TXRH
$91.92
Texas Roadhouse
($3.23)
(3.39%)
Earnings Details
2nd Quarter June 2022
Thursday, July 28, 2022 4:03:00 PM
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Summary

Texas Roadhouse (TXRH) Recent Earnings

Texas Roadhouse (TXRH) reported 2nd Quarter June 2022 earnings of $1.07 per share on revenue of $1.0 billion. The consensus earnings estimate was $1.01 per share on revenue of $1.0 billion. Revenue grew 14.0% on a year-over-year basis.

Texas Roadhouse Inc is a full-service, casual dining restaurant company. It offers steaks, ribs, fish, seafood, chicken, pork chops, pulled pork and vegetable plates, and an assortment of hamburgers, salads and sandwiches.

Results
Reported Earnings
$1.07
Earnings Whisper
-
Consensus Estimate
$1.01
Reported Revenue
$1.02 Bil
Revenue Estimate
$1.02 Bil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

Texas Roadhouse, Inc. Announces Second Quarter 2022 Results

LOUISVILLE, Ky., July 28, 2022 (GLOBE NEWSWIRE) -- Texas Roadhouse, Inc. (NasdaqGS: TXRH), today announced financial results for the 13 and 26 weeks ended June 28, 2022.

Financial Results

Financial results for the 13 and 26 weeks ended June 28, 2022 and June 29, 2021 were as follows:

 Second Quarter Year to Date
($000's)             
 2022 2021  % change 2022 2021  % change
Total revenue$1,024,606 $898,788  14.0% $2,012,092 $1,699,417  18.4%
Income from operations 85,918  89,728  (4.2%)  176,056  170,655  3.2%
Net income 72,419  75,480  (4.1%)  147,621  139,630  5.7%
Diluted earnings per share$1.07 $1.08  (0.8%) $2.15 $1.99  8.1%

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

  • Comparable restaurant sales increased 7.6% at company restaurants and increased 6.2% at domestic franchise restaurants;
  • Average weekly sales at company restaurants were $135,552 of which 13.1% were to-go sales as compared to average weekly sales of $126,442 of which 16.9% were to-go sales in the prior year;
  • Restaurant margin, as a percentage of restaurant and other sales, decreased 116 basis points to 16.6%. Restaurant margin was negatively impacted by commodity inflation of 11.8%, with higher costs across the basket, partially offset by the benefit of an increase in comparable restaurant sales. Restaurant margin dollars increased 6.6% to $168.7 million from $158.2 million in the prior year;
  • Diluted earnings per share decreased 0.8% to $1.07 from $1.08 in the prior year as higher restaurant margin dollars were more than offset by increased general and administrative expenses. This was driven by the timing of our annual managing partner conference which occurred in the third quarter in the prior year. Diluted earnings per share also benefitted from increased share repurchases;
  • Five company restaurants and one international franchise restaurant were opened;
  • The Company repurchased 1,673,387 shares of common stock for $128.2 million; and,
  • The Company ended the quarter with $180.4 million of cash on hand and debt of $75.0 million.

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

  • Comparable restaurant sales increased 11.7% at company restaurants and increased 11.8% at domestic franchise restaurants;
  • Average weekly sales at company restaurants were $133,917 of which 13.9% were to-go sales as compared to average weekly sales of $120,360 of which 19.5% were to-go sales in the prior year;
  • Restaurant margin, as a percentage of restaurant and other sales, decreased 162 basis points to 16.5%. Restaurant margin was negatively impacted by commodity inflation of 14.4%, with higher costs across the basket, partially offset by the benefit of an increase in comparable restaurant sales. Restaurant margin dollars increased 7.9% to $329.9 million from $305.8 million in the prior year;
  • Diluted earnings per share increased to $2.15 from $1.99 in the prior year as higher restaurant margin dollars were partially offset by increased general and administrative expenses driven by the timing of our annual managing partner conference. Diluted earnings per share also benefitted from increased share repurchases;
  • Eight company restaurants and three international franchise restaurants were opened; and,
  • The Company repurchased 2,734,005 shares of common stock for $212.9 million.

Jerry Morgan, Chief Executive Officer of Texas Roadhouse, Inc. commented, “Thanks to the hard work of our operators, we continue to see solid revenue growth including strong sales volumes at our new restaurants.  In the second half of the year, we will remain focused on balancing the value that we provide to our guests with the significance of any menu pricing actions to help offset rising costs.”

Morgan continued, “On the development front, we are pleased with how our current year pipeline is progressing. As of today, we have opened 10 new Texas Roadhouse and Bubba’s 33 restaurants and have another 15 under construction. We also expect our franchise partners could open as many as seven Texas Roadhouse restaurants this year. Additionally, we took advantage of market conditions to again repurchase a significant number of shares this quarter. We are confident that our development pipeline, sales performance, and solid balance sheet have us well positioned to continue providing strong shareholder value.”

Franchise Acquisitions

In the first half of 2022, the Company completed the acquisition of eight franchise restaurants for an aggregate purchase price of $33.1 million.

