Q4 2024 Texas Roadhouse Inc Earnings Call
Good evening and welcome to the Texas Roadhouse fourth quarter earnings Conference call. Today's call is being recorded all participants are now in a listen only mode. After the Speakers' 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 assist you.
Speaker Change: I would now like to introduce Michael Balan head of Investor Relations for Texas Roadhouse, you May begin your conference.
Speaker Change: Thank you Sarah and good evening Bye now you shut them access to our earnings release for the fourth quarter ended December 31, 2024. It may also be found on our website at Texas Roadhouse Dotcom.
Speaker Change: Investors section I would like to remind everyone that part of our discussion today will include forward looking statements.
Speaker Change: These statements are not guarantees of future performance and therefore undue reliance should not be placed upon them.
Speaker Change: We refer all of you to our earnings release, and our recent filings with the SEC. These.
Speaker Change: 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.
Speaker Change: Yes.
Speaker Change: On the call with me today is Gerry Morgan, Chief Executive Officer of Texas, Roadhouse, and Chris Munroe, Our Chief Financial Officer. Following the prepared remarks, we will be available to answer your questions in order to accommodate everyone would like to ask the question can everyone. Please limit yourself to one question now.
Speaker Change: I would like to turn the call over to Gerry Thanks, Michael and good evening, everyone 2024 was a memorable year for Texas Roadhouse with strong performance in all aspects of our business.
Speaker Change: Thanks to positive traffic growth at all three brands revenue grew to nearly $5 $4 billion.
Speaker Change: An average unit volume exceeded $8 million for the first time in our history. This was the second consecutive year of double digit increases in restaurant margin dollars income from operations and earnings per share.
Speaker Change: 2024 was also special for a number of milestones, we achieved including opening our 750 at system wide restaurant and our first international Jaggers. Additionally, we were named the brand icon by nation's restaurant news and celebrated our 20 year anniversary as a public.
Speaker Change: Company.
Speaker Change: There is also no doubt that our people first mentality was alive and well in 2024 as we continued giving back to the communities. We serve this included partnering with homes for our troops to fully fund their 400 custom built home raising.
Speaker Change: Raising over $925000 for the American Tinnitus Association in honor of our late founder Kent Taylor.
Speaker Change: And on Veterans day, we honored over 1 million veterans with a free meal or a voucher for a future meal.
Speaker Change: On the development front, we opened 31 company owned restaurants across all brands in 2020 for our franchise partners also opened 11 International Texas Roadhouse restaurants. In addition to three jaggers.
Speaker Change: For 2025, we continue to expect approximately 30 company restaurant openings across the three brands two.
Speaker Change: 2025, we will also benefit from the January one acquisition of 13 franchise restaurants in Indiana, Ohio and California.
Speaker Change: Our outlook for franchise development also remains unchanged with an expectation of seven international, Texas Roadhouse openings and three domestic jaggers openings and.
Speaker Change: In 2025, we believe value will remain top of mind for the consumer and it was a focal point for our operators during our recently completed menu pricing calls.
Speaker Change: Based on these calls we will be implementing a 1.4 menu price increase at the beginning of the second quarter. We are confident this level of pricing maintains our everyday value, which has always been one of our competitive advantages also to address evolving consumer bed.
Speaker Change: <unk>.
Speaker Change: Preferences, we are offering a variety of mark tails at Texas, Roadhouse and Bubbas 33.
Speaker Change: We are monitoring their performance and contribution to our product mix and early indications are positive.
Speaker Change: Our technology initiatives. This year will primarily be a continuation of our 2024 projects. We expect to complete the conversions of all locations to a digital kitchen by the end of the year.
Speaker Change: These conversions are creating a more efficient kitchen, and a less stressful environment for our Roadies. We will also continue upgrading the guest management system that our restaurants use at the host stand. These upgrades are allowing us to quote more accurate wait times and improve seating utilization.
Speaker Change: Well, we are talking today about our 'twenty 'twenty four results our operators turned their attention to 2025 months ago.
Chris Munroe: They remain focused on what we believe is the most important to our guests fresh made from scratch food high level hospitality and everyday value. We are confident that they will deliver with a little rowdy enthusiasm another year that will make our employees guests and shareholders proud now Chris.
Chris Munroe: We will provide some thoughts.
Chris Munroe: Thanks, Jerry there certainly is a lot about 2024 to celebrate.
Chris Munroe: The tremendous efforts of our operators resulted in a same store sales increase of eight 5%, including four 4% traffic growth.
Chris Munroe: Also full year weekly sales averaged 159000 at Texas Roadhouse 119000 at Bubbas 33, and 71 jaggers.
Chris Munroe: And this momentum continued and the bottom line with meaningful margin dollar improvement for all three brands.
Chris Munroe: The end result of this performance was a total return of 44% for fiscal year 2024.
Chris Munroe: Consisting of 42, 5% EPS growth.
And a one 5% dividend yield.
Chris Munroe: Additionally, we ended the year with over $245 million of cash and generated over $750 million of cash flow from operations This'll.
Chris Munroe: This allowed us to once again self fund all of our capital allocation priorities, including $354 million of capital expenditures $163 million of dividends and $80 million of share repurchases.
Chris Munroe: Moving on to 2025, our guidance for wage and other labor inflation remains unchanged at 4% to 5%.
Chris Munroe: It will largely be driven by state mandated wage increases the impact of the recently completed franchise acquisition.
Chris Munroe: Higher benefits expense.
Chris Munroe: Turning to commodities, we are updating our 2025 inflation guidance to 3% to 4% based primarily on updated cattle supply expectations, which now project a tighter supply in the back half of 2025 than originally anticipated.
Chris Munroe: For 2025, our capital expenditure guidance of approximately $400 million remains unchanged.
Chris Munroe: This amount does not include the 78 million used at the beginning of 2025 to complete the previously mentioned acquisition.
Chris Munroe: 13 franchise locations.
Chris Munroe: We have a full pipeline of new restaurants for all three brands as well as a good number of bump outs.
Speaker Change: <unk> additions and other projects planned for the year.
Speaker Change: We will also be relocating as many as nine of our higher performing Texas roadhouse restaurants to new larger locations with more parking.
Speaker Change: While building, new restaurants, and maintaining our existing locations remains our top capital allocation priority. We are also allocating capital for other key initiatives, including the aforementioned franchise acquisition.
Speaker Change: Additionally, today, we announced an 11% increase to our quarterly dividend.
Speaker Change: And a newly authorized $500 million share repurchase program.
Speaker Change: With a full development pipeline strong balance sheet and healthy cash flow trends, we are well positioned for another year of solid growth and shareholder returns and now Michael will walk us through the fourth quarter results.
Michael Balan: Thanks, Chris for the <unk>.
Fourth quarter of 2024, we reported revenue growth of 23, 5%, primarily driven by a six 6% increase in comparable average unit volume and 13, 7% store week growth.
