德州鮮切牛排 (TXRH) 2026年第三季法說會：營收成長、利潤率與2027年財測指引

重點摘要

• Texas Roadhouse 2026 年第三季營收達 16 億美元，年增 9.5%。稀釋後每股盈餘 (EPS) 成長 8.6% 至 1.36 美元。
• 同店銷售額成長 4.3%，其中包括平均客單價成長 3.6% 以及來客數成長 0.7%。單月同店銷售額增幅從 7 月的 5.9% 和 8 月的 6.8%，放緩至 9 月的 1.0%。
• 餐廳利潤金額成長 11.9% 至 2.29 億美元，餐廳利潤率擴增 30 個基點至營收的 14.6%。
• 第四季前五週同店銷售額成長 1.5%，其中包括萬聖節假期日曆效應帶來的約 30 個基點負面拖累。管理階層表示，銷售額與來客數自 10 月至 11 月初呈現逐週改善。
• 管理階層維持 2026 全年原物料通膨預期在約 5%，並提出 2027 年約 4% 的財測指引。薪資與其他勞動成本通膨預計將在 2027 年放緩至約 3%。
• 該公司預計在 2026 年與 2027 年各開設約 35 家直營餐廳。該公司將 2026 年資本支出指引上調至約 4.4 億美元，並將 2027 年指引設定在約 4.25 億美元。

核心財務數據

餐飲成本的槓桿效益反映出客單價 3.6% 的成長，這足以抵銷 2% 的原物料通膨。每店週勞動成本金額成長 4.4%，主要受薪資與其他勞動通膨達 4.1% 以及工時增加 0.4% 所推動。

業務與營運表現

旗下所有三個品牌在該季皆實現了正向的同店銷售額與來客數成長。管理階層亦表示，各品牌在 2026 年的每個季度皆繳出正向同店銷售成長。

平均每週餐點銷售額為 164,000 美元。外帶銷售額達 23,500 美元，佔每週銷售額的 14.4%，外帶銷售金額年增 10%。管理階層並未對外帶佔比設定具體目標，但預期技術與營運投資將支撐持續成長。

該公司在第三季開設了五家直營門市，其中包括兩家 Bubba's 33 餐廳與一家 Jaggers。第四季預計開設超過 15 家直營門市，使該公司穩步邁向 2026 年在三個品牌共開設約 35 家門市的目標。在電話會議召開時，已有 18 家計劃於 2027 年開業的門市正在施工中。

Bubba's 33 擁有約 60 家餐廳，年初至今平均每週銷售額近 126,000 美元。管理階層表示，不論是全新建造還是舊店改裝，成熟門市的現金投報率通常都達到 15% 至 19% 的偏高水準。該公司目標為每年開設約 10 至 12 家 Bubba's 33 門市。

國際加盟夥伴在第三季開設了三家 Texas Roadhouse 餐廳，並預計在第四季再開三家，使國際體系版圖擴展至 11 個國家、近 70 家餐廳。該公司亦在越南與日本達成了開發與加盟協議。

雞肉阿爾弗雷多義大利麵已在 600 多家餐廳供應，預計將在春季菜單中全面推行。管理階層表示，該品項豐富了菜單選擇，但預期不會對銷售結構或利潤率產生重大影響。

數位廚房系統已全面上線。行動 POS 正在約 100 家餐廳進行測試，並計劃在 2027 年於另外約 200 家門市導入，若建置持續順利進行，預計將於 2028 年底前全面完成。

管理階層財測指引

管理階層預期 2027 年初的原物料通膨將偏高，第一季可能在 5% 左右，隨後趨於緩和。預計全年通膨約有一半歸因於牛肉，其餘則主要與食用油、農產品及貨運運費相關。

2026 年資本支出展望上調，反映了對 2027 年展店儲備項目的投入、明年更均衡的開幕排程，以及收購鄰近公司支援中心物業的支出。

風險與關注焦點

管理階層表示，8 月底在社群媒體發酵的惡意謠言對 9 月的業績造成了負面衝擊。經外部鑑識審查確定該指控純屬虛構。該公司表示受影響餐廳的動能正逐步改善，但也坦言復甦所需的時間比部分市場人士預期的要長。

由於萬聖節從週五移至週六，且聖誕節從週四移至週五，第四季同店銷售成長預計將面臨合計約 75 個基點的逆風影響。

消費者依然精打細算並注重性價比。然而，管理階層表示，在第四季初實施 1% 的菜單漲價後，並未觀察到點餐行為出現顯著變化。該公司亦指出，在該季前五週內，主餐組合未見實質惡化。

原物料價格壓力依然不均。儘管牛肉通膨已有所降溫，但管理階層指出食用油、農產品與運費成本上升。在電話會議召開時，2027 年整體原物料採購組合中約有一半已鎖定價格。

