Margin Guidance
Q: Q4 margin down 200bps?
A: Management confirmed roughly 200 bps compression in Q4 margins, noting that Q3 traffic fell by 4.9%, which underscores current operational headwinds.

Cost Savings Flow
Q: Do $50–60M savings boost margins?
A: They explained that the projected $50–60 million in cost savings is built into a broader 400 basis point EBITDA improvement over three years, directly benefiting margins.

Cost Savings Buckets
Q: Where will savings originate?
A: Savings will come mainly from industrial engineering improvements in back-of-house operations and enhanced labor efficiency, alongside ongoing cost programs.

EBITDA Outlook
Q: Is fiscal ’25 EBITDA flat versus ’24?
A: Management expects fiscal 2025 EBITDA to be roughly flat or slightly down compared to full-year 2024, reflecting both headwinds and continued strategic investments.

Store Investment
Q: Why reinvest in store remodels?
A: Reinvestment is driven by guest feedback on outdated experiences; updating store environments is seen as crucial to revitalize traffic and sales.

Pricing Strategy
Q: What’s 2025 pricing approach?
A: They plan to use a tiered pricing strategy with fixed anchors and selective adjustments to local market conditions, balancing value perception with margin protection.

Off-Premise Business
Q: How is off-premise evolving?
A: Management is refining three distinct off-premise channels—takeout, third-party delivery, and catering—to optimize profitability without impacting the core dine-in experience.

Operational Metrics
Q: How has seat-to-eat improved?
A: They reported an 8% improvement in seat-to-eat times, reflecting better operational efficiency and service speed.

Technology Investments
Q: Which tech initiatives are prioritized?
A: The focus is on enhancing the loyalty tech stack and upgrading POS systems in both restaurant and retail segments to drive efficiency and customer engagement.

Loyalty Program
Q: What’s new with loyalty?
A: The loyalty program, now at 5 million members, remains a cornerstone for driving personalized engagement and delivering consistent value to guests.

Commodities & G&A
Q: What are Q4 commodities and G&A trends?
A: Commodity inflation is anticipated to remain flat, while G&A expenses are expected to edge higher in Q4 and into fiscal ’25 as investments continue.

Convertible Debt
Q: How will convertible debt be handled?
A: They are preparing to refinance the convertible due in 2026 by leveraging a strong revolver capacity and maintaining disciplined leverage.

Food Cost Outlook
Q: What is the food cost forecast?
A: Although recent commodity deflation helped margins, management warns that some key input prices could rise over the next 12 months.

Operational Lead Time
Q: When will operational improvements show?
A: The effects of enhanced metrics and operational improvements are expected to gradually boost traffic starting mid-decade, with ongoing efforts into 2025 and beyond.

Near-term Top Line
Q: What are near-term revenue strategies?
A: They are increasing advertising and rolling out value-driven promotions, such as early dine specials, to sustain revenue growth in today’s competitive, promotional market.

Consumer Behavior
Q: How are consumer trends shifting?
A: There is a noticeable shift towards more price sensitivity, particularly among lower-income guests, accompanied by modest declines in add-on sales affecting overall mix.

Retail Trends
Q: How are retail sales and margins evolving?
A: Improvements in retail same-store sales are driven by tactical markdowns and better inventory management, contributing to improved margins despite broader pressures.

53rd Week Impact
Q: What is the 53rd week impact?
A: Management did not provide a precise figure, noting instead that its effect is embedded in the full-year EBITDA guidance, referencing historical trends for context.

Brand Relevance
Q: How is brand relevance being improved?
A: Efforts include refreshing menus and enhancing store ambiance based on extensive guest research, all aimed at reinvigorating the brand’s appeal and dining experience.