Texas Roadhouse (TXRH) 26 Oct 232023 Q3 Earnings call transcript

Good evening and welcome to the Texas Roadhouse Third Quarter Earnings conference call. Today's call is being recorded. All participants are now in a listen-only mode. After the speakers remarks, there will be a question and answer session. (Operator Instructions). to Roadhouse. Bailen, like Relations of now Texas for would introduce Head Michael Investor I

begin conference. may You your

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refer If call Officer with can Roadhouse is to our Monroe, Texas the be release.On In information Financial Chris addition, Morgan, Chief Chief earnings Officer. Jerry non-GAAP our found GAAP and of we applicable, the me measures the measures. of may in to non-GAAP Executive reconciliations today

turn please the to In limit Following answer kindly yourself ask call to we one everyone to the available that like over analysts your be to order I'd to remarks, prepared will questions. would accommodate Jerry. we to like to a ask question.Now question,

Thanks, Michael, and evening, good everyone.

fall three more XXX all than our concepts. We with have operators nearly tour, where annual visit we completed from

improve continue passion with and our to real-time our stop, have work can the and quarter support stop of as for have X.X%. of leader sales an delivering on study, it take includes and business, our third satisfaction, many overall for development. country. our also ideas the the dining guest of to to we our serve promise is managing attitude the weekly they helped we They $XXX,XXX managing to year we guest how partners recently were is of last on usage in our are committed We make the at advantages. they not action I passion, strong to sticking of they see core to while values after tell believe the gives one hard of the to interact my mentioned profits line regardless teams independent across as our operators' to opportunity biggest we casual I As this hear quarter, food and of legendary approximately friendly receive and only get of plan us Roadies.The one quarter, us but better. and seen we all the directly average And which invaluable needs performance, to be partners feedback The to and in third managers again continue once their highlights focus including dedication guest service. each comparable sales top their categories, remain compared quality restaurants us month XXXX.Moving food building and and our of the the success on to that and pressures legendary In completed drive is growth traffic and and our sales results face.Our service. satisfaction

two The XX Bubba's with company openings, third was productive including quarter store nine locations.

restaurant. three international locations opened Jaggers our also We four including franchise and first franchise restaurants,

targeting XX Texas the stores well year.Looking pipeline Roadhouse approximately company-owned for XXXX, new ahead Bubba's we XX company-owned three Roadhouse well which openings many and and to additional Jaggers. as expect are full open XX to openings Bubba's of as quarter, as us XX the a We strong openings restaurants company-owned have as as fourth three give as and Jaggers would in XX Texas

and international We XXXX, locations also expect in nine domestic at least including our franchise partners Jaggers. to four open

Finally, navigate payments the to student whether of of always economic of consumer I and issues, industry potential restaurants it the times, to external or like other full restaurant ability health increases, address mandated increasing wage loan uncertain has the the regarding challenges. is been concerns would commodity inflation,

consumer However, hospitality.Our we especially level to value, to every which control, remained providing have resilient guest We like a we can on with restaurant. restaurants, visits seen simple. each legendary experience that a in and service remains that the a those has quality product at dine desire their our ours what offer focus of and is high position

their commodities; for never valuable guests take will time of and money. most their their We granted that two give us

will Chris thoughts. provide Now some

Thanks, Jerry.

Jerry's a were quarter, as on the full comparable strength third a on to start continue gives have leaders partners, was more to we regard by legendary. average us able -- to X.X% to our operational and many store We a feedback we pleased me basis. or their our Still our we beginning to remain the spend I continue great to an update to managing they The company to I understand impacted for our assumptions, some more quarter. approach our experience menu it for year-to-date we line able capital EPS on fall noise, the maintaining I per were go-forward menu seen adjustments, quarter while and being financial Michael so also quarter and tour. Despite by with with well regarding negatively would margin growing and of how implemented our our trends listen comments echoing current even me This the top the allocation. Let time on were extremely third opportunities X.X% provides multiyear pricing increase. relatively this will week get make with to detail. new, results dollars And several our detailed how dollars which more the results color success.Before profitability, Michael like as our offer critical are meet growth.At double-digit results, consistency price to margin of fourth

primarily us, for is wage state-mandated structural action typical meant impact pressure, upcoming is wage to offset pricing this the including of increases. As

year. line largely better inflation we in last our an from same continues pressure more time, regarding significant story While pace third this expected return wage continue rate driver in our team of elevated a doing the At lap with of Inflation wage year's as job perform wage purchasing.On will procurement the is resulting contracting year. deflating for disciplined increase of The with costs Beef sequential basket stabilized, they with a remain capital and pressure and manageable moderate year. to has to year-over-year balanced than XXXX.It's rest we similar increases from in moved to normalized the of the in rates timing of expectations. the of slightly quarter, remains great commodities our quarter strategic long-term third or we inflation primary as through maintain the we the had have moderating the originally the this as approach. and our expected allocation, was

