TXRH - Earnings call transcript Q3 2021

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Operator

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

You may begin your conference.

Tonya Robinson

the our Thank everyone. you, also in release be to at our It the By evening, ended for earnings texasroadhouse.com now you found XX, Emma, should have may and XXXX. third quarter good Investors website September on access section.

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

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

with call Officer Morgan, Chief today Texas Roadhouse. the On is of me Jerry Executive

we Following call open for will questions. the our remarks,

call would turn I to to the like Jerry. Now, over

Jerry Morgan

Thanks, good evening. Tonya, and

To-Go in our continued volumes Our sales rooms to remain continue sales It strong with is to while versus comparable elevated. third momentum the XXXX quarter growth encouraging XXXX. dining and see busy our

of the our and Legendary the benefit to and operators choosing is Service delivering the and of and service our the and Food growing of in food the commitment our this level remains Legendary Our every their are number seen Their quality teams guests each of promise restaurants. of shift. unwavering commitment on

same performance commodity to margin top industry-wide growth rising the on of time, during the the labor inflation per earnings continued Our challenge. remain restaurant unprecedented share. supply and issues lead At topline chain strong dollars and in quarter a

growing and control for that focused our we success certainly care of can what long-term priority, we business. which is we and top dollars our taking things on financial are the we executing increasing, is impacting With on right the results, margin inflation of sales remain doing our While our are guests. confident

during process I evaluating we last quarter, our call, menu on of our our normal third pricing. completed the As mentioned

With implemented increase the pressures operators, feedback approximately our help some This facing. menu of last we the price increase from week. that of are a our offset cost structural restaurants X.X% will

While are the value X.X% our pricing above we leading in comfortable are range, we position is our maintaining typical that industry.

include necessary challenges openings remains quarter buying On the the of pipeline in open restaurants the as more supplies We of despite on in seven and total Bubba’s new our development to Jaggers. to This expect and total company XXXX. restaurants. five third as is a of fourth expected in track the one quarter, front, openings opened and XX equipment XX the to company open many for

partners should open year. quarter, locations which give in franchise this a the Our us of openings Roadhouse total would four franchise to more fourth

XX restaurant As are year, Roadhouse XX Bubba’s openings. to Texas we look XX we company-owned next and to targeting ahead

we look the at seven their non-binding of we base, company adding with Additionally, beginning agreement restaurants to XXXX. of acquire restaurants franchisees as have forward our to to our more one a

to to remarks, to David Congratulations, our [ph]. G David COVID the their delay partnership, for again caused partners, of us while to Texas until Vegas restaurant team to consistently and David I congratulations Hollinger, Roadies a Partner my I from As efforts. recently, partner Roadhouse. does Carolina North Managing recently to of recognizing the it and just integrity David passion, that Greenville, not diminish being conclude XXXX prepared want Year, the fun extend and named brings our managing and managing I want managers thank our our special for all also

Now, Tonya, a financial will provide update.

Tonya Robinson

Thanks, Jerry.

third and as XX,XXX of share over restaurant of million $X.XX, the by QX driven level of of versus to average XXXX. $XX,XXX traffic in we $XXX compared revenue For approximately sales X.X% for grew million to per increase quarter sales and XXXX, $XXX of $XXX,XXX the XXXX comprised grew third earnings diluted profit. restaurant in XXXX, QX growth a Comparable reported and quarter XX.X% Average check. weekly XX.X% in approximately

comparable versus growth our and QX and traffic of average XXXX compared August entrees. XX.X%, respectively. XXXX, As sales priced XX.X% check mix growth and July, XX.X%. X.X% to XX.X% XX.X%, The higher as of grew periods, By check for XX.X% comparable restaurant guests includes grew to sales growth including positive restaurant move two-year mouth September

As restaurants averaged we the sales. of our which in benefit week to quarter, from represented continue Jerry To-Go approximately In elevated XX.X% third total sales, volumes. noted, per To-Go $XX,XXX sales

normal per weekly or Over sales seasonality. over in and week total the of restaurant total Sales sales In with October versus of as of percentage remained sales sales strong the average approximately our also course of XX.X% we quarter, at of to sales, were attribute a in gradual we period sales $XX,XXX saw store a growth To-Go increase as levels $XXX,XXX moderated which XXXX. XX.X% comparable To-Go slightly, October sales. dining

need the than Food a sales was XX to the in of assumption. for breakage total by For Restaurant our the year. XX%, as drove as respectively. quarter year, of coupled beef been XXX were commodity of the August back was up July, periods, the costs on during we outlook, quarter expected points as our beef beef which buy sales points a shortages a year beverage demand can expect third the adjusting restaurant adjustment approximately XX.X%. other for XX% of related total half card bring for significantly $X.X September the high-teens last magnified prices consumer inflation of XXX a quarter, approximately they XX.X% from margin and XX.X%, restaurants, are inflation and increase the percentage the drivers than to points pressures inflation quarter. as primary approximately third and to cost current to quarter, with at for we percentage sales primarily of continue million to benefited a processing This higher more XX%. basis higher have serve our would even XX% to guests. basis prices was third the as basis full XXXX inflation margin us and gift higher compared fourth Commodity Labor total higher number historical our so plants high to Based prior these

