Why Texas Roadhouse Inc Shares Popped

By Markets Fool.com

What: Shares of full-service restaurant operator Texas Roadhouse Inc were up 13.8% at 11:45 a.m. EST on Tuesday after its quarterly results and outlook impressed Wall Street.

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So what: Texas Roadhouse shares have climbed in recent months on optimism over accelerating growth, and Tuesday's Q4 results -- EPS of $0.32 topped the consensus by $0.02 on revenue growth of 12.3% -- coupled with solid guidance only reinforce that enthusiasm. In fact, same-store sales at company restaurants increased 4.5% while restaurant margin expanded 112 basis points to 17.6%, suggesting that its competitive position is strengthening nicely as well.

Now what: For 2016, management plans to open roughly 30 company restaurants -- including about seven Bubba's 33 locations -- and expects same-store sales growth to remain positive. "Our top-line momentum has continued into 2016 and we are pleased to have seen continued traffic growth during the first seven weeks of the year," said CEO Kent Taylor. "Looking ahead, we will stay focused on solidifying our long-term brand position and capitalizing on our growth potential." Of course, with the shares hitting a new 52-week high Tuesday and trading at a P/E premium to the industry, investors might want to wait for the stock to cool off a bit before taking a big bite.

The article Why Texas Roadhouse Inc Shares Popped originally appeared on Fool.com.

Brian Pacampara has no position in any stocks mentioned. The Motley Fool recommends Texas Roadhouse. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.