While opening loaded. year. our of pipeline now schedule. our a it's be including past openings We expect new And maintain years, has store expectation we distributed will heavily the over back-end several going much balanced XXXX XXXX, been the throughout more will forward, that evenly openings more

stores so to ensure dividend that we arise deliberate strong also will our when generate that continue approach have they profits.Additionally, to those pursue will we a in grow invest and to growth. acquisitions We and continue existing can continue franchise to opportunities

directed shares repurchase toward appropriate. cash that, will the Beyond excess of be as

will we All investors. repurchases and capital shareholder through combination done lens made and of our continue allow dividends deliver capital our our robust are consistently allocation of returns now have the strong financial will throughout growth update. the as of believe history.And provide Michael returns the to to through returning decisions creating shareholder that for We organic us

Thanks, Chris.

per impacted quarter weekly detail represented a and stores or increase by in average store driven unit these dollars weekly revenue week of year. prior volume these X.X% the mentioned, for $XX,XXX of adjustments and $XXX grew share. in diluted growth the To-Go sales. million, by on nearly was EPS Restaurant grew and the while moment.As approximately X.X% X.X% For of several $XXX,XXX in will significantly quarter a in sales adjustments in more averaged third growth. were both our total quarter the XXXX, earnings to margin XX.X% third primarily provide I X.X% XX.X% $X.XX current

had the September third forward.For increase growth there and weekly opportunity periods, quarter. average average in sales traffic sales respectively. an and strong We a business X.X% and sales to-go comparable this check. consecutive growth our into in XX.X%, have and X.X% is By believe fourth X.X%, year-over-year going for two upon quarter, grew quarters driven of And to have and August our now July, X.X% remained sales increased further build trends traffic X.X% comparable month, by

This sales growth, restaurant margin we sales offset decreased inflation our for costs to from With as well gift million were percentage end to the and the of of last for commodity inflation to includes commodity X%. basis and increased due quarter $XX,XXX overall general QX insurance $X.X full sales for year range of The percentage XX million year is adjustment as to XX X.X% third were the third traffic adjustments a weeks guidance full For to over the driven our the approximately X% continue sales last an as X.X% $XXX,XXX, points store by X.X% quarter quarter. the basis this $X.X benefit margin be basket same-store primarily average year last at of than QX, liability total decline XX% impact this was margin quarter three dollars card of to points the percentage better weekly point of loss X.X% reserves expect in year basis the and of beverage breakage week, four per declining to was from basis increase.Restaurant total higher approximately year point a year.Food impact year the by XX.X%. of XX approximately in third XX.X% our over a to a increase. as first as which check

inflation claims we and are points increased and dollars Labor growth in store next XX benefited beef to inflation ahead sales the Looking XX% insurance primary to XXXX.Labor to X.X%. the million of favorable workers' related as third X.X% growth hours quarter with of impact to driver. to compared percentage primarily projecting X.X%, wage the group basis week X% per Labor of a total of due and other X% of commodity increased of comp. to $X.X year, experience from labor as

in between revenue. approximately year change general aforementioned that is credit expense reserve labor at inflation additional from current wage guidance an and XX point liability negative last to million for of $X.X towards labor other $X.X with Included These adjustments representing other remains to include upcoming impact than insurance. XXXX inflation of for basis approximately XXXX, which of forecasting the XX.X% million midpoint year adjustments of a range.For and full Our of year.Moving were this we quarterly point our grew costs of and of are impact unchanged the operating X% includes was below credit and restaurant came the and X% the in $X.X by X% Other The points Partner X%, XXXX dollars lapping X.X% margin, year-over-year last year-over-year with at X% third state-mandated wage a Managing continuing million trends increase quarter G&A year's increase. in related XX.X% to year-over-year XXXX. to Conference. of the higher sales, basis increases, the XX

