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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) May 4, 2023
TEXAS ROADHOUSE, INC.
(Exact name of registrant as specified in its charter)
| Delaware | 000-50972 | 20-1083890 | ||
| (State or other jurisdiction | (Commission | (IRS Employer | ||
| of incorporation) | File Number) | Identification No.) |
| 6040 Dutchmans Lane, Louisville, KY | 40205 | |
| (Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number, including area code (502) 426-9984
N/A
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
| Title of each Class | Trading Symbol(s) |
Name of each exchange on which registered |
| Common Stock, par value $0.001 per share | TXRH | Nasdaq Global Select Market |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b,2 of this chapter).
Emerging growth company ¨
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
ITEM 2.02. RESULTS OF OPERATIONS AND FINANCIAL CONDITION
On May 4, 2023, Texas Roadhouse, Inc., a Delaware corporation (the “Company”), issued a press release announcing its financial results for the quarter ended March 28, 2023. Attached to this Current Report on Form 8-K as Exhibit 99.1 is a copy of the press release.
ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS
| (d) | EXHIBITS |
| 99.1 | Press Release issued by the Company on May 4, 2023. |
| 104 | Cover Page Interactive File (the cover page XBRL tags are embedded in the Inline XBRL document) |
The information in this Current Report on Form 8-K at Item 2.02 and the Exhibit attached hereto shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section. Such information will not be incorporated by reference into any registration statement filed by the Company under the Securities Act of 1933, as amended, unless specifically identified therein as being incorporated by reference.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| TEXAS ROADHOUSE, INC. | ||
| Date: May 4, 2023 | By: | /s/ Keith V. Humpich |
| Keith V. Humpich | ||
| Interim Chief Financial Officer | ||
Exhibit 99.1
Texas Roadhouse, Inc. Announces First Quarter 2023 Results
LOUISVILLE, KY. (May 4, 2023) – Texas Roadhouse, Inc. (NasdaqGS: TXRH), today announced financial results for the 13 weeks ended March 28, 2023.
Financial Results
Financial results for the 13 weeks ended March 28, 2023 and March 29, 2022 were as follows:
| First Quarter | ||||||||||||
| ($000’s) | 2023 | 2022 | % change | |||||||||
| Total revenue | $ | 1,174,356 | $ | 987,486 | 18.9 | % | ||||||
| Income from operations | 100,945 | 90,138 | 12.0 | % | ||||||||
| Net income | 86,387 | 75,202 | 14.9 | % | ||||||||
| Diluted earnings per share | $ | 1.28 | $ | 1.08 | 18.4 | % | ||||||
Results for the first quarter, as compared to the prior year as applicable, included the following:
| · | Comparable restaurant sales increased 12.9% at company restaurants and increased 13.3% at domestic franchise restaurants; |
| · | Average weekly sales at company restaurants were $148,437 of which 12.8% were to-go sales as compared to average weekly sales of $132,263 of which 14.8% were to-go sales in the prior year; |
| · | Restaurant margin dollars increased 15.2% to $185.7 million from $161.2 million in the prior year primarily due to higher sales. Restaurant margin, as a percentage of restaurant and other sales, decreased 53 basis points to 15.9% as commodity inflation of 8.9% and wage and other labor inflation of 8.0% were partially offset by higher sales; |
| · | Diluted earnings per share increased 18.4% primarily driven by higher restaurant margin dollars partially offset by higher general and administrative expenses; |
| · | Six company restaurants and one international franchise restaurant were opened and eight domestic franchise restaurants were acquired; and, |
| · | The Company repurchased 92,751 shares of common stock for $9.6 million. |
Jerry Morgan, Chief Executive Officer of Texas Roadhouse, Inc. commented, “I want to thank our restaurant operators for continuing to provide a legendary experience to our guests, which led to record traffic and sales levels as well as higher profitability for the quarter.”
Morgan continued, “On the capital allocation front, our development pipeline remains strong, we acquired eight domestic franchise restaurants, and we further strengthened our capital position by repaying the remainder of our debt. We are confident that our restaurant growth, commitment to our operating fundamentals, and strong balance sheet will continue to provide us the flexibility to generate long-term shareholder value.”
