Good evening, and welcome to the Texas Roadhouse third 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 your conference. Thank you, Rob, and good evening. By now, you should have access to our earnings release for the third quarter, ended September 24th, 2024. 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 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, could everyone please limit yourself to one question? Now, I would like to turn the call over to Jerry. Thanks, Michael, and good evening, everyone. We are pleased to report strong third quarter results, which were highlighted by 8.5% same-store sales growth and approximately $1.3 billion of revenue. These results are a testament to our operators continuing to create an environment where Roadies want to work and our guests want to dine. Since last quarter, I had the opportunity to visit with managers and Roadies at a number of our international franchise restaurants. Also, over the past five weeks, I have been traveling the country, meeting with our managing partners during our annual Fall Tour. Both internationally and domestically, I can tell you the pride and passion our operators have for running their restaurants have never been higher. As always, the feedback we receive from managing partners during these listening sessions is extremely beneficial as we learn what our owner-operators need to run their business. On the development front, we opened seven Texas Roadhouse company-owned locations in the third quarter. For the full year, we expect to open approximately 30 restaurants across all brands. Our franchise partners opened three international Texas Roadhouse restaurants during the quarter. This puts them on track for a total of 14 openings this year, including three Jaggers. I also want to call out the recent October opening of our first international Jaggers location on a U.S. military base in South Korea. This marks our fifth franchise restaurant location on a U.S. military base. Looking ahead to 2025, we are targeting approximately 30 company-owned restaurant openings across all brands. Additionally, we have a tentative agreement with one of our largest domestic franchisees to acquire 13 Texas Roadhouse restaurants at the beginning of 2025. Our international Texas Roadhouse franchise partners are currently expecting seven openings next year, while our domestic Jaggers franchise partners are targeting three new locations. During the third quarter, we also completed our normal review of menu pricing with our operators. As a result, we rolled out new menus at the beginning of the fourth quarter, which included a price increase of less than 1%. We remain proud of our everyday value proposition and believe this is the appropriate level of pricing. Also, our technology initiatives continue as planned, and we remain encouraged by the positive feedback we are receiving. With over 200 digital kitchen conversions completed so far this year, we feel confident in achieving our target of over 250 conversions by the end of this year. We also remain on track to convert nearly all of our restaurants to a digital kitchen by the end of 2025. Additionally, we are making progress on the upgrading of our restaurant guest management system. Finally, October has been a very rewarding month for our company. In addition to Fall Tour, we had the privilege of celebrating 20 years as a public company by ringing the closing bell at Nasdaq. We are very proud of the growth we have seen as a public company. We have expanded from one brand to three. We have increased our footprint from just over 175 restaurants to nearly 775, and we have grown Roadie Nation from over 10,000 employees to nearly 100,000. Also, we were named the 2024 Brand Icon by Nation's Restaurant News. We are truly humbled to be the first casual dining restaurant to receive this award. All of these events were even more special because we were surrounded by the best operators and support team in the industry. Now, Chris will provide some thoughts. Thank you, Jerry. You know, Fall Tour is quickly becoming one of my favorite times of the year. The conversations with our operators have proven to be really important and help us all perform our best, and the Nasdaq bell ringing was such a special moment for all of us. It was especially meaningful that we had 50 of our managing partners on stage with us. We were able to demonstrate in a visible and tangible way, just how important our managing partners are to the success of our company. Now, moving to the third quarter, weekly sales averaged $153,000 at Texas Roadhouse, $117,000 at Bubba's 33, and $72,000 at Jaggers, our quick service brand. We were especially encouraged to see that all three brands delivered positive traffic and sales growth, and this momentum has carried forward into the beginning of our fourth quarter. As we look forward to the remainder of this year and into next year, we believe the 0.9% menu price increase will allow us to maintain our value proposition and our traffic and mix levels. Additionally, we continue to see a steady to more positive outlook for inflation within commodities and labor. Commodity inflation, driven by lower than forecasted beef costs, was once again below our guidance in the third quarter. This has also resulted in an improvement in our outlook for fourth quarter commodity inflation and factors into our initial expectations for next year's inflation. At this time, we are updating our full year commodity inflation guidance to less than 1%. This adjustment reflects both the impact of lower than initially forecasted inflation in the third quarter and our current expectation of relatively flat commodity price levels in the fourth quarter. Also, we are establishing our initial 2025 commodity inflation guidance at 2%-3%. Wage and other labor inflation during the third quarter remained in line with our guidance, and we believe this trend will continue in the fourth quarter. We were also pleased to see that our labor hour growth relative to traffic growth remained well below our historical levels. As we approach the end of the year, we are narrowing our full year 2024 labor inflation guidance to approximately 4.5%. For 2025, we are forecasting wage and other labor inflation of 4%-5%, with mandated increases representing as much as 1.5% of the increase. With regard to cash flow, we ended the third quarter with $189 million of cash. Cash flow from operations was $139 million, which was offset by $141 million of capital expenditures, dividend payments, and share repurchases. As Jerry mentioned, we do have a tentative agreement in place to acquire 13 franchise restaurants at the beginning of 2025. Included in this acquisition will be seven restaurants in