Texas Roadhouse, Inc. Announces Third Quarter 2013 Results

Texas Roadhouse
Published: October 28th, 2013

LOUISVILLE, Ky. - (BUSINESS WIRE) - Oct. 28, 2013 - Texas Roadhouse, Inc. (NasdaqGS: TXRH), today announced financial results for the 13 and 39 week periods ended September 24, 2013.

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Results for the third quarter included:

Diluted earnings per share decreased 4.6% to $0.24 from $0.25 in the prior year period;
Comparable restaurant sales increased 2.6% at company restaurants and increased 4.0% at franchise restaurants;
Four company restaurants were opened;
Cost of sales, as a percentage of restaurant sales, increased 150 basis points to 35.1% primarily due to food cost inflation of just over 8% in the quarter;
Restaurant margin, as a percentage of restaurant sales, decreased 75 basis points to 17.2% primarily due to higher commodity costs, partially offset by approximately$1.3 million in benefits recorded relating to general liability insurance; and
Pre-opening costs were $2.3 million higher compared to the prior year period primarily due to seven more restaurant openings planned in the fourth quarter of 2013 compared to the fourth quarter of 2012.

Results for the year-to-date included:

Excluding the impact of a prior year charge, diluted earnings per share increased 5.4% to $0.89 from $0.84 in the prior year. The year-to-date 2012 results included a pre-tax charge of $5.0 million ($3.1 million after-tax) which had a negative impact of $0.04 on diluted earnings per share;
Comparable restaurant sales increased 3.7% at company restaurants and increased 4.2% at franchise restaurants;
14 company and three franchise restaurants were opened;
Restaurant margin, as a percentage of restaurant sales, decreased 45 basis points to 18.3%; and
Costs associated with the Company’s annual managing partner conference were $2.1 million higher compared to the prior year period.

Kent Taylor, Chief Executive Officer of Texas Roadhouse, Inc., commented, “Our top-line momentum continued this quarter highlighted by positive comparable restaurant sales, including positive traffic growth, and strong performance from our newest restaurants. However, we continue to be challenged by high single-digit commodity cost inflation and higher pre-opening costs this quarter. Looking ahead, we are encouraged by expectations of much lower commodity cost inflation in 2014, and we are excited to be on pace for another year of 25 to 30 restaurant openings. Long-term, we believe that our growth potential and continued restaurant-operations focus, along with our strong balance sheet and healthy cash flow, position us well for future success.”

2013 Outlook

The Company reported that comparable restaurant sales at company restaurants for the first four weeks of its third quarter of fiscal 2013 increased 3.4% compared to the prior year period.

Management provided the following expectations for full year 2013:

Positive comparable restaurant sales growth;
28 company restaurant openings;
Food cost inflation of approximately 7.0%, which is updated from the previous expectation of 6.5% to 7.0%;
An income tax rate of 30.0% to 30.5%; and
Total capital expenditures of approximately $105.0 million, which is updated from the previous expectation of $100.0 to $105.0 million.

2014 Outlook

Management provided the following expectations for full year 2014:

Positive comparable restaurant sales growth;
25 to 30 company restaurant openings;
Low single digit food cost inflation;
An income tax rate of 30.0% to 31.0% which is higher than the 2013 income tax rate as a result of the potential expiration of certain federal tax credits at the end of 2013; and
Total capital expenditures of $100.0 to $110.0 million.

Conference Call

The Company is hosting a conference call today, October 28, 2013, at 5:00 p.m. Eastern Time to discuss these results. The dial-in number is (877) 879-6209 or (719) 325-4817 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 2899563 as the pass code. There will be a simultaneous Web cast conducted at www.texasroadhouse.com.

About Texas Roadhouse

Texas Roadhouse is a casual dining concept that first opened in 1993 and today operates over 410 restaurants system-wide in 48 states and two 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, our ability to continue our share repurchase program and pay a quarterly cash dividend; strength of consumer spending; pending or future legal claims; 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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Source: Texas Roadhouse, Inc.

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