Red Robin Gourmet Burgers Inc (RRGB) 2018 Q1 法說會逐字稿

Good afternoon, everyone, and welcome to the Red Robin Gourmet Burgers, Inc.

First Quarter 2018 Earnings Call.

Please note that today's call is being recorded.

And now I'd like to turn the call over to Terry Harryman, Vice President of Finance, Planning and Investor Relations.

Please go ahead, Mr. Harryman.

Thank you, Cody.

During the course of this conference call, we may make forward-looking statements about our business outlook and expectations.

These forward-looking statements and all other statements that are not historical facts reflect our 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, we 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 our 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 our earnings release available on our website.

We have posted our fiscal first quarter 2018 earnings release and supplemental financial information related to the results on our website at www.redrobin.com in the Investors section.

Now I'd like to turn the call over to our President and CEO, Denny Post.

Thanks, Terry.

Good afternoon, and thank you all for joining us today.

After our brief remarks, Guy Constant, our Chief Financial Officer, and I will take questions.

Put simply, our Q1 results were a mixed bag.

While we fell short on sales, we made great strides on our off-premise business.

And as a result, we did take some share from others despite their heavily advertised short-term deep discounting.

We remain confident that our strategy is sound, and we are putting the key building blocks in place to ensure Red Robin's long-term profitability, sustainability and, ultimately, return to growth.

Let me dig into each of those elements a bit further, starting with the sales trends.

Sales growth in this hypercompetitive environment has been tough to come by without relying on aggressive price increases that we've seen from others in the industry.

After our strong sales performance in Q4 2017 when our sales were up 2.7%, we rolled off 160 basis points of effected price this quarter.

No doubt, we also experienced some dislocation, particularly on dine-in traffic from others' deals.

As a result, we chose to adjust our plans accordingly to more aggressively compete for sales, expanding the lineup, and thereby its guest appeal, of our Tavern Doubles to 5 burgers at $6.99 as of the beginning of May.

Again, we choose to focus on driving awareness of our Tavern Double burgers with bottomless fries or broccoli or salad, if you're so inclined, at $6.99 every day, every seat, every guest, whether dine-in, carryout or delivered.

Speaking of off-premise dining, as I referenced at the open, we took significant strides forward on to-go and catering this quarter.

Unlike our challenged dine-in traffic, off-premise growth made it possible for us to outpace the casual dining sector once again, this time by 230 basis points on overall traffic according to Black Box Intelligence.

While this performance was less than our 360 basis point traffic beat in Q4, it was significant nonetheless because it came entirely from growth in our off-premise channels, which were up almost 40% year-over-year.

Growth in off-premise is a key building block of our plan to move from being only a destination to a complete source of craveable customizable burgers.

We're going to do this by going where the guest wants us to be, when they want us and how they choose to enjoy Red Robin, be it in the restaurant or out.

Burger Bar catering is off to a strong start, with only minimal sales support and awareness to date.

We're just again testing television advertising in select high-penetration markets, and we like what we see early on from the results.

With off-premise averaging 9.4% mix in Q1, double-digit mix is clearly within reach as we grow this segment aggressively.

As to our dine-in traffic, we are mining our best-in-class Red Robin Royalty program, now with more than 8 million members and still growing.

Consumer research has shown us we still have an opportunity to better communicate the value of our bottomless fries in all our meals.

We will begin posting competitive online messages to better capture what we call simple #BurgerMath this week.

An example is shown on Slide 7 of the supplementals, which characterizes our value at $6.99 all-in with bottomless fries versus "the other guys'" à la carte pricing, which really adds up fast.

This is only the first of many messages to come contrasting our Everyday Value with others.

The goal is to make it stone-cold easy for our guests to say yes every day to visit Red Robin and to unlock greater frequency and share going forward.

In order to continue giving guests the bottomless value and still continue to deliver the attentive service they expect from us where it matters most in the transactions, we are implementing changes in our service model to offset wage increases we face in our most penetrated high-volume Western markets.

We shifted to a full-service -- sorry, full-team service model in Q1.

And after the initial absorption and adjustments that any change brings, our operators have it just about grooved in.

This had a significant positive impact on productivity, up almost 11% year-over-year as you can see on Slide 8. This provided a strong benefit in the quarter.

In addition to service model changes in Q1, we went after more favorable janitorial contracts and/or in-sourced some janitorial work.

