Good day and welcome to the Chipotle Mexican Grill's first quarter 2015 earnings conference call. [Operator Instructions] I would now like to introduce Investor Relations Manager for Chipotle Mexican Grill, Mr. Mark Alexee. You may begin your conference.

Thank you. Hello, everyone, and welcome to our call today. By now you should have access to our earnings announcement released this afternoon for the first quarter 2015. It may also be found on our website at chipotle.com in the Investor Relations section. Before we begin our presentation, I will remind everyone that parts of our discussion today will include forward-looking statements as defined in the Securities laws. These forward-looking statements will include statements about our potential business results, growth in shareholder returns, projections of a number of restaurants we intend to open and trends and development costs, estimates of future and comparable restaurant sales increases or comps, and supply chain and other trends affecting future comps, projections regarding trends in food, labor and general and administrative costs, our expected effective tax rate, statements about stock repurchases as well as other statements of our expectations and plans. These statements are based on information available to us today and we are not assuming any obligation to update them. Forward-looking statements are subject to risks and uncertainties that could cause our actual results to differ materially from the forward-looking statements. We refer you to the Risk Factors in our Annual Report on Form 10-K as updated on our subsequent Form 10-Qs for a discussion of these risks. I'd like to remind everyone that we have adopted a self-imposed quiet period, restricting communications with investors during that period. The quiet period begins on the first day of the last month of each fiscal quarter and continues until the next earnings conference call. For the second quarter, it will begin June 1 and continue through our Q2 earnings release in July 2015. On the call with us today are Steve Ells, our Chairman and Co-Chief Executive Officer; Monty Moran, Co-Chief Executive Officer; Mark Crumpacker, Chief Creative and Development Officer; and Jack Hartung, Chief Financial Officer. With that, I'll now turn the call over to Steve.

Thank you, Mark. I'm pleased with our performance during the first quarter. 2014 was an extraordinary year for our business and we're off to a strong start in 2015. During the quarter, we generated revenue of nearly $1.1 billion, an increase of 20% on comparable restaurant sales growth of 10.4% and the opening of 49 new restaurants. This produced diluted earnings of $2.88 per share, an increase of 47%. These results are particularly strong considering that we were up against 13.4% same-store sales growth in Q1 last year and faced with harsh winter conditions in much of the country, including many important Chipotle markets. We also saw some challenges related to our decision to stop serving carnitas in some of our restaurants. However, the strength of our business has weathered these challenges and emerged to set us up for a great year in 2015. Our performance is the direct result of our continued focus on the things that really drive our business, our unique food culture and our unique people culture. We have a strong history of establishing very high standards for food we serve. Standards that are very often hard to meet, given our requirements for the ingredients we use. We have encountered challenges from time-to-time, since we began our journey to find the very best ingredients we can, and we do not anticipate our recent pork supply issue to be our last one. But our track record of driving positive change in these areas is unprecedented, and we believe these higher quality ingredients taste better. In January, we suspended one of our pork suppliers after a supply chain audit found that they were not fully compliant with all of our standards. Our protocol requires that pigs are raised with access to the outdoors or deep bedding in barns…

Thank you, Steve. Our ability to continue to deliver excellent results depends on the continued success of the special people culture that we have created at Chipotle. This culture continues to provide an extraordinary restaurant experience, while simultaneously allowing us to develop the excellent leaders we will need to accommodate our future growth, and help us to maintain our strong unit economic model. During the quarter, we continue to strengthen our restaurant teams, adding 42 new restaurateur and promoting 11 in the field leadership roles, either Apprentice Team Leaders or Area Managers. These leaders are able to attract very talented people to our company and develop them to reach their full potential. By hiring only top-performing employees and developing them to be at their very best, we're able to do things in our restaurants that other restaurant companies simply can't do. Not only our team is running extraordinary restaurants, preparing delicious food using classic cooking techniques and providing exceptional customer service, we're also elevating the people around them. This approach to running our restaurants is what enables us to create such an extraordinary dining experience and to deliver such strong unit economics. The strength of our culture is evident in many ways, including through a growing number of individual success stories, as more and more of our people are climbing the ladder from crew to management and field leadership positions as well. In fact, last year alone, we promoted more than 10,500 people, who started as crew, into management positions. More than 78% of our restaurateur started with us as crew, many having never even worked in a restaurant before. During the quarter, one particular leader really captured our attention, [ph] Montel Milleage, who demonstrated his ability to assemble a team of all top performers, and then empower them to…

