The quarter cleared the standing earnings bar by a wide margin. Adjusted diluted EPS of $0.39 was above the published Q2 consensus of roughly $0.28–$0.30; even GAAP diluted EPS from continuing operations was $0.37. Revenue, however, was essentially in line with the roughly $1.00–$1.02 billion expectation rather than a major sales surprise. The upside was therefore principally better profitability, not a breakout in total sales.
| Metric | Q2 2026 | Q2 2025 | Expectation / comparison |
|---|---|---|---|
| Total revenue | $1.016B | $1.002B | Roughly in line with published ~$1.00–$1.02B consensus (Financial Highlights; Table One) |
| Adjusted diluted EPS, continuing operations | $0.39 | $0.32 | Above published ~$0.28–$0.30 consensus (Table Six) |
| GAAP diluted EPS, continuing operations | $0.37 | $0.29 | Up $0.08 year over year (Table One) |
| U.S. comparable sales | +2.3% | -0.1% | Above the prior full-year midpoint of +1.5% (Table Eight; Fiscal 2026 Outlook) |
| Restaurant-level operating margin | 12.4% | 12.0% | +40 basis points (Financial Highlights; Table Four) |
| Full-year adjusted EPS outlook | $0.90–$1.00 | Prior: $0.75–$0.90 | Midpoint rises $0.125, above the prior published ~$0.83 consensus (Fiscal 2026 Outlook) |
| Q3 adjusted EPS outlook | $(0.27)–$(0.22) | — | A planned seasonal loss (Q3 2026 Outlook) |
The guidance increase is the more important change in expectations. Management lifted its full-year adjusted EPS range by $0.15 at both ends, taking the midpoint to $0.95 from $0.825. That is not merely a reaffirmation of the turnaround case: it resets the year’s expected profitability materially higher and exceeds the prior published full-year consensus near $0.83 (Fiscal 2026 Outlook).
Sales improved, but the recovery is still pricing-led rather than traffic-led. Combined U.S. comparable sales rose 2.3%, with every major brand positive and Bonefish up 8.1%. Yet total U.S. traffic still fell 1.9%, while average check per person rose 4.2%. In plain terms, customers spent more per visit, but the company still served fewer guests overall; that keeps the underlying demand picture less robust than the headline sales number suggests (Table Eight).
Margin progress was real, though not all of it came from restaurants. Restaurant-level margin expanded 40 basis points to 12.4%, supported by pricing, productivity and lower pre-opening and health-insurance costs. Consolidated adjusted operating margin rose 50 basis points to 4.0%, while lower corporate expense also helped offset a slight decline in U.S. segment operating income before adjustments. The earnings beat is therefore credible, but it reflects cost execution as much as volume growth (Financial Highlights; Tables Two, Four and Five).
The near-term cadence remains uneven. The company’s Q3 outlook calls for an adjusted loss of $0.22–$0.27 per share, so the raised full-year target does not imply a straight-line improvement each quarter. Net, the filing is strongly better than the market’s pre-report earnings and full-year expectations, while negative traffic and the expected Q3 loss remain the key limits on how broad the operating recovery is.
Read the original 8-K on SEC EDGAR ↗