Texas Roadhouse, Inc. Announces First Quarter 2022 Results

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:

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.