TXRH - Earnings call transcript Q4 2017

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Operator

Good evening and welcome to the Texas Roadhouse Fourth Quarter Earnings Conference Call. Today's call is being recorded. All participants are now in a listen-only mode. After the speakers' remarks, there will be a question-and-answer session. [Operator Instructions] I would now like to introduce Scott Colosi, President and Chief Financial Officer.

conference. your begin may You

Scott M. Colosi

be Thank you, should the By you section. may evening quarter texasroadhouse.com Web-site in the and access to good Investors also that have XXXX for December everybody. on our our ended at now XX, Melinda, found earnings fourth release

should Before therefore, guarantees will be remind statements. include not that we These remarks, undue of of part statements to our need formal not future forward-looking and performance, our reliance begin are upon I everyone discussion placed today them. our all materially of differ cause of more SEC release We could you refer to discussion to recent for from earnings those our the detailed the that results and relevant forward-looking factors filings statements. with actual a

to the reconciliations refer information and addition, release. our GAAP the we non-GAAP to be non-GAAP of found can in earnings may applicable measures, measures In

me On our Robinson, and Tonya and the Kent Investor call Founder President and with Taylor, our CEO, Finance Relations. Vice today our is of

will always, our As following open remarks, the questions. for call we

call pleasure Now it's turn Taylor. Kent over to to my the

Kent Taylor

Scott. Thanks

and X.X%. pleased XXXX, quarter to very of vibe the usual, to especially in XXXX, sales rest we an of a additional in year up for restaurant of top will and Tonya talk XXXX mandated I price our for X.X% plan service eight to quarters comparable to town. going fourth X.X%, have momentum inflation and a resulted our But forward huge. thank had increases growth including now track XX of year, of challenges comparable food X.X% are our add they our of comps increase have growth no to for overall, of of rate achieved in comps want nationally our a I in folks in continues at with cool X.X% sales approximately that growth another be consecutive drive Trust end for restaurants, yesterday. on legendary XXth feeling the guests and of wage of restaurants rocking announce positive discounts. April. strive to some to approximately about line wage friendliest we Company in In later. We are through with Traffic some XXXX, the it's in the know their year double-digit place take and increase implemented be increase X.X% which mid-December March our to in me, anniversary sales people another to quarter increase XXXX. will continue We up growth profit and With our which our doubt another celebrating coming I'm as to look in and serve operators

walk update. our will Tonya financial through you Now,

Tonya Robinson

everyone. evening good and Kent, Thanks,

the For driven unit XXXX, fourth week X.X% store X.X% of growth by XX.X%, revenues and in a average volume. grew quarter increase

by earned $X.X $XX.X million, the quarter, income the million, labor line at dollars restaurant Starting restaurant $XX.X from grew legislation. benefit $X.XX diluted which million, a share, we tax level, XX.X% by for increase or inflation. strong per during commodity tax Additionally, and XX% the quarter to driven offset partially Results per new over margin deflation, is prior growth year. included or share, top $X.XX the

some the of year down I'll a basis provide XX color a was each on items period As just mentioned. of sales XX%. margin over result, as to restaurant restaurant prior points percentage the

and improved XX X.X%. were percentage of from quarter sales driven holiday beef. total by by benefiting year in due of X.X% points, a per higher average labor sales Labor labor as includes comparable traffic percentage quarter, as comparable certain sales Overall, shift. positively X.X% X.X%, commodity comps period increase X.X% basis October, impacted For and out approximately hiring store inflation week prior basis our primarily of dollars comprised approximately a X.X% was approximately for due XXXX. week and X.X%, store periods. restaurant than month, per hours Cost higher Christmas XXX a with of By and of approximately along growth by sales points, the the labor initiatives traffic were check. XXX year increased in deflation to basis in of earlier Growth over X% sales December grew the guest November year restaurant X.X% during the rolled to points and growth

associated a basis lower XXXX Depreciation stock-based the incentive expense on percentage as to points, disaster restaurant basis, year claims. costs were basis related in $XX.X year-over-year in increased primarily driven a Lastly, XX $X.X of X.X%. well million up of margin, in by as recorded to sales Below G&A as driven were settlement the by basis quarter costs with decreased a by compensation. the legal supplies points versus last expense million to a other up driven of XX percentage with and decreasing points $X.X was quarter, openings. higher to as X.X%. G&A of $X and million primarily decreased charge percentage a in expense fourth The revenue restaurant as overlapping of but by timing revenue quarter X million improvement Also, the expense XXXX restaurant higher operating a million with preopening associated costs $X.X

enacted tax primarily rate which the new Our tax tax to certain year. legislation and the related at than re-valued XX.X%, million decrease rate net XX.X% $X.X lower in deferred expense year. that some in of was the tax last foreign The XXXX, operations to end of benefit as I the Because the legislation recorded of balances we our was to for the mentioned was earlier. came due quarter new related

and new pipeline to XX XX shape to on store remain up our XXXX, to approximately in is ahead target Bubba's restaurants, open Looking good including Company seven we restaurants.

