RRGB - Earnings call transcript Q3 2019 | Red Robin Gourmet Burgers, Inc.

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Operator

Good afternoon, everyone and welcome to the Red Robin Gourmet Burgers Incorporated Third Quarter 2019 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 the 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

www.redrobin.com related reconciliation its XXXX GAAP can the The earnings supplemental comparable in company release the most earnings its website posted information in measures financial to and be measures A section. the to of Relations fiscal on directly has the at found the results release. non-GAAP Investor third financial quarter

Now, I to Murphy. would like the call to Red over turn Paul Robin's CEO,

Paul Murphy

Lynn Good first for at am this and earnings question-and-answer Guy Chief be us company's us Robin Officer. alongside Officer, Schweinfurth Operations honored Chief Chief point inflection today. to the and in the with is afternoon I thank you important Muhtar, also our transformation during period. Officer; Jonathan participate Financial Red my to Constant, on join our today and to Concept our joining call here

me years, Robin work Red as past has at Red and Pattye the for capacities; Robin various then be over by more dedication XX her hard year-end. recognizing as a and Let Interim she from the board recently to will served retiring company board Pattye first member as in as Moore begin chair CEO.

are upon executive During and guest her that can tenure momentum, improving have business further. effectively team April, the metrics the as began focused on will satisfaction and which we operating Interim priorities building CEO, underscored Pattye that organization key build in and by

and aspect better our and to opportunities, our drive busy I've weeks five so current challenges XXXX now. to I immersing results. beyond to-date can for joining, understand been I've Robin business, at progress what myself in every in the Red accomplish been and prioritize evaluate of almost Since

viewpoints their passion, experiences and course of and Red a desire an members only great suggestions winning be from team the restaurants, their the to these franchise These Robin listened positive we reinforced Not with and surprisingly, partners part my and our diligence, several Red I their brand. visited came level open of this Robin mind. my have general caring have to of future due by interactions In spoken managers, their with of conviction in and impressed organization. away

work gain there lot turnaround Strategically, further important has in efforts. priority; we our dine-in far; and our as address will and shortly, the been Guy to traction transforming a it in thus of relates greater particularly done And detail continuing to strengthening as Lynn are business. most

it opportunity for review, an the refranchising shareholders business has been believe once After the the we Based company our to value concluded, capabilities the and franchising strengthened further in-depth program. support in be will creation enhance. much have greater refranchising will on operating fundamentals from suspend the the analysis,

thereby towards reassess opportunities enhance and we options take company My next all leverage the value business As and additional my to move near-term Robin's the improvement current level, objectives, Red these in experience to and its the turnaround will stakeholders. is drive role monitor for regard. and in this

Robin and to roadmap, as along robust and develop place. the the with a serve building acclimated that in fine-tune work will team strategy members already our board, our I executive deeper Therefore, and and understanding become to and transformation I the with brand, specific nuanced to initiatives more Red as more will tend plan the closely leveraging I mission. that develop support team of blocks share a our vision strategic

long profitability of loyalty reputation are and for and sales by operational improving the to iconic we the fundamental attributes run. Robin brand our is Red I guests. an growing and extension in These with tremendous can our recapture frequency our potential confident American and am enhancing excellence value brand

With the to over call Guy that operations. turn Guy? I'll review to

Guy Constant

Thank and you, everyone. Paul afternoon good

business. priority start outlined further that important our to is leaned we and stabilize dine-in with the with strengthen Paul and of key consistency measured most have of continue the emphasized into XXXX, enthusiasm. focus four Since to areas As operations had

train and retain. hire is First

a As we them the dine-in guest starts and general have training fully experience previously particularly hiring properly people, at the discussed right improving with being level. staffed; manager

real the the over continue fully class Our staffed resource quarter, leadership initiatives. at teams a we third were the short and were XXXX, at manager hundred manager are casual now human At By the turnover these numbers operations in managers and best our we end make to of levels for progress of outset across essentially the level against dining. system.

turnover management staffed to a managers we team also experience provide The progress and stable industry. the quarter the third resulting is between staffing fully they benefit throughout in the better we more and seen hourly numbers, locations improved turnover the in more as deterioration metrics with made of and in sharp our continued throughout have are apparent which reduce in again contrast, we able Now in for have XXXX teams, churn members.