2023 Outlook
Comparable restaurant sales at company restaurants for the first five weeks of our second quarter of fiscal 2023 increased 8.6% compared to 2022. In addition, the Company implemented a menu price increase of approximately 2.2% in late March.
Management reiterated the following expectations for 2023:
| · | Positive comparable restaurant sales growth including the benefit of menu pricing actions; |
| · | 25 to 30 Texas Roadhouse and Bubba’s 33 company restaurant openings; |
| · | Store week growth of at least 6% including the impact of the franchise locations acquired; |
| · | Commodity cost inflation of 5% to 6%; |
| · | Wage and other labor inflation of 5% to 6%; |
| · | An effective income tax rate of approximately 14% excluding the impact of any legislative changes enacted; and, |
| · | Total capital expenditures of approximately $265 million. |
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 also includes sales and operating costs related to the Company’s non-royalty based retail initiatives. 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 core restaurant-level operating efficiency and performance over various reporting periods on a consistent basis. In calculating restaurant margin, the Company excludes certain non-restaurant-level costs that support operations, including general and administrative expenses, but do not have a direct impact on restaurant-level operational efficiency and performance. The Company also excludes pre-opening expense as it occurs at irregular intervals and would impact comparability to prior period results. 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 4, 2023, 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 2023 Earnings. A replay of the call will be available until May 11, 2023, 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 700 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; changes in consumer discretionary spending and macroeconomic conditions, including inflationary pressures; 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 27, 2022. 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
Consolidated Statements of Income
(in thousands, except per share data)
(unaudited)
| 13 Weeks Ended | ||||||||
| March 28, 2023 | March 29, 2022 | |||||||
| Revenue: | ||||||||
| Restaurant and other sales | $ | 1,167,583 | $ | 980,972 | ||||
| Franchise royalties and fees | 6,773 | 6,514 | ||||||
| Total revenue | 1,174,356 | 987,486 | ||||||
| Costs and expenses: | ||||||||
| Restaurant operating costs (excluding depreciation and amortization shown separately below): | ||||||||
| Food and beverage | 410,711 | 337,396 | ||||||
| Labor | 385,819 | 321,871 | ||||||
| Rent | 17,828 | 16,368 | ||||||
| Other operating | 167,529 | 144,154 | ||||||
| Pre-opening | 5,377 | 4,291 | ||||||
| Depreciation and amortization | 36,227 | 33,620 | ||||||
| Impairment and closure, net | 55 | (646 | ) | |||||
| General and administrative | 49,865 | 40,294 | ||||||
| Total costs and expenses | 1,073,411 | 897,348 | ||||||
| Income from operations | 100,945 | 90,138 | ||||||
| Interest income (expense), net | 1,238 | (397 | ) | |||||
| Equity income from investments in unconsolidated affiliates | 755 | 334 | ||||||
| Income before taxes | 102,938 | 90,075 | ||||||
| Income tax expense | 14,334 | 12,747 | ||||||
| Net income including noncontrolling interests | 88,604 | 77,328 | ||||||
| Less: Net income attributable to noncontrolling interests | 2,217 | 2,126 | ||||||
| Net income attributable to Texas Roadhouse, Inc. and subsidiaries | $ | 86,387 | $ | 75,202 | ||||
| Net income per common share attributable to Texas Roadhouse, Inc. and subsidiaries: | ||||||||
| Basic | $ | 1.29 | $ | 1.09 | ||||
