Winners And Losers Of Q3: Texas Roadhouse (NASDAQ:TXRH) Vs The Rest Of The Sit-Down Dining Stocks
Quarterly earnings results are a good time to check in on a company’s progress, especially compared to its peers in the same sector. Today we are looking at Texas Roadhouse (NASDAQ:TXRH) and the best and worst performers in the sit-down dining industry.
Sit-down restaurants offer a complete dining experience with table service. These establishments span various cuisines and are renowned for their warm hospitality and welcoming ambiance, making them perfect for family gatherings, special occasions, or simply unwinding. Their extensive menus range from appetizers to indulgent desserts and wines and cocktails. This space is extremely fragmented and competition includes everything from publicly-traded companies owning multiple chains to single-location mom-and-pop restaurants.
The 12 sit-down dining stocks we track reported a slower Q3. As a group, revenues missed analysts’ consensus estimates by 0.9%.
In light of this news, share prices of the companies have held steady. On average, they are relatively unchanged since the latest earnings results.
Texas Roadhouse (NASDAQ:TXRH)
With locations often featuring Western-inspired decor, Texas Roadhouse (NASDAQ:TXRH) is an American restaurant chain specializing in Southern-style cuisine and steaks.
Texas Roadhouse reported revenues of $1.27 billion, up 13.5% year on year. This print was in line with analysts’ expectations, but overall, it was a slower quarter for the company with a miss of analysts’ EBITDA and earnings estimates.
Jerry Morgan, Chief Executive Officer of Texas Roadhouse, Inc. commented, “We are extremely pleased in such a competitive environment to report another quarter of continued traffic growth at each of our brands. This is a credit to the hard work of our operators who create an environment where Roadies want to work and guests want to dine.”
Interestingly, the stock is up 8.6% since reporting and currently trades at $196.40.
Is now the time to buy Texas Roadhouse? Access our full analysis of the earnings results here, it’s free.
Best Q3: Brinker International (NYSE:EAT)
Founded by Norman Brinker in Dallas, Texas, Brinker International (NYSE:EAT) is a casual restaurant chain that operates under the Chili’s, Maggiano’s Little Italy, and It’s Just Wings banners.
Brinker International reported revenues of $1.14 billion, up 12.5% year on year, outperforming analysts’ expectations by 3.4%. The business had a stunning quarter with an impressive beat of analysts’ EBITDA estimates and optimistic earnings guidance for the full year.
Brinker International delivered the biggest analyst estimates beat and highest full-year guidance raise among its peers. The market seems happy with the results as the stock is up 20.9% since reporting. It currently trades at $117.61.
Is now the time to buy Brinker International? Access our full analysis of the earnings results here, it’s free.
Weakest Q3: The ONE Group (NASDAQ:STKS)
Doubling as a hospitality services provider for hotels and resorts, The One Group Hospitality (NASDAQ:STKS) is an upscale restaurant company that operates STK Steakhouse and Kona Grill.
The ONE Group reported revenues of $194 million, up 152% year on year, falling short of analysts’ expectations by 10%. It was a disappointing quarter as it posted full-year revenue guidance missing analysts’ expectations and a miss of analysts’ EBITDA estimates.
The ONE Group delivered the fastest revenue growth but had the weakest performance against analyst estimates and weakest performance against analyst estimates in the group. As expected, the stock is down 19.5% since the results and currently trades at $3.16.
Read our full analysis of The ONE Group’s results here.
Darden (NYSE:DRI)
Started in 1968 as the famous seafood joint, Red Lobster, Darden (NYSE:DRI) is a leading American restaurant company that owns and operates a portfolio of popular restaurant brands.
Darden reported revenues of $2.76 billion, flat year on year. This print lagged analysts' expectations by 1.5%. Overall, it was a slower quarter as it also recorded a miss of analysts’ EBITDA and earnings estimates.
The stock is up 7.4% since reporting and currently trades at $170.99.
Read our full, actionable report on Darden here, it’s free.
Kura Sushi (NASDAQ:KRUS)
Known for its conveyor belt that transports dishes to diners, Kura Sushi (NASDAQ:KRUS) is a chain of sushi restaurants serving traditional Japanese fare with a touch of modernity and technology.
Kura Sushi reported revenues of $66.01 million, up 20.2% year on year. This print topped analysts’ expectations by 3.1%. It was a very strong quarter as it also put up an impressive beat of analysts’ earnings and EBITDA estimates.
The stock is down 12.7% since reporting and currently trades at $89.99.
Read our full, actionable report on Kura Sushi here, it’s free.
Market Update
As expected, the Federal Reserve cut its policy rate by 25bps (a quarter of a percent) in November 2024 after Donald Trump triumphed in the US Presidential election. This marks the central bank's second easing of monetary policy after a large 50bps rate cut two months earlier. Going forward, the markets will debate whether these rate cuts (and more potential ones in 2025) are perfect timing to support the economy or a bit too late for a macro that has already cooled too much. Adding to the degree of difficulty is a new Republican administration that could make large changes to corporate taxes and prior efforts such as the Inflation Reduction Act.
Want to invest in winners with rock-solid fundamentals? Check out our Hidden Gem Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.
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