Brinker (EAT) Q4 2025 Earnings Call Transcript

Image source: The Motley Fool. DateWednesday, Aug. 13, 2025 at 10 a.m. ETCall participantsChief Executive Officer and President — Kevin HochmanChief Financial Officer — Mika WareChief Information Officer — Chris CaldwellVice President of Restaurant Development — Richard IngramNeed a quote from a Motley Fool analyst? Email [email protected]TakeawaysCompany-wide comp sales-- Positive 21.3% consolidated comp sales.Chili's same-store sales-- Increased 24%, outperforming the industry by 1,890 basis points, and marking the seventeenth consecutive quarter of positive same-store sales growth for Chili's.Chili's average unit volume (AUV)-- Exceeded $4.5 million in average annual restaurant volume for Chili's in fiscal 2025, up from $3.1 million in fiscal 2022 and $3.6 million in fiscal 2024.Chili's restaurant operating margin-- Improved to 17.6% for fiscal 2025, up from 11.9% in fiscal 2022.Chili's traffic growth-- Increased 16.3% year-over-year.Chili's quarterly comp drivers-- Comps of positive 23.7% driven by 16.3% traffic, 4.7% positive mix, and 2.7% pricing.Adjusted diluted EPS-- $2.49 adjusted diluted EPS, up from $1.61 last year (adjusted).Adjusted EPS growth (annual)-- Adjusted EPS growth was up 117.1% for fiscal 2025 from the prior year.Restaurant operating margin (Q4)-- 17.8%, a 260 basis point year-over-year increase, primarily from sales leverage.Adjusted EBITDA (Q4)-- Approximately $212 million in adjusted EBITDA, representing a 50% year-over-year increase.Food and beverage costs-- Unfavorable by 60 basis points, reflecting 1.7% commodity inflation, partly offset by price actions.Labor costs-- Favorable by 60 basis points year-over-year, offsetting increased wage inflation of approximately 3.8%, and higher manager bonuses.Advertising expense-- Rose to 3% of sales, up 20 basis points year-over-year, linked to the Big QP campaign rollout.Capital expenditures (quarter)-- Approximately $80 million in capital expenditures, focused on kitchen equipment upgrades and maintenance.Debt paydown-- Over $350 million repaid year-to-date, including full repayment of the approximately $90 million revolver, reducing lease-adjusted leverage to 1.7 times.Share repurchase authorization-- Increased by $400 million under the current share repurchase program, resulting in a total of $507 million available as of Q4 fiscal 2025.Fiscal 2026 revenue guidance-- Projected at $5.6 billion-$5.7 billion for fiscal 2026.Fiscal 2026 adjusted EPS guidance-- Expected range of $9.90-$10.50 adjusted diluted EPS for fiscal 2026; weighted average shares between 45 and 46 million.Fiscal 2026 capital expenditures guidance-- Forecasted capital expenditures for fiscal 2026 are $270 million-$290 million.Planned menu pricing (fiscal 2026)-- Embedded price increases for Chili's in fiscal 2026 are expected to taper from approximately 4% in Q1 and Q2 to 3%-2% as the year progresses.Maggiano's comp sales-- Maggiano's reported comp sales of negative 0.4%.Execution initiatives-- Four remodels in the new modern Greenville reimage package scheduled by the end of calendar 2025, targeting a 10% annual fleet refresh rate starting in calendar 2027.Operational improvements at Chili's-- Turbo Chef equipment fully deployed, reducing kitchen heat and increasing reliability; menu and pantry simplification continued with a net reduction of 10 pantry SKUs, and 8 menu items.SummaryBrinker International(EAT 0.90%) reported its fifth consecutive quarter of double-digit same-store sales growth at Chili's, with traffic, mix, and pricing all contributing to record revenues in fiscal 2025. Maggiano's saw comp sales slightly decline by 0.4%, prompting leadership changes and a strategy adjustment focused on the brand's Italian-American core. The rollout of operational and menu enhancements, such as new kitchen technology and streamlined offerings at Chili's, supported large margin improvements (restaurant operating margin increased from 11.9% in fiscal 2022 to 17.6% in fiscal 2025) and higher unit volumes (average annual unit volumes increased from $3.6 million a year ago to over $4.5 million). Management previewed extensive investments in marketing, reimaging, and new unit growth for fiscal 2026, with capital allocations shifting toward expansion and modernization as debt leverage decreased. Fiscal 2026 guidance highlights sustained outperformance in same-store sales and traffic relative to industry benchmarks, balancing ongoing reinvestment with expectations for further gains in margin and earnings.Chief Financial Officer Mika Ware said, "Guidance for fiscal 2026 includes planned commodity and wage inflation in the low single digits, a tax rate of approximately 19%, and one to four net company-owned restaurant closures, which are not expected to impact overall profitability."Chief Executive Officer Kevin Hochman said, "Our average restaurant volume has grown from $3.1 million at the end of fiscal 2022 to $4.5 million in fiscal 2025. And Chili's restaurant operating margin has improved from 11.9% in fiscal 2022 to 17.6% today."New product launches in ribs, chicken sandwiches, and frozen margaritas, along with the "Big QP" value campaign, have led to a continued focus on menu innovation and traffic enhancement.The company stated that remodeling and expansion initiatives will follow learnings from four pilot restaurant updates, with a goal of updating 10% of units annually, and targeting a 10% annual reimage run rate by the beginning of calendar 2027.Maggiano's leadership transition places Chief Executive Officer Kevin Hochman as interim president, applying key lessons from the Chili's turnaround for accelerated brand revitalization.Industry glossaryThree For Me: Chili's meal value platform offering a three-course menu at a set price point to drive lunch and value-seeking guest frequency.AUV (Average Unit Volume): Annualized sales per restaurant unit, used as a benchmark for operational performance.Comp sales (Comparable Sales): Sales growth at locations open at least one year, a key metric for evaluating same-store performance.Turbo Chef: Specialized rapid-cook kitchen equipment aimed at improving speed, consistency, and quality in high-volume restaurant settings.Full Conference Call TranscriptKevin Hochman: Thank you, Kim, and good morning, everyone. Thank you for joining us today to discuss our operating performance in the quarter, as well as to share guidance for fiscal 2026. Q4 Chili's same-store sales were plus 24%, outperforming a stronger casual dining industry by 1,890 basis points. This result was lapping a plus 15% in Q4 last year, for a two-year comp of plus 39%. Q4 2025 marks the completion of three years into our turnaround plan. And the sustained results continue to be very encouraging. Chili's has now beat the industry the past seven quarters on traffic, as well as completed our seventeenth consecutive quarter of positive same-store sales growth.Our three-year fiscal 2025 comp sales growth number is plus 40%. And that growth has lifted AUVs to $4.5 million. Through simplification and growth, we've also been able to expand Chili's restaurant operating margins significantly, from 11.9% in fiscal 2022 to 17.6% in fiscal 2025. With $4.5 million AUVs, everything generally gets easier for the restaurants. Labor budgets, repairs and maintenance, staffing, cleaning, and keeping food coming out hot and delicious. When you have these fundamentals in place, and labor and facilities are properly funded, it's a lot easier to continue improving the guest and team member experience over the next three years.A significantly streamlined menu, more labor deployed, a restaurant in a state in better condition with better equipment, and a branded culture that people are excited about, Chili's is well-positioned to continue growing market share in the industry for years to come. These strong quarterly results were achieved by our continued focus on the fundamentals of casual dining. Food service, and atmosphere. At the end of Q4, we relaunched our Ribs platform, Customers are raving about the look, the size, and the taste of the ribs. It's a very noticeable upgrade. With a full rack of ribs that are so big and look so delicious they are allowed when guests see them come to the table.After we get a quarter of execution reps for our restaurant teams on the new ribs, our plan is to turn on digital marketing in Q2, It's clear we have a winning product with our new ribs. And our intent now is to use them to drive traffic. We also rolled out our new frozen MARC program, which features a new premium Patron frozen base with the new Taylor mark machine. The new Taylor's deliver a superior frozen mark texture as well as have a larger production capacity which is important because we are selling nearly twice the number of frozen marks even at the significantly higher $10 price point.Customers love the new Patron Frozen, the Flamingo Freeze featuring Tito's Vodka, And The Arctic Drift Featuring Malibu coconut rum and blue Curacao. We believe we now have the best tasting frozen mars