BJ's Restaurants Q3 2026 Earnings Call Transcript

BJ’s Restaurants (NASDAQ:BJRI) reported third-quarter financial results on Thursday. The transcript from the company’s third-quarter earnings call has been provided below.

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Summary

BJ’s Restaurants reported strong Q3 results, with same-store sales increasing by 8.1% driven by an 8.3% growth in traffic, and restaurant-level operating profits increasing by $11.5 million.

Strategic initiatives such as the Pizookie Meal Deal and menu optimization contributed to sales growth and traffic, demonstrating effective execution of growth drivers.

The company raised its 2026 guidance, now expecting comparable restaurant sales growth of approximately 4.7% and adjusted EBITDA in the range of $149 to $154 million.

Operational improvements included enhanced guest experience and efficient management of labor and waste, leading to a margin expansion of 220 basis points.

Management expressed confidence in future growth, highlighting strategic investments in menu innovation, marketing efficiency, and new unit development, with plans to open several new restaurants in 2027.

Full Transcript

Ronna (Investor Relations)

We undertake no obligation to publicly update or revise any forward-looking statements or to make any other forward-looking statements, whether as a result of new information, future events, or otherwise. Unless required to do so by the securities laws, investors are referred to the full discussion of risks and uncertainties associated with forward-looking statements contained in the company’s filings with the Securities and Exchange Commission. We will start today’s call with prepared remarks from Lyle Team, our Chief Executive Officer and President, followed by Todd Wilson, our Chief Financial Officer, after which we will take your questions. And with that, I will turn the call over to Lyle.

Lyle Team (Chief Executive Officer and President)

Thank you, Ronna. Good afternoon, everyone, and thank you for joining to discuss our third quarter financial results, operating performance, and outlook. Q3 was an outstanding quarter for BJ’s Restaurants, outpacing internal expectations and underscoring both the progress we’ve made over the past and the sustainability of our growth drivers. We delivered another quarter of strong traffic growth with moderating check compression as anticipated and, importantly, continued profit growth as our operators efficiently converted top-line gains into strong margin expansion. This was our ninth consecutive quarter of sales and traffic growth and our eighth consecutive quarter of profit growth.

Same-store sales increased 8.1%, driven by 8.3% traffic growth. On the profit side, restaurant-level operating profits increased $11.5 million and margin expanded 220 basis points to 14.7%. Adjusted EBITDA increased 10.3 million and adjusted EBITDA margin increased 240 basis points to 8.8%. A few notable highlights from the quarter: first, our operators continue to elevate the guest experience as demonstrated by ongoing improvements in our Net Promoter Score while maintaining exceptional operational discipline reflected in the flow-through of our sales outperformance throughout the year. I have been very pleased with our team’s discipline managing the controllables—labor, waste, and comp food and beverage—while remaining focused on executing our strategy.

Second, Q3 reinforced the effectiveness of our growth drivers working together to drive performance. The Pizookie Meal Deal, or PMD, continues to resonate as a powerful everyday value platform, driving both new guest acquisition and repeat visits. Our seasonal Pizookie platform was anchored in two returning fan favorites, s’mores and the Spooky Pizookie, both in their third year, and we continued to support menu and product improvements with a focus on our handheld category.

Third, as previewed in our Q2 call, check compression moderated in Q3 as growth became more evenly distributed across our growth drivers. And fourth, our marketing plan continues to work effectively and efficiently. We continue to be agile, optimizing channel and messaging mix while maintaining a consistent reinvestment rate. When looking at the year as a whole, the results continue to reflect the progress our marketing and culinary teams are making in aligning product, messaging, and go-to-market strategies.

Overall, I’m proud of our third quarter performance and our outlook for the year. Our 2026 performance is delivering ahead of expectations. The shape of that performance throughout the year has been consistent with both what we expected and guided, all of which gives me further confidence that our strategies are working and underscores the durability of our progress. Looking at Q4 specifically, performance to date has been in line with our expectations and guidance as we continue to drive growth, building on a strong Q4 2025.

