Texas Roadhouse (TXRH) Q2 2024 earnings summary

Executive summary

• Total revenue for Q2 2024 rose 14.5% year-over-year to $1.34 billion, driven by 9.3% comparable sales growth, strong traffic, and new store openings across all brands.

• Net income increased 46.0% to $120.1 million, with diluted EPS up 46.4% to $1.79, reflecting higher restaurant margin and sales.

• Restaurant margin improved to 18.2% of sales from 15.7% in Q2 2023, aided by higher average guest check and labor productivity.

• Bubba's 33 and Jaggers brands continued positive trends, with Bubba's averaging $123,000 and Jaggers $73,000 in weekly sales; Bubba's 33 posted 5.5% same-store sales growth.

• Opened six company-owned and three franchise restaurants in Q2; over 50 international franchise locations now in operation.

Financial highlights

• Restaurant and other sales grew 14.5% to $1.33 billion; franchise royalties and fees up 10.9% to $7.6 million in Q2 2024.

• Restaurant margin dollars increased 32.7% to $243 million; diluted EPS rose 46.4% to $1.79.

• Food and beverage costs improved by 176 basis points to 32.7% of sales, aided by a 4.8% check increase and low commodity inflation.

• Labor as a percentage of sales decreased 76 basis points to 32.8%; labor dollars per store week rose 6% due to 4.4% wage inflation and 1.6% growth in hours.

• Cash flow from operations was $377.3 million YTD; ended Q2 with $197 million in cash.

Outlook and guidance

• 2024 store week growth expected at ~7.5%, including a 2% benefit from the 53rd week.

• Commodity cost inflation forecast at ~2%; wage and labor inflation expected at 4–5%.

• Capital expenditure guidance raised to $360–$370 million for 2024 to support additional store-level projects.

• Full-year 2024 income tax rate updated to approximately 14.5%.

• Comparable restaurant sales for the first four weeks of Q3 2024 increased 8.0% year-over-year.