Texas Roadhouse, Inc.
For the period ended Sep 29, 2026. Filed Nov 6, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 29, 2026 · Filed Nov 6, 2026
TXRH$183.88-4.1%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-06-30; filed 2026-08-07.
0001104659-26-092408
Item 2. — Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-09-29; filed 2026-11-06.
0001628280-26-071362
Item 2. Management’s Discussion And Analysis Of Financial Condition And Results Of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 85 previous paragraphs and 118 current paragraphs.
49 unchanged; 30 reworded; 36 added; 6 removed; 0 previous and 3 current paragraphs rearranged.
Tables are not compared: 30 previous and 10 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (36)
Current report
•737 company restaurants, of which 717 were wholly-owned and 20 were majority-owned. The results of operations of company restaurants are included in our unaudited condensed consolidated statements of income and comprehensive income. The portion of income attributable to noncontrolling interests in company restaurants that are majority-owned is reflected in the line item net income attributable to noncontrolling interests in our unaudited condensed consolidated statements of income and comprehensive income. Of the 737 company restaurants, we operated 664 as Texas Roadhouse restaurants, 61 as Bubba’s 33 restaurants, and 12 as Jaggers restaurants.
Current report
•103 franchise restaurants, of which 14 we have a 5.0% to 10.0% ownership interest. The income derived from our minority interests in these franchise restaurants is reported in the line item equity income from investments in unconsolidated affiliates in our unaudited condensed consolidated statements of income and comprehensive income. Of the 103 franchise restaurants, 31 were domestic Texas Roadhouse restaurants, six were domestic Jaggers restaurants, 65 were international Texas Roadhouse restaurants, including two restaurants in a U.S. territory, and one was an international Jaggers restaurant.
Current report
•Comparable Restaurant Sales. Comparable restaurant sales reflect the change in sales for all company restaurants across all concepts, unless otherwise noted, over the same period of the prior year for the comparable restaurant base. We define the comparable restaurant base to include those restaurants open for a full 18 months before the beginning of the period measured excluding restaurants permanently closed during the period, if applicable. Comparable restaurant sales can be impacted by changes in guest traffic counts or by changes in the per person average check amount. Menu price changes, the mix of menu items sold, and the mix of dine-in versus to-go sales can affect the per person average check amount.
Current report
•Average Unit Volume. Average unit volume represents the average quarterly, year-to-date, or annual restaurant sales for Texas Roadhouse and Bubba’s 33 restaurants open for a full six months before the beginning of the period measured excluding sales of restaurants permanently closed during the period, if applicable. Historically, average unit volume growth is less than comparable restaurant sales growth which indicates that newer restaurants are operating with sales growth levels lower than the company average. At times, average unit volume growth may be more than comparable restaurant sales growth which indicates that newer restaurants are operating with sales growth levels higher than the company average.
Current report
•Store Weeks and New Restaurant Openings. Store weeks represent the number of weeks that all company restaurants across all concepts, unless otherwise noted, were open during the reporting period. Store weeks include weeks in which a restaurant is temporarily closed. Store week growth is driven by new restaurant openings and franchise acquisitions. New restaurant openings reflect the number of restaurants opened during a particular fiscal period, excluding store relocations. We consider store openings that occur simultaneously with a store closure in the same trade area to be a relocation.
Current report
•Restaurant Margin. Restaurant margin (in dollars, as a percentage of restaurant and other sales, and per store week) represents restaurant and other sales less restaurant-level operating costs, including food and beverage costs, labor, rent, and other operating costs. Restaurant margin is not a measurement determined in accordance with GAAP and should not be considered in isolation, or as an alternative, to income from operations. This non-GAAP measure is not indicative of overall company performance and profitability in that this measure does not accrue directly to the benefit of shareholders due to the nature of the costs excluded. Restaurant margin is widely regarded as a useful metric by which to evaluate core restaurant-level operating efficiency and performance over various reporting periods on a consistent basis.
Current report
•Restaurant and Other Sales. Restaurant sales include gross food and beverage sales, net of promotions and discounts, for all company restaurants. Sales taxes collected from customers and remitted to governmental authorities are accounted for on a net basis and therefore are excluded from restaurant sales in our unaudited condensed consolidated statements of income and comprehensive income. Other sales primarily include the net impact of the amortization of third-party gift card fees and gift card breakage income and content revenue related to our tabletop kiosk devices.