XX% basket elevated. half basket period, not XX.X% over provide to next to guidance. we meaningful points inflation that full little have range the will ahead for we expect basis back expect approximately we Looking seeing, of and With locked to XXX QX high-teens this XXXX, do beef above the moderate, we back prices as the compared inflation volatility to enough as year the first are -- given Labor the time commodity be currently commodity visibility of XXXX. inflation costs expect improved to time, for likely currently the to of of the total remain At percentage first level given sales locked with that half our year, XXXX in of the With the of year we prices inflation to we half a of that quarter. for lapping.

of is XXXX last the third more believe to beneficial. quarter a However, quarter, we and like relevant comparison

quarterly of XX.X% level of for This in forecasting this year. a to reserve inflation group was and was growth and hours labor quarter which reserve with basis other charge relates which general to XXX to health labor than wage workers X.X% basis wage of XXXX. adjustments for did increase XX approximately X.X%. includes XXXX, first XXXX. year period. other the store as sales, decrease XX.X%. and and we by million comp wage remaining and in The But per week points QX costs XXXX, quarter a to insurance, begin insurance, of this operating lower, liability second as not a million year this XX were prior $X.X million the adjustments the our dollars Approximately week compared basis including benefit was of our increase to quarterly in labor of even lower As a percentage points X%, driven XX.X% of significantly for the was $X.X dollars until sales per rates due points as to are inflation increase charge increase of Other store above $X.X

year costs The the period. margin, to Moving a third prior in below G&A increase conference million million includes G&A revenue, in quarter. $XX.X of of XX-basis-point for $X.X the dollars the versus restaurant expense increase quarter increased X.X%

While Award this we celebration our held quarter. NP

conference will Next the during holding return year, second we quarter. to

was which up million. was Additional include cash drivers travel and and of million, which increase G&A and $X.X meeting up equity expense, compensation, the $X.X

Lastly, claim a a we sale million $X the XXXX. lapped of legal from benefit in

XXXX. in that dividend to and to we $XX With third flow was a the deferred like million, our which approximately quarter capital million in expect in million $XX second $XXX XX%, would $XX flow, a expect of code $XX credits down was operations XX.X% FICA approximately last XXXX, saw offset tax year restarted $XX quarter, million normal driven repurchases XX%, we on and the from FICA a higher tax rate million tax million regards net than for August. will tip of million of current quarter expenditures, from with rate changes income $XX from be enacted. ended the share payments of had that Based full tax rate our cash no million is liability we our we cash, benefit end tax was an sales our under and been increase by This and the are program of effective sales. -- by trends Cash the payment of effective tax assuming of third Our the rates quarter. from federal $XX

expenditures approximately expect full will capital year XXXX $XXX million. We be

in grow Roadhouse we increase For projecting majority Texas relocation year-over-year currently next of approximately are that The is million. $XXX will to XXXX. six to the planned the restaurants due of year,

please growth Jerry, Texas year Roadhouse housekeeping to also comp family in shift to point estimate impact their questions. that entire Saturday XXXX. dedication Emma, Christmas the David and thank out Finally, commitment. this Day and will We line that a the on note, X.X% have for Friday Like, want for sales on negative a the fourth Hollinger a an I congratulate will on quarter. I be continued approximately open for this want versus

Operator

comes Jared Please Garber you. question Instructions] go ahead. Sachs. from [Operator first Goldman Thank from Our today

open. that on is sure Hi, can line make now you mute? Your Okay. just Jared, you’re not

from next Our Please comes ahead. from Peter go today BTIG. Saleh question

Your line is now open.

Peter Saleh

hear Yeah. all Can me right? you

Operator

Yes.

Tonya Robinson

Yeah, Peter.