not has based sales changed growth restaurant X.X% and full-year positive includes announced for in pricing increases. approximately expectation Our on

approximately currently basket on food arrangements XXXX. we relatively the XX% fixed-price flat On in total our cost we of side, food and to expect continue cost have

during increases will higher wage SIP related also XXXX, Other as to experience. to overall environmentally to-go to state ongoing growth supplies quality expectation restaurant-level will due labor certain hiring Diego. rate changes G&A an the as of due Our costs initiatives. $X will our other our San includes higher guest of in includes It $X held expectation and more and second expense quarter as from of million mid-single-digit in hours approximately Partner labor million Managing enhance compensation restaurant pressure. market include in operating in increases well expected minimum well better costs to which and to packaging $X.X inflation be wages friendly, that million is XXXX as the approximately Conference

remind year. you lapping charge million to first want legal I that in of $XX.X the this included quarter of the Additionally, will be we XXXX

impact rate currently XXXX of tax our we XX%. be to XX% the tax reform, the expect in With to range of

in $XX last Moving and to compared the balance in year, $XX sheet, to $XXX debt. million we cash, ended with up the million million year

paid XXXX, acquire from $XX $XXX flow million During of we million, restaurants, generated franchise expenditures million. million in to $XXX of $XX dividends and capital operations, four cash spent incurred

million, $XXX franchise we XXXX, million acquisitions. expect capital any to total For used cash excluding $XXX of expenditures for

authorization and through our to capital shareholders repurchase returning continue will share our dividends available. remains We

in announced, our to XX% in it $X.XX increasing authorized quarterly by $X.XX dividend we approximately share payment, As Board our increase from of per Directors XXXX. an has

turn Scott comments. I'll Now over call the to final for

Scott M. Colosi

Tonya. Thanks

We year inflation. a restaurant note. doubt in such significantly are impacted strong finished labor to have XXXX pleased the No in were margins by

did and However, offset deflation commodity impact. help strong the sales

existing we Company new and XX financial are in due restaurants seeing new our continue our Overall, in through restaurants, opened to on shareholders million, we million continued our time, capital remain XXXX, returned comfortable perform also $XX newest During same to higher four acquired At increased we restaurants. dividends. and in And sites. the cost. locations we our to to reinvest to our while average building $X.X with XXXX primarily development Roadhouse we the well, cost returns franchise

development last expect restaurants to Roadhouse year. similar XXXX, cost remain For see we our for to

progress. Our very a Bubba's unit in on still economics work are much

Roadhouse focused are the very We continue our strength on and of similar prototype day-to-day our to tweak execution. to

XXXX seven expect franchise addition mentioned XX restaurants more to rate are tax growth, including that our plans first our and in excited many year, have domestic to beyond. add Tonya six as in will currently international this international in Mexico. XXXX. significant lower in and growth our as In tax locations countries we result about in We The savings

monies maintaining look by returning to XX more in take day, on that for guests. and who by Our prices additional shareholders conference we turn in That care those a driving success through remarks. of and care our to include, of our experience end years partners At concludes our compensation for chance higher providing cash menu forward We plans our do growth know to legendary opening vendor the the benefits, and guests. higher staying legendary top dividends. our people people, on like And our value the with through best upcoming lies keeping dining celebrating our and focused I at and of our Kent, aggressive, line reinvesting operators our them. in seeing taking menu our

Melinda, questions. for line please the open So,

Operator

go We'll David Tarantino, to [Operator Baird. Instructions]

David Tarantino

number? comps. check First, how know quarter traffic growth question growth you pricing guess a clarification Tonya, and or to could that date I in on the us much let is

Tonya Robinson

Yes.

check, which X.X%. X.X%, QX, for about about X.X% had at pricing. including So, of That comps came implies average traffic of X.X% in

David Tarantino

Tonya, to was guess is related thank X.X%… My the first – and what I the you. question quarter

Tonya Robinson

about date, to that. quarter sorry the yes, Oh,

is are We on it's we we keep quarterly talk quarter kind days, about we are – of So, kind that XX at that X.X%. at talk of, of don't basis. that really David. about only to date – traffic, comps since And about a only much how we

that. Sorry about

David Tarantino

to that QX, about in right the than what you number it in given that is Is there pricing? Okay. though had less what you think pricing said

Tonya Robinson

right to Yes, assume. be that would

in basis X.X% implemented we There's that about about roll-off May. points there pricing some had of We in also will roll-off. XX So, in mid-December.

