Chris Monroe: Yes, Andrew, it’s Chris. Look, our operating cash flow and our balance sheet are major advantages for us. And so we are going to continue to take this balanced approach over the long haul like we have. And you saw the increase to the dividend that our Board approved with Jerry, and that we’re happy to have that out there. And we’ll look at share repurchases, obviously, the first place we go is to think about bringing in the dilution. But as we have opportunities to continue to invest, we’ll look at that first. But then if there is cash left over, we’re going to be looking at continuing the share repurchase program.
Andrew Strelzik: Great. Thank you very much.
Operator: Your next question comes from the line of Gregory Francfort from Guggenheim Securities. Your line is open.
Gregory Francfort: Hey, thanks for the question. I had two quick ones. The first is just I know you answered the question on capacity earlier, but I’m curious your appetite to maybe accelerate unit growth beyond the kind of 5% to 6% range. I mean, you guys are running really healthy traffic, and I’m wondering what would it take to maybe expand that pace of unit growth a little bit?
Jerry Morgan: Well, thank you. It’s important for us to keep a cadence of how many openings that we can do a year and be balanced in our approach, and we have to do it right. We have to get every store opened with incredible energy. It takes a lot of folks inside, so we like our number of what we’re doing for Roadhouse and the other two brands. So you’ll probably see us stay very close to that. If we get an opportunity to increase a couple here and there, we might take that opportunity. But I don’t think we’re going to change our overall strategic goal or game plan on growth.
Gregory Francfort: Got it. And then just may – I may have missed it earlier, but any thoughts on where the turnover environment looks like or the quit rates or what that might be doing to your training and ability to train workers? Any thoughts on the labor market that would be helpful?
Jerry Morgan: Yes. Thank you. We feel really good. We put a lot of work into it in the last couple of years, and we look at it three levels, our managing partners, our managers and our Roadies. And all three of those indicators are that turnover is coming down, which also means that we’re getting more reps and running these shifts at a higher volume, so all of those indicators are pretty solid. There are folks, applicant flow has been pretty solid for us. So from that standpoint, the work and the effort that we put in has really benefited. And I think we’re creating an environment where our employees want to work and be a part of something that’s really special. So I believe it’s a very positive environment out there and we are benefit. The longer our folks can stay around and we keep Roadi nation happy, they’re going to keep taking care of us.
Michael Bailen: Winners win.
Jerry Morgan: Yes.
Gregory Francfort: Thank you, guys.
Operator: Your next question comes from the line of Brian Vaccaro from Raymond James. Your line is open.
Brian Vaccaro: Hi. Thanks and good evening. Just circling back on the topic of table turns and Roadi pay, et cetera, and I guess tying it into comps a little bit. Obviously, your comps have been impressive for a long time now. But I’m curious, as you dig into your comps a little bit, are you seeing outsized growth or even maybe a little bit of an acceleration in peak demand periods that you might be able to tie back to table turns? Or more broadly, are there any other day part or regional differences in your recent trends that might be worth highlighting?
Michael Bailen: Yes. Hey, Brian, it’s Michael. Good to hear from you. Some of that is a little difficult to parse out, but I can tell you geographically, we are seeing similar results across the country. By age of our restaurants, we’re seeing similar results. And then as far as the day part, we are seeing a little bit more strength earlier in the day and into the power, what we call the power hours, that 6 to 8’clock time frame. So whether that’s coming from the technology investments, hard to tell you. But we’re certainly doing everything we can to give that guest a good experience, give them the opportunity to get in and get out at their pace, and I think that’s what we’ll continue to focus on going forward.
Brian Vaccaro: All right. That’s helpful. Thank you.
Operator: Your next question comes from the line of Brian Harbour from Morgan Stanley. Your line is open.
Brian Harbour: Yes, thanks. Maybe just one from me, Michael or Chris, what – do you have any view on kind of G&A this year, either in growth terms or percent of sales, as you think about leverage there?
Michael Bailen: Hey, Brian, it’s Michael. Yes, G&A as a growth company, we’re going to continue to invest in our people, in our systems. I think our philosophy remains the same, that we would like to see those G&A dollars grow at less than revenue growth and continue to see if we can get some leverage there. But we were at 4.3% of revenue in 2023. That’s come down significantly from where we are. So we’ll see what happens in 2024. I can tell you that you probably would see in Q1, I think we have the most opportunity to not see a lot of increase, but then after that you will start to see some increase. Again, being a 53-week year, you could see us having the need to accrue for additional bonus compensation. And again, you would then lap that into 2025.
And we talked a little bit, a bit about some of the equity compensation enhancements that we’ve made and that’ll impact the second half of the year. So I think you’ll continue to see those G&A dollars grow and maybe it’s not a year where we get a lot of leverage. Some of that will depend upon what the top line ends up doing. But yes, definitely investments to be made in the business.
