Texas Roadhouse Revenue Jumps 11.7%, Net Income Mixed Amid Expansion

TL;DR

**TXRH is growing revenue and expanding aggressively, but watch cash flow and quarterly profit dips closely; it's a growth story with execution risk.**

AI Summary

Texas Roadhouse, Inc. (TXRH) reported a robust increase in total revenue for the 39 weeks ended September 30, 2025, reaching $4,396,044 thousand, up from $3,935,418 thousand in the prior year, a 11.7% increase. Restaurant and other sales were the primary driver, growing to $4,373,427 thousand from $3,913,073 thousand. Despite this revenue growth, net income attributable to Texas Roadhouse, Inc. and subsidiaries for the 13 weeks ended September 30, 2025, slightly decreased to $83,172 thousand ($1.25 diluted EPS) from $84,412 thousand ($1.26 diluted EPS) in the same period last year. For the 39-week period, net income increased to $320,919 thousand ($4.82 diluted EPS) from $317,759 thousand ($4.74 diluted EPS). The company's cash and cash equivalents significantly decreased to $108,172 thousand as of September 30, 2025, from $245,225 thousand at December 31, 2024, primarily due to substantial capital expenditures of $298,808 thousand and acquisitions of franchise restaurants totaling $94,230 thousand. Share repurchases also contributed to cash outflow, amounting to $100,414 thousand for the 39 weeks. The company expanded its restaurant count, operating 702 owned restaurants and 104 franchised restaurants as of September 30, 2025, compared to 657 owned and 115 franchised restaurants a year prior.

Why It Matters

This filing reveals Texas Roadhouse's aggressive expansion strategy, with significant capital expenditures and franchise acquisitions driving revenue growth. For investors, the slight dip in quarterly net income despite higher sales, coupled with a substantial decrease in cash, warrants close attention to profitability margins and cash flow management. Employees and customers will see continued growth in restaurant locations, potentially increasing job opportunities and dining options. In a competitive casual dining market, TXRH's ability to maintain strong sales growth while managing rising costs like food and labor will be crucial for its long-term market position and investor confidence.

Risk Assessment

Risk Level: medium — The company's cash and cash equivalents decreased by $137,053 thousand for the 39 weeks ended September 30, 2025, primarily due to $298,808 thousand in capital expenditures and $94,230 thousand in franchise acquisitions. While revenue is growing, the significant cash outflow for expansion and a slight quarterly net income dip from $84,412 thousand to $83,172 thousand suggest potential pressure on liquidity and profitability if growth slows or costs continue to rise.

Analyst Insight

Investors should monitor TXRH's next earnings call for detailed guidance on future capital expenditures and the return on investment from recent acquisitions. While the long-term growth story remains intact, a cautious approach is advised until there's clearer evidence of improved cash generation and sustained net income growth offsetting the aggressive expansion costs.

Financial Highlights

debt To Equity

N/A

revenue

$4,396,044,000

operating Margin

N/A

total Assets

$3,266,613,000

total Debt

N/A

net Income

$320,919,000

eps

$4.82

gross Margin

N/A

cash Position

$108,172,000

revenue Growth

+11.7%

Revenue Breakdown

Key Numbers

• $4.39B — Total Revenue (Increased by 11.7% for the 39 weeks ended September 30, 2025, compared to $3.93B in the prior year.)
• $83.17M — Net Income (13 weeks) (Slightly decreased from $84.41M in the prior year's comparable quarter.)
• $320.92M — Net Income (39 weeks) (Increased from $317.76M in the prior year's comparable period.)
• $108.17M — Cash and Cash Equivalents (Decreased significantly from $245.23M at December 31, 2024, indicating high cash usage.)
• $298.81M — Capital Expenditures (Increased from $246.54M in the prior year, reflecting aggressive expansion.)
• $94.23M — Franchise Acquisitions (Significant investment in acquiring franchise restaurants during the 39-week period.)
• 702 — Company-Owned Restaurants (Increased from 657 in the prior year, demonstrating physical growth.)
• $1.25 — Diluted EPS (13 weeks) (Slightly down from $1.26 in the prior year's comparable quarter.)
• $4.82 — Diluted EPS (39 weeks) (Up from $4.74 in the prior year's comparable period.)
• $0.68 — Cash Dividends Declared per Share (13 weeks) (Increased from $0.61 in the prior year's comparable quarter.)

