RRGB - Earnings call 4 2023 | Red Robin Gourmet Burgers, Inc.

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Operator

Good afternoon, everyone, and welcome to the Red Robin Gourmet Burgers Inc. Fourth Quarter 2023 Earnings Call. This conference is being recorded.During management's presentation and in response to your questions, they will be making forward-looking statements about the company's business outlook and expectations. These forward-looking statements and all other statements that are not historical facts reflects management's beliefs and predictions as of today and therefore, are subject to risks and uncertainties as described in the company's SEC filing.Management will also discuss non-GAAP financial measures as part of today's conference call. These non-GAAP measures are not prepared in accordance with generally accepted accounting principles but are intended to illustrate alternative measures of the company's operating performance that may be useful. financial be the release. found non-GAAP GAAP directly the can measures in of measures most to comparable Reconciliations the earnings company G.J. I fourth its its Red Robin's the has earnings Chief to The on Executive and release Officer, call quarter over website like would XXXX ir.redrobin.com.Now President to turn at posted Hart.

G.J. Hart

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Todd Wilson

of driven restaurant and a of of quarter, In $XX and quarter, of menu was of of Thank marketing afternoon, percentage million everyone. versus of increase XXXX. were our approximately to discounting, operating elimination revenues compared approximately approximately driven revenue XX revenue quarter points quarter fourth the the increase fiscal in an of XXXX. you, $XX.X basis by and by by week fourth initiatives an revenue The fourth was total G.J., of good cost decrease the as in level the removal comparable year. XXrd fiscal was reduced million, to XX.X%, brands.Restaurant goods increase additional The million price an $XXX led other and revenue a discounting. and in X.X%, added promotions week was restaurant improvement operating The increases the deep previous partially profit our virtual additional by week of cost-saving expenses, the operating offset and restaurant

Additionally, and administrative XX-week quarter million. increase The $XX.X XXXX. a this improved Selling experienced expenses, quarter all major performance an approximately line by improve. the or versus year spending $XX.X inflation million costs strategic led expense to including reduction compared prior media in $XX.X wages million channels.Adjusted of to approximately XX-week the during the were compensation of across $X.X last commodities, fourth quarter.General and a versus is levels year the XXXX. approximately inflation due and $X.X $XX.X million, decrease million, led incentive year operating from environment cost company's social approximately third a EBITDA a rate of continues to of by on to due reduced in year was local and The million in categories, approximately $X.X prior expenses million with the approximately in versus were the quarter increase in was

XX-week For was year, full and $XX approximately the a fiscal XX-week million basis. adjusted $XX.X on million EBITDA

As EBITDA, and sheet use look in time. to debt combination balance that in are gains terms credit previously favorable over we'll our adjusted to profile discussed, to improved have taking refinance we more strengthen with our actions we with

term our in reminder, a loan As XXXX. matures

is an opportunistic effort. this So

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with final restricted cash our the revolving cash million. and balance outstanding to quarter to our million from to equivalents, ended used was credit and our under quarter line $XX the We include repay with debt.We properties $XX million, credit. million third agreement $XX.X from net available million borrowing of will transaction of expect and of principal end and At credit approximately end, $XX under of generate X million the of proceeds million XX gross outstanding $XXX.X letters capacity of the $X.X unchanged were quarter fourth cash proceeds $X.X

$XX factors increase and adjusted rent in to guidance, represents the XXrd million. and annual the to our EBITDA following million of the total low transactions expenses of growth billion, level including operating in experience to Adjusted adjusting range will XX.X%, benefit the Restaurant Plan.As end the approximately As cash now financial a an year-over-year capital rent XX% XXXX fourth to This follows: percentage move XXXX the XXXX week million, we we negative of payroll $X.XXX reminder, revenue as and to for the $XX restaurant adds through additional a a our million sale-leaseback EBITDA for our as for transactions. the $XX guest the to quarter. our compound comparable XXXX midpoint the The due color billion short-term $XX the relative XX.X% starting a of cycle of decline. inclusive XXXX on has added point we of modest $X.XX of expect to single-digit related sale-leaseback $XX XXrd revenue incur to million in to week of impact of reverts our guidance expenditures XXXX.Turning XXXX position of at when results. North and investments Star the additional is XXXX, of that profit influence

back weeks to XX-week revert as will fiscal XX XXXX. compared in to year XXXX in We a

