Segment Information

9 Months Ended

Sep. 27, 2022

Segment Information

Segment Information

(12) Segment Information

We manage our restaurant and franchising operations by concept and as a result have identified Texas Roadhouse, Bubba’s 33, Jaggers and our retail initiatives as separate operating segments. Our reportable segments are Texas Roadhouse and Bubba’s 33. The Texas Roadhouse reportable segment includes the results of our domestic company Texas Roadhouse restaurants and domestic and international franchise Texas Roadhouse restaurants. The Bubba's 33 reportable segment includes the results of our domestic company Bubba's 33 restaurants. Our remaining operating segments, which include the results of our domestic company Jaggers restaurants and the results of our retail initiatives, are included in Other. In addition, corporate-related segment assets, depreciation and amortization, and capital expenditures are also included in Other.

Management uses restaurant margin as the primary measure for assessing performance of our segments. Restaurant margin (in dollars and as a percentage of restaurant and other sales) represents restaurant and other sales less restaurant-level operating costs, including food and beverage costs, labor, rent and other operating costs. Restaurant margin also includes sales and operating costs related to our non-royalty based retail initiatives. Restaurant margin is used by our chief operating decision maker to evaluate restaurant-level operating efficiency and performance.

In calculating restaurant margin, we exclude certain non-restaurant-level costs that support operations, including pre-opening and general and administrative expenses, but do not have a direct impact on restaurant-level operational efficiency and performance. We also exclude depreciation and amortization expense, substantially all of which relates to restaurant-level assets, as it represents a non-cash charge for the investment in our restaurants. We also exclude impairment and closure expense as we believe this provides a clearer perspective of the Company’s ongoing operating performance and a more useful comparison to prior period results. Restaurant margin as presented may not be comparable to other similarly titled measures of other companies in our industry.

Restaurant and other sales for all operating segments are derived primarily from food and beverage sales. We do not rely on any major customer as a source of sales and the customers and assets of our reportable segments are located predominantly in the United States. There are no material transactions between reportable segments.

The following tables reconcile our segment results to our consolidated results reported in accordance with GAAP (in thousands):

	13 Weeks Ended September 27, 2022
	Texas Roadhouse		Bubba's 33		Other		Total
Restaurant and other sales	$	931,683	$	51,993	$	3,323	$	986,999
Restaurant operating costs (excluding depreciation and amortization)		785,546		46,368		3,076		834,990
Restaurant margin	$	146,137	$	5,625	$	247	$	152,009
Depreciation and amortization	$	27,757	$	3,198	$	2,780	$	33,735
Capital expenditures		55,158		8,107		2,363		65,628
	13 Weeks Ended September 28, 2021
	Texas Roadhouse		Bubba's 33		Other		Total
Restaurant and other sales	$	814,239	$	46,198	$	2,320	$	862,757
Restaurant operating costs (excluding depreciation and amortization)		686,437		38,779		2,399		727,615
Restaurant margin	$	127,802	$	7,419	$	(79)	$	135,142
Depreciation and amortization	$	26,178	$	3,236	$	2,213	$	31,627
Capital expenditures		44,369		5,930		3,633		53,932
	39 Weeks Ended September 27, 2022
	Texas Roadhouse		Bubba's 33		Other		Total
Restaurant and other sales	$	2,818,565	$	157,830	$	9,633	$	2,986,028
Restaurant operating costs (excluding depreciation and amortization)		2,357,910		136,837		9,353		2,504,100
Restaurant margin	$	460,655	$	20,993	$	280	$	481,928
Depreciation and amortization	$	83,402	$	9,690	$	8,683	$	101,775
Capital expenditures		146,151		21,898		6,145		174,194
	39 Weeks Ended September 28, 2021
	Texas Roadhouse		Bubba's 33		Other		Total
Restaurant and other sales	$	2,415,444	$	126,964	$	7,716	$	2,550,124
Restaurant operating costs (excluding depreciation and amortization)		1,997,303		105,000		6,874		2,109,177
Restaurant margin	$	418,141	$	21,964	$	842	$	440,947
Depreciation and amortization	$	78,081	$	9,399	$	6,666	$	94,146
Capital expenditures		114,274		17,729		6,998		139,001

A reconciliation of restaurant margin to income from operations is presented below (in thousands). We do not allocate interest expense, net and equity income from investments in unconsolidated affiliates to reportable segments.

	13 Weeks Ended				39 Weeks Ended
	September 27, 2022		September 28, 2021		September 27, 2022		September 28, 2021
Restaurant margin	$	152,009	$	135,142	$	481,928	$	440,947
Add:
Franchise royalties and fees		6,299		6,186		19,362		18,236
Less:
Pre-opening		5,701		6,740		15,315		17,327
Depreciation and amortization		33,735		31,627		101,775		94,146
Impairment and closure, net		772		29		537		550
General and administrative		42,812		41,234		132,319		114,807
Income from operations	$	75,288	$	61,698	$	251,344	$	232,353