of our full quarter initial rate ended more cash $XX was which effective the tax now we full flow, Our expenditures, between of million we in are million and for with opening will first require the top than on this in to XXXX. expenditure construction to approximately expenditures restaurants to activity the year raising previously $XXX the expect in accelerate a quarter income $XX tax of capital year XX.X%, than new of rate capital payments openings We quarter of of And XXXX the XX operations million.As XXXX time, offset flow restaurants cash. fourth full income XXXX. fourth regards during allows the expect approximately of this $XXX and of tax is increase was mentioned, of This to the quarter Chris XX% a and by we the XX%.With XXXX approximately our from million higher $XX high planned $XX level of At of open million, capital forecast now XXXX. XXXX year half for was million XX share us store repurchases. XX%. third dividend rate Cash guidance timing

XX-week a capital are year be we for expenditure a reminder, Additionally, pipeline XXXX million initial million. This will a of XXXX establishing a forward.Finally, and as guidance between at our going amount $XXX us. balanced $XXX opening continuation contemplates

by As to that X%.Now benefit weeks. our additional such, week versus the year share growth will I the fourth quarter earnings final have the XX for estimate per of turn Jerry full XXXX XX could weeks call over XXXX We will normal back comments. approximately

the for This to we is concludes our future.That work to it's Whether Roadies with culture or all named proud line the support Roadhouse's announce to to makes be additional is one that recognition remarks. to to in great at am prepared to for integrity we none. dine. fund Michael. center, place Thanks, Roadhouse America's second starters. This I such and job our Texas workplace testament partnership, diversity recognition that Operator, passion, by open a following Texas partner questions. of restaurants categories: our people came and as greatest a our workplaces for recently the award were build very I'm women, in and legendary Newsweek. proud first continue please a

Thank you. Instructions). (Operator

comes RBC Your line of with Capital Carril the first Chris from question Markets.

the for looks seeing outlook, to specifically X% XXXX. on XXXX it right commodity Can Maybe is currently outlook. inflation running inflation the what's what like levels? for driving now there? question below on My thanks specifically as bit the initial is you're more expand And X% those a outlook even you

being it's Yes, deflationary. the Chris, Michael. the is inflation mentioned, XXXX beef I for really, basket to pressured mean rest is I all Thanks the flat the of and for question. by as

So, inflation beef expected force of the our driving year. next is

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

and and in about It's environment be digits peers past, XXXX. it environment. inflation, will wage of people consumer pricing cautious you've at kind on the proposition how you've be at thinking your about as pricing. out bag of Thanks. the about But Wanted you're in there. remains thoughts A mixed noted, looking talked versus a which, this lot your into relative get value to mid-single looking

pricing governors how primary you're the are thinking about into what type So, environment? about this going of

and earlier. out And I fact are wage core we're we talk those -- to that going the was do pressures and in that really to are jump mitigating. on Chris. David, there, increase about just want focus that X.X% have this it's we talked about the carrying then I do

mindful beef of as be we'll there so, this to But we And that that. consider also inflation well. have is

wages. focus So, And the up future. been that's increases typically have our price on focused likely how keeping we'll though the core, in with

that thumb. and of you number rule inefficiencies of in hours of of of long-term happened efficiencies labor it's that but And traffic of in Got it. gear COVID, beyond another rule of out coming is the workers that lot is wondering that and growth efficiency think I'm at been that hour find terms amount coming Or whatnot. the terms could can find getting of have past, you the maybe in the rule worker growth. now with per there's of of good better if companies so, and XX% can a be been not thumb Do into this about has labor thumb year? that, you times been a like

in out a think it's next the their separately you with, in we that's also looking before productivity next think there. maybe that David, have. algorithm or see people staffing improves growing said, this you may at year. return shortage now our that growth. into be referred year, XX% feel traffic to situation never that a and may normal coming we doesn't opportunity, are grow see at I to in efficiencies Yes, will labor going we we something this longer, with staying good pandemic, to there's we out I year, than And it Michael. And operating Obviously, into been that labor to hours traffic that going We've level an level. as of maybe the very get a of that coming some jobs

And and happens. so, I what we have to optimistic. see wait just we're But think

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

a second then follow-up quick one Just and one.

