All right, we're excited to kick off the consumer track of our conference with the team from Shake Shack. Just a quick note on logistics. If you have any questions, I'm happy to work it in to the conversation. I obviously have some questions, but if you have follow-ups, et cetera, raise your hand. We'd love to make this as organic as possible. So with that out of the way, some familiar faces for a lot of you here. We've got CEO Randy Garutti and CFO Katie Fogertey. So thanks so much for joining us today. No problem. So most important topic of all, Randy, and what happened to the chicken dance? Ah, chicken dance. This actually will get into other things as we think about increased marketing. Let's back it way up, this is a great intro. I think Shake Shack has, for 20 years, been a company that never really has spent a lot of money on advertising. We've been fortunate to have this amazing brand that punches so far above our weight. We've been able to make a lot of noise. We obviously realize that over 500 restaurants now and in 33 states, there's a lot that we've got to do to continue to get brand awareness up. We've learned. It's very clear, where we have high brand awareness going in, we immediately do well, stay strong. Where we have lower brand awareness, we usually have this big pop of the people who know, and this, this kind of traditional Shake Shack pop, it comes down, and we grow it over time. As we look ahead now and into 2024, especially in this funky consumer environment we're in, we are absolutely thinking more and more about marketing, advertising, and different ways to get there. Obviously, we're not big enough yet to have a Shake Shack bowl game. Someday we'll get there, I hope, but for now, it's got to be really pointed. So one of the fun things that we did a couple weeks ago is we teamed up a few NFL players and some key NFL voices, and we said, we got it out and went viral on Twitter, millions of impressions. And it was, if an NFL player does a chicken dance in the end zone after they score, we'll give out free Chicken Shack sandwiches. By the way, that was also a way to keep honing the world on understanding how good our chicken is, 'cause we're traditionally a burger joint. So that had a lot of purposes. Nobody did the chicken dance, unfortunately, the few that we got in there, we didn't get there. But some of the podcasters, who have pretty big reach, ended up doing it, and we said, "Oh, we'll do it anyway." So the chicken dance was covered. For a week, we did a free Chicken Shack, we spent $10. So how are we thinking about this stuff? Because I think we're living... Right now, this is one of my biggest views of the consumer right now. Everybody wants a deal. Y'all are shopping right now for holidays or whatever. Everybody wants a deal. I can't believe how many restaurant companies are doing BOGO this, and extra that, or whatever, and we've been dabbling a little bit in that sort of stuff with added value, and we feel good about it. And what we see in the chicken dance, and what we see when we do things like this, Shake Shack's consumer, generally being higher end, spends a lot on top of the deal, and these things can be really accretive to us. So we can give a value deal. We're not discounting the brand. We keep our strong positioning, and we get to spend, the whole thing's profitable. So that was a long answer. Yeah, it's fine. You may see us dabbling in chicken, chicken dance or some other fun things like that as we go forward. I had to ask 'cause I'm from Atlanta, and, you know, back in the day, the Dirty Bird was a big thing. Yes, yes. Jamal Anderson and all that. Yeah. I just had to ask. Anyway- Yeah ... So start a little higher level, just on the demand side. On your last call, you noted that trends firmed in October after a hiccup in September. Just how do you feel about underlying demand and the health of your consumer? Well, I think our consumer, again, tends to be higher end, so that consumer's been a little bit more protected, as we know. Where we've seen all year, a little bit of, you know, funkiness as we talk about, is that middle and lower end consumer and some of the longer travel, that mid-distance travel consumer, that has been a little more choppy for us. I think we're all out there looking at the, this shopping trend. There's lots of mixed signals out there. Generally, we feel like the consumer is employed, continuing to spend. Mm-hmm. Our general consumer is strong, but we're cautious, and I think everybody should be and would be. I think, as I said earlier, people are looking for deals right now. There's a lot of deals out there. Gaining share is our opportunity, and that's where we're putting our money, that's where we're putting our efforts. And, you know, we're all hopeful that the economy continues to stay strong. It appears it is, but there's lots of different twists and turns we've got to keep an eye on, and we're cautious heading into the new year. All right, great. You touched a little bit on the new marketing and promotional side of things, but things like Free Fridays, the BOGO Shacks, Happy Hour, and then also some targeted local digital initiatives, maybe on that brand awareness side