Q4 2023 The ONE Group Hospitality Inc Earnings Call
Operator: Greetings and welcome to the One Group 4th Quarter and Full Year 2023 Earnings Conference Call. All participants will be in listen-only mode.
Greetings and welcome to the one group fourth quarter and full year 2023 earnings conference call. All participants will be in listen only mode should you need assistance. Please signal like comfort specialist by pressing Star then zero on.
Operator: Should you need assistance, please signal a conference specialist by pressing star then zero on your telephone keypad. A brief question and answer session will follow the formal presentation. To ask a question, you may press star then one on your telephone keypad. To withdraw your question, please press star then two.
Your telephone keypad, a brief question and answer will follow the formal presentation.
I'll ask a question you May press Star then one on your telephone keypad to withdraw your question. Please press Star then two please note. This event is being recorded I would now like to turn the conference over to Tyler Loy. Please go ahead.
Operator: Please note this event is being recorded. I would now like to turn the conference over to Tyler Loy. Please go ahead.
Tyler Loy: Thank you, operator. And hello, everyone. Before we begin our formal remarks, let me remind you that part of our discussion today will include forward-looking statements. These forward-looking statements are not guaranteed for future performance, and you should not place new reliance on them. These statements are also subject to numerous risks or uncertainties that could cause actual results that are materially from what we expect. Please also note that these forward-looking statements reflect our opinion only as the data fits well. We undertake no obligation to revise or publicly release any revisions to these forward-looking statements before, in light of new information or future events. We refer you to our recent SEC filing for a more detailed discussion of the risks that could impact our future operating. During today's call, we will discuss certain non-GAAP financial measures, which we believe can be useful in evaluating our. However, the presentation of these measures or other information should not be considered in All right, let's just use the original.
Thank you operator, and Hello, everyone.
Before we begin our formal remarks, let me remind you that part of our discussion today.
David.
The forward looking statements are not guarantees.
And you should not place undue reliance.
These statements are also subject to numerous risk.
Okay.
Could cause actual results to differ materially from what we expect.
Please also note that these forward looking statements.
Unless the data for this call.
We undertake no obligation to revise or publicly release any revisions that before.
In light of new information or future events.
We refer you to our recent filings for more detailed discussion of the risks future.
Future operating results and financial condition.
During today's call, we will discuss certain non-GAAP financial measures, what we believe can be useful in evaluating our performance.
However, the presentation of these measures or other information should not be considered in isolation or as a substitute for regal.
Tyler Loy: Gap. The reconciliations of these measures, such as adjusted e-debt, adjusted net income, Restaurant Operating Profits, Probable Sales, and Total Food and Beverage Sales at owned and managed and licensed units that got measured, along with a discussion of why we consider these measures useful. Please share earnings believed issues. With that, I would like to turn the call over to Manny Hilario.
GAAP.
The reconciliations of these measures.
EBITDA.
Adjusted net income restaurant operating profit.
Comparable sales in total food and beverage sales.
Managed and licensed units to GAAP measure.
Along with a discussion of why we consider these measures are useful.
Please see our earnings release issued today.
That I would like to turn the call over to Mandy malaria.
Emanuel P. N. Hilario: Thank you, Tyler, and hello everyone. We sincerely appreciate you joining us today and for your interest in the One Group. To begin, I would like to express my gratitude to each of our dedicated team members. Our results would not be possible without their unwavering commitment to being the best restaurant in every market we operate by delivering exceptional and unforgettable experiences to every guest, every time. Thanks to our remarkable teams, we have solidified our leadership position in 5 Dining, in both high-end and polished casual. Let me begin by discussing our fourth quarter financial highlights. First, we delivered record quarterly revenue of nearly $90 million and record quarterly EBITDA of $14.5 million, a 11.5% increase versus last year. The Russian level margin increased 40 basis points to 19.3% driven by a 120 basis point improvement in the cost of goods and other cost savings initiatives we have put in place.
Thank you Tyler and Hello, everyone. We sincerely appreciate you joining us today and for your interest in the one group.
To begin I would like to express my gratitude to each of our dedicated team members.
Our results would not be possible without their unwavering commitment to being the best restaurants in every market, we operate by delivering exceptional and unforgettable experiences to every guest every time.
Thanks to a remarkable teams we have solidified our leadership position in fine dining and both high end and polished casual.
Let me begin by discussing our fourth quarter financial highlights first we delivered record quarterly revenue of nearly $90 million and record quarterly EBITDA of $14 5 million.
11, 5% increase versus last year.