Looking at the consumer, demand remains resilient as we continue to grow traffic while moderating check compression and drive interest in new and renovated menu items. Over the past two years we have clarified our positioning, reorganized behind our four strategic pillars, and refined our growth drivers, all focused on building a stronger BJ’s Restaurants and delivering sustainable and profitable growth. Over that time frame, we have increased average unit volumes roughly 10% to 6.7 million, expanded average unit profit by roughly 24%, and improved NPS by more than 600 basis points, strengthening a robust foundation for enduring growth.

Looking ahead, our strategy remains centered around ensuring our restaurants continue to be places our team members are proud to work in and our guests are excited to return to. Everything starts with our team members. They bring our brand promise to life every day, and we’re committed to ensuring they have the tools they need to deliver for our guests. We just returned from our General Manager conference and the energy and enthusiasm were palpable.

Our managers are aligned, engaged, and committed to getting better every day, one of our core foundational values. We spent our time together focused on leadership development, driving One BJ’s Way consistently across our restaurants, aligning around clear expectations of what great looks like at BJ’s Restaurants, and ensuring our teams have the operational support they need. From point-of-sale upgrades to a new learning management system, we continue to invest in practical tools that make our operators more efficient and consistent.

On the menu front, our three core pillars—Pizookies, PMD, and Product News—continue to drive our calendar as we optimize to balance traffic and mix. The team has done a fantastic job of building a craveable Pizookie pipeline with clear visibility through 2027 while also developing the supply chain agility to capitalize quickly on emerging cultural trends as they present themselves. I would encourage everyone to try our holiday lineup featuring our new Telegon Bananas Pizookie and our Brown Butter Biscoff Pizookie.

They are both absolutely delicious and out now. The Pizookie Meal Deal continues to deliver, driving both new customer acquisition and repeat visits. It is a BJ’s Restaurants-ownable everyday value platform that reinforces two of our signature equities—menu variety and Pizookie—across our core menu categories. I remain pleased with the work completed to date and excited about what lies ahead. Across pizza, burgers, and chicken sandwiches, each revamped category is generating higher incidence, increased sales, higher average checks, and stronger dollar margins. This is inclusive of more than 1.5 million reinvested back into product quality. This holiday season, we’re excited to feature a 16-ounce Hawaiian ribeye, which is a delicious upgrade and twist on our most popular steak for the holidays, alongside a shareable sides platform led by Truffle Mac and Cheese.

Based on initial guest resonance during testing, we believe this shareable side platform has runway as we continue our menu work into 2027. As we advance our work across the menu, we will continue delivering a more craveable, compelling, consistent, and profitable offering over time. I look forward to sharing further updates in the coming months as items move through testing and validation. Ensuring the atmosphere across our 219 existing restaurants remains a competitive advantage is an imperative for BJ’s Restaurants. We continue to invest in the existing fleet to ensure our team members have the facility and equipment they need to deliver on our high standards and that our guests visit restaurants they’re excited to come back to. We’ve made material progress on our deferred facilities work with a focus on sharpening our replace-versus-repair strategy to ensure we are solving and not band-aiding problems.

This is supported by a diligent preventative maintenance program as we continue to drive a shift towards planned versus unplanned repairs and maintenance. Turning to new unit development, we are just a few weeks away from opening our Joliet, Illinois location, followed by Buckeye, Arizona in Q1. Both will showcase a meaningfully refreshed expression of the BJ’s Restaurants brand. These markets represent a balanced mix, as Buckeye expands our footprint in an established, high-performing market, while Joliet provides an opportunity to build brand awareness and drive operational leverage in a developing market.

We continue to build our pipeline and expect to open a handful of additional units in 2027 as we continue to refine the prototype and apply a right size, right place, right cost approach to our next chapter of unit growth. In closing, two years into our journey to unlock the full potential of BJ’s Restaurant and Brewhouse, our results reflect clear and measurable progress, with AUVs up over $500,000 and average unit profit up $220,000. BJ’s Restaurants now averages over 1.1 million in restaurant-level profit per restaurant, and we’re building from a significantly stronger foundation. We remain guided by our four strategic pillars and focused on making BJ’s Restaurants better every day as we enter our next chapter of growth.

