Operator: Good morning, ladies and gentlemen. Welcome to today's Ruth's Hospitality Group Third Quarter 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. Following the company's formal remarks, we will conduct a question-and-answer session. Instructions will be provided at that time for you to queue up for questions.

As a reminder, today's conference call is being recorded. I would now like to turn the conference over to Kristy Chipman, Chief Financial Officer. Please go ahead.

Kristy Chipman: Thank you, [Latana] [Ph], and good morning everyone. Joining me on the call today is Cheryl Henry, our President, Chief Executive Officer, and Chairperson of the Board.

Before we begin, I'd like to remind you that as part of our discussion today will include forward-looking statements. These statements are not guarantees of our future performance and, therefore, undue reliance should not be placed upon them. We would also encourage you to refer to the Investor Relations section of our Web site at rhgi.com as well as the SEC's Web site at sec.gov for copies of today's earnings press release and our recent filings with the SEC for a more detailed discussion of the risks that could impact our future operating and financial results. During this call, we will refer to adjusted earnings per share. This non-GAAP measurement was calculated by excluding certain items.

We believe that this measure represents a useful internal measure of performance. You can find a reconciliation of adjusted earnings per share in our press release for today's call. I would now like to turn the call over to our Chief Executive Officer, Cheryl Henry.

Cheryl Henry: Thank you, Kristy, and good morning, everyone. Our third quarter results demonstrated our team's continued operational excellence in a challenging and dynamic environment.

Our performance also reminded us of how sought-after the Ruth's Chris brand experience is, and how our guests trust our commitment to safety, quality, and the genuine hospitality that our team members and franchise partners have delivered for more than 56 years. During the quarter, we generated solid revenue growth, including a comparable sales increase of approximately 8% relative to 2019. The improvement over 2019 was especially notable given a negative 700 basis point impact from our Boston, Hawaii, and Manhattan markets which, as we have discussed, have not fully recovered from the effects of the pandemic. Excluding these markets, comps were up about 15% over 2019. In terms of margins, we were also able to deliver improvement over 2019, driven not only by strong sales, but also by our operations team and the efficiency initiatives they worked on for the last 18 months.

As far as the fourth quarter to date, I'm pleased to say our comparable sales remain approximately 11% above 2019, excluding the six restaurants in the three markets I just discussed. Embedded in that comp number is softer performance in private dining which has not returned as quickly as our main dining rooms. Having said that, we have recently seen an uptick in enquiries for holiday season events, and are working to convert those to booked events. We also expect to see some rebound in Hawaii in the fourth quarter, and more so early next year as the state welcomes tourists again, beginning in November. As far as the state of the business generally, despite near-term external pressures and uncertainties, we are committed to investing in the long-term health of the business.

An important part of that is ensuring that when our guests return to our restaurants, they are welcomed with world-class hospitality and safety. This requires not only hiring exception team members, but investing the time and resources to train them. Beyond investments in hiring and training, the second bucket of investment is growing our restaurant base. In late September, we successfully opened in Short Hills, New Jersey. We're pleased that sales performance to-date have been better than our system average, demonstrating the enthusiasm guests have for Ruth's Chris when we enter new markets.

To build on this momentum, we will open an additional company-owned restaurant, in Lake Grove, New York, before the end of the year, and are on track to open five new restaurants, in 2022, including one management agreement. We also have a solid pipeline for 2023, and currently anticipate signing additional leases by the end of this year. The third bucket of investment is enhancing our ability to use advancements in data and digital technologies. As you've heard me say before, this effort is focused on three areas for us; enhancing the guest experience, reducing friction in the restaurant, and driving operational efficiencies. To realize the full-scale benefits of this initiative, we have been working to replace old and introduce new technologies into our restaurants.

