Hands down, by far the most underrated chain restaurant in the usa is Texas Roadhouse. The standard of Texas Roadhouse’s food is one of the highest of any American chain restaurant. Excluding children’s menu items including Kraft Macaroni & Cheese, applesauce, and hot dogs, everything on the Texas Roadhouse menu is manufactured out of scratch utilizing an original recipe, including salads and dressings. Every one of their famous steaks are hand-cut and never frozen, except for their T-bone steak, which is prepared off-site and vacuum-sealed.
The service is just as legendary. Steak-hungry customers are encouraged to hand pick their very own steak upon entering the restaurant, but there’s never excessive pressure on customers to invest more then they’re at ease with. As another proof of how care-free each establishment is, every table delivers a free bucket of shelled peanuts, with patrons motivated to throw the empty shells on the floor.
Even away from restaurant, How much does burgers cost at Texas Roadhouse employees participate in a variety intercompany competitions such as the bartender’s “Real Bar” competition, plus an annual “Meat Cutters” competition, that allows for a number of restaurant workers to demonstrate their skill. All the quality of Texas Roadhouse, regardless of the chain having over 450 locations spread out across 49 U.S. states and numerous foreign countries, is extremely consistent, making Texas Roadhouse probably the most underrated American chain restaurant currently in operation.
When I first advocated looking at restaurant stocks last November, the shares of many casual dining companies lay mired in negativity. Amid falling grocery prices, oversupply, falling foot traffic, and changing consumer preferences, chain restaurants became relatively undervalued.
However, Texas Roadhouse (TXRH) never suffered during the “restaurant recession.” Indeed, the business has consistently beaten earnings even in a tough environment; shares are up 180 percent over the past 5 years, and 30 percent year currently.
Here I examine what makes Texas Roadhouse attractive to customers as well as investors. The business has trumped a tricky operating environment as a result of almost flawless execution, and management has been careful to not overextend the brand. However, investors are still paying a big premium for this particular performance, even though projected future earnings are factored to the valuation.
Exactly what is the secret sauce that continues bringing diners back and enriching Texas Roadhouse shareholders? Element of the reason is that Texas Roadhouse provides diners with the “experience” that a lot of brick-and-mortar retail and restaurant establishments find it difficult to provide. The chain is well known for the lively atmosphere and quality food in a bargain price. In several ways, Texas Roadhouse was in front of it is time. The steakhouse is well-designed for an era where consumers crave freshness and authenticity, preparing its food from scratch on location and allowing customers at hand pick steaks from your counter. Food consultant Darren Tristano says it best.
Texas Roadhouse’s first-quarter performance surprised financial pundits. There was clearly no such effect Monday since the brand’s second-quarter financials lined up with Wall Street expectations. That fact, however, was far qyucjp a negative one.
Total revenue climbed 11 percent to $566.3 million inside the second quarter. Net income grew 12 percent to $37.6 million (earnings per share of 53 cents), and comparable same-store sales accelerated 4 percent at company-owned restaurants and 3.6 percent at domestic franchise stores. Like the first-quarter review, Scott Colosi, Texas Roadhouse’s president and chief financial officer, broke down the results in straightforward terms.