Greetings, and welcome to Bloomin' Brands' Third Quarter 2022 Earnings Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow management's prepared remarks. It is now my pleasure to introduce your host, Mark Graff, Senior Vice President of Investor Relations. Thank you, Mr. Graff. You may begin. Thank you, and good morning, everyone. With me on today's call are David Deno, our Chief Executive Officer, and Christopher Meyer, Executive Vice President and Chief Financial Officer. By now, you should have access to our fiscal third quarter 2022 earnings release. It can also be found on our website at bloominbrands.com in the Investor section. Throughout this conference call, we will be presenting results on an adjusted basis. An explanation of our use of non-GAAP financial measures and reconciliations to the most directly comparable GAAP measures appear in our earnings release on our website, as previously described. Before we begin formal remarks, I'd like to remind everyone that part of our discussion today will include forward-looking statements, including a discussion of recent trends. These statements are subject to numerous risks and uncertainties that could cause actual results to differ materially from our forward-looking statements. Some of these risks are mentioned in our earnings release. Others are discussed in our SEC filings, which are available at SEC.gov. During today's call, we'll provide a brief recap of our financial performance for the fiscal third quarter 2022, an overview of company highlights, and an update to 2022 guidance. Once we've completed these remarks, we'll open up the call for questions. With that, I'd now like to turn the call over to David Deno. Well, thank you, Mark, and welcome to everyone listening today. As noted in this morning's earnings release, adjusted Q3 2022 diluted earnings per share was $0.35, which is more than triple our 2019 results. This compares to $0.57 in Q3 2021 as we lacked exceptional earnings from stimulus checks and pent-up consumer demand. This quarter was among the highest inflationary quarters of the year. We made the conscious decision to preserve our value equation and not raise prices to fully offset inflation. While the consumer has remained resilient to date, we believe the short-term decision will have long-term benefits for the business. The confidence in our strategy, both domestically and internationally, is reflected in our increased revenue guidance. This was driven in large part by the momentum we saw in our sales initiatives during the quarter and the marketing investments we are making the balance of the year. During the quarter, we saw comp trends improve sequentially every month. This was driven by stronger traffic across all U.S. concepts, particularly in-restaurant dining. Importantly, this represented over 300 basis points of outperformance in traffic versus the industry on a three-year basis. We continue to execute against the comprehensive plan we established to build a stronger, leaner, operation-centered company. This includes leveraging our leading off-premises business, growing digital capabilities, and improved operational efficiencies to deliver on our key commitments. These results would not have been possible without the talented and dedicated employees in our restaurants and the Restaurant Support Center. I'm especially proud of the team's proactive response to aid and assist those impacted by Hurricane Ian. This storm hit the west coast of Florida at the end of September, causing significant disruption to residents, our employees, and restaurants. Among their efforts, the team fed more than 11,000 first responders, volunteers, and families in Southwest Florida. This is a testament to the passion of our employees to take care of our people and communities during this time of need. As we look ahead to the balance of the year, the focus remains on achieving our full-year objectives despite a more challenging economic environment. The plans in place set us up well to achieve our objectives, strengthen the business, and provide momentum for 2023 and beyond. As we've said in past calls, the key elements of our plan include, first, grow in-restaurant sales by improving our service levels and food offerings. We have made investments over the past several years to elevate the customer experience, which is showing up in improved social and customer scores, especially at Outback. As part of this effort, we continue to look for ways to simplify the business to improve execution and consistency. We are rolling out several innovations, such as new cooking technology, including advanced grills and ovens to improve food quality and productivity. We are also installing kitchen display systems for meal pacing and handheld technology for our servers. We expect to complete the rollout of the handheld technology by the end of the year and the new cooking technology by the middle of next year. As technology rolls out, these innovations should reduce operational complexities in our restaurants and further improve customer service. We are also deploying more targeted marketing to build awareness and drive frequency. These initiatives are aimed at highlighting our great menu and the everyday value that we offer to guests. Importantly, this is accomplished without sacrificing product quality or the guest experience. In addition, these programs offer high returns and do not rely on deep discounting to drive traffic. Second, expand our leading off-premises business. We continue to capitalize on our strong carryout and delivery capabilities. Retention levels held steady with Q2 and are contributing to sales outperformance. Importantly, profit margins in this channel are comparable to margins of the in-restaurant business. Third-party delivery continues to grow even as people have returned to in-restaurant dining. We are also pursuing catering opportunities as people are returning to offices. Catering will also be an important lever for growth over the upcoming holiday season. We offer significant value through our bundles platforms. We expect off-premises to be a large and growing part of the business. Third, leverage operating margin gains by growing sales and reducing costs. This starts by growing healthy traffic across the in-restaurant and off-premises channels. We also reduce reliance on discounting and promotional LTOs and pivot advertising spend towards more targeted, higher return digital channels. In addition, we remain disciplined in managing middle of the P&L and are aggressively pursuing efficiencies in food, labor, and overhead. As Chris will discuss, despite the large increase in costs, we're able to achieve our margin objectives where we more than doubled our operating margins versus 2019. Lastly, become an even more digitally savvy company. In Q3, approximately 77% of total U.S. off-premises sales were through digital channels. In the past year, we implemented a new online ordering system and mobile app to support our digital business. Both have outperformed expectations, and the new app has over 2 million downloads. You can expect to see more activity as we