Summary of Key Points Group 1: Stock Analysis - Apple: The latest iPhone 17 models are considered a bargain, especially with trade-in values and provider incentives [1] - Amazon: Potential for upside if margin expansion continues, particularly in e-commerce and cloud growth [1] - Abbott Laboratories: Valued at approximately 24 times earnings, seen as a high-quality med tech stock worth holding [1] - Broadcom: Recent profit-taking due to exceeding 5% portfolio weighting, but long-term outlook remains positive [1] - Boeing: Newly added to the portfolio, expected to benefit from trade policies and has significant multi-year upside potential [1] - BlackRock: Described as a "bull market stock," with a focus on fast-growing investments [1] - Bristol Myers Squibb: Awaiting results from upcoming studies on its schizophrenia drug, Cobenfy, which could improve sentiment [1] - Capital One: Anticipating share repurchases post-Discover acquisition, with strong management praised [1] - Costco: Long-term outlook remains positive despite recent struggles attributed to market perception [1] - Salesforce: Current levels are not recommended for buying or selling ahead of the Dreamforce conference [1] - CrowdStrike: Ambitious target of $20 billion in annual recurring revenue set, indicating strong management confidence [1] - Cisco Systems: Continued support despite underperformance, with a solid dividend [1] - DuPont: Progressing towards a planned breakup, with Qnity expected to unlock more value [1] - Danaher: Facing headwinds from China but announced a significant buyback [1] - Disney: Shares have stalled, but theme park business remains strong [1] - Dover: Future outlook remains bright despite recent disappointing earnings [1] - Eaton: Potential for increased business from data centers as AI spending rises [1] - GE Vernova: High valuation justified by demand for energy generation in AI infrastructure [1] - Goldman Sachs: Expected revenue growth in investment banking and attractive wealth management business [1] Group 2: Additional Stock Insights - Home Depot: Likely to trim position due to housing market turnaround not meeting expectations [2] - Honeywell International: Shares lagging until split is complete, but value remains [2] - Linde: Continues to deliver for shareholders despite challenging end markets [2] - Eli Lilly: Position maintained due to strong performance and potential game-changing products [2] - Meta Platforms: Dominance in advertising market bolstered by generative AI [2] - Microsoft: Attractive long-term investment, with potential for trimming positions [2] - Nvidia: Partnership with Intel solidifies its leadership in GPUs [2] - Palo Alto Networks: High valuation justified by leadership in cybersecurity [2] - Starbucks: Promising turnaround plan under new CEO [2] - TJX Companies: Strongest earnings performance seen, recognized as a top retail performer [2] - Texas Roadhouse: Stock performance tied to cattle futures, expected surge in share price [2] - Wells Fargo: Positive outlook with increased buybacks and diversification into fee-based businesses [2]

Core Insights - Chipotle Mexican Grill and Texas Roadhouse have experienced stock declines, with Chipotle down approximately 35% year-to-date and Texas Roadhouse down 5% [2] - Despite negative market sentiment, both companies are expanding and maintaining strong brand loyalty [2] Chipotle Mexican Grill - Chipotle's Q2 revenue increased by 3% year-over-year to around $3.1 billion, but comparable restaurant sales fell by 4% due to a 5% decline in transactions [5] - The company opened 61 new restaurants in Q2, with plans for 315 to 345 openings in 2025, primarily featuring Chipotlanes [6] - Chipotle's stock trades at a price-to-earnings multiple of 35, which is higher than many full-service peers, and management has increased buyback authorization by $500 million [7][8] Texas Roadhouse - Texas Roadhouse reported a 12.7% increase in Q2 revenue to about $1.5 billion, with comparable sales rising by 5.8% and earnings per share growing by 4% to $1.86 [9] - The company is experiencing positive traffic across its brands and expects a 5% increase in its total restaurant base for 2025 [10][11] - Texas Roadhouse offers a dividend yield of approximately 1.7%, which adds to its attractiveness [11] Comparative Analysis - Texas Roadhouse shows a more favorable growth profile with rising comparable sales driven by traffic, while Chipotle is guiding for flat comparable sales [13] - The price-to-earnings multiple for Texas Roadhouse is in the mid-20s, significantly lower than Chipotle's mid-30s, making it a more attractive investment at current prices [13] - Both companies are investing in growth, but Texas Roadhouse's disciplined unit growth and positive traffic trends provide a stronger investment case [15]

Group 1 - Texas Roadhouse, Inc. (NASDAQ: TXRH) has experienced a 13% decline in stock price over the past three months, making its valuation increasingly attractive as it approaches target prices [1] - The analyst has nearly two decades of experience in the logistics sector and has been involved in stock investing and macroeconomic analysis for almost a decade, focusing on ASEAN and NYSE/NASDAQ stocks [1] - The analyst's investment strategy includes diversification across various industries and market cap sizes, with holdings in banks, telco, logistics, and hotels [1] Group 2 - The analyst has been trading in the US market for four years and has utilized analyses from Seeking Alpha to compare with the Philippine market [1]

