Thank you, Mike and good evening, everyone. By now you should have access to our earnings release for the first quarter ended March 26, 2019. It may also be found on our website at texasroadhouse.com in the Investors section.

Before we begin our formal remarks, I need to remind everyone that part of our discussion today will 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 earnings release and our recent filings with the SEC.

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 release.

On the call with me today is Scott Colosi, President of Texas Roadhouse. Following our remarks, we will open the call for questions. Now I'd like to turn the call over to Scott..

Thanks Tonya. Good evening, everybody. We're pleased to see our top line momentum continue this quarter with comparable sales growth of 5.2% including 2.6% traffic growth.

Our comparable sales growth combined with new openings resulted in another quarter of double-digit revenue growth and our healthy sales trends continue to reinforce our belief in both the strength of the positioning of Texas Roadhouse and the quality of the guest experience we are providing.

Bottom line profits this quarter were significantly impacted by higher labor costs. We clearly expect this trend to continue for the rest of the year and as a result we've updated our guidance on labor per store week growth for 2019.

The additional 1.5% pricing we put in place at the beginning of the second quarter did provide a significant benefit to our bottom line the rest of the year.

Still as we said last quarter, we may or may not be able to hold margins flat as a percentage of sales for the year and we're certainly facing labor challenges in our business right now and it was disappointing to give back some money on a bottom line this quarter.

However it's important to remember that our operators are paid off the bottom line and they have a vested interest in effectively managing their labor spending to protect sales over the long term even if it results in some short term pain.

Ultimately, we're going to stay focused on what we know are the right decisions for the long term health of our company and we continue to maintain a strong and flexible balance sheet, which we can use to create value for our shareholders as opportunities arise.

With our proven track record, we feel good about weathering any storm by remaining committed to and focused on the fundamentals that have got us to where we are today. We believe we are on our way to growing our average unit volumes to $6 million over the coming years and are confident that profit growth will follow.

Now Tonya will walk you through the financial update..

Thanks Scott. For the first quarter of 2019, revenue growth of 10% was driven by 5.6% store week growth and a 4.6% increase in average unit volume. Restaurant margin dollars grew 2.7% to $122.6 million while net income decreased 7.6% to $50.4 million or $0.70 per diluted share.

As Scott mentioned, comparable restaurant sales for the quarter increased 5.2% comprised of 2.6% traffic growth and a 2.6% increase in average check. Comparable sales during the quarter saw a net benefit of approximately 50 basis points primarily from the positive impact of the calendar shift of New Year's Eve.

By month comparable sales increased 7.2%, 4.7% and 4% for our January, February and March periods respectively. Comparable sales for the first four weeks of the second quarter were up 2.9% lapping an 8.5% increase in comps from the same timeframe last year.

To put it in perspective, April 2018 was not only our highest monthly traffic comp from last year, but also the highest single month since mid 2015. Before moving from sales, I will mention that total sales are negatively impacted by approximately $1.5 million during the quarter as a result of higher gift card fees net of gift card breakage income.

Increased gift card sales during the fourth quarter of 2018 led to higher redemptions and resulting fees, which impacted restaurant margins by approximately 18 basis points. We expect these higher gift card sales to have an impact on restaurant margin of approximately 10 basis points for all of 2019.

For the quarter restaurant margin decreased 128 basis points to 17.9% as a percentage of total sales compared to the prior year period. The change in margin was primarily driven by increases in cost of sales and labor. Cost of sales as a percentage of total sales increased 7 basis points compared to the prior year period.

The benefit of a higher average tax was more than offset by the impact of approximately 1.8% commodity inflation and the impact of a shift to higher price, but lower gross margin menu item. Our guidance for full year inflation of 1% to 2% remains unchanged.

However, we do expect that second quarter inflation will be approximately 3% implying lower quarterly inflation for the back half of the year. Labor as a percentage of total sales increased 118 basis points to 32.7% and labor dollars per store week were up 8.2% compared to the prior year period.

The components of the increase include wage and other inflation of approximately 5.2% and growth in hours of approximately 3.1% including the impact of higher guest count. As Scott mentioned we now expect our full year labor per store week growth to be 7% to 8% including the impact of traffic growth.

Finally, other operating costs as a percentage of total sales increase 2 basis points compared to the prior year period. The benefit of sales growth was more than offset by the $1.2 million impact of the quarterly actuarial reserve adjustment for general liability insurance.

