Good morning. Welcome to The Wendy's Company Earnings Results Conference Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press star followed by the number two. Thank you. Kelsey Freed; Director of Investor Relations, you may begin your conference. Thank you, and good morning, everyone. Today's Conference Call and Webcast includes a PowerPoint presentation, which is available on our investor relations website, irwendys.com. Before we begin, please take note of the Safe Harbor statement that appears at the end of our earnings release. This disclosure reminds investors that certain information we may discuss today is forward-looking. Various factors could affect our results and cause those results to differ materially from the projections set forth in our forward-looking statements. Also, some of today's comments will reference non-GAAP financial measures. Investors should refer to our reconciliations of non-GAAP financial measures to the most directly comparable GAAP measure at the end of this presentation or in our earnings release. On our conference call today, our President and Chief Executive Officer; Todd Penegor, will give a business update and highlight progress against our Good Done Right initiatives. Our Chief Financial Officer; Gunther Plosch, will provide a franchise health update, review our 2023 first quarter results, and share our reaffirmed outlook. We will open up the line for questions. With that, I will hand things over to Todd. Thanks, Kelsey, and good morning, everyone. I am proud of the Wendy's system for building on the momentum we created in 2022 to deliver an outstanding start to the year. Our high-quality food, strong marketing programs, and focus on great restaurant experiences continue to resonate with our customers and resulted in our sixth consecutive quarter of double-digit global same-restaurant sales growth on a two-year basis. During the first quarter, we drove a significant acceleration in our global digital business, reaching over 12% digital sales mix. This growth was supported by our very successful March Madness messaging in the U.S. and continued growth across many of our international markets. Our top-line growth contributed to an over 250 basis point year-over-year expansion in the U.S. company-operated restaurant margin, which is remarkable as commodity inflation remained highly elevated throughout the first quarter. We also opened 39 new restaurants across the globe, and we remain on track to achieve our development goal for the year. Our long-term development confidence continues to be bolstered by new and existing franchisee interest in our suite of development programs. We remain fully committed to driving the restaurant economic model through our three long-term growth pillars, driving sales momentum, accelerating our digital business, and expanding our global footprint. This commitment and our successful start to the year give us confidence that we will deliver meaningful global growth for the remainder of 2023 and beyond. We delivered against our strong global same-restaurant sales expectations in the first quarter, achieving 8% growth on a one-year basis and 10.4% growth on a two-year basis. Our international business achieved another outstanding quarter with same-restaurant sales growth of 13.9% and an eighth consecutive quarter of double-digit same-restaurant sales growth on a two-year basis. We continue to see strong results across all of our regions, with Canada, our largest international market, delivering double-digit same-restaurant sales and customer count increases. Our Canadian breakfast business accelerated versus the prior quarter, supported by the launch of French toast sticks and our croissant promotion. Our growth at the breakfast day part, along with continued rest of day strength, led to another quarter of gaining dollar and traffic share in the Canadian market faster than all QSR burger competitors. Our U.S. business delivered same-restaurant sales growth of 7.2%, holding our strong dollar and traffic share within the QSR burger category and widening our share gap to several competitors. These results were underpinned by the continued benefit of our strategic pricing actions alongside year-over-year customer count growth each month of the quarter. Our Q1 marketing programs mix compelling value offerings like our successful two for $6 promotion with messaging behind our iconic fresh beef and hot and crispy French fries. We leveraged March Madness to reach millions of fans as the official hamburger of the NCAA, driving our premium hamburger business to its highest point in the last several years. On the breakfast front, we continued to lean into the strength of French toast sticks and closed the quarter with the start of our croissant promotion, entering Q2 with an uptick in momentum. As our strong programs drive more customers to our restaurants, we are committed to delivering an experience that brings them back more often. Our first quarter customer satisfaction scores and speed of service improved markedly versus the prior year and prior quarter as restaurants were better staffed, turnover improved, and our systems focus on operational excellence sharpened even further. As we turn to the second quarter, we will promote products across a variety of price points and occasions with dedicated messaging behind our ownable Biggie Bag platform, the return of the fan favorite Strawberry Frosty, and bringing the heat like only Wendy's can with the addition of the Ghost Pepper Ranch Chicken Sandwich to our Made to Crave lineup. We also have plans in place to accelerate our momentum at the bookends of the day, breakfast and late night. We have plans for increased activity to drive the breakfast business in the U.S. and Canada for the remainder of the year, and we'll lean into our playbook of building awareness around our craveable products, launching exciting menu innovation, and promoting targeted trial driving offers. After diligent preparations to ensure our customers will have a great experience, we plan to promote Wendy's late night business this summer. During the first quarter, we already saw an uptick in sales at the day part, driven by a return to more normalized late night hours, local advertising, and our growing late night delivery business. We are excited to offer our customers the high quality late night experience they deserve and believe there's a ton of opportunity ahead of us during this day part. We continue to expect that executing against our strong and balanced marketing calendar, leaning into