Texas Roadhouse, Inc 10-Q for FY2023 Q3

Texas Roadhouse, Inc. (TXRH)

10-Q 2023-11-03 For: 2023-09-26

Added on April 10, 2026

About this 10-Q

Texas Roadhouse, Inc filed this 10-Q on November 3, 2023, covering the quarter ended September 26, 2023 (FY2023 Q3).

Headline figures

Quarter ended September 26, 2023, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $1.12B; up 12.9% from $993.3M a year earlier
Net income: $65.62M; up 2.6% from net income of $63.96M a year earlier
Diluted EPS: $0.95; up 2.2% from $0.93 a year earlier

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Delaware		20-1083890
(State or other jurisdiction of		(IRS Employer
incorporation or organization)		Identification Number)


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.001 per share	TXRH	NASDAQ Global Select Market

Large Accelerated Filer ☒	Accelerated Filer ☐	Non-accelerated Filer ☐	Smaller Reporting Company ☐
			Emerging Growth Company ☐

PART I. FINANCIAL INFORMATION

Item 1 — Financial Statements (Unaudited) — Texas Roadhouse, Inc. and Subsidiaries		3
Condensed Consolidated Balance Sheets —September 26, 2023 and December 27, 2022		3
Condensed Consolidated Statements of Income — For the 13 and 39 Weeks Ended September 26, 2023 and September 27, 2022		4
Condensed Consolidated Statements of Stockholders’ Equity — For the 13 and 39 Weeks Ended September 26, 2023 and September 27, 2022		5
Condensed Consolidated Statements of Cash Flows — For the 39 Weeks Ended September 26, 2023 and September 27, 2022		7
Notes to Condensed Consolidated Financial Statements		8
Item 2 — Management’s Discussion and Analysis of Financial Condition and Results of Operations		17
Item 3 — Quantitative and Qualitative Disclosures About Market Risk		29
Item 4 — Controls and Procedures		30

PART II. OTHER INFORMATION

Item 1 — Legal Proceedings		31
Item 1A — Risk Factors		31
Item 2 — Unregistered Sales of Equity Securities and Use of Proceeds		31
Item 3 — Defaults Upon Senior Securities		31
Item 4 — Mine Safety Disclosures		31
Item 5 — Other Information		32
Item 6 — Exhibits		32

Signatures		33


	September 26, 2023		December 27, 2022
Assets
Current assets:
Cash and cash equivalents	$	69,324	$	173,861
Receivables, net of allowance for doubtful accounts of $54 at September 26, 2023 and $50 at December 27, 2022		48,967		150,264
Inventories, net		36,589		38,015
Prepaid income taxes		2,823		5,097
Prepaid expenses and other current assets		23,783		29,604
Total current assets		181,486		396,841
Property and equipment, net of accumulated depreciation of $1,048,243 at September 26, 2023 and $968,036 at December 27, 2022		1,425,169		1,270,349
Operating lease right-of-use assets, net		679,065		630,258
Goodwill		169,684		148,732
Intangible assets, net of accumulated amortization of $20,217 at September 26, 2023 and $17,905 at December 27, 2022		4,195		5,607
Other assets		86,738		73,878
Total assets	$	2,546,337	$	2,525,665
Liabilities and Stockholders’ Equity
Current liabilities:
Current portion of operating lease liabilities	$	27,186	$	25,490
Accounts payable		126,219		105,560
Deferred revenue-gift cards		201,316		335,403
Accrued wages		68,013		54,544
Income taxes payable		603		434
Accrued taxes and licenses		42,478		35,264
Other accrued liabilities		95,611		95,315
Total current liabilities		561,426		652,010
Operating lease liabilities, net of current portion		730,163		677,874
Long-term debt		—		50,000
Restricted stock and other deposits		8,873		7,979
Deferred tax liabilities, net		23,393		20,979
Other liabilities		103,316		89,161
Total liabilities		1,427,171		1,498,003
Texas Roadhouse, Inc. and subsidiaries stockholders’ equity:
Preferred stock ($0.001 par value, 1,000,000 shares authorized; no shares issued or outstanding)		—		—
Common stock ($0.001 par value, 100,000,000 shares authorized, 66,783,010 and 66,973,311 shares issued and outstanding at September 26, 2023 and December 27, 2022, respectively)		67		67
Additional paid-in-capital		—		13,139
Retained earnings		1,103,889		999,432
Total Texas Roadhouse, Inc. and subsidiaries stockholders’ equity		1,103,956		1,012,638
Noncontrolling interests		15,210		15,024
Total equity		1,119,166		1,027,662
Total liabilities and equity	$	2,546,337	$	2,525,665



