Financial Data and Key Metrics Changes - Total revenue for the first quarter was $166.3 million, up from $157.9 million in the same period last year, reflecting a year-over-year increase [30] - Same store sales declined by 3.1%, with a 3.4% benefit from menu price increases and a negative 6.5% impact from traffic and mix [30] - Restaurant level profit margin was 17.9%, compared to 18.1% a year ago, while restaurant level profit increased by 4% year over year to $29.7 million [31] - Net loss for the quarter was $25 million, an improvement from a loss of $26.1 million in the prior year [32] - Adjusted EBITDA was $300,000 for the first quarter, indicating slight profitability [33] Business Line Data and Key Metrics Changes - Five new restaurants were opened, bringing the total to 251 [11] - The average unit volume in the first quarter was $2.9 million [31] - The Infinite Kitchen format is showing strong performance, delivering higher digital sales and operational efficiencies compared to traditional formats [12][37] Market Data and Key Metrics Changes - Same store sales grew in more than half of the markets, particularly in the Upper Midwest, Texas, and Colorado, which all experienced double-digit growth [30] - The company noted a decline in sales trends in major markets like New York, Boston, and Los Angeles, attributed to broader consumer slowdown [9][62] Company Strategy and Development Direction - The company aims to revolutionize fast food through menu and technology innovation, strengthen guest connection, and strategically expand its footprint [10] - Plans for 2025 include entering three new markets (Sacramento, Phoenix, Cincinnati) and opening at least 40 new restaurants, with 20 featuring the Infinite Kitchen [14] - The company is focusing on menu innovation, including the recent launch of Ripple Fries and a collaboration with a Michelin-starred Korean steakhouse [15][18] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the uncertain macro environment and declining consumer sentiment, which has impacted sales [27][39] - The company remains confident in its ability to deliver long-term value through its loyalty program and menu innovations [28][41] - Management expects a challenging second quarter but anticipates a recovery in the latter half of the year due to easier comparisons and seasonal menu launches [71] Other Important Information - The company has launched a reimagined loyalty program, SG Rewards, which has seen strong adoption with 20,000 new digital customers added weekly [21][103] - The implementation of an AI-powered workforce management system is expected to enhance operational efficiency and reduce absenteeism [23] Q&A Session Summary Question: Clarification on tariff impacts on build-out costs - Management clarified that the build-out cost for new restaurants will see a 10% increase due to tariffs, with specific impacts on the Infinite Kitchen format [46][47] Question: Plans for mid to lower-priced menu items - Management indicated that they are exploring seasonal menu options and loyalty program promotions to introduce more mid to lower-priced items [52][56] Question: Geographic performance differences - Management noted that Los Angeles is still recovering from the wildfires, while changes in DC performance were also observed [62][63] Question: Sales cadence expectations for 2025 - Management expects a challenging second quarter but anticipates improvement in the latter half of the year due to seasonal offerings and the loyalty program [71] Question: Impact of tariffs on Infinite Kitchen deployment - Management confirmed that current tariff structures would not change the deployment strategy for Infinite Kitchens [74] Question: Updates on capital allocation and investment priorities - Management reiterated the commitment to 15% to 20% annual unit growth, emphasizing strong returns on capital for new stores [100][101]