Good day, everyone, and welcome to the Jack in the Box Inc. First Quarter Fiscal 2015 Earnings Conference Call. Today's call is being broadcast live over the Internet. A replay of the call will be available on the Jack in the Box corporate website starting today. [Operator Instructions] At this time, for opening remarks and introductions, I would like to turn the call over to Carol DiRaimo, Vice President of Investor Relations and Corporate Communications for Jack in the Box. Please go ahead.

Thank you, David, and good morning, everyone. Joining me on the call today are Chairman and CEO, Lenny Comma; and Executive Vice President and CFO, Jerry Rebel. During this morning's session, we'll review the company's operating results for the first quarter of fiscal 2015 as well as some of the guidance we updated yesterday for the second quarter and fiscal 2015. In our comments this morning, per share amounts refer to diluted earnings per share, and operating earnings per share is defined as diluted EPS from continuing operations on a GAAP basis excluding restructuring charges and gains or losses from refranchising. Following today's presentation, we'll take questions from the financial community. Please be advised that during the course of our presentation and our question-and-answer session today, we may make forward-looking statements that reflect management's expectations for the future, which are based on current information. Actual results may differ materially from these expectations based on risks to the business. The safe harbor statement in yesterday's news release and the cautionary statement in the company's most recent Form 10-K are considered a part of this conference call. Material risk factors as well as information relating to company operations are detailed in our most recent 10-K, 10-Q and other public documents filed with the SEC. These documents are available in the Investor section of our website at www.jackinthebox.com. A few calendar items to note. Jack in the Box management will be presenting at the Bank of America, Merrill Lynch Consumer and Retail conference in New York on March 3; and at the UBS Global Consumer conference in Boston on March 4. Our second quarter ends on April 12, and we tentatively plan to announce results on Wednesday, May 13 after market close. Our conference call is tentatively scheduled to be held at 8:30 a.m. Pacific Time on Thursday, May 14. And with that, I'll turn the call over to Lenny.

Thank you, Carol, and good morning. Jack in the Box reported a great quarter yesterday. Our same-store sales were better than expected and we continued to grow margins at both brands. This, along with the 10% reduction in our diluted share count, helped drive a 24% increase in operating EPS versus the year-ago quarter. Same-store sales at company Jack in the Box restaurants increased 3.9% for the first quarter of fiscal 2015 as we experienced a significant acceleration in trend in the second half of the quarter. On a systemwide basis, comp sales increased 4.4%, which was our highest increase since the fourth quarter of fiscal 2007. While most macro indicators seem to be moving in the right direction, the tide is not lifting all boats equally. And once again, Jack in the Box outperformed the industry with systemwide same-store sales growth 340 basis points higher than the QSR sandwich segment. I'm pleased to report that the sales results at company Jack in the Box restaurants were driven by a combination of average check and transaction growth across all of our major markets. Breakfast and late nights were again our strongest dayparts in the quarter. As we've seen in the past couple of years, these are areas where we have very strong equities. Consumers recognize us for our freshly prepared breakfast and fresh cracked eggs. And with our 24/7 drive-thru service and the all-day availability of our full menu, they recognize us for accommodating their late-night activities. But we have opportunities in the lunch and dinner dayparts to grow sales, and we've increased our focus on those areas in order to make a stronger position in the hamburger business. We'll continue to leverage late-night and breakfast as we did in the first quarter with media messaging around both dayparts, including…

