Brinker International (EAT) 30 Apr 242024 Q3 Earnings call transcript

Good day, and welcome to the Brinker International's Q3 F '24 Earnings Call. [Operator Instructions] 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.

Thank you, Holly, and good morning, everyone, and thank you for joining us.

Here with me today are Kevin Hochman, our Chief Executive Officer and President; and Joe Taylor, our Chief Financial Officer.

quarter our earlier website third are morning our on available at for were this released and Results brinker.com.

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

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

of items our the within on historical entirely call, not are based statements Reform Litigation management During Securities forward-looking Any Private may should such Act which the considered discuss meaning certain items XXXX. be facts. of

of filings subject All such those risks statements uncertainties described the and the could which of cause the insight risks refer SEC. company's measures morning's company's on Such financial non-GAAP ongoing results the are include from provide we certain and management to call, uses differ this and more its with completely release that operations. in uncertainties, to factors and into believes will actual to And in may business review press anticipated. the course,

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

Thank experiencing and were to progress. for we and back Mika, see February March. in time in business The and everyone. industry of share you another We morning, good we last joining us strong the January, immediately bounce spoke challenging results from weather. Thanks, was as quarter our pleased perform well

guest the we member by what's for we the left QX is for to profitable increased from TV, continued Chili's weren't sales more and and and year. that the again the by beating on been with when sustainable in industry last media effectively quarter. outperform results And very we've from working encouraging years the entire when launching results and almost the March to experience on we in X% February, And industry traffic These team now driving while initiatives. are by strategy Chili's, nearly improve than X% X strong traffic driven

focus guest with progress I'm making. operational tailwinds and our the on real for combined driving traffic their improvements the creating business. the of experience proud for so initiatives Our are they're operators

KPI tracking Our X.X% dropped with began is this record we the problem, dine-in GWAP main where our metric. dine-in lowest quarter, since to guest on which a

members' to XX have who want been Vice recognize quarter this as front. significant another regional from still progress operations as industry-leading to the as on and make do we We delivered I have work turnover. and guest, easier, rewarding. jobs our more food manager team They Presidents to hourly fun we to to to deliver well great every well work leading of as sure more continue our know turnover consistently make hospitality

areas us will the a into next fourth year. remain during for fiscal focus and quarter Those

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Next, progress our I'd marketing. like and to about on menu talk

Let's now. simplification start both as the which new restaurants important news segment, well as has the initiatives product with burger hitting

burger with pound Just island our pickles red on X.X burger, and thousand It's bun. onions launched yesterday, brioche new lettuce, big a smasher. dressing, the we nearly cheese, delicious

fresh new will Value time $XX.XX Me regular limited for for on lives our Everyday available we X as but This platform. burger menu, be a bring For to on news our

Chili's we traffic, To unbeatable way a incremental have about and awareness drive fresh value. to talk

started ads and that frustrated the as literally and superior prices. consumer we and conversation hard-hitting yesterday. that fast has value, a social foil use of demonstrate is a into by Through insight the entertaining tap media to food fast been Our Chili's watching team ads, food those have series

been simplification with the teams big smasher initiatives two bundled excited also for launch. restaurant I'm that about have our

For X our is value secret from us one Me mix soft the our pantry. a first off burger sauce which remove eliminating and The manage menu SKU helps

our And now and manage consistently different for are and operations. instead operators the lowers replaced This so a patty patty The burger it product is perfecting lunch execution which eliminated inventory removal the it guests every cost our of the food SKU. simplifies to patty burger one slightly existing move with burger with gives meat, specs, skinny X.X-ounce of lunch this SKU. double burger more second the We burger two having great cook guest. they're simplification that features

Nation's our Another XXXX initiative List. our drive being we Felix, is recognize recently be Power I traffic. News want Officer, at to advertising and continue ability of by the for named its George Chili's to encouraged Restaurant strength to Marketing Chief

of award increase consumer-centric to team the innovation, work George's Chili's. relevance he the as well The as his leadership are of leading our recognizes our and advertising and

our efforts, reach ways team addition find the up national to and continues In to advertising show ways in Chili's for new to unexpected audiences.

