Good morning, ladies and gentlemen, and thank you for standing by. Welcome to the Wingstop Incorporated Fiscal Third Quarter 2023 Earnings Conference Call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. Please note that this conference is being recorded today, Wednesday, 1 November 2023. On the call today are Michael Skipworth, President and Chief Executive Officer, and Alex Kaleida, Senior Vice President and Chief Financial Officer. I would now like to turn the conference over to Alex. Please go ahead. Thank you, and welcome to the fiscal third quarter 2023 earnings call, conference call for Wingstop. Our results were published earlier this morning and are available on our investor relations website at ir.wingstop.com. Our discussion today includes forward-looking statements. These statements are not guarantees of future performance and are subject to numerous risks and uncertainties that could cause our actual results to differ materially from what we currently expect. Our SEC filings describe various risks that could affect our future operating results and financial condition. We use certain non-GAAP financial measures that we believe can be useful in evaluating our performance. Presentation of such information should not be considered in isolation or as a substitute for results prepared in accordance with GAAP. Reconciliations to comparable GAAP measures are contained in our earnings release. Lastly, for the Q&A session, we ask that you please each keep the one question and a follow-up to allow as many participants as possible to ask a question. With that, I would like to turn the call over to Michael. Good morning, and thank you for joining our call. It is an exciting time at Wingstop, and I'm honored to be leading such a talented team who deliver industry-leading results year after year. Our AUVs now average $1.8 million, and we are on track for our 20th consecutive year of same-store sales growth. Wingstop continues to see double-digit transaction growth, a true sign of the underlying health and momentum of our brand. In fact, we exited the quarter with more momentum than when we started. This growth we are seeing is consistent across all vintages of restaurants, and our new restaurants are opening even stronger. We are achieving record levels of new guest acquisition across all channels. Our core guests continue to engage with us, and we are seeing an increase in our average frequency. Our team has been laser-focused on operational excellence within the four walls of the restaurant, and we are seeing that show up in our guest scores. Our supply chain strategy is working, translating into industry-leading unit economics, and we are on pace for a record year for development. We recently held our annual brand partner convention. While it was provided an opportunity to reflect on the exceptional results in our business, we and our brand partners are focused on the road ahead for Wingstop, which is even more exciting than our accomplishments to date. The visibility we have into 2024 and beyond give us confidence to deliver against our strategies of sustaining same-store sales growth, maintaining best-in-class returns, and accelerating growth. Wingstop is truly in a category of one, and our results demonstrate that year after year. In the third quarter of last year, we expanded our delivery platform to add Uber Eats nationally, and we also launched the Wingstop Chicken Sandwich, or technically 12 chicken sandwiches. These two sales growth strategies brought a lot of new guests into the brand during the second half of 2022. This momentum has clearly continued into 2023. Throughout this year, we have explained how these sales growth strategies that we are executing against are multiyear drivers, giving us confidence to increase AUVs well north of $2 million. We believe this was showcased in the third quarter as we lapped the launch of both Uber Eats and our chicken sandwich, delivering 15.3% same-store sales growth that was almost driven entirely by transactions. To further the point, we acquired more new guests this past quarter than we did during our incredibly successful launch of chicken sandwich in third quarter of 2022. We are unique in the industry, an industry that has experienced significant price inflation, contributing to transaction loss for many brands, but that is not Wingstop. As lower-income consumers pull back from those higher frequency QSR occasions, or even as higher-income consumers trade down into dining visits, Wingstop is uniquely positioned to gain more new guests and introduce them to that indulgent, high-quality occasion that our core consumers have come to appreciate over the years. The momentum we are seeing in our business led us to increase our outlook to approximately 16% domestic same-store sales growth for 2023. Wingstop is at an exciting inflection point as a brand. Our strategies are working and have staying power, positioning us well on our path to grow AUVs in excess of $2 million. We are achieving record levels in brand health metrics. Our advertising fund is four times the size it was in 2018, our first year as a national advertiser, giving us the fuel to continue acquiring new guests and drive top of mind consideration. While we are making great progress on building awareness, our opportunity remains significant to reach the awareness levels of other scaled national restaurant brands. Our media strategy is proving highly effective, along with new breakthrough creative launched in September. Many consumers are experiencing our flavors for the first time, and they're returning for more. With a year under our belt with chicken sandwich, we are learning a lot about these new guests. About half of our new chicken sandwich guests purchase only a sandwich in their first visit, but we are seeing the majority of them in their second visit navigate the rest of our menu and purchase other proteins. Chicken sandwich has helped create a halo effect around our brand, and it's positioning Wingstop to win more of these guest occasions. The acquisition of these new guests is translating into stronger new guest retention and increasing frequency. There's plenty of runway ahead of us as we look to gain our fair share of the 2.8 billion servings of chicken sandwiches annually in the U.S. This new guest we are attracting tends to be Gen Z or Millennial, middle income, and are less likely to have kids in their household than our existing guests. Their average ticket and boneless mix are higher than our existing guests, and they tend to engage with us through our digital ordering platform. This consumer is right in the sweet spot for our brand. But it is not just with our new chicken sandwich. We are seeing strong new guest acquisition across all channels. We continue to see growth in average weekly transactions with DoorDash, and since the launch of Uber Eats, we have sustained Uber Eats delivery transactions at a level that's double the initial launch last year. We