Texas Roadhouse, Inc. [TXRH] Filings

10-Q 1 txrh-20230627x10q.htm 10-Q

Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 27, 2023

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number 000-50972

Texas Roadhouse, Inc.

(Exact name of registrant specified in its charter)

Delaware		20-1083890
(State or other jurisdiction of		(IRS Employer
incorporation or organization)		Identification Number)

6040 Dutchmans Lane, Suite 200

Louisville, Kentucky 40205

(Address of principal executive offices) (Zip Code)

(502) 426-9984

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.001 per share	TXRH	NASDAQ Global Select Market

Indicate by check mark whether registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer ☒	Accelerated Filer ☐	Non-accelerated Filer ☐	Smaller Reporting Company ☐
			Emerging Growth Company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The number of shares of common stock outstanding were 66,748,428 on July 26, 2023.

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TABLE OF CONTENTS

PART I. FINANCIAL INFORMATION

Item 1 — Financial Statements (Unaudited) — Texas Roadhouse, Inc. and Subsidiaries		3
Condensed Consolidated Balance Sheets —June 27, 2023 and December 27, 2022		3
Condensed Consolidated Statements of Income — For the 13 and 26 Weeks Ended June 27, 2023 and June 28, 2022		4
Condensed Consolidated Statements of Stockholders’ Equity — For the 13 and 26 Weeks Ended June 27, 2023 and June 28, 2022		5
Condensed Consolidated Statements of Cash Flows — For the 26 Weeks Ended June 27, 2023 and June 28, 2022		7
Notes to Condensed Consolidated Financial Statements		8
Item 2 — Management’s Discussion and Analysis of Financial Condition and Results of Operations		17
Item 3 — Quantitative and Qualitative Disclosures About Market Risk		29
Item 4 — Controls and Procedures		29

PART II. OTHER INFORMATION

Item 1 — Legal Proceedings		31
Item 1A — Risk Factors		31
Item 2 — Unregistered Sales of Equity Securities and Use of Proceeds		31
Item 3 — Defaults Upon Senior Securities		31
Item 4 — Mine Safety Disclosures		31
Item 5 — Other Information		32
Item 6 — Exhibits		32

Signatures		33

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PART I — FINANCIAL INFORMATION

ITEM 1 — FINANCIAL STATEMENTS

Texas Roadhouse, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(in thousands, except share and per share data)

(unaudited)


	June 27, 2023		December 27, 2022
Assets
Current assets:
Cash and cash equivalents	$	107,324	$	173,861
Receivables, net of allowance for doubtful accounts of $51 at June 27, 2023 and $50 at December 27, 2022		60,537		150,264
Inventories, net		38,121		38,015
Prepaid income taxes		1,402		5,097
Prepaid expenses and other current assets		25,901		29,604
Total current assets		233,285		396,841
Property and equipment, net of accumulated depreciation of $1,019,637 at June 27, 2023 and $968,036 at December 27, 2022		1,360,132		1,270,349
Operating lease right-of-use assets, net		662,730		630,258
Goodwill		169,684		148,732
Intangible assets, net of accumulated amortization of $19,426 at June 27, 2023 and $17,905 at December 27, 2022		4,986		5,607
Other assets		84,174		73,878
Total assets	$	2,514,991	$	2,525,665
Liabilities and Stockholders’ Equity
Current liabilities:
Current portion of operating lease liabilities	$	27,015	$	25,490
Accounts payable		120,653		105,560
Deferred revenue-gift cards		226,130		335,403
Accrued wages		67,164		54,544
Income taxes payable		1,963		434
Accrued taxes and licenses		40,673		35,264
Other accrued liabilities		88,385		95,315
Total current liabilities		571,983		652,010
Operating lease liabilities, net of current portion		712,800		677,874
Long-term debt		—		50,000
Restricted stock and other deposits		8,594		7,979
Deferred tax liabilities, net		22,454		20,979
Other liabilities		100,910		89,161
Total liabilities		1,416,741		1,498,003
Texas Roadhouse, Inc. and subsidiaries stockholders’ equity:
Preferred stock ($0.001 par value, 1,000,000 shares authorized; no shares issued or outstanding)		—		—
Common stock ($0.001 par value, 100,000,000 shares authorized, 66,843,456 and 66,973,311 shares issued and outstanding at June 27, 2023 and December 27, 2022, respectively)		67		67
Additional paid-in-capital		—		13,139
Retained earnings		1,082,915		999,432
Total Texas Roadhouse, Inc. and subsidiaries stockholders’ equity		1,082,982		1,012,638
Noncontrolling interests		15,268		15,024
Total equity		1,098,250		1,027,662
Total liabilities and equity	$	2,514,991	$	2,525,665

