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CFO Josh Guenser confirmed that while they are not currently seeing a negative impact on their customers, they are mindful of the broader macro environment and have factored that into their guidance. On the Texas shops, he spoke broadly, confirming that newer market vintages show outsized performance due to marketing, mobile order adoption, and maturation, which contributes to overall strength.

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CEO Christine Barone identified several key factors for the outperformance. She highlighted stronger-than-expected transaction growth of 2.3%, driven by mobile order, paid ads, and successful holiday promotions. Additionally, the strong sales momentum allowed the company to pull back on discounting, which contributed over a point to the comp. Finally, she noted that new shops entering the comp base performed at the high end of expectations.

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CFO Josh Guenser stated that the company does not disclose sales performance segmented by rewards status but highlighted the program's record growth of 1 million sign-ups in Q3. CEO Christine Barone reported that they are 'quite pleased' with performance in California, noting strong growth from new shops and continued brand resonance, with California containing some of the system's highest-volume locations.

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CFO Mika Ware expressed confidence that restaurant margins would be maintained or continue to grow. She cited key drivers including maintaining pricing power through business investments, achieving labor productivity as teams gain tenure with higher traffic, and leveraging fixed costs as average unit volumes (AUVs) increase.

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CFO Mika Ware reiterated the capital allocation strategy: first, reinvest in the business; second, pay down debt; and third, return excess cash to shareholders via methods like share repurchases. CEO Kevin Hochman explained that new guest monitoring is done via tokenized data from customer transactions, which allows them to distinguish new customers from those who have visited in the last 12-24 months. This data confirms that growth is driven by both new guests and increased frequency.

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CFO Mika Ware projected that full-year restaurant-level margins would be approximately 100 basis points or more favorable year-over-year. CEO Kevin Hochman and CFO Mika Ware clarified that fiscal 2025 includes 31 weeks of TV advertising, an incremental 4 weeks over the prior year, with advertising spend expected to ramp up by $3-4 million in Q2 and Q3, and by about $7 million in Q4.

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CEO Robert Lynch shared that while not disclosing specific mix details, the combo test led to improved order times, accuracy, and guest satisfaction. A key learning was that menu design, such as placing the double burger combo first, successfully shifted mix to more premium, profit-accretive items. This shows combos can be used to drive profitable mix and attachment, not just offer discounts.

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CFO Raj Vennam explained that the divergence in industry data is caused by one or two outlier brands, as the benchmark provided excludes Darden. President and CEO Ricardo Cardenas suggested consumer resilience may be a post-COVID behavioral shift, with consumers prioritizing dining experiences. He also noted that rising incomes and moderating costs for essentials could be freeing up disposable income for dining out.

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CFO Raj Vennam explained that Never Ending Pasta Bowl appeals broadly across income levels, including consumers up to the $150,000 income bracket, and is effective at attracting new and infrequent guests. President and CEO Rick Cardenas pushed back on the 'diminished market share' premise, noting the recent quarter was the only time in five years Olive Garden's traffic trailed the industry. While conceding delivery could be a factor, he did not see it as the primary reason for the single quarter of underperformance.

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CFO Craig Pommells acknowledged that Q3 may be pressured by consumer challenges but noted recent trends have improved and Q4 initiatives should help. He highlighted gains with the over-55 age cohort and relatively similar performance between under and over $60k income groups, a recent shift. CEO Julie Masino added that Cracker Barrel's strong value proposition, including a lower average check than peers and a successful loyalty program, positions the company well in the current macroeconomic environment.

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CEO Mike Spanos stated that the greatest opportunity for Outback is improving 'consistency of execution' across quality, value, and guest experience, expressing high confidence in turning the brand around. He added that the 2025 guidance assumes casual dining traffic will be down about 3%, and the company aims to win share through consistent execution and building brand trust with everyday value offerings.

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CEO Mike Spanos defined value as a combination of price, benefits, and the overall guest experience. He noted the team is evaluating how to balance LTOs, everyday value, and menu simplification. CFO Michael Healy confirmed the intentional shift to lower opening price points on LTOs in Q3 to address affordability, noting the team can engineer these offers to be economically sound. Spanos added that the focus is on ensuring these promotions drive sustainable traffic from loyal and new target guests.

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EVP and CFO Matt Clark responded that they do not see evidence of an anxious consumer in their data, citing the brand's resilience and a strong Valentine's Day. He noted that price sensitivity is not a major issue, as attachment rates remain above 2019 levels and the company avoids discounting wars, unlike some competitors, particularly in the quick-service space.

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EVP and CFO Matt Clark explained that the mix headwind is moderating as the company laps the return of larger party sizes. He projected the headwind to be around -1% in Q4 and flatten out in 2025. He confirmed Q4 pricing will be 4.5%, same as Q3, and anticipates 2025 pricing will move closer to the historical 3% level, aiming only to offset inflation.

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CEO Michael Skipworth stated there is still significant runway with current tactics, like increasing ad frequency, and the NBA deal is an example of the strategy's evolution. He confirmed international unit economics, especially in the U.K., are very similar to the U.S. with strong returns. Regarding international comps, he said the company wants to see more scale across markets before breaking them out.

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CEO Christopher Morris stated that there have been no material changes to the pricing tiers, as the company feels it has the right formula for now but will re-evaluate for next year. He confirmed that June and July were more challenging months than the start of the quarter, attributing the softness to a broader macro trend that affected both the Dave & Buster's and Main Event brands.

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