Patrick Doyle: Yeah, maybe. Sara, the only thing I’d add to that is in Q3, we’re lapping from 2022, a full quarter of loaded. So that also is something that we’re growing on top of this quarter.
Operator: Our next question comes from Chris Carril with RBC Capital Markets. Your line is open.
Chris Carril: Hi. Thanks and good morning. I wanted to follow up on Popeye’s. Maybe can you expand a bit more on the progress with easy-to-love and easy-to-run strategies and development for the brand remains strong. I think up over 11% during the quarter. So curious if you could comment on how you’re thinking about contribution by Popeyes to overall development next year and beyond? Thanks.
Josh Kobza: Yeah, Chris. So on each of those on the easy-to-run work on the kitchens, we continue to work on those pilots. So we’ve got it out in quite a number of restaurants now and we’re seeing what’s working well. We’re making tweaks to some of the things that need improvement. And we want to make sure that we get that model really locked in and have really clear benefits to show the system before we roll it out. So you’ll probably see us over the next couple of quarters adding more restaurants to those pilots, getting more franchisees involved and making sure we kind of finalize the format of that before we roll it out to the system at large next year and beyond. In terms of development, you’re right. It’s been a really big driver for us.
You know, I think, if you just step back a little bit, you know, the global chicken QSR segment is really awesome and it’s been doing great over a long period of time. You know, within the US, it’s been one of the fastest growing and largest segments. There’s a lot of players doing really well. I think chicken overall has been gaining a lot of share systematically within the US consumer’s basket of goods. So it’s a great place to be. And the same is true in international. There’s a lot of international markets where chicken is growing a lot and I think we have decades of tailwinds of growth in that segment. And fortunately we’ve got a terrific brand with the best product in that segment. And you’re seeing us grow and grow it in both of those geographies.
We’ve consistently been one of the fastest growing, you know, drive through concepts in the US. And we continue that into this year. And we’ve ramped up the international growth. You saw in the materials that we shared when we did the international visit that Popeyes is really ramped up the pace of restaurant growth in a lot of different markets around the world. And I still think we’re very early in that process, got some really big markets out there, places like India, France, China where we’ve just gotten started. But some of the initial results are really encouraging. As I mentioned, the France stores that we just got started in over the last year or so, they’re doing fantastic. Average restaurant sales are really good. And so we just need to ramp up the pace of development.
And I think that’s one of probably one of the biggest opportunities that we have as a company, as you look over the next decade, is to make Popeyes very relevant kind of leading brand in all of these geographies around the world.
Patrick Doyle: And the only thing I’d add on that is I’d point to the system-wide sales growth number for the rest of the world for Popeyes, which was 43.6% up, rolling over 43.4% up for the quarter a year ago. Plus 40s on top of plus 40s. Those numbers get really large very fast, that business is just exceptional both in the US, but particularly outside of the US in terms of the growth that it can generate.
Josh Kobza: That’s a good point. Thank you Patrick.
Patrick Doyle: Plus 40s are good.
Josh Kobza: Great. Thank you. I agree.
Patrick Doyle: That’s my headline.
Operator: We now turn to Brian Harper with Morgan Stanley. Your line is open.
Brian Harbour: Yep. Thanks. Good morning guys. Just on Tims Canada the supply chain profit dynamic. Matt, would you expect that to be similar in the fourth quarter. Any comments on that. And then also maybe just comment on franchisee profitability. There I think you said double-digit increases like in other markets. But you know what other initiatives are kind of most important for you on that front. How much more progress do you think you can make on that side?
Matt Dunnigan: Yeah. Thanks, Brian. Matt here. So just on the supply chain question. I think what we were trying to describe was the dynamic that we saw in the second half of last year between Q3 and Q4, which, you know, is creating a little bit of year-over-year volatility in that we increased prices entering the second half of last year as commodities were going up into the right. And so therefore, Q3 of last year was a bit stronger. And then you know our average cost base was higher in Q4 of last year. So where we are this year is we feel really good about the strength of the Tims business progress and traffic that we’re driving there, which is the primary driver of the supply chain business. So we still see good continued momentum there. And we expect if you sort of look through the second half, our average growth in organic gross profit for that business for the second half we think will be strong and similar to the first half of the year.
Josh Kobza: And then, Brian, just on your question in terms of franchisee profitability at Tims in Canada, we are making a lot of progress there. It starts with sales and Axle and the team have done a terrific job driving really strong same-store sales over the last few years. But this year as well, that makes the P&L get a lot better. But we’ve also been doing work on some of the other lines as well. Matt Moore and his team have been working very closely with all of our franchisees in Canada to do a lot of trainings that helped us to manage the P&L better everything from inventory clinics to a lot of focus on labor scheduling. All of those things kind of they’re small improvements, but they make a big difference on the P&L.
And on top of that, we have seen a bit of moderation in some of the cost of goods. So we’re seeing softer kind of inflation in terms of our cost of goods basket, and that certainly helps as well. So all those things are adding up to some pretty substantial progress, and we’re excited to be able to share with you kind of where we land for the full year when we share our Q4 results in February.
