Core Insights - Texas Roadhouse reported strong growth in 2025, with revenue reaching nearly $5.9 billion and the opening of its 800th restaurant, marking the 60th consecutive quarter of comparable restaurant sales growth [3][4][7] Financial Performance - Full-year 2025 same-store sales increased by 4.9%, driven by a 2.8% growth in traffic [1] - The company generated over $730 million in operating cash flow and returned capital through $180 million in dividends and $150 million in share repurchases [5][20] - Fourth-quarter revenue grew by 3.1%, with restaurant margin dollars decreasing by 15.6% to $205 million, and diluted earnings per share declining by 26.1% to $1.28 [6][8] Operational Initiatives - Management highlighted the completion of the Digital Kitchen rollout and upgraded Guest Management Systems, which are expected to enhance operational efficiency [2][21] - The company raised over $40 million for local schools and nonprofits through community initiatives [2] Pricing and Inflation Outlook - Management anticipates approximately 7% commodity inflation for 2026, primarily driven by beef prices, and plans a 1.9% menu price increase in Q2 [15][14] - Labor costs as a percentage of sales increased to 33.2%, while food and beverage costs rose to 36.4% of sales [10][11] Development Plans - In 2025, Texas Roadhouse added 48 restaurants, including 28 new openings and the acquisition of 20 franchise locations [17] - For 2026, the company expects to open approximately 35 company restaurants and maintain franchise development plans [18] Technology Investments - The company is expanding its technology initiatives, including testing handheld tablets for servers to improve order accuracy and speed [21] - The upgraded guest management software has improved operational execution, particularly during high-volume periods [22]

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]

Financial Data and Key Metrics Changes - In 2025, the company reported revenue growth to nearly $5.9 billion, marking a successful year with all three brands achieving positive sales and traffic growth [6] - Same-store sales increased by 4.9% for the full year, with traffic growth of 2.8% [14] - The company generated the second highest restaurant margin dollars, income from operations, and earnings per share in its history, despite cost pressures [14] - For the fourth quarter of 2025, revenue growth was 3.1%, driven by a 4% increase in average weekly sales, partially offset by a 0.6% decline in store weeks [18] - Diluted earnings per share decreased by 26.1% to $1.28 in the fourth quarter [18] 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 [14] - The company opened 48 restaurants in 2025, including 28 new store openings and the acquisition of 20 franchise restaurants [7] - The company plans to open approximately 35 company restaurant locations across three brands in 2026 [7] Market Data and Key Metrics Changes - The company ended 2025 with over $130 million in cash and cash flow from operations exceeding $730 million [15] - Commodity inflation guidance for 2026 is approximately 7%, with beef inflation accounting for nearly all expected commodity inflation [16] - Labor inflation guidance remains unchanged at 3%-4% for 2026 [16] Company Strategy and Development Direction - The company aims to maintain its focus on legendary food and service while navigating commodity inflation challenges [8] - A 1.9% menu price increase is planned for the second quarter of 2026 to maintain value proposition [8] - The company is committed to expanding its technology initiatives, including the integration of enhanced systems and testing handheld tablets for order input [9] Management's Comments on Operating Environment and Future Outlook - Management acknowledged that commodity inflation will continue to be a headwind but remains confident in long-term growth strategies [8] - The company is focused on providing a legendary experience to guests while managing cost pressures [8] - Management expressed optimism about the company's ability to leverage top-line growth to offset some cost pressures [32] Other Important Information - The company announced a 10% increase in its quarterly dividend, bringing it to $0.75 per quarter [17] - The company raised over $40 million for local schools and nonprofit organizations through community initiatives [6] Q&A Session Summary Question: Impact of December sales slowdown - Management acknowledged that December's sales slowdown was influenced by weather and holiday shifts, resulting in a higher labor hours ratio [28][31] Question: Long-term beef inflation outlook - Management indicated that beef inflation is expected to remain a challenge, with no immediate relief anticipated [30][32] Question: Digital Kitchen rollout impact - The Digital Kitchen has improved operational efficiency, allowing for more focus on to-go business, but no plans for third-party delivery at this time [34][37] Question: Pricing strategy for 2026 - The company plans to implement a 1.9% price increase in the second quarter, with a focus on maintaining competitive pricing [40][41] Question: Tax refunds and consumer spending - Management noted that larger-than-expected tax refunds could potentially drive incremental consumption, but the impact remains uncertain [46] Question: G&A guidance breakdown - The increase in G&A is primarily due to new long-term management equity grants and higher forecasted incentive compensation [80][82] Question: Handheld ordering test expansion - The handheld ordering test is being refined before broader rollout, with positive feedback on its potential to improve order accuracy and speed [57][60]

