Texas Roadhouse Inc
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Texas Roadhouse Inc
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Good evening, and welcome to the Texas Roadhouse First Quarter Earnings Conference Call. Today's call is being recorded. [Operator Instructions]. I would now like to introduce Ms. Tonya Robinson, the Chief Financial Officer of Texas Roadhouse. Thank you. You may begin your conference.
Thank you, Warren, and good evening, everyone. I hope this call finds you and your families safe and secure as we move through these difficult and trying times. By now, you should have access to our earnings release for the first quarter ended March 31, 2020, and our COVID-19 business update. It may also be found on our website at texasroadhouse.com in the Investors section.
Before we begin our formal remarks, I need to remind everyone that part of our discussion today will include forward-looking statements. These statements are not guarantees of future performance, and therefore, undue reliance should not be placed upon them. We refer all of you to our earnings release and our recent filings with the SEC. These documents provide a more detailed discussion of the relevant factors that could cause actual results to differ materially from those forward-looking statements, including factors related to the COVID-19 outbreak.
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 Kent Taylor, Founder and Chief Executive Officer of Texas Roadhouse. Following our remarks, we will open the call for questions. Now I'd like to turn the call over to Kent.
Thanks, Tonya, and hello, Roadies, shareholders and interested folks. Hopefully, you all have all read my Founder Letter and have seen our earnings release. Just wanted to thank our employees for all they are doing to feed America, and specifically, to do it in a safe way. I am proud of how diligent our teams have been on prescreening and taking the temperatures of our employees, keeping our teams and guests safe as we can as possible.
In addition to social distancing, cleanliness and continuous sanitizing in our restaurants, all employees, regardless of their position, are following strict guidelines, including wearing gloves and mask. We instituted these measures, along with temperature checks early on. Thankfully, as usual, we chose to lead the pack on safety versus following. As we transition back to full-service dining, guest seating will follow state capacity guidelines and safety, as always, will remain our top priority.
In the near term, our primary business focus is our curbside and drive-thru business, where we are offering not only regular items, but also family packs and ready-to-grill steaks. In just a short period of time, our To-Go business has grown by approximately 575% from around $8,400 per week in January to over $56,000 in the last week of April. Make no mistake, Texas Roadhouse is open for business, and our managing partners are working hard to serve their communities. Based upon the sales volumes they are generating, many of our restaurants are bringing folks back to work, along with actively hiring new employees.
We know how important it is to take care of our people. Through April, on top of their earned wages, we have provided our hourly restaurant employees with approximately $17 million in additional pay and benefits. Besides our Roadie relief payments to show our appreciation for their commitment, we have also provided sick pay, early access to vacation pay and covered portions of their insurance premiums.
Additionally, all of our restaurant managers continue to be paid salaries and bonuses, and we have not laid off or furloughed any full-time Support Center employees.
Starting this week, we are beginning to reopen our dining rooms in states that are lifting some restrictions. Today, we are reopening the dining rooms of approximately 25 company-owned restaurants, with limited capacity. And by the end of the week, we expect to have over 125 company-owned restaurants offering dine-in service under the same limited capacity model. We are purposely taking our time when reopening our dining rooms as we want to ensure that we are transitioning in the safest and most appropriate way.
I cannot be prouder of the entire Texas Roadhouse family and our vendor partners, who have been part of our extended family and have worked really hard for us during this time.
The incredible efforts of our operators and the Support Center teams enabled us to rapidly transition nearly 600 full-service restaurants to To-Go-only operating model. And though - and through their hard work and entrepreneurial spirit, our managing partners have grown average weekly sales with some of our restaurants currently doing over 100,000 per week. Thanks to the selfless efforts of our leadership team, each and every Roadie at the Support Center, our operators have had the time to focus on the safety of our staff, growing sales and the day-to-day operations of their restaurant. And to date, our restaurants have had minimal food supply issues as our supply chain has remained intact, as our vendors have been true partners and have responded quickly to our request and needs.
Again, thank you to the entire Texas Roadhouse team for their commitment to the business and continuing to provide service with heart, 6-feet apart. Now Tonya will provide you with our financial update.
