This story was originally published on Restaurant Dive. To receive daily news and insights, subscribe to our free daily Restaurant Dive newsletter. Dive Brief: SPB Hospitality, a portfolio company of Fortress Investment Group, has appointed G.J. Hart as chairman and chief executive officer, effective immediately, the company said Monday in an emailed press release. Hart, who previously served as CEO at Red Robin, succeeds Josh Kern, who is resigning to take a different executive role in the restaurant ...

Financial Data and Key Metrics Changes - For Q1 2025, total revenue was $119.2 million, up from $116.2 million in Q1 2024, representing a year-over-year increase of 2.6% [21] - Company-operated restaurant revenue increased by 1.2% to $98.4 million from $97.2 million in the same period last year, driven by a 0.6% increase in comparable restaurant sales [21][22] - GAAP net income for Q1 2025 was $5.5 million, or $0.19 per diluted share, compared to $5.9 million, or $0.19 per diluted share in the prior year [28][29] Business Line Data and Key Metrics Changes - Franchise revenue increased by 16.2% to $13.2 million, driven by IT pass-through revenue related to the franchisee rollout of a new point of sale system [23] - The increase in franchise revenue was partially offset by a 1.3% decrease in comparable restaurant sales [23] Market Data and Key Metrics Changes - System-wide comparable store sales decreased by 1.2% in Q2 to date through April 23, 2025, with a 0.1% decrease in company-operated restaurants and a 1.8% decrease in franchise restaurants [24] Company Strategy and Development Direction - The company is focused on a brand turnaround, emphasizing long-term sustainable growth without shortcuts [5] - Upcoming initiatives include a brand relaunch and menu innovations, such as the launch of Fresca wraps and salads, and quesadillas [6][9] - The company aims to open at least 10 new restaurants in 2025, marking the largest system-wide unit growth since 2022 [16][17] Management Comments on Operating Environment and Future Outlook - Management acknowledged that the first quarter results were underwhelming but expressed confidence in the steps being taken to improve performance [6] - The company expects sequential quarterly acceleration in comparable sales trends in Q3 and Q4, driven by the brand relaunch and new product launches [24] - Management noted that the consumer pullback is real, but they are focused on what they can control, including reinforcing quality and value [35] Other Important Information - Food and paper costs as a percentage of company restaurant sales decreased by 120 basis points year-over-year to 25.2% due to higher menu pricing [24][25] - Labor and related expenses increased by 120 basis points year-over-year to 32.7%, with wage inflation of approximately 12% in Q1 2025 [25][26] - The company expects to remodel between 60 to 70 system-wide restaurants in 2025, with eight already completed [19][30] Q&A Session Summary Question: Expectations for Q2 same store sales - Management indicated that headwinds are expected to continue in Q2, but they are focused on their brand relaunch and menu innovations to drive sales [34][35] Question: Impact of new product launches on comp trends - Management noted that the Mango Habanero product drove initial trial, and they are optimistic about the upcoming launches of Fresca wraps and quesadillas [38][40] Question: Regional differences in consumer behavior - Management observed that the consumer pullback is widespread, affecting various income bands, including the Hispanic consumer [51][52] Question: Menu pricing expectations for the year - Management expects menu pricing to be around 3% for the year, with approximately 2% in Q3 and Q4 [53] Question: Operational gaps identified through consumer feedback - Management is implementing a back-to-basics program to address operational gaps, focusing on accuracy and hospitality [70][72] Question: Kiosk rollout status and benefits - Kiosks are in most company restaurants, with plans to complete the rollout in the remaining locations, and management sees opportunities to enhance guest engagement through kiosks [73][74]

