BJ's Restaurants, Inc.

Good day and welcome to VGO's Restaurant's third quarter 2025 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. After today's presentation, there will 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. I would now like to turn the conference over to Rana Sharma, Director of SEC Reporting. Please go ahead.

Thank you, Operator. Good afternoon, everyone, and welcome to our fiscal 2025 third quarter investor conference call and webcast. After the market closed today, we released our financial results for our fiscal 2025 third quarter. You can view the full text of our earnings release on our website at www.bjrestaurants.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 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. 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. We will start today's call with prepared remarks from Lyle Tick, our Chief Executive Officer and President. followed by Brad Richmond, one of our board directors. We also have Daniel Duran, our Senior Vice President of Strategy and Financial Planning and Analysis, on hand for questions, which we will take after our prepared remarks. And with that, I will turn the call over to Lyle Tick. Lyle?

Thank you, Ron. Good afternoon, everyone, and thank you for joining us today. I'm happy to report our fifth consecutive quarter of sales and traffic growth, as well as our fourth consecutive quarter of profit expansion. From a top line perspective, Q3 delivered 0.5% same-store sales growth, which included a slow start to the quarter, as we discussed on the last call, with the remainder of the quarter averaging roughly plus 1.5% comp growth for the final two months, which has accelerated into Q4. On the profit side, we delivered 12.5% restaurant-level operating margins and 6.4% EBITDA margins, representing an improvement of 80 and 70 basis points, respectively, year over year. We have now lapped the launch of the Pizookie Meal Deal, and I'm pleased with the positive year-on-year momentum in the business that closed Q3 and has continued into Q4. In the last six-plus weeks, our traffic is tracking at roughly plus 3.5% year-on-year, close to 9% on a two-year basis, and outperforming black box casual dining benchmarks again. Our current performance trends, combined with a strong product calendar for the rest of Q4, anchored in our pizza refresh launching next week and two exciting seasonal pizookies, gives us confidence to reiterate full-year top-line guidance of approximately 2%. As I reflect on my first year with BJs, I could not be more proud of the teams, and I remain very pleased with our progress to date and energized about what we can achieve going forward. 2025 has been a year of building the foundations of a stronger and more consistent BJs guided by our strategic priorities. We are better positioned today to leverage an incremental dollar of sales and win a return visit. And the improvement we're seeing across our guest, operational, and team member metrics give me confidence in the durability of the progress we're making. Our restaurants are operating more effectively and efficiently, focusing on being great at what we call the table stakes, and both our guest satisfaction scores and team member retention metrics are at multi-year highs. Our ongoing simplification efforts and focus on gross to net have resulted in sustained double-digit improvements in comped food and beverage incidents, improving the guest and team member experience, while removing over half a million unnecessary POS clicks for our team members and counting. Our outlier program and drive for accountability has improved overall effectiveness and efficiency as reflected in our restaurant level cash flow. We continue to build the Pazuki meal deal into an everyday value platform, resulting in continued improvements in our value scores in traffic. And we're beginning to see these improvements reflected with positive movement in our guest frequency metrics, as we now begin to roll out product and experience improvements with our pizza refresh next week. Speaking specifically to Q3, we further embedded our Pazuki meal deal as a core value platform our guests can count on, leaned into the power of social media and seasonal Pazukis to drive brand momentum, and continued the journey of improvement on table stakes operations. Our strong year-on-year momentum since the Pazuki meal deal lap began is can I believe be attributed to a combination of the foundational work I have talked about, as well as the continued refinement of our marketing strategies and tactics that are helping us codify how to most effectively drive the business. In Q3, we continued to shift our marketing focus towards social, influencer, and word of mouth. Given it's not our strategy to win a share of voice battle, our effort is increasingly focused on driving social dialogue and relevancy. I want to give a shout out to the marketing team for the great progress they're making. Our earned media impressions are up over 300% year-on-year. The Pizookie Meal Deal continues to resonate with guests, providing a great value and accessible everyday splurge opportunity, driving increased traffic, recruiting new guests, and driving frequency with existing ones. We leaned into our All-American Smashburger as a new feature on the Pizookie Meal Deal and garnered over 2 billion impressions on National Cheeseburger Day alone. On September 17th, we also rolled our latest menu update, and the spooky pizookie has been a social phenomenon. Again, the team has taken a more proactive approach to social and influencer engagement, driving a 350% increase in overall engagement and doubling overall impressions year over year, further codifying the role of seasonal pizookies as both a buzz and traffic driver. In addition to the traction of the spooky pizookie, our other menu optimizations are resonating with our guests. The 22 ounce beer pour offering is seeing about a 23% pickup rate and helping to improve checks with beer attached. And the brew house sampler is a top three appetizer resonating with guests while driving a premium trade up. In Q3 and through October, our growth has continued to be traffic driven with broadly flat to slightly down average check. Underlying this performance is an increase in frequency that is more than making up for any check compression. Double-clicking on check, there are three factors at play. Primarily, it's the increased traffic and number of checks driven by the growth of the Pazuki meal deal, which has continued into Q4. Additionally, the outsized growth we continue to see in late night, which carries a lower check, and continued pressure on alcohol beverage attachment are also contributing factors. On the margin side, our operators continue to do an excellent job making progress on the foundations of great operations and hospitality. Despite some choppiness in sales early in the quarter, they delivered another strong quarter of restaurant margin