Texas Roadhouse 2025 Q2 Earnings Net Income Grows 2.9%

Texas Roadhouse reported its fiscal 2025 Q2 earnings on Aug 07th, 2025, showing strong revenue and net income growth. The company beat expectations with a 12.7% revenue increase and a 2.9% rise in net income. Management raised its growth outlook, citing positive comparable restaurant sales and a disciplined approach to capital allocation.

Texas Roadhouse’s total revenue rose by 12.7% year-over-year to $1.51 billion in fiscal 2025 Q2, driven by robust performance across its core operations. Restaurant and other sales, the company’s primary revenue stream, accounted for $1.50 billion, while royalties and franchise fees added $8.08 million. This strong performance reflects broad-based demand and effective operational execution across the company’s system-wide network.

Texas Roadhouse’s earnings per share (EPS) increased by 3.9% to $1.87 in 2025 Q2 from $1.80 in the prior year, while net income grew to $126.69 million from $123.08 million. The company’s ability to maintain profitability for over 20 consecutive years highlights its resilience and operational efficiency, even amid challenges like commodity and labor inflation.

The stock price of Texas Roadhouse edged up 0.06% on the latest trading day, but declined 0.06% over the most recent full trading week and 1.72% month-to-date.

A historical analysis of Texas Roadhouse’s post-earnings price action reveals a compelling trend: a strategy of buying the stock after a revenue growth quarter and holding for 30 days has produced a 96.79% return over the past three years—significantly outperforming the benchmark return of 49.40%. This strategy delivered an excess return of 47.39%, with a compound annual growth rate (CAGR) of 25.62% and no maximum drawdown, supported by a Sharpe ratio of 0.95 and volatility of 26.96%. These metrics underscore the stock’s favorable risk-adjusted return profile in the aftermath of strong earnings reports.

Jerry Morgan, CEO of Texas Roadhouse, highlighted strong comparable restaurant sales growth fueled by positive traffic across all three brands. He noted ongoing challenges from commodity inflation but emphasized the company's commitment to operational excellence and preserving its value proposition. Morgan expressed optimism about the company’s future, including the milestone opening of its 800th system-wide restaurant. He reiterated confidence in long-term growth through disciplined capital allocation, new store development, and strategic franchise acquisitions.

For the full fiscal year 2025, Texas Roadhouse anticipates a 5% commodity cost inflation rate, including tariffs, and a 4% wage and labor inflation rate. The company expects an effective income tax rate of 15%, with positive comparable restaurant sales growth, menu pricing as a benefit, store week growth of approximately 5%, and total capital expenditures of around $400 million.

Nigerian news on Aug 07th highlighted several developments, including political tensions around local government elections and infrastructure issues. In Rivers State, local leaders and civil society figures urged President Bola Tinubu to halt the ongoing local government elections and reinstate former governor Franklin Nwobu. Meanwhile, in Abuja, the Nigeria Security and Civil Defence Corps (NSCDC) closed an illegal quarrying operation in Kuje, with 13 suspects facing prosecution. In Lagos, authorities shut down major markets in Ibadan following the burial of a prominent traditional ruler. These events, while not directly tied to Texas Roadhouse, reflect broader socio-economic dynamics within Nigeria, including political pressures and regulatory enforcement actions that may influence the business environment in the long term.