First Watch Restaurant Group, Inc.

Q4 2022 Earnings Conference Call


spk_0: that morning and welcome to the first watch restaurant group fourth quarter two thousand and twenty two conference call all participants will be a lesson only mode should you need assistance please ignore conference specialists by professor starkey followed by zero after today's presentation there will be an opportunity to ask questions to ask a question is a star was on your telephone keypad to withdraw your question has started to note this the first being recorded i would sell it to try the office over tuesday's marotta vice president of investor relations please go ahead
spk_1: good morning everyone and welcome i'm doing here today by first one to shoot executive officer in president was tomatoes in chief financial officer no hope this morning first watched issues it's earnings release the the fourth quarter inches for your twenties when you into on globe newswire and filed a annual report on for with the as he says he got enough can be found and investors doctors watched dot com and because you have good manners the board addition chris is not comfort problem move forward looking statements that a subject to various risks and uncertainties that could cause the company's actual results to differ materially from the same it's such famous include allegations concerning the conditions of the company's industry and it's operations performance and financial conditions growth strategies and future adventures any such damon should be considered in conjunction cautionary statements in the company's earnings release and the risk factor disclosure in our filings with the agencies including our annual report on formed and k there's of no obligation to update is forward looking statements weather is result of new information you to development or otherwise except as may be required by law lastly measures remorse name include references to various non got measures including restaurant level operating profit restaurant of operating profit margins just leave a dog in adjusted ebitda margin investors should review the reconciliation of is not get measures to the comparative gap results contained in the company's earnings release filed this morning and was that was just turn it over to chris
spk_2: they thief
spk_3: good morning
spk_1: twenty twenty two was another cell year for first lot to starts we continue to outperform the industry in a number of key areas perhaps most significantly in same restaurant sales growth of fourteen point five percent versus twenty twenty one and twenty nine point six percent when compared to two thousand and nineteen importantly the with led by seven point seven percent same restaurant traffic growth versus twenty twenty one and six point five percent when compared to two thousand and nineteen did the my sales increased twenty one point nine percent year over year going to nine hundred and fourteen point eight million dollars and seven hundred and fifty point seven million dollars from seven hundred fifty point seven million dollars total revenues increased twenty one point five percent year over year and adjusted ebitda increased four point five percent all of our growth metrics or even more noteworthy when you consider that they were achieve a a challenging macro environment and during the year when the industry as a whole experience year over year same restaurant rapid decline of three percent affording a black box
spk_4: to ask strong traffic share represent the truth measure of consumer appeal and the overall health of the contest
spk_1: and the pioneer of the daytime dining segments are consistent year over year traffic growth is yet another indication that consumers recognized the highly differentiate offering at first watch provides and to continue continued growing awareness of our brand it it further evidence that our strategy that driving our desired results and gives us great confidence in our ability to achieve our long term growth target
spk_4: i'm especially proud of what our teams accomplices our development from delivering forty three any restaurant openings and twenty twenty two or twenty nine company on restaurants opened and twenty twenty two are achieving generalized a these that are about seven percent above our classroom a the of two million dollars and well above their projected first year sale targets
spk_1: more notably sees restaurants across all geography appear to be building off of those lines as they continue to mature what most exciting to us that we're seeing volumes higher than we ever experienced before prior to twenty twenty two our weekly sales record was just shy of seventy thousand dollars
spk_4: with that in mind i like to share about a new restaurant that we open in november in virginia
spk_1: it had week one sales of just under seventy five thousand dollars over the next few weeks the team their went on to break that record three more times culminating at more than one hundred and ten thousand dollars in sales in it's stiff week of operation year to date this new restaurant has a weekly sales average of nearly ninety thousand dollars well above the company's previous weekly sales record since this record setting openings we've seen others in our twenty twenty two vintage break that seventy five thousand dollar weekly sales were sold as well he did higher sales are not an anomaly are strong strongly restaurant from twenty twenty two are still trending well above our country babies and their high volumes appear to be city
spk_4: we believe that one of the exception of one of these exception restaurant from march twenty twenty two vintage will be our first four million dollar restaurants achieving four million dollars in sales in one seven and a half hour daily shift will be an amazing accomplishment for sure
