Texas Roadhouse Inc (TXRH) 2007 Q2 法說會逐字稿

Good day, everyone, welcome ladies and gentlemen, thank you for standing by. Welcome to the TEXAS ROADHOUSE, INC. second quarter 2007 earnings conference call. Today's call is being recorded. At this time, all participants are in a listen-only mode. Following the presentation, we will conduct a question-and-answer session. Instructions will be given at that time for you to queue up for questions. I would now like to turn the call over to Mr. Scott Colosi, Chief Financial Officer of TEXAS ROADHOUSE, INC.. Please go ahead, sir.

Thank you Peter, and good evening, everybody. By now, everyone should have access to our earnings announcement released this afternoon for the second quarter ended June 26th, 2007. It may also be found on our website at texasroadhouse.com under the investor section. Before we begin our formal remarks, I need to remind everyone that part of our discussion today may include forward-looking statements. These statements are not guarantees of future performance, and therefore, undue reliance should not be placed upon them. We refer all of you to our recent filings with the SEC for a more detailed discussion of the risks that could impact the future operating results and financial condition of Texas Roadhouse.

On the call with me today is G.J. Hart, our CEO. G.J. is going to provide general comments on the business, and then I will walk you through the financials and then we'll open it up for questions. G.J.?

Thank you, Scott, and good evening, everyone. Let me start off by saying we are very pleased with our second quarter results that saw diluted earnings per share of $0.12, right in line with our plan. As noted in our press release, there was a year-over-year timing difference with regard to our annual management partner conference which was held during our second quarter this year, versus our first quarter in 2006. So while first quarter's EPS growth was not as strong as it appeared on the surface, this quarter's growth was not as soft as it appeared. We believe we had a very solid quarter, in a challenging operating environment, and most importantly, we are on track with our longer-term goal of 20% EPS growth.

So let me touch on a couple of the highlights. From revenue perspective, it was a challenging second quarter. We did see sequential improvement in comp sales versus the first quarter, with same-store sales growth of 1.9% for the quarter, including a slight traffic increase of 0.1%. Not great, but decent given the environment. The good news is that we remain in great shape on the development front with 17 new company restaurants opened through the second quarter and another two since the end of the quarter. With this, we are squarely on track to achieve our goal of 30 to 32 new company restaurants for the year. Additionally, the restaurants opened to date in 2007 continue to outperform our existing restaurants from a sales perspective. Year to date, the restaurants opened during 2007 are averaging over $85,000 a week in sales, which is very good given the fact the second quarter is typically a lower-volume quarter.

While sales were a little softer than we had hoped for, restaurant margins were slightly better than we anticipated. Although we are still bound a little year-over-year. The key driver to the upside surprise was labor, which was not as negatively impacted as reanticipated. That said, for the quarter restaurant margins were 6 basis points lower than last year's second quarter, driven by food and labor inflation, two topics we have talked about in the past. On the food side, our pricing more than offset the inflation, but on labor we continue to see margin impact as our pricing actions did not offset the impact of minimum and/or tipped wage increases.

However, I can tell you that while we are seeing the impact of wage increases, we have been fortunate in that up to this point, it has not been quite as bad as we had anticipated. We will continue to see how all of this pans out, especially in light of the recently effective federal minimum wage increases that just started last week. That said, we always strive to do what is best for the business, so we will continue investing in labor with the understanding that sales are what ultimately drive success in our segment, and a large part of what drives for us is the investment in people and labor. From a G&A perspective, we continue to leverage our base business. For the quarter, we did have some mismatching with the timing of our annual conference, which skews comparability. Scott will walk you through this, but I can tell you we continue to get G&A leverage.

On the franchise side of things, we continue to evaluate acquisitions that would result in returns commensurate with those we generate with building new restaurants. At that point, as of the beginning of this year's third quarter, we completed the acquisitions of nine restaurants in three states, Indiana, Missouri, and Kentucky in an all-cash deal. In addition to generating estimated returns in line with company developments and being accretive, by structuring these transactions as all cash, we avoided share dilution and put some leverage on the balance sheet. The transition has gone very smoothly, and we are pleased that the existing restaurant management teams as well as the market partner are staying in place.

