Good evening, and welcome to the Texas Roadhouse Q3 earnings conference call. Today's call is being recorded. All participants are now in a listen-only mode. After the speaker's remarks, there will be a question-and-answer session. At that time, if you would like to ask a question, please press Star, then the number one on your telephone keypad. Should anyone need assistance at any time during the conference, please press Star zero, and an operator will assist you. I would now like to introduce Michael Bailen, Head of Investor Relations for Texas Roadhouse. You may begin your conference. Thank you, Emma, and good evening. By now, you should have access to our earnings release for the Q3, ended September 26, 2023. It may also be found on our website at texasroadhouse.com in the investor section. I would like to remind everyone that part of our discussion today will include forward-looking statements. These statements are not guarantees of future performance, and therefore, undue reliance should not be placed upon them. We refer all of you to our earnings release in our recent filings with the SEC. These documents provide a more detailed discussion of the relevant factors that could cause actual results to differ materially from those forward-looking statements. In addition, we may refer to non-GAAP measures. If applicable, reconciliations of the non-GAAP measures to the GAAP information can be found in our earnings release. On the call with me today is Jerry Morgan, Chief Executive Officer of Texas Roadhouse, and Chris Monroe, our Chief Financial Officer. Following the prepared remarks, we will be available to answer your questions. In order to accommodate everyone that would like to ask a question, we kindly ask analysts to please limit yourself to one question. Now, I would like to turn the call over to Jerry. Thanks, Michael, and good evening, everyone. We have nearly completed our annual Fall Tour, where we visit with more than 700 operators from all three concepts. As I mentioned last quarter, this is one of the highlights of my year as it gives us the opportunity to interact directly with all our managing partners across the country. At stop after stop, we get to see and hear not only the passion they have for our business, but also the ideas they have to make us better. The real-time feedback we receive is invaluable as we plan for how to continue to improve and take action to support and serve the needs of our managers and Roadies. The hard work of our managing partners and their teams can once again be seen in our strong Q3 performance, which includes average weekly sales of approximately $139,000 and comparable sales growth at 8.2%. I believe our operators' passion, dedication, and focus on the success of their restaurants is one of our biggest advantages. They remain committed to building sales and profits while sticking to our core values, regardless of the pressures they face. Our top-line results continue to tell us that we are delivering on our promise of legendary food and legendary service. We recently completed an independent guest attitude and usage study, and we were the casual dining leader in many categories, including overall guest satisfaction, food quality, and friendly service. In the Q3, guest satisfaction helped drive traffic each month compared to 2022. Moving on to development, the Q3 was productive with nine company store openings, including two Bubba's 33 locations. We also opened four franchise restaurants, including three international locations and our first Jaggers franchise restaurant. We expect to open as many as 12 additional company-owned restaurants in the Q4, which would give us 27 company-owned Texas Roadhouse and Bubba's 33 openings, as well as three Jaggers openings for the full year. Looking ahead to 2024, we have a strong pipeline of new stores and are targeting approximately 30 company-owned Texas Roadhouse and Bubba's 33 openings, as well as three Jaggers. We also expect our franchise partners to open at least nine international and domestic locations in 2024, including four Jaggers. Finally, I would like to address increasing external concerns regarding the health of the consumer and the ability of restaurants to navigate uncertain economic times. Whether it is commodity inflation, mandated wage increases, student loan payments, or other potential issues, the restaurant industry has always been full of challenges. However, we have seen the consumer has remained resilient in their desire to dine at restaurants, especially those like ours, that offer a quality product with a high level of value, service, and hospitality. Our position remains simple: We focus on what we can control, which is providing a legendary experience to each and every guest that visits our restaurant. We will never take for granted that guests give us two of their most valuable commodities: their time and their money. Now, Chris will provide some thoughts. Thanks, Jerry. Let me start by echoing Jerry's comments regarding Fall Tour. ... Still being relatively new, it was a great experience for me to meet so many of our operational leaders and listen to their feedback on how to make our company even more legendary. The more opportunities I get to spend time with our managing partners, the more I understand how critical they are to our success. Before Michael provides the detailed update on our Q3 financial results and go-forward assumptions, I would like to offer some color on our results, menu pricing, and our approach to capital allocation. We remain extremely pleased with our current top-line trends, as well as the strength and consistency we have seen on a multi-year basis. With regard to profitability, our Q3 comparable results were negatively impacted by several adjustments, which Michael will detail. Despite this noise, we were able to continue margin dollars-- or we were able to continue growing margin dollars per store week, while also maintaining year-to-date double-digit EPS growth. At the beginning of the Q4, we implemented a 2.7% menu price increase. This gives us an average 5.5% for the full quarter. As is typical for us, this pricing action is primarily meant to offset structural wage pressure, including the impact of upcoming state-mandated wage increases. While