Texas Roadhouse, Inc. (TXRH) Market Cap

Texas Roadhouse, Inc. (TXRH) has a market capitalization of $12.15B, based on the latest available market data.

Financials updated after earnings reported 2025-12-30.

Sector: Consumer Cyclical
Industry: Restaurants
Employees: 95000
Exchange: NASDAQ Global Select
Headquarters: Louisville, KY, US
Website: https://www.texasroadhouse.com

Loading company profile...

Expand full investment commentary ▼

📘 TEXAS ROADHOUSE INC (TXRH) — Investment Overview

🧩 Business Model Overview

Texas Roadhouse Inc. (TXRH) operates a family-friendly casual dining restaurant chain known for its focus on hand-cut steaks, made-from-scratch sides, and a Western-themed, lively atmosphere. The company owns and franchises Texas Roadhouse restaurants, as well as the Bubba’s 33 concept, providing a differentiated dining experience within the competitive casual dining sector. Texas Roadhouse emphasizes a high-energy, value-centric offering, with an operational model built on consistent food quality, attractive price points, and strong guest service. Most company revenues are derived from company-operated locations, with additional upside from franchised units and fees.

💰 Revenue Streams & Monetisation Model

The primary revenue source for Texas Roadhouse is in-restaurant dining, supplemented by an increasing focus on to-go orders and, to a lesser extent, catering services. The menu is anchored by steaks, ribs, chicken, and fresh-baked bread, with a carefully managed price/value equation that encourages repeat guest traffic. Beverage sales, which include alcohol in most locations, represent a meaningful portion of revenues. Secondary income arises from franchise royalties and area development fees in select domestic and international markets. Merchandise sales are immaterial to total revenue but contribute to brand affinity.

🧠 Competitive Advantages & Market Positioning

Texas Roadhouse benefits from multiple competitive modes. The brand enjoys high customer loyalty, evidenced by strong repeat visit patterns and robust word-of-mouth marketing. Its distinctive operational model — including a scratch-made menu, upbeat ambiance with line-dancing servers, and a visible kitchen — enhances guest engagement and brand memorability. Stringent cost controls, rigorous site selection criteria, and a culture of hands-on management help maintain industry-leading restaurant-level margins. Furthermore, Texas Roadhouse’s value positioning—offering a premium steakhouse experience at approachable price points—appeals to a wide demographic cohort, effectively positioning it between higher-priced steakhouses and generic casual dining chains.

🚀 Multi-Year Growth Drivers

Texas Roadhouse’s multi-year growth is underpinned by several structural drivers. Organic unit expansion continues to be the primary engine, with domestic and select international white space for new locations across both the flagship and Bubba’s 33 concepts. Same-store sales growth is driven by a combination of modest price increases, incremental menu innovation, and higher guest traffic. Investment in digital and off-premise capabilities — such as online ordering platforms and improved curbside operations — expands transaction avenues without compromising the in-restaurant experience. Brand equity initiatives, community engagement, and an uncompromising focus on operational consistency reinforce the long-term growth outlook. Additionally, franchise development in underpenetrated markets provides a capital-light channel for incremental earnings.

⚠ Risk Factors to Monitor

Texas Roadhouse faces typical industry risks including food cost inflation, labor market volatility, and fluctuations in consumer discretionary spending. Margin pressures may intensify amid rising wage and commodity input costs, particularly for beef. Macroeconomic downturns or regionally specific shocks could dampen traffic. Greater competitive intensity within the fast-casual and value-driven steakhouse segments may pressure sales. The company's success is also closely linked to its ability to preserve its unique culture and operational execution while scaling to new geographies. Regulatory and public health challenges—including evolving food safety and alcohol-related laws—represent additional vigilance points.

📊 Valuation & Market View

Texas Roadhouse typically commands a valuation premium relative to conventional casual dining peers, driven by its above-average same-store sales trends, highly defensible operating margins, and a consistent track record of unit growth. The company’s fortress balance sheet and prudent capital allocation—including regular share repurchases and a shareholder-friendly dividend policy—resonate positively with investors seeking stable, cash-generative restaurant investments. The market tends to reward the resilience of the brand’s compounding growth profile and robust return-on-invested-capital metrics; however, the stock can experience volatility amid broader market rotations away from consumer discretionary exposures and restaurant cyclicality concerns.

