Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from Reza Vahabzadeh - Barclays Capital.
Reza Vahabzadeh - Barclays Capital
On the marketing spend in the quarter and your initiatives on that front, do you have any visibility as to whether the spend on Super Bowl and the other activities, if you have any tail on those marketing initiatives here in the second quarter in terms of actual traffic count?
Nelson Marchioli
We were very encouraged by the promotions themselves. They exceeded our expectation. But I think it's too early to make a call on the tail, as you put it. We clearly continue to see the benefits, but I think it's too early to make that call. I think that'd be a great question for the third quarter.
Reza Vahabzadeh - Barclays Capital
And then on the cost of products, obviously that was off quite a bit from last year. Was that mostly because of commodity costs coming down or was that because of price mix? How should we think about that?
Nelson Marchioli
You should think about it as mix. We were very successful in our menu management and product mix efforts in steering our promotions toward the Grand Slam, which is one of our most profitable items on the menu and, frankly, the most popular item on our menu. So a combination of terrific purchasing and forward buying as well as great leadership on the menu management side to make sure that it flowed through extremely well.
Reza Vahabzadeh - Barclays Capital
So maybe a 50/50 contribution from mix and lower cost, would that be fair?
Nelson Marchioli
I'm not that good. I don't think I'm that good.
Mark Wolfinger
The thing to note there is we started selling the Build Your Own Grand Slam sort of halfway through the second quarter of last year, so we're getting ready to lap those benefits. If you go back and look at the year-over-year over the past four quarters it's been a lot to do with the Build Your Own Grand Slam, because we've had commodity pressures underlying that.
We still have commodity pressures. Commodities were up for us in the first quarter, certainly not as much as we projected in the middle of summer last year and even less than we would have when we put our plan together, but still commodities were up for us so the benefit was really mix, but we do caution you that we're seeing commodity or food cost prices at record lows for Denny's and a lot of that has to do with the Grand Slam and we will be lapping over that benefit beginning in the second quarter.
- To read the full transcript on Seeking Alpha, click here »
