J. Alexanders (JAX) 12 Aug 182018 Q2 Earnings call transcript

Good morning, ladies and gentlemen. Thank you for standing by. Welcome to the J. Alexander's Holdings, Inc.

Second Quarter 2018 Earnings Conference Call. being is call conference recorded. Today's all At mode. in listen-only are this time, a participants

Following question-and-answer Lawrence ahead, to conduct will will over Please my the we presentation, go the turn a introduction questions. is at conference of time Pleasure speakers. to for Mr. be that session the for Mr. up you Tom Lawrence. queue to It now for provided instructions and today's

release of have call that Berendt XXX-XXXX, J. immediately. your appreciate in us and to J. anyone interest the discuss conference on Alexander's quarter need news now, was results copy website you Holdings she Thank at will XXXX. at a (XXX) you. send you If a We the second Katherine does copy, Alexander's www.investor.jalexandersholdings.com, on joining for copy received Inc. By this it call available of of yesterday everyone distributed is a or afternoon. should can

the over all II, I statements Before that than and J. the Alexander's CEO made you of during Stout and in President call, news call Litigation harbor Inc., remind other statements conference are J. release made turn safe reasonable on These Holdings of statements. the The provisions believes of I Act statements of expectations this fact Private to the to historical are based XXXX. pursuant are Securities company Reform its forward-looking that assumptions. Lonnie

could factors expressed forward-looking industry statements these forward-looking the or or that important these involve actual However, cause by other results, risks, known statements. implied unknown achievements or and company's and or performance achievements, performance uncertainties

the filings December release, the sections the forward-looking website the XX, website. factors the other factors company's Annual is in SEC's company's of statements can for and other on uncertainties with find under year of subsequent information XX-K Additional Form Investor the section risks, risk which SEC, you Relations the and concerning XXXX in ended press yesterday's in those headings Report, and and described

release related the information in the XXXX. non-GAAP statistical available this in and For GAAP August call, financial are press other measures disclosed measures dated the X, and accompanying summary

past necessarily In not do company's its addition, results. the results future operations of indicate

know the call consent may itself, of call, Finally, call are the statements XXXX. the the the the or X, will that the and replay of diminish the Alexander's that with only to Those a the quality let understand Also, of the of call done we Inc. time, replay date listening contents property of of company want made passage are during August of as the by the transmission Holdings J. should to made statements. people of information the any be

turn Now Lonnie over Stout it's remarks. my opening for pleasure his to the call

Tom. you, Thank

areas. XXXX. We pleased evidenced the are all was our a July performance quarter, ended, in It solid virtually for second quarter of results X, by good

which delivered of our the yesterday our Same-store in build X.X% press groups. As with We first encouraged restaurants. J. again noted particularly in once River Grill afternoon, X.X% in to River, same-store release sales rose year. sales we were at continued of higher Alexander's/Grill in both and issued momentum and advanced the restaurant Stoney restaurants Steakhouse half Stoney throughout the our the

most quarter taxes For was X.X% XXXX. continuing the of reported per reported in detail over gain will recent the sales of share XXXX, XXXX. $XX,XXX,XXX, $X,XXX,XXX, reached in Mark from of $XXX,XXX the a in before income $X,XXX,XXX quarter the diluted second J. a operations Alexander's Adjusted most taxes quarter of in Holdings quarterly quarter of favorable in in for last in comparable $XX,XXX,XXX XXXX. net $XXX,XXX of quarter the second the climbed quarter operations increase $XX,XXX compared of up year quarter, to significant swing ago. from second the of the quarter year. income earnings second profit XXXX was primarily same income due in from address recent LLC shortly. before of Black to $X,XXX,XXX in X.X% the quarter, this recorded compared most The income recent income more valuation EBITDA to net Knight the Services continuing for $X.XX was quarter $X.XX of were and in Net the the Basic a from the Advisory quarter the grant. to corresponding of interest second XXXX Income

operating restaurant performance you management operating restaurant of level. to margin many team know, uses our at As restaurant profit the measure

ago. sharp expenses This the compares increase recent year quarter of operating most profit which basis. to quarter This margin restaurant was during to the compares quarter XXXX. year-over-year company's new posted XX.X% quarter, the favorably timing sales, of second the restaurant preopening $XX,XXX openings the attributable for of on we was in For The a XX.X% $XXX,XXX. to a totaled second

