Q4 2024 Pizza Pizza Royalty Corp Earnings Call
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Ladies and gentlemen.
Operator: Ladies and gentlemen, thank you for standing by and welcome to the Pizza Pizza Royalty Corps earnings call for the fourth quarter of 2024. During the presentation, all participants will be in a listen-only mode. After this speaker's remark.
Thank you for standing by.
And welcome to the Pizza Pizza royalty Corp earnings call for the fourth quarter of 2024.
During the presentation, all participants will be in a listen only mode.
After the Speakers' remarks, there will be a question and answer session.
Operator: There will be a question and answer session. If you would like to ask a question during this time, simply press star 1 on your telephone key.
If you would like to ask a question. During this time simply press star one on your telephone keypad.
Operator: As a reminder, this conference is being recorded on March 31st, 2025.
As a reminder, this conference is being recorded on March 31st 2025.
Christine DeSelva: I will now turn the call over to Christine DeSelva, CFO, please go ahead. Thank you everyone and welcome to Pizza Pizza Royalty Corp's earnings call for the fourth quarter, ended December 31st, 2024.
Speaker Change: I will now turn the call over to Christine to Silva CFO. Please go ahead.
Speaker Change: Thank you everyone and welcome to Pizza Pizza Royalty Corp, 's earnings call for the fourth quarter ended December 31st 2024.
Christine DeSelva: Joining me on the call today is Pizza Pizza Limited's Chief Executive Officer, Paul Gaudreau.
Paul: Joining me on the call today is pizza Pizza limits, Chief Executive Officer, Paul got it.
Christine DeSelva: Just a quick note, our discussion today will contain forward-looking statements that may involve risks related to future events. Actual events may differ materially from the projections discussed today. All forward-looking statements should be considered in conjunction with the cautionary language in our earnings press release and the risk factors included in our annual information.
Paul: Just a quick note our discussion today will contain forward looking statements that may involve risks relating to future events.
Paul: Actual events may differ materially from the projections discussed today.
Paul: All forward looking statements should be considered in conjunction with the cautionary language in our earnings press release and the risk factors included in our annual information form.
Paul: Please refer to our earnings press release, and the MD&A in the Investor Relations section of our website for a reconciliation of non <unk> measures as mentioned on this call.
Christine DeSelva: Please refer to our earnings press release and the MD&A in the investor relations section of our website for a reconciliation of non-IFRS measures mentioned on this call.
Christine DeSelva: As a reminder, analysts are welcome to ask questions after the prepared remarks. Portfolio managers, media, and shareholders can contact us after the call.
Paul: As a reminder, analysts are welcome to ask questions. After the prepared remarks portfolio manager of media and shareholder can contact us after the call.
Paul Gaudreau: With that I'd like to turn the call over to Paul Goddard to provide a business Thank you, Christine, and good afternoon, everyone. Thanks for joining us. Today I will discuss our Q4 results and provide a brief outlook on 2025.
Paul: With that I'd like to turn the call over to Paul got it right for the business update.
Paul: Okay.
Paul: Thank you Christine and good afternoon, everyone. Thanks for joining us.
Paul: Today, I will discuss our Q4 results and provide a brief outlook on 2025.
Paul Gaudreau: Christine will then summarize our key financial highlights before the Q&A at the end of our remarks. Proud of what our brands accomplished this past year. Despite industry-wide challenges, we achieved remarkable milestones in our network growth with the opening of 48 new restaurants across Canada. In fact, we now have a restaurant in every Canadian province. Moreover, when we include our Mexican restaurants, we have surpassed 800 locations, so we're very proud of that.
Paul: Kristina will then summarize our key financial highlights before the Q&A at the end of our remarks.
Paul: Yeah.
Paul: Proud of what our brand is accomplished this past year. Despite industry wide challenges, we achieved remarkable milestones in our network growth with the opening of 48, new restaurants across Canada.
Paul: We now have a restaurant in every Canadian province.
Paul: Moreover, when we include our Mexican restaurants, we have surpassed 800 locations. So we're very proud of that.
Paul: However, 2024 was not without its challenges we continued to experience headwinds as we navigated ongoing reduced consumer spending and its impact on foodservice, particularly on our delivery channels.
Paul Gaudreau: However, 2024 was not without its challenges. We continued to experience headwinds as we navigated ongoing reduced consumer spending and its impact on food service, particularly on our delivery channels. Additionally, in Q4, our marketing plans were impacted by the Canada post-strike as our holiday flyers did not reach our customers as initially planned. As we closed out 2024, our grounds reported a combined 3.9% St. George sales decline in the fourth quarter, with pizza restaurants reporting a 4.3% decline after two prior years of strong growth, and Pizza 73 restaurants reporting a sales decline, small decline of 0.7%. So for the year Pizza Pizza Restaurants reported a sales decline of 3.8%, while Pizza 73 reported positive sales growth of 2.3%.
Paul: Additionally, in Q4, our marketing clients were impacted by the Canada Post strike is our holiday fliers did not reach our customers as initially planned.
Paul: As we closed FY 'twenty for our brands reported a combined three 9% same store sales decline in the fourth quarter with this pizza restaurants reporting a four 3% decline after true to prior years of strong growth and pizza 73, restaurants reporting a sales decline small kind of 0.7%.
Paul: So for the year is pizza restaurants reported same store sales decline of three 8% to 73 reported positive sales growth of two 3%.
Paul: Both brands saw a decline in traffic mainly on the delivery side business as a result of heightened competition and pressures on consumer spending.
Paul Gaudreau: Both brands saw a decline in traffic, mainly on the delivery side of the business, as a result of heightened competition and pressures on consumer spending. In terms of average check, Pizza 73 had an increase in the average check.
Paul: In terms of average check it speaks as Jeff was flat roughly to 73% had an increase in average check.
Paul: While we recognize we still have work to do we see many opportunities ahead, our sales recovery strategy for 2025, we will leverage our brand strength and strong everyday value leadership position by a core product propositions and ongoing menu innovation convenient restaurants, and superb customer experience, including the digital experience.
Paul Gaudreau: While we recognize we still have work to do, we see many opportunities ahead. Our sales recovery strategy for 2025 will leverage our brand's strength and strong everyday value leadership position, backed by our core product propositions and ongoing menu innovation, convenient restaurants, and superb customer experience, including the digital experience. So speaking to a few specific areas, first is our focus on value. As we discussed in our last call, the QSR food service category is highly competitive and the heightened level of discounting continues in the quarter. We need to ensure we can attract customers, but we have to find the fine balance between value pricing and also ensuring the profitability of our restaurant owner operators.
Paul: So speaking to a few specific areas first is our focus on value.
Paul: As we discussed in our last call. The U S. Our foodservice category is highly competitive and a heightened level of discounting continued in the quarter.
Paul: We need to ensure we can attract customers. So we have to find that fine Dallas attaining value pricing and also ensuring the profitability of our restaurant owner operators.