Thanks, Monty. The marketing we do at Chipotle is unlike that of any other fast food brand. The reason for this is simple, very early on we decided to spend more on our ingredients and less on our marketing. It's always been our belief that better quality food prepared by hand and served by excellent teams would be the most powerful marketing of all. In fact, we were serving better ingredients, including pasteurized dairy, local produce and meats without antibiotics or hormones long before there was even significant customer demand for such things. Over time, this has created powerful differentiation between Chipotle and other fast food brands. This approach has served us well and our ongoing marketing research makes us confident that this is the case. Chipotle has become quite buzz-worthy with awareness coming from social medial, public relations, advertising and our local and event marketing programs. But with less reliance on traditional advertising than many of our [technical difficulty] strength of our programs in areas other than advertising, generates considerable attention and awareness and as does the breakthrough nature of our content programs, which have reached well beyond what we would get through traditional advertising. We are also seeing greater interest among customers who are looking to eat healthier and defining healthy around such characteristics as natural and minimally processed ingredients, exactly the same kind of ingredients we use to make our food. And we are also seeing that a majority of customers, about 60%, are willing to pay more for better food, food that is made without artificial ingredients. All of these findings really support the way we run our business and our marketing, and all the trades that are reflected in various aspects of our marketing. The vast majority of fast food brands use limited time offers,…

Thanks Mark. We're very proud of our results for the quarter, as we grew our revenue to nearly $1.1 billion or 20% increase as compared to last year and EPS was up 47% in the quarter. Our average restaurant volumes have surpassed the $2.5 million mark for the first time, and we sit to little more than three years ago that our average volumes passed $2 million for the first time, meaning that we've been able to increase our average volumes by more than $500,000 per restaurant, while adding more than 600 new restaurants during the past three years. This obviously has had a significant positive affect on our unit economics, and it means we're serving more Chipotle to more and more people in new and existing restaurants, as we pursue our vision to change the way people think about any fast food. As you know, this year we faced the most difficult comp comparisons we've ever had as a public company, including lapping the menu price increase from Q2 of last year. We're pleased with the 10.4% comp in the quarter, on top of the 13.4% comp from last year. And we believe the comp was affected by weather, especially in parts of the Mid-Atlantic, the North East and regions in the south, and by the pork shortage, which Steve talked about. It's difficult to put a precise impact on the combined effect of weather and the pork shortage during the quarter, but we believe the comp could have been as much as 100 basis points to 200 basis points higher with normalized weather, and had we've been able to serve carnitas in all of our restaurants. And it's not possible to separate the weather impact from the effect of the pork shortage, since they happened at roughly the…

[Operator Instructions] And at this time, we'll take a question from Brian Bittner with Oppenheimer & Co.

So a question on comps, and I'm just trying to understand the way you are thinking about it. Over the next two quarters, you're facing very similar traffic comparisons that you faced in the first quarter. So are you assuming that over the next couple of quarters, you see very similar traffic growth that you saw in this first quarter, which I'm assuming is in the low-singles, and then you're just rolling in the loss of the pricing as it falls off? Is that kind of how you're thinking about comps going forward?

No, I think the comparisons get tougher, and so I would expect that the transaction comps are not going to hold up at the same level as the first quarter. The way I would think about it is, in April so far we're seeing comps in the high single-digit range, and that includes menu pricing of about 6.1%. That menu pricing will fall off over the next few quarters. And so as that 6.1% falls off, you're going to see transactions that are going to be moving down into the low single-digits. And then we continue to compare it to tougher comparisons as the year rolls out. So I would not expect to see the same transaction growth as you saw in the first quarter continue as we move to the rest of the year.

