Core Viewpoint - The article expresses a bullish sentiment on full-service restaurants following a market selloff, indicating potential investment opportunities in this sector [1]. Group 1 - The article references a previous publication that highlighted two full-service restaurants as attractive investment options after the S&P 500 experienced a decline on August 5th of the previous year [1].

LOUISVILLE, Ky., June 10, 2025 (GLOBE NEWSWIRE) -- Texas Roadhouse, Inc. (NasdaqGS: TXRH), announced today that Chief Financial Officer Chris Monroe is no longer with the Company. Mr. Monroe was hired by the Company on June 28, 2023. “We appreciate Chris’ nearly two years of service and wish he and his family the best as they transition back to Texas,” said Chief Executive Officer Jerry Morgan. The Company’s Board of Directors has appointed Keith Humpich, Vice President of Finance, as interim CFO until a pe ...

Group 1 - The earnings season has been influenced more by geopolitical news than by the actual financial reports of companies [1] - The focus is on long-term growth and dividend growth investing, with an emphasis on finding undervalued stocks and high-quality dividend-growing companies [1] - Profitability is highlighted as a safer driver of gains compared to low valuation, with a focus on margins, free cash flow stability and growth, and returns on invested capital [1]

Core Viewpoint - Texas Roadhouse (NASDAQ: TXRH) is a restaurant chain that has consistently demonstrated long-term growth and dividend growth potential, despite being overshadowed by the hype surrounding AI companies [1]. Group 1: Company Performance - The company focuses on profitability as a key driver of gains, emphasizing the importance of margins, free cash flow stability and growth, and returns on invested capital [1]. - Texas Roadhouse is recognized for its ability to provide cash for reinvestment, indicating a strong financial position [1]. Group 2: Investment Strategy - The investment strategy involves seeking undervalued stocks and high-quality dividend-growing companies, which aligns with Texas Roadhouse's profile as a solid investment opportunity [1].

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended April 1, 2025 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number 000-50972 (State or other jurisdiction of (IRS Employer incorporation or organization) Identification Number) 6040 Dutchmans L ...

Group 1 - Texas Roadhouse reported $1.45 billion in revenue for the quarter ended March 2025, a year-over-year increase of 9.6% [1] - The EPS for the same period was $1.70, slightly up from $1.69 a year ago, but below the consensus estimate of $1.75, resulting in an EPS surprise of -2.86% [1] - The reported revenue exceeded the Zacks Consensus Estimate of $1.44 billion, indicating a surprise of +0.53% [1] Group 2 - Comparable restaurant sales growth for company restaurants was 3.5%, surpassing the nine-analyst average estimate of 3.2% [4] - The total number of company restaurants at the end of the period was 688, slightly above the six-analyst average estimate of 684 [4] - Franchise royalties and fees revenue was reported at $7.31 million, below the average estimate of $8.42 million, but represented a year-over-year change of +3.4% [4] Group 3 - Texas Roadhouse shares returned +3.2% over the past month, compared to the Zacks S&P 500 composite's +11.3% change [3] - The stock currently holds a Zacks Rank 3 (Hold), suggesting it may perform in line with the broader market in the near term [3]

Company Performance - Texas Roadhouse reported quarterly earnings of $1.70 per share, missing the Zacks Consensus Estimate of $1.75 per share, representing an earnings surprise of -2.86% [1] - The company posted revenues of $1.45 billion for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 0.53%, compared to year-ago revenues of $1.32 billion [2] - Over the last four quarters, Texas Roadhouse has surpassed consensus EPS estimates two times and topped consensus revenue estimates three times [2] Stock Movement and Outlook - Texas Roadhouse shares have lost about 5.1% since the beginning of the year, while the S&P 500 has declined by -4.3% [3] - The company's earnings outlook will be crucial for future stock performance, with current consensus EPS estimates at $1.95 for the coming quarter and $6.93 for the current fiscal year [4][7] - The current Zacks Rank for Texas Roadhouse is 3 (Hold), indicating expected performance in line with the market in the near future [6] Industry Context - The Retail - Restaurants industry, to which Texas Roadhouse belongs, is currently in the bottom 22% of over 250 Zacks industries, which may impact stock performance [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, suggesting that industry outlook can materially affect stock performance [5][8]

