Texas Roadhouse Q2 2025: Navigating Contradictions in Beef Inflation, Labor Leverage, and Productivity Expectations

Beef inflation impact on costs, labor leverage and traffic growth, beef inflation expectations, and labor productivity and hour expectations are the key contradictions discussed in Texas Roadhouse's latest 2025Q2 earnings call.



Revenue Growth and Sales Momentum:
- Texas Roadhouse reported revenue of over $1.5 billion for the second quarter, marking the first time in the company's history that revenue surpassed this figure.
- The growth was driven by a 5.8% increase in same-store sales, with strong traffic growth throughout the quarter.
- All three brands—Texas Roadhouse, Bubba's 33, and Jaggers—contributed to the sales growth, highlighting the appeal of the brands and operational execution.

Inflation and Commodity Pricing:
- The company updated its guidance for full-year inflation to approximately 5%, primarily due to higher-than-expected beef inflation, particularly in the third quarter.
- This inflationary pressure was attributed to resilient retail demand for beef and the tightening of beef supply from reduced production by suppliers.

Brand Expansion and Development:
- Texas Roadhouse opened its 800th system-wide restaurant, with plans to open approximately 30 company-owned restaurants in 2025.
- The company is pursuing a strategy of developing Bubba's 33, aiming for double-digit openings next year and potentially reaching 200 locations.
- The expansion is supported by a strong brand pipeline and seasoned management teams, reflecting the company's focus on growth and operational excellence.

Capital Allocation and Financial Position:
- Texas Roadhouse ended the second quarter with $177 million in cash, with a focus on funding new restaurant development and maintaining dividend growth.
- The company completed the acquisition of three franchise restaurants and intends to purchase its remaining five California franchise restaurants in 2026.
- These acquisitions and the purchase of the support center reflect the company's long-term commitment to its hometown of Louisville and a strategy of strategic growth.