see the delivery channel as another opportunity to build awareness for Wingstop, and we are nowhere close to a point of maturity. While these strategies are supporting our path to $2 million plus AUVs, we are also excited about the progress we are making to continue to scale our best-in-class digital platform, which we believe will help protect the moat around our category of one position. During the third quarter, our digital sales mix achieved a new record at 67%, and we remained focused on our aspirational goal to digitize every transaction. We took a step three years ago to begin investing $50 million to build our proprietary tech platform. This investment serves two purposes: protect our digital business that has quickly scaled to $2 billion in system-wide sales, and unlock new capabilities that tap into our digital database of more than 35 million users to enable further AUV growth. Our proprietary tech stack will deploy an increased level of hyper-personalization that we believe will improve conversion, retention rates, and ultimately drive frequency. We built a platform with the most modern technology within our tech stack. I'm thrilled to share that we are now in a pilot phase, testing our platform in restaurants, which positions us for our anticipated launch in second quarter of 2024. We are just scratching the surface on personalization, and we see this as a key part of our strategy for sustaining same-store sales growth. The strength of our AUVs and unit economics are translating into accelerated growth in our development pipeline. The visibility we have into our construction pipeline at this time positions us to deliver on our 2023 guidance of 240 to 250 net new units, which would be a record year for Wingstop. We expect to exit 2023 at our highest level of development agreements ever. Our supply chain strategy is proving to be highly effective, and we have clear line of sight into our food costs for 2024. That lines up with our target of mid-30% range, delivering predictability for our brand partners. Our corporate restaurants are a great example of the impact this strategy is having with margins in the mid-20% range for 2023. At a system AUV of $1.8 million, food costs in the mid-30% range and based on an initial investment in the mid-$400,000 range, brand partners are seeing an industry-leading payback of less than two years. We've set a target for over 7,000 global restaurants, more than three times our current footprint, and a big part of our growth story is our international business. Not dissimilar from the U.S., our international markets are experiencing double-digit comps driven by transaction growth. They're executing a similar playbook to the U.S. In our U.K. market, our first restaurant that opened five years ago is hitting record sales volume. New restaurants are opening stronger, including in new markets such as Canada and Korea, that are building awareness. We expect our newly signed markets, Netherlands and Puerto Rico, to open within the next two quarters, and our business development pipeline of potential new brand partners is strong. I continue to believe our international business is supercharged for growth. With this incredible growth in our business comes responsibility. Our core, a core tenet of our ESG strategy is giving back to the communities in which we serve through Wingstop Charities. I'm proud of what the team has accomplished this past year. Wingstop Charities awarded over $1.3 million in grants so far in 2023, an increase of over more than 400% from the prior year. In the third quarter, Wingstop Charities was able to support a tremendous cause, where 100% of contributions made through the Roundup program in the months of August and September, going to the No Kid Hungry organization. No Kid Hungry's mission is to end childhood hunger and to help ensure every single child in America has the food they need to grow up healthy and strong. The contributions provided to No Kid Hungry will provide 3 million meals to our youth. This is just one of the many ways Wingstop Charities is helping support the communities we serve. As I mentioned at the start of the call, I couldn't be more excited about the momentum we have in our brand right now. Wingstop is in a category of one, and our strategies are positioning us well for our next phase of growth. Our highly franchised asset-light model generates strong free cash flow and allows us to provide what we believe are industry-leading shareholder returns. Since our IPO, we have delivered a total shareholder return in excess of 950%. This past quarter, we announced our inaugural $250 million share repurchase program, which we believe further demonstrates our commitment to enhancing shareholder returns. We have great momentum heading into 2024 with a brand that's on the offense. The underlying health of our brand is the strongest it's been, with Same-Store Sales being fueled by transaction growth and continued strengthening in our best-in-class unit economics. I want to thank our team members, brand partners, and supplier partners for their dedication and hard work to deliver these industry-leading results. With that, I'd like to turn the call over to Alex. Thank you, Michael, and good morning. The third quarter is a clear reflection of the multiyear benefits our strategies are designed to achieve. Total revenue increased to $117.1 million from $92.7 million in the prior year fiscal third quarter. Royalty revenues, franchise fees, and other revenue increased by $12.8 million in third quarter, primarily due to $3.8 million from franchise restaurant openings and a 15.3% increase in domestic same-store sales, which was driven almost entirely by transaction growth. As a result of the strength in our same-store sales growth, we are increasing our guidance from 10% to 12% to approximately 16% in 2023. Company-owned restaurant sales totaled $24 million in third quarter, an increase of $3.8 million, primarily due to a 6% increase in company-owned same-store sales, driven almost entirely by transaction growth in four net new restaurants versus the prior year comparable period. Company-owned restaurant margins were 26.4% for the quarter, showcasing the strength of our unit economic model. Cost of sales as a percentage of company-owned restaurant sales improved by 440 basis points compared to the prior year, mainly driven by a reduction in food, beverage, and packaging costs, which included a 13.5% decrease in the cost of bone-in wings. We are on track to deliver a full year cost of sales of approximately 75%, consistent with the prior outlook we shared earlier this year, and we continue to make progress executing our supply chain strategy to mitigate volatility in our food costs. At our recent brand partner convention, we generated quite a bit of excitement with the visibility we shared into our 2024 food costs, which for company-owned restaurants, would translate to approximately 35% food costs. Our strategy is supported