Sara Senatore: Understood. Okay. And then the second — thank you. The second question was just on advertising. I think, a lot of times it appears that advertising spend actually kind of compounds over time. So, as I think about that as a driver, I understand that your compares maybe get a little bit more difficult. But I think you also have sort of this, I guess, virtuous cycle perhaps maybe what to characterize it. So, as you think about advertising, is it just, in each quarter, advertising drive traffic and trial, and then you kind of start from zero again? Or is that something that you would expect to see where it builds on itself over time?
Christine Barone: Yes. I do think that it could be reasonable to think through that it would build over time. I think we are also getting smarter and learning more with what the most effective channels are for us, what the most effective pacing and sequencing of that paid advertising is. And it really encourages us to make additional investments in paid advertising given the very strong results, we believe we’re seeing right now.
Sara Senatore: Got it. Okay. Thank you, and congrats, Charley. You will be missed.
Charley Jemley: Thank you.
Operator: The next question comes from David Tarantino of Baird. Please go ahead.
David Tarantino: Hi. Good afternoon. My question is on the advertising. Christine, I think you mentioned being pleased with the results you’re seeing in some of the newer markets. And I was wondering if you could just elaborate on what you’re measuring or what results you’re looking at when you make that statement. Is it the sales response or is it some sort of awareness metric? Or how are you measuring success at this point?
Christine Barone: The primary success metric that we’re looking at right now, is our same shop sales trends. We do also have detailed metrics on views and click throughs, and all of those types of things. but we — this is something that we’re excited when it shows up in our traffic and same shop sales trends.
David Tarantino: Got it. Okay. Thank you for that. And then on the rewards program, it seems like that has been a pretty big driver from a year-over-year perspective, it didn’t seem like you were doing much last year. Now, you’re doing a lot in that rewards program in terms of communication. So, I wanted to get your thoughts. You’re going to be cycling some of that initial surge coming up. I just wanted to get your thoughts on kind of what year two looks like. and how you refine that program in a way to keep this as sales driver as you think about year two year three?
Christine Barone: Yes. So, I’d say as we did the reset at the end of March of 2023. and as we moved into April and had that extra discount that we really deployed against traffic driving, we started with testing more mass offers to really almost our entire audience. As we moved through the balance of 2023, we started to be able to segment a little bit, and we were obviously learning from what was successful, what drives results, and we continue to roll to use that over time. So, I think when you think about a program like this, we are still in the relatively early innings of it, where we still have more segmentation to go. We still are building our database of what works and doesn’t work. Obviously, we’re always in an evolving consumer landscape.
and so, understanding what others are doing and how that impacts the offers that we’re doing. And we’re also building what I would say is our operational capabilities to deploy offers, even more quickly. So, we can almost slate a whole bunch of offers in a row and then decide which ones to pull as we go through a quarter. And so, a lot of that is actually still new, as we comp through that, over the first half of this year.
David Tarantino: Great. Thank you very much and best of luck, Charley.
Charley Jemley: Thank you, David.
Operator: Thank you. [Operator Instructions] Our next question comes from Jeffrey Bernstein of Barclays. Please go ahead.
Jeffrey Bernstein: Great. Thank you very much. And congrats, Charley, clearly leaving on a high note. Best of luck.
Charley Jemley: Thank you.
Jeffrey Bernstein: I had a question and then a follow-up. So, my question is just — well, it’s actually a follow-up as well. The magnitude of the traffic and ticket, I know you mentioned it was tempered in April versus what would likely have been, I’m guessing a teen exit rate in the first quarter, especially with January being pressured, I would assume, therefore February and March were above that 10% for the full quarter. As you think about that tempering in April, any sign of macro slowdown or pressure from the lower-end consumer, or do you see it all as really just compares and the outages and the lap of the rewards? Just trying to get a sense for the second quarter comp. Obviously, the quarter is almost halfway done and just because it was such a strong Q1 comp, I just want to make sure we’re all on the same page as to what we should be thinking for that second quarter comp with that low single-digit full-year guide intact. And then I had one follow-up.
Christine Barone: Yes. I think at this point, from what we see, we believe a lot of it is these internal factors that we were outlining. So, one, looking at kind of that core underlying traffic change between Q1 and Q2of 2023. So, what we’re lapping over. The other piece is, is this piece, where we had the extra promo in Q1, and then having so having the implications of that in Q2. We also had such incredibly strong demand for boba as we launched in March that despite ordering more product very quickly, we did have fairly significant outages in our shops at the end of April of boba, which we’re starting to replenish now into our shops. And so, all of those different factors are really internal factors that we believe that we’re seeing and that start to Q2.
Jeffrey Bernstein: Understood. And then my follow-up is just on the California performance. I know you mentioned that there was reference to price increases that you did or did not take in California. Just looking to clarify what exactly you guys did in California. And have you seen any change in trajectory of your performance or anything you’d note about the industry over the past five or six weeks, just because you have such a significant presence there and it is such an unusual event? Any thoughts would be great. Thank you.
Charley Jemley: So, a couple of facts there. In January, when the legislated minimum wage for all workers went up in California, we took a slight price advance. And then on April 1, when the FAST Act kicked in, we also took a price advance. That price advance was designed to keep us as close to penny profit hole as possible, not margin accretive. And then I think we are watching this very closely. It would be far too early to declare any knowledge of whether this is going to have any lasting effect on traffic at this point.
Jeffrey Bernstein: Thank you.
Operator: Our next question comes from Nick Setyan of Wedbush Securities. Please go ahead.
Nick Setyan: Thanks. And I just want to echo my congratulations for Q1 and it’s been great working with you, Charley. I do think this Q2 kind of guidance commentary and the full-year guidance is really important to touch back upon. Just given the strength of Q1, I mean, we could potentially have a negative comp for the rest of the year and still have low single-digit comps. So, to the extent possible, it would just be really helpful if you could kind of maybe incrementally clarify what you’re seeing in April and what you expect the comp to be in Q2 if possible?
Charley Jemley: Well, we won’t give you a Q2 comp. but I think it’s important to get some context. So, last year, we had a negative 2% comp in the first quarter. Last year, we had a positive 4% comp in the second quarter. So, that’s a four-point swing. This year, we had a six we mentioned a six-point price help in the quarter. That will moderate particularly as we move the balance of the year. So, you both have — you just have this pricing rollover is going down. And so, we’re just — we’re moving through an average of about a four comp we have to lap in the back three quarters of this year versus lapping a negative 2%. So, it’s — it isn’t that we have a negative or not an optimistic view of the balance of the year. It is just — it is a product of the math, when you look at it.
