Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2025
OR
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission File Number 000-50972
Texas Roadhouse, Inc.
(Exact name of registrant specified in its charter)
Delaware
20-1083890
(State or other jurisdiction of
(IRS Employer
incorporation or organization)
Identification Number)
6040 Dutchmans Lane
Louisville, Kentucky 40205
(Address of principal executive offices) (Zip Code)
(502) 426-9984
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
Common Stock, par value $0.001 per share
TXRH
NASDAQ Global Select Market
Indicate by check mark whether registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large Accelerated Filer ☒
Accelerated Filer ☐
Non-accelerated Filer ☐
Smaller Reporting Company ☐
Emerging Growth Company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
The number of shares of common stock outstanding were 66,146,079 on October 29, 2025.
TABLE OF CONTENTS
PART I. FINANCIAL INFORMATION
Item 1 — Financial Statements (Unaudited) — Texas Roadhouse, Inc. and Subsidiaries
3
Condensed Consolidated Balance Sheets —September 30, 2025 and December 31, 2024
Condensed Consolidated Statements of Income — For the 13 and 39 Weeks Ended September 30, 2025 and September 24, 2024
4
Condensed Consolidated Statements of Stockholders’ Equity — For the 13 and 39 Weeks Ended September 30, 2025 and September 24, 2024
5
Condensed Consolidated Statements of Cash Flows — For the 39 Weeks Ended September 30, 2025 and September 24, 2024
7
Notes to Condensed Consolidated Financial Statements
8
Item 2 — Management’s Discussion and Analysis of Financial Condition and Results of Operations
16
Item 3 — Quantitative and Qualitative Disclosures About Market Risk
28
Item 4 — Controls and Procedures
PART II. OTHER INFORMATION
Item 1 — Legal Proceedings
29
Item 1A — Risk Factors
Item 2 — Unregistered Sales of Equity Securities and Use of Proceeds
Item 3 — Defaults Upon Senior Securities
Item 4 — Mine Safety Disclosures
Item 5 — Other Information
30
Item 6 — Exhibits
Signatures
31
2
PART I — FINANCIAL INFORMATION
ITEM 1 — FINANCIAL STATEMENTS
Texas Roadhouse, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(in thousands, except share and per share data)
(unaudited)
September 30, 2025
December 31, 2024
Assets
Current assets:
Cash and cash equivalents
$
108,172
245,225
Receivables, net of allowance for doubtful accounts of $14 at September 30, 2025 and $7 at December 31, 2024
61,125
193,170
Inventories, net
45,476
40,756
Prepaid expenses and other current assets
34,593
37,417
Total current assets
249,366
516,568
Property and equipment, net of accumulated depreciation of $1,333,531 at September 30, 2025 and $1,223,064 at December 31, 2024
1,787,789
1,617,673
Operating lease right-of-use assets, net
841,964
769,865
Goodwill
230,305
169,684
Intangible assets, net of accumulated amortization of $28,061 at September 30, 2025 and $23,147 at December 31, 2024
13,132
1,265
Other assets
144,057
115,724
Total assets
3,266,613
3,190,779
Liabilities and Stockholders’ Equity
Current liabilities:
Current portion of operating lease liabilities
29,956
28,172
Accounts payable
141,464
144,791
Deferred revenue-gift cards
248,560
401,198
Accrued wages
93,888
101,981
Income taxes payable
97
2,986
Accrued taxes and licenses
55,678
56,824
Other accrued liabilities
119,188
92,178
Total current liabilities
688,831
828,130
Operating lease liabilities, net of current portion
903,788
826,300
Restricted stock and other deposits
9,420
9,288
Deferred tax liabilities, net
9,724
8,184
Other liabilities
179,241
145,154
Total liabilities
1,791,004
1,817,056
Texas Roadhouse, Inc. and subsidiaries stockholders’ equity:
Preferred stock ($0.001 par value, 1,000,000 shares authorized; no shares issued or outstanding)
—
Common stock ($0.001 par value, 100,000,000 shares authorized, 66,228,169 and 66,574,626 shares issued and outstanding at September 30, 2025 and December 31, 2024, respectively)
66
67
Retained earnings
1,460,401
1,358,280
Total Texas Roadhouse, Inc. and subsidiaries stockholders’ equity
1,460,467
1,358,347
Noncontrolling interests
15,142
15,376
Total equity
1,475,609
1,373,723
Total liabilities and equity
See accompanying notes to condensed consolidated financial statements.
Condensed Consolidated Statements of Income
(in thousands, except per share data)
13 Weeks Ended
39 Weeks Ended
September 24, 2024
Revenue:
Restaurant and other sales
1,429,111
1,265,279
4,373,427
3,913,073
Royalties and franchise fees
7,231
7,720
22,617
22,345
Total revenue
1,436,342
1,272,999
4,396,044
3,935,418
Costs and expenses:
Restaurant operating costs (excluding depreciation and amortization shown separately below):
Food and beverage
511,531
424,566
1,513,846
1,305,658
Labor
480,297
427,470
1,455,321
1,293,229
Rent
23,085
20,162
68,590
59,543
Other operating
209,917
191,011
634,762
581,515
Pre-opening
7,419
7,282
19,695
21,579
Depreciation and amortization
52,628
44,510
152,172
128,918
Impairment and closure, net
140
844
279
1,135
General and administrative
54,376
55,131
173,356
165,874
Total costs and expenses
1,339,393
1,170,976
4,018,021
3,557,451
Income from operations
96,949
102,023
378,023
377,967
Interest income, net
643
1,916
2,988
5,007
Equity income from investments in unconsolidated affiliates
120
235
1,771
778
Income before taxes
97,712
104,174
382,782
383,752
Income tax expense
12,812
17,400
55,130
57,913
Net income including noncontrolling interests
84,900
86,774
327,652
325,839
Less: Net income attributable to noncontrolling interests
1,728
2,362
6,733
8,080
Net income attributable to Texas Roadhouse, Inc. and subsidiaries
83,172
84,412
320,919
317,759
Net income per common share attributable to Texas Roadhouse, Inc. and subsidiaries:
Basic
1.25
1.27
4.84
4.76
Diluted
1.26
4.82
4.74
Weighted average shares outstanding:
66,358
66,704
66,373
66,777
66,476
66,943
66,564
67,023
Cash dividends declared per share
0.68
0.61
2.04
1.83
Condensed Consolidated Statements of Stockholders' Equity
For the 13 Weeks Ended September 30, 2025
Total Texas
Additional
Roadhouse, Inc.
