Texas Roadhouse (TXRH) 24 Oct 242024 Q3 Earnings call transcript

Company Profile

Participants

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

Call transcript

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Operator

Good evening, and welcome to the Texas Roadhouse Third 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

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

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

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

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

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

Gerald Morgan

and good Michael, Thanks, evening, everyone.

report results, testament where to $X.X to continuing strong These our want a billion are We approximately to and are create want an results dine. to third guests of and work highlighted pleased which by our same-store growth quarter Roadies to revenue. sales X.X% environment were operators

domestically, internationally have our with can our operators meeting Both restaurants running Fall been you and to for the Since franchise number have and of their higher. X country last restaurants. never past visit I during the our our Also the quarter, traveling I Roadies had I managing and opportunity weeks, international have managers partners tell Tour. been with adding a pride over passion the annual

listening what business. managing extremely operators from to our sessions is learn their as As always, beneficial the feedback received run partners need owner we during we these

in quarter. the On Texas front, company-owned opened seven third we locations Roadhouse the development

For to restaurants year, brands. we open all full expect XX across approximately the

this year, a international base. U.S. call marks franchise puts for one Other total our including This out October openings military to opened them Texas of during recent three restaurants This partners in a the restaurant franchise base opening of on a track fifth three military Jaggers on location Jaggers. U.S. on XX Our South Roadhouse the quarter. location Korea. first international our

are to ahead company-owned brands. XX we XXXX, across targeting restaurant approximately Looking openings all

Additionally, of XX one our XXXX. we tentative a have the of at domestic agreement beginning largest to Roadhouse with franchisees restaurants Texas acquire

Our Roadhouse next are seven International partners partners year, are currently while locations. franchise new domestic Jaggers three Texas expecting openings franchise our targeting

operators. we our review During our also the with third completed normal quarter, menu pricing of

included at fourth we beginning out our menus As proposition proud of of value of remain the a result, quarter, pricing. of increase level the less new is this X%. the everyday appropriate believe rolled which a than and price We

positive encouraged the feedback We confident our we year. as are technology kitchen XXX and so the with in planned, continue remain target by over our Also, we of this by over this end XXX digital year. feel of conversions achieving completed receiving conversions initiatives far

XXXX. digital on of remain restaurants of the our We to also all by track to nearly a kitchen convert end

the on guest upgrading progress making of are system. restaurant we Additionally, our management

month been a for rewarding Finally, October has very our company.

Fall ringing to by at the celebrating company closing addition a as In public NASDAQ. we privilege XX had the years Tour, bell of

growth company. the very we We as are proud of public seen a have

We brand three. to have from expanded one

And named XXX. Nation's employees were we just nearly XXX,XXX. over Nation from Restaurant footprint our to increased over XXXX restaurants brand from we Roadie have have XX,XXX grown News. XXX icon We to nearly the by Also,

casual to be the to humbled receive this first truly are dining We award. restaurant

support industry. of best events surrounded team the All more the were special and these even by we were because operators in

will some provide thoughts. Chris Now

David Monroe

perform really all of for quickly year. operators The of our way, success us proven the conversations that stage the just with to with best, is Tour our partners my had be managing all partners how and Fall we Bell moment Jerry. have special of to to important Ringing favorite was a our It such and us. of you, becoming on Thank one tangible times our NASDAQ We help are a managing of XX demonstrate our was meaningful the and in especially company. visible us. were important able

three Now were Roadhouse, Jaggers, positive at brand. brands moving Bubba's especially this and sales at growth, traffic that sales to the and Texas service encouraged of quarter. momentum averaged and at our has fourth the to third $XXX,XXX beginning We forward quick $XX,XXX quarter. Weekly our $XXX,XXX see XX all carried into delivered

forward and price menu traffic look us year, we our value to and to and mix proposition allow year believe As of the our into increase will X.X% next levels. this remainder we the maintain

commodity continue quarter to fourth less guidance the an quarter. updating Also, for Additionally, outlook improvement a lower beef our X%. inflation and commodity outlook we the At are than initially factors for guidance of again relatively within in in and the commodity to price also inflation. our our in inflation into forecast by third than labor. steady below X% our commodities for inflation we more This commodity are see Commodity quarter fourth costs establishing once adjustment to of has we year's full-year XXXX inflation our levels third initial quarter. impact in to positive This resulted inflation and initial time, expectation flat lower-than-forecasted guidance current inflation both X%. expectations at our in was this driven next the reflects in

trend in remained labor well that third pleased our below labor to to quarter hour growth other also see quarter. believe fourth traffic growth levels. continue during the historical were and We relation our line guidance relative our in remained the with this we Wage and will

the we end inflation full-year our approach are narrowing guidance As year, the of X.X%. labor we to approximately XXXX

to wage other as X% representing mandated and with increase. forecasting are we much inflation labor XXXX, increases of as For of the X.X% X%

