Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 24, 2019 | Oct. 23, 2019 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | Texas Roadhouse, Inc. | |
Entity Central Index Key | 0001289460 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 24, 2019 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Trading Symbol | TXRH | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 69,409,291 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q3 | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity File Number | 000-50972 | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 20-1083890 | |
Entity Address, Address Line One | 6040 Dutchmans Lane, Suite 200 | |
Entity Address, City or Town | Louisville | |
Entity Address, State or Province | KY | |
Entity Address, Postal Zip Code | 40205 | |
City Area Code | 502 | |
Local Phone Number | 426-9984 | |
Title of 12(b) Security | Common Stock | |
Security Exchange Name | NASDAQ | |
Entity Interactive Data Current | Yes |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 24, 2019 | Dec. 25, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 99,540 | $ 210,125 |
Receivables, net of allowance for doubtful accounts of $16 at September 24, 2019 and $34 at December 25, 2018 | 33,948 | 92,114 |
Inventories, net | 17,198 | 18,827 |
Prepaid income taxes | 7,569 | |
Prepaid expenses | 13,976 | 16,384 |
Total current assets | 164,662 | 345,019 |
Property and equipment, net of accumulated depreciation of $663,493 at September 24, 2019 and $602,451 at December 25, 2018 | 1,020,167 | 956,676 |
Operating lease right-of-use asset | 495,419 | |
Goodwill | 123,220 | 123,220 |
Intangible assets, net of accumulated amortization of $14,000 at September 24, 2019 and $13,416 at December 25, 2018 | 1,375 | 1,959 |
Other assets | 50,718 | 42,402 |
Total assets | 1,855,561 | 1,469,276 |
Current liabilities: | ||
Current portion of operating lease liabilities | 16,748 | |
Accounts payable | 59,504 | 62,060 |
Deferred revenue-gift cards | 107,200 | 192,242 |
Accrued wages | 35,711 | 34,159 |
Income taxes payable | 7,031 | |
Accrued taxes and licenses | 27,071 | 24,631 |
Dividends payable | 20,863 | 17,904 |
Other accrued liabilities | 58,144 | 54,146 |
Total current liabilities | 332,272 | 385,142 |
Operating lease liabilities, net of current portion | 532,480 | |
Restricted stock and other deposits | 8,413 | 7,703 |
Deferred rent | 48,079 | |
Deferred tax liabilities, net | 12,664 | 17,268 |
Other liabilities | 61,035 | 50,376 |
Total liabilities | 946,864 | 508,568 |
Texas Roadhouse, Inc. and subsidiaries stockholders' equity: | ||
Preferred stock ($0.001 par value, 1,000,000 shares authorized; no shares issued or outstanding) | ||
Common stock ($0.001 par value, 100,000,000 shares authorized, 69,507,763 and 71,617,510 shares issued and outstanding at September 24, 2019 and December 25, 2018, respectively) | 70 | 72 |
Additional paid-in-capital | 140,445 | 257,388 |
Retained earnings | 753,791 | 688,337 |
Accumulated other comprehensive loss | (331) | (228) |
Total Texas Roadhouse, Inc. and subsidiaries stockholders' equity | 893,975 | 945,569 |
Noncontrolling interests | 14,722 | 15,139 |
Total equity | 908,697 | 960,708 |
Total liabilities and equity | $ 1,855,561 | $ 1,469,276 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Sep. 24, 2019 | Dec. 25, 2018 |
Consolidated Balance Sheets | ||
Receivables, allowance for doubtful accounts (in dollars) | $ 16 | $ 34 |
Property and equipment, accumulated depreciation (in dollars) | 663,493 | 602,451 |
Intangible assets, accumulated amortization (in dollars) | $ 14,000 | $ 13,416 |
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 1,000,000 | 1,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 69,507,763 | 71,617,510 |
Common stock, shares outstanding | 69,507,763 | 71,617,510 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income and Comprehensive Income - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 24, 2019 | Sep. 25, 2018 | Sep. 24, 2019 | Sep. 25, 2018 | |
Revenue: | ||||
Revenue | $ 650,489 | $ 594,595 | $ 2,030,925 | $ 1,851,537 |
Restaurant operating costs (excluding depreciation and amortization shown separately below): | ||||
Cost of sales | 205,158 | 191,990 | 650,136 | 598,824 |
Labor | 218,342 | 197,621 | 667,712 | 593,298 |
Rent | 12,994 | 12,330 | 39,173 | 36,300 |
Other operating | 100,742 | 91,946 | 306,355 | 279,182 |
Pre-opening | 4,736 | 4,378 | 12,801 | 13,529 |
Depreciation and amortization | 28,347 | 25,843 | 84,574 | 75,492 |
Impairment and closure | 61 | 20 | 394 | 128 |
General and administrative | 35,225 | 35,023 | 111,168 | 100,202 |
Total costs and expenses | 605,605 | 559,151 | 1,872,313 | 1,696,955 |
Income from operations | 44,884 | 35,444 | 158,612 | 154,582 |
Interest income (expense), net | 81 | (168) | 1,526 | (810) |
Equity income from investments in unconsolidated affiliates | (154) | 381 | 100 | 1,150 |
Income before taxes | 44,811 | 35,657 | 160,238 | 154,922 |
Provision for income taxes | 6,785 | 5,398 | 23,331 | 22,321 |
Net income including noncontrolling interests | 38,026 | 30,259 | 136,907 | 132,601 |
Less: Net income attributable to noncontrolling interests | 1,495 | 1,134 | 5,141 | 4,708 |
Net income attributable to Texas Roadhouse, Inc. and subsidiaries | 36,531 | 29,125 | 131,766 | 127,893 |
Other comprehensive loss, net of tax: | ||||
Foreign currency translation adjustment, net of tax of $40, $54, $35 and $46, respectively | (118) | (159) | (103) | (167) |
Total other comprehensive loss, net of tax | (118) | (159) | (103) | (167) |
Total comprehensive income | $ 36,413 | $ 28,966 | $ 131,663 | $ 127,726 |
Net income per common share attributable to Texas Roadhouse, Inc. and subsidiaries: | ||||
Basic | $ 0.53 | $ 0.41 | $ 1.86 | $ 1.79 |
Diluted | $ 0.52 | $ 0.40 | $ 1.85 | $ 1.78 |
Weighted average shares outstanding: | ||||
Basic | 69,573 | 71,508 | 70,896 | 71,429 |
Diluted | 69,939 | 72,006 | 71,287 | 71,906 |
Cash dividends declared per share | $ 0.30 | $ 0.25 | $ 0.90 | $ 0.75 |
Restaurant and other sales | ||||
Revenue: | ||||
Revenue | $ 645,230 | $ 589,704 | $ 2,014,720 | $ 1,836,179 |
Franchise royalties and fees | ||||
Revenue: | ||||
Revenue | $ 5,259 | $ 4,891 | $ 16,205 | $ 15,358 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Income and Comprehensive Income (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 24, 2019 | Sep. 25, 2018 | Sep. 24, 2019 | Sep. 25, 2018 | |
Consolidated Statements of Income and Comprehensive Income | ||||
Foreign currency translation adjustment, (tax)/benefit | $ 40 | $ 54 | $ 35 | $ 46 |
Condensed Consolidated Statem_3
Condensed Consolidated Statement of Stockholders' Equity - USD ($) | Total Texas Roadhouse, Inc. and Subsidiaries | Common Stock | Additional Paid-in-Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Noncontrolling Interests | Total |
Balance at Dec. 26, 2017 | $ 839,079,000 | $ 71,000 | $ 236,548,000 | $ 602,499,000 | $ (39,000) | $ 12,312,000 | $ 851,391,000 |
Balance (in shares) at Dec. 26, 2017 | 71,168,897 | ||||||
Increase (Decrease) in Stockholders' Equity | |||||||
Net income | 127,893,000 | 127,893,000 | 4,708,000 | 132,601,000 | |||
Other comprehensive income (loss), net | (167,000) | (167,000) | (167,000) | ||||
Noncontrolling interests contribution | 2,551,000 | 2,551,000 | |||||
Contribution from executive officer | 1,000,000 | 1,000,000 | 1,000,000 | ||||
Distributions to noncontrolling interest holders | (4,481,000) | (4,481,000) | |||||
Acquisition of noncontrolling interest | (75,000) | (75,000) | (47,000) | (122,000) | |||
Dividends declared | (53,605,000) | (53,605,000) | (53,605,000) | ||||
