Texas Roadhouse(US:TXRH)2026-02-27 16:20Revenue Growth - Total revenue increased by $504.7 million or 9.4% to $5.9 billion in 2025 compared to $5.4 billion in 2024, driven by a 5.0% increase in store weeks and a 4.9% increase in comparable restaurant sales [284]. - Total revenue increased to $5,878.1 million in 2025, up from $5,373.3 million in 2024, representing a growth of 9.4% [290]. - Restaurant and other sales increased by 9.5% in 2025 compared to 2024, driven by a 5.0% increase in store weeks and a 4.9% increase in comparable restaurant sales [295]. Restaurant Operations - The company opened 28 new company restaurants in 2025, including 20 Texas Roadhouse, 7 Bubba's 33, and 1 Jaggers restaurant, while franchise partners opened 4 restaurants [262]. - The company operates 816 restaurants across 49 states, one U.S. territory, and ten foreign countries as of December 30, 2025 [255]. - The company continues to evaluate opportunities for restaurant development in both existing and new markets, focusing on areas with significant demand [258]. - The average unit volume represents the average annual restaurant sales for Texas Roadhouse and Bubba's 33 restaurants, indicating that newer restaurants may have lower sales growth compared to the company average [272]. - Comparable restaurant sales growth was attributed to increased guest traffic and higher per person average check amounts [284]. Financial Performance - Net income decreased by $28.0 million or 6.5% to $405.6 million in 2025 compared to $433.6 million in 2024, primarily due to lower restaurant margin dollars and higher depreciation and amortization expenses [285]. - Restaurant margin dollars decreased by $10.1 million or 1.1% to $905.7 million in 2025, with restaurant margin as a percentage of sales dropping to 15.5% from 17.1% in 2024 [286]. - Net cash provided by operating activities was $730.1 million in 2025, down from $753.6 million in 2024, primarily due to decreased net income [325]. Cost Management - Food and beverage costs as a percentage of restaurant sales increased to 35.0% in 2025 from 33.4% in 2024, primarily due to commodity inflation of 6.1% [304]. - The company maintains a focus on improving restaurant-level profitability through pricing strategies and operational standards related to food and service quality [262]. - General and administrative expenses decreased to 3.9% of total revenue in 2025 from 4.2% in 2024, driven by increased average unit volume and lower incentive compensation [314]. Capital Allocation - Capital allocation in 2025 included capital expenditures of $388.0 million, franchise acquisitions of $107.5 million, dividends of $180.3 million, and stock repurchases of $150.0 million [287]. - The stock repurchase program approved on February 19, 2025, allows for the repurchase of up to $500 million of common stock, replacing the previous $300 million program [264]. - In 2025, the company repurchased 869,007 shares of common stock for $150 million, totaling $913.3 million spent on repurchases since inception [265]. - The company plans to satisfy capital requirements over the next 12 months with cash on hand and expects capital expenditures of approximately $400 million in 2026 [331]. Dividends - The quarterly cash dividend declared on February 18, 2026, was $0.75 per share, representing a 10% increase compared to the prior year [266]. - The Board authorized a quarterly dividend of $0.68 per share in 2025, an increase from $0.61 per share in 2024, with total dividend payments of $180.3 million in 2025 [332]. Market Risks - The company has been operating during periods of inflation, primarily driven by commodity and labor inflation, with some impacts offset by menu price increases [352]. - The company is exposed to market risk from changes in interest rates on variable rate debt, with no outstanding borrowings on its credit facility as of December 30, 2025 [353]. - The beef supply is highly dependent on four vendors, representing a significant portion of the total beef marketplace, posing a risk of supply shortages or higher costs [355]. Other Financial Metrics - Interest income, net decreased to $3.1 million in 2025 from $6.8 million in 2024 due to reduced earnings on cash and cash equivalents [315]. - Equity income from investments in unconsolidated affiliates increased to $2.9 million in 2025 from $1.2 million in 2024, driven by a $2.2 million gain from the acquisition of six affiliates [316]. - The effective tax rate decreased to 13.8% in 2025 from 15.3% in 2024, influenced by an increase in the FICA tip tax credit [317]. - Impairment and closure costs, net were $0.3 million in 2025, down from $1.2 million in 2024, with 2025 costs related to restaurant relocations [313]. - The company performed a qualitative assessment and identified no indicators of impairment for the Texas Roadhouse reporting unit [351].