Current report
•Royalties and Franchise Fees. Royalties consist of franchise royalties, as defined in our franchise agreement, paid to us by our domestic and international franchisees, as well as royalties related to our royalty-based retail products. Domestic and international franchisees also typically pay an initial franchise fee and/or development fee for each new restaurant or territory.
Current report
•Food and Beverage Costs. Food and beverage costs consist of the costs of raw materials and ingredients used in the preparation of food and beverage products sold in our company restaurants. Approximately half of our food and beverage costs relate to beef.
Current report
•Restaurant Labor Expenses. Restaurant labor expenses include all direct and indirect labor costs incurred in operations except for profit sharing incentive compensation expenses earned by our restaurant managing partners and market partners. These profit sharing expenses are reflected in restaurant other operating expenses. Restaurant labor expenses also include share-based compensation expense related to restaurant-level employees.
Current report
•Restaurant Rent Expense. Restaurant rent expense includes all rent, except pre-opening rent, associated with the leasing of real estate and includes base, percentage, and straight-line rent expense.
Current report
•Restaurant Other Operating Expenses. Restaurant other operating expenses consist of all other restaurant-level operating costs, the major components of which are supplies, utilities, profit sharing incentive compensation for our restaurant managing partners and market partners, credit card fees, general liability insurance, advertising, repairs and maintenance, property taxes, and outside services.
Current report
•Pre-opening Expenses. Pre-opening expenses, which are charged to operations as incurred, consist of expenses incurred before the opening of any new or relocated company restaurant and consist principally of opening and training team compensation and benefits, travel expenses, rent, food, beverage, and other initial supplies and expenses. The majority of pre-opening costs incurred relate to the hiring and training of employees due to the significant investment we make in training our people. Pre-opening costs vary by location and concept depending on a number of factors, including the size and physical layout of each location; the number of management and hourly employees required to operate each restaurant; the availability of qualified restaurant staff members; the cost of travel and lodging for different geographic areas; the timing of the restaurant opening; and the extent of unexpected delays, if any, in obtaining final licenses and permits to open each restaurant.
Current report
•Depreciation and Amortization Expenses. Depreciation and amortization expenses include the depreciation of property and equipment and amortization of intangibles with definite lives, substantially all of which relate to restaurant-level assets.
Current report
•Impairment and Closure Costs, Net. Impairment and closure costs, net include any impairment of long-lived assets, including property and equipment, operating lease right-of-use assets, intangible assets, and goodwill, and expenses associated with the relocation or closure of a restaurant. Closure costs also include any gains or losses associated with the sale of a closed restaurant and/or assets held for sale.
Current report
•Interest Income, Net. Interest income, net includes earnings on cash and cash equivalents and is reduced by interest expense, net of capitalized interest, on our debt or financing obligations including the amortization of loan fees, as applicable.
Current report
•Equity Income from Investments in Unconsolidated Affiliates. Equity income includes our percentage share of net income earned by unconsolidated affiliates and our share of any gain on the acquisition of these affiliates. As of September 29, 2026, and September 30, 2025, we owned a 5.0% to 10.0% equity interest in 14 and 17 domestic franchise restaurants, respectively.
Current report
•Net Income Attributable to Noncontrolling Interests. Net income attributable to noncontrolling interests represents the portion of income attributable to the other owners of our majority-owned restaurants. Our consolidated subsidiaries include 20 and 19 majority-owned restaurants as of September 29, 2026 and September 30, 2025, respectively.
Current report
($ In thousands, except restaurant margin $ per store week)
Current report
(1)Includes a U.S. territory.
Current report
(1)Average unit volume restaurants includes those open a full six to 18 months before the beginning of the period measured, excluding sales from restaurants permanently closed during the period, if applicable.
Current report
Royalties and franchise fees decreased $0.1 million or 0.8% in Q3 2026 compared to Q3 2025. The decrease was driven by a $0.5 million decrease in franchise royalties and fees primarily attributable to the acquisition of franchise stores, partially offset by a $0.4 million increase in royalties related to our royalty-based retail products.
Current report
Royalties and franchise fees decreased $1.9 million or 8.4% in 2026 YTD compared to 2025 YTD. The decrease was driven by a $2.2 million decrease in franchise royalties and fees primarily attributable to the acquisition of franchise stores, partially offset by a $0.3 million increase in sales related to our royalty-based retail products.
