FRGI - Earnings call transcript Q3 2021 | Fiesta Restaurant Group, Inc.

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Operator

Good day and welcome to the Fiesta Restaurant Group Third Quarter 2021 Earnings Conference Call. Today's conference is being recorded. At this time, I'd like to turn the conference over to Mr. Raphael Gross, Managing Director at ICR. Please go ahead sir.

Raphael Gross

operator. you, Thank third the Group’s earnings was release Fiesta closed quarter today. after market issued Restaurant XXXX

If not the on the you be company’s can have website, already accessed www.frgi.com, under Investor section. it Relations it, found

strategy, substitute accordance considered to discussion be be should results future costs begin, of be and information include, results Important future or today, be performance. company differ or not plans, projected as measures is give SEC in without those GAAP regarding operations. that forward-looking call based for Actual comparable company’s the limitation, conference that the we forward-looking with statements, differ materially expressed no during for that budget, materially during information. of operations, management will can in a that non-GAAP factors from call, historical company’s various such the I’d you forward-looking statements believes can and statements will release. objectives can company useful isolation inform is Before in that the the which financial to such These outcomes Any may results of prepared GAAP results the on forecasted to correct. earnings will company statements today’s assurance be not and business prove make position and and or and reconciliation in in its certain unless evaluating cause are financial like forward-looking the such to statements implied by a could Please note in found measures expressed available discussed, the actual statements filings. company’s

And Executive Stockinger, me to I’d Patty President now, Rich. over and Experience Officer, Montgomery. like Financial Chief On the Officer, today Officer, turn to call are Dirk call the Rich with Lopez-Calleja and Chief Chief

Rich Stockinger

support. their I'll results, And first with then before to The Chief the us XXXX and and color the Veterans we Like Lopez-Calleja, update this today our special to we investors third three and with we continued Day I’d military covering other Dirk topics thank thanks up all call our you, digital call during wrap status Q&A of the service. Thank also thoughts strategic for for have will be like more overview financial on for XXXX. here session. open today. on participants Experience status and their questions. on priorities Rafe. to provide on our veterans of said, of the quarter update the business Officer Patty active

the with close announced loan proceeds to we Taco Cabana prepayment balance $XX.X a in know, August you As fully July our sale the XXth. on transaction outstanding Concurrent use we the successfully divestiture totaling plus million. of premium off Cabana Taco term sale pay a and

As a what Pollo now opportunities of are team as with October total achieving believe Xrd. growth debt on of result, Tropical million is our for the fully we focused free $XX.X significant brand. cash the And are leadership we balance

sales quarter shortages results, we with quarter. from hours pleased Regarding the third despite Tropical's other performance staffing challenges operating third quarter were the lost Pollo and throughout

Florida non-core of markets. XXXX double-digit sales stronger comps restaurant restaurant Third markets, sales a up were had to realized an second were acceleration adequate were sales accelerated in markets and Those and in XXXX, XXXX, XXXX positive improving With quarter comparable which that over XXXX. third XXXX versus restaurant approximately comparable from quarter X.X%. Comparable versus XXXX below markets very staffing. sales XX.X% versus X.X% and comparable Tampa the including versus restaurant results sales much XXXX, XXXX XXXX versus the and in quarter X.X% promising both XX.X% southwest

sales accelerating we in October. sales staffing positive restaurant continue continued achieve growth levels. XXXX to versus Our optimistic and about we as XXXX momentum comparable are increased And

we As challenge. availability industry-wide staff has an been all know,

very approached achieved September have in adequate the at proactive and a total staffing approach and level positively levels show forward-thinking third improvement action We this quarter company levels took a disciplined impacted continued and issue by staffing margins. in staffing with to and We October. that has

