Texas Roadhouse, Inc.

Previous wording

The discussion and analysis below of the financial condition and results of operations for Texas Roadhouse, Inc. (the "Company," "we," "our," and/or "us") should be read in conjunction with the consolidated financial statements and the notes to such financial statements (pages F-1 to F-27), "Forward-looking Statements" (page 3), and Risk Factors set forth in Item 1A. Further, the discussion and analysis below generally discusses 2024 items and year-to-year comparisons between 2024 and 2023. Discussions of 2023 items and year-to-year comparisons between 2023 and 2022 are not included in this Annual Report on Form 10-K and can be found in "Management’s Discussion and Analysis of Financial Conditions and Results of Operations" in Part II, Item 7 of our Annual Report on Form 10-K for the fiscal year ended December 26, 2023, filed with the SEC on February 23, 2024.

Current wording

The discussion and analysis below of the financial condition and results of operations for Texas Roadhouse, Inc. (the "Company," "we," "our," and/or "us") should be read in conjunction with the consolidated financial statements and the notes to such financial statements (pages F-1 to F-28), "Forward-looking Statements" (page 3), and Risk Factors set forth in Item 1A. Further, the discussion and analysis below generally discusses 2025 items and year-to-year comparisons between 2025 and 2024. Discussions of 2024 items and year-to-year comparisons between 2024 and 2023 are not included in this Annual Report on Form 10-K and can be found in "Management’s Discussion and Analysis of Financial Conditions and Results of Operations" in Part II, Item 7 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, filed with the SEC on February 28, 2025.

Previous wording

Texas Roadhouse, Inc. is a growing restaurant company operating predominantly in the casual dining segment. Our late founder, W. Kent Taylor, started the business in 1993 with the opening of the first Texas Roadhouse restaurant in Clarksville, Indiana. Since then, we have grown to three concepts with 784 restaurants in 49 states, one U.S. territory, and ten foreign countries. As of December 31, 2024, our 784 restaurants included:

Current wording

Texas Roadhouse, Inc. is a growing restaurant company operating predominantly in the casual dining segment. Our late founder, W. Kent Taylor, started the business in 1993 with the opening of the first Texas Roadhouse restaurant in Clarksville, Indiana. Since then, we have grown to three concepts with 816 restaurants in 49 states, one U.S. territory, and ten foreign countries. As of December 30, 2025, our 816 restaurants included:

Previous wording

We have contractual arrangements that grant us the right to acquire at pre-determined formulas the remaining equity interests in 17 of the 19 majority-owned company restaurants and 55 of the 60 domestic franchise restaurants.

Current wording

We have contractual arrangements that grant us the right to acquire at pre-determined formulas the remaining equity interests in 18 of the 20 majority-owned company restaurants and 36 of the 41 domestic franchise restaurants.

Previous wording

We operate on a fiscal year that ends on the last Tuesday in December. Fiscal year 2024 was 53 weeks in length and, as such, the fourth quarter of fiscal 2024 was 14 weeks in length. Fiscal years 2023 and 2022 were both 52 weeks in length, and the fourth quarters were both 13 weeks in length.

Current wording

We operate on a fiscal year that ends on the last Tuesday in December. Fiscal year 2025 was 52 weeks in length, and the fourth quarter was 13 weeks in length. Fiscal year 2024 was 53 weeks in length, and the fourth quarter was 14 weeks in length.

Previous wording

We have entered into area development and franchise agreements for the development and operation of Texas Roadhouse restaurants in numerous foreign countries and one U.S. territory. We have also entered into domestic and international area development agreements for Jaggers, our fast-casual concept.

Current wording

We have entered into area development and franchise agreements for the development and operation of Texas Roadhouse restaurants in numerous foreign countries and one U.S. territory. We have also entered into domestic and international area development agreements for Jaggers.

Previous wording

In 2024, we opened 31 company restaurants while our franchise partners opened 14 restaurants. The company restaurants included 26 Texas Roadhouse restaurants, four Bubba’s 33 restaurants, and one Jaggers restaurant. The franchise restaurants included 11 international Texas Roadhouse restaurants, including one restaurant in a U.S. territory, two domestic Jaggers restaurants, and our first international Jaggers restaurant.

