McDonald's (MCD) 26 Jul 222022 Q2 Earnings call transcript

Ladies and gentlemen, please stand by. Hello, and welcome to the McDonald's Second Quarter 2022 Investor Conference Call. At the request of McDonald's Corporation, this conference is being recorded.

Following today’s presentation, there will be a question-and-answer session for investors. [Operator Instructions] I would now like to turn the conference over to Mr. Officer Corporation. Relations Investor Cieplak, for McDonald's Mike

Officer, Good With are me and thank Chief President joining us. you for Financial and on Kempczinski; Chief Officer, morning, Ozan. Executive everyone, and Chris Kevin the call today

call, of our mentioned available As X-K with release as on along comments the our filing statements of on Both reconciliations our and call to website earnings today. GAAP a any apply those corresponding forward-looking measures measures. reminder, on the today's non-GAAP in financial also documents their our are

our Following your conference prepared it turn queue to and will for webcast remarks Chris. website. for to this morning, over via also is the call questions. one And we take is now, reenter Today's yourself Please recorded and limit I'll questions. being any additional being question replay

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on to business the operating Now environment.

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let numbers more turn on XXth so QX can Kevin, final Kevin? it for give and Now our he readout. to over earnings quarterly his me

for words. you kind thank and Chris, the Thanks,

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look see three-year when with has IOM and we world fact, our few around extremely the more comp both through In XX%, we our XX% years. the and at than resilient the last business that segments, our been growth US tumultuous over IDL

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UK, their all we whose the Leroy, base, We highlighting McSpicy to drink digital the built also launch And strong offers. accelerated return summer of mobile first recent partnered Loyalty. Pop our lineup value was significant with build promotion our Australia In famous and Chicken available up through Tasty helped and the calendar Kid of Sandwich customer the across the across Loyalty daily with drove proposition A featured Australian sales. of digital Star, days quarter incremental of and engagement also mobile strong Big launch app the leading sales a market exclusively a app digital dayparts. our order on promotion, McDelivery.

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led Moving positive supported US. the by breakfast. dayparts the across posted to price X% up sales average check quarter, due second comp nearly Overall increases. by were all to strategic higher in comps We

digital everyday offerings. customers We continue are looking for, focus menu affordability everyday across value that and on both our to

largely strength quarter, our markets. throughout Turning Comp both XXth limited resurgences lockdowns across of COVID for country to China achieved continued daypart in key up comps consecutive America. Latin closures were negative to driven of and quarter. with Japan strong our impressive the time the across XX% across popular due challenged and the most license and comp in sales and chicken second restaurant resulted developmental in Japan and the comp positive in cities. sales double-digit remains by the beef. channels offerings with ongoing growth sales at dinner with digital Recovery temporary the an quarter quarter This in delivery international related

now core and are it turn the targeted challenging, back Chris. menu I'll offering coupons. conditions While operating on restaurants digital And focused remained consumer, favorites to

ways, and media. we're is Kevin. mobile include opportunity that fruit. the connect McDonald's in in brands and and where with opportunities system-wide and second in bear McDonald's earth. industry-leading social allow investments global digital, better on The the recognized biggest app on Today, app, so strengthen for communities I'm over mobile six platform, top are $X even whether to can of every growth, making which of and In us X/X keep customers on connected recognition creative of and up we our our more they nearly entirely sales, and markets, is customers quarter. culture it's or represented our kiosk you, proud delivery, meet to building our around sales billion Thank one our relationships, world marketing the with or to most are. one initiatives new beginning beloved this digital digital customers of

