Good afternoon, everyone, and welcome to the Red Robin Gourmet Burgers Incorporated Third 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 the 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 third 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 for your interest in Red Robin. Our third quarter results were largely in line with our expectations. We continue to be encouraged by the progress of our ability to drive guest interest in our Loyalty 2.0 relaunch and have increased confidence in its ability to be a long-term driver of our business due to positive guest feedback and repeat visits from those guests. While the macroeconomic environment remains challenged, we believe the investments we made in this brand over the past 18 months have positioned us well to compete and win. We remain focused on what we can control, which is positioning our iconic brand as a high-quality gourmet burger occasion and delivering a great experience to every guest through our craveable burgers, bottomless fries, and fun and friendly atmosphere. We continue to monitor internal and external proof points to validate the work that we've been doing. I'm proud to share that our overall OSAT scores are up over 13 points since the beginning of the North Star plan. We have the highest Red Robin OSATs since at least 2016 and are above the industry average. I'm even more pleased to share the result that these efforts deliver comparable restaurant revenue that increased 0.6%. This performance exceeded the industry average as measured by Black Box Intelligence and included guest traffic that has closed a 500 basis points gap and is now in line with the industry. With this progress, we believe we will meet or exceed the industry average on traffic through the remainder of the year. 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 around the country. Your dedication to improving every day and every shift is what drives our success and is key to the revitalization of our beloved brand. Over the course of the past several quarters, we have witnessed the impact of inflation on the consumer. As businesses were forced to raise prices to cover rising input costs, the consumer found their hard-earned dollars did not go as far as they had and had to make trade-offs within their budget, including visits to restaurants. As a result, Black Box measures a 4.5% decline in casual dining guest traffic through the first three quarters of 2024. The response across the industry to this traffic decline has been an array of promotions that offer the same food and experience to the consumer at a discounted price. Red Robin's journey and our approach is somewhat different. You may recall when I started as CEO, we did the work to understand why Red Robin's performance had been so challenged for so many years prior. What we found was the value equation was broken due to well-intended but misguided cost cutting that degraded the guest experience. Back in 2022, prior to my arrival, Red Robin was engaged in deep discounting as a means to bring the price down to match the level of food and service. This approach and the cycle it creates does not lead to success. When I arrived, we made a decision to step away from the deep discounts and went to work doing the heavy lifting to improve the guest experience and rebuild the value proposition for our guests. I've talked extensively about the investments we have made to improve the quality of our food and service from introducing flat top grills to upgrading over 85% of our menu to deliver a true gourmet burger experience to adding team members to deliver great hospitality. I'm so proud of what our team has accomplished and the great food and experience our guests now receive. Our next step then is to find ways to bring guests into our restaurant to experience these upgrades. We are confident and our data continues to confirm that when a guest experiences the new Red Robin, they are very likely to come back. Recall, we tested higher levels of traditional marketing spending in the first half of this year. The team did great work to prepare this test, and we measured a traffic lift as a result. But our reality is that we do not have the resources to spend at the same level as some of our competitors. That means we have to be more creative, more nimble, and deliver a better experience than our competition. During the first half of 2024, we are also prepared and tested other tactics beyond traditional marketing spending to drive guest visits. First is our successful loyalty relaunch that I'll talk about more in a moment. Second, is what we like to call appointment dining. These are selective and targeted promotional offers and currently include Monster Monday, where we serve monster-sized items at reduced prices, including a $2 Monster burger patty upgrade, a $4 Monster milkshake, and $5 margaritas. On Tuesdays, guests can enjoy a $10 gourmet cheeseburger with a bottomless side. And on Wednesdays, kids meals are 50% off and include entree, bottomless side, and a drink. You'll quickly notice that these promotions have a few things in common. First, the promotion targets days of the week that are less busy, and we can drive incremental traffic. Second, the promotions target our ability to upsell additional items to drive average check and introduce new favorites. And third, and most importantly, the promotions are largely dine-in only. This allows guests to fully experience all the investments that we've made over the past 18 months. Overall, we're pleased with the clear traction in guest traffic from this strategy, and we expect to continue this approach through the fourth quarter. While these types of offers come with a near-term investment, I would draw a clear distinction between our approach and that of our competitors. While they are reducing price for the same food and experience, our approach is designed to encourage new and lapsed guests to give us a try and experience a truly gourmet burger and an overall dining experience. We believe driving guests into experience the new Red Robin will accelerate the curve as we drive to return to traffic growth in 2025. Turning to marketing, we continue to be pleased with the efficiency of our marketing spend that we spoke about last quarter. Through a mix of dynamic digital, social, earned media, and harnessing the