of the national message that's very efficient and effective, was supplemented and then complemented with some local strong messaging along the way? So I know we'll have some work to do to have some conversations with our franchise community moving forward. So, stay tuned on that front. And maybe, Todd, the only thing I would add is that's really why we're taking this clear focus on actions we're taking to drive value perception, having a clear perspective on how we're reigniting and expanding our innovation pipeline for the long term, and looking at opportunities that improve our digital and loyalty experience. So those are things that cut across all parts of the business and ultimately truly impact how the consumer psyche is, and we think that will lead to transaction growth over time. Thanks. Thank you. Our next question comes from the line of Chris O'Cull with Stifel. Your line is now open. Thanks, Todd. Congratulations on the new role. I'm curious whether you believe the brand's positioning is unique enough to take share in the category, or whether you believe there needs to be more fundamental work done just to differentiate its positioning. Yeah, no, thanks for the congrats, Chris. You know, where we start, better ingredients, better pizza, you know, high quality, fresh ingredients, fresh, never frozen dough on most of our offerings, six core ingredients, you know, signature sauces, real cheese, fresh toppings. I mean, what a great spot to start with. I think we've got all the tools in the toolbox to really amplify and talk about our unique differences. Team's doing a great job executing that day in and day out at the restaurant level. We'll always have work to do to be even more consistent on execution day in and day out. But the elements are there. I think we're just gonna have to figure out how we make sure we amplify that message as part of our overall campaign moving forward, both nationally and locally. balancing it in the context of we're in a very value-centric, value for the money, environment today, and that doesn't mean just price, that means making sure folks understand that the best pizzas in the business come from Papa Johns, and then you can trust and believe that you're gonna get that every single time with every single visit, and then have some great innovation that you can only get from Papa Johns over time to make sure that that all reinforces that messaging. A lot of great things in the pipeline. As Ravi said, he got to do food testing. I think day one, probably hour two, I was in the kitchen with the team. There's a lot of creative stuff in the pipeline that can complement all of that messaging moving forward, and we'll see where things need to evolve to really make sure the consumer understands why we're uniquely different. Great. Thanks, guys. Thank you. Our next question comes from the line of Brian Mullan with Piper Sandler. Your line is now open. Hey, thank you. Just follow up on the domestic development. You know, given all the work you've been doing on improving the unit economics, you know, I'm wondering if when that is completed, you know, if the organization might be willing to build more company-owned stores more aggressively than the past, you know, even if it's just for a couple of years period of time in order to force that development growth issue a little bit, take matters into your own hands. Again, I know there's a lot to tackle, but wondering if that's a part of the consideration set as we go forward. Well, Brian, I'll take that. We've got some work to do to really understand our long range outlook and our capital allocation strategy. But, you know, first and foremost, it is gonna be invest in growth. We got to do a lot to really continue to make sure that the digital experience is more seamless, that we got our loyalty program working, that the tech stack is solid to build and layer all of this on. But there is a role to be a great brand steward on putting some restaurants down. We'll have to see how that works and fits within, you know, our capital allocation strategy. So I would just ask, give us a little bit of time to work through that, to really make sure that we're doing the right things to be that great brand steward, to lead the system, to create the confidence. I do think, you know, we're gonna have to take a look at what I would call is ongoing system optimization. Team's been doing it, you know, buy and/or sell, restaurants, bring some new franchisees in, scale up some existing franchisees, really make sure that as we do some of that work, we get some strong development commitments along the way, to continue to make sure that not only is the company leading the way, but we've got some great, really excited franchisees. It's really setting the pace on growth moving forward. We've got some of that in pockets across the organization today. But I'd turn it over to you, Ravi. You've been looking at the longer range plan, and I haven't even got a chance to go through that with you yet. Yeah, and just like, just a reminder, over the last 12 months, like, we've done some real things to improve the fundamental unit economic model. We've seen restaurant margins improve 