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FRGI Fiesta Restaurant

Participants
Raphael Gross Managing Director at ICR
Rich Stockinger President and Chief Executive Officer
Danny Meisenheimer SVP, Chief Operating Officer
Cheri Kinder Incoming CFO
Will Slabaugh Stephens, Inc.
Joshua Long Piper Jaffray
Brian Vaccaro Raymond James
Call transcript
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Operator

Good afternoon, and welcome to the Fiesta Restaurant Group Fourth Quarter 2018 Earnings Conference Call. Today’s conference call is being recorded. At this time, all participants are in a listen-only mode.

Following our presentation, we will conduct a question-and-answer session. Instructions will be provided for you at that time to queue up for a question. to at call ICR. like Gross, to now Director Managing would turn over the Raphael I

Raphael Gross

close Good quarter was market XXXX everyone. earnings afternoon, Fiesta release issued Restaurant after Group’s fourth today. the

accessed it, you the website, under www.frgi.com, not If Investor section. it company’s Relations have the be found can on already

release. Important implied company differ Any discussion GAAP measures factors in SEC be that is can that the can those filings. be measures be call, non-GAAP will in regarding Please and a which and budget, inform without no I’d the to comparable projected such information. company’s what are the during prepared GAAP the costs not reconciliation of assurance business the financial on statements statements will that forward-looking by earnings expressed that evaluating statements be future historical discussed and be call limitation, various results found such company’s its materially today, and we begin, in in in information operations, available certain you should note make plans, that Before operations. the results and useful the not forward-looking to can isolation statements for of Actual performance. such include, from forward-looking statements may These from considered statements and forecasted differ materially to like substitute as or accordance to objectives position outcomes prove the give of for conference forward-looking financial during company today’s can believes cause company’s actual will future correct. results or or based with expressed is management results company in strategy,

Officer are call turn Operating and Accounting Rich. On President over Senior Meisenheimer; Interim President, Cheri Kinder. I Officer, Tropical Vice Chief will Chief the Chief now Stockinger; And and Officer, Pollo brand Officer Chief Danny and Financial and the Executive President, Rich today call to

Rich Stockinger

Raph. we you, to XXXX but the is affinity by now results and their energized foundation the still potential. beginning the is for place, initiatives be driven the as investments Renewal implemented There’s were Plan by in and and in team strong place work our XXXX. long-term Thank Strategic much our done we brands put firmly in

Florida, As our initiatives will of the new such, as resources, efforts of our although and build Strategic all marked value catering Pollo third-party portfolio of remaining a in the conclusion nine we restaurants a speak number the we Renewal in Plan, our as restaurants entailed for no in remain out review closing longer program of plan for ongoing including but tenants some expanded dedicated path performing In held re-launch Pollo other improve with shareholder the if December, there along the our Taco Pollo it Unfortunately, that the no we results had struggled plan. experience as in positive to not Cabana part it. Atlanta Texas. in time, experience made hope of same markets the Tropical reasonable had had time would enhancements did we also forward restaurants momentum the with XXX loyalty with place. Tropical delivery programs, completion Tropical nine the and of our Atlanta, and Atlanta comprehensive that market had to was

our growth long-term on will continue quality we a restaurant shareholders. improving XXXX in value profitable traffic platforms place healthier create entered a from our operations, delivering trends, characterized more experience, pace, of and consistent, actions build year these With behind distinctive by to and and improving programs for guest metrics, traffic focusing building guest This a position sales realizing improve expansion strength, us, we margins. margin fundamental to

Pollo Tropical a with fourth quarterly decline refined year, we X.X% after this potential broader expansion. later Tropical appeal quarter for mass addition, sale In restaurant consecutive to of restaurant future three recorded test comparable concept the comparable the of after fourth plan strong in and restaurant XXXX we Pollo develop the Hurricane XXXX. in to by was XXXX. recovery recorded supported in the higher period advertising decline Tropical sales significantly very re-launch, due This quarter arrived Irma in Pollo from late growth and which spending brand quarters