	13 Weeks Ended				39 Weeks Ended
	September 26, 2023		September 27, 2022		September 26, 2023		September 27, 2022
Revenue:
Restaurant and other sales	$	1,115,224	$	986,999	$	3,447,192	$	2,986,028
Franchise royalties and fees		6,528		6,299		20,119		19,362
Total revenue		1,121,752		993,298		3,467,311		3,005,390
Costs and expenses:
Restaurant operating costs (excluding depreciation and amortization shown separately below):
Food and beverage		386,184		342,032		1,198,099		1,026,469
Labor		378,814		330,219		1,155,970		985,132
Rent		18,177		16,703		54,001		49,785
Other operating		169,225		146,036		507,846		442,714
Pre-opening		8,663		5,701		19,711		15,315
Depreciation and amortization		39,124		33,735		112,764		101,775
Impairment and closure, net		(2)		772		131		537
General and administrative		47,708		42,812		148,573		132,319
Total costs and expenses		1,047,893		918,010		3,197,095		2,754,046
Income from operations		73,859		75,288		270,216		251,344
Interest income (expense), net		496		(85)		2,730		(877)
Equity income from investments in unconsolidated affiliates		139		190		1,181		1,069
Income before taxes	$	74,494	$	75,393	$	274,127	$	251,536
Income tax expense		8,870		11,430		35,474		35,708
Net income including noncontrolling interests		65,624		63,963	$	238,653	$	215,828
Less: Net income attributable to noncontrolling interests		1,836		1,635		6,207		5,879
Net income attributable to Texas Roadhouse, Inc. and subsidiaries	$	63,788	$	62,328	$	232,446	$	209,949

Net income per common share attributable to Texas Roadhouse, Inc. and subsidiaries:
Basic	$	0.96	$	0.93	$	3.47	$	3.09
Diluted	$	0.95	$	0.93	$	3.46	$	3.08
Weighted average shares outstanding:
Basic		66,779		66,886		66,923		67,875
Diluted		67,014		67,159		67,179		68,140
Cash dividends declared per share	$	0.55	$	0.46	$	1.65	$	1.38


	For the 13 Weeks Ended September 26, 2023
								Total Texas
				Additional				Roadhouse, Inc.
		Par		Paid-in-		Retained		and		Noncontrolling
	Shares	Value		Capital		Earnings		Subsidiaries		Interests		Total
Balance, June 27, 2023	66,843,456	$	67	$	—	$	1,082,915	$	1,082,982	$	15,268	$	1,098,250
Net income	—		—		—		63,788		63,788		1,836		65,624
Distributions to noncontrolling interest holders	—		—		—		—		—		(1,894)		(1,894)
Dividends declared ($0.55 per share)	—		—		—		(36,731)		(36,731)		—		(36,731)
Shares issued under share-based compensation plans including tax effects	68,248		—		—		—		—		—		—
Indirect repurchase of shares for minimum tax withholdings	(21,101)		—		(2,360)		—		(2,360)		—		(2,360)
Repurchase of shares of common stock, including excise tax	(107,593)		—		(6,162)		(6,083)		(12,245)		—		(12,245)
Share-based compensation	—		—		8,522		—		8,522		—		8,522
Balance, September 26, 2023	66,783,010	$	67	$	—	$	1,103,889	$	1,103,956	$	15,210	$	1,119,166


	For the 13 Weeks Ended September 27, 2022
								Total Texas
				Additional				Roadhouse, Inc.
		Par		Paid-in-		Retained		and		Noncontrolling
	Shares	Value		Capital		Earnings		Subsidiaries		Interests		Total
Balance, June 28, 2022	66,853,296	$	67	$	—	$	938,825	$	938,892	$	15,127	$	954,019
Net income	—		—		—		62,328		62,328		1,635		63,963
Distributions to noncontrolling interest holders	—		—		—		—		—		(1,704)		(1,704)
Dividends declared ($0.46 per share)	—		—		—		(30,781)		(30,781)		—		(30,781)
Shares issued under share-based compensation plans including tax effects	88,641		—		—		—		—		—		—
Indirect repurchase of shares for minimum tax withholdings	(27,351)		—		(2,444)		—		(2,444)		—		(2,444)
Share-based compensation	—		—		9,580		—		9,580		—		9,580
Balance, September 27, 2022	66,914,586	$	67	$	7,136	$	970,372	$	977,575	$	15,058	$	992,633


