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 July 1, 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 66,450,612 on July 30, 2025.
TABLE OF CONTENTS
PART I. FINANCIAL INFORMATION
Item 1 — Financial Statements (Unaudited) — Texas Roadhouse, Inc. and Subsidiaries
3
Condensed Consolidated Balance Sheets —July 1, 2025 and December 31, 2024
Condensed Consolidated Statements of Income — For the 13 and 26 Weeks Ended July 1, 2025 and June 25, 2024
4
Condensed Consolidated Statements of Stockholders’ Equity — For the 13 and 26 Weeks Ended July 1, 2025 and June 25, 2024
5
Condensed Consolidated Statements of Cash Flows — For the 26 Weeks Ended July 1, 2025 and June 25, 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)
July 1, 2025
December 31, 2024
Assets
Current assets:
Cash and cash equivalents
$
176,801
245,225
Receivables, net of allowance for doubtful accounts of $11 at July 1, 2025 and $7 at December 31, 2024
65,011
193,170
Inventories, net
45,731
40,756
Prepaid expenses and other current assets
36,885
37,417
Total current assets
324,428
516,568
Property and equipment, net of accumulated depreciation of $1,293,697 at July 1, 2025 and $1,223,064 at December 31, 2024
1,714,551
1,617,673
Operating lease right-of-use assets, net
831,725
769,865
Goodwill
229,944
169,684
Intangible assets, net of accumulated amortization of $26,517 at July 1, 2025 and $23,147 at December 31, 2024
14,676
1,265
Other assets
139,952
115,724
Total assets
3,255,276
3,190,779
Liabilities and Stockholders’ Equity
Current liabilities:
Current portion of operating lease liabilities
30,545
28,172
Accounts payable
146,883
144,791
Deferred revenue-gift cards
277,293
401,198
Accrued wages
91,881
101,981
Income taxes payable
71
2,986
Accrued taxes and licenses
49,509
56,824
Other accrued liabilities
117,327
92,178
Total current liabilities
713,509
828,130
Operating lease liabilities, net of current portion
892,361
826,300
Restricted stock and other deposits
9,403
9,288
Deferred tax liabilities, net
1,717
8,184
Other liabilities
172,064
145,154
Total liabilities
1,789,054
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, 66,450,572 and 66,574,626 shares issued and outstanding at July 1, 2025 and December 31, 2024, respectively)
66
67
Retained earnings
1,450,728
1,358,280
Total Texas Roadhouse, Inc. and subsidiaries stockholders’ equity
1,450,794
1,358,347
Noncontrolling interests
15,428
15,376
Total equity
1,466,222
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
26 Weeks Ended
June 25, 2024
Revenue:
Restaurant and other sales
1,503,974
1,333,642
2,944,316
2,647,794
Royalties and franchise fees
8,080
7,560
15,386
14,625
Total revenue
1,512,054
1,341,202
2,959,702
2,662,419
Costs and expenses:
Restaurant operating costs (excluding depreciation and amortization shown separately below):
Food and beverage
511,324
436,001
1,002,315
881,092
Labor
495,049
438,212
975,024
865,759
Rent
23,028
19,956
45,505
39,381
Other operating
217,230
196,862
424,845
390,504
Pre-opening
5,464
6,202
12,276
14,297
Depreciation and amortization
50,744
42,915
99,544
84,408
Impairment and closure, net
111
90
139
291
General and administrative
62,763
58,148
118,980
110,743
Total costs and expenses
1,365,713
1,198,386
2,678,628
2,386,475
Income from operations
146,341
142,816
281,074
275,944
Interest income, net
1,044
1,683
2,345
3,091
Equity income from investments in unconsolidated affiliates
1,426
286
1,651
543
Income before taxes
148,811
144,785
285,070
279,578
Income tax expense
22,118
21,710
42,318
40,513
Net income including noncontrolling interests
126,693
123,075
242,752
239,065
Less: Net income attributable to noncontrolling interests
2,608
2,934
5,005
5,718
Net income attributable to Texas Roadhouse, Inc. and subsidiaries
124,085
120,141
237,747
233,347
Net income per common share attributable to Texas Roadhouse, Inc. and subsidiaries:
Basic
1.87
1.80
3.58
3.49
Diluted
1.86
1.79
3.57
3.48
Weighted average shares outstanding:
66,373
66,785
66,429
66,814
66,598
67,044
66,656
67,077
Cash dividends declared per share
0.68
0.61
1.36
1.22
Condensed Consolidated Statements of Stockholders' Equity
For the 13 Weeks Ended July 1, 2025
Total Texas
Additional
Roadhouse, Inc.