For example, in the third quarter, we made progress implementing our POS and labor management systems, with a full rollout expected in the first quarter of 2022. In addition to the foundational technology, we've been mining our data and testing several ways to automate restaurant insights to deliver on these priorities. For example, we are testing a proprietary approach to use guest data to enhance the guest experience. The intent is to better understand why our guests visit Ruth's, and make sure each visit is further personalized by our staff. Another example that targets both the top line and bottom line is a [pilot linked] [Ph] to maximizing our capacity in the restaurant, while managing labor hours.

Early results are positive, and we expect a system wide rollout to begin by the end of November. While these technology initiatives may take time to roll out and refine, we're confident that when we reach full scale, they will help us drive sales and operating efficiency through a more productive menu, better labor management, and demand forecasting. Now, it's important to note that all of these investments are possible because of our financial position which has allowed us to make investments in organic growth while returning capital to shareholders. During the third quarter, we repurchased 192,000 shares of our common stock, and we're thrilled to be able to resume buyback as part of our total returns strategy. We also entered into a new credit agreement which not only increased the size of our facility, but also provided us with more favorable churns, including additional flexibility with regard to capital expenditures, share repurchases, and potential dividends.

In closing, we are encouraged by our continued sales momentum and strategic progress. I reiterate, at the core of this success is our team members and franchise partners who have remained resilient and committed to excellence. They have provided an amazing and consistent guest experience, which is the core of what Ruth's Chris must do every day. I will now turn the call back to Kristy Chipman to cover the specifics of the quarter.

Kristy Chipman: Thank you, Cheryl.

For the third quarter, ended September 26, 2021, we reported GAAP net income of $6.9 million or $0.20 per diluted share, compared to a net loss of $5.3 million or a $0.15 loss per diluted common share during the third quarter of 2020. Excluding adjustments, non-GAAP diluted earnings per common share was $0.20, compared to a loss per common share of $0.04 in the third quarter of 2020. Please refer to our earnings release and related disclosures for a reconciliation of the GAAP to non-GAAP net income. Total revenues for the quarter were $104.2 million, compared to $63.4 million in the 2020. Company-owned restaurant sales were $97.5 million compared to $58.6 million in the prior year.

Comparable restaurant sales for the quarter versus 2020 increased 66.8%, and compared to 2019, they increased 7.6%. Five months comp sales were positive 16.3% in July, 1.9% in August, and 3.3% in September. Comp sales dropped to positive single-digits in the last two months of the quarter as the delta variant moves through our largest market. We are pleased that despite the variant, guests felt safe dining in our restaurants, and we averaged weekly sales of nearly 103,000 versus 93,000 in 2019. Franchise income for the quarter was $4.7 million, up 35.1% versus the same quarter last year, while other operating income was $1.9 million.

Overall, restaurant margins during the quarter 2021 were better by 80 basis points, compared to third quarter 2019, despite rising inflation, particularly in food. Food and beverage costs for the quarter were 34.2% as beef prices during the quarter increased approximately 65% compared to last year and were up 47% compared to 2019. Our market basket experienced inflation of approximately 29% compared to Q3 2019 with most of this increase being in proteins, particularly beef, crab and lobster. While this inflation is historically high, we remain committed to serving our guests, fresh Prime aged beef. Given the volatile within the supply chain and our inability to precisely predict cost of goods sold, we will not be providing further guidance for the fourth quarter or next year at this time.

I'd now like to take a minute to address how we are thinking strategically about pricing as we move forward to offset the inflation we're experiencing. We have historically taken price in the 1% to 3% range and this year's pricing to date has been over 4% from the price taken in May and the one we recently did in September. While we are carrying more prices this year, it remains below the inflation levels we are experiencing in the restaurant. With beef prices remaining at high levels, we reviewed pricing again recently and we'll be taking another price increase of 1.3% in mid-November. As I mentioned in our last call, we are thoughtful and surgical with these price increases to ensure we balance profitability with the value we've been known for in the fine dining category and we will continue to approach pricing with this lens.

