TXRH
$57.24
Texas Roadhouse
$.59
1.04%
Earnings Details
3rd Quarter September 2019
Monday, October 28, 2019 4:03:00 PM
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Summary

Texas Roadhouse Beats

Texas Roadhouse (TXRH) reported 3rd Quarter September 2019 earnings of $0.52 per share on revenue of $650.5 million. The consensus earnings estimate was $0.46 per share on revenue of $649.4 million. The Earnings Whisper number was $0.46 per share. Revenue grew 9.4% 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
$0.52
Earnings Whisper
$0.46
Consensus Estimate
$0.46
Reported Revenue
$650.5 Mil
Revenue Estimate
$649.4 Mil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

Texas Roadhouse, Inc. Announces Third Quarter 2019 Results

LOUISVILLE, Ky., Oct. 28, 2019 (GLOBE NEWSWIRE) -- Texas Roadhouse, Inc. (NasdaqGS: TXRH), today announced financial results for the 13 and 39 week periods ended September 24, 2019

  Third Quarter Year to Date
($000's) 2019 2018 % Change 20192018% Change
           
Total revenue $  650,489 $  594,595 9.4% $  2,030,925 $  1,851,5379.7%
Income from operations 44,884 35,444 26.6% 158,612154,5822.6%
Net income 36,531 29,125 25.4% 131,766127,8933.0%
Diluted EPS $  0.52 $  0.40 29.1% $  1.85 $  1.783.9%

 

Results for the third quarter included the following highlights:  

  • Comparable restaurant sales increased 4.4% at company restaurants and 3.2% at domestic franchise restaurants;
  • Restaurant margin, as a percentage of restaurant and other sales, increased 49 basis points to 16.7%, as lower cost of sales due to the benefit of a higher average check was partially offset by higher labor costs driven by wage rate and other inflation.  Restaurant margin dollars increased 12.7% to $108.0 million from $95.8 million in the prior year;
  • Diluted earnings per share increased 29.1% to $0.52 from $0.40 in the prior year as higher restaurant margin dollars and a decrease in certain general and administrative expenses were partially offset by higher depreciation and amortization expense;
  • Four company restaurants, including one Bubba’s 33 restaurant, and two international franchise restaurants were opened; and
  • The Company repurchased 358,381 shares of common stock for $18.9 million

Results for the year-to-date period included the following highlights:

  • Comparable restaurant sales increased 4.8% at company restaurants and 4.0% at domestic franchise restaurants;
  • Restaurant margin, as a percentage of restaurant and other sales, decreased 46 basis points to 17.4%, as higher labor costs driven by wage rate and other inflation was partially offset by lower cost of sales due to the benefit of a higher average check.  Restaurant margin dollars increased 6.9% to $351.3 million from $328.6 million in the prior year;
  • Diluted earnings per share increased 3.9% to $1.85 from $1.78 in the prior year;
  • 11 company restaurants, including one Bubba’s 33 restaurant, and six, primarily international, franchise restaurants were opened; and
  • The Company repurchased 2,455,058 shares of common stock for $131.0 million

Kent Taylor, Chief Executive Officer of Texas Roadhouse, Inc., commented, “We are pleased to deliver a solid quarter of results driven by improved restaurant margins and comparable restaurant sales growth of 4.4%.  Our operators continue to execute on our core strategy of getting guests in the door and providing a legendary experience.”

Taylor continued, “On the development front, our restaurant pipeline is as strong as it has ever been.  In 2020 we are targeting at least 30 company restaurant openings and our franchise partners are targeting an additional eight restaurant openings.  As we head into 2020, we are excited about the growth opportunities and the strength of our business.”

2019 Outlook

Comparable restaurant sales at company restaurants for the first four weeks of our fourth quarter of fiscal 2019 increased 5.3% compared to the prior year period.

Management updated the following expectations for 2019:

  • Approximately 22 company restaurant openings, including as many as three Bubba’s 33 restaurants;
  • Commodity cost inflation of 1.5% to 2.0%;
  • Growth in total labor dollars per store week of 6.0% to 7.0%; and
  • Total capital expenditures of approximately $200 million.

