Texas Roadhouse, Inc. (NasdaqGS: TXRH), today
announced financial results for the 13 and 26 week periods ended
June 30, 2015.
Second Quarter Year to Date ($000's)
2015 2014 % Change
2015 2014 % Change
Total revenue $ 454,698 $ 395,363 15 $ 914,928 $ 792,505 15 Income
from operations 31,696 34,401 (8 ) 80,296 74,585 8 Net income
21,138 23,081 (8 ) 53,430 49,546 8 Diluted EPS $ 0.30 $ 0.33 (9 ) $
0.76 $ 0.70 8
Results for the second quarter included the following
highlights:
- Comparable restaurant sales increased
8.2% at company restaurants and 6.9% at franchise restaurants;
- Restaurant margin, as a percentage of
restaurant sales, decreased 193 basis points to 16.2%. Food cost
inflation of approximately 9.4%, mostly driven by beef, more than
offset the impact of higher average unit volume;
- Diluted earnings per share
decreased 8.5% to $0.30 from $0.33 in the prior year;
- Nine company–owned restaurants were
opened, including two Bubba's 33 restaurants; and,
- The Company repurchased 88,089 shares
of its common stock for $3.1 million.
Results for year-to-date included the following highlights:
- Comparable restaurant sales increased
8.5% at company restaurants and 7.5% at franchise restaurants;
- Restaurant margin, as a percentage of
restaurant sales, decreased 106 basis points to 17.6%. Food cost
inflation of approximately 7.4%, mostly driven by beef, more than
offset the impact of higher average unit volume;
- Diluted earnings per share increased
8.2% to $0.76 from $0.70 in the prior year;
- 12 company–owned restaurants were
opened, including three Bubba's 33 restaurants; and,
- The Company repurchased 88,089 shares
of its common stock for $3.1 million.
Kent Taylor, Chief Executive Officer of Texas Roadhouse, Inc.,
commented, "We are pleased to report strong sales momentum through
the second quarter, as we generated double digit revenue gains
driven by increasing guest counts and strong operating week growth.
In spite of this solid top-line performance, commodity inflation of
9.4% resulted in earnings per share that were lower than the prior
year period as it more than offset modest price increases taken in
late 2014."
Taylor continued, "On the development front, our new restaurants
continue to open with strong sales and we now expect to open
approximately 30 company-owned restaurants in 2015. We remain
focused on providing legendary food and legendary service, as well
as a great value proposition to each and every guest, and as a
result, we believe we are well-positioned for growth over the
long-term."
2015 Outlook
The Company reported that comparable restaurant sales at company
restaurants for the first four weeks of its third quarter of fiscal
2015 increased approximately 7.6% compared to the prior year
period.
Management updated the following expectations for 2015:
- Mid-single digit comparable restaurant
sales growth;
- Approximately 30 company restaurant
openings, including as many as five Bubba's 33 restaurants;
- Food cost inflation of 4.0% to 4.5%
which implies 1.0% to 2.0% inflation for the second half of the
year; and,
- Total capital expenditures of $145
million to $155 million.
Management reiterated the following expectation for 2015:
- An income tax rate of approximately
30.0% to 31.0% depending on the reinstatement of certain federal
tax credits.
Conference Call
The Company is hosting a conference call today, August 3, 2015
at 5:00 p.m. Eastern Time to discuss these results. The dial-in
number is (888) 438-5449 or (719) 325-2443 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 5777050 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 465 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.
Texas Roadhouse, Inc. and Subsidiaries Condensed
Consolidated Statements of Income (in thousands, except per
share data) (unaudited)
13 Weeks Ended 26 Weeks Ended June 30,
2015 July 1, 2014 June 30, 2015 July 1, 2014 Revenue:
Restaurant sales $ 450,692 $ 391,819 $ 906,985 $ 785,775 Franchise
royalties and fees 4,006 3,544 7,943
6,730 Total revenue 454,698 395,363
914,928 792,505 Costs and expenses: Restaurant
operating costs (excluding depreciation and amortization shown
separately below): Cost of sales 168,077 137,082 328,057 271,894
Labor 132,084 115,182 263,488 229,854 Rent 9,138 8,128 18,117
16,170 Other operating 68,358 60,362 137,675 121,215 Pre-opening
4,909 4,455 8,727 8,732 Depreciation and amortization 16,816 14,433
33,151 28,518 Impairment and closure - 9 - 26 General and
administrative 23,620 21,311 45,417
41,511 Total costs and expenses 423,002
360,962 834,632 717,920 Income from operations
31,696 34,401 80,296 74,585 Interest expense, net 495 514
1,010 1,072
Equity income from investments in
unconsolidated affiliates
467 353 839 565 Income before
taxes 31,668 34,240 80,125 74,078 Provision for income taxes
9,402 10,215 24,278 22,445 Net income
including noncontrolling interests $ 22,266 $ 24,025 $ 55,847 $
51,633 Less: Net income attributable to noncontrolling interests