Daytona general example. our team of is recent win the with fans great base. XXX Corey's are NASCAR car with fan and big Our LaJoie's one Corey driver a managers' hood running sponsorship on Corey the every on our NASCAR NASCAR for sponsoring in car's fans complete a during popular names was Chili's

what season. our continues Vice to of While the Operations the meeting our they it, when in to marketing operations team raise bar I've choose on. years, team with on our Based whatever X set on obsession focus This back. the drives complete fiscal team the our needle powerful have 'XX seen move restaurants, priorities is I we'll and traffic our this bringing of confidence past We're gets into part over the President planning finalize strategic their goal. week fiscal 'XX after guests

up and encourages far. we're our business making a the great strategy our us working been sustainable The the long-term strengthening ongoing To are business, for core close, setting is that investments us momentum in so growth. year it's

Joe Brinker's off last over, Officer. script say big as as something Before going I call the this I'm will to go little a we to have Financial call hand be Taylor, here. I to a thank earnings Chief you And wanted here,

go that drive here beyond recognition. called something have our that people above-the-line that our and and strategy for at We Brinker priorities. above do We

And XX bear seconds, us but Joe so been with for with for years. just me XX has over

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for you me thank seconds. XX giving the So

I'm it And over Joe. to with to turn that, going

Well, the comments. thank I appreciate and Kevin, you,

And such so be have great to too. the last call, a call good

long-term good of continued further release in our morning's in and sustainability press morning the our of brand's progression our this The to So solidify strategy. results performance positive reflect belief the reported everyone.

nicely above growth, averages line included operating This top industry well sales solid and comp year-over-year restaurant margin. improved quarter

X.X%. In fiscal with positive billion total revenues of the of consolidated XXXX, Brinker terms $X.XXX reported of the quarter sales specific results third of comp for

for Our Both mix Chili's was positive negative adjusted top comps for with $X.XX. by diluted EPS sales coming line offset at the traffic. the in growth reported quarter partially quarter, brands in with X.X% price

traffic dine-in the positive delivered for Chili's note, particular A quarter.

negatively Our continued move and deemphasize to approximately Chili's quarter. core for by virtual operations dollars redirect support to X.X% impacted our brands the traffic better

the addition, by positive negative team traffic and an progress X.X% comp are in are traffic. future reported partially great offset particularly estimated guest In Maggiano's sharing the look weather impact. dining focused Dominique mix, to in X.X% and improving had driven forward on mix, offerings more menu making room. sales, details experience We by price that calls. negative and developing his in and

turning margins. Now to

another and saw environment. beverage the margin improvement growth expansion improved XX.X%, quarter meaningful operating operating cost line an driven Restaurant primarily quarter of year-over-year point third basis XX restaurant and year-over-year. food by The an top was margin, for

basis Our Top expense line by a compared sales inflation favorable menu Labor as was higher prior as wage and price food mix. XXX quarter favorable year. third growth last company year's of and beverage rate to driven percent expense points to compared X.X%. XX was offset approximately points basis of

prior the An improved two year. flow invest an We expense largest versus in the positively ROM. continue in XXX spend of by component of greater advertising for restaurant the cash additions reflected R&M in of business operating quarter. impacted to levels during also and points this The basis performance to were increase the the quarter, increase

up level year-to-date million, Third quarter $XXX our was EBITDA million. $XXX to bringing XX%

while us our Our costs. brands significantly in to reducing also flexibility borrowing balance strengthen manage leverage flow to reinvest cash improved more sheet gives generation and our

the quarter, IT capital For restaurants, and to $XX capital systems, existing both approximately updating reimages restaurant million improvements expenditures, with at new a recorded development. focus we of brands on

new averaging fiscal nicely appetite quarter, weekly earlier average. are during our to sales, $XXX,XXX for two year, openings the the than market. new These, both restaurants guest which coming specific in their with great to opened of to good more We off demonstrate continue along starts, brand above in Chili's Chili's

