Texas Roadhouse (TXRH) Breakout with Bullish Call Open Interest
Texas Roadhouse (TXRH) triggered a breakout alert this morning and a name with unusually large bullish open interest, though much of it rolled from underwater positions. Most notable, the September $90 calls with 6000 bought on 7/20 for over $4M while September $100 and $105 calls still have some size in open interest. TXRH has now moved above key volume nodes, VWAP off the highs and moving averages out of its downtrend and we have seen strong early earnings read-throughs from casual dining peers with TXRH reporting on 7-29. XRH last quarter saw Q2 SSS trend at 20.9% through April, the best among peers, and stimulus seen benefitting its loyal customer base. TXRH may be more exposed to cost pressures from beef and also noted labor supply challenges though is instituting price increases on the menu. TXRH has done well expanding its off-premise dining offerings. TXRH’s “Butcher Shop” concept business could prove to be a major future growth driver. TXRH still has a meaningful opportunity to expand store count across its brands.