Texas Roadhouse, Inc. Announces Fourth Quarter 2024 Results

Rhea-AI Summary

Texas Roadhouse (TXRH) reported strong Q4 2024 results, with comparable restaurant sales increasing 7.7% at company restaurants and 6.3% at domestic franchise restaurants. The company's average weekly sales reached $153,867, with $20,067 in to-go sales.

Restaurant margin increased to 17.0% from 15.3%, driven by higher sales and improved labor productivity. Diluted earnings per share grew 60.1%, benefiting approximately 20% from an additional week in Q4. For full-year 2024, the company opened 31 company restaurants and 14 franchise locations.

The Board approved an 11% increase in quarterly dividend to $0.68 per share and authorized a new $500 million stock repurchase program. Looking ahead to 2025, management expects positive comparable sales growth, 5% store week growth, and commodity cost inflation of 3-4%.

Positive

• Comparable restaurant sales increased 7.7% at company restaurants in Q4
• Restaurant margin improved to 17.0% from 15.3% year-over-year
• Diluted EPS grew 60.1% in Q4 2024
• Board approved 11% dividend increase to $0.68 per share
• New $500 million stock repurchase program authorized
• 45 new restaurants opened in 2024 (31 company-owned, 14 franchise)

Negative

• Facing commodity cost inflation of 3-4% for 2025
• Wage and labor inflation of 4-5% expected in 2025

Insights

Financial Analyst

Texas Roadhouse's Q4 2024 results showcase exceptional operational execution and financial discipline. The 7.7% comparable sales growth at company restaurants, coupled with a substantial improvement in restaurant margin to 17.0%, demonstrates the company's ability to effectively manage costs while driving top-line growth. The expansion of restaurant margin by 170 basis points is particularly impressive given the 5.0% wage inflation environment.

The to-go sales segment continues to be a significant revenue driver, contributing $20,067 to average weekly sales of $153,867. This represents approximately 13% of total sales, indicating successful retention of the off-premise business developed during the pandemic while maintaining strong dine-in performance.

The strategic acquisition of 13 franchise restaurants for $78 million aligns with the company's growth trajectory and should contribute approximately 2% to store week growth in 2025. This move provides immediate revenue capture and operational control in established markets.

Capital allocation decisions reflect management's balanced approach to growth and shareholder returns. The 11% dividend increase and new $500 million stock repurchase program signal strong confidence in future cash flow generation. The company's planned $400 million capital expenditure for 2025 supports its ambitious expansion strategy while maintaining financial flexibility.

Looking ahead, the company's early 2025 comparable sales growth of 2.9% and planned menu price increase of 1.4% in April position it well to navigate expected commodity inflation of 3-4%. The focus on operational efficiency and strategic pricing should help maintain margin strength despite inflationary pressures.

Increases Quarterly Dividend 11% to $0.68 per Share and Approves Stock Repurchase Program of $500 Million

LOUISVILLE, Ky., Feb. 20, 2025 (GLOBE NEWSWIRE) -- Texas Roadhouse, Inc. (NasdaqGS: TXRH), today announced financial results for the fourth quarter and fiscal year ended December 31, 2024.

Financial Results

Financial results for the fourth quarter and fiscal year ended December 31, 2024 and December 26, 2023 were as follows:

	Fourth Quarter Ended												Fiscal Year Ended
($000's, except per share amounts)	December 31, 2024				December 26, 2023				% change				December 31, 2024				December 26, 2023					% change
Total revenue	$	1,437,914			$	1,164,361				23.5	%		$	5,373,332			$	4,631,672				16.0	%
Income from operations		138,552				83,773				65.4	%			516,519				353,989				45.9	%
Net income		115,833				72,430				59.9	%			433,592				304,876				42.2	%
Diluted earnings per share	$	1.73			$	1.08				60.1	%		$	6.47			$	4.54				42.5	%

Note:  Fourth quarter and fiscal year 2024 results include 14 and 53 weeks, respectively, compared to 13 and 52 weeks in the fourth quarter and fiscal year 2023, respectively.