in the restaurant industry. The marketing team successfully launched a new frozen program, at a press event in New York City featuring the world's first ever frozen Chili's restaurant, and the reviews and sales of the new frozen program are significantly exceeding expectations. Lastly, on food, I'd like to share the results of the BIG QP launch. Which continues our Chili's industry leading value story at $10.99. The marketing team came up with a brilliant launch event they called fast food financing.Where guests tired of paying high prices for fast food, apply for loans to pay for their next fast food purchase and try the big new the new Big QP. This event not only created incredible buzz all throughout the country, it reinforced Chili's as a restaurant value leader. Through sharp menu merchandising, we've been able to keep Three For Me Nicks flat at under 18% and reduce ten ninety nine mix to 7.7% even with the BIG QP success. We also delivered more operational improvements in Q4. Turbo Chefs have now been successfully installed in all restaurants, resulting in the retirement of the CTX and Impinjure units.We continue to hear from the restaurant teams that Turbo Chefs put out way less heat in the kitchen cook more evenly, and a quickly more reliable, and easier to clean than the old equipment. They also enable the noticeable delicious bark on our new ribs, and we believe the sales growth in ribs alone will deliver the return on investment we need for the new equipment. Q4 also saw continued simplification of pantry ingredients and menu items. We eliminated a net of 10 pantry SKUs and eight food and drink menu items which will allow our bartenders and cooks to focus on making fewer things better and help with less things to order and to inventory.We have now started the year four of our turnaround, there are some that have questioned the sustainability of our results, which is a fair question given the of casual dining and of Chili's. Our strategy that we shared two and a half years ago at our investing day was simple. Address the key fundamentals to winning casual dining for the long term. Food service and atmosphere. And while there's still lots of opportunity ahead of us, we are at much different Chili's today than we were three years ago. Here are some facts that provide some color on how much different Chili's is today.Our average restaurant volume has grown from $3.1 million at the end of fiscal 2022 to $4.5 million in fiscal 2025. And Chili's restaurant operating margin has improved from 11.9% in fiscal 2022 to 17.6% today. Eliminated over 25% of our menu, we do fewer things a whole lot better. We focus on improving our five to tribe core segments, burgers, crispers, fajitas, margaritas, and a triple dipper. As a result of the simplification of menu upgrades, food grade scores have never been higher. On service, we now invest over $160 million more in labor than we did in fiscal 2022. And that going investment is built into the 17.6 restaurant operating margin.Guests with a problem are GWAP, our dining room key measure we track daily on a guest experience. Is a mere 2.3% and has never been lower since we started tracking it. Less things to do with more people to do those things makes it a whole lot easier to deliver better food and service. On repairs and maintenance, we've invested over $100 million incrementally in the past three years. Allowing us to catch up on deferred maintenance accumulated during COVID had significantly impacted the guest and team member experience. Our state is have been has never been in better condition than it is today, and we are now funded ongoing to keep it that way.Our marketing budgets are also much bigger now. Which allows us to drive traffic to our better operating restaurants. In fiscal 2022, we invested $32 million in marketing, In fiscal 2025, we invested a $137 million. Built a world class marketing team led by George Felix, Jesse Johnson, Steve Kelly, Mary Ellen Scott, to invest those incremental dollars, and that team is now wildly considered the best in restaurant marketing. They were awarded Ad Age's 2025 brand of the year, spans all industries and not just restaurants.Lastly, because of our much improved performance, we've been able to strengthen our balance sheet We paid down over $570 million of our outstanding debt in the past three years, and are now at a very strong 1.7 lease adjusted leverage ratio. This will give us increased flexibility in the future and the financial strength to weather any macro headwinds or bumps in the road that would be more difficult if we continue to have all that leverage. The reason why we are sharing this detail is to substantiate that Chili's is a completely different concept today than it was three years ago.Those who believe our success was driven solely from a cheese pull on social media are just not close enough to our story. Yes. Internet morality and TV advertising will bring new guests in. The deck success is fleeting and short lived. Unless the experience they have in the restaurant matches what they saw in advertising. The investments we have made in the food operations and facilities have allowed our guest experience to match the quality of our world class marketing. We say at Chili's, marketing brings them in, but operation keeps them coming back. This is why we continue to grow and sustain those gains. I'd like to spend a few minutes on what's coming in fiscal 2026.Our Chili's fiscal 2026 plans are strong, will allow us to continue the momentum and comp the comp, which includes rolling two big quarters of plus 30% same store sales growth in Q2 and Q3, of fiscal 2025 and a whopping plus 43% same store sales growth in November. Our 12 vice presidents of operations once again selected an obsession metric to be laser focused on this fiscal. With their confidence in the plans and their confidence in the restaurant team's ability to deliver them, I'm excited to share they have again chosen traffic as their obsession metric in fiscal 2026.In the food pillar, we'll have a full year of the ribs upgrade that started in July, '2, which we which we believe will position us to have the best tasting queso in the industry served hot every order. And in the back half of the year, we have a major relaunch of our chicken sandwich platform. Chicken sandwiches are a very large and growing segment. We have an exceptional product at an exceptional value, which positions us well to grow share in the chicken category. From the beverage side, we'll have a full year of our new frozen mark platform, and a full lineup of exciting $6 marks of the month.We expect this play will extend our number one position in margaritas driven by our barbell pricing strategy and growth in the large frozen marg segment. Are also investing in base ingredients to continue elevating food grade scores. Throughout the fiscal, we will be making investments in more premium mayo, ranch, bacon bits, and 50% thicker bacon which are key building blocks in the Chili's menu and are featured in many of our recipes. At a time when others may be pulling back on quality, to offset inflationary headwinds, we view this as an opportunity to accelerate our food quality versus competition. From the operations front, have several initiatives coming in fiscal 2026.We will have four quarters of simplification rollouts, which will continue to make it easier for our teams to execute with excellence. Fiscal 2026 will see the start of our north of six initiatives, where we take the best in class processes from high $6 million AUV restaurants and roll them into the balance of the system to increase throughput. And lastly, we will launch a new hospitality initiative that includes new labor scheduling process tools to help our general managers build stronger teams and an initiative help build a culture of manager ownership and accountability.In the atmosphere pillar, we are now finished with catching up on repairs and maintenance, And with our improved cash position, we are now switching over to playing offense. Which means remodeling and building new restaurants. We're on track to do our first four remodels in the new modern Greenville reimage package by the End Of This Calendar Year. Where We'll Learn What's Working, What's Not, And Land On The Right Package To Roll To The System. The Modern Greenville project objective is to remodel 10% of the fleet annually which means restaurants are refreshed every ten years and we maintain atmosphere that guests are excited to dine in.We expect to ramp up reimage pace in calendar '26, and our plan is to get to a run rate of the 10% by the beginning of calendar '27. Work I've seen so far is exciting, and when we showed the modern Greenville remodel render to the managers last week, at our annual conference, there were a lot of oohs and ahhs with iPhone doubt snapping away. Our world class marketing team set a vision for an exciting new design that is uniquely Chili's and our construction team is doing a brilliant job of how to cost effectively bring this to life.To up our reimaging