Restaurant Brands International Inc. (QSR) Earnings Call Transcript & Summary

Okay. Thanks so much. I am Lauren Silberman. I'm the equity research analyst here at Deutsche Bank covering restaurants and food distributors. Thrilled to be here today with Patrick Doyle, Chairman of Restaurant Brands International. Patrick, thanks so much for being here.

Thanks, Lauren.

So we'll start a bit high level. You joined RBI about 2.5 years ago as Executive Chairman. A lot has happened over the last few years. Given a pretty volatile backdrop, a lot of changes at RBI. Can you talk about what attracted you to join RBI, in the first place, that thesis? What's been the most surprising to you, some of the biggest accomplishments perhaps?

Yes. Thanks, yes. So it's 2.5 years ago. I mean I really came at it as an investor, right, and looked at what the opportunity was in the business, the changes that I thought might be able to be made, the value that I thought could be created. And it was interesting because, I mean, I really did look at it as an investor. And what I saw was, first, there were questions around Tim Hortons, which is our biggest business. And I thought those questions were just flat-out wrong. Business is amazing. The team has done an incredible job. We've had the same leadership there for 6 or 7 years. They laid out a plan to really just improve everything out there. The food has been improving, the speed of service. The restaurants are in great shape. And it's just performed incredibly well. And so my degree of confidence in that gets higher and higher. And they're doing a spectacular job. Our second biggest business is International. It's been outperforming our peers. The team is doing a terrific job there. You're always going to have issues. And I'll talk about BK China in a second, but there are always going to be things that you're chasing. But overall, our performance on the International business has been great. And I think the biggest new thing there is that you're going to see going forward probably as much growth from the other brands, particularly Popeyes, as you do from Burger King. And that's just continuing to accelerate, so we feel great about that business. Third biggest business is BK in North America. That's obviously been the fixer-upper. That's the one where the team had already started on it. And frankly, the fact that they clearly recognized that the brand needed serious work. They had already announced Reclaim the Flame as I was looking at it. And my view was, yes, they're right. This is what needs to be done. There are no great-performing restaurant stocks that are not part of an amazingly well-run restaurant brand. And Burger King was not where it needed to be. The assets were getting old, and we had franchisees that were not making enough money, some of whom were not in their operations the way they needed to be. They were more owners than operators. So that one is -- it's a longer-term fix, but very excited about the progress we're making, getting great returns on remodels. So all of that is going in the right direction. We've had relative outperformance, I think, 5 out of the 6 last quarters on Burger King. So moving forward there, Popeyes is fantastic, amazing brand, growing fast around the world. I was checking the other day. I think we're making 4x the EBITDA that we made when we bought it. In 2018, it was making about 90 million. And as -- if you add the North American business to what we're doing in International, I think we're kind of 4x. So great brand. And then Firehouse, early, relatively small, accelerating unit growth, so happy there as well. So overall for me it was, are they -- I think really just about a recognition issue. On Tims. I think International may not have been appreciated enough, but doing incredibly well. And then Burger King, a lot of concerns about that. And I looked at it and said, look, this is pretty straightforward what needs to be done. We need to get the assets fixed. We need to run them better. And if we do that, I think we're going to get on the right track, and we're seeing that.

Great. One of the biggest changes that you brought to RBI from my seat is to focus on franchisee profitability, the transparency around that to the financial community, so having established strong cash-on-cash returns at your previous role at Domino's. What are some of the insights that you think RBI can leverage to improve those cash-on-cash returns? Any internal target that you guys have on this?

Yes, yes. So I mean look. At the end of the day, our job as a franchisor is to create an opportunity for entrepreneurs, for operators to make a great return on their investment of capital and their investment of time. And some of our brands are in great shape on that. Tims is a terrific return. Firehouse is actually very good. Popeyes has been improving, but you've got to be able to generate more and more demand for your restaurants. That's what's going to generate growth. That's what's going to allow you to upgrade franchisees where they need to be upgraded, get better owners in. It's what's going to allow the franchisees to reinvest in their restaurants to attract the right people to run them, all of that. So we basically set goals. We're north of 300,000 in cash flow for Tims in Canada. Our goal is to get to 300,000 with both Popeyes and Burger King. Popeyes is well on the way. Burger King is progressing but still has a few years to go, I think, before it's going to get there. That gets, you for those 2 brands, to kind of 5- or 6-year, probably 6-year, paybacks, which -- that's okay. I mean that starts to work. It's an attractive business. You need to still grow from there, but that's kind of the mid-term target on both of those. Tims is amazing. I mean, at 300,000-plus, the operators buy the equipment for the restaurants. We basically do the build-out. And you're looking at a 3-year payback on a Tims in Canada. You're at about a 4-year payback for Firehouse. I think that's going to work down over time. So we're in good shape there. And then for master franchisee, it's kind of a different deal. You've got to have a longer-term view on the business. They've got to invest in supply chain and bigger teams and that sort of thing.