in certain new markets. But I guess elaborate on how these initiatives are impacting sales, and with your ad spend still very low, where does that rank order as you think about 2024, 2025 as a key comp driver? I think it's one of the biggest unlocks, opportunities as this company grows into many years ahead. As I said, we're probably not at a scale yet. We're not at a scale yet where we can really hit mass media and capture. We just don't have enough doors to take that money back, right? So our return on that kind of ad spend is, isn't great. So what are we doing? We are increasing our ad spend in great performance marketing that has strong return on ad spend. I mean, we have really, really strong return, and you see it in our channels and how we push, working with other opportunities with Google, Meta, and Waze and other places you'll see us pop up from time to time, but then also being really regional about it. So we may take a region like Texas, for instance, that is a massively growing region for us. We just opened seven restaurants. Yeah ... this year, about eight, an eighth today, this year. It's a big push into Texas, which is a new region for us. Lots of really strong, great, entrenched local competitors, and we will spend a little bit there in a local way. You see the brand popping up more and more. We may try a targeted offer, a certain code word. Mm. So I think where you'll see us, you probably won't go see a whole lot of Shake Shack commercials just yet. We'll get there.... but you will see us popping up in a lot more smart performance channels. And that's the beauty of the digital world we live in. We can really target who we wanna spend to and where, and ensure a great return. So where we don't see a great return, you pull that back immediately, and next week, you try something else. And we will have to talk about G&A looking forward. That's where we really wanna make a good part of our investment in this next year, is increasing our ads, increasing the way that we connect with people in all the areas I've just talked about today. That's one of the, the most exciting ways that we can efficiently, with discipline on that spend, keeping our G&A in a strong place, continue to drive the sales. I guess as you think about your footprint, I mean, you've got a brand that's got very high awareness, but still only 300 units, and I think that's something that's lost on the investor community. Sometimes your footprint has doubled in the U.S. in four years. But I guess just a quick follow-up to that. Is there a way to dimensionalize or frame sort of the percentage of your U.S. units or regions where there is an awareness gap, or there is... You know, you talk about recently, you've talked about consistency and throughput and speed and kinda operate. Is there a way to frame what percentage of your units you see these opportunities that are sort of outside? It's a great question. I don't wanna quantify it 'cause I'd be wrong, and don't wanna give that kind of guidance other than saying: Obviously, we are a New York-based company, okay? You come to New York City, here we are, we all know it. You know Shake Shack, you love it. We can open anywhere in this general Northeast, and people know it, love it, let's go. Obviously, we're quite strong on the West Coast. We've generally been quite strong all the way from Seattle, all the way through California. So these coastal markets have traditionally been our higher AUVs, as we've shared, higher brand awareness, and the work we gotta do more of is in the center of the country. And that is good to know. It's obvious, and that's where we're really gonna target things as we go ahead. One of the things we've made a big push in, as you all probably know, is drive-throughs this year, right? And we deliberately did those in lesser brand awareness places, in the Midwest, in Texas. We wanted to see how that model would work. We're learning so much about that. What we're super excited about for 2024 is the drive-through Shacks will, for the most part now, actually be in high awareness places, as we're doing California, New Jersey, Long Island, some of the places where it's a little bit more of a Shake Shack strength and brand. And we're excited to see what the drive-through means to the guests who already know what Shake Shack is? Mm-hmm. Mm-hmm. Makes sense. All right, we'll come back to pricing in a minute, but I wanna make sure we have plenty of time to talk about margins and returns, which I think are two areas that I know you're increasingly focused on. Maybe just to level set for anyone newer to the story, you know, your store margins are up around 300 basis points year to date. Just walk through some of the key drivers of that margin performance this year. Sure. So last quarter, we reported 400 basis points of margin improvement, year-over-year. We've been showing a pretty consistent, steady, you know, quarterly, year-over-year improvement in our margins, and a lot of that has to do with, you know, we have taken an appropriate amount of price, not enough, but appropriate amount of price to help offset a lot of the inflationary pressures that we've been facing across our business, whether that is in