business better in improvement important hourly dining our component numbers numbers. operational and once a members; of indicators have building leading moved been the in class again ended the industry third These the closer averages performance. execution causal Our engagement team key than turnover our critical and quarter of sustained to to best

which managers on the improve and end know is having reduce peak had working. host room engagement. times, presence deliver the Next is and we dining by our by establishing can of better a identify hours. declined guest floor wait focus problems This manager and during leveraging of the effectively at the of point highest to and This improve managers potential its Overall experience, dining causal at satisfaction segments nurtures has guest at XXXX, industry guests. resolve full to the better again our overall rising We last improve critical the walkaways other to front-of-house throughout of continued throughout a over years end QX our low three year level XXXX third end quarter. indicator loyalty and that the the service leading to from is our differentiates engagement of cleanliness

managing Next peak is shoulders the to to peaks.

to to our the improve the us that shoulder peak overstaffed sales on times. on hours, those busiest available labor shifting capturing allowing continue We shifts investment greater thereby throughput opportunity is hours focus understaffed from during to

focus food for cleanliness. staffing speed has continued growing strong again the area QX shifts; to of as experience we'll residual labor execution our And experience of our ratings QX, channel, benefit is a to This temperature our will off-premise great restaurant adding productivity. support key labor provide service be fast yielded of hours improvement guest bottomless dining busiest during our while that maintaining and a guest in decision well. Our a in delivering on on our focus part of promise

accurate delivering of focuses temperature. Finally, of high-quality optimal managers on at the our of the food Maestro. the promise on coordination fast This and active the effort delivery kitchen

when As faster to over were a than were they quarter out program XX improvement first seen the result, in we've times sharp seconds XXXX. early Maestro third rolled the ticket in we which in

speed, are that our addition buns signature we consistency emphasizing as are the of product of the concentrating In improving and focus our Bottomless we and course Steak chicken, products our such and of improving on to crucial Fries gourmet for our quality House; time competitive Red culinary such and of ratings menu burgers, Heart the This reducing in has as core recapturing taste of have promise historically guest of our experience Robin to complexity to focus pace of XXXX. gift all area from contributed food of set. improved differentiated is our throughout which of

provide members, and future restaurant sustainable best in to and for managers, these great drive The build frequency. team create the great loyalty turn hire them same experience that sales is then long-term and means and to dine-in business team to members a environment and consistent in deliver our keep guests, our will rebuild retain for our great will and leadership,

thankful are their recognize of and efforts for the We progress. operators our

While the business forward been staffing, to satisfaction deal we our to surprisingly, there's know turnover, and have results as trend and all leading manager look guest of progress forward. pieces are we place initial move improving of well. continued put hourly as positively the great indicators to We and are continuing not in a do work

to turn call I'll that, over the With Lynn.

Lynn Schweinfurth

and Guy, afternoon good everyone. you, Thank

lower As traffic. performance by third trends. revenue increased average QX guest check, offset quarter in while in third Overall, tavern of consecutive partially the and driven invest strategy XXXX The a sales comparable this of Finest net mix. In was business resulting we Entrées by mix discounts quarter menu our place higher in in are improving our the improved X.X%, driven and was X.X% improvement turn X.X%, pricing, promotional was put X.X% increase marking decline the by restaurant a encouraged around of our by mixed year trajectory. increase and we the and X.X% in

meal highlighting recorded Bottomless our and The Robin, at received that industry and on creative omni-channel our campaign we a importantly, consumer connection July, This featuring our among shared trend. campaign for positive a All the above Steak Fulls emotional launched highest the benchmarks our well over and impact had are signature the significant new Fries. traffic scores brand new Red

which out national our Tavern and everyday offerings menu, We also $X.XX five one promotions television. at new burgers combines we Last new all burgers. seasonal our in gourmet on highlighting, rolled with our differentiated year, promoted

which has menu our Our core now in without on gross media margin. burgers discounting mix brand promotional and entities in strategy, feature impacted and shift innovative positively highlight national

sales were of ago. million QX sales Off-premise growth. XX.X% million, and X.X% sales growth XX.X% to down meaningful company sales. revenue off-premise $X.X decreased food down partially be total year to and total representing by X%, QX $XXX.X in from rose beverage offset a continues Dine-in

representing XXX basis worse continue and by mall system now Traffic balance the locations perform previous to XX the points of restaurants approximately closed consistent company than quarters.

