A now-deleted August Facebook post, authored by “Nancy Smith,” claimed employees at Texas Roadhouse were engaging in racist behavior. It said they were planning to lick their fingers and touch food of Black customers. The screenshot, which alleged 400,000 people were in on the plan, made the rounds on TikTok and X.
As soon as Texas Roadhouse noticed, it launched an internal review and engaged a third-party online forensics firm. It found zero evidence supporting a., this was happening, b., the alleged online group (it was posted in a “White and Proud” forum) existed, and lastly, any current or former Texas Roadhouse employees were connected.
Simply, it was an online hoax—a fact agreed on by USA Today and others.
Still, analysts expected a dent to surface in Q3 sales. As Peter Saleh, U.S. Bancorp, BTIG managing director and restaurants and food distributors analyst, said earlier, “unfortunately, consumers tend to believe what they read online.”
He noted credit card data showed trends flowing negative in September and early October.
Texas Roadhouse on Thursday confirmed the dip as the brand’s performance was “negatively impacted,” CEO Jerry Morgan shared.
Same-store sales climbed 4.3 percent for the quarter (two-year stack of 10.4 percent) with traffic up 0.7 percent (5 percent two-year). September in particular, however, was dragged by the incident.
To illustrate, by month, comps hiked 5.9, 6.8, and 1 percent for Texas Roadhouse’s July, August, and September periods, respectively. And they’re 1.5 percent higher over the opening five weeks of Q4, including a 30 basis points hit from Halloween shifting to a Saturday.
CFO Mike Lenihan said there’s been sequential improvement in sales and traffic through October and early into November.
Michael Bailen, head of investor relations, added Texas Roadhouse saw numbers improve “every week” but admitted recovery perhaps took a bit longer than some expected.
“But our operators are out there busting their butts,” he said. “And they’ve doubled down on everything they’re doing. And if there’s any group of managers and operators out there who are up for this challenge, it’s the Texas Roadhouse managing partners and the whole teams out there who are compensated off their restaurants.”
“So, they’re out there and working, and not sitting back just waiting to see what might happen,” Bailen added.
Morgan and Texas Roadhouse leadership recently completed its annual fall tour, which allows executives to speak across the table with operators. He said overall sentiment was positive despite recent setbacks and there’s been momentum in stores affected by the hoax.
And to Bailen’s point, it didn’t require Texas Roadhouse to toss any playbooks aside and reinvent its approach. “There’s no doubt that our operators are doing what business owners do,” he said. “They’re doubling down on Legendary Food, Legendary Service, local store marketing, and being great partners in their communities.”
Morgan said conversations centered on strengthening the brand’s market positioning. Food, value, and trust, he explained.
“And so, I think that was the real marching orders,” he said. “We’ll continue to focus on our early dine offering, our ‘Wild West Wednesday,’ and the things that we can do. But mostly, it’s about making sure that every guest that walks through those doors, we’re taking great care of and that we’re going out in our communities and shaking hands with folks we might have seen in a little while and trying to engage.”
Morgan noted Texas Roadhouse would lean into “other avenues” if it has to. But trends and signs thus far show the hoax to be a fleeting episode. “Absolutely, our sales are coming back,” he said.
Lenihan noted mix improved sequentially throughout Q3, and dining room and to-go figures reported positive in August and September.
Average weekly sales were $163,980 for the period, of which $23,628 flowed from to-go. This compared to $157,325 and $21,409, respectively, from a year ago.
Texas Roadhouse has served some 200 million guests in 2026 to date.
The brand is staying active on a few fronts, too. It recently added Chicken Alfredo Pasta to more than 600 restaurants (menu changes are a deliberate, and often rare, turn for Texas Roadhouse). Morgan said feedback from operators and guests proved positive and it expects the item to be systemwide by spring.
There’s also interest, he said, from guests to add other proteins or vegetables.
The Chicken Alfredo Pasta, though, was on one of Texas Roadhouse’s region’s menu for two-plus decades. Morgan sat down with the operator and asked why. At the same time, the brand was getting questions from system leaders about additional enhancements and what that might look like. Texas Roadhouse added fried Mozzarella sticks a few years back, which were a hit, Morgan said.