Before closing, I want to thank all of our BJ’s Restaurants team members across our restaurants and the Restaurant Support Center for their passion and commitment. We talk often about being better every day and stronger together, and once again in Q3, our teams took care of each other, took care of our guests and our restaurants, and delivered another great result for BJ’s Restaurants. Thank you, and I will now turn it over to Todd for more color on our financial results and outlook.

Todd Wilson (Chief Financial Officer)

Thank you, Lyle, and good afternoon, everyone. We delivered another strong quarter of results led by 8.1% comparable restaurant sales growth. Revenue increased by $28.5 million and restaurant-level operating profit increased $11.5 million, delivering more than 40% incremental flow-through and 220 basis points of margin expansion, and adjusted EBITDA increased by $10.3 million. Total revenue for the quarter was $358.6 million, an 8.6% increase versus last year.

The comparable restaurant sales increase of 8.1% was led by 8.3% traffic growth, partially offset by a 0.2% decline in average check. Our sales and traffic momentum was driven by continued execution against the proven growth drivers Lyle highlighted earlier. Growth was broad-based, with gains across every day of the week, daypart, and revenue center. We outperformed the Black Box casual dining national benchmarks on both sales and traffic, led by traffic outperformance of more than 800 basis points, with our outperformance extending across all geographic regions.

The average check decline of 0.2% was in line with our expectations and a meaningful step forward from the 1.8% decline reported in the second quarter. We are seeing our menu renovation work lead favorable shifts toward pizzas, burgers, and chicken sandwiches, where check contribution improved 40 basis points from the second quarter to the third. Combined with initial stabilization in our higher-tier steaks and slow roast offerings, these efforts are driving clear sequential momentum in our check trajectory.

Turning to restaurant profitability, restaurant-level operating profit was $52.9 million and margins increased 220 basis points to 14.7%. Continued progress on our gross-to-net initiative contributed to restaurant-level margin expansion. Total comps and discounts declined 50 basis points as a percentage of revenue, reflecting stronger operational execution and more effective deployment of promotional offers while supporting strong traffic growth.

Cost of sales was 25.3%, a 40 basis point improvement versus last year. Commodity inflation eased to approximately 2% in the third quarter, a reduction from the 5% we experienced in the second quarter. Operationally, we continue to reduce comped food and beverage incidents, contributing to the overall gross-to-net improvement. Our menu renovation work also contributed to the gains, as the new pizzas, burgers, and chicken sandwiches deliver an improved margin profile.

Total labor expense improved by 90 basis points to 36.2%. Our operators continue to execute with discipline, delivering the leverage we expect with the gains in sales while continuing to improve guest satisfaction measures. These results include an increased restaurant bonus expense of 10 basis points. This additional compensation is well earned and deserved, as our operators continue to deliver great work and results. Occupancy and operating expenses were 23.8%, a 90 basis point improvement versus last year.

I would highlight two items within this category. First, overall the margin improvement was led by leveraging our fixed costs over the significant increase in sales. Second, marketing spend in the quarter increased $0.9 million, a 13% increase versus last year and a 10 basis point increase as a percent of revenue. However, as Lyle noted, we expect our marketing investments as a percent of revenue on a full-year basis to be consistent year over year.

The increased dollars supported our proven growth drivers: TMD, Pizookies, and product news. Our marketing team has continued to drive significant traffic growth with improved efficiency and investment return. General and administrative expenses were 6.6% of revenue, a reduction of 20 basis points versus last year. On a dollar basis, G&A increased $1.3 million, primarily reflecting higher incentive compensation expense connected to our strong performance, partially offset by lower deferred compensation expense driven by our strong financial results through the first three quarters. We now expect full-year results to exceed target for incentive compensation.

