Good day, and welcome to the Q4 F '23 Earnings Call. At this time all participants have been placed on a listen-only mode. The floor will be opened for questions and comments following the presentation. It is now my pleasure to turn the floor over to your host, Mika Ware, Vice President of Finance and Investor Relations. Ma'am, the floor is yours..

Thank you, Holly, and good morning everyone and thank you for participating on today's call. Joining me on the call are Kevin Hochman, our Chief Executive Officer and President; and Joe Taylor, our Chief Financial Officer. Results for the quarter were released earlier this morning and are available on our website at brinker.com.

As usual, Kevin and Joe will first make prepared comments related to our strategic initiatives and operating performance, then we will open the call for your questions.

Before beginning our comments, I would like to remind everyone of our Safe Harbor regarding forward-looking statements during our call, management may discuss certain items, which are not based entirely on historical facts.

Any such items should be considered forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All such statements are subject to risks and uncertainties which could cause actual results to differ from those anticipated.

Such risks and uncertainties include factors more completely described in this morning's press release and the company's filings with the SEC. And of course on the call, we may refer to certain non-GAAP financial measures that management uses in its review of the business, and believes will provide insight into the company's ongoing operations.

And with that said, I will turn the call over to Kevin..

Thanks, Mika, and good morning everyone and thank you for joining us as we recap the progress made during fiscal '23, and highlight our plans to build on this momentum and drive traffic in fiscal '24.

During fiscal '23, we made significant shifts to our strategy to drive our core dine-in channel business and help us drive margin improvement over time. We pulled back on deep discounting, we reduced our focus on investment of virtual brands, and started to pricing to recover inflation while still maintaining best-in-class value.

We acted on our restaurant teams ideas to simplify operations, we invested in our labor model to improve our food grade scores and service, and we returned to national advertising for the first time in more than three years.

And we saw very good progress in our results, we are now significantly outpacing industry sales growth, since the middle of February, which is being driven by improved food scores, improved service scores, and have returned to traffic driving advertising.

Our traffic gap versus the industry is also beginning to narrow, even though we continue to strategically shed the unprofitable Maggiano's virtual brands sales, and some Chili's sales that were driven by deep discounting, as we continue to reduce our reliance on coupons.

From a retention standpoint we significantly improved managerial turnover and we are now better than pre-pandemic levels. A year ago we challenged our Vice Presidents of Operations to get after one obsession metric, they chose manager turnover, and the results have been exceptional. We are now beating the industry.

This year, they've chosen the obsession goal of hourly team member turnover, and I'm confident the team will deliver improvements there too. All in all, good progress in one year that has set the business up for a longer run of sustainable profitable growth. Before we shift our focus to fiscal '24.

I'd like to share an update on the relaunch of our Chicken Crispers, the first of our Core Four improvements, as an example of how our strategy is creating value.

Our goal is to make it easier for operators to execute higher volumes, improve their recipes on chicken and fries, bring in new Mac and Cheese and new dipping sauces, and lastly merchandise Crispers in a more relevant way that would drive bigger piece counts.

We launched this platform at the end of May, and we've already seen some very positive results, including over 40% more Crisper volume. The best part is, these results came before we turned on advertising next month, in conjunction with the start of football season.

We'll also be featuring this improved platform more prominently on our new bar menu rolling out in September, and we will also introduce a new an incredibly delicious flavor that uses the existing operational procedures and adds no new complexity to the kitchen.

Guest feedback on the new Crispers, Fries and Mac and Cheese has been phenomenal and has confirmed moving to one type of breading, to both improve the recipe and allow teams to produce much higher quantities consistently, has been the right choice.

The end results, a much bigger and margin accretive Crisper business driven by both higher pricing, higher piece counts and better taste, with less complexity because we eliminated the low mixing original Crisper. And our restaurant teams loved the changes. More sales with less complexity is a big win.

In fiscal 2024, our goal is to accelerate this momentum by focusing on two key areas. Number one, we'll continue to improve the team member and the guest experience, through service levels and atmosphere while driving the Core Four, through improved operations and innovation. The Core Four now represents 43% of our sales.

We took many of you through those plans on improving guest and team member experiences when you attended the Investor Day, here in Dallas last quarter. Number two, we're laying several strategic initiatives to drive incremental traffic and accelerate our sales even more versus the industry, and I will detail them here.

So let's dive a little deeper into those initiatives starting with our advertising strategy. Last quarter, I shared the encouraging results for - of our 3 for Me TV campaign. This was our first national advertising window in more than three years, which helped narrow our traffic gap and accelerate Chili's market share growth.

This year will follow that same strategy, but increased from four weeks on TV to 21 weeks, that advertising will focus on value and Core Four menu items. We will use offers and innovation to bring guests in, and then use menu merchandising to drive check.

We'll supplement these ad windows with a social media and digital strategy, to drive awareness and continue to increase the brand's relevance. The marketing team is doing a great job getting Chili's back in the cultural conversation and engaging with customers through these channels.

For example, over the past six months, we've been a top trending topic on the platform, formerly known as Twitter, four times. Finally, we're building a more sophisticated CRM program to drive frequency. I'm excited to announce our partnership with GALE, the award winning digital and CRM agency who is known as best-in-class in the restaurant industry.

We'll continue reducing CRM discounts and redeploy those dollars to more effective and sustainable communication that delivers relevant targeted messaging to reduce time between visits. I'm so pleased to have the caliber of the GALE team working on our business and look forward to bringing you more updates on this program throughout the year.

The other area of the business we're leaning to drive incremental traffic is the bar. With last year's Raise the Bar initiative, we are now selling more premium margaritas and our bars are more profitable.

Building on that success, we're launching an updated bar menu later this month, in conjunction with football, that includes compelling happy hour specials, premium drinks like our Casamigos Rita and our new Teremana tropical Rita, as well as a completely new food lineup with an emphasis on Crispers and Wings.

In addition to featuring our premium burgers and Chicken Crispers on that new bar menu, I'm pleased to share we'll be graduating the virtual brand It's Just Wings to the real world, where they will now have the marketing power and distribution of Chili's Grill and Bar.

It's Just Wings is one of the largest, if not the largest virtual brand in the world, and it's likely to get a lot bigger in the for-real restaurant world. We see an opportunity to leverage It's Just Wings brand as a trip driver for bar visits and providing credibility to Chili's as a wing player.

