By now, you should have access to our earnings release for the first quarter ended March 31st, 2026. We refer all of you to our earnings release in our recent filings with the SEC. If applicable, reconciliations of the non-GAAP measures to the GAAP information can be found in our earnings release. Driven by a same-store sales increase of 7.1%, including 4.5% traffic growth.
On the development front, we continue to expect approximately 35 company owned openings for the full year. Our digital kitchen technologies are supporting operators as they execute a higher volume of to-go orders without negatively impacting the dine-in experience. We are also encouraged by the initial feedback from the testing of upgraded handheld tablets that servers can use to input guest orders at the table. Included within this positive sales trend is the benefit of the 1.9% menu price increase that went into effect at the beginning of the second quarter.
Our current expectation is to be above the top end of the guidance in the second quarter, but at or below the bottom end of the guidance in the second half of the year. On the labor side, first quarter inflation was in line with our expectations, and we are maintaining our full year 2026 wage and other labor inflation guidance of 3%-4%. Also, as expected, labor productivity improved in the first quarter, with labor hours growing at approximately 35% of comparable traffic growth. With regard to our capital position, we ended the first quarter with $215 million of cash.
What went well
- Revenue surpassed $1.6 billion and grew 12.8%, driven by same-store sales up 7.1% (4.5% traffic growth and a 2.6% higher average check), with strong flow-through to the bottom line.
- Diluted earnings per share rose 9.6% to $1.87, restaurant margin dollars increased 10.5% to $264 million, and restaurant margin dollars per store week increased 4.5% to over $28,000.
- Labor leverage improved 46 basis points to 32.9% of sales and other operating costs were 36 basis points better at 14.0%, aided by a $0.6 million insurance credit, while to-go grew to 14.6% of weekly sales at more than $25,000.
- Texas Roadhouse was named America's best restaurant experience in the Datassential 500 Awards for the second consecutive year, generated $259 million of operating cash flow, ended the quarter with $215 million of cash, and reduced full-year 2026 commodity inflation guidance from approximately 7% to 6%-7%.
What went wrong
- Restaurant margin as a percentage of sales declined 36 basis points to 16.3% year-over-year.
- Food and beverage costs rose 122 basis points to 35.3% of sales on 6.2% commodity inflation, and management expected to run above the top end of its inflation range in the second quarter.
- G&A dollars increased 8.7% (with a low-double-digit percentage increase still forecast for the full year) and depreciation expense jumped 16.5% (with a low-teens percentage increase forecast for the year).
- Only four company restaurants opened in the quarter, leaving the year's roughly 35 planned openings weighted toward the back half.
More on Texas Roadhouse, Inc.
Reported 2026-05-07 · figures from the Texas Roadhouse, Inc. Q1 2026 earnings call.