- Record Revenue Achieved $1.5 billion in revenue for the first time, driven by 12.7% year-over-year growth.
- Strong Same-Store Sales Growth 5.8% same-store sales increase due to consistent traffic growth across all regions.
- Margin Expansion Restaurant margin dollars rose 6.1% to $257 million, with diluted EPS up 4% to $1.86.
- Store Expansion Milestone Opened 800th system-wide restaurant, including 4 new company-owned units in Q2.
- Capital Guidance Maintained $400 million capex guidance, with plans to open ~30 company-owned restaurants in 2025.
Same-Store Sales Growth and Traffic Trends
The company saw strong traffic growth throughout the quarter, driving a 5.8% increase in same-store sales. Keith V. Humpich, CFO, noted that the mix trends in the second quarter remained similar to what they have seen in the last several quarters, indicating that guests continue to appreciate the high-quality food, experience, and value that all three of their brands provide.
Guidance and Capital Expenditure
The company is maintaining its full-year capital expenditure guidance at approximately $400 million, with a focus on funding new restaurant development and taking care of their existing restaurant base. They are also updating their guidance for the full-year 2025 income tax rate to approximately 15%.
Valuation Metrics
The company's valuation metrics suggest that the stock is trading at a premium, with a P/E Ratio of 26.47, P/B Ratio of 8.33, and EV/EBITDA of 17.06. The stock's dividend yield is 1.49%, and the free cash flow yield is 4.11%. The company's return on invested capital (ROIC) is 17.96%, and return on equity (ROE) is 32.7%. With a net debt-to-EBITDA ratio of 0.96, the company's balance sheet appears to be in good shape.
Outlook and Growth Strategy
The company is focused on building out its turf with multi-unit operators and expects to continue growing at a higher rate as it settles in and executes at a high level. They are also excited to acquire the remaining five franchise units in California and plans to grow its presence in the state. The company believes people in California will love its legendary food and high-level hospitality.
Mobile App and Off-Premise Sales
The company's mobile app has been a game-changer, with a large percentage of guests using it to place To-Go orders and get on the waitlist. The rollout of the digital kitchen display system (KDS) has helped increase capacity and efficiency in the kitchen, making managers more comfortable servicing off-premise demand.
Conclusion
Texas Roadhouse's strong second-quarter results demonstrate the company's continued top-line momentum and ability to execute on its growth strategy. While the stock may be trading at a premium, the company's valuation metrics suggest that it is still a high-quality business with a strong balance sheet and growth potential.