Hello, and welcome to the BJ's Restaurants third quarter 2023 earnings release and conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on your telephone keypad. To withdraw from the question queue, please press star, then two. Please note, this event is being recorded. I would now like to turn the conference over to Rana Schirmer, Director of SEC Reporting. Please go ahead. Thank you, operator. Good afternoon, everyone, and welcome to our fiscal 2023 third quarter investor conference call and webcast. After the market closed today, we released our financial results for our fiscal 2023 third quarter. You can view the full text of our earnings release on our website at www.bjsrestaurants.com. I will begin by reminding you that our comments on the conference call today will contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that forward-looking statements are not guarantees of future performance and that undue reliance should not be placed on such statements. These statements are based on management's current business and market expectations, and our actual results could differ materially from those projections in the forward-looking statements. 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 Greg Levin, our Chief Executive Officer and President, and Tom Houdek, our Chief Financial Officer, after which we will take your questions. With that, I will turn the call over to Greg Levin. Greg? Thank you, Rana. BJ's delivered another quarter of positive comparable restaurant sales and year-over-year margin expansion. Our total revenues increased a little over 2%, led by a 1.5% increase in our average weekly sales, driven by continued positive comparable restaurant sales and the strong performance of our new restaurants. For the 10th consecutive quarter, our sales results beat the industry as measured by Black Box. We expanded our restaurant margins to 11.9%, representing an increase of 160 basis points from the prior year and generated adjusted EBITDA of approximately $20 million in the quarter, marking a 29% increase over the prior year. In fact, in the first three quarters of fiscal 2023, we have generated over $76 million of adjusted EBITDA, which is roughly equivalent to all of last year, with, of course, one quarter to go. Compared to 2022, industry-wide sales trends normalized in the 2023 third quarter. Historically, weekly sales volumes peak in May and June and then come down in July before taking further steps down in August and September. Last year, with consumers freed of COVID restrictions, weekly sales average actually increased in August compared to July, with a smaller step down in September. This year, third quarter sales trends reverted to pre-COVID patterns, resulting in a return to an August and September sales slowdown. Tom will provide more details on the quarter, but since regular seasonality returned in the fourth quarter of last year, we have seen our comparable restaurant sales rebound to positive low single digits starting in October. As we mentioned previously, our sales and margin growth strategies are rooted in our in-depth consumer research and focus on building the BJ's brand over the long term, quarter by quarter and year by year. We know that our guests escape to BJ's for a dining experience featuring familiar food items made Brewhouse Fabulous, with gold standard service and gracious hospitality delivered by our restaurant teams, and packaged in an ambiance that is of higher quality, differentiated, and full of energy compared to mass-market casual dining concepts. Therefore, in the third quarter, to enhance our already high service and hospitality standards, we rolled out new server scripts as well as an updated mystery shopper program focused on consistently delivering gracious hospitality to our guests. As a result of these recent programs, we have increased hospitality scores year-over-year on our guest surveys. Additionally, our hourly and management staffing levels continue to improve year-over-year as we narrow the gap to pre-COVID levels. In fact, our hourly team member retention rate in September matched our pre-COVID level, illustrating our improving operating environment, which has enabled us to execute at even higher levels of service and efficiency. We also rolled out a new menu that has 15% fewer items and is focused on familiar items made Brewhouse Fabulous based on our guest research and careful testing in our restaurants. Having fewer items, but the right items for our guests, resulted in improved pace scores year-over-year. Our innovation team continues to create new menu items and drinks that provide the familiar, yet made Brewhouse Fabulous. In the third quarter, we rolled out our Big Twist Pretzel, paired with BJ's Brewhouse Blonde Beer Cheese, and the Hickory Brisket Nachos for a limited time, accompanied with a line of Wow! Margaritas, including our new White Peach Boba-Rita. Importantly, our culinary and beverage innovation is working to grow sales, adding both incidence and dollar sales to the appetizer and cocktail categories. In fact, the new innovative cocktails are now our top sellers in that category. We also just rolled out our limited time only Spooky Pizookie, with orange-colored vanilla ice cream and chocolate syrup that guests pour over their dessert, which hardens to make a delicious chocolate shell over our world-famous Pizookie dessert. Our Spooky Pizookie has exceeded our expectations, becoming our number one selling Pizookie this October and selling out sooner than anticipated. Given the extraordinary guest excitement and demand for this product, expect to see Spooky Pizookie back next year. We are now looking forward to this holiday season as we plan to feature our new limited time only Brewhouse Blonde Garlic Shrimp appetizer, a special Filet Surf and Turf entree, and our new Tipsy Snowman and Winter Paradise Pomegranate Margarita seasonal cocktails. All these items fit squarely in our menu strategy of familiar items, again, made Brewhouse Fabulous. Furthermore, we know that guests come to BJ's for a better dining experience, rooted in what we call Brewhouse Theater. Each of these new items provides the guests with more theater and quality than what you find at other mass casual restaurant chains. For example, our Tipsy Snowman cocktail includes a holiday marshmallow shaped like a snowman in a Belgian beer glass, and the Spooky Pizookie allows our guests to pour over the chocolate sauce and watch in anticipation as it hardens. All of these items allow guests to trade up and indulge at BJ's while creating a fun, polished, casual experience. Most importantly, for us to do this, we needed to optimize the menu and simplify execution in certain areas so that we can provide our guests an even better culinary experience. All this has been made possible by our menu optimization process that we began last year, and the