Michael Skipworth – Chief Financial Officer Charlie Morrison – Chairman and Chief Executive Officer.

John Glass – Morgan Stanley David Tarantino – Robert W. Baird Andrew Charles – Cowen and Company Jeff Farmer – Wells Fargo Jeffrey Bernstein – Barclays Gerrard Lim – Goldman Sachs Will Slabaugh – Stephens Inc. Matthew DiFrisco – Guggenheim Securities.

Good day, ladies and gentlemen, and thank you for standing by, and welcome to the Wingstop Inc. Fiscal Second Quarter 2017 Earnings Conference Call. [Operator Instructions] Please note that this conference is being recorded today, Thursday, August 3, 2017.

On the call, we have Charlie Morrison, Chairman and Chief Executive Officer; and Michael Skipworth, Chief Financial Officer. I would now like to turn the conference call over to Michael. Please go ahead..

Thank you, operator, and good afternoon, everyone. By now, everyone should have access to our fiscal second quarter 2017 earnings release. A copy is posted under the Investor Relations tab at Wingstop.com. As you know, our discussion today will include forward-looking statements.

These forward-looking statements are not guarantees of future and performance and therefore you should not place undue reliance on them. These statements are also subject to numerous risks and uncertainties that could cause actual result to differ materially from what we expect.

Our recent SEC filings contain a detailed discussion of the risks that could affect our future operating results and financial condition. As usual, we will discuss certain non-GAAP financial measures that we believe to be useful in evaluating our performance.

The presentation of these additional information should not be considered in isolation or as a substitute for results prepared in accordance with GAAP. Therefore, reconciliations to comparable GAAP measures are contained in our earnings release. With that, I would like to turn the call over to Charlie..

Thank you, Michael, and good afternoon, everyone. Welcome to the call, and thank you for your interest in Wingstop. We continue to see good momentum in our business. And in the second quarter we once again delivered great results for our shareholders.

I'm extremely proud of our franchisees and our team members in their commitment to our mission to serve the world flavor, including their intense focus on executing our business model and distinguishing Wingstop from other concepts placing it firmly, as we've stated, in a category of one.

As we noted on our last earnings call, during the back half of the first quarter and into the beginning of the second quarter, we saw the early positive results of our national television and digital advertising. That momentum continued through the second quarter resulting in 2% domestic same-store sales growth and a positive comp year-to-date.

Our 2% growth was inclusive of the impact of a shorter NBA finals, five games this year compared to 7 last year and Easter holiday shift. Wingstop is on track to deliver its 14th consecutive year of positive same-store sales growth.

This top line momentum resulted in system-wide sales growth of 14.1% and a total revenue growth of almost 9% yielding an adjusted EBITDA increase of 18% and net income growth of 29%. We are pleased with the productivity of our development pipeline. And we're confident in our ability to deliver on our unit growth target for 2017.

We opened 25 net new restaurants in the second quarter representing system-wide unit growth of 15.5%. While a solid number, we believe the timing delays affected net unit openings in the second quarter. That belief is reinforced by 11 new restaurant openings already in July. Our international business is expanding nicely.

We opened our first restaurant in Malaysia during the quarter. We now have 89 restaurants outside the U.S. in 6 countries. In May, we announced the development agreement to open 100 locations in the United Kingdom over the next 12 years, and the first Wingstop restaurant in the U.K. will be opened before the end of this year.

Our brand brings excitement to an underserved chicken category in the U.K. and at the same time, it furthers our objective to be a top-10 global restaurant brand.

In the U.S., recently acquired two existing franchised restaurants in the Dallas market at the end of the second quarter as part of our opportunistic approach to company restaurant expansion. These are high-performing restaurants that generate annual volumes in line with our current company-owned restaurant AUVs.

And we expect these restaurants to operate at similar margins. This acquisition enables us to leverage existing personnel and infrastructure, supporting our company restaurants. Inclusive of this transaction, we now own and operate 16 restaurants in Dallas and 23 total.

