Texas Roadhouse, Inc. (TXRH) Q2 2025 Earnings Call

Investor webinar replay

Replay transcript excerpt

Now Keith will provide some thoughts. Thanks, Jerry. During the second quarter, we saw our positive traffic trends accelerate from what we experienced in the first quarter. Also, our mixed trends in the second quarter remain similar to what we have seen the last several quarters. These traffic and mixed trends show that our guests continue to appreciate the high quality food, experience, and value that all three of our brands provide. As for commodities, our second quarter inflation was in line with our expectations. Looking ahead, we have increased our guidance for full year inflation to approximately 5%, primarily due to higher than previously forecasted beef inflation, particularly in the third quarter. This guidance includes approximately 30 basis points of full year 2025 inflation related to tariffs, which remains consistent with our initial estimates from last quarter. Labor inflation in the second quarter was also in line with our expectations. Our operators continue to do a great job staffing their restaurants as labor hours grew at approximately 40% of comparable traffic growth. With greater visibility into inflationary trends for the year, we have lowered our guidance for full year wage and other labor inflation to approximately 4%. With regards to capital allocation, we ended the second quarter with $177 million of cash. Cash flow from operations was $128 million, which was offset by $148 million of capital expenditures, dividend payments, and share repurchases, as well as $16 million for the three franchise restaurant acquisitions. As Jerry mentioned, we will be acquiring our support center buildings in the third quarter for a net purchase price of approximately $23 million. We are maintaining our full year of capital expenditure guidance at approximately...