costs remained elevated in the Q3, they continued to perform largely in line with our expectations. The rate of year-over-year wage inflation continues to moderate as we lap significant wage pressure from last year. At the same time, the sequential pace of wage increases has stabilized, resulting in an expected return to more normalized and manageable rates of increase in 2024. It's a similar story regarding commodities this year. Beef remains the primary driver of this year's inflation, with pressure from the rest of the basket moderating or deflating as we have moved through the year. Inflation for the Q3 was slightly better than we had originally expected, as our procurement team is doing a great job with the strategic timing of our contracting and purchasing. On capital allocation, we will maintain our balanced and disciplined long-term approach. While our pipeline of new store openings over the past several years, including 2023, has been heavily back-end loaded, we now expect 2024 openings will be much more evenly distributed throughout the year. Going forward, it's our expectation that we will maintain a more balanced opening schedule. We will also continue to invest in our existing stores so that they can continue to grow and generate strong profits. Additionally, we will continue to pursue franchise acquisitions when those opportunities arise and ensure that we have a deliberate approach to dividend growth. Beyond that, excess cash will be directed toward the repurchase of shares as appropriate. All of our capital allocation decisions are made through the lens of creating strong shareholder returns for our investors. We believe that the combination of organic growth and returning capital through dividends and repurchases will allow us to continue to deliver robust shareholder returns as we have consistently done throughout our history. And now Michael will provide the financial update. Thanks, Chris. For the Q3 of 2023, revenue grew 12.9%, driven primarily by a 7.8% increase in average unit volume and 5.7% store week growth. Restaurant margin dollars grew 7.1% to $163 million, while earnings were $0.95 per diluted share. EPS growth of 2.6% for the quarter was significantly impacted by several adjustments in both the current and prior year. I will provide more detail on these adjustments in a moment. As mentioned, our stores averaged nearly $139,000 in weekly sales in the Q3, and to-go represented approximately $17,000 or 12.3% of these total weekly sales. We have now had 2 consecutive quarters of year-over-year growth in average weekly to-go sales and believe there is an opportunity to further build upon this business going forward. For the Q3, comparable sales increased 8.2%, driven by 4.1% traffic growth and a 4.1% increase in average check. By month, comparable sales grew 10.7%, 7.8%, and 6.6% for our July, August, and September periods, respectively, and sales and traffic trends have remained strong into our Q4. For the first 4 weeks of Q4, average weekly sales were over $141,000, driven by 9.2% same-store sales growth, which includes a 3.4% traffic increase. Restaurant margin dollars in the Q3 increased to over $20,000 per store week, and restaurant margin, as a percentage of total sales, decreased 80 basis points to 14.6%. The decline in the Q3 margin percentage is primarily due to the approximately 70 basis point impact of adjustments to our general liability insurance reserves this year and last year, as well as an approximately 30 basis point impact from our gift card breakage adjustment, declining from $6.6 million last year to $3.7 million this year. Food and beverage costs as a percentage of total sales were 34.6% for the Q3. This was 3 basis points better than last year, as 4.2% commodity inflation for the quarter was offset by the benefit of a 4.1% check increase. With approximately 75% of the overall basket locked for Q4, we continue to expect full year commodity inflation to be at the higher end of our full year guidance range of 5%-6%. Looking ahead to next year, we are projecting commodity inflation of 5%-6%, with beef the primary driver. Labor, as a percentage of total sales, increased 51 basis points to 34% as compared to the Q3 of 2022. Labor dollars per store week increased 8.5%, primarily due to wage and other labor inflation of 5.6% and growth in hours of 3.3%. Labor growth benefited from the $1.3 million impact of favorable claims experience related to group insurance and workers' c omp. Our full year 2023 guidance for wage and other labor inflation remains unchanged at between 6% and 7%, with current trends continuing to point towards the midpoint of that range. For 2024, we are forecasting wage and other labor inflation of 4%-5%, with upcoming state mandated increases representing approximately 1% of the increase. Other operating costs were 15.2% of sales, which was 38 basis points higher than the Q3 of 2022. Included in the year-over-year change is an approximately 70 basis point negative impact from the aforementioned adjustments to our quarterly reserve for general liability insurance. These adjustments include $2.9 million of additional expense this year and a $4.4 million credit last year. Moving below restaurant margin, G&A dollars grew year over year by 11.4% and came in at 4.3% of revenue. The year-over-year increase includes the impact of lapping a $2.5 million credit in 2022 related to last year's Managing Partner Conference. Our effective tax rate for the quarter was 11.9%, and we now expect a full year 2023 income tax rate of approximately 13%. Our initial forecast for the full year 2024 income tax rate is between 14%-15%. With regards to cash flow, we ended the Q3 with $69 million of cash. Cash flow from operations was $103 million, which was more than offset by $89 million of capital expenditures, $37 million of dividend payments, and $12 million of share repurchases. At this time, we are raising our full year 2023 capital expenditure guidance to approximately $340 million. As Chris mentioned, this increase allows us to accelerate the timing of new store openings in 2024. We now expect to open approximately 15 restaurants in the first half of 2024, on top of the 12 restaurants opening in the Q4 of 2023. This high level of construction