Financial Data and Key Metrics Changes - Global system-wide sales declined by 1.8% on a constant currency basis, driven by a 3.6% decrease in same restaurant sales in the U.S. [33][16] - Adjusted EBITDA was $146.6 million, an increase of 2.5% year-over-year, while adjusted earnings per share rose by 7.4% to $0.29 [38][18] - Free cash flow generated in the first half of the year was $109.5 million, reflecting strong cash generation capabilities [39] Business Line Data and Key Metrics Changes - The U.S. same restaurant sales declined by 3.6%, partially offset by a higher average check, while same restaurant sales at U.S. company-owned restaurants outperformed the U.S. system by almost 300 basis points, declining only 0.7% [33][34] - The international segment achieved system-wide sales growth of 8.7%, with notable increases in Japan (27%) and Mexico (16%) [35][34] Market Data and Key Metrics Changes - The company anticipates full-year global system-wide sales to decline between 3% to 5% year-over-year, reflecting a challenging competitive environment and dynamic consumer behavior [48][29] - U.S. company-operated restaurant margin is expected to be around 14%, with commodity inflation projected at approximately 4% [49] Company Strategy and Development Direction - The company is focusing on improving execution and performance while maintaining its long-term strategy, emphasizing the importance of franchisee partnerships [5][6] - Key strategic priorities include fresh food innovation, enhancing customer experience, and accelerating net unit growth, with a target of 2% to 3% net new unit growth for the year [30][27] Management's Comments on Operating Environment and Future Outlook - Management acknowledged that the consumer and competitive environment has changed significantly, leading to a revised outlook for the year [4][29] - The company is committed to strengthening its franchisee relationships and improving operational efficiencies to drive better results [14][15] Other Important Information - The company returned over $88 million to shareholders through dividends and share repurchases in the second quarter, totaling over $262 million in the first half of the year [18][43] - The company is on track to return approximately $325 million to shareholders in 2025, an increase of $40 million compared to 2024 [43] Q&A Session Summary Question: Assessment of marketing value menu performance - Management noted that the first half of the year faced challenges due to changing consumer behavior and weather impacts, leading to a reassessment of marketing strategies for the second half [61][60] Question: Franchisee sentiment and alignment on value - Management indicated that franchisee relationships are good but can be improved, emphasizing the need for better communication and prioritization of initiatives [72][74] Question: Revisiting U.S. franchise development - Management confirmed a commitment to improving franchisee economics through new data analytics capabilities and detailed P&L discussions at the restaurant level [86][87] Question: Customer satisfaction and same-store sales growth - Management is actively tracking customer satisfaction and believes improvements will lead to increased frequency of visits, with positive trends already observed [90][91] Question: Core menu pricing strategy - Management acknowledged the need to evaluate core menu pricing and emphasized the importance of quality in conjunction with pricing strategies [96][98] Question: Changes to chicken patty and focus on chicken - Management confirmed the use of high-quality ingredients for chicken products and expressed confidence in the new chicken tenders outperforming competitors in tests [107][108]

Core Insights - The Europe Ready to Drink Coffee market is projected to grow from US$ 2.48 billion in 2024 to US$ 4.59 billion by 2033, with a compound annual growth rate (CAGR) of 7.10% from 2025 to 2033 [1][20]. Market Dynamics Growth Drivers - Increasing coffee consumption and busy lifestyles are driving the demand for convenient ready-to-drink (RTD) coffee options [4][5]. - The growing coffee culture in Europe, particularly among younger generations, is leading to a higher demand for specialty and premium coffee products [4][8]. - Health-conscious consumers are seeking healthier RTD coffee options, such as low-calorie and sugar-free alternatives, which are becoming more popular [5][6][10]. - Sustainability concerns are influencing consumer purchasing decisions, with a significant percentage of consumers considering sustainability when making purchases [7]. Challenges - The RTD coffee market faces challenges related to shelf life and preservation, as perishable ingredients can affect flavor and nutritional value [15][16]. - Health and dietary concerns are also significant, as consumers increasingly prefer low-sugar and plant-based options, prompting manufacturers to adapt their product offerings [17][18]. Consumer Preferences - There is a growing demand for diverse flavor profiles in RTD coffee, with consumers seeking unique taste experiences beyond traditional coffee [12][14]. - The trend towards health-conscious choices is leading to the inclusion of functional additives like proteins and vitamins in RTD coffee products [11]. Company Analysis - Key players in the European RTD coffee market include Arla Foods amba, Crediton Dairy Ltd, Emmi AG, illycaffe S.p.A., Luigi Lavazza S.p.A., Nestle S.A., PepsiCo, Inc., Rauch Fruchtsafte GmbH & Co OG, Sodiaal Union, and The Coca-Cola Company [25].