Texas Roadhouse, Inc. (NASDAQ:TXRH) Q1 2024 Earnings Call Transcript

Texas Roadhouse, Inc. (NASDAQ:TXRH) Q1 2024 Earnings Call Transcript May 2, 2024

Texas Roadhouse, Inc. beats earnings expectations. Reported EPS is $1.69, expectations were $1.65. Texas Roadhouse, Inc. isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).

Operator: Good evening, and welcome to the Texas Roadhouse First Quarter Earnings Conference Call. Today’s call is being recorded. All participants are now in a listen-only mode. After the speakers’ remarks, there will be a question-and-answer session. [Operator Instructions] I would now like to introduce Michael Bailen, Head of Investor Relations for Texas Roadhouse. You may begin your conference.

Michael Bailen: Thank you, Brianna, and good evening. By now, you should have access to our earnings release for the first quarter ended March 26, 2024. It may also be found on our website at texasroadhouse.com in the Investors section. I would like 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 Jerry Morgan, Chief Executive Officer of Texas Roadhouse; and Chris Monroe, our Chief Financial Officer. Following the prepared remarks, we will be available to answer your questions. In order to accommodate everyone that would like to ask a question, we kindly ask analysts to please limit yourself to one question. Now, I’d like to turn the call over to, Jerry.

Gerald L. Morgan: Thanks, Michael, and good evening, everyone. There is no doubt that 2024 is off to a great start with first quarter revenue over $1.3 billion and same-store sales growth of 8.4%. Our strong results continue to reflect our operators’ commitment to the consistency and quality of the food, the hospitality they provide, and our everyday value. The benefit of our long-term approach to the business and our focus on always prioritizing the guest experience is evident in the record sales, margin dollars, and net income for the first quarter. While the Texas Roadhouse brand generated average weekly sales of over $163,000 in the first quarter, I want to also highlight the progress our operators are making at Bubba’s 33 and Jaggers.

Bubba’s 33 averaged over $120,000 in weekly sales during the first quarter, with four locations scheduled to open this year and a growing pipeline for the coming years, we remain confident in the future for Bubba’s 33. Jaggers, our quick service brand, is also experiencing momentum and delivered nearly $68,000 in average weekly sales. We continue to expect a mix of company and franchise Jaggers over the coming years, and the first international franchise in South Korea is scheduled to open later this year. Our investment and commitment to opening new restaurants at a more even pace has been successful. In the first quarter, we opened nine company-owned Texas Roadhouses. We currently expect to open an additional six company-owned restaurants during the second quarter.

For the full-year, we remain on-track to open approximately 30 company-owned restaurants across the three brands. Our franchise partners opened two International Texas Roadhouse locations and a domestic Jaggers during the first quarter. We continue to expect as many as 14 franchise openings this year, including four Jaggers. On the technology front, our conversion to Digital Kitchens is going as planned with 30% of the approximate 200 scheduled conversions completed so far. The feedback from our operators remains highly positive. In addition to kitchen efficiencies, our operators also appreciate the calmer kitchen and less stressful execution during power hours. Also on the technology front, we are preparing to go live during the second quarter with a new people system, which we call Roadie-First Technology.

The system will provide our employees with a more user-friendly platform for easier access to their data and records. It should also improve the recruiting and employee management processes for our managers. The Roadie-First Technology name reflects our commitment to enhancing the Roadie experience at all levels, which will allow us to continue hiring, training, and retaining the best people in the industry. Finally, we just returned home from our Annual Managing Partner Conference in Austin, Texas. It was a great week celebrating our operator success in 2023, planning for the future, recognizing our top talent, and having a little fun. We also unveiled our first purpose statement, which is, ‘Serving communities across America and the world’.

We believe our purpose builds clarity for our roadies and will inspire them for our journey ahead. Speaking of inspiration, I want to congratulate Casey Cohen from Turnersville, New Jersey as she was named our Texas Roadhouse Managing Partner of the Year. I also want to congratulate Vanessa Blanco Quezada from Albuquerque, New Mexico for being named our Bubba’s 33 Managing Partner of the Year. Additionally, I want to recognize Benito Galindo of Covington, Louisiana for being named our National Meat-Cutting Champion, and Frank Fernandez for being named Our Support Center Roadie of the Year. And lastly, I would like to congratulate and thank our award finalists for their contributions and accomplishments. Now, Chris will provide some thoughts.

