Good morning, ladies and gentlemen. Welcome to today's Ruth's Hospitality Group Third Quarter 2022 Earnings Conference Call. At this time, all participants are in a listen-only mode. Following the company's formal remarks, we will conduct a question-and-answer session. Instructions will be provided at that time for you to queue up for questions. As a reminder, today's conference call is being recorded. I would now like to turn the conference over to Mike Hynes, Vice President of Finance and Accounting. Please go ahead. Thank you, David, and good morning, everyone. Joining me on the call today is Cheryl Henry, our President, Chief Executive Officer, and Chairperson of the Board, and Kristy Chipman, our Chief Financial Officer and Chief Operating Officer. Before we begin, I'd like to first remind you that part of our discussion today will include forward-looking statements. These statements are not guarantees of our future performance, and therefore, undue reliance should not be placed upon them. We would also encourage you to refer to the investor relations section of our website at rhgi.com for copies of today's earnings press release and our recent filings with the SEC for a more detailed discussion of the risks that could impact our future operating and financial results. During this call, we will refer to adjusted earnings per share. This non-GAAP measurement was calculated by excluding certain items. We believe that this measure represents a useful internal measure of performance. You can find a reconciliation of adjusted earnings per share in our press release for today's call. I would now like to turn the call over to the company's Chief Executive Officer, Cheryl Henry. Thank you, Mike, and good morning, everyone. Our commitment to serving the highest quality food with genuine hospitality has always been the core of who we are, and I could not be more proud of our team members as they embody this commitment every day. We continue to utilize Ruth's exceptional brand equity and strong capital position to make necessary investments that strengthen our operations and guest experience while strategically building the team, our restaurant base, and our digital infrastructure for continued growth over the long term. Turning now to the third quarter, we delivered solid results in part from the continued demand from our Just Because and special occasion guests. We realized strong top-line momentum demonstrated by our more than 11% comparable sales growth over 2019. We also successfully managed ongoing inflationary pressures, resulting in strong adjusted earnings per share of $0.16 and adjusted EBITDA of $12.3 million. Outside of last year, this is the best third quarter performance the company has had and landed in line with our internal expectations. Beyond these numbers, we continue to make progress growing our business organically, including investments in new restaurants, relocations, remodels, and digital technologies. Let's begin with an update on our development plan. During the third quarter, we opened three new restaurants, including Long Beach, California, Worcester, Massachusetts, and Melville, New York on Long Island. In addition, last week we opened our relocated Winter Park, Florida location, upgrading our hometown restaurant to modern brand standards. This is part of our ongoing remodel and relocation efforts, which also includes remodels in our restaurants in Nashville, Biloxi, and Garden City, New York to be completed by the end of this year. Looking ahead, we remain confident in our ability to develop at least 5 new units annually. As we prepare for 2023, we have signed 4 agreements and are actively working to confirm a fifth opening for the fourth quarter. We recently signed a new lease in Jupiter, Florida for late 2023 or early 2024 and are in final stages of lease negotiations for another 2024 location. Moving on to our investments in digital technologies. Phase 1 investments included our booking, capacity, and guest experience platforms, Point of Sale, and Labor Management Software. These investments have already generated efficiency in the business and give us increased confidence that further digital investment will benefit our shareholders. To that point, we are beginning phase two with a new inventory platform, enhanced reservation website, and a new data-driven and targeted paid media program. To lead these digital efforts, we're in the process of hiring a chief commercial officer who will continue to develop and drive our digital transformation, producing actionable insights to enhance our ability to deliver on our exceptional steakhouse experience. Our new CCO will also lead our new approach to marketing that leverages our deeper knowledge of the guests as well as insights so that we are even more targeted with our marketing efforts to maximize sales and profitability. Investing in new restaurants and other growth initiatives has always been part of our balanced and disciplined approach to capital allocation. The second part of that approach, which has also been very consistent over the years, is returning excess capital to shareholders through debt reduction, dividends, and share repurchases. To that point, we returned over $20 million of excess capital to shareholders during the quarter. We paid down $10 million in debt, paid $4.9 million in dividends at $0.14 per share, and repurchased 5.4 million of shares. In all, we believe these actions have, and will continue to position us for sustainable growth and long-term value creation. I'll now turn the call over to Kristy to cover the specifics of the quarter. Thank you, Cheryl. For the third quarter ended September 25th, 2022, we reported GAAP net income of $5.5 million, or $0.16 per diluted share, compared to $6.9 million or $0.20 per diluted share last year. Non-GAAP diluted earnings per