and our new restaurant development we've invested in the new officer role to lead the group. I'm pleased to share Richard Ingram started a few months ago as our vice president of restaurant development. Responsibilities across both Chili's and Maggiano's are to, one, lead the reimage program to upgrade our state, and, two, restart a new restaurant opening program that will accelerate development. Richard spent over two decades working in development at a large convenience store chain that built a lot of new stores over a long period of time. We are confident Richel will be able to do the same at Franker.Lastly, I wanna share several of the big technology initiatives we have planned for '26 to improve both the guest and team member restaurant experience. The biggest one is a dramatic simplification of a handheld iPad application our servers use to take hundreds of millions of orders annually. It will feature a more intuitive design created by a third party UX expert the removal of over 700 SKUs that are no longer sold but currently show up in the application, and faster paths to create orders. The results will be hundreds of millions of less tabs for our servers, less scrolling, and more importantly, more accuracy and faster order taking.We also believe this initiative will help with server turnover, as we've had some issues of new servers leaving after being frustrated by the current tablet system within thirty days of starting. The new app will also continue to work even if the restaurant's inner Internet connection goes down through a seamless offline mode, and also feature easier split check capability which can be a pain for our servers and slow down table turns in the current system. Another major tech initiative is upgrading the Internet and Wi Fi throughout our estate. Was a project that began last year with our Comcast partners, will be completed by calendar year end. It brings three important improvements to our connection.One, cellular backup if the network goes down to continue service. Two, higher speed Internet for in for restaurants on older technology. And three, better Wi Fi coverage within the restaurants by installing over 5,000 new access points. Given how much of our operation now depends on the Internet connection and the speed of it, this is a very important foundational upgrade. CIO Chris Caldwell has done an exceptional job in his first year refocusing his organization on enterprise technology projects that will make a real difference removing friction improving productivity every day for our restaurant teams. Now let's do an update on Maggiano's. Today, we announced the leadership change.Dominique Berloni has made a decision to step away from Maggiano's and Brinker. Dom brought Brinker a new lens to hospitality and food that has inspired all of us to see what the Maggiano's brand can be especially with the recent reimaged Orlando Maggiano's, our first reimaged restaurant in the Maggiano's turnaround. I wanna offer my sincere thanks to Dom for his friendship, leadership, and service to Brinker over the past two years, and wish him the very best in his next. While we are making progress on many simplification and upgrading recipes, we do have an opportunity to apply more of the Chili's turnaround to Maggiano's.One of the keys at Chili's was leaning into the things that made Chili's great when it was at its best. And making those things relevant again. When Maggiano's was at its best and growing the fastest, its core was a menu of delicious Italian American favorites served in abundant portions in an inviting atmosphere where you'd have a great time with friends and family. This was the recipe for great value. The core essence is why guests frequent Maggiano's and is what's we need to focus on to reignite and make Maggiano's a growth concept. To accelerate a back to Maggiano's turnaround, I will now be overseeing Maggiano's as the interim president.We also have promoted the Chili's VP of operations from the Florida region, Rich Kitzel, to COO of Maggiano's. Florida has been a top three performing Chili's region for years, and Rich's leadership has been the reason why. Rich is known for being a disciplined operator who builds great teams, and is not afraid to challenge the status quo when change is needed. Rich and I, together with the Maggiano's leadership team, are crafting a back to Maggiano's plan which will apply the key learnings from the Chili's turnaround to address the biggest opportunities on the brand's food service and atmosphere.We will also commit to spending more time listening to the restaurant team's ideas like we've done on Chili's to drive the ideation that will accelerate Maggiano's turnaround. I'm looking forward to sharing plans in upcoming calls. I continue to be encouraged by our business momentum, and I'm just so proud of our team. Our Chili's business has been rebuilt for the long term sustainable growth, with a larger consumer base that now includes a new generation being introduced to the brand a tighter menu, more labor, properly working equipment, upgraded technology, and restaurants in good condition.That stronger foundation plus an exceptionally strong fiscal 2026 plan gives me the confidence we'll be able not just to sustain the growth from '25, but add an additional four quarters of growth. It's not just our executive team in Dallas that's confident in the plans. We just completed our annual general manager conference in Las Vegas last week, and they all couldn't have been more excited about the progress we've made together and the fiscal 2026 plans. With great plans, the right investments, and field leadership who is fired up I am very confident about our ability to deliver fiscal 2026.Before I hand the call off to Mika, I do wanna recognize three restaurant leaders from that conference for their amazing results this year. John Kovaca is our fiscal 2025 general manager of the year. He leads a great team at a best page in New York on Long Island, He was selected above 1,000 plus other general managers. Henry Altuve was our above restaurant leader of the year. He's done an exceptional job leading to the South Florida market, and was chosen out of over a 140 directors of operations. And vice president Dale Bellotto was our five star VP this year.Now Dale just beat only 11 other VPOs, but that's still really good because our VPOs are the in the business. A big congratulations to John, Henry, and Dale Well done. Now I'm gonna hand the call over to Mika, and she's gonna walk you through the fiscal 2025 fourth quarter numbers and our guidance for fiscal 2026. Go ahead, Mika.Mika Ware: Thank you, Kevin, and good morning, everyone. Today's results marked the fifth quarter in a row of double-digit same-store sales growth for Chili's. As Kevin mentioned, this comes on the heels of lapping the prior year fourth quarter same-store sales growth of almost 15% capping off a very successful fiscal 2025 for Brinker International, Inc. This was year three of our investor growth strategy. And we continue to deliver industry-leading results by focusing on the fundamentals of food, service, and atmosphere. Our multilayered marketing strategy continues to drive trial, and our ongoing operational improvements are bringing guests back.For the year, we reported total revenue growth of 21.9% eclipsing over $5 billion in revenues for the first time in our history. We also reported restaurant operating margin improvement of 420 basis points and adjusted EPS growth of 117.1%. In addition, we improved average annual volumes at Chili's from $3.6 million a year ago to over $4.5 million. Turning to the fourth quarter, we continue to see strong year-over-year top-line growth same-store sales and traffic well above industry averages, and significant restaurant margin expansion at Chili's. Brinker reported total revenues of $1.462 billion with consolidated comp sales of positive 21.3%. Our adjusted diluted EPS for the quarter was $2.49, up from $1.61 last year.Chili's reported top-line sales growth with comps coming in at positive 23.7%. Driven by positive traffic of 16.3%, positive mix of 4.7%, and price of 2.7%. Our improved operations and effective marketing have brought more guests to Chili's. By showcasing our strong everyday value, we've continued to build on the success we saw with the Big Smasher launch last year, carrying that momentum through this quarter and into July. July sales and traffic for Chili's increased double digits again and we continue to maintain our significant gap to the casual dining industry. Turning to Maggiano's. The brand reported comp sales for the quarter of negative 0.4%.As Kevin mentioned, Maggiano's will continue to focus on the fundamentals of improving food, service, and atmosphere. And we remain confident in our ability to grow the business for the long term. At the Brinker level, we saw continued strong flow through this quarter, with restaurant operating margin coming in at 17.8%. A 260 basis points improvement year over year. Primarily driven by sales leverage partially offset