Jerry Morgan

Peter. Yeah,

Peter Saleh

rolling point a X.X% took just for you last off guys about the Excellent. of for of right. in the I mentioned forward implied clarification, I the taking next What question. was XXX price. price fourth Thanks or couple? All believe pricing I going is your quarter -- the basis think, points increase so you one week. and

Tonya Robinson

Yeah.

implied X.X% took in took of So the for X.XX% we XXXX taking about about the That the that that off be of April from pricing we that’ll Peter, impact have be this QX quarter. X.X% then we X.X%. rolls and about would Also, October XXXX. in

going X.X% you’re at for as then off of the just most you’re April. that the XXXX forward, So really and in looking into X.XX% year rolls the

you that So, essentially X.X% the you dropped QX to and gives down just about X.X%. for then

Peter Saleh

Got it.

that comfortable back Okay. do pricing or do more? I right with given you but mean, in you’re replacing took of come And some you’ll take X.X% I any think that it’s -- know taking seeing and think more April? kind you the now, anticipate it in you’re October is April what early, you you in

Jerry Morgan

will again looking it I we and Well, think, typically February, But or then see January where it look at seeing see either twice and evaluate we to adjustment and really be we’ll need yeah, from standpoint. where again we to But, a do to at the and need year we’re be. that we look at. late what definitely

Peter Saleh

margins defend given Great. Tonya, you all on And the restaurant pricing, think guys on land thoughts in XXXX, they’re to I inflationary that just taking guys XX%. historically, pressures. any the you’ll then in know, the you tried where

to you land where Just year? curious think as next you’ll

Tonya Robinson

of a to That a XXXX. that to level in in That the talked could tougher inflation is that range bit to coming long-term little commodity tougher is little XX% XXXX. be this going be do. XX% goal we about, be could That really Yeah. XX%, with

things, going on to -- sales. the of we’re sales drop side topline to Now, drive continue

both QX years. QX of We’re we’re is protect going beneficial, to running into kind and to And capacity continue still because lapping sales. QX, more some To-Go then, fully up those restrictions of we And as that bit had a XXXX. head you we’re in

So, staffed in will of the on making continue to on back lot half that things. lot going particularly year. And we’re be that doing to a pushing and commodity depend does the appropriately sharper on depends we’re of where inflation and a growth, sure those staffing all land,

So, things it make that those all tougher full of on a year. margins for could the -- bit the

Peter Saleh

much. you very right. Thank pass I’ll along. All it

Jerry Morgan

Thank you.

Tonya Robinson

Thanks, Peter.

Operator

from today go Our comes Chris. next Please Chris Stifel. O'Cull question ahead, from

line Your is open. now

Chris O'Cull

afternoon, the pricing up Thanks. on Good I guys. a follow had question.

Tonya Robinson

Yeah.

Chris O'Cull

I structural changes, increases, X% increase? I had to up. raises prices X.X% wage follow explain hoping but then like you a cover mentioned, know typically that I And how the could company was necessary or determined you you was the like

Tonya Robinson

Sure.

behaving, their sat at feeling traffic doing, we go they’re of them So really bit talking about about we did process we on we menu how and like down look thinking things things how a pricing sales And our that we are went were we They’re to through. competitor the could inflation and always -- take bit more closely those that the We we this what’s with really as all about came to price little that it That time. continue in about through we more is in and higher, looking would how -- time. we learning so we we with just competitive operators, this didn’t the maybe be the increases how in things. same given at, price -- a wage commodity the And pricing potential inflation level a to two were to to gave XXXX, that a that with for probably come and skip of that bit pretty grow had higher -- one. than impactful us just could going comfort that environment. normally

Chris O'Cull

Roadhouse the can XX scale a that, that Okay. helpful. total open then, targets That’s XX to and company Bubba’s. year, believe units at start Bubba’s has more opening year? company you mix consistently between the units When least potentially increase been the And have do a and Jerry, to of the but stores opens shifting number the will

Jerry Morgan

of able open Yeah. We’ve successfully. been I five year in to eight really team very a our to lot a have currently. confidence

and really year been get our openings than to of the a opened the have All on able this to strong little profitability quicker side the in sales past.

can service like some building -- to a what But it with confident. we’re continue the financial work to we’d So do get We’ve that food the look we’re a have. we little very at got to costs with on we’re sooner. we and the there to model happy the position happy sales, we’re

So I think we good A on kind up to we product got far want a real that more that couple gate of further. before work things little open don’t there. we’re We a away. of

Chris O'Cull

Okay. Thanks, guys. I it. appreciate

Jerry Morgan

you. Thank

Tonya Robinson

bet. You

Operator

Wedbush comes today Nick. question Nick Securities. Setyan next ahead, Please from Our from go

Your line open. is now

Nick Setyan

Can growth. your of your impacting just topline. you Thank we you. topline to a peers slowdown expect Obviously, about any do very growth challenges hours with you’re if we to would XXXX? Yeah. Just see of Many staffing there fully then labor don’t much of in pointing like kind respect are talk in whether not, be staffed, what should percentage helpful. you feel context