$XXX million cash. of operations flow million share repurchases. with capital $XXX and With million regard of payments the from expenditures, dividend by ended we Cash $XXX was to cash offset was flow, quarter third which

will XXXX. Jerry tentative we Indiana this six in do Included in Ohio, to As have of California. place the in franchise mentioned, agreement acquisition be and restaurants XX seven and in acquire restaurants beginning a at

Our current hand. acquisition fund expectation on through existing cash this is to

Finally, approximately for capital the new build establishing restaurants invest relocate $XXX million, are XXXX, capital acquisition guidance to sufficient initial in expenditure maintain, franchise excluding or This expand we technology and provide our at restaurant initiatives. aforementioned our existing our costs. should various restaurants,

investments use are always, As shareholder and result believe capital accretion. these in value great of our should a further we

quarter And now, Michael third the through walk will results. us

Michael Bailen

Thanks, Chris.

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

in dollar We million third margin $XXX,XXX per of also a earnings to of Average representing restaurant $XXX share $X.XX. increase reported to-go with XX.X% $XX,XXX were weekly weekly diluted XX.X% sales increase and to sales. of or total quarter the XX.X% the a

points respectively. increased nearly Restaurant growth August per quarter, In our increased September weeks for per the due X X.X% were in and average traffic the by third XX.X% the month, to grew a periods, And By $XXX,XXX as X%, check. restaurant total The week sales up to in breakage negatively this in a from gift third that X.X%, annual margin the first was during the increase of basis adjustments our for percentage restaurant X.X% margin improvement comparable driven impacted X.X% the million Comparable and by in July, X.X% over quarter, approximately store X.X% to period. XX%. with comparable sales sales XX $XX,XXX. sales margin week and to of averaging quarter XXX change year our points $X.X year. of $X.X restaurant card million last sales percentage dollars year-over-year basis increased fourth

third costs of point year-over-year quarter. Labor by X.X%. group the claims XXX $X.X for claims X.X% unfavorable was commodity remaining of million lapping for in week and per labor the as This and improvement The of of sales Labor due percentage experienced store impact a X.X% compared due X.X% of comp increase, of includes sales points increased year, Food and were offsetting was primarily beverage basis of the as inflation from percentage to decreased to third insurance increase $.X XXXX. net favorable X.X% experience. to this a XX.X% the to benefit XX as dollars total a last XX.X% total $X.X quarter the primarily wage check X.X%, quarter, the related inflation the growth hours to year's million and million of workers' claims adjustments other the adjustment. driven

third million $X.X operator lapping the year-over-year were sales, points impact than Other a Higher $X.X bonuses sales insurance includes XX unfavorable was profitability percentage basis and This adjustment XXXX. year. year reserve was liability basis from increased point adjustments, XX.X% this unfavorable offset of negative quarter from better operating XX costs general of a impact. point year-over-year had restaurant from of X which which level resulting a largely basis of the net adjustment last a million by the positive as

Moving was expense, increase of our higher the annual of grew impact margin. due year-over-year of and to and from third year-over-year change dollar came to for in equity grants. including million quarterly G&A X.X% below revenue at XX.X% The restaurant quarter. dollars the majority compensation benefit the $X.X timing

And income for Based guidance profitability full-year we initial forecast our by driven updating to XXXX rate increase the for tax on full-year XX% Our for XX%. year. approximately an outlook, quarter between The effective rate the this tax and rate the our our income XX%. XX.X%. was full rate is was tax XXXX in outlook the are higher tax for

Finally, a us. a as for year is XX-week reminder, XXXX

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

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

Gerald Morgan

us no with on public Michael. years doubt as a reflecting and XX pride Thanks, company that There's great gratitude. fills

great post-XXX recently Our Corporal America communities the Speaking also with provides Lance for homes funding the organization is all of Texas. their We XXX just Partnering about in a serve our partnership privilege for Homes Texas for to strive XX-year such Flores of we world. custom is Alberto Roadhouse what severely which Braunfels, Troops, veterans. celebrated as injured across we and New XX built home years, with had

just I focus At said but honor remain on we will will are have path, before, Finally, as future. started. getting our we always years XX young, our the

please prepared Rob, for concludes the open remarks. line That our questions.

Operator

Sara America. Your of [Operator comes the Senatore Bank of first Instructions] from line question from

Unknown Analyst

Sarah. on This for is Catherine

quarter. were ask bit the to wanted in in the about claims little spoke and just adjustments I that about some the labor you of question, leverage Michael, First number. a that

is much just those longer a get to headwind? a how And they for you I a considering be want that forward? labor should no point there are So in sense going line longer which at adjustments

Michael Bailen

lot those clearances those how with and Michael. of is in. it Catherine, adjustments And come insurance Hi, a do to have

that is that productivity may something from affect of certainly that's so I one And can which the this or year. know But labor separate seeing, never they are think how end you another. we us the way that continue through really

