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Texas Roadhouse, Inc. Announces First Quarter 2022 Results

May 5, 2022

LOUISVILLE, Ky., May 05, 2022 (GLOBE NEWSWIRE) -- Texas Roadhouse, Inc. (NasdaqGS: TXRH), today announced financial results for the 13 weeks ended March 29, 2022.

Financial Results

Financial results for the 13 weeks ended March 29, 2022 and March 30, 2021 were as follows:

  First Quarter
($000's)            
  2022   2021     % change
Total revenue $ 987,486   $ 800,629     23.3%
Income from operations   90,138     80,927     11.4%
Net income   75,202     64,150     17.2%
Diluted earnings per share $ 1.08   $ 0.91     18.5%

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

  • Comparable restaurant sales increased 16.0% at company restaurants and increased 20.4% at domestic franchise restaurants;
  • Average weekly sales at company restaurants were $132,263 of which 14.8% were to-go sales as compared to average weekly sales of $114,201 of which 22.3% were to-go sales in the prior year;
  • Restaurant margin, as a percentage of restaurant and other sales, decreased 213 basis points to 16.4%. Restaurant margin was negatively impacted by commodity inflation of 17.0%, primarily due to higher protein costs, partially offset by the benefit of an increase in comparable restaurant sales. Restaurant margin dollars increased 9.2% to $161.2 million from $147.6 million in the prior year;
  • Diluted earnings per share increased to $1.08 from $0.91 in the prior year primarily due to higher restaurant margin dollars;
  • Three company restaurants and two international franchise restaurants were opened;
  • The Company repurchased 1,060,618 shares of common stock for $84.7 million; and,
  • The Company ended the quarter with $325.7 million of cash on hand and continued to maintain debt of $100 million.

Jerry Morgan, Chief Executive Officer of Texas Roadhouse, Inc. commented, “We continue to be very pleased with the sales levels that are being generated thanks to the hard work of our operators. While higher costs are impacting our bottom line, we remain focused on what we can control – providing legendary food and legendary service each and every shift.”

Morgan continued, “Our healthy cashflow continues to allow us to grow our brands through new store development. We also repurchased over one million shares of our common stock this quarter, which is our most significant buyback since before the pandemic. We believe our new store growth, share buybacks and the continued growth in our dividends reflect the on-going commitment to our shareholders.”

Franchise Acquisitions

On the first day of the 2022 fiscal year, the Company completed the acquisition of seven franchise restaurants in South Carolina and Georgia for an aggregate purchase price of $26.4 million.

Share Repurchases

On March 17, 2022, the Company’s Board of Directors approved a stock repurchase program under which the Company may repurchase up to $300.0 million of its common stock. This program has no expiration date and replaces a previous stock repurchase program. As of March 29, 2022, $295.0 million remained under the new authorized stock repurchase program. During the first five weeks of the second quarter of fiscal 2022, the Company repurchased 351,820 shares of common stock for $29.2 million.

2022 Outlook        

Comparable restaurant sales at company restaurants for the first five weeks of the second quarter of fiscal 2022 increased 9.3% compared to the prior year.  

Management reiterated the following expectations for 2022:

  • Positive comparable restaurant sales growth including a menu price increase of 3.2% that was implemented in April;
  • Approximately 25 Texas Roadhouse and Bubba's 33 company restaurant openings;
  • Store week growth of approximately 6.5%, including the impact of the seven franchise locations acquired;
  • Commodity cost inflation of 12% to 14% for the year;
  • Wage and other labor inflation of approximately 7%;
  • An effective income tax rate of approximately 15% excluding the impact of any legislative changes enacted; and,
  • Total capital expenditures of approximately $230 million including as many as five relocations.

