Texas Roadhouse Reports 6.2% Same-Store Sales Growth, Lowers Commodity Inflation Guidance
The casual dining chain posted $1.7 billion in quarterly revenue and 3% traffic growth while raising its weekly sales record above $175,000 for the first time.
Record Sales Amid Traffic Growth
Texas Roadhouse reported second quarter 2026 revenue approaching $1.7 billion, driven by same-store sales growth of 6.2% that included 3% traffic growth (earnings call, 2026-08-06). The company achieved a milestone as average weekly sales exceeded $175,000 for the first time in its 33-year history, with company restaurants averaging over $183,000 per week.
The ~$14 billion market cap company reported revenue growth of 11.1% for the quarter, though diluted earnings per share declined 0.7% to $1.85. Restaurant margin as a percentage of sales decreased 66 basis points to 16.4%, pressured by commodity inflation (earnings call, 2026-08-06).
Improved Commodity Outlook
Texas Roadhouse lowered its full-year 2026 commodity inflation guidance from a range of 6% to 7% down to approximately 5%. Second quarter commodity inflation came in at 7%, at the bottom end of the company's forecasted range. CFO Michael Lenihan noted that "our second half inflation outlook remains lower than our first half inflation" (earnings call, 2026-08-06).
The company maintained its labor inflation guidance of 3% to 4% for the full year, with second quarter wage and other labor inflation at 3.9%. Labor productivity continued to improve, with labor hours growing at approximately 25% of comparable traffic growth.
Expansion Plans and Modest Pricing
The restaurant chain ended the quarter with 755 system-wide Texas Roadhouse locations across the United States and 10 foreign countries. The company remains on track for approximately 35 company-owned openings in 2026, with nine restaurants opened in the second quarter including five Texas Roadhouse, three Bubba's 33, and one Jaggers location (earnings call, 2026-08-06).
CEO Jerry Morgan announced the company will implement a 1% menu price increase at the beginning of the fourth quarter, describing this as "an appropriate balance between helping to offset structural inflation and maintaining our everyday value position" (earnings call, 2026-08-06).
Brand Performance and Holiday Strength
Bubba's 33, the company's smaller concept, reached 60 locations with average weekly sales exceeding $129,000. The company expects to open at least 10 Bubba's 33 restaurants this year and maintain a "low double-digit pace of openings for the next several years" (earnings call, 2026-08-06). Jaggers posted weekly sales exceeding $76,000 with four company openings planned for 2026.
Morgan highlighted the brand's strength during major dining occasions, noting that 90% of restaurants set daily sales records on Mother's Day, Father's Day, or Valentine's Day, with some locations exceeding $100,000 in single-day sales (earnings call, 2026-08-06).
Third Quarter Trends
Comparable sales growth continued into the third quarter at 6.2% through the first five weeks, with restaurants averaging $168,000 in weekly sales. However, management warned of an approximately 75 basis point negative impact to fourth quarter same-store sales growth from holiday calendar shifts, including Halloween moving from Friday to Saturday and Christmas Day shifting from Thursday to Friday year-over-year.
The company ended the quarter with $202 million in cash and maintained its 2026 capital expenditure guidance at approximately $400 million.
This article was generated by MarginX from the earnings call on 2026-08-06. It is not investment advice.