Q1 2025 BJ's Restaurants Inc Earnings Call

Operator: Good afternoon, and welcome to the BJ's Restaurants first quarter 2025 earnings release conference call. All participants will be in listen-only mode. If you need assistance, please signal a conference specialist by pressing the star key followed by zero.

Good afternoon, and welcome to the Bj's restaurants first quarter 'twenty twenty-five earnings release 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.

Operator: After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then 1 on your telephone keypad. To withdraw your question, please press star then 2. Please note, this event is being recorded.

After today's presentation there'll be an opportunity to ask questions to 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.

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 Change: I would now like to turn the conference over to Ronny Schirmer director of SEC reporting. Please go ahead.

Speaker Change: Thank you operator, good afternoon, everyone and welcome to our fiscal 2025 first quarter Investor Conference call and webcast.

Rana Schirmer: Good afternoon, everyone, and welcome to our Fiscal 2025 First Quarter Investor Conference Call and Webcast. After the market closed today, we released our financial results for our Fiscal 2025 First Quarter. You can view the full text of our earnings release on our website at www.bjrestaurants.com.

Speaker Change: After the market close today, we released our financial results for fiscal 2025 first 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 litigation.

Rana Schirmer: 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 Litigation Reform Act of 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. 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.

Speaker Change: <unk> reform acts of 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 Change: 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.

Rana Schirmer: 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.

Speaker Change: Shipments contained in the company's filings with the Securities and Exchange Commission, we will start today's call with prepared remarks from Brad Richmond, Our interim Chief Executive Officer, followed by a biotech our president and Chief concept Officer, and Tom <unk>, Our Chief Financial Officer. After our prepared remarks, we will take your.

Rana Schirmer: We will start today's call with prepared remarks from Brad Richmond, our Interim Chief Executive Officer, followed by Lyle Tick, our President and Chief Concept Officer, and Tom Hodick, our Chief Financial Officer. After our prepared remarks, we will take your questions.

Brad Richmond: And with that, I will turn the call over to Brad Richmond. Thank you, Rana. And good afternoon, everyone. We appreciate you joining us today to discuss our performance for the fiscal first quarter of 2025 and updated annual outlook for 2025. Our first quarter comp sales performance was strong, driven by significant traffic growth, which meaningfully outpaced the industry. While sales were a bit behind our internal expectations, The shortfall was isolated to February where monthly comps were negative due to adverse weather and the delay in federal income tax refund process. But, January and March comp growth was strong at approximately plus three percent, in line with our expectations.

Speaker Change: And with that I will turn the call over to Brad Richmond, Brad.

Speaker Change: Thank you Robin and good afternoon, everyone. We appreciate you joining us today to discuss our performance for the fiscal first quarter of 2025 and updated annual outlook for 2025.

Speaker Change: Our first quarter comp sales performance was strong driven by significant traffic growth, which meaningfully outpaced the industry.

Speaker Change: While sales were a bit behind our internal expectation.

Speaker Change: This shortfall was isolated to February where monthly comps were negative due to adverse weather and the delay in federal income tax refund processing.

Speaker Change: But January and March comp growth was strong at approximately plus 3% in line with our expectations.

Brad Richmond: Importantly, our operating initiatives delivered improved guest satisfaction scores, which bodes well for future sales growth, and we expanded margins beyond the normal sales growth leveraging expectations. As a result of the stronger margin performance, we've raised our earnings expectations and increased our planned share buyback range.

Speaker Change: Importantly, our operating initiatives delivered improved guest satisfaction scores, which bodes well for future sales growth and we expanded margins beyond the normal cells growth leveraging expectations.

Speaker Change: As a result of the stronger margin performance, we've raised our earnings expectations and increased our planned share buyback range. Tom will take you through those details in a minute.

Brad Richmond: Tom will take you through those details in a minute. Even amidst the potential macroeconomic headwinds in 2025, we believe we are well positioned to continue to be a share taker and expand margins as we look across the remainder of the year. Underlaying this are well-developed, near-term sales growth drivers, initiatives around operational excellence, and executing at our best, while also supporting investments in our longer-term strategic initiatives to create shareholder value beyond 2025. Before I turn it over to Lyle to walk you through a few of those key highlights, I want to thank our restaurant operators who make this happen every day at every restaurant for every guest.

Speaker Change: Even amidst the potential macroeconomic headwinds in 2025, we believe we are well positioned to continue to be a share taker and expand margins as we look across the remainder of the year.

Speaker Change: Okay.

Speaker Change: Underlying this are well developed near term sales growth drivers initiatives around operational excellence and executing at our best while also supporting investments in our longer term strategic initiatives to create shareholder value beyond 2025.

Speaker Change: Before I turn it over to al to walk you through a few of those key highlights I want to thank our restaurant operators, who make this happen every day and every restaurant for every guest.

Brad Richmond: our support team centers who have raised their level of support to enable our operators to perform better, and the rest of our leadership team, who have been very agile and adaptive on developing and implementing near-term actions, and have put in the extra effort to develop our broader strategic initiatives as we move this business ahead with more clarity and certainty. And a big thanks to Lyle for his guidance through the early phases of this journey. His insight and leadership have been instrumental in our progress, and we believe BJ's is well-positioned for the long term.

Speaker Change: Our support team centers, who have raised their level of support to enable our operators to perform better.

Speaker Change: And the rest of our leadership team, who have been very agile and adaptive on developing and implementing near term actions and have put in the extra effort to develop our broader strategic initiatives as we move this business ahead with more clarity.

Speaker Change: And a big thanks to awhile for his guidance through the early phases of this journey is insight and leadership have been instrumental in our progress and we believe bj's is well positioned for the long term.

Lyle Tick: With that, let me turn it over to Lyle to talk more broadly about our brand refresh and growth initiative. Thank you, Brad. Good afternoon, everyone, and thank you for joining us today. I'm happy to report another quarter of positive sales, driven by 2.7% traffic growth, which beat the black box industry average by approximately 320 basis points, as well as margin expansion, resulting in 16% restaurant-level operating margins and 10.2% adjusted EBITDA margins, representing improvements of 100 basis points and 150 basis points, respectively, year over year. I'm also pleased with the progress we're making across both our short and long-term strategic initiatives.

Speaker Change: With that let me turn it over to <unk> to talk more broadly about our brand refresh and growth initiatives.

Speaker Change: Thank you Brad good afternoon, everyone and thank you for joining us today.

Speaker Change: I'm happy to report another quarter of positive sales driven by two 7% traffic growth, which beat the black box industry average by approximately 320 basis points as well as margin expansion, resulting in 16% restaurant level operating margins and 10, 2% adjusted EBITDA margins.

Speaker Change: Representing improvements of 100 basis points, and 150 basis points, respectively year over year.

Speaker Change: I'm also pleased with the progress, we're making across both our short and long term strategic initiatives.

Lyle Tick: While we're still in the early innings of this journey, we're increasingly confident in our actions and continue to believe the work we're putting in place now we can build upon going forward.

Speaker Change: While we're still in the early innings of this journey, we are increasingly confident in our actions and continue to believe the work we're putting in place now we can build upon going forward.

Lyle Tick: Before I look ahead, I will take a moment to briefly double-click on Q1. We continue to put the guest and team member experience at the center of everything we do, and I believe that is reflected in our sales performance, particularly our continued traffic outperformance, as well as our margin expansion. On the sales side, we continue to leverage one of our core brand equities, the bazooki. The Pazuki meal deal continues to resonate with guests, providing a great value and an accessible everyday splurge opportunity that consumers need now more than ever. I also want to give a shout out to our marketing and operations teams for their agility in recognizing and building on the emerging social media interest in our Pazuki platter, which combines four regular-sized Pazukis into one huge treat.

Speaker Change: Before I look ahead, I will take a moment to briefly double click on Q1.

Speaker Change: We continue to put the guest and team member experience at the center of everything we do and I believe that is reflected in our sales performance, particularly our continued traffic outperformance as well as our margin expansion on.

Speaker Change: On the sales side, we continue to leverage one of our core brand equities the bazooka.

Speaker Change: <unk> meal deal continues to resonate with guests, providing a great value and an accessible everyday splurge opportunity that consumers need now more than ever.

Speaker Change: Also wanted to give a shout out to our marketing and operations teams for their agility and recognizing and building on the emerging social media interest in our <unk> platter, which combined for regular sized <unk> into one huge treat this off menu jumbo Paducah started to gain traction in January on ticked up in the <unk>.

Lyle Tick: This off-menu jumbo Pazuki started to gain traction in January on TikTok, and the teams moved quickly on both the marketing and operations side to leverage the momentum. So far, the platter has generated over $57 million in organic social impressions, and we've sold over 24,000 pizzichi platters, a 17 times increase from the previous run rate. This compelling value, combined with increased social relevancy, was reflected in traffic growth not only during the week when the Pazucki meal deal was offered, but also throughout the weekend. On the margin side, we continue to focus on helping our team members be more effective and efficient to enable better execution and guest satisfaction.

Speaker Change: <unk> moved quickly on both the marketing and operation side to leverage the momentum.

Speaker Change: So far the platter has generated over $57 million in organic social impressions and we've sold over 24000 predictive ladders or 17 times increase from the previous run rate.

Speaker Change: This compelling value combined with increased social relevancy was reflected in traffic growth not only during the week when the <unk> meal deal was offered but also throughout the weekend.

Speaker Change: On the margin side, we continue to focus on helping our team members to be more effective and efficient to enable better execution and guest satisfaction.

Lyle Tick: Outside our typical sales leverage gains, we continue to make practical improvements to our POS and KDS systems to help make it easier for our team members to enter menu items, improving accuracy and speed for the guests, and helping us reduce our comp food and beverages, which has seen a 13% reduction year over year, a win-win for the team member and guest experience. I also want to highlight our proactive facilities program, leveraging our equipment tagging we put in place in the second half of last year, and preventative maintenance programs that mitigate emergency repairs and ensure our team members have the tools to deliver.

Speaker Change: Outside of our typical sales leverage gains we continued to make practical improvements to our Pos and <unk> systems to help make it easier for our team members to enter menu items, improving accuracy and speed for the guests and helping us reduce our comp food and beverages, which has seen a 13% reduction year over year.

Speaker Change: A win win for the team member and guest experience.

Speaker Change: I also want to highlight our proactive facilities program leveraging our equipment tagging, we put in place in the second half of last year and preventative maintenance programs that mitigate emergency repairs and ensure our team members have the tools to deliver.

Lyle Tick: These programs, combined with other facilities initiatives, have delivered an overall 4% R&M spend reduction for the quarter, while helping our team members execute better.

Speaker Change: These programs combined with other facilities initiatives have delivered an overall, 4% R&M spend reduction for the quarter, while helping our team members execute better.

Lyle Tick: All of the work we're doing culminates in our guest satisfaction metrics. including food, value, and recommend scores, all hitting multi-year highs, making us increasingly confident that the work we are doing has a runway to build upon.

Speaker Change: All of the work, we're doing culminates in our guest satisfaction metrics, including food value and recommend scores all hitting multiyear highs, making us increasingly confident that the work. We are doing has a runway to build upon.

Lyle Tick: As we head into our celebration season during the second quarter, our momentum provides us a great opportunity to further drive sales and grow profit. I want to thank our teams for their dedication and agility navigating a choppy sales quarter that started strong in January, followed by a challenging February driven by weather and some delayed tax return processing, and then March that bounced back with strong top line trends that are continuing to hold. This kind of choppiness requires a lot of agility by our operators to forecast, staff, and manage the business efficiently and effectively, and they did just that in Q1.

Speaker Change: As we head into our celebration season during the second quarter.

Speaker Change: Our momentum provides us a great opportunity to further drive sales and gross profit.

Speaker Change: I want to thank our teams for their dedication and agility navigating a choppy sales quarter. It started strong in January followed by a challenging February driven by weather and some delayed tax returns processing and then March that bounce back with strong top line trends that are continuing to hold.

Speaker Change: This kind of Choppiness requires a lot of agility by our operators to forecast staff and manage the business efficiently and effectively and they did just that in Q1.

Lyle Tick: With respect to the consumer, clearly there's a lot of uncertainty out there, which no one loves. Having said that, we're not seeing any marked changes in our guests' behavior across income cohorts, traffic, or check management. While we have seen a nominal increase in Fuzuki Meal Deal incidents, the increase we have seen in traffic, combined with the great job our team is doing leveraging the incremental sales, have delivered strong results overall. I feel confident that between the Fuzuki Meal Deal improvements in operations and our product roadmap, we're in a good place to compete and win at a time when consumers will be focused on ensuring when they go out that it's worth it.

Speaker Change: With respect to the consumer clearly theres a lot of uncertainty out there, which no one loves having said that we're not seeing any marked changes in our guest behavior across income cohorts traffic or check management.

Speaker Change: While we have seen a nominal increase in <unk> meal deal incidents the increase we've seen in traffic combined with the great job. Our team is doing leveraging the incremental sales have delivered strong results overall I.