Michael Balan: We also reported a restaurant margin dollar increase of 37, 3% to $243 million and a diluted earnings per share increase of 61% to $1 73.
Michael Balan: These measures were positively impacted by an additional week in our December period, which resulted in 14 weeks in the fourth quarter of 2024 compared to 13 weeks during the fourth quarter of 2023.
Michael Balan: We estimate the additional week positively impacted diluted earnings per share growth for the fourth quarter of 2024 by over 20% and full year 2024 by approximately 5%.
Michael Balan: Average weekly sales in the fourth quarter were $154000 with to go representing 20.
Michael Balan: We're 13% these total weekly sales comp.
Michael Balan: Comparable sales increased seven 7% in the fourth quarter, driven by four 9% traffic growth and a two 8% increase in average check.
Michael Balan: By month comparable sales grew eight 3% six 9% and seven 9% for October November and December periods, respectively.
Michael Balan: And despite the impact of weather and calendar shifts comparable sales for the first seven weeks of the first quarter of 2025 were up two 9% with our restaurants, averaging sales of over $157000 per week during that period.
Michael Balan: Also please keep in mind because of the 50 <unk> week in 2024, our comparable sales growth in 2025 is based on a different.
Michael Balan: Different set of weeks than what is included in our 2024 reported restaurant sales. This mismatch of weeks will result in comparable sales being as much as one 5% higher than average weekly sales in the first quarter.
Michael Balan: In the fourth quarter restaurant margin dollars per store week increased 28% year over year to approximately $26000 restaurant margin as a percentage of total sales increased 172 basis points to 17%. The margin improvement included an estimated 40.
Michael Balan: Five basis point benefit from the additional week.
Michael Balan: Food and beverage cost as a percentage of total sales were 33, 5% for the fourth quarter.
Michael Balan: The 65 basis point year over year improvement was primarily driven by the benefit of a two 8% check increase offsetting the 0.3% commodity inflation for the quarter commodity inflation for full year 2024 was 0.7% which was in line with our guidance of <unk>.
Michael Balan: Less than 1%.
Michael Balan: Labor as a percentage of total sales decreased 10 basis points to 33% as compared to the fourth quarter of 2023 labor dollars per store week increased eight 2% due to wage and other labor inflation of 5% growth in hours of two 6% in <unk>.
Michael Balan: Higher group insurance claims expense of 0.6%.
Michael Balan: Adjusting for the impact of the additional week labor hour growth for the quarter was approximately 2%.
For the full year wage and other labor inflation came in at four 6%, which was the midpoint of our 2020 for guidance.
Michael Balan: Other operating costs were 15% of sales, which was 82 basis points better than the fourth quarter of 2023, the leverage was driven by the benefit of the additional week and moderating cost pressures.
Michael Balan: There was also a 13 basis point positive net year over year impact from general liability insurance reserve adjustments, which included a $2 $7 million unfavorable.
Michael Balan: Verbal adjustment this year and the lapping of a $3 $7 million unfavorable adjustment from last year.
Michael Balan: Moving below restaurant margin G&A dollars grew 15, 2% year over year and came in at 4% of revenue for the fourth quarter G&A for the quarter included approximately $3 7 million of higher expense due to the additional week. The majority of the remaining year over year dollar.
Michael Balan: Increase was due to higher compensation and benefit expense, including the $1 3 million impact of the timing of our change from quarterly to annual equity grants.
Michael Balan: Our effective tax rate for the quarter was 15, 8%.
Michael Balan: Our full year 2024 income tax rate of 15, 3% was in line with our guidance of approximately 15%.
Michael Balan: Our forecast for the full year, 2025% income tax rate remains unchanged at between 15, and 16% now I will turn the call back over to Jerry for final comments. Thanks, Michael There is no doubt that 2024 was a great year for Texas Roadhouse as we turn our full at <unk>.
Jerry: Tension to 2025, we will remain dedicated to the principles that have served us well for over 30 years, our operators are committed to delivering on our mission of legendary food and legendary service each and every shift we will uphold our core values of passion partnership integrity and fun.
Jerry: With purpose in order to continue providing high level hospitality to our guests.
Jerry: Staying true to our mission and values will lead us to delivering on our purpose of serving communities across America and the World Finally, Texas Roadhouse celebrated its 30 <unk> birthday. This week and I want to thank all of roadie nation for their many contributions to our success.
Jerry: E Commerce.
Jerry: That concludes our prepared remarks, Sarah please open the line for questions.
Jerry: Thank you if you would like to ask a question. Please press star one on your telephone keypad.
Jerry: We'd like to withdraw your question simply press Star. One again. Please ensure you are not on speaker phone and that your phone is not on mute when called upon thank you.
Jerry: Your first question comes from David Tarantino with Baird. Your line is open.
David Tarantino: Hi, Good afternoon, I was hoping maybe you could provide some context on the quarter to date trend youre seeing in Q1.
Jerry: I know you mentioned weather issues.
Jerry: And maybe you could try to quantify that and just give us some perspective on what you think the underlying trends might look like and your confidence level on returning.
Jerry: It's a positive traffic growth for the rest of the year.
Jerry: Thanks, David This is Jerry our restaurants are fully staffed our food is legendary and our menu is screaming value.
Jerry: And the other thing that gives me a lot of confidence that we just completed Valentine's day week, which.
Jerry: Our stores averaged 183000 during that week, which is over 23 or $20000 higher than the average six weeks. So.
Jerry: I think although our performance for comp has been irregular for roadhouse.
Jerry: I do believe that there is still a very strong desire to visit our Texas Roadhouse.
Jerry: And I have a lot of confidence in the underlying fundamentals and the strength of our business. So and we look forward to a five week period in March and you know theres been some other factors and I think Chris will comment on some of that share and David Thanks for the question.
I agree with Jerry I definitely feel good about the business overall, let's see if I can provide a little more detail on our sales trends over the last seven weeks. So.
Chris Munroe: Four week January period, David we were actually up five 5%.
Chris Munroe: That included an approximate 1% benefit from new year's day being in our comp sales and 25 in non 24, but it was more than offset by approximately a 2% negative impact from snow, causing store delays are store closures rather so that's just in the month of January sales in the most recent three weeks were based.
Chris Munroe: <unk> flat and Waldo.
Chris Munroe: While sales during Valentines week were strong we actually had over a 2% negative impact by Valentine's day shifting from a Wednesday last year to a Friday this year.
Chris Munroe: And you know that we don't want attempted to quantify the general impact of cold weather, but we certainly believe that colder weather in many other external factors. This year have negatively impacted recent performance. So you just kind of put all that together and we are conservatively estimating at least a one 5% negative impact too.
Chris Munroe: The reported seven week sales growth from calendar shifts and store closures and thats without including any general impact from the cold weather bottom line again, we feel really good about the core business across all three brands and we've seen an excellent performance in spite of the obstacles over the last few weeks.