Financial Data and Key Metrics Changes - For Q1 2025, total revenue was $119.2 million, up from $116.2 million in Q1 2024, representing a 1.7% increase [19] - Company-operated restaurant revenue increased by 1.2% to $98.4 million, driven by a 0.6% increase in comparable restaurant sales and additional sales from two new restaurant openings [19] - The effective price increase was approximately 4.4% compared to 2024 [20] - GAAP net income for Q1 2025 was $5.5 million, or $0.19 per diluted share, compared to $5.9 million, or $0.19 per diluted share in the prior year [26] Business Line Data and Key Metrics Changes - Franchise revenue increased by 16.2% to $13.2 million, driven by IT pass-through revenue related to a new point of sale system and new franchise openings [20] - Comparable restaurant sales decreased by 1.3% for franchise-operated restaurants [20] Market Data and Key Metrics Changes - System-wide comparable store sales decreased by 1.2% in Q2 to date, with a 0.1% decrease in company-operated restaurants and a 1.8% decrease in franchise restaurants [21] Company Strategy and Development Direction - The company is focused on a brand turnaround, emphasizing long-term sustainable growth without shortcuts [5] - Upcoming initiatives include a brand relaunch and menu innovations, such as the launch of Fresca wraps and salads, and quesadillas [6][8] - The company aims to open at least 10 new restaurants in 2025, marking the largest system-wide unit growth since 2022 [14][15] - Remodeling efforts are ongoing, with plans to remodel 60 to 70 restaurants in partnership with franchisees [17] Management's Comments on Operating Environment and Future Outlook - Management acknowledged a challenging consumer environment but remains confident in the brand's long-term potential [6] - The company expects sequential quarterly acceleration in comparable sales trends in Q3 and Q4, driven by the brand relaunch and new product launches [22] - Wage inflation is anticipated to be between 4% to 5% for the year, with Q1 experiencing a 12% increase [23][24] Other Important Information - The company has transitioned to a new distribution partner, which is expected to enhance margins and support future growth [14] - The restaurant contribution margin for Q1 was 16%, down from 17.6% in the previous year, primarily due to labor inflation and occupancy costs [24][25] - General and administrative expenses decreased to 9.5% of total revenue, aided by prior year restructuring costs [26] Q&A Session Summary Question: Expectations for Q2 same store sales - Management noted that consumer pullback is real and expects headwinds to continue into Q2, but is focused on brand relaunch and value innovation [32][33] Question: Impact of new product launches on comp trends - The Mango Habanero product drove initial trial, and upcoming launches of Fresca wraps and quesadillas are expected to attract different consumer segments [36][38] Question: Timing of kitchen equipment rollout and labor cost impact - Equipment rollout is ongoing, with expectations of improved labor efficiency as new systems are implemented [41] Question: Regional differences in consumer behavior - Management observed similar consumer pullback across markets, with particular pressure on the Hispanic consumer segment [50][51] Question: Menu pricing expectations for the year - The company expects menu price increases to be around 3% for the year, with variations across quarters [52] Question: Development pipeline momentum - Management expressed optimism about the development pipeline, with confidence in opening at least 10 new units this year and potential for more in the following year [59][60]

Financial Data and Key Metrics Changes - Fiscal 2024 revenue for ongoing business was $1.75 billion, a decline of 12.1% compared to the prior year, primarily due to discrete items in 2023 [38] - Full-year adjusted gross margin was 44.6%, an increase of 470 basis points versus last year, reflecting cost-saving actions and improved sales mix [39] - Fourth-quarter revenue was $495 million, exceeding expectations, with ongoing business revenue growing 3% year-over-year [42] - Fourth-quarter adjusted gross margin was 44%, a year-over-year increase of 620 basis points [45] - Full-year diluted earnings per share was $0.91, compared to $0.15 in 2023, indicating significant profitability improvement [41] Business Line Data and Key Metrics Changes - Saucony grew 7% in the fourth quarter, with low teens growth in the US and over 20% in EMEA, driven by strong demand and improved product offerings [17][43] - Merrell posted a 1% revenue increase in the fourth quarter, continuing to gain market share in the US hiking category [25][43] - Sweaty Betty's revenue was down 6% in the fourth quarter, although profitability improved with nearly 900 basis points of gross margin improvement [30][43] - Wolverine brand's revenue performance was encouraging, but trends remained inconsistent [32] Market Data and Key Metrics Changes - Saucony's running business gained market share in the US run specialty channel for the second consecutive quarter [17] - Merrell gained significant market share in the US hiking category, marking the eighth time in the last nine quarters [25] - The work group revenue increased by 21% in the fourth quarter, driven by strong demand for core franchises [44] Company Strategy and Development Direction - The company is focused on stabilizing its foundation and driving growth through brand-building investments and product innovation [10][66] - Plans include expanding Saucony's lifestyle offerings and enhancing marketing efforts, particularly in key city activations [66] - The company aims to modernize its product line management tools and enhance e-commerce capabilities to improve consumer experiences [68] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's direction and brand-building strategies, highlighting the potential for significant growth [65] - The outlook for 2025 includes expected revenue growth of 2.5% to 4.3%, with a focus on new product launches and lifestyle expansion [51] - Management acknowledged the need for continued investment in brands and technology to drive long-term sustainable growth [63] Other Important Information - The company successfully reduced net debt to $496 million, a 33% reduction compared to 2023 [48] - Inventory at the end of the fourth quarter was $241 million, down approximately 36% from last year, indicating improved planning and execution [47] Q&A Session Summary Question: Saucony's growth and new doors - Management confirmed plans for 900 new doors for Saucony, with many being online, and emphasized the importance of driving sell-through [73][76] Question: Merrell's new doors and reception - Management noted that Merrell is also opening new doors, particularly in the female consumer segment, and is encouraged by early returns [74][78] Question: Gross margin sustainability - Management expressed satisfaction with gross margin improvements and indicated ongoing opportunities for further expansion [81][84] Question: Long-term operating margin aspirations - Management stated that while it's too early to provide a specific timeline for mid-teen operating margins, they are encouraged by recent progress [90][93] Question: Inventory management - Management characterized current inventory levels as healthy and close to target, with plans for modest investment in inventory for 2025 [145]