Thanks, Kent, and let me begin by saying that my update will be different than our typical quarterly update. I will briefly touch on first quarter results, but we'll spend most of the discussion providing an update on more recent and relevant financial trends and conditions. If you have modeling questions regarding the first quarter, we will be happy to have a separate call with you to discuss those details.
So let me quickly touch on the results for the first quarter of 2020, which after a strong start, were negatively impacted by the COVID-19 outbreak in March. We reported revenue down 5.5%, comprised of a 10.8% decrease in average sales volume and store week growth of 5.3%. We also reported a year-over-year decline in diluted earnings per share of 67.1%.
Comparable restaurant sales for the quarter decreased 8.4%. And by month, comparable sales increased 8%, increased 4.2% and decreased 29.7% for our January, February and March periods, respectively. For the first quarter, restaurant margin dollars per store week declined 39.1%, and restaurant margin as a percentage of total sales decreased 576 basis points to 12.1% as compared to the prior year period.
I want to provide a little more color on restaurant margin that we typically wouldn't give. Margins as a percentage of sales were 17.8% for the first two periods of the quarter, which was up approximately 65 basis points versus the same period last year, while margins were negative 0.4%. As we stated in our release, we incurred approximately $10.7 million of labor cost in March related to Roadie stimulus relief pay and additional benefits to our frontline employees. Additionally, unrelated to COVID-19, we incurred $2.3 million of cost to adjust reserves on our group health insurance program for the first quarter. We ended the first quarter with $231 million of cash, which is up $123 million from the end of 2019. The primary drivers of the increase are $22 million of cash flow from operations and the drawdown of $190 million on our revolver, offset by $45 million of CapEx, $25 million of dividends and $13 million of share repurchases.
As I move on to an update of our most recent financial trends, I will first echo Kent's comments regarding the efforts of our people. Texas Roadhouse's strength and success comes from our people and their passion and approach to running the business. And this strength also applies to our financials and our history of focusing on top line sales growth first and maintaining a conservative balance sheet second. This allows us to run our restaurants the right way and to withstand unexpected situations just like the one we are now facing.
Our financial resources have provided our operators the flexibility to appropriately staff their restaurants and time to grow To-Go sales to their current levels. With average weekly sales at their current level of over $55,000, our restaurants, on average, are cash flow positive as it relates to food, labor and the variable operating cost of running the business. While comparable sales in April were down 46.7% from the prior year, we are encouraged by both the overall level of sales and the sequential sales growth that we are seeing. As of today, all but 2 of our domestic restaurants are open.
We have taken several steps to ensure that our business is and remains well funded. In addition to the drawdown on our existing credit facility, we are in frequent discussions with our bank lenders regarding access to additional funds. We suspended dividend payments after March 27 and have also suspended all share repurchase activity. Our executive team, leadership team and Board of Directors have foregone some or all of their cash compensation for the remainder of the year. Additionally, Kent has made a personal donation of $5 million to Andy's Outreach, our Roadie assistance fund.
Finally, we have put a temporary hold on the opening of new restaurants and have stopped almost all construction related to new stores. We're finishing construction on 9 locations, where construction was nearly complete, and a few of these restaurants could open in the second quarter. For the rest of the locations, we will be ready to restart construction and set opening dates as soon as conditions permit.
Our cash burn for the month of April was approximately $30 million, including approximately $14 million in capital expenditures. We finished April with approximately $200 million of cash on hand. Based on what we have seen in the past several weeks, we estimate that going forward, under a To-Go operating model, our cash burn would be approximately $5 million per week. This estimate assumes a minimum amount of CapEx spending, along with the benefit of tax deferral under the CARES Act. We do not yet know how this burn rate will be impacted by the gradual reopening of our dining rooms. But based on the momentum our operators created under the new To-Go model, I look forward to seeing what they can do with a combination of To-Go and dining room sales.
Given the unprecedented nature of the impact of COVID-19 on the overall economy and the lack of clarity on the time frame for the reopening of all of our dining rooms, we are unable at this time to provide financial guidance for the remainder of 2020. If conditions permit and the outlook for the business becomes clearer over the next several months, we will provide updated guidance for the back half of 2020 on our second quarter earnings call.