$XX the credit outstandings repaid further of million during We revolving quarter.

provided release, we at X.XXx guidance. pieces updated ratio annual morning's Our our quarter funded specific this improved of to previously debt-to-EBITDA In press end.

total year. of on a $XXX billion. has adjusted revenues to billion the $X.XXX million now our be for expected the an the even be to and increased And to expenditures annual estimate range to are Brinker's Capital $X. pace fiscal to are per for year of fiscal annual $XXX between current $X.XX range earnings for $X.XXX share million in currently

just was consistently a excellent leverage ability marketing sector. the from perspective quarter third to broad-based points of improved also successful our price our value restaurant close, dining to operations, across demonstrate a not variety and but casual In outperform financial

as period would ends fourth tomorrow, our these shaping which quarter, the up of I a themes. first note strong very continuation of is

of the We momentum year to our for are this quarter year intend operating plans into leverage 'XX. fiscal performance being the developed and carrying excellent fiscal last and

there will believe for that to members genuinely comments for the are to to results turn And times with our guests have. team complete, back away. take excellent ahead translate our it our questions now Holly, call and might I I will you moderate our Holly that exciting brand.

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

chapter. congratulations the best and on Joe, wishes next

you. Thank you. Thank

do know its often? at are the to this But data recall levels what know I brand more brand have the awareness to groups Chili's unaided consumer starting Kevin, seen improve. has you point

data. We all have demographics income we're Yes. do now. growing level in that that know don't We of right

Chili's. profiles, at income all more look spending all they're across you when So at

awareness. unaided The that So we thing feel buzz level we standpoint, we an really our is this that good we've a this, have. about to past quarter bigger we about From guests than on that's excited had ask advertising about seen a called good they that. basically name were see what's continue we Chili's highest in of since in weeks ever through dining, saying just third-party often that you've tracking brand they're heard we the progress good started things more when few

So that in thinking people us good that's of are very a encouraging light.

what's And of we We're with is of have. I complete we're experience I dialogue on superior meal. you're competitors. some showing I our delivering value, it ever a think than really a up think big think that strong value at better hearing part from the a happening

think and I think because that's value you're service. all great wants And income why I everybody grow great seeing demographics

So that's you can now. right what I tell

to and what more I can I get we're our better learn think specifics, going data to share continue as tokenize going right to understand but we more to we're that's now. data,

campaign deals? aggressive value on sufficient national like means draws ad to to the of coming be comparison able Or X months. other do direct in need Me Do platforms you promotions like And more Okay. look that may And be this fast new morning's is call, clearly then McDonald's it Me think to may or the digital you the traffic? consumers, going be with something think to based X conference a you offerings. utilize For the Or the food that's more sounds maybe targeted be you value a drive as with to For will at? message to with

Well, the is yes. answer I think

-- the driver awareness. think still I to And making will immediate So that. of of sure I marketers know just most start we think be got #X building with TV

need to need to message keep And so we continue We to TV. that to on stay continue fresh.

and which food launched we experience We're what is yesterday, much as the hitting mainly food the fast harder was because foil value familiar using with So messaging. pricing. fast everybody a

for them use And foil give easy so to you an it's to relative value.

deliver getting than trying where Casual little out actually And their have having and a they're of food. hour better on. are an is fast experience different a it they're levels day dining occasion of a People to bit it's weighted the point superior different can price you at guests. value occasion. that with service food, more exciting a better for a very But and all when attractive and that do gets

So we to going the to kind that's then that And of to the bring that lineup. -- fresh. keep behind value our And intent we're that's going that's news think campaign. value

I meat, $XX.XX. you're fully drink fries and big earlier. and about think the chips with that burger, talked pound is So comes almost to burger smasher referring That unlimited dressed for a we half unlimited salsa,

chicken just news. and and to new summer more new of the dining, for that guest, juicier then make That's to we're think, to plan easier pretty that amortize much sandwich unbeatable, late continue in For we to going have casual both the -- to way I make X we'll we that bring as and for continue in a make Me. reengineered news fast drive a to delicious some to food and to kind with And and in it

awareness keep after CRM X, bringing what That's customized with Number to we need trying innovation X, we kind we're and that's and can got #X point TV, need messaging into The I to our was, of offers? continue keep to be to So point we to drive. some that do fresh is that. exactly going to like we to think driver program. of your is more get