Par
Paid-in-
Retained
and
Noncontrolling
Shares
Value
Capital
Earnings
Subsidiaries
Interests
Total
Balance, April 1, 2025
66,403,351
1,380,055
1,380,121
1,395,549
Net income
Distributions to noncontrolling interest holders
(2,608)
Dividends declared ($0.68 per share)
(45,121)
Shares issued under share-based compensation plans including tax effects
158,435
Indirect repurchase of shares for minimum tax withholdings
(49,516)
(9,059)
Repurchase of shares of common stock, including excise tax as applicable
(61,698)
(1,640)
(8,291)
(9,931)
Share-based compensation
10,699
Balance, July 1, 2025
66,450,572
For the 13 Weeks Ended June 25, 2024
Balance, March 26, 2024
66,846,291
1,207,119
1,207,186
15,930
1,223,116
(2,922)
Acquisition of noncontrolling interest, net of deferred taxes
(3,274)
(888)
(4,162)
Dividends declared ($0.61 per share)
(40,718)
63,525
(19,514)
(3,356)
(162,404)
(2,225)
(23,973)
(26,198)
8,855
Balance, June 25, 2024
66,727,898
1,262,569
1,262,636
15,054
1,277,690
For the 26 Weeks Ended July 1, 2025
Balance, December 31, 2024
66,574,626
(4,953)
Dividends declared ($1.36 per share)
(90,292)
318,947
(100,212)
(18,083)
Repurchase of shares of common stock, including excise taxes
(342,789)
(1)
(5,166)
(55,007)
(60,174)
23,249
For the 26 Weeks Ended June 25, 2024
Balance, December 26, 2023
66,789,464
1,141,595
1,141,662
15,849
1,157,511
(5,625)
Acquisition of noncontrolling interest
Dividends declared ($1.22 per share)
(81,509)
234,784
(73,684)
(10,829)
(222,666)
(4,275)
(30,864)
(35,139)
18,378
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
(6,467)
(4,254)
Loss on disposition of assets
3,475
1,646
Impairment and closure costs
39
26
(1,651)
(543)
Distributions of income received from investments in unconsolidated affiliates
605
541
Provision for doubtful accounts
(8)
Share-based compensation expense
Changes in operating working capital, net of acquisitions:
Receivables
128,182
106,883
Inventories
(4,029)
(2,879)
5,452
9,138
(21,682)
(10,377)
1,323
11,293
Deferred revenue—gift cards
(125,806)
(123,428)
(10,162)
16,858
Prepaid income taxes and income taxes payable
(6,622)
9,220
(7,231)
3,338
13,870
(3,540)
Operating lease right-of-use assets and lease liabilities
4,226
3,515
26,909
18,067
Net cash provided by operating activities
365,980
377,347
Cash flows from investing activities:
Capital expenditures—property and equipment
(169,912)
(155,478)
Acquisitions of franchise restaurants, net of cash acquired
(93,878)
Proceeds from sale of investments in unconsolidated affiliates
1,321
Proceeds from sale of property and equipment
135
197
Proceeds from sale leaseback transactions
2,807
9,126
Net cash used in investing activities
(259,527)
(146,155)
Cash flows from financing activities:
Debt issuance costs
(1,525)
Acquisitions of noncontrolling interests
(5,279)
Proceeds from restricted stock and other deposits, net
390
397
Repurchase of shares of common stock, including excise taxes as applicable
(60,414)
Dividends paid to shareholders
Net cash used in financing activities
(174,877)
(137,984)
Net (decrease) increase in cash and cash equivalents
(68,424)
93,208
Cash and cash equivalents—beginning of period
104,246
Cash and cash equivalents—end of period
197,454
Supplemental disclosures of cash flow information:
Interest paid
447
454
Income taxes paid
54,936
35,768
Capital expenditures included in current liabilities
45,186
35,565
(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 July 1, 2025 and December 31, 2024 and for the 13 and 26 weeks ended July 1, 2025 and June 25, 2024.
