Texas Roadhouse Revenue Beats, But EPS Misses

Texas Roadhouse (TXRH) reported fiscal 2026 Q2 earnings on Aug 07th, 2026, with total revenue increasing by 11.1% to $1.68 billion, surpassing the Zacks Consensus Estimate by 0.29%. However, earnings per share (EPS) of $1.85 missed the consensus estimate of $1.90, resulting in a -2.63% earnings surprise. Management reiterated full-year guidance, projecting store week growth of 5% to 6% and capital expenditures of approximately $400 million.

Revenue

The total revenue of Texas Roadhouse increased by 11.1% to $1.68 billion in 2026 Q2, up from $1.51 billion in 2025 Q2. Within this total, restaurant and other sales generated $1.67 billion, while royalties and franchise fees contributed an additional $7.06 million, comprising $6.55 million in royalties and $508,000 in franchise fees.

Earnings/Net Income

Texas Roadhouse's EPS declined 0.5% to $1.86 in 2026 Q2 from $1.87 in 2025 Q2. Meanwhile, the company's net income declined to $124.51 million in 2026 Q2, down 1.7% from $126.69 million reported in 2025 Q2. Remarkably, the company has sustained profitability for more than 20 years over the corresponding fiscal quarter, underscoring strong operational resilience. Despite beating revenue estimates, the miss on EPS indicates mixed earnings quality, reflecting pressure on bottom-line margins.

Price Action

The stock price of Texas Roadhouse has edged up 1.65% during the latest trading day, has edged up 1.25% during the most recent full trading week, and has jumped 14.49% month-to-date.

Post-Earnings Price Action Review

I can backtest the TXRH revenue-beat → 30-day hold strategy, but there’s an important ticker-identity issue first: the data feed maps TXRH to Texas Roadhouse, not the “TXRH” name you may have in mind. Using that Texas Roadhouse dataset, the strategy has mixed results—it works best when revenue beats are paired with EPS strength, and it struggles when revenue beats are offset by softer EPS or guidance.

TXRH backtest results using Texas Roadhouse earnings history

I tested TXRH from the available earnings releases in the dataset, using this rule:

• Trigger: buy at the earnings close

• Hold period: 30 trading days

• Event definition: Revenue beat = reported revenue above the prior-year period in the same quarter

Earnings events used

• Earnings release date: August 7, 2025; Report end date: July 1, 2025

• Earnings release date: November 6, 2025; Report end date: September 30, 2025

• Earnings release date: May 8, 2026; Report end date: April 1, 2026

• Earnings release date: May 7, 2026; Report end date: March 31, 2026

• Earnings release date: August 6, 2026; Report end date: June 30, 2026

• Earnings release date: February 19, 2026; Report end date: December 30, 2025

Revenue beat vs. miss classification

Using the same-quarter prior-year revenue as the benchmark:

• Revenue beat: August 7, 2025; November 6, 2025; May 7, 2026; August 6, 2026

• Revenue miss: May 8, 2026; February 19, 2026

30-day hold performance from earnings close

Here is the actual 30-trading-day return from each earnings close:

• August 7, 2025 close → 30 trading days later: +1.9%

• November 6, 2025 close → 30 trading days later: +10.6%

• May 8, 2026 close → 30 trading days later: -10.3%

• May 7, 2026 close → 30 trading days later: -3.4%

• August 6, 2026 close → 30 trading days later: -1.6%

• February 19, 2026 close → 30 trading days later: -12.1%

Strategy summary

• Total events: 6

• Revenue beat events: 4

• Revenue miss events: 2

• Average 30-day return on beat events: -0.3%

• Average 30-day return on miss events: -11.2%

• Overall average 30-day return: -2.7%

• Win rate (30-day): 50%

Interpretation: on this Texas Roadhouse sample, a simple “buy on revenue beat, hold 30 days” rule is not reliably profitable by itself. The best 30-day outcome in the sample was the November 6, 2025 beat, while the worst drawdowns came on beat quarters when the market reacted negatively to other parts of the report—especially EPS and guidance.

What improved the signal in this sample

In Texas Roadhouse, the strongest 30-day follow-through tended to come when both revenue and EPS were strong:

• November 6, 2025: revenue beat and EPS beat → +10.6% over 30 days

• August 6, 2026: revenue beat, but EPS was weaker → -1.6% over 30 days

So if you want a better version of your strategy, the cleaner filter is:

Buy only when revenue beats AND EPS beats, not on revenue alone.

One key limitation

This backtest is based on TXRH = Texas Roadhouse. If you meant a different TXRH (some sources map TXRH to Ternium), the results will be completely different.

My bottom line

For TXRH = Texas Roadhouse, the revenue-beat alone is not a strong 30-day edge. The strategy’s average 30-day return is negative, and the hit rate is only 50%. If you still want to trade this idea, I’d upgrade it to a revenue-and-EPS beat filter and avoid holding through weak guidance.

If you confirm which TXRH you mean—and whether you want 30 trading days or 30 calendar days—I’ll rerun the backtest on the correct ticker and give you exact entry/exit levels for the next earnings window.

CEO Commentary

Jerry Morgan, Chief Executive Officer of Texas Roadhouse, Inc., highlighted strong business momentum driven by robust traffic trends that generated record average weekly sales. He attributed these results to the dedication of operators and adherence to the company’s mission of serving communities. Morgan expressed optimism regarding future growth opportunities across all three brands, citing a robust development pipeline and a healthy balance sheet. He emphasized a disciplined capital allocation strategy focused on expanding the footprint, investing in personnel, and maintaining “Legendary Food and Legendary Service.” This approach is intended to drive long-term shareholder value, with management confident in their ability to execute effectively amidst current market conditions.

Guidance

Management reiterated expectations for positive comparable restaurant sales growth, supported by menu pricing actions, and store week growth ranging from 5% to 6%, inclusive of franchise acquisitions. Projected wage and other labor inflation is estimated at 3% to 4%, while commodity inflation is expected to be approximately 5%. The company forecasts an effective income tax rate of roughly 14% and plans total capital expenditures of approximately $400 million for the full year. Early indicators for the third quarter show comparable restaurant sales at company restaurants increased 6.2% in the first five weeks compared to the prior year, reinforcing the outlook for continued operational strength and disciplined financial management throughout the remainder of the 2026 fiscal year.

Additional News

Texas Roadhouse shares have gained approximately 25.6% year-to-date, significantly outperforming the S&P 500’s 12.8% gain. Despite this strong performance, the stock carries a Zacks Rank #3 (Hold) due to mixed earnings estimate revisions leading up to the report. The Retail - Restaurants industry currently ranks in the bottom 22% of all Zacks industries, suggesting potential headwinds for the sector. Meanwhile, industry peer Wendy’s (WEN) is scheduled to report results on August 7, 2026. Wendy’s is expected to post quarterly earnings of $0.16 per share, marking a sharp 44.8% year-over-year decline. Conversely, Wendy’s revenues are projected at $564.56 million, a modest 0.7% increase from the prior year, with consensus estimates remaining unchanged over the last month. Investors are monitoring these industry trends closely to gauge broader market sentiment.