Texas Roadhouse, Inc. Announces Fourth Quarter 2021 Results
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Texas Roadhouse, Inc. Announces Fourth Quarter 2021 Results

Increases Quarterly Dividend by 15% to $0.46 per Share

LOUISVILLE, Ky., Feb. 22, 2022 // GLOBE NEWSWIRE // - Texas Roadhouse, Inc. (NasdaqGS: TXRH), today announced financial results for the 13 and 52 weeks ended December 28, 2021.

Financial Results

Financial results for the 13 and 52 weeks ended December 28, 2021 and December 29, 2020, and 14 and 53 weeks ended December 31, 2019 were as follows:

  Fourth Quarter
($000's)             % change
  2021
  2020
  2019
  vs. 2020   vs. 2019
Total revenue $ 895,586     $ 637,989     $ 725,238     40.4 %   23.5 %
Income from operations   64,839       20,396       53,411     217.9 %   21.4 %
Net income   53,058       19,549       42,686     171.4 %   24.3 %
Diluted earnings per share $ 0.76     $ 0.28     $ 0.61     171.7 %   24.1 %
                   
                   
  Year to Date
              % change
  2021
  2020
  2019
  vs. 2020   vs. 2019
Total revenue $ 3,463,946     $ 2,398,123     $ 2,756,163     44.4 %   25.7 %
Income from operations   297,192       23,844       212,023     1146.4 %   40.2 %
Net income   245,294       31,255       174,452     684.8 %   40.6 %
Diluted earnings per share $ 3.50     $ 0.45     $ 2.46     682.5 %   42.2 %

Note: The 53rd week in 2019 resulted in additional revenue of $59.5 million and diluted earnings per share of $0.10 to $0.11.

Results for the fourth quarter included the following:

  • Comparable restaurant sales at company restaurants increased 33.1% and 21.2% compared to 2020 and 2019, respectively1. Comparable restaurant sales at domestic franchise restaurants increased 34.8% and 18.8% compared to 2020 and 2019, respectively;
  • Average weekly sales at company restaurants were $121,976 of which 14.4% were to-go sales;
  • 11 company restaurants, including one Bubba’s 33 and one Jaggers, were opened and two franchise restaurants were opened;
  • Restaurant margin, as a percentage of restaurant and other sales, was 15.8% and restaurant margin dollars were $140.8 million. Restaurant margin benefited by an increase in comparable restaurant sales partially offset by commodity inflation of 17.6% primarily due to higher beef costs;
  • Diluted earnings per share increased to $0.76 from $0.28 in the prior year due to a significant increase in restaurant margin dollars partially offset by an increase in general and administrative expenses and income tax expense;
  • The Company repurchased 423,898 shares of common stock for $37.0 million; and,
  • The Company ended the quarter with $335.6 million of cash on hand and reduced outstanding debt to $100 million.

Results for the year-to-date period included the following highlights:

  • Comparable restaurant sales at company restaurants increased 37.8% and 18.3% compared to 2020 and 2019, respectively1 . Comparable restaurant sales at domestic franchise restaurants increased 37.5% and 15.8% compared to 2020 and 2019, respectively;
  • Average weekly sales at company restaurants were $120,706 of which 17.1% were to-go sales;
  • 29 company restaurants, including five Bubba’s 33 and one Jaggers, were opened and four franchise restaurants were opened;
  • Restaurant margin, as a percentage of restaurant and other sales, was 16.9% and restaurant margin dollars were $581.7 million. Restaurant margin benefited by an increase in comparable restaurant sales partially offset by commodity inflation of 10% primarily due to higher beef costs;
  • Diluted earnings per share increased to $3.50 from $0.45 in the prior year due to a significant increase in restaurant margin dollars partially offset by an increase in general and administrative expenses and income tax expense; and,
  • The Company repurchased 584,932 shares of common stock for $51.6 million.

Jerry Morgan, Chief Executive Officer of Texas Roadhouse, Inc. commented, “We had a historic year in terms of the number of guests that we served and the operating results that we generated. This is all due to the hard work and commitment of our operators and their ability to continue to deliver on our legendary standards in these challenging times. Looking ahead, I am excited about the leadership that we have in place throughout the organization and their ability to keep growing and developing all of our brands.”

Morgan continued, “Our strong cashflow generation allowed us to continue opening new stores as well as getting back to our normal strategy of quarterly cash dividends and share repurchases. In addition, we repaid a significant portion of our outstanding debt during the year. As we transition into 2022, we are well positioned to continue to grow sales, build new restaurants and handle the current inflationary environment.”

