Does Texas Roadhouse's (TXRH) Resilient Sales Guidance Offset Commodity Pressure and Capital Return Moves?

• Texas Roadhouse recently reported third quarter 2025 earnings, delivered updated guidance for 2026, approved a quarterly cash dividend of US$0.68 per share, and completed a US$70 million share buyback under its February program.
• Despite continued pressure from rising beef and commodity costs, the company expects ongoing positive comparable sales growth, partially supported by recent and upcoming menu pricing actions.
• With updated guidance highlighting anticipated sales growth amid input cost challenges, we'll explore how this shapes Texas Roadhouse's investment outlook.

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Texas Roadhouse Investment Narrative Recap

To be a Texas Roadhouse shareholder right now, you need confidence in the company's ability to keep growing sales even as beef and commodity costs remain high, a challenge that continues to pressure restaurant margins. The recent earnings and guidance updates do not materially alter the short-term outlook: margin pressure from beef inflation is still the most important risk, while ongoing strong comparable sales, bolstered by pricing actions, remain the main catalyst.

Of the recent announcements, the reiteration of positive comparable restaurant sales growth for both 2025 and 2026 is most relevant. This forecast underscores management's view that menu pricing and customer demand can offset some impact from stubborn input cost inflation, providing near-term visibility on a key catalyst as cost pressures persist.

By contrast, investors should still watch for sustained input cost increases and what could happen if menu price hikes start to affect guest traffic...

Read the full narrative on Texas Roadhouse (it's free!)

Texas Roadhouse's outlook anticipates $7.4 billion in revenue and $594.2 million in earnings by 2028. This scenario relies on 9.1% annual revenue growth and a $156.2 million increase in earnings from $438.0 million today.

Uncover how Texas Roadhouse's forecasts yield a $196.16 fair value, a 17% upside to its current price.

Exploring Other Perspectives

Fair value estimates from seven Simply Wall St Community members for Texas Roadhouse range from US$149.17 to US$218.21, hinting at wide differences in outlook. With beef inflation and input costs still weighing heavily on margins, your view on future profitability could significantly influence your stance, explore these perspectives to see how they compare to your own.

Explore 7 other fair value estimates on Texas Roadhouse - why the stock might be worth as much as 30% more than the current price!

Build Your Own Texas Roadhouse Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Texas Roadhouse research is our analysis highlighting 3 key rewards and 2 important warning signs that could impact your investment decision.
• Our free Texas Roadhouse research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Texas Roadhouse's overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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