Key Players & Entities

• Texas Roadhouse, Inc. (company) — registrant
• JPMorgan Chase Bank, N.A. (company) — lead lender for credit facility
• PNC Bank, N.A. (company) — lead lender for credit facility
• FASB (regulator) — Financial Accounting Standards Board
• $4,396,044 thousand (dollar_amount) — total revenue for 39 weeks ended September 30, 2025
• $83,172 thousand (dollar_amount) — net income for 13 weeks ended September 30, 2025
• $108,172 thousand (dollar_amount) — cash and cash equivalents as of September 30, 2025
• $298,808 thousand (dollar_amount) — capital expenditures for 39 weeks ended September 30, 2025
• $94,230 thousand (dollar_amount) — acquisitions of franchise restaurants for 39 weeks ended September 30, 2025
• 702 (dollar_amount) — company-owned restaurants as of September 30, 2025

FAQ

Risk Factors

• Supply Chain Disruptions [medium — operational]: The company relies on a complex supply chain for its restaurant operations. Disruptions due to natural disasters, geopolitical events, or labor shortages could impact the availability and cost of key ingredients and supplies, potentially affecting restaurant operations and profitability.
• Intense Competition [high — market]: The restaurant industry is highly competitive, with numerous casual dining, fast-casual, and quick-service establishments. Increased competition could lead to pricing pressures, reduced market share, and a need for higher marketing expenditures.
• Food Safety and Health Regulations [high — regulatory]: Strict adherence to food safety and health regulations is critical. Any violations or outbreaks of foodborne illnesses could result in significant reputational damage, legal liabilities, and operational shutdowns.
• Interest Rate Fluctuations [medium — financial]: The company's financial condition can be affected by changes in interest rates, particularly concerning its operating lease liabilities and any potential future debt financing. Rising interest rates could increase borrowing costs and lease expenses.
• Labor Shortages and Wage Increases [high — operational]: The company faces challenges in attracting and retaining qualified employees, particularly in the current labor market. Increased wage pressures and the need for enhanced benefits could negatively impact operating margins.
• Changing Consumer Preferences [medium — market]: Shifts in consumer dining habits, preferences for healthier options, or increased demand for delivery and off-premise dining could impact the company's traditional dine-in model. Failure to adapt could lead to decreased customer traffic.

Industry Context

Texas Roadhouse operates in the highly competitive casual dining segment of the restaurant industry. Key trends include a focus on value, evolving consumer preferences towards healthier options, and the increasing importance of off-premise dining and delivery services. The industry is also sensitive to economic conditions, labor availability, and food costs.

Regulatory Implications

The company must comply with a wide range of regulations, including food safety standards (FDA, local health departments), labor laws (minimum wage, overtime), and environmental regulations. Non-compliance can lead to fines, legal action, and reputational damage, impacting operational continuity and financial performance.

What Investors Should Do

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Key Dates

• 2025-09-30: Quarterly Financial Reporting — Texas Roadhouse reported its financial results for the 13 and 39 weeks ended on this date, showing strong revenue growth but a slight dip in Q3 net income.
• 2024-12-31: Year-End Financial Position — This date represents the prior year-end balance sheet figures, showing a significantly higher cash position ($245,225,000) compared to the current reporting period.

Glossary

Diluted EPS

Earnings per share calculated by dividing net income by the weighted-average number of outstanding common shares, including the dilutive effect of stock options and convertible securities. (Indicates the profitability on a per-share basis, reflecting the impact of all potential shares outstanding.)

