Texas Roadhouse(US:TXRH)2025-11-06 23:02Financial Data and Key Metrics Changes - The company reported revenue growth of 12.8% for the third quarter, driven by a 5.5% increase in average weekly sales and 6.8% store week growth [16] - Diluted earnings per share decreased by 0.8% to $1.25, while restaurant margin dollars increased by 1.1% to $204 million [16][17] - Average weekly sales were over $157,000, with to-go sales representing approximately 13.6% of total weekly sales [16] Business Line Data and Key Metrics Changes - All three brands (Texas Roadhouse, Bubba's 33, and Jaggers) delivered same-store sales growth, with Texas Roadhouse averaging nearly $162,000 in weekly sales [12] - Bubba's 33 averaged $119,000 in weekly sales, while Jaggers exceeded $75,000 [12] - Comparable sales increased by 6.1% in the third quarter, driven by 4.3% traffic growth and a 1.8% increase in average check [16] Market Data and Key Metrics Changes - The company opened seven company-owned locations in the third quarter and plans to open approximately 30 restaurants across three brands in 2025 [7] - Franchise partners opened two international Texas Roadhouse restaurants during the third quarter, with plans for one more in the fourth quarter [7] - The company expects to open approximately 35 company-owned restaurants in 2026, including 20 Texas Roadhouse, 10 Bubba's 33, and up to five Jaggers [7] Company Strategy and Development Direction - The company maintains a people-first focus, value proposition, and operational excellence as key components of its long-term success [6] - The company is committed to expanding its restaurant base while driving top-line growth through guest traffic [10] - The company is also focusing on enhancing its retail presence, with products available in over 120,000 retail outlets [9] Management's Comments on Operating Environment and Future Outlook - Management noted that consumer behavior remains strong, with no noticeable change following a 1.7% menu price increase [8] - The company is setting initial 2026 commodity inflation guidance at approximately 7%, with expectations of volatility in beef prices [13] - Management expressed confidence in the long-term health of the business, emphasizing a commitment to its mission and values [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 [14] - Capital expenditures for 2026 are expected to be 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 beef inflation might be in the mid-teens if the overall commodity basket is up in high single digits, with expectations based on current trends [23][26] Question: Confidence in transitory vs. structural beef pricing - Management believes the current beef pricing situation is cyclical and transitory, based on industry insights [34][35] Question: Consumer behavior by income and age cohort - Management noted no significant differences in consumer behavior by income or age cohort, emphasizing the value offered across the menu [38][40] Question: Pricing philosophy and managing partner compensation - Management stated that compensation is tied to sales and profits, and they will continue to monitor and adjust as necessary [46][48] Question: Restaurant profit dollars and inflation impact - Management acknowledged the decline in restaurant profit dollars per location and indicated a conservative approach to pricing to protect margins [55][58] Question: New customer acquisition and competition - Management believes they are attracting customers from various segments, including higher-end steakhouses and QSRs, due to their reputation and dining experience [62][64] Question: Franchise acquisitions and CapEx balance - Management confirmed ongoing conversations for franchise acquisitions and explained that CapEx for 2026 is comparable to 2025 due to efficiency in openings [76][78]