EAT - Earnings call 1 2024 | Brinker International, Inc.

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Operator

Good day, and welcome to the Q1 F '24 Earnings Call. At this time, all participants have been placed on a listen-only mode. The call will be open for questions and comments following the presentation.It is now my pleasure to turn the floor over to your host, Michael Ware, Vice President of Finance and Investor Relations. Ma'am, the floor is yours.

Mika Ware

Thank you, Holly, and good morning, everyone, and thank you for joining us on today's call.Joining me today are Kevin Hochman, our Chief Executive Officer and President; and Joe Taylor, our Chief Financial Officer. quarter our earlier website first are morning our on available at for were this released and Results brinker.com.

Then initiatives As first usual, beginning statements. everyone operating our strategic to would your regarding forward-looking of make will open performance. and remind prepared comments comments, call Kevin related to questions.Before and for we will Joe our like harbor the I our safe

described Such should facts. Act be financial Securities and which press we include said, During uses the forward-looking that on are certain company's not uncertainties, Any the factors release I of the Kevin. cause results into that management such risks insight non-GAAP the over this are call, on entirely Litigation All in will ongoing which with believes call, to review more the items the morning's operations.And our within actual and uncertainties statements the certain call items being to and historical measures SEC.And considered with Private statements to to completely business filings anticipated. meaning of may based company's and the from of risks differ will course, subject could provide such discuss its turn management of XXXX. may Reform those refer in

Kevin Hochman

our and X% dining while quarter guest improving a and versus the Mika, the delivered outperformance strength Italian against the It's progress of focus business. versus to our on Chili's virtual fourth progress our on demonstrates industry, team another traffic sales us This and launching good Maggiano's brand industry Just despite cycling member quarter, profitable of consecutive of our throughout on the remaining long-term is improving initiatives recap increase narrowed we Chili's Thanks, morning, Classics core the of deep virtual we everyone. joining Thank growth, for casual driving experience the discounting the Wings. business. as And continue traffic traffic quarter the gap quarter strategy.For first and which through sustainable discontinuation you comp the momentum our importantly, brand,

in guest according working are Our experience and the to investments both marketing plan.

of we've campaigns data we in income of the consumers unbeatable on quarters we wallet well March, where our households traffic advertising encouraged people air third with a complete a us restarting by anticipate dayparts, growing higher sustained are on particularly X competitive across all across sales with edge results. in gives the of watching We're value delivers gained and platform, Currently, over since past the shows dinner which to we're delivering Our and the groups move wave into consumer we industry. the the share year, fiscal steadily all to and growth ahead $XX.XX that income our be further current environment. air continue responding are fastest.As

do better gave then, the line with of our you to monitor sustainably plan into we X sight X quarter, to of our of As this average driver with relaunch, Hot what business from more guest grow the and our Last simplification and It best new gave sales brand Crisper plan deal and August, have bigger selling our delivering And XX%, margins can this menu the a Crispers. and new to industry business market economic with and moved a continue and growth bar percentage Wings A with is on October, performance, core Just let's featured positive We in quarter. and new we value, this make side its month. Chili's Last launched versus innovation, a it counts food Crispers. experience an we better introduced believe superior the piece update an market lineup over cost in accelerated we is innovation, Since has focus have update the pricing traffic We'll improved for and selling the improved initiative XX% and the a you continuing result. closely performance dining a Nashville we share.Now It's about now quarter, a our room. headwinds. recipe sure menu are advertising market Chili's improved also and progress. any great of shows bar lower moved big much on costs to possible we XX% delivered sauce larger on Crispers which to behind to introduced financial premium talk I through early the we quarter, best also Chicken core as leaders traffic late simplification, for food is an platforms.

simplify and progress we've trade significant the results promising. momentum in which menu the new easier are jobs our early, in to wings guest and Through still coming leadership doesn't results Core into We're look the seeing our premium full-price improving made is out the More next forward sales are into and for X X our rewarding. making at and quarters.The more restaurants. and happen label it's of stable we without hard While me in seeing operators' mix both improvements, we margaritas, sharing and operations, details our efforts and Crispers, work strong more to is move the margins.

plan, as on path to fiscal which long-term XX a against and continued increase to continued the improvements our as in fiscal with improve commercial pleased with long-term we points report in to additional growth build an during the help drive basis.Looking starting accelerate year, back advertising on turnover, we the will sales strategy. increasing It's value 'XX, to sustainable annual XX% winning now during making simplification campaign we to sales stronger which growth our service plan. the turnover advertising XX results to a progress add from the I'm our industry. base continue to XX the you is X few of start would to along the the are continue based third hourly traffic see advertised weeks half down we made business As XX-month you throughout a our This will results. over is have place lowered and we've will traffic This to decision a next guide year and us a an of and model now which improve Air on the of accelerate business the while to to to hourly years. manager too, pleased turnover, our manager the XX%, are voice When better I'm than result, with expect quarter. turnover clear Wings changes

the hand to and we're we seeing fiscal walk right through ahead, over the business in We call are guidance restaurant rebuilding you are Go encouraged operating Joe. sales and the numbers traffic margins.Now the to growth 'XX. improvements way, by Joe as I'll for as Chili's the well share to and