As a result, we recorded an incremental $1.7 million expense in the third quarter compared with a $0.6 million reduction in the quarter last year. This represents a $2.3 million year-over-year increase in expense. Based on our current outlook, we anticipate $0.6 million of incremental expense in the fourth quarter, partially offsetting this increase. Deferred compensation expense declined approximately $1.2 million. As a reminder, this expense reflects changes in the value of the program’s underlying investments, in which there is exposure to the broader equity markets, and is generally offset in other income.

Adjusted EBITDA increased to $31.4 million compared to $21.1 million last year, representing approximately 36% flow-through on incremental revenue. Turning to capital allocation, our strong cash generation supported investment in the business, share repurchases, and debt reduction. First, we invested $19.9 million in capital expenditures focused on supporting our current 219 restaurants. We remodeled two restaurants during the quarter, bringing our total for the year to 12, and expect one more in the fourth quarter as we prepare to accelerate the pace in 2027. In addition, we are investing in the two new restaurants that are under construction.

Second, we repurchased and retired approximately 17,000 common shares for $1 million. Third, we repaid $28 million of debt. We ended the quarter with net debt of approximately $4 million, a substantial reduction from the $61 million we carried at the start of the year. Turning to our 2026 financial outlook, led by our consistently strong results, we are again raising guidance for select financial metrics. We now expect comparable restaurant sales growth of approximately 4.7% compared with our previous range of growth of 3% to 4%. Restaurant-level operating profit in the range of $233 to $237 million compared with $228 to $235 million previously. Adjusted EBITDA in the range of $149 to $154 million, up from $145 to $152 million previously.

We now expect capital expenditures to be approximately $80 million compared to our prior range of $85 to $95 million. Our share repurchase guidance remains unchanged at up to $50 million, subject to market conditions, and reflects our financial ability and willingness to increase purchases meaningfully if market conditions warrant. We repurchased approximately $9 million of shares through the third quarter and an additional $1.6 million in the fourth quarter to date.

I’ll also provide additional color for modeling purposes, starting with our raised guidance for comparable restaurant sales growth to approximately 4.7%. As we discussed last quarter, we expect to grow comparable traffic and sales in the fourth quarter even as we lap strong traffic growth last year. Our outlook includes an approximately 100 basis point headwind in the fourth quarter from unfavorable shifts for Halloween and Christmas, as many others in the industry have noted.

Additionally, we expect occupancy and operating expenses to be approximately 23% of revenue in the fourth quarter compared with 22.6% last year. Approximately 20 basis points of the anticipated increase versus last year reflects higher marketing spend, with the remaining increase driven by general liability costs and repair and maintenance expense as we make progress toward our gold standard facility target. In summary, our third quarter results were excellent. Year to date, comparable restaurant sales have grown 5.6%, restaurant-level margin expanded 80 basis points, and adjusted EBITDA has increased $15 million. These results demonstrate our strategies are working and our team is executing at a high level. We are converting strong traffic and sales growth into higher profitability while continuing to invest in our restaurants and strengthen our balance sheet.

These results are only possible because of the hard work of our restaurant field leadership and support center teams. Thank you and congratulations as we work to close a great year in 2026. We remain focused on executing our core strategies and to continue our growth in 2027 and beyond to deliver value for shareholders. With that, we will now open the line for questions. Operator.

OPERATOR

Thank you. At this time, if you’d like to ask a question, please press star one on your telephone keypad. To leave the queue at any time, press star two. Once again, that is star one to ask a question. And our first question will come from Brian Buettner with Oppenheimer and company. Please go ahead.

Mike Tamiston (Analyst at Oppenheimer)

Hi, thanks. This is Mike Tamiston for Brian. So congratulations first on the strong results. You know, the commentary in the fourth quarter so far, being in line with the guidance, are you trying to say that it’s in line with the full-year guidance or in line, you know, that would get you to the full-year guidance? Because I think the math would imply that the fourth quarter would be in like the high 1% range. So if you could just clarify that. And then maybe even with the holiday shift, it does, I think, suggest that the trends are maybe moderating a little bit.

