RUTH - Earnings call transcript Q2 2021 | Ruths Hospitality Group Inc

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Operator

Good morning, ladies and gentlemen. Welcome to today's Ruth's Hospitality Group Second Quarter 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode.

Following the company's formal remarks, we will conduct a question-and-answer session. Instructions will be provided at that time for you to queue up for questions.

conference being today's reminder, a call recorded. is As turn over to would now Chipman, conference to like Officer. I Kristy the Chief Financial ahead. go Please

Kristy Chipman

Thank everyone. you, good morning

our and on Chief me the today Cheryl Joining call Executive of Chairperson Henry, Officer the Board. is President,

would like of risks website would of section today of and encourage of should undue operating our future rhgi.com also forward-looking future Relations and the discussion begin, the Investor results. include that you statements These as financial press not discussion remind upon a reliance first performance and we refer the that SEC's to be earnings at them. our our to could Before are copies at for impact to will for statements. as with filings detailed I SEC part our not sec.gov We placed our well you recent release website guarantees therefore more the today's of

share. adjusted internal measure During this believe useful measure a call, per items. represents certain by that we measurement to this We of will earnings calculated excluding was This refer performance. non-GAAP

would company's can like call of a earnings I per find to in press Chief the release today's call. over Henry. You turn our to Executive Officer, the adjusted for share reconciliation now Cheryl

Cheryl Henry

you Kristy. joining you, and us thank Good for Thank morning today.

and as challenging franchise Let a put me effort begin by environment. team outperform I’m they continue in partners to of saying and how proud extraordinary and our forth ever-changing

restaurants. we to dine our back our coming during As guests to the you the second recovery know, witnessed quarter and of accelerate pace began in enthusiastically

and to the franchisees recent our capacity providing have our of Ruth's greater remained known hospitality opening is that in the with for. weeks, our With to guests teams and committed resilient restaurants

recover on achieved were report sure making despite quarter. to performance unparallel excellence in place strong of and our during with focused comp To that pleased is operational restrictions truly While X% to the we sales our I’m for they’re point, that much brand quarter. safe the I continue the reason well up second they hospitality in believe restaurants. also feel sales capacity

Excluding for the the That comps comps X impact the sales in the weeks with of Boston, and up up entire were first XX.X%. system approximately July XX%. of momentum Manhattan, period continued for Hawaii

margin Having Our I'm comp and franchise standalone the well partners franchise performed uncertain aware profitability we XX.X%. implemented strongest of pressures external continue sales delivering the inflationary thrilled since QX to said X.X% From XXXX. has X over of this that also increasing best we quarter labor in are that, years. domestic and the we also that short-term, resulted growth late efficiency environment standpoint, XXXX. from in in QX challenging. keenly in benefit the remains initiatives It's comp are the a that

are company owned future committed schedule We for New three near-term Long and team's with including Jersey by and confident, the open manage that we legendary experience, restaurants any have and that our whether ability trust our end, demand the To in the our our guests are the brand, our two accelerated we however, on New long-term will business, to investing remain impacts year-end, to in to in of sites to York. business. Island,

XXXX. agreement management in Casino recently open In Pleasant, Eagle for restaurant Mount addition, we signed in will Soaring a in the new that a Michigan

and call, the digital we we managed company openings XXXX, restaurant reiterated Looking of the technology we our additional in in XXXX last development. future. opportunities expect end to we'll continue to owned to have commitment for On or by ahead, our made seven invest and evaluate strategically platforms

frequency members, focus are and enhancing experience increasing for and the for to and stated guests both XXXX, in reducing the reminder, that team to a drive optimize our in margin. we our productivity friction our investments these our efficiency As hospitality

We have labor including and systems. implementation the new made foundational technologies, with progress the POS beginning management of quarter, during meaningful

maintaining transformation of new continue and value opening future capital over grow understanding We stakeholders means goal. this Ruth's debt healthy technology sheet will long-term. better time, our of on that for for as all smartly in options focus well will as and continue because maximize brand the we At create to year, to improve On their to calendar of through remainder investing balance driven the That all and to [technical list evaluate is Chris a data be experience. units the in the by allocating and our our top use same reduction which and shareholder seven digital difficulty] investment XXXX. value of we'll further the the guests

