Nick Setyan: Can we just hone in on the Kona brand and the negative 7% comp? And I guess, what’s driving that, first of all? Is it just tough compares, particularly when you think about the pricing that’s in there, so negative double-digit, presumably transactions? And then maybe just how things have trended thus far in Q1 given the industry strength across almost all categories? And then just kind of internally how you’re thinking about the Kona comp as 2023 progresses?
Manny Hilario: Yes. I mean so there is no presumed double-digit traffic in Kona in the fourth quarter. I think they are in the mid-single digits on the traffic down. So — but the reality is for the fourth quarter for Kona Grill is that we were going up a very strong comp in 2021. As you may recall, we were up 34% in the fourth quarter for Kona Grill relative to 2019 which was pre-COVID. So I would say that if I had to evaluate Kona Grill’s comp is that we were, if not best, one of the best in class for casual in the fourth quarter last year, maybe ex Texas did very, very well. But I would say we would be top of industry. And then this year, obviously, we’re going up against a tremendous amount of excitement from that in the prior year.
And so it was just a very hard lap this year. As I look at 2023 for Kona Grill, I’m very encouraged with the start of the year. As a matter of fact, for quarter-to-date, Kona Grill is relatively flat year-over-year and on the same-store sales. And then we have some strong performance from the new unit at $115,000. I think, $115,000 a week for Kona Grill is actually a very good result for the industry. So as I look at Kona Grill for the rest of 2023, particularly the quality of the new sites coming out, I’m looking for a fantastic year for Kona Grill this year and as well as if I look at the margin in the fourth quarter, we’re up in the mid-double digits. I think we’re at 13.1% for the quarter on the margin. So I think that the concern coming from the third quarter was the margin.
And I think that the team has done an exceptional job of working on that margin. And obviously, the pricing also helps. So I’m super excited about 2023 for Kona Grill.
Nick Setyan: Okay. And then I was going to ask about sort of the trajectory of the margins at Kona. So I guess the guidance — the overall guidance implies some expansion in the Kona restaurant-level margins. Maybe just walk us through in terms of the kind of inflation you expect at both brands in ’23 and the kind of pricing that you’re contemplating.
Manny Hilario: Yes. So pricing right now, we don’t have any pricing in mind right now additionally to what we’ve done with Kona Grill. And as we look out for the rest of — again, it’s always difficult to get in particular in the current environment. But Tyler and I are thinking somewhere between 2 to 4 points in inflation for the year, so much more moderate in that. And you’re accurate that our guidance for the year implies that we’ve made progress. And as our fourth quarter number shows, we have made progress on the margin that’s going to grow. And a lot of it is permanent adjustments that we made to the business model. Also keep in mind that the new restaurants and the new restaurant design, if you haven’t been to the new one yet, is designed to be labor- and margin-friendly.