We realized benefits on maintenance from our proactive investment in upgrading equipment and completed the rollout of our new supply chain management system, which makes it easier for GMs to accurately track inventory and waste.

We also reset our organizational structure early in Q1 to reduce G&A in part so we could adequately fund and resource projects that are critical to future growth.

We continue to explore pilot and expand other productivity improvements and service model changes to support to-go and catering through our transformation initiatives, and we look forward to sharing more details of these as the year unfolds.

So as I said, Q1 was a mixed bag indeed, leading to adjusted marketing plans for the short term, all while keeping our eyes on the long-term strategic goals.

In the end, we met our internal expectations for earnings but did so differently than we expected.

We anticipate more volatility in the current quarter, yet still expect to deliver on our year-end earnings targets.

As we shared at our Analyst Day a year ago, we are choosing to play the game differently than others in this sector, taking what we are known for: great burgers, attentive service and affordable abundance, forward in new ways to meet changing guest needs, reimagining our service model and prototypical restaurant design along the way.

There are still many changes ahead for Red Robin as we seek to serve generations to come.

With that, let me turn it to Guy for further perspective on our playbook and details of the quarter.

Thank you, Denny, and good afternoon, everyone.

As I walk you through the highlights of our financial results for the first quarter, please note that the numbers I present are on a recurring basis, excluding special charges.

First quarter of 2018 demonstrated the continued evolution of Red Robin's business model from one that was largely dependent on sales to a business model that has multiple ways to deliver sustained earnings performance and returns on investment.

And as Denny mentioned, it also magnified the very different way that we are operating within our sector and how that differentiated approach is one that is built on the solid foundation of Everyday Value, affordability, long-term profitability and prudent investment of capital.

One of the early fruits of this approach has been Red Robin's extended run of significant traffic outperformance versus the casual dining industry, with Q1 once again outperforming peers on traffic by over 230 basis points.

We also have continued to deliver 2-year outperformance versus our casual dining peers, now tracking up 350 basis points as measured by Black Box.

You may also recall that last quarter, we introduced that we've developed an additional benchmark that compares us to top quartile best-in-class competitors for the entire industry not just casual dining.

And through the end of April, we outperformed this group as well, generating a positive traffic gap of 70 basis points.

We continue to focus on implementing the type of change that we believe is necessary to make our business truly successful.

We are making and will continue to make the important choices around business investments, and we will need to innovate in a way that allows us to fully capitalize on the differentiated position that Red Robin holds with the restaurant consumer.

These actions support our intention to first return to absolute and consistent earnings growth and then put ourselves into a position to allow us to provide growth and returns that one associates with high-performing organizations.

Now to the specific results.

Q1 total company revenues increased 0.2% to $421.5 million, up from $420.6 million a year ago.

Comparable restaurant sales declined 0.9% driven by a 1% decline in average guest check, offset somewhat by a 0.1% increase in guest traffic.

Mix decreased 2%, primarily driven by heavier guest usage of our Tavern value menu and lower nonalcoholic beverage mix.

Overall price, after considering the impact of discounting, increased 1% in the quarter.

Our pricing is now in line with our stated goal of holding price between flat and up 1% to support our goal of driving traffic by continuing to make the Red Robin experience more affordable to our guests.

Tavern mix increased to 13.5% in Q1, again consistent with driving value and affordability to our guests, which contributed to our traffic outperformance versus the industry.

First quarter restaurant level operating margin was 20%, down 130 basis points versus a year ago, driven by the following factors: cost of sales increased 90 basis points to 23.8%, driven primarily by the higher Tavern mix and lower nonalcoholic beverage mix mentioned earlier and the higher cost of steak fries and ground beef.

The impact of mix was a slightly higher driver of the increase in cost of sales than was commodity inflation.

Restaurant labor costs improved 70 basis points to 34.5% driven by significant improvements in hourly labor productivity, offset partially by increases in restaurant manager bonus expense and a small increase in manager labor costs.

In 2017, we made significant investments to improve the payout levels of our restaurant manager incentive programs.

These improved payouts were predicated on a successful pivot to improve labor productivity and to generate better restaurant-level economics while driving improved comp sales.

These changes have helped drive the improved labor productivity that we were seeking, and great credit should go to our restaurant leaders who have so effectively managed through the recent months of significant change.

Other operating costs increased 70 basis points to 13.3%, primarily due to increases in restaurant technology expenses, to-go and catering supplies and third-party delivery costs, partially offset by lower repair and maintenance costs.