operating by tavern factors. year year primarily XX XX.X% a level driven costs flat were the as basis margin mix commodity higher was and a by was restaurant sales versus versus Cost down following QX benefits with offset simplification. menu ago lower associated of points XX.X% ago

contracts XX within were a sales the of labor higher staffing improve third in wage cost quarter part the now will our basis the in versus levels to to believe of points higher benefit quarter, and new ago, XX.X% year the restaurant. place. Restaurant We manager to rates costs due compared unfavorable due average favorable of in fourth primarily

Other points other due to utilities to third-party restaurant primarily costs partially decreases operating in XX expenses. and increased XX.X%, basis commission, offset by delivery

deleverage. XX to offset XX interim points decreases XXXX, to of costs total partially costs sales due General primarily of X.X% XXXX, revenue, X.X%, close offset quarter to and third costs by and partially expenses due travel. by basis services administrative net CEO basis incentive-based increased professional by lower primarily points and locations Occupancy in decreased to XX in

basis that $X.X support to July. Pre-opening in our decreased opening. suspension points the an new to increases due launched costs increase X% revenue, spend campaign of national media in of and to restaurant expenses total Selling local due XXX to primarily creative million,

million $X.X due a in primarily deferred year interest in the versus compensation was other expense. reduction period our lower well same the to as Net prior assets and larger interest ago gain expense plan as to compared a year, the

X.X%. weighted average interest was Our rate

Our due rate was effective in benefit. change effective primarily the tax current in was The year. income to lower benefit XX.X% tax the

other $X.X were retention the and included million severance of net executive costs board million, related in million favorable in transition benefits costs of During of lease gains $X.X and $X.X stockholder and executive closure benefit termination million closed $X.X by in with net we matter $X.X which restaurant, to These quarter, partially costs. our offset million recognized the associated costs. associated

adjusted was EBITDA $X.XX QX in XXXX. XXXX. QX adjusted million compared as per as $XX.X to million in of to share per QX loss $XX.X And diluted compared share $X.XX QX adjusted diluted earnings was

the members In the We and costs technology. system which that sheet. of media October, item million that even was invested facilities related in headsets terminals an and CapEx in in better experience. corporate will completed menu details QX, rollout improvements, along with balance to for orders $XX.X handheld or our POS turning team information enable new to that Now contain guest off-premise investments we printers generate deliver and labels to primarily sticky

We ended the quarter with equivalence. cash cash $XX and million in

X.XX compliance debt ratio with times were leverage we in all lease covenant. Our was and adjusted

a in letters quarter, of we our of on balance addition resulting to $X.X credit the credit $X.X debt During and in revolving of outstanding quarter outstanding $XXX million. million million drew facility

to consistent the We XX.X the approximately we our of while with to we in stated equity our is This of goal also and compensation as thousand offsetting utilize program of total bought effect primarily for our over growth. shares of reinvest debt to a business approximately the course four flow dilutive previously back return quarters, cash $X sustainable business million. reduce

of the remain updated for CapEx results We and in updated as our to estimates. related year of million. have approximately and taking expectations account million anticipate million cash range full-year $XX and year-to-date this into of guidance our EBITDA. benefit our earnings $X.X XXXX currently tax same published and SG&A tightened tax release $XX adjusted afternoon; payments sales and million we We $X full a and between

what important to XXXX, year, of fourth to prior gross continue the we with be the Consistent comparable is in negatively fourth note quarter. comparable we of significant expect traffic, will indicated as expect we restaurant year quarter throughout will into discounting It but in quarter lapping XXXX, the positively revenues we guest move we positive which impact impact margin. the fourth that

