Texas Roadhouse, Inc.

For the first quarter of 2026, revenue increased 12.8% to over $1.6 billion. Diluted EPS rose 9.6% to $1.87. Comparable sales increased 7.1%, led by 4.5% traffic growth and a 2.6% increase in average check. Restaurant margin dollars rose 10.5% to $264 million, while restaurant margin as a percentage of sales declined 36 basis points to 16.3%. Food and beverage costs were 35.3% of sales, up 122 basis points year over year, driven primarily by 6.2% commodity inflation. Labor was 32.9% of sales, improving 46 basis points year over year. The company ended the quarter with $215 million of cash and generated $259 million of operating cash flow. Looking ahead, management raised full-year 2026 commodity inflation guidance to 6%–7% from about 7% and still expects Q2 to be the high point at roughly 7%–8%, with inflation moderating in the second half of the year. Full-year wage and other labor inflation guidance remains 3%–4%, capital expenditures remain about $400 million, and the tax rate outlook stays at 14%–15%.

Jerry Morgan emphasized that the quarter reflected strong operator execution, guest trust, and a continued focus on value, legendary food, and legendary service. He sounded upbeat about the brand, highlighting awards, strong traffic, and momentum in technology and development. He also stressed that the company is moving carefully on tools like handheld tablets, trying to expand tests slowly while continuing to learn from guest and operator feedback.

Mike Lenihan focused on sales momentum, cost outlook, and liquidity. He said the company has seen positive comparable sales across all brands, with first 5 weeks of Q2 comps up 6.5% and weekly sales averaging $174,000, while commodity inflation is now expected to be 6%–7% for 2026 and Q2 should be the high point at 7%–8%. He noted $215 million of cash, $259 million of operating cash flow, $158 million of outflows for capex, dividends, repurchases and the California acquisition, and reiterated roughly $400 million of 2026 capex, plus labor inflation guidance of 3%–4% and tax rate guidance of 14%–15%.

Most of the Q&A centered on beef and commodity inflation, with analysts pressing on whether the higher beef environment is changing the company’s outlook. Management said the revised commodity guide is almost entirely beef-driven, that retail demand shifts toward pork, chicken and lower-cost beef cuts are part of what they are seeing, and that Q2 should still be the peak before inflation moderates later in the year. Other questions focused on traffic stability, consumer behavior, to-go growth, pricing cadence, labor productivity, technology, and Bubba’s 33 expansion; management said traffic has held up well versus the industry, to-go is benefiting from execution and technology, and Bubba’s is still in an early growth phase with smaller prototypes and conversions being tested.