Our restaurant level margin increased 40 basis points to 19, 2% driven by a 120 basis point improvement in cost of goods and other cost savings initiatives, we have put in place.
Emanuel P. N. Hilario: GNA's percentage of revenue improved by 80 basis points driven by cost management of controllable expenses. All of this drove an adjusted EBITDA expansion of 140 basis points. 16.1% of revenue. Also, during the quarter, we opened four new company-owned restaurants, reinforcing our ability to open restaurants every four to six weeks. In October, we opened an SDK in Charlotte, North Carolina, and a ConoGroyle in Phoenix, Arizona, our third ConoGroyle in the area. In December, we opened an SDK in Boston, Massachusetts, and an SDK in Suffolk City, Utah.
G&A as a percentage of revenue improved by 80 basis points, driven by cost management of controllable expenses.
All of this drove adjusted EBITDA expansion of 140 basis points to 16, 1% of revenue.
Also during the quarter, we opened four new company owned restaurants.
Enforcing our ability to open restaurants every four to six weeks.
October we opened a domestic in Charlotte, North Carolina, and well in Phoenix, Arizona, Our third Kona grill in the area.
In December we opened a domestic and Boston, Massachusetts, and an SDK in Salt Lake City, Utah. These restaurants are off to strong starts and their success bolsters our belief in the long term EBITDA and earnings power of our development pipeline as we demonstrate industry leading R O.
Emanuel P. N. Hilario: These restaurants are off to strong starts, and their success bolsters our belief in the long-term EBITDA and earnings power of our development pipeline as we demonstrate industry-leading ROIs for our shareholders. These four restaurants, along with the addition of the other venues early in the year, will allow us to increase our consolidated revenues 5.1% for 2023 and deliver $40.1 million in adjusted EBITDA. In addition, they will deliver more run-rate EBITDA into the future. We are also pleased with the addition of SDK Washington, D.C., which just opened today.
Wise for our shareholders.
These four restaurants, along with the addition of the <unk> early in the year allowed us to increase our consolidated revenue Spike one 1% for 2023 and deliver $41 million and adjusted EBITDA. In addition, it will deliver more run rate EBITDA into the future.
We are also pleased with the addition of SDK, Washington D C, which just opened today.
Emanuel P. N. Hilario: Now looking towards 2024, I would like to discuss our key priorities for the year. First, we must continue to drive sales. The first few months of the year have pointed to a choppy and challenging sales environment, which will require a sharp focus on value and execution. As a result, we have placed an emphasis on value with a focus on our $3, $6, and $9 happy hour and the launch of Steak Night America, priced at $69 per person at SDK and $39 for Cone of Gold, both of which are exceptional values. Our happy hour program is one of the most compelling in the industry as we offer a sampling of offerings from our main menu at attractive entry price points. The pace of the State Park continues to accelerate, and it is a key initiative for the Comprehensive Plan.
Now looking towards 2024, I would like to discuss our key priorities for the year.
First continue to drive sales with first few months of the year have pointed to a choppy and challenging sales environment, which will require a sharp focus on value and execution.
As a result, we haven't placed an emphasis on value with a focus on our $3 $6 $9 happy hour and launch a steak night America priced at $69.
Person that SDK and $39 for Kona Grill, all of which are exceptional values.
Our happy hour program is one of the most compelling in the industry as we offer a sampling of offerings from our main menu at attractive entry price points.
The velocity of the state Park continues to accelerate and it is a key initiative for the company.
Emanuel P. N. Hilario: In addition, we will continue to own the holidays and special occasions business. As you probably know, our guests love to celebrate with us, and our venues really come to life for these occasions. During the first quarter, we had a record Valentine's Day, and we are looking forward to Easter, Mother's Day, as well as the many birthdays and anniversaries to be celebrated with us. To emphasize these messages, we will overlay our robust digital marketing capabilities across these strategies, along with fantastic guest experiences, our culinary innovation and premium product lines such as Wagyu from around the world and our bounties of the seven seas promotion. Our second key priority for the year is to improve the margins in the corners of the world. Remember that we purchased the brand in the fourth quarter of 2019 and within six months, we were in the grips of the COVID-19 pandemic.
In addition, we will continue to own the holidays and special occasion business as you probably know our guests love to celebrate with us in our venues really come to life for these occasions.
During the first quarter, we had a record Valentine's day, and we're looking forward to Easter mother's day as well as the many birthdays anniversaries to be celebrated with us too.
To emphasize these messages, we will overlay our robust digital marketing capabilities across these strategies, along with fantastic guest experiences our culinary innovation and premium product lines, such as white goods from around the world and our boundaries up seven six promotions.
