Brinker International, Inc.

Good day and welcome to Brinker International's Q2F25 earnings call. At this time, all participants have been placed on a listen-only mode. The floor will be open for questions and comments following the presentation. It is now my pleasure to turn the floor over to your host, Kim Sanders, Vice President of Investor Relations. Ma'am, the floor is yours.

Thank you, Holly, and good morning, everyone, and thank you for joining us on today's call. Here with me today are Kevin Hoffman, President and Chief Executive Officer and President of Chili's, and Micah Ware, Chief Financial Officer. Results for our second quarter were released earlier this morning and are available on our website at Brinker.com. As usual, Kevin and Micah will first make prepared comments related to our strategic initiatives and operating performance. Then we will open the call for your questions. Before beginning our comments, I would like to remind everyone of our safe harbor regarding forward-looking statements. During our call, management may discuss certain items which are not entirely based 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 risks and uncertainties which could cause actual results to differ materially from those anticipated. Such risks 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 Kevin.

Thank you, Kim, and good morning, everyone. Thank you for joining us as we discuss our financial and operating performance for the second quarter, as well as our outlook on the remainder of fiscal 25. Before I start, I want to share that our thoughts are those that are impacted by the Los Angeles area wildfires, and I want to thank the first responders on the ground there. I also want to recognize our Chili's VP of operations, Dale Bellotta, and his restaurant teams in California. We're working hard to support the first responders with meals as well as taking care of our team members who have been impacted by the wildfires. I'm proud of how our chili heads show up for each other in our communities during times like these. Now let's give an update on the business. Chili's delivered another positive quarter in our turnaround and significantly outperformed the industry with same restaurant sales up 31% versus a year ago. We're pleased with our sustained momentum, the strength of the operational muscle we've built, and our significantly improved Chili's guest experience. Throughout Q2, increased competitive promotional activity, pressure trying to undercut our value, tested our guest experience improvements, and the results are clear. Chili's turnaround has taken hold, and it is sustainable. Our growth continues to be well-balanced, driven by the introduction of a new generation to the Chili brand and by existing guests coming more often. The investments we have been making over the last three years are working. Marketing is doing a great job of bringing guests in, and putting Chili's back in culture again. Operation simplification, investments in labor, and facility improvements are working to get guests to return. In short, Chili's is broadly relevant again in delivering a guest experience that has restored its leadership position in casual dining. The most recent Sarkana Crest traffic share data shows Chili's is now the number one casual dining chain in the industry for 2024, and we don't plan to give that title up. Congratulations to Doug Cummings, his Vice President of Operations, and their restaurant team who selected traffic as their obsession metric for this fiscal, and to George Felix's marketing team who has supported them with literally world-class marketing. These sustained results have been driven by continued operational improvements, which have guests coming back, so I'd like to start with an update on operations. We are encouraged with our ability to accelerate sales results while we also continue to trim the menu. This year to date, we've been able to remove 13 menu items, 12 pantry SKUs, and several prep sets, and we've reinvested time into doing fewer things a whole lot better. From a food standpoint, we've successfully moved to a higher quality chicken breast on every entree, as well as guacamole made fresh in-house every day. We also upgraded our recipes for boning chicken wings and bacon to make them crispier. These recipe improvements continue to make a positive impact on guest satisfaction scores. Fewer things to prepare, more care executing our core menu, and continually upgrading ingredients is resulting in better tasting food, which is a key piece in accelerating our results. Next on the upgrade list is fajitas in Q4 and ribs in Q1. We also continue to challenge our processes to simplify and make the job easier for our team members. The installation of our new kitchen display systems is now complete, which has not only eliminated hundreds of pages of reference finders in the kitchen and made it easier to find recipes, It also has enabled slightly faster ticket times, even with the dramatic increases in traffic. And we have just completed the KDS's first upgrade, adding all-day counters across all three cook zones, which will be a game-changer for cooks to get better visibility on what they need to prepare during the busiest of shifts. Three other impactful operational changes we've made recently include the use of steak weights to trim cook time up to 40%, the elimination of chicken portioning, and the removal of the itch-just wing station tower in the fry area zone 1, which frees up space and time cleaning for the Zone 1 cooks. While we still offer the It's Just Wings virtual brand, we have removed enough complexity that allows us to dismantle this specific station that was simply too much space allocated for what is now just 1% of the business. Removing the Wings station seems small, but it has a big impact that is important to our operation. Less items to prep, less equipment to clean, and more free space up in Zone 1. where much of the incremental volume driving our business is hitting the kitchen with high-growth items like triple dippers and crispers. To wrap up our operations, I did want to share news of an investment we have decided to accelerate to convert the balance of our restaurants to turbo chefs, which are ovens that use a combination of modern cooking methods to rapidly accelerate cooking versus conventional ovens. Today, the majority of our system uses conveyor belt ovens that cook a variety of menu items like ribs, chicken, and quesadillas. We've been testing Turbo Chefs in restaurants and slowly expanding them for the past three years with very positive feedback from the operators. They cook the food much faster and much more evenly. They put out less heat, making the kitchen more comfortable for our team members. They create superior tasting products like crispier quesadillas and ribs with a delicious crust. They save a lot of kitchen space, which helps with kitchen capacity in the future. They are much easier to clean, and they are much more reliable than the current conveyor belt ovens. We've been slowly replacing end-of-life conveyor belt ovens when they need repairs, and now with the sustained traffic increases, the time is right to upgrade the balance of our system to a piece of equipment that can properly handle our new increased volumes. Now let's switch gears and talk about marketing and menu innovation. We saw traffic and guest counts accelerate behind a continuation of our Better Than Fast Food TV campaign and the Triple Dipper social media campaign. As the operation gets stronger and stronger, It amplifies the return on our marketing investments through more frequent guest visitation. So while competitors can certainly price the lower 3 for me offer, it is very difficult for them to replicate the total value proposition given the amount of time and investment we have put into improving the experience. We have a multi-year head start in the industry. Our accelerated QT results in the face of hotter competitive offers are a solid proof point that replicating our chili success will be difficult for competitors to do in the near term. We also have big food innovation news coming in Q4 to bring excitement to the three for me platform within our better than fast food campaign. Like the tremendously successful Big Smasher, the Q4 launch will feature a famous, very familiar taste profile. But with the high quality, great taste, and hot price point, you can only get from Chili's. I can't wait to be able to talk about it at our next earnings call as we expect a new menu item to help us grow traffic versus a year ago as we lapped a Big Smasher launch from Q4 last year. In addition to our industry-leading Value3ForMe platform, the marketing team has done an excellent job driving the Triple Dipper social media campaign that started in April 2024. In Q2, they brought news to the campaign by partnering with social media personalities Beauty Perfect, who challenged fans to create the perfect Triple Dipper trick shot. And later in Q2, the marketing team launched a Triple Dipper-themed holiday bedspread collection that sold out in less than a week. Through YouGov data, we can now see how these efforts positively impact buzz with younger guests and are introducing the next generations to Chili's. We also brought food innovation to Triple Dipper in Q2 to keep the momentum going. As a follow-up to the wildly successful natural hot version of our famous mozzarella sticks, the food team launched honey chipotle mock sticks. They have also driven social media excitement around the Triple Dipper. The results behind the campaign are exceptional, with Triple Dipper now representing 14% of total sales in Q2, a three-point acceleration versus Q1, and an important driver of the total business results. The campaign is bringing in a younger guest, it's driving a higher check average, and guests who purchase a Triple Dipper are coming back more frequently than those who don't. New guests, higher ticket, and more frequency. I'd call that a Triple Dipper win for the business. Now I'd like to give an update on Magianos. We've got an established playbook with the successful Chili's turnaround, and we started deploying elements to Maggiano's with the Bring the Magic Back plan, and it focuses on simplifying operations while accelerating improvements to the guest and team member experience. Maggiano's president, Dominique Bertolone, has built a strong leadership team to lead the transformation. We previously announced Anthony Amoroso as vice president of innovation and growth, a Michelin-starred chef and Iron Chef winner who knows food and he knows how to elevate experience. Now I'm pleased to announce two additional strong leaders to round up the Maggiano's leadership team. Ernest Perez is our new vice president of Maggiano's operations. Ernest was a Chili's operations leader for 13 years before transitioning to Maggiano's in 2020, and I couldn't be more pleased to announce his promotion. He's a true servant leader who is working closely with the team to simplify operations and drive business growth. I'm also pleased to announce Mike Wesley, has joined the team as vice president of Maggiano's Marketing. Mike spent the last 14 years as a marketing executive at Young Brands, and I had the pleasure of working with him the entire time I spent at Young. Before that, Mike learned leadership and brand management at the Procter & Gamble company. He has a strong track record delivering on the fundamentals of restaurant marketing and innovation, as well as bringing big teams along for the journey. He loves the Maggiano's brand, and he's excited to partner to bring Dom's vision to life. The Maggiano's team has started the journey of simplifications. We eliminated $6 take-home pasta and seven other menu items, which was 13% of the menu. We've also eliminated 17 prep steps that don't improve the guest experience, such as pounding chicken and pre-portioning pasta. This has enabled us to reallocate around 80 hours of labor every week from the heart of house so our executive chefs and their teams can focus on executing the core menu with excellence. And Chef Amoroso is beginning to put a stamp on elevating the menu, starting with core items that represent over a third of the business to make the biggest impact. Two recent upgrades are our Maggiano Caesar salad that now features scratch-made dressing, fresh-baked croutons, and freshly cut romaine, as well as our meat sauce, which has been upgraded to a far more delicious beef and sausage bolognese served with a superior pasta noodle. Next on our upgrade list is what we think is the most delicious fettuccine Alfredo our guests will have ever tasted, an elevated crispier chicken parmesan topped with fresh mozzarella, a 30-layer meat and sausage lasagna, and and our new meatball recipe that is made with American Wagyu beef to elevate spaghetti and meatballs as well as other dishes. In addition to operations and food innovation, the new Magiana leadership team is working on big initiatives to improve speed of service and re-imaging their estate, both of which I look forward to updating you on in the future. I do want to remind everyone that while we started growing sales immediately during the Chili's turnaround, it did take five quarters to start turning traffic trends, and it took seven quarters to turn positive on traffic, so that should give you some type of guide on what we're expecting from Maggiana's. In closing, I continue to be encouraged by our business momentum. Our Q2 results demonstrate we're working on the right things the right way to drive long-term growth. What's even more encouraging about our turnaround is there's still so much more runway ahead of us for improvements and growth. My executive leadership team just finished our annual strategy planning meetings, and we have a clear line of sight into our future growth plans. While we've made great strides in areas such as food grade scores and service, we still have a lot more opportunity. Our ultimate goal is best-in-class casual dining guest experience. We see a lot more upside by staying focused on improving the business fundamentals, which includes continued upgrades to menu, service, and atmosphere, while also continuing to make our team members' jobs easier, more fun, and more rewarding. I look forward to sharing even bigger initiatives anchored on improving the fundamentals in quarters to come. Now, I'll hand the call over to Micah to walk you through our second quarter numbers and our updated guidance. Go ahead, Micah.