The Company maintains three restaurant concepts operating as Texas Roadhouse, Bubba’s 33, and Jaggers. As of July 1, 2025, we owned and operated 695 restaurants and franchised an additional 102 restaurants in 49 states, one U.S. territory, and ten foreign countries. Of the 102 franchise restaurants, there were 44 domestic restaurants and 58 international restaurants, including one in a U.S. territory. As of June 25, 2024, we owned and operated 650 restaurants and franchised an additional 112 restaurants in 49 states, one U.S. territory, and ten foreign countries. Of the 112 franchise restaurants, there were 59 domestic restaurants and 53 international restaurants, including one in a U.S. territory.
As of July 1, 2025 and June 25, 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 July 1, 2025 and June 25, 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 26 weeks ended July 1, 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 July 1, 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 July 1, 2025 and June 25, 2024 was 5.42% and 6.21%, 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 July 1, 2025.
9
(4) Revenue
The following table disaggregates our revenue by major source:
Royalties
7,468
6,945
14,245
13,793
Franchise fees
612
615
1,141
832
The following table presents a rollforward of deferred revenue-gift cards:
Beginning balance
295,752
266,482
373,913
Gift card activations, net of third-party fees
86,101
78,643
143,482
134,882
Gift card redemptions and breakage
(104,560)
(94,640)
(267,387)
(258,310)
Ending balance
250,485
We recognized restaurant sales of $53.0 million and $192.2 million for the 13 and 26 weeks ended July 1, 2025, respectively, related to amounts in deferred revenue as of December 31, 2024. We recognized restaurant sales of $46.1 million and $184.0 million for the 13 and 26 weeks ended June 25, 2024, respectively, related to amounts in deferred revenue as of December 26, 2023.
(5) Income Taxes
The effective tax rate was 14.9% and 15.0% for the 13 weeks ended July 1, 2025 and June 25, 2024, respectively. The effective tax rate was 14.8% and 14.5% for the 26 weeks ended July 1, 2025 and June 25, 2024, respectively. The decrease in the tax rate for the 13 weeks ended July 1, 2025 as compared to the prior year period was primarily due to an increase in the impact of the FICA tip tax credit partially offset by a reduction in the stock compensation benefit. The increase in the tax rate for the 26 weeks ended July 1, 2025 as compared to the prior year period was primarily due to a reduction in the stock compensation benefit.
(6)
Commitments and Contingencies
The estimated cost of completing capital project commitments at July 1, 2025 and December 31, 2024 was $227.2 million and $243.6 million, respectively.
As of July 1, 2025 and December 31, 2024, we were contingently liable for $8.9 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 July 1, 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 26 weeks ended July 1, 2025 and June 25, 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.
10
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 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
During the 13 weeks ended July 1, 2025, we completed the acquisitions of three domestic franchise Texas Roadhouse restaurants, one of which we held a 5% equity interest and two of which we held a 10% equity interest. Pursuant to the terms of the acquisition agreements, we paid a total purchase price of $15.5 million, net of cash acquired, for these entities. The 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.
During the 26 weeks ended July 1, 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 $93.9 million, net of cash acquired.
These transactions were accounted for using the acquisition method as defined in Accounting Standards Codification 805, Business Combinations. These acquisitions are consistent with our long-term strategy to increase net income and earnings per share.
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 July 1, 2025.
Current assets
1,085
Property and equipment
20,020
Operating lease right-of-use assets
39,755
60,260
Intangible assets
16,780
470
(1,383)
(1,901)
Current liabilities
(1,056)
(40,152)
93,878
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.