Paul: In the fourth quarter, we continued our focus on providing value to our customers as they look to gain share with consumers GSR set.
Paul Gaudreau: In the fourth quarter, we continued our focus of promoting value to our customers as we look to gain share of consumers' QSR spend. Beyond our always on value messages, in the fourth quarter, Pizza Pizza launched a new promotion to ensure we are delivering to our customers craving for value. Our Slice the Price campaign offered customers a large pizza with four toppings at an industry leading $13.99 price point. We also continue to aggressively promote our Pizza and Wings combo offering incredible value at a $19.99 price point. And at Pizza 73, as we've mentioned on previous calls, we've introduced new offers and bundles, each at attractive price points.
Paul: Beyond our always on value messages in the fourth quarter fix pizza launched a new promotion to ensure we are delivering to our customers creating for value are slated to price campaign offer customers a large pizza with fortunate things at an industry, leading $30 99 price point.
Paul: We also continue to aggressively promote our pizza and wings combo offering incredible value at a 1999 price point.
Paul: And at $2 73, as we've mentioned on previous calls we've introduced new offers and bundles each at attractive price points for <unk>.
Paul Gaudreau: From snack boxes at the sub $10 level to the successful launch of an XXL 18-inch pizza at a $19.99 price point, we've been speaking directly to the value that customers are looking for. And these new offerings have been very well received. Meanwhile, at Pizza Pizza, over the last three years, we have seen a shift in customer behavior, with customers increasingly moving to pickup orders to save on a delivery tip and third-party channel surcharges, where that's relevant. We continue our focus on this channel and refresh our creative across the Pizza Pizza storefront network promoting aggressive value options.
Paul: Snack boxes at the sub $10 level to the successful launch of the X XL <unk> pizza at a $19 99 price point, we've been speaking directly to the value that customers are looking for in these new offerings have been very well received.
Paul: Meanwhile, FX pizza over the last three years, we have seen a shift in customer behavior with customers increasingly moving to pickup orders to save on the delivery of chip and third party channels surcharges, where that's relevant.
Paul: We continued our focus on this channel and refresh their creative across the peak speeds of storefront network promoting aggressive value options and just an example of that is our two first place super $6 slice special and other attractive pickup specials.
Paul Gaudreau: And just an example of that is our 2 for $6 slice special and other attractive pickup specials. Ensuring we are convenient and accessible to all potential customers has always been a key priority for our business and has proven to be a key differentiator for us, especially with our expansive restaurant network across Canada and our award-winning digital channels for customers to order on. Our customers continue to recognize our strong value proposition and convenience and our innovative marketing activities and partnerships continue to be recognized as industry best in class. They're always well received by Canadians driving visibility and incremental sales.
Paul: Okay.
Paul: Ensuring we are convenient and accessible to all potential customers has always been a key priority for our business and has proven to be a key differentiator for us, especially with our extensive restaurant network across Canada, and our award winning digital channels for customers to order on.
Paul: Our customers continue to recognize our strong value proposition and convenience and our innovative marketing activities and partnerships continue to be recognized as industry best in class. They are always well received by Canadians driving visibility and incremental sales.
Paul Gaudreau: So I wanted to quickly highlight a few points about our brand strength and innovation I've seen this quarter. In the past, we've talked about owning key days and occasions, but we also like to be at the forefront of current trending topics. This fall, we tapped into political zeitgeist to help boost visibility for our chicken category. We launched the Bipartisan Wings program as tensions rose amidst the U.S. election. Complete with left-wing and right-wing parody ads, the campaign thrust Pizza Pizza into the headlines while giving a significant sales lift to our chicken category.
Paul: So I wanted to quickly highlight a few points about our brand strength and innovation as seen this quarter.
Paul: In the past you've talked about owning key days and occasions, but we also like to be at the forefront of current trending topics.
Paul: This fall, we tapped as a political zeitgeist to help boost visibility for our chicken category, we launched the bipartisan wings program as tensions rose mid to the U S election.
Paul: With left wing right wing parity ads they contain drastic fits into the headlines well, giving a significant sales lift to our chicken category.
Paul: Fourth quarter is always an exciting time for our brands is our high profile sports sponsorships to kick off their seasons.
Paul Gaudreau: Fourth quarter is always an exciting time for our brands as our high-profile sports sponsorships kick off their season. This quarter, to celebrate our long-standing partnership with the Toronto Raptors during their 30th anniversary season, Pizza Pizza launched the Raptors Mega Slice, a gigantic pizza slice equal in size to a large pizza. This unique item, packaging, and product experience drove significant engagement within the Raptors fan base. And actually, the packaging became a collector's item for people on social media as well. So it was amazing to see the secondary effects of that. And we had support from the Raptors mascot as well.
Paul: This quarter to celebrate our long standing partnership with the Toronto Raptors during their 30 <unk> anniversary season, It's a pizza launched the Raptor Raptors Mega slice a gigantic pizza slice equal in size to a large pizza.
Paul: This unique item packaging and product experiences drove significant engagement within the rafters fan base and actually the packaging became a collector's item for people on social media as well. So it's amazing to see the secondary effects of that and we have the support from the rafters mascot as well.
Paul Gaudreau: And we also continued our pioneering score-a-slice and score-a-pie promotions at our NHL partner arenas across the country. These activations drive customers to our app and allows our marketing team to keep engaging with them and importantly for return visits.
Paul: And we also continued our pioneering score a slice and score a pie promotions at our NHL partner arenas across the country.
Paul: These activations drive customers to our App and allows our marketing team to keep engaging with them and importantly for return visits.
This leads me to the third and I would say the most critical aspect of our sales driving initiatives and that is the customer experience.
Paul Gaudreau: This leads me to the third, and I would say the most critical aspect of our sales driving initiatives, and that is the customer experience. Because customers have a plethora of restaurants to choose from, we have to ensure that from end-to-end the customer's experience with us is second to none. To that end, we continue to invest in our digital ordering platform, loyalty program, business intelligence tools, as well as our in-store design and technology. And also importantly, I just mentioned on the human side, we also focus on ensuring that we have the friendliest possible experience for our guests, whether it's at the front counter when they walk in, whether it's at the front door if it's a delivery order, or over the phone if they call 967-1111 or 7373 in Alberta, or online.
Paul: Because customers have a plethora of restaurants to choose from we have to ensure that from end to end the customers' experience with us is second to none.
Paul: Does that and we continue to invest in our digital ordering platform loyalty program business intelligence tools as well as our in store design and technology and also importantly, Ive just mentioned on the human side. We also focus on ensuring that we have a friendly as possible experience for our guests whether it's at the front counter when they walk in whether it's at the front door, if it's a delivery order or over the phone if they call and thats. It.
Paul: 111, or 773 in Alberta or online we want to make sure we give that personal human touch.