by unfavorable food and beverage cost and higher advertising cost. Food and beverage costs for the quarter were unfavorable 60 basis points year over year due to unfavorable menu mix, with 1.7% of commodity inflation offset by price.We remain pleased with the mix and profitability of our ten ninety nine three for me value platform, which continues to perform as expected. It offers a compelling price point for guests seeking value while still allowing us to maintain margin profitability. Labor for the quarter was favorable 60 basis points year over year. Top line sales growth offset additional investments in labor, increased manager bonus due to performance achievements, and wage rate inflation of a approximately 3.8%. Advertising expenses for the fourth quarter were 3% of sales, and increased 20 basis points year over year to help support the rollout of the Big Q peak campaign.Our marketing team continues to do an excellent job with menu innovation, keeping Chili's in the cultural conversation, and making the brand relevant again. Which is helping to drive traffic. G and A for the quarter came in at 4% of total revenues, with year over year sales leverage, offset by increases in ERP and system support cost. Depreciation and amortization for the quarter came in at 4% of total revenues, and increased 30 basis points year over year due to accelerated depreciation associated with the retirement of kitchen equipment. Fourth quarter adjusted EBITDA was approximately $212 million a 50% increase from prior year.The tax rate for the quarter increased to 19.5%, driven by the increase in sales, which accelerates at a greater rate than the offset generated by the FICA tax tip credit and due to an increase in nondeductible executive compensation related to an increase in the stock price. Capital expenditures for the quarter were approximately $80 million, driven by accelerated investments in kitchen equipment, and capital maintenance. Due to our ability to generate significant free cash flow, in addition to investing back in our restaurants, we repaid the remaining amounts outstanding on our revolver of approximately $90 million. Totaling over $350 million in debt repaid year to date.This further improved our balance sheet and reduced our lease adjusted leverage to 1.7 times. In addition, during the quarter, we extended and increased our $900 million revolver that was set to expire in August 2026. Our new $1 billion revolver expires in May 2030, and locks in ample liquidity to continue to support our disciplined capital allocation strategy, which is to invest in the business, pay down debt, and return excess cash to shareholders. In support of our capital allocation strategy, our Brinker board of directors authorized an additional $400 million under our current share repurchase program, bringing the total amount available to $507 million. Turning to fiscal 2026.We will continue the path of making smart and opportunistic investments against the backdrop of our successful strategy to continue growing the business. In addition, we'll continue with our barbell pricing strategy to protect our industry-leading value for those that need it, while providing more premium options for those who want a more elevated experience. Continue to focus on menu management. With the expectation that mix will be relatively flat. And we'll continue to focus on improving the guest experience with expectations of delivering traffic well above the industry. Regarding fiscal 2026 guidance, in this morning's press release, we shared that we expect fiscal 2026 annual revenues in the range of $5.6 billion to $5.7 billion.Adjusted diluted EPS in the range of $9.9 to $10.50. Weighted average shares in the range of 45 to 46 million, and capital expenditures in the range of $270 million to $290 million Assumptions underlying this guidance include planned commodity and wage inflation in the low single digits a tax rate of approximately 19% and one to four net company owned restaurant closures. Which are not expected to impact over overall profitability. In the upcoming year, we will turn our focus to ramping up our reimaging programs for both Chili's and Maggiano's while also working on our long term new unit growth strategy.With the goal of fully rolling out both programs during fiscal 2027 helping us return to positive net unit growth. To provide some additional context on our guidance, we are confident our plans will enable us to lap fiscal 2025 and continue to significantly outperform the industry on sales and traffic. We anticipate the strongest same store sales growth at Chili's in the first quarter of the year with more moderate gains in subsequent quarters due to last year's high comparison base. Positive sales and traffic are expected for Chili's each quarter.As a reminder, we will continue to manage the business for the long term, and make investments strategically so timing of expenses may not be spread evenly across quarters. An unwavering commitment to investment in the fundamentals, continuing to improve our food service and atmosphere, has put us at the top of the casual dining industry. Being a part of the turnaround for the Chili's brand has been fun, and the exciting thing is that we are just getting started.I'm so proud of what the team has accomplished over the past three years, and I remain confident that by sticking to our investor growth strategy, we'll continue to drive further growth and sustain momentum through the business for the long term. And with our comments now complete, I will turn the call back to Holly to moderate questions.Operator: Certainly. At this time, we will be conducting a question and answer session. If you have any questions or comments, please press 1 on your phone at this time. We ask that while posing your question, you please pick up your handset if listening on speakerphone to provide optimum sound quality. Please hold while we poll for questions. Your first question for today is from David Palmer with Evercore ISI.David Palmer: Great. Thank you. I feel like I always say congratulations, but congratulations on a fantastic year. A question really on the restaurant margins, and I wanted to maybe ask for a comment on Maggiano's. But on the midpoint of the guidance would seem to imply maybe a 100 basis points of restaurant margin expansion next year. And that's better than what The Street was expecting. You know, your comps guidance was more or less in line with The Street. So just wondering, maybe could you give some detail about the line items you would expect to get leverage from or perhaps deleverage from.You know, I would expect there's gonna be some comparison help from restaurant expenses given the repair and maintenance investments, but there's concern about food inflation. So any color around that would be helpful. And then Maggiano's, just wondering conceptually at this point, Kevin, in what ways do you feel like the Maggiano's turnaround is going to be different in ways that are more or perhaps even less challenging than what you saw with Chili's. I see one brand as being a little bit more marketing led, than the other one. So any color on that and the prospects for turnaround would be helpful. Thanks so much.Mika Ware: Well, thank you, David. Okay. Well, I'll start. So, you know, just to clarify a little bit, our margin expansion next year I think it's gonna be more like I have, talked about in the past in that thirty forty basis points expansion. So I'm not really promising a 100 basis points at this time. That's more in line with the with the sales and the guidance that we gave on revenue. I will say that you know, there is some inflation in the cost of sales line. We could invest a little bit there. We've actually planned about $12 million of investments in the cost of sales line for Chili's.We also have a couple million planned in the food and beverage line for Maggiano's. For labor, we will continue to leverage that. Again, as we move forward and also our fixed cost in the in the other x line. So I'm thinking margins are still we're we're planning on expanding, but I think it's more in that 30 to 40 basis points range. Obviously, if sales are higher than we planned, then that gives us more opportunity to continue to expand the margins like we did this year.Kevin Hochman: And then on, Maggiano's, David, so I don't think it's really that much different than the Chili's turnaround. I think that's part of the challenges that we've had in the past year is that I think we kinda fell in love a little too much with this idea of elevating the experience when you actually talk to Maggiano's core guests and why they frequent Maggiano's, it's pretty clear. They love the taste of the food. Love scratch made Italian favorites. They love the abundant portion. So this idea of this over the value that they get from Maggiano's and they love the connections that they get from the teammates at Maggiano's. And the connections that they make.So they it almost feels like it's not a chain restaurant. To them. It's like their local restaurant. And