All right, good morning, everyone. I'm Andrew Charles. I'm TD Cowen's restaurant analyst. Appreciate everyone joining us today for the Future of the Consumer Conference, our ninth annual. I'm joined today by Sweetgreen's VP of IR, as well as Chief of Staff Rebecca Nounou. For those not familiar in the room, we are in New York, so shame on you. Sweetgreen is the largest fast casual salad concept, over 250 stores, and really appreciate Rebecca joining us today to dive a little bit more into the business. Rebecca, thanks so much for joining us. Thank you for having me. Maybe just to kick it off, you know, a lot of exciting developments that you guys have driven, you know, so far in 2025. You know, maybe first we can start on the loyalty program, though. Yeah. You know, what has been the thesis behind the revamp and what you're looking to accomplish with that? Absolutely. We recently launched a loyalty program on April 2nd of this year. It is a spend $10, get one point, a very, what I would call, generic, easy-to-understand program in line with the industry. We think that it has broad appeal, and we are starting to see that in some of the early signs. We have shared before about signing up about 20,000 customers a week, thanks in part to our team members in Source. I really want to thank them for that push. Really excited, and just for context, the 20,000 is more than we had in Sweetpass+, and we are starting to see some early signs of driving frequency. That's great. The other thing that's been great is that the collaboration with COTE Korean barbecue, that began a few weeks ago. Can you talk more about that and, you know, what you've observed with customer behavior from that? Absolutely. COTE Steakhouse is the first Michelin-starred Korean steakhouse in the U.S. It is part of a history of collaborations with chefs that really uniquely only Sweetgreen can do. These chefs are friends of the brand and really want to work with Sweetgreen. We know that Korean flavors are really of the moment and seeing really great customer reception, particularly as we comp over steak from last year. Great. You know, full year guidance applied to same-store sales, you know, improves it implies a large step up in the back half of the year relative to 1Q and, you know, what you guys disclosed in April. Can you kind of walk us through the cadence of sales for the year and what's embedded in guidance to help bridge that gap around how you're going to accelerate for the back half? Absolutely. First, if I could just give some context to kind of H1, which had exogenous factors at the beginning of the year with weather, LA fires. In Q2, we talked about having a loyalty headwind and some tough comps with steak. We very much see the back half of the year as having easier comps. We are really excited about our menu calendar innovation around seasonals, which have been huge drivers of frequency and transactions. We see that the loyalty headwind that we disclosed kind of being in the start of or throughout Q2 will become neutral to a positive tailwind in the second half of the year. Okay. Let's talk more about the seasonal menus, you know. Absolutely. I guess, why remove them in 2024 and bring them back in 2025? And, you know, curious about what gives you confidence this could be a material sales driver given the strong 2024 performance without them. Absolutely. We have a lot of data prior to 2024 about the PMIX of these bowls. We know that they perform extremely well. We are relaunching two of our fan favorites that historically have over-indexed to in-seasonals. In 2024, you know, we took a break really to focus on delivering steak and leaning more into hot, which have been incredible drivers in our newer markets, which have been comping double digits. For us, 2024 was a year of broadening our menu, expanding the dinner percentage, now sitting at 40%. This year, it's about, you know, continuing to be an and company, driving seasonals and continuing to deliver menu innovation. Okay. You know, you've called out weaknesses in some of the key major metro markets so far this year. You know, what's driving that relative to your more suburban markets? Is there anything you can do to specifically target improvement in the core urban markets? Absolutely. I would say suburban markets are our newer markets. And so, you know, our 2024 menu has really been a driver of the strength there. Our legacy markets, you know, the customer has been saying, you know, we really want two things. One is seasonals and the second is loyalty. We're starting, you know, we launched loyalty in April. We're starting to see frequency pick up. And the second is seasonals, and they're launching middle of the summer. Great. Okay. You mentioned before the prioritization of speed of service in 2025. And, you know, with the change in COO last month, you know, is this progress on track or does it require Jason to get up to speed? Yeah. I have to say, Jason has hit the ground running. He joined at the beginning of May and comes with a playbook that he deployed both at Chipotle and at Pizza Hut. We knew that coming in. I have been in market with him and personally witnessed on day one him coaching the teams around standards. You know, it's not about best practices, it's