improve the functionality and features of our app and digital offerings. These priorities will guide us for the remainder of 2022 and beyond. Because of momentum we have seen in so many areas, including a much stronger balance sheet, we are focused on growing our restaurant base in a meaningful way. We continue to make progress executing against our development plans and are building a strong pipeline of new units, and we expect to accelerate new unit growth in 2023. Our growth priorities are, first, ignite new unit growth at Outback. We are continuing to open a smaller and less expensive prototype that will enable more meaningful growth with healthy returns. This includes pursuing new trade areas in rapidly growing markets as well as fill-in opportunities in major metro areas. To date, we have opened five new smaller locations with strong sales and positive guest feedback. In addition, we are also upgrading and contemporizing our asset base. Investments in remodels are offering good returns, and recent relocations at Outback are providing outside sales lift with volumes exceeding $4.7 million, well above the system average. Second, open more Fleming's. The business is performing extremely well and is a proven category leader in fine dining. The average unit volumes are the best in the portfolio. We are building first-class facilities on great real estate, largely in strong hold markets of Florida, California, and Texas. We are opening the newest Fleming's in Fort Lauderdale in December. Third, Brazil continues to be a category leader and is seeing a strong recovery in both sales and profits. New restaurants are opening above expectations. We opened 15 new Outbacks this year and have a robust pipeline for growth. At the end of the quarter, there were 137 locations. We believe we can grow this brand to approximately 240 restaurants over time in this under-penetrated market. Finally, expand the Carrabba's business in key markets. Carrabba's has been among our top performers in the company over the last three years. They have built a terrific off-premises business that has opened up a number of possibilities for the brand. The most recent opening in Tampa is performing extremely well and provides optimism about the future growth potential of the brand. In summary, Q3 was another solid quarter. We are focused on achieving our 2022 goals while building a great business that will thrive in 2023 and beyond. With that, I'll turn the call over to Chris, who will provide more detail on Q3 and the balance of the year. Thanks, Dave, and good morning, everyone. I would like to start by providing a recap of our financial performance for the fiscal third quarter of 2022. Total revenues in Q3 were $1.06 billion, which was up 4.5% from 2021, driven by a $36 million increase in international revenue, primarily in Brazil, as well as a 1.4% increase in U.S. comparable restaurant sales. In our U.S. concepts, we saw year-over-year traffic trends improve steadily throughout the quarter. The slower start to Q3 was driven in large part by lapping the height of the 2021 stimulus benefits, particularly in July. As the quarter progressed, trends improved as we began to lap the impact of the Delta variant from last August. This improvement continued into September. Importantly, Q3 sales were up 11% relative to 2019 and maintained a relatively consistent double-digit comp throughout the quarter. Of note, in Q3, we achieved an approximate 300 basis points outperformance relative to the industry in traffic on a three-year basis. Our performance versus 2019 continues to be bolstered by our significant growth in off-premises dining. At 25% of U.S. sales, Q3 off-premises was in line with Q2. Additionally, the highly incremental third-party delivery business continues to grow and was 12.4% of U.S. revenues in Q3 versus 12% in Q2. In terms of concept performance, Outback total off-premises mix was 27% of sales and Carrabba's was 33% of sales. Off-premises remains sticky and is a large part of our ongoing success. It will be a key part of our growth strategy moving forward. Average check was up 8.6% in Q3 versus 2021. This consisted of 7.3% menu pricing and a 1.3% increase in menu mix. This level of pricing is 1.5% higher than the 5.8% that we had in the previous quarter. The increase in Q3 was driven by a 3% price increase taken in late August in the face of more persistent inflation. Looking ahead to Q4, in October, we have taken some additional pricing to replace a portion of the 2021 pricing actions that will fall off in late November. As a result, we would expect our Q4 2022 average check benefit to be in the 9%-10% range, primarily driven by pricing. A final note on Q3 sales. Brazil Q3 comps were up 30.1% versus 2021. Brazil's third quarter reflected the lapping of COVID-related operating restrictions from last year. Importantly, comp sales were up 25.2% versus 2019 levels. As it relates to other aspects of our Q3 financial performance, GAAP diluted earnings per share for the quarter was $0.34 versus $0.03 of diluted earnings per share in 2021. The large increase in GAAP earnings was primarily driven by the lapping of our 2021 purchase of the Carrabba's royalty stream from the brand's founders. Adjusted diluted earnings per share was $0.35 versus $0.57 of adjusted diluted earnings per share in 2021. It is worth noting that our Q3 result was significantly higher than our 2019 adjusted EPS of $0.10. Adjusted operating income margin was 4.9% in Q3 versus 8.2% in 2021. Although the level of commodity and labor inflation eased some sequentially from Q2 to Q3, we saw a much larger increase in restaurant operating expense inflation. Inflation ran about 13% driven by utilities. As has been the case throughout the year, in Q3, our 7.3% menu pricing was not enough to offset the inflationary pressures we faced. This did have a significant impact on operating margins in the quarter compared to last year. We are comfortable with the decision not to raise prices to fully offset inflation, however, given the importance of maintaining relative value to both restaurant competitors as well as food-at-home options. Even with these pressures, our Q3 margins of 4.9% were 260 basis points above 2019 levels. We continue to benefit from simplified menus and operations, growth in our international business, efficiencies in overhead, as well as increased average check. Q3 adjusted tax rate was 14.4%. Tax rate is trending a little lower than expected given some discrete benefits we have received, and we are lowering our full year adjusted tax guidance to be between 16% and 17%. This implies a step-up in tax rate in Q4 when income is seasonally higher than Q3. Full year weighted average share count is still expected to be approximately 93 million shares on an adjusted basis. Turning to our capital structure, total debt was approximately $825 million, and our liquidity position remains strong. We are pleased with the progress we have made to improve our balance sheet. In terms of share repurchases, we have repurchased $95 million of stock through October 27th and have $30 million remaining on our