Red Robin Gourmet Burgers, Inc. (NASDAQ:RRGB) Q2 2023 Earnings Call Transcript

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Todd Brooks: Okay. And then last one, I lied before. If you look at same-store sales trends and the outlook for the second half and you have to parse out the headwind that you’re up against from lapping the $10 promotion that ran in second half of last year. I guess, how do you measure the success with the operational initiatives? And if you look at the promotion, was it more impactful at launch? So it’s one of those things that had a bigger impact, let’s say, deeper into Q3. But then as you got to Q4, it wasn’t impactful as far as a mix standpoint or anything? Or was it a pretty steady impact across the year?

Todd Wilson: Todd, I’d say on the last piece there as it relates to the $10 meal deal, it was a pretty steady push through the second half of last year. And a lot of that activity predates many of us, but the company, frankly, pressed on that with spurts of marketing activity to really drive that message. And to your point, how do we measure it? We’ve benchmarked sales and traffic back to 2019, right? We look at sequential trends and try to parse all of that out. And we do — we see a clear improvement in traffic as a result of the promotion last year, somewhere in the 3%, 4%, 5% range is where we estimated that. But we also see just very significant discounting that I commented on in my prepared remarks. So through the back half of the year, both Q3 and Q4, discounts for the company last year were between 5% and 6% of sales.

We think this year is going to be closer to 3% to 4%. And that’s the flow-through or the contribution on that is obviously quite significant. So that’s part of how we’re thinking about this is getting back to that healthier, more profitable base that we talked about, there could be some traffic headwind as a result of that, but we think the move makes us a much stronger and healthier company, especially to G.J’s point, now that we know we’ve got great products, great experience, and we’re seeing guests tell us that in their comments to us.

G.J. Hart: Yes. And I think it’s important that we continue just to monitor the guest response and how they’re feeling about what we’re doing, how we’re doing it. and we’re doing a tremendous amount of work around sentiment and kind of what we’re seeing and how — and we’ll adjust accordingly. So right now, we’re feeling like we’re pretty close to it. And we’ll be able to share more of those data points as we get them.

Operator: There are no further questions in the queue. I’d like to hand it back to management for closing remarks.

G.J. Hart : Thank you all for joining us today. We are very, very pleased where we are at the first half of the year. Looking forward to the balance of 2023 and look forward to talking to you in a few months. Take care.

Operator: Ladies and gentlemen, this does conclude today’s teleconference. Thank you for your participation. You may disconnect your lines at this time, and have a wonderful day.

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