Company Description
Texas Roadhouse has over 325 self-titled casual dining restaurants across 46 states. A majority of the locations are company owned, but there are about 70 franchised restaurants.
Earnings are Sizzling
On May 3 Texas Roadhouse reported first-quarter results that showed a 6% increase in total revenue, to $260 million. The company opened 3 new locations and saw comparable sales increase in both franchised and company owned restaurants.
Net income jumped 34% to over $19 million on increasing margins. The restaurant margin improved 218 bps to just over 20%.
Analysts React
Immediately following the news, all 16 covering analysts raised full-year earnings estimates, driving the consensus up 7 cents, to 82 cents. Next year's average estimate is up 4 cents, to 91 cents.
If Texas Roadhouse can hit these levels, year-over-year growth will be 23% and 11%, respectively. Currently, that growth is fairly priced, with a PEG ratio of 1.0. Shares are trading at about 18 times forward earnings.
Expanding Internationally
On May 6 Texas Roadhouse inked their first agreement for an international franchise. A Kuwaiti retailer agreed to build 35 locations throughout the Middle East within the next 10 years. That is more than a 10% increase in locations.
The Chart
Below you can see that drastic turn around in earnings estimates over the past year and a half. Texas Roadhouse was hit hard by the recession but has bounced back with authority.
http://www.texasroadhouse.com/
http://www.google.com/finance?q=NASDAQ:TXRH
http://www.reuters.com/finance/stocks/overview?symbol=TXRH.O
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