XXXX. is In quarter addition, and combination to labor ongoing pricing the action of improvement compared the in in third optimization margin meaningful resulting October of

hiring wage Additional also benchmarks increased first these challenging competitive follows. at rates. across benefits remain details understaffed, market on accessible, all We more more programs paid medical began assistance. attractive addition key are other affordable such increased action as family units of and resources. least that positions, are In recruiting benefit In order we rates offering select packages child above items offering emergency market to market are we incentives wage and the and markets our company as plans leave, educational conditions, in enhancing care, including to commuter and comprehensive including offering are and

maintaining price while the margins perceptions. implemented which and us X.X% enable August, to additional in targeting increase increases, late taking increases to are price quarter X% of phased approximately a We should X%. approach value in price are fourth We a recover to

labor In staff to efficiency, increase improve ongoing will accelerating we which are optimization and addition, both margins. staffing efforts availability expect we our

our on Let bit provide me and a more margin staffing plans. color improvement

only actions in for market. that staffing levels and incentives resources are referral training offering are and we up including X.X% to in promising. adequate rate which where we below sales actions in additional the versus implementing and resulting were versus in Those XXXX is that additional improvements is issues market fact up that sign-on staff Regarding XXXX Miami-Dade and enriched is pay radically recruiting in major weekends, staffing The staffing increased staffing improve currently markets levels bonuses. XX.X% comp additional

enhanced third our to and continue the we and fourth will efforts. of increases, a be that over recovered rate margins quarter we Our the resulted phased half ongoing implement in in action price trailing wage reduction approach short-term is the XXXX, increases pricing first in optimization labor which anticipate additional and as

XXXX was well XXXX that our reminder, is that two-year a As over over X% over which action price competitor of our period, estimates historic slightly pricing below time. in and increases

ongoing outside will as research confidence Our October, forecast include internal schedule refinements analytics customers. competitive efforts gives in that time sales our increases price planned still pricing consultants optimize our and which close our compressing we maintaining improving and such while to We schedule. our open hours shorter scheduling with benchmarking us intensified accuracy labor implement by perceptions price can and or increments, that conducted value attractive drive prep and the

incentives positive end sales to of points the a third on compared and have as rate, adjusting for underway, are such scheduling on short-term Based by into wage from pricing expect With that XXXX action a being as restaurant as rate fully we and those phased of margins basis October improves. efforts of improve XXXX. approximately optimization After planned labor will quarter the XXX already We over decreasing sign-on of basis remainder seen refinements. out percentage bonuses the XXXX. results staffing wages run

adjusted non-GAAP are structure EBITDA XX% first margins, the operating in a We to measure to environment. core barring changes the or range level returning targeting in half XX% financial any XXXX, our restaurant unforeseen of

percentage adjusted quarter wage Pollo Continuing XXXX quarter non-GAAP of restaurant Approximately a sales level part increases to the quarter measure EBITDA, expenses, adjusted a as profitability. costs and includes was of on to for compared update sales term $X.X measure adjusted Restaurant Tropical the the to his that rate impact level of in offset due regarding hiring adjusted related restaurant EBITDA, will repair increase and financial third restaurant financial restaurant the and details Dirk with comments. improved advertising maintenance for and offered $X.X due quarter $X.X to compared XX.X% third XXXX partially cost non-GAAP decreased incentives million by The quarter as to XXXX. of the in G&A non-GAAP Now, primarily labor to a provide margins operations a staffing overtime sales as the of margins. measure additional of a in higher of million, short XX.X% third expenses, EBITDA action. labor decreased cost XXXX costs, an third results XXXX the Restaurant to of compared higher ahead primarily prepared are in million XXXX. incentives declined sales nature. the third XXXX EBITDA level XX.X% and compared financial percentage in pricing decrease

Next, an update on our strategic priorities.

follows. speed As for technology our for and across geofencing test experience future as the I mentioned preparation concentrate on by ease strategic for platform choose. improvements in off as expansion existing growth on use ordering they whenever of curbside the continue enjoy accelerating brand premise markets. guest brand and customization, introduction and unit One, Three, of an experience, enable payment. and Tropical enabled wherever service design channels in kiosk make drive-thru and in as enhanced proposition our prior non-dine digital nine QR are in enhance in-hand well our Enhanced to priorities and in investment of digital new calls, better technology and and customers and refine to Pollo remodels, the our improving all and two, to channels including pickup