分析師問答亮點

• 第四季銷售復甦：管理階層表示，在第四季的前五週內，同店銷售額呈現逐週改善。10 月底的表現優於月初，而 11 月初則進一步增強。
• 消費者行為：該公司表示，顧客對餐點、服務與性價比的需求依然持續，在主餐選擇上並無明顯的消費降級現象。更多顧客持續選擇牛排或份量較大的主餐。
• 餐廳價值主張：管理階層表示，超市裡的牛排價格依然昂貴，並認為即使零售牛肉通膨有所降溫，Texas Roadhouse 仍能持續提供具吸引力的相對價值。
• Bubba's 33 展店擴張：新門市與舊店改裝均取得了令人鼓舞的成果。管理階層提醒，在約 60 家門市的現有基礎上新開約 10 家餐廳，在新店營運爬坡期間可能會暫時對利潤率造成壓力。
• 人力管理：營運團隊是根據其長期期望達成的銷售額與來客數來配置人力，而非因應短期的客流變化大幅裁減人力。
• 飲品與利潤結構：管理階層指出，飲品類別（包括酒精飲料、軟性飲料、無酒精調飲及髒髒蘇打 [dirty sodas]）是產品組合中最具潛在利潤效益的品類，但並未具體量化預期影響。

完整財報電話會議逐字稿

---

完整財報電話會議逐字稿

管理層陳述

Operator

Good evening, and welcome to the Texas Roadhouse Third Quarter Earnings Conference Call. Today's call is being recorded. [Operator Instructions]

I would now like to introduce Michael Bailen, Vice President of Investor Relations for Texas Roadhouse. You may begin your conference.

Michael Bailen

Thank you, Kenneth, and good evening. By now, you should have access to our earnings release for the third quarter ended September 29, 2026. It may also be found on our website at texasroadhouse.com in the Investors section. I would like to remind everyone that part of our discussion today will include forward-looking statements. These statements are not guarantees of future performance, and therefore, undue reliance should not be placed upon them.

We refer all of you to our earnings release and our recent filings with the SEC. These documents provide a more detailed discussion of the relevant factors that could cause actual results to differ materially from those forward-looking statements. In addition, we may refer to non-GAAP measures. If applicable, reconciliations of the non-GAAP measures to the GAAP information can be found in our earnings release.

On the call with me today is Gerry Morgan, Chief Executive Officer of Texas Roadhouse; and Mike Lenahan, our Chief Financial Officer. Following the prepared remarks, we will be available to answer your questions. In order to accommodate everyone, they would like to ask a question, could everyone please limit yourself to one question. Now I would like to turn the call over to Gerald.

Gerald Morgan

Thanks, Michael. Good evening, everyone. For the third quarter, we are pleased to report that all 3 brands delivered positive comparable sales and traffic growth. We generated $1.6 billion in revenue and same-store sales increased 4.3%, including 0.7% traffic growth. We are proud to say that each of our brands have reported positive comparable sales for every quarter in 2026.

Our third quarter results, specifically in September were negatively impacted by what was determined to be a social media hoax that occurred at the end of August. Through our investigation, which included an external forensic analysis, we were quickly able to determine that the allegations made and the social media posts were completely false. Our recently completed annual fall tour allowed us to speak directly to our operators across the country. I can tell you that overall sentiment is positive, and we are seeing momentum in the restaurants that were affected.

There's no doubt that our operators are doing what business owners do. They're doubling down on legendary food, legendary service, local store marketing and being great partners in their communities. Looking forward, our development pipeline continues to be strong. We opened 5 company locations in the third quarter, which included 2 Bubba's 33 restaurants and 1 Jaggers. We have over 15 openings scheduled for the fourth quarter and remain on track to open approximately 35 restaurants across the 3 brands in 2026.

Today, there is a significant milestone for the original Texas Roadhouse restaurant in Clarksville, Indiana. We opened the doors to its newly relocated building, which is just down the road from the original location. Clarksville is where tenth dream of Texas Roadhouse became a reality. The new building includes memorabilia honoring our first store as well as a very special Kent's corner, which pays tribute to our founder's vision and success.

Looking ahead to 2027, we expect to open approximately 35 company-owned restaurants across the 3 brands. We currently expect a more balanced cadence to next year's openings with 18 restaurants already under construction. We also have momentum on the international front. Our franchise partners opened 3 Texas Roadhouse restaurants during the third quarter and expect 3 openings in the fourth quarter. This will bring our international total to nearly 70 restaurants in 11 countries. In addition, we are excited to announce that we have recently come to terms on development and franchise agreements in Vietnam and Japan.

In 2027, our franchise partners are planning to open approximately 10 new restaurants, including as many as 8 international Texas Roadhouses. There are also exciting things happening on the menu at all 3 brands. For example, Texas Roadhouse added Chicken Alfredo pasta to over 600 restaurants. The feedback from operators and guests has been positive, and we expect Pasta to be system-wide by the spring menu. While we are currently focused on chicken alfredo, there is interest from our debt to add other proteins or vegetables, which gives us confidence in the offer going forward.

On the beverage side, we are seeing positive results from our nonalcoholic offerings with mocktails and dirty sodas. We are also testing Energizer's options at all 3 brands. As for everyday value at the bar, we are continuing to promote our all day, every day, our $5 all day everyday ice-cold beer, Long Island Iced Tea and Legendary Margaritas.