Is there anything that you’re seeing that’s giving you a little caution or are you just trying to play it a little bit safe right now? Thanks.

Lyle Team (Chief Executive Officer and President)

Yeah, sure. Look, I mean, I’ll start and then—Todd can talk to it. Look, this is Lyle, by the way. I feel really good about Q4. I feel great about the programs that we’re putting into market, which actually just kind of landed today. We’re building on what was obviously a really strong Q4, 2025, and we’re growing traffic, we’re moderating check, and building a stronger business. So I feel great about that. I think the thing that I also try and keep myself and the teams focused on is, more importantly, when I take a step back, I feel really good that over the past couple of years what we’ve done is build multiple growth drivers that are now working together to develop a stronger foundation, which has allowed us now, over two plus years or nine quarters, to be lapping positively and growing traffic and growing our business independent of what the lap looks like.

And I don’t see Q4 being any different. So overall I feel good about it, particularly as you look at the one and then the two-year stack.

Todd Wilson (Chief Financial Officer)

Yeah, the only thing I’d add on top of that is just in terms of the guidance, we’ve tried to be really thoughtful about how we issue our guidance. We’ve raised it now twice this year and I think very thoughtful steps, and I’d say broadly all of our comments—what you referred to with Lyle as well as mine—we feel good with the guidance that we put out for the full year and obviously we’ll do our best, and our expectation is that we’ll deliver that and take a step up from there.

Mike Tamiston (Analyst at Oppenheimer)

All right, thank you. And then I just want to make sure I heard you right, Lyle. I think you said you’re going to have one unit opening in the fourth quarter and then another one in the first quarter from those initial set of units and then a total of a handful in ’27. So one, is that right? And then two, how many—handful—is that? Two, three, four, five-plus? If you could just sort of help us frame that up. Thanks.

Lyle Team (Chief Executive Officer and President)

Yeah, sure. So yes, you heard me right. There’s one in Q4, there’ll be one in Q1, and then as you know, as you look at a handful—and the only reason I’m cautious about this is because with development, best-laid plans and then permitting and construction and all of that—but you know, you’re probably talking in that mid-single-digit range. So around that four or five is a good place to be thinking for next year.

Mike Tamiston (Analyst at Oppenheimer)

Awesome. Thanks. Congrats, guys.

Lyle Team (Chief Executive Officer and President)

Thank you.

Todd Wilson (Chief Financial Officer)

Thank you.

OPERATOR

Thank you. Our next question comes from Jeff Farmer with Gordon Haskett. Please go ahead.

Jeff Farmer (Analyst at Gordon Haskett)

Thanks. Just wanted to quickly follow up on the Q4 same-store sales. So I hear you loud and clear on most of the pieces of this. But having said that, are there sort of notable sequential shifts relative to Q3 that we should be aware of as it relates to pricing, traffic mix, anything? I heard you on the 100 basis point calendar shift headwind, but anything else that would sort of push that one-year and two-year number down?

Lyle Team (Chief Executive Officer and President)

I mean the only thing that you’d be looking at is obviously Q4. If you look at Q4 last year versus Q3 of last year, Q4 was, you know, we obviously had very strong performance in Q4 of last year. So, I mean, I guess, you know, that would be the only thing. But again, you know, for me at least, I’m looking at the business as: are we building a foundation of a business that, independent of what the quarter we’re lapping looks like, we have the tools and the ability to consistently grow our business over the course of, you know, the past two years plus the years to come.

And that’s what we’re focused on. So, you know, I feel good about what we’re seeing in Q4 so far, but the only thing would be the fact that the lap in Q4 is different than the lap in Q3.

Todd Wilson (Chief Financial Officer)

I’ll tip in one more time, Jeff. I’d make the point of, you know, our annual guidance. If you think about the change, the raise in our annual guide, it really reflects the way we beat our expectations in Q3 flowing forward. We really didn’t make significant changes to our Q4 expectations. So our expectations for Q4 have been very consistent.