David Monroe

versus report mean that is being I comfortable the continued well below And that's to We Catherine, were hours XX%. we And were productivity of this about talked XX% and improve. have our QX, averages. self-insured, why in terms of numbers every I those in -- quarter. we're -- levels But Chris. also, historical and think we -- below growth have we're labor again, we traffic

had of five improving. straight we've So metric that months

Unknown Analyst

Great.

the about move to seems And doesn't a the the up -- and next really like guidance, heard. I step of it in to assumption want to concerns -- which to then Okay. inflation surprise size inflation the continues year's anticipate inflation just commodity beef despite downside,

So seeing talk embedded you're inflation what can guidance? you that there? What's in about

Gerald Morgan

to what maybe is to majority has price XXXX. And mean, It in have beef include determining specifics I similar purchasing prices the and what from a our of And we while combination that of into been year. obviously, versus fixed Sure. coming going inflation going get are and of we're work hard contracted cost at assumptions. does of not to lock department not. then guide this levels

Operator

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

Jake Bartlett

be bad one beef. it next. when in thing seems one good the it beef Mine One was picture, news about that for on there's the the in outlook can year, commodity another news

And that was that impression the kicking So bad can little next supply supply has of this been my year. the a down less road. year means kind

decent two costs. So row of within expected in beef a little kind a surprised to see years

And so -- the I why? is guess question

sure and what inflation want help be if I in us in just is make 'XX? your in also, X commodity beef But 'XX are expected to I what beef the those be can understand expectations to what's expected just years the for understand to guidance. you

David Monroe

it's Chris. roughly Jake, our of is basket. Beef half

look, been a you're inflation And And we beef a that that this year at and think these commodity in the they're -- There's the increase. cattle price business that what that we going And so of primarily it and see surprise expected. drives and of raise lot just amount able people, them correct get the lot has ranchers we in by driven to demand. supply costs on are their a for it that. there's cattle. the looking they're And didn't to

and come to to as down, down, more -- rates there herd. be have rain more the rebuild -- prices interest breeding inspire is as there grain So come and that may perhaps

something But it is to XXXX. Michael, we at this so in side, sure a at demand can environment fruition beef. have far seen see the least haven't come add? to year just you because for challenged of least We and it did what into

Michael Bailen

in and 'XX coming majority and inflation year items XXXX, beef our for touch inflation other Yes. beef from is And of inflation. other what to to some is items beef. question being deflationary this of with flat XXXX the most kind everything assumed 'XX of to with flat the then driving And overall from in your a maybe of embedded

Jake Bartlett

in visibility on Okay. think there but your beef, to is ability that other contract items, XX% portion? a Do the commodity I kind -- of of focus have maybe know we flat how And the little all that's that terms are you needs? confident in and other. assume on other you But I that for of the those I -- there's XX% for flat made portion. just you

Michael Bailen

There's more no certain overall item that items others. locked than probably were are of a that our is one into component huge basket. There

potential big to part or lower they different for expected certainly, costs the the what is than play to in have those be So be there to higher we numbers. would dramatically a really

Operator

from question next from Our of Brian comes the Oppenheimer. line Bittner

Brian Bittner

to wanted question into relative XXXX ask about to cost a inflation. pricing I your

think lap pricing correct commodity pricing increase inflation Please that's X% that X.X% late X% initiated guidance X% math. wrong. at to you from if me my of the for for you around -- September. XXXX. in took put price I in rate X% You And run of a until to you X.X% just That's wage March. And inflation

next X%-ish about your do analysts strategy year new that of pricing how for you So inform into to about you're rate And does you how the year? pricing thinking relative run this taking us kind XXXX? want

Gerald Morgan

have same we process basically, that used. we've off, start I'll And the

talked year. of that will at have we get decision pricing our our We kind the ourselves first and then we of in is we will for we're time, what that make again look feedback at decision from And conversation operators we as best based business. long-term after on with the the of then all operators believe the that on environment decide the and amongst we

current talking used we which months I from event, early guess evaluating, our with use So now. that making bigger a a of still and standpoint, from many on decision but to it's decide process partners to will the we've picture based multiple continue then years for is

Michael Bailen

this Brian, Michael is here. And

correct. math Your is

the will pricing fourth off, menu have for would and have of the what second X.X% will we or go normal for We'll X.X% quarter. see that and conversations we beginning have the the X.X% may to quarter. then quarter, come may rolling through do same not in first the We our we

Brian Bittner

it. Got it. Got

that say, at the would point Just lap X.X% right? X.X just that you range you when that until price you for confirming to rolls at to instance, that take, have took, X.X So math. off, be X.X%

Michael Bailen

combined Yes. the The X.X% you Yes. with give X.X. will X.X%

Operator

Eric from Gonzalez comes the KeyBanc. line next question from of Our

Eric Gonzalez

could benign more cost strategy food looks think help like a of prior outlook the and sum implications conservative the years. relatively and us pricing all Maybe you a for about if what up this margin

plan So see price as comfortable on pricing right letting in you're another to goes direction. the inflation midyear your the that taking lower commodity

understand So store what given means in level these assumptions, can us 'XX? you help for it margins

