Restaurant company Texas Roadhouse (NASDAQ: TXRH) met Wall Street’s revenue expectations in Q1 CY2026, with sales up 12.8% year on year to $1.63 billion. Its GAAP profit of $1.87 per share was 4.5% above analysts’ consensus estimates.
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Texas Roadhouse (TXRH) Q1 CY2026 Highlights:
- Revenue: $1.63 billion vs analyst estimates of $1.64 billion (12.8% year-on-year growth, in line)
- EPS (GAAP): $1.87 vs analyst estimates of $1.79 (4.5% beat)
- Adjusted EBITDA: $216.6 million vs analyst estimates of $197.1 million (13.3% margin, 9.9% beat)
- Operating Margin: 9%, in line with the same quarter last year
- Free Cash Flow Margin: 11%, similar to the same quarter last year
- Locations: 822 at quarter end, up from 792 in the same quarter last year
- Same-Store Sales rose 7.5% year on year (3.7% in the same quarter last year)
- Market Capitalization: $10.52 billion
Jerry Morgan, Chief Executive Officer of Texas Roadhouse, Inc., commented, “We kicked off 2026 with terrific momentum, thanks to the hard work and discipline of all our operators. Our strong traffic trends continue to fuel sales growth, and it’s clear that our commitment to delivering a legendary experience is appreciated by our guests.”
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 sales performance can indicate its overall quality. Any business can have short-term success, but a top-tier one grows for years.
With $6.06 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 sales grew at an impressive 13.4% compounded annual growth rate over the last seven years as it opened new restaurants and increased sales at existing, established dining locations.
This quarter, Texas Roadhouse’s year-on-year revenue growth was 12.8%, and its $1.63 billion of revenue was in line with Wall Street’s estimates.
Looking ahead, sell-side analysts expect revenue to grow 10.3% over the next 12 months, a deceleration versus the last seven years. Still, this projection is commendable and implies the market is baking in success for its menu offerings.
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Restaurant Performance
Number of Restaurants
A restaurant chain’s total number of dining locations often determines how much revenue it can generate.
Texas Roadhouse operated 822 locations in the latest quarter. It has opened new restaurants at a rapid clip over the last two years, averaging 5.3% annual growth, much faster than the broader 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
A company's restaurant base only paints one part of the picture. When demand is high, it makes sense to open more. But when demand is low, it’s prudent to close some locations and use the money in other ways. Same-store sales provides a deeper understanding of this issue 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 6.6%. 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 7.5% year on year. This performance was more or less in line with its historical levels.
Key Takeaways from Texas Roadhouse’s Q1 Results
We were impressed by how significantly Texas Roadhouse blew past analysts’ EBITDA expectations this quarter. We were also happy its same-store sales narrowly outperformed Wall Street’s estimates. Overall, we think this was still a solid quarter with some key areas of upside. The stock traded up 6.1% to $167.50 immediately following the results.
Texas Roadhouse put up rock-solid earnings, but one quarter doesn’t necessarily make the stock a buy. Let’s see if this is a good investment. What happened in the latest quarter matters, but not as much as longer-term business quality and valuation, when deciding whether to invest in this stock. We cover that in our actionable full research report which you can read here (it’s free).