Finally, we through our more back future as reinstating as share gain as evaluate the dividends well we the to will continue repurchases, to year. half visibility

enterprise these has We teams us covenants, able consider are our nimble are fortunate the are grateful that Kristy and of the franchise day. we additional to team Chipman. so all, in excellence that forward. now and to going our deliver a future. were call options more and I I'm over allowed excited partners every performance we will All to members to about that we our stronger turn satisfy leverage the

Kristy Chipman

Thank you, Cheryl.

a items. tax of of in million of discrete excluding second XX, payroll a of diluted $X.XX tax income common income per It $XX,XXX $XX,XXX restaurant credit a certain tax of June employee a the on to $XXX,XXX $XX.X expenses. retention reported related second Net included approximately or reduced during diluted which income impact costs and benefit of the we also included operating or XXXX, the quarter impairment compared million loss loss $X.XX GAAP per to income XXXX. quarter For $XX.X XXXX quarter closure and share, share loss net ended net the

a in for quarter per in adjustments, six owned to XXXX. XXXX. Total sales these less X.X% share second loss for XXXX. by common in Comp million $XXX.X was quarter despite quarter Excluding comp up Average to XXXX $XXX restaurant restaurants $X.XX June. for the in X% were and sales per an in XXX.X% XXXX. up million April, million larger XXXX appetizers discounting share non-GAAP operating in up salads. common $XXX.X quarter million the check driven the entrees, fewer $XXX.X $X.XX, sales up Company increased compared menu by compared to and to of preference quarter up were the pricing, and the May, for diluted compared of in X% revenues were earnings were versus months was X.X% Compared increased for

be we XX% the second all with comp during quarter, continued and improvement While and of seen across Florida have respectively. to highlights, sales regions Texas XX%,

have Boston, levels. XXXX positive slower York With of areas. open international to recover recovery expected Manhattan in in we to returning been seeing signs and Theater quarter, slowly As to noted last are towards Hawaii, these tourism New Hawaii District sales and September

last As XXXX and to July as other sales Cheryl earlier, by million average XX, a while XXXX, sales up continues and costs beverage to of labor and compared year up has occupancy into during what us. mentioned We quarter. operating for a to the and sales were sales beef approximately and time will XXX savings second $XXX,XXX partially offset relief the $XXX,XXX as mix March, versus weekly million, our prices record the shift for partial historically $X.X pressure the other percentage alcoholic margins total XX% a restaurant from impact quarter XX%. expectations. XXXX, due food increases leverage quarter of during quarter the better XX% as through increased deliver operating September approximately We've for compared and And our produce, respectively. a pricing lower as from within XX% beverage original approximately of been and approximately quarter by Overall, beverages XXXX mid sales in cost restaurant since Franchise of average to sales overall restaurant XX% second were was what third income quarter. was Labor quarter approximately were and cost from X second beef expenses. basis sales. increased momentum which from Period seasonally provide mid XXXX high see to continued preliminary beef second deflation to costs increasing of to wine continued liquor. versus slower our comp These as the Quarter-to-date the percentage and $X.X points efficiencies Food lost and dairy $X.X of was XX.X% July check volume compared above has quarter is recently XXXX. during to was million of income well with

salaries quarter of sales, labor due pre-COVID the the basis a to against leverage of second our of and XXXX percentage revised improved to continued execution points model. compared sales As partly management labor XXX

some into as members restaurants. benefits this of add some team expect to offset back management we be We

restaurants We in to labor full to that basis the This as to versus quarter continue of in shared for revenue Marketing dining QX to year from percentage operate are a with guidance XXX revising rooms expense the the a second to points open improvement our year. an basis XXX X.X% remainder XXX guidance XXXX. XXX we was X.X% the for assumes points, compared of of XXXX.

based range data and expect XXXX million to quarter $XX million expenses and as of second compared X.X% compensation million expenses. to be full the full was our quarter in $XX G&A increased the to to digital related of accelerate. continue performance increased for to of year revenue the We marketing due year for efforts $X.X the

As compensation due million. million earlier XXX an a guidance G&A from and percentage be of incentive expected G&A resulting increase between decreased better-than-anticipated year is to basis points based This reflects results. $XX Full X.X%. year-to-date revenue, higher to to from $XX.X

throughout facility. this $XX.X Excluding of $XX.X G&A the million and million the the resulting At in balance a cash, be end million. in quarter, $XX quarter million compensation, of debt, in had impact we we the of and on credit our between incremental $XX million $XX would paid incentive

levels. quarter margins, cash approximately enthusiastically over at restaurant dining million. our and special guest to to of our recovery strong guests incredible for ensure was satisfaction outstanding beyond debt teams return trusting do members pre-pandemic deliver us to that, and to call daily balance our they the my remain and diligent our out. questions. X, turn come they And As want feel guests for I $XX to me the when to $XX to safety remained all August also with the with thanks as A restaurant. let while in focused add our million, team the maintaining health they due The was

