Q3 2026 results
| Metric | Result | Change |
|---|---|---|
| Revenue | $3.3 billion | up 9.6% |
| Comparable restaurant sales | 2.1% | Not stated |
| Restaurant-level margin | 23.3% | down 120 basis points |
| Adjusted diluted EPS | $0.27 | down 7% |
| Digital sales | $1.3 billion | Not stated |
Guidance and outlook
- Q4 comparable sales are expected to be around 2%.
- Q4 cost of sales is anticipated to be around 30.5%.
- Q4 marketing costs are expected to land in the high 3% range.
- Q4 G&A is expected to be around $189 million on a non-GAAP basis.
- The company expects to open around 350 restaurants in 2026.
- The company expects to open approximately 340 to 360 company-owned restaurants in the U.S. and Canada in 2027.
- The company expects to open around 15 to 25 restaurants outside the U.S. and Canada in 2027.
How management sounded
Positive (+6 on our -10 to +10 scale). Management expressed high conviction in their long-term strategy and ability to drive transactions despite a challenging consumer environment. Management sounded more upbeat than on 8% of the 190 calls we cover; most companies sound positive on their own calls, so the comparison says more than the label.
Q&A summary
October trends and outlook
Asked: David Palmer with Evercore ISI asked about October trends and the implications for strategy.
Answer: Management noted a choppy start to October but regained positive transactions and expects a 3% to 4% exit rate for the year.
Throughput and hospitality
Asked: Sara Senatore with Bank of America asked if the focus on speed of service has come at the expense of hospitality.
Answer: Management stated throughput is a strategic advantage and they are emphasizing throughput 2.0 to improve execution without sacrificing hospitality.
Margin stabilization
Asked: An analyst asked what level of comparable sales is necessary to stabilize margin performance.
Answer: Management stated they need about 1 point of transaction growth to offset the impact of new restaurant openings.
Marketing investment
Asked: An analyst asked about the sustainability of marketing spend levels.
Answer: Management indicated a 3% of sales range is the baseline for marketing, which will flex based on return-generating opportunities.
What to watch before the next call
- The performance of the Smoked Brisket launch in Q4.
- The national rollout of catering in Q1 2027.
- The impact of the throughput 2.0 initiative on operational metrics.