Our second key Brian for the year is to improve Kona grill margins.
Remember that we purchased the brand in the fourth quarter of 2019 and within six months, we were in the grips of the COVID-19 pandemic.
Emanuel P. N. Hilario: 2023 was the first year we had the opportunity to assess what we consider to be normalized operations in a more normal environment. Of the 24 restaurants we purchased, we have 18 locations with an AOV of 5.6 million and approximately 13% restaurant level margin, both of which we consider to be healthy, although we believe further revenue and margin improvement exist at those restaurants. When added to the new corner grill restaurants we have built in our building, we believe a 17% restaurant level margin is possible for the future. Conversely, we have six corner grills whose AOVs are 3.9 million and generate modest restaurant-level margins.
2023 was the first year, we had the opportunity to assess what we consider the normalized operations in a more normal environment.
The 24 restaurants with purchase we have 18 locations with an <unk> of $5 6 million and approximately 13% restaurant level margins, both of which we consider to be healthy. Although we believe further revenues and margin improvement exist at those restaurants.
When added to the new Kona Grill restaurants, we have built and are building, we believe a 17% restaurant level margin is possible for the future.
Conversely, we have six Kona grills, whose <unk> are $3 9 million and generate modest restaurant level margins. These restaurants created an approximate 300 basis point impact to the overall margin profile of the brand in 2023, and we plan to address these restaurants on a case by case base.
Emanuel P. N. Hilario: These restaurants created an approximate 300 basis points impact on the overall margin profile of the brand in 2023, and we plan to address these restaurants on a case-by-case basis. For both brands, we have implemented several initiatives to improve restaurant operating profit and overall profitability for our company. These initiatives are focused on purchasing efficiencies for both food and operating supplies.
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For both brands, we have implemented several initiatives to improve restaurant operating profit and overall profitability for our company. These initiatives are focused on purchasing efficiencies for both food and operating supplies maximizing productivity to smart scheduling and evaluating.
Emanuel P. N. Hilario: Maximizing Productivity through Smart Scheduling, Evaluating Third-Party Vendor Relationships, and Reducing Travel Costs. As you can see from the four-quarter performance, these initiatives have started to positively impact the margins. We believe the momentum will continue into 2024. A third key priority for the year is to rely on self-funded growth for company-owned restaurants and renew our asset-life development focus. Coming to 2024, we believe we can sustain all of our development and investing activities through only cash flow generated from operations.
Third party vendor relationships and reducing travel costs.
As you can see from the fourth quarter performance. These initiatives have started to positively impact the margins. We believe the mentum will continue into 2024.
Our third key priority for the year is to rely on self funded growth for company owned restaurants, and renew our asset light development focus.
<unk> to 'twenty to 'twenty four we believe we can sustain all of our development investment activities through only cash flow generated from operations.
Emanuel P. N. Hilario: This year, we expect to open six to eight new venues, with one or two of them being managed or licensed. This is inclusive of the SDK in Washington, D.C., located at the Marriott Grand Marquis that opened today. There are currently additional company-owned restaurants under construction in the following cities, which we anticipate will open in the near future, and SDK Restaurant in Aventura, Florida at the Aventura Mall; Kona Grill Restaurant in Tigard, Oregon at the Bridgeport Village, and a soft water social restaurant, a seafood high-end vibe restaurant in Denver, Colorado in the Cherry Creek neighborhood.
This year, we expect to open six to eight new venues with one or two of them being managed or license.
This is inclusive of the SDK in Washington D. C located at the Marriott Marquis that opened today.
There are currently three additional company owned restaurants under construction in the following cities, which we anticipate will open in the near future.
Thats ticket restaurant and Havent tariff floor at the Aventura mall.
Kona Grill restaurant, and Tigard, Oregon at the Bridgeport village, and our saltwater social restaurants, as seafood high and five restaurants in Denver, Colorado in the Cherry Creek neighborhood.
Emanuel P. N. Hilario: Circling back to our managed and licensed business, we are seeing increased growth in opportunities in the managed and licensed side of the business, and we'll be spending more time developing our outside life pipeline. One thing that might be difficult to understand is how the COVID-19 pandemic impacted the F&B model for hotels. Hotel guests were trained to use delivery service providers to provide their hotel F&B needs, and it has taken some time for hotels to revert back to their previous model.
Circling back to our managed and licensed business. We are seeing increased growth in opportunities in the managed unlicensed side of the business and we will be spending more time developing our outside like pipeline.