On the technology front, our mobile POS test is currently in approximately 100 restaurants. We will continue to be deliberate as we customize the technology to make sure the rollout is successful for our guests and operators. Finally, as I have mentioned before, there is nothing more energizing than meeting face-to-face with nearly 800 managing partners on Fall Tour. Seeing the business through their eyes and feeling the passion they have for legendary food, legendary service and our purpose of serving communities across America and the world is always inspiring.

Now Mike will provide some thoughts.

Michael Bailen

Thanks, Jerry. During the third quarter, traffic trends through August were strong on both a 1- and multiyear basis and guest behavior within our restaurants remain healthy. Mix improved sequentially throughout the third quarter with both dining room and to-go mix positive in August and September. Through the first 5 weeks of the fourth quarter, our comparable sales have grown 1.5%, which includes an approximately 30 basis point negative impact from Halloween shifting from a Friday to a Saturday. .

Most importantly, we are encouraged by the sequential improvement in both sales and traffic we saw throughout October and into the beginning of November. While consumers remain selective and value conscious, we have not seen signs of a meaningful shift in our guests ordering behavior since implementing our 1% menu price increase at the beginning of the fourth quarter.

Moving on to commodities. Inflation in the third quarter came in at 2%, which was at the lower end of our expected range. While our outlook for the fourth quarter inflation has improved, we are maintaining our full year 2026 commodity inflation guidance at approximately 5%. At this time, we are also setting our 2027 commodity inflation guidance at approximately 4%. On labor, third quarter inflation of 4.1% and was in line with our expectations.

We are narrowing our full year 2026 wage and other labor inflation guidance to 3.5% to 4% and for 2027, we are guiding to wage and other labor inflation of approximately 3%. With regards to our capital position, we ended the quarter with $141 million of cash. Cash flow from operations for the third quarter was $147 million, which was offset by $197 million of capital expenditures, dividend payments and share repurchases, based largely on the health and timing of our new store development pipelines for 2026 and 2027, we are updating our 2026 capital expenditure guidance from approximately $400 million to approximately $440 million. And we are establishing our 2027 capital expenditure guidance at approximately $425 million.

And now Michael will provide the third quarter financial utility.

Mike Lenihan

Thanks, Mike. For the third quarter of 2026, we reported revenue growth of 9.5%, driven by a 4.2% increase in average weekly sales and 5.1% store week growth. We also reported a restaurant margin dollar increase of 11.9% to $229 million and a diluted earnings per share increase of 8.6% to $1.36. Average in food sales in the third quarter were $164,000 with to-go representing $23,500 or 14.4% of these total weekly sales. Comparable sales increased 4.3% in the third quarter, driven by a 3.6% increase in average check and 0.7% traffic growth. .

By month, comparable sales grew 5.9%, 6.8% and 1% for our July, August and September periods, respectively. In the third quarter, restaurant margin dollars per store week increased 6.4% year-over-year to $24,000. Restaurant margin as a percentage of total sales increased 30 basis points to 14.6% as compared to the same period last year. Food and beverage costs as a percentage of total sales were 35.5% for the third quarter, a 32 basis point year-over-year improvement was primarily driven by a 3.6% check increase, which more than offset commodity inflation of 2%.

Labor as a percentage of total sales increased 8 basis points to 33.7% as compared to the third quarter of 2025. Labor dollars per store week increased 4.4% and due to wage and other labor inflation of 4.1% and growth in hours of 0.4%. Other operating costs were 14.6% of sales which was 8 basis points better than the third quarter of 2025. Higher sales was the primary driver of the leverage.

Moving below restaurant margin, G&A dollars increased 9% as compared to the third quarter of 2025 and came in at 3.8% of revenue for the quarter. For full year 2026, we continue to forecast a low double-digit percentage increase in our total G&A dollar expense. Depreciation expense increased 14.6% and year-over-year in the third quarter and came in at 3.8% of revenue. For full year 2026, we continue to expect a low teen percentage increase in our total depreciation dollar expense.

Our effective tax rate for the quarter was 12.2%. At this time, we are updating our guidance for the full year 2026 income tax rate to approximately 13% and -- we are also setting our guidance for the full year 2027 income tax rate at approximately 13%.

Lastly, as a reminder, we expect same-store sales growth in the fourth quarter will be negatively impacted by several holiday shifts. Year-over-year, Halloween shifted from a broad age to a Saturday and Christmas Day is shifting from a Thursday to a Friday. In total, we estimate approximately 75 basis point negative impact to fourth quarter same-store sales growth from these shifts.

Now I will turn the call back over to Jerry for final comments.

Gerald Morgan

Thanks, Michael. In closing, I want to thank the best operators in the industry for their commitment to being owners of their business and serving over 200 million guests so far this year. Our company was built on an ownership mentality of executing the fundamentals. This mentality has driven our success over the years and will continue to keep us Roadhouse strong for years to come. There's no doubt, Rodi Nation is on the job. .