So, yes, a pricing there there in is QX. bit probably less for little

Scott M. Colosi

number to date, much XX% yes. David, not probably that growth, is quarter traffic to of XX%

David Tarantino

it, Thank Got that. Thanks. okay. you for

Tonya Robinson

that, little to a clarify for can't tell you, to probably Dave, XXXX further, about I would just be going for quarter. the is tell I bit sorry full you QX for just pricing X%, but

David Tarantino

at Tonya, I helping. else was the then shifted a for any there shift or dynamics anything so shift? calendar the in negative about example QX, weather just Right, we mentioned period? couple a the questions from impact the thank negative Wednesday. the other to And of Was clear, Ash date Is in underneath also on start you. that Day year are of Valentine's know there calendar impact the all you just to quarter

Tonya Robinson

kind Valentine's there. XX in out as far baked Day, of That's days As no. all having by

negative little on a kind of that back but it day, was day from there up next So benefit the picked lapping.

be some we or going one nothing could there other we are is lapping the weather, always or weather in actually from weather as or because call quarter, the so else there happening far in As would quantify out really specifically way weather that perspective. current a something

David Tarantino

last specifically. you savings that your Then are I guess you people reinvest with question, tax Okay. in Scott, planning the mentioned to

talk of you statement? about planning and you make manifest income where the to can level that on So, the XXXX in that investments itself are would

Scott M. Colosi

much not how by and we're get to David, going position. that in where specific and

that Some our even folks yet. to we of haven't own announced

would will will be of over faster I the then the So, working some compensation might result laid keeping some taking related protect we to pricing us close And benefits and and and of growing in than our of in amount that kind still And we to last out dividends our benefit would the are it less to have earnings, of in scripts on. stuff than potentially have. think we're the course time as But otherwise ultimately definitely vest. programs, probably we pricing we that otherwise. some maybe part, go

Tonya Robinson

some We our increase inflation assumptions in labor compensation. have mid-single-digit of made assumption some in

little a on line. So bit built-in that there's

Just be of there at the fair the field some a restaurant of restaurant will expecting that that at portion level. level, will the that at be

David Tarantino

much. very you Thank Great.

Operator

to Will Slabaugh, next Stephens. go We'll

Will Slabaugh

of give the you've unit just you of sales what work and so been progress it that Could profitability far? in was you those an terms and how Wanted seeing to from kind update on trends and us economics. a mentioned Bubba's, of in sort about broadly ask you'd standpoint characterize Scott of a

Scott M. Colosi

sort mixed of restaurants are Bubba's factors still got got that been others Essentially We've of exceptionally just and the that. to we've pretty out doing continues so mixed well, we has doing be aren't to some and that some well, are trying pretty bag. causal

some Some we maybe own doing. is of we've know our some our Operationally turnover had restaurants. in

it of be Some may location.

the the brand ago. start like concept early out awareness it may just concept, growing in of just and didn't years Some of was gangbusters. getting XX be like more Roadhouse we're We just Texas

everything bit average number XXXX, TVs, we you the lower development of if will, little I growing It's it's that a as focused continue and have not they that, execution on some honeymoon, of bit. are really tell piece throughout restaurants. far size the got we I little was bit box, also where the of whether momentum so day started so in of of they sales box, in others XXXX size tweak of thing. kind cost where the can our that's mean a than we've that as a or albeit kitchen, day building, opened after to a the good little sell stores So, the that. of much, why again And we much sales you bit fewer to

of feel an like smaller even scheduled how open We and is but do turns see there. year this much, XXXX of smaller, making we progress that bit prototype, year. the little one little a end the We'll little bit to So, have a out. not we're near

continually momentum future and on continue can we we get better build accelerate our year. the are to positive see to pushing if and hopefully on all and growth more So, aspects better in beyond this Bubba's

Will Slabaugh

Got it.

we of is maybe a should lot want lot we be some year you accelerate this if pace? reflect to XXXX in measured year go thinking should a to back where be at the Bubba's able a sort on a year learn more as more or making learn as into of of we and look we and So, next we terms changes a more more are and becomes about where

Scott M. Colosi

of think year right The I by answer we're taking now mean, kind to that, I year. it

building And year, learning people year more of little so, year-by-year. and we’re the is a bit experience by our each

how that maybe hump menu So, longer figure could we the the things to certain pricing be asset us do want to year many the the on the design the itself, it's think whether this we takes Again, over out year bit in we're it structure, concept. tweaks or sort things stuff little a the and for had And for up changes and Roadhouse concept. number all of the sorts hours Tonya of days menu early debate of the mean concept. new have those to all Kent operation, in and debate. a first a of continuously up operations since of I are Texas hours created itself,

little they are so the to very And take Bubba's than Bubba's bit us in a keep sort enough still people how the is We're even hard. evolution we'd and I bunch what much just going. and think following that of we a so, is it of same a operationally, and confidence they telling us have certainly us may impatient our longer little pushing But while value at push about guest to experience are like.

