Red Robin Gourmet Burgers(US:RRGB)2023-03-01 00:05Financial Data and Key Metrics Changes - Total revenues in Q4 2022 were approximately $290 million, an increase of $6.7 million compared to Q4 2021, driven by a 2.5% increase in comparable restaurant revenue [53] - Adjusted EBITDA for fiscal 2022 was $52.8 million, down from $63.5 million in 2021, while adjusted EBITDA for Q4 2022 remained flat at $8.9 million compared to Q4 2021 [26][53] - General and administrative costs increased to $20.2 million, up $2.5 million year-over-year, while selling expenses decreased to $14.2 million, down $1.5 million [25] Business Line Data and Key Metrics Changes - Dine-in sales mix increased to approximately 73% in Q4 2022, reflecting a sequential increase throughout the fiscal year [54] - Comparable restaurant sales growth has been positive for the past four quarters, with a 2.1% increase compared to Q4 2019 [23] Market Data and Key Metrics Changes - Commodity inflation moderated to 13% in Q4 2022, down from peaks in Q2 2022, contributing to a 170 basis point increase in cost of goods sold compared to Q4 2021 [24] - The company anticipates commodity and labor inflation in the mid-to-high single digits for 2023, with menu price increases expected to match this inflation [29] Company Strategy and Development Direction - The company introduced a 5-point plan aimed at enhancing competitive positioning, driving sustainable growth, and building long-term shareholder value [4] - A focus on operations-driven management is emphasized, with frontline operators involved in key decisions and a new compensation model to be implemented [5][12] - The company is transitioning to a flat top cooking method to improve food quality and reduce maintenance costs, with full deployment expected by mid-2023 [44][45] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the company's ability to improve guest experience and operational efficiency, despite challenges from inflation and staffing [3][42] - The company aims to regain credibility with the investment community through conservative financial guidance and a commitment to delivering on financial commitments [51][58] Other Important Information - The company ended fiscal 2022 with approximately $48.8 million in cash and cash equivalents and $10 million in available borrowing capacity [27] - A partnership with the Make-A-Wish Foundation was announced, committing over $3 million over the next three years [50] Q&A Session Summary Question: What are the key drivers for same-store sales in 2023? - Management highlighted staffing and guest experience as critical drivers, with expectations for improvements from reducing false waits [33][34] Question: Can you provide more details on the restaurant level operating margin guidance of 13%? - Management indicated that investments in staffing and service model changes would be phased in, with a focus on achieving stability and self-funding future investments [74][78] Question: How will the company approach product innovation? - The company plans to expedite the product innovation cycle, utilizing consumer insights and beta testing to bring new items to market more quickly [80][103]