Financial Data and Key Metrics Changes - The company reported record high net sales, gross profit, and operating income for fiscal year 2025, with consolidated net sales growing 5% to $475.4 million in the fourth quarter [4][8] - Gross profit increased by 8.7% to $106.1 million, with gross margin expanding by 70 basis points [10][12] - Diluted earnings per share decreased by 6.3% to $1.18, impacted by restructuring and impairment charges [13][15] Business Line Data and Key Metrics Changes - In the retail segment, net sales increased by 3.1% to $241.6 million, driven by growth from licensing and the company's own brand [4][5] - The frozen dinner roll category saw a significant growth of 52.4%, increasing market share to 63.8% [6] - The food service segment's sales improved by 1.4%, although sales volume declined by 1.7% [7][8] Market Data and Key Metrics Changes - The company experienced strong results in the frozen garlic bread category, with sales growing 10% compared to a 3.5% increase for the category overall [6] - Sales of Chick-fil-A sauce grew by 17.2%, contributing to a market share increase of 30 basis points [6] - The overall market for the food service segment is showing modest improvement, with casual dining and QSR segments performing variably [25][26] Company Strategy and Development Direction - The company aims to accelerate core business growth, simplify the supply chain, and expand through focused M&A and strategic licensing [18][19] - New product launches are planned for the upcoming year, including Texas Roadhouse dinner rolls and other core brand items [19][20] - The company is focused on integrating the newly acquired Atlanta-based facility into its operations while optimizing its manufacturing network [20] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding consumer spending, anticipating modest tailwinds from potential decreases in interest rates and stable crude oil prices [60][61] - The company expects to see low single-digit volume growth in retail and a flattish profile in food service for fiscal year 2026 [65][66] - Input costs are anticipated to experience modest inflation, which the company plans to offset through pricing strategies and cost savings programs [20][66] Other Important Information - The company reported a 16.7% increase in selling, general, and administrative expenses, primarily due to higher marketing investments [10][11] - Capital expenditures for fiscal year 2026 are forecasted to be between $75 million and $85 million, with continued investments in cost-saving projects [14] Q&A Session Summary Question: Thoughts around food service and QSR industry traffic expectations for FY 2026 - Management noted that the food service industry is showing modest improvement, with casual dining focusing on value and QSRs beginning to stabilize [25][26] Question: Visibility into soybean oil pricing and its impact - Management acknowledged soybean oil's significance in their commodity basket, indicating that current pricing is manageable and not expected to be a near-term headwind [30][36] Question: G&A spend and its components - The increase in G&A spend was attributed to marketing investments, integration costs, and timing of expenses, with expectations to grow in line with inflation moving forward [44][50] Question: Volume trajectory in food service and impact from LTO reductions - Management confirmed that while there were headwinds from LTO reductions, growth from other customers helped offset these impacts, with expectations for continued positive trends [78][80]

Financial Data and Key Metrics Changes - Total company revenue increased by 4% to $265 million, with comparable store sales growth of 1.2% and adjusted EBITDA of $87 million [4][20][22] - Adjusted EPS was reported at $0.11, reflecting the strength of the UWC subscription model [20][28] - EBITDA margin decreased by 200 basis points to 32.8%, primarily due to sales deleverage and a challenging year-over-year comparison [27][28] Business Line Data and Key Metrics Changes - UWC subscription sales represented 76% of total sales, with UWC membership growing by approximately 5% year-over-year [20][22] - Retail comparable store sales decreased in low double digits, impacted by unfavorable weather and a tepid consumer environment [4][22][31] - Best Express revenue per member increased by approximately 4% to $29.23, driven by successful price increases [24] Market Data and Key Metrics Changes - Car wash spending increased roughly 5% in Q2, indicating strong demand in the industry despite a more competitive environment [6][9] - The company noted that competitor new builds are decelerating, which is seen as a positive for the broader industry [20][21] Company Strategy and Development Direction - The company is focused on operational excellence and has laid a robust foundation for continued growth and market share expansion [9][10] - There is a strategic emphasis on disciplined capital deployment, prioritizing high-performing markets for new store openings [34][56] - The company is optimistic about future growth opportunities, including potential M&A as valuations begin to rationalize [56][59] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the softer top-line trends due to unfavorable weather and consumer spending patterns but remains confident in the long-term strength of the business [4][31] - The company is monitoring evolving consumer dynamics and has slightly revised its full-year guidance to reflect a more cautious outlook on retail consumer behavior [31][34] - Management expressed confidence in the resilience of the subscription model, which provides a reliable revenue base [20][28] Other Important Information - The company added four new Greenfield locations, bringing the total to 522 stores [5] - Significant investments in repairs and maintenance were made to ensure the long-term health of the stores [5][64] - The company is seeing early wins in efforts to stimulate retail traffic and membership sign-ups [6][15] Q&A Session Summary Question: Marketing strategy and balancing spend with current macros - Management emphasized a blend of awareness and promotional campaigns, with encouraging results from recent tests [38][39][41] Question: Competitors' pricing strategies - Management noted that there is a trend towards rationality in competitor pricing, with less aggressive discounting observed [42] Question: Titanium membership sign-ups and retention - Management is optimistic about the stickiness of new titanium sign-ups, despite some expected churn [46][47] Question: Performance of new units - New builds are performing well, though some are taking longer to ramp up due to increased competition and site selection challenges [53][54] Question: M&A opportunities - Management sees M&A as a key growth opportunity, with a focus on quality assets and strategic fit [55][56] Question: Weather impact on Q2 performance - The lack of favorable weather was noted as a contributing factor to softer retail performance in Q2 [81][82] Question: Retail comp expectations for the back half of the year - Management anticipates continued softness in retail comps, particularly among lower-income demographics [89][90]