Jeff Farmer (Analyst at Gordon Haskett)

Okay, that’s helpful. And then just as a follow-up, you touched on it, but you introduced the holiday menu today. And I’m just curious in terms of how you guys are sort of leveraging menu news. Obviously you’ve seen your peers have had some success in doing that. But just as it relates to the strategy in leveraging the menu news in terms of driving traffic or attracting new guests, is there something new or different that you guys are doing now?

Lyle Team (Chief Executive Officer and President)

I don’t know if it’s new or different. It’s consistent with how we’ve kind of built the growth drivers over time. So if you just kind of take a step back, looking at the story, right, we kind of first we built kind of the value platform and the Pizookie Meal Deal. Then we unlocked the seasonal Pizookies and that became kind of a second layer in the growth driver. And then with pizza, we started on the menu work, and that together started to build and codify for us this strategy of, you know, Pizookies, PMD and product as we call it.

And then as we connect that to our marketing and channel strategies, we refine and we see that particularly Pizookies and product work very strongly for us in the kind of social, word of mouth, influencer space, while the value platform works better in kind of broader paid media as kind of air cover to that. And so we’ve been refining and moving that strategy forward. So we went from pizza, then we did, I think, the Wagyu burger, then we leveraged chicken sandwiches in Q3.

As we go into Q4, we obviously have the Pizookie layer, continue to have that PMD air cover. And now with the Q4 platform, we have some shareable sides and this kind of riff on the steak and slow roast category. And the only other thing I’d add for context for you guys is we try and leverage as many tools as we have to advance our learning. So earlier this year, similarly to what we’re doing this holiday season, we used what we call a PMI, which is a national kind of window, to get a scaled test on the Wagyu burger. And it went really well. And so we’re able to accelerate that onto the menu as we continue to refine that category.

So this holiday season, we feel really good about this steak product and the shareable sides. So we’re doing that in the kind of national promotional window that’ll be able to accelerate scaled learning for us and inform and help us accelerate those category refreshes as we go forward. So trying to leverage, you know, the tools that we have to learn and evolve our menu renovations. Thank you. Oh, sorry. Go ahead. I wasn’t sure if I interrupted, Gordon.

Jeff Farmer (Analyst at Gordon Haskett)

No, I just said helpful. Thank you. Appreciate it.

Lyle Team (Chief Executive Officer and President)

Cool. No worries.

OPERATOR

Our next question will come from Alex Slagel with Jefferies. Please go ahead.

Alex Slagel (Analyst at Jefferies)

Hey, thanks, and congrats on the work. I wanted to ask, I guess on mix as a component of check. Others have seen some softening mix, like alcohol and desserts and things like that recently. So wondering if you’re seeing anything on that front. And then related to the 4Q thoughts, are there any capacity issues as you head up into the holidays that maybe add a bit of conservatism, or is that not really an issue?

Lyle Team (Chief Executive Officer and President)

So, again, I’ll start at a high level. And, Todd, you can, you know. From a mix point of view, we actually haven’t seen any sort of negative mix increase. If anything, we’re seeing some balancing out of that mix and moderation of check as we’ve kind of managed the multiple growth drivers going into Q3 and in Q4. And so we’d still expect that check to moderate as we flagged in Q2. So we have not been seeing those mix challenges so far. From a volume point of view, I don’t see a real capacity issue. Certainly we know during the holidays we’ll be very busy, as we always are. And we are uniquely kind of structured to deal with large parties, which is a great thing for us over the holidays. But when I look at kind of our top restaurants, the top handful of restaurants and the AUVs that they’re delivering, and what we kind of see every Valentine’s Day and Mother’s Day, it gives me confidence that as we focus on being as efficient and as effective as we can, managing the shoulders and the transitions, that we have the capacity to grow the business.

So, you know, I feel good about our ability to do that as we head into Q4.