Our efficiency initiatives continued to benefit us during the quarter with labor as a percentage of sales improving 414 basis points compared to the pre-COVID third quarter of 2019. We began adding an additional manager back into our higher volume restaurants this quarter, and expect to continue to add back on average one manager to most of our restaurants in 2022. Given our year-to-date results, we expect that we will end the year with our labor as a percentage of sales approximately 300 basis points better compared with full year 2019. G&A increased 100,000 compared to the third quarter of 2020 to $7.7 million. This increase was primarily due to an increase in performance based comp related expenses.

Full year G&A is expected to be between $32 million and $33 million. At the end of the quarter, we had $83.8 million in cash and our outstanding debt remained at $70 million. Our cash balance as of October 27th was $84.6 million. With that, let me turn the call back to Cheryl.

Cheryl Henry: Thank you, Kristy.

In closing, we feel very good about our sales momentum. We've taken price to the degree that we can, but make no mistakes we will not jeopardize our long-term brand position for short-term quarterly gains, preserving our brand positioning is critical for long-term success. We also feel very good about our pipeline of new restaurants and the strategic progress we're making in the areas of technology and training. You simply can't deliver solid long-term financial performance without unit growth, greater efficiency and attention to detail within our four walls. This all translates into confidence that we can continue to create value for our shareholders as the virus abates and the economy recovers, and obviously longer-term.

We look forward to the remainder of 2021 and continuing to execute against our plans in 2022. With that, I will turn the call over to questions.

Operator: Thank you. [Operator Instructions] Our first question comes from Nicole Miller with Piper Sandler. Please proceed.

Nicole Miller: Thank you. Good morning. I wanted to better understand the new store opening in the quarter and the commentary around, it sounds like, the sales trends, essentially. And if I'm thinking about the core base, it's a lot of heavy lifting on recovery, some differences maybe in channels of sales, right, lunch versus dinner, things like that, and what people are ordering. And then, of course, some price from inflation in the past few years.

But then you open this store, and it opened at parity, it sounds like, with the core. And I'm wondering how does that inform the development going forward when you see that kind of success? And take us back to the East Coast acquisition and the total addressable market white space that you had envisioned at that time?

Cheryl Henry: Thanks, Nicole. So, I'm going to take it in parts, and maybe pass a couple to Kristy. But I think your question generally is around are we optimistic given the opening of this store in a market -- and mentioning the 2019 acquisition of [a lot of] [Ph] Long Island. So, let me just start with, the restaurant we are opening before the end of the year is actually in that market.

And so, I think we were optimistic when we made the acquisition about the marketplace. And certainly, give the performance of Short Hills, which is generally in the Northeast area, and given it was actually over our system average, we feel even more positive about what the potential is for us. And we are doing work. It's hard to say right now, and I won't adjust numbers based on what we shared back then we did the acquisition, but I think there's a couple of factors in play. One is, as we get towards the end of the pandemic and things abate further, what types of population migration are permanent, does that say anything about suburban locations for us, even more so than we may have seen in our portfolio before.

And then looking at some of the work that we were pre-COVID, but we've -- bringing out of the ground now in these smaller footprints, that we can maximize and optimize capacity, and then, so we are looking at all of that. I think it's a great question, thoughtful around potential changes in the marketplace. And we are currently doing that work. I'd say about Short Hills, we were very pleased about seeing it open the way it did. I think just the buzz in the marketplace was exciting for us about the Ruth's Chris brand, they knew were coming, they showed up, they continue to show up.

So, it's early, but I think it's a good sign, in general, for how markets react to Ruth's when we enter a market. So, that was certainly great to see. I think there was something else in your question specific around kind of AUVs, and pricing. And I'll let Kristy speak a little bit to that.

Kristy Chipman: Yes, Nicole, thanks for the question.