Shares issued under share-based compensation plans including tax effects | $ 1,000 | (1,000) | |||||
Shares issued under share-based compensation plans including tax effects (in shares) | 580,861 | ||||||
Indirect repurchase of shares for minimum tax withholdings | (11,812,000) | (11,812,000) | (11,812,000) | ||||
Indirect repurchase of shares for minimum tax withholdings (in shares) | (204,521) | ||||||
Cumulative effect of change in accounting principle | ASU 2014-09 (Topic 606) | (878,000) | (878,000) | (878,000) | ||||
Share-based compensation | 24,820,000 | 24,820,000 | 24,820,000 | ||||
Balance at Sep. 25, 2018 | 926,255,000 | $ 72,000 | 250,480,000 | 675,909,000 | (206,000) | 15,043,000 | 941,298,000 |
Balance (in shares) at Sep. 25, 2018 | 71,545,237 | ||||||
Balance at Jun. 26, 2018 | 908,049,000 | $ 71,000 | 243,357,000 | 664,668,000 | (47,000) | 13,549,000 | 921,598,000 |
Balance (in shares) at Jun. 26, 2018 | 71,474,209 | ||||||
Increase (Decrease) in Stockholders' Equity | |||||||
Net income | 29,125,000 | 29,125,000 | 1,134,000 | 30,259,000 | |||
Other comprehensive income (loss), net | (159,000) | (159,000) | (159,000) | ||||
Noncontrolling interests contribution | 1,686,000 | 1,686,000 | |||||
Distributions to noncontrolling interest holders | (1,279,000) | (1,279,000) | |||||
Acquisition of noncontrolling interest | (75,000) | (75,000) | (47,000) | (122,000) | |||
Dividends declared | (17,884,000) | (17,884,000) | (17,884,000) | ||||
Shares issued under share-based compensation plans including tax effects | $ 1,000 | (1,000) | |||||
Shares issued under share-based compensation plans including tax effects (in shares) | 102,171 | ||||||
Indirect repurchase of shares for minimum tax withholdings | (1,765,000) | $ (31,143) | (1,765,000) | (1,765,000) | |||
Share-based compensation | 8,964,000 | 8,964,000 | 8,964,000 | ||||
Balance at Sep. 25, 2018 | 926,255,000 | $ 72,000 | 250,480,000 | 675,909,000 | (206,000) | 15,043,000 | 941,298,000 |
Balance (in shares) at Sep. 25, 2018 | 71,545,237 | ||||||
Balance at Dec. 25, 2018 | 945,569,000 | $ 72,000 | 257,388,000 | 688,337,000 | (228,000) | 15,139,000 | $ 960,708,000 |
Balance (in shares) at Dec. 25, 2018 | 71,617,510 | 71,617,510 | |||||
Increase (Decrease) in Stockholders' Equity | |||||||
Net income | 131,766,000 | 131,766,000 | 5,141,000 | $ 136,907,000 | |||
Other comprehensive income (loss), net | (103,000) | (103,000) | (103,000) | ||||
Distributions to noncontrolling interest holders | (4,885,000) | (4,885,000) | |||||
Acquisition of noncontrolling interest | (70,000) | (70,000) | (673,000) | (743,000) | |||
Dividends declared | (63,634,000) | (63,634,000) | (63,634,000) | ||||
Shares issued under share-based compensation plans including tax effects (in shares) | 527,927 | ||||||
Indirect repurchase of shares for minimum tax withholdings | (10,926,000) | (10,926,000) | (10,926,000) | ||||
Indirect repurchase of shares for minimum tax withholdings (in shares) | (182,616) | ||||||
Repurchase of shares of common stock | (130,965,000) | $ (2,000) | (130,963,000) | $ (130,965,000) | |||
Repurchase of shares of common stock (in shares) | (2,455,058) | (2,455,058) | |||||
Cumulative effect of change in accounting principle | ASU 2016-02 (Topic 842) | (2,678,000) | (2,678,000) | $ (2,678,000) | ||||
Share-based compensation | 25,016,000 | 25,016,000 | 25,016,000 | ||||
Balance at Sep. 24, 2019 | 893,975,000 | $ 70,000 | 140,445,000 | 753,791,000 | (331,000) | 14,722,000 | $ 908,697,000 |
Balance (in shares) at Sep. 24, 2019 | 69,507,763 | 69,507,763 | |||||
Balance at Jun. 25, 2019 | 890,852,000 | $ 70,000 | 152,872,000 | 738,123,000 | (213,000) | 14,766,000 | $ 905,618,000 |
Balance (in shares) at Jun. 25, 2019 | 69,801,550 | ||||||
Increase (Decrease) in Stockholders' Equity | |||||||
Net income | 36,531,000 | 36,531,000 | 1,495,000 | 38,026,000 | |||
Other comprehensive income (loss), net | (118,000) | (118,000) | (118,000) | ||||
Distributions to noncontrolling interest holders | (1,539,000) | (1,539,000) | |||||
Dividends declared | (20,863,000) | (20,863,000) | (20,863,000) | ||||
Shares issued under share-based compensation plans including tax effects (in shares) | 94,010 | ||||||
Indirect repurchase of shares for minimum tax withholdings | (1,657,000) | (1,657,000) | (1,657,000) | ||||
Indirect repurchase of shares for minimum tax withholdings (in shares) | (29,416) | ||||||
Repurchase of shares of common stock | (18,913,000) | (18,913,000) | $ (18,913,000) | ||||
Repurchase of shares of common stock (in shares) | (358,381) | (358,381) | |||||
Share-based compensation | 8,143,000 | 8,143,000 | $ 8,143,000 | ||||
Balance at Sep. 24, 2019 | $ 893,975,000 | $ 70,000 | $ 140,445,000 | $ 753,791,000 | $ (331,000) | $ 14,722,000 | $ 908,697,000 |
Balance (in shares) at Sep. 24, 2019 | 69,507,763 | 69,507,763 |
Condensed Consolidated Statem_4
Condensed Consolidated Statement of Stockholders' Equity (Parenthetical) - $ / shares | 3 Months Ended | 9 Months Ended | ||
Sep. 24, 2019 | Sep. 25, 2018 | Sep. 24, 2019 | Sep. 25, 2018 | |
Consolidated Statement of Stockholders' Equity | ||||
Dividends declared (in dollars per share) | $ 0.30 | $ 0.25 | $ 0.90 | $ 0.75 |
Condensed Consolidated Statem_5
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 24, 2019 | Sep. 25, 2018 | |
Cash flows from operating activities: | ||
Net income including noncontrolling interests | $ 136,907 | $ 132,601 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 84,574 | 75,492 |
Deferred income taxes | (3,660) | 2,146 |
Loss on disposition of assets | 4,138 | 4,339 |
Impairment and closure costs | 26 | |
Contribution from executive officer | 1,000 | |
Equity income from investments in unconsolidated affiliates | (100) | (1,150) |
Distributions of income received from investments in unconsolidated affiliates | 495 | 521 |
Provision for doubtful accounts | (18) | 16 |
Share-based compensation expense | 25,016 | 24,820 |
Changes in operating working capital: | ||
Receivables | 59,002 | 41,676 |
Inventories | 1,629 | (30) |
Prepaid expenses | 2,408 | 315 |
Other assets | (9,297) | (6,582) |
Accounts payable | (5,854) | 918 |
Deferred revenue-gift cards | (85,042) | (68,680) |
Accrued wages | 1,552 | 3,267 |
Prepaid income taxes and income taxes payable | 14,600 | 235 |
Accrued taxes and licenses | 2,440 | 2,838 |
Other accrued liabilities | (1,772) | 2,593 |
Operating lease right-of-use assets and lease liabilities | 4,367 | |
Deferred rent | 4,144 | |
Other liabilities | 10,586 | 5,100 |
Net cash provided by operating activities | 241,997 | 225,579 |
Cash flows from investing activities: | ||
Capital expenditures-property and equipment | (144,917) | (110,906) |
Proceeds from sale of property and equipment | 351 | |
Net cash used in investing activities | (144,566) | (110,906) |
Cash flows from financing activities: | ||
Proceeds from noncontrolling interest contribution | 2,551 | |
Distributions to noncontrolling interest holders | (4,885) | (4,481) |
Acquisition of noncontrolling interest | (743) | |
Proceeds from restricted stock and other deposits, net | 176 | 14 |
Indirect repurchase of shares for minimum tax withholdings | (10,926) | (11,812) |
Principal payments on long-term debt and finance lease obligation | (50,007) | |
Repurchase of shares of common stock | (130,963) | |
Dividends paid to shareholders | (60,675) | (50,666) |
Net cash used in financing activities | (208,016) | (114,401) |
Net (decrease) increase in cash and cash equivalents | (110,585) | 272 |
Cash and cash equivalents-beginning of period | 210,125 | 150,918 |
Cash and cash equivalents-end of period | 99,540 | 151,190 |
