- By Mrinalini Chaudhuri
Texas Roadhouse Inc. (TXRH) is a growing restaurant company operating in the casual dining segment. It first opened in –99‘ and today operates over 485 restaurants systemwide in 49 states and four foreign countries.
The company recently posted strong fourth quarter results. It boasts of double-digit revenue and diluted EPS growth for both the fourth quarter and the full year.
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Warning! GuruFocus has detected 5 Warning Sign with TXRH. Click here to check it out.
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The intrinsic value of TXRH
Fourth quarter results
Total revenue during the fourth quarter was $454 million, a –—% increase from the prior-year quarter.
Income from operations during the fourth quarter of —…–5 was $‘‘ million. Net income increased by —4% year over year to $—— million.
Diluted EPS during the fourth quarter was ‘— cents. The company experienced comparable restaurant sales growth of 4.5% at franchise restaurants.
The company repurchased –89,7…… shares of its common stock for $6.7 million.
Dividends
On Feb. –9, the company's board of directors authorized the payment of a quarterly cash dividend of –9 cents per share of common stock. This payment will be distributed on April – to shareholders of record at the close of business on March –6.
Expectations for —…–6
The company expects the following:
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Income tax rate to be ‘…%.
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Total capex to range between $–65 million and $–75 million.
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The company plans to open ‘… new restaurants.
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Food cost deflation expected to be in the range of –% to —%.
Strong attributes of the fourth quarter
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Solid balance sheet.
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Considerable free cashflow.
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Top-line momentum.
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Double digit revenue.
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Diluted EPS growth.
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Strong sales.
Current focus
The company's current focuses are as follows:
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To manage costs.
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To facilitate franchisee development.
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To strengthen its position by international development and brand building.
(Source: Company’s website)
A peek into the restaurant industry
According to reports, the U.S. economy surged by 5% in the third quarter of —…–4 (since —……‘, this has been the strongest three-month period). Consumer behavior has changed and so the restaurants have come up with different marketing strategies – loyalty programs, ordering, etc.
As per the National Restaurant Association, restaurant industry sales are expected to reach $78‘ billion in —…–6 and will represent the seventh consecutive year of real growth in restaurant sales. Further, the association has predicted that the restaurant industry will remain the nation’s second-largest private sector employer with a workforce of –4.4 million and will create –.7 million new restaurant jobs by —…—6.