Higher Operating Costs offset Revenue Gains for Texas Roadhouse in the Second Quarter

As food cost inflation continued to squeeze profit margins during the second quarter, Texas Roadhouse TXRH delivered solid top-line growth as same-store restaurant sales grew 4.5% and 5.3% at company and franchise restaurants, respectively. Increased revenue was largely consumed, however, by an uptick in sales costs and higher general and administrative expenses, which included a higher-than-expected outlay to finance the company's annual managing partner conference held in Hawaii, which cost $2.3 million more than the prior year. Higher sales costs were largely a factor of increased commodity prices, which knocked the company's restaurant margin by nearly 50 basis points. During the period, Texas Roadhouse opened seven company restaurants and one franchise restaurant, bringing it to 36% of its 2013 target of 28 company restaurant openings.