This includes a $0.8 million charge this year and a $0.4 million credit last year. Moving below restaurant margin, G&A cost for the quarter increased $5.8 million or 19.2% compared to the prior year period. The primary drivers of the increase were higher salaries and share-based compensation cost along with increased marketing expenses.

The expansion of our regional operations support structure had an approximately $0.7 million impact on year-over-year growth in G&A. We currently expect cost to be approximately $3.3 million higher for the full year 2019 as a result of the expansion.

Overall, we continue to expect 2019 cost to grow 12% to 13% on a 53 week basis compared to the prior year. Depreciation expense increased $3.3 million to $27.8 million or 4% as a percentage of revenue, which was an increase of 12 basis points compared to the prior year period.

The increase this quarter included $1.5 million of accelerated depreciation, primarily related to the restaurants expected to be relocated in the next 9 to 12 months. We expect additional accelerated depreciation of approximately $3 million for the rest of 2019 with approximately half of that coming in the second quarter.

For the quarter, we had interest income of $0.8 million as compared to interest expense of $0.4 million in the comparable period last year. The change was primarily driven by higher earnings on cash and cash equivalents as well as paying off our outstanding credit facility in the second quarter of 2018.

Also our tax rate for the quarter came in at 14.9% compared to the 13% rate in the prior year period. The increase was primarily due to lower excess tax benefit related to our share based compensation. We continue to expect a full year 2019 rate of approximately 15%.

Finally, in the first quarter we adopted new accounting guidance that required our operating leases to be recorded on the balance sheet. This does not have an impact on either our income statement or statement of cash flow. We continue to expect to incur approximately $210 million to $220 million in capital expenditures for the year.

The increase is primarily driven by the timing of openings during the year as well as planned restaurant relocation. Our balance sheet remains strong as we ended the quarter with $252 million in cash.

During the quarter, we generated $111 million in cash flow from operations, incurred capital expenditures of $42 million and paid a dividend of $18 million. That concludes our prepared remarks. Operator, please open the line for questions..

[Operator Instructions] Your first question comes from David Tarantino from Baird..

Hi. Good afternoon. Just maybe a first question on the labor trend that you guided to Tonya I think you're now including the potential impact from traffic growth in that number and I don't think you did that last time.

So can you maybe explain whether the outlook has changed in your view either up or sideways?.

Sure David you're right. Before we were speaking mid single digit inflation excluding the impact of traffic. Now we're saying it's 7% to 8% with the impact of traffic. So really overall we don't feel like it has changed a whole lot essentially. It depends on what you call mid single digit I suppose.

But we really kind of just took the lower end of the range off the table if you will just based on what we saw in Q1 with 8.2% on a per store week growth.

It feels like that's the trend and we didn't really see much change in wage inflation or other inflation and not a lot of change actually a little bit of an uptick in growth in hours given the traffic that we had in Q1. So I'm really more about taking I guess the lower end of the range off the table..

Right. And it does seem I guess then that you're assuming some traffic growth in the balance of the year.

And I guess the implied number for April isn’t -- if you can confirm it doesn't seem like traffic grew in April but is your view that April is unusual because of the comparison and we should get back to traffic growth as the year progresses? Is that how to frame up the guidance?.

One, speaking specifically to April, I mean I'll tell you that we definitely lapping that tougher comparison is one piece of it. And also we didn't really get into quantifying some of the differences, some of the variability we saw throughout the period but when you look at week one included Easter last year, week four included Easter this year.

We would have expected that to just kind of be a not nothing impact, but it seemed to be a little more negatively impactful than we would have thought. Again we didn't really quantify it. It's hard to say that definitely because of Easter being in different weeks. But it -- or is it tied to some spring break shift or something like that.

But it felt like there was a little bit of that going on too and that gave us some confidence, give us a sound confidence on traffic going forward..

And hey David, this is Scott. I think also when we look at this stuff, we do sometimes look at the two year and three year comps and because of the comparisons and I mean the April to your comp is better than what it was in March and February. On a three year basis, it's just as good as it was in March and quite a bit better than February.

I'm sure there are probably some flips with Easter in there. I'm sure there's some weather related stuff in there. You're in Chicago I heard it snowed 5 inches yesterday or something in Chicago. So yeah there's all sorts of stuff going on.

