Good afternoon, everyone, and welcome to the Red Robin Gourmet Burgers Incorporated First Quarter 2024 Earnings Call. This conference is being recorded. During management's presentation and in response to your questions, they will be making forward-looking statements about the company's business outlook and expectations. These forward-looking statements and all other statements that are not historical facts reflect management's beliefs and predictions as of today, and therefore, are subject to risks and uncertainties as described in the company's SEC filings. Management will also discuss non-GAAP financial measures as part of today's conference call. These non-GAAP measures are not prepared in accordance with generally accepted accounting principles but are intended to illustrate alternative measures of the company's operating performance that may be useful. Reconciliations of the non-GAAP financial measures to the most directly comparable GAAP measures can be found in the earnings release. The company has posted its first quarter 2024 earnings release on its website at ir.redrobin.com. Now I would like to turn the call over to Red Robin's President and Chief Executive Officer, G.J. Hart.

Good afternoon, everyone, and thank you all for your interest in Red Robin. Almost 18 months ago, we launched our North Star 5-point plan, grounded in a commitment to a great experience through investments in service and food quality. We expect the investments to deliver gains in sales and profits, driving long-term shareholder value. Due to the hard work and dedication of our team members, we are beginning to reap the rewards of the investments by delivering positive comparable restaurant sales in the first 5 weeks of our second quarter. We have achieved this result despite the 200 to 250 basis point headwind from the strategic removal of virtual brands last year that we will experience through the second quarter. As you've heard from others, the consumer environment is becoming more challenging, and our core consumer of hardworking families is looking for value when they choose to eat out. Our menu and our brand are centered around providing everyday value to each and every guest through our 30 bottomless items, our Tavern Burger lineup, our pizza offerings, and throughout our menu. We believe this brand positioning has been beneficial to our top line trends as we continue to create moments of connection over craveable food that only Red Robin can provide. Before I dive into more specifics, I'd like to extend a heartfelt thank you to all of our more than 20,000 team members across the country. The success of Red Robin currently and in the future is due to your efforts and all of us working towards the same goals, all of us in this together. We've come a long way, but we still have more work to do. I am excited for what we can accomplish over the remainder of the year. As a reminder, our North Star 5-point plan consists of the following: #1, transform to an operations-focused restaurant company; #2, elevate the guest experience; #3, remove costs and complexity; #4, optimize guest engagement; and #5, drive growth in comparable restaurant revenue and unit-level profitability while delivering on our financial commitments. I am proud to say that we continue to make progress against all 5 facets of our strategic plan. Starting with operations, service is the backbone to our turnaround efforts as we work to ensure every guest has a great experience in our restaurants, rain or shine. As we have spoken to previously, we spent much of 2023 improving our operations. We did this through labor investments, including adding servers so they can focus their effort on fewer tables, adding back bussers, adding a dedicated expo, and bringing back more than 250 dedicated kitchen managers. We also made investments in our food, including flat-top grills, which deliver a thicker, juicier, and more flavorful burger, unveiled more than 20 improved gourmet burgers prepared with higher quality and more flavorful ingredients, expanded our bottomless menu, and upgraded our bar menu to include higher-quality brands that our guests know and love. Additionally, as part of our operations improvements, we launched the partner compensation program for our single-unit operators at the start of 2024. Through this program, the operators now see themselves as owners of the restaurants that they oversee and are rewarded based on their profits. The feedback has been positive, and we are thrilled to align the entire organization around the unified goal of driving traffic and ultimately profit dollars. Turning to the guest experience. If we rewind several years, dining guest satisfaction scores at Red Robin began declining and lagging the industry back in 2016. Since we have launched the North Star plan in January of '23, our operators have worked hard to deliver the great guest experience, and we saw their efforts translate to gains in guest satisfaction scores throughout 2023. The gains continued in the first quarter with all of these efforts leading to overall guest satisfaction that now has achieved parity to the industry. The measurement proof points align across many different sources. First, from guest surveys, overall satisfaction has increased significantly over the past 18 months and is now in line with the industry average led by an improved pace of experience, including reduced wait time and more frequent manager engagement with guests. Second, across Google, Yelp, and TripAdvisor, the overall satisfaction score has increased 13% versus the first quarter of 2023. The attentive staff score increased over 30%. We are further encouraged as we see first-time guest ratings are even higher than our repeat guests. First-time guests rate us higher on things like taste of food and overall value, which are key drivers of overall satisfaction. Finally, the number of guest relations complaints