by the progress we are making on increasing our boneless mix, now at a record level of 44% for the system. This compares to a low 30% boneless mix just a few years ago. We believe a boneless mix in excess of 50% could yield a structural change in our food cost target to a low 30% level, further enhancing our best-in-class returns for our brand partners, which we believe will continue to fuel record development for new restaurants. In the third quarter, SG&A totaled $23 million, an increase of $6.4 million versus the prior year comparable period. The current quarter included an increase in performance-based stock and short-term incentive compensation as a result of our performance, as well as investments in headcount and strategic projects to support the long-term growth of the business. As we scale, we anticipate seeing greater leverage in our SG&A investments and are continuing to target a long-term SG&A as a percentage of system-wide sales in the 2% to 2.5% range. Adjusted EBITDA, a non-GAAP measure, was $38.5 million during the quarter, an increase of 36.7% versus the prior year, which is building on top of adjusted EBITDA growth of 33% in the prior year period. Adjusting for non-recurring items, we delivered adjusted earnings per diluted share, a non-GAAP measure of $0.69, a 53% increase versus the prior year. In August, we announced that our board of directors authorized our inaugural $250 million share repurchase program. Since our IPO, total shareholder returns have exceeded 950%, demonstrating our commitment to returning capital to shareholders. To further demonstrate this commitment, we entered into an accelerated share repurchase agreement to repurchase $125 million of Wingstop common stock. Under this ASR agreement, as of 30 September 2023, the company retired 567,000 shares of its common stock, representing an estimated 75% of the total shares expected to be delivered. The delivery of any remaining shares will occur at the final settlement of the transaction, which is scheduled in the fourth quarter. The total remaining authorized amount for share repurchases is approximately $125 million at the end of third quarter. Another component of our return of capital strategy is our regular quarterly dividend, which is targeted at approximately 40% of free cash flow. On 31 October 2023, our board of directors approved a quarterly dividend of $0.22 per share of common stock, resulting in a total dividend of $6.5 million. This dividend will be paid on 8 December 2023, to stockholders of record as of 17 November 2023. Our regular dividend program, combined with our new share repurchase program, underscores the strength of our highly franchised asset-light model and our ability to enhance shareholder returns while preserving financial flexibility on our balance sheet to support our strategic growth initiatives. Moving to our outlook for 2023. Based on the visibility we have in our construction pipeline, we are reiterating our development outlook of 240 to 250 net new units, which represents a unit growth rate of 12.5% at the midpoint of our range. SG&A guidance is estimated to be between $94.5 to 95.5 million from prior guidance of $91 to 93 million, including $5.2 million in non-recurring consulting projects to support our strategic initiatives, an increase in our short-term incentive accrual based on the performance of our business, and an estimated $14 to 15 million of stock-based compensation expense, which is unchanged from prior quarter guidance. I want to echo Michael's sentiment earlier. It is truly an exciting time to be at Wingstop. We are building brand awareness, scaling the brand globally, and increasing frequency among our guests against what could be considered a challenging macro backdrop, showcasing Wingstop's category one position. Our strategies have staying power and give us the confidence to continue to deliver industry-leading results. Thank you to all our team members, brand partners, and supplier partners for their tireless efforts to serve the world our flavor. With that, I'd like to now turn to Q&A. Operator, please open the line for questions. We will now, excuse me. We will now begin the question and answer session. To ask a question, you may press star, then one on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star, then two. Please limit yourselves to one question and a single follow-up. The first question today comes from Jeff Bernstein with Barclays. Please go ahead. Hi, good morning. This is Pradeep on for Jeff. I guess I can start off with a question on the comp. You've had another very strong quarter, despite seemingly a growing number of consumer headwinds, you know, with higher interest rates, rent costs, student loan payments, and, you know, pricing is obviously being lapped as well. Your fourth quarter guidance implies another quarter of double-digit growth, and, you know, you seem to be unique among your peers, driving your results mostly with transaction growth. Just what do you attribute to all this strength? And, you know, how do you kind of sustain such momentum despite these seemingly growing headwinds? Thanks, and I have a follow-up. Good morning, and thank you for the question. You know, I think it's a handful of things that I would call out. I mean, there's no question, as we look at industry data, and we can clearly see that there's pressure on the consumer. But I think what you're really seeing in our business and what is making Wingstop unique is just the effectiveness of our growth strategies. We're acquiring more new guests than ever. Obviously, we're winning a lot of new occasions with chicken sandwich as well as delivery. But as we said in our prepared remarks, we're seeing more of those guests come back and navigate the rest of our menu, winning more of their occasions, which is yielding an uptick in frequency for our brand, which we're really excited about. I think we've talked about over the years, and it's really showcased in the fact that we've delivered 19 consecutive years of same-store sales growth, and we're on pace for our 20th this year, is that when there is pressure on the consumer, particularly that lower income consumer, they do have a tendency to pull back on more high-frequency occasions. And where Wingstop plays well and where we win, is we see those guests almost save up and want to treat themselves or indulge. And that's where Wingstop shows up in a really great way. And so we've been able to, over the years, retain those indulgent quality occasions. And I think what's really interesting in our business and what we saw in third quarter was we actually saw a slight uptick in frequency with that low-income consumer, which we're pretty excited about. And then, at the same time, we're seeing that higher-income consumer potentially pull back on dining out occasions, dining at home more, and we're winning those occasions as well. And so I think all of that's supported by an effective advertising strategy, one that