Dutch Bros Inc. (BROS) Q4 2021 Earnings Call Transcript

Dutch Bros Inc. (BROS 1.26%)
Q4 2021 Earnings Call
Mar 01, 2022, 5:00 p.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Operator

Greetings, and welcome to the Dutch Bros fourth quarter 2021 conference call. [Operator instructions] As a reminder, this conference is being recorded. I'd now like to turn the conference over to your host, Paddy Warren, director of investor relations and corporate development. Sir, you may begin.

Paddy Warren -- Director of Investor Relations and Corporate Development

Thanks. Good afternoon, and welcome. I'm joined today by Joth Ricci, president and CEO; and Charlie Jemley, CFO. We issued our earnings press release for the quarter and year ended December 31, 2021, after the market closed today, and we will file our 10-K in the upcoming days.

We have also posted our earnings press release and a supplemental information deck on our Investor Relations website at investors.dutchbros.com, and we'll post our 10-K there as well when it is released. A recording of today's call will be available on our website immediately following this call. Please be aware that all statements in our prepared remarks and in response to your questions, other than those of historical fact, including statements regarding our future results of operations or financial condition, recent strategy and plans and objectives of management for future operations are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All such forward-looking statements are inherently subject to risks, uncertainties, and assumptions.

They are not guarantees of performance, and they are expressly qualified in their entirety by cautionary statements. The forward-looking statements made are as of today's date, and we undertake no obligation to update them to reflect events or circumstances after today or to reflect new information, actual results, revised expectations, or the occurrence of unanticipated events, except for as required by law. We may not actually achieve these plans, intentions, or expectations disclosed in our forward-looking statements, and you should not place undue reliance upon them. For more details, please refer to our earnings press release and to the risk factors in our other SEC filings, particularly the risk factors described in our quarterly report on Form 10-Q for the quarter ended September 30, 2021, filed with the SEC on November 12, 2021, and in our 10-K for the year ended 2021 that will be filed in the upcoming days.

Finally, while we have prepared our consolidated financial statements in accordance with generally accepted accounting principles of the United States, we will also reference non-GAAP financial measures today, which can be useful in evaluating our core operating performance. However, these non-GAAP financial measures, which may be different than similarly titled measures used by other companies and not substitute from measures that are prepared under generally accepted accounting principles. Rather, they are presented to enhance investors' overall understanding of our financial performance but should not be considered a substitute for or superior to the financial information prepared and presented in accordance with GAAP. Investors should therefore review the reconciliation of these non-GAAP measures to the comparable GAAP results contained in our earnings press release and not rely on any single financial measure to evaluate our business.

With that, I would like to call -- turn the call over to Joth.

Joth Ricci -- President and Chief Executive Officer

Thank you, Paddy, and good afternoon, and welcome, everyone. We appreciate your interest in Dutch Bros. Let me begin by some opening remarks on our 2021 performance and then discuss how well-positioned we are for the future. Charlie will then review the important specifics of our financial results and provide guidance for 2022.

I will conclude with some final thoughts before turning the call over to Q&A. Our first section is shop development. 2021 was a record year for Dutch Bros on many levels. Of course, we completed a successful IPO, but equally important, we opened 98 shops systemwide, of which 82 were company-operated, surpassing our previously provided guidance of 92 systemwide shops.

In the process, we also entered three new states: Texas, Oklahoma, and Kansas. The magnitude of our new shop openings, along with our continued expansion into new markets, put us to the test and the team delivered. We also handled the faster pace of new openings very well, and these units are performing at a very high level. In the fourth quarter, new shop development was the highest on record for Dutch Bros.

We opened 35 new shops, including 30 company-operated shops. In December, we opened a record 23 shops. On [Inaudible] day, December 3, we opened six locations in six different states, demonstrating our capacity to manage simultaneous development across multiple markets. Also of note, we opened eight more shops on the last weekend of the year.

Through our preopening programs, we continue to invest in the success of each new shop especially as we enter new markets. We send a dedicated opening team to instill our distinctive culture of speed, quality, and service, and in the long run, this investment pays for itself in spades. When shops open late in the quarter, they incur all of this preopening investment that typically do not yet have a chance to contribute meaningfully to the revenue or profitability and to offset these preopening investments in the current quarter. Charlie will get into further detail on new unit performance and overall profitability.

When we enter a new market, we start with one shop but quickly build several more to capture market share and satisfy consumer demand. Density and scale create a positive flywheel effect for us, increasing brand awareness and providing more capacity to serve customers. Since 2020, average unit volumes for new shops have exceeded the system average, and these shops have demonstrated a predictable and consistent volume and margin progression, typically reaching margin maturity within three to four quarters of opening. The first quarter has also been off to a strong start.

With February, we opened 25 shops, all of which are company-operated. We expect to end the quarter with at least 30 new shops opened. We are excited about our near-term development growth prospects. The new shop opportunity is even better than we originally anticipated during our IPO process last year as evidenced by our strong performance in new markets like Texas, Oklahoma, Tennessee, and Kansas.

In early 2022, we opened our first shop east of the Mississippi River in Nashville, Tennessee. Throughout 2022, we will continue to expand in Texas, Oklahoma, Tennessee, and Kansas and also ramp up development in Southern California where results are pointing to a significant opportunity. In total, we now expect to open at least 125 shops, above our original guidance of at least 112. Our ability to increase our development goal for 2022 is based upon our incredibly talented pool of operators as well as our confidence in our ability to identify and secure new sites at attractive returns.

Staffing and labor headwinds within the overall industry are well known. We've read the headlines. While we are neither immune from market forces nor the impact of the omicron variant, our overall labor cost and ability to maintain normal operating hours were stable in the fourth quarter and now into 2022. We had less than 1% downtime during the fourth quarter.

This figure ticked up slightly in January 2022 as the variant peaked but quickly subsided in February. We were able to utilize pooled staffing to help us during these times. Our fully cross-trained crews allow us to fill in where one shop has a shortage relative to another and draw from this pool as needed to weather the headwinds. We have not experienced the staffing challenges of the great resignation.

During the fourth quarter, our shop level turnover was 56% and down sequentially from the third quarter. At the regional operator level, we have virtually nonexistent turnover, which we attribute to our unique people-first culture, along with the significant career development opportunities and financial incentives that we provide to our employees. Dutch Bros has always been a people- and culture-first company, focused on providing meaningful development opportunities to those who want them. As we increase our shop development target, we open up even more leadership and growth opportunities for our people.

