Brinker International, Inc. (NYSE:EAT) Q4 2023 Earnings Call Transcript

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We have no plans right now to put it in TV advertising, we want to see what happens when we put IJW into the business and does it, does it have some offtake the fact that it would make sense to put on air, but we do think it’s going to drive the business at a minimum, a little bit, right? But it could be a bigger thing, depending on what we see with the CRM program results. So at a minimum, it’s going to be a trade up, but we do think it could eventually drive some traffic especially during the sports viewing season, which really starts at the start of football.

Joe Taylor: One of the things I really like about the change too, is going to be the awareness of IJW that it’s going to bring to the table. That’s a brand that – well, from a virtual brand standpoint did well, it’s awareness has basically existed on your third party platforms. And so, now you’re going to start to have some brand awareness being front and center to the Chili’s population as we kind of move forward. So, it’s a nice way to expand that awareness without the cost associating of marketing a third-party platform.

Kevin Hochman: Yes, I mean, the best way to describe it would be, if you took like an upstart brand and said, okay, you can now have the distribution of Chili’s. And you can have access to over 11 million CRM members, like is that something you’d be excited about? And the answer would be yes. Like that is a huge amount of scale that you’re bringing to a brand that is relatively small in the grand scope of food, right? That we think that could have some significant impacts to the It’s Just Wings businesses.

Eric Gonzalez: Got it and then maybe just on the off-premise business. I apologize if I missed it, but did you talk about what the mix was in the quarter and maybe if you could talk about the breakdown between carryout and delivery and whether you’ve seen any shifts there?

Mika Ware: Hi, Eric, it’s Mika. We’re still hanging in that same range as last quarter, 28% to 30% for the brand, and then we have about an even split between carry out and third party delivery.

Eric Gonzalez: Got it, thank you.

Operator: Your next question for today is coming from John Tower with Citi.

John Tower: Great, thanks for taking the question. Just curious if you could get into the thinking behind on the one hand, you’ve got a lot of initiatives going on at the company to drive some traffic. But on the other hand, you’ve got food cost deflation running through – deflation at the moment. And I guess for the year settling out at about 1% or so, and mid-single digit or so wage rate inflation. So can you talk about what the inputs are on year-end in thinking about taking the pricing of that high single at the start of the year, kind of flattening out or settling out at about mid-single digit. It just seems that at this point in time it would be great period for you to lean into kind of that value offering that Chili’s has with the consumer and an opportunity to take price – to take, take some traffic from competitors, but instead, you’re taking a little bit more pricing. So how do you balance that I guess?

Kevin Hochman: Well, the way we’re thinking about it. We missed a lot of price during the pandemic, we’ve caught up a little bit versus the industry, but based on the competitors that you cover, I think you can figure out how much we missed over a three year period. So, part of this is, we got to get an equilibrium in our business so that we can make the necessary investments, both in the facility, labor and advertising, to have a growth business going forward, right? So part of that is that we missed a lot. And the second piece I would say is, I think we’re going to be, make sure that we’re really sticking to our guns on advertising value. And so that we get credit for value. And value it comes in two ways. One is there’s attractive price points for 3 for Me, and talking about the abundance of food.

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