That concludes our prepared remarks. Operator, please open the line for questions.
Well, I guess, we don't have any questions.
We're just going to hold a moment to wait for the lines to be open for questions.
And our first question comes a from Brian Bittner from Oppenheimer.
Okay. Appreciate your letter, Kent. Tonya, I wanted to ask a question about just the cash flow and the margins of the stores. I appreciate the comments that you gave on cash flow positivity of the store base on current AUVs. But can you give us maybe an idea of what you think your AUVs are going to need to be in order to breakeven at the restaurant margin level when you move to this new limited capacity format? I know it's probably a hard question to answer because the mix of the business will change and the cost of the business will change. But can you just try to take a stab at how you're thinking about that?
Sure, Brian. You're right. It's very difficult to do just given the mix change and things like that. And a lot of it has to do, too, with just how much labor will be involved. We've taken on some additional labor costs under the To-Go model. One of the things we've done - we did when we started this in mid-March was took all of folks who were on a sub-minimum wage to minimum wage that were working out in the parking lots and things like that. So some of that will change a little bit as we move back into the dining room, so some of that labor will change. Really, when we were looking at more from a breakeven was saying to cover - kind of to cover all the costs of the business, not really just at the restaurant margin level. So we kind of included G&A and some other things in that. And we feel like if stores are running about at $70,000 a week from a sales perspective that we get really close to that cash flow breakeven point from a G&A perspective and things like that. So covering all of those types of costs from where we stand now. Of course, it's a little of reading the tea leaves. We continue to see cost of sales be a little bit higher. We continue, again, to feel labor to be a little bit higher. We have tried to do a good job of going in on our operating costs and turning things off that we didn't need. We'll be flipping switches there to turn some things back on once the dining rooms reopen. So it's going to be tough to tell for a little bit. But that would be my best estimate right now.
Great. And just to clarify, do you think breaking even at the corporate EBITDA level requires $70,000 of weekly sales per unit? Just to clarify that.
Yes, that is about where we are from a P&L EBITDA perspective. And I will mention, I believe when I was breaking out margins, I left out the word March. So March, just to clarify, March margins were down - were 0.4% negative.
And our next question comes from a David Palmer with Evercore.
Just a question on when you open up the dining rooms, I understand you will be doing that at a lower capacity. What is the sort of incremental sales that you will need to do to make that a margin neutral effort? I would imagine you will be thinking about a certain minimum there. And can you describe what have been sort of the - on the run adjustments that you've been making to how you serve customers and to keep them safe and your employees safe as you go through this?
This is Kent. I guess, on the safety thing, all of - as we have been doing for over four, five weeks, might be six now, actually, we've had all the employees wearing gloves, mask, both inside working, 6 feet apart and outside delivering To-Go, curbside and ready-to-grill to the guests that come into our parking lot. We've had double drive tents. We've had people in cell phone lots that will call, and then they'll come get their To-Go food.
And then when you transition to inside the restaurant, it depends - like in Alaska, it's a 25% capacity, where you're maybe seating every third booth. In other states, it could be where you're serving every other booth. We have put some partitions up to raise - the lucky thing for us is we have booths, and so that we can put these plastic glass, wood partitions around the booths to kind of raise the level of protection behind everybody. So that's kind of the benefit of having booths that we have in our restaurants and have had for years. And then we have also - we've only been open a few days, but we have been amazed at how strong the To-Go and family packs have been as we have transitioned, specifically in Alaska, to bringing people inside the restaurant.
Yes, David. Just to add on to that. I'll tell you, we don't have a lot of data right now, having only two restaurants in Alaska open for 4 days with that limited capacity in the dining room. But what we have seen is they haven't seen a big - they haven't really seen a big decrease in To-Go sales, and they're getting dine-in. I mean we're seeing the guests wanting that dine-in experience even with the restrictions in place. So that certainly has been encouraging to see. Now that's 4 days, who knows, and it's in Alaska, who knows what we'll continue to see. But as Kent mentioned earlier, we're going to have a good number of restaurants today that are already open for dinner, and we're going to continue to add this week and over the course of the coming weeks. And so I feel like we'll begin to learn a lot more about kind of what that model looks like and what the trade-off, if any, might be. But right now, it doesn't feel like - it feels like all of these dine-in sales will be incremental from that standpoint.
