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Published: 2023-07-27 16:05:33 ET
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EX-99.1 2 tm2322182d1_ex99-1.htm EXHIBIT 99.1

 

Exhibit 99.1

 

 

Texas Roadhouse, Inc. Announces Second Quarter 2023 Results

 

LOUISVILLE, KY. (July 27, 2023) – Texas Roadhouse, Inc. (NasdaqGS: TXRH), today announced financial results for the 13 and 26 weeks ended June 27, 2023.

 

Financial Results

 

Financial results for the 13 and 26 weeks ended June 27, 2023 and June 28, 2022 were as follows:

 

   Second Quarter   Year to Date 
($000's)                        
   2023   2022   % change   2023   2022   % change 
Total revenue  $1,171,203   $1,024,606    14.3%  $2,345,559   $2,012,092    16.6%
Income from operations   95,412    85,918    11.1%   196,357    176,056    11.5%
Net income   82,271    72,419    13.6%   168,658    147,621    14.3%
Diluted earnings per share  $1.22   $1.07    14.7%  $2.51   $2.15    16.6%

 

Results for the second quarter, as compared to the prior year as applicable, included the following:

 

●Comparable restaurant sales increased 9.1% at company restaurants and increased 9.2% at domestic franchise restaurants;

 

●Average weekly sales at company restaurants were $146,727 of which $18,496 were to-go sales as compared to average weekly sales of $135,552 of which $17,794 were to-go sales in the prior year;

 

●Restaurant margin dollars increased 8.3% to $182.8 million from $168.7 million in the prior year primarily due to higher sales. Restaurant margin, as a percentage of restaurant and other sales, decreased 88 basis points to 15.7% as commodity inflation of 6.0% and wage and other labor inflation of 7.0% were partially offset by higher sales;

 

●Diluted earnings per share increased 14.7% primarily driven by higher restaurant margin dollars partially offset by higher depreciation and amortization and higher general and administrative expenses;

 

●Three company restaurants and three franchise restaurants were opened; and,

 

●The Company repurchased 213,975 shares of common stock for $23.4 million.

 

 

 

 

Results for the year-to-date period, as compared to the prior year as applicable, included the following:

 

●Comparable restaurant sales increased 11.0% at company restaurants and increased 11.2% at domestic franchise restaurants;

 

●Average weekly sales at company restaurants were $147,579 of which $18,762 were to-go sales as compared to average weekly sales of $133,917 of which $18,671 were to-go sales in the prior year;

 

●Restaurant margin dollars increased 11.7% to $368.5 million from $329.9 million in the prior year primarily due to higher sales. Restaurant margin, as a percentage of restaurant and other sales, decreased 70 basis points to 15.8% as commodity inflation of 7.4% and wage and other labor inflation of 7.4% were partially offset by higher sales;

 

●Diluted earnings per share increased 16.6% primarily driven by higher restaurant margin dollars partially offset by higher general and administrative expenses and higher depreciation and amortization expense;

 

●Nine company restaurants and four franchise restaurants were opened; and,

 

●The Company repurchased 306,726 shares of common stock for $33.1 million.

 

Jerry Morgan, Chief Executive Officer of Texas Roadhouse, Inc. commented, “Once again, our operators generated tremendous sales momentum, including higher guest counts.  This increase in quarterly sales helped offset rising costs and allowed us to further grow our bottom line.”

 

Morgan continued, “On the development front, we have a significant number of company and franchise locations that will open in the second half of the year.  This includes the first franchise location for Jaggers, our fast-casual concept, that opened in Jacksonville, North Carolina, last week.  We remain confident that our continued development of all three concepts, along with a strong balance sheet and disciplined capital allocation strategy will generate long-term shareholder value.”

 

2023 Outlook

 

Comparable restaurant sales at company restaurants for the first four weeks of our third quarter of fiscal 2023 increased 10.7% compared to 2022.

 

Management reiterated the following expectations for 2023:

 

●Positive comparable restaurant sales growth including the benefit of menu pricing actions; and,
●Commodity cost inflation of 5% to 6%.

 

Management updated the following expectations for 2023:

 

●Store week growth of approximately 6% including the impact of franchise locations acquired;
●As many as 28 Texas Roadhouse and Bubba’s 33 company restaurant openings;
●Wage and other labor inflation of 6% to 7%;
●An effective income tax rate of 13% to 14% excluding the impact of any legislative changes enacted; and,
●Total capital expenditures of approximately $300 million.