200 basis points on a trailing 12-month basis. We've talked about how our build-out costs are becoming much more in line with industry norms at our larger developing franchisees. We are taking steps to improve our digital experience, which ultimately drives conversion and repeat. So we're building the long-term recipe for sustainable growth. And I think, maybe in week 2 or 3, we're gonna really sit down with Todd and spend some more time on these key topics. Like, this is very top of mind for me and the team, and I'll tell you that we are spending a lot of time making sure we're setting up our franchisees to have durable, sustainable growth and really solid unit economics. Thank you. Our next question comes from the line of Nick Setyan with Wedbush. Your line is now open. Thank you. I just wanted to get some clarity on the margin trajectory around international in the second half. You know, just given all the changes, you know, how should we think about the international margins in Q3 and Q4? Well, maybe I'll, I'll most squarely hit on the UK, as that's the most fundamental driver of the margin structure in international. We only have 13 company-owned restaurants in the U.K. at the end of Q2. So we are moving back to what is our go-forward business model in international, which is to be a franchisor. Did that answer your question, Nick? It does. I just, you know, I mean, relative to kind of where we were, let's say, pre the acquisition, there's just been so many changes. So the question - I mean, it would be a lot more helpful if we kind of got a little bit more directionality, or at least some brackets in terms of where the margin could settle in the second half. But I also understand, you know, the challenges of doing that. Yeah, I guess, like, from an international standpoint, maybe the easiest way to frame this up is, like, we're going back to more of a traditional franchisee model. So that's gonna allow us to go back to more historical levels, if not slightly higher in the second half of the year from a margin structure standpoint. So maybe that'll give you some relative metrics to look at versus prior years. Ultimately, what was really impacting the international margins was the U.K. company ownership structure. That is helpful. Thank you. Thanks, Nick. Thank you. Our next question comes from the line of Jim Sanderson with North Coast Research. Your line is now open. Hey, thanks for the question. I just wanted to follow up on the promotion you had in market, the $9.99 cheeseburger promo. Did that meet expectations on yield? Because I'm trying to reconcile the value perception gains you've reported with the deceleration in same store sales through July. Just any feedback on kind of how that impacted benefit of the quarter, how to think of that? Yeah, thanks for the question, Jim. A few things on Cheesy Burger Pizza, like, one, we actually look at the ticket size when Cheesy Burger Pizza was actually in the promotion. The ticket was very healthy and accretive to our average ticket. So first, while it was at a really attractive $9.99 price point for the first 500,000 pizzas, it was really healthy in terms of what it did to ticket, because consumers had a certain amount of money that they were gonna spend, and that allowed them to mix into other products as well. That's one thing. So the second is we did see sequential improvement on a two-year stack as we progressed through the quarter. We just want to make sure we keep in mind that, you know, like, there was the launch of a different product in the prior year that influenced what the comp trend was like. Second, it was a fan favorite. At $9.99, you know, it created excitement and made us more top of mind with our consumers, which we think drove a lot of value. And now we've had, like, a really healthy balance as we've moved through the last couple of months from a premium innovation, like Cubby Pepperoni at the beginning of the quarter to the time that we got to the middle of the quarter, we were talking about Cheesy Burger at $9.99. It still delivered a fantastic ticket, and we were at margin in market at parity relative to other competitors in terms of our mix and match offer. So we think that this recipe of finding the right balance of premium innovations that only Papa Johns can deliver, showing spots of parity in the market on more value offerings, it is a way that we believe that will continue to drive positive momentum on transactions over the next couple of quarters. But we are taking a really pragmatic approach of where the consumer is today and, you know, the things that are on consumers' minds. And we're gonna stay agile. We're gonna keep testing. We're gonna keep making really good decisions that balance transaction growth, sales comp growth, and unit economics for our franchisees. Just to follow up, you said you saw sequential improvement on a two-year stack, so no concern there with cannibalization, having your consumer just trade down to the promotion without incremental traffic? Just wanna make sure I understood that. So, yeah, let me make sure I frame up. So like, when I look at what's happening in the last couple of more value-oriented LTOs that