And just following up on that. I know it's a little specific. But if you add 25% capacity or maybe 1/3 of your capacity, do you think that might add 25%, 30% to your sales? In other words, that the consumer adoption will match that capacity and you won't see significant cannibalization again of that takeout? And I'll pass it on.
I believe, yes, Tonya just said that exact same thing.
Yes. Yes. I mean, again, four days. So it's hard to read too much into four days, but it's certainly encouraging that we are seeing that right now. So I think every state will be different, every restaurant will be different. And what's been really cool through this whole process is how our operators have adapted, and they found different ways of doing things. And I think we've got a really - we came into this with an extremely loyal guest, who, I think, is looking forward to getting back in the restaurant, especially given the safety - all of the safety measures Kent mentioned that we put in place. So we're looking forward to the next few weeks to see what they bring.
And our next question comes from Dennis Geiger with UBS.
Just wondering if you guys could highlight recent sales trends a bit more? Certainly really strong momentum and from off-premise only. But can you talk a bit more about kind of what's driving the momentum? How much of it is coming from some of the initiatives that you briefly highlighted that are in place? How much is kind of from greater customer awareness of the brand's off-premise availability? And then if you can kind of just touch on any impact or benefit maybe you have seen from the stimulus checks. Anything with respect to the impact of Easter on recent weeks would be great.
This is Kent. Well, normally, Easter is slow. But obviously, with people at home, they have picked up our food. We did see a little bump that you saw in the report on the week that we had the stimulus checks. And like Tonya has said, as we've only been opening two stores four days, it's really hard to determine what the future is. So if we were to have this conversation a week from now, we would have given you a lot more information, but we didn't.
Yes. And when we look at kind of some of the new things we've introduced, as Kent mentioned, family packs, those have been very popular. The ready-to-grill steaks definitely served a great need during those months of transition. And really, though, we're still seeing a lot of it coming mainly from our menu items. A good 2/3 of it, if not more than that, is coming from the normal menu items. And then when we look at the breakdown kind of between call-in and mobile ordering or online ordering, we're seeing online ordering pretty close to 50% of the sales that we're seeing right now.
Yes, this is Kent. I think people have gotten really good at using our online ordering. And then number two, I think as people have seen how safe we are and interacting with people in the parking lot, I think based on our social media comments, I will put that at number one, to be honest with you.
And our next question comes from a Jeffrey Bernstein from Barclays.
This is Pratik [ph] on for Jeff. I appreciate the question, and I hope everyone is healthy and safe. Maybe Tonya, this one is for you. We appreciate, obviously, the difficulty in projecting out the comp trajectory. But if we kind of step back for a second, all else being equal, could you maybe provide us a sensitivity, what 1 point of comp is to your earnings or what the impact is on the margin? Maybe that would be very helpful to help us just frame how to think about it going forward.
We talked about that in the past when we kind of looked at things. And it really - that comp depends on whether it's pricing versus traffic. Obviously, you get a bigger bang for your buck if it's more pricing check related than it is traffic. So typically, we have always kind of said, if I'm remembering correctly, that it's about a 0.5 point of traffic gets you about 5% to 6% of earnings per share growth. And then if there were pricing, you could obviously double that number. But I don't know how true that is today under this environment. I really couldn't tell you. But just going back to the comments we've made previously, that's what we would say from historic churn.
Got it. No, that's very helpful. And then maybe for Kent, just maybe a little bit longer-term after the crisis is well behind us, hopefully at some point soon, how do you think about the real estate opportunity going forward? Do you expect maybe some closures in some of the smaller, weaker operators? And maybe that will give maybe someone like yourself a better opportunity to grab some pieces of real estate that maybe would not have come free prior to this crisis?
I'll be honest with you. Right now, I'm focusing on getting the next 100 stores open. I hadn't really thought that far out, to be honest with you.