As I mentioned earlier, we are very pleased with the results of our national TV and digital advertising. Both bring greater awareness of our highly differentiated brand to our target audiences. In fact, the effective reach of our TV campaign with adults 18 to 49 has exceeded our projections, and we're seeing traction across all geographies.

Improvement is more pronounced in our non co-op markets, which previously had no TV exposure. We continue to see growth in our digital mix which was 20.7% of total sales as we exited the second quarter. More than 54% of our domestic restaurants are generating 20% or more of their sales online, up from 27% in the second quarter last year.

We are also excited to share the results of our initial delivery test in the Las Vegas market. As you may recall from our last call, we have been testing delivery in the Las Vegas market since April. There are 10 Las Vegas locations, of which five are company-owned and five are franchised, which made it an ideal place for us to test delivery.

Prior to the test, Las Vegas had same-store sales trend that were generally in line with the rest of the system. The test produced a 10 percentage point increase in the same-store sales growth which was very encouraging and primarily driven by an increase in transactions.

Early indications suggest that there was minimal cannibalization of our existing takeout business. We also saw an average check for delivery that was $1 higher than the average digital check prior to the test. The results from our Las Vegas test are very encouraging.

One of the strategic imperatives in the test was preserving the quality and integrity of our food which will always be our number one priority. Based on our market research conducted and consumer feedback received, we believe we were successful in preserving the great quality food for which Wingstop is known.

Our intention is to use the learnings from the – from Las Vegas and expand testing into another larger market this year to further evaluate the role delivery will play in our business.

We will also continue to evaluate third party services providers to ensure they have the resources to serve our guest in high quality and convenient manner while respecting the quality of our food. We believe the results of the next delivery test will provide the foundation for building a broader delivery strategy across the domestic Wingstop system.

As you would expect, we will be approaching the delivery opportunity in a thoughtful manner. We think delivery could play a larger role in our already highly successful business model, but we will move forward in a deliberate manner to ensure that we do right by our customers and our brand.

Another component of the successful Las Vegas market test was the rollout of a split menu where we priced our boneless wings at a lower price point than about bone-in wings. In our test, we experienced the favorable mix shift of customers to the boneless product. This shift is important because it helps food costs in our P&L.

Currently, our mix is roughly 33% boneless and 67% bone-in. Mix shift is important in the current inflationary bone-in wing environment. The rollout of the split menu pricing across the system is already underway, and we expect to be complete by the end of the year.

Split menu pricing is one way that we're addressing the significant bone-in wing inflation the market is experiencing. You can see in our company-owned restaurant margins the effect of 11% bone-in wing inflation during the first and second quarter.

As we look to the balance of the year, it does not appear as though there are any leading indicators that suggest that bone-in wing prices will decline from their current levels. Our efficient P&L is designed to weather the volatility of bone-in commodity wing pricing with our low risk factor and small roster sizes.

We believe that the rollout of the split menu which will allow for modest price increases on bone-in wings while driving mix towards boneless wings all of which is designed to mitigate the impact of the current bone-in inflationary wing environment. Before I turn the call over to Michael, I would like to discuss three other important topics.

First, I'm delighted to announce that our Board of Directors has authorized the quarterly cash dividend of $0.07 per share. The initiation of a quarterly dividend program demonstrates the desirable cash flow characteristics of a highly franchised model coupled with the strength of our overall business.

Our ability to begin an ongoing dividend this soon after our IPO is a reflection of our confidence in our category of one brand positioning. You will recall that a little more than a year ago, we paid a special cash dividend of $2.90 per share.

And ongoing return of capital to the shareholders in the form of a regular quarterly dividend is now part of our ongoing commitment to driving shareholder value. Second, we recently announced Scott McLeod as our Senior Vice President of Operations.

Scott brings extensive operations experience in a franchise model as well as a breadth of experience in delivery. On behalf of our board and the entire management team, I want to welcome Scott to the Wingstop family.