🔍 Investment Takeaway

Texas Roadhouse Inc. offers exposure to a distinctive, winning restaurant concept with enduring brand equity and a long runway for actionable growth. Its disciplined, founder-driven operating model and value-centric positioning have enabled robust restaurant-level economics and resilient customer loyalty. While the casual dining landscape remains competitive and exposed to macroeconomic variables, Texas Roadhouse’s execution track record and financial stability support a constructive investment thesis for quality-focused, long-term investors seeking a blend of growth and income in the sector.

⚠ AI-generated — informational only. Validate using filings before investing.

📢 Show latest earnings summary

TXRH Q4 2025 Earnings Summary

Overall summary: Texas Roadhouse delivered strong top-line momentum in 2025 and into early 2026, with sustained comp and traffic growth, record AUVs, and continued unit expansion. However, margins and EPS declined in Q4 due to beef-driven commodity inflation, weather-related sales softness in December, and lapping an extra week. Management is leaning on disciplined value pricing (1.9% increase in Q2), technology-enabled operations (digital kitchen), and new unit growth, while acknowledging 2026 will face elevated beef costs and higher insurance/benefits. Early Q1 trends are robust, capital returns continue, and development remains on track, but margin recovery depends on cost moderation and operational leverage.

Growth

  • 2025 revenue nearly $5.9B; all three brands posted positive sales and traffic
  • 60th consecutive quarter of comp sales growth (ex-2020)
  • 2025 same-store sales +4.9% with +2.8% traffic
  • Consolidated AUV >$8.4M; average weekly sales: Texas Roadhouse ~$166k, Bubba’s 33 ~$122k, Jaggers ~$73k
  • Q4 revenue +3.1% y/y despite lapping an extra week; comps +4.2% (traffic +1.9%, check +2.3%)
  • Q4 average weekly sales >$160k; to-go ~$22k (13.8%)
  • First 7 weeks of Q1 2026 comps +8.2%; AWS ~ $170k; weather net −1.5% impact on comps
  • Over 70% of restaurants set both daily and weekly sales records in 2025

Business development

  • Opened 800th system-wide restaurant
  • 2025: added 48 company-owned units (28 new openings; acquired 20 franchise locations); franchise partners opened 4 (3 international TXRH, 1 domestic Jaggers)
  • Completed rollout of digital kitchen and upgraded guest management systems
  • Purchased Louisville support center buildings
  • 2026 plan: ~35 company openings across three brands
  • Acquired 5 California franchise restaurants on first day of fiscal 2026
  • 2026 franchise pipeline: 6 international Texas Roadhouse, 4 domestic Jaggers
  • Expanded testing of handheld server tablets slated for 2026
  • Appointed new CFO, Mike Lenihan

Financials

  • Q4 restaurant margin dollars $205M (−15.6% y/y); margin rate 13.9% (−309 bps), including ~45 bps headwind from lapping an extra week
  • Q4 diluted EPS $1.28 (−26.1% y/y); effective tax rate 11.5%
  • Q4 food & beverage costs 36.4% of sales (+281 bps) on 9.5% commodity inflation; labor 33.2% (+18 bps); other operating costs 14.9% (flat to slight leverage)
  • Q4 comps by month: Oct +6.1%, Nov +4.8%, Dec +2.2% (holiday/weather impact)
  • 2025 commodity inflation 6.1%; wage/other labor inflation 3.7%
  • Year-end cash >$130M; operating cash flow >$730M in 2025
  • Q4 G&A down 6% y/y; 3.6% of revenue

Capital & funding

  • 2025 capex $388M; acquired 20 franchise restaurants for $108M
  • Returned $180M in dividends and $150M in share repurchases in 2025
  • 2026 capex guidance ~ $400M (excludes $72M for 5 CA franchise acquisitions paid at start of year)
  • Borrowed $50M on credit facility to partially fund CA acquisition
  • Increased quarterly dividend by 10% to $0.75

