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]

Financial Data and Key Metrics Changes - The company reported a revenue growth of 12.7%, driven by a 5.3% increase in average weekly sales and a 7.2% store week growth [20] - Diluted earnings per share increased by 4% to $1.86 [20] - Restaurant margin dollars increased by 6.1% to $257 million, while restaurant margin as a percentage of total sales decreased by 108 basis points year over year to 17.1% [21][22] Business Line Data and Key Metrics Changes - Texas Roadhouse averaged approximately $172,000 in weekly sales, while Bubba's 33 averaged over $128,000 in weekly sales [9] - Jaggers delivered average weekly sales of nearly $76,000 in the second quarter [10] - The company plans to open as many as eight company and franchise locations next year for Jaggers and Bubba's 33 [10][12] Market Data and Key Metrics Changes - Comparable sales increased by 5.8% in the second quarter, driven by 4% traffic growth and a 1.8% increase in average check [20] - Comparable sales for the first five weeks of the third quarter were up 5.3% [21] Company Strategy and Development Direction - The company is focused on a growth strategy that includes opening approximately 30 company-owned restaurants this year and acquiring additional franchise locations [12][18] - The company plans to take a menu price increase of approximately 1.7% at the beginning of the fourth quarter to offset inflationary pressures [11] - The company remains committed to its community and plans to purchase its support center buildings, reflecting a long-term commitment to Louisville, Kentucky [13] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strength of operations and the commitment of the team, despite challenges in the operating environment [14] - The company has increased its guidance for full-year inflation to approximately 5%, primarily due to higher beef inflation [16] - Management remains optimistic about the growth potential of Bubba's 33 and Jaggers, with plans for double-digit openings next year [10][43] Other Important Information - The company ended the second quarter with $177 million in cash, with cash flow from operations at $128 million [17] - The company is maintaining its full-year capital expenditure guidance at approximately $400 million [18] Q&A Session Summary Question: Insights on inflation dynamics - Management noted that strong retail demand for beef and tighter supply have driven inflation, with expectations of 7% commodity inflation in Q3 [26][29] Question: Mix effect and consumer behavior - Negative mix pressure is primarily from the alcohol category, while positive trends are seen in entrees and mocktails [33][36] Question: Inflation outlook for Q3 and Q4 - Management expects inflation to be highest in Q3, around 7%, and to decrease to 4-5% in Q4 [41][42] Question: Growth opportunities in Bubba's - Management indicated a solid pipeline for Bubba's growth, with potential for more than 30 openings in the coming years [43][44] Question: Off-premise sales growth - The increase in off-premise sales is attributed to improved operational efficiency and the mobile app's convenience [119][122] Question: Delivery considerations - Management has resisted expanding delivery services, focusing instead on enhancing the off-premise pickup experience [130][132] Question: Construction costs and tariffs - No significant impact from tariffs on construction costs has been observed yet, with inventory levels remaining stable [81][82]

Financial Data and Key Metrics Changes - Revenue for the second quarter grew to over $1,500,000,000 for the first time in company history, representing a 12.7% increase year-over-year [5][17] - Same store sales increased by 5.8%, driven by a 4% traffic growth and a 1.8% increase in average check [5][17] - Diluted earnings per share increased by 4% to $1.86 [17] - Restaurant margin dollars increased by 6.1% to $257,000,000, while restaurant margin as a percentage of total sales decreased by 108 basis points year-over-year to 17.1% [17][18] Business Line Data and Key Metrics Changes - Texas Roadhouse averaged approximately $172,000 in weekly sales, while Bubba's 33 averaged over $128,000 in weekly sales [6][7] - Jaggers delivered average weekly sales of nearly $76,000 in the second quarter [7] - The company plans to open approximately 30 company-owned restaurants this year, with a potential for double-digit openings for Bubba's next year [8][10] Market Data and Key Metrics Changes - Inflation for commodities was in line with expectations, with a full-year inflation guidance increased to approximately 5% due to higher beef inflation [14] - Labor inflation was also in line with expectations, with a full-year guidance lowered to approximately 4% [14] Company Strategy and Development Direction - The company is focused on a "people first" approach, emphasizing legendary food and service [11] - Plans to acquire additional franchise locations and continue expanding the Bubba's brand, aiming for 200 locations [7][10] - The company is committed to maintaining its capital allocation philosophy, prioritizing