new restaurants. Store weeks and comparable restaurant sales increased 6.1% and 5.4%, respectively, at company
restaurants in 2018.
Restaurant margin increased $17.8 million to $424.2 million in 2018 from $406.4 million in 2017 while restaurant
margin, as a percentage of restaurant and other sales, decreased 104 basis points to 17.4% in 2018 compared to 18.4% in
- The decrease in restaurant margin, as a percentage of restaurant and other sales, was primarily due to higher labor
costs as a result of higher average wage rates, current staffing initiatives to increase sales, and higher costs associated
with health insurance and workers’ compensation. The decrease was partially offset by the reclassification of certain
amounts between restaurant operating costs and general and administrative expenses as noted above. These
reclassifications increased restaurant margin by approximately 0.2%, as a percentage of restaurant and other sales and
had no impact on income before taxes.
Net income increased $26.7 million or 20.3% to $158.2 million in 2018 compared to $131.5 million in 2017
primarily due to higher revenue and lower income tax expense partially offset by higher labor costs. In addition, we
overlapped a pre-tax charge of $14.9 million ($9.2 million after-tax), or $0.13 per diluted share, in 2017 related to the
settlement of a previously disclosed legal matter. Our income tax rate decreased to 12.9% from 26.1% in the prior year
primarily due to the impact of new tax legislation. Diluted earnings per share increased 19.6% to $2.20 from $1.84 in
the prior year.