And then, second and last question. How much is your online orders as a percent of your sales mix today? And as you focus on it, what really are the benefits and where could it go in your mind as a percent of the business?

What I include as kind of all online and catering and burritos by the box, they're all kind of non-traditional orders. That was about 6.6% during the quarter. That's at or near an all-time peak. That number will vary quarter-by-quarter, because catering has seasonality. Mark mentioned in his comments that we're approaching our peak catering season. And so I would expect that catering would move up in Q2, and I would expect that 6.6% to increase along with the higher catering expected in the next quarter. We don't know where it can go, but we do know some competitors talk about their total catering in the 8%, 9%, 10% range. And so we think we've got a lot of room to grow. Catering is very young. We still think that our mobile ordering as Mark talked about, we could do a lot more with the ordering, with the payment, with the way that we accommodate those orders in restaurants. So we think we have a lot of room to do a better job with all that. In terms of where it can go, we don't know. We just know others when they're in high single-digits, low double-digits, that gives us optimism that we can move that number up from the 6.6% today.

And just to add on to that, with regard to catering, keep in mind that catering currently does not have online ordering or delivery or online payment. So it's in its very early stages. So if we add those things, we expect to see catering become more popular. With regard to online orders, I can't give you one statistic with regard to the Postmates delivery service that we're using. We're seeing a 30% month-over-month growth on those orders, and we have not publicized this. So there is a tremendous amount of potential for individual orders, but it's a little bit too early for us to predict what long-term impact that will have.

At this time, we'll take a question from Joseph Buckley with Bank of America.

Can I just ask you to clarify the last discussion, so the 6.6% is the percent of online orders, but if I understand correctly, that does not include catering? Is that correct?

Joe, that does include catering. So catering is a little over 1%, so of that 6.6% catering is about 1.1% or so. But we didn't cater in the second quarter, it could increase by as much as 50%, so it could be in a 1.5% or 1.6% range or so, but the 6.6% does include catering.

And then just a question on the food costs, which you are commenting remarkably good for the quarter, given the recent run rate. Was there some unusual letup on the pressure from beef during the first quarter or was that simply dairy and avocado and some other things coming in more favorable than you expected?

Joe it was all dairy and avocados. Beef just kind of held constant. We pickup about two-thirds of the benefit from dairy, and about a-third of the benefit from avocados, and then we just had no other surprises. We've been kind of snake bit in the last several quarters just by surprising continued increase, whether it was beef or some other ingredients. And this quarter everything remain calm, and we got the benefit that we hoped we would get from avocados and dairy, so nothing else out of the ordinary.

Is there any unusual split between advertising expense for the balance of the year? I know, you said, it was down as a percent of sales in the first quarter?

Yes, Joe, I would expect Q2 and Q3 to probably be at the peak. This quarter was closer to 1%, just under 1%. Q2 and Q3 will be closer to 2%. And then a overall for the year, fourth quarter will dropdown to something maybe closer to 1%. Overall for the year, we'll probably be in the 1.6% range or so.

At this time, we'll go to Jason West with Credit Suisse.

Just one, I guess, going back on the delivery rollout. You said that's going to be delivery to individuals as well. Is that something you guys have offered? I mean, I'm guessing you can do it on like seamless and places like that, but is that sort of a new initiative and how widespread will that delivery be? Is that a nationwide opportunity?

Yes, it is relatively new -- let me put it this way. There have been a lot of people that have been delivering Chipotle through various services over the years. And we've tried to in a lot of cases shut them down, because we weren't sure whether the quality was going to be sufficient or whether they were following our rules. This is different because we've made an official deal with Postmates and they have been delivering Chipotle for a quite a while too. So we have them as our official partner, and they will be delivering Chipotle, they are delivering Chipotle in all of their markets which are -- its 64 cities and about 24 big metropolitan areas. So it is nationwide.