Results for the fourth quarter ended December 31, 2024, as compared to the prior year as applicable, included the following:

• Comparable restaurant sales increased 7.7% at company restaurants and increased 6.3% at domestic franchise restaurants;
• Average weekly sales at company restaurants were $153,867 of which $20,067 were to-go sales as compared to average weekly sales of $141,653 of which $17,793 were to-go sales in the prior year;
• Restaurant margin dollars increased 37.3% to $242.6 million from $176.7 million in the prior year primarily due to higher sales. Restaurant margin, as a percentage of restaurant and other sales, increased to 17.0% from 15.3% in the prior year driven primarily by higher sales. The benefit of a higher average guest check, the benefit of the additional week, and improved labor productivity more than offset wage and other labor inflation of 5.0% and commodity inflation of 0.3%;
• Diluted earnings per share increased 60.1% primarily driven by higher restaurant margin dollars partially offset by higher depreciation and amortization expenses and higher general and administrative expenses. Diluted earnings per share growth was positively impacted by approximately 20% as a result of the additional week;
• Nine company restaurants and five franchise restaurants were opened; and
• Capital allocation spend included capital expenditures of $107.8 million, dividends of $40.7 million, and repurchases of common stock of $35.1 million.

Results for the fiscal year ended December 31, 2024, as compared to the prior year as applicable, included the following:

• Comparable restaurant sales increased 8.5% at company restaurants and increased 7.4% at domestic franchise restaurants;
• Average weekly sales at company restaurants were $155,285 of which $19,940 were to-go sales as compared to average weekly sales of $143,837 of which $18,088 were to-go sales in the prior year;
• Restaurant margin dollars increased 29.4% to $915.8 million from $708.0 million in the prior year primarily due to higher sales. Restaurant margin, as a percentage of restaurant and other sales, increased to 17.1% from 15.4% in the prior year driven primarily by higher sales. The benefit of a higher average guest check and improved labor productivity more than offset wage and other labor inflation of 4.6% and commodity inflation of 0.7%;
• Diluted earnings per share increased 42.5% primarily driven by higher restaurant margin dollars partially offset by higher depreciation and amortization expenses and higher general and administrative expenses. Diluted earnings per share growth was positively impacted by approximately 5% as a result of the additional week;
• 31 company restaurants and 14 franchise restaurants were opened; and
• Capital allocation spend included capital expenditures of $354.3 million, dividends of $162.9 million, and repurchases of common stock of $79.8 million.

Jerry Morgan, Chief Executive Officer of Texas Roadhouse, Inc. commented, “We ended 2024 on an incredible note, which was highlighted by fourth quarter and full-year traffic growth at all three of our brands. These results are a credit to our operators who, as I’ve said before, continue to create an environment where Roadies want to work, and guests want to dine. I also want to thank Roadie Nation and the more than 250 million guests who supported us by dining in our restaurants.”

Morgan continued, “We are off to a strong start in 2025 with the completion of the previously announced acquisition of 13 franchise restaurants. In addition, due to the continued growth across our portfolio, our 800^th restaurant is under construction and will open later this year. As we have consistently done, we will leverage the strength of our balance sheet to continue to fund our development growth while also returning capital to our shareholders.”

Franchise Acquisition

On the first day of the 2025 fiscal year, the Company completed the acquisition of 13 domestic franchise restaurants for an aggregate purchase price of approximately $78 million.

2025 Outlook

Comparable restaurant sales at company restaurants for the first seven weeks of our first quarter of fiscal 2025 increased 2.9% compared to 2024. In addition, the Company plans to implement a menu price increase of approximately 1.4% in early April.

Management updated the following expectation for 2025:

• Commodity cost inflation of 3% to 4%.

Management reiterated the following expectations for 2025:

• Positive comparable restaurant sales growth including the benefit of 2024 menu pricing actions;
• Store week growth of approximately 5%, including a benefit of 2% from the franchise acquisition;
• Wage and other labor inflation of 4% to 5%;
• An effective income tax rate of 15% to 16%; and
• Total capital expenditures of approximately $400 million.