See accompanying notes to condensed consolidated financial statements.

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Texas Roadhouse, Inc. and Subsidiaries

Condensed Consolidated Statements of Income

(in thousands, except per share data)

(unaudited)



	13 Weeks Ended				26 Weeks Ended
	June 27, 2023		June 28, 2022		June 27, 2023		June 28, 2022
Revenue:
Restaurant and other sales	$	1,164,385	$	1,018,057	$	2,331,968	$	1,999,029
Franchise royalties and fees		6,818		6,549		13,591		13,063
Total revenue		1,171,203		1,024,606		2,345,559		2,012,092
Costs and expenses:
Restaurant operating costs (excluding depreciation and amortization shown separately below):
Food and beverage		401,204		347,041		811,915		684,437
Labor		391,337		333,042		777,156		654,913
Rent		17,996		16,714		35,824		33,082
Other operating		171,092		152,524		338,621		296,678
Pre-opening		5,671		5,323		11,048		9,614
Depreciation and amortization		37,413		34,420		73,640		68,040
Impairment and closure, net		78		411		133		(235)
General and administrative		51,000		49,213		100,865		89,507
Total costs and expenses		1,075,791		938,688		2,149,202		1,836,036
Income from operations		95,412		85,918		196,357		176,056
Interest income (expense), net		996		(395)		2,234		(792)
Equity income from investments in unconsolidated affiliates		287		545		1,042		879
Income before taxes	$	96,695	$	86,068	$	199,633	$	176,143
Income tax expense		12,270		11,531		26,604		24,278
Net income including noncontrolling interests		84,425		74,537	$	173,029	$	151,865
Less: Net income attributable to noncontrolling interests		2,154		2,118		4,371		4,244
Net income attributable to Texas Roadhouse, Inc. and subsidiaries	$	82,271	$	72,419	$	168,658	$	147,621

Net income per common share attributable to Texas Roadhouse, Inc. and subsidiaries:
Basic	$	1.23	$	1.07	$	2.52	$	2.16
Diluted	$	1.22	$	1.07	$	2.51	$	2.15
Weighted average shares outstanding:
Basic		66,974		67,654		66,995		68,370
Diluted		67,229		67,890		67,261		68,631
Cash dividends declared per share	$	0.55	$	0.46	$	1.10	$	0.92

See accompanying notes to condensed consolidated financial statements.

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Texas Roadhouse, Inc. and Subsidiaries

Condensed Consolidated Statements of Stockholders' Equity

(in thousands, except share and per share data)

(unaudited)