Christopher Monroe: Thanks, Jerry. I want to echo your comments regarding what an impactful time we shared with our managing partners in Austin. They are doing a fantastic job and it was great to be a part of celebrating the best of the best. Having an operator mentality and focus on the guest experience continues to pay financial dividends for us. While it’s only been five weeks since we implemented a 2.2% menu price increase, we are encouraged by the traffic and mix trends we’ve seen so far. In fact, our mix trends improved as we move through the first quarter and into the beginning of the second quarter. We’ve always taken a long-term approach to pricing with the goal of driving sustainable traffic growth. We believe our guests continue to reward us for this approach by choosing to come to our restaurants more often.

Commodities, more particularly beef, have performed better than we’d expected. We’re benefiting from the improved cost environment as only a small portion of this year’s beef purchases have been made through fixed price contracts. While we still expect beef inflation to increase as we move through the year, we now expect full-year 2024 commodity inflation will be approximately 3%. Currently, we expect to be above the full-year inflation forecast in the back-half of the year. Labor is benefiting from improved productivity as our hiring efforts have resulted in well-staffed restaurants with longer tenured roadies. This is allowing our managers to staff their restaurants more efficiently and focus on the employee experience. So far this year, wage and other labor inflation has played out as anticipated.

As such, we continue to expect 4% to 5% inflation for the full-year. Our cash flow from operations continues to support our balanced approach to capital allocation. We’re pleased with the returns we are generating from our ongoing investments in the business, including new store openings, bump-outs, kitchen expansions and digital kitchen conversions. During the first quarter, we generated over $240 million of operating cash flow, which was used to fund over $125 million of capital expenditures, dividend payments and share repurchases. As we’ve done throughout our history, we will continue to return capital to shareholders and invest in growth projects. And now, Michael will walk us through the first quarter results.

Michael Bailen: Thanks, Chris. For the first quarter of 2024, we reported revenue growth of 12.5%, driven by a 7.7% increase in average unit volume and 4.9% store week growth. We also reported a restaurant margin dollar increase of 23% to $228 million and a diluted earnings per share increase of 31.4% to $1.69 Average weekly sales in the first quarter were over $159,000 with to-go representing approximately $21,000 or 13.1% of these total weekly sales. Comparable sales increased 8.4% in the first quarter, driven by 4.3% traffic growth and a 4.1% increase in average check. By month, comparable sales grew 4.2%, 10.4% and 10.2% for our January, February March periods respectively. And comparable sales for the first five weeks of the second quarter were up 9.3% with our restaurants averaging sales of approximately $158,000 per week during that period.

In the first quarter, restaurant margin dollars per store week increased 17.3% to over $27,500. Restaurant margin as a percentage of total sales increased 148 basis points year-over-year to 17.4%. Food and beverage costs as a percentage of total sales were 33.9% for the first quarter. The 131 basis point year-over-year improvement was driven by the benefit of a 4.1% check increase offsetting the 0.9% commodity inflation for the quarter. Labor as a percentage of total sales decreased 51 basis points to 32.5% as compared to the first quarter of 2023. Labor dollars per store week increased 5.7% due to wage and other labor inflation of 4.3% and growth in hours of 1%. The remaining 0.3% increase in labor dollars per store week was primarily driven by a $0.7 million net unfavorable adjustment to our quarterly insurance reserve.

Other operating costs were 14.7% of sales, which was 39 basis points higher than the first quarter of 2023. Higher operator bonuses as a percentage of sales resulting from an increased year-over-year restaurant level profitability drove 23 basis points of the increase. Also included in the year-over-year change is an approximately 35 basis point negative impact from adjustments to our quarterly reserve for general liability insurance. These adjustments include $3.5 million of additional expense this year and a $0.8 million credit last year. Moving below restaurant margin, G&A dollars grew 5.5% year-over-year and came in at 4% of revenue for the first quarter. G&A dollar growth benefited from lapping an approximately $2.6 million one-time cost related to an executive retirement.

Our effective tax rate for the quarter was 13.9%. Our expectation for the full-year 2024 income tax rate remains unchanged at approximately 14%. Finally, as a reminder, 2024 is a 53 week year for us. As such, the fourth quarter will have 14 weeks versus our normal 13 weeks. We estimate that the additional week could benefit full-year 2024 earnings per share growth by approximately 4%. Now, I will turn the call back over to, Jerry for final comments.