activity will require a higher than previously planned capital expenditure during the Q4 of 2023. Additionally, we are establishing our initial 2024 capital expenditure guidance at between $340 million and $350 million. This amount contemplates a continuation of a balanced opening pipeline going forward. Finally, as a reminder, 2024 will be a 53-week year for us. As such, the Q4 of 2024 will have 14 weeks versus our normal 13 weeks. We estimate that the additional week could benefit full year 2024 earnings per share growth by approximately 4%. Now, I will turn the call back over to Jerry for final comments. Thanks, Michael. Whether it's in our restaurants or at our support center, Texas Roadhouse's People Fir st culture is second to none. I'm very proud to announce that we were recently named one of America's Greatest Workplaces by Newsweek. This award came with additional recognition in the following categories: Great Workplace for Women, Diversity, and Job Starters. This recognition is a testament to the passion, partnership, integrity, and fun that makes Texas Roadhouse such a legendary place to work and dine. I am proud to be a partner to all Roadies as we continue to build for our future. That concludes our prepared remarks. Operator, please open the line for questions. Thank you. As a reminder, if you would like to ask a question today, press star, followed by the number one on your telephone keypad. Your first question comes from the line of Christopher Carril with RBC Capital Markets. Your line is open. Hi, thanks for taking the question, and thanks for the initial 2024 outlook. My question is on the commodity outlook, specifically for 2024. Can you expand a bit more on what you're seeing there, maybe what's specifically driving the 5%-6% inflation outlook, even as it looks like inflation right now is currently running below those levels? Thanks. ... Yeah, Chris, it's Michael. Thanks for the question. Yeah, I mean, really, you know, as I mentioned, the inflation for 2024 is all being pressured by beef, and the rest of the basket is flat to deflationary. So, you know, you know, beef is the driving force of our expected inflation next year. Thanks. Your next question comes from the line of David Palmer with Evercore. Your line is open. Thanks. Wanted to get your thoughts on how you're thinking about pricing in this environment. It's kind of a mixed bag out there. A lot of people will be looking at the consumer environment and be cautious about pricing. But in the past, you've talked about your relative value proposition versus peers and looking at wage inflation, which, as you've noted, remains mid-single digits into 2024. So, you know, what are the primary governors about how you're thinking about pricing going into this type of environment? Hi, David. Go ahead, Jerry. David, it's Chris. I just was going to jump in and talk about the fact that we do have... You know, we're carrying this 5.5% increase that I talked about earlier. You know, we do really want to focus on the core wage pressures that are out there, and those are mitigating. We'll be mindful of that. There is also this beef inflation that we have to consider as well. Our price increases, though, have typically been focused on the core, keeping up with wages. That's, you know, likely how we'll focus in the future. Got it. And in the past, you know, long-term rule of thumb has been that labor hour growth can be about 50% of traffic growth. Do you think—you know, at times it's not been like that, but is that a good rule of thumb coming into this year? Or could you find, a lot of companies coming out of COVID, you know, there's been inefficiencies that have happened, you know, in terms of the number of workers, and the, and the amount of hours per worker is getting better now. And so with that, efficiencies and whatnot, I'm wondering if you could find maybe another gear in terms of a labor efficiency, beyond that rule of thumb. Hey, David, it's Michael. Yeah, I think that's something we will be looking at going into next year, into next year. Obviously, this year, labor hours are operating separately than our traffic growth, and I think going into next year, you know, we may see a return to that normal, you know, algorithm that you referred to, or we may also see that, with, you know, people staying in their jobs longer, that, you know, productivity improves and, you know, maybe there's an opportunity, you know, as you said, to get some efficiencies in there. And, maybe it doesn't grow at that 50% level. We've never been in this situation before. Coming out of a pandemic, coming out of a labor shortage, now to a staffing level that we feel very good with, you know, with the growing traffic that we have. And so we'll just have to wait and see what happens, but I think we're optimistic. Thank you. Your next question comes from the line of Andy Barish with Jefferies. Your line is open. Hey, guys. Just one quick follow-up and then a second one. On the beef side of things, do you have anything contracted at this point, or is it still too early given some of the premiums out there? Yeah. Hey, hey, Andy, it's Michael. We do have some of our beef locked into the, you know, into 2024. Not a, not surprisingly, not a huge amount. The packers, you know, are, you know, nervous to get too far out there. We certainly have a lot of our supply locked up, which we think is very important, at this point. But, as far as fixed price contracts, we do have some. I'm not going to get into the specifics, you know, there for competitive reasons. But, you know, our purchasing department has done a great job, you know, where appropriate to lock in prices while also making sure we have the supply. Got it. And then just in terms of thinking about 2024, and some other drivers, other than obviously the things you guys do really well day in and day out, on the top line, is there still, you know, kind of bump out or remodel opportunity? I think you mentioned, you know, to-go as an opportunity. And then, on the tech implementation, in terms of Roadhouse Pay, is there something there that you can get, you know, more out of, or is it really, you know, kind of getting you a faster table turn, which is enough to help, you know, help drive more traffic through the