spk_1: considering the tonbridge consistent traffic in sales growth coupled with exceptional performance of our new restaurants it becomes abundantly clear that our biggest opportunity at a company now and for the foreseeable future is to serve more consumer led to mass death our entire organization itself is die it's an enviable position to be and we don't take for granted our team has worked diligently over many years to put us in his position by evolving the brand to ensure relevance broadening our appeal and meeting the consumers ever changing needs we've driven hire a these by unlocking tremendous upside potential in our restaurants do some key initiatives that are walking free today admittedly these efforts are necessarily shiny and sexy and none of them have to do and robots chat tpp technology but they are transformational nonetheless and are designed to minimize or eliminate the looking lead phenomenon that's when customers arrive at a restaurant to find a busy dining room and like the way time and make a decision to go elsewhere this is the unfulfilled demanded our doorsteps that represents an outsized opportunity for us to continue to push our long term sales and traffic growth to new heights in twenty twenty three we are focused on five primary strategic initiatives both run a house and back a house that are helping to serve as demand first are evolving real a strategy or opening more restaurants to serve more demands investing in a site and a growing number of larger standalone unit and often taking over second gen generation locations from close casual and fast casual concepts that a failed to of off the larger footprints of these new locations or one factor in our jody to generate higher volumes while maintaining for improving or returns on invested capital capital we also see little to no cannibalization even when in feeling for market and in a rare instances when we have seen cannibalization this has been strategically plants as a means to serve excess demand and underwritten in our new restaurant perform second back to how fast as enhancements and kitchen equipment upgrades were installing double make lands and many of our kitchen to simultaneously a comedy both often volumes and peak hours in the dining room we're investing in double dishwashers and lot of reynolds and a lot more pancakes or sandwiches to cook at the same time and were in the early phases of leveraging energy efficient smart of and that ensure a faster and more consistent of times every time third arcadia systems are katie or kids this late systems are caveats we completed are allowed to all of our company on restaurants ahead of schedule at the end of twenty twenty two and we continue to optimize the system katie as is a critical piece and driving higher throughput and more importantly in setting us up to scale so our goal of twenty two hundred domestic locations
spk_5: for a role specialization
spk_1: we're testing a more specialized approach to simply job functions particularly in the back of the house we're leveraging physicians such as a dedicated expert a role and a dedicated beverage position to allow us to free up more time from our servers in the front of house we've been pleased to see that in the restaurant testing this specialization has allowed our servers deserve more table and right elements elevated customer satisfaction best optimizing the dining room experience for both customers and employees from the customers perspective statham to life by leveraging technology to alleviate pain points using what we call or for and a house management system which builds upon our way the system
spk_4: similar to the way we do katie as as the heart of our kittens this is a heart of our for house up to thirty percent of our weekend traffic flow through our weightless management system showcasing the magnitude of the man on the t days this system allows us to track consumer behavior in our down here it's allowing us to focus on increasing see utilization tabletop and reducing way that abandonment and frankly serving more demands
spk_1: and not only that he finishes allowed to more efficiently served the growing demand for are offering they help produce food way to ensure our teams have the tools they need to deliver a fantastic customer experience in every first watched every time in twenty twenty two weeks serve more customers than ever before and yes er wait times were actually shorter than in the prior year and our customers as taxes scores held strong above industry average twenty twenty three march or forty year and business and a forty year old brand as an assassin stuff as a girl contests without a dedication to evolution our success meeting evolving consumer preferences and adapting to an ever changing marketplace field my belief that first watches just getting started we know that our success rest on the strength of each first watch employ throughout the system and we've done much to strengthen our position as an employee of choice just last week we announced several exciting enhances to our benefits including extended parental leave and programs that focus on mental health and wellbeing i've never been more excited to be far this organization we're all working together towards serving more demand and specifically towards serving the person who's already seeking a south we're not paying to acquire the from our customer they're knocking on door we're prepared to deliver another year from behind some of the best operators in the business first watch other plans and were sixty two with and now like to turn to call over the melts review the fourth quarter in greater detail mouth thanks chris
