RRGB - Earnings call transcript Q3 2018 | Red Robin Gourmet Burgers, Inc.

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Operator

Good afternoon, everyone and welcome to the Red Robin Gourmet Burgers, Incorporated Third Quarter 2018 Earnings Call. Please note that today's call is being recorded.

During the course of this conference call, management may make forward-looking statements about the company's business outlook and expectations. These forward-looking statements and all other statements that are not historical facts reflect management's beliefs and predictions as of today and therefore are subject to risks and uncertainties as described in the Safe Harbor discussion found in the company's SEC filings.

During the call, the company will also discuss non-GAAP financial measures. that not are accordance alternative intended the operating are Accounting Generally measure measures company's but useful. Principles, to performance non-GAAP prepared with in Accepted of These be may illustrate an reconciliation GAAP can earnings comparable release. the most third in measures financial to be measures A the of directly the found quarter non-GAAP Investors its The posted third fiscal supplemental its company www.redrobin.com website and the at related information to quarter financial section. in the has results XXXX on earnings release

call over Denny the Red Now Robin's CEO, I'd turn like and to Post. President to

Denny Marie Post

Thank joining you, our can you James. all Good plans. afternoon and results, us share thank you our progress for in-quarter we and our today so with

his fully President to and at have past traffic we shared with of me role Constant, our Officer the tenured When with been as we Vice replacement who into Here as is last, identified closely with all field Executive is about hire Financial months and period to free you sales volume and dine-in his we drivers Red leadership is he Robin Guy I working new move Home Office Chief Chief Guy we for the the the had Officer. Operating spoke ahead. our our team few high seasonal key trends. the and gear opportunities marketing service over learning until up

out some weight to order these As media we the in to speak focus operators on I shift later, to will service opportunities, third chose of quarter.

healthy to traffic of a clip. delivery on X, businesses slide expected, at slowed. carry-out the shown as continued catering our dine-in At As sales same and time and off-premise grow

and QX sufficient quarters. still traffic We traffic. year-over-year have of overall for approaches were things two are causes outperformance the maintain the environment advertising trend. cut that X new bend dealing However, we you'll do for spending within consecutive channel competitive as this in Instead, the see understanding competition, slide marketing our those that positive shown above a to and growth control; up to ratchet we on year said, on slide basis continue and shortfalls. eight stack, was to XXX root not delivered to operations we our who points not That on in pursuit blame focused changing and X, are

place first lost service we some was delve that In race Robin. we made Red The to what Red deep on standards. to-go on Robin focus our bill our

While they with carryout, our guests times we at seek can serve must that and peak those we turn beverages. demand full us, for so take advantage for dine-in to to choose the tables Fries of growing also who Bottomless

As increased management using mentioned we learning our previously, system. new training in-store

were basics the trained greeting, three and one-stop Our on level ordering servers of bussing.

via trained and a be source burgers, and service. the customizable being off-premise destination are must gourmet we standards. dine-in of and preferred new seating to-go both To system great hosts Our on be a dine-in at

making are our training progress as We we and standards frontline with teams. revisit

table decline. a due These to weekends, before seen our have of more and greatest an away challenges being even traffic are times of have share business We we turns. slow choosing dine-in on greater which and share to walk the weekend shared we experienced of both before, seated represent longer as the guests disproportionate shifts where ticket traffic number

about In brought chose as We greater the improve team them the leaders it approaches. As is it adhering and We together with peak the to as hyper-focus demand new short, service retrain on pulled which tool. scheduled scheduling The most so continue key, on respected key XX if fully operators successful labor scheduling I which to to standards quickly labor over benefit two our of some the wasn't essential was team Denver root needed. our is Instead, some prepared ones that for the to the adherence back multi-unit add end, system referenced piloted as a earlier, led our to Peaking by we identified for is more that and traffic most standards we restaurant days management hours, our all environment. peak shortfalls. sales to DNA, to teams they labor team true a in members a and off to using lining productivity, capture then was phasing precision subsides. cross-functional to hours, cost on need how them actively meetings about our to were Watson causes we and is our to in leaders set. peaks today's to higher identify field of shift coach

encouraged is up are as measured our by Since walkways far. scheduling, what we We wait so complaints. times satisfaction seen year-over-year times, time leaders and down ticket we've on peak decreased and are refocused guest guest by