power of our relaunch of the Loyalty 2.0 program to reach the right guests at the right time, we've proven that an effective marketing strategy can drive traffic into Red Robin. And we've continued to build on this momentum for the third quarter. We have invested in marketing capabilities including our own customer data platform and more dynamic storytelling in our web-based channels. We have thoughtfully chosen to communicate and promote the great value already in our menu, such as our under $11 Red's Double Tavern Burger served with a choice of bottom side and targeted messaging to promote the key appointment dining periods I mentioned earlier. In addition, our recent creative menu innovations and limited-time promotions have driven trial, breakthrough media, and social buzz. Perhaps most notable was our Triple-Patty Gold Medal Burger challenge timed to correspond with the 2024 Olympic Summer Games. We also featured our spicy new burger, the Jalapeño Heatwave, a flavor profile that's trending with Gen Z guests at Chain Fest, which introduced thousands of guests, influencers, and celebrities to our brand in New York and Los Angeles and earned millions more impressions in press and social media. We expect to continue deploying a strategic combination of efficient paid media, creative earned media, and our own channels to effectively share what's new with current and new guests and build upon a foundation of compelling value, menu innovation, and brand storytelling. Now turning to Loyalty. In May, we launched Loyalty 2.0, which continues to exceed our expectations. We are signing up more loyalty members. They are visiting more frequently and spending more on each visit. Loyalty 2.0 is a major factor in how we design our value promotions and marketing strategy as well. We know that when guests sign up for loyalty, they value their ability to immediately earn points and score us consistently higher on value, service, and quality. Through segmentation, behavioral triggers, and personalization, we're able to drive effective messaging to these guests designed to accelerate the frequency curve. As a reminder, the new program was redesigned top to bottom to be a long-term traffic driver. Under Loyalty 2.0, members earn one point for every dollar spent. After earning 100 points, members receive a $10 reward, good for both dine-in as well as online orders. This allows members to earn a reward much faster than the previous program and encourages more frequent visitation to capitalize on their earned rewards. The 90-day redemption window for earned rewards provides added incentive for return visits and a free appetizer with your first purchase incentivizes sign-ups by giving members an immediate reward and providing our server an easy way to communicate the value of the program. I'd like to share some highlights since the launch of Loyalty 2.0. The elevated level of new member sign-ups, which I shared last quarter, has continued and demonstrates the interest is more than just the new program honeymoon. We've averaged 150,000 sign-ups per four-week financial period during the third quarter, nearly doubling our prior run rate. New member transactions increased 141% as compared to the third quarter of last year. Including all loyalty members, the number of members transacting two times or more has increased by 12%, with the largest increase in members typically visiting three to five times per year. Loyalty members continue to spend more than our non-loyalty members. Finally, over 400,000 previously lapsed loyalty members have reengaged with us as part of Loyalty 2.0. These previously lapsed guests accounted for approximately 20% of all loyalty member visits from the launch of Loyalty 2.0 in May through the end of the third quarter. We expect these metrics to continue to improve as our guests become more familiar with the new program and our operators become even more experienced at driving sign-ups and reaping the benefits. In addition, we are beginning to unlock the full power of our new customer data capability to drive visitation with our guests. This includes our ability to now send much more personalized communications and trigger messaging based on each member's unique visitation habits and menu preferences. As we continue to deepen our connection with both new and existing guests alike, we're adding gamification, member exclusives, and other tactics to drive engagement and demonstrate the value of being a loyal Red Robin guest. With the continued success of our new program, our total membership is over 14.5 million guests at the end of the third quarter, an increase of approximately 400,000 since last quarter, and we expect that figure will continue to grow. We continue to be pleased with the progress of loyalty and remain highly confident in our ability to use it as a key driver of traffic growth for our business. Finally, I'd like to share an update on our restaurant portfolio. When we launched our North Star plan in January of 2023, I shared key performance metrics by quartile that highlighted the strength and performance of our top quartile restaurants compared to the challenges of our bottom quartile. While many of our top 300 restaurants continue to perform very well, and we have succeeded in improving financial performance in some of the bottom quartile restaurants, approximately 70 restaurants remain that are not generating positive restaurant-level profitability on a trailing 12-month basis. Performance in these 70 restaurants creates a drag of approximately 215 basis points on the total company restaurant-level operating profit. We are actively working to support the operating teams in these 70 restaurants as they execute their operating plan and seek to demonstrate the long-term viability of each of these restaurants. We plan to share periodic updates as this effort progresses. Overall, I am proud of our team, and we continue to execute on the things we can control, such as loyalty, and we continue to position Red Robin for long-term success. Our value messaging and marketing is working, and we're thrilled our guests are validating the investments we've made over the past 18 months to vastly improve the brand across all facets. And with that, I'll turn the call over to Todd to walk you through the financial performance before I add some closing thoughts.

