Texas Roadhouse (TXRH) 15 Feb 242023 Q4 Earnings call transcript

Company Profile

Participants

Michael Bailen	executive
Gerald Morgan	executive
David Monroe	executive
Jeffrey Bernstein	analyst
Peter Saleh	analyst
David Tarantino	analyst
Dennis Geiger	analyst
Sara Senatore	analyst
David Palmer	analyst
Jeffrey Farmer	analyst
Lauren Silberman	analyst
Andrew Barish	analyst
Christopher O'Cull	analyst
Andrew Strelzik	analyst
Gregory Francfort	analyst
Brian Vaccaro	analyst
Brian Harbour	analyst
James Sanderson	analyst
Rahul Krotthapalli	analyst
Jon Tower	analyst
Jake Bartlett	analyst

Call transcript

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Operator

Good evening, and welcome to the Texas Roadhouse Fourth Quarter Earnings Conference Call. Today's call is being recorded. [Operator Instructions] I would now like to introduce Michael Bailen, Head of Investor Relations for Texas Roadhouse.

You may begin your conference.

Michael Bailen

Thank you, Rob, and good evening. have ended our December should the release you quarter fourth XX, now, access earnings to for By XXXX. everyone would It our may forward-looking to statements. section. I will website on of remind like at texasroadhouse.com discussion also in the include be today that part found our Investors undue These not therefore, future be not performance, of are should placed statements and guarantees reliance upon them. SEC. you to our with the and our recent release of earnings all refer We filings actual results These a cause factors detailed that forward-looking of those discussion relevant differ documents the to statements. provide more from materially could

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

Officer. with Texas Executive me call Jerry is Officer the Roadhouse; Morgan, Monroe, of Chris Chief Financial On and today Chief our

will your we question, to limit remarks, to everyone one available accommodate to question. prepared please questions. order ask would the like ask answer that yourself analysts to Following we to In kindly a be

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

Gerald Morgan

everyone. great Thanks, from half and good was over double-digit volumes growth, comp average with for billion year higher XX%, increase and per margin for sales operations top earnings in in grew over XXXX. guest full at Roadhouse. the share year dollars, We Roadhouse. And to full this Michael, generated unit Texas of evening, restaurant for increased $X.X revenue Texas we that with more year, increases million than traffic. Along reported $X.X coming and XXXX line over also income from another

of X are Day, Veterans the fundraiser year and There are a nearly benefit of openings. a founder, meal providing give tinnitus national their $XXX,XXX our this Our just ways our honor a Taylor. new veterans our examples by results These of communities. honored guests the operators have ago, future free communities. XXXX over their to late or research. On reflect and of managing meal. in over back partners better Kent our our Association their record Veterans for was XXX,XXX raised Day for for Tinnitus the than And passion care just many we week commitment system-wide we a American the celebration to clearly no in voucher local store taking

opened full the Jaggers. across opened franchise restaurants we restaurants, year, first franchised And XX including all company For partners brands. our XX X our

For XXXX, brands. restaurants across to company-owned approximately continue we to expect the XX X open

months. expectation our XX% compared is as year's when Our will this year to in throughout be that openings evenly the of more openings last last X occurred distributed the year

including as and our as partners kitchen X year. efficiencies of open Roadhouses we digital to Additionally, the on accelerating And we operational at improving the openings equipment our technology emphasis on be international now all we new expect also XXX feedback Based domestic investments. standardized to convert XX approximately completed We digital a have number this kitchen XXXX. for this brands. operators, from we're XXXX, expect to on many will will conversions existing positive Texas in experience employee maintain by and focusing and franchise locations, X also guest Jaggers. In our

are many of, business to of have our which still excited same time, but be waitlist, the so We names are going business X dine are efficient platform, our the many our awareness our and is to also to we for guest continue in most at their on to the focused orders. In of restaurants way on our put their proud things direction guests increasing forward. digital about and There to-go building extremely to closing, the opportunities brands. our we place

thoughts. Now Chris will provide some

David Monroe

impressive an certainly was XXXX Jerry. Thanks, year.

operators serving shift. every busiest been, but they've even are more ever our the on focused Our guests on restaurants are

the experienced years. a at face expect in continue we XXXX. we be lower in to inflationary pressures albeit have will XXXX, continue Cattle several course, rate last challenge a supply to to Of than

the now we in the to tightening this of back be expect half supply of financial impact the majority However, of XXXX.

such, guidance X% approximately full X%. we between X% and are XXXX year to from As commodity updating inflation our

side, labor second inflation for other at guidance beginning we remains X%. To X% pressures, wage price of will menu implementing the between On of the impact unchanged offset labor X.X% be and a inflationary our and at the help our increase quarter.

looking and pricing with specific detail the our typically comparing pricing community. our wage confidence and their trends, state-mandated do, level with appropriate operator each value of us prices This right trends we restaurants in we the process level provides partnered our amount our that of well as taking for As labor increases other operators without local This the includes to determine to of at restaurants. of proposition. involvement as sacrificing we of those are traffic

As included and opened XXs Jaggers. Bubba's Texas Jerry mentioned, company-owned XX we X in XXXX, restaurants X which Roadhouses, XX

building Part building continue on While current guests. also targeted pressure areas mid-teen volumes from our more sales and exceed our that was Returns faced higher prototype. increased, prototype cost on by even of strategic our portfolio dedicated back-of-house serve prototype more larger to-go capital for XXXX. it volumes cost XXXX. But of at space a industry guest restaurants did to new has both increased inflationary new Roadhouse addition investment be was and size to the the of of our pre-COVID serve to approximately of in IRR. the in investment to The in needed Texas to investment so the costs the this due XX% average our restaurants able

had cash financial $XXX important expenditures and generated the in year cash restaurants. of acquisition X Before flow, from operations. to franchise with With fully the accomplishments to cash $XXX the ended as flow million of $XX of XXXX, we this $XXX as million self-funded shift our We million it's we well million in XXXX. we attention capital recognize

we onset that final COVID. In repaid XXXX million to capital XXXX for and investments returned will $XXX meaningful also make completed capital million of remains restaurant the between our bank this as shareholders the unchanged of the restaurants We continue $XX debt dividends, at well $XXX over guidance and beyond, new share to as expenditure in at million. borrowed in existing million $XXX time, $XX of of million repurchases development. At form and we our

