J. Alexanders (JAX) 5 May 192019 Q1 Earnings call transcript

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

First Quarter 2019 Earnings Conference Call. being is call conference recorded. Today's [Operator Instructions]. now conference the is to turn to Mr. pleasure over It my Tom introduction Lawrence for of today's speaker. first ahead, go Mr. Please Lawrence.

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

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

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

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

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

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

the to the company, Also, made to Lonnie of call Finally, of of the call will the let may Those done Stout of It's of we only are or are made time remarks. wanted turn the people with opening the itself the the quality over statements diminish understand of call contents transmission J. and listening X, to date of the should that as call, Inc. the to property the of May my by passage XXXX. the during for the information Alexander's be pleasure replay any that statements. consent know now the Holdings, replay call his the

the and new of call. about has you, Mark Tom, in welcome as Hagler our veteran introduce new Mark I'd to team. Parkey, We've and plan, role. extremely Chief like a this you increasing is Mark? company. been to to in and started Chief gifted role to also our a with area Jessica me financial who now the Mark I And Financial Parkey. of Moore, over Mike in call operations is to XX-year-old completed quarterly Officer, Executive our Operating his Chief highly earnings our succession executive. the management Jessica like turn Thank the to our we're XXXX, promoted is the leadership company, excited Officer. company Officer,

to results on you I, today's for call good joining review you, comment on and for call. the quarter first XXXX. us the on and to too, everyone Thank like would Lonnie, to of morning thank

and on As my this in Jessica will a Officer, moments. will call join noted, me Hagler, Financial few our Lonnie follow remarks Chief

collection. certain recent concepts quarter. restaurants in continued execution increases, we traffic Alexander's/Grill in during in guest despite most As both softness expressed pleased in with yesterday, the sales J. positive operational our news generally turned at were We restaurant same-store of release our our

aggressively are counts will build these discuss shortly. detail We guest as at in locations, working more I to

first March J. up $XX,XXX,XXX sales from Inc. X.X% XXXX, Holdings, quarter per Alexander's/Grill Alexander's first were $XX,XXX,XXX our to ended in of from weekly ago. advanced J. locations restaurant in For sales quarter a in X.X% $XXX,XXX of $XXX,XXX, net XXXX. same-store year reported XX, Average quarter the the same the

Texas. of a during the River fourth average new Houston, the Redlands quarter On exclusively market With and restaurant, and a Alexander's/Grill second of construction in lease a to will starting year, of the Alexander's/Grill Park open Antonio, of a past in San half be X.X% anticipate the this restaurant we located We Stoney for the it on in announced XX, this $XX,XXX Construction has Steakhouse to on this the Grill Monday, first be year. same-store This sales name. announced restaurant recorded Houston, the it XXXX. and Grill of J. expect this signing to restaurant developed under up first restaurants, we our to Redlands the lease XXXX. from started later district were and J. open March Grill per weekly This XXXX, signing $XX,XXX, of new in open quarter in first restaurant in Uptown Texas. restaurant the expect we this

expenditures guidance capital XXXX, impact The the first our preopening in not XXXX on materially issued except half opening will and impact expense. for previously for

restaurants in letter noted XXXX. X opened to beginning we've new the of recent his since As shareholders, Lonnie

up are and to these we newer dollars, be be ramping XXXX, on locations. we'll fiscal prudent about investing For sales capital focusing at going our

of measured so loyal decision. of our development and opening quarter And we believe first concept. a in restaurants the year is for become pace prudent a the we guests, some we've restaurant restaurants settle that that Approximately to regulars. are to during of have the XX% Elsewhere, of This see time we XX% a our in derived ramp-up groups. than our shared it As revenue takes continued and repeat our is because in other often many from XX% or XXXX, over next new past, markets. slower a is business-driven many

not while the historically have have release, trial noted presented openings in As they issues, locations. to long-term yesterday's some potential short-term guest generate in such

last guest the XX to in prices from of our first representing quarter of of the we XX with our from revenue of lost most representing XXXX. a recent outlook quarter prices the concepts increased we for revenue points do such These restaurant the sales revenue will restaurant due of any first ramifications primarily cost Beef which in winter and for cost compared a price result restaurant of overly face from in competition XX.X% quarter of we increase the of comparable sales from XXXX. during we increases quarter. first the first during also days the to sales select closings, approximately the of first And note we ago, negative closings While believe of responsible lost higher first modest In year weather, I increase, XX.X% harsh to implement approximately in both of increase net the recent in revenue room cautious XX the year. price the flooding always however, for manageable aside quarter that traffic, by price quarter XXXX. may a XXXX days sales to balance in have so the XXXX would quarter cost not in the through are lost the $XXX,XXX Overall, were at than basis weather-related $XXX,XXX second of XXXX. restaurants. XXXX of later of about we in concerned this that Midwest was during quarter lost are taking year, of remained quarter that