spk_6: i'm gonna start that focusing on our fourth quarter performance and expanding on the operational results that we announced on january the nice as we shared then same restaurant sales growth and the for with seven point seven percent total revenues were one hundred ninety five point seven million which is in the increase of fourteen point two percent over the fourth quarter of twenty twenty one as we indicated during our november seventh earnings call the fourth porter got off to a slow start as for attain even temporarily closed at eighty five of our restaurants
spk_1: through the middle of the quarter traffic take backed up by some lingering impact for the hurricane however during the last week of the quarter both winter storm alias and a holiday shift negatively impacted our traffic in almost all our market
spk_6: we estimate that this combination of the nets reduced our traffic find out two hundred and ten basis points or roughly three point one million of restaurants sales
spk_1: our food beverage costs were twenty three point seven percent of sales in the fourth quarter we continue to experience inflation of about seven point seven percent across our marcus asking where are taught fire commodities are eggs potatoes coffees avocados and stations which comprise not thirty five percent of the bass
spk_7: it
spk_1: given that eggs has been a hot topic
spk_6: we believe itself will add a little bit more color about how we address our exes like we understand that the industry production is projected to approach full recovery around the middle of this year as in the prior year where again purchasing our eggs and potatoes under a fixed price agreement these annual pricing agreements serve the company well not secure and supply and protecting us from the most severe volatility of the stock market they also get us reliable line of sight on our fast associated with east and commodities was together make up about fifteen percent of our food costs labour another related expenses were thirty four point five percent sales in the fourth folder up from thirty three point three percent in the third quarter and thirty two point eight himself in the fourth quarter of twenty twenty one the increase year over year
spk_1: was in part due to our oh inflation and eleven point or percent and the in fact a certain inefficiencies and our reaction to the chop chop the fourth quarter traffic
spk_6: in january twenty twenty three we upgraded some of our labor dashboard and improve our processes around labor management thus far for a first for her labor as a percent of sales has been sending soderling
spk_1: a restaurant level operating profit was thirty point five million for the quarter with a margin and sixteen point seven percent
spk_6: in the quarter we believe our sixty five non current restaurants that about three hundred and sixty days as points as potential margin improvements improvements to reach the similar performance that are three hundred and one hundred restaurants which are obviously or most of the to or units i want to call out free opening costs specifically which were one point eight million in the fourth quarter and five point four million for all it's twenty twenty two our korea opening rent alone and free state hundred and thirty three thousand dollars year over year as we deliberately negotiated with landlords to enter units earlier and work alongside the developers contractors to bring about our earliest opening date possible earlier accept that er physicians as not only to meet our development schedule that also place or new restaurants on the path to realizing more mature margins sooner in the following year adjusted a bit on the fourth quarter was fifteen point one million with a margin of eight point one percent we believe we have about one point two million and unrealized adjusted either die due to the impacts of the f or mentioned storms and the holidays yes general administrative expenses was twenty one point eight million down from the fourth quarter last year when we infer to stock compensation expenses five point three million of the time that the idea ideas
spk_1: we open sixteen new restaurants doing with during the quarter to eleven of which were company and and five of which were open bar franchise partners
spk_6: our net income and fluids cost of about four hundred thousand and in skirt in connection with our shelf registration fall on november the south
spk_1: i'm not going to spend time fighting listeners back through the full year results that are in our earnings released and in our ten k that i would reiterate crysis comments
spk_6: that our teams overcame a challenging economic climate to deliver another remarkable year of garage at first watch and frankly i cannot see more proud of them given my earlier statements that the fourth quarter with softer than expected due to several significant to death i want to share a few things about love are experiencing in the first quarter of twenty twenty three which ends on march twenty six the holiday calendar she yes i mentioned earlier that negatively impacted our fourth quarter in turn benefit as early in the first floor and we broke out of the gate fast
spk_1: the beginning of the quarter was also positively impacted by are laughing as a young on various last year
spk_6: through the second period of the first quarter or same restaurant sales and traffic restless fifteen point seven percent and eight point five percent respectively i'd like to remind you that in march and twenty twenty two we began rolling much stronger cars and as such the correct month poses a formidable same restaurant sales comparison early in the quarter we rolled over the three point nine percent price and freeze we took in january twenty twenty two and during the fifth week and a quarter we took a four point one percent increase averaging those for the first quarter we have six point nine percent increase prices was we opened six system wide restaurant thus far in the water and timely has a reminder and just to keep things interesting twenty twenty thirty years of fifty three weeks to school year for us our fourth quarter will be a fourteen weeks quarter in the expects the in fact is that extra holiday week to be roughly ten point five million in sales and two point five million and adjusted either die our for your outlook is as follows