And finally, as you should've picked up from our press release, Wingstop has named Michael Skipworth Chief Financial Officer, removing the interim title. We're pleased to have Michael officially take the reins of CFO.

He has contributed substantially to the Wingstop brand through its IPO to-date, and I know that many of you have come to know him already from Investor and Analyst meetings. So congratulations Michael. With that, I'll turn it over to Michael, our new CFO..

system-wide unit growth of 13% to 15%; domestic same-store sales of low single digits; SG&A expense between $36.5 million and $37.5 million; adjusted EBITDA growth of 13% to 15%; net income of $20.9 million to $21.2 million, up from previously $20.2 million to $20.5 million; fully diluted EPS growth of 23% to 25%, previously 19% to 21%; and finally, fully diluted share count should be approximately 29.3 million shares.

There are two items I want to highlight for modeling purposes. Due to the unpredictable nature of the timing around stock option exercises, the net income guidance provided for 2017 reflects an effective tax rate for the balance of the year at our normalized rate of 37% to 38%.

Also as I mentioned earlier, our franchisee convention occurred in Q2 of 2016 and will take place in the fourth quarter of 2017.

As a reminder, there is a net 0 impact to profit dollars from this event, but we will have expenses associated with the convention of roughly $0.9 million in SG&A in Q4 with offsetting revenue from support we receive to fund the convention. With that, I will now turn the call back to Charlie..

Thanks, Michael, and thank you all again for joining us this afternoon. We appreciate your interest and there is certainly a lot to be proud of right now at Wingstop. Our team rallied to reverse negative sales comps from the first quarter.

National advertising is paying off and our development pace nationally and internationally is on track to name but a few. I spoke earlier about our vision of becoming a top 10 restaurant brand. The commitment from our team and the skills they bring to bear, as they did in our Las Vegas test market, give me the confidence that our vision is achievable.

And beyond just the quarterly dividend that we have initiated, we're pleased to share the results of our efforts with you, our shareholders. But this time we'd be happy to answer any questions that you may have. Operator, please open the line for questions..

Thank you. We will now be conducting a question-and-answer session. [Operator Instructions] Our first question comes from the line of John Glass with Morgan Stanley. Please proceed with your question..

Thanks very much. Charlie, first, I just wanted to kind of confirm the comments you made on the comps accelerating. Obviously they accelerated versus last quarter.

Did they accelerate through the quarter? Or was there any notable cadence? Was exit momentum better than entry momentum, for example, I think you gave us a 7.75 number earlier on which is in 2s in the first quarter..

Yes, sure. John, we did give you the full quarter, and we did mention our quarter-to-date impact. We noted two events that happened during the quarter. One was the NBA finals having two less games. We believe that had about a 40 basis point impact to the comp.

And then the Easter flip flop, if you will, from first quarter to second quarter had about an 80 basis point impact. So if you combine those two together, they can give you perspective on the continued momentum we saw through the quarter..

All right. That's helpful. And then two other questions. One is on the splitting of the menu to pricing link bone-in versus bone-out. which I want to be clear, you lowered boneless, you didn't raise bone-in.

And as that mix change because it's lower price point, is that enough to adversely impact comp store sales on the ticket side?.

Yes. It does not necessarily means that we did not raise any price on the bone-in wing. But certainly, but we did do was created a favorable gap between bone-in and boneless. As we move across the country in various markets we will establish what we think is the appropriate price differentiation between the two products.

But in our initial testing and rollout, we have not seen that it's had an impact negatively on the check..

Okay. And then just finally on delivery. That 10% lift is a big lift. And I would assume it excites you.

What do you need to see in other markets, I guess, replication or service standards? And if you were to rollout it out to your entire system, what percentage of your system is currently covered by the delivery partners that you have? What percent could be delivered today if you wanted it to be?.

Well, I think – well, first of all, yes, we were really pleased with the results that we saw in our test. I think we noted last quarter and during the quarter with various conversations that Las Vegas doesn't necessarily represent the greatest opportunity for delivery mix in our business.

