Content analysis
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Financial report summary
?Competition
Texas RoadhouseRisks
- We have experienced and continue to experience inflationary conditions with respect to the cost for food, grocery items, labor and utilities, and we may not be able to increase prices or implement operational improvements sufficient to fully offset inflationary pressures on such costs, which may harm our business, financial condition and results of operations.
- Our financial results depend significantly upon the success of our existing and new restaurants.
- Our long-term success is highly dependent on our ability to successfully identify appropriate sites and develop and expand our operations in existing and new markets.
- If we fail to manage our growth effectively, it could harm our business.
- Any decision to either reduce or accelerate the pace of openings may positively or negatively affect our comparative financial performance.
- We occupy most of our restaurants under long-term non-cancelable leases for which we may remain obligated to perform under even after a restaurant closes, and we may be unable to renew leases at the end of their terms.
- Changes in economic conditions could harm our business, financial condition and results of operations.
- Changes in consumer buying patterns could harm our business, financial condition and results of operations.
- Damage to our reputation or lack of acceptance of our brand in existing or new markets could harm our business, financial condition and results of operations.
- Our expansion into new markets may present increased risks due to our unfamiliarity with the area.
- Approximately 42% of our restaurants are located in Texas and, as a result, we are sensitive to economic, adverse weather and other trends and developments in that state.
- We are susceptible to economic and other trends and developments, including adverse weather conditions, in the local or regional areas in which our restaurants are located.
- Acts of violence at or threatened against our restaurants or the centers in which they are located, including active shooter situations and terrorism, could harm our business, financial condition and results of operations.
- The impact of negative economic factors, including the availability of credit, on our landlords and surrounding tenants could harm our business, financial condition and results of operations.
- Changes in food availability and costs could harm our business, financial condition and results of operations.
- Food safety and foodborne illness concerns may have an adverse effect on our business by reducing demand and increasing costs.
- Customer traffic at our restaurants could be significantly affected by competition in the restaurant industry in general and, in particular, within the dining segments of the restaurant industry in which we compete.
- Our marketing programs may not be successful.
- The impact of restaurant openings and closures could result in fluctuations in our financial performance.
- Opening new restaurants in existing markets may harm sales at our existing restaurants.
- Our growth may strain our infrastructure and resources, which could slow our development of new restaurants and adversely affect our ability to manage our existing restaurants.
- Our insurance policies may not provide adequate levels of coverage against all claims, and fluctuating insurance requirements and costs could negatively impact our profitability.
- Security breaches of confidential customer information in connection with our electronic processing of credit and debit card transactions may harm our business, financial condition and results of operations.
- We may not be able to adequately protect our intellectual property, which, in turn, could harm the value of our brand and our business.
- Information technology system failures or breaches of our network security could interrupt our operations and harm our business, financial condition and results of operations.
- A major natural or man-made disaster could have a material adverse effect on our business.
- Increases in our labor costs, including as a result of changes in government regulation, could slow our growth or harm our business.
- Labor shortages could increase our labor costs significantly or restrict our growth plans.
- Our business operations and future development could be significantly disrupted if we lose key members of our management team.
- New legal or regulatory requirements, information or attitudes regarding diet and health or adverse opinions about the health effects of consuming our menu offerings, could affect consumer preferences and negatively impact our results of operations.
- Federal, state and local laws and regulations may have a significant adverse impact on our operations.
- Restaurant companies have been the target of class-actions and other litigation alleging, among other things, violations of federal and state law.
- We may be required to record asset impairment charges in the future.
- Failure of our internal control over financial reporting could harm our business, financial condition and results of operations.
- Federal, state and local tax laws may harm our business, financial condition and results of operations.
- Limitations in our Revolving Credit Facility may limit our ability to invest in the ongoing needs of our business and if we are unable to comply with our financial covenants, our liquidity and results of operations could be harmed.
- We may be unable to obtain debt or other financing on favorable terms or at all.
- The price of our common stock may be volatile and you could lose all or part of your investment.
- Future sales of our common stock by us, existing stockholders or holders of equity awards in the public market could lower our share price and any additional capital raised by us through the sale of our common stock or the granting of additional equity-based compensation may dilute your ownership in us.
- If securities analysts or industry analysts downgrade our shares, publish negative research or reports, or do not publish reports about our business, our share price and trading volume could decline.
- Anti-takeover provisions in our charter documents and under Delaware law could make an acquisition of us more difficult, limit attempts by our stockholders to replace or remove our current management and limit the market price of our common stock.
- Since we do not expect to pay any dividends for the foreseeable future, investors may be forced to sell their stock in order to realize a return on their investment.
- Our ability to raise capital in the future may be limited.
Management Discussion
- Revenue. Revenue was $461.3 million for the year ended December 31, 2023 compared to $422.2 million for the year ended December 25, 2022. The Company's fiscal year of 2023 included 53 weeks as compared to 52 weeks in fiscal year 2022. Revenue attributed to the extra operating week was $8.7 million. In addition to the extra operating week, the increase was primarily related to an increase in our comparable restaurant sales as well as incremental revenue from an additional 223 operating weeks provided by new restaurants opened during and subsequent to fiscal 2022. For fiscal year 2023 and 2022, off-premise sales were approximately 29% and 27% of total revenue, respectively.
- Comparable restaurant sales increased 3.3% for the 52 week comparable period ended December 24, 2023 as compared to the same period in 2022 primarily driven by a 4.8% increase in average check, partially offset by a 1.5% decrease in average weekly customers.
- Cost of sales. Cost of sales as a percentage of revenue decreased to 25.1% during the year ended December 31, 2023 from 27.2% during fiscal 2022 primarily driven by overall commodity deflation of approximately 4% during the year as compared to the same period a year ago as well as leverage on a menu price increase taken subsequent to December 25, 2022.