2022 Outlook        

Comparable restaurant sales at company restaurants for the first four weeks of the third quarter of fiscal 2022 increased 3.9% compared to the prior year.  

Management reiterated the following expectations for 2022:

  • Positive comparable restaurant sales growth;
  • Approximately 25 Texas Roadhouse and Bubba's 33 company restaurant openings; and,
  • Total capital expenditures of approximately $230 million including as many as three relocations.

Management updated the following expectations for 2022:

  • Store week growth of approximately 6%, including the impact of the eight franchise locations acquired;
  • Commodity cost inflation of approximately 12%;
  • Wage and other labor inflation of approximately 8%; and,
  • An effective income tax rate of approximately 14% excluding the impact of any legislative changes enacted.

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, Inc. is hosting a conference call today, July 28, 2022, 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 2022 Earnings. A replay of the call will be available until August 8, 2022, 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 680 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; 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 28, 2021. 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


Texas Roadhouse, Inc. and Subsidiaries
Condensed Consolidated Statements of Income
(in thousands, except per share data)
(unaudited)
 
   13 Weeks Ended  26 Weeks Ended
   June 28, 2022 June 29, 2021  June 28, 2022 June 29, 2021
             
Revenue:          
 Restaurant and other sales$1,018,057  $892,444  $1,999,029  $1,687,367
 Franchise royalties and fees6,549  6,344  13,063  12,050
             
Total revenue1,024,606  898,788  2,012,092  1,699,417
                
Costs and expenses:             
 Restaurant operating costs (excluding depreciation and amortization shown separately below):             
  Food and beverage347,041  295,504  684,437  546,986
  Labor333,042  288,147  654,913  546,183
  Rent16,714  14,956  33,082  29,408
  Other operating152,524  135,606  296,678  258,985
 Pre-opening5,323  6,319  9,614  10,587
 Depreciation and amortization34,420  31,650  68,040  62,519
 Impairment and closure, net411  17  (235)  521
 General and administrative49,213  36,861  89,507  73,573
             
Total costs and expenses938,688  809,060  1,836,036  1,528,762
             
Income from operations85,918  89,728  176,056  170,655
             
Interest expense, net395  975  792  2,435
Equity income from investments in unconsolidated affiliates545  239  879  22
             
Income before taxes86,068  88,992  176,143  168,242
Income tax expense11,531  11,067  24,278  23,887
             
Net income including noncontrolling interests74,537  77,925  151,865  144,355
Less: Net income attributable to noncontrolling interests2,118  2,445  4,244  4,725
Net income attributable to Texas Roadhouse, Inc. and subsidiaries$72,419  $75,480  $147,621  $139,630
             
Net income per common share attributable to Texas Roadhouse, Inc. and subsidiaries:          
 Basic$1.07  $1.08  $2.16  $2.00
 Diluted$1.07  $1.08  $2.15  $1.99
             
Weighted average shares outstanding:          
 Basic67,654  69,790  68,370  69,713
 Diluted67,890  70,161  68,631  70,150
             
Cash dividends declared per share$0.46  $0.40  $0.92  $0.40
             


Texas Roadhouse, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(in thousands)
(unaudited)
      
  June 28,2022 December 28, 2021
      
      
Cash and cash equivalents $ 180,411  $ 335,645
Other current assets, net 100,533  227,880
Property and equipment, net 1,207,996  1,162,441
Operating lease right-of-use assets, net 611,934  578,413
Goodwill 148,732  127,001
Intangible assets, net 7,001  1,520
Other assets 65,111  79,052
      
Total assets $ 2,321,718  $ 2,511,952
      
      
Other current liabilities 528,459  602,144
Operating lease liabilities, net of current portion 657,476  622,892
Long-term debt 75,000  100,000
Other liabilities 106,764  113,432
Texas Roadhouse, Inc. and subsidiaries stockholders' equity 938,892  1,058,124
Noncontrolling interests 15,127  15,360
      
Total liabilities and equity $ 2,321,718  $ 2,511,952
      


Texas Roadhouse, Inc. and Subsidiaries 
Condensed Consolidated Statements of Cash Flows 
(in thousands) 
(unaudited) 
         
         
    26 Weeks Ended 
    June 28, 2022 June 29, 2021
         
         
Cash flows from operating activities:      
Net income including noncontrolling interests $ 151,865  $ 144,355 
Adjustments to reconcile net income to net cash provided by operating activities      
 Depreciation and amortization 68,040  62,519 
 Share-based compensation expense 18,612  19,817 
 Deferred income taxes 3,906  2,948 
 Other noncash adjustments, net 2,144  1,955 
Change in working capital 54,136  65,252 
  Net cash provided by operating activities 298,703  296,846 
         
Cash flows from investing activities:      
Capital expenditures - property and equipment (108,567)  (85,068) 
Acquisition of franchise restaurants, net of cash acquired (33,069)  - 
Proceeds from sale of investment in unconsolidated affiliate 316  - 
Proceeds from sale of property and equipment 2,188  - 
Proceeds from sale leaseback transactions -  3,285 
  Net cash used in investing activities (139,132)  (81,783) 
         