Occupancy costs increased 40 basis points to 8.4%, primarily due to higher property taxes and insurance costs and sales deleverage.

General and administrative expense improved by 50 basis points to 6.8% due largely to the home office reset that was completed in late January.

This reset is consistent with our pivot away from being a unit growth-driven organization to one focused on value, affordability and improved four-wall economics.

Costs associated with the reorganization are included as a special charge in the quarter.

Selling expenses were up 10 basis points as a percent of revenue to 4.2% due to increases in local marketing spend and menu costs, partially offset by lower national media spend and gift card costs.

As a reminder, selling expense now includes all marketing activities, including both national and local marketing and media expenses.

Preopening costs decreased $700,000, primarily due to fewer restaurant openings in 2018.

Q1 adjusted EBITDA was $42.4 million, down 7.4% versus a year ago, driven mostly by higher cost of sales and other operating costs, offset by the improved labor expense mentioned earlier.

Depreciation and amortization was 20 basis points higher at 6.9%.

Net interest expense and other was $3.4 million, an increase of $400,000 versus the prior year driven by the recognition of a loss on our deferred compensation plan.

Our first quarter adjusted tax benefit was 21.2%.

Adjusted earnings per diluted share were $0.69 as compared to $0.89 in the first quarter of 2017.

And during the quarter, we recognized 2 special charges, the first related to the home office reset we discussed earlier and the second due to the establishment of a litigation reserve associated with employment-related claims.

Now turning to the balance sheet.

We invested $15.9 million in CapEx in the first quarter, primarily related to investment in technology projects, new restaurant openings and restaurant maintenance capital.

We ended the quarter with $23.7 million in cash and cash equivalents, up $6 million versus where we ended 2017, and we finished the quarter with a lease adjusted leverage ratio of 3.96x.

We paid down a total of $35 million of debt in the first quarter, leaving an outstanding balance of $231 million on our revolving credit facility.

This demonstrates continued progress towards our ultimate goal of maintaining a long-term lease adjusted leverage ratio of 3x.

We also project Q2 adjusted earnings per diluted share to range from $0.55 to $0.75.

Before I close, I want to acknowledge the incredible work of our operators and the resilience that they have demonstrated as they absorb some fundamental changes in how we manage the day-to-day operations within our restaurants.

We know this work has not been easy, but it's been done with great care for our team members and our guests.

I also want to acknowledge the efforts of our marketing and culinary teams who continue to deliver outstanding and differentiated top line results.

At Red Robin, we will continue to prioritize our capital and operating investments based on the incremental returns on capital that these investments will create.

Whether these priorities drive sales, improve margins, reduce expenses, generate EBITDA or distribute capital to shareholders, the overriding filter will be the expected return of that incremental capital or an improved return on capital already invested as it is a focus on overall returns that is most highly correlated to overall improvements in total shareholder return.

With that, I'll turn the call back to Denny for a few final comments before we take your questions.

Thanks, Guy.

I'll be brief.

Before we take questions, here's a hearty shout-out, and a Red Robin YUMMM, to our restaurants, field and home office teams who are working hard to navigate these challenging times.

It is your belief and commitment that makes the pivot to where the guest wants us to be possible.

Let's take questions.

(Operator Instructions) We'll take our first question from Will Slabaugh with Stephens Inc.

I had a question on the guidance.

You said you expected more volatility in the current quarter, I believe, Denny, but said you had confidence in the full year earnings targets.

I just want to clarify that you are also reaffirming your comp guide for the year.

I think it was 0.5 to 1.5.

And if so, what was going to change to improve that comp trajectory as you lap some more difficult comparisons as the year goes on?

Yes.

Well, our only commentary around guidance is the updated EPS guidance for Q2 which is $0.55 to $0.75.

Other than that, we have no other comments on the guidance that we provided in Q1.

As for the second part of your question, in terms of overall comp sales, we continue to believe that affordability is the foundation upon which we can build long-term traffic growth as our primary priority and then overall sales growth as well.

We're always going to have circumstances like we've had here in the past few quarters where the competitive environment accelerates and you get situations like we did where either you see large increases in advertising spend or significant increases in discounting activity.

That's going to happen from time to time, but we continue to believe that that's not a sustainable long-term strategy for the industry.

And we feel the more appropriate strategy for us as a business is to maintain affordability, and we think that'll drive that long-term comp performance that we're expecting.

Let me just add on to that.

Great answer, Guy.

