Matt Revord – Chief Legal Officer Aylwin Lewis – Chairman and CEO Charlie Talbot – CFO

Joe Buckley – Bank of America Merrill Lynch Charles Talbot Nicole Miller – Piper Jaffray Sharon Zackfia – William Blair Jonathan Komp – Robert W. Baird

Good afternoon, everyone, and welcome to our third quarter earnings call. Before we get started, I’d like to note that certain comments made on this call will contain forward-looking statements regarding future events for the future financial performance of the company.

Any such statements, including our outlook for 2014 should be considered forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are not guarantees of future performance, nor should they be relied upon as representing management views as of any subsequent date.

Forward-looking statements involve significant risks and uncertainties, and events or results could differ materially from those presented, due to a number of risks and uncertainties. Additional detailed information concerning these risks regarding our business and the factors that could cause our actual results to differ materially from the forward-looking statements and other information that we’ll be giving today can be found in our most recent Annual Report on Form 10-K, under the headings, Risk Factors and MD&A, and in our subsequent filings with the Securities and Exchange Commission, which are available at sec.gov.

Our presenters today are Aylwin Lewis, our Chairman and Chief Executive officer; and Charlie Talbot, our Chief Financial Officer. Aylwin will begin with his perspective on the third quarter performance and discuss some recent developments, by providing a discussion of our ongoing strategic initiatives.

Charlie will then review our financial results and future outlook in more detail before we open the call up for your questions. Aylwin?

Good afternoon, everyone, and thank you for joining the call. I want to begin by saying we’re encouraged by our third quarter results.

Company-operated comp sales growth increased 0.5% during the quarter. Underlying traffic trends improved as we moved throughout the quarter.

We opened seven new company-operated shops and one domestic franchise shop for total growth rate of about 12%. We remain on track to open to 40 to 48 total units this year.

During the quarter, we opened our second company-operated shop in Denver, our newest hub market and we anticipate having five shops in the market by the year’s end. Our adjusted net income was $2.8 million or $0.09 per diluted share for the quarter.

Charlie will discuss our financial results in greater detail later in the call. I want to spend a few minutes providing update on initiatives we discussed in quarter two call and give you color on why I’m so encouraged by recent performance.

The progress we’ve made since our quarter two report is good. Comps improved each month in Q3 and continued a positive trend in Q4.

This improvement is driven by higher traffic trends. Our 2014 development class is performing well, with sales on track and yields achieving steady state in the expected timeframe.

We continued to receive positive customer feedback from Flat and believe this platform will be a layer of sales as we move forward. In late Q3, we introduced the Turkey Bacon & Cheddar sandwich on Flats, and the mix has been strong.

On second quarter call, I discussed our mindset on sales growth and talked about some long and short-term initiatives to regain our comp momentum. Many of these activities we discussed are in test or in place.

I’ll discuss to update on a few of these now. Number one, people development.

Our ability to grow same-store sales depends on excellent operations to drive our neighborhood marketing approach. This is predicated on having a strong general manager leading each shop.

Our shops that have experienced consistently strong top and bottom line growth over years, as the most management stability. We’re dissatisfied with our current level of management turnover, and we are putting place incentive plans to reward tenure, people development and lower turnover.

We have built in turnover due to our unit growth. However, the incentive plan is geared towards providing stability, so we can continue to fuel that growth.

We believe our culture tracks and keeps our frontline associates in place. Our frontline – additionally our frontline bonus also helps to keep that level turnover low.

But we recognize we need to do more to impact the ability of our salaried management people. We expect incremental investments will be offset by lower turnover at all management levels.

Number two, throughput and peak. Our throughput during quarter three improved.

We believe we must continue to drive throughput in order to impact our peak business and increase our sales during that critical timeframe, but we use technology and staffing as the key to do that. For instance, we have high-speed ovens in all our shops as of the end of Q2.

Our In Line Order Taker is now in 49% of our shops. We will continue to invest in the In Line Order Taker where it makes sense in the business.