Will Slabaugh

Great. Thanks Scott.

Operator

Bank. Deutsche Brett next to go Levy, We'll

Brett Levy

I If really research ask is question, could margins. two-part-ish and on a one

we restaurant-level value be proposition margins, you a doing conservative right think now what the see your labor, thinking all margins research actually and but increases been to on seeing any with always you drive on you taking in margins? you that possible also, of on out of have it's are have? have? how it you pricing, as much that elasticity to you might expansion how relates by leaving more of overall are And you minimal table takes Do you than be dollars should taking are how these price restaurant-level guys even You price to Thanks. are responsible there restaurant-level about drive since to

Kent Taylor

I'll I in let This from our sales, got it same-store figured take of Scott there. we've is it us increase quarters think With XX Kent. out. behind

Scott M. Colosi

– in same mean traffic says and think X% that more I I a mean that's even I on now it, that years for that's Brett, been the many really we philosophy last than year X.X% so recently little pricing. grew most

never protecting the [indiscernible] a I with leave rather elasticity because always best So, in of say it. debate, do really Certainly can like know and money on some the our it accounts guests. is we our table for very like well marathon, We way a we're some there resonated long We'd this thing We in terms the on that's not treat money talk leave term. internally. table. is feel you the we're price sprint,

are line. day for battle and to on margin and time is, are things all long a a sometimes lot current And see we've in we otherwise get grow so, bit in we got that you out we never And offense we means means keep the ourselves to what know price sales thing eventually that figure traffic in go do take efficiently, for that. make lot our want we staffing of we or how we've have that's going more things And if do been bread-and-butter tougher, continue it's we're never to often a be past that. announced back kind you, aggressive are most long, and important We the little we points sensitive with very that and of TV to know If offense, cyclical pricing and competitors margins our margin, for we like tell arrived. the we a the much granted now. in that. which pricing to just But going to that's may next little but the basically right the that give have on term and aggressive we'll and again, it and a short of some it do of doing to to some we these be we bit crazy, is very of stick

comes cautious value to we on to to part we're and got always so, going to it the aggressive do that. be when have protecting says plate And and that of mentality continue

Operator

next go John Stanley. to Glass, We'll Morgan

John Glass

there totality about may pass a and the do want just there versus first however talk tax go through money the the at the do or question, to you about preserve is year it? you to business line in I Just on XX% how follow-up end where that reserved basis, XX%, way, [indiscernible] choose of on from gets the don't the think back a a way of but is to intend to know you to comes a much bottom

Scott M. Colosi

This is Scott.

figured we is, percentage decisions it about out. going announce have is know it. make, I Other very don't What internally we're we're are we we about some to by think investigating. a And still talking going mean thing one talking those soon. I we some are of still to things

little companies the a even looking we as are of that some for at things that internally or which be other Because people, some might do about well. be us up taken a So, and those to doing, able certain far given be numbers bit, ideas protecting But we're we as with what pricing. around final things could little to moving of has waited from we've a kind that to bit. are heard so think as our percentage, of things construed lot they

by So, bottom that, because fall cost. you going it's I to percentage be percentage, up pricing to could to line the you is give not that some assume and some or labor taken can't going

John Glass

strategy reemphasized a have just reemphasize are cost the you. for you're or maybe on what is or and Thanks focusing to-go, year, Okay, in to on packaging there? just or signal packaging to-go is then not either more that that. percentage remind that on plan that us was you or the the a this the to-go And themselves quarter thank packaging just more changing comment comments, of you the

Kent Taylor

see the trying putting the guest. We're the more and at is to hotter. it together when looking do experience to-go bit that the that But friendly make it be get is food for want This our environmentally a making or delivery that chasing are are it best not food also to and you be. little We're to a containers Kent. we easier keep can when come We anything. just people in sure

John Glass

sales that of to willing to-go? now the percentage are disclose you Are

Scott M. Colosi

This is Scott.

business advertise we the with roughly it's last as might X%, gone in percent like or X% over a just and to So, anything from we don't pushing the doubled. has mean, have and it rather we'd long I the like of I and to-go it, of don't it sales that years, be five just of our much that, And average it's X%. think a the to come part people walls, inside dine-in we eat. four that, waits function being have

those make of X% us want which do However, Kent want enhance are for that mentioned partner. definitely a more us conscious, and take-out, make the the food just to corporate things for all to things great presentation that that do, environmentally we

so really restaurants a average some got we've than they doing higher to job. we are make well, obviously X%, our good As that sure are want X%, is and

the of places high don't with just ignore it's for the quality that it don't inside the reason, our the to so we're experience and people demand in definitely that four in whatever game kind Some sand stepping we on and dine up the because get in for have we'd food-to-go us. come have head want folks walls, our rather just and we

nationally we to have go. We to have out our online order rolled platform significantly,

us, was so and and getting don't the phone have to through to you online order tougher. So, call can go, on you go