Financial Data and Key Metrics Changes - The company reported revenue growth of 12.8% for the third quarter, reaching over $1.4 billion, driven by a 5.5% increase in average weekly sales and 6.8% store week growth [16][6] - Diluted earnings per share decreased by 0.8% to $1.25, while restaurant margin dollars increased by 1.1% to $204 million [16][12] - Comparable sales increased by 6.1%, supported by a 4.3% traffic growth and a 1.8% increase in average check [16][12] Business Line Data and Key Metrics Changes - Texas Roadhouse averaged nearly $162,000 in weekly sales, Bubba's 33 averaged $119,000, and Jaggers averaged over $75,000 [12] - The company opened seven company-owned locations in the third quarter, including two Bubba's 33 and one Jaggers, and plans to open approximately 30 restaurants across three brands in 2025 [7][8] Market Data and Key Metrics Changes - The company has seen a positive consumer response to its beverage offerings, including mocktails and regional beverage menu items [8][9] - The to-go business continues to show solid momentum, with operators focusing on speed and order accuracy [9] Company Strategy and Development Direction - The company aims to maintain its focus on driving top-line growth through guest traffic and restaurant expansion, while also investing in employee development to remain an employer of choice [10][11] - The company plans to acquire its remaining California franchise locations at the beginning of 2026 and expects franchise partners to open 10 new restaurants [8][15] Management's Comments on Operating Environment and Future Outlook - Management noted that inflation in the third quarter was higher than expected due to beef prices, updating the full-year 2025 commodity inflation guidance to approximately 6% [12][13] - The company remains optimistic about its long-term success, emphasizing its people-first focus and operational excellence [6][11] Other Important Information - The company ended the third quarter with a cash balance of $108 million and cash flow from operations of $144 million, offset by $214 million in capital expenditures, dividend payments, and share repurchases [14][15] - The company is establishing its initial 2026 capital expenditure guidance at approximately $400 million, excluding the cost of acquiring California franchise restaurants [15] Q&A Session Summary Question: Clarification on beef inflation outlook - Management indicated that they expect mid-teens beef inflation if the commodity basket is up high single digits, with a focus on managing pricing strategies [23][25] Question: Confidence in beef pricing being transitory - Management believes the current beef pricing situation is cyclical and transitory, based on industry insights and cattle cycles [33][34] Question: Consumer behavior by income cohort - Management noted no significant differences in consumer behavior by income or age cohort, emphasizing the value offered across the menu [37][39] Question: Pricing philosophy and managing partner compensation - Management discussed their conservative pricing approach to protect top-line growth and ensure fair compensation for managing partners [44][46] Question: Unit growth and market expansion for Bubba's - Management confirmed that most growth for Bubba's will occur in existing markets, with a focus on maintaining strong partnerships [86][88] Question: Cash uses and franchise acquisitions - Management stated that approximately 30 franchises remain for potential acquisition after completing the California acquisition [75][76] Question: Labor and operating expenses outlook - Management expects continued leverage on labor and operating expenses if top-line trends remain strong [81][82] Question: Impact of grocery store beef prices on customer behavior - Management acknowledged that high grocery store beef prices are likely driving customers to dine out more, recognizing the value of their steak offerings [84][85]