And I guess going back to the comp question. The underlying, I guess, trends, do you guys assume the two year is going to deteriorate for any reason, particularly looking at maybe the traffic specifically on that? And I guess, around that question, is there anything you're seeing outside of the weather and the pork issues that suggest there to be any reason for a deceleration in the underlying trend of the business?

Well, I don't know that I will look at a two-year trend. I think when you combine years you have to combine years that make up the full trend that we're seeing. And in our case, I go back to the current trend we're in. We're in a third-year of a trend that started in early 2013. If you remember our comp in 2013 was 1% and the year before that we were on a kind of deceleration as we were finishing up a three-year trend that started in 2010. And so if you go back to 2013 and you look we grew comps from 1% and 5% and 6% and 9% and we went to double-digits and now we're comparing against those strong double digits. And I think if you combine those three years together, you will see a three-year trend that for the first quarter with 2015 being the third year, the comp was about 24.8%. Now, we know that was affected by weather and pork and so it was depressed a little bit. But if you make an adjustment for weather and pork, I think for the rest of the year, you can think in terms of a three year combine sales comp and that would put you in kind of 25%, 26% range or so. And I think that's the better way to think about it. So in those terms I think that we should stay in that same kind of ballpark. And again that doesn't take into account anything we do with menu prices on beef and it doesn't take into account the replenishment of supply with the pork that Steve talked about later in the year.

At this time, we'll hear from David Tarantino with Robert W. Baird.

Just maybe a follow-up on that question, Jack. I guess, if you think about the trends on a multi-year basis and apply that logic, would you expect this year's traffic or the one year traffic number to turn negative at any point during the year? I guess, does that imply sort of a flattening out of the traffic or a turning of the traffic to negative territory?

I don't think, David, it will turn negative, but when we compare against the third quarter that's going to be our toughest comparison. And it's going to be low-single digits. So I don't think it will turn negative. I hope that we see a balance from things like creating greater awareness with the campaign that Mark talked about, and just general increase in awareness that we from time-to-time get with Chipotle. It's amazing to me that some people still have never visited Chipotle. I just met one over the weekend. I just can't believe it that somebody has never been to Chipotle. And so the third quarter will be the toughest test, but I would say right now I don't expect it to turn negative.

And then, I guess, getting back to your point there that you just made, in the past I think this is pretty similar to how you've given guidance yet in the past. Chipotle, time and time again has found a way to drive more traffic into the business through, whether it's marketing or just initiatives around food or throughput. So I guess this year, it sounds like maybe you're less optimistic about your ability to drive more traffic or maybe I'm reading it the wrong way, but what are your overall thoughts on the ability to continue driving this up and kind of hurdle over the great trends you had last year with positive momentum?

David, it's very hard to predict quarter-by-quarter. I look at this as a very substantial three-year trend where we now have 1,800 restaurants; we're now $2.5 million. In fact, that we've had a $500,000 in volume, while adding the 600 restaurants I talked about, over the last three years I think is pretty substantial. If you go back to the three years before that that was a three-year trend as well that had a start and a stop. And it was pretty clean. 2010, 2011, and 2012, during that three-year period, and you see where it started, you can see where it ended and that was about 27% or 28% or 29% increase. And so we seem to have these waves. And if you go back even as we were private company, these waves where people figure out that Chipotle exist, they will like it, that they come back more often. And so we have this kind of surge and then we have a leveling off, then a surge and a leveling off, very tough to predict. Will we have another surge? When will we have it? What will the magnitude of that surge be? But we continue to believe that there's a great appreciation and a growing appreciation for what we do at Chipotle. We do think millennials in particular are very appreciative of what we do. We think this campaign that's designed to reinforce the idea that not only do we source sustainable raised ingredients, but we do really cooking with real whole ingredients. And we largely don't use things like preservatives and stabilizers and things like that. So we believe that that is not something that is short-lived, that's over. We think that we'll probably benefit from that, but in terms of then breaking that down into exactly what that's going to do for next two or three quarters, it's tougher to predict and the comparisons are tough, but over the longer term, we're optimistic about where we can go from here.