So, in were when it it rolling an sales, uptick out. that by to-go think itself will to has, and lead we we

So you've that. got

to You've to also our on app. ability mobile go got the order

So, we've added more platforms people. for

that will continue So, our is presumption to grow. business

John Glass

you. Thank it. Got

Operator

Farmer, to Jeff Fargo. go Wells next We'll

Jeff Farmer

to on modest wage pricing. similar Just are XXXX compared sounds XXXX, following that rate like a a bit more guiding like sounds up earlier inflation saw of in it you question, to an menu you little level in

fair than could in XXX to labor points a year another percent of labor where that as it basis see is greater revenue the Scott, So, assume together, putting all pieces is XXXX? you up

Scott M. Colosi

labor these year seeing A how up And rates just accurate with meaning I and upon are, pricing, the depend depending we continue. we grow, it you possible. if yes. trends XXX they continue, could that possible, mean in the inflation how it's of digit in will pressure absolutely change on point will roughly It's it's are much labor, we we see are wage lot forecasting basis X% with easily mid-single end traffic labor. if in

Jeff Farmer

Okay. might whether this, weeks of peer same-store line, more hold top sales the the Looks unrelated onto through saw the any roughly group have not XXXX, one you XXX just on on you or were points X.X% that commentary XXXX. seven able in And missed number of basis the like first to outperformance versus that?

you on So, to said differently, are holding your market share [indiscernible]?

Scott M. Colosi

I to don't that know question. answer the

Tonya Robinson

mean, if we seen or think we number January XX I don't this out, I even – to I don't to numbers. so is lot. talking for going about, I you really that change hard to I number anything is done would I know final differently haven't anything tell tell just a hard say. any me days are mean, haven't or changed for whole that say. can whole that It's

Jeff Farmer

All you. right, thank

Operator

Jeffrey to Barclays. go We'll Bernstein,

Jeffrey Bernstein

mid-single-digit in just one quarter the following just on that questions reform and your benefit. clarify, I last you to said last you I inflation well, had was prior question, labor that quarter, tax said know I to of as XXXX, up know couple A knowledge of believe

inflation. already that mid-single-digit reinvestment? tax I did tax some from of include that to more So, kind of traditional out in the parse of much that you – at want of see some mid-single-digit reform is benefit versus kind and does how the that factoring of just put

Scott M. Colosi

mid-single-digit All right forecast you inflation. we tell labor now can is that our Scott. is This includes

is out what that's piece of for you are guys, our gals, it. to but a guys in today. current parse going we not pieces is forecast lot which It's got and what So,

we So, are everything calling inflation.

part at to like folks calling aggressively operational our Some it are we of all we're are just and it when it inflation. That's greater a level. asking staff changes of

Jeffrey Bernstein

I wind-up want estimates terms got the XXXX, earnings of a I next be year, question too from in for for people I wide-ranging guess, but returned. to that at people, don't you. you reinvested just few of don't this it much a Is have in much is point of versus fair how of to it better say? is it how terms guess sounds like guess

Tonya Robinson

still that that I can with felt some that. comfortable encompass guidance the go think – have we ideas on we would we that and mid-single-digit very

that's think read So, I what that. you from can

Scott M. Colosi

in growth, we we a always points wide-ranging estimates. deal there of I by of X earnings that world or point own equals the When X XX% traffic is you've got think of significant of X operating itself, earnings restaurants, because leverage.

to a have wide always are we outcomes. range of going So,

I second of year. of food locked very our got little the think in we've the half

So, another that's we've can much food we so it year. cost different half second be – haven't the locked because forecasted of from the what for in simply of

So operator outcomes. a again, operate going to we're going how a by bigger is lot stores many of range the there of nature a an versus of be being earnings franchisor, always to in

Jeffrey Bernstein

Bubba's like with Bubba's was Understood. construction I you just in XXXX? had XX would brand. second uptick point openings sure come [indiscernible] conviction talk Bubba's this maybe I wasn't the and mean more in all expect doesn't you on And brand under maybe side, as stores say sounded it the if I of the couple would is that my on at follow-up the was pull the an second unit you and hump mentioned, the or back Bubba's, know over a of you Bubba's ago quarters are

Kent Taylor

I will are let answer stores we building Scott year. that, but seven this

So, [indiscernible] Scott seven stores, will but answer let it. I

Scott M. Colosi

it be to seen, think I Jeff. remains

it lot of it. on like tell based think second to us get feedback on feedback, they'd We be certainly they great a the our I guest brand.

investment box, any concept, sales the much for can it put to us really has sales sometimes right relationship, a the how to like that of we relationship balance and into takes reality just rightsizing that it. with the it's figure margins and while to So, out that

