Q3 2023 BJs Restaurants Inc Earnings Call
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Speaker 1: transcript
Speaker 1: Hello and welcome to the
Got it.
Hello, and welcome to the Bj's restaurants third quarter 'twenty twenty-three earnings release and conference call. All participants will be in listen only mode should you need assistance. Please signal a conference specialist by pressing the Starkey followed by zero.
Speaker 1: transcript
Speaker 1: release and conference call. All participants will be in listen only mode. Should you need assistance, please?
Speaker 1: transcript
Speaker 1: After today's presentation, there will be an opportunity to ask questions.
After todays presentation, there will be an opportunity to ask questions to ask a question you May Press Star then one on your telephone keypad to withdraw from the question queue. Please press Star then two please.
Speaker 1: transcript
Speaker 1: and one on your telephone t-pad. To withdraw from the question queue, please press star then two. Please note that...
Operator: Hello and welcome to the BJ's Restaurants 3rd Quarter 2023 Earnings Release and Conference Call. All participants will be in listen only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero.
Please note this event is being recorded.
I would now like to turn the conference over Toronto Schirmer Director of SEC reporting. Please go ahead.
Thank you operator, good afternoon, everyone and welcome to our fiscal 2023 third quarter Investor Conference call and webcast.
Speaker 2: transcript
Speaker 2: Thank you, operator. Good afternoon, everyone, and welcome to our fiscal 2023 third quarter investor conference call and webcast.
Operator: After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on your telephone keypad. To withdraw from the question queue, please press star, then two. Please note, this event is being recorded.
Speaker 2: transcript
Speaker 2: After the market closed today, we released our financial results for our fiscal 2023-3rd quarter. You can view the full text of our earnings released on our website at www.bjzreffs.com.
After the market closed today, we released our financial results for our fiscal 2023 third quarter you can view the full text of our earnings release on our website at Www Dot Bj's restaurants Dot com I will begin by reminding you that our comments on the conference call today will contain forward looking statements within the meaning of the private securities.
Rana Schirmer: I would now like to turn the conference over to Rana Schirmer, director of SEC reporting. Please go ahead. Thank you, operator.
Speaker 2: transcript
Speaker 2: I will begin by reminding you that our comments on the conference call today will contain forward-looking statements within the meeting of the private security litigation reform act at 1995. Investors are cautioned that forward-looking statements are not guaranteed the future performance, and that undue reliance should not be placed on such statements.
Rana Schirmer: Good afternoon, everyone, and welcome to our fiscal 2023 3rd quarter investor conference call and webcast. After the market closed today, we released our financial results for our fiscal 2023 3rd quarter. You can view the full text of our earnings release on our website at www.bjstressants.com.
Litigation Reform Act at 1995 investors are cautioned that forward looking statements are not guarantees of future performance and that undue reliance should not be placed on such statements. These statements are based on management's current business and market expectations and our actual results could differ materially from those projections in the forward looking statements.
Speaker 2: transcript
Speaker 2: These statements are based on management's current business and market expectations and our actual results can differ materially from those projections and the forward looking statement.
Rana Schirmer: I will begin by reminding you that our comments on the conference call today will contain forward looking statements within the meeting of the private securities. We also have an obligation reform act at 1995. Investors are cautioned that forward looking statements are not guaranteed the future performance, and that undue reliance should not be placed on such statements. These statements are based on management's current business and market expectations, and our actual results can differ materially from those projections and the forward looking statements.
We undertake no obligation to publicly update or revise any forward looking statements or to make any other forward looking statements, whether as a result of new information future events or otherwise unless required to do so by the securities laws investors are referred to the full discussion of risks and uncertainties associated with forward looking.
Speaker 2: transcript
Speaker 2: We undertake no obligation to publicly update or revise any foreign looking statements or to make any other foreign looking statements, whether as a result of new information, future events or otherwise, and less required to do so by the security clause.
Speaker 2: transcript
Speaker 2: Investors are referred to the full discussion of risks and uncertainties associated with forward-looking statements contained in the company's filings with the Securities and Exchange Commission.
Statements contained in the company's filings with the Securities and Exchange Commission, we will start today's call with prepared remarks from Greg Levin, Our Chief Executive Officer, and President and Tom <unk>, Our Chief Financial Officer, After which we will take your questions and with that I will turn the call over to Greg Levin Greg.
Speaker 2: transcript
Speaker 2: We will start today's call with a pair of remarks from Greg Levin, Archie Executive Officer and President in Tom Hodeck, Archie Financial Officer, after which we will take your question. And with that, I will turn the call over to Greg Levin. Greg?
Rana Schirmer: We undertake no obligation to publicly update or revise any forward looking statements or to make any other forward looking statements, whether as a result of new information, future events or otherwise, and less required to do so by the security flaws. Investors are referred to the full discussion of risks and uncertainties associated with forward looking statements contained in the company's filing with the securities and exchange commission.
Yeah.
Thank you Rhonda.
Speaker 3: transcript
Speaker 3: DJ has delivered another quarter of positive comparable restaurant sales and year over year margin expansion.
<unk> delivered another quarter of positive comparable restaurant sales and year over year margin expansion.
Speaker 3: transcript
Speaker 3: Our total revenues increase a little over 2% led by a 1.5% increase in our average weekly sales driven by continued positive comparable restaurant sales and the strong performance of our new restaurants.
Rana Schirmer: We will start today's call with a pair of remarks from Greg Levin, our chief executive officer and president in Tom Hodeck, our chief financial officer, after which we will take your questions.
Total revenues increased a little over 2% led by a one 5% increase in our average weekly sales driven by continued positive comparable restaurant sales and the strong performance of our new restaurants.
Greg Levin: And with that, I will turn the call over to Greg Levin, Greg. Thank you, Ronna. DJ has delivered another quarter of positive comparable restaurant sales and year over year margin expansion. Our total revenues increase a little over 2% led by a 1.5% increase in our average weekly sales driven by continued positive comparable restaurant sales and the strong performance of our new restaurants. For the 10th consecutive quarter, our sales results beat the industry as measured by black box.
Speaker 3: transcript
Speaker 3: For the 10th consecutive quarter, our car sales results BT industry as measured by black box. We expanded our restaurant margins to 11.9% represented an increase of 160 basis points from the prior year in generated adjusted EBITDA of approximately 20 million in the quarter, marking a 29% increase over the prior year.
For the 10th consecutive quarter, our car sales results beat the industry as measured by Black box.
We expanded our restaurant margins to 11, 9%, representing an increase of 160 basis points from the prior year and generated adjusted EBITDA of approximately $20 million in the quarter, marking a 29% increase over the prior year.
Speaker 3: transcript
Speaker 3: In fact, in the first three quarters of fiscal 2023, we had generated over 76 million of adjusted EBITDA, which is roughly equivalent to all of last year, with of course one quarter to go.
In fact in the first three quarters of fiscal 2023, we have generated over $76 million of adjusted EBITDA, which is roughly equivalent to all of last year with of course, one quarter to go.
Greg Levin: We expanded our restaurant margins to 11.9% represented an increase of 160 basis points from the prior year in generated adjusted EBITDA of approximately 20 million in the quarter, marking a 29% increase over the prior year. In fact, in the first three quarters of fiscal 2023, we had generated over 76 million of adjusted EBITDA, which is roughly equivalent to all of last year, with of course one quarter to go compared to 2022 industry white sales trends normalized in the 2023 third quarter.
Speaker 3: transcript
Speaker 3: Compared to 2022, industry-wide sales trends normalized in the 2023-3rd quarter. Historically, weekly sales volumes peak in May and June and then come down in July before taking further steps down in August and September .
Compared to 2022 industry wide sales trends normalized in the 2023 third quarter Historically weekly sales volumes peak in May and June and then come down in July before taking further steps down in August and September.
Speaker 3: transcript
Speaker 3: Last year, with consumers freed of COVID restrictions, weekly sales average actually increased in August compared to July with the smaller step down in September .
Last year with consumers freed of Covid restrictions weekly sales average actually increased in August compared to July with the smaller stepped down in September.
Speaker 3: transcript
This year third quarter sales trends reverted to pre COVID-19 patterns, resulting in a return to in August and September sales slowdown.
Greg Levin: Historically, weekly sales volumes peak in May and June and then come down in July before taking further steps down in August and September. Last year, with consumers freed of COVID restrictions, weekly sales average actually increased in August compared to July, with a smaller step down in September. This year, third quarter sales trends reverted to pre-COVID patterns, resulting in a return to an August and September sale flow down. Tom will provide more details on the quarter, but since regular seasonality return in the fourth quarter of last year, we have seen our comparable restaurants on sales rebound to positive low single digits starting in October.
Speaker 3: transcript
Speaker 3: Tom will provide more details on the quarter, but since regular seasonality returned in the fourth quarter of last year, we have seen our comparable restaurant sales rebound to positive low single digits starting in October .
Tom will provide more details on the quarter, but since the regular seasonality returned in the fourth quarter of last year, we have seen our comparable restaurant sales rebound to positive low single digits starting in October.
Okay.
Speaker 3: transcript
Speaker 3: As we mentioned previously, our sales and margin growth strategies are rooted in our in-depth consumer research and focus on building the BJ's brand over the long-term, quarter by quarter, and year by year.
As we mentioned previously our sales and margin growth strategies are rooted in our in depth consumer research and focus on building the bj's brand over the long term quarter by quarter and year by year, we know that our guests escape to bj's for a dining experience featuring familiar food items may brewhouse Fabulous with Golar.
Speaker 3: transcript
Speaker 3: We know that our guests have escaped to be dates for a dining experience featuring familiar food items made through house fabulous. With goal standard service and gracious hospitality delivered by our restaurant teams, and packaged in an ambiance that is of higher quality, differentiated, and full of energy compared to mass market casual dining concepts.
Standard service and gracious hospitality delivered by our restaurant teams and packaged in an ambiance that is of higher quality differentiated and full of energy compared to mass market casual dining concepts.
Greg Levin: As we mentioned previously, our sales and margin growth strategies are rooted in our in-depth consumer research and focus on building the BJ's brand over the long term quarter by quarter and year by year. We know that our guests escaped to be days for a dining experience featuring familiar food items made through house fabulous, with goal standard service and gracious hospitality delivered by our restaurant teams, and packaged in an ambiance that is of higher quality, differentiated, and full of energy compared to mass market casual dining concepts.
Speaker 3: transcript
Speaker 3: Therefore, in the third quarter to enhance our already high service and hospitality standards, we rolled out new service scripts as well as an updated mystery shopper program focused on consistently delivering gracious hospitality to our guests.
Therefore in the third quarter to enhance our already high service and hospitality standards, we rolled out new server scripts as well as an updated mystery shopper program focused on consistently delivering gracious hospitality to our guests.
Speaker 3: transcript
Speaker 3: As a result of these recent programs, we have increased hospitality scores year over year on our guest surveys. Additionally, our hourly and management staffing levels continue to improve year over year as we narrow the gap to pre-COVID levels. In fact, our hourly team member retention rate in September matched our pre-COVID level, illustrating our improving operating environment, which has enabled us to execute at even higher levels of service and efficiency.
As a result of these recent programs, we have increased hospitality scores year over year on our guest surveys. Additionally.
Additionally, our hourly and management staffing levels continue to improve year over year as we narrow the gap to pre COVID-19 levels.
Greg Levin: Therefore, in the third quarter to enhance our already high service and hospitality standards, we rolled out new service scripts as well as an updated mystery shopper program focused on consistently delivering gracious hospitality to our guests. As a result of these recent programs, we have increased hospitality scores year by year on our guest surveys. Additionally, our hourly and management staffing levels continue to improve year by year as we narrow the gap to pre-COVID.
In fact, our hourly team member retention rate in September matched a pre COVID-19 level illustrating our improving operating environment, which has enabled us to execute at even higher levels of service and efficiency.
Speaker 3: transcript
Speaker 3: We also rolled out a new menu that has 15% fewer items and is focused on familiar items made greenhouse fabulous based on our guest's research and careful testing in our restaurant.
We also rolled out a new menu that has 15% fewer items and is focused on familiar items, maybe brewhouse fabulous based on our guest research and careful testing in our restaurants.
Greg Levin: In fact, our hourly team member retention rate in September matched a pre-COVID level, illustrating our improving operating environment, which has enabled us to execute at even higher levels of service and efficiency. We also rolled out a new menu that has 15% fewer items and is focused on familiar items made through house fabulous based on our guest research and careful testing in our restaurants. Having fewer items but the right items for our guests resulted in improved pay scores year by year.
Speaker 3: transcript
Speaker 3: Having fewer items, but the right item for our guests, resulted in improved pay scores year-over-year.
Having fewer items, but the right items for our guests resulted in improved pay scores year over year.
Speaker 3: transcript
Speaker 3: Our innovation team continues to create new menu items and drinks that provide the familiar yet made brewhouse fabulous.
Our innovation team continues to create new menu items and drinks that provide the familiar yet may brewhouse fabulous.
Speaker 3: transcript
Speaker 3: In the third quarter, we rolled out our big twist pretzel paired with BJ's Brewhouse Blonde beer cheese and the Hickory brisket nachos for unlimited time, accompanied with a line of wow margaritas, including our new white peach boba rita. Importantly, our culinary and beverage innovation is working to grow sales, adding both incidence and dollar sales to the appetizer and cocktail categories. In fact, the new innovative cocktails are now our top sellers in that category.
In the third quarter, we rolled out our big twist pretzel paired with Bjs brewhouse bond beer cheese, and the Hickory Brisket nachos for a limited time, accompanied with a line of wild Marguerite us, including our new White Peach probe arena.
Importantly, our culinary and beverage innovation is working to grow sales, adding both incidence and dollar sales to the appetizer and cocktail categories. In fact, the new innovative cocktails are now our top sellers in that category.
Greg Levin: Our innovation team continues to create new menu items and drinks that provide the familiar yet made brew house fabulous. In the third quarter, we rolled out our big twist pretzel paired with BJ brew house blonde beer cheese and the hickory brisket naches for unlimited time, accompanied with a line of wow margaritas including our new white peach boba rita. Importantly, our culinary and beverage innovation is working to grow sales adding both incidents and dollar sales to the appetizer and cocktail categories.
Yes.
Speaker 3: transcript
Speaker 3: We also just rolled out our limited time only spooky pizooki with orange colored vanilla ice cream and chocolate syrup that gets pour over the dessert, which hardens to make a delicious chocolate shell over our world famous pizooki dessert. Our spooky pizooki has exceeded our expectations, becoming our number one selling pizooki this October , and selling out sooner than anticipated.
We also just rolled out our limited time, only spooky zaki with Orange colored vanilla ice cream and chocolate syrup, I guess pour over their dessert, which hardens to make a delicious chocolate shell over our world famous to Vicki dessert.
Our spooky <unk> has exceeded our expectations, becoming our number one selling <unk> this October and selling out sooner than anticipated.
Greg Levin: In fact, the new innovative cocktails are now our top sellers in that category. We also just rolled out our limited time only spooky bazooki with orange colored vanilla ice cream and chocolate syrup that guests pour over their dessert, which hardens to make a delicious chocolate shell over our world famous bazooki dessert. Our spooky bazooki has exceeded our expectations, becoming our number one selling bazooki this October and selling out sooner than anticipated.
Speaker 3: transcript
Speaker 3: Given the extraordinary guest excitement and demand for this product, expect to see Spooky Fuzuki back next year.
Given the extraordinary guest excitement and demand for this product and expect to see spooky Vicki back next year.
We are now looking forward to this holiday season, as we plan to future New limited time, only brewhouse Kwan garlic shrimp appetizer.
Speaker 3: transcript
Speaker 3: We are now looking forward to this holiday season as we plan to feature a new limited time only brewhouse flan garlic shrimp appetizer, a special filet surf and turf entree and our new tipsy snowman and winter paradise pomegranate margarita seasonal cocktails all these items that squarely in our menu strategy of familiar items again may brewhouse fabulous.
Special Fillet surf <unk> turf, entre and our new tipsy Snowman and winter Paradise, Pomegranate Margarita seasonal cocktails.
All of these items fits squarely in our menu strategy a familiar items again may brewhouse Fabulous.
Greg Levin: Given the extraordinary guest excitement and demand for this product, expect to see spooky bazooki back next year. We are now looking forward to this holiday season as you plan to feature a new limited time only Blue House Plan, garlic shrimp appetizer, a special filet surf and turf entree, and our new tipsy snowman and winter paradise pomegranate margarita seasonal cocktails. All these items that squarely in our menu strategy are familiar items, again, made Blue House fabulous.
Furthermore, we know that guests come to Bj's for a better dining experience rooted in what we call Brewhouse Theatre.
Speaker 3: transcript
Speaker 3: Furthermore, we know that guests come to BJ's for a better dining experience rooted in what we call brewhouse theater. Each of these new items provides the guests with more theater and quality than what you find at other mass casual restaurant chains. For example, our tipsy snowman cocktail includes a holiday marshmallow shaped like a snowman in a Belgian beer glass. And the spooky pizooki allows our guests to pour over the chocolate sauce and watch in anticipation as it hardens.