Current report
Food and beverage costs, as a percentage of restaurant and other sales, decreased to 35.5% in Q3 2026 compared to 35.8% in Q3 2025. The decrease was primarily driven by the impact of a higher average guest check (1.3%) partially offset by the impact of commodity inflation (0.7%) and the impact of menu shifts (0.3%). Commodity inflation was 2.0% in Q3 2026 primarily driven by higher beef costs.
Current report
Restaurant labor expenses, as a percentage of restaurant and other sales, increased to 33.7% in Q3 2026 compared to 33.6% in Q3 2025. The increase was driven by the impact of wage and other labor inflation (1.4%) partially offset by the impact of a higher average guest check (1.3%). Wage and other labor inflation was 4.1% in Q3 2026.
Current report
Restaurant labor expenses, as a percentage of restaurant and other sales, decreased to 33.0% in 2026 YTD compared to 33.3% in 2025 YTD. The decrease was driven by the impact of a higher average guest check (1.1%) and the impact of labor productivity (0.4%) partially offset by the impact of wage and other labor inflation (1.3%). Wage and other labor inflation was 3.9% in 2026 YTD.
Current report
Restaurant other operating expenses, as a percentage of restaurant and other sales, decreased to 14.6% in Q3 2026 compared to 14.7% in Q3 2025. The decrease was driven by the impact of higher average unit volumes (0.6%) partially offset by the impact of higher utilities expense, credit card charges, and supplies expense (0.5%).
Current report
Depreciation and amortization expenses were $60.3 million in Q3 2026 compared to $52.6 million in Q3 2025. The increase was primarily driven by $10.7 million of depreciation expense at our new stores and remodels and refurbishments at our existing stores partially offset by $4.2 million of lower depreciation at our existing stores.
Current report
Depreciation and amortization expenses were $175.5 million in 2026 YTD compared to $152.2 million in 2025 YTD. The increase was primarily driven by $32.9 million of depreciation expense at our new stores and remodels and refurbishments at our existing stores partially offset by $11.7 million of lower depreciation at our existing stores.
Current report
Impairment and closure costs, net were $3.6 million in Q3 2026 compared to $0.1 million in Q3 2025 and were $3.7 million in 2026 YTD compared to $0.3 million in 2025 YTD. The increases were driven by a $3.5 million impairment of long-lived assets at an underperforming Bubba's 33 restaurant recorded in Q3 2026.
Current report
General and administrative expenses, as a percentage of total revenue, were 3.8% in both Q3 2026 and Q3 2025. In Q3 2026, the impact of higher average unit volumes (0.2%) was partially offset by the impact of higher stock compensation expense (0.1%).
Current report
General and administrative expenses, as a percentage of total revenue, were 3.9% in both 2026 YTD and 2025 YTD. In 2026 YTD, the impact of higher average unit volumes (0.2%) was partially offset by the impact of higher stock compensation expense (0.1%).
Current report
Interest income, net was $0.8 million in Q3 2026 compared to $0.6 million in Q3 2025 and was $2.4 million in 2026 YTD compared to $3.0 million in 2025 YTD.
Current report
Interest income, net may fluctuate from quarter to quarter based on changes in our average cash balances, outstanding borrowings under our credit facility, prevailing market interest rates, andinterest expense subject to capitalization.
Current report
Restaurant margin, as a percentage of restaurant and other sales, increased to 14.8% in Q3 2026 from 14.4% in Q3 2025 primarily driven by lower food and beverage costs (0.3%). Restaurant margin, as a percentage of restaurant and other sales, decreased to 15.9% in 2026 YTD from 16.1% in 2025 YTD, driven by higher food and beverage costs (0.8%), partially offset by lower restaurant labor expenses (0.3%) and lower other operating expenses (0.3%).
Current report
Restaurant margin, as a percentage of restaurant and other sales, decreased to 12.4% in Q3 2026 from 13.3% in Q3 2025 driven by higher restaurant labor expenses (0.6%) and higher rent expense (0.3%). Restaurant margin, as a percentage of restaurant and other sales, decreased to 14.3% in 2026 YTD from 15.4% in 2025 YTD primarily driven by higher food and beverage costs (0.3%) and higher restaurant labor expenses (0.5%).
Removed paragraphs (6)
Previous report
Royalties and franchise fees decreased $1.0 million or 12.6% in Q2 2026 compared to Q2 2025 and decreased by $1.8 million or 12.0% in 2026 YTD compared to 2025 YTD. The decreases were primarily due to decreased royalties related to the franchise stores that were acquired.