when we look at what we were doing in the last twelve months and compare that to what I just said, were some things that were consistent, and then there were some disconnects. So for example, we had certain ways of bussing tables, that made less noise, and it was a lot more detailed on the way you drop plates on napkins and take a lot longer to bust a table when the reality is the Maggiano's guest is wants to be seated when the reservation comes. Right?Or if you're a walk in, they don't wanna be told forty minutes, they wanna be ten minutes. Right? So, if we get true about the experience that the Maggiano's guest wants, and then actually sit down with the with the Maggiano's leaders in the restaurant to understand how we can better serve them, I'm very confident we can get this thing back on track. So I don't think it's gonna be that different than Maggiano's, and I couldn't be more excited than of the COO that is coming over from Chili's. Who literally helped lead the three-year turnaround at Chili's. And knows exactly what success looks like. So very confident we're gonna get that thing back on track.Operator: Thank you. Your next question is from Chris O'Cull with Stifel.Chris O'Cull: Thanks. Good morning, and congrats on another great quarter. Kevin, I believe fiscal 2026 was the final year contemplated in three-year growth outlook the company had provided at the Investor Day. Just looking ahead, do you see a need to update those growth targets? And maybe if so, what particular metrics do you believe you should revisit? And then I had a follow-up.Kevin Hochman: I could start then, Mika, feel free to chime in. You know, the biggest thing I think that we see in the next three years that we didn't really contemplate at that investor Day two and a half years ago, was this ability to start building faster. It's gonna take a it's gonna take a year to build out that organization and find enough sites to really ramp up growth. But, like, we're in a way different place today than we were three years ago.Three years ago, whatever available capital we had needed to be deployed to the existing restaurants to get them in good working condition, get the equipment in the right places that they needed to be so that we start our turnaround on Chili's. And not build new restaurants. And now we're at we're in a completely different place that. Right? The restaurants are in much better condition. We have the equipment that's required to service the volumes that we're at now. So I don't see the need for deploying as, you know, as much capital the existing restaurants we can deploy to new restaurants.The second thing that's completely different about the business today, that a restaurant make three extra restaurant contribution today than they did three years ago. So when we build new restaurants, we get paybacks a whole lot faster. Makes it a whole lot more attractive to deploy capital to new restaurants. So that's the that's the that's when you asked that question, that was the first thing I thought was that's a very big difference than we were three years ago, and so there might be some needs to update that once we have a new build plan in place, which we're not ready to share yet. But I don't know if, Mika, you wanted to add anything beyond that.Mika Ware: Yeah. No. But, you know, just taking a step back, that 35% revenue growth is you know, that's a really nice range for us longer term. So we don't feel any need to immediately change it. EBITDA growth in the five to 8% in double-digit EPS growth. So right now, we feel really good about that. But like Kevin said, as we ramp up new unit growth, as we see you know, we've had some really great years of exceptional growth. As we see that start to normalize, then we'll make sure that our long-term algorithm reflects all of our expectations as we move forward. But right now, it's still a very relevant algorithm for us.Kevin Hochman: Okay. And then, Kevin, how are you thinking about opportunities to either increase marketing investment or improve the efficiency of this spend that you already are making? And then any comments maybe just on what could come next in terms of value? I mean, the big QP messaging has been very successful, but I'm just curious, what maybe the value innovation pipeline could look like.Mika Ware: Yeah. So, what was the first question again, Chris? I'm sorry. He just said about investment. So we are investing. We're we're stick we're keeping our marketing accrual as about 3% of total revenues, but that does allow us to incrementally invest every year as it grows a little bit. So I think we have about $1,920,000,000 more dollars in the budget this year. You know, we've we've made some huge step ups this point, so it'll be more about tweaking it and investing smaller pieces where we think it makes sense. But wanna talk about just the overall TV strategy, social, and Yeah. Okay. Value? I had forgotten the first question. Sorry.So the, so there is more money in the budget. Like Mika said, for marketing. Every year, the team looks at what worked, what didn't, and they make tweaks to the menu the marketing mix. So they'll probably be slightly more mixed to social this year. Based on the work that we've been doing with influencers. But I don't think there's like, major mix changes that we would report on other than some small tweaks. I mean, obviously, things are working pretty well. So kinda hard to rationalize making major changes to the mix. Other than just putting more money into the business. So and then as far as the value, we're gonna we're gonna stay on value.So we got a bunch of new margaritas of the month at $6 coming. We're gonna continue to ride the big QP. We've got some new advertising ideas on value. One is gonna be unpriced pointed that's gonna start fairly soon, something we haven't advertised yet, which I think is really exciting will be really exciting for the guest. And it won't screen value like a price point, but it'll screen value in other ways. And then in the back half of the year, we plan to have a all new message, for $10.99 value. That we're not ready to share yet.But so we're very much in touch with we need to make sure we continue to bring news to value keep it exciting for the guest, We have a lead right now versus some of our competitors We can't let our foot off the gas.Chris O'Cull: Great. Thanks, guys.Mika Ware: Thanks, Chris.Operator: Your next question is from Jeff Farmer with Gordon Haskett.Jeff Farmer: Good morning and thanks. Could you guys just provide a little bit more color on the expectations for basically the same store sales components, traffic pricing mix, your assumptions for Chili's in FY '26, And then beyond that, how you were thinking about casual dining segment traffic for '26 as well?Mika Ware: Okay. Okay. So I'll start, Jeff. So our pry I'll start with price. So we have our three to 5% pricing strategy. You know, we were taking price in previous years at a much higher rate. This last fiscal 2025, we got it to the mid single digits. And I think this upcoming year, what's embedded in our guidance is even a little bit lower, so a little closer to the 3% instead of the 5%. Some good news with that is we don't have a lot of price increases planned, for the back half of the year. We have a lot of flexibility there.If we have any unexpected inflation, I think we have some flexibility to take price if need be. But with that being said, we're very aware of the consumer, and we're gonna make sure that we protect our industry leading value and just lean into that barbell strategy. So we did take a little bit of price at the very end of Q4 in f twenty five. So that means that for f twenty six, Chili's price will be closer to that 4% range in Q1 and Q2 and then it'll taper off to three and then maybe two as the year goes on.So those are some high level guidance Again, we always reserve the right to take a little price or those could change, but that's what we have embedded in the guidance right now. As far as mix goes, you know, I said in my script that we expect it to be flat. We've had some great mix a great mix run, especially with the triple dipper As we start to lap that into f 26, that could start to moderate. I will say we had some great numbers in Q4. With on top of the triple dipper.We had some favorability We added the twelve ninety nine layer in our three for me and had some nice upgrades there that helped drive mix. We've we've also had some positive mix in appetizers. And a dessert. So with that being said, we're gonna keep with our sharp menu management. And any mix that continues to be positive will really be upside to, you know, what we're planning. And then as far as traffic goes, again, like I said, we plan to continue to be positive in traffic. We know that those comparisons get a little tougher in the back half, but our plan is to continue to drive traffic as the year progresses.Jeff Farmer: Alright. Thank you very much.Operator: Your next question for today is from Dennis Geiger with UBS.Dennis Geiger: Great. Thanks, guys, and congrats. First, I