As was the case for those who came before us who built McDonald’s into the global leader it is today, we will earn our success, and together as a system, we will lay the foundation for our future. And on Wednesday, December 6, I hope you’ll join us to hear more at our investor update as we look to the growth potential that lies ahead and share our plans for the future. It makes me excited to think about what the next 5 to 10 years will bring for McDonald’s. We believe that because we’re operating from a position of strength with a strategy that continues to deliver, we now have the opportunity, the ability and the obligation to reimagine our brand for the future. I look forward to seeing you in Chicago this December, and now I’ll hand it over to Mike for Q&A.
Operator: [Operator Instructions]
Mike Cieplak: Our first question is from John Ivankoe with JPMorgan.
John Ivankoe: Hi. Thank you very much. Obviously, value, a big focus on this call. And I wanted to ask, I guess, the focus on value in the context of recent average ticket increases for you and really across the sector, much of which driven by premiumization, customization, larger sizes, what have you, in other words, pricing increases in average ticket beyond just that of price. So as we talk about value, what does that mean to future price increases? And is there an intention to do value a particular bundled value to where the average ticket can be protected? Or would you sacrifice some average ticket in order to get future market share gains and presumably transaction gains? Thank you.
Chris Kempczinski: Yes. Thanks, John. And on value, I think it’s always a focus at McDonald’s. I mean we’re a business built on value and convenience with great-tasting food. So we’re always keen to focus on value. I think certainly given the inflation that the market has experienced, that we’ve experienced over the last year, really more than the year, we’ve tried to be very choiceful and disciplined on how we have executed those price increases. And the good news is we continue to lead on affordability. We continue to lead on value for money. We’ve seen no deterioration in our advantages there. We are holding those up. How we do it varies by market. So I wouldn’t give you a generalized statement about how we approach value.
It’s up to each individual market to think about how they continue to deliver the customer great value. But I can tell you, on every single major market that we look at, the teams are doing a great job on value. They’re delivering against it. And we’re seeing really no change at all in terms of customer acceptance pass-through on pricing, which to me is also an indication that the teams are striking the right balance.
Mike Cieplak: Next question is from David Palmer with Evercore.
David Palmer: Thanks. And thanks for the color on the marketing initiatives in the IOM countries. And it does sound like there’s a bit more focus on value, but I’d love to hear how trends might be settling out in these big IOM countries, the big five, so to speak, in the post-COVID mobility recovery world, in other words, maybe back-to-school might be a good way to look at that. As you get past the tourism boost of the summer, maybe you’re getting a sense of what type of comps we should be expecting for these IOM markets. So any color about the type of consumer environment you’re seeing in these markets, how same-store sales trends really exited the quarter would be very helpful.
Chris Kempczinski: Yes. Thanks, David. I’ll start at a high level and then hand it over to Ian to give you any more texture on that. But at a high level, we continue to be very pleased with how our IOM business is performing. We’re seeing, whether you look on the quarter, the year or a four year stack, this business is continuing to perform very well overall. We’re also seeing that there’s great execution. We’re seeing customer satisfaction scores increasing in almost all of our major IOM markets. So overall, we feel good. In Europe and, in particular, we’ve certainly seen more inflation in Europe. And so the team there has had to be probably even more laser-focused on making sure that we deliver great value. But the business overall, not seeing any big change quarter-to-quarter in terms of how it’s performing, but I’ll give it over to Ian to give you some more texture.
Ian Borden: David, yes, just maybe a couple of builds to what Chris mentioned. I mean, again, I think if you look at the comps for the quarter across IOM at 8.3%, that’s a pretty strong indication of the consistency and fundamental underlying momentum that we’ve got in the segment. We had positive traffic growth in the segment, which I think is an indication of how that momentum is, obviously, from a sales and traffic perspective. And we’re continuing to grow market share across the majority of those large markets, which tells us despite, as Chris talked to some of the different macro or consumer environments in those markets, which are obviously varied, obviously, some of those markets, there’s a fair bit of pressure. From a macro headwind or consumer headwind, we’re continuing to do well versus the landscapes around us.
I mean I think we have spoken, and you heard it in our opening remarks, around the expectation that we’re going to continue to see moderation in that top line as inflation levels continue to come down and, obviously, pricing comes down in line with that. But I think we’re in a really good spot, and I think that just speaks to how our strategic plan around Accelerating the Arches continues to resonate with consumers consistently across the business.
Mike Cieplak: Our next question is from David Tarantino with Baird.
David Tarantino: Hi. Good morning. My question is on the cost side. I think you lowered your SG&A outlook, at least as a percentage of system sales versus what you had given us last time. And I was just wondering, what changed in that outlook? Is it a matter of some of the savings and accelerating the organizations coming through or delays in investment spending? I guess any context you could give us on that front would be helpful. Thank you.