I think we're very, very bullish on the strength of our business and our ability to grow traffic longer term because of the way we staff our restaurants and are very protective of our food quality and also the conservatism or let's say, less aggressiveness over time we've taken with regards to pricing and we feel very, very good about the strength of our business..

Right. Makes sense. Thank you..

Your next question comes from Jeffrey Bernstein from Barclays..

Great. Thank you very much. Two questions as well. First just on the I guess the most recent price increase, seemingly be the case that you are already aware of these updated assumptions for I guess now 7% to 8% increase in labor. Just wondering how you think we should think about the margins for '19 in this new environment.

Scott, I know you said pricing or may or may not hold restaurant margin flat. So I'm just trying to think about the outlook for the rest of the year based on the price you took at the end of March presumably knowing the inflation outlook for the rest of the year..

Well so the pricing somebody date I am not sure, but anyway I would tell you that the pricing will give us a pretty big benefit. There will be some fluctuation on food inflation the rest of the year somewhat higher in the second quarter, little bit lower the rest of the year.

And then there's some other expenses, insurance related stuff like that that come up throughout the year that could help us on the margin front. But it's going to be close and a lot of it will depend ultimately on traffic and it'll also depend on and does just the level of wage inflation continue.

So we've been running the last few quarters I think it is about 8% per store week up in labor and in some combination of wage inflation and other inflation in labor plus hours and we do think that's going to continue, but we're all going to have you know for the first time in a long time over 3% pricing.

So that's going to go a long with the margins and know I think we got a shot at keeping it pretty close for the year but we'll see..

Got it, a clarification from the earlier question was you really haven't changed your guidance. You're just now layering in a couple 100 basis points of traffic assumed and therefore the mid single digit went up to 7% to 8%..

Yes you can say that. I mean we're just saying look we've been running this 8% number and our traffic is a little bit higher, a little bit lower, I'm not sure that's going to change a whole lot.

If our traffic is substantially higher, substantially lower, yeah our folks aren't going to do nothing with regards to scheduling on hours in particular but you were probably going to be current run rate for the next three quarters at least probably..

And I think to, Jeff this is Tonya, heading into the year back in February with a mid single digit guidance, there was some hope that perhaps we'd see a little of that inflation abate a little bit weather mainly on wage inflation and other inflation.

And while maybe we'd end up a little bit at the higher end of the range early in the year maybe we'd see some help there. But just based on what we saw in Q1 we're going to say hey, it doesn't feel like that. And that was kind of the reason to narrow that guidance quite a bit and move it just up a tad if you will..

Got you, and my other question was just on the beef outlook.

I know you mentioned that your overall commodity basket still up 1% to 2% maybe a little bit higher in the second quarter lower in the back half, but can you give us some color on the percentage locked either on the overall basket or any directional color on beef, it would seem like there's a lot more chatter recently about potential implications from the African swine flu and I know you were I guess a little bit less than half of your basket locked as of last quarter.

So would seem more vulnerable in the back half, but I'm guessing maybe you have some different intel in terms of the beef outlook..

Sure yeah. Right now on the full commodity basket, we're about 50% locked, so a little bit more than where we were back in the beginning of the year not much. And one of the bigger differences I guess that we're seeing we are locked less than you know this year than we were last year.

So from that perspective a lot of what happens this year well is based on what we were doing last year if you will. So we'll continue to see that.

And in beef tends to be hiring Q2 and we're seeing that that a bit, but there's some other things too causing a little bit of movement whether it's sweet potatoes, some other produce items into soft and things like that, but given that we are floating quite a bit of the basket that does leave you a little more vulnerable.

I think from the African Swine Flu perspective, we feel good about the impact on pork. We feel good about our pork prices for 2019, could be more impactful in 2020 heading into next year. And then on the beef side I think a lot remains to be seen.

I think from our perspective seems like maybe we would set up a little more -- it's hard to know where that's going to be more impactful from a cut perspective. Is it going to be more focused -- ground beef focused or middle meat focused.

We feel like maybe it'll be a little more impactful on ground beef, which is a little bore not as big of a deal for us, but a lot remains to be seen on beef in the back half the year relating to all that and given that we are still floating a bit in the back half of the year that could that could be impactful, but we are lapping some higher prices in the back -- from the back half of '18.

So that's why we still feel confident on the 1% to 2% guidance we have. .

Very hopeful. Thank you..