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, May 5, 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. First Quarter 2022 Earnings. A replay of the call will be available until May 12, 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 670 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 reinstated 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; 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 Media
Michael Bailen Travis Doster
(502) 515-7298 (502) 638-5457

 

Texas Roadhouse, Inc. and Subsidiaries  
Condensed Consolidated Statements of Income  
(in thousands, except per share data)  
(unaudited)  
                 
           
      13 Weeks Ended    
      March 29, 2022   March 30, 2021    
                 
Revenue:            
  Restaurant and other sales $ 980,972     $ 794,923    
  Franchise royalties and fees 6,514     5,706    
                 
Total revenue 987,486     800,629    
                 
Costs and expenses:            
  Restaurant operating costs (excluding depreciation and amortization shown separately below):            
             
    Food and beverage 337,396     251,482    
    Labor 321,871     258,036    
    Rent 16,368     14,452    
    Other operating 144,154     123,379    
  Pre-opening 4,291     4,268    
  Depreciation and amortization 33,620     30,869    
  Impairment and closure, net (646)     504    
  General and administrative 40,294     36,712    
                 
Total costs and expenses 897,348     719,702    
                 
Income from operations 90,138     80,927    
                 
Interest expense, net 397     1,460    
Equity income (loss) from investments in unconsolidated affiliates 334     (217)    
                 
Income before taxes 90,075     79,250    
Income tax expense 12,747     12,820    
                 
Net income including noncontrolling interests 77,328     66,430    
Less: Net income attributable to noncontrolling interests 2,126     2,280    
Net income attributable to Texas Roadhouse, Inc. and subsidiaries $ 75,202     $ 64,150    
                 
Net income per common share attributable to Texas Roadhouse, Inc. and subsidiaries:            
  Basic $ 1.09     $ 0.92    
  Diluted $ 1.08     $ 0.91    
                 
Weighted average shares outstanding:            
  Basic 69,086     69,637    
  Diluted 69,373     70,137    
                 
Cash dividends declared per share $ 0.46     $ -    
                 

 

Texas Roadhouse, Inc. and Subsidiaries  
Condensed Consolidated Balance Sheets  
(in thousands)  
(unaudited)  
                     
                     
                     
        March 29,2022   December 28, 2021    
                     
                     
  Cash and cash equivalents   $ 325,723     $ 335,645      
  Other current assets, net   100,264     227,880      
  Property and equipment, net   1,181,707     1,162,441      
  Operating lease right-of-use assets, net   605,146     578,413      
  Goodwill   144,334     127,001      
  Intangible assets, net   6,848     1,520      
  Other assets   73,298     79,052      
                     
  Total assets   $ 2,437,320     $ 2,511,952      
                     
                     
  Other current liabilities   541,774     602,144      
  Operating lease liabilities, net of current portion   649,069     622,892      
  Long-term debt   100,000     100,000      
  Other liabilities   111,218     113,432      
  Texas Roadhouse, Inc. and subsidiaries stockholders' equity   1,019,780     1,058,124      
  Noncontrolling interests   15,479     15,360      
                     
  Total liabilities and equity   $ 2,437,320     $ 2,511,952      
                     

 

Texas Roadhouse, Inc. and Subsidiaries    
Condensed Consolidated Statements of Cash Flows    
(in thousands)    
(unaudited)    
                   
                   
        13 Weeks Ended    
        March 29, 2022   March 30, 2021  
                   
                   
Cash flows from operating activities:              
Net income including noncontrolling interests   $ 77,328     $ 66,430    
Adjustments to reconcile net income to net cash provided by operating activities              
  Depreciation and amortization   33,620     30,869    
  Share-based compensation expense   9,120     9,908    
  Deferred income taxes   2,630     1,025    
  Other noncash adjustments, net   1,187     1,166    
Change in working capital   63,884     68,615    
    Net cash provided by operating activities   187,769     178,013    
                   
Cash flows from investing activities:              
Capital expenditures - property and equipment   (49,029)     (38,666)    
Acquisition of franchise restaurants, net of cash acquired   (26,437)     -    
Proceeds from sale of property and equipment   2,188     -    
Proceeds from sale leaseback transactions   -     2,192    
    Net cash used in investing activities   (73,278)     (36,474)    
                   
Cash flows from financing activities:              
Repurchase of shares of common stock   (84,705)     -    
Dividends paid   (31,795)     -    
Other financing activities, net   (7,913)     (9,048)    
    Net cash used in financing activities   (124,413)     (9,048)    
                   
    Net (decrease) increase in cash and cash equivalents   (9,922)     132,491    
Cash and cash equivalents - beginning of period   335,645     363,155    
Cash and cash equivalents - end of period   $ 325,723     $ 495,646    
                   

 