new restaurant development and existing restaurant care [15][16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strength of operations and the commitment of the team, despite facing challenges [11] - The company is monitoring inflationary trends closely and adjusting strategies accordingly [14][28] - Management remains optimistic about the growth potential of Bubba's and Jaggers, with plans for increased openings in the coming years [42][126] Other Important Information - The company completed the acquisition of three franchised restaurants, bringing the total to 17 for the year, and plans to acquire three more in the fourth quarter [10] - The company is purchasing its support center buildings, which will save approximately $2,500,000 in rent annually [103] Q&A Session Summary Question: Insights on inflation dynamics - Management noted that strong retail demand for beef and tighter supply have driven inflation higher, with expectations of peak inflation in the third quarter [25][28] Question: Mix effect and consumer behavior - Negative mix pressure is primarily from the alcohol category, while positive trends are seen in entrees and mocktails [32][36] Question: Expectations for inflation in Q3 and Q4 - Anticipated commodity inflation could reach 7% in Q3, decreasing to 4-5% in Q4 [41] Question: Growth opportunities in California - The company is excited about acquiring remaining franchise units in California and plans to explore growth opportunities in the state [96][99] Question: Off-premise sales growth - Off-premise sales growth is attributed to improved operational efficiency, the mobile app, and better execution by staff [120][123] Question: Delivery considerations - Currently, the company is not pursuing delivery options broadly but is open to discussions based on individual unit needs [130][132]

Financial and Operational Highlights [Second Quarter 2025 Performance](index=1&type=section&id=Second%20Quarter%202025%20Performance) The company reported a 12.7% revenue increase to $1.51 billion, though restaurant margins declined due to inflation Q2 2025 Financial Summary | ($000's, except per share amounts) | 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 earnings per share** | $1.86 | $1.79 | 4.0% | - Comparable restaurant sales at company restaurants increased by **5.8%**[2](index=2&type=chunk) - Restaurant margin percentage decreased by **108 basis points to 17.1%**, primarily due to 5.2% commodity inflation and 3.8% wage and labor inflation[2](index=2&type=chunk) - During the quarter, the company opened **four company-owned restaurants** and one franchise restaurant[2](index=2&type=chunk) [Year-to-Date 2025 Performance](index=1&type=section&id=Year-to-Date%202025%20Performance) Year-to-date revenue grew 11.2% to $2.96 billion, while restaurant margin contracted by 92 basis points to 16.9% YTD 2025 Financial Summary | ($000's, except per share amounts) | 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 earnings per share** | $3.57 | $3.48 | 2.5% | - Comparable restaurant sales at company restaurants increased by **4.7%** year-to-date[6](index=6&type=chunk) - Year-to-date restaurant margin percentage decreased by **92 basis points to 16.9%**, impacted by 3.7% commodity inflation and 4.2% wage and labor inflation[6](index=6&type=chunk) - The company opened **12 company restaurants** and one franchise restaurant in the first half of the year[6](index=6&type=chunk) [Management Commentary](index=2&type=section&id=Management%20Commentary) Management highlighted strong sales growth from customer traffic and reaffirmed its focus on value and disciplined capital allocation - Management attributes strong comparable sales growth to **positive customer traffic** across all three of its brands[3](index=3&type=chunk) - The company expects **commodity inflation to continue impacting profitability** for the rest of the year but remains focused on preserving its value proposition and operational excellence[3](index=3&type=chunk) - The company recently opened its **800th system-wide restaurant**, underscoring its commitment to growth[3](index=3&type=chunk) - The capital allocation strategy prioritizes **new store development and strategic franchise acquisitions** to drive long-term shareholder value[3](index=3&type=chunk) Business Outlook and Strategy [2025 Outlook](index=2&type=section&id=2025%20Outlook) The company updated its full-year inflation outlook and reiterated guidance for positive sales growth and capital expenditures of around $400 million - Comparable restaurant sales at company restaurants for the first five weeks of Q3 2025 increased by **5.3%** compared to 2024[5](index=5&type=chunk) Full-Year 2025 Guidance | 2025 Outlook | Expectation | | :--- | :--- | | **Updated Expectations** | | | Commodity cost inflation | ~5% | | Wage and other labor inflation | ~4% | | Effective income tax rate | ~15% | | **Reiterated Expectations** | | | Comparable restaurant sales | Positive growth | | Store week growth | ~5% | | Total capital expenditures | ~$400 million | [Franchise Acquisitions](index=2&type=section&id=Franchise%20Acquisitions) The