Shares of Texas Roadhouse experienced a boost after the restaurant operator announced that its same-store sales for the fourth quarter were higher than expected. Additionally, the company lowered its expectations for cattle inflation for this year.

Rising Stock Prices

Texas Roadhouse's stock rose by 10% to $147.15 in morning trading. Over the past 12 months, shares have climbed by an impressive 40%.

Strong Same-Store Sales

The company's same-store sales at its restaurants saw a substantial increase of 9.9%, surpassing the 8.5% growth predicted by analysts surveyed by FactSet. Even for the first 50 days of the current quarter, same-store sales have continued to rise, reaching an increase of 6.8%.

Revising Inflation Expectations

Texas Roadhouse has updated its commodity inflation forecast for this year to be around 5%, a decrease from the previous expectation of 5% to 6%. D. Christopher Monroe, the Chief Financial Officer, explained that cattle supply will face challenges this year, with the majority of the financial impact expected in the second half of the year.

Wage and Labor Inflation Forecast

Although the company is still predicting wage and labor inflation of 4% to 5%, Texas Roadhouse plans to offset these increases by raising prices by 2.2% in March.

Company executives remain optimistic about consumer trends. However, Michael Bailen, Texas Roadhouse's Head of Investor Relations, noted that the company has observed some customers opting for soft drinks instead of alcoholic beverages. On the other hand, Texas Roadhouse is also attracting customers from fast-casual diners, who are likely purchasing value-oriented items like the 6-ounce sirloin steak.

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