By now, you should have access to our earnings release for the third quarter ended September 30th, 2025. We refer all of you to our earnings release and our recent filings with the SEC. If applicable, reconciliations of the non-GAAP measures to the GAAP information can be found in our earnings release. Moving on to our quarterly results, our strong top-line momentum continued in the third quarter, with revenue topping $1.4 billion.

Through the relentless efforts of the best operators in the business, we achieved our highest quarterly growth of the year in revenue, same-store sales, and traffic. We have also acquired 20 franchise restaurants this year, including three purchased at the beginning of the fourth quarter. Additionally, as mentioned on last quarter's earnings call, we have an agreement in place to acquire our five remaining California franchise locations at the beginning of 2026. In addition, we haven't seen any noticeable change in guest behavior since our 1.7% menu price increase at the beginning of the fourth quarter.

This focus has improved the overall guest experience, and as we become more efficient, our operators can take more orders per hour. Outside the four walls of our restaurants, we are also very excited about the retail segment of our business. We will maintain our focus on driving top line through a combination of guest traffic growth and the expansion of our restaurant base. As Jerry mentioned, our operators drove strong sales performance in the third quarter, with all three brands delivering same-store sales growth.

What went well
  • Revenue grew 12.8% to top $1.4 billion, the company's highest quarterly growth of the year in revenue, same-store sales, and traffic, with comparable sales up 6.1% driven by 4.3% traffic growth and a 1.8% higher average check.
  • All three brands posted average weekly sales strength (nearly $162,000 at Texas Roadhouse, $119,000 at Bubba's 33, and over $75,000 at Jaggers), and to-go reached 13.6% of weekly sales at about $21,500.
  • The company opened seven company-owned restaurants, remained on track for roughly 30 openings in 2025, acquired 20 franchise restaurants year-to-date, and grew its retail presence to over 120,000 outlets while completing the Digital Kitchen and Guest Management System rollout (~95% of restaurants).
  • Cost discipline showed through, with labor as a percentage of sales down 18 basis points to 33.6%, other operating costs 40 basis points better at 14.7%, and G&A dollars down 1.4% year-over-year on lower incentive compensation.
What went wrong
  • Diluted earnings per share decreased 0.8% to $1.25 as margins compressed despite the strong top line.
  • Restaurant margin as a percentage of sales fell 168 basis points to 14.3% and restaurant margin dollars per store week declined 5.3% to about $22,500.
  • Food and beverage costs rose 224 basis points to 35.8% of sales on 7.9% commodity inflation driven by higher-than-anticipated beef prices, prompting the company to raise full-year 2025 commodity inflation guidance to approximately 6% and set an initial 2026 guidance of approximately 7%.
  • A higher general-liability insurance reserve added $1.7 million of expense (versus $0.4 million a year earlier), and management flagged that lapping the prior-year 14-week fourth quarter would cut fourth-quarter EPS growth by roughly 10%.

More on Texas Roadhouse, Inc.

Reported 2025-11-06 · figures from the Texas Roadhouse, Inc. Q3 2025 earnings call.

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