XXXX We million incremental this to normalized reduction to inflation in including expect expense more reduction.We will first result to million, approximate transactions we reduction in third X%. compared a sale-leaseback inflation debt in this will $X of cost $X approximately operating X% we The range million with $XX and rent quarter anticipate of and in in return levels driven commodities, interest in completed in $X close and our during of million million an adjusted and entire to reduction XXXX wages tranche restaurant to as result across annualized sales by the basket, will expenses approximately expect XXXX. $X of a EBITDA

expect We and administrative unchanged and be total selling relatively as XXXX. general expenses compared to to

support As G.J. our marketing mentioned earlier, approximately this of includes selling in an to $X million efforts. increase

have had strong the quarter along impact, lap XXXX, G&A included start guidance reduction Due we an the particularly results We will offsetting this in the to XXXX. impact expect we first results first our in challenged in the of expenses.We with of of in weather of adverse the quarter year. be expect the to

in is confidence made guest the the those guest significant response Our driven in XXXX investments. we satisfaction in investments by to in and the year the balance the enhance of to improvements experience ongoing

still Our on in investments anticipated all and significant summary, continue of levers are achieve of G.J. across our made remain on make increases.In cost successful to Star savings strategy. will start we control, XXXX including we that, the targets be call expect our I are year to multiyear and to points back we've we measures North over track term.With the at building menu price to this of generally over the progress to while long Plan, turn and comeback return brand the our X We

G.J. Hart

growing Robin a business Todd. and of you, some Thank long-term takes building Red time. in The comeback sustainable journey

our increased we made execution are continued progress. measure look Robin in guests Red focus, into believe innings loyalty can connection game. of the communication, provide.With of now that the and marketing see foundational and back ahead. step our we inning, in were cost during the as ] over open launch assessment analogy completion a progress bring XXXX X-inning questions. we XXXX food savings, the demonstrating remaining a moments only we operations our to opportunity at happy change we X that Through used that, further have back and of the Operator? program of for we of as forward inning the great new We This second [ progress first craveable to to take game restaurants the I baseball fantastic our reflects

Operator

first with question Instructions] The of Jefferies. [Operator from line Slagle the Alex comes

Alexander Slagle

making year of were were doubling And the some to to to expect So an it's initially, X-year towards of about experience for path. it's on time. to this X food progression experiencing towards you be hard I important come EBITDA comments improved I I'm guess, just linear margin. going trying first XXXX, in like the think a end thinking sort mean customers the target? we year a Obviously, for start 'XX the in and that and the seems path

X-year and versus So Or to should the this reverse your dynamics suggests that would trajectory mind cuts translate well, at going been changed like on all? make see has it's for And flow-through. think a of lot going experience take gains a as we I into but like helpful. 'XX plan? a external to the, not while outlook a in traffic X-year thoughts improvements you're to be more mean plan just but that does made, you've that sort I of there's guess,

Todd Wilson

with improvements your performance out and comments. in We're one the guests. this pleased -- I'll to really the Alex, our feedback the of is of from Todd. start

those We're investments. that. the seeing feedback guests from like feel the right are So we confirm

we're track. agree. how over we line. we that. on with past, would thinking your those first we've feel satisfaction, don't in think expect talked linear And We we I part that, traffic, the guest investments.To So we're we've was part said, about -- builds know comfortable time. that know this comments marker but about of on do right We've a of We improved markers the the how hey, and the of seen really

message traffic, really his prepared that of half especially the looking in especially as with get we we're referenced into is that we've second the improvements remarks, sequential what in the Now G.J. year. but for the our investments program in the marketing resonating with loyalty ] out X, [ to the guests; getting second up X, there; really X, then get plus and of in, kicking half that made: year.

we're it. build be better QX ultimately long know to so QX on continuing looking the are line that brand X-, to where sequential better we the X-, one time really the thinking so want term. us know improvement. end we I that a X-year for a QX, don't you, journey. just put that little for at the than And of step on.And how gets that's a at X-, than QX about I'd It's and We it. we time to tell