One thing that might be difficult to understand is how the COVID-19 pandemic impacted the F&B model for Bolthouse Hotel guests were trying to use delivery service providers to provide their wholesale accurately needs and he has taken some time for hotels to revert back to their previous models that said, we are seeing increasing inbound interest.
Emanuel P. N. Hilario: That said, we are seeing increasing inbound interest in Brandspectator as a net attractor for hotels, which both SDK and ConantLow are. In addition, like our award-winning restaurant in Los Cabos Airport, we are seeing increased interest in both brands for airport locations. Lastly, our fourth key priority for the year is to continue to return value to our shareholders through share repurchase. As previously mentioned, we generate significant cash flow from operations, and we believe there's an opportunity to leverage that to create a balance between growth and shareholder value via share count reduction. To this end, the company's board has authorized an additional $5 million in share repurchases to be added to the $15 million in purchases which we concluded during the fourth quarter of 2023. To conclude, I'm pleased with our 2023 results, despite a particularly challenging restaurant environment, managed well by our team, which continues doing a fantastic job. Dealing With Challenges Every Day. Now, I'll turn the call back to Tyler.
For brands that cater as in that attractive for hotels, which both SDK and Kona grill are.
In addition, like our award winning restaurant in Los Cabos Airport, we are seeing increased interest in both brands for airport locations.
Lastly, our fourth key priority for the year is to continue to return value to our shareholders through share repurchases. As previously mentioned, we generated significant cash flow from operations and we believe there is an opportunity to leverage that to create balance between growth and shareholder value via share.
Count reduction.
To this end the company's board has authorized an additional $5 million in share repurchases to be added to the $15 million in purchases, which we concluded during the fourth quarter of 2023.
To conclude I am pleased with our 2023 results, despite a particularly challenging restaurant environment managed well by our team which continues doing a fantastic job successfully dealing with challenges every day now I'll turn the call back to Tyler.
Tyler Loy: Thank you, Manny. Let me start by discussing our four quarter financials in greater detail. Total gap revenues were $89.9 million, increasing 1.8% from $80.3 million for the same quarter last year. Included in our total revenue is our own restaurant net revenue, July 25, 2015, which increased 1.5% from 83.9 million for the same quarter last year.
Thank you Manny.
Let me start by discussing our fourth quarter financials in greater detail.
Total GAAP revenues were $89 9 million, increasing one 8% from $83 million for the same quarter of last year.
Included in our total revenue is our owned restaurant net revenue of $85 2 million, which increased one 5% from $83 9 million for the same quarter last year.
Tyler Loy: The increase in revenue is primarily attributable to the opening of six owned, This was partially offset by a 4.3% decrease in convolvulus. Consolidated comparable sales increased 40.1% compared to 2019, which is pre-pandemic. Management License and Centipede revenue for $4.8 million. 7. 4.49, the fourth quarter.
The increase in revenue was primarily attributable to be fixed.
Fixed revenues.
This was partially offset by a four 3% decrease in comparable sales.
Consolidated comparable sales increased 41%.
19, our pre pandemic.
Management license and incentive fee.
Revenues were $4 8 million.
Up 6% from $4 4 million in the fourth quarter of 2000.
Tyler Loy: Owned Restaurant Coffee Sales as a Percentage of Owned Restaurant Net Rent, to 22.3% in the fourth quarter of 2023, compared to 24% in the prior year, primarily due to many mixed years. Operational Topics, I'll come in next, partially offset by the increased money. Owned restaurant operating expenses as a percentage of owned restaurant net revenue. Together, we'll keep fighting for democracy, to 57.3% in the fourth quarter of 2023, from 57.1% in the fourth quarter of 2023, to the Wage and General Operating Company. Operating profit was 19.3% for the fourth quarter of 2023, compared to 18.9% in the fourth quarter.
Owned restaurant property sale.
Owned restaurant net revenue grew 120 basis points.
92, 8% in the fourth quarter of 2023 compared to 24% in the prior year, primarily due to menu mix management operational cost reduction initiatives pricing and partially offset by increased commodity prices.
Owned restaurant operating expenses as a percentage of owned restaurant net revenue increased 70 basis points to 57, 8% from the fourth quarter.
For 57, 1% in the fourth quarter of 422 due to wage and general operating cost inflation.
Operating profit was 19, 3% for the fourth quarter 2023.
Compared to 18, 9% in the fourth quarter.
