LOUISVILLE, Ky., Feb. 16, 2023 (GLOBE NEWSWIRE) -- Texas Roadhouse, Inc. (NASDAQ:TXRH), today announced financial results for the 13 and 52 weeks ended December 27, 2022.

Financial Results

Financial results for the 13 and 52 weeks ended December 27, 2022 and December 28, 2021 were as follows:

	Fourth Quarter						Year to Date
($000's)
		2022		2021	% change			2022		2021	% change
Total revenue	$	1,009,529	$	895,586	12.7	%	$	4,014,919	$	3,463,946	15.9	%
Income from operations		68,853		64,839	6.2	%		320,197		297,192	7.7	%
Net income		59,869		53,058	12.8	%		269,818		245,294	10.0	%
Diluted earnings per share	$	0.89	$	0.76	17.4	%	$	3.97	$	3.50	13.5	%

Results for the fourth quarter, as compared to the prior year as applicable, included the following:

Comparable restaurant sales increased 7.3% at company restaurants and increased 7.2% at domestic franchise restaurants;
Average weekly sales at company restaurants were $130,176 of which 12.6% were to-go sales as compared to average weekly sales of $121,976 of which 14.4% were to-go sales in the prior year;
Restaurant margin, as a percentage of restaurant and other sales, decreased 132 basis points to 14.5% as commodity inflation of 6.6% and wage and other labor inflation of 7.8% were partially offset by higher sales. Restaurant margin dollars increased 3.4% to $145.6 million from $140.8 million in the prior year primarily due to higher sales;
Diluted earnings per share increased 17.4% primarily driven by higher restaurant margin dollars and lower general and administrative expenses. Diluted earnings per share also benefitted from increased share repurchases that occurred in the first half of 2022; and,
10 company restaurants and two international franchise restaurants were opened.

Results for the year-to-date period, as compared to the prior year as applicable, included the following:

Comparable restaurant sales increased 9.7% at company restaurants and increased 9.4% at domestic franchise restaurants;
Average weekly sales at company restaurants were $131,802 of which 13.3% were to-go sales as compared to average weekly sales of $120,706 of which 17.1% were to-go sales in the prior year;
Restaurant margin, as a percentage of restaurant and other sales, decreased 118 basis points to 15.7% as commodity inflation of 10.8% and wage and other labor inflation of 8.3% were partially offset by higher sales. Restaurant margin dollars increased 7.9% to $627.5 million from $581.7 million in the prior year primarily due to higher sales;
Diluted earnings per share increased 13.5% primarily driven by higher restaurant margin dollars partially offset by higher general and administrative expenses and depreciation and amortization expense. Diluted earnings per share also benefitted from increased share repurchases in the first half of 2022;
23 company restaurants and seven international franchise restaurants were opened. In addition, the Company acquired eight domestic franchise restaurants; and,
The Company repurchased 2,734,005 shares of common stock for $212.9 million.

Jerry Morgan, Chief Executive Officer of Texas Roadhouse, Inc. commented, "We had another record year in 2022, highlighted by over $4 billion in revenue and double-digit bottom line growth in spite of significant cost pressures. I am extremely proud of our operators who continue to drive sales and consistently deliver on our legendary promise."

Morgan continued, "As we celebrate our 30^th anniversary this month, our focus will be on what got us here—providing our guests a legendary experience in all 700 of our restaurants each and every shift. We are excited about our continued growth in 2023, which includes the potential to open a record number of systemwide locations across all of our brands. We are confident this growth, along with our ability to allocate capital for the benefit of our shareholders, will continue to create long term value."

Franchise acquisitions

On December 28, 2022, the first day of the 2023 fiscal year, the Company completed the acquisition of eight domestic franchise restaurants for an aggregate purchase price of approximately $39.0 million.

2023 Outlook

Comparable restaurant sales at company restaurants for the first seven weeks of our first quarter of fiscal 2023 increased 15.8% compared to 2022. In addition, the Company plans to implement a menu price increase of approximately 2.2% in late March.

Management updated the following expectations for 2023:

Store week growth of at least 6% including the impact of the franchise locations acquired;
25 to 30 Texas Roadhouse and Bubba's 33 company restaurant openings; and,
An effective income tax rate of approximately 14% excluding the impact of any legislative changes enacted.

Management reiterated the following expectations for 2023:

Positive comparable restaurant sales growth including the benefit of 2022 menu pricing actions;
Commodity cost inflation of 5% to 6%;
Wage and other labor inflation of 5% to 6%; and,
Total capital expenditures of approximately $265 million.

Cash Dividend Payment

On February 14, 2023, the Company's Board of Directors authorized the payment of a quarterly cash dividend of $0.55 per share of common stock. This payment, which represents a 20% increase from the quarterly cash dividend authorized in 2022, will be distributed on March 24, 2023, to shareholders of record at the close of business on March 8, 2023.

