Texas Roadhouse has better prospects

Article Excerpt

TEXAS ROADHOUSE $59.73 (Nasdaq symbol TXRH; TSINetwork Rating: Extra Risk) (502-426-9984; www.texasroadhouse.com; Shares o/s: 71.7 million; Market cap: $4.3 billion; Divd yield: 2.0%) is a full-service, casual-dining chain with 582 locations spread across 49 U.S. states and 10 foreign countries. Its restaurants operate under two banners—Texas Roadhouse (557 locations) and Bubba’s 33 (25). Most outlets are company-owned restaurants. In the three months ended December 31, 2018, overall revenue for Texas Roadhouse rose 11.2%, to $605.9 million from $545.1 million a year earlier. Increased customer traffic, higher prices and new outlets contributed to the gain. Same-store sales increased 5.6% for company-owned restaurants and 4.8% for franchised locations. Earnings rose 6.0%, to $30.3 million, or $0.42 per share, from $28.6 million, or $0.40, a year earlier. The increase was due to the higher revenue and lower income tax expense. That was partially offset by higher labour costs. Customers accept menu price increases To boost profitability, Texas Roadhouse increased menu prices by about 1.7% in mid-November. It…

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