Texas Roadhouse, Inc. (TXRH): Results of Operations and Financial Condition
Texas Roadhouse, Inc. (TXRH) filed an SEC Form 8-K — Results of Operations and Financial Condition. Exhibit 99.1 Texas Roadhouse, Inc. Announces Second Quarter 2026 Results Declares Quarterly Dividend of $0.75 per Share LOUISVILLE, KY. (August 6, 2026) – Texas Roadhouse, Inc. (NasdaqGS: TXRH), today announced financial results for the 13 and 26 weeks ended June 30, 2026. Fina
How this was made
The 30-second read
Why it matters
Traders can reprice TXRH based on updated 2026 commodity inflation and tax-rate assumptions, plus the reported comp sales, margin dollars, and capital return (dividend and repurchases).
Market read
This is a primary earnings-and-guidance disclosure with explicit 2026 assumption updates and capital return details, supporting near-term valuation adjustments.
What to watch
The updated effective tax rate assumption (about 14%) and the mix of to-go sales could matter for forward EPS more than the headline revenue growth.
Texas Roadhouse, Inc. Announces Second Quarter 2026 Results Declares Quarterly Dividend of $0.75 per Share
Total revenue increased 11.1% and comparable restaurant sales increased 6.2%, but income from operations decreased 2.4%, net income decreased 1.7%, diluted earnings per share decreased 0.7%, and restaurant margin contracted 66 basis points.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| Total revenueGAAP | $1,679,976 (in thousands) | – | 11.1% |
| Restaurant and other salesGAAP | $1,672,913 (in thousands) | – | – |
| Royalties and franchise feesGAAP | $7,063 (in thousands) | – | – |
| Food and beverage costsGAAP | $591,525 (in thousands) | – | – |
| Labor costsGAAP | $544,001 (in thousands) | – | – |
| RentGAAP | $25,247 (in thousands) | – | – |
| Other operating costsGAAP | $237,020 (in thousands) | – | – |
| Pre-opening expensesGAAP | $8,492 (in thousands) | – | – |
| Depreciation and amortizationGAAP | $58,341 (in thousands) | – | – |
| Impairment and closure, netGAAP | $153 (in thousands) | – | – |
| General and administrative expensesGAAP | $72,409 (in thousands) | – | – |
| Total costs and expensesGAAP | $1,537,188 (in thousands) | – | – |
| Income from operationsGAAP | $142,788 (in thousands) | – | (2.4%) |
| Interest income, netGAAP | $1,021 (in thousands) | – | – |
| Equity income from investments in unconsolidated affiliatesGAAP | $182 (in thousands) | – | – |
| Income before taxesGAAP | $143,991 (in thousands) | – | – |
| Income tax expenseGAAP | $19,477 (in thousands) | – | – |
| Net income including noncontrolling interestsGAAP | $124,514 (in thousands) | – | – |
| Net incomeGAAP | $121,933 (in thousands) | – | (1.7%) |
| Diluted earnings per shareGAAP | $1.85 | – | (0.7%) |
| Comparable restaurant sales at company restaurantsother | 6.2% | – | increased 6.2% |
| Store weeksother | 5.0% | – | increased 5.0% |
| Average weekly salesother | $177,252 | – | – |
| Average weekly to-go salesother | $25,369 | – | – |
| Restaurant margin dollarsnon-GAAP | $275.1 million | – | increased 6.9% |
| Restaurant margin as a percentage of restaurant and other salesnon-GAAP | 16.4% | – | decreased 66 basis points |
| Commodity inflationother | 7.0% | – | – |
| Wage and other labor inflationother | 3.9% | – | – |
| Total revenueGAAP | $3,313,142 (in thousands) | – | 11.9% |
| Income from operationsGAAP | $289,129 (in thousands) | – | 2.9% |
| Net incomeGAAP | $245,366 (in thousands) | – | 3.2% |
| Diluted earnings per shareGAAP | $3.72 | – | 4.2% |
| Restaurant margin dollarsnon-GAAP | $539.5 million | – | increased 8.6% |
| Restaurant margin as a percentage of restaurant and other salesnon-GAAP | 16.4% | – | decreased 52 basis points |
| Cash provided by operating activitiesGAAP | $180.1 million | – | – |
| Capital expendituresother | $98.7 million | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| Restaurant and other salesComparable restaurant sales increased 6.2% and store weeks increased 5.0%. | $1,672,913 (in thousands) | – | – |
| Royalties and franchise feesNine company restaurants and one franchise restaurant were opened. | $7,063 (in thousands) | – | – |
2026 outlook
- Tax rateAn effective income tax rate of approximately 14%.