we believe is really working. We have an elevated amount of ad fund investment to deploy, growing consistent with our system sales growth of roughly 30%. That's allowing us to show up in more premium placements like live sports. We've shown up in the NFL in a big way. We're showing up in NBA right now, and that's coupled with our new breakthrough creative, which we're really excited about. We're seeing some of the highest levels of purchase intent associated with that new creative, and one of the top things that consumers share with us when they see that new creative is, it makes them hungry. And so we think that food forward showing the enjoyment of our food on national TV is really all laddering up to help us continue to drive our business with transaction growth. And as we mentioned, we saw that strengthen as we progressed through the quarter, and that gives us a lot of confidence in how we'll finish 2023, which will be another record year for Wingstop. That's very helpful. I appreciate that. Shifting to unit growth, your demand has obviously been consistent all along, and I know you're not gonna give any guidance today, but just any, I guess, qualitative comments on the outlook for 2024. Are you seeing any kinds of maybe stress amongst potential developers in terms of just a slowing macro, higher borrowing costs? Just any color on what you're kind of seeing right now for 2024? Yeah, absolutely. And I think we hit on this in the prepared remarks, but we're pretty excited about the momentum we have in development. This year is playing out exactly how we anticipated or thought it would. And we're right on track and excited about the sites that are in our pipeline and where they are in the construction cycle, which supported our reiteration of our outlook for this year of 240 to 250 net new restaurants, which will be a record year for Wingstop. And we mentioned that our development pipeline, any metric we look at, development agreements, number of approved sites as we go into 2024, it's on pace for record levels. That shows to us, obviously, we have a lot of demand, but I think that demand is supported by the strength of our unit economics. We still support a pretty low initial investment in that mid-$400,000 range. When our brand partners are seeing paybacks on that initial investment of less than two years, we don't see a lot of headwinds from some of these macro elements that you called out. A lot of our brand partners in our system, quite frankly, are funding growth with existing cash flow. So, there's not a high degree of leverage in our system that this current interest rate environment might impact. So, we're encouraged by how our pipeline is shaping up as we close out 2023. That's very helpful. I appreciate it. Thank you. The next question is from David Tarantino with Baird. Please go ahead. Hi, good morning, and congratulations on such strong results. Michael, I wanted to take maybe a different tack on the unit growth outlook question. I wanted to ask, you know, the strength in the business you've seen over the past few years has really driven unit economics to levels that are, you know, were hard to envision the last time you gave the long-term growth outlook. So, I was just wondering if you're thinking about the U.S. unit growth opportunity any differently than what you laid out in the past, given the strength you're seeing, especially given the strength, I guess, in attracting new customers into the brand. Any thoughts on what you think the long-term opportunity might be based on what you've seen, you know, this year or in recent years? Good morning, David. Thanks for the question. You know, obviously, we remain extremely confident in the opportunity we see for our brand in the U.S. We've previously cited that's over 4,000 restaurants that we see the opportunity to expand Wingstop here in the U.S. And obviously, as you mentioned, with the strengthening of our unit economics, there's a significant amount of demand for that growth. But I think as we look at the total opportunity in front of us, obviously, as we continue to build out some of our original or more mature markets, like the Dallas-Fort Worth market or even Los Angeles, we continue to see really strong pace of development in those markets, and we see those restaurants opening up stronger, those paybacks continuing to improve. So we do see that as an opportunity for us to probably lean in on that plus, if you will, in our 4,000 opportunity. But as we sit here today, we remain extremely confident in being able to deliver on that long-term target of over 4,000 in the U.S. And then, obviously, the business, as we mentioned, outside of the U.S., is strengthening quite well. The markets that we're in are on track, and we're really encouraged by how the brand is expanding outside of the U.S., which when you combine that with what we have here in the U.S., combines for an opportunity for us to over triple the size of the brand as we sit here today, which is pretty exciting. Great. Thank you very much. The next question is from Sara Senatore with Bank of America. Please go ahead. Hi, thank you very much. Just a question and then a quick follow-up, please. The question is on the food costs you mentioned. I know that you've done a nice job with collars and hedging, but when I look at some of your inputs, like chicken wings or even, you know, breast prices, they've come up a lot. So I'm just trying to understand, you know, your confidence in 2024. Is it because of this mix shift towards boneless, and so it's sort of structural? Or is this maybe perhaps more of a timing where, you know, 2024 looks okay, but then some of the, you know, the hedging or the contracts roll off and perhaps after that, you see some of the impact of the recent increase in input cost prices. Then I'll have a follow-up, as I mentioned. Hi, good morning, Sara, this is Alex. You know, it's really a combination of the factors you mentioned. The size and scale of our buy, year in, year out, and our increase of our boneless mix has made us has allowed us to enter into different pricing conversations with our suppliers. And for the first time, we have visibility into our 2024 food costs, which we shared in our prepared remarks today. It's something our brand partners are really excited about. We've seen volatility before when the Urner Barry has moved. I mean, it's still today below the five-year average, well below the five-year average of wing prices. But the pricing ranges we have in place have moved our buy off the spot market, which gives us that visibility into this year as well as into next year. Got it. Thank you. And then, on that, on the topic of, you know, you having taken very little price, you know, I guess we've heard some about a promotional environment getting more intense. Is that something that you've observed as well? I think, you know, the other thing that's emerged this quarter is that companies or concepts that have taken less price just