Great. Let's talk a little bit about the consumer. You have vast experience in the restaurant industry. You've seen different cycles. What are you thinking about the state of the consumer from here?

As long as employment levels stay healthy, then we're in good shape. And so far, they are. We've seen a little bit of weakness with employment in Canada. You're really not seeing any in the U.S. yet. And that's really the key because at the end of the day, we all look at the relative gap on food at home versus food away from home, kind of pricing there and the relative value of that for people. And that's going to drive a lot of the health of the restaurant industry over time. But overall, people are willing to pay for the convenience of prepared food of restaurant food if they're employed. If they're unemployed, they're just not going to do that anymore. And we saw that certainly during the pandemic. Some of our businesses, particularly Tims, when you're still -- half of our business is before noon. We're selling a lot of coffee to people on their way to work. They weren't going to work. It's obviously going to hurt the business. But the employment level is really the key determinant of the health of the category overall. And so far, that's looking okay.

Great. Let's shift a little bit to development. You recently updated your long-term outlook and now expect to build to 5% by '28. I guess, first, if you could just talk about the shortfall relative to your prior expectations. I think Burger King China is really the primary piece, but any impact from other key markets causing some near-term pressure? Kind of where are you in the Burger King sort of, I'll say, portfolio optimization and cleaning up that?

Yes. So China really is the variant, right? I mean that's the big thing for us. And we've taken that on ourselves. We're going to get that going in the right direction. But if you look at -- as we kind of lay out the path to that 5%, we need basically 3 things. So over the next 3 or 4 years, we think we can get to 400-unit net growth in North America from the brands. That's going to come from growth in Tims, which we have not had in a long time. We actually think we can penetrate more deeply. There are areas of Canada where we are underpenetrated as remarkable as that seems for a business that's already got almost 4,000 restaurants up there, but there is actually an opportunity. Canada has grown 20% since 2010. You've got about 7 million more Canadians in the last 15 years and we've fundamentally not grown our footprint. So we think there's a real opportunity there. You're going to see Burger King stabilize. We're kind of to that net plus or minus 0 range now, which is better than it was the last couple of years. It may still be a little bit under, but we're getting close to that. At some point, we'll get back to growth. But right now, just getting it solid would be good and an improvement from where we've been. Firehouse is accelerating. So that's great. And I think you're going to see Popeyes kind of stay around 130 to 150 range, something like that. At some point, it can accelerate. We put a lot of focus on making sure it's the right franchisees opening restaurants, slowed it a little bit, but the returns are great there. The momentum in the brand is great. So 400 out of North America, 1,100 out of the rest of International, which is more and more, as I mentioned earlier, going to come from Popeyes. If you look back 5 years, 2019, I think 90% of our unit growth was coming from Burger King. Burger King is doing great. It's really that you've got these other brands now growing. So I think we're going to be to that range pretty easily. And then really the big variance is China. And we had a number of years, 5 years ago in a row where we were kind of 300-plus in China. We need to get back to that. And we've never had all of the brands, all 3 of the brands that are currently in China clicking at the same time. We've got to get that fixed. It's a small part of our overall business today. But obviously, as the second largest QSR market in the world, we've got to have a strong presence there. And one of the things that we look at is on any scale business, we've got to have a path to greatness and there was not a path to greatness there. And so we took it on. It's performing nicely. We've got a team in place. We're moving in the right direction on the business. We've hired Morgan Stanley. They're going to help us find a new partner for the BK business there. Popeyes is new, but performing very well. So we've just got to get China back to kind of where it was. And if we can get all of the brands clicking, it can probably do better than that. So if you've got 400 North America, 300 from China, 1,100 from the rest of International, you're at 1,800 restaurants. I think that's almost 6% right now. And so not all of that even has to work to get us to that 5%-plus.

Great. Let's dig a little bit deeper into the BK China side. You recently took control of it, as you talked about. What was the rationale for that transaction?

