Good evening, and welcome to the Texas Roadhouse second 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 assist you. I would now like to introduce Michael Bailen, Head of Investor Relations for Texas Roadhouse. You may begin. Thank you, Emma, and good evening. By now, you should have access to our earnings release for the second quarter, ending June 27th, 2023. It may also be found on our website at texasroadhouse.com in the Investor 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 in 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 newly appointed 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 1 question. Now, I'd like to turn the call over to Jerry. Thanks, Michael. Good evening, everyone. Before we begin our formal remarks, I want to welcome Chris Monroe to Texas Roadhouse. I am thrilled to have Chris join the Texas Roadhouse family. I look forward to working closely with him to make us bigger, faster, and stronger. I am confident that Chris is going to add value to our leadership team, our finance department, and our company. I also want to thank Keith Humpich and our amazing financial team for stepping up and ensuring that we did not miss a bit over the last six months. Moving on to our quarterly results, we are pleased with our strong sales and profits growth in the second quarter. Our sales momentum carried over from the first quarter as we averaged nearly $147,000 in weekly sales, with comparable sales up over 9%. There is no doubt that our guests continue to support our commitment to serving made-from-scratch food in a fun and friendly atmosphere. On the cost side, commodities have performed largely in line with our expectations, and beef remains the primary driver of inflation. On the labor front, we remain committed to ensuring we are properly staffed to provide a legendary experience for every guest. We are encouraged by our outlook for the remainder of the year as we continue to expect strong margin dollar growth, which is central to how we run our business. We will soon begin the normal process with our operators to determine the level of menu pricing to take in October. As is typical for us, our pricing decisions will focus on maintaining our value proposition while also looking to offset the impact of wage inflation, including any state mandated wage increases. On the development front, we opened two company-owned Texas Roadhouses and one Bubba's 33 during the second quarter. In addition, our franchise partners opened three restaurants, including two international locations. For the full year, we expect to open as many as 28 company-owned Texas Roadhouse and Bubba's 33 restaurants, as well as three Jaggers. At this time, all remaining restaurants in the class of 2023 are under construction. Lastly, we expect our franchise partners to open as many as 13 international and domestic restaurants, including three Jaggers. Last week, I attended the opening of our first Jaggers franchise restaurant in Jacksonville, North Carolina. It was great to see the passion that our franchise partner has for the brand, and we look forward to seeing how they will build upon our foundation. Finally, we continue to reinvest in the business through our new store pipeline, maintenance of our existing restaurant base, and technology initiatives. We believe our capital investments will enable future growth and contribute to improved operating results. With a healthy balance sheet and an expectation of continued growth in cash flow, we will continue to focus on long-term, sustainable growth, which has enabled us to generate consistent total returns for our shareholders throughout our history. Chris, you have been on the team for a month, mostly training in our restaurants. Can you share your initial thoughts on what you have experienced? Thanks, Jerry. I couldn't be more excited about joining the company and the opportunities ahead of us. I have been well aware of and impressed by the Texas Roadhouse leadership team and the brand for quite some time. As Jerry mentioned, most of my time so far has been spent in a restaurant learning about our operations. After working alongside several of my fellow Roadies and witnessing firsthand the commitment and discipline it takes to deliver on the promise of legendary food and legendary service, I now have an even greater appreciation for the brand and the passion of our people. I'm looking forward to bringing my experience to the company and helping to build upon its success for many years to come. Now Michael will provide the financial update. Thanks, Chris. For the second quarter of 2023, revenue grew 14.3%, driven by an 8.7% increase in average unit volume and 5.6% store week growth. Restaurant margin dollars grew 8.3% to $182.8 million, while earnings per share increased 14.7% to $1.22 per diluted share. As Jerry mentioned, our stores averaged nearly $147,000 in weekly sales in the second quarter, and to-go represented approximately $18,500 or 12.6% of these total weekly sales. The to-go sales were especially encouraging, given this was the first quarter since the reopening of our dining rooms, that average weekly to-go sales dollars increased on a year-over-year basis. Comparable sales increased 9.1% in the second quarter, driven by 4.7% traffic growth and a 4.4% increase in average check. By month, comparable sales grew 8.7%, 8.8%, and 9.7% for our April, May, and June periods, respectively. For the first 4 weeks of the third quarter, weekly sales averaged over $140,000, with