We are not a real estate company. Our primary focus is not site availability, it is people development. When we commit to growth numbers, we do so because we are confident in the readiness of our operators. When we guide to at least 125 new shop openings this year, we do so with the knowledge that we have a sufficient bench strength ready to achieve the goal.

Currently, we have nearly 200 fully qualified regional operator candidates in the pipeline ready to run a market. These candidates grew up in the Dutch Bros system, working their way up from Broista, both in our shops and our franchisee shops, and have an average tenure of about 6.5 years. At scale, they can support the 750 to 1,000 new shops across our system that we have planned. Behind these fully qualified regional operator candidates are approximately 900 others in the Dutch Bros leadership pathway program.

The leadership pathway program provides a clear path from Broista to manager to regional operator and is the core of our people development system. Augmenting this program is our new EdAssist program that provides tuition assistance for all employees across the company. We believe that our employees' continuous improvement, both personally and professionally, improves retention and positions Dutch Bros to win. Now let's turn to our performance.

Fourth-quarter revenue increased 55.8% to $140.1 million compared to last year. System same-shop sales grew 10.1% in the fourth quarter and 15.3% on a two-year basis, while the company-operated same-shop sales grew 11.5% in the fourth quarter and 17.3% on a two-year basis. Our sales trends were steady throughout the quarter. We benefited from good performance in our fall and holiday promotion window, enticing more customers to choose a premium add-on or larger size and the execution of a systemwide price increase.

In combination, these efforts resulted in a weighted average price increase that far exceeded our list price adjustments. Quarterly adjusted EBITDA was $13.3 million, at the upper end of our previously provided guidance range of $12.5 million to $13.5 million. Included in this figure is a $6.2 million in preopening expenses, of which approximately $1 million is related to openings that took place late in the third quarter. The remaining investments supported our record-setting 30 company-operated shop openings in the fourth quarter.

Our confidence in our people pipeline and development team allowed us to accelerate openings ahead of plan, allowing these shops to sooner contribute to profitability in 2022. While we are not immune to margin pressures but are managing it appropriately, we continue to look for operational improvements and further opportunities in our market-based pricing model. In addition, we will use segmentation, personalization, and innovation to excite our customers about our unique premium and, at times, higher-margin beverage offerings. In November, we successfully took a modest price increase of 2.9%.

It was our first since prior to the pandemic and was well received by our customers, operators, and franchisees. Total revenue for the fiscal 2021 increased 52.1% to $497.9 million compared to last year. System same-shop sales grew 8.4% for fiscal 2021 and 10.3% on a two-year basis, while the company-operated same-shop sales grew 9% for the full year 2021 and 11.1% on a two-year basis. Annual adjusted EBITDA reached $82.1 million, an increase of 17.7% compared to 2020.

Momentum has continued into the new year. Underlying consumer demand remains very positive as evidenced by our same-shop sales and continued acceptance as we enter new markets and infill our current markets. As we've discussed in the past, one of our biggest priorities in 2021 and moving forward is the Dutch Rewards app. The Dutch Rewards program launched last year had already grown to 3.2 million registered users by year end, which is approximately 6,000 customers per shop.

In the fourth quarter alone, we added half a million new members. Over the last 6 months, the average ticket for Dutch Rewards members was also 3% higher than for non-rewards members. At year end, our digital tender was over 60%. We are pleased with our customers' adoption and use of the Dutch Rewards, especially as users begin to utilize the platform's stored value features.

As more customers load funds to their accounts, we believe it can reduce transaction times, speed up our lines, and free time to create meaningful lasting connections. Through the app, we also have the ability to remember each interaction with all of our Dutch Rewards members. We can leverage this knowledge to generate custom offers and thoughtful messaging to personalize our members' Dutch Bros experience. We're in the early innings of this work, and we're excited to continue unlocking value for our customers and our brand.

Another area of things we aim for internally is to make a massive difference one cup at a time. Giving back to our communities has always been part of our DNA. Over the last several years, we've expanded and institutionalized what we call our social impact platform. This includes our ongoing philanthropy, diversity, equity and inclusion, sustainability, and community and government relations.

As a values-driven company, we'll hold ourselves accountable to our employees and our customers in this space, and they have high expectations. We have made clear our unwavering commitment to inclusion, launched important programs to support and train our people, and initiated systems to foster a diverse and inclusive future for Dutch Bros. Likewise, our sustainability program is focused on near-term goals to reduce our waste and water usage and ensure our coffee is ethically sourced. At the same time, we are developing a set of commitments toward an overall 2030 carbon reduction goal that will help ensure that we are a meaningful contributor to positive environmental change in the decade ahead.

We are excited to continue developing our capabilities along these pillars, ensure our progress, accomplishments, and areas of improvement with you. To conclude, we believe that we have something here that is unique, a growing profitable business with a phenomenal culture and loyal customer base with the foundation necessary to support growth for many, many years to come. After over two years of virtual events due to the pandemic, we held our first in-person leadership summit in Nashville this February. The energy of our teams was unmatched.

We also recently celebrated the Dutch Bros' 30th anniversary in our home city of Grants Pass. Our employees were able to celebrate with our co-founder, Trav, and take a moment to reflect on the company's journey. These two get-togethers will impact our G&A in the first quarter. It's been some time since we had the ability to bring our people together on a larger scale, and we believe this investment is critical to our future -- to our culture.

Both events were incredible for our operators, franchisees, and headquarters employees, testament to the culture we have worked so hard to create, carefully nurture and grow for over 30 years now. It was humbling to look back at just how far we've come from the first double-headed espresso machine on a pushcart in downtown Grants Pass, Oregon to a system of over 538 shops across 12 states at the end of 2021. And while we are proud to be recognized as one of the fastest-growing brands in the United States foodservice and restaurant industry by location count, we are still in the early stages of a long-term growth story with enormous potential. Our goal is to serve high-quality handcrafted drinks at 4,000 locations across the U.S.

within the next 10 to 15 years while continuing to develop a people pipeline that enables our unit growth and supports communities. With that, I'd like to turn the call over to Charlie to review a few more details of the results.

Charlie Jemley -- Chief Financial Officer

Thanks, Joth. As Joth highlighted, we're off to a very good start as a public company, and we entered 2022 with good momentum across the business. Looking inside 2021's financial performance and looking forward into 2022, it's important to reflect on the overall investment thesis and map our outcomes against that frame of reference. In addition to our earnings release, there is a presentation that outlines our results posted on our Investor Relations website that contains supplemental information and details.