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 also includes sales and operating costs related to the Company's non-royalty based retail initiatives. 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 also excludes pre-opening expense as it occurs at irregular intervals and would impact comparability to prior period results. 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, February 16, 2023, 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. Fourth Quarter 2022 Earnings. A replay of the call will be available until February 23, 2023, 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 700 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. 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.


Contacts:

Investor Relations	Media
Michael Bailen	Travis Doster
(502) 515-7298	(502) 638-5457

Texas Roadhouse, Inc. and Subsidiaries
Consolidated Statements of Income
(in thousands, except per share data)
(unaudited)

			13 Weeks Ended						52 Weeks Ended
			December 27, 2022			December 28, 2021			December 27, 2022		December 28, 2021

Revenue:
	Restaurant and other sales		$	1,002,763		$	889,052		$	3,988,791	$	3,439,176
	Franchise royalties and fees		6,766			6,534			26,128		24,770

Total revenue			1,009,529			895,586			4,014,919		3,463,946

Costs and expenses:
	Restaurant operating costs (excluding depreciation and amortization shown separately below):

		Food and beverage	351,723			311,478			1,378,192		1,156,628
		Labor	334,827			290,227			1,319,959		1,123,003
		Rent	17,049			15,508			66,834		60,005
		Other operating	153,591			131,054			596,305		517,808
	Pre-opening		6,568			7,008			21,883		24,335
	Depreciation and amortization		35,462			32,615			137,237		126,761
	Impairment and closure, net		1,063			184			1,600		734
	General and administrative		40,393			42,673			172,712		157,480

Total costs and expenses			940,676			830,747			3,694,722		3,166,754

Income from operations			68,853			64,839			320,197		297,192

Interest (income)/expense, net				(753	)	624			124		3,663
Equity income (loss) from investments in unconsolidated affiliates			170				(925	)	1,239			(637	)

Income before taxes			69,776			63,290			321,312		292,892
Income tax expense			8,007			8,547			43,715		39,578

Net income including noncontrolling interests			61,769			54,743			277,597		253,314
Less: Net income attributable to noncontrolling interests			1,900			1,685			7,779		8,020
Net income attributable to Texas Roadhouse, Inc. and subsidiaries			$	59,869		$	53,058		$	269,818	$	245,294

Net income per common share attributable to Texas Roadhouse, Inc. and subsidiaries:
	Basic		$	0.89		$	0.76		$	3.99	$	3.52
	Diluted		$	0.89		$	0.76		$	3.97	$	3.50

Weighted average shares outstanding:
	Basic		66,946			69,601			67,643		69,709
	Diluted		67,270			69,969			67,920		70,098

Cash dividends declared per share			$	0.46		$	0.40		$	1.84	$	1.20

Texas Roadhouse, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(in thousands)
(unaudited)

		December 27, 2022		December 28, 2021

	Cash and cash equivalents	$	173,861	$	335,645
	Other current assets, net		222,980		227,880
	Property and equipment, net		1,270,349		1,162,441
	Operating lease right-of-use assets, net		630,258		578,413
	Goodwill		148,732		127,001
	Intangible assets, net		5,607		1,520
	Other assets		73,878		79,052

	Total assets	$	2,525,665	$	2,511,952


	Other current liabilities		652,010		602,144
	Operating lease liabilities, net of current portion		677,874		622,892
	Long-term debt		50,000		100,000
	Other liabilities		118,119		113,432
	Texas Roadhouse, Inc. and subsidiaries stockholders' equity		1,012,638		1,058,124
	Noncontrolling interests		15,024		15,360

	Total liabilities and equity	$	2,525,665	$	2,511,952

Texas Roadhouse, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)

			52 Weeks Ended
			December 27, 2022	December 28, 2021


Cash flows from operating activities:
Net income including noncontrolling interests			$ 277,597	$ 253,314
Adjustments to reconcile net income to net cash provided by operating activities
	Depreciation and amortization		137,237	126,761
	Share-based compensation expense		36,663	38,139
	Deferred income taxes		9,456	8,896
	Other noncash adjustments, net		6,792	5,555
Change in working capital			43,980	36,161
		Net cash provided by operating activities	511,725	468,826

Cash flows from investing activities:
Capital expenditures - property and equipment			(246,121)	(200,692)
Acquistion of franchise restaurants, net of cash acquired			(33,069)	-
Proceeds from sale of investment in unconsolidated affiliate			316	-
Proceeds from sale of property and equipment			2,269	-
Proceeds from sale leaseback transactions			12,871	5,588
		Net cash used in investing activities	(263,734)	(195,104)

