Joshua Long: Great, thank you.
Operator: And thank you. And one moment for our next question and our next question comes from Jake Bartlett from Truist. Your line is now open.
Jake Bartlett: Great. Thanks for taking the questions. I wanted just to build on that, that first one that Josh had and see if I can get a little more out of you. On the trend in February specifically the commentary in February that it remained strong, so sounds like January was stronger. But that February remained, if you can contextualize how February’s done that would just, I think, help us understand the trajectory here. I think last year you had given us, in fact, what the January, you know, 2.7, I think, then it went to 7.5 last year in February. So I don’t know any more detail, any more color to help us understand the trajectory in January and February this year would be helpful.
Dave Boennighausen: Yes, sure. February remained in the high single digits which is reflected in our overall guidance for Q1, where I think it becomes a little bit more challenging Jake, as you look beyond Q1, I mean Q1 we’re very, we feel very strong with the results we’re seeing the health of the consumer. As you look at exiting Q1 into Q2, we still feel that momentum is there. But just feel it’s a little bit premature to make too many assumptions on what the economic conditions will be as you get further on through the year. But February’s growth was still in that high-single-digit range.
Jake Bartlett: Great. And I just want to make sure I understood the margin guidance for the restaurant level margin guidance. So, you expect about 210 to 210 basis points of restaurant margin expansion in ’23, 200 comes from COGS. I think if I heard right, there’s little deleverage on labor. But then you get that back in occupancy and other. Is that right? Is that, I mean did it get the right the pieces right there?
Carl Lukach: That’s fair to say, from the margin guidance perspective, we have a lot of visibility on the cost of goods sold expansion, that work that’s embedded in the guidance, because we’re in these long-term full year fixed price contracts, particularly within chicken and other proteins. So that gives us the confidence in that favourability from the COGS perspective. For the rest of the P&L, you’re right, there’s probably going to be some leverage as we think about the sales growth within the year down the P&L, particularly in occupancy. And on the labor side, we have been seeing some inflation level persist as we go into 2023. Embedded in that forecast is that that inflation does moderate, but does continue into the year. So that’s where the guidance on the labor margin as a percent of sales is relatively in line to just slightly worse to last year.
Jake Bartlett: Okay, great. And then I had a question on development. And I wanted to gauge, if you could just talk about the visibility you have in the growth in ’23. I know that continuing to separate it all others are on challenges getting stores open. So, what level of confidence do you have in that? I think the math is roughly 34 openings to get that 7.5%. Just want to kind of know, is there a buffer in there? Is there kind of a margin of error? If some of these headwinds don’t ease? And then the second part of it is just on the net unit growth part? I count by what we’re seeing, it looks like, there’s been, I think three stores closed, you’re just in the first quarter here. So if you can just level set us make sure we understand what we should thinking about for net growth in ’23?
Dave Boennighausen: Sure. So let’s, let’s go ahead and start with that second question. So actually, two restaurants have been closed, they were nearing their lease term end, thus far in 2023. The other one that you’re likely referring to, Jake is one that when there was a significant cold spell in Wisconsin, there was a water main break that ultimately that restaurant is going to be close for a couple of months in order to get it back online. So that is purely a temporary closure. So that that is one aspect, just to clarify. What we expect, as we said, is that a typical year for us, it’s going to be about 1% of our units that as they’re approaching lease end, they’ve been there for 10 years. And ultimately, we see that trade area has shifted, maybe it’s not as well positioned for the post-COVID environment, which is a little bit different or their potential relocation candidates.
That is an appropriate way to look at closures on an ongoing basis. What gives us great confidence in terms of the 7.5% guidance for this year. Even though it is a bit back loaded, where we are at from a pipeline perspective, in terms of sites that have been signed with leases or were close to lease negotiations. Construction has already started. Again, it’s about three times higher than where we were at this point in 2022. So those are deals that are already real, they’re already being worked on. And so that gives us more confidence than ever that there is a margin of error. Given the environment, what we are assuming in our guidance is that there isn’t an improvement in the overall environment, we assume that it’s going to remain challenging in terms of the delays that you’ve seen from a permitting perspective, and landlord delivery date.
So that is already incorporated into our guidance and into our overall pipeline. And as you said, we’ve already got 21 sites that are already very far along for 2024 openings, giving us even more buffers, as we look at ultimately getting to a very balanced pipeline.
Jake Bartlett: Great. I appreciate it. Thank you.
Operator: And our next question comes from Andy Barish from Jefferies. Your line is now open.
