Jon Howie: No, go ahead.
Steve Hislop: No.
Brian Vaccaro: Just on labor cost, kind of big picture a little bit. I think for most of the post-pandemic period, you’ve been thinking that that would get into the low 30s, say, the low say, 32% or so range. And I guess the question is, are we now at the point in late 2023, where this level in the 30%, 31% range might be the new normal? Or is there still a level of hours or investment you think you need to make in that line?
Steve Hislop: Yes, I appreciate it. Going in, our lowest index in quarter is the fourth. So we probably are in that 31-plus range is what our objective probably would be. Yes, 31%, 31.5% right in there.
Operator: Our next question comes from Nick Setyan of Wedbush Securities.
Nick Setyan: As we think about comp drivers going forward, can you just maybe enumerate the comp drivers for the rest of Q4 and into ’24 as you wrap the Uber Eats rollout?
Jon Howie: Yes. I would say the two main drivers are obviously catering. Catering has been and exceeded our expectations kind of each quarter-on-quarter. So we did close to 4% last year in catering. I think we will surpass that this year in the fourth quarter. And then also our CKOs continue to drive incremental growth. Those are the two main factors as well as we’re upping our advertising spend in the fourth quarter as well.
Steve Hislop: Along also with a great time of really getting into the gift card season, obviously, through the holidays.
Nick Setyan: What do you expect the marketing expense to be in Q4?
Steve Hislop: On the year, it will break down into about 1.4% for the whole year, but I added about $300,000 into that 1.4% for the third — for the fourth quarter.
Nick Setyan: Can we see an uptick in marketing next year as well as a percentage of sales?
Steve Hislop: I’m sorry, Nick, you’re kind of breaking up a little bit. Can you say that again?
Nick Setyan: Can we see an uptick in sales as a percentage of — in marketing as a percentage of sales next year as well?
Steve Hislop: No. No. I mean, we’re still going to budget that right around that 1.5%.
Operator: Our next question comes from Tyler Prause of Stephens.
Tyler Prause: So some of your peers during this earnings season that called out a return to normalized seasonality and spending patterns reflecting maybe a similar cadence to that of pre-COVID. I would love to get your thoughts on industry trends and how that might relate to what you’re seeing in the restaurant level by income cohort as far as trade down or mixed management?
Steve Hislop: Right now, I’d say for us, our first normalized quarter, we felt was the same time last year. That’s when we felt we were starting to get back to some normalized — and throughout this year, it was very similar to the cadence that we saw in pre-COVID days. It didn’t get somewhat normal until the fourth quarter of 2022.
Tyler Prause: And as far as the G&A guidance, how should we think about that going into fiscal year ’24?
Jon Howie: Sure. Probably more right now, it’s got a little more performance-based bonus on that. What we normally try to do from a G&A perspective is we basically budget target bonus. And we look at G&A as kind of flat to the next year, just adding on about 80% of our store growth. So you can look at maybe adding about 5% on to the G&A for next year. However, with the target bonus or with the extra bonus on there, it’s probably going to be flat with what it is this year — next year. So you can kind of use the cadence that you’re seeing on a quarterly basis for G&A next year.