We'll start with football season and drive the Wings business throughout the year, leveraging relevant sports viewing occasions to drive traffic. It's Just Wings will also appear on the everyday dining room menu, and we expect it to drive add-ons and trade up in the appetizer section.

In summary, we expect these multiple traffic driving initiatives to improve traffic trends. We also expect a negative traffic impact of our CRM deep discounts reduction and Maggiano's virtual brand removal, to have less of a drag on traffic, as we move through this fiscal year and we cycle those impacts out.

We're excited about our plans to continue growing the Chili's business in fiscal '24, and we expect to continue to significantly outpace the industry on sales. And we expect our traffic driving initiatives to improve traffic trends versus the industry, which will continue to accelerate market share growth throughout fiscal '24.

Now let's move on to Maggiano's. The Maggiano's team has delivered impressive results during fiscal '23, as the recovery from the pandemic is now complete, finishing the year with an impressive $9.5 million AUV. I'm encouraged by the progress the Maggiano's leadership team is making in clarifying their brand positioning.

The team is currently working plans based on this positioning to modernize this iconic brand, and accelerate growth on top of this past year of impressive results. I did want to take a moment to recognize Maggiano's President, Steve Provost, who is retiring at the end of this month.

Steve has made many contributions to our business during his 14 years at Brinker.

He started at Maggiano's brand and served as the President for many years, when the company needed him to jump into Chili's, he did so, acting as the Chief Marketing and Innovation Officer, and in that role Steve created and launched It's Just Wings brand during the pandemic, which is a big help to the business during a very tough time.

And now, Steve has finished his career leading Maggiano's for the second time. And Steve has done a great job leading the brand through the pandemic, thoughtfully supporting managers and teammates, and ultimately creating a stronger Maggiano's, post pandemic.

We're grateful for the many hats Steve has worn here at Brinker, and we'll miss his infectious energy and passion for the business and the people. Chief Concept Officer, Larry Konecny and I are co-leading the brand, as we search for the right leader to grow the business in the long term.

I wanted to close with a brief update on what we experienced at our Annual Manager Conference here last week in Chili's - in Dallas. Our Chief People Officer, Aaron White and Chief Operating Officer, Doug Comings, hosted all of our Chili's restaurant general managers at our Annual Conference. There we shared our fiscal '24 plans.

It was incredibly encouraging to hear the managers alignment and see their energy about the Chili's - new Chili's direction. The job continues to get easier, the job continues to be more fun and more rewarding for them and their teams. They feel like they're being heard and a big part of shaping the future of Chili's.

And they love winning again and growing faster than the industry. So the teams' are really fired up and they're ready to deliver another year with accelerated growth and profitability.

Net, we have confidence in the plans, we have the enthusiasm of our field restaurant teams and we have the alignment to what's important across our entire organization, that will allow us to deliver strong results this fiscal year. Now, I'll hand it over to Joe and he'll walk you through the numbers and share guidance for fiscal '24. Go ahead. Joe..

Well, thank you, Kevin and good morning everyone. The results reported in this morning's press release represent the completion of a successful fiscal year, in which we turned the overall direction of our brands, created a stronger foundation for growth and build operational momentum heading into the current fiscal year.

For fiscal '23, Brinker's annual revenue was $4,133 million and our adjusted EPS was $2.83. Let me start my comments with several financial highlights for the fiscal year, followed by an overview of the fourth quarter performance, before ending with comments and specific guidance for fiscal '24.

During the recently completed fiscal year, we initiated investments into the Chili's brand through greater labor and maintenance spend, that are bearing fruit by supporting an improved guest experience.

While incorporating these necessary costs into the Chili's business model, we still realized improved restaurant level economics as we move through the year. Operational simplification, more aggressive and appropriate use of price mix and cost of sales improvement were the primary contributors to the change.

Maggiano's moved fully out of its post pandemic recovery mode and delivered record pre-tax profits for the brand. With particular success in solidifying their off-premise channel. Brinker delivered top and bottom line results that strengthened through the year and finished well within the guidance range as updated at midyear.

Overall, we are proud of the work our team members delivered and the progress made through the year, particularly around initiatives to improve team member and guest experiences, efforts that will lead to greater guest engagement as we move into a more robust traffic driving phase of our strategy.

Now moving to a overview of fourth quarter financial highlights. For the fourth quarter of fiscal 2023, Brinker reported total revenues of $1,075 million, with consolidated comp sales of positive 6.6%. Our adjusted diluted EPS for the quarter was $1.39, an increase of 21% from fourth quarter last fiscal year.

Both brands reported meaningful top line sales growth with Chili's coming in at a positive 6.3% for the quarter, driven by price of 9.4% and positive mix of 4.6%, partially offset by negative traffic of 7.7%. Comp sales and traffic improved as we moved through the quarter, and the brands positive gap to the industry widened.

Importantly, dining room traffic for the quarter was positive when compared to the fourth quarter of fiscal '22. I would note Chili's is maintaining strong sales momentum in the beginning of this fiscal year, as well as further widening their comp sales gap to this sector.

Maggiano's also recorded a solid fourth quarter, with comp sales up 9.1% driven by positive price of 9.5%, partially offset by slightly negative mix in traffic. As mentioned earlier, we improved our restaurant operating margin with a fourth quarter consolidated ROM of 13.4%, up 90 basis points from the comparable quarter of the prior fiscal year.

The improvement was primarily driven by sales leverage from greater price mix in the quarter, and year-over-year improvement in cost of sales. Commodity markets moved in the right direction with inflation just over 4% for the quarter.

Our investment into incremental labor hours to improve operational performance and wage rate inflation firmly in the 5% range, were the primary drivers of increased labor expense for the quarter.

The third component of ROM, restaurant expense, was impacted year-over-year by our strategy to increase both advertising and repair and maintenance spend, both of which we believe will positively impact our brand awareness and guest engagement.

In addition, we recorded a year-end adjustment to increase our reserve for workers' comp and GL insurance liabilities that reduced adjusted EPS by approximately $0.05. Our adjusted EBITDA for the fourth quarter and fiscal year, was $114 million and $345 million, respectively.

This level of performance allowed us to reinvest in our restaurants, while also paying down $87 million of debt over the course of the year. At year-end, our funded debt leverage ratio declined to 2.6 times and our lease adjusted leverage declined to 3.8 times.

We will continue to utilize free cash flow to reduce outstanding debt with a target of reducing our funded debt leverage ratio to two times, a target we believe achievable before the end of calendar '24. During the quarter, we opened seven new Chili's restaurants, bringing our fiscal year openings to 14.

