Financial Data and Key Metrics Changes - Total revenues in Q1 2025 were $1,050 million, down 1.8% from 2024, primarily due to restaurant closures and a decrease in comparable restaurant sales [22][24] - U.S. comparable restaurant sales were negative 50 basis points, with traffic down 390 basis points [22] - Q1 GAAP diluted earnings per share were $0.50 compared to negative $1 in 2024, while adjusted diluted earnings per share were $0.59 versus $0.64 in 2024 [24][25] - Adjusted operating margins were 6.1%, down from 7.8% last year, driven by a decline in restaurant level margin and inflationary pressures [25][26] Business Line Data and Key Metrics Changes - Positive comparable sales were noted at Carrabba's and Fleming's, but overall performance was below industry standards [8][10] - Off-premises sales accounted for 23% of total U.S. sales, with third-party delivery making up 11% [23] - Menu simplification efforts included reducing menu items by approximately 10% at Outback and Carrabba's, with further reductions planned [12][13] Market Data and Key Metrics Changes - The company experienced a disappointing February, including a weaker Valentine's Day week, and noted a consumer pullback during the Easter holiday [9][10] - Households earning under $100,000 were identified as the most pressured demographic affecting sales [43][79] Company Strategy and Development Direction - The company is focused on three operating priorities: simplifying the agenda, delivering a consistent guest experience, and turning around Outback [10][18] - A third-party consulting firm has been hired to assist with strategy and cost-saving initiatives [20] - The company aims to reduce debt leverage below 3.0 times lease-adjusted net leverage and reinvest in restaurants [21][20] Management's Comments on Operating Environment and Future Outlook - Management expressed dissatisfaction with financial and market share results, acknowledging the need for improvement [9][10] - The outlook for the remainder of the year assumes a continuation of a choppy macro environment and cautious consumer behavior [38][30] - Management is committed to transparency regarding results and business progress throughout the year [10][19] Other Important Information - The Board declared a quarterly dividend of $0.15 per share, payable on June 4, 2025 [28] - The company expects to be at the low end of its full-year adjusted diluted earnings per share range of $1.20 to $1.40 [28][29] Q&A Session Summary Question: Outlook for the remainder of the year and learnings from recent weeks - Management acknowledged underperformance compared to industry benchmarks and emphasized progress on operational priorities [37][38] Question: Value mix at Outback and profitability of value offers - Management noted that Outback is currently priced higher than competitors and is working on improving the value proposition [40] Question: Softer holiday special occasion trends - Management indicated that while some brands performed well, results were below expectations, particularly among households under $100,000 [43][44] Question: Same store sales and traffic performance - Management stated that share trends are cumulative and require improvements in food quality, value, and execution consistency [46] Question: Price and mix component of same store sales - Management reported that mix was relatively flat in Q1 but expects a slight decline in Q2 due to promotional impacts [50] Question: Employee feedback on execution and complexity - Employees expressed a desire for simpler execution processes and less complexity in operations [61] Question: Test stores performance and rollout timing - Management is encouraged by results from test stores and is focused on learning before a full rollout [88] Question: Current value construct effectiveness - Management confirmed that the current value proposition needs to be addressed, especially at Outback, and will continue to iterate based on customer feedback [93]

Financial Data and Key Metrics Changes - For Q3 2025, Brinker International reported total revenues of $1.425 billion with consolidated comp sales growth of 28.2% [21] - Adjusted diluted EPS for the quarter was $2.66, up from $1.24 in the previous year [22] - Restaurant operating margins improved to 18.9%, a 470 basis points increase year-over-year [24] Business Line Data and Key Metrics Changes - Chili's reported same restaurant sales growth of 31.6%, driven by a 20.9% increase in traffic, a 6.3% positive mix, and a 4.4% price increase [22] - Maggiano's reported comp sales growth of 0.4%, driven by a 7.3% price increase, a 1.3% positive mix, but offset by an 8.2% decline in traffic [23] Market Data and Key Metrics Changes - Chili's sales performance significantly outpaced the industry despite no new food or value news, indicating strong operational performance [7] - The company noted that guests are pulling back on restaurant visits, favoring brands that deliver superior experiences [20] Company Strategy and Development Direction - The company is focused on improving the fundamentals of food, service, and atmosphere to sustain growth [32] - Chili's is launching new menu items and marketing campaigns to enhance brand value and customer experience, including the Big QP burger [12][13] - Maggiano's is following a similar turnaround strategy as Chili's, focusing on menu simplification and eliminating unprofitable discounting [18] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in sustaining positive same-store sales growth despite upcoming tougher comparisons [29] - The company is committed to investing in labor and operational improvements to enhance guest experiences and drive traffic [74][76] - Management acknowledged the competitive environment but believes that their value proposition and guest experience will help maintain market share [110] Other Important Information - Capital expenditures for the quarter were approximately $80 million, driven by investments in kitchen equipment and maintenance [26] - The company repaid approximately $125 million in funded debt, reducing overall leverage [26] Q&A Session Summary Question: Concerns about sustainability of same-store sales growth - Management acknowledged the challenges of tougher comparisons but emphasized their focus on improving fundamentals to sustain growth [32] Question: Notable contributors to recent momentum - Management noted that traffic remains strong year-over-year, with no significant slowdown observed [40] Question: Clarification on Chili's maintained momentum in April - Management confirmed that trends in April were similar to Q3, with strong traffic and sales results [43] Question: Expectations for restaurant level margins moving into FY 2026 - Management expects to maintain or grow restaurant margins through strategic investments and improved productivity [49] Question: Estimated tariff impact on cost of sales - Management indicated that over 80% of their supply chain is sourced domestically, minimizing tariff impacts [56] Question: Upgrading the menu platform - Management is excited about upcoming upgrades to the rib and nacho offerings, aiming to enhance customer appeal [64][66] Question: Investments in labor and operator feedback - Management is focused on strategic investments in labor to improve guest experiences and manage increased traffic [74] Question: Breakdown of traffic increase sources - Management stated that traffic growth is coming from both new guests and increased frequency from existing customers [82] Question: Pricing expectations for Chili's - Management expects pricing to moderate to 2% to 3% in the fourth quarter, with a longer-term range of 3% to 5% [88] Question: Advertising spend expectations - Management anticipates advertising spend to increase to approximately 3% of sales in the fourth quarter [97]