Brinker International, Inc. F1Q10 (Qtr End 09/23/09) Earnings Call Transcript

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2009-10-20 14:38:08.0

Tags: Goldman Sachs Group Inc., Call Transcript, Earnings, Promotion, Brinker International Inc., Sales Strategy, Food & Beverage, Sales Force Management, Sales, Manufacturing, Seeking Alpha

Question-and-Answer Session

Operator

(Operator instructions) Our first question coming from Steven Kron. Please announce your affiliation and then pose your question.

Steven Kron -- Goldman Sachs

Hi, thanks. Goldman Sachs. I guess first to start off with -- on the sales front. Can you talk -- get a little bit more granular as to how the quarter shook out from a sales perspective, maybe August and September, compared to what you shared the first few weeks of July on your last call? And maybe you can comment on the trends to date in October, given that you have now re-launched this promotion that seemed to be so successful.

Chuck Sonsteby

Well, Steven, if we went down period by period in the first quarter, July was down 8.8% for Brinker; August was down 3.1%; and September was down 5.4%. So we did see some recovery from July into August. And then we got off the 3C and went to a more full-price promotion and gave back a little bit of that same-store sales gain. And as to October, I really hate to make any comment just because -- rather not talk about that.

Steven Kron -- Goldman Sachs

Can you talk about the changes clearly a little bit different from a food perspective on this newer promotion. What do the margins look like in the reintroduction versus perhaps what they look like the last time around?

Chuck Sonsteby

Well, we are trying to get a little bit smarter after having the experience of going through it one time. So we are working hard on getting the labor back in line. This is the second time our operations team has had a chance to go through this promotion. So that replication is going to help them a little bit more trying to gain that back. So we would anticipate both some changes to the menu and also some labor efficiencies will help us a little bit more in terms of profitability this time around.

Steven Kron -- Goldman Sachs

Okay, so it wouldn't require the same level of traffic lift per se to get the margin dollars that you seek to achieve?

Chuck Sonsteby

It will not require that. But I think what we will need is somewhere between mid-single to low single-digit declines to kind of hit our expectation. And Todd, is there anything --?

Todd Diener

Hi, Steve, this is Todd. One of the other things I want to comment on the change in items that are being offered in 3C2, as we're calling it, we also took advantage of spreading the items that hit the kitchen so that one particular station doesn't get an overabundance of orders coming in. So while still having a very broad and very appealing offering to our guest across the 3C offerings, it did help us execute better or it's currently helping us execute better by not having so many things going to one particular station. And it's all about muscle memory as well. As we get more reps under our belt and our teammates in the heart of the house and in the front of the house, in terms of understanding how to pace 3 Courses, we are getting much more efficient and better at executing it overall.

 

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