continuing passion and dedication from our team members. Through our research, we know that a key differentiator in full-service restaurants is ambiance. Guests don't want to visit old, worn-out restaurants with wobbly tables, dirty floors, and broken chairs. Guests want a contemporary, relevant atmosphere that complements team members' gracious hospitality and BJ's delicious food. Our remodel program focuses on that relevant ambiance by providing enhanced seating capacity, an updated bar statement, new lighting, artwork, booths, and tables. As we mentioned before, the new bar statement is amazing and includes a much lighter, more contemporary bar feature, featuring a new 130-inch television that screams Brewhouse Theater. We are still targeting between 35 and 40 remodels this year, and we expect to have remodeled at least 20% of our restaurants by year-end. While the best way for us to continue our margin growth is by driving top-line sales, since every additional dollar sales leverages the fixed elements of our cost structure, we also laid out a plan last year to identify at least $25 million of four wall cost savings opportunities that will benefit our restaurant operating margins while maintaining our high-quality standards. We have now unlocked over $30 million of cost savings on an annualized basis as we reduce food, labor, and operating and occupancy costs. Additionally, the team has identified further savings opportunities, which we expect to roll out late in the fourth quarter, which will continue to improve our margins and our EBITDA year-over-year. We also continue to open new restaurants in a balanced manner. In 2023, we opened 5 new restaurants, including the relocation of our Chandler, Arizona, restaurant. Our 2022 and 2023 classes of restaurants are doing exceptionally well, with weekly sales average of more than $130,000 or approximately 10% higher than our system average, and overall margins in the mid- to upper-teens. As we discussed last quarter, we submitted new plans for the majority of our 2024 openings so that we can roll out our new prototype that will save us approximately $1 million per build versus our current prototype. Additionally, due to a more efficient layout, this prototype should provide an opportunity for labor optimization. Overall, we believe this new prototype will provide even better returns on invested capital by delivering better margins and built at a lower cost. Therefore, I expect 2024 new restaurant openings to be similar in number to this year, before we plan for an increase in the rate of new restaurant openings in 2025. As we've said many times, our goal is to reaccelerate our new restaurant expansion and grow restaurant weeks by 5% or more annually. However, we are going to do so with the right quality and at the right investment cost to continue to drive strong new restaurant investment returns. With 5%+ new restaurant growth, consistent comp sales in the low- to mid-single-digit range, and expanding restaurant margins, we should achieve very strong EBITDA and earnings growth for our shareholders. With the continued positive reaction from our guests to all that we are doing, coupled with our increasing margins and EBITDA, we reinstated our share repurchase program this past quarter. We are increasingly confident in our strategy to grow sales, expand margins, open new restaurants, and return capital to our shareholders in both the near and midterm. Finally, I am looking forward to seeing many of you at our Analyst and Investor Day on Tuesday, November 14, and the welcome dinner the night before. We'll host a special beer dinner featuring some of our most iconic beers, as well as some of our new menu items and cocktails. At the November 14 event in Boston, we will share greater detail around our near-term opportunities and our longer-term strategy. I hope you can all join us for that event. Now, let me turn it over to Tom to provide a more detailed update from the quarter and current trends. Tom? Thanks, Greg, and good afternoon, everyone. I will provide details of the quarter and some forward-looking views. Please remember, this commentary is subject to the risks and uncertainties associated with forward-looking statements as discussed in our filings with the SEC. In the third quarter, total sales grew 2.3% to $319 million. On a comparable restaurant basis, sales increased by 0.4% over the prior year. From a weekly sales perspective, we averaged more than $113,000 per restaurant. In a typical pre-pandemic year, the third quarter is our lowest sales quarter seasonally, with the sales deceleration starting after Father's Day in June and continuing to step down into August and September, as Greg mentioned. This year, our sales followed this normal seasonal pattern, consistent with industry trends in our markets. However, in 2022, the seasonal decline was much less pronounced as consumers enjoyed their first summer without any COVID restraints. As such, last year's weekly sales averages actually increased into August before coming down slightly in September. This year's return to a more normal seasonal pattern resulted in comparable restaurant sales softening later in the third quarter, from the mid-4% positive in July to about flat in August to negative low single digits in September. Moving to more recent trends, comparable restaurant sales in the first three weeks of October are trending in the positive low single digits, an improvement of more than 500 basis points for September levels, as last year's seasonality normalized in the fourth quarter. Our comp sales improvement in October is being driven by improving traffic trends compared to both August and September, and to a lesser extent, our late September pricing round in the upper 1%. Looking at the sales trends from a different perspective, our comparable restaurant sales compared to 2019 were much more consistent throughout Q3 and into early Q4, providing us further confidence that 2022 seasonality was the main driver of the one-year comparable sales volatility in the third quarter. To date, we continue to see acceptance of our menu pricing rounds with no value-oriented shifts in our menu mix or less items ordered per check, which would indicate check management or changes in traffic patterns. Regarding day parts, our late-night sales continue to outperform and grow faster than other day parts. As our late-night check is lower than other day parts, this channel mix shift is adding a modest headwind to average check. Our restaurant-level cash flow margin was 11.9% in the third quarter, an improvement of 160 basis points compared to the prior year. Comparable sales growth, in conjunction with improving operating efficiencies and further progress on our cost savings initiatives, contributed to our margin improvement. Further illustrating our progress, our third quarter restaurant-level