Indiana and Ohio, and six in California. Our current expectation is to fund this acquisition through existing cash on hand. Finally, for 2025, we are establishing our initial capital expenditure guidance at approximately $400 million, excluding the aforementioned franchise restaurant acquisition costs. This should provide sufficient capital to build new restaurants, maintain, expand, or relocate our existing restaurants, and invest in our various technology initiatives. As always, we believe these investments are a great use of our capital and should result in further shareholder value creation, and now, Michael will walk us through the third quarter results. Thanks, Chris. For the third quarter of 2024, we reported revenue growth of 13.5%, driven by a 7.5% increase in average unit volume and 5.8% store week growth. We also reported a restaurant margin dollar increase of 24.1% to $202 million, and a diluted earnings per share increase of 32.5% to $1.26. Average weekly sales in the third quarter were $149,000, with to-go representing $19,000 or 12.7% of these total weekly sales. Comparable sales increased 8.5% in the third quarter, driven by 3.8% traffic growth and a 4.7% increase in average check. By month, comparable sales grew 8%, 8.1%, and 9.3% for our July, August, and September periods, respectively, and comparable sales for the first four weeks of the fourth quarter were up 8.3%, with our restaurants averaging sales of over $151,000 per week during that period. In the third quarter, restaurant margin dollars per store week increased 17.3% to nearly $24,000. Restaurant margin as a percentage of total sales increased 137 basis points to 16%. The year-over-year improvement in the restaurant margin percentage was negatively impacted by approximately 30 basis points due to the change in our annual gift card breakage adjustment to $0.6 million this year from $3.7 million last year. Food and beverage costs as a percentage of total sales were 33.5% for the third quarter. The 107 basis point year-over-year improvement was primarily driven by the benefit of a 4.7% check increase, offsetting the 1.3% commodity inflation for the quarter. Labor, as a percentage of total sales, decreased 18 basis points to 33.8% as compared to the third quarter of 2023. Labor dollars per store week increased 6.7%, primarily due to wage and other labor inflation of 4.7% and growth in hours of 1.1%. The remaining 0.9% increase was due to the $3.5 million net impact from adjustments related to group insurance and workers' comp claims experience. This includes $2.2 million of unfavorable claims experience this year and the lapping of last year's $1.3 million favorable claims adjustment. Other operating costs were 15.1% of sales, which was eight basis points better than the third quarter of 2023. Higher operator bonuses as a percentage of sales, resulting from increased year-over-year restaurant level profitability, had a 30 basis point negative impact. This was largely offset by the 23 basis point positive net year-over-year impact from general liability insurance reserve adjustments, which includes a $0.4 million unfavorable adjustment this year and the lapping of a $2.9 million unfavorable adjustment from last year. Moving below restaurant margin, G&A dollars grew 15.6% year over year and came in at 4.3% of revenue for the third quarter. The majority of the year-over-year dollar increase was due to higher compensation and benefit expense, including the $2.1 million impact of the timing of our change from quarterly to annual equity grants. Our effective tax rate for the quarter was 16.7%. The higher tax rate was driven by an increase in our profitability outlook for the full year. Based on this outlook, we are updating the guidance for our full year 2024 income tax rate to approximately 15%, and our initial forecast for the full year 2025 income tax rate is between 15% and 16%. Finally, as a reminder, 2024 is a 53-week year for us. As such, the fourth quarter will have 14 weeks versus our normal 13 weeks. We estimate that the additional week could benefit full year 2024 earnings per share growth by approximately 4%. Now, I will turn the call back over to Jerry for final comments. Thanks, Michael. There's no doubt that reflecting on 20 years as a public company fills us with great pride and gratitude. Speaking of 20 years, we also just celebrated our 20-year partnership with Homes For Our Troops, which provides custom-built homes for severely injured post-9/11 veterans. We recently had the privilege of funding their 400th home for Lance Corporal Alberto Flores in New Braunfels, Texas. Partnering with such a great organization is what Texas Roadhouse is all about, as we strive to serve communities across America and the world. Finally, as I have said before, we will always honor our past, but our focus will remain on the future. At 31 years young, we are just getting started. That concludes our prepared remarks. Rob, please open the line for questions. Thank you. We will now begin the question and answer session. If you would like to ask a question, please press star one on your telephone keypad to raise your hand and join the queue. If you would like to withdraw your question, simply press star one again. Your first question comes from the line of Sara Senatore from Bank of America. Your line is open. Oh, hi, good evening. Thank you. This is Catherine on for Sara. First question, just wanted to ask about the labor leverage in the quarter. Michael, you spoke a little bit about some of the claims and adjustments that were in that number, so just want to get a sense for how much longer we should be considering those adjustments in that labor line going forward, and is there a point at which they are no longer a headwind? Yeah. Hi, Catherine. It's Michael, and you know, a lot of those adjustments have to do with insurance and you know, how those claims come in. And so, that's something that you know, you really never know you know, how they may affect us one way or another. And but that is separate from the labor productivity you know, that we are you know, seeing, which I think can continue certainly through the end of this year. Catherine, this is Chris. I mean, I think we're comfortable being self-insured, and that's why we report those numbers every quarter. But also the productivity levels that we talked about have continued to improve. We were in terms of hours of labor for versus traffic growth. We're well below our 50% historical averages. Again, in Q3, we were, you know, below 30%. So we've had five straight months of that metric improving. Great. Okay, thank you. And then just wanna move to the commodity inflation guidance, which, you know, continues to surprise to the