Texas Roadhouse (TXRH) 6 May 222022 Q1 Earnings call transcript

Company Profile

Participants

Tonya Robinson	Chief Financial Officer
Gerald Morgan	President and Chief Executive Officer
Christopher O'Cull	Stifel, Nicolaus & Company, Inc.
Brian Harbour	Morgan Stanley
David Tarantino	Robert W. Baird & Co.
David Palmer	Evercore ISI
Dennis Geiger	UBS
Peter Saleh	BTIG, LLC
Brett Levy	MKM Partners
Jeffrey Farmer	Gordon Haskett
Andy Barish	Jefferies & Co.
James Sanderson	Northcoast Research
Jon Tower	Citigroup Inc.
Brian Vaccaro	Raymond James & Associates, Inc.
Rahul Krotthapalli	JPMorgan Chase & Co.
Lauren Silberman	Credit Suisse AG

Call transcript

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Operator

Good evening, and welcome to the Texas Roadhouse First Quarter Earnings Conference Call. Today's call is being recorded, and 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 Tonya Robinson, the Chief Financial Officer of Texas Roadhouse.

You may begin your conference.

Tonya Robinson

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

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

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

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

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

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

Gerald Morgan

$XXX,XXX see restaurant. evening. resulting average to through over were sales pleased the accelerate in volumes Tonya. Good of we Thanks, first as We quarter, sales weekly move per

especially and of tough to of date, who That Our would we are day, to our testament provide ability approached we These strong our announced inflationary with negative closely results thank I Several hiring Roadies. each in like every seen an one inflationary managing know spending end the the monitoring previously and environment. consumer value was to our patterns. confident are of and guest. done earnings our the have teams, our our said, the at are positioning mix is amazing through and purchasing of procurement to we to operators or implemented and weeks market But job, the the first X.X% per staffing driver so a topline share unmatched not menu that a reaction. for growth our a primary XX% quarter. increase. pressures, the feeling hard we traffic have ago, we work And

development an franchise quarter, opened two. Roadhouses, we the opened international partners and Texas front, the our additional On three during first company-owned

the XX restaurant. franchise time, Bubba's company-owned restaurants in open of this company-owned and in later to openings completed and the seven Roadhouse of at expect South our quarter. continue year, XX additional this acquisition Texas the Jaggers also Texas Carolina We Roadhouse two XXXX franchise locations. to and seven first approximately expect Georgia At we we Jaggers franchise and an first And beginning

In XXXX, of we a higher we permitting the terms we so are level lower can that delays, and will of return optimistic believe building openings. approval to impact of we

the which strong performance, leads will have new are Our continued in This our And coming markets the in returns a for Texas for growth team we smaller Also, including seeing sales on runway sales those years. we are to that investments. we the still by long have us are excited healthy gives new locations. a up ramp restaurants, confidence as seeing Bubba's. at place we Roadhouse we that development

efficiencies Beyond investing P&L. is will experience part strategy that capital enhance investing new the technology driving the while our in another of in allocation greater guest and restaurants, up down

and being years working accepted upgrades the also the that Some are program. We include includes Kitchen last the which current Jaggers loyalty on Roadhouse are we have a we initiatives app, our Pay, of guest. widely System several by mobile technology made new our that Display over believe

of Our Roadhouse XXXX. has times mobile million since X.X beginning app than more been downloaded the

and our current the our is waitlist business result, many To-Go of digital, a function. using As more guests of XX% approximately are

compliment since a XX% million we excess have XXXX over return value, average think which share a went about of shareholders we growth by dividend, to year, increased and This our investments. our cash we store goal totaled is that consistently public. as to $XXX have per to since an creating reliable as Finally, includes our quarterly repurchases

to seeing of every being Fayetteville, what to the finalist, our a Noble at to they magic. together I and XXXX where Texas his MP with Before our executing the passion committed Roadhouse. it Carolina is want finally and winning is keeping can't XXXX was they accomplish and to Year I our as year Partner keeping congratulate Tonya, team over partners. each legendary named recent the back am food theme and who operators pass the Chad focus rest great service for ways. on their Chad being of be shift. of Xx wait managing conference, legendary our Managing North of was our face-to-face with of all for I inspired It I see always to the

Now, Tonya will provide financial a update.

Tonya Robinson

Thanks, Jerry.

$X.XX, of increase by unit strong first driven income XX.X% week growth profit growth of the by in with store we of For level diluted a X.X% restaurant and rate. up earnings along the volume. reported lower and quarter driven revenue was tax per dollar growth XX.X% average share Revenue XXXX, XX.X%

quarter, mix year-over-year as guests entrees. choosing the order check percentage and the all sales growth comparable restaurant average increased X% to well of XX%, includes For higher-priced traffic dine-in growth by of of X% Check guests positive continuing X%. including growth improvement and as driven

first week total quarter, restaurants the of represented For in which sales. approximately XX.X% averaged To-Go our per sales, XX,XXX

sales To-Go move To-Go strong. the As throughout expected, overall declined we percentage but our quarter, volumes remain as

pleased the XX.X%, February January, grew room offset to that sales By X.X% growth. during are see in comparable month, and respectively. more for than periods, March dining our XX.X% year-over-year decline was and To-Go traffic guest We the by quarter

as last to March. the sales average from lap the As in sales from to by compared for in as reopening dining we same the XXX,XXX XXXX. XXX,XXX were the perspective, off grew in an over up weeks dropped to first of comp comparable period approximately X.X% percentage January And quarter February second March month five expected, From rooms weekly sales the of year.