about consistency and standards. He's incredibly focused on ensuring speed of service on the back line, you know, and really comes with a playbook. Needs no time to ramp. Yep. And what inning would you say you're in of speed of service, you know, enhancements? I mean, you know, this is something that you've been talking about more over the last year, but, you know, the work had already been started. So is there an inning you can put on this? We are probably in, call it inning two or three. Certainly have seen some really great progress on front line. We certainly see opportunities on digital. We, you know, Sweetgreen has some of the highest digital percentage. A lot of volume going through, call it a two-hour period, particularly here in New York and our midtown restaurants. I think we do a great job today. There's an opportunity to continue to elevate the standard. We think we're probably in inning two or three. Okay. What are those key efforts, you know, that Jason's focused on, you know, his key priorities to help improve speed of service at the non-IK locations? Absolutely. It's about sequencing of orders, throttle, and then just sort of standards, making sure we have enough labor, you know, on the back line. Okay. You've also recently started talking about some lower price point offerings. You know, we noticed yesterday a Monday bowl drop. Yep. Can you share more with us around kind of the initiatives that you're focused on and what you're looking to accomplish with the promotion that started yesterday? For the next three Mondays, we will be launching a bowl under $13 that has kind of no compromise in terms of quality. The Power Bowl launched yesterday has both avocado and chicken. Still featuring premium ingredients and allows us to celebrate kind of seasonality in the rest of the bowl. You know, what one is we find that, you know, LTOs do drive, you know, in newness do drive traffic and interest in coming back into our restaurants and give our guests a reason to come in. For us, it's really about how do we continue to build out opportunities within our pricing structure so there's something on offer for everybody. Okay. Forgive the analysts for not reading the fine print, but do you have to order these digitally or can they be ordered at the front as well? They can be ordered on the front as well. Okay. Gotcha. Okay. Great. Okay. Let's talk a little bit about Infinite Kitchens. You know, there's been a lot of discussion whether the company will let the margin savings, you know, from Infinite Kitchen, which is the robotic technology, flow through entirely to the bottom line or if the company is willing to share savings with the customers through lower pricing. You know, what's the current, what's the team's current view on this and when would we like to see this play out? If I may just take a moment to explain the Infinite Kitchen for those who do not know it or who have not experienced it. The Infinite Kitchen allows us to assemble the bowls. What we are seeing is about 700 basis points in labor gains from that. You know, we have certainly seen an opportunity to give back to the customer as we continue to densify our fleet with the Infinite Kitchen. We have said that will be the predominant operating model for us going forward. We are really pleased with it from both a customer perspective, speed of service, quality, and consistency, but also our team members really love it. I go around, you know, meeting head coaches across the country who work in an IK, held a roundtable about two weeks ago to get their feedback, and they will tell me they will never go back to a classic. I mean, really the team member feedback for us, which is so critical, has been incredible. We're seeing lower turnover. Okay. Great. You know, shortly after the one Q conference call, there was a pause in China tariffs, you know, was announced. You know, you guys shared a lot of detail on the call, and I would call it kind of a worst case scenario, if you will, around what the impact was on tariffs, you know, with IK. You know, where do we sit now, though, with the increased costs associated with IK? And I guess the other question I had as well with that is during the pause, are you able to bring over as much components as possible to help, you know, them sit in a warehouse, for lack of a better word, to avoid the tariffs on them? Yeah. At the time of our call, the tariffs were about 145%. Who knows what they are today? I haven't confirmed that, but what we did share was 15% of our components come from China. Even at the 145%, it was ROIC accretive. We do have ten IKs on hand, and we are in the process of working through this kind of lower tariff rate with our contract manufacturer to make sure that we are purchasing at the most effective cost. Okay. Great. Okay. You know, you've now had three retrofits that have been completed now for some time between six and ten months. You know, what are you observing with the sales lifts, you know, at these locations? We're incredibly happy. I would say that each retrofit is a little bit different. You have Willis Tower, which is a hybrid. We took some space next door to the existing restaurant. We have a front line and an Infinite Kitchen. Seeing really, you know, great