Texas Roadhouse, Inc. TXRH is scheduled to report third-quarter 2024 results on Oct. 24, after market close. In the last reported quarter, the company delivered an earnings surprise of 7.8%.

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Q3 Expectations

The Zacks Consensus Estimate for third-quarter earnings per share is pegged at $1.33, indicating a 40% increase from the year-ago quarter's 95 cents.

For revenues, the consensus mark is pegged at $1.28 billion. The metric suggests growth of 14.3% from the year-ago quarter’s figure.

Let us discuss the factors that are likely to have influenced TXRH’s performance in the quarter to be reported.

Factors at Play

Texas Roadhouse’s third-quarter results are likely to have been aided by strategic menu pricing, efficient cost management, new store openings and operational improvements. This and the emphasis on digital kitchen conversions and operational enhancements are likely to have aided the company’s performance in the to-be-reported quarter.
    
Strength in comparable sales growth is likely to have been reflected in the company’s third-quarter quarter top line. During the second quarter earnings call, the company revealed that comparable sales for the first four weeks of the third quarter were up 8%. Consistent traffic growth, as well as effective management of pricing and promotions, is expected to have contributed to higher revenues in the third quarter.

Texas Roadhouse continues to invest in digital initiatives, including the rollout of its digital kitchen systems, which are expected to improve operational efficiency. These efforts, along with the Roadie First technology system aimed at improving employee experience, are expected to have enhanced store-level performance and further support revenue growth in the quarter-to-be-reported.

The company’s third-quarter margins are likely to have benefited from lower-than-expected commodity inflation, particularly in beef costs, along with improved labor productivity due to fully staffed and more tenured employees.

What the Zacks Model Unveils

Our proven model doesn’t conclusively predict an earnings beat for Texas Roadhouse this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. This is not the case here.

You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Texas Roadhouse currently has an Earnings ESP of -1.14% and a Zacks Rank #2.

Stocks to Consider

Here are some stocks you may consider, as our model shows that these have the right combination of elements to beat on earnings this season.

McDonald's Corporation MCD presently has an Earnings ESP of +0.02% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

The stock has risen 13.7% in the past six months. MCD’s earnings beat estimates in the trailing two out of four quarters and missed twice, the average surprise being 1.8%.

Brinker International, Inc. EAT currently has an Earnings ESP of +15.39% and a Zacks Rank #2.

The company's shares have gained 47.7% so far this year. EAT’s earnings beat estimates in the trailing three out of four quarters and missed once, the average surprise being 211%.

Yum China Holdings, Inc. YUMC has an Earnings ESP of +1.85% and a Zacks Rank of 3 at present.

Shares of YUMC have increased 13.5% in the past six months. YUMC’s earnings beat estimates in the trailing three out of four quarters and missed once, the average surprise being 26.6%.

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