Thank you, Kevin, and good morning, everyone. We're pleased with Brinker's second quarter results as we delivered record same-store sales and 600 basis points of margin expansion. Our strong performance is a direct result of staying focused on the fundamentals of food, service, and atmosphere. Our Investor Growth Strategy combined with our industry-leading value proposition, continues to drive sustained growth in our business. It's exciting to see our cross-functional efforts deliver results in such a big way, and I'm encouraged that we have more opportunity for growth ahead of us than behind us. For the second quarter, Brinker reported total revenues of $1,358,000,000 with consolidated comp sales of positive 27.4%. Our adjusted diluted EPS for the quarter was $2.80, up from $0.99 last year. Both brands reported top-line sales growth, with Chili's comps coming in at positive 31.4%, driven by positive traffic of 19.9%, positive mix of 6.6%, and price of 4.9%. Chili sales are a direct result of the investments we've made into marketing to drive the guests in and operations to bring guests back. We are back at the top of the consideration set and we're committed to continuing to improve both the guest and team member experience. Turning to Maggiano's, the brand reported comp sales for the quarter of positive 1.8%, driven by 6.4% price, positive 0.3% mix, partially offset by negative 4.9% traffic. As Kevin mentioned, Mahjong has started to implement its turnaround strategy. Dom and the team are closely following the Chili's playbook by eliminating discounting and improving the core menu and the service model. I'm excited about the brand's plans and the progress the team is already making. At the brinker level, we made considerable progress on flow through this quarter, with restaurant operating margin coming in at 19.1%, a 600 basis points improvement year-over-year, primarily driven by sales leverage from top-line growth. This resulted in favorability in all categories of food and beverage costs, labor, and restaurant expense. Food and beverage costs for the quarter was favorable 20 basis points year-over-year, with price offsetting 1.5% commodity inflation. Labor for the quarter was favorable 220 basis points year over year. Top line sales growth and favorable productivity offset wage rate inflation of approximately 3.5%. Advertising spend for the second quarter was flat year over year as we moved some of our incremental spend into the back half of the year. Our marketing team continues to do an excellent job bringing Chili's back into the cultural conversation and making the brand relevant again. G&A for the quarter came in at 3.9% of total revenues with the year-over-year decrease due to sales leverage partially offset by increases in performance-based compensation and ERP system costs. Q2 is our first quarter to report from our new ERP platform. So far, while we have experienced the normal bumps expected from an implementation of this scale, Operations are running smoothly, and we haven't had any material disruptions to the business. Second quarter adjusted EBITDA was approximately $216 million, a 102% increase from prior year. Capital expenditures for the quarter were approximately $49 million, driven by capital maintenance spend. During the quarter, we repaid approximately $164 million in debt, almost half the amount we put on the revolver when our $350 million notes matured in October, bringing our overall lease-adjusted leverage ratio to 2.3 times. We will continue to execute our capital allocation strategy, which is to invest in the business, pay down our debt, and return excess cash to the shareholders. While it's still early in the quarter, we're excited to see our strong sales momentum continue as we finish our first month of Q3. In terms of our expectations for the balance of the year, as noted in this morning's press release, we're raising our fiscal 2025 full-year guidance to include the following. Annual revenues in the range of $5.15 billion to $5.25 billion. Adjusted diluted EPS in the range of $7.50 to $8. Capital expenditures in the range of $240 million to $260 million. Our existing guidance for weighted average shares was also reiterated. Assumptions underlying this guidance include planned commodity inflation in the low single digits, wage rate inflation in the mid single digits, and a tax rate in the mid double digits. Sustaining this level of performance takes continued focus and discipline, and we remain committed to the fundamentals, continuing to improve our food, service, and atmosphere. We're proud of how far we've come. We know there's more work to do, and that's what excites us. By sticking to our strategy and making smart investments, we're confident in our ability to drive long-term success. And with our comments now complete, I will turn the call back over to Holly to moderate questions.