I think you were asking about just what's happening within people building their own checks as well as the pricing. So, I mentioned the pricing in my prepared comments, but as far as what we're seeing with guests continuing to create their own experience by adding on, that is definitely still continuing in the areas of app sales side, as well as entrée, compliments, and desserts. So, we are still benefiting in our check not only from the price, but also from the guests who are coming into our restaurant, trading up or into additional items per visit.

Nicole Miller: And then just a second and last question on the adding, I think I heard you say adding one more manager per store. Talk a little bit more about that because you're still, obviously, hitting from a year-end perspective the objective on the labor savings.

It sounds like this would be because of increased demand. Is it one manager that was already in the system? Is it someone new you have to go out and teach the Ruth's culture? Do they work the same in terms of is it in equal hours to the way you established the manager shift previously? What has changed in that profile?

Kristy Chipman: So, let me try, and then Cheryl can clean up after me, if she needs to. So, to date, we've added approximately 20 additional restaurants to our highest volume properties. We are offsetting some of that labor because we have had key hourly labor in the restaurants to accommodate the number of hours we need from a management perspective. In some cases, if they're ready, we'll promote from within, otherwise we will go outside to fill that fifth manager position.

And so, as we look to next year, it really is about sales and traffic returning to pre-pandemic levels as we look to add those managers back into the remaining 50-odd restaurants that we need to do that.

Cheryl Henry: And just let me add this, Nicole, I think your question about -- or these new people, what about the culture is really important. And one of the things I've talked about before, that remains true even coming out of these 18 months or so, is the average tenure of the leadership teams in these restaurants, so if you look at the chef and the GM, you're looking nine and 10-year tenure with our company. And culture lives through people, so having that leadership have such an amazing tenure, and understand this brand, been through a lot of things and come out the other side, it really helps if we're training new people into the culture, that those people still sit in these leadership positions and just breathe the culture of Ruth's. So that's -- it's really one of the things I point out a lot because I think it's so critical to ensuring that the culture and the experience the guest has is consistent.

Nicole Miller: Thank you.

Operator: Our next question comes from James Rutherford with Stephens. Please proceed.

James Rutherford: Great. Good morning, Cheryl and Kristy.

Hope you're doing well. Want to start off on the menu price discussion. How did you settle on the mid single-digit price that it looks like you'll running toward the existing part of this quarter. Everything we've heard from restaurant operators, broadly, is that there's little to no consumer pushback when you're hitting on price. I know it can take time to discern what the pushback actually is, but with commodity basket up nearly 30% why not push more? It seems like maybe this is indication you think this is a temporary -- there's a temporary nature to these higher prices on the [B side] [Ph], but just love your thoughts around the menu price.

Cheryl Henry: Yes, and so we've talked about menu before, and I'll reiterate something Kristy said. So, we've been -- and we've used this term quite a bit and over the years is reluctant prices. I think what has -- what's at the core of that is ensuring that we're not just thinking short-term, but long-term. And this is a -- we're been 56 years at this, and I think when you think about short-term, long-term relative to 56 years, I think that gives you some idea of how protective of the guest experience and the value proposition you bring in, so, having said that, we are looking at the impact, and making the right decisions. And we've said this before, we use a lot of data, we review it usually on a quarterly basis, both twice a year, and then quarterly.

And now, we're reviewing it consistently. So, I think we'll look at it again if we need to. I think we feel good with where we are now. And to your point, I think guests have given us the permission to sit between that 5% and 6%, which again is higher than we've ever been. But I think it's strategically and surgically understanding where that price is available going forward.

And so, the way we are addressing it is with a more frequent review, and understanding exactly where we need to be going forward.

James Rutherford: Okay, got it. That's helpful. And then, Kristy, one for you, could you remind us what the monthly average weekly sales were, and it's kind going back, but in the fourth quarter of 2019, I know November and December ramp pretty significantly. I just want to make sure, as we lap those and thinking about the comps so we can get that right.

But more importantly underlying that is, I mean how are your staffing levels and how you think you're set up to accommodate that higher demand in the holiday season?