David Monroe

number a being consistently. always there's pricing, particularly to both Eric, we're second starting another margin Chris. number. there, labor, that it margin is But traffic, already is and We're in out quarter. to the having hit and Yes, talked hitting That mean, we've XX% absolutely on about always it's number interested focused it component dollars commodity more margin a inflation, I to XX% the pricing to restaurant our sensitive, highly -- trying growing and in said, goal than

at on really all -- look is have our to We've XXXX. have we'll depend this So expand with elements all going together. together but the pleased those of in to you'll how it things those to come as been just they come ability very to margin year,

Operator

from from Salera the Jim question of comes Next Stephens. line

James Salera

give the could Maybe quarter us mix. you on an add-ons? in just of on one, versus a and kind the two-part if alcohol kind particularly of on question contribution the Part mix update

we the that are less it Just menu, particular mix. basically more is saw about do where part evenly Or you then menu, took whether a across? across pricing impacts And the think As appetizers or any how two kind if of think pricing? little bit that or that? X.X% is desserts about of you it there it's parts

Michael Bailen

Yes. quarter. tell basis mix in -- We're probably positive That had we entree And worse, here is gotten third second what's mix negative. that it's but to remaining positive really hasn't It mix -- you what negative very positive quarter, our is around slight third in was alcohol start. mix. Maybe similar the beverage still mix the add-ons. soft of negative any driving on mix, I'll the points it XX seeing I'll mix. the in seen to touch quarter the

our we're not results of the have that on pricing pushback from me, good menu to hearing seeing any So guests, taken. we

we're believe screaming I value. So still

Gerald Morgan

probably right with up that's overall think have in how we there's board, the of me. -- across as it X.X% at we come the general, in front that. on I menu, say look the here I I'll But Jim, And don't

So to into down out the for it X it we're through would menu. at hard typically, now is But it this it be on break point, spread me side. weeks that that

Operator

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

Brian Harbour

observe ask there's the digital think the an management aspect things showing I'll sort the just actually we guest outside? like of table you that seeing, of technology of sort kitchen the you're the experience, and to do to labor is of do sort it you that you mentioned, helps starting sort sure about some of that of think employee the ways it but turns? other system. Is contribute I'm improves that, in kind from productivity might of

Gerald Morgan

kitchen early it's the are good. just would say get I the experience employees that I our reason And the that still cadence a more and little on more the the is program be but that, on we there other our for and and the stores indicators in believe the really digital obviously, kitchen. benefits use we managers do of #X the as going to communication. and are some and

that are So it's indicators me also. for should time. we that return showing hard expect at to the that of quantify But this some

Operator

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

Dennis Geiger

speak managing saw perhaps gains of really about another hours you next labor we little this hours year dynamic strong relative could year, how quarter into if into labor heading we to after year? think to should Wondering next again, that this a give kind the of more hour to year. Anything on the

Michael Bailen

this Michael. Dennis, is

this to high to staffed as about probably enter in maybe as restaurant in past, As growth algorithm running year. doing that And of XX% little together talked be XXXX opportunity going and end 'XX, it's we I level that lapping hours with said the well-staffed see as the volumes. well bit we I below traffic I've through of volumes do something restaurants being going a the a have labor but to to earlier, think growing we're be

expectation of is So had. XX% -- or the maybe the something what we're be learning still lower can kind

the help in operators matters, and are right should to certainly, job. Our the And the the going you what's for to at more way, be staffed doing continues restaurants, our that they are, are trend right XX-year training the focused and being better turnover you on grow. experience well and help with know them

be hopefully, improve can to our continue we'll running So XXXX. that be in productivity, together we but

Operator

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

David Tarantino

Congrats such on business. such growth. I to delivering your about unit momentum in strong wanted ask

But at past, starts year? the year I numbers to number. company base for talked think kind going XX XX bigger is is And you the that. start as which you've about growth a openings, guidance the to next creep think and unit what did this of X%-ish the fall for it's to in as I up, to similar operated guess openings get are below I

you down X% is kind it what your as around even growth the So XXXX? stay come that level? beyond philosophy Is scales? just you or look mid-single is to -- to I wondering at Or going was the of digit unit as base as

Gerald Morgan

we think Jerry. do is advantage. right our at think we've into evaluate to looked have Roadhouse, it We've openings doing us. continue we of will don't ever road. now to about the I number really Jaggers I David, you it is for operations. the number targeted trainers and the and on per always add XX And Bubba's this right a as balanced right, Texas whether to out the send for what for And mix

XXX-plus hire high people. to got opening at volumes. We're really You

hold operational we think focus. too openings we risk And properly, their if that then if our these we've -- that. far, to do they got and So stretch that believe that sales continue that I we

bit, guess do I to our I'm our that a right for for little operators go, trying guests philosophy. my range from I'm it a just up business as standpoint hit not is very trying and comfortable but we climb in like a from kind would XX-ish to is I'm perspective So really to I of our percentage and

David Monroe

to XX year. good acquisition you. talk this always Don't it's forget, to via adding we're David, And Chris, and

a So XX-unit this increase year. it's

Gerald Morgan

We for you words. kind your Thank appreciate it.