under-penetrated day parts and continued operational improvements will ladder up to mid-single-digit global same-restaurant sales growth in 2023. Our global digital business continued to accelerate to new heights this quarter as digital sales grew over 25% year-over-year and reached over 12% sales mix. The international side, our customers are increasingly embracing our many digital options, leading to an all-time high digital sales mix of nearly 19%. The U.S., our digital business accelerated every month throughout the quarter as we achieved our highest ever U.S. digital sales mix of over 11%. This growth was driven by continued gains in delivery and mobile order sales as we offered compelling value alongside our third-party delivery partners and once again successfully advertised our digital options across the March Madness tournament. This programming drove a 5% increase in our total loyalty members and a nearly 10% increase in monthly active users versus the prior quarter. As we drive more fans into our restaurants through digital ordering, we are also delivering on a seamless operational experience that keeps customers coming back. During the first quarter, our digital customer satisfaction scores significantly increased versus prior year and our delivery wait time and order accuracy sequentially improved. As we look ahead, we are excited to have the infrastructure in place and momentum behind us to shift into a new phase of meaningful digital growth. We made significant strides in our one-to-one marketing programs last quarter, enabling more personalized user experiences to influence key behaviors. This allows our team to quickly check and adjust against a set of established benchmarks, all in service of driving increased frequency. Lastly, I'm excited to share that we have partnered with Google to pilot Wendy's Fresh AI, a voice AI solution for drive-thru ordering that utilizes Google Cloud's generative AI and large language models technology. We believe this solution creates a huge opportunity for us to deliver a truly differentiated, faster, and frictionless experience for our customers and allows our crew members to continue focusing on making great food and providing exceptional service. We plan to launch this pilot in June and are incredibly excited about the potential unlocks to speed of service, customer satisfaction, and profitability that this technology could drive over time. You can expect us to continue pushing into new and promising technology alongside our partners as we look to maximize the restaurant economic model and grow our digital sales to approximately $1.5 billion this year. We are pleased to have opened 39 new restaurants in the first quarter and remain on track to reach our global development goal for the year. We are well underway on our development journey with approximately 45% of our 2023 pipeline open or under construction through the end of Q1. In the U.K., we closed the quarter with 29 restaurants, including our first drive-thru format in the market, which is performing ahead of expectations so far. We look forward to building on that success with our second drive-thru restaurant planned to open in the second quarter. We are seeing increased excitement around our suite of development programs from both new and existing franchisees. We expect an increased appetite for growth across our system throughout 2023 and beyond as we continue to market these programs, sales momentum continues, and inflationary pressures begin to subside. We continue to believe we have the plans in place to support our goal of 2%-3% global net unit growth in 2023. We expect all of our net unit growth will be delivered in the second half of the year, primarily driven by longer restaurant development timelines as the construction and permitting environment remains challenging, in addition to the planned permanent closure of our U.S. REEF restaurants in the second quarter. We also remain on track to achieve our longer-term global net unit growth targets of 2%-3% and 3%-4% in 2024 and 2025 respectively. We are excited about all of the growth that's ahead of us and the opportunities to delight even more customers around the globe. Before turning it over to GP to cover our financial results, I wanted to share an update on our progress against our food, people, and footprint goals within our Good Done Right framework. I am proud of the work our team has done over the last year to advance these goals and continue building ESG into the foundation of our business. Within our food pillar, we developed responsible sourcing criteria and began to collect sustainability information from our supply partners in addition to expanding our animal welfare standards program. Within our people pillar, we advanced our key diversity, equity, and inclusion focus areas and launched the Own Your Opportunity campaign to increase both accessibility and diversity across franchisee candidates. Finally, within our footprint pillar, we transitioned more than 50% of our customer-facing packaging to be sustainably sourced and received validation of our science-based target nearly a year ahead of schedule. This is just a sample of all the progress we've made over the past year, and I encourage you to read our recently released 2022 Corporate Responsibility Report on our investor relations website for more information. Our strategic growth pillars remain deeply rooted in the foundation of the restaurant economic model and our Good Done Right framework. Looking ahead, we remain focused on delivering accelerated global growth behind the most impactful drivers of our business, driving same-restaurant sales momentum, accelerating our digital business, and expanding our global footprint. Everything we do at Wendy's is focused on bringing to life our vision to become the world's most thriving and beloved restaurant brand. With the momentum that we have in our business, we are well on our way. I will now hand things over to GP. Thanks, Todd. I wanted to take this time to share an update on franchise health as we recently collected 2022 financials from our U.S. and Canadian franchisees. As a reminder, our focus on driving the restaurant economic model led to record franchisee sales and profits in 2020 and 2021 in both the U.S. and Canada. Turning to 2022, our U.S. and Canadian franchisees achieved another year of record sales with 7% and 13% year-over-year growth, respectively. This contributed to incredible three-year sales growth of over 18% in the U.S. and over 24% in Canada. Despite unprecedented inflationary