Speaker Change: I feel confident that between the <unk> meal deal improvements in operations and our product roadmap. We're in a good place to compete and win at a time when consumers will be focused on ensuring when they go out that it's worth it.

Lyle Tick: On the tariff front, Tom will get into more details, but about 85% of our food is sourced from either U.S., Canada, or Mexico under USMCA and not subject to the proposed tariff. We do not see much impact in Q2, but have contemplated some modest incremental inflation in the second half. At this point, we feel comfortable with what we have baked into our guidance based on what we know today and are not planning any extraordinary changes to our pricing or promotional optimization initiatives. We are, of course, keeping a close eye on the evolution of the policy, and we'll adjust accordingly.

Speaker Change: On the tariff front, Tom will get into more details, but about 85% of our food is sourced from either U S, Canada or Mexico under U S MCA and not subject to the proposed tariffs we do not see much impact in Q2, but have contemplated some modest incremental inflation in the second half at this point.

Speaker Change: Feel comfortable with what we have baked into our guidance based on what we know today and are not planning any extraordinary changes to our pricing or promotional optimization initiatives. We are of course, keeping a close eye on the evolution of the policy and we will adjust accordingly.

Lyle Tick: Looking ahead, we recently completed our brand positioning work, and while it's only been 10 weeks since we reported Q4, our cross-functional teams are diligently working to move our plans from strategy to action, and I continue to be pleased with the progress. We'll begin to see the impact of the work across our menu, operations, marketing in the second half of the year.

Speaker Change: Looking ahead, we recently completed our brand positioning work and while it has only been 10 weeks since we reported Q4, our cross functional teams are diligently working to move our plans from strategy to action and I continue to be pleased with the progress we will begin to see the impact of the work across our menu operations marketing in the second.

Speaker Change: Half of the year.

Lyle Tick: I will now provide a brief update on progress across our four strategic priorities. Starting with the team member experience, we continue to focus on simplification and training. As I mentioned before, we are working from a relative position of strength here. Our turnover continues to be below pre-pandemic levels, significantly below industry averages, and the trend is improving. Plus, we see a high correlation between manager tenure and restaurant performance. I just returned from some visits last week in California and Colorado, and the engagement and energy in the field is great. They feel the momentum in the business and are excited about the changes on the horizon, many of which have come from them.

Speaker Change: I will now provide a brief update on progress across our four strategic priorities starting with the team member experience, we continue to focus on simplification and training.

Speaker Change: As I mentioned before we are working from a relative position of strength here. Our turnover continues to be below pre pandemic levels significantly below industry averages and the trend is improving plus we see a high correlation between manager manager tenure and restaurant performance.

Speaker Change: I just returned from some visits last week in California, and Colorado, and the engagement and energy in the field is great.

Speaker Change: Feel the momentum in the business and are excited about the changes on the horizon, many of which have come from that.

Lyle Tick: And I think this energy is reflected in the improvements we're seeing across guest metrics that I mentioned earlier. Simplification is going to be an ongoing journey for us, led by operations and supported by our cross-functional support center team. In addition to continuing the work we're doing to optimize our POS ordering screens, we stood up a working group led by operations with the participation of our directors of operations, general managers, and team members. This task force has identified 50-plus potential process and procedure improvements that come directly from the restaurants, and we are working through prioritizing and sequencing impact and efforts.

Speaker Change: And I think this energy is reflected in the improvements we're seeing across guest metrics that I mentioned earlier.

Speaker Change: Simplification is going to be an ongoing journey for us led by operations and supported by our cross functional support center teams. In addition to continuing the work we're doing to optimize our Pos ordering screens, we set up a working group led by operations with the participation of our directors of operations General managers.

Speaker Change: And team members. This task Force Task Force has identified 50, plus potential process and procedure improvements that come directly from the restaurants, and we are working through prioritizing and sequencing impact an effort.

Lyle Tick: On the training front, we continue to refine our new team member training, and that feedback continues to be very positive. This is particularly true with respect to the first 90-day retention, as new team members get buddied up from the beginning and more quickly feel part of our community. Our next big training initiative is rolling out new manager training and a refreshed certified training manager program.

Speaker Change: On the training front, we continue to refine our new team member training and that feedback continues to be very positive.

Speaker Change: This is particularly true with respect to the first 90 day retention as new team members get Buddied up from the beginning and more quickly feel part of our community.

Our next Big training initiative is rolling out new manager training and a refresh certified training management program. Our aim is to roll this out at our GM conference in Q4.

Lyle Tick: Our aim is to roll this out at our GM conference in Q4.

Lyle Tick: With respect to our menu and handcrafted food and beverage offering, on our last call, I mentioned that the brand work we have done has reinforced that we have some very powerful core pillars of our menu with strong brand equity and association, as well as some emerging opportunities. Our signature pizza, our world-famous bouzouki, and our award-winning craft beverages are clear areas of strong association and equity. Our shareable items, steaks and slow roasts, are strong traffic drivers and emerging areas of strength. In these platforms where we choose to compete to win, we want to ensure we have the best offering and we can deliver it consistently great.

Speaker Change: With respect to our menu and handcrafted food and beverage offering on our last call I mentioned that the brand work. We have done has reinforced that we have some very powerful core pillars of our menu with strong brand equity and association as well as some emerging opportunities.

Speaker Change: Our signature pizza, our world famous <unk> and our award winning craft beverages are clear areas of strong Association and equity.

Speaker Change: Shareable items Stakes in slow Roes are strong traffic drivers and emerging areas of strength in.

Speaker Change: And these platforms, where we choose to compete to win we want to ensure we have the best offering and we can deliver a consistently great to.

Lyle Tick: To enable this, we've also identified an opportunity to optimize menu offerings around these core pillars. We're taking a structured category management approach to this work, with the first category being a renovation of our signature pizza platform. Pizza is a core equity and strong brand association, but has had eroding guest satisfaction and incidents in recent years. We've dissected the feedback, and our culinary team has renovated the product from the ground up, starting with the crust to ensure it's crispy and light every time, through to the new sauce, the cheese, pepperoni, and so on. Our operations and central location testing were very strong, and we recently moved into an expanded market test with encouraging initial results.

Speaker Change: To enable this we've also identified an opportunity to optimize menu offerings around these core pillars. We're.

Speaker Change: We're taking a structured category management approach to this work with the first category being a renovation of our signature of pizza platform.

Speaker Change: Pizza is a core equity and strong brand association, but has had eroding guest satisfaction and incidents in recent years, we've dissected the feedback and our culinary team has renovated the product from the ground up starting with the Cros to ensure its Christy and light every time due to the new source the cheese pepperoni and so on.

Speaker Change: Our operations in central location testing were very strong and we recently moved into an expanded market tests with encouraging initial results.

Lyle Tick: Along the journey, we're also taking advantage of our natural menu cycles to implement low-hanging food opportunities to drive guest engagement and our simplification opportunities. On April 17th, we introduced two new wing sauces, Honey Barbecue and Honey Buffalo, expanding turf coverage with the sauces, the main driver of choice in this category, without adding any operational complexity. Wings remain our number one ordered shareable appetite. We also launched our LTO Snickers Pazookie, which is driving a lot of brand buzz and trials. Looking ahead to our June menu, we've identified nine SKU reductions and five prep simplifications that we're moving forward as we continue to plan for further category optimizations, which require more thorough testing like PT.

Speaker Change: Allowing the journey. We're also taking advantage of our natural menu cycles to implement low hanging fruit opportunities to drive guest engagement and our simplification opportunities.

Speaker Change: On April 17th we introduced two new wings sauces, honey barbecue and honey Buffalo expanding turf coverage with the sauces. The main driver of choice in this category without adding any operational complexity wings remain our number one ordered shareable appetizers.

Speaker Change: We also launched our <unk> Snickers, bazooka, which is driving a lot of brand Buzz and trial.

Speaker Change: Looking ahead to our June menu, we've identified nine SKU reductions and five prep simplifications that we're moving forward as we continue to plan for further category optimizations, which require more thorough testing like pizza.

Lyle Tick: Our third priority is delivering wow hospitality. Hospitality has always been at the heart of BJ's and a big reason why our loyal guests keep coming back. We continue to be focused on putting our managers and team members in the best position to deliver wow hospitality to our guests, both on and off premise. We continue to evolve and calibrate our AI forecasting model and labor schedule. It's all about having our team members in the right place at the right time to wow our guests. We're seeing opportunities to be more efficient and effective, particularly around the shoulder periods, while also identifying labor mix and peak hour opportunities.

Speaker Change: Our third priority is delivering low hospitality hospitality has always been at the heart of Bj's and a big reason why our loyal guests keep coming back we continue to be focused on putting our managers and team members in the best position to deliver allow hospitality to our guests both on and off premise we continue to evolve.

Speaker Change: Oliver and calibrate, our AI forecasting model and labor scheduling.

It's all about having our team members in the right place at the right time to Wow, our guests, we're seeing opportunities to be more efficient and effective particularly around the shoulder periods. While also identifying labor mix and peak hour opportunities and an expanded pilot and an expanded pilot in certain restaurants in Texas and northern <unk>.

Lyle Tick: In an expanded pilot in certain restaurants in Texas and Northern California, we're leveraging AI to drive not just the forecasting, but also our labor scheduling, and we're seeing encouraging improvements in both labor hours and guest sentiment versus control. We will continue to calibrate and scale throughout 2025, but we believe we have a definite opportunity going forward.

Speaker Change: California, we're leveraging AI to drive not just the forecasting but also our labor scheduling and we are seeing encouraging improvements in both labor hours and guest sentiment versus control we.

Speaker Change: We will continue to calibrate and scale throughout 2025, but we believe we have a definite opportunity going forward.

Lyle Tick: Lastly, we have our fourth priority, keeping our atmosphere fresh. BJ's atmosphere has always been a differentiator for the brand. Investing in keeping our atmosphere fresh through remodels will continue to be a priority as we move through 2025 and we continue to rebuild our new restaurant pipeline. On remodels, we've completed 8 so far in 2025, with approximately 20 more planned for the remainder of the year. Our remodeled restaurants continue to perform as expected, with improved performance versus control.

Speaker Change: Lastly, we have our fourth priority keeping our atmosphere fresh bj's atmosphere has always been a differentiator for the brand investing in keeping our atmosphere fresh to Remodels will continue to be a priority as we move through 2025, and we continue to rebuild our new restaurant pipeline.

Speaker Change: On Remodels, we've completed eight so far in 2025 with approximately 20 more planned for the remainder of the year.

Speaker Change: Our remodeled restaurants continue to perform as expected with improved performance versus control.

Lyle Tick: On new restaurants, we opened a new restaurant in Queen Creek, Arizona, just outside of Phoenix. It was our second highest sales opening week ever after Tracy, California, in 2024, and reinforces our hypothesis of focusing our near-term development in geographies where we have an existing footprint, infrastructure, and awareness. Our capital expenditures in 2025 related to new restaurant openings continue to depend on how quickly we can develop a more robust and targeted pipeline that aligns with our refined criteria for new locations. We're excited about the future unit growth for BJ's, and we'll keep you updated as we move through the year.

On new restaurants, we opened a new restaurant in Queen Creek, Arizona, just outside of Phoenix.

Speaker Change: Our second highest sales opening week ever after Tracy, California in 2024, and reinforces our hypothesis of focusing our near term development and geographies, where we have an existing footprint infrastructure and awareness.

Speaker Change: Capital expenditures in 2025 related to new restaurant openings continue to depend on how quickly we can develop a more robust and targeted pipeline that aligns with our refined criteria for new locations. We're excited about the future unit growth for Bj's and we'll keep you updated as we move through the year.

Lyle Tick: I'm proud of our teams and the progress to date. The energy, engagement, and alignment behind our strategic initiatives has allowed us to create early momentum and lay strong foundations for an exciting and ambitious agenda still on the horizon.

Speaker Change: I am proud of our teams and the progress to date, the energy engagement and alignment behind our strategic initiatives.

Speaker Change: Allowed us to create early momentum and laid strong foundations for an exciting and ambitious agenda still on the horizon. Thank.

Tom Hodick: Thank you, and now I'm going to turn it over to Tom to provide more details on first quarter results and an updated outlook for 2025. Thanks, Lyle, and good afternoon, everyone. In the first quarter, we generated sales of $348 million, which was 3.2% higher than last year. On a comparable restaurant basis, Q1 sales increased by 1.7%, driven primarily by 2.7% traffic growth. We had a solid start to the quarter, with comp sales up approximately 3% in January. Winter weather impacted our February results, with comp sales down approximately 1%. Then we ended the quarter much like it started, with March comp sales up approximately 3%.

Speaker Change: Thank you and now I'm going to turn it over to Tom to provide more details on first quarter results and an updated outlook for 2025.

Tom: Thanks, <unk> and good afternoon, everyone.

Tom: In the first quarter, we generated sales of $348 million, which was three 2% higher than last year.

Tom: On a comparable restaurant basis Q1 sales increased by one 7% driven primarily by two 7% traffic growth.

