Latest news with #TXRH
Yahoo
4 days ago
- Business
- Yahoo
TXRH Q1 Earnings Call: Menu Strategy and Cost Pressures Shape Outlook
Restaurant company Texas Roadhouse (NASDAQ:TXRH) reported Q1 CY2025 results topping the market's revenue expectations , with sales up 9.6% year on year to $1.45 billion. Its non-GAAP profit of $1.70 per share was 3.3% below analysts' consensus estimates. Is now the time to buy TXRH? Find out in our full research report (it's free). Revenue: $1.45 billion vs analyst estimates of $1.44 billion (9.6% year-on-year growth, 0.6% beat) Adjusted EPS: $1.70 vs analyst expectations of $1.76 (3.3% miss) Adjusted EBITDA: $183.5 million vs analyst estimates of $188.4 million (12.7% margin, 2.6% miss) Operating Margin: 9.3%, in line with the same quarter last year Locations: 792 at quarter end, up from 753 in the same quarter last year Same-Store Sales rose 3.7% year on year (8.1% in the same quarter last year) Market Capitalization: $12.92 billion Texas Roadhouse's first quarter results were influenced by consistent guest demand, menu mix shifts, and ongoing operational investments. CEO Jerry Morgan cited a rebound in traffic following a weather-impacted February, emphasizing that 'our average weekly sales for March hit all-time highs at all three brands.' Management also pointed to positive same-store sales and traffic growth, supported by new restaurant openings and expanded digital initiatives. CFO Chris Monroe highlighted that labor efficiency remained strong, with labor hours growing at roughly one-third the rate of traffic, and turnover rates below pre-pandemic levels. The company is maintaining its focus on guest experience, with operational changes such as upgraded kitchen technology and guest management systems contributing to smoother restaurant operations and more accurate wait times. Looking forward, Texas Roadhouse's outlook centers on navigating commodity and labor inflation, as well as potential tariff impacts on supplies and equipment. Management acknowledged that pricing actions are 'below the inflation guidance that we have,' and that commodity inflation, primarily driven by beef and tariffs, is expected to reach 4% for the year. The company plans to continue its measured approach to menu pricing, balancing shareholder and consumer interests as inflationary pressures persist. Morgan noted, 'As we get a little closer to the fall decision, we'll get with our try to make the best decision not only for our shareholders, but for our consumers and for our operators and partners.' Expansion remains a focus, with targets for new restaurant openings and franchise acquisitions, while operational investments in technology and menu innovation are expected to help offset some cost headwinds. Management attributed the first quarter's performance to a recovery in guest traffic, operational efficiency gains, and changes in menu mix, while also noting ongoing cost pressures from labor and commodities. Menu mix shift: Leadership observed a notable guest trend toward higher-priced steak entrées, with CFO Chris Monroe explaining this shift was likely influenced by grocery store steak prices, making dining out comparatively attractive. This helped top-line sales but placed upward pressure on cost of goods sold (COGS), as steak items have lower margin percentages compared to chicken or seafood. Weather and health impacts: The company experienced a pronounced dip in February traffic due to adverse weather and influenza outbreaks, which led to more to-go sales during that period. Management stated that as weather improved, in-person traffic rebounded across all regions, restoring momentum. Labor productivity: Despite inflationary wage pressures, Texas Roadhouse continued to manage labor hours efficiently, with Monroe highlighting that labor hours grew at 35% of traffic growth for the sixth consecutive quarter. Both hourly and manager turnover rates remained below pre-pandemic levels, contributing to operational stability. Digital kitchen rollout: 65% of restaurants had transitioned to a new digital kitchen system by the end of the quarter, with all locations expected to convert by year-end. CEO Jerry Morgan noted the system was reducing kitchen stress and improving efficiency, though the company is still measuring the full impact on throughput and labor. Beverage and menu innovation: The launch of regional beverage menus—including mocktails and $5 all-day beer and margarita offers—was driven by consumer preferences and operator feedback. Early results indicate positive guest reception, with management expecting the full impact to be seen over the coming quarters. Texas Roadhouse expects inflation, menu strategy, and operational investments to be the main factors influencing near-term results. Commodity and wage inflation: Management projects approximately 4% commodity inflation for the year, up from prior estimates due to higher beef costs and new tariffs. Wage and labor inflation is expected to remain in the 4% to 5% range. These pressures are likely to impact restaurant margins, with some cost offsets expected from menu price increases and productivity gains. Measured pricing approach: Leadership reiterated its philosophy of pricing below overall inflation, especially for commodities, to balance guest value with profitability. The company remains cautious about future menu price increases, preferring to make decisions based on evolving inflation trends and consumer sentiment as the year progresses. Technology and efficiency initiatives: The ongoing rollout of digital kitchen and guest management systems aims to improve operational efficiency and guest satisfaction. Management believes these investments could help mitigate some inflationary pressures by streamlining kitchen operations and enhancing the guest experience, though full benefits are still being evaluated. Looking ahead, the StockStory team will be monitoring (1) the impact of commodity and labor inflation on restaurant