	For the 39 Weeks Ended September 26, 2023
								Total Texas
				Additional				Roadhouse, Inc.
		Par		Paid-in-		Retained		and		Noncontrolling
	Shares	Value		Capital		Earnings		Subsidiaries		Interests		Total
Balance, December 27, 2022	66,973,311	$	67	$	13,139	$	999,432	$	1,012,638	$	15,024	$	1,027,662
Net income	—		—		—		232,446		232,446		6,207		238,653
Distributions to noncontrolling interest holders	—		—		—		—		—		(6,021)		(6,021)
Dividends declared ($1.65 per share)	—		—		—		(110,429)		(110,429)		—		(110,429)
Shares issued under share-based compensation plans including tax effects	324,415		—		—		—		—		—		—
Indirect repurchase of shares for minimum tax withholdings	(100,397)		—		(10,599)		—		(10,599)		—		(10,599)
Repurchase of shares of common stock, including excise tax	(414,319)		—		(27,806)		(17,560)		(45,366)		—		(45,366)
Share-based compensation	—		—		25,266		—		25,266		—		25,266
Balance, September 26, 2023	66,783,010	$	67	$	—	$	1,103,889	$	1,103,956	$	15,210	$	1,119,166


	For the 39 Weeks Ended September 27, 2022
								Total Texas
				Additional				Roadhouse, Inc.
		Par		Paid-in-		Retained		and		Noncontrolling
	Shares	Value		Capital		Earnings		Subsidiaries		Interests		Total
Balance, December 28, 2021	69,382,418	$	69	$	114,504	$	943,551	$	1,058,124	$	15,360	$	1,073,484
Net income	—		—		—		209,949		209,949		5,879		215,828
Distributions to noncontrolling interest holders	—		—		—		—		—		(5,841)		(5,841)
Acquisition of noncontrolling interest	—		—		(1,395)		—		(1,395)		(340)		(1,735)
Dividends declared ($1.38 per share)	—		—		—		(93,328)		(93,328)		—		(93,328)
Shares issued under share-based compensation plans including tax effects	390,996		—		—		—		—		—		—
Indirect repurchase of shares for minimum tax withholdings	(124,823)		—		(11,108)		—		(11,108)		—		(11,108)
Repurchase of shares of common stock	(2,734,005)		(2)		(123,057)		(89,800)		(212,859)		—		(212,859)
Share-based compensation	—		—		28,192		—		28,192		—		28,192
Balance, September 27, 2022	66,914,586	$	67	$	7,136	$	970,372	$	977,575	$	15,058	$	992,633


Inventory	$	410
Other assets		293
Property and equipment		17,763
Operating lease right-of-use assets		4,775
Goodwill		20,067
Intangible assets		1,700
Deferred revenue-gift cards		(1,164)
Current portion of operating lease liabilities		(110)
Operating lease liabilities, net of current portion		(4,665)
	$	39,069


	Fair Value Measurements
	Level	September 26, 2023		December 27, 2022
Deferred compensation plan—assets	1	$	74,775	$	61,835
Deferred compensation plan—liabilities	1	$	(74,690)	$	(61,668)


	Fair Value Measurements

		September 26,		December 27,
	Level	2023		2022
Long-lived assets held for use	3	$	—	$	2,000


	For the 13 Weeks Ended September 26, 2023
	Texas Roadhouse		Bubba's 33		Other		Total
Restaurant and other sales	$	1,047,795	$	61,083	$	6,346	$	1,115,224
Restaurant operating costs (excluding depreciation and amortization)		893,330		53,584		5,486		952,400
Restaurant margin	$	154,465	$	7,499	$	860	$	162,824

Depreciation and amortization	$	32,416	$	3,518	$	3,190	$	39,124
Capital expenditures		76,811		7,027		5,477		89,315