Tom: We had a solid start to the quarter with comp sales up approximately 3% in January.

Tom: Winter weather impacted our February results with comp sales down approximately 1%.

Tom: We ended the quarter much like it started with March comp sales up approximately 3%.

Tom Hodick: As Lyle mentioned, we have not seen any material change in guest behavior in recent weeks. April comp sales are up in the mid 2% area and up more than 3% when excluding the Easter week with the mismatched holiday lap. Our restaurant level cash flow margin was 16% in Q1, which was a 100 basis point improvement from a year ago. We effectively leveraged our sales and improved our operational efficiencies, delivering improving margins while also investing in marketing. Our restaurant-level operating profit increased 10% to $55.6 million, which marks our most profitable Q1 ever. We are pleased with our progress improving margins to date, and as Lyle outlined, we have a range of strategies and initiatives to continue to grow margins both on a dollar and percentage basis going forward.

Tom: As Lyle mentioned, we have not seen any material change in guest behavior in recent weeks.

Tom: April comp sales are up in the mid 2% area and up more than 3% when excluding the Easter week with the mismatch holiday lap.

Tom: Our restaurant level cash flow margin was 16% in Q1, which was a 100 basis point improvement from a year ago.

Tom: We effectively leveraged our sales and improved operational efficiencies delivering improving margins, while also investing in marketing.

Our restaurant level operating profit increased 10% to $55 6 million, which marks our most profitable Q1 ever.

Tom: We are pleased with our progress improving margins to date and as Lyle outlined we have a range of strategies and initiatives to continue to grow margins, both on a dollar and percentage basis going forward.

Tom Hodick: For more detail on restaurant expenses, our cost of sales was 25% in the quarter, which was 20 basis points favorable compared to a year ago. Food cost inflation was approximately 3% year over year, but deflationary from Q4 levels, driven by lower sequential costs for bone-in wings, steak, and produce. Labor and benefits expenses were 36.1% of sales in the quarter, which was 100 basis points favorable to last year. Our restaurant teams hit their stride leveraging higher sales and boosting efficiencies while improving our guest sentiment scores as we drove solid traffic in the quarter. Remember that winter weather had a meaningful impact on sales and operations during the quarter, so we delivered a solid labor performance despite operational headwinds during periods of less predictable traffic.

Tom: For more detail on restaurant expenses, our cost of sales was 25% in the quarter, which was 20 basis points favorable compared to a year ago.

Tom: Food cost inflation was approximately 3% year over year, but deflationary from Q4 levels driven by lower sequential costs for bone in wings stake in produce.

Tom: Labor and benefits expenses were 36, 1% of sales in the quarter, which was 100 basis points favorable to last year.

Tom: Restaurant teams hit their stride, leveraging higher sales and boosting efficiencies, while improving our guest sentiment scores as we drove solid traffic in the quarter.

Tom: Remember that winter weather had a meaningful impact on sales and operations during the quarter.

Tom: So we delivered a solid labor performance, despite operational headwinds during periods of less predictable traffic.

Tom Hodick: Occupancy and operating expenses were 23% of sales in the quarter, which was 20 basis points unfavorable compared to last year. The difference versus last year was due to investing 20 basis points in additional marketing to drive incremental traffic to our restaurants. GNA was $21.8 million in the first quarter, was $1.2 million lower than a year ago, and in line with our expectations. As a reminder, our Q1 2024 G&A was elevated due to legal expenses related to our shareholder cooperation agreements, higher deferred compensation expense, and severance, totaling approximately $1.9 million. As a reminder, the higher deferred compensation expense last year of approximately $800,000 had a matching amount in the other income line where the offsetting market gain is recognized.

Tom: Occupancy and operating expenses were 23% of sales in the quarter, which was 20 basis points unfavorable compared to last year.

Tom: The difference versus last year was due to investing 20 basis points in additional marketing to drive incremental traffic to our restaurants.

Tom: G&A was $21 8 million in the first quarter was $1 $2 million lower than a year ago and in line with our expectations.

Tom: As a reminder, our Q1 2020 for G&A was elevated due to legal expenses related to our shareholder cooperation agreements higher deferred compensation expense and severance totaling approximately $1 9 million.

Tom: As a reminder, the higher deferred compensation expense last year of approximately 800000 had a matching amount in the other income line, where the offsetting market gain is recognized.

Tom Hodick: Adjusted EBITDA was $35.4 million and 10.2% of sales in the first quarter. Q1 EBITDA was $6 million higher than last year, while we also made longer term investments in our brand positioning, which Lyle highlighted. We reported net income of $13.5 million and diluted net income per share of $0.58 on a gap basis for the quarter. Diluted net income per share increased by 80% compared to $0.32 per share last year. During the quarter, we repurchased and retired approximately 404,000 shares of common stock at a cost of $14.1 million. At the end of Q1, we had approximately $72 million available under our share repurchase program.

Tom: Adjusted EBITDA was $35 4 million and 10, 2% of sales in the first quarter.

Tom: Q1, EBITDA was $6 million higher than last year, while we also made longer term investments in our brand positioning which <unk> highlighted.

Tom: We reported net income of $13 5 million and diluted net income per share of <unk> 58 on a GAAP basis for the quarter diluted net income per share increased by 80% compared to 32 per share last year.

Tom: So during the quarter, we repurchased and retired approximately 404000 shares of common stock at a cost of $14 1 million.

Tom: At the end of Q1, we had approximately $72 million available under our share repurchase program.

Tom Hodick: And in April, we repurchased an additional 324,000 shares at a cost of $10.5 million. Turning to the balance sheet, we ended the first quarter with net debt of $66.5 million, comprised of a debt balance of $85.5 million, with cash in equivalents of $19 million. We successively upgraded to a new ERP system at the end of Q1. To prepare for the migration, we released all invoices for payment, which created a temporary working capital need and was the key driver of the step-up in our revolver balance. Now, four weeks after we closed Q1, we have paid down our revolver by $13 million and expect to continue to reduce the balance as our working capital position further normalizes.

Tom: And in April we repurchased an additional 324000 shares at a cost of $10 5 million.

Tom: Turning to the balance sheet. We ended the first quarter with net debt of $66 5 million comprised of a debt balance of $85 5 million with cash and equivalents of $19 million.

Tom: We successfully upgraded to a new ERP system at the end of Q1 to prepare for the migration, we released all invoices for payment, which created a temporary working capital need and was the key driver of the step up in our revolver balance.

Tom: Now four weeks. After we closed Q1, we have paid down our revolver by $13 million and expect to continue to reduce the balance as our working capital position further normalizes.

Tom Hodick: Next, we provided an updated 2025 financial outlook today in our earnings release. Given our performance to date, we are raising our profit guidance. We now expect restaurant-level operating profit of $210 million to $219 million and adjusted EBITDA of $131 million to $140 million. We are also raising our expected share repurchase range by $5 million to $45 million to $55 million, given the higher expected operating profit. We continue to anticipate full year comparable restaurant sales in the 2-3% range and capital expenditures of $65 million to $75 million. Our updated guidance takes into account our current inflation expectations, including the potential impact from tariffs as understood today.

Tom: Next we provided an updated 2025 financial outlook today in our earnings release.

Tom: Given our performance to date, we are raising our profit guidance.

Tom: We now expect restaurant level operating profit of 210 million to $219 million and adjusted EBITDA of $131 million to $140 million.

Tom: We are also raising our expected share repurchase range by 5 million to $45 million to $55 million given the higher expected operating profit.

Tom: We continue to anticipate full year comparable restaurant sales in the 2% to 3% range and capital expenditures of $65 million to $75 million.

Our updated guidance takes into account, our current inflation expectations, including the potential impact from tariffs is understood today.

Tom Hodick: For context, approximately 85% of our food is sourced either domestically or from Mexico and Canada under the USMCA and exempt from any new tariffs. For the remaining 15% of our food basket, we expect only modest impact in Q2, but potential for extra food inflation in the 1% area in the second half, including certain beef and seafood items. Tariffs could also impact other costs, including small wares, to-go packaging, and equipment used for repair and maintenance, as well as building new restaurants. All in, the run rate impact could be about 30 bases point headwind to restaurant level margins starting later this year, assuming no change from current tariff policy or before any mitigating action.

Tom: For context, approximately 85% of our food is sourced either domestically or from Mexico, and Canada under the U S MCA and exempt from any new tariffs.

Tom: For the remaining 15% of our food basket, we expect only modest.

Tom: Impact in Q2, but potential for extra food inflation in the 1% area in the second half, including certain beef and seafood items.

Tom: Tariffs could also impact other costs, including small wares to go packaging and equipment used for repair and maintenance as well as building new restaurants.

Tom: All in the run rate impact could be about 30 basis point headwind to restaurant level margins. Starting later this year, assuming no change from current tariff policy or before any mitigating actions.

Tom Hodick: We have also preemptively purchased critical equipment to mitigate costs and ensure availability of these key items. We expect the tariff situation to remain fluid and we will continue to explore how to best position our business in a range of environments.

Tom: We are also preemptively purchase critical equipment to mitigate costs and ensure availability of these key items.

Tom: We expect the tariff situation remains fluid and we will continue to explore how to best position our business in a range of environments.

Tom Hodick: In closing, we are proud of our first quarter results and the strong foundation we are building for sustainable, profitable growth. We have a clear path to sales and profit growth ahead, and our long-term strategy and the strong consumer appeal for the BJ's brand position us well to continue building on our successes. With strong and improving cash flow, expanding margins, and a healthy balance sheet, we are well positioned to execute multiple initiatives aimed at enhancing shareholder value.

Tom: In closing we are proud of our first quarter results and the strong foundation. We are building for sustainable profitable growth, we have a clear path to sales and profit growth ahead, and our long term strategy and the strong consumer appeal for the Bj's brand position us well to continue building on our successes.

Tom: Strong and improving cash flow expanding margins and a healthy balance sheet, we are well positioned to execute multiple initiatives aimed at enhancing shareholder value.

Operator: Thank you for your time today, and we'll now open the call to your questions. 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 are using a speakerphone, please pick up your handset before pressing the key. To withdraw your question, please press star then 2.

Tom: Thank you for your time today, and we'll now open the call to your questions.

Tom: We will now begin the question and answer session to.

Tom: To ask a question you May press Star then one on your telephone keypad.

Tom: If you are using a speakerphone. Please pick up your handset before pressing the keys to withdraw your question. Please press Star then two.

Operator: At this time, we will pause momentarily to assemble our roster.

Tom: At this time, we will pause momentarily to assemble our roster.

Alex Slagle: The first question comes from Alex Slagle with Jeffreys, please go ahead. Thanks, congrats on the quarter, really good margin performance. The cost of goods and labor really stood out and I was thinking maybe you could help us frame up the magnitude of the impact from some of the incremental simplification and process changes you've taken. I'm just trying to get a sense for, you know, where restaurant level margins maybe would have been if these actions were in place for the full quarter, if they, you know, I imagine they were implemented over the course of the quarter, but maybe you could update us on that.

Speaker Change: The first question comes from Alex Slagle with Jefferies. Please go ahead.

Speaker Change: Thanks, Congrats on the quarter.

Speaker Change: Really good margin performance.

Speaker Change: Cost of goods and labor really stood out.

Speaker Change: Thinking maybe you could help us frame up the magnitude of the impact from some of the incremental simplification and process changes you've taken.

Speaker Change: I'm, just trying to get a sense for.

Speaker Change: Our restaurant level margins, maybe would have been if these actions were in place for the full quarter ethane.

Speaker Change: And they were implemented over the course of the quarter, but maybe you could update us on that.

Alex Slagle: see any opportunities to reinvest some of these savings back into the guest experiences as you look ahead.

Speaker Change: Do you see any opportunities to reinvest some of these savings back into the guest experiences as you look ahead.

Tom Hodick: Alex, thanks for the question. I'll say, I mean, with the 100 basis point margin improvement year over year, about half of that was leveraging sales, the extra traffic and sales that we drove. But yeah, then we saw some really great performance, really on the labor side. And I would say we finished 2024 strong. We had a strong finish to Q4 and really saw those benefits continuing into Q1. So, this really is, you know, it is building to a degree, but I would say that it was fairly consistent through the quarter. So, as we updated our guidance, it is expecting now a continuation of these levels.

Alex Slagle: Alex Thanks for the the.

Speaker Change: The question I'll say.

Speaker Change: With the 100 basis point margin improvement year over year about half of that was leveraging sales the extra the extra traffic and sales that we drove but yes. Then we saw some really great performance really on the labor side I would say we finished Q2 thousand 24 strong we had a strong finish to Q4.

Speaker Change: <unk>.

Speaker Change: All of those benefits continuing into Q1. So this really is it.

Speaker Change: It is building to a degree, but I would say that it was fairly consistent through the quarter. So as we updated our guidance is expecting now a continuation of of these levels when Lyle mentioned rolling out our.

