Texas Roadhouse Comparable Sales Slow as Traffic Softens

The Tip Desk · November 6, 2026 · 3 min read

Comparable restaurant sales rose 4.3% in the 13 weeks ended September 29, 2026, after 6.2% in the prior quarter, as the company said traffic softened late in the period.

Texas Roadhouse, Inc. (TXRH), the casual-dining operator, reported comparable restaurant sales growth of 4.3% for the 13 weeks ended September 29, 2026, a slowdown from 6.2% in the second quarter after 7.1% in the first quarter.

Chief Executive Officer Jerry Morgan said the company entered the quarter with strong momentum and that traffic softened late in the quarter.

Total revenue rose 9.5% year over year to $1.573 billion, slower than the 11.1% increase in the prior quarter. Income from operations increased 6.2% to $103.0 million, reversing a 2.4% year-over-year decline in the second quarter. Diluted earnings per share rose 8.6% to $1.36, after a 0.7% year-over-year decline in the prior quarter.

The company said diluted earnings per share increased primarily because of higher restaurant margin dollars and share repurchases, partially offset by higher depreciation and amortization and higher general and administrative expenses.

Restaurant margin dollars increased 11.9% to $228.6 million, accelerating from 6.9% growth in the second quarter. Restaurant margin as a percentage of restaurant and other sales expanded 30 basis points to 14.6%, reversing a 66-basis-point contraction to 16.4% in the prior quarter. The company attributed the margin expansion primarily to higher sales, partially offset by commodity inflation of 2.0% and wage and other labor inflation of 4.1%. Commodity inflation had been 7.0% in the second quarter.

Store weeks increased 5.1%. Average weekly sales were $163,980, including $23,628 of to-go sales, compared with $177,252 including $25,369 of to-go sales in the second quarter.

Texas Roadhouse restaurants only posted comparable sales of 4.4%, versus 6.3% a year earlier. Bubba’s 33 comparable sales were 2.8%, versus 1.8% a year earlier. Franchise comparable sales were 4.5%, versus 7.2% a year earlier. Five company restaurants and three franchise restaurants were opened, versus nine company and one franchise in the second quarter. Restaurants open at the end of the quarter totaled 840.

Cash provided by operating activities was $146.7 million. Capital allocation included capital expenditures of $135.6 million, dividends of $49.2 million, and repurchases of common stock of $12.4 million.

Comparable restaurant sales at company restaurants for the first five weeks of the fourth quarter of 2026 increased 1.5% compared with 2025. The company implemented a menu price increase of approximately 1.0% at the beginning of the fourth quarter.

Management updated 2026 expectations for store-week growth of 5.0% to 5.5%, including the benefit from franchise acquisitions, 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. It reiterated positive comparable restaurant sales growth including the benefit of menu pricing actions and commodity inflation of approximately 5.0%.

Initial 2027 expectations include positive comparable restaurant sales growth including the benefit of 2026 menu pricing actions, 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.

The board approved a quarterly cash dividend of $0.75 a share, payable December 29, 2026.