downside, and it seems like next year's inflation assumption, excuse me, doesn't anticipate a real, like, step-up in inflation despite concerns about the size of the beef herd. So can you talk about what you're seeing there, what's embedded in that inflation guidance? Sure. I mean, you know, obviously, you know, our purchasing department has, you know, been, you know, hard at work and, you know, determining what levels of, you know, cost we're gonna have in 2025. And, you know, while we're not gonna get into the specifics of what may be fixed price contracted, versus not, it does include a, you know, a combination of, you know, locked prices and assumptions. And the majority of that inflation guide is coming from beef, similar to this year. Thank you. Your next question comes from the line of Jake Bartlett from Truist Securities. Your line is open. Great, thanks for taking the question. You know, mine was another one on the commodity outlook in beef. You know, one thing about the beef picture, it seems like when there's good news in one year, it can be bad news for the next. So, you know, supply has been a little less bad this year, and my impression was that means that you know, that supply next year, you know, kind of kicking the can down the road. So a little surprised to see kind of two decent years in a row expected within beef costs. And so, you know, I guess the question is, why? But also just if you could help us understand just what your beef inflation is expected to be in 2024, and what's it expected to be in 2025. Just wanna make sure I understand what the beef expectations are, you know, in those two years for the commodity guidance. Jake, it's Chris. You know, beef is roughly half of our basket, and so it drives a lot of the commodity increase, and you're correct in that this year has been a surprise that we didn't see the amount of inflation driven primarily by beef that we expected, and look, we think that there's a lot going on in that. There's supply and demand, and you know, ranchers are just business people, and they're looking at the price they're able to get for their cattle and what it costs them to raise the cattle, so as interest rates come down, as there's perhaps more rain, as grain prices have come down, you know, that may inspire there to be more breeding and to rebuild the herd. But it is a challenged environment for sure in beef. We just haven't seen it come to fruition because of the demand side, at least this year, and at least what we can see so far into 2025. Michael, did you have some kind of. Yeah, and, Jake, to your question of, you know, what kind of is embedded in the 2024 and 2025 overall inflation from beef? And this year in 2024, you know, everything and then some is coming from beef, with other items being, you know, flat to deflationary. For 2025, beef is driving the majority of our assumed inflation with, you know, most other items, you know, flat to maybe, a touch of inflation. Okay. And just in terms of those other items, and I know we always focus on beef, but there is 50% that's the other. Do you have visibility on that portion? You know, I assume there's maybe a little ability to contract for that portion, but how confident are you in the kind of the flat, you know, I think you meant flat for that other 50% of your commodity needs? You know, there are certain items that we're probably, you know, more locked into than others. You know, there's no one item that is a huge component of our overall basket. So, certainly there is, you know, the potential for those costs to be higher or lower than what we expect, but they would have to really be dramatically different to play a big part in the numbers. All right. Thank you very much. Our next question comes from the line of Brian Bittner from Oppenheimer. Your line is open. Thanks. I wanted to ask a question about pricing in 2025 relative to your cost inflation. You took the 0.9% price increase in September, and I think that puts you at a pricing run rate around 3.1% until you lap pricing from in late March. Please correct me if that's wrong. That's just my math. And you initiate guidance for commodity inflation of 2%-3%, wage inflation of 4%-5% for 2025. So how does that inform you about your pricing strategy next year relative to this kinda 3% run rate you're taking into the new year? And how do you want us analysts thinking about pricing for 2025? I'll start off. Basically, we have the same process that we've used w e will again look at pricing and have conversation with all of our operators after the first of the year. You know, and then as we kind of make that decision based on the environment that we're in at that time, we get feedback from our operators, we talked amongst ourselves, and then we will decide on what do we believe is the best long-term decision for the business. So I guess from a bigger picture standpoint, it's still early to decide, but we will continue to use the process we've used for multiple years of evaluating, talking with our partners, and then making a decision based on that current event, that which is many months from now. Brian, this is Michael. Your math is correct. We will have 3.1% pricing in the menu for the fourth quarter. We'll have that same 3.1% for the first quarter, and then we would have 2.2% rolling off, and, you know, we will go through our normal conversations to see what, you know, we may or may not do come the beginning of the second quarter. Got it. Got it. So when that 2.2% rolls off, for instance, you would have to take, say, 1.6% at that point to be at that 2.5% price range until you lap the 0.9% you just took, right? Just confirming that math. Yes. The one point one six combined with the point nine to give you two and a half. Okay, great. Thanks, guys. Thank you. Your next question comes from the line of Eric Gonzalez from KeyBanc Capital Markets. Your line is open. Hey, good evening, and thanks for taking my question. Maybe if you could help us sum all this up and think about the margin implications of what looks like a more conservative pricing strategy and a relatively benign food cost outlook for prior years. So, you know, unless you're planning on taking another pricing mid-year, it seems that you're comfortable letting effective price tick lower as commodity inflation moves in the right direction. So given these assumptions, can you help us understand what it means for restaurant margins in 2025? Yeah, Eric, it's Chris. You know, we're always more focused on growing restaurant margin dollars than absolutely trying to hit a margin number. That being said, you know, our 17%-18% goal is always out there, and we're interested in hitting it consistently. But there's a nuance. I mean, that number is highly