And our next question comes from a Jeff Farmer.
So longer term, how do you guys see your curbside To-Go business working with your on-premise business? So will you continue to be aggressive pursuing curbside when the majority of these restaurants over the next several months are open back up to in-restaurant dining?
We're not necessarily being aggressive pursuing it. We're just being very good at delivering it and that's kind of what - I think, that's part of the reason that our To-Go sales keep increasing because we're able to basically get you in and out of the parking lot pretty quickly, pretty safely in a short period of time. And that's, to me, the success we've had with that.
Jeff, I think - go ahead. I was just going to say I think...
You've been good at delivering it. Again, from that perspective, do you - and I agree with that, but do you think that the curbside business To-Go actually broadens the meal occasions that the customers will look to Texas Roadhouse for or broaden the customer base that Texas Roadhouse had before? It seems like there's a couple of ways you guys could sort of extend the...
Oh, yes. We're going to keep it trucking. We're not pulling back. We're going to serve you outside in the parking lot. We're going to serve you inside the building. However you want it, we're going to make sure we're there for delivering that food to you.
And I think we're going to learn a lot from our guests and what they are looking for. And that's going to drive, to Kent's point, it's going to drive a lot of what we do. It's going to be different in every restaurant potentially. And we're just - we're going to be feeling it out and seeing how things play out.
But to your point, I think there is still going to be a big demand for the To-Go as people maybe are slower to transition back in. And some people just like the convenience of eating at home, I guess. So yes, we're going to be full-blown on both sides of the equation.
And our next question comes from Chris O'Cull from Stifel.
Kent, I was wondering if there's been any issues bringing employees back to work as the stores reopen? Are you needing to pay higher wages to get them to come back?
Not really. And for those that maybe are not as quick to come back, there's a lot of other folks that are not working at other places that are wanting to work for us. So, so far, so good.
Yes. And Chris, I'll tell you, I hear from the operators, where they're staying in touch with those employees that aren't working right now, and we have great relationships, which the way we treat our employees, I think, really works right now for us, too. And we've got employers - we're staying in touch with them. And they are eager to come back to work. So it's great to hear that from some of our operators.
That's good. And then have there been any opportunities to get any lease relief during this period when dine-in capacity is either closed or at least limited?
Yes. It's interesting we had some landlords reach out to us without us kind of even requesting that early on, offering that. And then we have reached out recently to some landlords just from a deferral perspective, to kind of see what our options might be from that. That was more looking at it from the perspective of not sure when the dining rooms would be reopening and things like that. As we started to see some of that, we're not as focused on that right now, pulling the trigger on many of those. So it's - anything we've done is going to be pretty minimal. Our landlords have been great working with us and taking our calls and being great partners.
But there was this one guy - oh, we won't talk about him, sorry.
And our next question comes from a Jon Tower from Wells Fargo.
So just a quick clarification, first, on March. You had mentioned down 0.4%. That was at the store level, not the EBITDA level, correct? Number one. And number two, just - Kent, I appreciate you giving us the color on the suppliers and suggesting that they're ensuring that every store is seeing the adequate levels of product. But what are you seeing with respect to protein inflation given that a lot of the spot market prices have jumped pretty dramatically in recent weeks?
Well, we have long-term contracts and a lot of stuff. We are floating and then some. I think Tonya probably can give you a little more specifics than what I might have.
Yes. It's certainly been - you can watch the markets. They've been a little more volatile as of late, obviously. In some situations, we did have contracts in place where we've been - there's been times where we've been over the spot from a contract perspective and sometimes, we are under. I think right now, we're under. And so it's just a constantly moving target from that perspective. But our vendors have been great as far as working with us on supply, making sure we can get to the stores what they need, that kind of thing. So I think that's been really important. And just to clarify, your restaurant margin question, it was March restaurant margin as a percentage of sales were 0.4% negative.
It also helps when you pay your vendors rather quickly versus those that maybe do not.
And our next question comes from David Tarantino from Baird.