cash flow margin was within 160 basis points of the same quarter in 2019, marking a 90 basis point improvement from the 250 basis point differential in the second quarter. Also, Q3 was the first quarter in the post-COVID era where our restaurant-level cash flow dollars were higher than the corresponding quarter in 2019. We are encouraged by the progress made to date and continue to advance initiatives to further grow our restaurant margins. Adjusted EBITDA was $19.6 million and 6.1% of sales in the third quarter, which beat the prior year by $4.4 million, with a margin that was 120 basis points higher. We reported a net loss of $3.8 million and diluted net loss per share of $0.16 on a GAAP basis for the quarter, both of which would have been an improvement from last year when excluding the $4.1 million tax benefit from the year-ago period. Moving to expenses, our cost of sales was 25.9% in the quarter, which was 140 basis points favorable compared to a year ago and consistent with the prior quarter. Food costs were about flat quarter-over-quarter and year-over-year, which was moderately favorable to our expectations. The inflation figure would have been higher if not for the accumulating benefits from the changes we've implemented to date across our food basket as part of the cost savings initiatives. Labor and benefits expenses were 3.7% of sales in the quarter, which was 60 basis points favorable compared to the third quarter of last year. We made further strides improving our labor efficiency, which was driven in part by a reduced menu that requires less kitchen prep hours. A number of the labor efficiency metrics we track, including items per labor hour, were better this quarter than pre-pandemic levels, illustrating the high level our restaurant teams are operating at, as well as the effectiveness of our cost savings initiatives to date with respect to refining and optimizing our labor model. Occupancy and operating expenses were 25.1% of sales in the quarter, which was 40 basis points unfavorable compared to the third quarter of last year. Approximately half of the increase was due to an investment in promotional and awareness-building activity to drive off-premise sales, including catering, which have a high level of incrementality and return on investment. Our catering business continues to grow and delivered approximately 50% higher sales than the same quarter last year. G&A was $19.5 million in the third quarter. Included in G&A was a $100,000 deferred compensation benefit linked to fund performance in our deferred compensation plan, compared to a $600,000 expense in Q2. As a reminder, this is a non-cash item that has an offsetting entry in the other income and expense line in our P&L. For the full year, we now expect G&A to be in the $80 million-$81 million range, which is on the lower end of our prior guidance. Turning to the balance sheet, we ended the quarter with a debt balance of $60 million, which was $7 million higher than the end of Q2 and equal to where we started the year. We ended the quarter with net debt of about $48 million. Also, during the quarter, we reactivated our share repurchase program to resume returning capital to shareholders. The resumption of our share repurchases reflects management's belief that BJ's shares are currently undervalued and our confidence in BJ's longer-term prospects. During the third quarter, we repurchased and retired approximately 164,000 shares of common stock at a cost of $4.3 million. At the end of Q3, we had 17.8 million remaining on our authorized share repurchase program. Looking ahead to the fourth quarter, we are encouraged by recent sales and traffic trends as comparable restaurant sales have returned to positive low single digits. Shifts in prior year seasonality have passed, and we expect to continue delivering comparable sales in the low single digits for the quarter. Factoring in our sales expectations and recent cost trends, we expect restaurant-level cash flow margins to be in the low 14% area in Q4, significantly above last year's Q4 margins. As a reminder, Q4 2022 margins had the benefit from a 53rd week and a one-time gift card breakage benefit, which benefited last year's Q4 margins by approximately 130 basis points in aggregate. Regarding CapEx, our 5 2023 new restaurants are now opened, and most of our 2023 restaurant remodels are completed. Included in our Q3 openings was the relocation of our Chandler, Arizona, restaurant, which is off to a fantastic start, with sales approximately 50% higher than our previous location. Also in the quarter, we closed an underperforming restaurant, which required a non-cash write-off in the loss on disposal and impairment of asset line in the P&L. Also related to CapEx, we invested an incremental $2 million to purchase upgraded server handheld tablets for approximately half of our system, which enabled additional functionality such as payment at the table and will lead to a meaningful operating cost savings with purchasing the tablets instead of the leasing arrangement with our prior generation devices. Due to this incremental investment, as well as increasing the number of our restaurant remodels last quarter, we are now targeting the high end of our prior $90-$95 million CapEx range for this year. Looking ahead to 2024, as usual, for this time of year, we are in the middle of our planning process, but I can share some early thoughts. We expect food cost inflation to remain in the low single digits. We will lock in most of our contracted items for 2024 over the next couple of months, and we'll have a better idea of any variances when we report Q4 results in February. Labor inflation could tick up to the mid to upper single digits, given the added impact of California's AB 1228 bill, which is the bill that replaced the FAST Act. To note, many of our California-based hourly team members earn near or above the new $20 an hour minimum wage to be paid at fast food type restaurants in the state starting in April 2024. We do expect some impact. We expect higher menu prices in restaurants throughout the state as operators look to mitigate the added costs. We are still finalizing our menu pricing plan for next year, but expect to be able to offset inflationary pressures. We plan to open 4-6 restaurants next year, similar to this year, and continue our remodel initiative, given the attractive financial return profile. We also intend to continue repurchasing shares. In conclusion, we know the best way to grow margins and profit is to grow sales. Recent sales trends have been encouraging, with demand for BJ's higher quality, experiential dining remaining strong, and we expect to continue making progress with our sales-building initiatives. At the same time, we remain committed to productivity and cost savings through our margin improvement initiatives, with momentum continuing to build. We