We installed 33 milkshake stations during the quarter. That total has doubled of what it was from the beginning of the year.

Staffing is important during peak. We encourage our operators to staff at 110% of their assigned staffing levels.

In Q2, we tested over 30 of our shops having our managers manage the dining rooms at peak. We’re finding that they are benefits to having them out talking to our customers, managing the line flow, improving bottlenecks and stopping walkaways.

While that’s just not a panacea, we believe it’s a great program that we can implement in the future. Number three, our backline sales.

It’s roughly 15% of our sales in Q3. We want to double this business over time.

We have dedicated sales managers in a number of our shops. Our attention is to hire two to three additional sales managers in 2015.

We’re also going to hire a national leader for our backline business. We believe this job is important to help us drive the business from a focused, passion and thoughtful process.

Relatedly, in 50 of our stronger backline shops, we tested a catering promotional tool, designed to grow sales, with customers that are not current Potbelly customers at peak. Our fourth sales initiative was messaging outside of the four walls.

It’s important we take the right outside partners to help us be successful with digital, social and mobile. You will see digital, social and mobile become a more important part of how we market the business.

In fact, social is of critical role to help us establish loyalty and customer engagements. Recent copy of Nation’s Restaurant News ranked us number two among large restaurant chains with regard to customer engagement across social activities.

We will increase our advertising budget next year. A majority of these funds will be spent on digital, social and mobile.

Our messaging will focus on menu innovation like Flats, recipes and our promise of being fresh, fast and friendly. Fifth, we’ll use menu innovation to continue to drive traffic and check, so if you’re baking cheddar with our promotional vehicle this current quarter, you will see us testing in this also quarter additional proteins and additional products designed to drive trial and ultimate traffic.

Testing these items during this fiscal year will allow them to make the calendar in 2015 and the out-years. And lastly, daypart.

From a daypart perspective, lunch is very important. It’s 60% of the business.

But we also want to work on improving our business doing other dayparts. We recently rolled out 21 additional shops for breakfast, which brings our breakfast total to 92 shops of 29% of our system.

We will continue to roll breakfast up in an opportunistic way based on trade area and the site attributes. Additionally, we tested during the quarter a promotional tool designed to help us drive from two to five of daypart periods.

We believe over time, this timeframe should really help us grow the business, concentrating on our excellent dessert lines. There is not a silver bullet to how we improve comp trends.

We believe we’re working on the right things that will help us short-term and long-term. Again it all starts with excellent operations.

This year comp sales growth has been the gap in our growth model. And we have worked tirelessly during this quarter to gain momentum and we expect this momentum to continue to balance of the year and beyond.

We’ll keep you abreast on these efforts and you’ll see some of these things come to the marketplace in 2015 and beyond. To close, I want to emphasize, we have a very strict forward business model.

We want to grow our cash in existing units, so that means our comp has to grow year-over-year in the comp stores. We want to use that cash to invest in growing these units.

And we promise plus 10% in unit growth. We believe we have at least 1,000 units that we think here in North America.

Then we want to invest in the overhead closest to our customer, district managers, trainers, real estate managers. These are all the folks who help us to grow the business, organically and with new units.

We’re encouraged by our recent same-store sales trend, encouraged by the tariff momentum that we’ve achieved from a lot of our markets. We’re very thankful to the hard work of the men and women that work for us in our shops and work every day with a lot of positive energy and a focus on our promise of being fresh, fast and friendly.

We will continue to test and implement the proven initiatives to drive our business over time. I’m going to return it over to Charlie, and he will give you more details on the quarter.

Great. Thanks, Aylwin, and good afternoon, everyone.

I’ll walk down the P&L, and give you some of the highlights and color associated with our results. Additionally, I’ll provide some initial thoughts on our financial plans for 2015.