Brian Harbour: Thank you.
Operator: Your next question comes from the line of Jim Sanderson from Northcoast Research. Your line is open.
Jim Sanderson: Hey, thanks for the question and congratulations on a great quarter. I wanted to go back to the mix issue. It seems to me that’s improving, not as negative as it has been. Do you expect that to pretty much iron itself out, so to speak? And is there an opportunity to actually see that become an upsell opportunity to make that positive as we go into the back half of the year?
Michael Bailen: Hey Jim, it’s Michael. I mean, you are correct. Q4 with the 70 basis points was a little bit less than what we had been seeing the last couple of quarters. There were a few things in there that benefited us in the fourth quarter around the holiday time. You see maybe an increase in bread sales and the such that can offset some other areas. It’ll be something we’ll be watching here into 2024 of whether that trend continues. Entrees again if we continue to see people trading into us and growing our traffic. But maybe they’re hitting the value side. You could have a little bit of negative mix there and that alcohol is a little bit of a question mark, I’ll be honest with you. Will that flatten out or just kind of the societal trends right now of. I think a little bit less alcohol sales may stay with us. That’s just one we’ll have to wait and see what happens on.
Jim Sanderson: Okay, so probably a little bit of a headwind going forward, just not as bad. Is that the right way to look at it?
Michael Bailen: It’s a hard one to fully answer, but I think in the economic – consumer environment we’re in, it would not surprise me for it to be a little bit of a headwind. But again, it’s one that until you really see what’s going on, it’s hard to fully predict.
Jim Sanderson: All right, understood. Thank you.
Operator: Your next question comes from the line of Rahul Krotthapalli from JPMorgan. Your line is open.
Rahul Krotthapalli: Thanks for taking my question, guys. I just wanted to follow up and expand a bit more on Bubba’s. Can you discuss the store margin growth year-on-year and help us get some confidence in the longer-term store margin profiles for this concept? Is there a potential for this to be at or above Roadhouse? Can we expect an inflection at some point, or are there any structural costs like prime cost for this concept lower versus Roadhouse as we go forward? And I have a follow-up.
Michael Bailen: Hey, this is Michael. I can answer some of that, but I’m probably not going to give you all the information that you’re maybe looking for. I can tell you we feel very good that Bubba’s can generate those mid-teen returns that we’re looking for. We believe Bubba’s can generate a very strong restaurant margin. Your point of can they be in line with Roadhouse if they was doing similar sales volumes? Yes, absolutely, that is possible. But the reality is Roadhouse performs at a higher level than Bubba’s and a higher level than most restaurant concepts. So that is going to benefit Roadhouse from a margin perspective. But the menu items that we have at Bubba’s would lend itself to a very strong margin as compared to Roadhouse on similar volumes. I think that’s about as far as we’re probably going to go on that one right now.
Rahul Krotthapalli: That’s helpful, Mike. Thanks for that. And on the follow-up, I know you guys talked about having a total 900 store [indiscernible] for the company as a whole. And I think like Roadhouse was targeted at 700 to 800 over time. I know you guys discussed a lot of new like digital kitchens, like new store formats and whatnot. I’m just curious if there is an updated thought on this number and how you are looking at this going down the line?
Jerry Morgan: Yes, thank you. We believe that’s a great target for us. We adjusted that, I believe, just a little over a year ago after a lot of research and just thinking about our business going forward. So there’s no adjustment to that number. Now, we’re still focused on being responsible to all of our partners out there, but we believe we can get to that number.
Rahul Krotthapalli: Perfect. Thanks, guys.
Jerry Morgan: Thank you.
Operator: Your next question comes from a line of Jon Tower from Citigroup. Your line is open.
Jon Tower: Great. Thanks for taking and hanging in there. Just real quick, first, on the G&A side, the grant changes that you’re talking about in the second half of 2024. I’m assuming those are not one time in nature and something that will carry forward into 2025. So just wanted to first confirm that.
Michael Bailen: On the – hey, it’s Michael. On the G&A side, those are a little bit more one time in nature, it’s really an acceleration of the grant. So we will still be expensing grants that we’ve been given quarterly over the last several years, and we’ll now be pulling up and granting all at one time some grants that would have been happening over the next several quarters. So we’ll feel that one time in Q3, Q4, and then some into the beginning of next year. The majority of it will then not have an impact on us after that.
Jon Tower: How about the labor line that you had mentioned earlier as well?
Michael Bailen: The labor line is more of – is not as much one time in nature. While you do have that acceleration going on, the other enhancements of us increasing the amount of grants to some store level employees is part of it, but also including additional manager levels in the granting of equity compensation. So that is one that will stay with us going forward.