the is point? given there? this too do anything Or premiums On you of it things, early still some side the at of have contracted beef out

locked huge into have certainly to not also at fixed our far going very in a We there. surprisingly, locked for this Andy, some to as The to of the we not get is out our have making it's while as nervous contracts, get a too have beef purchasing We not supply XXXX, But our where price of sure job I'm do up, we important the which we far some. appropriate specifics Michael. packers great amount. department think have done lock there supply. do point. lot has But reasons. into competitive a prices

terms in in just obviously, guys XXXX then other and the really thinking things well drivers some do and And than the of day out. it. Got of about you day

On that the there is the And kind I there you you think out terms help through top table you is is traffic opportunity. can as kind tech something an of? restaurants? to out Or of it of is in mentioned turn, which or getting opportunity? to go faster remodel bump on pay, enough get Roadhouse line, still then of there a the drive more more really implementation

continue Andy, Jerry. those are to been a with and better think -- get our it. investments I to driving continue our we to the in factors has be to things revenue growth able that continuing as pickup expansions current focus all at our ease buildings of and it's factor Bump-outs, different in look business To-Go on and continued Yes, existing on to at, side. we of always

to component hustling for of I the sales, getting of think kind a that's table speed to just thank But stand and stuff, key you. factors keep line all us. said, So, our host turns you drive like that and those and top getting all of at got those we

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

questions. had I two

it -- know talked was a but and about margins that gets in just first I this to question of lot, something getting back just The range. XX%

costs last AUVs I get similar I up on you're maybe thinking a four about think guess, -- And development margin want just think that. percentage? lower XX%, your I to you wondering return? your are Or I'm you target returns to the I Do mean, over you a do do that you could were margins. years, XX%. target would how

Greg, it's right. are you Yes, Michael.

-- have served. costs up both number have investment our sales on pricing Our standpoint of a gone and as guests from

mid-teen a even today.So, that we good new and sake target margins great opening So, where with wouldn't and still we to just of with openings on high our opening us. make goal return about really where looking very our are at We and higher opening when we're and achieving costs do pipeline. continue the want IRR we beating stores, investment profitability generate investment is them. feel for restaurants on doing We sure they're be the to for volumes and

how of some is And back you view the the important traction XXXX-plus component important XX side, to getting goal over an the on margin the of next story? XX guys as it on that to to Do show that months?

talking but think direction. help move helps We if and place, from on bit continue need that absolutely, our will Yes. that and a I have protect us we in out, we beef in bit. line piece continue as we huge of for that the to top turns been in that be little that And it mean target move of to those controllables we've all about other a direction. sales that of I beef sales and a the will little side,

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

clarification the a in question. quick Just

running increases? and But QX with in you the with pricing I QX. on in additional you're would roughly no said price QX up, First pricing what think menu X.X% clarification, be

X.X%. it's be Yes, QX QX and X.X%. would QX Jeff, would be Michael.

or of that shared Okay. main you some question, thoughts maybe is pulls with casual That's then call, you sort helpful. and of on pushes the picture were trade bigger terms question the us average your your Texas the down from check consumer seeing last of and what is dining on trading some you down in the the And terms better here dining management concepts potentially casual thinking check of in at Roadhouse either concept, backdrop? updated other customers on from demand a concepts seen Roadhouse to What consumer but price other into have at value the Roadhouse?

very Yes. I'd we're you, and the and traffic the our sales overall. happy tell with sales

well our on and very we we're we're like that to deliver positioned service feel fight. and we food So, that hospitality if winning continue promise our

great. tastes food Our

us from that hasn't is technically, we think rest I look food you industry. the of telling the the consumer slowed It want can from what traffic. for they us our see our at if down

that just more to what believe telling we be doing the to them able need serve So, doing. long. to of we're keep consumer all We week us is

people trade hospitality news I a us, that And so that we and that's for from we and people we the down, trade -- believe side have have exciting up that of business. lot good actually of that

So, we're to very maintain continue sales. well to those positioned

probably point mix, little in Jeff, of bit the the in it's alcohol percentage about will that QX negative QX. from through QX think a actually of a Michael. end had [menu] of to From a X.X% Most majority standpoint, four the saw with we that improvement probably We year. be category, of QX. negative from it is sequential the us still coming versus of about mix

