Texas Roadhouse, Inc. (TXRH) has reported a 9.82 percent fall in profit for the quarter ended Dec. 27, 2016. The company has earned $20.72 million, or $0.29 a share in the quarter, compared with $22.98 million, or $0.32 a share for the same period last year. Revenue during the quarter grew 6.68 percent to $484.71 million from $454.35 million in the previous year period. Gross margin for the quarter expanded 4 basis points over the previous year period to 36.04 percent. Total expenses were 93.64 percent of quarterly revenues, up from 92.58 percent for the same period last year. That has resulted in a contraction of 106 basis points in operating margin to 6.36 percent.
Operating income for the quarter was $30.84 million, compared with $33.71 million in the previous year period.
Kent Taylor, Chief Executive Officer of Texas Roadhouse, Inc., commented, "We are pleased to deliver another strong year of results including a 19% increase in diluted earnings per share driven by double-digit revenue growth and restaurant margin expansion. We also delivered impressive comparable restaurant sales growth during 2016 with an increase of 3.5%, and we extended our streak of consecutive quarters of comparable restaurant sales growth to 28 with our fourth quarter increase. Lastly, our strong balance sheet and healthy cash flows allowed us to return $56.2 million of excess capital to shareholders through quarterly dividend payments and share repurchases during 2016."
Operating cash flow improves
Texas Roadhouse, Inc. has generated cash of $257.06 million from operating activities during the year, up 12.78 percent or $29.12 million, when compared with the last year. The company has spent $164.74 million cash to meet investing activities during the year as against cash outgo of $173.20 million in the last year.
The company has spent $38.72 million cash to carry out financing activities during the year as against cash outgo of $81.53 million in the last year period.
Cash and cash equivalents stood at $112.94 million as on Dec. 27, 2016, up 90.35 percent or $53.61 million from $59.33 million on Dec. 29, 2015.
Working capital remains negative
Working capital of Texas Roadhouse, Inc. was negative $79.27 million on Dec. 27, 2016 compared with negative $122.83 million on Dec. 29, 2015. Current ratio was at 0.72 as on Dec. 27, 2016, up from 0.52 on Dec. 29, 2015.
Debt increases substantially
Texas Roadhouse, Inc. has witnessed an increase in total debt over the last one year. It stood at $52.55 million as on Dec. 27, 2016, up 104.51 percent or $26.85 million from $25.69 million on Dec. 29, 2015. Total debt was 4.45 percent of total assets as on Dec. 27, 2016, compared with 2.49 percent on Dec. 29, 2015. Debt to equity ratio was at 0.07 as on Dec. 27, 2016, up from 0.04 as on Dec. 29, 2015. Interest coverage ratio improved to 87.36 for the quarter from 70.38 for the same period last year.
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