individual will restaurant. Back to results. We hyper-focused each remain QX at day-over-day, shift-over-shift, improvement on week-over-week

expected, as shifted media I of when and we traffic local sales and we As out and before slowed national quarter. weight the mentioned

to off As cost priced ability drag $X.XX Burger. goods. sales And Gourmet X our for when bottom-line firm well the is on fully of hold the of middle our momentum. Oktoberfest the message the P&L and moderated a launch slightly, we This full mix to on taking continue of of buoyed deliver television, particularly on for regain result by of we labor good bodes the news

traffic comparable the bottomless versus compelling still those tell and guests' all Double, that we unlimited the service $XX. $XX.XX development to a offerings take innovative bottomless took which roadmap. forward last just layout also it on On table ready. broccoli our even time-only to and kids they expect we any extend new market possible quarter, are three Wednesday bring in overall is two a for of our control it's when above this The YouTube on bank, kids much that a lineup that featuring great your nights. bottomless and lineups a operators in That chance envy dining Oktoberfest value well And our fast Monday selling and meal casual is we XXXX. Taco dinner a to taken sides to early than QX It on spring. QX to has are bridged has companion burgers, Gourmet We for fries over a the $X.XX prominently. $X.XX also new gourmet are other the Red's for is through with long Tavern expectations Tavern; is priced games a during modest value which the features Double without for pricing been the kind it our deal. with $X.XX us that slightly a committed limited price burgers with had is celebrating. a value and part and our parents back. day increase. $X.XX burger, to on always in chose side-by-side of Burger makes being daily beginning out put of deal fries driving of proposition. bringing our a along limited of Haystack Thursday and that new XX/XX a a summer, The locations. the for time, deal and we family shakes This also full success other which at passion very pay original for for the Tavern the most new We've choice front at we from of in bundle in more and QX salad Smokey delicious on Starting go for more enjoy. it Over last loyal time, and beverage launched hot This Jack, We week. lunch a their marketing lunch since Also worth appetizers testing nationally Based virtually advantage. The breaking mix years Ranch burger is $X.XX guys, the The Red we offers LTO Tavern the a better for new been choice tweeted Robin enjoy our with popular and story a did item the some a popular great the Robin limited offered fans and Red layout competitors. add guests loyalty to terrific fan digital a Cowboy enjoy us and comparison. service fourth QX, experience week new night to with perfect launched of to hold while to end to electronic of the or appetizer for all at offer and allows start mixing menu original X% to lunchtime tip, the the our $X.XX dining and to seven from even this with at or Robin beginning gave out beverage in quick launched

peaks and us will finest season non-alcoholic better gourmet and pretzel our will delicious The Master super added product begin our weekday Angus PPA the a a Apple of the parmesan help and Iced night, merchandising we've seasonally seasonally new a beverage, and holiday we combination news, we ensure on regain bites Harvest careful burger new chocolate the are menu absolutely peaking half-pound for higher believe white a In bundle, called focus the peppermint new kids new appropriate momentum For Cheese, only, new the demand. a shake, Tea. lunch management ready sum, garlic to

XXXX, with the the as orders. needs service QX working to to be on to closely frequency, they are spoke as ahead to price, we our of ourselves align brand speed research new in-depth off-premise or accessibility the we for several Looking have reposition call guests' we digital more well as completed value and about barriers tactics knock-down testing

to to year. first new We half of the expect approaches these life the bring in them

our me as our our edge. refreshing our have For are, will improving entirely by can of with we heartened while say long no of now, By we although commitment and all plans we to need team means, performance marketing reengaged we by pleased be, to QX, how execution, clear. not through we is and operational where that leaders and take back our want firmly regain believe get energy service all teams to and are we frontline the let members

see QX with ever it to season not we in full expect our also As over stands, meaningful trend catering is same-store QX. offerings. sales This do holiday first improvement

So accurately challenging. sales on projecting is

we family unique be great guest seated year and Robin gourmet base and combination, customizable affordable That full service decided was burgers, lower about combination this draws a prudent bottomless served is to Given multi-generational promptly. expect prices. all to it guidance. at who abundance Red