headwinds in 2022, which pressured year-over-year comparisons, franchisee EBITDA dollars remained approximately 2% and 11% higher versus 2019 in the U.S. and Canada, respectively. Just as we expect EBITDA expansion in our company-operated restaurants, we expect franchisees will return to EBITDA dollar growth in 2023 as inflation eases and we continue to drive same-restaurant sales momentum and digital acceleration, all supporting our global footprint expansion. Let's turn to our first quarter financial results, which showcase the improved profitability we expect this year. We are incredibly proud of our first quarter results, which highlight the strength of our growth initiatives and the sound execution of our financial formula. Our global system-wide sales grew 10%, contributing to year-over-year growth across our financials. Our U.S. company restaurant margin reached 14.7%, increasing over 250 basis points year-over-year, despite inflationary pressures remaining elevated. This expansion was primarily due to a benefit of a higher average check, driven by cumulative pricing of 9.5%, partially offset by commodity and labor inflation of approximately 7% and 5%, respectively, and customer count declines. G&A held flat versus the prior year, primarily due to a decrease in stock compensation offset by higher information technology costs and a higher incentive compensation accrual. Adjusted EBITDA increased almost 18% to approximately $126 million, primarily driven by higher franchise royalty revenue and the increase in U.S. company-operated restaurant margin. The over 20% increase in adjusted earnings per share was driven by an increase in adjusted EBITDA and higher interest income. These increases were partially offset by higher interest expense, a decrease in investment income, and higher amortization of cloud computing arrangement costs. Finally, our free cash flow in the first quarter increased over 40% to approximately $63 million, resulting primarily from a decrease in payments for incentive compensation and higher net income adjusted for non-cash expenses. These increases were partially offset by the timing of receipt of franchisee rental payments in the first quarter of 2022. Our 2023 and long-term financial outlook remain unchanged. We continue to expect significant global system-wide sales growth of 6%-8% this year, driven by mid-single digit global same-restaurant sales and global net unit growth of 2%-3%. Our 2023 adjusted EBITDA outlook of $530 million-$540 million remains unchanged as we continue to expect strong top line sales, U.S. company-operated restaurant margin of approximately 15%-16% and mid-single digit commodity and labor inflation. We continue to expect net franchise fees of less than $20 million and net rental income of approximately $105 million for the full year. We are also reaffirming our 2023 outlook for adjusted EPS of $0.95-$1.00, capital expenditures of $75 million-$85 million, and free cash flow of $265 million-$275 million. Looking further out, we are reaffirming our long-term outlook of mid-single digit annual system-wide sales growth and high single digit to low double-digit annual free cash flow growth in 2024 and 2025. Our reaffirmed financial outlook over the short and long term is a result of the momentum of our business and our dedication to driving the restaurant economic model behind our strategic growth pillars. To close, I'd like to highlight our capital allocation policy, which remains unchanged. Investing in our business for growth while holding true to our asset-light model continues to be our first priority. Secondly, we announced today the declaration of our second quarter dividend of $0.25 per share, which aligns with our commitment to sustain an attractive dividend. We continue to expect a full year dividend of $1 per share in 2023, which represents an over 100% dividend payout ratio. Lastly, we will utilize excess cash to repurchase shares and reduce debt. As of May third, we have repurchased approximately 2.9 million shares and have approximately $438 million left On our $500 million share repurchase authorization expiring in February of 2027. Additionally, we repurchased approximately $32 million of our debentures through May 3rd, leaving approximately $43 million remaining on our debt repurchase authorization expiring in February of 2024. Our elevated cash balance and strong and flexible balance sheet leave us well positioned to withstand any macroeconomic headwinds as we continue to deliver meaningful global growth. We are fully committed to continue delivering our simple yet powerful formula. We are an accelerated, efficient growth company that is investing in our growth pillars and driving strong system-wide sales growth on the backdrop of positive same-restaurant sales and expanding our global footprint. This is translating into significant free cash flows, which supports meaningful return of cash to shareholders through an attractive dividend and share repurchases. With that, I will hand things over to Kelsey to share our upcoming IR calendar. Thanks, GP. To start things off, we have an NDR in Boston with Guggenheim on May 23, followed by an NDR in New York with J.P. Morgan on May 24. On June 13, we will attend the virtual Oppenheimer Conference, followed by the virtual Evercore Conference on June 14. We will also host investor calls on June 20 and 21 with RBC and BTIG respectively. If you are interested in joining us at any of these events, please contact the respective sell side analyst or equity sales contact at the host firm. Lastly, we plan to report our Second Quarter Earnings and host a conference call that same day on August 9. As we transition into our Q&A section, I wanted to remind everyone that due to the high number of covering analysts, we will be limiting everyone to one question only. With that, we are ready to take your questions. Thank you. If you would like to ask a question, please press star followed by one on your telephone keypad. If you would like to withdraw your question, please press star followed by two. When preparing to ask your question, please ensure your device is unmuted locally. First question today comes from David Palmer with Evercore ISI. Your line is open. Thank you. You talked about a lot on that in your prepared remarks. I'm just wondering if you could sort of rank where your energies are gonna be applied in terms of driving sales and traffic, call it market share, you know, between the marketing, the innovation and potentially renovation, and then you mentioned some digital