Michael Bailen

That concludes our prepared remarks. Kevin, please open the line for questions.

Operator

[Operator Instructions] Your first question comes from the line of Jacob Aiken-Phillips with Melius Research.

分析師問答

Jacob Aiken-Phillips

So you mentioned the CapEx increase largely reflects timing of the development pipeline, but with probably 35 openings planned in the year, how much of the increase in spending? How much of it is increases spending ahead of future evenings versus higher opening cost per restaurant. And then as a corollary, given the pace of openings and the timing in 4Q, 1Q wouldn't -- why not an increase in the hours per week or the store hours.

Mike Lenihan

Yes. Jacob, look, on the CapEx for both this year and next year, Jerry mentioned -- we've got approximately 35 restaurants that will open this year and another 35 that will open next year, approximately across the 3 brands. The '27 openings will be more evenly spread throughout the year. And so some of our CapEx for next year is hitting our Q4 number this year as well as, obviously, the Q4 numbers. that is driving it. We are very excited about that prospect of having more restaurants open sooner in the year next year.

I think the other thing driving the 2026 number is we did purchase a neighboring property next to our support center that will further support our growth in the years to come.

Operator

Your next question comes from the line of Peter Sella with BTIG.

Peter Saleh

I did want to ask about the comp slowdown in September. Maybe you guys could give us a little bit more color. Was this more confined to certain regions? Was it more national? And is there anything that you guys are doing differently from a marketing or a promotional standpoint to try and reaccelerate some of that traffic back into the stores. .

Mike Lenihan

Yes. Peter, I'll start and I'll let Gerry weigh in on some of the things we're doing. In terms of the impact, we always have stores that either over or underperform the national average in any given quarter for a variety of reasons. That was the case that happened in September in Q3 and what we're seeing in Q4. Importantly, as we talk about our sequential improvement such this far in Q4, we are seeing across all of our restaurants. I'll let Jerry talk to some of the things we're doing.

Gerald Morgan

Yes. Thank you. Obviously, we had the opportunity to be face-to-face with our operators during the fall [indiscernible] to really talk about how do we strengthen our position in the market. So -- it's been about our food, our value the trust we have with our guests and getting out in our communities. And so I think that was the real marching orders. We'll continue to focus on our early dine offering. Our Wild West Wednesday and 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 who might not have seen in a little while and trying to engage. And so I think that has been our strategy, and it's obviously working as we can tell in the numbers now. .

Operator

Your next question comes from the line of Lauren Silberman with Deutsche Bank.

Lauren Silberman

So I wanted to just dig into the comp side. There's been a lot of noise in October broadly across the industry. Can you just like help on Paco trends have progressed than perhaps more recently, September, you said was 1%; underlying ex Halloween quarter-to-date, I think 1.8%. So just trying to understand how things are building and any changes in the consumer environment.

Michael Bailen

Lauren, I'll start with what we've seen in Q4, then I'll hand it over to Michael for some commentary on the consumer. We we exited the month of October higher than what we entered it. And thus far in November, we have seen a further increase from where we exited October. Mike, I'll turn it over to you on consumer.

Unknown Executive

Thanks, Mike. Yes. So the consumer environment, it still feels very similar to what we've seen throughout the year. sentiment is still not the highest amongst the consumer, but I still believe the behavior when it relates to casual dining remains the same. People want to be out. They want that they want food, service and value, and those who can deliver on that are continuing to drive people into their restaurants. And that's what we're focused on. That's what we've always been focused on -- so it's kind of business as usual here at Texas Roadhouse and don't feel anything that's really different from the consumer environment.

Operator

Your next question comes from the line of Brian Harbour with Morgan Stanley.

Brian Harbour

Could you elaborate on the 4% commodity inflation guidance for next year? I mean it actually seems like it's a little bit more favorable right now. So what -- what are some of the drivers behind what you're seeing for next year?

Michael Bailen

Yes. Brian, it's Michael. Thanks for the question. I'll tell you that 4% number, about half of that is driven by be and the other half is coming from nonprotein items, specifically oils and produce items. So you are correct. I think was referring to maybe improving or less inflationary peak environment, but there are other items within our basket that have been fairly benign for multiple years that are seeing some pressure at present, given what's going on in the world today and freight costs add to that as well.

So we expect to maybe be on the higher side of that commodity inflation guidance early in the year, Q1 could be in that 5% range and then seeing it step down. But I think the important thing to realize is it's not all be in the expected inflation for 2027.

Operator

Your next question comes from the line of Andrew Charles with TD Cowen.

Andrew Charles

You guys talked about the hope swing on sales, and it's definitely encouraging to hear about the sequential increase you guys are seeing through October and November. But there's a lot of investor concern that would beat disinflation, -- this is working against you, that the retail demand disruption that benefited self to the better part of the last 12 to 18 months is starting to wane. So I'm curious to get your thoughts on that idea.

Michael Bailen

Andrew, it's Michael. I hear the concern. I don't know if I believe that, that's really what's going on. And I don't know that I think that retail the prices have come down, maybe they aren't inflating as much as they have. But be that the protein is still very expensive at the grocery store and the relative value of coming to Texas Roadhouse growth for that stake is still very attractive.