I have a question, Kent, I guess, a bigger picture question about the long-term operating model of Texas Roadhouse. And I guess, the hallmark of the company has been to focus on great hospitality and restaurant experiences. And this whole circumstance over the last, I guess, 6 weeks has turned that on its head. And maybe enlighten you on the opportunity for To-Go and off-premise business. So just wondering what your thought process is on how the model could change looking several years out and whether things like delivery and other modes or channels of business might become more prominent? Just wondering your thoughts on that.
Yes. I would tell you that we're rethinking how we can better execute from a building standpoint and from how we basically deliver To-Go and curbside. As an example, we didn't really talk a lot about curbside, but I will tell you now, 6 weeks in, we're delivering curbside. It's amazing how quickly you can pivot. I think the outside curbside model is here to stay, on top of us doing some of those things that I mentioned earlier inside the building. So I think as we see the food moving outside of the building increasing and we get back to a more near-normal inside, that we're pretty excited about that possibility. But we are not, at this point, looking to hand our food over to somebody else third-party delivery.
Great. And then another question. What would you need to see to start unit growth? I know you are finishing some projects now. But when would the right time be to ramp it back up?
Basically, when we look at a positive cash coming out of the company and then what do you do with those funds? Obviously, we would love to keep growing. But we got to make sure we're taking care of business, paying our people, paying our suppliers and doing all those things and keeping a robust balance sheet first before we turn that back on.
Yes. And I think, too, David, we want to see a little more clarity from the standpoint of the outbreak and a little more understanding of the duration of can we - it's exciting to see dining rooms reopen, do they stay open, getting a little more clarity around that. Our development pipeline, we have a great pipeline in place ready. So I think if we can see all those things Kent talked about and see some stability from an outbreak perspective, then I think that's certainly going to help us make that call.
And our next question comes from Andrew Strelzik from BMO Capital Markets.
Two questions for me. The first one, I was hoping you could comment on Bubba's comps and margin trends, if you've seen those diverge from the Texas Roadhouse brand at all in April and March. And then in terms of this capacity-constrained environment, I'm curious how you're thinking about balancing the communication to customers, transitioning back to dine-in while still not losing all that To-Go business, is that a concern at all?
Sure. Thanks, Andrew. I'll take the first part of that question. You definitely could see the value of the length of time Texas Roadhouse has been open and how we have built such a great, long story - just loyal guests. And that really helped us a lot from a Roadhouse perspective, and helped us be able to pivot quickly, and people were looking for that experience.
I think on the Bubba's side of things giving the newness of that restaurant, obviously, it's going to depend on stores, 28 restaurants open still. So it depends on what store you're looking at. But stores that are newer, they're going to struggle a little bit more. I think that probably is pretty much what we would expect to see. But I can tell you, though, that team is working really hard. They're looking at a lot of different options with their burgers and pizza, opportunities on drinks and things like that in certain states. So they've really been trying to take advantage of those opportunities. And I think it's just going to take them a little more time to build that business outside of the business versus Roadhouse. It was a much easier transition with just the loyal guests that we have.
With that said, our busiest Bubba's is our newest store.
There you go.
There you go. As far as your other question, I've got quite a few, which I call my people that think outside-the-box, I actually call them something else, but I won't say it. That they're going to be trying some various things in the next couple of weeks to expand our possibilities for sales. So stay tuned.
And we have our next question from Peter from BTIG.
Great. Kent, I wanted to ask about your thought process on the dayparts of Texas Roadhouse going forward. I know a lot of your restaurants have been opening a little earlier and offering some lunch curbside To-Go. Are you thinking about lunch differently now as you go forward? Or as we reopen some of the dining rooms, are we going to strictly go back to a dinner-only type concept?
No, we're going to stay primarily dinner only. I will tell you that the ones that have offered some lunches haven't been that exciting, to be honest with you, as you're not seeing the office buildings full or the shopping centers or malls full that normally drive that type of business. So no, we will stay true to who we are. On the hours of operation, we'll get a little crazy with some of the other things as we've chatted about before.
So just to be clear, so you'll go back to the normal operating hours, but you will push a little bit harder on maybe curbside or the To-Go business?
That's correct.
And our next question comes from a Jared Garber from Goldman Sachs.