comparable sales up 10.7%. I will point out that the 4-week comp number benefited by approximately 1.4% from the timing of the July 4th holiday. For the second quarter, restaurant margin dollars increased to nearly $23,000 per store week. Restaurant margin, as a percentage of total sales, decreased 88 basis points to 15.7%. Second quarter margins were negatively impacted by approximately 35 basis points from one-time adjustments, most of which I will detail in a moment. Food and beverage costs as a percentage of total sales were 34.5% for the second quarter. This was 37 basis points higher than 2022, driven by 6% commodity inflation. Overall, commodity costs were in line with our expectations for the first half of the year. With approximately 75% of the overall basket locked for Q3 and approximately 35% locked for Q4, we now expect full year commodity inflation to be on the higher end of our full year guidance range of 5%-6%. Labor, as a percentage of total sales, increased 90 basis points to 33.6% as compared to the second quarter of 2022. Labor dollars per store week increased 11.3%, primarily due to wage and other labor inflation of 7% and growth in hours of 3.5%. Labor growth was also negatively impacted by the $2.7 million net impact of unfavorable claims experience related to group insurance and workers' comp. This net impact includes $1.8 million of additional claims expense this year and the overlapping of a $0.8 million favorable adjustment in the prior year. Similar to commodities, we expect the level of labor inflation to moderate as we move through the year. That said, we have seen marginally more wage pressure in the first half of the year than we originally contemplated. As such, we have updated our full year 2023 guidance for wage and other labor inflation to between 6% and 7%, with current trends pointing towards the midpoint of that range. Other operating costs were 14.7% of sales, which was 29 basis points lower as compared to the second quarter of 2022. The year-over-year benefit of sales leverage was partially offset by the negative impact of a $1.6 million adjustment to our quarterly reserve for general liability insurance. Moving below restaurant margin, G&A dollars grew year over year by 3.6% and came in at 4.4% of revenue. The primary driver of the $1.8 million year-over-year increase was higher compensation expense. Our effective tax rate for the quarter was 12.7%, and we now expect a full year 2023 income tax rate of between 13% and 14%. Lastly, with regards to cash flow, we ended the second quarter with $107 million of cash. Cash flow from operations was $99 million. This was more than offset by $88 million of capital expenditures, $37 million of dividend payments, and $23 million of share repurchases. We are increasing our expectation for full year 2023 capital expenditures to approximately $300 million. This increase is driven by several factors, including the cost of new locations currently under construction and a higher than originally forecasted reinvestment at existing restaurants. Now, I will turn the call back over to Jerry for final comments. Thanks, Michael. In a few months, we will start our annual fall tour, which is one of my favorite times each year. During the six-week tour, our senior leadership team visits with every managing partner to gather feedback and to hear what is top of mind for them. This is a great opportunity for us to listen and learn how we can better serve and support our managing partners. I have no doubt that our operators will have some ideas to drive our business forward and enable us to continue generating strong shareholder value. That concludes our prepared remarks. Operator, please open the line for questions. Thank you. As a reminder, if you would like to ask a question, press Star followed by the number 1 on your telephone keypad. Your first question comes from the line of Brian Bittner with Oppenheimer. Your line is open. Mr. Bittner, your line is open. Sorry, can you hear me? Yes. Hello. Sorry about that, guys. I wanted to, I wanted to ask a question about your sales trends. Your third quarter is obviously off to a fabulous start. Your, your headline, same-store sales up over 10%. When we look back to last year, your comparisons got a lot more difficult in August and September versus July by around 700 basis points, and the question is: should we take that into account when modeling the rest of the quarter? I just kinda want to get us all on the same page. Should we focus on the fact that your average week- weekly sales are in that $140,000 range, which, if we carry that forward, that suggests a continuation of, of very strong headline comps for the rest of the quarter? Yeah. Hi, Brian, it's Michael. Thanks for the question. You know, I, I do think. I mean, you are correct that our, our, our year-over-year trends did, you know, pick up, you know, but I do think the more important thing is to look at, you know, where we're currently trending this year and how normal seasonality plays out year-over-year. You know, I think we are lined up for, you know, continued strong sales growth and, but I'll, you know, I will leave it to, you know, you all and others to determine what those, you know, comp%, you know, you know, might be. I do think we would think normal seasonality is back in our business. Okay, I'll stick to 1 question. Thanks. Your next question comes from the line of David Tarantino with Baird. Your line is open. Hi, good afternoon. Congratulations on