wanted to ask just on sort of if any shifts in the contributors to your sales momentum. Kevin, I know you ran and, Mika, I know you ran through a bunch of the drivers. Any shift in quarter from prior? You gave the free from eMex, I don't know, on the triple or something on the marketing side, if you're gonna notice anything different there. And as it relates to 2026, you know, some of your bigger, broader initiatives, does do the contributors look different in '26 and '25 recognizing, of course, there are there are different initiatives specifically?Mika Ware: You know, well, the same store sales being mid single digits, so that's just a different guideline. But what it's gonna be is, like I said, price will still be a contributor. It'll be, you know, not as high where it's mid single digits, maybe closer to the three to 4% range. We have mixed play planned flattish, and so any continued mixed progress will be upside there and then again to have positive traffic to fill in the rest. So that's kinda what we're planning as we move forward.Dennis Geiger: Got it. And then I just wanna touch on, on the new customer dynamic and sort of what you're seeing there. I know you've given updates in past as it relates to those new customers, the frequent you know, newer visits or kind of bringing customers back. Any kind of latest updates there on, on that cohort behavior shift that you guys are seeingMika Ware: Yep. So we're still growing all income levels, so that's the good news. We saw growth in low, medium, and high. Especially when you have traffic numbers like we've had. So every income level is growing. And as far as frequency goes, what I will tell you is we've had a huge influx obviously, of new and lapsed users, and our frequency is actually staying flat. So that's really good that we don't dilute that number as we move forward. So we're bringing new guests, and they're falling. They're having a great operational experience, and they're coming back just as frequently as our other guests. So we feel really good about how that's working out.Dennis Geiger: Thanks, Mika.Mika Ware: You're welcome.Operator: Your next question is from Christine Cho with Goldman Sachs.Christine Cho: Yes. Thank you so much, and congratulations on the successful three-year milestone. I was hoping to get a little bit more detail on your store reimage plans this year, particularly around that 200 priority assets that need updating. Any color on the timeline, scope, required investments, and any early sense of kind of the sales lift or return profiles for these investments. Thank you.Mika Ware: Yeah. So, Christine, we're still really early in the process. So our plan is to get four restaurants reimaged here in Dallas. They're gonna be at different levels and different scopes. We'll evaluate the results there, and then the team is working on what's really scalable for the back half of the year. Still a lot of learnings to be had this fiscal year. I expect later in the fiscal year, we'll have just more details to share on exact levels of investments, if we can expect any sales lift, and what that ramp up will be. Again, on the 200, that is where we said, hey. Those are some that we may prioritize as we start ramping up.But, again, we're just looking to get to that run rate that Kevin mentioned of that 10% per year just to get in a more just a better cadence of keeping all of our restaurants updated and relevant.Kevin Hochman: Yeah. I mean, the only thing I'd add is we're we're not in a rush to reimage. We're in a rush to get it right. Right. And then once we get it right, we'll we'll move with speed. So right now, we're just gonna get those four reimaged. We're gonna learn from them, and then, hopefully, we're gonna ramp up more the back half of the year. But like I said on my prepared comments, we don't expect to get to that 100 plus run rate until the start of calendar twenty seven.Operator: Thank you so much. Your next question for today is from Jeffrey Bernstein with Barclays.Jeffrey Bernstein: Great. Thank you. My first question is just on the fiscal 2026 comp. Think Mika, you just confirmed kind of that mid single digit guidance, which is similar to the revenue growth. Which I guess makes sense with really no material unit growth. But think you also noted plans for positive comps each quarter of the year Just wondering how you think about that, whether that's something that's important to you and obviously, the second and third quarter seems like it'll be a lot tougher to achieve. I'm just wondering if you're making decisions with that goal in mind or how you should how we should kinda think about that sequencing through the year.I know you said you're off to a good start, but just trying to understand the potential for those comps to go negative and still achieve that mid single digit for the full year. And then one follow-up.Mika Ware: Right. So I'll start and let Kevin kinda add some color on that. But, no, we feel really good I talked about that we have some great momentum into Q1, and we know that know, we feel really solid about that. And we have some great plans, to lap the to comp the comp. Say. So we do expect to have you know, positive same store sales at Chili's all four quarters. Now it will it will be maybe less positive as we lap the harder numbers, but we still expect it to beKevin Hochman: Yeah. I mean, we're very deliberate with the comments, Jeff, on that, in that we are very confident. You know, part of planning a year is math. Planning a year is making sure you have really strong plans so that you can deliver that math and the reason why we share comments that we did is we only we're able to do this. So look at the plans and you look at the momentum and you look at the run rate, Like, we believe you're gonna grow sales every quarter. Regardless of the how big the how big the rollover is. So that was very important to share with everybody. That's our expectation.Jeffrey Bernstein: No. We look forward to tracking that progress. And then the second question is just on the flow through. I'm just wondering how you balance maybe the desire to flow through the comm momentum into restaurant margin and ultimately earnings versus reinvesting in the business? Presumably, you're still in the early days of this turnaround, and therefore, reinvestment would be prudent. So I'm just wondering how you balance that and maybe what top investment priorities are. It sounds like it's guess, remodels in the short term, but how you balance the flow through to earnings versus reinvesting? Thank you.Mika Ware: Yep. So, Steph, that's always something that, you know, on the top of our mind. You know, if I take a step back and look at fiscal 2025, you know, Kevin recapped a ton of investments that we made. We watched our revenues that allows us to accelerate investments when we do really well. So with all those investments we've made, we still managed to grow restaurant operating margins by 400 basis points. You know, I started talking about this a little bit, but we do have some nice investments still already factored in the guidance that I gave you.So I mentioned the food that we have you know, about $12 million at Chili's built in for some investments in food. We have another mill million or two for Maggiano's. We actually have $17 million built in for some incremental labor for Chili's. Another $4 million for Maggiano's. So I feel really good about the investments that we have a nice amount of investments already built into this guidance we gave. So that's good. And I think that our rate of investment, you know, it is slowing a little bit, which is good. So we can flow through a little bit more. You know? But we'll we'll see what the sales do.So the sales allow us to accelerate some of those ideas. And have more. But at the end of the day, the most important thing is we are gonna take some of the profits and flow through and reinvest it back into the guest and team member experience because we think that is the secret sauce to our success. To continue to invest to improve that experience. It gives us you know, just better guest experience, more pricing power, all the things we need to stay relevant and, keep that top line growing.Jeffrey Bernstein: Thank you.Dennis Geiger: Thank you.Operator: Your next question is from Brian Harbour with Morgan Stanley.Brian Harbour: Hey guys, good morning. Where do you see the chance to build more Chili's as you sort of get to that unit growth plan? And I guess, you know, are there still other kind of real I think you've done successful relocations in the past too. Are there still opportunities to do that?Mika Ware: Yes. So, you know, historically, we've been very successful in our three biggest states, which is Texas and Florida and California. With Richard and team, we think we have an opportunity to do to even put some more analytics on the front half of this process and to go into some markets where we historically haven't gone. So just with the strength of the brand, with the with the sales, with the margins that allows us to