Good evening, and Welcome to the Texas Roadhouse Fourth Quarter Earnings Conference Call. Today's call is being recorded. All participants are now in a listen-only mode. After the speaker's remarks, there will be a question-and-answer session. At that time, if you would like to ask a question, please press star, then the number one on your telephone keypad. Should anyone need assistance at any time during the conference, please press star zero and an operator will come on the line to assist you. I would now like to introduce Tonya Robinson, the Chief Financial Officer of Texas Roadhouse. You may begin your conference.
Thank you, Brent, and good evening, everyone. By now, you should have access to our earnings release for the fourth quarter ended December 28, 2021. 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, including factors related to the COVID-19 pandemic. 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. Following our remarks, we will open the call for questions. Now I'd like to turn the call over to Jerry.
Thanks, Tonya, and good evening. We are pleased to finish 2021 with strong revenue and earnings growth versus both the prior year and 2019. Our operators continued to do a great job building sales, providing a legendary experience to our guests, and holding on to margin dollars in the face of high commodity costs. We ended the year with comp sales growth of 18.3% compared to 2019, and that positive momentum has continued into the new year with comp sales up 20.6% for the first seven weeks of this year compared to 2021. We're excited about 2022 and the opportunities ahead of us, including another year of top-line growth driven by our New Store Openings, Franchise Acquisitions, and Sales Growth at our existing restaurants.
We will continue to deal with many of the same issues that we faced last year, including commodity inflation, staffing challenges, and supply shortages. However, in my experience as an Operator, each year in the restaurant industry comes with its own set of challenges and opportunities. As usual, we will focus on what we can control and make the best decisions for the long-term benefit of our restaurants and our brands. We will stick to the fundamentals at Texas Roadhouse. We will continue to build operational excellence and name recognition at Bubba's 33, and we will refine our growth plan for Jaggers. We will continue to focus on our Roadies by ensuring that we are Hiring, Training, and treating them right.
And we will continue to embrace technology and use it to enhance the guest experience while still emphasizing the importance of face-to-face interaction between our restaurant staff and our guests. We are finalizing plans for a mid-April menu price increase of approximately 3%. At this time, we have not seen a negative reaction from the price increases that we took in May and November of 2021. All indications are that our guests continue to view Texas Roadhouse as a great value because of the prices that we charge and the quality of food and service that we provide. However, we will never take our guests for granted and know that we must earn their business each and every day. On the development front, during the fourth quarter, despite the equipment supply challenges, we were able to open all 11 restaurants that were scheduled to open.
These openings included nine Texas Roadhouses, one Bubba's 33, and one Jaggers. We remain very pleased with how our new restaurants are performing. To put that into perspective, for the first seven weeks of 2022, the 10 Texas Roadhouse and Bubba's 33 restaurants that opened in the fourth quarter averaged over $142,000 in weekly sales. For 2022, we are targeting 25 company-owned restaurants, including as many as four Bubba's 33 openings. We also expect our franchise partners to open as many as five Texas Roadhouses in 2022. The reduction in the number of expected openings in 2022 is due to continued delays in the initial permitting and building approval process. With this step taking longer than normal, we are pushing several second half 2022 openings into 2023.
Going forward, we still believe that building new restaurants and taking care of our existing restaurants are the best uses of cash. At the same time, our strong balance sheet and operating cash flow allows us to also create value for our Shareholders and our employees through dividends, share repurchases, and franchise acquisitions. Finally, I want to thank all of our Roadies, our Restaurant Managers, and everyone at our support center for their tremendous efforts in 2021. I also want to emphasize to each and every one of you that we will remain on offense in 2022. That means keeping our restaurants staffed with the best talent, serving smoking hot entrees and heaping sides and ice cold beverages. As your partner and head coach, I promise you that this is how we will continue our winning ways. Now, Tonya will provide a financial update.
Thanks, Jerry. As I begin, please note that most of the comparisons in my prepared remarks are versus 2019 in order to provide a clear understanding of our underlying performance. Please refer to our Earnings Release for a more detailed discussion of results versus 2020. Results versus 2019, unless otherwise noted, are unadjusted and include the negative impact of lapping an extra week in December of that year. For the fourth quarter of 2021, we reported diluted earnings per share of $0.76, up 24.1%, driven by strong revenue and restaurant level profit growth along with a lower income tax rate. Revenue was up $170.3 million, driven by comparable restaurant sales growth of 21.2%, including 8.1% traffic growth and an average check growth of 13.1%.
Check growth includes positive mix of 5.3% as guests have moved to higher priced entrees and increased their frequency of purchasing appetizers and other add-on items. Traffic growth continues to be driven by strong to-go sales while guest counts in the dining room were down slightly. For the fourth quarter, our restaurants averaged approximately $17,500 per week in to-go sales, which represented 14.4% of total sales. Average weekly sales were relatively consistent throughout the quarter at nearly $122,000 compared to $101,000 in Q4 2019. By month, comparable sales grew 23.6%, 24.7%, and 16.6% for our October, November, and December periods, respectively.
We estimate that sales growth for December and the fourth quarter were negatively impacted by 7.1% and 2.8% respectively due to Christmas shifting from a Wednesday in 2019 to a Saturday in 2021. Jerry mentioned, our sales momentum continued into the first seven weeks of 2022, with comparable sales up 20.6% as compared to the same period in 2021. During these seven weeks, average weekly sales were over $127,000, with to-go sales of just over $20,000 per store, or 15.9% of total sales. For the fourth quarter, restaurant margin as a percentage of total sales was 15.8%, down 124 basis points as compared to the fourth quarter of 2019.
We also focused on restaurant margin dollars per store week, which were up 11.9% to over $19,300 as compared to Q4 2019. Food and beverage costs as a percentage of total sales were 35% for the fourth quarter. This was 262 basis points higher than 2019, driven by 17.6% commodity inflation compared to the fourth quarter of 2020, which was in line with our forecast for high-teens inflation. Our beef outlook for the first half of 2022 has improved slightly, but we still expect overall commodity costs to remain elevated. With approximately 50% of our commodity basket locked for the first half of 2022, we now expect approximately 17% inflation over that time period.
For the back half of 2022, we have only a small portion of our basket locked, which makes it challenging to provide meaningful inflation guidance for this time period. However, based on our internal projections, which we continuously review and update, we expect inflation in the back half of the year will moderate, mostly due to the beef and other prices that we will be lapping. Overall, this would result in 12%-14% inflation for full year 2022. Keep in mind that even if inflation moderates in the back half of the year, the underlying dollar cost for beef and other high-use items will likely still be higher both year-over-year and sequentially.