As with results return yield always, XX.X% capital dividend continue to work and put and are operators average where rewarded evaluated over strong we our greatest X.X%. the ensure in past be the now consistent our will with is to we XX Michael our we years. will investments guidance. return continue and our This XXXX excellent the XX.X% With we to were shareholders the value. Overall, to to that of to XXXX fiscal reward walk with our approach for total to additional years can capital shareholder quarter generating, allocation of we provide returns year investors a expect a EPS through results of growth create confident disciplined come. And us continue

Michael Bailen

Chris. Thanks,

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

X.X% average XX We dollars quarter, the the inflation By per $XXX,XXX, of points per both midpoint restaurant time restaurant costs traffic to growth $XX,XXX. sales sales of earnings to the improvement per quarter. week $XXX percentage XX.X% comparable XX.X% increase as margin increase of to total basis including percentage of our has in dollar week to as guidance. Labor quarter. increased X.X% XX grew first traffic commodity And were with and year a of approximately up and X.X% was points quarter for as due as has frame. In XX.X%. full check basis weekly store still by and over which X.X%. negatively of of October the check. X.X% X.X%, fourth these year-over-year days was already compared a a time, while driven increase our room margin restaurants of increased of during X.X% XX per XX.X% with quarter, a the for the of X.X% And growth. Comparable decreased additional to fourth total month, of the total the wage to also our XXXX increased the week $XXX,XXX Commodity to the inflation driven weekly to-go point a by this sales November comparable sales in sales X.X%, over weather in for share fourth total $X.XX. Average store benefit and in XX.X% for increased December. hours representing that quarter XX.X% Labor XXXX of fourth other sales. restaurant impacted business XX.X% growth and X% were XXXX. margin reported a XX $XX,XXX averaging approximately million to-go increase sales, year-to-date percentage offsetting for beverage year-over-year X.X% dollars a million per a was year, become, sales the sales with and inflation fourth are growth The basis $X Food in labor X.X% of sales restaurant or on and in average, diluted At

the wage and which For of came at in the XXXX guidance. inflation labor other our was year, X.X%, midpoint full

is labor quarter in and half expect general X% equity within and expense of this approximately credit than XXXX. second XXXX. a As to last XX approximately additional year compensation the an adjustments of were labor XX between our was negative mentioned, for Included which $X to from X% basis million we additional $X.X operating million sales, change liability our from in including These grants. year. move Included of the in of impact continue of of annual XX.X% Chris other insurance. $X.X adjustments quarterly to higher from year-over-year and costs reserve quarterly wage in basis to a Other include point enhancements XXXX million the expense fourth points this inflation is program, guidance

XX.X% equity driver grew was revenue the below higher restaurant cash the year-over-year G&A compensation. The fourth of in margin, and came of quarter. for primary Moving X.X% and year-over-year dollars at increase

in also equity $X.X million year. grant G&A the the half the XXXX, second For of of enhancement expense add will approximately

quarter Our XX.X%. effective was rate the for tax

lower-than-anticipated Our we full are updating rate. our income to to XX.X% below was for tax income full tax XXXX year rate XX%. due XXXX guidance a state year rate of our approximately the expectation And tax

last Finally, is quarter, XXXX XX-week us. we year reminded a as everyone for

the fourth year versus earnings have that per weeks growth additional approximately our benefit X%. week full quarter estimate XXXX could weeks. will XX XX such, the As normal by share We

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

Gerald Morgan

was we our XXXX and question on no XXXX. year looking for Roadhouse, There's Texas momentum are building into legendary another forward Michael. to Thanks,

value. sales, costs, people taking always, on shareholder will and maximizing our care we focused of As controlling be driving

all We upcoming are amazing also celebrating looking where Texas, Partner partners. Managing to will our be of Austin, we forward our Conference in

great Roadhouse time second very Roadie Year. I'm the a excited ever That even remarks. proud Additionally, Annual of of Texas Roadhouse. our and we line open accomplishments will the Partner more concludes to Operator, Bubba's Managing Partner of our our Year for our the Managing naming and a be our Texas be prepared future. for for questions. at XX It's please

Operator

comes Instructions] Bernstein [Operator line first Barclays. Jeffrey of from question from Your the

Jeffrey Bernstein

Two questions. Great.

thinking about The first the XXXX one, It's restaurant just pretty margins. impressive.

the terms in for nailed of labor. outlook COGS you and You in provided cost the XXXX ranges

you -- the XXXX you guidance were in and you at about the do potential greatest the those this one the expansion what can I us unknowns maybe point. of range came inflation had if within same And would the obviously, in or in be follow-up. then expect you margin? talk restaurant If you of terms see you to gave think that ranges, you outcomes restaurant could margin outcomes But or

Michael Bailen

biggest may a There take you couple you Jeff, in how pricing that pricing you really kind quarter. we the own, restaurant assuming may to for relates line and the additional midpoint what of assume, operating do determine expansion. need of And the things growth, see really, on I expansion. think top fourth other for the it's probably Michael. opportunity are to hitting want is the our that Thanks modest growth, to traffic But much that of to range, your modest question. margin and traffic the have area

You may also get some labor.

