Brinker International, Inc.

Good day, ladies and gentlemen, and welcome to the Brinker International Q4 2021 Earnings Call. At this time, all participants have been placed on a listen-only mode, and the floor will be open for 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, Kate, and good morning, everyone. Welcome to the earnings call for Brinker International's fourth quarter of fiscal 2021. With me on today's call are Wyman Roberts, Chief Executive Officer and President, and Joe Taylor, our 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. Then we will open the call for your questions. Before beginning our comments, please let me 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.

Thanks, Micah, and thanks, everyone, for joining us this morning. Brinker's fourth quarter was one of our more profitable quarters in recent history. marking a solid finish to a successful, albeit unusual year. Underpinning our fiscal 21 results is a consistent strategy that differentiates us in the marketplace and an exceptional team that executes every day in our restaurants. We were already growing sales and taking share before the pandemic hit, and we made the decision to lean further into our strategy of providing convenience, value, and a great guest experience by doubling down on third-party delivery and improving our takeout systems. In a year of social distancing, our teams came together safely to lead the industry on traffic and regain positive sales momentum. In a year of closures and shutdowns, we opened our first virtual brand in over 1,000 restaurants by leveraging our technological infrastructure. It's Just Wings surpassed our $150 million target in our company-owned restaurants, and along with the support of our franchise partners, It's Just Wings became more than a $170 million business in the U.S. with many of our international franchisees also now operating the brand. In a year that started with unemployment near record highs, we kept all our management teams employed and paid them solid bonuses. We put a retention plan in place for our strongest team members to encourage them to stay with us as the staffing environment continued to change through the spring and summer. In a year where gatherings and special occasions at Maggiano's were restricted, Steve and the team restructured the value proposition the takeout proposition, and re-engineered the heart of house. The brand is already delivering much more profitable sales as volumes come back and guests have responded very positively to the changes. In a year we thought we might have to borrow money more to survive the pandemic, we paid down our debt by over $300 million and we're committed to continuing that trend this year. And in a year where we worried we wouldn't be able to support our charitable partners at levels we're used to, our team set a record, raising more than $10 million for St. Jude during an exceptionally critical time for their patients and families. Our teams have raised nearly $90 million for St. Jude's patients during our partnership. Thanks to the strength of our operations team, we've emerged an even stronger business than before. In fact, we're positioned ourselves to invest aggressively to grow this business during fiscal 22 and beyond and to keep our balance sheet strong. The ability to make these kinds of investments starts with owning our restaurants. Having the opportunity to leverage our fleet and realize the full potential, the full profitability of our efforts. The pandemic solidified our commitment to corporate ownership. Despite the challenges of owning restaurants, like dealing with labor issues and commodity cycles, because ownership gives us the scale to effectively manage the issues. It allows us to steward our brands consistently and have control over the investments we make to grow the business. This year, our investments will target more ways to offer convenience, value, and a great guest experience by doubling our pipeline of new restaurant openings, reminiscing to keep our assets strong and vibrant, accelerating our technology advantages, and expanding our portfolio of brands. Currently, we're in the middle of rolling out our second virtual brand, Maggiano's Italian Classics. It's now in over 250 restaurants today and doing very well. This one will be a slower roll for a couple of reasons. It's a little more complex, and since we're back to fully operational dining rooms, we're being very intentional about the experience for our operators and our guests. We're excited about it. We're getting great guest feedback, and we're anticipating being in 900 restaurants by the end of the fiscal year. We're also investing in both takeout and delivery. by pursuing opportunities to increase visibility and drive awareness of these channels across all four of our brands. We recently implemented technology enhancements to our curbside takeout system, which is already simplifying the operational side of the business and improving guest metrics. It's Just Wings has gone live with a website that offers online ordering for takeout as well as delivery, and we're excited about the growth potential for the brand. These technology investments are helping us do a better job handling the increased mix of off-premise business from pre-pandemic mid-teens to what's now more than 30%, as well as leveraging the full capacity of our assets with very little incremental capital. It isn't every day you more than double your off-premise business and add a couple of brands to your base. It only happens well with best-in-class systems to enable it and a strong team to execute it. Our team is critical to our success, and we take the current staffing environment very seriously. We've executed a full court press to hire, train, and retain our talent. While the challenges came fast and furious for all of us in March, I'm pleased with the progress we've made. There are still opportunities, but isolated to specific trade areas, and we're confident we'll get these staffing challenges resolved in the near future. To further support our operators, we're rolling out a new service system with handheld devices that we've worked on for three years to perfect. It isn't as easy as some might claim to implement a system that operators can execute during high volume that saves labor and still delivers a great guest experience. Ours is also putting more money in our team members' pockets, so they're staying with us longer, which is crucial in this environment. It's in more than 250 restaurants now, and we anticipate full implementation by November. And finally, because we chose not to take price at Chili's during fiscal 21, we have room to take some price this year as consumers return to work and income levels return to normal. We're evaluating how we'll address those opportunities, especially in channels like delivery, all while protecting our industry-leading value proposition. We spent last year learning to run a much more efficient and robust revenue-generating model. We're spending this year and beyond capitalizing on the opportunities for growth, that are not just available, but achievable for Brinker. There's nobody who's doing this better than this team, and I'm honored to be part of their story. Now I'll turn the call over to Joe.