Without doubt, by far the most underrated chain restaurant in the united states is Texas Roadhouse. The quality of Texas Roadhouse’s food is probably the highest of any American chain restaurant. With the exception of children’s menu items such as Kraft Macaroni & Cheese, applesauce, and sausages, everything on the Texas Roadhouse menu is made from scratch using 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 ought to hand pick their particular steak upon entering the restaurant, but there’s never excessive pressure on customers to spend more then they’re confident with. As another testament to how care-free each establishment is, every table provides a free bucket of shelled peanuts, with patrons encouraged to throw the empty shells on the floor.
Even away from restaurant, Texas Roadhouse dinner menu employees participate in a variety intercompany competitions including the bartender’s “Real Bar” competition, plus an annual “Meat Cutters” competition, that allows for many different restaurant workers to exhibit their skill. All the caliber of Texas Roadhouse, regardless of the chain having over 450 locations spread across 49 U.S. states and numerous foreign countries, is very consistent, making Texas Roadhouse the most underrated American chain restaurant currently functioning.
When I first advocated looking into restaurant stocks last November, the shares of most 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 organization has consistently beaten earnings even in a tough environment; shares are up 180 percent during the last five-years, and 30 percent year currently.
Here I examine exactly what makes Texas Roadhouse popular with customers in addition to investors. The organization has trumped a tricky operating environment because of almost flawless execution, and management has been careful not to overextend the company. However, investors continue to be paying a sizable premium for this particular performance, even when projected future earnings are factored in to the valuation.
What is the secret sauce that continues bringing diners back and enriching Texas Roadhouse shareholders? Element of this is because Texas Roadhouse provides diners using the “experience” that numerous brick-and-mortar retail and restaurant establishments find it difficult to provide. The chain is well known for the lively atmosphere and quality food with a bargain price. In several ways, Texas Roadhouse was ahead of it is time. The steakhouse is well-best for a period where consumers crave freshness and authenticity, preparing its food on your own on location and allowing customers handy pick steaks from your counter. Food consultant Darren Tristano says it best.
Texas Roadhouse’s first-quarter performance surprised financial pundits. There was no such effect Monday since the brand’s second-quarter financials lined up with Wall Street expectations. This, however, was far qyucjp a poor one.
Total revenue climbed 11 percent to $566.3 million within 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. Similar to the first-quarter review, Scott Colosi, Texas Roadhouse’s president and chief financial officer, broke along the results in straightforward terms.