Financial Data and Key Metrics Changes - For fiscal year 2025, revenue was $679.5 million, with comparable sales declining by 7.9% [6] - Fourth quarter sales were $155.2 million, down from $160.9 million a year ago, with comparable sales down 11.5% [25] - Restaurant level margin was 10.4% in Q4, down from 17.4% the previous year [25] - Fourth quarter net loss was $49.7 million compared to a net loss of $29 million last year [29] - Adjusted EBITDA was a loss of $13.3 million compared to a loss of $600,000 last year [29] Business Line Data and Key Metrics Changes - The company opened 15 net new restaurants in Q4, including 8 Infinite Kitchens, ending the year with 281 locations [26] - The decline in comparable sales was driven by a 13.3% decrease in traffic and mix, partially offset by a 1.8% benefit from menu price increases [26] - The transition from Sweetpass+ to the new SG Rewards program eliminated subscription revenue and introduced a loyalty deferral [26] Market Data and Key Metrics Changes - The company entered three new markets in Q4: Cincinnati, Sacramento, and Arkansas [20] - The Infinite Kitchen technology continues to deliver higher average annual volumes (AAVs) and labor savings of more than 700 basis points compared to classic counterparts [21] Company Strategy and Development Direction - The Sweet Growth Transformation Plan focuses on five strategic priorities: operational excellence, food quality and menu innovation, personalized experience, brand relevance, and disciplined, profitable investments [7] - The company is committed to improving operational execution and managing costs with discipline to support long-term financial performance [24] - The company plans to launch wraps in mid-2026, which is expected to attract new customers and increase customer frequency [64] Management's Comments on Operating Environment and Future Outlook - Management acknowledged traffic pressure and a challenging operating environment but expressed confidence in the team's ability to navigate through it [6][23] - The company expects same-store sales to decline in the range of -4% to -2% for 2026, with expectations for improvement as comparisons ease [30] - Management emphasized the importance of operational efficiencies and reducing complexity in restaurant operations to improve margins [56] Other Important Information - The company is focusing on enhancing the value perception of its offerings by increasing protein portions and reintroducing lower-priced seasonal offerings [15] - The loyalty program is performing well, with loyalty members spending more than twice as much as non-loyalty members [74] Q&A Session Summary Question: Can you help us think through the comp guidance and timing for wraps? - Management expects comp guidance between -4% and -2%, with wraps potentially launching in Q2 if tests go well [34] Question: Will you take any more price increases during the year? - Management is being cautious about price increases and will reevaluate throughout the year [35] Question: Can you discuss the rollout of Project One Best Way and its impact? - Management reported that restaurants scored as "great" have doubled in two quarters, leading to better comps and customer return rates [44] Question: What are the top priority areas for reducing complexity in stores? - Management is focused on optimizing tools and processes to make work easier for team members while maintaining food quality [49] Question: How significant is the impact of storms on first-quarter performance? - Management estimated the impact of storms to be about 320 basis points, with some weeks showing positive momentum when weather is favorable [54] Question: Can you elaborate on the Infinite Kitchen's performance? - Management noted that Infinite Kitchens are delivering higher AAVs and improved operational metrics, with plans to continue expanding this format [77] Question: What are the implications of wraps for operational complexity? - Management confirmed that wraps will not add complexity and will integrate well with existing workflows, including Infinite Kitchen operations [83] Question: How is the company planning to improve its marketing and value communication? - Management plans to enhance brand awareness and optimize marketing strategies to better communicate value propositions to customers [90]

Financial Data and Key Metrics Changes - For Q2 2025, the company reported total sales of $185.6 million, a slight increase from $184.6 million in Q2 2024, with a same-store sales decline of 7.6% [5][17] - Restaurant level margin for the quarter was 18.9%, down from 22.5% year-over-year, primarily due to sales deleverage and tariff impacts [22] - The net loss for the quarter was $23.2 million, compared to a loss of $14.5 million in the prior year [24][25] - Adjusted EBITDA was $6.4 million, down from $12.4 million in the prior year [25] Business Line Data and Key Metrics Changes - The average unit volume in Q2 was $2.8 million, with nine new restaurant openings, four of which were Infinite Kitchens [18] - The company closed two older restaurants in New York City, redirecting volume to newer locations, which saw same-store sales increase by 15% to 20% shortly after [20] Market Data and Key Metrics Changes - The company experienced a 2.5% benefit from menu price increases, but a negative 10.1% impact from traffic and mix [18] - The Northeast market continued to show pronounced pressure, aligning with broader industry trends [62][94] Company Strategy and Development Direction - The company plans to open at least 40 new restaurants in 2025 and enter four new markets: Arkansas, Sacramento, Phoenix, and Cincinnati [21] - The focus remains on enhancing the value proposition through menu innovation and a revamped loyalty program [8][26] - The company is implementing Project One Best Way to improve operational excellence and consistency across restaurants [12][38] Management's Comments on Operating Environment and Future Outlook - Management acknowledged a challenging quarter due to external headwinds and internal transitions, but expressed confidence in the recovery plan [6][26] - There are early signs of improvement in same-store sales and guest frequency due to the rollout of seasonal menus and the loyalty program [30][57] - Management emphasized the importance of delivering excellent guest experiences as a key driver for future growth [31][79] Other Important Information - The company is seeing improvements in labor costs and team member retention, with head coach stability at an all-time high [43][44] - The transition to the new loyalty program created a temporary headwind, but management expects it to become a tailwind as customer engagement improves [72][74] Q&A Session Summary Question: Are there signs of same-store sales improvement in Q3? - Management confirmed modest improvement in same-store sales due to the seasonal menu rollout and loyalty program [30] Question: What are the biggest operational issues currently? - Management identified throughput and food quality as key focus areas, with ongoing efforts to improve these metrics [31][36] Question: Can you elaborate on labor cost improvements? - Management noted that labor costs per store week have improved due to better workforce management and lower turnover rates [41][43] Question: Are there plans to slow down development to focus on same-store sales? - Management expressed strong conviction in long-term growth and plans to maintain the development pipeline while ensuring operational readiness [51] Question: What is driving the restaurant level margin guidance down? - Management indicated that the primary driver is sales deleverage, with some impact from increased portion sizes [53] Question: How is the loyalty program performing? - Management reported that the loyalty program is seeing steady growth in membership and frequency, with expectations for it to become a positive contributor [72][74] Question: Is there a degradation in price value perception? - Management believes the issue is more about execution rather than price value perception, emphasizing the need for consistent delivery of quality experiences [78][79]