So as we expand throughout the country, as we phase this test in and we noted we were heading to another large market for delivery to expand this test. We would expect hopefully a comparable performance, can't guarantee that, but we certainly see that there is good incrementality through our business associated with delivery.

We were pleased with the fact that a lot of the delivery business actually came in via the Wingstop app and our dot.com presence beyond just the marketplaces for other delivery providers. So that was good. And it relates to the future and what we're looking for in these second rounds of tests.

We really want to make sure that the delivery partners can continuously deliver on the quality element for the occasion, meaning on time, hot food, timely arrival at the restaurants, et cetera. Those are going to be the very important pieces and parts to demonstrate that we can replicate the results of our Las Vegas test elsewhere..

And did you look at your map versus those partner's map and you understand how much you could get covered? What kind of coverage is available?.

Yes. It, obviously John, varies widely by the partner that we choose. I believe the partner that has the most presence to support us probably around 65% of our locations. They are all going fast, and they're all extending quickly to get beyond that. So we would expect hopefully upwards of 80% coverage in 2018.

And that probably be more along the time where we'd be looking in most of those markets anyway..

Great. Thank you..

You’re welcome..

Thank you. Our next question comes on the line of David Tarantino with Robert W. Baird. Please proceed with your question..

Hi, good afternoon. Charlie, you mentioned that the marketing or the advertising is having a more pronounced impact on non co-op markets.

My question is, are you seeing that impact build as you run more advertising? Meaning has the impact in those markets become greater the longer the advertising has being running?.

David, yes. I think we are seeing that momentum pick up. We talked a number of times with folks about the approach we took to our national advertising that we did not want to have a big splash at the very beginning followed by much lower TRPs, that we wanted this to be a building process.

And I would characterize the strengthening of the comp in those non co-op markets has been associated with the building level of brand awareness which is helping them translate into stronger sales growth..

Great, that's helpful. And then my next question is on sort of how franchisees are dealing with these high wing prices? And I appreciate, you're rolling out this split menu to help with that.

But I guess, if you think about the net impact you're seeing in that test? Was that enough for them to offset the impact that they're seeing in higher wing prices? or are they contemplating any other action, such as price increases on top of that change in order to hold their margins?.

Well, the benefit of the menu strategy we're working against is to separate the pricing of the two products, so that if we need to take some price on the bone-in wings associated with this extraordinarily high wing market right now, it gives us the opportunity to still then present a great value back to our guests.

So one of the risks of taking too much prices that you value scores will go down. We don't want to risk that and hence why we're doing this. So I think both can happen with this new strategy.

And as I mentioned before, market-to-market, we will decide what is the best solution for each of those markets, not only in terms of the gap between the bone-in and the boneless but also relative to bone-in wing prices that we feel like we need to take to offset some of the inflation that we're seeing..

Got it. And then last question.

Our franchisees expressing anxiety about wing prices at this point, to the extent that they're thinking differently about either investing in the business or growing units? And what's the current sentiment in the system?.

Well, at anytime in this – the phenomenon of the wing price at this level happened once before in 2012. So it's been quite a while. I think many of our franchisees are still – our existing franchisees are investing in our brand more than anybody else, which is always what you want. We've seen this before.

We would expect, ultimately over time that this would subside. But they are concerned about the pricing. There's no doubt about it. I'm concerned. This market is very unusual. There aren't a lot of good reasons at this point in the game why those wing prices should be this high.

But separate that from what do we do about the business and how do we continue to grow. We've built a brand with a very efficient operating model. And in our P&L, labor and rent being as low as they are excellent offsets to this type of inflationary-wing environment so that we still can deliver excellent returns for our franchisees, ultimately.

That's why we're also working collaboratively with them on these strategies around menu pricing while still creating value. And obviously, then we have the international advertising and the strengthening of our comp store growth.

All of those things factor in to our confidence that we'll be able to continue to invest, develop new restaurants and weather through this process..

Great. That’s helpful, thank you..