margins, (2) the effectiveness of new menu and beverage innovations in driving guest traffic and check growth, and (3) progress on the rollout and operational impact of digital kitchen and management systems. Additionally, we will track the company's ability to execute its planned restaurant expansion and franchise acquisition strategy. Texas Roadhouse currently trades at a forward P/E ratio of 27.5×. In the wake of earnings, is it a buy or sell? See for yourself in our full research report (it's free). Donald Trump's victory in the 2024 U.S. Presidential Election sent major indices to all-time highs, but stocks have retraced as investors debate the health of the economy and the potential impact of tariffs. While this leaves much uncertainty around 2025, a few companies are poised for long-term gains regardless of the political or macroeconomic climate, like our Top 6 Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025). Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
CNBC
13-05-2025
- Business
- CNBC
We're trimming a recent winner to help pay for our newest position in an overbought market
We're selling 80 shares of Texas Roadhouse at roughly $191. Following Tuesday's trade, Jim Cramer's Charitable Trust will own 450 shares of TXRH, decreasing its weighting to about 2.5% from 2.95%. We're partially offsetting the cash used to initiate a new position in GE Vernova with a trim of Texas Roadhouse to maintain some discipline to the slightly overbought S & P Short Range Oscillator. Shares of the steak restaurant chain have been a strong performer over the past few trading sessions. Since last Friday, the stock has rallied about 10% thanks to a reacceleration in comparable store sales through the first five weeks of the second quarter and a significant de-escalation in the U.S.-China trade war. The gains over this stretch flipped Texas Roadhouse from a loss to a year-to-date gain of roughly 5%, ahead of the broader market's decline of less than 1%. TXRH YTD mountain Texas Roadhouse YTD The same goes with our position in Texas Roadhouse, which we added to twice following President Donald Trump 's "liberation day" of "reciprocal tariffs," including a small one near $150 when the stock market was historically oversold right before the administration announced a 90-day pause on levies. Although the Texas Roadhouse quarter played out as we hoped with comps rebounding as the weather warmed up across the country and a solid uptick in share repurchases, we lowered our price target to $195 to reflect increased margin pressure tied to rising beef prices. With the stock price nearing our new target, we're capitalizing on this strength to lighten up on the position and downgrade the stock to our 2 rating. From this sale, we will realize a small gain of about 2% on stock purchased in early February 2024. (Jim Cramer's Charitable Trust is long TXRH, GEV. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust's portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.
Yahoo
17-04-2025
- Business
- Yahoo
Texas Roadhouse (TXRH): 3 Reasons We Love This Stock
Texas Roadhouse has followed the market's trajectory closely. The stock is down 10.6% to $162.91 per share over the past six months while the S&P 500 has lost 8.9%. This might have investors contemplating their next move. Given the weaker price action, is now a good time to buy TXRH? Find out in our full research report, it's free. With locations often featuring Western-inspired decor, Texas Roadhouse (NASDAQ:TXRH) is an American restaurant chain specializing in Southern-style cuisine and steaks. The number of dining locations a restaurant chain operates is a critical driver of how quickly company-level sales can grow. Texas Roadhouse operated 784 locations in the latest quarter. It has opened new restaurants at a rapid clip over the last two years, averaging 6% annual growth, much faster than the broader restaurant sector. When a chain opens new restaurants, it usually means it's investing for growth because there's healthy demand for its meals and there are markets where its concepts have few or no locations. Same-store sales is a key performance indicator used to measure organic growth at restaurants open for at least a year. Texas Roadhouse has been one of the most successful restaurant chains over the last two years thanks to skyrocketing demand within its existing dining locations. On average, the company has posted exceptional year-on-year same-store sales growth of 9.1%. If you've followed StockStory for a while, you know we emphasize free cash flow. Why, you ask? We believe that in the end, cash is king, and you can't use accounting profits to pay the bills. As you can see below, Texas Roadhouse's margin expanded by 2.7 percentage points over the last year. This is encouraging because it gives the company more optionality. Texas Roadhouse's free cash flow margin for the trailing 12 months was 7.4%. These are just a few reasons why we think Texas Roadhouse is a great business. With the recent decline, the stock trades at 22.3× forward price-to-earnings (or $162.91 per share). Is now the right time to buy? See for yourself in our in-depth research report, it's free. Donald Trump's victory in the 2024 U.S. Presidential Election sent major indices to all-time highs, but stocks have retraced as investors debate the health of the economy and the potential impact of tariffs. While this leaves much uncertainty around 2025, a few companies are poised for long-term gains regardless of the political or macroeconomic climate, like our Top 5 Strong Momentum Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 175% over the last five years. Stocks that made our list in 2019 include now familiar names such as Nvidia (+2,183% between December 2019 and December 2024) as well as under-the-radar businesses like Sterling Infrastructure (+1,096% five-year return). Find your next big winner with StockStory today for free. Sign in to access your portfolio
