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Texas Roadhouse, Inc. Announces Third Quarter 2008 Results |
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Comparable restaurant sales decreased 3.2% at company restaurants and 4.5% at franchise restaurants |
Results for the quarter:
• Comparable restaurant sales decreased 3.2% at company restaurants and 4.5% at franchise restaurants,
• Seven company restaurants and one franchise restaurant opened,
• Nine restaurants were acquired from franchisees,
• Restaurant operating costs, as a percentage of restaurant sales, increased 281 basis points,
• The Company repurchased 4,080,707 shares of its Class A common stock for a total purchase price of $37.4 million, and
• Diluted earnings per share decreased 14% to $0.12 from $0.14 in the prior year period.
Results year-to-date:
• Comparable restaurant sales decreased 1.5% at company restaurants and 3.1% at franchise restaurants,
• 23 company restaurants and one franchise restaurant opened while one company restaurant closed,
• Twelve restaurants were acquired from franchisees,
• Restaurant operating costs, as a percentage of restaurant sales, increased 153 basis points,
• The Company repurchased 5,704,907 shares of its Class A common stock for a total purchase price of $52.5 million. As of the end of the third quarter, $22.5 million worth of Class A common stock remains authorized for repurchase, and
• Diluted earnings per share increased 2% to $0.43 from $0.42 in the prior year period.
G.J. Hart, President and Chief Executive Officer of Texas Roadhouse, commented, 'While the consumer environment remains challenging, we continue to make decisions that we believe are in the best interest of the business. From an operational perspective, that means a commitment to providing legendary food and legendary service without sacrificing the overall guest experience. In terms of finances, we will continue to manage risk and allocate capital to new restaurant development and franchise acquisitions, as well as returning capital to shareholders.'
Franchise Acquisitions
Effective July 23, 2008, the Company acquired nine franchise restaurants. The aggregate purchase price for the restaurants, all in Tennessee, was approximately $10.2 million. The purchase price was paid in cash, funded through borrowings under the Company's credit facility. On a 12-month basis, the acquisitions are expected to add approximately $31.0 million of net revenue and to have no significant accretive impact, excluding a $0.1 million after-tax, acquisition-related charge recorded during the third quarter of fiscal 2008.
Effective September 24, 2008, the first day of the Company's fourth fiscal quarter of 2008, the Company acquired one franchise restaurant in Florida for an aggregate purchase price of $1.6 million. The purchase price was paid in cash, funded through borrowings under the Company's credit facility.
Outlook for 2008
The Company reported that comparable restaurant sales for the first four weeks of the fourth quarter of fiscal 2008 decreased approximately 4.5% compared to the same period of the prior year.
The Company is currently estimating that diluted earnings per share for fiscal 2008 will be approximately flat with the $0.51 of diluted earnings per share in fiscal 2007. This includes an estimated $0.01 to $0.02 positive per share impact, or 2 to 4% of diluted earnings per share, resulting from the addition of the 53rd week in the fiscal year. As such, the fourth quarter of fiscal 2008 will contain 14 weeks versus 13 weeks in fiscal 2007.
This estimate is based, in part, on the following assumptions:
• New company-owned restaurant openings of 29,
• Comparable restaurant sales growth of negative 2.0% to negative 2.5%, and
• Restaurant operating costs increasing 150 to 175 basis points as compared to full year 2007.
Outlook for 2009
The Company also announced, while it has not finalized plans for 2009, it has taken action to reduce its Company-owned restaurant openings from 29 in 2008 to approximately 15 in 2009. In addition, the Company announced that, based on the current environment, its preliminary expectation is that 2009 diluted earnings per share will be approximately flat with 2008. Management will make further comments on its outlook for 2009 in conjunction with its fourth quarter earnings release in February.
Hart commented, 'Given the fact we are in unparalleled economic times, it is difficult for us to provide specific 2009 line item guidance at this time. We certainly remain optimistic about returning to better economic times and growing profits and earnings. In the interim, we remain focused on our allocation of capital and believe that moderating our new restaurant development plan, maximizing free cash flow and maintaining our conservative balance sheet are the right things to do for the long-term success of the Texas Roadhouse brand.'
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| Last: |
10.71 |
| Time: |
7/2/2009
4:00pm |
| Change: |
-0.52 |
| Opened: |
11.08 |
| Day: |
11.32 - 10.63 |
| Volume: | 489680
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