River to restaurants principally XXXX. than Overall, continue a lump to an and performance Finally, at the sales be good beef estimated new but overall, Raleigh, on Since location holding first sales Tennessee, then, sales numbers, Alexander's our aggressively we at very, the year Carolina estimated of Lexington. we in to quarter, more when decrease net level, of All percentage not to cost market. Grill prices and although development, in in our entered cost The the J. entered X.X% locations which to in in cost restaurant's XX.X% decreasing the encouraged still Germantown, there. second seafood, the of sales Kentucky the were Lexington, we of Steakhouse restaurants was increases meat jumbo are as This down and very are primarily runs. newer have second our in concepts to our J. in X.X% taking in of and Restaurant crab a Alexander's strong the XX% company sales and robust produce, an by attributable the were offset Lexington post related to Beef in J. well sales quarter prior open restaurants. River as in dairy Hill our other Stoney restaurant of the at the Grill and Stoney Chapel continues as development, products. Stoney second have quarter as from build and improvement steps our solid North our as been restaurant that we in River in decreased Alexander's

most base this such, yet. XX, anticipated recent a country region Our in and market. know restaurant the opened a Philadelphia, opening bit is new April outside This just Philadelphia Alexander's longer may People of us of which on than is us, of in our guest to don't take Prussia, for as it simply Pennsylvania, establish J. originally King was XXXX.

very to excellent Alexander's/Grills making sales on further and guest in the that encouraged loyal focused remain been major driving base. will We we're recognition half over market. that is time events a during market, building intrusion place counts of in showed first situations and time, have these of our second impact team affected And compared modest Examples guest second counts, Alexander's/Grill locations. With confident our concept improvement traffic counts X.X% include specific outstanding an sales relocation have period management of we we're increased J. same-store Steakhouse on and were final recapture quarter in similar as develop to that same-store we we second guest increase have and and an business. that We the of modest we sales guest X.X% XXXX. gave, We've groups, in in guest Over our a group instead thus J. one slight the reflected and a previously River will as subject quarter another restaurant each specific Grill decrease presence guest approximately X% are three our the company's encounter increase these increase. to require visit for restaurants. the taken work And tightly improvement the the menu of The corporate I response restaurants From the pleased that certain is realized, to just limited this Stoney recently specific in with the we second J. as performance was harder both focused well during quarter significantly to our Grill influenced our to traffic, of Stoney guest of on noted. analyze within a River the price time patterns, examples to decrease Alexander's that within of XXXX performance. and experience. in quarter same-store restaurants replace far and the of counts by would a XXXX, to three have excluding that year, traditional competitive however, needed has respect for our the the us market, quarter's of groups restaurants

restaurants on River comparable continue at of increase the adding X.X% We year, related be to reap during was past the brunch a Stoney benefits estimated which lunch approximately quarter second several the and of XXXX of to the basis. to

were the Financial locations, and to the Michigan. year. call our However, it generated and quarter second turn construction on in volume restaurant higher in remainder his open This we guidance open our to that was increase newest I'd the dinner. this pleased one fourth most remarks base Stoney to way within and scheduled sales lunch quarter for group River like J. are of Grill over of Officer, year. and close in Parkey, of under River Alexander's on is be of will My same-store reminder, the Mark? This guest proximity to our organic. Chief of both we in a the Stoney for for counts the the Mark Steakhouse restaurant Troy, is

everyone. Lonnie, morning, and you, Thank good

from experience in indicated, quarter J. believe our for the Holdings, highlight X, we and performance the are We reinforces the Lonnie recorded J. and were of sales quarter we locations. increase to a point for a was fact our second groups. destination July of of solid restaurant again guests. trends pleased top XXXX Stoney line same-store Alexander's/Grills We that once key discerning both of As another restaurant positive ending River each Alexander's the continuation locations

X.X% sales second in ago. restaurants, quarter a increase the J. $XXX,XXX reached year weekly of same average the in the $XXX,XXX For quarter an XXXX, Alexander's/Grills same-store of from

Black For taxes. restaurants, profits week and a of the same-store the Advisory from reported River sales our impact over our operations weekly exceeded LLC interest $XX,XXX Steakhouse during the income our a second income expectations and Stoney Grill continuing of X.X% favorable Knight grant quarter $XX,XXX highlighted the Services an of Lonnie before week, average on XXXX. increase reached