Paul Gaudreau: We want to make sure we give that personal human touch. And on the tech side, we have an in-house team of app and website developers and QA experts who are constantly enhancing our platform based on customer feedback, while also removing any friction points or bugs.
Paul: And on the Tech side, we have an in house team of App and website developers <unk> experts, who are constantly enhancing our platform based on customer feedback.
Paul: So removing any friction points or bugs.
Paul: We were a pioneer in loyalty.
Paul Gaudreau: You're a pioneer in loyalty. Having had our Club 1111 program running now for over 10 years, and we have approximately 1.5 million enrolled users, which we're very proud of. We are currently updating Club 1111 with new functionality, including real-time push notifications, reminding members when the rewards are available, and again, when they're about to expire. Last year we saw record use of the program as well, due to the enhancements, with really millions of dollars in loyalty dough redemptions, so that's very exciting to see. We continue to improve our tech stack, supporting this existing program, while we investigate opportunities to enhance it.
Paul: Having had our club 11 11 program running now for over 10 years, and we have approximately $1 5 million enrolled users, which we're very proud of we are currently updating club 11, 11, with new functionality, including real time push notifications.
Paul: Many members when their rewards are available and again when they're about to expire.
Paul: Last year, we saw a record use of the program as well due to the enhancements.
Paul: Really millions of dollars in loyalty redemption, so that's very exciting to see.
Paul: We continue to improve our tech stack supporting this existing program, while we investigate opportunities to enhance it.
Paul: We're constantly working on our restaurant refresh and renovation program, adding the most current anybody to look for our customers with new contemporary designs and exterior signage.
Paul Gaudreau: We're constantly working on our restaurant refresh and renovation program, adding the most current and inviting look for our customers with new contemporary designs and exterior signage.
Paul Gaudreau: Customer satisfaction is paramount. It's a mission we focus on each and every day, and we continually work to elevate that customer experience with our talented operators who are trained and retrained and motivated to become A-level, the best of the best, not only at Pizza Pizza, but in the QSR industry.
Paul: Customer satisfaction is paramount its emission we focus on each and every day and we continually work to elevate the customer experience with our talented operators, who are trained and retrained and motivated to become a level. The best of the best not only at <unk>, but in the <unk> industry.
Paul: As we look ahead to 2025, we know that there is significant competition for consumer spending, especially with the impact tariffs are poised to have on our customers' wallets, but the overall strength of our foundation remain the same.
Paul Gaudreau: As we look ahead to 2025, we know that there is significant competition for consumer spending, especially with the impact tariffs are poised to have on our customers' wallets, but the overall strengths of our foundation remain the same. Our brand strength and resonant marketing messages, a continually enhanced menu and industry-leading packaging, relentless innovations across our technology platform, reliable consistency and quality, and unrivaled convenience for our customers. These leading attributes will be key to our growth as we go forward.
Paul: Our brand strength and resident marketing messages, a continually enhanced menu and industry leading packaging.
Paul: Littlest innovations across our technology platform reliable consistency quality and unrivaled convenience for our customers.
Paul: These leading attributes will be key to our growth as we go forward.
Paul Gaudreau: And before I turn the call over to Christine, I just wanted to briefly discuss our restaurant network growth as well. We remain focused on growing our business across Canada and we are known and respected as a major homegrown national brand and the leading pizza chain in the country. During the quarter, we opened 8 traditional and 3 non-traditional Pizza Pizza locations. Meanwhile, at Pizza 73, we opened one traditional location and one non-traditional Pizza 73 location. And we closed three non-traditional pizza sites and three non-traditional pizza settings. And as I mentioned earlier, for the full year, we opened a record 48 new restaurants across Canada, which we're very proud of, and we also did close 22 smaller, non-traditional locations and three traditional locations.
Paul: And before I turn the call over to Christine I, just wanted to briefly discuss our restaurant network growth as well.
Paul: We remain focused on growing our business across Canada, and we are known and respected as a major homegrown national brand and the leading pizza chain in the country.
Paul: During the quarter, we opened eight traditional and non traditional pizza locations.
Paul: Meanwhile, at Pizza 73, we opened one traditional location and one non traditional pizza severance relocation.
Paul: And we closed three non traditional pizza pizza sites and three non traditional pizza 73 sites.
Paul: Okay.
Paul: And as I mentioned earlier for the full year, we opened a record 48, new restaurants across Canada, which we're very proud of and we also did close 22 smaller non traditional locations and three traditional locations for.
Paul Gaudreau: For the traditional closures, adjacent restaurants benefited by absorbing the closed-doors territory. While we continue to focus on our national expansion plans, we are pleased to say that half of our traditional store openings have been in our biggest, longest-standing, most penetrated lucrative market, the province of Ontario. And beyond Canada, we now have four restaurants operating in Guadalajara, Mexico and the royalties to the Royalty Corp commenced in October 2024. Although it is still early days for Mexico, we're pleased with our restaurant's performance to date and we're continuing to work closely with our Mexican partners on the next set of restaurant openings and expect more openings this year, so stay tuned.
Paul: For the traditional closures adjacent restaurants benefited by absorbing the closed stores territory.
Paul: While we continue to focus on our national expansion plans. We are pleased to say that half of our traditional store openings have been in our biggest longest standing most penetrated lucrative market the province of Ontario.
Paul: And beyond Canada, we now have four restaurants operating in Guadalajara, Mexico, and the royalties to the royalty Corp commenced in October 2024.
Paul: Although it is still early days for Mexico, We're pleased with our restaurants' performance today, and we're continuing to work closely with our Mexican partners on the next set of restaurant openings and expect more openings. This year so stay tuned.
Paul: And as we look to 2025 Petabytes of management expects to continue its restaurant network expansion.
Paul Gaudreau: And as we look to 2025, Pizza Pizza Management expects to continue its restaurant network expansion with roughly 2-3% traditional restaurant growth. Additionally, we look to complete our renovation program as we currently have over 93% of our restaurants featuring our new modern image And we will also continue with significant upgrades in regards to restaurant equipment such as more efficient ovens, digital menu boards, and other in-store technology We continue to have a large pipeline of franchise leads that are eager to join the team. We also have many of our current franchisees looking to expand too.
Paul: The 2% to 3% traditional restaurant growth.
Additionally, we look to complete our renovation program as we currently have over 92% of our restaurants, featuring our new modern image and we will also continue with significant upgrades in regards to restaurant equipment, such as more efficient ovens digital menu boards and other in store technology.
Paul: We continue to have a large pipeline of franchise leads that are eager to join the team. We also have many of our current franchisees looking to expand to and I would just mentioned in passing as well.
Paul Gaudreau: And I would just mention in passing as well that we did receive a very prestigious award this quarter from the Elite Franchise Group out of the UK. They evaluated 100 applicants across Canada, many, many leading brands that you would know very, very well. So we had some very stiff competition, but Pizza Pizza came out on top as the number one recognized elite franchise. So we're very proud of that as well. And certainly that reflects the quality of our operators, our business, and certainly helps sell more franchises as well.