beef costs, which are up, fries, buns across the board. Our commodity basket, you know, is up and continues to be elevated. We've also paid our people more and stepped up in, you know, some key investments with our team members. But the things that are helping us kind of regain, you know, that margin against these pressures is. Look, overall, we're seeing some of the best staffing environments that we've had, even since pre-COVID. Our retention and hiring trends are back on track, and we're really excited by what that incremental throughput is doing to our restaurants. And then also, you know, we've outlined a number of strategic initiatives that we've put into place, from, you know, partnering closer with operations and finance and helping our operators better understand key goals around waste, and around staffing. And, you know, all of that together has provided a really great sauce for continued margin outperformance. And then kind of the last part on that side has been just really recapturing a lot of sales through our own channels. One of the things that happened to Shake Shack, you know, with the onset of COVID is, you know, a lot of sales pivoted to third-party delivery channels, and that had been a margin headwind for the company. And, you know, over the past couple of years, we've done a lot to shore up the profitability through third-party delivery, but it's still, you know, our channels are our most profitable channels. And so, you know, really throughout the past couple of quarters, we had a lot of strategy, strategies in place, whether that is giving the best price in our own channels, retrofitting of our Shacks with kiosks. We've had a great mix of business back into our own channels away from third-party, and that's been a great benefit as well. Mm-hmm. And Brian, I think we're just, we're as committed to continued margin expansion. We obviously are still below our pre-COVID highs, but the march up has been consistent, steady, and proven, and I think we can continue to do that as we look ahead. And improving our margin in the restaurants, lowering our cost to build of our restaurants, continuing to return to a stronger return on capital profile, and it's strong today, but it obviously is off of its highs pre-COVID. And, you know, we're continuing to commit to that as we look ahead in the future. ... That's great. That's great. On labor specifically, I was hoping to drill down a little bit more on that if we could. I think on recent calls, you've said you've saved more than 50 hours a store. Mm-hmm. and I guess I try to think about it in two buckets, sort of natural efficiencies that are kind of associated with taking pricing- Mm-hmm. and some kiosk utilization, and then maybe another bucket of things you've actually changed to drive the results. Yeah. Can you focus more on the latter there and maybe just provide a little bit more detail on that? Sure. So kiosk is actually a strategy that we have put into place as a way to take labor down, across our Shacks. It not only do we get all the benefits from a, at least a high single-digit check lift, our guests really like that channel. It's a way for them to kinda digest the menu in a very visual way. But, you know, you eliminate a point of labor in that as well. And so, you know, as we're evolving and continuing to move forward, and as, you know, our channels are kind of shifting and kind of settling out post-COVID, we've done a lot of work around identifying more of a bespoke labor model for Shacks that better takes into account kiosk usage, digital usage, menu mix, et cetera. At the end of the day, you know, that is the work that's in place and what we talked about last quarter on earnings. It's also just, you know, retaining your team members. That just really does pay dividends over the long run with how efficient you're able to operate your restaurants. It's very disruptive when you're constantly having to hire teams and retrain them, and, you know, it weighs on managers as well. So, you know, kind of both of these things together are providing a great, you know, momentum for us as we look into next year. All right. That's great. That's great. On the food cost side, you obviously leveraged that line quite a bit in 2023, pricing exceeding inflation. But, you know, talk about, was there, were there also cost savings that you realized this year in 2023? And on your last call, you alluded to some expected- Yeah ... supply chain savings. Maybe elaborate on that a little bit into 2024, if you could. Yeah. So our supply chain team has been deep in the weeds, looking at a lot of strategic opportunities. We talked about packaging and how we've reduced packaging for our to-go orders. There's been some things, you know, that we've done that have aligned either, you know, more suppliers or different freight strategies, but that work is really still ongoing and building. And, you know, we'll update you with more as we move forward. But, you know, that team is incredibly busy right now, looking at all these opportunities to help offset, you know, what we're talking about as continued inflationary pressures. You got to look at the just maturity cycle of the company. You said it earlier. I