Chris Munroe: Very helpful. Thank you.
Speaker Change: The next question comes from David Palmer of Evercore ISI. Your line is open.
David Palmer: Thanks, Good evening.
Speaker Change: And thanks for all that detail before on sales.
David Palmer: Switch.
David Palmer: Question two one on inflation, you mentioned that the change in estimates to 3% to 4%.
David Palmer: Is that right.
David Palmer: Yes, it was about a point.
David Palmer: Increase in that estimate and that that was all beef how much how much visibility do you have on your costs this year and and maybe give a sense of the how how those margin trends or those that food cost line will trend through through the year. Thanks.
Michael Balan: Hey, David It's Michael Thanks for the question.
David Palmer: Yes.
David Palmer: The majority of the increase was driven by beef.
David Palmer: <unk> is also a little bit other driven micromolecule other proteins.
David Palmer: And a few other items, but largely the.
David Palmer: The view on beef and though in the second half of the year.
David Palmer: He was driving the increase there.
David Palmer: We do have about 40% of our overall basket locked for the full year, we certainly have more locked in the front half of the year than the second half of the year. So.
David Palmer: You can say, we have a little bit more clarity earlier in the year as far as the cadence of the commodity inflation.
David Palmer: Probably would.
Speaker Change: C R.
Speaker Change: You're expected to the lowest level of inflation in the first quarter may be at or it could be a little bit below the low end of the range and then a fairly consistent.
Speaker Change: Inflationary.
Speaker Change: Outlook for the rest of the year that will get you into that 3% to 4% range.
Speaker Change: Thank you very much.
Brian: The next question comes from Brian <unk> of Morgan Stanley. Your line is open.
Speaker Change: Yes, thanks, good afternoon guys.
Brian: Maybe.
Brian: Just as you think about kind of.
Brian: Margin drivers this year.
Brian: Michael you talked a little bit about some.
Some I think some opex favorability is that something that you would.
We'll expect this year and you know on the labor front.
Brian: As you think about kind of you know our growth relative to traffic would would you expect kind of similar to what you saw in the second half of this year, maybe just comment generally on how you see kind of margins evolving this year.
Brian: Yes, thanks for the question Brian.
Brian: Yes, as we sit here now and the trends that we saw in late 'twenty four I think we have an opportunity to get some leverage on the other operating line, obviously traffic trends will play.
Brian: Our role in that as well, but.
Brian: But yet with a moderating cost we've seen in <unk>.
Brian: Yes, you could see some leverage there.
Brian: As far as the labor hours.
Brian: To traffic.
Brian: So still a lot to learn here in 'twenty five but early indications.
Brian: Neil maybe expected it would be somewhere in that could be a little bit of a below 15%.
Brian: As possible again, we don't have a labor model so.
Brian: Things can bury end and some of that will also depend upon what the traffic growth.
Brian: It looks likes our operators are staffing the restaurants for the sales they have in the sales they want.
Brian: And we feel good about that.
Brian: And obviously, we think 4% to 5% commodity inflation I'm, sorry labor inflation.
Brian: So that could put a little bit of pressure on the labor line, probably more in the front half of the year than the back half.
Brian: Thank you.
Sara Senatore: The next question comes from Sara Senatore with Bank of America. Your line is open.
Speaker Change: Thank you very much so.
Speaker Change: First a quick housekeeping could you talk about the components of the comp I just want to make sure we have enough traffic and mix and price.
Speaker Change: Pulled out because I know Gary mentioned positive trends from markdown and then I was just wondering if you're starting to see that mix turn positive, yes that sort of fully offsetting some of the shift away from alcohol and then and then I'll have another question. Please.
Speaker Change: Sure and Youre talking about the fourth quarter correct.
Speaker Change: Yes, yes, yes, so we have the seven 7% sales growth with traffic of $4 nine.
Speaker Change: <unk> being up two 8% implies about 30 basis points of negative mix since we were carrying three 1% pricing.
Speaker Change: It's still it's basically the same story you've heard from us.
Speaker Change: Alcohol being negative.
Speaker Change: Is driving that mix and we're seeing some benefit that offset that negative alcohol mix from from entrees and other items.
Speaker Change: <unk>.
Speaker Change: And kind of in the early phase, especially in the fourth quarter or so.
Speaker Change: So while a positive contributor is a pretty small piece.
Speaker Change: At this point, so we'll see where the mix goes in 2025, but still seeing some alcohol some negative alcohol mix to start off the year.
Speaker Change: Okay. Thank you and then just a question I had was about looking at like Texas Roadhouse and by the 33.
Speaker Change: It looks like the sort of maturity curve looks pretty similar if I look at the comp restaurants with maybe some of the higher volumes and a.
Speaker Change: Brand New ones and then you know and then it eases and then and then as you sort of steady state goes back is is that the right way to think about them witches.
Yeah, you see maybe a honeymoon.
And then over time.
Speaker Change: Very strong positive same store sales, but the opening volumes tend.
Speaker Change: Ken to be quite high for both.
Speaker Change: Yes, sure that would be correct.
Speaker Change: They both have similar patterns that way of opening in that honeymoon period, probably feel a little bit more of a honeymoon on the roadhouse side.
Speaker Change: Then the <unk> side.
Speaker Change: Again, probably just goes to 30 plus years of name recognition, but in both cases they opened at some some great volumes in that over those first three to six months that they tend to trend down a little bit and as theyre entering our comp base.
Speaker Change: We see them beginning to grow on a year over year basis.
Speaker Change: Alright, thank you.
Speaker Change: The next question comes from Jon Tower of Citigroup. Your line is open.
Jon Tower: Great. Thanks for taking my questions first a clarification and then a question. The clarification is the nine or so relocations that you spoke to Chris those are not included in the 30, new restaurant openings and 25 is that accurate.
Speaker Change: That is accurate John.
Jon Tower: Great Awesome.
Speaker Change: The question that is.
Speaker Change: Over the past year, and particularly starting 'twenty five the industry certainly grown more promotional.
Speaker Change: And understand that a Texas really does doesn't use traditional media methods to advertising.
Speaker Change: Stay in front of the consumer what can you dig into what exactly the company is doing to remain top of mind for consumers I know you're doing a lot of things at the local level, including even sponsoring monster truck rallies.
Speaker Change: And such but can you delve into kind of how youre staying in front of consumers and markets.
Jerry: Yes, John Thanks, This is Jerry.
Jerry: I think first of all we have a few approaches that we take we have a local store marketing kind of a boots on the ground and we get out in our communities and really shake hands and do bread runs but.
Jerry: One of our restaurants has an early dine feature that has a 11 or 12 items that are at a discounted price during the early hours of that we have wild West Wednesday that we talk about that and we've been talking about and prepping on potentially implementing that throughout.