Operator

proceed Our from Please Raymond first Vaccaro your question. with is Brian Instructions] [Operator James. question with

Brian Vaccaro

May are in week noting. have I in trends been I don't comps differences and it's the versus do are average under you high I and I guess XXX, through sort just occasions in Day seeing moving how differences us weekly June? start the morning. quarter-to-date July sales the versus reflects could behavior good you to Father's this, Thank pre-COVID. strong back out appreciate Is and it some maybe special June? seasonality in the okay. day the it out, that's of those color on I And some what Day up appreciate And that then different that possible of provide we'll if versus sales, in But back if you sense day consumer July I just context, and assume of but week, Mother's and know and you're and more update, teens. to -- the regional May would like Any the underlying on give if normal worth if May June. a quite possible think of

Cheryl Henry

Yes.

return me into the happy capacity. July, consistency seeing some first you in So, Guests the your of mentioned try we're to increase take what guests seasonality, question. our we of going there's very Brian, of with accelerated restaurants we're as obviously part our the let to

As of the end you towards even for able But more quarter the the end, second to were we know, restrictions start had and towards second most quarter, so we into still. opening of the quarter. third the

Hawaii, I you group the that the New markets will the Florida, the think So mentioned share side that versus New approximately Florida, seeing in to July, of to XXs. some starting York this, California. California, I down and regionality interesting, flip restaurants XX mentioned it's York goes and around, Hawaii, see I and I this Boston, Texas, mid of Boston, Texas think seeing the and well. up The still kind on region, the of as you're geography and some of of In market the question around

the of some been So not we've recovered about fully talking in year. markets that all

we've seeing to, but Kristy's different geography point, same far been still open as the great are We seeing is of some overall. as up see that sales travel, international and to impacting starting slowly Hawaii and deal earlier around obviously the the things some trends of a markets how recovery as

Brian Vaccaro

Okay, to if we helpful. margins, thanks. And could. gears That's shifting

inflation you said was commodity beef QX? On basket what XX%, up overall saw QX. the heard you the side, in Kristy, I think in I inflation that

Kristy Chipman

to Yes, basket. of though -- the XX% about wine beer, saw a that liquor, food benefit, that XX%. it was And saw those categories XX% in offset the and of food we in costs some some we

Brian Vaccaro

Okay.

play and QX just how heard to inflation your curious the bit a market fundamentals, hearing, environment. next, of a I commodity comments lock like, exposure it sounded in little And your obviously can quarters Okay. beef next X And you walk as over able and out? on what through it I expectations? dynamic your beef QX few think the could months but But you're to relates

Kristy Chipman

is, have say I certainty into July we And as still because Yes, more forward, uncertainty. can I there's that. we we obviously mean, share what look

you seeing, is that the starting see we same part we're is deflation. our see little some the that lag starting bit, right, that right. basket and to category publish Remember, think is to is a some which of thing research, I beef

before it top come basket restaurant takes haven't increasing X the out rest come and that to our overall of still in to prices down, see yet. kind the of as start basket, X our we then a we So through us And where quite seen is P&L. weeks

that volatility. typically XXXX up that So is direct that's combination in -- just see. to that cost I'm XXX year-over-year basis of pricing that can because What probably we XXXX now, period of XX% that bringing a I or share guidance from we're shared, lowest uncomfortable, guidance that points so seasonal providing pricing sorry, I right right is the

expect year this a be for period most if we as have peaked seasonal us. that time the continues when lowest prices So to at years, go July would

in per of than early we and XX%. And to than Originally, in at you'll XX% very we think it recall, a it started beef prices the little We that down to it's we versus come some XX% came resulted have into see and a certainty last pound started which came August recovery much as came had and our certainly signs first I in, we in have unfortunately, June When guided in pricing have to of XX%. the week-ish slower July anticipated. guidance. stronger our the June, increase would week but originally anticipated, to higher bit, has XX%