the sales strength. My, my question relates to the margin outlook. As, as you think about the second half of the year, given the inflation outlook you just shared, I guess, w-what's your thoughts on your ability to grow restaurant margin percentage? I know, I know you mentioned you're set up to grow the margin dollars per week, but I guess, how are, how are you thinking about the percentage on a year-over-year basis when you think about the next few quarters? Hey, David, it's Michael. I don't think our... The way we're looking at it has changed much, with, with the guidance that we have out there. You know, on the cost of sales side, it would imply that our commodity inflation would be at the lower end of our 5%-6% range in Q3, and then below the low end of the range in Q4. With, with the pricing and, you know, that we have, that would probably imply that cost of sales is, you know, for the most part, fairly flat in Q3, and we should be able to get some leverage in the fourth quarter. That's what the math would say. Rent and other operating, I, I would expect under the current trends, that we see more of the same of what we saw in Q1 and Q2, of being able to get some leverage on that line. Labor is, is probably that one that still remains a headwind for us. You know, we'll leave that to you. Again, you all for modeling purposes, certainly third quarter could see that as a headwind and, you know, we're and then maybe flattening out in the fourth quarter. Really, that leaves a lot of the potential restaurant margin expansion for, for Q4, you know, that's what, that's what our guidance would imply. Got it. Then, I guess, you know, I wanted to revisit as a follow-up. You, you've talked about 17%-18% as a long-term target. You know, clearly this year, it looks like you're gonna be well below that. I guess, what's your updated thoughts on how you get to 17%-18%? Is it just a matter of the commodity cycle needing to go your way, or is there some strategy or initiatives you have that are gonna get you there, regardless of the commodity cycle? Well, I mean, the commodity cycle is going to continue to be our challenge. We're going to continue to focus on attacking the top-line sales and growing the restaurant margin dollars. We will continue to see what we need to do to try to get back there. We knew it was going to take a little time for us to accomplish that, but we are, and as we adjust to the labor and to the commodity, knowing that or expecting one day that the beef will start to slow down a little bit and give us a chance to catch up. You know, we really do believe that that is a spot we can achieve. We're just waiting for a few things to turn our way to help us there. Great. Thank you very much. Thank you. Appreciate the shout-out, too. Your next question comes from the line of Peter Saleh with BTIG. Your line is open. Great, thanks, and congrats, Chris, on the, on the new role. I just wanted to ask on the consumer overall, you know, I think in the past, maybe a quarter or 2, you were talking about seeing trade up into your brand or maybe even some trade down. Can you give us a little bit of color on what you're seeing today? Is there any change in behavior on the menu? What are you seeing on the value entry mix? Does that continue to tick up? Any thoughts there would be helpful. Yeah, it's Michael. I'd say it's really been a lot of the same of what we've seen. I mean, continue to see strong consumer demand to come to Texas Roadhouse. The mix, you know, kind of trends have continued where we're seeing some alcohol negative mix, and the rest is coming, you know, from the entry category. With the strong guest counts that we're seeing, it would appear to us that we are seeing people trading into Texas Roadhouse, but the value side of the menu. There could be certainly some people who are doing some check management as well, and are trading down our menu. We feel very good about the value proposition that we're offering and continue to see a very strong trends within our restaurants. Great. Then just on the labor side, I know there's a modest increase in your outlook in terms of inflation for the year. Can you just elaborate a little bit on what changed versus your prior guidance? What are you seeing on the field that made you feel like you need to take it up just slightly? Yeah, it, it is a combination of the, the wage inflation, maybe just being a, a little bit stronger in, you know, the first and second quarter, which then compounds on itself throughout the year. That, you know, adds a little bit to, to, to that overall wage pressure. The strong top line that we're, you know, that we have delivered, you know, certainly has seen us growing our, our hours, which, which isn't a direct component of the wage and other inflation, but the payroll taxes that then come with the higher wages and the more hours are the other component of that wage and other, and we've seen that tick up a little bit. Those two things combined just moves enough to where, where we felt, the guidance did need to be updated. Thank you very much. Your next question comes from the line of Chris O'Cull with Stifel. Your line is open. Great, thanks. Hey, guys, this is Patrick on for Chris. Jerry, I believe the company has historically targeted labor hour growth that's roughly 50%-55% of traffic growth, and it looks like this quarter remained quite a bit above that. I'm just curious if you're looking at ways to improve labor productivity, and if so, you know, what actions