Texas Roadhouse, Inc. Fourth Quarter 2011 Comparable Restaurant Sales Increased 5.6% at All Company Restaurant

Texas Roadhouse, Inc. (NasdaqGS: TXRH), today announced financial results for the 13 and 52 week periods ended December 27, 2011.

Results for the fourth quarter included:

• Comparable restaurant sales increased 5.6% at all company restaurants and 5.7% at all franchise restaurants;


• Ten company restaurants opened;


• Restaurant margins, as a percentage of restaurant sales, decreased 25 basis points to 16.8%;


• Diluted earnings per share increased 28% to $0.17 from $0.14 in the prior year period;


• The Company repurchased 968,700 shares of its common stock for a total purchase price of $12.7 million.

Results for the full year included:

• Comparable restaurant sales increased 4.7% at all company restaurants and 4.3% at all franchise restaurants;


• 20 company restaurants and one international franchise restaurant opened;


• Restaurant margins, as a percentage of restaurant sales, decreased 45 basis points to 18.1%;


• Diluted earnings per share increased 11% to $0.88 from $0.80 in the prior year;


• The Company repurchased 3,972,100 shares of its common stock for a total purchase price of $59.1 million.

Kent Taylor, Chief Executive Officer of Texas Roadhouse, commented, “We are very pleased with our 2011 results and are particularly encouraged that our strong sales trends were driven largely by increased traffic. Despite a challenging consumer environment and continued commodity cost pressures, we reported double-digit revenue and earnings per share growth in 2011, while our strong balance sheet and healthy cash flows enabled us to return $76 million of excess capital to shareholders through share repurchases and quarterly dividend payments.”

Taylor concluded, “For 2012, we have assembled a healthy pipeline of new locations and are on track to open 25 company restaurants. Although we expect to face short-term cost pressures, we remain excited by the ongoing momentum in our top-line and will continue to focus on our long-term brand positioning and growth potential.”

Outlook for 2012

The Company reported that comparable restaurant sales for the first seven weeks of fiscal 2012 increased approximately 6.7% compared to the prior year period. Additionally, the Company announced that it implemented a menu price increase of approximately 2.2% across its restaurants in late January.

The Company estimates that its 2012 diluted earnings per share growth will be up approximately 5% compared to 2011. This range is based, in part, on the following assumptions:

• Comparable restaurant sales growth of 4% to 5%;


• 25 company restaurant openings;


• Food cost inflation of approximately 8%;


• An income tax rate of 32.5% to 33.0%, an increase of 300 to 350 basis points from 2011 and a 5% impact on diluted earnings per share growth, due to the expiration of certain federal tax credits at the end of 2011; and


• Total capital expenditures of $80.0 to $85.0 million.

Stock Repurchase Authorization

The Company announced today that on February 16, 2012 its Board of Directors approved a stock repurchase program under which it authorized the Company to repurchase up to $100.0 million of its common stock. Any repurchases will be made through open market transactions. The Board of Directors cancelled the previous stock repurchase program, which had no expiration date and $40.9 million remaining as of December 27, 2011.

Cash Dividend Payment

On February 16, 2012, the Company’s Board of Directors authorized the payment of a cash dividend of $0.09 per share of common stock. This payment will be distributed on March 30, 2012 to shareholders of record at the close of business on March 14, 2012 and represents an increase from the cash dividend of $0.08 per share of common stock declared each quarter in 2011.

About the Company

Texas Roadhouse is a casual dining concept that first opened in 1993 and today operates over 360 restaurants system-wide in 47 states and one foreign country.