Texas Roadhouse Sales Take a Surprising Dip and Here's Why
Texas Roadhouse is one of the most popular restaurants in the country right now. Not only did the steakhouse chain land on Nation's Restaurant News and Technomic's annual America's Favorite Chains report top ten list this year, but it has managed to increase sales over the past few quarters. According to a new report, while the restaurant's sales are still up from last year at the same time, they recently dipped way below their usual numbers – and the company has an explanation behind the drop that has nothing to do with food quality or customer experience.
Restaurant Business reports that during the first seven weeks of the new year, Texas Roadhouse experienced a 2.9% year over year. However, this is much lower than the last reporting period, when the chain's same-store sales rose 7.7%, including 7.9% in December, and were up 8.5% for the year.
According to executives, the drop is due to cold and snowy weather and also illnesses such as COVID and the flu, resulting in fewer people eating out.
"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."
"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."
They also noted that calendar shifts, including Valentine's Day being on a Friday and New Year's Day midweek, an increase in inflation, and other factors like the California wildfire, played a role in the decline.
"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."
Overall, the brand is confident about the future. "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.