At a scratch. that. the we're on working still And whole so, new from time, building brand same we're

the every to to sales XX, an a still concept, restaurants over and or execution and opened with Roadhouse many the are sales, day very business for have great growing XX of, honeymoon there's element Bubba's grown but after still of by competitive like straight not just our sales XX good So, Roadhouse, just years. time we in day started

same little would the just like with more Bubba's taking it comfortable longer before Bubba's, of than are we're approach So, and than a kind we may bit we building take fewer. more again,

seven the should opened seven So, got year. year, last year just have four did we really this Part pushed. last this of They year. just

may So, many, Time few, in I to least that and the much tell got, we've air a do probably XXXX momentum it's how at few certainly we'll more. do how then depending you a we upon for tell. will can up opt

Jeffrey Bernstein

Understood. you. Thank

Operator

go BMO Andrew We'll Strelzik, to Markets. Capital

Andrew Strelzik

prices months, the prices. couple on of If basis. beef against they've question First year-over-year beef last a we at basis look on on been over you spot at is moving least a

So, first, is on do of second, there you beef you what the I is within think you basket, this basket? the that a something think market else is what the flattish the maintaining there to And move, Do type temporary hold going going that in that confidence you seeing? gives are there level? on guess commodity

Tonya Robinson

that Tonya. when that mentioned back of kind really in would a at is XXXX, we're you, year and were of bit whole is had look deflation half amount This and more in first back would on of in Scott we were, the the really of the a We're X.X% by played beef, a you good probably driven It's Obviously, we under-market half out. half over-market XX% how minute XXXX. beef. on tell half XXXX you of basket. kind a say XXXX we I and of I as how of lot at the of the And look the the year. the locked year, when first ago, locked than

So, obviously about feel some potentially. good there We being relatively volatility there flat. is

out. would call about beef we out point to great necessarily have that I good to Scott that feel to nothing you changing call deal. a may in would but that. I that we more the is would that, guidance, markets I add current Our think out that Nothing

Scott M. Colosi

I would one transportation just cost. say just thing,

bonuses got ever So, there's A related. it's who having to it's say distributor companies trucking to Whether people. been B, All hire discussion has any tough are lot really point paid pay to the trucking around transport food your these than staff a of pay had to drivers. anything more from point they something to been supplier historically, or

for translate so their transported. And structure anything to is so, that a cost well, up some of bit has spot can as going about and be into that high just prices

Andrew Strelzik

flowing helpful, And and money from that's perspective, consumer the to you've be cuts very kind then of going consumers' you. into just That's more a pockets. tax thank got

that of kind gap look at narrowing to from home got You've like home/food away food a some at. people

where So, I you is you you demand of a Roadhouse can for think Company? benefit precedents like not as have going historical XXXX, guess kind the do about seen Texas point side sets that and there benefit better concept I'm the just wondering, any or to either that you up forward think

Scott M. Colosi

don't historical life. till know think of working can't I any precedent I certainly in my [indiscernible] I today. of any, where mean,

very comments, mentioned good we momentum, we business, very a of of our quality strength our in the our restaurants lot the Kent the running about his got day. people, the So, I people as positioning our that feel We've that. business, think of about we have of feel good of every the strength

[Indiscernible] a of a have tailwind I week. employment, So encouraging. getting pocket bucks That few sure. helps. mean got their lot are we more for extra a every in folks very of it's

So, that's I good. think

of year are So got you've week so good we at but hopeful. of February, early, we're our the the feel before third you go books, we prospects. close Obviously, left most pretty to sitting here

Andrew Strelzik

the just the just the one, another squeeze one one guidance CapEx on Great. in could I here, delta quick reduction? quarter, what was last from If behind

Tonya Robinson

CapEx, of the restaurants' Some about openings, that's more what on of level more is about. seeing Andrew. that really about of the of just same We're spending maintenance so just timing. timing existing really just It's the

Operator

go to Credit now West, will Jason Suisse. We

Jason West

in guess tax on considering are stuff you a around that anything side with the start, future, the bump-outs or of there, the might you it's one just savings, up capital following quick that I do the any plans? remodels or to in whether

Scott M. Colosi

No…

Kent Taylor

Kent. is more Hopefully do we'll some This acquisitions. franchise

Scott M. Colosi

future, permanent it projects administration if is use be And could tax of when what would in year XX a should the we cut looking not are would that kind change happen in philosophy so one, a plus, of franchise at be lot there we and acquisitions. or or have we is Yes, how tax debate is. certainly knowing this what rate over whatever

to that our as we to it's whether models looking acquisitions when use but again, Kent flows, at XX%, mentioned, or definitely XX% we our the these changed it's down and financial in rates we new XX-plus we way cash whether helps. gone So are years haven't talking franchise definitely all we restaurants because tax are it

Jason West

be got year-over-year, anything the of on there we does calendar it's is And fall in there should that equivalent then I it. year, quarter? of Okay, first just X on Easter think the this aware coming kind April up,

Tonya Robinson

call no that push. is much No, there or should different or nothing days there be There's timing will Jason, anything. out. a on It change pretty we

Operator

Alex go Mergard, next to We'll JPMorgan.

