U.S. Markets close in 4 hrs 15 mins
  • S&P 500

    4,406.96
    +52.77 (+1.21%)
     
  • Dow 30

    34,373.57
    +453.73 (+1.34%)
     
  • Nasdaq

    14,908.38
    +161.98 (+1.10%)
     
  • Russell 2000

    2,221.16
    +34.97 (+1.60%)
     
  • Crude Oil

    70.51
    -0.05 (-0.07%)
     
  • Gold

    1,778.90
    +0.70 (+0.04%)
     
  • Silver

    22.80
    +0.23 (+1.01%)
     
  • EUR/USD

    1.1743
    +0.0012 (+0.1057%)
     
  • 10-Yr Bond

    1.3140
    -0.0100 (-0.76%)
     
  • Vix

    21.41
    -2.95 (-12.11%)
     
  • GBP/USD

    1.3662
    -0.0002 (-0.0137%)
     
  • USD/JPY

    109.6000
    +0.3800 (+0.3479%)
     
  • BTC-USD

    44,590.88
    -3,435.44 (-7.15%)
     
  • CMC Crypto 200

    1,074.22
    +33.74 (+3.24%)
     
  • FTSE 100

    7,081.01
    +100.03 (+1.43%)
     
  • Nikkei 225

    29,639.40
    -200.31 (-0.67%)
     

Texas Roadhouse, Inc. Announces Second Quarter 2021 Results

  • Oops!
    Something went wrong.
    Please try again later.
·16 min read
In this article:
  • Oops!
    Something went wrong.
    Please try again later.

LOUISVILLE, Ky., July 29, 2021 (GLOBE NEWSWIRE) -- Texas Roadhouse, Inc. (NasdaqGS: TXRH), today announced financial results for the 13 and 26 weeks ended June 29, 2021 and provided a business update.

Financial Results

Financial results for the 13 and 26 weeks ended June 29, 2021, June 30, 2020, and June 25, 2019 were as follows:

Second Quarter

($000's)

% change

2021

2020

2019

vs. 2020

vs. 2019

Total revenue

$

898,788

$

476,425

$

689,828

88.7

%

30.3

%

Income (loss) from operations

89,728

(47,318

)

53,283

289.6

%

68.4

%

Net income (loss)

75,480

(33,553

)

44,845

325.0

%

68.3

%

Diluted earnings (loss) per share

$

1.08

$

(0.48

)

$

0.63

322.4

%

72.1

%

Year to Date

% change

2021

2020

2019

vs. 2020

vs. 2019

Total revenue

$

1,699,417

$

1,128,949

$

1,380,436

50.5

%

23.1

%

Income (loss) from operations

170,655

(31,528

)

113,728

641.3

%

50.1

%

Net income (loss)

139,630

(17,524

)

95,235

896.8

%

46.6

%

Diluted earnings (loss) per share

$

1.99

$

(0.25

)

$

1.32

888.3

%

50.4

%

Results for the second quarter included the following:

  • Comparable restaurant sales at company restaurants increased 80.2% and 21.3% compared to 2020 and 2019, respectively1. Comparable restaurant sales at domestic franchise restaurants increased 76.5% and 19.4% compared to 2020 and 2019, respectively;

  • Eight company restaurants, including two Bubba’s 33 restaurants, and two franchise restaurants were opened;

  • Restaurant margin, as a percentage of restaurant and other sales, was 17.7% and restaurant margin dollars were $158.2 million. Restaurant margin was impacted by an increase in comparable restaurant sales partially offset by commodity inflation and higher costs related to the pandemic;

  • Diluted earnings per share increased to $1.08 from a diluted loss per share of ($0.48) in the prior year due to the increase in comparable restaurant sales and the prior year impact of the pandemic; and,

  • The Company ended the quarter with debt of $190.0 million and $483.4 million of cash on hand.

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

  • Comparable restaurant sales at company restaurants increased 44.5% and 14.9% compared to 2020 and 2019, respectively1. Comparable restaurant sales at domestic franchise restaurants increased 41.1% and 12.2% compared to 2020 and 2019, respectively;

  • 11 company restaurants, including three Bubba’s 33 restaurants, and two franchise restaurants were opened;

  • Restaurant margin, as a percentage of restaurant and other sales, was 18.1% and restaurant margin dollars were $305.8 million. Restaurant margin was impacted by an increase in comparable restaurant sales partially offset by higher costs related to the pandemic; and,

  • Diluted earnings per share increased to $1.99 from a diluted loss per share of ($0.25) in the prior year due to the increase in comparable restaurant sales and the prior year impact of the pandemic.