Management reiterated the following expectations for 2019:

  • Positive comparable restaurant sales growth; and
  • An income tax rate of 14.0% to 15.0%.

2020 Outlook

Management provided the following initial expectations for 2020:

  • Positive comparable restaurant sales growth;
  • At least 30 company restaurant openings, including as many as eight Bubba’s 33 restaurants;
  • Store week growth of 3.5% to 4.5%, including the negative impact of lapping the 53rd week from 2019;
  • Commodity cost inflation of 1.0% to 2.0%;
  • Mid-single digit growth in labor dollars per store week;
  • An income tax rate of 14.0% to 15.0%; and
  • Total capital expenditures of $190 million to $200 million.

Non-GAAP Measures

We prepare our consolidated financial statements in accordance with U.S. generally accepted accounting principles (“GAAP”).  Within our press release, we make reference to restaurant margin (in dollars and as a percentage of sales).  Restaurant margin represents restaurant and other sales less restaurant-level operating costs, including cost of sales, 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, we exclude 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.  We also exclude depreciation and amortization expense, substantially all of which relates to restaurant-level assets, as it represents a non-cash charge for the investment in our restaurants.  We also exclude impairment and closure expense as we believe 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 our 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, October 28, 2019 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 5096392 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 600 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 that are not historical facts, including, without limitation, those relating to our anticipated financial performance, are forward-looking statements that involve risks and uncertainties.  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, the actual number of restaurants opening; the sales at these and our other company and franchise restaurants; changes in restaurant development or operating costs, such as food and labor; our ability to acquire franchise restaurants; our ability to integrate the franchise restaurants we acquire or other concepts we develop; our ability to continue to generate the necessary cash flows to fund our new restaurant growth, continue our share repurchase program and pay a quarterly cash dividend; strength of consumer spending; pending or future legal claims; breaches of security; conditions beyond our control such as weather, natural disasters, disease outbreaks, epidemics or pandemics impacting our customers or food supplies; food safety and food-borne illness concerns; acts of war or terrorism and other factors disclosed from time to time in our filings with the U.S. 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.  We undertake no obligation to update any forward-looking statements, except as required by applicable law.


Contacts:

Investor Relations                                                                                          
Tonya Robinson
(502) 515-7269

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   39 Weeks Ended 
   September 24, 2019  September 25, 2018  September 24, 2019 September 25, 2018 
               
Revenue:            
 Restaurant and other sales $  645,230   $  589,704  $  2,014,720  $  1,836,179 
 Franchise royalties and fees  5,259     4,891    16,205    15,358 
               
Total revenue  650,489     594,595    2,030,925    1,851,537 
               
Costs and expenses:            
 Restaurant operating costs (excluding depreciation and amortization shown separately below):            
               
  Cost of sales  205,158     191,990    650,136    598,824 
  Labor  218,342     197,621    667,712    593,298 
  Rent  12,994     12,330    39,173    36,300 
  Other operating  100,742     91,946    306,355    279,182 
 Pre-opening  4,736     4,378    12,801    13,529 
 Depreciation and amortization   28,347     25,843    84,574    75,492 
 Impairment and closure  61     20    394    128 
 General and administrative  35,225     35,023    111,168    100,202 
               
Total costs and expenses  605,605     559,151    1,872,313    1,696,955 
               
Income from operations  44,884     35,444    158,612    154,582 
               
Interest income (expense), net  81     (168)   1,526    (810)
Equity income from investments in            
 unconsolidated affiliates  (154)    381    100    1,150 
               
Income before taxes  44,811     35,657    160,238    154,922 
Provision for income taxes  6,785     5,398    23,331    22,321 
               
Net income including noncontrolling interests  38,026     30,259    136,907    132,601 
Less: Net income attributable to noncontrolling interests  1,495     1,134    5,141    4,708 
Net income attributable to Texas Roadhouse, Inc. and subsidiaries$  36,531   $  29,125  $  131,766  $  127,893 
               
