Texas Roadhouse’s first quarter results were met with a positive market response, as management pointed to consistent guest demand and solid top-line momentum following a slow February. CEO Jerry Morgan highlighted, “Our average weekly sales for March hit all-time highs at all three brands,” attributing the rebound to strong operational execution and guest loyalty. Management also discussed the impact of weather disruptions early in the quarter but indicated that sales trends normalized as conditions improved. The company’s focus on maintaining value and high service standards resonated with customers, helping to offset ongoing inflationary pressures and mixed economic signals.
Is now the time to buy TXRH? Find out in our full research report (it’s free).
Texas Roadhouse (TXRH) Q1 CY2025 Highlights:
- Revenue: $1.45 billion vs analyst estimates of $1.44 billion (9.6% year-on-year growth, 0.6% beat)
- Adjusted EPS: $1.70 vs analyst expectations of $1.76 (3.3% miss)
- Adjusted EBITDA: $183.5 million vs analyst estimates of $188.4 million (12.7% margin, 2.6% miss)
- Operating Margin: 9.3%, in line with the same quarter last year
- Locations: 792 at quarter end, up from 753 in the same quarter last year
- Same-Store Sales rose 3.7% year on year (8.1% in the same quarter last year)
- Market Capitalization: $12.45 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions Texas Roadhouse’s Q1 Earnings Call
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Sara Senatore (Bank of America) asked about the company’s pricing strategy relative to inflation. Head of Investor Relations Michael Bailen clarified, “We are typically not going to price for commodity inflation,” and confirmed that pricing is below both commodity and wage inflation guidance.
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David Palmer (Evercore ISI) questioned labor leverage trends and whether recent results signal a change in productivity. CFO Chris Monroe confirmed that labor hours grew at just 35% of traffic growth, continuing the multi-quarter trend of improved productivity.
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David Tarantino (Baird) focused on restaurant margin dollars per store week, asking about management’s philosophy given inflation and modest pricing. Bailen acknowledged the metric was softer than usual and said its trajectory will depend on how traffic and inflation develop through the year.
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Jake Bartlett (Truist Securities) inquired about cost of goods sold and whether mix shifts into higher-cost steak will persist. Bailen explained that guests trading up to steak supports top-line growth but pressures COGS, noting this trend is likely to continue in the near term.
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Todd Brooks (Benchmark) asked about the new bar menu’s origins and profitability. CEO Jerry Morgan said the initiative was driven by consumer demand and aims to combine value with flexibility, with mocktails and regional drink options designed to broaden appeal.
Catalysts in Upcoming Quarters
In upcoming quarters, the StockStory team will be watching (1) how menu price adjustments and value positioning impact guest traffic and sales mix, (2) the effect of inflation and tariffs on operating margins, and (3) the operational benefits from full-scale rollout of digital kitchen and guest management systems. The pace of new restaurant openings and franchise acquisitions will also be key signposts for sustained growth.
Texas Roadhouse currently trades at $186.48, up from $172.76 just before the earnings. Is the company at an inflection point that warrants a buy or sell? See for yourself in our full research report (it’s free).
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