mean, I don't know how many of our competitors have only a few hundred restaurants in this country. Like, we're just the maturing and professionalizing of the supply chain with scale- Mm-hmm ... is something we've said for many years is a great unlock and opportunity for this company as we go. Just we have opened about half of our restaurants since COVID began. So when you just think about the simple distribution opportunities, the maturing of our team's ability to better forecast, better ship, get things places sooner, helps, in addition to anything that we might see, hopefully, with any disinflation. Now, we obviously have categories that are continuing to inflate and likely will in next year, but hopefully, there will be some that start to measure down. But in addition to that, what can we do against that? We're continuing to look at secondary and tertiary suppliers. We're continuing to look at clustering our development around places we're already in. Perfect example, Pacific Northwest. We got three Shacks in Seattle and one in Oregon before this year. Well, we've opened four new Shacks there in that area. When you effectively double the size of a region from a supply chain perspective, everything gets better. And, you know, look ahead to when we can double that again and have another 8 restaurants in that region. We're gonna keep doing that in lots of regions and do a lot less of the new market expansion. That is great for Shake Shack and good for our brand, but also a little more costly in terms of its ability to scale. So when we look at supply chain, there's a massive body of work, as Katie said, with all of our teams, to continue to professionalize, improve, and do things, get even better products. You know, and this is without... We're not going to cheapen the brand. We're not gonna change our premium offering. We're gonna continue to get higher quality and hopefully scale those costs, more and more over time. Yeah, and I guess any early thoughts on commodity inflation into 2024? I know beef has been an uncertainty for a long time. Mm. We don't have enough cattle. But you know, it seems like the near-term supply situation might be a little less dire. Live cattle futures have come down. And then on the fry side, fry costs have been crazy. Potato inflation's been off the charts. But any relief... It seems like I did see one potato indicator came down recently. I'd love to see that. Um, so- We have not seen a whole lot of potatoes coming down. So, yeah. Go buy a bag of chips, right? Has anyone bought a bag of Lay's chips or what? Sorry, Lay's. I didn't mean to call out a name. But it's maybe a third of the size and at least twice the cost as it was three years ago, right? The potato market is crazy, but I'll let you answer the rest. Yeah, I mean, we haven't given any guidance for next year other than to say and call out a lot of the things that you just discussed, continued uncertainty around beef and beef prices into next year. But I will say, and this kind of alludes, you know, supports what Randy is saying here, you know, when you look at commodity prices and input prices, you know, on your screen, you know that there could be a lag, especially when there's labor, when we talk about a labor cycle, labor inflationary pressures that our suppliers are dealing with as well. Just as, you know, these things haven't always matched on the upside, on the downside, you know, there could be some mismatches as well. But what the team is committed to is to identifying opportunities to help strategically offset these pressures, where we can. And, you know, as the team continues to grow and professionalize and expand their strategies, adding more vendors, suppliers, and moving around suppliers across the country, these are all helpful ways to help navigate, you know, whatever pressures we face next year. Yeah. ... I got one more note on potatoes, 'cause I'm passionate about it. Absolutely. You're passionate about potatoes. No, this is, this is an important point. 10 more minutes to talk about potatoes. I can talk about potatoes for more minute. No, you know, the most things that we buy in restaurants, we can actually do at home, right? And as the cost of grocery gets, relatively more cheaper compared to a restaurant, but you can cook a hamburger at home, you can cook a steak or whatever. You can't cook french fries. You can, but they suck, right? So like, it's actually a huge competitive advantage to sell french fries because people love fries, and you gotta go out and get 'em. And that's just like it's a small thing you don't really think about. It's a reason why people gotta go out and get pizza. You can't make good pizza at home, you know. So there are certain of our products that have a moat around them forever, that you gotta come get those things- Yeah. and there's probably a willingness to pay for fries, even though they're higher expensive. Mm-hmm. - right now. Mm-hmm. Yep. Yep. All right, so on G&A, you mentioned it briefly, but this is the first year in many that the company has leveraged G&A. And I guess just what's changed, in what areas have you sort of reprioritized- Mm-hmm. - certain projects, versus just sort of resource realignment