Brinker International, Inc. (NYSE:EAT) Q2 2023 Earnings Call Transcript

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So just some of the data we have 24% less Three for Me meals that are being purchased per day. Our per check average on Three for Me purchase is up $1.38. And as I said in my prepared comments over more than half of the Three for Me menu is actually moving at higher price points, the $13.99 and the $15.99 price points. In fact, over two-thirds are moving at that. So net what we’re seeing is the customers that continue to come are accepting the price increases. And the good news is our value scores this quarter actually ticked up, which would be surprising given the price increases. And we think that’s because the service levels have improved, right? The idea of value is not just price point, but it’s also what you get and how consistent it is.

So that’s how we’ve been seeing the guests, the guests that continue to come are willing to spend more. And the — both the service levels have improved as well as our value scores.

Dennis Geiger: I appreciate that’s helpful.

Joe Taylor: Dennis, the only thing I’d — the only thing I’d add to that Dennis would be a little insight as to what the menu price increase. You’re looking at obviously year-over-year numbers at that 10% range. The actual menu increase that we took in October was about 4.25. So again, it’s the sequencing and frankly, I’m not sure that a lot of guests look back a year what did — a lot of them are looking to what did I see on my prior experience. And I think that 4.25 is probably more actionable. If you wanted to think about how they might react and so far the reaction has all been pretty favorable.

Dennis Geiger: That’s very helpful. Thanks, Joe. Just one more, Kevin, you spoke to driving — focus on driving traffic share gains with Three for Me and the advertising coming up. Just curious if you could speak to what you’ve seen maybe what you saw in the quarter or even in January from a market share perspective. I don’t know, also if it — if you’re kind of able to frame up the importance of driving market share relative to profitability, and perhaps you can get both, but just any comment there would be great. Thank you.

Kevin Hochman: Yes. I can speak at a very high-level. I don’t have like switching data in front of me, but from a high-level, we grew — during the quarter, we believe we grew dollar share. So the amount of dollars versus the market based on what we see in black box to map, we believe we lost a little bit of traffic share. And as we said in the prepared comments, and we’ve talked about this is the shedding of some of that unprofitable traffic and we’re going to continue to monitor as obviously we don’t want to lose traffic. But it is something that we expected to happen, especially as we got out of some of the deep discounting coupons that we mail via e-mail. We know those customers were getting freebies in addition to layering on our lowest price point on Three for Me. And as we’ve shedded those customers or some of those customers, we have dragged a little bit behind the industry on traffic, but from a dollar standpoint, we believe we’re growing versus the industry right now.

Dennis Geiger: Great. That’s helpful.

Joe Taylor: And Kevin, I would say relative to the competition, our positioning improved as we went through the quarter in discussing our relative position with the folks that kind of monitor the overall industry, both brands really performed in December at the top of the heat. They were two of the highest performing brands in the competitive sec for that, that period. So nice relative performance as we move through the quarter.

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