Jerry Morgan

Yeah. that, about new feeling it. of the had a I getting say we’re better would pretty hiring We system. and good people much into summer

some need we get little fresh think, really spend because probably and and at get XXX%. in some some But But But and shifts where we’re confident. working more them feeling and like I’d like we on we we the and country we’d to partners original house great, really, and and help and very legs good. XXXX few times close of about more do sections We’re will need feel a really our some definitely overtime to and regional we’re front and some tell to But things based are in pockets our good I house our to confident of I have we still yesterday really We’d the folks at. that, are operations overall, folks and the sales growth, people. and overall, you our back like We but areas management. a to met extra different back just and the Doug areas. with feel numbers. again, really of feel back with in the

need there us hard our the we we help yet. still we and see have be. We of to to We’re and what want to close the as are. tell for people into some It’s out not me people you to team add come great that whether But and very number excited we settled day second I of as very national we we’re the where to range there looking, to help some that are feel or we’re hiring numbers just more had school. confident

we said, great. want feel real I real I good. like So to feel

So we still got work to do.

Tonya Robinson

hours Yeah. the a pretty more. staff. I you’re to in pick a continue be be a now short you’ll from hours -- seeing to like some bit on hours high, situations think an XXXX, the Right up as probably perspective little for little from Nick perspective and Jerry that, see hours we’re an perspective more said, little we’d and because productivity

to more right perspective. inflation and I hours -- traffic that that’s bit about that wages wage we now. XX% know percentage helping that in in end little of traffic always will up of XX%, being. We kind and shows overtime drive what So of get a labor terms talked from don’t That up maybe back the hours to an the of

a get you maybe pick little a you hours relief see up So more. the but there, little bit

Nick Setyan

much. you Thank Great. very

Tonya Robinson

welcome. You’re

Operator

from Drew. North Please Drew from go Our next question Baird. today comes ahead,

open. now line Your is

Drew North

Great. questions front. the Thanks. had development on two I

over of Republic next outlook, not there industry year, of that have confirm pressure that XX%, on the out XX up on development months you from embedded and could called much new the Bubba’s breakdown what’s it’s mentioned? the you And mentioned if embedded relocations that on you’re the Texas in upward outlook? upward that how next pipeline a wondering in is the am impact if seeing had you’re follow are believe XX% perspective, And seeing terms months? what quarter you how XX [ph] then pressure to the in I it there openings several as costs I many wanted just comment and to XX First, development an just any that six that your to last development relates cost openings. to in for the having store

Tonya Robinson

Sure. the you first Drew, in guidance take relocations I’ll to had for -- questions the are XX% couple XXXX. that XX% not those

been So throughout our changes addition. Roadhouse. take be. be at as franchise hasn’t cost issues, course a then, have in like continue up nothing we’ll would that’s building from that been being clear. deal staffing right the And to number, right sometimes things off as now, do that this anything just I of perspective. that. makes see either about I a about, now, little that see want the be that we those creep has there’s rest the think, here just could bit, things that? foot having that. to the think, think, But sometimes to the labor, openings I gas The like anecdotally you that like say, point, like many definitely are from the the a are all then, us seven and are costs we perspective, Bubba’s not I contractors us into eight unmanageable store would It can costs, say, looks in acquisitions impact development the those of And as built Obviously, where change way year looks and pipeline that

so so So, far, good.

it. we’re an that So eye that equipment go keep to we’ve ready sourced got to definitely keeping to Trying pipeline making moving. we’re sure on and this

Jerry Morgan

XX Bubba’s about agree. and XX eight Roadhouse would is I six Yeah. then obviously maybe comfortable of the it, with and I relocations. the piece the to feel really

to restaurant back saw We our about. we’ve with and in last history and a look or our and years We’re sales the the done years and spike really money. very provided more eight six ability bigger five make relocations parking a four to of lot excited more

where sometimes in feel we these are the again like at relocations to energy addition they’re moves. So

is these So real a our really some performers smart believe. of investment in relocations I business top

Drew North

I’ll it helpful. That’s Thanks. pass on.

Jerry Morgan

Thank you.

