Industry Overview - The U.S. restaurant industry is facing challenges such as high wages, food cost inflation, and declining traffic in 2024, following two years of strong growth [1][11] - The Zacks defined Retail – Restaurants industry is currently ranked in the bottom 41% of the Zacks Industry Rank, with a decline of 8.4% over the past year and a year-to-date return of negative 12.7% [1] Positive Performers - Despite the overall industry weakness, certain restaurant stocks have performed well year to date, suggesting potential investment opportunities [2] - Texas Roadhouse (TXRH) has shown a year-to-date stock increase of 40.3%, with expected revenue and earnings growth rates of 15.3% and 33.3%, respectively, for the current year [8] - Wingstop (WING) has a Zacks Rank 1 and reported positive earnings surprises in the last four quarters, with an expected earnings growth rate of 39.5% for the current year [9][21] Sales Performance - According to the Department of Commerce, restaurant and bar sales increased by 4.4% year over year and 0.3% month over month as of June [6] Earnings Expectations - Stocks with a Zacks Rank of 3 or better and a positive Earnings ESP have a 70% chance of beating earnings estimates, indicating potential for appreciation post-earnings release [7] - Both TXRH and WING are identified as stocks likely to beat earnings results this month, with TXRH having an Earnings ESP of +3.90% and WING at +3.08% [13][9] Operational Challenges - The restaurant industry is grappling with high operational costs, including increased pre-opening costs, marketing expenses, and costs related to sales-boosting initiatives, which are affecting profit margins [17][11] - Operators are focusing on digital innovation, sales-building initiatives, and cost-saving efforts to navigate these challenges [22]

By their very nature, these stocks carry above-average risk and volatility. Moreover, if a company's growth story is over or nearing its end, betting on it could lead to significant loss. Studies have shown that stocks with the best growth features consistently outperform the market. And for stocks that have a combination of a Growth Score of A or B and a Zacks Rank #1 (Strong Buy) or 2 (Buy), returns are even better. Earnings growth is arguably the most important factor, as stocks exhibiting exceptionally ...

When looking at the last two reports, this restaurant chain has recorded a strong streak of surpassing earnings estimates. The company has topped estimates by 1.68%, on average, in the last two quarters. Price and EPS Surprise The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter; the Most Accurate Estimate is a version of the Zacks Consensus whose definition is related to change. The idea here is that analysts revising their estimates right before an ear ...

However, it's pretty easy to find cutting-edge growth stocks with the help of the Zacks Growth Style Score (part of the Zacks Style Scores system), which looks beyond the traditional growth attributes to analyze a company's real growth prospects. Earnings Growth While cash is the lifeblood of any business, higher-than-average cash flow growth is more important and beneficial for growth-oriented companies than for mature companies. That's because, growth in cash flow enables these companies to expand their b ...

Therefore, the Zacks rating upgrade for Texas Roadhouse basically reflects positivity about its earnings outlook that could translate into buying pressure and an increase in its stock price. The Zacks Rank stock-rating system, which uses four factors related to earnings estimates to classify stocks into five groups, ranging from Zacks Rank #1 (Strong Buy) to Zacks Rank #5 (Strong Sell), has an impressive externally-audited track record, with Zacks Rank #1 stocks generating an average annual return of +25% s ...

However, it's pretty easy to find cutting-edge growth stocks with the help of the Zacks Growth Style Score (part of the Zacks Style Scores system), which looks beyond the traditional growth attributes to analyze a company's real growth prospects. Investors seek growth stocks to capitalize on above-average growth in financials that help these securities grab the market's attention and produce exceptional returns. However, it isn't easy to find a great growth stock. Here are three of the most important factor ...

Growth stocks are attractive to many investors, as above-average financial growth helps these stocks easily grab the market's attention and produce exceptional returns. But finding a growth stock that can live up to its true potential can be a tough task. By their very nature, these stocks carry above-average risk and volatility. Moreover, if a company's growth story is over or nearing its end, betting on it could lead to significant loss. However, it's pretty easy to find cutting-edge growth stocks with th ...

A company's changing earnings picture is at the core of the Zacks rating. The system tracks the Zacks Consensus Estimate -- the consensus measure of EPS estimates from the sell-side analysts covering the stock -- for the current and following years. The power of a changing earnings picture in determining near-term stock price movements makes the Zacks rating system highly useful for individual investors, since it can be difficult to make decisions based on rating upgrades by Wall Street analysts. These are ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 6040 Dutchmans Lane For the quarterly period ended March 26, 2024 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number 000-50972 Texas Roadhouse, Inc. (Exact name of registrant specified in its charter) (State or other juris ...

Financial Data and Key Metrics Changes - In Q1 2024, the company reported revenue of over $1.3 billion, reflecting a 12.5% growth year-over-year [12][106] - Same-store sales growth was 8.4%, driven by a 4.3% increase in traffic and a 4.1% increase in average check [12][106] - Diluted earnings per share increased by 31.4% to $1.69 [106] - Restaurant margin as a percentage of total sales increased by 148 basis points year-over-year to 17.4% [96] Business Line Data and Key Metrics Changes - Texas Roadhouse brand generated average weekly sales of over $163,000, while Bubba's 33 averaged over $120,000 in weekly sales [5][12] - Jaggers, the quick service brand, delivered nearly $68,000 in average weekly sales [14] - The company opened nine company-owned Texas Roadhouse locations in Q1 and expects to open an additional six in Q2, aiming for approximately 30 openings across all brands for the full year [17][12] Market Data and Key Metrics Changes - Comparable sales for the first five weeks of Q2 2024 were up 9.3%, with restaurants averaging sales of approximately $158,000 per week [106] - The company noted strong performance across the country, particularly in the South and Southeast regions [26] Company Strategy and Development Direction - The company is focused on enhancing the guest experience and maintaining quality and consistency in food and service [12][106] - There is a commitment to technology improvements, including the transition to Digital Kitchens, with 30% of the planned conversions completed [6][12] - The company is also preparing to launch a new employee management system called Roadie-First Technology [16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate commodity inflation, expecting full-year commodity inflation to be approximately 3% [94][106] - The company anticipates continued margin expansion, with a target of maintaining restaurant margins between 17% and 18% [37][106] - Management highlighted the importance of staffing stability and improved productivity as key factors driving operational success [31][104] Other Important Information - The company generated over $240 million in operating cash flow during Q1, funding over $125 million in capital expenditures, dividends, and share repurchases [105] - The company celebrated its Managing Partner of the Year awards during the conference call, recognizing outstanding contributions from its team [99] Q&A Session Summary Question: Can you share expected quarterly commodity inflation over the next couple of quarters? - Management acknowledged the uncertainty but indicated that they expect commodity inflation to increase in the second half of the year [20] Question: Was the growth in off-premise sales due to weather or other factors? - Management attributed the growth to improved execution in dining rooms and enhanced to-go processes [23][24] Question: What is the outlook for labor productivity gains? - Management noted that improved staffing and lower turnover have contributed to better labor productivity [31][32] Question: How does the company plan to balance capital priorities across brands? - Management indicated a focus on growth for all brands, with specific attention to franchise development for Jaggers [46] Question: What is the expected impact of the extra operating week on EPS? - Management estimated a 4% benefit to EPS from the additional operating week in 2024 [114] Question: How is the company addressing the mix and pricing dynamics? - Management reported a 4.9% price increase in Q1 and noted a slight negative mix impact, which has improved in early Q2 [152]