Thank you, Lenny, and good morning, everyone. With strong same-store sales growth at both brands and a benefit from refranchising at Jack in the Box, we were able to drive significant margin improvement and continue to return a substantial amount of cash to shareholders during the quarter. For Jack in the Box, the 3.9% increase in company same-store sales was comprised of pricing of approximately 2.1%, mixed benefits of 1% and transaction growth of 0.8%. For Qdoba, the 12.9% increase in company same-store sales was comprised of a 9.8% increase in the average check, which was driven primarily by the new simplified menu pricing structure and, to a lesser extent, by lower discounting, transaction growth of 1.9% and catering contribution of 1.2%. For the first quarter, consolidated restaurant operating margins improved 100 basis points to 19.3% of sales as same-store sales growth translated into nice margin expansion at both brands despite headwinds from commodities and minimum wage increases. We were particularly pleased to see the 290-basis-point improvement in Qdoba markets. SG&A was negatively impacted by pension expense, as we expected, as well as mark-to-market adjustments. In addition, Qdoba advertising costs were higher in the quarter, as we added support to the launch of the new simplified menu pricing structure. The tax rate for the quarter of 36.1% was positively impacted by the retroactive reinstatement of the work opportunity tax credits for calendar year 2014, but we expect our full year tax rate to be approximately 37% as those credits have not been authorized for 2015. Given the annuity-like cash flows our business model generates and the greater flexibility of our new credit facility, we remain committed to return cash to shareholders. We repurchased over $101 million of stock during the quarter, and have approximately $115 million available under current board…

[Operator Instructions] Our first question comes from Joseph Buckley of Bank of America.

Lenny, can I take you back again to the Jack in the Box sales numbers? And just sort of what the inflection points have been? It sounds like, in the current quarter, the Buttery Burger promotion that kicked off on Super Bowl Sunday, I think you said -- not promotion, addition, has been like an incremental driver. But what was the first couple of legs up from the 1% to 2% expectations you had maybe 7 weeks into the first quarter?

So Joe, I spoke about at ICR that we were going to really focus on the lunch and dinner dayparts, primarily trying to grow some equities in the burger business. And a lot of that thinking came from the research that we did last year, where the consumer essentially told us you're not doing a great-enough job with burgers. So the Sriracha Burger, we think, helped in Q1. And then supporting the Sriracha Burger, we kicked off the year with the hospitality training, so I think both of those things helped. Now I wish I could tell you how all of the economic drivers are putting wind in the industry's sales. Obviously, it's putting a little more wind in our sales than others, but we would think that it's essentially the service and the focus on lunch and dinner dayparts with the new burger, which is all incremental to what we've been focusing on for the last year in late-night and breakfast because we still haven't let up on those 2 dayparts. So we're thinking that all those things are just coming together nicely.

Was there any -- because from our seats anyway, it looks like almost like a light switch was flipped and the business got dramatically better. Were there any differences in advertising or any differences? Can you talk about any competitive activity? Or would you attribute some of the improvements to declining gasoline prices? Just interested in your broader thoughts.

So I won't talk about the economic drivers only because it's not impacting us the way it's impacting others. We're actually doing better than the industry, so it's hard for us to say it's one thing or the other. If we were tracking with everyone else, I might say it's gas prices or other things. But I think it's the things we're doing in addition to that. But you alluded to something that we have experienced some subtle changes with, and it's too soon to tell whether the consumer is responding to that. But at least there is some evidence and our hypothesis would say maybe it's helping. On the advertising front, both in the food footage that we use in our outdoor advertising and POP, and also in our television advertising, the emphasis on food and the way we display the food to the consumer has changed. So if you look at our POP today, if you look at our outdoor advertising today, our marketing group has made an adjustment that really points out specific ingredients and tries to focus on the quality of those ingredients. So the products may not be as sort of neatly put together, but the emphasis on things like the juiciness of the patty or the texture of the bun or the freshness of the tomato, those things are coming across loud and clear. And actually, even when you look at the amount of space on the television screen or on the POP that we give to the food, it's a much larger percentage of the space, so we're getting close-ups. So you can check out the commercials on our website. You can sort of compare and contrast for yourself, but that is certainly one change that was put in place.

Joe, this is Jerry. Just one addition to that. If you look at the pacing of the sales throughout the quarter, when we were announcing guidance back in November, we had 7 weeks' worth of data, and we were trending at about 1.5% on company sales growth for Jack in the Box. The last half of the quarter, though, we averaged greater than 5% comps and we were driving positive transaction growth beginning in the second half of the quarter. So you're right, we did see the pacing pick up about midway through the quarter. And then also, I just want to add one clarifying comment here with my prepared remarks. I'm told that my natural conservatism snuck into my same-store sales guidance for Jack in the Box. I should have said 3.5% to 4.5% for Jack, and apparently I said 3.5% to 4%, so I apologize for that.