	For the 13 Weeks Ended September 27, 2022
	Texas Roadhouse		Bubba's 33		Other		Total
Restaurant and other sales	$	931,683	$	51,993	$	3,323	$	986,999
Restaurant operating costs (excluding depreciation and amortization)		785,546		46,368		3,076		834,990
Restaurant margin	$	146,137	$	5,625	$	247	$	152,009

Depreciation and amortization	$	27,757	$	3,198	$	2,780	$	33,735
Capital expenditures		55,158		8,107		2,363		65,628

	For the 39 Weeks Ended September 26, 2023
	Texas Roadhouse		Bubba's 33		Other		Total
Restaurant and other sales	$	3,244,973	$	184,012	$	18,207	$	3,447,192
Restaurant operating costs (excluding depreciation and amortization)		2,741,313		158,428		16,175		2,915,916
Restaurant margin	$	503,660	$	25,584	$	2,032	$	531,276

Depreciation and amortization	$	93,072	$	10,399	$	9,293	$	112,764
Capital expenditures		210,403		23,032		10,460		243,895

	For the 39 Weeks Ended September 27, 2022
	Texas Roadhouse		Bubba's 33		Other		Total
Restaurant and other sales	$	2,818,565	$	157,830	$	9,633	$	2,986,028
Restaurant operating costs (excluding depreciation and amortization)		2,357,910		136,837		9,353		2,504,100
Restaurant margin	$	460,655	$	20,993	$	280	$	481,928

Depreciation and amortization	$	83,402	$	9,690	$	8,683	$	101,775
Capital expenditures		146,151		21,898		6,145		174,194


	Reconciliation of Income from Operations to Restaurant Margin
	(in thousands)
	13 Weeks Ended				39 Weeks Ended
	September 26, 2023		September 27, 2022		September 26, 2023		September 27, 2022
Income from operations	$	73,859	$	75,288	$	270,216	$	251,344

Less:
Franchise royalties and fees		6,528		6,299		20,119		19,362

Add:
Pre-opening		8,663		5,701		19,711		15,315
Depreciation and amortization		39,124		33,735		112,764		101,775
Impairment and closure, net		(2)		772		131		537
General and administrative		47,708		42,812		148,573		132,319
Restaurant margin	$	162,824	$	152,009	$	531,276	$	481,928

Restaurant margin $/store week	$	20,272	$	20,001	$	22,237	$	21,332
Restaurant margin (as a percentage of restaurant and other sales)		14.6%		15.4%		15.4%		16.1%


	September 26, 2023	September 27, 2022
Company - Texas Roadhouse	573	545
Company - Bubba's 33	43	38
Company - Jaggers	7	4
Franchise - Texas Roadhouse - Domestic	54	62
Franchise - Jaggers - Domestic	1	—
Franchise - Texas Roadhouse - International	44	36
Total	722	685


	Q3 2023			Q3 2022			2023 YTD			2022 YTD
Company Restaurants:
Increase in store weeks		5.7	%		6.1	%		5.8	%		6.3	%
Increase in average unit volume		7.8	%		7.9	%		9.7	%		10.2	%
Other(1)		(0.1)	%		0.2	%		0.0	%		0.5	%
Total increase in restaurant sales		13.4	%		14.2	%		15.5	%		17.0	%
Other sales		(0.4)	%		0.2	%		(0.1)	%		0.1	%
Total increase in restaurant and other sales		13.0	%		14.4	%		15.4	%		17.1	%

Store weeks		8,032			7,600			23,892			22,592
Comparable restaurant sales		8.2	%		8.2	%		10.1	%		10.5	%

Texas Roadhouse restaurants:
Store weeks		7,394			7,062			22,041			21,004
Comparable restaurant sales		8.4	%		8.2	%		10.3	%		10.4	%
Average unit volume (in thousands)	$	1,840		$	1,700		$	5,753		$	5,227

Weekly sales by group:
Comparable restaurants (542, 511, 527 and 499 units)	$	141,675		$	131,378		$	147,832		$	134,565
Average unit volume restaurants (18, 23, 22 and 20 units)(2)	$	138,439		$	125,421		$	139,989		$	129,283
Restaurants less than six months old (13, 11, 24 and 26 units)	$	141,409		$	143,801		$	150,747		$	136,358

