Texas Roadhouse's (NASDAQ:TXRH) Q1 Earnings Results: Revenue In Line With Expectations

Restaurant company Texas Roadhouse (NASDAQ:TXRH) reported results in line with analysts' expectations in Q1 CY2024, with revenue up 12.5% year on year to $1.32 billion. It made a GAAP profit of $1.69 per share, improving from its profit of $1.28 per share in the same quarter last year.

Is now the time to buy Texas Roadhouse? Find out by accessing our full research report, it's free.

Jerry Morgan, Chief Executive Officer of Texas Roadhouse, Inc. commented, “We are off to a tremendous start in 2024 with strong traffic trends continuing to drive our sales growth. These results demonstrate the success of our operators’ commitment to providing legendary food and service to each guest on every shift.”

With locations often featuring Western-inspired decor, Texas Roadhouse (NASDAQ:TXRH) is an American restaurant chain specializing in Southern-style cuisine and steaks.

Sit-Down Dining

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.

Sales Growth

Texas Roadhouse is one of the larger restaurant chains in the industry and benefits from a strong brand, giving it customer mindshare and influence over purchasing decisions.

As you can see below, the company's annualized revenue growth rate of 13.6% over the last five years was impressive as it added more dining locations and increased sales at existing, established restaurants.

This quarter, Texas Roadhouse's revenue grew 12.5% year on year to $1.32 billion, falling short of Wall Street's estimates. Looking ahead, Wall Street expects sales to grow 12.9% over the next 12 months, an acceleration from this quarter.

Unless you’ve been living under a rock, it should be obvious by now that generative AI is going to have a huge impact on how large corporations do business. While Nvidia and AMD are trading close to all-time highs, we prefer a lesser-known (but still profitable) semiconductor stock benefitting from the rise of AI. Click here to access our free report on our favorite semiconductor growth story.

Same-Store Sales

Texas Roadhouse's demand has outpaced the broader restaurant sector over the last eight quarters. On average, the company has grown its same-store sales by a robust 8.9% year on year. With positive same-store sales growth amid an increasing number of restaurants, Texas Roadhouse is reaching more diners and growing sales.

In the latest quarter, Texas Roadhouse's same-store sales rose 8.4% year on year. This growth was a deceleration from the 12.9% year-on-year increase it posted 12 months ago, showing the business is still performing well but lost a bit of steam.

Key Takeaways from Texas Roadhouse's Q1 Results

We enjoyed seeing Texas Roadhouse exceed analysts' same store sales estimates this quarter, although revenue still missed slightly. Guidance for the full year was maintained, showing the company is staying on track. Overall, this quarter's results seemed fairly positive and shareholders should feel optimistic. The stock is up 3.2% after reporting and currently trades at $162.99 per share.

Texas Roadhouse may have had a good quarter, but does that mean you should invest right now? When making that decision, it's important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here, it's free.