NASDAQ:TXRH Texas Roadhouse Q1 2024 Earnings Report $171.79 +5.05 (+3.03%) Closing price 05/2/2025 04:00 PM EasternExtended Trading$171.80 +0.02 (+0.01%) As of 06:07 AM Eastern Extended trading is trading that happens on electronic markets outside of regular trading hours. This is a fair market value extended hours price provided by Polygon.io. Learn more. Earnings HistoryForecast Texas Roadhouse EPS ResultsActual EPS$1.69Consensus EPS $1.65Beat/MissBeat by +$0.04One Year Ago EPS$1.28Texas Roadhouse Revenue ResultsActual Revenue$1.32 billionExpected Revenue$1.32 billionBeat/MissMissed by -$1.82 millionYoY Revenue Growth+12.50%Texas Roadhouse Announcement DetailsQuarterQ1 2024Date5/2/2024TimeAfter Market ClosesConference Call DateThursday, May 2, 2024Conference Call Time5:00PM ETUpcoming EarningsTexas Roadhouse's Q1 2025 earnings is scheduled for Thursday, May 8, 2025, with a conference call scheduled at 5:00 PM ET. Check back for transcripts, audio, and key financial metrics as they become available.Q1 2025 Earnings ReportConference Call ResourcesConference Call AudioConference Call TranscriptPress Release (8-K)Quarterly Report (10-Q)Earnings HistoryCompany ProfilePowered by Texas Roadhouse Q1 2024 Earnings Call TranscriptProvided by QuartrMay 2, 2024 ShareLink copied to clipboard.There are 18 speakers on the call. Operator00:00:00Good evening, and welcome to the Texas Roadhouse First 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. I would now like to introduce Michael Balen, Head of Investor Relations for Texas Roadhouse. Operator00:00:33You may begin your conference. Speaker 100:00:37Thank you, Brianna, and good evening. By now, you should have access to our earnings release for the Q1 ended March 26, 2024. It may also be found on our website at texasroadhouse.com in the Investors section. I would like to remind everyone that part of our discussion today will include forward looking statements. These statements are not guarantees of future performance and therefore undue reliance should not be placed upon them. Speaker 100:01:06We refer all of you to our earnings release and our recent filings with the SEC. These documents provide a more detailed discussion of the relevant factors that could cause actual results to differ materially from those forward looking statements. In addition, we may refer to non GAAP measures. If applicable, reconciliations of the non GAAP measures to the GAAP information can be found in our earnings release. On the call with me today is Jerry Morgan, Chief Executive Officer of Texas Roadhouse and Chris Monroe, our Chief Financial Officer. Speaker 100:01:43Following the prepared remarks, we will be available to answer your questions. In order to accommodate everyone that would like to ask a question, we kindly ask analysts to please limit yourself to one question. Now, I'd like to turn the call over to Jerry. Speaker 200:02:00Thanks, Michael, and good evening, everyone. There is no doubt that 2024 is off to a great start with 1st quarter revenue over $1,300,000,000 and same store sales growth of 8.4%. Our strong results continue to reflect our operators' commitment to the consistency and quality of the food, the hospitality they provide and our everyday value. The benefit of our long term approach to the business and our focus on always prioritizing the guest experience is evident in the record sales, margin dollars and net income for the Q1. While the Texas Roadhouse brand generated average weekly sales of over $163,000 in the Q1. Speaker 200:02:48I want to also highlight the progress our operators are making at Bubba's 33 and Jaggers. Bubba's 33 averaged over $120,000 in weekly sales during the Q1. With 4 locations scheduled to open this year and a growing pipeline for the coming years, we remain confident in the future for Bubba's 33. JAGGER's, our quick service brand, is also experiencing momentum and delivered nearly $68,000 in average weekly sales. We continue to expect a mix of company and franchise Jaggers over the coming years. Speaker 200:03:30And the 1st international franchise in South Korea is scheduled to open later this year. Our investment and commitment to opening new restaurants at a more even pace has been successful. In the Q1, we opened 9 company owned Texas Roadhouses. We currently expect to open an additional 6 company owned restaurants during the Q2. For the full year, we remain on track to open approximately 30 company owned restaurants across the 3 brands. Speaker 200:04:01Our franchise partners opened 2 International Texas Roadhouse locations and a domestic Jaggers during the Q1. We continue to expect as many as 14 franchise openings this year, including 4 Jaggers. On the technology front, our conversion to digital kitchens is going as planned with 30% of the approximate 200 scheduled conversions completed so far. The feedback from our operators remains highly positive. In addition to kitchen efficiencies, our operators also appreciate the calmer kitchen and less stressful execution during power hours. Speaker 200:04:45Also on the technology front, we are preparing to go live during the Q2 with a new people system, which we call Roadie First Technology. The system will provide our employees with a more user friendly platform for easier access to their data and records. It should also improve the recruiting and employee management processes for our managers. The first the RHODI First Technology name reflects our commitment to enhancing the RHODI experience at all levels, which will allow us to continue hiring, training and retaining the best people in the industry. Finally, we just returned home from our Annual Managing Partner Conference in Austin, Texas. Speaker 200:05:31It was a great week celebrating our operator success in 2023, planning for the future, recognizing our top talent and having a little fun. We also unveiled our first purpose statement, which is serving communities across America and the world. We believe our purpose builds clarity for our roadies and will inspire them for our journey ahead. Speaking of inspiration, I want to congratulate Casey Cohen from Turnersville, New Jersey as she was named our Texas Roadhouse Managing Partner of the Year. I also want to congratulate Vanessa Blanca Quezada from Albuquerque, New Mexico for being named our Bubba's 33 Managing Partner of the Year. Speaker 200:06:19Additionally, I want to recognize Benito Galindo of Covington, Louisiana for being named our National Meat Cutting Champion and Frank Fernandez for being named our Support Center Roadie of the Year. And lastly, I would like to congratulate and thank our award finalists for their contributions and accomplishments. Now Chris will provide some thoughts. Speaker 300:06:46Thanks, Jerry. I want to echo your comments regarding what an impactful time we shared with our managing partners in Austin. They are doing a fantastic job and it was great to be a part of celebrating the best of the best. Having an operator mentality and focus on the guest experience continues to pay financial dividends for us. While it's only been 5 weeks since we implemented a 2.2% menu price increase, we are encouraged by the traffic and mix trends we've seen so far. Speaker 300:07:18In fact, our mix trends improved as we move through the Q1 and into the beginning of the Q2. We've always taken a long term approach to pricing with the goal of driving sustainable traffic growth. We believe our guests continue to reward us for this approach by choosing to come to our restaurants more often. Commodities, more particularly beef, have performed better than we'd expected. We're benefiting from the improved cost environment as only a small portion of this year's beef purchases have been made through fixed price contracts. Speaker 300:07:56While we still expect beef inflation to increase as we move through the year, we now expect full year 2024 commodity inflation will be approximately 3%. Currently, we expect to be above the full year inflation forecast in the back half of the year. Labor is benefiting from improved productivity as our hiring efforts have resulted in well staffed restaurants with longer tenured roadies. This is allowing our managers to staff their restaurants more efficiently and focus on the employee experience. So far this year, wage and other labor inflation has played out as anticipated. Speaker 300:08:38As such, we continue to expect 4% to 5% inflation for the full year. Our cash flow from operations continues to support our balanced approach to capital allocation. We're pleased with the returns we are generating from our ongoing investments in the business, including new store openings, bump outs, kitchen expansions and digital kitchen conversions. During the Q1, we generated over $240,000,000 of operating cash flow, which was used to fund over $125,000,000 dollars of capital expenditures, dividend payments and share repurchases. As we've done throughout our history, we will continue to return capital to shareholders and invest in growth projects. Speaker 300:09:28And now, Michael will walk us through the Q1 results. Speaker 100:09:32Thanks, Chris. For the Q1 of 2024, we reported revenue growth of 12.5 percent, driven by a 7.7% increase in average unit volume and 4.9% store week growth. We also reported a restaurant margin dollar increase of 23% to $228,000,000 and a diluted earnings per share increase of 31.4 percent to $1.69 Average weekly sales in the Q1 were over $159,000 with to go representing approximately $21,000 or 13.1 percent of these total weekly sales. Comparable sales increased 8.4% in the 1st quarter, driven by 4.3% traffic growth and a 4.1% increase in average check. By month, comparable sales grew 4.2%, 10.4% and 10.2% for our January, February March periods respectively. Speaker 100:10:45And comparable sales for the 1st 5 weeks of the second quarter were up 9.3% with our restaurants averaging sales of approximately $158,000 per week during that period. In the Q1, restaurant margin dollars per store week increased 17.3% to over $27,500 Restaurant margin as a percentage of total sales increased 148 basis points year over year to 17.4%. Food and beverage costs as a percentage of total sales were 33.9 percent for the Q1. The 131 basis point year over year improvement was driven by the benefit of a 4.1% check increase offsetting the 0.9% commodity inflation for the quarter. Labor as a percentage of total sales decreased 51 basis points to 32.5% as compared to the Q1 of 2023. Speaker 100:11:58Labor dollars per store week increased 5.7% due to wage and other labor inflation of 4.3% and growth in hours of 1%. The remaining 0.3% increase in labor dollars per store week was primarily driven by a $700,000 net unfavorable adjustment to our quarterly insurance reserve. Other operating costs were 14.7 percent of sales, which was 39 basis points higher than the Q1 of 2023. Higher operator bonuses as a percentage of sales resulting from an increased year over year restaurant level profitability drove 23 basis points of the increase. Also included in the year over year change is an approximately 35 basis point negative impact from adjustments to our quarterly reserve for general liability insurance. Speaker 100:13:01These adjustments include $3,500,000 of additional expense this year and a $800,000 credit last year. Moving below restaurant margin, G and A dollars grew 5.5% year over year and came in at 4% of revenue for the Q1. G and A dollar growth benefited from lapping an approximately $2,600,000 one time cost related to an executive retirement. Our effective tax rate for the quarter was 13.9%. Our expectation for the full year 2024 income tax rate remains unchanged at approximately 14%. Speaker 100:13:46Finally, as a reminder, 2024 is a 53 week year for us. As such, the Q4 will have 14 weeks versus our normal 13 weeks. We estimate that the additional week could benefit full year 2024 earnings per share growth by approximately 4%. Now, I will turn the call back over to Jerry for final comments. Speaker 200:14:11Thanks, Michael. The theme of our Managing Partner Conference was Buckle Up. It is a fitting message as we prepare for our journey ahead. At conference, I encouraged our operators to buckle up and double down on our mission, our core values and our purpose of serving our communities across America and the world. Last, but certainly not least, we are