| Diluted | $ | 1.28 | $ | 1.08 | ||||
| Weighted average shares outstanding: | ||||||||
| Basic | 67,016 | 69,086 | ||||||
| Diluted | 67,293 | 69,373 | ||||||
| Cash dividends declared per share | $ | 0.55 | $ | 0.46 | ||||
Texas Roadhouse, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(in thousands)
(unaudited)
| March 28, 2023 | December 27, 2022 | |||||||
| Cash and cash equivalents | $ | 156,143 | $ | 173,861 | ||||
| Other current assets, net | 112,575 | 222,980 | ||||||
| Property and equipment, net | 1,310,782 | 1,270,349 | ||||||
| Operating lease right-of-use assets, net | 643,485 | 630,258 | ||||||
| Goodwill | 169,641 | 148,732 | ||||||
| Intangible assets, net | 5,859 | 5,607 | ||||||
| Other assets | 76,380 | 73,878 | ||||||
| Total assets | $ | 2,474,865 | $ | 2,525,665 | ||||
| Other current liabilities | 588,098 | 652,010 | ||||||
| Operating lease liabilities, net of current portion | 692,016 | 677,874 | ||||||
| Long-term debt | - | 50,000 | ||||||
| Other liabilities | 124,212 | 118,119 | ||||||
| Texas Roadhouse, Inc. and subsidiaries stockholders’ equity | 1,055,248 | 1,012,638 | ||||||
| Noncontrolling interests | 15,291 | 15,024 | ||||||
| Total liabilities and equity | $ | 2,474,865 | $ | 2,525,665 | ||||
Texas Roadhouse, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
| 13 Weeks Ended | ||||||||
| March 28, 2023 | March 29, 2022 | |||||||
| Cash flows from operating activities: | ||||||||
| Net income including noncontrolling interests | $ | 88,604 | $ | 77,328 | ||||
| Adjustments to reconcile net income to net cash provided by operating activities | ||||||||
| Depreciation and amortization | 36,227 | 33,620 | ||||||
| Share-based compensation expense | 8,154 | 9,120 | ||||||
| Deferred income taxes | 2,988 | 2,630 | ||||||
| Other noncash adjustments, net | 666 | 1,187 | ||||||
| Change in working capital | 52,342 | 63,884 | ||||||
| Net cash provided by operating activities | 188,981 | 187,769 | ||||||
| Cash flows from investing activities: | ||||||||
| Capital expenditures - property and equipment | (66,733 | ) | (49,029 | ) | ||||
| Acquistion of franchise restaurants, net of cash acquired | (39,111 | ) | (26,437 | ) | ||||
| Proceeds from sale of investment in unconsolidated affiliate | 472 | - | ||||||
| Proceeds from sale of property and equipment | - | 2,188 | ||||||
| Proceeds from sale leaseback transactions | 2,072 | - | ||||||
| Net cash used in investing activities | (103,300 | ) | (73,278 | ) | ||||
| Cash flows from financing activities: | ||||||||
| Payments on revolving credit facility, net | (50,000 | ) | - | |||||
| Repurchase of shares of common stock | (9,623 | ) | (84,705 | ) | ||||
| Dividends paid | (36,878 | ) | (31,795 | ) | ||||
| Other financing activities, net | (6,898 | ) | (7,913 | ) | ||||
| Net cash used in financing activities | (103,399 | ) | (124,413 | ) | ||||
| Net decrease in cash and cash equivalents | (17,718 | ) | (9,922 | ) | ||||
| Cash and cash equivalents - beginning of period | 173,861 | 335,645 | ||||||
| Cash and cash equivalents - end of period | $ | 156,143 | $ | 325,723 | ||||
Texas Roadhouse, Inc. and Subsidiaries
Reconciliation of Income from Operations to Restaurant Margin
(in thousands)
(unaudited)
| 13 Weeks Ended | ||||||||
| March 28, 2023 | March 29, 2022 | |||||||
| Income from operations | $ | 100,945 | $ | 90,138 | ||||
| Less: | ||||||||
| Franchise royalties and fees | 6,773 | 6,514 | ||||||
| Add: | ||||||||
| Pre-opening | 5,377 | 4,291 | ||||||
| Depreciation and amortization | 36,227 | 33,620 | ||||||
| Impairment and closure, net | 55 | (646 | ) | |||||
| General and administrative | 49,865 | 40,294 | ||||||
