MCW - Earnings call transcript Q4 2024

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Operator

Good afternoon, and welcome to the Mister Car Wash Fourth Quarter 2024 Conference Call. [Operator Instructions] Please note that today's call is being recorded and a reproduction of this call in whole or in part is not permitted without written authorization from the company.

I would now like to turn the call over to Mr. Eddie Plank, Vice President of Investor Relations. Please go ahead, sir. Mr. muted, you're Perhaps Plank.

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Eddie Plank

will to formal and and Officer. Jed Good the our questions. the results. Chief open call everyone, and Financial John you After remarks, Officer; on joining afternoon, have Lai, and are Chairman Gold, thank With me and fourth Executive to made year full us quarter we today XXXX Chief their financial John call for discuss Jed

this non-GAAP website the press During earnings of financial will Relations Investor mistercarwash.com. be been most conference at to comparable have the to company's measures the release reconciliation section of complete issued measures included call, references in measures GAAP earlier to made. today company's these the posted A and

a forward-looking include current and company's call from differ comments statements, significant made that materially which actual could As on risks today's to the cause to uncertainties subject may reminder, results expectations. are management's

be XX-Q the company's reports to time call its John. to Commission. While unless the may under the do disclaimer the in XX-K over future, statement to the no law obligation and these it most factors so I'll update may SEC Exchange filings, the forward-looking with statements recent updated Securities as including and choose from by regulation. such Please is time applicable contained or now review company required turn in to

John Lai

of comp store the for with of growth earnings including of expectations, results first QX our Thanks, sales We Eddie. that Good QX afternoon, year comp XXXX. consecutive Mister, positive the for seventh X% by QX and everyone, quarterly growth strong retail quarter marked led call. our since comp thanks ended the joining XXXX exceeded

our service, X% sales premium growing at full delivered of adjusted revenues and the with and XX%. year, fueled we up EBITDA record titanium the EBITDA introduction Looking by by

in locations XX relocation surpassing our strides XXXX, the greenfield and program, We XXX-store new to with great make continue milestone. including also opening one

current sensitive trends remains predict, to we're performance, While more by upcoming behavior our and encouraged the to business through hesitant to our is non-subscription weather. year. extrapolate Consumer we are difficult

So discuss which detail outlines optimistic in the more cautiously year retail when months will our Jed a we're the trends view call. ahead, in guidance the he in retaining for for later

As we turn XXXX, environment. like on competitive I'd our focus briefly to to the comment

the XXXX. remains expect in of influx landscape to new the market Although the the from entrants crowded, highs saw we continue to into we decelerate

Mister to us years, consolidation solid at Over an themselves. expect deliver the confident all capitalize to not be well and is experience the to our are market drives what industry motivates few positioned share as and excellence and operational next success, costs. Disciplined will we customer and execution growth growth, we rationalize, exceptional present opportunities

like a our our and growth I'd Now and long strategic pillars expand making to one, over the X on little progress drive we're term. productive profitable time with spend number Starting footprint. the to

in key we inception, through to accounting XX% wash year, stores for in to have more constructed add proven densify our has of metro will XX to areas and we This platform. successful strengthen We XXX XX us. as our The plan to we our greenfield than XXXX locations greenfield unit car Since continue continue drive position. growth program new program. for

sense. With proprietary both respect M&A are of site we surgical expect becoming program selection make with success will to rate. improve transactions, evolves, analysis core model which continuing opportunities more our and opportunistic to and that we we continually and remain our markets, new we'll the As evaluate are our refine strategic

increase two, solutions. number to Moving our innovative

Mister service innovate, product, also operations and apart. across we sets innovation When we of culture Our win.

outperformed example is great our penetration of Titanium UWC overall, At Our XX% membership XXXX. of this. launch a expectations Titanium in

improve continuously customer to the Our overarching experience. is goal

or That the innovate our and game delight creative a with technology point to marketing reducing consistently wow of sale, requires campaigns whether the same, advantage. developing forward to increasing customers friction and new our end at R&D. while competitive all agility is The of segments pushing across company, commitment industry-leading and

three, grow Moving drive membership. to traffic number and

As and pleased I our media tested our messaging with response. mentioned, in marketing brand To to select promotions in retail to our reach we're markets to increasing in in engage with digital QX, to investments customer expand launched we're we customers end, generally ways. drive and new traffic, new enhance that channels

evaluating robust, at This increasing improving interaction, growth. brand each targeted customer driving stronger awareness attention awareness developing we're driving forward, Moving and customer-obsessed, and we more traffic. and segmented remain includes towards membership and and turning aimed our marketing

Finally, number Carlos Chavez, who evidenced by joined This our the ongoing Technology couple team has team. of four, the being effort, Chief most build over in investments the year. our at recent Officer, the been an years, beginning material past first-ever of a the leadership best-in-class us

develop wealth will we Carlos vision today. how of I technology can is in differentiator. and to as forward as background competitive digital partnership leadership and his the industry business retail and technology it strong experience where his our a serve look take for With roles, beyond

Looking remain optimistic beyond, our on I and growth XXXX to prospects.