So starting at the top, total revenue increased 8.5% in the quarter to approximately $85 million, driven by new unit results and in increase in company-operated comparable shop sales of 0.5%. Comparable store sales growth improved sequentially each month of the third quarter, driven by an improvement in underlying traffic trends, as well as easing comparisons.

The improved traffic trend was extended into October and we continue to be highly focused on sustaining this positive momentum through year-end and beyond. Continuing to run at current these seasonalized [ph] traffic trends for the balance of the quarter, would result in same-store sales being at the higher end of our previously issued flat to negative low-single-digit guidance for the full-year.

Our average check growth for the quarter was approximately 2.5%, driven primarily by price increases which we took in February and July, with the remainder coming from our new mix. We have not experienced any resistance to the pricing taken to-date.

A big part of the mix increase is a continued success to our recently introduced Flats program. Flats mix remain relatively consistent with second quarter trends and remains a healthy part of our menu.

And as a reminder, Flats are priced at a premium to our original sandwich offerings. We are currently promoting a Turkey Bacon & Cheddar Flat in most of our markets, and we will continue to use this platform for future innovation and messaging.

Moving down to P&L. Cost of goods sold as a percentage of net sandwich shops sales decreased in the quarter to 28.5%, down 110 basis points from prior year.

As expected, we moved from deflation in the first half of the year to inflation in Q3, but there are a few things during that shift in the COGS results given the year-over-year and sequential Q2 to Q3 decline. First, our supply chain has done a great job of managing costs and mitigating inflationary headwinds.

During the quarter, we were able to secure volume-based rebate and other support from few of our suppliers that were not contemplated in previous guidance, and were retroactively applied to beginning of the year during Q3. Second, inflation in the second half of the year, we discussed on the Q2 call, is weighted more heavily to Q4.

And lastly, we had an effective check growth come in slightly higher than we were anticipating, but did not see any pushback from the pricing that was taken, which obviously has its beneficial for the COGS percentage as well. So looking ahead, we anticipate COGS in the low-to-mid 29% range for Q4.

We expect full-year inflation gross of rebate to trend towards the lower end of the 1% to 2% range we previously provided. Our food cost basket is effectively locked for 2014.

We are currently working on through 2015 numbers, but early indications are higher levels of inflation than experienced in 2014. We anticipate the inflationary increases to be weighted more heavily in the first half of the year.

Labor as a percentage of net sandwich shop sales increased in the quarter to 28.2%, an increase of 90 basis points from prior year. The increase was driven by the timing of seven company operated shop openings in the third quarter, which were back-half weighted, as well as incremental training of people investment in advance for the fourth quarter openings.

For the full-year fiscal 2014, we expect labor as a percentage of net sandwich shop sales to trend to the higher end of the previously issued range of 28% to 29%, based on normal seasonality, coupled with a higher number of new company-operated openings in the fourth quarter. Our guidance also includes the impact from the Washington D.C., Minnesota and Michigan minimum wage increases, which became effective in the third quarter.

General and administrative expenses were approximately $7.6 million during the third quarter, a decrease of approximately $700,000 from prior year. When excluding the $1.5 million of one-time costs associated with our IPO in the prior year, G&A expenses were higher by roughly $800,000.

The increase in G&A was primarily driven by higher public company-related expenses, offset by the reversal of a portion of the incentive compensation accruals, of approximately $500,000, consistent with our pay for performance philosophy. As we had discussed last quarter, we still expect public company costs for the year to be between $2 million and $2.5 million.

We reiterate our expectation for fourth quarter total G&A expense to be in the $8 million range. As Aylwin mentioned, our adjusted net income for the third quarter was $2.8 million or $0.09 per diluted share, which is a decline of roughly $400,000.02 when using comparable dilutive share counts.

The decline in our adjusted EPS is primarily due to additional G&A costs associated with becoming a public company that weren’t incurred at this point in the prior year and a lower effective tax rate in the prior year, as a result of provision for return adjustments. Now turning to development.