have a clear path to sales and margins growth ahead, and our long-term strategy and strong consumer appeal for the BJ's concept position us well to continue building on our successes and enhancing shareholder value. Thank you for your time today. We'll now open up the call to your questions. Operator? Thank you. To ask a question, you may press star, then one on your telephone keypad. If you're using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star, then two. At this time, we will pause momentarily to assemble our roster. Today's first question comes from Brian Bittner with Oppenheimer & Company. Please go ahead. Hey, guys, it's Michael Tamas in for Brian. Hope you're well. You know, I think you've talked historically about the fourth quarter margin being a pretty good read on what the next year's full year margin might look like. I'm wondering, does that still hold, you know, with the guidance for, like, the low 14% range this year? What do you think the big variances might be, if any, against that? Thanks. Mike, thanks for the question. That's right. If you look back to 2019, our Q4 margins were very consistent or the same as the full year margins. I would say for this quarter, we do still have cost savings initiatives rolling out through Q4, so the average to the quarter at the low 14s. I think you—the exit rate should be something higher than that. We're still in the process of, there's a couple things on the supply chain side that are meaningful. There's some changes that we're making for efficiencies on our operating an occupancy line, which we're starting to implement mid-quarter. So there's still some bigger savings that we should be seeing through the quarter. So, it's a little different than a typical year, but you're right, this is Q4 is about an average sales quarter for us, where it comes out, and we see the margins about where we think they should be for the year. But with that added piece, the exit rate should be stronger than given some of the margin improvement initiatives that we're continuing to execute on. Gotcha, thanks. And then, you know, I know you haven't decided anything yet for 2024 on pricing, but if you didn't take anything, and I know, obviously, California is gonna, you know, force your hand on that, but if you didn't take anything, can you just give us a sense for where 2024 pricing would be, just with what you're carrying for this year? And then if, if you could, can you just give the breakdown of, you know, pricing traffic mix for the third quarter? Thanks. Sure. So, you know, I think for a base case, there will be some pricing next year. So as we think about it, we will get some extra carryover because we did take a pricing round in January that was on the heavier side and another one in April. So, again, we're still finalizing the plan, but let's say it is something closer to a 3% round taken in year. We'll have extra pricing flowing through in the year because of the carryover from 2023. And I'm sorry, remind me the second part of the question? I was just hoping you can give the breakdown from the third quarter, please. Thank you. Oh, sure. So, we mentioned this in the prepared remarks, but through the third quarter, no extra pricing taken. So pricing in the quarter was closer to in the high 6s or 7% area. And then we had another pricing round come in in late September, so that put us in that 7%-8% range. Yeah. So in the quarter, 2% dropped off from last year. We replaced it with kind of upper ones, so it brought it down a little bit. And kind of our, our exit rate going into next year would probably be somewhere in the 6%-7% range, with, frankly, with about 2% falling off in January of 2024. So we'll probably end up replacing that 2% with something around there or a little bit less, which means we'll probably start the year somewhere in the 5%-6% range. 3.7%. Thank you. Actually, 37 falls off. We'll replace 37 with something less than that. Yeah, that gets us down to the 5%-6% range. Thanks. You're welcome. The next question comes from Alex Slagle with Jefferies. Please go ahead. Great, thanks. Just following up on the question on pricing. How did the check component look relative to the pricing, just in terms of thinking about the mix piece of check? Well, I'll give you a high level, and Tom can add some details there. But in general, Alex, what we've seen in our business is no change in regards to how consumers are ordering and what they're ordering from a check standpoint. But as Tom mentioned on the prepared remarks, we've seen an increase in late-night business. So the late-night business has a lower overall average check. So when we start to think about our business, we're seeing about 200 basis points kind of drag, negative drag from a mix standpoint, which is just not because consumers are shifting to lower items. It's just the fact that the late-night business is accelerating as part of our comp. Now, Tom, you can... Yeah, late night is certainly playing a role, and even some of our off-premise traffic is, you know, either growing or some of the takeout check is declining as well. So there's a couple things that are just out. Like, if we look at purely our on-premise check, that's where we'll look to see if there's any traffic movements in terms of shifts toward more value-oriented items, and no change there. But we are seeing some areas of off-premise where check is going down a little, and then the late-night piece as well, which is great that we're seeing that traffic pick up. It's just shifting some more checks that are a little bit lower of a check-in. All in, as Greg said, in the kind of that 1%-2% band is kind of the delta from the pricing to where our check growth is. Got it. And as you step back and look across your system of restaurants and see what the top tier of restaurants are doing, those that are driving the strongest traffic growth, I mean, is it largely the remodels that drive that, or there are other sort of differences, like service levels or retention or something else that you'd point to that drives the strongest outperformance? Yeah, it's an interesting question, Alex, and there's no doubt about it, that service levels and restaurants that are well staffed with tenured team members tend to have higher comp sales. And we saw that coming out of COVID, and I know it's sometimes weird still to talk back to COVID, but we saw that, and those restaurants have continued. I think the other side of it is when we look across our system, California, and I know, you know, you're up there in the Bay Area, but California is probably the last state to kind of feel free of COVID, so to speak. So there's still, as we think about the third quarter, there was kind of that pent-up demand last year in the third quarter, and that's where we saw maybe a little bit of the biggest shakeout in the third quarter when sales softened, even