believe Our over win. few time, lot seen change the past a best industry operators years, has but the of we over will

this future. incredible over in where billion revenue been to None have team. more shareholder talented our the stores XXX offense be connecting and revenue, our $XXX with with in ago and where company we'll and by consumer, leading membership XX at we stores I continue of without about When in I couldn't nation, play XXX $X nearly car our expanding years a our today reflect As value. ultimately, company would driving stand on million footprint, was possible energized to wash our

ability tremendous great and team the results. financial thank culture over provide special. Our call Mister commentary around to to people, what our to makes turn like our for continuously I'll improve our to all now your effort. more members our Jed of is I'd

Jedidiah Gold

in team our that UWC a our XX% and XX% earnings the note was everyone. summary, by on guidance QX In adjusted adjusted our range. subscription successful in a predominantly from to really than bats a benefited marked comp. net we've favorable X% of in afternoon, at year. From Mister slightly retail fueled retail with good that our cost line as strong more growth end guidance slightly in capitalized adjusted perspective, had led improvement performance. are and revenue year, and growth Sales power and high quarter new adjusted strong more included better sales customers record-breaking comp per ended share. on single-digit seen demonstrated more rollout Fourth and John, we you, fourth year opportunities significant the the income the resulting Overall, top high the range volume offering trends quarter, EBITDA another From titanium a a were by over into at line strongest October bottom our positive the growth maintained strong And discipline, were we Thank growth, conditions. model. during uptick our sales at earlier and to a perspective, high membership. pleased years, of weather retail The trade translated favorable teams a X the of particularly EBITDA and trends with weather by

remained a providing subscription stable us our revenue resilient, addition, business and with significant In reoccurring base.

core we which changes member satisfaction, previous quarters. levels our a didn't see of in key QX, Member utilization is material any in constant and from churn held indicator

far our the Our during continued with our exceeded executed of well, to how accounting the per Titanium in XX% Titanium launch. year, to for has helping membership team and we the expectations perform a quarter. membership also member pleased increase XX% drive revenue mix the and for Express are

Finally, equated openings the relocation to new Express record XX opening we year. opened This X car net quarter, washes a in new stores, XX totaling net XX and full closures. Exterior greenfield for the one

I'll some quarter Now results. on detail fourth provide more

such to simplicity, new filing by which numbers revenue sales the openings. earnings from the our X.X stock-based a million and of increased ended of of UWC we be For comparable adjusted X-K release. than X%, be reconciliation and of driven from incremental members. our the more can combination wash full sales and loss items XX% found sales, The quarter press of growth Net store referring total X% represented store in disposition UWC contribution I'll and assets. revenues compensation as only, adjusted figures exclude with

X%. $XX.XX On the million in number basis, per the the among split a end in roughly expenses year. the UWC The XX%, versus membership and costs fourth the increased the member year-over-year XX%, XX% was At of of quarter, to and quarter. average last or approximately members quarter Titanium Total by in and XX,XXX $XXX XX% respectively. were Platinum $XX.XX members increased operating base, Express QX revenue

decreased chemicals model primarily our clean This increased the labor XXX earlier year leveraging revenue, shipping scale total XX.X%, net rates. offset As in in points Labor chemicals. a was to operating partially optimize percentage completed at basis to basis and by decreased and and XX.X%. labor by our locations our of expenses purchasing to driven points work team the interior of XXX

in basis driven begin expense gains our labor, realize XXX points store to as expense primarily and in and savings XX new costs. XX.X%, incremental maintenance by points basis increased expect margin and facilities well anniversary by and an to XX.X%. basis primarily to operating now we to we leasebacks increase increased growth sale EBITDA higher to increased don't management, those G&A $XX marketing to costs points expense. As related rent offset clean chemical XX% EBITDA expense million, better expenses equipment higher by utilities, interior in to Other partially XX as decreased driven X.X%, store XXXX. and

full XX% the increase. at year, representing year-over-year $XXX million, Looking EBITDA was a

come despite XX%. John's interest decade, higher EBITDA year. compounded last to quarter we've last to by reflects growth far XXXX sentiment year-over-year modestly annual borrowings X% of compared decreased rate $XX XX-year a million, echo due primarily to of how lower interest the rates To average expense our Fourth over

respectively. and per were net $XX fourth and share diluted quarter $X.XX, net income Finally, income million

decrease balance resulted long-term balance year quarter. quarter. cash increased in Moving sequential from paid some This $XXX and as the reduction at cash down the a to million, in with sheet reduction net long-term on driven was our equivalents leasebacks. we revolver and our flow Cash performance X.Xx. in proceeds coupled ratio million, end X.X strong leverage largely to by highlights $XX the million $XX Outstanding debt our sale were of during and net full a balance our cash debt,

self-fund expansion remains via sale-leaseback million. XX XX consideration and quarter, the fourth balance sale-leaseback for wash we and and Our market, active in very were locations growth involving $XX the sheet we of In car continue flexible, healthy transactions to sale-leasebacks. our an aggregate completing

outlook. our provide to With build momentum we've the by color encouraged over respect I'll are X around Now initial we some quarters. seen last XXXX sales, the

outsized the whether and with of recent will However, spend early benefit as such impacting many improve. to inflation still too consumer say it's weather factors patterns on discretionary results,