Net income per common share attributable to Texas Roadhouse, Inc.            
  and subsidiaries:            
 Basic$  0.53   $  0.41  $  1.86  $  1.79 
 Diluted$  0.52   $  0.40  $  1.85  $  1.78 
               
Weighted average shares outstanding:            
 Basic  69,573     71,508    70,896    71,429 
 Diluted  69,939     72,006    71,287    71,906 
               
Cash dividends declared per share$  0.30   $  0.25  $  0.90  $  0.75 
       
     

 

 
Texas Roadhouse, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(in thousands)
(unaudited)
        
   September 24, 2019 December 25, 2018
        
        
Cash and cash equivalents $  99,540  $  210,125 
Other current assets, net   65,122    134,894 
Property and equipment, net   1,020,167    956,676 
Operating lease right-of-use asset, net   495,419    -  
Goodwill   123,220    123,220 
Intangible assets, net   1,375    1,959 
Other assets   50,718    42,402 
        
Total assets $  1,855,561  $  1,469,276 
        
        
Other current liabilities   332,272    385,142 
Operating lease liabilities, net of current portion   532,480    -  
Other liabilities   82,112    123,426 
Texas Roadhouse, Inc. and subsidiaries stockholders' equity   893,975    945,569 
Noncontrolling interests    14,722    15,139 
        
Total liabilities and equity $  1,855,561  $  1,469,276 
        
Note: Beginning in 2019, we adopted Accounting Standards Codification 842, Leases, which requires the recognition of an operating lease right-of-use asset and operating lease liability for virtually all leases.
 
 
        
        


 
Texas Roadhouse, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
          
          
    39 Weeks Ended 
    September 24, 2019  September 25, 2018 
          
          
Cash flows from operating activities:       
Net income including noncontrolling interests $  136,907   $  132,601 
Adjustments to reconcile net income to net cash provided by operating activities       
 Depreciation and amortization   84,574     75,492 
 Share-based compensation expense   25,016     24,820 
 Other noncash adjustments, net   881     6,872 
Change in working capital   (5,381)    (14,206)
  Net cash provided by operating activities   241,997     225,579 
          
Cash flows from investing activities:       
Capital expenditures - property and equipment   (144,917)    (110,906)
Proceeds from sale of property and equipment   351     -  
  Net cash used in investing activities   (144,566)    (110,906)
          
Cash flows from financing activities:       
Principal payments on long-term debt and capital lease obligation   -      (50,007)
Repurchase shares of common stock   (130,963)    -  
Dividends paid   (60,675)    (50,666)
Other financing activities, net   (16,378)    (13,728)
  Net cash used in financing activities   (208,016)    (114,401)
          
  Net (decrease) increase in cash and cash equivalents   (110,585)    272 
Cash and cash equivalents - beginning of period   210,125     150,918 
Cash and cash equivalents - end of period $  99,540   $  151,190 
          


 
 
Texas Roadhouse, Inc. and Subsidiaries
Reconciliation of Income from Operations to Restaurant Margin
(in thousands)
(unaudited)
         
  13 Weeks Ended 39 Weeks Ended
  September 24, 2019 September 25, 2018 September 24, 2019 September 25, 2018
         
Income from operations $  44,884 $  35,444 $  158,612 $  154,582
         
Less:        
Franchise royalties and fees   5,259   4,891   16,205   15,358
         
Add:        
Pre-opening   4,736   4,378   12,801   13,529
Depreciation and amortization   28,347   25,843   84,574   75,492
Impairment and closure   61   20   394   128
General and administrative   35,225   35,023   111,168   100,202
         
Restaurant margin $  107,994 $  95,817 $  351,344 $  328,575
         
Restaurant margin (as a percentage of restaurant and other sales) 16.7% 16.2% 17.4% 17.9%


  
  
  
Texas Roadhouse, Inc. and Subsidiaries
Supplemental Financial and Operating Information
($ amounts in thousands, except weekly sales by group)
(unaudited)  
             
   Third Quarter Change   Year to Date Change  
   2019 2018 vs LY   2019 2018 vs LY  
                  
