Texas Roadhouse, Inc. (NasdaqGS: TXRH), today
announced financial results for the 13 and 26 week periods ended
June 28, 2016.
Second
Quarter Year to Date ($000's)
2016
2015
% Change
2016
2015
% Change
Total revenue $ 508,808 $ 454,698 12 % $ 1,024,367 $ 914,928
12 % Income from operations 49,782 31,696 57 % 102,593 80,296 28 %
Net income 33,605 21,138 59 % 69,198 53,430 30 % Diluted EPS $ 0.47
$ 0.30 58 % $ 0.98 $ 0.76 29 %
Results for the second quarter included the following
highlights:
- Comparable restaurant sales growth of
4.5% at company restaurants and 2.6% at franchise restaurants;
- Restaurant margin, as a percentage of
restaurant sales, increased 302 basis points to 19.2%, primarily
driven by lower food costs;
- Diluted earnings per share increased
58.5% to $0.47 from $0.30 in the prior year; and,
- Seven company-owned restaurants were
opened, including one Bubba’s 33 restaurant.
Results for year-to-date included the following highlights:
- Comparable restaurant sales increased
4.5% at company restaurants and 2.8% at franchise restaurants;
- Restaurant margin, as a percentage of
restaurant sales, increased 208 basis points to 19.7% primarily
driven by lower food costs;
- Diluted earnings per share increased
29.1% to $0.98 from $0.76 in the prior year;
- The Company recorded a pre-tax charge
of $5.5 million ($3.4 million after-tax) related to a legal
settlement which had a $0.05 impact on diluted earnings per share
and a 6.3% impact on diluted earnings per share growth;
- 14 company-owned restaurants were
opened, including three Bubba’s 33 restaurants; and,
- The Company repurchased 114,700 shares
of its common stock for $4.1 million.
Kent Taylor, Chief Executive Officer of Texas Roadhouse, Inc.,
commented, "Our operators continued to deliver strong operational
and financial results with solid comparable restaurant sales growth
and an increase in restaurant margin. Positive guest counts
primarily drove the increase in comparable restaurant sales,
marking our 26th consecutive quarter of growth, while lower
commodity costs continued to pave the way for margin expansion. On
the development front, we are on track to open approximately 30
company restaurants this year and we continue to fill our new
restaurant pipeline for next year and beyond."
2016 Outlook
The Company reported that comparable restaurant sales at company
restaurants for the first four weeks of its third quarter of fiscal
2016 increased approximately 3.7% compared to the prior year
period.
Management updated the following expectation for 2016:
- 2.5% to 3.0% food cost deflation
compared to previous guidance of 1.0% to 2.0% food cost
deflation.
Management reiterated the following expectations for 2016:
- Positive comparable restaurant sales
growth;
- Approximately 30 company restaurant
openings, including approximately seven Bubba’s 33
restaurants;
- An income tax rate of approximately
30.0%; and,
- Total capital expenditures of $165.0
million to $175.0 million.
Conference Call
The Company is hosting a conference call today, August 1, 2016
at 5:00 p.m. Eastern Time to discuss these results. The dial-in
number is (888) 334-3004 or (719) 325-2410 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 8691041 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 500 restaurants system-wide in 49
states and five 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;
food safety and food-borne illness concerns; 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.