Previous report
Restaurant labor expenses, as a percentage of restaurant and other sales, decreased to 32.5% in Q2 2026 compared to 32.9% in Q2 2025 and decreased to 32.7% in 2026 YTD compared to 33.1% in 2025 YTD. The decreases were primarily driven by the benefit of a higher average guest check and labor productivity partially offset by wage and other labor inflation of 3.9% in both Q2 2026 and 2026 YTD.
Previous report
Depreciation and amortization expenses, as a percentage of total revenue, increased to 3.5% in both Q2 2026 and 2026 YTD compared to 3.4% in both Q2 2025 and 2025 YTD. The increases were driven by higher depreciation expense at our newer restaurants and intangible asset amortization expense related to the acquisition of franchise restaurants partially offset by the increase in average unit volume.
Previous report
Impairment and closure costs, net were $0.2 million in both Q2 2026 and 2026 YTD, compared to $0.1 million in both Q2 2025 and 2025 YTD. Impairment and closure costs, net in all periods presented primarily included costs related to restaurant relocations.
Previous report
General and administrative expenses, as a percentage of total revenue, increased to 4.3% in Q2 2026 compared to 4.2% in Q2 2025 and was 4.0% in 2026 YTD and in 2025 YTD, respectively. In Q2 2026 and 2026 YTD compared to Q2 2025 and 2025 YTD, higher legal settlement expense and higher incentive and stock compensation expense was partially offset by lower rent expense due to the purchase of our Support Center in 2025 and the increase in average unit volume.
Previous report
Interest income, net was $1.0 million in both Q2 2026 and Q2 2025 and was $1.6 million in 2026 YTD compared to $2.3 million in 2025 YTD. The decrease in 2026 YTD compared to 2025 YTD was driven by decreased earnings on our cash and cash equivalents and borrowings on our credit facility.
Reworded paragraphs (30)
Previous wording
Texas Roadhouse, Inc. is a growing restaurant company operating predominantly in the casual dining segment. Our late founder, W. Kent Taylor, started the Company in 1993 with the opening of the first Texas Roadhouse restaurant in Clarksville, Indiana. Since then, we have grown to three concepts with 832 restaurants in 49 states, one U.S. territory, and ten foreign countries. As of June 30, 2026, our 832 restaurants included:
Current wording
Texas Roadhouse, Inc. is a growing restaurant company operating predominantly in the casual dining segment. Our late founder, W. Kent Taylor, started the Company in 1993 with the opening of the first Texas Roadhouse restaurant in Clarksville, Indiana. Since then, we have grown to three concepts with 840 restaurants in 49 states, one U.S. territory, and ten foreign countries. As of September 29, 2026, our 840 restaurants included:
Previous wording
Throughout this report, the 13 weeks ended June 30, 2026 and July 1, 2025, are referred to as Q2 2026 and Q2 2025, respectively. The 26 weeks ended June 30, 2026 and July 1, 2025, are referred to as 2026 YTD and 2025 YTD, respectively. Fiscal year 2026 will be 52 weeks in length, with the quarters 13 weeks in length. Fiscal year 2025 was 52 weeks in length, with the quarters 13 weeks in length.
Current wording
Throughout this report, the 13 weeks ended September 29, 2026 and September 30, 2025, are referred to as Q3 2026 and Q3 2025, respectively. The 39 weeks ended September 29, 2026 and September 30, 2025, are referred to as 2026 YTD and 2025 YTD, respectively. Fiscal year 2026 will be 52 weeks in length, with the quarters 13 weeks in length. Fiscal year 2025 was 52 weeks in length, with the quarters 13 weeks in length.
Previous wording
infrastructure to support future growth. This includes salary, incentive-based, and share-based compensation expense related to executive officers and Support Center employees, salary and share-based compensation expense related to regional and market partners, software hosting fees, professional fees, group insurance, and the realized and unrealized holding gains and losses related to the investments in our deferred compensation plan.
Current wording
•General and Administrative Expenses. General and administrative expenses comprise expenses associated with corporate and administrative functions that support development and restaurant operations and provide an infrastructure to support future growth. This includes salary, incentive-based, and share-based compensation expense related to executive officers and Support Center employees, salary and share-based compensation expense related to regional and market partners, software hosting fees, professional fees, group insurance, and the realized and unrealized holding gains and losses related to the investments in our deferred compensation plan.