out. we're enhancements the probably would -- And probably year, flatten those with up then step then out. leverage guidance about play going the get the in earlier your in year. see the stair and that some again, inflation, to commodities, just talked with may we've of would earlier And in we that how some You that given expansion that's it commodity the you're probably

Jeffrey Bernstein

Understood.

the be in and like commodities so sounds the more it So in first favorable less labor could half, back half. both

Michael Bailen

agree the Yes, would how far we as that contemplate playing with out. I as inflation

Jeffrey Bernstein

whatnot. even on going shift, there or clarify to mix whether in a I'm a fourth in spending, accelerated just in consumer then And you're the behavior just wondering obviously pretty behavior. potential the there's and you. lot spending days people through you're Got of in comp November, into brands XX seeing nicely this the how change stable consumer portfolio any I'm of just any slowdown with in year? or your strength across October, traffic you get consumer of December. whether the the change of what anticipating sense wondering behavior patterns But quarter, seeing, terms Is first

Michael Bailen

it's brands. the the And put in mean fourth to days see growth I'd say The very not we're Jeff, really our have seeing some negative changed first year. quarter that a that seen or about alcohol XX we can we to of mix Michael. traffic in up. category. does of by excited much in the all of seem at Again, we are lot the consumer behavior changed what the I be continue

I directly related us from Texas other we casual to continue or fast diners. Roadhouse. But that, see casual of that's guests anything than think to I an other trading than behavior into think industry more

are of feel beverage, but the going X-ounce right we and an a they're at and happy other probably side not they're of very alcoholic menu, those getting value Some now. soft beverage towards lower-priced consumer the maybe of more instead the sirloin -- the our items

Operator

question comes line the from of Saleh from Peter next Your BTIG.

Peter Saleh

come back I want to the didn't commodities. around the to conversation

your modestly? on what guys the inflation little you assume there you are you I and you're the year, Can really that at seeing of outlook of what elaborate slightly. least caused You've reduced just mostly you good albeit take to on some just visibility. the got first contracted down bit kind outlook a really so half or

Michael Bailen

back the of quarter the Peter, It first really were you're right, of it's to we in then and really year, expectation bigger with, the in of Michael. had continue what do first what next a will the that of starts tightening to the And half on we some the seeing the have industry impact the year. half several think months. financial do in

largely in because So the months. was earlier beef change the outlook of the

You correct. are

and -- We It a good percent our we commodities have amount certainly, move the a out. beef our further quarter, first in locked. a smaller of as becomes

again, and reasons, more and But For moments a on what to percent to not as formula locked. into our going to picking be when detail lock experts their when in competitive get basis. as much choosing to better beef probably to are it's

David Monroe

part situation Michael last basket -- the is told continuing, our that. about offset about this inflation. is quarter just helping beef Peter, add I'll And Chris. to That's beef to just certainly I so talked other continuing. is our the of with seeing we're But everything you

Peter Saleh

changed ago. CapEx, or Great. adding it that higher any this some recognize other years? to you us year And past that any the out -- also that several of terms on I little be years outs so what's couple then you high? million just the $XXX million. $XXX help obviously you than that that's we are in is kind the Are should expense. Can know of the aware said driving doing was that just much your really over I restaurants I are know number more of larger, bump bit a to renovations of

Michael Bailen

Peter, last it's than we a the been. mean we outs of other past numbers equipment the years, base be ever will before, -- several work now are Those an and we inflation Michael. were busier we're older over seen has really certainly doing to we're higher done have than get of we've labor done coupled like and are with years we I that and bump reflection remodels. in restaurants

restaurant more in be equipment replaced whether it So getting bumping done did past. we have an or be new building costs the out a to than restaurant existing and that it needs work

has that's higher. really So costs what those driven

David Monroe

to only put our Yes. in. digital again, The technology XXX only about is some I would thing And like in thing would kitchen was add I -- the going to the add that we're -- Jerry the it's that Chris. talking restaurants investment to

So those future. investments that about really good off paying feel well. in are will But as all the we add

Operator

question comes Baird. David next Tarantino the of Your from line from

David Tarantino

the a of pricing outlook. the questions have and couple philosophy margin about I

first, pretty you're inflation. up you're underprice been in closely is past, has And inflation. with in versus price total guess, the going does this taking year that the the the to think matched I I with March, pricing be look like it increase So planning philosophy perhaps to

have I right? this do philosophy if that So And so, then is forward? on managing a your how in you're change going margins

Gerald Morgan

and in we throughout it in menu. Well, the value how I our country maintaining always think approach conservative taken at we a have look

So when affect have value mindset also things the really as still place. different our to consumer menu our we go business, a wage and talk numbers mandated and keeping our bit will in we over operators with we want about that that. from increases little on gather can value Michael their talk into we're our competitive keeping that a built making into sure to for and

Michael Bailen

Yes.

I it for to think, inflation. doesn't mean pricing we're always David, component would our I definitely as always we we're structural as what is it is said not a it. pricing which in We've largely that the philosophy. inflation, of be all soon that is for But want wage change feeling of mention

both is over manage several that to the So we years that of continue but higher taking as the have wage reality rates the felt we're paying. last the pricing offset wage through are some we of we productivity that now pressures labor that efforts line, to

operator with are definitely doing. of making a bottom-up in going alignment a we're they absolutely each talking approach change to and from what So not sure philosophy, still in

David Tarantino

maybe into look visibility then helpful the outlook, the of does Great. half, that in up understand give to want a impact beef a costs commodity second just beef next costs year. accelerating? And sort next explanation. I it's carryover year commodity that some as stepping assume the how could have from whatever That's on think you and are to about us that. into that or I

Michael Bailen

say and for a the true are early for you yet there, not obviously, this XXXX. to out in reports early us to about into relief to on give tighter you could industry little for mean thoughts a of Michael. as be it's for Yes. us but what 'XX David, any supply hearing give But little XXXX. calling able I it's would much future coming thoughts the any

