Texas Roadhouse, Inc. Announces Third Quarter 2015 Results

Texas Roadhouse, Inc. (NasdaqGS: TXRH), today announced financial results for the 13 and 39 week periods ended September 29, 2015.

Results for the third quarter included the following highlights:

• Comparable restaurant sales increased 6.9% at company restaurants and 7.7% at franchise restaurants;
• Restaurant margin, as a percentage of restaurant sales, decreased 22 basis points to 16.6%, primarily driven by higher labor costs. Wage rate inflation, along with higher healthcare costs, more than offset the impact of higher average unit volume;
• Diluted earnings per share increased 8.0% to $0.29 from $0.27 in the prior year;
• 10 company-owned restaurants were opened, including one Bubba's 33 restaurant; and,
• The Company repurchased 44,000 shares of its common stock for $1.6 million.

Results for year-to-date included the following highlights:

• Comparable restaurant sales increased 8.1% at company restaurants and 7.4% at franchise restaurants;
• Restaurant margin, as a percentage of restaurant sales, decreased 78 basis points to 17.3%. Food cost inflation of approximately 6.0% driven by beef, more than offset the impact of higher average unit volume;
• Diluted earnings per share increased 8.0% to $1.05 from $0.97 in the prior year;
• 22 company-owned restaurants were opened, including four Bubba's 33 restaurants; and,
• The Company repurchased 132,089 shares of its common stock for $4.7 million.

Kent Taylor, Chief Executive Officer of Texas Roadhouse, Inc., commented, "We are pleased with our third quarter results, which included double digit revenue growth comprised of solid comparable restaurant sales growth of 6.9% and store week growth of 7.7% from new restaurant development. Our performance continues to be driven by our commitment to legendary food and legendary service."

Taylor continued, "Our new restaurant pipeline is strong and we remain on track with our development plans for 2015 and 2016. The consistency of our business and our healthy cash flow generation allows us to fund our new restaurant growth through internal cash flow, while also returning excess capital to our shareholders through dividends and share repurchases, driving further shareholder value."

2015 Outlook

The Company reported that comparable restaurant sales at company restaurants for the first four weeks of its fourth quarter of fiscal 2015 increased approximately 5.0% compared to the prior year period.

Management updated the following expectations for 2015:

• Approximately 30 company restaurant openings, including four Bubba’s 33 restaurants (from as many as five Bubba’s 33 restaurants previously);
• Food cost inflation of approximately 5.0% (from 4.0% to 4.5% previously);
• An income tax rate of approximately 30.0% to 30.5%, depending on the reinstatement of certain federal tax credits (from 30.0% to 31.0% previously); and,
• Total capital expenditures of approximately $160.0 million (from $145.0 million to $155.0 million previously).

Management reiterated the following expectation for 2015:

• Mid-single digit comparable restaurant sales growth.

2016 Outlook

Management provided the following expectations for 2016:

• Positive comparable restaurant sales growth;
• 25 to 30 company restaurant openings, including at least five Bubba’s 33 restaurants;
• Low-single digit food cost deflation;
• An income tax rate of 30.0% to 31.0%, depending on the reinstatement of certain federal tax credits; and,
• Total capital expenditures of $155.0 million to $165.0 million.

Conference Call

The Company is hosting a conference call today, November 2, 2015 at 5:00 p.m. Eastern Time to discuss these results. The dial-in number is (877) 604-9668 or (719) 325-4794 for international calls. A replay of the call will be available for one week following the conference call. To access the replay, please dial (877) 870-5176 or (858) 384-5517 for international calls, and use 2485478 as the pass code. There will be a simultaneous Web cast conducted at www.texasroadhouse.com.

About the Company

Texas Roadhouse is a casual dining concept that first opened in 1993 and today operates over 480 restaurants system-wide in 49 states and four foreign countries. For more information, please visit the Company’s Web site at www.texasroadhouse.com.

Forward-looking Statements

Certain statements in this release that are not historical facts, including, without limitation, those relating to our anticipated financial performance, are forward-looking statements that involve risks and uncertainties. Such statements are based upon the current beliefs and expectations of the management of the Company. Actual results may vary materially from those contained in forward-looking statements based on a number of factors including, without limitation, the actual number of restaurants opening; the sales at these and our other company and franchise restaurants; changes in restaurant development or operating costs, such as food and labor; our ability to acquire franchise restaurants; our ability to integrate the franchise restaurants we acquire or other concepts we develop; our ability to continue to generate the necessary cash flows to fund our new restaurant growth, continue our share repurchase program and pay a quarterly cash dividend; strength of consumer spending; pending or future legal claims; breaches of security; conditions beyond our control such as weather, natural disasters, disease outbreaks, epidemics or pandemics impacting our customers or food supplies; acts of war or terrorism and other factors disclosed from time to time in our filings with the U.S. 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. We undertake no obligation to update any forward-looking statements.

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