Mister Car Wash (MCW) 21 Feb 242023 Q4 Earnings call transcript

Good afternoon, and welcome to Mister Car Wash's conference call to discuss financial results for the fourth quarter and fiscal year ending December 31, 2023. [Operator Instructions] Please note that this call is being recorded, and a reproduction of this call, in whole or in part, is not permitted without written authorization from the company.

Speaking from management on today's call are John Lai, Chairman and Chief Executive Officer; and Jed Gold, Chief Financial Officer. After John and Jed have made their formal remarks, we will open the call for questions.

During the conference, references to non-GAAP financial measures will be made. to these included the press at in earlier and of measures comparable release mistercarwash.com. reconciliation section today been Relations have the posted complete measures company's most to GAAP issued of A the Investor website the company's earnings

are that could materially As which conditions. advised cause company's Please statements actual to made market differ the the management's are as forward-looking comments risks current current be and significant reminder, understanding present and of today's call company's to a include made today this and industry from of expectations. the may are the on statements, subject uncertainties that only on based results call

no law choose required with update be the company XX-K and obligation updated from the regulations. statements or such filings may do to the reports Securities While in annual latest may so in review and disclaimer Commission. by contained to XX-Q Exchange other statement the unless as time the are company's forward-looking applicable these in to Please under future, time they factors

to like turn call Mr. John over now Lai. sir. Please would I to go ahead, the

Good our call. past driven our for customers. teams, QX we a overall for you in This better our results afternoon, on experience by our delivered physical earnings solid continuously focus plans and thank year, our improving and our joining services, which resulted

who and clean, a love super operators obsession car begins speedy Our consistently takes trained of delivering exceptional dry all which do. highly they team and shiny customers customer around delighting in way, our with what a of service motivated a with

stores $XX.X to grew ended EBITDA X% the X.X% with increased million. with locations. fourth we sales new quarter, the XXX year our During store Comp Adjusted line greenfield were XX in opened $XXX million. and increased and our Sales expectations. X% results to

abnormally some one also demonstrated macro Despite a [indiscernible] X% by and adjusted more but year of through a were year, Reflecting acquired challenging we these high working our to increased new high interest as was the competition, X.X%, new years, we and labor same-store UWC where on inflation, the grow tight while an forces it such and it pressures, was XXX,XXX able opened locations, adding market. X we and locations all EBITDA greenfield X.X%, by sales record members. by sales XX by rates

pleased the What revenues introduction people to will years, trade and able new is of extremely that premium rollout XXX% our to several our entire we time stores now next were we're over have our of super portfolio our schedule I'm excited plan. report most to service, membership as Titanium, about as and a nice the act we of premium Titanium. compress which line new to convert up with our tailwind ahead

promotional fruits what of will roll our from select see the of we're beginning off now Jed just more labor standpoint. a as are a We're exceeding Early-stage in markets. in to members offers expectations introductory the details our program in adoption second seeing. share about percentage rates

aspect every years, that about bring our Club focus can retail for into it's on Wash As and changed our been that's to of growth customers many member that note we has think net Unlimited primary members. business, how important our

we're Over customers retail going members trading UWC converting the months into into and X XXXX, into existing versus last Titanium to up prioritize members.

the format, task. services this to specialist now in lane we're our lanes membership Given positioning accomplish our multiple guest

accelerated the tailwind expecting a growth of offset shifting As growth we're net result of per focus, this period member. modest revenue in by more of member a

for year difficult driven consumers to abate of activity. thing XXXX and that economic Retail began XXXX the begin the across After good to explosive is in number will believe The which environment the overall XXXX. we by of a market increase volume growth, thing headwind us things years an moderate. new in been resetting, good a that weaker has in dial to market and a units was appears and for the is in competitive coming is sector, be more and when the down

pressing in a do ahead. are opportunity disciplined be a others pause, While pushing Mister we're advance play of while to in position Wash, us to The several and With the to history and best-in-class playing position opportunistic access next operator, for for way. capital steam period market being defense. long in are a offense strong others we're sheet, balance full will a years Car a opportunities our of a but great it

us, XXXX from that Express and an opportunities a and ahead approximately M&A good open to into evaluate moving we pace leadership XX country. at fortify to help continue ] us standpoint, position our and locations to Looking plan [ feels across densify right that the new

their our that to fact the a finally, very our path managers. leadership features managers which And [ of for pipeline multiyear XX% our on store started to proud accelerate we're employees an at is program, We're and and ] from amazing efficiently our of maximize development during peak throughput time created X knows ground up, has process a careers team meter organization demand. cars as an that hourly building the how to

turn, proud who, which us lost very we I say principle, scale we're sight infrastructure care journey, standards run. our our the about value care to our extraordinary will people all us the to operations of our developed and don't heights asked throughout shareholder it's over competitive thought and long and of ever the we've no guiding allowed blink that our allow to advantage, it's take When even business I have to never take end, imaginable. our who generate In that's is customers one our was people, in team about our elevate support when of

will over on Jed our I more now call commentary results. turn to to financial the provide