Kristy Chipman: Sure, so, I'll take the first part. And then if Cheryl wants to come in for the back-half of that question. So, if we look at fourth quarter 2019 of October, we were at [$100,400] [Ph]. We were at $109.7, call it, for November, and $150.5 for December, in 2019.

Cheryl Henry: Again, just on the staffing, so every -- the holiday season comes every year, and every year, months prior to that, the operations team has a plan they implement.

Obviously the environment around labor, and we've heard on every call is a little bit different. We are in a different segment, and so, as we look at the -- our average hourly wage, and so forth, if that helps us, but we've implemented the same plan this year to ensure that the restaurants are staffed. And I'm not going to say it's easy and it's not more work, and takes more attention from the management team, as it does. But we feel confident that we will have the right team in the building, and we're, as we mentioned, investing to ensure they are trained in the right way, they offer the exact experience that guests have expected from us for years. And so, we're confident as we move through that we will be able staff the restaurants.

And in the areas and handful of markets where we're struggling, we're putting additional initiatives in to ensure that we have the staffing levels we need.

James Rutherford: Okay, that's helpful. If I could squeeze one more in, the marketing and advertising guidance of $13 million to $14 million implies, I think, a bigger fourth quarter than we've seen in recent history for advertising marketing spend, something in the $5 million to $6 million range. What's the source of that step up, and just kind of any thoughts around that, please?

Kristy Chipman: Yes, thanks for the question. So, marketing for us right now is all leaning into the data and digital project that Cheryl mentioned during the call, which is expected to have a greater impact as we've ramped up in the Q3, and now into Q4.

James Rutherford: Okay, perfect. Thanks very much.

Operator: Our next question comes from Andy Barish with Jefferies. Please proceed.

Andy Barish: Yes, hey, guys.

A couple of operational questions just on a few things you mentioned in your opening remarks, Cheryl, on POS and labor management systems, and then capacity expansion efforts. Can you just give us a little color in terms of what that potentially could give you, and layer in as new efforts in -- as you move through 2022?

Cheryl Henry: So, I'll start. And there's only a little bit I can give you, just because of the uniqueness of the work, and we don't want to share it too broadly at this point. Obviously, POS, we're [end-of-lifing] [Ph] on our existing POS system, so moving to a new one was necessary. But it also gives us an opportunity to make sure that we streamline it for our teams in the restaurants, and make sure that we have it set up for the future of the data and digital, bringing all those guests' insight into the restaurants that we need.

From a labor management perspective, we are expanding the use of labor management as we look at what operating hours we should have, when do we want to bring in each position within the restaurant in order to maximize the efficiency we can have, and using the insights on exactly in 15-minute increments when sales are coming in, et cetera, so we can save on the margin still within the labor category overall. So, a lot of it is around how do we get more churns on the busiest days within the restaurant, how do we staff that appropriately, how do we take into consideration people -- no-shows within the restaurant and make sure that we still are able to accept walk-ins, and not have a table sitting empty on our busiest days.

Andy Barish: Thank you. And is the capacity expansion more table management that's seeding utilization or is it actual physical expansion, as you've done with some of the remodels over the years?

Cheryl Henry: It's not physical expansion, it's more the former.

Andy Barish: Okay.

And then just finally from me, if you could, I guess, frame up sort of the 300 basis point labor save at '21 year-end versus '19. But then having a full cadre of additional managers back in the system for the full-year of '22, how should we think about that kind of coming off of that year-end '21 comment you're making, meaning are there other efficiencies that maybe offset some of that manager spend or is that really incremental labor cost we need to factor in?

Kristy Chipman: So, I think there are some efficiencies that will offset that. So, if you start with 300 basis points kind of versus 2019 as where we'll end the year, I think assuming that we carry two to 225 of that into '22, allowing us to do the training that Cheryl mentioned, as well add back the managers, that should be good.

Andy Barish: Okay, thanks for that, very helpful.