Tom Hodick: When Lyle mentioned rolling out our, you know, using AI to both forecast and now schedule labor, that's really in a small subset of restaurants. So, any of that's incremental. So, yeah, I don't, you know, as I think of reinvesting in the business, I think we're taking a very balanced approach to getting efficiencies from the business, but we're also taking a fairly modest amount of price. So, we have a really nice balance right now of being able to drive traffic in with a great value message as well as delivering these profits. So, it feels like we're in a good balance here of investing in the business, but, you know, using that to drive traffic and still being able to deliver these margins.

Speaker Change: Our fourth using AI to both forecast and now schedule labor, that's really in a small subset of restaurants, so with any of that incremental so yes I don't.

Speaker Change: As I think of reinvesting in the business I think we're taking a very balanced approach to getting efficiencies from from the business, but we're also have taken a fairly modest amount of price. So we have a really nice balance right now of being able to drive traffic in with a great value message as well as delivering these profit. So it feels like we're in a good balance here of inverse.

Speaker Change: Being in the business, but using that to drive traffic and still being able to deliver these margins. So I don't foresee any any new investments there.

Tom Hodick: So, yeah, I don't foresee any new investments.

Lyle Tick: I also would just start, this is Lyle, I would add that, and I think I mentioned this on the last call, but what we're really trying to do is start initiatives that we can continue to build upon that become just kind of how we operate and help us be more efficient and more effective as we go forward. So, you know, simplification, those types of things are ongoing initiatives. I mentioned a little bit of the POS simplification. We have another round of that coming out actually shortly focused on modifiers for our appetizers and our handhelds. And just to give you an example there, as we look at that, we believe we can save our team members about 3 million clicks a year just through simplifying how we do modifiers on apps and handhelds.

Lyle: I also would just sorry. This is lyle I would add that and I think I mentioned this on the last call, but what we're really trying to do is is.

Speaker Change: <unk>.

Speaker Change: Initiatives that we can continue to build upon that become just kind of how we operate.

Speaker Change: And help us be more efficient and more effective as we go forward. So simplification those types of things are ongoing initiatives I mentioned, a little bit of the.

Speaker Change: The Pos simplification, we have another round of that coming out actually shortly.

Speaker Change: Focused on modifiers for our appetizers and our handhelds and just to give you. An example, there as.

Speaker Change: As we look at that we believe we can save our team members about 3 million clicks a year just through simplifying how we do modifiers on apps and handhelds and the result of that is more accuracy better guest experience and us being more efficient managing our comp food and beverage so.

Lyle Tick: And the result of that is more accuracy, better guest experience, and us being more efficient managing our comp food and beverage. So, you know, I was talking to our COO, Chris, the other day. He was talking to me about the results and said the thing that he's excited about and encouraged by is we're not forcing the results. We're building off of strategic initiatives. We're holding standards. We have growing tenure in our managers and we have clear focus. And so we're just kind of getting tighter and sharper as we go forward. And so I found that really encouraging.

Speaker Change: I was talking to our COO, Chris the other day.

Speaker Change: He was talking to me about the results and said the thing that he is excited about and encouraged by is we're not forcing the results. We're building off of strategic initiatives. We're holding standards. We are growing tenure in our managers and we have a clear focus and so we're just kind of getting tighter and sharper as we go forward.

Speaker Change: And so I found that really encouraging.

Alex Slagle: Good color. Thank you.

Speaker Change: Good color. Thank you.

Alex Slagle: And just a follow up question on the check and the mix component. Maybe you could just kind of talk about the dynamics behind that. You know, the traffic growth is great. I guess the mix is a little bit lighter. How you see that progressing through the year and any driver. Yeah, as you said, I mean, you're looking at both, you know, the pricing element, we're in, call it the mid-2% of pricing. So, you know, looking at the mix shift, we did, you know, launched our Pazookie Meal Deal, which is driving a lot of traffic. That's some of it.

Speaker Change: Follow up question on the check and the mixed component maybe you can just kind of talk about the dynamics behind that traffic growth is great. I guess the mix is a little bit lighter how you see that progressing through the year any drivers.

Speaker Change: Sure Yes.

Speaker Change: He said I mean looking at both.

Speaker Change: The pricing element.

Speaker Change: We are in call it the mid 2% of our pricing so looking at the mix shift we did.

Speaker Change: Launched represent the meal deal, which is driving a lot of traffic.

Tom Hodick: We also lapped this quarter, a very good launch last year and some new menu items. So we had that lap we were going up against. Also, just how spring breaks fell and how Easter fell, that weighed on mix a bit in Q1. So, looking forward, I would, you know, we're thinking that the check piece will be something closer to flat. It was a little more of a drag on comp in the first quarter, but, you know, a bit of things we're through. I think going forward, you know, we will still be pushing things like Pazookie Meal Deal.

Speaker Change: But some of it we also lapped this quarter.

Speaker Change: Very good launched last year, and some new menu items. So we had that lap we were going up against also just how spring breaks fell and how Easter fell that weighed on mix up a bit in Q1, so looking forward I would.

Speaker Change: Thinking that the check piece will be something closer to flat.

Speaker Change: It was a little more.

Speaker Change: Little more of a drag on comp in the first quarter, but a bit of things. We've we're through I think going forward.

Speaker Change: We will still be pushing things like physical meal deal. We are looking at ways to use that to build check to build on that promotion. So theres more to come that are check builders that are on top of this but I think that this moving forward I would expect to be something more flat and in terms of our our check component.

Tom Hodick: We are looking at ways to use that to build check, to build on that promotion. So there's more to come that are check builders that are on top of this. But, yeah, I think that this, moving forward, I would expect to be something more to flatten in terms of our checks. Helpful.

Speaker Change: Helpful. Thank you.

Brian Bittner: The next question is from Brian Bittner with Oppenheimer and Company. Please go ahead. Hi, thank you. Your Sainstore sales trends are just holding up really well. You talked about the plus 3% in March and then holding up into April. And obviously you guys are taking share, which is a big positive, but what's your hypothesis on why the casual dining customer seems to be holding up so much better than the quick service customer and the quick casual customer, which they're seeing much softer trends in that segment. How are you guys thinking about what's going on?

Speaker Change: The next question is from Brian Bittner with Oppenheimer <unk> Company. Please go ahead.

Brian Bittner: Hi, Thank you.

Brian Bittner: Your same store sales trends are just are holding up really well you talked about the plus 3% in March.

Brian Bittner: And then holding up into April and.

Brian Bittner: Obviously, you guys are taking share which is a big positive, but what's your hypothesis on why the.

Brian Bittner: The casual dining customers seems to be holding up so much better than.

Brian Bittner: The quick service customer and the quick casual customer, which youre seeing much softer trends in that segment.

Brian Bittner: How are you guys thinking about what's going on.

Lyle Tick: Hi, this is Lyle, you know, and I'm just polishing up my crystal ball. But the look, I mean, I can speak more to, I think, what we're seeing in the BJ's customer than I can more broadly, you know, than that. And I think there's a few things when I think about our performance. One is the BJ's customer tends to be a little higher income than the average. And so, and that's for both CDR and QSR. So, I think there's some resiliency there. I think overall, we continue to improve our execution and we have a strong value platform and craveable product news in stickers and, you know, the wing sauces.

Lyle: Hi, this is lyle.

Lyle: And I'm, just polishing up my Crystal ball.

Lyle: The answers but.

Lyle: Look I mean, I can speak more to.

Lyle: I think what we're seeing in the Bj's customer then I can more broadly than that.

Lyle: And I think there's a few things when I think about our performance. One is the bj's customer tends to be a little higher income than the average and so.

Lyle: That's for both <unk> and <unk>, So I think there's some resiliency there.

Lyle: Overall, we continue to improve our execution and we have a strong value platform and craveable product news in stickers and.

Lyle: The wing sources and I think all of that is reflected in our consumer scores that I mentioned earlier, so I think those things together.

Brad Richmond: And I think all of that is reflected in our consumer scores that I mentioned earlier. So, I think those things together, you know, are helping us hold up. I also believe that in times of uncertainty, and I think this will be true going forward, when consumers may have less transactions to give, they're really focusing on that experience being worth it. And I think our atmosphere service and food is compelling. And then I guess the last thing I would posit is that, you know, our recently completed brand work underlines that, you know, from a BJ's perspective, we over-index and win in these kind of everyday celebration and treat occasions.

Lyle: Are helping us holdup.

Lyle: I also believe that in times of uncertainty and I think this will be true going forward when consumers may have less transactions to give there.

Lyle: We're really focusing on that experience being worth it and I think our atmosphere service and food.

Lyle: Compelling in that regard.

Lyle: And then I guess the last thing I would posit is that our recently completed brand where underlying that from a bj's perspective, we over index and win in these kind of everyday celebration and treat occasion, so we call them social splitter educations theyre not the big celebrations, although we do well there too but.

Lyle Tick: So we call them social splurge occasions. They're not like the big celebrations, although we do well there too, but rather those kind of weekly moments when people, you know, plan for going out and they value those. And I think those occasions are pretty resilient, where I think some other occasions may be more transactional and easier to pass up. So that's kind of my perspective, obviously, through the lens of our consumer and our brand.

Lyle: Whether those kind of weekly moments when people.

Lyle: Plan for going out and they value that.

Lyle: I think those occasions are pretty resilient I think some other occasions, maybe more transactional and easier to pass up so.

Lyle: That's kind of my perspective, obviously through the lens of our consumer at all brands.

Brad Richmond: Yeah, this is rad. Yeah, just to add on to that is, you know, you've got to get beyond the conventional thinking, if you will, you know, particularly in the casual dining space. It's a very fragmented industry. It wasn't too long ago that the big change for more than half the establishments out there, meaning there's a good number of small independence or regional operators out there. Some do well, but a lot of them aren't doing particularly well. And, you know, Lyle touched on it, you know, the social splurge occasions, and I think more of occasions that we're after than the guests that we're after, and these occasions are very valued by the consumer right now.

Lyle: Yes.

Brad Richmond: Thanks, Brad.

Lyle: That is.

Speaker Change: Beyond the conventional thinking if you will particularly in the casual dining space. It's a very fragmented industry. It wasn't too long ago that the big change where more than half the establishment softer meaning there is a good number of small independence or regional operators out there.

Speaker Change: Do well, but a lot of them arent doing particularly well.

Speaker Change: <unk>.

Speaker Change: While touched on it.

Speaker Change: Social splurge occasions, I think more of occasions that were after then the guests that we're after and these occasions are.

Speaker Change: Our very valued by the consumer right now the retaining those fairly well and so the way we are operating.

Brad Richmond: They're retaining those fairly well. And so, you know, the way we're operating, you know, we continue to think, well, we will be taking share from some of the weaker players and the relevancy of our brand to what the consumer is looking for right now. So, you know, I think that gives us optimism as we look forward, and we're early in that journey.

Speaker Change: Continue to think we will be taking share from some of the weaker players and the relevancy of our brand to what the consumer is looking for right now so.

Speaker Change: I think that gives us optimism as we look forward and we're early in that journey, we have lost smart people in here with us working on this and understanding it and crafting what it means.

Brad Richmond: We've had a lot of smart people in here with us working on this and understanding it and crafting what it means, but we think we have a plan that is pretty durable for the foreseeable future.

Speaker Change: But we think we have a plan that is pretty durable for the foreseeable future.

Brian Bittner: Thanks. I appreciate both those perspectives. And just my follow-up is the margin performance, as Alex talked about in the previous question, very impressive. And I want to focus on the labor line, the operating leverage there that you got 100 basis points. But what stood out to me was also the per store labor costs when you break it down were actually down year over year. What's the biggest driver of that dynamic? And how sustainable are those impacts? Brian, yeah, it's, I would say, very sustainable. This truly is, I mean, it's a combined effort. If we look across the spectrum on labor, this is scheduling better.

Brian Bittner: Thanks, I appreciate both of those perspectives and just as my follow up is the margin performance as Alex talked about on the previous question very impressive and I'm going to focus on the labor line. The operating leverage there that you got 100 basis points, but what stood out to me was also the per store labor costs. When you break it down we were actually down.

Brian Bittner: Year over year with what's the biggest driver of that dynamic and how sustainable are those impacts.

Brian Bittner: Hi, Brian Yeah, It's I would say very sustainable. This truly is I mean, it's a combined effort. If we look across the spectrum on labor. This is scheduling better we looked at the restaurants that rescheduling the best an imperative uplift with other restaurants that had opportunities we really looked at where over time, we were spec.

Tom Hodick: We looked at the restaurants that were scheduling the best and paired them up with other restaurants that had opportunities. We really looked at where overtime, we were spending more there in certain restaurants than others and found ways to drive that down. And, you know, we're just, we have an increased focus on, from the traffic that we're getting in to get as much, to not take anything away from the guests, but just schedule as efficiently as possible. So it is, and Lyle talked about it too, in terms of the tenure of our team members is only growing and our retention rates are well ahead of where the industry is.

Brian Bittner: Adding more there than in certain restaurants, and others and found ways to drive that down and we're just we have an increased focus on from the traffic that we're getting into to get as much.