Operator

from next of comes line Dennis question Your the from UBS. Geiger

Dennis Geiger

a you look if sort better and to talk for relative labor could could of historical from let that you to and Does help labor kind be like as touch if situation perhaps tech that the Wondering that to the traffic looks than the relationship relates it. you Appreciate Maybe kitchens relationship? little how historical thinking to look like digital it more may bit about on Great. 'XX. of perspective? more broadly just out able what more

David Monroe

fourth Dennis, quarter. it's were in encouraged we start. I'll I Chris. mean the think Yes, I really

Our the XX% been grew growth. that's it's hours less to achieve -- -- traffic labor that pandemic. than been of difficult And was since

on And quarter, that at fact projecting the turnover again employees staying of a again, operators item, so do quarter. those was the in have to provide our the us, some line we're fourth than is things that focus with we item. in that it it first or particular can we line encouragement better there's But and by on And that achieved our it have all pre-COVID.

very all think that's And I so positive.

Gerald Morgan

is the many whole the strategically ability with it'll times the in front-of-the-house but digital times kitchen. employees in cook our will we we digital kitchen the how back cook track the believe kitchen and This the a get in our impact all the enhance turn. -- really -- that because speak kitchen we for on digital table XX. for that to many that only our not opened so year. features positive itself of the our We've and experience to our opened Jerry. We see concept the of talking to this commotion converted even been for format house manner new benefits Roadhouse stores the about I'll We've And of

been So a The and from the our demand incredible, desire operators kitchen and has is is the there. digital commitment. feedback huge

level the number strategically, game and a a we're do And big at pretty for that. to but number us, -- great we execute got is a high So I think plan. going we've to

and format. All are Bubba's the Jaggers of digital on kitchen already

Operator

Senatore Your next the line Bank comes Sara of of question from from America.

Sara Senatore

X Just clarifications.

labor on first the The is point.

less course of 'XX, You that most as traffic. impression than you under of the the you restaurants. to the the about of across I was made year point I fiscal guess we that staffing full grow think maybe the getting were hours kind over

So first your maybe wage in your maybe inflation were half, hours was while not. the highest

have just year perspective, if whether that if second -- was I to curious leverage wage and of that to half also labor contribute more moderate sort if is the this so opportunity from there And more an in maybe of technology inflation may is that. the perhaps even

that was sort the of just staffing first clarification, through XXXX. the approach So

Michael Bailen

fourth think certainly talked and about, Sara, the into it's Michael. QX could is Chris that do quarter Yes, QX traffic growing at what well. and something that I hours -- into than continue as less labor those into

are operators productivity. longer. on staying People are focused around that Our

So or that going that productivity expectation working to on along, certainly hours. better the getting are an on we labor that be something year all is

Sara Senatore

Great.

modestly is to keep consistent. value. question even Okay. the industry very seem has about that though negative, mix And we getting then hearing your other focused on They're was been just more

relative up you making is on in that showing thoughts that appear your people But So that to -- it at narrowing your curious value just your are on seeing decisions suggest doesn't different are proposition gap is be or all? comps anything would that. because

Gerald Morgan

Yes.

like just us not think, to point, it's glaringly either. showing your up I for

whether standpoint, into of value all or good be our been country And -- menu from chicken the consumer built I feels or our our offerings has always and stake the our are it about offerings. very that think dinner.

placed, where that to lot but we within that anything don't of good there's very movement about feel indicate we So see pricing. we're menu a

Operator

Evercore Your ISI. next question from comes Palmer from David of the line

David Palmer

An really amazing comps, quarter-to-date amazing.

Gerald Morgan

much. Thank you so

David Palmer

wanted to you ask KDS. about I

to that it the that does And the pioneers is bit not -- news, on little be a comment I you don't just good for some KDS. things about have you're you. guess, of You

already. maybe help because give less a to you like some turns seen what this for able add You've brands of is that? and would comps, margins, Wall you metrics the will that things us Maybe it it Street something that even the be nerds is can in your do of of Can following, sense does don't hours to be what better. might you? on that table you that could the you where you But leverage shift make any work know. there metrics share it labor I

Gerald Morgan

Well, we will a can our monitor out bunch of whole when so but that you guy. What this to I committed. Every less kitchens kitchen indicator guess, as There's Wall XX chaos, the is just to lot from -- as thing. There's doubt communication, no front you again, positives organized will see tickets clearly we've -- the our seen. kitchen. talk are. Street of already that don't and and are benefit I Michael long you how or in, David, your we're I creates that, some all really through the -- is for stress efficiency thanks we the It we think times. us the I kitchen just side -- in for And And XX have real that is that got versus the a talk cook screens a overall say. a and cook through But can you very way people those in Jerry. we it, about digital times track of it, of organizes nerd tickets the could I consistency. only of

win for a comments. forward. So that then going Michael us a couple of will has I be big And think

Michael Bailen

Roadie kitchen Jerry. lead that been likely do again, other does seek has Thanks, I a to happier think, Yes. less calmer Yes, to employment. who

better. So maybe you're the may efficient found have does that turnover I to bit do productive longer. of far time the and as employee it front house, little because But what of think we as digital improves that, a food kitchen for the out your the keeping that

bit appetizer as the out getting a So and to maybe little those an the a salads guests out little entrees quicker, get there bit are quicker.

benefit that our turn speeding So then with have and shortened and guest dining discretion, check the shorter wait you couple portion allows next change you experience. which Pay, that the system, the maybe time And a is guest. table you up the pay-at-the-table at which you to -- quote Roadhouse of to time our

maybe be getting X:XX somebody who could all out the now told the difference told their and at X:XX and sat table they in the was previously or being So by to in night, the restaurant. us being that X:XX, turn end is another willingness of make may stay

