Texas Roadhouse Earnings (TXRH) on Deck – What To Expect

Texas Roadhouse reports fiscal Q4 2025 results on February 19 after market close, with the quarter determining whether restaurant-level margin pressure from beef inflation has stabilized following the 14.3% margin reported in Q3 2025.

Consensus sits at $1.28 EPS and $1.43B revenue, representing modest growth, but estimate revisions have turned negative with a 50% historical beat rate that signals limited execution cushion heading into this critical print.

The setup creates asymmetric risk. Management’s Q3 commentary pointed to persistent beef inflation extending into 2026 at approximately 7% while wage and labor inflation ran at 3.9%. The ability to offset those pressures through menu pricing without breaking traffic momentum will determine whether the stock sustains its 28.5x P/E multiple, a premium to casual dining peers that reflects historical execution but now faces margin-trajectory scrutiny.

The quarter also tests whether Texas Roadhouse can maintain traffic resilience as the consumer environment softens. Recent analyst downgrades from Citi and Truist cited traffic deceleration and extended beef inflation through 2027 as catalysts for estimate cuts. A beat on EPS alone will not suffice if management signals continued margin pressure or guides conservatively for fiscal 2026.

Consensus Estimates

The consensus range spans 23 cents on EPS, reflecting uncertainty around how beef inflation flows through to the bottom line. The $1.28 midpoint represents minimal growth from the prior-year $1.26, a deceleration from the double-digit revenue expansion. Estimate momentum has turned negative with a one-cent downward revision over the past 30 days, consistent with recent analyst cuts citing persistent beef inflation.

Management Guidance & Commentary

“Restaurant margin as a percentage of restaurant and other sales was 14.3%, a decrease from 16.3% in the prior year quarter, primarily due to commodity inflation of 7.9% and wage and labor inflation of 3.9%.”

Management’s Q3 2025 commentary established the margin framework for Q4 expectations. The 200-basis-point year-over-year margin contraction to 14.3% quantified the beef inflation impact, with commodity inflation running at 7.9% and wage/labor inflation at 3.9%. The company also outlined fiscal 2026 commodity inflation expectations near 7%, signaling no near-term relief from beef costs.

“Successful digital integration enhancements to the mobile app, improved waitlist/to-go experience, and broad rollout of digital kitchen technology are boosting operational efficiency and guest convenience.”

The digital technology narrative provides a potential offset to cost pressures. Management has emphasized mobile app improvements and digital kitchen rollout as drivers of operational efficiency, which could support margin recovery if execution gains materialize.

Analyst Price Targets & Ratings

Wall Street maintains a constructive view with 78% of analysts rating shares Buy or Strong Buy. The consensus target of $196.85 implies modest 5.3% upside, though recent downgrades from Citi and Truist have tempered enthusiasm around margin trajectory.

Sector & Peer Comparison

Texas Roadhouse trades at a 57% premium to Darden’s 18.2x P/E and more than double Brinker’s 14.5x multiple, reflecting historical execution consistency and unit growth visibility. However, the premium has compressed from earlier levels as beef inflation pressures have emerged across the sector.

Earnings Track Record

The 50% beat rate over the last 20 quarters establishes execution consistency, but the recent pattern reveals deterioration. Texas Roadhouse has missed EPS estimates in three consecutive quarters through Q3 2025, with surprises ranging from -2.6% to -3.8%. The miss pattern correlates with beef inflation acceleration.

Post-Earnings Price Movement History

The muted average next-day move of +0.2% masks significant variability in recent quarters. The Q3 2025 miss triggered a -2.4% decline, the largest negative reaction in the recent sample, while the Q2 2025 miss saw shares rise +0.8% as investors looked through the EPS shortfall to solid revenue growth.

Expected Move & Implied Volatility

The options market implies a ±4.2% move, significantly above the +0.2% historical average next-day reaction. The elevated implied move reflects uncertainty around whether beef inflation has peaked and what management will signal for fiscal 2026 margins.

Expert Predictions & What to Watch

Key Outlook: Guidance Will Drive the Trade

The setup favors caution. Texas Roadhouse has missed EPS estimates in three consecutive quarters as beef inflation outpaced menu pricing, and estimate revisions have turned negative. Even if the company meets expectations, the valuation premium to peers requires evidence that digital technology investments are driving margin improvement.

Key Metrics to Watch

The margin metric carries the most weight. If Texas Roadhouse reports restaurant-level margins at or above 15%, the market will interpret that as evidence that beef inflation has peaked and operational improvements are gaining traction. Conversely, margins below 14% would signal extended pressure and likely trigger estimate cuts.

Management’s fiscal 2026 guidance will determine the stock’s trajectory beyond the immediate reaction. If the company signals commodity inflation moderating or articulates specific digital technology ROI that offsets 7% inflation, the valuation premium can hold. Conservative guidance would likely compress the stock toward peer multiples.