As to such, we XXXX. are though extent anticipating a continued lesser retail, in headwinds than

progression comparisons majority As late in This of comparable these the XX approximately growth, more to share. half and of we and slightly respect we the market front to year densify, to Titanium half. to this we where think our With challenging new will full back sales, due store largely in grow total expect be markets to the open the The XX and back rollout greenfields existing store have in expect the opportunities stronger lapping of fortify we year. about half. than to the price be then is QX

our evaluating half and of estimated in data-driven will half weighted rigorously we site returns are these to second scoring and back becoming drive in half. capital. openings XX% the pipeline As on first the The XX% the our more are timing mentioned, selection John in highest be approximately an more sites on with and

we earned expansion, continue increase we look value To the markets to In it our superior where to end, select are greenfield taking base we've addition ways in membership distinct through we other that proposition drive and a at experience. to business. customer price believe

broadly But base the will solely course never compete see over opportunity the of pricing UWC price. We optimize more we evaluate we as year. the on to additional markets,

point year. assumes in are XX to range number a last even incremental of I'd EBITDA, leasebacks, executed of When the at expansion rent excludes to uptick at XX rent resulting margin end expense on is we high despite an compared the year-over-year EBITDAR like basis record that the adjusted we basis, at roughly this the profitability end. points high leasebacks our in impact Looking note sale from margin and of of looking anticipating basis sale XXXX. greater which the

year leverage should On certain And the position we slightly expect as cost continue be G&A our leverage sales. of G&A we side, efficiencies due to a percentage by to a various marketing and our be in an slightly on this to in These expense decrease a modest investments. expenses doing to with will productivity greater even uptick offset focus more and initiatives less.

sale-leaseback remain We XXXX. market remain source expect Mister. to for attractive sale-leasebacks in during capital the active the of most

proceeds influx improve of during deal targeting million facility. were the to opportunity term XXX to the took points. with credit to our buyer November, the on $XX able are year our We leveraging $XX loan to plus a reduce We loan of In further economics. million focus revolving reprice basis term we to spread on and demand SOFR the

net to of X% million, But X% billion, of can full be a paydown XX% revolver, outlook store more sales to earnings growth the reduction to billion to our of interest in slightly a EBITDA $X.XX X% of our items, will ranges revenue XXXX. expect The -- the to X% in to compared with today's of $XXX an $XXX release. reprice list year-over-year estimated favorable coupled XX.X%. outlook table recent drive in of XX.X% $X.XX found representing rate we initial to growth approximately recap expense representing margin XXXX The comparable and million and adjusted for key help

We share, net of per share diluted $X.XX per $X.XX income XX%. growth to expect XX% of adjusted to representing

year. entire of of during also how In Finally, their what like for I piece ownership In Mister dedication. Mister great we of to million the takes multiunit $XXX would is the to expenditures $XXX million work deliver enables capital hard a and entire their plan for results. the us to business, team team thank closing,

challenges, executed strong countered not it head team While delivered our and XXXX faced without was them on, where most.

unlock continuing well prepared That concludes we potential. to and Moving will we forward, the questions. are your positioned, open our I for to call and forward look now our remarks,

Operator

with [Operator session. Securities. come Heinbockel begin question-and-answer first now question the will The from will Guggenheim We Instructions] John

John Heinbockel

and start I marketing. wanted to with pricing

And right So from a base is pricing standpoint, what how number you the do And the up car that I term? of you it percent the right taking to And year? Is John, $XX.XX is get in? for there multiyear you you over this -- wash when the at to want about? think maybe, or base guys are spend much longer to think do you there? marketing get level then the what's a journey

John Lai

question. John, thanks for the

since for where is we've But to median competitive which we held ago. price respect assess over ve pricing, XX we're markets. a with which lot base So our years the we as the compare shared landscape previouslywe', line actually underpriced is the inception, in base, where of and sit vis-a-vis market

So see where anticipate in opportunities. XXXX, taking those price of course over we the those markets we

the encouraged where the were is results. right to specific test play We markets attrition but respect yet, with can haven't schedule see We together and in that now. by the what elasticity And would churn. is be put in tell you it we very and we what did to impact

given pass a nice through can easily result. has relatively a us flow-through that So as this confidence and see we that

on marketing-driven you have know. been question your advertising, company, not so we as very To a marketing,

And were year expect XXXX QX investments We on some seeing our done. encouraging based and triple versus to we that's in of results a the where we've we're tests some in ago.

And appropriately. turn we see knob good results, up continue the to so will we as

John Heinbockel

what's that buy shake financial the some XX, some about look so? the or there, And that to finally, room year the free talk idea the keep XX leaders the to separation next Is your then between right, the others. maybe firepower Maybe assets like? pipeline, follow-up. And some might to the is idea seeing some over pipeline greenfield and we're

John Lai

Yes.

a a greenfield John, of little question, question your M&A strategy. an you growth into wove bit in it's So tricky actually

to disciplines quality capitalize reasonably anticipate are when potential good several we to growth. of we on to next reasonably with with to unit priced, opportunities importantly, yes, positioned upside well But a respect market present most coming We emphasis So new respect on themselves. to opportunities agnostic our do being years, the stick we'll those to be again, asset, and priced. want clear there number they and over

do those strike when is come table available, we hot. to the when iron then the so in our and be at power And will everything

say that I of things want And record businesses track it easy, afterwards. is business do one them buying on a that to it's take long with integration a what good we second a really is post-acquisition buying to you the and making have and better.

and are have thing believe that end, be scale, building just boxes. scale. brand. We're has at this So we the looking all And what costs we grow those been bottom not about and at to feeders. We're definitely legendary beloved a brand, businesses to to that never brand a enduring check to

sort that So right internal get on And the comfortable a now, making over a again, bandwidth XX%, we that's we the a that's think, and given XX% Right now, of don't pacing, is our feel number to prudent greenfield judgment with. we number call. sure in skis.