Paul: We did receive a very prestigious award this quarter from the elite franchise group out of the UK.
Paul: They're valued at 100 applicants across Canada. Many many leading brands that you would know very very well. So we had some very stiff competition, but fits pizza came out on top is the number one recognize ALLETE franchise. So we're very proud of that as well and certainly that reflects the quality of our operators our business and certainly help sell more franchises as well. So we're very proud of that now some closing remarks.
Paul Gaudreau: So we're very proud of that.
Paul Gaudreau: Now some closing remarks. As mentioned, we will continue to drive business by leading into our value offerings, innovation, marketing, and brand initiatives, while providing high-quality, delicious, hot and fresh food to our customers wherever and whenever they want us. We know the economic landscape is challenged and customers are much more deliberate in managing their overall spend, but we will ensure that our customers continue to see us offering the best food at the best price.
Paul: As mentioned, we will continue to drive business by leaning into our value offerings innovation marketing and brand initiatives, while providing high quality delicious hot and fresh food to our customers wherever and whenever they want us.
Paul: We know the economic landscape is challenging and customers are much more deliberate in managing the overall spend we will ensure that our customers continue to see us offering the best food at the best price.
Paul: And finally, I'd like to close by thanking our entire team our corporate employees and operators alike for everything you do for our customers our communities and for each other especially in this difficult macro operating environment.
Paul Gaudreau: And finally, I'd like to close by thanking our entire team, our corporate employees, and operators alike for everything you do for our customers, our communities, and for each other, especially in this difficult macro-operating environment. It is truly an honor to work alongside all of you as you built an innovative, ambitious, and collaborative culture right across the country at both brands. And I think the best is yet to come.
Paul: It is truly an honor to work alongside all of you as we built an innovative ambitious and collaborative culture right across the country at both brands and I think the best is yet to come.
Christine DeSelva: Thank you for listening, and I'll now ask Christine to provide a brief financial update. Thanks Paul. Before going into the results of the quarter, I wanted to remind everyone of our structure. Pizza Pizza Royalty Corp. is a top-line restaurant royalty corp. that earns a monthly royalty through a license agreement with Pizza. in exchange for the use of the Pizza Pizza and Pizza 73 trademarks in its restaurant operation. Pizza Pizza Limited pays the partnership a monthly royalty calculated as a percentage of royalty pool. Growth in the Corp. is derived from increasing the same-store sales of the restaurants in the pool and by adding new restaurants to the pool each year.
Paul: You for listening and I'll now ask Christine to provide a brief financial update.
Christine Silva: Thanks, Paul.
Christine Silva: The results for the quarter I wanted to remind everyone of our structure.
Christine Silva: <unk> royalty Corp. At the topline restaurant royalty Corp that person must be royalty license agreement with Pizza Pizza.
Christine Silva: In exchange for the use of the Pizza Pizza and pizza.
Christine Silva: 73 trademark restaurant operation.
Christine Silva: Please go limited partnership from monthly royalty calculated as a percentage of royalty wholesale.
Christine Silva: Growth in the core is derived from increasing the same store sale of the restaurants in the fall and by adding new restaurants to deploy.
Christine Silva: For fiscal 2020 for the royalty pool was adjusted on January one 2024 to 774 restaurants comprised.
Christine DeSelva: For Fiscal 2024, the royalty pool was adjusted on January 1, 2024 to $774,000. comprised of 672 Pizza Pizzas and 102 Pizza 73s.
Speaker Change: Comprised of 672 pizza pizza and a 110% to 73.
Speaker Change: With that I'll briefly cover some financial results for the quarter.
Christine DeSelva: With that, I'll briefly cover some financial results for the quarter. As Paul mentioned, same-store sales, a key driver, revealed growth for shareholders, decreased 3.9% for the quarter. Pizza restaurants reported same store sales declines of 4.3% and Pizza 73 restaurants decreased 0.7%. Both brands experienced a decline in traffic, with Pizza Pizza's average ticket being relatively flat, and Pizza 73's. The combination of new restaurants added to the royalty pool on January 1st and the same store sales decline resulted in a decrease in Pizza Royalty Pool system sales and the corresponding royalty income. Royalty Pool system sales for the quarter decreased 2.1% to $160.5 million from $163.9 million in the same quarter last year.
Speaker Change: As Paul mentioned same store sales a key driver of yield growth per shareholder decreased three 9% for the quarter. Please.
Speaker Change: Pizza restaurants reported same store sales declines of four 3% and pizza 70 restaurants decreased <unk>, 7%.
Speaker Change: Both brands experienced a decline in traffic with pizza Pizza average ticket being relatively flat and pizza 73, increasing.
Speaker Change: The combination of new restaurants added to the royalty pool on January one and the same store sales decline resulted in a decrease in peak pizza royalty call system sale and the corresponding royalty income.
Speaker Change: We're ethical system sales for the quarter decreased two 1% to $160 5 million from $163 9 million in the same quarter last year.
Christine DeSelva: By brand, sales from the 672 Pizza Pizza restaurants in the pool decreased 2.4% to $137.7 million for the quarter and sales from 102 Pizza 73 restaurants decreased 0.2% to $22.8 million for the quarter. For the year, Royalty Pool Systems sales decreased 1.2% to $620.6 million from $628.4 million. The partnership's royalty income, earned as a percentage of royalty pool sales, decreased 1.9% to $10.3 million for the quarter and decreased 1% to $39.8 million for the year. Beyond royalty income, the partnership also earns interest income on its cash and short-term investment. For the quarter, the partnership earned $70,000 and for the year it earned $386,000.
Speaker Change: Hi, Brian sales from the 670, <unk> pizza restaurants in the core decreased two 4% to $137 7 million for the quarter and sales from the 100 GB to 70 restaurants decreased 2% to 22 point Inger.
Speaker Change: For the year royalty full system sales decreased one 2% to $626 million from $628 4 million.
Speaker Change: The partnership's royalty income earned as a percentage of royalty core sales decreased one 9% to $10 3 million for the quarter and decreased 1% to $39 8 million for the year.
Beyond royalty income the partnership also earn interest income cash and short term investments.
Speaker Change: For the quarter the partnership for <unk> 70, Jonathan.
Speaker Change: For the year $386000.
Speaker Change: Now turning to partnership expenses.
Christine DeSelva: Now turning to partnership expenses, administrative expenses, including listing costs, as well as director, legal, and auditor. for the quarter were $221,000 and for the year were $779,000. In addition to administrative expenses, the partnership is making interest-only payments on its $47 million credit facility. Interest paid in the quarter was $322,000 and $1.3 million for the year. The interest rate is locked through April 2025 using swap agreements that fix the interest at a rate of 1.81 plus the credit spread for a combined rate of 2.68.
Speaker Change: Administrative expenses, including lifting cost as well as director legal and auditor fees.
Speaker Change: For the quarter were 221000 and for the year were 717.