restaurants? Hey, Andy, it's Jerry. Yeah, I think all of those are factors in our continued growth on the revenue side. Bump outs, we continue to look at investments in our current and existing buildings to be able to, with expansions and different things, driving our to-go business and continuing to focus on that ease of pickup, has always been a factor as we continue to get better at it. So I think all of those factors, getting speed at the host stand and getting our table turns, and like you said, all of that stuff, we just got to keep hustling to drive those top-line sales. And that's kind of a key component for us. But thank you. Thank you. Your next question comes from the line of Gregory Francfort with Guggenheim. Your line is open. Hey, thanks. Thanks. I had two questions. The first was just, Yeah, I know it gets talked about a lot, but just this question of getting back to 17% margins and something in that range. You know, I think over the last four years, your development costs are maybe 25%, your AUVs are up 40%. Do you want to, do you target a margin percentage or do you target a return? I mean, I guess, like, I would think that you could get to similar returns on lower margins, and I'm just wondering how you're thinking about that. Thanks. Yeah. Hey, Greg, it's Michael. Yeah, you are right. Our investment costs have gone up and as have our, you know, our sales, both on, you know, from a pricing standpoint and number of guests served. So we do target a mid-teen IRR when we're looking at new stores, and we are still achieving and really, you know, beating that goal on our openings, even with the higher investment costs, and, you know, with the margins, where margins, you know, and where profitability is today. So we feel very good about our opening pipeline. We wouldn't just be opening restaurants for the sake of opening them. You know, we wanna make sure they're doing high volumes and continue to generate great, you know, return on investment for us. The goal of getting back to 17+ on the margin side, how important is it to show some traction on that over the next 12-18 months? Do you guys view that as an important component of the story? Yeah, I mean, we've been talking about that for a little bit, and absolutely. If beef turns and helps us out, that will be a huge piece of it as we continue to protect those top-line sales and target that move in that direction. We need a little bit of help on the beef side, but I think from our sales and all the other controllables that we have in place, we will continue to move in that direction. Thank you, guys. Appreciate it. Thank you. Your next question comes from the line of Jeff Farmer with Gordon Haskett. Your line is open. Thank you. Just a quick clarification and a question. First up, on the clarification, I think you said you're running with roughly 5.5% menu pricing in Q4. But what would pricing be in Q1 and Q2 with no additional price increases? Yeah. Hey, Jeff, it's Michael. Yeah, Q1 would be 4.8%. Q2 and Q3 would be 2.7%. Okay, that's helpful. Bigger picture question, the main question here is that you shared with us your thoughts on the casual dining consumer on last call, sort of some of the pushes and pulls you are seeing in terms of average check and maybe some trade down from other concepts into the Roadhouse concept. What is your updated thinking on the casual dining consumer demand backdrop? What have you seen in terms of either check management at Roadhouse or potentially customers from other concepts trading down to a better price value at Texas Roadhouse? Yeah, I tell you, we're very happy with our sales and the traffic and the sales overall. So we feel like we're very well positioned if we continue to deliver on our food promise and our service and hospitality that we're winning that fight. Our food tastes great. I think the consumer is telling us that they want our food. From what we can see from our traffic, it hasn't slowed down for us technically, if you look at the rest of the industry. So we believe that the consumer is telling us to keep doing what we're doing. We just need to be able to serve more of them all week long. And so that's exciting, good news for us. You know, we have people that trade down, and we... I actually believe that we have a lot of people that trade up from that hospitality side of the business. So, we're positioned very well to continue to maintain those sales. Jeff, it's Michael. Yep. From a mix standpoint, we actually probably saw a little bit of sequential improvement from Q2 to Q3. We had about a four percentage point of negative mix in Q3 versus about 1.2% in Q2. Most of that negative mix, the majority of it, is still coming from the alcohol category. Probably think that'll be with us through the end of the year. All right. Thank you. Your next question comes from the line of Chris O'Cull with Stifel. Your line is open. Thanks. Good afternoon, guys. My question's about the trade-off between traffic and profitability, and I understand that there were some one-time costs this quarter, but the current flow-through rate, I guess, has been lower than prior years, and the price increase I think you guys took in October here seems like it's at a level that'll probably have a minimal impact on traffic, but also not really provide the margin benefit to get back to that historic level. So I'm just wondering, Jerry, if there has been a debate internally or consideration for kind of raising prices more or sacrificing some traffic growth because it would seem the low flow-through rate would also be frustrating for operators who appear to be working harder for less. Yeah, I mean, that's a great question. We do internally think about that. The protection of the top line is always a key component. It's a little more expensive to do business. Again, we do believe at some point, the beef deflation maybe someday will help us in that direction. I wanna be careful. I want us to be seen as a value concept, as always, as we fight for that segment. But I think overall, it is always on our mind in a conversation of how can we be more efficient? How can we be more effective on that profitability side? But we have to do right by our employees, our guests, and our holders. But it is a conversation of depth