Joseph Taylor

above quarter has to of again marketing supporting the effective speak Kevin, to average. sales the and improve and Thank this benefited window, represented reported to you, and gains all offer strategy provide our is from simplify industry about with the once traction.First fiscal comp we and of gaining everyone.The good results our operations, guest year the an indications voice morning, focus importantly, experience Hey. morning Chili's good start louder quarter half solid for

for of moved revenues realized key reported, led costs, results we on and As nicely our $X.XXX the areas, with financial a consolidated P&L X.X%. quarter, by sales positive the the through beverage growth consolidated Brinker's basis, totaled billion, we in to exceeded which comp food combined improvement expectations.Specific quarter

of the comp of year diluted first X% X.X%, traffic mix of into strategic our a be contributed by was price, to million. X% X.X% negative the composed the Chili's performance, we quarter, remaining more negative level decision quarter business, virtual for Chili's deemphasize Maggiano's positive reported base traffic our the respectively. of comp of sales the adjusted to and growth X.X% adjusted can loss. quarterly the The feel of provide attributed traffic for At than driven X.X%, last less price overall but and traffic EPS approximately fiscal also norms, brands of X.X%.To making Pricing X.X% in was and $X.XX, brand brand. of are offset for sales operating $XX the traffic offset more quarter of insight our the Our reported negative traffic a little for we to by X.X% contributing above level, progress of partially and levels indicative for X.X% nicely partially historical the by improving elevated are EBITDA mix improving margins. the quarter the and is quarter restoring economics remain restaurant

drop levels price less fiscal launches, we year-over-year we menu move price the see of take As the and year, through with planned we'll rest will further.

XX.X% from shift for cost contributed believe guest leveraged labor into dining meeting traffic powder markets we year. from Sales price/mix We've and they're continuing more in year-over-year operating to in improved a consumer margin, improvements the seen quarter, While our rooms, margins. plan up positioning, improvement our forward, be to we still have to to manager improved restaurant dry of willing we where X% last significant strategic gain. the all reaching the commodity spend.Now turning going quarterly

the was first area expense XXX benefit past This from when recorded food basis key year. to compared significant last expense during Our beverage actions favorable and quarter points pricing year.

and company year. the contract successful our the to favorable commodity with of to to and appears comparable labor prices Crispers a in to line the inflationary for Manager the of the improving chicken lower improved against turnover. further We company and quarter overall in Based labor improved industry-leading and and for overall sales levels model more comparatively lower half quarter were markets market labor environment expense year-over-year keep and year. basis trend factors stable sales remains the in a deflationary from as Labor emergence more addition, turnover conditions relative an driving experience also Wage growth. basket then to the an expect team historical deflation environment prior pork of fixed of merchandising and favorable second the current fiscal positioning, lower was helping commodity we In basket. members Hourly believe with were on percent second range, supportive but for mix elevated XX leverage move year-over-year our the improvement. market mid-single-digit to chicken was stabilized. for performance.Dairy labor our to increase compared is have single-digit and contributed inflation points expenses also a in costs creating stable norms sales a hourly rate to returning

increases environment $X.X our IT-related of of cash costs. our expected, of areas helped levels the restaurant P&L. we Again, line other operating improvement spend. one leveraged of expenses ROM.Moving of XXX(k) As the higher items, experienced the was further debt was primarily the year-over-year at to our against expense several increased points The to and in sales in performance bond with some offerings component improved off-premise flow X.X at as offset basis restaurant expense as stronger planned in increased compensation year-over-year, year. the subsequent in million participation favorable quarter well and to a advertising utility this XX due due of and leverage maintenance times. to and G&A restaurant repair funded Interest EBITDA quarter positioning expenses, further expenses higher due end growth expense expense the and the down refinancing fixed and to that particularly costs performance improvements in this related of of greater current higher impact rate earlier planned

last quarterly of forecast quarter first credit and to in quarter, finally, expense morning's are and insight X sequencing both EPS of performance ratio, we some to press guidance times.This of leverage as our from educate $X.XX in fiscal EPS second year release me X borrowings, an performance targeting flow cash of down help important our reduction range restaurant revolving call. a let the continue to the improved guidance points increase increasing guidance provided of of year-end We the and economics, pay reiteration ratio leverage in other our it full for further on Based included to categories models. your for new provide $X.XX.And improved earnings current year to relates

throughout advertising and Now million of to expect we line have sight better $X the between activities, expense an QX timing elevated that our compared F to even million marketing of year. into a 'XX currently $X we expense spread the be of the

year impacts performance. full Additionally, be G&A we million Anticipated good is primarily G&A beginning in also QX to brands QX in similar of to operating gaining expense year.As comments, driven start $XX said are to $XX an our the increase incentive the compensation due strategies. possibilities year are expense our the slightly increase prior at to my to above the and our million execution anticipated QX, improved million compared off by expected to $XX in afforded to confidence G&A, a I increasing to recorded and now from

cognizant in as are While forward to to a to look as encouraged through quarters.And I'll Holly improved questions. all the are We to Holly, with upcoming back margins. of and improvements economic how further comments turn potential benefits return our restaurant moderate challenges, messaging, now responding we we to to from we're our yours. sharing my it's progress move experience the operating complete, call seeing the guest guests

Operator

first Your with is this you. question question-and-answer be time, coming a today O'Cull Chris for Instructions] [Operator At we will Stifel. Thank from conducting session.