We've talked about yes, our traffic trends do tend to outperform in times of higher commodity inflation. That does not in beef inflation. That doesn't mean that we're not going to perform when it's [indiscernible] inflationary. But again, I don't think we're getting an environment where deep relative to other proteins looks cheap in the grocery store.

Operator

Your next question comes from the line of David Palmer with Evercore ISI.

David Palmer

Just wanted to ask you a technology question. I guess it's not unreasonable at this point to review what has transpired with your digital kitchens and to think about what that has done for you and maybe a little bit of a review on that would be helpful. It's obviously been an enabler in terms of fueling your confidence to take on that off-premise business during peak hours. -- but maybe you have some other comments about that. And related to that is the handheld ordering, it sounds like there's a lot of enthusiasm from the managing partners out there -- what do you think that could be? And could you give us a sense of the timing of that?

Gerald Morgan

Yes. Thank you. This is Jerry. Yes, on the digital kitchen, we're completely rolled out. I think we really have gotten used to the system and how it is helping our operators with the orders and the assembly of the food to go out together. So I think there's a lot of wins from that standpoint of just the calmness in the kitchens and how everybody has adjusted to it so well. And -- and so completely rolled out, we really continuing to learn out what it can do for us outside of just making our orders more consistent and concise to your point, the digital kitchen and to-go orders being able to really work that into the dining room flow has been extremely helpful. So we've obviously seen our dining room to grow sales and our to-go business that is absolutely a part of it.

The mobile POS is in 100 stores, as I think we mentioned -- it's on version 2. We're currently writing that software on ourselves, and we're having a lot of success with it. We do have a plan for 2027 to roll out approximately 200 more restaurants and then we'll finish up probably in 2028, if everything continues to go well. And obviously, that handheld mobile POS does help us in many ways. I think there's a generation of servers that absolutely love the tablet. I think there's others that still want to have the hardwired POS and be able to write down an order and interact in that facet. So us being able to have the flexibility to do both.

I think will serve Rodination extremely well. But we're very pleased with the rollout of the 100 stores that we currently have. We're getting our game plan and strategy for the 200 plus in 2027. It could ramp up a little higher from that, depending on how well it's received -- and then we would anticipate, if everything goes well, that we would be able to wrap up by the end of 2028.

Operator

Your next question comes from the line of Jim Salera with Stephens.

James Salera

Task about the Alfredo menu innovation. If you could walk us through? Is that something that you had guests come to you asking as an expansion or maybe some of your folks in the field at the restaurant level? And then just any thoughts on how we might think about that impacting mix? Is that kind of positive negative will bring incremental people in? Is it more of a kind of entry or opening price point for guests -- just any color around that would be helpful.

Gerald Morgan

Yes. Thank you for the question. We're excited about the Pasta. It's been on 1 of our regions menu in a market for probably 20-plus years. I had an opportunity to really sit with the operator and ask them why. And we were getting some questions from our operators about additional menu enhancements and what that could be -- we obviously added the fried cheese materialistic a few years ago, which has been a real big hit and -- and so we really expanded from that market and tested it in 100 stores, and it went really well.

Our servers love it. The guest is loving it. Our operators are really feeling good about it. So we expanded that test to another 100. So I think by the -- going into the summer, we had a little over 200. When we got to our pricing calls, our operators are really excited about the word that gotten out that they felt great about the quality that the guest was really excited about a new additional menu item. We don't do a lot of things like that. So it's been received very well. We had 400 more stores opt in on our October menu. And the sales have been very strong and very solid. Maybe Michael can speak to a little bit about how many stores or how many units we're moving.

But I will tell you, it's a great product. We're very proud of it. And it's exciting to have some refreshing menu items. And it may be a little bit of that game changer when people are driving in the car. And we haven't had pasta on the menu on a national level for a long time. So this could be a real win for us in the long term, but still early on, I think, to have that many stores to know the impact, but it is a great product, and we're really excited about it.

Michael Bailen

Jerry, to your point, I probably won't give in to the exact number. I mean we're selling a good number. It's probably not going to be 1 of our top 10 mix entree items that we offer, but it rounds out the menu and it's a great way for some of who want something a little bit different. And so I don't really expect it to change anything with our mix trends or margin trends from it. But again, it was something that we thought fit well into the menu.

Operator

Your next question comes from the line of Chris O'Cull with Baird.

Unknown Analyst

Jerry, what would cause the company to conclude that it might need to shift its recovery plan or strategy beyond just local store marketing outreach -- and then what maybe could that look like? And then one other question, just maybe for you, Michael. The pace of the slowdown you've seen, how should we be thinking about the company's ability to manage labor hours relative to the sharp falloff in traffic .

Gerald Morgan

Thanks, Chris. I do believe having the conversation with our operators face-to-face and really understanding what we do. I feel -- if I look at July and August, and then I look at September and then I look at where we're at today, we are a very trusted brand out there. And I do believe that people understand that. And so I think the confidence of us really doubling down on running great shifts, running open in our business, being great community partners is really the way to go. .

