Texas Roadhouse's Juicy Q4 Sends Stock To New 52-Week High

Texas Roadhouse Inc TXRH reported Thursday fourth-quarter results, which prompted shares to hit a new 52-week high Friday morning.

What Happened

The Texas-themed steakhouse said it earned 61 cents per share in the fourth quarter on revenue of $725.238 million versus expectations of 52 cents per share and $713.8 million. Net income rose 40.7% year-over-year to $42.686 million although the results include an extra week compared to 2019.

Same-store sales during the fourth quarter rose 4.4% at company restaurants and 3.4% at franchised restaurants. Restaurant margin as a percentage of restaurant and other sales rose 117 basis points to 17.1% due to the extra week, a higher average check, and labor productivity. The company noted its performance was partially offset by wage rate and commodity inflation.

During the quarter the company opened 11 new restaurants, two of which were Bubba's 33 restaurants while three international franchise restaurants also opened.

Why It's Important

Texas Roadhouse CEO Kent Taylor said the restaurant chain ended 2019 on a "strong note," highlighted by double-digit revenue growth. Also, the company's streak of positive comparable restaurant sales now stands at 40.

Texas Roadhouse also increased its dividend payment by a double-digit for the seventh straight year and now stands at 36 cents per share.

What's Next

Taylor also said comparable restaurant sales growth trended at 6.4% for the first seven weeks of the year. Management reiterated multiple projections for 2020, including positive comparable restaurant sales growth, at least 30 new store openings, mid-single-digit growth in labor dollars per store week, and income tax rate between 14% and 15%.

The stock traded up 7.14% to $71.08 per share.

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