Texas Roadhouse's (NASDAQ:TXRH) Q4 Earnings Results: Revenue In Line With Expectations (2024)
Anthony Lee
·4 min read
Restaurant company Texas Roadhouse (NASDAQ:TXRH) reported results in line with analysts' expectations in Q4 FY2023, with revenue up 15.3% year on year to $1.16 billion. It made a GAAP profit of $1.08 per share, improving from its profit of $0.89 per share in the same quarter last year.
Revenue: $1.16 billion vs analyst estimates of $1.16 billion (small beat)
EPS: $1.08 vs analyst estimates of $1.07 (small beat)
Free Cash Flow of $71.11 million, up from $13.19 million in the previous quarter
Gross Margin (GAAP): 15.8%, up from 15.1% in the same quarter last year
Same-Store Sales were up 9.9% year on year (beat vs. expectations)
Same-Store Sales Guidance for 2024: positive growth (reiterated from previous)
Store Locations: 741 at quarter end, increasing by 44 over the last 12 months
Market Capitalization: $8.84 billion
Jerry Morgan, Chief Executive Officer of Texas Roadhouse, Inc. commented, “We had another outstanding year in 2023, which was highlighted by double-digit same store sales growth and a record number of new system-wide openings across all three brands. We are extremely thankful to our operators for their exceptional leadership and all Roadies who make dining at our restaurants such a legendary experience.”
With locations often featuring Western-inspired decor, Texas Roadhouse (NASDAQ:TXRH) is an American restaurant chain specializing in Southern-style cuisine and steaks.
Sit-Down Dining
Sit-down restaurants offer a complete dining experience with table service. These establishments span various cuisines and are renowned for their warm hospitality and welcoming ambiance, making them perfect for family gatherings, special occasions, or simply unwinding. Their extensive menus range from appetizers to indulgent desserts and wines and co*cktails. This space is extremely fragmented and competition includes everything from publicly-traded companies owning multiple chains to single-location mom-and-pop restaurants.
Sales Growth
Texas Roadhouse is one of the larger restaurant chains in the industry and benefits from a strong brand, giving it customer mindshare and influence over purchasing decisions.
As you can see below, the company's annualized revenue growth rate of 13.9% over the last four years (we compare to 2019 to normalize for COVID-19 impacts) was impressive as it added more dining locations and increased sales at existing, established restaurants.
This quarter, Texas Roadhouse's year-on-year revenue growth clocked in at 15.3%, and its $1.16 billion in revenue was in line with Wall Street's estimates. Looking ahead, Wall Street expects sales to grow 11.7% over the next 12 months, a deceleration from this quarter.
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Same-Store Sales
Same-store sales growth is a key performance indicator used to measure organic growth and demand for restaurants.
Texas Roadhouse's demand has outpaced the broader restaurant sector over the last eight quarters. On average, the company has grown its same-store sales by a robust 10% year on year. This performance suggests its steady rollout of new restaurants could be beneficial for shareholders. When a company has strong demand, more locations should help it reach more customers seeking its meals.
In the latest quarter, Texas Roadhouse's same-store sales rose 9.9% year on year. This growth was an acceleration from the 7.1% year-on-year increase it posted 12 months ago, which is always an encouraging sign.
Key Takeaways from Texas Roadhouse's Q4 Results
This is a prime example of a quarter that shows a company is staying on track. Both revenue and EPS slightly exceeded expectations in the quarter, based on a same-store sales beat. 2024 guidance was reiterated from the previous time Texas Roadhouse provided an outlook. This outlook specifically called for positive same-store sales next year. The stock is flat after reporting and currently trades at $135 per share.
Texas Roadhouse (TXRH) Q4 Earnings: Taking a Look at Key Metrics Versus Estimates. Texas Roadhouse (TXRH) reported $1.16 billion in revenue for the quarter ended December 2023, representing a year-over-year increase of 15.3%. EPS of $1.08 for the same period compares to $0.89 a year ago.