Will we lean into other avenues if we need to, absolutely. We're not -- we are definitely business people. But the trends in the signs show that we believe that we -- those were false accusations in that. Absolutely, our sales are coming back. Our relationship with our communities across the nation are strong and fleet will believe that. And we're just going to continue to open our doors and serve our food and show the high-level hospitality and show them that we're loving partners in that community. And I believe that we will continue to get back to exactly where we were going into it. .

Michael Bailen

And then on the labor question, this is Mike. I think it's safe to say our operators are managing the business for the long term. They've got a second to none ownership mentality. And so quarterly results are less important to them. The long term is. So from a labor efficiency perspective. I'll repeat something we say a lot, and that is our NPEs. They staff for the sales and the traffic they want in the long term. And so I don't think you'll see much of a change from us and that approach at all. .

Operator

Your next question comes from the line of Andy Barish with Jefferies. .

Andrew Barish

Can you just give us kind of a Bubba's 33 update? And does the pipeline for '27 continue to contemplate a higher number of openings with that brand?

Gerald Morgan

Yes. Thanks, Andy. It's Jerry. I'll kick it off and then 1 of these guys will take over. But really excited about the opportunity for Bubba's 33. Ithink we've got openings left this year. And so we have had been pushed off a little bit, but we're continuing to see great success with the brand and love the food. I love what we're doing on the operations side and -- and really, the results that we're getting, we've seen some very positive trends here as of recent our new store openings are doing really, really solid.

So I feel really good about the brand and the positioning of it representing 1 of TSR at brands and Bubba's 33 obviously has a new role in our company today. and going forward. And we will keep the cadence. I believe we're trying to get around 10 to 12 a year is what we're striving for. We've got a strong pipeline for '27 and '28 we're -- and obviously, working on '29. So we feel very good about what we've currently got and what we're doing with the brand. .

Michael Bailen

Yes. And -- and Andy, just to give you a little bit more color on the pipeline, This is Mike. I think the really encouraging thing on that is that Bovis is being able to take advantage of ground-up opportunities as well as some conversions. We will open 3 or 4 conversions this year, and we've been pleased with those results. I'll go up a level 2, and that is the learnings that are being applied at Bubba's are really, really encouraging with only 60 some odd restaurants, hardly any advertising and the spend and to generate weekly average sales of nearly $126,000 year-to-date, put them near the top of the casual dining space. So you put those 3 things together, and it does mean the future is very bright for Bovis. .

Operator

Your next question comes from the line of Andrew Strelzik with BMO Capital Markets.

Andrew Strelzik

I wanted to ask about the to-go business. And at 14% of sales, it's already pretty decently sized business, but is there anything you're thinking about doing incrementally to grow to go in 27 that we should be aware of or longer-term things on your radar to continue to build that business over time? .

Unknown Executive

Yes. Andrew, we don't necessarily have a target mix on our to-go business. we like the way it's growing weekly sales dollars to go grew 10% in Q3 over last year. The mix is growing nicely. We think that the investments in technology that Jerry mentioned earlier, some of the labor efficiencies that we see allow us to deliver those legendary experiences through the to-go business. We also think our operators can and will continue to support growth in both the dine-in as well as to go. So I think it's more of the same in 2027 there.

Gerald Morgan

Andrew, this is Jerry. I think we have been working on a program with our family packs and some that have been received extremely well. Not all of our stores need them, but I think there are some areas that -- where you can get a family pack of feed 4 is definitely something that we're continuing to look at. We have been in the system now. It is working. There's a lot of stores that are using it. So that could be something that we could use that lever if we needed to from that, but it's already in the system, having some success. So we could be leaning into that a little heavier. .

Operator

Your next question comes from the line of John Evanko with JPMorgan.

John Ivankoe

I was in a store a couple of weeks ago and had the physical menu in my hand, and I was really kind of struck by how much it reminded me of the menu from 20 years ago. It might even be exactly the same. You can tell me. So as we kind of think about maybe over time, menu enhancements might be more of an incremental opportunity in the future than it was in the past. Do we have an opportunity to kind of make some enhancements to the physical menu, keeping all the good of course and just making it better, especially, as I imagine, many of your most frequent customers probably don't even use the menu and a more modern menu actually might benefit new customers to explore some new things a little bit better. What are your thoughts on that?

Gerald Morgan

John, this is Jerry. That's a great question. You're right. I mean we -- if I go back to all the beginning days -- we didn't have a lot -- we only had a 6-ounce, 8 [indiscernible] ounce, and 11-ouline. So we've added a 16-ounce uro, a 16-ounce ruby, the bond ride we've added a lot of bigger stakes by keeping our value and our options to that point. So -- but I think when over time, we have adjusted, we used to have trough on the menu. And now I believe we went to shrimp, that shrimp has been a huge seller. We used to have big beans, and we have corn. -- not only our healthier options. So we continue to look at. We have test items that are out there Obviously, the path is something that will be -- we'll see how that continues to go.