As a people-first growth company, one of our key objectives is to expand the brand and give our people across the system new opportunities. This is going very well and even better than we anticipated entering 2021. Let's get to the specifics of new shop growth. Our objectives in the near term were to grow shop count by 20% annually and to add new shops that mature with average unit volumes at least as high as our system average.

At the end of the fourth quarter, we had 271 company-operated shops, nearly 50% more than we had at the end of 2020. Our overall system shop count was 538 shops or 22% more than we had at the end of 2020. Ahead of that objective and our guidance is 20-plus percent growth again in 2022. The second objective was to add shops that meet or exceed our system AUV.

We continue to see new shops performing higher than our system averages even as we worked diligently to infill existing markets and quickly follow on in new markets. Shops opened in 2020 are averaging $2.1 million in average unit volumes, and shops opened during 2021 are trending above this figure as well. Take, for example, our College Station market, where we made our Texas entry just over a year ago. After launching our first shop with volumes well ahead of our system average, we quickly filled in the market to better distribute the demand among four total shops that are all within four miles of each other.

The net effect was a better experience for our teams and our customers. This will be a recurring theme as we enter new markets. We do not celebrate after a big opening and seek to harvest. We are very mindful of wait times and providing the best experience possible for our customers and for our teams.

Our speed goal is not only to have good overall service times for each experience but to also be consistent in delivering that service by being very reliable. We believe that protecting shops from being overburdened helps us achieve these goals. Our growth strategy is playing out in new markets like Texas and in legacy markets like California, where we are taking our expansion in Southern California up a notch. In Southern California, we are seeing high opening week volumes, just like we have been seeing in Texas, Oklahoma, Kansas, and Tennessee.

This speaks to how well the brand travels and to the underlying demand for the brand in existing and new markets. We entered 2022 with a strong pipeline of new shops that fit inside our selection criteria and meet our overall growth strategy objectives to expand in existing markets and to open a select set of new markets each year. All this is designed to give our operators growth opportunities and to do so in a financially successful way. You see that optimism in our new unit guidance for 2022, grounded by both volume and profitability results, supporting our decision to quicken the pace in measured ways.

As it relates to new shop profitability, our results in 2021 affirm that we are right on track. Our objective is to combine high AUVs with outstanding contribution margins. Our goal is to have each new shop deliver a year two shop-level contribution of around 30%. For the year 2021, company-operated shop gross profit was 21.1% of company shop revenue.

Depreciation was 4%, resulting in a company-operated shop contribution of 25.1%. Importantly, preopening expenses were 3.2% of company-operated shop revenue. In considering our long-term target of around 30-plus percent year two shop margins, we believe we're right on track. As part of our company-operated shop contribution of 25.1%, please note that this figure includes both the aforementioned preopening expenses and other new unit inefficiencies, neither of which are included in a shop's second year of operation.

Let me now walk you through the change in company-operated shop margins for both the full year and the quarter as I know in today's environment, there is more focus on recent results versus long-term trends. As we have discussed last quarter, lower discount and promotional expenses positively impacted 2020 results. Based on social distancing protocol, we suspended use of paper stamp cards shortly after the COVID-19 pandemic began in March 2020. This persisted until Dutch Bros' app launch in February 2021.

Discount and promotional expenses when expressed as a percentage of company shop revenue fell from the upper teens in 2019 to the mid-single digits at the end of 2020. We're now trending in the low double digits despite having such a large percent of our revenue driven by rewards customers. Joth spoke at length about all the positives from having a digitized rewards program. We track this investment very carefully.

And if membership rises further, we would expect discount promotional expenses to rise accordingly. However, having more rewards members is a big positive for engagement, frequency, and ultimately, revenue expansion. Secondly, as we moved through the pandemic, we were very careful not to escalate our menu prices. In November, we took a modest price increase, which was our first measurable price increase in over a year for our company shops.

That price advance landed well for us. It was appropriate relative to our desired positioning in the market. With that grounding, let's now review company-operated shop contribution margins, given the importance of those trends to our investment thesis. On a full-year basis, company-operated shop contribution decreased from 28.7% of company-operated shop revenue to 25.1% or a total reduction of 360 basis points.

Of that, 340 basis points comes from the change in discount promotional expenses. Let's quickly look at the movement in beverage, food, and packaging costs and labor costs, given those are the two most significant costs, and the industry, in general, has been challenged by these two areas over much of 2021. Beverage, food, and packaging costs increased from 22.4% to 25.3%, or 290 basis points. 120 basis points of that increase is related to the change in discounts.

That leaves 170 basis points of real changes. Mix and recipe changes drove 100 basis points of the increase. We have previously mentioned our decision to shift to a premade mix for the Dutch Freeze category of beverages, driven by a number of operational considerations. Further, the cost and inefficiencies that are a normal part of opening new shops make up the remainder of this increase.

We opened many more shops in 2021 related to 2020 so this impact was outsized in our year-over-year comparison. Labor costs increased modestly from 29.3% to 30.6% or 130 basis points. 140 basis points of that increase is related to the change in discounts. That leaves just 10 basis points real reduction despite incurring cost increases in labor.

For example, in our West Coast markets, previously legislated minimum wage advances are in their final phases. Also beginning in 2021, we instituted minimum staffing levels in our stores, which slightly increased labor costs but were necessary to set up shops at the beginning and close of each day. Notably, these added expenditures will persist as we open many more shops in 2022 versus 2021. However, on the positive front, we incurred lower COVID-related costs in 2021 as compared to 2020, which helped to offset most of those increases.

On the whole, our underlying labor costs have been stable, with the impact of discounts driving the change in the labor percentage. Further evidence comes in our lack of turnover, the stability in our workforce, and that we are not struggling to staff at the level other retailers seem to be is allowing us to keep our costs stable. I want to reinforce that as a people-first company, we are always assessing how we reward our teams and how we create engagement in ways that go beyond compensation. We are fortunate to not be struggling at this point but we are watching this very closely.

In the fourth quarter, company-operated shop contribution decreased from 24.5% of company-operated shop revenue to 18.7% or a total reduction of 580 basis points. The change in discount and promotional expenses drove a 580-basis-point reduction in margins, identical to the entire drop in this measure. The fourth quarter of 2020 represented our lowest discount and promotional cost expense of the year when expressed as a percent of revenue. Similar to the full year 2021 view I just noted, there are many moving parts in margins, but the major driver was this change in discount expenses.