Operator

next David with Mizuho. will Bellinger come The question from

David Bellinger

up X% comps this So quarter.

X% guiding next approach your year X% to here. you're If to and understanding the conservative

to to bridge Just anything you've the that it QX talk business like that that or positive there the anything can that help what type about any whether you weather us give just in this slowdown frame X% up, was to or and in QX to of delta? date onetime just us seen X%? retail comp? more was credence Is And

Jedidiah Gold

we at a of were talk UWC comps We retail strongest really it's was strong quarter. Total little to David, the up you. quarter. positive us that December little the between the some back quarter. October of January, precipitation October. comp it positive we positive was slightly we comp weather retail at that was A the out during had mid-single-digit trends similar was softer November, look look difficult levels and October for the Listen, rounding correlation during stronger, in that growth, weekend, volume QX, weather. markets in, December and When the positive it the and but month the and though and was Yes, it's and in range. it's at the nobody to the up we layout range, teens It out to plus really October. weather X% Retail when the Good a and a testament both bit of the of as that trends really operations the the operate team I in look our and retail. results we in cooperates. low single-digit the positioned saw. week a saw most to positioned Mister. with Jed process here. the than sun's we we're to strong bounced very month total even growth, low well the to think better the double-digit we October weather there's when then in have, There's watch vehicles in

David Bellinger

And this on the step think it then think XX% quarter, at I versus my mix, follow-up XX%. a was Titanium that's QX, I back

to out TXXX? XXXX see within are top rate guide to any penetration for And that the So in begin way? you're what assumptions your starting

Jedidiah Gold

opportunity, this the as an drive to to once not upside as so out trial in focused to promotion said penetration drive promotions into ended. continuing our promotional we and then build in did who that We some in of We price expectations, And level opted with see we lot Listen, exceeded performed. utilize those Yes. penetration those some model out churned really promo signed the the up XX% how at of QX. and levels. help a have we our members the drive of period It's adoption. believe in saw it prepared that titanium we remarks, happy helping

this, opportunities rate, be So much seen to at will longer to than slower term, a launch some we term drive it date. obviously, we've to longer what although see

John Lai

Titanium, XX% just a it, Jed, is as want I to we and Yes, membership beautiful of premium add, our is look percentage. both that at Platinum in and

Operator

Gutman next Stanley. with Morgan come Simeon The will question from

Simeon Gutman

it maybe it's quarter. back? guidance. is December Jed and John, the and back representative, to implies retail bad. X reconcile, then, say the the customer, is Jed, don't if I helped it, comp the first trying you between then is by to less I or Was that weather? of I this And discretionary I'm My say said the question, bounce the you Good it also midpoint Would the think that quarter because difference way know, guess, you customer

negative. or flat that's assume I So

be So December of can put if would proper unencumbered rate weather? run you by all together, that that's yes, the

Jedidiah Gold

Yes.

talked we traffic most we is So what that's significant the improvement past, a into which currently is guidance, time, step built mid-single-digit retail full is year same the anticipating saw retail lines from decline from We're to we've down XXXX, XXXX, a slight in that October. so provided traffic. of saw that in helping our -- XXXX. this we about QX in of a And the saw weather the we've Simeon, what the in difficult as forecast. saw a retail, we what we but in weather -- believe benefit uptick it because to January, that it's

run longer-term into So which, retail believe and we level. full it's the a year of customers retail the of mid-single-digit in mid-single-digit we've as past, decline that and talked way, had to negative about subscription, we trend adequately retail, believe in always about bit a historically captured we've trade that little by headwind what the that we've we

to more times. seen X-, average XX-year back getting in more the we're those So X-, that levels, normal normal we've

John Lai

I Simeon, just would add. Yes,

to call that show bottom. that years. over that in we get So we're what the that back, have experienced better. hope get couple here to to and some we but is We will we seeing it just don't We're wanting our is But the we Jed summarize retail hit in retail say also the ground. said, want on not signs feet improving skis customer what last to are encouraging both that but keep of

just us being there's So conscious.

Simeon Gutman

up capacity, to meaning going Do of it biggest that customer response, back? coming competitor private the about because make or And who Curious is and quality. question there's was two other the John. overlap, I'm I retail was the and follow-up, competition there, I that holdback? the assets parts A you inflation for And or in growth. think location Yes. declared to it's heard your was guess, to think to any model from. approaching prepped of next you're I I I these that business seem range? but asset, I Is either be starting happens these a to fall, well? that's don't guidance that know year? Are initial the benefit benefit ones should what should mean, what how as the a dominos wanted sale help and then bankruptcy. asset the be with ask assets, then to acquisition there

John Lai

Yes.

second to that on lot answer referring a So question first, company the of part not with of overlap our there's the to portfolio. you're your existing

any I in the the we rationalizes boost while time, we don't first a a think it's right we where our near some to it going that distress to positive should to So some there now again, the the over expect are folks for business in to out. term. That as do And a see to that have retail? the as should help that of there's question as result. part but us result, theory, business overlap, take a in was the theory, flush of said, But under and be impact -- all industry some

Jedidiah Gold

competition. and Retail Yes.