Texas Roadhouse, Inc. and Subsidiaries Condensed
Consolidated Statements of Income (in thousands, except per
share data) (unaudited)
13 Weeks Ended 26 Weeks Ended
June 28, 2016 June 30, 2015 June 28, 2016 June 30, 2015
Revenue: Restaurant sales $ 504,630 $ 450,692 $ 1,015,914 $ 906,985
Franchise royalties and fees 4,178 4,006 8,453
7,943 Total revenue 508,808 454,698
1,024,367 914,928 Costs and expenses:
Restaurant operating costs (excluding depreciation and amortization
shown separately below): Cost of sales 171,551 168,077 344,679
328,057 Labor 150,014 132,084 297,560 263,488 Rent 10,184 9,138
20,211 18,117 Other operating 75,887 68,358 153,499 137,675
Pre-opening 4,411 4,909 9,236 8,727 Depreciation and amortization
20,238 16,816 39,777 33,151 Impairment and closure 30 - 41 -
General and administrative 26,711 23,620
56,771 45,417 Total costs and expenses 459,026
423,002 921,774 834,632 Income from
operations 49,782 31,696 102,593 80,296 Interest expense,
net 309 495 614 1,010
Equity income from investments in
unconsolidated affiliates
475 467 827 839 Income before
taxes 49,948 31,668 102,806 80,125 Provision for income taxes
15,087 9,402 30,944 24,278 Net
income including noncontrolling interests $ 34,861 $ 22,266 $
71,862 $ 55,847 Less: Net income attributable to noncontrolling
interests 1,256 1,128 2,664 2,417 Net
income attributable to Texas Roadhouse, Inc. and subsidiaries $
33,605 $ 21,138 $ 69,198 $ 53,430
Net income per common share attributable
to Texas Roadhouse, Inc. and subsidiaries:
Basic $ 0.48 $ 0.30 $ 0.98 $ 0.76 Diluted $ 0.47 $ 0.30 $ 0.98 $
0.76 Weighted average shares outstanding: Basic
70,368 70,026 70,269 69,933 Diluted
70,876 70,648 70,840 70,588 Cash
dividends declared per share $ 0.19 $ 0.17 $ 0.38 $ 0.34
Texas Roadhouse, Inc. and Subsidiaries Condensed
Consolidated Balance Sheets (in thousands)
(unaudited) June 28, 2016
December 29, 2015 Cash and cash equivalents $ 95,305
$ 59,334 Other current assets 50,655 74,479 Property and equipment,
net 778,634 751,288 Goodwill 116,571 116,571 Intangible assets, net
4,150 4,827 Other assets 27,886 26,207 Total assets $
1,073,201 $ 1,032,706 Current maturities of long-term
debt 151 144 Other current liabilities 218,725 256,498 Long-term
debt, excluding current maturities 50,472 25,550 Other liabilities
78,731 73,332 Texas Roadhouse, Inc. and subsidiaries stockholders'
equity 717,425 669,662 Noncontrolling interests 7,697 7,520
Total liabilities and equity $ 1,073,201 $ 1,032,706
Texas Roadhouse, Inc. and Subsidiaries Condensed
Consolidated Statements of Cash Flows (in thousands)
(unaudited) 26
Weeks Ended June 28, 2016 June 30, 2015
Cash flows
from operating activities: Net income including noncontrolling
interests $ 71,862 $ 55,847 Adjustments to reconcile net income to
net cash provided by operating activities Depreciation and
amortization 39,777 33,151 Share-based compensation expense 11,703
10,215 Other noncash adjustments (493 ) (2,992 ) Change in working
capital (8,781 ) (1,398 ) Net cash provided by
operating activities 114,068 94,823
Cash flows from investing activities: Capital
expenditures - property and equipment (69,159 ) (70,933 ) Proceeds
from sale of property and equipment, including insurance proceeds
- 9 Net cash used in investing
activities (69,159 ) (70,924 )
Cash flows
from financing activities: Proceeds from revolving credit
facility 25,000 - Repurchase shares of common stock (4,110 ) (3,138
) Dividends paid (25,277 ) (34,247 ) Other financing activities
(4,551 ) (1,671 ) Net cash used in financing
activities (8,938 ) (39,056 ) Net increase
(decrease) in cash and cash equivalents 35,971 (15,157 ) Cash and
cash equivalents - beginning of period 59,334
86,122 Cash and cash equivalents - end of period $ 95,305
$ 70,965
Texas Roadhouse, Inc. and
Subsidiaries Supplemental Financial and Operating