Operator

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

Peter Saleh

great Great, and on another quarter. congrats

then maybe and one question Just clarification. a

there be the see don't in was seem at a same-store terms of impact reflected any did some the beginning guys know but trajectory, guys Southeast, you to on your about it, and doesn't of but least doesn't in on pretty comps. weather, in September Just I numbers, question weather? be, sales October, talk that like and nasty X.X% X.X% comp with you to to seem into

Just had if And beginning a follow-up. of October? of I impact weather quick end any had on then wondering you the September at and just

David Monroe

And we've and clean -- But what stores we We've seen you're that of And here. basically, experienced back them a Chris of Michael had were closed couple may had correct, were reopen, me. at most It's -- those this through. of We get for a there -- number came we seen for we days. up them not stores. to all if bounce of able swiftly. them reopened then very a storms

So coming we for people dine us. us, to where saw of and responders with closed, the people there the loss we got -- in we first more days community were couple to sales looking

impact, weeks right, bounce in I some we numbers definitely literally lost nice consistent, a got by days, but fact you're of matched the but it couple back the so was think the And following. are was there that -- we

Gerald Morgan

those Obviously, chime I'll just care And to that. hard they restaurants it in them it in and big go owner-operators and communities. open are impacted, to look our may affected. their second the get machine, just but that in and our a We how like -- their out on work communities thoughts of back for not take

be communities that them across country. to you we want about of say operators in the it region continue have of just I our and to think partners thank here impact to and the to did a just out because there many So them. support And significant the

Peter Saleh

XX% labor sure above talking hour traffic. you're understand growth there. as think want that a XX% or growth Great. I'm quick We're follow-up, to couple think, quarters potential Just a And trying about where the into on The the to something XXXX? below. you've below understand message, just you said versus to I be then XX%? make I of want to hours maybe last, into just hour just missing next labor Michael, situation -- the understand just growing been year that. I I'm message I not

Gerald Morgan

Yes. -- And No have they do they It's we restaurants than certainly, the know grow. put are the to way of helps staffing them that they to real more need, the they don't but are They model appropriate. use message a well more there. they that is to feel staff -- labor down hours restaurants. restaurants going feel the not looking we

we're benefit is And we this from the seeing are of lapping the some of previous what year. year because

well and and than higher up think to look we're we'll we'll say against staffed learning And going ratio like, so we've And what volumes done well is be staffed ever -- go. doing to trying going may XX%, something we're above can't not you it's it's be we be today or tell together that here sit to but and be learning we to It's I before. all as going XX% something also be that you we'll trying tell XX%.

Operator

from Bernstein Barclays. from comes Jeffrey question next of the Our line

Jeffrey Bernstein

an wondering country for macro it kind release the in just like from of side, a extremely you Jerry, and wondering, picture you've ride. the Chris, I'm that going a mentioned Just sounds traveled as environment. bigger you're it's competitive the press question, just perspective,

environment there any see response you're more aggressive much you it you doesn't what seeing like wondering Maybe learning operators? impact. protect or competitive is own when implement guys seem to Again, share? your Just you're from seeing you're what your

just So local extremely category, competitive state of of some whether curious qualitative what behind in the terms in terms seeing in by it's whether it's operators? you're environment, commentary an maybe

trying to of weather? there that? in Or anything just slowed Just from to anything XX% there XX% to fact perhaps comparisons comp clarify. is make September is make and the Is bit we of in October. more And that of that the should a little

Gerald Morgan

them operators, from our -- do a we them one, our owned things tell operate us to I'll greet we that you of and food operated you have operations. will focus fed, very get that a is have, high that. excellence I business that sure does, just great do all what locally a into number thank operational and and Jeffrey, the coming thank fresh-made like make and that environment at our to things they as for supporting is restaurant for we the we great with a again, consistently which and feel need people, and level much all our of talking the do are experience

So we it just doubled people experience to want absolutely to bit reward for. try an down that and a you we you're little on do everything create that we to trying better, do,

when standpoint, the So internal a the a community with operation I from and our we're experience, about on things guest on. talking service the got and we've are focused lot picture But and partners think food, it laser creating going partnership. stuff that that comes we a are bigger our our of things to

David Monroe

all that. add When the do store just it to you're talk that performance, could talk And know an to I Michael before our about we with marketing. situation, agree be comment. gets individual Jerry's sequential to with Jeffrey, -- I you we I in local aware wanted have

-- We own and that try have the we're communities we in.