Cash Dividend Payment

On February 19, 2025, the Company’s Board of Directors approved the payment of a quarterly cash dividend of $0.68 per share of common stock.  This payment, which represents an 11% increase from the quarterly cash dividend in 2024, will be distributed on April 1, 2025, to shareholders of record at the close of business on March 18, 2025.

Stock Repurchase Authorization

On February 19, 2025, the Company’s Board of Directors approved a stock repurchase program under which they authorized the Company to repurchase up to $500 million of its common stock. This new stock repurchase program will commence on February 24, 2025 and any repurchases made under such plan will be made by the Company through open market transactions. This stock repurchase program has no expiration date and replaces the previous stock repurchase program of $300 million which was approved on March 17, 2022.

Non-GAAP Measures

The Company prepares the consolidated financial statements in accordance with U.S. generally accepted accounting principles (“GAAP”). Within the press release, the Company makes reference to restaurant margin (in dollars, as a percentage of restaurant and other sales, and per store week). Restaurant margin represents restaurant and other sales less restaurant-level operating costs, including food and beverage costs, labor, rent, and other operating costs. Restaurant margin should not be considered in isolation, or as an alternative, to income from operations. This non-GAAP measure is not indicative of overall company performance and profitability in that this measure does not accrue directly to the benefit of shareholders due to the nature of the costs excluded. Restaurant margin is widely regarded as a useful metric by which to evaluate core restaurant-level operating efficiency and performance over various reporting periods on a consistent basis. In calculating restaurant margin, the Company excludes certain non-restaurant-level costs that support operations, but do not have a direct impact on restaurant-level operational efficiency and performance, including general and administrative expenses. The Company excludes pre-opening expenses as they occur at irregular intervals and would impact comparability to prior period results. The Company excludes depreciation and amortization expenses, substantially all of which relate to restaurant-level assets, as they represent a non-cash charge for the investment in restaurants. The Company excludes impairment and closure expenses as it believes this provides a clearer perspective of ongoing operating performance and a more useful comparison to prior period results. Restaurant margin as presented may not be comparable to other similarly titled measures of other companies in the industry. A reconciliation of income from operations to restaurant margin is included in the accompanying financial tables.

Conference Call

Texas Roadhouse, Inc. is hosting a conference call today, February 20, 2025, at 5:00 p.m. Eastern Time to discuss these results. The call will be webcast live from the investor relations portion of the Company’s website at www.texasroadhouse.com. Listeners may also access the call by dialing (888) 440‑5667 or (646) 960‑0476 for international calls and referencing the Texas Roadhouse, Inc. Fourth Quarter 2024 Earnings. A replay of the call will be available until February 27, 2025, by dialing (800) 770‑2030 or (609) 800‑9909 for international calls and using conference ID 7714420.

About the Company

Texas Roadhouse, Inc. is a growing restaurant company operating predominantly in the casual dining segment that first opened in 1993 and today has grown to over 780 restaurants system-wide in 49 states, one U.S. territory, and ten foreign countries. For more information, please visit the Company’s Web site at www.texasroadhouse.com.

Forward-looking Statements

Certain statements in this release are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such statements are based upon the current beliefs and expectations of the management of Texas Roadhouse, Inc. Actual results may vary materially from those contained in forward-looking statements based on a number of factors including, without limitation, conditions beyond management’s control such as weather, natural disasters, disease outbreaks, epidemics, or pandemics impacting customers or food supplies; labor or supply chain shortages or limited availability of staff or product needed to meet its business standards; changes in consumer discretionary spending and macroeconomic conditions, including inflationary pressures; food safety, and food-borne illness concerns; and other factors disclosed from time to time in its filings with the U.S. Securities and Exchange Commission. Accordingly, there are or will be important factors that could cause actual outcomes or results to differ materially from those indicated in these statements. These factors include but are not limited to those described under “Part I—Item 1A. Risk Factors” of the Annual Report on Form 10‑K for the fiscal year ended December 26, 2023. These factors should not be construed as exhaustive and should be read in conjunction with other filings with the Securities and Exchange Commission. Investors should take such risks into account when making investment decisions. Shareholders and other readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date on which they are made. The Company undertakes no obligation to update any forward-looking statements, except as required by applicable law.

