Nick Setyan: Fair enough. And just as a follow-up, maybe just on the pricing piece, there was six points in Q1. What do we expect pricing to be in Q2?
Charley Jemley: So, approximately 6% to 7% rollover health in Q2. and then that will moderate significantly as you go to 3% and 4%.
Nick Setyan: Okay. Thank you very much.
Operator: Our next question comes from Andrew Charles of TD Cowen. Please go ahead.
Andrew Charles: Great. Thank you. Just want to start by saying congratulations to both Charley and Josh. Christine, very exciting commentary about the new store performance you’re seeing in Florida. Can you speak to what you’re seeing relative to the overall base with new store productivity? you’re curious how this has been trending recognized that you had been guiding to a flat year for new store volumes for 2024 relatively 2023. I wonder if that’s still on track and that’s still the way to think about this economics for this year.
Christine Barone: Yes. So, as we look at new shop productivity, again, we’re just getting started in Florida and with those two shops, although we’re incredibly pleased with their performance, we do still plan to open 150 to 165 shops this year. So, Florida is not going to be the lion’s share of the openings for this year. We did see new shop productivity improve in Q1 of 2024. On the back of our strong new unit openings and sales growth, we’re continuing to see some really big openings in some of our mature markets and then are pleased with the results that we’re seeing from kind of the building awareness efforts in that paid advertising.
Andrew Charles: Great. And just maybe, moving into the advertising, can you help us quantify how much more investment you’re putting into that relative to the expectations you previously had? I know it’s been an area of focus and now you’re stepping up in 2024. Thanks.
Christine Barone: Yes. So, we haven’t shared that number in particular. We do expect a small step-up in our advertising spend and we’re continuing to evaluate that though as we go throughout the year. And one of the things is we can measure that and as we’re looking more closely as what is happening to our traffic trends and our same shop sales trends from that, we are allowing ourselves kind of the ability to spend up in those areas as we see results from it.
Andrew Charles: Great. Thank you so much and best wishes, Charley.
Charley Jemley: Thank you.
Operator: The next question comes from Jeff Farmer of Gordon Haskett. Please go ahead.
Jeff Farmer: Thank you. And Charley, enjoy everything that you pursue in the future. I have a quick question and a follow-up. On the question, roughly ballpark, how many Texas shops have actually made it into the comparable store base? I think it’s roughly 15 months. And of those shops, Texas shops that are in the comp base, are they acting as a same-store sales tailwind? How are they showing up in the comp base?
Charley Jemley: Yes. We don’t disclose individual state comps. But there were 77 shops, am I correct here, Paddy, in the comp base in the first quarter for Texas, 77 out of roughly 175 there now.
Jeff Farmer: Okay. And then just on the follow-up, how are you thinking about sales transfer in coming quarters? You mentioned that it was, I think 200 basis points of headwinds, a little bit better than you thought it was going to be. How should we be thinking about sales transfer moving forward?
Charley Jemley: Yes. So, we have a range and expected range of 200 basis points to 300 basis points. You’re correct there that we said this quarter, it was in the lower end of that range. And as we go through the year, as the comp base gets bigger, the impact of sales transfer starts to moderate. So, we would expect to move towards the lower end of that range as we go throughout the year.
Jeff Farmer: All right. Thank you. Best of luck, Charley.
Charley Jemley: Thank you.
Operator: Our final question comes from Dennis Geiger of UBS. Please go ahead.
Dennis Geiger: Thanks, guys. Just wondering if you could speak to competition at all as others try to replicate your success and get into energy or other categories that you’ve gotten into. Any updated or latest thoughts on that dynamic? Is it something, where it’s maybe a benefit as marketing, advertising draws attention to the category? Any latest thoughts on that?
Christine Barone: Yes. I think that as we look across, there we’ve always been in a very competitive market. And so, we will continue to be in a competitive market. As I look at like others trying to do some of the things that we’re doing, I do think if big advertising budgets come in and share some of the things that are important to us. it very likely could be a benefit to us. I think most importantly, for us, it’s really staying very, very true to who we are, understanding why our customers are coming back to us and continuing to have beverages with us and enjoy our service is what’s super important. And I think that, at a time like this, where you do have customers, who are really thinking through how to spend their wallets, that it’s really important to stay true to what makes you incredibly successful. And for us, it absolutely is our broistas and the service they offer to our customers.
Dennis Geiger: Makes sense. Thank you, and congrats.
Christine Barone: Thank you. Thanks for your questions. In closing, I’d also like to invite everyone to join us for our 18th annual Drink One for Dane Day. On May 17th, our customers and crews will honor our co-founder, Dane Boersma, who passed away in 2009 following a battle with ALS. Drink One for Dane is one of the most meaningful days of the year for Dutch Bros. Last year, our customers, franchisees and vendors joined together to support our foundation in donating $2.5 million to the Muscular Dystrophy Association to help find a cause and cure for ALS. We look forward to continuing to make an impact in 2024 and beyond. The impact Dutch Bros is making in our communities and the lives of our broistas continues to grow. We are pleased with our results in Q1 and believe our business is in a position of strength. I want to thank all of our teams that create this exceptional performance by connecting with our customers and communities every single day. Thank you.
Operator: Thank you. Ladies and gentlemen, that concludes today’s event. Thank you for attending and you may now disconnect your lines.