Next question?

Your next question comes from Brian Bittner of Oppenheimer.

On the comps, it's probably going to be talked about a lot. But, yes, I totally had my head wrapped around this Qdoba comps of double digit. It's not that it makes it any less incredible, but I can point to exact reasons why you're seeing that. And with the momentum you're seeing there, it makes a lot of sense. Again, coming off Joe's question, Jack in the Box at 10% trends, that got me a bit astonished here. And the industry is obviously healthy, but not to that extent. You just went through some of that stuff with Joe, but is being heavily -- I mean, I'm just trying to get some more out of this. Is being heavily concentrated in California with minimum wage step ups helping there? I mean how are your peers doing in those kind of specified markets and relative to the national landscape? And with the 10% comps that you're kind of seeing over the past month, how does the average check differ in that composition of that comp versus what you saw in the quarter? If you could kind of walk through those 2 things, that would be helpful.

Brian, a couple things. First off, I just have to be honest, we're just as astonished by the performance as you are. These are subtle changes and very few changes compared to what we intend to do that are already driving pretty big time results. So -- and honestly, they're so hot off the presses that we haven't even had an opportunity to dig deep enough into the drivers to fully understand why the guests are responding so favorably. So keep in mind, there's just more learnings to be had and you'll see some of that. We'll talk about some of that in the future. When we look at Buttery Jack and the launch of that product, we look at the mix on that, it's the highest we've ever seen on the launch of a permanent new item, at least during my entire time at Jack in the Box. And we can't seem to find anyone who's been here long enough to say that we've had a product that performed better than the launch of the Buttery Jack. So this is, as we said in the prepared remarks, pretty unchartered territory. But when we look at the-- we go back to the research that we did last year, the way that we have sort of come to reason with the results is when we looked at how the consumer rated our hamburgers, in the research, they rated them pretty poorly compared to our competitors. Yet, when you look at our average unit volumes and what we're able to achieve as a brand, we fare pretty well. So when we dug into some of the more qualitative side of that, what we found was the consumers have their sort of fan favorites on our menu. Things like the Sourdough Jack. But what they don't say about our burgers is that we holistically love your entire line of burgers and we holistically believe that you're selling us quality products. What they say is, "We like this one product." So we're getting the benefits associated with that, but what we were not getting is the halo associated with the belief system that Jack in the Box's entire menu, and particularly, their entire line of burgers, are craveable. So when you look at the launch of Buttery Jack, Sriracha Burger before it, as I said at ICR, these are all great sort of foreshadowing of where the entire menu will go, and it's exactly what the consumers said that they would respond to in the research. So although it's a few things, those are the drivers.

That's interesting. But what -- on the burgers, I mean what is it exactly that they were saying that they didn't like about your burger lineup?

We haven't shared a lot of that detail, but I'll give you just a little color. What they said was that our beef patties were not juicy enough and they also said that some of the ingredients on the hamburgers -- that we could make some changes there that would really bring the flavors to life. And they also said that they expect from Jack in the Box, compared to our competitors, they expect bold, craveable flavors, and we weren't doing enough of that.

Next question comes from Jake Bartlett of Morgan Stanley.

I wanted to touch gear a little to the Qdoba and talk about just the -- because it seems like sales have ramped in the first -- in the beginning of the second quarter here. Any changes that went on that made them accelerate? Looks like the year-ago comparisons are probably more difficult.

