Nasdaq:TXRH
Texas Roadhouse, Inc.
A leading US-based casual dining chain offering premium steaks and a family-friendly atmosphere with consistent same-store sales growth.
Key Metrics
Investment Thesis
Bull Case
The stock offers compelling value given its dominant market position and ability to expand through organic growth and acquisitions, supported by a healthy balance sheet with over $134.7M in cash. Consistent same-store sales growth and effective cost management provide a resilient earnings floor attractive for long-term holders.
Bear Case
Earnings volatility is a concern as net income dipped significantly from the 2024 peak, potentially indicating margin compression or one-time costs not fully offset by revenue gains. High capital expenditure requirements of nearly $388M annually may strain cash flows if same-store sales growth fails to keep pace with expansion plans.
About Texas Roadhouse, Inc.
Texas Roadhouse, Inc. operates as a restaurant holding company specializing in casual dining steakhouse concepts primarily across the United States. The company generates revenue through its flagship Texas Roadhouse brand and various subsidiary restaurants serving premium steaks, fresh seafood, sides, and salads in a family-friendly environment.
Analysis
Management Discussion
Financial performance remains robust with revenue reaching $5.88B in 2025, though net income experienced a slight contraction to $414.3M from the previous year's $444.3M. Operating cash flow of $730.1M demonstrates strong liquidity generation, which was largely deployed into capital expenditures totaling $388.0M for store expansions and upgrades.
Industry Overview
The US casual dining sector is highly competitive but favors established brands that can drive foot traffic through strong marketing and consistent execution. Texas Roadhouse navigates this landscape by maintaining high customer loyalty and adapting its menu offerings to evolving consumer tastes while managing a complex real estate portfolio.
Financial Statements
Income Statement
Balance Sheet
Cash Flow
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Revenue | $4.01B | $4.63B | $5.37B | $5.88B |
| Cost of Revenue | $3.36B | $3.90B | $0 | $0 |
| Gross Profit | $653.6M | $735.1M | $5.37B | $5.88B |
| Operating Expenses | $333.4M | $381.1M | $4.86B | $5.40B |
| Operating Income | $320.2M | $354.0M | $516.5M | $474.7M |
| G&A | $172.7M | $198.4M | $223.3M | $227.3M |
| Stock-Based Comp | $36.7M | $34.2M | $47.1M | $47.8M |
| D&A | $137.2M | $153.2M | $178.2M | $206.6M |
| Amortization | $2.8M | $3.0M | $2.2M | $6.5M |
| Other OpEx | $160.7M | $182.7M | $4.63B | $5.18B |
| Non-Operating Income | $1.1M | $4.3M | $8.0M | $6.0M |
| Pre-Tax Income | $321.3M | $358.3M | $524.5M | $480.8M |
| Income Tax | $43.7M | $44.6M | $80.1M | $66.4M |
| Continuing Ops | $277.6M | $313.7M | $444.3M | $414.3M |
| Discontinued Ops | $0 | $0 | $0 | $0 |
| Net Income | $277.6M | $313.7M | $444.3M | $414.3M |
| Minority Interest | $7.8M | $8.8M | $10.8M | $8.8M |
| Net to Common | $269.8M | $304.9M | $433.6M | $405.6M |
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Current Assets | $396.8M | $356.5M | $516.6M | $451.5M |
| Cash & Equivalents | $173.9M | $104.2M | $245.2M | $134.7M |
| Accounts Receivable | $150.3M | $175.5M | $193.2M | $214.5M |
| Inventory | $38.0M | $38.3M | $40.8M | $45.6M |
| Other Current Assets | $34.7M | $38.4M | $37.4M | $56.7M |
| Long-Term Assets | $2.13B | $2.44B | $2.67B | $3.10B |
| PP&E (Net) | $1.27B | $1.47B | $1.62B | $1.80B |
| Intangibles | $5.6M | $3.5M | $1.3M | — |
| Goodwill | $148.7M | $169.7M | $169.7M | $242.2M |
| Operating Leases | $630.3M | $694.0M | $769.9M | $879.5M |
| Other LT Assets | $73.9M | $95.0M | $115.7M | $172.4M |
| Total Assets | $2.53B | $2.79B | $3.19B | $3.55B |
| Current Liabilities | $652.0M | $745.4M | $828.1M | $908.8M |
| Accounts Payable | $105.6M | $131.6M | $144.8M | $163.4M |
| Current Leases | $25.5M | $27.4M | $28.2M | $31.0M |
| Deferred Revenue | $335.4M | $373.9M | $401.2M | $448.7M |
| Other Current Liab | $185.6M | $212.5M | $254.0M | $265.7M |
| Long-Term Liabilities | $846.0M | $890.4M | $988.9M | $1.16B |
| Long-Term Debt | $50.0M | $0 | — | — |
| LT Operating Leases | $677.9M | $743.5M | $826.3M | $943.1M |
| Other LT Liab | $118.1M | $147.0M | $162.6M | $215.9M |
| Total Liabilities | $1.50B | $1.64B | $1.82B | $2.07B |
| Shareholders' Equity | $1.03B | $1.16B | $1.37B | $1.48B |
| Retained Earnings | $999.4M | $1.14B | $1.36B | $1.46B |
| Total L&E | $2.53B | $2.79B | $3.19B | $3.55B |
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Net Income (CFO) | $277.6M | $313.7M | $444.3M | $414.3M |
| Non-Cash Adjustments | $205.7M | $101.7M | $153.3M | $145.5M |
| Working Capital Changes | $28.4M | $149.6M | $156.0M | $170.2M |
| Cash from Operations | $511.7M | $565.0M | $753.6M | $730.1M |
| Capital Expenditures | $246.1M | $347.0M | $354.3M | $388.0M |
| Cash from Investing | $-263.7M | $-367.2M | $-336.9M | $-482.8M |
| Share Buybacks | $212.9M | $50.0M | $80.0M | $150.4M |
| Dividends Paid | $124.1M | $147.2M | $162.9M | $180.3M |
| Cash from Financing | $-409.8M | $-267.4M | $-275.7M | $-357.8M |
| FX Effect | $0 | $0 | $0 | $0 |
| Net Change in Cash | $-161.8M | $-69.6M | $141.0M | $-110.5M |
| Beginning Cash | $335.6M | $173.9M | $104.2M | $245.2M |
| Ending Cash | $173.9M | $104.2M | $245.2M | $134.7M |
Frequently Asked Questions
How does Texas Roadhouse, Inc. make money?
Core revenue streams include full-service restaurant operations featuring high-margin menu items like steaks and ribs, along with ancillary income from corporate-owned locations and strategic franchise partnerships that leverage the brand's strong reputation.
What are the main risks for TXRH?
Investors should monitor potential inflationary pressures impacting food and labor costs, regulatory risks associated with operating leases in various jurisdictions, and the inherent volatility of discretionary consumer spending during economic downturns.
What is TXRH's competitive advantage?
The company benefits from a highly recognizable brand identity built on consistent quality and hospitality, extensive proprietary real estate holdings that provide operational stability, and a robust employee retention strategy supported by generous compensation packages including stock options.
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Not financial advice. All content is for informational purposes only. Data may contain errors. Consult a qualified financial advisor before making investment decisions.