Sit-Down Dining Stocks Q2 In Review: Texas Roadhouse (NASDAQ:TXRH) Vs Peers
As the craze of earnings season draws to a close, here’s a look back at some of the most exciting (and some less so) results from Q2. Today, we are looking at sit-down dining stocks, starting with Texas Roadhouse (NASDAQ:TXRH).
Sit-down restaurants offer a complete dining experience with table service. These establishments span various cuisines and are renowned for their warm hospitality and welcoming ambiance, making them perfect for family gatherings, special occasions, or simply unwinding. Their extensive menus range from appetizers to indulgent desserts and wines and cocktails. This space is extremely fragmented and competition includes everything from publicly-traded companies owning multiple chains to single-location mom-and-pop restaurants.
The 13 sit-down dining stocks we track reported a mixed Q2. As a group, revenues were in line with analysts’ consensus estimates.
Big picture, the Federal Reserve has a dual mandate of inflation and employment. The former had been running hot throughout 2021 and 2022 but cooled towards the central bank's 2% target as of late. This prompted the Fed to cut its policy rate by 50bps (half a percent) in September 2024. Given recent employment data that suggests the US economy could be wobbling, the markets will be assessing whether this rate and future cuts (the Fed signaled more to come in 2024 and 2025) are the right moves at the right time or whether they're too little, too late for a macro that has already cooled.
In light of this news, sit-down dining stocks have held steady with share prices up 2.3% on average since the latest earnings results.
Texas Roadhouse (NASDAQ:TXRH)
With locations often featuring Western-inspired decor, Texas Roadhouse (NASDAQ:TXRH) is an American restaurant chain specializing in Southern-style cuisine and steaks.
Texas Roadhouse reported revenues of $1.34 billion, up 14.5% year on year. This print was in line with analysts’ expectations, and overall, it was a satisfactory quarter for the company with a decent beat of analysts’ earnings estimates.
Jerry Morgan, Chief Executive Officer of Texas Roadhouse, Inc. commented, “We continued our momentum in the current quarter as strong traffic trends and some relief on commodity inflation led to increased profitability across all of our brands. With our operators delivering solid operating results, and a balanced development pipeline, we are well positioned for the second half of the year.”
Interestingly, the stock is up 4.2% since reporting and currently trades at $173.05.
Is now the time to buy Texas Roadhouse? Access our full analysis of the earnings results here, it’s free.
Best Q2: BJ's (NASDAQ:BJRI)
Founded in 1978 in California, BJ’s Restaurants (NASDAQ:BJRI) is a chain of restaurants whose menu features classic American dishes, often with a twist.
BJ's reported revenues of $349.9 million, flat year on year, in line with analysts’ expectations. The business had a very strong quarter with a solid beat of analysts’ earnings estimates.
Although it had a fine quarter compared its peers, the market seems unhappy with the results as the stock is down 10% since reporting. It currently trades at $33.51.
Is now the time to buy BJ's? Access our full analysis of the earnings results here, it’s free.
Weakest Q2: Denny's (NASDAQ:DENN)
Open around the clock, Denny’s (NASDAQ:DENN) is a chain of diner restaurants serving breakfast and traditional American fare.
Denny's reported revenues of $115.9 million, flat year on year, falling short of analysts’ expectations by 2.6%. It was a disappointing quarter as it posted a miss of analysts’ earnings estimates.
As expected, the stock is down 17.5% since the results and currently trades at $6.33.
Read our full analysis of Denny’s results here.
Darden (NYSE:DRI)
Started in 1968 as the famous seafood joint, Red Lobster, Darden (NYSE:DRI) is a leading American restaurant company that owns and operates a portfolio of popular restaurant brands.
Darden reported revenues of $2.76 billion, flat year on year. This result came in 1.5% below analysts' expectations. It was a slower quarter as it also produced a miss of analysts’ earnings estimates and underwhelming earnings guidance for the full year.
The stock is flat since reporting and currently trades at $157.63.
Read our full, actionable report on Darden here, it’s free.
The Cheesecake Factory (NASDAQ:CAKE)
Celebrated for its delicious (and free) brown bread, gigantic portions, and delectable desserts, Cheesecake Factory (NASDAQ:CAKE) is an iconic American restaurant chain that also owns and operates a portfolio of separate restaurant brands.
The Cheesecake Factory reported revenues of $904 million, up 4.4% year on year. This result was in line with analysts’ expectations. Zooming out, it was a mixed quarter as it failed to impress in some other areas of the business.
The stock is up 2.2% since reporting and currently trades at $39.80.
Read our full, actionable report on The Cheesecake Factory here, it’s free.
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