Randy Garutti: Yes. Look, we’re not giving guidance for 2024 yet, Jake, other than to say you’ve heard our commitment loud and clear through this whole year and today and saying, we continue to identify opportunities starting with supply chain. We’re really talking about as kind of a total cost to serve and how can we start with the product. Look at our supply chain opportunities. We’re digging deep on that. And then look at how that flows through the restaurant in every way and see where our opportunities are. So we believe we can continue to expand margins at the restaurant level and overall in the company. And if you just take a beat for a second, I think it’s really important to do that. We increased our EBITDA margin by over 400 basis points overall in the company.
We expect some level of leverage at G&A this year. We continue to expect that that will be part of our plans moving forward. So I think just a core focus on profitability and lots of different ways we’re working to get there. We’ll keep you posted as we get into 2024 as to what that is going to look like. Again, that’s balanced against a lot of the uncertainty of the consumer. But we’ve built a lot of this infrastructure now to be going after and identifying where these opportunities lay and start to go after them one by one.
Katie Fogertey: I want to be clear here. The teams are moving together. We’re moving together very purposefully here at a lot of these opportunities, which we’ve identified through supply chain, through labor, through various other areas within our P&L to continue to drive efficiencies and help us outperform what has been a challenging backdrop for the industry with consumer spending pressures and continued inflationary pressures. So really encouraged and excited about what’s going on today, what we’ve built on and what the plans are for the go forward to help continue to improve our performance financially.
Jake Bartlett: Great, thanks. A comment or just a question on the fourth quarter guidance for companies same-store sales and the progress so far in October, last year your year-over-year compares get a little easier for the next couple of months. You did mention and then you also have the kind of the movie tie in. You mentioned a return to seasonality and I’m wondering in October and December whether there was some abnormal seasonal behavior last year. So just want to make sure I know the puts and takes in terms of how we should think of October and December this year?
Katie Fogertey: Sure.
Jake Bartlett: November and December.
Katie Fogertey: Yes. So just a reminder, our compares for the past couple of years with just a different pricing cadence than we’ve had pre-COVID are a little bit choppier. So last year we had taken kind of, we said between 7% to 9% in menu price across the system which we rolled off of. So the sequential compares on AWS on that side, we’re expecting that to return to kind of a more normal pre-COVID seasonality pattern. We did have some impact at the end of last year on our AWS from a very large number of NSOs in December. And as you know, following our company, our restaurants tend to open very strong and settle over time. We’re going to be comparing over that in December of this year. And then just another note on that side, we have a pretty solid lineup on the culinary side but just still lapping over hot ones as well.
Operator: Our next question comes from Michael Tamas with Oppenheimer. Please go ahead.
Michael Tamas: Hi, thanks. Good morning. You talked about Kiosk being over 50% of in Shack sales now. Can you talk about any cohort of units that’s above the 50% level? Is there anything different about those units versus the rest of the store base? And is that informing you about the potential upside that still exists for Kiosks and anything else you can talk about maybe margin differentials or anything? Thanks.
Katie Fogertey: So – yes. We have a large difference in Kiosk penetration for in-Shack. It’s something that we’ve been very focused on driving a narrowing of the gap and driving more guests to the Kiosk. And there’s still a lot of exciting opportunity on that front and it’s great that we have kind of most of the entire fleet now rolled out. We – it is definitely our highest margin channel. We see a nice checklist on the back of it. And we still think we’re early days here and really kind of leveraging the full potential of upsell through this digital order mode. And how that we can start to leverage guest data over the long term through that channel. What I will say is that there’s a number of variables which can impact the degree of Kiosk usage which we’re investigating and continuing to refine some of it’s just simple wayfinding and how the guest enters the Shack is that Kiosk in the best optimal place and these are easy fixes that we’ll go after over the coming quarters where we can but continuing to train and arm our teams and our managers with why this is such an important initiative and guiding our guests to that Kiosk is working and we’re excited for what that potential will be over the longer term.
Michael Tamas: Thanks. And you talked about supply chain today and trying to use that to help drive better margins going forward. So is that reference to sort of looking at longer-term contracts or can you just elaborate on how supply chain can be better utilized going forward? Thanks.
Randy Garutti: Yes. I mean, you got to start with our actual scale. As I noted earlier, I mean, less than 300 company operate shacks. We have so much opportunity just in economies of scale. It starts also with development and how we choose to cluster our shacks more closely together. We’ve got a very spread out class of restaurants over this last decade and we can begin to see opportunities in shipping and how we move freight, all of those things. But separately from that, we’re going to start to look at just backing up supply, making sure we have other suppliers more aggressive, going after some of the cost opportunities we’re going to have. And we’re digging through all of that while retaining all the premium and improving all the premium way in which we bring our food in and the quality of ingredients.
So I just think, look, this has always been a process, it’s something we’re spending a lot more time and effort on today. And I think in the coming years we’ll continue to identify opportunities where we can save on the supply chain.
Operator: Our next question comes from Andrew Charles with TD Cowen. Please go ahead.
Randy Garutti: Sorry, we can’t hear the question. Are you still there?
Operator: Mr. Charles, your turn. Your line is open.
Randy Garutti: Move on to the next question. We’ll keep that going, thanks.
Operator: Our next question comes from David Tarantino with Baird. Please go ahead.