Please note that our menu price increase began to take effect in early November of 2021, and therefore, any support of margins from pricing was for a partial quarter. Beverage, food, and packaging costs increased from 22.9% to 26.8%, or 390 basis points. 190 basis points of this increase is related to the change in discounts. That leaves 200 basis points of real change or 30 basis points more than the full-year trends noted above.

Two things to point out: first, we incurred a bit more ingredient costs, driven by inflation; and second, accelerating new shop development means we will have some cost efficiencies as we open up new shops and establish logistics in new markets. Labor costs increased from 29.7% to 30.5% or 80 basis points. 220 basis points increase is related to the change in discounts. That leaves 140 basis points reduction to account for in the quarter.

In Q4 2021, we experienced lower COVID-related costs than in Q4 2020, driving 120 basis points improvement. All of these metrics are spelled out in visual detail in the investor presentation posted to support this earnings release on our Investor Relations website. Some words about fourth-quarter profit and its quality. As we mentioned in the press release, this is being limited by a number of factors.

On a dollar basis, we had higher preopening costs, which supported record new company shop openings. Of the total $6.2 million of preopening costs incurred, $1.1 million were attributable to openings late in the third quarter, leaving $5 million of preopening costs for shops opened within the fourth quarter. On a per shop basis, this is higher than our norm as we had a number of openings that represented first shops in their respective markets and speed to market also had some costs. First shops have higher preopening costs as we spend more time with our opening crew, training our staff, and creating a solid competent base for expansion.

For the year 2022, we expect the average preopening expense per shop will be consistent to what we saw in 2021. We expect to incur approximately two-thirds of our preopening expenses in the first half of 2022 as a result of this type of opening and pace. This is an important factor as you look at our profitability in the first versus second half of 2022. Adjusted EBITDA was essentially flat in the fourth quarter compared to the same period in 2020, yet revenue growth in the quarter was over 50%.

I just noted the significance of preopening costs within our fourth-quarter results. Preopening costs in the fourth quarter were $6.2 million or $2.5 million more than in the prior year. Additionally, the fourth quarter of 2020 was also positively impacted by lower -- by the lower rate of discount promotional expenses, with that impact being approximately $2.8 million. Finally, fourth quarter of 2021 was burdened with $3.1 million in ongoing costs associated with being a public company, which did not exist in the comparable quarter of the prior year.

That is a different set of costs versus a specific equity offering cost we add back to a adjusted EBITDA. In total, the impacts I mentioned were $8.4 million. As a reminder, adjusted EBITDA was $13.3 million in the fourth quarter. Once we consider the higher preopening costs and public company costs in 2021 and the positive impact of lower discount promotional costs in our 2020 results, revenue growth and adjusted EBITDA growth become more synchronized.

We made the conscious decision to accelerate growth in the fourth quarter and into 2022. And while we always try to balance the profit growth equation in the near term, we are also keen to focus on long-term high-quality revenue that will yield lasting profit and growth. And speaking of unit growth, a few words about our liquidity. As of December 31, we had $18.5 million in cash and equivalents and $65 million drawn on our revolving credit facility, reflecting $46.5 million in net debt.

We also had $85 million in committed undrawn capacity in our revolving credit facility. Yesterday, we refinanced our existing credit facility to provide greater liquidity and maintain a strong balance sheet, geared for new shop growth. Our new five-year facility provides us with $500 million in committed capital, split between a drawn term loan, undrawn delayed draw term loan, and a revolving credit facility. We believe this structure gives us ample capital to fund company-operated unit growth while always maintaining modest leverage levels and a conservative balance sheet.

We are opening more shops sooner and both our latest openings and future company shop pipeline is shifting more toward ground lease arrangements, where we spend more capital upfront and return for lower rent going forward as opposed to a build-to-suit arrangement. It is evident that we were able to go fast, over 20 openings in December and a higher annual objective for 2022 versus 2021 total openings. We have also noticed that taking more control of the construction process has allowed us to move through the many challenges being faced today faster and more efficiently. That requires more liquidity access going forward should we choose to need it.

We are grateful to our banking partners for working with us to achieve solid affordable access to liquidity to fuel growth. Before turning it back over to Joth, we wanted to share guidance for 2022 and select metrics for Q1. For 2022 specifically, total system shop openings are expected to be at least 125, of which at least 105 shops will be company-operated. Total revenues are projected to be in the range of $700 million to $715 million.

Same-shop sales growth are estimated in the mid-single digits. Adjusted EBITDA is estimated to be in the range of $115 million to $120 million. Capital expenditures are estimated to be in the range of $175 million to $200 million, which includes approximately $15 million to $20 million for our new roasting facility that we project will open in 2023. For Q1, total shop openings are expected to be at least 30, of which nearly all shops will be company-operated.

We expect approximately half of these shops to be the first shops in their respective new markets, requiring our highest level of opening support. Same-shop sales are estimated in the mid-single digits. G&A spending includes the two events Joth mentioned, in the range of $2 million to $2.5 million. As a reminder, our business is seasonal, with our best consistently high daily volumes taking place in Quarter 2.

Please see our supplemental slides in the investor deck for more details. With that, I'll turn it back over to Joth for closing remarks.

Joth Ricci -- President and Chief Executive Officer

Thanks, Charlie. We have all the building blocks in place to ensure Dutch Bros remains a successful and enduring company, a powerful authentic brand that shares the love, strong people systems that drive company culture and fuel our shop growth, a highly engaged customer following, customizable and uniquely curated beverages, highly consistent and highly attractive unit-level economics, a portable model that is successful across geographies and an engaged co-founder with an experienced leadership game. Six months after our initial public offering, we are staying true to our core thesis. In many respects, we are ahead of the game with more revenue, more profit, and more stores than what we expected.

In this time, we've hired more people and facilitated tremendous growth opportunities for our employees as well. We've treated our customers well, and we're doing our part to be good partners in our communities. Thank you again for your interest in Dutch Bros. And now we'd be happy to take questions.

Operator, please open the lines.

Questions & Answers:

Operator

[Operator instructions] Our first question is from the line of John Ivankoe with J.P. Morgan. Please go ahead.

John Ivankoe -- J.P. Morgan -- Analyst

Two questions if I may. First, I'd like to actually start on the capex number. I mean, that is a pretty substantial change at least relative to what we had in the model going to $175 million to $200 million. So I guess, two things.

