Texas Roadhouse Reports Record Sales But Faces Margin Pressure From Rising Beef Costs
Despite reporting record sales and strong comparable restaurant growth in its second quarter, Texas Roadhouse (NASDAQ: TXRH) has seen a nearly 19% drop in share price since releasing its August 6 earnings report. The decline is attributed to rising beef costs that have squeezed profit margins, even as the company lowered its full-year commodity inflation forecast and maintained strong customer traffic. Texas Roadhouse achieved an all-time high average weekly sales of $177,252 per restaurant in Q2, with revenue reaching $1.68 billion—surpassing analyst expectations. Comparable sales rose 6.2%, driven largely by increased foot traffic rather than price hikes. However, earnings per share came to $1.85, slightly below the prior year and impacted by rising food costs. Analysts maintain a Moderate Buy rating for Texas Roadhouse with an average price target of $209, suggesting about 25% upside despite ongoing risks from commodity inflation and high valuations.
Tickers: $TXRH
Topics: beef costs consumer spending restaurant industry stock performance