Texas Roadhouse - $TXRH - Earnings Analysis: Consistent comparable restaurant sales growth.
Business Model
Texas Roadhouse generates revenue primarily through restaurant sales, franchise royalties and fees.
Revenue Sources
- Restaurant and other sales contribute the majority of the revenue.
- Franchise royalties and fees provide an additional revenue stream.
Revenue Distribution by Channel
- To-go sales represent a significant portion of revenue, with average weekly to-go sales at company restaurants being $20,067 in Q4 2024.
Income Statement Analysis
- Total revenue increased by 23.5% due to comparable restaurant sales growth and store week growth.
- Income from operations increased by 65.4% due to higher sales and improved restaurant margins.
- Net income increased by 59.9% driven by higher restaurant margin dollars.
- Diluted earnings per share increased by 60.1% primarily driven by higher restaurant margin dollars.
Balance Sheet Analysis
- Total assets increased by 14.23% from December 26, 2023 to December 31, 2024.
- Total stockholders' equity increased by 19.00% from December 26, 2023 to December 31, 2024.
Cash Flow Analysis
- Net cash provided by operating activities increased by 33.39%.
- Cash and cash equivalents at the end of the period increased significantly.
Capital Allocation
Texas Roadhouse is focused on funding development growth (capital expenditures of $354.3 million), returning capital to shareholders (dividends of $162.9 million and repurchases of common stock of $79.8 million), and strategic acquisitions (acquisition of 13 franchise restaurants for approximately $78 million).
Management Commentary
We ended 2024 on an incredible note, which was highlighted by fourth quarter and full-year traffic growth at all three of our brands.
We are off to a strong start in 2025 with the completion of the previously announced acquisition of 13 franchise restaurants.
Overall Sentiment: Positive, with emphasis on growth, operational excellence, and shareholder returns.
Disclaimer: This report is for informational purposes only and not investment advice. The analysis is based on limited information and subject to change. Investing in securities involves risks, including potential loss of principal. Past performance doesn't guarantee future results. Always conduct your own research, understand the risks, and consult a financial professional before making investment decisions.