1,128 944 2,417 2,087 Net income
attributable to Texas Roadhouse, Inc. and subsidiaries $ 21,138 $
23,081 $ 53,430 $ 49,546
Net income per common share attributable
to Texas Roadhouse, Inc. and subsidiaries:
Basic $ 0.30 $ 0.33 $ 0.76 $ 0.71 Diluted $ 0.30 $ 0.33 $ 0.76 $
0.70 Weighted average shares outstanding: Basic
70,026 69,705 69,933 69,918 Diluted
70,648 70,577 70,588 70,822
Texas Roadhouse, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets (in thousands)
(unaudited) June 30, 2015 December 30, 2014
Cash and cash equivalents $ 70,965 $ 86,122 Other current
assets 57,953 61,604 Property and equipment, net 689,204 649,637
Goodwill 116,571 116,571 Intangible assets, net 5,515 6,203 Other
assets 25,416 23,005 Total assets $ 965,624 $ 943,142
Current maturities of long-term debt 136 129 Other
current liabilities 201,598 215,842 Long-term debt, excluding
current maturities 50,623 50,693 Other liabilities 61,437 61,522
Texas Roadhouse, Inc. and subsidiaries stockholders' equity 644,644
607,892 Noncontrolling interests 7,186 7,064 Total
liabilities and equity $ 965,624 $ 943,142
Texas
Roadhouse, Inc. and Subsidiaries Condensed Consolidated
Statements of Cash Flows (in thousands)
(unaudited) 26 Weeks Ended June
30, 2015 July 1, 2014
Cash flows from operating
activities: Net income including noncontrolling interests $
55,847 $ 51,633 Adjustments to reconcile net income to net cash
provided by operating activities Depreciation and amortization
33,151 28,518 Share-based compensation expense 10,215 7,399 Other
noncash adjustments (2,992 ) (1,044 ) Change in working capital
(1,398 ) (4,769 ) Net cash provided by operating
activities 94,823 81,737
Cash
flows from investing activities: Capital expenditures -
property and equipment (70,933 ) (53,971 ) Proceeds from sale of
property and equipment, including insurance proceeds 9
1,193 Net cash used in investing activities
(70,924 ) (52,778 )
Cash flows from
financing activities: Repurchase shares of common stock (3,138
) (31,760 ) Dividends paid (34,247 ) (10,473 ) Other financing
activities (1,671 ) (4,139 ) Net cash used in
financing activities (39,056 ) (46,372 ) Net
decrease in cash and cash equivalents (15,157 ) (17,413 ) Cash and
cash equivalents - beginning of period 86,122
94,874 Cash and cash equivalents - end of period $ 70,965
$ 77,461
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
2015 2014
vs LY 2015 2014 vs
LY Restaurant openings Company - Texas Roadhouse 6 6
0 8 12 (4 ) Company - Bubba's 33 2 0 2 3 0 3 Company - Other 1 0 1
1 0 1 Franchise - Texas Roadhouse 1 0 1 1 1 0 Total 10 6 4 13 13 0
Restaurants open at the end of the quarter Company - Texas
Roadhouse 376 357 19 Company - Bubba's 33 6 1 5 Company - Other 2 0
2 Franchise - Texas Roadhouse 80 75 5 Total 464 433 31
Company-owned restaurants Restaurant sales $ 450,692 $ 391,819 15.0
% $ 906,985 $ 785,775 15.4 % Store weeks 4,934 4,593 7.4 % 9,790
9,117 7.4 % Comparable restaurant sales growth (1) 8.2 % 2.9 % 8.5
% 2.9 % Texas Roadhouse restaurants only: Comparable restaurant
sales growth (1) 8.2 % 2.9 % 8.5 % 2.9 % Average unit volume (2) $
1,188 $ 1,098 8.2 % $ 2,409 $ 2,218 8.6 % Weekly sales by group:
Comparable restaurants (334 units) $ 91,346 Average unit volume
restaurants (27 units) (3) $ 91,468 Restaurants less than 6 months
old (15 units) $ 95,979 Restaurant operating costs (as a %
of restaurant sales) Cost of sales 37.3 % 35.0 % 231
bps
36.2 % 34.6 % 157
bps
Labor 29.3 % 29.4 % (9 )
bps
29.1 % 29.3 % (20 )
bps
Rent 2.0 % 2.1 % (5 )
bps
2.0 % 2.1 % (6 )
bps
Other operating 15.2 % 15.4 % (24 )
bps
15.2 % 15.4 % (25 )
bps
Total 83.8 % 81.9 % 193
bps
82.4 % 81.3 % 106
bps
Restaurant margin (4) 16.2 % 18.1 % (193 )
bps
17.6 % 18.7 % (106 )
bps
Restaurant margin ($ in thousands) $ 73,035 $ 71,065 2.8 % $
159,648 $ 146,642 8.9 % Restaurant margin $/Store week $ 14,804 $
15,472 (4.3 ) % $ 16,307 $ 16,084 1.4 % Franchise-owned
restaurants Franchise royalties and fees $ 4,006 $ 3,544 13.0 % $
7,943 $ 6,730 18.0 % Store weeks 1,032 975 5.8 % 2,059 1,937 6.3 %
Comparable restaurant sales growth (1) 6.9 % 3.5 % 7.5 % 3.6 %
Average unit volume (2) $ 1,274 $ 1,174 8.5 % $ 2,580 $ 2,364 9.1 %
Pre-opening expense $ 4,909 $ 4,455 10.2 % $ 8,727 $ 8,732
(0.1 ) % Depreciation and amortization $ 16,816 $ 14,433
16.5 % $ 33,151 $ 28,518 16.2 % As a % of revenue 3.7 % 3.7 % 5
bps
3.6 % 3.6 % 2
bps
General and administrative expenses $ 23,620 $ 21,311 10.8 %
$ 45,417 $ 41,511 9.4 % As a % of revenue 5.2 % 5.4 % (20 )
bps
5.0 % 5.2 % (27 )
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 cost of sales, labor, rent and
other operating costs (as a percentage of restaurant sales).
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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Texas Roadhouse, Inc.Investor Relations:Tonya Robinson,
502-515-7269orMedia:Travis Doster, 502-638-5457
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