often. Your next question comes from the line of Jeffrey Bernstein with Barclays. Your line is open. ... Thanks. This is Pratik on for Jeff. Just wanted to pivot to Bubba's. Jerry, how would you assess the current status of the brand? And, you know, how do you think about the growth in the future? Is there confidence internally about accelerating? And, you know, if Bubba's is perhaps not the second concept in your portfolio, would you ever consider M&A for future growth? Thanks. Well, we're definitely excited about Bubba's future, and we are absolutely committed to its growth. We do view it as our second brand. We have the right operators. I've done a lot of work in the last 24 months to put the head of a concept and supporting people around that leader. We just added our first regional partner to the team. We're very excited about what we're doing on the food and the service environment and the leadership. So we are definitely committed to Bubba's. The sales are continuing to show through. It is producing the revenue that we're looking for, and we know it has the ability to turn the profit that we want. So yeah, we're very excited about the Bubba's concept. And, you know, the other question, I really can't answer at this time. We're focused on our brands, and we'll see what happens in the future. Appreciate the color. Thanks so much. Thank you. Your next question comes from the line of Andrew Strelzik with BMO Capital Markets. Your line is open. Hey, good afternoon. Thanks for taking the questions. I guess my question is that, I'm hoping you can talk a little bit more about the broader, you know, unit growth environment. It's certainly encouraging to see you accelerate the development pipeline into next year. But in terms of things like, supply chain and delays and permitting and build costs, could you give us a bit of an update of what you're seeing? Or are you seeing, some easing in those, factors as well? Thank you. Yeah, the supply chain is continuing to stabilize, I would say, overall. From that, the permitting, we've kind of learned and adjusted our timelines to how it takes it. And part of the plan to spread it out through the year helps us with that, and it's taken a significant effort to get to where we can open more restaurants all throughout the year versus kind of jammed up in the beginning and the end. So yeah, there's been some planning around that. But overall, we've got a real strong pipeline for 2024 and into 2025, and we're continuing to look beyond that. And we're excited about if we look at what we're doing right now and what we've got on the books for over a 12-month period, it's very exciting. Great. Thanks a lot. Thank you. Your next question comes from the line of Joshua Long with Stephens. Your line is open. Great, thank you for taking the questions. Jerry, when thinking about the unit development environment, I imagine that all... It's nice to hear that the supply chain side is starting to normalize or continue to normalize, rather. But can you talk about some of the friction points that you are seeing? Is that still on the permitting side? Is it equipment? Just anything else that you could share in terms of just, you know, what drives the ebbs and flows of unit development as you think about what is otherwise a, a relatively strong pipeline going out into the out years for your, for your brand? Well, I mean, I think we're, I think we're doing good. The trades maybe. Again, just working out the timeline of what's happened in the last couple of years, and I think we've done a really good job to get projects lined up. I think now we know a little bit better of the timeline to get the trades set up to get the jobs going and done. A lot of work there. I feel very comfortable. There are a few things that get a little bit tight on some of the parts. Some of the bigger equipment, ice machines, things like that, we get a little bit concerned about. I think right now, we've got enough inventory to accomplish all of that. Even our millwork, which is our furniture, can be a little tight at times with this many openings. We've been working really hard with our vendor partners to make sure we have the materials and the equipment and the trades to do the job to get these stores open and obviously maintain our existing buildings. We've definitely seen some service challenges and even parts, but I think we're working through that. Like I said, maybe sometimes we have to buy a little more equipment than repair, but whatever we gotta do to make sure the operators can get their businesses open, or we have options, and we try to execute it at every level on whatever we need. Thank you. Thank you. Your next question comes from the line of Sara Senatore with Bank of America. Your line is open. Great. Thank you. And I know we spent a lot of time talking about margins, but I do have a few, just two follow-ups. The first is on, you know, you mentioned, you know, your purchasing department doing really well with locking in prices. Could you give a little more color, like what that was? I know beef is typically harder to lock in. Were the benefits in from some of the other commodities in your basket? And then, the second question is: Could you just talk a little bit about the margin structure for off-premise or to-go versus dine-in? It looks like your mix of to-go was pretty stable year-over-year, and I think part of what has been, you know, maybe upward pressure on labor hours has been shifting back to more dine-in. To the extent that that wasn't the case, is there anything you can kinda talk to about what a stable mix might mean going forward in terms of labor hours or just margin structure overall? Thank you. Yeah. Hey, Sara, it's Michael. I can touch on those. So certainly from a, you know, purchasing standpoint, you know, it, it's largely around beef, but it is everything. And, you know, it's knowing when to, you know, when to lock in and knowing when to be buying on a formula basis, and, you know, what weeks to maybe go a little bit heavier into the buying. So just the fact that they have their, you know, fingers on the pulse of what's going on there, and, you know, doing everything they can to, you know, to time that as best they can with the knowledge of how busy we are and making sure