Wendy’s Co Class A (NYSE:WEN) recently reported its first quarter earnings and discussed the following topics in its earnings conference call.
Right Price Right Size Menu
Mitch Speiser – Buckingham Research Group: My question focuses on the Right Price Right Size Menu. Emil you mentioned in your prepared comments that the price value component represents a challenge. I was wondering, if you could maybe just go through the first quarter, it seemed like things started off pretty strong in January to maybe soften throughout the quarter. I guess a couple of parts, can you maybe breakout maybe what the weather and holiday shifts were? Maybe just give us the experience of the Right Price Right Size Menu, did it start off at a higher mix and then tail off? Did you see trade down to the Right Price Right Size or did you see – it seemed like with traffic down that you may have lost some value customers. If you can maybe just give us a little more granularity on assessing the performance of Right Price Right Size through the first four months that it’s been out or so?
Emil J. Brolick – President and CEO: Sure, Mitch. What we had shared previously was absolutely accurate that we had a very nice start with our Right Price Right Size Menu. Then you recall in the first quarter, just as a reference we moved into two weeks of promotion starting February 11th with a fish promotion obviously to kick off Lent in season. Then we moved into what was a five week window of a local marketing window with a variety of messages out there. Basically, what we saw is a definite softening in the business at the end of that Right Price Right Size pillar. So that change occurred predominantly underneath the fish message and then specifically, most importantly underneath that local message. We looked at the holiday shift and it’s very difficult to pin down the weather, that holiday shift and some weather. Probably at least a 0.5% impact there and it clearly was a very challenging winter for us, particularly when you consider how non-winter weather we had in 2012. The other thing I would say Mitch, as we looked at our marketing calendar, I mentioned some refinements, we feel that we have to evolve to a situation where we have more continuity against a price value message out there as opposed to having a pillar approach and just because there is so much pressure against price, we don’t want to move away from our high end messages, because they’re serving us extremely well. As I mentioned, we’re building our large hamburger, our large chicken sandwich and salad business, but it is the price value and so, we have to make sure that we’re addressing that consumer. I’ll also point out that while we have some limited use of coupons, the value menu consumer is a different consumer generally speaking, than the coupon user. So you have to have both of these tools out there to attract those different price value consumers. So, I hope that helps a little bit.
Joseph Buckley – Bank of America Merrill Lynch: Can I ask for a little bit more clarification on the sustained sales comments around the 2011 concept stores and the 2012 Image Activation stores? So when you say that 2011 class sustained up 20% and 2012 sustained up 18%, I guess, in the case of 2011, does that mean they comp up the second year or are they up 20% off the initial starting point and maybe after the honeymoon period, were actually a little bit lower?
Emil J. Brolick – President and CEO: No, what that indicates is the 25% refers to the full year including the opening phenomena of those. The 20% refers to a steady state. So if you would go back to a pre-opening period what we are indicating is those restaurants are 20% above that pre-opening period. Does that answer the question Joe?
Joseph Buckley – Bank of America Merrill Lynch: Yes. But there is no like year two benefit. I mean I realize you are getting a honeymoon period but is there no year two benefit where they would might comp up better than the average again? I mean not strong double-digit rates, but maybe better than the averages?
Emil J. Brolick – President and CEO: Well when you have added – I would say that there is definitely a year two benefit when you have added that the average volumes of these restaurants are up 20%. That’s a big number. I don’t think we would expect them to continue necessarily comping off that a faster rate because again you have gotten that benefit but you now get that volume benefit theoretically in perpetuity.
Joseph Buckley – Bank of America Merrill Lynch: Just a question on the GE Capital financing. You mentioned with credit support from Wendy’s, could you elaborate a little bit on what you are doing with that program?
Stephen E. Hare – SVP and CFO: This is Steve. What we are doing is we are working with them and we will provide some credit support in the way of really some first loss protection on that program, just in the early stages. Before we have a complete database of experience on this loan portfolio, we are glad to backstop it, because we think given the returns we are seeing we think that’s going to be a fairly low risk loan portfolio. So we are working with them in the early stages. We wanted to have something early on and on the table because our franchisees are looking to move now. So we were glad to provide that kind of credit support to help provide an early adopter financing program.