David Palmer

Any the deployment fast that sense -- being these something this do pulled, at And this heavily. but for how by end of imagine know I I you'll wait is you the XXXX I ramp point mean it's that? it you would can you of? of for pulled example? to Can done be that roll out? this be

Gerald Morgan

year going think I intention then done. And how is concept we're try the go. through to these and get to get the Well, XXX whole to this see obviously

we to for might our want high little want we and it longer strategically, I level at a take think that, do it but a execute than partners. to

to it want don't believe we'll to as and because a possibly fast put but I it committed yet. can as it, we be we're So date in on

Operator

Your next from line question Jeff Gordon comes from the of Haskett. Farmer

Jeffrey Farmer

Just follow-ups. modeling some quick

in QX be? menu Assuming X.X% menu pricing March, pricing and the what would QX takes place

Michael Bailen

again, And go pricing Michael. our day second into it's of our Jeff, that first will quarter. Sure. effect

quarter, quarters. And have both between we basically and the QX So those from the And we if we'll QX. to what in but add do what's on want the fourth year you of in pricing about of later the get anything year may and didn't any same obviously, as the we'll X.X% for we get in the reevaluate only QX, but appropriate to X.X% in we benefit X.X% back the have it, half quarter, X.X% in won't into we'll for thing first X.X% QX, have to that. would

Jeffrey Farmer

weather same-store did in sales quarter to the you share the QX, the on And impact that? date

David Monroe

the in is we this January, Chris, remarks, the and that we impacted counts it -- about -- about X.X%. weeks, had guest X prepared that's tough really by had Yes, Jeff. but January and talked

so were take it days, XX -- if first extrapolate we And you down that about into X%. the

growth if that shared X% you, you the been X%. take that with Michael So would weather have out,

spite were And X it them So XX through to lot operators, very XX care a slog customers the of there first proud of well. But those be of first took and to those show was serve days in they difficult weeks. a weeks was up that and our days. those in great able X

Jeffrey Farmer

one check, And just definitely. QX QX? think X.X%, for but breakdown and you shared was, I of some last me. was for the mix just It pricing quick

Michael Bailen

in Jeff, QX, we had X.X%. pricing us had therefore, we that points so up negative XX of mix, basis giving check, about X.X%

Operator

Your comes the Silberman Deutsche from Bank. of next Lauren line from question

Lauren Silberman

the us if ask on other first pretty OpEx. 'XX? onetime in I about been wanted talked how about. steadily, other OpEx just just the growth side even items that understand the the Congrats you growing some it It's on results. think on or to help Can you excludes of OpEx to

Michael Bailen

Michael. it's Lauren,

there general of and we've lot of repair liability maintenance underlying a of even leverage a had. get right are those -- some costs even reserve that overall in But are -- line, items some in is is there. been one the though has some inflationary remained services we adjustments -- of pressure lot and did that a big on there, top the cost insurance You absent getting in it the

think I seen. but coming mid-single-digit that bit and week per will to knowing do start increase, the those that That's we on probably you from you higher a an obviously store be at QX, would we should Probably or see XXXX, but without store what of not you rate it other now, maybe that dollars adjustments little year. as expectation. week, on So that in then growth little moving we not have what -- that move right bit through may my per continue -- dollars have. kinds in the have know be a into a But reserve we

Lauren Silberman

Great. Very helpful.

at on color provide side, that seeing, what throughout why bit sales last I on over little per you're now? positive terms to-go X year looks like, accelerate, Can On the of you quarters to-go saw you growth guess, the just seeing it you're growth. more least the a week side? And in

Gerald Morgan

off. it's our to-go rooms to to continue our service level dining keep believe full that start I I'll experience. of ability Yes, just and really through execute the

have I be at, as at available think level us the more allowed that more are continue to high operators gotten and our guests. to volume orders we take our that used So has to it to

David Monroe

pandemic. Then add this us began I and come over it is watch know time, is kind on. of quarter, down to just it but spiked Chris. that during Yes, -- now and saw it I back you of sort up mean the every I'll you again. coming

execute and So to guests. folks -- definitely to it's just our a this Jerry's how know point, it, thing our is popular for

that to well to forward do looking we're So see over continuing time.

Lauren Silberman

to the clarify. one last for I weather passed? to just the -- And Great. all Just the what running quarter of just me. clarify on date and terms as you -- in comp you're Can color appreciate

Michael Bailen

Sure, Lauren. It's Michael.

comp little I a within tell X January over and plus a can weeks XX So I that a you then guess, our day was days, XX%. the last X.X%, was

Operator

from line question of Andy Your comes Barish Jefferies. next the from

Andrew Barish

of asked. has stuff Most my been

quantify Any rest Or the quarter? the for you And Lenten could is XQ sort week is Christmas of the minor? around of the then started shift? Just upon us benefit and earlier a for of kind it season of commentary the holiday in the that XQ.

Gerald Morgan

and obviously, off Listen, running gives strong yesterday, a great quarter, I just the and can Day -- had first indication we're solid. we Valentine's us which that

-- to very first is Jaggers, all we quarter. asked into right at weather, the that but solid momentum the the the know I promotional you things think some I going on now, without hard that's stuff about, have So other do

Michael Bailen

fingertips We it's time Andy, if that able I I couple Michael. frame, at saw days right put know while. any calendar to numbers I'm not my have the up shift. quite the And We for don't But going around of a the definitely in we've beyond numbers to that be a regarding saw with again, some go benefit Yes. now. strength putting benefits but holidays. been number the just on a

Andrew Barish

this on on hit the just idiosyncratic that then about that with some staying of back last there? we on in CapEx should capital conversions kind Or things offset think the same. And KDS? Were -- CapEx the circling XXX total some staying the coming although more there Understood. spending flat, kitchen year? the but how digital What's clearly

Michael Bailen

of say that filled there and that kitchens too put there, the projects things Yes. fair much some -- in space. estimate initial come Andy, without to of it's out we and getting some digital to some room into for the details, that the our gave us other acceleration wiggle room

ourselves So again, for we room that. some left

this to was with did take it something else had -- out. it that not and So we replace

David Monroe

Chris. -- on $X that. talking into a to roughly in a it's just big about about it's of I'll can we it store put mean a the And $XX,XXX way KDS I so And that in, find million. Yes. budget, you're just and to I'll get add Andy, there.