all with of of enrollment loyalty XX XX understanding consistently our And grow. we've to XX sales a customer each personal the launch spend and messages, our our last to We're our of including By increases UK engaged with driving of each US us. in visits frequent launched. the customers feel been markets and customer ultimately iconic this the and touch. in we they also It month, participation programs who a our as have through highly haven't six create power reunite loyalty more in reward customers active Rewards have menu. nearly has visited frequency. markets, Each incremental a We million content to customers members days. and both McDonald's, in top Rewards us more while. MyMcDonald's them the our redeems and deeper Nearly to driven are continue core MyMcDonald's us we channels helps use can loyal can relevant markets, With preference of now even shares offers customers in prefer. strengthening means connected tailoring that this the engagement

strength Australia, brand the In our improvements, coffee. to launch another launch moments of campaigns, coffee coming McCafe double and driving our quarter. As strong a the markets leading of juicier even craveable our grow continue drove in customers and fresh and We'll market to these procedures keep classics, taste strong for the them latest core incremental Mac our coming for including more. enhanced the new McDonald's I've making Australiano the with for quality Mac In back we're of sales tastier burgers. by in comps and second to Big better celebration world, spins resulting in our taking and implementing yet hotter, up and and the before, buns, we keep menu the fans. Big also creating mentioned Germany, new generation quarter with was cooking in reason marketing around the burgers giving featuring in leveraged share Spain

effective multiple brand as year were on recognized awards, marketing. recognized no quarter the awards last named both And course, transformational received most brand example month, one hearts McDonald's McDonald's the and was marketing its just our repeatedly of not combining partners FE and advertising it's Effective Of simultaneously there's the classic minds. being marketing captures my and US. At opinion, industry. the while modern that number better the WARC running. swept with of Cannes for XXX that's and the the effective marketer the consensus this We for Lions relevance global most than [ph] third the

months, the Elizabeth's for the our by cultural turn we've a past history. I'm In McDonald's pedicles of It May, creative commemorated Queen version few headlines Golden Over and moments to making continued into new Lovin world Jubilee famous Arches. recording Platinum jingle,

Kevin our Australia McDonald LAROI. pop raising As $X million annual with phenom and latest campaign, mentioned, with order House Charities The launched nearly brand created for And a the famous brand sales and our Canada we moment in Day Ronald in significant McHappy process. lifting perceptions Kid

McDonald's ways. continuing has but expanded this our to drive more that not and it's excellence in creative customer recognizable, made just relevant. Our more reach is our and new exciting business connection And

Kevin. our talk more financial quarter about to to performance, Now hand back I'll second it

Chris. Thanks,

currencies. Adjusted of $X.XX, rates quarter That in currency increase hurt adjusted first related excludes call EPS to the we of constant exchange time. adjusted Russia $X.X per performance $X.XX quarter and billion was on that from as double line in for our from the the gain million of at sale share amount top a of Dynamic was XX% of EPS by dollar $XXX an strong exit Yield. earnings charges in This second the our Our quarter. significantly of earnings in estimated based strengthened the resulted

currencies G&A to restaurant reflecting our technology investments contest. quarter, constant expenses Our proxy convention in and increased and the XX% for worldwide costs in incremental related higher

rising as by expected, energy and As hampered well commodity margins were wage company-operated costs. significant as inflation

margins remainder the the impact of inflationary pressures continue Given to macroeconomic will these year. for expect we conditions,

Our up market. our sales the were contributed Russia, heavily of margin franchise income. from operating growth also Russia, XX% result margin quarter. operating XX% our company-owned company-operated $XXX healthy which cost by to of exit was constant strong dollars these the sales-driven nearly grew margins, as dollars margin quarter an impacted in and headwinds growth adjusted with which for dollars. million This a margin in a of Total system-wide flow-through make exit negatively restaurant in Even from restaurant currency, to our now for resulted

we by that $X.XX Lastly, $X.XX quarter by EPS our to roughly based estimated quarter double to year call. FX on $X.XX and on reduce EPS impact exchange to first about rates, full current $X.XX we third expect again, the

through likely we As as the saw as fluctuate this directional rates quarter, is we last certainly year. will guidance only, move

to thank it been Chris, Before I serve a It's privilege iconic of as CFO to seven take for to say pass an back want I moment this you. over to absolute brand years.

from many to During who this this people who analysts industry, had conversations are time, of our morning on I've you. thought-provoking met of many lot in with our call a I've investors follow the company.

