Texas Roadhouse 2025 Q3 Earnings Mixed Results Amid Revenue Growth

Texas Roadhouse (TXRH) reported third-quarter earnings on November 8, 2025, with revenue rising 12.8% year-over-year to $1.44 billion but EPS falling short of estimates. The company maintained a 20-year streak of profitability, though margin pressures from commodity and labor inflation tempered results.

Revenue

The restaurant chain’s total revenue surged to $1.44 billion, driven by a 12.8% year-over-year increase in store weeks and robust comparable restaurant sales growth of 6.1%. Restaurant and other sales accounted for $1.43 billion, with royalties and franchise fees contributing $7.23 million. The performance was bolstered by 19 new restaurant openings in 2025, including 13 Texas Roadhouse locations, five Bubba’s 33 units, and one Jaggers restaurant.

Earnings/Net Income

Earnings per share (EPS) declined 1.6% to $1.25, missing the $1.28 consensus estimate, while net income fell to $84.9 million, a 2.2% drop from $86.77 million in 2024 Q3. Despite the decline, the company has maintained profitability for over two decades, highlighting its operational resilience. The EPS shortfall reflects ongoing margin compression due to rising commodity costs and wage inflation.

Post-Earnings Price Action Review

Shares of Texas Roadhouse fell 3% in after-hours trading to $160.73 following the earnings report, as the EPS miss and updated guidance on commodity inflation weighed on investor sentiment. The stock had gained 5.63% during the latest trading day but slipped 0.51% month-to-date. Analysts remain cautiously optimistic, with a "Moderate Buy" consensus and an average price target of $195.63. The company’s market cap of $10.68 billion and 24.5x P/E ratio position it as a mid-cap play in the restaurant sector.

CEO Commentary

CEO Jerry Morgan emphasized the company’s focus on long-term value, stating, “Our operators drove strong traffic this quarter, offsetting inflationary pressures. We remain committed to strategic pricing and capital allocation.” He highlighted the 1.7% menu price increase implemented in Q4 2025, which has not yet impacted guest behavior. Morgan reiterated confidence in the brand’s value proposition and expansion plans, including 30 new stores in 2025.

Guidance

For 2025, Texas Roadhouse expects commodity inflation of 6%, store week growth of 5%, and labor inflation of 4%. Capex is projected at $400 million. For 2026, the company anticipates 7% commodity inflation, 5–6% store week growth, and 3–4% labor inflation, with capex also targeting $400 million.

Additional News

1. Franchise Acquisitions: Texas Roadhouse acquired three domestic franchise restaurants for $12.7 million in Q4 2025 and plans to purchase five more in 2026.

2. Dividend Update: The board declared a $0.68 per share dividend, payable December 30, 2025, reflecting confidence in cash flow stability.

3. Insider Sales: CTO Hernan Mujica and Director Gregory Moore sold shares totaling $1.44 million, though insider ownership remains minimal at 0.5%.