Thank you, G.J., and good afternoon, everyone. In the third quarter, total revenues were $274.6 million versus $277.6 million in the third quarter of fiscal 2023. The decline is due primarily to the closure of nine restaurants over the past year. This was partially offset by a comparable restaurant revenue increase of 0.6%, led by an increase in guest check average outweighing a decline in guest traffic. I would note our guest traffic trends have sequentially improved in each quarter of 2024 and are now in line with the casual dining benchmark, as G.J. referenced earlier. We attribute this improving traffic trend to the successful implementation of the North Star plan, the traction of Loyalty 2.0, and the traffic-driving success of the appointment dining promotional offers we executed in the third quarter. Restaurant-level operating profit as a percentage of restaurant revenue was 9%, a decrease of 210 basis points compared to the third quarter of 2023. The decline was primarily due to lower guest counts and discount levels, which increased approximately 190 basis points as compared to last year. Our team continues to do great work pursuing and capturing thoughtful cost savings that maintain our commitment of parity or better for the guest experience. Cost savings in 2023 and 2024 to date have been primarily captured through our efforts to optimize the supply chain. While we continue to see further opportunity in that area, in addition, we are now actively pursuing operating efficiencies to drive an increase in restaurant-level profitability. We expect these efficiencies to come from the reboot of our actual versus theoretical food cost measurements and reporting that we launched earlier this year and a similar relaunch of our Hot Schedules labor management tool in the third quarter. While the North Star plan included an intentional investment in labor that has successfully elevated the guest experience, achieving our objectives requires that we deliver these efficiencies. We are encouraged with the initial traction our operators have demonstrated over the past several weeks, delivering on both more efficient labor and maintaining our elevated guest satisfaction scores. General and administrative costs were $20.8 million as compared to $18.5 million in the third quarter of 2023. We held our Managing Partner conference during the third quarter this year and did not hold a conference in 2023. The gross cost of the conference is recorded in G&A and is partially offset by vendor contributions that are recognized as credits primarily in cost of goods as required by GAAP. Selling expenses were $5.5 million, a decrease versus the prior year of $4 million. The decrease results primarily from a reduction in media during the quarter and intentionally reallocated dollars to support funding the traffic-driving promotional discounts. Adjusted EBITDA was $2.1 million in the third quarter of 2024. The $4.7 million decline versus the third quarter of 2023 was driven by lower guest counts, increased discounts and promotional offers, higher labor costs, and occupancy costs related to our sale-leaseback transactions. We ended the third quarter with $22 million of cash and cash equivalents, $8.3 million of restricted cash, and $20 million available borrowing capacity under our revolving line of credit. At quarter end, the outstanding principal balance under the credit agreement was $187.9 million. On November 4, we executed a third amendment to the credit agreement. This third amendment builds on the second amendment that we executed back in August. The third amendment increases our compliance leverage ratios in the fourth quarter of 2025 and first quarter of 2026 and continues the revolver expansion from $25 million to $40 million through the first quarter of 2026 that was previously scheduled to expire in the third quarter of fiscal 2025. This additional financial flexibility supports our efforts executing the North Star plan. We appreciate the great partnership from our lender group led by Fortress and offer a thank you to everyone