Is it Time To Shift Focus To Texas Roadhouse Inc (NASDAQ:TXRH)?


Texas Roadhouse Inc (NASDAQ:TXRH) ended the last trading session with a gain of 1.27%. The volume of the day at 657,000 wasn’t much lower than the daily average of 713,000, keeping with the higher volume pattern seen in the last few days. The price action of the day saw the closing price of $36.02 being the same with the day high of $36.02, almost identical with the day open too and formed a Bullish Hammer candle pattern. As the name itself denotes, the short term implication is bullish but it must be confirmed with another couple of positive sessions.


Casual steakhouses are not the hot ideas they were back in the 1990s, but Texas Roadhouse Inc (NASDAQ:TXRH) is gaining the most of its comfort food. Whether it is the value-priced steaks or the signature yeast rolls served on arrival, carnivores keep flocking to restaurant in greater numbers.

Comps surged 8.2% in its recent quarter, but still there are problems to resolve. Rising costs of beef have taken resulting in contraction of margins in the foreseeable period, but Texas Roadhouse is not facing a roadblock passing along the cost increase to its patrons.

The industry

Chipotle Mexican Grill, Inc. (NYSE:CMG) clearly remains a market darling. However, it is not the single firm that is accomplishing a great job of attracting customers. The list also includes Texas Roadhouse and Dave & Buster’s Entertainment, Inc. (NASDAQ:PLAY). Chipotle is termed as the golden standard in respective fast casual industry. Everything appears to be moving at a heady clip, and it was evident in its recent quarterly report.

But with growth slowing at Chipotle, YOY sales surged its lowest rate in years. This is making investors wonder of there are publicly listed restaurant chains that are expanding faster? There are faster firms out there. In last quarter, Texas Roadhouse recorded robust comparable-restaurant sales growth and surprised market participants.

The performance

The second firm that has played out remarkably well is Dave & Buster’s. The chain of restaurants has seen its stock price more than double since becoming public. The 11% YOY gain in comps is the result of a 12.1% jump in walk-in sales and 2.2% increase in special event sales. This shows the retail popularity of company is expanding faster compared to what the comps tally indicates.

Texas Roadhouse reported that it will issue 3Q2015 results on November 2 after the market hours.

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