Supplemental disclosures of cash flow information: | ||
Interest paid, net of amounts capitalized | 238 | 568 |
Income taxes paid | 12,391 | 19,940 |
Capital expenditures included in current liabilities | $ 16,934 | $ 9,415 |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Sep. 24, 2019 | |
Basis of Presentation | |
Basis of Presentation | (1) Basis of Presentation The accompanying unaudited condensed consolidated financial statements include the accounts of Texas Roadhouse, Inc. ("TRI"), our wholly-owned subsidiaries and subsidiaries in which we have a controlling interest (collectively the "Company," "we," "our" and/or "us") as of September 24, 2019 and December 25, 2018 and for the 13 and 39 weeks ended September 24, 2019 and September 25, 2018. As of September 24, 2019, we owned and operated 502 restaurants and franchised an additional 95 restaurants in 49 states and ten foreign countries. Of the 502 company restaurants that were operating at September 24, 2019, 482 were wholly-owned and 20 were majority-owned. Of the 95 franchise restaurants, 70 were domestic restaurants and 25 were international restaurants. As of September 25, 2018, we owned and operated 479 restaurants and franchised an additional 91 restaurants in 49 states and eight foreign countries. Of the 479 company restaurants that were operating at September 25, 2018, 460 were wholly-owned and 19 were majority-owned. Of the 91 franchise restaurants, 70 were domestic restaurants and 21 were international restaurants. As of September 24, 2019 and September 25, 2018, we owned a 5.0% to 10.0% equity interest in 24 domestic franchise restaurants. Additionally, as of September 24, 2019 and September 25, 2018, we owned a non-Texas Roadhouse restaurants as part of a joint venture agreement with a casual dining restaurant operator in China. The unconsolidated restaurants are accounted for using the equity method. Our investments in these unconsolidated affiliates are included in other assets in our unaudited condensed consolidated balance sheets, and we record our percentage share of net income earned by these unconsolidated affiliates in our unaudited condensed consolidated statements of income and comprehensive income under equity income from investments in unconsolidated affiliates. All significant intercompany balances and transactions for these unconsolidated restaurants as well as the entities whose accounts have been consolidated have been eliminated. We have made a number of estimates and assumptions relating to the reporting of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the unaudited condensed consolidated financial statements and the reporting of revenue and expenses during the periods to prepare these unaudited condensed consolidated financial statements in conformity with U.S. generally accepted accounting principles ("GAAP"). Significant items subject to such estimates and assumptions include the carrying amount of property and equipment, goodwill, obligations related to insurance reserves, leases and leasehold improvements, legal reserves, gift card breakage and third party fees and income taxes. Actual results could differ from those estimates. In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all adjustments, consisting only of normal recurring adjustments, necessary to present fairly our consolidated financial position, results of operations and cash flows for the periods presented. The unaudited condensed consolidated financial statements have been prepared in accordance with GAAP, except that certain information and footnotes have been condensed or omitted pursuant to rules and regulations of the Securities and Exchange Commission ("SEC"). Operating results for the 13 and 39 weeks ended September 24, 2019 are not necessarily indicative of the results that may be expected for the year ending December 31, 2019. The unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 25, 2018. Our significant interim accounting policies include the recognition of income taxes using an estimated annual effective tax rate. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 9 Months Ended |
Sep. 24, 2019 | |
Recent Accounting Pronouncements | |
Recent Accounting Pronouncements | (2) Recent Accounting Pronouncements Leases (Accounting Standards Codification 842, "ASC 842") On December 26, 2018, we adopted ASC 842, Leases As further described in note 3, we lease land and/or buildings for the majority of our restaurants under non-cancelable lease agreements. We adopted ASC 842 using a modified retrospective approach. As a result, the comparative financial information has not been updated and the required disclosures prior to the date of adoption have not been updated and continue to be reported under the accounting standards in effect for those periods. ASC 842 also permitted the election of certain practical expedients upon adoption. We elected the transition package of practical expedients which allowed us to carryforward the historical lease classification. We also elected the practical expedient to not separate lease and non-lease components for all leases entered into after the date of adoption. Finally, we elected the hindsight practical expedient which required us to assess the lease term for all existing leases. This resulted in extending the terms for certain existing leases in which renewal options had already been exercised or were reasonably certain of being exercised and shortening the terms for certain existing leases in which renewal options were not reasonably certain of being exercised. As a result of the hindsight election, we recorded a million reduction, net of tax, to retained earnings as of the first day of fiscal 2019 to reflect the change in lease terms. The adoption of this standard had a significant impact on our consolidated balance sheet. There was no significant impact to our results of operations or cash flows. This standard did not have a significant impact on our liquidity or on our compliance with our financial covenants associated with our credit facility. Financial Instruments (Accounting Standards Update 2016-13, "ASU 2016-13") In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments Goodwill (Accounting Standards Update 2017-04, "ASU 2017-04") In January 2017, the FASB issued ASU 2017-04, Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment, Fair Value Measurement (Accounting Standards Update 2018-13, "ASU 2018-13") In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement, which changes disclosure requirements for fair value measurements. ASU 2018-13 is effective for fiscal years beginning after December 15, 2019 (our 2020 fiscal year) and for interim periods within those years, with early adoption permitted. We are currently assessing the impact of this new standard on our consolidated financial statements. |
Leases
Leases | 9 Months Ended |
Sep. 24, 2019 | |
Leases | |