existing authorization. The board also declared a cash dividend of $0.14. We remain committed to a balanced capital allocation strategy. Turning to our 2022 guidance, we are increasing our 2022 guidance for total revenues to be between $4.436 billion and $4.466 billion. This is up from our prior guidance of $4.4 billion- $4.45 billion. This increase is driven by a couple of factors. First, we've had higher than expected revenues in the third quarter, both domestically and in Brazil, aided by incremental marketing spend. Second, our recent pricing actions were larger than our original plan, and we have not seen significant consumer resistance from these increases in terms of traffic or mix degradation. Our absolute level of pricing is in line with the broader peer group and remains well below grocery price increases. This full-year revenue guidance implies a Q4 revenue range of between $1.115 billion and $1.145 billion. We are reaffirming our full-year guidance for adjusted EPS. As a reminder, we expect adjusted EPS to be between $2.45 and $2.55. This implies a Q4 adjusted EPS range of between $0.63- $0.73. We expect the profit benefits from increased revenues to be offset by higher than expected operating expense inflation. This guidance also includes an estimated 3-cent impact from Hurricane Ian. Despite these headwinds, we expect our Q4 adjusted EPS to be significantly higher than 2019. For perspective, our adjusted EPS in Q4 of 2019 was $0.32. GAAP diluted EPS is now expected to be between $1.05-$1.15. This is down from prior guidance of $1.11-$1.22. We also expect Q4 GAAP EPS to be between $0.61-$0.71. Aside from the change in tax rate previously mentioned, all other aspects of our guidance remain unchanged. On our February call, we will provide more details regarding our full year expectations for 2023. At that time, we will have contracted a large portion of our commodity needs for the year and will have additional visibility into the macro landscape. This will further inform our 2023 thoughts on sales, capital allocation, and cost inputs such as labor and utilities. Also, as a reminder, 2023 will include a 53rd week, which will run from December 25th through December 31st. In summary, this was another successful quarter for Bloomin' Brands, and we are well on our way to becoming a better, stronger, operations-focused company. With that, we will open up the call for questions. Thank you. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Please ask one question and one follow-up question. One moment while we poll for questions. Our first question is from Jeffrey Bernstein with Barclays. Please proceed. Great. Thank you very much. First question was just on the broader consumer. Dave, you mentioned that it sounds like comps improved sequentially through the third quarter. Just wondering if you think there's any impact from a slowing macro in there when you parse through the data on a two- and three-year basis. Whether you're able to share anything on October, just because it does seem like the industry is holding up pretty well. I was wondering if you can give your thoughts on the impact from a slowing macro at all, and what initiatives would you implement if trends were to slow in coming months? Then I had one follow-up. Sure. Good morning, Jeff. Yeah, we see trends doing well. We have provided fourth quarter guidance. We've seen the sequential improvement in Q3. We provided guidance, which implies a comp to 3%-6%. October was right smack in that range. You know, it was good for us. We see that coming together in the quarter quite well, and that's why we raised our revenue guidance. If you look at the concepts, what we're offering, we've tried to make sure that we've taken price increases below inflation to maintain our value equation and offer very good different types of things for our customers and our various brands. We wanna make sure we maintain the value equation, and that's what we would be doing in case there was a macro slowdown. Now, I'm not here to predict a macro slowdown or recession, but I'm just saying if that were to come to pass, I think we're well positioned with some of our marketing offerings and what we understand with our business and our value offerings to address that. Finally, I think the company is in really good shape given the improvements we've made in margins and in cash flow and our balance sheet to go forward. Understood. The follow-up on the restaurant margins, specific to Q4, and I think more importantly as we look to 2023, I know you're not giving formal guidance, but it does seem like investors have been excited that sales are holding up, menu pricing is outsized, or at least to start the year, and there's hope that inflation's easing, which if those things were all to happen together, you'd see some significant potential margin recapture and earnings growth in 2023. I'm just wondering whether you would agree with that assessment, especially around the inflation easing. Maybe we're underestimating the potential headwinds that you look at to 2023. Just trying to get a sense for that scenario of a potential big margin expansion if those factors were to come true. Thank you. Sure. Hey, good morning, Jeff. Yeah, we'll start with Q4. I think as it relates to Q4, the one thing that we have going for us in Q4 that we haven't had for the balance of the year is, as Dave mentioned, we've been pretty diligent about underpricing inflation for the entire year. There is sort of an inflection given the timing of some of our price increases, where we will have more pricing relative to inflation than we've had in any quarter throughout the year. That gives us a little bit of optimism, at least in the fourth quarter, that we can do better in op margin on a year-over-year basis than maybe we have certainly in Q3. Now look, I think as you look forward to 2023, you know, the reality is if you look at this year and you look at where our margins are, we have a pretty strong operating margin and restaurant margin despite the record inflation that we've seen. You know, the midpoint of my guide this year is for that 7.5% or so range. Look, we didn't provide fulsome guidance on 2023 op margin at this point. I think it's still a little early. I think we have a long way to go to understand consumer demand environment and the inflation demand environment. Look, I would say this, I think we feel good about getting back to our, you know, operating margin commitment of 8% when the environment is normalized, right? I think the, y ou know, you look at the technology enhancements that we're putting in place at Outback, that should be a real tailwind to helping offset cost pressures, but again, in a normalized environment. I think that, you know, it's a little too early to say on margin. You know, we can talk a little bit about, you know, commodities and things like that, but for the most part, we're just not gonna get into 2023 at this point. Understood. As you mentioned, have you locked in? I mean, a lot of people are talking about beef easing, but then there's a supply herd concern in the back half of next year. Just trying to get