____________________________
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.

Jerry Morgan, Chief Executive Officer of Texas Roadhouse, Inc. commented, “We continue to generate sales that are well above pre-pandemic levels thanks to our operators who are successfully managing strong To-Go sales along with the re-opening of our dining rooms without restriction. However, some challenges still remain with certain cost pressures that we expect to continue at least through the end of the year.”

Morgan continued, “Our strong cashflows have further strengthened our financial position which allowed us to reinstate our dividend and repay our short-term debt this quarter. In addition, our development pipeline looks great and continues to move forward as expected.”

Business Update

Comparable restaurant sales during the quarter were positively impacted by the re-opening of dining rooms, the continued easing of dining room capacity restrictions, and continued strong To-Go sales. As of July 2, all domestic company and franchise locations were operating without restriction. The Company continues to operate with an enhanced To-Go model, which includes curbside and/or drive-up options, as permitted by local guidelines. For the Q2 2021 and July periods, comparable restaurant sales, average weekly sales, and To-Go sales for all company restaurants were as follows:

Q2 2021

July

Comparable restaurant sales vs 2020

80.2%

44.1%

Comparable restaurant sales vs 2019

21.3%

25.5%

Average weekly sales

$

126,442

$

123,927

To-Go sales as a % of average weekly sales

16.9%

14.2%

As of the end of the quarter, the Company had opened 11 company restaurants and, currently, an additional 18 are under construction. During the quarter, the Company completed the refinancing of the revolving credit facility. As part of this refinancing, the borrowing capacity was increased to $300 million and $50 million that was previously outstanding was repaid. As previously announced, the Company’s Board of Directors reinstated the quarterly dividend beginning with the Q2 2021 period. The Company currently expects to resume the repurchase of shares under our stock repurchase program in the second half of 2021.

2021 Outlook

Management updated all expectations for 2021:

  • Commodity cost inflation of approximately 7.0%;

  • 26 to 29 company restaurant openings across all concepts;

  • Store week growth of approximately 5.0%; and,

  • Total capital expenditures of approximately $200 million.

To the extent that state and local guidelines begin to significantly reduce capacity and/or re-close dining rooms, the Company could pull back on development, reduce capital spend, and/or limit share repurchases accordingly.

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 is hosting a conference call today, July 29, 2021 at 5:00 p.m. Eastern Time to discuss these results. The dial-in number is (877) 699-0953 or (647) 689-5456 for international calls. A replay of the call will be available for one week following the conference call. To access the replay, please dial (800) 585-8367 or (416) 621-4642 for international calls, and use 4491322 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 has grown to over 640 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. These statements include, but are not limited to, statements related to the potential impact of the COVID-19 pandemic, including reinstated dining room capacity restrictions or closures, and other non-historical statements. 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; 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 29, 2020. 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
Michael Bailen
(502) 515-7298

Media
Travis Doster
(502) 638-5457

Texas Roadhouse, Inc. and Subsidiaries

Condensed Consolidated Statements of Income (Loss)

(in thousands, except per share data)

(unaudited)

13 Weeks Ended

26 Weeks Ended

June 29, 2021

June 30, 2020

June 29, 2021

June 30, 2020

Revenue:

Restaurant and other sales

$

892,444

$

473,090

$

1,687,367

$

1,120,716

Franchise royalties and fees

6,344

3,335

12,050

8,233

Total revenue

898,788

476,425

1,699,417

1,128,949

Costs and expenses:

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

Food and beverage

295,504

164,041

546,986

374,221

Labor

288,147

194,622

546,183

435,701

Rent

14,956

13,251

29,408

26,722

Other operating

135,606

89,348

258,985

193,637

Pre-opening

6,319

4,290

10,587

9,402

Depreciation and amortization

31,650

29,016

62,519

58,070

Impairment and closure, net

17

(440

)

521

155

General and administrative

36,861

29,615

73,573

62,569

Total costs and expenses

809,060

523,743

1,528,762

1,160,477

Income (loss) from operations

89,728

(47,318

)

170,655

(31,528

)