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continue to back Thank Chris. ensure will smooth a We transition. to now to you together again. work And

Thanks, Kevin.

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first Thank Baird. David you. [Operator with is Instructions] question from Tarantino Our

Good morning. Hi.

wanted a First, on Kevin career. great I congratulate to

in those macro a of investment was And scenarios, of to I guess starting you're changes whether wanted You'll I again. comment your were specifically we the Chris, consumer about spending. you a you secondly, on consumer ask if do to you're that could then, challenges. a downturn what lot guess, business material out by see you Europe, community. planning as Thanks. might some European I see any situation you result in relatedly, be I wondering if the I and of called And know missed And pressures? then specifically lot I just behavior wondering for on to a could comment in mentioned more was if McDonald's of And

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us. well headline is very doing is, Europe So for

Europe, certainly Spain and of is I we're in area seeing market. an to is, on we're cases, sentiment in down another think attentive at a Germany another as what one sentiment weighing mind France, and market markets is example, consumer levels. is and record number consumer many as our down,

area one of So that's concern.

pricing. sentiment, beyond in needing and a from US, The impact we're Europe on the pressures the menu has on know seeing here what and standpoint also do but that elevated second an board do is, to an even inflationary what that we're are in impact that has we

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with next Morgan is Our question Stanley. from Glass John

the morning to of Thanks, maybe well. Kevin, that how to and is changing. be evidence Last ago? in factor, you pricing consumer just but bit you let is franchisees? little about coaching as now are them is And stand do Pricing maybe easier that is similar, versus in does and changing good down inflation, as me question you Where my just US, best talked view cover the been dynamics now? but early used, US what XX obviously, a congratulations about add has the on the there quarter, given trade days maybe now the -- today with the pricing My wishes to the US. conversation

hit have I'll I Kevin and then don't misses. cover top, he the anything Why this at

thanks, Yes, your it. and take comments. And for John kind David can I

will talk talking some you're that the and the Let that and of trade I the help about me down about. US drove the talk about and comp comp, what think

check. by of X, completely little under Our higher QX comp a driven was average

relatively counts were guest flat. Our

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price difference flow-through, So, and with XX% between main our driven the a X% X% if you that comp think a increase about X an little of under by things. X%, was

First, one that's the the people units decline about quarter partly per was reversion started of I things in talking by first a in driven transaction, per of a transaction. in the number

we US some recall and like order. to significant now You'll drive-through in restaurants during up. from COVID, happened the to little the shift in counter and people number what normal What back a increased channels a as seeing had around is world is, channels front open bit the delivery things but we're of also that per

So were is still to it back versus where they percentages a bit was delivery little pre-COVID. elevated drive-through pretty pre-COVID, much where but are

that exactly people knew didn't per happen down. of go would timing. We seeing So number point, at transaction know a we're some we

down. thing to customers last lesser meals. combo seeing specifically trade a offerings down other The seeing to lower trade again, mentioned is value that quarter and fewer are income and customers, some I extent, we We're and

as the company how a to then our what's because more how work we this increases, We the if kind pricing. consumer-based taking it We about and before of I've research as those consumers see to do And price frequent approach. -- as well year, about smaller, It's reacting or use on flexibility when that we're driving the franchisees So specifically able with closely gives do, on adjust necessary. be and are adviser third-party both our talked dynamics pricing. us we've a comp the are talked pricing. franchisees advises historically

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only of at versus well, right significant add many what gap. said home. to you And away The a as home now, thing Kevin from we're is, food we would I do seeing track as food

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in market where China we feel and Spain. our operate, we exceptions: are the of amongst that every value confident almost from peers other makes But major money where two just there's leading every operate, we in things that, standpoint. any is, of for One for me a market