weeks, sales. During weekly were these per XX.X% To-Go with sales sales nearly XX,XXX XXX,XXX approximately average of store, or five total

XX.X% as as compared margin total of down first percentage sales of points was For quarter, quarter XXXX. a basis the restaurant to the XXX first

We commodity cost commodity this dollars and inflation. $XX,XXX, current which With XX%. for first baskets visibility, to quarter. Food was also have commodity basis store guidance XX% a focus sales of to of the compared our than XXX as beverage higher over per driven At quarter for back QX for the XX% were X.X% XXXX. full-year over week, XXXX are up maintaining approximately secured percentage the on restaurant margin XX% XX.X% as year. of by time, and was XX% total This we second the half of our we lost inflation our points

to moderate the for inflation commodity the three both other total continue use of group sequentially. offset underlying increased adjustment by X.X%. This of move expect quarters We reserves costs insurance. as points store hours XXXX year-over-year of labor as be XX%. even percentage a gradually high wage to our while remaining and for dollars partially as if was Labor XX.X% of week dollars the per dollar will year. increases These store labor net and inflation to labor basis previously, a favorable through driven QX in inflation year-over-year mentioned that we per increase were beef XX we moderates, higher quarterly other But will sales items as growth week by still and likely increased XX.X% and $X.X to in compared million

XXXX. are from to until because full-year which compared significantly QX expected, we averaging of above increase sales in basis year-over-year other lapping leverage lower did inflation they due costs of second to as higher the was of current operating for wage XXXX. approximately forecast Other not As comes volumes. XX.X% of and X% of QX to wage rates were Most quarter came benefit the sales, points XX lower begin

week year-over-year of higher expense grew the revenue. events Moving X.X% and G&A regards below third $X event was and as expense, to quarter want and abbreviated in growth we expense the travel meeting $X.X million. million limited by that and Last our $X driven I was Partner G&A, approximately Managing With just for as a approximately came at of onset Conference it held mention until attendance The to increased in restaurant delayed year's and at QX we the of held COVID. by cost compensation since COVID. last first year-over-year time in to X.X% margin, in million Annual was cost several due G&A

FICA Our effective XX.X%, the for normal higher credits. to was from tip benefit a rate tax than thanks quarter

is full-year the we the ended million We $XX quarter XXXX cash, dividend $XX million end from cash to with million of share million expect XX%. flow, operations down a flow million of repurchases. was continue rate the offset $XX fourth regards was of capital $XX quarter. With approximately $XXX to more first payments and than from which by $XXX a of expenditures, and million Cash of of

We also restaurants acquired for franchise $XX million. seven

We special I together, us the QX successes. This Like Through $XX.X to program. Chad to just congratulations always we continue with our our quarter, I to named It Board $XXX at first conference. weeks capital Noble full-year have also being March, Year. of truly over stock with approximately million. our shares give XXX,XXX Jerry, approximately our be to the passion our five by inspired new be partners Partner expenditures for our million. the $XXX leads refreshed our expect In our buyback a program of will under along $XXX is repurchase want of our million remaining second was stock million. to And for XXXX great Managing of authorized repurchased celebrating

turn will Jerry the to I final call Now, comments. over back for

Gerald Morgan

well helped are certainly we the or Thanks, position the Well, has guests tell for with in our issues quality around us. Roadhouse challenge as the that have at And I as seem to adjust at and unique hungry proposition challenges the obstacle any value our we ahead. our inflation here any of home, Texas agility you organization, chain been ability are and That can and as overcome market to offer we guests. said, confidence has This Tonya. supply an our aware and thrown we challenge confident the concepts. that world

lies lot our energized, but have in business momentum and the of We a ahead. right team entire what now, is

serve As stakes. success to people-first know, simple. our just our of foundation happens that many the pretty commitment being to you a It's company is of

Champion, everything congratulations National Cutting winners congratulations Speaking of all our for Meat award to South Henry, job of Texas. stakes, Austin, you conference. Verdugo] of at do. Great Thank our to you and all [Henry XXXX

our open Savannah, want the managing of I line support universe. for our center partners they operators thank and the to Finally, support to scenes do please our questions. all behind the Roadies keep for center the

Operator

from question Stifel. go O'Cull come Chris [Operator first will of Please Instructions] Our ahead.

Christopher O'Cull

Thanks for guys. question, my taking

you will is any have a impressive the driven too? So solidly you to attribute may if that in the sales? guess, taken the on key here understand I trying have the guys congrats just sales acceleration quarter. strength question I'm actions

Tonya Robinson

just if of maybe that. we action don't kind one can know I that pinpoint leading is to

little focus I with couple Omicron benefited Super it's We on the had on we had operators particularly in a speed that. in last getting dining some and – think, just that think operators things calendar late technology, And Valentine's just years into place the put Day focus the the all have But that on us focus the early things. last rooms that things in Bowl. we the February quarter I year back the in in and January. bit, up to to attributes or the some impact in and shifts

I sure. think us experience that's – with helping the resonates and for guests them definitely the

Gerald Morgan

we're rewarding agree. we're of out would I staffing, legendary ability And we're our it guests hats I are our to to our execution. finding ways when a on the there down to comes them promise our and and getting I delivering even their think to job experience they by challenged think Yes. done. win really are off for product absolutely to the just guests. operators, execute And

Christopher O'Cull

Yes. That's great.

