One of the most common pieces of feedback Texas Roadhouse receives is to turn its music down. But CEO Jerry Morgan, who has been with the company since 1997, starting as a managing partner for the first Texas location, knows the difference between a complaint and a brand identifier when he sees it. A vocal minority can often tell you a lot about the business.
And Texas Roadhouse understands one of the key reasons it’s outperforming during a challenging consumer climate owes to identity.
The brand on Thursday, during its Q3 earnings, was asked if it’s taking share from diners trading out of quick service amid steady price hikes or welcoming guests weary of grocery bills who realize they can pay a similar amount for a steak cooked at Texas Roadhouse.
Morgan answered the brand doesn’t measure performance that way. It’s trading not in competitive share necessarily, but in reputation.
“And be the talk of the town to some degree,” he said. “That’s what really drives the excitement around. When you drive into a Texas Roadhouse and the parking lot and the energy is going on, and the lights are so bright, I mean, that is our attraction.”
“And if you drive to another business and maybe they don’t have the same activity,” he added. “But I think we’re drawing from everyone, whether it be a higher-end steakhouse, whether it be QSR. We got quality made-from-scratch food. We cut our own steaks, and we’ve got this energy and this vibe in our restaurants.”
Morgan noted, with so much talk of late around how customers are pulling back, the guest keeps giving Texas Roadhouse a straightforward directive—don’t change. They appreciate the buzz, hospitality, efforts around food quality, and how it’s developed community ties over the decades. It’s “something to be really proud of,” Morgan said. “And we work really hard to deliver a great experience for our employees and for our guests.”
Texas Roadhouse in Q3 posted same-store sales growth of 6.1 percent at company units, good for a two-year stack of 14.6 percent. Traffic rose 4.3 percent and check lifted 1.8 percent. By month, comps were up 5, 7, and 6.1 percent in July, August, and September, respectively. And same-store sales for the first five weeks of Q4 rose 5.4 percent.
Average weekly sales in Q3 came in at $157,325, of which $21,409 flowed from to-go (no delivery at Texas Roadhouse). That compared year-over-year to $149,176 and $18,914, respectively.
Restaurant margin dollars lifted 1.1 percent to $204.3 million. Restaurant margins decreased 168 basis points to 14.3 percent thanks to commodity inflation of 7.9 percent and wage and other labor inflation of 3.9 percent as the brand continues to grapple with volatile beef prices. The brand set its initial 2026 commodity inflation guidance at about 7 percent. Head of investor relations Michael Bailen noted Texas Roadhouse considers the cattle cycle to be a cyclical issue and one the company needs to manage through.
Q3 marked Texas Roadhouse’s highest quarterly growth of the year so far in revenue (up 12.8 percent), same-store sales, and traffic. The company also opened seven corporate stores, including two Bubba’s 33 units, and one of the fast casual Jaggers. It remains on track to debut about 30 restaurants across the three brands in 2025 and expects to hike the number to 35 (20 Texas Roadhouses, 10 Bubba’s, and five Jaggers) next year. Ten franchises should open as well, including six international Texas Roadhouses and four domestic Jaggers. The company is earmarking about $400 million for 2026 CapEx—a number that includes the tag of acquiring five California franchised restaurants at the start of the year.
Average weekly sales at Bubba’s were about $119,000 in the quarter and more than $75,000 at Jaggers.
Returning to what’s driving Texas Roadhouse’s top-line, Morgan said you can see the brand being rewarded in how guests interact with it. They continue to favor steaks in larger-sized entrees. And Texas Roadhouse hasn’t seen any noticeable change in guest behavior since taking a modest 1.7 menu price increase at the start of Q4.
Customers are also responding to a fresh extension for Texas Roadhouse. The brand in the past couple of years worked to expand beverage offerings. In addition to mocktails and a $5 all-day, everyday lineup of specials (10-ounce margaritas, pints of beer), Texas Roadhouse implemented a regional approach where stores respond to ground-level trends.
For instance, it started testing dirty sodas in Utah and Idaho. The former market being home to category-pioneer Swig.
“I think people want a good beverage,” Morgan said. “Maybe not as much the beer and margarita anymore, but they want to have a quality beverage option. And so, whether it be liquor, beer, and wine, whether it be soft or iced teas and sodas or mocktail or a dirty soda. And I think we’re learning that the better the offering, the more options the guests and the consumer have, the better it is for us.”
Texas Roadhouse’s approach to value isn’t in need of a refresh to match today’s heightened climate. It’s always boasted a structure where somebody can flex up and spend money to indulge, or access value if they’re looking for it. It isn’t hard to find or some fleeting deal Texas Roadhouse needs to drive news around.