Par
Paid-in-
Retained
and
Noncontrolling
Shares
Value
Capital
Earnings
Subsidiaries
Interests
Total
Balance, July 1, 2025
66,450,572
1,450,728
1,450,794
15,428
1,466,222
Net income
Distributions to noncontrolling interest holders
(2,014)
Dividends declared ($0.68 per share)
(45,075)
Shares issued under share-based compensation plans including tax effects
11,506
Indirect repurchase of shares for minimum tax withholdings
(3,369)
(603)
Repurchase of shares of common stock, including excise tax as applicable
(230,540)
(11,977)
(28,424)
(40,401)
Share-based compensation
12,580
Balance, September 30, 2025
66,228,169
For the 13 Weeks Ended September 24, 2024
Balance, June 25, 2024
66,727,898
1,262,569
1,262,636
15,054
1,277,690
(2,485)
Acquisition of noncontrolling interest, net of deferred taxes
(23)
23
Dividends declared ($0.61 per share)
(40,696)
60,735
(18,562)
(3,198)
(56,248)
(11,555)
1,938
(9,617)
14,776
Balance, September 24, 2024
66,713,823
1,308,223
1,308,290
14,954
1,323,244
For the 39 Weeks Ended September 30, 2025
Balance, December 31, 2024
66,574,626
(6,967)
Dividends declared ($2.04 per share)
(135,367)
330,453
(103,581)
(18,686)
Repurchase of shares of common stock, including excise taxes
(573,329)
(1)
(17,143)
(83,431)
(100,575)
35,829
For the 39 Weeks Ended September 24, 2024
Balance, December 26, 2023
66,789,464
1,141,595
1,141,662
15,849
1,157,511
(8,110)
(3,297)
(865)
(4,162)
Dividends declared ($1.83 per share)
(122,205)
295,519
(92,246)
(14,027)
(278,914)
(15,830)
(28,926)
(44,756)
33,154
6
Condensed Consolidated Statements of Cash Flows
(in thousands)
Cash flows from operating activities:
Adjustments to reconcile net income to net cash provided by operating activities:
Deferred income taxes
2,011
(9,592)
Loss on disposition of assets
4,078
2,842
Impairment and closure costs
83
826
(1,771)
(778)
Distributions of income received from investments in unconsolidated affiliates
761
799
Provision for doubtful accounts
(22)
Share-based compensation expense
Changes in operating working capital, net of acquisitions:
Receivables
132,064
123,155
Inventories
(3,775)
(1,522)
8,798
10,394
(26,202)
(15,566)
(162)
3,166
Deferred revenue—gift cards
(154,539)
(147,287)
(8,155)
20,636
Prepaid income taxes and income taxes payable
(8,667)
5,923
(1,463)
6,849
9,680
(98)
Operating lease right-of-use assets and lease liabilities
7,114
4,845
34,087
23,608
Net cash provided by operating activities
509,602
516,089
Cash flows from investing activities:
Capital expenditures—property and equipment
(298,808)
(246,539)
Acquisitions of franchise restaurants, net of cash acquired
(94,230)
Proceeds from sale of investments in unconsolidated affiliates
1,329
Proceeds from sale of property and equipment
1,200
197
Proceeds from sale leaseback transactions
6,307
9,126
Net cash used in investing activities
(384,202)
(237,216)
Cash flows from financing activities:
Debt issuance costs
(1,525)
Acquisitions of noncontrolling interests
(5,279)
Proceeds from restricted stock and other deposits, net
506
396
Repurchase of shares of common stock, including excise taxes as applicable
(100,414)
(44,689)
Dividends paid to shareholders
Net cash used in financing activities
(262,453)
(193,914)
Net (decrease) increase in cash and cash equivalents
(137,053)
84,959
Cash and cash equivalents—beginning of period
104,246
Cash and cash equivalents—end of period
189,205
Supplemental disclosures of cash flow information:
Interest paid
690
669
Income taxes paid
61,786
61,804
Capital expenditures included in current liabilities
46,963
42,641
(tabular amounts in thousands, except per share data)
(1) Basis of Presentation
The accompanying unaudited condensed consolidated financial statements include the accounts of Texas Roadhouse, Inc., our wholly owned subsidiaries and subsidiaries in which we have a controlling interest (collectively, the "Company," "we," "our" and/or "us") as of September 30, 2025 and December 31, 2024 and for the 13 and 39 weeks ended September 30, 2025 and September 24, 2024.
The Company maintains three restaurant concepts operating as Texas Roadhouse, Bubba’s 33, and Jaggers. As of September 30, 2025, we owned and operated 702 restaurants and franchised an additional 104 restaurants in 49 states, one U.S. territory, and ten foreign countries. Of the 104 franchise restaurants, there were 44 domestic restaurants and 60 international restaurants, including one in a U.S. territory. As of September 24, 2024, we owned and operated 657 restaurants and franchised an additional 115 restaurants in 49 states, one U.S. territory, and ten foreign countries. Of the 115 franchise restaurants, there were 59 domestic restaurants and 56 international restaurants, including one in a U.S. territory.
As of September 30, 2025 and September 24, 2024, we owned a majority interest in 19 company restaurants. The operating results of these majority-owned restaurants are consolidated and the portion of income attributable to noncontrolling interests is reflected in the line item net income attributable to noncontrolling interests in our unaudited condensed consolidated statements of income.
As of September 30, 2025 and September 24, 2024, we owned a 5.0% to 10.0% equity interest in 17 and 20 domestic franchise restaurants, respectively. These unconsolidated restaurants are accounted for using the equity method. Our investments in these unconsolidated affiliates are included in other assets in our unaudited condensed consolidated balance sheets, and we record our percentage share of net income earned by these unconsolidated affiliates under equity income from investments in unconsolidated affiliates in our unaudited condensed consolidated statements of income.
We have made a number of estimates and assumptions relating to the reporting of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the unaudited condensed consolidated financial statements, and the reporting of revenue and expenses during the periods to prepare these unaudited condensed consolidated financial statements in conformity with U.S. generally accepted accounting principles ("GAAP"). Significant items subject to such estimates and assumptions include the valuation of property and equipment, goodwill, lease liabilities and right-of-use assets, obligations related to insurance reserves, legal reserves, income taxes, and gift card breakage. Actual results could differ from those estimates.
In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all adjustments, consisting only of normal recurring adjustments, necessary to present fairly our unaudited condensed consolidated financial statements for the periods presented. The unaudited condensed consolidated financial statements have been prepared in accordance with GAAP, except that certain information and footnotes have been condensed or omitted pursuant to rules and regulations of the Securities and Exchange Commission. Operating results for the 13 and 39 weeks ended September 30, 2025 are not necessarily indicative of the results that may be expected for the fiscal year ending December 30, 2025. The unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024.
Our significant interim accounting policies include the recognition of income taxes using an estimated annual effective tax rate.
(2) Recent Accounting Pronouncements
In December 2023, the Financial Accounting Standards Board (the "FASB") issued Accounting Standards Update ("ASU") 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. This ASU primarily provides enhanced disclosures about an entity’s income tax including requiring consistent categories, greater disaggregation of the information included in the rate reconciliation, and income taxes paid disaggregated by jurisdiction. The amendments in this update are effective for fiscal years beginning after December 15, 2024, with early adoption permitted, and may be applied on a prospective or retrospective basis. We are currently assessing the impact of this new standard on our income tax disclosures and expect to provide additional detail and disclosures under this new guidance.