honored to have Casey and Vanessa, our Managing Partners of the Year with us for the call today. Speaker 200:14:44Congratulations again to both of you. Speaker 100:14:52That concludes our prepared remarks. Brianna, please open the line for questions. Operator00:14:58Thank you. We will now begin the question and answer session. Our first question today comes from David Palmer with Evercore ISI. Please go ahead. Speaker 400:15:31Thanks. I'll try to squeeze in just 2 quick ones. First on other operating expenses, it's up 9% per store in the quarter. That was a similar type of growth rate in all of 2023. Could you remind me what's driving that growth in that line item? Speaker 400:15:49And as you look ahead, is it reasonable to assume that, that growth rate might slow and you'd be able to leverage that line a little bit more? And then just any comments or details you can give about the digital kitchen initiative? It obviously has great uptake. Any quantification about the benefits you're seeing, table turns, order accuracy, anything that could help the business? Thanks. Speaker 100:16:15Hey, David. Thanks for the question. It's Michael. I'll start with the question by the other operating. Yes, as we mentioned, we did have a general liability adjustment on that line of $3,500,000 So that is driving some of that increase. Speaker 100:16:33Obviously, as we're doing higher sales volumes, that also is driving those dollars per store week as there are items in there that are directly correlated with sales. And we also mentioned the higher profitability of the restaurants is leading to more compensation expense. So it is certainly possible and probably expected that dollar per store week growth for other operating will not increase at that high of a level throughout the remainder of the year. But obviously, we don't know what other adjustments we may have to make, but all those being equal, that should come down. And I can start off on the Digital Kitchen and then I'll turn it over probably to Jerry. Speaker 100:17:18We're a little early for us to give any comments, actual throughput or any kind of numerical quantitative information on it. But we are very happy with the qualitative feedback that we're getting so far and encouraged by what we're seeing. Speaker 200:17:38Yes, David, on the Digital Kitchen, I think as we're still early into it, we are very excited about the positive feedback we're getting from our operators. We are being able to see and track our cook times a little bit, the timing of our food and really the calmness in the organization that the digital kitchen brings to our back of the house. So, I believe that there is just a quality of life or experience of on the job that will benefit us as we move forward. So, we are definitely excited about getting more done as we move through the year and getting some more feedback. But so far, really, really good feedback. Speaker 400:18:15Thanks guys. Congrats. Speaker 200:18:18Thank you very much. Operator00:18:21Your next question comes from David Tarantino with Baird. Please go Speaker 500:18:25ahead. Hi, good afternoon and congrats on a good start to the year. My question is on the margin outlook. I think you've talked in the past about the potential to get long term restaurant margins back to 17%, 18%. I know that's a long term target, but my question is related to how much progress towards that target you might be able to make this year in light of the easing inflation environment, the productivity gains you're making. Speaker 500:19:01So just wondering if you could frame up this year in the context of progress towards that long term target? Thanks. Speaker 300:19:11Sure, David. This is Chris and thanks for the question. Well, clearly, we've had solid margin expansion in Q1 here and reaching 17.4%. So we're in the zone of our goal of 17% to 18% and that's where we'd like to be. And honestly, we feel like we have an opportunity to expand it similarly in a year over year basis in Q2. Speaker 300:19:36But in the second half, there's the commodity pressure that we're expecting. And so, it'll be more difficult to do that. But then when you get to the full year after you've added all that up, we should see some modestly higher than we were in 2023. And with still a long term goal of consistently delivering between 17% 18%. Speaker 500:20:00Great. Thank you very much. And then if I could ask a follow-up, you did mention labor productivity gains. So could you just maybe elaborate on what you're doing there? And is that just a matter of kind of more stable staffing in the current environment? Speaker 500:20:17Or are you actually making progress in other ways? So any help there? Speaker 300:20:24Yes, David, this is Chris again. I think it is a reflection of more stable staffing and having our longer tenured roadies as I talked about in my prepared remarks. It just allows our operators to just have a team that's together, that's working together, that gets reps together and they're just more efficient. And we're far away from the situations that we were in during the pandemic where it was difficult to get people to come in and we were having difficulty in staffing. So, now that we have our staff in place and our turnover is certainly lower much lower than it was before, that's driving some of the benefit on that line. Speaker 500:21:11Great. Thank you very much. Operator00:21:15Your next question comes from Brian Harber with Morgan Stanley. Please go ahead. Speaker 500:21:22Yes, thanks. Good afternoon. I think you commented on some just some improvement in mix sequentially. Could you talk about kind of what drove that or any kind of like customer behavior shift that you observed as you went through the quarter? Speaker 100:21:40Yes, sure, Brian. This is Michael. I can talk a little bit on that. Yes, I mean, I'd say really not seeing anything changing in our consumers' behavior. We are seeing less alcohol, negative mix than we have been seeing. Speaker 100:22:00And that was something that has been trending back more to neutral over the last several months. We're still running a little bit negative on alcohol, but entrees, appetizers, add ons, all those items have which were never really overly negative, have really flattened out. So very encouraged by what we're seeing there. And to me, it shows that the consumer is still seeing the everyday value that we're offering. Speaker 600:22:34Thank you. Operator00:22:37Your next question comes from Jeffrey Bernstein with Barclays. Please go ahead. Speaker 700:22:43Great. Thank you very much. Two questions. The first one just on the you made reference to the Texas Red Off brand versus the Bubba's brand. Clearly, both of them are very strong railroads for the industry. Speaker 700:22:59When you compare them between each other, the Texas Roadhouse, I mean, the 2 year stacks on comps are 22% and their AUVs are 8,500,000 dollars The Bubba's 2 year stack is 12% and the AUV is like low 6s. Just wondering what do you view as the greatest driver of the discrepancy between the 2? And would you say that with the passage of time, the gap would narrow in terms of both comp and AUV and make the brands more similar in terms of being indifferent which brands you open? And then I had one follow-up. Speaker 100:23:34Yes, it's Michael. Thanks for the question. Some of that's going to get into a little speculation and it will be hard for me to answer. Obviously, the Texas Roadhouse brand has been around quite a while longer than Bubba's had. So we are very happy with what both brands are doing. Speaker 100:23:51It's hard for anybody to compete with what Texas Roadhouse has been doing, But Bubba's at 120,000, it was a very strong number for us. And when you only have less than 50 Bubba's, you can always it's easier for those numbers to be skewed one way or another by a few stores. So we are very encouraged by what we are seeing there and we generate similar returns from both concepts and we're excited to see what we see in the future. Speaker 700:24:29I guess that's the issue when your big brother is Texas Roadhouse. That is very true. My follow-up question is just to clarify on the unit openings. I think you mentioned still being confident in the 30 company operated this year. I know you mentioned 10 year to date and 18 under construction. Speaker 700:24:49Maybe these things open pretty quickly. But can units start construction in coming months and still open before year end? Or might you come in close to that 28% number for the full year 2024 just for modeling purposes? Thank you. Speaker 200:25:04Yes. We can get them under construction now and get them into this year. So we're still approximately 30 between the three brands and obviously the pipeline for 25 is being worked hard too. So I believe that we'll hit that number. We have a lot of confidence in it right now. Speaker 200:25:21Everything kind of is working well for us. So, we'll stay right there for the moment. Great. Thank you. Thank you. Operator00:25:32Your next question comes from Peter Saleh with BTIG. Please go ahead. Speaker 800:25:38Great. Thanks for taking the question. Just maybe 2 quick ones for me. On the Ziosk, could you just remind us maybe what percentage of the sales are now going through that platform? And aside from maybe the table turns, which I'm assuming that's benefiting you on table turns, what else are you learning about the customer given that so much of the sales are going through that platform? Speaker 800:26:04Any other data that you're able to collect and what are you learning about the customer? And then I have a follow-up as well. Speaker 200:26:11Yes. I mean, it's the pay at the table. So, I believe we're approximately 80% of our guests use the Roadhouse Pay as we call it as the pay at the table feature. I don't know there's a lot to learn there other than it just helps with when they're ready to go, they can swipe their cards and be on their way. So I think from that, it's a convenience factor more importantly and it's a transaction that allows them to leave when they're ready. Speaker 200:26:39And it's obviously been very well liked and utilized within our guests. Speaker 800:26:46Great. And then I think you guys mentioned that you're expecting commodity inflation to be higher in the, I guess, the second half of the year, getting to that full 3% for the full year. Can you just give us a sense on how much of your basket is locked for the second half? And if how much variability we have around that number? Speaker 100:27:07Hey, Peter, it's Michael. Yes, like in similar quarters, we're not going to give a lot of detail on what is locked for competitive reasons. At this point in time, we're not going to we haven't certainly put a lot of beef into a fixed price contract, both from our side seeing the volatility and the packer seeing the volatility so hard to agree upon a fixed price. We certainly have entered into supply contracts for most of the beef that we'll be using over the remainder of the year. So yes, there is the potential for volatility in that inflation number as we move through the year, both higher or lower if the market were to behave differently than we expect. Speaker 800:28:01Thank you very much. Operator00:28:05Your next question comes from Sara Senatore with Bank of America. Please go ahead. Speaker 900:28:11Hi, thank you. I guess two questions. One just on the mix and pricing the comp. Could you just remind us how much price you had? I think you said last time we spoke was like 5% price. Speaker 900:28:25So just trying to calculate the mix. It sounds like it's less than percentage point headwind at this point? Speaker 100:28:34Yes, Sarah, it's Michael. In the Q1, we had 4.9% pricing and you are correct, we had about 80 basis points of negative mix and but that did come down quite a bit in the 1st 5 weeks of our Q2 to only about 20 basis points of negative mix as we continue to have about 4.9% pricing in the menu for both the Q2 and the 3rd quarter. Speaker 900:29:01Okay, great. That's very helpful. And the sort of the question I have related to that is just as you think about again your business versus everybody else, where everybody else is seeing like check management, do you have a sense of again who what's driving that? I know it's somewhat speculation, but are you getting people who maybe are trading in from other concepts who relative value is