Our recent openings continue to be a source of strength for Chili's, with three of the openings this quarter setting back to back to back, opening sales records, showing the continued relevancy of the Chili's brand. Now to fiscal 2024.

Company sales for the current fiscal year will continue to benefit from favorable price mix dynamics, although at a reduced level from the low teens combination of fiscal '23. For the current fiscal year, we expect consolidated comp sales growth in the mid-single digit range.

As it relates to labor costs, we expect wage rate inflation remaining sticky in the mid-single digit range. The first half of the year will also be impacted by the incremental labor hours we built into our model during the middle of last fiscal year.

As indicated at our recent Investor Day, we expect this to be approximately $20 million of incremental spend during the first half of the fiscal year. One of the more meaningful changes when compared to fiscal '23, should be food and beverage inflation.

In the category of what a difference a year makes, we expect commodity inflation for the fiscal year '24 to be approximately 1%. When compared to the respective quarters of last year, we expect commodity price to be deflationary for the first two quarters, with a low single-digit inflation, the last two quarters.

Enhanced marketing will be a key driver for Chili's in this fiscal year. We expect to spend approximately $55 million to $60 million more in marketing expense during fiscal '24, when compared to fiscal '23. And finally, restaurant development has 12 new openings scheduled in the fiscal year.

In this morning's press release, we included some specific guidance for certain reportable items. This incorporates our existing view of the macro casual dining industry, our strategy to drive positive performance at both brands and our capital allocation priorities.

For the fiscal year, we are currently forecasting total revenues between $4.27 billion and $4.35 billion. Adjusted earnings per share in a range of $3.15 to $3.55, capital expenditures between $175 million and $195 million and weighted average shares, in the a range of 45 million to 46 million shares.

In close, we are proud of the progress we've made and are continuing to make in building a solid foundation for future growth. We owe many thanks to our team members, both in the field and at our restaurant support center who are hard at work improving the business on a day-to-day basis.

Their efforts have created strong momentum that we are confident will drive the business forward as we move through the fiscal year. And with my comments now complete. I'm going to turn the call back over to Holly to moderate questions..

[Operator Instructions] Your first question for today is coming from Dennis Geiger at UBS..

Great, thank you and thanks for all the color on the market share.

Maybe we could start there as it relates to market share through the quarter, any comments on how that traffic market share trended through the quarter? And then, Joe, I wasn't sure if you made a comment on starting the new fiscal year or not, but any comments on how that has looked into the beginning of the year?.

Yes, sure, Dennis, and good morning. Yes.

Traffic dynamics - comps and traffic dynamics improved as we move throughout the quarter being the quarter and I think you heard some of the similar commentary from others in the sector, was a little bit below expectations in kind of that April, early May kind of timeframe, but definitely improves of both traffic, getting better, gap getting better and overall comps getting better as we move.

So some nice momentum coming out of the quarter, which we have definitely maintained. Very excited about what we're seeing in the first, really seven weeks of the current fiscal year, maintaining that momentum both on comp sales, traffic and continuing to widen our gap to the industry..

That's great Joe, thank you. And then just one more, a lot of initiatives clearly in progress and resonating.

Just curious on customer behavior that you're able to kind of parse out? Any changes, behavior-wise, purchase intent-wise, that you're seeing within different customer cohorts are or anything notable from that perspective, as you move through the quarter? Thank you, guys..

Yes. From a macro standpoint, our internal metrics continued to improve. So when I say internal metric, talk about server attentive, intent to return, food grade scores, they are all headed in the right direction.

From a cohort standpoint, the low-end customer is hanging in there, we haven't seen any change in frequency, quarter to quarter, the high-end customers, or the higher income customers is actually coming more often and then that middle ground, we've seen a little bit of fall off.

But all three of those cohorts are actually spending more than they were a year ago.

So the net of it is, it's a little bit mixed, right? You've got a higher income customer that actually is coming more often, the lowest income customer is about the same and that middle ground, we've seen a little bit of drop-off, but yet all three cohorts are spending more..

Great, thank you guys. I appreciate it..

Your next question is coming from David Palmer at Evercore ISI..

Thanks, good morning. I'm just wondering how you're thinking about - I think I know the answer to this, but the thing is about how you're sort of targeting key metrics, your guidance implies a 100 to 150-ish restaurant margin basis point expansion in '24.

I mean you can correct me if I'm wrong on that rough math, but that's both good and it's a fairly tight window. In other words, you get a lot of leverage on your business model.

Are you targeting price according to really target the right margin? And I wonder what - when and how you think about, when you start targeting traffic as a key metric? And I guess maybe related to all this is - should we assume that you're not going to be taking more price than the carry-over four points of price going into fiscal '24? Thanks..

David, this is Joe, let me deal with the price piece of the equation, then we to segue into traffic. We're going to be targeting both, the year on the pricing in particular, the year is going to benefit obviously from pricing actions we took throughout this year.

I think there - we're very comfortable with where we stand relative to the industry from a pricing standpoint. I do think that there is some more price available to us. We're actually also in the early stages of working with a third-party consultant on even becoming more sophisticated in our ability to apply price throughout our various markets.

But I think we'll take a little bit of incremental price, probably mid-single digits here in the first half of the year later on in this quarter, and then move into a low level of pricing impact in the back half of the year.

We'll maintain that optionality if prices are available at that time, but not embedding the plan to have a lot of incremental price in the second half of the year.

You'll see the impact of price on a quarterly basis kind of decrease as we move through the fiscal year kind of starting most of this from carryover, and a little bit of incremental price we're taking in our next menu.

You're going to see that move from the kind of high single digits down to the mid-single digits as you, as you work your way through the year on a quarterly basis..

And then from a traffic standpoint, David. Here's how we're thinking about it. So if fiscal year '23 was kind of a reset year, where we're getting the investments in the right places, taking some pricing to buildup up some dollars to reinvest back into the business, getting out of unprofitable sales.

I would characterize fiscal year' 24 as, now we're reinvesting in the business to grow traffic.

And so, the biggest change - we talked about several of the traffic initiatives that we're driving in '24, the biggest one I think that would be important for you all of you to know is, going into the deep end on how much money we're going to invest in advertising.

So we're going to move from four weeks of advertising last fiscal to 21 weeks, right? Which is 17 more weeks and Joe kind of articulated in terms of dollar amount of $55 million to $60 million incremental.