declined by 19% versus the first quarter of 2023 and 79% versus the first quarter of 2018 when we began tracking. Delivering a great experience to our guests is key to improving the performance of our business. It requires a relentless pursuit of executing the fundamentals at every level, which our teams are dedicated to pushing forward every day on every shift for every guest. We are proud of what we've accomplished so far and are energized by the road ahead. In addition to our operational improvements, our teams continue to become even more ingrained in the communities we serve. The number of fundraising partnership events, which serve as a great way to support our local communities while simultaneously introducing new guests to the Red Robin brand, increased relative to last year. This growth is a testament to the tremendous work of our managing partner and their teams as well as our field marketing team, who have been traveling the country to provide our operators the tools and know-how to become more valued partners in the communities that we serve. Following our operational and guest experience focus in 2023, 2024 is about optimizing guest engagement, and that begins with our marketing efforts. Starting in March, we began rolling out our new marketing strategy focused on reigniting visit frequency from our loyal guests, new guest acquisition, and improving our guest engagement capabilities. We began by promoting the competitive breadth and value of our 30 bottomless menu items, far more than just the bottomless steak fries many guests know us for. We have also highlighted our upgraded high-quality ingredients and reintroduced fun to our iconic brand. We are excited about the results we've seen so far. In May, we launched our Leave Room for Fun campaign that has been developed to take back our ownable position as the most engaging and fun experience in casual dining. We're implementing an all-new tone and more contemporary design. Our new advertisement titled Fun Guy has been a hit with viewers, receiving over 1.5 million views in the first week. After viewing the ad, we measured improvement of our brand perception with viewers across many measures, including a 15 percentage point increase in the metric of 'brand is better than it used to be,' a 6 percentage point increase in 'intent to visit in the coming 4 weeks,' and a 9-point increase in the metric 'uses high-quality ingredients.' We've coupled Fun Guy with our video advertisements that connect with guests on a human level, celebrate our new burgers and bottomless promise, and tell stories around the new ingredient transformation. We view our creative strategy as a success, as the key message recall of viewers has centered around our better burgers, our upgraded ingredients, and the fact that we now have over 20 new and improved gourmet burgers. While we're excited by the guest reception, we're also focused on the financial returns from our investment. In March, we began testing a marketing strategy in 5 markets. The initial results have shown approximately a 200 basis point improvement in traffic versus a control set. These early results have proven that we have the right marketing initiatives to drive traffic and sales gains. That said, we're never satisfied. During the second quarter, we are testing a reconfiguration of the media mix to double down on digital streaming TV and video, including platforms such as Hulu, Peacock, and YouTube TV to further drive performance and investment return. Overall, our communication and media strategy has shown promising results, and we are now in the process of optimizing it to further inform our strategy for the remainder of the year. Turning to loyalty. The Red Robin Royalty program is a great asset for the company that continues to grow, with membership now approaching 14 million guests. That said, it has historically been an underutilized asset serving more as a discount program rather than driving the business. In the past year, Kevin Mayer and our marketing team have done a great job of better utilizing the program, and the proof is in the numbers: 10% member growth in the past year; members have over a $3 higher average check than non-loyalty members; they visit 3 times more often; and new members are visiting with much greater frequency. In 2023, only 8% of new members made the second visit in the following 12 months. In 2024, 8% of our new members have already made a third visit in just the first 90 days. In our view, these successes are despite the format of our loyalty program, not because of it. One week ago, on May 22nd, that all changed with the launch of our revamped Red Robin Royalty program, now featuring bottomless rewards. Under our new program, guests earn 1 point for every dollar spent. After earning 100 points, guests receive a $10 reward good for both dine-in and online orders. This will allow guests to earn a reward much faster than the previous program. In addition, the redemption window for the reward allows our guests the flexibility to use it in the following 90 days. We expect the collective result of these changes to be more loyalty members visiting Red Robin with greater visit frequency. In addition, the guest data capability in the new program will also facilitate more personalized communication and offers to members and allow us to reward our best guests. Overall, our team members are excited to reintroduce the program to every guest, and we fully expect this new program to be a driver of our business rather than just a discount program. I'd really like to extend a thank you and congratulations to Jyoti Lynch and our IT team, Kevin Mayer and our marketing team, and everyone at Red Robin and across our implementation partners who brought the new loyalty program to launch ahead of schedule. With that, now let me turn the call over to Todd to walk you through the financial performance for the quarter.