still very good, so good at Texas that it encourages them to attach more? I'm just trying to understand the dynamics which seem to be running contrary to the rest of the industry in a good way. Speaker 200:29:42Well, thank you very much for that kindness. We believe that our offerings and the value that's built into our menu is really what is allowing people to be very happy when they do trade in from wherever. And our focus on our food, our service and the experience that we provide with the value built into our menu is really what we see happening. I don't really see anything else in the mix to tell me anything different than keep doing what we're doing, legendary food and legendary service and keep making sure that guests have great experiences in all of our businesses. Speaker 900:30:16Well, certainly working for you. Thank you. Speaker 200:30:19Thanks, Sarah. Operator00:30:21Your next question comes from Dennis Geiger with UBS. Please go ahead. Speaker 1000:30:27Great. Thanks, guys. Jerry, wondering if you could just talk a little more looking ahead to later in the year and thinking about pricing. I know you spoke to it at a high level earlier, but anything philosophically there given where traffic is, given you've underpriced competitors in recent years, but given cost inflation that you've seen over the years, any kind of high level as you look to that next pricing increase that you can share today or Speaker 200:30:53just how you're thinking about and how the operators are thinking about it? Well, Dennis, we'll follow the same procedure we always have. We're just 5 weeks, 6 weeks into this last round. We'll gather our feedback from all of our managing partners and our market partners probably in August, September and talk about what we would or wouldn't do in October. So still a little early. Speaker 200:31:16We'll take the approach of being conservative. We'll see what happens in the industry going forward and then we'll absolutely partner up with our operators and decide what is best for each and every one of their store or their market or their region. And then as a company, we'll help them make that decision that will also be very good for our consumer and our shareholder. Makes good sense, Gerard. Just one more maybe if Speaker 1000:31:40I could. Just on staffing hours as it relates to that traffic, we've seen some really good relationship there in recent quarters. Anything additional on the go kind of recent quarters, a good way to think about the go forward, would you say? Kind of recent quarters, a good way Speaker 200:31:57to think about the go forward would you say? Thank you. Speaker 300:32:01Hey, Dennis, it's Chris. Thanks for that question. I'll start and Michael can clean up anything I mess up here. But I think that we're we've talked about having historical average of 50% growth rate of our store of our hours growth to our traffic growth, trying to keep it around a 50% level. And in the Q4 of last year, you'll remember that we hit that. Speaker 300:32:27And so, we actually came in well with the number even better than that in the Q1, something more like 25%. So, we'd like to continue that. Now, I don't know that we can continue to 25%. Our goal is around 50%. But I think that there's definitely a lot of work that's been done to improve our labor situation and it's really thanks to our operators and their hiring and their staffing and making sure that their teams are working well together. Speaker 300:32:57And now we're delivering these results over the at least the last two quarters, we're definitely back in the zone. Speaker 100:33:02Yes. Chris, I'll echo what you said there. I think last year all that hard work of the operators to get their stores staffed the way they needed to be is now paying off in that percentage for the Q1. And we'll see where the next several quarters come out, but there certainly feels like there is strong potential for that to remain at or below that 50% level over the next several quarters. Speaker 200:33:30Good stuff. Congrats, guys. Thank you. Operator00:33:35Your next question comes from Jeff Farmer with Gordon Haskett. Please go ahead. Speaker 1100:33:40Great. Thank you. I have a quick follow-up on commodities and then just one more on capital investment. So on commodities, I understand there's some black box nature of what's going on. But based on what you know now, can you share expected quarterly commodity inflation over the next couple of quarters? Speaker 100:34:00Yes. Hey, Jeff, it's Michael. I'm not going to get specific numbers, but I'll help guide you all. The expectation is the 2nd quarter will be above where we were in the Q1, but probably still below the full year average. And then Q3 and Q4 are looking fairly similar and are going to be a little bit above that 3% full year number. Speaker 1100:34:27Okay. That's helpful. And then on the average capital investment for a new roadhouse, at least according to the K, it's expected to be roughly $8,000,000 in 2024, which is flat versus last year. But it looks like it's up more than 40% versus 2019. I appreciate that a lot of your peers are in the same sort of inflationary boat there, but you see any opportunities to reduce that $8,000,000 cost for a new roadhouse? Speaker 200:34:56I think we're going to be pretty close to it. We have expanded the new store openings, I believe, at the beginning of 'twenty three. So we've got to that expense. We feel really good about the size of our building, the expanded coolers, just more room to be able to execute in our back of the house. And so it's probably I would assume right now, if I'm looking forward, we'll probably be very close to that. Speaker 200:35:19I don't see a lot changing. Okay. Thank you. Thank you. Operator00:35:25Your next question comes from Lauren Silverman with Deutsche Bank. Please go ahead. Speaker 1200:35:31Thanks a lot and congrats on a great quarter. Thanks Lauren. Two questions. It looks like off premise grew at a faster rate than on premise for the first time in a few years. Was that a function of weather earlier in the quarter? Speaker 1200:35:47Is there anything else you're seeing? And can you talk about how that trended during the quarter? Speaker 200:35:52I think it's just about our ability to execute in our dining rooms and again getting used to the adjustment of what our to go volume is and that's the average volume. We obviously have stores that are doing much higher than that. So I think it's really about our operators settling in and running a full house and being able to execute our off premise and our to go processes of how we make that experience for the to go our food. We're putting a lot more effort into executing our to go food at a higher level and I think it's paying off for us as well as getting settled into full dining rooms for longer hours of the day. So a good problem to have. Speaker 100:36:34Yes. And Lauren, this is Michael. Just to add on, it was actually not in the 1st period during that colder or more winter weather. We saw the stronger growth in the gas and the sales of the to go business in the second and third periods of our Q1. So strong throughout, but it goes to everything Jerry talked about. Speaker 100:36:58Just we've made it the ease of that to go process. We really made that as easy as possible And the guests again continues to reward us for that and is using that to go on a regular basis. Speaker 1200:37:17That's awesome. And then just a quick one for modeling purposes. You talked about the quarter to date in April running 9.3%, which is incredible. Can you just remind us if there's anything we should be considering in terms of monthly compares for 2Q as we think about the cadence? And then any comments that you have on regions or regional differences? Speaker 1200:37:35Thanks so much. Speaker 100:37:38Yes, Lauren, it's Michael again. Nothing really that I would call out to be careful about over the coming months. And again, typically our May period tends to be busier than our April. And then June can look fairly similar to our April period. So nothing I would call out there. Speaker 100:38:02And as far as the trends that we've seen across region, certainly in the Q1, it was pretty strong across the country, maybe the South and Southeast, Southwest are a little bit stronger from a comp standpoint, but not dramatically different. So it was really a solid quarter nationwide and across all restaurants. Speaker 1200:38:34Great. Thanks so much. Operator00:38:38Your next question comes from Andrew Strelzik with BMO Capital Markets. Please go ahead. Speaker 1300:38:45Hey, good afternoon. Thanks for taking the question. A 2 parter on new store performance for me. I noticed in the release for the Texas Roadhouse stores open less than 6 months, there was an 8% decline in average weekly sales, and it's the Q3 in a row of declines and those have kind of accelerated over the last over that period. So just curious what is driving that? Speaker 1300:39:10Any color behind that would be great. And then just more broadly, color on new store performance would be great. Thank you very much. Speaker 100:39:20Hey, Andrew, it's Michael. Thanks for the question. Yes, that's something I mean that comes across in the numbers. Is some timing and regional impact in there. When you go back to the Q1 of last year, I believe it was 15 new stores, 3 of those were in California. Speaker 100:39:39Those are high volume restaurants. We're going to use some of our highest sales in the country out there and that was really pushing that number higher. So I would say the anomaly, if you want to call it anything, was how high that number had gotten in that Q1. Now we don't have those California stores in that 25 store number for the Q1. We're very happy, let me emphasize, very happy with the performance of our new stores and how they are performing. Speaker 100:40:13We don't expect every restaurant out of the gate to be doing $150,000 or 160,000 dollars per week in sales. But as we look across all of those, there is nothing that is concerning us about their performance or our ability to continue to open more stores. There's just always going to be a little bit of a timing issue and a region the states that they may open in. Speaker 300:40:41Great. That makes sense. Thanks a lot. Operator00:40:45Your next question comes from Jim Valera with Stephens. Please go ahead. Speaker 600:40:50Yes. Thanks for taking the question. I wanted to ask if we could get an update on the ButcherHouse initiatives. And maybe at a high level, do you really think of it as a way to build brand awareness or more of a frequency increaser or a way to get more customer data? And maybe one tag on to that as well. Speaker 600:41:11Does it help you guys with new site selection as you can start to get some frequency and data information on where people are ordering from? Speaker 200:41:22No, I think mostly what any of that retail segment of our business is about brand awareness. And we've done some really creative things. We've had a lot of fun with it. And I think that's the real focus on our retail. It's just really brand awareness and having some fun. Speaker 200:41:38We're continuing to look at every aspect of the business and see what we do with it in the future. But right now, we're uncertain. Speaker 600:41:46Okay. And then if I think about the performance of your brand, obviously, the foot traffic has been very strong, which is divergence from a lot of your peers. It seems like is there a scenario where as the macro gets tougher, the value proposition at Texas Roadhouse is such that you continue to source more people from peers in a way it actually makes your trends more resilient given the value positioning? Speaker 200:42:14Well, we certainly believe that and we continue to do what we do. We can't really control what they do with. We believe in our value that's built into our menu. We continue to try to be very conservative and take care of our business, but take care of our guests and really understand the dynamic of where we're at today. And so I just believe that we focus on our food being smoking hot, picture perfect, recipe right, fast, fun and friendly in our dining rooms. Speaker 200:42:39It's rewarding us and all three of our brands have excellent food that we're proud of. We love to hustle to help people and serve and that's what gives us the advantage I believe