that the that And so, company XX question. show a longer-term year? Are starting if in has than Bubba's potential. past, the services to what but or year, added be to XX support kind make to targeted units a now need open you Just investments units XX more to a growth is always to Jerry, happen? of preparing the company

Gerald Morgan

we Well, positioned commitment we're in last standpoint. committed Bubba's months are And Bubba's leadership are contribute company, nine that a And standpoint, from growth. to the And do will support team really we we're more ready, on I like we believe there these standpoint you been how we tell of I ready. from a from a said, definitely we've get a growth. to definitely place, focused got have I

we doubt so pull to expect really it out put I there weight. its feeling are but we And no too comfortable. to much yet, don't there's want

Tonya Robinson

on little We the kind we're how just some tell April some Yes. look in to have opened the work Chris, you, one changes. and to of has see bring doing Jerry to And of one And and the doing want We can. the we a running down team and I'll bit. wait get other cost in some building those as along that up building. things I place that ideas of that's put has things we think that with soon we're just as really

XX right you always feel to you we've comfortable little know the was know, So fast to We restaurants. we anything We're to being sure to want don't above and want just know of all open of Bubba's, XX, good kind we we're said number. We've really those making that XX too – excited things. people do doing said a but reasons. that they're estate grow. real in it to for But the past, team I the on choices make

Christopher O'Cull

guys. Thanks Great.

Gerald Morgan

Thank you.

Operator

Our next question from will go with Glass come Morgan ahead. Stanley. John Please

Brian Harbour

This is on actually guys. Hey, for Brian John. Yes.

you kind how question, we on of the now staffing comment to closer you been adequately levels. has like? last what think you're staff just since if evolved spoke, or environment First hiring maybe on Could that's

Tonya Robinson

we tell quarter. the improvement It seemed staffing quarter you, – across the saw throughout I'll Well, levels. in

and You grow. that counts staffing by saw guest less to dining impacted to shifts room appeared be issues continue the

that you seem the So be it to from and a that better. and getting that improving gave does comfort was operators lot hear us of confidence staffing

staffing very So still operators focused still all are it of given team, us, on on though. the we're the volumes something focused the running. It's much are

XXXX still there to So probably feel that different across really the handle today. have to work country sales the compared – out we of good staffing volume levels, pockets some about in sporadically

Brian Harbour

maybe kind Maybe feature the just a you of Great. technology and Okay. question waitlists that had specifically on mentioned.

better I'm that else of curious advantageous on? the kind or the as helps for advantage periods kind of I other see it But guests. fill what kind facing of or think any in tools sales of worked also helps that it's you of it's the maybe how the that that guest clear, sense shoulder if do you've

Tonya Robinson

Yes.

think to waitlist definitely the beneficial you've side. Exactly, reason I I've the sales the be heard on said.

a in. [indiscernible] being seen power guest eat think between even come and maybe So earlier help. that traffic, want in, giving going room when up, that they within to dining to them minutes, early you're And able to I going in XX, than the come they XX than eight probably they're does knows – six of hours improvement time later get look they're guest to they when dining counts more bit you if a want eat, those confident when the We've up. going at in

it's the good. on initiatives, being comfortable guest it's whether pay-at-the-table, waitlist, So that. helps really I other think just having technology it, everybody using that That's digital us with that does having and comfortable and all help it using just

Brian Harbour

Thank you.

Operator

from will Baird. David question ahead. come Tarantino go with next Please our And

David Tarantino

maybe Hi. afternoon, about and picture know is how such have strong but restaurants on is a to levels. that'd congratulations share much you three-year know same-store specifically traffic. wondering if comment on traffic much traffic the I a I you room two can I helpful? the to was if up Good questions. up year. versus here performance, and could bigger And dining the curious One, the how can sales pre-COVID be calculate you question the in start

Tonya Robinson

Yes.

total the each So versus grew month in the year. room, desk, dining prior they dining the

and grew they each of month April. quarter in So the

we dining saw And counts the guest really XXXX. great April is I was surpassed where to that room So really think in see.

very to was see happening. that that encouraging So

come overall really You did looks To-Go too, good. quarter throughout see the but net down a impact that

So certainly encouraging versus was that two ago. years

David Tarantino

how some think I over being now To-Go also capacity think with give it elevated. pre-pandemic several Got years? and maybe Can next of the perspective I it. combination the levels us guess, years, another this back you taking much on you've traffic about how over so about And you business the of last thinking being the I three you're grown potentially restaurants? to level the do mean, above

Gerald Morgan

Yes.

Tonya down craving folks hours to targeting folks extending able power experience but even that I it then get last executing able still the in – the being think, get them same those the to there, to but night execution little like in some is our that hours really drive mentioned, and that and a and us really on guess, down execution piece. we're late being the hour, earlier in, that I about power hours, they're and hour really on the the that to moving road, and comes last hold hours maybe then earlier to get trying bit token

still opportunity. some there's So

well really, good room. know feel executing, still we stores but think about I are these really how we we got

Tonya Robinson

I too, to Yes. the does when what room. that think increase I going on be overall, versus what's think To-Go the in interesting that's traffic traffic, think And you David, about dining

kitchen ahead were happen year, as on – we we throughout that what can slightly they continue can versus that restraints what room can move while there. to that exist down what to any comes the So might XXXX and capacity capacity in the be? of dining Sometimes

in volume there's positive April. a learn. beyond the bit in room be that maybe think now. capacity given to big the do what see little can of to It today, the a about what still dining to seeing But bit we're more and I that So was we above To-Go little happening learn

David Tarantino

very you much. Thank

Gerald Morgan

Thank you.