Current wording

In 2025, we opened 28 company restaurants while our franchise partners opened four restaurants. The company restaurants included 20 Texas Roadhouse restaurants, seven Bubba’s 33 restaurants, and one Jaggers restaurant. The franchise restaurants included three international Texas Roadhouse restaurants, including one restaurant in a U.S. territory, and one domestic Jaggers restaurant.

Previous wording

At our high volume restaurants, we continue to look for opportunities to increase our dining room capacity by adding on to our existing building and/or to increase our parking capacity by leasing or purchasing property that adjoins our site. We also continue to make a number of building modifications and/or expansions to existing restaurants in order to better accommodate increased dine-in and to-go sales. These modifications include room expansions which add additional guest seating, the addition of to-go areas, and cooler expansions to accommodate higher inventory levels.

Current wording

At our high volume restaurants, we continue to look for opportunities to increase our dining room capacity by adding on to our existing building and/or to increase our parking capacity by leasing or purchasing property that adjoins our site. We also continue to make a number of building modifications and/or expansions to existing restaurants in order to better accommodate increased dine-in and to-go sales. These modifications include room expansions which add additional guest seating and cooler expansions to accommodate higher inventory levels.

Previous wording

In recent years, we have relocated several existing Texas Roadhouse locations at or near the end of their associated lease or as a result of eminent domain which allowed us to move to a better site, update them to a current prototypical design, construct a larger building with more seats and greater number of available parking spaces, accommodate increased to-go sales, and/or obtain more favorable lease terms. We continue to evaluate these opportunities particularly as it relates to older locations with strong sales.

Current wording

In recent years, we have relocated a number of existing Texas Roadhouse locations at or near the end of their associated lease or as a result of eminent domain which allowed us to move to a better site, update them to a current prototypical design, construct a larger building with more seats and greater number of available parking spaces, accommodate increased to-go sales, and/or obtain more favorable lease terms. We continue to evaluate these opportunities particularly as it relates to older locations with strong sales.

Previous wording

In 2024, we paid $79.8 million, excluding excise taxes, to repurchase 461,662 shares of our common stock. From inception through December 31, 2024, we have paid $763.3 million through our authorized stock repurchase programs to repurchase 21,958,130 shares of our common stock at an average price per share of $34.76.

Current wording

In 2025, we paid $150.0 million, excluding excise taxes, to repurchase 869,007 shares of our common stock. From inception through December 30, 2025, we have paid $913.3 million through our authorized stock repurchase programs to repurchase 22,827,137 shares of our common stock at an average price per share of $40.01.

Previous wording

comparable restaurant base. We define the comparable restaurant base to include those restaurants open for a full 18 months before the beginning of the period measured excluding restaurants permanently closed during the period, if applicable. Comparable restaurant sales can be impacted by changes in guest traffic counts or by changes in the per person average check amount. Menu price changes, the mix of menu items sold, and the mix of dine-in versus to-go sales can affect the per person average check amount.

Current wording

full 18 months before the beginning of the period measured excluding restaurants permanently closed during the period, if applicable. Comparable restaurant sales can be impacted by changes in guest traffic counts or by changes in the per person average check amount. Menu price changes, the mix of menu items sold, and the mix of dine-in versus to-go sales can affect the per person average check amount.

Previous wording

In calculating restaurant margin, we exclude certain non-restaurant-level costs that support operations, but do not have a direct impact on restaurant-level operational efficiency and performance, including general and administrative expenses. We exclude pre-opening expenses as they occur at irregular intervals and would impact comparability to prior period results. We exclude depreciation and amortization expenses, substantially all of which relate to restaurant-level assets, as they represent a non-cash charge for the investment in our restaurants. We exclude impairment and closure expenses as we believe this provides a clearer perspective of the Company’s ongoing operating performance and a more useful comparison to prior period results. Restaurant margin as presented may not be comparable to other similarly titled measures of other companies in our industry. A reconciliation of income from operations to restaurant margin is included in the Results of Operations section below.