discounts points points at anticipate fourth of positively price gross the of further price we Lower in the beginning We XXX took will basis quarter the PPA. XX deliver and impact quarter. in year-over-year basis will

the with potential third in category material be XX% continues growth Catering sales growing to year-over-year long-term quarter. delivering an important

driving is catering team expanding menu recurring, refining brand. our occasions supporting, national beverage catering on sales business-to-business things, our including other accounts, Our core among and carbonated focused

third-party sales partner the We continue new as majority we to added to expect higher delivery a our recently system. service of

control We ordering continuing our platform our by guest with experience directly and and for retain costs outsourced us Robin marketplaces. delivery history, to to the associated royalty are lower highlight with leverage guests third-party orders placed Red allowing order delivery

in Turning to decision performance systems, the exit Canada company a has the due to of in support. to marketing, portfolio, financial been needs, we near-term will five an supervisory thus recently weeks. close and restaurants our in estate coming investment with chain, made standard integrated and capital One operations real area lack inefficiencies strategic footprint other restaurant the and operating Edmonton inherent closed supply corporate in already

restaurants We an with to closing experienced British XX are currently restaurant acquire the an in discussions early Columbia with XXXX. operator anticipated in remaining and by franchise

level Third and million restaurant generated quarter profit. in restaurants $X.X revenues in year-to-date, the restaurant million $XX.X Canada operating

financial for refined generate focus consistent assess estate prototype a portfolio, continue profitable our results. development real future and We implementing to work and on on growing to catalysts sales

contribution our So our let long-term restaurants thanking office foundation create shareholders. in invest team significant the Robin at the to build we by improvements in value towards business in we home the me Red wrap up for and seeing our their and are as sustainable for

over With will back to that, I turn Paul. the call

Paul Murphy

Red the sales. ongoing Thank Robin Red am you, the an is experience encouraged I team. strengthening dine-in path, exceptionally made by Lynn. growing traction; operations, right the clearly transforming on significantly by off-premise and brands possible Robin dedicated

stages And we my January. look vision take of more in the forward strategic to happy are process. I the we'd believe, with with at turnaround to any I action be early the And Conference in you sharing on ICR detailed now that, plan questions. thoughts and

Operator

from question. from first Please Our O'Cull line Instructions] Chris question your Stifel. of [Operator comes proceed with the

Chris O'Cull

or And then years. execute how afternoon may over just envision do in a unit you any or Good you're to guys. to turnaround as restaurant? couple strategy? mainly you Thanks. there's the other next questions the high the a about thinking closures of a -- secondly, closures think play thinking Paul, investments about additional level out few mean, be are you well the make going do of need turnaround lot you I

Paul Murphy

I'll two Well of answer kind ways. that in

a but know drive First, look the the top-line, investments at we investments, that years, the to there results to not be next for in be you line we'll three two more believe, will but way the then the able we they'll only regard be and in as initiatives some brand. bottom impulsive

terms just thing see have traction brand that's so investments last focused I one some starting on a handhelds the and from will made frankly servers in other the the on hands certainly investments that months; the We the which of -- lot help know You there; has lead -- service of around but execution. model that, the some execution really be we and many think do to putting will level. should that us six us runway been think help

smart but stores so brands use not the any think years I think wholesale that over down. always it. and the hurting that know, you best at look are dragging anticipate don't their a and are going closures next we'll take closures look be resources at or surely it store take or we they of what's the looking I'm two ascertaining of terms that system In portfolio; always in strategic -- the three a forward, any we'll it at have

Chris O'Cull

experience what your and you third-party your Thank Red -- Robin emphasis channel? third-party in-store third-party Robin? be view a less Is dine-in delivery a role kind is benefited then understand at just -- out of more the there's play the Red it, Robin? sales. off-premise on on been of delivery how to there quite Help it or for What's it going how to more from going has should play on emphasis and delivery bit view Red us on

Paul Murphy

that preface that Guy that. and have I and I'd over think to Well we're maintain months I to dine-in saying few his going you that had with know past this team focus on