Yes. At some point, we got a partner there, had a partner there that is our partner in Turkey for Burger King and Popeyes. They've done a great job in Turkey, continue to. We're the #1 burger brand and the #1 chicken brand in Turkey. They actually did a very nice job of building our Burger King business in China for a long time. COVID hit. They chose not to go to China for about 3 years. I get it. It was very complicated, but the owner not being there and not being present meant that the business drifted. And ultimately their incentive when we all agreed it was time to make a change there. Their incentive is to get the highest price possible for the business. Our incentive is to find the best long-term partner for the business. And we finally decided that the best way for us to do this was to come to an agreement between us. We would take the business. We'd get a team in place. We'd get the business performing better than it had been performing. We're seeing early green shoots on that. It's heading in the right direction. And then we would take our time to find the right partner. And we've kind of committed that we want to get that done within a year. That's certainly our goal process has started. We've got a team fundamentally in place at this point. So we just decided it's too important. We can't wind up in a position where we're not thrilled about who the partner is going to be for the long term. And so we took control of it ourselves.

Kind of looking at this from the BK U.S. perspective. You also talk about operators on the ground being close to the restaurants. How have you transformed that BK portfolio to get it into the hands of, I'll say, smaller, more engaged operators and your thesis and thoughts behind that?

Yes, yes. I mean we want great operators, period. And the bias may be for smaller, but if they're larger operators and they're doing a great job, we're okay with that. We just want the restaurants to be really well run. But what we see and what I've seen previously in my career is there is a very direct correlation to how far the restaurant is away from the person who owns it. And having local ownership is incredibly important. See China with Turkish partners as example A, a little too far away. So even Burger King in the U.S., it's still the same answer. And so we've been working through that, looking through all of the franchisees, looking -- kind of grading them on performance, A, B, D and F and making sure that they're engaged, that they're operating in the right way, that they're committed to getting the remodels done. If they're not, we have a tough talk with them and say, look, we're going to give you a chance to improve your performance. If it's not improving, then we have to have a different conversation. And kind of the ultimate example of that was Carrols. Carrols, actually very good operators, above-average operators in our system, do a really nice job. We looked at it. And as a public company with 1,000 restaurants, we looked at what they were going to have to do to remodel that portfolio on the time frame that we had set as the goal. They were going to have to spend at least 100% of their free cash flow to get that done in 5 years, which they're never going to do as a public company, so we ultimately decided, look, if we're really going to do this, we're going to have local owner-operators. We're going to have beautiful remodeled restaurants. We've got to take control of the situation ourselves. So we did that. We're getting the remodel work done. But the other thing that we realized as we got into it originally said, look, we'll do this years 3 through 7. And we've looked at it and said, look, we've got a great operator who's ready to take over restaurants, whether it's an existing operator, whether it's somebody from within Carrols, who's going to move from being a regional director or a district manager who we think would be a great owner, and they're going to have the capacity to get the remodel done and they're committed to it, let's do it now. So we're going to get that process started. We are very committed to being a franchisor, not an owner and operator of restaurants. We're always going to have some. We think it's important to be in the game. We have far too many right now. And so we're going to get Burger King China into the hands of a new partner. We're going to get Carrols refranchised. We're going to make the story a little bit easier. We realized it's been a little complicated as we took both of those on. And I think that's going to make the story a little more simple from an investor standpoint. But in both of those cases, those were key to our being on kind of a path to greatness with those businesses: Burger King domestic, really important, #1 market, obviously, for Burger King, #2 QSR market, China. We had to take control of the situation, going to do that, get them back out again. And in both cases, we're making good progress.

Great. Let's stick on the Burger King side. You guys have obviously made significant investments in BK U.S. over the last few years, a lot of focus on that asset base. Can you walk through the strategic rationale for the Reclaim the Flame piece and where -- like what inning we are in terms of the turnaround today, where you expect that portfolio to go in the future?