spk_8: we expect same restaurant sales growth at sixty eight percent and twenty twenty three bills on part of traffic rest of the year
spk_6: we expect total revenue rose in the range assisting to nineteen percent and adjusted eat as on a range of seventy six to eighty one million both of these numbers include the third week we expect commodity inflation of four to six percent an hour early labour inflation of nine to eleven percent we expect it open between thirty eight and forty two company owned restaurants and ten to twelve franchise and restaurants and we expect these openings to the white and more heavily in the back half of the year similar to our cadence in twenty twenty two we also plans is closed three company owned restaurants resulting in a total of forty five fifteen ones net new system wide restaurant and twenty twenty three given the increasing case of new restaurant openings we expect capital expenditures between a hundred and one hundred and ten million dollars in addition to the increase in the number of projects and of which we will be investing this year we're also continuing to invest and sites with more square footage indoor outdoor bars larger have patios and expanded sack of house equipment to accommodate a higher sales volumes we have seen an increase in the expected to build out fast or new restaurants which now average one point four million net of tentative friedman allowances on a for restaurant basis we expect sales in these restaurants to average two and a half million in their third year of operation with restaurant level operating profit margin in the range and eighteen to twenty percent just delivered a plan stash on cash return about thirty five percent in that third year
spk_1: we've updated the unit economic the years in the investment investor information that we as quarterly on our industry relations website
spk_6: we expect our blended tax rates to be thirty six to thirty eight percent and twenty twenty three aaron and while we don't guide afford early results are they want to take a moment to share some of our planning considerations they're gonna influence the growth trend and i was just to be that died during twenty twenty three while just over half of are adjusted either side road is allocated in the first half of the year the first quarter will represent less of that allocation given the three weeks' gap between the pricing actions as well as the formidable march comparison that i mentioned earlier similarly and in the third quarter i planned raft of those three opening expenses and dna and us men may cause adjusted ebitda during that order to be roughly equal to the same period a year ago finally i'd also like to reiterate the company's long term annual financial targets which has not changed these inflated for soon his unit growth and the low double digits
spk_1: annual same restaurant sales growth and about three point five percent restaurant salesman adjusted even da personal growth in the mid teens
spk_6: for further detail in the fourth quarter or the fiscal year please visit our supplemental materials that on our investor relations website
spk_0: as if times on and ask the operator to as in the line for your questions
spk_9: abstract question
spk_10: draft
spk_11: i asked
spk_12: spot on
spk_0: austin start at this time currently
spk_13: at our first question
spk_14: rs ah
spk_15: i had to guess
spk_16: the morning and are the morning of on us to do the mama's just i'm on the high saying of as it rolls out of year with like are expecting arms
spk_6: you're not gonna four year twenty three so historically
spk_14: we've visited price in the middle of the year and and or and in the first quarter of we don't really announced when will as you know what our pricing plans are for the year until after week after we had it rolled off and names on digging in our little bit more to the three hundred sixty based as point gap between your non pounds and comp unit on restaurant on the margin that are that wide and you know from three que
spk_6: is that a number of case given the ramp often growth been other things that looks like it's peaking and and bought squeaking you know we can see a little think last rag on those nonfarm stores as we move forward
spk_16: i think him nice kennedy and than immediate future andy that we should expect to see some some kind of similar to that
spk_6: those restaurants just as a reminder think what we talked about before and as fast as that those restaurants are also cannot over indexing on the margin because they're extremely high volumes that there is so so there's more dollars with says that on of average for their sixty five nonsense restaurant and as long as we're continuing to earn in his see that sort of outperformance as a top line i think we may continue to see as long as we're always with with were trying to grow and that in in about ten percent
spk_16: level every year on a relative days says i think that spread and the maturity is is
spk_14: you know that that represents are opportunities as i don't know that we're going to close the oh now that we're going to close the gap too much as long as we keep pace with openings
spk_17: in and just finally there's there's a lot of that i imagined show up and labor and
