Andrew Wolf: And to the McDonald’s franchisee relationship, I mean, what is your role? Is it more training or is it kind of getting them excited about it? And I’m sure McDonald’s is kind of, you’re collaborating with them and how you’re going to interact with the franchisees, but what is going to be Krispy Kreme’s interaction with the franchisees to help them, to help make this successful?
Josh Charlesworth: Our focus is awesome doughnuts every time, every day, delivered at the right time as agreed with the customer, perfect service level. So, we’re really focused on strengthening operations right now, talked a lot about modernizing and improving how we make and move doughnuts. And I think all our customers expect that whether it’s a McDonald’s franchisee, Walmart, Kroger, or indeed our international partners, which that’s our primary focus. That’s where our Krispy Kremers excel. I mean, obviously, it’s up to McDonald’s themselves to manage their own relationships. We trust them. We’ve got a great relationship with them, and we’ll take their guide and provide any insights to them. But do remember, it’s a very simple operations activity, which is we’re bringing fresh doughnuts already made.
They just need to be taken from the tray, put in the bag, or even a 6-count box handed over to the customer. So it should be a relatively easy activity for the McDonald’s crew and the franchisees. So the real focus is just great doughnuts.
Andrew Wolf: And if I could just ask one follow-up. I was distracted away from the call for a minute, so you might have talked about this. But could you elaborate on the big increase in the digital sales and penetration in the U.S. and the sustainability of that?
Josh Charlesworth: Well, the customers are looking, as we’ve said before, for us to provide a more convenient way to access Krispy Kreme. Number one reason why somebody still gives us that they may not purchase this recruiting, it’s just not convenient to them. And so it’s been great, both through our own app and partnering with third parties to grow the digital channel. And it’s becoming a significant channel and a big growth driver indeed. I mean, so in terms of go forward, we actually just relaunched our loyalty program, and we’re seeing tremendous response there, tremendous engagement there, energizing both existing loyalty members and new ones. So, we actually expect to drive future sales growth with that loyalty program. So digital is here to stay, in the modern world for sure. And Krispy Kreme, we’re really leveraging that.
Operator: We’ll take our next question from Dan Guglielmo at Capital One Securities.
Dan Guglielmo: The international segment has continued to perform well and now own Japan and Canada are in there. I just want to dig into the point of access mix. It seems like there are a lot more fresh shops there relative to the U.S. segment. And would you ever think about adding more fresh shops into the U.S.? It seems like the logistics and volume of doughnuts that would be delivered to McDonald’s would be similar to what you would get at a fresh shop.
Josh Charlesworth: The higher rate of fresh shops international reflects a number of local conditions, including local labor costs, the size of the big metro cities. One of the great things about the Krispy Kreme model is you can adapt to the different environment. Yes, we have a number of fresh shops in the U.S. In some of the big cities, they make sense. But with the vast opportunity of deliver fresh daily with these great national partners. We’re focusing our attention on the U.S. on what is a very capital efficient model and leveraging the excess capacity of the production hubs through these off premise DFD doors, which, remember, typically cross between 1 or maybe $3,000 to set up, if it’s one of the, more premium cabinets. So, it’s such a good capital return. We’ve got the excess capacity in the U.S. That’s our focus rather than the fresh shops.
Dan Guglielmo: And then just one more on McDonald’s. In the history of McDonald’s, do they have a partnership, like this in the past? I’m just curious if there’s a playbook you all are going off of or if it’s kind of a new playbook that you all are putting together.
Josh Charlesworth: One thing I’ve learned about Krispy Kreme is every day is a new thing. There’s so much opportunity here. And I think McDonald’s came to us, thinking about doing something different with that breakfast approach, doing something different with partner with Sweet Treats. So, I think certainly from our point of view, it still feels pioneering, but it’s a great question.
Operator: [Operator Instructions] And at this time there are no further questions. And that concludes our Q&A session. I will now turn the conference back over to Josh Charlesworth for closing remarks.
Josh Charlesworth: Well, thank you everybody. Thanks for your interest in Krispy Kreme today. And of course, thank you to all of our Krispy Kremers for your ongoing commitment to bring joy to our customers, through Krispy Kreme. Have a good day. Take care.
Operator: This concludes today’s conference call. Thank you for your participation. You may now disconnect.
