Brinker International (EAT) 3 May 232023 Q3 Earnings call transcript

Good day and welcome to the Brinker International Q3 FY 2023 Earnings Call. At this time all participants have been placed on a listen-only mode. The floor will be opened for question and comments following the presentation.

It is now my pleasure to turn the floor over to your host Mika Ware, Vice President of Finance and Investor Relations. Ma'am, the floor is yours.

good call. and and participating you Holly, today's on you, morning thank everyone, for Thank

today the Taylor, me released our Officer Officer. Joining website on for earlier and Chief Hochman, Results are President; Executive this our at morning and available quarter brinker.com. Joe the our and Financial call Chief were are on Kevin

call performance, prepared our strategic to usual and then will As we related Kevin questions. Joe comments will for open the and first operating your make initiatives

I to like comments, of everyone statements. Harbor Safe our our beginning Before would remind forward-looking regarding

All are and release could management based to such During discuss forward-looking of which filing subject Act the our call, such statements may be factors XXXX. cause Securities should Such on certain and statements risks press Any are items, from with facts. Private differ SEC. completely which uncertainties to the morning's meaning and Reform the results not historical more this within risks include considered anticipated. entirely those Litigation company's items the in actual of described uncertainties

we ongoing course, of refer believes of provide and the call, the its measures may uses the on financial business, to certain review into insight will operations. that management And, company's non-GAAP in

turn And to the with I that Kevin. said, will over call

quarter, years the versus market well significantly Thanks, our we growth we're progress And accelerated making Mika, for the share continued we over you quarter guest and as improve and national good In the to campaign financial turned the both quarter continued and in share on industry. third on morning narrowed joining month insights three first last the versus advertising third as us we everyone. our Thank industry, of strategy. gap results metrics. into our in traffic operational, our our as then the that

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the industry, a As seeing as work the margin incremental so we encouraging more seeing of traffic are from far while know, all on us, lots and versus as And the right improvement result, we in we're promotionally comping trends have we're progress improvements is discounting food. track. very reduction we of ahead well the that

halls to with with teams to all our town these be metrics, share addition the what managers to Chili progress of NorthStar encouraged momentum wrapping from we by are leaders. sessions time up seeing spend our and We're hosting and what thought over leadership are field. did we a executive and the hearing team company financial season restaurant with key you introducing Chili's these meetings, in country, officers the our In positive teams. team restaurant our helpful and in also operators I the we listening with it'd At we're the

efficiency easier, serve better do to asked year more can to changes we the their and to about teams of our have restaurant it guests. for the officers senior rewarding how fun Our operations else and past improved our what continue of make

several brand. up more their at they're the now it intend the managers them. We're in in they They're let they hearing see more of encouraging these some being and in are halls me year change Chili's excited in and stories, and We're I've know to appreciation town future and easier with direction seeing they for telling consistently feel restaurant, also ago. enacting operators improvements had seeking they the than are control one members show of heard, ideas of was ideas listening to jobs hearing out team results. stay heart-of-house seeing very our their about our because the us, control the to believe their they quickly

member industry turnover right culture we're experience and in working. team This improvements now believe member that turnover to guest lets us also to in our our deliver trending into to better overtime. translating strategy the is we're improve today shift that lower We making than trend which seeing back Hourly being direction. team progress right than ultimately in hard direction, guest and the frequency the will managerial are know now levels, investments pre-pandemic, continuing too. is the traffic and the is The the work higher and

by additional is As like the In quarter, the been we're to we orders and last food a make I our improve and fresh also are member assurance the experience. December, to quality model working both mentioned and and members in team team cook received further that labor hot, optimize guests, role guest some investments have to well hours that sure layered right.

work While house, do, of especially we the in these front changes guest improvements team have scores. significant the member still to and in delivered have

and since Three to food and soft hard showcased which strategy more than Oldtimer value. end includes was guest cheeseburger for started $XX.XX Me a of a just of about customers fast results chips new (ph) great launched unbeatable, it. and that environment, years and Cheese on for that March. The our since endless traffic we continued quality had looking advertising while fixings, food. offers spots restaurants, and all more believe but know believe salsa through we meal, for In given not simple, a We the fast the is could versus premium We at told full of meal February our with I all value, abundance in our three superior leadership with value, experience, it that and also macro service to we campaign advertising guests bottomless heroed through drink. but TV a more hitting Chili's that about nearly We ago. everyone of been eager addition hear the first campaign pandemic the [half-town] the casual progress with The is the drive