a sense for what your approach has been on inflation, specifically around beef as we look to 2023, whether you wanna lock in now or whether you're not contracting because you expect prices to ease. Any color on that front? Yeah. You know, 2022 is pretty much in the books. We're 97% or so locked on our basket for this year. I think that it's too early to give definitive thoughts on 2023. Look, we are optimistic it's gonna be a less inflationary environment than it was in 2022. You know, certainly categories like dairy, seafood, chicken should be much improved next year. Look, you're right. I mean, when it comes to beef, there are indications that the beef market is still gonna be inflationary next year, mostly driven by the potential supply constraints that you've heard all about. You know, given that beef represents close to 40% of our basket, this could drive the entire commodity basket to be inflationary next year. We're also seeing pressure in categories like oil. You know, if I were to place a number on it, the best estimate I could give you at this point is probably, you know, mid- to high-single-digit inflation next year. The reality is that a lot is gonna change in the next few months. If demand is stronger or less than expected, it's gonna have a big impact on the outcome. Now, we begin our, you know, locking conversations in earnest on 2023 over the next several weeks, and we'll be able to give you a more fulsome guide in February. Yeah, look, we always go into each year intending to lock up a significant portion of our overall commodity needs, particularly in beef, because that level of supply assurance gives us a great deal of comfort as the year progresses. Thank you. Our next question is from Alex Slagle with Jefferies. Please proceed. Hey, thanks. Had a question on the international operating margins. It seems like we're finally seeing more of the operating margin expansion really materialize in this business, with the relative overhead impact seemingly narrowing. Just wondering how much of this is due to sustainable efficiencies and leverage in the business that you can continue as we get further into the future? We're really pleased with what we're seeing in international, especially Brazil, and I'll talk broadly about that first. I'll turn over to Chris for some more financial details. As we talked about for a long time, that business is uniquely positioned as the number one restaurant brand, not only in its category, but the number one restaurant brand in the country. We've got a terrific team down there that runs the business. Top line sales are extremely strong. New unit development is very, very strong. We're at 137 restaurants on our way to the mid-200s. You know, our off-premises business is a new layer for us that did not exist prior to the pandemic. They're doing a great job managing margins and what they're doing there. All that has come together to produce the performance that they have. I think before I turn over to Chris, I just wanna add that the growth that they're doing is funded internally. It's not like we're sending dollars down there to invest. They're just growing and growing and growing, and as a result they can fund their own internal growth, which is a very positive story. Yeah, look, I think it is sometimes an underappreciated aspect of our ability to maintain margin. If you look at, you know, the restaurant margin line in Q3, it was, you know, 18.5% in what is a, you know, seasonally somewhat slower time of the year. I think, you know, we said at the beginning of the year that Brazil's recovery would be a pretty significant part of our overall profitability picture this year, and it's playing out exactly like we thought. I mean, this business is just phenomenal. The 18.5% operating margin is, you know, 300 basis points or so better than it was a year ago. They're really on track to put together a really fantastic year after, you know, a challenging year last year amidst all the COVID restrictions. That's great. On the other restaurant expense line, did you talk about if there are any temporary expenses in there, or is it just really the buildup of all the higher energy costs that you talked about or anything else? Well, you know, operating expense, it's really primarily just the utilities inflation. I mean, like, if you look at the overall category, just sequentially, restaurant operating expense in Q2, you know, we were up some, like, 8% year-over-year in inflation and restaurant operating expense. You fast-forward to Q3, and it was up 13%, right? Now I think it's hard to say how long that utilities pressure lasts, you know, but certainly I would expect it to continue into the fourth quarter. I think that you would start to get relief again, to be honest, when you start lapping these accelerated increases sometime in the middle of next year, unless there's any fundamental changes in, you know, energy pricing, sort of in the macro environment. That's kinda how we see it at this point. Got it. Thank you. Our next question is from Lauren Silberman with Credit Suisse. Please proceed. Thank you. I just wanna start with customer behavior. As you look across your brands, are you seeing any signs or changes in customer behavior, trade down, check management? To the extent possible, any sense of differences amongst your lower income versus higher income cohorts? Good morning. With our portfolio, we get a broad look at the consumer. You know, if you look at it, we've got some interesting combo offers at Outback are doing really well. We've got some prefixed menu items at Bonefish that are doing really well. Then we've got the high-end consumer. So far, we have not seen a major change in trend among the various consumer bases. If I would say one thing, fine dining continues to do extremely well, and Fleming's within fine dining does really well. We're seeing the dynamics there still do well across our entire portfolio. The one area that is also really interesting before I turn over to Chris for any other comments, but that is also interesting is our third-party delivery also is very vibrant. That consumer is doing well as well. Well, the only thing I would add is, Lauren, good morning, is that we're not seeing any negative mix trends, right? Q2 was still positive 1% or so. I think that mitigates some in Q4, but we don't expect it to turn negative. I think that if you're using mix in terms of what am I choosing when I come into the restaurant on menu, we're not seeing negative mix trends at this point, which is, you know, an encouraging sign that the consumer is hanging in there. Great. That's really helpful. Just on marketing, how are you thinking about advertising from here? Just in the third quarter, where was advertising compared to historical levels? Just trying to understand broadly what you're seeing in the promotional environment. Thank you. Yeah. One thing we learned during the pandemic was. We really have an outstanding understanding of our marketing, and we're thrilled that the world is going more and more digital, which gives us flexibility. We have a great understanding of our return on