and we're really proud of everything that our operators are doing out there and they play this game at a very high level. Speaker 600:42:57Great. Thanks guys. I'll hop back in the queue. Operator00:43:01Your next question comes from Gregory Francfort with Guggenheim Securities. Please go ahead. Speaker 1400:43:08Hey, thanks. I appreciate the update on Bubba's and Jaggers. I'm just curious how you're thinking about balancing the capital priorities across the 3 brands in the next couple of years? And then for JAGGERS, maybe specifically, it seems like you're accelerating the franchise development. What's the plan long term on how you're thinking about the company operator versus franchise development there and maybe what your pitch to prospective franchisees looks like? Speaker 1400:43:34Thanks. Speaker 200:43:37Thank you for the question. I believe that we're going to stay focused on Roadhouse in that mid-twenty growth. Bubba's, we've talked a little bit about how we're building the pipeline and it is absolutely our 2nd brand and we're very invested and excited about what it's doing. JAGGER's is exciting for me in a lot of different ways. We've got 8 company stores and 3 franchise stores and we've got people interested. Speaker 200:44:01The food is incredible. Our service model is really working from a speed of service standpoint. So we are building our very first international restaurant with Jagger. So the dining and to really get our head around Jaggers and what it needs to be highly successful. We wanted to bring some partners in that could help us grow And that's what we're doing with our franchise partners. Speaker 200:44:29We're learning. We're partnering up. It's going to help us grow on the company side and on the franchise side. And it's hard to tell you what percentage right now going forward, but we're definitely leaning into both and learning a lot and we really appreciate our franchise interest in the JAGGERS concept. Thank you. Operator00:44:50Your next question comes from Jim Sanderson with Northcoast Research. Please go ahead. Speaker 1500:44:56Hey, thanks for the question. I wanted to go back to a little bit more insight on Bubba's 33. I think the comp was a little bit weaker than Texas Roadhouse. But can you walk through the same store sales breakdown traffic price mix for Bubba's? Speaker 100:45:13Hey, Jim, it's Michael. We actually don't get into that detail as much or at least not at this time into that breakdown. I mean, but yes, you're correct. It's not it did not comp to the same level that Roadhouse did, but again Roadhouse is kind of different than everyone else out there. But again, we are and with only 45 restaurants, the handful are not growing, it can skew that number. Speaker 100:45:43But overall, we saw some great performance in Bubba's early this year and are very encouraged by the margins that we're seeing there and what that business can deliver going forward. Speaker 200:45:57Yes. And I'll add on just a little bit on We're really if we just look at Bubba's and not compare it to Roadhouse, we're very, very happy with the performance, not only on our sales, we're attacking sales, we're in controlling our costs, we've done some things in the building to help us long term, and we've done a little bit of menu engineering. We've added a combo appetizer, which has really been a success and reorganized a little bit of how we do wings. And we've got a new sandwich we're excited about to be offering out there. And so there's a lot of momentum. Speaker 200:46:28As I look at the Q1 in Bubba's 33, it tells me we're in the right business. Burgers and pizzas and cold beer and rock and roll, we're going to be just fine. Speaker 1500:46:38Okay. Can I assume from that that you had positive traffic in 2024 at Bubba's? Is that fair? Speaker 100:46:47Yes, I think that's fair to say. Speaker 1500:46:49All right. I just want to ask a follow-up question also on same store sales in April. Is there any issue related to the Easter calendar shift that impacted performance? Speaker 100:47:03With Easter, no. Easter was still felt within our April period. So no impact from Easter. Speaker 1500:47:09No shift between okay, very, very good. And then last question for me. How does Texas Roadhouse usually do for Mother's Day? Is that an important event or not so much? Speaker 200:47:21Yes. It's an incredible event. It's all a part of Valentine's Day, Mother's Day, Father's Day. We kind of call it the Triple Crown. And speaking of that, the first leg of the Triple Crown is here in Kentucky over the next couple of days and we're excited about that. Speaker 200:47:36But, yeah, Mother's Day is huge for Texas Roadhouse and the restaurant industry overall. And we have some dominant players out there. We're excited about Mother's Day and Father's Day. Speaker 300:47:47And Jim, this is Chris. I'll just throw in, there's also Mexican Mother's Day that is celebrated as well. So we have that as a part of our repertoire as well. Speaker 1500:47:58All right. Thanks. I'll pass it on. Thank you very much. Speaker 200:48:01Thank you. Operator00:48:04Your next question comes from Jake Bartlett with Truist Securities. Please go ahead. Speaker 1600:48:10Great. Thanks for taking the question. My first is just a clarification or kind of a modeling question. But do you expect to open company owned JAGGERS of the 30 company owned stores you expect? I think you said 4 Bubba's. Speaker 1600:48:24Any JAGGERS in there? And then the real question, the bigger question is about G and A. Anything we should think about in the Q2? I know you typically don't disclose on how much exactly you spent on the conference, but if there's any variance, anything we should be aware of as we try to model G and A. As I kind of try to make the adjustments in the Q1, I get about 10 basis points of leverage in the Q1, adjusting for the one time last year. Speaker 1600:48:53Is that the kind of leverage you expect going forward just for Speaker 200:48:56the year as a whole? Thank you. I'll let Michael answer that second part. On the JAGRs growth, yes, we only have 1, maybe 2 this year as far as we can look at, but I'm building the pipeline. I do expect that to grow in the future. Speaker 200:49:12We're working some deals right now that are looking really positive. I believe we had 3 last year. And so we'll continue to look at the ramp up on that because it is now hitting the goals and the targets that we're looking for. Speaker 100:49:27And this is Michael. On the G and A question, in the Q1, yes, we did on an unadjusted basis, we did get a little bit of leverage. I think the next several quarters, again, some of it will depend upon your assumptions for top line revenue, but I do think it may be a little bit tougher for us to get leverage on G and A in the second and third quarter. When you think about the some of the investments we're making in Roadhouse Technology and some of the other things that we're doing internally, we're definitely investing in the business and this being a 50 3 week year for us, which should result in could continue to result in strong performance. We'll probably be taking some extra accruals for bonuses and compensation during the year. Speaker 100:50:22So I would expect you could probably see G and A for the year being flattish range, but second and third quarters could be a little bit more difficult to get some leverage. Speaker 300:50:33And I'll just add to that. In the back half of the year, it could be impacted by the change in the timing of our equity grants that we talked about. And that is probably what you were referring to at least in part there in the second and third quarter. Speaker 1600:50:46Great. And if I could sneak just one quick one in. On the extra operating week impact on EPS, it's greater than just the proportion of Speaker 700:50:56the week. Speaker 1600:50:57I think in 2019, there was a 60 basis points benefit on the restaurant level margins from the extra operating week. Is that kind of any reason to think that would be different this time around? Speaker 100:51:09Yes. I mean, I think in the prepared remarks, we said we're expecting about 4% benefit to EPS from the next few weeks and whether that's 60 basis points or somewhere it would obviously benefit some parts of margin, it's going to benefit some items outside of margin, but we estimate about a 4% benefit to EPS. Speaker 200:51:30Okay. Thank you very much. Operator00:51:34Your next question comes from Brian Vaccaro with Raymond James. Please go ahead. Speaker 1700:51:40Hi, thanks and good evening. Just regarding the commodity outlook, I'm curious to just get your perspective on the supply and demand dynamics in the beef market. Just what you might be hearing that's driving the near term favorability? And then kind of what informs your view that beef costs could move higher later in the year? And then is there anything worth noting on the non beef side? Speaker 1700:51:59And you kind of maybe level set what level of inflation you're expecting on that other 50% of your basket? Speaker 100:52:07Hey, Brian, it's Michael. Maybe I'll do the easier part first. Another half of the basket, flat to deflationary, really nothing to call out or speak of there. And similar, it's really continued to perform as we would expect it. So being items being flat to deflationary and offsetting a little bit of the beef inflation. Speaker 100:52:31The supply has been a little bit better than industry wide than what was anticipated. So that certainly helped beef in the 1st part of the year and what we think will continue to help it over the next several months. And then the retail demand has been probably a little bit weaker or what they've been marketing has probably led to a benefit for us. So I think we've seen less marketing of rib eyes and maybe more marketing of strips by the grocery stores and obviously rib eye is a more important item for us. So things like that have led to some of that benefit that we've seen. Speaker 100:53:13And our expectation is that things are going to catch up and that supply tightening will have a bigger financial impact on us in the industry as we move into the back half of the year. Speaker 1700:53:29All right. Thank you for that. And then just one quick follow-up on Bubba's, if I could. Now I understand the strong sales that you're seeing. And I think store margins, at least in 2023, were a little bit below 14%, if my notes are right. Speaker 1700:53:44I guess I'm just curious, where would you like to see that over time as part of your unit economic model? And then what's the path towards driving higher margins at the Bubba's brand? Thanks very much. Speaker 100:53:58Bubba's has actually seen quite a bit of improvement early this year and I think you'll see that in some of our documents that will get filed in the coming days. So I think a margin again in the 17% to 18% range for above is kind of what we're looking for just like what we're looking for on the Roadhouse side. And again, that Bubba's team has been working hard and has made great strides. And I think you're going to see the fruit of that labor coming through here. Speaker 300:54:32Yes. And I'll just add to that. What you're seeing is and we're recognizing it here today with Vanessa here with us, but you have local Bubba's that are doing fantastic work and with their local store marketing and in places like Albuquerque and others where the sales are growing. And that's really what it's going to take. And again, to Michael's earlier point, there's only 45 Bubba's out there and they're working really hard on expanding their sales. Speaker 300:54:58And now that's beginning to come through. And I think that that Michael's comment about the 17% to 18% makes a lot of sense. Speaker 1700:55:07Very helpful. Thank you. Operator00:55:11Seeing no further questions at this time, I will now turn call back to Jerry Morgan for any closing remarks. Speaker 200:55:18I just wanted to close and say thank you all very much for your support and time. And I know here in our hometown of Louisville, Kentucky, hosting the Kentucky Derby, it's going to be a fantastic weekend. Hope you all have a great one. Let's go.Read morePowered by Conference Call Audio Live Call not available Earnings Conference CallTexas Roadhouse Q1 202400:00 / 00:00Speed:1x1.25x1.5x2x Earnings DocumentsPress Release(8-K)Quarterly report(10-Q) Texas Roadhouse Earnings HeadlinesWhy there are two Texas Roadhouses next to each other in AuroraMay 2 at 1:41 PM | msn.comTexas Roadhouse (TXRH) Projected to Post Quarterly Earnings on ThursdayMay 1, 2025 | americanbankingnews.comBlackrock’s Sending THIS Crypto Higher on PurposeWhile everyone's distracted by Bitcoin's moves, a stealth revolution is underway. One altcoin is quietly positioning itself to overthrow the entire banking system.May 5, 2025 | Crypto 101 Media (Ad)Texas Roadhouse: Grilling Up Growth For Long-Term SuccessApril 30, 2025 | seekingalpha.comJune 6th Options Now Available For Texas Roadhouse (TXRH)April 26, 2025 | nasdaq.comBrokerages Set Texas Roadhouse, Inc. (NASDAQ:TXRH) PT at $194.62April 26, 2025 | americanbankingnews.comSee More Texas Roadhouse Headlines Get Earnings Announcements in your inboxWant to stay updated on the latest earnings announcements and upcoming reports for companies like Texas Roadhouse? Sign up for Earnings360's daily newsletter to receive timely earnings updates on Texas Roadhouse and other key companies, straight to your email. Email Address About Texas RoadhouseTexas Roadhouse (NASDAQ:TXRH), together with its subsidiaries, operates casual dining restaurants in the United States and internationally. It also operates and franchises restaurants under the Texas Roadhouse, Bubba's 33, and Jaggers names in 49 states and ten internationally. 