(8) Related Party Transactions
As of July 1, 2025 and June 25, 2024, we had four franchise restaurants and one majority-owned company restaurant owned in part by a current officer of the Company. We recognized revenue of $0.6 million and $0.5 million for the 13 weeks ended July 1, 2025 and June 25, 2024, respectively, related to the four franchise restaurants. We recognized revenue of $1.1 million and $1.0 million for the 26 weeks ended July 1, 2025 and June 25, 2024, respectively, related to the four franchise restaurants.
11
(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
225
259
227
263
Shares-diluted
Diluted EPS
(10) Fair Value Measurements
At July 1, 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 26 weeks ended July 1, 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
119,201
101,071
Deferred compensation plan—liabilities
(119,201)
(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 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
12
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 26 weeks ended July 1, 2025, we paid $9.8 million and $60.0 million, excluding excise taxes, to repurchase 61,698 shares and 342,789 shares of our common stock, respectively. This includes $30.0 million repurchased under our current authorization and $30.0 million repurchased under our prior authorization. For the 13 and 26 weeks ended June 25, 2024, we paid $26.2 million and $35.1 million, excluding excise taxes, to repurchase 162,404 and 222,666 shares of our common stock, respectively. As of July 1, 2025, $470.0 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 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
1,408,769
86,184
9,021
Restaurant operating costs (excluding depreciation and amortization)
Food and Beverage
484,406
24,096
2,822
461,640
30,632
2,777
20,728
2,047
253
Other Operating
200,411
15,056
1,763
Restaurant margin
241,584
14,353
1,406
257,343
42,108
4,572
4,064
Segment assets
2,571,129
275,946
408,201
Capital expenditures
76,515
12,949
3,059
92,523
1,252,247
73,435
7,960
413,451
20,079
2,471
409,387
26,412
2,413
17,872
1,881
203
182,975
12,504
1,383
228,562
12,559
1,490
242,611
36,199
3,944
2,772
2,238,795
240,199
382,917
2,861,911
65,103
10,573
2,130
77,806
2,760,988
165,802
17,526
950,362
46,446
5,507
910,328
59,171
5,525
40,919
4,082
504
392,510
28,968
3,367
466,869
27,135
2,623
496,627
82,330
8,879
8,335
137,858
25,908
6,146
169,912
14
2,488,385
144,085
15,324
836,619
39,701
4,772
809,326
51,718
4,715
35,282
3,695
404
363,383
24,242
2,879
443,775
24,729
2,554
471,058
70,955
7,811
5,642
132,933
18,533
4,012
155,478
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 797 restaurants in 49 states, one U.S. territory, and ten foreign countries. As of July 1, 2025, our 797 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 July 1, 2025 and June 25, 2024, are referred to as Q2 2025 and Q2 2024, respectively. The 26 weeks ended July 1, 2025 and June 25, 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
Q2 2025 Financial Highlights
Total revenue increased $170.9 million or 12.7% to $1,512.1 million in Q2 2025 compared to $1,341.2 million in Q2 2024 primarily due to an increase in store weeks and comparable restaurant sales. Store weeks and comparable restaurant sales increased 7.2% and 5.8%, respectively, at company restaurants in Q2 2025 compared to Q2 2024. The increase in store weeks was due to the acquisition of franchise restaurants and new store openings. 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 increased $3.9 million or 3.3% to $124.1 million in Q2 2025 compared to $120.1 million in Q2 2024 primarily due to higher restaurant margin dollars, as described below, partially offset by higher depreciation and amortization expenses and higher general and administrative expenses. Diluted earnings per share increased 4.0% to $1.86 in Q2 2025 from $1.79 in Q2 2024 due to the increase in net income and the impact of share repurchases.
Restaurant margin dollars increased $14.7 million or 6.1% to $257.3 million in Q2 2025 compared to $242.6 million in Q2 2024 primarily due to higher sales. Restaurant margin, as a percentage of restaurant and other sales, decreased to 17.1% in Q2 2025 compared to 18.2% in Q2 2024. The decrease in restaurant margin, as a percentage of restaurant and other sales, was primarily due to commodity inflation of 5.2% and wage and other labor inflation of 3.8% partially offset by higher sales.