Speaker Change: In addition to administrative expenses the partnership is making interest only payments on its $47 million credit facility.
Speaker Change: Interest paid in the quarter with 322001 3 million for the year.
Speaker Change: The interest rate is lost through April 2025, using swap agreement that fixed the interest at a rate of 181, plus the credit spread for a combined rate of six eight.
Speaker Change: And subsequent to year end the company renewed the credit facility for three with maturity NASDAQ for April 2028.
Christine DeSelva: And subsequent to year end, the company renewed the credit facility for three years, with maturity now set for April 2020. The balance of the facility remained unchanged, however the credit spread table increased slightly. The company is working with its lenders to establish new three-year interest rate swaps, which would commence when the existing ones expire in April 2020.
Speaker Change: The balance of the facility remain unchanged, however to credit spread table increased slightly.
Speaker Change: The company is working with its lenders to establish new three year interest rate swaps, which would commence let me existing ones expire in April 2025.
Speaker Change: Okay.
Christine DeSelva: So now after the partnership has received royalty and interest income and paid administrative and interest expenses, the resulting net cash is available for distribution to its two partners based on their ownership. After the 2024 bend-in and the true-up of the prior year, Pizza Pizza Limited's ownership increased to 25.2% of the fully-divided. Pizza Pizza Royalty Corp shares in the remaining 74.8% of the partnership distribution. The Royalty Court pays its taxes on its share of the partnership earnings, and any residual cash is available for dividends to the company's shareholders.
Speaker Change: So now after the partnership has received royalty and interest income and paid administrative and interest expenses. The resulting in cash is available for distributions to partners based on their ownership.
Speaker Change: After the 2020 for vending and a true up of the prior year Pizza Pizza Limited. This is eliminated ownership increased to 25, 2% of the fully diluted share.
Speaker Change: Pizza Pizza royalty quarter shares and the remaining 74, 8% of the partnership distributions.
Speaker Change: So we're all keycorp paid taxes on its share of the partnership bromine and any residual cash is available for dividends to the company.
Speaker Change: Turning to shareholder dividend the company declared shareholder dividends of $5 7 million critical quarter or 20 325 cents per share.
Christine DeSelva: Turning to shareholder dividends, the company declared shareholder dividends of $5.7 million per quarter, or $0.2325 per shareholder. This is compared to $0.23 per share in 2023. and the payout ratio for the quarter was 104%. For the year, the company declared shareholder dividends of $22.9 million or $0.93 per share compared to $21.8 million or $88.75 per share in 2020. The payout ratio was 110% for the year, and resulted in the company's working capital reserve decreasing to $6.1 million as of the end of 2024. This excludes the reclassification of the credit The $6.1 million Working Capital Reserve is available to stabilize dividends and fund other expenditures in the event of short to medium-term variability in spending.
Speaker Change: This is compared to 23 per share in 2023.
Speaker Change: And the payout ratio for the quarter was 104%.
Speaker Change: For the year the company declared shareholder dividend of $22 9 million or <unk> 93 per share compared to $21 8 million or $88 75 per share in 2023.
Speaker Change: The payout ratio was 110% for the year.
Speaker Change: And resulted in the company's working capital reserve decreasing to $6 1 million.
Speaker Change: And 2024.
Speaker Change: The reclassification of the credit facility.
Speaker Change: The $6 1 million working capital reserve is available to stabilized dividend and fund other expenditure in the event of short to medium term variability in sale.
Speaker Change: And in turn royalty.
Christine DeSelva: and intern room. The company has historically targeted a payout ratio at or near 100% on an annualized.
Speaker Change: The company has historically targeted a payout ratio at or near 100% annualized rate.
Speaker Change: That concludes the financial overview I would like to turn the call back to our operator to poll for questions.
Christine DeSelva: That concludes the financial overview.
Operator: I'd like to turn the call back to our operator to poll for questions. Thank you.
Speaker Change: Thank you.
Speaker Change: Ladies and gentlemen, we will now begin the question and answer session.
Operator: Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press star 1 on your touchtone phone. You will hear a prompt that your hand has been raised. Should you wish to decline from the polling process, please press start. If you are using a speakerphone, please lift the handset before pressing any button. One moment, please, for your first question.
Speaker Change: Should you have a question. Please press star one on your Touchtone phone.
Speaker Change: You'll hear a prompt Mr. Han has been raised.
Speaker Change: Should you wish to decline from the polling process. Please press star two.
Speaker Change: If you are using a speaker phone please lift the handset before pressing any keys one moment. Please for your first question.
Speaker Change: Okay.
Derek Lazard: Your first question comes from Derek Lazard of TD Cowan. Your line is already open.
Speaker Change: Your first question comes from Derek Lessard of TD Cowen your.
Speaker Change: Your line is already open.
Derek Lessard: Yes, good afternoon, everybody good good to hear your voices and congrats on that.
Derek Lazard: Good afternoon, everybody. Good to hear your voices and congrats on that 800th store. Thanks Derek, likewise.
Speaker Change: Store.
Speaker Change: Thanks, Eric.
Paul Gaudreau: um maybe just i want to start on the the consumer just curious that you obviously you guys are on the uh the front line So I was wondering in terms of the behavior, are you seeing the effects more on the bundling side? Are consumers maybe foregoing the extra dipping sauce and sides? Are they picking up more to avoid the delivery costs? How is the, I guess, the weakness in the consumer really manifesting? Yes, that's a good question, Derek, and really to answer, it is a bit of all of the above. I mean, we definitely see an industry trend towards pickups, for sure, away from delivery, which I think shows the affordability of delivery being challenged across the whole industry.
Speaker Change: Maybe just wanted to start.
Speaker Change: Start on the consumer just curious obviously you guys are on the front lines.
Speaker Change: I was wondering in terms of the behavior are you seeing the effects.
Speaker Change: More on the bundling side, our consumers may be foregoing the extra dipping sauce inside are they picking up more to avoid the delivery costs.
Speaker Change: How is the I guess the weakness in the consumer really manifesting itself.
Speaker Change: Yes.
Speaker Change: And Derek and really to answer it is a bit of all of the above.
Speaker Change: Definitely see initial trend towards pickups for sure away from delivery.
Speaker Change: This shows the affordability.
Speaker Change: Every being challenged at cross sell industry.
Paul Gaudreau: So that is the case. And people are... We notice that our bundles are still very popular. I mean, we might see some shift in which bundles, but we try and create those to really speak to value, as I tried to indicate in my prepared remarks, whether it's the 1999 special or there's definitely some shift there, but also people are getting less size and less dips, less pop than they otherwise had, especially if they're a la carte. So we are seeing a bit of all of the above of that as an indicator of just the tough environment.
Speaker Change: So that is the case and people are.
Speaker Change: Notice it in our bundles are still very popular I mean mentioned some shift in which bundles.