Leases | (3) Leases We recognize right-of-use assets and lease liabilities for both real estate and equipment leases that have a term in excess of one year . As of September 24, 2019, these amounts were as follows (in thousands): Leases Real estate Equipment Total Operating lease right-of-use assets $ 491,687 $ 3,732 $ 495,419 Current portion of operating lease liabilities 15,502 1,246 16,748 Operating lease liabilities, net of current portion 529,994 2,486 532,480 Total operating lease liabilities $ 545,496 $ 3,732 $ 549,228 Information related to our real estate leases as of and for the 13 and 39 week periods ended September 24, 2019 was as follows (in thousands): 13 Weeks Ended 39 Weeks Ended Real estate costs September 24, 2019 September 24, 2019 Operating lease $ 13,837 $ 40,751 Variable lease 378 1,228 Short-term lease 30 90 Total lease costs $ 14,245 $ 42,069 Real estate lease liability maturity analysis Total 2019 $ 12,657 2020 51,896 2021 52,708 2022 53,547 2023 53,494 Thereafter 756,067 Total $ 980,369 Less interest 434,873 Total discounted operating lease liabilities $ 545,496 13 Weeks Ended 39 Weeks Ended Real estate leases other information September 24, 2019 September 24, 2019 Cash paid for amounts included in measurement of operating lease liabilities $ 12,268 $ 36,384 Right-of-use assets obtained in exchange for new operating lease liabilities $ 14,229 $ 41,102 Weighted-average remaining lease term (years) 17.88 Weighted-average discount rate 6.78 Operating lease payments exclude $11.2 million of minimum lease payments for executed real estate leases that we have not yet taken possession. million, respectively. The right-of-use asset balance is included as a component of other assets and the lease liability balance as a component of other liabilities in the unaudited condensed consolidated balance sheets. We lease land and/or buildings for the majority of our restaurants under non-cancelable lease agreements. These leases typically have initial terms ranging from periods. When determining the lease term, we include option periods for which failure to renew the lease imposes a penalty on us in such an amount that renewal appears, at the inception of the lease, to be reasonably certain. The primary penalty to which we are subject is the economic detriment associated with the existence of leasehold improvements which might become impaired if we choose not to continue the use of the leased property. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants that would impact lease classification. Beginning in 2019, we recognize operating lease right-of-use assets and operating lease liabilities for real estate leases, including our restaurant leases and Support Center lease, as well as certain restaurant equipment leases based on the present value of the lease payments over the lease term. We estimate the present value based on our incremental borrowing rate which corresponds to the underlying lease term. In addition, operating lease right-of-use assets are reduced for accrued rent and increased for any initial direct costs recognized at lease inception. For leases commencing in 2019 and later, we account for lease and non-lease components as a single lease component. Certain of our operating leases contain predetermined fixed escalations of the minimum rent over the lease term. For these leases, we recognize the related rent expense on a straight- line basis over the lease term. We may receive rent concessions or leasehold improvement incentives upon opening a restaurant that is subject to a lease which we consider when determining straight-line rent expense. We also may receive rent holidays, which would begin on the possession date and end when the store opens, during which no cash rent payments are typically due under the terms of the lease. Rent holidays are included in the lease term when determining straight- line rent expense. In recognizing straight-line rent expense, we record the difference between amounts charged to operations and amounts paid as accrued rent. Straight-line rent expense is included as an operating lease cost in the table above. Certain of our operating leases contain clauses that provide for additional contingent rent based on a percentage of sales greater than certain specified target amounts. We recognize contingent rent expense prior to the achievement of the specified target that triggers the contingent rent, provided achievement of the target is considered probable. In addition, certain of our operating leases have variable escalations of the minimum rent that depend on an index or rate. We recognize variable rent expense when the escalation is determinable. Contingent rent and variable rent expense are included as variable lease costs in the table above. The following is a schedule of future minimum lease payments required for real estate and equipment operating leases that have a remaining term in excess of one year as of December 25, 2018 (in thousands): Operating Leases 2019 $ 50,030 2020 49,582 2021 49,917 2022 50,237 2023 49,854 Thereafter 677,710 Total $ 927,330 Rent expense for operating leases consisted of the following for the 13 and 39 week periods ended September 25, 2018 (in thousands): 13 Weeks Ended 39 Weeks Ended September 25, 2018 September 25, 2018 Minimum rent—occupancy $ 12,101 $ 35,470 Contingent rent 229 830 Rent expense, occupancy 12,330 36,300 Minimum rent—equipment and other 1,491 4,435 Rent expense $ 13,821 $ 40,735 |
Long-term Debt
Long-term Debt | 9 Months Ended |
Sep. 24, 2019 | |
Long-term Debt | |
Long-term Debt and Obligations Under Capital Lease | (4) Long-term Debt On August 7, 2017, we entered into the Amended and Restated Credit Agreement (the "Amended Credit Agreement") with respect to our revolving credit facility with a syndicate of commercial lenders led by JPMorgan Chase Bank, N.A., PNC Bank, N.A., and Wells Fargo Bank, N.A. The revolving credit facility remains an unsecured, revolving credit agreement under which we may borrow up to $200.0 million with the option to increase the revolving credit facility by an additional $200.0 million subject to certain limitations. The Amended Credit Agreement extends the maturity date of our revolving credit facility until August 5, 2022. The terms of the Amended Credit Agreement require us to pay interest on outstanding borrowings at the London Interbank Offered Rate ("LIBOR") plus a margin of 0.875% to 1.875% and to pay a commitment fee of 0.125% to 0.30% per year on any unused portion of the revolving credit facility, in each case depending on our leverage ratio, or the Alternate Base Rate, which is the highest of the issuing banks’ prime lending rate, the Federal Reserve Bank of New York rate plus 0.50% or the Adjusted Eurodollar Rate for a one month interest period on such day plus 1.0%. In April 2018, we paid off our outstanding credit facility of $50.0 million. The weighted-average interest rate for the amended revolving credit facility as of September 24, 2019 and December 25, 2018 was The lenders’ obligation to extend credit pursuant to the Amended Credit Agreement depends on us maintaining certain financial covenants, including a minimum consolidated fixed charge coverage ratio of 2.00 to 1.00 and a maximum consolidated leverage ratio of 3.00 to 1.00. The Amended Credit Agreement permits us to incur additional secured or unsecured indebtedness outside the amended revolving credit facility, except for the incurrence of secured indebtedness that in the aggregate is equal to or greater than $125.0 million and 20 % of our consolidated tangible net worth. We were in compliance with all financial covenants as of September 24, 2019. |
Revenue
Revenue | 9 Months Ended |
Sep. 24, 2019 | |
Revenue | |
Revenue | ( 5) Revenue The following table disaggregates our revenue by major source (in thousands): 13 weeks ended 39 weeks ended September 24, 2019 September 25, 2018 September 24, 2019 September 25, 2018 Restaurant and other sales $ 645,230 $ 589,704 $ 2,014,720 $ 1,836,179 Franchise royalties 4,645 4,249 14,316 13,069 Franchise fees 614 642 1,889 2,289 Total revenue $ 650,489 $ 594,595 $ 2,030,925 $ 1,851,537 We record deferred revenue for gift cards which includes cards that have been sold but not yet redeemed, a breakage adjustment for a percentage of gift cards that are not expected to be redeemed, and fees paid on gift cards sold through third party retailers. When the gift cards are redeemed, we recognize restaurant sales and reduce deferred revenue. We amortize breakage and third party fees consistent with the historic redemption pattern of the associated gift card and recognize as a component of other sales. As of September 24, 2019 and December 25, 2018, our deferred revenue balance related to gift cards was million, respectively. We recognized sales of million for the 13 and 39 weeks ended September 24, 2019, respectively, related to the amount in deferred revenue as of December 25, 2018. We recognized sales of |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 24, 2019 | |