So we talked XX-month finished about quarter. tokenization, the we which last back

our building forward database we're out new going Now with tokens.

we -- we're up data. new XX previous we're our tokenized the that means behavior then or is guest it out recently, a start profiles a has matching in building that what So of comes that and in months building their guest come with most

-- that the platform. restaurants able have Ziosk in We're to about now do Ziosk. have of restaurants that X/X We're and our

the by to fiscal, finish the expect so that We next this X months. rollout end of

can to And profiles then to we with our getting customize all and profiles. so so build the the going future we'll we guests be have deeper it's out more offers. easier restaurants have these profiles, deeper these of get tokenized data, The

on And sometimes, about it learn might we based just be their communication what behavior.

So I more. agree couldn't

think full to think awesome cost see to a versus And go at guests profile that to X to more of we're a advertising. able with on. I I a to you're have as that's the million minimal pretty that tool market XX million going relatively quarters paid

Your next question for today is from Jeff Farmer with Gordon Haskett.

congratulations big Joe. Definitely a to

be will missed. You

outperformance top over greater-than-expected As it line curious relates the continues to could I'm of outperformance. couple that your the to you've you couple are a outpace seen for to profit drivers maybe your of line question, responsible that point so quarters? just bottom last if flow-through

things, of Jeff. Yes. A couple

the work as the operating It restaurant one down. First, I I is as move of of within line leveragability items down think nice drivers the both you top then against middle you the further point the to. some would first and your of P&L, the some creates through way margin

contributing flow-through. line returning So we've really think that being the But top to good the P&L, pre-COVID, the despite definitely operators, just think it become we labor, being I to efficient I to back built operators turnover us the growth basically throughout that memory had are better come operations. muscle when efficient. And helps able those just to with getting levels down process coming, run into the invest you is more the that more levels hours see is

it on even the you of So think in want equation. hourly with our that some if saw even to this last -- the in -- leveragability, you quarter, of side

while maintain they've labor have We been that amounts volumes same using the using. of can higher restaurants

that kind at existing scales points those tipping capacity see But and hit to model too. as into different volume some you up you the points, You of fruition, system add the move to starting within labor equation. labor obviously there's against we're come the

way wage and our through. levels there's script to different some quarter in So mentioned we've more working normalize are start that that seen X.X%. of any last levels back hourly inflation our to number and gotten was productive efficient my more think I too, I -- about areas, this When inflation traditional you've just

to years view been normal a that couple nicely kind that range to the X% down have X% back more -- in as X% before more that's closer So of the running of and that we X%, we from getting typical inflation. year

So those would of are I highlight couple a the things bigger for that you.

helpful. then that. And All one follow-up to

the that in months? of it test. anything performed platform in big So smasher then as in And relates can you to the how see upgrades additional we terms coming share on might burger burger

it market not of make did do it sure formal We them make test, a a how and big operations like smasher to knew tested we could test in fast. for to we we Yes. the lot

don't hearing seeing that. to So we're tell buzz that can have you incredibly is from media. encouraged social I probably you you PR What in by on with we any the data are guys share we're that the

I think value discussion has both up. amped that the

the the yesterday, we the X during burger. #X topic trending our smasher on Chili's example, launch, in Me were For morning, Twitter, For

mean, burger I to, that proposition customers to incredible have are in think on mind we're know flavor topic a format. we is a bringing very we exciting I most top that but that that additional used for profile that in a So news very guests, value and gets we're bigger much of

exact exact marketing it the So a after very at we're to think weeks. We next exact we time right get with by item right that. encouraged loaded have the the point over at right the price plan X