I think the affordability will affect both on-premise and off-premise as people see more opportunity to enjoy Red Robin.

And as I referenced, our catering business is off to a really solid start and a highly incremental business, great guest response so far to it and I think is something that we anticipate leaning into and, as we learn our way through it, continue to see some real upside there for driving off-premise business.

Got you.

And if I could just follow-up on the comp sales.

Can you talk a little bit about the cadence that you saw during the quarter?

I know you guys don't give quarter-to-date commentary, but at least what we'd seen through -- whenever you guys had announced your fourth quarter as we're getting into the first quarter, hadn't seen the data point things downward.

And it seemed like things got a little bit better in March for the industry.

Although I've heard from some on the West Coast that things were a little bit tougher in March.

So any sort of color you can give us in terms of how things went in the quarter would be helpful.

Yes.

You might recall, Will, we talked in February when we had our Q4 call that we indicated that we believed the industry was off to a slow start to that point through.

And no question, the industry seemed to improve somewhat in March and April.

The other interesting fact that you might have noticed in the first quarter this year is we saw a larger gap between sales performance and traffic performance in Black Box than I think we've seen in recent memory, which would imply that the growth in ticket has been as large as we've seen it in any quarter again that we can remember in some time.

And so back to my earlier point about affordability, with our average ticket down 1 point and the industry's average ticket up 3, we've gained 400 basis points of relative affordability versus the rest of the space, which we think actually even strengthens our position as an affordable alternative for the families or the people that will frequent our business in the future.

And so we continue to believe that's the right place for us to be, and we think it'll drive the kind of long-term performance we're looking for.

We'll now take our next question from John Glass with Morgan Stanley.

First, could I just follow up on the comp trends?

Did your -- traffic did get better in the industry in March and I think in April.

Did your trends follow the industry or not?

Yes, we don't have any comment on what -- how our trends performed during the quarter.

Okay.

And then can you talk about a couple of things?

One is just an update on the average check for the off-premise business and maybe break that into kind of the traditional off-premise business and the catering piece, right, because if you blend them, that may obscure a little bit what's happening.

And you talked about nonalcoholic beverage sales declining, and that was an impact on comps and on the COGS.

Is that due to the off-premise business growing so quickly?

And maybe can you isolate how much that was relative to the other factors you talked about?

That's part of it, John, certainly.

There is -- that's not uncommon for us versus others in the industry, just a lower beverage add-on incidents for off-premise business and what you see inside the restaurant.

So that certainly had an impact.

And the combination really of the off-premise -- sorry, the impact of nonalcoholic beverage and Tavern comprised a slightly larger component of the COGS decline than did commodity impact.

So I'd give you an order of magnitude, the 90 basis point impact on COGS, 50 to 55 basis points of that was related to mix versus the actual commodity inflation.

In terms of average check on what we see in off-premise, it can be skewed a little bit depending on which provider or which aggregator that we're dealing with because some have order minimums, which can sometimes inflate the average check.

But generally speaking, average check off-premise for us is fairly similar to what it is dine-in, except for the fact that you lose that beverage incidence that we talked about, which does tend to be a drag.

They do add on a little more, but the off -- the nonalcoholic beverage incidence does make it a little bit lower than what you see in dine-in.

I think that...

So just to be clear -- go ahead -- just all-in, it's lower, right?

So I would say yes, on catering -- yes.

Yes, yes.

Lower than dine-in, mostly driven by the lack of adding on a beverage.

I'm sorry, I think I interrupted you, Denny.

No, I was going to say I don't know that -- basically with our $10, $11 per person average catering right now on our proposition, I'm not sure that, that does skew it all that much one way or the other, so -- but we can certainly look at that small amount, look at it for you.

We'll now take our next question from Peter Saleh with BTIG.

Great.

Denny, I think you mentioned that the -- yes, can you hear me?

Yes, we can.

I think you guys mentioned that the Tavern Double mix was about 13.5% this quarter.

Just curious, what are you thinking in terms of -- what's the ultimate goal here?

Do you think it'll stay around this range?

I think it was a little bit higher last quarter.

I would have anticipated given the promotional nature of the first quarter that the Tavern Double mix would have been a little bit higher than 13.5%.

No, and I -- it's hard to say in terms of kind of what's our -- I think the highest we've ever seen is around 14%, right, in Q4.

Someone's madly showing me numbers.

So 14%, I think, before.