sensitive, particularly the margin number, to traffic, pricing, inflation, both commodity and labor. And we've already talked about pricing having another component to it, you know, and starting in the second quarter. So it really is gonna depend on how all of those things come together. We've been very pleased with our ability to expand the margin this year, but you'll have to... You know, we'll just have to look at all those elements as they come together in 2025. Thank you. Your next question comes from a line of Jim Salera from Stephens. Your line is open. Hey, guys, thanks for taking my question. Maybe a two-part question on mix. Part one, if you could just kind of give us an update on, you know, the mix contribution in the quarter, and particularly on kind of alcohol versus the add-ons. And then, part two is, if we think about where you took pricing across the menu, is it basically that 0.9% kind of evenly across, or are there any particular parts of the menu, whether it's appetizers or desserts, that saw a little bit more or less price, and just how you think about that as it impacts mix? Yeah. You know, maybe I'll touch on the mix here to start. I'll tell you, our mix in the third quarter was very similar to what we had seen in the second quarter. Still seeing positive entree mix, positive soft beverage mix, and positive add-ons. That alcohol mix has-- is remaining negative. It hasn't gotten any worse, but it is the... You know, it's really what's driving that slight negative mix. We're probably around 20 basis points of negative mix in the third quarter. So, you know, it-- to me, you know, we're seeing good results from our guests, not hearing of any pushback on the menu pricing that we have taken, so I believe we're still screaming value. Jim, I'll say, on the 0.9%, across the board, there's probably. I don't have it right here in front of me, but I think in general, as we look at the overall menu, that's how we come up with that. You know, so it would be hard for me to break it down at this point, now that we're five weeks into it, on that side of it, but typically, it is spread out through the menu. Okay, great. I'll hop back in the queue. Thank you very much. Your next question comes from a line of Brian Harbour from Morgan Stanley. Your line is open. Yeah, thanks. Good afternoon, guys. I'll ask actually just about the kind of the technology things you mentioned, the digital kitchen and guest management system. Yeah, I'm sure there's an aspect of that that sort of improves the employee experience, but do you think, you know, is that starting to contribute to, like, some of the labor productivity you're seeing? Do you think it sort of helps, you know, table turns? Is it sort of showing in other ways that we might sort of observe from the outside? Yeah, you know, I would say it is still a little early for that, but the indicators are good, and obviously, the number one reason is the experience of our employee and our managers and really just the cadence that we use in the kitchen and the communication. I do believe that there are gonna be some other benefits as we get more and more stores on the program and on the digital kitchen. So, you know, it's hard for me to quantify that at this time, but the indicators are showing that we should expect some of that return also. Thank you. You're welcome. Your next question comes from the line of Dennis Geiger from UBS. Your line is open. Great. Thanks, guys. Wondering if you could speak a little more to labor hours, perhaps into next year, after another really strong quarter of managing hours this year. Anything to kind of give on how we should think about the labor hours dynamic, heading into next year, again, relative to the gains that we saw this year? Thank you. Hey, Dennis, it's Michael. You know, as I said a little bit earlier, I do think we have the opportunity to see that algorithm of labor hours to traffic growth be below that 50% level through the end of this year, and maybe as I've talked about in the past, going into 2025, it's something we're probably gonna be learning together as we enter 2025 as a well-staffed restaurant, doing high volumes, but lapping being a well-staffed restaurant and with growing volumes. So what we're learning is 50% kind of the still the expectation or maybe something lower can be had. Our operators are gonna be focused on doing what's right for their restaurants, and they know being well-staffed helps them, helps them grow. Certainly, our turnover continues to trend in the right way, and that should help with training and tenure matters. The more experienced you are, the better you are at the job. So hopefully we can continue to improve our productivity, but we'll be learning that together in 2025. Sounds good. Thanks, Michael. Congrats to the team. Thank you. Your next question comes from a line of David Tarantino from Baird. Your line is open. Hi, good afternoon, and congrats on such delivering such strong momentum in your business. I wanted to ask about unit growth. I think the guidance for next year is 30 openings, which is for company operated, and it's similar to what you did this year. And I guess, as the numbers creep up, I think in the past, you've talked about kind of a 5%-ish unit growth number, but as the base starts to get bigger, at 30 openings, you're gonna start to fall below that. So I was just wondering, kind of what is your philosophy around unit growth as you look even beyond 2025? Is it to stay at the mid-single digit or 5% level, or is that gonna come down as the base scales? David, this is Jerry. I don't think we've ever really targeted a percentage. We've always looked at the number of openings for Texas Roadhouse, Bubba's, and now as we add Jaggers into the mix, about doing it right, and balanced for our operations. I think we will continue to evaluate whether what is the right number for us. To do it right, you have to send 25 trainers out on the road. You got to hire 200 + people. We're opening at really high volumes, so we've got we believe that if we continue to do these openings properly, that they hold their sales and our operational focus. If we stretch that too far, then I think that risks that. So I guess from my standpoint is, I'm very comfortable in that thirty-ish range as we go, and I would like to climb up a little bit, but I'm not trying to hit a percentage. I'm really just trying to do it right for our operators and for our guests, from a business perspective. It's kind of our philosophy. And David, it's Chris, and always good to talk to you. You know, don't forget, we're adding 13 via acquisition this year, so it's a 43-unit increase this year. Yep, understood. Thank you very much. Thank you for the kind words. We