Labor as a percentage of total sales improved 42 basis points to 32.6% as compared to Q4 2019, even as labor dollars per store week increased 19.2%. This increase in labor dollars per store week was driven by wage and other labor inflation of 15.4% and growth in hours of 3.6%. The remaining increase of 0.2% was primarily due to a $0.8 million adjustment to our quarterly reserve for workers' comp. For 2022, we are forecasting wage and other labor inflation of approximately 7%, including the impact of enhanced benefits that we are offering to our hourly Roadies. This is an increase from our previous expectation for wage and other labor inflation driven by wage trends as our managers continue to invest in their people.
One thing to note here, we expect inflation will be above this level in the first quarter as wage rates did not begin to significantly increase until the second quarter of 2021. Other operating costs were 14.7% of sales, which was 84 basis points lower compared to Q4 2019. Approximately 10 basis points of the decrease relates to the benefit of a $0.8 million adjustment to our quarterly reserve for general liability insurance. Most of the remaining benefit comes from sales leverage. Moving below restaurant margin, G&A came in at 4.8% of revenue, a $4.5 million increase versus 2019. Our effective tax rate for the quarter was 13.5%.
Our tax rate continues to see a higher than normal benefit from FICA tip credits driven by the increase in our sales and a higher benefit related to our share-based compensation expense. For 2022, we expect an income tax rate of approximately 15%, assuming no changes to the federal tax code are enacted. With regards to cash flow, we ended the fourth quarter with $336 million of cash, which is down $101 million from the end of the third quarter. Cash flow from operations was $120 million and was more than offset by $62 million of capital expenditures, $28 million of dividend payments, $37 million of share repurchases, and $90 million of debt repayment.
We expect full year 2022 capital expenditures will be approximately $230 million, with the $30 million year-over-year increase primarily driven by the planned relocation of 6 Texas Roadhouse restaurants in 2022. I will also mention on the first day of fiscal 2022, we spent $27 million on the acquisition of seven domestic franchise restaurants. These restaurants are included in our expectation of 6.5% store week growth. Lastly, as announced today in our earnings release, our Board of Directors has authorized a 15% increase in our quarterly dividend payment, increasing it to $0.46 per share from $0.40 per share in 2021.
Like Jerry, I want to thank everyone for their commitment to Texas Roadhouse and for their hard work, which has helped us achieve so much in 2021 and sets us up for a legendary 2022. Operator, please open the line for questions.
At this time, I would like to remind everyone, in order to ask a question, press star followed by the number one on your telephone keypad. Your first question comes from the line of Brian Bittner with Oppenheimer. Your line is open.
Thank you. Thanks for the question. Tonya, a question on your same-store sales trends and just, you know, how to think about the underlying trend, just given the choppiness in comparisons. You obviously gave us average weekly sales that are trending, I think you said a little above $127,000, but I'm assuming maybe that includes a relatively depressed January. Is there any way to think about AWS more recently relative to that 127, just so we can understand how the underlying business is performing now that the Omicron headwinds seem to have subsided for the industry? And I have a follow-up.
Sure, Brian. Yeah, when you think about the first seven weeks and that 127, there is a bit of volatility throughout. Really, you know, you have a couple of really big sales days with New Year's and Valentine's Day is really big for us and was really big for us this year. You know, those high sales on those bigger sales days kinda offset a bit of the weather that you would think of as you think about that 127, 'cause there was some weather negativity in those numbers. We were closed some days, definitely during those first seven weeks.
You know, it's hard to really peel it apart and give you specifics on what that means to that 127, but it isn't hard, you know. It maybe is, you know, slightly down a little bit, but that 127, I think, is a pretty good number to think about, you know, as we continue to head throughout the quarter. You're absolutely right, we are gonna be lapping some pretty tough comparisons starting in March. March of 2021 was when we started seeing our average weekly sales climb above 120. That's when the comparison will get a little bit tougher.
Okay. Just a follow-up on the COGS inflation guidance. It implies that the second half is up 7%-11%, you know, despite rolling over the double-digit inflation from the second half of 2021. Is there some recent dynamics that you can talk to that's impacting that second half of the year outlook? Can you also help us understand what the pricing factor for the model will be once you do take this mid-April price increase of, I think you said 3%, so we can think about how that ultimately flows through against the inflation?
Yeah, sure. Yeah, probably the bigger issue on the commodity inflation in the back half of the year is just that we don't have a lot of costs locked up, particularly on beef. We're a little more locked up on chicken in the back half of the year, not on pork. So that makes it really tough to kind of just determine where those costs might land. We're looking at historical trends a little bit. You know, we're looking at guidance on what cattle supply could be, what slaughter rates are, just all of those things are coming into play. It is really tough to make that call on what we think that number could be.
We felt like it was really important to try to give some guidance and some transparency as to what it could be. So that's where we landed in that spot. We're gonna continue to learn a lot more about the back half of the year. And hopefully, as we get closer, we see maybe even a little more softness that would bring those numbers down a little bit more, but that's our best estimate at this time for that. On the pricing side of things, with that 3% at the beginning of April, we'll have about 5.9%, I believe, close to 6% in Q1. And then the 1.75% that we had last year rolls off, so you're at 7.2% for Q2.
That's the 3% and then the 4.2 that we took in November. That stays consistent in Q3. If there's no additional pricing in Q4, you'd be right around 4%, with the roll-off of the 4.2, and then the 3%. That's what we think the pricing cadence will look like for the year.
Thank you so much.
Yep.
Your next question is from the line of David Tarantino with Baird. Your line is open.
Hi. Good afternoon. Tonya, I have a question on all the pieces and how they fit together, to frame up the margin outlook. I guess w ith the current level of pricing that you're planning, and all of the cost inflation factors you mentioned, I guess where do you think restaurant margin could shake out for the year?
Yeah, that's a tough one. I mean, I don't think that, you know, it's gonna be tough to get into that 17%-18% range this year, given that level of commodity inflation as it stands today. So, you know, we're gonna continue to keep an eye on that, but it is tough. That's probably what makes it tough, you know, the most tough. I think we can get some leverage on other operating, and I think, you know, you can see labor be, you know, maybe a bit benign, bit neutral on a full year basis, perhaps. Depending on how hours, we're assuming hours continue to grow a bit, and things like that. But with that 7% wage and other inflation in there, that's kinda where we land.
