Same-store sales for company-operated Texas Roadhouse are running 25.5% above 2019 levels through the first month of third quarter, the casual-dining chain revealed Thursday—an extraordinary jump even for a brand known for posting head-turning financial results.
The comp gain follows a 21.3% two-year rise in same-store domestic sales for company-operated units during the second quarter ended June 29. Franchised stores pushed 19.4% past their 2019 benchmark.
Other figures show that dine-in sales are exceeding pre-pandemic levels without a major erosion of off-premise business. Takeout orders generated 14.2% of Roadhouse’s average weekly unit sales of $123,927 in July, a slip of 2.7 percentage points from the mix for Q2. Roadhouse does not offer delivery of its meals.
“However” said CEO Jerry Morgan, “some challenges still remain with certain cost pressures that we expect to continue at least through the end of the year.”
The company faced a sharp upswing in commodity prices, particularly for beef, its primary protein. Executives said they expect food costs to top their previous projections by 7% for 2021, an annualized rate that translates into a 10% jump during the third and fourth quarters.
Labor expenses also increased sharply. The company said it spend 48% more on labor for Q2 than it did a year earlier, when hours were cut and employees were furloughed because of a COVID-driven drop in demand. Labor expenses for the most recent period totaled $288.2 milllion.
Restaurant margins slipped in Q2 to 17.7 %, a deceleration of the 18.8% clocked year-to-date for 2021, but just a tenth of a point off the figure for Q2 of 2019. Company officials said they're confident that margins will remain between 17% and 18% through the remainder of 2021, despite escalating costs.
Overall, Roadhouse’s net income for Q2 totaled $75.5 million, compared with a loss of $33.6 million for the year-ago period and a profit of $95.2 million for Q2 of 2019.
Revenues for the most recent period amounted to $898.8 million, an 88.9% leap from 2020 and a 30.3% rise from two years ago.
The company ended Q2 with 517 company-run or franchised restaurants, including 34 units of Bubba’s 33, a casual concept, and three Jaggers quick-service drive-thrus.