And then we'll take a question from John Glass with Morgan Stanley.

Jack, just first on the food cost outlook for the full year, just to be clear, is the $33.9 million -- I know there's lots of pushes and pulls, but is that a good number? Doesn't that also include the write-off of the pork, so was that even better or is that a loss on this asset or something?

Well, the write-off of the pork is offset by re-class. And so I would look at those as largely a loss. So I would think of it, John, as we're going to see pressure in the next two quarters from avocados, and so I think they will be in that pressure. Hopefully that pressure will be relieved in the fourth quarter. So I would say generally, we will probably be up a little bit from this first quarter, but hopefully not too significant.

So still below, say, the 35% that you're running at the end of last year, is that a fair way to think about -- ?

We expect to see below the 35%, yes.

And then are your restaurant set up now that take mobile payments? Do you have to invest more in the POS systems or different POS systems? How do you envision this new mobile payment system working with your existing systems?

The restaurants currently are not set up to accept mobile pay, although with Apple Pay, in particular, the investment on the hardware side is relatively minimal. So that's not a significant barrier. The main challenge there is making the POS software compliant with Apple Pay. So we're working on that. And that's the type of payment that's of most interest to us, so people being able to pay at the POS with their phone. We're also of course pursuing putting Apply Pay in our mobile app as well as Google Wallet in our Android app. But the priority is going to be mobile payment at the POS. But it's not as if the POS hardware has to change, there's just an additional piece of equipment.

And do you envision that being available this year?

That's our hope to have that implemented by the end of the year.

And this time we'll move to Andrew Charles with Cowen and Company.

Monty, with the combined power of increased field leadership oversight in diagnostic tool, do you see the 21 transaction gain sustainable for the remainder of 2015?

Do I see the, what transactions?

The 21 transactions you gained from the throughput initiatives. Do you see that's sustainable with the tools you're putting in place?

Yes, in fact, I would like to see us actually improve on that over the next two quarters. That's a nice result especially during the first quarter, which from a transaction standpoint is one of our slowest two quarters. And over the second and third quarter we usually see a significant pick up in our business seasonally. And it's during those seasons that we really make sure to emphasize with all of our teams, the importance of having those four pillars in place. And in fact, at this time we've just started a national sort of throughput contest just to sort of make it top of mind with our restaurant teams, have some fun with it and bring awareness to those who are doing the best job just like we did with the reporting at nationwide from team director to team director, but this way we're actually having a little bit of a contest for bragging, right. And we'll see if we can keep pushing the needle, but I think it's going to get stronger over the next two quarters in terms of throughput. Now, of course, our ability to put through more people depends on having more people come to our doors as well. So throughput will not in and of itself drive transactions, it's just that when you have transactions come in, if you don't have the throughput, you are stifling your ability to allow those additional transactions to come in the door. But yes, we're excited about hopefully continuing to improve on our execution of the four pillars and our execution of throughput.

And Mark, with the new digital initiatives what can we expect from one-to-one marketing efforts? And how can Chipotle build efforts to strengthen this form of marketing?

I missed out the second part of the question.

Yes, sure, just kind of curious about how Chipotle can build efforts to strengthen the one-to-one marketing?

Well, I mean, we've been doing that actually for a couple of years. We've significantly improved our one-to-one marketing through mobile. What we're doing now is doing more marketing campaigns that enable people to participate by opting in either through email or via text. As I mentioned in my comments earlier, we just relaunched chipotle.com yesterday, which makes it mobile-friendly, much easier for people to opt into our emails and follow us on our social media accounts. We're also, as Jeff mentioned, I think on the last earnings call, doing a large data project at Chipotle, which will give us even more capability in terms of reaching out to these folks, but we have seen a shift in our marketing toward more one-to-one marketing in terms of what we're spending anyway. So I think we're already underway in that regard.