And we have expanded as we showed and in the supplementals, we've expanded to 5 items now at $6.99, which broadens our reach somewhat or we wouldn't be doing it.

We look at the overall balance of the menu, Finest is still holding in at about the same mix that it's had.

And our goal is to have more folks come in over time for those Tavern Double burgers more frequently.

So I don't know, I don't have a magic number that we're striving for, but we are driving to drive traffic and incremental traffic and, ultimately, unlock the frequency.

And so that's why you see us being more aggressive about the competitive comparison to some others and seeking to really hang on and, in fact, grow a lot of our elements of our business, including our lunch daypart.

Great.

And then just the off-premise business, I think you said it was about 9.4%, on its way to double digits.

How should we be thinking of the overall margin profile of the off-premise?

Is it margin-dilutive with delivery?

Or is it margin-neutral?

How should we think about that going forward?

Depends on the channel, Peter.

So the most profitable transaction we have is in online order where the guest picks it up in the restaurant because we save the front of the house labor, and we don't incur the commission charge that we would pay to the aggregator, so...

Which is still the largest part of it, too.

Yes, and -- yes, but about 16% -- in the restaurants that have third-party delivery, about 1/6 of it is third-party delivery.

Now we only have third-party delivery in about 70% of our locations.

So in the restaurants that have it, it's even a little bit higher percentage.

But still, as Denny says, the vast majority of people are calling in or placing an online order and coming and picking it up in the restaurant.

And in those instances, it's margin-accretive.

The third-party delivery, of course, with the commission, makes it slightly margin-dilutive.

You still see some of the savings in front of house labor, but you're incurring the commission charge, which overall makes that transaction margin-dilutive.

Are you -- last question from me, and then I'll hop off.

Are you seeing any of your customers that were coming in for pickup, calling it in, then coming in and picking it up transitioning more to delivery as they realize that the restaurants now deliver?

Hard for us to know that, Peter, because of course, one of the challenges with third-party delivery is we don't have access to the data.

Yes.

Funny, they're not sharing that information with us, yes.

So that is one of the drawbacks of dealing with the aggregators is that they won't share that data, so it's hard for us to keep track of the guest as much as we would like, which is one of a number of reasons why we -- we're testing the self-delivery proposition because we believe not only is it cheaper than using an aggregate but it gives us access to the data as well.

We'll now take our next question from Jeff Farmer with Wells Fargo.

Guy, just to be clear, does your statement about no other comment on guidance imply reiteration of existing guidance?

And if not, why not update guidance as you guys have done in the past?

I think you did it a few times last year.

Yes.

I mean, when we -- I think the policy as it is outlined in our press release was if we believe there's a material change that would cause us to provide a change to the guidance that we would do so.

Otherwise, our comment is that we just stick with our annual guidance.

Okay, so reiteration.

And then controlling for the off-premise contribution to the same-store sales in the quarter, your dine-in same-store sales would be down pretty materially.

And you've been asked this on this call, but any concerns about what this suggests about potential cannibalization of that dine-in traffic?

So dine-in was down about 3%, so that's similar to the trends we saw in the third quarter last year and, obviously, off that improved performance that we saw in Q4.

So look, we are constantly watching that -- the off-premise business to determine its incrementality and to assess if we believe it's cannibalistic to the existing business.

We've not seen data that makes us believe that it is to a large extent, partly that's because, as you can see, with 40% growth in off-premise and now us being a little bit later to the game than a lot in the space, we're just getting back to closer getting our fair share of that off-premise business.

So that perhaps masks or obfuscates somewhat the cannibalization that you might see with any particular guest.

I think as we start to move towards levels that are comparable for our off-premise business to others in the space, it'll become a little bit easier to read the extent of the cannibalization that we might be seeing.

That said, I also think that some of the short-term dealing that we saw in Q1 and the heavy, heavy promotion -- I mean, we saw some of the most dramatic that I can remember, I think we saw something like a $55 million uptick in competitive spending in Q1 alone.

And a lot of that also online, et cetera, was against offers that were only available in the restaurant, alcohol-driven offers, et cetera.

I think there was definitely -- probably a disproportionate dislocation on the bulk of our business, which is associated with the deal seeker going someplace else in this quarter to dine.

And so we're very much cognizant of the fact that we may have to battle for that a little differently and are adjusting our plans accordingly as we go forward.

That's helpful.

And just one more unrelated question.