	For the 13 Weeks Ended June 27, 2023
								Total Texas
				Additional				Roadhouse, Inc.
		Par		Paid-in-		Retained		and		Noncontrolling
	Shares	Value		Capital		Earnings		Subsidiaries		Interests		Total
Balance, March 28, 2023	67,000,306	$	67	$	6,240	$	1,048,941	$	1,055,248	$	15,291	$	1,070,539
Net income	—		—		—		82,271		82,271		2,154		84,425
Distributions to noncontrolling interest holders	—		—		—		—		—		(2,177)		(2,177)
Dividends declared ($0.55 per share)	—		—		—		(36,820)		(36,820)		—		(36,820)
Shares issued under share-based compensation plans including tax effects	82,547		—		—		—		—		—		—
Indirect repurchase of shares for minimum tax withholdings	(25,422)		—		(2,809)		—		(2,809)		—		(2,809)
Repurchase of shares of common stock, including excise tax	(213,975)		—		(12,021)		(11,477)		(23,498)		—		(23,498)
Share-based compensation	—		—		8,590		—		8,590		—		8,590
Balance, June 27, 2023	66,843,456	$	67	$	—	$	1,082,915	$	1,082,982	$	15,268	$	1,098,250


	For the 13 Weeks Ended June 28, 2022
								Total Texas
				Additional				Roadhouse, Inc.
		Par		Paid-in-		Retained		and		Noncontrolling
	Shares	Value		Capital		Earnings		Subsidiaries		Interests		Total
Balance, March 29, 2022	68,459,769	$	68	$	32,754	$	986,958	$	1,019,780	$	15,479	$	1,035,259
Net income	—		—		—		72,419		72,419		2,118		74,537
Distributions to noncontrolling interest holders	—		—		—		—		—		(2,130)		(2,130)
Acquisition of noncontrolling interest	—		—		(1,395)		—		(1,395)		(340)		(1,735)
Dividends declared ($0.46 per share)	—		—		—		(30,752)		(30,752)		—		(30,752)
Shares issued under share-based compensation plans including tax effects	97,387		—		—		—		—		—		—
Indirect repurchase of shares for minimum tax withholdings	(30,473)		—		(2,499)		—		(2,499)		—		(2,499)
Repurchase of shares of common stock	(1,673,387)		(1)		(38,352)		(89,800)		(128,153)		—		(128,153)
Share-based compensation	—		—		9,492		—		9,492		—		9,492
Balance, June 28, 2022	66,853,296	$	67	$	—	$	938,825	$	938,892	$	15,127	$	954,019

See accompanying notes to condensed consolidated financial statements.

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Texas Roadhouse, Inc. and Subsidiaries

Condensed Consolidated Statements of Stockholders' Equity

(in thousands, except share and per share data)

(unaudited)


	For the 26 Weeks Ended June 27, 2023
								Total Texas
				Additional				Roadhouse, Inc.
		Par		Paid-in-		Retained		and		Noncontrolling
	Shares	Value		Capital		Earnings		Subsidiaries		Interests		Total
Balance, December 27, 2022	66,973,311	$	67	$	13,139	$	999,432	$	1,012,638	$	15,024	$	1,027,662
Net income	—		—		—		168,658		168,658		4,371		173,029
Distributions to noncontrolling interest holders	—		—		—		—		—		(4,127)		(4,127)
Dividends declared ($1.10 per share)	—		—		—		(73,698)		(73,698)		—		(73,698)
Shares issued under share-based compensation plans including tax effects	256,167		—		—		—		—		—		—
Indirect repurchase of shares for minimum tax withholdings	(79,296)		—		(8,239)		—		(8,239)		—		(8,239)
Repurchase of shares of common stock, including excise tax	(306,726)		—		(21,644)		(11,477)		(33,121)		—		(33,121)
Share-based compensation	—		—		16,744		—		16,744		—		16,744
Balance, June 27, 2023	66,843,456	$	67	$	—	$	1,082,915	$	1,082,982	$	15,268	$	1,098,250