Gerald L. Morgan: Thanks, Michael. The theme of our Managing Partner Conference was Buckle Up. It is a fitting message as we prepare for our journey ahead. At conference, I encouraged our operators to buckle-up and double-down on our mission, our core values, and our purpose of serving our communities across America and the world. Last, but certainly not least, we are honored to have Casey and Vanessa, our Managing Partners of the Year, with us for the call today. Congratulations again to both of you. That concludes our prepared remarks. Brianna, please open the line for questions.

Operator: Thank you. We will now begin the question-and-answer session. [Operator Instructions] Our first question today comes from David Palmer with Evercore ISI. Please go ahead.

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Q&A Session

David Palmer: Thanks. I’ll try to squeeze in just two quick ones. First, on other operating expenses, it’s up 9% per store in the quarter. That was a similar type of growth rate in all of ‘23. Could you remind me, what’s driving that growth in that line item? And, as you look ahead, is it reasonable to assume that, that growth rate might slow and you’d be able to leverage that line a little bit more? And, then I’m just any comments or details you can give about the Digital Kitchen initiative? It obviously has great uptake. Any quantification about the benefits you’re seeing, table turns, order accuracy, anything that could help the business? Thanks.

Michael Bailen: Hey, David. Thanks for the question. It’s Michael. I’ll start with the question by the other operating. As we mentioned, we did have a general liability adjustment on that line of $3.5 million. So, that is driving some of that increase. Obviously, as we’re doing higher sales volumes that also is driving those dollars per store week as there are items in there that are directly correlated with sales. And, we also mentioned the higher profitability of the restaurants is leading to more compensation expense. So, it is certainly possible and probably expected that dollar per store week growth for other operating will not increase at that high of a level throughout the remainder of the year. But obviously, we don’t know what other adjustments we may have to make, but all those things equal, that should come down.

And, I can start off on the Digital Kitchen, and then I’ll turn it over probably to, Jerry. We’re a little early for us to give any comments actual throughput or any kind of numerical quantitative information on it. But we are very happy with the qualitative feedback that we’re getting so far and encouraged by what we’re seeing.

Gerald L. Morgan: Yes. David, on the Digital Kitchen, I think as we’re still early into it, we are very excited about the positive feedback we’re getting from our operators. We are being able to see and track our cook times a little bit, the timing of our food, and really the calmness in the organization that the Digital Kitchen brings to our back of the house. So, I believe that there is just a quality of life or experience of on the job that will benefit us as we move forward. So, we are definitely excited about getting more done as we move through the year and getting some more feedback, but so far, really, really good feedback.

David Palmer: Thanks, guys. Congrats.

Gerald L. Morgan: Thank you very much.

Operator: Your next question comes from David Tarantino with Baird. Please go ahead.

David Tarantino: Hi, good afternoon, and congrats on a good start to the year. My question is on the margin outlook. I think you’ve talked in the past about the potential to get long-term restaurant margins back to 17%, 18%. I know that’s a long-term target, but my question is related to how much progress towards that target you might be able to make this year in light of the easing inflation environment, the productivity gains you’re making. So, just wondering if you could frame-up this year in the context of progress towards that long-term target? Thanks.

Christopher Monroe: Sure, David. This is Chris, and thanks for the question. Well, clearly, we’ve had solid margin expansion in Q1 here and reaching 17.4%. So, we’re in the zone of our goal of 17% to 18% and that’s where we’d like to be. And honestly, we feel like we have an opportunity to expand it similarly in a year-over-year basis in Q2. But in the second half, there’s the commodity pressure that we’re expecting, and so it will be more difficult to do that. But, then when you get to the full-year after you’ve added all that up, we should see some modestly higher than we were in 2023, and with still a long-term goal of consistently delivering between 17% and 18%.

David Tarantino: Great. Thank you very much. And, then if I could ask a follow-up. You did mention labor productivity gains. So, could you just maybe elaborate on what you’re doing there? And, is that just a matter of kind of more stable staffing in the current environment? Or are you actually making progress in other ways? So, any help there?

Christopher Monroe: Yes, David, this is Chris, again. I think it is a reflection of more stable staffing and having our longer tenured roadies as I talked about in my prepared remarks. It just allows our operators to just have a team that’s together, that’s working together, that gets reps together, and they’re just more efficient. And, we’re far away from the situations that we were in during the pandemic where, it was difficult to get people to come in and we were having difficulty in staffing. So, now that we have our staff in-place and our turnover is certainly much lower than it was before, that’s driving some of the benefit on that line.