Tyler Loy: On a total reported basis, general and administrative expenses One path, to 7.9 million compared to 8.5 million in the prior year, reflecting the impact of the many initiatives we have already had. When adjusting for stock-based compensation, adjusted general and administrative expenses were 6.79 in the fourth quarter of 2020, compared to $7.3 million in the same quarter. Reopening expenses were $2.9 million compared to $1.7 million in the prior year, with increases related to payroll, training, and non-cash pre-op and LEND for SDK Charlotte, and Senegal Phoenix, both open in October 2020, for SDK Bot, at Salt Lake City Interest expense was $1.9 million in the fourth quarter of 2020, compared to $0.7 million in the fourth quarter.
On a total reported basis general and administrative expenses decreased six 5% with $7 9 million compared to $8 5 million in the prior year, reflecting the impact for many initiatives we have already happened.
When adjusting for stock based compensation adjusted General and administrative expenses were $6 7 million in the fourth quarter of 2023.
$37 3 million the same quarter last year.
Preopening expenses were $2 9 million compared to $1 7 million in the prior year.
The increase was related to payroll training and non spo Atlanta.
Charlotte.
Okay.
Both opened in October 2023.
And for S&P Boston.
Lake City, which opened in December.
Interest expense was $1 9 million in fourth quarter of 2023 compared to zero point $7 million in the.
For quarter two.
Tyler Loy: Youth Impact Benefit of $1.5 million in the fourth quarter of 2020, compared to income tax expense of $0.29 in its fourth quarter. Net income attributable to the One Group hospitality business was 4.69 cents per share, compared to a net income of $5.1 million in the fourth quarter of 2022. Adjusted net income of $5.3 million or $0.17 adjusted net income per share compared to an adjusted net income of $6.5 million in the fourth quarter of 2022 or $0.19 net income per share, and Jeffrey Ibega as a fourth quarter attributable to One Group Hospitality was 14.59 compared to 13.9 in the fourth quarter. They have just exceeded their margins for the fourth quarter, and have lost 140 days. 16.1% compared to 14.7% in the prior year.
These impact benefit of $1 5 million in the fourth quarter of 2020.
Compared to income tax expense of <unk>, two branded in the fourth quarter.
Net income attributable to the one group hospitality.
<unk> was $4 6 million or <unk> 15 per share comp.
Compared to a net income of $5 1 million in the fourth quarter of 2022.
Net income per share.
Adjusted net income was $5 3 million or 17% adjusted net income per share compared to an adjusted net income of $6 five nine in the fourth quarter of 2000 22019 net income per share.
Adjusted EBITDA for the fourth quarter attributable to the one group hospitality, Inc, or <unk>.
$14 5 million compared to $13 million in the fourth quarter of 2022.
Adjusted EBITDA margin for the fourth quarter of 140 basis points.
One 1% compared to 14, 7% in the prior year period.
Tyler Loy: We have included a reconciliation of adjusted EBITDA and adjusted net income in the tables for our fourth quarter and fiscal year 2020. Additionally, since September 2022, we have purchased 2.3 million shares, or approximately 7% of our outstanding shares, under our buyback program. Purchases Pursuances Program were completed in October. Turning to liquidity, to finish the quarter with $21 million in cash and $10.6 million available under our revolving creditworthiness, such as a certain condition, and upon all our development and investing activities, internally generated. Now I would like to provide some forward-looking commentary regarding our, His commentary steps to Richmond and Syracuse, associated with former Houston State. We, as always, remind our investors the actual number and timing of new restaurant openings for any given period is subject to a number of factors outside the company's control, including macroeconomic conditions, weather, and factors that affect landlords, contractors, licensees, and regulatory and licensing authorities. Based on information available now and the expectations as of today, we are issuing the following financial projections. Beginning with revenues, we project our total gap revenue.
We have included a reconciliation of adjusted EBITDA and adjusted net income in the table in our fourth quarter and fiscal year 2020 earnings related.
Since September 2022, we have purchased two 3 million shares or approximately 7% of our outstanding shares under our buyback program.
Purchases pursuant to this program were completed in October 2023.
Turning to liquidity, we finished the quarter with $41 million in cash and $6 million available under our revolving credit facility subject to certain conditions.
As Manny mentioned, we plan to fund all of our development and investing activities with internally generated cash.
Now I would like to provide some forward looking commentary regarding our business.
This commentary.
And uncertainty associated with forward looking statements as discussed in our.
These filings.
We as always remind our investors the actual number and timing of new restaurant openings for any given period is subject to a number of factors outside the company's control, including macroeconomic condition.
Other and factored in the pool landlord contractors licensees and regulatory and licensing authorities.
Based on the information available now and expectations as of today.
Following financial targets for 2024.
Beginning with revenues, we project our total GAAP revenue.