Yes. So making really good progress. So we're north of 50% remodeled now in the portfolio. We're right on track for where we wanted to be, which is to get to 85% remodeled by the end of 2028. We bottomed at, I think, trailing 12 months, we were at about 130,000 in cash flow for an average Burger King in the U.S. That doesn't work. That's just not a sustainable model. And those franchisees with those economics weren't going to be able to remodel those restaurants. So at the end of the day, we had to step up to improve the returns for them as they did it. We needed to have the franchisees know we were side-by-side with them to get this turned around. The system had shrunk a bit, so our advertising spend was down, so we went in and said, look, we'll go first. If we'll all agree on some commitments for more advertising over time, tied to the performance of the portfolio, we'll commit some advertising dollars. We'll subsidize the remodels of the restaurants. And I'd repeat, all of that was in place before I got here. And it was part of what got me excited. I looked at it and said, yes, this is the right thing to do. This is the commitment. This is how you get this business back on track. We're seeing it. The returns now on the remodels are really good. We're very pleased with how those are performing at kind of mid-teens-plus. The Sizzle format is doing even better than kind of the previous new image. So we're really happy with the progress we're making.

You've made significant improvements on the franchisee profitability side and you guys are doing a good job with aligning with the franchisees. How has sentiment changed amongst the franchisees?

It's dramatic. It's really remarkable. I mean the -- and particularly the franchisees who have been doing a good job, and it's the majority of them now, are looking at what we're doing and they're saying, look. keep doing it. Some of them very vocally publicly, some of them more quietly to us behind the scenes, but either way, they're saying this was the right thing to do. I'm running my restaurants right. The restaurant down the road is not being properly run. It damages my brand and my business. And thank you for finally dealing with that, one way or the other, either by working with them to improve or by finding a new owner for that restaurant. And so the franchisee sentiment is really, really positive and aligned at this point. We made very quick progress early. With the category being a little tougher in the last 12 months, we kind of got flatter on the improvement in the profitability. To me that was frustrating. To the franchisees, remarkably, they kind of looked like at it like, no, we know you're doing the right things. We're progressing. We maybe moved quicker year 1 than we expected. And we're there and aligned. And so we're focused on how we continue to do that. We're continuing to leverage our scale to buy better. But ultimately, it's going to have to come from top line growth. They're seeing it with the remodels. They're seeing it with our relative performance. If we can get a little tailwind in the category, that would help.

Yes. So the relative performance has been strong. They've outperformed over the last several -- most of the last several quarters. What are...

5 out of 6, but who's counting.

We all are. What are -- what do you see as the primary drivers of that relative outperformance? Is it operations? Is it how you're approaching menu innovation, marketing?

If you're losing, it's really simple to figure out what you need to do. And it's interesting. If you're doing really well, it's harder to figure out what you need to do. And Burger King was losing 3, 4, 5 years ago. What needed to be done is we needed better-run restaurants and we needed better-looking restaurants. We've got the best food. So that's ultimately how we win. But growth for us is coming from running the restaurants better and the effect of the asset base of the restaurants looking better and better for our guests. And that's what's really driving it. There are things that are happening in digital and AI that I'm excited about. We've got a new CMO in now who we're very excited about. And so the marketing ought to kick in, and there are good things happening on that, but getting the fundamentals right is driving the relative outperformance right now and should drive relative outperformance for a number of years if we continue to improve it.

Great. Let's shift over to Tims, which has had some really nice performance over the last several years. Sometimes a little bit underappreciated. So what's going...

Always underappreciated.

Talk about like what are we missing? What is going on at Tims? What do you see from that business?

Yes. It is -- the brand is extraordinary. I've never seen anything like it. The love for that brand in Canada is absolutely amazing. And we sell over 70% of coffee in the morning in Canada. I mean that kind of market share is amazing. We've still got a little bit of tailwind from people returning to office in Canada that happened, I think, a little bit more slowly than it did in the U.S. But it's come from a few fundamental things. So first of all, the team has worked through everything on the menu. And all of the food is better. We're improving the quality of the coffee. We're doing great with extending out into cold bev and other things around the beverage platform and then PM. And 80% of Canada has done business with us in the last 30 days. And the core of the business has always been the breakfast daypart. But if you're getting them at breakfast, talking to them about what they can get from you later in the day is pretty efficient. And we think we've got an enormous opportunity. And half of our sales now are afternoon at Tims. So we're making great progress on growing PM food, on growing the PM daypart overall. And it's interesting that the analogy that I always use is McDonald's 30 or 40 years ago now, probably 40 years ago going into breakfast. And I was not in the restaurant industry at the time, but I remember when they did it and people kind of looking at it and saying, how is a burger and French fry company going to drive a -- build a breakfast business? Well, it turns out they did it pretty effectively. They've got a great breakfast business. That's harder to go from later in the day to morning than it is morning to get them to come back later in the day. And our brands in Canada, it's better than McDonald's in the U.S. It's better than any brand anywhere in the world. And so the love for that brand, the trust in the brand from consumers, getting them to believe that this is a great all-day option for them. We're proving we can do it, and that should generate growth for a long time.