in certain functions? Sure. So, you know, where our focus has been, you know, around showing leverage on G&A, it's also, you know, as we look to our balance sheet as well. I think that there's a measured growth investment, you know, equation that we're all kind of running, at this point, where, you know, we're building the right number of restaurants, we are investing the right amount in G&A, at the same time allowing us to pursue our strategic priorities. We've, you know, levered where you look at, you know, where we've seen the greatest amount of leverage within G&A, it's really a lot of the home office activities, that, you know, not activities, the home office, you know, have happenings, whether it's, you know, within finance and controllership. As we're getting denser within markets, that means that we don't have to add so much overhead on the Shack side and operations. Really leveraging a lot of the key investments that the company has built over the past couple of years around digital. But at the same time, allowing us to unlock incrementally more and more to sales-driving initiatives around advertising. And you're gonna see us continue to focus on that front. Yeah, there's a look, we got a lot of discipline around G&A, as we've talked about, around margins and cost to build. I think that is another big part of our discipline. You'll continue to see this, try to continue to scale our investments. A lot of the last few years, we spent a lot of money, as Katie said, bulking up our teams for growth and on our digital investments, needing to really get that digital infrastructure in place. As we look at what the next spend will be focused on, obviously, we've our team, and we've got all that, that's, that continues to run and we need to invest in, but marketing, as I talked about. You know, where you'll see us tick up or shift investment next year, will be more towards marketing. Mm-hmm. That we're gonna continue to drive sales, as Katie said. I think, you know, the important part there, too, is that we're doing it in a measured way. So, you know, we're looking at each incremental dollar that we spend and evaluating that return potential, and pivoting to where we can get the maximum return on that side, rather than just, you know, putting a bunch out there and hoping that some spaghetti, you know, sticks against the wall. Mm-hmm. Mm-hmm. So you tie it all together, I guess, what inning would you say you're in, in terms of the margin improvement story? And, and is it fair to say that you expect some pretty meaningful improvement in 2024? Well, let's not give guidance, even based on innings. It's a very smart way of trying to get to the question, so I can't tell you what inning we're in, but the game ain't over. We've been playing the game for a long time, and we believe we can continue to expand our margins. I mean, we've done it in the past, we know we can do it in the future, and we're gonna continue to grow. It's a great opportunity for this brand, and I believe as we scale, we are gonna get smarter at running our restaurants, continue to bring in talent to help us do that, and improve those over time. All right, great. Well, we've got a few more minutes here, and we've talked about margins, but maybe we can finish with the denominator of returns, which is development costs. And, you know, Shake Shack's costs have historically been higher than... you know, typical fast casual brands that we see out there. And some of it could certainly be explained by the differentiated look and feel of the box, building a lot of flagship units, et cetera, et cetera. But I guess, as you think of the opportunity to standardize certain elements, reduce square footage, where do you think you could take the development costs over the next few years? Well, that's the work that we've been doing. We've been committed to... We think this year, 2023, is probably the high water mark. But let's, let's break down why we're there. A few reasons. Obviously, we've had massive inflation in construction costs, costs of our, our buildings, and delays, delays that have been caused... And we're still, you ask any developer, especially in commercial real estate, you know, it, it's a continually delayed business right now. We're getting better. This year has been much smoother than last year. Last year, at this time, we were opening more than 20 restaurants in the fourth quarter. Mm-hmm. This quarter has been much smoother, and that's helped everything about it. But as we look ahead, here's our commitment: We believe we can bring down our cost to build next year by at least 10%. Same with our pre-opening costs. That's our commitment. We've guided that. We will hit that. And that's gonna be done in a number of ways. First of all, it's format mix. Our drive-throughs are expensive, right? We think we can take a lot of cost out of our drive-throughs now. They're still going to be more expensive than a core Shack in a traditional shopping center type of environment, but we should continue to invest in that. We will do less of those as a percentage of the company of the 40 next year, but we're still gonna have a significant investment. That drives the overall cost. But our