Yes, Jake, we're just -- there's a couple of different sides to that, because part of what we did beginning of the year was we launched the new value proposition that I spoke about when the consumer has freedom of choice across the entire menu. Essentially, it's one price. You pick the protein and then you get to build the product sort of your dreams. What happens in the transaction is that the consumer now has a much more pleasant interaction with our employees, and the employees are essentially helping them build what would be a great product and suggesting ingredients like guacamole or the Queso. So it's not just that some folks have spoken about, it's not just the price increase. In fact, the consumer doesn't interpret it that way. So when we launched the value prop, keep in mind we tested it last year in Seattle and Boston. We had great results and we continue to have great results in those markets. No drop-off in the performance there. So when we launched this thing systemwide, we anticipated there'd be at least a little bit of a transaction erosion because we expected that some of the consumers that were really hooked on some of the value-based things we were doing in the past would be detractors. And so we did get a small amount of that. We did lose some of those transactions. However, we grew at a faster rate with the consumers who really found value in the freedom to choose anything across that menu and build the ultimate product. So that far outpaced the negatives and we were able to see a nice uptick. So when you look at the overall gain in pricing, the way you can look at that is about half of the gain is real price. But the other half is a reduction in discounting.

Got it. Got it. And so it sounds like sales were higher towards the back half of the quarter as all -- as this is gaining steam. Were the sales in the back half of the quarter kind of in line with what we're seeing in the beginning of the second quarter here?

Jake, this is Jerry. The pacing of the Qdoba comps for the company in each of the 4 periods of the quarter were -- all of them were above 10%. So we really didn't see the change, period-to-period, like we saw at Jack in the Box. The other thing that I want to mention here is the second quarter comps, which are trending above these levels right now, have not yet begun to roll over the 7% comp trends that we saw beginning actually this week. So as we sit here today, we're just now beginning to roll over the Queso Bliss promotion last year, which I think Lenny said in his prepared remarks were tracking at high single-digit level comps last year beginning this week.

Got it. Okay. I guess I was just trying to figure out what's caused this kind of acceleration here, I guess, since the [indiscernible] pretty even in the first quarter, but it seems to have accelerated in the beginning of the second. I mean, there's no other changes that were made that would have caused that?

It's just really consumer acceptance. We monitor social media and the consumers -- there's an increase in the positive remarks associated with what we're doing across the quarter and even trending into the second quarter. So as people become aware of our differences and the freedom to choose, all of what makes us distinct across the menu, that's just gaining momentum.

Next question?

Next question comes from Chris O'Cull of KeyBanc.

My question is regarding the Qdoba's margin. Clearly, there was -- the margin improvement is very impressive this quarter. But Jerry, I was wondering if the margin improved through the quarter. I was thinking maybe there was some suggestive marketing after the menu changed that could have initially pressured the gross margin. And then also, just curious what the gross basis point impact of the 6% commodity inflation was on Qdoba.

Let me take the first part of that question first, Chris. So what we saw in the quarter is that margins at Qdoba were pretty consistent throughout the quarter. If anything, they trend down in the January timeframe, which is what we normally see just as the PSAs trail off a little bit in January following Christmas. But we really didn't see any significant changes throughout the quarter on the Qdoba comps. The impact on the food and packaging cost, though, for Qdoba, if you look at that, the intention of the Qdoba pricing structure is that food and packaging would tend to go up along -- or let me rephrase that, food and packaging, as a percent of sales, would tend to stay pretty static, is as what it did prior to the pricing change, and we would get leverage on everything else along the P&L. It is exactly what we saw happen. The 6.2% increase in comp for Qdoba specifically -- not comp, but increase in the commodity costs, was -- I'll get that for you, Chris, but I'm just looking around at some notes right here. But we don't have that specifically, but I could tell you what the total increase in the Qdoba food and packaging cost was, so let me just get that for you just a moment. 80 bps.

Okay. And just as a follow-up, post the change to the menu, the pricing structure on the menu, the stores that do the $1.3 million, $1.4 million in AUVs, are they still showing margin in that 24% -- around 24%? Or are they showing better margin? Just trying to understand how that menu change maybe affected the higher-volume stores.