XX%, flat that You keep and XX% against over the at erosion and performance dine-in ensure and the keep stop I is that be believe that least of the there on improving there. transaction need side and execution certainly business time still we can just that to know we advancing we

off-premise that's we're seems if Robin to look doing nice Red be guest where side, side going. there. on you the job a On the the very catering

in On it's part the to-go ordering strong the of always been business. people a coming

bit we've entered of into third-party the driver. been As a certainly a it's

make bit to when of you brand know at your as against of are that sure third-party to think is is place much I work as they're in do but always terms to a because think I looking delivering it defensive we a business with. you executing have that still do considering little we're want offensive people how

line to is other doing continue it but are now. sure work will brands make of an we along occasion than that more profitable as So is that

Chris O'Cull

guys. Thanks,

Operator

from your Our line Please next question with of Jefferies. question. comes Slagle from proceed the Alex

Alex Slagle

the question. if know, working any the know been insights want is results with sort there can deeper work I and us? company's initial or in and the of happy understanding explore guests consumer just if for that you needs with Thanks you're wondering on you there's share the recent months some and you to results more

Jonathan Muhtar

take Jonathan, yeah that I'll one. is This

with going with We there. have we've It share is out are yet we results with ongoing an but progress as engaged well in that him pleased be the and involved project for joining with to that in on the this to say we've the with start to pleased you we're really there work don't and diving deeper. now we're he's organization, and Paul gotten

on our the calls we We're With deeper be insights an loyalty that the to capabilities upgrading mine gathering guest to update our you enhanced previous mentioned to next give we're currently data call. capabilities also enhancing on and through data and as guest access able program. we'll

Paul Murphy

Alex, this is Paul.

I brand, of Red and already consumer we move help I surprised business against that I I base, on are You that know they doing, really obstacles and insights, happy maybe frankly the them the of can what are for think with XXXX. coupled that the the focus pleasantly will the business that is and the going was right done side brand; that what team with we're we're being produce the at use done like the been the as results are that's us great Robin to we things business consumer have the be the forward the among work here some the the they Robin obstacles that's insights so drive that things drive insights, with into I'm track consumer that know that. to the into to to addition focus brand able of and forward remove seeing really to Red so underway regard it enter using look really was

Alex Slagle

think could seems in elevated top the in the Thanks, expect that additional to new that's campaign driving near-term degree you on was successful like you if the spend talk the spend that's you and worth then it? helpful. marketing and it creative explore; line continuing media in if to momentum And

Jonathan Muhtar

and Jonathan, new on. of research forms last we that through from the with that. on brand Yeah, that far Yeah, love very of that were this our launch our consumer that talked won guests polled Robin response we we -- delivering the again. our Red and campaign that thus that everything we've positive quite seen is We indicates what with represented in campaign is with to seeking guests has connection the and guests pleased campaign. multiple emotional developed about really our insights establish our The know guests and was on our about as traditionally call on really the were guests

Paul Murphy

critical amazing it board, that one when not made was franchise first Robin. this I tissue we Paul add of are in Robin sole some franchisees know, is not again. by to We're thought advertising franchise are forward, only of as user. the person you you to own is a that person members Robin can thing new say, the Red that they doing are this full were to we're of a connective to calls moving generally campaign, Alex, that And advertising the I of but they Red -- them thought committee advisory that and I said the the be of hey, is the tag-teaming, was testimonial behind that know the on advertising. kind of recapturing we're but core they phone who a thought their about in people all Red glass weeks reestablishing any the couple half the highly huge who is was

Alex Slagle

you Thank Great. that. for

Operator

Please proceed America. your comes question Bank Francfort the of with next line Gregory of Our from question. of

Gregory Francfort

first think going if you a put an kind mid-four steps level? I to of for or elevated if My the just a and in maybe and the on basis, given down of other couple know you is Then back in the if that the what side on should the questions. of go-forward Thanks. on seeing question. had of range that's that stay quarter thanks you're traffic advertising question Hey, we the on response spend at kind third

Lynn Schweinfurth

now Yeah, new jump more expenses team creative you to while campaign. I'll what third so year we some we is of Right did can marketing current know start during did quarter, the in. allocate the we and our the launched the

could into that beyond. We quarter and for compared will our quarter of the XXXX can and some plan, are but campaign less in year in support the I believe sales will be this little continuation certainly continue fully profitable increases trying our a expenses bit garner of finalizing growth that there year. selling this last coming all we're expenses a we to to we so that of channels in the be process

