A casual-dining chain famous for hand-cut steaks and ribs, Texas Roadhouse also runs Bubba's 33 (burgers, pizza, wings) and Jaggers (fast-casual burgers and chicken) across dozens of states and ten foreign countries. Founder Kent Taylor opened the first location in Clarksville, Indiana, in 1993, choosing a Texas-themed name for its oversized portions and big hospitality. Managers share in each restaurant's profits through an owner-operator partnership.
Restaurant margin fell 70 basis points to 16.4% as 7.0% commodity inflation, led by beef, outpaced a 6.2% comparable sales increase.
Commodity inflation hit 7.0%, the highest rate in over two years, and contracted again. rose 11.1% to $1.68 billion on 6.2% growth, but fell 1.7% to $124.5 million as beef costs and wage inflation absorbed the sales . The company is growing traffic and units, but margin recovery now depends on whether commodity costs ease from these levels.
Key takeaways
contracted 70 to 16.4% of restaurant sales, as 7.0% commodity inflation—driven by beef—and 3.9% wage inflation more than offset the from a 6.2% increase in .
rose 6.2%, composed of a 3.8% increase in guest traffic and a 2.4% increase in per-person average check, which included a 1.4% menu price increase taken in Q2 2025.
reached $1.68 billion, up 11.1% , supported by the increase and a 5.0% increase in store weeks from new company openings and franchise acquisitions.
Section summaries
Management's Discussion and Analysis
Q2 2026 revenue rose 11.1% on 6.2% comparable sales growth, but net income fell 1.7% as commodity and wage inflation compressed margins.
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Total grew 11.1% to $1.68 billion, driven by a 6.2% increase in and a 5.0% increase in .
dollars rose 6.9% to $275.1 million, but margin as a percentage of sales contracted 70 to 16.4% due to 7.0% and 3.9% wage inflation.
dollars rose 6.9% to $275.1 million, but the growth rate decelerated from the 6.1% increase in Q2 2025 as commodity costs accelerated from 5.2% a year ago to 7.0%.
fell 2.4% to $142.8 million and contracted 1.2 points to 8.5%, as the compression was only partially offset by lower general and administrative expenses as a percentage of .
rose 128.1% to $81.5 million, as of $180.1 million more than covered $98.6 million in ; the company held $50.0 million in , unchanged from the prior quarter.
What changed
continued to erode, falling to 16.4% from 16.3% in Q1 2026 and 17.1% in Q2 2025, as commodity inflation accelerated to 7.0% from 6.2% in the prior quarter and 5.2% a year ago.
growth decelerated to 6.2% from 7.1% in Q1 2026, with traffic growth easing to 3.8% from 4.2%, though both remained above the 5.8% comparable sales and 4.0% traffic growth in Q2 2025.
The $50.0 million draw first taken in Q1 2026 remained outstanding, confirming the borrowing was not a one-quarter seasonal bridge; the company ended Q2 2026 with $202.4 million in cash, down from $214.6 million at the end of Q1.
Full-year 2026 commodity inflation was revised down to approximately 5% from the 6-7% guided in Q1 2026, suggesting management expects beef cost pressures to ease in the second half of the year.
What to watch
in Q3 2026: whether the 16.4% rate can stabilize or expand as full-year commodity inflation was lowered to approximately 5%, implying a deceleration from the 7.0% recorded in Q2.
Beef cost trajectory: the filing confirms no hedging and concentrated vendor risk among four suppliers; whether the revised 5% full-year commodity inflation materializes will determine if margin pressure eases in the second half.
and traffic sustainability: whether the 3.8% traffic growth can be maintained as the company laps the 4.0% traffic increase from Q2 2025 and cumulative menu pricing faces potential consumer resistance.
Balance sheet and capital allocation: whether the $50.0 million balance is reduced or increased, given the $81.5 million in quarterly and ongoing franchise acquisitions and share repurchases.
decreased 1.7% to $121.9 million as higher pre-opening, , and general and administrative expenses more than offset the increase in .
The Texas Roadhouse 's margin fell to 16.5% from 17.1%, while Bubba's 33 margin declined to 15.3% from 16.7%, both pressured by higher food costs.
was $439.2 million year-to-date; the company expects ~$400 million in 2026 and of approximately 5%.
Quantitative and Qualitative Disclosures About Market Risk
Information regarding market risk appears in our Annual Report on Form 10-K for the year ended December 30, 2025 in Part II, Item 7A, Quantitative and Qualitative Disclosures About Market Risk. There have been no material changes in market risk previously disclosed in our Form…
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Information regarding market risk appears in our Annual Report on Form 10-K for the year ended December 30, 2025 in Part II, Item 7A, Quantitative and Qualitative Disclosures About Market Risk. There have been no material changes in market risk previously disclosed in our Form 10-K for the fiscal year ended December 30, 2025.
Information regarding legal proceedings is included in Note 6 to the Condensed Consolidated Financial Statements appearing in Part 1, Item 1 of this report on Form 10-Q.
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Information regarding legal proceedings is included in Note 6 to the Condensed Consolidated Financial Statements appearing in Part 1, Item 1 of this report on Form 10-Q.
Information regarding risk factors appears in our Annual Report on Form 10-K for the year ended December 30, 2025, under the heading "Special Note Regarding Forward-looking Statements" and in Part I, Item 1A, Risk Factors. There have been no material changes from the risk fact…
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Information regarding risk factors appears in our Annual Report on Form 10-K for the year ended December 30, 2025, under the heading "Special Note Regarding Forward-looking Statements" and in Part I, Item 1A, Risk Factors. There have been no material changes from the risk factors previously disclosed in our Form 10-K for the fiscal year ended December 30, 2025.