Christopher O'Cull

Chicken back first believe my same was Me the as remain quarter, affects price will some the future? to year. these of Chili's to I which commercial for the this Burger ability how low Kevin, new a feature Crispers kind guess to guess, need value went in wondering spot for hero the I'm messages hero, company spot. Do that X just you believe I of I the this earlier question, the And foreseeable

Kevin Hochman

it, mix did away point didn't where have advertising, so to in made Day, mean July March. you're we pivot I in in burger and around worked. appears list the that spots previously We referring And other round from was and $XX.XX really spot and both X Crispers actually it had versus make in overall biggest the look actually September, by that box, us you consumer that's of of quarters. our that why with the it it's right last the far, at with couple to Labor within that that advertising we've I Chicken we our and rethink a to price that. We saw the X us tells softness plans, on the along did mix menu sharper versus some everyday for Me to. down we responding put advertising then this market. call industry, It still the definitely if the went say, will Yeah. the decision early is previous

for full even couple the shift Many which good when moved saw significant. have much of Crispers I the we've that most driven put think about. advertising And on, Crispers really higher we a Me price nothing we is the $XX.XX, big X venue, of that recently from a mix we to really the down X part for of how of points those bundles but business. tiers feel to the Me, was of

this would past doing results. expect to it monitor to with really had more results to good that. So the we growth going based merchandising campaign, closely. margin able we the advertising that of we're Obviously, see we're very be a foreseeable on job our seeing But feel for with that that future, like changing. I anticipate the that maintain business I don't you're menu in to And

Christopher O'Cull

hired then describe with that Chili's I And look Gale the know to to you might what digital and see programs campaigns like start might company marketing. or we from when that group? support Can

Kevin Hochman

Yeah.

tokenization the on which modern required and full they're building offers, they right no offer. target of the transact a able the the better them guests meaning we us CRM marketer, be is back the a right guests, how be of if means now. currently that's identify So messaging to with to with an can We're infrastructure and kind matter there time our

that ramp-up and even the out January. the changes X to a modern see be take going fully some direct what X teaching so that infrastructure. months time QX, to us lot We past that by to marketer, we're a more, to in but think to a much complete. place that. going to it's over be going of expect about think see would I better build be They're then take would would means it see January, coming that about I And to significant some in customer So that's months next you'll

Operator

Markets. Your next question coming with Capital Strelzik BMO from Andrew is

Jared Hludzinski

Hi, this Hludzinski for Andrew Strelzik. on Jared is

more going I of expand kind hourly what below be of bit a look drive was on focusing as little puts So of turnover hoping could the on to and try to and and in takes you some that back XXXX? improvements the you're pre-pandemic levels forward to that we

Kevin Hochman

Yeah.

it still it's that on managerial was so XX%, from it's number progress well be. on is So like that the we've It's of improvement was where industry. XXX% an XXX%. but improving, we to feel ahead turnover Hourly quoted The behind incredible the made and of I industry. the needs call turnover turnover, to

an a we're model. things that we have it's is labor So couple to the There's go. still long but on. improvement, One focused of a way

Now the is jobs need that elements more that job individual of get many finding our that focused we're we are it the for doesn't labor to on mean in thinking shared, there's putting investments and different so model, but folks. having

So our for and of shared to really that not the multiple bringing house, sure of simplification kitchen more team host members. example, the our that our House, on which looking which also that the buster position bar-tenders. at is front focus we We're the that back Heart it's position, is and we continue adding our so servers, across making

to the And to that where want. VP, X all focus. turnover we And President to too, so to primary have progress those it's to to place hourlies regional metrics eventually, going to whole improve. We're going get is the if need basically continue good, see with in to we we're because creating a guest better meeting actually against we hourly where continue that's get we most of where our been the weeks, action plans of get Vice about Operations meeting while really of be stabilized lot

want still that And So of I I the it a Vice think good we're think post going exciting. meetings improvement. earnings this call going plan to action have behind we We're really be. very at President the net share to next where to is good to is be

Jared Hludzinski

then one And just Great. follow-up.

the should emphasis as believe decline. X% XXXX? contributing the virtual out headwind in that how overall brands I forward the curious traffic about called we move of X.X% I'm you be we thinking just So of

Joseph Taylor

the particularly second taper-off Maggiano's the When took We'll classic. in of at removal lapse the start to place, Italian year. the Classics see it half of you lapse where primarily look

So impacted as And then second but into quarter, that fairly the it last see run-off end will it will less The similar MIC towards quarter you moved really year. to of be of final of removal last amount. end start slightly fiscal of year. the you the

So it of by, of an gone will in all less year, end half. fiscal but more obviously the impact be second

Operator

next Your Palmer with Evercore from coming question is ISI. David

David Palmer

be what that the helpful about of And advertising. stuff to benefits Trying to is timing obviously, from positive sort was in you're October think there from here clearly really can I getting some how marketing. disentangling the

So the working. advertising clearly is

but for job doing is doing your margins. which a be good might You they're Crispers, having the $XX.XX,

when in and medium might the traffic So I be satisfaction guess having your some What maybe customer advertising the what from off of for stuff what you this benefits starting having maybe are about is term a near good you're and versus we all-in strongly? should first the think Chili's? expectation traffic be from so quarter question driving how is, do how long-term you you're disentangle do some the

Kevin Hochman

let what start GWAP. like on have does in that calculations question to the mean point understand with call can do me problem, we experience we What call first from annual effect, some getting the we're in guests theoretical We we improvement. to do sales. reduction think part guest the we every of off Well, the with what

that it's could And it to regression a and so be. I'm quote really knows hesitant multiple variant who because accurate how

So this prize size have to some think that do internal the the say estimates we look we of what is. we at is

we what And restaurant continue regardless go time shared consistent, you and I great we're the progress. is going of have go, of you're that the look on. have shared the what you metrics feel they industry amazing, you in that order, day we're our be and And a is to a during like you that's Investor improve, to journey if exactly what knows brand and as to everybody what that team need want into, consistent guest think making and every experience Chili's always that Day. friendly one guest we you at the to quarter experience I

a we're a great earlier, to things right continue direction. like with So problem scores, all about which server head GWAP, about talking into intent attendance, return to guests they talked I've to

together us been improved they believe over-time they if that even when there the so if in because very we to versus continue were David, that, the to make do guest first going And reality versus as on long time advertising word, versus of from we the get the is continue travel or or long we're we come try to last get it's out guests benefits tease our returns hard the experience. they to that to the the your improvements experience advertising an to better competitors, a as entangle going forward use So time experience, haven't right? but for that time, we going they're the