Group 1 - Beef prices are threatening the profitability of steakhouses, leading to a 6% decline in Texas Roadhouse's stock price after earnings report [1] - Texas Roadhouse missed earnings expectations, indicating potential challenges in maintaining margins amidst rising beef costs [1] Group 2 - The focus on sustained profitability is emphasized, highlighting the importance of strong margins, stable free cash flow, and high returns on invested capital as key drivers of investment returns [1]

Market Overview - The stock market experienced significant gains, with the S&P 500 rising 1.6% and the Nasdaq increasing by 2% for the week, driven by speculation on the Federal Reserve's interest rate decision and strong earnings from Oracle [1] - Oracle's fiscal 2026 first quarter report showed a remarkable 359% increase in remaining performance obligations compared to the previous year, leading to a nearly 36% surge in its stock price [1] - The Nasdaq closed at a record high, while the S&P 500 reached new intra-day highs before finishing slightly lower [1] Economic Data - The Producer Price Index (PPI) fell by 0.1% in August, contrary to expectations of a 0.3% increase, boosting investor confidence in a potential interest rate cut [1] - Conversely, the Consumer Price Index (CPI) rose by 0.4% in August, the largest gain since January, which complicated the outlook for policymakers [1] - Weekly jobless claims reached their highest level in almost four years, indicating potential softness in the U.S. labor market [1] Company Highlights - Boeing was a focus for the investment club, with two purchases made during the week, targeting a price of $275 per share, representing a 27% upside from the previous close [1] - Wells Fargo reported a significant increase in share repurchases, totaling $5.5 billion for the quarter, indicating management's positive outlook on capital levels and earnings [1] - GE Vernova's stock declined by 1.5% following mixed remarks from its CEO regarding onshore wind orders and projected revenue declines in 2026 [1][2] Technology Sector - Nvidia and Broadcom shares rose by 4% and 10% respectively, driven by Oracle's strong cloud backlog, indicating continued demand for AI infrastructure [1] - Apple's refreshed iPhone 17 lineup was met with a lukewarm reception, with shares falling 1.5% on the announcement day and 2.3% for the week, as investors sought more substantial updates on the company's AI strategy [2]

Core Viewpoint - Texas Roadhouse Inc (TXRH) is currently ranked in the top 25% of dividend stocks, indicating strong fundamentals and attractive valuation, making it a noteworthy investment opportunity [1]. Group 1: Stock Performance - On Wednesday, TXRH shares traded as low as $164.41, entering oversold territory with a Relative Strength Index (RSI) of 27.0, compared to the average RSI of 52.9 for the dividend stock universe [2]. - The recent annualized dividend for TXRH is $2.72 per share, translating to an annual yield of 1.62% based on the recent share price of $168.12 [2]. Group 2: Investment Considerations - The low RSI reading of 27.0 may suggest that the recent selling pressure is waning, presenting potential buying opportunities for bullish investors [3]. - Investors are encouraged to examine TXRH's dividend history to assess the likelihood of continued dividend payments, as dividends can be unpredictable [3].

Company Performance - Texas Roadhouse (NASDAQ: TXRH) missed earnings estimates for the third time in the past four quarters, indicating a potential decline in performance after a previously strong growth period [1] Investment Strategy - The focus is on investing in companies with strong qualitative attributes, purchasing them at attractive prices based on fundamentals, and holding them long-term. This strategy includes a concentrated portfolio aimed at minimizing losses while maximizing exposure to high-potential winners [2]

Group 1 - The focus is on long-term investment strategies in U.S. and European equities, emphasizing undervalued growth stocks and high-quality dividend growers [1] - Sustained profitability, characterized by strong margins, stable and expanding free cash flow, and high returns on invested capital, is highlighted as a more reliable driver of returns than valuation alone [1] - The investment approach is informed by an interdisciplinary background in Economics, Classical Philology, Philosophy, and Theology, enhancing both quantitative analysis and market narrative interpretation [1] Group 2 - The investor manages a portfolio publicly on eToro, qualifying as a Popular Investor, which allows others to replicate real-time investment decisions [1] - The motivation for investing is to ensure financial freedom for the investor and their children, aiming for a balance where there are enough assets to allow for personal expression in work rather than complete financial independence [1]

