Ruth’s Hospitality Group, Inc. (NASDAQ:RUTH) Q4 2022 Earnings Call Transcript

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Brian Vaccaro: Okay, great. And then on labor, if I could just ask, Kristy, I think you said labor was up about 200 bps year-on-year, but favorable versus pre-COVID by about 100 basis points. Do you — I think in previous calls, you’ve expressed confidence that you could sustain, call it, 200 basis points of labor favorability. Do you still think that’s achievable? And then I guess the other question is just on wage inflation. What are your expectations? Are you starting to see that moderate? I think you said up 9% or 10%, 9.5% in the fourth quarter. What are you expecting on wage inflation through 2023? Thank you.

Kristy Chipman: Yes. So we’re 193 bps better versus 2019. And our 200 basis point guide was always versus 2019. So, we’re going to keep that efficiency. But clearly, our ability to take price to offset wages is going to flow-through and impact our basis point change for this year on labor. I think we’re in a good place where we feel pretty satisfied that the pricing we’re taking can offset a lot of the wage inflation we’re going to see. But we are still expecting mid to — probably mid-single-digit levels of inflation in both hourly and management wages as we work through the year.

Brian Vaccaro: Okay. So that helps. That clarifies. So the total labor was down 190 bps. It was the management labor you were saying that was down to 100. Perfect. Okay. Thanks so much.

Kristy Chipman: Thanks Brian.

Operator: The next follow-up question comes from Todd Brooks with Benchmark. Please proceed.

Todd Brooks: Hey, thanks. Just a couple of quick follow-ups, if I can. I know that we’ve been talking about Manhattan is one of the three laggard markets, but can you walk through the impact of closing that store in May? Just how should we think about it? What type of volumes or was that? What type of hit should that be to revenues for back half of the year?

Kristy Chipman: The volume — the post-COVID volume, we were giving it to you in percentages before. I’d say it’s about an average volume restaurant. So, $6 million to $6.5 million overall Obviously, there’s — I’m not going to give the exact ROI number that, that one did, but you can do the math on what we give from a restaurant operating income perspective there.

Todd Brooks: Okay, great. And then I wanted to follow-up. We didn’t touch much on the consumer and how they behave across holiday, how they built checks attached rates on apps, desserts, alcohol, any changes in behavior now? And as a follow-on to that, any color you can give us on gift card sales year-over-year, if that’s changed or accelerated at all? Thank you.

Kristy Chipman: So from a check perspective, we were still seeing some trade-offs into more apps, higher cost of beef, et cetera. I think that has moderated a bit from what we were seeing earlier in the year, but adding size, et cetera. So that’s still a positive to us from a check perspective overall. From a gift or perspective, we were up low-single-digits from 2021.

Todd Brooks: Okay. Okay, great. Thanks.

Operator: Thank you. At this time, I would like to turn the call back over to management for closing comments.

Cheryl Henry: Thank you, everyone, for joining the call this morning and for your questions, and we look forward to updating you again soon.

Operator: Thank you. This does conclude today’s teleconference. You may disconnect your lines at this time and thank you for your participation, and have a great day.

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