During the quarter, we opened seven new company operated shops and one domestic franchise shop for a total unit growth of 12.4%. The company-operated shop openings were back-weighted in the quarter.

In addition, more than half of the new company-operated shops opened to-date, are in legacy markets. The legacy to new opening market mix will vary year-to-year as we move forward, but we will target our new unit development to be split evenly between new and legacy markets over time.

It’s also worth nothing our international partner, Alshaya, closed one franchise shop, an airport location during the quarter. I would like to reiterate our previously provided guidance of 40 to 48 new shop openings for the year and capital expenditures trending towards a lower end of the $30 million to $35 million range that was previously issued.

Our previous guidance effective tax rate of approximately 39.5% for the full-year 2014 assumes that certain WOTC programs that are currently expired would be retroactively renewed by the government. However, pending the resolution of these tax uncertainties, our guidance now excludes any kind of effect from these credit programs.

We now estimate an effective tax rate for fiscal 2014 to be approximately 41%. We are hopeful that the WOTC program will be extended, and in the event this occurs, our tax line will be beneficially impacted by approximately $100,000 or $150,000.

However, we believe it’s prudent to change our guidance at this time given the uncertainty. So we’re encouraged by the third quarter results and our underlying traffic trends as we move into fourth quarter.

As a result, we now believe our full-year adjusted net income per diluted share will be in the mid-to-high end of the previously issued guidance of $0.18 to $0.21 per share. Including our expectations as a financial pressure associated with our robust opening schedule in Q4, primarily related to training and normal inefficiencies encountered in new unit openings, coupled with facts that we anticipate the unit openings will be more back-weighted in the quarter.

Pursuant to previously announced share repurchase program, we’ve repurchased 471,000 shares of Potbelly common stock in the open market, for a total of approximately $5.8 million during the third quarter. As a result, we have $29.2 million available from our Board authorized program for repurchases, which will continue as we move forward.

The buyback activity had no impact on diluted EPS result for the quarter. We now expect shares outstanding to be between $30 million and $31 million for the year.

This excludes the impact of any additional share repurchases, which were not expected to have a meaningful impact. Finally, I wanted to share a few preliminary thoughts on 2015.

We remain very committed to our stated long-term growth targets for 2015, which include, total new shop unit shop growth of at least 10%, low-single-digit comparable shop sales growth, shop level profit margins of at least 20%, annual adjusted net income growth of at least 20%, and return on capital investments of 25% or greater. We will talk about 2015 in more detail on our Q4 call, but I wanted to highlight a couple of normal and discrete challenges we will be working to overcome, as we build out our operating plans.

As we have discussed on a year-over-year basis, we are expecting higher levels of COGS inflation, coupled with more significant impact from state-mandated minimum wage increases. We plan on substantially covering these inflationary pressures with pricing, scheduled to be implemented in January, but we continue to be mindful of our strong value positioning in the marketplace.

Pricing will be focused on our original sandwiches, an area of the menu we have not taken pricing in for several years. Also worth noting on a year-over-year basis, our 2015 G&A plan will increase as we reset our corporate incentive compensation to target levels.

Additionally, we are at the end of a favorable lease arrangement for our corporate headquarters and we’ll be moving a few blocks away to new space. Consequently we will have a modest G&A increase related to our moving expenses, as well as higher ongoing occupancy costs for our support center.

We recognize that every year has its own unique set of challenges, and we’ll take appropriate actions to offset the financial impact. Just to be clear, we remain committed to our adjusted net income growth target of at least 20%.

With that said, we thought it was important to highlight a few meaningful year-over-year influences to our stated model as we sit here today. So with that, I’m going to turn it back over to Aylwin for his summary remarks.

Thank you, Charlie. We are positive about this business, both short-term and long-term, just want to restate that.

We improved the business in the past quarter. We see those traffic trends continue across the company and that lifts everybody’s spirits.

Just want to talk about the business and how we think about it. So our strategy is very simple, to run great shops that’s the foundation.