quarter of channel delivery in continue third growth, in of drive we XXXX the non-dine restaurant of XXXX. and sales the comparable versus quarter Regarding XX% third with growth to growth year-over-year

sales to quarter same-store addition, third compared In XXXX XX% XXXX. comparable online grew

enhancements. stars, from android rating out our app X.X app improved for the before for is the currently prior for app store X.X ratings Our iOS X and of much

average user In for addition, XXXX than user approximately checkout. was non-app app check of the higher quarter third the the XX%

the a investments made we initially to of our improve we levels will and customers in third starting another in We in usage With locations. drive-thru contactless geofencing completed locations with stable platform, the technology new piloting we digital which app continue to digital are platform and curbside be the select provide number customer fourth progress alternative on make XX quarter fourth to launching staffing the quarter of mobile the more experience. in QR to design and enhancements our fully staffed our pilot code good drive-thru Over quarter. enhance

to will We are digital offer that able guests state-of-the-art we platforms. our such excited very be

strategic regarding third Finally, our priority.

customer mission and from and to speed are firm. we We order redesigning Against experience continue work service, accuracy with better efficiency. improving TPA that engineering assistance labor our on the through kitchens of industrial

will We during quarter. a mock the the testing and fourth in be restaurant redesign

key restaurant advancing is completed also six an Aimed units design to platform and at enhancements. year-end. program with testing additional scope at varying operation levels eight by re-model Our

Looking forward our we next food process toward to are commodity cost in negotiations and year. for XXXX, finalizing the

that yet to the expect all food with have negotiations compared XXXX major intend to action. pricing higher completed but categories, any increases We offset in not food cost we we will additional XXXX. see We in cost

we investments Regarding taking will cash for our using future to be cash approach and uses for disciplined of investments. growth a

image XXXX. and the growth have operational efficiency. initiatives and strategic of will being spending will plans past, capital XXXX enhance our effectiveness we digital brand and on drive finalize prioritize in we platform As for QX results in of we our before completed tests that the continually But we remodels evaluate will

We cash to the intend returns program share also that for a our continue of good shareholders. improves we believe use approved as repurchasing

are reducing we appropriate have toward we G&A detested Cabana. that As working now we last to Taco mentioned quarter, levels

XXXX compensation G&A stock-based excluding Third $X.X previously includes operations of quarter Taco costs to continuing revenue, million million and $XX.X or allocated that XX.X% were was Cabana. of overhead

is finalizing sales. Our G&A comparable the over qualifying be the Pollo the during of we a peer year. Tropical is of progress believe implementation to to of sales quarter areas to goal X% and make X.X% remainder group, is of percentage potential reduce that will savings plans third as which We our

progress a initiatives. In sales and are improve optimistic rate summary, staffing digital the about levels achieve as we our continuing We XXXX on as G&A run from targeted positive are level momentum accelerate we targeting our we to basis.

As we that implement the our in quarter optimization action we seen expect pricing margins continue additional labor we've the October. and efforts, continue to fourth in refined improvement

customer to service going efforts upgraded experience ongoing across our all forward. continued our channels an will top-line expanding that expect accelerate investment We an in digital growth platform drive

Dirk Now and update will provide closing comments. the financial

Dirk Montgomery

the quarter for One third the were same our comparable I'll in to and quarter good our discontinued pleased Overall, overhead Pollo Taco start. update to the versus then of our reporting I'll The XXXX. Cabana's provide costs reviewing an Thank everyone. operations results quarter will third results you afternoon on you, by corporate third plus we be Due our financial start on performance continuing of and up XX.X%, quarter reviewing remainder sales and and on I be XXXX with note third results of today consolidated are operations Tropical. presented before excluding store statements. very compared the with focused X.X% of divestiture, XXXX. outlook Rich, as

sales same-store Our growth comparable second XXXX. com same to sales outpaced quarter compared XXXX store XXXX also versus

by in are fully encouraged momentum strong very seeing the staffed. that markets we more are are We

staffing levels, will accelerate. continue optimistic we our that to are As momentum improve sales we

impacted details Third earnings Dorian by same-store impact quarter today's XXXX in weather-related and were hurricane noted negatively sales on are release. the