seem to be doing better. So I'm just trying to understand if it's more about the relative value that has accumulated, you know, given how much less price you've taken, or if there is something that's going on in the promotional environment. Hey, Sara, you know, I think for us, I think it plays a little bit into this category of one positioning, in that we don't really feel like we have to get out there and maybe compete in that competitive value or promotional landscape with other national brands because of the uniqueness of our offering and the differentiation of our cook to order and high quality. And so for us, we think that consumers are rewarding us for that indulgent occasion, that quality, that the two components that are highest on some of the guest feedback that we hear and what they're looking for and where they want to spend their dining out dollars. And we're able to deliver that in a situation or an offer that we believe provides great value to guests. I think we've mentioned this before, but quarter after quarter, we continue to measure improvements in our value scores with guests. We think that's a combination, obviously, of our offering, but we also think it's supported by the improvements we've been making within the four walls of the restaurants on delivering a great guest occasion. We're seeing our guest scores, record levels for the brand right now. So the combination of those two things, I think, are allowing us to continue to lean into a strategy that's working. If you look at our third quarter results, a 15.3% comp, which is substantially all driven by transaction growth, I think, that supports a little bit of what we're saying here. Very good. Thank you so much. The next question is from Andy Barish with Jefferies. Please go ahead. Hey, guys. Wanted to just get a little bit of clarification on the tech stack and just understanding what's being piloted in restaurants now that's different. As you look forward to, you know, a 2024 launch, I may have missed something there, but if you could just provide us a little bit more color on that, that would be helpful. Yeah, Andy, we're really excited about the progress we've made and where we are today with our proprietary tech stack. This is end-to-end, the entire consumer journey, and something we've been able to build, as we mentioned earlier, leveraging the most modern technology, and we think it's something that's gonna be a step change or even an unlock as we continue to advance our digital transformation and expand our digital business. This is gonna allow us to really lean into personalization, really leverage that database that's over 35 million users strong, and lean into hyper-personalization and leverage things like AI that I think will ultimately impact conversion, impact frequency. So we're really excited about being in pilot in restaurant and starting to move towards that broader scale rollout, which we said would be in second quarter of 2024. Great. Just one follow-up on, you know, customer acquisition. You definitely gave a little bit more detail there in terms of what's been going on with all the programs over the last year. Is that, you know, is that something new coming kind of out of your, you know, your tech investment, or was that, you know, studies that you've been doing recently on, you know, on your guests that, you know, you've been able to glean results from? Just, you know, just trying to get a little bit more color on that. Yeah, absolutely. As we've seen our digital business grow to a record level of 67%, that's allowed us to gain a lot more data on our guests and be able to learn more about them, where they dine, how they engage with our brand. And as we mentioned on our prepared remarks, having a year under our belt with chicken sandwich, where we've brought a lot of new guests in, that's allowed us to really look at and understand how they engage with our brand, how quickly they return into the brand, and then what they buy on that second visit. And that's providing what we've called a halo effect to our overall business. That new guest that we're bringing in, we mentioned, tends to be Gen Z or Millennials, more middle income, less likely to have kids at home than our core. And their average ticket's higher and their Boneless Mix is higher, which is helping support continued growth in our Boneless Mix, which is a beautiful thing because it ties directly to our supply chain strategy. That's allowing us to ultimately impact the unit economics and just further enhance those which are already best in class. Yeah, impressive stuff. Thank you. Thank you. The next question is from Joshua Long with Stephens. Please go ahead. Great, thank you for taking my question. When we think about the opportunity to drive boneless mix above that 50% threshold that you called, called out, Alex, just curious, you know, in stores that have been driving, you know, meaningfully higher mix here now, just curious, any sort of strategies or learnings you've seen in, in terms of what's been successful for getting either that level of awareness up or just the frequency and engagement with that boneless category higher and just, you know, maybe what that has to inputs that has into thinking about the broader system? Hey, Joshua, I appreciate the question. You know, it's interesting. There's plenty of restaurants in our system that have a boneless mix well north of 50%. And those restaurants, you know, they are a little bit of the basis behind that statement we've made that could ultimately, as we drive boneless mix higher, north of 50%, could be a structural change in our food cost target. And those restaurants today are enjoying a food cost that's, you know, call it 300 to 400 basis points lower than what we see at the system average. And we think as we bring more of these new guests in, as we continue to win more of these occasions, it's not just boneless, it's not just sandwiches, there's tenders as well. And so there's a ton of opportunity for us to go after to continue to win more of these guest occasions that we believe give us line of sight to driving that boneless mix north of 50%, which is pretty exciting for us. It's exciting for our brand partners because it's just gonna further bolster those best-in-class unit economics, which we know will just continue to fuel demand for development and allow us to continue to deliver on our long-term algorithm of growing units over 10% each year, which we believe will ultimately translate to best-in-class shareholder returns. Thank you for that. And as a follow-up, when we think about your commentary around being able to drive awareness across all the different channels, and particularly you called out the strength and delivery and just the staying power that the brand has. Curious what you've seen in terms of the brand journey, depending on, you know, maybe what channel customers come to you from. Is there an opportunity, and how have you kind of navigated the opportunity around