David Tarantino: Great. Thank you very much.

Operator: Your next question comes from Brian Harbour with Morgan Stanley. Please go ahead.

Brian Harbour: Yes. Thanks, good afternoon. I think you commented on just some improvement in mix sequentially. Could you talk about, kind of, what drove that or any kind of like customer behavior shift that you observed as you went through the quarter?

Michael Bailen: Yes. Sure, Brian. This is Michael. I can talk a little bit on that. Yes, I mean, I’d say we’re really not seeing anything changing in our consumers’ behavior. We are seeing less alcohol, negative mix than we have been seeing and that was something that has been trending back more to neutral over the last several months. We’re still running a little bit negative on alcohol, but entrees, appetizers, add-ons, all those items have which were never really overly negative, have really flattened out. So, very encouraged by what we’re seeing there. And to me, it shows that the consumer is still seeing the everyday value that we’re offering.

Brian Harbour: Thank you.

Operator: Your next question comes from Jeffrey Bernstein with Barclays. Please go ahead.

Jeffrey Bernstein: Great. Thank you very much. Two questions, the first one just on the, you made reference to the Texas Roadhouse brand versus the Bubba’s brand. Clearly, both of them are very strong railroad for the industry. But when you compare them between each other, the Texas Roadhouse, I mean, the two-year stacks on comps are 22% and their AUVs are $8.5 million. The Bubba’s, two-year stack is 12 and the AUV is like low 6s. Just wondering what do you view as the greatest driver of the discrepancy between the two? And, would you say that with the passage of time that gap would narrow in terms of both comp and AUV and make the brand more similar in terms of being indifferent which brands you open? And, then I have one follow-up.

Michael Bailen: Yes. It’s Michael. Thanks for the question. Some of that’s going to get into a little speculation and it will be hard for me to answer. Obviously, the Texas Roadhouse brand has been around, quite a while longer than Bubba’s had. So, we are very happy with what both brands are doing. It’s hard for anybody to compete with what Texas Roadhouse has been doing, but Bubba’s at a $120,000. It was a very strong number for us. And, when you only have less than 50 Bubba’s, you can always, it’s easier for those numbers to be skewed one way or another by a few stores. So, we are very encouraged by what we are seeing there and we generate similar returns from both concepts and we’re excited to see what we see in the future.

Jeffrey Bernstein: I guess that’s the issue when your big brother is Texas Roadhouse.

Gerald L. Morgan: That is very true.

Jeffrey Bernstein: My follow-up question is just to clarify on the unit openings. I think you mentioned still being confident in the 30 company operated this year. I know you mentioned 10 year-to-date and 18 under construction. Maybe these things open pretty quickly. But, can units start construction in coming months and still open before year-end or might you come in close to that 28 number for the full-year ‘24 just for modeling purposes? Thank you.

Gerald L. Morgan: Yes. We can get them under construction now and get them into this year. So, we’re still approximately 30 between the three brands, and obviously, the pipeline for ‘25 is being worked hard too. So, I believe that we’ll hit that number. We have a lot of confidence in it right now. Everything kind of is working well for us. So, we’ll stay right there for the moment.

Jeffrey Bernstein: Great. Thank you.

Gerald L. Morgan: Thank you.

Operator: Your next question comes from Peter Saleh with BTIG. Please go ahead.

Peter Saleh: Great. Thanks for taking the question. Just maybe two quick ones for me. On the Ziosk, could you just remind us maybe what percentage of the sales are now going through that platform? And, aside from maybe the table turns, which I’m assuming that’s benefiting you on table turns, what else are you learning about the customer given that so much of the sales are going through that platform? Any other data that you’re able to collect and what are you learning about the customer? And, then I have a follow-up as well.

Gerald L. Morgan: Yes. I mean, it’s, the pay at the table. So, I believe we’re approximately 80% of our guests use the Roadhouse Pay as we call it as the pay-at-the-table feature. I don’t know there’s a lot to learn there, other than it just helps with when they’re ready to go, they can swipe their cards and be on their way. So, I think from that, it’s a convenience factor more importantly, and it’s a transaction that allows them to leave when they’re ready. And, it’s obviously been very well liked and utilized within our guests.