improvement quarter from price and increase X.X% a check drive-thru continuing quarter increases driven comparable increase in of restaurant increase quarter by to in XXXX third million a delivery increased channel versus XX.X to operations in at and primarily third and The net of average The compared resulted pricing Pollo impact increases in transactions XXXX $XX.X sales the of the X.X% XX.X% the menu of X.X% mix and million revenues Total XXXX from in pricing. XXXX third Tropical. in restaurant comparable driven and increase mix was the product by

million include from impact discontinued diluted or per operations the on per gain share the diluted quarter Cabana. $XX.X XXXX $X.XX Taco $X.XX of income consolidated positive was and sale of primarily Third share net from

operations primarily per including quarter diluted loss per share, federal charges rent and share. negative quarter from diluted impact adjustments share tax The share, by per of and valuation XXXX the offset of This net consolidated the $X.XX the restaurant to changes impairment per $X.X closed third or the third from diluted rate $X.XX $X.XX favorable XXXX or $X.XX tax impact negative allowance, continuing million in income impact other to charges million $X.X primarily compares was income. deferred of from

$X.X operations share. $X.XX the diluted diluted an million of or for reconciliation per per operations on continuing million share, basis, net non-GAAP adjusted $X.X million was earnings Please compared in $X.XX of $X.X Continuing net income XXXX quarter from income XXXX. million EBITDA, third a our or in financial consolidated and XXXX per XXXX was more XXXX table quarter continuing of consolidated third and details. was and $X.XX And million adjusted operations $X.X revenue. Third to loss adjusted $X.X share from quarter release to or diluted see revenue of in measure the XX.X% compared X.X% net non-GAAP

Turning adjusted results. $X.X Restaurant hourly XXXX sales. due XX.X% additional basis and wage financial was offset overtime to level XXXX. XXXX increases, compared Pollo as compared level during planned for training EBITDA XX.X% declined in to a to labor percentage EBITDA staffing restaurant non-GAAP short-term incentives the level rate million in XX.X% cost measure and representing restaurant action to the in margin, of ahead to are incentives and third related points Tropical and quarter margins primarily in increases of hiring overtime of pricing nature, those costs. short-term XXX approximately XXXX a

to range we EBITDA XXXX cost labor the % margins, unforeseen operating will our planned the ongoing changes non-GAAP taking expect a environment. of XX with pricing in measure level structure optimization combined of We action half recover to the restaurant XX% and financial first by are barring

The combination percentage restaurant October seeing resulted a XXX mentioned, as sales preliminary basis and of basis results. and hiring in to already of point in of the wages on and pricing rate third in improved improve levels. action Rich basis reduction a labor we bonuses margins a As short-term a offered are for XXXX quarter on they after run October compared to temporary being adjusting staffing incentives optimization run

percentage labor of to in December, in levels. X%, impact we of optimization above and of sales margins a restaurant will as to our X% additional the months historically wages has a As XXX the those To to range holidays continue take action and points in XXX efforts. our due intend further been November reminder December pricing improve October in basis to

to maintaining low take pricing in allow comparison to in As pricing Rich additional perceptions should with XXXX our competitors customers. value which us while and attractive XXXX mentioned, our was historic our

promotions $X.X third labor overtime XXXX repair incentives in in the categories. XXXX the Regarding rates restaurant short-term driven expenses and to that costs higher offset and sales the due due offset third XXXX partially sales primarily additional sales, and part quarter packaging included Other impact increases the partially Restaurant as as the and food a lower to lease increased impact of the XXXX and restaurant channel mix sales the compared compared higher backed short-term in quarter and by to the and operating expense leadership impact decreased trends and compared labor primarily percentage expense to Cost due lease in of to of XX.X%, XX.X% costs. due sales at due to third hiring as are increased costs of by due higher higher to lower higher of Approximately and the incentives, XXXX Rent third of rates. maintenance nature. price and short-term discounts third to quarter medical operations to on of and sales. costs third overtime restaurant are overtime delivery key higher XX% by labor compared rate impact XXXX primarily sales sales wages quarter increased training offset guaranteed to of in in utilities in increases, of the cost million impact driven partially sale staffing-related costs Higher wage of delivery in bonuses. by fee percentage quarter costs. percentage and XXXX net renewals of to restaurant transactions quarter hourly higher restaurant higher a by wage XX.X% to from XXXX shortages labor of primarily increased increases,