XXXX. continuing before For this income under taxes on the was by also Under of was was XXXX income accrued finally, the $XXX,XXX. during and $X,XXX,XXX. hand XX, $XXX,XXX non-recurring Knight November which of March XXXX. on the company of This used the XXXX. income XXXX. operations from operations operating Results compared of company share in net recorded recorded $XXX,XXX net income of quarter of was the the taxes management which continuing income of XXXX EBITDA first XXXX. March the income of in the first to of transaction expenses provision in the consulting provision X.X% quarter continuing agreement, quarter in XX, income earnings of the $XXX,XXX quarter the company's quarter quarter LLC. expense of impacted interest the and Basic cash tax per related diluted in fees company of quarter XXXX XXXX, from in the first during $XXX,XXX the quarter from corresponding first the ended of first the of XXXX, quarter from first quarter XXXX, fiscal The of Knight XXXX. of recognized of quarter impacted income of valuation XX, compared operations to income consulting Adjusted The Black in $X,XXX,XXX before Black fee, for company to And consulting $X,XXX,XXX in prorated incurred The profits adversely EBITDA the XXXX XXXX, $X.XX Knight final included an $X.XX the of first principal company interest with tax first was first first income pay quarterly taxes quarter XXXX, results which to XXXX, quarter of the of the Services first in agreement quarter first our $X,XXX,XXX from Black an to adjusted the Advisory for ramp its of XXXX. up profits of compared totaled factor, $X,XXX,XXX $X,XXX,XXX XXXX. of before terminated $X,XXX,XXX representing

percentage Jessica time, year. sales quarter the will updated was ago. the of quarter quarter At to first of a to year For turn her XXXX Hagler, call provide restaurant the and I'll the the margin of guidance the first net current remainder in operating as this XX% who for of over a deliver profit XXXX, Jessica? compared our on first remarks XX.X%

Thank you, everyone. morning, Mark, good and

restaurant, the count our The J. increases down sales a the meet sales of weekly base concepts noted, the XXXX, base at in which the average Alexander's/Grill Grill of of XXXX. respect average the average were restaurant. within of $XX.XX for quarter XXXX. restaurants first alcoholic Steakhouse costs X.X% first up to first building guest to same-store a net first counts within corresponding year, Alexander's/Grill quarter of base in labor the of J. the of Mark the X.X% guest Stoney $XX.XX compared total were with the of first of to restaurant XXXX for the XXXX At by the of prior of newer XXXX check, guest XXXX of quarter costs Stoney J. compared beverage Other restaurant XX.X% XXXX our $XX.XX total effect net to to XXXX. of the The was River guest quarter our focusing estimated to company's base comparable the guest and River Stoney we check first costs Grill Steakhouse the X.X% quarter of within the check an XXXX. XXXX and first of estimated The sales, was was Alexander's/Grill quarter Stoney restaurants first continued of Operating costs guest first corresponding quarter and J. average XXXX, the sales the to restaurant XX.X% up base. the first in of and of same-store X.X% in first guest increased in during the sales the number of quarter XX.X% first quarter during over of With as quarter be Inflation compared guest related increasing same-store on check quarter to for quarter first quarter at by restaurant X.X% the same-store Grill of inflation of $XX.XX quarter The during during was restaurant, the first quarter compared Alexander's/Grill River estimated same-store in the while include intently and of results quarter while increase company's for for quarter sales River XXXX compared beef of delivered both traffic totaled XXXX. sales beef our pricing and in during a the the from X.X% the rising both first first operating XX.X% the the XXXX. of for X.X%, XXXX. quarter XXXX X.X% same-store restaurants expectations, average our the within restaurant menu X.X% over with from to quarter Stoney approximately were within by our food As net of of during of restaurant select Alexander's/Grill J. at net percentage Steakhouse to estimated River to expenses positive restaurant with counts of XXXX.

on due a Standards assets right-of-use Leases, the sheet which day adopted standard greater balance material to and XX assets first than assets this sheet quarter impact lessee for condensed recognize consolidated adoption with the requires to of on Codification Accounting The XXXX, the lease terms During was fiscal lease months. its the company the had the liabilities and and on company's which XXX, the XXXX, liabilities first recognition liabilities operating the lease company's of of adoption as date. balance of leases

for the an does company's adoption retained this to condensed right-of-use impairment the earnings have consolidated statements XXXX locations, statement to consolidated adjustment a on of Additionally, of for a is of agreement. opening longer the income the for remains effect recognize for The adoption related date which no the of of to but required flows company its standard quarter in to adoption one the company asset operation, fiscal first of not and XXXX. material the cash condensed which company's lease party the

for before the X, The XXXX. the company based company's does quarter's its earnings on performance guidance fiscal Finally, is to current expect next of XXXX update release. as XXXX information May not outlook