Your next question comes from Peter Saleh from BTIG..

Hey great. Thanks for taking the question. I just wanted to ask about when you think about the margin profile of the business and the labor inflation that's ongoing it doesn't seem to have end.

Does this change the way you think about unit growth going forward or are there projects on the edge that you would say, maybe we're not going to do those projects or does this have really no impact on your unit growth kind of going forward..

Hey Peter, this is Scott. Right now zero impact on unit growth going forward. I guess you could say it's one advantage of us growing at the rate that we're growing, which is not a humongous number of restaurants.

So to do just over 20 roadhouses and then a few others it is not enough for us to have to really think too hard about slowing that down or changing our minds on some deals. So 1% on restaurant margin. If that was permanent let's say, wouldn't be enough to make us rethink.

We've had such good sales growth and we've got -- we're in some states where our margins are substantially less than others, but yet we do higher sales. Some of that's higher pricing and whatnot and it ends up all working out. So we're very confident we can continue to develop restaurants.

No doubt Texas Roadhouse, that brand in particular already being at 550. I mean there's only so much farther we're going to go. Historically we've said 700 to 800. Is it 700, is it 800. Don't know for sure, but we don't see any reason to slow down even with the tough labor market we'll adjust over time.

And we've always challenged our operators to be as efficient as they can be. They always respond. Again they're paid on the bottom line.

So if they're not going to do things that they don't believe that add value back to their business and at the same time, they're willing to try some things and fire some bullets and see if those things can work whether it's helping them get the sales to above $6 million on average or reduce turnover in some way..

Great and can just give us an update on where you stand with Bubba's and the returns that you're seeing also just the top line and the margin profile of the new ones you're building are still the same..

So Bubba's not really much new news since our last call and that the last call we had pretty good same store sales growth in all of 2018 and that's continued on in the 2019 at pretty much a similar clip. I can tell you that we're still on track I think to open four Bubba's this year later this year and again so not much changed.

The margin profile is still similar in that the margins are a little bit better than on the roadhouse side and that continues to be the case.

We'd still like to see our newer Bubba's openings on average do a little bit stronger sales and we're still working on trying to better understand why that is, but the older Bubba's are the ones who've been around more they're still growing sales again at a pretty good clip.

We did add lunch to one Bubba's in 2018 and we just added to four more a couple months ago because we do think in certain locations having lunch at Bubba's might be a bigger deal and we've had in one store historically in Albuquerque and that restaurant's done very well sales wise and margin wise.

So we've done -- it hasn't really impacted the margin as much maybe as it would at roadhouse and Bubba's lends itself little more because of the menu and the TV and everything more to more lunch occasions. So we're going to see how that works out.

But we're hopeful that the momentum is building in Bubba's and we're going to continue to march down that road. Yeah we're not going to open up 10 Bubba's next year or anything like that but it gets more encouraging by the day..

Your next question comes from Stephen Anderson from Maxim Group..

Yes. Good afternoon. I just wanted to follow up on the question on the -- on the beef cost front. Certainly, I guess the other factor to consider has been the Midwestern floods and that's been a reason why we're seeing higher beef costs from your contacts.

Are you hearing that as a potential for maybe a cut in supplies later on this summer?.

No know I haven't heard that. I mean if anything what we're hearing is that supply is actually pretty good in the back half and the expectation of supply is really good in the back half of the year. So haven't heard yet that that could be impacted by any weather or anything like that..

Thank you..

Your next question comes from John Glass with Morgan Stanley..

Thanks very much. So as you think about pricing, there's two sides of the coin. One is you know given labor, would you consider looking at pricing yet again this year or do you feel like what you've got now is just as much as the consumer or you're willing to tolerate.

I guess the other side of that question is now that you've got that incremental pricing in place, do you have any evidence that there's been any traffic resistance or do you feel like that's not been an issue at all?.

So John there's nothing that we've heard that has said there's been any kind of resistance that's any different than any other price changes that we've made. Of course it has only been four weeks and again we're lapping the toughest comp from three years ago, so last year and all that. So it's just too early to tell.

But historically we haven't seen it. As far as taking any more pricing, I don't see us doing anything really till the end of the year. I'd be very surprised unless there was an uptick in some way and labor inflation and just some got crazy in the world, but I don't see that happening.