Each of these new items provides the guests with more theater in quality than what you find at other mass casual restaurant chains. For example are tipsy Snowman cocktail includes a holiday marshmallow shaped like a snowman and a Belgian beer glass and the spooky <unk> allows our guests to pour over the chocolate sauce and watch in anticipation as.
Greg Levin: Furthermore, we know that guests come to BJ's for a better dining experience, rooted in what we call Blue House Theater. Each of these new items provides the guests with more theater and quality than what you find at other math casual restaurant chains. For example, our tipsy snowman cocktail includes a holiday marshmallow shaped like a snowman in a Belgian beer glass, and the spooky Pizuki allows our guests to pour over the chocolate sauce and watch an anticipation as it hardens.
It hardens.
Speaker 3: transcript
Speaker 3: All of these items allow guests to trade up and indulge at BJ's while creating a fun, polished, casual experience.
All of these items allow guests to trade up and indulgent bj's, while creating a fun polished casual experience.
Most importantly for us to do this we needed to optimize the menu and simplify execution in certain areas. So that we can provide our guests and even better culinary experience.
Speaker 3: transcript
Speaker 3: Most importantly, for us to do this, we needed to optimize the menu and simplify execution in certain areas so that we can provide our guests an even better culinary experience.
Speaker 3: transcript
Speaker 3: All of this has been made possible by our menu optimization process that we began last year and the continuing passion and dedication from our team members.
All of this has been made possible by our menu optimization process that we began last year and the continuing passion and dedication from our team members.
Greg Levin: All of these items allow guests to trade up and indulge at BJ's while creating a fun polished casual experience. Most importantly, for us to do this, we need it to optimize the menu and simplify execution in certain areas so that we can provide our guests an even better culinary experience. All of this has been made possible by our menu optimization process that we began last year in the continuing passion and dedication from our key members.
Through our research, we know that a key differentiator and full service restaurants as ambiance guests don't want to visit all the worn out restaurants with wildly table as dirty floors and broken chairs guests wanted to contemporary relevant atmosphere that complements team members create this hospitality and bj's delicious food or.
Speaker 3: transcript
Speaker 3: Through our research, we know that a key differentiator in full-service restaurants is Ambiance.
Speaker 3: transcript
Speaker 3: Guests don't want to visit old worn out restaurants with wobbly tables, dirty floors and broken chairs. Guests want a contemporary, relevant atmosphere that compliments team members gracious hospitality and DJ's delicious food. Our remodel program focuses on that relevant ambiance by providing enhanced seating capacity, an updated bar statement, new lighting, artwork, booths and tables.
<unk> model program focuses on that relevant ambiance by providing enhanced seating capacity and updated bar statement, new lighting artwork booths and tables as.
Greg Levin: Through our research, we know that a key differentiator in full service restaurants is ambiance. Guests don't want to visit old worn out restaurants with wobbly tables dirty floors and broken chairs. Guests want a contemporary relevant atmosphere that complements team members gracious hospitality and BJ's delicious food. Our remodel program focuses on that relevant ambiance by providing enhanced feeding capacity and updated bar statement, new lighting, artwork, booths and tables. As we mentioned before, the new bar statement is amazing and includes a much lighter, more contemporary bar feature, featuring a new 130-inch television that screams brewhouse theater.
Speaker 3: transcript
Speaker 3: As we mentioned before, the new bar statement is amazing and includes a much lighter, more contemporary bar feature featuring a new 130-inch television that screens Blue House Theater.
As we mentioned before the new bar statement is amazing and includes a much lighter more contemporary bar feature featuring a new 130 inch television that screams Brewhouse theatre.
Speaker 3: transcript
Speaker 3: We are still targeting between 35 and 40 remodels this year, and we expect to have remodels at least 20% of our restaurants by year end.
We are still targeting between 35% and 40 Remodels this year and we expect to have remodeled at least 20% of our restaurants by year end.
While the best way for Us to continue our margin growth is by driving top line sales. Since every additional dollar sales leverages the fixed elements of our cost structure. We also laid out a plan last year to identify at least $25 million of four wall cost savings opportunities that will benefit our restaurant operating margin.
Speaker 3: transcript
Speaker 3: Well, the best way for us to continue our margin growth is by driving top-line sales. Since every additional dollar sales leverages the fixed elements of our cost structure, we also laid out a plan last year to identify at least $25 million of four-wall cost savings opportunities that will benefit our restaurant operating margins while maintaining our high-quality standards.
Greg Levin: We are still targeting between 35 and 40 remodels this year and we expect to have remodel at least 20% of our restaurants by year end. While the best way for us to continue our margin growth is by driving top line sales, since every additional dollar sales leverages the fixed elements of our cost structure, we also laid out a plan last year to identify at least 25 million of four-wall cost savings opportunities that will benefit our restaurant operating margins while maintaining our high-quality standards.
<unk>, while maintaining our high quality standards.
Speaker 3: transcript
Speaker 3: We have now unlocked over 30 million of cost savings on an annualized basis as we reduce food, labor, and operating and occupancy costs.
We have now unlocked over $30 million of cost savings on an annualized basis, as we reduced food labor and operating and occupancy costs.
Speaker 3: transcript
Speaker 3: Additionally, the team has identified further savings opportunities, which we expect to roll out late in the fourth quarter, which will continue to improve our margins and our EBITDA year over year.
Additionally, the team has identified further savings opportunities, which we expect to roll out late in the fourth quarter, which will continue to improve our margins and our EBITDA year over year.
Speaker 3: transcript
Speaker 3: We also continue to open new restaurants in a balanced manner. In 2023, we opened five new restaurants, including the relocation of our Chandler, Arizona restaurant. Our 2022 and 2023 classes of restaurants are doing exceptionally well with weekly sales average of more than $130,000, or approximately 10% higher than our system average. And overall margins in the mid to upper teens.
We also continue to open new restaurants in a balanced manner in 2023, we opened five new restaurants, including the <unk> the relocation of our Chandler, Arizona restaurant.
Greg Levin: We have now unlocked over 30 million of cost savings on an annualized basis as we reduce food, labor and operating and occupancy costs. Additionally, the team has identified further savings opportunities, which we expect to roll out late in the fourth quarter, which will continue to improve our margins and our EBITDA year over year. We also continue to open new restaurants in a balanced manner. In 2023, we opened five new restaurants, including the Rueik, the relocation of our Chandler Arizona restaurant.
Our 2022 and 2023 classes of restaurants are doing exceptionally well with weekly sales average of more than $130000 or approximately 10% higher than our system average.
The overall margins in the mid to upper teens.
Speaker 3: transcript
Speaker 3: As we discussed last quarter, we submitted new plans for the majority of our 2024 openings so that we can roll out our new prototype that will save us approximately $1 million per build versus our current prototype.
As we discussed last quarter, we submitted new plans for the majority of our 2024 openings. So that we can roll out our new prototype that will save us approximately $1 million per build versus our current prototype.
Greg Levin: Our 2022 and 2023 classes of restaurants are doing exceptionally well with weekly sales average of more than $130,000 or approximately 10% higher than our system average and overall margins in the mid to upper teams. As we discussed last quarter, we submitted new plans for the majority of our 2024 openings so that we can roll out our new prototype that will save us approximately $1 million per build versus our current prototype. Additionally, due to a more efficient layout, this prototype should provide an opportunity for labor optimization.
Speaker 3: transcript
Speaker 3: Additionally, due to a more efficient layout, this prototype should provide an opportunity for labor optimization.
Additionally, due to a more efficient layout. This prototype should provide an opportunity for labor optimization.
Overall, we believe this new prototype will provide even better returns on invested capital by delivering better margins and built at a lower cost.
Speaker 3: transcript
Speaker 3: Overall, we believe this new prototype will provide even better returns on the invested capital by delivering better margins and built at a lower cost.
Speaker 3: transcript
Speaker 3: Therefore, I expect 2024 new restaurant openings to be similar number to this year before we plan for an increase in the rate of new restaurant openings in 2025.
Therefore, I expect 2024, new restaurant openings to be similar number to this year before we planned for an increase in the rate of new restaurant openings in 2025.
Speaker 3: transcript
Speaker 3: As we've said many times, our goal is to re-accelerate our new restaurant expansion and grow restaurant weeks by 5% or more annually.
As we've said many times our goal is to Reaccelerate, our new restaurant expansion and drove restaurant weeks by 5% or more annually.
Greg Levin: Overall, we believe this new prototype will provide even better returns on the invested capital by delivering better margins and built at a lower cost. Therefore, I expect 2024 new restaurant openings to be similar number to this year before we plan for an increase in the rate of new restaurant openings in 2025. As we said many times, our goal is to re-accelerate our new restaurant expansion and grow restaurant weeks by 5% or more annually.
Speaker 3: transcript
Speaker 3: However, we are going to do so with the right quality and at the right investment cost to continue to drive strong new restaurant investment returns.
We are going to do so with the right quality and at the right investment costs to continue to drive strong new restaurant investment returns.
Speaker 3: transcript
Speaker 3: With 5% plus new restaurant growth, consistent comp sales in the low to mid-single-digit range, and expanding restaurant margins, we should achieve very strong EBITDA and earnings growth for our shareholders.
With 5% plus new restaurant growth consistent comp sales in the low to mid single digit range and expanding restaurant margins, we should achieve very strong EBITDA and earnings growth for our shareholders.
Speaker 3: transcript
Speaker 3: With the continued positive reactions from our guests for all that we are doing, coupled with our increasing margins and EBITDA, we reinstated our share repurchase program this past quarter.
But with the continued positive reaction from our guests to all of that we are doing coupled with our increasing margins and EBITDA, we reinstated our share repurchase program this past quarter.
Greg Levin: However, we are going to do so with the right quality and at the right investment cost to continue to drive strong new restaurant investment returns. With 5% plus new restaurant growth, consistent comp sales in the low to mid single digit range and expanding restaurant margins, we should achieve very strong EBITDA and earnings growth for our shareholders. With the continued positive reactions from our guests to all that we are doing, coupled with our increasing margins and EBITDA, we reinstated our share repurchased program this past quarter.
Speaker 3: transcript
Speaker 3: We are increasingly confident in our strategy to grow sales, expand margins, open new restaurants and return capital to our shareholders in both the near and midterm.
We are increasingly confident in our strategy to grow sales expand margins and open new restaurants, and return capital to our shareholders in both the near and mid term.
Speaker 3: transcript
Speaker 3: Finally, I am looking forward to seeing many of you at our Analysts and Investor Day on Tuesday, November 14th, and the welcome dinner the night before. We'll host the Special Beard Dinner featuring some of our most iconic theaters, as well as some of our new menu items and cocktails.
Finally, I am looking forward to seeing many of you at our analyst and Investor Day on Tuesday November 14th and the welcome dinner. The night before we will host a special beer dinner featuring some of our most iconic beers as well as some of our new menu items and cocktails.
Greg Levin: We are increasingly confident in our strategy to grow sales, expand margins, open new restaurants and return capital to our shareholders in both the near and mid term. Finally, I am looking forward to seeing many of you at our analyst and investor day on Tuesday, November 14th and the welcome dinner the night before. We'll host a special beer dinner featuring some of our most iconic beers as well as some of our new menu items and cocktails. At the November 14th event in Boston, we will share greater detail around our near term opportunities and our longer term strategy. So I hope you can all join us for that event.
At the November 14th event in Boston will show greater detail around our near term opportunities and our longer term strategy.
Speaker 3: transcript
Speaker 3: At the November 14th event in Boston, we will share greater detail around our near term opportunities and our longer term strategy. So I hope you can all join us for that event.
So I hope you can all join us for that event.
Speaker 3: transcript
Speaker 3: Now let me turn it over to Tom to provide a more detailed update from the quarter and current trends. Tom?
Now, let me turn it over to Tom to provide a more detailed update from the quarter and current trends Tom.
Thanks, Greg and good afternoon, everyone I will provide details of the quarter and some forward looking views. Please remember this commentary is subject to the risks and uncertainties associated with forward looking statements as discussed in our filings with the SEC.
Speaker 4: transcript
Speaker 4: Thanks, Greg, and good afternoon, everyone. I will provide details of the quarter and some forward-looking views. Please remember, this commentary is subject to the risks and uncertainties associated with forward-looking statements as discussed in our filings with the SEC.
Speaker 4: transcript
Speaker 4: In the third quarter, total sales grew 2.3% to 319 million. On a comparable restaurant basis, sales increased by 0.4% over the prior year.
In the third quarter total sales grew two 3% to $319 million on a comparable restaurant basis sales increased by <unk>, 4% over the prior year.
Tom Houdek: Now, let me turn it over to Tom to provide a more detailed update from the quarter and current trends. Tom?
Tom Houdek: Thanks Greg, in good afternoon everyone. I will provide details of the quarter and some forward-looking views. Please remember, this commentary is subject to the risk and uncertainties associated with forward-looking statements as discussed in our fileings with the SEC. In the third quarter, total sales grew 2.3% to 319 million. On a comparable restaurant basis, sales increased by 0.4% over the prior year. From a weekly sales perspective, we average more than 113,000 per restaurant.
Speaker 4: transcript
Speaker 4: From a weekly sales perspective, we average more than 113,000 per restaurant.
From a weekly sales perspective, we averaged more than 113000 per restaurant.
Speaker 4: transcript
Speaker 4: In the typical pre-pandemic year, the third quarter is our lowest sales quarter seasonally, with the sales deceleration starting after Father Day in June , and continuing to step down into August and September as Greg mentioned.
In a typical pre pandemic year, the third quarter is our lowest sales quarter seasonally with the sales deceleration starting after fathers day in June and continuing to step down into August and September as Greg mentioned.
This year, our sales followed this normal seasonal pattern consistent with industry trends in our markets.
Speaker 4: transcript
Speaker 4: This year, our sales followed this normal seasonal pattern consistent with industry trends in our market.
Speaker 4: transcript
Speaker 4: However, in 2022, the seasonal decline was much less pronounced, as consumers enjoyed their first summer without any COVID restraints.
However in 2022, the seasonal decline was much less pronounced as consumers enjoyed the first summer without any COVID-19 restraints.
Tom Houdek: In a typical pre-pandemic year, the third quarter is our lowest sales quarter seasonally, with the sales deceleration starting after Father's Day in June and continuing to step down into August and September as Greg mentioned. This year, our sales followed this normal seasonal pattern, consistent with industry trends in our markets. However, in 2022, the seasonal decline was much less pronounced as consumers enjoyed their first summer without any COVID restraints. As such, last year's weekly sales average is actually increased into August before coming down slightly in September.
Speaker 4: transcript
Speaker 4: As such, last year's weekly sales averages actually increased into August before coming down slightly in September .
As such last year's weekly sales averages actually increased into August before coming down slightly in September.
Speaker 4: transcript
Speaker 4: This year's return to a more normal seasonal pattern resulted in comparable restaurant sales softening later in the third quarter. From the mid-4% positive in July to about flat in August to negative low single digits in before three mog? aunuts pay. ????? been on continuing either for whatever.
This year has returned to a more normal seasonal pattern resulted in comparable restaurant sales softening later in the third quarter from the mid 4% positive in July to about flat in August to negative low single digits in September.
Speaker 4: transcript
Speaker 4: Moving to more recent trends, comparable restaurant sales in the first three weeks of October are trending in the positive low single digits, an improvement of more than 500 basis points for September levels, as last year's seasonality normalized in the fourth quarter.
Moving to more recent trends comparable restaurant sales in the first three weeks of October are trending in the positive low single digits, an improvement of more than 500 basis points for September levels as last year's seasonality normalized in the fourth quarter.
Tom Houdek: This year's return to a more normal seasonal pattern resulted in comparable restaurant sales softening later in the third quarter. From the mid 4% positive in July to about flat in August to negative low single digits in September. Moving to more recent trends, comparable restaurant sales in the first three weeks of October are trending in the positive low single digits in improvement of more than 500 basis points for September levels as last year's seasonality normalized in the fourth quarter.
Speaker 4: transcript
Speaker 4: Our comp sales improvement in October is being driven by improving traffic trends compared to both August and September , and to a lesser extent, our late September pricing round in the upper 1%.
Our comp sales improvement in October is being driven by improving traffic trends compared to both August and September and to a lesser extent, our late September pricing round in the upper 1%.
Speaker 4: transcript
Speaker 4: Looking at the sales trends from a different perspective, our comparable restaurant sales compared to 2019 were much more consistent throughout Q3 and into early Q4, providing us further confidence that 2022 seasonality was the main driver of the one-year comparable sales volatility in the third quarter.
Looking at the sales trends from a different perspective, our comparable restaurant sales compared to 2019, we're much more consistent throughout Q3 and into early Q4, providing us further confidence that 2022 seasonality was the main driver of the one year comparable sales volatility in the third quarter.