Certainly. At this time, we will be conducting a question and answer session. If you have any questions or comments, please press star 1 on your phone at this time. We ask that while posing your question, you please pick up your handset, if listening on speakerphone, to provide optimum sound quality. Please hold while we poll for questions. Your first question for today is from David Palmer with Evercore ISI.

First of all, just a wow and a congratulations to you guys on this brand turnaround, which probably is the best one of all time in this space. And that would be true if the comps were 15%, but they were over 30%. I know there's a lot of wonder about this level of same-store sales and the reasons for it as you sort of separate the different levers between One of those levers I think people wonder about is just the magical social media buzz lift that you've had, particularly with Triple Dipper. And people wonder and worry about that being lightning in a bottle that's difficult to replicate or repeat as you have to lap these. So could you talk about that and how you sort of – try to sustain the lift that you're getting with some of this effective social media marketing and other. So, thanks.

Hey, David. Thanks for the kind comments. It's Kevin. You know, we ask ourselves the same question, and we obviously go deep in our analytics to understand the drivers of the business. And I know last quarter we talked about, you know, we got to a pretty precise measurement of what was triple dip for social media versus what was three for me. In Q2, we saw really everything continue to accelerate, so it was kind of hard to tease apart what was social media versus what was three-for-me. What I will say to maybe help dimensionalize it is if you look at the comp, which is over a 30% And then you look at like, well, what was the sales of Triple Dipper versus a year ago? You know, we basically doubled that business, so it's about seven points. So you can start dimensionalizing what the percentage of the total is. It probably leads you to the same numbers that we gave you last quarter. But quite frankly, it's harder for us to make a more finite comment about that. So that's kind of point one. And then point two is what we believe is going on in the business is that without the operational improvements that Doug and his team have led and the simplification efforts that we've made, we don't think that the morality and the impact on the business would have lasted as long. So, you know, quite frankly, this stuff really started in April of 2024 and Typically, when you see something go viral, especially in food, it's probably no more than two to four weeks before you kind of see it snap back. I remember seeing a QHR competitor had done a promotion with a cartoon company, and they saw big double-digit comps that first week, and then by week four, it was kind of back to where they were. And I think that's what you would normally expect if you get the, you know, the virality of something without some of the improvements that we've made. What's happening is young people are coming in and they see this on TikTok and they're like, wow, this experience is really good. And it becomes a part of the rotation. I think that's why you've seen the longevity of the results. and the acceleration of the results, not just kind of a boom-splat that I think you typically would see without the operational investments that we've made in the business. So, you know, I wish I could give you a more finite answer on that because I think that's what everybody's yearning for, including us. But we do believe that our strategy is working and that the frequency and the repeat rates are in a place where this is a sustainable long-term, you know, business goal for us.

Thanks. I'll pass it on.

Your next question is from Dennis Geiger with UBS.

Great. Thanks, guys, and congratulations to the team. I wanted to ask on value and kind of the latest maybe, I'm not sure if I missed it, but as far as that three for me mix goes, maybe the 1099 within that, if there's anything to share. And specifically sort of those value scores, it sounds like everything's trending in the right direction. And, Kevin, just kind of curious if those value scores are sort of trending as strong as the sales results. And maybe if there's anything additional on your thoughts on value and opportunities from here from a value perspective.

So I'll start with just the trends on three for me. So the 1099 bucket, you know, it's up a little bit, our overall three for me. Really, it was about 19% last quarter, and it's just a little bit above 19% this quarter, so it's pretty similar. We still feel really great about just the menu management and the ability for that platform to drive traffic into our restaurants. Kevin, if you want to talk a little bit more about just the whole value proposition, I think our value scores are definitely hanging in there.

From a value score standpoint, we are very, very strong, and You know, it's very clear that it's not about the lowest price point because we actually had a lower price point three years ago. We used to have three for 10, not three for 10.99 with the trade-up. And what's the difference in the business today than three years ago was you're getting a much more consistent experience. You're getting much more delicious food, and you're getting it in a much better atmosphere with friendlier service. And I think that is a huge part of the value equation that I think people underestimate. And, you know, we were getting a lot of questions. I don't know, 13 weeks ago when our competitor came out with a – that was maybe eight weeks ago. The competitor was coming out with a lower price point. And, I mean, I'll tell you this story. I'm talking with my vice president of operations. We had a meeting with them a few weeks ago. And I said, are you guys worried about that number, the $9.99? And they all just started laughing. And I was like, why are you guys laughing? And they're like, because we know how strong. We've been in the gym. We've been working out. And we are not afraid of competitors undercutting us. And I think that's what you're seeing in these results. I think everybody on this call were asking questions about how is this sustainable? Why can't someone go beneath you on price point? And the answer is they can. But can they deliver the overall value equation that we're delivering right now? I think that's going to be difficult to do in the short term. Got it. Great, guys.