Previous wording
Total revenue increased $167.9 million or 11.1% to $1,680.0 million in Q2 2026 compared to $1,512.1 million in Q2 2025 primarily due to increases in comparable restaurant sales and store weeks. Comparable restaurant sales and store weeks increased 6.2% and 5.0%, respectively, at company restaurants in Q2 2026 compared to Q2 2025. The increase in comparable restaurant sales was due to an increase in guest traffic along with an increase in per person average check. The increase in store weeks was due to new store openings and the acquisition of franchise restaurants.
Current wording
Total revenue increased $136.7 million or 9.5% to $1,573.1 million in Q3 2026 compared to $1,436.3 million in Q3 2025 primarily driven by increases in store weeks and comparable restaurant sales. Store weeks and comparable restaurant sales increased 5.1% and 4.3%, respectively, at company restaurants in Q3 2026 compared to Q3 2025. The increase in store weeks was driven by new store openings and the acquisition of franchise restaurants. The increase in comparable restaurant sales was primarily driven by an increase in per person average check.
Previous wording
Net income decreased $2.2 million or 1.7% to $121.9 million in Q2 2026 compared to $124.1 million in Q2 2025 as the increase in restaurant margin dollars, as described below, was more than offset by increases in pre-opening, depreciation and amortization, and general and administrative expenses. Diluted earnings per share decreased 0.7% to $1.85 in Q2 2026 from $1.86 in Q2 2025 due to the decrease in net income partially offset by the impact of share repurchases.
Current wording
Net income increased $6.2 million or 7.4% to $89.4 million in Q3 2026 compared to $83.2 million in Q3 2025 as the increase in restaurant margin dollars, as described below, was partially offset by increases in pre-opening, depreciation and amortization, impairment and closure, net, and general and administrative expenses. Diluted earnings per share increased 8.6% to $1.36 in Q3 2026 from $1.25 in Q3 2025 driven by the increase in net income and the impact of share repurchases.
Previous wording
Restaurant margin dollars increased $17.8 million or 6.9% to $275.1 million in Q2 2026 compared to $257.3 million in Q2 2025 primarily due to higher sales. Restaurant margin, as a percentage of restaurant and other sales, decreased to 16.4% in Q2 2026 compared to 17.1% in Q2 2025. The decrease in restaurant margin, as a percentage of restaurant and other sales, was primarily due to commodity inflation of 7.0% and wage and other labor inflation of 3.9% partially offset by higher sales.
Current wording
Restaurant margin dollars increased $24.4 million or 11.9% to $228.6 million in Q3 2026 compared to $204.3 million in Q3 2025 primarily due to higher sales. Restaurant margin, as a percentage of restaurant and other sales, increased to 14.6% in Q3 2026 compared to 14.3% in Q3 2025. The increase in restaurant margin, as a percentage of restaurant and other sales, was driven by higher sales partially offset by commodity inflation of 2.0% and wage and other labor inflation of 4.1%.
Previous wording
Cash provided by operating activities was $180.1 million and capital allocation spend included capital expenditures of $98.7 million, dividends of $49.3 million, and repurchases of common stock of $42.6 million.
Current wording
Cash provided by operating activities was $146.7 million and capital allocation spend included capital expenditures of $135.6 million, dividends of $49.2 million, and repurchases of common stock of $12.4 million.
Previous wording
Restaurant and other sales increased 11.2% in Q2 2026 compared to Q2 2025 and 12.1% in 2026 YTD compared to 2025 YTD. The following table summarizes certain key drivers and/or attributes of restaurant sales at company restaurants for the periods presented. Company restaurant count activity is shown in the restaurant unit activity table above.
Current wording
Restaurant and other sales increased 9.6% in Q3 2026 compared to Q3 2025 and 11.3% in 2026 YTD compared to 2025 YTD. The following table summarizes certain key drivers and/or attributes of restaurant sales at company restaurants for the periods presented. Company restaurant count activity is shown in the restaurant unit activity table above.
Previous wording
To-go sales as a percentage of restaurant sales were 14.3% in Q2 2026 compared to 13.3% in Q2 2025. To-go sales as a percentage of restaurant sales were 14.4% in 2026 YTD compared to 13.4% in 2025 YTD.
Current wording
To-go sales as a percentage of restaurant sales were 14.4% in Q3 2026 compared to 13.6% in Q3 2025. To-go sales as a percentage of restaurant sales were 14.4% in 2026 YTD compared to 13.5% in 2025 YTD.