Income Taxes | |
Income Taxes | (6) Income Taxes A reconciliation of the statutory federal income tax rate to our effective tax rate for the 13 and 39 weeks ended September 24, 2019 and September 25, 2018 is as follows: 13 Weeks Ended 39 Weeks Ended September 24, 2019 September 25, 2018 September 24, 2019 September 25, 2018 Tax at statutory federal rate 21.0 % 21.0 % 21.0 % 21.0 % State and local tax, net of federal benefit 3.6 3.8 3.6 3.8 FICA tip tax credit (9.2) (8.3) (9.7) (9.1) Work opportunity tax credit (1.5) (1.9) (1.4) (1.5) Stock compensation 0.1 (1.4) (0.2) (1.4) Net income attributable to noncontrolling interests (0.6) (1.2) (0.6) (0.8) Officers compensation 1.0 2.3 1.1 1.4 Other 0.7 0.8 0.8 1.0 Total 15.1 % 15.1 % 14.6 % 14.4 % Our effective tax rate was 15.1 % for both of the 13 week periods ended September 24, 2019 and September 25, 2018. The Q3 2019 effective tax rate was unchanged compared to Q3 2018 due to lower non-deductible officers’ compensation offset by lower excess tax benefits related to our share-based compensation program. For the 39 weeks ended September 24, 2019 our effective tax rate increased to 14.6% compared to 14.4 % for the 39 weeks ended September 25, 2018. This increase was primarily driven by lower excess tax benefits related to our share-based compensation program partially offset by higher FICA tip credits. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 24, 2019 | |
Commitments and Contingencies | |
Commitments and Contingencies | (7) Commitments and Contingencies The estimated cost of completing capital project commitments at September 24, 2019 and December 25, 2018 was $166.5 million and $168.3 million, respectively. As of September 24, 2019 and December 25, 2018, we were contingently liable for $14.1 million and $14.8 million, respectively, for seven lease guarantees, listed in the table below. These amounts represent the maximum potential liability of future payments under the guarantees. In the event of default, the indemnity and default clauses in our assignment agreements govern our ability to pursue and recover damages incurred. No material liabilities have been recorded as of September 24, 2019 and December 25, 2018 as the likelihood of default was deemed to be less than probable and the fair value of the guarantees is not considered significant. Lease Current Lease Everett, Massachusetts (1)(2) September 2002 February 2023 Longmont, Colorado (1) October 2003 May 2029 Montgomeryville, Pennsylvania (1) October 2004 March 2021 Fargo, North Dakota (1)(2) February 2006 July 2021 Logan, Utah (1) January 2009 August 2024 Irving, Texas (3) December 2013 December 2019 Louisville, Kentucky (3)(4) December 2013 November 2023 (1) Real estate lease agreements for restaurant locations which we entered into before granting franchise rights to those restaurants. We have subsequently assigned the leases to the franchisees, but remain contingently liable under the terms of the lease if the franchisee defaults . (2) As discussed in note 8, these restaurants are owned, in part, by our founder or the former president of the company. (3) Leases associated with non-Texas Roadhouse restaurants which were sold. The leases were assigned to the acquirer, but we remain contingently liable under the terms of the lease if the acquirer defaults. (4) We may be released from liability after the initial contractual lease term expiration contingent upon certain conditions being met by the acquirer. During the 13 and 39 weeks ended September 24, 2019, we bought most of our beef from three suppliers. A change in suppliers could cause supply shortages and/or higher costs to secure adequate supplies and a possible loss of sales, which would affect operating results adversely. We have no material minimum purchase commitments with our vendors that extend beyond a year. Occasionally, we are a defendant in litigation arising in the ordinary course of our business, including "slip and fall" accidents, employment related claims, claims related to our service of alcohol, and claims from guests or employees alleging illness, injury or food quality, health or operational concerns. None of these types of litigation, most of which are covered by insurance, has had a material adverse effect on us during the periods covered by this report and, as of the date of this report, we are not party to any litigation that we believe could have a material adverse effect on our business. |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 24, 2019 | |
Related Party Transactions | |
Related Party Transactions | (8) Related Party Transactions As of September 24, 2019, we had nine franchise restaurants and one majority-owned company restaurant owned in part by certain officers or the former president of the Company. As of September 25, 2018, we had franchise restaurants owned in part by certain officers of the Company. For both of the 13 week periods ended September 24, 2019 and September 25, 2018, these franchise entities paid us fees of million. For both of the 39 week periods ended September 24, 2019 and September 25, 2018, these franchise entities paid us fees of million. As disclosed in note 7, we are contingently liable on leases related to of these franchise restaurants. In addition, for the 13 weeks ended June 26, 2018, our founder made a personal contribution of $1.0 million to cover a portion of the planned expenses incurred as part of the 2018 annual managing partner conference which marked our 25th anniversary. This amount was recorded as general and administrative expense on the unaudited condensed consolidated statement of income and as additional paid-in-capital on the unaudited condensed consolidated statement of stockholders’ equity. |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Sep. 24, 2019 | |
Earnings Per Share | |
Earnings Per Share | (9) Earnings Per Share The share and net income per share data for all periods presented are based on the historical weighted-average shares outstanding. The diluted earnings per share calculations show the effect of the weighted-average restricted stock units from our equity incentive plans. Performance stock units are not included in the diluted earnings per share calculation until the performance-based criteria have been met. For the 13 week periods ended September 24, 2019 and September 25, 2018, there were 22,302 and zero shares of nonvested stock, respectively, that were outstanding but not included in the computation of diluted earnings per share because they would have had an anti-dilutive effect. For the 39 week periods ended September 24, 2019 and September 25, 2018, there were 5,384 and 220 shares of nonvested stock, respectively, that were outstanding but not included because they would have had an anti-dilutive effect. The following table sets forth the calculation of earnings per share and weighted-average shares outstanding (in thousands) as presented in the accompanying unaudited condensed consolidated statements of income and comprehensive income: 13 Weeks Ended 39 Weeks Ended September 24, 2019 September 25, 2018 September 24, 2019 September 25, 2018 Net income attributable to Texas Roadhouse, Inc. and subsidiaries $ 36,531 $ 29,125 $ 131,766 $ 127,893 Basic EPS: Weighted-average common shares outstanding 69,573 71,508 70,896 71,429 Basic EPS $ 0.53 $ 0.41 $ 1.86 $ 1.79 Diluted EPS: Weighted-average common shares outstanding 69,573 71,508 70,896 71,429 Dilutive effect of nonvested stock 366 498 391 477 Shares-diluted 69,939 72,006 71,287 71,906 Diluted EPS $ 0.52 $ 0.40 $ 1.85 $ 1.78 |