Why we feel very confident about that is that first four week blast that we did back in March, we saw the first compression of traffic versus the industry trends, even though we're cycling through, getting out of those unprofitable sales and that unprofitable traffic, right? So we saw sequential improvement versus the industry.

And so we're very confident that that will continue throughout the year and then accelerate as we cycle out of the things that we're doing to remove the bad traffic.

So, there's going to be two things happening through the fiscal, one is this influx of an additional $55 million to $60 million of TV spend, which we now has proven that will grow traffic and shrink that gap versus the industry.

And then the second piece will be as we start rolling off the things that we've been purposely doing to the business strategically, I think you're going to see a sequential acceleration both in market share and in traffic trends..

That's great. Thank you..

Your next question is coming from John Ivankoe with JPMorgan..

Hi, thank you. A question on advertising, especially as you bring it up.

For you to be doing 21 weeks of advertising, obviously that's not 40 or it's not 52, and you are competing, especially on the QSR side, in the better performing QSR side, brands that really do dominate the airways in some cases of, you know with burgers and chicken, and we've talked about before, you have a lot of competition that's growing very rapidly in the chicken category, particularly, kind of all around you, is there any sense or worry - listen, I understand '24 is a different environment than what we had in '19, but is there any fear or worry that just advertising is just going to be a cost of business going forward.

In other words, as opposed to actually driving you a positive ROI kind of prevents you just from sales from declining.

In other words, how do we see that it's a positive as opposed to just avoiding a negative at this point?.

Yes I zero worry about that. The way I think about advertising and I thought about this throughout my career. There's three things that determine whether you're advertising is going to be impactful or not.

First one is, what are you advertising? Like, if your advertise something that's poor, it doesn't matter how good the ad is, it's not going to drive your business.

And we've got unbeatable value with 3 for Me and we've got some awesome innovation coming in and our Core Four that I'm very confident about, both the quality of those products, how they look on screen, and how they will drive traffic inside our restaurants.

The second piece of it is the advertising any good? And we've built a world-class team with George Felix and Jesse Johnson, we've just hired a new VP that I don't want to release right now, but that's exciting too. And then we're bringing these world-class agencies into our business.

And so, these guys know how to do advertising and they know how to do food advertising and drive people into the restaurants.

And then the third is, do you have enough money set aside to get to the weights, to get to the TRPs that are required to move the needle on the business? And we saw that the first slug of advertising that we did last fiscal, we are very encouraged by what we saw based on the level of spend and the quality of advertising.

And the reality is we're going to do that another four times next year or this year. So, I'm very confident that that's going to continue to close the traffic gap. That's what we've seen in the numbers.

So there's nothing that we haven't seen based on what we put in market that would, that would say that strategy is not working, and we'll continue to do that and continue to build on it, because right now it is closing the traffic gap versus the industry and accelerating our market share..

It's a perfect answer. Thank you so much for that.

And secondly, one of the challenges in this model is, these mix gains that you really don't normally really ever see in casual dining and especially bar and grill, offset by negative traffic in at least - in this most recent quarter and several of the quarters in 2023, that was actually a greater negative than the mix was a positive.

So, kind of balancing out those two numbers is an essential part of the model in '24. Do you have a quarter kind of in mind or do you think, is there a quarter where we will see mix being greater than traffic in some capacity, however you want to add those two numbers.

Where is that inflection point where the net negative becomes a positive in your mind?.

I think you'll get them closer together as you kind of move towards the second half of the year. I'm not going to commit one way or the other on mix relative to traffic.

I think again, we see mix as a continued opportunity in the component of what we're trying to do, and when Kevin is talking about the work around the Core Four and then the ability to market against things like the new Crisper platforms and things of that nature, that will generate some mix opportunities.

So I think one of the bigger - we're going to continue to benefit on mix from lapping of removal of discounting as you get to the year, but I think you're also going to be shifting into the opportunity of mix through innovation and incremental platforms and upsell merchandising within the restaurants.

So again, not going to give you kind of mix versus traffic specifics, but I definitely see those two, getting closer together as we move through the year..

That's perfect. Thank you, Joe..

Your next question for today is coming from Brian Vaccaro with Raymond James..

Thanks and good morning. I just wanted to circle back on the market share discussion. Just so we're on the same page Joe, and there's a lot of different industry benchmarks that are out there.

Would you be willing to provide any quantification of Chili's relative traffic performance, moving through fiscal fourth quarter and what you've seen quarter-to-date?.

Again, what our readout is, we saw improvements in traffic as we move through the fourth quarter, that momentum is continuing as we move into the first seven weeks here of - today's the end of the 7th week of our of our fiscal year.

During that time we've also seen a reduction in the negative traffic gap to the industry, which has also continued into - so the overall comp positive gap to the industry continues to widen, much of that driven by a shrinkage of the negative gap to the industry on traffic..

Okay. And on the fiscal fourth quarter, the traffic at Chili's. I think last quarter you had said the Maggiano's classics, we're moving that and discontinuing that, what was a 60 basis point headwind to traffic.

Could you help us frame how much of an impact that was here in the fourth quarter, now that it's fully out of the system?.

So we - Brian, it's Mika. So we closed the MIC brand, the very last day of the fiscal year, but we had closed some before that. So it's still about 50 to a 100 basis points negative impact on the quarter..

Okay, great, thank you for that.

And just a couple questions on the guidance, if I could? I think, Joe, I think you said 12 openings, gross openings for the year, should we expect relatively flat on a net basis, given kind of continued modest closures and relocations and that sort of thing?.

Yes, that's a good way to think about it..

Okay.

And then I guess on the EPS guidance, could you level set us on what tax rate is embedded in your guidance and any directional guide on what you expect on general and administrative costs?.

Yes, on both of those two, we're expecting a mid-single digit, 5% to 6% kind of tax rate at this point. Obviously, you look at that and adjusted based on the flow of your credits.

We had some really strong FICA and WOTC credit activity this last year, driven a lot by dining room traffic coming back in, and increased overall check, which actually drives up tip, so good credit components there. But we think we'll be in that mid-single-digit range for the fiscal year. That's what is implied currently in our guidance.

And from a G&A perspective, I expect G&A to be up year-over-year, probably in the $10 million to $11 million range. Most of that is driven by various adjustments on comp related items, from stock comp, to payroll, to 41 k participation.