initiatives. You know, where do you think the biggest energy is gonna be applied, and what do you think is gonna give you the best bang for your buck? Thanks. Yeah, David, thanks for the question. I think it's balanced across several things. I think, you know, the opportunity to continue to raise our game on operational excellence. You know, we're staffed better today. We've got opportunities to continue to drive some more business into our late night as we talked about in the prepared remarks. We know we have opportunity to continue to grow on the breakfast daypart. We've got some nice news coming the rest of this year. We feel really good around the balance of our calendar for the remainder of the year. Some great new innovation coming throughout the year. A commitment to value with four for $4 and five and six dollar Biggie Bags. I do think we got a nice balanced calendar that will continue to drive our business, and we'll continue to lean in on digital. You know, our digital mix continued to grow each period within in Q1. We feel like we got some momentum. You know, the tools are coming to life to better connect to the consumers to create even better experiences. Hard to rank them because I think they all need to come together to continue to drive great experiences for the crew and our customers. But that'll allow us to continue to drive mid-single digit growth, you know, quarter-over-quarter-over-quarter throughout the rest of this year, and we've got a lot of confidence in that visibility. Our next question comes from Brian Harbour with Morgan Stanley. Your line is open. Yes. Thank you. Good morning. I just wanted to ask about development. Could you comment on, were the closures in 1Q more REEF related, and how many more of those do we kind of expect? I guess I'm just trying to think about kind of the pace of development through the year as you get to the 2% to 3% target for the full year. Yeah. On, on REEF specific, we only had 2 REEF closures in the 1st quarter. We had, you know, several U.S. restaurants temporary closed. In the 2nd quarter, you'll see 15 U.S. REEF closures, you know, in that number. You know, the way the calendar's lined up for this year, you know, we're on track with our internal expectations. You know, the 39 new restaurants, you look at our historical averages in the 1st quarter. You know, we've typically, other than maybe the 1st quarter of last year, always opened 30 to 40 restaurants. It is back-end loaded on the openings. It is front-end loaded on the closures. We got good line of sight with 45% of those restaurants now open or under construction. As we get to the end of the second quarter, you know, we're gonna have to have the vast preponderance of those open or under construction. We'll be able to report back to you on that. We got visibility to, you know, the work that's underway and the plans to deliver our 2%-3% net unit growth this year. We're feeling good about that. We now turn to Brian Bittner with Oppenheimer. Your line is open. Thanks. Good morning. I'm actually really interested in the comments that you made in the prepared remarks on a much heavier focus on driving the late night business as the year unfolds. Can you just talk about the drivers that made you come to the conclusion that this is the right targeted strategy? If successful, could you frame up what type of impact late night could have on sales. Maybe you can, you know, frame the upside or help us understand what the size of the business is today and where you think it could go. Thank you. Yeah. What gives us confidence, we've leaned in on late night for a while in the company restaurants, and we've seen some great success. We know when we look at the rest of the system relative to where we are in the company restaurants, there is an opportunity. Some of that comes with hours of operation. Some of that's a result of, you know, not having the staffing we need. Now that we've got ourselves staffed appropriately, as we look at where that late night business is, not only what we can do through the drive-thru with traditional drive up customers, but what we know we can continue to do with the momentum that we have on the delivery business. You know, our delivery business continued to grow period, month-over-month-over-month in the first quarter. Those all give us a lot of confidence that we're in a position to really drive, you know, significant growth in that day part. You know, the size of the prize, hard to quantify, but when I start to look at where we have some big growth drivers, you know, late night is gonna be one of those, and breakfast will continue to be one. We'll continue to work hard to continue to win like we have been at lunch and dinner, and you've seen some nice growth in those day parts too for us. Our next question comes from Dennis Geiger with UBS. Your line is open. Great. Thank you. Another one on development, if I could, and the commentary on franchisee profitability is certainly helpful. Just wondering on the development side of things, specific to franchisee demand in the current environment. Just if you could size up a bit more those macro headwinds offset by some of the specific drivers you mentioned in particularly as it relates to feedback on the development incentive programs. You know, Todd, if there's anything more that you could share on what kind of franchisee feedback you're getting there. Thank you. Yeah. On the development incentive program, still early. A lot of education going on on, you know, Groundbreaker 3.0, what we have on Pacesetter, you know, the continued, you know, opportunity to take advantage of our Build-to-Suit program. We'll have a lot more visibility into that in Q2. Clearly, incentives are attractive, and they help the restaurant economic model. You know, with the momentum that we continue to see with improvement quarter-over-quarter in our restaurant margins, that certainly helps create some excitement into the future. We've got, you know, our Global Next Gen 2.0 design, you know, and that's digital-forward restaurant, cost down about 10%. When you factor all of those versus the prior model, when you factor all of those together, and you think about where we can see the strength of the consumer on the other side of all the inflationary pressure they're facing with a lot of nominal wage growth, I think you're gonna start to see a lot of our franchisees want to continue to lean in to take advantage of those opportunities. That Next Gen design restaurant with the digital forward view, all the things that we're working on