do you believe you can take that can improve the flow through on your sales growth? Yeah, thanks, Patrick. I believe that obviously, as we focus on our top-line sales, and Michael and I were doing some reviewing, there are definitely a uptick in hours in the front of the house and the back of the house. I believe some of the hours that we might be seeing in our key employee side is probably purposely to give our managers a little quality of life. I think there is some investment on our side in the labor pool to maybe try to identify ways to have quality of life, too. That is an investment, but I believe to be able to attack our execution at the highest level right now, that's costing us a few extra hours to be able to execute there with the escalated volume on the top line. I feel real comfortable overall with where we're going. I think we can improve, and we'll continue to look at ways to get better at that. Yeah, Patrick, I would just add on to that, that, again, I do think that historical algorithm is still you know, maybe not at play, that, you know, we are rebuilding from being understaffed last year, and so our labor hours are, are growing, you know, as we feel very good about our staffing now, and that those hours that we're growing are just not exactly correlated right now to the traffic growth we're seeing. Probably would have seen those hours growth even if traffic had been a little bit higher or lower than what we reported. Got you. That's helpful. Thanks. Thank you. Your next question comes from the line of Jeff Farmer with Gordon Haskett. Your line is open. Thank you. Looks like the Texas Roadhouse concept put up a 9.4% comp with Bubba's a little bit lower at 3.9%. Can you help us understand what's, what's going on there? Is that traffic, menu pricing, mix? What, what's driving that pretty healthy spread between the core Roadhouse concept and Bubba's as it relates to same-store sales? Yeah, I mean, certainly, you know, Roadhouse is leading the charge on, on the, the comp growth that we are seeing, you know, simply because of the size of the company. Yeah, I mean, we feel very good with the, you know, what we are seeing at Bubba's overall. You know, the menu pricing can be a little bit different at the different, you know, at each concept, and, and the traffic trends can be a little bit different as well. Again, our, our new Bubba's are opening well, and we're feeling very good overall, about their sales performance. Okay. Just 1 quick follow-up. The effective menu pricing at the core Roadhouse in Q3, what are you thinking that's gonna be right now? Well, yeah, 5.1% will be our third quarter pricing. Okay. Thank you. Your next question comes from the line of Jake Bartlett with Truist Securities. Your line is open. Great. Thanks for taking the question. You know, my question is about G&A, and, and trying to kind of just understand the correct run rate of G&A for, you know, the third and the fourth quarter. You know, I believe that the second quarter would have had the, the, the conference costs in it, and maybe correct me if I'm wrong, but Overall, it was much lower than we were expecting, what the street was expecting. Maybe that conference was less expensive. Any detail on how much the conference was, and then, and then, you know, the right run rate for the next couple quarters? Yeah, I, I mean, I would say we're not gonna get into the exact numbers on, on the conference expense. It was probably a little bit less than we expected it to be, and that, you know, was one of the components that maybe helped G&A in the second quarter come in a little bit better than what we may have discussed on the last call. Certainly our... You know, we're, we're doing the best we can of, you know, managing those costs and making sure when we're spending G&A dollars, it's for, for something important. You know, to your question about looking, you know, through the remainder of the year, I, I think, you know, maybe starting with Q1 of this year, which was just under $50 million, and if you back out the one-time charge that we had talked about, of about $2.4 million, that gets you to about $47.5 million. That's probably the best way we can give you as a starting point to look at where G&A, you know, may be in the third and fourth quarters of this year. Maybe we see a little bit of growth on top of that through the remainder of the year. Depending upon, you know, how the year continues to progress, there can always be the need to take some more, you know, compensation expense. I think starting with your Q1 of this year, adjusted number is, is your, is your starting point for, for looking at that G&A. Thank you. Your next question comes from the line of Brian Harbour with Morgan Stanley. Your line is open. Yeah, thanks. Good evening. I, I was just curious about the capital budget, actually. you know, how much of that was from new locations? is, you know, some of that related more to 2024 units, and then, you know, what, what is that reinvestment focused on? I know that you've also, you know, talked about perhaps some technology initiatives. I don't know if, if that's part of it. Could you just elaborate on the capital budget? Yeah. I mean, it, it's a mixture of, of all those things that you commented on. It's, it's the, you know, the cost of the new, you know, new buildings that we're building this year. We're seeing slightly higher, you know, cost than what we maybe originally forecasted for some of those, and that will factor into as we