John Lai

to I right? this just of other Yes. I Jed so really to heavily start chime both, weight more the but were as rates down. one on slightly competition consumer can versus intrusion, respect pressure come with one, and the interest -- probably combination And And if it's in just to to and/or both a under is and towards the the weighted consumer then competition retail competitive pressure inflation

Jedidiah Gold

and the about So radius call you Simeon, see stores an hosted. competition to a group quarters. competition, the that I that and within much the years, months this are earnings that come to customers after quarter. that old build the on X impact on X-mile stores trend a X look XX with even was X% watching that's radius, then consistent been recorded for X-mile and competitor And is than those begin about lasts we you we performance And theme. When a that stores in greater X have QX, wrote within about our stronger where we plus where last that, the open think years comping QX of at been more this that a We've post to than pronounced, age of back. those those competition it the

John Lai

sauce. It's day, us. it's of emotional the relationship a right? our your that frontline transaction And that, to GMs that secret members can XX-month wave connection I smile. gave at team there's I will have end say, established add say, Jed, as appreciation you from the back, we We some this talk with period come the the there's color And and that been that during what they missed impacted missed first there's purely, and in human -- I this the they our to have and When have too? not then are we hearing customers. an connection, that's customers really

Operator

Kleber question Baird. Justin will from next Your with come

Justin Kleber

Jed, a John front. or just M&A the follow-up on

You consolidating a industry. leading the role in a are guys in good spot take obviously to

additional current Just leverage rate curious what just your appetite is to on backdrop? given take the

John Lai

Yes.

starting look but contract leverage. over of to we on we then path we can willing lower time bottom we starts it a the to had lean bottom and little I we're line grow are really and in through bit the lens clear top leverage, a how that the have on see and then when to line, growing, think, we as can of some effective line, upside the we additional delever with to where and multiples that again, we multiple. at take If potential some

Jedidiah Gold

a is in back to down always is is it's down? range what is about take actually up? And to key leverage there part we And go to we leverage X talk as how acquiring confidence asset as I are think, how is as back our what high purchasing, Justin, are leverage this that in we to are that that important X able healthy being so We spoke leverage And that within I we to. bring right, how mean, the the well. debate, to which that's to are that as and willing taking just bring leverage, high of where a path high we willing comes to

John Lai

adjusted step Yes. we look lease take at further. And leverage. We it a

rents really of the so -- And rents a stores time quite if will assigned through we're these envelope looking business to been a And difficult so comfortable take hard frankly, just stores. many us hurdle much have of that that you with at big the pushed is get the some business. form to sale-leaseback long it another that it saddle high even and have to that makes the for the rent there's financing. And folks leverage, with more have nut

Justin Kleber

And unrelated follow-up of how as growth UWC revenue decompose this we you're modeling just growth 'XX, color about year? the how you're for member just or an thinking any kind on

Jedidiah Gold

Yes.

comp growth, on in membership we the as So of store is the a growth, think slightly guidance, membership Justin, about the high what assumed plus end basis, positive X%. we've

Operator

come Your Lasser from UBS. next Michael with will question

Michael Lasser

under members same-store newer weather and Jed does while when introduction John, are up. of couple industry is it particularly growth reason seem in better, growth this the and consumers business And high end. pressure weather-sensitive ago in of is and been is seem modest you have by are -- be you wash expect those are novelty changing, a signing seeing does years part to that the has location total evidence like the for the subscription coming innovation member the or the mentioned added newer. members But trends just of up I in still retail subdued that ask and a that ramping more towards per the at probably versus member only the attitude you some locations was

expecting degradation the you're the in comp members some end So of low presumably, at range?

John Lai

the for question. thanks Michael,

seen for is look answer less customers we that TAM core, So that out the the estimating we and to that see to When question very is at the subscription sign have and subscription plan we your folks we and a car the believe we're any specific so around zoom at at up? nuance of -- undersubscribed we more no. in look when short The today, park number willing room growth. have U.S.

we have which are exterior that, us but also again rates express they ways. as they're signing fee very to unaware new for And category, plan. you consistent, to whole in introduce lot monthly and when remained there's as flat people often frankly, didn't that have that they're of up capture the that like tells realize a Our a membership historical wash them, one we

it's So we're this we But bunch path, in we're north listen, they of are our really grow. to And a they clean revert store. back the having whole keep you per will on high car. the customer members and into a membership continue going their dirty stores hard time, uncertain XX,XXX to of and trees how once portfolio, a to car all have convert

