So, we’re continuing to ensure we have that optionality on the menu. We’re not taking — we’re protecting, for example, Momma’s Pancake Breakfast, which is a phenomenal value at $8.99, pancakes, meat, eggs and all that. We didn’t raise the price to ensure that we were able to deliver high value, both at the breakfast table and of course, breakfast is available all day, but also we’re trying to do a better job of telling that story in our own media and marketing messaging. So, what you’ll see as we went through the quarter and now is more of our TV advertising, for example, highlighting both a strong price point, like $8.99 breakfast all day as well as great price points and variety at lunch and dinner. So, whether it’s chicken and dumplings or country fried steak or some of these other really great items.
But it’s a backdrop as competitors have gotten more promotional and more aggressive in their advertising. We are working hard to do an even better job of ensuring that we remind our guests of the value that we have every day, and I’m sure they don’t forget about that.
Todd Brooks: Great. And one more follow-up, and I’ll jump back in queue. So just when you talk about the elements on the menu that you look at as everyday value elements, if you look at this quarter versus the prior quarter, how is the sales mix of everyday value type of items changed quarter-over-quarter as the consumer has gotten a little bit more challenged? Thanks.
Craig Pommells: This is Craig. What we — what we’ve seen over the quarter is our breakfast business has done better than our lunch and dinner business. So overall, we’re seeing a higher mix of our breakfast items, the items that Sandy mentioned in particular. So, that’s primarily where we’re seeing the shift.
Operator: Our next question comes from Katherine Griffin with Bank of America. Please go ahead.
Katherine Griffin: I wanted to ask sort of a follow-up to an earlier question, just on decomposing the traffic trends. I’m curious, how much of the traffic in 4Q you think was lost to promotional intensity by competitors? And then, how much of it do you think could have been recaptured by taking a different marketing tactic? And then, sort of how should we think about that in the context of your 1Q expectations?
Craig Pommells: Hi Katherine, it’s Craig. So, we think a meaningful part of our traffic performance in the fourth quarter was really comprised of two things. One is we were really ramping down our messaging — our paid messaging in Q4, while competitors were ramping up. And as we noted, the environment was a bit more promotional. So, relative to our total traffic, we think it’s a significant part of that. I don’t know that we’re prepared to call out a specific number, but that is a shift that we saw in the environment that coincided with our shift in performance. So, we think there is a bit of a macro component. We think there is a competitive intensity component. We think we also were spending less at the time, others were spending more.
But we also believe we’ve got some ground to recover with our historical leadership role in hospitality. So, we think those are some of the biggest drivers that impacted over Q4. Some of that is pretty — some of that’s short term and some of that’s longer term.
Katherine Griffin: Okay. Thank you. And then maybe actually just following up on that. In terms of where you’re seeing promotional intensity, sort of where is that? Is it mostly in maybe your breakfast competitors or in varied menu? I guess, I’m trying to understand where the promotional intensity is just because there have been other casual dining concepts that have taken actually a different tact where they’re not discounting as much. So, I’m curious kind of what you’re seeing specifically in terms of which of your peers, maybe which dayparts you’re seeing more pressure on promotions?
Craig Pommells: We’ve seen — hi Katherine, it’s Craig again. We’ve seen that intensity across the — really across a number of different segments. We’ve seen it in family at breakfast, in particular. We’ve also seen it, especially in the bar and grill segment also. So, it’s relatively broad-based, certainly not with every competitor. But if you just look back at the last few months on advertised price points, there have been a lot of advertised price points. There have also been a lot of all-you-can-eat type of offers in the marketplace. And not only in family or in one particular segment, we’ve seen it really across the board, at family for breakfast; we’ve seen it the bar and grill; we’ve seen it in other areas also.
Operator: Our next question comes from Jake Bartlett with Truist Securities. Please go ahead.
Jake Bartlett: My first is on the margin guidance in the first quarter. And I just want to make sure I understood what might be kind of more of a temporary headwind versus ongoing? Maybe if you can kind of quantify how much higher marketing costs in the quarter will be pressuring margins — and a little more detail about how G&A is going to play in. I look at G&A, on an absolute basis, it’s down about 15% versus the third quarter. So, if you could help us understand what the right run rate on a quarterly basis just in the first quarter is, just those moving pieces in the first quarter margin guidance? Thank you.
Craig Pommells: Hi Jake, it’s Craig again. Yes. As it relates to the first quarter, there are, I guess, a couple of data points to think about there. If you kind of go back and look at our OI performance in the prior year, we had a lowest OI in Q1 and then it moved around a bit from there, improved significantly in Q2 and so on. I don’t anticipate that we’ll have a significantly different pattern of OI in fiscal ‘24. So that’s one data point. The other data point is in Q1, in G&A, in particular, we will have a higher level — a meaningfully higher level of spending for managers and training than we did in Q4. And we also have additional investments in other areas to support loyalty and so on. So quite a few moving pieces there, but we are investing more in Q1.