Florida. highest largest December in Importantly, or led markets, monthly counties our Broward in we NPS had Score and by Pollo Tropical South our Net at Miami-Dade Promoter

the Pollo XXX by approximately fast-casual XX industry basis Our XXXX restaurants points, at In confidence restaurants basis NPS the we're through peer new improving XX Pollo this X.X%. XXth. that decreased Black score quarter worse Tropical restaurants Tropical sales of give existing and our our overall guest February more of Box through impacted during into restaurant restaurants Sales promoters us sales and experience comparable restaurant Tropical negatively comparable cannibalization first timeframe than sales turning brand. on comparable from trajectory guests sales were February approximately Pollo points.

industry experiencing are are transactions gap we the of improved said, trajectory believe can they January clearly and February and Black should compared that the With traffic where and not our be. We results and results. Box are in to closing our between sales trends

like re-launched and address price to messaging of competitiveness month in from our improved and doing not from to under in and therefore value are catering, are in often scores, view that value as of NPS this, as guests platforms and we've they to us rising would this full-service loyalty. visiting feedback To equation, is what perceived the both this they the beginning value are everyday transactions We further head taking on brands. terms limited sales. concurrent strong see Despite steps address with delivery we're

accentuating We've Chicken Saturday that offers Quarter agreement dinner in still enjoy way them weekday Time is TC and offerings quality announced offering a Time Original our own the delivery of Pollo for platforms at as the have value lunch value offers partner. points. ability platform Note launching margin that favorable consists on-board Family called think bringing Pollo our in Chicken we of at these place Time. recently Our a Half $X.XX have similarly favorable $XX.XX go value and $X.XX Cabana with Taco chicken along price the of Sunday. everyday We its we long will into now with entered an XXXX. our and to DoorDash as these very contract at a food Meal,

basis restaurant million. the level Pollo improved million XXXX. EBITDA to $XX.X adjusted For quarter, Tropical adjusted margins fourth percentage to compared of of as restaurant to fourth EBITDA restaurant level improved the XXX a XX% $X.X quarter points And sales,

our XX and growth our Turning the improved to we Taco Cabana, brand December San generated we ninth month of positive XXXX. NPS through the comparable with grew core market, significant by in restaurant improvement operate X.X% sales restaurants. quarter sequentially consecutive sales where over at restaurant comparable Antonio in

of Black than we Cabana's We through impact quarter X.X%, peer to through that Taco new our about sales had February scaled attracting XXX fast-casual restaurant loyal better negative on February XX, a comparable the which sales of believe continued Taco restaurant comparable improving early of continue back In sales believe guests We lead Box basis points sales. will are cold transactions. Patio increased XXth. XXXX and comparable Cabana comparable first we comparable XXXX to in weather restaurant industry because restaurant Program

consolidated through sales, level of as fourth million. Service XX.X%. represent defined our Taco to acknowledge CFO restaurant margins XXXX. as quarter former her the to adjusted to of Restaurant quarter, away Schweinfurth increase SEC a million departure $XX.X improved of value. again restaurant sequentially of the filings menu to level CEO, and we quarter XXX compared adjusted generally the Lynn Quick improved planning we to guest improves. EBITDA EBITDA who to to revenue experienced the also margins adjusted base the measure non-GAAP of growth $X.X fourth strategic promotions our the an good EBITDA -- I left level trajectory a deep as in want X.X% expand of XXX from million, of Cabana's time month. our XX% her Accounting recent and and And charge the CFO. evolve a basis restaurant Taco offerings to points as the until in leading weather Interim continued best name We Cabana team we placed finance Fiesta with in along in from the CFO improved the who discount left In percentage Denver. all permanent higher Chief improved we basis last have in Officer financial Cheri adjusted it long wish that our EBITDA repositioning are the Overall, year quality $X meantime third XXXX. points segment move We her everyday Kinder, throughout

Counsel and and similar Cheri long-term governance, that, confident, contract expertise we detailed more value. in a decades who Company, two in publicly our to XX Fiesta she our be Secretary when set course and Danny on mergers, search I where I Panera SEC will welcome us areas of from of rules You'll would well this update shortly for His served future is for DiPietro, shareholder and underway. call am a from a for and process corporate experience but acquisitions, Louis as let December role as includes dispositions General review, initiatives. background over as refranchise. restaurant negotiations, financial years. the he serve joined growth hearing also to regulations, like well Louis Bread Pollo Corporate build provides me With turn