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

flow-through level I will the probably October about and a I seems like guys this is also price impact has guess, And here, and onetime costs historic the traffic, that quarter, but provide in traffic the understand some back margin a level. years I prior on profitability. lower to that get than current between to question think really My trade-off benefit been minimal you were there rate, not that but at it's the have increase, took

the has frustrating if would it flow-through been growth more to seem appear traffic who be low of for also some Jerry, working raising or sacrificing would a prices operators wondering, consideration debate kind be or just internally rate less. So, for for I'm harder there because

business I a to is that to more beef of we to key a the I question. point, little the do a as great careful. internally want about We that. a us line that's The us will Again, component. at seen be always do be direction. deflation some someday mean expensive I top protection help in maybe do concept think believe can Yes. It's think is our we but can I value profitability for fight conversation holders, mind we side, we a always and our more of it a to conversation overall, depth be be as is do as But how we more effective by that how efficient, on on always it our in right segment. have of the our employees, guests but often. want

from next question Your Jeff Bernstein comes the Barclays. line with of

Pratik is Jeff. for on This

you to your about wanted to in of in the you Just would portfolio would the for brand? there Bubba's. future the not is And future? pivot status internally how concept growth ever growth? how the M&A Bubba's the perhaps Is Jerry, assess And you about if current accelerating? consider second think confidence do

excited future, Well, second do We and brand. Bubba's view we're absolutely as definitely about we it committed its are our growth. to

a and lot a the the we're done XX work in I've on people excited the leadership. service environment to put our head very just to leader. around concept operators. We team. We're last the added food first and doing the of partner regional months right the supporting of the have We about and what that

and So, are has we're The the the we that revenue to turn to we the are to know continuing It for, looking committed show want. is definitely it that Bubba's. producing sales ability we through. profit

time, brands, what focused Bubba's question see our can't really the the about other this we'll and concept.And on we're at happens I very in yes, we're excited the answer future. So

much. Thanks color. the appreciate I

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

of development -- year. But encouraging about next see Are costs, certainly you growth seeing like I unit It's give build you're in you factors guess things us talk was hoping of easing on in question permitting what I a the in a broader and some my those an you bit to is update terms chain more well? as delays into and seeing? the environment. bit accelerate supply could pipeline could little you

it. taken stabilize, of that, out kind and overall. it continuing it chain From plan learned supply I to to our the is the timelines say, to part we've spread takes to would open permitting, The the Yes. us adjusted how of we And through and jammed of versus that, where up with effort restaurants end. get and the the throughout the all year in to kind it's helps can year a significant beginning more

and look very yes, if we've around been overall, to real exciting. got XXXX, beyond and XXXX and right pipeline a over we're doing now books some into there's you on that. about what continuing we it's at And we've if So planning for -- for we're XX-month we're a period, got the strong excited But that. look what

the Joshua Your next line question comes Stephens. of from with Long

Just Is relatively as into flows terms otherwise the your else brand? and strong of that normalize Jerry, when is side? that the could ebbs thinking to Is But you it just that or what you think environment, seeing? of what can supply share points hear normalize equipment? you that it's for talk rather. permitting about years still pipeline is about that out development anything some the a to unit to the -- nice friction continue development I side drives you imagine on chain are out starting in the about of the going unit

now to get up the going really the get done. know get lined little to jobs good time Well, I trade set again, mean, -- projects done out I just bit we and working trades line the I last And good. better maybe of think think And line we're the The of a a years. the up. job to doing couple what's in time we've happened of

work tighter got little ice But inventory machines, some about. is that, of concerned things So, parts, accomplish There a bit equipment that. a I of with few tight all to a things our comfortable. lot like the some very I can [mill a openings. of of feel are bit the on there. that furniture, little get we little be bigger Even think our sometimes enough now, many which works], this we've a right get

I get working these think have we've we maybe equipment get got and more level materials we some obviously have buildings. make the sure make We've through operators the trades a buy working to But parts, challenges to whatever we existing try than to or and and execute our even with at it that. we stores job repair. on we but maintain equipment been So, I their vendor whatever hard have open and to service said, sure the do can businesses partners every little definitely to need. seen sometimes really we the do options, to to and our open the we're

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

lot do we time spent about have two few And -- but margins, a a talking just of know Great. I follow-ups. I

with I going to a To-Go The structure your has lock upward has dine-in. part anything first department stable that the mean little your in there labor of benefits terms can to -- know for structure margin And shifting back been just the But about hours in dine-in. color really just looks It extent mix the pressure hours talk stable case, of of from off-premise you doing on commodities I is might then you second well been think forward prices. was give typically wasn't more kind like more to what what could pretty is, a maybe in like year-over-year. bit labor that in. that talk what or on of the Could overall? to you harder mix is locking a margin beef mentioned purchasing the is the basket?And or of Were other To-Go question your versus some you little about was?