Operator

come ISI. ahead. David will with go Please question Evercore next our Palmer And from

David Palmer

evening. wanted you. I the inflation Thank commodity about outlook. Good ask to

imagine to that. some what I gives and been it was there similar would very with has is Your outlook takes But before.

last Could quarter up have course color some since come of at about give us that? you perhaps that and the offsets. costs some least during Some

Tonya Robinson

Yes, sure.

You're right.

saw bit of that. softening it bread we that a and was were mix, So like versus other on items, line beef got what absorbed we little whether kind things increases by eggs, expecting oils,

So we dynamic, it's of were XX% able the we other – a of range, to some quarter. within did a happening, see we happening big throughout that see it proteins really but bit which so did to XX%, that stay that in

David Palmer

there there've parts your that are that do it's what XX%. you levels? earlier, others consumer an regionally, forget. back to impact us and people even more as role been eating out now are were that that comfortable data even than I – were out restaurant, within the And comfortable? would then certain you And saw think And easy seeing where a well? that's only having even at January, country in pass a XX% imagine your about of Americans comfortable And for of on. Thanks. And you do I'll restaurants on the that's comfort and getting more more it think labor I

Tonya Robinson

I comps just – if the California so. at in a the say I than several contingency there. a the higher they're look big would because franchise geography and franchise mean, driven by of bit of you some stores that there's is quarter those our comps, company

– positive doesn't out of a us significant as, looking kind when bit seem takes, pushes hesitant I of guests far Across but changed have that's So a give they restricted on driver probably things. as was and in perspective. and but you is it you're data, you're say I that seeing causing think country, of really last a could that a bit quarter, think consumer more could seems here But it's hard dining evident to more pulls. and the folks on kind the one, of in certainly speaks from at labor. the a come the significant helping a being, number you kind that wanting It little probably happening. surmise identify to room did work, maybe issues that probably not and year It's certainly or labor Maybe come a were maybe year later. the little and that a you to that but be to that to

Gerald Morgan

of Yes. care in the put that partitions of cleanliness are say and all that concern even still up. I of would practices were

maintained a areas. in still of groups practices those ensure are that people we've being think comfortable lot about I in full large feeling

do time. I us helping practices lot this So current believe a at are of those

David Palmer

Thank you.

Gerald Morgan

you. Thank

Tonya Robinson

Thank you.

Operator

question next come Geiger our Please Dennis from And go will ahead. UBS. with

Dennis Geiger

you. Thank Great.

particular. Another one and maybe on in beef then commodities

could crystal or drive that one Just kind It's a you maybe some any question. ball you recognizing? outlook But today? considerations where half we or there a the the back wondering outlook bit kind of if into that some key of are drive based touch of that on things downside on could that of little frame would upside other the that sit way could

Tonya Robinson

eye that's or always certainly Yes. of on haven't There's so things the like in that. the corn product and too, talking about as way But too, impact probably that. a one. of to have at a always How about what's one watch could corn and things. And that a years, upside retail think determine been affects that whether supply, downside. part play can they're affect stores, other. all it, be would or the I for beef are exports that a the of of have number marketing things of in on happening prices, couple bit it's with things Anything can obviously, kind and weather it grocery an kind supply talking keep we we've the and just demand probably imports, things like weather last been markets really seems we other could they or demand grain, going bigger an if impactful What doing,

uncertainty some on of the change less in as back indicated, could all lot the How of that things seems we're the good Right that. supply to year there half the we're in things now. cattle. But now, right a half of It So could year. beef working. a that's of those spot locked be in back watching are we be

far those now to just that itself so deals little And tougher done uncertainty. that It's out. in to itself leads get that lends – right a

to last. knows keep just of we're could our these everything's how to an eye but So looking just on we'll like, our on the commodity continuing They're rest talk Who differently – beef is the increases it's things. a outside bit will feeling, on definitely driven little beef. how be upside continue seeing than the to basket long what maybe of some suppliers and of something packers, some we're

Dennis Geiger

That's you on helpful. on but decisions the resistance then year that any you've sort strong provide now, on assume of to lack just that importance and this a Tonya? early, the target, are of to of color of pricing half about got it's given at based traffic point. the back or pricing, And margin anything what kind given the there, you. Thank I you kind considering, of seen share year operators pricing, as think the the of maybe to right the you've outlook bit or long-term rest such of

Gerald Morgan

take that I'll Yes. one.

I use to think we're that we going as to our a little decision. closer making continue to get process same

best and operators our their what's going from markets and make decision. information in on the particular that gather see then will We

a for and our make to study we it. our business have consumer We decision will and for

and maybe will and last both value know guests. very continue committed to show be care are that, conservative the of the these our to to we We I couple, to taking try but didn't business

all. is do make we due will that for diligence the our So we study, best feel decision and

Dennis Geiger

guys. Thanks,

Tonya Robinson

Yep.