Taco initiatives, goes through before provide financial will of Thereafter, I our results. an Cheri overview

Danny Meisenheimer

our of onset implementation, dedicated improvements made to planned experience. team the significant Since our Rich. you, the Thank has brand

we our We deliver XXXX to accomplishments as long-term. to for also now are results ready in the leverage plan

we platforms. During key quarter, the several growth the for fourth foundation laid

we're able members both in-restaurant December. increase catering for and into retain book our First, a sales choose and online, upload continuing location, to build accumulate we business. Catering effort offers that of operations oversee app, ads, Pollo program will to consistent by in We're and brand points guests under the This rebranded sign affinity. refined menu. to with will eClub we're and manage formed believe marketing to implemented social be those actively We MyPollo their the loyalty team among points. frequency to although not allows our our the catering eClub mailings, program, beginning Also, promoting to We and promotional a have loyalty digital We've redemptions not and program, help events. and media, foster our the our things. now using other download Tropical eClub dedicated local including MyPollo also build store platform POP app and coupons digital new find order

family in evolve party in competitive even broaden meals. new XXXX further to appeal to the healthiness, media business of Kitchen will orchestral and quarter, Own to Miami-Dade to equipment equipment in to line XXth restaurant be our XXXX We're fourth in in occasions introduction Your Bill’s and sizes. and with We platform also we investing And for we more this the of our the Build events with the catering marketplace In and in different anniversary addition, and support catering TropiChops promoted offering our dedicated the celebrated burritos. outreach.

noted stores. business. all of the provider earlier, can we have Rich has DoorDash agreement As of momentum the out now as serve rolled been in building are we exclusive potential as fully Delivery delivery services. our an positive to and impact to our with see excited our We on

contracts in which quarter during $X XXXX, cost kicked million chicken will us Pollo. of benefit realize million contract and will new new This in Our throughout all be for approximately fourth place the $X will help savings XXXX. nearly in to

quality. dictate of Importantly, high feed and we the our breed, continue continued size to chickens to ensure

pipeline. our XXXX, and chicken crispy A put we staffing to strategic added operations. has been equipment support are to our place model priorities, growing be building in on certain will and to Turning platform restaurants effective on including focused more product existing new quality

portable have service to payments. tablets the more drive-throughs. We roll this our POS a now capability meaningful to processing believe in speed are continuing will of impact out secure with We of

quarter. testing first begin kiosk will also We in the

anticipate every the Rich earlier, from see offers value day. are perceived waiting a we price not sales our will simply catering the opportunity loyalty to mentioned platforms address new delivery that lift As and Time Pollo

XXXX XX our resume will to restaurant remodeling XX restaurants. in We with

to facilities the better intention the food. quality is of Our match the upgrade to

restaurants. We to expect $X to remodel invest these about million

of our the compelling passionate marketing and balanced catering news and profitable especially brand through Our promotional should service. program. significant of reach about state over on platforms, calendar in can high delivery channels loyalty digital team speed frequency XXXX. We XXXX execution to now the initiatives includes new additional believe is the Rich. for opportunities approach. are that lead product supported I'll Focus call quality the turn growth. the our are improved we underway build back sales by With Growing and

Rich Stockinger

Danny. Thanks,

changes material improvement sales repositioning years trended deliver our the sustainable brand transaction. more In and consistent the of we two management, We beginning we traffic growth are to the restaurants. trends. The improved XXXX, made per closure has Over experience. this last and to believe Taco gross and have improve the NPS margin experienced quarter margins will in Cabana brand positively fourth and the cost unprofitable sales sales of effective

our During Kickin’ time new during These product out along Shareables the broadcast, Shareables October by the Quesadilla Nachos, Vegetable rolled new category Southwest November and we with fourth promotions and our lines. In our our new we Trio included entire were media. Skins, Also Chicken supported social new and which promoted limited Tortilla outdoor, includes Potato Kickin’ December featured we fall Sampler. our promotions Soup. Quesadilla quarter, digital In menus. Quesadilla product and and the