A lot of it's gonna depend, David, on traffic and where traffic lands after March. You know, we know we're getting this big pop on comps here for the first eight weeks of the year, and that's certainly gonna set us up well to have a strong revenue growth for the whole year. You know, a lot will depend kinda on where the margin lands is how much traffic we get and how that commodity inflation does shake out in the back half of the year.
Got it. I guess just as a quick follow-up, if you kinda extrapolate the run rate you're seeing in the business recently to the rest of the year, is it possible that you'd be able to hold margin flat for the year? Or are you thinking it's gonna be down given all the factors at play?
I think, you know, you could build a scenario for it maybe to be flat. Again, I think it's gonna depend on traffic, and where that lands, and you know, what we're able to do there. But, you know, you could build a scenario. I think it'll be. You know, we feel good about sales for the full year. We feel like we're holding on to the to-go sales levels, and that's been really promising, you know, to see that continue to hold up. A lot's gonna come down to how we're growing traffic in the dining room.
We know the demand is there on sales and getting the staffing back to where we don't see any impact to, you know, having to have sections closed and things like that would definitely be a big benefit to the year. A lot depends kinda on how that shapes up. We feel overall very confident about revenue growth and being able to get it down to the restaurant margin line.
Great. Last quick one on this. On the mix, you've been seeing quite a bit of mix benefit lately. When does that start to normalize, or do you think?
I think it starts coming down a bit off of these after these two first months of the year. It'll start moderating and I think you know our estimation is probably maybe it gets to flat by mid-year. It's just back kind of back to normal where we would see it slightly positive but you know for the most part neutral in the back half of the year.
Great. Thank you very much.
You're welcome.
Your next question is from the line of Dennis Geiger with UBS. Your line is open.
Great. Thanks for the question. Tonya or Jerry, wanted to ask a little bit more about the longer term restaurant margin algorithm, that 17%-18%. Has anything changed there with respect to how you're thinking about that algorithm? Kind of any thoughts with respect to how quickly you can get there. I guess, Tonya, you said kind of, you know, base case, let's not expect that this year. Just, you know, any kind of thoughts looking ahead to that or if anything has changed there?
Yeah. I think, you know, our target is 17%-18%. I think that's a really good spot for us. It's a very healthy target. You know, when looking at the last two quarters, we definitely have learned how to manage it with the higher labor and commodity inflation. As we continue to hold these sales on the To-Go side or the dining room side, and we have less and less exclusions, as well as new people added to it that will be very important for us to settle. I believe, again, not knowing how supplies or commodity or some of the other inflationary parts will play out the rest of the year, we have held the last two quarters knowing and going into it.
I think we've learned how to manage it, how to properly run it and we will continue to improve upon that. I feel really good about the direction we're going. If prices can hold or even drop a little bit, it will be very good for us. The exclusions are a big part too. That part of our ability to get fully staffed is to have all of our employees available. Even though we're a little short, the exclusion hurt us because we don't know when they get chopped for, you know, seven to 10 days. A lot of that's really positive right now, and we feel good going forward that as the COVID continues to settle, if it does. Remember, last year at this time, we thought that too, and things changed. But, r ight now looks really, really positive going into the rest of the year.
That's great. Appreciate that, Jerry. Just a quick follow-up to that point. As we think about the staffing environment and the operating environment, just, you know, kind of how that impacted sales, even margins kind of in the 4Q, you know, this year so far. How much of an impact that's had on the business? And then, you know, where you are right now, how much more you need from a staffing perspective, if you can kinda quantify that and, you know, what kind of benefit that may be going forward as you're able to do that? Thanks a lot.
Yeah, sure, Dennis. I'll tell you know, it's really hard to quantify the impact from that. You know, we went back and looked at the data for Q4, and it seemed like to us, we maybe had as many as 10%-15% of our shifts were impacted by, you know, areas being closed in the dining room and having that staffing challenge. If you kinda extrapolate that across the quarter, I think it's as much as 2% of same-store sales that, you know, we probably lost due to those challenges across the quarter.
Thanks very much.
Your next question is from the line of Lauren Silberman with Credit Suisse. Your line is open.
Thank you. Just for some commodities, 50% of the food basket locked in for the first half. Can you remind us of how that compares to where you've been historically at this point in the year? Just what's your overall sense of what's driving these elevated levels, given your expectation that you really don't expect to see these costs abate in the back half?
Yeah. You know, it compares pretty similarly actually to 2020 as far as the percentages we had locked. They were pretty similar. You know, coming into the year, you know, pre-COVID, we may have been a little more locked, you know, maybe closer to 60%, or so. You know, still feel good about that 50% in the front half of the year, and it's pretty similar to last year.
You know, as we think about the commodity pressures in the back half of the year, you know, it's a little bit given the uncertainty that's out there, not just with us but across the industry with you know, the suppliers, the packers, and just what things are gonna look like, the demand, how supply is gonna play out, it gets really tough to kinda lock those prices up in the back half of the year at a price that you're willing to accept. We really felt like, you know, we wanna wait and see and continue to watch and see how things play out on both the beef side of things and even a little bit on the pork side of things, just continue to see how that plays out for the rest of the year.
Okay, thanks. Then just a follow-up on the longer-term restaurant margin. AUV is north of 20% above 2019, a lot more inflation in the model. Underlying assumption seems to make commodity costs on the dollar basis probably hold. What do you see as the path to get back to the 17%-18% restaurant margin? How much is in your control versus the underlying macro environment?
Well, I think some of it, you know, obviously the commodity inflation is a little bit out of our control. We kinda have to just wait and see what happens there. Typically, though, those things tend to be cyclical, and I think we'll see those prices turn around at some point. Maybe they don't get back to, you know, levels where they were, but, you know, I think they will come down from where they are at some point in time. I think on the labor side, you know, we're gonna continue investing in wages. At some point, though, that kinda moderates a bit, and you're not continuing to grow those wages. You've kind of reached that point that you can stay at for a little while.
I think that's, you know, something that could potentially, you know, allow a little bit more on the margin side. Just continuing to drive traffic and be efficient on costs. Our operators already, they do a great job at that. It's tougher in this environment and at these high volumes because sometimes they have to make choices that are a little tougher as far as when the food's coming in the back door and how they're getting it on the table and things like that. You know, there may be some opportunity as things kinda, you know, even out and settle down, as Jerry said, that you see a little more efficiency perhaps on those costs which help.