appreciate you. Your next question comes from the line of Peter Saleh from BTIG. Your line is open. Great. Thanks, and congrats on another great quarter. Just maybe a question and then one clarification. Just on the question in terms of the same-store sales trajectory, you know, September and into beginning of October, there was some pretty nasty weather, but that doesn't seem to be at least in the Southeast, that doesn't seem to be reflected in your comp numbers. Did you guys see any impact on weather? I know you guys don't like to talk about it, but with 9.3% and 8.3% comps, just wondering if you had any sort of impact on weather at the end of September and beginning of October. And then I just had a quick follow-up. Yeah, Michael may clean this up for me. It's Chris here. But basically, what we've seen and we had. You're correct. There were a number of storms that came through. We've seen we had stores closed for a couple of days. We were able to get them, most of them reopened, if not all of them, reopened very swiftly. And then we experienced a bounce back at those stores. So we got, you know, there were sales lost for the couple of days we were closed. We saw more people coming to us, first responders and people in the community, looking to dine with us. And so you're right, the numbers are, you know, look very consistent, but there definitely was impact, but it was masked by the fact that, hey, if we lost a couple of days, we got some nice bounce back in the weeks following. Yeah, and I'll just chime in for a second on that. You know, obviously, in the big machine, it may not look like it impacted, but to our owner-operators that are in those communities and affected, you know, we just, our thoughts go out to them and how hard they work to get their restaurants back open and take care of their communities. So I just wanna say thank you to the operators and the partners out there, 'cause it did have a significant impact in many of our communities across that region of the country. And we just continue to think about them and be here to support them. Great. And then just as a quick follow-up, I just wanna understand the message on the labor hour growth into next year, into 2025. Michael, I think you said, you know, potential to be, you know, 50% or below. You know, the last, I think, couple quarters, you've been below that 50%, hour growth versus traffic. I'm just wanna make sure I understand that we're not talking about a situation where you're growing labor hours, you know, above 50%? Just trying to understand the message. Maybe I'm missing something there. Thank you. Yeah, you know, no real message there. It's more of, you know, we don't have a, you know, a labor model that we push down to the restaurants. They are going to staff the restaurants they feel the way they feel is appropriate, and certainly, they are not looking to use more hours than they need. But, you know, they do know that staffing the restaurants well helps them grow. And, you know, some of the benefit we are seeing this year is because of, you know, what we're lapping from the previous year. And, you know, so we'll be well-staffed, going up against well-staffed, and doing higher volumes than we've ever done before. All I think we're trying to say is you know, we'll be learning together what that ratio may look like, and we can't sit here today and tell you it's gonna be 30% or 40%, but we're also not trying to tell you that it's gonna be something above 50%. It's, it's something we'll be learning as we go. Thank you very much. All right, next question comes from the line of Jeffrey Bernstein from Barclays. Your line is open. Great. Thank you very much. Just a bigger picture question. Jerry, just wondering, as you've kind of traveled the countryside, and Chris, it sounds like you're along for the ride. I'm just wondering, you mentioned in the press release that from a macro perspective, it's an extremely competitive environment. Just wondering what you're seeing or what you're learning from your operators. Maybe is there any response you guys implement when you see more aggressive competitive environment to protect your own share? Again, doesn't seem like you're seeing much impact, so just curious in terms of, you know, some qualitative commentary behind what you're seeing in terms of an extremely competitive environment, whether it's in the steak category, whether it's by maybe local operators. Is there anything we should make of the fact that the comp slowed from 9.3% in September to 8.3% in October, or is there anything to make of that, or is that more just comparisons and perhaps a little bit of weather? Just trying to clarify. Thank you. Hey, Jeffrey, I'll. Hey, number one, thank you very much for that. I will tell you that from talking with the operators, again, we feel like our operational excellence focus, our environment that we have, our fresh made food and all of the things that we do is just what we need to consistently do and operate at a high level and to, you know, do all of the things that a great restaurant does, which is greet people, get them sat, make sure they have a great experience, and thank them for coming into our business and supporting us as a locally owned and operated operation. So, you know, we just double down on everything that we do, and we try to do it a little bit better. You know, you're trying to create an experience that people absolutely want to reward you for. So I think from a bigger picture standpoint, you know, the things that we're talking about with the partners are a lot of internal stuff and things that we've got going on. But when it comes to the operation and creating a guest experience, man, we are laser focused on our food, our service, and our community partnership. I agree with all that. And Jeffrey, before Michael gets you in to talk about the sequential performance, I just wanted to add to Jerry's comment. When you know, when we do talk with... And it could be an individual situation. I know you're aware that we have our local store marketing. We have. We try and own the communities that we're in, and so when there's specific competition or something going on in a market, that reaction is coming from the operators in the market. They're not waiting for us to come over the top with some sort of program. They're reacting to that, and they're competing every day in their community. Jeff, this is Michael. With regards to that comp from September to October, I think what you're maybe not fully contemplating is the amount of pricing we had in the menu. In September, we still had 4.9%; October, 3.1%. So our traffic actually accelerated from something in the mid-4% range in September to in the mid-5% range in October. So we