Financial Data and Key Metrics Changes - For the first quarter, the company generated over $1.4 billion in revenue, with a same-store sales increase of 3.5% and positive traffic growth [7][21] - Revenue growth was reported at 9.6%, driven by a 2.4% increase in average unit volume and 7.1% store week growth [21] - Diluted earnings per share increased by 1% to $1.7, while restaurant margin dollars increased by 4.7% to $239 million [21][22] Business Line Data and Key Metrics Changes - Weekly sales averaged $167,000 at Texas Roadhouse, $123,000 at Bubba's 33, and $71,000 at Jaggers, all showing positive same-store sales and traffic growth [15] - Average weekly sales for the first quarter were over $163,000, with To Go sales representing approximately 13.6% of total weekly sales [21] Market Data and Key Metrics Changes - The company opened eight company-owned restaurants in the first quarter, with plans to open approximately 30 company-owned restaurants this year [9][10] - Franchise openings are expected to include five international Texas Roadhouses and two domestic Jaggers [10] Company Strategy and Development Direction - The company aims to focus on delivering legendary food and service while navigating external economic factors [8] - Technology initiatives are progressing, with 65% of restaurants using a digital kitchen and 70% having upgraded guest management systems [11][12] - The company is committed to maintaining its pricing strategy, which is below inflation levels for both commodities and labor [32][35] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the current operating environment, citing strong demand for the brand and positive sales trends [8][15] - The company anticipates a full-year commodity inflation of approximately 4%, influenced by updated expectations for beef costs and tariffs [19][95] Other Important Information - The company celebrated the success of its operators at the annual Managing Partner Conference, emphasizing the importance of community engagement [26] - The company is focusing on improving the guest experience through new beverage menus tailored to regional preferences [12] Q&A Session Summary Question: Pricing strategy in relation to inflation - The company confirmed a 3.1% price increase in the first quarter, which is expected to drop to 2.3% in the following quarters, indicating pricing below inflation [32][34] Question: Labor leverage and hours - Labor hours grew at approximately 35% of comparable traffic growth, maintaining productivity despite challenges [40][41] Question: Restaurant margin performance - Management acknowledged a slight decline in restaurant profit dollars per week and emphasized the importance of monitoring this metric throughout the year [45][47] Question: To Go sales performance - The company noted improvements in To Go sales due to operational enhancements and better packaging, with margins being neutral to slightly positive [101][103] Question: Commodity inflation outlook - The company expects commodity inflation to remain under pressure, with specific guidance of approximately 4% for the full year [19][95] Question: Franchise acquisitions - The company maintains an active dialogue with franchisees regarding potential acquisitions but has no imminent plans beyond those already disclosed [140][142]

Financial Data and Key Metrics Changes - For the first quarter, the company reported revenue of over $1.4 billion, representing a 9.6% increase year-over-year, driven by a 2.4% increase in average unit volume and 7.1% store week growth [19][5] - The diluted earnings per share increased by 1% to $1.7, while restaurant margin dollars increased by 4.7% to $239 million [19][20] - Cash flow from operations was $238 million, with $221 million in cash at the end of the quarter [18] Business Line Data and Key Metrics Changes - Average weekly sales were $167,000 at Texas Roadhouse, $123,000 at Bubba's 33, and $71,000 at Jaggers, all showing positive same-store sales and traffic growth [13] - Same-store sales increased by 3.5% in the first quarter, with traffic growth of 1.1% and a 2.4% increase in average check [19] Market Data and Key Metrics Changes - The company opened eight company-owned restaurants in the first quarter, with plans to open approximately 30 company-owned restaurants this year [6][7] - Franchise openings are expected to include five international Texas Roadhouses and two domestic Jaggers [7] Company Strategy and Development Direction - The company aims to focus on delivering legendary food and service while navigating external economic factors [5] - The management emphasized the importance of maintaining operational excellence and community engagement as part of their long-term growth strategy [23] Management Comments on Operating Environment and Future Outlook - Management expressed confidence in the current demand for their brands, despite external challenges such as tariffs and inflation [5][14] - The company anticipates a full-year commodity inflation of approximately 4%, influenced by updated expectations for beef costs and tariffs [16][89] Other Important Information - The company is implementing technology upgrades, with 65% of restaurants using a digital kitchen and 70% having a new guest management system [9][10] - The company celebrated the achievements of its top operators during the annual Managing Partner Conference, reinforcing its commitment to operational excellence [2][11] Q&A Session Summary Question: Pricing strategy in relation to inflation - Management confirmed a 3.1% price increase in Q1, which is expected to drop to 2.3% in the following quarters, indicating they are pricing below inflation [29][30] Question: Labor leverage and hours - Management clarified that labor hours grew at 35% of traffic growth, maintaining productivity despite challenges [37][38] Question: Restaurant margin performance - Management acknowledged a slight decline in restaurant profit dollars per week and emphasized the importance of monitoring this metric throughout the year [42][44] Question: Consumer behavior and sales trends - Management attributed sales fluctuations to weather conditions and noted a strong rebound in March, April, and May [68][69] Question: Franchise acquisitions and future plans - Management stated there are no immediate plans for further franchise roll-ups but maintains active dialogue with existing franchisees [135][137] Question: Bar menu relaunch and profitability - Management indicated that the bar menu changes were driven by consumer demand and are expected to enhance profitability [141][144]