I don't think there's gonna be any silver bullet, Lauren, or anything that's, you know, 'cause that's just not the way our model's built, given how our operators are compensated. They're watching that stuff all the time. I think it's just gonna be a combination of continuing to drive sales, traffic, and, you know, dealing with whatever we're dealing with on the inflation side of things. Oh, one thing I would mention, too, I'm sorry, is just technology.
And I think we continue to utilize technology in a way that, as Jerry mentioned in his prepared comments, it just improves the experience and lets us focus on other things, you know, and lets us be more about giving the guest an even greater experience because some of the things are being done, you know, through technology. I think that's something we'll continue to see perhaps helping us a bit too.
Thank you very much.
You're welcome.
Your next question is from the line of Jeffrey Bernstein with Barclays. Your line is open.
Thanks so much. This is actually Jeff Priester on for Jeffrey Bernstein. Just first on the Bubba's brand, appreciate all the additional color in the press release you're now providing. How should we be thinking about the long-term potential for this brand, both in terms of units as well as annual unit growth? I mean, for the past four or five years, it's kind of been stuck in that four to six units a year. Should we just kind of assume that? Or is there gonna be a ramp up in the coming years?
Yeah, I am feeling really confident that we have learned a lot in this coming year or this last year. You know, we want and expect Bubba's to deliver more than that. Even though our target the last few years has been maybe 4%-7%, I do expect to ramp up to a 7%-10% number, and then go from there. I think we are positioned. We like where we're at on our building cost. We are very confident in our new leader of that concept, and that person reports directly to me.
As we have kinda split these concepts apart, having a director or really a vice president run these concepts and really get focused on that business, I feel like we are gonna continue to make strides a lot faster than maybe previously we had attacked it. I absolutely expect our sales are fantastic. We feel confident about our food. We know the model that we're looking at now financially, so the future, in my opinion, looks very bright for Bubba's 33. We really have. It's exciting. We gotta get through this year and get the groundwork and the foundation laid, but we're ramping up for more expansion there.
Great. Tonya, just on G&A, can you help us with some directional thoughts in terms of what we should expect there, especially considering the quarter-to-quarter seasonality last year with the first half about $10 million lower than the second half?
I think as we look at G&A, you know, we still have very similar philosophy about that. We wanna see those dollars growing less than revenue growth. I like to keep it as a percentage of sales. I'd like to keep it in, you know, in that 4.5% range, maybe even lower, and with these high sales volumes, getting a little more leverage there. I think the cadence of that cost across the quarters will be a little more consistent in 2022.
I tell you though, there is, you know, we'll have our MP conference coming up in Q2, and we didn't have that in Q2 of 2021, so that will pop that number up a little bit more than what you would expect if you're basing it off of last year. You know, other than that, you know, I think it behaves pretty similarly, the cadence of it, and then the growth, you know, should be under revenue growth.
Great. Thanks so much.
Your next question is from the line of Chris O'Cull with Stifel. Your line is open.
Thanks. Good afternoon, guys. I had a couple operations related questions. Jerry, could you provide an update on what learnings you've gotten out of the KDS system test in Minnesota? I know you'd also mentioned testing some new kitchen equipment, I think fryers maybe. Just curious if you had uncovered any interesting opportunities there as well.
Hey, Chris. How you doing, bud? You know, I will tell you, we are learning a lot at the KDS system in Minnesota. Some of the efficiencies, again, most of what we're learning is stuff that we didn't know prior to it, and it's allowing us to really study more of our functionality and our speed from that to execute. So from the KDS standpoint, we are still learning a lot. We are gonna convert an existing store in July to that same deal and see how that goes. So, again, we're gonna continue to. We have a new store that opened, we'll have an existing store converted, and we will continue to learn from it.
Obviously, one of the other things, the tablets continue to grow in popularity for us. Our what we're calling our Roadhouse Pay has really gained some strong momentum and really enhancing that check and change experience. The ability for the guest to pay and to leave at their convenience and not really wait for us is really a big win. You do see other concepts going in that direction too, and it's definitely something we held off on, but we probably shouldn't have. It really is an enhancement to that guest experience, especially when it comes to the end of the what I call the check and change side of it.
That's great. I know you put several marketing initiatives, maybe some product innovation opportunities on hold during the recovery period this past year. Can you give us an update on how you're thinking about those opportunities this year?
You know, I think I'm not quite sure. You know, we're continuing to look at line setups and how to be more efficient. I guess when you say that, I would assume you're thinking of how do we assemble our production food, and then how do we get it out of the window to the guest. We're constantly revamping. We have a display kitchen. We also have what we call a straight line, which really allows our efficiencies to be a little tighter. It's a little tighter, but the motion test, people are being able to get their job done with less movements. I think we're gonna continue to look at that.
I think the big part of settling in, learning how to do a 20% to-go model as well as a full busy dining room is the one thing that we've really had to work on our traffic paths to really make it to where it flows a little bit better. That has been, as we've integrated and picked back up and held our to-go but also filled our dining rooms back up, probably been the biggest initiative we've looked at, is how do we flow better and the traffic for the to-go, and where it goes, whether it goes out a side door or back of the kitchen. Those things we continue to look at.
Our four prototypes that we're currently using, it gives our operators a little bit of flexibility whether that to-go food comes out through the front dining area or whether it goes out through the back of the kitchen, which we've seen some real strong efficiencies. Now, we do have that. If you're talking about our drive-up window, we have several operators that are opting in for that. It is really working where people can place their order, they can sit in our parking lot, and we can text them to almost. It's not a drive-through, but it is a drive-up window. It really is fun. The ability to text our guests and let them know when their food's ready, whether they come pick it up inside at one of our walk-up windows or this drive-up window, it is definitely exciting for our future.
I apologize, Jerry. I was thinking about highlighting early dinner opportunities or bringing people in during shoulder periods with maybe promotions or something like that.
Well, that's our Early Dine. Yeah, I think we're back on that deal. Very exciting. Always been a great big win for us, and we call Early Dine basically from the time we open until, you know, early right before the dinner rush is what we promote. We've got 15 items that are at a better price point. It's our menu item, just a little bit of a discount. We will be promoting that a little stronger maybe than we did in 2021. We feel excited. A Wild West Wednesday, we'll be kicking that back up at a stronger level. It's always been a big win for us on that Wednesday evening.
Yes, those are a couple initiatives that we will be, as soon as we need them, we will fire them up. They're teed up and ready. Boy, our sales are so strong right now, I don't know how much we're gonna push it yet.