actually saw an acceleration in our traffic trends from September to October. Incredible. I didn't fully appreciate that. Thank you. And just to clarify, the 30 units that you talked about for next year, first of all, I guess that the three Jaggers are incremental to that. So we're talking about 30 core units of Texas and Bubba's, and if that's the case, I'm just wondering, roughly how many Texas and how many Bubba's would you think within that 30 for next year? Thank you. Yeah, it, you know, it'll probably be. You know, again, that number could move a little bit, but I would say in the mid, maybe at the 20 to 20-ish on Roadhouse, and then, obviously, the rest will be Bubba's and Jaggers, and- Yeah, and Jeff, just to clean that up a little bit, we had said approximately 30 restaurants across all the brands. When we talked about the three Jaggers, that those were franchise locations. So you may see a couple Jaggers, you know, as Jerry said, probably low 20s on Roadhouse and, you know, six, seven, eight Bubba's in there. Thank you. Thank you. Your next question comes from the line of Lauren Silverman from Deutsche Bank. Your line is open. Thank you, and congrats. I wanted to ask about comp, the 8.5%, incredibly impressive. Have you seen any changes in consumer behavior, differences across regions, day parts, anything to unpack there? And then a follow-up on the quarter to date acceleration, it seems like traffic, I guess, is closer to 5%, which is better than you guys have done all year. What do you think is driving that momentum building? Hey, Lauren, it's Michael. I would say as far as the third quarter, you know, and you know, kind of any regional differences, I would tell you, you know, north, south, east, west, we saw strong comp performance. Nothing that would say one area was meaningfully outperforming another or anyone was lagging. So, you know, very strong performance, you know, not only regionally, but by day of the week and by shift. So very strong performance there. And you are right, our comp in October include, you know, over 5% traffic growth, and, you know, that is a little bit of an you know, seems to be a little bit of an acceleration. I think it's just a continuation of us, you know, our operators doing what they always do, and making sure that we are providing a, you know, a legendary experience, and being well-staffed and, you know, priced accordingly, and delivering on, you know, on our promise and that consistency that we've always delivered to them. We're being rewarded for that. Great. Do you think there's anything we should consider in terms of compares getting tougher through the fourth quarter? I mean, nothing, you know. You know, we'll see how it all, you know, plays out and, you know, you know, the comps, you know, are, you know, we're strong in November and December, but whether it's, you know, looking at one year or multiyear to maybe see what the right trend is, I'll kind of leave that up to you. But we know we're ready to serve the guests, and we believe there's a lot of demand out there for our product. Great. Thank you guys so much. Your next question comes from a line of Jeff Farmer from Gordon Haskett. Your line is open. Thank you. Just following up on Jeff's managing partner tour question, I'm curious, what were some of the more interesting or, I guess, unexpected things you guys heard from managers, and specifically as it relates to pricing power, which you touched on, but also demand across the customer income levels? Well, our conversations are, like I said, a lot of the internal. We've got a couple of things that are going on that we're trying to adjust on the system side. You know, pricing, we've already had those conversations, so we haven't seen any or heard any negative on the 0.9% that we took at the end of the, or the start of the fourth quarter. So I think that most of the conversations are really good right now, which is because obviously we're having some real success and exciting to share that with the operators and they love what they're doing. They just wanna keep getting better at it. Okay. Thank you. You're welcome. Thank you. Your next question comes from the line of John Tower from Citi. Your line is open. Hey, thanks for taking the question. I appreciate it. Maybe just on the inflation outlook for labor next year. Chris, I think you had mentioned that state mandated increases is gonna add about a point and a half to that of the 4%-5% that you outlined for 2025. Just curious if you could get into what the balance of that will be driven by and specifically in the context of looking across the landscape, it seems as if maybe starting wage rates have, you know, inflation in that has maybe come down a little bit, certainly versus what we've been seeing in recent years. So just kind of curious if you could flesh out what is driving the balance of that increase. Yeah. Hey, John, it's Michael. I can, you know, maybe, you know, you know, do a little bit there. And yeah, I mean, there is certainly still an expectation that we will see underlying wage, you know, pressure. You know, and, you know, as a people first company, we're gonna wanna make sure that we are paying our people well and compensating them for, you know, the hard work they are doing. And, you know, we'll see whether new hire rates change. But again, you want to reward your, you know, your performers and so we factored, you know, that into the numbers. Obviously, we talked about the mandated increases. You know, the acquisition will add a little bit of, you know, pressure with adding some California stores into, you know, the mix there. And, you know, those are, you know, probably, you know, the lion's share of what we're expecting there. Okay, cool, then and maybe just pivoting to CapEx, you know, the number for next year. The number of stores sitting similar to this year, at roughly 30, and I think you're gonna have more of the KDS development. So is that kind of the difference between the, you know, $360 million-$370 million this year and the $400 million you're targeting next year? Hey, John, it's Chris. Yeah, you have it right there. It's... And again, we're focused on putting money into our stores. You know, some of them are getting older. We wanna make sure that they look fresh, that they're inviting to our guests, and they're great places to work as well. And then we are investing, as we discussed in previous quarters, we're investing in bump- outs, kitchen expansions and other things that will provide value as well. And keep in mind, those investments are in stores that are doing well. So you're expanding somewhere where you already have great business, and you're just creating some capacity there. So we feel like that increase