Brian Vaccaro

the That's towards can tied quarters posture in and the QX? few do from menu in how standpoint? sort very And Okay. the was rest the menu pricing great your us helpful. one, you Last a next of what's of pricing? And to you that, how out see menu remind Cheryl playing and much team,

Cheryl Henry

that looking we pricing factors quarter through and even believe into to on guests transitory? think recovery. that we're this and is at Yes, we that the or that through? more been I can the done that historically last it check. mentioned and we call they pricing willing the We've Do pricing, we that from think pandemic managing have pricing, and we're we we Brian, weighed on strategic, it's take do see the and several flow permanent their Or did start looking we take the at every much, consumer Obviously, and look May. in pretty at the

we at are so looking this. And

We will to look continue at it.

that at a we certainly see we'll as as well. this that. into point we view can into item with go to But costs, the into and of depending we -- Kristy's of are by -- beef we some look, look item think have I point moderation consideration half, what back here the on we take

And at to believe we term, feel some there's to we that. willingness there's a of an do offset if And to continue so think I to that. price they’re look opportunity we will then take longer and these

Brian Vaccaro

Okay.

in the the And sorry, it, did effective pricing currently? if missed pricing I Or take what's May? in much how menu year-on-year you

Kristy Chipman

Yes.

carryover effective that May, the prior from That that approximately QX. price a X.X% with in pricing begin is to little X%. the we X.X% now will includes last menu in -- the the took right coupled some year So over in

Brian Vaccaro

you. Thank Excellent.

Cheryl Henry

Thank you, Brian.

Operator

with proceed question Please is with from Andy Our next question. Barish Jefferies. your

Andy Barish

morning. good Hi,

Cheryl Henry

Andy Hey,

Andy Barish

give that know something? or the X- year the that you 'XX us comp? components versus of kind on of I subject, Just other maybe can crazy, the was but

Kristy Chipman

quarter? the For

Andy Barish

Yes.

In terms of entrees, and mix, to pricing. in that addition

Kristy Chipman

Yes.

we've So what the traffic Albeit was I then slightly at it May, will increases. into being through -- We we’re with for flow higher saw checks entered in low April we and XXXX in positive first and negative June. seen. that as say is positive was along X% July, that single-digit versus to we the June were quarter. traffic continued we traffic see And traffic

Andy Barish

And that know, think you are mean, recovery dispersion, that's Knapp-Track that below New your you Got don't I if Hawaii, York out that that more -- we've look it. I take and locations? at seen those if guys data. Helpful. in big you you steak the Boston geographic Is do data.

Cheryl Henry

we as do. look at Andy, it, and obviously, Yes, I well

there's some see longer, all lasted on based you that think considering about things an recovery, across and the and locked the impact I weren't didn't things of just the -- restrictions pre-COVID, footprint. down and who system when you which has was through

trying around issue So to it the relevancy being time there's break their systems think for in looking a entirety out. I at versus

and I that that mentioned regions regions are down even three July, are So XX%. three up in we XX%, see

the as of yes, just to well great is basis it geography the So, I -- base, deal think related as a right.

building AUV So that from. the what was you're

look and at and well. are back the some restricted those we these international performing or longer that's case, It's our finding we markets, generally, out out so of And back we tourism, system.

Andy Barish

margin an not lower It's on, There's discounting the much something your thought I promotion, example industry. on less brand. what's just we're the with And of of kind and call Is question implication ever brand across question, two you or just out? top going specific know and I discounting. as one anything that line just kind other today? really, well then to of I there guess entire that Great. of mentioned, seeing you'd but

Kristy Chipman

out one discounted would like people it's for The is not see. discounting, Yes. don't call We necessarily thing you the off a in just steak. bring I can traditional top

towards classic menu larger a the and have discount, seeing right as we being a refer We for to entrees. are we preference reduced that classic

of that's it. So part

say, would discounts I part other gift The be through. might card come to that could related

back a at gift $XX. we $XXX as for that like we bounce a or -- card So sell Costco

So overall …

Andy Barish

Thank it. you. Got

Kristy Chipman

Yes.

Andy Barish

Helpful. you. Thank

Cheryl Henry

Andy. Thanks,

Operator

question next Our is proceed question. your James from Inc. Please with Stephens, Rutherford with

James Rutherford

Thank of Great. been lot level the of wanted of is I'm a those new has And able thoughts you. one for into the level have recovery in to consumers customers Cheryl, tried higher start And what of didn't measure because as curious, the I habits with are on during lot trial see regular way retain a they of things new a Ruth, those to the bit have that positive to your changed the A extent that question. for for dynamics the to during guests a there just coming you pandemic. being of some your before. you are uptick restaurants? an future?