start building later this year. Some of our 2024 class openings, you know, we'll see some expense from that. That is, is a component. The technology initiatives, as we continue to look at, you know, digital kitchens, that, that can be, you know, a, a small component of it. Also really that, that maintenance CapEx, you know, has been elevated. You know, that goes to, you know, the better conditions that we're seeing out there, the, the supply chain opening up, our ability to get more projects done. We'll probably. You know, we're targeting 20 bump outs this year, which we haven't been able to do for quite a few years, and getting some projects done in our restaurants. You know, building out, doing some kitchen remodels and cooler additions, giving these restaurants some more capacity to handle these high volumes. All great you know, shareholder, you know, great from a total return standpoint. We are excited that we are gonna be able to invest this money and, you know, keep these restaurants fresh and, and ready to serve more guests. Thank you. Your next question comes from the line of Sara Senatore with Bank of America. Your line is open. Thank you. Just a quick housekeeping and then, and then a question, please. Just to confirm, in terms of the amount of price you had, on the second quarter, is it was 5.6%? I'm just trying to sort of think through the- That's correct. negative. Okay, thank you. So you had a little bit of negative mix in the second quarter, which we hadn't seen, you know, we haven't seen for a while now, and I was just curious, is that what you talked about with the value and the less attached, or is there, there's something else going on there? You know, well, we, we, we actually haven't seen that negative mix for a little while. I think we had about 80 basis points of negative mix in the first quarter. It did step up a little bit here in the second quarter to that 120 basis points of negative mix. I'll tell you, you know, we, we've, we saw it start to come down a little bit here in, you know, June and July. It does seem like maybe the worst of some of that negative mix is behind us, and the majority of that is coming from alcohol. Yes, we are seeing a little bit of negative mix. it, it does seem that it's not necessarily because of the menu pricing we've taken, given that it's alcohol, and the remainder of it is in that entry category, which is part of why w-we think that some of our guest, new guest traffic is coming from people trading up to us, but hitting the value side of the menu. Got it. Thank you. The question was to follow up on the labor. You know, you said you're, you know, you, you expect labor to flatten out in 4Q. I think that's sort of a wage rate comment, but as, you know, you talk about the idea of needing to staff up. At what point do the restaurants look fully staffed? You know, I think, like, off-premise mix has been fairly stable. From that perspective, you know, your, your on-premise dining, you know, is, is, has, is more consistent over in, in the last couple of quarters. When do you get to the point where the restaurants are fully staffed so that you could get back to that historical algorithm? Yeah, sure. I, I do think we feel very good about our staffing levels, you know, right now, and it's a matter of lapping, you know, the understaffing from, from last year. You know, throughout last year, we talked about each quarter, we felt better and better sequentially about those staffing levels. Theoretically, the hours growth should come down as we move through the year. You know, we talked about the, the level of wage inflation should come down as we move through the year because, again, a lot of the wage pressure we're feeling is from increases that we saw last year that you have to lap for a full 12 months. The expectation, you know, is that you see the, the, the level of hours growth moderate as we continue to move through the year because, it should not be require as many hours to get us to that, you know, level that we're at right now. You, sort of, by the end of last year, had kind of been approaching being fully staffed. Is, is there how to think about it? Yeah, end of last year or early this year, you know, we did have a little bit of a, you know, with the weather in, in late December last year, a little bit of a, a step back, you know, in late December. Other than that, other than that, yeah, we were starting to feel pretty good about our, our staffing levels as we were exiting last year and entering this year. Great. Thank you very much. Very helpful. Your next question comes from the line of Andy Barish with Jefferies. Your line is open. Hey, guys. Good evening. You know, there, there seems to be a growing view that, that beef may be, you know, higher for longer. I'm, I'm wondering, you know, Jerry, if you've, you know, kind of thought about the, you know, kind of the contingency plan. If that is the case, do you, do you go to menu breadth? Do you use price a little bit more? Is there something else we should be thinking about, you know, as we start to size up, you know, 2024, 2025? Yeah, thanks, Andy. Good to hear from you, bud. I, I would tell you, we, we'll consider some of those things. Obviously, we still want to be very... We don't know what's going to happen in beef. Obviously, as it continues, there's a lot of chatter out there. We will continue to monitor it. It's a big part of our menu. It is the cost of doing business right now. We do need to be very cautious and careful