First, could you repeat how much is going to that roasting facility, which I guess would be isolated to '22 and '23? But secondly, as the business shifts from build-to-suit to ground lease, how much are you expecting to spend per ground lease unit? And how much lower occupancy costs or lack of landlord financing do you think actually could benefit the P&L as you bear more of that upfront cost? And I have a follow-up.

Charlie Jemley -- Chief Financial Officer

Yes. So in 2022, we expect about $20 million of capital related to the roasting facility that will open in 2023. In terms of the ground lease, if you recall from our IPO work, we said that a ground lease was our capital, our cash of about $1.3 million to $1.4 million. A build-to-suit is about $500,000 cash contribution.

If you take that differential, essentially times 7%, that's the different rent, that's the lower rent you'll pay if you select the ground lease.

John Ivankoe -- J.P. Morgan -- Analyst

Yes, and doing -- and even if I were to back out that $20 million for the roasting facility on 105 company units, I mean, it still does feel a little bit high in capex. I mean, is there anything else going on a corporate basis or perhaps in remodels that the system may benefit from as part of that capex? Or is it you're once again front-loading fiscal '23 openings, perhaps in some of that fiscal '22 capital budget?

Charlie Jemley -- Chief Financial Officer

Yes, you're on it, John. That's -- we do have some front-load spend as we move in and keep ramping up into '23, some pre-spend. If you look -- if your pipeline is 65% to 70% ground lease and you start to do that shift versus where we were for the full year '21, you use up more cash. We'll get a little more active on upgrading units, some things that we had just delayed.

With all the COVID disruption, we just put things on the back burner. So we'll go ahead and take care of that now and throughout 2022. Yes, go ahead.

John Ivankoe -- J.P. Morgan -- Analyst

No, please.

Charlie Jemley -- Chief Financial Officer

Well, I think also coming out of IPO, we had some more cash expenses related to taxes and the equity piece of employee compensation that we had to front as well. So we left '21 with a little bit more out on our line than we would have expected.

John Ivankoe -- J.P. Morgan -- Analyst

OK. And as we think about the '22 and '23 development, I mean, is there any rethinking of the Dutch Bros box of the future, maybe including a little bit more automation, including fountains, for example? Just kind of figuring out how to be more efficient, perhaps with some of your beverage preparation, waste, consistency, what have you? Is that something that's now contemplated in your capital budget for '22?

Joth Ricci -- President and Chief Executive Officer

Well, I know that -- John, we are in the middle of testing several operational improvements inside of our stands that if go well in testing phase, that we could see -- start to roll out things like fountain systems or things like tap systems for cold brew, which we have in place in several locations already. So to put a specific number on that, I couldn't give it to you right now. But there are several operational improvements underway inside the stand.

John Ivankoe -- J.P. Morgan -- Analyst

Thank you.

Operator

We have next question from the line of Sara Senatore with Bank of America. Please go ahead.

Sara Senatore -- Bank of America Merrill Lynch -- Analyst

Thank you very much. Just I guess a clarification and then a question on the loyalty program. So first on the comp for the quarter. I think initially, you had expected that to be up mid-single digits as well and end up being quite a bit better than that.

Was that just kind of this upside from the success of the seasonal beverages and the mix shift? Or I guess I'm just trying to understand to what extent, for example, this guidance for 1Q might prove conservative insofar as it's sort of similar to what you gave us about the quarter that just passed. So that's the first question. And then the second question is on the loyalty members. You mentioned that they're spending about 3% more.

But are you also seeing higher frequency? Just trying to get a sense of whether overall spend might be even bigger than that. When we've seen other loyalty programs, I think the initial lift has been pretty meaningful. So trying to gauge kind of what is still the opportunity or maybe how your loyalty program might differ from some of the other that we've seen.

Joth Ricci -- President and Chief Executive Officer

Thanks, Sara. A couple of things on the promotional side of fourth-quarter comps as we did, as I mentioned, we executed a holiday program that was as strong and really surpassed all of our expectations related to what we did in kind of the December period and then kind of what we executed in the fall and how our team did that. I think it surprised all of us in how well that was received by the customer and the response that we had. We've also been working on premiumization of some of our products and utilizing the increased popularity of our soft top business and other ways to premiumize our business.

So we just -- I think our team did a good job of pulling together just incremental business during that time. We also -- I believe that we received a nice halo effect from the IPO in the news in the fourth quarter. We had more mentions of Dutch Bros across all regions of the country than we've ever seen in the past. And I believe that there was impact on that in a very positive way to our business.

As it relates to reward, you want to handle that?

Charlie Jemley -- Chief Financial Officer

Yes, I think -- so a couple of things there on loyalty spend. When you look at how much more a loyalty member spends in our program versus a non-loyal member, it looks a little light. We have very loyal group of consumers across the business, whether they're part of the rewards program or not. But we think that the biggest thing that can happen is, if you look at our top-tier frequent customers and you drop down to the next tier, there's a pretty significant difference in frequency.

And so we feel like as we can do some effective things to get that frequency up in that next quintile or quartile of customers on down. That's perhaps the biggest thing we can do. We also believe that stored value is a big idea not only operationally but just to create attachment and engagement and loyalty. And we're really at the infancy stages of getting customers to load money on their program.

Sara Senatore -- Bank of America Merrill Lynch -- Analyst

Understood. Thank you very much.

Operator

We have next question from the line of Andy Barish with Jefferies. Please go ahead.

Andy Barish -- Jefferies -- Analyst

Hey, guys. Let me get a follow-up, first, just on that last comment, Charlie. What percentage of rewards members roughly have preloaded funds at this point? And are there any specific programs to drive that higher?

Charlie Jemley -- Chief Financial Officer

So about 20% to 25% of our tickets from Rewards members include stored value activity. And I can't tell you about a specific promo that's coming, but we are working on ways to either incent them with additional points if they were to load or some additional reason to try to get that attachment up.

Andy Barish -- Jefferies -- Analyst

Got it. And then can you just give us, I guess, a little bit more color on just sort of the EBITDA, I guess, the absolute dollars building up? I mean, it sounds like the first half, especially the first quarter will be a little bit lower than if you just straight line your $110 million to $115 million -- or $115 million to $120 million guidance, sorry about that. So just trying to kind of get a sense of the cadence and how we should think of the discounting impact as we move into 2022, again understanding that it is kind of a moving target.

