Restaurant company Texas Roadhouse (NASDAQ:TXRH) met Wall Street’s revenue expectations in Q2 CY2026, with sales up 11.1% year on year to $1.68 billion. Its GAAP profit of $1.85 per share was 0.9% above analysts’ consensus estimates.
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Texas Roadhouse (TXRH) Q2 CY2026 Highlights:
- Revenue: $1.68 billion vs analyst estimates of $1.67 billion (11.1% year-on-year growth, in line)
- EPS (GAAP): $1.85 vs analyst estimates of $1.83 (0.9% beat)
- Operating Margin: 8.5%, down from 9.7% in the same quarter last year
- Free Cash Flow Margin: 4.8%, up from 2.4% in the same quarter last year
- Locations: 832 at quarter end, up from 797 in the same quarter last year
- Same-Store Sales rose 6.5% year on year, in line with the same quarter last year
- Market Capitalization: $13.7 billion
Company Overview
With locations often featuring Western-inspired decor, Texas Roadhouse (NASDAQ:TXRH) is an American restaurant chain specializing in Southern-style cuisine and steaks.
Revenue Growth
A company’s long-term performance is an indicator of its overall quality. Even a bad business can shine for one or two quarters, but a top-tier one grows for years.
With $6.23 billion in revenue over the past 12 months, Texas Roadhouse is one of the larger restaurant chains in the industry and benefits from a well-known brand that influences consumer purchasing decisions.
As you can see below, Texas Roadhouse’s 13.4% annualized revenue growth over the last seven years was impressive as it opened new restaurants and increased sales at existing, established dining locations.
This quarter, Texas Roadhouse’s year-on-year revenue growth was 11.1%, and its $1.68 billion of revenue was in line with Wall Street’s estimates.
Looking ahead, sell-side analysts expect revenue to grow 9.9% over the next 12 months, a deceleration versus the last seven years. Still, this projection is noteworthy and implies the market sees success for its menu offerings.
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Restaurant Performance
Number of Restaurants
A restaurant chain’s total number of dining locations influences how much it can sell and how quickly revenue can grow.
Texas Roadhouse sported 832 locations in the latest quarter. Over the last two years, it has opened new restaurants at a rapid clip by averaging 4.9% annual growth, among the fastest in the restaurant sector.
When a chain opens new restaurants, it usually means it’s investing for growth because there’s healthy demand for its meals and there are markets where its concepts have few or no locations.
Same-Store Sales
The change in a company’s restaurant base only tells one side of the story. The other is the performance of its existing locations, which informs management teams whether they should expand or downsize their physical footprints. Same-store sales gives us insight into this topic because it measures organic growth at restaurants open for at least a year.
Texas Roadhouse has been one of the most successful restaurant chains over the last two years thanks to skyrocketing demand within its existing dining locations. On average, the company has posted exceptional year-on-year same-store sales growth of 6.2%. This performance suggests its rollout of new restaurants is beneficial for shareholders. We like this backdrop because it gives Texas Roadhouse multiple ways to win: revenue growth can come from new restaurants or increased foot traffic and higher sales per customer at existing locations.
In the latest quarter, Texas Roadhouse’s same-store sales rose 6.5% year on year. This performance was more or less in line with its historical levels.
Key Takeaways from Texas Roadhouse’s Q2 Results
We enjoyed seeing Texas Roadhouse beat analysts’ same-store sales expectations this quarter. We were also happy its revenue was in line with Wall Street’s estimates. Overall, this print had some key positives. The stock traded up 1.2% to $210.50 immediately after reporting.
Indeed, Texas Roadhouse had a rock-solid quarterly earnings result, but is this stock a good investment here? The latest quarter does matter, but not nearly as much as longer-term fundamentals and valuation, when deciding if the stock is a buy. We cover that in our actionable full research report which you can read here (it’s free).