Fair Value Measurement
Fair Value Measurement | 9 Months Ended |
Sep. 24, 2019 | |
Fair Value Measurement | |
Fair Value Measurement | (10) Fair Value Measurements ASC 820, Fair Value Measurements and Disclosures ("ASC 820"), establishes a framework for measuring fair value and expands disclosures about fair value measurements. ASC 820 establishes a three-level hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs in measuring fair value. The valuation hierarchy is based upon the transparency of inputs to the valuation of an asset or liability on the measurement date. Level 1 Inputs based on quoted prices in active markets for identical assets. Level 2 Inputs other than quoted prices included within Level 1 that are observable for the assets, either directly or indirectly. Level 3 Inputs that are unobservable for the asset. There were no transfers among levels within the fair value hierarchy during the 13 and 39 weeks ended September 24, 2019. The following table presents the fair values for our financial assets and liabilities measured on a recurring basis: Fair Value Measurements Level September 24, 2019 December 25, 2018 Deferred compensation plan—assets 1 $ 41,053 $ 31,632 Deferred compensation plan—liabilities 1 (41,128) (31,721) The Second Amended and Restated Deferred Compensation Plan of Texas Roadhouse Management Corp., as amended, (the "Deferred Compensation Plan") is a nonqualified deferred compensation plan which allows highly compensated employees to defer receipt of a portion of their compensation and contribute such amounts to one or more investment funds held in a rabbi trust. We report the amounts of the rabbi trust in other assets and the corresponding liability in other liabilities in our unaudited condensed consolidated financial statements. These investments are considered trading securities and are reported at fair value based on quoted market prices. The realized and unrealized holding gains and losses related to these investments, as well as the offsetting compensation expense, are recorded in general and administrative expense in the unaudited condensed consolidated statements of income and comprehensive income. At September 24, 2019 and December 25, 2018, the fair values of cash and cash equivalents, accounts receivable and accounts payable approximated their carrying values based on the short-term nature of these instruments. |
Stock Repurchase Program
Stock Repurchase Program | 9 Months Ended |
Sep. 24, 2019 | |
Stock Repurchase Program | |
Stockholders' Equity | (11) Stock Repurchase Program On May 31, 2019, our Board of Directors approved a stock repurchase program under which we may repurchase up to $250.0 million of our common stock. This stock repurchase program has no expiration date and replaced a previous stock repurchase program which was approved on May 22, 2014. All repurchases to date under our stock repurchase programs have been made through open market transactions. The timing and the amount of any repurchases are determined by management under parameters established by our Board of Directors, based on an evaluation of our stock price, market conditions and other corporate considerations. For the 13 week period ended September 24, 2019, we paid $18.9 million to repurchase 358,381 shares of our common stock. For the 39 week period ended September 24, 2019, we paid $131.0 million to repurchase 2,455,058 shares of our common stock. This includes repurchases of $80.7 million under the new repurchase program and repurchases of $50.3 million under the previous stock repurchase program. We did not repurchase any shares of common stock during the 13 and 39 week periods ended September 25, 2018. As of September 24, 2019, we had million remaining under our authorized stock repurchase program. |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 24, 2019 | |
Schedule of rent expense for operating leases | Rent expense for operating leases consisted of the following for the 13 and 39 week periods ended September 25, 2018 (in thousands): 13 Weeks Ended 39 Weeks Ended September 25, 2018 September 25, 2018 Minimum rent—occupancy $ 12,101 $ 35,470 Contingent rent 229 830 Rent expense, occupancy 12,330 36,300 Minimum rent—equipment and other 1,491 4,435 Rent expense $ 13,821 $ 40,735 |
Operating Leasing Arrangement of Real Estate | |
Schedule of right-of-use assets and lease liabilities | We recognize right-of-use assets and lease liabilities for both real estate and equipment leases that have a term in excess of one year . As of September 24, 2019, these amounts were as follows (in thousands): Leases Real estate Equipment Total Operating lease right-of-use assets $ 491,687 $ 3,732 $ 495,419 Current portion of operating lease liabilities 15,502 1,246 16,748 Operating lease liabilities, net of current portion 529,994 2,486 532,480 Total operating lease liabilities $ 545,496 $ 3,732 $ 549,228 |
Real estate | |
Schedule of real estate leases other information | 13 Weeks Ended 39 Weeks Ended Real estate costs September 24, 2019 September 24, 2019 Operating lease $ 13,837 $ 40,751 Variable lease 378 1,228 Short-term lease 30 90 Total lease costs $ 14,245 $ 42,069 Real estate lease liability maturity analysis Total 2019 $ 12,657 2020 51,896 2021 52,708 2022 53,547 2023 53,494 Thereafter 756,067 Total $ 980,369 Less interest 434,873 Total discounted operating lease liabilities $ 545,496 13 Weeks Ended 39 Weeks Ended Real estate leases other information September 24, 2019 September 24, 2019 Cash paid for amounts included in measurement of operating lease liabilities $ 12,268 $ 36,384 Right-of-use assets obtained in exchange for new operating lease liabilities $ 14,229 $ 41,102 Weighted-average remaining lease term (years) 17.88 Weighted-average discount rate 6.78 |
Real estate and equipment | |
Schedule of future minimum lease payments required for operating leases that have initial or remaining non-cancellable terms in excess of one year | The following is a schedule of future minimum lease payments required for real estate and equipment operating leases that have a remaining term in excess of one year as of December 25, 2018 (in thousands): Operating Leases 2019 $ 50,030 2020 49,582 2021 49,917 2022 50,237 2023 49,854 Thereafter 677,710 Total $ 927,330 |
Revenue (Tables)
Revenue (Tables) | 9 Months Ended |
Sep. 24, 2019 | |
Revenue | |
Schedule of disaggregated revenue | 13 weeks ended 39 weeks ended September 24, 2019 September 25, 2018 September 24, 2019 September 25, 2018 Restaurant and other sales $ 645,230 $ 589,704 $ 2,014,720 $ 1,836,179 Franchise royalties 4,645 4,249 14,316 13,069 Franchise fees 614 642 1,889 2,289 Total revenue $ 650,489 $ 594,595 $ 2,030,925 $ 1,851,537 |
Income Taxes (Tables)
Income Taxes (Tables) | 9 Months Ended |
Sep. 24, 2019 | |
Income Taxes | |