out as rolled September, app, those as Tropical our TC! our club want our online to with ordering the we Like offers Loyalty not If continue well mobile the Pollo we you or who program. app. for updated loyalty that consistent to Program download promote platform system-wide are recall, new use do in and email

the of XX,XXX data members our to We're to approximately have loyalty the opportunity to of During for loyalty added and order members speed purchasing Taco upgraded efforts includes higher consistently the average individual Pollo, service. XXXX an check target POS compared loyalty to and process a process history Cabana average month system. and restaurants planning by analyze experienced members we quarter, to the excited at accumulate member. payments our which in-restaurants and test to we tablets through Taco also marketing fourth per each the are adding at detailed then in increase to securely like Also sale of Cabana sales kiosk of

and progress our shortly will rolling of We continue implementing making the delivery with infrastructure program. begin out we our catering DoorDash

XXXX our restaurant management priority $X remodel costs impacting and planning and ongoing focus brand. essential the invest an models negatively without is the in and to remodel and Taco food XX expect We are to to Cabana restaurants million about restaurants. Improving these experience guest labor and of

We are to prepared the cooking Updating food labor. being high staffing. hours and revised reducing to products we while consistent continuing operating way the our throughout waste manage ensure and are guides refine quality and testing optimizing day are

promote this challenge benefit continues to challenge In in reducing engagement leadership addition, are and with we the leaders addressing open added We're increasing retention. costs. development shift the by brands. Staffing of to both positions improve resources of investing a recruiting, at ease employ be to training and

contributing our We positively to continue deeply located. are where be to to the restaurants committed communities

for and Some initiatives in who employees meals and supporting were Komen donating or at recruiting piece at Pollo packaging $X every Fiesta October, of first veterans earth-friendly Cabana. sold sold Month, military responders hardships Tropical Family of we our our to and Taco providing case volunteering and by proud related Awareness Susan and include, and to worthwhile hot to organizations. suffered materials, G. Cancer loaded more for raised servicing donations pie residents assisting have Breast every to for at have $X and Foundation non-profit losses need, over providing $XXX,XXX pursuing In Foundation of

call over We over expansion greater sustainable past focused in quality go me increased and that, We accomplished let our a optimistic growth. to have transactions, turn two about the execution, the we're long-term to margin remain financials lot the With intensely Cheri years, and through future. detail. on

Cheri Kinder

in a Hurricane restaurant Cabana X.X% comparable to last Pollo the Rich. Comparable year. competitors the increased by X.X% decrease at sales pricing. This and Thank recovered comparable a Pollo and decreased X.X% impacted in sales $XXX.X Last period decrease and increase new average points. X.X% checks in growth from new transactions from in revenues prior existing restaurants cannibalization inclusive consisted X.X% to afternoon. of million restaurants. of after year's than other decrease Good to restaurant restaurant Tropical restaurant quickly fourth due negatively XX compared quarter comparable Tropical primarily basis you, approximately at X.X% year market the Total restaurant in Taco Sales year, more Irma. sales restaurants

considerably on in in negatively EBITDA, filings a the $X.X re-launch. and and impacted of challenging We fourth advertising SEC Pollo the our fourth XXXX. The of quarter $X.X fourth to Plan comparison broadcast year compared and quarter particularly on to by spent More million rebuild Tropical spend restaurant we the high during as basis adjusted XXXX addition, we quarter non-GAAP the In the period. believe compared in specifically, Renewal our repair defined XXXX to fourth the of quarter media as re-launch. in spent saw measure percentage momentum more transactions more the XXXX. XXXX Strategic of maintenance due Fourth sales comparable restaurant restaurant of the this million points to improved advertising prior XXX quarter level a and increased associated in

driven As primarily of expenses and of estate such, lower by percentage maintenance cost real wages the These by sales increases and taxes related by repair in restaurant fourth were lower as and offset advertising also these and increases expenses of were expenses. quarter partially driven lower higher XXXX. sales a