Current wording

In calculating restaurant margin, we exclude certain non-restaurant-level costs that support operations, including pre-opening and general and administrative expenses, but do not have a direct impact on restaurant-level operational efficiency and performance. We exclude pre-opening expenses as they occur at irregular intervals and would impact comparability to prior period results. We exclude depreciation and amortization expenses, substantially all of which relate to restaurant-level assets, as they represent a non-cash charge for the investment in our restaurants. We exclude impairment and closure expenses as we believe this provides a clearer perspective of the Company’s ongoing operating performance and a more useful comparison to prior period results. Restaurant margin as presented may not be comparable to other similarly titled measures of other companies in our industry. A reconciliation of income from operations to restaurant margin is included in the Results of Operations section below.

Previous wording

Franchise Royalties and Fees. Franchise royalties consist of royalties, as defined in our franchise agreement, paid to us by our domestic and international franchisees. Domestic and international franchisees also typically pay an initial franchise fee and/or development fee for each new restaurant or territory. Revenues related to our royalty-based retail products are also included within franchise royalties and fees.

Current wording

Royalties and Franchise Fees. Royalties consist of franchise royalites, as defined in our franchise agreement, paid to us by our domestic and international franchisees, as well as royalties related to our royalty-based retail products. Domestic and international franchisees also typically pay an initial franchise fee and/or development fee for each new restaurant or territory.

Previous wording

Restaurant Other Operating Expenses. Restaurant other operating expenses consist of all other restaurant-level operating costs, the major components of which are supplies, profit sharing incentive compensation for our restaurant managing partners and market partners, utilities, credit card fees, general liability insurance, advertising, repairs and maintenance, property taxes, and outside services.

Current wording

Restaurant Other Operating Expenses. Restaurant other operating expenses consist of all other restaurant-level operating costs, the major components of which are supplies, utilities, profit sharing incentive compensation for our restaurant managing partners and market partners, credit card fees, general liability insurance, advertising, repairs and maintenance, property taxes, and outside services.

Previous wording

*Equity Income from Investments in Unconsolidated Affiliates.*Equity income includes our percentage share of net income earned by unconsolidated affiliates and our share of any gain on the acquisition of these affiliates. As of December 31, 2024 and December 26, 2023, we owned a 5.0% to 10.0% equity interest in 20 domestic franchise restaurants.

Current wording

*Equity Income from Investments in Unconsolidated Affiliates.*Equity income includes our percentage share of net income earned by unconsolidated affiliates and our share of any gain on the acquisition of these affiliates. We owned a 5.0% to 10.0% equity interest in 14 and 20 domestic franchise restaurants as of December 30, 2025 and December 31, 2024, respectively.

Previous wording

Net Income Attributable to Noncontrolling Interests. Net income attributable to noncontrolling interests represents the portion of income attributable to the other owners of the majority-owned restaurants. Our consolidated subsidiaries include 19 and 20 majority-owned restaurants as of December 31, 2024 and December 26, 2023, respectively.

Current wording

Net Income Attributable to Noncontrolling Interests. Net income attributable to noncontrolling interests represents the portion of income attributable to the other owners of the majority-owned restaurants. Our consolidated subsidiaries include 20 and 19 majority-owned restaurants as of December 30, 2025 and December 31, 2024, respectively.

Previous wording

Total revenue increased $741.7 million or 16.0% to $5.4 billion in 2024 compared to $4.6 billion in 2023 primarily due to an increase in comparable restaurant sales and an increase in store weeks. Comparable restaurant sales and store weeks increased 8.5% and 7.5%, respectively, at company restaurants in 2024. The increase in comparable restaurant sales was due to an increase in guest traffic along with an increase in per person average check. The increase in store weeks was due to new store openings and the benefit of the additional week in 2024. The additional week added $114.7 million in revenue and a 2% benefit to store week growth.

Current wording

Total revenue increased $504.7 million or 9.4% to $5.9 billion in 2025 compared to $5.4 billion in 2024 primarily due to an increase in store weeks and comparable restaurant sales partially offset by lapping the benefit of the additional week which added $114.7 million in revenue in 2024. Store weeks and comparable restaurant sales increased 5.0% and 4.9%, respectively, at company restaurants in 2025 compared to 2024. The increase in store weeks was due to new store openings and the acquisition of franchise restaurants. The increase in comparable restaurant sales was due to an increase in guest traffic along with an increase in per person average check.