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are we commercial. with ad to food better price guests heard and delivering a that abundant long quality, sharp we have at like Our team the the guests members from looks We're high executing value with time, every time. win often love the going serving just too, points, than we in that's

objective versus encouraging ran significant we national note in-restaurant TV with of down, to are the changes minimizing strategy as results merchandising that our important those last we trade and the well. to made time also ads It's

on up the simpler we more bundles. drove Again terms, Said $XX.XX from we sales in for, less we very to got we profits did than if than $XX.XX progress. and trade Me more budgeted which meal on had TV good and traffic had advertise. versus down means, more in grow used being While and For mix, got we Three only $XX.XX value we trade banked also

work leverage plan only I ad advertising tool isn't going know windows. and national tools We But most traffic. we we expect to together regular supplement have results fiscal national next Based TV on most to forward this have bursts to the those driving traffic -- our that to growth. model powerful traffic more of advertising accelerate drive year to

us For accelerate our to teams. relevant marketing CRM more structural to advertising CRM and digital We made through I during need our the out messaging. consolidate effective program so drives progress, an of that targeted changes that's frequency quarter program

marketing have and initial to to about marketing direct next Investor traffic channels Marketing and George all our digital on at Chief thinking media, team's working the are and social our frequency and teams Day, more leadership Now of CRM share Officer, We'll national Felix. under the month. drive together George

Now progress. I'd drink like to spend and a few pillar minutes our on food

margaritas On that enough the now we're do a reasons We every at month. main reinvest Margarita we're bar differentiate menu the our Crispers Core to The the new simplification [lap] plan we we of quarter (ph) know happy on Four drop call with of in Every the Fajitas, market, quarter and Chili's execute share end it's Chili's. our to these products the menu resources our can Margaritas. committed making on Burgers, Four. of to we Sangria progress segments. our Core operations them well and this our Margarita spot performed menu the the time, better with products we and so soft-rolled third nobody so Swirl our in what One on excellence Chicken we that hour ongoing earn energy than can is during and

Margarita earning Hennessy top a the became quickly premium seller, that five in a March. introduced also number We spot

full food original the the from our third tempura a quarter lower eliminating from standpoint, batter after mixing first menu. And our was quarter Crisper

and The had re-launch batter historically for Crisper May. which our menu original If our tenders. free a one. is since tempura two batter which capacity, we operational updated batter we've in to in for as Crispy our tempura Crispers you October our four recall, recipes eliminated We breading to with of outsells tempura prepare Crisper chicken

two when While happened. higher is I'm would eliminating eliminating tempura there suggest types share pleased has Crisper original were has had different versus Crisper been business of the the might the X% to we now lose a mix which concerns we non-event. Crisper, breading, from opposite

heavily continued excited and Simplifying dollars four, and later We're we're for progress. a our maintain, taste platters, we're of in train that new profit. Mac in less enables breading Investor one sauces, have will of month. batter seeing new for menu are month. to with Crisper those SKUs, relaunch additional with Again, Fewer in merchandising to bulk procedure product moving now menu and and this business five test, launch a And menu up here and you to feature new the important more that in Crispers Day Cheese to person set six drove this new for which down to you Crisper category. this preparation significant next count

while our takeaway The the that, all long-term on moving at traffic you how Support direction. we Center, of Day trial, is metrics growth of to our here strategy plans our excited a you for dive guest there's Dallas, Restaurant hosting excited more deeper working. Investor next the to in month many for team the how business and leadership to to right see the improvements and drive continue updates forward continue to accelerating of is key the to have looking We're give lot the expect in upside will will at lots that I'm impact to we you a after our time. our where experience, I'm into over getting do, business. we're

Joe, will Joe. ahead I'll over Now, to Go through the walk who hand you call the numbers.

more aggressive and of define strategies trade opportunities joining morning create order the and implement our overall Kevin promotion, from to for impact for price you, price reflect to our The attempt in previously and appropriately -- the have ongoing the better a represent us. another release provide thank press reported results to Hey, premium mix support up away to this intend initiatives our in growth. results to right powerful ability everyone The sales move reviewed. in to direction we step ability morning's and good Brinker

comp reported the and for of over billion campaign trial marks the back well of and experience improve XX.X%. time. brand back More broad-based revenues our with restaurants It marketing improve of our relevancy our the restaurant to fiscal positive awareness sales operations, our generate XXXX, needed third consolidated beginning quarter into specifically, initial also total much guest into Brinker $X.XXX into as of meaningfully investment as foray to

