Texas Roadhouse, Inc. (NasdaqGS: TXRH), today announced financial results for the 13 and 39 week periods ended September 24, 2013.
|Third Quarter||Year to Date|
|($000's)||2013||2012||% Change||2013||2012||% Change|
|Income from operations (a)||25,696||27,734||(7)||93,661||88,383||6|
|Net income (a)||17,170||18,067||(5)||63,304||57,246||11|
|Diluted EPS (a)||$0.24||$0.25||(5)||$0.89||$0.80||11|
|(a) 2012 YTD includes a charge related to a legal settlement discussed below.|
Results for the third quarter included:
- Diluted earnings per share decreased 4.6% to $0.24 from $0.25 in the prior year period;
- Comparable restaurant sales increased 2.6% at company restaurants and increased 4.0% at franchise restaurants;
- Four company restaurants were opened;
- Cost of sales, as a percentage of restaurant sales, increased 150 basis points to 35.1% primarily due to food cost inflation of just over 8% in the quarter;
- Restaurant margin, as a percentage of restaurant sales, decreased 75 basis points to 17.2% primarily due to higher commodity costs, partially offset by approximately $1.3 million in benefits recorded relating to general liability insurance; and
- Pre-opening costs were $2.3 million higher compared to the prior year period primarily due to seven more restaurant openings planned in the fourth quarter of 2013 compared to the fourth quarter of 2012.
Results for the year-to-date included:
- Excluding the impact of a prior year charge, diluted earnings per share increased 5.4% to $0.89 from $0.84 in the prior year. The year-to-date 2012 results included a pre-tax charge of $5.0 million ($3.1 million after-tax) which had a negative impact of $0.04 on diluted earnings per share;
- Comparable restaurant sales increased 3.7% at company restaurants and increased 4.2% at franchise restaurants;
- 14 company and three franchise restaurants were opened;
- Restaurant margin, as a percentage of restaurant sales, decreased 45 basis points to 18.3%; and
- Costs associated with the Company’s annual managing partner conference were $2.1 million higher compared to the prior year period.
Kent Taylor, Chief Executive Officer of Texas Roadhouse, Inc., commented, “Our top-line momentum continued this quarter highlighted by positive comparable restaurant sales, including positive traffic growth, and strong performance from our newest restaurants. However, we continue to be challenged by high single-digit commodity cost inflation and higher pre-opening costs this quarter. Looking ahead, we are encouraged by expectations of much lower commodity cost inflation in 2014, and we are excited to be on pace for another year of 25 to 30 restaurant openings. Long-term, we believe that our growth potential and continued restaurant-operations focus, along with our strong balance sheet and healthy cash flow, position us well for future success.”
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