In addition, during the 13 weeks ended July 1, 2025, capital allocation spend included capital expenditures of $92.5 million, franchise acquisitions of $15.5 million, dividends of $45.1 million, and repurchases of common stock of $9.8 million.
19
Results of Operations
%
Condensed Consolidated Statements of Income:
99.5
99.4
0.5
0.6
100.0
(As a percentage of restaurant and other sales)
34.0
32.7
33.3
32.9
32.8
33.1
1.5
14.5
14.8
14.7
(As a percentage of total revenue)
0.4
3.4
3.2
NM
4.2
4.3
4.0
90.3
89.4
90.5
89.6
9.7
10.6
9.5
10.4
0.1
9.8
10.8
9.6
10.5
1.6
1.4
8.4
9.2
8.2
9.0
Net income attributable to noncontrolling interests
0.2
8.0
8.8
NM — Not meaningful
20
Reconciliation of Income from Operations to Restaurant Margin
($ In thousands, except restaurant margin $ per store week)
$ 142,816
$ 242,611
Restaurant margin $/store week
28,562
28,855
27,776
28,222
Restaurant margin (as a percentage of restaurant and other sales)
17.1%
18.2%
16.9%
17.8%
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 July 1, 2025
797
730
52
Company - Texas Roadhouse
634
594
Company - Bubba's 33
48
Company - Jaggers
Total company
695
650
Franchise - Texas Roadhouse - Domestic
56
Franchise - Jaggers - Domestic
Franchise - Texas Roadhouse - International (1)
57
53
Franchise - Jaggers - International
-
Total franchise
102
112
762
21
Q2 2025 compared to Q2 2024
Restaurant and Other Sales
Restaurant and other sales increased 12.8% in Q2 2025 compared to Q2 2024 and 11.2% 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.
Q2 2025
Q2 2024
2025 YTD
2024 YTD
Company Restaurants:
Increase in store weeks
7.2
5.6
7.1
5.2
Increase in average unit volume (1)
4.8
8.5
3.6
0.8
Total increase in restaurant and other sales
12.8
11.2
13.5
Store weeks
9,010
8,408
17,880
16,691
Comparable restaurant sales
5.8
9.3
4.7
8.9
Texas Roadhouse restaurants:
8,226
7,708
16,337
15,302
5.9
9.4
9.1
Average unit volume (in thousands) (1)
2,236
2,128
4,422
4,258
Weekly sales by group:
Comparable restaurants (590, 553, 583, and 549 units)
173,349
163,797
171,492
164,113
Average unit volume restaurants (29, 20, 28, and 17 units)
144,554
150,736
140,338
156,943
Restaurants less than six months old (15, 21, 23, and 28 units)
164,986
151,647
159,002
147,941
Bubba's 33 restaurants:
668
596
1,310
1,181
5.5
4.1
1,645
1,581
3,237
3,127
Comparable restaurants (43, 38, 41, and 37 units)
126,812
122,868
125,195
122,518
Average unit volume restaurants (5, 5, 7, and 4 units)
124,187
111,244
120,474
101,695
Restaurants less than six months old (4, 5, 4, and 7 units)
149,788
142,429
148,376
132,824
22
The increase in restaurant sales for Q2 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 the acquisition of franchise restaurants and new store openings. 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
4.5
2.6
Per person average check
1.8
2.1
4.4
Comparable restaurant sales growth
To-go sales as a percentage of restaurant sales were 13.3% in Q2 2025 compared to 12.6% in Q2 2024. To-go sales as a percentage of restaurant sales were 13.4% 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 2025 YTD, we opened nine Texas Roadhouse company restaurants and three Bubba’s 33 company restaurants. In 2025, we expect store week growth of approximately 5% across all concepts, including a benefit of approximately 2% from the acquisitions of 17 domestic franchise restaurants in 2025 YTD, offset by the lapping of the additional week in 2024.
Other sales primarily include the net impact of the amortization of third-party gift card fees and gift card breakage income and content revenue related to our tabletop kiosk devices. The net impact of these amounts was a $3.9 million and $3.1 million reduction to other sales in Q2 2025 and Q2 2024, respectively, and a $10.0 million and $9.2 million reduction to other sales in 2025 YTD and 2024 YTD, respectively.