We didn't update that, Chris, but they were trending at, we said, north of 23% on the call before that. So with the pricing structure, you would expect that, that would have risen. The entire system rose 290 basis points, you'd expect that to have risen right along with it.

Your next question comes from Jeff Bernstein of Barclays.

Seems like there's a lot of focus on the comp side. I was going to ask more on the margin side for the broader entity. I know you just recently updated your long-term goal to kind of -- I think it's now 19% to 20%. I think you bumped it up 50 bps on both ends. But actually guiding to that new higher level for fiscal '15, and as you mentioned that despite elevated food inflation and labor concerns, I guess it's actually both minimum wage and affordable care. So just wondering, as you think about it, do you think you're capturing the opportunity sooner and therefore it's more limited expansion going forward? Or can you see that long-term target pushing into the low 20s? And I guess as you think about that, what would be the greatest drivers of future expansion? Is it dayparts that would really drive more the margin or improve throughput? Just kind of get our hands around the margin opportunity. It seems like you're well ahead of schedule or continue to run well ahead of schedule.

Jeff, let me give you the fuller color and then I'll pass the baton to Jerry. I think, in general, when you look at upside potential for margins, it will all be driven by sales growth. The drivers of sales growth at both brands will be a little different. For Jack in the Box, it'll be driving dinner and lunch through improvements in the more targeted dinner and lunch menu items, primarily burgers, drinks, fries. And we'll do that very similarly to how we handled late-night and breakfast where we'll continue to bring innovative products to the menu, but we'll also continue to try to enhance the experience and differentiate the experience. So for the Jack side, as you sort of hinted, it will be daypart expansion. It will be lunch and dinner focused. And then obviously, we'll continue to invest in late-night and breakfast because we don't want to let go of those equities and the growth that we've achieved there. On the Qdoba side, it's really more of the brand reinvention work that's happening. And the focus of that has initially been across the entire menu, it's been establishing a new consumer value proposition, and on the heels of that will be all of the image and place or experience-related work that really then signals to the consumer, not just in the menu, but in appearance and behavior that we're different. And that work is just being initiated today so that we would expect in 2016 and beyond to start capturing some of the impacts there.

And keep in mind, Jeff, ACA doesn't kick in until 2016 for us.

Jeff, the other thing is when we gave you the long-term guidance, you can see what we provided in terms of same-store sales growth, which ended up driving what the margin improvement was going to be. We didn't contemplate same-store sales growth that we're beginning to see here in the second quarter. So I think it's fair to say, if that continues, you would expect to see the margins grow higher than that.

Understood. And then, Lenny, you just mentioned -- or earlier mentioned kind of the advertising and media the Jack in the Box brand and maybe that's one of the subtle changes. Can you just remind us maybe the total spend or maybe the mix of local versus I guess would be regional. I'm not sure how you define the way you spend the ad dollars if it's not national. But how do you measure the efficiency that -- I guess the concern being that you push lunch or dinner and you risk breakfast and late-night if you're still talking about the same total dollars.

Yes, so a little color on that. We're still spending about the same total dollars. Obviously, the sales will drive up the advertising budget and may feel a slightly higher spend. But essentially, about 1% of what we spend goes local and the remaining 4% goes, well, not quite national, but at least regional. And that's total, that includes what the consumer sees, but then also some of the underlying sort of G&A associated with that support. So nothing's really changed there. What's changed is just what we're doing with it in the time that we've purchased on television or the space that we've purchased on billboards. I hope that made some sense to you.

It seems like it's a whole lot more efficiency with the same dollar spend but more effectiveness.

Yes. And I think the way to look at this is, and I'll give you an example, when we -- we've been running ads for 20 years that have the same formula, and that formula gives us a certain number of seconds of food footage. We've almost doubled the amount of time allocated to food footage in our television advertising versus what that prior formula would have dictated. So it is more efficient as long as the consumer responds by giving us a greater share of their wallet. That seems to be working today, but this is the first quarter we've really tried this so it's too soon to sort of peg all the results on that. And we're going to try a few more things before we're able to say we've really honed in on the new formula.