Interest expense, net

975

1,030

2,435

1,099

Equity income (loss) from investments in unconsolidated affiliates

239

(90

)

22

(598

)

Income (loss) before taxes

88,992

(48,438

)

168,242

(33,225

)

Income tax expense (benefit)

11,067

(15,132

)

23,887

(17,071

)

Net income (loss) including noncontrolling interests

77,925

(33,306

)

144,355

(16,154

)

Less: Net income attributable to noncontrolling interests

2,445

247

4,725

1,370

Net income (loss) attributable to Texas Roadhouse, Inc. and subsidiaries

$

75,480

$

(33,553

)

$

139,630

$

(17,524

)

Net income (loss) per common share attributable to Texas Roadhouse, Inc.

and subsidiaries:

Basic

$

1.08

$

(0.48

)

$

2.00

$

(0.25

)

Diluted

$

1.08

$

(0.48

)

$

1.99

$

(0.25

)

Weighted average shares outstanding:

Basic

69,790

69,361

69,713

69,391

Diluted

70,161

69,361

70,150

69,391

Cash dividends declared per share

$

0.40

$

-

$

0.40

$

0.36


Texas Roadhouse, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(in thousands)

(unaudited)

June 29, 2021

December 29, 2020

Cash and cash equivalents

$

483,419

$

363,155

Other current assets, net

98,354

147,496

Property and equipment, net

1,117,393

1,088,623

Operating lease right-of-use assets, net

547,387

530,625

Goodwill

127,001

127,001

Intangible assets, net

1,881

2,271

Other assets

73,510

65,990

Total assets

$

2,448,945

$

2,325,161

Current maturities of long-term debt

-

50,000

Other current liabilities

479,808

456,318

Operating lease liabilities, net of current portion

590,443

572,171

Long-term debt, excluding current maturities

190,000

190,000

Other liabilities

126,011

113,621

Texas Roadhouse, Inc. and subsidiaries stockholders' equity

1,046,835

927,505

Noncontrolling interests

15,848

15,546

Total liabilities and equity

$

2,448,945

$

2,325,161


Texas Roadhouse, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(in thousands)

(unaudited)

26 Weeks Ended

June 29, 2021

June 30, 2020

Cash flows from operating activities:

Net income (loss) including noncontrolling interests

$

144,355

$

(16,154

)

Adjustments to reconcile net income (loss) to net cash provided by operating activities

Depreciation and amortization

62,519

58,070

Share-based compensation expense

19,817

14,490

Deferred income taxes

2,948

(10,926

)

Other noncash adjustments, net

1,955

3,052

Change in working capital

65,252

13,313

Net cash provided by operating activities

296,846

61,845

Cash flows from investing activities:

Capital expenditures - property and equipment

(85,068

)

(81,833

)

Proceeds from sale leaseback transactions

3,285

2,167

Net cash used in investing activities

(81,783

)

(79,666

)

Cash flows from financing activities:

(Payments on) proceeds from revolving credit facility, net

(50,000

)

240,000

Repurchase of shares of common stock

-

(12,621

)

Dividends paid

(27,932

)

(24,989

)

Other financing activities, net

(16,867

)

(9,955

)

Net cash (used in) provided by financing activities

(94,799

)

192,435

Net increase in cash and cash equivalents

120,264

174,614

Cash and cash equivalents - beginning of period

363,155

107,879

Cash and cash equivalents - end of period

$

483,419

$

282,493


Texas Roadhouse, Inc. and Subsidiaries

Reconciliation of Income (loss) from Operations to Restaurant Margin

(in thousands)

(unaudited)

13 Weeks Ended

June 29, 2021

June 30, 2020

June 25, 2019

Income (loss) from operations

$

89,728

$

(47,318

)

$

53,283

Less:

Franchise royalties and fees

6,344

3,335

5,455

Add:

Pre-opening

6,319

4,290

4,197

Depreciation and amortization

31,650

29,016

28,454

Impairment and closure, net

17

(440

)

316

General and administrative

36,861

29,615

39,960

Restaurant margin

$

158,231

$

11,828

$

120,755

Restaurant margin (as a percentage of restaurant and other sales)

17.7

%

2.5

%

17.6

%

26 Weeks Ended

June 29, 2021

June 30, 2020

June 25, 2019

Income (loss) from operations

$

170,655

$

(31,528

)