Thank you, G.J., and good afternoon, everyone. In the first quarter, total revenues were $388.5 million, a decrease of $29.3 million versus the first quarter of fiscal 2023, primarily due to a decrease in comparable restaurant revenue of 6.5%. The decline was led by the difficult start to 2024 experienced by many in the industry, which we referenced on our prior earnings call. Additionally, recall, we eliminated our virtual brand offerings in the third quarter of 2023. Eliminating these brands comes with minimal profitability impact and significantly reduces the complexity in our restaurants, but results in a 200 to 250 basis point sales headwind. Restaurant-level operating profit as a percentage of restaurant revenue was 11%, a decrease of 370 basis points compared to the first quarter of 2023. The decline was mostly driven by our strategic investments in labor and food quality to support hospitality and the guest experience. This investment is the foundation for improved financial performance, as we expect it to drive guests back into our restaurants and increase profitability. We made the decision to maintain labor levels in the January and February periods, despite adverse weather events that made it difficult to project sales and guest counts, to ensure our guests receive a great experience when they choose to visit our restaurants. While this created near-term margin pressure, we see the benefit of that decision in our guest satisfaction scores and believe all of the investments we have made to date are beginning to pay dividends, as evidenced by our positive comparable restaurant sales increase of 0.3% in the first 5 weeks of the second quarter, as compared to the same weeks in 2023. Inflationary pressures have generally occurred as we expected, with a more normalized level of inflation across all cost categories compared to recent years. For 2024, we anticipate inflation across our entire cost basket, including commodities, wages, and operating expenses in a range of 3% to 4%, in line with our original 2024 expectations. We also continue to seek out and capture cost-savings opportunities in the P&L. In the first quarter, we captured approximately $5 million of incremental cost savings, primarily in the cost of goods. We continue to expect approximately $19 million of incremental cost savings in 2024, with $8 million from initiatives started in 2023 and $11 million of new initiatives we have or plan to implement in 2024. General and administrative costs were $25.8 million, as compared to $26.1 million in the first quarter of 2023. Selling expenses were $13.5 million, an increase versus the prior year of $5.2 million. The increase reflects our intentional investment to increase communication with consumers, to accelerate visits, and allow guests to experience the upgrades in hospitality. Additionally, our remittance back to local organizations for their share of the fundraiser partnership events that G.J. mentioned earlier is also accounted for here and drives a portion of the increase. Adjusted EBITDA was $12.2 million in the first quarter of 2024. The decrease relative to the first quarter of 2023 was driven by 3 key factors. First, the strategic investments we started after the first quarter of 2023 operated at a full run rate in the first quarter of 2024. Second, top line headwinds in the January and February financial periods in particular were substantial. Finally, the increase in selling costs supported the launch of our marketing communication to guests. Notably, during the final 8 weeks of the quarter, in the March and April financial periods, we generated the vast majority of the adjusted EBITDA for the quarter as our top line trends improved towards a modestly positive comparable restaurant sales we reported in the May period. As we mentioned on our last call, we were pleased to complete our third tranche of sale-leaseback transaction during the first quarter. This transaction included 10 properties and generated gross proceeds of $23.9 million, with net proceeds of $21.2 million used to repay debt, bringing the total debt repayment from the 3 tranches to $45.1 million. We expect the third tranche transaction represents the end of our multi-unit sale-leaseback efforts. We are now evaluating the market for 5 of the properties we own for individual sale-leaseback transactions. Due to the nature of the potentially single-unit transactions, we expect this effort may require more time than the first 3 multi-unit tranches, but it is an effort that we plan to act on if the economics are compelling. We ended the first quarter with $30.6 million of cash and cash equivalents, $8 million of restricted cash, and $25 million available borrowing capacity under our revolving line of credit. At quarter end, our outstanding principal balance under our credit agreement was $167.9 million, a reduction of $21.2 million as compared to the end of fiscal 2023 due to the repayment of debt from the sale-leaseback transaction proceeds. Turning now to our 2024 guidance. We reiterate all aspects of our previously issued guidance for 2024: total revenue of $1.25 billion to $1.275 billion, including comparable restaurant revenue of a low-single-digit percentage decline; restaurant-level operating profit of 12.5% to 13.5%, inclusive of investments in the guest experience and rent expenses related to the sale-leaseback transactions; adjusted EBITDA of $60 million to $70 million; and capital expenditures of $25 million to $35 million. The $65 million midpoint of our adjusted EBITDA range represents a modest increase year-over-year when adjusting for the benefit of the 53rd week in 2023, the additional rent we will incur in 2024 due to the sale-leaseback transactions, and compound annual growth of approximately 12% relative to 2022, starting point of the North Star plan. As added color for our 2024 financial guidance, we expect the following factors to influence our results: we will revert back to a 52-week fiscal year in 2024 as compared to 53 weeks in 2023. We expect this will result in an approximate $25 million reduction in restaurant sales and a $3 million reduction in adjusted EBITDA as compared to 2023. In the second quarter, we expect to generate modestly positive comparable restaurant sales and a modest sequential improvement in adjusted EBITDA, which would represent a continuation of the monthly EBITDA trends we saw in the second half of the first quarter. This is driven by improved top line trends and a sequential improvement in restaurant-level operating profit margin, partially offset by the investments we are making in selling expense. We expect adjusted EBITDA in the third and fourth quarter to be more than that of the first and second quarter, driven by the aggregate sequential benefit of the initiatives we have put in place and including an expectation for positive traffic growth in each of the third and fourth quarters. In summary, we've made significant progress over all points of our North Star plan. We remain on track to achieve our targets and are building this brand to be successful over the long term.