I think we're going to really challenge ourselves particularly on the hours front and just challenge every revenue story is different. We're really a collection company -- we're collection of individual restaurants and every story is a little bit different and in some of our restaurants they've added hours they probably needed to.

They probably were a little bit understaffed, others maybe they pushed a little bit too much and that's for us to manage and make sure we've got a good balance. So we're going to talk about staffing for your next you know 10,000 a week in sales but we don't necessarily need to be staff for our next 20,000 week in sales.

So we just want to make sure we've got a good balance and we're disciplined and we believe we're -- the vast majority of our restaurant that's the case, but like in any concept, you've got some outliers and we want to make sure that we're open on those..

Okay. And then there was pressure up and down the restaurant level P&Ls, so including with other restaurant expenses, was that more timing related or I mean how do you think about that one, that's been a favorable line in the past, particularly given your comps are so strong.

Why was that not favorable? I know you cited marketing and some things, that's sustainable or is that just a first quarter timing issue..

The bigger thing on other ops this quarter is we had a general liability negative impact of about $1.5 million or $1.2 million. So we had a bigger hit here in Q1 in '19 and we were lapping 400,000 credit from last year. So I believe that was probably around call it $0.02 impact on other ops.

We're also seeing higher supplies to go supply but higher to go sales. We're seeing that hang around a bit. We're seeing higher credit card charges hanging around a bit.

So those are some of the things but there is still leverage that we are getting on some lines like utilities, we're seeing some leverage and things like that but for Q1 that's kind of where other ops landed.

On a full year basis, it feels like with the level of pricing we'll have with the menu, that we should get a little bit of leverage on the other operating line and lastly it depends on again those general liability actuarial reserve adjustments and how those kind of play off 2019, if they're a hit or a credit to the line.

So we'll see how those play out, but excluding any impact on those, I would hope to see a little bit of leverage on that line this year..

Got it. Okay. Thank you..

Your next question comes from Andy Barish from Jefferies..

Hey guys. Just wondering how you implemented this last pricing increase at the beginning of the 2Q? Was it fairly broad across the menu or kind of focused and then on the mix you've had almost now a point of mix for a couple of quarters.

Do you expect that to continue or will some of the pricing actions maybe start to impact what's going on with mix out there?.

On the pricing side on mix we've been pretty positive. If I'm looking at it correctly, we were at -- on the quarter we were about 20 basis points positive mix for 2019. So that's what we've seen a little bit is more a little more positive mix I guess in the back half of '18 and into '19.

Right now I would -- it's hard to say on next, it could be 20 basis points one way or the other. It doesn't seem like it gets too far beyond that but on and what was your other question? Oh on the pricing, on the pricing it was 1.5% with the average. But you had some stores you maybe took a lot less than that.

Some who maybe took up to 2%, 2.5% because and it was kind of the flip of whatever we did in December. So if you have stores who did nothing in December, they may have taken a bit more with this last increase and it was kind of spread across the menu, but different line items, different menu items, than what we would have been targeting in December..

Other thing too is sometimes it's different menu items depending upon different markets as well and for example if you take our store lines some markets may have taken a little bit more pricing a little more back in November, others didn’t that may have slipped in this last price increase, some who had not taken any pricing on store lines did this time.

And so not everybody moves exactly in sync depending upon what's going on in their world especially with minimum wage in the different states. And so it's a little bit different across the board. However we have seen pretty uniformly over time a nice mix benefit, which has been great. One or two tenths will take it.

It's a lot better than the negative mix of 0.5% I'll tell you that..

Yeah. I'm sorry, but just a clarification on the components of comp as traffic was to 26 and I thought you had 17 of pricing before this last price increase..

Yeah no Andy. You're right. The mix was essentially flat. I think it was just 7 basis point positive mark. So it was a smaller number than when I gave you earlier, so that was 2.5 pricing about a 10 on mix which gave you 2.6 on traffic quarter..

[Operator Instructions] Your next question comes from Chris O'Cull from Stifel..

Thanks. Good afternoon, guys.

Scott were you surprised that growth in labor hours was greater than the growth in traffic in the quarter?.

Yes I would say yes a little bit, but it's not that far off from where we've been trending the last few years. So this increase in labor hours has been around the 3% range for at least three years now for us.

So the one surprise would be yeah if our traffic's a little bit less than what it was parts of last year or the year before why didn’t our hours growth slowdown.