spk_16: i assume some of that is intentional can you not get out of these restaurants off to the great start specter seeing and earth obviously i'm get yeah she spotted out a little bit worse yeah we we we we're we run higher labor and as restaurants has resulted
spk_7: in a new avenues we as
spk_0: do it we have more with food waste rights as a says
spk_18: as said he has that that and smell of it is too far as well that that you're right for them as far as and business biggest and fast as around the and around here and heavier labor and as restaurant
spk_19: thanks check our class go ahead hi good morning that this product conference yeah thanks for taking the question
spk_20: appreciate the top and bottom line guardrail you guys have provided for twenty twenty three but i just one of it's high time restaurant margins and and white guy is embedded in your died and
spk_6: and then maybe just with on a longer term outlook like what is a minimum threshold out you know that you're willing to draw the line if but if you don't they already were challenge going forward inflation remain more for stuff that an expected like what earth what are some of that the levers you can follow the time of our enough protect both margins one additional pricing may be willing to take over time ah and unless i get in a normal year for and cause whatever that mean what what level are pricing would be needed to keep restaurant margin last year over year
spk_21: so
spk_6: his earth lot in that one's single questions but this is the as it it historically the company's targeted that eighteen to twenty percent range and restaurant little operating profit
spk_21: and and our our our budgets are generally built around and students get it reaching that kind of performance
spk_7: not only in the can't move that growing into that with our non congress that are newer
spk_6: if it's at it's guess that and that detail and then you know if i'd i'd think in terms of pricing to offset inflation which is
spk_22: in a week we tend to in we tend to trying to send the margins
spk_19: the will take a look at that in the middle of the year
spk_23: again at least if necessary
spk_24: that that right now built into our guidance is flatly things is in a sufficient
spk_25: as division assumptions about rising
spk_8: added free hit that
spk_6: i'll call outs
spk_26: thanks
spk_21: now i briefly mentioned nine eleven percent labour inflation for this year
spk_6: that seems high in only heard from other restaurant company does that they increase primarily related to wages and so is the company trying to catch up to kind of the market level wages
spk_8: no waves i mean as our particularly around our hourly employees dress
spk_27: our alley and full is already
spk_21: make more than me and than linear and regulatory minimum wages
spk_25: exhibit that we do operate in states where like toward our colorado arizona where the
spk_8: where the regulated minimum wage is gonna be
spk_28: go nuts i said auctions
spk_0: each of the next give years including you said i think that's where you seen as with i wage inflation
spk_29: okay nice ladies i he said labor and when q is trending favorably i was hoping you could clarify whether you're training below the first quarter last year or so if we should be thinking about that comment more on us to quintile basis from the last from the fourth quarter yes i was i was more thinking of it's sequentially
spk_1: okay
spk_4: great thanks yes next question
spk_1: your child
spk_4: our great thanks recognizes that a thirty the morning the chris how to get an update on alcohol and i know that it was something that you are planning to brought all the stores that are kids could i have it audiences year
spk_29: i'm going to i'm just curious if you're able to achieve that how many stores it is not so your now that yeah basically can be running with all the stores that carry a liquor license you what was the plan twenty twenty three to market based and bring awareness to yeah to offer alcohol your economic nice thirty nine years i guess the don't serve alcohol yeah happy to buy up all any time of day and axes a thirty in the morning is the best time for out and ourselves
spk_20: yeah it's in about eighty five percent of our restaurants now which is up slightly from two three
spk_6: and at the end of two for that's where was it still you know it's is sitting around six point one percent a mix in the restaurants a salad and and
spk_30: we are team's been working hard on on the innovation behind that in instance happens nothing to announce yeah pledged it's a focus for us as we said all along once we get it rolled out
spk_31: the systems in the restaurant that we can see that will start to innovate the i think you'll start to see something eric in this a later part of this year
spk_29: rate and in not melon to yield after each other color on eggs on you're curious how is that fixed costs contract place for and you're totally get that the expectations that you'll see normalized and prices you know the year i guess from wondering that is their peers were on contract give where you can citizens volatility like prices of with a full how to get to and on my price range
spk_30: clothes and
spk_6: our eggs and potatoes or contract for all of twenty twenty three so we've we entered we entered issue with same kind of contract of the last year that to not fixed price sansa and and because of a fixed price aspects i don't expect a lot of old everything's without
spk_17: question
spk_29: gregory
spk_25: hi
spk_32: go ahead
spk_1: hey yeah thanks thanks for the question might my first the be clarification how much disappeared and it's tougher in march we think about what you guys are are are baking and do
spk_33: and stuff up in comparison
