Segment Information

3 Months Ended

Mar. 28, 2023

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 exclude pre-opening expense as it occurs at irregular intervals and would impact comparability to prior period results. 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:

	For the 13 Weeks Ended March 28, 2023
	Texas Roadhouse		Bubba's 33		Other		Total
Restaurant and other sales	$	1,100,926	$	61,369	$	5,288	$	1,167,583
Restaurant operating costs (excluding depreciation and amortization)		923,936		52,916		5,035		981,887
Restaurant margin	$	176,990	$	8,453	$	253	$	185,696
Depreciation and amortization	$	29,888	$	3,447	$	2,892	$	36,227
Capital expenditures		57,137		6,255		3,341		66,733
	For the 13 Weeks Ended March 29, 2022
	Texas Roadhouse		Bubba's 33		Other		Total
Restaurant and other sales	$	926,729	$	51,225	$	3,018	$	980,972
Restaurant operating costs (excluding depreciation and amortization)		773,261		43,431		3,097		819,789
Restaurant margin	$	153,468	$	7,794	$	(79)	$	161,183
Depreciation and amortization	$	27,541	$	3,190	$	2,889	$	33,620
Capital expenditures		39,677		7,377		1,975		49,029

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

	13 Weeks Ended
	March 28, 2023		March 29, 2022
Restaurant margin	$	185,696	$	161,183
Add:
Franchise royalties and fees		6,773		6,514
Less:
Pre-opening		5,377		4,291
Depreciation and amortization		36,227		33,620
Impairment and closure, net		55		(646)
General and administrative		49,865		40,294
Income from operations	$	100,945	$	90,138