Texas Roadhouse (TXRH) Q3 2025 earnings summary

Executive summary

• Q3 2025 revenue reached a record $1.44 billion, up 12.8% year-over-year, with net income at $83.2 million and diluted EPS at $1.25, reflecting strong demand, higher store weeks, and robust operational execution.

• Comparable restaurant sales rose 6.1% in Q3, with guest traffic up 4.3% and average check up 1.8%; to-go sales represented 13.6% of total weekly sales.

• Opened seven company-owned and two franchise restaurants in Q3, with 19 company and three franchise restaurants opened year-to-date; retail presence expanded to over 120,000 outlets.

• Technology upgrades nearly complete, with 95% of restaurants using digital kitchen and guest management systems.

• Restaurant margin dollars increased 1.1% to $204.3 million, but margin percentage declined to 14.3% from 16.0% due to commodity and labor inflation.

Financial highlights

• Q3 2025 diluted EPS was $1.25, down 0.8% year-over-year; net income declined 1.5% to $83.2 million.

• Restaurant margin as a percentage of sales fell 168 bps to 14.3% due to 7.9% commodity inflation and 3.9% wage inflation.

• Cash flow from operations for the first nine months was $509.6 million; capital expenditures totaled $298.8 million; $100 million spent on share repurchases.

• Cash and cash equivalents at quarter-end: $108.2 million; no outstanding borrowings under the $450 million credit facility.

• Quarterly dividend increased to $0.68 per share; $135.4 million paid year-to-date.

Outlook and guidance

• 2025 guidance: commodity inflation ~6%, wage inflation ~4%, effective tax rate ~14.5%, capital expenditures ~$400 million.

• 2026 initial outlook: store week growth 5–6%, commodity inflation ~7%, wage inflation 3–4%, effective tax rate ~15%, capital expenditures ~$400 million.

• Wage and labor inflation guidance: 4% for 2025, 3–4% for 2026, with 1% from mandated increases.

• Q4 2025 will lap a 14-week quarter from last year, expected to have ~10% negative year-over-year impact on EPS growth.

• Menu price increase of 1.7% implemented in Q4 2025.