Peter Saleh: Great. And then, I think you guys mentioned that you’re expecting commodity inflation to be higher in the, I guess, the second half of the year, getting to that full 3% for the full-year. Can you just give us a sense on how much of your basket is locked for the second half and if there how much variability we have around that number?

Michael Bailen: Hey, Peter, it’s Michael. Yes. Like in similar quarters, we’re not going to give a lot of detail on what is locked for competitive reasons. At this point in time, we’re not going to — we haven’t certainly put a lot of beef into a fixed price contract, both from our side seeing the volatility and the packers seeing the volatility. So, hard to you agree upon a fixed price. We certainly have entered into supply contracts for most of the beef that we’ll be using over the remainder of the year. So, yes, there is the potential for volatility in that inflation number as we move through the year both higher or lower if the market were to behave differently than we expect.

Peter Saleh: Thank you very much.

Operator: Your next question comes from Sara Senatore with Bank of America. Please go ahead.

Sara Senatore: Hi, thank you. I guess, two questions. One, just on the mix and pricing the comp. Could you just remind us how much price you had? I think you said last time we spoke was, like, 5% price. So, just trying to calculate the mix, it sounds like it’s less than percentage point headwind at this point?

Michael Bailen: Yes. Hi, Sara, it’s Michael. Yes, in the first quarter we had 4.9% pricing and you are correct, we had about 80 basis points of negative mix and but that did come down quite a bit in the first five weeks of our second quarter to only about 20 basis points of negative mix as we continue to have about 4.9% pricing in the menu for both the second quarter and the third quarter.

Sara Senatore: Okay. Great. That’s very helpful. And, the sort of the question I have related to that is just, as you think about, again, your business versus everybody else, where everybody else is seeing, like, check management, do you have a sense of, again, who? What’s driving that? I know it’s somewhat speculation, but are you getting people who maybe are trading in from other concepts who, relative value is still very good, so good at Texas that it encourages them to attach more? Or I’m just trying to understand the dynamics which seem to be running contrary to the rest of the industry in a good way.

Gerald L. Morgan: Well, thank you very much for that kindness. We believe that our offerings and the value that’s built into our menu is really what is allowing people to be very happy when they do trade in from wherever. And, our focus on our food, our service, and the experience that we provide with the value built into our menu is really what we see happening. I don’t really see anything else in the mix that tells me anything different than keep doing what we’re doing, legendary food and legendary service, and keep making sure that guests have great experiences in all of our businesses.

Sara Senatore: Well, certainly working for you. Thank you.

Gerald L. Morgan: Thanks, Sara.

Operator: Your next question comes from Dennis Geiger with UBS. Please go ahead.

Dennis Geiger: Great. Thanks, guys. Jerry, wondering if you could just talk a little more looking ahead to later in the year? And, thinking about pricing, I know you spoke to it, at a high-level earlier, but anything philosophically there given where traffic is, given you’ve underpriced competitors in recent years, but given cost inflation that you’ve seen over the years, is there any kind of high-level as you, look to that that next pricing increase that you can share today or just how you’re thinking about it and how the operators are thinking about it?

Gerald L. Morgan: Well, Dennis, we’ll follow the same procedure we always have. We’re just five, six weeks into this last round. We’ll gather our feedback from all of our managing partners and our market partners probably in August, September and talk about what we would or wouldn’t do in October. So, still a little early. We’ll take the approach of being conservative. We’ll see what happens in the industry going forward, and then we’ll absolutely partner up with our operators and decide what is best for each and every one of their store or their market or their region. And, then as a company, we’ll help them make that decision that will also be very good for our consumer and our shareholder.

Dennis Geiger: Makes good sense, Jerry. Just one more maybe if I could. Just on staffing hours as it relates to that traffic, we’ve seen some a really good relationship there in recent quarters. Anything additional on the on the go-forward there as we think about that relationship relative to last year, kind of recent quarters, a good way to think about the go-forward, would you say? Thank you.

Christopher Monroe: Hey, Dennis. It’s Chris. Thanks for that question. I’ll start and Michael can clean-up anything I mess up here. But, I think that, we’ve talked about having a historical average of 50% growth rate of our hours, growth to our traffic growth, trying to keep it around a 50% level. And, in the fourth quarter of last year, last year you’ll remember that we hit that. And so, we actually came in well with the number, even better than that in the first quarter, something more like 25%. So, we’d like to continue that. Now, I don’t know that we can continue the 25%. Our goal is around 50%, but I think that there’s definitely a lot of work that’s been done to improve our labor situation, and it’s really thanks to our operators and their hiring and their staffing and making sure that their teams are working well together. And, now we’re delivering these results over the, at least the last two quarters, we’re definitely back in the zone.