[First Quarter 2025 Earnings Release](index=1&type=section&id=First%20Quarter%202025%20Earnings%20Release) [Financial Highlights (Q1 2025)](index=1&type=section&id=Financial%20Results) Q1 2025 saw Texas Roadhouse's revenue grow 9.6% to $1.45 billion, but net income and EPS growth were minimal due to rising costs and a 77 basis point decline in restaurant margin Q1 2025 Financial Performance vs. Q1 2024 ($000's, except per share amounts) | ($000's, except per share amounts) | April 1, 2025 | March 26, 2024 | % change | | :--- | :--- | :--- | :--- | | **Total revenue** | $1,447,648 | $1,321,217 | 9.6% | | **Income from operations** | $134,733 | $133,128 | 1.2% | | **Net income** | $113,662 | $113,206 | 0.4% | | **Diluted earnings per share** | $1.70 | $1.69 | 1.0% | - Comparable restaurant sales at company-owned restaurants increased by **3.5%** year-over-year[2](index=2&type=chunk) - Restaurant margin decreased to **16.6%** from **17.4%** in the prior year, driven by commodity inflation of **2.1%** and wage and other labor inflation of **4.6%**, which were not fully offset by higher sales[2](index=2&type=chunk) - Key capital allocation activities in Q1 2025 included **$77.4 million** in capital expenditures, **$78.3 million** in franchise acquisitions, **$45.2 million** in dividends, and **$50.2 million** in common stock repurchases[2](index=2&type=chunk) [CEO Commentary](index=2&type=section&id=CEO%20Commentary) CEO Jerry Morgan highlighted the company's success in achieving traffic growth across all three brands despite economic challenges, reaffirming focus on business fundamentals, new store development including the 50th Bubba's 33, and a consistent capital allocation strategy - The company successfully navigated challenges to deliver traffic growth across all three brands, maintaining focus on core business fundamentals[3](index=3&type=chunk) - The company continues its growth through new store development, highlighted by the opening of the **50th Bubba's 33** restaurant[3](index=3&type=chunk) - Management is committed to its capital allocation strategy, using operating cash flow to fund new development, maintain existing restaurants, acquire franchises, and return capital to shareholders via dividends and buybacks[3](index=3&type=chunk) [2025 Outlook and Dividend](index=2&type=section&id=2025%20Outlook%20and%20Dividend) The company observed a 5.0% increase in comparable restaurant sales for early Q2 2025, implemented a 1.4% menu price increase, updated its 2025 outlook for commodity cost inflation to approximately 4%, and declared a quarterly cash dividend of $0.68 per share - Comparable restaurant sales at company restaurants increased **5.0%** for the first five weeks of Q2 2025[4](index=4&type=chunk) - A menu price increase of approximately **1.4%** was implemented in early April 2025[4](index=4&type=chunk) Updated & Reiterated 2025 Outlook | Expectation | 2025 Forecast | | :--- | :--- | | **Commodity cost inflation (Updated)** | **~4.0%** | | Comparable restaurant sales | Positive growth | | Store week growth | ~5% | | Wage and other labor inflation | 4% to 5% | | Effective income tax rate | 15% to 16% | | Total capital expenditures | ~$400 million | - A quarterly cash dividend of **$0.68 per share** was approved, payable on July 1, 2025, to shareholders of record on June 3, 2025[5](index=5&type=chunk) [Financial Statements and Supplemental Data](index=4&type=section&id=Financial%20Statements%20and%20Supplemental%20Data) [Condensed Consolidated Statements of Income](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income) For Q1 2025, total revenues increased to $1.45 billion from $1.32 billion, driven by a 9.6% rise in restaurant sales, but income from operations and net income saw only marginal increases due to rising operating costs Q1 2025 Statement of Income (in thousands) | Line Item | Q1 2025 (13 wks) | Q1 2024 (13 wks) | | :--- | :--- | :--- | | **Total revenue** | **$1,447,648** | **$1,321,217** | | Restaurant and other sales | $1,440,342 | $1,314,152 | | Food and beverage costs | $490,991 | $445,091 | | Labor costs | $479,975 | $427,547 | | **Income from operations** | **$134,733** | **$133,128** | | **Net income attributable to TXRH** | **$113,662** | **$113,206** | | **Diluted EPS** | **$1.70** | **$1.69** | [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of