Tom Houdek: Our comp sales improvement in October is being driven by improving traffic trends compared to both August and September and to a lesser extent our late September pricing round in the upper 1%. Looking at the sales trends from a different perspective, our comparable restaurant sales compared to 2019 were much more consistent throughout Q3 and into early Q4. Providing us further confidence that 2022 seasonality was the main driver of the last quarter. We will continue to see acceptance of our menu pricing rounds with no value oriented shifts in our menu mix or less items ordered per check which would indicate check management or changes in traffic patterns regarding day parts.
To date, we continue to see acceptance of our menu pricing rounds with no value oriented shifts in our menu mix or less items ordered per check, which would indicate check management, where changes in traffic patterns rigor.
Speaker 4: transcript
Speaker 4: To date, we continue to see acceptance of our menu pricing rounds with no value oriented shifts in our menu mix or less items ordered per check, which would indicate check management or changes in traffic pattern.
Speaker 4: transcript
Speaker 4: Regarding day parts, our late night sales continue to our perform and grow faster than other day parts. As our late night check is lower than other day parts, this channel mixed shift is adding a mod of 10 win to average check.
Regarding day parts are late night sales continued to outperform and grow faster than other day parts as our late night check is lower than other day parts. This channel mix shift is adding a modest headwind to average check.
Speaker 4: transcript
Speaker 4: A restaurant level cash flow margin was 11.9% in the third quarter, and improvement of up 160 basis points compared to the prior year.
Our restaurant level cash flow margin was 11, 9% in the third quarter, an improvement of 160 basis points compared to the prior year.
Speaker 4: transcript
Speaker 4: Comparable sales growth, in conjunction with improving operating efficiencies and further progress on our cost savings initiatives contributed to our margin improvement.
Comparable sales growth in conjunction with improving operating efficiencies and further progress on our cost savings initiatives contributed to our margin improvement.
Tom Houdek: Our late night sales continue to our perform and grow faster than other day parts. As our late night check is lower than other day parts, this channel mixed shift is adding a modest headwind to average check. Our restaurant level cash flow margin was 11.9% in the third quarter and improvement of up 160 basis points compared to the prior year. Comparable sales growth in conjunction with improving operating efficiencies and further progress on our cost savings initiatives contributed to our margin improvement.
Speaker 4: transcript
Speaker 4: Further illustrating our progress, our third quarter restaurant level cash flow margin was within 160 basis points of the same quarter in 2019, marking a 90 basis point improvement from the 250 basis point differential in the second quarter.
Further illustrating our progress our third quarter restaurant level cash flow margin was within a 160 basis points of the same quarter in 2019, marking a 90 basis point improvement from the 250 basis point differential in the second quarter.
Tom Houdek: Further illustrating our progress, our third quarter restaurant level cash flow margin was within 160 basis points of the same quarter in 2019 marking a 90 basis point improvement from the 250 basis point differential in the second quarter. Also, Q3 was the first quarter in the post-COVID era where our restaurant level cash flow dollars were higher than the corresponding quarter in 2019. We are encouraged by the progress made to date and continue to advance initiatives to further grow our restaurant margins.
Speaker 4: transcript
Speaker 4: Also, Q3 was the first quarter in the post-COVID era where our restaurant-level cash flow dollars were higher than the corresponding quarter in 2019.
Also Q3 was the first quarter in the post Covid era, where our restaurant level cash flow dollars were higher than the corresponding quarter in 2019.
Speaker 4: transcript
Speaker 4: We are encouraged by the progress made to date and continue to advance initiatives to further grow our restaurant market.
We are encouraged by the progress made to date and continue to advance initiatives to further grow our restaurant margins.
Speaker 4: transcript
Speaker 4: Just to e the job was 19.6 million and 6.1% of sales in the third quarter, which beat the prior year by 4.4 million with a margin that was 120 basis points higher.
Adjusted EBITDA was $19 6 million and six 1% of sales in the third quarter, which beat the prior year by $4 4 million with a margin that was a 120 basis points higher.
Speaker 4: transcript
Speaker 4: We reported the net loss of 3.8 million and deluded net loss per share of 16 cents on a gap basis for the quarter, both of which would have been an improvement for last year when excluding the $4.1 million tax benefit from the year ago period.
We reported a net loss of $3 8 million and diluted net loss per share of <unk> 16 on a GAAP basis for the quarter, both of which would have been an improvement from last year when excluding the $4 1 billion tax benefit from the year ago period.
Tom Houdek: Just to EBITDAW was 19.6 million and 6.1% of sales in the third quarter which beat the prior year by 4.4 million with a margin that was 120 basis points higher. We reported the net loss of 3.8 million and deluded net loss per share of 16 cents on a gap basis for the quarter, both of which would have been an improvement from last year when excluding the 4.1 million dollar tax benefit from the year ago period.
Moving to expenses our cost of sales was 25, 9% in the quarter, which was 140 basis points favorable compared to a year ago and consistent with the prior quarter.
Speaker 4: transcript
Speaker 4: Moving to expenses, our cost of sales was 25.9% in the quarter, which was 140 basis points favorable compared to a year ago, and concluded with the prior quarter.
Food costs were about flat quarter over quarter and year over year, which was moderately favorable to our expectations.
Speaker 4: transcript
Speaker 4: Food costs were about flat quarter over quarter and year over year, which was moderately favorable to our expectations.
Speaker 4: transcript
Speaker 4: The inflation figure would have been higher if not for the accumulating benefits from the changes we've been related to date across her food basket as part of the cost savings initiative.
Inflation figure would have been higher if not for the accumulating benefits from the changes we've insulated to date across our food basket is part of the cost savings initiatives.
Tom Houdek: Moving to expenses, our cost of sales was 25.9% in the quarter which was 140 basis points favorable compared to a year ago and concluded with the prior quarter. Food costs were about flat quarter over quarter and year over year which was moderately favorable to our expectations. The inflation figure would have been higher if not for the accumulating benefits from the changes we've been related to date across our food basket as part of the cost savings initiative.
Labor and benefits expenses were 37, 1% of sales in the quarter, which was 60 basis points favorable compared to the third quarter of last year.
Speaker 4: transcript
Speaker 4: Labor and benefits expenses were 37.1 percent of sales in the quarter, which was 60 basis points favorable compared to the third quarter of last year.
Speaker 4: transcript
Speaker 4: We made further strides improving our labor efficiency, which was driven in part by a reduced menu that requires less kitchen prep hours.
We made further strides improving our labor efficiency, which was driven in part by a reduced menu that requires less kitchen prep hours.
Speaker 4: transcript
Speaker 4: A number of the labor efficiency metrics we track, including items per labor hour, were better this quarter than pre-pandemic levels, illustrating the high level our restaurant teams are operating at, as well as the effectiveness of our cost savings initiatives to date with respect to refining and optimizing our labor model.
A number of the labor efficiency metrics, we track, including items per labor hour were better this quarter than pre pandemic levels illustrating the high level. Our restaurant teams are operating at as well as the effectiveness of our cost savings initiatives to date with respect to refining and optimizing our labor model.
Tom Houdek: Labor and benefits expenses were 37.1% of sales in the quarter, which was 60 basis points favorable compared to the third quarter of last year. We made further strides improving our labor efficiency, which was driven in part by a reduced menu that requires less kitchen prep hours. A number of the labor efficiency metrics we track, including items per labor hour, were better this quarter than pre-pandemic levels, illustrating the high level our restaurant teams are operating at, as well as the effectiveness of our cost savings initiatives to date with respect to refining and optimizing our labor model.
Occupancy and operating expenses were 25, 1% of sales in the quarter, which was 40 basis points unfavorable compared to the third quarter of last year.
Speaker 4: transcript
Speaker 4: Occupancy in operating expenses were 25.1% of sales in the quarter, which was 40 basis points unfavorable compared to the third quarter of last year. Approximately half of the increase was due to an investment in promotional and awareness building activity to drive off-premise sales, including catering, which has a high level of incrementality and return on investments.
Approximately half of the increase was due to an investment in promotional and awareness building activity to drive off premise sales, including catering, which have a high level of incremental <unk> and return on investment.
Our catering business continues to grow and delivered approximately 50% higher sales than the same quarter last year.
Speaker 4: transcript
Speaker 4: Our catering business continues to grow and delivered approximately 50% higher sales than the same quarter last year.
Tom Houdek: Occupancy and operating expenses were 25.1% of sales in the quarter, which was 40 basis points unfavorable compared to the third quarter of last year. Approximately half of the increase was due to an investment in promotional and awareness building activity to drive off from the sales, including catering, which has a high level of incrementality and return on investment. Our catering business continues to grow and delivered approximately 50% higher sales than the same quarter last year.
Speaker 4: transcript
Speaker 4: GNA was 19.5 million in the third quarter. Included in GNA was $100,000 to third compensation benefit linked to fund performance and our deferred compensation plan compared to a $600,000 expense in Q2.
G&A was $19 5 million in the third quarter <unk>.
Included in G&A was $100000 deferred compensation benefits linked to fund performance in our deferred compensation plan compared to a $600000 expense in Q2.
Speaker 4: transcript
Speaker 4: As a reminder, this is a non-cash item that has an offsetting entry in the other income and expense line in our P&L.
As a reminder, this is a noncash item that has an offsetting entry in the other income and expense line in our P&L.
For the full year, we now expect G&A to be in the $80 million to $81 million range, which is on the lower end of our prior guidance.
Speaker 4: transcript
Speaker 4: For the full year, we now expect GNA to be in the 80 to $81 billion range, which is on the lower end of our prior guidance.
Tom Houdek: GNA was 19.5 million in the third quarter. Included in GNA was a $100,000 deferred compensation benefit linked to fund performance and our deferred compensation plan compared to a $600,000 expense in Q2. As a reminder, this is a non-cash item that has an offsetting entry in the other income and expense line in our P&L. For the full year, we now expect GNA to be in the 80 to $81 million range, which is on the lower end of our prior guidance.
Speaker 4: transcript
Speaker 4: Turning to the balance sheet, we ended the quarter with a debt balance of 60 million, which was 7 million higher than the end of Q2, and equal to where we started the year.
Turning to the balance sheet, we ended the quarter with a debt balance of $60 million, which was $7 million higher than the end of Q2 and equal to where we started the year.
Speaker 4: transcript
Speaker 4: It ended the court with net debt of about $48 million.
We ended the quarter with net debt of about $48 million.
Yes.
Speaker 4: transcript
Speaker 4: Also during the quarter, we re-activated our Sherry Purchase Program to resume returning capital to shareholders.
Also during the quarter, we reactivated our share repurchase program to resume returning capital to shareholders.
Speaker 4: transcript
Speaker 4: The resumption of our Sherry purchases reflects management beliefs that BJ shares are currently undervalued and are confidence in BJ's longer term prospect.
Resumption of our share repurchases reflects management's beliefs that BJ shares are currently undervalued and our confidence in bj's longer term prospects.
Tom Houdek: Turning to the balance sheet, we ended the quarter with a debt balance of 60 million, which was 7 million higher than the end of Q2, and equal to where we started the year. We ended the quarter with net debts of about 48 million. Also during the quarter, we re-activated our share repurchase program to resume returning capital to shareholders. The resumption of our share repurchases reflects management beliefs that BJA shares are currently undervalued and our confidence in BJA's longer term prospects.
Speaker 4: transcript
Speaker 4: During the third quarter, we repurchased and retired approximately 164,000 shares of common stock at a cost of $4.3 million.
During the third quarter, we repurchased and retired approximately 164000 shares of common stock at a cost of $4 3 million.
Speaker 4: transcript
Speaker 4: At the end of Q3, we have 17.8 million remaining on our authorized share repurchase program.
Tom Houdek: During the third quarter, we repurchased and retired approximately 164,000 shares of common stock at a cost of $4.3 million. At the end of Q3, we had 17.8 million remaining on our authorized share repurchase program. Moving ahead to the fourth quarter, we are encouraged by recent sales and traffic trends as comparable restaurant sales have returned to positive low single digits. Shifts in prior year seasonality have passed, and we expect to continue delivering comparable sales in the low single digits for the quarter.
At the end of Q3, we had $17 $8 million remaining on our authorized share repurchase program.
Looking ahead to the fourth quarter, we are encouraged by recent sales and traffic trends as comparable restaurant sales have returned to positive low single digits shift.
Speaker 4: transcript
Speaker 4: Moving ahead to the fourth quarter, we are encouraged by recent sales and traffic trends as comparable restaurant sales have returned to positive low single-digit.
Speaker 4: transcript
Speaker 4: Shifts in prior year seasonality have passed, and we expect to continue delivering comparable sales in the low single digits for the quarter.
<unk> and prior year seasonality has passed and we expect to continue delivering comparable sales in the low single digits for the quarter.
Speaker 4: transcript
Speaker 4: Factoring in our sales expectations and recent cost trends, we expect restaurant level cash flow margins to be in the low 14% area in Q4, significantly above last year's Q4 margins.
Factoring in our sales expectations and recent cost trends, we expect restaurant level cash flow margins to be in the low 14% area in Q4 significantly above last year's Q4 margins.
Speaker 4: transcript
Speaker 4: As a reminder, Q4 2022 margins had the benefit.
As a reminder, Q4 2022 margins had the benefit.
Speaker 4: transcript
Speaker 4: from a 53rd week and a one-time gift card breakage benefit, which benefited last year's Q4 margins by approximately 130 basis points in aggregate.
From a 50 <unk> week, and a onetime gift card breakage benefit, which benefited last year's Q4 margins by approximately 130 basis points in aggregate.
Tom Houdek: Factoring in our sales expectations in recent cost trends, we expect restaurant level cash flow margins to be in the low 14% area in Q4 significantly above last year's Q4 margins. As a reminder, Q4 2022 margins had the benefit from a 53rd week and a one-time gift card breakage benefit, which benefited last year's Q4 margins by approximately 130 basis points in aggregate. Regarding CAPEX, our 5 2023 new restaurants are now opened and most of our 2023 restaurant remodels are completed, included in our Q3 openings with the relocation of our Chandler Arizona restaurant, which is off to a fantastic start with sales approximately 50% higher than our previous location.
Speaker 4: transcript
Speaker 4: Regarding CapEx, our five 2023 new restaurants are now opened, and most of our 2023 restaurant remodels are completed, included in our Q3 openings with the relocation of our Chandler, Arizona restaurant, which is off to a fantastic start with sales approximately 50% higher than our previous location.
Regarding capex, our five 2023, new restaurants are now open and most of our 2023 restaurant Remodels are completed included in our Q3 <unk>.
Openings was the relocation of our Chandler, Arizona restaurants, which is off to a fantastic start with sales approximately 50% higher than our previous location.
Speaker 4: transcript
Speaker 4: Also in the quarter, we closed an underperforming restaurant, which required a non-cash write-off in the loss on disposal and impairment of asset line in the P&L.
Also in the quarter, we closed an underperforming restaurants, which required a noncash write off in the loss on disposal and impairment of asset line in the P&L.
Speaker 4: transcript
Speaker 4: Also related to CAPEX, we invested in incremental $2 million to purchase upgraded server handheld tablets for approximately half of our system, which enabled additional functionality such as payment at the table and will lead to a meaningful operating cost savings with purchasing the tablets instead of the leasing arrangement with our prior generation device.
Also related to Capex, we invested an incremental $2 million to purchase upgraded server handheld tablets for approximately half of our system.
Which enabled additional functionality such as payment at the table and will lead to a meaningful operating cost savings with purchasing the tablets instead of the leasing arrangement with our prior generation devices.
Tom Houdek: Also in the quarter, we closed an underperforming restaurant, which required a non-cache write-off in the loss on disposal and impairment of asset line in the P&L. Also related to CapEx, we invested in incremental $2 million to purchase upgraded server handheld tablets for approximately half of our system, which enabled additional functionality, such as payment at the table, and will lead to a meaningful operating cost savings with purchasing the tablets. Instead of the leasing arrangement with our prior generation devices. Due to this incremental investment, as well as increasing the number of our restaurant remodeled last quarter, we are now targeting the high end of our prior 90 to 95 million CapEx range for this year.
Due to this incremental investment as well as increase in the number of our restaurant Remodels last quarter. We are now targeting the high end of our prior 90% to $95 million Capex range for this year.
Speaker 4: transcript
Speaker 4: Due to this incremental investment, as well as increasing the number of our restaurant remodeled last quarter, we are now targeting the high end of our prior 90 to 95 million cat-bex range for this year.
Speaker 4: transcript
Speaker 4: Looking ahead to 2024, as usual for this time of year, we're in the middle of our planning process, but I can share some early thoughts.
Looking ahead to 2024 as usual for this time of year, we are in the middle of our planning process, but I can share some early thoughts.
Speaker 4: transcript
Speaker 4: We expect food cost inflation to remain in the low single digits.
We expect food cost inflation to remain in the low single digits.
We will lock in most of our contracted items for 2024 over the next couple of months and we'll have a better idea of any variances. When we report Q4 results in February.