who contributed to completing this work. Turning now to our 2024 guidance. We have updated our guidance to the following: total revenue of approximately $1.25 billion, restaurant-level operating profit of at least 10.5%, inclusive of investments in the guest experience and rent expenses related to the sale-leaseback transactions, adjusted EBITDA of $35 million to $37.5 million. As a reminder, as is historical practice for Red Robin, our reported adjusted EBITDA and our adjusted EBITDA guidance do not add back non-cash stock-based compensation expenses, which we estimate will total approximately $7 million in 2024. We are evaluating reporting adjusted EBITDA with stock-based compensation added back in 2025 to better align with the adjusted EBITDA used in our credit agreement and peers in the industry. Finally, capital expenditures: we expect approximately $25 million. The change to the restaurant level operating profit and adjusted EBITDA guidance is driven by the additional discounting we now anticipate related to the promotional offers G.J. discussed earlier. While we have been very encouraged by the improving comparable traffic and sales trajectory, we anticipate the offers will carry a net cost in the near term. In the longer term, we believe they will help achieve our goal of returning traffic to positive growth in 2025 and drive increased profitability. Our expectations for the fourth quarter are as follows: we anticipate three key components will drive our comparable restaurant sales. We expect traffic will decline approximately 4%, PPA will increase approximately 6%, and a reduction in deferred loyalty revenue will be a 1.5% headwind. Notably, the traffic and PPA expectations are grounded in the results that we have seen during the first four weeks of the fourth quarter. As it relates to deferred loyalty revenue, recall in the second quarter of this year, we reported a notable increase due to the timing of the launch of Loyalty 2.0. A large portion of that revenue was accelerated from its more typical fourth quarter timing. As a result, we anticipate an approximately $4.5 million reduction in loyalty revenue in the fourth quarter of 2024 as compared to 2023. As we've shared previously, our fiscal calendar reverts to a 52-week fiscal year in 2024 as compared to 53 weeks in 2023. This change occurs in the fourth quarter with our more typical 12-week quarter in 2024 versus a 13-week quarter in 2023. We expect this will result in an approximate $25 million reduction in restaurant sales and $3 million reduction in adjusted EBITDA as compared to 2023. We expect gift card breakage will decline approximately $2 million as compared to the fourth quarter of 2023 based on redemption rates now stabilizing after declines for the past several quarters. We expect favorable factors to offset a portion of these headwinds. The PPA benefit of 6% I mentioned earlier represents the net impact we expect from menu price increases and discounts. We anticipate a combined reduction of approximately $11 million in selling and G&A expenses compared to the fourth quarter last year, and we expect to continue to capture cost savings in the supply chain and in our operations, as I mentioned earlier. While there are different moving parts with our near-term expectations and modeling, the key financial takeaways are: first, guest satisfaction continues to demonstrate that guests see and value the upgrades to our food and hospitality. Second, we have demonstrated an ability to drive guest traffic back into our restaurants with both our loyalty relaunch and promotional offers. The team is focused on increasing restaurant-level profitability through both top-line growth and operating expense management. Fourth, the credit agreement amendment supports our financial flexibility to execute the North Star plan. All these factors, along with the dedication I see every day from our operators and support center team members, make me confident in our direction and the comeback of this iconic brand. With that, I'll turn the call back over to G.J.