fully quarter. Taco our third sale. outstanding pay and second balance hand the utilize from $XX to on costs sale Turning the related our to decreased the sale, the repay term end at to of third to million Cabana proceeds loan now to cash cash the flow $XX.X from transaction the related million utilize We the comments. Cabana Taco quarter cash balance In of quarter the

benefits We to XXXX expect forward of Uri. we were part of associated looking under also employer million the allowed claim portion Storm costs made of One with of one-time that a payment for additional $X Act benefit security defer the CARES the cash the social we Winter as proceeds payment is approximately COVID from relief. the insurance from

investments response of are the insurers. Tropical. corporate million, stock on filed expenditures related the resumed for were development three of with our Total Taco maintenance during We for capital remainder XXX we $X.X quarter third expenditures were with technology $X.X of XXXX a Pollo has XXXX. from the a comments for included and outlook which been for remodels, X.X million claim few quarter Tropical for and remainder total million capital for repurchasing awaiting shares expenses. third Our of I'll million and Cabana a XXX the Pollo close $X.X million. our repurchases a of XXXX, our

we expect pricing and have are challenges supply in make about XXXX. continued the we our top margin We remain line preliminary for October short-term. to seen October, current momentum the levels. we roughly action. look optimistic across continue In forward XXXX facing toward comps restaurant XXXX cost costs saw expected XXXX Commodity based intensified on with calendar on to as optimization for we October additional entire in remainder labor staffing commitments key and same progress we already store In compression of see results is increasing levels expect we The pressure ongoing commodities. have margin are improvement margin by to place above segment QX sale to food be stable going our and recovery driven

will key cost we can with to XXXX we've higher noted, that estimates of for see significant intend need low yet increases recover level communicate compared negotiations relative cost and but in XXXX historical XXXX. pricing we in Rich to given that action we completed finalize increases all food are risk offset additional confident before margins categories, of without traffic commodity action. we our costs pricing expect to major food we and As negotiations the not any We

Pollo G&A comparable Tropical sales. is to we based goal reduce is group, is on believe a to our to sales X% which as Regarding peer percentage G&A, our to of what X.X%

qualifying Rich finalizing will we plans be ideas of over we potential of mentioned, the and progress third year. made during the savings As quarter remainder the implementation

level of Taco basis. we part back provide continue As services the targeted on are achieve through to Cabana and Cabana Taco office to G&A the to targeting XXXX a rate mid-December divestiture run we

in Cabana year including $X.X expected million, the capital of close to prior $XX the full to million Finally, XXXX expenditures $XX Taco are million range sale. related be of approximately to to the

year, As continuing we a our we look employer of on accelerating third margin efforts above to toward the the improvement quarter focused preferred be the XXXX. and of balance are

brand our listening. Thank tests will questions. the and we design our growing to customer to addition, across experience our will an in Operator? ongoing we call efforts future up features continue further platform service in digital refine upgraded now you channels, and In to new continuing drive all for And for remodel drive investing open proposition unit growth.

Operator

Thank [Operator We'll James Instructions] go ahead. you. Stephens Please take question Inc. our Rutherford from first from

James Rutherford

time comp was that a Thanks where on December. you staffing. think you're still total for ones and prepared very fully I divergence it that's Maybe in that company a then much X.X of actually fully was are the X%. clarification. staffed comment a company bit seeing same the maybe But seeing the plus the I -- And at in the staffed congratulations right. was and think in the remarks to questions. quarter start with was the Rich's hoping All two-year regards especially in I wanted a average could over in on you're I on a reconcile improvement to

side? are still percentage lacking what set they're little no longer are restaurants the that is staffing restaurants of fully are on and there bit still fully the some a So like

Dirk Montgomery

James. Thanks Yes.