Previous wording
Per person average check includes the benefit of a menu price increase of approximately 1.9% implemented in Q2 2026 and menu price increases of approximately 1.4% and 1.7% implemented in Q2 2025 and Q4 2025, respectively.
Current wording
Per person average check includes the benefit of a menu price increase of approximately 1.9% implemented in Q2 2026 and menu price increases of approximately 1.4% and 1.7% implemented in Q2 2025 and Q4 2025, respectively. In addition, we implemented a menu price increase of approximately 1.0% in Q4 2026.
Previous wording
In 2026 YTD, we opened nine Texas Roadhouse company restaurants, three Bubba’s 33 company restaurants, and one Jaggers company restaurant. In 2026, we expect store week growth of 5% to 6%, including the benefit from franchise acquisitions.
Current wording
In 2026 YTD, we opened 11 Texas Roadhouse company restaurants, five Bubba’s 33 company restaurants, and two Jaggers company restaurants. In 2026, we expect store week growth of 5.0% to 5.5%, including the benefit from franchise acquisitions. In 2027, we expect store week growth of 5.0% to 6.0% across all concepts.
Previous wording
Food and beverage costs, as a percentage of restaurant and other sales, increased to 35.4% in Q2 2026 compared to 34.0% in Q2 2025 and increased to 35.3% in 2026 YTD compared to 34.0% in 2025 YTD. The increases were primarily driven by commodity inflation of 7.0% in Q2 2026 and 6.6% in 2026 YTD, due to higher beef costs, partially offset by the benefit of a higher average guest check.
Current wording
Food and beverage costs, as a percentage of restaurant and other sales, increased to 35.4% in 2026 YTD compared to 34.6% in 2025 YTD. The increase was primarily driven by the impact of commodity inflation (1.7%) and the impact of menu shifts (0.3%) partially offset by the impact of a higher average guest check (1.2%). Commodity inflation was 5.0% in 2026 YTD primarily driven by higher beef costs.
Previous wording
In 2026, we expect commodity inflation of approximately 5%, with prices locked for approximately 60% of our remaining forecasted costs and the remainder subject to floating market prices.
Current wording
In 2026, we expect commodity inflation of approximately 5.0%, with prices locked for approximately 80% of our remaining forecasted costs and the remainder subject to floating market prices. In 2027, we expect commodity inflation of approximately 4.0%.
Previous wording
In 2026, we expect wage and other labor inflation of 3% to 4%.
Current wording
In 2026, we expect wage and other labor inflation of 3.5% to 4.0%. In 2027, we expect wage and other labor inflation of approximately 3.0%.
Previous wording
Restaurant rent expense, as a percentage of restaurant and other sales, was 1.5% for all periods presented. In Q2 2026 and 2026 YTD, higher rent expense at our newer restaurants was offset by the increase in average unit volume.
Current wording
Restaurant rent expense, as a percentage of restaurant and other sales, was 1.6% for all periods presented.
Previous wording
Restaurant other operating expenses, as a percentage of restaurant and other sales, decreased to 14.2% in Q2 2026 compared to 14.5% in Q2 2025 and decreased to 14.1% in 2026 YTD compared to 14.5% in 2025 YTD. The decreases were primarily driven by lower general liability insurance and incentive compensation expense, as well as the increase in average unit volume, partially offset by higher credit card fees and utilities expenses.
Current wording
Restaurant other operating expenses, as a percentage of restaurant and other sales, decreased to 14.2% in 2026 YTD compared to 14.5% in 2025 YTD. The decrease was driven by the impact of higher average unit volumes (0.8%) partially offset by the impact of higher utilities expense, credit card charges, and supplies expense (0.5%).
Previous wording
Pre-opening expenses were $8.5 million in Q2 2026 compared to $5.5 million in Q2 2025 and $15.1 million in 2026 YTD compared to $12.3 million in 2025 YTD. The increases were driven by an increase in our pipeline of new store openings. Pre-opening costs will fluctuate from quarter to quarter based on specific pre-opening costs incurred for each restaurant, the number and timing of restaurant openings, and the number and timing of restaurant managers hired.
Current wording
Pre-opening expenses were $9.6 million in Q3 2026 compared to $7.4 million in Q3 2025 and $24.8 million in 2026 YTD compared to $19.7 million in 2025 YTD. The increases were driven by an increase in our pipeline of new store openings.