Guy to to QX. As I've the outlined that back to today details we are trust. on share hard turn earn that, working With fundamental I'll

Guy J. Constant

Thank you, everyone. Denny and afternoon good

As guest XX% by company excluding a quarter. a third I guest charges. of million to heavier million, through financial that year a in and menu X.X% mix, XX.X% discounting decreased of guest increased usage you the in highlights and for our recurring traffic. the numbers and alcoholic results driven in decline X.X% primarily of I revenues sales X.X% special Overall decline mix are $XX.X driven QX ago. to the declined total QX year check basis from considering the walk restaurant the both note average value Tavern please X% a quarter, Comparable price X.X% down Mix after decreased up a impact ago. to lower Tavern non-alcoholic. in $XXX.X beverage increased X.X% our from by on present

in year operating lower and standards costs of refocused expenses quarter XX.X%, Cost increased in X.X% factors: as in restaurant at basis impact increases basis down performance. to fees, to food Selling costs higher delivery XX.X% $X.X advance to hour versus theoretical points points and Restaurant deleverage. higher mix maintenance percent costs ago we in expense by increased revenue Tavern the increases incentive primarily XX quarter. at was that due ago X.X% sales due X.X% restaurant fry driven flat was a year versus costs, also by to administrative lower XX hourly on deleverage. compensation technology improved by third-party year million were margin basis XX% late comments points basis Other offset home and labor the by General waste fewer favorability January and due productivity as measured expense, were as Third to advertising spend ground cost by to reductions beef flat points labor level ago earlier, due and XXXX. were supplies. XXX higher Denny's equity completed a primarily a operating offset XXX versus following Occupancy actual in improvements shift the of restaurant of a repairs points largely to a utility was steak in reset basis in volume in XX.X% a consistent openings peak as in versus sales to costs XX were office and of sales our and operating fourth costs regarding with decreased Preopening the costs. by

million, points and a versus a third diluted new experienced quarter third X.X%. The earnings foreseeable a to increase during our quarter, as unit prototype QX was million XXXX. of the tax adjusted versus was $XXX,XXX quarter economics quarter. year ago. we to Net $X.XX slight to unit of we the of reorganization on the basis Adjusted Depreciation costs. we $X.X work higher interest amortization future $X.XX share $XX.X our related third new featured million, improving work per $X.X was EBITDA corporate primarily recognized charges compared and XXXX. and and our for to continue development last opening And benefit on year as the XX special expense X% begin last in were the four-wall down other in the in

$XX sheet; Now openings restaurant third invested now and CapEx is project in end XXXX we million. $X.X Capital capital up finished quarter ended and million quarter where ended the the at new balance million spending to approximate million equivalents, projects. to we year and in primarily for we year-to-date in with technology full the to we related cash the million quarter approximately back our We maintenance the with company's investment of X,XXX for credit $XX $XX.X million consistent in of times. the during capital, restaurant revolving total and debt million $XX.X $XXX cash quarter spending compensation of versus third with as the and $XX.X offsetting The over course of sits of the at our is our buying repurchase shares leverage balance the of program the we X.XX quarters. This effect amount restarted adjusted four a a initial lease on outstanding goal $XXX,XXX. ratio equity for share quarter, facility dilutive program of our

work continue our diligently to We on refranchising effort.

significant would XXX existing centered Robin take that mix potential As on markets effort, include that complete, current development a a This locations our is our reminder, and effort partner. Red XX%. approximately up franchise represents opportunity for when to

have good quality While to have we strong have nothing announce to at this continue this interest with high potential towards we received discussions time, partners and end.

In full diluted XXXX the be per adjusted in $X.XX $X.XX. guidance, we to now earnings of range to terms year of project share

the but that as that acknowledge let our your the with as to and close customary it's our and I a serve on demonstrated hasn't care our our in foundation great for know easy, for been taking Before sales team the efforts and We done moment resilience and the me guests work members of been focus operators they recovery have they take months. great put in enthusiasm. coming weeks believe the place will pieces this we with

final that, look take back we For few turn With thank for you to successes we before to forward the it will we expect questions. that, and call a seeing that your I'll comments the we Denny bring.