that the supply is there first and foremost. But that goes for all, for, you know, all items in the basket. Just having those long-term relationships with our vendors, treating them right, being good partners with them through COVID, really pays off now when it comes to, you know, making sure we have what we need, you know, going forward. As far as margins, you know, in the restaurant, you know, dine-in versus to-go, you know, I can take the expenses and allocate them to different areas and give you different answers. The easiest way to go about that is if I look at a Texas Roadhouse with a busy dining room and look at it, you know, with to-go levels pre-COVID or today's higher volumes, the margin dollars, it's a no-brainer, are much higher, and then the margin percentage is slightly higher. So it is a benefit from a margin percent to have these higher to-go volumes. You, you're getting leverage in different areas. You are right that, you know, as we see more of our traffic, you know, over the last year, shifting back into the dining room, there is a labor component, you know, to that, and where you have to be, you know, staffed to serve those guests. And so that also plays into what labor may look like going forward. If we grow to-go more than dine-in, maybe you don't need either—maybe, you know, you maybe you don't need as much labor, as you would to serve more dine-in guests. So those are the things that we, you know, again, we look at, and every restaurant's gonna be a little bit different as far as, you know, what opportunities they have and the impact of growth on them. Thank you so much. Your next question comes from the line of Dennis Geiger with UBS. Your line is open. Great, thank you. Recognizing it may be early here, but curious if you could comment at all on 2024 restaurant margins, directionally, at least relative to 2023. I know you shared some of those comments as we've gone through the year for this year. Curious if any comments there or even specifically, you know, the COGS piece in 2024, thinking about that relative to 2023. Anything to help sort of level set us at this point? Thank you. Yeah. Hey, Dennis, it's Michael. It's a hard one to fully answer. There's a lot of things at play. What, you know, what side of the range is on our inflationary guidance is that, you know, you know, where we might land and what type of pricing we take. If you want to take an assumption of moderate pricing going along with what we already have in a positive macro environment, we, you know, I think the math would play out for, you know, for some opportunity for overall leverage in restaurant margin percent. You know, the dollar is continuing to grow, certainly, but the percent's moving in the right direction. Whether that's, you know, every line or, you know, we shall see it again, going back to what level, where in those inflationary ranges we might fall. Appreciate the color. Thanks, Michael. Your next question comes from the line of Brian Harbour with Morgan Stanley. Your line is open. Yeah. Thank you. Maybe just to follow up on that also, as you think about G&A next year, you probably don't have a budget yet, but any... Should we expect kind of normal inflation in that line? Any kind of special projects you think will add to that, or just any high-level comments on that part? Yeah, Brian, it's Michael. Yeah, you are right. That's still, that's a process that we, you know, we continue to go through of setting those, G&A budgets for the year. But, I, I do think it's a continuation of our, our normal plan of wanting those G&A dollars to grow at a, lesser rate than our revenue is growing. And so, you continue to get a little bit of leverage on that G&A as a percent of, you know, revenue, maybe, you know, not a dramatic change. We've obviously seen that G&A percentage come down, quite a bit and, you know, that could continue into 2024, you know, as well. Okay, great. The commodity inflation outlook you laid out for next year, how... You know, would you characterize that as conservative at this stage? You know, how much do you think you have visibility on, especially the beef side? I realize the kind of, you know, the wild card in the beef market is just demand and how that plays out, but how would you, you know, characterize your visibility relative to maybe prior years? Yeah, I mean, I think, you know, we're taking a, you know, a middle-of-the-road, you know, conservative, you know, look at it, a realistic look at what, you know, what is going on. I think certainly, again, our beef experts are giving us their best thoughts on where things, you know, you know, will be. But you're right, there are a lot of puts and takes that can move things, where retail demand, you know, comes in. I think it's, you know, very much clear that supply is moving down. We'll just see where the demand goes. So there is a lot that can move around, but we've given you our best realistic thoughts at this time. Okay, thank you. Your next question comes from the line of Jon Tower with Citi. Your line is open. Mr. Tower, your line is now open. Your next question comes from the line of Brian Vaccaro with Raymond James. Your line is open. Thanks, and good evening. Just back to the sales performance. You obviously mentioned the strong comps, and they moderated through the quarter, but then they picked up pretty nicely in October. Just curious, is there anything to glean from your data that could shed light on what's driving that improvement? Any outsized strength in a weekend, weekday, or regional, or any changes in consumer behavior you might be picking up? Yeah, Brian, it's Michael. I'll tell you, when I look at the data through the, you know, the Q3 and in October, it is very consistent, whether I look at it by region of the country, day of the week, hours within the day, older stores, newer stores, high volume, average stores. It was very consistent as it had been, you know, has been for a while. So that, you know, makes us, you know, feel very good about the trends that we're seeing, you know, right now. So, you know, we just continue to do what we do, and, you know, we're, you know, the guests continue to reward us for that. Okay. And then just a quick follow-up, if I could, on technology, and I wanted to ask about