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Fri, May 9, 2025, 9:48 AM 3 min read
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Texas Roadhouse delivered solid comparable-sales growth in the first quarter, and said traffic accelerated into Q2.
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The company is facing rising costs, in part from the impact of tariffs.
Shares of Texas Roadhouse (NASDAQ: TXRH) were moving higher today after the fast-casual restaurant chain delivered solid results in its first-quarter earnings report.
As of 11:56 a.m. ET, the stock was up 5% on the news.
The steakhouse chain, which has long been an outperformer on the stock market, said that comparable sales in the quarter were up 3.5%, driving overall revenue up 9.6% to $1.45 billion, which was slightly ahead of estimates at $1.44 billion.
Restaurant-level margin fell 77 basis points to 16.6% due to inflation in food and wages, and earnings per share rose from $1.69 to $1.70, which was below estimates at $1.76.
Despite the weaker-than-expected profit, the company reported positive traffic trends, with visits accelerating in March and the first five weeks of the second quarter. That was particularly encouraging at a time when a number of chains were complaining about declining traffic due to the weakening macroeconomic climate.
CEO Jerry Morgan said, "We are pleased to report that our operators successfully navigated us through a number of challenges this quarter and once again delivered traffic growth across all three of our brands."
Looking ahead, the company said comparable sales for the first five weeks of the second quarter were up 5%, which included a menu price increase of 1.4%.
It also said it expected commodity cost inflation of 4%, including the estimated impact of tariffs, and reiterated positive comps for 2025, including higher prices.
In a difficult environment for restaurants, that proved to be enough to push Texas Roadhouse stock higher.
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