can Michael, touch it's on I those. Sarah,

buying beef, but when go a little maybe what is when a from standpoint, buying. it's be to lock formula heavier bit purchasing a basis everything. knowing certainly, the it when weeks into largely to It's knowing So in on to and around and to

To-Go, pulse and there But making and goes in we vendors, pays when those their on the time Roadhouse fact through busy it the that different give all good and the as now sure far then really a to is COVID To-Go having forward.And there higher. long-term The we them to slightly a Texas have relationships is off different in being the just pre-COVID today's look percentage going and and with that partners dining with first easiest that comes take it basket that Just for expenses what's the look the or treating I the higher sure and allocate with margin them way are restaurant our versus foremost. volumes, it's answers. everything on them going room go to much can a items with margins that higher are can and fingers if knowledge right, the what about to levels we and they best of have making the busy at you as need I doing areas can how is dine-in no-brainer as supply they they of dollars, at margin with

a a To-Go it margin So, benefit to volumes. is these higher from percent have

different leverage You're getting in areas.

see over guests. those we as shifting to that staffed our labor and the to more dining right where component are You traffic the is that to a of back serve into you room, last be year there have

what serve grow labor to maybe to dine-in, into more more plays we so you would as go that may guests. labor maybe don't as also need forward.If look than dine-in much like you And going

things is as the different the be are they bit every on as that growth a impact and have those opportunities -- what to we again, far them. restaurant of at little and So, look we going

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

through you early on to as comments you for restaurant it this the could at comment here, all Recognizing those if may curious gone relative some XXXX but least year. be shared directionally XXXX. I at margins of year we've Great. know

So thinking relative sort level curious piece COGS set that to or about Anything specifically XXXX help this the even us at to of if point? any comments there XXXX. in

is where leverage opportunity -- to some for at inflationary overall pricing margin might a things you of play, dollar if And where answer. that's guidance's, what ranges Dennis, the assumption fall. Again, type of the side level in one going inflationary along we with an restaurant the continuing There's I what what already our out the back environment, math to shall the on positive to right whether we macro in of every see. direction. think grow, fully it's those moving lot going of But take pricing or a hard and want It's have a ranges percent we take. for land certainly, but Michael. play might we moderate would we to line what in in percent is and

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

to just Maybe also. Yes. follow-up on that

any think you have Or G&A think don't that next any line? in of add about but you probably high-level -- should year, As inflation part? comments that? to special normal kind a on just budget Any yet, will projects kind we expect you of that

Yes, Brian, Michael. it's

our to that That's is lesser grow year. budgets plan a our continuation it's at think But than are the a offsetting to those rate wanting You -- revenue growing. that's process do of those continue right. I still for go a through dollars of G&A G&A we normal

And dramatic continue quite seen come of that leverage G&A to XXXX and change. as bit, get little as so, We've well. percentage continue G&A obviously a revenue, not that a on into a bit you a percent down that of could maybe

I -- that you Okay. characterize this kind do Great. The much visibility you demand especially on, side? commodity how But the out is out. next how maybe prior visibility the inflation beef have how would plays you to laid and your in market as characterize you wildcard How conservative just years? beef for you think outlook stage? the would year, the that relative realize at of

things is that be. giving where are a And there will but you're on? of -- experts in. Yes. what conservative I are lot mean our I us a best of can look look beef and move thoughts think think at puts we're on going it, again, retail the demand comes their things taking a takes where right, road certainly, realistic middle I at

very is it's clear the think just down, where we'll much goes. that supply see moving demand I

a So, given we've time. can around, lot realistic but there that at this move thoughts is you best our

line Your with next line Mr. Tower, now Jon Citi. from open. of your Tower question is comes the

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

performance. to Just the back sales

mentioned up picked then obviously they but the quarter, moderated through the comps they've and You strong pretty nicely October. in

there glean you what's or behavior might shed improvement? to Just anything or that taking up? changes outside curious, Any light data that be regional from weekend, in consumer your any on strength, weekday could is driving

the I of for Brian, the newer stores, it Michael. region look it's the third look Yes, at when been October, of high-volume it is very within data it through by in while. hours I a as day has quarter very older week, country, the and you consistent It whether average was at tell then consistent, I'll stores, stores. day, the

now. good seeing that So trends about the very us we're that makes right feel

what have that. we continue for to to do guests we and So, do, the continued reward us