Appreciate that. One quick follow-up, if I could. Just on the traffic success, and it sounds like it's new customers as well as increased frequency traffic. from the existing. Is there any more color you can give on that? Maybe how that's changed over the last several quarters you've had this level of success where it's more the increased frequency versus the newer customers. Any sense on a breakdown or any kind of other positive behavior shifts from your customer that you've observed over these last several quarters?

Thanks very much. The only thing we can share with you in the last couple quarters, Dennis, is that the frequency is getting better and there's more new guests coming to the business. We can't give you any other granularity on it. It's a new discipline for us, and we're using tokenized data, and we just want to be careful about giving anything that's exact without really fully understanding how all the data works. So we're very hesitant to give, versus like when we give you the traffic numbers and sales numbers. These are tools that we've had for a very long time and are very competent in. So we can say directionally frequency is up, new guests are up, but to give you that kind of detail, it's just going to be difficult to do right now.

Makes sense. Thanks, guys. Congrats.

Your next question for today is from Chris O'Call with Stifel.

Thanks. Congratulations, guys. Kevin, you mentioned a couple of product innovations coming in the fourth quarter, one being a big three-for-me innovation. Just given the results you're seeing, why is the fourth quarter the right time to bring a new product to the platform and And then what gives you the confidence you can maximize the impact of really two new items, right, the three-for-me innovation and then the fajita upgrade in the same quarter?

Yeah. Hey, Chris, thanks for the question. So from a three-for-me standpoint, we'll have been running basically that advertising for a full year, and we feel like the time is right to bring some new fresh news. Two, three for me. Obviously, if we see a change in business trend when we turn to advertising, we'll go back to the other advertising. But it's going to be in a similar vein of better than fast food campaign, familiar taste profile that people know and love, but with the great taste and the hot price point of chili. So we're pretty confident that it's going to be sufficient to roll over the results. But obviously, we're not going to be myopic about that. We're going to watch the results closely, and we can always flip back if we need to. So that's kind of point one. And then how can we support both? So the fajitas launch is really going to be focused on the operational improvements, the food improvements, and through menu merchandising only. So think about that as a thing that could really help our mix in the short term. And obviously, if the business takes off on fajitas, we could then potentially advertise it in the long term. So we don't think our advertising budgets right now are big enough to have two mouths to feed, so they have two things on TV. And we know that value is continuing to work, so we are not willing to move off of that right now, even if we are refreshing the message. So think about fajitas as kind of a ground war with menu merchandising, operational improvements, and food improvements. And then our new three-for-me innovation will be the air war, where we use advertising to drive traffic inside the building.

That's great. That's very helpful. And then just one other one. I wanted to ask about Chili's longer-term margin potential. I'm curious if you know what a sustainable store-level margin could be once the chain gets to, let's say, above $4 million in AUVs.

Hi, Chris. It's Micah. So really good question about margins. So I want to take the opportunity to talk a little bit about Q2 expectations for this year and then the longer-term expectations. So I will say the 19-1 for Brinker margins was excellent in Q2. I think it is a little bit of an outsized earning just for this quarter. There are a couple things I wanted to point out. We had a really big change in ourselves from Q1 to Q2 in the trajectory. It did take us a little bit of time to really ramp up our labor spend in that quarter, so we were a little light in the beginning. We exited where we wanted to. We felt really good about the labor then coming out of the quarter. So that in turn caused us to have some really favorable labor that I still think we will definitely leverage labor as we move forward, but not at that magnitude. The second thing is the advertising. We were flat year over year. We did reallocate some of those dollars to the back half of the year. So I do think, again, that the 19 will be the peak, and then I think we will moderate a little bit on ROM in the last two quarters. Probably coming in for the year, at that mid-teens to even upper-teens ROM for a full-year expectation. So, really pleased with all the progress we've made over the last few years. You mentioned AEVs. Just a few years ago, AEVs were at 2.9 million. Last year, they were at 3.6, and now we are over 4 million at 4.2. The great news is we think we can continue to grow these AAVs. So we actually have chilies out there that are $8 million, $9 million volume restaurants. So these are all basically in the same box. We also watch our guest counts, our dining guest counts really closely, and we know we still have a lot of upside there to continue to grow these AAVs. So the point of that is if we can continue to grow the AAVs, we know we still have upside in the margins. So really pleased with this year, the progress we're making. back to historical high ROM, probably even better if you adjust for some of the historical changes and still think there's upside from here if we continue to grow the AAVs.

Great. Thanks, guys.

Your next question is from Jeff Farmer with Gordon Haskett.

Thank you. Incredible quarter, to say the least. I want to focus a little bit on the free cash flow. Obviously, you guys pay down some debt. CapEx is going up a little bit, but Assuming that you're operating sort of cash flow run rates at a higher level moving forward, how are you thinking about using cash moving forward?

You know, Jeff, that's a great question. So really we're going to do more of the same because for us the most important thing is we continue to invest in the business and have the base business grow. So we're not going to take our eye off the ball there. We're going to continue to pay down our debt especially into the third quarter. I think we're going to continue to do that. And then any excess cash from there will be used to return the cash to the shareholders. We did some share of purchase to offset dilution. We'll continue to evaluate that and do that as we move forward. So the priorities haven't changed. It's going to be invest in the business, continue to pay down that debt, and then we'll return some cash to the shareholders after that.

Okay, that's helpful. And then on the follow-up, you touched on it earlier, but as it relates to the increase in new guests that you're seeing in Chili's, I'm curious how you monitor that and sort of what are some of the data points that you've seen over the last nine months with or from new guests, I should say?

Yeah, so the way we monitor, we put those, we were talking about it for a year and a half about getting the tokens into our business. So we tokenize the data now so we know for a given period how many guests are new and how many guests have come back within the last 12 months or even goes further back, 24 months. And then we just, you know, it's just a math equation, right? So we can tell you, you know, what the number of guests that show up new, at least the ones that we have tokenized, which is a good representation of the total population. And that gives us the confidence that we know that we're bringing in more new guests as well as existing guests are coming back more frequently. So, you know, that's probably the amount of detail I can give you on that, but that's how we're confident, knowing that it's both drivers, not one or the other.

