BJ's Restaurants, Inc.

Good afternoon, and welcome to the BJ's Restaurant's fourth quarter 2025 earnings 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 Ronna Shermer, Director of SEC Reporting. Please go ahead.

Thank you, Operator. Good afternoon, everyone, and welcome to our Fiscal Year 2025 Fourth Quarter Investor Conference Call and Webcast. After the market closed today, we released our financial results for our fiscal 2025 fourth 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 guaranteed a 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 Todd Wilson, our Chief Financial Officer, after which we will take your questions. And with that, I will turn the call over to Lyle Tick. Lyle?

Good afternoon, everyone, and thank you for joining us today. Q4 was another strong quarter for BJ's, delivering our sixth consecutive quarter of sales and traffic growth, as well as our fifth consecutive quarter of profit and margin expansion. From a top line perspective, in Q4, we delivered 2.6% same store sales growth, driven by 4.5% in traffic growth. On the profit side, we delivered 16.1% restaurant level operating margins, and 10% adjusted EBITDA margins, representing an improvement of 70 and 40 basis points, respectively, year over year. Given the strong performance in Q4 2024, I'm particularly proud of how the team worked together to deliver a strong finish to 2025. Worth double-clicking on is the implied check compression between the comp sales and traffic in Q4. Our traffic momentum builds on the progress we have made throughout the year and underlines the continued improvements in operations, the resonance of the Pazuki meal deal, and BJ's relevancy in the holiday and social splurge occasion. Two additional drivers in Q4 beyond these foundational elements are the buzz around our LTO Pazukis, which brought in a hard-to-reach younger demographic and drove an increase in the number of what we call Pazuki trial checks. as well as our continued outperformance in late night. While both of these occasions carry a lower dollar check, they help us continue to introduce BJ's to new customers, give existing guests new reasons to come back, and sustainably grow sales and profit dollars. For the full year 2025, on the sales side, we ended at 2% same store sales growth, driven by 2.8% in traffic, And from a profit perspective, we landed at 15.5% restaurant-level operating margins and 9.6% adjusted EBITDA margins, representing an improvement of 110 and 100 basis points, respectively, year over year. As I've talked about previously, 2025 was a year of strengthening foundations and learning, guided by our four strategic priorities. We created alignment, understanding, and shared ownership of our strategy. We built trust, improved accountability, and showed resilience when encountering performance challenges. We added three strong new leadership team members who have integrated well and made a difference, with Jen Jaffe, our Chief People Officer, Tom Kowalski, our Chief Supply Chain Officer, and most recently, Todd Wilson, our Chief Financial Officer. We clarified our growth drivers and continued to refine how to leverage them most effectively. In Q4 specifically, the combination of better execution, value rooted in the Pizookie meal deal, and compelling product news driven by seasonally relevant Pizookies and the renovated pizza platform allowed us to continue to deliver strong traffic driven growth. We evolved our marketing strategy, leaning more heavily into social and word of mouth to support our product news, while leveraging broader paid channels to deliver value through the Pizookie meal deal messaging. further refining how we deploy media and message most effectively. Throughout Q4, consistent with 2025 overall, our key metrics continued to build confidence in our progress with improvements across our NPS scores, our team member retention, operational metrics, and frequency across age and income cohorts. Some key callouts with respect to Q4. On the team member experience side, we completed the rollout of our new manager and hourly team member training. On the menu front, we built on our seasonal pizookie momentum with two successful LTOs with the return of the monkey bread pizookie and the introduction of the Dubai chocolate pizookie, which also had an accompanying martini. We launched the renovated pizza platform, which is resonating well with guests and performing consistently with what we saw in test markets, with incidents up just under 10% and check-in margin in line with expectations. We ended 2025 with a net reduction of six menu items and four ingredient SKUs. From a brand perspective, our marketing teams continue to do a great job optimizing how we deploy our media and messaging. In Q4, we leaned more heavily into word of mouth and social, with relevant product news which drove significant dialogue, interest, and trial as reflected in our traffic numbers. Together, these launches generated a four times increase in Pizookie impressions quarter over quarter, outperforming what had previously been our strongest social performance with Spooky Pizookie in Q3. It also drove overall organic social impressions up 12 times year over year in Q4. On the operations front, We continued to lean into our core initiatives to drive everyday table stakes improvements and made further progress across our key guests and team member metrics. With NPS recommend scores up just under 10% in the fourth quarter, led by improvements in pace, value, and food