But it seems like the digital initiative will give you more firepower behind that.

Well, anything that we do that's digital has the potential for people to share it them by themselves, so it adds a viral element. And at Chipolata, we're very judicious with our offers. And when we combine our mobile initiative with an offer of some kind, we see a tremendous amount of viral pickup of that. And so, yes, these digital initiatives have given us more leverage for our dollars than traditional advertising do or does. We use them always in conjunction with one another, but you're right digital gives us more leverage because of the potential for it to be shared.

At this time, we'll take a question from Sharon Zackfia with William Blair.

I had a question about the supply chain and obviously with carnitas, it's had a little bit about a bump more recently. But given the size of the company and the growth path, can you talk about maybe the potential or the partner with larger entities to ensure the supply chain going forward? It just seems like you'll be a very attractive partner and maybe you already are doing that, and it's just not obvious to us on the outside is try to ensure the consistency of the supply.

Well, our suppliers are some of the larger suppliers in the country. Our suppliers are also very small independent family farms that are sometimes part of larger cooperatives. But we buy from some of the very, very bigger suppliers. With the bigger suppliers we've encouraged them to adopt our protocols, and some of them have, and some have chose not to do so. But we know in order to continue to ensure a supply of our top quality ingredients that are more sustainably raised, we're going to have to use all different sizes of farmers and ranches out there, and we have been doing that for years.

At this time, we'll take from David Palmer with RBC.

A quick follow-up and then another question. With regard to pricing, Jack, you mentioned that you think the traffic will remain positive. If traffic were approaching negative territory, does that change your resolve to raise pricing or do you think of this independent of what your traffic is doing?

Well, trends don't change. We're likely going to increase prices, if something happened in the economy or something happen with our trends, we might differ it. I mentioned that we'd probably get it done by the end of the third quarter. So if we saw something unusual happen, we might differ it, just so that we don't exasperate the challenge. But if the trends stay as they are, we're underpriced on steak right now. We're just not charging to going to rate. We actually lose money anytime somebody comes in thinking about getting chicken and instead gets steak for example. So we'd like to fix that. But if we decided, if there were some trends that we were little concerned about, we might decide to fix that a quarter or two later. But right now, unless things change, I think we're going to get this done by the third quarter.

And then just a follow-up to your previous comments about the cycle, this three year ebb and flow that you seem to see. Looking back at the last slowdown, we came to see or at least we did, that there was perhaps some throughput constraints and then the throughput focus, and also that the marketing efforts that were breakthrough perhaps made a better case for this acceleration than you might have had otherwise. You're talking about a new campaign, but is there a little bit of an introspection, where you're seeing perhaps that whole campaign has perhaps lost its energy, and that's going to be a big part of your hope going forward. And then you're talking about this competition with throughput, is there a sense that perhaps some of the throughput metrics are perhaps not improving the way that they were?

I think the throughput is improving very nicely, and we're really proud of what our teams are doing. Like I said, we think we can continue to go faster as the pressure of a busy second and third quarter comes to us. Over the last couple of years, even three years now sort of in a row, we've consistently set a new high watermark on throughput during our second and third quarters particularly each year. So we're getting faster and faster, and we think that we're not sort of close to being at the point where we can't get faster. That is to say, there is a long sort of a lot of runway on our ability to get faster. But I just want to sort of caution on the throughput thing, that you know throughput is something that's very important, when a lot of people come through our doors. It's always important, because it's part of good customer service. And it's always important, because when our throughput is fast, our food taste better, because our burritos are rolled and assembled and served to customers, while they're still hot. But throughput doesn't happen in a vacuum. When we have more pressure on our teams, longer lines, more customers, then it is a time when you're going to see our throughput numbers get better. That being said, throughput doesn't -- if we don't have people come through our doors, there is opportunities on throughput in some stores. If we're not going fast enough, we're not going to see as much of an ability to ramp up throughput. So great throughput over time will cause, I think, more customers to enjoy Chipotle, because they're going to trust that we can get them to more quickly, and that is more of a convenient experience. But great throughput doesn't sort of -- it will not add any comp in a vacuum during any given quarter. You have to have the transactions coming through your door.