Denny Marie Post

Guy. Thanks,

to enough I all-in responds our see lows to turn are we the business. As to team we been and how a hit and here have waters. this long team rough on when highs tide see

accountability. losing both the resolve this putting fullest, long-term to of solutions identifying a issues By place to is turn our Red without for Robin around our to We of along come. to am the them. exercising of core confident we I meet generations Resilience track sight with in one record to and questions. competencies vision needs take of With evolve let's will that, have

Operator

we'll question with Thank from Morgan first John our you. And take today Glass Stanley.

John Glass

very Thanks much.

hi. – to decision review Denny, okay? you reduce just me hear First the you can your Can

Guy J. Constant

Yes. We can.

Denny Marie Post

We can.

John Glass

sorry it, the the advertising. the year to about to in versus know back you it Is the fourth you quarter ago or Can maybe was just I'm maybe continue what remote. it do behind that reasons planned decision didn't a quarter is review that's working Good. the come level fourth decision? made Okay. is decision reduce reduce or we or I'm intra-quarter, that reduce

Denny Marie Post

operation made It us was service clear on the it that to bit a you at was retrain issues intra-quarter. So not the known and time and decided spoke with it decks for the we focus team, John. to the was last specifically

the quarters goes relatively know traditionally You is was our better. there the it one QX as of as of volume risk know so year, lowest you

about We a and have quarter is XX% lot. total was taken which media we it spend don't of our –

XX% support take the So is I last of the couple to peak we to peaks think, around into media our really and weeks' to out coming bit did season is local and of between drive hot. that when opportunity most national total, a QX and our to back try

in have QX your we year; before, than media will had we So last weight we had more That answer question? year-over-year. than

John Glass

It did, yes.

Denny Marie Post

Okay.

John Glass

a Double about you menu. the bit talk Tavern little Can

mix talked than but mix You worse being about total last as was mean not negative your quarter. I

It experienced a didn't you made as down as that. menu you meant on modifications you meant And maybe have been so less quarter have trade what it some of last that changes, amplify changing what so of composition last by maybe So you was seems of drag that discussion just like to or that like the much quarter? there's menu? you that

Denny Marie Post

it, for and a to opportunity John. the great thanks clarify Yeah. It's question

Our mix declined the through Tavern quarter.

it weight media our end PXX, some came drag cut still to That good higher XX.X% we been management saw opportunity at the high out that informed we a pull as of QX. mix air, us a made also than that of go we for to of from some of seeing. PPA but shared off to we as have we So for we've decision been XX.X%, was traditionally mix the our

two So $X.XX. in are at currently, there Taverns Double the original only new Tavern and QX Red's the Haystack

we've three launched there years $X.XX, Jack other Taco, The Cowboy been now the the of of before. has one that and couple last which Smoky Ranch over are

some there. Out for our what top overall to Pig the managing know the of And expect from menu So a we $X.XX to quite on everywhere been for of has $X.XX kind which time. we're menu

the pricing of So out a we've pulled Tavern $X.XX. up really to on $X.XX low from

John Glass

good. Thank you. Okay

Guy J. Constant

John. you, Thank

Operator

Bank Francfort from Next we'll of America. hear with Gregory

Gregory R. Francfort

Hey, guys, have couple a I of questions.

Denny Marie Post

Hey, Greg.

Gregory R. Francfort

about talked Guy. you Denny – Hey,

You were that about the this talked improve the quarter. of partially start metrics some When quarter did sort since? those to continued to Was improving? of last and have you soft starting improvement through see that quarter metrics

Denny Marie Post

I'll turn Chief Officer our be Operating to soon to that to answer.

Guy J. Constant

in Yeah. time September around comments. and that We Denny that in referred October metrics improvement in to to right people the we in had event follow-up saw Greg. the that training, brought the then the start the did in early we start her Hey,

seen metrics and really gone those from to times, And area in to sustaining the to some of ticket by walkaways, four movement factor that And the we've been that those pleased the associated attention just on. of have started So in typically keeping we've the attention, a those it as course do. actually complaints, movement times. with increased metrics be rather guest than of skills all then embed wait as that wanted to of they've would on the themselves we

the metrics if the see. because the improve quarter also in going would encouraging. in those that seen get result we've simply Some quarter some you improvements had but that the as year-over-year lower of proof might volumes is to the reps will see that here the of we in is those, Obviously, done the which pudding you to of in we expect, we've we've improvement hope and fourth ongoing volume the into pre-work be higher third

