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Texas Roadhouse President Scott Colosi weighs in on expansion, his expectations for beef inflation and the new trends for casual dining.
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Texas Roadhouse cook it up a storm for their third quarter beating street expectations -- earnings.
As revenues rose 10% all while opening five new restaurants in the United States and -- first international franchise.
In Dubai vol plays is joining us now for exclusive interview.
Texas courthouse president Scott collapsing and take you very much Scott for being.
On the shot first you want to talk to you about the expansion.
Of the company a lot of your competitors'.
-- have been expanding but not the pace that you have.
What are you saying of the domestic economy right now that -- that leads you to open twenty arrestor.
Well good afternoon Sharyl we're seeing a lot of demand for Texas Roadhouse for our -- the value we provide.
To our -- so were open twenty restaurants issue in 2011 we're gonna step up a little bit.
Q 25 restaurants and in 2012.
-- plus whatever we do internationally.
And we've been very successful in our first international opening out in Dubai -- in the US we've had great sales results this year.
And that's fueling our conference to be able to open more restaurant side in in 2012.
We do you have in the short term some pretty big head -- -- inflation.
Optically through cost inflation but we think in the longer term.
Will make things work and the growth of -- 25 -- it's great for people as much as it's great for investors.
And certainly straight to create jobs it's actually wonderful for a people and giving a lot of our people opportunities to grow their careers Texas Roadhouse.
Scott you mentioned food price inflation that is a big piece of the business for -- -- cost you with the same time for the month of October.
And and the USDA's telling us this is actually gonna be the new trend we are gonna see.
Food prices Begin to actually fall yet you're still talking about that for the last quarter what about the current quarter are you are you thinking.
That you're gonna have actually better margins at because food prices are actually gonna Begin to take.
Down.
For us -- prices really are coming down and -- a lot more far food.
Actually going into next year -- 2012.
We've we've told Wall Street are food inflation's going to be seven and 9%.
Those are humongous numbers for the restaurant business a lot of that's driven by corn.
A corn prices you know the last five or six years they've gone from about two bucks a bushel we're looking -- now 67.
Dollars a bushel so.
That eventually feeds into all of the supply chain raising cattle hogs and so forth.
And we don't see that change and a whole lot global demand for corn and also of course the ethanol policy that we have in the United States is also pushing up corn prices so.
We don't see that changing we -- a lot of our beef over the course we make up for your commitment.
When we buyer -- so suppliers.
It's not just what the what the prices today it's what they think it's gonna be.
For the whole entire year and so we're expecting quite a bit -- beef inflation next year.
Let's talk to about the casual dining space overalls -- you have a lot of competition in particular the -- ways to -- People like Donna dusty not just you but Darden PF -- are -- also looking to expand into the Middle East and -- -- that's going to be the new trend for the casual.
Dining sector overall is Middle -- expansion.
Well I think not only the Middle East but also I think the rest of the world particularly Asia and -- maybe Mexico as well.
Certainly we're seeing a lot of people start in the Middle East and make sense to start their from many reasons.
One is a lot of the folks do have quite a bit of income.
On the remember the Middle East eastern places like Dubai.
For us were sending we're able to send fresh US beef.
Over to Dubai we gauges on our ships going over -- will -- US potatoes.
Over to -- so -- love and our food.
I'm relying dancing and our restaurant in Dubai are playing country music source on a lot of energy and Americana over there and -- they're really -- it.
-- -- -- before I let -- I do wanna ask you real quick about the work opportunity tax credit that's gonna be expiring I'm curious if you're.
A concerned -- that's in any -- gonna affect your plans to hire do you think that you will scale back.
Hiring plans because you're not gonna have basically the tax -- there anymore.
Well it's simply getting impact -- from the earnings perspective but now we're gonna were grown 25 stores next year we've got to hire a lot of people.
And we are about a 107 the folks reach -- -- that we open.
I found people make our business goes so goes our people so goes our restaurants so we're going to be all over the harm peace we've got to stay we have fun of itself we're going to be pushing hard on that front it's.
Michael OC Texas Roadhouse president expanding way beyond Texas Scott they.