	For the 26 Weeks Ended June 28, 2022
								Total Texas
				Additional				Roadhouse, Inc.
		Par		Paid-in-		Retained		and		Noncontrolling
	Shares	Value		Capital		Earnings		Subsidiaries		Interests		Total
Balance, December 28, 2021	69,382,418	$	69	$	114,504	$	943,551	$	1,058,124	$	15,360	$	1,073,484
Net income	—		—		—		147,621		147,621		4,244		151,865
Distributions to noncontrolling interest holders	—		—		—		—		—		(4,137)		(4,137)
Acquisition of noncontrolling interest	—		—		(1,395)		—		(1,395)		(340)		(1,735)
Dividends declared ($0.92 per share)	—		—		—		(62,547)		(62,547)		—		(62,547)
Shares issued under share-based compensation plans including tax effects	302,355		—		—		—		—		—		—
Indirect repurchase of shares for minimum tax withholdings	(97,472)		—		(8,664)		—		(8,664)		—		(8,664)
Repurchase of shares of common stock	(2,734,005)		(2)		(123,057)		(89,800)		(212,859)		—		(212,859)
Share-based compensation	—		—		18,612		—		18,612		—		18,612
Balance, June 28, 2022	66,853,296	$	67	$	—	$	938,825	$	938,892	$	15,127	$	954,019

See accompanying notes to condensed consolidated financial statements.

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Texas Roadhouse, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(in thousands)

(unaudited)



	26 Weeks Ended
	June 27, 2023		June 28, 2022
Cash flows from operating activities:
Net income including noncontrolling interests	$	173,029	$	151,865
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		73,640		68,040
Deferred income taxes		1,767		3,906
Loss on disposition of assets		3,475		1,991
Impairment and closure costs		39		386
Equity income from investments in unconsolidated affiliates		(1,042)		(879)
Distributions of income received from investments in unconsolidated affiliates		358		619
Provision for doubtful accounts		1		27
Share-based compensation expense		16,744		18,612
Changes in operating working capital, net of acquisitions:
Receivables		90,501		115,998
Inventories		303		84
Prepaid expenses and other current assets		5,111		4,294
Other assets		(10,119)		13,852
Accounts payable		14,365		4,301
Deferred revenue—gift cards		(110,436)		(93,175)
Accrued wages		12,620		16,395
Prepaid income taxes and income taxes payable		5,224		6,611
Accrued taxes and licenses		5,346		1,284
Other accrued liabilities		(7,624)		(8,339)
Operating lease right-of-use assets and lease liabilities		3,178		3,385
Other liabilities		11,753		(10,554)
Net cash provided by operating activities		288,233		298,703
Cash flows from investing activities:
Capital expenditures—property and equipment		(154,580)		(108,567)
Acquisition of franchise restaurants, net of cash acquired		(39,153)		(33,069)
Proceeds from sale of investments in unconsolidated affiliates		632		316
Proceeds from the sale of property and equipment		—		2,188
Proceeds from sale leaseback transactions		7,097		—
Net cash used in investing activities		(186,004)		(139,132)
Cash flows from financing activities:
Payments on revolving credit facility		(50,000)		(25,000)
Distributions to noncontrolling interest holders		(4,127)		(4,137)
Acquisition of noncontrolling interest		—		(1,735)
Proceeds from restricted stock and other deposits, net		356		137
Indirect repurchase of shares for minimum tax withholdings		(8,239)		(8,664)
Repurchase of shares of common stock		(33,058)		(212,859)
Dividends paid to shareholders		(73,698)		(62,547)
Net cash used in financing activities		(168,766)		(314,805)
Net decrease in cash and cash equivalents		(66,537)		(155,234)
Cash and cash equivalents—beginning of period		173,861		335,645
Cash and cash equivalents—end of period	$	107,324	$	180,411
Supplemental disclosures of cash flow information:
Interest paid, net of amounts capitalized	$	638	$	139
Income taxes paid	$	19,613	$	13,784
Capital expenditures included in current liabilities	$	36,268	$	24,906

See accompanying notes to condensed consolidated financial statements.

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Texas Roadhouse, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

(tabular amounts in thousands, except share and per share data)

(unaudited)

(1) Basis of Presentation

The accompanying unaudited condensed consolidated financial statements include the accounts of Texas Roadhouse, Inc., our wholly-owned subsidiaries and subsidiaries in which we have a controlling interest (collectively, the "Company," "we," "our" and/or "us") as of June 27, 2023 and December 27, 2022 and for the 13 and 26 weeks ended June 27, 2023 and June 28, 2022.

