Texas Roadhouse is winning the steakhouse rodeo

Turns out it’s not always better in the Outback. Texas Roadhouse is handily beating Outback Steakhouse in the barrel race to win American hearts and dollars.

Restaurant sales at Texas Roadhouse — a steakhouse chain (perplexingly) based in Kentucky — rose 10% (pdf) in the fourth quarter of 2023. Meanwhile, they fell at Outback Steakhouse — the Australian-themed restaurant company (more perplexingly) headquartered in Florida.

Eating out has steadily gotten more expensive for Americans over the past two years as inflation surged — much more so than buying groceries to cook at home. Food inflation in the U.S. is disproportionately driven by “food away from home” prices (up 5% in January) compared to “food at home” prices (up 1.2%).

Another issue for steakhouses in particular: an ongoing cattle supply shortage, which has caused U.S. beef prices to soar.

But even so, Texas Roadhouse has continued to draw more customers, with foot traffic at its restaurants increasing year-over-year in every quarter of 2023. At the same time, customer visits to Outback Steakhouse have fallen.

Texas Roadhouse CFO Chris Monroe was gleeful about the chain’s nimble performance. “Our restaurants are the busiest they’ve ever been,” he said on a call with investors Feb. 15.

The customer favoritism is widening a gap in stock performance, too. While Texas Roadhouse shares have increased 25% from January to record prices around $150, shares of Outback’s parent company Bloomin’ Brands have stayed around $27.

But Bloomin’ Brands doesn’t see itself getting bucked out of the market. The company told investors Friday that it still sees Outback outperforming the restaurant industry as a whole. The company said it’s looking to ramp up marketing and offer better deals to bring back customers turned off by higher prices. “We’re also potentially looking at some high quality menu items that may be a little bit lower price that we would introduce on the menu to help offset some of the pricing perceptions at Outback,” said an executive.