Restaurant company Texas Roadhouse (NASDAQ:TXRH) reported results in line with analysts' expectations in Q4 FY2023, with revenue up 15.3% year on year to $1.16 billion. It made a GAAP profit of $1.08 per share, improving from its profit of $0.89 per share in the same quarter last year.
Indeed, a Texas Roadhouse restaurant makes on average $4,789,000 in sales per year. This makes sense in light of the average order value which is higher vs. common fast food restaurants where spend per head is around $10-20 instead.
Here's why the quarterly financial results were worth celebrating: Texas Roadhouse grew its Q4 revenue by 15% year over year to nearly $1.2 billion. The company didn't only grow its revenue by opening new restaurant locations; it also grew its same-store sales by 10% in 2023, which is encouraging.
According to Texas Roadhouse 's latest financial reports the company's current revenue (TTM) is $4.63 B. In 2022 the company made a revenue of $4.01 B an increase over the years 2021 revenue that were of $3.46 B. The revenue is the total amount of income that a company generates by the sale of goods or services.
Net income in the fourth quarter was $1.4 billion, or $1.49 per share. Earnings per share included a 3-cent benefit for items that were not in our original guidance. Let me now comment on our capital management results, starting with our cash generation. Cash flow from operations was $1.9 billion in the quarter.
Texas Roadhouse, Inc.'s ( TXRH ) dividend yield is 1.63%, which means that for every $100 invested in the company's stock, investors would receive $1.63 in dividends per year. Texas Roadhouse, Inc.'s payout ratio is 48.28% which means that 48.28% of the company's earnings are paid out as dividends.
Approximately 84.05% of the company's stock is owned by Institutional Investors, 6.92% is owned by Insiders and 9.03% is owned by Public Companies and Individual Investors. The ownership structure of Texas Roadhouse (TXRH) stock is a mix of institutional, retail and individual investors.
Total debt on the balance sheet as of December 2023 : $0.77 B. According to Texas Roadhouse 's latest financial reports the company's total debt is $0.77 B. A company's total debt is the sum of all current and non-current debts.
The Success of Texas Roadhouse. The secret to our success, first and foremost, is our Legendary food and service. Complimentary fresh baked bread and peanuts, hand-cut steaks daily, with 2 made from scratch sides, and Fall-Off-The-Bone-Ribs are few other reasons why our guests love dining with us.
Some of the highest wages a worker can make at Texas Roadhouse are in the job titles Restaurant Managing Partner ($63,000), and title Restaurant Manager ($63,000) which are the highest paying jobs at Texas Roadhouse.
The initial franchise fee is $40,000, which grants you the right to operate a Texas Roadhouse restaurant under their brand name. Additionally, there are ongoing royalty fees of 5% of gross sales and an advertising fee of 2.5% of gross sales.
The state with the most Texas Roadhouse locations is Texas, with 76 restaurants. This is about 12% of all Texas Roadhouse locations in the United States. The city with the most Texas Roadhouse locations is Fort Worth, with 4 locations.
Regarding the stock's valuation, with a share price of $147.9 and a GuruFocus Value of $125.08, Texas Roadhouse Inc has a price-to-GF-Value ratio of 1.18. This suggests that the stock is modestly overvalued when considering the intrinsic value estimate provided by GuruFocus.
The average Server base salary at Texas Roadhouse is $17 per hour. The average additional pay is $11 per hour, which could include cash bonus, stock, commission, profit sharing or tips.
Based on 24 Wall Street analysts offering 12 month price targets for Texas Roadhouse in the last 3 months. The average price target is $145.62 with a high forecast of $175.00 and a low forecast of $118.00. The average price target represents a -5.73% change from the last price of $154.47.
Introduction: My name is Arielle Torp, I am a comfortable, kind, zealous, lovely, jolly, colorful, adventurous person who loves writing and wants to share my knowledge and understanding with you.
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