Schedule of reconciliation of the statutory federal income tax rate to our effective tax rate | 13 Weeks Ended 39 Weeks Ended September 24, 2019 September 25, 2018 September 24, 2019 September 25, 2018 Tax at statutory federal rate 21.0 % 21.0 % 21.0 % 21.0 % State and local tax, net of federal benefit 3.6 3.8 3.6 3.8 FICA tip tax credit (9.2) (8.3) (9.7) (9.1) Work opportunity tax credit (1.5) (1.9) (1.4) (1.5) Stock compensation 0.1 (1.4) (0.2) (1.4) Net income attributable to noncontrolling interests (0.6) (1.2) (0.6) (0.8) Officers compensation 1.0 2.3 1.1 1.4 Other 0.7 0.8 0.8 1.0 Total 15.1 % 15.1 % 14.6 % 14.4 % |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 9 Months Ended |
Sep. 24, 2019 | |
Commitments and Contingencies | |
Schedule of real estate lease agreements for franchises | Lease Current Lease Everett, Massachusetts (1)(2) September 2002 February 2023 Longmont, Colorado (1) October 2003 May 2029 Montgomeryville, Pennsylvania (1) October 2004 March 2021 Fargo, North Dakota (1)(2) February 2006 July 2021 Logan, Utah (1) January 2009 August 2024 Irving, Texas (3) December 2013 December 2019 Louisville, Kentucky (3)(4) December 2013 November 2023 (1) Real estate lease agreements for restaurant locations which we entered into before granting franchise rights to those restaurants. We have subsequently assigned the leases to the franchisees, but remain contingently liable under the terms of the lease if the franchisee defaults . (2) As discussed in note 8, these restaurants are owned, in part, by our founder or the former president of the company. (3) Leases associated with non-Texas Roadhouse restaurants which were sold. The leases were assigned to the acquirer, but we remain contingently liable under the terms of the lease if the acquirer defaults. (4) We may be released from liability after the initial contractual lease term expiration contingent upon certain conditions being met by the acquirer. |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Sep. 24, 2019 | |
Earnings Per Share | |
Schedule of calculation of earnings per share and weighted average shares outstanding | The following table sets forth the calculation of earnings per share and weighted-average shares outstanding (in thousands) as presented in the accompanying unaudited condensed consolidated statements of income and comprehensive income: 13 Weeks Ended 39 Weeks Ended September 24, 2019 September 25, 2018 September 24, 2019 September 25, 2018 Net income attributable to Texas Roadhouse, Inc. and subsidiaries $ 36,531 $ 29,125 $ 131,766 $ 127,893 Basic EPS: Weighted-average common shares outstanding 69,573 71,508 70,896 71,429 Basic EPS $ 0.53 $ 0.41 $ 1.86 $ 1.79 Diluted EPS: Weighted-average common shares outstanding 69,573 71,508 70,896 71,429 Dilutive effect of nonvested stock 366 498 391 477 Shares-diluted 69,939 72,006 71,287 71,906 Diluted EPS $ 0.52 $ 0.40 $ 1.85 $ 1.78 |
Fair Value Measurement (Tables)
Fair Value Measurement (Tables) | 9 Months Ended |
Sep. 24, 2019 | |
Fair Value Measurement | |
Schedule of fair values for our financial assets and liabilities measured on a recurring basis | Fair Value Measurements Level September 24, 2019 December 25, 2018 Deferred compensation plan—assets 1 $ 41,053 $ 31,632 Deferred compensation plan—liabilities 1 (41,128) (31,721) |
Basis of Presentation (Details)
Basis of Presentation (Details) | Sep. 24, 2019restaurantitem | Sep. 25, 2018restaurantitem |
Description of Business | ||
Number of states in which restaurants operate | item | 49 | 49 |
Number of countries in which restaurants operate | item | 10 | 8 |
Company | ||
Description of Business | ||
Number of restaurants | 502 | 479 |
Company | Wholly-owned | ||
Description of Business | ||
Number of restaurants | 482 | 460 |
Company | Majority-owned | ||
Description of Business | ||
Number of restaurants | 20 | 19 |
Franchise | ||
Description of Business | ||
Number of restaurants | 95 | 91 |
Franchise | Domestic | ||
Description of Business | ||
Number of restaurants | 70 | 70 |
Franchise | International | ||
Description of Business | ||
Number of restaurants | 25 | 21 |
Franchise | Unconsolidated | ||
Description of Business | ||
Number of restaurants | 24 | 24 |
Franchise | Minimum | Unconsolidated | ||
Description of Business | ||
Ownership percentage by entity | 5.00% | 5.00% |
Franchise | Maximum | Unconsolidated | ||
Description of Business | ||
Ownership percentage by entity | 10.00% | 10.00% |
Non-Texas Roadhouse restaurants | Unconsolidated | ||
Description of Business | ||
Number of restaurants | 4 | 4 |
Ownership percentage by entity | 40.00% | 40.00% |
Recent Accounting Pronounceme_2
Recent Accounting Pronouncements (Details) - USD ($) $ in Thousands | Dec. 26, 2018 | Sep. 24, 2019 |
Accounting pronouncements | ||
Lease liability | $ 549,228 | |
Cumulative effect on retained earnings | $ 2,700 | |
ASU 2016-02 (Topic 842) | ||
Accounting pronouncements | ||
Cumulative effect on retained earnings | $ (2,678) |
Leases (Details)
Leases (Details) $ in Thousands | Sep. 24, 2019USD ($) |
Leases | |
Term (in years) | 1 year |
Operating lease right-of-use asset | $ 495,419 |
Current portion of operating lease liabilities | 16,748 |
Operating lease liabilities, net of current portion | 532,480 |
Total operating lease liabilities | 549,228 |
Real estate | |
Leases | |
Operating lease right-of-use asset | 491,687 |
Current portion of operating lease liabilities | 15,502 |
Operating lease liabilities, net of current portion | 529,994 |
Total operating lease liabilities | 545,496 |
Equipment | |
Leases | |
Operating lease right-of-use asset | 3,732 |
Current portion of operating lease liabilities | 1,246 |
Operating lease liabilities, net of current portion | 2,486 |
Total operating lease liabilities | $ 3,732 |
Leases - Real estate costs (Det
Leases - Real estate costs (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 24, 2019 | Sep. 24, 2019 | |
Lease costs | ||
Operating lease | $ 13,837 | $ 40,751 |
Variable lease | 378 | 1,228 |
Short-term lease | 30 | 90 |
Total lease costs | $ 14,245 | $ 42,069 |
Leases - Real estate lease liab
Leases - Real estate lease liability maturity analysis (Details) - USD ($) $ in Thousands | Sep. 24, 2019 | Dec. 25, 2018 |
Leases | ||
Total operating lease liabilities | $ 549,228 | |
Real estate | ||
Leases | ||
2019 | 12,657 | |
2020 | 51,896 | |
2021 | 52,708 | |
2022 | 53,547 | |
2023 | 53,494 | |
Thereafter | 756,067 | |
Total | 980,369 | |
Less interest | 434,873 | |
Total operating lease liabilities | $ 545,496 | |
Real estate and equipment | ||
Leases | ||
2019 | $ 50,030 | |
2020 | 49,582 | |
2021 | 49,917 | |
2022 | 50,237 | |
2023 | 49,854 | |
Thereafter | 677,710 | |
Total | $ 927,330 |
Leases - Real estate leases oth
Leases - Real estate leases other information (Details) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 24, 2019USD ($) | Sep. 24, 2019USD ($)lease | |
Leases | ||
Cash paid for amounts included in measurement of operating lease liabilities | $ 12,268 | $ 36,384 |
Right-of-use assets obtained in exchange for new operating lease liabilities | $ 14,229 | $ 41,102 |
Weighted-average remaining lease term | 17 years 10 months 17 days | 17 years 10 months 17 days |
Weighted-average discount rate | 6.78% | 6.78% |
Operating lease not yet taken possession | $ 11,200 | $ 11,200 |
Number of finance leases | lease | 1 | |
Right-of-use asset | 1,800 | $ 1,800 |
Lease liability | $ 2,100 | $ 2,100 |
Leases - Rent expense (Details)
Leases - Rent expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |
Sep. 25, 2018 | Sep. 25, 2018 | Sep. 24, 2019 | |
Leases | |||
Rent expense | $ 13,821 | $ 40,735 | |
Term (in years) | 1 year | ||
Minimum | |||
Leases | |||
Term (in years) | 10 years | ||
Lease renewal term | 1 year | ||
Maximum | |||
Leases | |||
Term (in years) | 15 years | ||
Lease renewal term | 5 years | ||
Occupancy | |||
Leases | |||
Minimum rent | 12,101 | 35,470 | |
Contingent rent | 229 | 830 | |