Operator

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

Peter Saleh

your up you went with congrats consumers through is Great. evidence trade don't down prices April. that menu your I quarter. the your within there as gas know all price mix or those of the improving, Thanks, but and at numbers stakes? on of trade or this really any up any and numbers reflect regionally evidence seen to to otherwise still continuing Have quarter into higher

Tonya Robinson

Peter. is the It is from, mix by And driven folks couple Yes. to little We're is continue helps which to mix. higher-priced components. entree. right to getting like room, we move see other a that go the bit just not going One a then that now, seeing looks to dining

So that in QX, in April. before happened that lapping we talked we've I start that think,

the higher-priced kind little probably leveled is less be impactful, will will May. To-Go be Those the rest little less dining too. of will heading rooms that room like that To-Go little so April, a entree, And And for a dynamic of less a the be impactful in out dining thing year.

think rest the little also I So into as year. impactful head less of you be that'll a the

we mix, probably, of probably mixed year. as more continue throughout The it'll rest benefit. see So you won't a of size the be year, the little neutral the

Peter Saleh

you And just no comment I Great. And hiring, unrelated some more you but just you what in then I on labor you've the price can guess the just three turnover. then pricing turnover? improvement know quarters? you what the if One, just two year, you comp lastly, of us questions. are said for the on labor could balance in take seen remaining be for embedded give the will seeing

Tonya Robinson

Sure. the Peter, I'll give piece. turnover the then you pricing first and we'll talk about on

the X.X%. yes, effect QX have about that, or will And X.X% you'll partial actually X.X%. full a the turnover, additional pricing effect be sure. and then X.X% be then QX was on will any a because that without X% QX be for would pricing. So QX of labor

hourly turnover to the On at be turnover continues high side, level.

going live with to employees’ little development, continue kind little to just from see training that to turnover providing like a our probably we're maybe training turnover, we very which the we And holding throughout. that costs, then of as up our in, will a probably point Staffing while. stay but deal side, up on our them on has on I as were, as leave. gotten a little low hang as bit We're the tends management bit think good kind a far be and the picked they continue I better, dynamic past XX of lower for the very things focused we it where that's continue. that days, to levels little to the sometimes think we

kind the turnover what I of from we've done you change any would on side not So really before. tell

Gerald Morgan

Yes. I'd down definitely where starting that's just come higher. we're pretty hair, any good actually to flat a We gone I but it's say And a we think to or were. haven't peaked sign.

best the for settling in, on going but to that, we're put. staying hope people are So

Peter Saleh

much. Thank you very

Gerald Morgan

you. Thank

Operator

Our next Please Partners. question MKM with from ahead. go Brett Levy comes

Brett Levy

for taking question. Great. Thanks the

some in not respect maybe level a momentum. in rollouts, that implemented the say and you with the years, year, thinking bit you number. the about expect skin is? were and us see years. go? cost you you getting in are the terms to you development, to do We'll are game now you but like next started in or the with sales what as of give Where a course been You a can you XXX XX that Thanks. Jaggers of more of three technology realistic have to optimistic is then separately, a just say any next sounds five you And showing equipment think Bubba's little where to it implementation about How what what's can to You next and both used use kind of all as the well productivity? over rundown and

Tonya Robinson

Yes. Sure.

of side tests the not the the And targeting. out goal most be stores stores technology about right out things, we part in the think. lot all talked what by before, get year of rolled rolled I we've to a would talked of of the XXX, that's is the end now, On kind a in that to Pay – we're about Roadhouse about being which for

that keep – an continue has We'll handheld doing well. little slower a been test order bit online a being table. That's on handheld with eye done at to that. the We've So going tested. really test

one restaurant we systems, restaurant for that the in Roadhouse an we've have Texas implementation coming in new On year. existing and an up this later KDS implemented

really which that Jaggers little goes. upgrade to So cool the program. with slower been adding in is that recent, has that, loyalty going that the one, we'll app how pretty a see then And

see and forward. been that's implemented, So that continue tracks will to rolled how out

that digital technology waitlist the So we and while app out that's Roadhouse, the about, for with talked been implemented. waitlist Texas rolled a has been

So for see that data coming that to successful very in see sure. it's and good being

Gerald Morgan

we've of to on optimistic have some able smaller I growth then that that success. we Yes. And are in the side, and about believe the been go towns

and a obviously, still smaller now We communities see to then us it that that committed we expand continue also that good is are we larger on there the Jaggers and it on and feel fit maybe to would about. exciting. we continuing confident. side success gives growing And into areas, Bubba's Bubba's, Roadhouse So really can vision. very with confidence to can the but are

that have be two a the this year. store next year. should open partners are One get One franchise will signed. We early very

We continue to that going. work get on stores company to growth

excited. So are we

them, setting are behind a really than things bigger to much at now. a them level contribute they are up and for right lot of We

Brett Levy

Thank you.

Gerald Morgan

you. Thank

Operator

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

Jeffrey Farmer

Great. Thank you.

detail on of for a looking rates. wage little the Just bit

Specifically, how back compare wage the of of house front in inflation your the the the does rate versus house?

Tonya Robinson

Yes.

where So them to up for wage wage live. most going the the rates are is going the are tipped of be in bit inflation a more of front primarily house. house here that That's wage. back of a [Indiscernible] on to

that's the inflation what we volume were wage wages definitely there up, than but of So is impactful, – tipped house the the in a back you're more in Overall, going and expected the looking seeing front. from of that a time change where up, volumes you're states was sales QX. minimum and lacking as QX of in that's impactful because at go higher bit wage most the the

We expect bit year now. room, inflation the the should side more throughout with wage To-Go year expectation the and shift moderate that labor a that side to now our dining from it right on throughout little is a wage

Jeffrey Farmer

one All more. right. And That's helpful. then just

your a So focus investor basket. of lot commodity on

in basket or the was a I then spend again, looking more think beyond that. But deeply beef bit to dive the are roughly of XXXX. little investors XX% cost

you for or not us help how you beef, are for those do exposures? or four understand next you commodity the contract once past what exposures can get Roadhouse? three contract largest And So