Gregory R. Francfort

then just And maybe question. broader a picture

savings reorganization You've side. had some on G&A the

level the kind you would of flat that sort think some inflationary overall comp keep would areas. sort Is labor of cutting it in you of sort back Is EBITDA it need given You're you What higher expect pressures? to of need? you to certain What flat year? do next X%. of than

Guy J. Constant

Well, we've the absolute experienced gone as we've improvements dollars through in year.

year a this of flat G&A, had So simply seen if because have during the we've we'd as you margin this improvement year comps mentioned. we'd the done heavy in on labor that some lifting doubt productivity without year,

year, benefit there the while some see As labor that of in we saw are won't we quite productivity, same opportunities move into year. additional this for next we absolute sort hours

do comps to So I we're better bit would some to but still not order opportunities think in than margins, without address we leverage a to areas. would need little flat

need think don't mid-single-digit just I we'd say I low to we than slightly would better So comps. need flat.

Gregory R. Francfort

current And you thought there question if the not? is monetizing I and the to are I mean think restrictions Then that guess Have from last Understood. Thanks. stock price, just, XX any then maybe I And you properties. me? doing not, that's at why those? own it about

Guy J. Constant

mean, I certainly to we've No. business. looked the at improve options all the

buy do proceeds One of own estate because as kind at up you're secure And don't estate a to of generally of locations or the casual to many years. challenges lease lot older you kind you very you of sign Greg get, least the often, leaseback, the we sale is that like recent hasn't that get long under in or in the real properties going order estate you'd as to of to older that is when terms have for if real diners that. real industry any

away future XX-year property and you up in And be taking so, we're a might to limit lease. the you're that for or our exit years. the XX-year long-term old trade and would what managing flexibility the for is about severely some locations And area might those XX- a as business of move signing doing

the that keep open. we're trade-off, at make we and willing to we generate can we going least always options against now right our been that but haven't balance So proceeds to

Denny Marie Post

is team cost our how drive of as always down. those I real estate on restaurant occupancy opportunities openings very portfolio now as looking focused kind say well we're new not to to was our that at going we're and optimizing on focused

Gregory R. Francfort

Thank you. Understood.

Guy J. Constant

Greg. Thanks,

Denny Marie Post

Thank you.

Operator

we'll with Haskett. Jeff Gordon Farmer hear Next from

Jeff D. Farmer

Thanks. Great.

Guy J. Constant

back. Welcome Jeff. Hey,

Jeff D. Farmer

much. very Thanks

Your the like labor It was improved. productivity XX% looks it XQ. in

the was Maestro. lapping roughly think in XQ, I you're it X%

to So I'm think productivity see just the early XXXX? into you you through going as move curious what you're fourth level quarter of labor

Guy J. Constant

Yeah. Maestro the change the The fairly were the we Jeff in team change improvements in between evenly quarter. service productivity and made split first

expect productivity of be the that lap. affected by half impact about would to I So

Jeff D. Farmer

Okay. And question there ballpark then seems of ballpark sort or your of questions.

touched you of are but this you? that productivity wage level needed of in in some might pretty and on essentially that to productivity at get lot of rate terms You the a for What inflation, earlier, that labor material be offset other covered XXXX. companies and looking West XXXX would Coast

Guy J. Constant

We've seen, rates you in seen while saw go talked productivity this we've X%. quarter, we about up last about wage the

up still year. while rates number, have at not gone expecting they not that's we wage as an start the were up actually much as the immaterial of So and

that's the a bit So been benefit. of

a be. And get position a really can remarks, the like as flow us want good work lot done good we to where of drive so through mentioned that in in to turned puts want do to we we the to her Jeff, Denny we've sales when where we feel

negative of perhaps well-positioned we've year, has because I hard done some benefits year. masked And the space over past through of the we're work versus so do gone that we've while as the think sales that that

Jeff D. Farmer

benefit into set way role a rate. question I is positive but even this the potentially with And XXXX the a helpful. is question, up? tax this to challenging this on tax see, just final very comp That's appreciate could again answer modestly Okay. you

Guy J. Constant

in a as tax mean know, space have Jeff you I possible. business. you followed earnings that it's time think as long our with I rate moves for having this

we're possible of we've successful, next year had, wise, So, we could tax if that that digits not that we're drive always a rate if benefit. hope the be we're able would given in paying that better single the credit but be earnings it magnitude it's a and higher to our would earnings perhaps mean be a having as the to rate year even tax

Jeff D. Farmer

Okay. Thank you.