In November 2024, the FASB issued ASU 2024-03, Income Statement – Reporting Comprehensive Income (Subtopic 220-40): Disaggregation of Income Statement Expenses. This ASU primarily provides enhanced disclosures about the components of expenses within the income statement including purchases of inventory, employee compensation, depreciation, and intangible asset amortization. The amendments in this update, as clarified by ASU 2025-01, are effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted, and may be applied on a prospective or retrospective basis. We are currently assessing the impact of this new standard on our disclosures and expect to provide additional detail and disclosures under this new guidance.
(3) Long-term Debt
On April 24, 2025, we entered into an agreement for a revolving credit facility (the "credit facility") with a syndicate of commercial lenders led by JPMorgan Chase Bank, N.A. and PNC Bank, N.A. This credit facility superseded and replaced our previous credit facility.
The credit facility is an unsecured, revolving credit agreement and has a borrowing capacity of up to $450.0 million with the option to increase the capacity by an additional $250.0 million, subject to certain limitations, including approval by the syndicate of lenders. The credit facility has a maturity date of April 24, 2030.
We are required to pay interest on outstanding borrowings at the Term Secured Overnight Financing Rate ("SOFR"), plus a fixed adjustment of 0.10% and a variable adjustment of 1.00% to 1.75% depending on our consolidated net leverage ratio.
As of September 30, 2025, we had no outstanding borrowings under the credit facility and had $446.8 million of availability, net of $3.2 million of outstanding letters of credit. As of December 31, 2024, we had no outstanding borrowings under the previous credit facility and had $296.8 million of availability, net of $3.2 million of outstanding letters of credit.
The interest rate for each credit facility as of September 30, 2025 and September 24, 2024 was 5.34% and 5.72%, respectively.
The lenders’ obligation to extend credit pursuant to the credit facility depends on us maintaining certain financial covenants, including a minimum consolidated fixed charge ratio and a maximum consolidated leverage ratio. The credit facility permits us to incur additional secured or unsecured indebtedness, except for the incurrence of secured indebtedness that in the aggregate is equal to or greater than $125.0 million and 20% of our consolidated tangible net worth. We were in compliance with all financial covenants as of September 30, 2025.
9
(4) Revenue
The following table disaggregates our revenue by major source:
Royalties
6,545
6,808
20,790
20,601
Franchise fees
686
912
1,827
1,744
The following table presents a rollforward of deferred revenue-gift cards:
Beginning balance
277,293
250,485
373,913
Gift card activations, net of third-party fees
61,572
56,527
205,054
191,409
Gift card redemptions and breakage
(90,305)
(80,386)
(357,692)
(338,696)
Ending balance
226,626
We recognized restaurant sales of $36.0 million and $228.2 million for the 13 and 39 weeks ended September 30, 2025, respectively, related to amounts in deferred revenue as of December 31, 2024. We recognized restaurant sales of $26.1 million and $210.1 million for the 13 and 39 weeks ended September 24, 2024, respectively, related to amounts in deferred revenue as of December 26, 2023.
(5) Income Taxes
The effective tax rate was 13.1% and 16.7% for the 13 weeks ended September 30, 2025 and September 24, 2024, respectively. The effective tax rate was 14.4% and 15.1% for the 39 weeks ended September 30, 2025 and September 24, 2024, respectively. The decreases in the tax rates for the 13 and 39 weeks ended September 30, 2025 compared to the prior year periods were primarily due to an increase in the impact of the FICA tip tax credit.
(6)
Commitments and Contingencies
The estimated cost of completing capital project commitments at September 30, 2025 and December 31, 2024 was $234.3 million and $243.6 million, respectively.
As of September 30, 2025 and December 31, 2024, we were contingently liable for $8.7 million and $9.4 million, respectively, for seven lease guarantees. These amounts represent the maximum potential liability of future payments under the guarantees. In the event of default, the indemnity and default clauses in our assignment agreements govern our ability to pursue and recover damages incurred. No liabilities have been recorded as of September 30, 2025 and December 31, 2024, as the likelihood of default was deemed to be less than probable and the fair value of the guarantees is not considered significant.
During the 13 and 39 weeks ended September 30, 2025 and September 24, 2024, we bought our beef primarily from four suppliers. Although there are a limited number of beef suppliers, we believe that other suppliers could provide a similar product on comparable terms. We have no material minimum purchase commitments with our vendors that extend beyond a year.
Occasionally, we are a defendant in litigation arising in the ordinary course of business, including "slip and fall" matters, employment related claims, dram shop statutes related to our service of alcohol, and claims from guests or
10
employees alleging illness, injury or food quality, health, or operational concerns. None of these types of litigation, most of which are covered by insurance with varying retention levels, has had a material adverse effect on us and, as of the date of this report, we are not party to any litigation that we believe could have a material adverse effect on our business.
(7) Acquisitions
Business Combinations
During the 39 weeks ended September 30, 2025, we completed the acquisitions of 17 domestic franchise Texas Roadhouse restaurants. Pursuant to the terms of the acquisition agreements, we paid a total purchase price of $94.2 million, net of cash acquired.
These transactions were accounted for using the acquisition method as defined in Accounting Standards Codification ("ASC") 805, Business Combinations. These acquisitions are consistent with our long-term strategy to increase net income and earnings per share.
We held a 5% equity interest in one of the restaurants acquired and a 10% equity interest in two of the restaurants acquired. These transactions were accounted for as step acquisitions and we recorded a gain of $1.2 million on our previous investments in equity income from investments in unconsolidated affiliates in the unaudited condensed consolidated statements of income.
The following table summarizes the consideration paid for these acquisitions, and the estimated fair value of the assets acquired and the liabilities assumed at the acquisition dates, which are adjusted for measurement-period adjustments through September 30, 2025.
Current assets
1,167
Property and equipment
20,020
Operating lease right-of-use assets
39,755
60,622
Intangible assets
16,780
470
(1,383)
(1,901)
Current liabilities
(1,148)
(40,152)
94,230
The aggregate purchase price is preliminary as we are finalizing working capital adjustments. Intangible assets represent reacquired franchise rights which are being amortized over a weighted-average useful life of 4.1 years. We expect all of the goodwill will be deductible for tax purposes and believe the resulting amount of goodwill reflects the benefit of sales and unit growth opportunities as well as the benefit of the assembled workforce of the acquired restaurants.
Pro forma financial detail and operating results have not been presented as the results of the acquired restaurants are not material to our unaudited condensed consolidated financial position, results of operations, or cash flows.
Asset Acquisition
During the 13 weeks ended September 30, 2025, we completed the acquisition of our previously leased office buildings in Louisville, Kentucky that house our Support Center, for a total purchase price of $22.8 million. The transaction was accounted for as an asset acquisition in accordance with ASC 805, Business Combinations. The allocation of the purchase price among the acquired assets, which consisted of land and building improvements, was based on their relative fair value as of the acquisition date.
11
(8) Related Party Transactions
As of September 30, 2025 and September 24, 2024, we had five franchise restaurants and one majority-owned company restaurant owned in part by current officers of the Company. We recognized revenue of $0.6 million for each of the 13 weeks ended September 30, 2025 and September 24, 2024 related to the five franchise restaurants. We recognized revenue of $1.9 million and $1.8 million for the 39 weeks ended September 30, 2025 and September 24, 2024, respectively, related to the five franchise restaurants.
(9) Earnings Per Share
The share and net income per share data for all periods presented are based on the historical weighted-average shares outstanding. The diluted earnings per share calculations show the effect of the weighted-average restricted stock units outstanding from our equity incentive plans. Performance stock units are not included in the diluted earnings per share calculation until the performance-based criteria have been met.
For all periods presented, the weighted-average shares of nonvested stock units that were outstanding but not included in the computation of diluted earnings per share because they would have had an anti-dilutive effect were not significant.
The following table sets forth the calculation of earnings per share and weighted-average shares outstanding as presented in the accompanying unaudited condensed consolidated statements of income:
Basic EPS:
Weighted-average common shares outstanding
Basic EPS
Diluted EPS:
Dilutive effect of nonvested stock units
118
239
191
246
Shares-diluted
Diluted EPS
(10) Fair Value Measurements
At September 30, 2025 and December 31, 2024, the fair values of cash and cash equivalents, accounts receivable, and accounts payable approximated their carrying values based on the short-term nature of these instruments. There were no transfers among levels within the fair value hierarchy during the 13 and 39 weeks ended September 30, 2025.
The following table presents the fair values for our financial assets and liabilities measured on a recurring basis:
Fair Value Measurements
Level
Deferred compensation plan—assets
1
127,526
101,071
Deferred compensation plan—liabilities
(127,526)
(101,071)
We report the accounts of the deferred compensation plan in other assets and the corresponding liability in other liabilities in our unaudited condensed consolidated balance sheets. These investments are considered trading securities and are reported at fair value based on quoted market prices. The realized and unrealized holding gains and losses related
12
to these investments, as well as the offsetting compensation expense, are recorded in general and administrative expense in the unaudited condensed consolidated statements of income.
(11) Stock Repurchase Programs
On February 19, 2025, our Board of Directors (the "Board") approved a stock repurchase program under which we may repurchase up to $500.0 million of our common stock. This stock repurchase program commenced on February 24, 2025, has no expiration date, and replaced a previous stock repurchase program which was approved on March 17, 2022 that authorized the Company to repurchase up to $300.0 million of our common stock. All repurchases to date under our stock repurchase programs have been made through open market transactions. The timing and the amount of any repurchases are determined by management under parameters established by the Board, based on an evaluation of our stock price, market conditions, and other corporate considerations, including complying with Rule 10b5-1 trading arrangements under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and as applicable.
For the 13 and 39 weeks ended September 30, 2025, we paid $40.0 million and $100.0 million, excluding excise taxes, to repurchase 230,540 shares and 573,329 shares of our common stock, respectively. This includes $70.0 million repurchased under our current authorization and $30.0 million repurchased under our prior authorization. For the 13 and 39 weeks ended September 24, 2024, we paid $9.6 million and $44.7 million, excluding excise taxes, to repurchase 56,248 and 278,914 shares of our common stock, respectively. As of September 30, 2025, $430.0 million remained under our authorized stock repurchase program.
(12) Segment Information
Our chief operating decision maker (the "CODM") is the Chief Executive Officer. The CODM assesses the performance of the business and allocates resources at the concept level and as a result we have identified Texas Roadhouse, Bubba's 33, Jaggers, and our retail initiatives as separate operating segments. Our reportable segments are Texas Roadhouse and Bubba's 33. The Texas Roadhouse reportable segment includes the results of our company and franchise Texas Roadhouse restaurants. The Bubba's 33 reportable segment includes the results of our company Bubba's 33 restaurants. Our remaining operating segments, which include the results of our company and franchise Jaggers restaurants and the results of our retail initiatives, are included in Other. In addition, corporate-related assets, depreciation and amortization, and capital expenditures are also included in Other.
The CODM uses restaurant margin as the primary financial measure for assessing the performance of our segments. Restaurant margin represents restaurant and other sales less restaurant-level operating costs, including food and beverage costs, labor, rent, and other operating costs. Restaurant margin is also used by our CODM to evaluate core restaurant-level operating efficiency and performance, assist in the evaluation of operating trends over time, and in making capital allocation decisions. Capital allocation decisions include approving new store openings and the refurbishment, expansion, or relocation of existing restaurants.
In calculating restaurant margin, we exclude certain non-restaurant-level costs that support operations, including pre-opening and general and administrative expenses, but do not have a direct impact on restaurant-level operational efficiency and performance. We exclude pre-opening expenses as they occur at irregular intervals and would impact comparability to prior period results. We exclude depreciation and amortization expenses, substantially all of which relate to restaurant-level assets, as it represents a non-cash charge for the investment in our restaurants. We exclude impairment and closure expenses as we believe this provides a clearer perspective of the Company’s ongoing operating performance and a more useful comparison to prior period results. Restaurant margin as presented may not be comparable to other similarly titled measures of other companies in our industry.
Restaurant and other sales for all operating segments are derived primarily from food and beverage sales. We do not rely on any major customer as a source of sales and the customers and assets of our reportable segments are located predominantly in the United States. There are no material transactions between reportable segments.
13
The following tables reconcile our segment results to our consolidated results reported in accordance with GAAP:
Texas Roadhouse
Bubba's 33
Other
1,336,660
82,922
9,529
Restaurant operating costs (excluding depreciation and amortization)
Food and Beverage
484,872
23,612
3,047
446,368
30,907
3,022
20,706
2,091
288
Other Operating
192,786
15,263
1,868
Restaurant margin
191,928
11,049
1,304
204,281
43,773
4,800
4,055
Segment assets
2,613,014
289,606
363,993
Capital expenditures
94,945
10,797
23,154
128,896
1,184,125
73,416
7,738
401,259
20,815
2,492
397,780
27,223
2,467
17,992
1,969
201
176,545
12,919
1,547
190,549
10,490
1,031
202,070
37,372
4,150
2,286,417
244,773
382,625
2,913,815
81,882
6,735
2,444
91,061
4,097,648
248,724
27,055
1,435,234
70,058
8,554
1,356,696
90,078
8,547
61,625
6,173
792
585,296
44,231
5,235
658,797
38,184
3,927
700,908
126,103
13,679
12,390
232,803
36,705
29,300
298,808
14
3,672,510
217,501
23,062
1,237,878
60,516
7,264
1,207,106
78,941
7,182
53,274
5,664
605
539,928
37,161
4,426
634,324
35,219
3,585
673,128
108,327
11,961
8,630
214,815
25,268
6,456
246,539
A reconciliation of restaurant margin to income from operations is presented below. We do not allocate interest income, net and equity income from investments in unconsolidated affiliates to reportable segments.
Add:
Less:
15
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
CAUTIONARY STATEMENT
This report contains forward-looking statements based on our current expectations, estimates, and projections about our industry and certain assumptions made by us. Words such as "anticipates," "expects," "intends," "plans," "believes," "seeks," "estimates," "may," "will," and variations of these words or similar expressions are intended to identify forward-looking statements. In addition, any statements that refer to expectations, projections, or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. Such statements are not guarantees of future performance and are subject to certain risks, uncertainties, and assumptions that are difficult to predict. Therefore, our actual results could differ materially and adversely from those expressed in any forward-looking statements as a result of various factors. The section entitled "Risk Factors" in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, and in Part II, Item 1A in this Form 10-Q, along with disclosures in our other Securities and Exchange Commission ("SEC") filings discuss some of the important risk factors that may affect our business, results of operations, or financial condition. You should carefully consider those risks, in addition to the other information in this report, and in our other filings with the SEC, before deciding to invest in our Company or to maintain or increase your investment. We undertake no obligation to revise or update publicly any forward-looking statements, except as may be required by applicable law. The information contained in this Form 10-Q is not a complete description of our business or the risks associated with an investment in our common stock. We urge you to carefully review and consider the various disclosures made by us in this report and in our other reports filed with the SEC that discuss our business in greater detail and advise interested parties of certain risks, uncertainties, and other factors that may affect our business, results of operations, or financial condition.
Our Company
Texas Roadhouse, Inc. is a growing restaurant company operating predominantly in the casual dining segment. Our late founder, W. Kent Taylor, started the Company in 1993 with the opening of the first Texas Roadhouse restaurant in Clarksville, Indiana. Since then, we have grown to three concepts with 806 restaurants in 49 states, one U.S. territory, and ten foreign countries. As of September 30, 2025, our 806 restaurants included:
We have contractual arrangements that grant us the right to acquire at pre-determined formulas the equity interests in 17 of the 19 majority-owned company restaurants and 39 of the 44 systemwide domestic franchise restaurants.
Throughout this report, we use the term "restaurants" to include Texas Roadhouse and Bubba’s 33, unless otherwise noted.
Presentation of Financial and Operating Data
Throughout this report, the 13 weeks ended September 30, 2025 and September 24, 2024, are referred to as Q3 2025 and Q3 2024, respectively. The 39 weeks ended September 30, 2025 and September 24, 2024, are referred to as 2025 YTD and 2024 YTD, respectively. Fiscal year 2025 will be 52 weeks in length, with the quarters 13 weeks in length. Fiscal year 2024 was 53 weeks in length, with the fourth quarter 14 weeks in length.
Key Measures We Use to Evaluate Our Company
Key measures we use to evaluate and assess our business include the following:
In calculating restaurant margin, we exclude certain non-restaurant-level costs that support operations, including pre-opening and general and administrative expenses, but do not have a direct impact on restaurant-level operational efficiency and performance. We exclude pre-opening expenses as they occur at irregular intervals and would impact comparability to prior period results. We exclude depreciation and amortization expenses, substantially all of which relate to restaurant-level assets, as they represent a non-cash charge for the investment in our restaurants. We exclude impairment and closure expenses as we believe this provides a clearer perspective of the Company’s ongoing operating performance and a more useful comparison to prior period results. Restaurant margin as presented may not be comparable to other similarly titled measures of other companies in our industry. A reconciliation of income from operations to restaurant margin is included in the Results of Operations section below.
17
Other Key Definitions
18
Q3 2025 Financial Highlights
Total revenue increased $163.3 million or 12.8% to $1,436.3 million in Q3 2025 compared to $1,273.0 million in Q3 2024 primarily due to an increase in store weeks and comparable restaurant sales. Store weeks and comparable restaurant sales increased 6.8% and 6.1%, respectively, at company restaurants in Q3 2025 compared to Q3 2024. The increase in store weeks was due to new store openings and the acquisition of franchise restaurants. The increase in comparable restaurant sales was due to an increase in guest traffic along with an increase in per person average check.
Net income decreased $1.2 million or 1.5% to $83.2 million in Q3 2025 compared to $84.4 million in Q3 2024 as the increase in revenue was more than offset by increases in food and beverage costs and depreciation and amortization expenses. In addition, income tax expense decreased due to the decrease in profitability. Diluted earnings per share decreased 0.8% to $1.25 in Q3 2025 from $1.26 in Q3 2024 due to the decrease in net income partially offset by the impact of share repurchases.
Restaurant margin dollars increased $2.2 million or 1.1% to $204.3 million in Q3 2025 compared to $202.1 million in Q3 2024 primarily due to higher sales. Restaurant margin, as a percentage of restaurant and other sales, decreased to 14.3% in Q3 2025 compared to 16.0% in Q3 2024. The decrease in restaurant margin, as a percentage of restaurant and other sales, was primarily due to commodity inflation of 7.9% and wage and other labor inflation of 3.9% partially offset by higher sales.
Capital allocation spend included capital expenditures of $128.9 million, dividends of $45.1 million, and repurchases of common stock of $40.0 million.
19
Results of Operations
%
Condensed Consolidated Statements of Income:
99.5
99.4
0.5
0.6
100.0
(As a percentage of restaurant and other sales)
35.8
33.5
34.6
33.4
33.6
33.8
33.3
33.0
1.6
1.5
14.7
15.1
14.5
14.9
(As a percentage of total revenue)
0.4
3.7
3.5
3.3
NM
0.1
3.8
4.3
3.9
4.2
93.3
92.0
91.4
90.4
6.7
8.0
8.6
9.6
0.2
6.8
8.2
8.7
9.8
0.9
1.4
1.3
5.9
7.5
8.3
Net income attributable to noncontrolling interests
5.8
6.6
7.3
8.1
NM — Not meaningful
20
Reconciliation of Income from Operations to Restaurant Margin
($ In thousands, except restaurant margin $ per store week)
$ 102,023
$ 202,070
Restaurant margin $/store week
22,513
23,784
26,004
26,725
Restaurant margin (as a percentage of restaurant and other sales)
14.3%
16.0%
17.2%
See above for the definition of restaurant margin.
Restaurant Unit Activity
Jaggers
Balance at December 31, 2024
784
721
49
Company openings
Franchise openings - Domestic
Franchise openings - International
Balance at September 30, 2025
806
736
54
Company - Texas Roadhouse
638
601
Company - Bubba's 33
48
Company - Jaggers
Total company
702
657
Franchise - Texas Roadhouse - Domestic
39
56
Franchise - Jaggers - Domestic
Franchise - Texas Roadhouse - International (1)
59
Franchise - Jaggers - International
-
Total franchise
104
115
772
21
Q3 2025 compared to Q3 2024
Restaurant and Other Sales
Restaurant and other sales increased 12.9% in Q3 2025 compared to Q3 2024 and 11.8% in 2025 YTD compared to 2024 YTD. The following table summarizes certain key drivers and/or attributes of restaurant sales at company restaurants for the periods presented. Company restaurant count activity is shown in the restaurant unit activity table above.
Q3 2025
Q3 2024
2025 YTD
2024 YTD
Company Restaurants:
Increase in store weeks
7.0
5.4
Increase in average unit volume
5.2
4.0
0.8
Total increase in restaurant and other sales
12.9
13.5
11.8
Store weeks
9,074
8,496
26,954
25,187
Comparable restaurant sales
6.1
8.5
5.1
8.8
Texas Roadhouse restaurants:
8,258
7,768
24,595
23,070
6.3
8.9
Average unit volume (in thousands)
2,104
1,994
6,533
6,261
Weekly sales by group:
Comparable restaurants (599, 560, 583, and 549 units)
163,079
153,870
168,909
160,715
Average unit volume restaurants (26, 22, 28, and 17 units) (1)
132,628
132,430
138,305
153,918
Restaurants less than six months old (13, 19, 27, and 35 units)
158,932
142,628
153,842
142,925
Bubba's 33 restaurants:
691
624
2,000
1,805
1.8
5.3
3.4
5.0
1,533
1,500
4,763
4,633
Comparable restaurants (45, 40, 41, and 37 units)
117,470
116,330
122,859
120,952
Average unit volume restaurants (4, 5, 7, and 4 units) (1)
123,363
109,485
117,874
100,893
Restaurants less than six months old (5, 3, 6, and 7 units)
132,031
140,369
141,243
128,746
22
The increase in restaurant sales for Q3 2025 and 2025 YTD was primarily due to an increase in store weeks and an increase in comparable restaurant sales. The increase in store weeks was driven by new store openings and the acquisition of franchise restaurants. The increase in comparable restaurant sales was driven by an increase in guest traffic counts along with an increase in our per person average check as shown in the table below.
Guest traffic counts
3.1
Per person average check
4.7
2.0
4.5
Comparable restaurant sales growth
To-go sales as a percentage of restaurant sales were 13.6% in Q3 2025 compared to 12.7% in Q3 2024. To-go sales as a percentage of restaurant sales were 13.5% in 2025 YTD compared to 12.8% in 2024 YTD.
Per person average check includes the benefit of a menu price increase of approximately 1.4% implemented in Q2 2025 and menu price increases of approximately 2.2% and 0.9% implemented in Q2 2024 and Q4 2024, respectively. In addition, we implemented a menu price increase of approximately 1.7% at the beginning of Q4 2025.
In 2025 YTD, we opened 13 Texas Roadhouse company restaurants, five Bubba’s 33 company restaurants, and one Jaggers company restaurant. In 2025, we expect store week growth of approximately 5% across all concepts, including a benefit from franchise acquisitions in 2025 YTD, offset by the lapping of the additional week in 2024. In 2026, we expect store week growth of 5% to 6% across all concepts, including the impact of franchise acquisitions.
Royalties and Franchise Fees
Royalties and franchise fees decreased by $0.5 million or 6.3% in Q3 2025 compared to Q3 2024 and increased by $0.3 million or 1.2% in 2025 YTD compared to 2024 YTD. The decrease in Q3 2025 compared to Q3 2024 was due to decreased royalties related to the franchise stores that were acquired. The increase in 2025 YTD compared to 2024 YTD was due to increased royalties related to our royalty-based retail products that rolled out in 2024 partially offset by decreased royalties related to the franchise stores that were acquired.
Food and Beverage Costs
Food and beverage costs, as a percentage of restaurant and other sales, increased to 35.8% in Q3 2025 compared to 33.5% in Q3 2024 and increased to 34.6% in 2025 YTD compared to 33.4% in 2024 YTD. The increases were primarily driven by commodity inflation of 7.9% in Q3 2025 and 5.1% in 2025 YTD, primarily driven by higher beef costs and shifts within the menu, partially offset by the benefit of a higher average guest check.
In 2025, we expect commodity inflation of approximately 6% with prices locked for approximately 80% of our remaining forecasted costs and the remainder subject to market rates. In 2026, we expect commodity inflation of approximately 7%.
Restaurant Labor Expenses
Restaurant labor expenses, as a percentage of restaurant and other sales, decreased to 33.6% in Q3 2025 compared to 33.8% in Q3 2024 and increased to 33.3% in 2025 YTD compared to 33.0% in 2024 YTD. The decrease in Q3 2025 compared to Q3 2024 was driven by the benefit of a higher average guest check and labor productivity partially offset by wage and other labor inflation of 3.9% in Q3 2025. The increase in 2025 YTD compared to 2024 YTD was driven by wage and other labor inflation of 4.1% in 2025 YTD partially offset by the benefit of a higher average guest check and labor productivity. Wage and other labor inflation was driven by higher wage and benefit expense due to labor market pressures along with increases in state-mandated minimum and tipped wage rates and increased investment in our people.
In 2025, we expect wage and other labor inflation of approximately 4%. In 2026, we expect wage and other labor inflation of 3% to 4%.
Restaurant Rent Expense
Restaurant rent expense, as a percentage of restaurant and other sales, was 1.6% in Q3 2025 and in Q3 2024 and was 1.6% in 2025 YTD compared to 1.5% in 2024 YTD. In Q3 2025 and 2025 YTD, higher rent expense at our recently acquired restaurants and newer restaurants was partially offset by the increase in average unit volume.
Restaurant Other Operating Expenses
Restaurant other operating expenses, as a percentage of restaurant and other sales, decreased to 14.7% in Q3 2025 compared to 15.1% in Q3 2024 and decreased to 14.5% in 2025 YTD compared to 14.9% in 2024 YTD. The decrease in Q3 2025 compared to Q3 2024 was driven by lower incentive compensation expense and the increase in average unit volume partially offset by higher general liability insurance expense of $1.4 million. The decrease in 2025 YTD compared to 2024 YTD was driven by lower incentive compensation expense, the increase in average unit volume, and lower general liability insurance expense of $3.7 million.
Pre-opening Expenses
Pre-opening expenses were $7.4 million in Q3 2025 compared to $7.3 million in Q3 2024 and $19.7 million in 2025 YTD compared to $21.6 million in 2024 YTD. Pre-opening costs will fluctuate from quarter to quarter based on specific pre-opening costs incurred for each restaurant, the number and timing of restaurant openings, and the number and timing of restaurant managers hired.
Depreciation and Amortization Expenses
Depreciation and amortization expenses, as a percentage of total revenue, increased to 3.7% in Q3 2025 compared to 3.5% in Q3 2024 and increased to 3.5% in 2025 YTD compared to 3.3% in 2024 YTD. The increases were driven by higher depreciation expense at our newer restaurants and intangible asset amortization expense related to the acquisition of franchise restaurants partially offset by the increase in average unit volume.
Impairment and Closure Costs, Net
Impairment and closure costs, net were $0.1 million in Q3 2025 compared to $0.8 million in Q3 2024 and $0.3 million in 2025 YTD compared to $1.1 million in 2024 YTD. In Q3 2025 and 2025 YTD, impairment and closure costs, net included closure costs related to restaurant relocations. In Q3 2024 and 2024 YTD, impairment and closure costs, net included costs related to the impairment of a building at a previously relocated store.
General and Administrative Expenses
General and administrative expenses, as a percentage of total revenue, decreased to 3.8% in Q3 2025 compared to 4.3% in Q3 2024 and decreased to 3.9% in 2025 YTD compared to 4.2% in 2024 YTD. The decreases were driven by the increase in average unit volume, lower incentive compensation expense, and lower restricted stock expense due to lapping the impact of the shift in the timing of our restricted stock grants from quarterly to annually.
Interest Income, Net
Interest income, net was $0.6 million in Q3 2025 compared to $1.9 million in Q3 2024 and was $3.0 million in 2025 YTD compared to $5.0 million in 2024 YTD. The decreases were driven by decreased earnings on our cash and cash equivalents.
Equity Income from Investments in Unconsolidated Affiliates
Equity income was $0.1 million in Q3 2025 compared to $0.2 million Q3 2024 and was $1.8 million in 2025 YTD compared to $0.8 million in 2024 YTD. The increase in 2025 YTD was driven by a $1.2 million gain on the acquisition of three of these affiliates.
24
Income Tax Expense
Our effective tax rate was 13.1% in Q3 2025 compared to 16.7% in Q3 2024 and was 14.4% in 2025 YTD compared to 15.1% in 2024 YTD. The decreases in the tax rates were driven by an increase in the impact of the FICA tip tax credit.
In 2025, we expect an effective tax rate of approximately 14.5% based on forecasted operating results. In 2026, we expect an effective tax rate of approximately 15% based on forecasted operating results.
Segment Information
We manage our restaurant and franchising operations by concept and as a result have identified Texas Roadhouse, Bubba's 33, Jaggers, and our retail initiatives as separate operating segments. Our reportable segments are Texas Roadhouse and Bubba's 33. The Texas Roadhouse reportable segment includes the results of our company Texas Roadhouse restaurants and domestic and international franchise Texas Roadhouse restaurants. The Bubba's 33 reportable segment includes the results of our domestic company Bubba's 33 restaurants. Our remaining operating segments, which include the results of our company and franchise Jaggers restaurants and the results of our retail initiatives, are included in Other. In addition, corporate-related assets, depreciation and amortization, and capital expenditures are also included in Other.
The CODM uses restaurant margin as the primary measure for assessing performance of our segments. Restaurant margin (in dollars and as a percentage of restaurant and other sales) represents restaurant and other sales less restaurant-level operating costs, including food and beverage costs, labor, rent, and other operating costs. Restaurant margin is used by our CODM to evaluate core restaurant-level operating efficiency and performance, assist in the evaluation of operating trends over time, and in making capital allocation decisions. Capital allocation decisions include approving new store openings and the refurbishment, expansion, or relocation of existing restaurants. A reconciliation of income from operations to restaurant margin is included in the Results of Operations section above.
The following table presents a summary of restaurant margin by segment ($ in thousands):
14.4
16.1
13.3
14.3
13.7
16.0
17.3
15.4
16.2
15.5
17.2
In our Texas Roadhouse reportable segment, restaurant margin dollars increased $1.4 million or 0.7% in Q3 2025 and $24.5 million or 3.9% in 2025 YTD. The increases were due to higher sales partially offset by higher food and beverage costs due to commodity inflation. In addition, restaurant margin, as a percentage of restaurant and other sales, decreased to 14.4% in Q3 2025 from 16.1% in Q3 2024 and decreased to 16.1% in 2025 YTD from 17.3% in 2024 YTD. Restaurant margin percentage was primarily impacted by commodity inflation partially offset by higher sales.
In our Bubba’s 33 reportable segment, restaurant margin dollars increased $0.6 million or 5.3% in Q3 2025 and $3.0 million or 8.4% in 2025 YTD. The increases were due to higher sales partially offset by higher food and beverage costs due to commodity inflation and an increase in general liability insurance expense. In addition, restaurant margin, as
25
a percentage of restaurant and other sales, decreased to 13.3% in Q3 2025 from 14.3% in Q3 2024 and decreased to 15.4% in 2025 YTD from 16.2% in 2024 YTD. Restaurant margin percentage was primarily impacted by the increased expenses noted above, which were partially offset by higher sales.
Liquidity and Capital Resources
The following table presents a summary of our net cash provided by (used in) operating, investing, and financing activities (in thousands):
Net cash provided by operating activities was $509.6 million in 2025 YTD compared to $516.1 million in 2024 YTD. This decrease was primarily due to an unfavorable change in working capital partially offset by an increase in depreciation and amortization expense and deferred income tax expense.
Our operations have not required significant working capital and, like many restaurant companies, we have been able to operate with negative working capital, if necessary. Sales are primarily for cash, and restaurant operations do not require significant inventories or receivables. In addition, we receive trade credit for the purchase of food, beverages, and supplies, thereby reducing the need for incremental working capital to support growth.
Net cash used in investing activities was $384.2 million in 2025 YTD compared to $237.2 million in 2024 YTD. The increase was primarily due to the acquisition of 17 franchise restaurants in 2025 YTD and an increase in capital expenditures. The increase in capital expenditures is due to an increase in restaurant relocations, restaurant refurbishments and expansions, and the purchase of our Support Center for approximately $22.8 million. These increases were partially offset by a decrease in the timing of new company restaurant spend.
We require capital principally for the development of new company restaurants, the refurbishment or relocation of existing restaurants, and the acquisition of franchise restaurants, as applicable. We either lease our restaurant site locations under operating leases for periods of five to 30 years (including renewal periods) or purchase the land when appropriate. As of September 30, 2025, we had developed 158 of the 702 company restaurants on land that we own.
The following table presents a summary of capital expenditures (in thousands):
New company restaurants
123,681
144,574
Refurbishment or expansion of existing restaurants
110,580
87,014
Relocation of existing restaurants
39,327
10,540
Capital expenditures related to Support Center office
25,220
4,411
Total capital expenditures
Our future capital requirements will primarily depend on the number and mix of new restaurants we open, the timing of those openings, the restaurant prototype developed in a given fiscal year, and potential franchise acquisitions. These requirements will include costs directly related to opening, maintaining, or relocating restaurants and may also include costs necessary to ensure that our infrastructure is able to support a larger restaurant base.
We intend to satisfy our capital requirements over the next 12 months with cash on hand, net cash provided by operating activities and, if needed, funds available under our revolving credit facility. In 2025, we expect capital
26
expenditures of approximately $400 million, including the purchase of our Support Center. In 2026, we expect capital expenditures of approximately $400 million, driven primarily by an increase in new store openings.
Net cash used in financing activities was $262.5 million in 2025 YTD compared to $193.9 million in 2024 YTD. The increase is primarily due to an increase in share repurchases and an increase in quarterly dividends.
On February 19, 2025, our Board approved the payment of a quarterly cash dividend of $0.68 per share of common stock compared to the quarterly dividend of $0.61 per share of common stock declared in 2024. The payments of quarterly dividends totaled $135.4 million and $122.2 million in 2025 YTD and 2024 YTD, respectively.
On November 5, 2025, our Board approved the payment of the fourth quarter 2025 cash dividend of $0.68 per share of common stock. This payment will be distributed on December 30, 2025, to shareholders of record at the close of business on December 2, 2025.
