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

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Brian Vaccaro: Hi, thanks and — thanks for taking my questions and good morning. Kevin, you mentioned the low-end consumer not coming as much, and I think you said that was the case even before the changes on pricing in Three for Me. And perhaps that’s somewhat due to the macro, but I’m curious how much of that you think could be due to reduced awareness since you were off air during the pandemic? And do you have any data or studies on that that you could share as we try to think about the potential benefit as you bring advertising back online?

Kevin Hochman: Yes. We — the only data that we have on it, we haven’t done any like specific studies. The data that we have is a top of mind awareness. So in marketing terms, top of mind awareness, especially in the restaurant industry is really important because you’re always in the market for food. Like you’re always — you always got to eat, right? And then in this new world where a third of our businesses transacted digitally, you’re literally always in the market, you could always buy Chili’s, whether you’re at home or you’re out shopping or you’re at a restaurant, right? So top of mind awareness in other words, when I’m hungry and I think about the restaurant that I’m going to dine at, it’s critically important that Chili’s is a part of that consideration set because if you’re not then you have no chance of actually closing that, that guest, right?

The top of mind awareness is what we’re going to be driving for when we think about the advertising that we’re going to put on TV. And that’s why we’re focused on; we think it’s a relevant message of abundant great value at a great price point. In addition to making sure that that advertising is unmistakably Chili’s using some of the things from our past as well as the things that are unmistakably Chili’s like our logo and some of the jingles and things like that, right? So what I would tell you is, we have seen dramatic declines in top of mind awareness throughout the pandemic as we went dark. We would expect those trends to start moving in the right direction. It takes some time for the advertising to take hold and you just start seeing a move in those in that data points.

As far as like using that data to give you an estimate of the traffic lift, it’d be very difficult to do that right now just because we’ve been off air for so long. Once we have more data on what the TRP is mean in terms of incremental traffic, we’ll have a better idea of the impact of putting an advertising back on.

Brian Vaccaro: Is it reason or fair to assume that that Chili’s top of mind awareness has dropped relative to peers more than others is a lot of brands have come off air except for one large one that, that I’m aware of in terms of national chain. So is — has it — has Chili’s underperformed or come down more on that metric? Can you tell us versus 2019 anything along those lines?

Kevin Hochman: Yes. I mean, well, we will — our top of mind awareness, this is publicly accessible data with the right research companies. Our top of mind awareness has declined versus pre-pandemic. And we’ll share some of that detail with you at the June Investor Day as we talk about our marketing and advertising strategy. But it’s clearly the biggest opportunity for this business and from an advertising standpoint is just to get back in the consideration set in top of mind for customers so that we’re part of their consideration set of where they’re going to eat.

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