Great. You've talked about expectations to reaccelerate growth in Canada for Tims and get back on to net positive unit growth, but you haven't done for a while.

Yes.

What's changed in terms of why...

More Canadians. So there are 2 things. So I mean Canada has had a lot of population growth. I mean -- and it's funny, early in my career, until I really started focusing on it hard with this business, I hadn't realized how much it had grown. But the rule of thumb has always been Canada is 1/10 the size of the U.S., kind of 300 million in the U.S., kind of 30 million in Canada. It's now at 41 million in Canada. It's about 1/8 the size of the U.S. now. And so it's had a lot of growth. And there are really 2 geographies where we are relatively less penetrated. So Ontario is pretty penetrated, but there are actually some real pockets of opportunity as the population has grown. And the Maritimes are relatively penetrated. We are less penetrated in Western Canada and Quebec. The opportunities there are different. In Western Canada, it's been an amazing business for a long time. We just don't have enough restaurants. The returns are fantastic. The sales and profits are above average. We just need to fill in opportunities there. Quebec has trailed, but it has been outperforming the last 18, 24 months. Team has done a terrific job there. So there I think it was a little bit more of a -- we've got to improve the business, get it on the right trajectory. Team has done that. And over time, I think there's going to be growth opportunity there, probably still a little more work to be done in the near term on that, but it's definitely trending in the right direction. So a little bit of fill-in in Ontario, a lot of opportunity in the West and then Quebec comes on as it continues to perform well.

Great. Let's shift a little bit to International, which has been a bright spot for the business outpacing some of your key peers...

All of them.

Fair. Why do you think that's been the case, such an area of strength for you? And any key learnings that you're bringing back from the U.S.?

Yes. Great partners, and it's really as simple as that. The team has done a really good job of finding the right people, insisting on the right partners. We're sitting here in France. We had 0 Burger Kings in France in 2013. We opened the first one. We now have a $2 billion business in France. I mean it's extraordinary. I've never seen a business grow as fast as this business has grown. And this is probably the single best McDonald's market outside of the U.S. I think it's a $6 billion business for them. So we've done it despite the fact that our competitor, our primary competitor, here is very, very good. They do a great job in France. And we found a fantastic partner here. Olivier Bertrand and his team have done really well. I know some people are going to tour with us. And those that aren't, walk to your nearest Burger King here. I mean it's remarkable. And frankly, it inspires us in the U.S. We look at what we've done here, and it's like, yes, just do this. Our restaurants are 80%-plus new image in International, so they're where they need to be. And we just do that on a regular cycle. Digital is 60%-plus. In France, it's much higher than that. I mean it is a very digital business here. The food quality is terrific. Restaurants look great. I mean it's just an incredibly well-run restaurant business. And so that's -- it's as simple as that. I mean around the world, we found partners that are committed to doing the right thing. Our team is driving that and insistent on finding those great partners. We've got a modern asset base. We've got great operations, more digital kind of double the digital penetration of the U.S. It's just everything is kind of clicking. And we still have better food and so that's ultimately how we win. We just need to make sure that we're running it as well as our peers are. And in International, on average, we're doing that.

You're accelerating growth in International across your other brands, not just Burger King.

Yes.

To what extent can you leverage the RBI network?

Very much so. Yes, I mean I can tell you from my old days with that pizza company. I ran International myself for about 5 years there. We'd be going into a new market. And I'm calling anybody to say, hey, we're trying to find a partner in Malaysia. Do you know anybody? And I mean going through partners, going through Coca-Cola, going through accountants, attorneys, other franchisees. Can you introduce us to anybody? Because of the scale of our Burger King business, we already know all of the logical buyers in most markets. We've talked to them at some point about Burger King. We know who they are. So we'd go into a new market with Popeyes or Tims or Firehouse now, just opened in Brazil this week, going very well. And so we know people. So it makes a big, big difference. And we've got a great team and a scaled team based out of Switzerland but offices in Singapore, Miami, Mexico, I mean. So we've got a team around the world that already knows the logical partners. Makes it a lot easier for us.

And you're certainly in categories that appeal globally.

It turns out that hamburgers and chicken and coffee and sandwiches, we've got the four best. I mean it works, yes.