Jedidiah Gold

to little Michael, to a just bit. And add that

barometer look last and that few has consistently feel about whether X% as at, about rates is points for a quarters. rate rightm One they how fairly changed data the signing consistent of at up of kind we'll XX% as the capture capture behavior consumer level to that have that to been

call. the that's comp on everybody for store clarification one a just The membership then slight And basis. growth,

total biggest membership growth. that As think of coming the driver the about about greenfields growth, we we single total digit. expect online a Obviously, being member

Michael Lasser

question at end is, half be the be to And comp in comps the with year softer trends and back started expectation half comps of low case? follow-up for would why the double-digit XXXX? the the have off the January negative that of half range retail and the second in with would you that expect to as the X% trends My first in laid your comment stronger you you out X% for

Jedidiah Gold

Michael, has first assuming believe and store retail got moderated slight growth year, our the comp just and is February each with built be to plan second throughout line no, the the and the stronger guidance. half what what quarter in in forecast is expectations in -- those listen, half we just in we've where to to more seen we're positive with slightly in our than sales we've line volumes and into close comps

Operator

Your next with Stifel. question will come from O'Cull Chris

Christopher O'Cull

strong period? And recent think said impacted November strong the the comp is weather, when had we impact the question, the was I weather pullback, should regards trend. the weather? a by I about and how think First, we a on For a you dynamic is type October of its of period sharp because that but was should think to on impact follow-up Jed, example, subsequent of about

Jedidiah Gold

definitively Chris, we've me good call say a on don't like think it's this. that a for analysis question. around I to done enough

be we I before what at tends to closer that's even It think I'd conjecture. mean, I what And anything it QX. definitively. be could just look and I but in anecdotally, in QX, saw we're this go seeing want said back to

John Lai

predictable, dependent now cocky, the the And looking question. will morning business little you a and to makes anymore and haul. basis built don't really, where in thank a though, we're weather lot would number we've when other by lucky stars that And reminiscent time the literally stable look talking back that's your going recurring report start XX%, long single say, sound is subscription. right But less that report. about our really really getting strong which really base weather Chris, every we've our your business we at that us for the made day this with every I'm not weather of Yes. at have I of XX% but we I more

Christopher O'Cull

sales And then But underway. be John, drivers I tests do key the several you this marketing for you will and growth programs believe what year? retail know have

John Lai

Yes.

we're premium of premium customers think we and we're and think really marketplace, about the a how We -- I think positioned we that we when And this really, in get us to give really special. experience. we but that important of the have don't makes delivering what us. and overshare value, it's one, is the So our making brand our version farm sure value the on away dilute discounting

discounting honest the be least versus just our to building at special talking and with now more price, you, on at So price, business looking right and attributes we're unique focused about versus of brand price.

So materially and needle for again, us. And then And to been end, not what that there's see. iterate of the stop ongoing we start now. different some continuing the but to moved a will we with offers, some nothing and measure the about we going want different we've this -- test, from that to going been But will some and yet. experimenting number that again, we of from small and as effort we've right on to of talked pilots an of and have channels that's neat has be us things,

Operator

will question Blee come Next with from William. Phillip

Phillip Blee

outlook should than talk about? Your on then that you these for been potential Can about has how And pressures comp XXXX confidence you've sales control some generally from expected higher talked there costs here? scenario. your upside about any expense earnings around think incremental fall-through under we this sales of labor versus kind of margin

Jedidiah Gold

Yes.

confidence this I think, the Phillip, and as EBITDA, time. mean, our point we -- represents I think I about as our we at thinking particularly expense think is look it in best at

in tailwind a you as late that with XXXX the chemical QX, to X anniversary as labor, tailwinds recall, the Just interior in of had January big and our of then reminder, we start optimization to QX. the optimization we we XXXX, clean early of also which anniversary start

to optimization. other mean, that going So speak this is a But see it's owners. we'll think -- of labor bit in like is and the shared prepared I that to team thinking I my this really in we're now, a optimization little where remarks, it we nothing far that as from as programs. Right I -- tailwind have QX

different And across here hundred the is the some management of there few a fragmented the P&L, what nature of the savings in we'll initiatives, savings and given thousand team. across see just expense

kind second throughout the consistent EBITDA flows the just margin top line So line and the year. given from top how actually first half, perspective, throughout the it's half, year, of relatively an

titanium in flow remarks, expect which second half prepared very So then half of talked the we and help price our helping in helping top the nicely the drive that and both through year, expansion. the line of margin tailwind base increase first of drive the we about modest -- the drive

John Lai

our Can we're Yes. We this always priority. that know it's human our definitely don't that margin sure absolutely want I critical to long-term go not page meaningful been to they're do front-end got with I side, to that Jed, same to in our the capital expansion particularly the -- the make investments it it's on And that are we make continue But to We business, highest us, success. loaded. backwards. just for just important. on has and

don't on want So with the future. And We in pull foot to investment an the our comes throttle. want on to gas in that investing respect keep to that back cost.

Phillip Blee

quick a to just competitive kind And back of going then wanted I then the question ask to space.