Speaker 4: transcript
Speaker 4: We will lock in most of our contracted items for 2024 over the next couple of months, and we'll have a better idea of any variances when we report Q4 results in February .
Speaker 4: transcript
Speaker 4: Labor inflation could tick up to the mid to upper single digits given the added impact of California's AB 1228 bill, which is the bill that replaced the FAST Act.
Labor inflation could tick up to the mid to upper single digits, given the added impact of California's E. B 12, 28, Bill which is the build that replace the fast Act.
Tom Houdek: Looking ahead to 2024, as usual for this time of year, we are in the middle of our planning process, but I can share some early thoughts. We expect food cost inflation to remain in the low single digits. We will lock in most of our contracted items for 2024 over the next couple of months, and we'll have a better idea of any variances when we report Q4 results in February. Labor inflation could tick up to the mid to upper single digits given the added impact of California's AB 1228 bill, which is the bill that replaced the FAT Act.
Speaker 4: transcript
Speaker 4: To note, many of our California-based hourly team members earn near or above the new $20-an-hour minimum wage to be paid at fast-food-type restaurants in the state starting in April 2024.
To note many of our California based hourly team members earn near or above the new $20 an hour minimum wage to be paid at fast food type restaurants in the state starting in April 2024.
But we do expect some impact.
Speaker 4: transcript
Speaker 4: We expect higher menu prices in restaurants throughout the state as operators look to mitigate the added cost.
We expect higher menu prices in restaurants throughout the state as operators look to mitigate the added costs.
Speaker 4: transcript
Speaker 4: We are still finalizing our menu pricing plan for next year, but expect to be able to offset inflationary pressure.
We are still finalizing our menu pricing plan for next year, but expect to be able to offset inflationary pressures.
Tom Houdek: To note, many of our California-based hourly team members earn near or above the new $20 an hour minimum wage to be paid at fast food type restaurants in the state starting in April 2024. But we do expect some impact. We expect higher-menu prices in restaurants throughout the state as operators look to mitigate the added costs. We are still finalizing our menu pricing plan for next year, but expect to be able to offset inflationary pressures. We plan to open four to six restaurants next year, similar to this year, and continue our remodel initiative given the attractive financial return profile. We also intend to continue repurchasing shares.
We plan to open four to six restaurants next year similar to this year and continue our remodel initiative given the attractive financial return profile.
Speaker 4: transcript
Speaker 4: We plan to open four to six restaurants next year, similar to this year, and continue our remodel initiative given the attractive financial return profile. We also intend to
We also intend to continue repurchasing shares.
In conclusion, we know the best way to grow margins and profit is to grow sales recent sales trends have been encouraging with demand for bj's higher quality experience of dining remaining strong and we expect to continue making progress with our sales building initiatives at the same time, we remain committed to productivity and cost savings through our margin improve.
Speaker 4: transcript
Speaker 4: In conclusion, we know the best way to grow margins and profit is to grow sales. Recent sales trends have been encouraging, with demand for BJ's higher quality experience with dining remaining strong, and we expect to continue making progress with our sales building initiatives. At the same time, we remain committed to productivity and cost savings through our margin improvement initiatives, with momentum continuing to build.
<unk> initiatives with momentum continuing to build.
Speaker 4: transcript
Speaker 4: We have a clear path to sales and margins growth ahead, and our long-term strategy and strong consumer appeal for the BJ's concept position us well to continue building on our successes and enhancing shareholder value.
We have a clear path to sales and margins growth ahead, and our long term strategy and strong consumer appeal for the Bj's concept positioned us well to continue building on our successes and enhancing shareholder value.
Tom Houdek: In conclusion, we know the best way to grow margins in profit is to grow sales. Recent sales trends have been encouraging with the man for BJ's higher quality experience of dining remaining strong, and we expect to continue making progress with our sales building initiatives. At the same time, we remain committed to productivity and cost savings through our margin improvement initiatives with momentum continuing to build. We have a clear path to sales and margins growth ahead and our long-term strategy and strong consumer appeal for the BJ's concept position us well to continue building on our successes and enhancing shareholder value.
Speaker 4: transcript
Speaker 4: Thank you for your time today. We will now open up the call to your questions. Operator?
Thank you for your time today.
Now open up the call to your questions operator.
Thank you.
Speaker 1: transcript
Speaker 1: To ask a question, you may press star, then 1 on your telephone keypad. If you're using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star, then 2. At this time, please leave a message.
Ask a question you May press Star then one on your telephone keypad, if youre using a speakerphone. Please pick up your handset before pressing the keys to withdraw your question. Please press Star then two at this time, we will pause momentarily to assemble our roster.
Operator: Thank you for your time today. We'll now open up the call to your questions. Operator? Thank you. So ask a question. You may press star than one on your telephone keypad. If you're using a speaker phone, please pick up your handset before pressing the keys. To withdraw your question, please press star than two. At this time, we will pause momentarily to assemble our roster.
Today's first question comes from Brian Bittner with Oppenheimer <unk> Company. Please go ahead.
Hey, guys, it's Mike Tamas on for Brian Hope you're well.
I think you've talked historically about the fourth quarter margin being a pretty good read on what the next year's full year margin might look like so I'm wondering does that still hold the guidance for like the low 14% range. This year.
What do you think the big variances might be.
Michael Tamas: Today's first question comes from Brian Bittner with Oppenheimer and Company. Please go ahead. Hey guys, it's Mike Tamis on from Brian. Hope you're well. You know, I think you've talked historically about the fourth quarter margin being a pretty good read on what the next year's full year margin might look like. Gold, you know, with the guidance, really, the low 14% range this year. And what do you think the big variances might be if any against that?
If any against that.
Speaker 4: transcript
Speaker 4: Mike, thanks for the question. That's right. If you look back to 2019, our Q4 margins were very consistent or the same as the full year margins.
Mike. Thanks for the question that's right. If you look back to 2019, our Q4 margins were very consistent with the same as the full year margins I would say for this quarter, we do still have cost savings initiatives rolling out through Q4, so the average through the quarter at.
Speaker 4: transcript
Speaker 4: I would say for this quarter, we do still have cost savings initiatives rolling out through Q4. So the average for the quarter at the low 14s, I think the exit rate should be something higher than that. We're still in the process of – there's a couple things on the supply chain side that are meaningful. There's some changes that we're making for efficiencies on our –
Low fourteens.
With the exit rate should be something higher than that we're still in the process of Theres a couple of things on the supply chain side that are meaningful there is some changes that we're making for efficiencies on our.
Speaker 4: transcript
Speaker 4: uh... operating occupancy line which were or starting to implement mid-quarter there's still some some bigger savings that that we should be seeing through the quarter so uh... it's a little different than a typical year but but you're right that is that you keep or is
Operating and occupancy line, which we're starting to implement mid quarter. So theres still some some bigger savings that we should be seeing through the quarter. So it is a little different than a typical year, but you are right. This is Q4 is about an average sales quarter for us where it comes out and we see the margins about where we think they should be for the year, but with.
Michael Tamas: Thanks. I think the exit rate should be something higher than that. We're still in the process of there's a couple things on the supply chain side that are meaningful. There's some changes that we're making for efficiencies on our operating occupancy line, which we're starting to implement mid-quarter. So there's still some bigger savings that we should be seeing through the quarter. So it's a little different than a typical year, but you're right.
Speaker 4: transcript
Speaker 4: about an average sales quarter for us where it comes out and we see the margins about where we we think they should be for the year but with
Speaker 4: transcript
Speaker 4: that added peace that the exit rate should be stronger than given some of the margin improvement and issues that were continuing to execute.
That added piece that the exit rate should be stronger than given some of the margin improvement initiatives that we're continuing to execute on.
Got you Thanks and then.
I know you haven't decided anything yet for 2020 form pricing, but if you didn't take anything and I know, obviously, California is going to.
Michael Tamas: Q4 is about an average sales quarter for us where it comes out. And we see the margins about where we think they should be for the year, but with that added piece that the exit rate should be stronger than given some of the margin improvement issues that we're continuing to execute on. Gotcha. Thanks. And then, you know, I know you haven't decided anything yet for 2024 on pricing, but if you didn't take anything and I know obviously California is going to, you know, force your hand on that.
Or is your hand on that but if you didn't take anything can you just give us a sense for where 2024 pricing would be just with what you are carrying for this year and then if you could can you just give the breakdown of pricing traffic mix for the third quarter.
Speaker 4: transcript
Speaker 4: Sure. So, you know, I think for a base case, there will be some pricing next year. So, as we think about it, we will get some extra carryover because we did take a pricing around in January that was on the heavier side and another one in April . So, again, we're still finalizing the plan, but.
Sure so.
I think for a base case, there will be some pricing next year. So as we think about it we will get some extra carryover because we did take a pricing around in January that was on the heavier side and another one in April so.
Michael Tamas: But if you didn't take anything, can you just give us a sense for where 2024 pricing would be just with what you're carrying for this year? And then if you could, can you just give the breakdown of pricing traffic mix with the third quarter? Thanks. Sure. So, you know, I think for a base case, there will be some pricing next year. So as we think about it, we will get some extra carryover because we did take a pricing round in January that was on the heavier side and another one in April.
Again, we're still finalizing the plan but.
Speaker 4: transcript
Speaker 4: let's say it is something closer to a 3% round taken in-year, we'll have extra pricing flowing through in the year because of the carryover from 2023.
Let's say it is something closer to a 3% round taken and year, we will have extra pricing flowing through in the year because of the carryover from from 2023.
Speaker 4: transcript
Speaker 4: And I'm sorry, Remy, the second part of the question? I was just hoping.
And I'm sorry, the second part of the question.
Just hoping you can give the breakdown from the third quarter.
Michael Tamas: So, again, we're still finalizing the plan, but let's say it is something closer to a 3% round taken in year, we'll have extra pricing flowing through in the year because of the carryover from from 2023. And I'm sorry, were I be the second part of the question? I was just hoping you can give the breakdown from the third quarter. Good, please. Thank you. Oh, sure. So, I mentioned this in the prepare remarks, but the through the third quarter, no extra pricing taken.
Thank you.
Speaker 4: transcript
Speaker 4: Oh, sure. So, um, you mentioned this in, in the, um,
Sure so.
<unk> mentioned this in the.
Speaker 4: transcript
Speaker 4: the prepare remarks, but the, through the third quarter, no extra pricing taken. So pricing in the quarter was closer to in the high sixes or seven percent area. And then we had another pricing round come in in late September . So that put us in that seven to eight percent range.
The prepared remarks, but the.
Through the third quarter, no extra pricing taken so pricing in the quarter was closer to in the high <unk> or 7% area and then we had another pricing round come in in late September so that put us in that 7% to 8% range.
Speaker 3: transcript
Speaker 3: Yeah, so in the quarter 2% dropped off from last year, we replaced it with kind of upper ones. So it brought it down a little bit and kind of our exit rate going into next year, but probably be somewheres in the 6 to 7% range with.
Yes.
In the quarter, 2% dropped off from last year, we replaced that with kind of upper ones. So it brought it down a little bit and kind of our exit rate going into next year would probably be somewhere in the 6% to 7% range.
Michael Tamas: So pricing in the quarter was closer to in the high sixes or 7% area. And then we had another pricing round come in in late September. So that put us in that 78% range. Yeah. So, in the quarter, 2% dropped off from last year. We replaced it with kind of upper ones. So brought it down a little bit. And kind of our exit rate going into next year, but probably these somewhere in the 6% to 7% range.
With frankly with about 2% following falling off in January of 24, So we will probably end up replacing at 2% with something around there a little bit loss, which means the pie start the year somewhere in the 5% to 6% range.
Speaker 3: transcript
Speaker 3: Frankly, with about 2% following following off in January of 24. so we'll probably end up replacing that 2% with something around there a little bit less, which means the price throughout the year.
Right.
Thank you.
Some are actually three seven falls off will replace three seven or something less than that yes that gets us down to the 5% to 6% range.
Speaker 5: transcript
Speaker 5: Actually, 3.7 falls off or we'll play 3.7 with something less than that. Yeah, that gets you down to the 5% to 6% range.
Michael Tamas: Frankly, with about 2% falling off in January at 24. So, we'll probably end up replacing that 2% with something around there a little bit less, which will probably start the year, somewhere in the 5% to 6% range. Thank you. Actually, 3.7 falls off. Well, we'll play 3.7 with something less than that. Yeah, that gets down to the 5% to 6% range. Thanks. You're welcome.
Thanks.
Youre welcome.
The next question comes from Alex Slagle with Jefferies. Please go ahead.
Great. Thanks.
Speaker 6: transcript
Speaker 6: Great, thanks. Just following up on the question on pricing, what was the, did the...
Just following up on the question on pricing what was the.
Ed.
Speaker 6: transcript
Speaker 6: check component, how did that look relative to the pricing?
Check component.
How does that look relative to the pricing.
Terms of thinking about the mix piece of check.
But I'll give you a high level and Tom can add some details there but in general Alex what we've seen in our business is no change in regards to how consumers are ordering and what's our ordering from a check standpoint, but as Tom mentioned on the prepared remarks, we've seen an increase in late night business.
Speaker 3: transcript
Speaker 3: I'll give you a high level and Tom can add some details there, but in general, Alex, what we've seen in our business is no change in regards to how consumers are ordering and what they're ordering from a check standpoint. But as Tom mentioned on the prepared remarks, we've seen an increase in late night business.
Alexander Slagle: The next question comes from Alex Slagle with Jeffries. Please go ahead. Great, thanks. Just following up on the question on pricing, what was the, did the check component, how did that look relative to the pricing, just in terms of thinking about the next piece of check? Well, I'll give you a high level and Tom can add some details there. But in general, Alex, what we've seen in our business is no change in regards to how consumers are ordering and what they're ordering from a check standpoint.
Speaker 3: transcript
Speaker 3: So the late night business has a lower overall average check.
Late night business has a lower overall average check.
Speaker 3: transcript
Speaker 3: So when we start to think about our business, we're seeing about 200 basis points kind of drag, negative drag from a mixed standpoint, which is just, not because consumers are shifting to lower items, it's just the fact that the late night business is accelerating as part of our comp. And on this time, you can...
When we start to think about our business, we're seeing about 200 basis points kind of drag negative drag from a mix standpoint, which is just not because consumers are shifting to lower items. It's just the fact that the late night business is accelerating as part of our comp.
Alexander Slagle: But as Tom mentioned on the prepare remarks, we've seen an increase in late night business. So the late night business has a lower overall average check. So when we start to think about our business, we're seeing about 200 basis points kind of drag, negative drag from a mixed standpoint, which is just not because consumers are shifting to lower items, it's just the fact that the late night business is accelerating as part of our comp.
Tom you can.
Speaker 4: transcript
Speaker 4: Yeah, late night is a certain playing a role. And even though some of our off premise traffic is either growing or...
Yeah late night as certain playing a role and even though some of our off premise traffic as is.
Either growing or some of the.
Speaker 4: transcript
Speaker 4: The cake out check is declining as well. So there's a couple things that are just out, like if we look at purely our on-premise.
The takeout check is declining as well so theres a couple of things that are just like if we look at purely our on premise check that that's where we'll look to see if theres any trap any movements in terms of shifts toward more value oriented items and no change there, but we are seeing some areas of off premise we're check.
Speaker 4: transcript
Speaker 4: Check. That's where we'll look to see if there's any any movements in terms of shifts toward more value-oriented items and no change there. But we are seeing some areas of off premise where check is going down a little and then the late night piece as well, which is great that we're seeing that traffic pick up. It's just shifting some more checks that are a little bit lower of a check in.
Alexander Slagle: Now, Tom, you can. Yeah, late night is certain playing a role and even though some of our off premise traffic is is, you know, either growing or some of the, the cake out check is declining as well. So there's a couple of things that are just out like if we look at purely our on premise check, that that's where we'll look to see if there's any trap, any movements in terms of shifts toward more value oriented items and no change there.
<unk> is going down a little and then the the late night piece as well, which is great that we're seeing that traffic pick up it's just shifting some more checks that are little bit lower of a check in so all in as Greg said in kind of that 1% to 2% band is kind of a delta from the pricing to where our chat.
Speaker 4: transcript
Speaker 4: So all in, as Greg said, in the kind of that 1% to 2% band is kind of a delta from the pricing to where our check growth.
<unk>.
Got it.
Speaker 7: transcript
Speaker 7: got it. And you step back and look across your system of restaurants.
Alexander Slagle: But we are seeing some areas of off premise where where check is going down a little and then the late night piece as well, which is great that we're seeing that traffic pick up. It's just shifting some more checks that a little bit lower of a check in. So all in is Greg said in the how that one to 2% band is kind of a delta from the pricing to where our check growth is. Got it. And you step back and look across your system of restaurants and see what the top tier of restaurants are doing. Those that are driving the strongest traffic growth.
And if you step back and look across your system of restaurants.