Thank you, Todd. Our comeback journey has not been easy, but what we've accomplished to date has been substantial. Through the continued execution of our team members in operations, utilization of our new marketing strategy and the relaunch of our loyalty program, we believe we have the levers in place to drive sustainable long-term growth and return this beloved brand to prominence in our industry. We are excited by the progress we've seen so far, but I can assure you that we are only scratching the surface of our potential. I believe in the strategy we have in place, that it's working, and I am thrilled to bring guests back into our restaurants for moments of connection over craveable food that only Red Robin can provide. And with that, we are now happy to open up and take questions. Operator, please open the lines.

Our first question comes from Mark Smith with Lake Street Capital.

First question for me, just wondering if you can give any more breakdown on the comps here in the first couple of weeks in Q2, just traffic, price any additional color you can give us would be great.

Mark, Todd here. The color I think we'd give is we've seen sequential improvement in our same-store sales throughout the entire course of 2024, and that's true of traffic as well. So, the improvement that we've noted, the positive same-store sales to start the quarter is on the back of improved traffic where we reported about 5% price in the first quarter. That has ticked up a bit, and so there's some benefit of price, but I would be clear that there's a benefit from traffic as well that continues to improve sequentially.

Perfect. And then just looking at labor costs, as that came up as a percent of sales here in the quarter, any breakdown that you can give us as how much of that was planned as you guys have been investing and that's bearing fruit here versus any incremental pressures that you maybe saw in the quarter such as minimum wage hikes or pressure in any certain states.

Mark, it's G.J. here. I, too, agree with Todd. A couple of things I would call out, and Todd can add color to this as well, but as we stated in the prepared remarks, the investment was at a full run rate after the first quarter of 2023, and so that continued to stay the course. And so, as we mentioned, on all the things with guest satisfaction and performance and sequential improvement with traffic, we believe those benefits will continue to accrue to us over time. But I will call out, there was $1.8 million that were extraordinary expenses that go back for workmen's comp claims back to 2018 and beyond. And then secondarily, we had a pretty high claim rate on our health insurance program. So that $1.8 million we don't plan to have recurring, and so that was a big change in the numbers.