Jerry: More we've got a $5 all day everyday drink menu that we've implemented last year, which is a 10 ounce Margarita that we brought back in and so we have a $5 10 ounce Margarita, which was really a superstar for us for a very long time in the early days and then a five dollar pint.
Jerry: Beer and a $5 long Island, and then you know as we blend in these Mark Tales at $5. Also you know it is a it is appealing to a different consumer so the mark Taylor's really.
Jerry: Performed well for US overall it is very early on but we have a few things that we can again and a lot of value is already built in to our menu.
Jerry: As we focus on that and again I think we operate at a high level. We can the consumer trust and believes in what we're doing and we can get out there and scream louder when it comes to early dine wild west when they when a Wednesday and our five.
Jerry: <unk> five day, all day everyday drink value menu that has been implemented last year.
Jerry: Got it thanks for taking the questions.
Jerry: Thank you.
Jerry: The next question comes from Brian Bittner of Oppenheimer. Your line is open.
Brian Bittner: Hey, thanks.
Jerry: Hey, guys.
Speaker Change: As it relates to pricing in 2025 once you put the one 4% action in place to.
Speaker Change: Can you clarify does that math put you in the two 5%.
Speaker Change: Pricing run rate range from there and is that what we should expect the rest of the year, just clarify that and if thats the case.
Speaker Change: You want us anticipating maybe a little bit of deleverage on the cost of sales line given your updated commodity outlook maybe.
Speaker Change: May be offset by some leverage on that other operating line.
Chris Munroe: Hey, Brian its Chris.
Speaker Change: We're at three 1% through the first quarter of 2025, and then $2 two will roll off at the end of the first quarter and Thats being replaced by the one 4% that Jerry.
Speaker Change: <unk> earlier today, so that gets you to $2 three starting in the second quarter and then we have a we have another opportunity to come at that in the fourth quarter, but we'll take a look at the end of the third quarter, 0.9% would be rolling off. So we will have another set of conversations with our operators at that point in time.
Speaker Change: And in terms of the of how we're thinking about that.
Speaker Change: The.
Speaker Change: Thank you.
Speaker Change: Michael talked about the different areas of the income statement.
Speaker Change: There is some pressure in some things that we're looking at where we have our guidance is out there, but a lot of it matter in a lot of what matters is our guest counts and as the guest count.
Speaker Change: It comes in.
Speaker Change: If we can outperform there then that helps with the margins and if it doesn't.
Speaker Change: And then that can compress it a bit and then I'll, let I'll let.
Speaker Change: I'll, let Michael add Brian on that Cogs line, specifically with the upgrade updates it from two to three and three to four 1% commodity inflation I would the math would imply.
Speaker Change: Yes.
Speaker Change: Some delevering of cost of sales.
Speaker Change: As you move through the year maybe.
Speaker Change: Maybe not in the first quarter, but but certainly into the second quarter in the back half of the year with.
Speaker Change: Kind of where the guidance is today.
Speaker Change: Okay. Thank you.
Speaker Change: The next question comes from Jake Bartlett of Truth Securities. Your line is open.
Jake Bartlett: Great. Thanks for taking the question.
Jake Bartlett: I was on the guidance for company owned development of 30 stores and 25, and if I look at what you did in 24 at Roadhouse and 26 openings in.
Jake Bartlett: The motion quite some time and going back to 2008.
Jake Bartlett: So it shows you you can do it you have the capacity to do that I also had the impression that you were on the cusp potentially of accelerating development at Bubbas. So you put those two things together.
Jake Bartlett: It seems to me like maybe you could be a little bit north of the 30 stores and 25.
Jake Bartlett: Wrong with that thinking or maybe there is some potential conservative conservatism in your guidance.
Jake Bartlett: Yes, Jake this is Jerry Yeah, I'll tell you you know we focus on.
Speaker Change: 20 to 25 Roadhouse is every year end and in 'twenty four we were able to get for Bubba is open I believe we have seven on our report for 25, and we're continuing to try to get a little north of that as we get into 'twenty six and so that's kind of the approach that we really take where we like to be.
Speaker Change: And that 30 ish number I believe that opening restaurants, and hiring 200 people and our management team and all of the time and effort that we put into it that's a right number for us to really open a quality restaurant at the volume that we're at you only get one time to make a first impression.
Speaker Change: We put a lot of time and effort into those opening so.
Speaker Change: I'd be very cautious of trying to open that up too much I would rather be very good at opening 25, 30 restaurants on a normal basis and a good cadence with two brands and then as we blend in Jaggers is we continue to focus on that down the road.
Speaker Change: And you know and obviously our international businesses. So I feel really good about that number for us sometimes we will creep up a little bit sometimes will be maybe a little low, but thats, a really good number and a space for us to be in to open quality restaurants, and make a great first impression.
Speaker Change: Great. Thank you very much.
Speaker Change: Thank you. Thank you.
Jeffrey Bernstein: Next question comes from Jeffrey Bernstein with Barclays. Your line is open.
Jeffrey Bernstein: Great. Thank you very much.
Jeffrey Bernstein: Two questions. The first one just on the <unk>.
Jeffrey Bernstein: Quarter to date comp just to clarify I know you reported a two nine and.
Speaker Change: And Chris I appreciate all the color it sounds like you're saying, maybe 150 basis point headwind from weather and shifts and whatnot. So.
Jeffrey Bernstein: The true trend is maybe four four so I'm.
Speaker Change: But just looking at your monthly comps.
Jeffrey Bernstein: Once you get past January.
Jeffrey Bernstein: For better for worse compared to become 500 basis points harder starting in February for the rest of the year. It seemed like January was the the.
Jeffrey Bernstein: Easiest compare for whatever reason so.
As we think about the rest of the year barring any major change in the consumer.
Jeffrey Bernstein: Is it fair to assume that the 25 comp would be.
Jeffrey Bernstein: Much more tempered from the eight and a half I think you did in 24, I'm wondering whether you would agree with that or whether there's something wrong with that logic and whether within that you have seen any sign of change in consumer behavior above and beyond just the weather and the holiday shifts and then I had one follow up.
Jeffrey Bernstein: Yeah, Hey, Jeff This is Michael I'll try to address that one so I think you have to be a little careful trying to compare it to the same store sales growth for 24 because of the different level of pricing. So all is just the question a little bit and we have.
Jeffrey Bernstein: Four 4% traffic growth in 2024 and will we see something like that again in 'twenty five.
Speaker Change: Don't think we can answer that I will tell you our operators are staffed and ready to serve the gas throughout their building those relationships relationships, we're seeing our highest volume stores growing at the highest.
Jeffrey Bernstein: Right.
Jeffrey Bernstein: So we think everything is in place for us to continue to to grow and serve more guests how that will exactly play out.
Jeffrey Bernstein: It is a little still to be determined.
Jeffrey Bernstein: But.