staffed of end are of as except all major fully in we staffed the markets -- the fully and Miami-Dade. quarter the we're So for

seeing spread balance the company in is big to comp compared And Miami-Dade. we're trends of so actually that

XXXX referenced is Miami-Dade. positive a the we referencing up markets X.X% that XX.X for basically major comp versus trend So, plus versus except XXXX all and

Miami-Dade. are progress We making in

staffing additional staffing implemented incentives we continue and improve. those mentioned, initiatives, are Rich to increase levels additional have levels, to As

to -- we adequate today. do some work still not as Miami-Dade. more have here but It's in So at level sit we an

James Rutherford

What the just that's a bit kind of getting even progress is And in how did And of What whether two-year I'm growth question. qualitatively? the traffic or competitive what you There's the rollover the a the pricing happen love factors from in or of stimulus. to action lot things traffic with Okay. helpful on the if numbers the course saw over it's would quarter? clarification. any of quarter? I'd at a is There's happening impact that know traffic market.

Dirk Montgomery

Yes.

So, broken I really of a traffic you mean, we have seen we've can improvement we don't traffic two-year basically dine-in. number that the for tell down, all except but continued across channels

from we're And to sales. the to historic from to of down which to roughly were sit historically still slight QX so relates did of the but We -- it our be increased mix dine-in total in dine-in see QX, in traffic at XX% has mix the were not traffic, as dine-in a has level sales dine-in the and challenging. dine-in sales increase slightly QX continued QX counter

James Rutherford

because cost confidence margin a you enough pricing being guess great. XX% also level necessary I'm quarters? still to to range XX% that that's or of also you labor to lot certain up into picture in with overarching into to And on confident get at It philosophy But with year. card the you commodities I committed to to are could Okay, around ask want over just like Is margins one are extent is visibility expand the margins. all next is sort ability sum sounds question, like staffed. have you I curious fairly there's feel this. the and of the And you couple wild not whatever because with a a this it next that certain margin restaurants fully

Rich Stockinger

than a think mean, as think we we action have year that to cost the we just a probably than wage basis I think from always I if to adequate in mean, assumptions, took. on more have over -- course expect offset is both. Yes. more pricing just that about increases it's little about that should of be and taken that -- labor the bit action flow-through which that the pricing subject aggregate we run we rate of next the planned, we I increases rate

So can maintain fact action also the take competitive and we pricing well as pricing perceptions. three action value We has years that been historical feel we still we last said, now set. our the really and over -- the like below

James Rutherford

it. Got

Okay. more then she's there little digital drive-thru more so a Actually what on about turn what Is wanted I queue. the is if just customer And for Patty the kind like digital. over much. the one experience in and on experience? Thanks hear bit impact what of just exactly that to entails. I'll it to

Patty Lopez-Calleja

The Yes. James. digital two-part. Hi, drive-thru experience is

what have be we work between that and lunch during hours digital and dinner up-selling on-peak The night. is beautiful our will that confirmation. -- our off-peak and this that's have We prior clearly that component for streams work off to streams. We'll our and have a then off-peak new menu board off-peak late and will order have

all drive-thru is which mobile common have of now see that with are where site person the with the to pod we those really the on-peaks devices fairly industry our will micro heavy a at is those restaurants Our each of which a that consumer. ordering long within QR code a is lines unique

menu this limited can or click an see menu order that our purpose are devices. our twofold tell phone on offers way may time they they is to is make to exactly for ordering when brand be our guests of make our app and their their our they all acquisition cell mobile phone story familiar what cell brand entire another they're Then the and ordering real purposes, for hiring The that Folks collateral as for become are they time on could with site micro with they not story. are become with actually accuracy. payment boards So order also so their placing the also behind and telling board. that huge confirmation becomes sure seeing our

James Rutherford

helpful. that. Very for Thanks

Rich Stockinger

Thanks James.