This is Jared on for Katie today. Most of my questions have actually been answered, but I wanted to just ask a quick one on the weekly comp trends. So it looks like the last week in April didn't really see much of an acceleration, in fact, it decelerated a bit. Just wanted to know if there's anything we should think about there. We've seen some of the industry-level trends that show some relatively steady acceleration over those weeks. So I just wanted to know if there's anything particular that we should think about in the last couple of weeks of April.
This is Kent. We were - basically we were on the upswing. And then the only week we had slightly softer was that week after the checks came out. If you would like to know about any sales since then, you have to wait 3 months, sorry.
All good. And then just one quick question as it relates to maybe a couple of the topics we've discussed. But given the menu difference between Bubba's and Roadhouse, is third-party delivery something you guys would think about doing for Bubba's as you maybe look to expand that business going forward?
Not at this point. We're just trying to get them reopened, and so we're not really thinking about it at this point. But you never know.
And our next question comes from a Brian from Raymond James.
You mentioned looking at ways to maximize store margins. Could you give us some more color on where you see opportunities there? And did you start to see some improvement on store margins in April? Maybe you could give a little color on how that compared to March.
So some of the things, Brian, were just pretty simple things. It's like, okay, we're not using the TVs in the - inside the dining rooms. Let's turn off that service. Let's think about the linen service. Just really going through the list of cost and saying, what can we kind of hit pause on. And we worked with a lot of vendors to be able to do that. They were very open to that and understanding of that. So that was great to do. And so we'll be flipping some of those switches back on. Obviously, labor is a big piece of it. So that one, we're making a bit of an investment on, and we're okay with that, making a bit of an investment on labor because we do want to keep people working and we want to set ourselves up very well as these dining rooms reopen to be staffed appropriately and doing the right things for our employees. So and yes, we've made some relief payments and covered off on the health insurance benefits, in some cases, all those things we mentioned before.
So cost of sales, really not as much opportunity there perhaps. That kind of is what it is based on what you're selling. I guess we did see cost increase a bit from an operating perspective with To-Go supplies. Obviously, as you can imagine, when you're doing all To-Go, you've got a lot of supplies running through there. So that is - it kind of works against you from a restaurant margin perspective as we have the dining rooms reopening and we're increasing sales from that perspective, that will help offset some of that impact from those To-Go sales. Outside of that, I can't really think of anything else I would mention. We continue to see credit card fees go up because we are seeing more use of credit cards for payments versus cash. That's not too surprising in this environment. And utility cost day, that's another big piece of our operating costs. This came down a little bit without the use of the dining rooms, not too much though. So pretty - not very impactful at all. Those are probably the ones that I would call out more than others.
Okay. And then sorry, if I missed it, but on the weekly burn rate, what's the weekly G&A cost embedded in that $5 million number you provided?
The weekly burn from a G&A perspective probably runs right around, I would say, around $3 million, $4 million - $3 million is probably about where we are. You've got payroll in there. As we mentioned, we haven't had any layoffs at the Support Center. So I think it runs around $2 million, $3 million with some other costs in there. Travel has come down. We may see that start to ramp up a bit. I think it will still take some time for that to increase. Payroll really is the bigger piece of that. And that does include RSU, which is a noncash cost. So that number is in there also just from a total G&A cost perspective.
And our next question comes from the line of Andy Barish from Jefferies.
My questions have been asked and answered.
And our next question comes from Mr. Bob Derrington from Telsey Advisors.
Yes, that's fine. Close enough. Kent, I'm curious, the value you all offer with your family packs is, I guess, from a consumer standpoint, terrific. I'm just - as well as the ready-to-grill steaks and meals. How do the margin contribution compare to your regular menu? Are those things that you'll consider to keep on the menu going forward? Are those really higher cost, then you may ultimately wean some of those out?
Yes. We debated that a bit. And as we saw people in America not working and still obviously got to eat, we made the decision to offer some really crazy low prices to take care of America, call it. And yes, those prices will gradually go back to levels that will provide a little more profitability. But we kind of said, "Hey, while people are not working, we're going to take care of America and not get as hung up on the margins." And as people start to go back to work and we're starting to feed people inside, you will see a more normalized pricing structure. But that's kind of how we felt.