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next Our with is Charles Andrew question Cowen. from

many you and difficult very the in a in guidance, basis, Ukraine given your just temporary segment. through is dollar and of sale as My luck that's is And, making a the think Russia tenure your what roles. on to company the segment you, you Can congrats Ian us Thank the that's help operated model? new to for successful CFO question IOM very fair Great. Kevin, just a segment on closed you. largely Kevin, a EBIT best around still embedded this pieces moving just of market and modeling

Yes. Thanks, Andrew.

comp beginning system-wide give of and me comp our revenue they second represented Russia. were of wouldn't in or quarter. They income. operating then through about first of roughly you a on about X% X% Russia be and Let X% sales, results perspective quarter in our

use be that of get to that So, if should should numbers representative hopefully, you the kind adjusted our for purposes, you that going modeling forward. of trends

Our next Palmer question with is from Evercore. David

Thanks. career your on McDonald's. Kevin, congratulations at

relatively and to for IOM about US a see to the pricing pricing year And quarter it inflation degree that, relative And through the is gap closing the I'd take value. you out you technology the benefits in the follow-up What in Thanks. about is you sense squeeze Could be be and progressing I a most couple things ready out in. for menu horizon? see the chicken teased like sense Just and then, would the in thinking your to of for love get from and operations, getting love and CRM years? about You've biggest beverage get areas the kind US? on on inflation. that might company you but with just talk the are horizon I'd and just that what's for in important to gap Chris, improvement the how larger of on could that the aside your need if I that that for more interesting. than it one IOM

Okay, Kevin. you go

Chris and to back on question. inflation I'll we'll start second the with then your go

in the it So give year-over-year well, perspective. this a about Right let let now, and food paper -- way. quarter talk second me me inflation US,

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to So, certainly hit paper. on inflation, on food point, getting the your and Europe is the harder

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dramatically that some have by oil, prices on are kind You of hit energy Russian based countries getting etcetera.

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point talk back come and at some we'll later about So that.

is Geiger from with Dennis question UBS. next Our

US congratulations and that of Great. the are bunch if so, of of thinking in scenarios. strategic Europe And, the navigating of of at for the and talked that plan Kevin, are those question. different in a if similar of looking you you Or And thinking kind about US of differences most US challenges? you navigate the you the course. to in opportunities about are team all. for some could levers how Curious Thanks some at. best the and about Chris, there you macro touch in challenges on how the mentioned luck, you're

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Our is question next from Suisse. Credit with Silberman Lauren

of whether to and in-store? the US, horizon? we to for as offer it how menu. of value promos digital A a value, where elevated I the Are $X, or you my Thank everyday Kevin, appetite might an dollar commentary. should see drinks expand the Can that's do on thinking a you. congrats. then And app. the also more echo something the think about the you're follow-up value offers guess balancing $X, challenging I in about personalization versus point array to How cost $X what's you related, franchisee environment? on be relates value you And getting you. on we your composition Thank

Yes.

value think elasticities have in here, think you products targeted a to very value, in different way. with of touched about you there geographies. So, which And different when on is are I different number you a things think about

think I more that the targeted business where us about, much we I move for ability deliver is particularly be thing to a we the and more excited digital of get that as in value. to how

waste maybe have that XX past, the value kind of would a in of go there and -- have national deliver value But you of that sort that we who people there's having to that didn't to hit So the precision under we that's lot ability a would that, everybody. know to it. scenario up would are that that back in bought end without that deal going ago, are years still probably delivering

that menu to degree this of that a pass-through pricing about. it but it Is way look it what vehicle? is menu advisers falloff at to was do? through much a looking value what able adjustment, the So, value, an part talking some doing more Kevin it with our or to seeing at push which with offer more is is, through big being then price nuanced how and So, we're being what to promo we're on nuanced is the I you through of ends without that able pricing through numbers up what exactly is we're and along US need offer, a products sort you and team, think the through it in do