makes a lot of sense. Got it. And then just lastly, curious if you could add any color on how the Bun N' Butter rollout is going at Walmart so far. Well, thanks for asking. It's still pretty early. Indications are, it's exceeding our expectations. But it's still, all the retail business is really to drive awareness of our brands and have some fun with it and see if it's a demand on the consumer side. We've learned a lot since we've kind of gotten into that segment over the last several years, but it's still pretty new. But you know, it's exciting to see that there is still a demand for anything inspired by Texas Roadhouse. Awesome. Thanks for the questions. Thank you. Your next question comes from the line of David Palmer from Evercore ISI. Your line is open. Thanks, guys, and congrats. Wanted to ask you about pricing versus wages and how you're thinking about that. And in recent years, I was beginning to think that you would generally price towards wages, you know, rather than towards food inflation cycles. That you would sort of price to the consumer, that would be sort of represented by the type of wages that you'd be paying your own people. This next year, it feels like we're navigating towards the twos type of price increases, and your wage rate will be going up roughly twice that level. So, I'm wondering if you're consciously thinking that way, that you're either making an investment in labor right now, the ways that you think are appropriate or maybe opportunistic, or are you making investments in value to the consumer that reflect some realities that you see out there? I'm just wondering how you're thinking about that. Yeah. Hey, David, it's Michael. I think you kind of hit it on the nose there at the end. We are certainly, you know, viewing this as we are investing, you know, in the guests. This is not any kind of leap of correlating the pricing that we're taking to the level of commodity pressure that we may be feeling. You know, would probably, you know, not be an accurate, you know, thought. You know, those pricing discussions we were having were happening well before we had a, you know, current picture of what we expected for 2025. The pricing reflects what we think was, you know, and, you know, with collaboration of our operators, what we all think is appropriate for the business right now, and, you know, making sure that we, you know, continue, you know, to deliver on that value proposition that has been so important for us for 30+ years. Yeah. Part of the reason I'm asking about that is in the past, call it, you know, seven to 10 years, there have been eras where you were either investing in hours, and I think a little bit before COVID, and then you were started also doing some wage adjustments that you thought appropriate in the business, too. So, you know, you guys have been very thoughtful in certain eras about your investments and things, and maybe this. There's something opportunistic. I mean, your hours are so efficient versus in a year-over-year basis. There's maybe something of a good timing in terms of the wages outpacing what is typically what we're seeing out there elsewhere. So I'm wondering how you're thinking about that. Yeah, again, we're, you know, we're just running the business the way we always have, really, you know, you know, no change. You know, we're gonna do what's right for the operators, what's right for the restaurant, and what's right for our guests. And if that means adding people, you know, we want them adding people. But we're going to always be very careful on the, on the pricing side and, you know, erring on the side of making sure we're screaming value. Thanks, guys. Thank you. Your next question comes from the line of Chris O'Cull from Stifel. Your line is open. Hey, guys. Thanks for taking the question. Jerry, it looks like your, the newer Bubba locations are running at significantly higher volumes than some of the older store cohorts. I realize you only have three stores open in the last six months, but is there something special about those stores or are higher volumes from new units something we can expect from Bubba's? Thank you for noticing. We appreciate that. You know, I think it could be somewhat of where they're opening at, but we are very happy with the success that we've had in our new store openings over the last 18 months, and it does seem to be elevating. You know, again, as we continue to look at opening these stores with the right amount of support and with operational excellence in mind, that we're executing at a higher level. There's definitely a demand when we open the store, so the more efficient that we can be of getting folks in and getting them taken care of and having a memorable experience could be rewarding us from that side of it. So it just tells me we need to continue to put the effort into getting these openings done and executing at a high level because the demand is there. And so that's very exciting news from our standpoint. Great. Thanks, guys. Thank you. Your next question comes from the line of Andrew Strelzik from BMO Capital. Your line is open. Hey, good afternoon. Thanks for taking the questions. Just two quick ones from me. Can you share how the volumes and margins of the stores that you're acquiring from the franchisee, how those compare to the rest of the company stores? And then my second question, and I feel a little silly asking this, I think I know the answer, but you know, we've seen most of the delivery holdouts, I guess, have evolved their thinking around third-party and found structures that work for them. Has your thinking evolved at all, or do you think there's ever a structure that you could find that might make sense for your brand? Thanks. Hey, Andrew, it's Michael. I'll address the first one, and then I'll let Jerry chime in on the delivery. As far as those acquisition stores, you know, they actually will drive, you know, some nice volume increases for us. Our average weekly sales, as you're modeling that for 2025, you probably wanna add about 0.5%, evenly mixed between traffic and check growth coming from what those 13 stores will deliver volume-wise. And they're probably about neutral, you know, to margins, maybe a slight increase in margin dollars coming from them. And then, on the third party, you know, we do utilize it at Jaggers. We also have it in most of our Bubba's stores and one Roadhouse in New York City, that it does make sense in. So I think our stance is still the same. We will continue to evaluate if it will, at this time, add any value to the business. We're comfortable where we're at now, and, you know, we are paying attention to what's going on out there at all levels of third-party involvement. But right now, I feel very