when it comes to voice AI and digital menu boards and other technological advancements into that restaurant, those can continue to better connect to the consumer, help our employees, and drive the restaurant economic model. Our next question comes from Joshua Long with Stephens. Your line is open. Great. Thank you for taking my question. Was curious if you could walk through the pricing mix traffic components of the quarter? Sound like during the prepared comments, you talked about traffic being down a little bit, but was just hopefully hoping we could get a, additional context there. Within that same vein, how are you thinking about, you know, pricing on your side of the business as we think forward to the year with inflation moderating, labor pressures still there, but, you know, consumer overall being relatively strong per your prepared comments? Good morning, Josh. As you've heard in the prepared remark, U.S. SOS was up 7.2%. Pricing was about 7% for the system, a little bit below food away from home inflation. We are caught a little bit in roundings. If you actually look at the exact numbers, what you will find is traffic was up a little bit less than 1%. Mix was slightly negative, and pricing was a little bit below 7%. When you add it all up, it reconciles the 7.2% we have reported. It's important to note that the traffic growth was really happening in every single month. Remember, January was the easiest comparison with Omicron and really bad weather. We grew traffic there. That was kind of expected, but we also grew traffic in February and in March. As far as the company is concerned, we obviously leaned in in pricing a little bit more with 9.5% in the first quarter. We kind of caught up on our pricing position versus franchisees. If you look at the year, total pricing for the year is about 7%. It's a little bit higher than what we talked about last quarter. Last quarter, we talked about 6%. The difference is we are accelerating pricing a little bit to put us even in even better position. Remember, pricing, the carryover is about 5%, so the new pricing action is not a lot. Again, I think the proof is in the pudding here. We have not seen major resistance from customers on the pricing actions we have taken as evidenced by the traffic growth that we have seen in the first quarter and maintaining and holding our dollar and traffic share in the category. Turn to Lauren Silberman with Credit Suisse. Your line is open. Thank you for the question. I just wanted to ask if you can expand on what you're seeing with consumer behavior, signs of check management. I think you mentioned mix was negative. If you can just talk about what you're seeing across different consumer cohorts at under $75,000 and over $75,000 consumer. Thank you very much. Good morning, Lauren. yeah, as I said, the consumer is reacting well to our programs. That's why we have high single-digit growth in the quarter. From a customer satisfaction point of view, value perception, we have not gone backwards. In contrary, actually, our scores have improved quarter-over-quarter, and year-over-year. From an income level point of view, the below and above $75,000 income cohort, we maintain share in the category on both income cohorts. What's interesting on the income cohorts, if you think about the under $75,000 consumer, you know, we've maintained our share, but traffic is relatively flattish there. The good news is we're seeing nice growth with the over $75,000 cohort and, you know, we continue to hold nicely share there, so participating in that growth. Our next question comes from Andrew Charles with TD Cowen. Your line is open. Great. Thanks. GP, can you comment on your beef inflation expectation for 2023 versus what you laid out in the last call? Todd, what I guess I'm looking to better understand is how this impacts your promotional strategy, particularly for the Biggie Bag, to help mitigate potential cost volatility as potential inflation might weigh on value efforts. Thanks. Good morning, Andrew. Our commodity outlook is unchanged versus the previous position we have taken, so it's mid-single digits. Within the commodity basket, we saw a little bit of movement. Beef got a little bit more expensive for us, still slightly deflationary versus prior year. That was offset by favorability in other food categories. I would also point out that beef is about 15%-20% of our commodity basket. We have now price visibility up and inclusive the first 8 weeks of the third quarter, so there's not a lot open. Could there be a little bit more headwinds? Maybe. We do expect that there's offsets elsewhere and very confident with the mid-single digit commodity inflation guidance we have reaffirmed. As far as the promotional calendar, we don't think that impacts our plans at all. We've got good visibility into what we've aligned to with the system around where we wanna continue to support the $5 and $6 Biggie Bag, and we'll continue to lean in there. We've got some really nice news on the premium hamburger side of the business. You know, in Q1 we were able to really focus a lot on our core items when you think about our hot and crispy fries, the work that we did around hamburger equity and squares the beef. We'll continue to lean in on those equity drivers and those unique points of difference with the calendar that we have, and we'll continue to play our game. Our next question comes from Jeffrey Bernstein with Barclays. Your line is open. Great. Thank you very much. Just wanted to ask about the franchise sentiment or franchisee sentiment post-COVID, but pre-potential recession. I'm just wondering what the primary topics of discussion or greatest friction points. Obviously, it's encouraging to see that the sales and profits are up versus pre-COVID levels, but, what's the primary pushback there? Maybe if you could just compare your leverage position and outlook relative to franchisees. We get a lot of questions on franchisees' liquidity and ability to borrow in this environment to support that unit growth. Thank you. Yeah, Jeff, the great news is we've got a strong working in relationship with our franchise community, both through our advertising trustees here in the U.S. and in Canada. We continue to stay linked in the hip on what we're trying to accomplish, and that focus is continuing to drive the restaurant economic model. That's the area of discussion all the time. How do we continue to enhance margin to make sure we can invest back into our people, back into technology, into reimaging and new builds? That's what we'll continue