Your next question comes from David Tarantino of Robert W. Baird.

A couple of questions around the Jack in the Box comps. First, Lenny, the guidance for the second half of this fiscal year assumes a fairly dramatic slowdown from the rate that you're running right now. So I'm just wondering if there's anything that we should consider other than just a prudent approach on giving that guidance. Is there a change coming in terms of initiatives? Or anything that we should be aware of that would cause that level of slowdown?

So I think, to use your words, it is a prudent approach, which is very typical of Jack in the Box. And I said earlier, this is sort of uncharted territory for us with this second quarter performance and the Buttery Jack performance. So we don't want to bank an entire year on 3 weeks' worth of performance, and that's why we're taking a look at the 2-year trends and the Q2 here and trying to be reasonable. And then we're not forecasting out beyond Q2 this type of rate of growth. So it is just a prudent approach. Obviously, at the end of Q2, we'll have a better idea of staying power, and we're hopeful there will be some upside potential. But we're going to remain in a show-me state, that's just who we've been historically and it's really nothing other than that.

David, just on a 2-year trend on the back half of the year. We're still plus 5 on a 2-year trend, given what the implied guidance would be for the back half of the year and considering what we're rolling over.

Makes sense. And then I guess my real question is around the longer-term implications of some of this comp strength that you're seeing on the Jack in the Box brand? I was just wondering if you're starting to see any initial signs from franchisees or the system in terms of interest in ramping up unit development as you look out to next year or even the following couple of years.

So what I would say is there is a lot of enthusiasm, both internally and with our franchise community, to define growth opportunities. So we are optimistic that if the sales trends continue, we would be able to ramp up growth at Jack in the Box.

Your next question comes from Jeff Farmer of Wells Fargo.

A little bit of a topic change. Given where your Qdoba average unit volume and restaurant-level margins have been trending in '15, what could the concepts unit level economics look like as you potentially accelerate development, be it '15 or '16?

So Jeff, a couple of things there. So margins this quarter of 19%. We've indicated that we would expect the margins for the Qdoba brand to exceed that of the Jack in the Box brand for this year. I think, in order to look at what the unit economics could be going forward, we're probably a little premature. Great question, probably a little premature on the answer on that. We haven't yet built the first prototype. We have 2 under construction that we expect to open up in the spring. And I think we'd have to see first if those new units open up where we think they should open up. And if they do open up, say, above the $1 million, $1.1 million level, then we would expect to be able to provide you some additional color on what the unit economics would look like. But I would say we would expect them substantially better than what we had reported to you guys back in the 2012 Analyst Day. But it's too soon to tell yet. We don't even have one operating yet.

Okay. And then just sort of following up on margins. You just touched on this Qdoba, expected to do -- stronger than Jack. But obviously, you've given us a long history here of consolidated restaurant-level margin guidance, but just considering all the moving pieces of both concepts, are you going to provide any additional color in terms of margin performance by concept in '15, sort of beyond just Qdoba outperforming Jack?

We do provide -- in the Q, we do provide brand-level restaurant margins for each brand. So we would expect to continue to do that. But with guidance, we'll probably continue to keep it on a consolidated basis for guidance. But I think you could probably deduce what the margins could be from the sales guidance that we do give you versus -- and also consider what we've been reporting in terms of the historical margins for each brand.

Your next question comes from the line of Nick Setyan of Wedbush Securities.

A quick clarification on an earlier answer you guys gave to an earlier question. So geographically, I mean, are you guys actually seeing any kind of big divergence in terms of comps for Jack in the Box across -- whether it's California, Texas or any other region?

I think one of the things that folks are wondering is if the sales are being fueled by a huge uptick in California and Texas. And folks are wondering if weather or minimum wage changes are driving some weird anomalies. We're not seeing that. In fact, outside of Texas and California, we're seeing quite a bit of growth. So we believe it's what we're doing more so than what the economy is doing for us.