Including the non-cash acquisition-related charge and only realizing operations for half of 2007, we do not anticipate meaningful accretion until 2008. However, on an ongoing annual basis, we anticipate this transaction will be approximately $0.015 accretive to diluted EPS. So to sum things up, with the first six months of the year in line with our plan, we are reiterating our original 2007 earnings guidance of at least $0.53 per diluted share. We have slightly moderated our comparable restaurant sales for the year from 2 to 3% to approximately 2%.

Year to date, we were up 1.5%, and July started off up approximately 2.5%. As I mentioned, our development is in solid shape, and we do not foresee any problems hitting our plan of 30 to 32 company openings. With that, I'll turn it over to Scott to review the financials.

Thanks, GJ. During my review of the second quarter, please note that many of the numbers I will mention are listed in the schedule of supplemental financial and operating data that was included in the press release.

Starting at the top of our income statement for the second quarter of 2007, as compared to the same period in 2006, total revenue increased 23% and company owned restaurant sales increased 24%. The growth in company-owned restaurant sales was driven by operating week growth of 23% combined with average unit volume growth of just under 1%. Comparable restaurant sales at company-owned restaurants increased 1.9% on top of a 1.2% increase last year. Traffic did improve sequentially to up 0.1 for the quarter versus down 1% for the first quarter of 2007. On a year-over-year basis, we continue seeing around a 2% increase in average check, which is a little less than the pricing in the menu you right now. The difference versus our price increase is predominantly driven by fewer alcohol beverage and soft beverage incidences as a percentage of entrees. We have seen some very slight negative mix shift with entrees, but this has been less than half of the driver of the negative mix.

From a sales perspective, I'll offer a little more color on average weekly sales. The average weekly volume for stores opened during 2007 is a little over $85,000 for the year, which is higher than the overall company average of $77,800. Franchise royalties and fees were $2.9 million, up over $200,000 versus last year, due to the opening of new franchise restaurants, increased royalty rates in conjunction with the renewal of certain franchise agreements, and the impact of positive comparable sales growth. In terms of cost, as a percentage of sales, restaurant operating costs were 6 basis points higher than last year. As with the first quarter labor was higher while the other restaurant level lines were lower as a percentage of sales.

Specifically, cost of sales was down 8 basis points. As with the first quarter, we did see lower protein cost as a percent of sales, with the pricing we took in response to commodity and labor inflation. However, dairy and produce were both up for the quarter. Produce more so during the first part of the quarter and dairy in the back half. Restaurant labor costs were up 25 basis points as wage rate inflation, as we had projected, is outpacing the pricing we have taken. The increase was a little less than during the first quarter, as we had a full quarter worth of our price increases and slightly higher comp sales growth in the second quarter.

The labor increase continues to really be concentrated in the four states where the tip wage increased by more than $1 per hour for us. Rent experience was down 9 basis points as a result of comp sales growth. Other restaurant operating expenses were basically flat versus last year. As I mentioned during our first quarter call, we have bought out some equipment leases over the last six to eight months, so we are seeing lower rent from this with an offset being in interest and depreciation. For the quarter, this benefit was offset by a net gain from insurance proceeds recorded during the second quarter of last year relating to Hurricane Katrina.

Preopening expenses were about $100,000 less than a year ago. Although we are opening more restaurants now, with our 2007 opening schedule being front-end loaded, we ended up having about the same number of restaurants at the same stages of the development pipeline during the second quarter this year as compared to the prior year. As has been the case for several quarters, depreciation and amortization costs were 48 basis points higher than last year, primarily driven by new restaurant development. G&A expenses as a percentage of revenue were about 125 basis points higher than last year. This was driven by the timing difference of our managing partner conference, which took place during the second quarter this year, as compared to the first quarter in 2006. This accounted for 186 basis points of the increase for the quarter. So you can see, we are continuing to realize leverage in the base business as our system grows.

Our effective tax rate for the quarter was 35.7%, which was lower than last year's 37.5% rate due to increased tax credits. For the year, we are still targeting about 36% for the tax rate. Finally, our weighted average diluted share count was 76.9 million, slightly higher than last quarter due to option exercises and a slightly higher average stock price for the quarter.

On full-year 2007 guidance, as G.J. noted earlier, we have reiterated our earnings per share guidance for 2007 diluted earnings per share growth of at least 20% or at least $0.53 per share. While we do believe our recent franchise acquisitions will be accretive on an ongoing basis, we have not increased our 2007 guidance as a result of them, due to the fact we will only have six month's worth of results from the restaurants this year, and factoring in an estimated $.005 negative impact of the acquisition charge to be recorded in the third quarter.