From in quarter on ahead range. as guidance trends team quarter side. and perspective, first to afternoon. Thank you, top line the We range, and moderated had strong well the finding were progressed, Overall, income fourth discipline managed of guidance good financial more From a primarily solid expenses and were our quarter retail EBITDA a bottom the adjusted of are sales exercised line strong a we in came our operate the quarter. opportunities the John, and adjusted half perspective, net within the comp and efficiently. in

John adoption indicated, As of driving locations now we completed nationwide. and we all and rollout are ahead focused trial our of schedule, the Titanium on across

least call, UWC initial our on of target of for was XX% noted mix earnings UWC within subscription at a As implementation. year our previous penetration

surpassed XX%. that goal already over levels running are have We Titanium and penetration

quarter. Core of net in in you store very versus sales promotional members remained quarter and XX% churn total the number we total XX.X%. of UWC outside the year-over-year On last of sales offering increased our members comparable fourth increased basis, X.X% me line fourth represented rates increased revenue stable wash UWC With run The quarter. numbers. historic performance year. fourth quarter, let the the added X.X% that through the said, and In a business net remained subscription in nearly sales, X,XXX of Titanium ranges. the with the

the remain use was record. to and quarter, XX the On continue which strong of new locations returns best very fourth in the greenfield highest be we and Greenfield a capital. quarterly opened our development side,

growth remain investments managing optimizing On and and the of focused we business, expenses the making business. the are expense development side we the to on of the long-term support

we and drive where even also less. leverage identifying to more do can are areas our efficiencies We scale with

other Excluding flat to operating basis compensation expense total percentage stock-based and expenses basis store points was points decreased points labor a XX.X%, main and basis XX.X% XX.X% and XXX to on at expense to increased sale gain were XX revenue, of to drivers loss of basis the X.X%. XX assets increased G&A operating The as chemicals year-over-year. XXX points increased and XX.X%.

little benefited staffing from and maximizing on and chemicals Breaking labor this experience. further, better a models delivering down the focused great customer throughput a

This that works of team and Other expenses sense in partially a done by period. with one increase wages. increase leases an time the strengths. in purpose additional average XX-month over an the wash compared Our fact of year hourly operating car was the offset sale-leasebacks and more increased it's have primarily rent XX store we of from the result as to expense a same our last from

compensation G&A we stock-based starting the percentage million increased last growth flat and $XX.X past million are few investments quarter, due interest $XX were years. year rate In of the $XX fourth In quarter, rates higher the from a year-over-year, interest excluding increased of and made hedge cash October expense XXXX. interest the of revenue to to leverage million. XX% rent to to our expense in as expense over expenses, expiration the

was which quarter Our net rate income the adds tax stock-based income year. GAAP from and per for year. certain EBITDA in million $XX.X XX.X% quarter versus noncore was of and fourth the quarter diluted adjusted $XX net and fourth last with last was reported compensation quarter $X.XX, up the million, were share, Adjusted operating last expenses for in EBITDA effective fourth Fourth XX.X% XX.X% fourth quarter. back X% XX.X% the margin compared quarter. adjusted respectively, year's Adjusted

the debt balance At $XX Moving the long-term and on highlights. year, were to equivalents cash outstanding million end of and flow cash some sheet million. cash was and $XXX

sale-leaseback growth sheet completed an and remains aggregate quarter self-fund the in million. to X X car balance healthy, consideration we We transactions Our fourth locations of continue expansion. wash $XX.X our and for involving

see market. demand to healthy favorable in at continue rates We the sale-leaseback

for the XXXX. factors and that a few make let outlook help some shape me Lastly, guidance initial comments our of around

expect with grow second openings opportunities XX% first where the we the have of XX estimated share. majority in approximately back-half these these we of in an densify, markets to XX% year, fortify new our to weighted market open and in be this First, the timing The half. greenfields half be existing approximately will will and