something for and community. over so they're on when in in us top competing waiting a reacting specific every program. And come or market. reaction to their They're competition to going day that in the some coming They're there's the of with market, the from operators is sort that, not

Michael Bailen

to to this comp Jeff, is that September And With Michael. from October. regards

In fully is, is X.X%. I September, not of had October think contemplating amount what we the menu. the still had pricing in you're we maybe X.X%.

mid-X% traffic our in October. range in mid-X% range to in from the So actually September in something accelerated the

October. trends acceleration September we saw our to an in So traffic from actually

Jeffrey Bernstein

that. about that year. for appreciate XX just next fully clarify, units didn't I And talked to you the Incredible.

are the I of to guess Jaggers that First incremental three all, that.

next how how core XX case, that XX of Bubba's think it's Texas that's and many you many And if for within So and that on I'm would wondering, the year? just roughly Bubba's. units Texas

Gerald Morgan

-- again, be the rest XX little on be obviously, then, bit. the that say move mid to a Jaggers. probably But number the at in Bubba's I maybe will would It and XX-ish and Roadhouse, Yes. could will

Michael Bailen

those And that just all clean bit. talked approximately Yes. up had When we across franchise Jaggers a brands. about restaurants Jeff, three were said the the little locations. to that We XX

of seven, couple the six, and as a see Jerry may you probably XXs Bubba's in Jaggers Roadhouse eight low So in there. on said,

Operator

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

Lauren Silberman

seems X%, And incredibly anything building? Have better than It across year. day to X.X% any all impressive. that is guess, you done ask acceleration. to unpack you have then closer I to parts, What changes regions, traffic, guys wanted you driving seen a is consumer quarter-to-date there? do I The is the Congrats. like in momentum comp. behavior which about think follow-up differences

Michael Bailen

would comp Lauren, another tell was you, quarter would west, would say say, the that it's saw outperforming Michael. I one anyone strong south, as third was I kind performance, north, nothing we area regional meaningfully of lagging. east, as I any far differences. or and

our that accordingly regionally I but only that little week to us, think by a consistency delivered we've it's very right, performance staffed performance you just a sure over day being of experience making So being And rewarded are promise our what of the and on a them, of traffic operators October of and providing a by so is and very bit X% delivering little always a doing we that and are priced be we're not the comp growth strong for acceleration. And continuation bit -- and to they that. shift, an there. and do well include strong always legendary in and seems our

Lauren Silberman

Great. compares there's terms of fourth should through Do anything in we you quarter? the getting consider think tougher

Gerald Morgan

the there's the serve there guests comps know in looking demand and year that see right a at trend November up of And I you. -- what all I'll December, it's we we're to out whether see But X or leave but mean nothing to is, we'll and product. it plays to our multi-year how believe kind we were of -- ready for maybe out. the are strong lot

Operator

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

Jeffrey Farmer

partner demand guess, on question. income curious to the what of I'm following managers on, some but things managing as tour the customer touched were guys heard pricing and I more or relates across specifically you interesting, Just which unexpected it Jeff's power, up levels? you from also

Gerald Morgan

things are the conversations. that we've on on had Pricing, Well, got side. adjust couple that of going I those internal already system said, -- -- we're the our conversations lot like are a to trying a of we've

the seen took we the the end -- fourth that on or the at any any or heard So of negative quarter. start haven't the of X.X% we

to want They what the exciting good is just really doing. they most that I now, share real because they're which right So better of success with conversations having to are the love keep and at we're some obviously, think that get operators, it. and

Operator

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

Jon Tower

on to outlook points add outlined X.X to you that that next for going just mentioned had labor of that 'XX. think X% to the inflation Maybe for the you year. Chris, I X% mandated is state about increases

seems years. that if in into in that And inflation rates wage you driven be specifically we've bit, maybe across been balance it recent versus if curious context of certainly starting by? the in could little Just what down the will a as what come of seeing looking have maybe landscape, the as get

of just balance So curious you flesh could that what of is increase? out driving kind the if

Michael Bailen

Yes, company, can mean we pressure do Jon, it's bit there. to is them expectation underlying we're we certainly well want compensating a they going that hard see hire again, Michael. our to I your new I want But wage an make whether you maybe little a people-first reward still are will there the we'll to work rates performers. doing. paying sure people see for that change. are And as and

factored we into so the And numbers. that

The bit there. have increases. talked acquisition expecting some mix of the about share pressure little are little we Obviously, have lion's mandated adding we're will into a probably the stores what of -- those will And with the California there. a

Jon Tower

development. year, of of XX. the this maybe KDS And to I number year, just roughly at Cool. think similar stores next The CapEx. have number Okay. for to sitting you're pivoting the to more And going

between So you're $XXX this of year? $XXX year million, the next million the that million difference the kind $XXX targeting and is

