Even the typically high-flying Texas Roadhouse has not been immune to some of the forces bothering the restaurant industry to start 2025.
Through the first seven weeks of the new year, the steakhouse chain’s same-store sales were up 2.9% year over year. For many brands, that number would be cause for celebration. But it’s unusually low for Texas Roadhouse, which has not seen quarterly same-store sales dip below 7% since 2020.
And it came with little warning. In the last quarter of 2024, the chain’s same-store sales rose 7.7%, including 7.9% in December, and they were up 8.5% for the year.
Executives largely blamed the slow start on cold and snowy weather, which was bad enough to force some locations to close in January. They noted that winter storms have been more widespread than in recent years. And they also said illnesses such as COVID and the flu have taken a toll on some communities.
“It's been across the country, and there certainly have been some areas of the country hit harder than others,” President Chris Monroe said during an earnings call Thursday afternoon. “When we talked about other external factors, those are just a few that we're seeing.”
The chain finished January with same-store sales growth of 5.5%, but same-store sales have been flat through the first three weeks of February. Valentine’s Day was strong, but the shift of the holiday to Friday from Wednesday last year had a 2% negative impact on sales, Monroe said.
Still, executives said restaurants are operating well and that they remain confident in the chain’s underlying performance, which has been among the best in the business for years.
“I don't believe any of this is a slowdown in the guests’ or consumers’ desire to come to Texas Roadhouse,” said Michael Bailen, senior director of investor relations. “I just believe we're in a little bit of an environment right now where the consumer is just acting a little bit differently, and I think you're hearing that from others as well.”
Indeed, many restaurant chains have complained of sluggish demand to start the year, particularly among lower-income consumers as inflation ticks up. Severe weather, from wildfires in California to freezing temperatures across much of the country, has also played a role. And there have been calendar shifts, such as Valentine’s Day on a Friday and New Year’s Day landing mid-week.
“So you just kind of put it all together, and we're conservatively estimating at least a 1.5% negative impact to the reported seven-week sales growth from calendar shifts and store closures,” Monroe said. “And that's without including any general impact from the cold weather.”
Notably, the chain reiterated its forecast of positive same-store sales growth for the year.
“We feel really good about the core business … and we've seen an excellent performance in spite of the obstacles over the last few weeks,” Monroe said.
In other Texas Roadhouse news:
The company expects to open about 30 company-owned restaurants this year across its three brands: Texas Roadhouse, Bubba’s 33 and Jaggers. That would bring its total footprint to 814 locations.
Texas Roadhouse plans to raise prices by 1.4% in the second quarter, which it believes will allow it to maintain its “everyday value” proposition while also increasing sales.
After seeing demand for alcoholic beverages slip, Texas Roadhouse and Bubba’s 33 rolled out a line of mocktails. Early trends have been positive, CEO Jerry Morgan said.
The chain is upgrading its guest management system, which is used at the host stand to generate wait times and seat customers. Close to half of the chain has the new version, which is designed to provide more accurate wait times and use tables more efficiently.
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