Operator

Eric KeyBanc. Our go Gonzalez Eric. question Please from next from today comes ahead,

now line open. Your is

Eric Gonzalez

of I you of a speak the have afternoon. inflation wondering maybe replacement Good comment if your about in about chain the given Thanks. And strategy, just can that year, hedging for do long-term then I’m you XX% push you you the just the a beef long compares I whether suppliers, think, long on tail that supply Hey. want now. why have on cycle? the the said, but maybe right higher? will implications but me correct this was might locked, issues as to if sense am maybe of terms and now, first And your you’re past right not wrong, wondering that how with half to

Tonya Robinson

Sure.

of the maybe would locked we lot the into a now little yeah, So, XX% say, XXXX, -- do would first than year. in of the quarter yeah, to But, normally in and a the half the And we XXXX. fourth of maybe on lower to we that’s that be, I quarter and probably, going fourth like would year. back normally is first

more getting continue we a need. I amounts of to see some locked on So those on think we’ll that little

you forgot was… that’ll were be what believe supply asking, then, And but I it good. So oh, Eric, that other I chain, the I’m question about sorry, is

Eric Gonzalez

long-term Yeah. The implications…

Tonya Robinson

going … to long-term and that’s how so -- we implications. think

I think long-term perspectives implications. of lot of have different a people

could this maybe this tell into just tell would Some would we’re going Others quarters. hearing, is you, be go XXXX. a to you hey, few

a product, I transportation then the the think, things just of them, depends some one folks, staffing how demand given on So build chain to beef. ability play supply and that just And a out. another definitely it it’s inventory for high some is I think lot of up

awesome vendors very commodities the working that chain, the supply supply we we that all with have of we us at so, closely have that great have need And levels. beef need, these we a to been supply

And So think, and have I to that’s that been the how wait kind inflation, really kind of see plays of out. great. we’ll just

Jerry Morgan

I feel… Yeah.

Eric Gonzalez

follow-up… The

Jerry Morgan

…really comp…

Eric Gonzalez

Go ahead. Sure.

Jerry Morgan

I the It’s for and job. get good buying Well, The mean, I done we our for supply -- has XX especially attention meat in development same The the just there. side, to been available. just pricing of really obviously, really is years it wanted product paying team we’re we’ve the a obviously. as close to chain

are to things We in that the on stock inventory having some we didn’t have past. to do

we’re that. So of aware

We that and are that to open big definitely restaurant building will up and inventory are items relocation. obviously, we absolutely grow, get need ticket on things a the to

So working very our us. closely with been vendor partners have

year. We items to whole are We out on need. the looking all where that we the of we each out definitely quarter want for know for

asking We’re questions. those

gotten So you tell it’s far, tight, can that. a I little

any we to need But restaurants. of from going all our able right we’re good a emergencies XXXX with things critical So to now, closely of as real being -- that. get of They’re situation, know we into these we now, aware right that good working of them that. of are an standpoint -- the aware obviously, But we would if that and open something to us. to get it vendors -- as delay and equipment have we’re about looks we’re feel really they if

Eric Gonzalez

resistance? levels different would or resistance on you -- out you’re the the for market be you you’re or if price on that expect relative see quick where would And you and if X% ever helpful. Thanks -- any of higher competitors And you real Thanks. of can was to if pricing, see the start in seeing That it tested pricing you some to to level then in that. if wondering, go category any comment, see you you maybe what where I to push doing? might if maybe

Tonya Robinson

Sure.

country testing So do because things tiers allows the pricing have that at times. all to us are the we a and different number of time, we different across really

looking that at some from year it each a when utilized doing and differently. we pricing us we things and pivot year a so the do and And allows we’re too learn that really twice ability lot

short-term, tell through. it’s see to that’s lot historically, a But see it see of flow But we’re it been tell, We working don’t in lot sometimes and of hard week we gets not So really kind the any I mean, and hard really been see it. it’s you, chose take good the out It’s a others the that it’s watching as to that. into pricing. feel play. issues we’re making a I you’re service since quality don’t X.X%. an is quality well. definitely we keeping issues certain we just of with we the talking times, when only to getting a would longer to going going sure eye we And term it. positioned. the to any impact it From menu, of with earlier, of the that. I the as in and a compared quality guests definitely about as items like the And looking very comes feel and at operators really I that their food, again, delivering, of industry, our things pricing, thoughts hearing good product, said measuring about and on what from the side, they’re much competitive think, experience how them whole we’re And we’re we’re the be

definitely think we So Eric, sure. about, for it’s something, that

Jerry Morgan

quality and stakes I in-house. our specific with. very we that Yeah. say, model and haven’t We cut we -- changed still at we brand again, are our -- all Eric, happy a use are serve would and we

with we going that up we we know all We good. and a definitely of people better Legendary time. make have we we got continue what that feel our is difficult. experience more day of that operations do that Legendary our single Service that’s and every any because If scratch of and okay earn guests. to our it own and level experience If we charge But on food very know we’re our little to and which absolutely it the other off changed haven’t the tastes bit some we will and our them, steaks very have team. every to committed Food on pressures. to charge from And of that, cut more from to be We -- are our have to we to deliver than ramp for

Eric Gonzalez

Great. Thanks. it I’ll pass on.