comfortable with us not having to rely on that to grow sales. We really like to try to do it through our dining room and through our to-go business first. Great. Thank you very much. Thank you. Your next question comes from the line of Rahul Krotthapalli from J.P. Morgan. Your line is open. Good afternoon, guys. Thanks for all the color today. I wanted to touch back on the steak consumption trends. It was discussed the demand side of the equation was one of the factors for beef inflation outlook. How do you internally think about the risk of grocery pricing or discounting for beef products in this environment? And in case at the margin, if it becomes more attractive for consumers to cook steak at home? And I have a follow-up. Yeah. Hey, Rahul, it's Chris, and I'll take the first before you get to your follow-up. That's absolutely what I was talking about. There is a retail demand element to this that just wasn't there at least so far this year. And part of that is we haven't seen the discounting that we might have seen in previous years from some of the major retailers particularly on cuts of steak that would compete with where we are. So, yeah, that is a risk. If they were to start that, then that would bring demand up from that cohort, and that is something we would have to think through. Perfect. And I do understand that you guys don't advertise on TV, but just from a presidential election year or a typical disruption in trends seen across casual diners, anything you guys noted in the past cycles when it comes to foot traffic trends, November, December? And then also this year, there is a shorter holiday period gap between Thanksgiving and Christmas. Is there any positive or negative impact we should be thinking about from these factors? Thank you. Yeah. You know, first, on the election, obviously, 2020 isn't gonna be much help to us in looking at any trends. But 2016, 2012, can't recall there being much of an impact from the election cycle. And we also did look back at that shorter timeframe between Thanksgiving and Christmas. I believe 2019 was the last time we had that. You know, there was a lot of noise in there, but didn't see anything significant that would say that you would, you know, we'd be experiencing any issues during that timeframe. Perfect. Thanks for the update, guys. Thank you. Our next question comes from the line of Brian Vaccaro from Raymond James. Your line is open. Hi, thanks. Just two quick ones for me, if I could. On that labor question and, and just thinking about the hours next year, can you help us frame what you're seeing currently from an hourly turnover or retention perspective? Kinda any perspective on the absolute levels or how that might compare to whatever you view as a normal level. And, and what other dynamics beyond retention and turnover sort of might cause that relationship to move higher, into next year versus what you saw in 2024? Yeah. Hey, Brian, it's Michael. I would tell you, you know, we don't share that turnover number just 'cause everyone calculates it differently. We do look at it on a, you know, 12-month basis, and it continues to trend in the right direction, below historical, certainly back to, you know, historical low levels. And so we're very pleased to be seeing that, and it just goes to show when we provide a great experience for our employees and give them the hours that they're looking for, and those in the kitchen, a calmer experience, it has them, you know, sticking with us. As far as what could cause that to change in the 2025, I don't know if I really have, you know, anything there to add, unfortunately. Okay, okay, well, fair enough. That's helpful. And I guess one just following up on the commodity outlook next year, do you expect much of a difference in your year-on-year inflation in the first half versus second half at this point? Yeah, Brian, it's Michael again. Maybe a little bit more commodity inflation in the back half of the year, probably just from the standpoint of what we're lapping this year versus last year. But nothing at this point that would say it's dramatically different in the back half of the year than the first half. All right. Thanks very much. Thank you. Our next question comes from the line of Gregory Francfort from Guggenheim Securities. Your line is open. Hey, hey, guys. Thanks for the question. Maybe just the franchise acquisition that happened, how did that come about? And, I guess, as you think about the rest of your franchise base, is that something you're looking to do more of? Thanks for that question. Yeah, we, you know, we talk to our franchise partners regularly, and they've been with us a very long time, and we started this conversation a few years back, and we were able to get a deal done through a lot of partnership and hard work, and we're very excited. You know, in a lot of these cases, it was always kind of the intention, you know, 20, 25 years ago when these groups came with us. So, we were able to get the terms, we were able to get a heck of a deal for them and for us, and it just the timing worked out perfectly and how we like to see it roll out at the start of 2025. It's a very, very exciting transaction for us at Roadhouse, and we will continue to talk to others that are out there. If anything ever comes to fruition, we'll keep you guys posted. Thank you, guys. Appreciate it. Thank you. Our next question comes from the line of Jim Sanderson from North Coast Research. Your line is open. Hey, thanks for the question. I had a couple of quick follow-ups on capital expenditures. What do you expect build-out costs to be in 2025? Are they relatively stable or any type of relief, so to speak, relative to past inflationary years? Yeah, I think they're relatively stable. I think you're just looking at a normal kind of a year in terms of build-out of the buildings. All right. And for fourth quarter, I don't know if you tracked this or not, but any feedback on whether your advanced bookings on holiday parties or special banquet events in the fourth quarter are where they should be, where you would expect, or potentially any pickup in demand that you could comment on? Hey, Jim, it's Chris here, and we don't really play in that game, so that's not gonna be something that we see. At all. All right. Thank you very much. That concludes our question and answer session. I will now turn the call back over to Jerry Morgan for closing remarks. Thank you very much. You know, appreciate all your time and being with us tonight. And, thank you for all of those that spoke out on our positive quarter. So with rowdy enthusiasm, I bid you a good night. Let's go, Roadhouse! This concludes today's conference call. Thank you for your participation. You may now disconnect.