price reduced up the EPS sales with line and diluted our combination meaningful year. traffic of from and significantly a quarter reported mix X.X% X.X% the brands. activity virtual A adjusted promotional discontinued was the quarter XX% top brands Both for positive on positive from coming in for $X.XX, lost by Our last of reliance powerful driven at outweighs Chili's X.X%. growth

negatively of impacted Italian the part points. year-end. less restaurant As brands simplifying removal by In this our recognition are of environment, in XX post-COVID in fiscal virtual we and year-over-year process approximately third quarter, operations systematically classics out a we basis phasing for the traffic demand brand, complete will the Maggiano's by

strategy, most quarter. guests good topline of price traffic, positive of year-over-year, This An an sales return X.X%, the growth On Maggiano's important menu the is reported also quarter, effective up positive improved additional of by driven side channel. and was through to traffic a opportunity XX.X%, drive represents our throughout check positive experience. trend trifecta solid guest a with also of room of dining traffic to add-ons and the mix X.X%. Chili's X.X%, profitable comp

margins. to of middle turning our importantly operating sequentially is and P&L Now Improvement in the margin quarter quarter from growing restaurant year-over-year. evident with the consolidated the in our second both

consolidated quarter was XX.X% margin XX.X% a operating year versus Third ago.

costs. in favorable mix, commodity XXX experienced compared favorable expense favorable our impact as basis points We by restaurant price menu last driven and Our largest beverage to margin by food offset and quarter, was higher approximately third to sales XX year's offset X% higher was as to percent of Labor X%. produce. line beef compared expense approximately by poultry, increases basis commodity of inflation favorable prior-year. growth and wage year-over-year company's rate inflation a Top points led

One invested basis member team and points into labor are experiences, Chili's for overall impacted thing note, our expense model difference. we approximately hours to The both to the by improve labor hours quarter. guests a XX making the incremental additional our the

model are supporting manager both and in now efforts, levels. dining new combined helping pre-pandemic turnover Our operational exceeding improve the hourly simplification and guests the ranks, in metrics room labor with

will investment. restaurant credit return Inflation due unfavorable and property impactful, utilities, expense it's in continue to beverage should with remainder the particularly such level XXX across as food as said, and of and Restaurant and number in maintenance repair up lines was present a as move to we by system of still of mix That fees, also incremental price the improve and expense being our quarter year. were inflationary remains a Overall, the to ongoing need create basis in fiscal was advertising and has the broad-based our forward year-over-year we our cover construct. costs expense, tax environment, to points, card rent. through

flow our Consolidated a of EBITDA quarter totaled $XXX $XXX and to totals perspective, of $XXX saw cash cash operating level $XXX to normalized a of cash flow flow operating bringing a million From cash more the million year-to-date return generation. EBITDA. and totaled million million,

quarter restaurant million. pace, spend on improved totaled of at Overall of end of our as the to a the taking increasing proceeding improvements. investment expenditures the capital Our third supply are chains advantage higher we outstanding and capital close in $XXX as level is somewhat necessary gap equipment needs,

our CapEx We guided million. $XXX previously range, is to reach the our expect year which of full spend high end

to past brand Another Chili's capital with the brand. new important development, opened component be new We very a opening is our all which this weekly continues for Chili's sales. spot restaurant spend quarter of our above three bright sales strongly average

restaurant year. a brand. is the openings The response and is drawing our plan of new XX to our bring fourth locations clear will to to Chili's, the great quarter, and open for new see our to six to this additional is power which testament During to us seven relevancy an iconic fiscal

drive future. our our also for we the that the to I financial not and establish both team allow topline previously to business guidance, meaningful time experience are we brands a forward but in our was head power improved things financial affirming final move earn dining sustained am to and In to close, confident experience mix just right as the annual to years in provide are will strengthening development our ahead. our all As improve pricing for results aspects enable over the from perspective, and member we guest investing third quarter. into growth successful in quarter us help a provided to

forward morning how fulsome Investor a that look next during a our discussion snapshot coming this provides of strategic is While we Day. more initiatives together, to around month, our

to the back Holly, And call will with turn I complete, comments over moderate questions. to my now

this Instructions] session. poll while time question-and-answer for [Operator At a Please be we hold will conducting Certainly. questions. we

today at first Your David ISI. Evercore Palmer for is question from coming

labor how up were front, on in restaurants hours Chili's year-over-year? question much A the Thanks. labor