to We program trial base the to Titanium our but million particularly pricing from the help we'll also and various Wash This and year, varying year of beyond adoption relaunching particularly will the this rates, some speed last shine Club will flow-through penetration Titanium, of even of convenience members. drive Titanium X.X and drive efficacy this and customers introductory further. revenue certain of experience period. the them lift continue Unlimited be promote Club half. across across or with drive being degrees value pricing markets in our to this limits year of recognize the promotional majority a around and trial to member tested short-term Once first the in and promotions will we the markets put adoption, and Wash approximately continue Titanium Unlimited Second,

we greenfield approximately This by and member. focused openings acquisitions. on XX% Titanium and greenfield new over just with driving and year, conversion X targeting last XX UWC openings year, are new we Third, grew revenue per XX

should various to on productivity this due Fourth, position initiatives we leverage to more little, year with an less. doing to a expenses greater in be a we and G&A focus slow growth and expect even certain

changes in a industry consumers remain cautiousness any anticipating have building meaningful we across we not consolidation and the macro not Lastly, this seen initial level a of which environment. think are warrants we our year. outlook Many for challenged, the in certain yet,

list ranges release. be Full our of initial for table found in in can the today's earnings press outlook XXXX

their to for In team the closing, work Mister I like and dedication. thank would entire

in that, delivered type strong solid execution are at we came another We of We was one another happy a in that culture history. XXXX it's a a open important together to and cares long-standing with customers. call the questions. and and our and and team as to results With to our Mister. testament are for people year the team

Sandler. Our Instructions] with Keith Peter Piper from first comes [Operator question

made you I couple comments rollout. follow XXX the Titanium on wanted to around up a of

you've little that That reached mentioned you XX% So confusing. a already was bit penetration.

from driving XX% -- I wondering of earliest the limited understand pricing, you And it's some guess I stores. the pricing probably in from promo was no could then but could test benefit, first you're you help at promo TXXX penetration already stores, is if clarify. I'm that is benefit if in just you but think the us And maybe mentioned So some half. why that at secondly,

John. Yes. from to Peter, this is hear Good you.

mode. execution members to better over in -- our get we're going to going still time. we're And upgrading we're continue at So to get

thought ahead of to where at XX%. be are were we going We we

as and quite grow road a get here early the place we the to to But we're to the months We of I going promotions standpoint that progress. respect we those as promotions encourage to expect number having nice cusp in revenue enjoy, the from have tailwind just now think, put with off, frankly. down further that roll a we on are adoption,

the and just Peter, Yes, around Titanium QX. more bit in little a that color impact of

right. had You touched on it

that of with muted So our how promotional drive we because but XX% was Titanium, overall, are just some trial the right, north bit little mixing, it's pleased during impact just using a QX, amongst the overall, mixing offers of it members. of to

the a like house, side, side off back should the of good. bit the keep on we're probably of of what's that modeling observations half driven then softness Okay. any industry-wide, any QX just retail the in And can't comps? Is the weather. seem on little QX, of that? commentary retail seems maybe erratic Very the something And to It we with get with maybe in QX map. our that as mind then some

Peter. Yes,

touched right. on you it So

overall, business we've about as talked of retail susceptible prices, spending from some saw competition of the little on impact prices, bit as well. is also gas we call the discretionary we, But were bit So retail QX. time a the where the it of were on and the that side retail those of the in having the to there as of retail right, exogenous where moderation some quarter, a events, them volume, comparables the second more the QX such moderate they to some did where factors at we relative of little in to we business during just of seeing half gas side QX, is

the as QX, of country. the XXXX QX translated weather cold, year, that's the say And really to impact weather talked the how -- of we the business. just the tricky at about of we because Last throughout into on much look extreme

Overall, what year those As this comp it's it precipitation was days expecting. at was at did operate, fall we the but where when were of higher during still we it even January. of we look we January positive, than number it short looked in last year actually markets

to quarter really of So any saw. come the weather because to difficult it's just conclusions that early impact we

we XXXX, we first expect just QX for out, the the of month see stronger being the months given do how comps say would March positive quarter. I historically play typically

The Kleber with from next Justin comes question Baird.

in I in The that comp then that Titanium. from isolate And penetration got what Just where you same-store can a on uplift the those follow-up of embedding almost is sales market year outlook trending in first kind a service, you're guess, 'XX -- ago, of Titanium? the type areas?