much quantifiable be I Okay. transaction? technology. share? to or follow-up, I And then if Roadie throughput typical the pay how And in turns table just you particular. quick a wanted in any trimming time to on And I is that that have able guess off seen could, ask impact you about might

it's Well, hard that there yes, I We of will you we absolutely or it think amount, I to exact system-wide pay. when right a people being tell is mean, it's believe believe the we're big they're consumer. that win -- going. some it's two that, table, quicker to way for option a on ready I or the the quantify a whether minute that

believe from not from very the I us. but for consumer. our that only and been been it's good feedback, It's restaurants positive servers, our So,

yes, us. believe make it I faster. really for So us win do that does was a big

All it pass right. I'll along.

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

pricing you exactly think quarter was? I the number Can price the one. sorted quick clarify I waterfall what the out, one in but or Just third had

Sure.

third We of the quarter have XXXX. in X.X%

then there way pricing And is might to into price that around guardrails kind thinking earliest through? coming we of about a the additional see some XXXX, put with

early take part quarter. second the of the fourth of typically part in and We the quarter pricing early

in have with we and we years past stay would will So, imagine stay schedule. I the that true to done what

of Baird. next line Your comes with North from question Drew : the

follow-up a But week. XXXX hold thinking asked Thank I to in is a the you're year? positive outlook. are had to the margin the often basis you macro needed you recognize year-over-year guess, I potential the But earlier the know on where on pricing. various on you may traffic margins dollars you're inflation mentioned per expand breakeven the that or how the reach specifically that uncertainty scenario to perspective about that thinking for margin level? traffic on ranges. level positive in that a focused on and was on land you one scenario percentage margin the there question I related And growing in macro about next I

versus need because, is unfortunately growing pricing very -- that to moving the Drew, tough answer one margins really The of again, just on it's it's are margins. you parts. level can't and too grow much of a there's many traffic that Michael. mean, level I you how

traffic, restaurant -- always show a flow through, traffic So helps, we expansion certainly, into you with margin out guidance in take I middle-of-the-road everything with to whatever play lot. additional pricing, on think along XXXX. a basis percentage I you mass -- pricing else, should pricing but the don't the plays lead modest modest think along need should

Okay. That's one me. And more then from helpful.

that beyond, level that several maintain do of regrowth and you higher openings up for X% and moderate time. out a opportunity to looking of XXXX be I'm we to expectation just that? years? over versus should push in how growth for openings higher the thinking Just kind opportunity the frame Or see to gross that about the number trying next the range to to rate push XX store

that. for you Thank Yes.

on We right are focused for the to going number stay building us.

the Roadhouse XXs, to at But move the well execution only for I but two the we target for we of and about high for feel the very that operators, just our efficiently guests in target that Bubba's beginning. XXs very think to do that can same and we the yes, coming are continue for true works that number good pipeline. we stay on We'll forward. us, two the that as low concepts concepts and that not

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

to bit mix. I more focus of wanted little a issue the on

to bit October? comp the at could you you and progress that or of in the from I based flattish Is mix way little your be pricing on it second mix It a in right seems that me reported on third reported almost the positive October. quarter. to to look think

earlier -- pricing we're fourth to it than X.X% our so -- while year pricing comp the quarter, with occurred going year. three the have action for -- this pricing last the did our weeks With

in X.X% weeks last had the weeks in and quarter, of XX first we'll pricing of X.X% quarter. pricing the the have we the So, three

So, while direction, several you wasn't seeing different than that the in the the mix probably still it were what is moving right months. last

Just Very context good. in peers you pricing on steakhouse little this category was how follow-up bit feedback a or their on to already the reacted just having prices potentially taken the your texture up? a either question reacting competitive on And your competitors took any the of

can't have relative conversations I have our actually we tell priced where our done have to the it. business, It's we months how our before the pricing. necessarily of reaction We I competitors several stores peers. certainly take process doing to of go pricing our what a mean, you to our are some you we're Jim, in through. evaluate and health

that So, as I know. we take far when doing reaction those it. But don't things into account others that, we're to as

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

as to we the it underlying and XXX price points? basis extrapolate think the what Is trends want I To this about being year? you trends. October about on just clarify did from benefit it. earlier taken extent Just