Our forecast does include the following two assumptions, first, we'll open 30 to 32 company restaurants and our franchise partners will open two to three restaurants, and second, we will generate comparable sales growth of approximate hi 2% for the full year. Now I would like to turn the call back over to G.J.

Thanks, Scott, despite a continued challenging environment, we remain very optimistic about our brand, our people, and our potential for 2007 and well beyond. We continue focusing on our four-wall execution, which we believe sets us apart from our competition, and drives our guest loyalty and success. Our development plan is in great shape, and as I have said before, tough times give us the opportunity to steal share from the competition, and that is what we hope to achieve from our operation spokes execution.

I want to thank all of the TEXAS ROADHOUSE team members for their continued commitment to providing legendary food and legendary service, and for fostering a culture that focuses on the basis of running the business, day in and day out. With that, Operator, that covers our prepared remarks, so if you would open the lines for questions.

Thank you. (OPERATOR INSTRUCTIONS).

First go to Jeff Farmer with CIBC.

Great. Thank you, good afternoon, guys. Considering you have a great price value story to tell in the current environment, has there been any consideration on your part to expand your advertising beyond I guess in-store or your local store marketing efforts?

Hi Jeff, it's G.J. How are you?

Good, how are you?

Good, thanks. We're putting a lot more intensity around our local-store marketing effort. We just finish doing a 16-city tour, really focusing on new initiatives -- intensifying our initiatives that work and sharing best practices around the system. We had over 400 folks attend those seminars. Right now it is focused on a basis of executing day in and day out inside those four walls, and making sure when folks come in that we get a loyal guest. Once we get them in the door, we get them back. So really we look to intensify around that.

Scott, with the impact of your pricing and all the pushes and pulls on your restaurant-level margin, can you update on your expectations for the restaurant level margins for the full year?

Sure, I think last quarter, you know, I said we might be down in margin, 25 to 50 basis points. Certainly, I think given where we are today, almost flat, I would say 50 is probably out of the question. Being that off I would say it's probably closer to 25 -- flat to 25 basis points down for the year.

Okay, that's helpful. And then final question for me. I believe the last time we talked about this, your management conference was supposed to be about $2.5 million gross, and it looks like it came in about 3.4. Do you know why that delta was there?

Yes, essentially we had to move our conference almost at the last minute from New Orleans out West. And it ended up costing us bit more because of the move.

Thank you guys.

Moving on to Jeff Omohundro with Wachovia.

Thanks. My question, really, is around the area of franchise acquisitions and maybe a little bit of elaboration what you are thinking is along those lines and how that would integrate with your capital structure objectives. Perhaps you could update us on target debt to capital.

Hi, Jeff, it's G.J. First of all, the franchise acquisitions are purely opportunistic, as I have said, it's really looking at returns commensurate to building new restaurants, not -- we're certainly not seeing a tremendous amount of people raise their hand at this point, but if they do, we're certainly willing to talk to them. And there are no set number of restaurants that we are going to acquire at this point. And we'll see how that shakes out. One of the things that did happen through these acquisitions obviously putting a little more debt on the balance sheet is really helping us a little bit. It's really a wait and see, and we'll continue to see what happens.

Jeff, this is Scott. I think from a target, debt to capital ratio, I would say that we haven't settled in on particular number. I think we're comfortable adding more debt, certainly to the equation, but at the end of the day, we will, I'm sure we'll end up more on the conservative side of the debt to cap ratio versus our other restaurant companies.

Thanks.

Moving on, Matt DiFrisco with Thomas Weisel Partners.

Hi, I just wanted to get confirmation on what your current price increase is, and what it was in the quarter. I heard you say 2% average check, or a little less than, I think it's 1.8 in the recent quarter. But what was your price increase, or overall price?

Yes, Matt, this is Scott. The current pricing we have is about 2.9%, and that was kind of taken as follows, about 0.8 last October, approximately 1.6 in December, and then another 0.5 in February.

Okay. And then what you just said also before, roughly 2% average check, but if you were doing positive traffic it was 1.8 then your average check in the last quarter.

We said approximately 2%. That's the number.

Right but you did positive traffic, and you did a 1.9 comp, so I guess you did a 1.8. There's nothing else factoring in there?

That's pretty close.

Okay. Also looking -- your guidance of 2.5%, or -- you are doing better than 2.5% now, and you say 2% or better. I was just curious, remind us what you were doing the first four weeks of last year, I think it was around 1%, if I'm not mistaken? Of the quarter?