And then last one for me. Just curious, as we look at menu mix and maybe changes sequentially during the quarter, January was obviously really tough. Any thoughts on how your consumer is doing today, and especially insights into maybe managing check and how the consumer is doing today versus early in Q1?

Sure, Mark. Let me start by saying that a couple of things that we've noticed, and just as we hear others in the industry and some of the comments that they're making, in our particular case, we are seeing our value-oriented Tavern Burgers click up a bit. So, you can certainly assume that some of the folks are managing their checks. However, our promotional activity around some of our premium burgers has really increased the usage of those as well. And then when you start to look at add-ons and appetizers, sides, etc., desserts, they've held steady. So, we're actually feeling pretty good about where our overall consumer is. But again, we're watching it every day to see. But at this point in time, we feel pretty good.

Our next question comes from the line of Alex Slagle with Jefferies.

Congrats on the comp progress here recently. Definitely a nice, notable shift here. And I just wanted to follow up on that a little bit first, just maybe on monthly comparisons, if you could provide any color there through the first quarter and second quarter, just to get a better sense for the 2-year trend. I know there was a lot of variability last year, reducing some of the false waits and other dynamics. But any other color there? And if there's any other things to consider, like calendars or whatnot?

Yes, Alex. This is Todd. We've looked at, I'd say, all of the above. We've looked at the 2-year stack. We've looked at multi-year stacks. And I think you're aware, as I'm sure the group is, the industry broadly had a very strong quarter in the first quarter of 2023. That was certainly true for Red Robin. We posted an 8.6% same-store sales number in Q1 of last year. And so, certainly lapping that, I think, proved to be difficult. But I think most encouraging, as we look at our trends, we do see the sequential improvement. And especially on a multi-year basis, we believe the progress that we're seeing on traffic reflects a true stabilization of the business that hadn't been present for many years. And so, that's only the first step is to stabilize the business. Obviously, the next step is to grow it with things like loyalty and the marketing efforts that G.J. talked about. But that's how we assess the collective is, yes, there were some difficult compares in Q1. But overall, we see much more stabilization in the business, and especially in the traffic line, most importantly, that gives us the confidence that this will continue to build.

That's great. And the new marketing platform, if you could just talk a little bit more about that, what you saw, early feedback, I guess, anything on how this marketing support may be ramped up through the first quarter into second quarter, just a sense of what to look for there.

We observed a 200 basis points improvement in the markets where we were highly engaged. As we continue to experiment and refine our approach, we are focusing on more precise messaging. We discovered the need for greater targeting, especially with video content, while also learning from our customers. Additionally, our revamped loyalty program, although recently launched, will enhance our targeting capabilities. While a 2% result may not have met our expectations, it still represents a positive improvement that gives us optimism for the future. Our marketing strategy consists of three main components. The first is a brand awareness campaign that emphasizes the human connection and enjoyment associated with Red Robin, which is gaining traction and stands out from competitors. The second component focuses on showcasing value through our 30 bottomless sides. Feedback from both existing and new guests indicates that while we are recognized for our bottomless fries, awareness of our 30 bottomless menu items has surged, leading to significant improvements in guest satisfaction once we deliver on that promise. The third aspect revolves around our commitment to enhanced ingredients and innovation that Red Robin has long been known for, highlighting quality and value. Together, these three components make us feel very positive about our direction. Furthermore, the loyalty platform is showing promising results. For instance, 8% of new guests who signed up have returned for a third visit within 90 days, which is encouraging. Overall, this provides several positive indicators as we refine our approach.

Our next question comes from the line of Andrew Wolf with CL King.

Congrats on getting the comps positive. I just wanted to ask about the sequential improvement in profitability into the second half and really specifically in the third quarter, which I think seasonally is the lowest quarter of the year. So, I guess you have a couple things going on. You're going to cycle out of the virtual brands, but they may not have been as profitable as they were accretive to same-store sales. And then obviously your plans are to improve the traffic. So, what is the leverage in the P&L that's going to help the third quarter be sequentially stronger from a profitability point of view in the second quarter despite the seasonality headwind?

