Texas Roadhouse, Inc.

Good evening. By now, you should have access to our earnings release for the third quarter and it's September 24th, 2024. It may also be found on our website at texasroadhouse.com in the investor 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. 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. 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. Following the prepared remarks, we will be available to answer your questions. In order to accommodate everyone that would like to ask a question, could everyone please limit yourself to one question? Now I would like to turn the call over to Jerry.

Thanks, Michael, and good evening, everyone. We are pleased to report strong third quarter results which were highlighted by 8.5% same-store sales growth and approximately $1.3 billion of revenue. These results are a testament to our operators continuing to create an environment where roadies want to work and our guests want to dine. Since last quarter, I had the opportunity to visit with managers and roadies at a number of our international franchise restaurants. Also, over the past five weeks, I have been traveling the country meeting with our managing partners during our annual fall tour. Both internationally and domestically, I can tell you the pride and passion our operators have for running their restaurants have never been higher. As always, the feedback we receive from managing partners during these listening sessions is extremely beneficial as we learn what our owner-operators need to run their business. On the development front, We opened seven Texas Roadhouse company-owned locations in the third quarter. For the full year, we expect to open approximately 30 restaurants across all brands. Our franchise partners opened three international Texas Roadhouse restaurants during the quarter. This puts them on track for a total of 14 openings this year, including three Jaggers. I also want to call out the recent October opening of our first international Jagger's location on a US military base in South Korea. This marks our fifth franchise restaurant location on a US military base. Looking ahead to 2025, we are targeting approximately 30 company-owned restaurant openings across all brands. Additionally, we have a tentative agreement with one of our largest domestic franchisees to acquire 13 Texas Roadhouse restaurants at the beginning of 2025. Our international Texas Roadhouse franchise partners are currently expecting seven openings next year, while our domestic Jagger franchise partners are targeting three new locations. During the third quarter, We also completed our normal review of menu pricing with our operators. As a result, we rolled out new menus at the beginning of the fourth quarter, which included a price increase of less than 1%. We remain proud of our everyday value proposition and believe this is the appropriate level of pricing. Also, our technology initiatives continue as planned and we remain encouraged by the positive feedback we are receiving with over 200 digital kitchen conversions completed so far this year. We feel confident in achieving our target of over 250 conversions by the end of this year. We also remain on track to convert nearly all of our restaurants to a digital kitchen by the end of 2025. Additionally, we are making progress on the upgrading of our restaurant guest management system. Finally, October has been a very rewarding month for our company. In addition to fall tour, we had the privilege of celebrating 20 years as a public company by ringing the closing bell at NASDAQ. We are very proud of the growth we have seen as a public company. We have expanded from one brand to three. We have increased our footprint from just over 175 restaurants to nearly 775. And we have grown Rhody Nation from over 10,000 employees to nearly 100,000. Also, we were named the 2024 brand icon by Nation's Restaurant News. We are truly humbled to be the first casual dining restaurant to receive this award. All of these events were even more special because we were surrounded by the best operators and support team in the industry. Now, Chris will provide some thoughts. Thank you, Jerry.

You know, fall tour is quickly becoming one of my favorite times of the year. The conversations with our operators have proven to be really important and help us all perform our best. And the NASDAQ bell ringing was such a special moment for all of us. It was especially meaningful that we had 50 of our managing partners on stage with us. We were able to demonstrate in a visible and tangible way just how important our managing partners are to the success of our company. Now moving to the third quarter, weekly sales averaged $153,000 at Texas Roadhouse, $117,000 at Bubba's 33, and $72,000 at Jagger's our quick service brand. We were especially encouraged to see that all three brands delivered positive traffic and sales growth, and this momentum has carried forward into the beginning of our fourth quarter. As we look forward to the remainder of this year and into next year, we believe the 0.9% menu price increase will allow us to maintain our value proposition and our traffic and mix levels. Additionally, we continue to see a steady to more positive outlook for inflation within commodities and labor. Commodity inflation, driven by lower than forecasted beef costs, was once again below our guidance in the third quarter. This has also resulted in an improvement in our outlook for fourth quarter commodity inflation and factors into our initial expectations for next year's inflation. At this time, we are updating our full year commodity inflation guidance to less than 1%. This adjustment reflects both the impact of lower than initially forecasted inflation in the third quarter and our current expectation of relatively flat commodity price levels in the fourth quarter. Also, we are establishing our initial 2025 commodity inflation guidance at 2% to 3%. Wage and other labor inflation during the third quarter remained in line with our guidance, and we believe this trend will continue in the fourth quarter. We were also pleased to see that our labor hour growth relative to traffic growth remained well below our historical levels. As we approach the end of the year, we are narrowing our full year 2024 labor inflation guidance to approximately 4.5%. For 2025, we are forecasting wage and other labor inflation of 4 to 5% with mandated increases representing as much as 1.5% of the increase. With regard to cash flow, we ended the third quarter with 189 million of cash. Cash flow from operations was 139 million, which was offset by 141 million of capital expenditures, dividend payments, and share repurchases. As Jerry mentioned, we do have a tentative agreement in place to acquire 13 franchise restaurants at the beginning of 2025. Included in this acquisition will be seven restaurants in Indiana and Ohio and six in California. Our current expectation is to fund this acquisition through existing cash on hand. Finally, for 2025, we are establishing our initial capital expenditure guidance at approximately $400 million, excluding the aforementioned franchise restaurant acquisition costs. This should provide sufficient capital to build new restaurants, maintain, expand, or relocate our existing restaurants and invest in our various technology initiatives. As always, we believe these investments are a great use of our capital and should result in further shareholder value creation. And now, Michael will walk us through the third quarter results.