Great. Thank you, guys.
Thank you.
Thanks, Chris.
Your next question is from the line of John Glass with Morgan Stanley. Your line is open.
Thanks very much. First, could you just confirm with your comment, is the dine-in business back to 2019 levels? Or I think you said about. Just where is it relative to 2019 levels, please?
It is slightly below 19 levels, just a little bit in Q4. It was pretty flat in the first month of the quarter, but then as Omicron surged, things like that, you know, we obviously saw a bit of an uptick on the to-go side. Dining room came back down a little bit, and that continued in January. We've seen it kinda get close and then kinda back off a little bit just due to some of those issues and expect that, you know, with staffing and things like that getting back to normal, we're gonna be able to continue to push that dining room traffic a little harder this year.
Just following up on staffing. What do you assume labor hours grow in 2022? I know it's related to traffic, but I think you talked about a 7%, and I think that was just the wage increase, not including the hours. Is that right?
Yeah. The 7% is just wage and other inflation. From an hours perspective, we really don't give that number because it is, as you said, tied to kind of traffic expectation. You know, I think we'll continue to see hours, you know, maybe move up a little bit. You know, from a staff, that staffing perspective, you know, we've seen it grow, those hours grow at a pretty good clip. It'll grow a little bit more, and it'll continue to grow in 2022, and a lot will depend on what traffic comes in at.
I guess just ask another way. You're fully excluding exclusions, et cetera. You're fully staffed now relative to 2019. Is that fair or not?
I think that's fair. I mean, we're definitely getting there. It depends, you know, week to week, but I think you've got a lot of stores across the country that are fully staffed, not having any issues there. You've got some others that are still struggling with it a little bit. You know, I think we looked at stores in Q4 and to understand a little bit about is it demand or, you know, what might be the reason for the dining room sales to remain kind of a little bit moderated. You see wait times in those restaurants, you see folks waiting for tables, so it definitely feels more of a staffing issue.
That was in Q4 again, John, when we were dealing with a bit of that surge from Omicron and things like that, and the exclusions were playing a bit more into it. You talk to some operators and many operators will tell you they're feeling much better about the staffing. We just spoke with all of them as we were doing our pricing calls last week. A lot of them say they're definitely feeling a bit of relief from a staffing perspective, and others are saying, "Yeah, we're still struggling with it a bit," so they still have some work to do there.
Got it. Thank you.
Your next question is from Brian Mullan with Deutsche Bank. Your line is open.
Hey, thank you. Just a question on the balance sheet. You know, the net cash is still a bit elevated to history, even with the share repurchases you've done in the last two quarters. Appears to be a bit of a unique situation following you know, the reductions to CapEx and dividends took place during COVID. Is there anything that would prohibit you or make you more cautious around perhaps stepping up the pace or the magnitude of repurchases, even if it was just temporary in nature rather than a permanent thing?
No, I don't think there's anything that would make me hesitant to do it. I think, you know, we really wanna, you know, think about franchise acquisition opportunities first. We were having conversations with a couple different franchise partners about that opportunity. We were able to do, you know, get one of those deals done right here at the beginning of the year. You know, that along with growing restaurants, and just, you know, that CapEx spend, I think is really where our priority is. You know, we're guiding to 25 restaurants this year, as Jerry said, and it's, you know, we were hoping to get more than that, and we still may have a chance. We're certainly. I know our real estate team's gonna be really working hard to get maybe a few more openings in.
No, Brian, I wouldn't be opposed to doing more on the share repurchase side. Right now, we're just focused on dilution. You know, probably we'll be revisiting that in the back half of the year as far as anything else that we wanna do there.
Okay, thanks. Just follow up, just a question on Jaggers. I think, you know, late last year, you entered into your first area development agreement. You know, are you currently looking for more of those agreements? You know, maybe just how much attention or how much from a resource perspective is being devoted to this internally. You know, just trying to get a sense of where it sits on the priority list and how you're thinking about that longer term opportunity.
Yeah. We were very excited. We actually signed two franchise partners last year, and we are in serious negotiations with our third, in early stages of our fourth. There's no doubt that we see the excitement and enthusiasm around the brand. We feel very confident with the structure that we have built out. You know, we're excited about the partners we have, not only on the company side, but I think it'll be a great team effort of us learning how to continue to grow on the franchise model, but yet build out our company side and so, you know, from that aspect, there is some excitement and enthusiasm around it.
We do expect to continue to grow that brand and learn together with our franchise partners and go toe-to-toe with them for a little bit. We'll see who leaves who in the dust.
Thank you.
Thanks.
Your next question is from Brett Levy with MKM Partners. Your line is open.
Great. Thanks. I guess if we try to delve a little deeper on both the margin and the cohorts of your unit classes, maybe this is another way of trying to ask it. When you think about what you've seen over the last few years, are you seeing anything different on your restaurant level margins in the classes 18, 19, 20, anything across different regions? How are you thinking about your total addressable market at this point, total potential number of units domestically, and where we should think about those?
Sure, Brett. You know, there really isn't anything by class year that I would call out because a lot of it from a margin perspective, just a lot depends on what state they're in and what that wage rate looks like. You know, if you've got stores that are more in those, you know, where they have set state mandated increases or no tipped wage, they're definitely gonna have a higher labor, cost and a higher labor percentage of sales. They have some additional pricing, you know, to help them, offset some of that. We're still always pretty careful on the pricing front, even in those states. You know, overall, there's nothing I would really call out geographically other than that. It's a lot just depends on those labor states. Commodities are very consistent across the country.
Labor is probably the biggest difference when you think about the margin side. Sales doesn't really have a lot of difference at all geographically. I mean, we have a lot of strength across the country, for sure. You continue to see really strong sales growth across the country, across the regions, the day parts, and that's been really good to see.
Then for the growth, I would just say that, again, we had some very good success last year in maybe some smaller communities that we tested and tried and they really impressed us. That to me allows me to look a little broader in the real estate side. Our team is not only looking at our typical, you know, communities and metroplexes kind of thing, but there's also these smaller rural communities that we might have thought we couldn't go to, just because of our footprint. It has shown us this last year that there is some enthusiasm in some smaller communities or maybe a more rural area. That is encouraging for me to be able to continue to expand that, you know, that future growth pipeline.
Your next question is from the line of Andrew Strelzik with BMO. Your line is open.
