Texas Roadhouse, Inc. Announces Second Quarter 2024 Results

LOUISVILLE, Ky., July 25, 2024 (GLOBE NEWSWIRE) -- Texas Roadhouse, Inc. (NasdaqGS: TXRH), today announced financial results for the 13 and 26 weeks ended June 25, 2024.

Financial Results

Financial results for the 13 and 26 weeks ended June 25, 2024 and June 27, 2023 were as follows:

Results for the 13 weeks ended June 25, 2024, as compared to the prior year as applicable, included the following:

• Comparable restaurant sales increased 9.3% at company restaurants and increased 8.3% at domestic franchise restaurants;
• Average weekly sales at company restaurants were $158,991 of which $19,975 were to-go sales as compared to average weekly sales of $146,727 of which $18,496 were to-go sales in the prior year;
• Restaurant margin dollars increased 32.7% to $242.6 million from $182.8 million in the prior year primarily due to higher sales. Restaurant margin, as a percentage of restaurant and other sales, increased to 18.2% from 15.7% in the prior year driven by higher sales. The benefit of a higher average guest check and improved labor productivity more than offset wage and other labor inflation of 4.4% and commodity inflation of 0.4%;
• Diluted earnings per share increased 46.4% primarily driven by higher restaurant margin dollars partially offset by higher general and administrative expenses and higher depreciation and amortization expenses;
• Six company restaurants and three franchise restaurants were opened; and
• Capital allocation spend included capital expenditures of $77.8 million, dividends of $40.7 million, and repurchases of common stock of $26.2 million.

Results for the 26 weeks ended June 25, 2024, as compared to the prior year as applicable, included the following:

• Comparable restaurant sales increased 8.9% at company restaurants and increased 8.0% at domestic franchise restaurants;
• Average weekly sales at company restaurants were $159,184 of which $20,392 were to-go sales as compared to average weekly sales of $147,579 of which $18,762 were to-go sales in the prior year;
• Restaurant margin dollars increased 27.8% to $471.1 million from $368.5 million in the prior year primarily due to higher sales. Restaurant margin, as a percentage of restaurant and other sales, increased to 17.8% from 15.8% in the prior year driven by higher sales. The benefit of a higher average guest check and improved labor productivity more than offset wage and other labor inflation of 4.4% and commodity inflation of 0.7%;
• Diluted earnings per share increased 38.7% primarily driven by higher restaurant margin dollars partially offset by higher general and administrative expenses and higher depreciation and amortization expenses;
• 15 company restaurants and six franchise restaurants were opened; and
• Capital allocation spend included capital expenditures of $155.5 million, dividends of $81.5 million, and repurchases of common stock of $35.1 million.

Jerry Morgan, Chief Executive Officer of Texas Roadhouse, Inc. commented, “We continued our momentum in the current quarter as strong traffic trends and some relief on commodity inflation led to increased profitability across all of our brands. With our operators delivering solid operating results, and a balanced development pipeline, we are well positioned for the second half of the year.”

Morgan continued, “We continue to grow our brand globally and now have over 50 international franchise locations. In addition, we recently unveiled our first purpose statement of ‘Serving Communities Across America…and the World’. We are confident that through our focus on this purpose and our commitment to providing legendary food and legendary service, we will continue to generate strong operating results that will enhance long-term shareholder value.”

2024 Outlook

Comparable restaurant sales at company restaurants for the first four weeks of our third quarter of fiscal 2024 increased 8.0% compared to 2023.

Management updated the following expectations for 2024:

• Store week growth of approximately 7.5%, including a benefit of 2% from the 53rd week;
• Commodity cost inflation of approximately 2%;
• An effective income tax rate of approximately 14.5%; and
• Total capital expenditures of $360 million to $370 million.

Management reiterated the following expectations for 2024:

• Positive comparable restaurant sales growth including the benefit of menu pricing actions; and
• Wage and other labor inflation of 4% to 5%.

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, as a percentage of restaurant and other sales, and per store week). 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 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 excludes pre-opening expenses as they occur at irregular intervals and would impact comparability to prior period results. The Company excludes depreciation and amortization expenses, substantially all of which relate to restaurant-level assets, as they represent a non-cash charge for the investment in restaurants. The Company excludes impairment and closure expenses 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, July 25, 2024, 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. Second Quarter 2024 Earnings. A replay of the call will be available until August 1, 2024, by dialing (800) 770-2030 or (609) 800-9909 for international calls and using conference ID 7714420.

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 760 restaurants system-wide in 49 states, one U.S. territory, 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 of 1933, as amended, 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, Inc. Actual results may vary materially from those contained in forward-looking statements based on a number of factors including, without limitation, conditions beyond management’s 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 its 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 26, 2023. 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.