Jeffrey Bernstein: We're ready to serve the gas, yes, I'll just add onto that.
Jeffrey Bernstein: That.
Jeffrey Bernstein: If you just looked at January we were continuing the roll so.
Jeffrey Bernstein: I think if that felt really good in these last three weeks have been breathtaking in terms of all of the things that have come against.
Jeffrey Bernstein: Come against the business, so and we're still flat so.
Jeffrey Bernstein: I still feel pretty pretty good about that and our progress this year.
Jeffrey Bernstein: Got it and then my follow up was just on the.
Jeffrey Bernstein: The new units.
Speaker Change: You mentioned youre going to be opening up your 800 in total which I know, it's more like 650 for the pure Texas Roadhouse brand wondering if you could just give us an update in terms of where you currently see that ultimate opportunity. It seems like the number keeps going higher as youre, having success in smaller markets and if you could maybe just share.
Speaker Change: Some of the metrics around the cost to build in the margins and returns on those new units and other cost to build had been running higher but just any color on that would be great. Thank you.
Speaker Change: Yes, Jeff I'll start off yes, our.
Speaker Change: Target is still 900 for Texas Roadhouse.
Speaker Change: We continue to evaluate that over time, but.
Speaker Change: We feel very comfortable with that number which we upped it from seven to 800, I think a couple of years ago.
Speaker Change: We are excited to have number 800 within the whole portfolio, including Texas Roadhouse Bubba Jaggers in international.
Speaker Change: As well on our way to.
Some of our internal goals of a 1000 between the brand so.
Speaker Change: But if any of the additional cost I'll, let Michael speak to that for just a little bit.
Speaker Change: Yes, Jeff for 2025.
Speaker Change: We're expecting the average investment cost to be about eight.
Speaker Change: <unk> $8 five $8 $6 million, that's an all in investment costs, including a 10 times rent factor.
Speaker Change: For both of them, both Texas Roadhouse and Barber is in an above the slide deck.
Speaker Change: Really flat with 2024 for Roadhouse, that's up a little bit and some of that has to do with where the locations are you do a few more in California.
Speaker Change: California with higher rents are higher building costs that can shifted.
Speaker Change: Little bit so we still very feel very comfortable about meeting or exceeding our targets, which is a mid teen IRR for new store development, and we watch that very closely and <unk>.
Speaker Change: Joe are meeting or exceeding that so we think we have a tremendous opportunity there.
Speaker Change: Okay.
Speaker Change: Thank you.
Speaker Change: The next question comes from Gregory Frankfurt with Guggenheim Partners. Your line is open.
Speaker Change: Hey, Thanks for the question I was wondering if you could just give a little bit more.
Speaker Change: Color on the wage inflation and what Youre seeing there because it's ticked up kind of each of the three quarters of this year and running above that above that at the high end of your guidance for next year at 5%.
Speaker Change: Is that just.
May be lapsing comparisons I guess, what are you seeing kind of a.
Speaker Change: At the at the store level or the operator level that maybe give us a better look at that thanks.
Tom: Yeah, Greg it's Tom.
Tom: It's Michael I can talk to that so certainly.
Tom: We guided to 4% to 5% we came in at a four point.
Tom: 6% and some of those things are.
Tom: The higher Q4.
Tom: It may have been contemplated in there it is a little bit more ways.
Tom: Inflation at the end of the year and early in the year, where you see some state mandated.
<unk> coming into effect, but we think the underlying wage inflation.
Tom: Has <unk>.
And so whether it's going to come down.
I don't know about that but not really seeing a large upward tick in the wage inflation and certainly health insurance costs and the premiums associated with that so the benefits that we offer continue.
Tom: Come at a higher price and that's factored into our assumptions.
Tom: At this time, we feel.
Very good about being in that 4% to 5% range for 2025.
Tom: Thank you I appreciate it.
Dennis Geiger: The next question comes from Dennis Geiger with UBS. Your line is open.
Speaker Change: Great. Thanks, guys.
Speaker Change: Curious how you think about your traffic outperformance gap to the industry outperformance has been significant for awhile you expanded it pretty notably last year I think.
Speaker Change: I know, it's more of the output of all the work that you and the team the teams do but do you think about that going forward at all.
Speaker Change: Traffic App as you make decisions on pricing or otherwise and if you do think about it any view on what that gap looks like going forward or any kind of broad broad thoughts on on the gap. Thank.
Speaker Change: Thank you.
Speaker Change: Thanks, Dennis This is Jerry you know, where we always are trying to do the best that we can and stay within the value that we built into the menu.
Speaker Change: If the gap that you're talking about our competitors, we do try to pay attention and be educated and Thats part of those phone calls that we make with our operators in their local communities.
Speaker Change: It's important for us to be a very value based offering that operates at a very high level. So I think we will always try to be very competitive in that side of it as we have been in the past and we will keep that conservative approach as best we can and believe that we're doing right by our consumer and yet taking care of our business.
At the same time.
Speaker Change: Makes sense thanks Terry.
Speaker Change: Thank you. Thank you.
Herberman: The next question comes from Herberman with Deutsche Bank. Your line is open.
Herberman: Thank you very much I wanted to follow up on the quarter to date trends in February in particular being flat. What do you think is driving the step down in comps relative to January whether that's why I was tougher compares I think we're all trying to understand what's driving the fall off just broadly any different as you can to aircraft regions to provide.
Herberman: Thank you.
Speaker Change: Hey, Lauren I'll start and Michael May have some other thoughts as well but.
Herberman: Yes.
Herberman: <unk> had no more I think a dozen named winter storms this year and they've gone across geographies, they've gone broader than what we've seen in the last several years, you've had you've had flu and COVID-19 and RSV and Orca in schools closing and the entire community is being shut down.
Herberman: And it's just it's been it's been across the country and there certainly have been some areas of the country hit harder than others, but that's really when we talked about other external factors. Those are just a few.
Herberman: That we're seeing and I really feel like that that's what's what's driven.
The results for that three week period.
Herberman: But again, having said that I mean.
Our operators are still I mean, they're running fantastic shifts theyre doing a great job there serving our customers we had a fantastic Valentine's day.
Herberman: So theres a lot of positive to pull out of all of that but I really think there are there have been a number of factors that have hit us.
Speaker Change: Chris you hit on that and I'll reiterate again, the Valentine's shift had a 2% or more impact on those three weeks of our February period, So and so we're not even trying to measure the impact of cold weather and all these other factors that Chris mentioned so.
Speaker Change: We think some of those are just out of our control when I look at our our regional trends. It makes me feel the same way.
Speaker Change: Chris was talking about the underlying trends are good are are the western U S. Certainly has outperformed.
Speaker Change: And the first part of the of the year and that's an area it may be easy to use.
Speaker Change: Used to winter weather, a little bit more or hasn't been as impacted by.
Speaker Change: Some of them.
Speaker Change: The snow that has moved across the country. So I look at the.
