Texas Roadhouse, Inc. announced financial results for the 13- and 52-week periods ended December 27, 2016.
Results for the fourth quarter included the following highlights:
- Comparable restaurant sales growth of 1.2 percent at company restaurants, including a negative impact of approximately 0.5 percent related to the calendar shift of the Christmas holiday, and 2 percent at domestic franchise restaurants.
- Restaurant margin, as a percentage of restaurant sales, decreased 44 basis points to 17.1 percent. Wage rate inflation and higher costs associated with payroll taxes, insurance reserve adjustments and gift card fees more than offset the benefit of lower food costs.
- Restaurant margin dollars increased 4 percent to $82.4 million from $79.2 million in the prior year.
- Nine company-owned restaurants were opened, including four Bubba’s 33 restaurants.
Results for the full year included the following highlights:
- Comparable restaurant sales growth of 3.5 percent at company restaurants and 3.3 percent at domestic franchise restaurants.
- Restaurant margin, as a percentage of restaurant sales, increased 134 basis points to 18.7 percent. The benefit of lower food costs more than offset the impact of higher wage rate inflation.
- Restaurant margin dollars increased 18.7 percent to $368.9 million from $310.8 million in the prior year.
- 30 company-owned restaurants were opened, including nine Bubba’s 33 restaurants.
- The company repurchased 114,700 shares of our common stock for $4.1 million.
Kent Taylor, chief executive officer of Texas Roadhouse, Inc., says, "We are pleased to deliver another strong year of results including a 19 percent increase in diluted earnings per share driven by double-digit revenue growth and restaurant margin expansion. We also delivered impressive comparable restaurant sales growth during 2016 with an increase of 3.5 percent, and we extended our streak of consecutive quarters of comparable restaurant sales growth to 28 with our fourth quarter increase. Lastly, our strong balance sheet and healthy cash flows allowed us to return $56.2 million of excess capital to shareholders through quarterly dividend payments and share repurchases during 2016."
Taylor adds, "In 2017, we expect to open approximately 30 company restaurants and seven franchise restaurants this year, which is over 7 percent growth system-wide. Going forward, the strength of our brand continues to be our people and our operational focus on delivering legendary food and legendary service."
Effective December 28, 2016, the company acquired four franchise restaurants in Florida and Georgia for an aggregate purchase price of $16.8 million. The purchase price was paid in cash. Going forward, two of the restaurants will be wholly owned, while two will be majority-owned. The acquisition did not have a net revenue or accretive impact in 2016 as it occurred on the first day of our 2017 fiscal year.
Comparable restaurant sales at company restaurants for the first 55 days of our first quarter of fiscal 2017 increased approximately 1.5 percent compared to the prior year period.