Royalties and Franchise Fees
Royalties and franchise fees increased by $0.5 million or 6.9% in Q2 2025 compared to Q2 2024 and increased by $0.8 million or 5.2% in 2025 YTD compared to 2024 YTD. The increases were due to increased royalties related to our royalty-based retail products and comparable franchise restaurant sales growth 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 34.0% in Q2 2025 compared to 32.7% in Q2 2024 and increased to 34.0% in 2025 YTD compared to 33.3% in 2024 YTD. The increases were primarily driven by commodity inflation of 5.2% in Q2 2025 and 3.7% in 2025 YTD, primarily driven by higher beef costs, and unfavorable shifts within the menu, partially offset by the benefit of a higher average guest check.
In 2025, we expect commodity inflation of approximately 5%, including the estimated impact of tariffs, with prices locked for approximately 65% of our remaining forecasted costs and the remainder subject to market rates.
Restaurant Labor Expenses
Restaurant labor expenses, as a percentage of restaurant and other sales, increased to 32.9% in Q2 2025 compared to 32.8% in Q2 2024 and increased to 33.1% in 2025 YTD compared to 32.7% in 2024 YTD. The increases were primarily driven by wage and other labor inflation of 3.8% in Q2 2025 and 4.2% 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 our labor costs to be pressured by wage and other labor inflation of approximately 4%.
23
Restaurant Rent Expense
Restaurant rent expense, as a percentage of restaurant and other sales, was 1.5% for all periods presented. In Q2 2025 and 2025 YTD, higher rent expense at our recently acquired restaurants and newer restaurants was 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 14.5% in Q2 2025 compared to 14.8% in Q2 2024 and decreased to 14.5% in 2025 YTD compared to 14.7% in 2024 YTD. The decreases were driven by lower general liability insurance expense of $1.8 million and $5.1 million in Q2 2025 and 2025 YTD, respectively, as compared to the prior year period, as well as lower incentive compensation expense and the increase in average unit volume. The decreases were partially offset by increases in utilities expense and credit card fee expense.
Pre-opening Expenses
Pre-opening expenses were $5.5 million in Q2 2025 compared to $6.2 million in Q2 2024 and $12.3 million in 2025 YTD compared to $14.3 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 3.4% in Q2 2025 compared to 3.2% in Q2 2024 and increased to 3.4% in 2025 YTD compared to 3.2% in 2024 YTD. The increases were driven by an increase in depreciation expense at our newer restaurants and an increase in 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 both Q2 2025 and Q2 2024 and were $0.1 million in 2025 YTD compared to $0.3 million in 2024 YTD. Impairment and closure costs, net in all periods presented included closure costs related to restaurant relocations.
General and Administrative Expenses
General and administrative expenses, as a percentage of total revenue, decreased to 4.2% in Q2 2025 compared to 4.3% in Q2 2024 and decreased to 4.0% in 2025 YTD compared to 4.2% in 2024 YTD. The decreases were driven by the increase in average unit volume and lower incentive compensation expense partially offset by higher restricted stock expense due to the long-term grant of performance based restricted stock to our executive team and a favorable legal settlement received in Q2 2024.
Interest Income, Net
Interest income, net was $1.0 million and $1.7 million in Q2 2025 and Q2 2024, respectively, and was $2.3 million and $3.1 million in 2025 YTD and 2024 YTD, respectively. The decreases were driven by decreased earnings on our cash and cash equivalents.
Equity Income from Investments in Unconsolidated Affiliates
Equity income was $1.4 million in Q2 2025 compared to $0.3 million Q2 2024 and was $1.7 million in 2025 YTD compared to $0.5 million in 2024 YTD. The increases were driven by a $1.2 million gain on the acquisition of three of these affiliates in Q2 2025.
24
Income Tax Expense
Our effective tax rate was 14.9% in Q2 2025 compared to 15.0% in Q2 2024 and was 14.8% in 2025 YTD compared to 14.5% in 2024 YTD. The decrease in the tax rate in Q2 2025, as compared to Q2 2024, was primarily due to an increase in the impact of the FICA tip tax credit partially offset by a reduction in the stock compensation benefit. The increase in 2025 YTD, as compared to 2024 YTD, was primarily due a reduction in the stock compensation benefit.
