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Texas Roadhouse Inc. beat Wall Street expectations for its quarterly profit and sales, but spooked investors by saying it expects even higher food costs for the year.
Texas Roadhouse
TXRH,
said it earned $75 million, or $1.08 a share, contrasting with a loss of $34 million, or 48 cents a share, in the year-ago period. Sales rose to $899 million from $476 million a year ago.
Analysts polled by FactSet expected the restaurant chain to report earnings of $1.03 a share on sales of $870 million.
The company said it expects food cost inflation of 7%, up from a guidance of 4% when it reported first-quarter results in April. The stock dropped 7% in the extended session Thursday, after ending the regular trading day down 0.2%.
Texas Roadhouse was not alone in reporting a quarterly beat but seeing its stock drop after results.
BJ’s Restaurants Inc.
BJRI,
also on Thursday reported a quarterly beat, but shares dropped 5% even as Chief Executive Greg Levin said the chain’s “sales momentum will continue in the second half of this year even as we manage through the current industry challenges around labor, inflation and supply chain.”
BJ’s reported EPS of 26 cents a share on sales of $290 million in the second quarter, compared with FactSet consensus of EPS of 17 cents on sales of $285 million for the quarter.