Contacts:
Investor Relations	Media
Michael Bailen	Travis Doster
(502) 515‑7298	(502) 638‑5457

Texas Roadhouse, Inc. and Subsidiaries Condensed Consolidated Statements of Income (in thousands, except per share data) (unaudited)
	Fourth Quarter Ended								Fiscal Year Ended
	December 31, 2024				December 26, 2023				December 31, 2024				December 26, 2023
Revenue:
Restaurant and other sales	$	1,428,780			$	1,157,362			$	5,341,853			$	4,604,554
Franchise royalties and fees		9,134				6,999				31,479				27,118
Total revenue		1,437,914				1,164,361				5,373,332				4,631,672
Costs and expenses:
Restaurant operating costs (excluding depreciation and amortization shown separately below):
Food and beverage		479,461				395,753				1,785,119				1,593,852
Labor		471,511				383,154				1,764,740				1,539,124
Rent		21,017				18,765				80,560				72,766
Other operating		214,142				183,002				795,657				690,848
Pre-opening		6,511				9,523				28,090				29,234
Depreciation and amortization		49,239				40,438				178,157				153,202
Impairment and closure, net		91				144				1,226				275
General and administrative		57,390				49,809				223,264				198,382
Total costs and expenses		1,299,362				1,080,588				4,856,813				4,277,683
Income from operations		138,552				83,773				516,519				353,989
Interest income, net		1,767				254				6,774				2,984
Equity income from investments in unconsolidated affiliates		419				170				1,197				1,351
Income before taxes		140,738				84,197				524,490				358,324
Income tax expense		22,232				9,175				80,145				44,649
Net income including noncontrolling interests		118,506				75,022				444,345				313,675
Less: Net income attributable to noncontrolling interests		2,673				2,592				10,753				8,799
Net income attributable to Texas Roadhouse, Inc. and subsidiaries	$	115,833			$	72,430			$	433,592			$	304,876
Net income per common share attributable to Texas Roadhouse, Inc. and subsidiaries:
Basic	$	1.74			$	1.08			$	6.50			$	4.56
Diluted	$	1.73			$	1.08			$	6.47			$	4.54
Weighted average shares outstanding:
Basic		66,680				66,803				66,752				66,893
Diluted		66,998				67,078				67,011				67,149
Cash dividends declared per share	$	0.61			$	0.55			$	2.44			$	2.20

Texas Roadhouse, Inc. and Subsidiaries Condensed Consolidated Balance Sheets (in thousands) (unaudited)
	December 31, 2024				December 26, 2023
Cash and cash equivalents	$	245,225			$	104,246
Other current assets, net		271,343				252,228
Property and equipment, net		1,617,673				1,474,722
Operating lease right-of-use assets, net		769,865				694,014
Goodwill		169,684				169,684
Intangible assets, net		1,265				3,483
Other assets		115,724				94,999
Total assets	$	3,190,779			$	2,793,376
Current liabilities		828,130				745,434
Operating lease liabilities, net of current portion		826,300				743,476
Other liabilities		162,626				146,955
Texas Roadhouse, Inc. and subsidiaries stockholders’ equity		1,358,347				1,141,662
Noncontrolling interests		15,376				15,849
Total liabilities and equity	$	3,190,779			$	2,793,376