_____________________________
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 measured for comparison to 2020 and for restaurants open a full 30 months before the beginning of the period measured for comparison to 2019.

Franchise acquisitions

On December 29, 2021, the first day of the 2022 fiscal year, the Company completed the acquisition of seven franchise restaurants in South Carolina and Georgia for an aggregate purchase price of approximately $27 million.

2022 Outlook

Comparable restaurant sales at company restaurants for the first seven weeks of our first quarter of fiscal 2022 increased 20.6% compared to 2021.

Management updated the following expectations for 2022:

  • Store week growth of approximately 6.5%, including the impact of the seven franchise locations acquired;
  • Approximately 25 Texas Roadhouse and Bubba's 33 company restaurant openings;
  • Commodity cost inflation of approximately 17% in the first half of 2022 and 12% to 14% for the year; and,
  • Wage and other labor inflation of approximately 7%.

Management reiterated the following expectations for 2022:

  • Positive comparable restaurant sales growth including the benefit of 2021 menu pricing actions;
  • An effective income tax rate of approximately 15% excluding the impact of any legislative changes enacted; and,
  • Total capital expenditures of approximately $230 million including as many as six relocations.

Cash Dividend Payment

On February 17, 2022, our Board of Directors authorized the payment of a quarterly cash dividend of $0.46 per share of common stock. This payment will be distributed on March 25, 2022, to shareholders of record at the close of business on March 9, 2022.

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 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 restaurant-level operating efficiency and performance. In calculating restaurant margin, the Company excludes certain non-restaurant-level costs that support operations, including pre-opening and general and administrative expenses, but do not have a direct impact on restaurant-level operational efficiency and performance. 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 22, 2022, 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.

                               
Texas Roadhouse, Inc. and Subsidiaries
Condensed Consolidated Statements of Income
(in thousands, except per share data)
(unaudited)
                           
                   
      13 Weeks Ended   52 Weeks Ended
      December 28, 2021   December 29, 2020   December 28, 2021   December 29, 2020
                           
Revenue:                      
  Restaurant and other sales $ 889,052     $ 633,032     $ 3,439,176     $ 2,380,177  
  Franchise royalties and fees 6,534     4,957     24,770     17,946  
                           
Total revenue 895,586     637,989     3,463,946     2,398,123  
                           
Costs and expenses:                      
  Restaurant operating costs (excluding depreciation and amortization shown separately below):                      
                           
    Food and beverage 311,478     205,117     1,156,628     780,646  
    Labor 290,227     222,788     1,123,003     875,764  
    Rent 15,508     13,956     60,005     54,401  
    Other operating 131,054     107,111     517,808     403,726  
  Pre-opening 7,008     5,803     24,335     20,099  
  Depreciation and amortization 32,615     30,443     126,761     117,877  
  Impairment and closure, net 184     1,392     734     2,263  
  General and administrative 42,673     30,983     157,480     119,503  
                           
Total costs and expenses 830,747     617,593     3,166,754     2,374,279  
                           
Income from operations 64,839     20,396     297,192     23,844  
                           
Interest expense, net 624     1,490     3,663     4,091  
Equity (loss) income from investments in unconsolidated affiliates (925 )   97     (637 )   (500 )
                           
Income before taxes 63,290     19,003     292,892     19,253  
Income tax expense (benefit) 8,547     (1,673 )   39,578     (15,672 )
                           
Net income including noncontrolling interests 54,743     20,676     253,314     34,925  
Less: Net income attributable to noncontrolling interests 1,685     1,127     8,020     3,670  
Net income attributable to Texas Roadhouse, Inc. and subsidiaries $ 53,058     $ 19,549     $ 245,294     $ 31,255  
                           
Net income per common share attributable to Texas Roadhouse, Inc.                      
and subsidiaries:                      
  Basic $ 0.76     $ 0.28     $ 3.52     $ 0.45  
  Diluted $ 0.76     $ 0.28     $ 3.50     $ 0.45  
                           
Weighted average shares outstanding:                      
  Basic 69,601     69,525     69,709     69,438  
  Diluted 69,969     70,052     70,098     69,893  
                           
Cash dividends declared per share $ 0.40     $ -     $ 1.20     $ 0.36  
                           

 

