Hajime Jimmy Uba: [Foreign Language] [Interpreted] Yeah. And that visiting twice in December to get that 20% off in January, that’s only for rewards members. In fact, the improved rewards platform is what enabled us to use that — to actually do that for the first time.
Jon Tower: Got it. Thank you. And just, I know last quarter you’d also discussed the idea about communicating kind of some of the upgrades on the waitlist system and/or kind of the rolled-out cell phone ordering at the table to consumers as a potential lever. Did you guys push that during the quarter at all? And if so, what was the uptake of either?
Jeff Uttz: Yeah. In terms of the waitlist app. It’s — so guest attrition has dropped from 25% to below 20%. A very meaningful improvement. We’re very, very happy with it, and we think it’s one of the reasons that our traffic is continuing to improve. In terms of the mobile phone ordering, that is still limited to two restaurants. We’re going to start testing later this. We’re going to — the testing is complete, its feature complete. Really, I think the biggest factors that we — we’ve had some trouble figuring out exactly what to name it. When we have a button called mobile ordering or I think our guests are assuming it’s like a takeout button. And so we’re changing into smartphone ordering, which I think is a clear explanation of exactly what it can do.
And for people that are new to this, on the call, it’s — it allow –this program allows you to use your cell phone to place orders as well which doesn’t sound very exciting until you’ve been at our restaurant with a party of four or more and you’re sitting on the outside. And you can’t order from the panel and you don’t want to reach over people and grab stuff. And so we’re very excited about this especially in terms of mix. We think it’s a meaningful opportunity for side menu attachment rates to go up. And so yeah, that rollout is starting in January, and it’s going to be on a rolling basis, should be — my expectation is that it will be done in the next two quarters, hopefully, the next quarter.
Jon Tower: Got it. Thank you. And then just I guess following up on the US TAM. I know you previously talked about the idea of getting to about 300 stores, and it seems like new store productivity volumes and certainly traffic all seem to indicate that your brand is resonating particularly well with consumers, despite whatever the macro had been doing over the past 24 months and obviously prior to that as well. So I’m curious, if and when you guys think about that number, it appears dated at the moment. Do you guys have any more thoughts on where that should go over time?
Hajime Jimmy Uba: [Foreign Language] [Interpreted] Right. So it still remains a topic of discussion in terms of when we’re going to commission the new white space study. Obviously, we know that people are excited for that, and so we’re excited to share that with the street whenever we do decide to commission the white space study. We communicated many times in the past that the 300 units that we initially gave at the time, the IPO, we think is conservative, not just because it was a conservative number to begin with, but because of the market fragmentation and the sheer number of restaurant closures in the Japanese segment as a result of COVID. We think that’s fundamentally changed our opportunity in the United States. But again, as you mentioned, we’re rolling along.
We’ve got 56 units against that initial 300 and so we’re not in a rush, necessarily. We don’t see a need to see, however many hundreds of units into the future. But I don’t think anybody, certainly not anybody on this call, expects 300 to be our ceiling.
Jon Tower: Got it. Thank you for taking the questions.
Hajime Jimmy Uba: Of course. Thank you, Jon.
Operator: Thank you. Our next question comes from the line of Todd Brooks with Benchmark Company. Please proceed with your question.
Todd Brooks: Hey. Thanks for taking the question. Just a couple left here. Jeff, on the other cost line, given the success in accelerating the opening pipeline, is it safe to take the kind of Q1 level of spend and then obviously apply a low leverage as the volumes increase in the back half? But how should we be thinking about that level of spend as we go forward through the year?
Jeff Uttz: That’s exactly how you should think of it, Todd. We’re going to continue our opening pace. As you know, we raised the guidance to 12 to 14 units. So we’re going to continue to open units as quickly as we can. So we’re going to continue to see those large preopening expenses and that’s really what impacted other costs. The most throughout the quarter was the preopening expenses associated with opening restaurants. As you know, a lot of restaurant companies in the past have broken out preopening expenses as a separate line item on the financials, we’ll just look down upon now, so we don’t do that, but you can see what our preopening expenses were in our adjusted EBITDA reconciliation in the queue. So as we continue to open restaurants and we have more topline revenue to get the leverage, you’re thinking about it exactly right, it’s going to leverage a little bit, but they’re still going to remain elevated.
I wouldn’t take — think about a lot of leverage going forward necessarily this year on the preopening costs. But as we get through the year, you will get some, and again next year more, next year more. Similar to G&A really is how I’m kind of thinking about it, because unless we start opening 50 stores on time, we’re going to continue to have enough stores where that additional revenue from the stores we have opened will significantly offset that. But right now it is giving us some higher costs in the other cost line and in the labor line as well. Our preopening costs are sprinkled throughout our P&L. They’re not stuck in just one line. There — it’s in labor, it’s in occupancy, that’s another reason the occupancy was high too, nobody asked about occupancy, but we have to start booking rent expense on restaurants when we take possession of the building.