G.J. Hart

all to would right that last Yes. I I back build Todd's the to happen. comment, And to think brand, a pieces this iconic sustainable this brand try we're just Alex, say, to to business, make doing

pretty think does the And say time. time. to XXXX, It's I longer necessarily I look But have It a in members amazing. don't overnight. happen so that some at take when of it it's I just going made would progress period our -- not team just

And in of we the referenced which baseball past. us third the the there there's much out so get -- straightened kind for while decisions I from upside point the inning second, that ourselves so game, of as is we just totally some do a of

Alexander Slagle

as you you I some or at of the metrics ] at and comps, of that, pointed a year Can which [ how point of traffic, compare things just you think the like guess you look sort bottom customer to sort I scores, performance, things some tell the mean tenure management satisfaction mean I the progress? maybe you the I and that And about and even to ago? do look quartile quartile you but key look if the at your helpful. metrics, anecdotally, That's stores, top of the

Todd Wilson

we talked quartiles and routinely. about we Yes, at that the Alex, -- we've when look

sales quartiles, when back there same-store we in year, X as was right? look at of across positive progress all same-store X posted All groups. One sales last things the quartiles

money the are well.And increase performance us, not top -- was profitability, sales that. the were it's off we case say as is surprising knew but again, we it's yes, their I'd those profitability. think And knew to The we not piece we see performers, what same-store spend top so to focus increased we that there's challenged only And that the would those knew sales the the start to improve sales progressing And us properly. many fourth but so quartile we executed increased found sales, to do quartile, pay restaurants, increased on expect. see frankly. restaurant that's investments, able saw, that only which not to this be fourth had the to our easy as fantastic sometimes in quartile, restaurants. staffed Part were to restaurants, most sales, to was We of I would able those that, financial to encouraging they but if in as because make we but know weren't that We even we but to in interesting. some encouraging so food we standards.And it not cases, our the also investments,

so what us confidence forward. gives going And that's

Alexander Slagle

would of with share? new you trial that positive? more mix with to And you is items, and a more negative have of you'd menu anything on the that, all one new why stuff, quick and apps that of turn to level And I want seasonal follow-up would or that be and thoughts check, any still thought work to maybe bit Okay. I beverages, start or color that on just little just the the impact accretive guess on, surprises and entrees sort see sort mix those

Todd Wilson

well have is lot new nice our price a new just The Alex. in still item ribs We entrees. that item the some there. a the managing really overall here, a a and we've to it's mix price The surprising appetizers, is quarters. had sold Todd seen dessert in more for the point, point. at as of watch those premium Yes. texture behavior of several more it's in at share we've And somewhat overall premium that's offsetting past -- to of good in people we've But seen offset check, shrimp as trial by trial And you happening appetizers really just a we not us there more the mix.And I'd added as consumer this factors, which so interesting items. see their reductions been

as our up with value seen more guests that's We that price doing premium-priced see And you've dynamic the us some our positions through So guests to you XXXX do tavern if of option, gravitating all some what of to of are see we competitors the brokers. more line in part value, is mix. or well, more lot really a value a is actually see there we what think promotions. gravitating

option, that, for option, as we more And well. also for like actually really want have a you you those those barbell employing the have options value strategy we so premium we've if more for been a we hey, looking options you. But if you're

XXXX. it actually positions think us going well we So really into

G.J. Hart

piece of those I'll The weren't week the second last menu until that October. items in put you just Alex, place is that, all remind of that

folks been all. a that about at So there's haven't because the frequency of yet And it hasn't been opportunity haven't in. they very you long lot the just brand, had of if think

we feeling out, positive still the we're So as position about strategy. very the and Todd hopeful brand. And pointed whole menu where barbell

Alexander Slagle

point. Good That's helpful.