Last quarter, last year, on a month-by-month basis, we did about -- we were pretty flat last year in the month of July, and pretty flat in June as well.

Okay. I see you ended up but 2.3 on the comp for the third quarter, but I thought you were around like 0.5% in the first four weeks of --

Most of the 2.3 was in September and that was when we were lapping negative sales from hurricane Katrina.

Got it. Thanks for the reminder. Thank you very much.

Sure.

We'll hear next from Steven Rees with JPMorgan.

Hi. I just wanted to ask about the negative mix that you began to experience last quarter. It appears that that stabilized and perhaps got a little bit better than what you initially saw. Given that, are you comfortable with the current level of pricing that you are running and perhaps maintaining that level price as you push in to 2008 and experience some cost pressures.

I'm going to repeat the question for G.J., Steven. His question was are we comfortable with our current level of pricing, given the apparent stabilization of our mix-shift changes.

Correct.

Which have stabilized or very similar to Q2 -- Q1. I'm sorry.

I'll start by saying we continue to monitor and think it is important that we strengthen our value position, relative to our competitors. And so we watch this thing, almost on a daily basis. At the moment, we are comfortable where we are, but as we are currently in negotiations or starting the negotiation for our contracts for 2008, we are evaluating what, and if we will do anything else moving forward. Obviously, as I said earlier, we'll watch what our competitors are doing. But I will say, if you look back in history, at TEXAS ROADHOUSE, as we have strengthened our value position, we have been able to grow sales. The last seven years we have taken our average unit volumes from $3 million to $4 million. And we've continued to comp positively compared to our competitors. We're watching it but feel comfortable with where we are at the moment.

Just on G&A, how should we think about the growth in dollars in the second half of the year? I know we had the mismatch of the conference this quarter.

Well, I would think of it in terms of, leverage, and we'll probably get 25 to 50 basis points of G&A leverage the rest of the year.

Okay. Great. Thank you.

We go next to Jason Whitmer with Cleveland Research Company.

Hi, how are you guys doing?

Good.

G.J., have you seen any good signs of rationalization of capacity growth from your peers starting to show up in the marketplace. I know you've previously talked about that helping you open up some of the better sites. Do you either see some of that, or do you even see some signs that some players, either regional or national could be closing locations?

We have seen a little bit of that. I wouldn't say it's a lot by any stretch of the imagination. There has been some reasonable closures by some of our competitors. A handful, here or there. Has we seen a significant effect? The answer is no.

Okay. And then if you look at your end market expansion this year, it seems like you have got a lot more restaurants opening besides -- or closer to your existing restaurants. Are you going to see any acceleration of a benefit from that, either in preopen or G&A or labor, or maybe even overall in your sales?

I don't think we're necessarily going to see any leverage, just by the way our operating model works. And I think you know this, but it's a people approach to where we do it where we have folks, so we're not getting that close to many of our other existing stores.

Okay. Thank you, that's all.

We go to Chris O'Cull with SunTrust Bank.

Good afternoon.

Hey, Chris.

My question is regarding labor and wage rates. It's my understanding many of the states that you guys compete in are spreading the minimum wage increases over a couple of years, maybe 3 years even, for some. Are you expecting a similar amount of wage-rate inflation that you experienced in '08, this year.

Chris, this is Scott. Right now I would say no, primarily because we are not expecting to have states increase their tip wage to the extent that we saw, particularly in four states this year. And that's the big increase for us. So even though the federal government is increasing the federal minimum wage in three steps, one of which just happened, and one of which will happen a year from now, we think that will have much less of an impact on us than if the state takes their tip wage from $2.13 to $3.65 or $3.75 an hour like we have seen in a few states this year. So that's really the key determinant of how much we're impacted. Right now, we don't see that to be the case, particularly in states where we have a lot of restaurants going in to 2008.

Okay. Okay. Great. And then in terms of just looking at the labor cost line, are there opportunities in terms of productivity improvements that you see?

Well, I would tell you that two things. One is, we're not telling any of our folks to schedule less hours. We're not coming up with a labor scheduling model that miraculously says we can run 50 fewer hours or week or 100 fewer hours a week in our restaurants. In fact we're telling our folks, it's a great opportunity to step up the level of service if we can do that, to again take advantage of the opportunity to steal market share. That said, we've had a back office platform called MenuLink which had a theoretical food cost piece it to that we've had out for a couple of years now, and it also had a labor piece, which give our folks enhanced reporting, and does facilitate them creating a schedule on their own, and we have expanded that to about 40 restaurants in our system, and we're probably going to roll that out further in the system later on this year.