 

 

 

 

Non-GAAP Measures

 

The Company prepares the consolidated financial statements in accordance with U.S. generally accepted accounting principles (“GAAP”). Within the press release, the Company makes reference to restaurant margin (in dollars and as a percentage of restaurant and other sales). Restaurant margin represents restaurant and other sales less restaurant-level operating costs, including food and beverage costs, labor, rent and other operating costs. Restaurant margin also includes sales and operating costs related to the Company’s non-royalty based retail initiatives. Restaurant margin should not be considered in isolation, or as an alternative, to income from operations. This non-GAAP measure is not indicative of overall company performance and profitability in that this measure does not accrue directly to the benefit of shareholders due to the nature of the costs excluded. Restaurant margin is widely regarded as a useful metric by which to evaluate core restaurant-level operating efficiency and performance over various reporting periods on a consistent basis. In calculating restaurant margin, the Company excludes certain non-restaurant-level costs that support operations, including general and administrative expenses, but do not have a direct impact on restaurant-level operational efficiency and performance. The Company excludes pre-opening expense as it occurs at irregular intervals and would impact comparability to prior period results. The Company excludes depreciation and amortization expense, substantially all of which relates to restaurant-level assets, as it represents a non-cash charge for the investment in restaurants. The Company excludes impairment and closure expense as it believes this provides a clearer perspective of ongoing operating performance and a more useful comparison to prior period results. Restaurant margin as presented may not be comparable to other similarly titled measures of other companies in the industry. A reconciliation of income from operations to restaurant margin is included in the accompanying financial tables.

 

Conference Call

 

Texas Roadhouse, Inc. is hosting a conference call today, July 27, 2023, at 5:00 p.m. Eastern Time to discuss these results. The call will be webcast live from the investor relations portion of the Company's website at www.texasroadhouse.com. Listeners may also access the call by dialing (888) 440-5667 or (646) 960-0476 for international calls and referencing the Texas Roadhouse, Inc. Second Quarter 2023 Earnings. A replay of the call will be available until August 3, 2023, by dialing (800) 770-2030 or (647) 362-9199 for international calls.

 

About the Company

 

Texas Roadhouse, Inc. is a growing restaurant company operating predominantly in the casual dining segment that first opened in 1993 and today has grown to over 710 restaurants system-wide in 49 states and ten foreign countries. For more information, please visit the Company’s Web site at www.texasroadhouse.com.

 

 

 

 

Forward-looking Statements

 

Certain statements in this release are forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended. Such statements are based upon the current beliefs and expectations of the management of Texas Roadhouse. Actual results may vary materially from those contained in forward-looking statements based on a number of factors including, without limitation, conditions beyond its control such as weather, natural disasters, disease outbreaks, epidemics or pandemics impacting customers or food supplies; labor or supply chain shortages or limited availability of staff or product needed to meet our business standards; changes in consumer discretionary spending and macroeconomic conditions, including inflationary pressures; food safety and food-borne illness concerns; and other factors disclosed from time to time in its filings with the U.S. Securities and Exchange Commission. Accordingly, there are or will be important factors that could cause actual outcomes or results to differ materially from those indicated in these statements. These factors include but are not limited to those described under “Part I—Item 1A. Risk Factors” of the Annual Report on Form 10-K for the fiscal year ended December 27, 2022. These factors should not be construed as exhaustive and should be read in conjunction with other filings with the Securities and Exchange Commission. Investors should take such risks into account when making investment decisions. Shareholders and other readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date on which they are made. The Company undertakes no obligation to update any forward-looking statements, except as required by applicable law.

 

# # #

 

Contacts:

 

Investor Relations Media 
Michael Bailen Travis Doster 
(502) 515-7298 (502) 638-5457

 

 

 

 

Texas Roadhouse, Inc. and Subsidiaries

Consolidated Statements of Income

(in thousands, except per share data)

(unaudited)

 

   13 Weeks Ended   26 Weeks Ended 
   June 27, 2023   June 28, 2022   June 27, 2023   June 28, 2022 
Revenue:                    
Restaurant and other sales  $1,164,385   $1,018,057   $2,331,968   $1,999,029 
Franchise royalties and fees   6,818    6,549    13,591    13,063 
                     
Total revenue   1,171,203    1,024,606    2,345,559    2,012,092 
                     
Costs and expenses:                    
Restaurant operating costs (excluding depreciation and amortization shown separately below):                    
Food and beverage   401,204    347,041    811,915    684,437 
Labor   391,337    333,042    777,156    654,913 
Rent   17,996    16,714    35,824    33,082 
Other operating   171,092    152,524    338,621    296,678 
Pre-opening   5,671    5,323    11,048    9,614 
Depreciation and amortization   37,413    34,420    73,640    68,040 
Impairment and closure, net   78    411    133    (235)
General and administrative   51,000    49,213    100,865    89,507 
                     