Brian Bittner: Not take anything away from the guests, but just schedule as efficiently as possible. So.

Brian Bittner: And <unk> talked about it too in terms of the.

The tenure of our team members is only growing and our retention rates are well ahead of where the industry is so it really is coming together nicely and as.

Tom Hodick: So it really is coming together nicely. And, you know, we love seeing that on the financial side, the check on the other side of the equation is to make sure our NPS, our net promoter scores are moving in the right direction. And the overall recommend score, is it multi-year highs, our value score, our food score, you know, things that if we were squeezing too hard and we were doing things that might be helping in the short term, but not the longer term, that would show up in our NPS scores and it's moving the other direction.

Brian Bittner: As we love seeing that and on the financial side the check on the other side of the equation is to make sure our NPS or net promoter scores are moving in the right direction.

Brian Bittner: Overall recommend score is at multi year highs our value score our food score.

Brian Bittner: There are things that if you if we were squeezing too hard and we were doing things that might be helping in the short term, but not the longer term.

Brian Bittner: That would show up in our NPS scores and it's moving the other direction. So it gives us a lot of faith to the second part of your question of how durable this isn't sustainable.

Tom Hodick: So it gives us a lot of faith to the second part of your question of how durable this is and sustainable. If anything, we're finding more opportunities to keep efficiencies here. We want to, you know, continue to leverage the sales that we're bringing in and we're seeing just that.

Brian Bittner: If anything we were finding more opportunities to keep efficiencies here, we want to.

Brian Bittner: Continue to leverage the sales that we're bringing in.

And we're seeing just that.

Brad Richmond: Hey, Brian, Brad, I'd just like to add on to this because it can easily get lost. We tried to highlight, when you look at how January is performing and then the steep drop off to February, you know, we're not immune to the weather and all those things, we did drop like many did. And then, you know, the delay in the refunds processing, and then it snapped right back when the weather cleared and they caught up on the processing refunds to the March levels. But I really appreciate what our operators were able, they were proactive, they were agile of managing through that dip, if you will, with really out giving, with not giving much up.

Brad Richmond: Hey, Brian Brad I'd, just like to add on to this because it can easily get lost and we tried to highlight when you look at how January is performing and then the steep drop off the February we're not immune to the weather and all the things we did drop like many did.

Brad Richmond: And then the delay in refunds processing and then it snapped right back when the weather cleared and caught up on the processing refunds to the March levels, but I really appreciate what our operators were able they were proactive they were agile of managing through that dip if you will.

Brad Richmond: What's really out giving with not giving much up.

Brad Richmond: And so I think it speaks to your operating philosophies and how the team is working together. There's gonna be speed bumps along the way here, we know that, but we really believe we're much better positioned to deal with those today.

Speaker Change: So I think it speaks to your operating philosophies and how the team is working together, there's going to be speed bumps along the way here, we know that but we really believe we're much better positioned to deal with those today.

Brad Richmond: Asked.

Brian Bittner: Great.

Brian Bittner: Thanks, Brad.

Speaker Change: Great. Thanks, Brad Thanks, Tom appreciate it.

Brian Bittner: Thanks, Tom.

Brian Bittner: Brian.

Jeffrey Bernstein: The next question is from Jeffrey Bernstein with Barclays. Please go ahead. Great. Thank you very much. First question is just on the macro and the value implication. I'm just wondering what you see in your data to showcase. more challenging macro at all. I mean, it sounds like you're not really seeing any change in consumer behavior. Let me think. Maybe it's in value. I don't know if you can share how you define value or what the mix of sales is. The Suzuki Meal Deal is one, but I think you mentioned your mix is probably down 3.5 points if I back out just the traffic and price.

Speaker Change: Thanks, Brian. The next question is from Jeffrey Bernstein with Barclays. Please go ahead.

Speaker Change: Yeah.

Speaker Change: Great. Thank you very much.

Speaker Change: First question is just on the <unk>.

Speaker Change: The macro and the value implication.

Speaker Change: Wondering what you see in your data to showcase more challenging macro at all I mean, it sounds like youre, not really seeing any change in consumer behavior.

Speaker Change: What led me to think maybe it's in value I didn't know if you can share how you define value or what's the mix of sales is.

Speaker Change: I presume the meal deal as one but I think you mentioned your mix is probably down three five points if I back out just the traffic and price. So just trying to get a sense for how you. How you would even kind of looking at your own data that youre seeing a more challenging macro and then I had one follow up.

Jeffrey Bernstein: Just trying to get a sense for how you would even tell looking at your own data that you're seeing a more challenged macro. And then I had one follow-up. Yeah, sure.

Lyle Tick: This is Lyle. I'll start and I'll – Tom will provide some color. You know, again, I go back to our consumer, so I'm talking relative to our consumer, but, you know, as I mentioned, we're seeing a little bit of increase in pickup in the – in the Pazuki meal deal, but that's more than, you know, offset by our traffic gains, and the thing I – we're seeing is we're seeing traffic gains that are quite similar on the weekday and the weekends. We're seeing traffic gains across all of our – Maybe a little higher traffic gains, actually, in some of the lower income cohorts who are taking advantage of the Pazuki meal deal, but net-net, the way that all comes together with the traffic and our operations, it's been overall really good results.

Speaker Change: Yeah sure so I'll.

Speaker Change: I'll I'll start now Tom.

Speaker Change: Tom will provide some color.

Speaker Change: Again, I go back to our consumers so.

Speaker Change: I am talking relative to our consumer but.

Speaker Change: As I mentioned, we're seeing a little bit of increase in pickup in the in the <unk> meal deal, but that's more than offset by our traffic gains and the thing. We're seeing is we're seeing traffic gains that are quite similar on a weekday and weekend, we're seeing traffic gains across.

Speaker Change: All of our cohorts, maybe little higher traffic gains actually in some of the lower income cohort two are.

Speaker Change: We are taking advantage of the <unk> meal deal, but net net the way that all comes together.

Speaker Change: With the traffic and our operations. It's been overall really good results in there really haven't been what I would call like flash point changes in any of those areas that say, we're seeing fundamental changes across across traffic in terms of weekday weekend day part.

Tom Hodick: And there really haven't been what I would call, like, flashpoint changes in any of those areas that say we're seeing fundamental changes across traffic in terms of weekday, weekend, day part, check management, or income. Yeah, and then Jeff, specifically around the mixed piece, yeah, like, to Lyle's point, there was no material shifts overall. If we think about more longer term, and we have seen some alcohol incidence decline that started last year and continues a little bit this year, but it's more of, you know, just on the fringes, really, as we look at, you know, this quarter specifically, we were lapping some higher checks.

Speaker Change: Check management or income cohorts.

Jeff: Yes, Jeff it's specifically around the mixed.

Speaker Change: Mixed piece, yes.

Speaker Change: Yes.

Speaker Change: It's allows point there was no material shifts overall is if we think about more longer term and we have seen some alcohol incidents.

Speaker Change: Decline that started last year and continues a little bit this year, but it's more of just on the fringe is really as we look at.

Speaker Change: This quarter, specifically, we were lapping some higher check so we anticipated it being a little heavier of a negative mix in the first quarter here.

Tom Hodick: So, we anticipated it being a little heavier of a negative mix in the first quarter here. The other piece, I mean, the Suzuki meal deal continues to be strong, so it is, it still was, it started strong in Q4, and it grew a little bit in terms of mix, but nothing dramatic, but there's just, you know, a few things like that, that, you know, on that net, it's driving traffic, it's driving sales. Manifesting a little differently through the build on sales there. Sometimes, you know, those guests, if they're coming in more at lunchtime, they're ordering less, so the check's a little lower.

Speaker Change: The other piece I mean zukin meal deal continues to be strong. So it is.

Speaker Change: It is still well it started strong in Q4 and it's it grew a little bit in terms of mix, but nothing dramatic but there was just a few things like that that yes.

Speaker Change: So net net it's driving traffic it's driving sales.

Speaker Change: Manifesting a little differently through the the build on sales there sometimes those get those guests that are coming in more at lunchtime, they're ordering less so the checks a little lower so it's a bit of a shift.

Lyle Tick: So it's a bit of a, you know, the contribution of the types of checks that are coming in as well. So, you know, back to your bigger question around the macro and value, you know, we were smart getting ahead and having this promotion that is very unique and distinctive to BJ's. It's something that's unique to us. It's a great value, and it is during Monday through Friday when we typically have capacity in our restaurants. So great to see our value scores where they are and be able to drive the traffic. And, you know, we're seeing some great flow through on it, net-net, so love what the promotion's doing.

Speaker Change: <unk>.

Speaker Change: The contribution of the types of checks that are coming in as well so back to your bigger question around.

Speaker Change: The macro and in value.

Speaker Change: I think we were smart getting ahead and having this promotion that is very unique and distinctive to bj's is something thats unique to us it's a great value and it is during Monday through Friday, when we typically have capacity in our restaurants, so great to see our value scores, where they are and be able to drive the traffic and we're seeing some great flow through on a net net.

Speaker Change: So love with the promotions doing looking forward, we are looking at ways to use this promotion too to drive some more check as well so more to come on that but yes.

Lyle Tick: Looking forward, we are looking at ways to use this promotion to drive some more check as well. So more to come on that, but yeah, really seeing it growing.

Speaker Change: Brian.

Jeffrey Bernstein: And then my follow-up is just on the...

Brian Bittner: Got it and then my follow up is just on the.

Speaker Change: <unk>.

Jeffrey Bernstein: Unigrowth Opportunity, you know, if I flashback five or ten years, this call was dominated by how quickly you can open up new stores and how you were, you know, pretty much only halfway to where you thought you could get to in terms of total number of units. And I feel like we're potentially embarking on that conversation once again over the next year. I'm just wondering, you know, your confidence that something could be opened up one unit. and perhaps that's it for this year. But should we expect an acceleration of openings next year? Is that integral to the thesis?

Speaker Change: Unit growth opportunity.

Speaker Change: Flashback five or 10 years. This call was dominated by how quickly you can open up new stores and how you were pretty much only halfway to where you thought you could get to in terms of total number of units I feel like we are.

Speaker Change: Embarking on that conversation once again over the next year I'm just wondering.

Speaker Change: Youre confidence it sounds like you opened up one unit this quarter and perhaps that's it for this year, but should.

Speaker Change: Should we expect an acceleration of openings next year is that integral to the thesis.

Jeffrey Bernstein: If you could snap your fingers, what do you think the right rate is? How is your team equipped to handle something like that? Could we expect a big snapback in unit growth? Or should we just assume it's more about fixing the existing and you're going to hold off for the next couple of years in terms of any major uptick?

Speaker Change: If you could snap your fingers like what do you think the right rate is like how does your team equipped to handle something like that could we expect a big snapback in unit growth or should we just assume it's more about fixing the existing and youre going to hold off for the next couple of years in terms of any major uptick. Thank you.

Brad Richmond: Thank you. Hey, Jeff. Brad here. We clearly see the opportunity here to grow our unit base. We have a lot of white space. We feel good about it. We've been slow to add those. We've done some reassessments. And we had to improve the box economics. And so we've made great progress on those. It's probably disappointing to us and a lot of other folks is the lead time these days from saying you want to be there to actually getting the doors open is, you know, 20, 22 months, pretty easy these days unless it's a conversion. But we're very optimistic about where we are and where we can go.

Brad Richmond: Hey, Jeff Brad here.

Brad Richmond: We clearly see the opportunity here to grow.

Brad Richmond: Unit base, we have a lot of white space, we feel good about it.

Brad Richmond: No.

Brad Richmond: <unk> been slow to add those we've done some reassessment.

Brad Richmond: And we had to prove the box economics, and so we made great progress on gross.

Brad Richmond: As probably disappointing to us and lot of other folks is the lead time. These days from saying you want to be there to actually getting the doors opened as you know.

Brad Richmond: 2022 months pretty easy these days unless it's a conversion.

Brad Richmond: But we're very optimistic about where we are and where we can go and we are out there now fairly aggressively looking for sites, but realistically.

Brad Richmond: And we are out there now fairly aggressively looking for sites. But realistically, we'll see that benefit not until the back half of 2026. And, you know, we'll post you along the way as we get more deals done. But we see that as one of the contributing factors to, you know, creating shareholder value. But we also see a lot of opportunity in the interim period here to improve the economics, further improve the economics of our box and to grow the AUVs. And we have fairly big facilities and there's still capacity we can utilize there.

Brad Richmond: We will see that benefit not into the back half of 2026, and we will.

Brad Richmond: Post you along the way as we get more deals done but.

Brad Richmond: We see that as one of the contributing factors to creating shareholder value.

Brad Richmond: But we also see a lot of opportunity in the interim period here to improve the economics further improve the economics of our box and to grow the Evs and we have fairly big facilities and there is still capacity we can utilize there.

Jeffrey Bernstein: Understood. Thank you.

Understood. Thank you.