Thank you, Todd. In closing, we remain confident in our North Star plan and the direction of this brand. While the macroeconomic backdrop has made our comeback more challenging, it will only make us stronger as we come out on the other side. Our team has remained focused on what we can control, which is centered around delivering a great guest experience to every guest through our high-quality gourmet burgers and our family-friendly atmosphere. With the positive proof points showcasing that guests are beginning to give us credit for the new Red Robin, we believe we are on the right path to drive sustainable long-term growth and return this great brand to prominence in the industry. We're now happy to take questions. So operator, please open the lines.

Thank you. We will now be conducting a question-and-answer session. The first question is from Todd Brooks from The Benchmark Company. Please go ahead.

Hey. Thanks and good evening, everyone. Two quick questions for you. One, I saw that the Cheeseburger Day Triple Play, so that Tuesday promotion is now expanding to Monday and Wednesday as well. Is that stacking on top of the existing kind of Monster Mondays and the 50% off for kids on Wednesdays? And is that kind of that incremental discounting that you're factoring into the guidance? That's question one. And question two is just a quick one on Loyalty 2.0. Based on the timing of the launch, we're kind of through our first 90-day expiration window potentially for gifts. Just wondering what the experience was around triggering return visits and frequency with expiring gifts coming up and your excitement about that as a lever that you didn't have in the old program going forward? Thanks.

Yes. The answer to the first question, Todd, is yes, it is stacked on top of the Monster Mondays and Kids days on Wednesdays.

Yes. On question two, Todd, this is Todd. On question 2, I'd say, overall, you heard the headlines from G.J. on the call, but we are exceedingly pleased with what we've seen out of Loyalty 2.0 so far. We've seen, obviously, the return visits that we quoted the stats around. I think you're referring to kind of the reward redemption as well. And I'd say that that has frankly been ahead of our internal modeling in terms of what we expected there. So we really couldn't be happier with what we've seen out of the loyalty program.

Yes. Just clarifying on that one, Todd. What I was referring to is I thought there was a 90-day expiration window once points are earned. And if we launched in May, we should have in the quarter, gotten through our first expiration cycles. I'm just wondering about the success in triggering visitation that you had by messaging, listen, we don't want you to lose your points, come back into the restaurant today and redeem them.

Yes, I'll try to expand on that. Overall, including our guests, when they earn a reward, they are using them. They definitely are, for the most part. We are noticing a small amount of breakage. Honestly, we probably want to wait a bit longer before we provide a more detailed figure on that. However, I can say that we want to encourage people to use and benefit from those rewards, and generally, they are doing so.

Okay. Great. Thank you both.

The next question is from Alex Slagle from Jefferies. Please go ahead.

Hey, thanks. Congrats on the improving trends. Very nice to see. I wanted to just ask on the level of discounting where you are now versus, say, pre-COVID, kind of where you think it should be? Or what's an appropriate level for the brand at this point?

Yes, Alex, Todd here. I'll start. I'll go back maybe prior to the North Star plan, just given I wasn't here prior to COVID, and I think the world did change a little bit there. But if you go back to 2021, 2022, the brand was generally around 4% discounts as a percent of sales. And we had taken steps to, frankly, pull that down a little bit as we stepped away from the discounts, did the hard work that G.J. referenced. And so we actually saw that come down a little bit for a while there. But I think in part due to the strategic reasons that G.J. referenced of, look, we want to get people in. We know if we get them in, they're going to have a great experience. And certainly, partially in response to the competitive environment, we felt like taking a step back into that was the right thing to do to get people in, get trial, and then confident our operators are going to earn their business to bring them back in the future.