Previous wording
Equity income was $0.2 million in Q2 2026 compared to $1.4 million Q2 2025 and was $0.3 million in 2026 YTD compared to $1.7 million in 2025 YTD. The decreases were driven by lapping a $1.2 million gain on the acquisition of three of the affiliates in Q2 2025 and fewer affiliates due to the acquisition of six of these affiliates in the prior year.
Current wording
Equity income was $0.2 million in Q3 2026 compared to $0.1 million Q3 2025 and was $0.5 million in 2026 YTD compared to $1.8 million in 2025 YTD. The decrease in 2026 YTD was driven by lapping a $1.2 million gain on the acquisition of three of the affiliates in 2025 YTD.
Previous wording
Our effective tax rate was 13.5% in Q2 2026 compared to 14.9% in Q2 2025 and was 13.9% in 2026 YTD compared to 14.8% in 2025 YTD. The decreases in the tax rates were driven primarily by an increase in the impact of the FICA tip tax credit partially offset by a decrease in the excess tax benefit on stock compensation and an increase in non-deductible officers’ compensation.
Current wording
Our effective tax rate was 13.5% in 2026 YTD compared to 14.4% in 2025 YTD. The decrease was driven by an increase in the impact of the FICA tip tax credit (2.0%) partially offset by a decrease in the impact of the excess tax benefit on stock compensation (0.5%) and an increase in the impact of non-deductible officers' compensation (0.4%).
Previous wording
In 2026, we expect an effective tax rate of approximately 14% based on forecasted operating results.
Current wording
In 2026, we expect an effective tax rate of approximately 13.0% based on forecasted operating results. In 2027, we expect an effective tax rate of approximately 13.0% based on forecasted operating results.
Previous wording
In our Texas Roadhouse reportable segment, restaurant margin dollars increased $17.0 million or 7.1% in Q2 2026 and increased $40.9 million or 8.8% in 2026 YTD. The increases were due to higher sales partially offset by higher food costs due to commodity inflation. In addition, restaurant margin, as a percentage of restaurant and other sales, decreased to 16.5% in Q2 2026 from 17.1% in Q2 2025 and decreased to 16.4% in 2026 YTD from 16.9% in 2025 YTD. Restaurant margin percentage was primarily impacted by commodity inflation partially offset by higher sales.
Current wording
In our Texas Roadhouse reportable segment, restaurant margin dollars increased $23.3 million or 12.2% in Q3 2026 and increased $64.2 million or 9.8% in 2026 YTD. The increases were due to higher sales partially offset by higher food costs due to commodity inflation.
Previous wording
In our Bubba’s 33 reportable segment, restaurant margin dollars increased $0.5 million or 3.2% in Q2 2026 and increased $1.7 million or 6.2% in 2026 YTD. The increases were due to higher sales partially offset by higher food costs and higher restaurant labor expenses. In addition, restaurant margin, as a percentage of restaurant and other sales, decreased to 15.3% in Q2 2026 from 16.7% in Q2 2025 and decreased to 15.2% in 2026 YTD from 16.4% in 2025 YTD. Restaurant margin percentage was primarily impacted by the increased expenses noted above, which were partially offset by higher sales.
Current wording
In our Bubba’s 33 reportable segment, restaurant margin dollars increased $0.9 million or 8.2% in Q3 2026 and increased $2.6 million or 6.8% in 2026 YTD. The increases were due to higher sales partially offset by higher food costs and higher restaurant labor expenses.
Previous wording
Net cash provided by operating activities was $439.2 million in 2026 YTD compared to $366.0 million in 2025 YTD. This increase was primarily due to increases in net income, depreciation and amortization expenses, deferred income taxes, and a favorable change in working capital.
Current wording
Net cash provided by operating activities was $585.9 million in 2026 YTD compared to $509.6 million in 2025 YTD. This increase was primarily due to increases in net income, depreciation and amortization expenses, deferred income taxes, and a favorable change in working capital.
Previous wording
Net cash used in investing activities was $242.0 million in 2026 YTD compared to $259.5 million in 2025 YTD. The decrease was primarily due to the acquisition of 17 franchise restaurants in 2025 YTD compared to five in 2026 YTD and an increase in proceeds from sale leaseback transactions partially offset by an increase in capital expenditures.
Current wording
Net cash used in investing activities was $375.1 million in 2026 YTD compared to $384.2 million in 2025 YTD. The decrease was primarily due to the acquisition of 17 franchise restaurants in 2025 YTD compared to five in 2026 YTD and an increase in proceeds from sale leaseback transactions partially offset by an increase in capital expenditures.