Yes.

check efficacy drive launches -- know be to promotional. able were and don't if able launching we place where that started in to focused quite to that they then going be. performance we're and effective at frankly, to much making the up. to you're we box. profiles on the and quality be product were regional to look We the I We going or sure So weren't those we people because, from needed drive more Once got and we ways early could product more trade

RPC lift, there's regions, enjoy for going should upon. in, draw to we're I and really But think, the RPM. is, something lot RPC say, forward I to that again, not early-stage So the a going

part of of then the And second the XXXX on your guide just year X.X%. just to question, full plus X.X%

we're right, XX%. at a So plus Titanium mix, from mixing about

high To in an the way the had retail -- highlighted, the get pricing happens X.X%, plus what in moving on And towards. to get regular the then in we saw a to end quickly trends to I variable how we as you how we to markets plus that don't of guide, which we're think the quickly to sales model QX retail have the order improvement perform. there get is variable these the X.X%. John of

Got it.

then capital. balance a talked John And strong helpful. Okay. very and access sheet to That's about having

M&A question price. environment a became is available comfortable opportunity in you at the was additional in on a the if So reasonable seeing there taking around be leverage that M&A how would and you're what transformative

over because he's to respect Yes. kick the king one to sheet. leverage Jed our balance with I'm to going that

Justin. Yes,

be for? look is right, the sense, at cash when leverage what that's going you of it just When makes And free leverage think the cash, business a this use for sitting it recognize in. amount in do that asset to generated, right acquisition lot a we Xx going portfolio, good broader of that's I opportunistic comes the high we're put profile M&A. to of be now said ask we we're the to ourselves, that, the we've committed that it's and target an about going end that if Having there's fit there, strategic that's going us have really and X it's the with for to are a to at return to flow to and of greenfields. So where out lot to we lean

pro will help when that in in line forma in can year more Yes. effective can Jed, we would which our I multiple, year place. though, out X, we ratios or lower us a which leaning add, better X And will get growth, that justify

So a look certainly we opportunity, at would good it. there if wasn't take hard we a -- if

The if the think is as wash a potentially only we acquisition. equity I is asset. in And currency where the as X car scale bit where differentiator a a upside other right Mister for where on being equity the point serve serve traded this platform there synergies combination a does a publicly would of their little the seller between have and of the and saw larger theory

question with Next from comes John Heinbockel Guggenheim.

I to to pricing question with right? about on promo you with want regular Titanium, So start talked pricing, pricing. regard

then are way as pricing, roughly of without regular that's to used just good first retail not Is there of that and members for -- as densify, retail kind a way needle? can attract a move sort or being to membership. you them always retail So the use half pricing guess, that, of the feeder the think of you number right, about John, I -- is promo have guys you that? in $XX.XX, as of sort sort when part and one. settling And you of at So

Yes.

answer of the question part So first. your let second me

needed belief in and about and And would purchase with have would to a through more question. particular we moving wow apt we membership retail to someone try was then they -- be would we our that excellent that come hard service and us a So originally delivery receptive subscription-based to our plan. into then them thought actually really and first

what found was we time We've leading out tables that. was taken turned with and that because We're we on long perhaps were protracting it articulation the membership it actually actually of too now horizon. that was --

to boat dispelling new was finding inside conventional take and actually So growth. belief wisdom its this was system, own we slower of a our working which approach, in membership that it's wanted we're what our approach to that

just we're So that. doing

we settled in game it determining established more perpetuity line discount going your the the couple also pricing, and respect approaches. with But is to also can a while we're the yes, to different constantly actually the question be in part it. to want that still and shrinking know rates. types frankly, it's because piece that To do quite think we first away in lure/hook with really we're of constantly actually trying value effectively we experimenting folks And that promotional But from reassessing price capture of plan get refining, effective we haven't of and it. we a very of move achieving to how something interested same

up our now, traded And So right where of a million alluded to those the And as where have is we're members, an of terms existing embedded existing of we're untapped plans. excited potential. that our lot where you of Jed of with our into premium really in are X.X his a focus And sit. base is which lot -- today it is got really over pleased into momentum, members we in about the comments, when have trading members There's John. program. really, we've sit we percentage opening

