Strong Top-Line Growth
Revenue exceeded $1.6 billion for the quarter with revenue growth of 12.8% year-over-year, driven by a 6.8% increase in average weekly sales and a 5.7% increase in store weeks.
Texas Roadhouse
· TXRH
May 7th, 2026
Summary
- Earnings Call Date:
- 2026-05-07
- Change Since:
- +18.93%
- Next Earnings Date:
- 2026-07-23
Earnings Call Sentiment
PositiveThe call presented strong operational and financial momentum: double‑digit revenue growth (12.8%), healthy comparable sales (+7.1%) driven by traffic (+4.5%), EPS growth (+9.6%), improved labor productivity and robust cash flow. Management also narrowed commodity guidance and highlighted successful tech and to‑go execution and international/franchise expansion. Offsets include meaningful commodity and beef cost pressure (COGS up 122 bps), a modest decline in restaurant margin percentage, negative mix from to‑go and alcohol, and higher G&A/depreciation expense. Overall, positives (top‑line growth, margin dollar expansion, cash generation, productivity gains and tech progress) outweigh the manageable cost and mix headwinds.
Company Guidance
Management updated 2026 guidance: full‑year commodity inflation was reduced to 6.0%–7.0% (Q1 actual 6.2%; Q2 expected to peak around 7%–8% and be at or below the bottom end in H2), wage and other labor inflation remains 3%–4%, and capital expenditures are reiterated at approximately $400 million. They expect roughly 35 company‑owned openings in 2026 (Q1 opened 4; up to 9 openings across all brands in Q2 with openings weighted to the back half), franchise partners to add ~3 domestic Jaggers locations and up to 6 international Texas Roadhouse openings for the year, and noted Q1 cash of $215 million and cash flow from operations of $259 million (partially offset by ~$158 million of capex/dividends/repurchases and $72 million for acquisition of 5 California franchise restaurants). Additional guidance items: full‑year effective tax rate 14%–15%, total G&A dollars to increase low double‑digits, depreciation dollars to increase low teens, and management highlighted improved labor productivity (labor hours grew at ~35% of comparable traffic in Q1) with expectation of continued margin‑dollar leverage if traffic and pricing trends persist.
Healthy Comparable Sales and Traffic
Comparable sales increased 7.1% in the quarter, driven by 4.5% traffic growth and a 2.6% increase in average check; month-by-month comps were 6.9% (Jan), 8.3% (Feb) and 6.3% (Mar).
Profitability and EPS Improvement
Diluted EPS rose 9.6% to $1.87 and restaurant margin dollars increased 10.5% to $264 million, with restaurant margin dollars per store week up 4.5% year-over-year to over $28,000.
Strong Cash Flow and Balance Sheet
Generated $259 million of cash flow from operations in the quarter and ended the period with $215 million of cash; continue to fund growth while returning capital to shareholders (acquisitions, dividends, buybacks).
Operational Productivity Gains
Labor as a percentage of sales improved 46 basis points to 32.9% despite labor dollars per store week increasing 5.4% (wage and other labor inflation ~3.8% and hours growth ~1.6%); labor hours grew at ~35% of comparable traffic growth, showing productivity improvement.
Digital and Technology Progress
Digital kitchen technologies and testing of upgraded handheld tablets are positively impacting operations, supporting higher to‑go order volumes without harming the dine‑in experience and improving order accuracy and efficiency.
To‑Go and Weekly Sales Mix
Average weekly sales for Texas Roadhouse were over $174,000 in the quarter (brand-level weekly sales referenced as nearly $180,000 earlier), with To‑Go representing more than $25,000 or 14.6% of weekly sales, and strong early Q2 momentum with comps of 6.5% in the first five weeks.
Franchise & International Development Momentum
Company expects ~35 company-owned openings for the full year; Q1 saw 4 Texas Roadhouse openings and franchise partners opened additional domestic and international restaurants with international momentum noted (up to 6 more international openings expected).
Guidance & Cost Visibility Improvement
Management narrowed full‑year commodity inflation guidance from ~7% to 6%–7% based on better-than-expected Q1 inflation (6.2%) and improved visibility for the back half of the year; maintained full-year wage and other labor inflation guidance of 3%–4%.
Brand Recognition and Awards
Texas Roadhouse named America's Best Restaurant Experience (Data Central 500) for the second year in a row; multiple internal awards and recognition cited, reflecting strong brand and culture.
Operator
Good evening, and welcome to the Texas Roadhouse First Quarter 2026 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.
Michael Bailen
Thank you, Andy, and good evening. By now, you should have access to our earnings release for the first quarter ended March 31, 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 addition, we may refer to non-GAAP measures.
If applicable, reconciliations of the non-GAAP measures to the GAAP information can be found in our earnings release. On the call with me today is Jerry Morgan, Chief Executive Officer of Texas Roadhouse; and Mike Lenihan, our Chief Financial Officer. Following the prepared remarks, we will be available to answer your questions. [Operator Instructions] Now I'd like to turn the call over to Jerry.
Gerald Morgan
Thanks, Michael, and good evening, everyone. We are proud of the results our operators delivered for the first quarter of 2026, driven by a same-store sales increase of 7.1%,...
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