We're exiting our position in this restaurant stock — here's why

CNBC Finance

2 min read

Shortly after the opening bell, we will exit our position in Texas Roadhouse , selling our remaining 200 shares at roughly $188. Shares of restaurant chain Texas Roadhouse are higher in premarket trading after reporting fourth-quarter results Thursday evening. The quarter was disappointing, resulting in a triple miss, as revenue, comparable restaurant sales, and earnings per share all fell short of the consensus analyst estimates. Usually, a miss of this size is punished by the market, but the stock is rallying on Friday after significant comp sales acceleration from 2.2% in December to 8.2% through the first seven weeks of the first quarter of 2026. TXRH 1Y mountain Texas Roadhouse 1-year return The market is cheering this traffic-driven momentum, but we see limited upside from current levels due to stubbornly high beef inflation, which continues to pressure margins and earnings leverage. Management's reiteration of 7% commodity inflation in 2026 was a sigh of relief, but markets typically look ahead 12 to 16 months, which means we are a few months away from focusing on 2027 numbers. Due to low cattle supplies, we don't have much conviction that beef prices will flip from a headwind to a tailwind next year, challenging the case that forward earnings estimates will increase. Given this discouraging outlook for next year, we are capitalizing on Friday's strength and selling the remainder of our position. Based on the current premarket price, we will realize an average gain of about 12% on our remaining shares purchased throughout 2025. (See here for a full list of the stocks in Jim Cramer's Charitable Trust.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust's portfolio. If Jim has discussed a stock on CNBC, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.

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We're exiting our position in this restaurant stock — here's why

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