GET DAILY SIGNALSTexas Roadhouse (TXRH) Q3 Earnings Show +9.5% Revenue Rise but Softer Sales Growth
Key Takeaways
- Texas Roadhouse reported total revenue of $1.57 billion for the third quarter of fiscal 2026, up 9.5% year over year and roughly in line with consensus estimates.
- Diluted earnings per share (EPS) rose 8.6% to $1.36, but landed below analyst expectations of approximately $1.46 to $1.49.
- Comparable restaurant sales increased 4.3%, a marked deceleration from 6.3% in the prior-year quarter, as traffic softened late in the period.
- Net income rose 7.4% to $89.4 million, while restaurant margin dollars climbed 11.9% to $228.6 million despite commodity and labor inflation.
- The board declared a quarterly cash dividend of $0.75 per share, payable December 29, 2026, to shareholders of record on December 1, 2026.
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Earnings Context and Why It Matters
Texas Roadhouse has been one of the stronger performers in the casual-dining sector, consistently outpacing peers through new restaurant openings and resilient same-store sales growth. Heading into this report, investors were focused on whether the chain could sustain its momentum amid rising food and labor costs and a more cautious consumer. The third quarter of fiscal 2026, covering the 13 weeks ended September 29, 2026, offered a key test of that durability. With the company entering the period with strong momentum but flagging softer traffic late in the quarter, the results provide an important signal about near-term demand trends and the health of the broader restaurant industry heading into the holiday season.
Reported Results
Texas Roadhouse reported total revenue of $1.57 billion for the third quarter, a 9.5% increase from $1.44 billion a year earlier and essentially in line with consensus expectations of about $1.58 billion. Diluted earnings per share came in at $1.36, up 8.6% from $1.25 in the prior-year period but below analyst estimates, which ranged from roughly $1.46 to $1.49. Net income attributable to the company rose 7.4% to $89.4 million.
Comparable restaurant sales increased 4.3%, down from 6.3% in the same quarter last year. Restaurant margin dollars grew 11.9% to $228.6 million, while restaurant margin as a percentage of sales improved 30 basis points to 14.6%. Commodity inflation of approximately 2.0% and wage and other labor inflation of 4.1% were partially offset by higher sales. The company opened five company restaurants and three franchise restaurants during the quarter, ending the period with 840 locations system-wide, up from 806 a year earlier. I also checked this using Tickeron’s AI Screener to see how the stock compares to others in the industry.
Market Reaction and Investor Sentiment
Shares of Texas Roadhouse edged lower in the immediate aftermath of the report, declining roughly 1.9% to 2.5% as investors digested the earnings-per-share miss and the softer comparable-sales trend. The muted reaction partly reflected the fact that revenue was broadly in line with expectations, but the weaker same-store sales growth and the company's commentary about traffic softening late in the quarter weighed on sentiment. CEO Jerry Morgan acknowledged the slowdown while emphasizing that operators remain focused on food quality, service, and the guest experience. The board's decision to raise the quarterly dividend to $0.75 per share reinforced the company's ongoing commitment to returning capital to shareholders, offering a measure of support against the near-term demand concerns.
Forward Outlook and Key Factors to Monitor
Management updated its full-year 2026 guidance, now projecting store-week growth of 5.0% to 5.5%, wage and other labor inflation of 3.5% to 4.0%, an effective income tax rate of approximately 13.0%, and commodity inflation of about 5.0%. The company reiterated its expectation for positive comparable restaurant sales growth for the year.
For 2027, Texas Roadhouse offered initial guidance that includes store-week growth of 5.0% to 6.0%, commodity inflation of approximately 4.0%, and wage and other labor inflation of about 3.0%. Investors will be watching whether these cost pressures remain manageable as the company continues its aggressive expansion.
Near term, the key metric to monitor is comparable restaurant sales. For the first five weeks of the fourth quarter, same-store sales were up only 1.5% year over year, and the company implemented a menu price increase of approximately 1.0% at the start of the quarter. How traffic responds to that pricing, and whether the late-quarter softness proves temporary or persistent, will be central to the stock's next move. Margin resilience amid commodity and labor inflation will also remain a focal point for investors.