On the other hand turnover keeps creeping up and the turnover keeps creeping up on a higher base of employees because we've added and if you go back 10 years, we've gone from 3.6 million AUV to 5.2 million and our average employees per restaurant has gone up a lot.

And so it's sort of a multiplicative impact of more employees per restaurant times a higher turnover number, which can lead you to more growth in hours just to rehire the people you're losing and all the training and orientation and all that stuff that you have to do in addition to any staffing initiatives.

So that's the part that I'm not surprised but given that again our guys get paid as a percent of the bottom line we kind of have a lot of trust in them to make those decisions. So it'll be interesting to see what happens this next quarter if traffic remains similar to what it was in Q1 overall and not withstanding April..

And that's segue into my next question which what is the turnover, the hourly turnover rate for the system right now and then I know you guys have been working on improving that. Can you talk a little bit about some of the initiatives you may have to address it..

Both in the high 120s for us for right now. That's a fully loaded turnover number for us. That includes transfers and other things that we have in our system. But basically we're constantly talking about culture treating people right and we're talking about paying people market level rates whatever they are front back a house.

We're talking about higher rate and it's a challenge in our world because we are so busy, a lot of folks haven't faced the volume that they have when we have a Texas Roadhouse. You throw on top of that the Amazons of the world or anybody else offering very high hourly wage rates or high from a historical perspective.

There's a lot of even non restaurant competition out there just fighting for good folks. And so we don't know if our turnover would have been 140 if we weren't doing some of these things with staffing to enable us to have more and more scheduling flexibility. Talking our folks more about what they needed to do a better job all those kinds of things.

I will tell you though and we've had this before, but on the management side, the kitchen manager, service managers, those types of positions, our turnover continues to get better and it was high teens just a few years ago and we're low teens today.

So we think that really bodes well for the strength of the operational execution day to day of Texas Roadhouse because that management so key and as busy as we are you've got to have a lot of managers because you've got to have it in the front. You got to him in the back to make everybody happy, make everybody feel good.

So we're very pleased with that. Hourly battle continues and we're going to just keep fighting hard and getting after it..

And then just one last one. Tonya does the 5% hourly wage inflation you provided in the presentation, does that include tipped employees..

Yeah that includes all hourly employees..

Do you have the wage inflation for non-tipped the non-tipped employee group..

No I don't have that at my fingertips to break that down for you. I'm not sure how that would break down, that 3.5%. We had -- you know we were looking at about 3.5 wage rate inflation in Q1. That's pretty close to what it's been actually for you know the last several years..

Chris, we've actually been growing hours a little bit faster in the back house than we have the front of house. So the back a house and that's where the jobs are -- they are hard and they were making all that approved from scratch, we still do that and there's a lot of it and it's really tough.

And so it's really competitive, the guys every day they're saying I'm having to pay more per hour for just that any position in the back than I ever thought I would because the front of house is more minimum wage based because you got tips on top of that, back the house is probably more market based and yes there's more pressure and so there's still quite a bit of inflation there too..

Yeah Chris, I can tell you in that 3.5 if you just are front of house employees. So there could be tips and nine tips in that number. But everyone about 1% to 1.5% is what's included in that 3.5% for the front of house employee..

I thought the hourly wage inflation was 5%..

Well you have 3.5% with wage inflation and then you have another 1.6% just relating to other labor items like payroll taxes, group health insurance things like that..

Okay. fair enough. Thank you..

Your next question comes from Andrew Strelzik from BMO Capital Markets..

Good afternoon. My first question I believe when you originally talked about taking the incremental pricing, excuse me, the intention was to not let the restaurant margins fall below 17%. So I guess I just want to confirm first that you don't expect to fall below that 17% still with that pricing where it sits today.

And in going to 7% to 8% wage inflation and one key running a touch higher than that would imply obviously the potential for some moderation.

Is that just managing a little bit better like you talked about or it's lapping the investments or is there anything else but what would get you know kind of to the lower end of that?.

You got it right. I mean it's all those things that you mentioned. As far as would there be any slight moderation in the growth per store week, that would be right on. As far as the 17% that would be our intention but if for some reason we were coming in just shy of that, I think that may influence us on pricing.

But again that wouldn't be till later in the year. And it could be too late to do anything for 2019, but it would definitely help us in 2020. Again we finish at 17.4% last year. So we'd have to be quite a bit below that at the fall below 17%.