And then there's $2 million to $3 million of incremental spend from an IT perspective that makes up that that differential..

All right, thanks very much. I'll pass it along..

Thanks, Brian..

Your next question is coming from Brian Harbour with Morgan Stanley..

Yes, thank you. Good morning. Maybe just kind of a bigger picture question on sales. You've seen kind of this improving trend more recently, and I think some of your peers have as well.

Are you assuming in your guidance, that sort of - that that holds up, do you think there is anything that's helped here kind of at the, at the end of the summer, just as we start to think about the next couple of quarters. I realize that maybe there is a tougher lap in the calendar first quarter as well.

Could you talk about how you think about that?.

Yes. Again, the momentum we're seeing in the business, we think is sustainable. I mean it's being driven by the initiatives and the strategies. Again, I'm not going to suggest that July or August performance is going to be the exact performance as you go forward.

You do get in - the first quarter will have the largest and easiest lap year-over-year, kind of up and down the P&L, which we will be very happy to see the anniversarying of last year's first quarter.

And as you move into the second half of the year, you do have a little bit higher hurdles and laps to get over, but we're very comfortable that we have the strategies and initiatives in place to get over those hurdles as we move forward and very comfortable and confident in the guidance we provided you today..

Okay. Thanks. Joe, could you maybe also just talk about labor costs.

I know we still have kind of the investment coming in the first half, do you think that some of the initiatives you're doing on retention, could be somewhat of an offset to that? Or on the flip side, do you think there is still other investments that need to be made?.

So I'm going to be taking those in reverse. I think we're very comfortable that we've made the investments that need to be made. As I mentioned that incremental $20 million of spend is the first to - the impact of the first two quarters is based on those investments that have already been put into the labor model. So, a good line of sight as to that.

Again, I do think the initiatives on turnover are helpful. They do reduce a lot of costs related to over time and training and things of that nature, and major shout out to our operators who are doing a great job in moving those specific numbers, where we want to see them move as we go through this fiscal year.

So again, I see some nice upside opportunities there if we can continue to work that middle of the P&L, as well as they are working in the middle of the P&L right now. The wage rate embedded in our thought process I talked about is kind of that mid-single digit.

So that's - that'll be the interesting one to watch as you continue to see year-over-year wage rates, if they stay in that mid-single digit range. Or if you start to see any kind of benefit coming out of that..

Thank you..

Your next question is coming from Chris O'Cull with Stifel..

Thanks, good morning guys. Kevin, I was curious to get your thoughts on re-imaging existing assets.

I'm just curious what can be done at existing units to kind of create a more modern environment, that kind of matches up to the look and feel you've created with the new menu and marketing campaign?.

Yes. So good morning, Chris. So what we're focused right now is, we're still focused primarily on repairs and maintenance of the existing fleet. So making sure that the equipment is in good working order, that the facilities are clean and well maintained. And so, we're spending the majority of those dollars on that.

We are doing some re-imaging of older assets where we tend to get a better return.

So these are ones that have been touched on a long, long time, but it's right now, I'll just be candid, it's not as big a priority as making sure the equipment is in good working order and the facility from a dining room standpoint looks, where it needs to be for guests.

I think over time, as we continue to deliver results and accelerate progress, I think we're going to look at that, but I don't view that as like the biggest pressing opportunity right now, based on where we could be putting our investments in terms of driving traffic.

The labor investments they'll complete by the end of this year, the ones that we talked about last year. And then the repairs and maintenance. So it's just not as big a priority, as some of these other things, but I would anticipate revisiting that discussion, probably a year from now assuming we have the results that we expect to have..

Okay, that's helpful. And then, Joe, I had a question on the guidance, the revenue growth guidance was roughly in line with the multi-year targets you guys provided at Investor Day, but per share range implied growth that was much wider than that 13% to 17% range.

Can you give us a little detail or as to what's causing the range to be wider from a bottom line standpoint, and maybe what assumptions gets you to the low and the high-end?.

Yes, again we did widen the range a little bit relative to the target, the longer-term targets.

I guess, we'll obviously be able to give you more perspective on this as we move through the year, but again macro is probably the biggest issue as it relates to the lower-end of the guidance and as we kind of work our way through what the economic realities will be.

We expect relatively stable, but you still have a sector that is functioning from a negative traffic standpoint. So we want to be respectful of that on the low-end for this initial guidance range.

And then the high-end is going to be incremental success as it relates to some of our initiatives, particularly the traffic driving initiatives from an advertising standpoint, coupled with the ability for the management - operators to manage the P&L a little bit tighter, as they can get more muscle memory into the system as we kind of go forward.

So, those are really the two biggest things that will drive those two ends of the spectrum, there..

Okay, great, thanks guys..

Your next question is coming from Andrew Strelzik with BMO..

Hi, good morning. Thanks for taking the questions.

My first one and kind of revisiting a topic that was brought up earlier, as you're rapidly ramping the advertising spending with a focus on the value messaging, what gives you the confidence that you'll be able to use the in-store merchandising to drive the check and not lean too much into the value side of the equation.

Is there any texture or incidents metrics you can share kind of so far, what you have seen on that front?.

Yes, I mean that's been a real big bright spot. The way we've - structured menu merchandising and PLP inside the restaurants since we started the new strategy.

So number one, it's about making sure that the customer that comes in, for3 for Me or whatever that value messages, they can find it somewhere on the menu, but we don't want to make it so obvious where the guests that didn't come in for that trades down from a Fajita or any of our other items that would drive more check and provide a better experience for that guest at higher price.

So, the results of what we've seen on that is that the 3 for Me mix has come down pretty significantly, even as we've taken pricing. So typically when you take pricing and you do couple waves of it, you typically would expect to see more mix start to shift into the value parts of the menu.

We haven't seen that, in fact we've seen just the opposite where 3 for Me over time has actually gone down from when we started this journey. It looks like it's about flattened out now.

So we're not, it's not like we're seeing a bunch of folks now, as we've seen the macro change a little bit, we don't see customers trading into the3 for Me, and I think it's part of it is, because of the way we are orchestrating the menu merchandising.

The one area, I think we can do a little bit better job of actually providing some more presence on value inside the restaurant is our Margarita of the month, where we do - we've seen overall Margarita sales increase, because of the premium margaritas, but we feel like we can get better incidents by just driving a little bit more menu merchandising of Margarita of the month, at the point of purchase, to make sure we get that incidents with all guests.