Operator

next go Jeff Haskett. ahead, Our from Jeff. comes from Gordon Farmer question today Please

now is line Your open.

Jeff Farmer

very you to question follow staffing wanted Thank from on I ago. up a minutes much. few just

your you at seen, getting dining shortfalls week peers there peak last their you’re of pressures that, bit from Do a it’s agree were they the to employees do August, you into August. with think that? in bring thought out casual casual say One From September or perspective, seeing dining restaurant? what easier little that did October, staffing into least

Jerry Morgan

don’t I about know easier.

I people. to we’re hustling still think find

doing a benefit. people. We’ve recruit to of couple tuition things just We’re to some offered retain and

we’re say things. having did I do -- so having to And

because for I’d work by doing people some so pace, even able feel things, we come go we choose I in right earn at. bit means. a no to to and people add that. to easy Are the say, there us them little more the to maybe would -- offering benefits to better say have and great about know our program being We’re we what better But I and pool?

there to I out but of supply think needs. to way our So us get easing all still little people that bit, go can there’s a long with a up enough

Jeff Farmer

cost own their like healthy things that consider of roughly one called just waste? basis is that. reduced now? topic, component transitory is training labor pressures labor then costs, plus out which labor think you bonuses. Again, points same And right a of I retention side productivity, Are seeing Okay. which in the and your they more what equation, similar the of XXX that peer in costs things included like the quarter on

Tonya Robinson

if could I I paying mean, the as higher that’s wages, know as, We far become in quantify even seeing those the back we’re things the Jeff, across as the country. any we’re model. them especially just competitive how labor I we’re not know in house, seeing industry, of very outside just inflation. wage don’t of higher

doing. we’re something that’s So

program development are -- always we’ve We program. training phenomenal had a and

look at that it and it this And so But during that level those taking really or on we we’ve dice another really definitely double those from -- don’t perspective. and to time. slice we down way

So there. you I that we’re know don’t comparable can I tell

Jeff Farmer

very much. Okay. Thank you

Operator

ahead. from next today James comes Rutherford question Please Our Stephens, Inc. from go

line Your now is open.

James Rutherford

I Thank guidance the the is the question, basket of embedded the costs you here? into I’m in circle is there curious, that inflation half or of the improvement attract the you will we assuming those forward for what spot to commodity buying market dollar I kind be on that for we that can current that high-teens understand just first back some assumption as in on your Great. as year. hold you. go XX% spot wanted of market? today prices Are from commodity essentially

Tonya Robinson

more, James, seeing would probably, you, tell trend Sure. the the assuming I the up. costs ease anything elevated along continue versus we’re -- lines of continues,

the October. some October, the see we going we’re historic easing the seasonality, holiday normal to though late in is, spike think saw I the And seasonality. then expectation from

kind that’s So aging we’re we’re need, too, mentioned of our Jerry as expectation. our buying, earlier. And remember

you’re So to doing days. days, up from XX XX anything

in using are in things October into New December buying Year. probably So the we’re what we’re

expect and see we to market of so stay just the cost spot now prices, right prices. is that on based lot a elevated And

James Rutherford

information I then question us to the a helpful. one off for quarter. that about set restaurant margin? that, on models just fourth kind restaurant can we the I’m and commodity really the if wage gave earlier side, And commodity margins. and more I by you level very just Peter asked calibrating there of I on a help That’s the margin our all kind of Perfect. But getting may, in Am know can much, kind bit if just range. the you XX% putting XXXX little of together

Tonya Robinson

about traffic a of you’re depends There’s in on and a using sales what no And numbers. pieces lot it. There doubt for Sure. growth. moving lot those is Yeah.

we’re as to So from expecting sales mentioned restrictions QX be earlier, I last year. we’re going capacity lapping

year. So might issues, think we’re sales from benefit cost. there of the keep wage hours help And some going then I moderated continue staffing perspective from definitely that’s That to throughout going some along leveraging see we growth, to inflation. and that X% little see with those a to a occur that

it’s that, be that, optimistic a where seems more but me, think to might tough from kind you of definitely a we’ll tell say be little a I I sales little I So to low perspective. that on would

James Rutherford

very thank Well, you appreciate it. it. Tonya and Jerry. Got much, I

Jerry Morgan

you. Thank

Operator

Vaccaro ahead, from Raymond go comes Our from question Brian Please today next James. Brian.

Your line is open.

