Texas Roadhouse, Inc. — Third Quarter 2026 Earnings Summary

Financial Performance

• Total revenue for the 13 weeks ended September 29, 2026, was $1,573,074,000, a 9.5% increase from $1,436,342,000 in the prior year period; for the 39 weeks, revenue was $4,886,216,000, an 11.2% increase from $4,396,044,000.
• Income from operations for the 13 weeks was $102,988,000 (up 6.2% from $96,949,000); for the 39 weeks, it was $392,117,000 (up 3.7% from $378,023,000).
• Net income for the 13 weeks was $89,361,000 (up 7.4% from $83,172,000); for the 39 weeks, it was $334,727,000 (up 4.3% from $320,919,000).
• Diluted earnings per share for the 13 weeks was $1.36 (up 8.6% from $1.25); for the 39 weeks, it was $5.08 (up 5.3% from $4.82).
• Restaurant margin dollars for the 13 weeks increased 11.9% to $228.6 million; for the 39 weeks, they increased 9.6% to $768.2 million.
• Restaurant margin as a percentage of sales was 14.6% for the 13 weeks (up 30 basis points) and 15.8% for the 39 weeks (down 24 basis points).
• Cash provided by operating activities for the 39 weeks was $585.9 million.
• Capital allocation spend for the 39 weeks included capital expenditures of $314.4 million, franchise acquisitions of $71.8 million, dividends of $147.9 million, and share repurchases of $83.1 million.
• Long-term debt was $50,000,000 as of September 29, 2026, compared to $0 as of December 30, 2025.

Guidance and Future Outlook

• Management updated 2026 expectations to include store week growth of 5.0% to 5.5%, wage and other labor inflation of 3.5% to 4.0%, an effective income tax rate of approximately 13.0%, and total capital expenditures of approximately $440 million.
• Management reiterated 2026 expectations for positive comparable restaurant sales growth and commodity inflation of approximately 5.0%.
• Initial 2027 expectations include positive comparable restaurant sales growth, store week growth of 5.0% to 6.0%, commodity inflation of approximately 4.0%, wage and other labor inflation of approximately 3.0%, an effective tax rate of approximately 13.0%, and total capital expenditures of approximately $425 million.
• Comparable restaurant sales for the first five weeks of the fourth quarter of 2026 increased 1.5% compared to 2025.
• The company implemented a menu price increase of approximately 1.0% at the beginning of the fourth quarter.
• The development pipeline includes over 30 company restaurants currently under construction.

Business Segments and Product Lines

• Comparable restaurant sales for company restaurants increased 4.3% for the 13 weeks ended September 29, 2026, and 5.9% for the 39 weeks ended September 29, 2026.
• Store weeks increased 5.1% for the 13 weeks and 5.3% for the 39 weeks.
• Average weekly sales for company restaurants were $163,980 for the 13 weeks (with $23,628 in to-go sales) and $171,764 for the 39 weeks (with $24,785 in to-go sales).
• Five company restaurants and three franchise restaurants were opened during the 13 weeks; 18 company restaurants and six franchise restaurants were opened during the 39 weeks.
• Texas Roadhouse franchise restaurants showed comparable sales growth of 4.5% for the 13 weeks and 4.5% for the 39 weeks.
• Bubba's 33 restaurants showed comparable sales growth of 2.8% for the 13 weeks and 2.8% for the 39 weeks.
• The company operates over 840 restaurants system-wide across 49 states, one U.S. territory, and ten foreign countries.

Market and Competitive Landscape

• Commodity inflation was 2.0% for the 13 weeks and 5.0% for the 39 weeks.
• Wage and other labor inflation was 4.1% for the 13 weeks and 3.9% for the 39 weeks.
• The company noted that traffic softened late in the quarter despite entering with strong momentum.
• The company remains focused on delivering "legendary food and legendary service" to differentiate itself as consumers navigate rising costs.

Risks and Challenges

• Rising costs, including commodity inflation and wage/labor inflation, are impacting margins.
• Traffic softening late in the quarter presents a near-term challenge.
• 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 stated that strategic priorities remain unchanged despite traffic softening, emphasizing a focus on guest experience and community service.
• Management expressed confidence that their commitment to the guest experience will differentiate the company.
• Morgan highlighted a strong development pipeline and a disciplined capital allocation strategy supporting expansion, franchise acquisitions, and shareholder returns.

Other Key Points

• The Board of Directors declared a quarterly cash dividend of $0.75 per share, payable on December 29, 2026, to shareholders of record on December 1, 2026.
• The company acquired franchise restaurants for $71.8 million during the 39 weeks ended September 29, 2026.
• Share repurchases totaled $83.1 million for the 39 weeks ended September 29, 2026.
• The company operates three concepts: Texas Roadhouse, Bubba's 33, and Jaggers.
• A conference call was held on November 5, 2026, to discuss results.