David, I about was what item. within we think points labor that you -- basis XX impacted line gave

me, So basis hours about about a of in don't front impact. have -- the specific points but was of XX number it it's

outpaces whether front? Thanks. reinvestment list best as Well, that -- I forward, shifting in you the like, about wage look if reinvestment? hours I price inflation inflation, think gears, your would labor guess, marketing how that be I’m the Okay. I'm perhaps your likely, going on that and wondering more food perhaps food your What's side does, particularly it think some seems or on what's

Yes.

is prioritization and to Joe it about thinking we're to I'll this defer how provide if So then any context more numbers. of on kind the wants actual he

accelerating over we on years R&M improvements during and number there very are the So maintenance on three deferred the focused based one, had some we COVID. last

And so, labor lot Number in to going some incremental anticipate there. two, a on are was that spend labor, although in changes don't having we based us the of more investments QX. whole made I into

So foray to success, that to about more XXXX into a for excited fiscal that it. then now plan did flow through our getting is plan. will full you March, into are we our year year. big national right? do in, advertising TV are We into thirdly back in and we have those very be is advertising often it year Where investments one, first the And incredible baked next

the order prioritization that's of investments. of the So thinking we're way about

much. very Thank you

Your Morgan. next at John question Ivankoe is coming JP from

Do Is get $XX.XX chicken Oldtimer price products. you you a really, to that you. variety advertised are it on of generation, opportunity burger you fast QSR that and it promotion about the excuse Is thinking and consumer drive the casual. that with Obviously, in how How Mexican, that three yourself? resonates, younger in think really has of an of you been is Thanks. much is feel have question a of share decision? segment? decision? the can kind resonates customer burgers, even The Is other high-quality you trained I kind really for Hi, decision? products And -- breakthrough we some you doing are thank the consumer? the me, and want with some promotion guys mean, quality crispers. a with presumably at that -- to younger it the to with base do generate best resonating grow segments younger

Yeah. Thank you, John for the question.

you're go value, daily you in burger I for, are what core just that, drink. I'd It you've think half-pound in it seen right? try is a incredible what on and you salsa Chili's bottomless get to you last is it's you get fries, years, So get products, you I it's fried also the pay seeing of the the but and freshly And probably not the all to that and and to customers pay chips encourage yourself. willing in are salsa it, bottomless last the is a unbeatable XX years almost restaurant made but different trend quality and few for high a at really you items what is five and that get right? is great an think categories, morning

even offer. that market guests is a in and late we turned think turned throughout when that share that for we off we mean the when we And then throughout high that's very, March advertising saw repeat on coming and significant abundant April why February meal. in very I saw advertising, quality acceleration I

they new on the in experiencing either looks that comment the seen was frequently hadn't they've in If got -- members to the the and guests, advertising like that while you were team a what the or serving when actually had like, guests and put advertising. that were, wow, me, we you're food they our talk food

heart And time. house these simplifying labor so, some that amazing making sure consistent of experience. having in make we then of they're we're every I to an and experience And have a that the think investments

in to starting that market in we a throughout you're think acceleration I seeing are share April. and both March see significant and payback pretty

that, in Yeah, and John, playing the in spaces. right would again, I we're just add

So are core demographic, are dining. at you look folks when major our across any equities where

And so that gives you the the breadth opportunity. of

they towards marketing demographics and also I to the campaign absorb as need it broader-based think move that differently, how to our a can media. touch speaks

and George March-April very on So whether in his to want not campaign, a only effective people different designed it's things hit social to but air from do based the to spoken speak the team spaces those standpoint, which digital saw or putting they aspects about, very, the ability which timeframe also streaming people that are to where or that channels. that together, it’s a very the to they relevant them be not broad are media we consuming hit in campaign

well very So think I together. those go

example that the in is, launched mean had we that on million ad I original social views XX TikTok. on only, Yeah, of we the

with sales? people But ages. I is traffic? So, driving share? The resonating of at mean market it's day are Are yes. all we clearly the of growing Are we we the end answer driving

got it. I you. all right. Okay, Thank

next Stifel. from Your O'Cull today is for at Chris question coming

Thanks, address good less Chile said, prices companies later are how shapes pricing of increases planning additional take price started going be this later many not I many menu need the competitors, additional the this to thinking challenges. just the curious of restaurant to guys. any more so raising or or about in to year. know promotional to take pricing your its than Kevin, they're traffic they cycle morning maybe some even,

thinking share Feel now. our Joe free you to that me add. on let so has then right And Joe. anything Yes, to