$

113,728

Less:

Franchise royalties and fees

12,050

8,233

10,946

Add:

Pre-opening

10,587

9,402

8,065

Depreciation and amortization

62,519

58,070

56,227

Impairment and closure, net

521

155

333

General and administrative

73,573

62,569

75,943

Restaurant margin

$

305,805

$

90,435

$

243,350

Restaurant margin (as a percentage of restaurant and other sales)

18.1

%

8.1

%

17.8

%


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

2021

2020

vs 2020

2021

2020

vs 2020

Restaurant openings

Company - Texas Roadhouse

6

2

4

8

6

2

Company - Bubba's 33

2

1

1

3

2

1

Company - Jaggers

0

0

0

0

0

0

Franchise - Texas Roadhouse - U.S.

0

0

0

0

1

(1)

Franchise - Texas Roadhouse - International

2

0

2

2

0

2

Total

10

3

7

13

9

4

Restaurants open at the end of the quarter

Company - Texas Roadhouse

511

489

22

Company - Bubba's 33

34

30

4

Company - Jaggers

3

2

1

Franchise - Texas Roadhouse - U.S.

69

70

(1)

Franchise - Texas Roadhouse - International

30

26

4

Total

647

617

30

Second Quarter

Change

Change

2021

2020

2019

vs 2020

vs 2019

Company restaurants

Restaurant and other sales

$

892,444

$

473,090

$

684,373

88.6

%

30.4

%

Store weeks

7,085

6,742

6,460

5.1

%

9.7

%

Comparable restaurant sales (1)

80.2

%

(32.8

)

%

4.7

%

Texas Roadhouse restaurants only:

Comparable restaurant sales (1)

79.0

%

(32.4

)

%

4.6

%

Average unit volume (2)

$

1,664

$

935

$

1,384

78.0

%

20.2

%

Weekly sales by group:

Comparable restaurants (476, 454, and 434 units respectively)

$

128,716

$

72,005

$

106,838

Average unit volume restaurants (3) (19, 20, and 21 units, respectively)

$

110,459

$

69,174

$

98,046

Restaurants less than 6 months old (16, 15, and 16 units, respectively)

$

134,822

$

61,781

$

114,735

Restaurant operating costs (as a % of restaurant and other sales)

Food and beverage costs

33.1

%

34.7

%

32.3

%

(156

)

bps

78

bps

Labor

32.3

%

41.1

%

32.9

%

(885

)

bps

(66

)

bps

Rent

1.7

%

2.8

%

1.9

%

(113

)

bps

(23

)

bps

Other operating

15.2

%

18.9

%

15.2

%

(369

)

bps

3

bps

Total

82.3

%

97.5

%

82.4

%

(1,523

)

bps

(9

)

bps

Restaurant margin

17.7

%

2.5

%

17.6

%

1,523

bps

9

bps

Restaurant margin ($ in thousands)

$

158,231

$

11,828

$

120,755

1,237.8

%

31.0

%

Restaurant margin $/Store week

$

22,333

$

1,754

$

18,692

1,173.3

%

19.5

%

Franchise restaurants

Franchise royalties and fees

$

6,344

$

3,335

$

5,455

90.2

%

16.3

%

Store weeks

1,269

1,248

1,208

1.7

%

5.1

%

Comparable restaurant sales (1)

86.3

%

(38.2

)

%

3.7

%

U.S. franchise restaurants only:

Comparable restaurant sales (1)

76.5

%

(32.1

)

%

4.3

%

Average unit volume (2)

$

1,739

$

980

$

1,433

77.5

%

21.3

%

Pre-opening expense

$

6,319

$

4,290

$

4,197

47.3

%

50.6

%

Depreciation and amortization

$

31,650

$

29,016

$

28,454

9.1

%

11.2

%

As a % of revenue

3.5

%

6.1

%

4.1

%

(257

)

bps

(60

)

bps

General and administrative expenses

$

36,861

$

29,615

$

39,960

24.5

%

(7.8

)

%

As a % of revenue

4.1

%

6.2

%

5.8

%

(211

)

bps

(169

)

bps

(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, excluding sales from restaurants permanently 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 sales from restaurants permanently closed during the period.

(3) Average unit volume restaurants include restaurants open a full six and up to 18 months before the beginning of the period measured.

Amounts may not foot due to rounding.