And with this kind of pricing, again I think we've got a decent shot of holding margins flat, long ways to go in the year for sure and our intention is to stay above 17% and get back some that we've lost. Our intention is not to stay at 17% longer term, our intention is to head back towards 18% over time..

Okay, that's helpful and my last question you have more cash on your balance sheet than you've had in a pretty long time and you mentioned in the prepared remarks having the flexibility with that cash to take advantage of some opportunities as they arise, so you know what are the opportunities that you may be looking at in the event that they don't arise are you comfortable letting that cash balances continue to build..

Well I think there's always the opportunity on share buybacks. We do have about 70 million remaining on our outstanding facility and that doesn't expire. So that's an opportunity. And then using there's always the opportunity with we can take these cash to buyback franchisees to look at other things like that.

But if those opportunities don't present themselves as you suggest they're here, I think to a point where we're okay letting taxes to a certain amount because given how much we are focused on being company owned versus franchise, we like having a little bit more cash on the books just for -- just to have a rainy day if you will.

So I don't think that bothers me too much to see that cash grow a little bit a little bit more..

Your next question comes from Will Slabaugh from Stephens..

Thank you. Question on Bubba's, you mentioned you were pretty pleased with the sales there. So if you would give any more color on that, that would be great just for the sales that would send in the stores and then secondarily, given how far we are in '19 and Scott, you mentioned it's unlikely we'd be building 10 or more next year.

I assume it's realistic to think as that acceleration probably wouldn't happen in 2020. So my question is would there be any sort of meaningful acceleration happening in your mind 2021 or beyond or are we still sort of a little bit of a holding pattern until we learn more..

So learning that Bubba's for sure. Again we're very pleased with the momentum of the existing stores from a same store sales growth perspective. The last couple of years we opened nine Bubba's and a number of those having started out with sales that that are that great. They're not terrible. They're just not that great.

They don't say hey let's go build a bunch more Bubba's. I say that because some of that comparing to roadhouse which is just a whole another world compared to most sports restaurants or sports bars. The sales that we're opening where they're actually like pretty darn good.

But in comparison to what we know we can do vis-à-vis roadhouse and what it's costing us to get these Bubba's open from return on investment perspective we want to be doing more.

If these restaurants once they get some history behind them and a lot of it is people learn who we are over time and it is very similar to Texas Roadhouse where in a lot of cities we were in the way we developed we were by ourselves if you will.

We opened one in this town and one in this town and one in this town and it took a long time for folks to know that we were and we did kind of just go okay sales for a long time and then when people figured it out, the sales started to take it off and you see a lot of that same thing with Bubba's.

So you know hopefully 2021 would be a year we'd be stepped on the gas a little bit. Easy for me to say that now in April of 2019 because 2021 is 20 months away. So it's easy to throw out a comment like that but we would certainly hope so with $200 million in cash in the bank we really hope so.

To the prior question, I mean that's really what we would like to do is to build a lot of Bubba's and it is new to Texas Roadhouses.

So we think we've got the people pipeline we're putting together and we've got the most stable best Bubba's team we've had and is starting to show in the sales growth and we're learning something new every day, we're doing a lot of research on Bubba's.

Our guys are getting better and better just like in roadhouse and executing legendary food at Bubba's. We're just trying to be patient and disciplined and not trying to grow faster than what we should. And I can tell you internally everybody is dying to grow faster, so the concept faster is kind of in our blood.

We're competitive and all that but at the same time, we believe we're doing the right thing for our shareholders and ultimately for our people. So hopefully I can say 2021 next year we're going to build more but we'll see..

Got it. That's helpful. And sticking with the development thing for a minute you mentioned with the roadhouses obviously you're at 580 I believe as of quarter end and then 700, 800 is that ultimate goal.

As you think about the stories that you've seen opened recently, it sounds like there's no sort of even yellow light in terms of API flowing down be at AVs sales trends at all. So just curious what you've seen in those more recent openings and if you have seen anything that's different than what you'd seen in prior years..

I can tell you, we've opened six stores this year company Texas Roadhouses and they averaged in their first week 148,000 in their first week. So I thought the first month that just the first week there's a pretty big honeymoon but 148,000 some of these are in some pretty small towns. So we're pretty jacked about that.

And it just says -- it just shows how strong the Texas Roadhouse brand, which of course is in its 27 year is relative to Bubba's and so it's just -- it's just very exciting, the reception we're getting that just kind of blown us away that at this level we've still get this kind of reception.