Operator: [Operator Instructions] Our next question comes from Brian Vaccaro with Raymond James.

Please proceed.

Brian Vaccaro: Hi, thanks, and good morning. I wanted to just touch on the underperforming markets and kind of -- can you speak to what you're seeing at the local level across Boston, and Hawaii, and Manhattan? I heard your comments on Hawaii, but we're seeing some datasets that suggest Boston is starting to come back to life a little bit. So, if you can just touch on some of those underperforming markets, at the local level, that would be helpful.

Cheryl Henry: Sure.

I'll take the -- this is Cheryl, the most obvious one for us is Hawaii. I think we all thought, so as Hawaii opened, in July, there was actually an uptick and we were running about 70% of 2019 and then the market was shutdown more or less. And so, I think, that's where you see the impact in the quarter. And the expectation is that it is opening back up for tourism in November. And so, we expect they build back at that point.

I think, as I mentioned, we'll see a bit of it in December and then as we go into next year barring any other shutdowns or restrictions to tourism. And so, that's really -- it's very specific to that market. It certainly has an impact. I think it's been the one that's probably had -- as we looked back the most kind of open, closings, restrictions, back to -- restrictions and requirements back to open again, and so, that one's probably been the most volatile. Boston, downtown Boston and Manhattan, I think your comment about is it starting to come back? They've been the two markets that I think reacted the most aggressively from a consumer mindset standpoint as well as kind of return to office.

And so, those two probably have the biggest impact of that -- the dual consumer celebratory guests not being ready to come back yet, as well as having offices. We're going to open and then delayed; then we're going to open and then delayed again. And so, I think as Kristy -- as we've mentioned, we're going into the -- further into the fourth quarter around the holidays and into next year, again barring any other variant or any other Delta issues we expect that we'll start to see those come back a bit more as well.

Brian Vaccaro: Okay. That's helpful.

I was hoping -- shifting back to pricing, I was hoping just to sharpen my pencil a little bit on some of the details there. Can you give us what effective menu pricing was in the third quarter? How much did you take in September? And then where will effective pricing be in 4Q with all these puts and takes, if you're lapping any et cetera? Where will that effective pricing be in the fourth quarter?

Cheryl Henry: Yes, so Q3 effective pricing was 4.5%. We took 2.5% in the May timeframe, mid-May. Our September pricing was 1.6% and our effective pricing for the fourth quarter is 5.9%. And I'll just add you're going to see about a percent of that roll off as we enter the beginning of next year.

Brian Vaccaro: Excellent, very helpful. Last of one, I guess, for me just on labor where are -- can you help us to frame what's -- where are your average staffing levels across your company units versus 2019? And can you break that down a little bit further for us, maybe comment on what percent of units remain materially understaffed? And are they seeing material impact on sales that are being left on the table due to these staffing shortages?

Cheryl Henry: Yes, sure. So, we're at about 90% staffing level right now. And that is -- we're happy with that because we did make the efficiency changes within the restaurant and eliminated to the need for some positions. So, we haven't seen some of the staffing shortages overall.

We do have a handful of restaurants I would say that our challenge right now and particularly in the back of the house. But for the most part, our restaurants' team member size is 90% of what it was before.

Brian Vaccaro: Okay. And you mentioned bringing back an additional manager, once you're -- per store, once you're done with that, how will your average number of managers per store compared to 2019?

Cheryl Henry: It will be down approximately one manager…

Brian Vaccaro: Down about one manager. Okay, great.

All right, all right, I'll pass it along. Thank you.

Cheryl Henry: Thank you.

Operator: Our next question comes from Todd Brooks with CL King. You please proceed.

Todd Brooks: Hi, good morning to you both. Just a couple quick questions around holiday demand. And Kristy you shared kind of the bill that you see and or saw in December fiscal 2019 off of November. Can we maybe talk about that 150,000, how much of that was kind of private dining and holiday group related? And then if we can talk about kind of the timing of when those bookings typically would show up, I know, Cheryl, I think you talked about starting to build here recently. But any color that you can give on -- are the bookings that are happening similar size? Are they smaller parties than usual? Just some color around how holiday is shaping up early on here?

