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:

 First Quarter
 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.

Investor RelationsMedia
Michael BailenTravis Doster
(502) 515-7298(502) 638-5457

Texas Roadhouse, Inc. and Subsidiaries 
Condensed Consolidated Statements of Income 
(in thousands, except per share data) 
   13 Weeks Ended  
   March 29, 2022 March 30, 2021  
 Restaurant and other sales$980,972  $794,923  
 Franchise royalties and fees6,514  5,706  
Total revenue987,486  800,629  
Costs and expenses:      
 Restaurant operating costs (excluding depreciation and amortization shown separately below):      
  Food and beverage337,396  251,482  
  Labor321,871  258,036  
  Rent16,368  14,452  
  Other operating144,154  123,379  
 Pre-opening4,291  4,268  
 Depreciation and amortization33,620  30,869  
 Impairment and closure, net(646)  504  
 General and administrative40,294  36,712  
Total costs and expenses897,348  719,702  
Income from operations90,138  80,927  
Interest expense, net397  1,460  
Equity income (loss) from investments in unconsolidated affiliates334  (217)  
Income before taxes90,075  79,250  
Income tax expense12,747  12,820  
Net income including noncontrolling interests77,328  66,430  
Less: Net income attributable to noncontrolling interests2,126  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:      
 Basic69,086  69,637  
 Diluted69,373  70,137  
Cash dividends declared per share$0.46  $-  

Texas Roadhouse, Inc. and Subsidiaries 
Condensed Consolidated Balance Sheets 
(in thousands) 
    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)  
    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)   
  13 Weeks Ended  
  March 29, 2022 March 30, 2021    
Income from operations $90,138 $80,927    
Franchise royalties and fees 6,514 5,706    
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) 
   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.