though it softened across all geographies. And then as we've gotten into October, all those geographies have come back, including California, is probably coming back a little bit stronger. So a tad on geography, but at the end of the day, it's really service levels, I think, that have played a bigger portion in our business. ... That's helpful. Thank you. You're welcome. The next question comes from Josh Long with Stephens Inc. Please go ahead. Thanks for taking the question. This is Tyler Brough on for Josh Long. I would love to hear more about just the general pricing philosophy at BJ's, and where do you stand on third-party pricing? Like, I think in the past, we've talked about pricing tiers, so any update on that would be great. And then, just a second one: if the industry were to shift to more of a value sentiment, how would you approach that situation? Yeah, I'll give you some more philosophical. I think Tom might be able to add some mechanics in there as well. Look, our pricing strategy is always to be around a good, better, best pricing strategy. The good is our value items are items that we call KVI, known value items, meaning we want to make sure our burger, our chicken Alfredo, and other items that you might see across different casual dining concepts is very competitive. Then we want to have the ability for guests that want to indulge and know that they're coming to a higher quality casual dining concept that might want the double bone-in pork chop. They might want the filet or the rib eye. Those all allow guests to kind of price up a little bit, including things that are on our Slow Roast menu. The same thing actually goes for the bar and, and the beer side of it. We've been really working on what I would consider a best-in-class bar statement, and it's allowed us to have some higher-end, bar drinks or cocktails that guests want to spend up, they can, but they're getting a higher quality for it. They're getting uniqueness and differentiating what we call the Brewhouse Theater. At the same time, as part of our menu strategy as well, or our pricing strategy, we have our Daily Brewhouse Specials. So those allow for guests to come in on specific days and get something at a really good value from a price point, whether it's our Slow Roast Thursdays, or around $19, you can get a rack of ribs, two sides, starter salad, and a full Pizookie dessert. That drives, obviously, a lot, a lot of guests into our restaurants because it's something that we can do, and it's differentiated from a quality standpoint. So we're going to continue to balance across that. We also have our lunch specials, as well. So depending on how the economy is or how we want to target guests in certain markets, sometimes we'll target them with a value statement around our lunch specials or our Daily Brewhouse Specials. Other times, we'll target them around some of the indulgent items or some of the limited time only items that kind of drive a fear of missing out. Our Spooky Pizookie perfectly played into that. That drove a FOMO from our guest standpoint. We need to come in the restaurant and get this Pizookie before it disappears. So it's a combination of different areas that we want to target based on those individual restaurants, as well as the macro environment. And then, I don't know, Tom, if you want to add anything specific towards our pricing. Sure. In terms of the third-party pricing, we did implement an extra 10% or approximately across our third-party platform, so that's in place. And in terms of tiers, we are going through a re-tiering process right now, and some of that due to California needing to be separated out for some other restaurants because of the new minimum wage, as well as there were some changes on the rules around pork products here as well, which increased some cost. We're also just looking at to see which restaurants should be paired together in terms of sensitivities that we can measure. So that process is ongoing and you know, should be something that we roll out next year. And I think I'll just echo, too, what Greg said about the promotions. We've never backed down from our promotions, so if there's other promotions ramping up, we still have some great Daily Brewhouse Specials promotions out there, great happy hour promotions, great lunch value as well. It's... You know, we, we, when we market, it is about brand building, but it's also there's a mix in there, too, about getting the awareness out to drive traffic in for these promotions. We're even looking at the promotions, if these are the right ones, if there's ones that can drive even more traffic. I think the, you know, I, I don't-- as, as we look at the, the landscape, there's certain, you know, brands out there that are, are using more promotions now or more value, and, I think we've got a good mix already and a really attractive one that'll drive people in, you know, any, any of these, forward-looking type of, type of environments. Great. I appreciate all the color there. Super helpful. And just one follow-up. So the G&A kind of coming into lower end, low end of the range for 2023 is, is current, is encouraging, and just going to think how you, how you're thinking about G&A, you know, going into full year 2024. Yeah. So right now we're in the middle of our budget season, but our goal always on G&A is to grow it at a rate less than top-line sales, so we can leverage it going forward. So we'll, as we continue to put together our plan and look what our revenues might be for next year, we'll make sure that we're looking at G&A and going, "It's got to be below that," so we can get leverage going forward. Still there? Yes, it's all good. Oh, okay. Thank you. The next question comes from Andrew Wolf with CL King. Please go ahead. Thank you. Good afternoon. I want to switch to your lower cost to build the new restaurants, and just kind of a basic question: is that necessary, I mean, to get to the ROI hurdles you have talked about before, which I think is 20%, or was the better than expected sales that the restaurants have been achieving already getting you there? I also wanted to just ask you a math question. I'm getting to about a 2%-3% higher return on investment just by bringing the cost down $1 million? Just wanted to run that by you as a reality check. It's a great question, actually, and we always continue to look at our prototypes over years to make sure we're basically building the right prototype for our business. I think as we continue to look at it and evolve our menu and other things, we tend to make adjustments that seem to make sense for us going forward. While the $1 million in reduction investment cost will help us drive our ROI, as you just said, you just kind of put it in there and look where our WSA is and drive the margins. Some of the changes in there will allow us to be more efficient around how we build our, around