Tyler Loy: Managed, Licensed, and Guaranteed Revenuers are expected to, www.larryweaver.com Full-on Operating The percentage of owned restaurant net revenue of approximately 83% Total DNA, exclude stocked accounts. Approximately $30 million. Jesse, you've got approximately 45 million.
<unk> 300 5300, alright.
Manage license fee revenue are expected to be between 16.
$16 million.
Total owned operating expenses percentage of owned restaurant net revenue of approximately 83%.
Total G&A, excluding stock based compensation of approximately $30 million.
Adjusted EBITDA of approximately $45 million.
Tyler Loy: Restaurant pre-opening in Texas. 4 to 5. Operating income between $13 to $15 million. Effective and contextualized between five and. Total capital expenditures out of allowances received from landlords between $30,000 and $35,000. Finally, we plan to add six to eight. I will now turn the call back. Thank you, Tyler.
Restaurant, Preopening expenses between $4 million to $5 million.
Operating income of between 13 to 15 million.
The effective income tax rate between five and 10%.
Total capital expenditure net of allowance.
From landlord of between 30 and $35 million.
Finally, we plan to add six to eight new venue.
One four.
I will now turn the call back demanding.
Thank you Tyler and thank you all for your time today, let me conclude by saying we are in the early stages of our long term growth strategy as we continue to build a portfolio of high volume brands with compelling returns for our shareholders.
Emanuel P. N. Hilario: And thank you all for your time today. Let me conclude by saying we are in the early stages of our long-term growth strategy as we continue to build a portfolio of high-volume brands with compelling returns for our shareholders. Thank you all for your interest in One Group. As I always say, none of this would be possible without the fantastic support of our teammates who bring our mission of great execution to life every day.
Thank you all for your interest in one group as I always say none of this would be possible without the fantastic support of our teammates who bring our mission of great execution to life every day.
Operator: We have some exciting times ahead, and I look forward to seeing you all out there. We appreciate everyone joining us on the call today. Tyler and I are happy to answer any questions they may have. Operator. We will now begin the question and answer session. 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 key.
We have some exciting times ahead, and I look forward to seeing you allow out there.
We appreciate everyone joining us on our call today tower not unhappy.
To answer any questions. They may have operator.
We will now begin the question and answer session to 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 if at any time. Your question has been addressed and you would like to withdraw your question. Please press Star then two at.
Operator: If at any time your question has been addressed and you would like to withdraw your question, please press star then 2. At this time, we will pause momentarily to assemble our roster. The first question comes from Nick Setyan with Wedbush Security. Please go ahead.
At this time, we will pause momentarily to assemble our roster.
The first question comes from Nick <unk> with Wedbush Securities. Please go ahead.
Emanuel P. N. Hilario: Thank you. You know, just given your revenue guidance for 24, I would love to, you know, maybe get some more insight on the choppiness comment around Q1 and quarter data. Obviously, you know, we see the industry data, we know it hasn't been great, but it would just be very helpful if you guys could actually give us some numbers, just so we can bridge the gap between Q1 and to what extent Q1 is impacting the 24 revenue guide. Yeah, Nick, this is Manny.
Thank you.
Just given your revenue guidance for 'twenty four.
I would love to maybe get some more insight on the Choppiness comment around Q1 and quarter to date obviously.
The industry data, we know it hasn't been great, but it would just be very helpful. If you guys could actually give us some numbers just so we can bridge the gap between Q1 and to what extent Q1 impacting the point for revenue guidance.
Emanuel P. N. Hilario: I think just clarifying a little bit on the comments, as you pointed out, January was pretty much a super, was a challenging month, just because of the high comps everyone was coming up against. So we do think that the beginning of this year was probably our toughest part of the lap for the year. So that's probably how I would characterize that. So I don't think we're particularly in any different situation relative to the industry about the tough lap at the beginning of the year. Tyler, anything else?
Yes, Nick this is Manny I think just clarifying a.
A little bit on the comment as you pointed out.
January pretty much for everyone was a super <unk> was a challenging month.
Just because of the high comps everyone was coming growing up again, so we do think that the beginning of this year was probably.
Toughest part of the the left for the year. So that's probably how I would.
That's why I don't think we're particularly any difference.
In a situation relative to the industry about the tough lap on the on the.
Beginning of the year or anything else.
Tyler Loy: Yeah, Nick, as you alluded to in the guidance and how you think about, you know, our sensor sales for the full year. The Q1 results are reflective of, kind of, where we feel like the full year number is going to come in. Okay, all right, fair enough, and then, You know, in terms of the actual unit guidance, 628, you said 1-2-2 is licensed. Would you mind?