$X,XXX,XXX profits $XXX,XXX most most at second profits of fees this a in fees the under quarter the with also over decreased grant $XX,XXX, the in October and For realized April quarter, of valuation quarter Advisory agreement It our the The XXXX, the using Knight realized management $X,XXX,XXX the XXXX. to upon and share XXXX non-cash quarter, is runs $X,XXX,XXX quarterly of most three-year compared or due income compared recent XXXX. valuation most for of cumulative Services grant in primarily company's Black X, of end interest quarter recent of the consulting vesting recent $XXX,XXX X, X, was second XXXX. valuation the issued to to grants with XXXX consulting most a each the performed, October valuation. July is interest of to expense the the the of stock The The recent any of expense requires period, valuation XXXX. a Knight we same income at model company price impacting incurred Black-Scholes with recent quarter, Black which $XX.XX LLC closing being quarter, of with calculated associated this change associated at through per based the from

of same-store the The XXXX and in $XX.XX $XX.XX quarter second guest as second quarter beef X.X% second Grill sales food Alexander's/Grills Stoney for XXXX. to XXXX base counts quarter X.X% were was labor Alexander's/Grill and XXXX, $XX.XX company's cost X.X% second during of of the Stoney from down Grill weekly average of same-store average second quarter the cost increased restaurants XXXX. deflation the of was restaurant check XXXX. of by Steakhouse were compared of to the operating estimated expenses alcohol the of beef second XXXX X.X% respect compared same-store guest the sales company's $XX.XX in The Alexander's/Grills River include sales, Steakhouse restaurants, year. XXXX. the were quarter during check be restaurant guest of within quarter an the XXXX of And down and by for our XXXX. The over costs was in net cost estimated River of quarter the quarter $XXX,XXX of to effect increased estimated of during Stoney of to from quarter average of by XXXX. quarter restaurants second J. the J. XXXX second restaurants of second net increase both of and checks Grill The quarter to related for quarter guest River our for the the a For were income to to quarter to of counts total quarter second compared second quarter X.X% base to with estimated quarter to the of At decreasing recorded corresponding X.X% within an of of last in which $X,XXX,XXX, compared the X.X% within X% the our quarter corresponding of of to the operating a in for XXXX at sales was restaurants, XXXX. J. corresponding the guest menu for second XXXX. total quarter XXXX. J. for over of beverage the average as net second of up the the With to the quarter of Deflation second X.X%, income of and the for well as quarter Alexander's/Grill pricing within Stoney in second by with X.X% XXXX XX.X% second the River increase and operating base XX.X% percentage sales the compared the XX.X%, corresponding the restaurants, the restaurants, XXXX of Other approximately Steakhouse XXXX,

the we continue beef half we will handicap of remain last to within acceptable As market the it for XXXX, parameters. optimistic guardedly perform that

X, entree until does restaurants do information impact for anticipate will current as The crab stabilizes. market the we the which However, release. the balance of company pressure August pricing earnings that based upward cake J. its lump on market performance update our next of further Alexander's/Grills at the XXXX, to of meat expect before not in the company's market outlook jumbo guidance is The XXXX. quarterly crab

call update any of However, which May upon X, may is at and the the to is I this company the outlook turn to the its based change for or reason. business thereof Based current subject on any information portion full any is time the same participant reported as segment outlook XXXX back operator guidance the will the year morning's for now fiscal open XXXX. on call. the to the call-in information

Instructions] we At [Operator from this will comes Our Stephens. question the question. time, Will question-and-answer be your of proceed with first a line Please with conducting session. Slabaugh

into the quarter-to-date strong at period? Hi, in you give of with both for question. actually a same-store I guys, the any the brands, early but us color about reads on good progression any my the kind question could remains comp Hugh both It more brands taking start and of quarter. Will. at growth into for Thanks – sales is This wanted the to your morning.

the sales across groups positive markets. across our JAX were broadly all We Grill same-store – of in Sure.

are locations spending As check we the area, very during In slightly we mentioned where with that our had we were at average Guests that, was more we were quarter. sales lunch and I same-store good growing. pleased three lunch though. the see Other dinner, It that's would performance. money. say stronger dinner underperformers than

a as going conditions. those that The to building for are big points. River executing allows that fronts XXXX, to reputation different we same-store to sort work said we're going sales. our we post boost Stoney and all continues those features is different on in same-store a of to for exceeding flexibility of other meet of XXXX, trends that that lot Stoney for having price us. feature guidance, trends in different expectations the We all We we not benefits good reaping us positive our to a update River, sales, reestablished of a in thing acquired think program we're think on continue in XXXX feel having marketing – be us markets finally did XXXX,

been some additions. of that's brunch well our the restaurants in successful Our as lunch program as has extremely

So an same guests, primary increase been driver remains satisfied you our and has same-store been more there, of guest the to visits to it? sales. for the Stoney primary base visits, the add that's in by the existing not Better outlook driver old River. anything Mark, frequent want

think hits that I it.