continue look as to mix important big seeing from value. all bring big what Me then as and value with and to thing to X proud our consumer, continue smasher, expect to manage taking is and the traffic to point. at things increased For got the it's of sustainable our our at margins, macro mix And that's that bring why of proper news the you're right be we is that on. line the well earlier only mean the look on such incredible right? So the margins. seeing X expanding creating most I'm we you So question, you're modest, platform the manage For things economy the when you merchandising, And and Me one the the the we from mix X.X has I with on items bottom the impact seems as and on we're growth gains effectively to while mix items off having menu been very able when really with

is ISI. Palmer Evercore next question Your with from David

It's John think expense calling company, on despite in quarter about in all you going going leveraged costs the How into should in X.X% labor per curious dollar we for David. labor We're quarter with units just only year-over-year. the forward? up labor the the investments

Mika. it's John,

So incremental to leverage one that where labor we is lapped were now we those investment hours had that able major our we all in. reason initial have

into that now So is the built base.

really, that a wage our So about to starting turnover continues pressure Joe then is improve. to rate it's little said, that just now down bit. And come as

And team so productive. lot are more a our members

So helping are PPA us cost. labor to And into quarter. to the the our leverage all do including fourth those different dynamics that continue we'll

similar fourth I some see quarter. improvements the you'll So think in year-over-year

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

to you and muscle follow-up. and willing memory be the off of I store a currently just a kick set right it where working just is, place manager your given level on career. wanted sort is congrats pleasure an Joe, quick It's up important running? sort But your earlier real of years. in maybe having hourly on to would the also you question, to follow with turnover how been over teams

Yes.

is turnover to I at number, our point. above X right hourly -- then around, which getting industry this X% rolling And on is believe, only X%. actually, the has I'm So manager a month the

just is X rolling XX%, the about almost So XX%. at

plays talked the Chili's the gains put through periods on other Chili's you're perhaps driving initial you software just Great. when the quarter the how you some when to last through about about to question And return quarter advertising maybe I started context ask despite through longer my Could lap that industry how comp sustained the sustaining tie TV your tail seeing just wanted year? And market specifically and longer trended more calendar you've thinking the outperformance, has share about and backdrop. that to in these what's the tails, into 'XX? air, -- -- off in also is industry March those industry gap to outperforming industry

Yes.

Brian, industry. not previous was gapping were in year the month versus February, we and at In advertising the we sales industry. the this gapping March, So the advertising either or rolling no year, so were in X.X% by January, at advertising. was we then had and that And was X.X% gap were X.X% that we --

if Kevin, that's bit the helpful. elaborate guess will, longer a those et just I Okay, you've it's the on refresh in the I experience imagine with could snowball on problem, driving very maybe improvements little tails, made, you And effect. what's on guest a reduced maybe that. you us just tails, maybe guests if the But cetera.

meaning as Yes. better the longer we're with We're and lifts the off. advertising tails turn seeing we seeing advertising,

the We talk versus managers about for to most it's a burger are that chicken recent simplification and see think we're ones with their positive the after you gapping These launch. just that have Chili's. in The the continue the quarter. continued be to We sandwich restaurants, changes we're the rolling to to the launch out. continuing making the ideas new been quarter essentially industry and

fry off is build pounding to chicken chicken. the when like we and and a And we the fried which restaurant used we did fillet, actually raw we in the worst it. And and now to have burgers chicken lot I'll make tasty sandwich pound fry one to more a sandwich they're pressure willing So don't is a that you built, great to of lot then bread second moved are chicken zone, That's you the ever the big built is freshly was is of sandwiches, thing make that sit whole found win. that the give where actually sandwich being of we pound have zone and the freshly fried off actually we're chicken more juicier That where on that jobs is so the anymore. not we it the sandwiches. a being example the there zone takes

the about was we burger. Another talked that lunch earlier one call on the

have So manage every on lunch you the the right? we raw to whole of ready inventory burger right the that to literally you day, projections a is sure projections. amount another So beef have make SKU got patties cook to and

