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Texas Roadhouse reports same-store sales growth of 5.7% for Q2

But the casual-dining company admits it needs to keep close watch on labor costs.
Dwight Burdette, CC BY 3.0

Casual-dining chain Texas Roadhouse is joining a number of others in the category—including BJ’s Restaurants and Brewhouse and Bloomin’ Brands—in reporting sales growth for the recent quarter.

Texas Roadhouse saw same-store sales growth of 5.7% for the second quarter ended June 26, the company reported this week.

The company, which also operates the Bubba’s 33 chain and has steadfastly avoided delivery, also saw traffic grow 4.3% during the period. Revenue grew 11.1%, due in part to an increase in weeks of operation.

Labor costs, meanwhile, increased to 32% of total sales, due to jumps in managing partner pay and climbing minimum wage rates around the country.

“Labor is much less cyclical … They generally don’t come down, whereas food goes up and down,” Texas Roadhouse President Scott Colosi said during the brand’s earnings conference call this week. “So, the labor is a bit more concerning, a bit more challenging for us longer term.”

Texas Roadhouse has opened 14 company-owned units so far this year, with an equal number currently under construction. Two Bubba’s 33 units slated to open in 2018, one a small-footprint prototype, have been pushed back to the following year due to permitting issues, the company announced.

Executives said they are “actively talking” to a number of franchisees about acquiring their units, with an undetermined number of restaurants becoming company owned in 2019.

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