Core Thesis - Texas Roadhouse, Inc. is viewed as a compelling investment opportunity despite a recent share price decline of nearly 12% over the past six months, as the company continues to demonstrate strong fundamentals in the restaurant industry [2][3][6] Financial Performance - As of January 13th, Texas Roadhouse's share was trading at $189.74, with trailing and forward P/E ratios of 28.97 and 28.41 respectively [1] - Customer traffic has increased by approximately 4%, with same-store sales rising roughly 6% at company-owned locations and about 12% year over year, indicating sustained demand [3] - Average new locations generate over $200,000 per week, contributing to a robust growth pipeline [5] Market Conditions - Investor concerns regarding rising wages, commodity inflation, and a potentially softening consumer have pressured the stock, yet operating data suggests a different reality [3] - Stabilizing beef prices and slowing wage growth to around 3% are seen as positive catalysts for the company [4] Operational Strength - Texas Roadhouse has maintained resilient restaurant-level margins despite cost pressures, reflecting superior store-level management and ongoing efficiency initiatives [4] - The company benefits from high customer loyalty and a simple operational model that does not rely heavily on promotions or marketing [2] Growth Potential - Strong and consistent free cash flow allows Texas Roadhouse to fund expansion, pay dividends, and maintain a conservative balance sheet without increasing debt [5] - Favorable demographic trends and high customer satisfaction, along with approximately 96% institutional ownership, position Texas Roadhouse as an attractive long-term investment [6] Recent Developments - The recent pullback in stock price appears disconnected from the company's operational strength, suggesting potential for meaningful upside as fundamentals reassert themselves [6] - A previous bullish thesis highlighted the company's differentiated operating model and resilient cash flows, with the stock appreciating approximately 10.28% since that coverage [7]

Core Insights - The Keg Royalties Income Fund reported financial results for Q2 and YTD 2025, showing a slight increase in Royalty Pool Sales and Royalty Income, while facing a decrease in Distributable Cash and an increase in Payout Ratio [7][8][10][11]. Financial Performance - Royalty Pool Sales for Q2 2025 were $176.8 million, up 0.9% from Q2 2024, and YTD sales increased by 4.0% to $370.6 million [7][10]. - Royalty Income rose to $7.1 million in Q2 2025, a 0.9% increase from the previous year, and YTD Royalty Income was $14.8 million, up 4.0% [8][10]. - Distributable Cash decreased to $3.0 million ($0.267 per unit) for Q2 2025, down 5.2% from Q2 2024, and YTD Distributable Cash was $7.2 million ($0.632 per unit), down 8.5% [11][10]. Transaction Details - The Fund entered into a transaction agreement with Fairfax Financial Holdings to acquire all outstanding units at a price of $18.60 per unit, which was overwhelmingly approved by unitholders [2][3][4]. - The transaction closed on August 13, 2025, following a final court order [5]. Operational Metrics - Same Store Sales increased by 4.8% in Q2 2025 and 7.0% YTD, indicating strong operational performance [10][14]. - Average Sales per Operating Week rose by 3.0% to $132,000 for Q2 and by 5.3% to $138,000 YTD [10]. Payout and Financial Ratios - The Payout Ratio was 106.3% for Q2 2025 and 89.7% YTD, indicating a higher distribution relative to Distributable Cash [10][13]. - Excluding Transaction Costs, the Payout Ratio would have been 92.3% for Q2 2025 and 84.2% YTD [13]. Cash Position - The Fund reported cash on hand of $2.1 million and positive Working Capital Before Classification of Class C and Exchangeable Partnership Units as Current Liabilities of $3.9 million as of June 30, 2025 [13].

Company Overview - The Keg Royalties Income Fund is a limited purpose, open-ended trust established under Ontario law, owning trademarks and related intellectual property used by Keg Restaurants Ltd. [2] - Keg Restaurants Ltd. operates over 100 restaurants and has annual system sales exceeding $700 million, making it the leading operator and franchisor of steakhouse restaurants in Canada [3] Financial Performance - The Fund declared a distribution of $0.0946 per unit for July 2025, payable to unitholders of record as of July 21, 2025, with payment scheduled for July 31, 2025 [1] Operational Highlights - Keg Restaurants Ltd. employs approximately 10,000 individuals and continues to expand its restaurant system through both corporate and franchised locations [3] - KRL has been recognized as the number one restaurant company to work for in Canada according to Forbes' "Canada's Best Employers 2025" survey [3]

Group 1 - The Keg Royalties Income Fund announced the election of all nominees as trustees at the annual meeting, with Christopher Charles Woodward receiving 93.26% of votes and Tim Kerr receiving 94.69% [1] - KPMG LLP was appointed as the Fund's auditors for the 2025 fiscal year, with the decision passed by a majority of votes at the meeting [1] Group 2 - The Keg Royalties Income Fund is a limited purpose, open-ended trust that owns trademarks and related intellectual property used by Keg Restaurants Ltd., receiving a royalty of 4% of gross sales from Keg restaurants [2] - Keg Restaurants Ltd. operates over 100 restaurants, employs approximately 10,000 people, and has annual system sales exceeding $700 million, making it a leading operator and franchisor of steakhouses in Canada [3] - Keg Restaurants Ltd. was recognized as the number one restaurant company to work for in Canada in Forbes' "Canada's Best Employers 2025" survey [3]

Core Insights - The Keg Royalties Income Fund reported financial results for Q1 2025, showing a positive trend in sales and income despite challenges in the full-service restaurant sector [1][3][7]. Financial Performance - Royalty Pool Sales for the 104 Keg restaurants reached $193.776 million, an increase of $12.527 million or 6.9% compared to Q1 2024 [3][21]. - Royalty income rose by $501,000 or 6.9%, from $7.250 million in Q1 2024 to $7.751 million in Q1 2025 [3][21]. - Distributable Cash available for distributions decreased by $505,000 to $4.147 million ($0.365 per Fund unit) in Q1 2025, down from $4.652 million ($0.410 per Fund unit) in Q1 2024 [4][21]. - Regular cash distributions remained stable at $3.222 million ($0.284 per Fund unit) for both Q1 2025 and Q1 2024 [4][21]. - The Payout Ratio increased to 77.7% in Q1 2025 from 69.3% in Q1 2024 [6][21]. Operational Highlights - Same Store Sales increased by 9.2% compared to the same quarter in the previous year, attributed to Keg's focus on guest experience and value [7][10]. - KRL's Average Sales per Operating Week rose by 7.5% to $144,000 for the quarter [10]. Company Overview - Keg Restaurants Ltd. operates over 100 restaurants and has annual System Sales exceeding $700 million, making it a leading operator in the Canadian steakhouse market [29]. - The company has been recognized as the number one restaurant company to work for in Canada according to Forbes' "Canada's Best Employers 2025" survey [29].