Operator

the Stifel. from Your line question of comes Chris next from O'Cull

Christopher O'Cull

during growing Jerry, restaurants are signs if seeing that your are approach to increase may just headroom? wondering a closer a you're additional -- any peak number for need be of other could you that outs capacity getting bump any that sales or seeing hours? maybe I'm

Gerald Morgan

building. folks for thanks that's what that is think really which is are, in -- bump in storage giving Chris, really more guests outs back to these more we're be of and the serving to the the food cooler doing a Yes, are costs of -- expansions, the -- get really lot their part I able

average large more doing our -- that. a The other are elevated of unit $X.X to restaurants got at even at we've significantly million, group that the -- volume over upside than

get definitely to there. through year the building. And that our can be our do just that way to that continue increase we'll need fine. even there's able so they're execute ones We the year people, operators more continue and as unit I've average things more if a And just and demand we be people us show said their volumes product, more the execute the to got after in to past, leading to

Michael Bailen

which, average average, just at Those above highest said, than are And what want to XXXX. not, well add to average, average, better Jerry comp the above impressive. if or happened I certainly Michael. on throughout or to and at restaurants, Chris, continue at least this is I ones think, that that is volume quite

for seen as us confidence that far lull quite haven't busiest growth. a come room restaurants as we gives future up those even our a bit that for the of So -- average our growth, against so stores have

Christopher O'Cull

what many right then could commitments some that now That's how additional you around targeting maybe And for at have Jaggers? you impressive. then unit you're color development Jaggers and economics provide

Gerald Morgan

go Yes, Michael. ahead,

Michael Bailen

again. opening a say to returns. have a have get us be franchisees early on it's little Michael I Chris, already and of it's stores. more who would for will Clearly, we specifics into couple stores opened

are want don't seeing, future to continued there their in they but say with conversations well. I are they So partners pleased I what would and mouth, words put as are with

So side and we into company the we side, what believe either I'm pleased going are seeing returns, not get on Jaggers going or what the to do but are we very franchise with can forward.

Operator

question Your from line Andrew comes next of BMO. Strelzik from the

Andrew Strelzik

of so. the know done lot work on Bubba's. last hoping brand was color on start a could some years I you've or giving you I the over maybe X by

would opportunities? where or where is Thoughts work, around today progress seeing other So more Bubba's you great. need areas be are that

Gerald Morgan

really keep really what right put cost sales We've only growing. in of the the investment and done Andrew. down the all the on support good the I the you, people, think I Thank Yes. parts solid last the people, way of of are not see -- some about around lot we Bubba's. structural leaders, the building We a getting years it. feel couple our to

thing So leadership, all the the execute consistency food, think of is that roll we identifying having I and the our the ability the who loving rock is. energy and about people having have to that XX the but people Bubba's are with and and -- burgers pizzas indicators and and are with the biggest

are making. and with Bubba's is we're So happy positive, very all the progress very continued that indicators

Andrew Strelzik

That's following of the on great up inflation outlook. some to hear. food or commodity And then just inflation

that kind You how you're year half back you expecting to and by of then half in be increases of front the a step-up kind quarter or more in either noted half. first Can progress? kind the half, specific little the back the modest of more the of

Michael Bailen

QX the stands one than up at I'd Michael. say as in QX dramatically it's bit there. necessarily back really stair half, you're the low definitely the Andrew, any I each -- where other. It out into that's but I that that inflation don't is have the don't kind QX, is of Yes. X a and point a maybe different being X% then range and expectation QX And probably X% -- X, grows from step is it lower. certainly little to know to that from our the be

Andrew Strelzik

could your if A in. just more squeeze and question Maybe on I buybacks Okay. appetite there. one

now off repurchases for just paying the I last I'm noted going the be the bit at for You is to up, there, point CapEx share appetite of debt curious, know your this 'XX. but

David Monroe

flow Andrew, for major Yes, sheet cash Chris. balance are advantages Look, our us. our operating and it's

you are have happy we and over -- have. we haul saw we'll approved Board And share to like Jerry with this But we repurchases. Obviously, think take out long that in share to to bringing the look so to looking we're balanced at there. to that first that have there at opportunities going And And continue approach continuing at we'll the our the look the we're the increase invest, dividend over, place to about cash the we be first. repurchase go is then if as left But program. that is going to continue dilution. to

Operator

question of comes Gregory Your from Securities. Francfort next Guggenheim the from line

Gregory Francfort

I had ones. quick X

of I beyond you a growth kind of traffic, X% The answered would first really running to what is you and for that pace healthy question it guys I'm expand little on capacity maybe -- your know are if maybe growth unit accelerate I bit. just the take to the unit appetite mean you range. curious wondering X% to -- I'm earlier.

Gerald Morgan

keep how us of for that balanced be year to do right. approach, many to do Well, and thank It's and a it openings a cadence you. can our have we in important we

open store It folks We have to inside. a with get energy. incredible every lot of takes

X So we we're of brands. number Roadhouse the doing for like our what and other

or there, opportunity, and couple get might close we're here us think stay opportunity growth. our take game I So that. we to an see overall strategic If on a going don't we plan but you'll change increase to probably to goal very that

Gregory Francfort

the And training like ability environment just turnover have maybe workers? But the to be earlier. or looks and Any to I That any where missed on what quit labor might be your thoughts would on helpful. doing Got -- the thoughts then it or it. train may rates that market?