 
Texas Roadhouse, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(in thousands)
(unaudited)
         
         
         
    December 28, 2021   December 29, 2020
         
         
Cash and cash equivalents   $ 335,645     $ 363,155  
Other current assets, net   227,880     147,496  
Property and equipment, net   1,162,441     1,088,623  
Operating lease right-of-use assets, net   578,413     530,625  
Goodwill   127,001     127,001  
Intangible assets, net   1,520     2,271  
Other assets   79,052     65,990  
                 
Total assets   $ 2,511,952     $ 2,325,161  
                 
                 
Current maturities of long-term debt   -     50,000  
Other current liabilities   602,144     456,318  
Operating lease liabilities, net of current portion   622,892     572,171  
Long-term debt, excluding current maturities   100,000     190,000  
Other liabilities   113,432     113,621  
Texas Roadhouse, Inc. and subsidiaries stockholders' equity   1,058,124     927,505  
Noncontrolling interests   15,360     15,546  
                 
Total liabilities and equity   $ 2,511,952     $ 2,325,161  
         

 

                     
Texas Roadhouse, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
                 
                 
        52 Weeks Ended
        December 28, 2021   December 29, 2020
                 
                 
Cash flows from operating activities:            
Net income including noncontrolling interests   $ 253,314     $ 34,925  
Adjustments to reconcile net income to net cash provided by operating activities            
  Depreciation and amortization   126,761     117,877  
  Share-based compensation expense   38,139     29,431  
  Deferred income taxes   8,896     (19,932 )
  Other noncash adjustments, net   5,555     6,262  
Change in working capital   36,161     61,875  
    Net cash provided by operating activities   468,826     230,438  
                 
Cash flows from investing activities:            
Capital expenditures - property and equipment   (200,692 )   (154,401 )
Acquisition of franchise restaurants, net of cash acquired   -     (10,580 )
Proceeds from sale of property and equipment   -     1,709  
Proceeds from sale leaseback transactions   5,588     2,167  
    Net cash used in investing activities   (195,104 )   (161,105 )
                 
Cash flows from financing activities:            
(Payments on) proceeds from revolving credit facility, net   (140,000 )   240,000  
Repurchase of shares of common stock   (51,634 )   (12,621 )
Dividends paid   (83,658 )   (24,989 )
Other financing activities, net   (25,940 )   (16,447 )
    Net cash (used in) provided by financing activities   (301,232 )   185,943  
                 
    Net (decrease) increase in cash and cash equivalents   (27,510 )   255,276  
Cash and cash equivalents - beginning of period   363,155     107,879  
Cash and cash equivalents - end of period   $ 335,645     $ 363,155  
                 

 

                         
Texas Roadhouse, Inc. and Subsidiaries
Reconciliation of Income from Operations to Restaurant Margin
(in thousands)
(unaudited)
                   
    13 & 14 Weeks Ended
    December 28, 2021   December 29, 2020   December 31, 2019
                   
Income from operations   $ 64,839     $ 20,396     $ 53,411  
                   
Less:                  
Franchise royalties and fees   6,534     4,957     5,781  
                   
Add:                  
Pre-opening   7,008     5,803     7,355  
Depreciation and amortization   32,615     30,443     30,970  
Impairment and closure, net   184     1,392     (1,293 )
General and administrative   42,673     30,983     38,221  
                   
Restaurant margin   $ 140,785     $ 84,060     $ 122,883  
                   
Restaurant margin (as a percentage of restaurant and other sales)   15.8 %   13.3 %   17.1 %
                   
                   
    52 & 53 Weeks Ended
    December 28, 2021   December 29, 2020   December 31, 2019
                   
Income from operations   $ 297,192     $ 23,844     $ 212,023  
                   
Less:                  
Franchise royalties and fees   24,770     17,946     21,986  
                   
Add:                  
Pre-opening   24,335     20,099     20,156  
Depreciation and amortization   126,761     117,877     115,544  
Impairment and closure, net   734     2,263     (899 )
General and administrative   157,480     119,503     149,389  
                   
Restaurant margin   $ 581,732     $ 265,640     $ 474,227  
                   
Restaurant margin (as a percentage of restaurant and other sales)   16.9 %   11.2 %   17.3 %
                   

 

                                 
Texas Roadhouse, Inc. and Subsidiaries
Supplemental Financial and Operating Information
($ amounts in thousands, except weekly sales by group)
(unaudited)
                                 