So a lot of labor cost efforts, and I'm just curious in terms of your ability to essentially track your customers in terms of the satisfaction or even operation quality scores, how happy your employees are, how have these cost control efforts on the labor side impacted all of those parties?

Yes.

We're keeping our ear to the ground very closely on this, and it's a regular topic of conversation.

First, we continue to use Net Promoter Score as a way of measuring impact and have not seen any change there.

We do track other elements and, as we said regularly, talk with and touch base with our field operators to understand where we have opportunities.

That's why I referenced in my script, there is some time and, in fact, it takes a while to get the change effected the way you want it to do.

That's natural.

Some people take to things more readily than others, and we're continuing to work that through with them.

But again, what we're implementing is not new to the world in terms of our team service model, it's just new to Red Robin.

So I'm confident we'll get it over time.

We'll now take our next question from Brian Vaccaro with Raymond James.

I just wanted to circle back on the Q1 labor savings.

And Guy, can you give us a sense of when the team service changes were fully rolled and digested by your teams?

And also, were there any additional labor cost initiatives rolled out in the current quarter?

The move to team service happened -- probably a month into the quarter is when the rollout was effected.

So you had the benefit almost for the full quarter of both the Maestro changes that were made in the fourth quarter and the team service changes that were made in Q1.

So most of the quarter was impacted by those labor changes.

Okay.

And can you give us a sense of the sort of the current quarter and the second quarter?

Are there additional initiatives on the labor front specifically that are planned or maybe even in the back half of the year?

Is there any color you can give us on some of those plans?

I don't know that we'd provide a whole lot more color right now, Brian.

Obviously, we've made some pretty significant improvements in our productivity, and we make a reference in the supplemental materials that our productivity on a year-over-year basis has improved about 10%, so a pretty significant move there.

And so while we do anticipate that there are other opportunities, nothing specific that we're willing to share at this time.

Okay, okay.

And then shifting gears, if I could, to the guest satisfaction scores.

I think in the past, you've shown us those scores, and I think we were getting to an NPS of around 70.

Could you be more specific as to what you saw in terms of NPS scores as you moved through the first quarter?

Is 71 specific enough?

71 and, again, managing to try to reach under 7 on detractors.

And we've seen a variety of performance there, but -- and then we're continuing -- we've seen that or better on catering.

And we're continuing to work to improve our scores on off-premise.

But unfortunately, our line of sight there is really tough with the amount of third-party delivery, the response rate, et cetera.

But we're really working to get better and better on our off-premise NPS as well.

Okay, that's helpful.

And then just last one for me, Guy, on the first quarter, the other operating costs were up quite a bit more than we had expected, at least internally here.

Could you help us unpack that line just a bit?

And I think your expectation for the year was to see some leverage on that line back in February.

But any comments on your expectations for other OpEx would be helpful.

Yes.

We actually lost a little bit of leverage, of course, with our comp sales being down 0.9 in the quarter.

But as you could see, we still had very strong growth on the off-premise side.

And our to-go, the catering supplies and third-party delivery fees are in that other operating expense line.

So when you combine the deleverage on the dine-in traffic and the strong performance, probably even a little stronger than we were expecting on off-premise performance in Q1, that's where you get maybe a little bit more pressure on that line than you might have expected.

(Operator Instructions) We'll take our next question from Stephen Anderson with Maxim Group.

Yes, I have a question about your Tavern mix.

I wanted to also go into Red Robin's Finest, if I will.

Just for comparison's sake, just wanted to ask where the Tavern mix was in Q1 of '17 and also wanted to get [comparable mixes] with both the Finest in Q1 '18 versus '17.

Okay.

Well, the Finest is pretty flat, Stephen.

At right around 9% is where the Finest was, so really somewhat unchanged from where we were a year ago.

As for Tavern, it was around 10.5% in Q1 last year and ran about 13.5% this year.

And what we can truly -- looking back over time, as we went back to talking about greater variety on Tavern, we saw traffic trends improve with that.

So again, we've been getting the benefit of more folks coming in to enjoy those burgers, which is obvious in the mix, but it's also obvious in our outperformance on traffic.

Is that it?

That does conclude today's question-and-answer session.

I'd like to turn the conference back over to Ms. Denny Marie Post for any additional or closing remarks.

Oh, very simple.

Have a wonderful start to summer, everyone, and we look forward to updating you on our progress again at the end of Q2, maybe a new record.

Thank you.

And that does conclude today's conference.

Thank you all for your participation.