Gerald Morgan

it that X Yes. of good. volume. Thank and really the turnover of we reps We feel these down, running and those at higher our indicators means our We is years, couple levels, at in into a of it also X that managing more look coming that are work lot and managers you. our last put a at shifts getting Roadies. And which we're are all partners,

all So flow us. are applicant are folks of solid has -- There those solid. been pretty for indicators pretty

and really be the So a work where and something effort employees and really has our I to think that's we in part from environment standpoint, benefited, that an that put we're work the want creating special. of

taking environment there, care Roadie a folks to going of very they're believe happy, out So keep The we we I and our and us. longer around it's Nation positive can stay benefit. are keep

David Monroe

win. Winners

Gerald Morgan

Yes.

Operator

the Brian Raymond question James. comes next line of from Vaccaro Your from

Brian Vaccaro

of or worth differences to turns? trends might be regional daypart an impressive period Just growth maybe I table your that there have for even back time outsized bit. little curious, been on you able table dig bit, any a topic be et are seeing comps bit into broadly, the tying are Obviously, Pay, that and long a more circling Roadie now. might acceleration demand turns guess and little I'm But tie as of it a comps you into in peak cetera, comps or to your Or recent back a highlighting? little your in other you

Michael Bailen

hear Good Michael. from you. Yes. to Brian, it's

that of as the across restaurants, are to power what we're country. frame. of the then we daypart, more as out. But in is parse age a seeing time call geographically, the And little X:XX are a difficult seeing our bit to the and far hours, power, the results we X:XX By day we strength into I seeing earlier you, results. Some tell similar that similar little can

a to going So everything on in good experience, but give we're whether the pace. think that's that's doing focus And to coming from their continue what out get that to the them technology get forward. at investments, we'll and you, give we I can hard opportunity tell certainly to guest

Operator

line question the Brian of next from from Morgan Stanley. comes Your Harbour

Brian Harbour

Yes. Maybe Michael of do about in year -- G&A just have percent what Chris, or either terms any view on one or there? growth for think as me. of this you leverage kind sales you

Michael Bailen

to going Michael. as G&A, growth to we're people it's continue Yes, our systems. in Brian, company, a invest and our

I we are. like G&A same, less think continue would get X.X% we dollars if see our grow leverage at were 'XX. can of to those where that and we there. philosophy the revenue from significantly down we than But see to some remains revenue That's in growth come

some you about And bonus of 'XX. second you will then us and little we most But can a happens we'll start the have QX, would I you I year, will we've lot could then having enhancements that for a after increase. in what the bit of not probably equity that, -- we talked made compensation So into again, compensation. see accrue of the to you to see And lap additional increase. the to the half think need tell that in Again, see some that being see you year. would a that XX-week impact opportunity see 'XX.

G&A get So dollars I think leverage. lot where grow, and you'll a continue a maybe to year not we see of it's those

business. upon what Some investments top up in to be the depend the line ends of but yes, doing, will made definitely that

Operator

question from Sanderson Northcoast from of Jim next the Research. Your line comes

James Sanderson

a back back the an expect actually iron of I to to it the It me so And Congratulations we mix that's upsell there the make improving, an Do wanted quarter. go you go negative half is as become as issue. has speak? opportunity to that positive, to out, been. itself to year? see to that opportunity seems much great not pretty that to into as on

Michael Bailen

in fourth points are little around correct. couple holiday XX been the in have you I what than with things were the a we of the there the us it's QX a There bit Jim, few Michael. less quarter mean benefited last was basis quarters. seeing that time. in

an that sales whether traffic, -- Entrees, the that wait us? honest And bit that may and mix of a as into think, of, other see bit side, can trading negative offset I'll of again, some right trend we'll maybe flatten sales societal us or see maybe something they're Will less in is little you on. if of just have you. we alcohol a bread could mark. here You increase out watching a some and continues. of people I to alcohol hitting a trends be happens little XXXX kind of be into there. that bit value and such the be just our but continue see have we'll areas. It'll now question what to stay That's one little with growing with

James Sanderson

Okay.

forward, it? bad. So probably a going not right little headwind look bit of Is just as to a that the at way

Michael Bailen

hard to see you would to headwind. it a really it the I me it's But economic on, It's not one environment one a surprise in hard for going that what's bit be little consumer until in, answer. think fully fully it's of again, predict. to But we're a

Operator

Krotthapalli of Rahul comes from line the from next Your JPMorgan. question

Rahul Krotthapalli

Or for the profiles an store this structural be concept? help some lower I And potential forward? and are a have I for to Can in growth just to or there we follow above get this versus store margin us at concept and on this there discuss Roadhouse any as costs at inflection go wanted margin a for follow-up. you bit we some up more the Roadhouse? Can expand prime year-on-year Bubba's. cost expect confidence longer-term like point? Is a

Michael Bailen

can that, we're I information generate that We good looking can feel some maybe the is you for. you're returns generate for. that I'm Bubba's a looking tell give probably those to strong we answer believe you, of I restaurant that very all not can very This Michael. mid-teen but can margin. going Bubba's

higher in point and restaurant possible. But is a than higher at Roadhouse concepts. similar performs can be volumes, yes, they level most of they a level Bubba's Roadhouse, is Your reality with if than sales doing absolutely, the line that were

from But is a margin to that benefit to margin have lend very at perspective. compared Roadhouse as Bubba's going items volumes. Roadhouse on that the we So strong menu similar a to would itself

to I about as think right that's that going one on probably as go we're now. far

Rahul Krotthapalli

follow-up, and the -- how a And whatnot. about you the as I discussed having this just on new guys And a targeted this I you lot know looking was helpful. at XXX like XXX you thought I like if Roadhouse are digital to of total new TAM That's going kitchens, the at store line? guys stores talked like of an whole. think down formats company updated curious time. know a there I'm over is XXX on and number for

Gerald Morgan

year business that, Thank forward. target after just for a great We little We and of Yes. over you. us. believe, just adjusted believe lot research that's a about I a ago going a thinking our

partners our we all there, out get now. So of can number there's that but being on we to We're number. still to to adjustment believe no focused responsible that

Operator

Your question from line Jon comes from next Citigroup. Tower the of

Jon Tower

into that in side. the the carry that nature of you're onetime I'm Just 'XX, real about and something not 'XX. The first in quick, assuming grant changes forward half on G&A will are talking those second

So just wanted first to confirm that.

