Dan Guglielmo: Great, thank you. And then just as a follow-up to that, it’s kind of like a modeling question just around the CapEx spend. So the 7% to 8% of revenue guidance for 2024 just thinking about the expansion, I think, you had said $3 million to $6 million for some of those hubs. Is there a cadence we should be thinking about quarter-to-quarter for the year? Is it going to be pretty evenly spread throughout or should it be back weighted, just trying to get some help there. Thank you.
Josh Charlesworth : On the CapEx, I mean the hubs themselves are coming online probably a little more back weighted.
Jeremiah Ashukian: Yes.
Josh Charlesworth : The CapEx itself though phases differently, doesn’t it Jeremiah?
Jeremiah Ashukian: Yes, I mean there is a cash flow from CapEx that will happen here because we’ve spent or at least decided to deploy capital last year in an effort to [indiscernible] up and running earlier in the year. From a modeling perspective, I mean, for the most part we will follow a fairly uniform spend of CapEx throughout the year as we have in previous years. So, it’s a fairly consistent number when you think about percent of revenue that will bounce between 7% and 8% for the quarters, it will just bounce up and down between those numbers, more or less.
Dan Guglielmo: Okay, thank you.
Operator: Our next question comes from the line of Andrew Wolf with C.L. King. Please go ahead.
Andrew Wolf: Thanks. Good morning. First, I wanted to ask about the first quarter sales being below trend and tie that to the year because obviously you are looking for a big rebound to more like 6% to 8% to get to the 5% to 7% for the year, for the Q2 through Q4, a little more in line with what, I think, The Street was expecting. So could you just kind of flesh out a little bit what you’re seeing in the quarter? How much you think is pure weather? Is there anything else going on? Do you have sort of non weather impact in markets either in the U.S. or Canada or even the other segments that sort of point to sort of some more normalized growth supporting the rebound for the rest of the year?
Jeremiah Ashukian: Yes, thanks Andrew. I can take that. I think I’ll probably start off by just saying we’re actually pleased with the fact that we’ll continue to post growth in Q1 after a record Q1 in 2023 and 14 consecutive quarters of organic growth. I think the last time we didn’t grow in a quarter was during COVID and as a result of some of the UK shutdown or slowdown. Organic growth in the quarter is actually close to 3% to 6% given we’ll be lapping the discontinuation of BST. As you mentioned, like many others, we saw harsh weather in broad parts of the U.S. in January, leading to lower revenues and a softer start to the year, which also comes up against the comp of 14.4% last year, but also a couple of one offs to your point.
One at Insomnia Cookies, we have a lap against extended delivery zones that will be in our base, which provided some tailwind last year, and then two in market development. We had a one off shift in the timing of some equipment sales in our market development franchise business, which resulted in a higher sales being recognized in 1Q last year. That said, we’re excited for Valentine’s Day tomorrow, which is one of our biggest sales days of the year, not to mention other key specialty doughnut offerings over the course of the year. We’re definitely committed to discipline growth in pursuit of the full year guide that are laid out. And we will when you think about from a cadence point of view, lap some other things as we get into Q2 that may go the other way, most notably the NCR outage that we had in the U.S. in Q2, 2023, which will help us kind of recover back in Q2.
Josh Charlesworth: Yes. I’ll add is, we’re looking forward to quality, sustained growth through 2024. And Q4 showed once again that the consumer just loves our doughnuts, especially for sharing and gifting at special occasions and celebrations like Valentine’s that Jeremiah mentioned, even when priced at a premium. And we see that in all sales channels with really quite phenomenal growth recently in ecommerce in particular. So our consumer is engaging with the brand more than ever. And that’s the key backdrop to understanding Krispy Kreme.
Andrew Wolf: Okay. And if I can just add another follow-up just related also to sales. Now, I assume for the year you only have the 160 or so McDonald’s stores in there. But I guess for the U.S. specifically, is there any less of a push on sales in any way? Whether it’s not putting up stores you might have put hubs that you might have put up because you’re deferring, and is there any impact on your – what’s in the guidance because you’re kind of throttling any part of the U.S. operations back in anticipation of either McDonald’s or another QSR?
Josh Charlesworth: There’s no throttling back. It’s absolutely the case that the DFD continues to be a core driver of our growth. Indeed, as I mentioned a moment ago, the Q4 addition of Doors around the world, including the U.S. at a time which has traditionally been problematic for our customers, they want to put in other seasonal items. This year, they wanted to put in our items and prioritized listing new Doors for Krispy Kreme. So definitely no throttling back. At the same time, we are very focused on improving the quality of our operations, ensuring high quality, sustainable growth, working as I mentioned, on making moving doughnuts in continuously better ways. So that naturally means we’re very thoughtful as we grow to make sure we have the best points of access, strong hubs, making sure they’re set up for future growth.
As also mentioned, with many of the doughnut shops still heavily underutilized, they’re able to make more than twice the amount of doughnuts that they do today most of those lines getting ready for growth with QSR and other new channels is a lift. And so we’re making sure that everywhere we grow, it’s in a way that ensures high quality doughnuts presented freshly to consumer in every channel, whilst maintaining productivity and efficiency. So yes, we’re certainly working hard on the system, but we’re not as such throttling back.
Andrew Wolf: Thank you. That’s a really helpful color. I’ll pass it on. Thank you.
Josh Charlesworth: You bet. Thanks, Andrew.
Operator: I would now like to turn the call over to Josh Charlesworth for closing remarks.
Josh Charlesworth: Well, thank you, everybody. Thank you for your interest in Krispy Kreme today. And of course, thank you to all our Krispy Kremers for their hard work in 2023 and your ongoing commitment to bring joy to our customers through Krispy Kreme. Thank you.
Operator: This concludes today’s call. You may now disconnect.