Speaker Change: We tried to create those to really speak to value as I tried to indicate in my prepared remarks, whether it's the 1999 special or this is 99, but there definitely is some shift there, but also people are getting less and less ships less pop than they otherwise, especially if they're ala carte. So we are seeing a bit of all of the above of that as an indicator of just the tough.
Speaker Change: <unk>.
Speaker Change: Okay, that's fair and I understand that and maybe about how about the sales maybe through the third party delivery channels, which typically are a little bit more more expensive have any of those sales that were going through that channel coming back to you guys.
Paul Gaudreau: Okay, that's fair and understand that and maybe about how about the sales, maybe through the third party delivery channels, which, you know, typically are a little bit more more expensive as have, you know, any of those sales that were going through that channel coming back to you guys. Yes, it's always hard to increase. You might have some more specifics on that, but, I mean, it's an important channel for us too. We always prefer organic, of course, and we think our customers should prefer it. But we do sense some weakness there overall, you know, the way it's hard to measure the results of those companies just given their vast scale.
Speaker Change: Yeah.
Speaker Change: Yes, it's always hard to increase you might have some more specifics on that but it's an important channel for us too we always prefer organic of course, and we think our customers prefer it but we do set some weakness there overall.
Speaker Change: The way, it's hard to measure the results of those companies just given their vast scale, but you can just anecdotally see in Canada.
Paul Gaudreau: But you can just anecdotally see in Canada, you know, that there is some challenge there. We see that they're not, the rate of growth is not as fast, and I think it's really been a problem for them. We've seen actually layoffs with some of those firms even as a reflection of just how challenging it is for them. So people are sensitive to the higher surcharges that tend to come with those networks. There's different ways that they do relay on charges to the customer, but yeah, we are seeing that in general overall, and maybe Christina had something to add.
Speaker Change: There is some some challenge there we see that they are not the rate of growth is not as status and I think it's really been a problem for them. We've seen actually lay off some of those firms even as a reflection of just how challenging it is for them. So people are sensitive to the higher surcharges that tend to come with those those networks, there's different ways to do really on.
Speaker Change: Charges to the customer, but yes, we are seeing that and generally overall and maybe Christina.
Christine DeSelva: And we're using a lot of our actual promotions right now to direct customers back to our app. So in December, we offered a bounce back. So we had individuals purchasing through the app receive a free medium pizza when they came back in January. So while we're seeing some softness in the third party, we're trying to heavily entice them to come back to our organic app. It is cheaper. We have a lot more specials on that platform, and that's where we always say that we have avenues for customers to get our product no matter which way they want to go.
Speaker Change: And we're using a lot of our actual promotions right now to give back to customers back to our app. So in December we offered a bounce back. So we had individuals purchasing through the app receive a free medium pizza when they came back in January so while we're seeing the softness in the third party, we're trying to heavily in.
Speaker Change: To come back to our organic.
Speaker Change: It is cheaper we have a lot more specials on that platform and thats. The real estate that we have avenues for customers too.
Speaker Change: Our product no matter, which way they want us out.
Paul Gaudreau: There are still no... Sorry, go ahead. I would say there are some restaurants that only use third party. right? There are still those customers that will only use third-party apps, so we're still present on them, we're still active, but we still try to continue to get them back to our organization. Yeah, and we're going to still, you know, we need to try new approaches to actually get more of those people switching, those that at least are willing to, and we do prominently display QR codes, for instance, that drive you right into our app, for instance, and we've also been doing things like SMS push notifications, more loyalty reward reminders, more constant communication with our customers to sort of try and build and deepen the relationship with our customers through our organic channels as best we can.
There arent if I will note.
Speaker Change: Okay.
Speaker Change: No.
Speaker Change: Third party.
Speaker Change: Alright, there are still those customers that will only third party app. So we're still question on that and we're still active but we still try to continue to get them back to our organic channel.
Speaker Change: And we're going to get done.
Speaker Change: To try new approaches to actually get more of those people switching those that at least are willing to do.
Speaker Change: <unk>, probably just despite QR codes for instance that drive drive it right into our App for instance, and we're also doing things like SMS push notifications more loyalty reward reminders more constant communication with our customers to sort of trying to build and deepen the relationship with our customers through our organic channels as best we can so that's something we do think there is an untapped opportunity that we.
Paul Gaudreau: So that's something we do think is an untapped opportunity that we can get some more success with if we play our cards right.
Speaker Change: Can get some more success with if we play our cards right.
Derek Lazard: Yeah I guess and I mean you guys said you already answered what my follow-up was in terms of like if you were able to leverage your your app for that so that's helpful and I so maybe I'll ask it a different way like are you are you seeing folks you know maybe wait for those promos to to spend more or it you know is that are they waiting for those targeted apps and and and other and and other promotional spend I don't think we can say that for sure. I mean, I get what you're getting at, Derek.
Speaker Change: Yes, I guess I mean, you guys did you already answered my follow up was in terms of like if you were able to leverage your app for that so that's helpful.
Speaker Change: Maybe I'll ask it a different way are you are you seeing folks maybe wait for those promos to spend more or.
Speaker Change: Is that are they waiting for those targeted apps and.
Speaker Change: In other and other promotional spend.
Speaker Change: I don't think we can see that for sure I mean, I guess, what Youre getting Eric I think it's just it's hard for us to measure that I think.
Paul Gaudreau: I think it's just it's hard for us to measure that. I think, you know, the people want to order, they want to order. And I think there are a bit habitual in terms of what platform or their favorite method of ordering, whether it's, you know, if it's by app, like Christine was saying, if it's through, you know, one of the popular third party apps, that's that may be their default. But. Yeah, I think, you know, I think we can have some success just as we continue to invest in technology, which we feel is a real advantage we have, and just leveraging the data we have to our BI platform, which we continue to invest in as well, we're able to just get more granular data on different types of transactions, when people are ordering, you know, what results in better frequency, etc.
Speaker Change: People want to order they want to order and I think they are.
Speaker Change: Our bit habitual in terms of what the platform or their favorite method of ordering.
Speaker Change: Okay.
Speaker Change: By App.
Christine Silva: Christine was saying if it's through one of the popular third party apps that maybe their default but.
Christine Silva: Yes, I think I think we can have some success just as we continue to invest in technology, which we feel is a real advantage, we have and just leveraging the data we have to RBI platform, which we continue to invest in as well, we're able to just yet more granular data on different types of transactions when people are ordering what result.
Christine Silva: And better frequency et cetera, and just try and build I guess, what I'm trying to say is more frequent contact with our customers, where we do have the customer data and trying to really amplify that so that's something we are going to put more and more attention to it and we've been pretty happy even with some initial I would say fairly limited sort of SMS push push SMS messages.
Derek Lazard: And just try and build, I guess what I'm trying to say is more frequent contact with our customers, where we do have the customer data, and try and really amplify that. So that's something we are going to put more and more attention to. And we've been pretty happy, even with some, you know, initial, I would say, you know, fairly limited sort of SMS push, SMS messages and push notifications from the app. But we think there's actually quite a bit more we can do with that. Okay, and that definitely makes sense.