Operator

Stifel. hear O'Cull Next Chris we'll from with

Mitch Van Zelfden

on actually This afternoon, Yeah, Chris. hi. Mitch Good is guys. for

Guy J. Constant

Mitch. Hey,

Mitch Van Zelfden

you in cannibalizing traffic quarter, that dine-in channel figure is the you the Thank in at bit? also curious marketing looking the with you. addition alluded just growth driver Just channel off-premise decline that if to to, shift the think in of a

Denny Marie Post

seen that, a that haven't of still any We out trade but standpoint. evidence Mitch from it's

overall QX. dine-in more feel why we're think for been which like and focused tables turning traffic appropriately has on we most seating of our so decline the about difficulty I in that is

Mitch Van Zelfden

guys. Thanks, Great.

Denny Marie Post

Thank you.

Operator

now with from James. hear Brian Raymond We'll Vaccaro

Brian M. Vaccaro

you, Thank (XX:XX:XX).

Guy J. Constant

Brian. Hi,

Brian M. Vaccaro

Guy. Hey,

back updated is in adjusted on guidance what of your question, circling Jeff's $X.XX tax Just rate assumed EPS $X.XX? to

Guy J. Constant

For this year? we see the expect For this to year, would of balance again. benefit

Brian M. Vaccaro

For quarter the – fourth yes.

Guy J. Constant

would expect see yeah. in the fourth Yeah. We benefit quarter, a again to

Brian M. Vaccaro

the walkaways metrics to-date or what part as second quantify circling recent Denny quarter? the had on some quarter in a trending in back And on told as year last of prior are some improvement the weeks. well. And some of quarter to September the specifically? you give Any Okay. Could just color in us how looked how versus those maybe third or that us walkaways well the versus color you as – on you talked about sense

Guy J. Constant

Yeah.

be lower always you anyway. Brian, would quarter terms in to absolute expect the in third So the walkaways

year the talked was And X.X%. will lower volumes it's slightly to ago than quarter a X.X% that larger operators and or current were that. above X%. – have year-over-year in hoping that. the walkaway take big roughly we may recall what focus year. you in the year in And And of was of to in second that's be us a because with kind absolute number higher volumes process With So some reductions the on it be you year-over-year third walkaways through terms we're quarter, or obviously, early see quarter, working we are that just from in higher a would moved the the in we're fourth quarter as of even don't in times, goal on same bodes the well the our X% last quarter where in about down walkaways wait the we but because

Denny Marie Post

a – I far much the appropriately focused do tables we the got see that turn in we We team were teams those is that better that potential and quarter. hour this requires into coming think very peak are and on it that and to than position capturing

Brian M. Vaccaro

back I there And Denny, you mentioned That's project, guess the Okay. consumer completed circling on you the quarter. helpful. in research then that

Denny Marie Post

Yeah.

Brian M. Vaccaro

Obviously curious of sensitive but what the were from competitively from some away info, staying that primary research? learnings

Denny Marie Post

various my lot about it tell we prepared absorbing make on I'm it, it good have. to talk to ahead out segments really of that yet you that We're about get still want I not decisions that, yielded will insight around trying and that a I to but of don't of a and Brian. lot skis opportunities

on sharing we'll that to call. more look to as the we forward QX So get

Brian M. Vaccaro

Fair enough. last one. Okay. then And just

I discussion new initiatives, think on you share handhelds other are provide been front? on around you productivity server incremental some and there's et an just and Can can update anything productivity the some some cetera timeline initiatives. in potential maybe you some where

Guy J. Constant

do that to still XXXX initiative in half little some it some It's early yes, that, that hands while for we Brian front benefit. put technology could our a be but servers' expect to provide a productivity

type the to of We that are excited more technology service, guests. of service could provide upside that for opportunity of speed and attentiveness even about our

Brian M. Vaccaro

you. Thank right. All

Operator

Will Stephens, next our has Inc. Slabaugh with question.

