Brinker International, Inc. (NYSE:EAT) Q4 2023 Earnings Call Transcript

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We’ll maintain that optionality if prices are available at that time, but not embedding the plan to have a lot of incremental price in the second half of the year. You’ll see the impact of price on a quarterly basis kind of decrease as we move through the fiscal year kind of starting most of this from carryover, and a little bit of incremental price we’re taking in our next menu. You’re going to see that move from the kind of high single digits down to the mid-single digits as you, as you work your way through the year on a quarterly basis.

Kevin Hochman: And then from a traffic standpoint, David. Here’s how we’re thinking about it. So if fiscal year ’23 was kind of a reset year, where we’re getting the investments in the right places, taking some pricing to buildup up some dollars to reinvest back into the business, getting out of unprofitable sales. I would characterize fiscal year’ 24 as, now we’re reinvesting in the business to grow traffic. And so, the biggest change – we talked about several of the traffic initiatives that we’re driving in ’24, the biggest one I think that would be important for you all of you to know is, going into the deep end on how much money we’re going to invest in advertising. So we’re going to move from four weeks of advertising last fiscal to 21 weeks, right?

Which is 17 more weeks and Joe kind of articulated in terms of dollar amount of $55 million to $60 million incremental. Why we feel very confident about that is that first four week blast that we did back in March, we saw the first compression of traffic versus the industry trends, even though we’re cycling through, getting out of those unprofitable sales and that unprofitable traffic, right? So we saw sequential improvement versus the industry. And so we’re very confident that that will continue throughout the year and then accelerate as we cycle out of the things that we’re doing to remove the bad traffic. So, there’s going to be two things happening through the fiscal, one is this influx of an additional $55 million to $60 million of TV spend, which we now has proven that will grow traffic and shrink that gap versus the industry.

And then the second piece will be as we start rolling off the things that we’ve been purposely doing to the business strategically, I think you’re going to see a sequential acceleration both in market share and in traffic trends.

David Palmer: That’s great. Thank you.

Operator: Your next question is coming from John Ivankoe with JPMorgan.

John Ivankoe: Hi, thank you. A question on advertising, especially as you bring it up. For you to be doing 21 weeks of advertising, obviously that’s not 40 or it’s not 52, and you are competing, especially on the QSR side, in the better performing QSR side, brands that really do dominate the airways in some cases of, you know with burgers and chicken, and we’ve talked about before, you have a lot of competition that’s growing very rapidly in the chicken category, particularly, kind of all around you, is there any sense or worry – listen, I understand ’24 is a different environment than what we had in ’19, but is there any fear or worry that just advertising is just going to be a cost of business going forward. In other words, as opposed to actually driving you a positive ROI kind of prevents you just from sales from declining. In other words, how do we see that it’s a positive as opposed to just avoiding a negative at this point?

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