Texas Roadhouse, Inc. Announces First Quarter 2021 Results

LOUISVILLE, Ky., April 29, 2021 (GLOBE NEWSWIRE) -- Texas Roadhouse, Inc. (NasdaqGS: TXRH), today announced financial results for the 13 week period ended March 30, 2021 and provided a business update.

Statement from Jerry Morgan, CEO and President

The last several weeks have been extremely difficult for the Texas Roadhouse family as we mourn the passing of our Founder, CEO, and friend, Kent Taylor. The vision and leadership that Kent provided since opening the first store in 1993 was without question the foundation for the thriving, multi-concept restaurant company that we are today. The entire leadership team is committed to preserving Kent’s legacy and the unique culture he established as we continue to grow Texas Roadhouse just as he did over the past 28 years.

We also have reflected on the impact of the pandemic on our business. A year ago today, all of our dining rooms were still closed and while we knew brighter days were ahead, we never could have anticipated where we are today. Our operating results have exceeded even pre-pandemic levels thanks to our operators’ ability to navigate a number of factors, including the easing of dining room capacity restrictions, guest excitement to get back into our restaurants and the continued strength of our To-Go sales. Going forward, our primary focus will be ensuring that our guests continue to have a legendary experience each and every time they choose us. This will include continuing to manage capacity restrictions, recruiting and retaining front-line employees, and maintaining a safe environment for everyone.

Financial Results

Financial results for the 13 week periods ended March 30, 2021, March 31, 2020, and March 26, 2019 were as follows:

Results for the first quarter included the following:

• Comparable restaurant sales at company restaurants increased 18.5% and 8.6% compared to 2020 and 2019, respectively¹. Comparable restaurant sales at domestic franchise restaurants increased 15.2% and 5.1% compared to 2020 and 2019, respectively;
• Three company restaurants were opened, including one Bubba’s 33 restaurant;
• Restaurant margin, as a percentage of restaurant and other sales, was 18.6% and restaurant margin dollars were $147.6 million. Restaurant margin was impacted by an increase in comparable restaurant sales partially offset by higher costs related to the pandemic;
• Diluted earnings per share increased to $0.91 from $0.23 in the prior year due to the increase in comparable restaurant sales and the prior year impact of the pandemic, which began to significantly impact our operations in March 2020; and,
• The Company ended the quarter with debt of $240.0 million and $495.6 million of cash on hand.
  

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 measured for comparison to 2020 and for restaurants open a full 30 months before the beginning of the period measured for comparison to 2019.

Jerry Morgan commented, “We asked our operators to deliver results in a challenging environment and as expected they delivered industry leading results. These strong operating results, which have continued into our April period, have further strengthened our financial position. As a result, we continue to move forward with our development pipeline and are pleased to report the reinstatement of our quarterly dividend by our Board of Directors.”

Business Update

Comparable restaurant sales during the quarter were positively impacted by the re-opening of dining rooms, all of which had re-opened by the end of the quarter, the continued easing of dining room capacity restrictions, and strong To-Go sales. The Company continues to operate under various capacity restrictions in the dining rooms along with enhanced To-Go, which includes a curbside and/or drive-up operating model, as permitted by local guidelines. By period, the comparable restaurant sales, average weekly sales, and To-Go sales for all company restaurants were as follows:

For the April period, the comparable restaurant sales, average weekly sales, and To-Go sales for all company restaurants were as follows:

For the quarter, the Company’s cash on hand position increased $132.5 million due to increased sales performance and working capital inflows, partially offset by cash used for capital expenditures. As of the end of the quarter, the Company had opened three company restaurants and an additional 15 were under construction. In addition and as further discussed below, the Company’s Board of Directors reinstated the quarterly dividend beginning with the Q2 2021 fiscal quarter.

2021 Outlook

Management updated the following expectation for 2021:

• Commodity cost inflation of approximately 4.0%.
  

Management reiterated the following expectations for 2021:

• 25 to 30 company restaurant openings across all concepts;
• Store week growth of 4.0% to 5.0%; and,
• Total capital expenditures of $210 million to $220 million.
  

To the extent that state and local guidelines begin to significantly reduce capacity and/or re-close dining rooms, the Company could pull back on development and reduce capital spend accordingly.

Cash Dividend Payment

On April 28, 2021, our Board of Directors reinstated the payment of a quarterly cash dividend of $0.40 per share of common stock. This payment will be distributed on June 4, 2021 to shareholders of record at the close of business on May 19, 2021. The Company most recently paid a quarterly cash dividend of $0.36 on March 27, 2020 which was subsequently suspended to preserve cashflow.

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 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 restaurant-level operating efficiency and performance. In calculating restaurant margin, the Company excludes certain non-restaurant-level costs that support operations, including pre-opening and general and administrative expenses, but do not have a direct impact on restaurant-level operational efficiency and performance. 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 is hosting a conference call today, April 29, 2021 at 5:00 p.m. Eastern Time to discuss these results. The dial-in number is (877) 699-0953 or (647) 689-5456 for international calls. A replay of the call will be available for one week following the conference call. To access the replay, please dial (800) 585-8367 or (416) 621-4642 for international calls, and use 6172236 as the pass code. There will be a simultaneous Web cast conducted at www.texasroadhouse.com.

About the Company

Texas Roadhouse is a casual dining concept that first opened in 1993 and today has grown to over 640 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. These statements include, but are not limited to, statements related to the potential impact of the COVID-19 pandemic, including further dining room capacity restrictions or closures, and other non-historical statements. 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; 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 29, 2020. 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                                                                
Michael Bailen
(502) 515-7298

Media
Travis Doster
(502) 638-5457