The fried cheese [indiscernible]. So we have definitely evolved the menu. We continue to test some things. We've got shrimp cocktail out there and test dev eggs. We've got some fun things that are working, and we -- they may be more regional items. But I'll tell you, we've got a heck of a ship that continues to throw things our way. But in order to make on that menu, it's got to be a really good product to bump something out of a slot because you just can't keep adding and adding. 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. But really, they got to tell us how much they can handle. But I love our menu. We're states in potatoes and I told beer, maybe.

Michael Bailen

And John, this is Michael. I just want to add on from a design of the menu. We certainly -- a lot of it is very similar, but I think a big enhancement is we've added pictures on the menu on a panel. -- that shows a number of the items. And that's something we learned from our international team that really added value to the menu, a lot of people use that to help determine what they want to buy. So we definitely have enhanced the design of the menu over the years and with the pictures being probably the biggest change. .

Operator

Your next question comes from the line of Logan Reich with RBC Capital Markets... .

Logan Reich

I personally love pictures on the menu. So I appreciate that. My question is going back to the quarter-to-date comp and just try to think about the Q4 balance of the quarter I guess just like what would you chalk up the slowdown to -- I mean, obviously, the hopes was a headwind, but I think some investors maybe had expected sales to improve a little bit faster than they have. And then I believe compares get easier through the balance of the quarter. Like is there a right way to think about maybe some acceleration on easier compares for the rest of the quarter? Or is that not the right way we should be thinking about it? .

Michael Bailen

Yes. Logan, it's Mike. I think I'd like to not necessarily provide -- we don't provide quarterly guidance, but I will remind you a couple of things that may help out with how you're looking at it. We do have 2.9 points of pricing in the quarter and point you back to Michael's prepared comments with regard to the negative holiday shift and then lastly, just to kind of reiterate the comments I had earlier, I believe it was to Lauren with regard to how October and thus far in November, where we exited October stronger than we entered it, and we're entering November stronger than we exited October.

Operator

Your next question comes from the line of Dennis Geiger with UBS.

Dennis Geiger

I wanted to ask a little more on visibility into '27. If any commentary you can give on loosely where you're locked. And if any additional updates on the supply demand side of things? Anything you could share that's shifting at all on the supply side? And any update maybe on where you think demand is, retail demand, et cetera, we've seen much shift there?

Michael Bailen

Dan, this is Michael. Appreciate that other question. I don't know if I think the demand at retail has changed much since we were last speaking over second quarter of the year. I think people are still looking for value and there are some that probably are shifting to other proteins, but beta still certainly selling in the grocery store in retail. Supply is tighter, the packers are slaughtering more channel right now.

But -- we expect supply will tighten into the end of the year and early next year. The benefit of Mexican border reopening is probably a mid- to late year impact if things continue to go well with that reopening. We are logged on about half of our overall commodity basket. We never talked specifically on net with deep being about half the basket, they're not going to run too far different from each other. So we have our supply locked in for the majority of our beds and we have prices locked in on about half of the overall commodity basket right now. .

Operator

Your next question comes from the line of Chris Carroll with KeyBanc Capital Markets.

Christopher Carril

I just wanted to follow up on Bubba's. Your commentary around volumes and around new locations sounds really encouraging. But just maybe following up on this, can you speak to the progress you're seeing from margins and/or returns perspective at the brand?

Gerald Morgan

Yes. I can start with that, sure. I think as it relates to returns because it's a good follow-on to the development comments earlier. We are seeing nice returns in our Babis locations that generally equates to high teens cash-on-cash returns. And what's nice is that we are seeing that in both ground-ups as well as the conversions that I mentioned.

And as it relates to profit margin, the Bubba's operators have the exact same mentality that the Roadhouse operators do. and they manage and get paid off of margin-related dollars, not percentages. And so the increases that we're seeing their top line is flowing through in a way that we're happy with us.

Michael Bailen

And Chris, this is Mike. I'll just add. I'll tell you, we're seeing some really encouraging comp trends at Bubba's of recent. So very excited about what we may continue to see from sales flow include to margin. But do you remember when you have approximately 60 locations, you're opening 10 new restaurants you do get some pressure from those new stores taking a little bit of time to ramp up to profitability that can weigh down on the margin on a quarter-over-quarter basis. But over time, we are very encouraged by what we see.

Operator

The next question comes from the line of Jim Sanderson with Northcoast Research.

James Sanderson

I wanted to go back to international. I think you mentioned signing agreements in Vietnam and Japan. -- wanted to get a little bit more feedback on the size and scale, duration of the agreements. And then also wondering if you're actively pursuing franchise agreements in Latin America or Canada.

Michael Bailen

Yes. Jim, this is Michael. Probably I can get into a lot of details right now on the size or scope of those agreements. We think there are some huge opportunities in both those countries that we have agreements in place with, but probably not going to get too specific there. I also probably wanted to comment too much on where we may be focusing our attention. We do have franchise restaurants in Mexico. So we do have some Latin America presence already and we'll continue to look for new opportunities going forward.

