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Texas Roadhouse Misses Revenue Estimates, Shares Fall

Texas Roadhouse Inc TXRH 1.02% released its Q2 results after market close on Monday. Earnings per share came in above Wall Street consensus expectations, however, shares shares fell 5 percent due to the company's miss on sales estimates.

Texas Roadhouse reported EPS of $0.47 and revenues of $508.8 million. Analyst consensus had an EPS estimate of $0.45 and revenues of $510.37 million.

Texas Roadhouse reported comparable restaurant sales growth of 4.5 percent at company restaurants and 2.6 percent at franchise restaurants.

Seven company-owned restaurants were opened, including one Bubba's 33 restaurant.

"Positive guest counts primarily drove the increase in comparable restaurant sales, marking our 26th consecutive quarter of growth, while lower commodity costs continued to pave the way for margin expansion," said Kent Taylor, CEO. "On the development front, we are on track to open approximately 30 company restaurants this year and we continue to fill our new restaurant pipeline for next year and beyond."

Stifel's Paul Westra believed the U.S. economy would be entering a recession in the next 3-9 months and restaurants such as Texas Roadhouse were early indicators of this. The analyst noted margins tend to suffer as negative relative pricing power at the start of dining-out declines.

Food cost deflation outlook was raised from a range of 1-2 percent to 2.5-3 percent. Prior statements were reiterated

Texas Roadhouse traded at $46 in Monday's after-hours session, down 5.24 percent.

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