Guy J. Constant

Hey, Will.

Will Slabaugh

or what think fourth that be seeing quarter more get the marketing in spend decision into then you what to about marketing may best led specifically in Yeah. if should of to that ask that through Thanks, the maybe want what in mind? percentage increase guys. in And expect you terms the midway to the course specific the push your the was quarter. fourth I quarter of of were you I and impact the guess to have some action that, we

Denny Marie Post

get as we to again means, we'll share want there. will have get about we know QX but that year-over-year that any don't I by specific weight more you and

think into an and and I issues was were traffic times to ticket we that were we these ready driving surrounding what seeing seeing the walkways capture environment wasn't it.

just make it and was be didn't way them a to to So able lever, sense in and us positive. those to on push continue for and serve meet, greet that guests that not seat

a take whole us lot and low initiatives a QX. then again focus them us gave we of break chance precious devote of are have volume take quarter don't which really it So and a teams, our the and to because a in to some those to dollars them relatively in

Will Slabaugh

$X.XX Can I quarter? it. three, Did push to mix Tavern And I was just then Thank helpful? from couple mentioned response could items the you in a talk Tavern a the you customer taking be kind general the of platform dollar if you think follow-up up And any the on you. and the point. about of quarter Got what a would the quick up, see the in that throughout price back platform. to

Denny Marie Post

the QX. the was change of So made beginning we at

about quarter. about not tell you offer. $X.XX I in off then I'm had in eight for we're X by out to XX.X% came to period can started we media, impact what So that Again in we end a yet down is prepared XX.X%. QX, the the with talk the And mix. which

that less for in it. coming there mix also people less So was meant associated with

So we mix that and to wanted learn to appropriately. that from continue manage

Will Slabaugh

Thank you.

Denny Marie Post

you. Thank

Guy J. Constant

Will. Thanks,

Operator

a question Francfort from have with We Bank America. Gregory follow-up of

Gregory R. Francfort

guys. Hey, questions. I quick housekeeping had two just

what from me tell conducted, that that total? reset you Just you in of the in can were G&A the savings annual terms office

Guy J. Constant

Could that? you I couldn't Sorry, hear it. Greg, repeat

Denny Marie Post

G&A Annual savings.

Gregory R. Francfort

annual The the savings reset? from office G&A

Guy J. Constant

to million versus neighborhood before. what $X time, assuming We a million were payout payout the off bonus were we year in what is bonus targeting roughly, to intending based target $XX was a, a Yeah. that target of save at the

million So $XX roughly savings. of $X to million

given lowered of for well as some So and our expectations year. performance, the savings incentive of we've the experienced the comp those we've balance also

roughly. So million yeah, to $X million $XX

Gregory R. Francfort

we $XX or of $XX have million And just of one going million coming year the CapEx end you've not million to past obviously you're the should have to number but last to million said opening going is, in $XX the sort going clearly one is likely – forward. $XX going kind the you've any for I stores not think about you're business? rate been to in think bit if right of little at but run What a is better.

basis? be still I'm right So the rate maintenance if think could you wondering than number an or of on that's kind ongoing if better you run that

Guy J. Constant

Yeah.

to technology maybe for real that foundational we've done a this us of, point I significant new sale will would on the technology I'd invest for expansion a expect technology well see. that we a side like a capacity us the new back that XXXX. facing our work focus of with a system, as about into leaned putting that Greg the we've done we're technology to what guests year think foundational that opportunity really more it and there's lot I in as We system, now done we'll opportunity our we've call waste work in be office, in an guest will lot lot restaurants, that be sale the point servers' cost hardware, of A server talking in XXXX on food management hands. that of new on able side. feel have lot

in new And that growth. $XX unit do close think on it range. while keeps come won't CapEx I likely so that we've million spent to the certainly what

Gregory R. Francfort

Understood. Thank you.

Guy J. Constant

Yep.