Sharon Zackfia: The next question is from Sharon Zackfia with William Blair. Please go ahead. Hi, good afternoon. I wanted to follow up on the bazooki meal deal. It sounds like it's been a great customer acquisition tool for you, and I'm curious if you have kind of any data on what kind of customer might be coming in that you were maybe under penetrating before, and if you have any kind of repeat metrics on those customers once they come in. I mean, as we, hey, this is Lyle, as we've looked at our, as we've looked at our consumer data and, you know, we were looking at, are we seeing any sort of material, you know, mixed shifts?

Speaker Change: Thanks, Jeff. The next question is from Sharon Zackfia with William Blair. Please go ahead hi, good.

Sharon Zackfia: Good afternoon, I wanted to follow up on the Paducah meal deal. It sounds like it's been a great customer acquisition tool for you and I'm curious if you have kind of any data on what kind of customer might be coming in that you are maybe under penetrated before and if you have any kind of repeat metrics on that.

Speaker Change: Customers once they come in.

Speaker Change: I mean, as we hey, this is while as we've looked at our.

Speaker Change: As we look at our consumer data.

Speaker Change: We were looking at are we seeing any sort of material.

Lyle Tick: So, like, are we suddenly seeing, you know, over the course of the quarter, a big move into kind of mixed towards lower income, for example, which might say, you know, we're, we're, we're bringing in a new or a different consumer that might be more price-oriented. But again, we're really not seeing those major shifts. We're seeing across each of our income cohorts. We're seeing traffic growth. We're seeing growth on the weekday and the weekend. We are seeing a little bit more growth in, in some of the lower income cohorts during the week when you net it all out.

Speaker Change: Mix shifts so like are we suddenly seeing.

Speaker Change: Over the course of the quarter.

Speaker Change: Big move into kind of mix towards lower income for example, which might say.

Speaker Change: We're bringing in a new or a different consumer that might be more price oriented, but again, we're really not seeing those major shifts we're seeing across each of our income cohorts. We're seeing traffic growth, we're seeing growth on the weekday in the weekend, we are seeing a little.

Speaker Change: Bit more growth in some of the lower income cohorts during the week when you net it all out the shape of our income cohort mix really hasnt fundamentally changed and again, we're seeing traffic growth across all of those cohorts and seeing it during the week and on the weekend when the deal isn't.

Lyle Tick: The shape of our income cohort mix really hasn't fundamentally changed. And again, we're seeing traffic growth across all of those cohorts and seeing it during the week and on the weekend when the deal isn't, isn't offered.

Speaker Change: Isn't offered so.

Lyle Tick: So, you know, overall, we see new customers coming in, but I don't know that it's fundamentally changed or we've seen any sort of fundamental shift of who the BJ's customer is based on the stuff.

Speaker Change: Overall, we see new customers coming in but I don't know that its fundamentally changed where we've seen any sort of fundamental shift of who the bj's customer is based on the stuff we're doing.

Lyle Tick: that's helpful and then as you're starting to kick the tires on new sites for Is there anything kind of different in the kind of pads you'd look for or the regions you're looking at relative to where kind of the historical BJ's sweet spot would have been? You know, we're always looking at our current box for, you know, opportunities to improve the efficiencies, lower the cost, but also we're underway as we've done a lot of this work on, you know, the menu and the positioning of the brand to look at ways to more contemporize the box itself.

Speaker Change: Okay. That's helpful. And then as you are starting to kick the tires on new sites for 26 is there anything kind of different.

Speaker Change: <unk> kind of pad you'd look for are there regions youre looking at relative to where kind of the historical bj's sweet spot would have been.

Speaker Change: We're always looking at our current box for opportunities too.

Speaker Change: Improve the efficiencies lower the cost but also.

Speaker Change: Underway as we've done all this work on.

Speaker Change: The menu and.

Speaker Change: The positioning of the brand to look at ways to more contemporize. The box itself. So that work is underway.

Lyle Tick: So that work is underway. So don't know what that's going to yield. But the prototypical site that we have utilized in the past is probably what would be in the future. So no dramatic changes there. As we've talked about before, we will... We're going to focus more of our attention on existing markets where we already have brand awareness, we have supervisory abilities there, distribution and all those. They just make more sense from where we are in the growth phase. That's not to say everything is going to be there because we do need to get to these other sites.

Speaker Change: Don't know, what thats going to yield, but the prototypical site that we have utilized in the past.

Speaker Change: Probably what would be in the future so no dramatic changes there.

Speaker Change: As we've talked about before we will.

Speaker Change: Focus more of our attention on existing <unk>.

Speaker Change: Markets, where we already have brand awareness, we have supervisory abilities their distribution in all of those they just make more sense from where we are in the growth phase now. So I'd say everything is going to be there because we do need to get to these other sites, but we will have a more disciplined balance as we go forward.

Lyle Tick: But we'll have a more disciplined balance as we go forward. Yeah, this is Lyle. Just, you know, building upon that, I think, you know, probably bigger than the pad shift would be just kind of, as we think about sequencing out the priority of geographies over time. And so, as Brad said, we're focusing in on places where we have existing infrastructure, we have some existing brand awareness, and we have operations in place. So, when you think about it, what we've seen, Tracy, as an example, last year, as well as Cypress and Houston last year, as well as what just happened in Phoenix, is we don't really have any markets, including California, that are fully saturated as yet with our existing footprint.

Speaker Change: Yes. This is just building upon that I think.

Speaker Change: Yes, probably.

Brad Richmond: Bigger than the pad shifts would be just kind of as we think about sequencing out the priority of geographies over time and so as Brad said, we're focusing in on places, where we have existing infrastructure, we have some existing brand awareness.

Brad Richmond: And we have operations in place and when you when you think about it what we've seen Tracy as an example last year as well as Cypress in Houston last year as well as what is happening in Phoenix, We don't really have any markets, including California that are fully saturated as yet with our existing footprint and so.

Lyle Tick: And so, for us, as we think about filling in, it helps us on multi-unit management efficiency, it helps us on operational excellence, and it actually helps us with something that has come out loud and clear outside of California, which is we have a real brand awareness and consideration opportunity in our non-California markets. And, you know, we are not going to be carpet bombing marketing everywhere. We're using that very strategically. So, as we build out some of these markets, that also has the effect of helping us drive brand awareness and consideration in some of our existing markets where we have headroom.

Brad Richmond: <unk> for us as we think about filling in it helps us on multi unit management efficiency. It helps us on operational excellence and it actually helps us with something that has come out loud and clear outside of California, which is we have a real brand awareness and consideration opportunity in our non California markets and we are.

Not going to be carpet bombing marketing everywhere, we're using that very strategically.

Brad Richmond: So as we build out some of these markets that also has the effect of helping us drive brand awareness and consideration and some of our existing markets, where we have headroom.

Sharon Zackfia: Okay, thank you.

Brad Richmond: Okay. Thank you.

Brad Richmond: Okay.

Brian Mullan: The next question is from Brian Mullan with Piper Sandler, please go ahead. Thank you. I just wanted to ask about the pizza platform.

The next question is from Brian Mullan with Piper Sandler. Please go ahead.

Brian Mullan: Thank you.

Brian Mullan: Just wanted to ask about the pizza platform can you give us maybe a little bit of a history lesson here. How important is this is a brand, particularly in California, maybe worded it mixed back when when the brand was at its best and then just assuming you get the product right and you see that in test.

Lyle Tick: You know, Lyle, can you give us maybe a little bit of a history lesson here? You know, how important is this to the brand, particularly in California? Maybe where did it mix back when when the brand was at its best? And then, you know, just assuming you get the product right, and you see that in test, how are you going to communicate to that to your guests? And how impactful could this be, you know, to the business over time, if you get it working the way that Yeah, so, I mean, we're very excited about pizza.

Brian Mullan: How are you going to communicate to that to your guests and how impactful could this be.

Brian Mullan: So the business overtime, if you get it working the way that you envision.

Brian Mullan: Yeah, So I mean, we.

Brian Mullan: We're very excited about pizza.

Lyle Tick: Pizza is a core association with our brand. It is a strong association with our brand in California and outside, but it's our number one driver association in California. It's also our number one traffic driver in California. It's a traffic driver outside of California, but Pazuki is actually our number one traffic driver outside of California. Yeah, I'll let Tom potentially build on the exact mixed numbers of where we're coming from to where we are, but the interesting thing about the pizza when we look at it is what we find is it's really great for that group occasion, right, where we, I think, have really strong equity and over-index.

Brian Mullan: Pizza is a core association with our brand.

Speaker Change: <unk> is a strong association with our brand in California, and outside but it's our number one driver Association in California. It's also our number one traffic driver in California, It's a traffic driver outside of California, but <unk> is actually our number one traffic driver.

Brian Mullan: Outside of California.

Tom: I'll, let Tom.

Speaker Change: Potentially build on the exact mix numbers of where we're coming from to where we are but the interesting thing about the pizza when we look at it is.

Speaker Change: What we find is it's really great for that group occasion, right, where we I think have really strong equity and over index. The pizza actually provides a great value for feeding multiple people, but the really interesting thing about our pizza check is it looks a lot like our other checks because it has a lot more add ons.

Lyle Tick: The pizza actually provides a great value for feeding multiple people, but the really interesting thing about a pizza check is it looks a lot like our other checks because it has a lot more add-ons, so when somebody comes in and they get a pizza for a group, they're getting more drinks and appetizers and things like that than when people that are coming in for a specialty entree, so it tends to feel kind of a different and complementary occasion in need to other things on the menu, so we see it as a really great opportunity. Obviously, pizza also has really strong margins for us from a percentage perspective, and so as we look at getting that mixed back to where it needs to be, I think that overall would be a positive win for the business, but really excited about it because it's a core association and gives us that opportunity because of how core it is to drive a real re-energizing story, and to answer your question, once we do bring it to market, we're pretty choiceful about when we decide to go out and do external marketing.

Speaker Change: Somebody comes in and they get a pizza firstgroup theyre getting more drinks and appetizers and things like that then when people.

Speaker Change: That are coming in for a specialty entre so it tends to fill kind of a different and complementary occasion and need to other things on the menu. So so we see it as a really great opportunity. Obviously pizza is also a really strong margins for us from a percentage perspective.

Speaker Change: And so as we look at getting that mix back to where it needs to be.

Speaker Change: I think that overall would be a positive wind for the business but.

Speaker Change: But really excited about it because it's a core association and gives us that opportunity because of how core it is to drive a real re energizing story and to answer your question once we do bring it to market.

Speaker Change: We're pretty choice full about.

When we decided to go out and do external marketing, obviously, we will be doing trial at our restaurants will be building the merchandising, but this will be one of those stories that we will absolutely tail externally.

Tom Hodick: Obviously, we will be doing trial at our restaurants, we'll be building the merchandising, but this will be one of those stories that we will absolutely tell externally as we roll it out to all of our restaurants. And Brian, just for some of the stats here, so right now pizza's mixing in the, call it mid to high single digits. If you rewind far in history, before really our menu expansion happened, pizza was a much larger portion of the share, but as you can imagine, slow roast, other things added, it's naturally come down over time. But I think a good way to frame up the opportunity would be to look at our mix in a place like Southern California, where it's core, people grew up with it, we have a lot more usage of pizza.

Speaker Change: As we roll it out to all of our restaurants.

Speaker Change: And Brian just for some of the stats here. So right now pizza is mixing in the call it mid to high single digits.

Speaker Change: <unk> rewind far in history before really our menu expansion happened pizza was a much larger.

Speaker Change: A portion of the share, but as you can imagine slow roast other other things added.

Speaker Change: It's naturally come down over time, but I think a good way to frame up the opportunity would be to look at our mix in a place like southern California, where its core people grew up with it.

Speaker Change: We have a lot more usage of pizza are mixed there is almost double compared to some of the newer markets that we've entered into so we know when people try it we can develop some really good bands and especially with the new pizza that is it is a great product. So I think when we have the product ready we talk about it more it's just it's something that if you look at.

Lyle Tick: Our mix there is almost double compared to some of the newer markets that we've entered in. So we know when people try it, we can develop some really good fans, and especially with the new pizza, that is, it is a great product. So I think when we have the product ready, we talk about it more. It's just, it's something that if you look across the competition that nobody else can match, it's something that's core to us. And just, it's such a trend now with just good high quality pizzas that we think this has a lot of legs and we can drive a lot of traffic in core markets.

Speaker Change: Cross the competition that nobody else can match, its something thats core to us.

Speaker Change: Such on trend now with just good high quality pieces that we think this has a lot of legs that we can drive a lot of traffic.

Brad Richmond: But knowing that this is something that people eat across the country, so there's plenty of white space there to have this better product driving some serious traffic.

Speaker Change: Core markets, but knowing that this is something that people need across the country. So there's plenty of white space there too.

Speaker Change: To have this better product driving some serious traffic.

Brad Richmond: Hey, Brian, Brad here. You can tell we're pretty excited about this, so I'll pile on with the answer to here. You know, in my history, one thing that's really important is what occasions is the brand relevant for? And so can you expand that? We clearly see pizza as in that category. I mean, think about, you know, where can you get a high quality restaurant, high quality pizza in a set down full service dining experience? There aren't a lot of places, and to the degree that they are, they're more your mom and pops or regional places.