ahead pricing get was and I move. think of the that good did a we So,

John just needed us price allowed we've like protected $XX.XX about. put to some that's asked business, think back -- investments core also in points, that the I

definitely lot come enjoy restaurants. pricing we've into has taken to years. last So only be that to of the customer of that able based just three a pricing, have But some They're amount for whole certain that. to barbell also a our over missing money strategy a we able on

forward. I would say going

that very we it of looking is have now. innovation on that we're closely. see think based pricing can Most right at we the I

a this a whole drop. Crispers we for So with have new menu lineup that's coming out month, new example, later

the have to corn able six four, on the premium our upgrading a be that mac the is to restaurant. be into five, to of pricing and we're a within a sauces that like we cob, bunch for to we new You'll things get that going cheese, willing pay side lot count, not are guests so feel initiatives. from it coming much whole a those into even taking are more and We're really

is we showing So, continue value and in market. the key we're thing that to the move the then value needle as leaders on up

ratings And grade when value the share look some of so you the us traffic far, we're the guest then look the market making strategy at like and when are our at you headed tell look and right claim at worked. data, These in moves you having direction the on if and pricing metrics all that which food strategy has in the scores. would barbell improvements

new definitely the that systematic add incremental we'll definitely pricing process of as from those that. into kind of come in I -- We'll I a when amount point we we menus move start lower-single through -- range. that of moderate three that digit just to down flows have as fairly a forward move times come new moderate pretty and much the to menus be expect two there'll this Chris, would incremental we will And Yes. to year. pricing

and understanding optionality components that and look a now menu have areas lie different we how more be to around some pricing surgical those where price the on them. little at we'll about making in also sure think really more get that think we're I

through maybe into of So next rest through consumer folks F part move we think kind yes, as higher -- to of this carry to through moves we'll other the fiscal XXXX. of earlier of year year, price, as is year, which incremental fiscal definitely we last a kind will more of from those moderate the than some lap the we level start the important as but move the price I

impact been on on company a Joe, the of I business. then, what wondering the And sales core could brands. from helpful. de-emphasizing comp that's the know just virtual been quantify has focus more the if Okay, maybe was you I has

that and quarter, side the offset between focusing Yes, promotional I activity XX total Chris get Chili would removal it of you X% a little on was you'll of the as towards but side equation the X% of the the has in around the side of that bit see and the equation, the put in that than the mix are where grow equation within for specifically next quarter, trade promoting the particularly more end before. again we traffic

Yes, Chili's it's the over there's essentially a example, June, you look you if discontinuing like the at $XX. average of we And important is are to for by it's like little note, like, Maggiano's that's ticket then $XX, that the classics take Italian end margins like no comparison.

over addition see to marketing to help, profitable. our as focus from to also more brand going Chili's, in dollars just lot because help, MIC it's like sales you're think shifting things a bigger it's our about we So and a margin

guys. That's helpful. Thanks

Chris. Thanks,

at today BMO. question is coming for next Your Andrew Strelzik from

that were and are of there, said testing, change investments? those think a done thought I labor in you kind to on investments -- expecting questions, you I good was Hey, at was not guess to you round is understanding said answer questions. were for morning. you point that one make that your you a labor one around going that of there My my types the that to is be you the comments different Thanks labor, previous first the of some taking second of

what is, was investments the referring labor I in to really think we this Kevin started last quarter.

couple through of So the quarters. next there'll you as be on basis new quarterly go a

I we're pretty So think fulsome.

But tweaks. and we could of and possible be kind continue at Andrew we'll in investments there as the major go system will We to them annualize look just labor think I forward. the now are

place on, great. in on labor labor? all time, side from a Can in the in And you you last like It some your to better and other metrics progress see wanted sounded last of terms Okay, the with talk on and perspective seeing you're progress quarter a is about performance. improvements my just hourly. were manager question much then that the the

respect you can Thanks. with great. that just So would to anything be share

Hourly where be pre-pandemic. way we still the turnover has it versus continued not to improve. to want to It's bright all to