Texas Roadhouse, Inc. and Subsidiaries Condensed Consolidated Statements of Cash Flows (in thousands) (unaudited)
	Fiscal Year Ended
	December 31, 2024				December 26, 2023
Cash flows from operating activities:
Net income including noncontrolling interests	$	444,345			$	313,675
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization		178,157				153,202
Share-based compensation expense		47,055				34,230
Deferred income taxes		(13,803	)			3,115
Other noncash adjustments, net		4,325				3,307
Change in working capital, net of acquisitions		93,550				57,455
Net cash provided by operating activities		753,629				564,984
Cash flows from investing activities:
Capital expenditures - property and equipment		(354,341	)			(347,034	)
Acquisitions of franchise restaurants, net of cash acquired		—				(39,153	)
Proceeds from sale of investments in unconsolidated affiliates		—				627
Proceeds from sale of property and equipment		1,441				2,110
Proceeds from sale leaseback transactions		15,999				16,283
Net cash used in investing activities		(336,901	)			(367,167	)
Cash flows from financing activities:
Payments on revolving credit facility		—				(50,000	)
Repurchase of shares of common stock, including excise taxes as applicable		(80,003	)			(49,993	)
Dividends paid to shareholders		(162,864	)			(147,182	)
Other financing activities, net		(32,882	)			(20,257	)
Net cash used in financing activities		(275,749	)			(267,432	)
Net increase (decrease) in cash and cash equivalents		140,979				(69,615	)
Cash and cash equivalents - beginning of period		104,246				173,861
Cash and cash equivalents - end of period	$	245,225			$	104,246

Texas Roadhouse, Inc. and Subsidiaries Reconciliation of Income from Operations to Restaurant Margin ($ in thousands) (unaudited)
	Fourth Quarter Ended								Fiscal Year Ended
	December 31, 2024				December 26, 2023				December 31, 2024				December 26, 2023
Income from operations	$	138,552			$	83,773			$	516,519			$	353,989
Less:
Franchise royalties and fees		9,134				6,999				31,479				27,118
Add:
Pre-opening		6,511				9,523				28,090				29,234
Depreciation and amortization		49,239				40,438				178,157				153,202
Impairment and closure, net		91				144				1,226				275
General and administrative		57,390				49,809				223,264				198,382
Restaurant margin	$	242,649			$	176,688			$	915,777			$	707,964
Restaurant margin (as a percentage of restaurant and other sales)		17.0	%			15.3	%			17.1	%			15.4	%

Texas Roadhouse, Inc. and Subsidiaries Supplemental Financial and Operating Information ($ amounts in thousands, except restaurant margin $ per store week and weekly sales by group) (unaudited)
	Fourth Quarter Ended
	December 31, 2024				December 26, 2023				Change
Company restaurants (all concepts)
Restaurant and other sales	$	1,428,780			$	1,157,362			23.5	%
Store weeks	9,276				8,158				13.7	%
Comparable restaurant sales (1)	7.7		%		9.9		%
Restaurant operating costs (as a % of restaurant and other sales)
Food and beverage costs	33.5		%		34.2		%		65	bps
Labor	33.0		%		33.1		%		10	bps
Rent	1.5		%		1.6		%		15	bps
Other operating	15.0		%		15.8		%		82	bps
Total	83.0		%		84.7		%
Restaurant margin %	17.0		%		15.3		%		172	bps
Restaurant margin $	$	242,649			$	176,688			37.3	%
Restaurant margin $/Store week	$	26,159			$	21,658			20.8	%
Texas Roadhouse restaurants only:
Store weeks	8,478				7,487				13.2	%
Comparable restaurant sales (1)	7.8		%		10.2		%
Average unit volume (2)	$	2,211			$	1,888			17.1	%
Average unit volume, 2023 adjusted (3)	$	2,211			$	2,069			6.9	%
Weekly sales by group:
Comparable restaurants (564 and 545 units)	$	159,260			$	145,361			9.6	%
Average unit volume restaurants (27 and 19 units)	$	130,282			$	140,765			(7.4	)%
Restaurants less than 6 months old (17 and 18 units)	$	158,119			$	137,123			15.3	%
Bubba’s 33 restaurants only:
Store weeks	680				574				18.5	%
Comparable restaurant sales (1)	6.7		%		3.3		%
Average unit volume (2)	$	1,626			$	1,411			15.2	%
Average unit volume, 2023 adjusted (3)	$	1,626			$	1,536			5.9	%
Weekly sales by group:
Comparable restaurants (40 and 36 units)	$	117,098			$	110,490			6.0	%
Average unit volume restaurants (5 and 4 units)	$	108,687			$	90,822			19.7	%
Restaurants less than 6 months old (4 and 5 units)	$	129,924			$	124,389			4.4	%
Texas Roadhouse franchise restaurants only:
Store weeks	1,576				1,310				20.3	%
Comparable restaurant sales	5.6		%		7.9		%
U.S. franchise restaurants only:
Comparable restaurant sales (1)	6.3		%		8.9		%
Average unit volume (2)	$	2,380			$	2,067			15.1	%
Average unit volume, 2023 adjusted (3)	$	2,380			$	2,260			5.3	%