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There are 18 speakers on the call. Operator00:00:00Good evening, and welcome to the Texas Roadhouse First 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. I would now like to introduce Michael Balen, Head of Investor Relations for Texas Roadhouse. Operator00:00:33You may begin your conference. Speaker 100:00:37Thank you, Brianna, and good evening. By now, you should have access to our earnings release for the Q1 ended March 26, 2024. It may also be found on our website at texasroadhouse.com in the Investors section. I would like to remind everyone that part of our discussion today will include forward looking statements. These statements are not guarantees of future performance and therefore undue reliance should not be placed upon them. Speaker 100:01:06We refer all of you to our earnings release and our recent filings with the SEC. These documents provide a more detailed discussion of the relevant factors that could cause actual results to differ materially from those forward looking statements. In addition, we may refer to non GAAP measures. If applicable, reconciliations of the non GAAP measures to the GAAP information can be found in our earnings release. On the call with me today is Jerry Morgan, Chief Executive Officer of Texas Roadhouse and Chris Monroe, our Chief Financial Officer. Speaker 100:01:43Following the prepared remarks, we will be available to answer your questions. In order to accommodate everyone that would like to ask a question, we kindly ask analysts to please limit yourself to one question. Now, I'd like to turn the call over to Jerry. Speaker 200:02:00Thanks, Michael, and good evening, everyone. There is no doubt that 2024 is off to a great start with 1st quarter revenue over $1,300,000,000 and same store sales growth of 8.4%. Our strong results continue to reflect our operators' commitment to the consistency and quality of the food, the hospitality they provide and our everyday value. The benefit of our long term approach to the business and our focus on always prioritizing the guest experience is evident in the record sales, margin dollars and net income for the Q1. While the Texas Roadhouse brand generated average weekly sales of over $163,000 in the Q1. Speaker 200:02:48I want to also highlight the progress our operators are making at Bubba's 33 and Jaggers. Bubba's 33 averaged over $120,000 in weekly sales during the Q1. With 4 locations scheduled to open this year and a growing pipeline for the coming years, we remain confident in the future for Bubba's 33. JAGGER's, our quick service brand, is also experiencing momentum and delivered nearly $68,000 in average weekly sales. We continue to expect a mix of company and franchise Jaggers over the coming years. Speaker 200:03:30And the 1st international franchise in South Korea is scheduled to open later this year. Our investment and commitment to opening new restaurants at a more even pace has been successful. In the Q1, we opened 9 company owned Texas Roadhouses. We currently expect to open an additional 6 company owned restaurants during the Q2. For the full year, we remain on track to open approximately 30 company owned restaurants across the 3 brands. Speaker 200:04:01Our franchise partners opened 2 International Texas Roadhouse locations and a domestic Jaggers during the Q1. We continue to expect as many as 14 franchise openings this year, including 4 Jaggers. On the technology front, our conversion to digital kitchens is going as planned with 30% of the approximate 200 scheduled conversions completed so far. The feedback from our operators remains highly positive. In addition to kitchen efficiencies, our operators also appreciate the calmer kitchen and less stressful execution during power hours. Speaker 200:04:45Also on the technology front, we are preparing to go live during the Q2 with a new people system, which we call Roadie First Technology. The system will provide our employees with a more user friendly platform for easier access to their data and records. It should also improve the recruiting and employee management processes for our managers. The first the RHODI First Technology name reflects our commitment to enhancing the RHODI experience at all levels, which will allow us to continue hiring, training and retaining the best people in the industry. Finally, we just returned home from our Annual Managing Partner Conference in Austin, Texas. Speaker 200:05:31It was a great week celebrating our operator success in 2023, planning for the future, recognizing our top talent and having a little fun. We also unveiled our first purpose statement, which is serving communities across America and the world. We believe our purpose builds clarity for our roadies and will inspire them for our journey ahead. Speaking of inspiration, I want to congratulate Casey Cohen from Turnersville, New Jersey as she was named our Texas Roadhouse Managing Partner of the Year. I also want to congratulate Vanessa Blanca Quezada from Albuquerque, New Mexico for being named our Bubba's 33 Managing Partner of the Year. Speaker 200:06:19Additionally, I want to recognize Benito Galindo of Covington, Louisiana for being named our National Meat Cutting Champion and Frank Fernandez for being named our Support Center Roadie of the Year. And lastly, I would like to congratulate and thank our award finalists for their contributions and accomplishments. Now Chris will provide some thoughts. Speaker 300:06:46Thanks, Jerry. I want to echo your comments regarding what an impactful time we shared with our managing partners in Austin. They are doing a fantastic job and it was great to be a part of celebrating the best of the best. Having an operator mentality and focus on the guest experience continues to pay financial dividends for us. While it's only been 5 weeks since we implemented a 2.2% menu price increase, we are encouraged by the traffic and mix trends we've seen so far. Speaker 300:07:18In fact, our mix trends improved as we move through the Q1 and into the beginning of the Q2. We've always taken a long term approach to pricing with the goal of driving sustainable traffic growth. We believe our guests continue to reward us for this approach by choosing to come to our restaurants more often. Commodities, more particularly beef, have performed better than we'd expected. We're benefiting from the improved cost environment as only a small portion of this year's beef purchases have been made through fixed price contracts. Speaker 300:07:56While we still expect beef inflation to increase as we move through the year, we now expect full year 2024 commodity inflation will be approximately 3%. Currently, we expect to be above the full year inflation forecast in the back half of the year. Labor is benefiting from improved productivity as our hiring efforts have resulted in well staffed restaurants with longer tenured roadies. This is allowing our managers to staff their restaurants more efficiently and focus on the employee experience. So far this year, wage and other labor inflation has played out as anticipated. Speaker 300:08:38As such, we continue to expect 4% to 5% inflation for the full year. Our cash flow from operations continues to support our balanced approach to capital allocation. We're pleased with the returns we are generating from our ongoing investments in the business, including new store openings, bump outs, kitchen expansions and digital kitchen conversions. During the Q1, we generated over $240,000,000 of operating cash flow, which was used to fund over $125,000,000 dollars of capital expenditures, dividend payments and share repurchases. As we've done throughout our history, we will continue to return capital to shareholders and invest in growth projects. Speaker 300:09:28And now, Michael will walk us through the Q1 results. Speaker 100:09:32Thanks, Chris. For the Q1 of 2024, we reported revenue growth of 12.5 percent, driven by a 7.7% increase in average unit volume and 4.9% store week growth. We also reported a restaurant margin dollar increase of 23% to $228,000,000 and a diluted earnings per share increase of 31.4 percent to $1.69 Average weekly sales in the Q1 were over $159,000 with to go representing approximately $21,000 or 13.1 percent of these total weekly sales. Comparable sales increased 8.4% in the 1st quarter, driven by 4.3% traffic growth and a 4.1% increase in average check. By month, comparable sales grew 4.2%, 10.4% and 10.2% for our January, February March periods respectively. Speaker 100:10:45And comparable sales for the 1st 5 weeks of the second quarter were up 9.3% with our restaurants averaging sales of approximately $158,000 per week during that period. In the Q1, restaurant margin dollars per store week increased 17.3% to over $27,500 Restaurant margin as a percentage of total sales increased 148 basis points year over year to 17.4%. Food and beverage costs as a percentage of total sales were 33.9 percent for the Q1. The 131 basis point year over year improvement was driven by the benefit of a 4.1% check increase offsetting the 0.9% commodity inflation for the quarter. Labor as a percentage of total sales decreased 51 basis points to 32.5% as compared to the Q1 of 2023. Speaker 100:11:58Labor dollars per store week increased 5.7% due to wage and other labor inflation of 4.3% and growth in hours of 1%. The remaining 0.3% increase in labor dollars per store week was primarily driven by a $700,000 net unfavorable adjustment to our quarterly insurance reserve. Other operating costs were 14.7 percent of sales, which was 39 basis points higher than the Q1 of 2023. Higher operator bonuses as a percentage of sales resulting from an increased year over year restaurant level profitability drove 23 basis points of the increase. Also included in the year over year change is an approximately 35 basis point negative impact from adjustments to our quarterly reserve for general liability insurance. Speaker 100:13:01These adjustments include $3,500,000 of additional expense this year and a $800,000 credit last year. Moving below restaurant margin, G and A dollars grew 5.5% year over year and came in at 4% of revenue for the Q1. G and A dollar growth benefited from lapping an approximately $2,600,000 one time cost related to an executive retirement. Our effective tax rate for the quarter was 13.9%. Our expectation for the full year 2024 income tax rate remains unchanged at approximately 14%. Speaker 100:13:46Finally, as a reminder, 2024 is a 53 week year for us. As such, the Q4 will have 14 weeks versus our normal 13 weeks. We estimate that the additional week could benefit full year 2024 earnings per share growth by approximately 4%. Now, I will turn the call back over to Jerry for final comments. Speaker 200:14:11Thanks, Michael. The theme of our Managing Partner Conference was Buckle Up. It is a fitting message as we prepare for our journey ahead. At conference, I encouraged our operators to buckle up and