Speaker Change: The West is an example of maybe what the more normalized.
Speaker Change: <unk> are and I've said, it a little bit earlier, but our highest volume stores are still growing at a nice rate and so I don't believe any of this is a slowdown in the gas or the consumers' desire to come to Texas Roadhouse.
Speaker Change: Just believe we're in a little bit of an environment right now.
Speaker Change: Where the.
Speaker Change: The consumer is just asking a little bit differently, and I think youre hearing that from others as well.
Speaker Change: Thank you for that and then if I could just ask on the <unk>.
Speaker Change: The inflation step up 3% to 4%.
Speaker Change: In the back half and I guess <unk> as we exit 'twenty five and gone into 26 is that the right way to think about it are you anticipating any sustained period of elevated commodity.
Speaker Change: And remind us how long it takes to sort of rebuild herd. Thank you.
Speaker Change: Yes, so a large part generic unfortunately, I'm not going to have a lot of.
Speaker Change: We're just starting off 2025 years, so not even try to venture into what 2026 could look like <unk> supply issues demand issues at all play in.
Speaker Change: Into that but to your second part of the question is it does take.
Speaker Change: A little bit of time to rebuild.
Speaker Change: We heard you need to see ranchers retaining channel for breathing, we have not seen a lot of that happening yet so.
Speaker Change: We will do we.
Speaker Change: It would not be surprising to see us remaining in a capital cycle for for some time now know what the what that means to inflation or prices. There is a lot of other factors that play.
Speaker Change: And to that so that's probably as much as we can provide on 26 and beyond at this point.
Speaker Change: Thank you very much.
Speaker Change: The next question comes from Andy Barish with Jefferies. Your line is open.
Andy Barish: Hey, guys.
Andy Barish: Just wondering on the gas.
Andy Barish: Gas management.
Andy Barish: Update our key point.
Andy Barish: I mean could it be in certain markets are obviously restaurants that just a quote times are getting.
Andy Barish: A little bit lofty given how busy you guys or is there.
Andy Barish: Something tied together with the.
Andy Barish: The digital kitchen that.
Andy Barish: Kind of can work on maybe maybe bringing wait times down a little bit just.
Speaker Change: Wondering if Bob if thats something where.
Andy Barish: <unk> seen some gas kind of.
Speaker Change: Walk out at a certain point.
Speaker Change: Hey, Andy It's Jerry Yes, I think our AGM 2.0 as is the software that we decided to work on ourself and customize it to handle some of those longer waits and obviously as we continue I believe were close to half of our of the concept has got that.
Speaker Change: Upgrade and we will continue to focus on the digital kitchen rollout and the AGM 2.0, and after they are completely done and then we can really evaluate.
Speaker Change: The things that the whole concept can gain from but I think it's really about table efficiencies. It is about that waitlist management side. So.
Speaker Change: We're feeling very good about where it's at and what it's doing and more importantly, our operators are wanting it they see the value in it and that's really the driver behind both the digital kitchen and the AGM to point out so we feel very comfortable going forward.
Speaker Change: Thanks, Terry that's great color and just one quick follow up Michael on an Easter being later this year is there anything we should think about between.
Speaker Change: <unk> March April longer later later last year.
Speaker Change: Yes. So this is.
Speaker Change: This is a good one so Easter is.
Speaker Change: As in our fiscal second quarter for 2025 and 2024 however.
Speaker Change: It is when we give you all comparable sales for the first quarter, we will compare the 13 weeks of 2025 to the comparable weeks 24 weeks two through 14 Easter was in week 14 in 2024, so the Q.
Speaker Change: <unk> comps will probably have about a 30% sorry, a 30 basis point benefit.
Speaker Change: Because Easter is not a higher volume day for us. So the Q1 comps about a 30 basis point benefit from having no Easter in 'twenty Q1 to 25, but having it in 'twenty four and then the reverse will happen in the second quarter amount of 30 basis points.
Speaker Change: Headwind to comps from.
Speaker Change: It being in our 2025 base, but not in our 2024.
Speaker Change: Perfectly clear thank you.
Andy Barish: Thanks, Andy.
Speaker Change: The next question comes from Ed Jews 12, Vic with BMO. Your line is open.
Thanks for taking the question.
Speaker Change: I wanted to ask you about the off premise business recently U <unk>.
Speaker Change: <unk> indicated that the operators have growing confidence in executing in the quality of that channel.
Speaker Change: And maybe increasing willingness to put more focus behind it to drive growth. So I guess I'm curious if there's anything planned or that we should think about for 2025, if you see that kind of as an incremental growth opportunity for this year or is that more kind of a longer term opportunity that you how you would view that.
Speaker Change: Hey, Andrew It's Jerry Yeah, I think we're going to hold our position.
Speaker Change: We do like it being available for our Jaggers concept and as we get closer to completing all of the above us locations with it and we do have the one Texas roadhouse, but as of right. Now we will continue to hold on that side of it and see where we go.
Speaker Change: But.
Speaker Change: We're talking about to go or off premise from that side of it.
Speaker Change: Delivery, yes.
Speaker Change: It was really more you were talking delivery about the to go side.
Speaker Change: Yes.
Speaker Change: The to go side Okay.
Michael will share a thought on that.
Speaker Change: Yes.
Speaker Change: To go as we continue to see great demand on the to go side.
Speaker Change: Seeing.
Speaker Change: Increased occurrences the percentage, 13% was was up year over year or so.
Speaker Change: It continues to be something that the guests depreciates and I think our restaurants have and our operators have gotten better about executing on the to go and you are having the the plans in place they know how important it is to quotes.
Speaker Change: Accurate wait times and make sure everything is in the bag and we just keep getting better and better at that and the guests are appreciating that and coming back for more and during the first seven weeks of this year, we've seen more to go and again thats likely because people are.
Speaker Change: Not being able to come in and dine somebody in their family may be sick and so we've seen some more some definite improvement in that regard as well.
Speaker Change: Great. Thank you.
Speaker Change: The next question comes from Jim <unk> with Stephens. Your line is open.
Speaker Change: Hey, guys. Good afternoon, Thanks for taking my question.
Speaker Change: Appreciate all the color around year to date sales trends.
Speaker Change: <unk>.
Speaker Change: Stratham abounded in 'twenty four if we think about the drivers of the traffic performance in 'twenty four.
Speaker Change: And kind of the composition between existing guest frequency and then new guests coming to the brand because of the value proposition do you have any way to quantify how much each of those contributed and then maybe the way you thought.
Speaker Change: Thinking about either increasing the frequency of those new guests in 'twenty, five or continuing to bring new guests into the into the pipeline in 'twenty five.
Michael Balan: Yeah, Hey, Hey, Jim It's Michael So that is something thats pretty challenging to be able to separate out I do believe we continue to see our.
Speaker Change: Existing gas.
