Texas Roadhouse missed Street estimates on both the top and bottom lines in the fourth quarter as high beef prices weighed on profits. But the restaurant chain’s strong comparable restaurant sales through the first seven weeks of the first quarter of 2026 paired with no change in management’s commodity inflation outlook for the year are keeping shares afloat Thursday evening. Revenue in the quarter ending Dec. 30 increased 3.1% year over year to $1.48 billion, missing the LSEG-complied Wall Street consensus estimate of $1.496 billion. Earnings per share dropped 26% on an annual basis to $1.28, missing expectations of $1.51, LSEG data showed. TXRH YTD mountain Texas Roadhouse YTD Shares of Texas Roadhouse rose about 2.5% in after-hours trading to around $187 per share. The move would erase Thursday’s regular-hours trading losses. The stock was already off to a good start to 2026, gaining about 10% as of Thursday’s close. Bottom line This was a weak quarter from Texas Roadhouse, but the market was giving it a pass because everyone knew beef costs were going to be an issue. On the surface, we were a little underwhelmed by the comp sales growth this quarter. After delivering 6.1% comp growth in the third quarter and guiding 5.4% growth through the first five weeks of the fourth quarter, sales growth slipped back to 4.2% for the entire quarter, missing analyst forecasts of about 5.2%. The 4.2% increase was driven by a 1.9% increase in traffic and 2.3% increase in average check. The results lagged due to a slowdown as the quarter progressed, with comps sales up 6.1%, 4.8% and 2.2% in October, November, and December, respectively. Adverse weather in December may have weighed on the results. Management also called out a negative impact from the timing of Christmas. Usually, this cadence would spell trouble for a restaurant chain or retailer. Positively, though, sluggishness was a temporary trend. One of the best things that came out of this earnings release was the company disclosing that comp sales increased 8.2% through the first seven weeks of the first quarter. Why we own it Texas Roadhouse is a casual steak chain that offers quality food at an affordable price in a fun atmosphere, creating one of the more compelling value propositions for consumers in the full-service dining category. Competitors: Darden (Olive Garden, LongHorn Steakhouse), Brinker (Chili’s and Maggiano’s), Bloomin’ Brands (Outback, Carrabba’s Italian Grill, Bonefish Grill) Portfolio weighting: 0.93% Most recent buy: Dec. 17, 2025 Initiated: Feb. 4, 2025 In an economy where the consumer remains selective, restaurant goers flocked to Texas Roadhouse where they know they will get served a good meal at a great price. Menu price increases have been surgical and well below competitors’ and costs. This may be squeezing margins, but Texas Roadhouse is building customer loyalty. We’ve seen too many full-service and quick-service restaurants hurt their reputation by raising prices too…
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