PART I. FINANCIAL INFORMATION [Item 1. Financial Statements (Unaudited)](index=3&type=section&id=Item%201%20%E2%80%94%20Financial%20Statements%20(Unaudited)) The unaudited financial statements show revenue growth driven by restaurant sales and strong operational cash flow [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets grew to $3.26 billion, driven by acquisitions, while total equity increased to $1.47 billion Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | July 1, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total Assets** | **$3,255,276** | **$3,190,779** | | Cash and cash equivalents | $176,801 | $245,225 | | Property and equipment, net | $1,714,551 | $1,617,673 | | Goodwill | $229,944 | $169,684 | | **Total Liabilities** | **$1,789,054** | **$1,817,056** | | Deferred revenue-gift cards | $277,293 | $401,198 | | **Total Equity** | **$1,466,222** | **$1,373,723** | [Condensed Consolidated Statements of Income](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income) Q2 2025 revenue increased 12.7% year-over-year to $1.51 billion, with net income growing 3.3% to $124.1 million Q2 2025 vs Q2 2024 Performance (in thousands, except per share data) | Metric | 13 Weeks Ended July 1, 2025 | 13 Weeks Ended June 25, 2024 | % Change | | :--- | :--- | :--- | :--- | | Total Revenue | $1,512,054 | $1,341,202 | 12.7% | | Income from Operations | $146,341 | $142,816 | 2.5% | | Net Income | $124,085 | $120,141 | 3.3% | | Diluted EPS | $1.86 | $1.79 | 3.9% | YTD 2025 vs YTD 2024 Performance (in thousands, except per share data) | Metric | 26 Weeks Ended July 1, 2025 | 26 Weeks Ended June 25, 2024 | % Change | | :--- | :--- | :--- | :--- | | Total Revenue | $2,959,702 | $2,662,419 | 11.2% | | Income from Operations | $281,074 | $275,944 | 1.9% | | Net Income | $237,747 | $233,347 | 1.9% | | Diluted EPS | $3.57 | $3.48 | 2.6% | [Condensed Consolidated Statements of Stockholders' Equity](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity) Total equity increased to $1.47 billion, driven by net income and partially offset by dividends and share repurchases Equity Roll-Forward for 26 Weeks Ended July 1, 2025 (in thousands) | Description | Amount | | :--- | :--- | | Balance, December 31, 2024 | $1,373,723 | | Net Income | $242,752 | | Dividends Declared | ($90,292) | | Repurchase of common stock | ($60,174) | | Share-based compensation | $23,249 | | **Balance, July 1, 2025** | **$1,466,222** | [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) The company generated $366.0 million in operating cash flow, funding significant investing and financing activities Cash Flow Summary for 26 Weeks Ended (in thousands) | Cash Flow Activity | July 1, 2025 | June 25, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $365,980 | $377,347 | | Net cash used in investing activities | ($259,527) | ($146,155) | | Net cash used in financing activities | ($174,877) | ($137,984) | | **Net (decrease) increase in cash** | **($68,424)** | **$93,208** | [Notes to Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Key disclosures include franchise acquisitions, a new credit facility, a stock repurchase program, and segment margin details - As of July 1, 2025, the company owned and operated **695 restaurants** and franchised an additional **102 restaurants** across three concepts: Texas Roadhouse, Bubba's 33, and Jaggers[20](index=20&type=chunk) - On April 24, 2025, the company entered into a new unsecured revolving credit facility with a borrowing capacity of up to **$450.0 million**, maturing in 2030, with no outstanding borrowings as of July 1, 2025[28](index=28&type=chunk)[29](index=29&type=chunk)[31](index=31&type=chunk) - During the first 26 weeks of 2025, the company acquired **17 domestic franchise Texas Roadhouse restaurants** for a total purchase price of **$93.9 million**, resulting in **$60.3 million of goodwill**[40](index=40&type=chunk)[42](index=42&type=chunk) - A new stock repurchase program of up to **$500.0 million** was approved on February 19, 2025, and the company repurchased **$60.0 million** of its common stock in the first 26 weeks of 2025[49](index=49&type=chunk)[52](index=52&type=chunk) Segment Restaurant Margin (% of segment sales) | Segment | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | :--- | :--- | | Texas Roadhouse | 17.1% | 18.3% | 16.9% | 17.8% | | Bubba's 33 | 16.7% | 17.1% | 16.4% | 17.2% | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=21&type=section&id=Item%202%20%E2%80%94%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes revenue growth to increased store weeks and comparable sales, despite margin pressure from inflation [Results of Operations](index=28&type=section&id=Results%20of%20Operations) Q2 2025 revenue growth was driven by increased guest traffic, though profitability was impacted by rising food and labor costs Key Performance Drivers - Q2 2025 vs Q2 2024 | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Increase in store weeks | 7.2% | 5.6% | | Comparable restaurant sales | 5.8% | 9.3% | | Guest traffic counts | 4.0% | 4.5% | | Per person average check | 1.8% | 4.8% | - Food and beverage costs rose as a percentage of sales due to **5.2% commodity inflation** in Q2 2025, primarily from higher beef