And during perfect peak, try to drive traffic through throughput improvements day-in and day-out. We’ll look to daypart to help us.

We’ll look at technical improvements to help us, and we’ll look at staffing. We find and build great shops, that’s how we think the cash and improve that part of the business.

We want to become a global iconic brand. That means, we got to message differently to drive the brand throughout everything we do.

We’ll be great franchisers in North America and outside of North America. If we do those four things, that shows we have high margins and terrific returns.

From a tactical perspective in 2015, we have three things we are relaying our focus on. Strong GM in every shop.

So we have put incentive in place to help us with tenures, people development and reduce turnover. Tremendous focus on growing sales.

We’ll do that through menu innovation, focus on messaging through social, digital and mobile. We got to increase our marketing spend and we got to continue to drive the neighborhood sandwich shop ideas.

And then finding affordable real estate. We’re updating our customer information to ensure the decisions we make are the latest and greatest in the neighborhoods that we want to penetrate.

We continue to grow on our new hub city in Denver. We continue to focus on our legacy markets to drive new units.

As Charlie says, from year-to-year, difference between our new markets and legacy markets will be 50/50 ideally, we’re between 60 and 40 depending on the situation. The three value drivers in this business that we have, new units, those that have a rate of return of plus 25% and non-comp economics of plus 20% profit growth, low-single-digit same-store sales growth, at least 20% margins and then growing our sales.

Great operations, product innovations and then increased marketing spend, that will go towards social, digital and mobile. We feel again in this year our new unit growth has been right on target.

We will provide more visibility to our classes of 2012 and 2013, as we discussed on the next call, but like our unit economics are still good in our non-comps, and we’ve gotten better with our sales over the last quarter and that continues in this current quarter. So we’re very positive about those businesses short-term and long-term.

There is a lot of work to do. There is tremendous, excellent competitors in this space, but we believe that we run our mousetrap of providing great service who experience in our shops that we can win in every neighborhood that we’re in.

Thank you very much. And now we’ll open it for questions.

Thank you. Aylwin, can you elaborate a little bit on the general manager turnover, and what you’re doing to address that?

Are compensation levels going up as a way to try to address that? How should we think about that?

Well, you should think that turnover levels for our GMs have been constant. What we’re trying to do is get ahead of the curve, thinking about the growth.

Want to put incentive plans in, which meets their performance base, geared toward the number of folks individual managers develop, that’s people development, geared toward feed and care of new folks as they get into position and learn the business from the ground up. So we want to put incentives in.

So we’re not increasing the base pay, because that’s increasing the cost of the business, but we are putting the incentives in to drive the people development piece, the lower turnover and then to help with the growth.

Okay. And then, just on the traffic numbers during the quarter.

Charlie, I think you indicated that check was up 2.5%. So while it may be improving, you’re still pretty negative on a traffic basis.

And I guess, maybe talk about that sequential improvement, when do you think you will cross the mark and be flat or up on traffic?

Well, I think that the way you framed it was right. Our traffic did improve throughout the quarter.

It improved more predominantly in late in the quarter and as we have mentioned, carried over into Q4. And obviously as we get into the Q4 winter months, that’s where we talked about last year where we had some impact due to the government shut down, as well as some weather impacts.

So we’re very happy with the trend that we’re on. We think we’re on the right a track to where our model needs to be going forward, and indications in Q3 supported that view.

Okay. And just one more for me.

The full-year expansion target, the 40 to 48 system-wide. It’s obviously a pretty wide range for one quarter or two months basically left to go.

Are the fourth quarter openings also staged pretty late in the quarter, so it’s a little fuzzy if they’re going to happen in ‘14 or ‘15?

Well, it’s not fuzzy to us. We have a clear view balance of the year, and that’s why we gave the guidance to the 40 to 48.

We had talked about it early this year that this quarter, it was back-loaded to development. And the bulk of them were scheduled for Q4 and those are happening as we speak.