Got it. Makes sense, definitely having an impact. And on the 70 underperforming units that you're taking a look at, any color on the math of what that is to annual EBITDA or just to frame that up?

Yes. We gave the 215 basis point drag in the prepared comments, Alex, I'm sure you picked that up. If you just look at those 70 restaurants on a trailing 12-month basis, the restaurant-level financials point to a loss of a little over $6 million. That's in terms of the income statement. There's obviously CapEx that is allocated to those restaurants as well. And so that's one that we're looking at. We believe in those restaurants. In some cases, they are in challenged geography or challenged locations, I should say. But we believe in our operators there. We're supporting them as they execute a plan to turn around those restaurants, but it is one that we're keeping a close tab on.

All right. Thanks very much.

The next question is from Mark Smith from Lake Street Capital. Please go ahead.

Hey, guys. You got Alex Sturnieks on the line for Mark Smith today. First one for me. Just wondering if you could give any more breakdown on the comps here in the first couple of weeks in Q4, just traffic, price, and then also any changes in consumer behavior you're seeing? Any additional color you can give us would be great.

Yes. Hey, Alex, Todd here. I'd point you to the comments I had in my script or prepared remarks of really our guidance for Q4 is very much grounded in what we've seen in the first four weeks. Meaning over these first four weeks of the quarter, traffic has been down about 4% and the overall PPA, meaning inclusive of menu prices and discounts has been up about 6% for a net 2% through the first four weeks. Now keep in mind that deferred loyalty impact that I've talked about. But in terms of business trend, PPA and traffic, that is very much reflective of what we've seen in the first four weeks here.

Yes. And I would say that we haven't seen any major changes in consumer behavior, but we are very optimistic given what we've talked about here on the loyalty platform, the repeat visits, the frequency that's going up. We're really pleased with those numbers. So we do anticipate that we'll continue to build momentum. And I think now that the election is behind us, I think we'll start to see some stability and some confidence come back into the consumers. So we're somewhat optimistic in terms of the rest of this quarter.

Got it. That's helpful. And then last one for me. Just in terms of restaurant-level margins on a forward-looking basis, just curious about the challenges here that you're seeing, but also curious about any levers you think you can pull where you can see these margins go higher into 2025?

Yes. First and foremost, driving positive traffic will improve sales. We are continuing to make progress on our productivity related to labor, and we are optimistic about our relaunch of hot schedules. The operational teams are focused on training and enhancing our hiring efforts and investments made over the last 18 months. We are pleased with these trends and expect continued improvement. Regarding controllable expenses, we are closely monitoring every line item. Our supply chain group has done an excellent job reducing costs, including utility expenses, despite the inflationary environment, and we believe there is still room for further reductions. We are also optimistic about our third-party business, as we have learned how to effectively invest in securing the right placements with third-party providers, and we are seeing considerable improvements there. Additionally, we remain careful with our general and administrative expenses and prudent in how we allocate marketing dollars, ensuring we have a return on investment. Overall, we are optimistic. However, it is important to note that we need to see improvements in the bottom 70 restaurants, as they are currently negatively impacting the system's performance. With all these factors combined, we believe we have a solid strategy to significantly enhance our margins.

Excellent. Thank you, guys.

Thank you.

The next question is from Jeremy Hamblin from Craig-Hallum Capital Group. Please go ahead.

Hey, guys. Will Forsberg on for Jeremy today. I guess looking ahead to the holiday season, what is the typical seasonality in Q4 kind of in terms of business that comes before Thanksgiving versus those last five weeks of the holiday period?