Hey, good afternoon. Thank you. Just one clarification and then a question. The clarification in terms of the delay in unit openings from 2022, should we think about that as pushing out kind of the entire development pipeline into future years? Or is there eventually a kind of a bumper year when things normalize, and those delays go away? And then my question is around locking in the beef prices.
You know, I understand with the back half of the year and all the uncertainty that some of the packers or distributors are asking for big premiums. But I guess I'm curious, you know, is that also the case for the first half of the year where maybe the visibility would be a little bit better? I mean, obviously, we've seen prices come in a bit, inflation come in a bit. Does that create an opportunity in the nearer term? Or what would need to happen for that kinda to converge from a locking perspective and that premium? Thanks.
I'll take the first one. You know, I believe some of it is COVID related for the processing of permits and some of that. That's probably been the biggest delay aspect of just the length of time it takes to get through the loan process or the working with the real estate team and all of that. They've had some challenges. I believe that will correct itself very quickly as more and more people get back. It is working faster. It just slowed us down in the fourth quarter through some of that which delayed a couple of the openings or the permitting side of the business.
I believe, from what I'm told and involved in, we will be back on track very quickly, and we're working aggressively to hit that number in 2023. And then, w e'll have that timeline built out with that expected delay in there and be in much better shape from that.
Sure, Andrew. On the commodity side, you know, it's probably a little unfair on the amount that we're locked in the front half of the year, 'cause a lot of times when we're saying what's locked, it's things that are fully fixed on price. We do quite a bit of buying, you know, on formula pricing and things like that, where we know a little bit more about the pricing that we may get on some of the loads as we look a little more in the short term. We don't include that in our kind of what we're saying is locked on pricing.
I think, you know, from our purchasing team's perspective, they feel very good about, you know, what they're doing right now in the short term and what they're able to negotiate and things like that. If they found an opportunity where they felt like they could lock some of that up, some of those loads up at, you know, a fixed price, no doubt they would take it and get it done. They're really looking at so many different things that are involved.
This is a lot of pieces to the puzzle. If they feel like they can, you know, actually get better benefit by holding off a little bit, they will. That's kind of the way we look at it. Again, hopefully we continue to just lock up as we go throughout the year. It's just gonna be a little more short-term, like, you know, 90 days versus being able to do it, you know, for six to nine months.
Great. Thank you very much.
Your next question is from John Ivankoe with JPMorgan. Your line is open.
Hi. Thank you. I was hoping to get some education, you know, as what you thought was going on with the various cuts within steak. I mean, sirloin, tenderloin, ribeye, you know, strip, you know, all seem to be, you know, have different trajectories at different times. I mean, I guess kind of explain what you see in the market if you think, you know, it's normal or you know, there's an uncommon amount of noise. Do you actually have any flexibility on the menu in terms of what you feature at what size, at what price that maybe gives a great value to the customer and also protects your own penny profit?
Yep. Sure, Jon. Yeah, I agree with you. I think there is a bit more noise across the different cuts than what we typically would expect to see. I'm hearing a lot more about, well, ribeye went this way and top butts went this way. I think some of it is just driven by retail and what's going on in grocery stores and some of those big box retailers and what they're doing with some of these cuts, and maybe have some part of it. You know, a lot of times, you know, it could be something from an export, you know, perspective. I haven't heard as much on that front. It definitely seems to be more retail driven right now is the only explanation I could give, but I agree with you, it does seem a little more noisy than you would normally expect on the cut side.
Yeah, I would just say that I don't know that we would do anything different on the menu necessarily. I think we have a great offering with four sizes on our sirloin. Our rib eye has become extremely popular, I would say, with our bone-in rib eye, that the bigger guy really the popularity on that is extreme. We did at one time take our New York strip from a 16 oz cut to an 8 oz cut, and that 8 oz cut became. It is still to this day very, very popular. We continue to look at that.
Balancing how many big steaks we have on the menu to how many really value offerings are. Our 6 oz sirloin and our 8 oz sirloin and that 8 oz strip, those are extremely popular steaks for us. I don't know that we would go smaller, but it might be something to look at.
Okay. Thank you. Allow me to pivot to the next question on, in terms of acquiring franchisees. You have seven units for $27 million, I mean, at least optically. I mean, that doesn't look like a high number, especially, you know, for an established restaurant. You know, is there anything kind of different or unusual about that market that would allow you to be able to buy those stores, you know, at that price? You know, remind me at least, you know, years ago, I remember, you know, there was somewhat of a call option feature that existed, you know, with your franchisees. Is that something that you could or would want to do? Does the franchisee, you know, perhaps want to sell to where we could see an acceleration of franchise to company ownership on the Texas Roadhouse side?
Yeah, John, you're right. We do have a roll-up formula that's included in the franchise agreement. It's a stock deal. We haven't done one of those in quite some time because it just really isn't, you know, great for either side from a tax perspective and holding periods and different things like that. The deals we've done lately have just been, you know, much better deals as a cash deal. And that's worked out really well for us. The seven stores, it's a great market. It's a longtime franchise partner that has been with us and just a great portfolio of restaurants.
So, we felt like $27 million, you know, without giving multiples or anything like that, $27 million was a really, you know, was a good solid number for the EBITDA that we were buying and stores that have a lot of sales growth and it really works well for us. I think when you're thinking about other. You know, it's been a tough couple years, there's no doubt about it, but sales have been strong. Our franchise partners have been with us quite some time. It's tough to say, yeah, this environment makes them more willing maybe to sell because they're pretty tough and they just like being part of the Texas Roadhouse family, and they like the sales and the returns that they're getting.
We're still able to have conversations with them and just talk about timeline and what that means. It might not be something in the short term, it might be something that we're just setting up more, you know, in the next several years. They're great franchise partners that I think we'll continue to see, you know, get some of those deals done. It really does benefit both of us.
Thank you.
Your next question is from Peter Saleh with BTIG. Your line is open.
Great. Thanks for taking the question. Tonya, I want to come back to the conversation around development. You guys reduced the target for this year by few units or maybe as many as 5, yet the CapEx guidance remained the same. Can you just talk about are you seeing just more inflation in build out costs, or are these units just gonna be built and really not open in time to be completed in the number for this year? Just any thoughts around that?
