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Texas Roadhouse Beats Inflation, Accelerates Unit Growth
8 Aug
Summary
- Texas Roadhouse reports strong Q2 sales, up 5.8% with traffic gains
- Commodity inflation pressures margins, but company plans aggressive expansion
- Buyback program paused as company focuses on franchise acquisitions
As of August 8th, 2025, Texas Roadhouse is navigating a challenging inflationary environment while maintaining robust sales growth and accelerating its unit expansion plans.
In the second quarter, the steakhouse chain reported a 5.8% increase in comparable sales, with traffic accounting for most of the gain. This strong performance has continued into the third quarter, with comps up 5.3% through the first five weeks.
However, the company has faced rising commodity costs, particularly for beef, which have pressured restaurant margins. To offset these pressures, Texas Roadhouse has increased menu prices, though analysts have lowered their earnings forecasts for 2025 and 2026 as a result.
Despite the cost headwinds, the company is preparing for an ambitious unit growth program in 2026, with plans to open high 30s of new locations, up from its historical cadence of around 30 per year. To fund this expansion, Texas Roadhouse has paused its share buyback program, opting instead to focus on acquiring franchise locations.
Analysts remain bullish on the brand, noting that Texas Roadhouse's consistent mid-single-digit comparable sales growth demonstrates the strength of the concept and its ability to attract diners even in uncertain economic times.