David Monroe

you It's it Yes, Chris. putting we're and on stores. it's again, right into Jon, there. our focused -- money have

want expansions investing, in Some well. keep as and are will doing previous And great that to our make And bump-outs, they're to provide value in We well. look are well. we're that in as older. kitchen of getting other stores they guests in as things places work inviting and them discussed that we quarters, they're we investing mind, sure fresh those are investments are that to

you just creating So you're expanding somewhere already you're there. capacity and have business, some great where

like So we that makes of sense. lot feel a

Jon Tower

curious then so rollout Butter any add could you on color far? if Bun Walmart And lastly, how and just at it. the is Got going

Gerald Morgan

over indications thanks still drive awareness since asking. on Texas of if that gotten the are Well, brands expectations. it's Roadhouse. -- pretty it's still still several new. consumer some years. early of with and But our that still for the lot it's all kind it's exciting by the we've We've last exceeding But really a pretty learned for into demand have the It's inspired it's side. see our is retail demand fun is see segment it a to and But to there anything business

Operator

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

David Palmer

price This that of you'd to I going type I cycles sort towards be wanted that will about wage thinking by be and that versus you about wages and own your price would it we're you the increases paying in years, how would you're price like Congrats. generally navigating that recent ask represented pricing rather to type that? sort next of And of roughly wages -- would rate up Xs your the be wages that towards twice level. to consumer beginning people. food towards you was the think in than -- inflation feels of year,

ways an right appropriate you're So opportunistic? you or now I'm be wondering that if you're consciously investment in thinking labor making that way think may that are either that

reflect value are that just you thinking there. to realities wondering how you're in that Or investments see you about the out consumer I'm that. some making

Michael Bailen

David, Michael. it's

hit at think you kind nose of there I end. on the it the

feeling. we pricing taking discussions be We'll viewing may leap level we for are before thought of the pressure happening any of commodity of the in having the we're This expected -- certainly of correlating we're those probably investing are accurate guest. to a We current picture we as had not this kind were that an be -- is pricing we not what XXXX. well that

what reflects important been the with sure that for we and appropriate making so collaboration has what for that that all the years. think of to So and pricing deliver -- is our for we now proposition business on us we operators, value right was XX-plus continue think

David Palmer

some business, the Part And also of X the this then doing in appropriate and you asking past, before little there hours, investing adjustments reason COVID. that you too. I XX years, been call bit where you were were think it, the either have I'm wage eras in a to thought about in started

versus something been and basis. eras outpacing, things what investments what of I in guys you timing have there's good hours maybe in on in are mean typically elsewhere. the out seeing efficient maybe a of thoughtful So a year-over-year something so wages your There's your we're there opportunistic. very terms certain is about

So wondering how about I'm you're thinking that.

Gerald Morgan

the the we want to airing going on value. our people, always side be the that business just adding restaurant them always to if adding we're really and pricing going with the for we're but right very means Yes. on And operators side people, the screaming of Again, careful right making what's sure we're we running the guests. change. have way no do for We're and for what's right

Operator

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

Christopher O'Cull

in volumes there open months, is realize like are looks older stores those running locations about but have newer expect store units, it the volumes you new something only cohorts. Jerry, something can the higher the Or are X Bubba's from from I at three significantly Bubba's? stores? we special from higher last

Gerald Morgan

appreciate you for thank and that. Well, notice, we

opening operational of store. amount continue to and executing excellence could a look I level. these be elevating, it be last openings There's with think open where it seem demand that and very again, definitely with we right that support we could we're in with higher stores the is that at as at of when we've mind, success the opening are a somewhat new the had And over to but the we store months. be does they're in at, happy XX our

of more memorable can and care of be from efficient taken rewarding be we in getting the and have them So that experience it. that a could us folks side getting of

level there. tells it just openings a is to need done these the effort executing the getting put So me to at we high into because demand continue and

our news from exciting very that's standpoint. So

Operator

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

Andrew Strelzik

-- me. I feel how Just and volumes my this, share quick I franchisee, rest second margins the for silly little the you asking two know company compared stores of stores? And the the this you to that how the -- for I acquired ones of Can and question for think then ever the a of we've work have at make around that that structure delivery do you but evolved sense and they're hold there's could your thinking found guess, that structures find all? Or thinking most third-party you you're evolved brand? the I answer, might think Has seen them. for

Michael Bailen

Andrew, it's let on then and chime delivery. the I'll Michael. in Jerry one, first the I'll address

acquisition volume those actually nice drive for some far increases they us. will as As stores,

weekly average volume-wise. check evenly probably that to XXXX, mix you're about modeling you coming about margin want in margins, dollars XX to sales increase a growth coming between they're maybe And add will stores deliver slight probably X.X% what for as from Our and from neutral traffic those them.

