The year for Texas Roadhouse began as it did for many restaurant brands. Same-store sales started hot at 5.5 percent in January, then crawled to 0.5 percent in February as weather and influenza slowed visits, before climbing back to 4.6 percent in March. And to begin Q2, quarter-to-date, comps surged 5 percent higher, year-over-year, including 3.1 percent traffic growth. A 1.4 percent menu price increase at the start of Q2, as well as improved mix trends, helped the result.
Overall for Q1, the brand posted same-store sales gains of 3.5 percent (1.1 percent traffic and 2.4 percent average check). The result lapped growth of 8.4 percent a year ago, giving Texas Roadhouse a 11.9 percent two-year stack.
Average weekly sales at company restaurants were $163,071, of which $22,146 came from to-go sales, compared to $159,378 and $20,815, respectively, a year ago. CEO Jerry Morgan said weekly figures hit all-time highs in March across all three brands—fast casual Jaggers and sports concept Bubba’s 33, which recently reached 50 stores, factored in. Texas Roadhouse reported more than $1.4 billion in revenue in Q1.
Like usual for the brand, though, whether it’s tariffs, weather, or transitory consumer trends, its Q1 earnings felt like spinning back the record.
It recently buttoned up another managing partner conference. Morgan said the theme this year was “going all-in.” The organization celebrated 2024—its 20th year as a publicly traded company and 32nd overall—where it surged revenue to nearly $5.4 billion as average-unit volumes exceeded $8 million for the first time in Texas Roadhouse history. If you return to 2017, the company was a roughly $2 billion enterprise.
Reflection was part of the conference, as was talking through early 2025 challenges. And then, understanding why a bounce back in March, April, and May suggests what it usually does at Texas Roadhouse: staying the course remains the separator.
“We all have questions about some of the things that are going on,” Morgan said. “But I think, in general, our restaurants are packed full of people and [operators are] feeling very confident that, as the world kind of settles, we’ll be right back to doing what we always do—and that’s to deliver on legendary food and legendary service.”
“And we will focus on what we can control,” he continued, “and do everything we can to serve communities across America and the world at the highest level.”
Morgan said he sees the current environment as an opportunity to double down. That means staying true to Texas Roadhouse’s values, purpose, and its “recipe” of food, high-level hospitality, and everyday value. It’s the path to sustained, year-on-year positive traffic.
But speaking of expansion, Texas Roadhouse opened eight corporate locations in Q1, including a Bubba’s 33 (the 50th opening), and has an additional 15 stores open or under construction as it targets roughly 30 corporate openings for the year, including as many as seven Bubba’s 33 and one Jaggers—a brand that’s up to 14 units (nine U.S. company, four domestic franchised, and one international).
The franchise outlook for 2025 is five international Texas Roadhouses and two stateside Jaggers. The company acquired 13 franchises in early 2024 as well and one later in Q1. It expects to add another three in Q2 and doesn’t plan to tack on more franchise partners to the system going forward for Texas Roadhouse (Jaggers will). There are currently fewer than 40 domestic Texas Roadhouse franchisees left. There’s also no plan to sell corporate stores to franchisees.
On more recent developments, Morgan touched briefly on Bubba’s 33 and a guest attitude and usage study the company completed. It reinforced the family-friendly, sports-themed vibe it’s led with since being founded in 2013 by Kent Taylor, who went by Bubba as a nickname.
“Our guests expressed love for the brand and appreciation for the consistency, quality, and taste of our food,” Morgan said. “We also received high praise for our fun and energetic atmosphere.”
Same-store sales at Bubba’s 33 specifically rose 3.9 percent in the period off year-ago growth of 3.5 percent. Weekly sales at comparable stores were $123,117 and higher for newer locations (restaurants less than six months old) at $145,011. Both numbers were loftier than Q1 2024, when they were $121,086 and $135,977, respectively. The younger-unit figures bumped 6.6 percent. Jaggers averaged $71,000 in the quarter.
“What we really learned [from the study] was that the food for all messaging that we have is really something they understand. It’s family friendly. They love the energy and the enthusiasm around it,” Morgan said. “I mean, Roadhouse is steaks and potatoes and cold beer and margaritas, and Bubba’s is more burgers and pizzas and kind of a rock and roll and sports theme because of all the TVs and things like that. So what we really learned was mostly was that they really love the vibe of Bubba’s, and they love the food for all being so family friendly.”