Yes. Hey, Will. You're definitely touching on something important with your question. This is indeed a backloaded quarter, meaning that most of the profitability occurs in the period from Thanksgiving to Christmas, or really into the New Year. Our business experiences a dip in Q3, but we are starting to recover from that, with significant activity happening in the last four to six weeks of the year. I should mention that Thanksgiving is later this year, which has been a discussion point in retail. However, we believe this timing is not a considerable change for us, but it's something we've taken into account.

Great. And then in regards to the loyalty program kind of from a marketing perspective, how does this impact your kind of overall marketing budget?

Well, it's all part of the overall spend within the marketing budget, but it's certainly much more efficient because we have the ability to be very targeted in our messaging, which we historically have not been able to do. We talked about that in our prepared comments. And so it's certainly more efficient than doing the more traditional media type work.

Great. Thanks.

Thank you.

The next question is from Andrew Wolf from C.L. King. Please go ahead.

Thank you. Good afternoon. I wanted to check in on the recent trends in same-store sales improvement. We've heard from others in the foodservice industry that there has been some strengthening in their trends from early October to now. Is this also true for Red Robin? Or is the number you're providing us more balanced between the start of the quarter and the current state?

No, we're seeing the same thing.

Okay. Would you mind elaborating on the difference in that or should we stick with what you mentioned?

Hey, Andy, Todd here. I think probably at this point, we'd say we're pleased to see the first four weeks up 2% in terms of same-store sales, again, excluding that loyalty adjustment I talked about. I don't want you to miss that. I think we are pleased to be up 2%. And look, we'll take it one day at a time, one step at a time, and we'll talk to you in a couple of months here, but we're optimistic with the path that we're on for Q4.

Good. Could you just expand a little on the operations changes in the restaurants, like how you're measuring efficiency or savings? Or is it dollars? Is it rates? And how you're monitoring to make sure you don't impact the guest experience and satisfaction?

Yes, Andy, I’d like to highlight a few points. Regarding cost savings, as G.J. mentioned, much of it so far has come from the supply chain, and measuring that is quite simple. For instance, when shipping costs decrease, we can obtain twice the amount of ground beef for the same fee. Those aspects are very much driven by dollars. We've discussed the comparison between actual and theoretical food costs, where we evaluate what the recipe should have utilized versus what we actually used, based on both dollar and percentage metrics. On the labor management side, HotSchedules is a leader in helping restaurants manage labor based on guest patterns rather than just hours worked. It focuses on the expected hours versus the actual hours used, providing valuable insights for each restaurant. Ultimately, as G.J. said, we are reviewing every line item, reaffirming our commitment to support our operators in their success. These are a few highlights, and I hope this information is useful to you.

We're also examining like-for-like restaurants to see how the groups are performing in each area, particularly concerning labor. It's important to connect this with scheduling and pro formas so that everyone understands their position relative to others, and we can share best practices among the teams. Additionally, we're conducting a thorough review, especially since we have a significant number of restaurants on the West Coast where labor costs are much higher than elsewhere in the country. We need to consider how we can enhance productivity and consistently assess our pricing against competitors and the overall market to ensure we remain competitive, as that’s a major challenge we face on the West Coast. We're measuring all these aspects closely and have better metrics than ever for making necessary adjustments and improvements.

In response to your question about guest experience, we measure overall satisfaction through SMG at various levels, including restaurant, regional, and company-wide. We also utilize Google and Yelp reviews, along with our loyalty database, to gather feedback from our customers. This diverse range of feedback mechanisms is essential, especially since our operators have excelled at improving labor management with the relaunch of hot schedules. Not only do we observe more efficient labor practices, but our team is also successfully maintaining high levels of guest satisfaction, and we are mindful of both aspects.

Got it. All right, that’s why I was asking about. Thank you.

This concludes the question-and-answer session. I would like to turn the floor back over to G.J. Hart for closing comments.

All right. Thank you very much. We certainly appreciate you joining with us today. We look forward to reporting our next quarter results and with continued improvement. Take care.

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