double down on our mission, our core values and our purpose of serving our communities across America and the world. Last, but certainly not least, we are honored to have Casey and Vanessa, our Managing Partners of the Year with us for the call today. Speaker 200:14:44Congratulations again to both of you. Speaker 100:14:52That concludes our prepared remarks. Brianna, please open the line for questions. Operator00:14:58Thank you. We will now begin the question and answer session. Our first question today comes from David Palmer with Evercore ISI. Please go ahead. Speaker 400:15:31Thanks. I'll try to squeeze in just 2 quick ones. First on other operating expenses, it's up 9% per store in the quarter. That was a similar type of growth rate in all of 2023. Could you remind me what's driving that growth in that line item? Speaker 400:15:49And as you look ahead, is it reasonable to assume that, that growth rate might slow and you'd be able to leverage that line a little bit more? And then just any comments or details you can give about the digital kitchen initiative? It obviously has great uptake. Any quantification about the benefits you're seeing, table turns, order accuracy, anything that could help the business? Thanks. Speaker 100:16:15Hey, David. Thanks for the question. It's Michael. I'll start with the question by the other operating. Yes, as we mentioned, we did have a general liability adjustment on that line of $3,500,000 So that is driving some of that increase. Speaker 100:16:33Obviously, as we're doing higher sales volumes, that also is driving those dollars per store week as there are items in there that are directly correlated with sales. And we also mentioned the higher profitability of the restaurants is leading to more compensation expense. So it is certainly possible and probably expected that dollar per store week growth for other operating will not increase at that high of a level throughout the remainder of the year. But obviously, we don't know what other adjustments we may have to make, but all those being equal, that should come down. And I can start off on the Digital Kitchen and then I'll turn it over probably to Jerry. Speaker 100:17:18We're a little early for us to give any comments, actual throughput or any kind of numerical quantitative information on it. But we are very happy with the qualitative feedback that we're getting so far and encouraged by what we're seeing. Speaker 200:17:38Yes, David, on the Digital Kitchen, I think as we're still early into it, we are very excited about the positive feedback we're getting from our operators. We are being able to see and track our cook times a little bit, the timing of our food and really the calmness in the organization that the digital kitchen brings to our back of the house. So, I believe that there is just a quality of life or experience of on the job that will benefit us as we move forward. So, we are definitely excited about getting more done as we move through the year and getting some more feedback. But so far, really, really good feedback. Speaker 400:18:15Thanks guys. Congrats. Speaker 200:18:18Thank you very much. Operator00:18:21Your next question comes from David Tarantino with Baird. Please go Speaker 500:18:25ahead. Hi, good afternoon and congrats on a good start to the year. My question is on the margin outlook. I think you've talked in the past about the potential to get long term restaurant margins back to 17%, 18%. I know that's a long term target, but my question is related to how much progress towards that target you might be able to make this year in light of the easing inflation environment, the productivity gains you're making. Speaker 500:19:01So just wondering if you could frame up this year in the context of progress towards that long term target? Thanks. Speaker 300:19:11Sure, David. This is Chris and thanks for the question. Well, clearly, we've had solid margin expansion in Q1 here and reaching 17.4%. So we're in the zone of our goal of 17% to 18% and that's where we'd like to be. And honestly, we feel like we have an opportunity to expand it similarly in a year over year basis in Q2. Speaker 300:19:36But in the second half, there's the commodity pressure that we're expecting. And so, it'll be more difficult to do that. But then when you get to the full year after you've added all that up, we should see some modestly higher than we were in 2023. And with still a long term goal of consistently delivering between 17% 18%. Speaker 500:20:00Great. Thank you very much. And then if I could ask a follow-up, you did mention labor productivity gains. So could you just maybe elaborate on what you're doing there? And is that just a matter of kind of more stable staffing in the current environment? Speaker 500:20:17Or are you actually making progress in other ways? So any help there? Speaker 300:20:24Yes, David, this is Chris again. I think it is a reflection of more stable staffing and having our longer tenured roadies as I talked about in my prepared remarks. It just allows our operators to just have a team that's together, that's working together, that gets reps together and they're just more efficient. And we're far away from the situations that we were in during the pandemic where it was difficult to get people to come in and we were having difficulty in staffing. So, now that we have our staff in place and our turnover is certainly lower much lower than it was before, that's driving some of the benefit on that line. Speaker 500:21:11Great. Thank you very much. Operator00:21:15Your next question comes from Brian Harber with Morgan Stanley. Please go ahead. Speaker 500:21:22Yes, thanks. Good afternoon. I think you commented on some just some improvement in mix sequentially. Could you talk about kind of what drove that or any kind of like customer behavior shift that you observed as you went through the quarter? Speaker 100:21:40Yes, sure, Brian. This is Michael. I can talk a little bit on that. Yes, I mean, I'd say really not seeing anything changing in our consumers' behavior. We are seeing less alcohol, negative mix than we have been seeing. Speaker 100:22:00And that was something that has been trending back more to neutral over the last several months. We're still running a little bit negative on alcohol, but entrees, appetizers, add ons, all those items have which were never really overly negative, have really flattened out. So very encouraged by what we're seeing there. And to me, it shows that the consumer is still seeing the everyday value that we're offering. Speaker 600:22:34Thank you. Operator00:22:37Your next question comes from Jeffrey Bernstein with Barclays. Please go ahead. Speaker 700:22:43Great. Thank you very much. Two questions. The first one just on the you made reference to the Texas Red Off brand versus the Bubba's brand. Clearly, both of them are very strong railroads for the industry. Speaker 700:22:59When you compare them between each other, the Texas Roadhouse, I mean, the 2 year stacks on comps are 22% and their AUVs are 8,500,000 dollars The Bubba's 2 year stack is 12% and the AUV is like low 6s. Just wondering what do you view as the greatest driver of the discrepancy between the 2? And would you say that with the passage of time, the gap would narrow in terms of both comp and AUV and make the brands more similar in terms of being indifferent which brands you open? And then I had one follow-up. Speaker 100:23:34Yes, it's Michael. Thanks for the question. Some of that's going to get into a little speculation and it will be hard for me to answer. Obviously, the Texas Roadhouse brand has been around quite a while longer than Bubba's had. So we are very happy with what both brands are doing. Speaker 100:23:51It's hard for anybody to compete with what Texas Roadhouse has been doing, But Bubba's at 120,000, it was a very strong number for us. And when you only have less than 50 Bubba's, you can always it's easier for those numbers to be skewed one way or another by a few stores. So we are very encouraged by what we are seeing there and we generate similar returns from both concepts and we're excited to see what we see in the future. Speaker 700:24:29I guess that's the issue when your big brother is Texas Roadhouse. That is very true. My follow-up question is just to clarify on the unit openings. I think you mentioned still being confident in the 30 company operated this year. I know you mentioned 10 year to date and 18 under construction. Speaker 700:24:49Maybe these things open pretty quickly. But can units start construction in coming months and still open before year end? Or might you come in close to that 28% number for the full year 2024 just for modeling purposes? Thank you. Speaker 200:25:04Yes. We can get them under construction now and get them into this year. So we're still approximately 30 between the three brands and obviously the pipeline for 25 is being worked hard too. So I believe that we'll hit that number. We have a lot of confidence in it right now. Speaker 200:25:21Everything kind of is working well for us. So, we'll stay right there for the moment. Great. Thank you. Thank you. Operator00:25:32Your next question comes from Peter Saleh with BTIG. Please go ahead. Speaker 800:25:38Great. Thanks for taking the question. Just maybe 2 quick ones for me. On the Ziosk, could you just remind us maybe what percentage of the sales are now going through that platform? And aside from maybe the table turns, which I'm assuming that's benefiting you on table turns, what else are you learning about the customer given that so much of the sales are going through that platform? Speaker 800:26:04Any other data that you're able to collect and what are you learning about the customer? And then I have a follow-up as well. Speaker 200:26:11Yes. I mean, it's the pay at the table. So, I believe we're approximately 80% of our guests use the Roadhouse Pay as we call it as the pay at the table feature. I don't know there's a lot to learn there other than it just helps with when they're ready to go, they can swipe their cards and be on their way. So I think from that, it's a convenience factor more importantly and it's a transaction that allows them to leave when they're ready. Speaker 200:26:39And it's obviously been very well liked and utilized within our guests. Speaker 800:26:46Great. And then I think you guys mentioned that you're expecting commodity inflation to be higher in the, I guess, the second half of the year, getting to that full 3% for the full year. Can you just give us a sense on how much of your basket is locked for the second half? And if how much variability we have around that number? Speaker 100:27:07Hey, Peter, it's Michael. Yes, like in similar quarters, we're not going to give a lot of detail on what is locked for competitive reasons. At this point in time, we're not going to we haven't certainly put a lot of beef into a fixed price contract, both from our side seeing the volatility and the packer seeing the volatility so hard to agree upon a fixed price. We certainly have entered into supply contracts for most of the beef that we'll be using over the remainder of the year. So yes, there is the potential for volatility in that inflation number as we move through the year, both higher or lower if the market were to behave differently than we expect. Speaker 800:28:01Thank you very much. Operator00:28:05Your next question comes from Sara Senatore with Bank of America. Please go ahead. Speaker 900:28:11Hi, thank you. I guess two questions. One just on the mix and pricing the comp. Could you just remind us how much price you had? I think you said last time we spoke was like 5% price. Speaker 900:28:25So just trying to calculate the mix. It sounds like it's less than percentage point headwind at this point? Speaker 100:28:34Yes, Sarah, it's Michael. In the Q1, we had 4.9% pricing and you are correct, we had about 80 basis points of negative mix and but that did come down quite a bit in the 1st 5 weeks of our Q2 to only about 20 basis points of negative mix as we continue to have about 4.9% pricing in the menu for both the Q2 and the 3rd quarter. Speaker 900:29:01Okay, great. That's very helpful. And the sort of the question I have related to that is just as you think about again your business versus everybody else, where everybody else is seeing like check management, do you have a sense of