customer feedback and a natural lift as we've added more lines. We're also seeing our IKs in New York kind of outcomping the market. Okay. Great. What is the long-term vision for retrofits? I mean, you know, it's not all stores that are capable of supporting an IK, but, you know, is there a way to think about the portion that could, you know, where it is physically possible? Yeah. I would start by saying we are deploying IKs predominantly in new restaurants. Like that is the focus, is to put as many IKs into new restaurants as possible. Where a restaurant, a new restaurant can't, you know, will not get it, it is being designed to have both an Infinite Kitchen and a Classic to make retrofits easier in the future. Certainly, you know, a large chunk of our fleet today could be retrofitted. As they age, consider, you know, where we are considering whether we want to retrofit or relocate. We did disclose we are relocating two restaurants here in New York to a kind of a corner location if they're in line with patio space and putting in an Infinite Kitchen. There's a combination of both retrofit and reload that we're strategizing around. Okay. Great. And then as you focus on achieving free cash flow profitability, you know, maybe you mentioned this, but just to put a finer point, you know, the priority is really on building the new Infinite Kitchens over retrofits? Yes. Okay. Great. Okay. Maybe just on the margins, you know, beyond Infinite Kitchen, what do you view as the largest area for opportunity for margin expansion over the medium term? Yeah. I would start with sales leverage first. As we continue to open in new markets, what you're seeing is lower occupancy, and you'll start over time to see that flow through. Okay. You know, talk a little bit more just on the, you know, I guess just on the occupancy, you know, the Sweetgreen, you know, the new drive-through prototype that you guys have done. It's one store so far, but I believe another store coming with this? Yep. We have two coming this year. One will be a Classic and one will be with an IK. Okay. Great. For the folks in the room, you know, unfortunately, I haven't visited the one in Illinois yet, but, you know, can you talk a little bit more about what Sweetgreen is? Absolutely. We have a Sweetgreen in Schaumburg, Illinois. What it is, it allows you to order on your app or digitally prior to coming to the office and then pick up prior to coming to the office, prior to coming to the drive-through and then picking up your order. We do not have a full drive-through yet, but that is also in the works. Okay. Great. Shifting back to margins, you know, your 2025 adjusted EBITDA guidance appears to be embedding, you know, roughly flat support center G&A dollars versus 2024. You know, can you talk about the efforts underway to manage G&A spend, you know, especially the backdrop of increased advertising spend? Absolutely. I would say we've been really good stewards of capital and cost when it comes to our G&A. We have gotten leverage on G&A consistently. When I look at compared to, you know, two years ago, from 2022 to 2024, you're getting about seven points on revenue. And we've taken that, you know, those dollar costs down. We're continuing to be disciplined in terms of how we allocate our G&A dollars, moving it towards comp driving initiatives, whether that's marketing, menu innovation, or, you know, to Spice and the Infinite Kitchen. Okay. Great. You know, new store performance has been very strong over the last 12 to 18 months. As you've noted with recent classes, you're tracking to year two targets within year one. You know, what's been different about the recent class of openings, you know, relative to what you saw about two or three years ago? Yeah. You know, I would say two to three years ago, you were still dealing with a little bit of a COVID overhang. I think the data has gotten a lot clearer now as we start to, you know, come up with site selection. The second thing is, we went back to our NRO playbook, which we knew prior to COVID really worked. It's about how do you get out in the community, create community connections, create that excitement. I would say the brand continues to be more and more powerful every day. You know, you see references in pop culture, whether you're watching Hacks or, you know, probably, you know, or you're watching late night TV and you're getting a mention there. There's, you know, really customer love for the brand and folks are excited when we come into new markets. That's great. Do you view the recent strength as sustainable as you broaden geographies and go from, you know, roughly 15% development to scaling into the 15%-20% target for new restaurant growth? Absolutely. Yes? Yeah. Okay. Great. Okay. You know, you've alluded to accelerating net restaurant growth in 2026, both in terms of number of stores and percentage growth. You know, what's giving you the confidence to, you know, continue to accelerate net restaurant growth? Absolutely. I mean, I think certainly the performance of the pipeline today, both our 2024 class and our 2025 class, you know, I would say Short North, Columbus, Charlotte, Raleigh continue to have some of the highest opening weeks in the company's history. That gives us confidence, particularly