investments, and there's been, we've seen some really good returns on our marketing spend. It's been a bit of a step up in marketing spend, and Chris will talk about that in just a minute. You're gonna see us in a more digital environment, talking about the value we offer every day. You won't see, you know, a lot of discounting from us. We think we got our menu prices in line. We think we've got some great offers in line. We understand the digital marketing piece. We can flex it up and down, and we're really pleased with the returns that we're seeing on our marketing. Yeah. In terms of the overall spend trend and where we've been, it really depends on the comparison that you're looking at. Certainly, if you go back to 2019, we were spending 3.5% of our sales on marketing. If you look at last year, it was closer to 1%-1.5% of sales on marketing, right? This year, the last couple of quarters, we've been in that 2%-2.5% range on overall marketing spend. I think the one thing in terms of the financials that we've committed to is, look, we're not going back to spending 3.5% of sales on marketing long term. I think that somewhere in the 2s is probably where we settle in long term. We're obviously gonna reserve the right to flex that within that 2%- 2.5%- 3% range based on what we're seeing from a return standpoint. Great. Thank you very much. Our next question is from John Ivankoe with JPMorgan. Please proceed. Hi. I wanted to ask about, you know, just the relationship between pricing and traffic. I mean, many of us, you know, are you know, kind of talking about pricing to cover costs, but I'm just wondering what, you know, you kind of see as the consumer sensitivity. You know, looking at your table, for example, there's almost a perfect inverse correlation between the increases in average ticket and the decreases in traffic, at least on a one-year basis. You know, the point of the question is, I mean, do you think that you're actually outpricing at least a certain percentage of your customer base? In other words, is your pricing, is the industry's pricing, you know, responsible for some of the traffic declines? Would those traffic declines, in your opinion, be the same even with a much less degree of pricing than you and your competitors are taking? Yeah, I think it's important, John, that we've seen a sequential improvement in traffic during the quarter. We're guiding to that in Q4. We have specifically not priced up to the level of some of our competition. Interestingly, we have not priced up to the level of food and grocery stores. I think it's what we do as a company can continue to make progress. You know, we've talked about some of the things that we are doing, which is you know, some of our menu offerings and innovation, some of the combo meals that we've done, some of the prix fixe menus at Bonefish, and also some things that Carrabba's is doing. Our operating scores and consumer scores are improving every day. These are the things that we're gonna do to build on traffic. I'd also say, John, you know, as you know, 2021, as far as a lap standpoint, you know, during the quarter we were lapping some pretty heavy stimulus spending still. We saw sequential improvement in traffic during the quarter. We will continue to see, so hopefully some improvement, and I think we have the actions in place to make it work. Yeah. The only thing I would add, John, is I know your question isn't really a Bloomin' specific question. It's more of a broader thought, but I do think it's really important perspective for our company that if you look back at 2021, we only took 1.5% or so menu pricing in 2021 relative to where we were in 2019. When you look at our decisions, our total fiscal year 2022, we're only gonna be around 8%-8.5% pricing benefit on a three-year stacked basis, which is really relatively low in this environment. We are being very thoughtful about menu pricing, you know, for the reasons that you talked about. Okay. All right. A separate question, if I can. Dave, in your prepared remarks, you talked about pursuing food, labor, and overhead efficiencies. Is that related to handhelds, KDS, the cooking tech, the changes in the cooking technology, specifically at Outback? Or are there other big buckets that after all these years, I mean, we've been talking about it now for 10 years, but are there other big buckets that still remain, you know, that you can pursue that are gonna benefit the customer and employee experience? Yeah. Two big buckets, John. We're always looking at our organization to invest where we need to invest and pull back where we need to pull back. I think you have mentioned over the years that, you know, you've been impressed with our efforts on overhead and things, and I think the company's in a really good shape there. We'll continue always to look at things. Most importantly, we have two big buckets of opportunity and productivity to both improve customer service and to reduce costs. That is the oven rollout at Outback, which will be done in the middle of next year, and then the tablet rollout at Outback, which will be done at the end of this year. In February, we will provide for our investors what we think the financial implications are for that on a productivity side. But we also see a large sales opportunity from the standpoint of faster, cook throughs and table turns, better accuracy. We are seeing this in the restaurants where they are in place. We're up to, you know, 35% of our restaurants have ovens now, and a lot of high volume restaurants. So we're seeing that. And then secondly, we're gonna task our supply chain organization to continue to provide productivity opportunities for the companies while improving quality of the food and, you know, a food availability to our restaurants where they've done a great job. So supply chain productivity is a big part of what we have planned for next year as well. Those are the two big buckets, John. Thank you. Our next question is from Jared Garber with Goldman Sachs. Please proceed. Jared, please check and see if your line is muted. Hi, can you hear me? Yes, go ahead. Okay, great. Thanks. Thanks for the question. Dave, I think in the opening remarks, you talked about catering being a big opportunity, not only going forward, but I think maybe more specifically in the fourth quarter, just if we think about the near term. Can you talk a little bit more about that and maybe where you've been in terms of penetration in years past and maybe where that can go and how you see that impacting the fourth quarter this year? Yeah, a real shout out to Carrabba's Italian Grill and the team. They've done a fantastic job on catering. Obviously, the food form travels well, but they've transformed that business for us and showed us the way. With the holiday season coming up and people returning to offices and stuff, this is gonna be even a bigger opportunity for Carrabba's. Hats off to the team for doing that. Now, what we gotta do is the rest of the company needs to come along like Carrabba's and perform like Carrabba's. You know, I've talked to our various brands about that, you know. Carrabba's has