Texas Roadhouse, Inc. — Second Quarter 2026 Earnings Summary

Financial Performance

• Total revenue for the 13 weeks ended June 30, 2026, was $1,679,976,000, an 11.1% increase from $1,512,054,000 in the prior year; for the 26 weeks ended June 30, 2026, revenue was $3,313,142,000, a 11.9% increase from $2,959,702,000.
• Income from operations for the 13 weeks ended June 30, 2026, was $142,788,000, a 2.4% decrease from $146,341,000; for the 26 weeks, it was $289,129,000, a 2.9% increase from $281,074,000.
• Net income for the 13 weeks ended June 30, 2026, was $121,933,000, a 1.7% decrease from $124,085,000; for the 26 weeks, it was $245,366,000, a 3.2% increase from $237,747,000.
• Diluted earnings per share for the 13 weeks ended June 30, 2026, was $1.85, a 0.7% decrease from $1.86; for the 26 weeks, it was $3.72, a 4.2% increase from $3.57.
• Restaurant margin dollars for the 13 weeks ended June 30, 2026, increased 6.9% to $275.1 million; for the 26 weeks, they increased 8.6% to $539.5 million.
• Restaurant margin as a percentage of sales decreased 66 basis points to 16.4% for the 13 weeks and 52 basis points to 16.4% for the 26 weeks compared to the prior year.
• Cash provided by operating activities for the 26 weeks ended June 30, 2026, was $439.2 million.
• Capital allocation spend for the 26 weeks included capital expenditures of $178.8 million, franchise acquisitions of $71.8 million, dividends of $98.7 million, and stock repurchases of $70.8 million.
• Long-term debt was $50,000,000 as of June 30, 2026, compared to $0 as of December 30, 2025.

Guidance and Future Outlook

• Comparable restaurant sales at company restaurants for the first five weeks of the third quarter of 2026 increased 6.2% compared to 2025.
• Management updated 2026 expectations to include commodity inflation of approximately 5% and an effective income tax rate of approximately 14%.
• Management reiterated 2026 expectations for positive comparable restaurant sales growth, store week growth of 5% to 6%, wage and other labor inflation of 3% to 4%, and total capital expenditures of approximately $400 million.

Business Segments and Product Lines

• Comparable restaurant sales for all company concepts increased 6.2% for the 13 weeks and 6.7% for the 26 weeks.
• Store weeks increased 5.0% for the 13 weeks and 5.3% for the 26 weeks.
• Average weekly sales for company restaurants were $177,252 for the 13 weeks and $175,708 for the 26 weeks, with to-go sales comprising approximately $25.4 million in both periods.
• Nine company restaurants and one franchise restaurant were opened in the 13 weeks; 13 company restaurants and three franchise restaurants were opened in the 26 weeks.
• Texas Roadhouse company restaurants had 6.5% comparable sales growth for the 13 weeks and an average unit volume of $2,380.
• Bubba's 33 company restaurants had 1.3% comparable sales growth for the 13 weeks and an average unit volume of $1,659.
• Texas Roadhouse franchise restaurants had 4.4% comparable sales growth for the 13 weeks.

Market and Competitive Landscape

• The company operates over 830 restaurants system-wide in 49 states, one U.S. territory, and ten foreign countries.
• Commodity inflation was 7.0% for the 13 weeks and 6.6% for the 26 weeks.
• Wage and other labor inflation was 3.9% for both the 13 and 26 weeks.

Risks and Challenges

• Restaurant margin percentages decreased due to commodity inflation and wage/labor inflation partially offset by higher sales.
• Diluted earnings per share for the 13 weeks decreased due to higher general and administrative expenses and higher depreciation and amortization expenses.
• Forward-looking statements note risks including weather, natural disasters, disease outbreaks, labor or supply chain shortages, changes in consumer discretionary spending, inflationary pressures, tariffs, and food safety concerns.

Management Commentary and Tone

• CEO Jerry Morgan expressed excitement about business momentum, citing continued strong traffic trends and record average weekly sales.
• Management highlighted a strong development pipeline, healthy balance sheet, and disciplined capital allocation approach as drivers for future growth.
• The company remains focused on expanding its footprint, investing in people, and executing "Legendary Food and Legendary Service."

Other Key Points

• The Board of Directors declared a quarterly cash dividend of $0.75 per share, payable on September 29, 2026, to shareholders of record on September 1, 2026.
• Franchise acquisitions totaled $71.8 million for the 26 weeks ended June 30, 2026.
• Share repurchases totaled $70.8 million for the 26 weeks ended June 30, 2026.
• Cash and cash equivalents increased to $202,427,000 as of June 30, 2026, from $134,709,000 as of December 30, 2025.
• Goodwill increased to $275,036,000 as of June 30, 2026, from $242,220,000 as of December 30, 2025.