on the pricing to make sure that we are continuing to drive our value component and then deliver on the experience. I think in the long run, we will still win with that strategy. We will always look at several factors of what we could do. The question is, will we do that? We are going to continue to focus on the long-term run and taking great care of our guests and, and, and our business. Gotcha. Makes sense. Thank you. Thank you. Your next question comes from the line of Brian Vaccaro with Raymond James. Your line is open. Hi, thanks, good evening. Most of my advance, I just was going to ask on the other operating cost line. It looks like cost per week is still running up in the $6s, which is an improvement versus closer to $10 in the first quarter, still up in the $6s. I guess, could you remind us what, what% of that basket of cost is fixed versus variable these days? Are there any categories worth highlighting where there's some relief on the horizon, or would you expect a pretty similar level of inflation in the second half as you've been recently seeing? Hey, Brian, it's Michael. Yeah, I'm not sure I have, you know, at my fingertips what is, you know, fixed versus variable, you know, within there. You could argue, you know, most things, you know, if they had to, could, can, can go away. But I'll tell you, you know, I think, you know, we, we saw just what we, what we expected to happen, happen, that, that, that level of operating dollars per store week did slow, as you said, from around 10% to a little over 6%. I think the expectation is you, you probably see that continued, you know, slowdown of that rate of increase. It would on a year-over-year basis. And again, some of that is coming from the, the traffic growth and the menu pricing that we have. It's really that a lot of the items in that basket, you know, which were a lot of services being provided, you know, went up dramatically last year. Now you're seeing, you know, not a lot of, you know, additional upward pressure on them. They've just flattened out at these levels, and, you know, you're able to get the leverage from the, the higher volumes right now. Other operating is a line, all else being equal, that we should continue to hopefully see some, some leverage on as we move through the remainder of the year. All right, thanks very much. I'll pass it along. Your next question comes from the line of Gregory Francfort with Guggenheim. Your line is open. Hey, hey, thanks for the question. Maybe just going back to the alcohol mix, I think you guys last year actually had alcohol mix above where it was before COVID, and a lot of your peers were down a point or two in mix. Do you have a sense for why that was, and is maybe just some of this you giving that back versus, versus some of your peers that maybe lost it over the last couple of years instead? Yeah. I mean, don't have the exact numbers right in front of me. I do think, over the last you know, last year, you had what I would call that euphoric consumer who was happy to be back out there, who had some extra money in their pocket, whether that have been from stimulus or just not having other places to spend it, they were maybe getting a drink that they were not, historically getting or getting a second drink. Now you're maybe seeing a little bit more of a return to, to normalcy, as far as you know, what people are, you know, are ordering from that, you know, alcohol standpoint. Again, obviously, with our to-go business being a bigger component, you know, of the overall sales, you know, versus pre-pandemic, our alcohol sales are gonna be a little bit lower, but in the dining rooms, I think we still feel very good about where we are now. Yes, you are right. We are lapping probably that euphoric consumer from last year. Okay. Thanks, Jerry. I appreciate it. Your next question comes from the line of Dennis Geiger with UBS. Your line is open. Thank you. Could you please talk a little bit more about the food inflation breakdown, perhaps any updates on the breakout between beef and non-beef inflation expected for the year? Then, Jerry, I know gave some comments on. Beyond what's been mentioned already, is there anything else to share on beef considerations looking ahead? Are you seeing any softness in demand out there at retail, et cetera, that might impact how you think about 2024? Thank you. Hey, this, this is Michael. I'll start, and if Jerry wants to add anything, you know, he can. I think, you know, again, I'll go back to our, our, our prepared remarks, and we said the majority, if not all of the inflation that we expect to feel this year is, is coming from beef. We have other items in the basket, pork, chicken, that, you know, we would expect to be overall deflationary on a full year basis, that are offsetting maybe still some pressure in, you know, some grocery items and some of the produce items. For the, for the full year, beef is driving the overall inflation, and I think that goes to that conversation about, you know, what, what the future might hold. You know, yes, beef is going you know, has the potential to be a pressure point again next year. Too soon to know what that means. We have another half of our basket that could potentially offset some of that pressure, so that's why we aren't going to, you know, overreact until we, you know, at any point. You know, we don't have a full picture yet of what 2024 might bring, outside, you know, that might offset some of, you know, the continued beef supply