Q2 2026 Texas Roadhouse Inc Earnings Call Transcript
Key Points
- Texas Roadhouse Inc (TXRH) reported strong top-line momentum with same-store sales increasing 6.2%, including 3% traffic growth, and average weekly sales exceeding $175,000 for the first time in company history.
- The company is reducing its full-year 2026 commodity inflation guidance from 6%-7% to approximately 5%, driven by lower sirloin prices and a favorable outlook for the second half of the year.
- Labor productivity continues to improve, with labor hours growing at approximately 25% of comparable traffic growth, aided by technology investments like digital kitchens and a strong managing partner program.
- The development pipeline remains robust, with plans to open approximately 35 company-owned restaurants in 2026, including 20 Texas Roadhouse locations, and a full pipeline extending into 2029.
- The company's diversified brand portfolio is performing well, with Bubba's 33 and Jaggers both showing strong average weekly sales and growth potential, including a new Bubba's 33 location in Iowa.
- Texas Roadhouse Inc (TXRH) continues to see strong demand on key holidays, with 90% of restaurants setting daily sales records on Mother's Day, Father's Day, or Valentine's Day, highlighting strong brand trust and guest loyalty.
- Restaurant margin as a percentage of total sales decreased 66 basis points to 16.4% in the second quarter, pressured by 7% commodity inflation, particularly in beef.
- The company expects a negative impact of approximately 75 basis points to fourth-quarter same-store sales growth due to holiday shifts, including Halloween and Christmas Day moving to different days of the week.
- Diluted earnings per share decreased 0.7% year-over-year to $1.85, despite revenue growth of 11.1%, reflecting margin pressure and higher costs.
- G&A expenses increased 15.4% in the second quarter, and the company continues to forecast a low double-digit percentage increase in total G&A dollar expense for the full year 2026.
- Overall menu mix was negative 40 basis points in the second quarter, driven by a lower average check in the to-go business, although dining room mix turned positive.
- The company is taking a conservative 1% menu price increase in the fourth quarter, which may not fully offset structural inflation, potentially impacting profitability in the near term.
Good evening, and welcome to the Texas Roadhouse second-quarter earnings conference call. Today's call is being recorded. (Operator Instructions)
I would now like to introduce Michael Bailen, Vice President of Investor Relations for Texas Roadhouse. You may begin your conference.
Thank you, Holly, and good evening. By now, you should have access to our earnings release for the second quarter ended June 30, 2026. It may also be found on our website at texasroadhouse.com in the Investors section. I would like to remind everyone that part of our discussion today will include forward-looking statements. These statements are not guarantees of future performance, and therefore, undue reliance should not be placed upon them.
We refer all of you to our earnings release and our recent filings with the SEC. These documents provide a more detailed discussion of the relevant factors that could cause actual results to differ materially from those forward-looking statements. In
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