to work on together. We are making progress. You're seeing that quarter-over-quarter in a highly inflationary environment, that we're continued to break through and do that and find that right balance between 1 more visit and $1 more with a really balanced high-low calendar, sprinkling of value, some price point and promotions, as well as a lot of focus on the core, as I just mentioned. We feel like we've got a good partnership, but it is about driving that restaurant economic model. Around GP's suggested leverage ratios and our ratios versus theirs on the debt side, GP, I'll turn it over to you. As you know, the company has a leverage ratio of about 4.7 times, so below 5. The system is north of that. It's definitely increased slightly versus 2019 as debt levels have slightly increased with all the acquisitions that have happened. I would say we on a leverage ratio, the system will make rapid progress to take the leverage down. You can see this from our company restaurant outlook, right. We are forecasting mid-single digit sales growth. If you take the midpoint of our U.S. margin guidance, that's an expansion versus prior year of north of 100 basis points. You can do the math. It's double-digit profit growth, so that will go a long way to take leverage down in the system as well. We now turn to Jon Tower with Citi. Your line is open. Great. Thanks. I appreciate it. Can you give us an idea of where breakfast average weekly sales settled out in the quarter? More specifically, I think you've talked in the past about your awareness of breakfast being relatively high, for your core customers. I'm curious, what are you hearing from those customers as to why they, you know, aren't coming as frequently? What would drive them to come more frequently than they are today? Is it something on the product side? Is it speed of service? Is it price points that they're looking for? I'm just curious to kinda get some color around that. Yeah, John. On breakfast, as you did mention, our awareness continues to be quite high. I think that the consumer's looking for a couple of things from us. We gotta continue to drive speed of service, which we're doing quite nicely. We gotta continue to drive overall satisfaction and is still our highest overall satisfaction day part. I do think we got to sprinkle in a little more value. Having an opportunity to play on things like $3 croissant on a more regular basis are certainly helpful. There's a core consumer that's only going to come to breakfast in QSR if there's a product on deal. We're going to have to continue to make sure we're competitive on that front. We got to continue to make sure that we got a more complete beverage business. You look at a lot of the growth in the breakfast day part over the last several quarters, it's those with heavy beverage businesses, whether that's in QSR burger or elsewhere, we'll continue to lean in. We've got some news coming around our Frosty Cream Cold Brew, which we've talked about in the past. I think we've got those plans in place to continue to lean in. You know, on the breakfast side, you know, we're no longer giving those weekly sales numbers around that breakfast day part. As I look at the calendar for the rest of the year, where we are on value, what we're doing on Frosty Cold Brews, what we're doing on some innovation, and the pressure that we have to support our business the rest of the year, I'm feeling really confident that we're going to continue to compete well. Our next question comes from Chris O'Cull with Stifel. Your line is open. Yeah. Thanks. Good morning. Todd, could you speak a little bit more about Wendy's thinking regarding pricing later this year, and whether you think customer count growth is going to be needed to achieve positive comp growth later this year? Then when does the system start to roll off some of the larger price increases? Good morning, Chris. As we said, right, we don't need a lot of pricing to get into attractive margin structure. We have not yet taken new pricing this year. That comes a little bit later. As I said, the gap between the carryover pricing and the new pricing is about 2% on the year, so it's not a massive action. If you fast-forward, right? If you look at our long-term sales guidance for 2024 and 2025, we are basically saying, yeah, it's a low single-digit SOS growth. We do think the pricing levels will come down as a result of it. We are expecting flattish traffic in the outer years. I think it's going to be healthy with all the focus that we have on the restaurant economic model. We see no reason why our profitability in our company restaurant shouldn't expand further in the outer years, with that construct, and it drives then obviously our high single digits to low double-digit free cash flow outlook. Our next question comes from Chris Carril with RBC Capital Markets. Your line is open. Hi. Good morning. Can you expand maybe a bit more on the pace of the remaining reimaging? I think it's about 20% of the global system. And maybe to what extent you think that could provide a tailwind to new unit development as that reimaging program winds down. Thanks. Yeah. We exited the quarter with, you know, 80% of our system, global image activated, which is great progress. Originally, remember, our full goal was to have the system 100% reimaged by 2024. That could slip a little bit into 2025. If you take advantage of the Pacesetter incentive, you can actually get an extra year to re-work your reimaging, which is a choice we wanted, our franchisees to make to focus and lean in on new development, and continue to work hard to get all of their restaurants reimaged. I do think that, you know, that does free up capital. As we get over the hump on the reimaging, it does create opportunities for capital to be focused not just on new development, but also to invest back into, you know, those restaurant economic model driving things around technology and the people. Those things then fuel even more top spend into development as that restaurant economic model gets even stronger and stronger in the future. Our next question comes from Eric Gonzalez with KeyBanc Capital Markets. Your line is open. Great. Thanks for the question. Maybe another one on the late night opportunity. Can you talk about where we are in terms of traffic or sales versus pre-pandemic levels? I think you mentioned that you're fully staffed. I was wondering, you know, is the day part currently profitable for your franchisees? Is maybe there an opportunity to value engineer the menu or to make the day part more