Goodwill

An intangible asset that arises when a company acquires another company for a price greater than the fair value of its net assets. (The increase in goodwill from $169,684,000 to $230,305,000 suggests significant acquisitions during the period.)

Operating lease right-of-use assets, net

Represents the value of a company's right to use an asset for the lease term, recognized under ASC 842 accounting standards. (The increase in these assets from $769,865,000 to $841,964,000 indicates expansion through leased properties.)

Retained earnings

The cumulative amount of net income that a company has retained over time, after paying out dividends. (The increase in retained earnings from $1,358,280,000 to $1,460,401,000 reflects profitable operations over time.)

Noncontrolling interests

The portion of equity in a subsidiary that is not attributable to the parent company. (A slight decrease from $15,376,000 to $15,142,000 suggests minor changes in ownership stakes in consolidated subsidiaries.)

Year-Over-Year Comparison

Texas Roadhouse has demonstrated robust top-line growth, with total revenue increasing by 11.7% for the 39 weeks ended September 30, 2025, compared to the prior year. This growth is primarily driven by restaurant and other sales. However, net income for the 13-week period saw a slight decrease, and the company's cash position has significantly declined due to substantial investments in capital expenditures and franchise acquisitions, alongside share repurchases. The number of company-owned restaurants has increased, indicating a physical expansion strategy.

Key Financial Figures

• $0.001 — h registered Common Stock , par value $0.001 per share TXRH NASDAQ Global Select

Filing Documents

• txrh-20250930x10q.htm (10-Q) — 1903KB
• txrh-20250930xex31d1.htm (EX-31.1) — 13KB
• txrh-20250930xex31d2.htm (EX-31.2) — 13KB
• txrh-20250930xex32d1.htm (EX-32.1) — 13KB
• 0001104659-25-108178.txt ( ) — 6543KB
• txrh-20250930.xsd (EX-101.SCH) — 34KB
• txrh-20250930_cal.xml (EX-101.CAL) — 60KB
• txrh-20250930_def.xml (EX-101.DEF) — 153KB
• txrh-20250930_lab.xml (EX-101.LAB) — 343KB
• txrh-20250930_pre.xml (EX-101.PRE) — 239KB
• txrh-20250930x10q_htm.xml (XML) — 1093KB

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION

— Financial Statements (Unaudited) — Texas Roadhouse, Inc. and Subsidiaries

Item 1 — Financial Statements (Unaudited) — Texas Roadhouse, Inc. and Subsidiaries 3 Condensed Consolidated Balance Sheets —September 30, 2025 and December 31, 2024 3 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

— Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 2 — Management's Discussion and Analysis of Financial Condition and Results of Operations 16

— Quantitative and Qualitative Disclosures About Market Risk

Item 3 — Quantitative and Qualitative Disclosures About Market Risk 28

— Controls and Procedures

Item 4 — Controls and Procedures 28

OTHER INFORMATION

PART II. OTHER INFORMATION

— Legal Proceedings

Item 1 — Legal Proceedings 29

— Risk Factors

Item 1A — Risk Factors 29

— Unregistered Sales of Equity Securities and Use of Proceeds

Item 2 — Unregistered Sales of Equity Securities and Use of Proceeds 29

— Defaults Upon Senior Securities

Item 3 — Defaults Upon Senior Securities 29

— Mine Safety Disclosures

Item 4 — Mine Safety Disclosures 29

— Other Information

Item 5 — Other Information 30

— Exhibits

Item 6 — Exhibits 30

Signatures

Signatures 31 2 Table of Contents

— FINANCIAL INFORMATIO N

PART I — FINANCIAL INFORMATIO N

— FINANCIAL STATEMENT S

ITEM 1 — FINANCIAL STATEMENT S Texas Roadhouse, Inc. and Subsidiaries Condensed Consolidated Balance Sheet s (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 outstand