Why Is Texas Roadhouse Stock Surging Premarket Friday?

Texas Roadhouse Inc TXRH shares are trading higher after the company reported fourth-quarter results FY23.

Revenue rose 15.3% Y/Y to $1.164 billion, beating the consensus of $1.161 billion. Comparable restaurant sales rose 9.9% at company restaurants and 8.9% at domestic franchise restaurants.

Restaurant margin dollars grew 21.4% Y/Y to $176.7 million, led by higher sales, with restaurant margin expanding 75 basis points to 15.3% aided by higher sales.

Operating income rose 21.7% Y/Y to $83.8 million. EPS was $1.08, beating the consensus of $1.06. 

The company opened 12 company restaurants and seven franchise restaurants in the quarter.

Dividend: The company’s Board of Directors authorized the payment of a quarterly cash dividend per share of $0.61, representing an 11% increase from the quarterly cash dividend in 2023, payable on March 26, 2024, to shareholders of record as of March 13, 2024.

The company repurchased 40,707 shares of common stock for $4.8 million.

FY24 Outlook: Texas Roadhouse reiterated guidance for positive comparable restaurant sales growth (including the benefit of 2023 menu pricing actions), store week growth of about 8%, and capital expenditures of $340 million-$350 million.

The company currently projects commodity cost inflation of around 5% in FY24 and plans to implement a menu price increase of about 2.2% in late March this year.

The company also reported that comparable restaurant sales at company restaurants for the first 50 days of its first quarter of fiscal 2024 increased 6.8%.

Jerry Morgan, Chief Executive Officer, said, “As we move into 2024, our development pipeline is progressing as we anticipated with 19 new company restaurants under construction. We expect a more evenly distributed opening schedule will create efficiencies and positively impact store week growth.”

Also Read: Texas Roadhouse Downgraded: Analyst Cites Balanced Risk-Reward After Recent Outperformance

Price Action: TXRH shares are up 8.30% at $145.00 premarket on the last check Friday.

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