No, much that now or how that's that system the has great, it. implemented appreciate off comment, guys. And last just lunch platform? brunch going I of

We have many lunch in locations, how Mark?

We've half Six not and our do serve XX in restaurants. the of XX lunch do. six got of the lunch of

won't remember Stoney in lunch mall just River any at acquired some lunch, thought very it be looked population daytime was just markets had probably restaurants. because sites We and we or concept, River business parking good program lunch, we business. it potential we in a inherited any and be that very added them. River, but that can restaurants, we lunch put aren't did basically lunch successful adding have limited was And we And do then mall where we're we what the no sites where some Stoney Stoney at a lunch is more doing to dinner-only when some successful, we we

add we success lunch the forward, lunch call, in dinner be will mentioned River's of Germantown, last all going after Stoney our going forward, on and Hill. to in Chapel think we I the markets. location did And

it. we recent the be at restaurants development around? a on weighing appear at reasons Is for appreciate the that little these and more you from of how bit a be outside to That's system Alexander's, control. to going headwinds can long slight on of expect And this just least that traffic your three noted side, great. then J. traffic were to I back the

of new location of business. the company doing restaurant is or after-work had corporate of so on smaller turnaround. that's headquarters, another It's for had been sort different. a one a reasons. area, one location lot host traffic marketplace, impact business had We shift that a our well. trade in that it's that's had We a volume Yes, where gigantic restaurants, about the where in market some relocated certainly lunch heavy the seven probably huge national we've and a six trial, of of had Then different their a in restaurant our

away from of other far it's are The too stock managing around, two the portfolio. turning like sort but

XX quarters, counts, revenue a of of think these, more couple within you have one of of of and probably sort be XX of that all reason guest three up, get both that it you conditions. just markets. to all rarely unique our think don't are on same-store positive lost that's happened it for be tracks, a another, or have because is struggling normal, and going long. with lot stocks, they'll counts. way in because especially always If them so unique guest two We sort sales We locations will one three or – the that's these they're last so We than restaurants, growing

And one one last just Great. for me, guys.

expect commodity there? You that the for pricing recently way pricing thinking pricing menu both more at a we, you of year forward? kind does spoke moving updated outlook just commodity brands, to you're X% see took outlook and the knowing bit the on can of, Or the little change about the same the and that

is dropped surplus cost, us, because rents outlook that price change and every there get are We five commodities every beef a on But too. – our to usually to that from increase going River are year pretty plan, we're up, current stay of is did we so that go beef take of X% saying building we don't years, can even Stoney of cautious stable. with up, level were even we X% we – assume recently the prices if we, to as linen utilities Well, there go increase with try price we've significantly X.X%. and a it X%, people dropping, cost took, a just business things of host when sales prices the increase

aggressive like I decent beef abundant have then and it is, we think we I'd and prices very guess we to, won't up, – are that market If take can say if room, always aggressive. beef we but So price increases. stays cautious we about we be the pricing, need

That’s all, congrats And from the guys. me. That’s on it quarter.

you. Thank

Hugh. Thanks,

questions, to [Operator Lonnie over for would the closing I Instructions] Stout Since like there to call back turn are no Mr. remarks. further

We being Devon. you, appreciate morning. Thank on everyone this call the

a to Troy are a the of third sustaining sales committed and We performance. increases River quarter solid restaurant opened base. to in will our in groups by our our same-store addition month the now We into quarter The this our following second XXXX, company in performance become of improving remain restaurant year. new Stoney location second the

in we three stated, previously As four anticipate XXXX. opening to

us of once details to the and our third you forward announce in quarter announcements to we Thank next for forward we and results. will morning executed, communicating making quarter. the you with leases some this We following these look joining are look

have And disconnect. you, a this you and does day. may Thank teleconference. time, conclude great today's this At now