Texas Roadhouse Inc.
) first-quarter 2013 adjusted earnings of 37 cents per share beat
the Zacks Consensus Estimate of 35 cents by 5.7% and the
prior-year earnings per share of 31 cents by 19.8%. Increased
revenues along with efficient cost containment resulted in the
increase in earnings.
Total revenue climbed 11.0% from the prior-year quarter to
$359.7 million, benefiting from positive comparable sales growth.
Reported revenues inched past the Zacks Consensus Estimate of
$358.0 million. Comparable restaurant sales grew 3.5% at
company-owned restaurants and 4.5% at franchised restaurants.
During the quarter, restaurant operating margin dropped 17
basis points (bps) to 18.9% due to higher commodity costs. Food
cost inflation was at 7.2% in the quarter mainly driven by higher
During the quarter, Texas Roadhouse opened 3 company-owned and
2 franchised restaurants. At the end of 2012, the company
operated 397 restaurants, of which 321 were company-owned and 74
Texas Roadhouse remains on track to ramp up its development
pipeline in 2013. In 2013, the company aims to unveil 28 new
units. The development schedule is expected to be backend loaded
with two-third of openings taking place in the second half of the
For 2013, the company anticipates positive comparable sales
growth and food cost inflation in the range of 6.0% to 7.0%.
Comps at company restaurants for the first four weeks of its
second quarter of 2013 increased nearly 5.7%, indicating a strong
start to the next quarter.
Despite a tough consumer environment, Texas Roadhouse' ability
to continuously register solid comparable sales is commendable.
Comparable restaurant sales for the initial days of
second-quarter 2013 indicate another quarter of encouraging comps
Also, when the majority of the industry-players are shifting
focus toward franchised-based operation, the latest franchisee
acquisition speaks of Texas Roadhouse's confidence in its own
However, food cost pressure, wary consumer spending and
intense competition among restaurant companies remain headwinds.
Beef costs, to which the company is most exposed to, are expected
to remain high in 2013.
Texas Roadhouse currently retains a Zacks Rank #2 (Buy). One
of its peers,
) missed on both lines while two other restaurateurs
Yum! Brands Inc.
Brinker International Inc.
) beat earnings and missed revenues in the quarter.
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TEXAS ROADHOUSE (TXRH): Free Stock Analysis
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