Michael Bailen

It's Michael.

a are an It's onetime G&A of the On the side, those bit acceleration nature. little more really grants. in

the given been be happening have would still and quarters. that be pulling we'll all at expensing several some several years, last the that grants we'll over over now and up time granting been we've next quarterly So grants -- one

majority QX, into after QX the on feel will year. it The we'll impact of some then an then have So and that in us that. next onetime beginning of not

Jon Tower

had as about How labor earlier the you that well? line mentioned

Michael Bailen

is not -- line nature. in The onetime as labor more of much is

the While to us of granting have the of also the grants compensation. in of store-level enhancements other of including acceleration manager you that equity amount going but do some on, additional it part increasing is employees levels

one that with is stay that us So forward. going will

Jon Tower

of terms in days. demand a Great. earlier strong has options And traffic curious, just during had success you've some And your some obviously expanding standpoint. the week I business Dine Early the of very know then from got

or during think since added extra mistaken. weekdays about COVID, not you, the an to hour if I'm I that so

of feel more perhaps that curious, you further is further? Could today there's push Or think X:XX meet extend that just not to that X:XX? now. X mostly like it's do to p.m. demand? kind or you X to opportunity So something contemplated that it to I

Gerald Morgan

Jon. Thanks, Yes.

X:XX think really open if of X:XX. X:XX, or a I is it open are X:XX, they the X:XX, at most stores but to so it opening

as So that, kicks Dine they as Early soon open in.

out earlier we'll stay few where getting now. for that, don't think than I but there. that's any be see there I might us a

Operator

Your from the Securities. line next Jake of from Truist Bartlett question comes

Jake Bartlett

is Mine And about a development. clarification. first, maybe

today You 'XX? XX open expect or and Bubba's Roadhouse was said to My that in outlook reading development the X X last the you to in to earnings you expect with confirm, it to call Jaggers. continue any stores the company-owned then change just there open is across XX but that company-owned brands. was of But Texas

Gerald Morgan

Jake, the I in massive we amount definitely X months there's after had time. XXXX. last don't of the at think any We're openings change of this

focused little that now, out trying are a are number the But of bit. We spread strategically to that between X. right on as we

Michael Bailen

whether just Michael. cleaner put later you It could those be in see that just one. does it we give into -- year, those XX, we just but in is X felt timing, Yes. And this approximately so and I Jaggers all we The to there. get was say number Jake, the will would we open, of all all

Jake Bartlett

X Is mentioned that balanced development maybe little into spaced it. a X been environment, that years are more to signs cadence development comments the you on what or Maybe for in if headwinds kind the now. and of over Got starting evenly confidence easing expect you seeing see the you that gives 'XX? and in about could that to that's be that's And a more you -- bit, hearing you we've also the dig year.

David Monroe

seeing Yes, Jake, bit. himself. I And think that smoothing team Jerry out oversees our are development little it's a And Chris. we

higher a us. There something most the are a in cost. issues, occasional the to. that's work lot But want still issues, for I been done, part, are from say of you've so others to that supply will although chain. things And we're behind problems and hearing largely speak that jurisdictional the he may the getting at But permitting us

know through. you go. this got wanted don't this And way us seems so that's add, with to we're the that if as we do and -- definitely it's good anything as good about you about be feel feel that -- Jerry. have very But I to we've we've flowing we that built, we calling cadence

Gerald Morgan

Yes. Thanks, Chris.

lot all decision. then -- it a put takes up make it's Just work we time what this of to can and set matter of and times being into of in that the a building get -- these the the line

into of in It So and lot X want there's and 'XX, we takes everything a been keep good right that our pressure really crew the quarter. for forward. first the and of fourth the now quarters openings looking 'XX to to really versus I think effort. jamming lot work a cadence get of It's of going off the most

-- we're forward. try to going really that on cadence hard keep going been working that, we've to and So keep

Jake Bartlett

really impact margins X% earnings and comes that of quarter at 'XX, If the the the in to basis from outsized when then that's restaurant the 'XX, back margins. a where that extra year boost And it nitpicky an basis XX look kind points benefit was the But Great. of X% for last week right, extra getting that week? fourth from? modeling question. for could math points is where I operating in restaurant XX you about week Is little we're tell about the

Michael Bailen

part approximately increase of that an certainly, of margin I in But X% as the getting right X% me estimated store for -- getting call. it's expansion -- mean this reason numbers you for front I Jake, don't weeks. X% you're in have why are the -- benefit Michael.

as So you as that's that. I probably much on can give

Some benefit benefit of well. is the restaurant -- a a of there is extra benefit margin in does there come But there from outside week. that high-volume as surely

Operator

Morgan. call the today. This turn concludes like to Jerry would to for question-and-answer I session back our

Gerald Morgan

our Thank to of you. and incredible an tonight, Nation, call Roadie you thank and one each all year, for every being yeehaw and on to

Let's go.

Operator

you conference for This Thank concludes attending. call. today's

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