Operator

The of with Todd from Benchmark question comes Brooks the Company. next line

Todd Brooks

created been some the $XX promotion we've headwind with exiting like that the in you've I'd as brands that of and a the not against. Meal you Deal off past as the to fighting First, Burger lapping virtual headwinds lead talked -- far

environment, there talked some that know can some So but scores, point we been probably the about masking when real that of from work over anything from resonating? food other traffic Robin evidence case better frequency year kind a customer Red the repeat? give improvements are it's 'XX. all of benefits internal I that the confidence fiscal examples that, sentiment you customer you you to standpoint the did bolsters point service, to to visit a of of that seeing are experience better that else discovers finally you finds the intend or that the visit and are anything you to can better Or

Todd Wilson

few Todd Todd, to things again. Yes. come there. here mind A

the pieces done pretty our One new able web our that were job of team great this. traffic more just is through of that number new marketing really increased has track And guests of about on website users. over rollout has substantially. this well. fourth of October, the in about We a the to But past coming to quarter the our heels mentioned especially the menu G.J. quarter, the

us, marketing users sign A of very our Robin. that's new has bringing Red to to so of And a been new lot channels. in encouraging back focused

of data been one customer satisfaction. we've points point, at in to terms that the the the looking tells track beyond that's on right us markers your so we're And of

G.J. Hart

Yes. would we're what And sentiment, Todd, the addition, guests what coming just the restaurants they've past. higher that is add, seeing been actually the on are into from the than in in even new scores I

encouraging that's increase visits we've cord we're So striking a pretty as that repeat well. them and the obviously seen --

Todd Brooks

Excellent.

Second that 'XX. channel highlight broader out traffic denser gets place incremental over the markets the way brand in talked local Is that a marketing. a you've course maybe really in hit people way. especially drive Is place that overlay that all, digital a on in get focus for message around question, there a maybe any of about and the and mass out there been brand work a of selling you there the more improvement at some the and swath platform the of you repositioned really $X expenses marketing, done to in knowing the million has message that store that

Todd Wilson

plan really really marketing very -- QX. very broadly. think, really word still message be that but of mass of your type think along right? of day, a to push, the on get we're well. will to Todd. the get obviously, as the in much But think going media just on off, of that that ramp in part of point, out channels levers it the core other really marketing we we much pieces X targeting much out. layers does But similar channels, thinking certain TV, We're test the and We're to times we're certain have a TV events, certain It's more kicked first approach -- stages targeted, is or it's going I to going there one Yes, will up markets of our

our and those lines great all with But measure it's there, to data performance, of about pushing get word how to the inform the half the be much know is back and then the a what you're part will go we really out going that experience. we to by come in that very the of of markets to talking in so approach to to along And what get approach year. experience X is second people

Todd Brooks

and then more queue. Okay. I And back hop have I'll Great. in one

what that's that 'XX a 'XX margin. anything level If you you there I But that that over into of I anything good. reality gotten is Street you've margins, back in kind kind to XX.X% sounded model. My restaurant layered lot have the inflect the labor at little XX%. provided, is we tips to where Is sense margin. ] the incremental? to know the went level look a put had outlook there that bit relative improvement improve of into to it for XX.X% mean, may restaurant of [ of takes of investment the north guidance inflation our we commodity and

Todd Wilson

think pieces, laid just and many them. I we the out of think mentioned big I you

out I the we So pieces. think big laid

relative the incorporated there that just and piece factor that hurdle, out information We were to the I layered think had impacted think on the seen to certainly hurdle, are impact from comparable January piece hurdles that and the big We others incremental up year. the of And start I when the year.And us, my we certainly that from great a what quarter was out February by events January is that time little year, XXXX. restaurant that's perhaps think were didn't February the the first rest But factor you of we those then rest sales the that to the biggest sense look comments that in think quite And we by is Street the that probably a in. the hurdle. industry, to the of bit was in hurdles from really last to this did saw quarter the that the impacted on top severe at or of of heaviest had we're piece second that's real so where of quite frankly, isn't the back the year. quite start weather. and XXXX, the have I numbers year. really weather X.X% QX weather you we to We've put those in biggest or others when so the reacting then the speak, we I of frankly,

Todd Brooks

so speak is quarter-to-date I talk much in want this chase you know you maybe can not for if up XX-week Todd, full have progresses? to Do still you expectation back Okay. how comparisons to that the the trying you some guys, this to, QX to -- want knowing to quarter, against you forum, easier or that for as frame either we're a don't guess

Todd Wilson

do think Yes. go It's Todd. and long fair we I I meaning off. got to right somewhat really unique think went a we quarter way as question, have, about first XX-week where it, go. through, still a we really We you that halfway And a we're have right? only We're

