From Nation's Restaurant News · · 1m 20s
Texas Roadhouse social media hoax hits sales
Texas Roadhouse sales dropped after viral racist post hoax.
In brief
Texas Roadhouse sales dropped after viral racist post hoax. Texas Roadhouse sales and traffic slowed in September after a fake social media post claimed employees planned to tamper with Black diners' food, but recovery began in October. Originally reported by Nation's Restaurant News.
Social media hoax
A fake Facebook post claimed Texas Roadhouse workers planned to tamper with Black diners' food involving 400,000 people.
“a user named Nancy Smith wrote that employees at texas roadhouse and logan's roadhouse were planning to tamper with black diners food”
Sales and traffic impact
Same-store sales slowed to 1% in September after strong growth in July and August.
“same-store sales rose 4.3% year over year, while traffic increased 0.7%, an unusually muted performance for the typically high-flying brand”
Company response
Executives confirmed the post was a hoax and launched an investigation including an outside forensic review.
“the company launched an investigation, including an outside forensic review, and quickly concluded that the post was a hoax”
Recovery signs
Sales and traffic improved weekly in October, continuing into early November.
“sales and traffic improved every week in october, and that has continued into the beginning of this month”
Leadership statements
VP of Investor Relations Michael Bailen said operators doubled down on efforts to recover.
“maybe the recovery 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 on everything they're doing”
CEO perspective
CEO Jerry Morgan emphasized community engagement and confidence in sales recovery.
“we are definitely business people, but the trends and the signs show that we believe that those were false accusations and that absolutely, our sales are coming back”
Financial results
Total revenue reached $1.6 billion, up 9.5% year over year with net income at $89.4 million.
“total revenue was $1.6 billion, an increase of 9.5% year over year. net income was $89.4 million, up 6.2%”
Menu updates
Added Chicken Alfredo Pasta to 600+ locations with plans for 100 more by spring 2027.
“it added chicken alfredo pasta to more than 600 locations and expects it to be in the remaining 100 or so by this spring”
Inflation trends
Commodity inflation at 2%, labor inflation at 4.1%, restaurant margins improved by 30 basis points.
“commodity inflation was 2%, on the low end of its expected range, and its outlook for the fourth quarter has improved”
New restaurant openings
Opened five company-owned and three franchised restaurants in the quarter, targeting 35 new locations by year-end.
“the company opened five company-owned restaurants and three franchised locations in the quarter. it expects to have opened 35 new restaurants by year’s end with another 35 on deck for next year across its three brands”
What it means
Texas Roadhouse sales and traffic slowed in September after a fake social media post claimed employees planned to tamper with Black diners' food, but recovery began in October.