- NoteComparable restaurant sales at company restaurants for the first five weeks of the third quarter of our 2026 fiscal year increased 6.2% compared to 2025.
- NotePositive comparable restaurant sales growth, including the benefit of menu pricing actions.
- NoteStore week growth of 5% to 6%, including the benefit from franchise acquisitions.
- NoteCommodity inflation of approximately 5%.
- NoteWage and other labor inflation of 3% to 4%.
- NoteTotal capital expenditures of approximately $400 million.
Capital returns
- Repurchases of common stock of $42.6 million for the 13 weeks ended June 30, 2026.
- Dividends of $49.3 million for the 13 weeks ended June 30, 2026.
- Repurchases of common stock of $70.8 million for the 26 weeks ended June 30, 2026.
- Dividends of $98.7 million for the 26 weeks ended June 30, 2026.
- Quarterly cash dividend of $0.75 per share of common stock, distributed on September 29, 2026, to shareholders of record at the close of business on September 1, 2026.
What drove it
- Comparable restaurant sales at company restaurants increased 6.2% during the 13 weeks ended June 30, 2026.
- Store weeks increased 5.0% during the 13 weeks ended June 30, 2026.
- Average weekly sales were $177,252, including $25,369 of to-go sales.
- Restaurant margin dollars increased 6.9% to $275.1 million primarily due to higher sales.
- Nine company restaurants and one franchise restaurant were opened.
- Comparable restaurant sales at company restaurants increased 6.7% during the 26 weeks ended June 30, 2026.
- Thirteen company restaurants and three franchise restaurants were opened during the 26 weeks ended June 30, 2026.
Concerns
- Restaurant margin, as a percentage of restaurant and other sales, decreased 66 basis points to 16.4%.
- Commodity inflation was 7.0% and wage and other labor inflation was 3.9%.
- Income from operations decreased 2.4%, net income decreased 1.7%, and diluted earnings per share decreased 0.7%.
- Diluted earnings per share decreased primarily due to higher general and administrative expenses and higher depreciation and amortization expenses.
- Royalties and franchise fees were $7,063 (in thousands), compared with $8,080 (in thousands) in the prior year.
What to watch
- Comparable restaurant sales at company restaurants for the first five weeks of the third quarter of fiscal 2026 increased 6.2% compared to 2025.
- Management expects commodity inflation of approximately 5% for 2026.
- Management reiterated wage and other labor inflation of 3% to 4% for 2026.
- Management reiterated store week growth of 5% to 6%, including the benefit from franchise acquisitions.
- Management reiterated total capital expenditures of approximately $400 million.
Balance sheet and cash flow
- Cash provided by operating activities was $180.1 million for the 13 weeks ended June 30, 2026.
- Capital expenditures were $98.7 million for the 13 weeks ended June 30, 2026.
- Cash provided by operating activities was $439.2 million for the 26 weeks ended June 30, 2026.
- Capital expenditures were $178.8 million for the 26 weeks ended June 30, 2026.
- Franchise acquisitions were $71.8 million for the 26 weeks ended June 30, 2026.
Analysis
Texas Roadhouse reported strong top-line momentum in the second quarter. Total revenue increased 11.1% to $1,679,976 (in thousands), supported by a 6.2% increase in comparable restaurant sales at company restaurants and 5.0% store-week growth. Average weekly sales reached $177,252, including $25,369 of to-go sales, versus $167,350 and $22,243, respectively, in the prior year. Management attributed the sales performance to continued strong traffic trends and record average weekly sales.