costs[93](index=93&type=chunk) - Restaurant labor expenses increased as a percentage of sales due to **3.8% wage and other labor inflation** in Q2 2025[95](index=95&type=chunk) - For the full year 2025, the company expects commodity inflation of approximately **5%** and wage/labor inflation of approximately **4%**[94](index=94&type=chunk)[96](index=96&type=chunk) [Liquidity and Capital Resources](index=38&type=section&id=Liquidity%20and%20Capital%20Resources) Strong operating cash flow supports capital allocation for new stores, acquisitions, and shareholder returns YTD 2025 Capital Allocation (in millions) | Activity | Amount | | :--- | :--- | | Capital Expenditures | $169.9 | | Acquisitions of franchise restaurants | $93.9 | | Dividends paid | $90.3 | | Repurchase of common stock | $60.0 | - The company expects total capital expenditures of approximately **$400 million** for fiscal year 2025[119](index=119&type=chunk) - A new **$450 million** revolving credit facility was established in April 2025, with **$446.8 million** available as of July 1, 2025[125](index=125&type=chunk)[126](index=126&type=chunk)[127](index=127&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=42&type=section&id=Item%203%20%E2%80%94%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company reports no material changes in market risk exposures from its 2024 Annual Report - There have been **no material changes** in market risk from the disclosures in the 2024 Form 10-K[130](index=130&type=chunk) [Item 4. Controls and Procedures](index=42&type=section&id=Item%204%20%E2%80%94%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective with no material changes to internal controls - Management concluded that **disclosure controls and procedures were effective** as of July 1, 2025[131](index=131&type=chunk) - **No material changes** in internal control over financial reporting occurred during the 13 weeks ended July 1, 2025[132](index=132&type=chunk) PART II. OTHER INFORMATION [Item 1. Legal Proceedings](index=43&type=section&id=Item%201%20%E2%80%94%20Legal%20Proceedings) The company is not involved in any litigation expected to have a material adverse effect on its business - The company is not party to any litigation that it believes could have a **material adverse effect** on its business[38](index=38&type=chunk)[135](index=135&type=chunk) [Item 1A. Risk Factors](index=43&type=section&id=Item%201A%20%E2%80%94%20Risk%20Factors) No material changes from the risk factors disclosed in the 2024 Annual Report on Form 10-K are reported - **No material changes** have occurred regarding the risk factors disclosed in the 2024 Form 10-K[136](index=136&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=43&type=section&id=Item%202%20%E2%80%94%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company repurchased $9.8 million in common stock in Q2 2025, with $470.0 million remaining under its new authorization Share Repurchases for the 13 Weeks Ended July 1, 2025 | Period | Total Shares Purchased | Average Price Paid per Share | Remaining Authorization | | :--- | :--- | :--- | :--- | | April 2 to July 1 | 61,698 | $159.69 | $470.0 million | [Item 5. Other Information](index=44&type=section&id=Item%205%20%E2%80%94%20Other%20Information) No executive officer or director adopted, modified, or terminated a Rule 10b5-1 trading plan during the quarter - No executive officer or director adopted, modified, or terminated a **Rule 10b5-1 trading arrangement** during the quarter[142](index=142&type=chunk) [Item 6. Exhibits](index=44&type=section&id=Item%206%20%E2%80%94%20Exhibits) This section lists exhibits filed with the Form 10-Q, including a new credit agreement and required certifications - Key exhibits filed include: * 10.1: Credit Agreement, dated April 24, 2025 * 31.1 & 31.2: Certifications pursuant to Section 302 of the Sarbanes-Oxley Act * 32.1: Certifications pursuant to Section 906 of the Sarbanes-Oxley Act[143](index=143&type=chunk)

Core Viewpoint - Texas Roadhouse reported quarterly earnings of $1.86 per share, missing the Zacks Consensus Estimate of $1.95 per share, representing an earnings surprise of -4.62% [1][2] Financial Performance - The company posted revenues of $1.51 billion for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 0.55%, compared to year-ago revenues of $1.34 billion [2] - Over the last four quarters, Texas Roadhouse has surpassed consensus revenue estimates three times [2] Stock Performance - Texas Roadhouse shares have increased by approximately 2.2% since the beginning of the year, while the S&P 500 has gained 7.9% [3] - The current status translates into a Zacks Rank 3 (Hold) for the stock, indicating expected performance in line with the market in the near future [6] Earnings Outlook - The current consensus EPS estimate for the coming quarter is $1.44 on revenues of $1.43 billion, and for the current fiscal year, it is $6.80 on revenues of $5.87 billion [7] - The estimate revisions trend for Texas Roadhouse was mixed ahead of the earnings release, which could change following the recent report [6] Industry Context - The Retail - Restaurants industry is currently in the bottom 31% of over 250 Zacks industries, indicating potential challenges for stock performance [8]