Speaker Change: Brian Brad here you can tell we're pretty excited about this one I'll hop off highway.

Speaker Change: Our answer to here.

Speaker Change: And my history, one thing that's really important is what occasions as the brand relevant for and so can you expand that we clearly see pizza as in that category I mean think about where can you get a high quality.

Speaker Change: High quality pizza and a shutdown full service dining experience there aren't a lot of places.

Speaker Change: Agree that the or is there more mom.

Speaker Change: Mom and Pops or regional places so we see this as another facet of this of growing <unk> over time, that's not going to happen right now and as Lyle mentioned ill take some promoting around that to do it but we're looking at these from multiple facets and we see this one.

Brad Richmond: So we see this as a, you know, another facet of this of growing AUVs over time. That's not going to happen right now, and as Lyle mentioned, it'll take some promoting around that to do it. But we're looking at these from multiple facets, and we see this one as a. meaningful linchpin along our journey here.

Speaker Change: Meaningful linchpin.

Speaker Change: While our journey here.

Brian Mullan: Great detail. Thank you, guys.

Speaker Change: Okay, great detail. Thank you guys.

Todd Brooks: The next question is from Todd Brooks with The Benchmark Company. Please go ahead. Hey, thanks for taking my questions wanted to lead off kind of following up on Sharon's question and drilling down on an infill strategy going forward for new units. If you think about Overall white space for the brand, you've always sized it kind of 400 plus, and that number has been there for a long time. But if we look at a pivot to an infill driven strategy and trying to get to scale on some of these non-Californian markets, have you sized what the infill unit opportunity is just so we can get our mind around, okay, with an infill strategy, we have x years worth of growth that we can kind of exploit higher return, higher awareness type of opening.

Todd Brooks: The next question is from Todd Brooks with Benchmark Company. Please go ahead.

Todd Brooks: Hey, Thanks for taking my questions wanted to lead off kind of following up on.

Speaker Change: <unk> question and drilling down on.

Speaker Change: Infill strategy going forward for new units, if you think about.

Speaker Change: Overall white space for the brand before we size the kind of 400, plus and that number has been there for a long time, but if we if we look at the pivot to an infill driven strategy and trying to get to <unk>.

On some of these non California markets have you sized with the infill unit opportunity is just so we can get our minds around okay with an infill strategy, we have X years worth of.

Speaker Change: Of growth that we can kind of exploit higher high.

Speaker Change: Higher return higher awareness type of openings.

Speaker Change: Yes.

Brad Richmond: Tom, I'll start with this one. I would say, I mean, as we talk about our near-term strategy is in the next couple of years, it will be focused on the infill. But looking out longer than that, I would say that the market expansion is part of that strategy. So we're not taking the expansion piece off the table. We're just saying at present where we can get the, when we're ramping up and building our pipeline, it's going to be more focused on infill now. But as we look forward, it will be both. So it's a good question to think through this, because we look at our markets and we look where our restaurants are and where we can build, and there's plenty of open space in every market that we operate in.

Speaker Change: Tom I'll start with this one I would say.

Speaker Change: As we talk about our near term strategy is in the next couple of years. It will be focused on the infill, but looking out longer than that I would say that the market expansion is part of that strategy. So we're not taking the.

Speaker Change: The expansion piece off the table, we're just saying it at present, where we can get the <unk>.

Speaker Change: When we're ramping up and building our pipeline, it's going to be more focused on infill now, but as we look forward it will be both so.

It's a good question to think through that because we look at our markets and we look where our restaurants are and where we can build and theres plenty of open space in every market that we operate in.

Brad Richmond: So there's plenty of white space for infill. And we love that because of everything that was mentioned before. But really, as we think about how portable the brand is, when we, everything Lyle just mentioned from California to Phoenix to Texas, where we've had some really great openings, it travels well. This is a brand, a brew house that, Midwest to East Coast to Florida to Home Basin, California, we've got some great restaurants out there and can put up some great sales and profits. So, yeah, we're not limiting ourselves to one versus the other. Just want to be clear that that was more on the near-term side will be the infill focus.

Speaker Change: So theres plenty of white space for infill and we love that because everything that was mentioned before but really as we think about how portable the brand is when we have.

Everything will I'll, just mentioned from California to Phoenix, The Texas, where we've had some really great openings.

Speaker Change: It travels well this is a brand that brewhouse that mid.

Speaker Change: Midwest East Coast.

Speaker Change: Florida home based in California, We've got some great restaurants out there and put up some great great sales and profit. So yes, we're not limiting ourselves to one versus the other.

Speaker Change: Wanted to be clear that that was just more of a in the near term side will be the.

Speaker Change: The infill focus yes, Tom let me.

Brad Richmond: Yeah, Tom, let me just, sorry, Todd, let me add a little more color to that is, yeah, we're going to get to those spaces, but each one of these is a pretty significant investment. And so we want to get it right. So we're going to go at the right time and at the right place. I think also to your ultimate unit potential is, and I've seen this over my career that you start with a number, but it tends to grow. If the brand is working right, the box model is working right, and the economics of that, you start improving it, it makes for more trade areas where you can economically be there and create shareholder value.

Speaker Change: Sorry, Todd let me add a little more color to that is yes, we're going to get to those spaces, but each one of these is a pretty significant investment and so we want to get it right. So we're going to go at the right time and at the right place I think also to your ultimate unit.

Speaker Change: Potential is and I've seen this over my career that you start with a number but it tends to grow if the brand is working right. The box model is working right and the economics of that you start improving it it makes for more trade areas, where you can economically be there and create shareholder value.

Brad Richmond: So we haven't revisited the number that we don't need to revisit that number right now. We have other things that we're working on, but I mean, it's not too far on the horizon. We'll have to figure that out, but there's so much white space right now that we can just go after what we have, but we'll do it more, I think, of a concentric circle around our existing hubs than more of a scatter deployment. We don't really see first mover advantage into going to some of these places. It's better to work from our existing strengths.

Speaker Change: So we haven't revisit the number that we don't need to revisit that number right now we have other things that we're working on but I mean, it's not too far on the horizon, we will have to figure that out but there's so much white space right now that we can just go after what we have but we'll do it more I think of a concentric circle around our existing hubs.

Speaker Change: Then more of a scatter.

Speaker Change: Deployment.

Speaker Change: We don't really see first mover advantage into going to some of these places it's better to work from our existing strengths.

Todd Brooks: Okay, fair enough. Thanks.

Speaker Change: Okay fair enough, thanks, and a quick follow up if I may.

Todd Brooks: And a quick follow up if I may. Tom, you mentioned kind of April same store sales running in the mid twos. Obviously, there was a real dislocation with the California restaurant consumer. starting kind of early April last year with the many price increases in the industry and that consumer just going on strike for a period of three to four months. I'm just wondering, as we look at what we're lapping as we progress through the quarter, do same-store sales comparisons get more difficult as the quarter progresses? Do they ease? Do they stay steady? I just want to make sure there's not any sort of nuance that we're missing as we're thinking about where you're running.

Speaker Change: Tom You mentioned kind of April same store sales running in the mid twos obviously.

Speaker Change: There was a real dislocation with the California restaurant consumer.

Speaker Change: Starting kind of early April last year with the menu price increases in the industry and that consumer just going on strike for a period of three to four months I'm. Just wondering as we look at what we're lapping as we progressed through the quarter to same store sales comparisons get more difficult as the quarter progresses do they did they eased do the same.

Speaker Change: Stay steady I, just want to make sure there's not any sort of nuance that we're missing as we're thinking about where you are running now.

Tom Hodick: question I looking at let me answer it two ways looking at regions in California is slightly above I mean this is really q1 and through April California was slightly above our average but nothing outsized so it really isn't driven by California having an easy lap or anything like that you know as we go into Q2 here. It really does, you know, when we look at one and two-year laps, we'll even look back to 2019 still just to triangulate internally. It's the first half of the year looks pretty normal. You know, we had the Easter lap that pushed, you know, a little from Q1 and Q2.

Speaker Change: It's a good question.

Speaker Change: Looking at let me ask to answer it two ways looking at regions.

California is slightly above I mean, this is really Q1 and through April, California was slightly above our average, but nothing outsized. So it really isn't driven by California, having an easy lap or anything like that.

Speaker Change: As we.

Speaker Change: Go into into Q2 here it really does.

Speaker Change: When we look at one and two year lastly will even look back to 2019 still just to triangulate internally.

Speaker Change: The first half of the year it looks pretty normal.

Speaker Change: We had the Easter lap that pushed a little from Q1 and Q2, but other than that it's a pretty clean lapse. So.

Tom Hodick: But other than that, it's a pretty clean lap. So, yeah, I wouldn't worry about it being a tougher lap as we go through this quarter or anything like that. Okay, thanks.

Speaker Change: <unk>.

Speaker Change: Wouldn't worry about it being a tougher lap as we go through this quarter or anything like that.

Speaker Change: Okay. Thanks.

John Tower: The next question comes from John Tower with Citigroup. Please go ahead. Great, thanks for taking the questions.

Speaker Change: The next question comes from Jon Tower with Citigroup. Please go ahead.

Jon Tower: Great. Thanks for taking the questions.

John Tower: Just, you know, Lyle, earlier in the conversation, you talked about the idea of doing some menu work and I think optimizing the menu offerings around the core pillars that you outlined, pizza, bouzouki, beverages, and some of the others. So I'm just curious if you could talk about what goes from the menu from here. Was there anything in the work that you, the consumer work you did that surprised you in terms of what you should be pulling off the menu? Um, you know, I don't know if it's it's surprising. I mean, doing the work is more from my perspective, in the past and this time as well, about gaining clarity, gaining alignment and gaining kind of shorty in the moves that you're making.

Speaker Change: While earlier in the conversation you talked about the idea of.

Speaker Change: Doing some menu work in.

Speaker Change: I think optimizing the menu offerings around the core pillars that you outlined pizza <unk> beverages, and some of the others. So I'm just curious if you could talk about what goes from the menu from here or was there anything in the work that you.

Speaker Change: The consumer work you did.

Prized you in terms of what you should be pulling off the menu.

Speaker Change:

Speaker Change: I don't know if its it's surprising I mean doing the work.

Speaker Change: Is more from my perspective.

Speaker Change: In the past and this time as well about.

Speaker Change: Gaining clarity gaining alignment and gaining.

Speaker Change: Surety and the moves that you're making so I think we look a lot like.

Lyle Tick: So I think we look a lot like you know, I think what a number of other restaurants look like, which is we've got a set of items that have a lot of our gross margin, and we have a long tail set of items that are a bigger percentage than they represent from a gross margin perspective. And so there identifies your long tail, and then that long tail really exists across categories. There are certain categories with a bigger long tail, and certain categories with a smaller long tail, but our goal is to kind of go category by category, so that kind of category management approach, looking at the long tail, and the outcome ultimately that we want is eliminating the long tail, improving remaining items. bringing some new items in to get to an ultimately smaller but more productive category.

Speaker Change: I think what a number of other restaurants look like which is we've got.

Speaker Change: A set of items that have a lot of our gross margin and we have a long tail set of items.

Speaker Change: That are a bigger percentage than they represent from a gross margin perspective and so.

Speaker Change: They're identifies your long tail and then that long tail really exists.

Speaker Change: Cross categories, there are certain categories with a bigger long tail in certain categories, where there's smaller long tail, but our goal is to kind of go category by category. So that kind of category management approach looking at the long tail and the outcome ultimately that we want.

Speaker Change: Is eliminating the long tail improving remaining items, bringing.

Speaker Change: Bringing some new items in to get to and ultimately smaller but more productive categories.

Lyle Tick: Giving you a specific example, as we look towards our next menu in June, we're actually taking our Pazuki platforms down by three. So, those were in our long tail. We are keeping a core set of five, and then we will have an opportunity to lean into some of these great stories that we have, like cinnamon roll or Snickers over time, and something may find its way in and out over time, but we'll ultimately have a smaller, more productive category, we think, that we can execute better and more consistently. And so, that's an example of one of the categories, but each of the categories we kind of look at that same way, and we're kind of going to take them one by one, and the idea is you test and scale, and right on the back of that, you're testing what you want to scale next, and you keep that evolution going forward.

Speaker Change: Giving you a specific example, as we look towards.

Speaker Change: Our next menu in June.

Speaker Change: Truly taking our <unk> platforms down by three.

Speaker Change: So those were in our long tail, we are keeping a core set of five and then we will have an opportunity to lean into some of these great stories that we have like cinnamon roll or snickers over time, and something may find its way in and out over time, but will ultimately have a smaller more.

Speaker Change: Reductive category, we think that we can execute better and more consistently and so that's an example of of one of the categories with each of the categories. We kind of look at that same way and we're kind of going to take them. One by one and the idea is you test and scale and right on the back of that you are testing what you want to scale next tenure.