You bet..

Thank you. Our next question comes in the line of Andrew Charles with Cowen and Company. Please proceed with your question..

Great, thank you. My congrats on your role.

Just curious, when you talk about the incrementality of delivery sales, how are you guys measuring that, if you will? And what levels of incrementality did you see on the delivery sales in the pilot?.

And there were two different ways we measured that. One was looking at this market against a controlled set of restaurants in another similar market to identify how much the lift that we saw in Las Vegas was associated surely with the delivery.

We also looked at online occasions in this market and noted that a lot of our online orders – or prior to delivery, all of our online orders were predominantly carry-out orders. The delivery orders that cam in even through our own channel were new occasions to our business.

Now that – we don't know whether that was purely frequency or new customers, but nonetheless, our increase in total online sales mix was quite significant. And in this particular market we saw a online mix consistent with our delivery mix increase.

So those two metrics gave us confidence that much of the revenue that came in was incremental to the business..

Great. And then seeing that development maybe juring drilling a little bit. You know, you think about the Las Vegas market and just the reception that you saw for delivery and maybe there's learnings across the system as you roll delivery out.

How does this impact your decision around new store formats, principally smaller boxes, obviously, you've limited seating to begin with. But grill stage selection obviously can get a little bit wider.

And I guess, kind of a broad question thinking about how this impacts your development strategy? And if the 2,500 stores is still the right long-term number for you guys?.

An excellent question. A, I don't how it will affect 2,500, that's a long-term outlook. But at this point, what we're really trying to focus in on is delivering out of our existing restaurants and how that becomes a benefit to franchisee.

We haven't sat down and put any meaningful effort against how to design the restaurant, where to locate the restaurant or otherwise. I certainly know from my experience many years ago in pizza that transition from a dine in concept to delivering a carryout only is something that has happened. But for Wingstop, that's not something that's on our list.

The priorities right now, step one is, let's talk about delivery and what we can do to try and make that the most efficient and high-quality channel for our business it can be..

Great. And my last question is on split menu.

Can you just maybe assist, does this produce more favorable gross margins despite the lower price points on boneless wings?.

Certainly, the intent is for us to deliver a much more favorable gross margin. There is a substantial gross margin difference between bone-in wings and boneless wings at the exact same price points.

So even with this change, our gross margin on a bone-in wing or – excuse me, a boneless wing is still far, far better at these prices than a bone-in wing, yes..

Thank you..

Thank you. Our next question comes from the line of Jeff Farmer with Wells Fargo. Please proceed with your question..

Great, thank you.

What does the initiation of that quarterly dividend mean for a potential special dividend even one that's on a smaller scale, potentially?.

Jeff, it's Michael. I think what the dividend is going to do, it's to the cadence of our next return of capital when we leverage our balance sheet, as It's going to extend the horizon marginally. For the current horizon we looked at, and as spoken in the past about a Q4 to Q1 of next year cadence.

This will probably put us more in that key early half of 2018 cadence. But we'll continue to use our balance sheet to return capital to shareholders. So I don't think this necessarily eliminates that as an option as we look how to drive shareholder return..

Okay. That's helpful.

And then it came in a lot of conversations about or questions about you expanding that delivery test in to a new market, but can you just provide a little bit more color on the time line? When will you begin that second market test? You might have already said that, but more importantly, how long will you test in that market before you think you have what you need to see?.

The next market is currently in the planning stages and the discussion stages. So hopefully we'll be into that market within, I would say, a couple of months or so, tops.

The question as it relates to how long really has to do with making sure that the decisions that we're making, the things that we're validating in that test deliver on our expectations. The primary ones being food quality and order accuracy and getting that order to the guest in a timely manner.

At the same time, in parallel, still a lot of work to do in evaluating the right partnering strategy for third-party delivery for the brand in the future. So as we mentioned in the comments, we're going to take a very deliberate and careful approach to making sure we do this right for this brand..