I think sometimes can be the and and obviously, months even quarters volatile. -- weeks

think I get basis we've So quarter.When the we QX. for a the the seen and we're February. as that to it to basically results improvement point number give through But into first January about progression we've XXX of part way seen we're ready then that don't improvement from the thinking I the you that January a look at is we February, know

a quarter. those February. gives sequential us it But that's the year driving far is -- improvement in Now was of and numbers balance sales are this confidence January us that still seeing that confidence a seeing so gives improve same-store year-over-year in still was our the them decline as lap

don't I but it's start direction. a improvement the yet that, but to So the one know to been seeing on in number it is year, that we're sequential out ready a right headwind the obviously, we're put QX,

Operator

of Wolf with from Andrew question King. CL line the comes Next

Andrew Paul Wolf

alone, the somewhat to kind below I particularly think below kind the to wasn't going in of wanted quarter. called you it well on to have be comps piggyback guidance. well not not if of cadence, -- the below on and mean, out Todd's but it trend, wouldn't I I well challenging as question

is -- is to to is second expect meaningfully single I certainly -- guess lot of the could to when X, in the half you the mean, is. low easier model I [ give I So in below in you the you guys be obviously, ] down I'm know second And reasonable at are it not put the flatten you're the if first get how easier -- start I you your I'm put it sort least first a Is half. but what that get comparisons? compares positive But not looked X-week quarter to tough quarter the want below guidance viewing out, comps turn books first it to certainly year? to is going digits.So spot. Like -- X a the yet, what in periods have the the in going to months first hit

Todd Wilson

period first what than Yes, I we've February in the January seen spot do referenced just period. better Andy, you're expect that on. the quarter far We with so our

for well each than quarter that to to the We I that that prepared side both are of things. as be for the is last. remarks on traffic That side, same-store traffic the in sales continue. marker as better looking the true going especially referenced the is

and the about through a you're thinking as right we So track us do that way, year. positive move we that gets see the

Andrew Paul Wolf

kind when your to what about, the use... marketing I'm of to to going -- to start to use hit incremental And is really going mediums you're asking marketing related

Todd Wilson

I it, -- will we it we think start mentioned March. As in

second goes the quarter it begin we As that, into and really really full stop.

Andrew Paul Wolf

you that number? think shape liquidity extra payroll from a Did mentioned a then I your cycle, And All cash. Was year-end? your meaningful improve we you an it had right. housekeeping, position

Todd Wilson

Andy, was our One why a it is is no, $XX $XX headwind actually liquidity called position, it out. million. or part of to which us million pay I for

week have But was to in headwind, of revenue point [ ], an later, the time Now quickly But our of we because X. help right? a headwind rather a ended just definitely payroll up It X a the quarter to balances year-end, week it just fiscal liquidity. a in admittedly offset drew than carrying It's extra we out. the though, typical effectively we line that. cycles

Andrew Paul Wolf

was That's asking. what I

your minus, the position plus end $XX better million, than of somewhere So or the liquidity is year.

Todd Wilson

on we what calendar. depressed net Exactly. normal speak, been, unusually [ should so it XX-week versus were Yes, it like we to a feel is have if ]

Andrew Paul Wolf

there, flow to but might other that, working either Okay. seemed repeat. must that And that hit statement, be have backing there capital cash not of in cash sort the things the we'll at in look operations into some or from

Todd Wilson

as can big that's cash. correct. Yes, the able I'd call the again, out headwind to certainly cash you're just That's talk that through But a it. flow digest that was timing on And aspect. statement we

Operator

and to the G.J. Ladies to of you. closing end would now Hart question-and-answer Thank gentlemen, for we floor like turn the over comments. session. reached have I

G.J. Hart

report. reality. thank And our it come making again, all look Well, right. next and joining All us to this back to forward you We we're today. for excited come about

care. soon. talk take We'll So you. Thank

Operator

teleconference. today's concludes This you. Thank

lines time. your at participation. for You Thank your may this disconnect you

Red Robin Gourmet Burgers (RRGB) 28 Feb 242023 Q4 Earnings call transcript