Texas Roadhouse (NASDAQ:TXRH) Posts Quarterly Earnings Results, Misses Estimates By $0.10 EPS

Key Points

• Texas Roadhouse missed quarterly estimates: EPS was $1.36 versus the $1.46 consensus, while revenue of $1.57 billion also came in below expectations of about $1.58 billion. EPS nevertheless rose 8.6% year over year.
• Third-quarter revenue grew 9.5%, comparable sales increased 4.3% and restaurant margin expanded 30 basis points to 14.6%. Comparable-sales growth slowed to 1% in September, though management reported sequential improvement in early fourth-quarter results.
• Management expects continued restaurant expansion, targeting about 35 company openings in both 2026 and 2027, while forecasting higher commodity and labor costs. The company also declared a quarterly dividend of $0.75 per share.

Texas Roadhouse (NASDAQ:TXRH - Get Free Report) released its quarterly earnings results on Thursday. The restaurant operator reported $1.36 EPS for the quarter, missing the consensus estimate of $1.46 by ($0.10), FiscalAI reports. Texas Roadhouse had a return on equity of 27.20% and a net margin of 6.63%. The company had revenue of $1.57 billion during the quarter, compared to the consensus estimate of $1.58 billion.

Here are the key takeaways from Texas Roadhouse's conference call:

• Third-quarter revenue grew 9.5% to $1.6 billion, with comparable sales up 4.3% on 0.7% traffic growth. Restaurant margin increased 30 basis points to 14.6%, and diluted EPS rose 8.6% to $1.36.
• Comps slowed to 1% in September after stronger July and August results; management attributed some weakness to a false social-media hoax. Fourth-quarter comps were up 1.5% through five weeks, with sequential improvement reported, though holiday shifts are expected to reduce quarterly comp growth by about 75 basis points.
• Management expects 2026 commodity inflation of about 5% and labor inflation of 3.5%–4%; for 2027, it forecasts commodity inflation of about 4% and labor inflation of about 3%. The company said lower food-cost pressure and sales leverage helped improve third-quarter restaurant margins.
• The company remains on track for about 35 restaurant openings in 2026 and plans about 35 more in 2027, while franchise partners are targeting roughly 10 openings in 2027. Development agreements in Vietnam and Japan add to international growth opportunities, although planned capital expenditures rise to about $440 million in 2026 and $425 million in 2027.

Texas Roadhouse Stock Down 2.4%

Shares of TXRH traded down $4.66 during mid-day trading on Thursday, hitting $191.79. 2,453,260 shares of the company traded hands, compared to its average volume of 1,087,943. Texas Roadhouse has a 1-year low of $153.82 and a 1-year high of $216.30. The company has a quick ratio of 0.39, a current ratio of 0.46 and a debt-to-equity ratio of 0.03. The company has a market capitalization of $12.59 billion, a PE ratio of 30.69, a price-to-earnings-growth ratio of 2.00 and a beta of 0.81. The business has a 50 day moving average of $173.05 and a 200 day moving average of $179.11.

Texas Roadhouse News Summary

Here are the key news stories impacting Texas Roadhouse this week:

• Positive Sentiment: The company declared a quarterly dividend of $0.75 per share. Texas Roadhouse third-quarter results and dividend announcement
• Neutral Sentiment: Quarterly earnings were $1.36 per share, up from $1.25 a year earlier, though the increase was not enough to meet analysts’ expectations. Texas Roadhouse misses Q3 earnings and revenue estimates
• Negative Sentiment: TXRH reported EPS of $1.36, below estimates of $1.46–$1.49, while revenue of $1.57 billion also missed the roughly $1.58 billion consensus. Softer traffic adds to concerns about demand and helps explain the stock’s weakness. Texas Roadhouse reports third-quarter results despite softer traffic

Wall Street Analyst Weigh In

A number of brokerages have commented on TXRH. Barclays downgraded shares of Texas Roadhouse from an "equal weight" rating to a "cautious" rating in a report on Wednesday, October 14th. KeyCorp restated a "sector weight" rating on shares of Texas Roadhouse in a report on Friday, October 2nd. Evercore set a $220.00 price objective on shares of Texas Roadhouse in a research report on Friday, September 25th. UBS Group lifted their price objective on shares of Texas Roadhouse from $210.00 to $235.00 and gave the stock a "buy" rating in a research report on Monday, August 3rd. Finally, Benchmark upgraded shares of Texas Roadhouse from a "hold" rating to a "strong-buy" rating in a research note on Tuesday, October 6th. Two investment analysts have rated the stock with a Strong Buy rating, thirteen have given a Buy rating, nine have issued a Hold rating and one has given a Sell rating to the company. According to data from MarketBeat, Texas Roadhouse has a consensus rating of "Moderate Buy" and an average target price of $206.32.

Insider Transactions at Texas Roadhouse

In other Texas Roadhouse news, Director Hugh J. Carroll sold 650 shares of the company's stock in a transaction that occurred on Tuesday, August 25th. The shares were sold at an average price of $203.99, for a total transaction of $132,593.50. Following the transaction, the director owned 2,883 shares in the company, valued at approximately $588,103.17. This represents a 18.40% decrease in their position. The sale was disclosed in a document filed with the SEC, which can be accessed through the SEC website. Also, Director Gregory N. Moore sold 3,000 shares of the firm's stock in a transaction on Tuesday, August 11th. The stock was sold at an average price of $208.32, for a total transaction of $624,960.00. Following the completion of the transaction, the director directly owned 26,900 shares of the company's stock, valued at approximately $5,603,808. This represents a 10.03% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. Insiders sold a total of 19,970 shares of company stock worth $4,061,808 over the last ninety days. 0.50% of the stock is currently owned by insiders.

Texas Roadhouse Company Profile

Texas Roadhouse, Inc NASDAQ: TXRH operates full-service casual dining restaurants under the Texas Roadhouse, Bubba's 33 and Jaggers brands. Its restaurants serve made-from-scratch meals centered on hand-cut steaks, ribs, chicken, seafood, burgers and other American-style dishes, along with freshly baked rolls and a selection of beverages.

Founded in 1993, Texas Roadhouse began with its first restaurant in Clarksville, Indiana. The company's restaurant network includes company-owned and franchised locations across the United States, as well as international locations.

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