Red Robin Gourmet Burgers Inc. (NASDAQ:RRGB) Q4 2019 Earnings Conference Call - Final Transcript

Feb 25, 2020 • 05:00 pm ET


Red Robin Gourmet Burgers Inc. (NASDAQ:RRGB) Q4 2019 Earnings Conference Call - Final Transcript


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Good afternoon, everyone, and welcome to the Red Robin Gourmet Burgers, Incorporated Fourth Quarter 2019 Earnings Call. [Operator Instructions] During the course of this conference call, management may make forward-looking statements about the company's business outlook and expectations. These forward-looking statements and all other statements that are not historical facts reflect management's beliefs and predictions as of today and, therefore, are subject to risks and uncertainties as described in the safe harbor discussion found in the company's SEC filings. During the call, the company will also discuss non-GAAP financial measures. These non-GAAP measures are not prepared in accordance with generally accepted accounting principles, but are intended to illustrate an alternative measure of the company's operating performance that may be useful. A reconciliation of the non-GAAP financial measures to the most directly comparable GAAP measures can be found in the earnings release. The company has posted its fiscal fourth quarter 2019 earnings release and supplemental financial information related to the results on its website at in the Investor Relations section.

Now I would like to turn the call over to Red Robin's CEO, Paul Murphy.

Paul J. B. Murphy

Good afternoon, and thank you for being with us today. I'm joined by Lynn Schweinfurth, our Chief Financial Officer; who will review our quarterly financial results and annual guidance. Let me begin by briefly addressing Q4 within the context of our strengthening business. We were encouraged to see our second consecutive quarter of positive comparable restaurant revenue. As anticipated, we achieved this top line performance while intentionally unwinding discounting and with reduced year-over-year marketing spend. You may recall that we allocated more of our annual marketing spend to the third quarter in 2019, when we launched our new omnichannel creative campaign. You can see from our Q4 results that the campaign continues to resonate and drive sales momentum. Importantly, the sales momentum has continued into 2020. We also believe our core business and turnaround process is taking shape as evidenced by improvements in key performance indicators, such as staffing, retention, ticket times and ultimately, our guest satisfaction scores. 2019 was a period of diagnosis, change and setting the foundation. In 2020, we are executing our 4-point plan to accelerate our turnaround and drive long-term value creation for all constituents.

The elements of this plan are as follows: one, recapturing the sole of the Red Robin brand; two, delivering the brand promise; three, telling our story to reinforce emotional connections and core brand equities; and four, accelerating profitable growth. Recapturing the soul of our brand is about clarifying Red Robin's positioning and ensuring that our guest experience aligns with why guests choose Red Robin for their meal occasion. What we learned in Q4 through our research is that our guests defined a Red Robin experience through four criteria that enable them to create memorable moments of connection. These are: one, the flavor of Americana on the menu through gourmet burgers and other favorites; two, the family-friendly and playful atmosphere that connects people not only around the table