showed us what we need to do. We put the resources in place to do the sales and catering. With the Carrabba's example, we think that certainly Bonefish and Outback especially can come along and do a, you know, great job in catering. We expect to see even more progress within our brands, but also Carrabba's to continue to, you know, to lead the way. Lastly, Fleming's has done a really great job, you know, with catering and private dining. We see a tailwind with people coming back to work and having office parties and holidays. We see a tailwind from Fleming's Prime Steakhouse, you know, this holiday season. Thanks. That's great color. I guess your commentary on Carrabba's certainly is, you know, continues to be encouraging, as do the results. Sort of begs the question, and maybe I've asked this before, so apologies. In your remarks on unit growth, I think Carrabba's maybe was the third priority after Outback and Fleming's. Why not lean in more on unit growth at Carrabba's or maybe you are, but can you maybe frame for us the longer term opportunity that you see there? At only, you know, 200 units right now, it would seem like the opportunity is certainly there for the picking. Thank you. Yeah, this is an important point. Carrabba's has earned the right to expand. Mark Graff, who runs development, is working with our team there to identify those opportunities. We are working on much like at Outback, we're working on the box, we're working on the economics. You know, working on a business that has 35%, 40% off premises, which is just amazing. We think we have a expansion opportunity here that's really great. In fact, we were just talking with our board about that, you know, last week. Look for Carrabba's. Now, what are we gonna do besides work on the box? We're gonna expand in our stronghold markets, first and foremost. You know, Florida, Texas, Tennessee, Georgia. You know, those are the areas that we're really looking at. The other interesting thing, we have opportunities with our restaurants, but the other interesting thing about Carrabba's is there a delivery carryout type business that we can build as well, there? Kudos to the brand and the team between sales and profits and everything else and leading the way. Lastly, we did open our first Carrabba's in quite some time in Tampa. I know it's our home market, but the sales have just been off the charts. High hopes for the brand. Thanks, Dave. Our next question is from Jon Tower with Citigroup. Please proceed. Great. Thanks. Just a follow-up first and then a question. First on the pricing side, can you talk about where you're running in the 4Q and then perhaps what carries over into 2023, assuming that there's no other price taken? Yeah, sure. Let me unpack that a little bit for you. As we said in the prepared remarks, I'd expect check average benefit to be between 9% and 10% in Q4, and as I said, most of that is pricing. We'll be in the 9%-9.5% pricing range in Q4. Some of that, you know, higher Q4 number is just a byproduct of when we took the pricing actions. We basically moved up our normal late November pricing action to late Q3 to cover the higher restaurant operating expense inflation we're seeing. To start, if you go back to Q2, we had almost 6% pricing. Then we added 3% pricing in late August, mostly at Outback. In early October, I'm adding another 2% pricing action, mostly at our other brands. In late November, 3% pricing falls off. I exit the year at about 8% pricing. In Q1, you have another 1% that's gonna fall off. I would expect to be in the 7% or so range exiting Q1. Again, you know, just to reinforce, it's really important to remind everybody that, you know, we only had 1.4% pricing in 2021. You know, again this year, if you look at the total year pricing coming in around 7%, our three-year pricing is gonna be like 8%-8.5%. That's relatively low in this environment. Awesome. Thanks for that color. I appreciate it. Just kind of pivoting a little bit on the off-premise, specifically the delivery business, I think, as mentioned earlier in the transcript, about 12.5% of your sales in the third quarter coming from delivery channel. I'm just curious how you're planning for. You know, it does seem like we're getting signals that the economy is gonna roll over and soften, and it appears that the delivery channel is probably the most discretionary occasion within the restaurant industry. I'm curious to hear how you're planning for a potentially softer demand environment in the delivery channel specifically. Yeah. First of all, having been involved in the delivery business for many, many years, with Yum! Brands and then now here, the delivery business is really strong and the customer has a habit. I mentioned in the, either an earlier question or my prepared remarks, I can't remember, but our third-party delivery sales continue to be really great. I think people get, John, in the habit of ordering. Now, we can't sit and rest on our laurels. We have to be ready. We've got tremendous bundles, family bundle offers that if you get them, you get a large amount of food, you know, from Bonefish and from Carrabba's and from Outback, you know, and that we will play up in a big way, number one. Number two is we have a terrific partnership with our third-party delivery providers. You know, there are each of them really like working with us, and we have a great relationship with each of them, and we've leveraged that over the years. That will continue to be an opportunity for us. In summary, we're finding that the delivery customer is pretty sticky, but we can't rest on our laurels. We've got wonderful value propositions with high quality food and strong relationship with our third-party partners. Got it. Thank you. Our next question is from Brian Vaccaro with Raymond James. Please proceed. Thanks, and good morning. Just circling back on food costs a little bit. Chris, where did Q3 commodity inflation land for the quarter? What have you embedded in terms of year-on-year inflation in the fourth quarter on food costs? Yeah. It's probably around 13%-13.5% in Q3, and then it'll be around 12% inflation in Q4 for overall commodities. Okay. Great. Thank you for that. I guess the other question I had was on labor. With the recovery in dine-in that you're experiencing, I'm curious to what degree you've added hours back into the box. Maybe you could level set where current staffing levels are versus where you need them to be to deliver a good dine-in experience. Maybe we can just touch on that a bit. Yeah. First of all, like I mentioned earlier, Brian, in fact, I'm gonna start here. Our customer measures at Outback versus the industry and competition are really strong. We've made big improvements in many different ways, and very, very pleased about that, which will help us over time, you know, grow comp sales and take share. Our staffing levels, the market is much better than it was, say, 18 months ago. Still pockets of challenges, but the thing that we've seen, Brian, with our productivity efforts and our good services, we're not back to staffing hours and levels of, say, 2019. We believe that we have