So we're helping of continuing we through labor, more like add got other server does impact the work to as work -- that that. that there's on is simplifying to things that that. earnings Part restaurants we've challenges and is

the I the say bright So way on on where turnover, trend to continuing it's be we're in wouldn't we right to hourly although all to direction. want

improved. performing? it we Food at year From look you it's return, that that not a If dramatically that's ago, also key it at versus intent to of encouraging, guest versus guest at metric, grade, look ago you you it's a QX year versus look know the metrics attentiveness just labor experiencing problem. versus and how and all quarterly. And so server have is

just QX us. that so direction. right in And you're for And note, usually do tells you traffic time it's a significantly high headed

that So would we metrics, seen be a it. a just lot typically headwind haven't and to of those

time on clear. business. guest be tailwind some that's and experience levels a nice going of in And the improved the culture for change to standpoint. our So sea I There's think it's inside terms there going over restaurants that's very is the a like from

hear. Thank to great very much. you That's

next from Your at is coming UBS. today Dennis Geiger for question

flowing operational but about the of just little thanks most share and on just a the work marketing on stuff, already, to the improvement I about timing commentary. color as on the think a kind quick more that? thinking traffic a benefits these the you of kind could things coming more a in you've share Wondering of And sort you come and thank the drivers that's some of the the traffic just recognizing the you're through but know impactful quarters as of benefits of Great, menu, you. a a how on if quick of for what the we seen anything you the view and over drivers on refresher relates lot maybe of it? you Thank lot of kind give it if bit could as of Kevin, reminder the tandem, lot

question, thanks Yeah, Dennis. the for

the with driving. the we an traffic move. like see about One and dollars business two there's intervention acute make like drivers is So think traffic to we that ways like

exactly advertising, the movement, the and that's And advertising. think we we week saw digital. we where even started and the movement, right? TV so the when And new we saw So significant TV on started then saw weeks the We introduced we continued we right? put I of what some campaign, four in that beyond

TV the be, want the to it kind we after traffic where the continued market. So that when money was that industry of to So put versus gap you over right? be see into we

how do of both can't in those bursts share traffic here movement with campaign. give to you we right? we'll significant those next We'll competitive. because see we do we're think to that Investor Right, -- expect and sales what to about now on media had that The we're thinking traffic get so, a things the those. it's year. we next for you four give the but of did, for and expect more and is one and we way driving more I each timing, Right to planning slug and you three And you're about exact how about Day. think details was We if so between fiscal

It's we that those. both to would very week in, that shots on the X see because things you traffic of traffic guests then make -- those server CRM that hard they TV, behind pinpoint got So tailwind. put lift Secondly, growth should to those hey improvement, you immediate the it volume, Over are more a experience had they saw this put time things traffic over time, time, in trial right? growth you from a would intent dollars you you over so things and place see you expect and you've you to also things see have much, just And problem, a turn food just right? came acute see right? higher typically be more the also the have experiencing percent you guests But the that, TV more the would attentiveness be a grade, because experience. of like the return, fix off long focused and not keep the you to on repeat, when program in TV, maybe TV as more of and extent drivers when because aren't better then driving we like profitable, tail after you will

give I we the traffic, long-term to hard very them. and building experience amount estimate to but the experience knows, going an you of driving directly you're guys from get on does the think how industry the in how That's to about long-term correlate brand think better everybody traffic the your

of it's are kind that's a things knows that business. everybody to work I because true the and on we growth think I that's in of to that So industry put hard the long-term model. for know frustrating need But in the those

commentary That's you of seeing customers into, of one that and of customers in I versus instances to anything behavior, related frequency I don't share to additional of very lower some new changes else on brand? made some the sort any know the with Kevin. the to you've all know coming of talked platforms. given what some customer it helpful, Thank sort lower income. as sort seeing the more, if in out your that, about income trade you're that increased brand on mentioned you And from you. Anything particularly trade just

Yes.

prices started QX for customer mentioned over quarters gas change like of end we previous in while any now, going had We low almost and last off, fallen it's probably where on year haven't had a been year. with the some a it of in that

seen So June, May we back. haven't really and call them come it

guests. same the So seen trend that kind for year it's kind on low same, the of of a end been we've

certainly out, are the our when March seeing right? didn't really we came we're news see numbers in seeing there you significantly. saw in pretty we the banking pullback, around So industry we was We started and guys because in that are the industry, what share it growing

that same So, off. advertising growth we after pullback, think good, continued and is we even so us share share seeing came gains that March helped grow keep see April didn't said because I really the the that like seeing, while, the industry throughout us we're of but I of part TV felt and helped those then share some are experience numbers that really the

that's our we other haven't than numbers customer in we're change can but seeing haven't the you we I tell change, the market yet. a best in So seen the seen it industry

Very helpful. Thanks, Kevin.