spk_4: how's how much of that wealth never know if there was apparently a lot of there was a lot of the spring break and revenge for ending last year we think first of it's just so as i don't actually know what the amount of as it that
spk_33: of of my or that in any of that we don't write downs months with and voters too much that it's is but it was of enough to the have ceased and break
spk_29: experience to people enjoyed last year
spk_34: it does take that just dumb as you look at development for this year
spk_35: valley
spk_6: a lot of your competitors and had a copper time binding sites and equipment and and and dealing with permitting and you that open up briefly with what you're seeing on those
spk_1: on those francis and what may be different than the industry
spk_6: yeah i mean it's it's an absolute strength for us and that's why words were leading into it and wise we did was you know smell talked about where we we took control of the sites earlier basically took control of the of the situations that as we're facing anybody who is building anything this past year and to control of the of space to control the timeline south if i were you ever the states tight with our development schedule
spk_35: a why would feel confident in our in our development schedule for this year to the know it's is elevated from last year and even though it's it's and you know back loaded into the into the second half of the year as merely a function of of the the pipeline rebuilding our from kobe itself
spk_29: yeah we are able to execute at a backloaded development schedule and twenty twenty two and we we believe will be able to do at really well and and now i just give them open the gates and as a high volume that we're talking about his performing as well as they happen
spk_6: got out thanks to admit just the last one on tax and is a pretty big step up and this year i'm dumb elegant and they're going to be project me gonna thousand size as and any help those great at a lion's share his new restaurant opens on the
spk_5: you know that that the number of projects that will open issues and grace but moreover in order to meet what we expect to be
spk_36: the same sort of long term growth ambitions that least let's set forth for next year will will already be spending into more projects that will open and twenty twenty four so as we get to the back half of the year in order to continue to accelerate were seen a lot of acceleration in the in the in the pace of
spk_16: irish catholics investment words and we were happy to do is to this but part of this part of the earth
spk_6: pleasure of working for a growth brands you know we're we're we're growing fast and and doesn't allow the dollars school great returns
spk_37: both and banks guess cricket
spk_6: i stay
spk_25: a car
spk_38: hat
spk_39: a great thanks and a good morning at they should take taken my questions and responded and circle back on the quarter to date shrank that you've seen and and given the elmo crime lab said that cause a lot of variability i was was hoping you get help us tease out how you view underlying trends could you could you comment on sort of the either the three year
spk_6: from the year on year your kind of jan and sad or maybe than average weekly sales just to sort of cheese that out of it has been evident that the months here
spk_40: i'm
spk_8: i don't have anything on that three year in front of me
spk_6: what we do know is that as and least relative to the industry
spk_29: for casual diners to as the full service of were you know that that our friends
spk_25: our continuing with us where the relative outperformance
spk_6: versus those categories and and i'm thinking about we use black box data like a think a lot of you guys do and our fears news at is pretty much followed that kind of friends
spk_8: but with our
spk_41: typical outperformance versus the categories
spk_39: okay okay that that's helpful and and pricing i just wanted to make sure our notes were correct on that i think he said you took the four point one percent as you lasts three point nine effectively since that mean you'll be sorted in that eight percent range assuming you take no additional until you get in
spk_42: said july
spk_43: it is that of that sort of your next most significant laugh for the local oh he said was that for the fourth quarter last average price was about six point nine percent so we took when we rolled of off the three point nine that we took in the first quarter she's me the first full week
spk_44: of twenty twenty two and then we in the fifth week of this year we took four point one percent of
spk_4: or the average for the glitters six point nine it in that quarter to date period as the six nine as it is that correct for the for the fourth quarter we'll it'll be it'll averaged that six point nine percent of i'm sorry oh okay okay okay i'll circle back on that and then just last one for me i'm on commodity inflation eat
spk_33: cost of running out by i think forty six percent as your expectation is that relatively stable through the year or perhaps there's some difference in from the year on year inflation worth noting first half per second half thanks very much
spk_4: and i'm going to speculate a little bit that as i think we're seeing a slow though it's still is still growing i mean we're paying more
spk_16: now than we did for the same items last year
spk_45: that i think it's just growing at a slower
spk_33: and a slower pace and as things that we would have to see that continues as of late as we get to do the growth patterns
spk_46: okay thank you i'll pass along
spk_1: toy america
spk_43: anti semites an average cat as clinton signed anchored in your next has impacted our added get a volume and like material in higher
spk_45: that some color you can dance on the fuck
