Customers Are Flocking to Texas Roadhouse Despite Recent Price Hikes
Texas Roadhouse has raised its prices a handful of times over the past year to boost sales and combat rising costs impacting the overall restaurant industry. But according to new data, those price hikes haven't curbed customer appetites for the chain's popular steaks and freshly baked rolls.
The chain released its latest quarterly earnings results on May 2, reporting an 8.4% increase in same-store sales at company-owned restaurants and a 4.3% increase in customer traffic. Same-store sales were also up 7.7% for Texas Roadhouse's franchised restaurants.
This means that customers visited the popular steakhouse chain more and spent more there last quarter. Those results are particularly impressive considering that Texas Roadhouse rolled out a 2.2% price increase at the start of the quarter, which began sometime around late March. That was the third price increase in less than a year following a 2.2% hike in April 2023 and a 2.7% hike in October 2023.
A handful of other major restaurant chains also reported their quarterly earnings this week, but most didn't fare nearly as well as Texas Roadhouse. McDonald's profits and earnings came in lower than analysts anticipated, while sales declined at both Starbucks and KFC.
The chains blamed their financial woes on factors like rough January weather and more hesitant spending from inflation-weary customers. However, Texas Roadhouse seems to be succeeding in spite of those obstacles. Michael Bailen, the chain's head of investor relations, said during a May 2 earnings call that they're "not seeing anything changing in consumer behavior"
"It shows that the consumer is still seeing the everyday value we're offering," he added.
CEO Jerry Morgan said that in August or September this year, they plan to start discussing whether to raise prices again in October. He added that they'll take a "conservative" approach when deciding on the potential price hike.
"We'll see what happens in the industry going forward, and then we'll absolutely partner up with our operators and decide what is best for each and every one of their stores or their market or their region. And then as a company, we'll help them make that decision that will also be very good for our consumer and our shareholder."
In other Texas Roadhouse news, the chain recently began selling two bottled steak sauces at grocery stores across the country. Morgan also announced in February that they'll open around 44 new locations this year. The openings will be split up between Texas Roadhouse and its two sister restaurant brands: the burger and pizza chain Bubba's 33 and the burger and chicken chain Jaggers.
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