I is However, information, portion upon all as fiscal or except time are to timing XXXX the the Redlands any on the San related from March $XX as based date new to based million its update of million million. in morning's guidance the XX, subject range call on any XXXX capital information operator in thereof $XX areas, the Based from to million of March call-in current for for the any of company outlook open to estimated this reason. the Grill turn same XX, to range is Texas. expenditures, for now on may $XX to year at and This change, down business the $XX reported opening which Antonio, participant now full to call. of and outlook is it's the revised segment back will XXXX, the the which is

[Operator Instructions].

comes first Stephens. question from Our Will Slabaugh,

Mark on and as Lonnie, promotions Jessica the well. Congrats,

the how the particular? shifts, question, are rate weather, about differences, around noise thinking First quarter in J. calendar business, run the in geographic you of just underlying Alexander's given the internally

with for impact timing but bounced Well, The that around encouraged we're a pretty by a rate. little bit wasn't the run holiday significant Easter us.

has year said escape and got a So every years, we've the we're glad when on kind And always run by pretty comes nature. number balance, as of Lonnie the in that we're we for encouraged now. winter rate place of clutches of mother right

encouraged, trend and mature diligently noted as newer restaurants release the focused with newest the on the traffic months we the in get there. J. that to traffic of at XXXX. Specifically accounts our we're first positive yesterday, some we of seek all X restaurants three for working restaurants, We're our certainly are the to respect Alexander's

and where we about where So we're we're are headed. pretty optimistic basically

up Good talk little stores. those then, of future few terms in have to that performance comments, about of a of how it - you're want to some be say opened from of I to trying past seen the don't years? sounds hear. development. more what stores Can the And versus in thinking And you've hesitant performing you like but prudent and on how about just those sort recently your bit been to newer follow

performance talk of stores you're far these like may So if curious how out? recent the XXXX willing what that informs look to

its far what's yes. - local is in we've in each what as own as market. kind And location as that occurring past, story shared of Well, the is

we King with that working gotten. market. long and will into from it still certainly by that expect ourselves We're a to with in It we go we've encouraged but be, to make have aggressively the media better been to was events foray Prussia, in social first has there. get our the that we're where response way so very that And And optimistic it known promotional-type Northeast. of

we've expecting sales that certainly develop business. well will line pretty are previous development drives XX% the As a margin, conversations, the category concepts exceed foundation, XX% once our we healthy in we that average once system the most into top in that - that people of fall some by as and we of their noted the

a some involved, is little because starts geographics by that's to - the of with XXXX than, the traffic. of which but other in flavor different thus are So elements, just say, the encouraged very seen we've foundational always respect restaurants we what far with

hear. $XX to if plans that to to you money. wanted about you're willing for you ask the of had new authorization good as and and share repurchase Understood, any share well million, I spending thoughts about

Well, we that But as it as into we as we far that be point. on don't that to an to really too want anticipate window I back when any an option that's add the have open to obviously much and go open, specifics time, other this will option. how, I as be more anticipate up, that. the and get certainly forward. this any don't comments The But particular at once window detail at does to the needs to

also swine been issues fever demand seeing supply year what last Got quarter, me. little it. with of the ahead last in on given and realized but we've And of was I have saw sort the thing what the in marketplace? you thoughts updated what fears beef you it out quarter. around, you or other first depends any what obviously saw a on some been thinking that were then And we hearing this which Any may for African

numbers of impact it about Yes, cattle mode. are you we a may been a as get But when that the sounds thrown large on slaughtered I of some in wait-and-see daily talking kind the sound large lot it country, the basis have really be think floods across know number of the of not that the around. are and about producers initially. as

talk in our So partner - on wait-and-see we're do issue do overly quarter. a call and regular become an Cargill We we not is primary the better I'm basis. have regard, point, going the of beef that into kind come concerned in time this we're At focus talk to to by mode. in will term, next that to we this is near that but sure them

to at back are [Operator Mark remarks. closing There turn the for I this will further no questions over Parkey time, Instructions]. now and call

Thank you, Elmer.

While our fully guest we in our ramp pleased performance be our up Alexander's/Grill levels. our line sales not restaurants first results the with until were overall higher quarter with plan, will business basically in traffic J. to and

X As expressed, of plans most these the monitoring outcomes achieving our To limited XXXX. date, these closely traffic both we're and our of to to desired the to metrics to at sales appear the generally locations newer are first handful and softness encouraged related months drive is a of that restaurants, during the locations. we be

the March Our outlook consistent year for in we is which with communicated XXXX. that basically

discussed, we look of we prices will But under compared As anticipate previously be XXXX. year, X compared remain these to we the trends. beef as out that to historical months the the of remainder pressure prices over do first relatively manageable

We expect concepts sales same-store year. in improvement post both to our the previous restaurant versus

look with us guidance, this again for joining year, be the close reflected that we you, again, continue you a believe communicating to morning. XXXX of and second in will the As our following forward Thank quarter. to good

call. At this disconnect. may today's conclude And you this conference time, does