Brian Vaccaro

are to your those comments. levels may that if as to help of it how having you and Thanks be may staffing comps on good XXXX can I evening. your impact however, frame meaningfully levels, they be are I an well still below you frame staffing wanted stores earlier locations? circle define in you may appreciate But much back and percentage And just that. could of what at below, levels

Jerry Morgan

XXXX are back it’s challenges we’ve staffing below because relocate so some to there that had number think area, Really, I they weather. because Louisiana been that like, hit mean, the are hard weather people some in had by getting I just and some areas has of small a levels.

is there a are far, would that real But we calling of stuff. sales and necessarily looking helping would I these a levels additional than is know I the to vast staffing ninja we’re to say, small that’s but to restaurants that who that we majority say, our XXXX cover But So -- get one get the We’ve pockets tougher at areas today. other are. of are go got some have and team what just completely that, they there. people

I like said, I’d good. we like So, real to feel great. feel

Brian Vaccaro

on kind you Jerry. you versus far per or helpful. in average was higher progressed quarter? XXXX October assume in be ballpark fair And That’s where exited that up think, to through the the you And store, quarter. quarter thus where may X.X% hours that store? per Okay. average it X% I of that, Thanks, Is Tonya the you hours said the or on can

Tonya Robinson

number that Brian, have of the the far throughout in as me, don’t I cadence as quarter. front

a Just that my grew head, too. quarter seasonality the you’re probably off of top But the looking. little to kind a it looking throughout of throughout trying expect at just also some bit the think quarter volumes bit had little I would that,

bit lumpiness there. been more could I like But little a have So said earlier…

Brian Vaccaro

Yeah.

Tonya Robinson

…I would expect to be…

Brian Vaccaro

Yeah.

Tonya Robinson

hours … when getting XX%, that range close -- we’re for us traffic to XX% looking in growth. more at start seeing

-- traffic traffic when of by a the growth driven right Now sales. lot -- To-Go now is

efficient just a still and little of have perspective hours maybe working. why from those a And lower. little the little a that labor bit So fewer have bit that’s we explains more We people working. people a

have we So, things working people again, that. like overtime,

focused that’s on So that a something moving little we’re overall bit more away from

Brian Vaccaro

Okay.

there, how as the Okay. rest seasonality typically you quarter. fourth seasonality move little QX through of remind That’s those helpful. said, expectations months? back December, sales. weekly you average to of on touched average Can to to work you I weekly through October interplay so kind And But as just us November, the And think between you gave typical sales. October, us we to average frame XXXX… like good what’s we move the segue

Tonya Robinson

as you’re holiday… moving into Typically, the

Jerry Morgan

different. was …

Tonya Robinson

Typically Yeah. Sure. to throughout those going increase the quarter. Yeah. you’re see volumes

-- Jerry holiday and we we’re as getting As the season mentioned, like that. things into

Now shift impact you to the do of have that you Christmas Saturday.

year over we quarter, gave be course that the Saturday the But on over closed growing you the that So will seasonality would volumes be of sorry. of we -X- impact. and typically course that

Brian Vaccaro

Okay.

just I ballpark guess appreciate early on expectations Okay. on just you thoughts again. same I’ll page so last back on there? of could on and circle we’re your XXXX. the that one But Thanks G&A, kind the offline.

Tonya Robinson

Brian. problem, No Yeah.

a from yeah, think, G&A I continue growth stay moderate. perspective, So, see to you

a below we revenue as of percentage X% is our revenue, think I stay of expectation.

that the our up, things back really costs little It’s So, wonderful travel, excited in like we’re that. and some restaurants, those to obviously, about are with see ramping and bit up, happening. our getting coaches been managers back we talked a meetings to ramping which see going

increased some in XXXX. would of there. But XXXX I X% spend think expect And we’ll so, I little it versus bit below leverage G&A keep it see still in a of will revenue and

Brian Vaccaro

you. Thank Okay.

Jerry Morgan

Thank you.

Operator

comes from Please Jeffrey. ahead, go Bernstein today question from next Jeff Barclays. Our

is line open. now Your

Jeff Priester

Jeff Jeff Bernstein. actually Priester for on is This Thanks.

this those to did wanted term what driving your approach look thoughts franchise Roadhouse a you particular approach mix forward? force more. on And into Longer Texas the and them on make little particular, in Just changed the kind how company will was acquisition any has transaction, wanting franchisee going the in of dive they transaction? to bit did behind then or from you brand a

Tonya Robinson

really franchise domestically. time. something and from we The domestically where Roadhouse two is at This COVID were just conversations franchise another. all year a don’t may franchise focus. talking kind kind add franchise to of We a everybody not I a Texas perspective. a international stands. one about know perspective prior growth is approach conversation And Roadhouse, versus of really from Sure, on I for think seeing joint a with we’re Jeff. that one having perspective there partners looking It’s from even we’re growth is a always if the a or

company. is and All continue. our growth is expect Bubba’s to international that right right of now franchise we our now

is We year. them franchise expect say. partner. getting then And a probably about some next to Jaggers open signed opportunity that there to a we continue and excited restaurant is why Really and

at the company for past We to restaurants. continue look

we’re Roadhouse, different in So Everybody very, kind add of kind more we’d just and looking to to talking continue with a it’s partners. franchise much as and little is not rollouts. would really like and of franchise conversations we’ll place to I way overall continue those say, domestic, keep we’re of to have to at very it. going And them

Jeff Priester

Appreciate it.

