LOUISVILLE - Texas Roadhouse Inc. (NASDAQ:TXRH) reported a profit beat for the second quarter, with earnings per share (EPS) coming in at $1.79, surpassing the analyst estimate of $1.64.
Revenue matched analyst expectations at $1.34 billion. Following the announcement, shares of the company increased by 2%, indicating investor optimism in response to the company's financial performance.
The restaurant chain experienced a significant increase in comparable sales, with a 9.3% rise at company restaurants and an 8.3% increase at domestic franchise locations. Average weekly sales at company restaurants also saw a boost to $158,991, with to-go sales contributing $19,975, an uptick from the previous year's figures.
The improved sales, coupled with a higher average guest check and better labor productivity, led to a 32.7% increase in restaurant margin dollars to $242.6 million.
CEO Jerry Morgan attributed the strong quarter to robust traffic trends and some relief on commodity inflation, which led to heightened profitability across all brands. Morgan expressed confidence in the company's position for the remainder of the year, highlighting the growth of international franchise locations and the unveiling of Texas Roadhouse's first purpose statement.
Looking ahead, the management updated its 2024 outlook, expecting store week growth of approximately 7.5%, including a 2% benefit from an additional week in the fiscal year. The company anticipates commodity cost inflation of around 2% and an effective income tax rate of about 14.5%.
Capital expenditures are projected to be between $360 million and $370 million. The company also reiterated its expectation of positive comparable restaurant sales growth, including the benefit of menu pricing actions, and wage and other labor inflation of 4% to 5%.
Texas Roadhouse's performance in the second quarter and its updated outlook for 2024 reflect the company's resilience and strategic growth initiatives. With continued focus on serving communities and providing legendary food and service, the company aims to maintain its momentum and enhance long-term shareholder value.
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