Cheryl Henry

Yes, great question.

we can into time users. track we And area the so I think to that guests a opt -- of in can first discussion it can restaurant, the so

increase, the is in where users on-premise, time program. Anywhere the for seen helpful think Ruth's that's most actually we've So I first our

ensuring those touch that and lifetime relationship we affluent younger, one staying that ultimate guests digital with the a usage. the experience take translate time our a are is about trying see them. Ruth's our to in I the able first them, guests, and point, ensure mentioned goal who and to data that of are a more is building as to program. for investment initiatives that to with things our we are So delivery takeout And and first your and making time we're understand one to we through it to of And we're started guest

the foundation the to piece idea I the of knowing guest So of piece drive in that's frequency. our mentioned hospitality really

-- in sure capturing make guests the we're and interested intended it. are goal are we to Ruth's. making And users we it, investing is in yes, that lifetime new those So, them is of

James Rutherford

see the new you And a should we system. specific Okay, about then talk perfect. those well. you're -- of And a some P&L, that talked where mention benefits. about I POS booking management you those some there think you're I get of those had was we if new system of using think Can to seeing in previously, And the benefits? as expect

Kristy Chipman

take that start. so to Yes, I'll one

So from set, are still level we just right. implementing, a

And next until nor is don't full process scale labor this believe that benefit of -- the the to a long system So get it's both part we we'll the implemented. first POS, see this management of year.

efficiency work margin POS better help As we've streamline and for we labor obviously, it's to greater guests, system We labor our to line that, the top us from And using a than forecasting, talked we into hospitality, demand preferences keys, then, will their the through management degree from both knowing data perspective. us drive and and knowing allowing menu frequency do a will believe tie us. about data driven today.

James Rutherford

last right. Then on of sales All piece one this. the of cost is my

points more clearly. I'm a cost to pretty of et comment and I'd of The those mix headwinds? high just -- and your as X% is the benefit some that stack deleverage more You're sales? menu I and you pricing X-year with cetera. well. much commodity a versus curious offset on basis seeing July But mix appetizers, of big a basis see XXX couple positive positive salads inflation benefit you’re a years impacting can think I how ago, mix helping in heard about seeing it's commodity on assume of

Kristy Chipman

benefits apps a to offsetting -- and me, larger have entrees. excuse of the profit larger than gross seeing are [ph] we larger But salads and -- a up gross seeing the also appetizers that's in entrees we're point your higher to mean, I certainly. salads. Yes, some to margin price in shift that

James Rutherford

Thank you. Okay.

Operator

proceed from with is question. Please your Sandler. [Operator Nicole with Miller Piper Our next Instructions] question

Nicole Miller

morning. Thank you. Good

have curious, about on power the obviously terms the does opportunity -- average behavior you to it the increases these transaction is pricing spending I'm a days? was? check and perspective. menu where You compare How that pricing power of probably, price for it or consumers what brand the more, talking equity average in touched of

Kristy Chipman

Can't average my $XX almost was for check Yes, That's a $XX, writing, the so XX%, own XX -- XX%. read $XX. about quarter sorry, $X -- increase. about

Nicole Miller

And from. Okay. that about people like was I -- think they're talked coming more, you They were where eating sound right?

Kristy Chipman

certainly Yes, right. adding salads -- as apps what and They're and dessert more. to They're that well they're eating to the larger entrees purchasing. also

Cheryl Henry

think known And, this we this talked something seeing there's about and we’re is quarter occasion the missing. their been It this that feel that last pandemic. has celebratory in they've necessarily lives in Nicole, I what They've idea hasn't the been Ruth's. during people pent-up like

that they're to that's, check. ordering And additional and as coming items they're when in, said, celebrate decision Kristy making trying truly in different So build and things.

second And we're well. in continues the saw quarter continued We seeing the through as that that quarter. second so

Nicole Miller

taking basis where stand a power have pricing sure X% be I relative must they are they're the look we at on channel gauging And price. north as everything, and this, in used say, And are take I'm XX%, about from what there let's you Do how We XX% your your today? pricing any was much see call peers experientially but check operating segment well. well be thinking you absolute idea depending power -- how just on doing of plenty versus it average they're your could a not you public XX%, so in and your bunch that to that to of anywhere have brand just or even a But below system. historically, them to you of XX%.

