Michael Skipworth: Yeah. It was a stat we’re really excited about. We obviously had an incredibly successful launch of chicken sandwich in 2022 and to be able to lap that obviously with the comp that we delivered and also acquiring more guests, new guests than we did during that time we’re pretty excited about. And we think it’s — again, we think it’s just the effectiveness of these multiple growth strategies that we’re executing against. And the continued expansion of the brand and continuing to scale awareness is obviously a big catalyst for that. And as more brands know of Wingstop and are looking for that indulgent quality occasion, which is where we think in a time when it’s tough out there where dining behaviors tend to trend we think it puts us in a really unique spot just to continue to navigate this environment different than everyone else in the industry.
Michael Tamas: Thanks. And then on the international side, you’ve slowly been ramping the number of new units you’re building each year outside the US. So should we think about that sort of stair step higher continuing to happen? Or is there anything that you see a look at that there’s going to be a meaningful step change whether it’s China or somewhere else? Thanks.
Alex Kaleida: Hey, good morning, Michael. This is Alex. Yeah. We would expect international to continue to stair step and it’s a little bit of the nature of the way we construct our development agreements. In the US, our domestic agreements tend to be three to five years smaller amount of restaurants under commitment. International, tend to be 10 years and then they start a little slower in the ramp. And then they get to a place like our UK market which is our playbook for future restaurant development, where we’re opening restaurants in the mid-teens level in its fourth or fifth year into its opening rates. And we’ve got new markets like Canada and Korea that are following that playbook. We’ve got we’re really excited about Canada just being open with four restaurants in a little over a year and their AUVs are already pacing at a level that’s near the US domestic average.
They’re building awareness. They’re starting to turn that corner just like the UK market did and ramping up. So I think we will expect over time though international as Michael mentioned on the call to be a much bigger part of our story.
Michael Tamas: Thank you.
Operator: The next question is from Peter Saleh with BTIG. Please go ahead.
Peter Saleh: Great. Thanks for taking the question. Congrats on another great quarter. I did want to come back to the conversation around the balance sheet. In this environment of higher for longer and I appreciate that we don’t know where rates are really going to go over the next 12 months. But is your intention or the message here that you’ll be more patient until rates maybe come down a little bit from the current environment to add more leverage? Or should we still expect you to move on additional leverage over the next 12 months? And then also I know your target used to be in that six, seven times. I think in the past you were closer to six times on leverage. Is that — should we think about that target to be a turn or so lower now? Or — just trying to get some clarity around your comments around the balance sheet going forward? Thank you.
Michael Skipworth: Hey Peter. I’ll start and then Alex could jump in. But I think what we are referencing is we leaned-in in our last debt refinancing to be in a position to have options and to be flexible and that’s exactly where we are. We put a lot of cash on the balance sheet providing us a lot of optionality. But we also entered into a variable funding note and the pricing at which we entered that into at the time was extremely competitive and is, quite frankly, at a better rate than I think what we can get debt at on the open market today. And so it puts us in a great spot to be flexible and to have options. And so we have plenty of cash on the balance sheet. We generate a ton of free cash flow as being — with our asset-light model.
And so I think you’ll see us continue to lean into optionality in front of us and we think we’re in a position just to continue to execute based on our current capital structure against our return of capital strategy that we’ve talked about. But that said, I don’t think anything changes from our levels of leverage and where we’re comfortable. We still think that’s a pretty healthy mark for us to be at, particularly when you think about the pace at which we delever when you combine our EBITDA growth rate which for this quarter, just to point out, was north of 30% on top of a pretty similar and strong number last year. And so that combined with our free cash flow generation allows us to delever really quickly. And so, we feel pretty comfortable about where we are today and the options we have in front of us.
Peter Saleh: Thank you. And then just real quick on the delivery partners. You have two sizable delivery partners. In the past, I think you’d indicated about an 80% or so loyalty for each individual partner with maybe 20% of the customers, kind of trading back and forth. Has anything changed as both of those delivery channels for you guys have grown? Is that still — are those still good metrics to use?
Alex Kaleida: Yes. Peter, this is — we actually with that data point you referenced was something we had hypothesized based on some research that we had done when launching Uber Eats last year. But we have not seen the cannibalization. As we mentioned on the call, we’re still growing our DoorDash business from an average weekly delivery transaction standpoint. Uber Eats is growing as well, and this is with a very low level of awareness in both marketplaces. And so there’s going to be opportunity for us to deploy some of our advertising fund investments into these channels to build awareness and that’s what we’re focused on doing coupled with the new guest acquisition that we have across all channels.
Peter Saleh: Thank you very much.
Operator: And our final question today comes from Jake Bartlett with Truist. Please go ahead.
Jake Bartlett: Great. Thanks for taking question. My first — and then, I have a follow-up. The first question is on G&A. The G&A, guidance has gone up about 15% from the initial guidance. I just want to make sure I understand, what’s driving that and really most importantly what the implication is for 2024. I assume there’s a lot of incentive comp that’s accrued is being reflected 2023 might not recur in 2024. So just if you can kind of level set us with base to grow from in ’24? Any help there would be great. And then I have a follow-up.