Yeah, sure. You know, you're absolutely right. A lot of them, the construction will still start at some point, probably during 2022. The hope would be that we could get many of those restaurants open early in 2023. Much just depends. They were stores that were already opening later in the year, so they may not have had, you know, quite everything in from a CapEx perspective. There is a bit of that play just on still spending that money from a CapEx perspective, even though the unit may not open in 2022. Then you have the relocations in there. We talked about six of those this year for Texas Roadhouse, so that's a piece of that too. We're also talking about just existing restaurants.
You know, as we talk about these higher levels of to-go sales, you know, and folks getting more comfortable coming back into the dining room, we're just talking about different projects that we may need to have to, you know, do corral conversions, you know, to get kind of some of that corral back in the waiting area and also still have the ability to do the to-go out the window, as Jerry mentioned. So we have some of those projects in place. We're gonna be doing some bump outs this year, getting that program kind of back on track and some other things like that. So that's a little bit of what is driving that number up a little bit more.
Okay. Just lastly, you mentioned some of the operators are claiming they're seeing some relief on staffing. What are they attributing some of the improvement in staffing levels to when you've recently spoken with them?
Well, I think there's more applicant flow, first of all, which is great. We have really done some good initiatives in the third and fourth quarter to continue to attract more and more people. Obviously, the exclusions are really reducing, which is great. That allows our full staffing, where we're at. I think the biggest thing is that they are seeing more applicant flow. They're excited about more people wanting to come back to work, more picking up more hours and from that aspect. I think that's where the positive role is coming from, is that the folks that were part-time are probably working a few more hours, and the ones that were working a lot of hours are probably taking a little bit of a break because we're starting to build that bench.
We're getting close. Like I said on the last call, I feel really good where we're at. I wanna feel really great. I like to be 110% staffed. That gives us a lot of options and gives us ability to have fresh legs and strong people working every shift. Our weekends are extremely busy. We don't like doubles. We really like folks focusing on one shift, doing it extremely well and knowing that they're gonna have a little bit of a break because, you know, 10 hours in a building serving the volume that we're doing, that is definitely hard work. They're compensated really well. They make a lot of money, but they definitely earn it.
Thank you very much.
Thanks, Peter.
Your next question is from the line of David Palmer with Evercore ISI. Your line is open.
Thanks. Good evening, guys. I'm trying to think about your capacity at the restaurant level, and in light of the fact that the industry's down so much in traffic, particularly on premise, but your dining room traffic is only slightly below 2019 levels. Of course, those levels were industry leading in terms of traffic, productivity in the dining room. I wanna be greedy about your traffic upside from here, but you've done so well during COVID, and you were at already such a high level of productivity. I wonder how you're thinking about the real capacity inside the restaurant, particularly if the kitchen has added, you know, hopefully some sticky to-go business from here. Do you think that the average Texas Roadhouse could handle 10%-15% more visits, especially if to-go mix hold?
Yeah, I do. I think America wants great food and made from scratch. I think the flavor of our food, the effort that we put into making it from scratch, the hustle that our people have to serve, and the desire to do it right. I think we're fast, we're fun, we're friendly, and we will continue to do that. You know, there's definitely our peak hours. We are jamming. We are busy, and we have long waits, but so there is still opportunity prior to that in our early segment and maybe even our last segment and maybe even some of our Saturday lunch.
So, t o me, yes, there is still room to grow, and we've got to continue to help our guests navigate to an area or a timeline where maybe they, if they don't wanna wait as long. I just read an email from a guest that was able to go online, and they were told, on Valentine's Day, that they would be able to eat dinner in two and a half hours from that time, and they had a great experience.
That technology piece that we talk about to tell someone that you can come in on a Valentine's Day, this is the time you need to show up. We hit their quote, we hit their wait, we delivered on the food and service, and they took the initiative to write me a letter telling me how spectacular it was. So, y es, I think we can still deliver on our sales growth.
Thanks for that, Jerry. Just wanted to check on your food inflation forecast. I think they were implying something like high single digits-ish in the second half of the year. Does that roughly assume that key inputs are gonna be roughly near today's levels and that, you know, if you're running short on something, that's the type of level you're gonna be doing to get to that high single digits in the second half?
I don't know about that, David. I, you know, I'll tell you, it seems like, you know, even though inflation may moderate in the back half of the year, we think the dollars are still, you know, potentially gonna be going up a bit. And that seems to be happening. I don't know that I would say, you know, and I don't know if that's what you're implying, that maybe the dollar costs on beef might be coming down relatively or.
Well, no, I mean, really just, you know, if the price is one way to forecast would be just to say that on the stuff particularly that's not locked in, you're gonna assume it remains at these high levels, but probably not give yourself any relief. You could also go with some sort of futures curve type analysis. Right now is such a weird time where there's a lot of supply chain constraints in that industry. I wanna understand if those come off, if that's gonna be a benefit, you know, versus the way you forecasted your inputs.
No, it would be a benefit if some of that eased. I mean, we forecast each line separately. We're looking at, you know, what we think the demand's gonna be, what we're gonna need to source. Then we take that and based on aging and all of those things that come into play, kind of build it in to when that's gonna hit the P&L. That's the way we're looking at it. We're looking at transportation costs and delivery and all of those things are part of it. Yeah, if there's some relief on that, we'll, it'll come through in the model. Right now there's not a lot of motivation to forecast that coming in better or being much lower, you know, just based on what we're seeing right now. But, h opefully, it's, you know, that'd be great if it did.
Understood. Thank you.
Sure.
Your next question is from the line of Jared Garber with Goldman Sachs. Your line is open.
Hi. Thanks for taking the question. I wanted us to go back to the off-premise business that admittedly remains very strong and still generating those high average weekly sales levels. Can you talk about what you're seeing maybe on a customer basis? Is the customer using that channel differently? Are they the same customers as your sort of dine-in customers, if you have ability to track that? Are you seeing higher off-premise business maybe during the week that might not necessarily have gone out to dinner to the restaurants previously? Just any incremental color on maybe what you think is driving and sustaining that high level of volume out the door. Thanks.
Yep, sure. As far as having any data around the guests, you know, we're starting to collect more of that data and learn a little bit more from it. It's still kinda too early to say, but it feels like you've got a couple things going on. You have guests that are utilizing us for both dine-in and to-go, during, you know, throughout the week or the month or the quarter, and maybe they're just increasing the frequency. We've got new guests coming in that maybe to-go was the first time they'd ever tried us. We certainly heard about that from operators and folks, you know, last year. I think you got a lot of different things going on there from that perspective. I think, you know, overall, the online seems to.
