Twin Hospitality Group (TWNP) Q2 2025 Earnings Call July 30, 2025 05:15 PM ET Speaker0Greetings. Welcome to Twin Hospitality Group Inc. Second Quarter twenty twenty five Conference Call hosted by Chief Executive Officer Kim Vilrayma and Chief Financial Officer Ken Kulik. Also joining today's call is Satbrand Inc. Chairman of the Board, Andy Wiederhorn.At this time, all participants have been placed in a listen only mode. Please note that this conference call is being recorded today, 07/30/2025. After the ma ...

Financial Data and Key Metrics Changes - Total revenues in Q1 were $1,050 million, down 1.8% from 2024, primarily due to restaurant closures and a decrease in comparable restaurant sales [21] - U.S. comparable restaurant sales were negative 50 basis points, with traffic down 390 basis points [22] - Q1 GAAP diluted earnings per share was $0.50, compared to negative $1 in 2024, while adjusted diluted earnings per share was $0.59, down from $0.64 in 2024 [23][24] - Q1 adjusted operating margins were 6.1%, down from 7.8% last year, driven by a decline in restaurant level margin and inflationary pressures [24] 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 [6] - Off-premises sales accounted for 23% of total U.S. sales, with third-party delivery making up 11% [22] Market Data and Key Metrics Changes - The company experienced a disappointing February, including Valentine's Day week, and noted a softer Easter holiday than anticipated [7] - The macro environment remains choppy, impacting consumer behavior and spending [8] Company Strategy and Development Direction - The company is focused on three operating priorities: simplifying the agenda, delivering a great guest experience, and turning around Outback Steakhouse [8][15] - Menu simplification is underway, with reductions in menu items across various brands to enhance execution and guest satisfaction [10][11] - A third-party consulting firm has been hired to assist with strategy and cost-saving initiatives [18] Management's Comments on Operating Environment and Future Outlook - Management expressed dissatisfaction with financial and market share results, acknowledging the need for improvement [7] - The outlook for the year assumes continued challenges in the macro environment, with cautious consumer behavior impacting sales [29] - The company anticipates being at the low end of its full-year adjusted diluted earnings per share range due to various factors, including the loss of a tax benefit from Brazil [27][28] Other Important Information - The Board declared a quarterly dividend of $0.15 per share, payable on June 4, 2025 [27] - The company aims to reduce debt leverage to below 3.0 times lease-adjusted net leverage [20] 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 [35][36] Question: Softer holiday special occasion trends - Management noted decent results but below expectations, particularly among households earning under $100,000 [42] Question: Price and mix component of same store sales - Mix was relatively flat in Q1, with expectations for a slight decline in Q2 due to value offers [49] Question: Employee feedback on execution and complexity - Employees desire a simpler execution process and have provided valuable insights on food quality and consistency [61] Question: Test stores performance and rollout timing - Encouraging results from test stores were reported, with a focus on learning and deliberate implementation of successful strategies [86][88] Question: Current value construct effectiveness - Management indicated the need to address the value proposition, especially at Outback, and emphasized the iterative nature of their approach [91][92]