David Gordon: Sure. Without getting into too much detail, I can tell you that our early results certainly see some incremental visits and see some new guest visits. So we find that to be very promising. We have a high email opt-in rate, well above 90% for those guests that are engaging with the program. We see our NPS scores for guests that are in the program being even better than our already highest NPS scores that we’ve seen historically. So everything about the program thus far seems to be trending in a very, very positive fashion and we’re excited to be able to share more once we decide to do that in the coming quarters.
Jon Tower: Got it. And then just last one for me, maybe, Matt, you can touch on what was going on with G&A in the quarter. I think you had guided at the higher end of the range of $58 million and it came in closer to $60 million. What might hit that during the period?
Matt Clark: Yes, really, Jon, it’s Matt, we had some legal settlement. There’s about half of that delta and then there’s a little bit of timing. I think we’re going to be fine for the year. We’ll make that back up. But just a few things that came in that we anticipated at different periods during the year. So it was really non-core spending.
Operator: Our next question comes from Jeffrey Bernstein with Barclays.
Jeffrey Bernstein: First question is on the unit growth outlook. It’s great to hear that you did 5 in the first quarter, 5 in the second hopefully and pretty steady in the back half. That’s quite an anomaly. I was just wondering, as you think about going into next year and not looking for guidance per se but would you expect that you could accelerate the number of openings next year? And if so which brand do you see having the strongest demand now that you have more of a portfolio to choose from, just wondering which brand you see as having the greatest upside as we think going into next year?
David Gordon: This is David again. Well, we’re certainly not going to get too far over our skis and talk about how many we might have for next year but I think what’s most important is that whether it’s North Italia, Flower Child or Cheesecake Factory, the demand for those concepts from landlords remains very, very high. So we’re still getting a site real estate opportunities and we have enough brands, including culinary dropout to be able to fit the needs of those landlords everywhere from 3,500 square feet all the way up to 10,000 square feet. So that’s why we have such a positive outlook on the potential for next year and certainly still feel pretty good about our unit growth target of 7% annual unit growth.
Jeffrey Bernstein: Understood. And then just, Matt, you gave that low single digit, I think, the mid-single digit blended inflation for the full year. Just wondering if you can share specifically on the first quarter and the second quarter for both commodities and labor, just kind of where that settles out or where you’re expecting it to settle out within that broad range that you gave for the full year and the pricing, I guess, to offset that?
Matt Clark: Yes, sure, Jeff. So first quarter the commodities were like 0 to 1 and labor was around the mid 4s. And I would say commodities for the second quarter, probably 1-ish. So just maybe a 0.5% more, something like that. I mean, it’s obviously a little bit of illusion of precision here. And I would say labor is probably in the 4 to 5 range as well.
Jeffrey Bernstein: And the pricing that you’d expect.
Matt Clark: So we’re going to run probably about 4-ish.
Operator: Your next question comes from Brian Harbour with Morgan Stanley.
Brian Harbour: Matt, on kind of 4-wall margins, you had nice year-over-year improvement, right? Kind of in excess of, I think, what you’d previously hoped for, for this year. And it sounds like some of what you’re seeing are structural drivers that could be sticky. Do you think that could continue in incoming quarters, maybe commodities pick up a bit but what are some of the puts and takes on 4-wall margins, just bigger picture?
Matt Clark: Yes. I mean, I think a lot of it is structural. Certainly, we fully caught up with pricing last year and so you’re seeing some of that just benefit like cost of sales where the commodities have normalized and it’s lapping. But a lot of it is operational execution, the stability of the labor force really driving productivity and flow-through in the 4 walls. And that certainly should be sticky. You know, I think our outlook expects that we will continue to have year-over-year margin gains throughout the balance of this year.
Brian Harbour: And how much did it kind of differ by brand? Did you see more of a swing for some of the non-Cheesecake brands, are some of those kind of starting to perform better or how should we think about brand mix in that?
Matt Clark: I think it was pretty consistent to our expectations where we saw just everywhere a little bit better, right. You know, certainly Cheesecake is 75% to 80% of the business and so that’s the single biggest driver. And those margins provide the most incremental dollars. But as David Gordon mentioned, Flower Child had very strong sales and delivered great margins in the quarter too. So, we’re pretty pleased with the whole portfolio at this point.
Operator: Our next question comes from Lauren Silberman with Deutsche Bank.
Lauren Silberman: And congrats on the quarter. Can you talk about whether you’re seeing any differences across regions? And then specific to California, a lot of the restaurant industry raised prices in response to the wage rate, are you seeing any benefits from that or incremental pressure in the market at all?
Matt Clark: Lauren, this is Matt. I mean, I don’t think we’ve seen very big differences geographically other than the weather because that can certainly impact sectors for temporary but it’s pretty consistent. In California specifically, I don’t think we’ve noticed a real difference. Again, I think as David Gordon mentioned, it’s pretty early, so we’ll see if that plays out. But generally speaking, I think business has been pretty consistent and predictable.
Lauren Silberman: And then on just the North Italia margins, how are you feeling about the path to close the margin gap to Cheesecake?
Matt Clark: Sure. Yes, I think we feel good about that. You know, if you kind of look at where it’s at, it doesn’t always sync up quarter-to-quarter because the pricing actions are different between the brands. And so, sometimes it can just be off a little bit. And certainly, on the total margin, we basically had 4 brand new restaurants in the quarter, 2 from really late in December and 2 that we opened. And so, as we’ve always said, the gap from the mature to the total with North can be 3% or 4% different just based on the cadence of the openings. So we feel like it’s basically right on track and normalizes over the course of a full year.
Operator: Our next question comes from Dennis Geiger with UBS.
