Texas Roadhouse(TXRH) - 2025 Q2 - Quarterly Results

Financial and Operational Highlights Second Quarter 2025 Performance 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] - 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] - During the quarter, the company opened four company-owned restaurants and one franchise restaurant[2] Year-to-Date 2025 Performance 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] - 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] - The company opened 12 company restaurants and one franchise restaurant in the first half of the year[6] Management Commentary 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] - 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] - The company recently opened its 800th system-wide restaurant, underscoring its commitment to growth[3] - The capital allocation strategy prioritizes new store development and strategic franchise acquisitions to drive long-term shareholder value[3] Business Outlook and Strategy 2025 Outlook 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] 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 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] Shareholder Returns Dividend Declaration 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 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 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 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 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 | $197,454 | Supplemental Information Non-GAAP Measures Reconciliation The company provides a reconciliation of Restaurant Margin to Income from Operations, showing a margin decline to 17.1% in Q2 2025 - The company uses the non-GAAP measure Restaurant Margin to evaluate core restaurant-level operating efficiency[9] Reconciliation of Income from Operations to Restaurant Margin | Reconciliation ($ 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 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 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]