And with regard to your question regarding marketing, we have had a series of successful advertising campaigns, but I wouldn't look at it as if those campaigns or for example, I wouldn't look at it in a way to suggest that this current campaign can't achieve those same goals. If you look at what we're doing now -- in the past we've touted what we call our hero ingredients. We talked a lot about naturally raised or responsibly raised meats, local produce, pasteurized dairy, that kind of thing. But there are a number of other competitors who are trying to say similar things. The approach we're taking now is to expand that platform to include essentially what's not in our food. These 800 or so chemical additives, which are used to make processed food that is sold at most fast food, and the fact that Chipotle only have 65 ingredients in our entire, or 67 ingredients in our entire company, is really remarkable. So the new campaign is designed to prove that to people to show that to them in a very interesting compelling way. That will further differentiate Chipotle in a way that frankly the competitors can't mimic. I mean, you keep can't take all of this junk out of these other processed menu items in other fast food companies. They just can't do it. While they can mimic some of our past marketing, I think it would be very difficult for them to do this. So I expect this new approach to have potentially even greater impact than the ones previously.

At this time, we'll move to Sara Senatore with Bernstein.

I just have a couple of follow-up questions if I may. I guess, one is, I doesn't believe with the comp issue, but Jack, I guess the two-year trend actually or the three-year trend you're talking about, I don't know if you're adjusting for kind of the 1Q calendar shift in 2013, but the implication would be in fact negative. The process is certainly traffic. So I guess I'm just trying to reconcile some of the commentary. And the other piece I had about marketing is, so I think in the first half of last year, you had a pretty big increase in marketing dollars and it seems to have helped, along with your good initiatives that saw the lines really shorten through 2013. Is that something that you think about in terms of marketing spend is down between brand building and traffic driving?

Sara, I'll take the comp issues first. When I look at the first quarter, you're right that in 2013, there was we lost a day. So that 1% comp is really like a 2% comp, so you can make that adjustment. There is also an adjustment to be made and I'm suggesting it's 100, 200 basis points in the first quarter and that's an estimate. It's our best estimate right now. And so the three year comp if you make those adjustments you're talking about something in 26%, 27% or so range. And if you do that and if you look out at the rest of the year, and listen, we do things like we adjust for trading day and things like that, I think the third quarter and the fourth quarter will be tough comparisons. I don't think the traffic will turn negative, but it will get close. So the margin for error is very, very small, but right now I wouldn't expect it to be a negative comp, but it's going to be close. So we're hoping for the best.

And with regard the marketing spend, you need to be careful when looking at when the dollars are spent. We typically do the same type of marketing each year. That is to say, we do traditional advertising, outdoor print radio that sort of thing in the spring and the fall. That's what we did last year. And we're doing it at the same time this year. We're actually spending more than ever this year. You can see lumps in the spend because of how we developed the brand building content, like the short films or the television series, you can see that impact to marketing budgets in ways that make it look as if we're spending more at that moment when we're not. So I don't think there is a meaningful correlation between the spent of marketing and what we're seeing right now. What we're doing with marketing is pretty exactly what we did last year.

And so one last thing, did I miss, did you give the mix for this quarter -- mix contribution?

Yes, it was like 6.1% was menu price. That most of the rest of the transactions, it was a small piece, Sara, that wasn't transaction, but even that was greater group size than catering, which even now they're like transactions, because you're serving more people. There wasn't anything in terms of the people buying different items on a menu that caused the check to go up, so menu price is the biggest piece, 6.1%. Most of the rest of the transaction and a small piece related to group size and catering.

It's all the time we have for questions. At this time, I'll turn things back over to Mark Alexee for closing remarks. End of Q&A

Thank you again for joining our call today. We look forward to speaking with you next quarter. Thanks.