Please ensure Javascript is enabled for purposes of website accessibility

Why Texas Roadhouse Inc Shares Popped

By Brian D. Pacampara, CFA - Feb 23, 2016 at 1:01PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The restaurant operator soars on a solid Q4.

What: Shares of full-service restaurant operator Texas Roadhouse Inc (TXRH -0.96%) were up 13.8% at 11:45 a.m. EST on Tuesday after its quarterly results and outlook impressed Wall Street.

So what: Texas Roadhouse shares have climbed in recent months on optimism over accelerating growth, and Tuesday's Q4 results -- EPS of $0.32 topped the consensus by $0.02 on revenue growth of 12.3% -- coupled with solid guidance only reinforce that enthusiasm. In fact, same-store sales at company restaurants increased 4.5% while restaurant margin expanded 112 basis points to 17.6%, suggesting that its competitive position is strengthening nicely as well.

Now what: For 2016, management plans to open roughly 30 company restaurants -- including about seven Bubba's 33 locations -- and expects same-store sales growth to remain positive. "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," said CEO Kent Taylor. "Looking ahead, we will stay focused on solidifying our long-term brand position and capitalizing on our growth potential." Of course, with the shares hitting a new 52-week high Tuesday and trading at a P/E premium to the industry, investors might want to wait for the stock to cool off a bit before taking a big bite.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Texas Roadhouse, Inc. Stock Quote
Texas Roadhouse, Inc.
TXRH
$74.20 (-0.96%) $0.72

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
319%
 
S&P 500 Returns
112%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 06/29/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.