think, days our a much So, of, we're one-size-fits-all targeted the pick But tailored to up these that. you is beauty I more it's I'll a kind value. approach let about because in Kevin, talk of to on value what to tough transitioning approach

have is, specifically I'd value the you about transition thing if local just demonstrate what add talking Today, daypart. national value only a was The driven about, evolution, Chris menu. primarily level, this big or is a historically, had would breakfast at to think at we

their whether or Chris personalized we have talked field as in products becomes sense allows $X have make continue that local set. but promote really So, we've approach competitive to one, it's a national local offices which markets but $X value two a approach, to more nationally with based programs, $X, individual to localized ultimately some do a that advertised $X, their a then complemented a and it's platform, on really buy get the one for We'll about. approach, moved

national the personalized. that from to in more middle really going we're evolution So to of ultimately local

Ivankoe John next question Our with from JPMorgan. is

could meet can US the to you I extent have Hi. Thank think is that staffed is to any the In in there get the that or the Thanks. system store. staffing you demand are capital while levels at the in IOM, labor do labor. properly and years unmet allow on your if investments your demand comment service. you the case, you. if customer demand? type overall you wanted back I this to of because mean, coming other reduce technology both that increasing And that's words, and are of And to for stores,

example, mean, I Sure. on how the McOpCo I I'll -- to and US an do as is use with this. if start showing Well, just way

-- over McOpCo target satisfaction. outperforming business, the of speed is US the the roster improvements if you US of seeing driving they're they that it's sizes sort our challenges, at all service ultimately customer our despite are in are business and McOpCo at Our average. And look

it to consistently sure and employer the people lot know we to that able as talk from program for So our work, that that. our US we're possible It after are a part out McOpCo us is is of business why get is to put there we of it. The the in people EVP takes not more that make do come did, but to team restaurants. it get an possible to easy. to It's into

playbook and you around the got think said, to this ensure restaurants. of for we've staffed. if not and we've restaurants got the formula those McOpCo that deployed, utility, can properly robots a do And industry. that bullet our not goes is I practical that. that, going lot investments a we is, is of like you The a great your of a need is headline and footprint. infrastructure don't majority great So example all and be in in vast that spent around interest of to from talked And headlines, lot an The for maybe there's past. your a around necessarily things, at out, have HVAC don't I've longer a what do while pencil a effort, it systems. lot it's there's of of the time, garnering automation looking this, silver money, it you economics about can standpoint? the about there term, do Thinking addresses We've idea

think technology, great the taking this of things to that you job that anytime some can reduce systems soon. help make and as that example, We've broad-based data see as the around think restaurant. just and ordering in question they not things kind solution you're a I a going There is your sure are the not which in experience solution, like example got come can restaurants. I get that advantage restaurant. labor of will around that to we're a an especially another offering You're after easier, demand collecting is do making as employer there like the all going a ultimately scheduling, customers But you're of automation the to I of see, way, the when was, our into big robots old-fashioned this said, crew and great

is question Barclays. next from Our Jeff Bernstein with

profitability retirement. Great. from more you your and a through frustrations I I franchisee McFamily Thank now, franchise Chris, last in remarks, you there's profits time closing on bigger picture just on lot seems And you relations. very moves much. considering question it mentioned ultimate in year. changes act, the a And, Kevin, the press the very franchise know had know some pressures strong mentioned and ongoing pandemic. I balancing like uptime obviously, congrats and seemingly close highs its the and performance side. at to headlines contracts to in some the on

relations? the end big you. relates COVID sense a therefore you the for China underlying ease? And just reason your get follow in as concerns that, really will COVID you a think the about franchise trying because how purely market, it think for the whether So and it's is to do suit So on concern just business? on there's of change recovery Thank is you any been fundamentals to think any there as

the for Thanks Yes. question.