(1)	Comparable restaurant sales reflect the change in sales for all company restaurants across all concepts, unless otherwise noted, over the same period of the prior year for restaurants open a full 18 months before the beginning of the period, excluding sales from restaurants permanently closed during the period.
(2)	Average unit volume includes sales from restaurants open for a full six months before the beginning of the period, excluding sales from restaurants permanently closed during the period, if applicable.
(3)	For comparative purposes, Q4 2023 was adjusted to include 14 weeks.

Texas Roadhouse, Inc. and Subsidiaries Restaurant Unit Activity (unaudited)
	Fourth Quarter Ended							Fiscal Year Ended
	December 31, 2024		December 26, 2023		Change			December 31, 2024		December 26, 2023		Change
Restaurant openings
Company - Texas Roadhouse	7		9		(2	)		26		22		4
Company - Bubba’s 33	1		2		(1	)		4		5		(1	)
Company - Jaggers	1		1		—			1		3		(2	)
Total company restaurants	9		12		(3	)		31		30		1
Franchise - Texas Roadhouse - Domestic	—		2		(2	)		—		3		(3	)
Franchise - Jaggers - Domestic	1		1		—			2		2		—
Franchise - Texas Roadhouse - Int'l (1)	3		4		(1	)		11		10		1
Franchise - Jaggers - Int'l	1		—		1			1		—		1
Total franchise restaurants	5		7		(2	)		14		15		(1	)
Total restaurants	14		19		(5	)		45		45		—
Restaurant acquisitions/dispositions
Company - Texas Roadhouse	—		—		—			—		8		(8	)
Franchise - Texas Roadhouse - Domestic	—		—		—			—		(8	)	8
Restaurant closures
Franchise - Texas Roadhouse - Domestic	—		—		—			—		(1	)	1
Franchise - Texas Roadhouse - International	(2	)	—		(2	)		(2	)	—		(2	)
Restaurants open at the end of the quarter
Company - Texas Roadhouse	608		582		26
Company - Bubba’s 33	49		45		4
Company - Jaggers	9		8		1
Total company restaurants	666		635		31
Franchise - Texas Roadhouse - Domestic	56		56		—
Franchise - Jaggers - Domestic	4		2		2
Franchise - Texas Roadhouse - Int'l (1)	57		48		9
Franchise - Jaggers - Int'l	1		—		1
Total franchise restaurants	118		106		12
Total restaurants	784		741		43

__________________________
(1) Includes a U.S. territory.

FAQ

What was Texas Roadhouse's (TXRH) comparable sales growth in Q4 2024?

Texas Roadhouse reported a 7.7% increase in comparable sales at company restaurants and 6.3% at domestic franchise restaurants in Q4 2024.

How much did TXRH increase its quarterly dividend in February 2025?

Texas Roadhouse increased its quarterly dividend by 11% to $0.68 per share, payable on April 1, 2025.

What is the size of TXRH's new stock repurchase program announced in February 2025?

The Board authorized a new $500 million stock repurchase program, replacing the previous $300 million program.

How many new restaurants did Texas Roadhouse open in fiscal 2024?

Texas Roadhouse opened 45 new restaurants in fiscal 2024, consisting of 31 company-owned and 14 franchise locations.

What is TXRH's expected commodity cost inflation for 2025?

Management expects commodity cost inflation of 3% to 4% for 2025.