In 2025, 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. 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):
17.1
18.3
16.7
15.6
18.7
18.2
16.9
17.8
16.4
17.2
15.0
In our Texas Roadhouse reportable segment, restaurant margin dollars increased $13.0 million or 5.7% in Q2 2025 and $23.1 million or 5.2% in 2025 YTD. The increases were due to higher sales partially offset by commodity inflation and wage and other labor inflation. In addition, restaurant margin, as a percentage of restaurant and other sales, decreased to 17.1% in Q2 2025 from 18.3% in Q2 2024 and decreased to 16.9% in 2025 YTD from 17.8% in 2024 YTD. Restaurant margin percentage was primarily impacted by commodity inflation and wage and other labor inflation which was partially offset by higher sales.
In our Bubba’s 33 reportable segment, restaurant margin dollars increased $1.8 million or 14.3% in Q2 2025 and $2.4 million or 9.7% in 2025 YTD. The increases were due to higher sales partially offset by commodity inflation and an increase in general liability insurance expense. In addition, restaurant margin, as a percentage of restaurant and other sales, decreased to 16.7% in Q2 2025 from 17.1% in Q2 2024 and decreased to 16.4% in 2025 YTD from 17.2% in 2024
25
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 $366.0 million in 2025 YTD compared to $377.3 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.
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 $259.5 million in 2025 YTD compared to $146.2 million in 2024 YTD. The increase was primarily due to the acquisition of 17 franchise restaurants in 2025 YTD and an increase in restaurant relocations 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 July 1, 2025, we had developed 155 of the 695 company restaurants on land that we own.
The following table presents a summary of capital expenditures (in thousands):
New company restaurants
76,643
91,629
Refurbishment or expansion of existing restaurants
58,898
54,372
Relocation of existing restaurants
31,253
6,050
Capital expenditures related to Support Center office
3,118
3,427
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 expenditures of approximately $400 million.
Net cash used in financing activities was $174.9 million in 2025 YTD compared to $138.0 million in 2024 YTD. The increase is primarily due to an increase in share repurchases and an increase in our quarterly dividend payment in 2025 YTD.
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 $90.3 million and $81.5 million in 2025 YTD and 2024 YTD, respectively.
On August 6, 2025, our Board approved the payment of the third quarter 2025 cash dividend of $0.68 per share of common stock. This payment will be distributed on September 30, 2025, to shareholders of record at the close of business on September 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 $60.0 million, excluding excise taxes, to repurchase 342,789 shares of our common stock. This includes $30.0 million repurchased under our prior authorization and $30.0 million repurchased under our current authorization. During 2024 YTD, we paid $35.1 million, excluding excise taxes, to repurchase 222,666 shares of our common stock. As of July 1, 2025, $470.0 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 July 1, 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 July 1, 2025 and June 25, 2024 was 5.42% and 6.21%, 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 July 1, 2025.
Guarantees
As of July 1, 2025 and December 31, 2024, we were contingently liable for $8.9 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 July 1, 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 July 1, 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 July 1, 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 the Form 10-K 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 July 1, 2025, we have paid $823.3 million, excluding excise taxes, through our authorized stock repurchase programs to repurchase 22,300,919 shares of our common stock at an average price per share of $36.92. 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 July 1, 2025, we paid $9.8 million, excluding excise taxes, to repurchase 61,698 shares of our common stock. As of July 1, 2025, $470.0 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
April 2 to April 29
61,698
159.69
469,996,126
April 30 to May 27
May 28 to July 1
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 July 1, 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
Credit Agreement, dated as of April 24, 2025 by and among Texas Roadhouse, Inc., and the lenders named therein and JPMorgan Chase Bank, N.A., as administrative agent (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K dated April 24, 2025)
10.2
Separation Agreement and Release of Claims dated June 9, 2025 by and between David Christopher Monroe and Texas Roadhouse Management Corp. (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K dated June 9, 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
104
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: August 8, 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)