again who what's driving that? I know it's somewhat speculation, but are you getting people who maybe are trading in from other concepts who relative value is still very good, so good at Texas that it encourages them to attach more? I'm just trying to understand the dynamics which seem to be running contrary to the rest of the industry in a good way. Speaker 200:29:42Well, thank you very much for that kindness. We believe that our offerings and the value that's built into our menu is really what is allowing people to be very happy when they do trade in from wherever. And our focus on our food, our service and the experience that we provide with the value built into our menu is really what we see happening. I don't really see anything else in the mix to tell me anything different than keep doing what we're doing, legendary food and legendary service and keep making sure that guests have great experiences in all of our businesses. Speaker 900:30:16Well, certainly working for you. Thank you. Speaker 200:30:19Thanks, Sarah. Operator00:30:21Your next question comes from Dennis Geiger with UBS. Please go ahead. Speaker 1000:30:27Great. Thanks, guys. Jerry, wondering if you could just talk a little more looking ahead to later in the year and thinking about pricing. I know you spoke to it at a high level earlier, but anything philosophically there given where traffic is, given you've underpriced competitors in recent years, but given cost inflation that you've seen over the years, any kind of high level as you look to that next pricing increase that you can share today or Speaker 200:30:53just how you're thinking about and how the operators are thinking about it? Well, Dennis, we'll follow the same procedure we always have. We're just 5 weeks, 6 weeks into this last round. We'll gather our feedback from all of our managing partners and our market partners probably in August, September and talk about what we would or wouldn't do in October. So still a little early. Speaker 200:31:16We'll take the approach of being conservative. We'll see what happens in the industry going forward and then we'll absolutely partner up with our operators and decide what is best for each and every one of their store or their market or their region. And then as a company, we'll help them make that decision that will also be very good for our consumer and our shareholder. Makes good sense, Gerard. Just one more maybe if Speaker 1000:31:40I could. Just on staffing hours as it relates to that traffic, we've seen some really good relationship there in recent quarters. Anything additional on the go kind of recent quarters, a good way to think about the go forward, would you say? Kind of recent quarters, a good way Speaker 200:31:57to think about the go forward would you say? Thank you. Speaker 300:32:01Hey, Dennis, it's Chris. Thanks for that question. I'll start and Michael can clean up anything I mess up here. But I think that we're we've talked about having historical average of 50% growth rate of our store of our hours growth to our traffic growth, trying to keep it around a 50% level. And in the Q4 of last year, you'll remember that we hit that. Speaker 300:32:27And so, we actually came in well with the number even better than that in the Q1, something more like 25%. So, we'd like to continue that. Now, I don't know that we can continue to 25%. Our goal is around 50%. But I think that there's definitely a lot of work that's been done to improve our labor situation and it's really thanks to our operators and their hiring and their staffing and making sure that their teams are working well together. Speaker 300:32:57And now we're delivering these results over the at least the last two quarters, we're definitely back in the zone. Speaker 100:33:02Yes. Chris, I'll echo what you said there. I think last year all that hard work of the operators to get their stores staffed the way they needed to be is now paying off in that percentage for the Q1. And we'll see where the next several quarters come out, but there certainly feels like there is strong potential for that to remain at or below that 50% level over the next several quarters. Speaker 200:33:30Good stuff. Congrats, guys. Thank you. Operator00:33:35Your next question comes from Jeff Farmer with Gordon Haskett. Please go ahead. Speaker 1100:33:40Great. Thank you. I have a quick follow-up on commodities and then just one more on capital investment. So on commodities, I understand there's some black box nature of what's going on. But based on what you know now, can you share expected quarterly commodity inflation over the next couple of quarters? Speaker 100:34:00Yes. Hey, Jeff, it's Michael. I'm not going to get specific numbers, but I'll help guide you all. The expectation is the 2nd quarter will be above where we were in the Q1, but probably still below the full year average. And then Q3 and Q4 are looking fairly similar and are going to be a little bit above that 3% full year number. Speaker 1100:34:27Okay. That's helpful. And then on the average capital investment for a new roadhouse, at least according to the K, it's expected to be roughly $8,000,000 in 2024, which is flat versus last year. But it looks like it's up more than 40% versus 2019. I appreciate that a lot of your peers are in the same sort of inflationary boat there, but you see any opportunities to reduce that $8,000,000 cost for a new roadhouse? Speaker 200:34:56I think we're going to be pretty close to it. We have expanded the new store openings, I believe, at the beginning of 'twenty three. So we've got to that expense. We feel really good about the size of our building, the expanded coolers, just more room to be able to execute in our back of the house. And so it's probably I would assume right now, if I'm looking forward, we'll probably be very close to that. Speaker 200:35:19I don't see a lot changing. Okay. Thank you. Thank you. Operator00:35:25Your next question comes from Lauren Silverman with Deutsche Bank. Please go ahead. Speaker 1200:35:31Thanks a lot and congrats on a great quarter. Thanks Lauren. Two questions. It looks like off premise grew at a faster rate than on premise for the first time in a few years. Was that a function of weather earlier in the quarter? Speaker 1200:35:47Is there anything else you're seeing? And can you talk about how that trended during the quarter? Speaker 200:35:52I think it's just about our ability to execute in our dining rooms and again getting used to the adjustment of what our to go volume is and that's the average volume. We obviously have stores that are doing much higher than that. So I think it's really about our operators settling in and running a full house and being able to execute our off premise and our to go processes of how we make that experience for the to go our food. We're putting a lot more effort into executing our to go food at a higher level and I think it's paying off for us as well as getting settled into full dining rooms for longer hours of the day. So a good problem to have. Speaker 100:36:34Yes. And Lauren, this is Michael. Just to add on, it was actually not in the 1st period during that colder or more winter weather. We saw the stronger growth in the gas and the sales of the to go business in the second and third periods of our Q1. So strong throughout, but it goes to everything Jerry talked about. Speaker 100:36:58Just we've made it the ease of that to go process. We really made that as easy as possible And the guests again continues to reward us for that and is using that to go on a regular basis. Speaker 1200:37:17That's awesome. And then just a quick one for modeling purposes. You talked about the quarter to date in April running 9.3%, which is incredible. Can you just remind us if there's anything we should be considering in terms of monthly compares for 2Q as we think about the cadence? And then any comments that you have on regions or regional differences? Speaker 1200:37:35Thanks so much. Speaker 100:37:38Yes, Lauren, it's Michael again. Nothing really that I would call out to be careful about over the coming months. And again, typically our May period tends to be busier than our April. And then June can look fairly similar to our April period. So nothing I would call out there. Speaker 100:38:02And as far as the trends that we've seen across region, certainly in the Q1, it was pretty strong across the country, maybe the South and Southeast, Southwest are a little bit stronger from a comp standpoint, but not dramatically different. So it was really a solid quarter nationwide and across all restaurants. Speaker 1200:38:34Great. Thanks so much. Operator00:38:38Your next question comes from Andrew Strelzik with BMO Capital Markets. Please go ahead. Speaker 1300:38:45Hey, good afternoon. Thanks for taking the question. A 2 parter on new store performance for me. I noticed in the release for the Texas Roadhouse stores open less than 6 months, there was an 8% decline in average weekly sales, and it's the Q3 in a row of declines and those have kind of accelerated over the last over that period. So just curious what is driving that? Speaker 1300:39:10Any color behind that would be great. And then just more broadly, color on new store performance would be great. Thank you very much. Speaker 100:39:20Hey, Andrew, it's Michael. Thanks for the question. Yes, that's something I mean that comes across in the numbers. Is some timing and regional impact in there. When you go back to the Q1 of last year, I believe it was 15 new stores, 3 of those were in California. Speaker 100:39:39Those are high volume restaurants. We're going to use some of our highest sales in the country out there and that was really pushing that number higher. So I would say the anomaly, if you want to call it anything, was how high that number had gotten in that Q1. Now we don't have those California stores in that 25 store number for the Q1. We're very happy, let me emphasize, very happy with the performance of our new stores and how they are performing. Speaker 100:40:13We don't expect every restaurant out of the gate to be doing $150,000 or 160,000 dollars per week in sales. But as we look across all of those, there is nothing that is concerning us about their performance or our ability to continue to open more stores. There's just always going to be a little bit of a timing issue and a region the states that they may open in. Speaker 300:40:41Great. That makes sense. Thanks a lot. Operator00:40:45Your next question comes from Jim Valera with Stephens. Please go ahead. Speaker 600:40:50Yes. Thanks for taking the question. I wanted to ask if we could get an update on the ButcherHouse initiatives. And maybe at a high level, do you really think of it as a way to build brand awareness or more of a frequency increaser or a way to get more customer data? And maybe one tag on to that as well. Speaker 600:41:11Does it help you guys with new site selection as you can start to get some frequency and data information on where people are ordering from? Speaker 200:41:22No, I think mostly what any of that retail segment of our business is about brand awareness. And we've done some really creative things. We've had a lot of fun with it. And I think that's the real focus on our retail. It's just really brand awareness and having some fun. Speaker 200:41:38We're continuing to look at every aspect of the business and see what we do with it in the future. But right now, we're uncertain. Speaker 600:41:46Okay. And then if I think about the performance of your brand, obviously, the foot traffic has been very strong, which is divergence from a lot of your peers. It seems like is there a scenario where as the macro gets tougher, the value proposition at Texas Roadhouse is such that you continue to source more people from peers in a way it actually makes your trends more resilient given the value positioning? Speaker 200:42:14Well, we certainly believe that and we continue to do what we do. We can't really control what they do with. We believe in our value that's built into our menu. We continue to try to be very conservative and take care of our business, but take care of our guests and really understand the dynamic of where we're at today. And so I just believe that we focus on our food being smoking hot, picture perfect, recipe right, fast, fun and friendly in our dining rooms. Speaker 200:42:39It's rewarding us