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Texas Roadhouse (TXRH) Q2 Earnings: Unit Growth & Comps Hold Key
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Texas Roadhouse, Inc. (TXRH - Free Report) is scheduled to report second-quarter 2024 results on Jul 25, 2024, after market close. In the last reported quarter, the company reported an earnings surprise of 2.4%.
Q2 Expectations
The Zacks Consensus Estimate for second-quarter earnings per share (EPS) is pegged at $1.66, indicating growth of 36.1% from $1.22 reported in the year-ago quarter.
For revenues, the consensus mark is pegged at $1.34 billion. The metric suggests growth of 14.4% from the year-ago quarter’s figure.
Let’s discuss the factors that are likely to be reflected in the quarter to be reported.
Factors at Play
Texas Roadhouse’s second-quarter top line is likely to have increased year over year courtesy of new store expansions, digital platform and strategic menu pricing. This and the emphasis on Digital kitchen conversions and operational enhancements are likely to have aided the company’s performance in the to-be-reported quarter. The company’s transition to Digital Kitchens is progressing well, with 30% of the planned 200 conversions already completed.
Strength in comparable sales growth is likely to be reflected in the company’s second-quarter quarter top line. During the first quarter earnings call, the company revealed that comparable sales for the first five weeks of the second quarter were up 9.3%, with restaurants averaging sales of approximately $158,000 per week. We believe that attributes of attractive value propositions and traffic growth are likely to have upheld the momentum in the second quarter.
The solid performance of Bubba’s 33 and Jaggers is likely to have boosted TXRH’s performance in the second quarter. During the previous quarter, average weekly sales at Bubba’s 33 and Jaggers came in at $120,000 and $68,000, respectively. Given the strategic mix of company-owned and franchise locations coupled with efficiency in the service model, the momentum is likely to have persisted in the to-be-reported quarter.
The company’s second-quarter margins are likely to have benefited from favorable commodity cost trends, particularly in beef. While the company anticipates some inflationary pressures in the latter half of the year, the overall commodity inflation for 2024 is expected to be around 3%. Labor costs are expected to rise 4-5% for the full year, driven by wage inflation.
What the Zacks Model Unveils
Our proven model predicts an earnings beat for Texas Roadhouse this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat.
Earnings ESP: Texas Roadhouse has an Earnings ESP of +2.04%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Here are some other stocks worth considering from the Zacks Retail-Wholesale sector that investors may consider, as our model shows that these have the right combination of elements to post an earnings beat.
Brinker International, Inc. (EAT - Free Report) has an Earnings ESP of +6.50% and a Zacks Rank #1.
The company's shares have gained 76.1% in the past year. EAT’s earnings beat estimates in all of the trailing four quarters, the average surprise being 213.4%.
Shake Shack Inc. (SHAK - Free Report) has an Earnings ESP of +1.21% and a Zacks Rank #3.
The company’s shares have increased 9.3% in the past year. SHAK’s earnings beat estimates in all of the trailing four quarters, the average surprise being 73%.
Yum! Brands, Inc. (YUM - Free Report) currently has an Earnings ESP of +1.33% and a Zacks Rank of 3.
Shares of YUM have declined 7.8% in the past year. YUM’s earnings beat estimates in two of the trailing four quarters and lagged twice. It has an average surprise of 3.9%.
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Texas Roadhouse (TXRH) Q2 Earnings: Unit Growth & Comps Hold Key
Texas Roadhouse, Inc. (TXRH - Free Report) is scheduled to report second-quarter 2024 results on Jul 25, 2024, after market close. In the last reported quarter, the company reported an earnings surprise of 2.4%.
Q2 Expectations
The Zacks Consensus Estimate for second-quarter earnings per share (EPS) is pegged at $1.66, indicating growth of 36.1% from $1.22 reported in the year-ago quarter.
For revenues, the consensus mark is pegged at $1.34 billion. The metric suggests growth of 14.4% from the year-ago quarter’s figure.
Texas Roadhouse, Inc. Price and EPS Surprise
Texas Roadhouse, Inc. price-eps-surprise | Texas Roadhouse, Inc. Quote
Let’s discuss the factors that are likely to be reflected in the quarter to be reported.
Factors at Play
Texas Roadhouse’s second-quarter top line is likely to have increased year over year courtesy of new store expansions, digital platform and strategic menu pricing. This and the emphasis on Digital kitchen conversions and operational enhancements are likely to have aided the company’s performance in the to-be-reported quarter. The company’s transition to Digital Kitchens is progressing well, with 30% of the planned 200 conversions already completed.
Strength in comparable sales growth is likely to be reflected in the company’s second-quarter quarter top line. During the first quarter earnings call, the company revealed that comparable sales for the first five weeks of the second quarter were up 9.3%, with restaurants averaging sales of approximately $158,000 per week. We believe that attributes of attractive value propositions and traffic growth are likely to have upheld the momentum in the second quarter.
The solid performance of Bubba’s 33 and Jaggers is likely to have boosted TXRH’s performance in the second quarter. During the previous quarter, average weekly sales at Bubba’s 33 and Jaggers came in at $120,000 and $68,000, respectively. Given the strategic mix of company-owned and franchise locations coupled with efficiency in the service model, the momentum is likely to have persisted in the to-be-reported quarter.
The company’s second-quarter margins are likely to have benefited from favorable commodity cost trends, particularly in beef. While the company anticipates some inflationary pressures in the latter half of the year, the overall commodity inflation for 2024 is expected to be around 3%. Labor costs are expected to rise 4-5% for the full year, driven by wage inflation.
What the Zacks Model Unveils
Our proven model predicts an earnings beat for Texas Roadhouse this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat.
Earnings ESP: Texas Roadhouse has an Earnings ESP of +2.04%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: The company has a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Stocks Poised to Beat Earnings Estimates
Here are some other stocks worth considering from the Zacks Retail-Wholesale sector that investors may consider, as our model shows that these have the right combination of elements to post an earnings beat.
Brinker International, Inc. (EAT - Free Report) has an Earnings ESP of +6.50% and a Zacks Rank #1.
The company's shares have gained 76.1% in the past year. EAT’s earnings beat estimates in all of the trailing four quarters, the average surprise being 213.4%.
Shake Shack Inc. (SHAK - Free Report) has an Earnings ESP of +1.21% and a Zacks Rank #3.
The company’s shares have increased 9.3% in the past year. SHAK’s earnings beat estimates in all of the trailing four quarters, the average surprise being 73%.
Yum! Brands, Inc. (YUM - Free Report) currently has an Earnings ESP of +1.33% and a Zacks Rank of 3.
Shares of YUM have declined 7.8% in the past year. YUM’s earnings beat estimates in two of the trailing four quarters and lagged twice. It has an average surprise of 3.9%.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.