Okay. Thank you.

Your next question is from Jeffrey Bernstein with Barclays.

Great. Thank you very much. Two questions. The first one, just following up on the very strong comps. It seems like your revenue guidance for the full year assumes a sustained elevated level of comp with the recent trend. um, I know last quarter when you gave guidance, it seemed like you took perhaps a more conservative view on the forward comps. So I'm just wondering your confidence, you know, I wouldn't think you could imagine sustaining a 30% plus comp, but just trying to get a sense for what your assumption is for comp through the back half of the year. And just so we can gauge maybe the momentum, can you share the monthly comp trend for October, November, December, and now January, especially with the weather impact? And then I had one follow up.

All right. So, so, uh, I can share this. We had a big step change in the business. We've had it, but starting in October in the second quarter, obviously, we had a big increase. What I will tell you is that happened and it is sustained. Really, there was a little noise in the quarter just because of holiday flips, but our sales have increased and they're staying at those levels. That momentum has continued into the third quarter. So really, you know, none of the assumptions have changed. We know. We've talked to you guys what our price assumptions are. Mix has been elevated, now triple dipper, and the mozzarella sticks. We've added those to the appetizer menu. Those are highly incremental. We've been selling more of those. So our mix now will be in the mid-single digits as well throughout the balance of the year. And then, you know, we feel like the business has moved and it's sustaining. So we're seeing that consistently. Okay. every day.

Great. And then, Kevin, just following up, you mentioned the Turbo Chef. Sounds like you've already had it in some units. I'm just wondering how many more units are in need of the conversion and any color you can provide in terms of how you would quantify the potential benefits. I know you gave a lot of soft metrics around better quality and consistency and whatnot, but Anything else you can share, maybe the cost to convert or any other quantifiable benefits you anticipate from that full rollout? Thank you.

It's great about a quarter to a third. We can certainly follow up after the call with an exact number. So the majority of the system still has yet to be converted. I'm not going to share any specific details on the speed and the overall satisfaction and food grade scores, et cetera, because there's just a lot of items that go through it. It would be very complex. But generally speaking, we've been very, very pleased with all of the metrics. And when you talk to the – like, we have all these directors of operations, and they have anywhere from, like, 8 to 12 restaurants. And some of them have turbo chefs, and some of those restaurants don't. And whenever you talk to these directors of operations and say, you know, what's the next big investment that we need to make into the restaurant to continue to improve capacity and the team member and guest experience, the first thing they say is, can you just convert the rest of my restaurants to turbo chefs? So we are so confident now. I mean, we've been testing this thing for three years. And the reality is we were pretty confident before, and we were rolling it out as the conveyor belt ovens were crapping out and out of warranty. And now we're at this point where the increased traffic and the ability to invest to say, let's just go make that move now so that we can really support the teams with the things they need to deal with this increased traffic. There's other things that we've been doing beyond the temperature shift, but we know the time is right now. So we couldn't be more confident that it's a large investment and We certainly can share with you all the numbers, but we're very, very, very confident this is the right thing to do for the business.

And, Jeff, we factored that into all of the current guidance, so obviously in our depreciation and our EPS and our CapEx forecast as well.

Thank you. Your next question is from Brian Harbor with Morgan Stanley.

Yeah, thank you, Morgan. Congratulations, guys.

Kevin, you know, I guess just the mix piece, was that mostly driven by triple-dip or maybe just comment on, you know, some of the other things that you see driving that, whether it's alcohol mix or you think anything that sort of adds to that as we go through the balance of the year?

Yeah, Brian, it's Micah. So like Kevin mentioned, our triple dipper sales year over year have doubled. And when we sell more triple dippers, it definitely drives our mix. So I would say that is the bulk of what's driving the mix year over year. We do have, like I mentioned, the mozzarella sticks. Those are incremental in the appetizer category. So we are seeing some mix from appetizers. So that's positive. And then there's a small amount that could be, you know, a little bit of desserts or kind of other everything rolled up. But those are the two big drivers year-over-year. Our alcohol sales, they're hanging in there. You know, they're pretty flat or the per 100s are up slightly. So everything is pretty solid on the mix. But those are the two main drivers. The triple dipper is a big, big mixed driver year-over-year.

Okay. Got it. Thanks. Maybe just to push a bit on that sort of uses of capital thing, question too right micah would you um do you think that you'll just pay off the revolver and then i mean like longer term um do you know do you want to sort of go back to growing units are there are there places where you think you could build new stores you know do you think you could sort of um accelerate some relocations are there stores that you'd you'd want to expand and I guess, you know, are there stores that, is there a cohort of stores that you think need full remodels? How would you think about that sort of thing?

Yep. So Brian, good question. So absolutely focusing again on the base business. We want to invest back in the business where we think it's smart. You know, right now we've been growing new units at Chili's. Obviously when the brand continues to improve, that opens up more opportunities for that. So, you know, we'll still evaluate those opportunities. You mentioned re-image, and that's something we're really excited about. Again, with our pillars, food, service, and atmosphere, we think atmosphere is very important. So we are ramping up with a new prototype design, which will then lead us to our new re-image design. So more to come on that, but that is something we think we can put our cash against as we move forward with our CapEx plans in the future to keep Chili's and Maggiano's relevant. So that'll be a big play there. So again, It's going to be focus on the business because if we don't have the business growing, you know, the rest of the strategy isn't, you know, it's not as meaningful. So that's still the number one priority, and that's what we'll do with the cash moving forward.

Thanks. Your next question for today is from John Ivanco with J.P. Morgan.

Hi, thank you. I wanted to, firstly, congratulations on everything. Kevin, you're going to write a great book on this someday, so we all look forward to reading it. Congratulations. Congratulations to the entire team. So the question is on... CapEx, 240 to 260, I think, is the number this year. Certainly, if we go back in the history of the industry, in the casual dining landscape, I mean, there were so many brands that were once good that didn't do their remodels, that didn't do relocations, that didn't do rebuilds, just because maybe the financial returns didn't pencil out at the point. In other words, it wasn't necessarily the best use of capital from a return perspective, but in hindsight, it was necessary for the brand. So I'll ask the question in the context of the Chili's brand. You have units that are 20 years old, 30 years old, 40 years old, maybe even a couple older than that, maybe 50 years old approaching. I guess not quite 50, but, you know, in other words, getting up there. Talk about, you know, since your system is so strong and people are so excited to work at your brand, you know, how much of an opportunity, you know, we may have, you know, for Chili's to really be, you know, a brand of the future from a physical asset perspective. 240 to 260 of CapEx, you know, where does that number go? How much of an opportunity do you want to take forward there? with the money that you now have to perhaps spend considerably more on the existing asset base. Thanks.