and all three of our brands have excellent food that we're proud of. We love to hustle to help people and serve and that's what gives us the advantage I believe and we're really proud of everything that our operators are doing out there and they play this game at a very high level. Speaker 600:42:57Great. Thanks guys. I'll hop back in the queue. Operator00:43:01Your next question comes from Gregory Francfort with Guggenheim Securities. Please go ahead. Speaker 1400:43:08Hey, thanks. I appreciate the update on Bubba's and Jaggers. I'm just curious how you're thinking about balancing the capital priorities across the 3 brands in the next couple of years? And then for JAGGERS, maybe specifically, it seems like you're accelerating the franchise development. What's the plan long term on how you're thinking about the company operator versus franchise development there and maybe what your pitch to prospective franchisees looks like? Speaker 1400:43:34Thanks. Speaker 200:43:37Thank you for the question. I believe that we're going to stay focused on Roadhouse in that mid-twenty growth. Bubba's, we've talked a little bit about how we're building the pipeline and it is absolutely our 2nd brand and we're very invested and excited about what it's doing. JAGGER's is exciting for me in a lot of different ways. We've got 8 company stores and 3 franchise stores and we've got people interested. Speaker 200:44:01The food is incredible. Our service model is really working from a speed of service standpoint. So we are building our very first international restaurant with Jagger. So the dining and to really get our head around Jaggers and what it needs to be highly successful. We wanted to bring some partners in that could help us grow And that's what we're doing with our franchise partners. Speaker 200:44:29We're learning. We're partnering up. It's going to help us grow on the company side and on the franchise side. And it's hard to tell you what percentage right now going forward, but we're definitely leaning into both and learning a lot and we really appreciate our franchise interest in the JAGGERS concept. Thank you. Operator00:44:50Your next question comes from Jim Sanderson with Northcoast Research. Please go ahead. Speaker 1500:44:56Hey, thanks for the question. I wanted to go back to a little bit more insight on Bubba's 33. I think the comp was a little bit weaker than Texas Roadhouse. But can you walk through the same store sales breakdown traffic price mix for Bubba's? Speaker 100:45:13Hey, Jim, it's Michael. We actually don't get into that detail as much or at least not at this time into that breakdown. I mean, but yes, you're correct. It's not it did not comp to the same level that Roadhouse did, but again Roadhouse is kind of different than everyone else out there. But again, we are and with only 45 restaurants, the handful are not growing, it can skew that number. Speaker 100:45:43But overall, we saw some great performance in Bubba's early this year and are very encouraged by the margins that we're seeing there and what that business can deliver going forward. Speaker 200:45:57Yes. And I'll add on just a little bit on We're really if we just look at Bubba's and not compare it to Roadhouse, we're very, very happy with the performance, not only on our sales, we're attacking sales, we're in controlling our costs, we've done some things in the building to help us long term, and we've done a little bit of menu engineering. We've added a combo appetizer, which has really been a success and reorganized a little bit of how we do wings. And we've got a new sandwich we're excited about to be offering out there. And so there's a lot of momentum. Speaker 200:46:28As I look at the Q1 in Bubba's 33, it tells me we're in the right business. Burgers and pizzas and cold beer and rock and roll, we're going to be just fine. Speaker 1500:46:38Okay. Can I assume from that that you had positive traffic in 2024 at Bubba's? Is that fair? Speaker 100:46:47Yes, I think that's fair to say. Speaker 1500:46:49All right. I just want to ask a follow-up question also on same store sales in April. Is there any issue related to the Easter calendar shift that impacted performance? Speaker 100:47:03With Easter, no. Easter was still felt within our April period. So no impact from Easter. Speaker 1500:47:09No shift between okay, very, very good. And then last question for me. How does Texas Roadhouse usually do for Mother's Day? Is that an important event or not so much? Speaker 200:47:21Yes. It's an incredible event. It's all a part of Valentine's Day, Mother's Day, Father's Day. We kind of call it the Triple Crown. And speaking of that, the first leg of the Triple Crown is here in Kentucky over the next couple of days and we're excited about that. Speaker 200:47:36But, yeah, Mother's Day is huge for Texas Roadhouse and the restaurant industry overall. And we have some dominant players out there. We're excited about Mother's Day and Father's Day. Speaker 300:47:47And Jim, this is Chris. I'll just throw in, there's also Mexican Mother's Day that is celebrated as well. So we have that as a part of our repertoire as well. Speaker 1500:47:58All right. Thanks. I'll pass it on. Thank you very much. Speaker 200:48:01Thank you. Operator00:48:04Your next question comes from Jake Bartlett with Truist Securities. Please go ahead. Speaker 1600:48:10Great. Thanks for taking the question. My first is just a clarification or kind of a modeling question. But do you expect to open company owned JAGGERS of the 30 company owned stores you expect? I think you said 4 Bubba's. Speaker 1600:48:24Any JAGGERS in there? And then the real question, the bigger question is about G and A. Anything we should think about in the Q2? I know you typically don't disclose on how much exactly you spent on the conference, but if there's any variance, anything we should be aware of as we try to model G and A. As I kind of try to make the adjustments in the Q1, I get about 10 basis points of leverage in the Q1, adjusting for the one time last year. Speaker 1600:48:53Is that the kind of leverage you expect going forward just for Speaker 200:48:56the year as a whole? Thank you. I'll let Michael answer that second part. On the JAGRs growth, yes, we only have 1, maybe 2 this year as far as we can look at, but I'm building the pipeline. I do expect that to grow in the future. Speaker 200:49:12We're working some deals right now that are looking really positive. I believe we had 3 last year. And so we'll continue to look at the ramp up on that because it is now hitting the goals and the targets that we're looking for. Speaker 100:49:27And this is Michael. On the G and A question, in the Q1, yes, we did on an unadjusted basis, we did get a little bit of leverage. I think the next several quarters, again, some of it will depend upon your assumptions for top line revenue, but I do think it may be a little bit tougher for us to get leverage on G and A in the second and third quarter. When you think about the some of the investments we're making in Roadhouse Technology and some of the other things that we're doing internally, we're definitely investing in the business and this being a 50 3 week year for us, which should result in could continue to result in strong performance. We'll probably be taking some extra accruals for bonuses and compensation during the year. Speaker 100:50:22So I would expect you could probably see G and A for the year being flattish range, but second and third quarters could be a little bit more difficult to get some leverage. Speaker 300:50:33And I'll just add to that. In the back half of the year, it could be impacted by the change in the timing of our equity grants that we talked about. And that is probably what you were referring to at least in part there in the second and third quarter. Speaker 1600:50:46Great. And if I could sneak just one quick one in. On the extra operating week impact on EPS, it's greater than just the proportion of Speaker 700:50:56the week. Speaker 1600:50:57I think in 2019, there was a 60 basis points benefit on the restaurant level margins from the extra operating week. Is that kind of any reason to think that would be different this time around? Speaker 100:51:09Yes. I mean, I think in the prepared remarks, we said we're expecting about 4% benefit to EPS from the next few weeks and whether that's 60 basis points or somewhere it would obviously benefit some parts of margin, it's going to benefit some items outside of margin, but we estimate about a 4% benefit to EPS. Speaker 200:51:30Okay. Thank you very much. Operator00:51:34Your next question comes from Brian Vaccaro with Raymond James. Please go ahead. Speaker 1700:51:40Hi, thanks and good evening. Just regarding the commodity outlook, I'm curious to just get your perspective on the supply and demand dynamics in the beef market. Just what you might be hearing that's driving the near term favorability? And then kind of what informs your view that beef costs could move higher later in the year? And then is there anything worth noting on the non beef side? Speaker 1700:51:59And you kind of maybe level set what level of inflation you're expecting on that other 50% of your basket? Speaker 100:52:07Hey, Brian, it's Michael. Maybe I'll do the easier part first. Another half of the basket, flat to deflationary, really nothing to call out or speak of there. And similar, it's really continued to perform as we would expect it. So being items being flat to deflationary and offsetting a little bit of the beef inflation. Speaker 100:52:31The supply has been a little bit better than industry wide than what was anticipated. So that certainly helped beef in the 1st part of the year and what we think will continue to help it over the next several months. And then the retail demand has been probably a little bit weaker or what they've been marketing has probably led to a benefit for us. So I think we've seen less marketing of rib eyes and maybe more marketing of strips by the grocery stores and obviously rib eye is a more important item for us. So things like that have led to some of that benefit that we've seen. Speaker 100:53:13And our expectation is that things are going to catch up and that supply tightening will have a bigger financial impact on us in the industry as we move into the back half of the year. Speaker 1700:53:29All right. Thank you for that. And then just one quick follow-up on Bubba's, if I could. Now I understand the strong sales that you're seeing. And I think store margins, at least in 2023, were a little bit below 14%, if my notes are right. Speaker 1700:53:44I guess I'm just curious, where would you like to see that over time as part of your unit economic model? And then what's the path towards driving higher margins at the Bubba's brand? Thanks very much. Speaker 100:53:58Bubba's has actually seen quite a bit of improvement early this year and I think you'll see that in some of our documents that will get filed in the coming days. So I think a margin again in the 17% to 18% range for above is kind of what we're looking for just like what we're looking for on the Roadhouse side. And again, that Bubba's team has been working hard and has made great strides. And I think you're going to see the fruit of that labor coming through here. Speaker 300:54:32Yes. And I'll just add to that. What you're seeing is and we're recognizing it here today with Vanessa here with us, but you have local Bubba's that are doing fantastic work and with their local store marketing and in places like Albuquerque and others where the sales are growing. And that's really what it's going to take. And again, to Michael's earlier point, there's only 45 Bubba's out there and they're working really hard on expanding their sales. Speaker 300:54:58And now that's beginning to come through. And I think that that Michael's comment about the 17% to 18% makes a lot of sense. Speaker 1700:55:07Very helpful. Thank you. Operator00:55:11Seeing no further questions at this time, I will now turn call back to Jerry Morgan for any closing remarks. Speaker 200:55:18I just wanted to close and say thank you all very much for your support and time. And I know here in our hometown of Louisville, Kentucky, hosting the Kentucky Derby, it's going to be a fantastic weekend. Hope you all have a great one. 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