Andy, Todd here. The way we're thinking about it, and the reason that we do, as we said on the call, we expect the EBITDA or the adjusted EBITDA in Q3 and Q4 to certainly outpace the first half of the year. And you're correct, the third quarter is typically a more seasonal soft period for us. But the year-over-year growth we still think is very much a realistic expectation. Yes, I think the way I'd think about it is while some of the traffic headwind has been due to the virtual brands that, as you noted, have minimal profit impact. There has been just a legacy traffic headwind that Red Robin has experienced for many years at this point. And when you value that, that's been a headwind that we've been fighting since G.J. and I and this leadership team joined roughly 18 months ago. As we see a track back to flat traffic, that headwind goes away. And as we said on the call, we actually do expect modestly positive traffic in the second half of the year. And so, you get a combination of a headwind going away and then a little bit actually of a traffic benefit is what we expect. And so, that's really the key lever, if you will, that we see driving the second half of the year.

And just a quick follow-up on your mentioning that there might be a little more menu price increase in the quarter to date. Were the mix and discount factors pretty similar, like if we wanted to lower our way back to where the guest traffic went to so far this quarter?

Yes, I think I follow you there, Andy. I think what I'd say is we expect mix will be less negative as we progress in Q2 and Q3. All the factors that G.J. mentioned, we do anticipate some of that continuing, but many of the changes we lapped from menu changes a year ago. So, I think mix will be a less negative factor in Q2 and Q3. And so, I think that's the headline there.

Our next question comes from the line of C.J. Dipollino with Craig-Hallum Capital Group.

C.J. Dipollino on for Jeremy Hamblin tonight. Just wanted to ask about comps real quick. So, relative to May, do June and July get a little bit easier, a little bit harder? I'm just thinking about the rest of Q2.

Yes, C.J., Todd here. I'd say really, the comparisons in the balance of the year get progressively easier. Now, part of that is the virtual brands that we eliminated in the second half of last year, but we don't foresee any unusual hurdles in the balance of the quarter.

And then if you could just touch on what you're doing to drive membership in the loyalty program, both new members and getting some of those dormant accounts to reactivate.

Sure. It's G.J. here. First of all, what we started doing was actually when a new member signs up, either on a website or in a restaurant, we'll send them a welcome email back to tell them what the program is all about. We were not doing that before, and so that has gotten a great response. The second thing I would tell you is that throughout the organization, this is a huge initiative. And so, all the way down to our team members and servers really talking about and understanding where we're going with our new loyalty platform has been super beneficial as well. And then thirdly, just in everything that we're doing by all of our communication strategy are coming into play as well. So, I just might add, I think I mentioned it in the prepared remarks, we've seen significant improvement in the numbers, up almost 10% for the year to date. So, our teams are doing a great job bringing people into the program as well as having it on the website and really making it prominent where it wasn't connecting with our website before. So, all those factors are really helping us.

And then one more, if you don't mind. Could you maybe speak to some of the new menu items you introduced this year and the initial reaction from customers?

Well, we've brought the Mad Love Burger back. We've added shrimp to the menu, both in an appetizer and entree. We brought back ribs on the menu again in the whole barbell menu strategy that we've had. So, we're not just targeting just burgers. And historically, Red Robin has had a more barbell approach to the menu, and so those things have really gained traction. We've added some other appetizers that have been received incredibly well, with our chips and salsa having positive feedback as well. So, the other thing is just by bringing back some of the old burgers with our new ingredients has been received incredibly well as well.

Our next question comes from the line of Todd Brooks with The Benchmark Company.

Congrats on getting loyalty live early and inflecting the same-store sales back to positive. Can I ask a question on the marketing side and the efficacy and working with the mix going forward? How do you feel like bottomless is resonating in a world where there's so much specific price point advertisement on TV? I know you're pleased with the fun focus campaign grabbing eyeballs and cutting through the clutter, but is bottomless doing the same thing for Red Robin?

