EX-99.1 2 tm2314614d1_ex99-1.htm EXHIBIT 99.1

 

Exhibit 99.1

 

 

Texas Roadhouse, Inc. Announces First Quarter 2023 Results

 

LOUISVILLE, KY. (May 4, 2023) – Texas Roadhouse, Inc. (NasdaqGS: TXRH), today announced financial results for the 13 weeks ended March 28, 2023.

 

Financial Results

 

Financial results for the 13 weeks ended March 28, 2023 and March 29, 2022 were as follows:

 

   First Quarter 
($000’s)  2023   2022   % change 
Total revenue  $1,174,356   $987,486    18.9%
Income from operations   100,945    90,138    12.0%
Net income   86,387    75,202    14.9%
Diluted earnings per share  $1.28   $1.08    18.4%

 

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

 

·Comparable restaurant sales increased 12.9% at company restaurants and increased 13.3% at domestic franchise restaurants;

 

·Average weekly sales at company restaurants were $148,437 of which 12.8% were to-go sales as compared to average weekly sales of $132,263 of which 14.8% were to-go sales in the prior year;

 

·Restaurant margin dollars increased 15.2% to $185.7 million from $161.2 million in the prior year primarily due to higher sales. Restaurant margin, as a percentage of restaurant and other sales, decreased 53 basis points to 15.9% as commodity inflation of 8.9% and wage and other labor inflation of 8.0% were partially offset by higher sales;

 

·Diluted earnings per share increased 18.4% primarily driven by higher restaurant margin dollars partially offset by higher general and administrative expenses;

 

·Six company restaurants and one international franchise restaurant were opened and eight domestic franchise restaurants were acquired; and,

 

·The Company repurchased 92,751 shares of common stock for $9.6 million.

 

Jerry Morgan, Chief Executive Officer of Texas Roadhouse, Inc. commented, “I want to thank our restaurant operators for continuing to provide a legendary experience to our guests, which led to record traffic and sales levels as well as higher profitability for the quarter.”

 

 

 

 

Morgan continued, “On the capital allocation front, our development pipeline remains strong, we acquired eight domestic franchise restaurants, and we further strengthened our capital position by repaying the remainder of our debt. We are confident that our restaurant growth, commitment to our operating fundamentals, and strong balance sheet will continue to provide us the flexibility to generate long-term shareholder value.” 

 

2023 Outlook

 

Comparable restaurant sales at company restaurants for the first five weeks of our second quarter of fiscal 2023 increased 8.6% compared to 2022. In addition, the Company implemented a menu price increase of approximately 2.2% in late March.

 

Management reiterated the following expectations for 2023:

 

·Positive comparable restaurant sales growth including the benefit of menu pricing actions;
·25 to 30 Texas Roadhouse and Bubba’s 33 company restaurant openings;
·Store week growth of at least 6% including the impact of the franchise locations acquired;
·Commodity cost inflation of 5% to 6%;
·Wage and other labor inflation of 5% to 6%;
·An effective income tax rate of approximately 14% excluding the impact of any legislative changes enacted; and,
·Total capital expenditures of approximately $265 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 also excludes pre-opening expense as it occurs at irregular intervals and would impact comparability to prior period results. The Company also 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 also 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, May 4, 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. First Quarter 2023 Earnings. A replay of the call will be available until May 11, 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 700 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 
   March 28, 2023   March 29, 2022 
Revenue:        
Restaurant and other sales  $1,167,583   $980,972 
Franchise royalties and fees   6,773    6,514 
           
Total revenue   1,174,356    987,486 
           
Costs and expenses:          
Restaurant operating costs (excluding depreciation and amortization shown separately below):          
Food and beverage   410,711    337,396 
Labor   385,819    321,871 
Rent   17,828    16,368 
Other operating   167,529    144,154 
Pre-opening   5,377    4,291 
Depreciation and amortization   36,227    33,620 
Impairment and closure, net   55    (646)
General and administrative   49,865    40,294 
           
Total costs and expenses   1,073,411    897,348 
           
Income from operations   100,945    90,138 
           
Interest income (expense), net   1,238    (397)
Equity income from investments in unconsolidated affiliates   755    334 
           
Income before taxes   102,938    90,075 
Income tax expense   14,334    12,747 
           
Net income including noncontrolling interests   88,604    77,328 
Less: Net income attributable to noncontrolling interests   2,217    2,126 
Net income attributable to Texas Roadhouse, Inc. and subsidiaries  $86,387   $75,202 
           
Net income per common share attributable to Texas Roadhouse, Inc. and subsidiaries:          
Basic  $1.29   $1.09 
Diluted  $1.28   $1.08 
           
Weighted average shares outstanding:          
Basic   67,016    69,086 
Diluted   67,293    69,373 
           
Cash dividends declared per share  $0.55   $0.46 

 

 

 

 

Texas Roadhouse, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(in thousands)

(unaudited)

 

   March 28, 2023   December 27, 2022 
Cash and cash equivalents  $156,143   $173,861 
Other current assets, net   112,575    222,980 
Property and equipment, net   1,310,782    1,270,349 
Operating lease right-of-use assets, net   643,485    630,258 
Goodwill   169,641    148,732 
Intangible assets, net   5,859    5,607 
Other assets   76,380    73,878 
           
Total assets  $2,474,865   $2,525,665 
           
Other current liabilities   588,098    652,010 
Operating lease liabilities, net of current portion   692,016    677,874 
Long-term debt   -    50,000 
Other liabilities   124,212    118,119 
Texas Roadhouse, Inc. and subsidiaries stockholders’ equity   1,055,248    1,012,638 
Noncontrolling interests   15,291    15,024 
           