Information ($ amounts in thousands, except weekly sales by
group) (unaudited)
Second Quarter Change Year to
Date Change
2016
2015
vs LY
2016
2015
vs LY
Restaurant openings Company - Texas Roadhouse 6 6 0 11 8 3
Company - Bubba's 33 1 2 (1 ) 3 3 0 Company - Other 0 1 (1 ) 0 1 (1
) Franchise - Texas Roadhouse 1 1 0 2 1 1 Total 8 10 (2 ) 16 13 3
Restaurants open at the end of the quarter Company - Texas
Roadhouse 403 376 27 Company - Bubba's 33 10 6 4 Company - Other 2
2 0 Franchise - Texas Roadhouse 84 80 4 Total 499 464 35
Company-owned restaurants Restaurant sales $ 504,630 $ 450,692 12.0
% $ 1,015,914 $ 906,985 12.0 % Store weeks 5,350 4,934 8.4 % 10,612
9,790 8.4 % Comparable restaurant sales growth (1) 4.5 % 8.2 % 4.5
% 8.5 % Texas Roadhouse restaurants only: Comparable restaurant
sales growth (1) 4.5 % 8.2 % 4.5 % 8.5 % Average unit volume (2) $
1,232 $ 1,188 3.7 % $ 2,505 $ 2,409 4.0 % Weekly sales by group:
Comparable restaurants (361 units) $ 95,434 Average unit volume
restaurants (24 units) (3) $ 84,272 Restaurants less than 6 months
old (18 units) $ 98,319 Restaurant operating costs (as a %
of restaurant sales) Cost of sales 34.0 % 37.3 % (330 ) bps 33.9 %
36.2 % (224 ) bps Labor 29.7 % 29.3 % 42 bps 29.3 % 29.1 % 24 bps
Rent 2.0 % 2.0 % (1 ) bps 2.0 % 2.0 % (1 ) bps Other operating 15.0
% 15.2 % (13 ) bps 15.1 % 15.2 % (7 ) bps Total 80.8 % 83.8 % (302
) bps 80.3 % 82.4 % (208 ) bps Restaurant margin (4) 19.2 %
16.2 % 302 bps 19.7 % 17.6 % 208 bps Restaurant margin ($ in
thousands) $ 96,994 $ 73,035 32.8 % $ 199,965 $ 159,648 25.3 %
Restaurant margin $/Store week $ 18,130 $ 14,804 22.5 % $ 18,843 $
16,307 15.6 % Franchise-owned restaurants Franchise
royalties and fees $ 4,178 $ 4,006 4.3 % $ 8,453 $ 7,943 6.4 %
Store weeks 1,088 1,032 5.4 % 2,157 2,059 4.8 % Comparable
restaurant sales growth (1) 2.6 % 6.9 % 2.8 % 7.5 % Average unit
volume (2) $ 1,273 $ 1,274 (0.1 ) % $ 2,590 $ 2,580 0.4 %
Pre-opening expense $ 4,411 $ 4,909 (10.1 ) % $ 9,236 $ 8,727 5.8 %
Depreciation and amortization $ 20,238 $ 16,816 20.3 % $
39,777 $ 33,151 20.0 % As a % of revenue 4.0 % 3.7 % 28 bps 3.9 %
3.6 % 26 bps General and administrative expenses $ 26,711 $
23,620 13.1 % $ 56,771 $ 45,417 25.0 % As a % of revenue 5.2 % 5.2
% 6 bps 5.5 % 5.0 % 58 bps (1) Comparable restaurant sales
growth reflects the change in year-over-year sales for restaurants
open a full 18 months before the beginning of the period measured,
excluding sales from restaurants closed during the period. (2)
Average unit volume includes sales from Texas Roadhouse restaurants
open for a full six months before the beginning of the period
measured, excluding any sales at restaurants closed during the
period. (3) Average unit volume restaurants include restaurants
open a full six to 18 months before the beginning of the period
measured. (4) Restaurant margin represents restaurant sales less
restaurant operating costs, including cost of sales, labor, rent
and other operating costs (as a percentage of restaurant sales).
Depreciation and amortization expense, substantially all of which
relates to restaurant-level asset, is excluded from restaurant
operating costs. Restaurant margin is widely regarded in the
restaurant industry as a useful metric by which to evaluate
restaurant-level operating efficiency and performance. Restaurant
margin is not a measurement determined in accordance with GAAP and
should not be considered in isolation, or as an alternative, to
income from operations or other similarly titled measures of other
companies. Amounts may not foot due to rounding.
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version on businesswire.com: http://www.businesswire.com/news/home/20160801006150/en/
Texas Roadhouse, Inc.Investor Relations:Tonya Robinson,
502-515-7269orMedia:Travis Doster, 502-638-5457
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