The to-go seems to be sticky, and I think a lot of it is because of the online opportunity that we have. We're seeing, you know, I think it's above 65% of the to-go is through online transactions, and that has just been really great to see. I think you're seeing a guest that likes the convenience of it, and they like the ability to get online, get it done, stop on their way home to get it.
To your point, you do see a little more of it in the earlier day part, earlier part of the week. You see it on the weekends too, because a lot of times folks know we're so busy on the weekends, they'll just do to-go versus waiting to get into the dining room. You do kinda see it all over. Monday, Tuesday, Wednesday, you do see quite a bit, I think, as folks are heading home from work and things like that. They're stopping to get it.
I think it's more about our ability to execute. We improved so much over the last couple of years on the execution, the convenience, and on whether it be the walk-up windows or curbside or the things that we're doing just to allow our guests to have a better experience on the to-go side. I believe from an operations standpoint, we've made it more convenient. We the communication piece that we use, the texting with the guests to let them know and then obviously the delivery of the product and when they get home it's right. A couple of factors. I think technology has been a driver. Executionally, we've done a really good job of focusing on it and making it a better experience for the guest.
Good. Thanks for that color.
Thank you.
Your next question comes from the line of Brian Vaccaro with Raymond James. Your line is open.
Thanks and good evening. Sorry, I had a phone glitch early in the call, so I just wanted to circle back on the quarter to date. You mentioned the $127,000, I think, for the seven weeks. Tonya, could you help ballpark what that looked like in January versus more recent weeks? Also remind us sort of the normal seasonality you see in Q1. Just trying to find my notes on that, but I think March is typically maybe 10%, if not 15% above January. Could you just help sort that out? I'm just trying to set a reasonable expectation for the first quarter.
Yeah, sure. You're right. March and April are typically higher average weekly sales months for us. Then, you know, May and June isn't too shabby because you get into Mother's Day, Father's Day. Mother's Day particularly is, you know, a big day in May for us. Over the course without getting into every week, you know, week one was a bit higher than that average just because you did have New Year's Day in there. Things then tapered off a bit in weeks two, three, four as you were feeling some of that Omicron surge continuing to play out. You know, we were probably a little more impacted on the staffing side with exclusions and things like that. Things began picking up in weeks five, six, seven.
Seven, you know, again, Valentine's Day is in there, and that adds a tremendous amount to our average weekly sales. I think on an overall basis for that 7 weeks, you're talking about another $2,000 on top of average weekly sales for Valentine's Day. That one is a big one. But that's a little bit about the cadence. Hopefully, that gives you a little more color kind of on how things played out. Then, obviously too, Brian, I would be remiss to not say, you know, weather obviously had a negative impact throughout those weeks too, and caused us to be down a little bit, just to see us down below that $127 average a couple weeks with weather.
All right. That's helpful. Thank you, Tonya. Also wanted to ask on the other OpEx line if I could. It seems like the inflationary pressure is starting to ease within that line. I think you saw close to 100 basis points of leverage compared back to pre-COVID levels. Could you just comment on the underlying inflation and other moving pieces you're seeing within that line? I guess with additional pricing, is it reasonable to assume you'll continue to see some pretty solid leverage moving through 2022?
Yeah. I think we could, just given, you know, as you continue to see, dining room becoming a bigger piece of the pie on the sales, that kind of impacts those to-go supplies and the impact they have as a percentage of sales in that other operating. You know, in 2020 that was ticking up quite a bit as we had higher levels of to-go, more to-go supplies, and to-go was a bigger piece of the puzzle. That could provide a little bit more leverage on that. From an inflationary standpoint, we're not, you know, we don't have a whole lot built in above normal. You know, normally we're thinking in that 2% range from an inflation perspective. That 3% pricing definitely does help.
Now you have things in that line like utilities, stuff like that might go, you know, play out a little differently. We'll see. Right now that wouldn't be the expectation. Bonuses are a big part of that line also, Managing Partner, Market Partner bonuses. As the profitability goes, you know, that line ebbs and flows depending. You could see some leverage from that also. I think you do have some opportunity to get a bit of leverage on that line in 2022.
All right. Thanks very much. I'll pass it along.
Thanks, Brian.
Your next question comes from the line of James Rutherford with Stephens Inc. Your line is open.
Hey, good afternoon, and thanks for taking the questions. Jerry, I was curious on, kind of the capacity related question. Have you seen any change to average table turns kind of today versus where you were a couple of years ago in the restaurant? Are there things you can do or things you're working on to improve those table turns without degrading, kind of, the service level of your business or how kind of guests perceive your restaurant? Yeah. I would say from, the tablets definitely help us a little bit faster. We've been able to see some minutes there. Roadhouse Pay or the pay at the table has definitely proven to be able to generate a few extra minutes on the table turn.
The KDS is still a little early to see if that is helping us as a new store. Once they really get settled, we'll be able to kind of identify how they've improved that. I think in general, overall, as every year a store is open, it's efficiencies to be able to get the order in, to get the food to the table, always is an improvement, or we're trying to improve upon that. I haven't seen a real significant swing one way or the other. We're pretty much locked into that somewhere between, I will just say 55-minute experience. We like to have the guests there for an hour and really make it a memorable deal. We've been able to hit that number pretty consistently overall.
Once they get through the wait and they get sat, that experience is pretty consistent, and that's what we wanna target and focus on. There are a couple of things that we're excited about that could help shave a couple of minutes off of that and lets the guests stay longer. If they're in a real hurry, we wanna be able to accommodate that in-and-out experience, as you might call it.
Okay. Thanks for that, Jerry. Tonya, I was going to ask, in the margin this quarter, talked about a lot, but were there any one-time costs related to COVID, whether it was exclusions or higher overtime or anything like that that we should just be aware of that might fall off here shortly? Thank you very much.
Yeah, sure. You're talking, James, about costs maybe in Q1 of 2021 that w-
No, in the fourth-
Will be lapping or?
No, in the fourth quarter.
I n-
Were there any kind of meaningful one-time things related to the surging cases or overtime or anything like that?
No, nothing significant that we would call out.
Okay, perfect. Thanks so much.
Yep. Thank you.
There are no further questions at this time. I will now turn the call back over to Tonya Robinson.
Thanks, Brent, and thanks everybody for joining us tonight. It was great to hear from you. If you have any other questions, don't hesitate to reach out. Everybody, have a great rest of the week. Thank you.
Thank you all very much. Appreciate it.
Ladies and gentlemen, thank you for participating. This concludes today's conference call. You may now disconnect.