Charlie Jemley -- Chief Financial Officer

Well, discounting, once we got past this fourth quarter and the first quarter, we will roll over the launch from '21, so we'll have had a high level of promotional and discount expenses in Quarter 1 of '21. We'll lap that in Quarter 2 of '22 so we'll get a little bit of favorability from that lap. The biggest thing going on is we're going to have a fair degree of preopening expenses in the first half of this year. More than 50% of those expenses will come in the first half because of this dynamic of these first in shops.

So we average about $125,000 per store in preopening. First shops can spend over $200,000 and then it falls off after that. So as the way our pipeline is shaping up is we're going to have a lot more -- a fair degree more preopening costs in the first two quarters of '22, and that's going to create a timing drag on earnings until we reach the second half and we kind of get that back. Also note, we're opening more stores than probably you originally would have modeled.

And so we're going to have more preopening expenses in aggregate related to that as well.

Andy Barish -- Jefferies -- Analyst

OK. Very helpful color. Thank you.

Operator

We have next question from the line of David Tarantino with Baird. Please go ahead.

David Tarantino -- Baird -- Analyst

Hi. Good afternoon. My question is on the shop-level EBITDA margins. And Charlie, I just want to get your thoughts on what you think the right long-term margin of the business is and whether that's changed in your mind or not.

And then if you think about all the details you gave us for the fourth quarter and some of the nonrecurring impact, I guess, what's the bridge to get to whatever your long-term assumption is on shop-level EBITDA?

Charlie Jemley -- Chief Financial Officer

That's a great question. David, I would get you to reference, and it's hard because we just released this stuff, is Page 12 on the deck that we put together up on the website and it does a bit of a bridge. And if you go over to the right-hand side, you look on a trailing 12-month basis at our margins and you see from a contribution perspective, we reported 25.1% for the full year. That's got some preopening in it.

We put that off to the right. We're not going to have -- expect to not have COVID costs if we do identify that. So if you look at that sort of cash margin, I'll call it, in the upper 20s, including new stores, and if you were to take out the drag you get from new stores, because again, we're growing faster and faster, and you were to sort of put that back in as well as the fact that we didn't have much of a price increase in '21, then you get to that, I'll call it, 30% cash margin in the second year a store is open. And that ties right to our thesis.

So as long as we feel like we can hold the line on investment cost, and we're doing just fine there, we can do these unit -- average unit volumes 10%-plus versus the system average, and we get a 30% second-year cash margin. We have a really compelling investment thesis that's very much in sync with what we articulated back in the fall.

David Tarantino -- Baird -- Analyst

Got it. And then I guess you're always going to have new stores in the mix dragging that number down. So what do you think a good -- at the expected growth rate you have, what do you think a good steady state on a reported basis looks like? And I apologize, I don't have a good Internet connection so I can't download the slides right now, so maybe you have it in there, but --

Charlie Jemley -- Chief Financial Officer

Of course, yes. So if you just -- if you hit the brakes, right, which is kind of the way this slide is set up, if you hit the brakes and you had no preopening costs and then you had the stores mature and season out to their margins, you're probably looking at 50 to 100 basis points of drag from just the margin of new stores that come in, right, either late in the quarter or partly through the year. So that's the way I would think about it is as we're -- since we're going this fast, if you just remove preopening, the immaturity drag is 50 to 100 basis points in the overall reported margin.

David Tarantino -- Baird -- Analyst

Got it, that's very helpful. And then the last question, sorry for too many follow-ups here. But you mentioned the fairly modest price increase and it is really modest relative to what we're seeing elsewhere. Are you contemplating adding more pricing to address some of the cost pressures in the business this year?

Charlie Jemley -- Chief Financial Officer

So we look typically in a normal time frame. We're going to look at our pricing windows every 6 months, right, in the fall before holiday, in the spring before summer. And so we're very mindful of that. I think we've been fortunate to not have a lot of inflation drag, both in '21 and frankly, moving into early '22.

And so we haven't felt compelled. We don't price to a margin. First of all, we want to price to what consumers are willing to pay. And so we're just -- honestly, we're flexible and we're watching that closely, but we do with the mindset of our relative position in the market and the customer not to seek to a margin level.

But we are feeling good as we enter '22 with the trajectory of our margins, given everything going on.

David Tarantino -- Baird -- Analyst

Great. Thank you very much.

Operator

We have next question from the line of Jeffrey Bernstein with Barclays. Please go ahead.

Jeffrey Bernstein -- Barclays -- Analyst

Great. Thank you very much. First question was just on the restaurant margin you were discussing earlier. As you mentioned, obviously, it's a big focus for investors because a lot of peers are facing more pressure perhaps than you are.

But I was hoping you can maybe just share what you think, well, COGS and labor inflation might be in '22, and therefore, if you can give any kind of directional color just because you gave so much granularity on the fourth quarter, what guidance might be for the first quarter or the full year '22 on that restaurant operating margin line?

Charlie Jemley -- Chief Financial Officer

Yes. So we're fortunate that the two big costs, cost of goods and labor, we don't have any real significant upward momentum in the labor line. So we're starting halfway better than everybody else, to begin with. And then secondly, we have a pretty simple pantry of goods.

What we're really dealing with right now is freight and logistics costs going up. But we're able to do, as we've shown in Q4 and the walk I gave you in COGS, we're really able to handle that pretty effectively, and we'll get a full quarter of the price impact from November in our Q1. In terms of guiding a specific margin for Q1, I'd prefer not to do that. It is a -- Q4 is the lowest seasonality, Q1 is the next lowest seasonality.

And then we kind of get into Q2. But I just think from a -- other than the discount rollover from a year-over-year perspective, we're just not feeling compression in margins. And the biggest thing for us is our labor costs are stable.

Jeffrey Bernstein -- Barclays -- Analyst

Understood. And then the unit growth projection, obviously, the bump-up, impressive considering the environment we're looking into for '22. But I think you mentioned, obviously, you're not a real estate company, but do you have any concerns over or any pressures you're seeing related to supply chain or equipment or permitting delays? I would think that has to have some impact unless you have a pipeline much greater than the 125 and you're, therefore, factoring in some challenges from that perspective. Just trying to get a sense for your level of confidence with that increase despite the headwinds your peers are referring to.

Joth Ricci -- President and Chief Executive Officer

Jeff, this is Joth. We absolutely have considered all those factors in guiding to the new number, so your hunch is right. And we certainly are working on pipeline well into '23. So all of those factors have been included in the way that we've looked at the potential for our openings for this year, which is why we took the number up to 125.