coming for John Your Citi. today is from Tower question next at

on this for Hi, Karen Tower. is John Holthouse

-- Just then, quarter Could digging missed a play think little maybe going but and of bit off-premise be the sort prepared the role, more about are might impacting channel? you to into for the of qualitatively overall delivery maybe but brands off-premise And was? to in channels? just this mix virtual And I weakness what versus the comments, order stuff. the how ahead just any, a if pickup macro some delivery

was about and and off-premise both the Magliano's Karen, steady delivery pretty in XX:XX for XX%, go. off-premise Chili's for there So hanging breakout to and XX% so between around was the still

-- maybe front more you And maybe at needing then in on a you're think about a of some for there dead this investments some labor one horse changes. -- point the mention was of comments the sorry beating here you At do prepared house. where --

to you lower, wages, grind about just really if where of is where it. per it think you've attached server but still idea that's that dollars of be could kind many to that -- you to terms that So talk and in of the and there's tip gotten were might needs tables not you because maybe

labor to to -- I self-funded look simplification getting it that business, at changes, of some I as that right? are of additional changes, to hours think improvements reinvest house. the the house get point in to there as need as but doing put we are it make some do be but it anticipate is, back to going when we're us at model. to front needing the is way into the we've we to the think the think So, I up seen in there this don't -- to making get the be they're strong dollars are about we changes to going heart the

you in think in some to the are better, kitchens, We've scores, you our a pretty go restaurants, scores house improvements. It's seeing right? way the into just in grade based is it run. feel but if we're all We front speed easier the food could seen in everything So of bright. the our been difference better to of improvements much on house, heart the restaurant palpable hasn't

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people So and need more be don't I'd actually to and but with I shuffling working front we're put anticipate dollars clear just on, transparent responsibilities. what going you be the roles really making candid to the about house, of guys on in sure it's have about

Optimizing.

thank Great, you.

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

same circle Hi, on through know said quarter. the and page. thanks so it we're traffic to just and Chili's the be performance I recent the morning. magnitude the on for industry you I you've the all But wanted the relative willing months? improves Would the back to in of quantification good reflected down to provide Chili's or X.X traffic either quarter improvement monthly some in here, seen you

that relative can versus share industry. Well, the I

out with what's pretty there. I consistent think that's

So in industry. points over January, it continued the little we've April. X versus was February, was a we in X were and seen and X in In it improvement March

if So, the market trend doing. improvements pretty the share then what imagine that dramatic made the and the on think shift been you traffic. versus gap in can pricing industry And in we've has you about mix business,

we've very, advertising the improvements especially in April, seen significant very and March behind campaign. just So,

that Kevin to negative traffic Yes. the And Brian, are industry gaps the just the through those walked traffic,

is And to? helpful. Blackbox versus very you're that comparing That's

Blackbox sharing yeah. I'm Yes, numbers,

still direction of key expect? of kind move of in labor? XXX expect much a Do you on the on inflation second margin your margins store super I of that's Perhaps, great, quarter run provided you you wondering Joe, couple Okay, through were it QX. us helpful dynamics last other guide. the what relates to half as commodity some in On was around dynamics could embedded helpful. some OpEx pressure you guideposts that bps and if of in level either

think percent see kind what the through we I the a relative on what and continued expect Brian, beverage company's I food equation. side of move sales you, is would as quarter, of improvement this to Yeah, of as

is, down improvement inflation margin that Our rate a to percent XX probably lower-single as are food expectations a to I as The X% expectation to And in other is, the to will be get and relative fairly performance this XX tweak and they to beverage. there there, on categories that as of, range, the of the have -- fairly then sales. basis a company kind a continued quarter you range. positive them two in digit you'll commodity impact here let's stable frankly, my relates But have may say stable their it points. probably X% expect

So there's you. some good guidepost for

sales, type I that. Yes, that's then even Me, include about platforms you. ask value you thank now, it those ago to of constituting, Kevin, for curious value was helpful, you seeing and perhaps Three specifically Me between mix you emails talking think, XX% the And quarters For higher has Thank Three currently some platforms maybe months? I'm and And I to $XX.XX and of would For maybe declined tiers? we offers. are wanted other you on very were But on several that the a percentage recent just year, if in where what

So great it's a question.

