Tristan Thomas-Martin: Okay, got it. Thank you. And then maybe just kind of your general thoughts on the industry in 2024 and 2025, I think you’re talking about M&A, but I think you said abating in 2024 and then dialing down in 2025, so just maybe kind of curious what the difference is there.
John Lai: Yes. So it’s our view that with respect to how hot this category this sector has been over the last several years, that it was ripe for a correction, if you will, and a reset. And we started seeing the slowdown happening just this last year and so pick a word, but we’re using abate for 2024, and when I say abate, it’s a slowdown in the number of new units coming into the market, and in 2025 a little less new units than there were in 2024. So it’s cresting, if you will. And again, I think that that is healthy because there was a lot of stuff that was being built that perhaps shouldn’t have been built, and those folks are having to run those operations for a long time.
Tristan Thomas-Martin: Awesome. Thank you.
Operator: The next question comes from Christian Carlino with JPMorgan. Please go ahead.
Christian Carlino: Hi. Good afternoon. Thanks for taking my question. Can you talk about how ticket and traffic grew in the quarter and then how you’re thinking about those components broadly in 2024?
John Lai: We’re not going to give specifics, but we will say that our ticket average is up. And you’re speaking specifically to our retail ticket, is that right, Christian?
Jedidiah Gold: I think just the business behaves just a little bit differently than a traditional retailer, where over 70% of our sales are subscription. And so really we look at it two different ways. You’ve got revenue per member multiplied obviously by the number of members that you have in the program. That’s what we collect as part of the subscription program, proven to be very resilient consistent, predictable. And then the retail side, which performs and looks a little bit more like a traditional retailer where you have average ticket and number of transactions. We really haven’t spoken or disclosed that in that level of detail. I think you can back into and then get pretty close to what the average revenue per member with the information that we’ve provided. When you look at a mix of about 55% Platinum, priced at roughly $29.99, and then 45% of our base members, which is priced at roughly $19.99, so you can back into a rough revenue per member there.
Christian Carlino: Got it. That’s helpful. And on your comments about the industry slowing unit growth this year, could you talk about how you’re thinking about just market growth generally and what you’re baking in terms of share gains for your guide? And would you expect share gains to sort of pick up relative to the past couple of years as a result of slower unit growth in the industry?
John Lai: Yes, I’ll start by saying it’s a big market out there and there’s still a lot of growth potential. We have less than 5% market share, and as the industry leader, put an asterisk next to that as a caveat, by saying, while we’re relatively large inside our industry, we’re actually quite small and our upside growth potential, we feel is tremendous. We’ve reset our vision for how many stores we believe is tangible and realistic and attainable, and that’s 1500 stores, not 1000. And so we will this year have more than 500 stores in our portfolio, which is for us a really big milestone. But in a lot of ways, we’re just getting started and it feels very early innings.
Christian Carlino: Got it. Thank you very much.
Operator: [Operator Instructions] Our next question comes from Simeon Gutman with Morgan Stanley. Please go ahead.
Simeon Gutman: Hey, good afternoon. Hey, John. The slowing expansion or the moderating expansion, any sense to quantify how much the industry was seeing new units or supply growth over the last couple of years? What that curve is moderating to in 2024, what it looks like in 2025 and beyond?
John Lai: Yes, and this is data that is hard to substantiate, but in talking to various OEMs and trying to triangulate around what we believe to be the total number of new units into the space in the U.S., and it depends on who you talk to, but kind of around the 800 store range over the last two years. And again, we’re seeing that top out and what that new rate of growth is going to look like in 2025, really hard for me to predict, but we feel pretty confident that it’s going to be less than what we saw in 2023 and 2024.
Simeon Gutman: And one clarification to the question I think John asked earlier, when you’re talking about opening in existing markets versus new markets, you said you have a lot of pipeline to go in existing, meaning if it doesn’t make sense for you to go to new markets because of just the better returns of densifying, how long can you keep opening, call it, let’s say 40 or 40 plus stores a year by sticking with existing markets?
John Lai: 10 years.
Simeon Gutman: Okay.
Jedidiah Gold: Yes. Simeon, when we’ve talked about the 1000 plus and we look at the TAM, that’s really looking at the growth within our existing markets. We don’t plan to grow exclusively in our existing markets. Over time, we’ll start developing in adjoining markets. And I think as we look at the anticipated ramp of both, we expect good ramp in both scenarios with the healthy cash-on-cash returns that we’ve seen here recently.
Simeon Gutman: If I can sneak one more in for you, Jed, the clarifications or the new guidance of the comp plus 0.5% to 2.5%, did you suggest that there’s no improvement beyond what retail is doing today? Meaning getting to that number is the math of what’s happening with Titanium rolling into that number?
Jedidiah Gold: What we saw, no improvement from what we saw in Q4.
Simeon Gutman: Okay, got it. But that second part that I mentioned is no improvement in retail, but it’s the conversion element that adds to that comp to get you there?
Jedidiah Gold: That’s correct.
Simeon Gutman: Okay, I appreciate it. Okay, great. Thanks, guys. Good luck.
Jedidiah Gold: Thank you.
Operator: This concludes our question-and-answer session. I would like to turn the conference back over to John Lai for any closing remarks.
John Lai: Thanks, operator. I’d like to conclude by saying, as a pure play car wash company, our strategy is laser focused on growing our titanium member base, opening up new stores with strength, and building the best-in-class team while driving shareholder value. And at this moment, there’s never been a more important time for us to live and breathe our culture, which is customer centric to the soul. We’re at a beautiful juncture in our growth trajectory where the challenges that others are facing will create opportunities for us to continue to scale and build a brand with enduring value. I look forward to checking back with you in our next quarterly call. Thank you, everyone for joining.
Operator: The conference is now concluded. Thank you for attending today’s presentation. You may now disconnect.