efficient similar to what you've done at breakfast? Thanks. Yeah. You know, it's pre-pandemic, when you look at overall traffic at late night, it is back to pre-pandemic levels. Our opportunity is to make sure that we're getting our fair share of that at the late night day part. We'll continue to lean in to take a look at, you know, what that menu construct should look like to be really efficient and effective to drive, you know, throughput and great food at that late night day part. Opportunity to come as we continue to lean in to think about what that menu should look like and how we should support that business. When you look at the profitability, you know, when you start to think about where we traditionally go and shut down the dining room after 10 and get into a late night staffing model, there is a lot of profit to be had. When you look at the labor model against the existing menu, with the sales and transactions it takes, it can be a nice contribution to the restaurant economic model. And we'll continue to look to make sure that we make it even more efficient around the menu construct. How do you make an easier close at night to provide a better opening in the morning so you can really then continue to support your breakfast business too, to make it the virtuous circle. Our next question comes from John Ivankoe with J.P. Morgan. Your line is open. Hi. Thank you. I know we've spoken before about, you know, grocery, you know, maybe being the biggest competitor to the QSR category. In general, maybe you specifically. Can you know, just in terms of total meal share, you know, can we talk about, you know, that category of being which is obviously shifting from. Pricing which is well in excess of restaurants to in the relatively near term to pricing that will be below restaurants. If you do think there's any real risk, you know, of kind of share shift into grocery or, you know, maybe other factors like employment, gas prices, you know, might, you know, lead to a slightly different outcome this time, and I guess how, you know, you would like to be best, you know, positioned, you know, to keep the share for yourself and away from potentially, back to the grocery category. Thanks. It'll be interesting to see, John. I think you go pre-pandemic, you know, food consumed at home was running that 81%-82% range. You know, during the pandemic, it got to 85%-86%. It's kinda settled in today at 85%. It's not like we've taken advantage of a lot of folks shifting back into the restaurants at this stage. There's still a lot of folks eating meals at home. You look at the convenience, you look at the overall, you know, price point still. You know, there's been a lot of inflation over the last several years in the grocery day part, you think about constructs like a $5 Biggie Bag, a $6 Biggie Bag, you know, the value we can create on a freshly prepared meal on a single or a Made to Crave item. We still have a lot of relative value against grocery, and we drive a lot of convenience. I think we're well positioned to continue to compete. As folks start to get out and think about what, you know, their, their patterns are and, you know, what their hybrid work environments are getting back to work, those things will continue to push miles driven and continue to help the restaurant business overall, whether that's breakfast or lunch. Anything else, GP? Yeah. I would also say, like, you know, net disposable income is a big, big correlator. I would expect with inflation coming down in grocery, net disposable income will come up, right? Because wage inflation is still relatively high. As the consumer is looking quarter over quarter, they should be left with a little bit more net disposable income, and it should encourage them to go to the restaurants more often and spend some more money. Hopefully with us, I think our offerings are compelling. They're really for all consumers, and that should be good for our business. We now turn to Gregory Francfort with Guggenheim. Your line is open. Hey, thanks for the question. GP, I think you made a comment about staffing being in a much better spot. Can you maybe update us on what you're seeing on turnover levels or staffing? If you're starting to see any maybe early break on entry-level wage rate at all, just as the labor market starts to free up? Thanks. Morning, Greg. Staffing levels definitely have improved. What's the metrics we are looking at? The 90-day turnover rate has definitely improved year-over-year and quarter-over-quarter. You heard in the prepared remarks we are going to advertise late night. That's an indication that we feel really good about staffing levels, even in difficult-to-staff time periods like late night. There's definitely confidence there. We have not seen really a deflationary environment in labor, if that's what you were asking. Our labor inflation in the first quarter was mid-single digits, so about 5%. Again, right, that on a stacked basis, that's a massive increase. If you might remember, in the first quarter of last year, our wage inflation was about 15%. That's the environment that we have. Obviously, we are trying to remove our reliance on labor. How do you do this? Obviously, drive retention as best as you can. From a competitive and benchmark point of view, our turnover rates are better than the industry, so that helps restaurant economic model. Obviously, the push towards digital ordering, voice AI is also helping with productivity in the restaurants. Todd, anything else? Yeah. You're seeing all the benefits of all of that, GP. I mean, you look at where our overall satisfaction is as we've been better staffed, that's improved significantly, you know, quarter-over-quarter. We're seeing it across taste. We're seeing it across accuracy. We're seeing it across our speed perception. Importantly, we're seeing our actual speed improve. We're making improvements on that front. Speed, convenience, affordability, what's our game's all about. Us differentiating on quality is a game we'll continue to play. You know, being in a much better position with labor is certainly gonna help us lean into all of that with better trained crews and better staffing across all day parts. Our next question comes from Sara Senatore with Bank of America. Your line is open. Hi, this is Katherine Griffin on for Sara. Todd, I wanted to ask a couple questions about the AI investments. Firstly, you know, why is now the right time to be making this investment? Secondly, when you spoke about the unlock, do you expect that to be more on the throughput side or on