By now, you should have access to our earnings release for the fourth quarter ending December 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. 2025 was another successful year as revenue grew to nearly $5.9 billion, and all three brands delivered positive sales and traffic growth.
We also just completed our 60th consecutive quarter of comparable restaurant sales growth, excluding 2020. We opened our 800th system-wide restaurant and acquired 20 of our franchise locations. This included 28 new store openings and the previously mentioned acquisition of 20 franchise restaurants. 2026 will also benefit from the acquisition of five California franchise restaurants, which occurred on the first day of the fiscal year.
Our outlook for franchise development also remains unchanged, with the expectation of opening six international Texas Roadhouse and four domestic Jaggers. While commodity inflation will continue to be a headwind this year, our operators remain committed to driving growth over the long term by providing a legendary experience to every guest. Based on these calls, we will be implementing a 1.9% menu price increase at the beginning of the second quarter. Additionally, in 2026, we will expand the testing of a handheld tablet that our servers can use to input guest orders at the table.
What went well
- Fiscal 2025 revenue grew to nearly $5.9 billion with all three brands delivering positive sales and traffic growth, marking the company's 60th consecutive quarter of comparable restaurant sales growth (excluding 2020) and full-year same-store sales up 4.9% on 2.8% traffic growth.
- Consolidated average unit volume exceeded $8.4 million (weekly sales over $166,000 at Texas Roadhouse, $122,000 at Bubba's 33, and nearly $73,000 at Jaggers), and the company still generated the second-highest restaurant margin dollars, income from operations, and EPS in its history.
- The company opened its 800th system-wide restaurant, added 48 restaurants to its company-owned base (28 new openings plus 20 franchise acquisitions), generated over $730 million of operating cash flow, and returned $180 million in dividends and $150 million in buybacks while announcing a 10% dividend increase to $0.75 per quarter.
- Momentum accelerated into fiscal 2026, with comparable sales up 8.2% over the first seven weeks of the first quarter at roughly $170,000 in average weekly sales.
What went wrong
- Fourth-quarter diluted EPS fell 26.1% to $1.28, hurt by lapping the prior-year 14-week quarter (an estimated 12% earnings-growth drag) and heavy commodity inflation.
- Fourth-quarter restaurant margin declined 309 basis points to 13.9% of sales, restaurant margin dollars dropped 15.6% to $205 million, and margin dollars per store week fell 15.1% to $22,200.
- Food and beverage costs rose 281 basis points to 36.4% of sales on 9.5% fourth-quarter commodity inflation, and management held 2026 commodity inflation guidance at approximately 7% (with beef accounting for nearly all of it) and expected to run above guidance in the first half.
- The general-liability insurance reserve added $3.5 million of expense (versus $2.7 million a year earlier), and the company guided to a low-double-digit percentage increase in full-year 2026 G&A dollars.
More on Texas Roadhouse, Inc.
Reported 2026-02-19 · figures from the Texas Roadhouse, Inc. Q4 2025 earnings call.