Yes. So, let me give you a couple of stats here, and some of these are new questions that we're asking, so a lot of this data is relatively new. But I'll tell you this: in the work that we've done, 79% of our guests really appreciate bottomless and want to utilize bottomless. And of those, if we're executing at an 84% to 85% take level, what we're seeing is our overall value scores rise dramatically, substantially through the roof. Then, when you take a look at from a value perception and some of the top box questions that we made, we find that satisfaction level when bottomless is executed is at 84%, and we're seeing the 60% value scores, which are really, really high for us. As value is probably what they rate the toughest on. So, we've seen really good numbers here. So, what it's telling us is our guests want it. They're significantly surprised that there are 30 items that are bottomless, which I don't think we've done a good job in the past communicating. And so, that's being received and the take rate on that is improving all the time.

That's great and good to hear. Switching to loyalty. I know the design of the reward tiers or the reward hurdles is lowered, depending on how much you spend, you could probably get there in 3 visits versus having to visit 10 times before for the reward prior. I'm hearing from others that have lowered reward tiers that it's having an outsized frequency benefit, and it’s driving retention, but also driving behaviors that would point to improved frequency from a more attainable reward structure. I know we're a week in, and it sounds like the conversion went well, and you've got people in there. But executing against it now at the store level in the second half, and what type of duration do you need before you know about the frequency benefit of the new structure?

Yes. I mentioned earlier that 8% of our new members who have signed up are making their third visit within the first 90 days. This compares to 8% of our members during the same period last year who only made their second visit within a year. This gives us strong confidence that this program is effective. The numbers clearly indicate that our guests want it, as it shows significant value to them. In fact, some surveys suggest that it may even be more important to them than burgers. This clearly highlights the positive impact of our initiative.

I have a couple more points to add. Todd, you mentioned the profitability differences between the first and second half, particularly noting that a significant portion of the EBITDA was generated in the second half of Q1. While we maintain our EBITDA guidance and link it to the second half as trends stabilize, we are not certain what the significant portion really means. How does this translate if we project it over the next three quarters within the $60 million to $70 million range?

Todd, I'm digesting your question a bit. Yes. I think hopefully this, if I don't address it, please let me know. But the way we get comfortable with not only our Q2 commentary but also the full year is really looking at that run rate in the second half of the first quarter. Really, if you extrapolate that, that gets us to our expectations for Q2 in particular. Now, as you said, we didn't disclose exactly what that was. We don't disclose that level of detail intra-quarter. But please consider that as how we're thinking about the second quarter. If you continue to extrapolate that in addition to what I referenced earlier of traffic trends continuing to improve, that's really what gets us comfortable with that guide of $60 million to $70 million. So, I'll pause there, but that's a headline, at least of how we're thinking about it.

Yes. No, it makes sense. So, it sounds like Q2 isn't a lift from the trends that we saw in the second half of Q1, and then we get to the back half of the year, and if we get traffic back to slightly positive, that's where you get the additional lift on top of the trends that you saw in the second half of the quarter then.

Todd, well, first of all, they're super excited. I just finished a tour around the country and the rallies that we do every year, and I can tell you just from my experience, the morale, the attitude, and the belief in where we're going as a result of us having enough faith to put a partner program in place is huge. That's #1. #2, what we're seeing is just the involvement in terms of their P&Ls, going the extra mile to be there on the shifts that are appropriate. We're seeing huge behavior changes relative to that. We're seeing our turnover numbers go down pretty dramatically. We're seeing the questions into our accounting teams go through the roof. We expected that, but that's exactly what happens. They care about every little thing on that P&L. It's early. As you point out, it's 4 months in, soon to be 5 months into this program, and we are holding up some of those folks on the bottom 25% of our restaurants. But they continue to lean in. We continue to have them share best practices amongst each other to help each other. And so I fully anticipate it will continue to grow, and the results will continue to improve. If you ask me the question a year from now, we will have a measurement in terms of what real impact that it had. So, it's a little early to give you some of those numbers, but I am hugely optimistic about where we're headed with this.

Thank you. And we have reached the end of the question-and-answer session, and therefore, I'll turn the call back over to G.J. Hart for closing remarks.

Thank you very much. We appreciate everybody joining us here today. It's an exciting time here at Red Robin. We look forward to reporting on our results next quarter. Thanks for joining us, and we'll see you or hear from you next time. Take care.

And this concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.