Total liabilities and equity  $2,474,865   $2,525,665 

 

 

 

 

Texas Roadhouse, Inc. and Subsidiaries  

Condensed Consolidated Statements of Cash Flows  

(in thousands)  

(unaudited)  

 

   13 Weeks Ended 
   March 28, 2023   March 29, 2022 
Cash flows from operating activities:          
Net income including noncontrolling interests  $88,604   $77,328 
Adjustments to reconcile net income to net cash provided by operating activities          
Depreciation and amortization   36,227    33,620 
Share-based compensation expense   8,154    9,120 
Deferred income taxes   2,988    2,630 
Other noncash adjustments, net   666    1,187 
Change in working capital   52,342    63,884 
Net cash provided by operating activities   188,981    187,769 
           
Cash flows from investing activities:          
Capital expenditures - property and equipment   (66,733)   (49,029)
Acquistion of franchise restaurants, net of cash acquired   (39,111)   (26,437)
Proceeds from sale of investment in unconsolidated affiliate   472    - 
Proceeds from sale of property and equipment   -    2,188 
Proceeds from sale leaseback transactions   2,072    - 
Net cash used in investing activities   (103,300)   (73,278)
           
Cash flows from financing activities:          
Payments on revolving credit facility, net   (50,000)   - 
Repurchase of shares of common stock   (9,623)   (84,705)
Dividends paid   (36,878)   (31,795)
Other financing activities, net   (6,898)   (7,913)
Net cash used in financing activities   (103,399)   (124,413)
           
Net decrease in cash and cash equivalents   (17,718)   (9,922)
Cash and cash equivalents - beginning of period   173,861    335,645 
Cash and cash equivalents - end of period  $156,143   $325,723 

 

 

 

 

Texas Roadhouse, Inc. and Subsidiaries

Reconciliation of Income from Operations to Restaurant Margin

(in thousands)

(unaudited)

 

   13 Weeks Ended 
   March 28, 2023   March 29, 2022 
Income from operations  $100,945   $90,138 
           
Less:          
Franchise royalties and fees   6,773    6,514 
           
Add:          
Pre-opening   5,377    4,291 
Depreciation and amortization   36,227    33,620 
Impairment and closure, net   55    (646)
General and administrative   49,865    40,294 
           
Restaurant margin  $185,696   $161,183 
           
Restaurant margin (as a percentage of restaurant and other sales)   15.9%   16.4%

 

 

 

 

Texas Roadhouse, Inc. and Subsidiaries  

Supplemental Financial and Operating Information  

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

(unaudited)  

 

   First Quarter     
   2023   2022   Change 
Restaurant openings               
Company - Texas Roadhouse   4    3    1 
Company - Bubba’s 33   0    0    0 
Company - Jaggers   2    0    2 
Franchise - Texas Roadhouse - U.S.   0    0    0 
Franchise - Texas Roadhouse - International   1    2    (1)
Total   7    5    2 
                
Restaurant acquisitions/dispositions               
Company - Texas Roadhouse   8    7    1 
Franchise - Texas Roadhouse - U.S.   (8)   (7)   (1)
                
Restaurants open at the end of the quarter               
Company - Texas Roadhouse   564    536    28 
Company - Bubba’s 33   40    36    4 
Company - Jaggers   7    4    3 
Franchise - Texas Roadhouse - U.S.   54    63    (9)
Franchise - Texas Roadhouse - International   39    33    6 
Total   704    672    32 

 

   First Quarter  
   2023   2022   Change  
Company restaurants (all concepts)                
Restaurant and other sales  $1,167,583   $980,972    19.0 %
Store weeks   7,900    7,456    6.0 %
Comparable restaurant sales (1)   12.9%   16.0%      
                 
Restaurant operating costs (as a % of restaurant and other sales)                
Food and beverage costs   35.2%   34.4%   78  bps
Labor   33.0%   32.8%   23  bps
Rent   1.5%   1.7%   (14 ) bps
Other operating   14.3%   14.7%   (35 ) bps
Total   84.1%   83.6%   53  bps
                 
Restaurant margin   15.9%   16.4%   (53 ) bps
                 
Restaurant margin ($ in thousands)  $185,696   $161,183    15.2 %
Restaurant margin $/Store week  $23,505   $21,618    8.7 %
                 
Texas Roadhouse restaurants only:                
Store weeks   7,304    6,936    5.3 %
Comparable restaurant sales (1)   13.1%   15.8%      
Average unit volume (2)  $1,966   $1,741    12.9 %
Weekly sales by group:                
Comparable restaurants (527 and 498 units)  $151,439   $134,422       
Average unit volume restaurants (22 and 20 units)  $146,220   $129,143       
Restaurants less than 6 months old (15 and 18 units)  $162,150   $140,535       
                 
Bubba’s 33 restaurants only:                
Store weeks   520    468    11.1 %
Comparable restaurant sales (1)   8.7%   21.3%      
Average unit volume (2)  $1,521   $1,398    8.8 %
Weekly sales by group:                
Comparable restaurants (34 and 30 units)  $116,916   $107,387       
Average unit volume restaurants (3 and 4 units)  $117,920   $108,771       
Restaurants less than 6 months old (3 and 2 units)  $127,955   $140,855       
                 
Franchise restaurants                
Franchise royalties and fees  $6,773   $6,514    4.0 %
Store weeks   1,205    1,237    (2.6 )%
Comparable restaurant sales   13.0%   22.9%      
U.S. franchise restaurants only:                
Comparable restaurant sales   13.3%   20.4%      
Average unit volume  $2,122   $1,855    14.4 %

 

(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.