adjusted offset to pricing adjusted sales a positively repair investment average compared fourth to as leverage period. off-premise bonus the costs in on build and prior items check severance the percentage The the primarily and the Taco increased fourth well associated on higher matter incentive-based the and higher plans, and our As decrease of EBITDA last XXXX. and the Board chicken to fourth the also positive drove in X.X% of advertising and to to of At inclusive in non-GAAP due XXXX. our costs at of in costs to maintenance year's contracts period. spend sales quarter estate quarter These fixed project the million settlement as in with higher $XX.X million quarter margins medical in sales Pollo, related This in Cabana year comparable and the system basis offset measure benefit XX Restaurant of a income X.X% transactions. adjustments a of decrease we and advisory level costs were offering quarter EBITDA recently by a advertising expenses, of a Similar and costs Taco by and year-over-year and year. to percentage of mentioned fourth and resources menu place XXXX the expenses quarter impacted sales taxes quarter to a partially quarter, business, $X.X the sales real Cabana shareholder of lower menu reduced offset repair maintenance and prices partially cost of consulting of higher fourth Taco cost promotions compared to level XXXX. and sales. had by our last G&A incentive as the compared costs, This put fourth negatively was consisted fourth increased menu costs prior impacted XXXX compensation of by restaurant were lower of by points to cost higher favorable lower benefit have filings mix in partially percentage lower in restaurant restaurant improvements a plan. in portion as improved comparison $X million points of of XXX in basis prices restaurant Cabana, as increase almost increased SEC sales year restaurant X.X% in sales and quarter. defined of related a as X.X% with gain during new that lower X.X% Comparable implementation,

the filings we These Pollo related previously restaurants certain previously adjusted non charges in impaired. in $XX.X lease primarily Tropical four and impairment we Tropical measure of that adjustments to continue which for $X.X of recognized million. as nine underperforming SEC related charges and restaurants were Pollo charges well quarter Cabana They that million restaurants XXXX, consolidated quarter, nine the In lease fourth to defined recoveries GAAP million to costs million. $XX.X were increased for Taco of to Cabana During net as EBITDA, operate. our and $X.X Taco closed to also closed of estimates future were of restaurants December impairment XX

depreciation new project million The closed and expense. $X.X upgrades. $X.X $XX.X losses ongoing closed restaurant $X.X restaurants restaurant expenditures, a million $XX.X XX level totaled in restaurant million pre-tax the loyalty Tropical equipment million million, and million online sales level million and million ordering, pre-tax $XX.X year, Cabana menu and data full other restaurant expenditures approximately contributed warehouse operating and in Pollo nine in sales platforms. $X.X $X.X capital new restaurants including development, contributed operating maintenance depreciation the planned approximately Taco and in losses $X.X for million $XX.X new maintenance restaurants including in restaurant for capital For in technology expenditures million expense. corporate including for hardware deferred including XXXX programs, in and including

December of were for XXXX, reserving all credit XX, million facility, XX after As borrowing. million our for credit we compliance under X senior were the facilities, covenants credit with issued available letters in under of

During we each three and open expected be to as to are in brand the capital our to currently plan out million, press million laid $XX we at release. $XX expenditures restaurants XXXX,

projects remodeling adding each brand, menu will addition to capital facilities video hardware including catering at payments, we and restaurant our secure XX XX portable out and upgrades. equipment. Technology and platforms In upgrading new POS equipment restaurants ongoing other accept service upgrade rolling development planned support invest Thank tablets systems the testing new to to maintenance, with in and initiatives energy to self capability kitchen you. efficiency include kiosk,

now the questions. open will line We for

Operator

Instructions]. [Operator

Will proceed Our first Stephens. Slabaugh line of the question with with Please comes your question. from

Will Slabaugh

Thanks noise. for guys and background sorry the

during those showing the top-line you cadence that you wouldn't with helpful of to a of that mind be It what would or taken period sort costs you sort are the about bit itself on of you’ve consumer. to then quarter for willing? most nice there that First saw end question And you're are would those seems any Pollo the of coming then how you’ll quarter on pause to initiatives Pollo, a improvement back some of shown going sort have more Pollo? then at quarter positive most on getting the if and characterize what like? you’d you at happened, describe you the that that of direction What what the broadly? extent And positive

Rich Stockinger

let’s were quarter bounce Hi, against there. going of a year In better were we start cetera the fourth after competitors up able the very quarter than big I and our Will. Box lot back Black the It's strong We of et Rich. to a before. hurricane.