Christine Silva: Push notifications from the App, but we think there's actually quite a bit more we can do with that.
Christine Silva: Okay.
Christine Silva: That definitely makes sense.
Speaker Change: Paul I was I was actually my ears perked up during your prepared remarks, when you talked about the <unk>.
Paul Gaudreau: Paul, I was actually, my ears perked up during your prepared remarks when you talked about the Canada Post strike and the impact on the flyers, and I knew this was a big, the flyers were big for the grocers, for example, so I mean, I was just curious on how important are flyers to you guys to drive traffic. Yes, I mean, we, again, generally, I mean, we've been using them less than we did once upon a time, I would say, but we still see them actually playing a key role, and we do see a real direct sort of cause and effect, you know, relationship there.
Speaker Change: Post strike and the impact on the Flyers and knew this was a big the Flyers were baked for for the groceries. For example is just so I mean I was just curious on how important our flyers to you guys to drive traffic.
Speaker Change: Yes, I mean, we again generally I mean, we've been using them less than we did once upon a time I would say, but we still see them actually playing a key role and we do see.
Speaker Change: A real direct sort of cause and effect.
Speaker Change: Yes.
Speaker Change: Our relationship there and if it does depend I mean, it's always it depends on a flyer that just happens to be a better bundling of specials and some great innovative products and other times, it's not it's not always a slam dunk, but generally speaking we think it is a good use of dollars, even though it's a <unk> solution and we can price differentiate across different regions and thanks to some degree.
Paul Gaudreau: And it does depend. I mean, sometimes it depends on a flyer that just happens to be a better bundling of specials and some great, you know, innovative products, and other times it's not, it's not always a slam dunk. But generally speaking, we think it is a good use of dollars, even though it's a mass solution and we can price differentiate across different regions and things to some degree. But you know, we do see that. So when we were not able to get that out, I mean, that is a real painful hit for us. We really were counting on that flyer going out, and then the strike happened.
Speaker Change: But we do see that so when we were not able to get that out I mean that is a real painful.
Speaker Change: Hit for Us and we really were kind of on that Florida going out and then the strike happened and we were I think able to get some out in a more limited way, but it was very very small compared to ours.
Paul Gaudreau: And we were, I think, able to get some out in a more limited way, but it was very, very small compared to, you know, our multi, multi-million person drop that we normally do when we do create and distribute a flyer. So it does impact us. And I would say, you know, although, you know, we were disappointed with our Q4 overall, obviously, you know, we want to be positive every quarter. When you look at Q3, we did get some improvement. I think we do feel that directionally we were going and are going the right way, and we do have some momentum.
Speaker Change: Our multi multimillion.
Speaker Change: Person drop that we normally do when we do create distribute flyers. So it does impact us and I would say, although we are disappointed with our Q4 overall, obviously, we want to be positive every quarter.
Speaker Change: When you look at Q3, we did get some improvement I think we do feel that Directionally. We were going in are going the right way, but we do have some momentum so despite that that was definitely.
Paul Gaudreau: So despite that, that was definitely, you know, a hiccup that we couldn't have controlled. But we do otherwise feel that what we put in place, especially in Q4, has been positive. It's a trend in the right way, and we do feel we have real momentum. Yeah, it feels, you know, you said you're disappointed, but it feels like you're controlling what you can control in this environment, right? Yes, the I think we are.
Speaker Change: A hiccup that we couldnt control, but we do otherwise feel that what we've put in place, especially in Q4.
Speaker Change: It has been positive it's just trending the right way and we do feel we have real momentum.
Speaker Change: Yes, it feels.
Speaker Change: You said you were disappointed but it feels like you're controlling what you can control in this environment right.
Speaker Change: Yes.
Speaker Change: We are.
Derek Lazard: Yeah, the um, maybe just Touching on inflation, I'm curious on how the franchisees are managing through that. Also, in terms of maybe like your food sourcing, is that mostly Canadian sourced? Yes, happily it is.
Speaker Change: Yeah.
Speaker Change: Maybe just.
Speaker Change: Touching on inflation curious on how.
Speaker Change: The franchisees are managing through that and also in terms of maybe like your food sourcing.
Speaker Change: Is that is that mostly Canadian Canadian source.
Speaker Change: Yes happily it is I guess, just sticking with food sourcing that I can touch on inflation, our interest income, but crude sourcing, yes, I mean.
Paul Gaudreau: I guess to speak to the food sourcing, then I can touch on inflation or Kastinkham, but food sourcing, yes, I mean... You know, almost all the ingredients we have are Canadian. There are a couple of exceptions and, you know, we have contingency plans there around those, but we definitely are happy and we do try, wherever we can, to use Canadian ingredients where we can. The other exceptions, like I've talked about many times, things like Kalamata olives from Greece, which the quality is so strong, we feel we need to keep those, but those are not coming from the U.S.
Speaker Change: Almost all of the ingredients, we have our Canadian there are a couple of exceptions and we have contingency plans there around those but we definitely are happy and we do try wherever we can to use kidney agreements, where we can you guys assessments like I've talked about many times things like Colorado, all have some grease, which the quality is so strong we feel we need to keep those.
Speaker Change: But those are not coming from the U S.
Paul Gaudreau: They're not grown in the U.S., so that is something that's helpful, at least.
Speaker Change: They're not grown in the U S. So.
Speaker Change: That is something that's helpful at least but we do face cost increases on things like our small wares and oven costs and things like that which are coming from United States as well so on the food side.
Paul Gaudreau: But we do face cost increases on things like our small wares and oven costs and things like that, which are coming from the United States as well. So on the food side, it's a, you know, a pretty good story, but on the non-food, it is something that does create some risk for us. And on the inflation side, I mean, certainly we have seen some increases, but generally we've been very good at getting our suppliers, negotiating hard with our volumes, our scale, to really hold the line very effectively. So we've been, I think our franchisees have been generally pretty happy with how we've really held the line and held our suppliers' feet to the fire there.
Speaker Change: A pretty good story, but on the non food. It is it is something that does create some risk for us.
Speaker Change: On the inflation side I mean, certainly we have seen some increases but generally we've been very good.
Getting our suppliers negotiating hard with our volumes our scale to really hold the line very effectively so.
Speaker Change: I think our franchisees have been generally pretty happy with how we've really held the line and I'll, let suppliers' feet to the fire. There. So not a major concern are your one or two items that are but some of the biggest input costs I think we've held the line pretty well.
Paul Gaudreau: So not a major concern, maybe one or two items that are, but some of the biggest input costs, I think we've held the line pretty well.
Speaker Change: Okay, maybe just one final one for me I am glad to see still like Youre, holding the 2% to 3% to restaurant growth for for this year.