Previous wording

Net income increased $128.7 million or 42.2% to $433.6 million in 2024 compared to $304.9 million in 2023 primarily due to higher restaurant margin dollars, as described below, partially offset by higher depreciation and amortization expenses and higher general and administrative expenses. Diluted earnings per share increased 42.5% to $6.47 from $4.54 in the prior year primarily due to the increase in net income. Diluted earnings per share growth was positively impacted by approximately 5% as a result of the additional week.

Current wording

Net income decreased $28.0 million or 6.5% to $405.6 million in 2025 compared to $433.6 million in 2024 primarily due to lower restaurant margin dollars, as described below, and higher depreciation and amortization expenses partially offset by lower income tax expense. In addition, income tax expense decreased due to the decrease in profitability. Diluted earnings per share decreased 5.8% to $6.10 from $6.47 in 2024 due to the decrease in net income partially offset by the impact of share repurchases. Diluted earnings per share growth was negatively impacted by approximately 4% as a result of the additional week in 2024.

Previous wording

Restaurant margin dollars increased $207.8 million or 29.4% to $915.8 million in 2024 compared to $708.0 million in 2023 primarily due to higher sales. Restaurant margin, as a percentage of restaurant and other sales, increased to 17.1% in 2024 compared to 15.4% in 2023. The increase in restaurant margin, as a percentage of restaurant and other sales, was primarily driven by higher sales. The benefit of a higher average guest check and labor productivity more than offset wage and other labor inflation of 4.6% and commodity inflation of 0.7%.

Current wording

Restaurant margin dollars decreased $10.1 million or 1.1% to $905.7 million in 2025 compared to $915.8 million in 2024 primarily due to an increase in food and beverage costs and lapping the benefit of the additional week in the prior year partially offset by higher sales. Restaurant margin, as a percentage of restaurant and other sales, decreased to 15.5% in 2025 compared to 17.1% in 2024. The decrease in restaurant margin, as a percentage of restaurant and other sales, was primarily due to commodity inflation of 6.1% and wage and other labor inflation of 3.7% partially offset by higher sales.

Previous wording

In addition, capital allocation spend in 2024 included capital expenditures of $354.3 million, dividends of $162.9 million, and repurchases of common stock of $79.8 million.

Current wording

In addition, capital allocation spend in 2025 included capital expenditures of $388.0 million, franchise acquisitions of $107.5 million, dividends of $180.3 million, and repurchases of common stock of $150.0 million.

Previous wording

Restaurant and other sales increased 16.0% in 2024 compared to 2023. The following table summarizes certain key drivers and/or attributes of restaurant sales at company restaurants for the periods presented. Company restaurant count activity is shown in the restaurant unit activity table above.

Current wording

Restaurant and other sales increased 9.5% in 2025 compared to 2024. The following table summarizes certain key drivers and/or attributes of restaurant sales at company restaurants for the periods presented. Company restaurant count activity is shown in the restaurant unit activity table above.

Previous wording

The increase in restaurant sales for 2024 was primarily attributable to an increase in store weeks and an increase in comparable restaurant sales. The increase in store weeks was driven by the opening of new restaurants and the 2% benefit of the additional week in 2024. The increase in comparable restaurant sales growth was driven by an increase in guest traffic count along with an increase in our per person average check as shown in the table below.

Current wording

The increase in restaurant sales for 2025 was primarily attributable to an increase in store weeks and an increase in comparable restaurant sales. The increase in store weeks was driven by new store openings and the acquisition of franchise restaurants. The increase in comparable restaurant sales was driven by an increase in guest traffic count along with an increase in our per person average check as shown in the table below.

Previous wording

To-go sales as a percentage of restaurant sales were 12.8% in 2024 compared to 12.6% in 2023 and average weekly to-go sales were $19,940 in 2024 compared to $18,088 in 2023.

Current wording

To-go sales as a percentage of restaurant sales were 13.6% in 2025 compared to 12.8% in 2024 and average weekly to-go sales were $21,973 in 2025 compared to $19,940 in 2024.

Previous wording

Per person average check for 2024 includes the benefit of menu price increases of approximately 2.2% and 0.9% implemented in Q2 2024 and Q4 2024, respectively. We implemented menu price increases of approximately 2.2% and 2.7% in Q2 2023 and Q4 2023, respectively. In addition, we plan to implement a menu price increase of approximately 1.4% in early April.