Roadhouse Pay in particular. I guess, how much time is that trimming off the typical transaction? And have you seen any quantifiable impact in table turns or throughput that you might be able to share? Well, yeah, I will tell you that we're system-wide. It's a big win for the consumer, we believe. It's hard to quantify the exact amount, whether it's a minute or two or that. I think some people, when they're ready to pay, I mean, that option being right there on the table, we believe absolutely that it is a quicker way of going. So, I believe that it's been positive for us. It's been very good feedback, not only from our restaurants and our servers, but from the consumer. So, yeah, that was a really big win for us. I do believe it does make us faster. All right, I'll pass it along. Thank you. Thank you. Your next question comes from the line of Jon Tower with Citi. Your line is now open. Hey, just one quick one. Can you clarify or make—I think I have the pricing waterfall sorted out, but exactly what the price number in the Q3 was? Sure. We had 5.1% in the Q3 of 2023. And then, you know, with thinking about price into 2024, is there a way to kind of put guardrails around the earliest that we might see some additional pricing coming through? We typically, you know, take pricing in early part of the Q2 and the early part of the Q4. So I would imagine we will stay true to what we have done in the past years and stay with that schedule. Great. Thank you. That's all for me. Your next question comes from the line of Drew North with Baird. Your line is now open. Thanks. I had a follow-up question on one that was asked earlier related to the 2024 margin outlook. I thank you for the perspective on pricing, and I recognize the uncertainty on where you may land in the various inflation ranges. But I guess, is there a break-even level on traffic in the positive macro scenario you mentioned, that you're thinking about to hold or expand margins next year? I know you're often focused on growing the margin dollars per week, but how are you thinking about the margin percentage on a year-over-year basis in that positive macro scenario, and specifically, the potential traffic needed to reach that level? Yeah. Hey, Drew. It's, it's Michael. I mean, that is unfortunately a very, you know, tough one, one really you can't answer because, again, there's just too many moving parts. You know, the level of traffic versus the level of pricing that, you know, that you need to grow margins and how much you're growing margins. Certainly, traffic always helps, but the pricing flow through whatever additional pricing we take, you know, plays in a lot. I don't think you need... I think, you know, along with everything else, modest traffic, along with modest pricing, you know, middle-of-the-road guidance should lead, you know, the math should play out to show you, rest aurant margin expansion on a percentage basis into 2024. Okay. That, that's helpful. And then one more from me. Just looking out to 2024 and beyond, do you see opportunity to push that 30 gross openings range higher and maintain a kind of store growth in that 6% level for the next several years, or how should we be thinking about that? I'm just trying to frame up the opportunity to push the number of openings higher versus the expectation for that growth rate to moderate over time. Yeah, thank you for that. We are gonna stay focused on building the right number for us. I think we target that high 20s to low 30s on the two concepts of Roadhouse and Bubba's 33. That works very well for us, and we can efficiently do that not only for our operators, but just the execution for the guests that are coming in at the beginning. Yeah, we feel good about the pipeline. We'll stay very true to that same number for the two concepts and target that as we continue to move forward. Thank you. ... Thank you. Your next question comes from the line of Jim Sanderson with Northcoast Research. Your line is open. Hello. Thanks for the question. I wanted to focus a little bit more on the issue of mix. I think you reported a little bit of progress on mix from second to Q3. Seems to me that your mix could be flattish or almost positive in October. Is that the right way to look at it, based on the pricing and comp you reported in October? Well, with the comp, so our pricing, well, we have-- well, we're gonna have 5.5% pricing for the Q4. Well, our pricing, our pricing action this year occurred three weeks earlier than it did last year, so we had 6.9% pricing in the first three weeks of the quarter, and we'll have 4.9% pricing in the last ten wee ks of the quarter. So, while mix- Under- ... probably still is moving in the right direction, it wasn't that different than what you were seeing the last several months. Very good. Just a follow-up question on the pricing you took. Any feedback on how your competitors either reacted or was this you reacting to potentially peers in the steakhouse category already having taken their prices up? Just a little bit of texture on the competitive context. Yeah. Yeah, Jim, I can't tell you necessarily what our competitors have done in reaction to it. I mean, you know, we have our pricing conversations several months before we actually take, you know, the pricing. It's a process you have to go through, and we certainly, you know, evaluate the health of our business, how our stores are doing, and, you know, where we're priced, you know, relative to some of our peers. So we take those things into account when we're doing it. But as far as others' reaction to that, I don't know. All right. I'll pass it on. Thank you very much. Thank you. Your next question comes from the line of Lauren Silberman with Deutsche Bank. Your line is open. Thank you very much. I just wanted to clarify on the October trends. To what extent did you benefit from price taking, being taken earlier this year? Is it about the 200 basis points, just as we think about underlying trends and extrapolate it? I mean, I think that's... I mean, certainly we got the benefit of that pricing for three more weeks. In- instead of having, you know, you know, where we'll have 4.9% the rest of the quarter, you know, so there's a 60 basis point benefit on our overall pricing for the quarter. Okay. It