Previous wording
We intend to satisfy our capital requirements over the next 12 months with cash on hand, net cash provided by operating activities and, if needed, funds available under our revolving credit facility. In 2026, we expect capital expenditures of approximately $400 million.
Current wording
We intend to satisfy our capital requirements over the next 12 months with cash on hand, net cash provided by operating activities and, if needed, funds available under our revolving credit facility. In 2026, we expect capital expenditures of approximately $440 million. In 2027, we expect capital expenditures of approximately $425 million.
Previous wording
Net cash used in financing activities was $129.5 million in 2026 YTD compared to $174.9 million in 2025 YTD. The decrease was primarily due to net borrowings of $50.0 million on our credit facility and a decrease in indirect repurchases of shares for minimum tax withholdings related to our stock compensation program partially offset by an increase in share repurchases and an increase in quarterly dividend payments.
Current wording
Net cash used in financing activities was $204.1 million in 2026 YTD compared to $262.5 million in 2025 YTD. The decrease was primarily due to net borrowings of $50.0 million on our credit facility and a decrease in share repurchases partially offset by an increase in quarterly dividend payments.
Previous wording
On February 18, 2026, our Board approved the payment of a quarterly cash dividend of $0.75 per share of common stock compared to the quarterly dividend of $0.68 per share of common stock declared in 2025. The payment of quarterly dividends totaled $98.7 million and $90.3 million in 2026 YTD and 2025 YTD, respectively.
Current wording
On February 18, 2026, our Board approved the payment of a quarterly cash dividend of $0.75 per share of common stock compared to the quarterly dividend of $0.68 per share of common stock declared in 2025. The payment of quarterly dividends totaled $147.9 million and $135.4 million in 2026 YTD and 2025 YTD, respectively.
Previous wording
During 2026 YTD, we paid $70.8 million, excluding excise taxes, to repurchase 415,133 shares of our common stock. During 2025 YTD, we paid $60.0 million, excluding excise taxes, to repurchase 342,789 shares of our common stock. As of June 30, 2026, $309.2 million remained under our authorized stock repurchase program.
Current wording
During 2026 YTD, we paid $83.1 million, excluding excise taxes, to repurchase 478,052 shares of our common stock. During 2025 YTD, we paid $100.0 million, excluding excise taxes, to repurchase 573,329 shares of our common stock. As of September 29, 2026, $296.8 million remained under our authorized stock repurchase program.
Previous wording
The interest rate on the credit facility as of June 30, 2026 and July 1, 2025 was 4.74% and 5.42%, respectively.
Current wording
The interest rate on the credit facility as of September 29, 2026 and September 30, 2025 was 4.79% and 5.34%, respectively.
Previous wording
As of June 30, 2026 and December 30, 2025, we were contingently liable for $7.5 million and $7.8 million, respectively, for five lease guarantees. These amounts represent the maximum potential liability of future payments under the guarantees. In the event of default, the indemnity and default clauses in our assignment agreements govern our ability to pursue and recover damages incurred. No material liabilities have been recorded as of June 30, 2026 and December 30, 2025 as the likelihood of default was deemed to be less than probable and the fair value of the guarantees is not considered significant.
Current wording
As of September 29, 2026, we were contingently liable for $18.5 million for five lease guarantees and a debt repayment guarantee provided on behalf of a franchise partner. As of December 30, 2025, we were contingently liable for $7.8 million for five lease guarantees. These amounts represent our maximum potential future payment obligations under the guarantees. In the event of default, the indemnification and default provisions in the applicable agreements govern our rights to pursue recovery of any amounts paid or damages incurred. No liability has been recorded as of September 29, 2026 or December 30, 2025, as payment under the guarantees is not considered probable and the fair value of the guarantees is not significant.
Rearranged current paragraphs (3)
Current report — wording carried from elsewhere
Reconciliation of Income from Operations to Restaurant Margin
Current report — wording carried from elsewhere
Pre-opening costs may fluctuate from quarter to quarter based on specific pre-opening costs incurred for each restaurant, the number and timing of restaurant openings, and the number and timing of restaurant managers hired.
Current report — wording carried from elsewhere
Our effective tax rate was 12.2% in Q3 2026 compared to 13.1% in Q3 2025. The decrease was driven by an increase in the impact of the FICA tip tax credit (1.3%) partially offset by an increase in the impact of non-deductible officers' compensation (0.5%).