Speaker 7: transcript
Speaker 7: See what the top tier of restaurants are doing those that are driving the strongest traffic growth. I mean, is it largely the remodels that drive that? Or there are other sort of differences. Like, service levels or retention or something.
See what the top tier of restaurants are doing those that are driving our strongest traffic growth.
Largely the remodels that drive that or there are other differences like service levels of retention or something else that you'd point to that that drives the strongest outperformance.
Speaker 3: transcript
Speaker 3: Yes, it's an interesting question, Alex, and there's no doubt about it that service levels and restaurants that are well staffed with tenured team members tend to have higher comp sales.
Yes.
Just a question Alex and there's no doubt about it that service levels and restaurants that are well staffed with 10 year key members tend to have higher comp sales.
Greg Levin: I mean, is it largely the remodels that drive that or their other sort of differences like service levels or retention or something else that you'd point to that drives the strongest performance. Yeah, it's an interesting question Alex and there's no doubt about it that service levels and restaurants that are well staffed with 10 year key members tend to have higher comp sales. And we saw that coming out of COVID and I know it's sometimes weird to talk back to COVID, but we saw that those restaurants have continued.
Speaker 3: transcript
Speaker 3: And we saw that coming out of COVID. And I know it's sometimes weird to talk to COVID, but we saw that and those restaurants have continued. I think the other side of it is when we look across our
And we saw that coming out of Covid and I know, it's sometimes weird solus hop back to Covid, but we saw that in those restaurants have continued.
I think the other side of it.
Is when we look across our system, California, and I know Youre up there in the Bay area of California is probably the last state to kind of feel free of Covid. So to speak. So they are still as we think about the third quarter that was kind of that pent up demand last year in the third quarter and Thats, what we saw maybe a little bit of the biggest.
Speaker 3: transcript
Speaker 3: California and I know you're up there in the Bay Area. California is probably the last state to kind of feel free of COVID so to speak. So there's still as we think about the third quarter, there was kind of that 10th up demand last year in the third quarter.
Speaker 3: transcript
Speaker 3: And that's where we saw maybe a little bit of the biggest shake out in the third quarter when sales often, even a top in across all geographies.
Shake out in the third quarter when sales softened, even though it's softened across all geographies and as we've gotten into October all those geographies have come back, including California is probably coming back a little bit stronger so a tad on geography, but at the end of the day, it's really service levels.
Greg Levin: I think the other side of it is when we look across our system, California and I know you're up there in the Bay area, California is probably the last state to kind of feel free of COVID so to speak. So there's still as we think about the third quarter, there was kind of that 10th up demand last year in the third quarter. And that's where we saw maybe a little bit of the biggest shake out in the third quarter when sales often, even those often across all geographies.
Speaker 3: transcript
Speaker 3: And I think that in October , all those yoghies have come back, including California's, probably coming back a little bit stronger.
Speaker 5: transcript
Speaker 5: So, a tad on geography, but at the end of the day, it's really service levels I think that have played a bigger portion in our business. That's helpful. Thank you. Thank you.
Played a bigger portion in our business.
It's helpful. Thank you.
Youre welcome.
The next question comes from Josh <unk> with Stephens, Inc. Please go ahead.
Greg Levin: And I think that in October, all those geographies have come back including California is probably coming back a little bit stronger. So a tad on geography, but at the end of the day, it's really service levels. I think I've played a bigger portion in our business, is helpful. Thank you.
Thanks for taking the question this is <unk> on for Josh.
Speaker 8: transcript
Speaker 8: Thanks for taking the question. This is Tyler Prouse on for Josh. I would love to hear more about just the general pricing philosophy of BJs. And where do you stand on third party pricing? I could think in the past we've talked about pricing tiers. So any update on that would be great. And then the second one, if the industry were to shift to more of a value sentiment, how would you approach that situation?
Would love to hear more about just the general pricing philosophy at Bj's, and where do you stand on third party pricing I think in the past you've talked about pricing tiers. So any update on that would be great. And then just a second one if the industry were to shift to more of a value sentiment how would you approach that situation.
Tyler Prause: You're welcome. The next question comes from Josh Long with Steven Zink. Please go ahead. Thanks for taking the question. This is Tyler Prausson for Josh. I would love to hear more about just the general pricing philosophy of BJ's. And where do you stand on third-party pricing? I could think in the past we've talked about pricing tiers, so any update on that would be great. And then the second one, if the industry were to shift to more of a value sentiment, how would you approach that situation?
Speaker 3: transcript
Speaker 3: Yeah, I'll give you some more philosophical. I think Tom might be able to add some mechanics in there as well. Look, our pricing strategy is at least to be around a good, better, best, good, better, best pricing strategy. The good.
Yes.
Give you some more philosophical I think Tom Michael to add some mechanics in there as well plus our pricing strategy is always to be around a good better best.
Good better best pricing strategy.
Good.
Speaker 3: transcript
Speaker 3: is our value items are items that we call KDI known value items. Meaning we want to make sure our burger or chicken off radio and other items that you might see across different casual dining concepts is very competitive.
Our value items are items that we call kei known value items, meaning we want to make sure our burger our chicken Alfredo and other items that you might see across different casual dining concept is very competitive.
Tyler Prause: Yeah, I'll give you some more philosophical part of the topic, so add some mechanics in there as well. Look, our pricing strategy is at least to be around a good, better, best pricing strategy. The good is our value items, our items that we call KDI, known value items, meaning we want to make sure our burger or chicken off-ray dough and other items that you might see across different casual dining concepts is very competitive.
Speaker 3: transcript
Speaker 3: And then we want to have the ability for guests that want to end gold and know that they're coming to a higher quality casual dining concept that might want to double building pork chop. They might want to fill a or the rib eye. Those all out guest to kind of price up a little bit, including things that aren't our slowest menu. The same thing actually goes for the bar and the beer side, but we've been really working on what I would consider a best in class bar statement.
And then then we wanted to have the ability for guests that want to indulge and know that they are coming to a higher quality casual dining concept that might want to double bone in pork chop they might want to <unk> or the ribeye. Those all allow guests to kind of price up a little bit including things that R&R slow roast menu at the same thing actually goes for the bar.
The beer side, though we've been really working on what I would consider a best in class bar statement and it's allowed us to have some higher end bar.
Tyler Prause: And then we want to have the ability for guests that want to indulge in note that they're coming to a higher-quality casual dining concept that might want to double-build and pork chop. They might want the foie or the rib eye, those all out guest to price up a little bit, including things that aren't our slowest menu. The same thing actually goes for the bar, and in the beer side, where we've been really working on what I would consider a best-than-class bar statement, and it's allowed us to have some higher-end bar drinks or cocktails that guests want to spend up, they can, but they're getting a higher quality for it.
Speaker 3: transcript
Speaker 3: and it's allowed us to have some higher-end bar drinks or cocktails that guests want to spend up the can, but they're getting higher quality for it. They're getting uniqueness and differentiated in what we call the Bruhouse Theater.
Bar drinks or cocktails that guests want to spend up they can but theyre getting higher quality for their getting uniqueness and differentiate in what we call. The brewhouse theatre at the same time as part of our menu strategy as well our pricing strategy, we have our daily brewhouse specials. So those allow for guests to come in on specific days and get something at a re.
Speaker 3: transcript
Speaker 3: At the same time as part of our menu strategy as well or pricing strategy, we have our Gavi Brute
Speaker 3: transcript
Speaker 3: So those allow for guests to come on specific days and get something at a really good value from a price point, whether it's our slow road Thursdays or around $19, you can get a rack of ribs, two sides, starter salad and a full positi dessert.
Good value from a price point, whether it's our slow roast Thursdays went around $19 you can get a rack of ribs, two sides starter salads and a full possession dessert.
Tyler Prause: They're getting uniqueness and differentiated in what we call the brew house theater. At the same time, as part of so those allow for guests to come on specific days and get something at a really good value from a price point, whether it's our slow road Thursdays or around $19, you can get a rack of ribs, two sides, starter salad, and a full-positive dessert. That drives actually a lot of guests into our restaurants because it's something that we can do and differentiate it from a quality standpoint.
Speaker 3: transcript
Speaker 3: That drives, obviously, a lot of guests into our restaurants because it's something that we can do and differentiate it from a quality standpoint.
That drives obviously a lot of guests into our restaurants, because its something that we can do and is differentiated from a quality standpoint. So we're going to continue to balance across that we also have our lunch specials as well so depending on how the economy is or how we want to target guests in certain market, sometimes we will target them with a value statement around.
Speaker 3: transcript
Speaker 3: So we're gonna continue to balance across that. We also have our lunch specials.
Speaker 3: transcript
Speaker 3: as well. So depending on how the economy is or how we want to target guests in certain markets.
Speaker 3: transcript
Speaker 3: Sometimes we'll target them with a value statement around our lunch specials or our daily brewhouse specials.
Our lunch specials or our daily brewhouse specials at times, we will target them around some of the indulgent items or some of the limited time only items that kind of drive a fear of missing out our spooky Zaki perfectly played into that that drove a fomo from our guest standpoint, we need to come in the restaurant and get.
Speaker 3: transcript
Speaker 3: Other times we'll target them around some of the indulgent items or some of the limited time only items that kind of drive a fear of missing out. Our spooky Pizuki perfectly played into that. That drove a FOMO from our guest standpoint. We need to come in the restaurant and get this Pizuki before it disappears.
Tyler Prause: So we're going to continue to balance across that. We also have our lunch specials as well. So depending on how the economy is or how we want to target guests in certain markets, sometimes we'll target them with a value statement around our lunch specials or a daily brew house specials. Other times, we'll target them around some of the indulgent items or some of the limited time-only items that kind of drive a fear of missing out.
This to Vicki before it disappears. So it's a combination of different areas that we want to target based on those individual restaurants as well as the macro environment and then sometimes you want to add anything specific charge of our pricing.
Speaker 3: transcript
Speaker 3: So it's a combination of different areas that we want to target based on those individual restaurants, as well as the macro environment. And then sometimes you want to add anything specific towards our pricing.
Tyler Prause: Our spooky Pizuki perfectly played into that. That drove a fomo from our guest standpoint. We need to come in the restaurant and get this Pizuki before it disappears. So it's a combination of different areas that we want to target based on those individual restaurants, as well as the macro environment, and then, sometimes you don't add anything specific towards our pricing. Sure. In terms of the third-party pricing, we did implement an extra 10% or approximately across our third-party platforms.
Speaker 4: transcript
Speaker 4: Sure, and in terms of the third-party pricing, we did implement an extra 10% or approximately across our third-party platforms, so that's in place, and in terms of tiers, we are going through a re-tiering process right now, and some of that due to California needing to be separated out for some other restaurants because of new minimum wage, as well as there were some changes on the rules around pork products here as well, which increased some costs.
In terms of the third party pricing, we did implement an extra 10% or approximately across our third party platform. So thats in place and in terms of tiers, we are going through a rehearing process right now and some of that due to California and needing to be separated out for some other restaurants because of that.
The new minimum wage as well as there were some changes on the rules around pork products here as well, which increase some cost and we're also just looking at to see which restaurants should be paired together in terms of.
Tyler Prause: So that's in place. In terms of tiers, we are going through a re-tiering process right now, and some of that, due to California needing to be separated out for some other restaurants because of now minimum wage, as well as there were some changes on the rules around pork products here as well, which increase some cost. And we're also just looking at to see which restaurants should be paired together in terms of sensitivities that we can measure.
Speaker 4: transcript
Speaker 4: We're also just looking to see which restaurants should be paired together in terms of sensitivities there that we can measure. So that process is ongoing and should be something that we roll out next year.
Sensitivities there that we can measure so that processes is ongoing.
Should be something that we rollout next year.
Speaker 4: transcript
Speaker 4: And I think I'll just echo to you what Greg said about the promotions. We've never backed down from our promotions So in if there's other promotions ramping up, we still have some great daily bros busels promotions out there great happy hour promotions great lunch
I think I'll, just echo what Greg said about the promotions, we've never backed down from our promotions. So and if there is other promotions ramping up we still have some great daily brewhouse specials promotions out there great happy hour promotions great lunch.
Speaker 4: transcript
Speaker 4: value as well. So it's, you know, when we, when we market it is
<unk> as well so we believe when we market. It is about brand building, but it's also there is a mix in there too about getting the awareness out to drive traffic in for these promotions and we're even looking at the promotions that these are the right ones if theres ones that can drive even more traffic. So I think the.
Speaker 4: transcript
Speaker 4: About brand building, but it's also there's a mix in there too about getting the awareness out to drive traffic in for these promotions. Then we're even looking at the promotions that these are the right ones that there's ones that can drive even more traffic. So I think the, you know, I don't as we look at the landscape. There's certain.
Tyler Prause: So that process is ongoing, and you know, should be something that we roll out next year. And I think I'll just echo to what Greg said about the promotions. We've never backed down from our promotions. So in if there's other promotions ramping up, we still have some great daily Brussels promotions out there, great happy hour promotions, great lunch value as well. So when we market, it is about brand building, but it's also there's a mix in there too about getting the awareness out to drive traffic in for these promotions.
Tyler Prause: Then we're even looking at the promotions that these are the right ones that there's ones that can drive even more traffic. So I think the, you know, I don't, as we look at the landscape, there's certain brands out there that are using more promotions now or more value. And I think we've got a good mix already in a really attractive one that'll guide people in any of these forward-looking type of environments.
As we look at the landscape there is certain.
Speaker 4: transcript
Speaker 4: branch out there that are using more promotions now or more value. And I think we've got a good mix already in a really attractive one that'll guide people in any of these forward looking type of
Brands out there that are using more promotions now or more value and I think we've got a good mix already in a really attractive one middle people in.
Any of these.
Looking type of environments.
Great I appreciate all the color there Super helpful and just one follow up so the G&A kind of coming in below low end of the range for 'twenty three as carrier is encouraging and I'm just trying to think how you.
Speaker 8: transcript
Speaker 8: Great. I appreciate all the color there. Super helpful. And just one follow-up. So the GNA kind of coming into low end of the range for 23 is encouraging. And I'm just going to think how you're thinking about GNA, you know, going into for your 24.
Are you thinking about G&A going into full year 2014.
Speaker 3: transcript
Speaker 3: Yeah, so right now in the middle of our of our budget season, but our goal always on G and A is to grow it at a rate less than top line sales. So we can leverage it going forward. So we'll, as we continue to put together our plan and look what our revenues might be for next year, we'll make sure that we're looking at G and A and going, it's got to be below that. So we can get leverage going forward.
Yes, so right now in the middle of our budget season, but our goal always on G&A is to grow it at a rate less than top line sales. So we can leverage it going forward. So as we continue to put together our plan and look what our revenues might be for next year, we will make sure that we're looking at G&A and gone in.
Tyler Prause: Great. I appreciate all the color there, super helpful and just won't follow up. So the GNA coming coming in the lower end, low into the range for 23 is current is encouraging. And I'm just going to think how you're thinking about GNA, you know, going into for your 24. Yeah, so right now in the middle of our budget season, but our goal always on GNA is to grow it at a rate less than top line sales, so we can leverage it going forward.
Scott <unk> below that so we can get leverage going forward.
So there.
Yes.
Okay.
Okay. Thank you.
Tyler Prause: So we'll as we continue to put together our plan and look what our revenues might be for next year, we'll make sure that we're looking at GNA and going, it's got to be below that so we can get leverage going forward. So there? Yes, it's all for me. Okay, thank you.
The next question comes from Andrew Wolf with C. L. King. Please go ahead.
Speaker 1: transcript
Speaker 1: The next question comes from Andrew Wolf with C.L. King. Please go ahead.
Thank you good afternoon, I wanted to switch to.
Speaker 9: transcript
Speaker 9: Thank you. Good afternoon. I want to switch to your lower cost to build the new restaurant.
You are lower cost to build the new restaurants and.
Speaker 9: transcript
Speaker 9: Kind of a basic question, is that necessary?
Just kind of a basic question is that necessary.
To get to the the IRR hurdles you have talked about before which I think is 20%.
Speaker 9: transcript
Speaker 9: Get to the IRI hurdles you've talked about before, which I think is 20% or what.
Andrew Wolf: The next question comes from Andrew Wolfe with CL King, please go ahead. I thank you.
Or was the.
Speaker 9: transcript
Speaker 9: better than expected sales at the restaurants have been achieving already getting you there. And I also wanted to just say.
Better than expected sales of the restaurants have been achieving already getting you there and I also wanted to just ask you a math question I'm getting to about a 2% to 3% higher.
Unknown Executive: Good afternoon. I want to switch to your lower cost to build the new restaurants and kind of a basic question, is that necessary? I mean, to get to the IRI hurdles you have talked about before, which I think is 20% or was the better than expected sales at the restaurants have been achieving already getting you there? And I also wanted to just ask you a math question, I'm getting to about a 2 to 3% higher return on investment by bringing the cost down a million dollars. I just wanted to run that as a reality check.
Speaker 9: transcript
Speaker 9: math question. I'm getting to about a two to three percent higher
Return on investment.