how you're we a people we -- some from that some about And equity away do acting when Secondly, into -- it do are far coming mean the progress, impediment amount regionally, where mean look -- so at too, at about intensifying, other point couple we market? when you to with and doing how and is thinking to are significant reaching think someone we're still money still we consolidation as I see a starting a with right? of think get an need if and years participation, and from away that you here, sectors what you seems that I of others obvious we private point then that are process? raising they regionally

been going So their consolidating gotten think, with that I primarily the respect cooling folks growth wonky, a have sale-leaseback it frankly, the healthy prices ambitions. market that out years, I'm cooled really to fund the and envelope cooled aggressively financing quite ran to little pushed long over of last, and say, capital but pretty have overdue. to due and that is And to has effect, has X it's

seeing going we're down, multiples contraction opportunities So forward. in create more come as us for will and prices that

runway have go But folks that less started our than will, say, over a Folks because years. several with really have was moat, thinking respect got we the to sized that years a we ago thinner. little a different about to bit last up are whole MSAs profile you X if in to to the would enough is today" XX a think the of encroaching "Hey, AUV of getting a still the our bit we've to existing position And little competitive lot we're a that coming is pie point the to we into backyards. own seeing prevent and close get that inside where densifying footprints, have we long strong

[ Haas question Jason America. ] Next comes with Bank from of

implies anything It of to margins? terms looks you the be Can on compression basis. in margin [indiscernible] 'XX year-over-year the in some there just guidance, like math a on aware of

Yes.

little on level are you. good you listen, to part a just of create of trends all, most the It XXXX. to the a XXXX. bit and margin. in is when we done more points to rent plan first with line guide, So The for more little as look first leasebacks overall do store the where we've X at compression bit sale of Overall, in Jason, there's compression, to talk will

run the the The particularly really store XXXX, hasn't But load, in greenfields -- but of that that the XXXX is with ramped. staffing, we other had in labor it. we benefit see we that. as labor fully pronounced the as on that anniversaried the reason labor staffing model when The have offset offset full didn't we side, won't optimization piece that helping a QX of labor

bit So creating just of a labor little compression.

follow-up, and That's the environment. going less guess that it. a to helpful. to That's back locations as on of pricing competitive maybe pricing, good What I gone for side? Got clear. acquisitions. bit seeing a competitive it And competitive about you terms little easing there? of the Are in Does then thing hear pretty side? mean a competition any especially on the retail

Just carwashes? prices talking to be about clear, you're of

Yes, that's right.

seeing strategy. And a clear, landscape our talking to you pricing what competitive from Just own we're perspective? be about are

are seeing perspective? a landscape What from you competitive

Yes.

to cooled have our things think folks -- to that have speak assess think marketplace, that There own. But when kind in the bit. bulk price. I median. I environment, taking -- where consumer were kind we again, best we else's of anyone sit can't we're chosen of right were vis-a-vis it's get to I but some the this strategy And not So time at the of be competitors, our a the

I feeling is not that are of everyone some And kind And only softness. the so we're retail ones experiencing think it.

it create think the retail environment price really type increases. there's can that if softness you of So through pass where out additional there, you

that guidance a the is correction plus the clarification There of to X.X% the call, our to and plus be Jason store for rest sales X-K a correction full the went on out guide, -- X point the will of XXXX shortly. year Yes. just that with earlier X.X%. comp And

from Next question Blair. Blee William comes Phillip with

about If membership spoke throughout upward what XXXX existing ongoing focus Should migration with on the current degree? to so, decline under to You then the the membership. expect guide? shift we to

We new acquire primary that versus of is result taking customers And trying it's as member think value old growth, don't the my mentioned member's still moderate decline. opening be growth. not I going which a and guest customers and lane in growth the -- of in the upgrading We the because repositioning that just services Yes. increase to a to on those our positioned customer, is it remarks, rate. in members. see in adage that's to at existing expect focus our of going existing specialist we're same just slowdown but focus, some to We'll to net our

a And Okay. And way, there I back you you Or certain point migration focus is to there guess for another have upward then how shift I target going additions? a balance determine your you new guess certain do forward? said where member that here? is that

Yes.

mix For us, for pre-Titanium really potential. set the we targets, hard to don't is we particularly XX-XX our What at between base, former look back product to we do to If launch. or mix it's Platinum close to our want a underestimate premium was our which of in new ratio shift a premium package, enjoyed base.

growing don't Platinum but limit we and And so same, we but want bucketed ourselves. remain would and perhaps time, love Titanium to over ratio the then see that inside to