So, but overall when you just look at the mix of 3 for Me which is the primary value message inside of our restaurants, the direction that it's gone in the last 12 months has been so positive. And oh, by the way, when they are in 3 for Me and more than half of them are not starting at $10.99 they're trading up.

So, we feel like we have a recipe for success on that. And this is, this is a page out of the QSR playbook, where you use great value to drive traffic, and then execute menu merchandising for the guests, that didn't see that ad and - I think we'll continue to do that.

I think it's been relatively successful in closing traffic gaps versus the industry, but continuing to drive menu mix in our business..

Okay, that's great. Thank you. And then just a quick one on lowering the hourly turnover. What do you think is really the key of the unlock there? I mean you've talked about the progress you've made on the manager side, but from an ROE perspective with some - actually increasingly engaging some of the folks in the restaurant.

I mean what - just something changed in terms of that focus or how do you think about that?.

Yes. We're working on that right now. I'd tell you the managerial side was a lot clearer, because the restaurants are just so significantly easier to work in now.

I mean we just had our manager conference last week, I was just kind of blown away by how many managers personally gave me the feedback that it's like night and day different, and that's helping with team member turnover. So we've seen team member turnover start to come down, but it's not where we need it to be.

We want to be ahead of the industry, not average or slightly behind. And so, that's why we're putting together our best Vice President of Operations' minds to come up with, what are some disparate solutions that would allow us to make better - more progress faster on that? Andrew, I wish I knew the exact answer.

We would have employed it this past year. So while we've seen improvement, it's just not where we want it to be. And I'm very confident that with the Vice Presidents making that their obsession metric in '24, we're going to make progress on it. And so, I'm excited to be able to share with you what that plan is at the next quarterly update.

But that team is working on it right now..

Great, look forward to that. Thank you very much..

Your next question for today is coming from Jeff Farmer at Gordon Haskett..

Good morning and thank you.

We know you're planning on advertising, but can you share your thoughts on what you're seeing from the promotional and advertising environment from your casual dining peers? Are they are they sort of following suit with you guys, in terms of getting a little bit more aggressive as it relates to a return to TV advertising or advertising in general?.

Yes. We saw little bit of activity that we typically don't see in July, but nothing has really seen out of place. So like, the usual characters are kind of doing their usual messaging. So that's not - we haven't seen any really difference in the behaviors, or the weights.

I do think that our move in fiscal '24 will be significantly different than we've done in previous years. The discounts aren't any deeper, but the shouting of them will be obviously a lot more when you move from four weeks to 21 weeks. We'll continue to monitor that very closely.

I do think - when I look at the offers that I've seen from competition and I compare them ours. I'm really confident about ours.

I mean I think - guest is cash-strapped to get a complete meal and an abundant complete meal that's very high quality, and to do that at a price point, and you know that you can get it for that price point when you come into the restaurant. I think it's very, very competitive.

Versus like, doing an offer on the part of a meal, or something that you'd have to buy other full price items to complete a meal. So I don't, I don't anticipate needing to change that offer, and I'm excited to see what 21 weeks will do for our business versus four, based on what we've learned what four did for our business.

So, I'm very confident that that plan is going to work, and we'll continue to monitor. We don't want to be naive about what the competitors do, but I do feel like we're in a place - we're in a very good place right now to continue to close that traffic gap..

Okay, that's very, very helpful.

And just one quick follow-up, so you shared a bunch of information in terms of your pricing expectations for 2024, in terms of maybe some early incremental pricing in the year and then some rollover pricing, but if you put all the pieces together based on what you know right now, what would you expect your FY '24 menu pricing number to be?.

Jeff for the year, we'll be in that mid-single digit range. Again starting, you'd expect to see the first quarter, you're going to have a little bit higher up in that upper single digit range, just thinking about price, working its way down into the mid-single digits as you go through the quarters and exiting the year at that level too..

Okay, thank you guys..

Your next question is coming from Jeffrey Bernstein with Barclays..

Great, thank you, Two questions, the first one. If I just think about this past quarter, and following up on that pricing comment, you were running nine points of price, the traffic was down 8 points. And looking ahead, it sounds like you said the comp for the full year is expected to be mid-single digit positive, with pricing mid-single digits.

So that's assuming - again unless there's big moves in mix, relatively flattish traffic. Relative to the current down 8%, it seems like a major move, and the industry we know, hasn't seen flat to positive traffic in 15 years.

So I'm just wondering, Kevin, I know you mentioned the three drivers as to what effective advertising does, but any concern or anything that would derail that, where the traffic could fall short of that - return to flattish again, it just seems like a big move from traffic down 8% with the current macro uncertainty so large.

And then I had one follow-up..

Okay. Hi, Jeff, it's Mika. So there are some nuances in those numbers, when we're speaking in ranges. So I don't think that we're planning to go flat on traffic. So we still know that the industry has been negative, and we have that factored into our expectations for F '24.

There's really some movement or there's - there some latitude in your price and mix assumptions to make all that work..

Okay. And then I think last quarter you mentioned that the consumer was maybe more discerning and skittish, and they were I think you said episodic pullback. So I'm just wondering, has that changed over the past three months? Do you think maybe that's eased a little bit and then I mean I assume that your response would be your value offer.

So I'm just wondering what is the current mix? However you define value that Chili's is at today versus maybe where it was a year two ago? Thanks.

When we look at value in totality, it's been relatively stable the last couple of quarters, it's up a little bit relative to a couple of years ago, but again we're, we're still in that 30% range that we've talked about in the past. I think as relative to your comments on the consumer behavior.

I think we've talked about in the past is there has been some episodic times that you see some skittishness driven - it could be gas prices last year, obviously had a period of time. The general macroeconomic commentary that goes on.

I think we saw a little bit of that in the beginning of the quarter, when you think about the commentary in the April, May timeframe and I've heard other folks talk to that. But the resiliency of the consumer is definitely still there.

So, whenever we've seen these short periods of possible skittishness if you want to refer to that, we see it come back. We've definitely seen that happen as we move through this last fourth quarter and into the current fiscal year.

So again, generally speaking, the consumer seems to be - where the consumer is, hanging in there, as Kevin said, we're seeing continued traffic from the different cohorts we look at. We are seeing increased spend from a number of those cohorts. And it is interesting to see the upper-income visits start to head up.

So clearly, whether that's trading into the brand or not. It's just, or just reaction to the marketing we're doing, I think that's a real positive to see, but right now the consumer environment, is there..

