Texas Roadhouse Inc (NASDAQ:TXRH) announced financial results for the 13 and 52 week periods ended December 29, 2015.
Results for the fourth quarter included the following highlights:
- Comparable restaurant sales growth of 4.5% at company restaurants and 4.0% at franchise restaurants;
- Restaurant margin, as a percentage of restaurant sales, increased 112 basis points to 17.6%, primarily driven by lower other operating costs and lower food costs;
- Diluted earnings per share increased 22.7% to $0.32 from $0.26 in the prior year;
- Seven company-owned Texas Roadhouse restaurants were opened; and,
- The Company repurchased 189,700 shares of its common stock for $6.7 million.
Results for the full year included the following highlights:
- Comparable restaurant sales growth of 7.2% at company restaurants and 6.5% at franchise restaurants;
- Restaurant margin, as a percentage of restaurant sales, decreased 30 basis points to 17.3%. Food cost inflation of approximately 4.9%, driven by beef, more than offset the impact of higher average unit volume;
- Diluted earnings per share increased 11.1% to $1.37 from $1.23 in the prior year;
- 29 company-owned restaurants were opened, including four Bubba’s 33 restaurants; and,
- The Company repurchased 321,789 shares of its common stock for $11.4 million.
Kent Taylor, Chief Executive Officer of Texas Roadhouse, Inc., commented, “We ended the year on a strong note, with double digit revenue and diluted earnings per share growth for both the fourth quarter and the full year. This represents our 24th consecutive quarter of positive comparable restaurant sales growth, which is a testament to our Managing Partners. In addition, our solid balance sheet and healthy cash flow allowed us to open 29 restaurants, while returning $58 million of excess capital to shareholders through quarterly dividend payments and share repurchases throughout the year.”
Taylor continued, “We have assembled a substantial pipeline of new locations and are on track to open approximately 30 company restaurants this year. Our top-line momentum has continued into 2016 and we are pleased to have seen continued traffic growth during the first seven weeks of the year. Looking ahead, we will stay focused on solidifying our long-term brand position and capitalizing on our growth potential.”
The Company reported that comparable restaurant sales growth of at company restaurants for the first seven weeks of its first quarter of fiscal 2016 was approximately 4.4% compared to the prior year period.
Management updated the following expectations for 2016:
- Approximately 30 company restaurant openings, including approximately seven Bubba’s 33 restaurants;
- 1.0% to 2.0% food cost deflation;
- An income tax rate of approximately 30.0%; and,
- Total capital expenditures of $165.0 million to $175.0 million.
Management reiterated the expectation of positive comparable restaurant sales growth for 2016.
Cash Dividend Payment
On February 19, 2016, the Company’s Board of Directors authorized the payment of a quarterly cash dividend of $0.19 per share of common stock. This payment, which will be distributed on April 1, 2016 to shareholders of record at the close of business on March 16, 2016, represents a 12% increase from the cash dividend of $0.17 per share of common stock declared during each quarter of 2015 and represents our fifth consecutive year of dividend payments. (Original Source)
Shares of Texas Roadhouse are up nearly 5% in after-hours trading. TXRH has a 1-year high of $40.82 and a 1-year low of $31.55. The stock’s 50-day moving average is $36.00 and its 200-day moving average is $36.01.
On the ratings front, TXRH has been the subject of a number of recent research reports. In a report issued on November 5, Morgan Stanley analyst John Glass downgraded TXRH to Sell, with a price target of $32, which reflects a potential downside of -13.9% from last closing price. Separately, on November 3, Barclays’ Jeffrey Bernstein maintained a Buy rating on the stock and has a price target of $43.
According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, John Glass and Jeffrey Bernstein have a total average return of 10.8% and 7.5% respectively. Glass has a success rate of 60.0% and is ranked #435 out of 3637 analysts, while Bernstein has a success rate of 69.7% and is ranked #226.
Texas Roadhouse Inc is a full-service, casual dining restaurant company. It offers steaks, ribs, fish, seafood, chicken, pork chops, pulled pork and vegetable plates, and an assortment of hamburgers, salads and sandwiches.