Texas Roadhouse, Inc.

Texas Roadhouse fourth quarter earnings conference call. Today's call is being recorded. All participants are now in a listen-only mode. After the speaker's remarks, there will be a question and answer session. At that time, if you would like to ask a question, please press star, then the number one on your telephone keypad. Should anyone need assistance at any time during the conference, please press star zero, and an operator will come on the line to assist you. I would now like to introduce Tonya Robinson, the Chief Financial Officer of Texas Roadhouse. You may begin your conference.

Thank you, Brent, and good evening, everyone. By now, you should have access to our earnings release for the fourth quarter ended December 28th, 2021. It may also be found on our website at TexasRoadhouse.com in the Investors section. Before we begin our formal remarks, I need 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. We 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, including factors related to the COVID-19 pandemic. 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 Tradehouse. Following our remarks, we will open the call for questions. Now I'd like to turn the call over to Jerry.

Thanks, Tanya, and good evening. We are pleased to finish 2021 with strong revenue and earnings growth versus both the prior year and 2019. Our operators continue to do a great job building sales, providing a legendary experience to our guests, and holding onto margin dollars in the face of high commodity costs. We ended the year with comp sales growth of 18.3% compared to 2019, and that positive momentum has continued into the new year with comp sales up 20.6% for the first seven weeks of this year compared to 2021. We're excited about 2022 and the opportunities ahead of us. including another year of top-line growth driven by our new store openings, franchise acquisitions, and sales growth at our existing restaurants. We will continue to deal with many of the same issues that we faced last year, including commodity inflation, staffing challenges, and supply shortages. However, in my experience as an operator, each year in the restaurant industry comes with its own set of challenges and opportunities. As usual, we will focus on what we can control and make the best decisions for the long-term benefit of our restaurants and our brands. We will stick to the fundamentals at Texas Roadhouse. We will continue to build operational excellence in name recognition at Bubba's 33, and we will refine our growth plan for Jaggers. We will continue to focus on our roadies by ensuring that we are hiring, training, and treating them right. and we will continue to embrace technology and use it to enhance the guest experience while still emphasizing the importance of face-to-face interaction between our restaurant staff and our guests. We are finalizing plans for a mid-April menu price increase of approximately 3%. At this time, we have not seen a negative reaction from the price increases that we took in May and November of 2021. All indications are that our guests continue to view Texas Roadhouse as a great value because of the prices that we charge and the quality of food and service that we provide. However, we will never take our guests for granted and know that we must earn their business each and every day. On the development front, during the fourth quarter, despite equipment supply challenges, we were able to open all 11 restaurants that were scheduled to open. These openings included nine Texas Roadhouses, one Bubba's 33, and one Jagger's. We remain very pleased with how our new restaurants are performing. To put that into perspective, for the first seven weeks of 2022, the 10 Texas Roadhouse and Bubba's 33 restaurants that opened in the fourth quarter averaged over 142,000 in weekly sales. For 2022, we are targeting 25 company-owned restaurants, including as many as four Bubba's 33 openings. We also expect our franchise partners to open as many as five Texas Roadhouses in 2022. The reduction in the number of expected openings in 2022 is due to continued delays in the initial permitting and building approval process. With this step taking longer than normal, we are pushing several second-half 2022 openings into 2023. Going forward, we still believe that building new restaurants and taking care of our existing restaurants are the best uses of cash. At the same time, our strong balance sheet and operating cash flow allows us to also create value for our shareholders and our employees through dividends, share repurchases, and franchise acquisitions. Finally, I want to thank all of our roadies, our restaurant managers, and everyone at our support center for their tremendous efforts in 2021. I also want to emphasize to each and every one of you that we will remain on offense in 2022. That means keeping our restaurant staffed with the best talent, serving smoking hot entrees and heaping sides and ice cold beverages. As your partner and head coach, I promise you that this is how we will continue our winning ways. Now, Tanya will provide a financial update.