the, you know, labor cost, you know, operational side? Thank you. Yeah. I think now is the right time. You know, we've done a lot of work on our tech stack in our restaurants, you know, we've had Kevin Vasconi, who joined us several years ago now from Domino's, and his team have done a nice job really setting ourselves up to lean in even more on technology. Clearly, it starts with the Global Next Gen design that's all digital forward. You know, we've got work that we can continue to do even on the digital menu board, so that's still growth in front of us. When you look at why now, you know, it is a great partner that we have in Google Cloud. We believe in, you know, their generative AI and large language models technology. We've been testing it. We'll have it live in two restaurants as pilots here in June in the Columbus area. We really look at this as a speed and throughput opportunity for us. Slowest point in the whole drive-thru is at that order station, trying to make our lives a little bit better for our employees, and a heck of a lot better for our customers as we really get then focused on making great food and expediting it out that window super fast. That's where the opportunity really lies to elevate the experience for both employees and customers moving forward. Our next question comes from Jim Sanderson with Northcoast Research. Your line is open. Hey, thanks for the question. I just wanted to follow up on your commentary regarding late night and just wanted to make sure I understood. Are franchise stores in the U.S. operating to expected operating hours in breakfast and late night, or are there still opportunities or areas where stores cannot fully operate as expected? Just to check on capacity. Yeah, still opportunities. I mean, if you go back over the last 12 months, you know, when you think about late night hours, having your dining room open till 10, having, you know, your restaurant open till midnight or later, you know, we weren't all the way there. We've done a lot of work, as you heard in the prepared remarks, to get ourselves set up, to actually nationally advertise, now open, for late night business midnight or later. We'll have the vast preponderance of the system in a position to do that as we roll into the summer. We now turn to Jake Bartlett with Truist. Your line is open. Great, thanks for taking the question. Mine is on the value of offering. You mentioned, you know, four for $4, you mentioned Biggie Bag at $5 or $6. One, I just wanna confirm, are you keeping the four for $4? My understanding is that it was kind of going away at some point, you know, I thought soon. Then, you know, one kind of feedback that I hear from franchisees is that the view is that the, you know, value offering is actually too attractive. It kind of, you know, versus the core menu, there's too large a difference. Is that something that you think is a problem? Is that something that, you know, you're kind of looking to address? Yeah. If you think about where we are, we've been trying to move folks from four for $4 to $5 Biggie Bag to $6 Biggie Bag. We've been able to drive some nice mixed gains as we've shifted folks up and across those offerings over the course of the last several months. You know, four for $4, it really is a local decision. Is it gonna stay on the menu board? Is it off the menu board? Still be honored if you come through the restaurant, you can still manage it within the within the app. You know, the focus has been on $5 and $6 Biggie Bags with the offerings that we have there. If you look at our overall mix around value when it comes to four for $4, $5 and $6, you know, it's been relatively stable. We haven't seen a lot of trade down. We are watching that gap between value and premium. It's an age-old discussion, not just happening today, but probably same discussion we had five years ago. How do you actually sprinkle in, you know, value in between with other offers like two for $6 and things like that. We're really trying to make sure we got the right balance between value and premium. I'll tell you what, in the first quarter, with all the hamburger equity advertising, the news that we have around Made to Crave and our core, we had our best core large hamburger volumes in the last six years. We're really feeling good about that on the premium side. Our next question comes from Fred Wightman with Wolfe Research. Your line is open. Hey, guys. Thanks. There was a comment earlier that traffic was positive on a year-over-year basis each month, but I'm wondering if you could give a little bit of color. It sounded like there was some weather in January, but maybe just how that year-over-year trend looked throughout the quarter. Good morning, Fred. As I said, traffic for the quarter was a little bit less than 1%. In the month of January, a little bit north of 1%, obviously for the remaining on the quarter, a little bit below. Our final question today comes from Peter Saleh with BTIG. Your line is open. Great. Thanks for taking the question. It sounds like the industry is seeing improvements on the labor side really across the board, you guys are seeing it as well. Yet on your commentary on breakfast, you indicated the need to drive, you know, faster speed of service. I think that was one of the first comments. Just curious, are you seeing improvements in speed of service across all day parts? Is breakfast the slowest? Just trying to understand there if, you know, the improvement that you're seeing on the labor side is really helping to drive the speed of service or if there's something else you need to do there. Thanks. From a speed of service perspective, our breakfast day part is our fastest speed of service and continues to be, we got to continue to do that, you know, reliably and make sure that we're prepared for the breakfast rush, just as we are for lunch and dinner to be rush ready. That's where that comment is. It's just one of those things to continue to deliver a consistent experience. I do think the other factors around, you know, how do we continue to bring some news into our breakfast business around food? What do we do to continue to expand our beverage offerings? Those are things that'll play even more into our growth into the future, and we've got those things planned in the pipeline right now. Thanks, Peter. That was our last question of the call. Thank you, Todd and GP, and thank you everyone for participating this morning. We look forward to speaking with you again on our second quarter call in August. Have a great day. You may now disconnect.