I take it you've seen improvements in those 40 stores.

I can tell you haven't modeled any in our forecast. I want to stress that we allow our operators the wherewithal to schedule as they see fit to run their business appropriately. Remember their compensation program is designed such that they get 10% of the net income in the restaurants, so they already have a natural incentive to manage all of the items on their P&L as closely as they think is appropriate.

Okay. Okay. One last question regarding commodity costs. You mentioned that dairy cost was higher in the back half of this quarter. Can you help us understand what your assumptions are in your guidance for dairy costs for the balance of this year?

Well, we have assumed -- they don't come down a whole lot for the balance of the year at this point. So we haven't modeled anything that says in essence our cost of sales goes down because dairy cost retreat. Certainly if history -- repeats itself as it has in the cheese market quite often, we would expect them to come down a little bit, but you don't know if something else is going to spike back up. The biggest thing I can think of is produce in that case, which has been hairy the last few years. So that's why we have kept that assumption flat.

Okay. Great. Thanks, guys.

We go next to Larry Miller with RBC Capital Market.

Hi, guys, how are you doing?

Good, Larry.

I'm sitting here -- maybe if you can help me understand, your back half same-store sales guidance includes that it's going to improve relative to the first half, and you got somewhat harder comparisons as you mentioned in September. What is it that you're seeing that gives you confidence there?

Larry, this is Scott. I think the September -- I feel pretty confident about the September lap simply because it was positive last year because we were lapping all of the negative sales from Hurricane Katrina. I don't view last September's comp as being necessarily that strong of a comp per se because the comparisons were weak from 2005. And we feel that we continue to do what we're doing, we should be able to lap all of the numbers from last year.

Okay. Great. And then just, a little more detail, maybe help me understand that same thought, is your mix shift the same thus far in Q3, therefore, your traffic is slightly stronger than it was in Q2?

I would say it has been very similar.

That's helpful. On the dairy thing, how much of that is a percent of your comps?

Dairy is about -- over all it is about 5% of our food cost, and cheese specifically is about 2.5%.

Okay. Thank you very much, guys.

David Tarantino with Robert W. Baird is next.

Hi, good afternoon. GJ, you mentioned comps in the second quarter were a bit below your plan. One question I had was do you think you are seeing a traffic pullback related to the menu pricing that you have taken?

I would tell you know. The feedback certainly from our operators and -- has -- there hasn't been any pushback relative to pricing.

Okay. And I guess a related question would be, have you seen any variance in comps in the markets where you have taken relatively more pricing versus those where you have taken relatively less?

Hey, David, this is Scott. I will tell you that there is not a difference between the higher price action markets and the lower price action markets when you average them all together. There are some differences by states if you will. And we have been a little bit weaker in the Northeast overall than in the rest of the country. But we have some states where we have taken quite a bit of price, and they are doing quite well. It really does vary and I wouldn't attribute it specifically to pricing actions.

That's helpful. And then one question to clarify your pricing for the balance of the year. Are you planning to replace the pricing that rolls off in October?

We haven't made that decision yet, David.

Okay. Thanks a lot.

And next we ale hear from Paul Westra with Cowen & Company.

My first question is have -- do you have any initiatives underway to address the beverage-mix issue that's kind of arisen over the last two quarters.

Well, we have a whole series of non-alcohol beverages that have been doing quite well so far. And we're very hopeful in terms of what they bring for us.

Just a question on the comp, kind of by month, did comps bottom out in May and got a little bit better by June? Would that be fair to say or --?

I would say that they were pretty consistent between May and June.

And just -- have you considered testing a KDS system at the restaurants?

Well, I'll answer that kind of in two -- in two ways, one thing we're working on is a table management system, which is a program to help us better seat our guests and manage, you know, two lists, a walk-in list, and a call-ahead list. And that can interface ultimately with the KDS system. And we are on the very sort of beginnings of exploring a KDS system. Keep in mind we do have kitchen printers all over our restaurants, and when we do process orders it does filter out throughout to the kitchen to the individual workstations around. So we do see some benefits of KDS, it is also quite expensive at the same time.

Okay. Thank you very much.