common share was $0.16 compared to $0.20 in the prior year quarter. Please refer to our earnings release for a reconciliation of GAAP to non-GAAP EPS. Total revenue grew by 8.2% versus 2021, including total company-operated restaurant sales growth of approximately 8.5%. Comp sales for the quarter increased 2.9% versus 2021, and increased 11.2% compared to 2019. Comparable sales in October were up approximately 6% and 8% versus 2021 and 2019, respectively. We continue to consider 2019 to be a relevant sales trend comparison at this point due to the lack of normal seasonality in 2021. Franchise income for the quarter was $4.9 million, up 3.5% versus the same period last year, driven by comparable franchisee sales growth of +4.1%, with domestic sales of +2.1% and international sales of +15.7%. Other operating income was $2 million, up 7% versus last year. Food and beverage costs decreased 257 basis points for the quarter to 31.7% as beef prices declined 14% versus 2021, offset in part by a 6% increase in the balance of our commodity basket. Beef cost per pound continued to increase in Q4 compared to Q3, leading us to expect food and beverage costs as a percentage of sales for Q4 2022 to be in line with last year. Labor expense for the quarter versus 2021 increased 240 basis points, primarily due to hourly and management wage increases in the high single digits and an increase in the number of managers per restaurant as we continue to add back a fifth manager to most of our restaurants. We reiterate our full year 2022 expectation that restaurant operating expenses, including labor, will improve by approximately 200 basis points when compared to 2019. Moving beyond restaurant expenses, combined marketing and G&A as a percentage of revenues was 11.3% compared to 9.7% in the third quarter of 2021, reflecting the timing of investments in business transformation and the addition of certain key resources back to the business. As a reminder, the third quarter is typically our highest spend as a percentage of revenue, as sales in the third quarter are typically the lowest. We expect marketing and G&A, when combined, to be between $54 million and $56 million for the full year. As of September 25th, we had $20.8 million in cash, and our outstanding debt was $30 million. We will continue to ensure a strong balance sheet that supports our ability to grow the business organically and return cash to shareholders. As part of this, we will be paying a dividend of $0.14 on December 2nd to shareholders of record as of November 18th. I'll now turn the call back to Cheryl for a few closing comments. Thank you, Kristy. In closing, our solid performance is a direct result of the hard work and dedication of our team members. We have veteran operators and franchise partners who have always shown resilience in the face of adversity, most recently with their recovery efforts during Hurricane Ian. As we look forward to the remainder of the fourth quarter and on to 2023, we will continue to monitor the economy and adjust accordingly. Let me remind you, we are a 58-year-old iconic brand that has operated through many economic cycles, and we have confidence in our strategic plan, our strong capital position, and our incredible team. We believe that positions us well to pursue opportunities that create value for all stakeholders over time. Thank you for joining us on the call this morning, and we look forward to taking your questions. David, would you please open the line for questions? Thank you. At this time, we will be conducting a question and answer session. 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. If you wish to remove your question from the queue, please press star two. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Our first question is from Joshua Long with Stephens. Great. Thank you for taking the question and for the update today. Wanted to see if we might start first off just talking about some of the trends through the quarter. I know that you mentioned your results came in line with your expectations, and we also had the opportunity to have an update from you for the first part of the 3Q period. You know, a month or two ago. Just curious how the rest of the quarter shaped out and any sort of directionality as you talked about some of that acceleration into 4Q. Thanks, Josh. Yeah, so, you know, we had given an update, I think, at the beginning of September before we went to the Benchmark Conference regarding our sales for July and August. September, you know, came in at about 7.5% versus 21%. We were pleased with that from an overall comp perspective. As we expected, you know, food and other items came in online and we've been the beneficiary of some earlier pricing that supported the inflationary pressures that we saw. As we mentioned, you know, while I think there was a little bit of a disconnect or difference between what you all came up with from a restaurant operating expenses perspective, we were in line with what we expected here and carrying on 2019 kind of as the right baseline for that particular set of expenses. Got it. That's helpful. When we think about the 2.9% comp on the company onsite for the quarter, could you talk about pricing mix, any sort of changes or, you know, trends that you're seeing from the guests, how they're engaging with the brand at the store level, and maybe touch on any sort of updated pricing thoughts given where your commodity basket is right now? Yeah, Josh, I'll let Kristy touch on pricing, and then I'll jump in around where we're thinking about the guests and the consumer at this point. Oh, sorry, Cheryl. Sorry. Sorry. You're good. For pricing for the quarter, we were carrying about 5.9% versus 2021 and about 10% versus 2019. We can talk about October. We took a price increase of approximately 1% in October and about mid-October