Tonya Robinson

little Yes, beef XX%. that little in a to over it's is sure. closer – Yes, a just to XX% kind of range is that lands where XX%

that of so other X%. Produce basket you're seafood, dairy commodity bread, basket. bread runs, it, another around grocery, XX% the your then chicken, Your another call and and is that And the of getting like oils, is things X% include protein, about which pork, XX% soft XX%. to mixes,

piece that Jeff, bit are those believe looking up, you're have are I at a I of On mean, smaller total that's I bit to quite locked we there. primarily getting how think other of hope of all pretty but a kind basket. the and little proteins, add seafood's pork close those I XXX%, up. darn we chicken,

produce locked on something we of to to from of So as on lock be that of up very kind bucket. will and those We a that's price grocery as that as prices similar can perspective. we don't beef. those be in essence much some treat in we so we like items, our as supply. Produce Grocery bacon, oil, much, locked on put not

supply, but on So we much as not on locking price. focus up

really that's that basket the what you’re entire way kind look that's the we of for. looking it kind perspective, at of So I commodity hope from

Jeffrey Farmer

for. Exactly guys. what Thank you, Yes. was looking I

Operator

come Andy Please ahead. will question Barish go Jefferies. from from next our And

Andy Barish

guys. Hey,

Just today commodities, given the I and steady from down were first you the mean, laps two from quarter kind levels, a cadence what of last follow-ups. of it year? what The know is decline

Tonya Robinson

mean, in it's XX% say we I pretty expected. bit would I softer the a Yes. came steady. for than QX

were for first guiding year. you the we of remember, to As all XX% the half

So be then year would QX, that you a and start that costs expectation because the in QX. that's started a be of see higher we QX our bit lapping when the last even in lower bit QX lower really than beginning would would

would to out XX% of be how that XX% range. to So build to we get that in that kind

Andy Barish

slower next little of and seasonality can then slow into over of the help go a does the in summer. us June mean, but you XXX,XXX typically the down a Tonya, And couple week business it. I the is just Got bit? April still May the just we as months phenomenal, on

Tonya Robinson

that down last typically see little does didn't slow down. a It you interesting And slow Yes. it's bit. year, though,

throughout much of summer at the we really us. If see But you and in is again for do look picks kind you as weekly period. months, usually back QX. up the softening time back that's seasonality see And in on it some average year, didn't big the a then May, sales Mother's in Day

Gerald Morgan

Father's then got slow busier Day, – would weekend. be during have And on session times of we the up Thursday we've were is a Yes. lot we the Monday through season seen really obviously interesting, in – you when or we June. in, and and what school but And

till not guess wide school's in not to the week. with back do down the I hold And mostly some get school that in continuing is it the busier completely weather And really the So weekend. and the when August really it seeing season September see then summertime, that still to we're the and of probably during we're can week. softens. little we that we when same during get And weekends the good, the a kids up slow open bit slow progress but probably late through really maybe

Andy Barish

Yes. have I have as been holidays special historical would imagine occasions strong really I to Jerry, compared think would levels. those been and well –

Gerald Morgan

Yes.

As we are we Triple world, Day, kind of are of the in Mother's Father's Day Valentine's we here the and Day Crown. in Triple kickoff Crown, Louisville, restaurant anticipating these call,

all Sunday, to get because you So Roadhouse to or leg personally Day is second would only her Mother's do get we the to Texas the get yourselves there and we first restaurant gift be forget you here not card don’t leg do her Louisville the in awesome. take better then a that, in

Andy Barish

Have Saturday. on Derby the one. a good Thanks guys. then And

Gerald Morgan

be. a weekend What to it's Yes. going

Operator

Sanderson Northcoast next Our Research. with Please Jim from will question come go ahead.

James Sanderson

for Thanks quarter. great on question a and congratulations Hey. the

understanding intensely food looking I'm gas expense, little at higher higher times. a reacted consumers the of wanted rental help costs, Just expense. how historically bit inflationary mortgage on U.S. higher really during prices,

the how and expect – Just past, all to of out experience based navigate this on continue of Thank dine how to you. Texas does do you the consumer Roadhouse? your in

Gerald Morgan

any XXXX. that portion can I back what to execution not heaping our that is reputation look promise. to we and from from discuss, and not your continue, we our food through and sides keeping and think What and probably committed I how we and you our XXXX, do when And on that that's are plate back difficult making just sure that get – wavering on times, any you strong wavering was And that. commitment portions we look really on sizes, deliver think deliver

how do, portion going are heaping we it's is through to our just everything difficult have that deliver be. going smoking on to they consistently sides, come we want that ability the that that carry put every our on when because we what believe that's want We continue that to we what consumer we our they door. us to in to rely will know on hot But stakes. And don't plate,

just we do that at really what So best we on the that's is can what we do. can live

James Sanderson

question. quick follow-up just a And Understood.

if To-Go of are To-Go stable. dine-in mentioned sales relatively think your your swapping and for I'm sales a primarily if wondering declined those portion slightly, I you that's but consumers had order delivery order To-Go

of delivery portion kind You speak or can not? has held that up to how

Tonya Robinson

Yes. get per Well, to the restaurant we don't get yes, se. delivery do comes The any to guest the food. – to

So really don't have that piece.

see sales good dining though thing. down. means we think sales And because room percent of to be continue a like We that confidence sticky, To-Go the lot sales a XX,XXX the those that's that gives week. that is stable I of up. very over us even comes that And actually a going

are the little all things continues like last look that. you we a lap that year, though seeing even So from of to restrictions that all of good, as and

James Sanderson

Thank right. you All very much.