Speaker Change: And you keep that evolution going forward.

John Tower: Got it, I appreciate that.

Speaker Change: Got it I appreciate that maybe just pivoting to the marketing piece, obviously, it looks like it's working well certainly on the social channels with <unk> I'm. Just curious how we should think about that spend going forward. It sounds like it's going to be much more regionally concentrated than broad based but then obviously youre leaning into social so maybe if you could help us think about.

Lyle Tick: Maybe just pivoting to the marketing piece, it obviously looks like it's working well, certainly on the social channels and with Suzuki. I'm just curious how we should think about that spend going forward. It sounds like it's going to be much more regionally concentrated than broad based, but then obviously you're leaning into social. So maybe if you could help us think about dollar spend going forward. And even, you know, do you plan on altering mediums at all as you progress throughout the year? Yeah, I mean, right now, I'm, there's nothing materially that's changing in terms of, we're raising the percentage that we're investing right now.

Speaker Change: Dollar spend going forward.

Speaker Change: And even do you plan on altering mediums at all.

Speaker Change: As you progress throughout the year.

Speaker Change: Yes, I mean right now.

Speaker Change: There is nothing materially that is changing in terms of.

Speaker Change: We're raising the percentage that we're investing right now.

Lyle Tick: I think we are still in the process from a marketing perspective of what I call codifying growth drivers. So you are right, we are focused geographically, we tend to be pretty surgical about the times we tend to focus less on broadcast media and more on narrow cast media. So, or targeted media. So, whether that is CTV, instead of broad broadcast TV, or digital channels, and then I am a believer that, you know, you need to keep your ear really close to social media these days. Not a lot of brands are actually creating trends, but the brands that do well are listening to what's going on and fanning the flames.

Speaker Change: I think we are still in the process from a marketing perspective of what I call codifying growth drivers. So you are right. We are focused geographically we tend to be pretty surgical about the times, we tend to focus less on broadcast media and more on narrow cast media. So.

Speaker Change: Or targeted media, so whether that is CTV instead of broad broadcast television or digital channels, and then I am a believer that.

Speaker Change: Need to keep your ear really close to social media these days.

Speaker Change: Not a lot of brands are actually creating trends, but the brands that do well or listening to what's going on in training in the flame zoom in.

Lyle Tick: So, I mean. You know, probably 9 out of 10 of those flames don't catch on, and one of them does, but you've got to be participating in order to do that. And so we're going to continue to do that. We're continuing to evaluate the media. If we codify growth drivers and we say, if we know if we put an extra dollar in here, we're going to get two back, then we'll consider that as we get to that point. But right now, we're not looking at materially changing the amount that we're investing. We're continuing to play with the mix, codify the growth drivers, get clear on the messages that are moving, and we'll kind of go from there and build from there.

Speaker Change: Probably nine out of 10 of those flames don't catch on and one of them does but you got to be participating in order to do that.

Speaker Change: So we're going to continue to do that we're continuing to evaluate the immediate if we codified growth drivers and we say if we know if we put an extra dollar and here we're going to get to back then we will consider that as we get to that point, but but right now we're not looking at materially changing the amount that we're investing we're continuing.

Speaker Change: To.

Speaker Change: To play with the mix codify the growth drivers get clear on the messages that are moving in and we'll kind of go from there and build from there.

Lyle Tick: Got it.

John Tower: And last one for me, just on the off-premise business center, you recently made some alterations to that business, so I was just wondering if you could kind of comment on how that performed during the first quarter and, you know, if you're seeing some of the changes that you made translate into better sales and consumer updates. Sure, John. Yeah, the off-premise business in particular, our third-party delivery, did trend a little bit better than the overall business. So we are seeing some bright spots there. I don't think that's equal across the industry, but as we're looking at how to best approach our third-party delivery business, I think we're seeing some really nice trends there.

Speaker Change: Got it and last one from me just on the off premise business Center. You recently made some alterations to that business. So I was just wondering if you could kind of comment on how that performed during the first quarter.

Speaker Change: If you are seeing some of the changes that you've made translate into better sales and consumer uptake.

John: Sure John.

John: The off premise business in particular third party delivery did trend a little bit better than the overall business. So we are seeing.

John: Some bright spots there I don't think thats equal across the industry, but yes, we're looking at how.

John: To best approach, our third party delivery business I think we're seeing some really nice trends there again, it's a little better than our overall company average so seeing a little extra growth coming from the off premise business generally, but really being driven by third party delivery.

Lyle Tick: Again, it's a little better than our overall company average, so seeing a little extra growth coming from the off-premise business generally, but really being driven by third-party delivery. And, you know, this is Lyle. Just to build upon that, you know, we actually haven't made any sort of major interventions in our off-premise business yet. Kind of, a lot of those things are kind of sequenced and will probably be later in this year into next year. I would say that, look, we have a material off-premise business. I think we have the right products to win in the off-premise business, and it's a growing business.

John: This is leila just to build upon that we actually havent made any sort of major interventions in our off premise business yet.

John: That's.

John: Kind of a lot of those things are kind of sequenced and will probably be later in this year into next year I would say that look we have a material off premise business I think we have the right products to win in the off premise business and it's a growing business and so all of those things are tick tick tick, but if I was going to be hard on us and I would evaluate.

Lyle Tick: And so all of those things are tick, tick, tick. But if I was going to be hard on us and I would evaluate our business, there's too much friction in the consumer experience right now, and our merchandising isn't optimized towards those items that are best for off-premise or towards the occasions for off-premise, whether I'm looking to feed myself, which is bigger in the off-premise than it is for us in the on-premise, or looking for a group occasion. So we're kind of, I kind of think we're at 1.0 of off-premise. I see a lot of opportunity there going forward, but a lot, you know, most of our energy so far has been focused on the core brand, getting really clear on the core brand strategy and strengthening that, and we'll kind of sequence the work on off-premise as we go forward.

John: Our business there is too much friction in the consumer experience right now in our merchandising is an optimized towards those items that are best for off premise or towards the occasions.

John: For off premise, whether I'm looking to feed myself, which is bigger than the off premise than it is for us.

John: In the on premise or looking for a group occasion, so we're kind of I.

John: I think we are at 1.0 of off premise I see a lot of opportunity there going forward, but.

John: Most of our energy so far has been focused on the core brand getting really clear on the core brand strategy and strengthening that.

John: And we'll kind of sequence to work off premise as we go forward, but the good news is it's growing and so that's.

Andrew Wolf: But the good news is it's growing, and so that gives us some headroom to tweak it in advance. Thank you.

John: That gives us some headroom to to tweak it an adventure.

John: Alright, thank you.

Andrew Wolf: The next question is from Andrew Wolf with C.L. King. Please go ahead. Well, yeah, thank you. I wanted to follow up on the promotional kind of cadence with regard to, you know, the same sort of sales coming in at one step. on 2-7-TRAF. It sounds like you didn't really increase your promotionality. Was that more to do with consumer behaviors, consumers naturally trending more to the value side of the menu, or was that more to some of the viral things that happened? on social media, attracting those kind of guests.

Speaker Change: The next question is from Andrew Wolf with C. L. King. Please go ahead.

Speaker Change: Yes. Thank you I wanted to follow up on the promotional cadence with regard to.

Speaker Change: The same store sales coming in at one seven.

Speaker Change: On <unk> traffic.

Speaker Change: It sounds like you didn't really increase your promotion Ality was that.

Speaker Change: More to do with consumer behaviors consumers naturally.

Speaker Change: Trending more to the value side of the menu where was that board as some of the viral things that happened on.

Speaker Change: On social media.

Speaker Change: Those kind of tracking those kind of gas.

Tom Hodick: Andrew, I think it's, you know, part of it, when you're thinking about Pazuki Meal Deal in particular, is just gaining momentum. It's something that people are coming and seeing and coming back for. So there's a natural boost that happens there. I would say, I mean, we did have some value cocktails earlier in the quarter that left off. So, I mean, there were some things that, in the quarter, that aren't currently in the mix, that I can think of that might be part of the question, too.

Speaker Change: Andrew I think it's part of it what are you thinking about particularly meal deal. In particular is just gaining momentum it's something that people are coming and seeing and coming back for so there is a natural.

Speaker Change: <unk> that happens there.

I would say I mean, we did have some some value cocktails earlier in the quarter that left off so I mean, there were some things that in the quarter that arent currently in the mix that are.

Speaker Change: That I can think of that might be part of the question too, but I think more than anything I mean, just thinking about the.

Lyle Tick: But I think more than anything, I mean, just thinking about the lapse in terms of Easter and spring break, you know, that also weighed on it.

Speaker Change: The labs in terms of Easter and spring break that also weighed on it so.

Lyle Tick: Yeah, and this is Lyle. I would just build on what Tom was referencing. The value cocktails are, you know, one example of, as we gain traction with Pazuki Meal Deal, and we have a value platform that is working, it gives us the opportunity to lean into those things that are working and take a harder eye on some discounting that may have creeped in along the way that maybe isn't as strategic or as effective for the brand. And so you look at something, there were these $6 value cocktails that found their way into the menu, and they weren't helping our drink program, let's just say, or our overall check.

Speaker Change: Yes. This is Leila I would just build on what Tom was referencing the value cocktails are.

Speaker Change: One example.

Speaker Change: As we gain traction with <unk> meal deal and we have a value platform that is working.

Speaker Change: Gives us the opportunity to lean into those things that are working and take a harder eye on some discounting that may have creeped in along the way.

Speaker Change: That maybe isn't as strategic or as effective for them.

Speaker Change: So you look at something there were these six dollar value cocktail that found their way into the menu.

Speaker Change: Werent, helping our drink program lets just say, so or our overall check and so.

Lyle Tick: And so, you know, we pulled those away.

Lyle Tick: I look at, you know, our loyalty program. When you signed up for our loyalty program, you used to get a free Pazuki that you could redeem right there. We've now made that you get the Pazuki, but you redeem that on your next visit. What we've seen is a little bit of a drop in signups on loyalty, but we've seen growing those loyalty members that we see two plus times in the first few months of being a loyalty member. So a higher quality loyalty member, and we're kind of looking across the areas where we have less strategic discounting to either manage depth, manage access, or eliminate where it makes sense.

Speaker Change: We pulled those away I look at our loyalty program. When you signed up for our loyalty program you used to get a free.

Speaker Change: Could redeem right. There we've now made that you get the <unk>, but you deem that on your next visit what we've seen is a little bit of a drop in sign ups on loyalty, but we've seen growing those loyalty members that we see two plus times in the first few months of being a loyalty member.

Speaker Change: So a higher quality loyalty member and we're kind of looking across the areas, where we have less strategic discounting to either manage depth manage access or eliminate where it makes sense.

Andrew Wolf: Got it. Thanks for that caller.

Speaker Change: Got it thanks for that color just a quick.

Andrew Wolf: Just a quick last question on the pizza improvement. Is the value change coming in, you know, taste or recipe or? process I think maybe changing how you cook it or is there also a size component I mean is there going to be a value like a value message Better, you know, better servings or calories. No, I mean, the size is the same, so that's not changing, but, you know, the pans we're cooking it in are changing, the dough itself has fundamentally changed, the sauce has, you know, moved to a fresh-packed tomato, extra virgin olive oil, kind of a more fresh modern sauce, the cheese has moved to 100% whole milk mozzarella, the pepperoni to a more modern, small, cupping and crisp pepperoni, which, by the way, we also had two different kinds of pepperoni and three preps on pepperoni, which will be eliminated when we bring that in, but we'll be upping the quality of the product, the sausage, so there's kind of across the entire thing.

Speaker Change: Last question on the Pizza improvement.

Speaker Change: Is the value change coming in.

Speaker Change: <unk> the recipe or.

Speaker Change: Process I think maybe changing how you cook it or is there also a size component name is there going to be a value like a value messaging.

Speaker Change: Better better servings of calories and so on.

Speaker Change: Yes.

Speaker Change: The size is the same.

Speaker Change: So that's not changing but.

Speaker Change: Japan's where cooking it in or changing the Doe itself has fundamentally changed the <unk>.

Speaker Change: <unk>.

Speaker Change: Move to a fresh pack tomato extra Virgin olive oil kind of a more fresh modern source. The cheese has moved to 100% whole milk mozzarella pepperidge.

Speaker Change: Pepperoni into a more modern small cutting and Chris pepperoni, which by the way. We also had two different kinds of pepperoni and three perhaps on pepperoni, which will be eliminated when we bring that in but we'll be upping the quality of the product. The sausage. So there is there is kind of across the entire thing theirs.

Lyle Tick: I think, you know, we're making improvements to that product. Got it. Okay, thank you. This concludes our question and answer session, and the conference has also now concluded. Thank you for attending today's presentation. You may now disconnect.

Speaker Change: I think we're making improvements to that product.

Speaker Change: Got it okay. Thank you.

Speaker Change: This concludes our question and answer session and the conference has also now concluded. Thank you for attending today's presentation. You may now disconnect.

Speaker Change: Okay.

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