Stocks finished mixed on Wednesday, with the Dow Jones Industrial Average (DJINDICES: ^DJI) ticking up to log another record close while the S&P 500 (SNPINDEX: ^GSPC) declined slightly.
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Financial stocks attracted heavy investor attention on a day when the Federal Reserve published its latest meeting minutes, in which it contemplated an interest rate hike in the near future. Though volatile, the Financial Select Sector SPDR ETF (NYSEMKT: XLF) closely tracked the broader market with just minor gains.
A decline in gold prices , on the other hand, produced a 4% drop for the Direxion Daily Gold Miners Bull 3X (NYSEMKT: NUGT) exchange-traded fund.
As for individual stocks, Texas Roadhouse (NASDAQ: TXRH) and Garmin (NASDAQ: GRMN) made large moves following their quarterly earnings announcements.
Texas Roadhouse slows down
Texas Roadhouse shares dove by 12% after the restaurant chain announced fourth-quarter results that showed weakening operating momentum. Sales at existing locations increased by 1.2%, or far lower than the 3.8% pace that the company enjoyed in October, the first month of the quarter. The chain's previous full quarter's rate was also solidly higher, at 3.4%. Increased costs, especially wages, pushed restaurant margin lower, too, which contributed to a 10% year-over-year profit decline to $0.29 per share.
Executives highlighted the company's healthy full-year results that included comps gains of 3.5% amid higher profitability. "We are pleased to deliver another strong year of results including a 19% increase in diluted earnings per share driven by double-digit revenue growth and restaurant margin expansion," CEO Kent Taylor said in a press release.
Taylor and his team still forecast comps growth in 2017, but the year is starting off on a soft note: Comps were 1.5% through the first 55 days of the year.
Texas Roadhouse has a large market opportunity ahead, and executives plan to open 30 new restaurants to keep the same aggressive expansion pace as last year. Yet growth at existing locations will be harder to achieve as its streak of six consecutive years of customer traffic gains ends.
Garmin's bright holiday
Garmin shares jumped 7% following encouraging operating news from the GPS device maker. Sales over the crucial holiday quarter improved by 10% despite a 17% decline in its single biggest product category: automotive.
The company completely offset weakness in that division thanks to a big spike in its wearables portfolio. Its newest lines of watches and fitness trackers resonated with shoppers over the holidays and sent revenue higher by 46% in Garmin's outdoor segment and by 20% in its fitness division. Fourth-quarter gross profit margin jumped to 55% of sales from 53% a year ago.
"2016 was a remarkable year of growth driven by strong sales in our outdoor, fitness, marine, and aviation segments," CEO Cliff Pemble said in a press release.
Garmin's results look even better when judged against rival Fitbit , which saw a sharp decline in both sales and profitability over the holiday quarter. Garmin entered the market far behind the wearables specialist, but a few years of focused investments and design innovations have helped it steal significant market share. Pemble and his team see that positive momentum continuing into 2017 as overall revenue inches higher and profitability holds steady at near 60%.
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