how we run our restaurants. By reducing some of the square footage, the way we set up our bar station allows us some efficiencies there, and then some of the changes in the kitchen with team members. So we always want to optimize it that way. The other side of it, as well, is we want to continue to understand how the consumer preferences are changing. Some of it comes down to off-premise and where we're building our restaurants. So if we're building our restaurants in certain markets, maybe in California, we might use a little bit of a larger format because we know the California brand awareness of the BJ's concept. Going into some of the different markets that might be a little bit smaller, having that smaller prototype is going to give us better efficiencies in those restaurants. So it's a combination of both of those things, but even as we look to build this current prototype for next year, Greg Lynds, who's actually at a real estate conference this week, and his team are actually looking at what that next evolution is going to look like, with a couple other changes that, again, continue to optimize not only the cost of it, but optimize the way we can execute within the four walls of the restaurant. Andrew, as you mentioned your math, that's right. The $1 million coming out of the build cost improves the return by in that 3% area. Great. Thank you for the color, Greg, and the feedback. And just I have a kind of analogous question, and this is my last question on the remodels. You know, I'm just trying to sort of back into the sales lift, and I would assume it's a little less than a one for one, dollar for dollar, because incremental profit margin's better. Just want to sort of check that with - or are you able to talk to directly what the sales lift is? Sure, Andrew. The way that we've been rolling out these remodels, there's a couple different scopes. So the lower scope, where we've been adding a few extra booths and doing some of the touch-ups around the restaurants, that's about $250,000. And those ones are seeing in the neighborhood of about $1,000 or $1,500 extra on a weekly sales basis, which, to your point, it's incremental traffic, and the flow-through on that is nice. So we're seeing that returns in the, you know, 20% or higher. The larger scope remodels that Greg mentioned, and these are the ones that we actually like even more because it really is brand building and traffic driving, and we can redo the bars and do painting on the outside and put on new murals and brighten up the dining rooms and reconfigure some of the booths. Some of these remodels can be $600,000-$700,000 or even a little higher, and we're still seeing the same type of return. So it is, as we think of the sales lift, we're seeing you know, a multiple of that type of sales lift in these restaurants. Okay, thank you very much. Helpful. Thank you, Andrew. The next question comes from Nick Setyan with Wedbush Securities. Please go ahead. Thank you. I appreciate the monthly cadence as the quarter progressed and obviously, you know, the October tick-up. Any way to kind of parse out, you know, this was sort of X% with seasonality and the rest was some kind of a consumer slowdown? I know it's a very difficult question, but- Mm-hmm. It would also help us give, you know, it would also help us have some confidence in terms of, you know, the go-forward trend as well. You know, if it was seasonality, then low single-digit comp for Q4, you know, makes sense. But if there was something else that you saw, you know, perhaps we should be a little bit more concerned. Yeah, Nick, obviously a great question, and what we all are trying to, you know, decipher different things as you just mentioned there. I think the biggest thing for us when we look at this number and look at what happened in the quarter and think about where we are today is... And look, I've been doing this a long time. I don't think I've ever seen an August weekly sales average above July. Whether it was my days back in, you know, California Pizza Kitchen as a public company to BJ, you generally see a movement from coming off of June into July, lower August, and then a lower September. And as we were going through it, it was just, I wouldn't say odd, it's just a trend we haven't seen where August sales are higher than July sales. And then as we did the same thing, kind of to your question there, we started looking at how October, November, and December played out and compared it to 2019. And last year, in 2022, October, November, and December played very traditional in regards to seasonality. So that's where we kind of looked at it. And then as soon as September was over and we went into October, our sales just bounced back by that, you know, more than 500 basis points that Tom talked about. And while we had some great promotion around Spooky Pizookie and some other things that we've done that are specific to BJ's, that type of turnaround really gave us much more of a view that this was kind of going—this was really the consumer moving back to normal seasonality. Additionally, where we saw it, just getting a little bit more granular per se, is we kind of saw it in that second, second-ish week, the third week of August, right when school started to come back into session. I know both you and I grew up here in California, and I remember starting school after Labor Day. That no longer happens anymore. And as kids went back to school in August, that's when we started to see that slowdown come through. The other side of it is California, which, you know, with 60+ restaurants in California, that's going to have a big delta on our business. And I would probably say, and you can see it in the Black Box data as well, California probably came down the most, and then it's come back the most. California was one of those states that also came out of COVID, the last, so to speak. I even remember, you know, myself personally in 2021, still facing COVID here in California, and regulations and so forth. So I think California had much more of a, for lack of a better term, revenge dining last year in 2022. As I said, as quickly as we saw it come in August, we've seen it reverse here in October. We always say this on our calls as well: Look, this is where our sales are right now. Just like when we reported in Q3, we were talking about where our sales were in July at that time frame. I don't know if Tom, if you want to add anything to that. Yeah, and I think Greg covered most of it. And just the one other aspect, and we mentioned this in the prepared remarks, was around the 2019 comp. And when we looked at our sales through, you know, the same cadence through each of the periods, each of the months, it was very consistent. And we hit September, where we had a pricing round rolling in from 2019. We saw the comp dip a little bit on the three-year basis, and then when we took our pricing round at the end of September, we saw it step back up. So it was following very closely to the patterns that we would have expected on a 2019 basis if the seasonality was the same as it was pre-COVID. So, you know, all of the evidence that we're looking at is pointing to the 2022 seasonality was the difference in the quarter. So nothing in terms of less attach rates, you know, trade down, anything else you're seeing that would kind of imply consumers are becoming a little bit more cautious? That's right. We pull it by week, looking at the incidence rates, things we want to be selling, the Pizookie and alcohol, any beverage, appetizers, the things that if there is some check management, you would see it on. Also seeing the more value-oriented sides of our menu, our happy hour, our lunch value, and Daily Brewhouse Specials. Looking by the week, and this is looking actually both to last year as well as 2019. 