From a consumer standpoint, believe me, I really appreciate the value of those. When we think about Bubba's, Bubba's has, as a bar, a higher alcohol component. Is social distancing a bigger issue for the concept relative to Texas Roadhouse?
Not really. If you look at the dining room side, we also are mostly all booths like Texas Roadhouse where we can put up the partitions. But you are correct. On the bar side, when you think of bar stools, then obviously, we won't have as many bar stools. But the unique thing about Bubba's is 2 of the 4 sides of the bar have garage doors. And as we enter the summer months, we can lift those garage doors, get air flow through there. And so it will almost be like you're eating outside, and we can always, at night, in certain locations, put the heaters on that we have inside so it will actually provide quite a bit more fresh air for those on the bar side that will primarily be still seated in booths. And then we'll have - because we have booths on two sides of the four sides of the bar. So we would - say, if you eliminate a few tables to create some more spacing plus the partitions, plus the garage doors up, then you actually have a more of an outdoor space.
Great. And last question, if I may. On alcohol per se, I know there's another large casual dining chain that does margaritas To-Go, et cetera. Is that something that you currently do, adult beverages To-Go at Texas Roadhouse? And is that...
Yes. Sorry about that. Yes, go ahead, finish.
Well, and I'm just curious, is that something that you do at Bubba's? Or would you consider doing if you don't?
No. We have - in the states that allow it, we have been doing that both at Bubba's and Texas Roadhouse during this time period.
And our next question comes from a Mr. Nick from Wedbush Securities.
I'm just wondering how much visibility you do have internally with regard to the cadence of reopenings. Is there an actual set time line in terms of how many stores are going to be opened by the end of May? Middle of June, et cetera?
Well, we've got the directives from the states, and then we typically lay back a week before we open just to kind of see how things are going within the local communities, figure ways to open in a safer way. And so it really depends on what the states are allowing or not allowing. And then we, as an abundance of caution, are always a few days to a week behind everybody else.
I think...
In terms of - sorry, go ahead.
Oh no, I was just going to give a little more color on that. I think based on what I've seen through, maybe the last week of May, and this is all in company franchise, every one, it would be slightly over 200 restaurants by that time frame. So that would include - I think it's around 210. That would include franchising company across the board over the next couple of weeks.
That's helpful. And then you kind of talked about the partitions, et cetera. I mean, is that really a way to get around some of the restrictions around capacity constraints? Or is that just something that you're doing to go over and above?
We are not going to violate any of the capacity constraints. It's something we're doing above and beyond.
[Operator Instructions]. Our next question comes from a Chris O'Cull with Stifel.
Tonya, I just had a follow-up regarding the margin comment for the March period. Does that include the $10.7 million in labor cost during that period, the negative point...
Yes. So that $10.7 million is in there, along with that 2.1%, 2.3% reserve adjustment that we had in labor on group health insurance.
And so the $10.7 million, I know that, that was related to pay for stores that have been closed. Is there a similar amount that we should expect in the month of April?
April, we did have a - we called it an April love payment to Roadies that were working in the restaurants. It's a much smaller number. It came in around $3 million, $3.5 million, so a much smaller dollar amount.
Okay. Okay. And then did you say what the CapEx was for - what you expect the CapEx to be this year?
No. We haven't given any CapEx on a full year basis just because we have so many unknowns out there right now. I think in our weekly cash number that we're forecasting, that $5 million, the fixed asset or the capital expenditure number, part of that would run right about $1.5 million is what we're expecting and for the next couple of months. And that's just the run-off for those stores I mentioned that we were still going to complete construction on, as well as just the sites that we have on hold, we have some costs associated with just maintaining those. And then just normal CapEx, maintenance projects that we were still finishing, things like that. So that's about what runs in that number.
And we have no further questions at this time.
All right. Well, thanks, everybody, for joining the call. We really appreciate you being on, and we appreciate hearing your voices. I hope everyone is doing well and look forward to talking to you soon. Thanks again.
Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.