expansion by continuing to focus on the fundamentals. I want to thank all our teams from the restaurants through to the support center for the continued energy, passion, and commitment they show every day. As I look ahead through the rest of the year and into 2026, we remain focused on continuing to make progress across our four strategic priorities, and I'm excited about what is yet to come. Starting with the team member experience. Our team members are the heart and soul of BJ's. Our job is to make things easier and better for them and the guests, and the rest follows suit. I come into this call having just hosted our GM conference in Dallas two weeks ago, and the excitement and engagement was energizing and infectious. We spent three days together building alignment and ownership of our brand strategy, learning together and sharing best practices. We rolled out our new company values, which were informed by our engagement survey, co-developed by a cross-functional team, and will guide us in how we deliver on our brand promise every day. Our people and training teams led learning sessions that empower our directors of operations and general managers to bring these values back to their restaurants and bring them to life across the system. Maybe most importantly, we began the rollout of a comprehensive refresh to our manager and team member training, that will be fully implemented across the system in Q1, 2026. This new training establishes one best way for BJs while also empowering general managers and team members to deliver WOW hospitality. I think what resonated most with this training was it was created in partnership with our operations, people, and training teams, and was authored by people who came up through the restaurants. With respect to handcrafted food and beverage, we continue to progress development across our priority categories, identify areas for simplification, and are now on the cusp of launching our first major renovation. On November 6th, we'll be introducing the Refresh Pizza platform across the system. The entire BJ system is locked and loaded and can't wait to share the new product with our guests. Our team members love the product, and as Chris Pinsack, our Chief Operating Officer, and our senior operation leaders remind me, That is the foundation of creating excitement with our guests. We will ramp up the pizza refresh through the end of the year and through Q1, introducing our first LTO pizza product in over five years in Q1, continuing to drive engagement and excitement. We also have two exciting seasonal pizookies launching in November, with the monkey bread pizookie coming back after much prodding from fans on social media, and a Dubai chocolate pizookie and dessert martini taking advantage of this current pandemic. trending flavor. As we head into 2026, our culinary priorities will be to continue to renovate our core categories, to refresh strong sellers with clear NPS and executional opportunities, and to continue work on simplification. In 2025, we have had net reduction in menu items of six, and in the January menu update, we will be removing two more items, eliminating five additional single-use SKUs, And then additional simplification will be primarily connected to the category refresh work throughout 2026. Our third priority is delivering WOW hospitality. Our focus in 2026 is to build off the foundations we have laid and continue to improve guest satisfaction, throughput, and efficiency. We will continue to focus on great fundamentals and not ceding conquered ground by continuing to drive accountability through our directors of operations and general managers focused on lifting up our outliers and sharing best practices. As I mentioned earlier in our team member section, the new manager and hourly training is driving a one-best-way approach to the system, ensuring we're all pulling in the same direction and can deliver a consistent BJ's experience to our guests. Our simplification team continues to work day in and day out to remove unnecessary barriers, and this will be a continued process. Finally, we will advance our technology initiatives to help ensure we have the right people in the right place at the right time with our AI-driven activity-based labor model. This will be rolled out to 30% of our system by the start of 2026, and we're beginning to lay the groundwork for future use cases. In 2026, we will also continue to invest in our remodel program, which consistently has shown strong results, and pilot a refreshed BJ's prototype setting the foundations to grow our restaurant portfolio in support of our fourth strategic pillar, keeping our atmosphere fresh. In 2025, we will complete 20 remodels, bringing the total to 72 over the past three years, impacting 50% of our pre-2016 fleet and are pleased with the value-accreted results we continue to see. In 2026, we will continue the program in refining our 2026 remodel targets now. With the progress we're making on the core business, we're now laying the groundwork of reigniting new unit growth and have signed two leases with a number of deals in late stage development. We're actively building a flexible pipeline as we target up to two new openings in the second half of 26 to pilot the refreshed prototype and set the foundations for further growth in 2027 and beyond. As we drive towards a strong finish to 2025, We've made great progress in building the foundations of a stronger and more consistent BGs, and now we're on the cusp of beginning to introduce product and experience improvements. I will wrap by reiterating what I believe are the three key themes coming out of Q3 and looking ahead. The first is continued progress. Q3 marks our fifth consecutive quarter of sales and traffic growth, along with our fourth consecutive quarter of profit expansion. The second is stronger foundations. All of our financial, consumer, and team member metrics continue to indicate that we're building a stronger and more durable BJ's. We're better positioned today to leverage an incremental dollar of sales and win a return visit. And the third is momentum. Since the laugh of the Pazuki meal deal, we have seen increasing momentum and strong traffic-driven growth year on year. This momentum, combined with the strong product lineup through the end of the year, with the pizza refresh and two seasonal Pazuki's, gives us confidence in maintaining strong performance. Before I turn it over to Brad to take us through more detail on our Q3 financial performance and outlook, I'm excited to share that we have finalized an agreement with our next CFO who brings deep restaurant industry experience and will be starting at BJ's in mid-December. You can expect more details and a public announcement next week. Given that, I also wanted to take a moment to thank Brad and the entire board for their continued support, partnership, and guidance. It has and will continue to provide great value to me and the entire management team. Brad?