bringing customers that maybe come through the third-party delivery channel onto your own Wingstop branded platform over time? Yeah, absolutely. I mean, it's been really exciting for us to see the growth in the delivery channel, but what's really exciting is we've seen growth in all channels. And I think that's really healthy for our brand, and we believe it's a demonstration that our advertising strategy is working. The execution with the restaurants is really well, and so we're really encouraged by that. But as we think about continuing to win more occasions, I really want to kind of tie back to the investments we've made in e-com and how we really believe that's gonna be an unlock for us to control and really customize that customer journey in a way that allows us to win more of their occasions. It makes them think to go to Wingstop.com or our app to engage with our brand. We think as we continue to advance this pilot towards our national launch in second quarter of 2024, that's gonna be an exciting unlock for our brand. Thank you. The next question is from Brian Harbour with Morgan Stanley. Please go ahead. Yes, thank you. Maybe first, just one quick one. Was there a certain pricing assumption when you talk about, you know, where you think food costs will run next year? No, I think our comments around food costs really are centered around the progress we've made against our supply chain strategy. We continue to be committed to that disciplined approach to pricing that we've had over the years, which is a one to two points of price taken over two windows each year. Okay, thanks. And then, you know, I think it's clear that your larger advertising budget and what you've done with media has really been quite successful in driving awareness. Where do you think - you know, where else do you think you kind of want to be just in terms of ad placement, if you kind of thought about today versus, you know, where you'd like to be in one to two years, you know, where else do you think you can deploy dollars? And then, do you think that new creative campaign in September was a key driver of the momentum you saw exiting the quarter? Hey, Brian, thanks for the question. You know, I think it's interesting. Our ad spend has grown, as we mentioned, you know, over four times what it was when we initially launched national advertising as a brand in 2018. So that's significant growth, and it's allowed us to show up in these premium placements like the NFL and NBA. But even as we show up there, I think you're only seeing us in one or two spots a game. And so there's a ton of runway just within linear TV for us to continue to show up more and continue to drive brand awareness. We mentioned, and we've talked about it over the years, that the opportunity we have to scale our brand awareness to where other more mature national brands are, is that opportunity in front of us is significant. And we think as our ad fund continues to grow with system sales, we'll continue to show up more. But at the same time, we, we definitely lean into looking at being a digital-forward brand and leveraging that first-party data that we have to, to show up, you know, in the right channel with the right message, even leveraging that database to target consumers who look just like those who engage with us. And so that'll continue to be a key part of our strategy. But, you know, the, the exciting thing for us and what gives us a lot of confidence is our strategy is working, yet we still have a ton of runway in front of us just to continue to lean in and drive, drive the overall brand. And obviously, we're, we're excited about the creative. We definitely think that had an impact to the results we saw in third quarter, particularly as we exited the quarter. But we think it's an aggregate of all the things that are working together in concert, that are supporting these industry-leading results and really ultimately driving transactions, which is pretty unique in the industry right now. The next question is from Andrew Charles with TD Cowen. Please go ahead. Great, thank you. Clearly very encouraging commentary on 3Q comps and how the business is shaping up in 4Q. I know we'll get the 2024 guidance next quarter, but is there anything that gives you concern in your ability to reach medium-term guidance of mid-single digits next year? I also have a follow-up. Andrew, thanks for the question. You know, we were obviously really excited and pretty pleased with the results we saw in third quarter. Really, it was one thing that we felt was really important, something we really wanted to highlight on the call today, and that is we've talked about these growth strategies that we've been executing against. Whether it's winning more occasions, bringing in new guests via chicken sandwich, whether it's continuing to expand our brand awareness on the delivery channel and win more delivery occasions, continuing to scale our national advertising in a way that's seeing us measure record levels from a brand awareness perspective or even expanding our digital channel. And all of those, we've talked about them being multi-year drivers for our business. As we lap some pretty meaningful levers that we pulled in 2022, we hope that it's understood and appreciated that these are in fact multi-year drivers. So as we think about 2024, it gives us a lot of confidence for us to continue to drive AUVs and continue to advance the ball north of that $2 million target that we have, which we know will just further enhance those best-in-class unit economics. Excellent. Okay, great. Then, Alex, looking ahead, what's the philosophy with the balance sheet and use of cash? As you end the year closer to 4x leverage versus the 6x-7x target. You know, is the plan for the foreseeable future to use free cash flow for stock buyback? Obviously, you have the $125 million still authorized. But looking even beyond that, you know, is the plan just to use free cash flow for stock buyback until conditions become more favorable for pursuing a leverage recap that you've historically done? Hey, good morning, Andrew. Yeah, I think we are sensitive a bit to the current backdrop we're operating in. But as you may recall, last year we were opportunistic in the last debt transaction that we had made that positioned our flexibility on our balance sheet to navigate uncertainty ahead. And that includes, you know, with the strength of our free cash flow generation, this asset-light, highly franchised model. We delever fairly quickly, but we can put that free cash flow to work, whether it's to support our growth initiatives or return of capital strategies, which also include, beyond share repurchases, a regular dividend that's funded at about 40% of free cash flow. So we think we have ample flexibility and liquidity available to us to continue to support those growth strategies. Excellent. Thank you, guys. The next question is from John Tower with Citi. Please go ahead. Hi, it's actually Karen Holthouse