Texas Roadhouse, Inc. and Subsidiaries      
Reconciliation of Income from Operations to Restaurant Margin      
(in thousands)      
(unaudited)      
                 
    13 Weeks Ended    
    March 29, 2022   March 30, 2021        
                 
Income from operations   $ 90,138   $ 80,927        
                 
Less:                
Franchise royalties and fees   6,514   5,706        
                 
Add:                
Pre-opening   4,291   4,268        
Depreciation and amortization   33,620   30,869        
Impairment and closure, net   (646)   504        
General and administrative   40,294   36,712        
                 
Restaurant margin   $ 161,183   $ 147,574        
                 
Restaurant margin (as a percentage of restaurant and other sales)   16.4%   18.6%        
                 

 

Texas Roadhouse, Inc. and Subsidiaries  
Supplemental Financial and Operating Information  
($ amounts in thousands, except weekly sales by group)  
(unaudited)  
                 
      First Quarter      
       2022    2021   Change  
Restaurant openings            
  Company - Texas Roadhouse   3       2   1    
  Company - Bubba's 33   0       1   (1)    
  Company - Jaggers   0       0   0    
  Franchise - Texas Roadhouse - U.S.   0       0   0    
  Franchise - Texas Roadhouse - International   2       0   2    
  Total   5       3   2    
                 
Restaurant acquisitions/dispositions            
  Company - Texas Roadhouse   7       0   7    
  Franchise - Texas Roadhouse - U.S.   (7)       0   (7)    
                 
                 
Restaurants open at the end of the quarter            
  Company - Texas Roadhouse   536       505   31    
  Company - Bubba's 33   36       32   4    
  Company - Jaggers   4       3   1    
  Franchise - Texas Roadhouse - U.S.   63       69   (6)    
  Franchise - Texas Roadhouse - International   33       28   5    
  Total   672       637   35    
                 
      First Quarter  
       2022    2021   Change  
Company restaurants (all concepts)            
  Restaurant and other sales $ 980,972     $ 794,923   23.4   %
  Store weeks   7,456       6,995   6.6   %
  Comparable restaurant sales (1)   16.0   %   18.5 %    
                 
  Restaurant operating costs (as a % of restaurant and other sales)          
  Food and beverage costs   34.4   %   31.6 % 276   bps
  Labor   32.8   %   32.5 % 35   bps
  Rent   1.7   %   1.8 % (15 ) bps
  Other operating   14.7   %   15.5 % (83 ) bps
  Total   83.6   %   81.4 % 213   bps
                 
    Restaurant margin   16.4   %   18.6 % (213 ) bps
                 
    Restaurant margin ($ in thousands) $ 161,183     $ 147,574   9.2   %
    Restaurant margin $/Store week $ 21,618     $ 21,097   2.5   %
                 
  Texas Roadhouse restaurants only:            
    Store weeks   6,936       6,551   5.9   %
    Comparable restaurant sales   15.8   %   18.3 %    
    Average unit volume (2) $ 1,745     $ 1,509   15.6   %
    Weekly sales by group:        
    Comparable restaurants (498 and 473 units) $ 134,422     $ 116,816      
    Average unit volume restaurants (20 and 18 units) $ 129,143     $ 96,780      
    Restaurants less than 6 months old (18 and 14 units) $ 140,535     $ 117,833      
                 
  Bubba's 33 restaurants only:            
    Store weeks   468       405   15.6   %
    Comparable restaurant sales   21.3   %   24.1 %    
    Average unit volume (2) $ 1,398     $ 1,151   21.5   %
    Weekly sales by group:        
    Comparable restaurants (30 and 25 units) $ 107,387     $ 91,663      
    Average unit volume restaurants (4 and 5 units) $ 108,771     $ 72,742      
    Restaurants less than 6 months old (2 and 2 units) $ 140,855     $ 75,610      
                 
Franchise restaurants            
  Franchise royalties and fees $ 6,514     $ 5,706   14.2   %
  Store weeks   1,237       1,261   (1.9 ) %
  Comparable restaurant sales   22.9   %   13.2 %    
  U.S. franchise restaurants only:            
    Comparable restaurant sales   20.4   %   15.2 %    
    Average unit volume $ 1,810     $ 1,552   16.7   %
                 
(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
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