Restaurant Rent Expense
Restaurant rent expense, as a percentage of restaurant and other sales, remained relatively unchanged at 1.9% in
2019 compared to 2.0% in both 2018 and 2017. The decrease in 2019 was primarily due to the benefit of the 53rd week
and an increase in average unit volume partially offset by higher rent expense, as a percentage of restaurant and other
sales, at our newer restaurants. Rent expense was unchanged in 2018 compared to 2017 due to higher rent expense, as a
percentage of restaurant and other sales, at our newer restaurants offset by the benefit from an increase in average unit
volume.
Restaurant Other Operating Expenses
Restaurant other operating expense, as a percentage of restaurant and other sales, decreased to 15.3% in 2019 from
15.4% in 2018. The decrease was primarily attributed to lower utilities expense and lower marketing and advertising
expense along with the benefit from an increase in average unit volume. These decreases were partially offset by higher
general liability insurance expense and repairs and maintenance expense.
Restaurant other operating expense, as a percentage of restaurant and other sales, decreased to 15.4% in 2018 from
15.6% in 2017. The decrease was primarily attributed to reclassifications of $4.7 million in 2018 made in conjunction
with the implementation of the new revenue recognition accounting guidance along with lower incentive compensation
expense and the benefit from an increase in average unit volume. The decrease was partially offset by higher credit card
fees.
Restaurant Pre-opening Expenses
Pre-opening expenses increased to $20.2 million in 2019 from $19.1 million in 2018 and from $19.3 million in- These changes are primarily due to the number of restaurant openings in a given year and the timing of restaurant
openings. Pre-opening costs will fluctuate from period to period based on the specific pre-opening costs incurred for
each restaurant, the number and timing of restaurant openings and the number and timing of restaurant managers hired.
Depreciation and Amortization Expenses ("D&A")
D&A, as a percentage of revenue, increased to 4.2% in 2019 compared to 4.1% in 2018. The increase in D&A was
primarily due to higher depreciation at new stores from company restaurants and accelerated depreciation on relocated
restaurants. These increases were partially offset by an increase in average unit volume.
D&A, as a percentage of revenue, decreased to 4.1% in 2018 compared to 4.2% in 2017. The decrease in D&A
was primarily due to the benefit from an increase in average unit volume partially offset by increased investment in
short-lived assets, such as equipment at existing restaurants, and higher depreciation at new restaurants.
Impairment and Closure Costs, Net
Impairment and closure costs, net were ($0.9) million, $0.3 million and $0.7 million in 2019, 2018 and 2017,
respectively. Impairment and closure income in 2019 included a gain of $2.6 million related to the forced relocation of
one restaurant. This included a gain of $1.2 million related to the leasehold improvements and a gain of $1.4 million to
settle a favorable operating lease. Also, in 2019, we recorded a charge of $1.1 million related to the impairment of the
right-of-use asset at an underperforming restaurant. The remaining costs of $0.6 million related to closure costs
primarily related to the relocation of Texas Roadhouse restaurants. For 2018 and 2017, the amounts recorded were
closure costs primarily related to the relocation of Texas Roadhouse restaurants. See note 16 in the Consolidated
Financial Statements for further discussion regarding closures and impairments recorded in 2019, 2018 and 2017.