Texas Roadhouse Delivers Strong Q1 2024 Results, Beats Earnings Estimates

Texas Roadhouse, Inc. (NASDAQ:TXRH) has reported impressive financialrevenue, linefor the first quarter of 2024, surpassing analysts' expectations. The restaurant chain's earnings showcase its ability to overcome the challenges of the industry while maintaining strong growth and profitability.

For the 13 weeks ended March 26, 2024, Texas Roadhouse reported revenue of $1.32 billion, a 12.8% year-over-year increase, matching analyst estimates. The company's GAAP earnings per share (EPS) reached $1.69, beating estimates by $0.08 and improving from $1.28 per share in the same quarter last year. Income from operations also saw a significant 31.9% increase, reaching $133.128 million, while net income rose by 31.0% to $113.206 million.

Why this matters: The strong performance of Texas Roadhouse in Q1 2024 is a positive sign for the restaurant industry as a whole, indicating that consumers are willing to spend on dining out experiences despite economic uncertainty. This trend could have a ripple effect on the broader economy, influencing consumer confidence and job growth in the service sector.

The strong performance can be attributed to several key factors. Comparable restaurant sales growth played a vital role, with an 8.4% increase at company restaurants and a 7.7% rise at domestic franchise restaurants. Additionally, the average weekly sales at company restaurants grew to $159,378, with $20,815 attributed to to-go sales.

Commenting on the First, Quarter, Results, Texas Roadhouse CEO Jerry Morgan stated, "We are off to a tremendous start in 2024 with strong traffic trends continuing to drive our sales growth." Morgan emphasized the company's commitment to providing exceptional food and service, which has been a driving force behind its success.

Looking ahead, Texas Roadhouse has updated its outlook for the full year 2024. The company expects commodity cost inflation of around 3% and store week growth of approximately 8%. Wage and other labor inflation is projected to be between 4% to 5%, while the effective income tax rate is estimated to be around 14%. Total capital expenditures for the year are anticipated to fall between $340 million and $350 million.

The restaurant chain's expansion plans remain on track, with 10 new restaurants opened in 2024 and 18 more currently under construction. As of today, Texas Roadhouse operates 753 locations, an increase of 49 over the last 12 months. The company's market capitalization stands at $10.5 billion, reflecting investor confidence in its growth potential.

Texas Roadhouse's strong earnings report reflects its ability to adapt to the evolving environment of the restaurant industry. By focusing on providing high-quality food and exceptional service, the company has managed to attract and retain a loyal customer base. The economy's ongoing recovery from the pandemic's impact has Texas Roadhouse well-positioned to capitalize on the increasing demand for dining out experiences.

Investors have responded positively to Texas Roadhouse's stock, earnings, exceeds, estimates, with the company's stock price rising 3.2% in after-hours trading to $162.99 per share. The restaurant chain's consistent performance and growth potential make it an attractive option for investors seeking exposure to the casual dining sector.

Texas Roadhouse's revenue growth rate of 13.6% over the last five years has been impressive, outpacing the broader restaurant sector. With a strong brand presence, loyal customer base, and a commitment to operational excellence, Texas Roadhouse is well-equipped to maintain its position as a leader in the casual dining space as it continues to execute its growth strategy in the coming quarters.

Key Takeaways

• Texas Roadhouse reports 12.8% revenue growth in Q1 2024, beating estimates.
• GAAP EPS reaches $1.69, exceeding estimates by $0.08.
• Comparable restaurant sales grow 8.4% at company restaurants and 7.7% at domestic franchises.
• Texas Roadhouse updates 2024 outlook, expecting 3% commodity cost inflation and 8% store week growth.
• Stock price rises 3.2% in after-hours trading to $162.99 per share.