Jeffrey Bernstein -- Barclays -- Analyst

Great. Thank you.

Operator

We have next question from the line of Andrew Charles with Cowen. Please go ahead.

Andrew Charles -- Cowen and Company -- Analyst

Great. Thank you. You guys mentioned the app for members orders for the 60% of tenure utilized by the Dutch Rewards program. I know it's early days, but can you talk to your philosophy on how to curate offers at this stage? And then as you look a couple of years out, as you collect more data, data mining gets more sophisticated, what's the vision for how you plan to curate offers longer term? I know, for instance, on the mobile order side, potentially firing in those orders or prepping those orders, if you will, before customers can really get to the stores and start to try to get them in advance or at least have the Broistas scan them at the point of order should help accelerate.

But just wanted to be a little bit more imaginative around where this could go longer term.

Joth Ricci -- President and Chief Executive Officer

Yes. Andrew, it's Joth. The -- as we've discussed for 2021, our goal was to test as much as we could on variable offers. So for example, one of the programs we ran in December was about having a new offer every day of the week for seven straight days and testing how customers responded to different point levels, so we could start to zero in on what's our most effective promotional program that we can run.

So we did everything from double points on a specific item to bonus points on a total order to get an extra sticker like how did that -- and then what we've done is we've tracked lift. We track traffic lifts. We track sales for that day and we really start to identify what the impact was. Another key that we'll do is we'll do regional activations as well.

So we have tested things like encouraging people to load stored value and what that type of promotion offers and then going back to that same customer group and encouraging them to spend. So how do those activations work, and we've also tested those down to market levels and, in some cases, down to micro market levels. So I think it's safe to say that we've run hundreds of tests over the course of 2022 and really, really starting to kind of compartmentalize and build a strategy for how we build the app, how we use it to grow sales, how we use it to effectively manage a dynamic pricing model and encourage more develop among probably our mid- and second-tier users so we can get more traffic out of that customer tier. But all-in team is doing a great job of learning.

And I think as we move forward, I think we'll -- my goal would be is that we could activate a promotion at the single customer level. That could be a few years away, but I think that you're effective in building a customer relationship with one-to-one relationship.

Andrew Charles -- Cowen and Company -- Analyst

OK. That's really helpful. And then, Charlie, quick follow-up. Guidance for mid-single-digit comps in 2022, very encouraging.

I know you're guiding that level as well for the first quarter, just you are lagging the easiest comparison of the year in 1Q. So just curious, does guidance embed some level of conservatism for the quarter? Or perhaps if you can help us out, just two-thirds of the way through the first quarter, that January maybe was a little bit more soft due to omicron before bounding in February? Just looking to better contextualize the guidance for 1Q.

Charlie Jemley -- Chief Financial Officer

Yes. It was softer in January. It was better in February, less outages. We're sitting ahead of the mid-singles right now.

We're -- like everybody, don't know where the world is going to go over the next 30 days with all that's going on. And so we're just being a little tepid about how we look at things. It doesn't really move the needle much. The biggest revenue driver is annualization of new stores and new stores getting added.

So it gets a lot of talk track and it is important to the underlying health of the business, but it's really not that financially meaningful right now as fast as we're growing the top line. That's why we don't -- we try not to overthink it.

Andrew Charles -- Cowen and Company -- Analyst

Makes perfect sense. Thanks, guys.

Operator

We have next question from the line of Chris O'Cull with Stifel. Please go ahead.

Chris OCull -- Stifel Financial Corp. -- Analyst

Thanks. Joth, I was hoping you could unpack the opportunity you're seeing in Southern California a bit more and why you think you're seeing such a strong consumer response relative to what you might have previously expected.

Joth Ricci -- President and Chief Executive Officer

Yes. As we've -- over the last years, as we've made that move into Southern California, it's -- some of it is just a people equation. And the fact is that the density of people and the opportunities in that market, as we looked at it, we just -- as we've launched in Texas and got into some bigger markets and have seen success in places like Phoenix, in Sacramento, and Denver with our larger cities, we just felt like the opportunity in Southern California was tremendous. Our plan is to stay in the suburbs of the major markets.

Our plan is to not to go into Los Angeles or San Diego proper but to stay in the outer skirts of those counties. We opened in really in Riverside County and in Palm Springs to begin with and have now started to kind of trickle in more, including some development that we have in San Diego County in the second quarter. So I believe in our modeling, when we launched the IPO, we said that California was about 30% developed, considering what we felt like the total opportunity was in that state. So while we have a very well-developed market in Sacramento and continuing to grow new stores as our franchisees in that market, we think that the Southern California opportunity really will make up the bulk of that 70% that was untapped in the state of California.

Chris OCull -- Stifel Financial Corp. -- Analyst

OK. And then I was hoping you could also provide any -- or talk about any initiatives you might -- you guys might be working on this year to improve drive-thru speed of service just to help reduce the number of look and leaves.

Joth Ricci -- President and Chief Executive Officer

Yes. Well, now that we have a shop in Tennessee, that hits home. But the No. 1 thing we can do is improve drive-thru speed and service.

But we want to be careful about putting our people on a clock because we think that we want people to serve speed with quality, not get too quick and make mistakes. And so what we're doing, we believe the app and the continued growth of the app and the encouragement of the app, we think part of why our Broistas are the No. 1 salespeople for the app and having customers convert is it does improve speed. It's the No.

1 way for people to improve speed in our lines is to continue the use of that app because it removes the friction and the line to do that. The second thing is we just continue to focus on our managers with our teams to have very efficient service. And some of that is art, not science, right? So we have to be careful that we don't upset a customer who does want to talk to one of our employees who has built a great relationship with them. We don't want to rush them through because we're trying to quicken the line, so as to find dynamic between taking care of people and improving our speed.

But I think with the constant attention of our leadership in the field and field operations, that will help. The last thing is as we build our infill model, we will continue to relieve pressure off of some of our larger locations and make sure that we're balancing volume. As Charlie mentioned, we've got 4 locations now in the College Station market. And the pressure relieved from number one is really helping us balance the volume across the market, which also helps improve speed and improves our customer service.

Chris OCull -- Stifel Financial Corp. -- Analyst

That's helpful. And Charlie, can you remind me, what kind of cannibalization measure are you looking for this year as you backfill some of these markets?