But continue this is adoption in of member be, consistently that our think, then shift. we on to going upgrades to right we're a start So reassess slowdown. the But I focus we from where early are curve sit. there, And we until so bulk to now, this we'll focus. for see going to XXXX, we

comes question Michael next from Lasser UBS. with The

[indiscernible]. rental Is the it result fair and costs, to is per the is as extended going rates, to higher is wash and business an benefit for higher of offsetting the membership up acquisition this rates, putting of profitability labor from on member a this across say [indiscernible] pressure the this higher that downward higher is industry, of the going cost sector, continue the revenue

Michael, this is John.

gist I of but got your the question. You broke up there, just I little a think bit

revenue can line then what can now. So the on goal. your you standpoint, that's That's a game. I And focused think of grow grow the from that's than line, name right your we're business if fundamental the expense you faster

the some of ticket respect we earlier across how I with lifetime do do average how things that to and and increase to experiencing, board, -- increase and look it's the the our rising our So costs value we input members. your comment, everyone's

focused we're through are deliver measure? a near-term lifetime GAAP is all want value at longer performance, you lifetime saying so on And and a this performance, while lens, to looking thing and near-term value Jed, we

Not quite.

our Club, somewhat Heinbockel's It's launching customer the a that's taking than and customer appeal be stage is what environment, offering really if a tepid pay it an value, If time you frequently we're interesting for this that second, Titanium. -- without member Unlimited is, that price-sensitive that to can up $XX to plan. base $XX.XX super their the about more while very it's And we're at really that they is that in didn't this good value to what retail, not? to fact But And our if we for great early seeing premium for us really settle if seeing even Wash holy this price trade of from launched a think super are will and willing which for or down I we're why premium at But ultimately increases super historical grail in $XX.XX, is having any on question John it. you launch. taking which in happy quality. in adopt and premium, people still for go behavior answer going more point them the to have around And Michael, are consumer about deliver it, to we this what I it's a relatively changing washed price standpoint, a offering path a base side. environment and excited

more a just And there. to bit add Yes. color little Michael,

we're a this. help bit industries are to is package unique It is optimistic to costs. going I where I think input more in that that's third pressure But first we're out because all rising of exposed rising costs. a this some roll think may place point, of John's with in be little of these offset the all, pronounced to input

all top we're ability very, in to So optimistic continue help with drive its to all, line Titanium term. very longer and the

has generate in the case? Car to to happen expansion? when so the follow-up what be expect we obvious is for margin Mister that Wash can And to order And

spot, us exact putting on Jed. he's was Boy, the an date. He

hour, minute. That's No no okay.

want I say to keep not [ I'm ] and So to this. -- Mike, here, trying

is revenue business. maximizing of order first So our

the thing, favorite line, the more right? But we're expansion said, mindful We have year. we that beautiful are do we as we half But adoption. expansion back it's right nice your that margin less That in today. to It's to We hope focused margins, goal making perhaps driving right expect over now, net experience really we our some that right very a to of a and time, profile investments margin deliver sure collective deliver. But have this of make on Michael. on XX% the incrementally top line over of focused now type show we're to time. margin

question next The with Capital comes Thomas-Martin BMO from Tristan Markets.

Or of around aggressive pricing? introductory that's the some on more competitive relaunch do Have could promos. to getting they response Titanium of the Question your XXX responding and the that think happen? been you by something

careers we better, X anything, having had a of relate if best If simplicity No. offer, it kind on good, to late to best and on dance, going to early the anything, been piece if of where X, have X-tier [ a competitors dance. programs And in we the most mindset, package to out but we -- already. we were program the side say in not ] offering erred had our the our have I'm there the not

strategies, competitive discounting that. -- last this with aggressive What and going there's but is we've from activity their there of a couple very many folks out promotional standpoint, haven't back we that we prices standpoint, that it. seen So over is a seen we're years are from launched their list the really have

Got then on thoughts your of in the and XXXX. kind general it. XXXX just industry maybe Okay. just And

and 'XX. but 'XX think talking dialing down you I think said M&A, then in in you're abating about I

kind curious there? just maybe what is the So difference of

Yes.