Alex Mergard

and in or I to the turnover have if you seen ask underway changes the for of just units some implemented it have any that either you wanted are that comps labor about initiatives in? meaningful

Scott M. Colosi

This is Scott.

the So, biggest initiative one just of is staffing levels. simply

position, folks they employees, more restaurant, given want a flexibility most folks servers. lot servers servers got over And that our strength, A on challenged go. a just our have got and do these lot position time of of schedule. Roadies to to that, to you ready and their to with add have we of off, hired in XXX per particularly to which populated of you've want we So, continue is have really

So, that we've more about. training cost a been that. to yet. that is it add haven't talking really you there long made strides many and people, had lot for place a We in When

early system sales too growth. XXX. that strides, of many change to a having how it's of that's yet, that made that have tell the been in of restaurants much an Some on so Hasn't big impact really

our for year, still it's high. changed, is above In really which turnover us, and the hourly hasn't turnover. past XXX%, too Our

that. discussions We and employees be of So in turnover, about will still a schedule of flexibility the think help this to ultimately more we're staffing their part having yet giving lot but it's proven.

Alex Mergard

that. whether XXXX you. making quick perhaps peak allocation, kitchen you completely with us thank at beyond with redesign understood. any Thank stores follow-up, And bump-outs about the of accelerating respect have of capacity help are to the I do then back it's in or or that one capital issues even having? intention or number of the your house Okay, remodel you for to

Scott M. Colosi

can plan bump-outs. of don't to tell a we have rate the you I increase

lot having a However, discussions about of kitchen bump-outs. we are

some of sales, are And size hitting a starting so is X are existing tremendous for we've hit which million, of got that amount million restaurants lot our in a to X kitchen.

So they are making it work.

capacity any We proven at to haven't yet restaurant. what is ourselves

However, the storage just kitchen. food to is area, we there close that an also bump know both cooking area, but grilling out to how opportunity is area,

through that is have certain a front. get the in there of number out kitchen plates a certain to get window So to the to

even do how definitive might make the this we things little Those that any we have out to talk So this bump-out have to of sizable we kitchen back to about. But of plan at number of don't part the bigger. at that are point figure the any point. house kitchen or

Operator

We'll Securities. go to Nick Wedbush Setyan,

Nick Setyan

belabour expense I the you hate know guys I to plus said and inflation, to labor quarter all-in mid-single-digit growth staffing X% the labor inflation question, had but increased last labor hours. X% labor labor with

mid-single-digit thought still change of digits you quarter are to another mid in there inflation how plus from to single wage terms when quarter this time about that about all-in, talking initiatives? is X% staffing is of or X% this you So, last XXXX

Tonya Robinson

has may bit labor but that I whatever initiatives, it the in really baked little is traffic for just it in have would some be. a tell anything you doesn't for mid-single-digit baked growth

plus of talking more, labor hours, growth, traffic When we we week of the just inflation, talk talking piece per of basis, out baking in a that's we are all-in things when store like kind growth we're are on kind number, traffic So, that. inflation it. that

benefit, traffic in may of that So, too. I what's have think had kind there of going number on some that traffic X% with growth

of seen big Scott somewhat right what initiatives as and change, we is of on think things a how and there the just range a parts and to So, similar changes, just moving now of market we've it's type pressure could a lot pieces do mentioned, say lot XXXX, what I any that in, in mid-single-digit there. I just again different would lot things, a roll compensation things,

pretty So, range. people I'll just big that is remind a that

Nick Setyan

year-over-year but OpEx, ultimately little we And comp it. then expense other bit OpEx. just got on some it's line? mean can't lever that inflationary factors are the case, with delevered other a that the growth, Okay, the the still was of what on it I X.X% still

Kent Taylor

don't This is Kent. know what does. [indiscernible] I

can don't I if know answer we that. So,

Tonya Robinson

heard all really hard hear we it's sure to Nick, think, your you, questions. I not so I'm

Nick Setyan

of a little driving more some kind there the on that there. comp to give deleverage what parts line take kind us the are other could you On moving comps of of there? with guess of line, inflation maybe bit expense operating still I would X.X% saw some see growth, that it some on and what we that leverage if color item

Tonya Robinson

We So were kind in a out things claims. there couple through disaster called of of running QX.

beginning was a there on some line of at So, that on on you had hurricane $XXX,XXX QX Also some hurricanes, that going over stuff different like relief with had the we little the that there of things line donation with that about, in the impact you. quarter.

that So, out in forward. that may bit see those up going call QX of would that are a I little drove I things a you guess couple one-time not

million through line, supplies million $X.X you those in run will be line that However, will $X that through to coming see XXXX. that

little it on comps depends traffic. will just that A tougher line. lot a make for again that So, and leverage on

Nick Setyan

not standards? And in but just to pay changes of know with obviously lastly, the I franchise the to to that accounting attention some big, piece anything is respect the

Tonya Robinson

is referring With the revenue recognition guidance, what to? you are that

Nick Setyan

Yes.

