Brinker International, Inc.

Good morning, ladies and gentlemen, and welcome to the Q1F20 Earnings Call. At this time, all participants have been placed on a listen-only mode, and we'll open the floor for your questions and comments after the presentation. It is now my pleasure to turn the floor over to your host, Micah Ware. Ma'am, the floor is yours.

Thank you, Paul, and good morning, everyone. Welcome to the Earnings Call for Brinker International's first quarter of fiscal year 2020. With me on today's call are Wyman Roberts, Chief Executive Officer and President, and Joe Taylor, Chief Financial Officer. Results for the quarter were released earlier this morning and are available on our website at Brinker.com. As usual, Wyman and Joe will first make prepared comments related to our operating performance and strategic initiatives. We will then open the call for your questions. Before beginning our comments, It is my job to remind everyone of our safe harbor regarding forward-looking statements. During our call, management may discuss certain items which are not based entirely on historical facts. Any such items should be considered forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All such statements are subject to risk and uncertainties, which could cause actual results to differ from those anticipated. Such risk and uncertainties include factors more completely described in this morning's press release and the company's filings with the SEC. And, of course, on the call, we may refer to certain non-GAAP financial measures that management uses in its review of the business and believes will provide insight into the company's ongoing operations. And with that said, I will turn the call over to Wyman.

All right. Thanks, Micah. Hey, good morning, everyone, and thank you for joining us. Fiscal 20 is off to a solid start for Brinker, right in line with our expectations for the year. Total revenues for the quarter were $786 million, a year-over-year increase of 4.3%. Comp sales were positive 2.3%, with adjusted net earnings per share of 41 cents. These results were primarily driven by another quarter of differentiated execution in the Chili's, with comp sales up 2.9%, marking our sixth consecutive quarter of positive comps. So we're well into our lap. We've seen these trends continue into October, and were pleased with our performance across the country, and we drove particularly strong regional performance in the critical markets of California, Texas, and New England. From a traffic perspective, we ended the quarter flat. We were relatively soft early in the quarter, like the rest of the industry, but we saw sequential improvement throughout the quarter and ended September with positive traffic. And during the quarter, we drove more than a 300 basis points gap to the category in both sales and traffic, our fifth consecutive sales beat, and seventh consecutive traffic beat. And as we head into our higher volume quarters, we're more than confident that we have plenty of momentum to deliver the sales and earnings growth we've outlined for the year. The performance we're delivering today is a direct result of the relentless focus on the strategy we laid out for you nearly two years ago to deliver best-in-class operational execution, to leverage our scale, to offer compelling everyday value, and to leverage our digital expertise to offer convenience the way our guests want it primarily through takeout and delivery. Best in Class, as an operations team, we're more aligned ever around our core operating systems and a focused set of metrics that pinpoint where we're performing well and reveal our opportunities. I feel good about the progress we've made as we watch guest metrics rise to an all-time high again. And I feel even better about the path forward because it's clear there's room to take operations from a good place to a great place. As our operational playbook remains focused and consistent, the team now knows how to win, and all-time highs are no longer good enough. They're ready to raise their own bar and see just how high they can take our guest satisfaction. We're also raising the bar on our ability to deliver new, quality food with bold flavor profiles while maintaining our commitment to keep our operations simple. For example, we just rolled out a new, improved chicken product. We're now pounding chicken breasts in-house and hand-breading them to order. which creates a much higher quality product. And we're leveraging this on all our menu items that feature a crispy chicken breast. And we introduced an awesome new chicken sandwich that we call Chickie Chickie Blue. So we didn't do a broad menu launch that adds complexity for operators and confusion for guests. Instead, we upgraded the quality of a key product and introduced one bold new menu item to keep consumers engaged and drive frequency. We'll continue to leverage this balanced innovation strategy that brings new news and improves the quality of our food at a pace our operators can execute with excellence. But the primary driver of our first quarter results came from our strategy to offer convenience the way our guests want it and our ability to leverage the strength of our technology platforms to meet their expectations. First quarter marked our eighth consecutive quarter of positive takeout growth, and we continue to see upside for this segment of the business. Our delivery business also achieved a tremendous start during the first quarter, with just one channel turned on. We're bringing to bear the digital expertise we've been methodically building over the past couple of years, and it's a significant differentiator for us. Currently, two-thirds of our off-premise sales are coming through digital channels, which makes it operationally more efficient and provides data for future marketing efforts. Delivery is a powerful channel for our category. The players who do it right open the door to a drastically larger number of meal experiences and greater guest frequency. At this point, all of our metrics say we're performing really well as a delivery option. We're executing at a high level, and the breadth of our menu mix and strong value positioning make Chili's a compelling delivery choice. And we're just getting started. We're working hard to optimize profitability through alternative packaging and new staffing models. while we test additional initiatives to leverage the long runway for growth we see in this segment. Around the world, our partners continue to grow the Chili's brand. They opened 11 Chili's restaurants during the first quarter, and we see these growth trends continuing. The ongoing demand for the Chili's brand internationally is a great testament to the belief our partners have in the strength of the brand as well as the business. And here at home, we closed our acquisition of 116 restaurants in the Midwest and we're excited to welcome these team members and their communities into the Brinker family. We've deployed a strong leadership support team for these restaurants to accelerate their transition into our system and leverage the upside of the existing team. We feel good about the earnings potential these additional restaurants add to our business. I'm just as confident today, if not more so, than when I was when I introduced our strategy to you nearly two years ago. We continue to deliver consistent results and outperform the industry. We've created a solid foundation that can withstand this challenging environment, and we've got a clear line of sight to ongoing returns for our shareholders. And now I'll turn the call over to Joe to give you more details. Joe?