Texas Roadhouse (TXRH) Q3 2024 earnings summary

Executive summary

• Q3 2024 revenue grew 13.5% to $1.27 billion, with net income up 32.3% to $84.4 million, driven by strong same-store sales, positive traffic, and new restaurant openings.

• Comparable sales increased 8.5% at company restaurants and 7.2% at domestic franchise locations, with all brands posting positive traffic and sales growth.

• Opened seven company-owned and three franchise restaurants in Q3; 22 company and nine franchise restaurants opened year-to-date, with a full-year target of 30 new restaurants.

• Announced a tentative agreement to acquire 13 franchise restaurants in early 2025, expanding presence in Indiana, Ohio, and California.

• Celebrated 20 years as a public company, received the 2024 Brand Icon award, and marked a 20-year partnership with Homes For Our Troops.

Financial highlights

• Diluted EPS increased 32.5% to $1.26; restaurant margin dollars rose 24.1% to $202.1 million, with margin percentage up to 16.0% from 14.6%.

• Cash flow from operations for the first nine months was $516.1 million, up from $390.7 million in 2023.

• Capital expenditures for the first nine months totaled $246.5 million.

• Restaurant margin as a percentage of sales improved 137 basis points to 16.0%.

• Food and beverage costs as a percentage of sales improved by 107 basis points to 33.5%.

Outlook and guidance

• 2025 guidance includes opening approximately 30 company-owned restaurants, with franchise partners targeting 7 international and 3 domestic Jaggers locations.

• Store week growth expected at 7.5% in 2024 and 5% in 2025, including benefits from a 53rd week and planned franchise acquisitions.

• Commodity inflation for 2024 expected under 1%, rising to 2%-3% in 2025; labor inflation forecasted at 4.5% in 2024 and 4%-5% in 2025.

• 2025 capital expenditure guidance set at $400 million, excluding franchise acquisition costs.

• Effective tax rate forecasted at ~15% for 2024 and 15–16% for 2025.