2019. It looks very consistent as we go through the weeks and through the periods. No shifts in those types of metrics that would signal some type of a check management or the consumer pulling back. Anything in terms of the holiday seasons and how that might impact or benefit Q4 this year versus last year to be aware of? We, compared to last year, Christmas will fall on a Monday versus a Sunday, so there's a modest benefit there, but that might be 20 basis points for all in for the quarter. You know, a little help, but very, you know, there's not like, you know, New Year's Day falling in or out of a year, which can swing Q4 a little more dramatically. We, you know, there's probably some promotions that we might be looking at differently around Veterans Day. I think all in, it, you know, it's going to be a very similar quarter, as the calendar lines up. Okay. Thank you very much. You're welcome. The next question comes from Todd Brooks with the Benchmark Company. Please go ahead. Hey, thanks for taking my question. I've got a few for you guys here. Tom, if I could start off with you. Very encouraging news on the further cost saves. I know you talked about 30, and that's not an end point. If we take this out to kind of a longer-term opportunity, as we're looking into what could be harvested, maybe going into 2025, what's the magnitude of this opportunity versus the $25 million that you guys thought was originally there to harvest? We're still vetting the, you know, new opportunities that, that are coming in. We're not saying yes to everything, but we are increasing the, the scope every time we're meeting as a team to find more and more opportunities. So as we said, it's $30 million now that, that have been accepted and, and are rolling in. There's still more that's, you know, either waiting to, to be rolled out or still in, in some form of, of vetting. So we don't have that, that number to, to share in terms of what it could be in, in 2025, but that $30 million we're at now is going to be higher. So we're going to continue to keep rolling them out, and, you know, we'll, we'll keep, keep everybody updated as, as we keep adding to it. But yeah, we're encouraged by even some of the new ideas that they keep coming in. It's great when you have a cross-functional team that are all focused on cost and growing margins and doing it the right way. And we're continuing to get some really good ideas coming out of this initiative that we'll continue executing against. Yeah, I think, Todd, this is Greg. Todd, this is Greg just to add to that. We're even looking at how we continue to cook items in the kitchen. We've got, you know, obviously our pizza ovens, we run some great things through that. It's one of the reasons we have such consistency. Can we move more items to that versus using in different other areas versus maybe a flat top or the grill? And just looking at other areas in that perspective that can continue to help us. So I think as we go down this process, not only as Tom talked about it, that we'll have more than the $30 million, but it's something that we've got to continue with. We've got to continue with that creativity, in our business to continue to figure out ways to make us more efficient, more productive, and at the same time, reduce costs. Okay, great. And then, Greg, one for you. With the new streamlined menu, I think going back to what you said in test, you hadn't seen much of a same-store sales impact from constricting some of the items, taking them off the menu. Once the menu launched, did that experience hold, or was there some sort of same-store sales headwind in actually moving across the full fleet to the new streamlined menu? It looked like it held. You know, we didn't do a holdout restaurant just to see how things played out because of how we did it in the test. As we went into July and forgetting some of the seasonality, but looking at all of our restaurants, it didn't look like there was any significant changes from one area to the other. What we tried to do seemed to work in regards to driving operational efficiencies, streamlining the fact that we didn't need 10 burgers or we didn't need 10 salads and so forth. As we moved down, we saw guests shift into what we've expected them to shift into. At the same time, as we put things on, like a filet, or we put the pretzel on, we saw guests move into that within those different categories. But overall, it seems like things have held as we expected. That's great. And then just two quick follow-up, well, additional questions. One, can you update us on where we are on returning the full fleet to late-night operations? And then secondly, you touched on this with the California exposure, and I know you guys won't use weather as an excuse, but I was wondering, is there a way to tease out the impact? I mean, you don't get a lot of tropical storm/hurricanes in the California market, and just wondering what impact that may have had on the business with it hitting in August. Thanks. I'll give you more my anecdote, because I forget, because it's been a while, and it obviously did hit us. Us in California that aren't used to a tropical storm, I think we literally went recluse for the entire weekend. It was a tough weekend. I forget what our comps were down. I think people were just not going to get out of their house, even though, honestly, like, we've seen bigger storms in the middle of the wintertime. We'd have to come back to you because it's just been so far, and it didn't seem like that in of itself made that much difference. Obviously, we had that, and then we had the Florida hurricane that came through, and both of those did impact the quarter. Late night, we are rolling out all of our restaurants. I don't know, Thomas, if everybody's there yet or if we're still rolling through on that. Yeah. In late night, thinking back where we were pre-COVID, the places we have not added the hours back are really on the Fridays and Saturdays, when