That's helpful. And just really one sort of paired follow-up here. So 10 units in Vegas for that test, in your mind, do you see the next test being 30, 40, 50 units.

And then you just alluded to a – multiple test partners in Las Vegas as you go to the second market, are you going to potentially narrow that list of partners that you're working with?.

Yes, we will narrow the list. As it relates to the number of restaurants, certainly, we mentioned it's a larger market in the system. So that we can demonstrate that we can replicate it in a bigger metro area for us. But I can't give you a specific year account..

Thank you very much..

Thank you. Our next question comes from the line of Jeffrey Bernstein with Barclays. Please proceed with your question..

Great, thank you very much. Just following up on the wing price discussion. Charlie, I know you mentioned that it really hasn't happened to this degree since I think, it's the 2012.

I'm just wondering, what your experts or the partners you're working with are telling you, why are they not easing in the first place? And is this a new norm? That you'd expect to stay at this level? I think you mentioned, you have hope that it would ease at some point.

I'm just wondering what gives you that confidence?.

Yes, well, I think the question of confidence comes from a belief that most of the people that jump in and out of the wing market won't stated there very long at these elevated prices. That tends to help free up supply and then drives down the price.

What we're seeing right now is that there were many participants in the market well beyond the natural seasonality of wings that carried you beyond what's say the NCAA tournament. We used to see a nice drop and then the market popped back up, and we have a number of factors and why we think that happens.

Those players appear to be at least exiting the market, but what's happening right now is wing-oriented companies are filling their supplies for the upcoming football season and going into the Super Bowl events which we know are big times of the year, and they put further stocks away. So stocks are quite low.

Those will fill probably and that likely why we're seeing these prices hold. That's my personal opinion on what's going on, but informed through expertise in the market. But over time, we've seen the cyclical nature of the product.

I will tell you that from our perspective, we're going to look at this as, if it does sustain, what are we doing to make sure that we position the brand properly around it. And take the burden of the bone-in wing as best we can and provide great value through the boneless wings to our guests. So we think strategically.

That's the best way to approach this and hence why we're working against it. When the market does come back down, we'll be very well positioned against it. And I think that's the best position to be in then to sit back and watch and try to weather the storm all the way through..

Understood. And then, Mike – first, congratulations on the permanent promotion. In terms of that – the leverage you mentioned earlier, I think you said you're a 3.5-ishx now. I know your long-term target is 4 to 5.

Is there any reason this normal dividend has any impact on over time your goals still remain within 4 to 5? Or any change to that dynamic?.

No, Jeffrey. I don't think this dividend will really change our level of comfort around the leverage levels you referenced..

Got it. And lastly, so we – I know you're still confident in the unit growth for the full year. It does seem like it's somewhat back-half loaded.

I know you mentioned, there were 10 or so that just opened in July, but the message you're getting from franchisees is that they're still fairly confident in their commitments so you'll hit that number for the full year? Is that accurate?.

Yes, I think we certainly are confident in the back half commitments. We did have – what we mentioned was a bit of a timing delay in the second quarter. And confirm that, obviously, with our 11 stores that we opened in July alone. But we have leases in the pipeline for all the sites for the back half.

And most of those are under construction, as we speak. So we have good, good visibility into the back half and confidence in our guidance there..

Understood. Thank you..

Thank you. Our next question comes from the line of Karin Hulhouse with Goldman Sachs. Please proceed with your question..

Hi, this is Gerard on for Karin.

There's a little more time since the ad campaign launched, do you guys have any level of sense of contribution of attracting new customers versus driving frequency?.

Some, and the answer is a little above, but certainly we are seeing a lot of new customers as evidenced in these non co-op markets we described or the markets that are relatively new and emerging for Wingstop that didn't have TV advertising before. Their growth rate is outpacing the more – the bigger, stronger and more established markets.

And that's good news. And that generally is from new guests to the system. We did see, during the quarter, the beginnings of a rebound of some frequency loss that we saw in our core customer, our heavier users in the first quarter. And we've – if you recall, we associated a lot of that with the election and then also with the delays of the tax reforms.