as we go into new markets like Arkansas this year, Cincinnati, Sacramento. Yep. Okay. Maybe moving back into the sales environment a little bit. You know, there's a lot of exciting news, you know, coming into the menu this year, but, you know, curious about what are you most excited about in 2025 to help durably grow same-store sales? It's kind of been unclear in this foggy consumer backdrop that we're in that consumers are seeking healthier options, I think was pretty prevalent and apparent last year. So, you know, what initiatives are you most excited about of all the stuff you're working on? Do I have to pick just one? Yes. You can go in order if you want, or you can give a couple. That's fine. I mean, for me, seasonals are the most exciting. As an avid Sweetgreen eater, I think for me, what I really value is the opportunity to try new things. And yes, you know, I customize, but to come back to have, you know, peach and goat cheese, which is such a fan favorite, as well as the Yolo Bowl is something I know I personally miss. So I'm personally really excited both as a customer, you know, to have the seasonals come back. I think they're huge drivers. And, you know, I get reach outs all the time from customers saying, you know, when are they coming back? So really excited about that for this year. I would say second is loyalty. I think it was a really important, you know, component considering how digitally connected Sweetgreen is to the customer. Really excited to see that continue to pick up. We're going to have some, you know, personalized CRM and better target segmentation in the back half of the year. Really excited about that. I would say third, I would say, you know, for me, like opening in Arkansas. You know, I think most people would kind of look at me and go, Arkansas, but have such brand love there and really excited about that. I would say that's number three. Awesome. Can we talk a little bit just at the loyalty headwind that we saw? I don't recall if you guys, you guys may not have quantified this, but is there a frame for how investors can kind of gauge the magnitude of impact that this weighed on 2Q numbers by? Yeah. So a competitor of ours in about 2022 talked about it being about 100 basis points headwind at the time. I would say we have a higher, you know, digital percentage. So that's how I would kind of guide it. What I would say is, though, yes, it is a headwind in Q2, a material headwind in Q2, but I think the frequency that we're lift that we're starting to see really kind of reinforces the optimism that I have that it'll go from neutral to positive at the back half of the year. Yep. Okay. You know, you talked a little bit in the last call about the AI-driven labor scheduling system. You know, can we talk about what that does to help with labor? Absolutely. Our workforce management tool is a third-party tool that we're using. What it allows us to do is plan headcount to match the sales volume. Whether it's how do we, you know, schedule people to come in in 15-minute increments and making sure that we are staffing appropriately. What we have found is that there are opportunities to add staff to drive additional sales volume. We're really excited. We just finished deploying it this past week across the fleet and excited to see some of the results. We had talked about kind of California being one of the last markets to get deployed, and that happened this week. Okay. Very good. I guess it's a complement to your ability to improve throughput by staffing more during those peak times. Exactly. Okay. Very good. I want to touch maybe just on the opportunity for international. Is this something, you know, this obviously the brand is laser-focused on U.S. development, but I would imagine, you know, you can't help but notice that there's a lot of geographies out there that share your food ethos. You know, what are your thoughts? Is that a polite way of saying copycats? No, you can say it that way. Yeah, absolutely. Imitation is the sincerest form of flattery, of course. You know, what are your thoughts on international? Is this something, you know, that you've looked further up to at this point? I would say I think the IK certainly makes it easier as you think about kind of licensing to go into international markets. It's something we're always, you know, we get a photo probably every week of a copycat somewhere. Certainly there is demand for Sweetgreen. You're right, imitation is the sincerest form of flattery. Certainly something we're keeping an eye on and kind of really excited about. You know, how do we think about licensing? Very good. Using IK. Great. That was a very efficient use of our time. We really ran through all the questions I had. Maybe just to end and keep everyone on time, you know, we really appreciate everyone's participation today and at the Future of the Consumer Conference this week. You know, TD Cowen values the annual Xtel, formerly II Investor Poll that recently began opening for balloting. So we'd be very grateful for your recognition with a five-star vote for TD Cowen Restaurants. With that, I'll end the presentation and say thank you to Rebecca Nounou for her time and insights today. Thank you for having me. Thank you everyone for joining.