Gerald Morgan

then And it at do utilize on third we the party, Jaggers.

sense That City. stores Bubba's Roadhouse make We and also most our one it have does in New of in York in. it

our is think I the stance still So same.

are do going we're We out what's third-party having try it all first. at business on this where we to feel attention I room will comfortable through levels with business. and rely continue really to not now. will, our us grow very add our the dining And right comfortable to time, evaluate paying involvement. We're on to to that now, to to-go But there to value sales through we of any at at if it like

Operator

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

Rahul Krotthapalli

for And back in state repricing or the home? internally outlook. the was demand if equation for I more margin, one gross think trends. beef touch at it consumers case of the inflation discussed becomes products factors about do beef wanted of the on It attractive follow-up. to at in I steak consumption environment? risk And have this cook for a the of you discounting How to side the was

David Monroe

That's the get this least I'll that to of seen compete the there, so of steak you haven't years are. retailers, a I about. the might at discounting of take that some far is before where demand particularly have part seen that talking major There it's wasn't what from would And first element and that your with Chris, to we year. Rahul, follow-up. in just was absolutely we retail cuts is we previous on this

that's is cohort, to have that to they that. we think that something a would and up bring would from were yes, start through. that risk. If So demand

Rahul Krotthapalli

Perfect. or then there to but this also And it Anything December. just the we disruption trends advertise do a impact don't period when I diners. about year, understand comes guys these traffic in And a across TV, presidential food election casual from cycles is seen shorter any factors? and guys Is negative Christmas. in on trends you or typical that past year you from should Thanksgiving positive November, thinking gap there a holiday between be noted

Gerald Morgan

Yes.

between I Thanksgiving we that but time the lot in last and I frame. was at was And the of the that experiencing on a say frame being impact would noise also anything XXXX First there issues that. cycle. election XXXX, any there, of trends. didn't believe XXXX, shorter had time back we'd I at significant. during be There recall isn't look election. looking any Christmas, But see to in from help us Obviously, can't XXXX time we that an much to much be did going

Operator

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

Brian Vaccaro

other you levels cause perspective move of what 'XX? or how turnover of year seeing I that help quick might as what an the about that next versus could. ones that On dynamics turnover question into compare retention to thinking you're hours might Can on perspective? if sort relationship and for higher you me, absolute year. Kind labor what two to from the And any frame retention Just beyond a hourly and just level. whatever next normal view saw currently in or you us

Michael Bailen

-- historical it share continues on direction, XX-month trend don't would basis, I We and historical Michael. to calculates just it right do in low because levels. differently. below it's Brian, at everyone back tell the that we a you, to turnover certainly number look

provide and kitchen to and those give show sticking a just them great And so that common we to a our experience, hours for has the us. seeing when the that we're very goes pleased them looking they're be it employees in experience with for

cause if As really the to 'XX. that unfortunately. don't I I far could know change as in fair what anything to add, have

Brian Vaccaro

Okay.

Okay. of outlook half second Do next year-on-year That's following guess on point? just half in year. much expect your Fair I you at inflation one in And difference helpful. enough. a first commodity the up versus the this

Michael Bailen

point last back the Michael of year half Yes, but in just inflation say back this of the versus in again. half. the would at more half first a the what it's from it's we're different commodity nothing year, dramatically than standpoint year bit that lapping year, little Maybe the this of Brian, probably the

Operator

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

Gregory Francfort

as the your Maybe about is of? something you acquisition that rest how come franchise looking you're the I franchise base, do guess, just more that of about? think to did that happened, And

Gerald Morgan

for the Thanks question.

been few excited. a very to through a lot of we they've able us Now our years with we talk we and were conversation to and franchise very done long we're partnership back, regularly, partners get a this and time, hard and and deal a started work,

of XX, in cases, of came the And a when kind XX ago these with groups was it always years us. intention these lot

are for so to we'll and will Roadhouse, you us 'XX and to posted. of it's fruition, just there. able And a to the out start If out perfectly were terms. to how deal and get of We get a heck to to timing at others keep the anything out exciting were transaction comes like and we talk at roll them the we guys it's So it for very us. able worked very, that a ever see for we continue

Operator

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

James Sanderson

on be inflationary XXXX? of relief, relative to relatively type A years? to build-out quick in you What expect capital follow-ups couple past do so costs to of speak, Are any they stable or expenditures.

David Monroe

think stable. I relatively they're Yes,

I of looking in think of a at build-out the just year buildings. you're of a kind normal terms

James Sanderson

would or this expect pickup any the potentially where in on And you for events feedback comment but don't parties right. advanced or they or if where special any quarter, not, should on? in be, your that bookings I know on fourth All or you could track demand you banquet fourth quarter whether holiday

David Monroe

play We in here. really it's Jim, don't that Chris game.

So that's to that going be we something not see.

Operator

over concludes that closing turn Morgan back session. And call Jerry our to for remarks. I question-and-answer the will now

Gerald Morgan

And all you all your very positive that us I with of for quarter. those tonight. our you Thank time spoke much. thank out being appreciate on and

bid a good with rowdy I So enthusiasm, you night.

Let's go Roadhouse.

Operator

concludes you participation. today's Thank conference call. for This your

disconnect. now may You

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