Have your for be of materialize double-click rationalization? XXXX. these Any on outlook? years. with over you this of it, to this some maybe next in current embedded a your about see Can focus with started gains You spoke a rationalizing on of to the more early that of few that expectation share you some sort bit

John Lai

-- of the So we And distressed there it's short about But premium, that on It's those there's command the under really then out there's good right stuff asset. happen. things at some again, news, more and there But as now. pressure out assets business. to a may the for quality less the a answer look the want some value is mixed no. again, And lot that us, just well. to are of really of there's of about bag. And what a we're there's starting precipice right in is that

good, there's some there's So some marginal.

through a under to the spot existing why have strengthening strategically, really markets. pretty behind strengths of in through where lie There's different And our And intelligence sense makes from what position and why distress. we, One opportunities us traditional the would lean for X some in. of competitive lenses. finger deep good a analysis on a are, kind pulse standpoint, the their it be

be answered a, and materially our us. market a our to through have down technically why bolt-on, share would guess, we increase it if stronghold, for position but market, in we're is So where a strategic improve but able I that double a

that find attractive ambition, that expand is one car to but continue us allows is if new more and geography we not helps always us wash. that's our then adjacent, other also case, The become ideally global that the fulfill to to there's America's a expand which to continue footprint, our

Jedidiah Gold

timing It's our on outlook. difficult into out, the this our into perspective fairly it's guidance, M&A It the don't rationalization And second and to any then we to how build of part become just predict. question, starts plays to speculative. build

not model. the to into that choose build as So we input an in

Operator

will Keith Sandler. next come with The question from Piper Peter

Peter Keith

'XX industry. if openings I'm if industry-wide frame have And where you of you estimate in wondering think the then good up on I believe view an of for John, you land XXXX? have a were number the and new could you really could that what

John Lai

figure been face Well, intelligence Peter, better the I'm with than have smile I talking might saying and because my in I that. you've think lot on couple as the do, listening not call there's really a how I'd pulse on OEMs think And probably folks. know a active who given have good that to you space, the well of a there's on naive of be a -- of I you're to

estimate. But to if say range margin is out would mine in of the you to our less were error a I a ask So me inside XXX perhaps of and XXXX number, informed. was there's of throw units,

Phillip Blee

Maybe Jed. myself. try I pivot back to on I'll to get to Well, you XXXX, can

bankruptcy proceeds and So more did of volatility sale-leaseback caused ask going it of dynamic that this of if just always about in to recent kind a been that's concern I any years? lot year? Is are operators the timing quite amongst down for want think stepping that but with the of proceeds. dry-up pace could openings in market, I the that that's it's impact, sale-leaseback an year-on-year. to is have sale-leaseback an a bit impact don't a you a Or large

Jedidiah Gold

XXXX had feel in we to some that buy already We're in right better particularly the an on XX publicly. sale and High-quality Peter, and We've were sold for baked leaseback closure these. since out rumblings rates. some the of wanting a calls, fully XX of competitor trends of transactions that struggles, there good struggling. our and now market, The QX. our whisperings competitors There's them. closure of anything, being the are if market. about announcement cap financial influx people market assets relating at in their of --

misters. drive really Our that outsized ahead to from rates in purchasing lower XXXX buyers this are as given we look cap how year focus is interested we demand this do even

and have the ability good sheet feel earn and the strategic. given that XXXX just and growth plans of purely amount XXXX. about our ability So to XX% we currently expansion our And our balance on for fund to to the XX% now cash

John Lai

operator But is talk rent the tenant. a Jed, that I'm so and of And the hearing of to to as REITs, the super them. I add in putting percentage that business economics how sheet out pencils the when I coverage the of ratios certainly, some and also with the sales. what that is thing they're only weight the best-in-class would having terms against there's a is solid around quality more a balance important of

hard to how how, pushing our rents super well on consistently it's Mister paint you saddling that broad if going a they long one, brush the And pay to track the proceeds rent want high so you're not seeing to at just how Wash we look a line and respect has a someone when we've and up Car record. car to time. partner with perform, with, But wash and pick responsible operator been we

think And we so that we check box.

Operator

next Thomas-Martin with Capital will BMO from The Markets. come question Tristan

Michael Lasser

this of increases, price increases, more Just indicator a cadence one normalized before leading another see one base could question will maybe The of be me. for a price we XX? i.e.,

John Lai

Yes.

I cadence is far. don't years, every spreadsheet once XX if So your know our out that goes

Tristan Thomas-Martin

not. does It

John Lai

and Star spreadsheet. But every listen, than years, anything there's North funny attempt X Costco. be is That is of with right, Costco no, even at us was -- my for spreadsheet to humor about once our more one conservative those

market. So market price-to-value pricing as really increase. take to our the price to arise. in understand We when the at where opportunities then we relationship want cautiously corny believe and then as and continuously sits sounds, it need But look the earn we position our we reevaluate those

the to that We customer. need and is to consistently deliver great unique business repeatable it's value this And business. our

if comes you for. efficient will, earn that a finicky we very speedy And it getting We in the to an dry anything. single if every single showing to car. people don't their aren't have that not very customers a particular, have feel people day, respect We're you every their And we're be our not car. doing looking could shiny clean when lock So visit. and our love, it on way. And the are business if

every So their to have we business day. single earn

Operator

come will America. Ohmes question Bank with of next Your from Robbie

Robert Ohmes

if question. million one in missed guys I but saw put CapEx to $XXX you I just Actually, that the $XXX I guidance million. apologize this, of

change of what think year years? just I more remind last running the of is last this couple versus been Can million the couple you it's $XXX the years. me like