Operations & strategy

  • Maintain value-focused pricing and hospitality; people-first culture
  • Menu pricing: +3.1% in Q4 2025 and Q1 2026; additional +1.9% at start of Q2 2026 (effective ~3.6% in Q2–Q3 before any further action)
  • Beverage strategy: mocktails, dirty sodas, $5 all-day everyday special
  • Digital kitchen improving back-of-house calm/execution and enabling more to-go; no plans for third-party delivery
  • Integrating digital systems and expanding handheld tablet tests in 2026
  • Labor hours ratio spike in December due to weather/holidays; back to sub-40% early Q1; targeting sub-50% in 2026

Market & outlook

  • 2026 commodity inflation guided to ~7%, heavier in 1H than 2H; beef drives nearly all inflation
  • 2026 wage and other labor inflation 3%–4%; insurance/benefits cost pressures rising
  • 2026 G&A dollars expected to increase low double digits
  • 2026 effective tax rate updated to 14%–15%
  • Industry beef relief likely later given slow herd rebuild (potentially late 2027+); company focusing on top-line growth to leverage fixed costs

Risks & headwinds

  • Elevated beef costs and broader commodity inflation pressuring margins
  • Weather-related disruptions impacting traffic and labor efficiency
  • Insurance and employee benefits inflation
  • State-mandated wage increases
  • Comparability noise from lapping 2024’s extra week

Sentiment: mixed

📊 Texas Roadhouse, Inc. (TXRH) — AI Scoring Summary

📊 AI Stock Rating — Summary

Texas Roadhouse (TXRH) reported Q4 2025 revenue of $1.48 billion with a net income of $84.64 million, translating to an EPS of $1.28. Net margin stood at 5.7%. Free cash flow for the previous quarter was $14.73 million. For the year, dividends totaled $2.72 per share. Year-over-year growth is stable, driven by consistent restaurant performance and same-store sales increases. Profitability is healthy with net income reflecting efficient cost management and operational execution. However, the net margin at 5.7% suggests room for improving cost structure. Cash flow from operations was robust at $143.62 million; however, high capital expenditures resulted in lower free cash flow, pointing to heavy investment in growth and maintenance. On the leverage front, total liabilities are reported as zero, indicating a solid balance sheet, but net debt of $808.36 million versus a relatively low equity suggests a high reliance on debt financing. This position is mitigated by sufficient cash at the end of the period. Shareholder return strategy includes consistent dividends, paying $2.72 total in 2025, and executing share buybacks, though only modestly due to high reinvestment needs. With a consensus price target of $193.91, TXRH's valuation suggests moderately optimistic analyst sentiment, aligned with typical restaurant chain valuations, presenting a mixed outlook constrained by high capex and leverage.

AI Score Breakdown

Revenue Growth — Score: 8/10

Revenue growth is stable and supported by robust same-store sales. However, maintaining consistent growth requires careful management amid competitive pressures.

Profitability — Score: 7/10

The company exhibits strong profitability with efficient cost management reflected in decent margins. EPS trends show a healthy pace but could improve.

Cash Flow Quality — Score: 6/10

Stable operating cash flows are a positive, but heavy capex impacts free cash flow availability. Dividend payments are consistent, creating a solid cash return profile.

Leverage & Balance Sheet — Score: 6/10

Despite having no reported liabilities, net debt is notable and presents risks. Cash levels mitigate some risk, but careful debt management will be crucial.

Shareholder Returns — Score: 7/10

High dividends and share repurchases suggest a focus on rewarding shareholders amidst reinvestment pressure, providing competitive returns.

Analyst Sentiment & Valuation — Score: 7/10

Analyst price targets suggest moderate confidence with a median target of $190. Current valuation depicts industry alignment with positive future earnings expectations.

⚠ AI-generated — informational only, not financial advice.

SEC Filings

Related Companies in Consumer Cyclical

BWA logo

BORGWARNER INC (BWA)

Consumer Cyclical

$12.32B

MOD logo

MODINE MANUFACTURING (MOD)

Consumer Cyclical

$11.98B

FIVE logo

FIVE BELOW INC (FIVE)

Consumer Cyclical

$12.33B

DKNG logo

DRAFTKINGS INC CLASS A (DKNG)

Consumer Cyclical

$11.87B

SCI logo

SERVICE (SCI)

Consumer Cyclical

$11.80B

CHWY logo

CHEWY INC CLASS A (CHWY)

Consumer Cyclical

$11.38B