If many away. you don't right run you out you too or that you either have have the amount, might throw have to

so on pain X.X-ounce with burgers, And X.X eliminating volume which of have that SKU, manage little member thin one because it's patty that inside of patty we a of into ounces guest we bunch that our for team on the less then going just from replacing other bit to double actually COGS and X.X paddies, X.X-ounce away have were of is single we no actually neck which longer our that because all save a two the waste already waste which goes cooler, and beef all it's meat. And in you a more that that money standpoint. the patty, patty, use gets a

are easy things month. It to rolling more keep restaurants makes that these it's these every so little examples where like the So much out operate.

as importantly, turnover showing to intend service metrics. team that's showing the member And with up scores food levels. so And grade then it's return up both in and

long team to for know as to manager and for as well guest team put why experience don't I the business, continue improve. simplifications So into see members we continue the continue guest, the we as member those to to and I the momentum both continue as move to scores the anticipate for continue wouldn't the friction that both would

one, -- to environment. menu new of I the quarter. want in latest in the of next some about launching how were the And at believe sales For you menu That's in value on pricing new helpful. of set your versus be between And set the ask of the will a current I cadence in in level pricing could and I mix And level you Me, then the and percentage what sort current X sort period value $XX.XX Chili's? Chili's the topic much you the higher the the within this last have very pricing just thinking of help maybe tiers. quarters. few that What's on Could

end I'll Brian, Mika first the pricing your the question. back in take I'll of let take the question half, and

So -- points to I'm give just For happening data going couple our of so understand you Me a tier you value. X what's with

For XX.X% X from referring was tier a so PXXX. Me earlier. Our that up XX.X%, about point to is was I X.X That's that

So being in are For more those many coming are tier. $XX.XX the than that which the ordered. is and $XX.XX every of then XXX how half words, that's X orders, other in into XX% and Mes tier $XX.XX coming the XX%

then as of as are significantly higher price $XX.XX, even And XX% coming far the though XX% So value menu a number deal, in QX, in was we're and advertising more than of points. it QX. checks roughly half actual roughly transactions on the off it's at

been to to from we an of QX. flat QX basically bit So little QX, uptick saw a but from it's QX

up, And too. to X that pricing, as relates to it I'm pick going Brian,

drop did a had yesterday we pricing action right So that around X%. menu a

strategy course pricing of the talked the pretty unfolding really our the much about is we've over So fiscal most as year. of

First price and foremost, we're going $XX.XX critical to prices point. protect our like

where in. But to a we to service At that's as level at the opportunities as think we're around on said, as and we of to little bit Obviously, kind we pricing judicious be detail our some may more to that as 'XX bit do pretty moderate over of can move into for move throughout be August we've effective. Obviously, course barbell you'll think we ability pricing more forward. next advertising be guest the sense moderation to future with we our of effective. value, menu, lot points looks we're particularly back to as But I kind campaigns well call, of forward, kind forward some and what last of a price from price and we've levels taken same out and time, can it year, looking this Mika plan need pay the you able and they move to price move get So find the think pricing protect everything accomplished accomplish the that actions foreseeable that can going wanted fiscal what and to for little willing set like. it they to be that that getting areas X%. been since to we up as what demonstrates our our now, of plays to into a more to levels very makes and that as guests a we've start always action lower of relates take would we get as heightened right we

and the that, Joe, that being fiscal changed my quarter notes somewhere your would in a little in that Okay. bit? pricing or low fourth result are right Xs maybe

think to just originally went it earlier a able -- little contemplated. moved we out this I than up were because bit month we actually a menu about

get effectiveness price quarterly the you on points. bit So more little a

high Xs. it's So

saw Yes. high little No, will when Xs, be a California X. well in opportunity incremental price almost the took it there. we We as

up. it what that's bumped So

question next from with is BMO. Andrew Your Strelzik

know Is a at up. as expansion forward? time, you've ago And now going the visibility sustainable environment to wanted view that's conversation. your labor go Is level And I to there kind inflation XX% know a I that achievable. of over the a several ad about the lapped talked restaurant to of of kind think of margin all? some revisit restaurant has mid-teens quarters or about or the lapping durable changing to margin that continue way or of investments, I margin investment. some the going to But normalized. you've

Yes.