core Shack cost, we're also gonna bring that down. We're doing that through a better, you know, stronger environment. We believe the contract environment is improving. That should help on costs. We think we can take the size of some of our restaurants down. We're still gonna be Shake Shack. We're not gonna just all of a sudden eliminate the experience that is a differentiator for us. So, but we think we can have some less seats in certain Shacks when it makes sense. Some economy of scale on some of the costs and the inputs of the way we build restaurants, switching some building materials, and still making Shake Shack feel and be the premium experience. So we're going at it in a lot of ways. And by the way, we're just improving. Like, again, think about how many restaurants we have. We are learning quickly, teams are getting better, strengthening the talent on our teams to do these jobs, and working across the industry for us to just continue to improve that. So we're committed to that. I think it's an exciting part of the story moving forward. We think we can continue over the years to make commitments to bring overall build costs down. Are there opportunities to deploy new equipment or tech in the back of house to improve store-level execution? We're seeing a lot of dual-sided grills or even new equipment layouts that might be more efficient, reduce the length of the line, et cetera. Absolutely. For we're starting with layout. There will be some equipment. You know, I never say never about anything, but I haven't met a dual-sided grill that makes a Shack Burger yet, and as good as we are. And I think the ones that do are generally not as good a product as ours. So, so we're gonna continue. That's an example of a commitment to something that makes us who we are, and we believe we will continue to look at all kinds of different equipment that can improve our speed, improve our consistency, but still make a delicious product. We separate ourselves because of the product that we make, and we're not gonna stop doing that. But when we think about flow, tightening up our kitchen designs, buying better, we can, we can buy equipment better, in better packages, in more. As we can commit to this next 40 restaurants next year, we can commit to that buy, and we can do better on our kitchen equipment. Kitchen equipment is obviously something that's gone skyrocketing up over this last few years. Mm-hmm. We see that leveling, and hopefully, that can come down a little bit as we get better with our kitchen designs. If you look at next year, and what we've said on our last earnings call and our commitment, our number one focus for next year is a consistent guest experience. That means looking at our throughput, looking at the speed and time, making sure that the guest experience at Shake Shack is more consistent than it has been in the past. That's where our work is gonna go towards new Shack design, and as we look at improving the way that we run our restaurants throughout our current fleet of Shacks. That's a huge, that's a huge commitment for us, and it's where a lot of our operational work is happening all this year. You've seen the gains on that this year and into next year. We just wanna build on that foundation. All right. Any questions in the audience? All right, well, I've got one more, I guess. Yep, we do. Oh! Yeah. Go ahead. Can you just talk about the long-term traffic trends? There's obviously a lot between the older stores that are in urban, and newer stores that are out there. Really positive on traffic. Give a little more color on that. Yeah, the question was on long-term traffic trends, just for the- Yeah ... webcast, and urban versus suburban. So go ahead, Katie. Yeah, so, you know, our traffic trends this year have been largely driven by, we've kind of been talking about these themes, but, overall mobility and to retail areas, and, you know, return to work, all of the return to kind of normal post-COVID behavior. We've also had some headwinds, though, that we've called out, particularly around infill and around the west, in California, L.A. specifically. So overall, you know, we've been really happy with our, our traffic momentum that we've had. In, you know, various points in time, things like seasonality might play a greater role than kind of a more return to normal type environment. But, you know, adjusting for the impact that we've had from cannibalization in those markets, you know, we feel like we're, our traffic trends are pretty on par with industry averages. And if you look at traffic going forward, as we think about it, we think about LTOs. Right now, we're flipping, comping against a really strong LTO in the fourth quarter of last year. We'll comp against another tough one in Q1, but we feel like we have a good LTO program against that. This is a lot. It take us all the way back to the beginning of this chat. A lot of where we wanna put our marketing dollars is to driving that traffic and continue to drive strong traffic trends, as we go. And again, we've got, you know, growing number of restaurants here to continue to support that marketing spend. All right. Well, unfortunately, we're out of time, but we'll continue in the-