I mean the fact that the first seven weeks have been as much momentum, is an incredible testament to the resilience. So hopefully that whole. Yes, thank you..

Yes..

Your next question for today is coming from Eric Gonzalez with KeyBanc..

Hi, thanks for the question. I'm curious about one of the drivers you mentioned the prepared remarks.

Can you give us some more detail on how you're going to bring IJW into the real world? I'm wondering if you see that as a traffic driver or more of a check driver? And then, do you have the sufficient brand awareness, especially would it draw customers into the restaurants or is it something you might put advertising resources behind?.

Yes. So the way to think about it just from a what the customer is actually going to see when they come inside of Chili's. It will show up in two areas. So one will be the new bar menus that will be placed on the bars and in the bar area.

And there'll be a prominent page on that menu that just talks about IJW and Chili's collaborating on this, basically a lineup that would be It's Just Wings. So it will be Boneless and Bone-In Wings, different piece counts, all the sauces that are available in It's Just Wings.

And so, that will be very prominent in the bar, because we know that Wings and Boneless Wings are a big thing that people eat at the bar, especially when they're watching sporting occasions.

We will also have a smaller section on the dining room menu in the appetizers section, because that would, that would either be an add-on to an existing meal or a trade up from appetizers, given the pricing of wings. So those are the two areas that will show up for the guest.

From outside the restaurant, so because that's when we talk about driving traffic. It's really about like what are we going to be talking about the guests to get them to come in for these Wings primarily it will start with our CRM program. So as I mentioned we have this new CRM agency coming online. And if you look at some of the wing competitors.

A big part of their, of their traffic driving program is making sure that they are top of mind aware, during sporting occasions when you're in the market for wings, whether they are to-go wings in off-premise occasion or coming into a bar sports bar to watch sports and eat wings. And so, we'll have a heavy dose of that to start.

And then eventually because it's now a part of Chili's, in theory we could eventually put that in the TV advertising.

We have no plans right now to put it in TV advertising, we want to see what happens when we put IJW into the business and does it, does it have some offtake the fact that it would make sense to put on air, but we do think it's going to drive the business at a minimum, a little bit, right? But it could be a bigger thing, depending on what we see with the CRM program results.

So at a minimum, it's going to be a trade up, but we do think it could eventually drive some traffic especially during the sports viewing season, which really starts at the start of football..

One of the things I really like about the change too, is going to be the awareness of IJW that it's going to bring to the table. That's a brand that - well, from a virtual brand standpoint did well, it's awareness has basically existed on your third party platforms.

And so, now you're going to start to have some brand awareness being front and center to the Chili's population as we kind of move forward. So, it's a nice way to expand that awareness without the cost associating of marketing a third-party platform..

Yes, I mean, the best way to describe it would be, if you took like an upstart brand and said, okay, you can now have the distribution of Chili's. And you can have access to over 11 million CRM members, like is that something you'd be excited about? And the answer would be yes.

Like that is a huge amount of scale that you're bringing to a brand that is relatively small in the grand scope of food, right? That we think that could have some significant impacts to the It's Just Wings businesses..

Got it and then maybe just on the off-premise business.

I apologize if I missed it, but did you talk about what the mix was in the quarter and maybe if you could talk about the breakdown between carryout and delivery and whether you've seen any shifts there?.

Hi, Eric, it's Mika. We're still hanging in that same range as last quarter, 28% to 30% for the brand, and then we have about an even split between carry out and third party delivery..

Got it, thank you..

Your next question for today is coming from John Tower with Citi..

Great, thanks for taking the question. Just curious if you could get into the thinking behind on the one hand, you've got a lot of initiatives going on at the company to drive some traffic. But on the other hand, you've got food cost deflation running through - deflation at the moment.

And I guess for the year settling out at about 1% or so, and mid-single digit or so wage rate inflation. So can you talk about what the inputs are on year-end in thinking about taking the pricing of that high single at the start of the year, kind of flattening out or settling out at about mid-single digit.

It just seems that at this point in time it would be great period for you to lean into kind of that value offering that Chili's has with the consumer and an opportunity to take price - to take, take some traffic from competitors, but instead, you're taking a little bit more pricing.

So how do you balance that I guess?.

Well, the way we're thinking about it. We missed a lot of price during the pandemic, we've caught up a little bit versus the industry, but based on the competitors that you cover, I think you can figure out how much we missed over a three year period.

So, part of this is, we got to get an equilibrium in our business so that we can make the necessary investments, both in the facility, labor and advertising, to have a growth business going forward, right? So part of that is that we missed a lot.

And the second piece I would say is, I think we're going to be, make sure that we're really sticking to our guns on advertising value. And so that we get credit for value. And value it comes in two ways. One is there's attractive price points for 3 for Me, and talking about the abundance of food.

The other way you deliver values with much better experience. And we're seeing that. So the labor investments that we're putting in, the simplification that we're not scraping the labor front, that we're reinvesting that labor back into the business, is having a significant impact on food grade and server attentive and ultimately intent to return.

So, I believe we're going to continue to have the best value in the industry, even with the pricing that Joe described, because we're going to continue to elevate the experience.

And then if you look at like like-for-like pricing versus our competitors, we're either beneath them significantly or at parity with them, So it's not like I feel like we're getting out of whack in anything. If you look at Fajitas and Burgers and Crispers and either right in line or below what you see in all of our markets.

So, there's nothing that's alarming to me, as long as we continue to improve the experience, put those investments back into the business. To me it's about a long-term turnaround and I think we're well on our way. And based on the results that we're seeing, it's encouraging that we're making the right moves on that..

Okay, I appreciate that and pivoting on you a little bit, can you just maybe drill into how we should expect the cadence of the advertising spend to look throughout the year? I know it's 21 versus four weeks, but is it going to be chunky around say the football season or evenly spread throughout the year?.

Yes, so, which our team believes in - I'll borrow your term, chunky. So, you'll see blasts once a quarter, where we have high weights that you'll be able to see around tentpole, we call them tentpole events, could be sporting occasions could be other things that are happening in the TV marketplace.

And then in between the four tentpole events, you'll see kind of an always-on strategy with digital and social advertising. And then there'll be possible - they call - the team's calling culture pops, which are kind of events or stunts that will just keep Chili's in the news between those big tentpole TV programs.

So to answer your question, it would be more chunky once a quarter, and then you'll see it supplemented with social and digital throughout the year, as well as kind of these PR events, just to keep Chili's top of mind..