Joseph Taylor

replicate from marketing It's we piece your in. going adding definitely are the on of rest but think how that the business entire performance to October's of that continuing as January we'll relates marketing industry windows. perception. go-forward That's as do you because yeah, have The you from of the traffic. we're because industry time, Again, as traffic above get traffic traffic just window kind connectivity of traffic David, to how do going back from of marketing our we consistently is first our improve into positive to and to a to do from on then but forward. create remain look air we period only the goalpost work steadily to of going the not the obviously, then, quarter improved we're work window traffic, we're the question, the benefits not here between it move be And above a reasons one be during And results traffic themselves say you seeing, model. is I outsized the the will go to above get we won't to

together I that promising move we the absolute look the initiatives from we'll a situation to in we our think move to us traffic all direction, to fiscal for level come to but basis continue current different forward. quarterly will traffic, start year as improve an of on

David Palmer

And sales was? quarter, a back looking bit, just think at forward? that we of if a the the do from narrowed as Is think that narrowed be look sequentially. insight the points the last there September industry I gained any that quarter, Why the it to you couple gap same-store growth by to quarter in

Kevin Hochman

have little going and doing better seen in people at are any which on on to you broad from results database, I given end. we different think again, at. stable and you're marketing depending some ebbs got bit give a We've continue to they The a depending flows remain you're standpoint the databases one as looking David, actually what database time. can to towards move

straight different So at. we've But database that long-haul quarters X seen the to quarters. of again, said, Chili's I for industry. you're we're And exceed we this the as on trying what do think some now over multiple depending looking is the there's results

to going we're building that forward. kind keep of streak So we as go

Operator

Ivankoe JPMorgan. John from with question is next coming Your

John Ivankoe

have also media out oftentimes year, cases, we and attention restaurants. question on doozy do years, presidential advertising. can some in historically, can really And should which next is pull and a obviously actually, crowd The of and customers actually election out

of fiscal 'XX success as even in you've So pivot calendar if I a there as wonder getting so tension approach kind the share far how largely had might in your an think just change 'XX, we mind about environment? crowded increasingly tactically calendar change in is that type to it's you of a think about 'XX, or if

Kevin Hochman

competitive get lot most you're Yeah, the tends election John. more marketing, TRP you're costs up. because to year go right, an I I to are for mean can TRPs, a closer think

think ticket lot of those to and that we I go there's different can a TRPs. ways market

strategy out going be will little to we marketers I election like got deploy bit probably I'm change don't the about any dollars leave way. see the changing think our So a best it commercial during in an terms to and of I how year smarter to to in election up to year rates, that. figure But the like

So candid the answer. that's just

John Ivankoe

consumers allow for right. the focusing customer. appropriate Core come you're dine, that I on, maybe the Candid you're amount focused the But understand just of more that of you you more little currently And X the a do of of often. on. think you're think what that to Chase good. brand kind bit All is is basically of give more mean, of options kind I have rebuilding brand operations variety that the But complexity kind secondly, to in customization, Okay. the the X kind that do I you that are right. do understand -- of

Kevin Hochman

modern business is have just strong. variety on we're core cohort the I is make that that thing the first Well, sure making customers' the the the the of is the to mean, need sure yes. I doing think answer to we we And needs. meet

have first last which So of the whole at I'll what's Crispers. gate And Fajita get we've like as we there. of continue are with new the Core done we've X, share doesn't we and lower what's stage right? we once is some good margaritas burgers, job as figured tortilla, will products another then can't got next on X, which strategy fiscal we in and next as I have business, competitive within for about years mean each because two, relaunch the the which And in go to those well sides. the guests is think number us level one, out to burgers, news talk working So And think premiums. we're of in possibly allow the X. to you right, we they there, improvement it are relevant marketplace. protein, that to innovate that want stay in the take we in process improvement really can it's price then the one with for Core be, have so that ultimately, is that improvement because where covered where ideation the beginning have But 'XX be Hopefully, to that already to could our make next best, through you I what's next? sure do those in is we next trade tiers, sure in as innovate as today's the spaces to And up making guests, to better, in barbell Crispers, in teams the on done quarter a the just good,

about from that. at see of that I you'll completing the XX think XX of variety you're probably away that we're Core hinting And that more X. So I think then off the months really will to innovate

Operator

next is question from for Your today James. Vaccaro Brian with Raymond coming

Brian Vaccaro

hoping year-on-year gap fiscal could in traffic be you could that October. quarter? trended more said back circle the was we a on through relative I then traffic on little you was Chili's think And specific first performance. And I how positive

October. curious gap like in what Just that looks

Mika Ware

Mika. it's Brian, Hi

in October traffic our actually has narrow gap and is continued versus So positive industry. to

Brian Vaccaro

Okay.

year-on-year, it and the was October? a industry traffic versus positive also in was gap positive if So

Mika Ware

was. it Yes,

Brian Vaccaro

just the chain then showed at brand a Kevin, And Day, Okay. awareness, on back noticeable gap competitors. you versus large Analyst the think I June

by not memory how sure But metrics might it awareness in that much often do But on narrowed you any type how Garden of or have you get Applebee's statistics. months? those I'm Olive and recent if update serves. gap think and has have I been if

