U.S. markets closed
  • S&P 500

    -20.49 (-0.46%)
  • Dow 30

    -323.73 (-0.92%)
  • Nasdaq

    +19.24 (+0.13%)
  • Russell 2000

    -27.26 (-1.23%)
  • Crude Oil

    -0.09 (-0.13%)
  • Gold

    0.00 (0.00%)
  • Silver

    -0.05 (-0.18%)

    -0.0001 (-0.01%)
  • 10-Yr Bond

    +0.0080 (+0.68%)

    +0.0004 (+0.03%)

    +0.0220 (+0.02%)

    +1,357.82 (+3.53%)
  • CMC Crypto 200

    +50.30 (+5.43%)
  • FTSE 100

    +18.14 (+0.26%)
  • Nikkei 225

    -57.75 (-0.21%)

Bull of the Day: Texas Roadhouse (TXRH)

  • Oops!
    Something went wrong.
    Please try again later.
·3 min read
In this article:
  • Oops!
    Something went wrong.
    Please try again later.

Texas Roadhouse (TXRH) is a full-service, casual dining restaurant chain known for its seasoned and aged steaks that are hand cut daily, and rustic, Texas-themed laidback décor. The company currently has 540 company-owned locations and another 97 franchised stores primarily in suburban and rural areas throughout the U.S.

Q1 Earnings Recap

Texas Roadhouse posted strong sales growth during the first-quarter. Comparable restaurant sales jumped 18.5% year-over-year, with 13% traffic growth and a 5.5% increase in average check.

Total revenue grew 22.7% over the prior year to over $800 million, helped in part to the company’s thriving to-go and meal kit business. To-go sales made up 22% of average weekly store sales in Q1, proving how well-liked the option is regardless of loosening indoor dining restrictions.

Diluted EPS increased to $0.91 per share, beating our consensus estimate; TXRH’s bottom line is now back to reaching new all-time highs after a muted 2020.

CFO Tonya Robinson said TXRH updated its full-year inflation forecast to roughly 4%, as the company works around supply and demand uncertainty, particularly for proteins and oils.

“Our operating results have exceeded even pre-pandemic levels thanks to our operators’ ability to navigate a number of factors, including the easing of dining room capacity restrictions, guest excitement to get back into our restaurants and the continued strength of our To-Go sales. Going forward, our primary focus will be ensuring that our guests continue to have a legendary experience each and every time they choose us,” said CEO and President Jerry Morgan.

TXRH Breaks Out

Texas Roadhouse, Inc. Price and Consensus
Texas Roadhouse, Inc. Price and Consensus

Shares of Texas Roadhouse have been climbing back from their pandemic lows, up 124% over the past one-year period compared to the S&P 500’s gain of 45.8%. Earnings estimates have been rising too, and TXRH is a Zacks Rank #1 (Strong Buy) right now.

For fiscal 2021, 10 analysts have revised their bottom-line estimate upwards in the last 60 days, and the Zacks Consensus Estimate has moved up from $2.38 to $3.26 per share, reflecting bottom-line growth of over 624%. Analysts are bullish about 2022 as well, and TXRH is expected to continue generating strong profits.

Looking ahead, management is confident about Texas Roadhouse’s short and long-term growth path. The company plans to open 25 to 30 new locations this year, and reiterated weekly store growth of 4% to 5%.

And good news for investors: TXRH recently announced that it has reinstated its quarterly dividend after suspending the payout last March to help preserve cashflow. Shareholders of record as of May 19 will receive a dividend of $0.40 on June 4. Shares now yield 1.65% on an annual basis.

If you’re an investor searching for a restaurant stock to add to your portfolio, make sure to keep TXRH on your shortlist.

Time to Invest in Legal Marijuana

If you’re looking for big gains, there couldn’t be a better time to get in on a young industry primed to skyrocket from $17.7 billion back in 2019 to an expected $73.6 billion by 2027.

After a clean sweep of 6 election referendums in 5 states, pot is now legal in 36 states plus D.C. Federal legalization is expected soon and that could be a still greater bonanza for investors. Even before the latest wave of legalization, Zacks Investment Research has recommended pot stocks that have shot up as high as +285.9%

You’re invited to check out Zacks’ Marijuana Moneymakers: An Investor’s Guide. It features a timely Watch List of pot stocks and ETFs with exceptional growth potential.

Today, Download Marijuana Moneymakers FREE >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Texas Roadhouse, Inc. (TXRH) : Free Stock Analysis Report

To read this article on Zacks.com click here.