with start me Let a macro at level. that

We globally. have about X,XXX franchisees

have, about underneath couple point your I the And world. hard in in when I of things. etcetera this we you franchisees of a of to constructs, the I've said, the headlines them different some talked franchisees like and that US group it's I of sizes if asking out occurred probably about franchisees about late. as one so, different of And think X,XXX get you're the about of around past, have talk question, Think, would because just

And able say for US saw, franchisees. raising who hope, standards. commitment many we want going our crew had improving it other you frankly, best if as in have best best then made way the our us they're it we to of in believe are earlier that demonstrated which about into continue to moves designed last in access that many about on, announcement system. recently, to aspiration And one that Our we or that our the become say to franchisor to ourselves of we've ways. it continue the announced the franchisees, to announcement would and get in think the franchisees. we is We to makes that which whom maybe only some people that franchise the And was things franchisees the that an our connects become working XX-plus to that then I two attract in over And people to areas, pride that, new to to McDonald's, I going in They're join put options continue team made $XXX the we're our the the have think million ensure to industry. US the best you financing we areas, years. of we absolutely the our be restaurants team that industry,

us for that franchisees. to sure the the best make everything for continuing be So, about to was are is place best we announced going that

get given only got over several the years given nice strength. the what the what that's last now, we've a supply you're earned [ph]. it's for outstrips my us of through very right where -- view You position significantly And situation our position US it's announcements it performance. And is, make a demand restaurants the in in to doing when from those our us the

get our are to of new continuing look for current ways organizations become franchisees, external buying demand, their to the on for by their our support come for looking vast current also especially to you we've they're franchisees continue ways majority If restaurants for good grow children same continue and who in system. thing. run people system At the financing into time, and our strong the want a with to got to and franchisees. That's the

from see when excited my outstrip point, restaurants for I I'm our vantage supply. the demand So,

the system exiting about written people that say, I makes business. they're they're is us at as what think that would think, of this when are of multiples the selling, doing recent to advantage memory I are strong that's is X-to-XXx business taking well. a been in, the seen health There I better anybody's on that we've they're which get of the best this. point

right table some So, multiples. incredibly off money doing people now, looking there but taking are it at at the they're

equity. you it it talking to this continue and this going to are again, have the announced, about that more we've that If around think be on but opportunity to to means excited back you're everything you have strong performing going about what and to your I'm US, a if about you're going stability step because the is grow, you're franchisee,

we're But improvement tends get can we maybe if a of we're concern raise But X,XXX is is franchisees in if franchisees, time. our great globally, our lower-performing there team, relations there would probably this stronger that one do see is that are And franchisees team concern. does the made over and some maybe great well with franchise, announcements performing improve would to know, the be the pretty I I you franchisees. our to when of does helping this to when where delighted the I broadly, strong. is the probably think business some committed I US not say franchisees, of your

your China, to related on China. then And question

couple in this . we open COVID, to believers have back but to China relatively hopefully, our something We're year. years there. starts we a China huge roughly expect think normal restaurants stops in in of and to still we're I opportunity the committed XXX and can a still big confidence get And the because economic in environment have believe opportunity lot China. there's there the still certainly business. still all with of rough had They our with of business

from Bank Sara question of next Senatore Our America. is with

congratulations two there Jill course, of their And it's and re-addition. see questions great on to about in I excellent new roles, to everyone the But you. had coming back outlook. Thank

costs labor Is an equipment The just coming the into chain, we It first range. slightly seem the issue or unit challenges growth in the a capital the in or And that given operating because function supply high. better margin, Is slightly talked previous coming are that prior. of doesn't hear the Like access Because it's about also high. we're than on you around the about higher guidance, is topline? of staffing. and multiples in historically less lower like then seeing and it US to constraints company-operated very mix? mid-XXs again, also again,

those So, minor to please? just relatively understand trying changes,

Thanks Yes. Sara.