Given operator pull, Texas Roadhouse expanded the pasta from market and piloted across 100 stores. It then tacked on another 100. Morgan said operators expressed excitement during pricing calls and word got out about the quality and news it generated. Four-hundred more locations opted in with Texas Roadhouse’s October menu.
“This could be a real win for us in the long term,” Morgan said.
“It rounds out the menu and it’s a great choice for somebody who wants something a little different,” Bailen added.
Morgan said Texas Roadhouse has some “fun things” ideating and could try some more regional options. While the brand is historically stringent on what it puts out for guests, it has evolved over the years. It’s added bigger steaks, shrimp, deviled eggs, and, logistically, pictures to printed menus and a panel that shows a number of options learned from the international team.
However, Texas Roadhouse remains a firm believer in not “adding and adding,” Morgan said, meaning if something enters the fold, it’s got to be “really good” to bump out something else.
“I think we’re in a really good place where we currently are, and we’ll continue to talk to the operators in the spring about if there is the ability to expand or not, we’ll have some options for them,” Morgan said. “But really, they got to tell us how much they can handle. But I love our menu. We’re steaks and potatoes and ice-cold beer, baby.”
With beverages, there’s been solid results as well from nonalcoholic mocktails and dirty sodas. And Texas Roadhouse started testing energizer options across its three brands (Bubba’s 33 and fast casual Jaggers included).
Meanwhile, it continues to promote everyday value at the bar with $5 all-day beer, Long Island Iced Tea, and Legendary Margaritas.
Bailen said, overall, the consumer environment feels similar to what Texas Roadhouse observed throughout the year. Sentiment isn’t as high as it’s been, but casual dining behavior suggests guests want to be out. “They want food, service, and value, and those who can deliver on that are continuing to drive people into their restaurants,” he said. “And that’s what we’re focused on. That’s what we’ve always been focused on.”
Regarding technology, Texas Roadhouse’s mobile point-of-sale test is running in about 100 stores. The company is on Version 2 and writing the software internally. There’s a plan for 2027 to reach 200 more locations and likely finish up in 2028 if everything goes accordingly.
Morgan said the handheld mobile POS helps in a couple of ways. Firstly, there’s a generation of servers who love the tablet. There are some, he added, who still want the hardwired POS and the ability to write orders down. It’s about having the flexibility to do both, Morgan explained.
And with its digital kitchen, or KDS, which is completely rolled out, Morgan said operators have gotten used to the system. It’s aiding orders and assembly and calming the process. Texas Roadhouse continues to learn what it can do for the brand outside of making orders more consistent and concise. In particular, the digital kitchen and to-go orders being able to work into the dining room flow has been “extremely helpful,” Morgan said.
The company opened five company locations in Q3, including two Bubba’s 33 and one Jaggers. Three franchise units debuted in the period, too. There are more than 15 openings scheduled for Q4 (as well as three franchises) and Texas Roadhouse remains on pace to open 35 stores this year. The plan for 2027 calls for roughly the same, but with a more balanced cadence as 18 stores are already under construction. Franchise partners are slated to bring eight to 10 to market, including as many as eight internationally.
Texas Roadhouse should exit 2026 with nearly 70 restaurants in 11 countries and announced it recently came to terms on development and franchisee agreements for Vietnam and Japan.
Systemwide, the company directs 840 locations compared to 806 this time last year. That comprises 664 domestic company Texas Roadhouses, 61 Bubba’s 33, and 12 Jaggers; 31 franchise U.S. Texas Roadhouse restaurants, six Jaggers, 65 international Texas Roadhouse franchises, and one Jaggers run by a franchisee overseas.
Thursday also marked a milestone for the original Texas Roadhouse in Clarksville, Indiana, which roots back to February 17, 1993. The brand opened a newly relocated building down the road. It includes memorabilia honoring Store No. 1 and a “Kent’s Corner” that pays tribute to Texas Roadhouse’s late founder, Kent Taylor.