Speaker 9: transcript
Speaker 9: by bringing the cost down a million dollars just wanted to run that value as a reality.
By bringing the costs down $1 million, just wanted to run that value as a reality check.
Speaker 3: transcript
Speaker 3: And it's a great question, actually, and we always continue to look at our prototypes over years to make sure we're basically building the right prototype for our business.
And it's a great question actually and we always continue to look at our prototypes over years.
To make sure we're basically building the right prototype for our business.
Speaker 3: transcript
Speaker 3: And I think as we continue to look at it and evolve our menu and other things, we tend to make adjustments that we seem to be, that seem to make sense for us going forward. So while the million dollar reduction investment cost will help us drive our ROI, as you just said, and you can kind of put it in there and look where our WSA is and drive the margins, some of the changes in there will allow us to be more efficient around how we run our restaurant.
And I think as we continue to look at it and evolve our menu and other things we tend to make adjustments that we seem to be that seem to make sense for us going forward. So while the million dollar.
Greg Levin: And it's a great question, actually, and we always continue to look at our prototypes over years to make sure we're basically building the right prototype for our business. And I think as we continue to look at it and evolve our menu and other things, we tend to make adjustments that we seem to make sense for us going forward. So while the million dollar reduction investment cost will help us drive our ROI, as you just said, you can kind of put it in there and look where our WSAs drive the margins, some of the changes in there will allow us to be more efficient around how we build our, around how we run our restaurants.
And the reduction of investment costs will help us drive our ROI as you just said and you just kind of put it in there and look at where our WSI is and drive the margins. Some of the changes in there will allow us to be more efficient around how we build our around how we run our restaurants.
Speaker 3: transcript
Speaker 3: Reducing some of the square footage, the way we set up our bar statement allows us some efficiencies there and then some of the changes in the kitchen with team members. We always want to optimize it that way. The other side of it as well is we want to continue to understand how the consumer preferences are changing. Some of it comes down to off premise and where we're building our...
Reducing some of the square footage the way we set up our bar statement allows us some efficiencies there and then some of the changes in the kitchen with key members. So we always want to optimize it that way the other side of it as well we want to continue to understand how the consumer preferences are changing some of it comes down to off premise and where.
We're building our restaurants, so if we're building our restaurants in certain markets, maybe in California, we might use a little bit of a larger format. Because we know the California brand awareness of the Bj's concept going into some of the different markets that might be a little bit smaller having a smaller prototypes going to give us better efficiencies in those restaurants.
Speaker 3: transcript
Speaker 3: So if we're building our restaurants in certain markets, maybe in California, we might use a little bit of a larger format because we know the California brand awareness of the media concept going into some of the different markets that might be a little bit smaller. Having a smaller prototype is gonna give us better efficiency than those restaurants.
Greg Levin: I'm reducing some of the square footage, the way we set up our bar statement allows us some efficiencies there, and then some of the changes in the kitchen with key members. So we always want to optimize it that way. The other side of it as well is we want to continue to understand how the consumer preferences are changing. Some of it comes down to off-premise and where we're building our restaurants. So if we're building our restaurants in certain markets, maybe in California, we might use a little bit of a larger format because we know the California brand awareness of the media concept going into some of the different markets that might be a little bit smaller.
Speaker 3: transcript
Speaker 3: So it's a combination of both of those things, but even as we look to build this current prototype for next year, Greg Lenz, who's actually at a real estate conference this week, and his team is actually looking at what that next evolution is going to look like with a couple other changes that, again, continue to optimize not only to cost it, but optimize the way we can execute within the four walls of the restaurant.
So it's a combination of both of those things, but even as we look to build the current prototype for next year.
Greg Lynds, who is actually at a real estate conferences. This week and his team is actually looking at what that next evolution is going to look like with a couple of other changes that again continue to optimize not only the cost of it optimize the way we can execute within the four walls of the restaurant.
Greg Levin: Having a smaller prototype is going to give us better efficiencies in those restaurants. So it's a combination of both of those things, but even as we look to build this current prototype for next year, Greg Lynn, who's actually at a real estate conference this week, and his team is actually looking at what that next evolution is going to look like with a couple other changes that again continue to optimize, not only to cost it, but optimize the way we can check the keys within the four walls of the restaurant. Andrew, and just as you mentioned your math, that's right. The million dollars coming out of the build cost improves the return volume in that 3% area.
Speaker 4: transcript
Speaker 4: Andrew, and just to, as you mentioned your math, that's right, the million dollars coming out of the build cost improves the return by in that 3% area.
And Andrew and just.
Unknown Executive: Great, thank you for the color Greg and the feedback.
As you mentioned your math, that's right the $1 million coming out of the build cost improves the return by in that 3% area.
Great. Thank you for the color, Greg and then.
The feedback.
Speaker 9: transcript
Speaker 9: feedback. I have a kind of analogous question, this is my last question, on the remodels. You know, I'm just trying to sort of...
And then I have a kind of analogous question as my last question on the.
On the Remodels.
I'm, just trying to sort of back into the sales lift.
And.
Speaker 9: transcript
Speaker 9: I would assume it's a little less than a $1 for $1 because incremental profit margins better. I just want to sort of check that would, or...
Yes.
I would assume it's a little less than a one for one dollar for dollar because incremental.
Profit margins better just wanted to check that.
Or are you able to talk to directly what the sales lifted.
Unknown Executive: And I have a kind of analogous question, my last question on the on the remodels. You know, I'm just trying to sort of back into the sales lift and I would assume it's a little less than a one-for-one dollar for dollar because incremental profit margins better. I just want to sort of check that would or are you able to talk to directly what the sales lift is.
Sure Andrew.
<unk>.
Speaker 4: transcript
Speaker 4: The way that we've been growing out these remodeled, there's a couple different scopes. So the...
The way that we've been rolling out. These remodels there is a couple of different scopes. So the the lower scope, where we've been adding a few extra booths and doing some of the touch ups around the restaurants, that's about 250000 and those ones are seeing in the neighborhood of.
Speaker 4: transcript
Speaker 4: The lower scope, where we've been adding a few extra booths and doing some of the touch ups around the restaurants, that's about 250,000. And those ones are seeing in the neighborhood of...
About $1000 or $500 extra on a weekly sales basis, which to your point, it's incremental traffic and flow through on that is nice. So we're seeing that returns in the 20% or higher.
Speaker 4: transcript
Speaker 4: About a thousand dollars or fifteen hundred dollars extra on a weekly sales basis.
Unknown Executive: Sure, Andrew, the way that we've been growing up these remodels, there's a couple different scopes. So the lower scope where we've been adding a few extra booths and doing some of the touch ups around the restaurants, that's about 250,000. And those ones are seeing in the neighborhood of about a thousand dollars or 1500 dollars extra on a weekly sales basis. Which to your point, it's incremental traffic and the flow through on that is nice.
Speaker 4: transcript
Speaker 4: which to your point it's incremental traffic and the flow through on that is nice. So we're seeing that returns in the 20% or higher.
Speaker 4: transcript
Speaker 4: The larger scope remodel that Greg mentioned and these are the ones that we actually like even more because it really is brand building and traffic driving and we can redo the bars and do painting on the outside and put on new murals and brighten up the dining rooms and reconfigure some of the booths.
The larger scope remodels that Greg mentioned and these are the ones that we actually like even more because it really is brand building and traffic driving and redo the bars and do painting on the outside and put on new murals and brighten up.
The dining rooms, and reconfigure some of the boost.
Speaker 4: transcript
Speaker 4: these remodels can be $600,000 or $700,000 or even a little higher, and we're still seeing the same type of return. So it is, as we think of the sales lift, we're seeing a multiple of that type of sales lift in these restaurants.
Remodels can be six or 700000, or even a little higher and we're still seeing the same type of return. So it is as we think of the the sales lift we're seeing.
Unknown Executive: So we're seeing that returns in the 20% or higher. The larger scope remodels that Greg mentioned, and these are the ones that we actually like even more because it really is brand building and traffic driving and we can redo the bars and do painting on the outside and put on new murals and brighten up the dining rooms and reconfigure some of the booths. This remodels can be six or 700,000 or even a little higher and we're still seeing the same type of return. So it is, as we think of the sales lift, we're seeing a multiple of that type of sales with these restaurants.
Unknown Executive: Okay, thank you very much.
At a multiple of that type of sales lift in these restaurants.
Okay. Thank you very much helpful.
Thank you Andrew.
The next question comes from Nick <unk> with Wedbush Securities. Please go ahead.
Speaker 1: transcript
Speaker 1: The next question comes from Nick Setian with Wed Bush Securities. Please go ahead.
Unknown Executive: Thank you, Andrew.
Speaker 10: transcript
Speaker 10: Thank you. Appreciate the month of cadence of the quarter progress. And obviously, you know, the October take up.
Thank you.
I appreciate the monthly cadence as the quarter progressed and obviously the October takeout.
Speaker 10: transcript
Speaker 10: Any way to kind of parse out, you know, this was sort of x percent with seasonality and the rest was some kind of a consumer slowdown. I know it's a very difficult question.
Any way to kind of parse out this was sort of X percent with seasonality on the Ross was some kind of a consumer slowdown I know, it's a very difficult question, but.
Nick Settian: The next question comes from Nick Settian with Wedbush Securities. Please go ahead. Thank you. Appreciate the month of cadence of the quarter progress and obviously, you know, the October take up. Any way to kind of parse out, you know, this was sort of x percent with seasonality and the rest was some kind of a consumer slow down. I know it's a very difficult question, but it would also help us have some confidence in terms of, you know, the go forward trend as well. You know, if it was seasonality and low single digit comp for Q4, you know, make sense. But if there was something else that you thought, you know, perhaps we should be a little bit more concerned.
Speaker 10: transcript
Speaker 10: It would also help us give, you know, it would also help us have some confidence in terms.
It would also help us again.
It would also help us have some confidence in terms of.
Speaker 10: transcript
Speaker 10: you know, to go forward trend as well, you know, if it was seasonality, then low single and the logic comp for Q4, you know, makes sense. But if there was something else that you thought, you know, perhaps we should be a little bit more.
The go forward.
<unk> is while even if it was seasonality and low single digit comp for Q4 makes sense.
There was something else that you saw perhaps.
Should be a little bit more concerns.
Yes, Nick.
Speaker 3: transcript
Speaker 3: Obviously a great question and we all are trying to, you know, decipher different things that, as you just mentioned there. I think the biggest things for us, when we look at this number and look at what happened in the quarter and think about where we are today is, and look, I've been doing this for a long time. I don't think I've ever seen an August weekly sales average above July .
Obviously, a great question and what we are trying to decipher different things as you just mentioned that I think the biggest thing for us when we look at this number and looked at what happened in the quarter and you think about where we are today.
And look I've been doing this a long time I don't think I've ever seen in August weekly sales average above July.
Speaker 3: transcript
Speaker 3: whether it was my days back in you know California Peace Occasion of the Public Company to be a you generally see a movement from coming out of June into July , lower August and then a lower September .
Whether it was my days back in California, Pizza kitchen, as a public company to Vijay you generally see a movement from coming out of June into July lower August and then the lower September.
Greg Levin: Nick, obviously a great question and what we all are trying to, you know, decipher different things that, as you just mentioned there, I think the biggest things for us when we look at this number and look at what happened in the quarter and think about where we are today. And look, I've been doing this for a long time. I don't think I've ever seen an August weekly sales average above July. Whether it was my days back in, you know, California Peace Occasion of the public company to be just you generally see a movement from coming off of June into July, lower August and then a lower September.
Speaker 3: transcript
Speaker 3: And as we were going through it, it was just, I wouldn't say odd. It's just a trend we haven't seen where August sales are higher than July sales.
And as we have gone through it. It was just I wouldn't say odd is this a trend we havent seen where August sales are higher in July sales.
Speaker 3: transcript
Speaker 3: And then as we did the same thing, kind of to your question there, we started looking at how October , November , and December played out and compared it to 19. and last year in 2022, October , November , December played very traditional in regards to seasonality.
And then as we said the same thing kind of to your question. There. We started looking at how October November and December played out and compared it to 19.
And last year in 2022 October November December played very traditional in regards to seasonality.
Speaker 3: transcript
Speaker 3: So that's where we kind of looked at it. And then...
Greg Levin: And as we were going through it, it was just, I wouldn't say odd, it's just a trend we haven't seen where August sales are higher than July sales. And then as we did the same thing kind of to your question there, we started looking at how October, November and December played out and compared it to 19. And last year in 2022, October and November played very traditional in regards to seasonality. So that's where we kind of looked at it.
So thats, where we kind of looked at it and then as soon as September was over and we went into October ourselves just bounce back by that.
Speaker 3: transcript
Speaker 3: As soon as September was over and we went into October , our sales just bounced back by that, more than 500 basis points.
More than 500 basis points that Tom talked about and while we have some great promotion around spooky Zaki and some other things that we've done that are.
Speaker 3: transcript
Speaker 3: And while we had some great promotion around spooky Pizuki and some other things that we've done that are specific to BJs, that type of turnaround really gave us much more of a view that this was kind of going, this was really the consumer moving back to normal seasonality. Additionally, where we saw it, just getting a little bit more granular per se, is we kind of saw it in that second, secondish week, the third week of August , right when school started to come back in the session.
Specific to Bj's that type of turnaround really gave us much more of a view that this was kind of going this is really the consumer moving back to normal seasonality. Additionally, where we sought to scan a little bit more granular per se as we kind of thought in that second second this week. The third week of August right when schools.
Greg Levin: And then. As soon as September was over and we went into October, our sales just bounced back by that, you know, more than 500 basis points that Tom talked about. And while we had some great promotion around spooky Pizuki and some other things that we've done that are specific to BJs, that type of turnaround really gave us much more of a view that this was kind of going, this was really the consumer moving back to normal seasonality.
Darted to come back into session I know, both you and I grew up here in California, and I remember starting school after labor day that no longer happens.
Speaker 3: transcript
Speaker 3: I know both you and I grew up here in California, and I remember starting school after Labor Day. That no longer happens.
Speaker 3: transcript
Speaker 3: anymore, and as kids went back to school in August .
Any more and as kids went back to school in August that's when we started to see that slowdown.
Speaker 3: transcript
Speaker 3: That's where we started to see that slowdown come through. The other side of it is California, which with 60 plus restaurants in California, that's gonna have a big delta on our business. Now we're probably saying you can see in the black box data as well. California probably came down the most and then it's come back the most.
Through the other side of it is California, which with with 60 plus restaurants in California, that's going to have a big Delta on our business and I would probably say and you can see in the black box data as well, California, probably came down the most and then it's come back the most.
Greg Levin: Additionally, where we saw it, just getting a little bit more granular per se, is we kind of saw it in that second, second this week, the third week of August, right when school started to come back in the session. I know both you and I grew up here in California and I remember starting school after Labor Day. That no longer happens anymore. And as kids went back to school in August, that's where we started to see that slow down come through.
Speaker 3: transcript
Speaker 3: And California was one of those states that also came out of COVID, the, the last.
And California was one of those.
States that also came out of Covid. The last so to speak I, even remember myself personally in 2021 still facing COVID-19 here in California.
Speaker 3: transcript
Speaker 3: So, Steve, I even remember, you know, myself personally in 2021 still facing COVID here in California and regulations and so forth. So I think California had much more of a perlacovitrium revenge dining last year in 2022.
Greg Levin: The other side of it is California, which, you know, with with 60 plus restaurants in California, that's going to have a big delta on our business. And I would probably say you can see in the black box data as well. California probably came down the most and then it's come back to most. And California was one of those states that also came out of COVID the last so speak. I even remember, you know, myself personally in 2021 still facing COVID here in California and regulations and so forth.
Regulations, and so forth. So I think California had much more of a for lack of a better term revenge dining last year in 2020 tail.
Speaker 3: transcript
Speaker 3: And as I said, as quickly as we saw it come in August , we've seen it reverse here in October . And we always say this on our calls as well, look, this is where our sales are right now. Just like when we reported in Q3, we were talking about where our sales were in July at that time frame. I don't know if Tom's going to add anything to that.
And as I said as quickly as we saw it come in August we've seen that reverse here in October.
And we always say this on our calls as well this is where our sales are right now just like when we reported in Q3, we were talking about where our sales were in July at that timeframe.
Thomson add anything to that.
Greg Levin: So I think California had much more of a for lack of a better term revenge dining last year in 2022. And as I said, as quickly as we saw it come in August, we've seen a reverse year in October. And we always save this on our calls as well. Look, this is where our sales are right now, just like when we reported in key three, we were talking about where our sales were in July at that time frame.
Yes.
Speaker 4: transcript
Speaker 4: Yeah, and Greg covered most of it. And just the one other aspect, and we mentioned this in the prepared remarks, was around the 19 comp. And when we looked at our sales through, you know, the same cadence through each of the periods, each of the month, it was very consistent. And we hit September where we had a pricing round rolling in from 19. We saw
Greg covered most of it and just the one other aspect and we mentioned this in the prepared remarks was around the 19 comp and when we looked at our sales through.
