Texas Roadhouse(TXRH) - 2024 Q4 - Annual Report

Revenue and Sales Performance - Total revenue increased by $741.7 million or 16.0$5.4 billion in 2024 compared to $4.6 billion in 2023, driven by an increase in comparable restaurant sales and store weeks[276]. - Comparable restaurant sales increased by 8.5$114.7 million in revenue and provided a 2% benefit to store week growth[277]. - Franchise royalties and fees increased by $4.4 million or 16.1$5,373.3 million, a 16.0% increase from $4,631.7 million in 2023[283]. Restaurant Operations and Expansion - In 2024, the company opened 31 company restaurants, including 26 Texas Roadhouse restaurants, four Bubba's 33 restaurants, and one Jaggers restaurant[255]. - The company continues to evaluate opportunities for expansion in both domestic and international markets[251]. - The company focuses on maintaining and improving restaurant-level profitability through various operational strategies[255]. Financial Performance - Net income increased by$128.7 million or 42.2% to $433.6 million in 2024 compared to$304.9 million in 2023, primarily due to higher restaurant margin dollars[278]. - Restaurant margin dollars increased by $207.8 million or 29.4$915.8 million in 2024, with restaurant margin as a percentage of sales rising to 17.1% from 15.4%[279]. - Net cash provided by operating activities was $753.6 million in 2024, up from$565.0 million in 2023[318]. Cost Management - Food and beverage costs decreased to 33.4% of restaurant and other sales in 2024 from 34.6% in 2023, despite commodity inflation of 0.7%[300]. - Restaurant labor expenses decreased to 33.1% of restaurant and other sales in 2024 from 33.4% in 2023, despite wage inflation of 4.6%[301]. - General and administrative expenses decreased to 4.2% of total revenue in 2024 from 4.3% in 2023[309]. - Pre-opening expenses were $28.1 million in 2024, a decrease from$29.2 million in 2023[306]. Capital Allocation and Shareholder Returns - The company has a stock repurchase program approved for up to $500 million, replacing the previous program of$300 million[257]. - In 2024, the company repurchased 461,662 shares of common stock for $79.8 million, totaling$763.3 million repurchased since inception[258]. - The Board declared a quarterly cash dividend of $0.68 per share, representing an 11$354.3 million, dividends of $162.9 million, and stock repurchases of$79.8 million[280]. - Capital expenditures totaled $354.3 million in 2024, compared to$347.0 million in 2023[322]. Tax and Impairment - The effective tax rate increased to 15.3% in 2024 from 12.5% in 2023, with a forecasted rate of 15% to 16% for 2025[312]. - In 2024, the company recorded impairment and closure costs of $1.2 million related to a building impairment and ongoing closure costs for relocated stores[344]. - Impairment and closure costs increased to$1.2 million in 2024 from $0.3 million in 2023[308]. Market Risks and Commodity Management - The company has been operating during periods of inflation, primarily driven by wage and commodity inflation, with some impacts offset by menu price increases[348]. - The company is exposed to market risk from changes in interest rates on variable rate debt, with no outstanding borrowings on its credit facility as of December 31, 2024[349]. - The company employs various purchasing and pricing contract techniques to secure low-cost ingredients, but extreme increases in commodity prices could adversely affect future results[350]. - The beef supply is highly dependent on four vendors, posing a risk of supply shortages or higher costs if these vendors fail to fulfill their obligations[351]. - The company may face unpredictable price volatility in commodities due to prevailing market conditions[350]. - The company does not currently use financial instruments to hedge commodity prices but will continue to evaluate their effectiveness[350]. Goodwill and Impairment Testing - As of December 31, 2024, the Texas Roadhouse reporting unit had allocated goodwill of$169.7 million, with no other reporting units having goodwill balances[346]. - The company conducts annual goodwill impairment tests and assesses qualitative factors to determine potential impairment[345]. - No indicators of impairment were identified for the Texas Roadhouse reporting unit through the end of the fourth quarter[347].