looks like comps ease through the quarter, with December the easiest lap year-over-year. Is there anything we should consider in terms of cadence in the Q4 as we think about the lap? Yeah, I mean, nothing too much to really point out. You know, we, you know, we did talk about last year that, you know, late in December of our December period last year, there was that cold weather, that impacted, you know, much of the U.S., and, you know, that, that caused things to slow down. So, depending upon what happens this year, that could be, an opportunity for us. And there is also maybe a slight benefit coming at the, at the end of the year from, you know, Christmas moving from, Saturday, Sunday to Sunday, Monday. You could get a little bit of a benefit of that, in December. Shouldn't be a huge benefit, but it is a positive. Okay, great. And then just another follow-up on the restaurant margin expectation for 2024. It sounds like the base case, all else equal, is for margin expansion in 2024. Can you just talk a little bit more about the puts and takes across the P&L, just with 5%-6% commodity inflation? Where are you seeing the op portunity for leverage? You know, I, again, I think it goes to, you know, when you talk about the level of pricing we have and, you know, guiding to 4-5% wage inflation and maybe hours don't grow as dramatically, maybe there's some opportunity in labor. The other operating, I think always again, you get some benefit from that menu pricing in an environment where a lot of those costs in there are service-based costs, and it seems like a lot of those have plateaued, and so you can get some, you know, leverage there as well. Labor and then rent always seems to give us a, you know, a little bit of leverage as well. Pretty much in all areas, I think that cost of sales, you know, is a little bit of the X factor. Great. Thank you so much. Your next question comes from the line of Jake Bartlett with Truist. Your line is open. Hello. Thank you so much for taking the question. Mine was about your labor and your approach to labor, and this builds on, I think, an earlier question as well about your focus on kind of traffic over, you know, efficiencies and kind of driving margins. You know, labor per, per operating week has been growing, a little bit less than traffic, but still growing really, really strong. Is there a point where you feel like you're gonna have caught up, you know, have the staffing levels that you need, so that you can get more leverage, you know, maybe leverage the incremental sales a little bit more going forward? You know, should we think of the labor performance over the last year and even, you know, two years as being more of a catch up on the number of people in the stores and we should get more labor leverage going forward? ... Yeah, I think this is Chris. I do think that Michael's kind of addressed that a couple times, that we think there's an opportunity there, and our turnover is down. It's to pre-pandemic levels, and so we feel good about that. We're staffing up. We have the right staff levels, and we should be able to get some opportunity there. Okay. And then, you know, as I look at your inflation, you know, your guidance for 2024, 4%-5%, I try to marry that with the uncertain macro background and maybe even. I'm sorry, I jumped on the call a little bit late, but, you know, does that imply. It seems to me it would imply a pretty strong macro environment in 2024. Is that kind of how you're thinking about? I mean, what's the kind of macro backdrop that you're kind of presenting this guidance from? Well, this is Chris again. I think Jerry spoke to that just in his comments, so you may have missed that. Basically, yeah, I... You know, we're not calling for a recession. We're not seeing anything like that in the future. We, we... This would be a rather benign situation, and people are still coming out with..., in spite of whatever has been in front of them. The consumer has come out and enjoyed our foo d and our experience, and we're expecting that to continue. Michael, you may have something. Yeah, Jake, this is Michael. So, you know, we did say, you know, 1% of that is state-mandated increases. But also keep in mind, any wage increases that have occurred, that occurred throughout 2023, we do have to lap those for a full twelve months. You do feel an impact in the next year, in 2024, from things that you've done this year. So maybe the rate of sequential growth continues to decline in wage rates, but you do, you know, still feel raises that you're giving today for the next twelve months. Okay. Last question, and, you know, I'm sorry if it was answered as my first, my first two were, but, you know, it really is more about early 2024. As we think about compares, and I think, you know, investors are trying to kind of figure out the impact of one year versus looking for over longer time periods to get an underlying trend. Obviously the first half of 2023 was very strong, specifically the Q1, and, you know, boosted by lapsing Omicron. In terms of how you view, you know, early 2024, you know, lapping what was going on in early 2023, how do you-- do you view that as a difficult compare, or, you know, or not? I guess there's some kind of concern that you know, trends could be much lower than, you know, expected in the Q1 just because of what you're lapping against. Yeah, Jake, again, that, you know, is a, you know, a hard one to fully answer. I mean, our operators are gonna take the mindset of continuing to serve more guests. They're, they're gonna be well-staffed. They're gonna have the product they need to serve their guests, and, and we will do everything we can to continue, you know, to, to grow. And that's the mindset we, we go into any year with, and, you know, we will see what happens, you know, as that happens. We're getting store weeks, too, from the stores that are opening in the Q4. Then we talked about, you know, a number of stores opening in the Q1. Great. Thank you so much. Thank yo u. This concludes our Q&A session for today. I would like to turn the call back to Jerry Morgan. Thank you all for joining us tonight. We appreciate your time, and have a great evening. This concludes today's conference call. Thank you for attending. You may now disconnect.