Speaker Change: Continue to come and dine with us in.
Speaker Change: The goal of our local store marketing program is too.
Speaker Change: Attract new people into into the restaurants, so I think that is occurring.
Speaker Change: You know as well and I think.
Speaker Change: We will continue to work on doing that and that's.
Speaker Change: That's why we stay very true to who we are in.
Speaker Change: Very much focused on the guest experience.
Speaker Change: So we give that legendary experience to each and every <unk>.
Speaker Change: Yes, I don't know if necessarily necessarily anything we want to be doing differently in 2025.
Speaker Change: Continuing to.
Speaker Change: Screen the value proposition and.
Speaker Change: Provided.
Speaker Change: <unk> experience for those those guests who are choosing to come in and dine with us.
Speaker Change: Okay, maybe if I could ask a quick one on <unk> two.
Speaker Change: A lot of kind of a value centric messaging from other.
Speaker Change: Full service operators, particularly around Mike Burgers and win deals have you ever given out that the average check add bubbles.
Speaker Change: And if not how do you feel like that stacks up relative to some of the other value offerings, we see in full service, particularly around those splits suddenly programming options.
Speaker Change: Yes, Jim This is Gerry I feel really good about our pricing on above aside with the burgers the pieces and the wings and it really just in general our menu. So we do a lot of work on that side of it too we do have a Monday night, where we have a burger special and then we do focus on a Tuesday night Pizza special and and.
And knock a little bit off of there, but it really is the quality and the <unk>.
Speaker Change: The variety that you have to choose from but I think really really makes it stand out in the Burger is the star of the show over at Bubbas 33.
Speaker Change: And Jim with Pizza being a component of the check that's all it makes it a little bit harder to given an accurate per person average, but it's probably.
Speaker Change: More in the $20 per person, but again, it's a little bit harder to get to a fully accurate number above those versus a roadhouse given the pizza.
Christian: Christian So I appreciate the thoughts there I'll pass it on.
Speaker Change: Thank you.
Speaker Change: The next question comes from Logan Rake with RBC capital markets. Your line is open.
Speaker Change: Okay.
Speaker Change: Thanks for thanks for taking the question.
Speaker Change: A quick one on the consumer and any sort of changes you guys are seeing.
And different demographic or income cohorts are you guys seeing anything different recently and then if you could just comment on.
Speaker Change: Anything you guys are seeing on your guys as sort of a value proposition relative to what consumers are seeing in the grocery store.
Chris Munroe: Hey, Logan it's Chris.
Chris Munroe: We don't really break it out in that regard and so we're really not seeing any sort of change in behavior. There is not any matriculation close more into the value part of the menu or anything like that every everything is has been.
Chris Munroe: Proceeding as it has been historically for us at least over the last couple of years.
Chris Munroe: And.
Chris Munroe: We are we do watch the grocery prices and we are certainly mindful that that thats one of our competitors is the ability to cook at home and so we certainly have that in mind as we have those conversations that Jerry talked about with our local store operators.
Chris Munroe: And we want to we've said screen value three or four times today, we want to continue doing that and that is in part why we're very mindful about these price increases and keeping the modest.
Chris Munroe: We're competing on a number of levels, but also at the grocery and so we're watching that as well.
Chris Munroe: Great. Thank you very much.
Speaker Change: The next question comes from Peter Sally with <unk>. Your line is open.
Peter Sally: Hey, great. Thanks for taking the question kind of in the same vein I think in the past when we've spoken about.
Speaker Change: The commodity basket and beef inflation and one of the factors.
Speaker Change: That went into determining the amount of inflation or lack thereof, with the amount of demand.
Speaker Change: In the grocery or promotions in the grocery store and retail.
Speaker Change: Just curious if you guys are seeing incremental promotions and the grocery aisle is that factoring at all into the increased commodity inflation basket that you're expecting for 2025 and then also.
Speaker Change: Anything we should be aware of on tariffs and your exposure to Canada and Mexico at all.
Okay. So this is Chris I'll start with the with what we're seeing in grocery and then I'll, let Jerry speak to the second part of your question.
Speaker Change: Right now and you are correct as we looked at 2024.
Speaker Change: The fact that that the grocery stores, we're not putting specials on things like ribeye and other cuts of beef.
Speaker Change: It did seem to dampen some of the demand from the retail side and that helped with the cost.
Speaker Change: The picture for Us during 2024, we haven't seen anything demonstrably different and 2025, thus far.
Speaker Change: And really what were what we were looking at in terms of moving the guidance up was really just what we're seeing from our procurement team and what they're talking about with our.
Speaker Change: With our suppliers and what we understand is going on in the beef market. So that's the main driver there. So nothing has changed in terms of what we're seeing at least so far.
Grocery and in terms of running specials, yes.
Speaker Change: And then on the all the other things that are being discussed out there, we're very well aware our contacts in Washington D. C. Keep us posted on any of the activities and the talks that are going on again, we won't know until for sure that those things come through but we are paying attention. We are trying to keep our ear to the ground.
Speaker Change: And be aware of anything that would have a impact in the business in any way shape or form.
Speaker Change: Great and then can I just follow up on the on.
Speaker Change: On the share buyback I know a new authorization.
Speaker Change: Any thoughts on how aggressive you guys would be with this buyback you've got plenty of capital.
Speaker Change: Sitting on the balance sheet, just curious your thoughts.
Speaker Change: Given where the shares are today.
Chris Munroe: Sure and it's Chris again.
Chris Munroe: Share repurchases remain a part of our balanced approach to the capital management program and we've been consistent but we've also been offered to opportunistic at times and we're going to continue to have that approach with regard to all of our returns to shareholders and so.
Speaker Change: It's good to have that authorization from Jerry and the board and we will be thoughtful as we as we move forward.
We're going to be balanced and we're going to continue that process.
Speaker Change: Yeah.
Speaker Change: Thank you very much.
Speaker Change: The next question comes from Christine Cho with Goldman Sachs. Your line is open hi.
Christine Cho: Thank you so much for taking the questions. So I would like to discuss our strategies in growing your portfolio of brands. So, Texas show stopper jaggers, our quite unique concepts, but are there any major synergies leverages on people development. Our operations that is helping these younger brands move faster.
Christine Cho: On the ramp up curve and also potentially replicating the exceptional guest experience et cetera.
Christine Cho: Davis for thank you.
Speaker Change: Well. Thank you I appreciate the kind words.
Christine Cho: Do take the approach of.
There is obviously our company is supports all three brands and the resources that we use.
Christine Cho: To help create each one of them, obviously, we heavily on Texas roadhouse, but as we start to find our way to support each brand separately.
Christine Cho: That's really the driver and understanding each one of those businesses. So.
Christine Cho: Whether that impacts the growth or not I think we could continue as we get more it's about do we have the right people in place that we have the right growth strategy and are we able to execute at a high level. So I think as we look at we figured that out at roadhouse long ago and as we continue to look at the <unk> brand in the jaggers.