Using Tickeron’s AI Tools in My Analysis
In my own workflow, I frequently rely on Tickeron’s AI Screener to quickly filter for stocks with similar fundamentals and technical setups. This helps me put earnings results like these into broader context without spending hours on manual screens. The tool’s ability to combine industry filters, performance metrics, and AI signals makes it a practical addition when evaluating names in the restaurant sector or beyond.
Disclaimer
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Contributor
Sergey Savastiouk, Ph.D. has a degree in Applied Mathematics from Moscow University and has extensive experience as an entrepreneur, investor, manager, and mathematician. His professional expertise is in applied mathematics, mathematical modeling, system and pattern analysis, and software and hardware system integration. He has served as the CEO of several hi-tech start-up companies and nonprofit organizations, which has given him proven capabilities in business strategy for high-tech start-up companies, market assessment, company formation, team building, product development, marketing, and sales. He has published numerous articles in journals and magazines on related fields. As a retail investor, he spent 15 years developing his proprietary trading and quantitative algorithms (now Tickeron’s A.I.), which brought him significant returns in trading the stock market. His current work and goal in founding Tickeron is to bring professional, sophisticated stock market analysis capabilities to retail investors via an easy-to-use interface.
TXRH in upward trend: 10-day moving average broke above 50-day moving average on November 03, 2026
The 10-day moving average for TXRH crossed bullishly above the 50-day moving average on November 03, 2026. This indicates that the trend has shifted higher and could be considered a buy signal. In 12 of 15 past instances when the 10-day crossed above the 50-day, the stock continued to move higher over the following month. The odds of a continued upward trend are 80%.
Technical Analysis (Indicators)
Bullish Trend Analysis
The Momentum Indicator moved above the 0 level on October 08, 2026. You may want to consider a long position or call options on TXRH as a result. In 65 of 101 past instances where the momentum indicator moved above 0, the stock continued to climb. The odds of a continued upward trend are 64%.
The Moving Average Convergence Divergence (MACD) for TXRH just turned positive on October 06, 2026. Looking at past instances where TXRH's MACD turned positive, the stock continued to rise in 33 of 52 cases over the following month. The odds of a continued upward trend are 63%.
TXRH moved above its 50-day moving average on October 29, 2026 date and that indicates a change from a downward trend to an upward trend.
Following a +9.75% 3-day Advance, the price is estimated to grow further. Considering data from situations where TXRH advanced for three days, in 187 of 302 cases, the price rose further within the following month. The odds of a continued upward trend are 62%.
The Aroon Indicator entered an Uptrend today. In 166 of 289 cases where TXRH Aroon's Indicator entered an Uptrend, the price rose further within the following month. The odds of a continued Uptrend are 57%.
Bearish Trend Analysis
The RSI Indicator demonstrated that the stock has entered the overbought zone. This may point to a price pull-back soon.
The Stochastic Oscillator demonstrated that the ticker has stayed in the overbought zone for 4 days. The longer the ticker stays in the overbought zone, the sooner a price pull-back is expected.
Following a 3-day decline, the stock is projected to fall further. Considering past instances where TXRH declined for three days, the price rose further in 50 of 62 cases within the following month. The odds of a continued downward trend are 54%.
TXRH broke above its upper Bollinger Band on November 04, 2026. This could be a sign that the stock is set to drop as the stock moves back below the upper band and toward the middle band. You may want to consider selling the stock or exploring put options.
Fundamental Analysis (Ratings)
The Tickeron PE Growth Rating for this company is 19 (best 1 - 100 worst), pointing to outstanding earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron Profit vs. Risk Rating rating for this company is 20 (best 1 - 100 worst), indicating low risk on high returns. The average Profit vs. Risk Rating rating for the industry is 83, placing this stock better than average.
The Tickeron SMR rating for this company is 35 (best 1 - 100 worst), indicating strong sales and a profitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron Price Growth Rating for this company is 42 (best 1 - 100 worst), indicating steady price growth. TXRH’s price grows at a higher rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron Valuation Rating of 68 (best 1 - 100 worst) indicates that the company is slightly overvalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (8.078) is normal, around the industry mean (-0.579). P/E Ratio (30.637) is within average values for comparable stocks, (17.889). Projected Growth (PEG Ratio) (1.577) is also within normal values, averaging (7.754). Dividend Yield (0.016) settles around the average of (0.046) among similar stocks. P/S Ratio (1.805) is also within normal values, averaging (2.618).
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General Information
a chain of full-service restaurants
Industry Restaurants
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