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Call sheet · Q4'25

Texas Roadhouse (TXRH)

Q4'25 earnings call · held February 19, 2026 · compared with the Q3'25 call · management-credibility review
9/12
Disclosure score
1 high, 2 medium, 3 low flags
Financial quality
Bottom line
The sleeper story is labor productivity, not beef inflation - December's labor efficiency breakdown (68% vs normal sub-50%) and the handheld ordering system being pulled back for software rewrites suggests operational execution is cracking under pressure. Everyone will focus on the 7% commodity inflation guidance, but the real issue is restaurant margin dollars per store week declining for the first time in company history, threatening the managing partner compensation model that built this company. The binding constraint isn't beef costs, it's Jerry's stubborn 'conservative pricing' philosophy while his operators watch their paychecks shrink. As Jerry admitted: 'We're not going to be able to price for every beef inflation as of right now.' My view changes if Q2 shows labor hours back below 40% of traffic growth and margin dollars per store week stabilizing above $23K.

The 30-second version

  • Handheld ordering quietly emerging as the real efficiency play while everyone obsesses over beef
  • Restaurant margin dollars per store week down 15% despite 4% comp growth - the partnership model is breaking
  • Digital kitchen rollout complete but no quantified benefits - classic metric pivot to avoid accountability

What changed this quarter

MetricQ3'25Q4'25Change
Revenue$1.44B (+12.8% YoY)$1.55B (+3.1% YoY)930 bps deceleration, lapping extra week
Same-store sales6.1%4.2%190 bps deceleration
Traffic growth4.3%1.9%240 bps deceleration
Restaurant margin %14.3%13.9%40 bps deterioration
Restaurant margin $ per store week$22,500 (-5.3% YoY)$22,200 (-15.1% YoY)980 bps worse deterioration
Food & beverage costs %35.8%36.4%60 bps inflation pressure
Commodity inflation7.9%9.5%160 bps acceleration
Labor hours growth vs traffic35% of traffic growth68% of traffic growthLabor efficiency collapsed
Average weekly sales$157K$160K$3K increase
Cash flow from operations$144M (Q3 only)$730M (full year)Strong cash generation maintained

Accountability tracked

7 new promises made4 narrative shifts flagged6 prior promises scored
Inside the full report
The complete write-up covers the full promise ledger with kept/missed calls, disclosure-quality scoring, the metrics-vanished check, verification items, and the questions to ask next quarter.
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Scores, kept-promise rates, and flags on this site reflect the author's opinion, applying a stated methodology to statements management made on public earnings calls. Informational and educational purposes only - not investment advice, a recommendation, or an offer to buy or sell any security. Sources believed reliable but not guaranteed; the author may hold positions in the securities discussed.

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