on for John today. Thinking about the new technology platform that you're hoping to roll out to stores in the second quarter, it sounds like there's customer facing and then also, you know, analytical or operational pieces to it. If you could maybe expand on kind of the new capabilities. And then also, you know, other companies have started to talk about recouping some of their investments in digital capabilities through, you know, per order fees or other fees to franchisees. Kind of philosophically, how do you think about, you know, that as a service to your franchisees that's, you know, part of just already being a Wingstop franchisee or something that's replacing third parties that you should get paid for-- that you should get paid for? Just kind of, again, philosophically, how do you think about that? Hey, Karen, good morning. Yeah, we're really excited about what we're calling My Wingstop, this tech platform that we've built. And we do believe it's going to just continue to advance the ball forward and provide a best-in-class consumer experience, digital ordering experience that'll allow us to continue to win more digital occasions, and we think it will ultimately improve conversion. And as we mentioned, also, we believe will ultimately impact frequency. And you're right, it is providing more insights and more visibility into the business within the four walls of the restaurants for our brand partners, which we think will just that added visibility, the additional analytics will just further help them improve profitability over time, which is pretty exciting. And as we deploy this, we will be displacing certain costs that sit on their PNL today. As we think about the ongoing operating expense associated with operating My Wingstop, we would expect to structure it in a way to where it's cost neutral in our PNL and the ongoing cost is covered by the brand partners. We think that's the right approach to do it. Ultimately, we think this is something that will just further enhance their unit economics over the long term. Great. Thank you. The next question is from Andrew Strelzik with BMO. Please go ahead. Hi, this is Daniel Gold on for Andrew Strelzik. Thanks for taking my question. Regarding your supply chain initiatives, you've noted moving the buy off spot. Have you completely disconnected the model from spot- linked prices? Is there still some link? Can you provide texture on how that link is structured, if there is one? Yeah, good morning. I think we're pretty excited about the progress we've made in our supply chain strategy. I think what's important is this strategy is designed around minimizing the volatility that we see in food costs. And Alex referenced it in his prepared remarks, where we've made some meaningful progress over the past year, and it puts us in a position of, and quite frankly, a position we really haven't been in before as a brand, to have visibility into what we expect food costs to be for 2024. And that's something that's really exciting for our brand partners. And we're gonna continue to work on advancing that strategy. Our supplier partners are right there with us, and we think it's a great strategy that works for both sides. So it's something we think we can continue to advance forward. And, you know, we'll move more and more of our buy away from the spot market, ensuring that we minimize the volatility in food costs. And then, as Alex mentioned, we see a line of sight to continuing to drive boneless mix to something north of 50%. That could ultimately be a structural change to food costs in that low 30 range, which is in the mid-30s today. And that would just further bolster those unit economics that our brand partners enjoy today. Right. Thank you. Can you give us an update on your delivery mix and how you're looking to drive growth in that channel? I understand there's some pressure on delivery in this environment, and are additional partners a factor there in driving growth? Yeah, I mean, we're pretty encouraged by the growth that we've seen in delivery. We actually mentioned in our prepared remarks that we've seen growth both in DoorDash and Uber Eats, and we're continuing to believe there's a meaningful amount of upside in that channel for us. From a mix perspective, it's pretty consistent to what it was last quarter, maybe ticked up a little bit, but that's a good thing, because while we're still seeing growth in those channels, we're seeing growth in all other channels, whether it's digital carryout, non-digital carryout. And so from a mix perspective, that number's not moving very much, but we think that's a good thing because of the strength we're seeing across all channels, which we think is a really healthy sign for the brand. Great. Congrats on the quarter. Thank you. The next question. Excuse me. The next question is from Michael Tamas with Oppenheimer & Company. Please go ahead. Thanks. Good morning. You know, Michael, I wanted to follow up on your comment about gaining more new customers this quarter than you did when you first launched the chicken sandwich. It's pretty impressive. So can you dig into that a little bit more? How are you reaching these new customers for the first time? How do you maintain that momentum? Is it just the national TV campaigns, or what are some other levers you can pull in 2024 and beyond to continue gaining new customers? Thanks. Yeah, it was a stat we're really excited about. You know, we obviously had an incredibly successful launch of chicken sandwich in 2022, and to be able to lap that, obviously with the comp that we delivered and also acquiring more guests, new guests than we did during that time, we're pretty excited about. And we think it's... Again, we think it's just the effectiveness of these multiple growth strategies that we're executing against. And, you know, the continued expansion of the brand and continuing to scale awareness is obviously a big catalyst for that. As more brands know of Wingstop and are looking for that indulgent quality occasion, which is where we think in a time when it's tough out there, where dining behaviors tend to trend, we think it puts us in a really unique spot just to continue to navigate this environment different than everyone else in the industry. Thanks. And then on the international side, you've slowly been ramping the number of new units you're building each year, you know, outside the U.S. So should we think about that sort of stairstep higher continuing to happen? Or is there anything that you see as you look out that there's going to be a meaningful step change, whether it's China or somewhere else? Thanks. Hey, good morning, Michael. This is Alex. Yeah, we would expect international to continue to stairstep, and it's a little bit of the nature of the way we construct our development agreements. In the U.S., our domestic agreements tend to be three to five years, smaller amount of restaurants under commitment. International tend to be 10 years, and then