There are early dine options and smaller choices, like country dinners, 6-ounce sirloins, and menu staples that have been a feature since the outset. “And I do believe that is what allows our menu to be very favorable for all consumers,” Morgan said.
Texas Roadhouse offers four cuts of sirloin—guests can pick 6 ounces, as noted, or 8, 11, and 16. “You have options on how much you want to spend and how much you want to eat,” Morgan continued. “And I really do believe that that’s always been our philosophy, and it’s really served us extremely well.”
Bailen was also asked if there’s been a correlation between lofty grocery prices for beef and customers coming into Texas Roadhouse. He said, certainly, there’s been signs in 2025 of diners showing up and ordering steak more often than previous years. “So, I think, they are recognizing the value of our steak offerings relative to what they can do at home,” he said. “And as a company that prepares a tremendous steak, I think that creates loyal guests for us for years to come.”
Bailen added Texas Roadhouse doesn’t spend a lot of time separating traffic by income or consumers by cohorts, as has been the headline among some fast-food giants this earnings cycle. When he looks at regions or days of the week, results are strong throughout. The same rings true of dayparts and dine-in versus to-go. “We’re very happy with what we’re seeing from the consumer and believe that just goes to the value that we offer and the overall experience that we’re offering,” Bailen said. “And the guest still is enjoying what they’re getting from us.”
Texas Roadhouse recently completed its fall tour where management listens to store partners around the country. This is where it plots innovation and figures pricing strategies. The ethos at Texas Roadhouse roots in this model where operators take a stake in their business ($25,000 investment for 10 percent of their store’s net profit, plus base salary), and, in turn, are invested in growing profit since doing so also boosts their paycheck.
As Morgan, who has been on both sides of the table, has said over the years, it leads to candid and productive conversations about doing what’s best for Texas Roadhouse. “If you’re running a healthy business and you’re executing at a high level and you’re growing your sales and your profits and your people, then you’re going to get compensated for that,” he said. “And I think that’s been a great philosophy for us. … there are ups and downs in business, and that is part of partnership. We’re not going to be able to fix everything for you every time, but we will work with you to help you grow that side of the business.”
Morgan said Texas Roadhouse plans to remain conservative on pricing and take its next action in early April. It will consider competitive activity and then keep to an ongoing approach of asking operators and responding. Within the 5.4 percent same-store sales growth in Q4 to date, traffic ran a bit over 3 percent and pricing 2.5 percent. Halloween shifting to a Friday created some soft response, too. Largely, though, restaurant margin dollars are about 35 percent higher than they were in 2019, Bailen said, showcasing the long-term strength of Texas Roadhouse’s blueprint.
“I think we have really candid conversations about what’s going on in their local community, what’s going on in their state, whether it be labor or continued commodity and utilities and all the other factors that come into running a profitable business and then make those decisions based off of that,” Morgan said of pricing. “And sometimes it is about a store or a market or a state, but overall for the company, it’s what we feel comfortable with.”
He added Texas Roadhouse won’t be able to price for every beef inflation. It’s going to protect the value side of its business, menu, and wider perception.
Morgan also spoke a bit on the call about Texas Roadhouse’s mounting retail arm. Over the past few years, it’s introduced rolls, buttery spreads, steak sauces, and dips to outlets across the country. Between those and gift cards, Morgan said, more than 120,000 stores nationwide today have Texas Roadhouse’s logo somewhere on display. It’s keeping the brand and its apex, in-store experience, top of mind to loyal and curious customers alike.
And regarding technology, roughly 95 percent of stores have been updated to Texas Roadhouse’s digital kitchen (KDS) and improved guest management system. Both are expected to complete rollout by year’s end.
Morgan said the initiatives, including pay-at-the-table where people can check out on their own terms, gives Texas Roadhouse more information to “make great decisions.” It still sees the guest experience at about 54 minutes. That’s a sweet spot, he said, where somebody feels important and not rushed, and yet Texas Roadhouse can hustle.
“All of technology, if it enhances the guest experience, then we’re all about it,” Morgan said. “And if we learn things once the whole system is on it, then we will share that with our operators and make some decisions on how do we increase speed of service, if needed.”
Future inflation and consumer activity considered, Morgan said, Texas Roadhouse’s 2026 playbook will feel familiar. It’s going to maintain focus on the top-line through guest traffic growth and the expansion of its restaurant base. “We’ll remain an industry leader in offering high-level hospitality and everyday value to our guests,” he said.