Obviously our challenge is to retain as much of those sales as we can, as early as we can to get the returns and again because our partners make the percentage of the bottom line we want to make sure they're making a really good living and in running the Texas Roadhouse.

So hopefully retain a lot of sales but man these openings are as exciting as they've ever been..

Your next question comes from John Ivankoe from JPMorgan..

Hi. Thank you.

Obviously there's been a lot of focus on the store level side of cost, but I was wondering if we could talked at the organizational level or at the administration level that doesn't take place in the stores, in a higher cost environment, is there anything that you can do that you would do has kind of slowed the overall growth of your G&A is there any type of longer term G&A metric that you're beginning to think about that kind of a maturing but still growing company should have over the next couple of years..

Hey John this is Scott. We talk about that a lot.

Obviously I don't think it's shown in our numbers as a percentage of revenue but certainly post some of these accounting reclassification of revenue recognition, post that we'd like to be in the low fives and we think over time, we can get there, provided we continue to get at least high to low mid single -- high single digit to low double digit revenue growth and we think we can get some leverage on G&A over time.

We've had this case with some compensation particularly for folks that are paid a lot in stock and given the rise in the stock price over the last few years and the accounting for that has added quite a bit to our G&A. We added a couple more regions to our regional structure and that cost us some money again.

We don't have to do that for a long time if at all on the Texas Roadhouse side. So we don't have any more major investments. We are expanding our support center in Louisville because we've had people sitting in the hallways for a few years now. We're just totally out of space. And so we're doing that.

I will add some depreciation and some building rent for us but we're doing that instead of going out and building a new building. We're not building a new campus. We're not going out doing anything crazy. We're not putting our name on a football stadium. We're not a lot of things that we're not doing.

But we're still encourage our people to travel, go out and be in the restaurants and go out and celebrate and recognize people and have some fun. We are in the hospitality business. So we are going to continue to do that.

We've got a lot of energy in our company because we think we've got a pretty good balance on telling our people we need to be diligent and manage our cost structure outside the restaurant support our operators.

But at the same time be on offense if you will which means no people continue to challenge our organization and celebrate and all those things.

So it's a balance and I think once we get through this period, we had we had -- get through this period of adding the regionals Tonya's promotion our VP of Ops got promoted to Chief Operating Officer, really don't have any left here coming up in our organization to any degree.

So I think we've got more upside opportunity to reduce our G&A as a percent of revenue kind of going forward..

Your next question comes from Bob Derrington with Telsey Advisory Group..

Thank you, Scott. Could you help us understand typically the company is very disciplined around the capital plan, around spending, whether it's new store development, share repurchase activity, dividend payout etcetera. But your cash is growing pretty nicely.

I'm just wondering what is it that would trigger you to move or move more so on one of those things. I don't think you've bought shares back since maybe 2016 if my math is correct and I know that the cost in new store development has continued to rise which you're cautious about spending there.

So what is it that would trigger one of those more so than where you currently are..

Well I'll just say as we've always said, we will continue to be opportunistic on share buyback and jump in there and we can jump in a big way if and when we feel that opportunity is right for us.

Obviously we've raised our dividend substantially over the years from where we've started including this most last year where we took a big jump and so we've got a lot of pattern to jump even farther. We'd love to be growing Bubba's faster. We'd love to buy back some of our franchisees.

So there's a lot of opportunities to spend some money but we also do want to have a certain amount of cash in the bank just any unforeseen storm we'd like to have that. Beyond that, we don't have all the answers. A lot of companies tend to go out and buy stuff and make acquisitions with that.

I think like any company we've got people that are for and against that strategy. I think when we go and talk to investors, I think a lot of them are maybe more against that strategy because it is so tough to make acquisitions work.

I'm talking not our franchisees I'm talking other restaurant companies in that realm and Lord knows we get pitched a lot of a stuff when you're in not position.

So ideally it's keep growing Roadhouse grow the heck out of Bubba's, raise our dividend, yes buy back some stock, we love to do that as well and have done a lot over the years albeit not too much recently, but I think those opportunities will be there and we'll end up spending some of that cash..

And was our last question at this time. I will turn the call back over to the presenters..

Thanks everybody for joining us. If you have any other questions please let us know and have a great week. Thank you..

This concludes today's conference call. You may now disconnect..