Total costs and expenses   1,075,791    938,688    2,149,202    1,836,036 
                     
Income from operations   95,412    85,918    196,357    176,056 
                     
Interest income (expense), net   996    (395)   2,234    (792)
Equity income from investments in unconsolidated affiliates   287    545    1,042    879 
                     
Income before taxes   96,695    86,068    199,633    176,143 
Income tax expense   12,270    11,531    26,604    24,278 
                     
Net income including noncontrolling interests   84,425    74,537    173,029    151,865 
Less: Net income attributable to noncontrolling interests   2,154    2,118    4,371    4,244 
Net income attributable to Texas Roadhouse, Inc. and subsidiaries  $82,271   $72,419   $168,658   $147,621 
                     
Net income per common share attributable to Texas Roadhouse, Inc.                    
  and subsidiaries:                    
Basic  $1.23   $1.07   $2.52   $2.16 
Diluted  $1.22   $1.07   $2.51   $2.15 
                     
Weighted average shares outstanding:                    
Basic   66,974    67,654    66,995    68,370 
Diluted   67,229    67,890    67,261    68,631 
                     
Cash dividends declared per share  $0.55   $0.46   $1.10   $0.92 

 

 

 

 

Texas Roadhouse, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(in thousands)

(unaudited)

 

   June 27, 2023   December 27, 2022 
Cash and cash equivalents  $107,324   $173,861 
Other current assets, net   125,961    222,980 
Property and equipment, net   1,360,132    1,270,349 
Operating lease right-of-use assets, net   662,730    630,258 
Goodwill   169,684    148,732 
Intangible assets, net   4,986    5,607 
Other assets   84,174    73,878 
           
Total assets  $2,514,991   $2,525,665 
           
           
Other current liabilities   571,983    652,010 
Operating lease liabilities, net of current portion   712,800    677,874 
Long-term debt   -    50,000 
Other liabilities   131,958    118,119 
Texas Roadhouse, Inc. and subsidiaries stockholders' equity   1,082,982    1,012,638 
Noncontrolling interests   15,268    15,024 
           
Total liabilities and equity  $2,514,991   $2,525,665 
           

 

 

 

 

Texas Roadhouse, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(in thousands)

(unaudited)

 

   26 Weeks Ended 
   June 27, 2023   June 28, 2022 
Cash flows from operating activities:          
Net income including noncontrolling interests  $173,029   $151,865 
Adjustments to reconcile net income to net cash provided by operating activities          
Depreciation and amortization   73,640    68,040 
Share-based compensation expense   16,744    18,612 
Deferred income taxes   1,767    3,906 
Other noncash adjustments, net   2,831    2,144 
Change in working capital, net of acquisitions   20,222    54,136 
Net cash provided by operating activities   288,233    298,703 
           
Cash flows from investing activities:          
Capital expenditures - property and equipment   (154,580)   (108,567)
Acquistion of franchise restaurants, net of cash acquired   (39,153)   (33,069)
Proceeds from sale of investments in unconsolidated affiliates   632    316 
Proceeds from the sale of property and equipment   -    2,188 
Proceeds from sale leaseback transactions   7,097    - 
Net cash used in investing activities   (186,004)   (139,132)
           
Cash flows from financing activities:          
Payments on revolving credit facility   (50,000)   (25,000)
Repurchase of shares of common stock   (33,058)   (212,859)
Dividends paid   (73,698)   (62,547)
Other financing activities, net   (12,010)   (14,399)
Net cash used in financing activities   (168,766)   (314,805)
           
Net decrease in cash and cash equivalents   (66,537)   (155,234)
Cash and cash equivalents - beginning of period   173,861    335,645 
Cash and cash equivalents - end of period  $107,324   $180,411 

 

 

 

 

Texas Roadhouse, Inc. and Subsidiaries

Reconciliation of Income from Operations to Restaurant Margin

(in thousands)

(unaudited)

 

   13 Weeks Ended   26 Weeks Ended 
   June 27, 2023   June 28, 2022   June 27, 2023   June 28, 2022 
Income from operations  $95,412   $85,918   $196,357   $176,056 
                     
Less:                    
Franchise royalties and fees   6,818    6,549    13,591    13,063 
                     