think visible, quarterly a it from I so a of very yes, is, there. One so couple much is things -- XX%, standpoint.

to in -- higher levels remember, You have and you traditionally, we fourth have have ROM third quarter. your

of the XX.X% continue hurdle that sights quarter. forward and XX% for So that get ahead have fourth nice the move to over on quarter, third is to us the we can how in our we

equation. you'll think the of moves on continued I side some see the up ROM nice

of kind top go that I about basis, increase line as go-forward XX, XX, think we've to margins steady, basis annual growth into XX on forward. a point in an but you ability what leverage is talked

a based in and of of volumes envision So do there. both seasonality XX and the kind we kind of in in the level little But that every differently different the of an you and trajectory they'll to annual the obviously, range. points out quarters go quarter upward some play basis on essence, year-over-year XX as some

off-premise, was Great. fourth help if I then kind a the it from the more on you you're hoping split you just of just in us And there, quarter Okay. could of relates my the just you're seeing traffic evolving? could brand second And business, virtual expecting broadly, how what touch to as perspective? question, remind that's the

Okay.

quarter. going So the virtual into off-premise stay as fourth to is half of third-party that to brand around similar is the And then that the XX%, Chili's be goes, far for go. that delivery as It's will still XX% versus X.X%. X% and headwind about to about

with Tower for Your from today Citi. next is question Jon

today. John actually on Karen, for It's

sort into I'm I One, know a would have sort going me. guidance, for terms longer-term and to of consider wait of there call thinking you would chunkiness about we're X not is 'XX or we unique to of that. in out? algorithm 'XX quarter that you've asking for laid 'XX items out to XXXX But for anything Just in fitting fiscal kind of want

no. really Karen,

the much right a and to run continue the pace faster pretty railroads I around think in railroads at mode now. of kind we're

at sundry of So I always don't obviously, accruals. year-end, anticipate various there's -- review

correct. positioning You want is to make sure your insurance

compensation, items typical have systemic change play view but incentive to reviews, of really major there's that kind I adjustments year-end of out. Those as nature that like obviously it. can are things that any needs nothing You kind of to that

of that of we've a Or with about some one since the and rear thinking about of is bit maybe that? other in about that the to we be before improvements are talked initiative should there how things product on simplifications going it? and you're point burger future view, kind the [indiscernible] focus kind then talked XXXX as little think a And I about

Yes.

thinking You're right. about that

So out, right segment new improvements, to we and/or perfect. operational get with new teams it smasher whatever we to launched either roll big simplification right item we've is burger. a now, to make reinforcing roll the this behaviors try Whenever that the

fundamentals, out the smash, we've So cook time. and the which is rerolled sear, currently, like burger the

a a little we out then over rolled seasoned X.X-ounce all sure and and right have at buttering, our bun that fries entree on burgers, we a uses they temperature, procedure sure So burger our toasting proper it big new crispy grill the base use smasher the time. making and fry to we every of make year ago hot, and bun are fresh our proper properly

big then we those the making we X.X-ounce patty skinny that properly burgers of launched that as all relaunched smasher. we're sure as the part and make to patty. we the the procedures X.X-ounce of smasher, into all eliminated lunch then And big roll So

And burgers the to of or call go to focus. simplification. put sandwich, chicken later that be And that of I the value then X a next, months plan out simplified then early going proposition we in on fajitas. after X our the our segment it, that's 'XX. for about be new also likely think So that rolled in will to air the that, about is kind in QX in We'll come burgers talked summer is fall. X will next way which should the And late is a core

it, over us. for timing. a call November, would that business is So be, pretty project. $XXX large That a is December Fajitas million

that lineup. we mix crispers to So power there's driving the as terms of we did the can like some do, pricing both improving when huge well upside, our relaunched of in some get the of quality as product Chicken we

is and on We're the Fajita of and major the fresher is are more more upgrading we're a bullish lot a served that's very whole so business because a project tortilla That So protein, profitable. that the we with. bigger presentation the could large vegetable upgrading that we're bowl think upgrading the we get delicious.