So it's several will, years, this hot view for and our how in correction, just a this that that sector with the was started to it respect last category if ripe the last a been happening over year. seeing slowdown we reset you has this

units we're for but XXXX abate, the -- little there XXXX, of the in were worry, And units a slowdown than using so with market. a In less number a XXXX. it's coming say I and abate pick new new into when in

built. time. because for was lot those of will. was long folks been And being you that having healthy there a those operations think to if have perhaps stuff that, cresting, And I should a that it's are is So that built run again,

from Christian question comes next JPMorgan. with Carlino The

how you components and in the XXXX? quarter Could how grew ticket and talk traffic broadly those about about in thinking you're

not We're going we our speaking ticket. that to up. give will specifically our retail Is that say you're specifics, but ticket average right? And to is

traditional just are where traditional -- XX% the just behaves bit over differently than think, I of a subscription. business retailer, a our sales I little think Christian,

really, it so And at ways. in look different X we

of by transactions. then revenue consistent, be That's the more bit traditional which resilient, little and in retail very [indiscernible], number have got side, that you you looks a and collect part obviously, we ticket of have number the where the proven and program. the average a subscription predictable You've performs to program, what as like member, per of numbers retailer

really disclosed of We that in that level spoken or haven't detail.

and think to you when that we've at what roughly roughly with XX% the then of priced about and at is I you members, $XX.XX. $XX.XX XX% priced look of provided into at close our per get back pretty can the Platinum member which revenue a average base information mix

you rough a there. can into per revenue back member So

your unit talk comments helpful. of it. about And year, about a how up slowing in, this the and would That's on in growth industry? thinking as gains Got growth you past in share of the of gains market couple terms years about And unit growth baking could for the sort expect pick of result you're share you you're generally? to guide relative just what your industry slower

it's by and out potential. start I'll still big there, of market there's saying a a lot growth Yes,

X,XXX have so the year share industry we potential, many tremendous. as But will, we caveat is lot this innings. a feel attainable us and ways, our reset we very next We growth big as while started, industry, as large it quite early we're not stores, which as for feels in than that's just relatively portfolio, believe market in saying our and vision leader, our inside to In is We've for put our realistic by and have and that we're stores of asterisk how really less small. tangible and a X,XXX milestone. a getting X% more were than actually upside stores XXX

next comes from Our Stanley. with Morgan Simeon question Gutman

the couple 'XX or curve in the moderating is expansion. that Any the quantify in it was looks expansion much like 'XX, slowing to industry the how last supply years, and to growth of sense beyond? John, what seeing moderating over new units, what

talking the on last kind is growth the data pretty to out. But what and what it's and again, to we're And really range to going OEMs is in going saw store But to into -- total me that for that look XXXX. over be And that top substantiate. rate units less talk the you is the X depends seeing to it's it who to triangulate that feel confident hard like in the years. around we XXXX what various number you, new but hard predict. of new this of we And space XXXX, than to XXX trying in around believe Yes. we be of U.S., in to

markets, about you go stores better for you XX question, versus of in sticking keep existing, a opening let's pipeline talking go XX-plus say, clarification to X because meaning to how markets opening, new long to call if markets of with you a it, I earlier. asked think just And existing in markets? existing said to of lot the new it Okay. When sense doesn't we're by have you returns year densifying, John a make can or

To XX years.

the anticipated Simeon, look our good that's We recently. at plan we've ] the in existing Over healthy we at time, scenarios look talked with the within about grow both and we'll seen X,XXX TAM, both, [ markets. when of start developing cash-on-cash to markets. the plus our existing really adjoining markets. And expect looking don't that in I at ramp exclusively growth ramp we've the think as here returns we we

sneak can rolling meaning new X.X%, that clarification with I to beyond you, is is If Titanium The more improvement did of plus number? that of comp there's into to Jed. that getting doing the no what the to retail X happening in math the you guidance what's today, suggest X.X% for number

-- no improvement What we we what saw in saw from QX.

second that in Okay. it's element to that improvement mentioned part you comp And there? adds that but I Got the -- to conversion get it. no but that is retail,

That's correct.

turn would closing for our Lai session. concludes back conference This any like the remarks. over I to question-and-answer John to

facing to been to stores is And member is a Thanks, laser-focused value. to operator. which important for this new create opening opportunities as our with had We the our never us saying value. with time live like carwash our centric to team with will build culture customer a best-in-class brand and juncture for Titanium others continue and moment, on trajectory driving the beautiful growth a the breathe pure-play scale in I'd conclude growing challenges by and soul. that shareholder us are while building to enduring strength a strategy our more base, at there's up company,

everyone, you, I call. look for next back in Thank our with quarterly forward you to checking joining.

conference for presentation. The has today's now concluded. Thank you attending

disconnect. may You now