Got it. Okay. And then on the refranchising, I thought we were going to get, I think, approximately 20 or so stores to be franchised this quarter. Is that going to happen next quarter? Or is that kind of off the table now?

No we -- it's not off the table at all. We had -- I think we said on the November call, Nick. And if we didn't, I apologize for that, but we expect that to now happen in the second quarter.

[Operator Instructions] Your next question comes from Joseph Buckley of Bank of America.

Just was curious on labor costs. I realized this might be skewed by the California minimum wage increases. What kind of wage rate inflation are you seeing currently? And are you starting to see some pickup in turnover as the overall economy improves?

Joe, this is Lenny. We're not seeing an uptick in turnover. We'd been reading some of the articles out there that are pointing towards this competition for talent and then there's this war being waged for talent across competitor brands. We're not seeing that. We're not seeing it in our turnover numbers, and we're just not experiencing that behaviorally in the restaurants. In the first quarter of this year when we did the hospitality training, we think one of the things that we experienced there was just better staffing to sales where our management team is doing a better job of fully staffing the high sales hours, and we think that actually is helping to drive our comps. So -- but that's really basic blocking and tackling, it's nothing that's sort of macro.

Your next question comes from Alex Slagle of Jefferies.

A question on SG&A. Just along with the revenue upside seem to come higher than expected SG&A in the quarter, both in dollars and as a percentage of revenues versus at least our expectations. Can you could kind of talk to how that compared to your internal forecast? And if there were any timing shifts or accrual adjustments that may have moved forward?

Yes. I would say, Alex, a couple of things. One, if you look at the spend versus last year on a G&A, excluding advertising, we were about $3 million higher than what we were first quarter last year. The difference was due to 2 noncash items. One would be the pension expense, which was $1.5 million higher in this year's first quarter. You may recall that, back in the November call, we guided pension expense to be $5 million higher for the full year. The other item was last year's first quarter saw a favorable mark-to-market adjustment on the nonqualified retirement programs that we have. $1.4 million this year, so a modest negative impact at about $0.2 million. So when you look at the change versus last year, that was $1.6 million. That was a surprise, the pension wasn't. But if you look at other than that, the control of the G&A, from what we used to run the business, I think it was pretty well controlled. And x those items, we would've actually seen a lower G&A system-wide sales than what we had last year.

Alex, this Lenny. If you look at the G&A opportunity going forward, one way to think about that is, in the short term, next, let's say, 18 to 24 months, both brands are trying to initiate new activities in the field. And with marketing, that are going to require some resources. So you can expect us to make sure we have those resources available so those brands can continue to drive type of growth in sales that would also lead to growth in units. So there'll be an investment there. But beyond that, when you look at an opportunity to bring down the G&A, it's a couple of things: one is, post brand reinvention timeframe, you need a little less resources; two, going through the painstaking task of trying to bring down your pension costs; and then three, continuing to find efficiencies across the entity associated with the new shared services model that we've put in place. So we think those opportunities are there, they're just not all going to flow through in the short term.

Your next question is from Jake Bartlett of Morgan Stanley.

The question was about the share buybacks and -- much larger than we expected in this quarter. Was this what you had contemplated when you gave your initial guidance? And any guidance you can give us for the rest of the year? Almost your entire authorization was moved on this quarter or what's kind of upcoming. Any comments on that would be appreciated.

Yes. So we had a -- Jake, we had $1.00 value that we had assumed in our guidance, which had an EPS impact, obviously. And the $100 million that we did in Q1 was consistent with what we had planned to do. We would expect to continue to return cash to shareholders throughout the course of the year, which I think has been our practice. I don't know that I'd expect $100 million quarters for the next 3 quarters. We have $115 million left of authorization, but we do intend to continue to return cash throughout the year, though.

Okay. So you would have expected that amount in the first quarter?

We expected that amount in the first quarter, yes.

There are no further questions in queue at this time.

Great. Thanks, everyone, for joining us, and we will look forward to speaking to you either later today or at the upcoming conferences.

This does conclude today's conference. All parties may disconnect at this time.