about quarter And I from if it being last quarter about So, last when -- first started. talked XX% we XX% recall you so

we mid are we in XX% the sub This XX%. quarter are

with So March you'd say, is okay, a is with digital. TV that promotional on given continued and in value It air went improvement. obviously heavy we and

were TV As and we advertising the within That's based did. $XX.XX, far bit as on that we so a changed $XX.XX peers, $XX.XX just tiers. one-third mix the the at two-thirds little

ad. significant. XX% to because that a we think that's really from is encouraging thing, $XX.XX the we values not different everywhere we And them so of find with the tiers. we than XX% merchandising seeing the tier, we certainly about very higher And great $XX.XX you the plaster the when come XX% restaurant, went at is is a I which which strategy the you advertising then this around in all advertise can if TV in So time after balance, in have $XX.XX and had don't last

make but that's because the to the putting folks on windows all want we're buy up deal in it who come table price not are shouting we the to find very get those certainly clear the be going it sure You it rafters, came find them. that but the tents front able to and the can able heater deal for to to on put they But but that, or in anything full that, just in right. menu, of all the not and not from $XX.XX

much top better from a line. line, our just yielded expectations not from also bottom advertising profitable really that's So but exceeded result the the really and it's

color. Thanks, great That's pass along. I'll it

from coming is Carrel question Capital next Your Chris RBC at Markets.

Hi, thanks, good morning.

you're seeing prepared more could focus that's business. but part business your know margins? area So, as you, explain what there terms a Kevin, extent maybe the that you're bar maybe think, what of for been a on you touched and mix your on briefly bit I has but getting that aided in remarks, what of curious it, seeing in to from any I to changes in you're

Yes.

as year to the versus PPA the attention from sales of both the we're dine-in up quarter bar, ago. bar. pretty incremental check also this as traffic percentage certainly to well was So coming mix the seeing What's helping significantly is

more than but. go mix way attachment brand have that with So, our going alcohol helps be virtual our to virtual any dine-in traffic any obviously alcohol is right, alcohol brands doesn't mix, because to to

all So the headed right direction. in that's

be whole also will of have is front Margarita. month the bucks have pretty on the I as that premium strategy. new significant page main you the promotional the a menu alcohol innovation We're can update, still $X we'll of coming the going to Margarita innovation get with $X the Margarita margaritas depending the or lineup, say about for menu we bringing in

very had tequilas, Margarita you if a premium $X, So in were a tequila. Chill's of familiar with we of month the those for Patron month, it’s our for you last

some the know more bringing be is to pay going which super brand, we We're forward exciting, something for out as that's because in going to [indiscernible] premium. super Casamigos also willing guests they're

going you're a and where Rocks margarita and a see like very skinny XXX-calorie some being which customers a made menu to Teremana The So hit with want Tequila the margarita premium Blanco. it's is -- things

things PPA, bar with good some help the is I some the So so of and a mix and bringing progress got we've excitement alcohol to exciting think into to think I coming seeing but accelerate lot bar we're and that. going innovation

margin think maybe ago, wage bit beyond you a of labor couple just what but XQ you're a trend And from minutes perspective, kind expand and kind of touched on, the XQ outlook on in maybe Great. can then a of Joe, thinking more you there? inflation Thanks. I

Yes.

of is pretty I into X% or going take as think we XXXX but -- Chris. thought on it's inflation. guidance, give macro improvement going are little, And that wage see to give in continued head seeing a remain a we range, kind being process rate forward, slight I'll you I that lower our level, steady what improvement --

I is kind its range. the think now restaurant work staying we that of forward, X% go but into right systems to as of kind that in way going continuing

for that. much so Thanks Great.

Your Wightman from next Research. question is Wolfe at Fred coming

question. to morning, good maybe for just follow-up Hey the the wanted comment. thanks Chili's on I dine-in guys,

in to the similar the stats inflection that I I'm as guys wondering was you quarter. positive said that throughout sort there that market was followed if big that think shared cadence similar pretty March a well? or of share you a pattern

across the It was consistent pretty quarter.

dining coming beginning channels started small did. campaign of through headed rooms to March, obviously, the remained actually the our it in see more expect, that with impact uptick in a we at as all the we of to back of So would kind to improvement quarter and guests the and across the you

driven by but to coming. the -- good solely That's so beginning campaign, campaign, the we it -- predated guests see. want that's that's our wasn't where the So it of

last expecting or still I X% at estimate you Makes sense. price. on said has And to the then that year had exit think reasonable changed? quarter around you that were Is that

a I data we will probably of exit X% think be closer the it now. bit to kind as looking right little at as,

you. Thank perfect. Okay,

June, We everyone appreciate concludes seeing at our to Day look on and of forward us All many Investor our Xth. that for today. call joining right you and

everybody. thanks, Great.

you. Thank

concludes This conference you. Thank today’s call.

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