company plans to acquire eight domestic franchise restaurants in late 2025 and early 2026 - The company plans to acquire **eight domestic franchise restaurants** in Q4 2025 and Q1 2026, subject to due diligence[4](index=4&type=chunk) Shareholder Returns [Dividend Declaration](index=3&type=section&id=Dividend%20Declaration) The Board of Directors declared a quarterly cash dividend of $0.68 per share, payable in September 2025 Quarterly Dividend Details | Dividend Details | | | :--- | :--- | | **Dividend per Share** | $0.68 | | **Record Date** | September 2, 2025 | | **Payment Date** | September 30, 2025 | [Capital Allocation](index=1&type=section&id=Capital%20Allocation) The company deployed $324.1 million in capital year-to-date for expenditures, acquisitions, dividends, and share repurchases Capital Allocation Summary | Capital Allocation Spend ($ millions) | Q2 2025 | 26 Weeks YTD 2025 | | :--- | :--- | :--- | | Capital expenditures | $92.5 | $169.9 | | Franchise acquisitions | $15.5 | $93.9 | | Dividends | $45.1 | $90.3 | | Repurchases of common stock | $9.8 | $60.0 | Financial Statements [Condensed Consolidated Statements of Income](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income) The income statement shows year-over-year revenue growth, with rising operating costs moderating net income and EPS gains Consolidated Statements of Income | (in thousands, except per share data) | 13 Weeks Ended July 1, 2025 | 13 Weeks Ended June 25, 2024 | 26 Weeks Ended July 1, 2025 | 26 Weeks Ended June 25, 2024 | | :--- | :--- | :--- | :--- | :--- | | **Total revenue** | $1,512,054 | $1,341,202 | $2,959,702 | $2,662,419 | | Food and beverage costs | $511,324 | $436,001 | $1,002,315 | $881,092 | | Labor costs | $495,049 | $438,212 | $975,024 | $865,759 | | **Income from operations** | $146,341 | $142,816 | $281,074 | $275,944 | | **Net income attributable to Texas Roadhouse** | $124,085 | $120,141 | $237,747 | $233,347 | | **Diluted EPS** | $1.86 | $1.79 | $3.57 | $3.48 | [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets grew to $3.26 billion, driven by property, equipment, and goodwill from acquisitions, while cash decreased Consolidated Balance Sheets | (in thousands) | 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 and equity** | **$3,255,276** | **$3,190,779** | | Current liabilities | $713,509 | $828,130 | | Total stockholders' equity | $1,450,794 | $1,358,347 | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Operating activities provided $366.0 million in cash, which was used for investing and financing, resulting in a net cash decrease Consolidated Statements of Cash Flows | (in thousands) | 26 Weeks Ended July 1, 2025 | 26 Weeks Ended June 25, 2024 | | :--- | :--- | :--- | | **Net cash provided by operating activities** | **$365,980** | **$377,347** | | **Net cash used in investing activities** | **($259,527)** | **($146,155)** | | Capital expenditures | ($169,912) | ($155,478) | | Acquisitions of franchise restaurants | ($93,878) | — | | **Net cash used in financing activities** | **($174,877)** | **($137,984)** | | Repurchase of common stock | ($60,414) | ($35,139) | | Dividends paid | ($90,292) | ($81,509) | | **Net (decrease) increase in cash** | **($68,424)** | **$93,208** | | Cash and cash equivalents - end of period | $176,801 | $197,454 | Supplemental Information [Non-GAAP Measures Reconciliation](index=3&type=section&id=Non-GAAP%20Measures%20Reconciliation) The company provides a reconciliation of Restaurant Margin to Income from Operations, showing a margin decline to 17.1% in Q2 2025 - The company uses the non-GAAP measure **Restaurant Margin** to evaluate core restaurant-level operating efficiency[9](index=9&type=chunk) Reconciliation of Income from Operations to Restaurant Margin | Reconciliation ($ in thousands) | 13 Weeks Ended July 1, 2025 | 26 Weeks Ended July 1, 2025 | | :--- | :--- | :--- | | **Income from operations** | **$146,341** | **$281,074** | | Less: Royalties and franchise fees | (8,080) | (15,386) | | Add: Pre-opening | 5,464 | 12,276 | | Add: Depreciation and amortization | 50,744 | 99,544 | | Add: General and administrative | 62,763 | 118,980 | | **Restaurant margin** | **$257,343** | **$496,627** | | Restaurant margin % | 17.1% | 16.9% | [Supplemental Financial and Operating Data](index=9&type=section&id=Supplemental%20Financial%20and%20Operating%20Data) Comparable restaurant sales grew 5.8% in Q2 2025, while rising food and beverage costs contributed to a lower restaurant margin Q2 2025 Key Operating Metrics (Company Restaurants) | Q2 2025 Operating Metrics (Company Restaurants) | July 1, 2025 | June 25, 2024 | | :--- | :--- | :--- | | Comparable restaurant sales | 5.8% | 9.3% | | Food and beverage costs (% of sales) | 34.0% | 32.7% | | Labor costs (% of sales) | 32.9% | 32.8% | | Restaurant margin % | 17.1% | 18.2% | Q2 2025 Comparable Sales Growth by Brand | Q2 2025 Comparable Sales by Brand | % Change | | :--- | :--- | | Texas Roadhouse (Company) | 5.9% | | Bubba's 33 (Company) | 4.3% | | Texas Roadhouse (Franchise) | 7.0% | [Restaurant Unit Activity](index=10&type=section&id=Restaurant%20Unit%20Activity) The total restaurant count increased to 797, driven by new openings and franchise acquisitions Restaurant Count by Type | Restaurant Count | As of July 1, 2025 | As of June 25, 2024 | Change | | :--- | :--- | :--- | :--- | | Total company restaurants | 695 | 650 | 45 | | Total franchise restaurants | 102 | 112 | (10) | | **Total restaurants** | **797** | **762** | **35** | - In the first 26 weeks of 2025, the company opened **12 new restaurants** and acquired **17 franchise locations**[24](index=24&type=chunk)