pockets of opportunity, obviously, but our restaurants are in really good shape from a staffing standpoint. As we mentioned earlier, with the handhelds and the oven technology, that'll give us opportunity to, you know, further manage labor hours in the restaurants and offer opportunity for us to improve service as well. I don't think you'll see us go back to labor hours of prior years as we go forward, while importantly, while we're improving customer service, and we're seeing that in our external metrics that people provide to us. Okay. As the labor market has loosened, and I think we're lapping, you know, sort of the outsized inflation rates that we saw as everybody was scrambling to hire people in the second half of last year. I'm just curious on wage inflation, where's wage inflation in the third quarter? Are you starting to see year-on-year inflation crest, if not sort of disinflate moving into the fourth quarter? First of all, to answer your first question, your total wage inflation's about 9%. Hourly is a little higher than that. Management's a bit lower, but total wage inflation was 9% in Q3. It probably steps down by 1.5% or so in Q4, just given what you're lapping from last year. I would say that the way I would characterize sort of that hourly wage inflation is that obviously it's still inflationary year over year, but from a sequential standpoint, the rate of increase has slowed down. We have seen some normalization. It's still going up every quarter, but it's normalized versus the pretty steep levels that we were seeing sequentially each quarter, certainly earlier in the year. Okay. Last one for me, just on capital allocation. I'm curious, you know, how does the higher rate environment impact your appetite for share repurchases versus paying down the revolver? And can you just remind us sort of on the dynamics of the remaining convertible note? Is there a potential to remove that overhang in the near term, that dilutive overhang? Thank you. Yeah, sure. Look, I don't think our capital allocation strategy or thought has changed too much. It's gonna be balanced. I guess the best way I can characterize it is, you think about it, we used to make back in 2019 $400 million of EBITDA, and now we are a company that sustainably is generating $500 million of EBITDA for the past couple of years. That gives us a lot of optionality with respect to use of cash. We're gonna prioritize it this way. We're gonna allocate sufficient funds to fund our growth areas that Dave's talked about via capital expenditures. Second, we're gonna look at the peers we admire in this space. Look, they have very little debt in their capital structure, and that gives them a ton of flexibility. We're always gonna be conscious of our debt ratio when we make those decisions, particularly in a more uncertain consumer environment. We do believe also that a healthy dividend is an important sign of confidence in the health of our business, and it provides longer term investors with a stickier return. Look, I think we do think that our stock is undervalued, and we're gonna make share repurchases a part of that strategy, and we're making good, you know, progress on our $125 million authorization. You know, I think that rather than look at it like in an uncertain environment, do you shift? I'm gonna say, look, we still feel like we have adequate flexibility to do a lot of different things with our free cash flow, which is really, really good. In terms of the convert, that's another thing that we can consider, right? I mean, we continue to monitor the environment. We'll continue to monitor it next year to see if it makes sense to take out either all or a portion of the remaining convert. I think the thing to keep in mind with the convert, though, is that it is you are gonna have to pay a bit of a premium to retire it early, and that is a use of cash that I potentially could use for something else, like debt paydown, dividend or share repurchase. We're just gonna have to weigh that optionality next year as part of the calculus with when we're allocating our free cash flow. All right. Very helpful. Thank you. Our next question is from Brian Mullan with Deutsche Bank. Please proceed. Hey, thank you. Just a question on Outback. The average weekly sales are running nicely above 2019, but it does seem like perhaps the dining room traffic is down a decent amount relative to three years ago. You know, you're spending less on marketing dollars. Seems like it was a very smart thing to do for the business. You know, my question is just, besides spending less on marketing, is there anything going on with the Outback consumer or the industry that you might call out contributing to this? Do you see a path to fully recapturing that dining room traffic over time? Yeah, no. We'll continue to improve on dining room traffic as we go forward. I've talked about some of the initiatives we have in place. The work we're doing on marketing, the work we're doing on some of our product innovation, the work we're doing on our ovens and handhelds as we improve table turns and things. That will continue to, you know, move forward for us at Outback. As we mentioned earlier, we don't see anything particular to consumer dynamics that concern us. It's a matter of what we're doing in our business to continue to grow that traffic. Now, what we'd have to also do at the same time is grow our delivery and off and carry out business, which we will also be doing. From a specific, in-restaurant dining standpoint, those are the three or four things we're concentrating on to improve our performance. Yeah, we had to unpack a lot of this last Q3 when we talked about Outback's performance relative to 2019. The lap of the promotional and the LTO and the discounting activity from 2019 is a very, very steep number. In fact, you know, we're right now in the middle of lapping the steak and lobster promotion from 2019 that we talked about at some length last year. Look, I think that is going to have an outsized impact on traffic, but I think that's a trade we're willing to make. I think that now the key for us is to build back using the levers that Dave discussed to healthy in-restaurant traffic moving forward. Okay, thank you. Just a follow-up question on G&A, just at a high level. You know, I'm wondering, is there a path to getting that G&A down below 5% of sales over time? If so, does that have to come from sales growth, or there may be some opportunities on the corporate side to reduce the G&A dollars on an absolute basis? You know, David, you might have alluded to this in a prior answer, but I'm just wondering if you could provide additional color on how you're thinking about this topic. Yeah. The good news is we've made some really tough calls on G&A over the years, and we're in great shape. The good news is G&A is a percent of sales. You can do it by growing revenue, and you can do it by managing costs. We will always be prudent managing our costs, but I don't anticipate any major massive restructurings or anything like that to achieve these targets. We will invest where, you know, we need to invest, and we'll pull back