Morgan also got into some of the technology updates Texas Roadhouse has invested in over recent years to support guest-facing goals. Sixty-five percent of stores are now using its “Digital Kitchen,” or KDS, system, with the remainder scheduled to convert by year’s end.
As it’s noted previously, updated stores are proving more efficient and less stressful for employees. Additionally, Texas Roadhouse’s revamp of its guest management capability has rolled to 70 percent of restaurants, with the rest on track by 2026.
This tech allows operators to quote more accurate wait times and better manage floor plans.
“Really, it helps us calculate how to keep moving fast,” Morgan said.
One thing that is changing, however—Texas Roadhouse is in the process of introducing new beverage menus. For the first time, it’s going to use regional beverage lineups tailored to specific geographic preferences. They’ll also include Texas Roadhouse’s mocktails and $5 all-day, everyday beer and margarita offerings.
Morgan said beverage conversations came from consumers as management traveled the last few years and saw how specials fared. For instance, it used to have a 10-ounce margarita at value and then didn’t coming out of COVID. “That’s really the driver,” Morgan said. “As we started talking to the operators about what we were hearing, they were absolutely in favor of us coming up with a more all-day, every day for the dining room and for the bar offering that they had some input on. The margarita has been a great seller for us in getting that back on. But they have enough flexibility on what kind of beer they wanted to sell for in a pint, in an ice-cold pint class, and so they’ve got a lot of flexibility on that. That’s a big win overall.”
Mocktails, too, were driven by diner demand and trending flavor profiles. Texas Roadhouse added those last fall, later in some stores, and is still measuring the feedback. “But we are excited with what we’re seeing so far.”
Regarding macro concerns, CFO Chris Monroe said tariffs are most likely to hit the company’s commodities, supplies, and equipment. But the reality is there are more unknowns today than chartable facts, such as how much of the expense will be passed through as well as the timing of when Texas Roadhouse will see increased expenses.
Seafood and its international sourcing will be the most impacted item in the basket. Within supplies, tariffs on items like disposables and plateware could tighten costs as well. However, due to inventory and orders already in transit, Monroe doesn’t expect to see the impact until the back half of the year. Equipment is a similar story in that Texas Roadhouse typically orders well in advance. Yet, there’s potential for pressure if existing stores need replacements.
The company increased guidance for full-year commodity inflation to about 3 percent based on projected elevated beef costs and tariffs. It estimated tariffs will drive about 30 basis points of the result.
In Q1, restaurant margin dollars per store week decreased 2.2 percent to about $27,000. Restaurant margin as a percentage of total sales fell 77 basis points year-over-year to 16.6 percent. F&B costs as a percentage of total sales were 34.1 percent. The 22-basis-point year-over-year drop owed to 2.1 percent commodity inflation combined with shifts within the entree category, partially offset by the benefit of a 2.4 percent check increase.
Texas Roadhouse carried 3.1 percent in Q1, which will drop to 2.3 percent in Q2 and Q3, meaning its priced below the company’s inflation guidance. That’s been the strategy throughout the last couple of years—price for structural inflation and do so methodically with the help of managing partners. “We are just a few weeks into the pricing that we took for basically the spring and the summer,” Morgan said. “As we get a little closer to the fall decision, we’ll get with our operators. We’ll kind of see where the climate in the world is at that time and try to make the best decision not only for our shareholders, but for our consumers and for our operators and partners. So we will continue on with that same philosophy.”
The mix shift is one Texas Roadhouse has tracked throughout spending-weary quarters. It had 2.1 percent inflation in Q1 alongside check growth of 2.4 percent. In there was about 30 basis points of pressure. What the brand has seen more of recently is guests trading from chicken or seafood entrees up into steak. Michael Bailen, head of investor relations, said it makes sense given the cost of steak at grocers. “Guests are recognizing the value that we’re offering and choosing to order a steak a little bit more often with us,” he said.
With that comes some positive overall mix that helps the top line but strains COGS a bit considering steak is not as high a margin item as chicken on a percentage basis.
Yet overall, Texas Roadhouse said ongoing results show guests are continuing to reward and trust the brand amid the larger landscape. It’s a place they enjoy spending their time and money.
“Let’s stay focused on legendary food and legendary service and supporting one another as we continue on,” Morgan said.