Michael Bailen: Yes. Chris, I’ll echo what you said there. I think last year all that hard work of the operators to get their store staffed the way they needed to be is now paying off in that percentage for the first quarter. And, we’ll see where the next several quarters come out, but there’s certainly, feels like there is strong potential for that to remain at/or below that 50% level over the next several quarters.

Dennis Geiger: Good stuff. Congrats, guys.

Gerald L. Morgan: Thank you.

Operator: Your next question comes from Jeff Farmer with Gordon Haskett. Please go ahead.

Jeff Farmer: Great. Thank you. I have a quick follow-up on commodities and then just one more on capital investment. So on commodities, I understand there’s some black box nature of what’s going on, but based on what you know now, can you share expected quarterly commodity inflation over the next couple of quarters?

Michael Bailen: Yes. Hey, Jeff, it’s Michael. I’m not going to give specific numbers, but I’ll help guide you all. The expectation is the second quarter will be above where we were in the first quarter, but probably still below the full-year average. And, then Q3 and Q4 are looking fairly similar and are going to be a little bit above that 3% full-year number.

Jeff Farmer: Okay, that’s helpful. And, then on the average capital investment for a new Roadhouse, at least according to the [kiosk] (ph), it’s expected to be roughly $8 million in 2024, which is flat versus last year, but it looks like it’s up more than 40% versus ‘19. I appreciate that a lot of your peers are in the same sort of inflationary boat there, but do you see any opportunities to reduce that $8 million cost for a new Roadhouse?

Gerald L. Morgan: I think we’re going to be pretty close to it. We have expanded the new store openings, I believe, at the beginning of ‘23. So, we’ve got to that that expense. We feel really good about the size of our building, the expanded coolers, just a more room to be able to execute in our back of the house. And, so it’s probably I would assume right now if I’m looking forward, we’ll probably be very close to that. I don’t see a lot changing.

Jeff Farmer: Okay. Thank you.

Gerald L. Morgan: Thank you.

Operator: Your next question comes from Lauren Silberman with Deutsche Bank. Please go ahead.

Lauren Silberman: Thanks a lot, and congrats on a great quarter.

Gerald L. Morgan: Thanks, Lauren.

Lauren Silberman: Two questions. One, just it looks like off-premise grew at a faster rate than on-premise for the first time in a few years. Was that a function of weather earlier in the quarter? Is there anything else you’re seeing? And, can you talk about how that trended during the quarter?

Gerald L. Morgan: No. I think it’s just about our ability to execute in our dining rooms, and again, getting used to the adjustment of what our to-go volume is, and that’s the average volume. We obviously have stores that are doing much higher than that. So, I think it’s really about our operators settling in and running a full house and being able to execute our off-premise and our to-go processes of how we make that experience for the to-go our food. We’re putting a lot more effort into executing our to-go food at a higher level, and I think it’s paying off for us as well as getting settled into full dining rooms for longer hours of the day. So, a good problem to have.

Michael Bailen: Yes. And Lauren, this is Michael. Just to add on, it was actually, not in the first period during, that colder or more winter weather. We saw the stronger growth in the gas and the sales of the to-go business in the second and third periods of our first quarter. So, strong throughout, but it goes to everything Jerry talked about. Just we’ve made it, the ease of that to-go process. We really made that as easy as possible, and the guest again continues to reward us for that and, is using that to-go on a regular basis.

Lauren Silberman: That’s awesome. And then, just a quick one for modeling purposes. You talked about the quarter to date May and April running [9/3] (ph), which is incredible. Can you just remind us if there’s anything we should be considering in terms of monthly compares for 2Q as we think about the cadence? And then, any comments that you have on regions or regional differences. Thanks so much.

Michael Bailen: Yes, Lauren. It’s Michael again. Nothing really that I would call out, to be careful about over the coming months. And again, typically our, our May period is tends to be busier than our April. And, then June can look fairly similar to our April period. So, nothing I would call out there. And, as far as the trends that we’ve seen across region, certainly in the first quarter, it was pretty strong across the country, maybe the south and southeast, southwest are a little bit stronger from a comp standpoint, but not dramatically different. So, it was really a solid quarter, nationwide and across all restaurants.