Cash flows from financing activities:
Payments on revolving credit facility, net			(50,000)	(140,000)
Repurchase of shares of common stock			(212,859)	(51,634)
Dividends paid			(124,137)	(83,658)
Other financing activities, net			(22,779)	(25,940)
		Net cash used in financing activities	(409,775)	(301,232)

		Net decrease in cash and cash equivalents	(161,784)	(27,510)
Cash and cash equivalents - beginning of period			335,645	363,155
Cash and cash equivalents - end of period			$ 173,861	$ 335,645

Texas Roadhouse, Inc. and Subsidiaries
Reconciliation of Income from Operations to Restaurant Margin
(in thousands)
(unaudited)

	13 Weeks Ended				52 Weeks Ended
	December 27, 2022		December 28, 2021		December 27, 2022		December 28, 2021

Income from operations	$	68,853	$	64,839	$	320,197	$	297,192

Less:
Franchise royalties and fees		6,766		6,534		26,128		24,770

Add:
Pre-opening		6,568		7,008		21,883		24,335
Depreciation and amortization		35,462		32,615		137,237		126,761
Impairment and closure, net		1,063		184		1,600		734
General and administrative		40,393		42,673		172,712		157,480

Restaurant margin	$	145,573	$	140,785	$	627,501	$	581,732

Restaurant margin (as a percentage of restaurant and other sales)		14.5%		15.8%		15.7%		16.9%

Texas Roadhouse, Inc. and Subsidiaries
Supplemental Financial and Operating Information
($ amounts in thousands, except weekly sales by group)
(unaudited)

			Fourth Quarter									Year to Date
				2022			2021		Change			2022	2021	Change
Restaurant openings
	Company - Texas Roadhouse			7			9		(2)			18	23	(5)
	Company - Bubba's 33			2			1		1			4	5	(1)
	Company - Jaggers			1			1		0			1	1	0
	Franchise - Texas Roadhouse - U.S.			0			1		(1)			0	1	(1)
	Franchise - Texas Roadhouse - International			2			1		1			7	3	4
	Total			12			13		(1)			30	33	(3)

Restaurant acquisitions/dispositions
	Company - Texas Roadhouse			0			0		0			8	0	8
	Franchise - Texas Roadhouse - U.S.			0			0		0			(8)	0	(8)


Restaurants open at the end of the quarter
	Company - Texas Roadhouse			552			526		26
	Company - Bubba's 33			40			36		4
	Company - Jaggers			5			4		1
	Franchise - Texas Roadhouse - U.S.			62			70		(8)
	Franchise - Texas Roadhouse - International			38			31		7
	Total			697			667		30

			Fourth Quarter
				2022			2021		Change
Company restaurants (all concepts)
	Restaurant and other sales		$	1,002,763		$	889,052		12.8		%
	Store weeks			7,691			7,288		5.5		%
	Comparable restaurant sales (1)			7.3	%		33.1	%

	Restaurant operating costs (as a % of restaurant and other sales)
	Food and beverage costs			35.1	%		35.0	%	4		bps
	Labor			33.4	%		32.6	%	75		bps
	Rent			1.7	%		1.7	%	(4	)	bps
	Other operating			15.3	%		14.7	%	58		bps
	Total			85.5	%		84.2	%	132		bps

		Restaurant margin		14.5	%		15.8	%	(132	)	bps

		Restaurant margin ($ in thousands)	$	145,573		$	140,785		3.4		%
		Restaurant margin $/Store week	$	18,927		$	19,318		(2.0	)	%

	Texas Roadhouse restaurants only:
		Store weeks		7,123			6,779		5.1		%
		Comparable restaurant sales (1)		7.3	%		33.3	%
		Average unit volume (2)	$	1,720		$	1,604		7.2		%
		Weekly sales by group:
		Comparable restaurants (513 and 489 units)	$	132,430		$	123,860
		Average unit volume restaurants (24 and 16 units)	$	129,117		$	113,657
		Restaurants less than 6 months old (15 and 21 units)	$	141,991		$	130,295

	Bubba's 33 restaurants only:
		Store weeks		504			463		8.9		%
		Comparable restaurant sales (1)		6.6	%		30.8	%
		Average unit volume (2)	$	1,391		$	1,279		8.8		%
		Weekly sales by group:
		Comparable restaurants (32 and 29 units)	$	104,880		$	99,465
		Average unit volume restaurants (4 and 3 units)	$	124,063		$	87,844
		Restaurants less than 6 months old (4 and 4 units)	$	104,110		$	136,579

Franchise restaurants
	Franchise royalties and fees		$	6,766		$	6,534		3.6		%
	Store weeks			1,287			1,301		(1.1	)	%
	Comparable restaurant sales			6.1	%		30.6	%
	U.S. franchise restaurants only:
		Comparable restaurant sales		7.2	%		34.8	%
		Average unit volume	$	1,818		$	1,684		8.0		%

(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.