Charlie Jemley -- Chief Financial Officer

So about 100 basis points of sales transfer is what the drag is on total comp. If you look at what happened to us in the fourth quarter, we had about 140 basis points. We went very fast and infill very quickly. And we're kind of siphoning off 10% to 15% when we hit a store just to give you a relative level of understanding on that.

And that's back to Joth's comments is the most important thing is we can infill, relieve pressure and create opportunities for the stores to grow more effectively.

Chris OCull -- Stifel Financial Corp. -- Analyst

That's helpful. I'm looking forward to you guys infilling Nashville.

Charlie Jemley -- Chief Financial Officer

We're going as fast as we can.

Chris OCull -- Stifel Financial Corp. -- Analyst

Thanks, Charlie.

Operator

We have next question from the line of Sharon Zackfia with William Blair. Please go ahead.

Sharon Zackfia -- William Blair -- Analyst

Hi. Good afternoon. I guess a question about new markets. As you are building out these new markets, I'm getting all choked up here.

I need water or coffee. Are you -- what are you learning about how loyalty, the digital loyalty program ramps in new markets, and how to best build awareness? And then Charlie, on the discount side of the equation, I know you'll have some residual, of course, in the first quarter, given the timing of the lapping last year or the initiation last year. Can you kind of quantify how much discount impact do you expect in the first quarter?

Charlie Jemley -- Chief Financial Officer

I think the positive lap is about 100 to 150 basis points, if I recollect that on the discount rate. So from a little higher elevated rate in Quarter 1 of 2021 to where our run rate is right now, roughly. I think that's the number. So that was the second part of your question.

Joth Ricci -- President and Chief Executive Officer

So the benefit of our new markets is that we're opening our stands now with the app being not -- to our new customers, that's just part of the program. And so --

Charlie Jemley -- Chief Financial Officer

QR code on the cup.

Joth Ricci -- President and Chief Executive Officer

QR codes on the cup, our Broistas encouraging use of it, downloads of the app before you even make your first visit, so on and so forth. How that compares to comp stores, I don't know the answer to that, something we can certainly find out and I think that's a good question. But intuitively, I will tell you that the app has been very positive for us as we've executed our new plan. And I do think it's a result of why the shops that we've opened in the last year with the app in place have done so well.

Operator

Sharon, do you have any further questions?

Sharon Zackfia -- William Blair -- Analyst

Sorry, I would probably choke if I ask any more so I will end it there. Thanks.

Joth Ricci -- President and Chief Executive Officer

Thanks, Sharon.

Operator

We have next question from the line of Joshua Long with Piper Sandler. Please go ahead.

Joshua Long -- Piper Sandler -- Analyst

Great. Thanks for taking the question. Perhaps following up on that last point. When we think about the opportunity around throughput or just the overall operational efficiency by driving that digital tender mix higher, curious if you might be able to share any of the experiences or learnings you have for those stores where perhaps they're indexing or over-indexing ahead of the system.

I think you mentioned in 4Q that was about 60% of tender was to that [Inaudible] stores that you've seen that mix skew higher and just what you've seen worked or how you might think about that translating to the rest of the system as that piece of the

Joth Ricci -- President and Chief Executive Officer

So if a higher percent of sales is coming from Rewards members in one shop relative to another, I mean, you've seen -- I see, when I look at some of the data, upwards of 70% or so of tender coming in some shops, the higher uptake shops for rewards, sometimes as low as 50%, not enough -- really not enough data to figure out whether that's affecting comp or not at this stage. Certainly, something, as we click down on this a little further, is back to micro-targeting. Where do we have the best uptake on rewards as a percent of tender and where do we have the least good uptake and how do we target that and try to get that higher in the lower ones because we know that creates a lot more attachment. So we're in the early innings, as we said.

We've done a lot of testing. We can do click-downs. We'll look at this a lot closer and there's a lot of opportunities.

Joshua Long -- Piper Sandler -- Analyst

And then just as a follow-up, thinking about the commentary around moving into some new markets or at least in the first half of the year, having some of those stores being more focused on going into new markets. Just curious, how do you think about scaling? And I'm sure the answer varies across markets, but any sort of high-level commentary you can verify in terms of [Inaudible] to see that hitting that threshold in terms of either awareness or the initial stages of gaining scale in the market in terms of the number of units?

Joth Ricci -- President and Chief Executive Officer

Well, I think it's a great question. I think as we've talked, we've kind of got this three-pronged approach, right? So we need to -- we're going into new markets. I think that our entry into newer markets this year will be less than last year because we had so many new entries last year that we're now going to be doing things like we did in College Station, where we're opening shop number two, number three, and number four, and now filling in markets, places like Lubbock, Texas and Nashville and Kansas City in Houston and Dallas, like a lot of work will be done on infilling those areas. We have a lot of legacy markets like opportunities where we can relieve pressure from existing businesses that have been around for a long time in places like Sacramento and Phoenix specifically where we can really offload maybe some higher-volume stores and start to balance volume out.

And then we still have plenty of new opportunities as we look east where we'll be opening up brand-new markets. So it's kind of a -- it's hard to answer that 1 way because we're really kind of running three different business models very effectively. And a lot of it will be determined by like what opens when and how that affects that plus people that are really moving into those new opportunities or taking on more of an existing opportunity. So I know it's a wordy answer, but there's a lot of factors that go into that.

Joshua Long -- Piper Sandler -- Analyst

Understood. Appreciate the color. Thanks so much.

Joth Ricci -- President and Chief Executive Officer

Thank you. Well, with that, everyone, we want to thank you for your questions. Thank you for your time. Thank you for your continued interest in Dutch Bros.

We are very excited about where we're headed in 2022 and beyond, and we want to thank everybody for their support, not just of our calls and the things that we do but also of our people every day in the stand. So thank you very much. We appreciate you and have an amazing day.

Operator

[Operator signoff]

Duration: 73 minutes

Call participants:

Paddy Warren -- Director of Investor Relations and Corporate Development

Joth Ricci -- President and Chief Executive Officer

Charlie Jemley -- Chief Financial Officer

John Ivankoe -- J.P. Morgan -- Analyst

Sara Senatore -- Bank of America Merrill Lynch -- Analyst

Andy Barish -- Jefferies -- Analyst

David Tarantino -- Baird -- Analyst

Jeffrey Bernstein -- Barclays -- Analyst

Andrew Charles -- Cowen and Company -- Analyst

Chris OCull -- Stifel Financial Corp. -- Analyst

Sharon Zackfia -- William Blair -- Analyst

Joshua Long -- Piper Sandler -- Analyst

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