I that's three I we that -- think weeks. of the mean benefit certainly, for more got pricing I mean,

a quarter. So rest on have instead of XX pricing of -- having for point there was the benefit so our overall where we'll X.X% the basis quarter, the

looks we there in the quarter year-over-year, easiest quarter consider anything we about as it lap with compared like in And lap? the is Okay. the terms think should the cadence through December of fourth

in mean down. point slow that the did there December We impacted was that caused U.S. things to period year our year, I cold much talk Yes. to out. late that of weather about nothing last and much that of last too December really

Christmas opportunity of could a Saturday, Sunday but is from to be what a benefit December; depending an a Sunday, of also And from it maybe bit that So, little you at year, benefit, the is shouldn't upon coming could the us. huge that benefit year moving happens there in positive. a a be Monday, for this of get slight end

leverage? bit base opportunity Okay. expansion else case, on sounds more Where inflation. X% restaurant about for follow-up X% XXXX. in the Great. XXXX. Can and another takes the little expectation the like commodity puts all seeing the just just a are to equal, just margin across for the margin then And P&L, you It the you for talk is

Again, dramatically. to X% don't talk think it to goes and grow the I when other as Maybe guiding you and inflation the -- about in level pricing wage opportunity like menu and pricing hours in always, you of lot those and an some you again, from as get where lot it get can are I there's costs, some well. a service-based that so X% leverage those of and some there operating, have to we seems think benefit plateaued, costs environment maybe a of and have labor there then

well. little leverage give So, labor then a to rent bit of always seems as us and

factor. that X sales a So pretty little think I is of bit the areas, in of much all cost

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

there bit your this I and of for Is leverage My But little catch-up Should And think, and an you a focus question going your incremental traffic labor the more on, have you're earlier year over to growing up, the people on labor more more should a maybe has to over leverage labor. need the stores, get as margins. on think being of kind well operating that number one we a kind of really week caught traffic can builds and forward? about feel as your efficiencies the levels approach is driving performance growing forward. and years in strong. that staffing you even two where you last of still bit than so but labor have point more going little leverage, get of less labor a been the like we sales about going

Yes.

there's that turnover Michael levels. couple down. is this Chris. think addressed And a has -- our pre-pandemic think It's think opportunity that I there. I that to of do times of is an we kind

that. We're feel And we about good staffing up. so,

get there. and should able levels, We we right be have opportunity staff the some to

and on X%, the me that sorry, that call maybe guidance little environment strong of it marry try the I'm mean, does to even pretty about Okay. would with your I look macro macro but seems -- as for thinking this uncertain kind of kind a And what's late, it at inflation, background of your I kind -- imply then imply XXXX, to guidance you're backdrop a the Is presenting just that I -- the macro how you're XXXX. in I X% that bit to from?

again. Chris is This

experience, missed anything basically, calling rather Jerry a think We spoke comments, not in -- this to spite consumer continue. are come people been that expecting our benign seeing future. coming But that may Michael, And like be and of have not his in that. you recession. for has situation. something just has still them, in front enjoyed the you to else. food have the and our out We're we're so whatever I and we're that yes, in of a And would may out

Yes, Jake, this is Michael.

of mandated have we increases. months. So, to lap throughout XX wage do we that mind, occurred full those did that increases state say any have keep But XXXX, X% a is in for also that

you've So, in things next year. you XXXX that do feel from the in done year an this impact

you raises feel So that for maybe decline sequential rate continues growth today wage still of do XX giving you're next the but the rates, in to months?

we over one period investors the a not? trend. of the kind impact figure But first versus my obviously, that to think first quarter longer if think about of as XXXX. there's you it is it on But answered what view question, what than in were. two about and more half time lapping of early specifically terms of has guess very some are XXXX year trying Okay. going XXXX looking first that lapping I do And out an and in lower of expected trends could last quarter sorry early lapping first against. underlying I'm by was compare in much was was And as of how really compares be you been the for or boosted the you're as difficult strong, Omicron. kind But early because XXXX, view concern a I just

a guests mean serve I going going continuing of answer. our one to fully have the They're is hard that mindset more again, Jake, to to operators the take guests to here, see that to to are we well be they're happens. with, Yes, and they go staffed. mindset product we and serve what that's everything into will need do continue the to any year And to we happens will we can as grow. their going

that store getting about from opening quarter, number in the a of weeks and fourth we're And stores opening are stores then we in talked the quarter. first too the

This like I concludes turn our Q&A Morgan. to session Jerry for today. call would to back the

your appreciate you evening. tonight. Thank us have great time for and joining all a We

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

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