Jedidiah Gold

pretty pretty it's straightforward. Yes, mean, Robbie, -- I

a a next year. have new in to of due purchase. year it's are number of mix fewer higher ground we And new this land some leases of Obviously, you openings don't versus slightly planned our greenfields year. largely, this for So seeing

at look with So seen about total the it's it's a $XXX,XXX consistent of last X, what the CapEx. we've store X over years, per store. the as reduction X, core CapEx, we But

Operator

Christian The last from question with of come today Carlino JPMorgan. will

Christian Carlino

talked previously had more about locations this understanding plans. You being and surgical about opening more opening than XX year your you're

are just So the the about given a rubric? you're could what And updated to was don't that store, these where speak stores just it sites fit time to open you these line mean then next greenfield your for to expectations construction I year? just openings And that to will what that refreshed up, guess, beyond is growth wrap approach unit open 'XX? this long-term delaying

John Lai

even we we've what can more believe selective be needed chime over more learned against pipeline But and those entire the our lot backdrop, be then competitive with start years. a reassessed to to respect several I'll the you we we competitors. last impact Jed, in. And Yes, as this with

surprise hard -- is much there's advantage. post determine process as deal beginning get the So first we caught have diligence we If as and if an going a someone of where then they will market, we work to if find by on disciplined. to wash potential And again, that We there's radius. engineering X- X-mile and believe cetera. We within the reevaluate to all new that remain a architecture store's car work, we need et be. the a what do,

to going get not to a forward. it's move think don't to whether expectations we make we or are, what to If then on our minimum need we want decision

continue as tightened and it that it, we bit think a if a will, this to ensure greater that that's you end, we rate. prudent down success skinned to we've And So March.

not it's se. to hitting set how be So number any to intentional respect for with we grow. very us, about per And we want

Jedidiah Gold

We're and I mean opened a earning adopting we've at learned we're really process. learnings, these future lot. XXX them point, We've taking to this the greenfields.

had -- handful to pipeline as -- the that we to John's before we of because So costs. rescored point, really development of the a out started we larger these. incur fell

develop a delayed a process to target out handful pipeline, greenfields in continue certain our -- our sites ability just to a just we instead We criteria. the plus that's also mean to is back see so to stores, our refill in how they're unchanged. we XXXX. long And speak, longer, things, to times markets, had on our get new But in given to permitting that in search the it's that were timing We as to remain expansion view us position meet XX%. greenfields going new a to lead go I XXXX into of be the fundamental the those We taking markets. confident now greenfield weren't several we and open pipeline, our and little will strict open and and approval bit that the sites in

Christian Carlino

big impact to few fact high relative And the openings from follow earlier that a mean that up context some the at bankruptcy. competitor in the slowing of the you significantly -- my no past on But is that's and said does years, the there's a near-term what questions, level industry to there follow-up, this respect deceleration the financial is for to with for a are openings a similar other the any implications of steep growth industry? does that Like is your sort for in And in position? own equipment this recent competitor industry your suppliers' tangent -- unique? plans have platforms Or position?

John Lai

position. I Yes. to speak their can't

decel new end, market be think a owns players the we a though, maybe there will national Over with regional this of in region. one doing on high basis. market through term, and But who a lens I lens There one it unit time, X, never any even not long regional they're that at XXX% our quite slight share be well, versus kind on look growth. X person that's is realistic. a will dominant in prediction a

will of their less. on continue, hanging some in market strong continue there's X in to so to strengthen players and just if and fortify will grow. cases, to we the And expect every They that and more number, in cases, part be three region, continue some platforms

brand time be starting going and will is be a to more years. there is present be to themselves. that opportunities not right we hopefully some And So -- will of think to were there's in perfectly of interesting enduring folks positioned when at but really over build the ask again time point. consolidation to the They're now it's again, prediction several to the on themselves that that to some monetize. this to our capitalize going monetize some an next And that we're

Operator

any turn like go would session. our sir. question-and-answer for This Please I conference back closing the Lai John concludes ahead, to to Mr. over remarks.

John Lai

in markets, portfolio joining the our into store for call. one I thanks, I work go Well, the way Whenever start of everyone, with up. our and our any always smallest

for to we're to really the the big team test how go litmus our of Mahals. members and the well But dogs Some Taj of like me, it's performing.

was morning, to see were smile. out the XX Euclid. wave I here odometer in Tucson store and -- and this has the the over went So called We And Broadway that pleased I Wash years under on to a I minutes, was who whisked is. me, feeling virtually to spotless. Car And was really was great. and epitomizes this on tunnel.My I in Mister way I my And X through came car the

we're good is in and a XXX-plus only weakest every store we're We've day stores, of executing really as our strong And infrastructure, strong to north single built day now weave, across as critical out. equation. really a our So link. and

can't We're forward super proud I'm share to optimistic very call. year, the looking upcoming about the results next wait earnings our team. and this really So to We're of we in XXXX.

Jedidiah Gold

Thanks, guys.

Operator

Thank now has presentation. attending concluded. conference today's The you for

disconnect. may now You

Mister Car Wash (MCW) 19 Feb 252024 Q4 Earnings call transcript