At the same cadence through each of the periods each of the months it was very consistent and <unk>.
Hit September where we had a pricing round rolling in from 19, we saw the the comp gets a little bit on the three year basis, and then when we took our pricing around at the end of September we saw it step back up so.
Speaker 4: transcript
Speaker 4: the the comp did a little bit on the three-year basis and then when we took our pricing round at the end of September we saw it step back up so it it was following very closely to the the patterns that we would have expected on a 19 basis that if the seasonality was the same as it was pre-COVID so the you know all of the the evidence that we're looking at is pointing to the the 2022 seasonality was the difference in the quarter
Greg Levin: So I'm trying to add anything to that. And Greg covered most of it. And just the one other aspect, and we mentioned this in the prepare remarks was around the 19 comp. And when we looked at our sales through, you know, the same cadence through each of the periods, each of the month, it was very consistent. And we hit September where we had a pricing round rolling in from 19. We saw the comp dip a little bit on the three-year basis.
It was following very closely to the patterns that we would've expected on a 19 basis. If the seasonality was the same as it was pre COVID-19. So the.
All of the evidence that we're looking at is pointing to the 2022 seasonality was the.
The difference in the quarter.
Greg Levin: And then when we took our pricing round at the end of September we saw it step back up. So it was following very closely to the patterns that we would have expected on a 19 basis that if the seasonality was the same as it was pre-COVID. So all of the evidence that we're looking at is pointing to the 2022 seasonality was the difference in the quarter. So nothing in terms of less a patch rate, you know, trade down, anything else you're seeing that would kind of imply consumers are becoming a little bit more cautious.
Speaker 10: transcript
Speaker 10: So nothing in terms of less attached rates, trade down, anything else you're seeing that would kind of imply consumers are becoming a little bit more cautious.
So nothing in terms of less attach rates.
Trade down anything else Youre seeing that would kind of imply consumers are.
Becoming a little bit more cautious.
Speaker 4: transcript
Speaker 4: That's right. We pull it by week, looking at the incidence rates, things we want to be selling, the pizookie and alcohol, any beverage appetizers, the things that if there is some check management, you would see it on, and also seeing the more value-oriented sides of our menu, our happy hour, our lunch value, and daily brewed specials, and looking by the week, and this is looking actually both to last year as well as 19, it's, there's no, it looks very consistent as we go through the weeks and through the periods.
That's right we pull it by week looking at the incidence rates things, we want to be selling the bogie in alcohol beverage appetizer is the things that if there is some check management you would see it on and also seeing the more value oriented sides of our menu our happy hour lunch value in daily Brewhouse specials and looking by the week and this is Lee.
Looking actually both for last year as well as at <unk> 19, its theres no. It looks very consistent as we go through the weeks and through the periods. So no shifts in those types of metrics that would signal some type of a check management or the consumer pulling back.
Greg Levin: That's right. We pull it by week looking at the incidence rates, things we want to be selling, the cookie and alcohol, any beverage appetizers, the things that if there is some check management, you would see it on. And also seeing that the more value oriented sides of our menu are happy hour, lunch value, and daily brew of specials. And looking by the weekend, this is looking actually both to last year as well as 19.
Speaker 4: transcript
Speaker 4: So no ships in those types of metrics that would signal some type of a check management or the consumer pulling back.
Speaker 10: transcript
Speaker 10: Anything in terms of the holiday, the holiday seasons and how that might impact or benefit Q4 this year versus last year to be aware of?
Anything in terms of the holiday.
The holiday seasons, and how that might impact or benefit Q4, this year versus last year to be aware of.
Greg Levin: There's no, it looks very consistent as we go through the weeks and through the periods. So no shifts in those types of metrics that would signal some type of a check management or the consumer pulling back.
Compared to last year so.
Speaker 4: transcript
Speaker 4: Christmas will fall on a Monday versus a Sunday. So there's a mod of benefit there, but that might be 20 basis points for all in for the quarter. So, you know, a little help, but very, you know, there's not like, you know, New Year's Day falling in or out of a year, which can swing Q4 a little more dramatically. You know, there's probably some promotions that we might be looking at differently around Veterans Day. So I think all in, you know, it's going to be a very similar quarter as the calendar lines up.
Christmas will fall on a Monday versus a Sunday, so theres, a modest benefit there, but that might be 20 basis points for all in for the quarter. So a little help but very.
Tom Houdek: Anything in terms of the holiday season and how that might impact or benefit, Q4 this year versus the last year to be aware of? Compared to last year. So Christmas will fall on a Monday versus a Sunday. So there's a modest benefit there, but that might be 20 basis points for all in for the quarter. So, you know, a little help, but very, you know, there's not like, you know, New Year's day falling in or out of a year, which can swing Q4 a little more dramatically. You know, there's probably some promotions that we might be looking at differently around veterans days. So I think all in, you know, it's going to be a very similar quarter as the calendar lines up. Okay.
Not like new year's day, falling in or out of a year, which can swing Q4, a little more dramatically.
There is probably some promotions that we might be looking at differently around veterans day, So I think all in.
Unknown Executive: Thank you very much.
It's going to be a very similar quarter.
The calendar lines up.
Okay. Thank you very much.
Welcome.
Speaker 11: transcript
Speaker 11: Welcome.
The next question comes from Todd Brooks with Benchmark Company. Please go ahead.
Speaker 1: transcript
Speaker 1: The next question comes from Todd Brooks with the Benchmark Company. Please go ahead.
Speaker 12: transcript
Speaker 12: Hey, thanks for taking my question. I've got a few for you guys here. Tom, if I could start off with you, very encouraging news on the further cost.
Hi, Thanks for taking my questions I've got a few for you guys here, Tom if I could start off with you very encouraging news on the further cost saves.
Speaker 12: transcript
Speaker 12: I know you talked about 30 and that's not an end point. If we take this out to kind of a longer term opportunities, we're looking into what could be harvested maybe going into 25. What's the magnitude of this opportunity versus the 25 million that you guys thought was?
I know you talked about 30 and Thats not an end point, if we take this out to kind of a longer term opportunities. We're looking into what can be harvested maybe going into 'twenty five whats the magnitude of this opportunity versus the $25 million that you guys thought was originally there to harvest.
Todd Brooks: Welcome. The next question comes from Todd Brooks with the benchmark company. Please go ahead. Hey, thanks for taking my question. I've got a few for you guys here. Tom, if I could start off with you. Very encouraging news on the further cost saves. I know you talked about 30 and that's not end point. If we take this out to kind of a longer term opportunities, we're looking into what could be harvested, maybe going into 25.
We're still vetting the new opportunities that are coming in.
Speaker 4: transcript
Speaker 4: We're still vetting the new opportunities that are coming in.
Speaker 4: transcript
Speaker 4: We're not saying yes to everything, but we are increasing the scope every time we're meeting as a team to find more and more opportunities. So as we said, it's 30 million now that have been accepted and are rolling in. There's still more that...
We were out saying, yes to everything but we are increasing the scope every time, we're meeting as a team to find more and more opportunities. So as we said its 30 million now that have been accepted and are rolling in there is still more that.
Todd Brooks: What's the magnitude of this opportunity versus the 25 million that you guys thought was originally there to harvest? We're still vetting the new opportunities that are coming in. We're not saying yes to everything, but we are increasing the scope every time we're meeting as a team to find more and more opportunities. So as we said, it's 30 million now that have been accepted in our rolling in. There's still more that, you know, either waiting to be rolled out or still in some term of some form of vetting.
Speaker 4: transcript
Speaker 4: you know, either waiting to be rolled out or still in some term of some form of vetting. So we don't have that number to share in terms of what it could be in 2025, but that 30 million right now is going to be higher. So we're going to continue to keep rolling them out. And.
Either waiting to be rolled out or still in some term of some form of of bedding. So we don't have that that number to share in terms of what it could be in 2025, but that $30 million. We're at now is it going to be higher so we're going to continue to keep rolling them out and.
Speaker 4: transcript
Speaker 4: You know, we'll keep everybody updated as we keep adding to it. But yeah, we're encouraged by even some of the new ideas that keep coming in. It's great when you have a cross-functional team that are all focused on cost and growing margins and doing it the right way. And we're continuing to get some really good ideas coming out of this initiative that we'll continue executing.
We will.
To keep everybody updated as we keep adding to it but.
But yes, we're encouraged by even some of the new ideas that keep coming in it's great. When you have a cross functional team that are all focused on cost and growing margins then in doing it the right way and we're continuing to get some really good ideas coming out of out of this.
Todd Brooks: So we don't have that that number to share in terms of what it could be in 2025, but that 30 million right now is going to be higher. So we're going to continue to keep rolling them out. We'll keep everybody updated as we keep adding to it. But yeah, we're encouraged by even some of the new ideas that keep coming in. It's great when you have a cross-functional team that are all focused on cost and growing margins and doing it the right way.
This initiative that will continue executing against.
Speaker 3: transcript
Speaker 3: I think Todd is right. Right. Todd, this is what I just asked that. We're even looking at how we continue to cook items in the kitchen.
I think Todd.
Todd This is Greg just to add to that we're even looking at how we continue to cook items in the kitchen, We've got obviously, our pizza oven. We ran some great NBC that is one of the reasons, we have such consistency can remove more items to that versus using in different other areas versus maybe a flat hopper.
Speaker 3: transcript
Speaker 3: We've got obviously our P-1000, we run some great things through that. It's one of the reasons we have such consistency. Can't we move more items to that?
Speaker 3: transcript
Speaker 3: Versus using in different other areas versus maybe a flat copper or the grill and just looking at other areas in that perspective that can continue to help us. So I think as we go down this process, not only as Tom talked about it, that we'll have more than the 30Million, but it's something that we've got to continue with. We've got to continue with that creativity in our business to continue to figure out ways
Todd Brooks: We're continuing to get some really good ideas coming out of this initiative that we'll continue executing. Against. Todd, this is very just to ask that. We're even looking at how we continue to cook items in the kitchen. We've got, you know, obviously our peak thousand. We run some great things to that. It's one of the reasons we have such consistency. Can't we move more items to that versus using in different other areas versus maybe a flat copper or the grill and just looking at other areas and that perspective that can continue to help us.
Or the grille and just looking at other areas in that perspective that can continue to help us. So I think as we go down this process not only as Tom talked about it that we will have more than the $30 million, but it's something that we've got to continue with we've got to continue with that creativity.
In our business to continue to figure out ways to make us more efficient more productive and at the same time reduced cost.
Speaker 12: transcript
Speaker 12: to make us more efficient, more productive, and at the same time reduce costs.
Okay, Great and then Greg one for you.
Speaker 12: transcript
Speaker 12: with the new streamlined menu. I think going back to what you said in test, you hadn't seen much of the same store sales.
With the new streamlined menu I think going back to what you said in test you haven't seen much of the same store sales.
Todd Brooks: So I think it's we've got down this process. Not only is as Tom talked about it, that will have more than the 30 million, but it's something that we've got to continue with. We've got to continue with that creativity and our business to continue to figure out ways to make us more efficient, more productive. And at the same time, reduce costs. Okay, great.
Impact from constructing some of the items taking them off the menu.
Speaker 12: transcript
Speaker 12: impact from constructing some of the items, taking them off the menu. Once the menu launched, did that experience hold, or was there some sort of same store sales headwind in actually moving across the full fleet to the new streamlined?
Once the menu launch does that experience.
Hold or was there some sort of same store sales headwind.
Actually moving across the full suite.
Tom Houdek: And then Greg, one for you with the new streamlined menu. I think going back to what you said in test, you hadn't seen much of the same store sales impact from constructing some of the items, taking them off the menu once the menu launched at that experience hold or was there some sort of same store sales headwind in actually moving across the full fleet. To the new streamlined venue. So it looked like it held and you know, we didn't do a holdout restaurant just to see how things played out because of how we did in the test.
To the new streamlined menu.
Speaker 3: transcript
Speaker 3: So it looked like it held. And we didn't do a holdout restaurant just to see how things played out because of how we did it in the test.
So it looked like it held.
And we didn't do a hold out restaurants, just to see how things play out because of how we did in the past, but as we went into July and forgetting some seasonality, but looking at all of our restaurants. It didn't look like there was any significant changes.
Speaker 12: transcript
Speaker 12: But as we went into July and forgetting some of the seasonality but looking at all of our restaurants, it didn't look like there was any significant changes from one area to the other. So what we tried to do seemed to work in regards to driving operational fish and seas.
From one area to the other so what we tried to do seem to work in regards to driving operational efficiencies streamlining. The fact that we didn't need 10 burgers that we didnt need 10, salads and so forth.
Speaker 3: transcript
Speaker 3: streamlining the fact that we didn't need 10 burgers or we didn't need 10 salads and so forth. As we move down, we saw guests shift into what we'd expected them to shift into.
As we move down we saw guests shift into what we had expected them to shift into.
Tom Houdek: But as we went into July and forgetting some of the seasonality but looking at all of our restaurants, it didn't look like there was any significant changes from one area to the other. So what we tried to do seemed to work in regards to driving operational efficiencies, streamlining the fact that we didn't need 10 burgers or we didn't need 10 salads and so forth. As we move down, we saw guests shift into what we've expected them to shift into.
Speaker 3: transcript
Speaker 3: At the same time as we put things on like a delay or we put the
At the same time as we put things on like a fillet or we put the.
Speaker 3: transcript
Speaker 3: We put the press along, we saw, yes, move into that within those different categories. But overall, it seems like things have held as we expected.
We put the press along we saw guests move into that within those different categories.
But overall it seems like things have held as we expected.
That's great and then just two quick follow up.
Speaker 12: Great. And then just two quick follow-up, well, additional questions. One, can you update us on where we are on returning the full fleet to late night operations? And then secondly, you touched on this with California exposure, and I know you guys won't use weather as an excuse, but I was wondering, is there a way to tease out the impact? I mean, you don't get a lot of tropical storms slash hurricanes in the California market.
A couple questions one.
Can you update us on where we are on returning the full fleet to late night operations and then secondly.
Tom Houdek: At the same time, as we put things on like a delay or we put the press along, we saw guests move into that within those different categories. But overall, it seems like things have held as we expected.
You touched on this with California exposure and I know you guys wont use weather is.
Excuse me I was wondering is there a way to tease out the impact I mean, you don't give a lot of <unk>.
Tropical storm slash Hurricanes, and the California market.
Greg Levin: That's great. And then just two quick follow up additional questions. One, can you update us on where we are on returning the full fleet to late night operations and then secondly, you touched on this with California exposure. And I know you guys won't use weather as an excuse, but I'm wondering is there a way to tease out the impact. I mean, you don't get a lot of tropical storm slash hurricanes on the California market and just wondering what impact that may have had on the business with it hitting an August.
Speaker 12: transcript
Speaker 12: Just wondering what impact that may have had on the business with it hitting an off.
Just wondering what impact that may have had on the business with hitting in August. Thanks.
Okay.
Speaker 3: transcript
Speaker 3: I'll let you hear my anecdote, because I forget because it's been a while, and it obviously did hit us, but us in California that aren't used to a tropical storm, I think we literally went recluse for the entire weekend. It was a tough weekend. I forget what our comps were down. I think people were just not going to get out of their house, even though, honestly, like...
I can keep my anecdote.
Because I forget because it's been a while it obviously it did hit us.
But us in California that arent, you said tropical storm I think we like.
Literally reckless for like the entire weekend. It was a tough weekend I forget what our comps were down I think people are just not going to get out of their house, even though honestly like.
Greg Levin: Thanks. Um, I'll let I keep the word my anecdote because I forget it's been it's been a while and obviously did hit us. But us in California that aren't you so tropical storm. I think we like literally went reckless for like the entire weekend. It was a tough weekend. I forget about our cons for down. I think people were just not going to get out of the house, even though honestly like we seem bigger storms in the middle of the winter time.
Speaker 3: transcript
Speaker 3: We've seen bigger storms in the middle of the winter time. We'd have to come back to you because it's just been so far and didn't seem like that. You know, the shelf made that much difference. Obviously, we had that and then we had the Florida hurricane that came through. And both of those did impact the corridor.
We've seen bigger storms in the middle of the winter time.
To come back to you because it's just been so far it didn't seem like that in of itself made that much difference. Obviously, we have that and then we had the Florida hurricane that came through on both of those did impact the quarter.
Speaker 3: transcript
Speaker 3: on late night we are rolling out all of our restaurants i don't know Thomas that everybody's there yet for so rolling through on that
And late night, we are rolling out all of our restaurants I don't know Thomas that everybody is there yet a horsetail rolling through on that as soon as late night. Thank.
Speaker 4: transcript
Speaker 4: So in late night, I think you back where we were pre-COVID, the place we have not had a be hours back are really on the Fridays and Saturdays and we're open until one o'clock in the morning. We're still thinking if that makes sense and we're gonna be able to drive the right type of sales and margin, make sure that dollar margin accretive. So that's the one area we have not done yet. But for the most part, getting the outside of that Friday and Saturday, the Sundays through the Thursdays, most of our restaurants are now back to me.