Thanks for the question, Jeff. So I'll start off with kind of our approach to improving the estate or accelerating re-images, and then I'll let Micah provide any color on the numbers and how we're thinking about that. You know, right now, you know, we really haven't done anything on re-imaging yet. So, we talk about, you know, food, service, and atmosphere. You know, most of the atmosphere work that we've done so far has been in terms of repairs and maintenance. So, that would be things like leaky roofs and bathrooms that, you know, needed assistance and any, you know, we replaced a thousand sticky tables that were during COVID damaged through the cleaning process of, you know, making sure things were really clean. And so, really just sprucing up the existing estate, but not necessarily re-imaging and taking it to the future of the new Chili's that we're building, right? That is going to be a focus for us starting next fiscal. So Jesse Johnson and Jim Fay, kind of our leaders, Jesse is our head of advertising and brand image, and Jim is our head of construction and in charge of the re-imaging. They are working very closely together to figure out what's that new next generation re-image prototype, and You know, our hope will be and our expectation is it will be done sometime, you know, early in next fiscal, and then we'll start being able to roll out roughly 100 buildings a year of re-imaging. And there's 200 right now that we think are like what we'd call prioritization, you know, assets that we want to get quickly because they are the ones that are much older generation. They could be not re-imaged in 20, 30 years, right? and are most in need of a re-image program, so that's what we're gonna focus on first, and then once we get that done, then I think you'll probably see more of a normal cadence Because the rest of the estate may not be in the image of what these guys are building, but it looks pretty darn good. Like, I don't go into that restaurant and go, I think this is brand damaging anyway, or this is holding us back from growing comps. It's just, you know, over time you've got to make sure you continue to update these things so that you don't get behind like we did before. So that's how we're thinking about it. I don't know, Micah, if you want to add any color on the dollars and how we're thinking about that.

Yeah, John, it'll be more information to come because we're still just really working on the whole scope and the cost. But... we're not going to be scared about adding that to the capital allocation plan, like the CapEx budget. So, you know, we've spent millions of dollars. We've invested millions of dollars on the operations side. We're investing in CapEx. And, again, a foundational foundation of our strategy is you have to invest in the business to grow it. You can't, you know, try to, you know, micromanage every single investment because then you can get nowhere. So all great points, and we think that's a key for us. as we move forward. And we'll ramp up as fast as we can, as fast as, you know, the system can digest it.

And, you know, I asked this, you know, obviously in the context of some quick service remodels that we've seen, you know, there's a scrape and rebuild package that's currently being talked about that's something like a million eight for a legacy quick service. You know, and obviously eating inside of a quick service restaurant isn't nearly as important as a casual diner. So do you have, you know, could you imagine over time that like a quarter of your units might be three or four million and a quarter, just like some number materially lower than that. Like, how are you kind of, you know, I mean, if you're willing to talk about it on this call or not, you know, just kind of the range of projects, you know, that we might be considering for Chili's over the next, I guess, year.

John, we'll consider it all. We actually have one of our first scrape and rebuilds that's happening right now. So we'll watch and see how that goes. And, you know, we have a lot of different markets, a lot of different prototypes out there. So, you know, we're open to all of it. And that's what we're looking at now.

Well, you're in a great position to consider all this, so congratulations on everything. Thank you.

Thanks, John. Your next question is from Brian Vaccaro with Raymond James.

Hi, thank you. Good morning. Kevin, you noted the continued strength in the guest experience. You're saying, could you update us on some metrics that you've given in the past, you know, GWAC percentage or anything else you have handy on that topic? And Sort of related to that, on the labor side, Micah, you mentioned adding some labor hours through the second quarter to sort of catch up to the traffic surge you've seen. Is there any way to frame or quantify sort of that catch-up investment or to think about the relationship between hours and traffic going forward?

Yeah, let me start with the first question, Brian, and then I'll leave it to Micah to talk about the catch-up on labor question. So essentially what happened in the quarter is in October, we got behind on on staffing for a variety of reasons the main one is that the volume really increased very quickly and by the end of the quarter we had caught up so what we saw was a little bit of a dip in scores in that first period of the quarter and then progressively things got better as we caught up on the labor equation so we actually ended the quarter um Last year on GWAP, we were at 3.5%. Lower is better, by the way. This year in Q2, we were at 2.9%, so that's a pretty significant drop. I mean, that number, when I started, the GWAP was over 5%, and now we're talking about getting sub-3, especially with the traffic increases that we've seen, so... These are our record numbers with the traffic increases, so we feel very, very good about the direction we're headed. The thing I talk about with the team is we can't get bored of continuing to improve those metrics because that's probably why we're winning right now. Marketing has done a great job of bringing guests in, but the reason why we're keeping guests is because the experience is really good and it's becoming a part of the rotation and consideration set. We're going to continue to ruthlessly simplify the operation. We're going to continue to make sure our technology is working very hard for our teams to reduce tasks that technology can do. And that's going to be our hallmark is, you know, is GWAP continuing to go down or not to hold ourselves accountable?

Yeah. So, Brian, and as far as, you know, specifics on the investments, this one is a little bit hard because the labor has ramped up so significantly. So, it's not necessarily that we're adding to the base model as we have to ramp up as traffic does. And so what I would tell you is, you know, we continue to add people where we think it makes sense and that we watch these guest scores. We watch, you know, how we're turning traffic through. And so we're a little bit in flux. I mean, high level, like I said, I gave some guidance on what I thought the full year ROM would be. I would say where we, you know, leveraged over 200 basis points of labor in the second quarter, I think you'd see about half that in the last two quarters of year-over-year improvement. But still, leveraging it, you know, investing in this labor, making sure the guests are taken care of as we ramp up and that they're going to come back.

All right. That's super helpful. Thank you. And if I could squeeze one more in on our advertising spend, Micah, I think you said the dollars were flat. I wanted to make sure you were referencing dollars there and not as a percent of sales. Am I interpreting that right?

You are. So the dollar spend was flat year over year. Another reason that helps with our restaurant expense in Q2. So the incremental spend that we have planned has now shifted to the back half of the year with probably 60% to 70% of the incremental spend happening in the fourth quarter. So that's where those dollars are.

Okay. And the dollar increase, I think originally you thought that would be up, if I'm right, $15 million to $18 million coming into the year. Is that still in that ballpark? Excellent.

All right. Thank you so much.