we've been putting media against, and there's a mix of them, we've seen really healthy tickets across all of them, and all three of them have actually been net accretive to the total blended or the blended average ticket. So while there may be trade that's happening within the consumers' baskets, what we're trying to ensure we do through the digital experience, it give consumers the optionality for add-ons that make their pizza even better, being able to do the right cross-sells. We think this mix of strong value orientation that makes sure the consumers can get a great value, but they can also build their basket the way they want, allows us to, like, prevent any material cannibalization and drive really healthy tickets, driving great value perception for the consumer. So I guess, Ravi, it's probably helpful for Jim. Why don't you just talk a little bit about a couple of leaky buckets? I know we've talked about the plans to address those already, but probably worth just reiterating where those leaky buckets were in the quarter. Yeah, so we've spent a bunch of time doing diagnostics on the business, both from a product grain standpoint, from a consumer grain standpoint. And what we want to reinforce is where our transactions have been really healthy is in consumers who are buying for either social occasions or slightly larger orders, two pies or more, we actually saw really strong performance, and we were up in those sorts of transaction types for the quarter. Where we're really seeing leaks in terms of transaction trends was with consumers who were only purchasing one pizza or no pizzas, and where they're only purchasing a side. So when we looked at the composition of where we need to regain transactions, it gave us some real insights on how to adjust our barbell to allow us to continue to find that right balance of value orientation and premiumness. That's actually what is special about this brand, that we have a right to play, and we can play at both ends of these barbells, and we're just getting sharper at how we actually do that effectively in this consumer cycle and in future consumer cycles. All right, thank you. Thank you. Our next question comes from the line of Fred Wightman with Wolfe Research. Your line is now open. Hey, guys, just one follow-up and then a question. I guess, Ravi, the occasions that you were just touching on, sort of the one pizza or less or the sides only, is that really a proxy for lower income consumers, or do you think it's something else? And then, the main question is just when you guys talk about the need to improve value and the value perception, I'm wondering where you're seeing the biggest gap versus target. Is it versus pizza peers? Is it versus other parts of QSR or maybe versus your historical levels? Thanks. Yeah, so I'll take the first part of that question, and then Todd, maybe I'll let you share some outside-in perspectives since you're new, and I can complement. So, we think about the pizza business because pizza is for everyone, and we think that this is one of those categories that serves everyone. That there's multiple occasions that consumers choose to purchase pizza. And we think that when you're in that value-oriented occasion, smaller purchase size, that is where we're seeing maybe a little bit less of that impulse buy to just pick up that small order. And that's really why we started to evolve our media mix and what we were marketing to. I don't know if you've seen our recent New York-style spot, but if you listen to the voiceover, we are really talking about the incredible value that you can get at $10.99, an extra large pizza for $10.99, and it's a fantastic pizza if you haven't tried. So you hopefully, you're starting to see how we're taking a rich consumer insight, partnering with our franchisees at a great, fantastic price point to attack where our leak is in the bucket. You know, the pizza business, pizza category is a big category to continue to compete in. If you think about where I think we have the biggest challenge, relative value, it's more versus our competitors within the pizza category. You know, it's a different occasion. There's great value for the money in pizza. You can have it as a leftover. So when you think about what the consumer thinks about on overall value, pizza is just a great spot to play, and we gotta make sure that our relative value versus the peer group is quite strong. We'll keep an eye on the other categories and the shifting across categories because there is a lot of value centricity out there today, but we got to compete and win in the pizza category, first and foremost. Well, I'd like to sincerely thank you for your time this morning and your continued support of Papa Johns. Appreciated all the questions today. Thank you to our team members and franchisees for the resiliency and the agility you have shown during these unique times. It's exciting to see the way everyone has worked together, and I can't see what--wait to see what we accomplish together in the future. Thanks, everyone. Have a great day. This concludes today's conference call. Thank you for your participation. 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