Cash flows from financing activities:      
Payments on revolving credit facility, net (25,000)  (50,000) 
Repurchase of shares of common stock (212,859)  - 
Dividends paid (62,547)  (27,932) 
Other financing activities, net (14,399)  (16,867) 
  Net cash used in financing activities (314,805)  (94,799) 
         
  Net (decrease) increase in cash and cash equivalents (155,234)  120,264 
Cash and cash equivalents - beginning of period 335,645  363,155 
Cash and cash equivalents - end of period $ 180,411  $ 483,419 
         


Texas Roadhouse, Inc. and Subsidiaries
Reconciliation of Income from Operations to Restaurant Margin
(in thousands)
(unaudited)
         
  13 Weeks Ended 26 Weeks Ended
  June 28, 2022 June 29, 2021 June 28, 2022 June 29, 2021
         
Income from operations $85,918  $89,728  $176,056  $170,655 
         
Less:        
Franchise royalties and fees  6,549   6,344   13,063   12,050 
         
Add:        
Pre-opening  5,323   6,319   9,614   10,587 
Depreciation and amortization  34,420   31,650   68,040   62,519 
Impairment and closure, net  411   17   (235)  521 
General and administrative  49,213   36,861   89,507   73,573 
         
Restaurant margin $168,736  $158,231  $329,919  $305,805 
         
Restaurant margin(as a percentage of restaurant and other sales)  16.6%  17.7%  16.5%  18.1%
         


Texas Roadhouse, Inc. and Subsidiaries
Supplemental Financial and Operating Information
($ amounts in thousands, except weekly sales by group)
(unaudited)
              
   Second Quarter   Year to Date  
    2022   2021 Change2022  2021 Change
Restaurant openings           
 Company - Texas Roadhouse 4   6 (2)  7  8 (1) 
 Company - Bubba's 33 1   2 (1)  1  3 (2) 
 Company - Jaggers 0   0 0  0  0 0 
 Franchise - Texas Roadhouse - U.S. 0   0 0  0  0 0 
 Franchise - Texas Roadhouse - International 1   2 (1)  3  2 1 
 Total 6   10 (4)  11  13 (2) 
              
Restaurant acquisitions/dispositions           
 Company - Texas Roadhouse 1   0 1  8  0 8 
 Franchise - Texas Roadhouse - U.S. (1)   0 (1)  (8)  0 (8) 
              
              
Restaurants open at the end of the quarter           
 Company - Texas Roadhouse 541   511 30       
 Company - Bubba's 33 37   34 3       
 Company - Jaggers 4   3 1       
 Franchise - Texas Roadhouse - U.S. 62   69 (7)       
 Franchise - Texas Roadhouse - International 34   30 4       
 Total 678   647 31       
              
   Second Quarter  
    2022   2021 Change     
Company restaurants (all concepts)           
 Restaurant and other sales$1,018,057  $892,444 14.1 %     
 Store weeks 7,536   7,085 6.4 %     
 Comparable restaurant sales (1) 7.6 % 80.2%       
              
 Restaurant operating costs (as a % of restaurant and other sales)          
 Food and beverage costs 34.1 % 33.1%98 bps     
 Labor 32.7 % 32.3%43 bps     
 Rent 1.6 % 1.7%(3)bps     
 Other operating 15.0 % 15.2%(21)bps     
 Total 83.4 % 82.3%116 bps     
              
  Restaurant margin 16.6 % 17.7%(116)bps     
              
  Restaurant margin ($ in thousands)$168,736  $158,231 6.6 %     
  Restaurant margin $/Store week$22,390  $22,333 0.3 %     
              
 Texas Roadhouse restaurants only:           
  Store weeks 7,006   6,617 5.9 %     
  Comparable restaurant sales 7.6 % 79.0%       
  Average unit volume (2)$1,786  $1,662 7.4 %     
  Weekly sales by group:       
  Comparable restaurants (503 and 476 units)$137,599  $128,716        
  Average unit volume restaurants (22 and 19 units)$132,222  $110,459        
  Restaurants less than 6 months old (16 and 16 units)$145,756  $134,822        
              
 Bubba's 33 restaurants only:           
  Store weeks 478   429 11.4 %     
  Comparable restaurant sales 8.1 % 115.4%       
  Average unit volume$1,475  $1,332 10.7 %     
  Weekly sales by group:       
  Comparable restaurants (31 and 26 units)$110,740  $106,675        
  Average unit volume restaurants (4 and 5 units)$134,386  $80,685        
  Restaurants less than 6 months old (2 and 3 units)$128,134  $143,672        
              
Franchise restaurants           
 Franchise royalties and fees$6,549  $6,344 3.2 %     
 Store weeks 1,238   1,269 (2.5)%     
 Comparable restaurant sales 8.7 % 86.3%       
 U.S. franchise restaurants only:           
  Comparable restaurant sales 6.2 % 76.5%       
  Average unit volume$1,857  $1,766 5.2 %     
              
              
(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.


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Source: Texas Roadhouse, Inc