Katherine Griffin: Hi, thank you. This is Katherine Griffin on for Sara. First, I wanted to ask just about the kind of casual dining, maybe Italian category specifically. And as it relates to Carrabba’s, just can you talk about any sort of additional sales layers, whether dayparts, menu items that you’re contemplating in order to catch up with some of the public company peers that seem to be outpacing the brand? Thank you.
David Deno: Well, I think Carrabba’s is doing quite well. So I’ll take — if you don’t mind, a little exception on that. So I think we have a lot of white space for development. And I think we got to be careful about adding menu items in complexity in the restaurants because we want to continue to drive the service and drive it forward. But we think there’s white space in development. There’s a chance to continue to improve our operating metrics. There’s a very strong off-premises business there. There’s another sales layer in our catering business, which is very easy to do because we can prepare that food in the morning and get that ready to go for our lunch business. So that sales layers there. Continued innovation in the restaurants with Carrabba’s is there.
Our off-premises business, which is doing so well is there. And then our new units in white space that we have with Carrabba’s is going to be also an opportunity for us. So it really is performing well and is a growth vehicle for us going forward.
Katherine Griffin: Okay, thank you. And then I guess maybe just a follow-up then on Carrabba’s. Just as we think about sort of the return to normal seasonality trends, what does that mean in terms of your expectations for Carrabba’s catering business, this holiday season?
David Deno: That is certainly our hope. We’ve tried to incorporate that in our guidance, but we are very — without getting ahead of my keys here, we’re very bullish on what the catering business and what the off-premises looks like at Carrabba’s. And we’ve seen sales levels that are just terrific. So it’s early days. I don’t want to get ahead of it, but the team has done a great job growing that business.
Katherine Griffin: Thank you.
Operator: [Operator Instructions] The next question comes from Brian Vaccaro with Raymond James. Please go ahead.
Brian Vaccaro: Hi. Thanks, and good morning. I guess I wanted to start on Outback specifically. And it seems like the brand’s traffic relative to industry trends softened a bit in the third quarter. I guess it depends on what indices you want to compare to. But would you agree with that assessment? And if so, I guess curious what you would attribute that to? And can you also just clarify on October? It seems like the year-on-year casual dining comps have improved by, say, roughly 300 basis points or so versus September. Has Outback seen a similar level of sequential improvement versus September?
David Deno: Yes, I will answer the second question. We don’t want to get into monthly comps per se. But again, we have seen a nice trend change in October, and it’s incorporated in our guidance. As far as Outback goes, they do overlap — and this is where we’ve really got to be careful in managing this brand for the long term. They do overlap with some competitors that have had some pretty significant discounting and promotions. And we do not want to offer some of those deep discounts to drive traffic. We’d rather get back to some of the things we talked about earlier in the call in driving great service, great food at a great price point, and we want to offer some very interesting LTOs like the one we have right now. But at the same time, to go into some deep discounting, Brian, I think, for the short term, to make some short-term goals would not make a lot of sense. So we’re going to focus on the things that we talked about today.
Brian Vaccaro: Okay. All right. Thank you for that. And Chris, on the marketing spend, what was the marketing spend in the third quarter? And could you ballpark the level of spend you embedded in your fourth quarter guidance?
Chris Meyer: Yes. So if you look at — so marketing was up about, I think, $2.5 million in Q3 put us at about $31 million on quarter. Q4, we’re not going to quantify the amount that we are going to increase the spend, but I think the base for Q4 is about $24 million from last year.
Brian Vaccaro: And the $2.5 million, is that up year-on-year?
Chris Meyer: Yes, year-on-year, and that’s primarily in the U.S., Brian, and there’s actually an additional up. There’s a digital increase in Brazil, but $2 million of the $2.5 million that we see here in the U.S. in terms of increased marketing spend is Outback. And then there’s another couple of million dollars in Q3 that Brazil was actually up year-on-year.
Brian Vaccaro: Okay, thank for that. And Dave, you just sort of mentioned it for — but more broadly, I think you’ve increased the spend through the year at Outback like you just said in the quarter and even maybe in Q2, but you’ve increased the spend and the traffic doesn’t seem to yet be responding. So I guess what gives you confidence that a higher level of spend can break through, so to speak? And I understand you don’t want to get into deep discounts, but is part of the answer that you need some price levels on certain LTOs to move a little lower to gain traction in this current environment? It seems like your LTOs have maintained upper teens, if not into the 20s. And is that just too high of a price point in the current environment?
David Deno: We’ve got a great steak offer right now for $16.99, which we think holds a lot of promise, and has been tested well and researched well. And we have other ideas like that, that we want to spend behind. And importantly, when you couple that with the food investments we’ve made and the service that we’re going to continue to drive — service improvements we’re going to continue to drive, which we’re seeing, that will help drive traffic, but over the long term. But we have taken a look at some of our LTOs, Brian, and got into those — that kind of price point I’m talking about.
Chris Meyer: Yes. And the only thing I would add to that is that just in terms of deep discounts, and again, you can still use LTOs and you can use price points and LTOs. But I don’t think we believe that deep discounting is where Outback plays in the spectrum of casual dining. It’s a steak-centric model, higher price points. It doesn’t lend itself necessarily to pursuing a customer cohort that’s heavily motivated by couponing. We’ll use the LTO strategy, like Dave said, to keep value front and center, some windows may be more aggressive than others. But as a general strategy, we’re focused on maximizing the price value equation, like Dave said, through exceptional food, service and ambience at a price point that our guests are comfortable with.
Brian Vaccaro: All right. Great. And then last one for me, just on the new tech and equipment package rollout I wanted to confirm, is that now rolled out to all Outbacks at this point? And could you elaborate on how it’s benefiting operations and maybe quantify any of the important metrics like ticket times, table turns, cost savings you’re seeing in some of the stores that are fully ramped on it and efficient?