Kristy Chipman

add she has if So can something. I'll start and then on Cheryl

what a scale pricing basis can since latest increases are at so, their now, I on pricing then seen X and seen grow, weeks did we and we as price we this shopping every or commodity regular like costs menu. comparing So you as until is on haven't our across far so we've tell route And entrees. it broad up competitors our product a against looking and

surgical where So the making think fall about what from we stay, our it competitive we see raising prices. we're our on competitive certainly particularly and our very that power If behind, don't they're and in set sure of pricing proteins. is, -- is on that being top marketplace we

So we far, seen that. have not

pricing the build, benefits from across segment. the think are so power I coming fine than dining checks more

Cheryl Henry

continue. going around and Kristy's forward. looking regular want consumer the pre-COVID, to to is the basis, know, only will than support are thing it's and But to we our opportunity competitors our how we've requires long that, I tried and -- guests point, been you menu where at and on opportunities I'll think we end of and our at have And, occasions a as add say would Nicole, frequent for I more historically lower behaving, base broad to the value on our the the price how celebratory more type

Nicole Miller

last second just me. for and then And the topic

to we able if fantastic done could the What that it to with dealing have it, do, index strongest say we're dining of think of is a have have tracking sure been, law the versus done casual been maybe that two question with. let's be not would and I then I you're data, would numbers, topic. I'm and I begin Knapp-Track and the might you you imagine low is imagine strong. the And

actually through, changes. out having that week that completely percentage or it didn't fall made the like massive just So

eliminate wondering. can or better? Is be would look average I you cohort, the that do what If like you bottom

Kristy Chipman

correct. think Yes, is hypothesis so your I

numbers run necessarily yet. the we haven't While exact

you're averages think you numbers law brings the higher of these right, and percentages in Knapp-Track. I smaller that seeing you're

looking difficulty] more [technical at some on-prem be [multiple -- a positive bit look to what's our is say thing information, at I into other just and bringing when seems overall other territory -- speakers]. the we versus where dining think our share these I off-prem is and releases off-prem competitive would smaller of little competitors

Nicole Miller

Okay.

Cheryl Henry

specifically are at and the where just geography to Nicole, are positive some how we think some and volumes of we the feel that, Andy around, of of we trying when add try different done have I are get it. to impact we to work versus looking concepts strip some average smaller the and we against to noise mentioned and performing, start of was of it in when in to the where we markets noise it, out about AUVs I

that with able and are. are where and really pleased sales we work do we confident are So our to

Kristy Chipman

Yes, the level yet we clear Box haven't a we watch, to be work I'm Knapp-Track. that is that against deep to quite we've done but just Knapp-Track, more view. with gotten sorry, Black of

Nicole Miller

just we're that something not to. that’s And great. That’s privy

those future, nonetheless, So beneficial. to it. the of much question. thank it taking degree you the some into possibly cite could very But numbers my Appreciate you can be for even

Cheryl Henry

Thank you, Nicole.

Operator

is from your proceed Todd Please C.L. with with Our question King question. Brooks & next Associates.

Todd Brooks

morning. off-premise good A where do off-premise about is as almost this the you small and you the five-fold few see the lift here. business talk increase how wrap If same-store pandemic? maintaining as June, the you in anticipate sales questions in that retention, are Hey, out settling versus accelerating that revenue we during saw up mix

Cheryl Henry

Yes, is thanks, This Cheryl. Todd.

level we the I of just our consistent retention Where opened. briefly to last we think it quarter saw mentioned have X% out, Let that seen as I have fairly the me program. say, XX%, restaurants think in fell around

we X% it between somewhere offer and time, expect our four I go think over we makes experience where the which sense, to given X% in walls. is

them to about have I numbers. we we as willing being person-to-person the to think X% -- than So especially hospitality, to the is inside larger relationship X% will the come out, through experience QX, with say, pre-COVID restaurants, much they more the it's that our want people,

for want do and I when like the some night. So channel they given a feel brand. new can have for there's experience for We best a the we've on there to they that's approach our built think people be stickiness

Our -- is that, a additional work that visit. pre-COVID an told us

see looking X% out pick to to we're up and so people holds where we COVID on been to order enhance And continue through at Ruth's. the if definitely this that platform can able we've forward. as can X% But going

the and so, be meet And happy where us. to guests we're there need they

Todd Brooks

of backed I add seeing now? off course distanced how lot you guess, then of dining opportunity time the that you're are distanced have you the is for kind competitors the Cheryl. Thanks, results not, great. I restaurant, restaurants between strong Okay, volume socially that foot tables. incremental back A the And into some or over up an about of room X kind of versus seats if set now of of how could spacing know quarter configurations. talk the and did any over much you

Kristy Chipman

then start and I'll Cheryl hop on can here.

and So, system tables started capacity. restaurant from moving reservation obviously, and XX% reopened, the quarter, fully and we That our back up was adding mid to now XXX% increase to California by XX%, into saw capacity. to

don't switch. you a time, are -- it We just flip takes

days system. on open to us of But of of the So excess XXX% would our it's some us XXX%, restaurants from get from to taking a a a little only bit and I carte. week, capacity for we're away our la of couple we all couple to that reservation just space for having are time on remember, impacts leveraging us XX% really a a private weeks still say dining

Number pre-COVID. same in of what beyond time capacity getting that of we're tables would So period. be

also And we dine are to see so private reemerge. starting

And we're so see -- positive that's signs to starting slowly, there. some while

well. is up as being time used that space over so And

Todd Brooks

for And the there dining, just holiday of now? it's where hear the is great the variant it And too situation getting with demand merging. private to be from right a sense groups? Is you're still to Delta a fluid early that’s out too

Cheryl Henry

it I is fluid. Yes, think

calls it -- has have and We changes. August. while see early see used I as think for years. to July start bookings quarter as in the seen the holidays, XX years. to to with and it see bookings fourth actually been for and I've into company are changed we We if the we behavior over and monitoring started So

fourth I this in have recently more at start the -- for we years, time But point. bookings I we said, kick-in quarter As September that in recent see frame. the seen to really

tell. so mentioned monitor of weeks point soon throughout to fluid. next little we'll time, your and have a is an bookings, So how But to and of few couple it the earlier, we next we still reacts consumer and as percentage seen as in the and a sales it uptick go to Kristy's see over months. Yes, actually

Todd Brooks

Okay, Appreciate great. it. Thanks for the questions.

Cheryl Henry

you. Thank

Operator

Please And question. our with Vaccaro Brian is proceed with question next James. your Raymond from

Brian Vaccaro

quick Thanks, just two follow-ups.

contribute? how historically markets, more the and can three us sales many importantly, maybe remind you First those of units markets performing percent company the on

Cheryl Henry

New is well units store Brian, and Yes, Hawaii in as the this Manhattan in the Cheryl. six It's as York. Boston market

Kristy Chipman

Sorry, repeat your -- Brian, you part question question? can second second the of

Brian Vaccaro

on Boston well believe those I are just Yes, and Manhattan probably are, units. as obviously, high volume a very

a So XX% owned environment. but company sales sales maybe maybe, of six so in normally, roughly units. unit we're of talking talking It's a about X% count X%, percentage normal of we're as your

Kristy Chipman

that's I about right, XX%. Yes, think

Brian Vaccaro

efficiencies that's you target in some to great. labor that more forecast maybe Okay, the efficiency the sales then increase XXX increased leverage? bps, XXX Or could your so, to driving And of you expect increase an does additional reflect color Kristy, or that that if realized And in realize? provide there? to

Kristy Chipman

Yes, our efficiency. not so we changed have

half XX%. year. think look we range probably I the I XX% We're our to of efficiency shared that at XX% at the in back as

in Although to into we some over as we put and the comp to QX the this factored will start of XXX XXX. gains that

say to guidance would see provided right than now have so of in primarily, leverage, We any because efficiency we more overall change that I continue before. sales,

Brian Vaccaro

Thank helpful. you. Very

Cheryl Henry

Thanks, Brian.

Operator

have we turn And for the session. the over remarks. closing end of now to Henry question-and-answer the Cheryl call I'll reached

Cheryl Henry

and a today forward everyone, the for joining day. speaking Have you, we Thank again you look to great with call soon.

Operator

Thank This disconnect concludes this may today's you participation. and your line conference at time. for your you

Ruths Hospitality (RUTH) 6 Aug 212021 Q2 Earnings call transcript