| Restaurant margin | $ | 185,696 | $ | 161,183 | ||||
| Restaurant margin (as a percentage of restaurant and other sales) | 15.9 | % | 16.4 | % | ||||
Texas Roadhouse, Inc. and Subsidiaries
Supplemental Financial and Operating Information
($ amounts in thousands, except weekly sales by group)
(unaudited)
| First Quarter | ||||||||||||
| 2023 | 2022 | Change | ||||||||||
| Restaurant openings | ||||||||||||
| Company - Texas Roadhouse | 4 | 3 | 1 | |||||||||
| Company - Bubba’s 33 | 0 | 0 | 0 | |||||||||
| Company - Jaggers | 2 | 0 | 2 | |||||||||
| Franchise - Texas Roadhouse - U.S. | 0 | 0 | 0 | |||||||||
| Franchise - Texas Roadhouse - International | 1 | 2 | (1 | ) | ||||||||
| Total | 7 | 5 | 2 | |||||||||
| Restaurant acquisitions/dispositions | ||||||||||||
| Company - Texas Roadhouse | 8 | 7 | 1 | |||||||||
| Franchise - Texas Roadhouse - U.S. | (8 | ) | (7 | ) | (1 | ) | ||||||
| Restaurants open at the end of the quarter | ||||||||||||
| Company - Texas Roadhouse | 564 | 536 | 28 | |||||||||
| Company - Bubba’s 33 | 40 | 36 | 4 | |||||||||
| Company - Jaggers | 7 | 4 | 3 | |||||||||
| Franchise - Texas Roadhouse - U.S. | 54 | 63 | (9 | ) | ||||||||
| Franchise - Texas Roadhouse - International | 39 | 33 | 6 | |||||||||
| Total | 704 | 672 | 32 | |||||||||
| First Quarter | ||||||||||||
| 2023 | 2022 | Change | ||||||||||
| Company restaurants (all concepts) | ||||||||||||
| Restaurant and other sales | $ | 1,167,583 | $ | 980,972 | 19.0 | % | ||||||
| Store weeks | 7,900 | 7,456 | 6.0 | % | ||||||||
| Comparable restaurant sales (1) | 12.9 | % | 16.0 | % | ||||||||
| Restaurant operating costs (as a % of restaurant and other sales) | ||||||||||||
| Food and beverage costs | 35.2 | % | 34.4 | % | 78 | bps | ||||||
| Labor | 33.0 | % | 32.8 | % | 23 | bps | ||||||
| Rent | 1.5 | % | 1.7 | % | (14 | ) bps | ||||||
| Other operating | 14.3 | % | 14.7 | % | (35 | ) bps | ||||||
| Total | 84.1 | % | 83.6 | % | 53 | bps | ||||||
| Restaurant margin | 15.9 | % | 16.4 | % | (53 | ) bps | ||||||
| Restaurant margin ($ in thousands) | $ | 185,696 | $ | 161,183 | 15.2 | % | ||||||
| Restaurant margin $/Store week | $ | 23,505 | $ | 21,618 | 8.7 | % | ||||||
| Texas Roadhouse restaurants only: | ||||||||||||
| Store weeks | 7,304 | 6,936 | 5.3 | % | ||||||||
| Comparable restaurant sales (1) | 13.1 | % | 15.8 | % | ||||||||
| Average unit volume (2) | $ | 1,966 | $ | 1,741 | 12.9 | % | ||||||
| Weekly sales by group: | ||||||||||||
| Comparable restaurants (527 and 498 units) | $ | 151,439 | $ | 134,422 | ||||||||
| Average unit volume restaurants (22 and 20 units) | $ | 146,220 | $ | 129,143 | ||||||||
| Restaurants less than 6 months old (15 and 18 units) | $ | 162,150 | $ | 140,535 | ||||||||
| Bubba’s 33 restaurants only: | ||||||||||||
| Store weeks | 520 | 468 | 11.1 | % | ||||||||
| Comparable restaurant sales (1) | 8.7 | % | 21.3 | % | ||||||||
| Average unit volume (2) | $ | 1,521 | $ | 1,398 | 8.8 | % | ||||||
| Weekly sales by group: | ||||||||||||
| Comparable restaurants (34 and 30 units) | $ | 116,916 | $ | 107,387 | ||||||||
| Average unit volume restaurants (3 and 4 units) | $ | 117,920 | $ | 108,771 | ||||||||
| Restaurants less than 6 months old (3 and 2 units) | $ | 127,955 | $ | 140,855 | ||||||||
| Franchise restaurants | ||||||||||||
| Franchise royalties and fees | $ | 6,773 | $ | 6,514 | 4.0 | % | ||||||
| Store weeks | 1,205 | 1,237 | (2.6 | )% | ||||||||
| Comparable restaurant sales | 13.0 | % | 22.9 | % | ||||||||
| U.S. franchise restaurants only: | ||||||||||||
| Comparable restaurant sales | 13.3 | % | 20.4 | % | ||||||||
| Average unit volume | $ | 2,122 | $ | 1,855 | 14.4 | % | ||||||
(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.