we were open until 1:00 A.M. We're still thinking if that makes sense, and we're going to be able to drive the right type of sales and margin, make this, make sure that dollar margin accretive. That's the one area we have not done yet. For the most part, getting the, you know, outside of that Friday and Saturday, the Sundays through the Thursdays, most of our restaurants are now back to midnight. That's been a very great success, not just, you know, for the sales, but actually seeing dollar as well as percent margin from those extra sales. And that, you know, you do get it in that last hour, that 11:00 P.M. to midnight, but it also builds in that 9:00 P.M. to 10:00 P.M. and 10:00 P.M. to 11:00 P.M. hour. So we've seen some really nice return there. There's just a few restaurants that haven't added that back yet, but for the most part, that midweek, we're back to midnight. And still exploring and analyzing if it makes sense in at least some restaurants to go back to that 1:00 A.M. on Fridays and Saturdays, but that we have not determined yet. Okay, great. Thank you both. Thanks, Tom. You're welcome. The next question comes from Sharon Zackfia with William Blair. Please go ahead. Hi, good afternoon. I guess I wanted to go back to the California fast food wage hike that's happening next year. I know you're not directly impacted, but obviously, you know, wages going up impact everybody, and you alluded to that. I guess I'm wondering, is there any way that you could paint this as a favorable scenario for full service, where the order of magnitude price increase that you would have to take to cover, you know, labor inflation would be much less than your full-service limited-service peers? I mean, is there any market where you've seen a test case of this, where, you know, maybe the gap between full service and limited service narrows somewhat in terms of price points? Yeah, Sharon, it's a great question, and obviously, with our dining room team members or the front of the house, you've got tips coming in. Those tips put people significantly over the $20 an hour range there, and then most of our kitchen is already close to that, if not over that, in California. We've even said where we can be driving down the street and see a fast food or another restaurant with a sign outside saying, "Starting wages at $22," and really not necessarily impact our restaurant in that general area. I do think we've got an inherent benefit there. I also think to your point, that because of this, you're going to see fast food, which already is, and fast casual, raising their prices and getting their prices closer to casual dining. I still think that it's a different experience at times, in that regard, and we're trying to drive guests into our restaurant that want that more experiential dining and that, from that experience, I guess. We will always wanna obviously make sure we can continue to drive off-premise and be close to them with off-premise, if not with them, if not the same price, if not better on off-premise. But ultimately, what we're trying to do is have a differentiated food profile, trying to make sure we're driving guests that want Brewhouse Theater, want that, that, you know, that differentiation of a sit-down experience. It's still a, you know, $80 billion+ industry that we're going after. Now, that being said, I'm not sure there is a market that we can compare to where we are today. Even if I had to look at certain cities that already have minimum wages in the $18-$19 range, and look at our business and how we're comping versus, again, trying to look at it versus fast food, I don't know if I've got that comparison. All I know is that minimum wage, in general, hasn't been as impactful to driving top-line sales, I think, as sometimes people think. It tends to give more dollars in people's pockets, and they tend to want to go out and use it on discretionary items, and we get a benefit of that. Okay. And then, sorry if I missed this, I hopped on off another call. I know the menu rationalization seemed to go pretty well that you did in July. Are there thoughts to doing further rationalization, or are you pretty happy where you are at this point? We've got to stay disciplined on it, and I would actually, you know, like to take it down personally, that's a personal thing. But I've got to continue to watch where guests or we at BJ's have to continue to watch where guests go on our menu and what they're ordering and making sure we've got the right variety and differentiation. We do know from our consumer research that variety and breadth is important to our guests, and as a result, we want to continue with that breadth there. At the same time, Putnam Shin, our Chief Growth and Innovation Officer, Scott Rodriguez, our Senior Vice President of Culinary, continue to create unbelievably new, great items that we would love to get on our menu, and the only way we can do that is by being disciplined on items that need to come off. I don't know if there's another big, big chunk down like we just did, but we'll stay disciplined to take certain items off, going forward, so that we can have really unique, I think, LTOs to drive that kind of consumer traffic into our restaurant and that fear of missing out. Okay, thank you. You're very welcome. The last question today comes from Teddy Farley with Citi. Please go ahead. Thanks for taking the question. Just one from me. As you think about return of capital and continuing the share repurchase program, what is your thinking around restarting the quarterly dividend that you had pre-COVID, if you're thinking about that at all? Thanks. Yeah, Teddy, it's something we'd have to bring up with our board of directors. I think right now, where, you know, the stock's trading... and look, I, I'm not the one that determines the valuation of the company, but I think management's very confident in its strategy and its ability to increase its EBITDA. And feels that at least share repurchases right now are the right way to return capital back to shareholders. As we continue to put together our 2024 and 2025 and beyond, capital program, both CapEx and capital program, I think we're going to be in a position that continues to generate a significant amount of free cash flow at that 5%-7% new restaurant build and continue to expand margins. I think as we look at that, it's something to look and figure out what's the right approach here in regards to returning capital to our shareholders. Dividends do allow a certain amount of discipline within the capital structure, because you got to meet that each quarter, and I think that discipline is actually a good thing. At the same time, I think where we are today, being more opportunistic, buying back shares makes more sense. Awesome. Thank you. You're welcome. Thank you. The conference has now concluded. Thank you for attending today's presentation.