As of June 27, 2023, we owned and operated 614 restaurants and franchised an additional 95 restaurants in 49 states and ten foreign countries. Of the 614 company restaurants, there were 594 wholly-owned restaurants and 20 majority-owned restaurants. Of the 614 company restaurants, we operated 566 as Texas Roadhouse restaurants, 41 as Bubba’s 33 restaurants and seven as Jaggers restaurants. Of the 95 Texas Roadhouse franchise restaurants, there were 54 domestic restaurants and 41 international restaurants.

As of June 28, 2022, we owned and operated 582 restaurants and franchised an additional 96 restaurants in 49 states and ten foreign countries. Of the 582 company restaurants, there were 562 wholly-owned restaurants and 20 majority-owned restaurants. Of the 582 company restaurants, we operated 541 as Texas Roadhouse restaurants, 37 as Bubba’s 33 restaurants and four as Jaggers restaurants. Of the 96 Texas Roadhouse franchise restaurants, there were 62 domestic restaurants and 34 international restaurants.

As of June 27, 2023 and June 28, 2022, we owned a 5.0% to 10.0% equity interest in 19 and 23 domestic franchise restaurants, respectively. These unconsolidated restaurants are accounted for using the equity method. Our investments in these unconsolidated affiliates are included in other assets in our unaudited condensed consolidated balance sheets, and we record our percentage share of net income earned by these unconsolidated affiliates in our unaudited condensed consolidated statements of income under equity income from investments in unconsolidated affiliates. All significant intercompany balances and transactions for these unconsolidated restaurants as well as the entities whose accounts have been consolidated have been eliminated.

We have made a number of estimates and assumptions relating to the reporting of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the unaudited condensed consolidated financial statements and the reporting of revenue and expenses during the periods to prepare these unaudited condensed consolidated financial statements in conformity with U.S. generally accepted accounting principles ("GAAP"). Significant items subject to such estimates and assumptions include the carrying amounts of property and equipment, goodwill, obligations related to insurance reserves, leases, legal reserves, gift card breakage and third party fees and income taxes. Actual results could differ from those estimates.

In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all adjustments, consisting only of normal recurring adjustments, necessary to present fairly our consolidated financial statements for the periods presented. The unaudited condensed consolidated financial statements have been prepared in accordance with GAAP, except that certain information and footnotes have been condensed or omitted pursuant to rules and regulations of the Securities and Exchange Commission. Operating results for the 13 and 26 weeks ended June 27, 2023 are not necessarily indicative of the results that may be expected for the fiscal year ending December 26, 2023. The unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the fiscal year ended December 27, 2022.

Our significant interim accounting policies include the recognition of income taxes using an estimated annual effective tax rate.

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(2) Recent Accounting Pronouncements

Reference Rate Reform

In March 2020, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides temporary optional expedients and exceptions to the current guidance on contract modifications and hedge accounting. These changes are intended to simplify the market transition from the London Interbank Offered Rate ("LIBOR") and other interbank offered rates to alternative reference rates. In December 2022, the FASB issued ASU 2022-06, Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848, which defers the sunset date of Topic 848 from December 31, 2022 to December 31, 2024. We adopted this guidance during the 13 weeks ended June 27, 2023 and the adoption did not have a material impact on our unaudited condensed consolidated financial statements.

(3) Long-term Debt

We maintain a revolving credit facility (the "credit facility") with a syndicate of commercial lenders led by JPMorgan Chase Bank, N.A. and PNC Bank, N.A. The credit facility is an unsecured, revolving credit agreement and has a borrowing capacity of up to $300.0 million with the option to increase by an additional $200.0 million subject to certain limitations, including approval by the syndicate of lenders. The credit facility has a maturity date of May 1, 2026.