Your next question for today is from Christine Cho with Goldman Sachs.

Hi. Thank you for taking my question, and really a big congrats for the great quarter. You've had big progress in gaining tokenized data. But what are some of the next steps? There are some major areas of additional investments required as you further progress in the digital journey and deepen your consumer insight. Thank you.

Yeah, thanks for the question, Christine. So there are two things we're working on there. One, we've been using a third party to help us mine the data. It's expensive and very slow. So we have a new head of data leader, Alex Knight, that we hired last quarter. and he is trying to build out in-house capability to be able to mine the tokenized data. So that's going pretty well. I anticipate every quarter we're going to get stronger and stronger in building in-house capability to mine the data and make it more systematized versus something that's either expensive or takes a long time for our people to pull. So that's kind of point one. And then point two, what I've charged the team with is, we are not going to try to expand our loyalty program until we take the friction out of it for the guests and the team members. So, you know, when we deploy free offers, even with the free chips and salsa that you get every time you come in, as long as you're a loyalty reward member and put your phone number in, there's just a lot of friction with it. And so what ends up happening is the guest doesn't easily get their discount. They have to call a manager over. The manager takes their time away from being in the dining room or leading their teams. Eventually, we get it sorted out, and they get the discount, but the guest doesn't really feel great about that experience. The server and the manager doesn't feel really good about that experience, right? And ultimately, if we're doing this to drive loyalty, that's not driving loyalty or anything, right? So the direction I've given the team is let's get that friction out of redemption of MCR, or I'm sorry, by Chili's Rewards offers so that it actually is a loyalty-building experience, and then once that's fixed, then we can start driving it again. So I don't really have a timetable of when it's going to get cleaned out, but the mantra for the team is unless it's supermarket easy, meaning you can just put your phone number in and whatever discount you have in your cart comes out, I'm not that interested in continuing to drive it, and I'd rather just drive loyalty through improving the guest experience, the food, and the atmosphere. So more to come on that because I do think it's more upside for our business, but we've got to get that thing operationally ironed out before we start really growing it.

Your next question for today is from Catherine Griffin with Bank of America.

Hi, thanks for the question. First, I wanted to ask if some of the commentary that you gave on month-to-month comp trends, quarter-to-date trends, does that apply to Maggiano's as well? Did you see like a similar cadence? And then where does Maggiano's fit in terms of the full year expectations you talked about in terms of sustaining a level of comp growth.

You know, Mongeau's is in a different spot than Chili's, but their same store sales were, you know, pretty similar month to month as well. So, again, there were some holiday flips in there, but their trajectory is they're working on improving. And like Kevin said, they're kind of earlier in the turnaround until we have more specifics on them. But there was no wild fluctuations in their results.

Okay, thank you. And then just with the TikTok and social media virality having continued for a couple of quarters without giving away like any trade secrets, I'm just curious if there's a way you can contextualize the conversion rate of TikTok impressions into traffic. Is it something that happens immediately? Is there like a lag effect? Just want to understand to what extent you can forecast, you know, the impact of social media traffic. Marketing and virality may be a little bit in your control more than, you know, I might assume.

We don't really – we don't have any kind of, like, X amount of social media impressions equals Y amount of sales. Like, we just – I don't think anybody has that in the industry. We don't have it. And if someone has it, we're going to go find that capability and get it because that would certainly make forecasting a whole lot easier.

I mean, we do have – we do know we have positive buzz and we've seen, you know – traffic go up with positive buzz. So things like that. We know what our triple-dipper sales are. But it's really, I think the part of the story is it's all very consistent. It's not ups and downs. It's not peaks and valleys. It's a very consistent change in the business across all day parts, across lunch, dinner, weekday, weekend. So, again, it's a very consistent change that we're growing sales in all places of the business.

Thank you.

You're welcome.

Your next question is from Andrew Strzelczyk with BMO.

Hey, thanks for taking the question. I wanted to go back to the conversation around operations. You know, now you have the turbo chef that's in the numbers. You're making some incremental investments in food quality. It sounds like labor exited the quarter where you wanted. So I guess on the margin, it sounds going forward like this is more marginal or kind of incremental investment than anything chunky. Is there anything kind of larger scale that we should, that you're thinking about or considering given the strength of the traffic trends, even if it's beyond 2025 into 26, that whether from a proactive perspective or just to improve the operations as you continue to talk about investments?

You know, Andrew, we talk about investments all the time as a leadership team. And, you know, we balance on what's going to have the biggest bang for the buck and what can operations, you know, handle with all the changes. So again, we've gone through all our opportunities, and we think that, you know, Turbo Chef was a great one to accelerate, to improve food quality, to make the team members' job easier, kind of goes in the line of simplification. So right now, I mean, things can always change. If something great comes up, Kevin and I will evaluate it in the team, and we'll decide if we want to, you know, move or adjust in the business. But we feel we've done a good job of evaluating kind of the opportunities, and we've pulled up as many things as we can to continue the momentum in the business.

Yeah, I mean, the challenge is, like, we're learning about the business along with you guys, right? So when we see this influx of traffic, you know, then we're out in the restaurants trying to understand from the leaders, what more do you guys need to keep up with the traffic? And then we're deploying those things, like the Turbo Chef example, where I think if you had asked me six months ago, are you willing to accelerate Turbo Chef right now, I think the answer would have been, well, let's just keep updating it as conveyor belt oven die, right? and not worry about accelerating. And then when we get to two quarters of really accelerated growth and accelerated traffic trends, And the restaurant leaders are like, hey, we need the turbo chefs because we know what it does to the other restaurants that have them. And then that changes our point of view about that investment and accelerating it. So there's no line of sight right now to be able to answer your question and say, yeah, we know this is coming. But I do expect that if we continue to see accelerated traffic trends and if the business continues to evolve and we learn more about how to deal with these higher guest counts, There might be some more investments going forward, but there's nothing line of sight right now other than the normal stuff we talk about.

The good news is we're not having to hold back. So it's not like we have a great idea and we feel like we can't pay for it or implement it. Like anything that we think the business can handle and help the business, we're doing it. So we're in a great position to, you know, accelerate any expense that we think or any cost that we think is going to help improve food, service, or atmosphere, and we're doing it.