constraints. Thanks, Michael. Appreciate it. Sure. Your next question comes from the line of Jeffrey Bernstein with Barclays. Your line is open. Hi, this is Anisha Datta on for Jeffrey Bernstein. I wanted to ask if you could give some more color on recent trends at Bubba's relative to the Texas Roadhouse brand. Do they move in tandem, or is one better positioned in a slowing macro? Perhaps if you could provide an update on your confidence in Bubba's new unit openings following the ultimate slowdown at Texas Roadhouse. You start. Yeah. You know, thanks for the question. I mean, I think from a, from a standpoint of openings, again, we, we feel very good about our, our opportunity to get, you know, some Bubba's open this year. We've talked about, you know, this year, probably see 5 Bubba's openings, and the next couple of years, wanna be in that 5 to 7 Bubba's openings, you know, with a maybe next goal after that, getting closer to, to, to 10 openings. Again, the slowdown in our number of openings for this year has nothing to do from anything on our side of our excitement for any of our concepts. It is more of an issue of things that are out of our control, getting you know, permanent power to, you know, a restaurant site and the timing of, you know, work getting, getting done. We are excited about getting restaurants open from all of our concepts at this point. You know, our overall trends in, you know, in the different concepts are all still very strong. We think we are set up for, for great success across all the brands, and certainly, you know, Bubba's with less of a focus on steaks is, is not feeling the level of inflation that a Roadhouse is. Everyone has different things going on that makes us feel very good about, you know, what the future holds for each concept. Awesome. Thank you. Your next question comes from the line of Jon Tower with Citigroup. Your line is open. Great, thanks. just I guess, circling back to the pricing thoughts again, I'm just curious if you can elaborate on what sort of tools- ... the managing partners have at their stores in terms of thinking about overall pricing in general? You know, are they considering what the, you know, obviously, the market competitor set is doing, but also what's happening at the grocery store when, when it comes to beef prices, and then how they weave that into labor in their distinct market? Like, can you help us just walk through how they build up to a labor or excuse me, an inflation expectation for the year to come, and then therefore, the decision on pricing? Yeah. Our pricing process is very similar. We ask the managing partners for inputs on what's going on in their local area from a competition standpoint, from a retail grocery, and they share that with us. Then we obviously talk to the multi-units that kind of share a bigger picture of what might be going on in their turf, in their markets. State by state, we all, on our side, we know a lot more of the details overall on some mandates. It's an extensive process that we go through to try to get it right for every store, but also by market and by region and company. It's a complicated formula for sure, but there's a lot of thought put into it on every level, so that with the inputs from our operators and from the knowledge that we have from the company stand, we try to make the absolute best decision, literally by store, by market, by state, and for the company. The overall number rolls up to it. Those conversations that we have with, with our partners are valuable in the decision-making process. Got it. Thanks, Jerry. Then just, I guess, Chris, you're coming in with a fresh set of eyes to the company. Obviously, it's been a very successful company for a very long time, but I'm curious to get your perspective. Perhaps, you know, with this fresh set of eyes, do you see anything that you feel like could be a new opportunity for the brand or perhaps areas where you believe there could be improvement on the business? Well, thank you, John, for the question, and, and, these, these are, these are early days, I must say. It's probably not time for me to opine on, on any sort of changes that, that, we might consider. There's, there's a great tradition here. There's a, a, a very successful brand, that's nationwide, and it's doing very well. Of course, you know, we'll, we'll be reviewing a number of things, along with Jerry and the rest of the team here, but, but, pretty early for me to, to opine on some sort of, change process. Got it. Thanks for taking the question. Your next question comes from the line of Andrew Strelzik with BMO. Your line is open. Hey, thanks for taking the question. I just wanted to ask about the unit openings for the rest of the year. How should we think about the cadence between 3Q and 4Q? Do you think there's risk that some of those get pushed further into next year? To the extent that some have gotten pushed or more due, do we think about next year as a makeup year, or do you think you'll stick to kind of your normal framework of openings, and the entire kind of timeline gets pushed? Hey, thanks, Andrew. It's Jerry. Like I said, we, we have every store that's scheduled to open this year under construction. We do know there's a couple in December that a little concerned about. We've have had some utility issues, but we're monitoring it closely. We're pretty confident we'll be at that number or, or extremely close, if not, then it'll push into next year and go from there. Our pipeline for next year will be very