The revenue growth did not carry through to quarterly profitability. Income from operations declined 2.4% to $142,788 (in thousands), net income declined 1.7% to $121,933 (in thousands), and diluted earnings per share declined 0.7% to $1.85. The company cited higher general and administrative expenses and higher depreciation and amortization expenses as primary EPS headwinds, partially offset by higher restaurant margin dollars and the impact of share repurchases.
Restaurant-level profitability also faced cost pressure. Restaurant margin dollars increased 6.9% to $275.1 million, primarily due to higher sales, but restaurant margin as a percentage of restaurant and other sales declined 66 basis points to 16.4%. Commodity inflation of 7.0% and wage and other labor inflation of 3.9% were only partially offset by higher sales. Food and beverage costs, labor costs, depreciation and amortization, pre-opening expenses, and general and administrative expenses were each higher than in the prior-year quarter.
The company continued to fund development and capital returns. It opened nine company restaurants and one franchise restaurant during the quarter, generated $180.1 million of cash provided by operating activities, and spent $98.7 million on capital expenditures. Capital allocation also included $49.3 million of dividends and $42.6 million of common-stock repurchases. The board approved a quarterly cash dividend of $0.75 per share, payable on September 29, 2026.
For 2026, management updated its commodity-inflation expectation to approximately 5% and its effective income-tax-rate expectation to approximately 14%. It reiterated 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. Comparable restaurant sales at company restaurants increased 6.2% in the first five weeks of the third quarter, making sales momentum, commodity costs, and the ability to stabilize restaurant margin central areas to monitor.
Management, verbatim
We are excited about the momentum in our business this quarter as continued strong traffic trends drove record average weekly sales. These results are a testament to the hard work, passion, and ownership mentality of our operators and their commitment to our mission, values, and purpose of Serving Communities Across America and the World.
Jerry Morgan, Chief Executive Officer of Texas Roadhouse, Inc.
Looking ahead, we continue to expect meaningful growth opportunities across all three of our brands. With a strong development pipeline, healthy balance sheet, and our disciplined capital allocation approach, we remain focused on expanding our footprint, investing in our people, and executing Legendary Food and Legendary Service that sets us apart. We believe this focus positions us well to continue creating long-term value for our shareholders.
Jerry Morgan, Chief Executive Officer of Texas Roadhouse, Inc.
Not in the filing
stated, not guessed- Previous-release outlook was not provided, so no comparison of actual results versus prior guidance is available.
- GAAP gross margin was not reported.
- Non-GAAP earnings per share was not reported.
- Free cash flow was not reported.
- Cash balance was not reported in the provided filing text.
- Debt balance was not reported in the provided filing text.
- Prior-quarter comparisons were not reported.
- The provided filing text is truncated during the condensed consolidated statements of income, so line items following "Net income attributable" are not available.
AlphaAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.
Background
The company filed an SEC 8-K with Exhibit 99.1 covering second quarter 2026 operating results and a 2026 outlook update.
Ticker impact
Texas Roadhouse reported Q2 2026 results and updated 2026 outlook, including commodity inflation near 5% and an effective tax rate near 14%.
Near-term reaction likely muted unless investors focus on the updated commodity inflation and tax-rate assumptions versus the modest EPS decline.
The filing provides fresh, decision-relevant guidance inputs (commodity inflation, tax rate) plus operating metrics (comps, margin dollars) and capital allocation (dividend and buybacks). However, the headline financials show only small YoY changes, limiting upside surprise potential.
Market effects
Casual dining peers may see read-across on traffic strength and margin sensitivity to commodity and wage inflation assumptions.
Limited direct regional impact; demand signal is broad-based across company restaurants.
Low, as the disclosure is primarily US restaurant operations and domestic cost assumptions.
Counterpoint
Investors may discount the strong comp sales if restaurant margin as a percentage fell due to inflation, implying pricing power is not fully offsetting cost pressure.
Key entities
- companyTexas Roadhouse, Inc.
Reported Q2 2026 results, updated 2026 outlook assumptions, and declared a $0.75 quarterly dividend.
- executiveJerry Morgan
CEO who commented on momentum and reiterated the company’s growth and capital allocation approach.