Cheryl Henry: Yes.

And I think I mentioned on the last call, the way people book events have changed. I'm saying I've been here for almost 15 years and it's shifted significantly about when people book versus in prior years. And so, I think, the pandemic and back to office, and a lot of those even further put some variables into the timing of booking. I can speak to what we've seen. And I think that's -- there's what's carried us on private dining to a good extent of social events.

And so, those are hanging in we see people that are smaller groups and family celebrations and friend celebrations have been fairly consistent. We're seeing an uptick on the business side of bookings within the last few weeks. I think it's still a bit early because of the uncertainties out there. I think we'll see over the next couple of weeks or three to four weeks in this kind of four cycle of kind of with a wait and see that some of the Delta implications are, but I think it's early good signs. I will say it's really going to be dependent on how people feel as we get closer to the holidays.

So, yes, I think, again, early good signs. It's good to see some of the business inquiries coming back that we didn't necessarily have before and I think we'll know more over the next few weeks.

Todd Brooks: And I don't know if you can quantify kind of going back to fiscal 2019 that 150,000 a week. What's the complexion of that? How much is made up by this business that we're hoping is still on the come here, but we won't know because of the nature of how people are booking? Is that typically when you look at the $40,000 weekly lift? Is it half of that? And I'm just trying to think about what hole we're trying to fill?

Cheryl Henry: Yes. I would say that if you used approximately 20% of your December number, that's related to private dine in 2019.

Todd Brooks: That's great. Thanks.

Cheryl Henry: As we talked about this all through the pandemic is the fluidity of the buckets of business. And so, to your point, we've seen -- our whole focus has been, at least for the last year is meet the guests where they are, if they want Ruth's anywhere, if it's a private dining event, if it's outside in a tent, if it's all a car dining, bar dining is make sure that wherever the guest wants to be, we can accommodate it. And we've seen then move within.

So, pre-COVID, the buckets of business being special occasion celebratory just because in business. And we've been able to kind of move and speak to our guests within the -- what's the occasion they want to come from. So, we see that fluidity remaining as we look towards the fourth quarter and understanding the different revenue channels and revenue centers that we can move the guest into.

Todd Brooks: Okay, great, very helpful. And a final one from me if I could, how meaningful typically in this fourth quarter period is the gift card business for Ruth's? And what was the experience during kind of 2020, how much did that business dip? And then opportunity and kind of marketing against that, is that a focus in 2021? And does that get realized fairly quickly? Is that -- if it's a Q4 type of gift, is it a Q1 type of redemption pattern? Thank you.

Mike Hynes: Hi, Todd, this is Mike Hynes. On the gift cards, Q4 is obviously our biggest season. What we saw last year is the sales did drop similar to -- gift card sales did drop similar to our restaurant sales, not quite as severe, but a similar pattern. We have not seen a change yet on redemption behavior. It's followed historical patterns so far, so no change to note there.

Todd Brooks: Okay, great. Thanks, Mike.

Cheryl Henry: I would one.

Todd Brooks: Sure.

Cheryl Henry: There has been a lot of reports lately that the gift card channel is something people are going to be looking for this year to sell experiences.

So, I think that's positive for us versus items or things. And so, we look -- we're trying to tap into that to the extent we can, because it does help with future visitation.

Todd Brooks: Okay, great. Perfect. Thank you, Cheryl.

Operator: Thank you. At this time, there are no further questions in queue. I would like to turn the call back over to Ms. Cheryl Henry for closing comments.

Cheryl Henry: Thank you everyone for joining us on the call today and we look forward to speaking with you again soon.

Operator: Thank you. This does concludes today's teleconference. You may disconnect your lines at this time. And thank you for your participation, and have a great day.