Gerald Morgan

I'll just add to that, that we made a comment in the last quarter on the World Cup. -- and the interest that we got internationally on an inbound basis from some of the viral social media posts that were made by international guests coming to the U.S. That has resulted in some additional inbound interest in our international business as well. .

Operator

Your next question comes from the line of Gregory Francfort with Guggenheim.

Unknown Analyst

This is Ari Rosa on for Greg. I wanted to double quick on the consumer slowdown. Is there a softness in the past couple of months across the industry. Do you see any trade down in statcast doing that as well come not mistaken, you hit the soft patch last December. -- when there was like a trade down and stake. Any additional color would be super helpful.

Michael Bailen

Yes, this is Michael. Yes, I don't think we're seeing a consumer slowdown and a macro slowdown at this point. We're not seeing anything in our mix trends that tell us the consumers behaving any differently in the 5 weeks in the fourth quarter, have in September or August or July. So we continue to see guests trading to more of our guests getting a stake or a bigger entree. So nothing there right now that is raising a concern for us.

Operator

Your next question comes from the line of Sara Senatore with Bank of America.

Sara Senatore

Just a quick follow-up on the mix question, and it looks like maybe flat for the quarter. which is better than it's been for, call it, 6 or 7 quarters. So I was just curious what's driving that? It sounds like that you're still seeing that trade up, maybe alcohol has moderated, maybe not alcohol. -- alcoholic and that's part of maybe what's inspiring the mocktails and dirty sodas or retort energizers, -- so I just wanted to sort of understand that. And -- and broadly speaking, is there an opportunity or maybe it's just too small for mix to actually impact your margin? Because obviously, food margins on beef tend to be lower than pretty much anything else. So just trying to understand kind of the margin complexion if you do start to see a pickup in your beverage business or even with pasta or it's just to kind of small to move the needle? .

Michael Bailen

Are, it's Michael. You laid out some of the answers to the question as far as what's driving the mix, entree mix .

David Palmer

Kind of problem sequentially Q1 to Q2 and Q2 to Q3 on trade mix has gotten more positive and alcohol mix has gotten less negative. And that's really the driver of getting to that flat bit you were for a Q3 mix was flat. All of our pricing flowed through to check.

As far as your question on, can can mix impact margins, I think it depends certainly on the beverage side, getting a positive mix on beverage, whether that's soft beverage alcohol, dirty sodas, mocktails, you name it, beverages is profitable and that would probably be -- probably be the biggest 1 that could improve margins, whether it whether mix moves enough to move that needle is to be determined, but beverage would be the 1 that have the largest impact there. I don't think Pasta as I kind of alluded to before is going to be a big enough mix item to move the margin numbers.

Operator

Your next question comes from the line of Brian Vaccaro with Raymond James.

Brian Vaccaro

Just following up on the food cost inflation and sorry if I missed it earlier, but what is your expectation for the fourth quarter specifically? And then my question is on wage and other inflation I think you guided to up 3% in '27. It's been a long time since we've seen it that low. So could you just provide a little more color on some of the dynamics contributing to that.

Michael Bailen

Sure. Brian, it's Michael. Fourth quarter commodity inflation, we're now expecting about approximately 4.5%. And that's down from, I would say, approximately 5% that we were expecting when we updated you last quarter. So a little bit better there. You're right, the labor inflation had come down. The wage component of that inflation continues to moderate. Now some of it is also because we -- the last 2 years, we acquired some of our California franchise stores where wage rigs are much higher, and that was adding some pressure to wage inflation. We don't have that in 2027. But I'd say 2/3 of the wage and other inflation expected for 2027 is coming from the wage side of it, and the remainder is coming from health insurance costs, and other components of labor.

Operator

Your next question comes from the line of Zach Fadem with Wells Fargo.

Zachary Fadem

I think there's still some confusion on the trajectory of the recovery. So just to get a little more detail. Is it fair to say that the comp exited flat or perhaps a little negative in late September and then gradually improve through October and now roughly 3 or 4 points better versus the trough. Is that a fair characterization? .

Unknown Executive

I don't -- I would say we certainly -- I probably have to add specific an answer as you may like, but -- but certainly, we have seen sequential improvement every week certainly through the 5 weeks of the fourth quarter. And -- and so yes, we are continuing to see those numbers get better. I'm not going to put a specific number around it. But every week has gotten better, and we're encouraged by what we're seeing right now. But sometimes maybe the recovery takes a little bit -- has taken a little bit longer than some would have expected. But our operators are out there busting their butts and they've doubled down and everything they're doing.

And if there's any group of managers, operators out there who are up for this challenge into 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 wait and see what might happen.

Operator

We have reached the end of the question-and-answer session. I will now turn the call back to Jerry Morgan for closing remarks.

Gerald Morgan

Thank you, and I want to just thank you all for joining us tonight and a special thanks to our management team and all of our rodies at our new Clarksville restaurant on their first day, serving Clarksville, Indiana in that brand new store. Let's go Clarksville, Indiana.

Operator

This concludes today's call. Thank you for attending. You may now disconnect.