Let's shift over to Popeyes in the very attractive chicken sector. Chicken category seems to be getting a bit more competitive with new entrants, other peers just getting into chicken. So how would you frame the near-term versus medium-term opportunities to improve Popeyes' performance?

Yes. So the unit economics are good and getting better. It's the best brands, best food in the business, love Popeyes. The food quality is fantastic. We need to run them better. We need to be faster, more accurate. I think the biggest opportunity at Popeyes domestically is execution in the restaurants. We're doing that. It's been improving, but we've got -- it's very different than Burger King, where the unit economics weren't good. We were in a bad place there. But I think growth from Popeyes is also -- in the U.S. is also going to come from running the restaurants better, better service, more accurate service. But team is doing a great job, launched chicken wraps this week, maybe off to a good start, only a couple of days in. But if you look at social media, certainly getting a lot of buzz. And so I mean we've just -- we've got to execute on that. And frankly, we've got a couple of competitors domestically who are executing in very high level. I mean Chick-fil-A has set the standard for running at scale really, really great-service restaurants, good-looking restaurants. And we've got to be as good as that. And I think our food is better, but their service level and execution is better. And so that's really where the opportunity is for us.

Great. So RBI is a platform brand. You acquired Popeyes in 2017, Firehouse Subs in 2021, coming up 4 years later. You've made what you've called temporary acquisitions with Carrols and BK China. What's your appetite to bring on another brand to the portfolio, perhaps in a different cuisine?

Any near-term basis, kind of 0. We've got plenty to work on with the 4 brands that we have. We've got to prove that this platform is creating more value in these brands by them being together under the RBI umbrella. And I think we're doing that, but we've got years of value creation that we're going to be able to generate by just running the ones that we already own better than we are today, continuing to grow them, having the market, frankly, give us recognition for what we're getting done. And we don't need to do it with 5.

I'll follow up with that. What do you think is most underappreciated about the market -- or about the story and what's misunderstood?

Yes. I mean, look, I think in terms of the performance of the stock over the next couple of years, there are really 2 things today that I would say that we've got to do. First, we're out there. We've reiterated the 8% operating income growth, 8% or better. We've got to do that for a while. I think before people are going to say, yes, they can do this consistently. So I think that's just on us to perform over time so that everybody can get comfortable that, yes, they've got this and they're going to do it. So that is purely about our executing on that. And then I think there are still questions around Burger King in the U.S. And I'm pleased with the performance, the relative performance, but the category has not been what any of us want it to be. If we were relatively outperforming in a burger category that was growing 3% or 4%, I think everybody would be very excited about what's happening at Burger King. When you're outperforming a category that's basically not had growth for the last year or so, it's harder to get excited about that. So I think that's still a question mark for people. And I get it. We've got to show more progress there. And we need to see the category help it a little bit. I think that would move it along. But I think the biggest thing is if we just do the 8%-plus on a consistent basis, then I think people are going to get excited about the story.

And what gives you so much confidence in the 8% operating income growth that may not be fully appreciated?

Yes. It doesn't take heroics to do that. We've talked about 3% comps around the world. That's extraordinarily achievable. If you look at the shift as you move from analog to digital, you get natural ticket growth, not price. It's just people who are paying more on digital channels, as you know, from every restaurant. So to get a 3% comp, 2% or 3% ticket growth, flattish to slightly positive order count growth and you're there. And then you need NRG and kind of laid that out, how we're going to get where we need to go. Though interestingly, what's been missing is China, that's not going to be a huge cash flow contributor, right? Those are lower-AUV units just because of currency and when you translate it back. So really doing what we're doing, accelerating the platforms that we have on the NRG side is all we need to do and then being efficient with our cost structure. And we grew our G&A a lot from 2019 or 2020 until a couple of years ago, maybe 2 years ago. And Josh and Sami and the team have done a great job of kind of looking at the growth and saying, where is that growth in G&A getting us the returns that we need versus where can we be more efficient? We're getting that to a good place. We've talked now about being just over $600 million this year. And you do that. You can -- you grow that at a conservative basis from here on. I think that's kind of our new foundational level. You grow the top line faster than that. I mean it's not hard to get to the 8%.

Great. With time pretty much up, anything else you'd like to leave investors with today? I know we talked about a lot.

Yes. I mean, just very excited, very positive on what we're getting done. We're committed to delivering against what we've said to the market around kind of the comps and the operating income growth. And I think, if we do that, it's going to be a great story in the next few years.

Great. Thank you so much, Patrick.

Thanks, Lauren. Appreciate it.