Tonya Robinson

Sure.

Operator

comes today Jared. question ahead, Garber Sachs. Goldman Please next from Our go from Jared

Your line is now open.

Michael Rothstein

you hear Can this me Hey. time?

Jerry Morgan

Yeah, Jared.

Tonya Robinson

Yeah. Yes. can We hear you.

Michael Rothstein

Great.

is for Michael about Sorry Jared Garber. that. Rothstein And this on also

that. about Sorry

Thanks. look kind of Roadhouse quick in XXXX, kind growth and of growth, you kind So unit seeing call the expecting accelerating XXXX, especially could So In and Does great maybe XXXX that positive Bubba’s what earlier right like and maybe on question comps outer next actually. in Texas years now on XXXX demand you unit that are the now? year. of onwards? touched drive

Tonya Robinson

talking start I’ll good really One, real of several reasons. we Jared. you. for We’ve always decisions disciplined XX to really felt And that’s that really when make those drivers, two opening people XX good range of are Sure, we -- about range -- restaurants. new in tell make kind estate choices. probably and when out we’re a good about also just that big bigger we you’re and the

changing for I So that see us. don’t

living XX mentioning, you’re Roadhouse start that some maybe per out we to of Bubba’s XX concept. option could for like in higher dealing of But out up we we’re just getting -- begins a with end Bubba’s that I the often supply chain stuff. XXXX, us the ramp mentioned, to more, as range. Jerry But kind little XXXX, are wanted Now, the of as keep there see to you years just in the of more closer as

Michael Rothstein

kind that you traffic comp, like, Great. around from that very very expect you. look So as a also you or little mix? that. And strong? as that Obviously, bit with a of any strong you’re for great. aside be would goes Thank Thanks. about from next far what positive of price, then clarity mix sort can obviously, Appreciate does perspective What year lapping talk XXXX.

Jerry Morgan

the Yeah, keep I side would is experience, on we the and the just say, delivering it food operation of the demand if and there. nail quality our on

as against promise met sure promise that make on with Food I our in think and get our in know Service, great doing the more create we to I delivering you service look comp team. telling that the is us what Open keep environment, don’t have And sales doors, see at yes, operations operations, as our XXXX. to we -- we’re of strong of if that Legendary as to staff, compete regional we Legendary I with away. the consumer but that our our going doing. our our And but said, and we’re that on a deliver model. we work we is food we a continue And

excellence, continue operate and people. is operational memorable going to develop very to for have high us our We’re to It a a have experience level. very, at important

working we as we up they people long there for put and promise that as enjoy us. the to guests So and our on right deliver

still a I the think -- aggressive on to expect us very I have to sales. continue we be will topline

Tonya Robinson

Yeah. will I you… And tell

Michael Rothstein

Thanks. Okay.

Tonya Robinson

because closer back XXXX you quite some I’ll expect the tell would XXXX to it’s to for on probably to a we mix had over We be seen that. …Jared, mix, starting into would bit flat mix -- moderate really growth hard late and phenomenal my get in expectation. follow But that XXXX.

Michael Rothstein

have one peers you then a couple I you. appreciate your from for upticked and one recently. a And quick you to do And that’s bit because that. or you. along maintenance that more think last that are repairs maybe heard been Thank front? to kind your Thank of of little get me, lines. we’ve able from use those again guys get What some starting haven’t stores equipment as

Tonya Robinson

Yeah.

definitely We’re P&L. seeing that on the

XXXX. -- delays You’re in were seeing there

things things putting on are hold We that. like and

yeah, would things But hold venture some everyone done with a And then, you see labor getting So, and as, like things is I shortages and probably, of go. little dealing getting those guests, projects. inflation, been they’ve on to again, just that.

that’s little So All the Emma, question. now think I see right. definitely bit. last

Operator

Yeah. That’s our last question today. for

Tonya Robinson

doing much. All for know thanks joining a great everyone well questions. Thanks right. us. you’re Well, Have night. and you any so Hope let us if have

Jerry Morgan

all. you, Thank

Operator

today’s Thank call. you everyone joining Enjoy evening. your for

your disconnect now may You lines.

Texas Roadhouse (TXRH) 29 Oct 212021 Q3 Earnings call transcript