Texas Roadhouse (TXRH) Q1 2025 earnings summary

Executive summary

• Total revenue for Q1 2025 increased 9.6% year-over-year to $1.45 billion, with net income up 0.4% to $113.7 million and diluted EPS up 1.0% to $1.70, driven by higher store weeks, comparable sales, and positive traffic growth across all brands.

• All three brands—Texas Roadhouse, Bubba's 33, and Jaggers—delivered positive same-store sales and traffic growth, with momentum continuing into Q2.

• Eight new company-owned restaurants opened in Q1, including the 50th Bubba's 33, with plans for about 30 new company-owned and several franchise locations in 2025.

• The company acquired 14 domestic franchise restaurants for $78.3 million and launched a $500 million stock repurchase program, repurchasing $50.2 million in Q1.

• Technology upgrades, including Digital Kitchen and guest management systems, are progressing toward full rollout by year-end.

Financial highlights

• Comparable restaurant sales increased 3.5% year-over-year, with store weeks up 7.1% and average weekly sales per restaurant rising to $163,071.

• Restaurant margin dollars grew 4.7% to $239.3 million, though margin percentage declined 77 basis points to 16.6% due to commodity and labor inflation.

• Food and beverage costs rose to 34.1% of sales, mainly due to commodity inflation and mix shift; labor costs increased to 33.3% of sales, driven by 4.6% wage and labor inflation.

• Cash flow from operations was $237.7 million, with capital expenditures of $77.4 million, franchise acquisitions of $78.3 million, dividends paid of $45.2 million, and share repurchases of $50.2 million.

• Cash and cash equivalents at quarter-end were $221.1 million.

Outlook and guidance

• Management expects commodity cost inflation of about 4% and wage/labor inflation of 4–5% for 2025, with tariffs expected to contribute 30 basis points.

• Store week growth is projected at approximately 5%, with total capital expenditures around $400 million, including tariff-related pressures.

• Effective tax rate for 2025 is expected between 15% and 16%.

• A menu price increase of 1.4% was implemented in early April.

• Comparable restaurant sales for the first five weeks of Q2 2025 increased 5.0% year-over-year.