Let at me those. both take a shot of

the unit mainly timing. come in growth it's right, due to you're On US, that's little bit. down the a

the certainly to and taking challenges still Some as this some are And but timeframes. net permitting that first longer we a bit little some it's timing areas. an the chain access expect in time in openings a is longer capital, thing. in bit It unit is some you between just taking supply just permitting finding mentioned. several a We not for little year do years, growth US are really

guidance an average. The Russia margin there's getting Russia selling know, really Russia is It as business. our margin, function the take operating backload and longer. upped after was you a that primarily bit our below all business, we a through processes announcement. making company-owned had operating government of a global On think little just I the little primarily actually right a

them taking actually margin. helped out operating by So, the improve now

help operating and So, margin that that term that improve there's still believe in leverage margin but on in near-term. help term, that should mix term, operating going not be that the in to specifically of forward. operating We G&A longer margin do longer it both is function the just a side should XXXX, gained longer

Our from Jared is with Goldman next question Sachs. Garber

the for question. Hi. Thanks taking

that consumer, lunch, in for some me. diner specific lower late know like wondering that frequency then whether program check in also now seeing you're help since US. to quantify I'm one launched the Thanks. any to call could or either year gains the or about or daypart, US on easing if Just you the we've launch -- you the if the anything the that provide And average I year effectively seeing of daypart color maybe some last income of wanted from loyalty incremental of usage across dayparts, one on to any you'd the night curious sort the know on out. launch shift past or in talked you're I side you're breakfast, the on that's two but the system. some if seeing

Kevin around in all I'll is, let day start about think, any It's address in breakfast the was then the comp, US we the that check want performing commentary about. that change. loyalty. do And across the they're and parts. great It's I fact, is we good with daypart seeing which thing, daypart performance the feel a broad-based. growth to But US strongest

a of If questions you remember, were there breakfast. bunch a few years about ago, I think

the US, performance, breakfast, both US, three-year daypart at you a saw three-year north stack a dinner, a our being years. daypart impact area our the sort standpoint. one in the XX% stack Late we we out also night significant a you last consistent and from with on incredibly of If are performance saw that zoom look that of over three lunch,

differences So the we that by that from loyalty I balance noteworthy seeing the feel good would daypart daypart. would handle we're offer I'll let you Kevin, generally, question. around probably not, say, and very any color I a about standpoint

loyalty loyalty about Yes. gone increasing are to Loyalty we check. frequency I where dynamic frequency is seeing has And interesting an in. everywhere is in frequency. driving and definite increases really mean, related

significantly check average little account on lower is see actually there. of take occur the But redemptions it If loyalty, into the redemptions a that bit frequency. driving you you because

at it's clearly you look total, into to just you an look sales. But So you a up in lower end actual additive with that. take check bit when if of at redemptions, account and because little average it check

with from question near As the for we Sandler. the Miller Regan have we more one Piper of time Nicole hour, bottom

understand is Good bit having just less you do little sense? most, said we the comes little most cohorts. can't what is times really little up that Can that you're of coming if you the conversation that -- bit matter? In does you say, that income, essentially income? lower So now or can less. much about a the morning. a such come Thank the a much. that, who How finished by Like you of they So few by so saying talk US, spends bit the cohort when less. let's impact the a income makes

going some positioning, you describe we or while offset know scores, on challenge -- winner continue the a we lower we shifting expect that's restaurants, data I down what that. value all net-net, the of to are the trade that. that for. I the have that would value be down Net-net, what to I to our on we're generally, in it, is getting Yes. impact. I XXXX, looking on be say, know at all don't within casual happening any is full-service of out of saw to XXXX is expectation That's be we degree the cohort fast think our going of question. our trade net But that is that of expect you're of there a out helping there that income, like that things getting a is beneficiary but planning precision is is going we and what

you, Chris. joining. you, Thank Have Thanks, great day. for everyone, Kevin. Thank Okay. a

Corporation's McDonald's Investor Call. concludes This

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