So Pollo the -- away pulled this brand done not the pinchos. out past several and as drive Because transactions fourth in we We well The of In did figured not as had which have for to January bounce happened from we in and advertising spent out put a helped year, in as first get the that we to dollars clearly did. us that the weeks. pinchos the We we significant back Time was work. that that should damage quickly of amount step the as because of Irma. can. quarter the

and the we from then got Miami-Dade driving Pollo We've been off. where traffic market in in We’re commercial had able paying to we trending were several January. of especially first as off well not going could first weeks the that we -- switched It four just to get the and -- three weeks Time program the weeks, Time. now first our overcome three successful weakness as the reintroduces which is Pollo in And transactions Broward. increased

Danny Meisenheimer

we that said, in weeks terms to coming Rich of as are throughout now into as XX,XXX our opportunities bit was so loyalty just their consumption from At recent on app off-premise members opportunity the add agents and to all fully and I new the nice truly And operational. new then little million we systems press X.X with and system. loyalty of seeing eat what become that just markets on which the club And is Taco reliant that now results new on The on on Pollo new XXX,XXX in the just the bringing in email results the release have the club of on sales believe and with effective and over XX,XXX online over over addition DoorDash nice as stores, really management the we're mentioned those email. the going with really is some has efforts Yes, delivery the catering have members have a we program far. partnership.

along add-on whether So not the those in and the of stores nature. or opportunities we sales then products behind value the message these new that coming price the new pinchos initiatives have are lemonades, soups,

Will Slabaugh

Got color. it. that for I if could. Thank you broader question One

guys going mostly brands around You obviously good of past these getting both the done have job right couple in years trying things in a the direction.

we you complete should And game” so how success plan be sure little is after as of about I and talk there trends we we a end less go. in business, this towards we're a getting this and I for think the you both I'm guess alternatives curious there if there you one? you how for there more we we think is it and potential is your year. should a of a refranchising bit -- sort thinking as other here? about Is this of a year this if there happen want as: strategic or think just about potential is them exactly different next get or kind the Can to one game wasn't underway for potential going in about more way. see “in fact and into the as of about sort get Should

Rich Stockinger

we're results top-line room the these our to delivery what starting volume. unit where program delivery now programs talk of from who includes in literally plenty going the we drives management the will place it's not had Again we have only and a of is just And is have positive with catering that can there that but average to didn't before. which terms it increasing drives Right in team that started competitors are. significant at a perspective. the transactions. the bottom-line. And now that's I Well. unit time. about And address think we Taco of for loyalty show amount I up It includes level, sales already started against drive just only we still and

we Our to margins and need industry to do. room at I these margins to -- worked more we hard we Taco get got leading Pollo we've have up call margin would an

the right and the to that organically to four right After we be walls. do and and growth growth through units licensing. should going We've organically now we get franchise it's So be be. got looking within now it's limited these going at way

we the then I execute think we just the position grow if I right where farther down two not can addressed. might into significant brands these and the what forward have get exactly execute that going this brands anything road and a just go we than now shareholder value to can just is

Operator

Our with the Instructions] line Jaffray. Piper question with comes Please with of proceed Long [Operator Piper your Jaffray Joshua next from question.

Joshua Long

Great, thanks for taking the question.

consumers? of thinking past, some you've value you those back those some in that have you've that to shifted done or traffic. maybe what had order of of with terms the about to are line your that little sweeten in to offerings drive in about adjust the of In in or to we’ve that through the Are some in seen similar bit from capturing you of of the here the some cut peers from in share a industry? other lion’s How deal terms that the thinking noise,