Operator

with comes from next Brian The you. Vaccaro Thank James. Raymond question

Brian Vaccaro

be staffing back where other levels. that back that on evening. adequate were staffing And pre-COVID circle does XXXX? Good that levels some mean I curious, And back are versus might could maybe October? Thanks. when there versus to target I'm way they just levels, a just recently Or different seeing through is to degree quantify wanted say just Is you August saw to July, in seen? more the how you're you of improvement also XXXX. what versus moving that much maybe help improvement you've quantify you

Dirk Montgomery

Brian. Sure Yes.

the the have compared to the So same XX% We've the the scheduling. or optimal basically is head head higher. We measure target KPIs. optimize for used targets to staffing count staff count have not our we on changed. And that

Rich Stockinger

to consistent It's XXXX.

Dirk Montgomery

the And XXXX Yes. at back levels. we're

So we of challenges around the can the kind eclipsed you of repeat the you before. the quarter. where question? I of beginning we're the quarter part sorry, definitely second first can second started of end guess at staffing I'm the

Brian Vaccaro

way was meaningfully months. three sort improvements stores an and It the seen degree or were that understaffed you improvement if Yes. just frame to of maybe that that of kind you saw last the July percentage were to over or you've the is quantify of a to Just of where and where there's which four August staffing from level today? average level

Dirk Montgomery

Sure.

which continued and overall quarter into third company quarter staffing total the mid in we sequentially end second the in the to improvement mean, of of month-to-month we quarter XXs we were that in I the improved range So, then the third in terms October. XX% at in in total XX% were -- -- the

Brian Vaccaro

you've on helpful. thanks to comments the just clarify and for your wanted October All I improvement margin seen. right. Very

be of make of we're to if store to the and Just where the on same order preliminary? even were in framing you magnitude. share page October margins things sure willing Would kind

Dirk Montgomery

mean I a rate our No. sales Number just not lot basis more comfortable results XXX metric wage a -- rate October total improvement couple basis. on are as that Yes. reduced we with feel run one, by But points in -- comments. a rate percentage wage October in preliminary. dollars because still of

plus because is all on to kind as holidays that to our of towards we've is range of The to got which the fourth XX% bit believe a margins quarter like make appreciate, run sure bit to is you about. we we of tend get very labor on balance little to talked So from XX% that But trajectory range. returning XXXX November perspective. noisy. much the I'm a a we percentage as rate months feel in way the XX% higher head that we as a revenue little XX% into can a we're to December, and dollars those the our

Brian Vaccaro

stable helpful. And to third fourth in I us there. was base where quarter, you That's touch say roughly in help talking inflation with quarter? inflation when to the that Okay. similar to being And wanted your Can you to what in XX.X% COGS your quarter fourth are you the you the ratio on like that guess was third something saying saw you are just similar commodity expect about I be in QX? or quarter? I the you commodities it think the rate

Dirk Montgomery

No. -- sales of COGS the cost The percentage revenue. a as of

in we the overall the take, half that a as likely that December see would most include we of of period. does to revenue of stable will in percentage be be not and the will in expect because kind quarter. -- back that that That So, plan price increases of cost to sales

-- in have packaging like increases we cost commodity probably. costs reflected a terms going have But our and of trends seen it's most overall I in So, this just material competitive year, impact I of not have the in mean set. to mean, and

the in increases, increases of seen say the fourth the in area sales compared is the we've prices. We've highest stable to be expect But some quarter moderate third quarter. So cost I'd the to we've overall, where to poultry relationship increase. had had packaging probably sales we

Brian Vaccaro

maybe to new just that level And initiating pursuing place what's program just growth you meaningful guardrails assessing last accelerating fuel versus meaningful in more on in made unit on here All on say versus the latest make you're you've prototypes you Pollo. thinking franchise you. at Thank company-owned on one the then of investment for potentially And elaborate Could to growth? more progress a great. the the me. what that right. buyback then unit comment have unit growth program? willing Maybe your That's do and