Bubba's 33 restaurants:
Store weeks		547			486			1,593			1,433
Comparable restaurant sales		4.8	%		6.2	%		6.0	%		11.6	%
Average unit volume (in thousands)	$	1,437		$	1,395		$	4,494		$	4,243

Weekly sales by group:
Comparable restaurants (36, 31, 34 and 30 units)	$	112,447		$	104,669		$	115,343		$	108,692
Average unit volume restaurants (4, 5, 3 and 4 units)(2)	$	93,012		$	123,760		$	113,926		$	109,656
Restaurants less than six months old (3, 2, 6 and 4 units)	$	129,941		$	95,312		$	116,281		$	126,600


	13 Weeks Ended				39 Weeks Ended
	September 26, 2023		September 27, 2022		September 26, 2023		September 27, 2022
Beginning balance	$	226,130	$	208,429	$	335,403	$	300,657
Gift card activations, net		48,824		42,741		167,378		144,402
Gift card redemptions and breakage		(73,638)		(68,905)		(301,465)		(262,794)
Ending balance	$	201,316	$	182,265	$	201,316	$	182,265


	13 Weeks Ended				39 Weeks Ended
	September 26, 2023		September 27, 2022		September 26, 2023		September 27, 2022
Tax at statutory federal rate	21.0	%	21.0	%	21.0	%	21.0	%
State and local tax, net of federal benefit	3.7		3.8		3.7		3.8
FICA tip tax credit	(12.0)		(9.6)		(11.0)		(10.1)
Work opportunity tax credit	(1.0)		(1.0)		(1.1)		(1.3)
Stock compensation	(0.6)		(0.2)		(0.6)		—
Net income attributable to noncontrolling interests	(0.4)		(0.3)		(0.4)		(0.4)
Officers compensation	0.4		0.8		0.6		0.6
Other	0.8		0.7		0.7		0.6
Total	11.9	%	15.2	%	12.9	%	14.2	%


					Maximum Number
					(or Approximate
				Total Number of	Dollar Value)
				Shares Purchased	of Shares that
	Total Number	Average		as Part of Publicly	May Yet Be
	of Shares	Price Paid		Announced Plans	Purchased Under the
Period	Purchased	per Share		or Programs	Plans or Programs
June 28 to July 25	90,093	$	113.00	90,093	$	123,637,670
July 26 to August 22	17,500	$	111.67	17,500	$	121,683,492
August 23 to September 26	—	$	—	—	$	121,683,492
Total	107,593			107,593


Name	Title	Adoption Date	End Date (1)	Aggregate Number of Securities to be Sold
Gerald L. Morgan	Chief Executive Officer	8/23/2023	2/23/2025	15,000
Christopher C. Colson	Chief Legal and Administrative Officer	8/25/2023	1/23/2024	2,000


Exhibit No.		Description
10.1*		Separation Agreement and Release of Claims dated August 3, 2023 by and between S. Chris Jacobsen and Texas Roadhouse Management Corp. (incorporated by reference to Exhibit 10.1 to the Registrant's Current Report on Form 8-K dated August 3, 2023 (File No. 000-50972))
10.2*		Form of Texas Roadhouse, Inc. 2021 Long-Term Incentive Plan Restricted Stock Unit Award Agreement (Non-Officers) (File No. 000-50972))
31.1		Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2		Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.3		Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1		Certifications pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS		Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH		Inline XBRL Taxonomy Extension Schema Document
101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB		Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document
104		Cover page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

	TEXAS ROADHOUSE, INC.

Date: November 3, 2023	By:	/s/ GERALD L. MORGAN
		Gerald L. Morgan
		Chief Executive Officer (Principal Executive Officer)


Date: November 3, 2023	By:	/s/ D. CHRISTOPHER MONROE
		D. Christopher Monroe
		Chief Financial Officer
		(Principal Financial Officer)

Date: November 3, 2023	By:	/s/ KEITH V. HUMPICH
		Keith V. Humpich
		Vice President of Finance
		(Principal Accounting Officer)

			COMPANY:

			TEXAS ROADHOUSE, INC.

Dated:			By:
			Name:
			Title:

			Address for Notices:

			Attention: Corporate Secretary
			6040 Dutchmans Lane
			Louisville, Kentucky 40205


			GRANTEE:
Dated:			By:
			Name:

			Address for Notices:


Grantee:
Date of Grant:
Vesting Date:
Restricted Stock Units granted: