top of page

Texas Roadhouse Earnings: Sales Top $1.5B as Traffic Drives Record Quarter

  • Writer: Hardik Shah
    Hardik Shah
  • Aug 7
  • 3 min read
Texas Roadhouse Q2'25 Earnings Summary
Source: Texas Roadhouse Investor Relations site

TLDR


• Revenue Strength:Q2 revenue rose 12.7% to $1.51B, driven by 5.8% same-store sales growth and strong traffic across all brands.

• Margin Trends:Restaurant margin contracted 108 bps to 17.1% due to 5.2% commodity inflation and higher beef costs.

• Forward Outlook:Expect continued traffic gains, tempered by beef inflation peaking in Q3 and a 1.7% menu price increase in Q4.


Business Overview


Texas Roadhouse, Inc. (NASDAQ: TXRH) operates over 800 restaurants across its three brands: Texas Roadhouse, Bubba’s 33, and Jaggers, spanning 49 U.S. states, one territory, and ten foreign countries. It serves the casual dining segment with a focus on hand-cut steaks, made-from-scratch sides, and a strong value proposition. The company generates the majority of its revenue through in-restaurant dining, with a growing To-Go channel contributing 13.3% of weekly sales.


Texas Roadhouse Earnings Q2'25


  • Total Revenue: $1.51B, up 12.7%

  • Same-Store Sales: +5.8% (driven by 4% traffic and 1.8% check growth)

  • Average Weekly Sales: $167.4K per restaurant; $22.2K from To-Go

  • Restaurant Margin: 17.1%, down 108 bps

  • EPS (Diluted): $1.86, up 4.0%

  • Net Income: $124.1M, up 3.3%

“Strong traffic growth throughout the quarter drove a 5.8% increase in same-store sales. As a result, our revenue... grew to over $1.5 billion for the first time in our history.” — CEO Jerry Morgan

Forward Guidance


  • Commodity Inflation: Revised to ~5% for full-year 2025 (up from prior due to beef costs)

  • Labor Inflation: Guided to ~4% (previously higher)

  • Q3 Beef Inflation: Expected to peak at ~7%

  • Menu Price Hike: 1.7% increase to be implemented in Q4

  • Effective Tax Rate: ~15% for FY2025

“We feel confident this is the right level of pricing to maintain our everyday value while offsetting some of the inflationary pressures.” — Jerry Morgan

Risks & Opportunities:

  • Risks include elevated beef inflation, labor costs, and macro uncertainty.

  • Opportunities include continued growth in To-Go, new unit openings (including international), and rising mocktail category engagement.


Operational Performance


  • Opened 4 company-owned restaurants in Q2, reaching 800+ systemwide.

  • Acquired 3 franchised units, totaling 17 YTD, with plans for 3 more in Q4 and all remaining California franchises by 2026.

  • Bubba’s 33 showed strong growth with average weekly sales over $128K; Jaggers hit $76K.

  • Digital kitchen rollout is 80% complete, improving labor efficiency and throughput.

“We believe Bubba's 33... has a sound infrastructure and a seasoned management team in place who can execute our road to 200 locations strategy.” — Jerry Morgan

Market Insights


  • Commodity inflation, particularly beef, remains elevated due to tight supply and strong retail demand.

  • Management noted that retailers are promoting beef, but not irrationally. Prices are supported by resilient consumer demand.

“What we've seen this year is the consumer willing to pay... and a supply that has been very tight.” — CFO Michael Bailen

Consumer Behavior & Sentiment


  • Alcohol mix remains a drag, though consumers are still trading up to premium steaks and engaging with mocktails.

  • Off-premise sales continue to grow faster than dine-in, driven by improved app experience, digital kitchen efficiency, and higher order accuracy.

“When they get home, they have their items... We’ve just gotten better at it.” — Jerry Morgan on To-Go execution

Strategic Initiatives


  • Emphasis on development and acquisition: 30 new company-owned restaurants expected in 2025.

  • Bubba’s 33 and Jaggers are key to long-term growth, with Jaggers franchise and company unit growth expected to accelerate in 2026.

  • Plans in motion to acquire the corporate support center buildings for $23M to reduce long-term rent expenses.


Capital Allocation


  • Dividends: $0.68 per share (+11.5% YoY)

  • Share Repurchases: $9.8M in Q2; $60M YTD

  • Cash & Equivalents: $177M

  • CapEx: $92.5M in Q2; $400M full-year target maintained

“We expect our dividend will continue to increase annually... and at a minimum, we will repurchase shares to offset dilution.” — Interim CFO Keith Humpich

The Bottom Line


Texas Roadhouse delivered a record-breaking Q2 with top-line growth driven by strong traffic and new unit development across all brands. While food inflation, particularly in beef, remains a headwind, management is actively balancing price, value, and margin discipline. With strategic investments in digital kitchens, new concept growth (Bubba’s 33 and Jaggers), and share repurchases, the company remains confident in its long-term trajectory.


Watch for:

  • Beef inflation trends into Q4

  • To-Go channel sustainability

  • Jaggers’ performance as unit count rises

  • Operating leverage as digital kitchens mature


--

Stay informed. We break down earnings, trends, and policy shifts shaping consumer staples and adjacent industries — no paywalls, no newsletters, just actionable insights wherever you scroll. Follow us on LinkedIn and X for more.


Comments

bottom of page