Rich Stockinger

we outside $X.X-ish I testing over environment XX, years -- a done. to current $X and differently in still way kitchen it's that Yes. that differently well have accurate time know lines to We historically the testing already engineers the us assuming our the we the studies motion take they're available in think have engineers to But is lines the the are way out be of more results importantly from that said the the an up got that setting million. mock significant of that a in process we as and the We kitchen was sure one. by again, it be are lines restaurant XX will make the we've going approximately investment, that million up accurate. And we ago. set versus today which have business improvement versus I'll result

foremost. So that's what first and we're going to do

so a in try or probably core to to We our to will very It's close that here restaurant. Miami-Dade it. going It's we then going out Broward. be market, in be in can be

to that. So how can restaurants. going some And existing take that see we've we we're learned take we're retrofit our also what going and there of to

going to So, and where not markets the significantly because within additional not XX restaurants. potential within then without restaurants. increase a and Florida, a example, have outside XXX the there's we first we're year growth significant it's go different we're will per sales to opportunity in right now. lunch But be restaurant ready testing but if growth can of Florida, looking even yet significant We from hour at at to are new and in going and building believe that got again two looking expand at comp core stage looking we cars we'll we to store grow point foremost, our at at units that be next or we

Dirk Montgomery

a I think this investments. approach Which traffic. what comments, ones drive finalize based on remodels I evaluating and in of we of drive will we're attractive. And And of results. we're going mean, That's sales, those which cash. year, prepared number to was around of XXXX other why plans we're disciplined design to testing features our for a are as then we're ones the most one these very all questions uses said taking our your kind

Rich Stockinger

sure the taking is on growth. make start Pollo approach future And approach. disciplined before we We well the disciplined know a to Hard then starting on with play. of very to or in here where rolling a transportation tested dolphins at licensing. coming see Florida. airports several regarding how other we're movement within second that We'll the of just on the had we Florida opening And out franchise, People Florida licensing. based question want we're the We of play. HEAT as comes to Miami on us be data outside a Rock as one to Brian, centers. significantly Stadium take on lot we when the important inquiries in it opened facts We've up and the

at we're franchising, then look be first. that until your from wait will and sales the So prototype new to franchising taking get of do we'll results Other those going margin a the type to the of typical we investment plans. test

Brian Vaccaro

you. All very right. Thank That's helpful.

Rich Stockinger

Brian. Thanks,

Operator

with take from Thank you. question We'll our EF Eddie Hutton. Reilly next

Eddie Reilly

margin. is Or absolute from in going to X% expect about target Thanks the guys. there growth? reduction the be X% come G&A forward? this taking to going I wondering on my more you for an Hey, revenue Do was G&A to question.

Dirk Montgomery

now. by that before way get the also There implementation. We qualifying we I better there reduce resource obviously, and optimize absolute start TSA period. It's not ideas These improving typical standard -- -- for the through completely efficiency. they're the as qualify right the ideas to just need overall are pretty Taco, are we ideas that said, level. be And are we're an expenses can divested ideas we've mean, Yes. will reduction. we're we our -- can we now

Eddie Reilly

then growth downloading form of it. App? much Got seen in joining you've people was me. if the loyalty question wondering program MyPollo! the I for the second and And

Rich Stockinger

haven't right We many loyalty, a in that likely full on on. things so other XXXX. the frankly strategic initiative will because enough That's be follow. a now. going we're we court press sometime loyalty hopper working to The have done most But got in yet we've the

app the between app We the increasing XX% the higher are we acquisition non-app the are check On difference said we being improving, the about user earlier than app. user.

in the year. increasing of So acquisition focus will right The loyalty probably our follow app. sometime now next is the

Eddie Reilly

a Got you. ticket for dine pricing other just greater channels? on size. versus approach on guys And in you different Are that taking

Rich Stockinger

To extent Yes. some yes.

a different to So, continue with we take have the channel. approach been and will delivery

done that they than for are delivery work delivery customers the on that lower historically we at sensitivity we've So, have suggests price The premium. analytic levels non-delivery. much are

and we like our test And so, group really so to charge price for we level evaluate delivery it. higher can and do a sensitivity peer we that optimize continue that

Eddie Reilly

guys. Thanks Great.

Operator

And your are no at there you. the today's conference. queue. thank additional conclude Thank all questions does in this time That for participation. you We

disconnect. You may not

Fiesta Restaurant (FRGI) 12 Nov 212021 Q3 Earnings call transcript