Cool. Awesome, thanks for taking the questions..

Your next question for today is coming from Chris Carril with RBC Capital Markets..

Hi, thanks and good morning. Maybe tying together some of the previous responses and just following up on restaurant margins. Obviously a lot of moving pieces, just given the commodity outlook you provided, the run rate of higher labor hours and R&M expense in the first half of the year.

Of course, advertising, but generally, how should we think about the cadence of margins over the course of the year.

I know, Joe, you had called out, obviously favorable lap in the 1Q, but just trying to think about the potential for margin improvement in the 2Q and beyond?.

Yes Chris, let me give you a little color on that.

And obviously we think from an annual perspective there is some nice upside to the restaurant operating margin for the year, I think that will definitely, meaningfully exceed the 30 to 40 basis points, annual targets we talked about it, at the Investor Day off for obvious reasons on what's happening in particularly the commodity markets.

I think you're going to see an oversized gain in Q1. It's going to be an increase of a couple of percentage points or more in Q1. So that's the largest year-over-year gain that you're going to see.

And then I would expect to see improvement as we move through the rest of the quarters, improvement I would anticipate will get narrow in the Q3 and Q4, as you get lapses that are, that are more year-over-year, normalized.

So again, nice opportunity to move forward on ROM for the whole fiscal year, that outsized lap in Q1, and kind of narrowing as you get down through Q4..

Great, thanks for that. And then I guess just drilling down on the commodity outlook, specifically. Could you maybe unpack what items specifically are driving that outlook, and I don't know if you disclosed it, but how much you have locked in for the year? Thank you..

Hi, Chris, it's Mika. So for F '24. Obviously, Joe talked about deflation in the first half and then we'll have some slight inflation in the back half. Obviously, poultry is going to be a good guy that's really driving that favorability in the first half, with commodity pricing and with mix. As we're selling a lot more chicken, which is great.

Beef is something that is inflationary throughout the year. As far as contracting goes, we have a lot of the steaks locked up really through the fiscal year. Our ground beef is still on the market a little bit. As far as contracting goes, looking into next year.

The first quarter, we have a good line of sight, really probably over 90% were locked in on that it goes a little bit down as the fiscal year progresses. But we'll continue to take advantage of the market and opportunities and ensure that as we get through the fiscal year..

Great, thanks so much..

You're welcome..

Your next question is coming from Alex Slagle with Jefferies..

Hi thanks. Just wanted to ask a little more on rewards and the CRM efforts. new agency. Realize the revamp will take place over a couple of years, but just curious, if there are there some initial changes underway that could help drive traffic and profitability in '24.

And it sounds like it from the talks on It's Just Wings, but I don't know if that step-up is more coming in '25? Or if we do see some of that in '24? And maybe just any commentary on where we are discounting relative to 2019?.

Yes. So the agency is literally onboarding in the next few weeks. So, we don't have the new strategy laid out yet. What I can tell you is, it's going to be continued less discounting. So we removed some discounting last year, a significant amount.

We're going to continue to remove discounting, probably at a slower pace probably don't need to do it as dramatic as we did last year, but we're going to replace those emails with more relevant emails and more of the relevant emails so that on a per email basis you have a lower redemption, because you're not giving away as much value, but because you're able to send more emails out and they are more relevant, over time, you would expect to get more traffic from those, not less.

It just wouldn't cost you as much so. So for example, a lot more emails around sporting occasions where we know that the guests, either wants to come inside a restaurant or a bar, or be able to carry out food to consume at home and watch this sporting event.

You'll see more of that you'll see more relevance around other occasions like week day dinner and making sure that we're driving our carry out business.

We just weren't doing those things in the old CRM program, was really about what you could get for free from us versus like here's how Chili's fits in your life, based on these occasions, whether it's going out to eat or easy home or replacement at home. So I expect that will be the strategy now how GALE brings it to life.

I think, I think you can look at some other restaurant brands that they work with. Part of the reason why we're so excited about them coming on as we've seen them really transform another restaurant programs or CRM program, and we think that we want. We want exactly that.

So that will give you more, some more insight about how we're thinking about transforming our CRM program over time..

Yes. And Alex, one thing I would say from in the year for the year kind of standpoint, that step change and the upside opportunity is not embedded into our thinking, or our plan for this fiscal year. So looking forward to see what GALE is going to bring to the table, but we're not, we're not relying on it for this year to drive the numbers..

Got it. That's helpful. Thank you..

Your final question for today is from Katherine Griffin with BoA..

Hi, thanks for fitting me in.

So I wanted to ask question on check management, just in the event that the consumer does start to pull back sort of contemplating the lower-end of the guidance, can you talk about how you think about the sequencing of how consumers might manage their check? Would you expect to see at the bar first? And then on sides? Or starting down with trade down on the plate? I think that would be, that would be helpful..

Yes, I mean I think. I think what you just said is probably right. As you'd see it first alcohol attachment, both in terms of incidents and trade down. And then eventually, you either see it in lower appetizers.

And my guess is, you'll probably see more people trade into 3 for Me, just because it comes with an appetizer and it's a relatively low price, but we just haven't seen that yet. So for example, quarter-on-quarter, the 3 for Me mix basically is unchanged. Number of checks on deal was basically unchanged.

And then, we've seen overall higher mix - significantly higher mix in this quarter and we don't expect that to change at least in the near term.

So, but I do think that the types of things that you would see, and so likely, what you would do is make sure that things like the Margarita of the month is more prominent, so that guests know they can get $5 or $6 Margarita, as well as potentially looking at making sure that they understand there's 3 for Me there if we feel like there is a pullback, but so far we haven't seen it, but I think you're thinking about it right, those were the first places that you'd see..

Okay, thank you. And then I wanted to ask a question on the labor. So either in terms of retention or in terms of labor availability as you're hiring.

I was wondering if you're seeing sort of any like demographically specific success in terms of which groups, younger or older you're seeing more success with retention or hiring?.

Yes, I mean I don't have that data, I haven't seen it cut by demos, but it's certainly something we can look into. If there's like, there's an insight in that question that we should take a look at, but I don't have that answer, Katherine.

Okay, great, thank you very much. Well, thank you everybody. That concludes our call and we look forward to our next one in early November. Bye..

Thank you everybody. Everybody have a good day..

Thank you. This concludes today's conference call. You may disconnect your phone lines at this time and have a wonderful day. Thank you for your participation..