move to different spots. It could be, you know, we could build more. We're we have some very some of our most successful restaurants are in the Northeast. So we could lean into that a little bit more.The Northwest is the area we said we haven't been in. And I do think there's just many areas across the country that we could probably look a little bit harder and expand our growth. So more to come on, you know, what we think that landscape looks like from a bigger picture. But we do think there's plenty of opportunity to build outside of those three main states.Brian Harbour: Okay. Thanks. Mika, is in cost inflation some or I guess also the investments, is that gonna be somewhat similar by quarter? Is there any lumpiness to that? I don't know. Know, where commodity contracting is if you think it's Yep. You know, more inflationary in the first half or anything like that.Mika Ware: Yeah. You know what? Right now, I'd say it's it's more evenly spread. So, you know, commodities might be a little heavier. The inflation And so that one might be a little Q1 and Q3 look like they have a little lumpiness to it. Be a little heavier in Q1. You know? But other than that, most of the other investments like labor, other things I mentioned are more evenly spread.Brian Harbour: Thanks.Operator: Next question for today is from Jon Tower with Citi.Jon Tower: Great. Thanks for taking the questions. One for Mika and one for Kevin. Mika, with the accelerated depreciation for this quarter and last quarter, can you just kind of help us think about how that's going look in fiscal 'twenty six? And then, Kevin, you had mentioned the north of six initiatives. I was just wondering if you could kind of flesh out what those stores are doing differently than the rest of the system, how they look, and what you're gonna integrate back into the remainder of the system, versus what they have today to kinda push them towards that $6 million AUV?Mika Ware: I'll start with depreciation. So, John, if you back out that accelerated depreciation of about $3 million I talked about, I think that probably dollar wise a good starting place for next year, what you can think the run rate of depreciation will be?Kevin Hochman: And then on north of six, John, so it there's there's several pieces to it. There's some short term pieces there's some longer term pieces. So the questions range from how do they better use the space in the heart of house or the kitchen to how do they staff differently, how do they schedule differently, Even things like delivery. So many of those restaurants get three deliveries a week instead of two deliveries a week. And then how they also space out certain things coming in a in a traditional delivery. Some come with the fresh delivery.There's some things we can change on that so that when they do get deliveries, it's not so overwhelming because they can spread it across multiple different deliveries. So a lot of different things coming from North Of 16. And it's really exciting because they're operating with the same mousetrap as the others. Like, they're not any they're not bigger They don't have bigger kitchens. They're not in, you know, dramatically different trade areas. It literally is the way they operate. And we're just taking the best learnings from those restaurants We're applying them to the existing restaurants. And then those restaurants are also coming up with new things that they don't do.That we can potentially deploy to the entire system to also improve throughput for everybody. So it's very, very encouraging. And, when we actually have things that roll out, I'll make I share them in the in the operational updates in our earnings calls. But it you know, our belief is there's so much more capacity still left in our business. Like, if look at our traffic over the last twenty years, like, we're now we're nowhere near where our peak was. So everybody's, like, wondering, like, you know, how much more can they do? And the answer is a whole lot more.If you believe, you know, twenty years ago with probably a more complex menu, we were to do even more throughput. So when we have more details on what we roll out, we'll make sure we share it. But, like, the first one we've done is the is moving a bunch of restaurants from two deliveries to three deliveries, which frees up a ton of time for those managers.Jon Tower: Right. Thanks for taking the questions.Operator: Next question for today is from Brian Mullan with Piper Sandler.Brian Mullan: Thank you. Kevin, you talked in the prepared remarks about how much the business changed over the last years. In that spirit, just want to ask about the evolution of the core four think it was something like 40% of sales when you started. I think. You know, maybe talk about how that's grown and where that fits today. And then just related to that, you know, as you as you address improving the rest of the menu from here forward, do you think the core four maintain the sales volumes, you know, at the same time you grow the rest of the menu? Any thoughts would be great.Kevin Hochman: Yeah. Well, the we call it the five to try now, because it includes your it continues to grow. So we continue to put on it, which is exciting. Thing that's really exciting, I think, in the next three years of the turnaround is our ability to then upgrade the balance of the menu. So they'll a lot of times people hear great things about Chili's, and they're like, oh, I'm gonna give it another try. And they come in and some we haven't touched everything. And the things that we haven't touched, they have a lower probability of being as good as the things that we have touched.And maybe they don't have as good experience as they would with the with the five to drive and our core items. And then that they leave thinking, maybe all the hype's wrong and this is the same old Chili's. Right? So you know, one of the ways that we can continue the comp growth over the next three years to make sure everything is as great as the five to drive. Is consistently made and has the right operational procedures. So that's all upside. And we just saw that. The ribs was not part of the core four. When we started. It's getting to a much bigger RIB spec.Getting the better a better recipe, better smoking, a crust on the ribs. We had to get new equipment to do that. And you know, I promise you, you go in and get a full rack of ribs, you're gonna be blown away. I mean, it's it's pretty awesome and I'm pretty excited about that product. And the thing I really challenged the team is, like, why can't all of our products be that wow? Right? They should be. That's why people go out to eat.So I have a lot of I have a huge amount of confidence that we're focused on the right things in the next three years, which is these other items that are not quite as big as the core four or the five to drive. And, you know, my hope would be in three years from now is that everything's as great as the as the five to drive. And I think we have plans to do that.Brian Mullan: Thank you. And just a follow-up. Same line of question. The steak platform and the salad platform, is there can you get to that this year? Is that maybe beyond this year?Kevin Hochman: No. I shared I shared all of our food innovation in the call. So our hope is get that in the '27, steaks and salads. So the main items that we're working on there'll be a full year ribs, full year frozen, We've got the new queso, which will also show up. It shows up, like, five different ways in the menu, but the nachos, the trash can not style nachos. Chicken bacon ranch nachos are gonna be a big I think, a big hit in the restaurants. And in the back half, we got this new chicken sandwich platform.And then all throughout the year, there's four core ingredients that show up in a ton of our recipes that we're upgrading, which is bacon bits. We're going to 50% more thick bacon strips. We've got upgraded mayo coming. That will eventually upgrade the munch once the once the mayo is upgraded. So we've got some pretty big upgrades coming in the core products that I think are gonna help all of the dishes too.Brian Mullan: Thank you.Mika Ware: Thanks, Brian.Operator: Your next question is from Alex Slagle with Jefferies.Alex Slagle: Congrats. Question on the ribs and what do you think the opportunity is there in terms of sales mix how you wanna really entice people to come in and drive that frequency and I'm kinda curious what the ribs mix was way back if you have any information on that kinda going years back.Kevin Hochman: Yeah. I don't I don't really have the specific numbers. I can tell you we don't mix that much today. Right? So before the rib upgrade, you know, I think it was, you know, between 45% when you add the smokehouse combos. What I can tell you right now is per one hundreds are up over 20%. And that's just from the menu merchandising and the quality of the ribs. And when you see guests, when they get the rib platter, they're just kinda blown away. That's why we have so much confidence that it's something that we could use to drive traffic.You