as well, so we'll be carrying that forward into the first part of next year. Yeah, just to follow up on the guests, you know, we haven't seen at this point, Josh, any, you know, average check more so than at the first half of the year. You know, we've talked about private dining in the past. That is not, you know, recovered to 2019 levels at this point. However, that special occasion and just because guests has made up for that, we're still seeing some strength and resilience in that segment of our guest base. Got it. That's helpful. Kristy, one clarification. Were those two price increases here in October, or was that a net or an incremental 1% to get you to kind of running at that 6.9% for the fourth quarter? Sorry. Let me just clarify. We were at 5.9% in Q3. In October, mid-October, we took a 1% price increase that will carry into next year, obviously. For Q4, our pricing is expected to be about 4% when compared to 2021. That's helpful. Thank you. I'll pass along in queue. Our next question is from Nicole Miller with Piper Sandler. Hi, guys. This is Abby on for Nicole. Thanks for taking my question. I was just hoping you guys could provide some detail on holiday bookings heading into the fourth quarter. Anything you're seeing, elevated demand, just any commentary there? Yeah. Thanks, Abby. It's a little early to predict and again, obviously, December being the strongest month for us for those holiday events. We've seen some shift throughout the year in the booking patterns of people, so how early they're booking events, so I wouldn't want to give specifics. I think generally, as expected, some of those peak times and peak days are booking up fast, so that's good to see. I think it's a good indicator. You know, we've put resources for the quarter against that segment of our business and have some new folks in that are really driving some of the special menus around the holidays to help us fill some of those off times that we've been successful in doing in the past. Got it. Okay. Thank you. That's helpful. This is more of just a technical modeling question. D&A, I noticed, tends to step up in the fourth quarter historically. Is this a safe assumption? I know you guys provided super helpful commentary surrounding your margins, but just anything you can provide there. Hi, Abby, this is Mike. In the past, we've seen some noise in the fourth quarter with G&A because of incentive compensation that gets trued up at the end of the year when it's based on a full year of performance. I wouldn't necessarily consider that the normal seasonality for 2022. Got it. Just to confirm, I said D&A, not G&A? Yes, the depreciation increase that you saw in the third quarter will continue to increase in the fourth quarter. We added 3 restaurants in the third quarter. In addition, we placed in service a lot of our technology investments in the third quarter, and they got a partial quarter of a depreciation there. You'll see fourth quarter depreciation higher than Q3. Great. Thank you. I will hop back in queue. Appreciate it. Our next question is from Brian Vaccaro with Raymond James. Hi, good morning, and thanks for taking my questions. Just wanted to start on sales, and appreciate the quarter- to- date comp update. Could you just level set where October average weekly sales were so we're on the same page? Sure, Brian. Let me just find it really quick. It came in at $112, right? Yeah, I think at 112. 112? Okay, great. Thank you. I guess, you know, Cheryl, you touched on it a minute ago, but as you dig into your traffic trends and your check trends, and I guess I'm also thinking about your comps versus 2019. I think you said up 8%, that's a little slower than the third quarter. I guess as you dig into that, I'm curious what you think is embedded or reflected in that, whether any changes in customer frequency or behavior. You know, are you seeing reduced frequency among the lower- and middle-income consumer that maybe had traded up and they were boosted by stimulus or what have you? Maybe on the other side, maybe the higher income consumer might be dialing back a bit with 401(k)s down and just kind of broader recession concerns starting to weigh. Just any perspective on what you're seeing beneath the hood a little bit on the sales front. Sure. As we dig into it, Brian, and we've talked about this various quarters, it's really the impact still of those down markets not recovering as quickly versus their sales and traffic in 2019. As we kind of pull that apart, that's probably one of the biggest impacts that we have on sales and traffic, as well as, again, the private dining kind of recovering slower versus 2019. Not so much, you know, again, not seeing the management of the check at this point, not seeing that à la carte diner pull back and, you know, still seeing some benefit from Ruth's Anywhere, which is our to-go program, but it's really around those specific markets for us that are having the biggest impact. Okay. Thank you for that. I guess on the margins, I just wanted to clarify. Kristy, did you say fourth quarter COGS ratio will be similar to the fourth quarter of 2019? Could you maybe unpack kind of what that reflects in terms of beef inflation or any other perspective on your commodity assumptions within that? Yeah, sure. Good clarification to make, Brian. Q4 of 2022 will be similar to Q4 of 2021. We are seeing beef prices continue to go up as we have come into October, reflecting, you know, I think pretty normal seasonal demand in the fourth quarter. You know, based on what we're seeing there with a similar level of inflation across the rest of the basket, maybe coming down a little bit, we think, you know, we're gonna be relatively flat to Q4 of 2021 in the overall cost of sales line. Okay. If my notes are right, I think you were lapping, or you had a contract through