Tonya Robinson

small do Not a don't very impactful and for there restaurants. timing do Development for change lot way have not pretty much of base of a recognize so us. you We too us, not those, us of franchise that, changes. have you we for fees, recognition the the

franchise bit We'll going are the to It's some them are to confusing of Not we QX. as some little pieces but around You be talking to the stuff P&L. going about bottom a to see the around effect line changes. at in some movement moving be don't line beginning change, and there. the impact based again, much not of we are on year. guidance the expecting of the think an no development this guidance, we bottom the But implementing

Scott M. Colosi

Very small.

Nick Setyan

very you Thank much. Perfect.

Operator

Group. Anderson, go We'll Stephen to Maxim

Stephen Anderson

be your in pay the increase QX you the people. you bonuses investment you level one-time compensation? a QX on about Do in their expect this expect side, increasing to or question any just approach labor talk to to Another or

Scott M. Colosi

This is investment. will ongoing Scott. Whatever an we do be

a It be won't it some increase will in or of permanent be compensation rate So one-time a benefit. bonus.

Operator

We'll next Holthouse, Karen go to Sachs. Goldman

Jared

is for on This Karen. Jared

the price that's kind sort year. smaller just trending the two some positioned of and as to ask of additional wanted launched kind think that point seeing value I peers. portion guys You with are over half time sort at in how was of discounting first of the of you mix meals last you how

Tonya Robinson

implement those and salmon May. strip did five-ounce steak. We added in We eight-ounce

well. those see of did mix are they point. perspective, popular, positive they a sales lower on because of price a do we From little bit the So,

it your menu, as in I to May. that far on XXXX. as more think to that value on what lap point implemented what value, I did we the it's a adding mean and do want, wanted in That's we we'll doing when little we

Jared

more doing smaller Okay, of thanks. you anticipate those then And do guys portions?

Tonya Robinson

that be so the be in changes then, menu nothing at we'll could with March, group, some is We don't food know. the anything don't the there that are works implementing there we March. have no of in – implement end pricing When stuff expected

Operator

to Saleh, BTIG. Peter go We'll

Peter Saleh

Has wanted flows, think unit be your that the recently, all, range. ask tax that policy? or in down, domestically the Texas the potential cash unit given long-term changes XXX you helpful. for around to somewhere around about range your historically I at unit up changed had volumes XXX thrown Roadhouse, out the would Just in thinking Anything to

Kent Taylor

This I the actually of more would is it range. Kent. put XXX

Tonya Robinson

range we the in XXX XXX the said to past, I that's think kind what have of domestically.

Peter Saleh

you right, thank All very much.

Operator

Chris to O'Cull, go Stifel. We'll

Chris O'Cull

be to have portion in changes bonuses was there Are risk this paid any that of the some is using this guys past of to performance. to the historically I you to partners guys talking considering you structure, about savings any employees, guys in given tied make comp changes incentive? to the a which large give with you going to you Scott, change are back guess management tax

Kent Taylor

piece change. partners how management compensate we our of bonus not will Our

Chris O'Cull

target in Tonya, you assume in above the the bonus then, paid but year-over-year And fourth quarter, great. the XXXX. correct? I less level Okay, Company mentioned that Is

Tonya Robinson

in not pay above they – much XXXX as numbers the yes, did for we did in the come XXXX. target, as Yes, just did above

Chris O'Cull

paid then be guys prices you Okay, guidance XXXX, your in get going great. are flat And commodity guys flat which lastly, to to back the year? to are you of to for beef assuming the just half

Tonya Robinson

into we have mean deflation guidance assumed. I that No. some flat beef

is in built So, on probably into how half I XXXX. in possibility beef year the based some would it we there beef would back say that in say deflation year, on the it's I front is that. there deflationary of more than contracted half the just the of

Chris O'Cull

Perfect. Thanks.

Operator

back And conclude that things time, turn or does to like I'd closing over today's our additional Tonya this remarks. any question-and-answer to session. for At

Tonya Robinson

being Thank you tonight. on for all

you If have week. questions, great any us. additional please free out Have to a feel to reach

Operator

We today's And us. does for thank conference that joining Thank you all call. conclude you.

Texas Roadhouse (TXRH) 20 Feb 182017 Q4 Earnings call transcript