Rich Stockinger

driving $XX.XX I we rice to rice with lunch, it Well from did $X.XX with in to honest then last done it as weekends and $X.XX and rice lunch, be it Half Family now beans will Original Meal Quarter Chicken beans. dinner, drove much the beans at and Pollo the just weekdays as and year. the last you, it's we've on year Chicken standpoint, a

we we going, keep the where with tacos believe replace go beef based And direction. for current that very will center shredded do It's as may with all Try -- we chicken and TC, the margin the transactions with the especially it have we two to service this add believe gram responding to for have at still it, fast-casual, $X.XX, our need the the or Casual the is certain we we're value will dozen our the have lane, to for $X.XX time, and profit put that right duos, of guest gross environment, cheese $X.XX. potato Dining But get and some our on two gross time. chicken the price going to favorable start contract going that in as and the year, well things. a And tacos it the taco are both we the outside special and bean X quick the in all us. out we is we $X.XX, a of look again, carefully segment that program core we everyday potatoes. down at there great markets, back this core So meat But that right and is to tacos

Joshua Long

or through it cut you actual And as up pick is do just so messaging of think working or really a else with point advertising mind noise? necessarily meaningfully number of just and/or on terms to that netting your to say offerings if Is your maybe consumer. out impressions terms up platforms maybe are need to whoever keeping top about $X who should that having a there in of to or of stick the your might follow Or that order spent or I to that and guns some -- in we don't more that of there change. in

Rich Stockinger

the forms that customer last we're both after starting looking catering because to we're and off market really the the a but wants. of guns stick wants, we digital, media to to going programs We're rollout social, forward really it’s renewal going our the program what it's going slightly to because the anything a are on spend year the deliver little less from and maybe but program, TV products the that loyalty other of I'm than

real delivery and tracking again, excited forward So the to and the that closely. results looking of

Joshua Long

think last from I one me. the

might going help Tropical of we the to consumer trying go that terms pieces things in maybe we go you're of the drive notice you're remodels or talk they you as that back traffic with or of in things In what to Pollo -- might connection into can the through notice touch, back some side, some big as brands? the accomplish, of the there

Rich Stockinger

of the the didn't lot impact that restart in maintenance, ones house that restaurants identifying the work We've the refreshing need We're are done you're the oldest, the the back with a we going of some house. of see that front guests where start those in of because top-line. get the want to program seeing that and really a deferred so started remodel to on the the

Operator

proceed your comes Our question. with with line Brian James. Vaccaro from of the next question Please Raymond

Brian Vaccaro

at a expect closure ad be wanted sales both make said on just clarify, And the a speaking to because total little dollars brands want of just versus ‘XX percentage I of be and you wanted a that spend ‘XX bit consistent evening. sure is page same back on spends margin sales Good down the so to circle ad on outlook. the down the are we're to just in is couple coming I you the in you Thanks. as to on comment? or

Rich Stockinger

think X.X% is that than year Sure, both be be the I the of was with to slightly we're had launch push this year lower the year. ad both comment going last and spend about big brands, we Again to brands. ended last

Brian Vaccaro

okay, within expect? on aggregate Can And new you just inflation spec brands to and any relates inflation comment chicken contract. each commodity that commodity speak new then changes those the that the the appreciate to the Yes, contract? color for fall you brand, it on the also in perfect really outlook as you could

Rich Stockinger

in as was were of November, pricing in market. the terms the you the Sure, we in the getting chicken remember lucky in glut

sometimes one. have it's on we're we both to So be that better good. than lucky Hopefully

chicken a cover is up but costs fine are but produce significant. the bump I on in seen We've so we've up we're Pollo, of taken pricing big not commodities, slight bump steak a a the Taco, seen basically mean, we little terms items, chicken and there. working food increase the the so in it's we're other that. to And see In we'll

Brian Vaccaro

same there help brand know think each cost from just I labor of inflation at for then Cabana can a you. cost brand? with And labor how you Taco outlook but especially perspective, that scheduling should labor we thinking in us your sort about Thank each about angle, thanks. last Okay, one are some initiatives, specific

Rich Stockinger

have we about to little significant. been favorable than demanding last and treat a with it talk year, And with I The so thing, Taco we're Pollo, would with do schedules, it the program -- that of team. management at that same it labor shift to a rebound going the kind costs, guys the done see but leaders program, improvement. the believe not we're again improvements will regarding a going that slight we've non-frying uptick frying be the an slightly

Operator

Ladies and end gentlemen, a we conclude And today's conference. the session. have question-and-answer of reached this does

lines you your this You for participation. disconnect Thank may time. your at