Business Context and Reporting Period
Company: Texas Roadhouse, Inc. (TXRH)
Filing Type: Form 10-Q (Unaudited)
Reporting Period: Quarter ended June 30, 2026 (Q2 2026) and 26 weeks ended June 30, 2026 (YTD 2026).
Operations: The Company operates three concepts: Texas Roadhouse, Bubba's 33, and Jaggers. As of June 30, 2026, the system included 832 restaurants (732 company-owned, 100 franchised) across 49 states, one U.S. territory, and ten foreign countries.
Key Financial Metrics
| Metric (in thousands) | Q2 2026 (13 Weeks) | Q2 2025 (13 Weeks) | YTD 2026 (26 Weeks) | YTD 2025 (26 Weeks) |
|---|---|---|---|---|
| Total Revenue | $1,679,976 | $1,512,054 | $3,313,142 | $2,959,702 |
| Net Income (Attributable to TXRH) | $121,933 | $124,085 | $245,366 | $237,747 |
| Diluted EPS | $1.85 | $1.86 | $3.72 | $3.57 |
| Restaurant Margin | $275,120 (16.4%) | $257,343 (17.1%) | $539,549 (16.4%) | $496,627 (16.9%) |
| Operating Cash Flow (YTD) | $439,227 (vs. $365,980 YTD 2025) | |||
| Cash and Equivalents (End of Period) | $202,427 | |||
| Long-term Debt | $50,000 (Revolving Credit Facility) |
Material Changes vs. Prior Period
- Revenue Growth: Total revenue increased 11.1% in Q2 2026 and 12.1% YTD, driven by a 6.2% increase in comparable restaurant sales (guest traffic +3.0%, average check +3.2%) and a 5.0% increase in store weeks due to new openings and acquisitions.
- Profitability: Net income decreased 1.7% in Q2 2026 despite higher sales, as increased restaurant margin dollars were offset by higher pre-opening, depreciation, and G&A expenses. YTD net income increased 3.2%.
- Margin Compression: Restaurant margin percentage declined to 16.4% in Q2 2026 from 17.1% in Q2 2025. This was primarily due to 7.0% commodity inflation (specifically beef costs) and 3.9% wage inflation, partially offset by higher sales volume.
- Acquisitions: The Company acquired five domestic franchise restaurants for $71.7 million during the first half of 2026, compared to 20 acquisitions in the prior year.
Guidance, Outlook, and Risks
- Outlook: Management expects store week growth of 5% to 6% for fiscal 2026. Commodity inflation is forecasted at approximately 5% for the year, with wage inflation expected between 3% and 4%. Capital expenditures are projected to be approximately $400 million for 2026.
- Dividends: The quarterly dividend was increased to $0.75 per share (from $0.68 in 2025). A Q3 dividend of $0.75 per share was declared for payment in September 2026.
- Share Repurchases: Under a $500 million program approved in February 2025, the Company repurchased $70.8 million of stock YTD. Approximately $309.2 million remains authorized.
- Liquidity: The Company maintains a $450 million revolving credit facility with $397.6 million available as of June 30, 2026. Interest rate on the facility was 4.74%.
- Risks: Key risks include commodity price volatility (beef), labor cost inflation, and the impact of economic conditions on guest traffic. The filing notes no material changes to risk factors from the 2025 10-K.
Investor Verification Checklist
- Commodity Hedging: Verify the extent of beef price locks (approx. 60% of remaining forecasted costs) and exposure to floating market prices.
- Margin Trajectory: Monitor if the 16.4% restaurant margin stabilizes or compresses further given the 7% commodity inflation headwind.
- Capital Allocation: Track the balance between new store openings (13 company openings YTD) and franchise acquisitions ($71.7M spent YTD) against the $400M capex guidance.
- Debt Utilization: Observe the utilization of the $450M credit facility, which saw $50M drawn in the period, and its impact on interest expense.
- Comparable Sales Drivers: Assess the sustainability of the 3.0% traffic increase and 3.2% check growth in the context of broader consumer spending trends.