Yeah, and the other thing I would share on that is, like, we're just trying to be really, like, like judicious with where we deploy dollars because like everybody's got ideas, right? Like we're in a large system and the restaurants where they're in the country may operate a little bit differently, right? Even though we have a playbook. And so everybody's got perspectives and ideas on what we can invest in. And so we collect those all ideas and then we talk about them as a leadership team and figure out how do we both flesh these out the ones that have promise, right? So, you know, it's just, we're constantly getting more ideas than we can invest in. Not all the ideas are great. Some of the ideas are, and then, and that's how we're learning about the business. And then we're going and deploying the capital. So I think we'll continue. I mean, I think that's been working like using operator intelligence to drive our investment decisions has been working. And I think we'll continue to do that.

Great. Thank you very much.

Your next question for today is from John tower with city.

Great. Thanks for taking the question. Good morning. I guess I'd never heard of a cheese pull until my daughter showed me some of your customers doing it on social media. But it goes back to the question earlier related to your social media presence and just marketing in general. Obviously, you guys have had something pretty dramatic on social media platforms. And I'm just trying to think about longer term how you think about advertising dollars spend between the channels of Traditional media, have you guys kind of reached a saturation point on linear TV and perhaps connected TV and or frankly a level of efficiency in other mediums that just makes sense for you guys to kind of hold the line from this point forward on your core Chili's brand versus continuing to add dollars to it?

Yeah, you know, how the marketing team thinks about it is like they're setting the menu mix based on the brand priorities. I'm sorry, the marketing mix based on the brand priorities. And right now, we feel like the mix is where it needs to be. Like, there's no real reason to go change the percentage of dollars spent on TV versus social because the results are so good, right? So the only thing we're really thinking about now is should we be deploying more dollars to marketing given the return on investment that we're getting from it, right? And we're really looking at it in terms of as long as we continue to grow sales and we feel like the paybacks are there, we're going to continue to invest the advertising dollars earned through the growth of the business, right? And, you know, maybe the marketing team is slightly tweaking and maybe putting a little bit more against social, but, like, I don't think there's any major media mix changes that we're going to be doing in 26 because whatever they're doing right now is obviously working really good, and so there's no real reason to make a radical shift.

Yeah, we're staying pretty consistent as percent of sales, John. Obviously, as the business improves, that gives us a few more dollars to invest, but right now we're going to keep with the program.

Okay, makes sense. And maybe just pivoting a little bit in terms of the customer usage, I appreciate everything you've provided so far in terms of triple-dipper looking better, but maybe perhaps across day parts or weekends versus weekdays, how the business has been performing. Has there been any Relative standouts, obviously the whole business looks like it's doing well, but curious to get any more insights there.

You know what, John, that's what I love is when I look at all the pieces, all the pieces are growing. So every income level is growing, every demographic is growing, all the day parts are growing, off-premise, on-premise, all of it. So there's no real standout of, oh, it's one region or it's one day part. So that really gets back to we know that the fundamentals of improving food service and atmosphere is just improving the overall business. And so all these things are working together so that, you know, all pieces of business are getting better. And that's, again, why we're so confident that this is sustainable.

Got it. Thanks for taking the questions.

Yeah, thank you. Your next question is from Jim Sanderson with North Coast Research.

Hey, thanks for the question and congratulations on a great quarter. I wanted to go back to some of the comments you made on operational improvements, notably adding the turbo shaft. You're going to be removing the Wing Tower, how do these changes solve problems at the operator level? Meaning, is this a way to improve throughput? Is it a way to reduce wait times on peak periods? Does it accelerate throttling for digital orders? Just any feedback on how this translates into improved operations, given the visibility you have from store-level feedback.

Yeah, hey, Jim. It's Kevin. So it really depends on the item. So maybe I'll just use two examples so you get a flare for, like, how we think about these things. So let's take the HHS wings station, wind station for End Zone 1. So that's a pretty big tower. We've got a bunch of sauces that are housed there. There are bowls for every sauce. So, you know, if someone orders the mango habanero wings, through It's Just Wings or through Chili's, they'll take one of the bowls out, they'll put the wings in, they'll toss it in the mango habanero, and then they'll clean out the bowl and put it back into the station. The station is like, I don't know, five or six feet tall. It takes up a lot of space in Zone 1 where we're doing all the frying. And so that's an example where, hey, if we get rid of a couple of the sauces that that are offered on IGA, it's just wings and chilies, we can dismantle that station and just put bottles on the line and just have one, you know, just have a couple of bowls that stack on the line to be able to do this, right? When you take that station out of zone one, it literally gives you more space to then put another body in so you can body a weekend, right? So Friday night, Saturday night, Saturday lunch, where they actually need more people in the fry zone, you now have physical space to be able to do that, right? So think about that example as about there's less cleaning time, there's less things to clean to get rid of the station, there's faster throughput because the clog right now in throughput is zone one because of all the triple dippers that we're selling and all the french fries that we're selling. So being able to put in additional bodies certainly dramatically speeds things up, right? So that's an example where less equipment to clean, more space to put a body there, and then faster throughput. So that's one example. You know, another example we talked about on the call was just using steak weights, right? So a steak weight will be able to cook, depending on the cut of steak, a whole lot faster. It doesn't impact the taste or the juiciness of the steak whatsoever. It literally is just a way to cook a little bit faster because you're cooking both sides of the steak at the same time with a hot piece of metal, right? So... These are examples that now increase throughput, right, and will make it easier for the zone two cook to get all the things out faster, right? So it really depends on the item. But what we're doing is we're sitting down with the teams and we're understanding what are the common things that they need help with. We're taking those ideas back to our leadership team and we're prioritizing and we're getting after it. And I think that's having huge impacts. I mean, if you talk to a general manager in a random Chili's, they're going to tell you, even with all the increased volume, it's a lot easier to run a Chili's right now.

Understood. Thank you very much for that. Just a quick follow-up question looking at your promotional plan adding fajitas. Should we expect you to really leverage social media influencers on Instagram, et cetera, to support that launch in tandem with the TV advertising for the three for me? Is that kind of the way to look at the marketing plan?

Well, I don't have the marketing plan for fajitas yet. There will be some type of work that they do. It's certainly not going to be on TV. When we have that, those plans, we'll certainly share them out. But I don't have a line of sight other than the merchandising plan and the operational and food fixes that we're doing with fajitas.

Understood. Thank you very much.

Thank you.

We have reached the end of the question and answer session, and I would now like to turn the floor back to Kim Sanders for closing remarks. Thank you, Holly.

That concludes our call for today. We appreciate everyone joining us and look forward to updating you on our third quarter results in April. Have a wonderful day. Bye-bye, everyone. Thank you. Thank you.

Thank you. This concludes today's conference call. You may disconnect your phone lines at this time and have a wonderful day. Thank you for your participation.