where we need to pull back. I think if we can keep our overhead, you know, growing slowly and then have revenue exceed that, we can get to that 5% range. I think 5% range is a good base camp for our company, 5% of revenue. That's what we're shooting for, and we've taken a lot of tough actions already. Thank you. Our next question is from Andrew Strelzik with BMO Capital Markets. Please proceed. Hey, good morning. Thanks for taking the questions. My first one, I just wanted to go back to the commodity inflation outlook that you provided, and I completely understand that's not a formal guidance, but mid to high single digits for next year potentially as a first look. I would have thought that you were above the market on beef, just given your aggressive locks there and what you said about 4Q. Is there anything else in the basket just that we should be aware of as we kind of evaluate what that might look like for next year? Yeah. I think that there's some good guys and some bad guys, I think, as it relates to sort of how we're thinking about next year playing out. Beef, you know, again, being inflationary makes sense. Oil is the other one, right? I think that, you know, oil is being diverted to other uses. There's some pressure in the marketplace. Oil will tend to be pretty inflationary next year. And then things like french fry. I mean, there's just other categories where we just aren't seeing some of the relief that you might have expected from a commodity standpoint. Now, that's not to say that there's not things that are gonna be more benign from an inflation standpoint. You know, certainly things like I called out, like chicken, dairy, seafood, areas like that should be, you know, more benign next year. Look, I mean, beef's 40% of our basket, and that's gonna really drive a lot of our outcomes as it relates to our overall commodity outlook for the year. Got it. Okay, that makes sense. The other one is just on your value scores with a couple price increases here over the last couple weeks, understanding that you're lagging, kind of the peers lagging the food at home. Are you seeing that show up incrementally in your value scores as you're kind of evaluating additional price increases going forward or the magnitude to which you're taking prices here in these last couple? The really great news is not only are our operating scores improving, but our value scores are improving. That's not our own internal scorecard, that's third-party data. We feel great about where we're going. Great. Thank you. Now our next question is from Dennis Geiger with UBS. Please proceed. Great. Thank you. Wondering if you guys could speak a bit more about the development opportunity across the portfolio. Recognizing you'll provide more color on the next call regarding 2023, but anything at a higher level that you can share about the strength of the new unit pipeline, the returns currently on where the key opportunities are, supply chain perhaps, all kind of within the context of the work that Mark and the team are doing and within the context of kind of that longer-term 2%-3% target. Just curious if there's anything additional you can share there at this point. Thank you. Yeah, I am very pleased with where we're going. The smaller box, what we refer to as the Joey box at Outback, is opening very well, providing excellent returns at lower cost. We're building in our stronghold markets, and we're seeing really great performance in Florida, for instance, and other places. That for us is a massive opportunity to grow this business and build a pipeline that makes some sense at Outback. That's number one. Then secondly at Outback, the relocation program for us, you know, I talked about in prepared remarks, you know, we open those things up, they're doing $4.7 million, so, you know, way above the system average. When we know that we have an A site with our brand at Outback, we got significant sales increases. That's number two for us. Number three, I talked about Carrabba's Italian Grill, and they've earned the right to expand. We'll talk about that, you know, and more in the future, but we're very excited about, you know, building out that brand. Number four, you know, Fleming's Prime Steakhouse, you've seen their numbers. The profitability is very strong. We're getting some wonderful sites. We're opening up a new one in Fort Lauderdale in December. You'll see more in California, Texas, and Florida. Fleming's will be an opportunity for us to continue to grow that business, and we're very excited about that. That's the third one. Lastly, I'd be remiss if I didn't talk about our success in Brazil. Outback Steakhouse is expanding there. If we talked about we're at 137 restaurants. We think we're on our way to 240. They're opening up the Abbraccio, which is their version of Carrabba's. That's an opportunity for us. They're funding all of this with their own free cash flow. Finally, I wanna call out our franchise partners in Korea. They've done a great job opening up restaurants and building that business. Very pleased with the work that they're doing. Those are the development opportunities we have. It's our business presidents and the task of our real estate team to get that pipeline, you know, more vibrant and moving, and I'm very optimistic that we're gonna be able to do that and do it within the construct of the balanced capital strategy that Chris talked about. Lastly, we have a very robust post-completion process, so we can adjust things as they see fit, and you can count on our utilization of capital to be, you know, very prudent and good for the shareholder. Great. I appreciate that incremental color. Just one more then. If you could speak to the rewards program at all and sort of what's the latest with respect to engagement benefits you're seeing with the customer, with the program, and kind of on the look ahead, the potential for the program as you think about it as sort of a marketing efficiency tool, CRM tool, and really just the broader opportunity for the program, if there's much incremental to highlight there. Thanks, guys. Yeah, there is. We've got 13 million Dine Rewards members. It is underutilized. We have very loyal people there. We love the program that we have. We wanna continue to use it with various marketing programs and really reward and recognize those customers. For competitive reasons, I'm not gonna get into some of the things that we're thinking. In the future, we would love to, you know, think through some partnerships, but it's something that, you know, we've been talking about internally to, you know, more strongly bring that program to life because it is something that's well established in our system. Great. Thanks, Dave. That concludes our question and answer session. I would like to turn the conference back over to management for closing comments. Well, thank you, everybody. We appreciate you for joining us today. We look forward to updating you about our company in February on our next earnings call. Thank you. Thank you. This concludes today's conference. You may disconnect your lines at this time, and thank you for your participation.