Operator

Citi. Tower go from comes ahead. with Please question next Jon Our

Jon Tower

appreciate Great. it. I Thanks the question. taking for

I if few, a Just may.

in kitchens smaller all, footage you're First, are volumes rooms Anything are penetrating perhaps bit idea with overall all. at that dining the know, to a Jerry, in potentially curious way you you to markets? Texas reconfiguring anything the might the these the footprint And but these success having that stores square getting at you doing the towns little the of the doing smaller such same, smaller you're that with of accommodate remain the mentioned store the even to brand. I'm or stores the more footprint

Gerald Morgan

Yes.

we prototype do half, called add-ons town haven't small and to changed that within and We a footprint. tried and year had once a our a it. we two We to

we're will volume little that they People come that need a prototype, feel place of So and we over because will reputation. to know of to our very back those They we we in drive. to coming even markets highest of of that of but it's some one restaurants, get further for all forever just because from that satisfy if stores town at our the in fortunate just from a like going feel to our Ashland, consumer and in very other they're XX,XXX lot those they counties. times Kentucky, drive one reputation. execute look And confident early people, our a

us. XX So of promise years ago food execute we they taught to as find go on legendary long our us small and as maybe will legendary Ashland deliver come service, we that and towns could

Jon Tower

And Thank doing permitting on you is issues, how speed lower of year then us it. thinking ensure you're growth the improve. stores give about, you. comment a Got next read to that, doing you're specifically what earlier up? Can the the such that that these may you picking made about opening

Gerald Morgan

the Well, we're starting us does real say couple permitting to hopeful process and has or from quarters team they telling quicker. that what recently, little last I is a are estate of it been delayed look our little things like

the of running we're game behind. – little to going little we’re that that optimistic we're So a they're a knowing ahead

in deals that being of of we're side having and we're aggressive to some So because actually be that of not a than permitting little the it. we normally would delays pushed ensure more front in

closer guess right anticipating now, able giving little actually proactive, a things we're a more to a getting these we'll on better but done little we're closer. and on seems time is us time. completely being which to little confidence I be that Nothing So be get

Tonya Robinson

bit building it's of some little pipeline out just Jon, too, a the is more. And

you So flexible. have some can be and choices

it If things it a like of can you and different that too. you replace do is have something pushed, so with that, some deal

Jon Tower

so me, any now pushback sense. right Okay. phenomenal does sound is obviously doesn't like then on brand And on for far recent for lastly pricing. power, just it demand your – pricing and Makes

in necessary to how then thinking check much And about a and the competitors brand and you that? it? you if at your think at discuss Are pricing the home you take against power? the really really do looking you when when as pricing sizes, for power have look you can power How occasion? more feel you So brand pricing how index you

Tonya Robinson

have Yes. it Jerry you terms just talk to to, we or kind take, what you mentioned and the about, can as talk tell power don't take for of about really to what we since little power in talked what's do operator of regardless When of about the really Jon, I kind pricing given power. pricing pricing Trying earlier, the thing have of pricing we environment guest. the inflationary on. as is. what's right pricing going

we've the be the disciplined recently, We're really as at our important we absolutely, what have understanding process in But we had I inflationary normal we maintaining higher taken. on we environment competitors, because little a when – we're looking a for been we've we're operators, with benefit to good sure because with pricing able and is really in worked gap. want sure. talk market make about think to bit we go that every each the than do to that's little bit ourselves allowed so that to more to a

Jon Tower

seeing Great. at a And do in the market? also at all, you're niche channel you what as stake retail prices look home

Tonya Robinson

Not a changes that lot fast. whole because

So much watch that don't really that reason. to we just for too one tend

Jon Tower

taking Okay. Cool. Thanks for questions. the

Gerald Morgan

you. Thank

Operator

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

Brian Vaccaro

within that that inflation. half, I to wanted a beef right XX% you've commodity up to the you're Thanks. half on hoping you're left on start with in annual just you've was in is outlook. And in it second in, locked beef confirm, the quick to evening. penciled XX% guidance? penciled but follow-up Good increase I on a second year-on-year annual inflation I understand

Tonya Robinson

saw Because not you Yes. this they're time kind is continue beef of last same what but going increase, level up is been the same the we – yes. sequentially to the trend we've still not year see of to seeing, That go the that up. prices true, expectation. versus increasing at And is

Brian Vaccaro

something maybe year-on-year, measure are Okay. compare But I that, traffic could assume you'd it's hours X.X% and versus And labor, just be just hours are is I Omicron know however if which hours XXXX I quarter. more building right you some that you up like your if like March, I anymore. might as to to see hours X% of in then relevant But versus on impact you degree sense math to where April, said the think that you. for levels, XXXX Thank of within that, to then my against trending there's up give And to believe. or continues recently recover? us the a X%,

Tonya Robinson

it's are what numbers To-Go as higher going hours those kind depends down to really what I by as just absolutely the growth what are. growth can't right. you're a – today. say expectation April dining costs, hours levels down. To-Go. mix on I But traffic the should probably cost that on to and in to what a be speak be is mean Brian, because lower of driven hours far coming that Sure. tough wage on would but lot the we're bit at But comes and change our the the seeing amount May a in between be higher To-Go is little because room more expectation

that So we that's think probably kind of that changing. would about how

meeting saw, hard other pin one in though, to you but nail was through it's that pretty – expectation of down with our to it's QX, that, a that's all for growth hours the So than X%, to in rest line much would tough the not down. now year. as traffic be – really Right

going elevate just to depend like it's dining room what that. bit that do and kind mix things to need traffic You on hours depending staffing that that But training levels otherwise, a help have in of be. too, and there little skill on

Brian Vaccaro

Understood.

wanted I looks other inflation cost that And on quarter, versus there bit temporary picked also we some the aware in in last a be touch should the in just there or just pressures up broader is then perhaps Okay. it the like quarters. line costs of? to operating And few creeping were

Tonya Robinson

on No. supplies there on utilities, we're pressure those basis. anything what that, call laundry a in inflationary would I that types is just I things Really categories. temporary there's or continue one-time think of that like seeing and linen don't out that, and

Brian Vaccaro

Thank Okay. Great. I'll pass you. it along.