We'll hear from Dan Lewis with RBC.

Question has been answered, thanks.

Thank you. Next to Andy Barish with Banc of America Securities.

Quick modeling question for the back half, with the franchise acquisition in place now, does that keep the D&A number kind of at this Q2 run rate? And what are you looking for, roughly, on the interest expense line, which hasn't really been a noticeable number historically?

Well, Andy, this is Scott. Absolutely, D&A is going to go up a little bit. The back half of the year. A little bit could be 20 to 30 basis points from where we were in the second quarter over all, and then on the interest-expense line, we added $35 million in debt, and then our debt approximately cost us about 6% today on our credit facility, so you can do the -- the math on that for half the year, and that's approximately what we are going to have to add to our interest expense.

Thank you.

(OPERATOR INSTRUCTIONS). Next we go back to Matt DiFrisco with Thomas Weisel Partners.

Hi. In the context of looking at what you guys are growing at this year, 30 to 32 stores on an annual basis, and hearing some of your competitors, especially the guys who come close to your annual unit volumes are greater. They are slowing their growth plans early on right now for '08. What is the early indication of your pipeline right now for 2008?

Well, as we have said along -- this is G.J. We have said all along we're going to grow company store base 16 to 18%. Right now we're very comfortable with that number going in to '08. And we are well on our way in terms of our locations for 2008. So we are very comfortable. But I'll remind you we are at 272 restaurants, we have a long way to go as compared to some of those competitors that you're talking about.

Okay. And then can you speak about your outlook on how you look at a market, the radius of how close you can put together those stores. Some people use circles of 5 miles, 10 miles. What is your ideal so far?

That answer varies depends on how big the trade areas are. In some cases it's 3 miles, sometimes it's 10 miles. It depends on where it is in the United States. So I couldn't give you a specific answer.

Okay. How about -- and last question -- regards to TV advertising. Are there markets on the cusp of becoming media efficient where you could switch from radio to TV, or do you think that's even a benefit to switch from TV from radio, where you can leverage your dollar better.

Right now, with the way our business model works, with the guest loyalty once we get them in the door, and we're very comfortable with the approach we have taken. Again, we have grown sales significantly over the last seven or eight years. That said, there are markets that we allow our operators to make a decision to do a cable buy or radio remote or something like that, so clearly, it's not that we do zero, but the operator makes that decision based on the market. It is not the way we generally think of television as a medium to grow our business, though.

Okay. Great. Thank you, guys.

We go to Destin Tompkins with Morgan Keegan.

Thank you. GJ, there's a lot of speculation on where beef prices may go in 2008. Can you give us maybe a little more detail there and if you had to lock in today what '08 might look like?

The problem with answering the question in terms of if you had to lock in today for what '08 would look like there's such a disparity in terms of the futures markets with risk built in to these markets versus the spot markets. If you could in fact buy based on the spot markets today, you would be doing pretty well. It's a little early to tell where this is going to shake out. Somebody has got to eat this beef at the end of the day, and demand is not very strong at the moment. So we are hopeful that there will be a spot here in the next couple of months that we'll be able to be opportunistic in terms of the futures in the beef market. I think a lot of the panic that's out there, and the numbers you have seen, I think there's a lot behind those numbers that hasn't really come out yet. I don't look at it as doom and gloom, and at the end of the day, we think there will be an opportunity here in the next couple of months.

One of your competitors has talked about taking on shorter-term contracts to avoid the risk premium with the longer-term contract. Is that something you might consider?

Absolutely. Right now, it's a different market out there, and if that, those alternatives, all of the above, we're going to look at.

Okay. Great. One other question I had on kind of if there was any plans for any new product news, any new things to add to the menu to freshen up the menu or keep it fresh.

We're always testing things all over the country, again, because of the way -- our entrepreneurial spirit, if you will. We're working on a couple of salads, a couple of kid's items, and we'll have to wait and see if they make the menu or not.

Great. Thank you.

Ladies and gentlemen, we go to Jason Whitmer with Cleveland Research.

Scott, was there any unusual weather impact during the quarter?

I would say overall, no.

Okay. Thanks.

Gentlemen, it appears that is our final question at this time. I'll turn the conference back to you for closing or final remarks.

All right. We thank you for joining us this evening and we look forward toe seeing you at the end of the third quarter. Good night.

Ladies and gentlemen, this concludes today's presentation. Thank you for joining us today. You may disconnect your lines. Have a great day.