Piggy back where we were pre COVID-19.
Greg Levin: We have to come back to you because it's just been so far and didn't seem like that enough itself made out much different. Obviously, we had that and then we had the Florida hurricane that came through and both of those did impact the quarter. On late night, we are rolling out all of our restaurants. I don't know Thomas that everybody's there yet if we're still rolling through on that. So in late night, I think you back when we were pre-coded the the the place we have not added the hours back are really on the Fridays and Saturdays and we're open until one o'clock in the morning.
The place we have not added the hours back are really on the Fridays and Saturdays and we are open until one o'clock in the morning, we're still thinking if that makes sense and we're going to be able to drive the right type of sales and in margin make it to make sure that dollar margin accretive. So that's the one area, we have not done yet but for the most part getting the.
Outside of the Friday, and Saturday Sundays through the Thursdays the most of our restaurants are now back to midnight.
Speaker 4: transcript
Speaker 4: And that's been a very great success, not just.
And that's been a very great success not just.
Greg Levin: We're still thinking if that makes sense and we're going to be able to drive the right type of sales and and margin make it make sure that dollar margin accretive. So that's the one area we have not done yet but for the most part getting the you know outside of that Friday and Saturday the Sundays through the Thursdays. Most of our restaurants are now back to midnight and that's been a very great success not just.
For the sales, but actually seeing dollar as well as percent margin from those extra sales in that you do get it in that last hour that 11 to midnight, but it also builds in that nine to 10 and 10 to 11 hours. So we've seen some really nice return. The other is just a few restaurants that haven't added that back yet but for the most part that mid week, we're back to midnight.
Speaker 4: transcript
Speaker 4: you know, for the sales, but actually seeing dollars, as well as percent margin from those extra sales. And that, you know, you do get it in that last hour, that 11 to midnight, but it also builds in that nine to 10 and 10 to 11 hour.
Speaker 4: transcript
Speaker 4: So we've seen some really nice return there. There's just a few restaurants that haven't added that back yet, but for the most part that midweek, we're back to midnight. And still exploring and analyzing if it makes sense. And in at least some restaurants to go back to that one o'clock on the Friday and Saturday, but we have not determined yet.
Greg Levin: You know for the sales but actually seeing dollar as well as percent margin from those extra sales and that you do get it in that last hour that 11 to midnight but it also builds in that 9 to 10 and 10 to 11 hour. So we've seen some really nice return there's just a few restaurants that haven't added that back yet but for the most part that that mid week. We're back to midnight and still exploring and analyzing if it makes sense and in at least some restaurants to go back to that one o'clock on the Friday and Saturday but that we have not determined yet.
And still.
Exploring in analyzing if it makes sense in the lease some restaurants to go back to that one o'clock.
Unknown Executive: Okay great thank you both.
Friday, and Saturday, but that we have not determined yet.
Okay, great. Thank you both.
Thanks, Doug.
The next question comes from Sharon Zackfia with William Blair. Please go ahead.
Speaker 1: transcript
Speaker 1: The next question comes from Sharon Zaxia with William Blair. Please go ahead.
Hi, good afternoon.
Speaker 13: transcript
Speaker 13: I guess I wanted to go back to the California fast-sood wage hike that's happening next year. And I know you're not directly impacted, but obviously...
I guess I wanted to go back to the California fast food wage hike, that's happening next year and I know you're not directly impacted but obviously you know.
Wages going up impact everybody and you alluded to that.
Speaker 13: transcript
Speaker 13: I guess I'm wondering is there any way that you could paint this as a favorable scenario for full service where the order of magnitude price increased that you would have to take to cover labor inflation would be much less?
I guess I'm wondering is there any way that you could paint this as a favorable scenario for full service, where the order of magnitude price increase that you would have to take to cover labor inflation will be much less.
Sharon Zackfia: The next question comes from Sharon Zackfia with William Blair. Please go ahead. Hi, good afternoon. I guess I wanted to go back to the California fast food wage hike that's happening next year. And I know you're not directly impacted, but obviously, you know, wages going up impact everybody and you alluded to that. I guess I'm wondering is there any way that you could paint this as a favorable scenario for full service where the order of magnitude price increase that you would have to take to cover, you know, labor inflation would be much less than your full, your limited service peers. I mean, is there any market where you've seen a test case of this where, you know, maybe the gap between full service and limited service narrow somewhat in terms of price points.
Speaker 13: transcript
Speaker 13: than your full, your limited service peers? I mean, is there any market where you've seen a test case of this where, you know, maybe the gap between full service and limited service narrows somewhat?
In Europe, you're limited service peers, I mean is there any market, where you've seen a test case of this where maybe the gap between full service and limited service narrow somewhat.
In terms of price points.
Speaker 3: transcript
Speaker 3: Yeah, Sharon, it's a great question. And obviously, with the dining room team members of the front of the house, you've got tips coming in. So those tips put people significantly over the $20 an hour.
Yes, Sharon it's a great question and obviously with our with the dining room key members of the front of the house you have got kits coming in so those types of placebo significantly over the $20 an hour range. There and then most of our kitchen is already close to that if not over that in California.
Speaker 3: transcript
Speaker 3: range there and then most of our kitchen is already close to that not over that in in California uh... and we didn't have where we can be driving down the street and see a fast food or another restaurant sign-up site starting wages at twenty two dollars and really that's not necessarily impact our restaurant in that general area
And we've even said where we can be driving down the street and see a fast food or another restaurant with a sign outside thing starting wages at $22 and really not necessarily impact our restaurant in that general area. So I do think we've got an inherent benefit there I also think to your point that because of that youre going to see.
Greg Levin: Yeah, Sharon, it's a great question. And obviously, with the dining room key members of the front of the house, you've got tips coming in. So those tips put people significantly over that the $20 an hour range there. And then most of our kitchen is already close to that. Not over that in California. And we'd even said where we can be driving down the street and see a fast food or another restaurant to sign outside saying starting wages as $22 and really not necessarily impact our restaurant in that general area.
Speaker 3: transcript
Speaker 3: So I think we've gotten inherent benefit there. I also think to your point that because of this, you're going to see fast through which R.D. is.
Fast food, which already has and.
Speaker 3: transcript
Speaker 3: and fast casual raising the prices and getting the prices closer to casual dining. I still think that it's a different
And fast casual raising their prices in getting our prices closer to casual dining.
Thank you.
That it's a different experience at that time.
Speaker 3: transcript
Speaker 3: and that regards and we're trying to drive death into our restaurant that want that more experiential dining and that from that experience
In that regard and we're trying to drive guests into our restaurant that want that more experiential dining enough from that experience I guess.
Greg Levin: So I think we've got an inherent benefit there. I also think to your point that because of this, you're going to see fast food which already is and fast casual raising the prices and getting their prices closer to casual dining. I still think that it's a different experience at times in that regard. And we're trying to drive guests into our restaurant that want that more experiential dining and that from that experience, I guess.
Speaker 3: transcript
Speaker 3: I guess. We will always want to obviously make sure we continue to drive off-premically close.
We'll always want to obviously make sure. We can continue to drive our timing can be close to them with our premise is not with them is not the same price if not better on off premise, but ultimately what we're trying to do is have a differentiated food profile trying to make sure. We're driving guests that want brewhouse theatre want that that.
Speaker 3: transcript
Speaker 3: them with all premise is not with them. It's not the same price if not better on all premise. But ultimately what we're trying to do is have a differentiated food profile. Trying to make sure we're driving guests that want to brew out theater, want that differentiation of a sit down experience. And still 80 billion dollar plus industry that we're going out here.
That differentiation for sit down experiencing still $80 billion plus industry that we're going after.
Greg Levin: We will always want to obviously make sure we continue to drive off premise and be close to them with all premise is not with them. It's not the same price if not better on all premise. But ultimately, what we're trying to do is have a differentiated food profile, trying to make sure we're driving guests that want to brew out theater, want that differentiation to sit down experience. And still, you know, $80 billion plus industry that we're going out there.
Now that being said I am not sure there is a market that we can compare to where we are today.
Speaker 3: transcript
Speaker 3: Now, that being said, I'm not sure there is a market that we can compare to where we are today. Even if I had a look at certain cities that already have minimum wages in the 18-19 dollar range and look at our business and how they're comping versus again, trying to look at a versus fast state, I don't know if I've got that comparison. All I know is that minimum wage in general.
Even if I had to look at certain cities that already have minimum wages in the 18 $19 range.
And looked at our business and how we're comping versus again trying to look at it versus our stated I don't know if ive got that comparison also known as the minimum wage in general hasn't been as impactful to driving top line sales I think sometimes people think it tends to get more dollars in people's pockets and they tend to want to go out and use it on this.
Speaker 3: transcript
Speaker 3: hasn't been as impactful to driving top line sales. I mean, sometimes people think it tends to get more dollars in people's pocket.
Sharon Zackfia: Now, that being said, I'm not sure there is a market that we can compare to where we are today. Even if I had to look at certain cities that already have minimal wages in the $18.19 range and look at our business and how they're comping versus again, trying to look at a versus fast food. I don't know if I've got that comparison. All I know is minimal wage in general hasn't been as impactful to driving top line sales.
Speaker 3: transcript
Speaker 3: And they tend to want to go out and use it on discretionary items and we get a benefit of that. Bye. Okay.
Stress scenario items, then we get a benefit of that.
Okay, and then sorry, if I missed this I hopped on another call.
Speaker 13: transcript
Speaker 13: I know the menu rationalization seemed to go pretty well that you didn't July . Are there thoughts to do in further rationalization that you're pretty happy with?
I know the menu rationalization seem to go pretty well that you did in July are there thoughts to Duane further rationalization are you pretty happy where you are at this point.
Sharon Zackfia: I think if sometimes people think it tends to give more dollars in people's pockets. And they tend to want to go out and use it on discretionary items and we get a benefit of that. Okay, and then sorry if I missed as I hopped on another call.
We got to stay disciplined on it and I would actually like to take it down personally as a personal thing, but I've got to continue to watch where guests are we at Bj's have to continue to watch where our guests go on our menu and what they're ordering and making sure we've got.
Speaker 3: transcript
Speaker 3: We've got to stay disciplined on it. And I would actually like to take it down personally as a personal thing, but I've got to continue to watch where guests or we at VGIS have to continue to watch where guests go on our menu and what they're ordering and making sure we've got the right variety and differentiation. We do know from our consumer research that variety and breadth is important to our guests.
Greg Levin: I know the menu rationalization seemed to go pretty well that you didn't July. Are there thoughts to do any further rationalization that you're pretty happy where you are at this point? We've got to stay disciplined on it. And I would actually like to take it down personally as a personal thing, but I've got to continue to watch where guests or we have to continue to watch where guests go on our menu and what they're ordering and making sure we've got the right variety and differentiation.
The right variety and differentiation. We did note we do know from our consumer research that variety and breadth is important to our guests.
Speaker 3: transcript
Speaker 3: And as a result, we want to continue with that breath there. But at the same time, Putnam Shin, our Chief Program Innovation Officer, Scott Rodriguez, the Senior Vice President of Culinary, continue to create unbelievably new, great items.
And as a result, we wanted to continue with that breadth there, but at the same time.
Putnam Chen our chief growth and innovation Officer, Scott Rodriguez, <unk> Senior Vice President culinary continue to create unbelievably new great items that we would love to get on our menu and the only way. We can do that is by being disciplined on items that need to come off. So I don't know if there is another big big chunk down like we just did well.
Speaker 3: transcript
Speaker 3: That we would love to get on our menu and the only way we can do that is by being disciplined on items that need to come off so.
Greg Levin: We did know we do know from our consumer research that variety and breath is important to our guests. And as a result, we want to continue with that breath there, but at the same time. Putt and Shin our chief growth and invasion officer Scott Rodriguez or senior vice president of culinary continue to create unbelievably new, great items that we would love to get on our menu and the only way we can do that is by being disciplined on items that need to come off.
Speaker 3: transcript
Speaker 3: I don't know if there's another big chunk down like we just did, but we'll stay disciplined to take certain items off, going forward so that we can have really unique, I think LTOs to drive that kind of consumer traffic into our restaurant and that fear of missing out.
Stay disciplined to take certain items off.
Going forward. So that we can have really unique I think LTE to.
Greg Levin: So I don't know if there's another big big chunk down like we just did, but we'll see discipline to take certain items off going forward so that we can have really unique. I think LTOs to drive that kind of consumer traffic into our restaurant and that fear of missing out.
To drive that kind of consumer traffic into our restaurants, and the fear of missing out.
Okay. Thank you.
Youre very welcome.
Speaker 1: transcript
Speaker 1: The last question today comes from Teddy Farley with City. Please go ahead.
The last question today comes from <unk> <unk> with Citi. Please go ahead.
Unknown Executive: Okay, thank you.
Speaker 5: transcript
Speaker 5: Thanks for taking the question. Just one for me. As you think about Return of Capital and continuing the Share Repurchase Program, what is your thinking around restarting the quarterly dividend that you have pre-COVID if you're thinking about that at all? Thanks. OK.
Thanks for taking the question just one for me as you think about return of capital and continue the share repurchase program. What is your thinking around restarting the quarterly dividend that you had pre COVID-19, if you're thinking about that at all thanks.
Teddy Farley: You're very welcome.
Yes, Kevin it's something we'd have to bring up with our board of directors I think right now we're.
Unknown Executive: The last question today comes from Teddy Farley with City. Please go ahead. Thanks for taking the question. Just one from me.
Speaker 3: transcript
Speaker 3: I think right now where the stock trading, and look, I'm not the one that determines the valuation of the company, but I think management's very confident in its strategy and its ability to increase its EBITDA and feel that at least share references right now.
The stock's trading and look I'm not the one that determined.
Greg Levin: As you think about return of capital and continuing the share repurchase program, what is your thinking around restarting the quarterly dividends that you had pre-COVID if you're thinking about that at all? Thanks. Yeah.
The valuation of the company, but I think management is very confident in its strategy and its ability to increase its EBITDA and feels that these share repurchases right now.
Speaker 3: transcript
Speaker 3: are the right way to return capital back to shareholders. As we continue to put together our 2024 and 2025 and beyond capital program, both the CAPEX and CAPO program.
The right way to return capital back to shareholders as we continue to put together, our 2024 and 2025 and beyond.
Greg Levin: Teddy, something we have to bring up with our Board of Directors. I think right now, where, you know, the stocks trading and look, I'm not the one that determines the valuation of the company, but I think management is very confident in its strategy and its ability to increase its EBITDA and feel that at least share repurchases right now are the right way to return capital back to shareholders. As we continue to put together our 2024 and 2025 and beyond.
<unk> capital program, both Capex and capital program I think we're going to be in a position that continues to generate a significant amount of free cash flow at that 5% to 7% New restaurant bells and continue to expand margins I think as we look at that.
Speaker 3: transcript
Speaker 3: I think we're going to be in a position that continues to generate a significant amount of free cash flow at that 5% to 7% new restaurant bill and continue to expand margins. I think as we look at that, it's something to look and figure out what's the right approach here in regards to returning capital to our shareholders.
<unk> to look and figure out what's the right approach here in regards to returning capital to our shareholders.
Speaker 3: transcript
Speaker 3: Given it's due, I'll allow a certain amount of discipline within the org structure because or within the capital structure because you got to meet that each quarter. And I think that discipline is actually a good thing. At the same time, I think where we are today, the more opportunistic buying back shares makes more sense.
Evidence do allow a certain amount of discipline within the org structure, because our within the capital structure, because you got to meet that each quarter and I think that discipline is actually a good thing at the same time and I think where we are today the more opportunistic buying back shares makes more sense.
Greg Levin: On capital program, both CAPX and capital program, I think we're going to be in a position that continues to generate a significant amount of free cash flow at that 5% to 7% new restaurant bills and continue to stand margins. I think as we look at that, it's something to look and figure out what's the right approach here in regards to returning capital to our shareholders. Given its due, I'll allow a certain amount of discipline up in the org structure because we're within the capital structure because you got to meet that each quarter. And I think that discipline is actually a good thing. At the same time, I think where we are today, the more opportunistic buying back shares makes more sense.
Awesome. Thank you.
Youre welcome.
Speaker 5: transcript
Speaker 14: Thank you. The conference has now concluded. Thank you for attending today's presentation. Thank you, everybody. Thanks, everyone.
Thank you. The conference has now concluded thank you for attending today's presentation.
Thank you.
Thanks, everyone.
Yeah.
Unknown Executive: Awesome. Thank you. You're welcome. Thank you.
Operator: The conference has now concluded. Thank you for attending today's presentation. Thank you very much. Thanks, everyone.
Speaker 14: transcript
Speaker 15: Sp.
[music].
Speaker 14: transcript
Speaker 15: The.
Yes.
[music].