spk_1: print therapist are not a compact that part of propelled and costs going out of that and thing differences in the park and in r r r camera camera i'm pam i can understand to what extent this is about optimizing the footprint of the restaurant or things are different market and person now thats on a related note
spk_4: confirm it sounds like you doesn't violent the actual transaction a profit by are much higher income has a ton of points on the money out of funding and make sure i understand it's not just get most that after fine with not the one is not too
spk_29: yeah i'm on a new restaurants there as it's a some of our hearts as we get the bigger footprints of the more prominence patios all those those just five fantasy t initiative that i talked about as many of those getting implemented into the new restaurant as possible the feed restaurants are high profile again work
spk_1: where a forty year old for polio of of restaurants out as as the real states i selection process as evolve as our are as our operations process improvement has evolved other things come to play in the new restaurant so really were building a restaurant to accommodate the demand
spk_47: we're seeing as there and that's led us to larger restaurants and and some of these other actually beat up to my dining rooms or the dedicated to go pick up area things like that south
spk_0: all of it to meet it's did it really is there's no one silver bullet is all those things combined hundreds to drive in i and
spk_29: by and then and tightest just in terms of that clarifying it is it's transaction are shattered presumably there's and as opposed to track that's different said that the method a partner often oh come on plans look pretty similar on the whole yeah it's it's very similar their there and similar price years as as other restaurants and in their markets
spk_48: really how to do with vizier
spk_49: hours
spk_6: and and frankly busy or peak hours south
spk_50: that's where we been able to pick up the volume
spk_6: i'm from i'm trying of one liners and and then i'll i'll i'll have it off some of those in the says he talked about in some part and are i think applicable event in some a your existing restaurant or more mature restaurant into the extent that they're sort of operational improvements is yours is that the case and and to that be a driver of same store sales going forward as you think are deploying feminists yes vote the way we're approaching it is is we now have a kid of parts
spk_8: that delivers independently and we'd we'd sides them independently not all of those can be applied to all of our restaurants throughout the system as i've mentioned before with some of this
spk_51: physical limitations that we have however when it's process improvements
spk_29: the a new button procedures
spk_21: skill activities around our for an hour management system does everything that we can apply we are we do and and that's actually been and will continue to be a big part of why the core systems even you know as as states as it it continues to grow both traffic and sales
spk_52: thank thank you so much you up
spk_1: sean tower
spk_53: thanks picture taken a question i'm curious as to the event guidance for the year yet when backing out the extra week would suggest growth that below the longer term trend now that you've been targeting says it opens maliki maybe break down what the put the takes are on that you know what what's really weighing on it are we sitting outside costs on free opening central getting more so than than historically
spk_1: yeah when we when we set the range we we we wanted to be sure that we have some things we are a bottom in that considered a bit of the recessionary or that backdrop that were operating under
spk_51: and we're you know where's where's you know understandably cautious
spk_4: in this environment but i would say that you know when we look back at the last few years
spk_1: the with there there's been some abnormalities in a in the performance that our our
spk_54: gross really does as it has has has been pretty respectable for the last two years so frankly with we've built and little bit of often enough in that range that was there was no
spk_55: okay so i'll take that as conservatism my words not yours by to check gestures been in terms of the labour inflation how much does the role specialization that you'd mentioned that increasing it and you're prepared remarks with on the back of asked that a dedicated expert actors and and beverage runners er and er
spk_51: makers how much is that weighing into the inflationary outlook on labor the roles of loses that and beverage attend an anonymous it's not really i mean it when it is part of an overall process and for advanced and
spk_4: time motion studies and things that be done
spk_56: and it actually
spk_4: the way we worked as as at it as i used a better position as an example
spk_33: it is keeping their servers out of these average alleys and out on the front more and at first and as during the beverages also handles and and is the server for and that counter and bar area for the community table and as a so it's really not as an experimental expense it's more it's again just a specialization abroad
spk_57: got to know incremental labour hours just people act
spk_0: i guess specializing where they should be ah yes
spk_1: luckily we get we get questions about the you know this our alliances yet the net another name i thought a dedicated expediting by having acadia system in the restaurants that allows us to free us what we call that town positions to act as a dedicated expedited go against one of the one of the see benefits to katie as for us is another role specialization office that actually improves our
spk_4: efficiency

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