scores. We deployed our AI-based activity-based labor model to 30% of the system at the year end and intend to deploy to the full system in 2026 and pilot a follow-on use case. With respect to keeping our atmosphere fresh, in 2025, we completed 19 remodels, bringing the total to just shy of 50% of our pre-2016 fleet as of year end. We also modernized our facilities program, tagging and tracking all of our equipment, moving from a more reactive to a more planful approach to ensuring that our team members have the tools they need to deliver on our high standards and we can put our best foot forward with our guests. As we enter 2026, we've continued to see positive momentum in the business. While calendar shifts and weather always create noise in Q1, I'm pleased with our performance so far in the quarter and our performance versus Black Box, which continues to outperform on both sales and traffic year-to-date. As I look ahead through 2026, I'm confident in our plans, and we remain focused on delivering consistent growth and improving shareholder value by putting the guest and team member at the center of everything we do. Our four strategic priorities remain unchanged. We will continue to focus on investing in our people, ensuring they have the tools and support needed to bring our brand to life every day. We will advance our operational excellence initiatives, focused on making BJ's better and easier for both team members and guests. We will progress our menu renovation work and set the foundation for future net unit growth. Our team members are the heart and soul of BJ's. In 2026, our key priorities with respect to the team member experience will be training, embedding the new manager and team member training, ensuring our teams have the right support to deliver for our guests. Leadership development, refreshing our high potential development programs as we continue to build restaurant and above restaurant management pipeline to support future growth and culture. continuing to build engagement and alignment around our values and behaviors. With respect to handcrafted food and beverage, we will progress our menu renovation work across our priority categories. We kicked off the year building on 2025 momentum with the Butterfinger Seasonal Pizookie, our first LTO pizza with Mike's Hot Honey, which quickly became our third most popular flavor out of nine, and a Korean sticky rib appetizer, leveraging an existing wing sauce and ribs to create an easy and craveable new option. We also removed two lower performing items that were heavy on single-use SKUs, which resulted in the removal of five single-use ingredient SKUs. As we move forward in 2026, our culinary priorities will be to continue to drive buzz and engagement with seasonal pizookies, and I'm excited about the pipeline we've built. Continue to renovate our core categories, refresh strong sellers with clear NPS and executional opportunities, and continue to find opportunities to simplify while maintaining and protecting the turf coverage that allows us to win across so many occasions and consumer groups. We're currently in market in the early stages of testing refreshes to our burger category and chicken sandwiches. Our culinary team has been hard at work, and we have a pipeline of category and core item improvement tests, that will follow suit. These refreshes are still in their early stages, and like we did with pizza, we will follow a structured approach to gain operational and guest feedback and make adjustments ahead of rollout. And also, like with pizza, I will provide further updates as appropriate. Our third priority is delivering WOW hospitality. Our focus in 2026 is to build off the foundations we've laid and continue to improve our guest satisfaction, throughput, and efficiency. We'll continue to focus on great fundamentals and not ceding conquered ground by continuing to drive accountability through our directors of operations and GMs, having clear and consistent KPIs, lifting up our outliers, and driving best practices. Our simplification team continues to work to remove unnecessary barriers and complications. Things like integrating Apple Pay into Pay at the Table, simplifying split check procedures for our team members, simplifying pizookie and cocktail ordering and ring-in processes, and so on. As mentioned previously, we'll continue to advance our technology initiatives to help our GMs and managers have the right people in the right place at the right time. 2026 is an important year for our fourth strategic pillar, keeping our atmosphere fresh. We're going to continue to invest in our remodel program, which has shown strong results, and pilot a refreshed BJ's prototype, setting the foundations to grow our restaurant portfolio. With the progress we're making on the core business, we're now laying the groundwork to reignite net unit growth. We're actively building a flexible pipeline as we target up to two new openings in the second half of 26 to pilot a refreshed prototype and set the foundation for further growth in 2027 and beyond. You will see this reflected in our capital allocation for 2026, which Todd will talk about in more detail. Before I close, I would like to once again express my thanks to all our BJ's team members from our restaurants through the support center for their passion and commitment. I'm proud of the progress we made in 2025 and excited about the road ahead. I will now turn it over to Todd to provide further color on how we close the year and our 2026 outlook.