consistent to what we've done in the past. We have a strong pipeline. We will continue to stay focused on, on the growth and development of, of all three brands, pretty much as we have in the past, and really focused on doing it right and doing it well, as we go through there. Still a little early in the year to be concerned yet, but they're under construction. We are moving forward, and we'll keep monitoring throughout the year and give you an update on the next go round. Great, I look forward to it. Thanks. Thank you. Your next question comes from the line of Elliot Simon with Evercore. Your line is open. Hey, guys. Thanks for the question. On prepared remarks, you mentioned pricing decisions are based on wages as well as the value proposition. Clearly, the wage side has given you a green light to take some price in October. How do you characterize the value proposition today to differently your price gaps to steak peers, as well as other casual dining peers outside the steak segment, which may not have faced as much inflation? Would you say they are narrower, the same, or wider than historical levels? Yeah, that's a great question, Elliot. Thank you. I believe that we watch it very closely and to see, you know, knowing where our gap is at. I think it has changed a little bit. It probably has gotten a little tighter, but I think in general, we try to focus on what we're doing and what's right for our business, and others have to make their own decisions. If we look at labor or look at any other costs that are, that are part of our decision making, we, we try to encompass all of the information and really try to make a decision that we feel is right for our business going forward, to protect our value, and to protect our menu that's built in with that value to our consumer, and to really protect those top-line sales. There's a lot of work put into it, and we've been conservative. We probably will stay in that direction, but we also have proven if we need to, we can use that leverage. Great, thanks. Just a quick follow-up. I mean, as you talked about protecting the top line, I'm curious, Jerry, if you can kind of boil down the secret sauce to one or two things that really differentiate yourself versus competitors, what would it be? The value proposition, the service you provide, or something else? Well, I, I think it's all of it, to be honest with you. I, I think we work really, really hard to present an environment. Our, our made-from-scratch food or handmade, it, it, all of that adds value. When you walk into that restaurant and you smell that fresh-baked bread, and, and you know that we're cooking that steak to order for you, and, and we've got this friendly individual, and, you know, we're, we're, we're still hungry to serve people at an extremely high level. When I look at the lines that are waiting at our restaurants, it tells me that we need to continue to focus on doing the things that we do, and they're loving the food, they're loving the service. We need to be able to execute, to get them in the restaurant, provide them with an experience, thank them for coming to our business, because it's still important for us to serve them at a high level, and we're trying to earn their business every single day. Somebody woke up this morning thinking about where they were going to dinner, and I want them thinking about Texas Roadhouse, Bubba's 33, and Jaggers all day long to choose to walk through our doors. We're hungry for it. Sorry, dude, got me excited. No, no, no. I, I really appreciate it. Thanks, guys, and best of luck. Thank you very much. Your next question comes from the line of Jim Sanderson with North Coast Research. Your line is open. Yeah, thank you for the question. Just wanted to follow up a little bit more on capital expenditures. I think that went up to $300 million from $265, if I'm not mistaken. Just wondering if that elevated level is causing fundamental or permanent changes in CapEx returns on store development, or if that's causing you to rethink the cadence of development over the next 3-4 quarters. Yeah. Hey, Jim, thanks for the question. No, it, it really is not changing any of our thought. I mean, there is a piece of it that, that is related to, you know, new store development, but, you know, our, our internal model, models are, are still generating, you know, returns above our, our target level. We still feel very comfortable with the ability to open restaurants and have no plans to slow that down at this time. All right. Thank you. Your next question comes from the line of John Park with Wells Fargo. Your line is open. Hey, good evening, guys. Just on the quarter date acceleration, you spoke to the calendar benefit and mix potentially getting a little bit better. I guess, is there anything else to point to that's kind of driving that acceleration you're seeing? I would say the only other thing is the continued improvement in our staffing levels and, you know, our ability to serve the demand that is out there. You know, our restaurants are open, they are well-staffed, and there's strong demand, you know, to come to them, and it's really as simple as that. Got it. Best of luck, guys. Thank you very much. There are no further questions at this time. I will now turn the call back over to Jerry Morgan. Thank you all very much for your time today, and we wish you the best of the weeks coming to finish your summer, and, thank you. This concludes today's conference call. Thank you for attending. You may disconnect.