Denny Marie Post

Oh, going to Brian? we're take

Operator

Right. has Brian a James Raymond with up follow question. Vaccaro

Brian M. Vaccaro

Yeah.

one, quick I one if Just could.

you launched On provide about a mix. quarters, where a from also the the company would you the the you long-term situation of initially franchise great? you color lot about what's demand how in front last Guy I that stores go refranchising provide refranchising when an cetera optimal few any current maybe there's refranchising it in can versus given the just know think et front, could factors of over versus initiative? into transpired you're you. be Just that But terms on strategic the other Thank And perspective? on those thinking update

Guy J. Constant

Okay.

in realized a few more a ramp-up would of had tires much I kind talked quickly it of call of the that work your song, that things sort year, So over we of about so the kind place last but months choice and maybe available expect lot we three a a there's to that didn't to what the that of put initial began partner that what and then the for both we and franchise we think activity was the of pieces actively they in six lot next deal of ours refranchising the people to were thinking to market work that terms you did have territory. of and a kicking that case, in Initially, wasn't we middle wanted it months anytime more importantly.

Denny Marie Post

(XX:XX:XX). critical was That Yeah.

Guy J. Constant

a come some more type that quality recent of partners higher more those with forward. as for lot have so think we discussions possibilities result And our create us a moving

in nothing that the right we we're of the benefit we with in like of feel throes types to and partners would discussions I we're that like announce have but today. So hopeful can will reside some

focused of In locations business executing do the what terms that think we franchising of right on perhaps we're talked it's in more as going we versus for do we'll going and need go that where we future the risk looking the make option then to call at but is about. weigh now an to of us we forward, on read XXX we that always as can along,

Brian M. Vaccaro

helpful. you. That's Thank

Guy J. Constant

Brian. you, Thank

Operator

our Jon Fargo Wells with Tower has question. next

Jon Tower

Hi. Thanks.

Guy J. Constant

Jon.

Jon Tower

How are you doing? Thanks for...

Guy J. Constant

Good.

Jon Tower

quarter. even I so you discounting Tavern question. was of quarter actually the into just some of on in the back the relative more seems ramping that and fourth the taking curious your appears Double while the third particularly changes. up, ... that are many it pulling are It on peers

traffic losses the do forward, So it that traffic especially how you're and profits? in-store walk the accelerating potentially thinking going can you decision of about us given risk And versus through to why? the

Denny Marie Post

Yeah.

value. number one; viewed Tavern I always Double is everyday as an think

$X.XX that manage a us, from point price as we $X.XX point we know $X.XX reasonable always and right? very range can pricing to so relative very that can come anywhere in, count then on of said they They So price guests the starting closely, find that of to we others. than to so regards more our who and Red how the Robin Royalty and try primarily on surprise discounting, share and to members With who view us purchases delight focus give greatest reward $X.XX. were the look still their we to ones them

other with Robin drive technique the to traffic Royalty marketing direct our occasional the their in use we associate some we'll Red things or frequency program. know beyond You

restaurant it balance, saw sure a say too just but So art trade two And without that to too make really of traffic would that fine balance and getting looking we we're on down. a we're I fine time much great is a driving already actually in the that as a burgers to incented trade the Tavern from guests many down down them move our to were to regards some purely gourmet driving last having with of platform, traffic. opposed whom the of to

you, looking wants discounts, count on and So we're to discount win business. this where balance a just everyday we not is reward guest where always The our believe we know for but they this in long-term value temporary guests that we'll with best can week.

Jon Tower

on follow up the Red to numbers? Thanks. Royalty sit Where do that in members. Robin And guys terms on today of then quickly just you

Denny Marie Post

we to on to look members Where those it. we focus signing for into always at new guys? registrants total million our going time and continue that, are We're X.X guests up. team Good quarter build to fourth be

Jon Tower

Thank you.

Denny Marie Post

Thank you.

Guy J. Constant

Thank you, Jon.

Denny Marie Post

All right.

Operator

to conclude today's Denny conference session. That any now closing question-and-answer I will for additional remarks. the Post will turn over

Denny Marie Post

everyone. we're year February. to you a results Thanks, We'll business. We holiday James. everyone watching running little Talk I remaining to results to I you XXXX stepped back All apologize. right. progress full weeks Enjoy our the the our and get in with season the and let there. midterm of on our going election look get to back and sharing forward then.

Operator

you today's conclude participation. Thank will call. conference for That your

now disconnect. may You

Red Robin Gourmet Burgers (RRGB) 7 Nov 182018 Q3 Earnings call transcript