Christine Cho: Brain and the resources that we need to consistently get great restaurants open and to be able to open more.
Christine Cho: It's something that we've continued to look at as we have our head of operations for Roadhouse, and our head of operations for <unk> and our head of operations for our Jaggers business in international So as they report to us and what their needs and wants are and how we invest in their businesses.
Christine Cho: Gotta be about the people and it's got to be about the operation and we feel great about the food and the service model as you mentioned, but it's really about us being able to grow successfully and get it right right off the bat.
Speaker Change: The next question comes from Jim Sanderson with Northcoast Research Your line is open.
Speaker Change: Hey, Thanks for the question I wanted to ask a question about your pricing philosophy I'm wondering is that as we progress through the year and you start to see fluid food inflation pick up if you would be more willing to take your prices up to.
Speaker Change: To protect margin.
Speaker Change: Or if you will need to see more visibility on traffic accelerating before you get to that point and then tying into that wanted to clarify if that two 5% run rate.
Speaker Change: We will remain intact on pricing throughout fourth quarter 2025, or if there is another roll off later this year. Thank you.
Speaker Change: Thank you Jim.
Speaker Change: We're always going to look at pricing from a conservative lens and try to make the right decision. We've made the decision for the second quarter.
Revisit that with our operators at the end of the summer and really discuss what the back half of the year in and what the climate will be dealing with at that point in time. So those will be the driving factors on the next conversations as we go through there and.
Speaker Change: And Jeff I'll just cover it for you we have three 1% in the menu through the first quarter.
Speaker Change: Then.
Speaker Change: With the one 4% that Gerry announced today $2 two rolls out.
Speaker Change: Starting in the second quarter you have two three.
Speaker Change: And then at the end of the third quarter 0.9 would roll off and that is our opportunity as Jerry was just describing to perhaps come back in with something that replaces that 0.9, but but going forward starting.
Speaker Change: In Q2, we'll be at two 3%.
Speaker Change: Very good thank you very much for that.
Speaker Change: Thank you.
Speaker Change: The next question comes from Brian Vaccaro with Raymond James Your line is open.
Speaker Change: Hi, Thanks, just two quick ones if I could first can you level set us.
Speaker Change: G&A expectations in 2025, and then second I just wanted to ask about delivery you are obviously.
Speaker Change: Stayed away from third party delivery historically, but given the strength in your off premise demand for your brands and some changes that we're seeing first party delivery side curious if youre getting any new considerations potential again.
Speaker Change: First party delivery.
Speaker Change: The potential opportunity there. Thank you.
Speaker Change: Yeah, Hey, Brian It's Michael I'll answer the G&A question, Glen and then hand, it over to Jerry on the delivery.
Speaker Change: G&A, so I <unk>.
Speaker Change: Think you would potentially see a little bit.
Speaker Change: Some growth in the first half of the year.
Speaker Change: And there is some opportunity to be.
Speaker Change: More.
Speaker Change: Flattish into the third quarter and as we lap the 50 <unk> week in the fourth quarter, you could actually see the G&A dollars go down.
Speaker Change: In Q4 so.
Speaker Change: Bob.
As of now maybe mid single digit dollar growth for the year, which should.
Speaker Change: Ideally gives you some leverage on the.
Speaker Change: The G&A line, but probably more so in the back half of the year.
Speaker Change: Front half of the year.
Speaker Change: On the leverage.
Brian: And then Brian on the Jerry on the third party will like I said, we we have it in jaggers, we haven't and bubbles.
Brian: Have it in one roadhouse and we're continuing to learn on it but that's probably where we're at right now.
Speaker Change: The next question comes from Raul Cross the poly with J P. Morgan Your line is open.
Speaker Change: Hey, guys.
Speaker Change: Can you share some color on the bump hours how much seating capacity has been added on average or Dr. Wang through and also what percent of billings have land available for more bump outs after 2025.
Speaker Change: Yeah, well I can answer some of that I mean, typically a bump outs going to add anywhere from probably 20% to 40 seats. Some of that is going to depend on exactly what you mentioned the land availability health.
Speaker Change: How much property.
Speaker Change: Yes.
Speaker Change: Used to add more seeding.
Speaker Change: We bumped out over half our system a lot of the restaurants that we haven't bumped out or.
Speaker Change: Because you don't have the real estate or youre, not going to get the approvals from landlords or other businesses are around you.
Speaker Change: So I don't have a number as far as.
Speaker Change: Yes.
Speaker Change: Who could or couldn't but I can tell you we have a nice pipeline of restaurants that have been approved for bump outs and we don't bump of restaurant out. So it's been open for at least a few years, so that pipeline naturally keeps rebuilding itself or at least gives us more restaurants to be looking at over time and roll it's Chris.
Speaker Change: The only other thing I would add to that is.
Speaker Change: We're now building our new stores.
Speaker Change: With the footers and with some capacity.
Speaker Change: To do bump outs. So we have that in mind and we're getting some of that cost out of the way. So that we can we can do that once they've.
Speaker Change: Quote unquote earn their bump out and so.
Speaker Change: That allows us to kind of plan ahead.
Speaker Change: Just on the new stores as well.
That's helpful.
Speaker Change: As a follow up on the Remodels.
Speaker Change: Like around 60, plus or industrial roadhouse units or more than 10 years or so.
Speaker Change: Could you breakout like what percent of these all assets need like more capital intensive our full scale Remodels left us light of capital refresh us on how do we think about the schedule over the next few years.
Speaker Change: Hey, Roy.
Speaker Change: We really haven't released that kind of information I will tell you, though that we do have the intention on keeping our stores fresh.
Speaker Change: And enjoyable for our guests and also enjoyable and safe for our employees.
Speaker Change: And so that's why we have been.
Speaker Change: We've been going at a pretty good clip on getting that done.
Speaker Change: Of course, you know us and so you also know that there's not going to be a top down.
Speaker Change: Program that says this is when you have to do X y or Z to your store, we're going to hear from the operators are going to hear from them and their stores and then they're going to they're going to talk to us about what capital is available so.
Speaker Change: We feel pretty good about the investments that we are being that are being made in and we feel good about when you walk into.
Speaker Change: Just about any of our stores youre going to see a really good fresh clean wonderful operation and youre going to be treated extremely well and youre going to have some legendary food.
Speaker Change: Thanks for the update guys.
Speaker Change: This concludes the question and answer session I'll turn the call to Jerry Morgan for closing remarks.
Speaker Change: Thank you all for your continued support I appreciate all of you and roadie nation and all of our guests to continue to dine with US let's go roadhouse.
Speaker Change: This concludes today's conference call. Thank you for joining you may now disconnect.
Speaker Change: Yes.
Speaker Change: [music].
Speaker Change: Yeah.
Speaker Change: [music].