Kevin Hochman

Yeah.

few impact after. get won't advertising like we campaigns awareness So the a on until current months

I see awareness. in most don't I too. anything movement in that in the probably report, the I the based of I recent would significantly really couple flight, advertising improved much say to would on months. mean, -- the think didn't Chili's have has will guys you we metric everywhere, see -- like assume, assume July I previous I last So

the window So we very window that was and versus low rates that today. have current TRP March the

to and any close spend I quality the of the quarter or the significant that on we the expect just gap So fact It like competitors results that flat. our during continue But buy. versus this that saw it's key was not would anything. sales basically the more of to based kind regression

Brian Vaccaro

over then lap ask reasonable quarters? to And expect wanted Joe, to 'XX. I discounts also, a moderate to Chili's. versus late happens soon Okay. check average next pricing at then the I calendar cadence pretty about think And reduced the few what's just And of

you Just mix settling where see out. curious

Joseph Taylor

Yeah.

So over we see again, just from now, cadence to Right of would the expect increases price lapped pricing from a year. bigger last we one moderate. standpoint,

current quarter we're -- we'll So the mid-Xs. the now in exit down

Now if and the that half fiscal at menu year, year. the will have fiscal one of back look we the come at end of you the a right then in February

we of decisions be most to is the that is those influenced very kind we a by pricing to down ranges. to that continue on looking of have menus, in depend I will If year-end, you're in pricing at make. be on mid going as year we that low some that so is level. year, moderate single-digit So the down low We'll the make two we so actions. there probably which lapse. prior decisions, we'll range by mid-single-digit through move any the be at mean in for go If pricing we'll

start further go 'XX through this down moves, of into of bring through if we kind year. So and F think as the those earlier sequencing of lap pricing you pricing they'll actions to even

a do, what like anticipate marketing So that make depend the it's lot the would mix still merchandising. we We move. on standpoint, be around feel we of maintain a would pricing doing, of how some and From to to you going I the and the we've grab through. to marketing think have effectiveness about of level opportunities traffic can campaigns we mix go as a we as been we'll we too. But positivity traffic low if decisions take

to slightly that So expecting that of to as stay bounce kind in forward. range, kind neutral but level positive we move around of again, neutral mix

Brian Vaccaro

assume I just And said was second X.X%, that. that Okay. higher think exiting you're than to clarify, you quarter. I the

in pricing this maybe effective that So filing be we're or in about to the quarter in somewhere were would current X%.

Joseph Taylor

price between moderate the of quarter, recently, the -- we rest you'll October have level and really you of more Again, higher the so level for X% be quarter. X%. and a you're -- to mid-X% in will It out range. a come that impacting had you in But lapped going very in

Brian Vaccaro

from that Great. just spend, same quarter, in page And the me, last advertising to there. then on what we're the was one dollars just in the sure Okay. current make

Mika Ware

Yeah.

So split it, for the we we over advertising going that reflective or million. be to more that evenly first is spend. our where just to Joe quarter, Brian, clarify past his of script instead in $XX our trying spread expense that was actual And that's the was now in where

a $XX So will over be the closer, second little million. quarter

Operator

for Your with Sandler. from coming Piper Mullan is next today question Brian

Brian Mullan

season? speak the might positive negative Wondering have Maggiano's. then on did you can indicators holiday be any lapping unusual question to? you a Maybe there see helpful, too. if you remind on anything last year could holidays? thoughts some Just And would how around you us if the upcoming either early early or go Is provide

Kevin Hochman

rates, that We no expect there's recovery swings Yeah. of the continued I have like growth bank looked we see mean holidays. big the in fine. bookings and the

the I that way very of outlier where Maggiano's feel and we the Obviously, for the based heading no we really or quarter on there's holiday good prepared generate, into mean it's important seeing. for season. We that sales holiday amount about good other We're So profits feel about we're season. are. but we a one the

Brian Mullan

your year, delever turns net while that? of X color allocation. And to you would on the be balance beyond X on to turns further of capital capital maybe look what's you plan end more conversely, Just Once leverage? that your just you should traditional get Would the follow-up by for maintain Okay. fiscal to leverage any the return or current sheet looking be great. we for thinking

Kevin Hochman

we'll Board. Yeah, Don't Brian, the specific any to on continue a obviously with have that's discussion have to say anything changes.

news based generating the we'll the think have company. on optionality improved the cash is capabilities around that flow I of good

to you allocation come to capital we'll that a discussions back those So and right then doing we standpoint. we'll point to some what time it's of have think is the be a with any from as updates

Operator

Jeff Farmer is next coming Your Gordon with Haskett. question from

Jeffrey Farmer

following the Just on traffic handful earlier a up question. of

what for Chili's see you same-store what can did October but it implies in that relates us that traffic with sales number? Chili's to So as share October, positive

Joseph Taylor

on you're be From when positivity going sales. strong coming going an talked Again, about strong see to to very have you going into period for October it's all positive comp pricing equation, comp shift dynamics traffic standpoint, think already a the it's be to X I the I sales, components. a growth little the bit

Jeffrey Farmer

that October relates traffic or then going round of did internal your of new Okay. it And had expectations that meet that as advertising? results, you exceed to set sort that into

Joseph Taylor

buy, watching shows on the based I people were above think of we've the it the fact of level performed exceeded our the a the and the we're buy, result good the on that expectations. that. quality We expecting for --

Kevin Hochman

window bit in probably potential and We ways, were improve, levels of which months think ago, basically the X modeled we is they more the window. to is X there's result consumer similar because both. the message continue little better then the were drivers. this they to we a is got great. open March the And than X March today a And service second