Rent expense | 12,330 | 36,300 | |
Equipment and other | |||
Leases | |||
Minimum rent | $ 1,491 | $ 4,435 |
Long-term Debt (Details)
Long-term Debt (Details) - Revolver - USD ($) $ in Millions | Aug. 07, 2017 | Apr. 30, 2018 | Sep. 24, 2019 | Dec. 25, 2018 |
Revolving Credit Facility | ||||
Revolving credit facility, maximum borrowing capacity | $ 200 | |||
Revolving credit facility contingent increase in maximum borrowing capacity | 200 | |||
Repayment of credit facility | $ 50 | |||
Weighted-average interest rate (as a percent) | 2.92% | 3.81% | ||
Revolving credit facility, remaining borrowing capacity | $ 191.8 | |||
Letters of credit outstanding | $ 8.2 | |||
Threshold for aggregate secured indebtedness | $ 125 | |||
Debt instrument condition for additional borrowing of secured debt, based on percentage of consolidated tangible net worth | 20.00% | |||
Minimum | ||||
Revolving Credit Facility | ||||
Percentage of commitment fee on unused credit facility | 0.125% | |||
Revolving credit facility, fixed charge coverage ratio | 2 | |||
Maximum | ||||
Revolving Credit Facility | ||||
Percentage of commitment fee on unused credit facility | 0.30% | |||
Revolving credit facility, leverage ratio | 3 | |||
LIBOR | Minimum | ||||
Revolving Credit Facility | ||||
Interest rate added to base rate (as a percent) | 0.875% | |||
LIBOR | Maximum | ||||
Revolving Credit Facility | ||||
Interest rate added to base rate (as a percent) | 1.875% | |||
Federal Reserve Bank of New York | ||||
Revolving Credit Facility | ||||
Interest rate added to base rate (as a percent) | 0.50% | |||
Adjusted Eurodollar Rate | ||||
Revolving Credit Facility | ||||
Interest rate added to base rate (as a percent) | 1.00% | |||
Interest period | 1 month |
Revenue (Details)
Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 24, 2019 | Sep. 25, 2018 | Sep. 24, 2019 | Sep. 25, 2018 | |
Revenue | ||||
Total revenue | $ 650,489 | $ 594,595 | $ 2,030,925 | $ 1,851,537 |
Restaurant and other sales | ||||
Revenue | ||||
Total revenue | 645,230 | 589,704 | 2,014,720 | 1,836,179 |
Franchise royalties | ||||
Revenue | ||||
Total revenue | 4,645 | 4,249 | 14,316 | 13,069 |
Franchise fees | ||||
Revenue | ||||
Total revenue | $ 614 | $ 642 | $ 1,889 | $ 2,289 |
Revenue - Other (Details)
Revenue - Other (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 24, 2019 | Sep. 25, 2018 | Sep. 24, 2019 | Sep. 25, 2018 | Dec. 25, 2018 | |
Revenue | |||||
Deferred revenue-gift cards | $ 107,200 | $ 107,200 | $ 192,242 | ||
Gift cards | |||||
Revenue | |||||
Deferred revenue-gift cards | 107,200 | 107,200 | $ 192,200 | ||
Deferred revenue recognized | $ 15,800 | $ 12,900 | $ 120,800 | $ 99,300 |
Income Taxes (Details)
Income Taxes (Details) | 3 Months Ended | 9 Months Ended | ||
Sep. 24, 2019 | Sep. 25, 2018 | Sep. 24, 2019 | Sep. 25, 2018 | |
Reconciliation of the statutory federal income tax rate to our effective tax rate: | ||||
Tax at statutory federal rate (as a percent) | 21.00% | 21.00% | 21.00% | 21.00% |
State and local tax, net of federal benefit (as a percent) | 3.60% | 3.80% | 3.60% | 3.80% |
FICA tip tax credit (as a percent) | (9.20%) | (8.30%) | (9.70%) | (9.10%) |
Work opportunity tax credit (as a percent) | (1.50%) | (1.90%) | (1.40%) | (1.50%) |
Stock compensation (as a percent) | 0.10% | (1.40%) | (0.20%) | (1.40%) |
Net income attributable to noncontrolling interests (as a percent) | (0.60%) | (1.20%) | (0.60%) | (0.80%) |
Officers compensation (as a percent) | 1.00% | 2.30% | 1.10% | 1.40% |
Other (as a percent) | 0.70% | 0.80% | 0.80% | 1.00% |
Total (as a percent) | 15.10% | 15.10% | 14.60% | 14.40% |
Commitments and Contingencies_2
Commitments and Contingencies (Details) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended |
Sep. 24, 2019USD ($)item | Sep. 24, 2019USD ($)item | Dec. 25, 2018USD ($)item | |
Commitments and Contingencies | |||
Estimated cost to complete capital project commitments (in dollars) | $ | $ 166.5 | $ 166.5 | $ 168.3 |
Number of suppliers providing most of the company's beef | item | 3 | 3 | |
Lease Agreements | |||
Commitments and Contingencies | |||
Number of leases guarantees entity contingently liable | item | 7 | 7 | |
Lease Agreements | Maximum | |||
Commitments and Contingencies | |||
Contingently liable amount | $ | $ 14.1 | $ 14.1 | $ 14.8 |
Related Party Transactions (Det
Related Party Transactions (Details) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 24, 2019USD ($)restaurant | Sep. 25, 2018USD ($)restaurant | Jun. 26, 2018USD ($) | Sep. 24, 2019USD ($)restaurant | Sep. 25, 2018USD ($)restaurant | |
Related Party Transactions | |||||
Fees received from franchise and license restaurants | $ | $ 1.6 | $ 1.6 | |||
Franchise | |||||
Related Party Transactions | |||||
Number of restaurants | 95 | 91 | 95 | 91 | |
Officers, directors and shareholders | Majority-owned | |||||
Related Party Transactions | |||||
Number of restaurants | 1 | 1 | |||
Officers, directors and shareholders | Franchise | |||||
Related Party Transactions | |||||
Number of restaurants | 9 | 10 | 9 | 10 | |
Fees received from franchise and license restaurants | $ | $ 0.5 | $ 0.5 | |||
Number of restaurants for which the entity is contingently liable on the lease | 2 | ||||
Founder | Personal contribution | |||||
Related Party Transactions | |||||
Transactions with related party | $ | $ 1 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 24, 2019 | Sep. 25, 2018 | Sep. 24, 2019 | Sep. 25, 2018 | |
Earnings per share | ||||
Net income attributable to Texas Roadhouse, Inc. and subsidiaries | $ 36,531 | $ 29,125 | $ 131,766 | $ 127,893 |
Basic EPS: | ||||
Weighted-average common shares outstanding (in shares) | 69,573,000 | 71,508,000 | 70,896,000 | 71,429,000 |
Basic EPS (in dollars per share) | $ 0.53 | $ 0.41 | $ 1.86 | $ 1.79 |
Diluted EPS: | ||||
Weighted-average common shares outstanding (in shares) | 69,573,000 | 71,508,000 | 70,896,000 | 71,429,000 |
Dilutive effect of stock options and nonvested stock (in shares) | 366,000 | 498,000 | 391,000 | 477,000 |
Shares-diluted (in shares) | 69,939,000 | 72,006,000 | 71,287,000 | 71,906,000 |
Diluted EPS (in dollars per share) | $ 0.52 | $ 0.40 | $ 1.85 | $ 1.78 |
Nonvested stock | ||||
Antidilutive securities | ||||
Anti-dilutive securities (in shares) | 22,302 | 0 | 5,384 | 220 |
Fair Value Measurement (Details
Fair Value Measurement (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | |
Sep. 24, 2019USD ($) | Sep. 24, 2019USD ($)item | Dec. 25, 2018USD ($) | |
Fair value of financial instruments | |||
Transfer of asset levels within the fair value hierarchy | $ 0 | $ 0 | |
Minimum number of investment funds in rabbi trust for deferred compensation plan | item | 1 | ||
Fair value measured on a recurring basis | Level 1 | |||
Fair value of financial instruments | |||
Deferred compensation plan - assets | 41,053 | $ 41,053 | $ 31,632 |
Deferred compensation plan - liabilities | $ (41,128) | $ (41,128) | $ (31,721) |
Stock Repurchase Program (Detai
Stock Repurchase Program (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |
Sep. 24, 2019 | Sep. 24, 2019 | May 31, 2019 | |
Stockholders' Equity | |||
Repurchase of common stock authorized by board of directors | $ 250,000 | ||
Number of shares repurchased | 358,381 | 2,455,058 | |
Payments to repurchase common stock | $ 18,900 | $ 130,963 | |
Amount remaining under authorized stock repurchase program | $ 169,300 | 169,300 | |
Stock Repurchase Program [Member] | |||
Stockholders' Equity | |||
Payments to repurchase common stock | 80,700 | ||
Previous Stock Repurchase Program [Member] | |||
Stockholders' Equity | |||
Payments to repurchase common stock | $ 50,300 |