Alex Slagel (Analyst at Jefferies)

Okay, can you remind us what sort of that strongest cohort of restaurants looks like in terms of, like, what kind of restaurant-level margins they’re producing and if there are, like, commonalities about how they execute or staff up or leverage tools or things like that?

Lyle Team (Chief Executive Officer and President)

Yeah, I mean, look, when you look at them, I mean, the nice part about it is, you know, as you’re looking at that kind of ten plus million dollar AUV cohort of restaurants, they exist across the country. We have probably the highest concentration of them on the West Coast, but we have those restaurants across the country. And then from a margin profile, obviously they all at that level are throwing off great cash flow. But the specific margin will vary a little bit depending on the operating dynamic of the market that they’re operating in, is what I would say.

But, you know, what we are always looking at as we talk about our outlier program is how do we take what the top cohorts are doing in terms of managing their business effectively and share that across, and how do we continue to bring the bottom cohort up? I don’t know if—Don, you have any other specifics there?

Don

Yeah, Alex, the only thing I’d add on is I talked a little bit in my prepared remarks about the breadth of our performance. You know, obviously our top performer, top quartile, you know, as a group, those restaurants are pushing $10 million AUVs. And so, you know, that’s a very high-performing group. But I think, you know, equally encouraging to us is we see growth across all of the quartiles. And I mean growth in terms of sales. I also mean the growth in terms of restaurant-level profitability.

So just kind of reiterating the point of we’re seeing positive movements across the entirety of the portfolio.

Alex Slagel (Analyst at Jefferies)

Great, thanks.

OPERATOR

Thank you. Our last question will come from Sharon Zackfia with William Blair. Please go ahead.

Sharon Zackfia (Analyst at William Blair)

Hi, thanks for taking the question. I guess I’m curious, you know, as we’re maybe settling into kind of a more normalized comp run rate, what do you think that means for unit-level margin expansion? You’ve done a tremendous amount of recovery in the last few years. I mean, what does a low single-digit comp kind of get you going forward in unit-level margin?

Lyle Team (Chief Executive Officer and President)

Again, I’ll start, and—so I guess importantly, I think the thing that underpins all of that, Sharon, is the growth. And I feel really confident in the engine we’ve built over the past two plus years and, as we go into Q4, our ability to continue to drive traffic growth and drive top-line growth as we continue to lap previous performance. So, you know, I think my confidence in the foundations we’ve built and our ability to drive that traffic growth are the foundations of everything.

And then I think, you know, as we continue to do that, our focus, as we’ve always kind of talked about, is going to be about how do we make sure that we’re dropping more dollars to the bottom line and, over time, expand margin but not let just expanding percentage margin get in the way of doing the right thing to make sure we continue to drive that traffic and drive more dollars to the bottom line. I also think the only other color I’d give is it’s also connected to the menu work that we’re doing. So as we continue to drive traffic and then moderate check and continue to evolve the menu work and see people exploring the categories that we’re renovating—like they have with pizza, like they have with burgers and chicken as we’ve seen there—that tends to have a benefit to us from both a dollar and a percentage margin point of view as we renovate the categories.

So, you know, kind of a high strategic level, I feel really good about the roadmap there.

Todd Wilson (Chief Financial Officer)

Yeah, Sharon, I’ll add some color. I mean, if you look at our guide for this year, I mean we’re clearly guiding to grow restaurant-level dollars and restaurant-level percentage versus a year ago. And, you know, to your point, the company’s done that for many years. I think there’s always different dynamics at play. You know, we’ve talked on prior calls about the different dynamics of commodities or whatever it may be, but I think to many of Lyle’s comments, you’ve seen us be able to navigate all of those things, still grow the top line, still grow the bottom line.

So, you know, a high degree of confidence that we can continue to make those gains.

Sharon Zackfia (Analyst at William Blair)

Okay. Thank you.

OPERATOR

Thank you. Ladies and gentlemen, this brings us to the end of today’s meeting. We appreciate your time and participation. You may now disconnect.

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