mid-October. Have you been able to enter into any new contracts that are worth highlighting? None that are large enough are worth highlighting right now. We have a very small one going for a few weeks here to take us through November, but nothing meaningful of note, and those are reflected in my commentary on being able to hit Q4 of 2021 similar cost of sales. Okay, great. Then last one for me, just on the other operating costs in the quarter. We've heard a lot about and seen from other companies, a lot of inflation on utilities, repair and maintenance and some other categories. Could you just parse through kind of where was labor in the third quarter, and where were some of these other categories that might have pressured that line? Yeah. Labor was, you know, definitely continues to be in line with our expectation of being 200 basis points better than 2019, sorry. It's coming in line there. When you look at the other restaurant operating expenses, particularly, you know, we have seen inflation in utilities and M&R and, you know, linen and certain line items. Our pricing has been able to offset a lot of that. I think. You know, we have to anchor on 2019 as the right base and have the 200 basis point savings on overall restaurant operating expenses from that base versus 2021. When you think about 2021, sales ramped up really quickly in the third quarter. We had, you know, the best July last year at almost 17%. There was lapping Delta, et cetera, which meant we didn't fully return to normal operating expense mode. We had maybe less valet, you know, credit card charges were a little bit less last year just across the board. That's why we continue to anchor on 2019 as a more reasonable baseline for restaurant operating expenses, including labor. Okay, thank you. I'll pass it along. Once again, to ask a question, please press star one. Our next question is from Todd Brooks with The Benchmark Company. Hey, good morning, everybody. Couple quick questions for you. Just finishing up maybe on beef costs. I know, Kristy, you said there's a small hedge through November. As you're looking out to 2023, just with what has gone on with the overall herd this year, is it too soon to have an outlook for prime costs for 2023 relative to 2022? Is there any increased willingness at all with counterparties to come into the other side of contracts that may let you hedge at least a chunk of your needs for 2023? We're not specifically guiding on 2023 because, to your point, it is a little bit early, but let me just give you a little bit of texture on what we're seeing on the supply side, which is, you know, there continues to be a tight production supply. You know, fewer cattle on feed. Costs are going up, high feed costs, transportation costs. While labor at the Packers is easing a little bit, prime grading continues to be down. As we come into the year, I think that's a little bit of a wild card for us as it relates to, you know, what we'll be able to secure from a pricing perspective. I would say that, you know, as we always say, we are active in the market to try to figure out where we can contract forward if it's possible. It has become increasingly difficult to do that. We have been a little bit more strategic in the past few months at looking at different ways that we can contract, but nothing to share to date on anything for 2023. Okay, great. That's helpful. Thanks. Secondly, just wanted to know if you guys dig into the September and October strength, do you have any sense is there a Delta lap benefit? As we've gotten further into October, early November, have we seen same-store sales maybe normalize from just getting back to kind of out of the window where Delta was impacting things last year? Yeah. I'll start, and then I'll turn it to Cheryl if she has some additional comments. I think. You know, I definitely think we're out of the Delta variant. We kinda came out of that in the August timeframe. That was a pretty short time period for us of impact. I think as you come into October and particularly mid-November, the interesting piece is that's when we started to hear about Omicron. I would argue that, you know, mid-December into all of January is when, you know, Omicron really started to take hold and, you know, people would have changed some behaviors on not going out again in that later part of December and all of January timeframe. Yeah. Because I think that's right. Not much to add. Just, as she mentioned, mid-December, that's really when last year, as we talk about kind of a big driver of that period, the private dining began to fall off as groups decided they weren't going to make, the visit to the restaurant in larger groups during that time of the year last year. Okay, great. Can you remind us, and it's all a blur, sadly, now, it's been so long. If you look back to Omicron, how did it impact staffing levels as far as exclusions, call-outs? Did you have lost operating hours that you'll be lapping, or did you have to go to restricted menus at all in any of the locations just to deal with where staffing levels were during kind of that Omicron reality? Yeah. That in thinking back again, you're right. Some of it gets a little lost. I do recall because we talked about it frequently. We did have call-outs, but they were not to the point where we had to close shifts or change operating hours on a significant basis. We shouldn't be experiencing any of that in the shift to this year. Okay, great. The final one, I know this will be the first big holiday season that we're going into, armed with the table management tool that you guys rolled out this year. Just how should we be thinking about that for what it might unlock at peak periods? Just because some of these holiday periods are so peaky to begin with. I don't know if the benefit from the technology actually wanes or if you do feel like