So started pretty it's ago. a that project X undertaking. big months We about

going the all have by so with But year we're the give able next to earnings call, time in a a you of encouraged results going very be to of it in by when very, market. share you we'll the confirmation it. hopefully, the be actually that's along. making over to gets by it's And and to And the test market

with Bank America. Griffin Katherine of from is question Next

of It wanted the successful the the with ask is. in Chili's sequentially, mix negative of I quarter? negative consumer the terms in would seems menu But caution I mix. was the like you softening less at our mix, reverse also a little about expectation in mix where to to some then think impact First, merchandising given bit you dynamics might see the the

in understand just was of the me quarter the of maybe So the in consumer? much third versus your in control seeing help softening how mix could menu kind if the you from merchandising some

the that Katherine, it's Joe. the pleased direction Thanks menu. we saw Actually, with real and in improvements dropped mix once for question. we the we're

July end right be we at getting So impactful. I'm can it we end obviously, and I'm around -- of good understanding merchandising you pretty have of And that it we getting ahead the already when dropped of perform. menus, performed menu At of wanted -- the -- January, the again, move a how January. myself. to we the on how

January move. the moved quarterly continuing the because as It's in improvements not again, menu old through of apparent the we're still numbers under side the in the had of equation. to improvement you quarter. see we And saw we the So mix that rest as

we've of couple we're to more Espresso then And in mix Martini launched some as a layer neutral we've kind from anticipate seeing environment. just But opportunities. then of we kind the the would continued I a additional So from move both pretty particularly on into We results mix here weeks restaurant those the taken. add forward effectively. how the opportunity equation, corrected a the we'll and from in perspective corrected That's to menu. course and of the continue opportunities, different to we merchandise some weekend look But we course an and ago. at steps

just restaurant quarter? what the quarter play inflation What commodities expectations? out next did expectations how And -- the on then are And upcoming another in your your Great. question margins. then in embedded to relative Okay.

Katherine, little we expected. better actually, bit than our commodity inflation was a

do So to bit, tick quarter, we third in the probably in up the And then X% were basically we range. in quarter. fourth that that flat a expect little

would appear turn to further be There like for in closing to to queue. Joe floor no remarks. the I over Taylor questions

the get speaker time is the in last And my this thanks, to or case. Holly. mic this And phone

earnings As prior position end CFO June. Kevin passing call late to fiscal the is mentioned of our year earlier, in my the this last on at

a you couple up. remarks, wrap to of thank things So and

will business ones all to for it coverage to a the over the be working I the to us, and relationship. relationships professionalism a First, past the both bringing and pleasure on She knowledge in the our to a for new developed you Mika, to who her depth time baton a of good position. such tougher and company terrific decade, prepared know our hear over and and your will I'm insights, your value really the to continue spent well brings the is a pass been role. sometimes has with for to were is the degree thrilled along to that leader high you next analysts And getting and of years. Thank of for key very call, passion

we in the the don't years have ahead. And be and I shared will are restaurants played. family through degree retell, possibly there to lastly, that the express even out my can as stories and occasion to for thankfulness of cross bring in reach Dallas, ] have X you your sure our made hesitate to I'm decades. towards teammates, our RSC it a be can If paths Hopefully, to travels rounds meals is high that such me tough here this place and both at over special have [ my the some

I our each appreciation the work who my staff particularly with next, special for all me restaurants start I teammates take lead day. tirelessly to a As and

Chili's many each the I of you guests for of such great do feel call thousands of and and made and years -- every that what the adjourned, look in I that all to Brinker and you. for ahead all are the been that, GMs very many heads, company. memories always DOs, you Thank small on experiences, assure with honor history of VPOs, very of stories members be good over this I past pasta ventures. sharing my forward tell eagerness blessing and day. a special. It heads have brings you of and day. XX been all future an relationships the true you, Our a accomplishments your years. are lifelong you as great and such be this has a each It part has wish successes with will part of to and team. And watching next the the the Thank a to privilege we

everyone. Thank so you Goodbye, much.

conference concludes This call. today's

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