April 1, 2025, total assets remained stable at $3.191 billion, with cash and cash equivalents decreasing to $221.1 million, while goodwill significantly increased to $218.9 million primarily due to franchise acquisitions Balance Sheet Highlights (in thousands) | Account | April 1, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $221,085 | $245,225 | | Property and equipment, net | $1,662,825 | $1,617,673 | | Goodwill | $218,921 | $169,684 | | **Total assets** | **$3,191,133** | **$3,190,779** | | Current liabilities | $751,966 | $828,130 | | **Total liabilities and equity** | **$3,191,133** | **$3,190,779** | [Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) In Q1 2025, cash from operations slightly decreased to $237.7 million, while cash used in investing activities significantly increased to $155.6 million due to franchise acquisitions, and financing activities used $106.3 million for share repurchases and dividends, resulting in a net cash decrease of $24.1 million Cash Flow Summary (in thousands) | Cash Flow Activity | Q1 2025 (13 wks) | Q1 2024 (13 wks) | | :--- | :--- | :--- | | **Net cash provided by operating activities** | **$237,740** | **$243,439** | | Net cash used in investing activities | ($155,557) | ($74,692) | | *Acquisitions of franchise restaurants* | *($78,297)* | *—* | | Net cash used in financing activities | ($106,323) | ($59,565) | | *Repurchase of shares of common stock* | *($50,151)* | *($8,941)* | | **Net (decrease) increase in cash** | **($24,140)** | **$109,182** | [Supplemental Financial and Operating Information](index=8&type=section&id=Supplemental%20Financial%20and%20Operating%20Information) Company-wide comparable restaurant sales grew 3.5%, with Texas Roadhouse and Bubba's 33 showing similar growth, while restaurant margin percentage declined by 77 basis points to 16.6% despite a 4.7% increase in margin dollars, due to higher food and labor costs as a percentage of sales Q1 2025 vs Q1 2024 Operating Metrics (All Company Restaurants) | Metric | Q1 2025 | Q1 2024 | Change | | :--- | :--- | :--- | :--- | | Comparable restaurant sales | 3.5% | 8.4% | N/A | | Restaurant margin % | 16.6% | 17.4% | (77) bps | | Food and beverage costs (% sales) | 34.1% | 33.9% | (22) bps | | Labor (% sales) | 33.3% | 32.5% | (79) bps | Comparable Restaurant Sales by Brand | Brand | Q1 2025 Comp Sales | Q1 2024 Comp Sales | | :--- | :--- | :--- | | Texas Roadhouse | 3.5% | 8.7% | | Bubba's 33 | 3.9% | 3.5% | [Restaurant Unit Activity](index=9&type=section&id=Restaurant%20Unit%20Activity) During Q1 2025, the company opened 8 new restaurants and acquired 14 franchise locations, resulting in a net increase of 44 company-owned restaurants year-over-year, bringing the total system-wide count to 792 Q1 2025 Unit Activity | Activity | Count | | :--- | :--- | | Company Restaurant Openings | 8 | | Franchise Restaurant Acquisitions | 14 | Total Restaurants at Quarter End | Category | April 1, 2025 | March 26, 2024 | | :--- | :--- | :--- | | Total company restaurants | 688 | 644 | | Total franchise restaurants | 104 | 109 | | **Total system-wide restaurants** | **792** | **753** | [Other Information](index=2&type=section&id=Other%20Information) [Non-GAAP Measures](index=2&type=section&id=Non-GAAP%20Measures) The company uses 'restaurant margin' as a non-GAAP measure to assess core restaurant-level operational efficiency, which was $239.3 million or 16.6% of sales in Q1 2025, down from 17.4% in the prior year - The company defines restaurant margin as restaurant sales less restaurant-level operating costs (food, beverage, labor, rent, other operating), used to evaluate core restaurant-level operating efficiency and excluding G&A, pre-opening, depreciation, and impairment costs[6](index=6&type=chunk) Reconciliation of Income from Operations to Restaurant Margin ($ in thousands) | | April 1, 2025 | March 26, 2024 | | :--- | :--- | :--- | | **Income from operations** | **$134,733** | **$133,128** | | Less: Royalties and franchise fees | 7,306 | 7,065 | | Add: Pre-opening | 6,812 | 8,095 | | Add: Depreciation and amortization | 48,800 | 41,493 | | Add: Impairment and closure, net | 28 | 201 | | Add: General and administrative | 56,217 | 52,595 | | **Restaurant margin** | **$239,284** | **$228,447** | | Restaurant margin (% of sales) | 16.6% | 17.4% |