      Fourth Quarter Change Year to Date Change
      2021 2020 vs 2020 2021 2020 vs 2020
Restaurant openings                            
  Company - Texas Roadhouse 9 8 1 23 18 5
  Company - Bubba's 33 1 0 1 5 3 2
  Company - Jaggers 1 1 0 1 1 0
  Franchise - Texas Roadhouse - U.S. 1 1 0 1 2 (1)
  Franchise - Texas Roadhouse - International 1 1 0 3 2 1
  Total 13 11 2 33 26 7
                                 
                                 
Restaurants open at the end of the quarter                            
  Company - Texas Roadhouse 526 503 23          
  Company - Bubba's 33 36 31 5          
  Company - Jaggers 4 3 1          
  Franchise - Texas Roadhouse - U.S. 70 69 1          
  Franchise - Texas Roadhouse - International 31 28 3          
  Total 667 634 33          
                                 
      Fourth Quarter Change Change  
      2021 2020 2019 vs 2020 vs 2019  
                                 
Company restaurants (all concepts)                            
  Restaurant and other sales $ 889,052   $ 633,032   $ 719,457   40.4 % 23.6 %  
  Store weeks   7,288     6,908     7,118   5.5 % 2.4 %  
  Comparable restaurant sales (1)   33.1 %   (8.9 )%   4.4 %          
                                 
  Restaurant operating costs (as a % of restaurant and other sales)                            
  Food and beverage costs   35.0 %   32.4 %   32.4 % 263 bps 262 bps  
  Labor   32.6 %   35.2 %   33.1 % (255 )bps (42 )bps  
  Rent   1.7 %   2.2 %   1.9 % (46 )bps (11 )bps  
  Other operating   14.7 %   16.9 %   15.6 % (218 )bps (84 )bps  
  Total   84.2 %   86.7 %   82.9 % (256 )bps 124 bps  
                                 
    Restaurant margin   15.8 %   13.3 %   17.1 % 256 bps (124 )bps  
                                 
    Restaurant margin ($ in thousands) $ 140,785   $ 84,060   $ 122,883   67.5 % 14.6 %  
    Restaurant margin $/Store week $ 19,318   $ 12,169   $ 17,264   58.7 % 11.9 %  
                                 
  Texas Roadhouse restaurants only:                            
    Store weeks   6,779     6,476     6,714   4.7 % 1.0 %  
    Comparable restaurant sales (1)   33.3 %   (9.0 )%   4.3 %          
    Average unit volume (2) $ 1,606   $ 1,208   $ 1,336   32.9 % 20.2 %  
    Weekly sales by group:                            
    Comparable restaurants (489, 470, and 448 units) $ 123,860   $ 93,530   $ 102,824            
    Average unit volume restaurants (2) (16, 19, and 21 units) $ 113,657   $ 78,402   $ 94,379            
    Restaurants less than 6 months old (21, 14, and 15 units) $ 130,295   $ 90,994   $ 106,328            
                                 
  Bubba's 33 restaurants only:                            
    Store weeks   463     403     377   15.0 % 23.0 %  
    Comparable restaurant sales (1)   30.8 %   (7.8 )%   5.7 %          
    Average unit volume (2) $ 1,279   $ 989   $ 1,093   29.3 % 17.0 %  
    Weekly sales by group:                            
    Comparable restaurants (29, 25, and 21 units) $ 99,465   $ 77,534   $ 86,549            
    Average unit volume restaurants (2) (3, 4, and 4 units) $ 87,844   $ 66,892   $ 71,122            
    Restaurants less than 6 months old (4, 2, and 3 units) $ 136,579   $ 48,997   $ 76,778            
                                 
Franchise restaurants                            
  Franchise royalties and fees $ 6,534   $ 4,957   $ 5,781   31.8 % 13.0 %  
  Store weeks   1,301     1,260     1,330   3.2 % (2.2 )%  
  Comparable restaurant sales (1)   30.6 %   (10.7 )%   3.0 %          
  U.S. franchise restaurants only:                            
    Comparable restaurant sales (1)   34.8 %   (11.2 )%   3.4 %          
    Average unit volume (2) $ 1,658   $ 1,242   $ 1,387   33.5 % 19.5 %  
                                 
(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. For comparative purposes, Q4 2019 was adjusted to include 13 and 52 weeks, respectively.
 
Amounts may not foot due to rounding.
                           

SOURCE Texas Roadhouse, Inc.

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