Gregory Francfort

Red clarity give can is little bit Robin? to of are of what you terms there -- then what specific really on guess labor an rent you more the Thanks. of the That's past, just Thank -- you. terms had other think for where one effort for the at recent I renegotiations, questions two you seeing kind of was any then you few turnover I brand environment hiring a in know the and casual maybe I And like seeing chains talked dining are I'm that I And than stand Okay. better helpful. a past? was, wondering question the been and and out just about guys side, that's have the other if in it least in how seems

Guy Constant

this Hey, is Greg, Guy.

rent obviously, opportunity. every renegotiation a On as view the renegotiation lease side renewal know, rent we you

of it continue know, that us make this of had the year sales you comes And a we in to the into costs. lean closure as sites you've as earlier that some high and of we that So allowed that seen address progress the address as some able the on rent to percent to in that were along. occupancy through quarter

fully of of paid got metrics. follow-on XXXX. and that continued side we versus as terms more starting to attention we've -- team where environment on we declines a more more that's because turnover like better we our turnover, member metrics engaged on general continued made hourly become continue a the look now side, in believe better we resulting pretty continue. We've we which really our manager level the the turnover start the we're and industry would and turnover, in strong the That's to see managers we at most on since group, add expect we stability see progress benefit thought hourly which first, is In we of to staffed, and

Gregory Francfort

for Thanks it. Appreciate the perspective.

Operator

Our next question comes Glass proceed Please of question. from Morgan the your Stanley. with John of line

John Glass

Thanks.

as First, philosophically, I ran the little and hurt that past in can mix quarter now maybe you benefiting mix more think bit from just talk it bit about being and menu Tavern double, sort percentage of a this maybe it it's hot a important. the not and you're

about how think going if Guy or someone So, I thoughts Paul about you know is, don't know don't that about balance what the so talk has forward. maybe this I quarter, specifically. or

Lynn Schweinfurth

terms levels the last mix I'll below the the start of did mix at in see we quarter. through X%, what for John, some just is which We burger certainly was saw Tavern year. of

colleagues I XX% point my address. here at to some want And just think me if ask year. last let that they peaked at

Jonathan Muhtar

our to on I'll see progressing chime value Jonathan. in. question our and what we balance we're categories the across as we're across the is in This toward, menu. managing -- your ways burger have guests menu an Yeah, Tavern we on that with really we different how important But our currently. we pleased is item believe seek still

on. quarter ever highest at the continuing third here its in is Finest Our

year-over-year new of in third our had with we're increase reduction Tavern. introduction of finest the so, And and quarter, menu the we in the the sustaining pleased sales mix of our

bit little with maybe currently a reducing So, going to across mix close Tavern that pretty we see we it portfolio. burger likely our forward but more, staying have the

John Glass

way X% on I just the last and the from way want and now, inflation, it don't mid-single -- some labor, up level, in quarters. was it want moving the know, just low run dollars think I you. should you're year-on-year you I to that like fully when You digits third the the any now? to to Is said, Thank to kind It's about got the So it manager you've a year, then at, is least on And simple in here think calculation. was certainly at look you right? now best lot at it's -- think staffed near-term? you particularly fourth for going on to about down head don't again count on store, don't it we labor is running back labor said per of reduce

Guy Constant

more was fully year to side of year so what Yeah, Manager the staffed John. labor level fact ago. do level What Manager cost more at we’re on staffed next now the the the productivity the our seeing We is be flat on labor growth the wage you growth rate sort we’re wouldn't fully again, now year-over-year, same at the to we’re has see that piece. you’re and seeing with right expect would a in than that so

So, just really now wage you're talking growth rate impact. the about

Lynn Schweinfurth

which will we think directionally -- Yeah,

John Glass

is you growth hourly dropped wage I'm growth wage but now? or sorry, out, rates what

Lynn Schweinfurth

being. about our quarter, think continue time that will now wage for the X% have we of average rates Right for inflation the and so

John Glass

you. Thank Okay.