know, it's not the biggest segment in the world, like bone in, bone in products aren't the biggest segment because young people tend to like things that are boneless. But we think we have such a good product. We think we'll we'll be able to use that to drive traffic. Over time. Maybe it won't be the big, you know, 10 pole that you see on TV with ten ninety nine you know, burgers. But there are we do believe it's such a good product. There should be ways to be able to get use it to drive demand and drive traffic into our restaurants. Because it is such a wow when you order it.So far, without any kind of advertising, just the menu merchandising, and the quality of product, we've seen an increase of 20% on incidents. So there's no reason why we don't think that could be even more once we turn advertising on.Alex Slagle: Great. And that's in the two q?Kevin Hochman: Yeah. That plan is to turn advertising on in Q2. Yes. Right.Alex Slagle: Got it.Kevin Hochman: Thank you.Operator: Your next question is from Eric Gonzalez with KeyBanc.Eric Gonzalez: Hi, thanks, and congrats on just a great year. Just curious if there's any discernible difference between the performance at lunch versus dinner or perhaps you're seeing strength during the week versus the weekend? Just anything you can read into regarding consumer behavior around the dayparts and the days of the week.Mika Ware: You know what, Eric? The great news is that there's not really a big difference. So we're driving lunch. We're driving dinner. We're driving weekday, weekend. So we're driving just all pieces of the business. The great news is that, you know, ten ninety nine three for me, that does drive lunch. It drives it drives everything. So, yeah. No. We're seeing we're seeing growth, across all parts. So very happy with that.Eric Gonzalez: Great. And then and then, Kevin, just on the on the mind, you know, turnaround, obviously, it's not a huge part of the business, but I'm just wondering, you know, how you're gonna manage your time and just make sure that it doesn't you know, become a distraction. Or, you know, do you feel like Chili's is just a well-oiled machine that maybe you could delegate a little more responsibility? And really focus on Mangano's, or is this know, just how you're thinking about that going forward.Kevin Hochman: Yeah. I mean I mean, obviously, that's a concern for everybody. Right? Because had such great success on Chili's. The first thing I'd tell you is we have an exceptionally strong, Brinker and Chili's leadership team. So over the last three years, we've built I mean, pretty much every one of our leaders are best in class in the industry. And so it makes it a little bit easier to take a little bit of time away from there to go spend more time in Maggiano's restaurants. The second thing I would tell you is all of our executives are doing listening sessions now. So it's year one, it probably was just me.A little bit of our COO, Doug Cummings. Now all of our executives are doing listening sessions, so we stay very much in touch with what's happening in Chili's. There's nobody on our leadership team. That doesn't know what the hot topics are that we need to know, bird dogging and improve in the business to continue to drive the comp. So the number one I'd say is I think the team is a lot stronger today than it was three years ago. The second is, you know, I've mapped out my time.I've done this before in a prior assignment where I run two brands and It's it's very easy when you start making choices about what, you know, what's most important and what's not. To figure out how to carve out time to do this. So I don't one, don't anticipate for forever. And two, I don't think it's gonna be that much time. If I thought it would be more time, I'd probably be having a different discussion with our board about what we wanna do. So I'm not particularly worried about it.I'm actually energized by the opportunity because I think the more I've gotten into the business the last couple months, the more I see is very, similar challenge to Chili's. And I think we're treating it a little bit differently, and I don't think it needs be treated that much differently. So you know, obviously, think I think in the next earnings call, we'll be able to share the initial things that we're gonna do because I think it is pretty clear what we need to do. And I think you're gonna see some progress. So but I'm not I'm to answer your question more directly, I'm not worried at all about the amount of time it's going to take.Eric Gonzalez: That's perfect. Thank you so much.Operator: Your next question is from Brian Vaccaro with Raymond James.Brian Vaccaro: Hi, thanks and good morning. Thanks for all the detail today. I had a question on the Triple Dipper and sorry if I missed it, but what was sales mix in the quarter? And are there any specific initiatives planned to continue to drive that platform?Kevin Hochman: So while they pull the mix, I'll I'll share the next initiative on triple. So the social team is constantly mining for how our guests are using the triple pip for and seeing other ideas that we can use. And so really there's two things going on. One is there's gonna be a social influencer push on a new way that the customer's been using the triple. So they've been ordering mock planks and then putting them on the burger bites. And then pulling the burger bite apart so you get, like, a cheese pull and that's inside of a burger. And that's gonna be happening soon. I think I to the next couple weeks.I don't have the exact date. Where that's gonna go live. So we hope that'll create some excitement on Triple. And then the second is we are we are gonna be putting Triple on TV. That's something that we just worked with our in our general manager conference. To make sure that they are aligned with what's happening. But it's a big deal because we do a ton of triples today. And so we're likely gonna be doing more once it goes on TV, and we need to make sure that operationally we're ready. And we've been spent the last two quarters making some things more operationally simple on the triple so that we can handle more volume.And we're also doing the EV at a time of year where the absolute volume seasonally are lower. We're gonna get a pretty good read about understanding whether we can activate triple one TV both in terms of driving demand with TV similar to what we've done with social, as well as can we handle the volume operationally. By doing in a quarter where we just don't absolute volumes aren't as high. So I'm very excited about the triple plans and I think all the other improvements that we're making on things like Baconbit and ranch and mayo, I think it's gonna also help the quality of the triple dip too.So I think we're gonna have a great year on triple dipper.Mika Ware: Yeah. And, Brian, the as think we talked about last quarter percent of total sales. So Triple Dipper is still 15% of our total sales, so still going strong.Brian Vaccaro: Okay. Great. That's that's very helpful. And I guess you talked also about rolling upgraded server handhelds. When do you expect that to be rolled? And kinda say details on how that cost is gonna be accounted for? Do you expect that to impact average table station sizes or the yield that productivity gains.Kevin Hochman: Yeah. So it's not so there's no it's not a hardware upgrade. We actually last year, we actually upgraded all of our iPads. To the latest version, and we got enough iPads because they're because the restaurants are so busy, we needed more iPads for all the servers. So that's all that's all been that's already been deployed last fiscal. The upgrade that we're talking about is a software upgrade. So it's completely changing the user interface It's removing all the 700 PLUs that kinda clutter the system. And then and then shortening the amount of time it takes to order something. So I think the team did a time study on it.It's gonna remove eight years of tapping for the servers when you add it all up annually. So it's a pretty big project. I believe it's gonna go live by Q3. I we can get an exact time of that. But I'm pretty sure at the end of the calendar year, it's gonna be ready to go. Assuming the testing goes well.Brian Vaccaro: Great. Thank you. And I guess just one more, Mika. On the fiscal 2026 guidance, what does that embed for G and A? Thanks for all the help today.Mika Ware: Yep. So G and A is gonna be about 4% of total revenues for the full year.Brian Vaccaro: Alright. Thank you.Mika Ware: Thank you, Brian.Operator: We have reached the end of the question and answer session, and I will now turn the call back to Kim Sanders for closing remarks.Kim Sanders: Thank you, Holly. That concludes our call for today. We appreciate everyone joining us and look forward to updating you on our first quarter fiscal 2026 results in October. Have a wonderful day. Bye, everyone. Thank you.Operator: Thank you. This concludes today's conference call. May disconnect your phone lines at this time, and have a wonderful day. Thank you for your participation.