What is in this article?:
- Texas Roadhouse: Beef costs to remain a concern
- Sales, profits rise amid challenges
Officials expect 2013 to be another year of mid-single-digit inflation for Texas Roadhouse’s commodity costs.
Sales, profits rise amid challenges
For the Dec. 25, 2012-ended fourth quarter, Texas Roadhouse’s net income rose 13 percent to $13.9 million, or 19 cents per share, compared with $12.3 million, or 17 cents per share, a year earlier.
Revenue climbed 12 percent to $309.5 million, reflecting same-store sales gains of 4.4 percent at company-owned locations and 4.5 percent at franchised restaurants.
Full-year net income rose 11 percent to $71.2 million, or $1 per share, compared with $64 million, or 88 cents per share, a year earlier.
Revenue increased 14 percent in fiscal 2012, powered by same-store sales increases of 4.7 percent at company-owned units and 5.3 percent at franchised locations, as well as the opening of 25 corporate restaurants and two franchise locations.
Company officials noted that same-store sales are expected to remain positive in 2013. Year-to-date in 2013, same-store sales have increased 2.2 percent, which comprises a dip in guest traffic of slightly more than 1 percent. Traffic and sales had been “choppy,” Cooper said, with a strong January and sluggish February due to inclement weather.
Texas Roadhouse also plans to open an additional 28 corporate restaurants in 2013 while investing in international growth and sales-driving upgrades to its restaurants.
The company has remodeled about 100 units to add about 10–12 percent more seating capacity, as well as to fit new kitchens that speed up throughput and host stands that seat guests faster. Taylor said the company has planned another 30 remodels for 2013.
“We can do a couple hundred more, as we feel the sales justify doing so,” Taylor added.
Also in the fourth quarter, Texas Roadhouse spent $4.3 million to acquire two locations in Illinois that had been franchised.
Cooper said the brand does not plan any further franchise acquisitions in 2013, but it would remain open to the move down the road as a way to spend its free cash flow beneficially.
“We will look for opportunities where we can negotiate deals with franchisees,” he said. “One, we think it’s a good deployment of excess capital when we can make what we feel like are good overall returns on it. Plus, sometimes it can help us from the people and growth side of things as well.”
As of the end of the fourth quarter, Texas Roadhouse operated or franchised more than 390 restaurants in 47 states and two foreign countries.
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