And we have a very clear view of what’s going to happen between now and the end of the year.

And just to reinforce that. We’re very comfortable with the range and just making sure that things happen at year-end, but we’re very comfortable with where the number is going to end up for this year.

Okay. I guess, what I’m saying is that 40 to 48 seems like a wide range to me for a couple of months left, but I mean you guys thinking high-end, low-end, middle?

Well, we’ll be fine. As we mentioned earlier on our previous call, I think that we’ll be within the midpoint of that range, if not better.

And that’s…

Okay. Thank you.

Good evening. A couple of quick ones.

Thank you for the color about the comp in the third quarter. Could you just give us an idea of the overall comp or the traffic?

However you want to talk about it. Did you go from low-single-digit negative into low-single-digit positive total comp?

How wide was the variance, so we can understand how you’re tracking as you talk about coming out of this?

Yes. I think that your range was in the ballpark.

I just think the main point that we want to emphasize is coming out of Q2, we saw a fairly consistent improvement as we moved throughout the quarter. And then as I mentioned P-9 [ph], it continued to improve into Q4.

And then just – I want to make sure that pre-opening gets modeled appropriately. It seems like back on Joe’s questions about how many stores would open here at year-end.

We have at least as much dollar openings in the fourth quarter as we have last quarter. And then as you think about ‘15, the 10% unit growth, is it kind of weighted towards the back-half, so that we can model pre-opening that way as well, or is there going to be a different opening convention next year by the quarter?

Next year is not as severe as this year. And we would hopefully try to smooth it out.

It’s hard when you’re dealing with the markets we’re in and a lot of new development. It’s hard to predict.

But you can anticipate a similar curve to this year. We’re working hard to smooth it out and we hope as we go in the out-years that it’s evenly distributed, but it’s just hard to do.

And then just a final one on the tax rate. I just wanted to understand your normal tax rate as we approach next year.

Is it the 39.5% you guided to earlier, or the 41% you’re guiding to now?

No, it’s the 39.5%. Really, the gap is the WOTC credits.

The assumption in that comment is that Congress will pass that on an ongoing basis. So we view that as just timing.

And so, if they were able to pass it before the year is up, then that rate will come back down to the normalized 39.5% or thereabouts.

Thanks. Appreciate it.

No problem.

Hi, good afternoon. I was hoping you could talk a little bit more about marketing in the quarter.

I think you were trying on some different tactics. And what you’re learning about how Potbelly resonates in different marketing media, and how that might influence your cadence in marketing spending going forward?

Well, the money we get spend was primarily on traditional media in Chicago and D.C. historically.

We’re moving away from that model, and going to spend majority of it on digital, social and mobile. What we have decided is that we need really smart partners to help us spend that money and where to place it and how to place it and keep it fresh.

And that’s kind of a new departure from us. I think you can call it a new learning.

And again it will be spent against a promise, sometimes it will be spent against our backline business, and then spent against the innovation that we plan on having in 2015. Additionally, we tested some promotional vehicles around targeted geographies, targeted lines of business.

And we’re investigating readings on those things. And the things that work, we will carry it forward.

We were looking for tools that we could use to mitigate the situation we’ve found ourselves in earlier this year. So everything we try to do in last quarter and balance of the year is to learn about the business and have the levers we can pull, so we don’t have the same results that we had over the year.

Okay. Thank you.

Yes, hi. Thank you.

Charlie, if I could just start with two clarifications on the quarter.

Sure.

First, could you maybe clarify the cost of sales benefit. You mentioned having a benefit from some supply chain rebates.

Can you just maybe clarify the dollar amount that you’ve recognized?

Sure. Well, I’ll talk more in percentages, but we ended up the quarter at 28.5%.

It was lower than we had planned coming into the quarter. A lot of that had to do with, as I mentioned, some work that supply chain team did with our supplier partners, and they were able to within the quarter put into place some agreements where they participated in some of the volume increases in our business.