Yes, Nick I think as you alluded to on.
On the guidance.
And how you think about our same store sales.
For the kind of the full year guidance.
The Q1 results are reflective of kind of where we feel like.
The full year number is going to come in.
Okay, Alright fair enough.
And then.
In terms of the actual unit guidance fixed to aid you said wanted to license would you mind.
Emanuel P. N. Hilario: We're just breaking down what you think sort of STK versus Kona will be. Yeah, so I think in that guidance, we have two corner growth in that guidance right now. Got it. And then this saltwater social is like a new concept. Yeah, it's a seafood version of SDK.
I would just breaking now what you think sort of SDK versus Kona will be.
Yes, so I think in that guidance, we have two kona grills in that guidance right now.
Got it.
And then the saltwater social it looks like a new concepts.
Yes.
Seafood version of SDK, so that'll be our third restaurant in the Denver market. So we will have our SDK downtown and we already have a clinical role in Cherry Creek and this will be our second restaurant in Cherry Creek Cherry Creek is a very active neighborhood and we think that there is.
Emanuel P. N. Hilario: So that'll be our third restaurant in the Denver market. We already have an SDK downtown, and we already have a corner grill in Cherry Creek. And this will be our second restaurant in Cherry Creek. Cherry Creek is a very active neighborhood.
Emanuel P. N. Hilario: And we think that there's a void in the vibe dining category in that neighborhood, so we think that this will be a great way of introducing vibe dining to the neighborhood. Okay, thanks. The next question comes from Mark Smith with Lake Street Capitals. Please go ahead.
Avoid in the.
Right dining category in their neighborhood. So we think that this will be a great way of introducing dining to the neighborhood.
Okay. Thanks very much.
The next question comes from Mark Smith with Lake Street Capital. Please go ahead.
Mark Eric Smith: Hi guys, my first question for you is just wanted to dig into kind of average weekly sales at STK and, in particular, can you guys talk about the kind of new restaurants and what kind of volume they're opening up? I mean, the new restrooms are opening up greater than 200,000 per week. So I think our model is about 8 million, and the new units are, you know, settling in between 10 and 12 million a year, so very significant high volumes.
Hi, guys.
First question for me just wanted to dig into kind of average weekly sales at SDK and in particular.
Can you guys talk about kind of new restaurants.
Volume they are opening up.
I mean, the the new restaurants are opening up greater than 200000 per week volumes. So I think our model is about $8 million on the new units are.
Settling in between 10, and 12 million a year, so very significant high volumes.
Emanuel P. N. Hilario: And then looking back at Q4, any commentary just around, I know you said you were excited about, you know, Valentine's Day was positive, but any commentary on, you know, the holiday period within Q4 and kind of how that compared year over year? I mean, as I think we pointed out on our prepared statements, the holidays themselves, we had fantastic days. So I think Christmas Day, Christmas Eve, and New Year's Eve were fantastic. So I would say that, you know, and Thanksgiving was also fantastic. So I think the actual performance during the holidays was very, very good. And then I would say that, you know, in terms of things like the event business, we have very good books in terms of bookings. But we did see a little bit less last-minute bookings for events, which we typically see right at the beginning of December, a pretty big rush for last-minute events. We didn't see this trend last year.
Okay.
And then looking back at Q4 and any commentary just around I know you said you're excited about Valentine's day was positive but any commentary on.
The holiday period within Q4, and kind of how that comped year over year.
Okay.
I mean.
I think we've pointed out on our on our prepared statements. The holidays themselves. We have fantastic days, So I think the <unk>.
Christmas Day Christmas Eve.
New year's Eve was fantastic, so I would say that.
And Thanksgiving was also fantastic. So I think the actual performance on the holidays was was it was very very good and then.
I would say that in terms of.
As things like the event business, we have a very good books in terms of bookings.
We did see a little bit less of last minute bookings on events, which we typically see right at the beginning of December.
Pretty big Rush for a last minute events, we didn't see that this.
Emanuel P. N. Hilario: But overall, I would say that the, you know, holiday business was very good for the business or for the company. And then you talked about emphasizing value and kind of what you call the choppy market here. You gave your guidance for restaurant level margins. How can we kind of think about and how are you guys balancing, emphasizing some value proposition while at the same time driving what looks like improvements? Restaurant and Public Market. Well, I mean, we did that in the fourth quarter.
Trend last year, but overall I would say that's the.
The holiday business was very good for the business for the company.
Okay.
And then you talked about emphasizing value and kind of what you called a choppy market here.
You gave your guidance for restaurant level margins.