On February 19, 2025, our Board approved a stock repurchase program for the repurchase of up to $500.0 million of our common stock. This stock repurchase program has no expiration date and replaces the previous stock repurchase program which was approved in 2022.
During 2025 YTD, we paid $100.0 million, excluding excise taxes, to repurchase 573,329 shares of our common stock. This includes $30.0 million repurchased under our prior authorization and $70.0 million repurchased under our current authorization. During 2024 YTD, we paid $44.7 million, excluding excise taxes, to repurchase 278,914 shares of our common stock. As of September 30, 2025, $430.0 million remained under our authorized stock repurchase program.
On April 24, 2025, we entered into an agreement for a revolving credit facility with a syndicate of commercial lenders led by JPMorgan Chase Bank, N.A. and PNC Bank, N.A. This credit facility superseded and replaced our previous credit facility.
The credit facility is an unsecured, revolving credit agreement and has a borrowing capacity of up to $450.0 million with the option to increase the capacity by an additional $250.0 million subject to certain limitations, including approval by the syndicate of commercial lenders. The credit facility has a maturity date of April 24, 2030.
As of September 30, 2025, we had no outstanding borrowings under the credit facility and had $446.8 million of availability, net of $3.2 million of outstanding letters of credit, respectively. As of December 31, 2024, we had no outstanding borrowings under the previous credit facility and had $296.8 million of availability, net of $3.2 million of outstanding letters of credit.
The interest rate for each credit facility as of September 30, 2025 and September 24, 2024 was 5.34% and 5.72%, respectively.
The lenders’ obligation to extend credit pursuant to the credit facility depends on us maintaining certain financial covenants, including a minimum consolidated fixed charge coverage ratio and a maximum consolidated leverage ratio. The credit facility permits us to incur additional secured or unsecured indebtedness, except for the incurrence of secured indebtedness that in the aggregate is equal to or greater than $125.0 million and 20% of our consolidated tangible net worth. We were in compliance with all financial covenants as of September 30, 2025.
Guarantees
As of September 30, 2025 and December 31, 2024, we were contingently liable for $8.7 million and $9.4 million, respectively, for seven lease guarantees. These amounts represent the maximum potential liability of future payments under the guarantees. In the event of default, the indemnity and default clauses in our assignment agreements govern our ability to pursue and recover damages incurred. No material liabilities have been recorded as of September 30, 2025 and December 31, 2024 as the likelihood of default was deemed to be less than probable and the fair value of the guarantees is not considered significant.
27
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Information regarding market risk appears in our Annual Report on Form 10-K for the year ended December 31, 2024 in Part II, Item 7A, Quantitative and Qualitative Disclosures About Market Risk. There have been no material changes in market risk previously disclosed in our Form 10-K for the fiscal year ended December 31, 2024.
ITEM 4. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
We have evaluated the effectiveness of the design and operation of our disclosure controls and procedures pursuant to, and as defined in, Rules 13a-15(e) and 15d-15(e) under the Exchange Act as of the end of the period covered by this report. Based on the evaluation, performed under the supervision and with the participation of our management, including the Chief Executive Officer (the "CEO") and the Chief Financial Officer (the "CFO"), our management, including the CEO and CFO, concluded that our disclosure controls and procedures were effective as of September 30, 2025.
Changes in Internal Control
There were no changes in the Company’s internal control over financial reporting that occurred during the 13 weeks ended September 30, 2025 that materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
PART II — OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Information regarding legal proceedings is included in Note 6 to the Condensed Consolidated Financial Statements appearing in Part 1, Item 1 of this report on Form 10-Q.
ITEM 1A. RISK FACTORS
Information regarding risk factors appears in our Annual Report on Form 10-K for the year ended December 31, 2024, under the heading "Special Note Regarding Forward-looking Statements" and in Part I, Item 1A, Risk Factors. There have been no material changes from the risk factors previously disclosed in our Form 10-K for the fiscal year ended December 31, 2024.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
In 2008, our Board approved our first stock repurchase program. From inception through September 30, 2025, we have paid $863.3 million, excluding excise taxes, through our authorized stock repurchase programs to repurchase 22,531,459 shares of our common stock at an average price per share of $38.32. On February 19, 2025, our Board approved a stock repurchase program under which we may repurchase up to $500.0 million of our common stock. This new stock repurchase program commenced on February 24, 2025, has no expiration date, and replaces the previous stock repurchase program which was approved on March 17, 2022 with respect to the repurchase of up to $300.0 million of common stock. All repurchases to date under our stock repurchase programs have been made through open market transactions. The timing and the amount of any repurchases through this program will be determined by management under parameters established by the Board, based on an evaluation of our stock price, market conditions and other corporate considerations, including complying with Rule 10b5-1 trading arrangements under the Exchange Act, as applicable.
For the 13 weeks ended September 30, 2025, we paid $40.0 million, excluding excise taxes, to repurchase 230,540 shares of our common stock. As of September 30, 2025, $430.0 million remained authorized for stock repurchases.
Maximum Number
(or Approximate
Total Number of
Dollar Value)
Shares Purchased
of Shares that
Total Number
Average
as Part of Publicly
May Yet Be
of Shares
Price Paid
Announced Plans
Purchased Under the
Period
Purchased
per Share
or Programs
Plans or Programs
July 2 to July 29
469,996,126
July 30 to August 26
136,706
175.06
446,063,990
August 27 to September 30
93,834
171.24
429,996,157
230,540
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
ITEM 5. OTHER INFORMATION
Rule 10b5-1 Trading Plans
During the 13 weeks ended September 30, 2025, no executive officer or director adopted, modified, or terminated a Rule 10b5-1 or a non-Rule 10b5-1 trading arrangement, as such terms are defined in Item 408(a) of Regulation S-K.
ITEM 6. EXHIBITS
Exhibit No.
Description
10.1
First Amendment to Employment Agreement between Texas Roadhouse Management Corp. and Gerald L. Morgan (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K dated August 14, 2025)
10.2
First Amendment to Employment Agreement between Texas Roadhouse Management Corp. and Christopher C. Colson (incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K dated August 14, 2025)
10.3
Executive Employment Agreement between Texas Roadhouse Management Corp. and Lloyd Paul Marshall (incorporated by reference to Exhibit 10.3 to the Registrant’s Current Report on Form 8-K dated August 14, 2025)
31.1
Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2
32.1
Certifications pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS
Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH
Inline XBRL Taxonomy Extension Schema Document
101.CAL
Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF
Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB
Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE
Inline XBRL Taxonomy Extension Presentation Linkbase Document
Cover page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
TEXAS ROADHOUSE, INC.
Date: November 7, 2025
By:
/s/ GERALD L. MORGAN
Gerald L. Morgan
Chief Executive Officer
(Principal Executive Officer)
/s/ KEITH V. HUMPICH
Keith V. Humpich
Interim Chief Financial Officer
(Principal Financial Officer)
(Principal Accounting Officer)