Texas Roadhouse, Inc. Announces First Quarter 2024 Results

Texas Roadhouse, Inc. (NasdaqGS: TXRH) today announced financial results for the 13 weeks ended March 26, 2024.

Financial Results

Financial results for the 13 weeks ended March 26, 2024 and March 28, 2023 were as follows:

13 Weeks Ended
($000’s, except per share amounts) March 26, 2024 March 28, 2023 % change
Total revenue $ 1,321,217 $ 1,174,356 12.5 %
Income from operations 133,128 100,945 31.9 %
Net income 113,206 86,387 31.0 %
Diluted earnings per share $ 1.69 $ 1.28 31.4 %

Results for the 13 weeks ended March 26, 2024, as compared to the prior year as applicable, included the following:

  • Comparable restaurant sales increased 8.4% at company restaurants and increased 7.7% at domestic franchise restaurants;
  • Average weekly sales at company restaurants were $159,378 of which $20,815 were to-go sales as compared to average weekly sales of $148,437 of which $19,030 were to-go sales in the prior year;
  • Restaurant margin dollars increased 23.0% to $228.4 million from $185.7 million in the prior year primarily due to higher sales. Restaurant margin, as a percentage of restaurant and other sales, increased to 17.4% from 15.9% in the prior year driven by higher sales partially offset by higher general liability insurance expense. The benefit of a higher average guest check and improved labor productivity more than offset wage and other labor inflation of 4.3% and commodity inflation of 0.9%;
  • Diluted earnings per share increased 31.4% primarily driven by higher restaurant margin dollars partially offset by higher general and administrative expenses and higher depreciation and amortization expenses;
  • Nine company restaurants and three franchise restaurants were opened; and
  • Capital allocation spend included capital expenditures of $77.7 million, dividends of $40.8 million, and repurchases of common stock of $8.9 million.

Jerry Morgan, Chief Executive Officer of Texas Roadhouse, Inc. commented, “We are off to a tremendous start in 2024 with strong traffic trends continuing to drive our sales growth. These results demonstrate the success of our operators’ commitment to providing legendary food and service to each guest on every shift.”

Morgan continued, “On the development front, as of today, we have opened 10 company restaurants in 2024 with another 18 currently under construction. We remain confident that our commitment to growth, along with a disciplined capital allocation strategy, will continue to generate long-term shareholder value.”

2024 Outlook

Comparable restaurant sales at company restaurants for the first five weeks of our second quarter of fiscal 2024 increased 9.3% compared to 2023. In addition, the Company implemented a menu price increase of approximately 2.2% in late March.

Management updated the following expectations for 2024:

  • Commodity cost inflation of approximately 3%.

Management reiterated the following expectations for 2024:

  • Positive comparable restaurant sales growth including the benefit of menu pricing actions;
  • Store week growth of approximately 8%, including a benefit of 2% from the 53rd week;
  • Wage and other labor inflation of 4% to 5%;
  • An effective income tax rate of approximately 14%; and
  • Total capital expenditures of $340 million to $350 million.
Texas Roadhouse, Inc. and Subsidiaries
Condensed Consolidated Statements of Income
(in thousands, except per share data)
(unaudited)
13 Weeks Ended
March 26, 2024 March 28, 2023
Revenue:
Restaurant and other sales $ 1,314,152 $ 1,167,583
Franchise royalties and fees 7,065 6,773
Total revenue 1,321,217 1,174,356
Costs and expenses:
Restaurant operating costs (excluding depreciation and amortization shown separately below):
Food and beverage 445,091 410,711
Labor 427,547 385,819
Rent 19,425 17,828
Other operating 193,642 167,529
Pre-opening 8,095 5,377
Depreciation and amortization 41,493 36,227
Impairment and closure, net 201 55
General and administrative 52,595 49,865
Total costs and expenses 1,188,089 1,073,411
Income from operations 133,128 100,945
Interest income, net 1,408 1,238
Equity income from investments in unconsolidated affiliates 257 755
Income before taxes 134,793 102,938
Income tax expense 18,803 14,334
Net income including noncontrolling interests 115,990 88,604
Less: Net income attributable to noncontrolling interests 2,784 2,217
Net income attributable to Texas Roadhouse, Inc. and subsidiaries $ 113,206 $ 86,387
Net income per common share attributable to Texas Roadhouse, Inc. and subsidiaries:
Basic $ 1.69 $ 1.29
Diluted $ 1.69 $ 1.28
Weighted average shares outstanding:
Basic 66,843 67,016
Diluted 67,105 67,293
Cash dividends declared per share $ 0.61 $ 0.55
Texas Roadhouse, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(in thousands)
(unaudited)
March 26, 2024 December 26, 2023
Cash and cash equivalents $ 213,428 $ 104,246
Other current assets, net 130,967 252,228
Property and equipment, net 1,499,860 1,474,722
Operating lease right-of-use assets, net 715,731 694,014
Goodwill 169,684 169,684
Intangible assets, net 2,928 3,483
Other assets 97,803 94,999
Total assets $ 2,830,401 $ 2,793,376
Current liabilities 686,428 745,434
Operating lease liabilities, net of current portion 766,516 743,476
Other liabilities 154,341 146,955
Texas Roadhouse, Inc. and subsidiaries stockholders’ equity 1,207,186 1,141,662
Noncontrolling interests 15,930 15,849
Total liabilities and equity $ 2,830,401 $ 2,793,376
Texas Roadhouse, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
13 Weeks Ended
March 26, 2024 March 28, 2023
Cash flows from operating activities:
Net income including noncontrolling interests $ 115,990 $ 88,604
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization 41,493 36,227
Share-based compensation expense 9,523 8,154
Deferred income taxes 202 2,988
Other noncash adjustments, net 351 666
Change in working capital, net of acquisitions 75,880 52,342
Net cash provided by operating activities 243,439 188,981
Cash flows from investing activities:
Capital expenditures – property and equipment (77,672 ) (66,733 )
Acquisition of franchise restaurants, net of cash acquired — (39,111 )
Proceeds from sale of investments in unconsolidated affiliates — 472
Proceeds from sale of property and equipment 202 —
Proceeds from sale leaseback transactions 2,778 2,072
Net cash used in investing activities (74,692 ) (103,300 )
Cash flows from financing activities:
Payments on revolving credit facility — (50,000 )
Repurchase of shares of common stock (8,941 ) (9,623 )
Dividends paid to shareholders (40,791 ) (36,878 )
Other financing activities, net (9,833 ) (6,898 )
Net cash used in financing activities (59,565 ) (103,399 )
Net increase (decrease) in cash and cash equivalents 109,182 (17,718 )
Cash and cash equivalents – beginning of period 104,246 173,861
Cash and cash equivalents – end of period $ 213,428 $ 156,143
Texas Roadhouse, Inc. and Subsidiaries
Reconciliation of Income from Operations to Restaurant Margin
($ in thousands)
(unaudited)
13 Weeks Ended
March 26, 2024 March 28, 2023
Income from operations $ 133,128 $ 100,945
Less:
Franchise royalties and fees 7,065 6,773
Add:
Pre-opening 8,095 5,377
Depreciation and amortization 41,493 36,227
Impairment and closure, net 201 55
General and administrative 52,595 49,865
Restaurant margin $ 228,447 $ 185,696
Restaurant margin (as a percentage of restaurant and other sales) 17.4 % 15.9 %
Texas Roadhouse, Inc. and Subsidiaries
Supplemental Financial and Operating Information
($ amounts in thousands, except weekly sales by group)
(unaudited)
13 Weeks Ended
March 26, 2024 March 28, 2023 Change
Company restaurants (all concepts)
Restaurant and other sales $ 1,314,152 $ 1,167,583 12.6 %
Store weeks 8,284 7,900 4.9 %
Comparable restaurant sales (1) 8.4 % 12.9 %
Restaurant operating costs (as a % of restaurant and other sales)
Food and beverage costs 33.9 % 35.2 % 131  bps
Labor 32.5 % 33.0 % 51  bps
Rent 1.5 % 1.5 % 5  bps
Other operating 14.7 % 14.3 % (39 )bps
Total 82.6 % 84.1 %
Restaurant margin 17.4 % 15.9 % 148  bps
Restaurant margin ($ in thousands) $ 228,447 $ 185,696 23.0 %
Restaurant margin $/Store week $ 27,577 $ 23,505 17.3 %
Texas Roadhouse restaurants only:
Store weeks 7,595 7,304 4.0 %
Comparable restaurant sales (1) 8.7 % 13.1 %
Average unit volume (2) $ 2,133 $ 1,966 8.5 %
Weekly sales by group:
Comparable restaurants (549 and 527 units) $ 164,332 $ 151,439 8.5 %
Average unit volume restaurants (17 and 22 units) $ 156,114 $ 146,220 6.8 %
Restaurants less than 6 months old (25 and 15 units) $ 149,400 $ 162,150 (7.9 )%
Bubba’s 33 restaurants only:
Store weeks 585 520 12.5 %
Comparable restaurant sales (1) 3.5 % 8.7 %
Average unit volume (2) $ 1,547 $ 1,521 1.7 %
Weekly sales by group:
Comparable restaurants (37 and 34 units) $ 121,086 $ 116,916 3.6 %
Average unit volume restaurants (4 and 3 units) $ 100,079 $ 117,920 (15.1 )%
Restaurants less than 6 months old (4 and 3 units) $ 135,977 $ 127,955 6.3 %
Texas Roadhouse franchise restaurants only:
Store weeks 1,370 1,205 13.7 %
Comparable restaurant sales 6.0 % 13.0 %
U.S. franchise restaurants only:
Comparable restaurant sales (1) 7.7 % 13.3 %
Average unit volume (2) $ 2,288 2,139 7.0 %
(1) Comparable restaurant sales reflect the change in sales for all company restaurants across all concepts, unless otherwise noted, over the same period of the prior year 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.

Texas Roadhouse, Inc. and Subsidiaries
Restaurant Unit Activity
(unaudited)
13 Weeks Ended
March 26, 2024 March 28, 2023 Change
Restaurant openings
Company – Texas Roadhouse 9 4 5
Company – Bubba’s 33 — — —
Company – Jaggers — 2 (2 )
Total company restaurants 9 6 3
Franchise – Texas Roadhouse – Domestic — — —
Franchise – Jaggers – Domestic 1 — 1
Franchise – Texas Roadhouse – Int’l 2 1 1
Total franchise restaurants 3 1 2
Total restaurants 12 7 5
Restaurant acquisitions/dispositions
Company – Texas Roadhouse — 8 (8 )
Franchise – Texas Roadhouse – Domestic — (8 ) 8
Restaurant closures
Franchise – Texas Roadhouse – Domestic — — —
Restaurants open at the end of the quarter
Company – Texas Roadhouse 591 564 27
Company – Bubba’s 33 45 40 5
Company – Jaggers 8 7 1
Total company restaurants 644 611 33
Franchise – Texas Roadhouse – Domestic 56 54 2
Franchise – Jaggers – Domestic 3 — 3
Franchise – Texas Roadhouse – Int’l 50 39 11
Total franchise restaurants 109 93 16
Total restaurants 753 704 49

 

Source: https://www.globenewswire.com

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