Financial Data and Key Metrics Changes - In 2025, revenue grew to nearly $5.9 billion, marking a successful year with all three brands achieving positive sales and traffic growth [4] - Same-store sales increased by 4.9% for the full year, with traffic growth of 2.8% [11] - For Q4 2025, revenue growth was reported at 3.1%, driven by a 4% increase in average weekly sales, despite a 0.6% decline in store weeks [15] - Diluted earnings per share decreased by 26.1% to $1.28 in Q4 2025 [15] - The company ended the year with over $130 million in cash and generated over $730 million in cash flow from operations [12] Business Line Data and Key Metrics Changes - Consolidated average unit volume exceeded $8.4 million, with average weekly sales of over $166,000 at Texas Roadhouse, $122,000 at Bubba's 33, and nearly $73,000 at Jaggers [11] - The company opened 48 new restaurants in 2025, including 28 new store openings and the acquisition of 20 franchise restaurants [5] - The company plans to open approximately 35 company restaurant locations across three brands in 2026 [5] Market Data and Key Metrics Changes - The company experienced commodity inflation of 6.1% for the full year 2025, with guidance for 2026 remaining at approximately 7% [13] - Labor as a percentage of total sales increased to 33.2% in Q4 2025, reflecting wage and other labor inflation [17] Company Strategy and Development Direction - The company remains committed to its mission of providing legendary food and service, focusing on high-level hospitality and value [6] - A 1.9% menu price increase is planned for the second quarter of 2026 to maintain the value proposition [6] - The company is expanding the testing of handheld tablets for servers to input guest orders at the table [7] Management's Comments on Operating Environment and Future Outlook - Management acknowledged that commodity inflation will continue to be a headwind in 2026, particularly in beef prices [6] - The company is confident in its long-term strategy of serving more guests and expanding its restaurant base [12] - Management noted that the slowdown in sales in December was impacted by weather and holiday shifts, but they expect to return to normal labor ratios in 2026 [27] Other Important Information - The company raised over $40 million for local schools and nonprofit organizations through its Dine to Donate fundraisers [4] - A 10% increase in the quarterly dividend was announced, bringing it to $0.75 per quarter [14] Q&A Session Summary Question: Impact of weather on sales in December - Management acknowledged that December's sales slowdown was influenced by weather and holiday shifts, resulting in a higher labor hours ratio [25][27] Question: Long-term beef inflation outlook - Management indicated that beef inflation is expected to remain a challenge, with industry predictions suggesting it may take time for herd expansion to alleviate pressures [26][28] Question: Digital Kitchen rollout and future initiatives - The Digital Kitchen has improved operational efficiency, allowing for more focus on to-go business, but there are no immediate plans for third-party delivery services [31][34] Question: Pricing strategy for 2026 - The company plans to implement a 1.9% price increase in Q2 2026, with a total expected pricing increase of 3.6% in the second and third quarters [37] Question: G&A guidance for 2026 - G&A is expected to increase due to new long-term management equity grants and higher forecasted incentive compensation [74][76] Question: Guest management software impact - The software aids in managing table yields and wait times, contributing to improved operational efficiency [78]

Core Insights - Texas Roadhouse, Inc. (TXRH) plans to open approximately 35 company-owned restaurants in 2026, including around 20 Texas Roadhouse locations, 10 Bubba's 33 units, and up to five Jaggers restaurants, alongside additional franchise openings [1][10] - The company anticipates a store-week growth of 5-6% in 2026, driven by new openings and the acquisition of remaining California franchise locations, with strong average weekly sales across all concepts [2][10] - Despite the growth plans, unit expansion may not significantly impact earnings in the short term due to beef inflation and margin pressures, with capital spending expected to rise to about $400 million in 2026 [3][10] Company Strategy - The 35-store expansion plan is viewed as a steady compounding strategy rather than a bold acceleration, reinforcing Texas Roadhouse's long-term growth engine [4] - The success of the expansion will depend on traffic trends, cost moderation, and the speed at which new units mature into high-cash-flow restaurants [4] Competitive Landscape - Competitors like LongHorn Steakhouse adopt a more conservative growth model, focusing on margin resilience and low-single-digit annual unit growth, while Outback Steakhouse has reduced aggressive U.S. unit expansion in favor of operational improvements [6][7] - Texas Roadhouse's 2026 development plan is considered one of the more assertive unit-growth strategies within the steakhouse category compared to its competitors [7] Stock Performance and Valuation - Texas Roadhouse shares have increased by 12.9% in the past month, outperforming the industry growth of 2.6% [8] - The company trades at a forward price-to-sales (P/S) multiple of 1.95, which is below the industry average of 3.63 [12] - The Zacks Consensus Estimate for TXRH's 2026 earnings per share has risen to $6.62, indicating a projected 3.4% increase in earnings for that year [14]