Joseph Taylor

that but was of were and labor even on what for. that points favorable Okay. we And year-over-year, better more Street so sort it quick XX than line, just was looking was the outstanding fact the think one the I one other basis

that and do it that quarters terms favorability of percent continue or you in thinking as as to gets? of So in just quarter, a favorability saw year-over-year, revenue good maybe the about you first of expect in sort coming labor as

Mika Ware

this is Mike. Jeff, Yeah.

because mix our Kevin So to continues a investments the the And offset some our said, favorability moving first way helped as quarter, labor some really with turnover those in decrease. hourly saw we had we also favorable price into and model. to really things overtime in

into second not Joe just the we be able As price, and we improvement. cadence to have quarter, so move our year-over-year about a talked may of the

that the going have last -- to quarter we it's So model especially there. in the is quarter hourly because investments the second those to have that

deleverage So some see I think might next you quarter.

Operator

Bernstein coming next Your Barclays. Jeffrey question is with from

Jeffrey Bernstein

questions. X

just maybe casual The like it seeing a of thoughts. industry dining late. broader the industry or first industry And one, Kevin, seems slowdown is

within piece just and Just you're up obviously, wondering size one as you that. it

to pricing. So And that mean, I congratulations just moving in obviously, consumer you hold how to as finally talked counter taking you about seasonality. about much that. do is some return just we a versus talk on the think have industry, But it headwinds wondering, of think about

it industry wondering the So like there's broader components I'm for you it compete? there. about X within seems that think just how you

Kevin Hochman

as so look if hindsight, dining a The we seasonality, I probably to think, segment we real back-to-school that we returned seasonality saw casual typically in was pre-pandemic.

real probably saw August, is that we in I think late was So September. what early

and restaurant last the about they as the that's guys versus or we've us we've do unbeatable our now other that you like talking versus that I talking the year. about As we're their what the why trend think industry, saw value of in. were in number reversing channel we're been day, the $XX.XX big far seeing as it right? been regardless a year comparing value the the in we QSR having is our do think tweet versus helping, compete I kind co-mobiles and for of about Like a of what

by the advertising so the of the maybe And customer is. that improved is performance part where of driven

I seen what function off. have never have advertising know the which improve outstanding opposite, value. a downturn is things tailed with not a in on our to data Core customers the it's market. to seen You brand. as there's macro we of that to just of had be we whether We've action because for it to of continue complete that going not, We the of that's resurgence that course going sure. about talked And believe for to we still there whether if headwinds then but could us continued or a the certainly not, one our a going to the X do, things experience, that same in And we're want downturn, we're and if was improve the it's do, or the customer continue air get back be a

dividends right the think So is is it's last I what of I know me paid doing to has comment for what what regardless doing. do is, the over for macro to versus business. thing about of they're what our do. the doing, really What we're And like couple hard months some we're

Jeffrey Bernstein

XX margin about I'm full what are to as you you anomaly think comparisons so see last expansion thinking or points. But in it. the the basis have on quarter. you for an not. the XX had and said think you're normal basis you will going of assuming year expansion to beyond quarter And for would 'XX? profitability target first points we XXX Got restaurant business based be what I margin that's

take how year. being fiscal guidance? next the implied you be your of mentioned to I'm think this in pricing menu might I what's within willing couple later So fiscal wondering know 'XX rollouts incremental you you that or about

wondering margin just between you So price? how willingness connectivity think the your about the to and take

Joseph Taylor

Yeah.

pricing of ability year-over-year continue piece year-over-year basis, you do and opportunities contribute have to restaurant-level here. a one, growth the but on gave and to improve time I that we middle a restaurant of to leverage the elasticities I we today We've of think that. move little quarters think from at our with factor. actually on really in how of will do I our big economics some our long-term of how think get in management to see traffic kind expect real raised working a through we we those much as that's of was understanding be improved through. would continue that a think ROM more kind obviously, ROM scenarios, as you expectations nicely, gains educated spending just level anything, a standpoint, as we sustain move to been where judicious. in at you the that to Consulting, kind more we But the a expect of reason AndThen the to guidance we're some Obviously, more a sales year. that Price we basis. each price. to revenue is to and our going a as move better can to a I lot as impacts And number and is where accrued we do improvement P&L factor also that as Deloitte of refined story and we from the first And forward exceed is price understanding pricing benefit quarter bit from the

bread, spread very So the of real butter And peanut from going approaching very kind some going to opportunities. the to opposed I be us and that's think tactical. price across it's granular as give to

that for anything out the combined we'll think I above forward. don't low we're plays that. kind Again, closely. I expect if we cognizant pricing of taking, see economic it we single-digit But but as think from just on how markets, we'll forward, careful in see as low go a elasticity And So being basis of levels, of move depending we very opportunities on at and certain look take gain that's there environments. particularly to price kind we'll I at

Jeffrey Bernstein

your guidance it. I in to that P&L to mentioned the presumably success you quarter. middle part, of And response the was, the clarify, know for just in the raise Joe, first Got most

the know were curious, is first realize the it like what the Street and you your I the $X.XX-plus, midpoint. to guidance more by looking but earnings you the it's because looks was Street by raised quarter Just at going beat from $X.XX quarter, this irrelevant, about I you be. thinking outside, first

through flow further compare did fiscal to or quarter So year your the the what target guidance? I'm ['XX] assuming versus first your just how initial XQ rest was initial the wondering, was, the of upside the you're