Operator

of your Stephens Our question. with proceed Instructions] of question the next line Will comes Inc. [Operator Slabaugh Please from

Will Slabaugh

I on Thank sales Yeah. had a you. momentum. question

in believe mentioned, flattish. I the around you were You last call, period, on quarter-to-date the running

numbers the so into ramp the nice quarter. And imply a

else be comparisons in that marketing campaign of you maybe we do implementation new something most the depth? haven't or whether to, as attribute discussed, the that it or What

Lynn Schweinfurth

of did campaign, today. Operating a Concept I've at obviously, creative window. Chief we and got around new our Chief did the when Officer Officer And our influence I effectiveness of the here I combination. initial efforts me see the think, least with the in sequential really analysis campaign And think it's

that in As consumer testing well we did we as implementation of the on. advance the touched

Guy up we've ongoing then, And of seen certainly execution some offered the improvements, on side. the

So experience. if they're we're increase their we frequency having certainly guests they're in back a restaurants, coming hope accordingly. And affinity into will and inviting they our great

Paul Murphy

of really Paul. things. Will, Yeah I combination it think is this is a

strong sure approach that, as Red that taken holistic ask if Of always they guys ask invite to a it's be making is guys, to experience if a you office course marketing. you really get we the in really but people Robin, -- experience. But going it's it marketing and

the Red right nice and the we strides and that execution the in campaign think to operational continuing on And our make And from point. give think creative that standpoint, Robin brand my I was promise. messaging them really I

that even experience the just resonated through was the Fulls people it's was really price, came in. Red It the to and expect. but… think And think very and exceeding the they And expectations. of that match know word And I goes that pretty that intent what about in our point it experience they beginning -- And with I that's Robin I at messaging we're people the soul the is about not the above Red don't a brand we And Robin campaign. their if become again. beyond. soon certainly nice loyal recaptured

Will Slabaugh

that benefits Or more a see type the about talk at what Thanks that around for a could, receive? made And should we on just you little that. follow-up those? of Lynn from of quick contract expect a Can if impact you expect you to I comment cost least to sales.

Lynn Schweinfurth

away against from new But able we fourth improve guidance trends the will sales. because cost of quarter of that quarter the to put to quarterly do that, like place? shy I'd to indicate and I in in the did contracts our third we've believe guess I been want

Will Slabaugh

you. Thank Okay.

Operator

with comes Haskett. Gordon Jeff of question Farmer proceed the of from your question. line Please next Your

Jeff Farmer

you. Thank

differently quarters? On sort all of things that with leveraged have? to the And, have do that in in loyalty program, you you how data membership plan do how you date XXXX, recent of

Jonathan Muhtar

is Hi, this Jeff, Jonathan.

a that across guide driven set our to the through we strategy what our insights So, loyalty gather you and business, our through program. our first of we the improve actions to share with are of that lot results, all,

it So, role our that plays has currently is It of and all initiatives. in how definitely a in role played a development. campaign

allows As us personalize we to that the their to one-to-one some out getting program, has upgrades them needs guests, behaviors, of what with really a a down the guests starting more time. fulfilling technology is at already begun our a -- and segmentation. blanketing offers blanket offers and to rather understanding with of really eventually that than -- million to we're one-on-one of communication their the enhanced get upgrade does the benefits That through just go

products our understand we So, closer lot needs, them there see really services and accordingly. guests, and their to of to to get a potential specific our tailor

Jeff Farmer

visit any then members from versus non-loyalty can And loyalty helpful. members? some there on are stats that you That's share the these of frequency

Jonathan Muhtar

been although level at traffic of are members have that loyalty program share last that guests high of challenged number incremental a significant our visited both our year I'll Yeah, and our groups has program loyalty or frequency. less drives per that versus visits not year

closer through it sustain and has enabled non-loyalty us see our and The to a both than just has comps the a bit in loyalty to are early the forward of role starting now us for so period played we increase way much as program helping tougher frequency guests -- has groups. year-over-year groups it really as for a been of our across a turnaround, both frequency we as we aim leading innings what

