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Texas Roadhouse Seen as Inflation-Resistant by Jim Cramer

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  Published in Stocks and Investing on Tuesday, February 10th 2026 at 12:47 GMT by CNBC
      Locales: Texas, Florida, California, UNITED STATES

February 10th, 2026 - The restaurant industry continues to grapple with persistent inflationary pressures, particularly regarding the cost of beef. Despite wholesale prices averaging over $300 per pound - a figure reported by the USDA - CNBC's Jim Cramer remains optimistic about Texas Roadhouse (TXRH) stock, explaining his rationale in a television interview earlier today. While acknowledging the "sticky situation" presented by high beef costs, Cramer believes Texas Roadhouse possesses unique characteristics that position it to weather the storm better than its competitors.

This isn't simply a matter of blind faith. The current beef price surge stems from a confluence of factors including reduced cattle herds following years of drought conditions, increased feed costs, and robust demand both domestically and internationally. These pressures have significantly squeezed the margins of restaurants heavily reliant on beef, forcing many to either absorb the costs - impacting profitability - or pass them on to consumers, risking decreased foot traffic.

However, Cramer's analysis points to Texas Roadhouse's remarkable ability to navigate this delicate balancing act. The key, he argues, lies in the company's strong value proposition. Texas Roadhouse isn't positioned as a fine-dining establishment, but rather a casual dining experience offering generous portions and a consistently enjoyable atmosphere. This allows them a degree of pricing power most restaurants lack. Customers are willing to accept modest price increases without drastically altering their dining habits, a crucial advantage in the current economic climate.

"They can raise prices and people still come," Cramer stated. "I don't see that happening at a lot of other places." This observation isn't anecdotal. Recent reports indicate Texas Roadhouse has successfully implemented price adjustments across its menu without witnessing a substantial decline in customer visits. This is a testament to the perceived value offered - a combination of food quality, quantity, and ambiance - that keeps diners returning.

Beyond pricing strategy, Cramer highlighted the significance of Texas Roadhouse's real estate portfolio. Unlike many restaurant chains that lease their locations, Texas Roadhouse owns a substantial portion of its restaurants. This ownership model provides a significant degree of cost control, shielding the company from escalating rental costs that further contribute to inflationary pressures. Owning the land and building allows Texas Roadhouse to build equity and potentially benefit from property value appreciation, a long-term advantage few competitors enjoy.

Shares of Texas Roadhouse closed at $138.05 today, experiencing a slight dip of 0.48%, however, Cramer's commentary suggests a long-term positive outlook. This minor fluctuation is likely attributable to broader market volatility and doesn't negate the underlying strength of the company.

Industry-Wide Concerns and the Future of Restaurant Stocks

Cramer's comments arrive at a critical juncture for the restaurant industry. Investor anxiety surrounding inflation's impact on restaurant stocks remains high. Many chains are actively exploring alternative strategies to mitigate rising food costs, including menu rationalization (reducing the number of items offered), shrinking portion sizes, and sourcing cheaper ingredients. While these tactics may offer short-term relief, they risk compromising the customer experience and ultimately impacting brand loyalty.

Several analysts predict a period of consolidation within the restaurant sector, with weaker players struggling to adapt to the new economic realities. Chains lacking strong brands, efficient operations, and the ability to maintain customer value are expected to face significant challenges.

Looking ahead, the trajectory of beef prices will undoubtedly remain a key factor influencing the performance of restaurant stocks. However, companies like Texas Roadhouse, which demonstrate a combination of pricing flexibility, operational efficiency, and a solid real estate foundation, are well-positioned to outperform their peers. The ability to effectively manage costs, deliver value to customers, and adapt to changing market conditions will be paramount for success in the coming years.