Texas Roadhouse (TXRH) Q4 2025 Earnings Transcript

Core Insights - The company plans to implement a 1.9% menu price increase starting in the second quarter of 2026 to maintain its value proposition [1] - The company has successfully completed the rollout of its digital kitchen and upgraded guest management systems, which will continue to be integrated in 2026 [1][4] - The company raised over $40 million for local schools and non-profits through fundraising efforts, demonstrating its commitment to community support [3] Financial Performance - Revenue for 2025 reached nearly $5.9 billion, marking a 3.1% growth driven by a 4% increase in average weekly sales [4][14] - Same-store sales increased by 4.9% for the full year, with traffic growth of 2.8% [10] - The company ended 2025 with over $130 million in cash and generated over $730 million in cash flow from operations [11] Development and Expansion - The company acquired five California franchise restaurants at the beginning of the fiscal year and plans to open six international Texas Roadhouse locations and four domestic Jaggers in 2026 [2] - In 2025, the company added 48 restaurants to its base, including 28 new openings and the acquisition of 20 franchise locations [3] Cost and Inflation Management - Commodity inflation is expected to be around 7% in 2026, primarily driven by beef inflation [12] - Wage and other labor inflation is projected to remain between 3% to 4% [12] - The company plans to allocate approximately $400 million for capital expenditures in 2026, focusing on new restaurant development and maintaining existing locations [12] Technology and Innovation - The company will expand testing of a handheld tablet for servers to input guest orders at the table, enhancing operational efficiency [5] - The digital kitchen rollout is expected to improve the overall dining experience and operational effectiveness [30] Community Engagement - The company provided 1.2 million meals to veterans and active military personnel in honor of Veterans Day, showcasing its commitment to honoring service members [3] - The company raised over $1.1 million for the American Tinnitus Association through a fundraiser in memory of its founder [20] Pricing Strategy - The company will maintain a conservative pricing strategy, believing it remains below competitors in the full-service dining segment [36][89] - The pricing for the first quarter of 2026 is set at 3.1%, with expectations of 3.6% in the second and third quarters [34]