there's some capacity that can be extracted that you can satisfy. Thanks. Yeah, great question, Todd. Really the impact we've seen and with intent as we put this program in is exactly that. To hit those weekends, the Fridays, Saturdays, and then holidays. We do expect the teams now have months under their belt in understanding the balance between the guest experience as well as driving those opportunities around capacity. We expect them to be focused on this through the next couple of months as we see those the majority of the holidays as well as those busy Friday and Saturday nights. Okay, great. Thanks, Cheryl. Our next question is a follow-up from Joshua Long with Stephens. Great. Thank you for taking the follow-up. Wanted to, I think we touched on it earlier, and if you quantified it, I missed it. Can you talk about some of the challenge markets in terms of, you know, Boston, Hawaii, and the Theater District in New York? How are those trending versus the last update that you offered? Sure, Josh. You know, so Boston, Manhattan, and Hawaii are continuing to challenge us to the tune of about, you know, 580 basis points for the quarter. Particularly, you know, Hawaii and one site in Hawaii was a fairly significant impact in Waikiki. We do expect, you know, that Japanese tourists that we're pretty dependent upon, particularly in that restaurant, to start to come back as Japan opened back up during the quarter. Manhattan and Boston, you know, are a little bit different. They're much more tied to the return of work. Our Manhattan restaurant continues to be challenged, albeit, you know, it's had some green shoots, but it continues to be challenged over the long haul from a sales perspective, as does Boston in the couple of restaurants there that we include. Got it. That's helpful. Thank you for that. Going back to some of the investments for phase two on your digital front or your digital initiatives, can you talk about the timing around those? And is that something that is largely in place now? You know, just trying to, you know, put together kind of a view of where, when and where that might hit the G&A line or, other cost line items and just put into perspective when some of the benefits might be able to start being realized. Sure. We're in the early stages of configuration of that inventory management system. You'll, you know, that's mainly capital right now. You'll see the software expenses start to hit, you know, early next year into, you know, first quarter-ish. Outside of that, the rest of it, you know, is capital configuration. It's gonna take us a good part of next year to get it fully rolled out. As you can imagine, implementing a system this large, particularly covering both food and then liquor, beer, wine, which has different order guides and requirements across, you know, every state and sometimes local, is a fairly significant list in order to get that system configured and ready and tested. We don't expect a significant benefit from the placement of that inventory system until probably Q4 next year, and then definitely into 2024, where we will start to assign some, you know, savings in that inventory category. As it relates to the other work, we, you know, and I think Cheryl mentioned the reservation website. That won't go into process until Q1. Then the paid media program we are, you know, testing right now, and so you're gonna see that. That was reflected in the marketing and G&A dollars that we gave you already. We have built in that incrementality for that specific use case, we'll call it, and the benefits and the learnings from that will be implemented starting in Q2 of next year. Got it. That's very helpful. One more follow-up. Cheryl, I know you mentioned it's a little early for the private dining, you know, bookings to come through, but just curious on what if you have a view that you'd share in terms of how you're looking for this holiday season to shape up. It seems like it is gonna be one of the first ones here in a while where hopefully there's, you know, no sort of major disruption or volatility there. Just curious on how you're shaping it up, knowing that your Just Because and Social Diner has remained strong. Is that an opportunity? Maybe it might not fall technically in the definition of private dining as we think about it, but just curious on how you're shaping that or how your perspective's shaping up for the 4Q period. Yeah. As you said, we haven't seen kind of the managing of the check or reduction in the sales in our à la carte space. As we go into the quarter, you know, the way we think about it, again, and someone asked this question, is how are we managing our books? Are we there for the demand at the peak times, when we're getting it? Really it's the operators focusing on what they do and what they do well, delivering that best steakhouse experience, and making sure that we are open, our books are open, we're managing it the right way to pick up any incremental demand that we can get. Yeah. I'll just add, I mean, I think if you recall during COVID, we had to get pretty smart about how we use our dining room. There is an opportunity for us to continue to grow main dining room sales by using private dining space if we're not able to fill it with an event. You know, it's gonna depend on what day of the week and what you know we need is in terms of servicing the guest from a capacity perspective. That makes sense. Thank you. Ladies and gentlemen, we have reached the end of the question and answer session, and I would like to turn the call back to the management team for closing remarks. Thank you, David, and thank you all for joining us on the call today. We look forward to speaking with you again soon. Have a great day. This concludes today's conference. Thank you for your participation. You may disconnect your lines at this time.