they start a little slower in the ramp. And then they get to a place like our U.K. market, which is our playbook for future restaurant development, where we're opening restaurants in the mid-teens level, and in its fourth or fifth year into its opening rates. And, you know, we've got new markets like Canada and Korea that are following that playbook. We're really excited about Canada just being open with four restaurants in a little over a year, and their AUVs are already pacing at a level that's near the U.S. domestic average. They're building awareness. They're starting to turn that corner, just like the U.K. market did, and ramping up. So I think we will expect over time, though, international, as Michael mentioned on the call, to be a big, much bigger part of our story. Thank you. The next question is from Peter Saleh with BTIG. Please go ahead. Great! Thanks for taking the question, and congrats on another great quarter. I did want to come back to the conversation around the balance sheet. In this environment of higher for longer, and I appreciate that we don't know where rates are really gonna go over the next twelve months, but is your intention or the message here that you'll be more patient until rates maybe come down a little bit from the current environment to add more leverage? Or should we still expect you to move on additional leverage over the next twelve months? And then also, I know your target used to be in that six, seven times. I think in the past, you were closer to six times on leverage. Is that? Should we think about that target to be a, you know, a turn or so lower now? Or just trying to get some clarity around your comments around the balance sheet going forward. Thank you. Hey, Peter, I'll start, and then Alex can jump in. But, you know, I think what we were referencing is we leaned in in our last debt refinancing to be in a position to have options and to be flexible. And that's exactly where we are. We put a lot of cash on the balance sheet, providing us a lot of optionality, but we also entered into a Variable Funding Note, and the pricing at which we entered that into at the time was extremely competitive and is, quite frankly, at a better rate than I think what we can get debt at on the open market today. And so it puts us in a great spot to be flexible and to have options. We have plenty of cash on the balance sheet. We generate a ton of free cash flow, as being an asset-light model. I think you'll see us continue to lean into optionality in front of us, and we think we're in a position just to continue to execute, based on our current capital structure, against our return on capital strategy that we've talked about. But that said, I don't think anything changes from our levels of leverage and where we're comfortable. We still think that's a pretty healthy mark for us to be at, particularly when you think about the pace at which we delever. When you combine our EBITDA growth rate, which for this quarter, just, just to point out, was north of 30% on top of a pretty similar and strong number last year. And so that, combined with our free cash flow generation, allows us to do de-lever really quickly. And so, we feel pretty comfortable about where we are today and the options we have in front of us. Thank you. And then just real quick on the delivery partners. You know, you have two sizable delivery partners. In the past, I think you'd indicated about an 80% or so loyalty, but for each individual partner, with maybe 20% of the customers kind of trading back and forth. Has anything changed as both of those delivery channels for you guys have grown? Is that still... Are those still good metrics to use? Yeah, Peter, this is, you know, we actually, that, that data point you referenced was something we had hypothesized based on some research that we had done when launching Uber Eats last year. But we have not seen the cannibalization. As we mentioned on the call, we're still growing our DoorDash business from an average weekly delivery transaction standpoint. Uber Eats is growing as well, and, and this is with a, a very low level of awareness in both marketplaces. And so there's gonna be opportunity for us to deploy some of our advertising fund investments into these channels to build awareness, and that's what we're focused on doing, coupled with the new guest acquisition that we have across all channels. Thank you very much. Our final question today comes from Jake Bartlett with Truist. Please go ahead. Great. Thanks for taking the question. You know, my first, and I have a follow-up. The first question is on G&A. The G&A guidance has, you know, gone up about 15% from the initial guidance. Just wanted to make sure I understand what's driving that and, and really, most importantly, what the implication is for 2024. I assume there's a lot of, you know, incentive comp that's accrued, it's being reflected in 2023, might not recur in 2024. So just if you can kind of level set us with, you know, base to grow from in 2024, any help there would be great. And then I have a follow-up. Sure, Jake. You know, there's two factors really in the increase in our guidance from the prior quarter, and it's one is the investment in consulting fees that were in quarter three of $1.3 million, and then the balance relates to an increase in our accrual for our short-term incentive-based compensation based on the performance in the business. And so in total, for 2023, we have about $5.2 million of non-recurring consulting fee investments that will lap, and then, you know, obviously, the short-term incentive will reset going into next year. So I would think about G&A as a% of system sales, and we'll have more detail in 2024, but something that's consistent with what we see in 2023 for next year. Okay, great. You know, and I had a question about the GLP-1, you know, potential impact going forward. I know it's really difficult to quantify, but just I'm wondering how you're thinking about it, whether you've done any work as to your exposure, if there's any markets where you're seeing an impact. And then, I guess, you know, if, if, if you think there would be an impact, any kind of way you, you think you could react to that? Sure. Clearly, we're not seeing an impact on our business today, which is supported by the strong results that we delivered for third quarter. Jake, I think there's still a lot of questions out there around GLP-1 that remain to be answered. Affordability, the level of widespread sustainable adoption, I think, are still relatively unknown. But as we think about our target guests and that group occasion where we win, we think we're well positioned, and so we're gonna remain focused on our long-term growth strategies that we're executing against and just continue to advance our strategies forward. Great. I appreciate it. This concludes our question-and-answer session, and the conference has also now concluded. Thank you for attending today's presentation. You may now disconnect.