So overall, we're seeing that frequency pick back up. At the same time, we're seeing a lot of growth. Growth is outpacing the increase of frequency. So I think that's a good indication that we're getting the customers into the business..

Great. Thank you..

Thank you. Our next question comes from the line of Will Slabaugh with Stephens Inc. Please proceed with your question..

Thank you. I have a follow-up from the advertising comment. You mentioned you're pleased with how it's going so far and things like it is helping to improve the sales trajectory.

I'm curious on kind of how you're measuring that success? If you could go into a little more of that? And then if you could talk about what looks like more branded advertising currently versus the potential to put more of a call to action, if you will, on the ad and your thoughts around either of those strategies?.

Sure. Again, I think the way we measure this is by watching awareness of not only the TV spots themselves which we monitor, but also awareness of the brand. And then how we're doing and how effectively we are in terms of converting those into new occasions in the business.

So those are the primary benchmarks by which we determine the effectiveness of our national advertising, all metrics increasing.

Certainly as I mentioned on the previous comment, in the markets where we did not have advertising before, we're seeing the pace of increase awareness growing faster which has a consistent – it's consistent with the rate of growth as well.

As it relates to the TV commercials themselves, as we are launching the brand in new markets effectively, we want to continue with a branded message that talks about the high-quality product to focus on wings, the uniqueness of our flavors and then sprinkle in discussion around how to order it to drive additional online mix.

Historically, in our core markets where we did TV advertising, we did talk about new flavors events, things like that. We won't to use TV for that going forward. For now, we will use our digital marketing which is a heavy mix of our overall advertising budget, but that will be the area where we'll do a lot more of the activations.

So that's where you'll see a price point offer or a flavor offer or something like that..

Got it. Thank you..

You’re welcome..

Thank you. Our next question comes from the line of Matthew DiFrisco with Guggenheim Securities. Please proceed with your question..

Thank you. Just got a couple of follow ups and then one question.

With respect to the same-store sales comments with delivery, you said I think it was 10% higher store lift than those without delivery in those markets? Is that correct?.

It is a 10% higher comp in the Las Vegas market than against the trend against other markets, yes..

So if I were to look at five stores out of 25 or 26 of company owned stores, what am I missing? Why wasn't your comp stronger than from the company owned side? Are you pulling those stores out of the comp base?.

No, they are in the comp base. It's five out of 25. I would tell you that sequentially from Q1 to Q2, our company stores went from a negative 5.1 comp to a positive 0.8.

Now we did note that in some of the Texas locations, we have experience some cannibalization associated with the opening up of both company and franchise locations in the Dallas market, primarily. But when you look at that move in the comp from one quarter to the next, a large part of that is driven by the strong performance of our Las Vegas market..

Understood. That's very helpful. You've mentioned, also a comment with the TV, and you said you're exceeding your projections on the reach to 18 to 49 year old's.

Can you give us some numbers around that? I think, what is the – how are you reaching more people? or what is that number?.

I don't have any specific statistics with me right here. We could probably compile a couple of things on reach to get back to you on. Really what I commented on a minute ago is more about brand awareness metrics and the increasing level of brand awareness in those markets.

But I don't have anything specific right here with that I can share with you, but we could talk about that topic later..

Understood. Just last question. The July month has been some of a choppy month for a lot your competitors, especially that the first week where the 4th of July falling on the Tuesday, I guess, caused some people to treat it as a vacations, little bit more than years past.

So I was wondering, did you – is there anything that you want to call out that you might have seen as well in the month of July? Or was there not any anomalies or any impacts from that Tuesday falling on the 4th of July?.

Yes, I won't give you any specifics in terms of absolute performance. However, I will tell you there were no anomalies, no unusual events, nothing that in the month of July that we would consider to be outside of the just general momentum and trajectory of the business..

Excellent. Thank you..

You’re welcome..

There are no further questions at this time. This does concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation and have a wonderful day..