Restaurant openings               
 Company - Texas Roadhouse3 3 0   10 13 (3)  
 Company - Bubba's 331 0 1   1 4 (3)  
 Company - Other0 0 0   0 0 0  
 Franchise - Texas Roadhouse - U.S.0 0 0   1 0 1  
 Franchise - Texas Roadhouse - International2 1 1   5 4 1  
 Total6 4 2   17 21 (4)  
                  
Restaurant closures               
 Franchise - Texas Roadhouse - International0 0 0   (2) 0 (2)  
 Total0 0 0   (2) 0 (2)  
                  
Restaurants open at the end of the quarter               
 Company - Texas Roadhouse474 453 21          
 Company - Bubba's 3326 24 2          
 Company - Other2 2 0          
 Franchise - Texas Roadhouse - U.S.70 70 0          
 Franchise - Texas Roadhouse - International25 21 4          
 Total597 570 27          
                  
Company restaurants               
 Restaurant and other sales$  645,230 $  589,704   9.4 % $  2,014,720 $  1,836,179   9.7 %
 Store weeks6,509 6,196   5.0 % 19,355 18,386   5.3 %
 Comparable restaurant sales growth (1)4.4%5.5%    4.8%5.4%   
 Texas Roadhouse restaurants only:               
  Comparable restaurant sales growth (1)4.2%5.5%    4.7%5.3%   
  Average unit volume (2)$  1,304 $  1,254   4.0 % $  4,118 $  3,953   4.2 %
  Weekly sales by group:           
    Comparable restaurants (441 units)$  100,578              
    Average unit volume restaurants (23 units) (3)$  95,324              
    Restaurants less than 6 months old (10 units)$  107,347              
                  
Restaurant operating costs (as a % of restaurant and other sales)               
Cost of sales31.8%32.6%  (76)bps32.3%32.6%  (34)bps
Labor33.8%33.5%  33 bps33.1%32.3%  83 bps
Rent 2.0%2.1%  (8)bps1.9%2.0%  (3)bps
Other operating 15.6%15.6%  2 bps15.2%15.2%  0 bps
Total 83.3%83.8%  (49)bps82.6%82.1%  46 bps
                  
 Restaurant margin16.7%16.2%  49 bps17.4%17.9%  (46)bps
                  
 Restaurant margin ($ in thousands)$  107,994 $  95,817   12.7 % $  351,344 $  328,575   6.9 %
 Restaurant margin $/Store week$  16,591 $  15,464   7.3 % $  18,153 $  17,871   1.6 %
                  
Franchise restaurants               
 Franchise royalties and fees$  5,259 $  4,891   7.5 % $  16,205 $  15,358   5.5 %
 Store weeks1,220 1,175   3.8 % 3,623 3,478   4.2 %
 Comparable restaurant sales growth (1)2.4%1.8%    3.0%2.0%   
 U.S. franchise restaurants only:               
  Comparable restaurant sales growth (1)3.2%4.2%    4.0%4.1%   
  Average unit volume (2)$  1,346 $  1,304   3.2 % $  4,243 $  4,081   4.0 %
                  
Pre-opening expense$  4,736 $  4,378   8.2 % $  12,801 $  13,529   (5.4)%
                  
Depreciation and amortization $  28,347 $  25,843   9.7 % $  84,574 $  75,492   12.0 %
 As a % of revenue 4.4%4.3%  1 bps4.2%4.1%  9 bps
                  
General and administrative expenses $  35,225 $  35,023   0.6 % $  111,168 $  100,202   10.9 %
 As a % of revenue5.4%5.9%  (48) bps5.5%5.4%  6 bps
                  
                 
(1)  Comparable restaurant sales growth reflects the change in year-over-year sales for restaurants open a full 18 months before the beginning of the period measured, excluding sales from restaurants closed during the period. 
(2)  Average unit volume includes sales from Texas Roadhouse restaurants open for a full six months before the beginning of the period measured, excluding any sales at restaurants closed during the period. 
(3)  Average unit volume restaurants include restaurants open a full six and up to 18 months before the beginning of the period measured. 
 
Amounts may not foot due to rounding. 

Texas Roadhouse logo.jpg

Source: Texas Roadhouse, Inc