Jeff Farmer

question All I the through provide same-store of this missed it the release? release did you you not weeks XQ like with why four right and the XQ looks choose share first the sales last four if to last I then apologize just this, you earnings first the weeks but share did of

Lynn Schweinfurth

certainly of of we improvement with the one Yeah, we wanted in an think the shown quarter, think to trajectory. I couple continued a results third things; have trends is that I and our show

associated the last second many quarter nuances The to there year, fourth the with are is period. in point individual compared

a is growth are positive as So, is you you know expecting what of period today impression did that better quarter. to for in what affirm sharing I the the we wanted quarter we lieu sales the to current I give and current did

Jeff Farmer

you. Okay. Thank

Operator

of Raymond Our Vaccaro your from line Brian with question. next proceed James. question Please comes the of

Brian Vaccaro

Thanks and good evening.

I in circle quarter working comparisons in the spend fourth what quarter is clarify deployed to of market differences actual to terms your there wanted on versus spend are Just in advertising the dollars what's what could and just weight each of year or third expectation sort the and back believe and prior with quarter in year-on-year into you into the the book you market?

Lynn Schweinfurth

and indicate filings the media will I certainly prior more we we spend this local today, confirmed national the our in year. compared third quarter and in in What to did

project additional third some had that did costs impact our the also quarter. results We in

fourth quarter, bit we terms and in terms believe in and expenses spending of selling a less I media that investment. little overall the of are also for spend the pertains to local national

Brian Vaccaro

And off-premise delivery speak What little the in contribution within I said helpful. also of that's growth was and the you quarter. could it that in you that third-party and to mix -- moving think the Okay, over those the it I over think XX% in growth to was the the, Are last to sales, a months? the organic seeing in versus units? place that or XXX units two into XX so you was had to have XX XX last year XX delivery

Lynn Schweinfurth

Yeah.

of And third-party in So our beverage rolled incremental we've right and year out our now sale. delivery represents food we delivery have X.X% sales the initiative. second seen when

Brian Vaccaro

quarter? And could an same-store last versus one, saw non-mall mall in in what then give the update Okay. sales you on just also you performance

Lynn Schweinfurth

points me worse first continued by -- XXX they let in actually start XXX worse be sales. to sales, Yes, basis with

the been that's consistent throughout current Now year. fairly

Brian Vaccaro

you. Thank Okay.

Operator

question. Bank of with comes the of proceed Gregory Our question Francfort Please America. your next line from of

Gregory Francfort

it, how in debt what -- guys give when quick then I question, give you're negotiations I gone or rolls you overall how and Can leveraged and the thanks and of you on portion – those separate leverage third XXXX. just commodity Hey, can quarter? in business? think have in for the maturity maybe know have thinking going about missed inflation piece the yeah, how Thanks. may yourself as three maybe about in flexibility the but extending in quarter maybe leverage forward, did a thinking you had terms the the you think follow-ups. I I the to renegotiation the One, the two months, forward maturity about the leverage next And you're going but some was off just it talk about

Lynn Schweinfurth

absolutely. Yeah

current as of also starting associated Tavern positive sales menu with however, single management which we and mix inflation the commodity our are for well are low quarter, with simplification our is favorable at inflation; the the waste we impacts of seeing improving as restaurant So level. cost being seeing digit some initiative.

go terms maturity part our middle stability, correct. the date does XXXX, In of current facility mature. our yes, the credit you've In of

We debt to back facility We greater but a investments lower the have mid place lenders to think a we that to now likely really I cash put terms the company continues to speak in next year. think, right should will utilize business, begun excess. we excess only leverage to of flow leverage. in about new early lower our to our into for And not the

Gregory Francfort

Helpful. much. you very Thank

Operator

reached I any over the management to session. now have for We the turn end question-and-answer the closing will back of call remarks.

Paul Murphy

you joining today the thanks speaking Obviously look for and everybody next Have to call. us to we forward a day. in good

Lynn Schweinfurth

bye. Good

Operator

conference. today's concludes This

disconnect may at day. time. for Thank your you participation You a wonderful lines your this and have

Red Robin Gourmet Burgers (RRGB) 5 Nov 192019 Q3 Earnings call transcript