Add:                    
Pre-opening   5,671    5,323    11,048    9,614 
Depreciation and amortization   37,413    34,420    73,640    68,040 
Impairment and closure, net   78    411    133    (235)
General and administrative   51,000    49,213    100,865    89,507 
                     
Restaurant margin  $182,756   $168,736   $368,452   $329,919 
                     
Restaurant margin (as a percentage of restaurant and other sales)   15.7%   16.6%   15.8%   16.5%

 

 

 

 

Texas Roadhouse, Inc. and Subsidiaries

Supplemental Financial and Operating Information

($ amounts in thousands, except weekly sales by group)

(unaudited)

 

   Second Quarter       Year to Date     
   2023   2022   Change   2023   2022   Change 
Restaurant openings                              
Company - Texas Roadhouse   2    4    (2)   6    7    (1)
Company - Bubba's 33   1    1    0    1    1    0 
Company - Jaggers   0    0    0    2    0    2 
Franchise - Texas Roadhouse - U.S.   1    0    1    1    0    1 
Franchise - Texas Roadhouse - International   2    1    1    3    3    0 
Total   6    6    0    13    11    2 
                               
Restaurant acquisitions/dispositions                              
Company - Texas Roadhouse   0    1    (1)   8    8    0 
Franchise - Texas Roadhouse - U.S.   0    (1)   1    (8)   (8)   0 
                               
Restaurant closures                              
Company - Texas Roadhouse   0    0    0    0    0    0 
Franchise - Texas Roadhouse - U.S.   (1)   0    (1)   (1)   0    (1)
Total   (1)   0    (1)   (1)   0    (1)
                               
Restaurants open at the end of the quarter                              
Company - Texas Roadhouse   566    541    25                
Company - Bubba's 33   41    37    4                
Company - Jaggers   7    4    3                
Franchise - Texas Roadhouse - U.S.   54    62    (8)               
Franchise - Texas Roadhouse - International   41    34    7                
Total   709    678    31                

 

    Second Quarter    
    2023    2022    Change   
Company restaurants (all concepts)                 
Restaurant and other sales  $1,164,385   $1,018,057    14.4%  
Store weeks   7,960    7,536    5.6%  
Comparable restaurant sales (1)   9.1%   7.6%       
                  
Restaurant operating costs (as a % of restaurant and other sales)                 
Food and beverage costs   34.5%   34.1%   37bps  
Labor   33.6%   32.7%   90bps  
Rent   1.5%   1.6%   (10)bps  
Other operating   14.7%   15.0%   (29)bps  
Total   84.3%   83.4%   88bps  
                  
Restaurant margin   15.7%   16.6%   (88)bps  
                  
Restaurant margin ($ in thousands)  $182,756   $168,736    8.3%  
Restaurant margin $/Store week  $22,961   $22,390    2.5%  
                  
Texas Roadhouse restaurants only:                 
Store weeks   7,343    7,006    4.8%  
Comparable restaurant sales (1)   9.4%   7.6%       
Average unit volume (2)  $1,946   $1,781    9.2%  
Weekly sales by group:                 
    Comparable restaurants (533 and 503 units)  $149,847   $137,599        
    Average unit volume restaurants (20 and 22 units)  $144,554   $132,222        
    Restaurants less than 6 months old (13 and 16 units)  $158,608   $145,756        
                  
Bubba's 33 restaurants only:                 
Store weeks   526    478    10.0%  
Comparable restaurant sales (1)   3.9%   8.1%       
Average unit volume (2)  $1,514   $1,475    2.6%  
Weekly sales by group:                 
    Comparable restaurants (35 and 31 units)  $117,906   $110,740        
    Average unit volume restaurants (3 and 4 units)  $99,324   $134,386        
    Restaurants less than 6 months old (3 and 2 units)  $123,594   $128,134        
                  
Franchise restaurants                 
Franchise royalties and fees  $6,818   $6,549    4.1%  
Store weeks   1,220    1,238    (1.5)%  
Comparable restaurant sales   10.8%   8.7%       
U.S. franchise restaurants only:                 
Comparable restaurant sales   9.2%   6.2%       
Average unit volume  $2,129   $1,932    10.2%  

 

(1)  Comparable restaurant sales reflect the change in year-over-year sales for restaurants open a full 18 months before the beginning of the period, excluding sales from restaurants permanently closed during the period. 

 

(2)  Average unit volume includes sales from restaurants open for a full six months before the beginning of the period, excluding sales from restaurants permanently closed during the period.    

 

Amounts may not foot due to rounding.