Brinker International, Inc.

Good day and welcome to the Brinker International Earnings Call for Q1 Financial Year 2026. 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. Kim, the floor is yours.

Thank you, Paul, and good morning, everyone, and thank you for joining us on today's call. Here with me today are Kevin Hockman, President and Chief Executive Officer and President of Chili's, and Micah Ware, Chief Financial Officer. Results for our first 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 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 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 share insights from our first quarter and our outlook for the remainder of fiscal 26. Q1 Chili's same-store sales were plus 21.4%, outperforming the casual dining industry by 1,650 basis points. This strong result was lapping a plus 14% in Q1 last year for a two-year compounded comp of plus 39%. Our Q1 sales result was driven by traffic increases of 13% versus a year ago, and Chili's has now beat the industry the past eight quarters on traffic, as well as completed our 18th consecutive quarter of positive same-store sales growth. I'm so proud of our Chili's team rolling industry-leading comps from Q1 last year with even more industry-leading comps in Q1 this year. World-class marketing and brand building is bringing guests in, and continued improvements in food, service, and atmosphere are bringing guests back. And that momentum feels great. Our food and hospitality initiatives in Q1 continue to deliver momentum for the business. The ribs upgrade has been a success, with the ribs business now running 35% up in sales and significantly improved profitability, which is also up 29%. Food grade scores on tickets with ribs are up, and guest feedback has been very positive on the taste. On the beverage innovation front, the frozen Patron margarita platform is now selling two times the units of the old platform, despite a higher price point for the more premium ingredients. Q1 new items are winning and helping progress our food grade scores in addition to growing sales. On the hospitality side, ongoing simplification, removing friction from our team members and managers, and the north of six initiatives are continuing to improve guest experience scores. Our main metric for experience, guests with a problem, is again at an all-time low at 2.1 versus 2.7% last year in Q1, with food grade and intent to return scores also at all-time highs. And on atmosphere, our first four remodel pilot restaurants should be completed by the end of this quarter, and we will start getting a read on how they are performing. The modern Greenville prototype is about making a Chili's as Chili's a Chili's can be by going back to the first Chili's ever built on Greenville Avenue and getting back to what makes Chili's like no place else. Given what everyone is seeing in the industry right now, I thought it would be helpful to talk a little bit more insight on what we're seeing at Chili's with the consumer. I'm going to share what we are seeing with the consumer household income levels and some new token data on Chili's guest behavior. Chili's continues to grow sales across all households of all income levels. And while others in the restaurant industry are seeing households with lower income pull back, we are seeing just the opposite. Our customer base is very representative of the U.S. consumer across all income cohorts, but our cohort growing the fastest is actually now households with income under $60,000. it's clear that the Better Than Fast Food campaign we've been hammering over the past two years has positioned Chili's as an important value leader in the industry, and we are gaining market share with low-income households while others are reporting softness with that group. I also wanted to share some new capability mined from our tokenized data. We now have sufficient data to understand as more and more new guests come into Chili's what is happening to guest frequency over time. The intent is to have a better understanding of the sustainability of guest traffic We are bringing into the business via TV and social advertising. We track each group of monthly customers separately and what their visitation and purchase behavior is over time. For example, we have a July 2024 cohort who represents all of the guests that came into Chili's during the month of July 2024, whether they are new to Chili's or regular guests, and we can track how often they have come back over time. We can do the same analysis with the guests who came in in August 2024 and get the same data about that group. We then look at frequency of those groups over time to understand how well we are retaining them, which also tells us how sustainable Chili's traffic trends are. So here's what we learned tracking monthly cohorts. For both new and regular guests, trip frequency is staying very stable regardless of the cohort. What this means is our restaurant experience is bringing guests back and retaining the traffic over time versus bringing them in once and having them not come back to Chili's. This data, along with our quarter-to-date sales and traffic trends, give us confidence we'll be able to roll over the Q2 plus 31.4% sales growth and the plus 19.9% traffic growth from prior year. Now I want to give an update on Magianos. Chief Operating Officer Rich Kissel and I have had the opportunity to go deeper into the business, and we have a better understanding of the opportunities to get Magianos stabilized and growing again. The turnaround starts with a better understanding of Magianos' positionings. which when it was growing at its best, was about abundant and scratch-made Italian-American favorites with warm and attentive service, and then putting those pieces in place to deliver on that positioning consistently. The Back to Maggiano's plan has four pillars, getting back to classic recipes and scratch-made Maggiano's guest favorites with the abundance that differentiates Maggiano's, improving service levels and speed of service through new labor deployment and simplification, as well as the elimination of tasks that don't benefit the teammate or the guest, Three, focusing repairs and maintenance on guest-facing areas while re-imaging the balance of the estate. And four, getting pride in ownership back with our Magianos management teams. We recently concluded the annual Magianos conference in Orlando with the brand's top 150 leaders, and the response to the new strategy and the green shoots of the execution plan was very encouraging. The Magianos leadership response was, we need to get back to Magianos, and many specifically gave me the feedback it felt like they are now being listened to. I look forward to providing updates on how the Magianos turnaround plan is progressing on future calls. Our continued momentum at Chili's is proof our strategy is working and gives us confidence in our ability to lap our high sales comparisons this fiscal. I especially want to thank our Chili heads for their hard work and commitment to what sets Chili's apart, providing great hospitality and delicious food and drinks in a fun and friendly atmosphere. I also want to recognize our Magianos teammates for their engagement in our Back to Magianos turnaround plan, and their understanding of the change in strategy and plans. Their leadership and positive attitude and passion for returning the brand to its roots is exciting to see and I know will lead to better results in the long term. Now I'll hand the call over to Micah to walk you through fiscal 26 first quarter numbers. Go ahead, Micah.