Core Insights - Texas Roadhouse (TXRH) is projected to announce quarterly earnings of $1.95 per share, reflecting an 8.9% year-over-year increase, with revenues expected to reach $1.5 billion, a 12.1% increase from the same quarter last year [1]. Earnings Estimates - Over the last 30 days, the consensus EPS estimate has been revised upward by 0.3%, indicating analysts' reassessment of their initial forecasts [2]. - Revisions to earnings projections are crucial for predicting investor behavior, as empirical studies show a strong correlation between earnings estimate trends and short-term stock performance [3]. Revenue Projections - Analysts predict 'Revenue - Restaurant and other sales' will reach $1.50 billion, marking a 12.3% year-over-year increase [5]. - The estimate for 'Revenue - Franchise royalties and fees' is set at $8.10 million, indicating a 7.2% year-over-year increase [5]. Comparable Sales Growth - 'Comparable restaurant sales growth - Company restaurants' is forecasted to be 5.5%, down from 9.3% in the previous year [5]. - 'Franchise-owned restaurants - Comparable restaurant sales growth' is expected to be 5.1%, compared to 6.6% in the same quarter last year [6]. Restaurant Metrics - The total number of 'Restaurants at the end - Total' is projected to be 800, up from 762 year-over-year [6]. - 'Restaurants at the end - Company - Total' is estimated to reach 697, compared to 650 last year [7]. - 'Restaurants at the end - Company - Texas Roadhouse' is expected to be 636, up from 594 year-over-year [7]. Additional Metrics - The consensus for 'Restaurants at the end - Company - Bubba's 33' is 52, compared to 48 last year [8]. - 'Store weeks - Franchise restaurants' is projected to be 1,358, down from 1,389 year-over-year [8]. - 'Store weeks - Company restaurants' is expected to reach 8,964, an increase from 8,408 in the same quarter last year [9]. - The estimate for 'Restaurants at the end - Franchise - Total' stands at 105, down from 112 year-over-year [9]. Stock Performance - Over the past month, Texas Roadhouse shares have recorded a return of -0.7%, while the Zacks S&P 500 composite has changed by +1% [9].

Core Viewpoint - Texas Roadhouse (TXRH) is expected to report a year-over-year increase in earnings and revenues for the quarter ended June 2025, with the consensus outlook being crucial for assessing the company's earnings picture [1][3]. Earnings Expectations - The consensus EPS estimate for Texas Roadhouse is $1.95 per share, reflecting an increase of +8.9% year-over-year [3]. - Revenues are anticipated to reach $1.5 billion, which is a 12.1% increase from the same quarter last year [3]. Estimate Revisions - Over the last 30 days, the consensus EPS estimate has been revised 0.35% higher, indicating a collective reassessment by analysts [4]. - The Most Accurate Estimate for Texas Roadhouse is lower than the Zacks Consensus Estimate, resulting in an Earnings ESP of -2.39%, suggesting a bearish outlook from analysts [12]. Earnings Surprise Prediction - The Zacks Earnings ESP model indicates that a positive or negative reading can predict the likelihood of actual earnings deviating from consensus estimates, with positive readings being more reliable [9][10]. - Texas Roadhouse's current Zacks Rank is 3 (Hold), which complicates the prediction of an earnings beat [12]. Historical Performance - In the last reported quarter, Texas Roadhouse was expected to post earnings of $1.75 per share but delivered only $1.70, resulting in a surprise of -2.86% [13]. - Over the past four quarters, the company has beaten consensus EPS estimates two times [14]. Industry Comparison - In the Zacks Retail - Restaurants industry, McDonald's (MCD) is expected to report earnings of $3.15 per share for the same quarter, indicating a year-over-year change of +6.1% [18]. - McDonald's revenue is projected to be $6.71 billion, up 3.5% from the previous year, with a positive Earnings ESP of +0.43% [19][20].

Core Insights - The article does not provide specific insights or analysis regarding any companies or industries, focusing instead on disclosures and disclaimers related to investment positions and advice [1][2] Group 1 - There is no stock, option, or similar derivative position held by the analyst in any mentioned companies, nor plans to initiate such positions in the next 72 hours [1] - The article expresses personal opinions of the author and does not reflect the views of Seeking Alpha as a whole [2] - The analysts contributing to the article may not be licensed or certified by any regulatory body [2]