Derek Lazard: Okay, maybe just one one final one for me. I'm glad to see still like you're holding the 2 to 3% restaurant growth for for this year. And I know.
Speaker Change: I know everybody operates their business on a longer term basis, and you can't really ebb and flow with all the tariff talk but I was curious yes.
Derek Lazard: Everybody operates their business on a longer term basis, and you can't really have in flow with all the tariff talk, but I was curious. If you'd expect, or if you can maybe pull forward any of the. Any of those construction earlier to maybe try and avoid any tariff risk, or how do you how do you plan for that? Yeah, it's a good question. I think in generally we try and do that wherever we can. I mean, even in terms of input costs, we've, you know, kind of Even, for instance, some of the products we do have from the United States, we have brought them in early and stockpiled a little bit there.
Speaker Change: You would expect or if you can maybe pull forward any of the <unk>.
Speaker Change: Any of those construction earlier to maybe try and avoid any tariff risk or how do you how do you plan for that.
Speaker Change: Yes, that's a good question I think in generally we try and do that wherever we can I mean, even in terms of input costs kind of.
Speaker Change: Even for instance, some of the products, we do have some United States. We have brought them in early and to kind of stockpiled a little bit. There. So we can do that a little bit but you Alastair if we kept it too much of that because often times. The state may not be ready et cetera, it's hard to kind of align everything if we even if we say hey, we want to front end load development this year.
Paul Gaudreau: So we can do that a little bit, but to be honest, Eric, we can't do too much of that because often times, you know, the site may not be ready, et cetera, it's hard to kind of align everything, even if we say, hey, we want to front-end load development this year. And by the way, we've tried to actually do that anyway, but there's only so much we can do there to sort of get ahead of, say, a tariff impact. I think, you know, our development schedule does look good for this quarter, next quarter. We do try and front-end load it anyway a little bit, but there's not much, to be honest, that we can do to really push it, say, months and months ahead of what we would have otherwise.
Speaker Change: The way, we've tried to actually do that anyway, but.
Speaker Change: There's only so much we can do there to sort of get ahead of say a tariff impact I think our development schedule does look good for this quarter next quarter, we do try and front end loaded anyway, a little bit, but there's not much to be honest that we can do to really push it say months and months ahead of what we would've otherwise, there's just a limit to it.
Derek Lazard: There's just a limit to availability of sites, labor, materials, et cetera. So it's probably pretty limited what we can do on that front. Okay, that's fair.
Speaker Change: We already have sites labor materials et cetera, So it's probably pretty limited what we can do on that front.
Speaker Change: Okay, that's fair.
Paul Gaudreau: And then actually, I do have I do have one more. And I just wanted to touch maybe on the on the competitive environment. Have you seen I know you touched on it in your remarks, Paul, but opening remarks, but have you seen any, I'd say, like more bouts of irrational activity versus, you know, where you guys were a year ago when, you know, inflation and tariff talk wasn't as hot. I think it's been, you know, relatively the same. I mean, different players have different tactics, I suppose. I mean, I just sense generally across 2SR, generally, you can almost see or feel a little more desperation on the part of some groups.
Speaker Change: I do have I do have one more and I just wanted to touch maybe on the.
On the competitive environment have you seen I know you touched on it in your remarks, Paul opening remarks, but have you seen any I'd say like more bouts of irrational.
Speaker Change: Activity versus where you guys were a year ago when.
Speaker Change: Inflation and tariff talk wasn't as hot.
Speaker Change: I think it's been.
Speaker Change: Relatively the same I mean different players have different tactics I suppose I mean.
Speaker Change: I just sense generally across <unk> generally you can almost see or feel a little more desperation on the part of some groups maybe players we haven't seen that.
Paul Gaudreau: Maybe players we haven't seen go to extreme measures, but I wouldn't say there's too much new aspect in the pizza sub-segment that, you know, it's a lot of the same things we've seen from others. It doesn't mean it doesn't make it more competitive. It does, but we, you know, I guess we try to speak to value and bundle things in such a way that people feel good about it. They're still going to choose us. They might have a very similar competitive offer, but, you know, we think that hopefully we, what we're doing, if we're doing our jobs right, is we'll have the edge.
Speaker Change: Extreme measures, but I wouldn't say, there's too much new aspect in the pizza sub segment.
Speaker Change: It's a lot of the same things we've seen from others. It doesn't mean it doesn't make it more competitive it does but we I.
Speaker Change: I guess, we've tried to speak to value and bundle things in such a way that people feel good about it theres still going to choose us they might have a very similar competitive offer but we think that hopefully what we're doing if we're doing our jobs right as we will have the edge.
Paul Gaudreau: And we want to make sure that we make sure our franchisees can do well. I mean, we want to be sure they can also make a profit. So putting customers first to get the value offering, and we do know we need to do more to get the traffic back, but we are encouraged by the trend and the momentum we have. So I think we are, you know, more often than not getting it right. And despite some of those folks resorting to, I mean, I guess you could say in some cases irrational behavior, we think in some cases it is, but all we know is we're going to do what we think works well and what customers see as, you know, the best value option.
Speaker Change: And we want to make sure that we can make sure our franchisees can can do well and we want to ensure they can also make a profit so putting customers first to get the value offering.
Speaker Change: No we need to do more to get the traffic back, but we are encouraged by the trend and the momentum we have so I think we are.
Speaker Change: More often than not getting it right and despite some of those folks.
Speaker Change: Resorting to I guess, you could say in some cases irrational behavior, we think some cases it is.
Speaker Change: But all we know is we're going to do what we think works well and what customers see as the best value option.
Speaker Change: Okay.
Derek Lazard: Well, with that, thanks, Paul-Christine. Here's hoping to a long-staff run. OK, thanks very much, Jared. Appreciate it.
Speaker Change: Well with that thanks, Paul Christine.
Speaker Change: Here's hoping to launch upfront.
Gerry: Okay. Thanks, very much Gerry.
Speaker Change: Appreciate it.
Speaker Change: Ladies and gentlemen, as a reminder, if you have a question. Please press star one.
Operator: Ladies and gentlemen, as a reminder, if you have a question, please press star 1. There are no further questions at this time.
Speaker Change: There are no further questions at this time.
Christine DeSelva: I would hand over the call to Christine DaSilva for closing remarks. Please go ahead. Thank you everyone for joining us on the call today. If you have any questions... Following the call, please reach out to us. Our information is available on our website and on the press release.
Speaker Change: Over the call to you Kristina silver for closing remarks. Please go ahead.
Speaker Change: Thank you everyone for joining us on the call today, if you have any questions.
Speaker Change: Following the call. Please reach out with our information is available on our website and on the press release.
Speaker Change: You may now disconnect. Your line. Thank you.
Speaker Change: Yes.
Speaker Change: Ladies and gentlemen, this concludes today's conference call. Thank you for your participation and you may now disconnect.
Operator: Ladies and gentlemen, this concludes today's conference call. Thank you for your participation and you may now disconnect.