Tonya Robinson

you. Thank

Operator

from Our JPMorgan. comes go next question with Rahul Please Kro ahead.

Rahul Krotthapalli

trying inflation question. construction you is cost, regarding question like the Hi, mean, quick give have color us have a just Can what Ivankoe. I last on the John my Thanks so X color report inflationary I going overall understand seen cost, the on been I've if on Texas around seeing? XXXX, like Rahul some into far like for will the to for year. year, Roadhouse, guys. This just taking for not you're you there million pressures but like I'm going for your in X.X just like be forward, like or for numbers affecting forward. helpful. any seeing Jaggers. your the million Any like

Tonya Robinson

for Yes. I have mean, lasts to bit a to happen. bit long more hard sure. if that's might you inflation the going really tell a always the or cost. how little bit that in abates in think that here that on And it we're future, a building XXXX seeing whether be I Obviously, when

things site like that. building at as Roadhouse equipment, – we're then it when it touch. So see Really much not increase the up you we're driven of and just just And portion that on looking the between of expecting to the bit look being rents a on we XXXX, and cost XXXX is by on furniture a and work. little

costs seeing. So happening thing that's we're we're probably same those to flat remain XXXX is XXXX. although at of what saying Bubba's is kind And the

side in the we XXXX. mentioned with some to, of just of Bubba's. earlier, that is are nature savings the So really as some I the deals But building beginning implement we on there did

what's to that So of continue on cost side I but an definitely things. on the keep happening, that building think inflation eye and seeing we'll see

Rahul Krotthapalli

And follow-up the That's it. helpful. labor Got quick on just side.

you curious say what before. there are if something any specific just curious hasn't to industry initiatives that guys any there. some to higher if done said, share have Regarding just you the like or mitigate better I'm turnover, guys see Like, thoughts did you planning turnover are like do recently. like even I'm the you

Tonya Robinson

four Well, walls investments comes a on made the to folks it the been that Right, couple of that. through turnover we've that inside side seen the it's side, over of Treat bit when Hire the recent, years hasn't and a the more helping Train lot and of been restaurant everything we've Right, it the last pandemic the really from a Right. as just for lot operator, of a increase And benefit of

busy, in it's opportunities, providing about employees our little than are really going training high. is so So Texas development great providing Roadhouse and work a because for so maybe other because great volumes different talking to the training, restaurants

them how training just to So it a just that. more little execute from to for that of requires kind perspective how understand – that

Rahul Krotthapalli

helpful. for Got question it. Thanks guys. That's taking the

Tonya Robinson

Sure.

Operator

go ahead. And comes Lauren Credit with Please our question Silberman next from Suisse.

Lauren Silberman

on think had you why much. you a about Thank the broader much. just I performance very thoughts in full Steak segment outperforming the think wanted of so the any more clearly, sort Steak Thank so consistently ask the It strong resiliency and just strong category you environment? to and service we is outperformed. about consumer as But of you very any broadly. segment

Gerald Morgan

some But has scratch I is to made got for us that's sure us harder from that has well. make believe to well. you out Well, We it's a plate and fight the to are Everybody served them I that can good only I'm very scratch to consumer we are there sure speak philosophy very delivered served philosophy. that pick work reason for made from flavor us. little trying really for do that

think ability the wanting has success driven do very part to do also. product offerings But us what we execute. We but the have will that's is other a consumer our menu, for at that really popular I that. really are I and a think is the big a of lot of our it quality And price. a continue about to But stake reasonable

amazing. are people Our

Lauren Silberman

through we trying the Great. to any one, and and years, there. on supply? Just as Thank just another you for the expectations about much next then think increase ranchers willingness few the sort for the size so over puts think of to that. takes beef cost And herd

Tonya Robinson

cost to there's be hope, like would the inputs sizes the they're to with that motivation many continue that. so getting with of things that Lauren, that mean, to grain for prices the into go add herd to them certainly I some though, that There's if grow, the packers. the and and

in a And by have happen back cattle were as about big five to hope such any if for inflation I I was we a then. really when could levels same years know of went back of into a So that when or cattle. of we so. the mean, drop back happening, cycle it at remember insight we beef don't that we or – we the big that I supply even supplies see will driven would saw really today are through don't happen. that such

play feel So sure how feel something – that'll But we standpoint, I and through. I know years. say just next we out over for something couple it's here from can we manage the that don't the manage

Lauren Silberman

very much. you Thank

Operator

the back And turn Robinson over to closing comments. Tonya for will today's that conclude I'd call like now session. question-and-answer to

Tonya Robinson

right. All

I Just everyone want say hope for well. to us. is thank you guys doing joining

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

Gerald Morgan

Thank you, all.

Operator

your now And participation, this you for and will you conclude today’s disconnect. conference. Thank may

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