How can we can think about and how are you guys balancing emphasizing some value proposition while same time driving what looks like improvements in restaurant level margin.
Well I mean, we did that in the fourth quarter. So I mean would this feature 369.
Emanuel P. N. Hilario: So I mean, we did feature, you know, three, six, nine, another value layer in there. But also remember that we balance that with premium price promotions in the restaurant. So we will balance that with things like the Why Good promotion at SCK, or we would do the bounty of the seven seas promotion. So we're balancing the value with premium products. And obviously, you know, the higher end consumer still is actively participating in trading up to premium products.
Another value layers in there, but also remember that.
We balanced that with premium price promotions in the restaurants, so we will balance that with.
With things like the white goods promotional SDK or we would use the bounty of the seven seas promotions, so what bar belling the value with with the premium products obviously.
The higher end consumer still is actively participating on trading up to premium products. So that's how we rebalanced a big part of that and just keeping the at the higher end promotions are really strong and then the second thing that would do to balance that out as we put a lot of attention into our cocktail program. So if you were in.
Emanuel P. N. Hilario: So that's how we balance a big part of that and just keep the higher-end promotions really strong. And then the second thing that we do to balance that out is we put a lot of attention into our cocktail program. So if you were in the restaurants during the holidays, you probably noticed our emphasis on holiday cocktails and, as well as brunch, they are part of a cocktail. So we balance the value introductions to that make the brand accessible with some premium cocktail and product offerings in restaurants.
And the restaurants during the holidays, you probably noticed our emphasis on how on how will they cocktails and as well as branch they park cocktails. So we balanced.
The value introductions.
To that make the brand accessible with some premium crafted cocktail and product offerings in restaurants.
Emanuel P. N. Hilario: And then the last one for me, just as we think about these next three that are currently under construction. I know that things can always shift a little bit, but any insight into the kind of timing of the next three openings? Yeah, I mean, the next restaurant that we will be opening is Aventura Mall in Florida. That restaurant has been in construction now for about two months, maybe even a little longer than that, so it's in good progress. And again, the million-dollar question these days about these openings is how you clear out the permits at the end. Sometimes it takes two to three weeks to get all the inspections, and it seems like it takes a little bit of a longer time to clear that out.
Okay and then the last one for me just as we think about these next three that are currently under construction and I know that things can always shift a little bit but any insight into.
Again, the timing of the next three openings.
Yeah, I mean, the next rush them that we will be opening is.
I've been to a mall in Florida that Russia has been in construction now for about two months, maybe even a little longer than that so it's in good progress.
And again the million dollar question. These days about these openings is how you clear out the permits at the end.
Some of the times it takes two to three weeks to get all the inspections and it seems like it takes a little bit of a longer time to clear that out, but I would say towards towards the middle to the end of the second quarter for that Havent Tour mouse restaurant to open and then immediately thereafter, we will open.
Emanuel P. N. Hilario: I would say towards the middle to the end of the second quarter for that Aventura Mall restaurant to open. And then immediately thereafter, we will open the Southwater Social, and then early, mid-third quarter, or mid-third quarter, we'll open the Corner Grill in Tigard, Oregon. And then the rest of the development is towards the end of the third and beginning of the fourth quarter.
The saltwater social and then.
Early mid third quarter or mid third portable opened.
The Carnival and Tigard, Oregon, and then the rest of the development is stores.
The end of the third beginning of fourth quarter, we will have a licensed restaurant in there.
Emanuel P. N. Hilario: We will have a licensed restaurant in there by the middle of the second quarter this year. Perfect. Thank you. Thank you. If this concludes our question and answer session, I would like to turn the conference back over to Manny Hilario for any closing remarks. Thank you. As always, I'd like to recognize the team for its commitment to our mission and executing at a very high level, so I appreciate everyone's contributions to that. And then also, thank you for your time today to be on the call here, and I look forward to seeing you all in our restaurants. Everybody have a great day. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect. Thank you. Bye. BF-WATCH TV 2021, D.
In the middle.
The second quarter this year.
Okay perfect.
Perfect. Thank you.
Thank you.
This concludes our question and answer session I would like to turn the conference back over to Manny Hilario for any closing remarks.
Thank you as always I'd like to recognize.
The team for its commitment to our mission and executing at a very high level. So I appreciate everyones contributions for that.
And then also thank you for your time today to be on the call here and I look forward to seeing you all in our restaurants, everybody have a great day.
The conference has now concluded. Thank you for attending today's presentation you may now disconnect.
Okay.
Okay.
Sure.
Okay.
Okay.
Yes.
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