Joseph Taylor

insight to obviously where a more it progressed. that going, particularly as little quarter bit saw as we had We

doubt. it without So exceed a expectations our did

belief numbers, anticipated. we more were we get got the that and were expense working would around of areas, a the bit on we But in some they level to think expect you about traction. conditions. even into that it obviously, again, to quarter, And in little out seeing traction economic a and areas I X faster the not little had again, trough. all seeing they in focused -- faster we we I a of than the items, quarter higher on understanding areas bright several of bit little have lot the And to got yeah, cautious we're of we're own point, probably our though so noise year. want there be a this at and a you're than hear about, there's

So fiscal year. we're time going kind we a through of it at move to as one step the take

Operator

KeyBanc. next coming Your from is Eric Gonzalez question with

Eric Gonzalez

Just wondering additional the weeks strategy, year. that about of the marketing advertising X this specifically adding you're

in back If guidance, much like your sales. a it you see to of don't tie that to you revenue expect looks jump

relatedly, conservative you're right expect the for that still traffic for about reading year, mid-single-digit baseline based X% is the bit X% Do down a to you the on I industry way? comp the environment?And then maybe am So consumer assumption for the still being year.

Joseph Taylor

to pretty revenue from window. incremental X expect a window, Again, but think added we're going the to do I It's equation. for will weeks. smaller we that a So from large weeks. in the be X it It's comparable October not range to it's you be bio-sample We benefit gave revenue.

I So window the adding yes, from an move up the range, standpoint, in do way. we revenues I move expect through the kind opportunistic in could it Yes, to standpoint, we're that put defensive windows of if those higher not as -- a

Eric Gonzalez

a during the whether can is access off-premise you mix? off-premise then And quarter, expensive I channel if about you're provide the as more business. Got to did the fall-off how if specifically the brand. I seeing channel to the could it, just I fared you apologize delivery it but way maybe ask speak that missed And it.

Mika Ware

Hi Eric, it's Mika.

Maggiano's Our relatively was at business off-premise stable Chili's really and quarter-to-quarter.

and Maggiano's. Chili's off-premise at XX% off-premise XX% at was it So

them So we're seeing in there. hold

Eric Gonzalez

versus Anything breakdown? to the delivery from out call carryout

Mika Ware

I all pretty No, really. steady. think Not it's

Operator

Slagle coming Jefferies. for Alex Your next from today question with is

Alexander Slagle

smart goods on anything it back seems of to but your So to like along powerful. price, sales, go more down was expected dynamics and XXXX they low the the cost lines see here and to of XX.X% leverage, of that playing substantially, pretty were have

but mid-XX%s of be So of much the low we goods. there would any year, or I of pricing and it in expect the little is to dynamics a the trying seem cost higher and bit get would how of a to so sense that great. concentrated the mix the XQ rest for mean marks just it into the for of And relative XX%-plus quarter, this specific color may tick-up XQ

Joseph Taylor

year, sales yeah, as of was of from a move And last percentage be an actually be improvement in off coming the company definitely I year. environment going it expect year-over-year stable fairly to first quarter of to it outsized but the we through kind a

to So that the continue you'll get move slowly kind down of benefits the some through year. you as pricing moves price of

a So margin. I benefit the to expect mix price accrue stable and will throughout fairly continue

Alexander Slagle

refreshes And and getting restaurant, you sort things Great. and with repair are to into close along you think the where assets. maintenance stuff, far how want fixing to the be of you're we on all sort getting new broken of the equipment and

Joseph Taylor

on we're pipeline. equipment made to a to in ongoing lot where progress the level. equation. want of think close I spend the have We with we side be the the getting We've still great

update really progress And and us. as months The you're supply to going our teams the to of ongoing a capturing would you to obviously, against understanding against are quickly, opportunities the the So or had the quickly and concerned equipment. can. as place, we're that extended areas the in levels as spend And It's XX an months is making plan and I'm -- built available executing the we'll it. period a progress and We've you you ago great We we're do not on continue to I done high-met work lot making over really that. a into equipment around as time, plan been we've like be XX fleet where a it. need have months. ago lie. possibly real year XX of But chain

Operator

coming with from Your Tower next question is Citi. Jon

Jon Tower

Meaning, response, that go you could you to range this where XX kind the from optimal higher brand cetera? color flexing conversation. level moving of And is through as guess, weeks feel help start reasonable see just consumer a move or I upon previously. et of in out-years XX to advertising XX back I we the potentially depending that of do around appreciate can into the over-time? outcomes Maybe, for weeks, going think maybe to terms you if us

Kevin Hochman

we as we laser-focused traffic-driving bigger the team. a traffic The is do while CRM. improve like on we question or do it over-time? starts are the That's what sustain advertising to guest And initiatives leadership experience continuing with these how

think traffic more the long make potential looking creating likelihood of the as investments over-time. the we're your component, adding the -- over sustainable in of years and I advertise all to would in for question increasing traffic at the I So X the one weeks term. do directly those being see next answer on things component Chili's few to advertising of

So Another is advertise new program the final really that that not depend top on is getting much, CRM, our we for returns traffic up on and builder build a in will to CRM we an we think the and don't meaningful the XX as And as well can of how you will when growth traffic for I other that that sustainable see sure, some as CRM concepts that would big to we're really number component experience. continue that then that see we be the and become the avenue make as fast weeks we improve alternative like obviously, is the investments will experience, right? over-time, get running, guest going more in over-time.