On May 19, 2023, we amended the credit facility to provide for the transition from LIBOR to the Secured Overnight Financing Rate ("SOFR") as the benchmark rate for purposes of calculating interest on outstanding borrowings. Pursuant to the amendment, we are required to pay interest on outstanding borrowings at the Term SOFR, plus a fixed adjustment of 0.10% and a variable adjustment of 0.875% to 1.875% depending on our leverage ratio. At the time of transition to the Term SOFR, we had no outstanding borrowings under the credit facility.

As of June 27, 2023, we had no outstanding balance on the credit facility and had $284.9 million of availability, net of $15.1 million of outstanding letters of credit. As of December 27, 2022, we had $50.0 million outstanding on the credit facility and $233.5 million of availability, net of $16.5 million of outstanding letters of credit. The outstanding amount as of December 27, 2022 is included as long-term debt on our unaudited condensed consolidated balance sheet.

The interest rate for the credit facility as of June 27, 2023 and June 28, 2022 was 6.07% and 2.13%, respectively.

The lenders’ obligation to extend credit pursuant to the credit facility depends on us maintaining certain financial covenants. We were in compliance with all financial covenants as of June 27, 2023.

(4) Revenue

The following table disaggregates our revenue by major source:


	13 Weeks Ended				26 Weeks Ended
	June 27, 2023		June 28, 2022		June 27, 2023		June 28, 2022
Restaurant and other sales	$	1,164,385	$	1,018,057	$	2,331,968	$	1,999,029
Franchise royalties		6,045		5,771		12,064		11,470
Franchise fees		773		778		1,527		1,593
Total revenue	$	1,171,203	$	1,024,606	$	2,345,559	$	2,012,092

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The following table presents a rollforward of deferred revenue-gift cards:


	13 Weeks Ended				26 Weeks Ended
	June 27, 2023		June 28, 2022		June 27, 2023		June 28, 2022
Beginning balance	$	240,729	$	221,479	$	335,403	$	300,657
Gift card activations, net		67,991		59,637		118,554		101,661
Gift card redemptions and breakage		(82,590)		(72,687)		(227,827)		(193,889)
Ending balance	$	226,130	$	208,429	$	226,130	$	208,429

We recognized restaurant sales of $45.5 million and $165.1 million for the 13 and 26 weeks ended June 27, 2023, respectively, related to amounts in deferred revenue as of December 27, 2022. We recognized restaurant sales of $39.5 million and $141.6 million for the 13 and 26 weeks ended June 28, 2022, respectively, related to amounts in deferred revenue as of December 28, 2021.

(5) Income Taxes

A reconciliation of the statutory federal income tax rate to our effective tax rate for the 13 and 26 weeks ended June 27, 2023 and June 28, 2022 is as follows:


	13 Weeks Ended				26 Weeks Ended
	June 27, 2023		June 28, 2022		June 27, 2023		June 28, 2022
Tax at statutory federal rate	21.0	%	21.0	%	21.0	%	21.0	%
State and local tax, net of federal benefit	3.7		3.8		3.7		3.8
FICA tip tax credit	(11.1)		(10.8)		(10.6)		(10.3)
Work opportunity tax credit	(1.1)		(1.7)		(1.1)		(1.5)
Stock compensation	(0.8)		0.2		(0.5)		—
Net income attributable to noncontrolling interests	(0.4)		(0.4)		(0.4)		(0.4)
Officers compensation	0.7		0.6		0.7		0.6
Other	0.7		0.7		0.5		0.6
Total	12.7	%	13.4	%	13.3	%	13.8	%

Our effective tax rate was 12.7% and 13.4% for the 13 weeks ended June 27, 2023 and June 28, 2022, respectively. Our effective tax rate was 13.3% and 13.8% for the 26 weeks ended June 27, 2023 and June 28, 2022, respectively. The reductions in our tax rate for the 13 and 26 weeks ended June 27, 2023 as compared to the prior year periods were primarily driven by an increase in the excess tax benefit for stock compensation.

(6)