And so we were able to get some one-time volume rebates, that in some cases were retroactive, that really helped us with the percentage for the quarter fall below where we expected to be, which was closer to 29% range. So that was important.

Obviously I mentioned the pricing impact we took in July. And we didn’t lose any traffic from there.

We didn’t see any pushback from the pricing, which obviously ultimately helped the overall COGS number as well. Those are the two main pieces relative to our internal expectations going in.

Great, that’s helpful. And then on the G&A line, the $500,000 roughly of incentive accruals that you mentioned, being reversed.

Yes.

Was that contemplated in your guidance previously for the year?

No, it wasn’t. I think that as we’ve said, in Q2, we are still working through how the year is going to play out and working with our accounting partners to make sure that we accrued appropriately for our incentive compensation, and as we got further into the year, we adjusted that accordingly.

What’s important to understand we’re pay for performance organization, and so that wasn’t appropriate adjustment, given our 2014 results.

Got it. Thank you.

And then, maybe just coming back to the recent same-store sales and traffic trends, and the improvement that you’ve seen, maybe just to clarify some of the comments about the full-year. I think you mentioned that you could be tracking closer to the high-end of guidance for comps for the full-year or near flat.

And the simple math that I used to get there would be something close to 3% in the fourth quarter for your comps to get to the high-end of your range. So I just want to make sure that’s the type of level that you’re trying to signal?

Well, yes, a couple things. Remember, I mentioned just a few minutes ago, remember in Q4 last year we had some things, the government shut down, as well as some December weather challenges, that we’re not anticipating from a D.C.’

s life trend perspective as we forecast the business. So obviously we still have a couple months to play out this year, but as we look at our business from a trend perspective, we’re encouraged with where we’re at and what we’re seeing and that’s how we’re forecasting the business for Q4.

Great. And then last one from me, maybe for Aylwin.

As you laid out the broader range of initiatives that should be rolling in, maybe over the next several quarters, and as you work through 2015, could you maybe just give a little more context on maybe the timing of some of those, or what you expect to be the most meaningful potential drivers? And then, in the context, as we think about same-store sales growth for next year, do you think you can get back to a place where you’re sustaining kind of flat or slightly positive traffic growth, given all of those initiatives?

Yes. Obviously the goal is to grow the business organically with the range we’ve given.

And we don’t want to repeat what we’ve had. And so the menu items that we tested, we feel good about.

Some of the promotional things we did geographically and targeted towards either daypart our lines of business, we’ve got some early positive results. But we’re still reading this stuff.

What we tried to do once we’re in the situation is like what can we do to improve our innovation pipeline, what can we do to find levers in the business we hadn’t contemplated before. So we do lot of commitments around the sales growth.

And so you see things that – the goal is once you have stuff, you don’t want to spend them all in one year. So strategically we’re working through what the calendar is going to look like.

We’ve made a determination to invest more in media, and make that investment largely digital, mobile and social, and taking the right partners to help us do that from a targeted perspective and a timing perspective. So the trends we’re seeing and we hope we were going to see already this year.

So we feel good, but when you’ve had the experience we’ve had so far, we’re very cautious about our enthusiasm. We don’t want to get ahead of ourselves.

But the new shops feel good, understand the pipeline balance of the year, got a good visibility of pipeline next year. To run great shop thing is very imperative.

We’ve kind of summarized that as a strong GM in every shop. And then the marketing piece growing the sales in a very emphatic way is very important, and we know that’s the big question mark a lot of folks have about this management team and the brand.

And so we’re going to do everything possible to make sure we do that next year.

Appreciate the color. Very helpful.

Thanks again.

Yes, this is Aylwin. And again I want to thank folks for your interest.

Thank you for your continuous support. Again, feel like we’re working our way out of what happened in Q2.

Feel good about where we are, lot of work to do, but looking good. The underlying business long-term is strong, and we’re seeing an improvement in short-term.

So keep buying those sandwiches and we’ll talk to you next quarter.