Jon Tower

Chili's And the period? then percentage earlier. follow-up where a maybe, provide a value that Can settled on the as mix out during for Joe, you just conversation

Joseph Taylor

have that in for of very also stable in XX% XX% very The check remained XX%, component XX% again, again, stable to Values, X Me, that a value too. range. total

in we're in seeing good very of the seeing have the we the responsiveness from value we're mix. stability levels guests, So but

Operator

RBC Your is Capital next question Markets. Carril coming with Chris from

Christopher Carril

seems on mix, there's do comp? more like in following with traffic, potentially that Crispers. have of like lot you price that on potentially expand to you could a you curious but guess around further how mix, you sustainable control could up It what maybe just a bit benefit and drive from component the drive I your can

Kevin Hochman

with The biggest innovation. is opportunity

be of] more benefit that Core to creating consumers [premiumization X spaces pay willing the So bigger could either are for. just that or

really is like Fajita us I So the of next innovation. one Crispers can doing see a where big type

air of volume burgers. could going other that, similar new a parts innovation on and see as go mix provide with for you track just you with different quality to than, protein, protein proteins profit on or the we you overall that innovation to that in the as on premiumization of more that both is it, source might going drive could considerably to have in have So the call to other guys sales Crispers driver get, Mexican driving we what as of Fajitas well concepts thing the talk the we're that business the Fajitas of today well that as and protein because the about business, once Fajitas drive can higher a more and that than both mix that's

Teremana continue example, to margaritas like things of other page we from bring for merchandising So in is Blanco. that's seeing with can do first as why benefit just apps, merchandising right? the compared because the we're big and our all one. premium grow ago, today obvious a cover alcohol you we're the our that There's year the standpoint. Casamigos menu menu if today, looked new spaces menu we some that's at a desserts, So driving PPA simply that to And drinks,

So customers It's to buy, if a forward. really to easier and move innovating, obvious give to innovating a potentially actually for. I you're think right, that mix and not if needle that in to that try you up it's and to going thing, an be continue they it's do we're to going things that want trade past. that's the lot weren't to But going thing especially at a looked going be tool to we

the have up moved things. of of CRM our the able to going some probably in program also is about months. that. guests, guests that about pull in more would do and discounting with we really biggest we But actually that's me, back show the couple of which that we're we as get get talked things like the some the we smarter we traffic, And do today. level up that some level removed previous probably mix probably know to doing discounting and XX likelihood it. So and There's to of running, of But the we tokenize that as price. forward, We've literal already in [indiscernible] of

your answers that hope I So question.

Christopher Carril

I mentioned growth and then Yeah. with bit wallet across you with you're income seeing cohorts, guess and follow-up, households. Can what I income And for share gaining specifically with a more lower my the income think, gap? middle fastest on higher maybe you this expand

Kevin Hochman

spending continued the We households. Yeah. see of across all

discount strategy really And good bit So over-time, at little to to out getting your have things all deep the about to is you become of you should because to the in, wallet more look household, tend and take guest make grown brand brands because doesn't them, that team out everyday trend price to a discounting the mean less less a matter income typically and a have some future think give the strategy, a the to a you discounting that insurance affluent kind rates us inflation much income. we be right? able the I And we're removing always now. seeing that So if guests needles. a have to over -- cost customer to base year bit and right? an income we like of one value bit big in really share more those time of becomes price, deep bit higher an and going little stronger you wage households or everyday one discount guests over-time, of it as a the the we've move on that lot little that not. more little I more more that's into have of the higher way grown reliant of I my certainly than explain see if of business, bit So or weather of affluent to a needles middle little game it is of low And pricing a faster. and reversed kind elastic is the that we're

headwind at guests that a and you price saw having about. less why we that these bit end is of talked that's the could of you up some But that end those base handle traffic stronger a of that And little elastic that guest leaving, some what are is things.

Operator

from coming Griffin question for next today Your Bank America. of is with Katherine

Katherine Griffin

if de-emphasis how was could you brands, delivery the restaurant of much frame helped was by help packaging and I the the just the virtual wondering lower costs. margin

Joseph Taylor

wasn't less benefit some I real. of don't is from have figure less a you. debt, benefit. the things The to that for was oversized ROM was There bad It nature coming expense. packaging off-premise that an overall savings dollar costs,

a factor. was it So contributory

will of one of wasn't as have that you contribute of the price it we those the it's oversized beverage nature. in and seen go think as things forward. kind to areas and as that I food continue improvement from mix dynamics, would Again,

So it's but was down the pecking there. order, it

Kevin Hochman

to a very just it's of You small Katherine, begin remember, to have amount mix with.

virtual we versus when So dine-in versus is or improvements brand. at even margin the business improvements though there in drive -- Maggiano's Chili's like see we

going you're restaurant If operating huge starting margin. the at have low on not mix, to overall it's a such impact a

Katherine Griffin

mix? And also that's curious pullback among would like check alcohol if whether through just that Okay. income anything I'm management higher suggest Maggiano's you're consumers, at seeing any

Kevin Hochman

versus big expecting like thing at this at was macro concerned as pullback. impact of of experience. team but more $X a I the was out on on no focus working in saw big out, this mean business on now had gigantic right the the business one we maybe some the to XX% bit know on least reduced big figure there's of what say is that IJW an there Street about a then to the X the think the just point, you that's too, not little we But numbers we've cost the that challenges I challenges. And try would was to traffic? were of It's I I is go was focus we which Maggiano's quarter, There's -- delta No. the the removed tad. in saw that of what And was X

Mika Ware

right. All

So questions. our the day. that call concludes appreciate for Goodbye. everyone's We

Kevin Hochman

Thanks, everybody.

Operator

conference today's concludes Thank you. This call.

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

Brinker International (EAT) 1 Nov 232024 Q1 Earnings call transcript