Current wording

Per person average check for 2025 includes the benefit of menu price increases of approximately 1.4% and 1.7% implemented in Q2 2025 and Q4 2025, respectively. We implemented menu price increases of approximately 2.2% and

Previous wording

In 2024, we opened 31 company restaurants, which included 26 Texas Roadhouse restaurants, four Bubba’s 33 restaurants, and one Jaggers restaurant. In 2024, we had store week growth of approximately 7.5% across all concepts, including a benefit of 2% from the additional week. In 2025, we expect store week growth of approximately 5% across all concepts, including a benefit of 2% from the acquisition of 13 domestic franchise restaurants at the beginning of our 2025 fiscal year.

Current wording

In 2025, we opened 28 company restaurants, which included 20 Texas Roadhouse restaurants, seven Bubba’s 33 restaurants, and one Jaggers restaurant. In 2025, we had store week growth of approximately 5.0% across all concepts, including a benefit from franchise acquisitions in 2025, offset by lapping the impact of the additional week in 2024.

Previous wording

Food and beverage costs, as a percentage of restaurant and other sales, decreased to 33.4% in 2024 compared to 34.6% in 2023. The decrease was primarily driven by the benefit of a higher average guest check partially offset by commodity inflation of 0.7% in 2024 primarily due to higher beef costs.

Current wording

Food and beverage costs, as a percentage of restaurant and other sales, increased to 35.0% in 2025 compared to 33.4% in 2024. The increase was primarily driven by commodity inflation of 6.1% in 2025, due to higher beef costs, and shifts within the menu, partially offset by the benefit of a higher guest check.

Previous wording

In 2025, we expect commodity inflation of 3% to 4% for the year with prices locked for approximately 40% of our forecasted costs and the remainder subject to floating market prices.

Current wording

In 2026, we expect commodity inflation of approximately 7% for the year with prices locked for approximately 45% of our forecasted costs and the remainder subject to floating market prices.

Previous wording

Restaurant labor expenses, as a percentage of restaurant and other sales, decreased to 33.1% in 2024 compared to 33.4% in 2023. The decrease was primarily driven by the benefit of a higher guest check and labor productivity partially offset by wage and other labor inflation of 4.6% in 2024. Wage and other labor inflation was driven by higher wage and benefit expense due to labor market pressures along with increases in state-mandated minimum and tipped wage rates and increased investment in our people.

Current wording

Restaurant labor expenses, as a percentage of restaurant and other sales, increased to 33.3% in 2025 compared to 33.1% in 2024. The increase was primarily driven by wage and other labor inflation of 3.7% in 2025, partially offset by the benefit of a higher guest check and labor productivity. Wage and other labor inflation was driven by higher wage and benefit expense due to labor market pressures along with increases in state-mandated minimum and tipped wage rates and increased investment in our people.

Previous wording

Restaurant rent expense, as a percentage of restaurant and other sales, decreased to 1.5% in 2024 compared to 1.6% in 2023. The decrease was driven by the increase in average unit volume partially offset by higher rent expense at our newer restaurants.

Current wording

Restaurant rent expense, as a percentage of restaurant and other sales, increased to 1.6% in 2025 compared to 1.5% in 2024. The increase was driven by higher rent expense at our recently acquired restaurants and newer restaurants, partially offset by the increase in average unit volume.

Previous wording

Restaurant other operating expenses, as a percentage of restaurant and other sales, decreased to 14.9% in 2024 compared to 15.0% in 2023. The decrease was driven by the increase in average unit volume partially offset by higher incentive compensation expense and higher general liability insurance expense. The increase in incentive compensation expense was due to favorable operating results and the increase in general liability insurance expense was due to unfavorable claims experience and an increase in retention levels.

Current wording

Restaurant other operating expenses, as a percentage of restaurant and other sales, decreased to 14.6% in 2025 compared to 14.9% in 2024. The decrease was driven by lower incentive compensation expense, the increase in average unit volume, and lower general liability insurance expense of $2.7 million, partially offset by higher credit card fees and utilities expenses.

Previous wording

Pre-opening expenses were $28.1 million in 2024 compared to $29.2 million in 2023. Pre-opening costs will fluctuate from period to period based on the specific pre-opening costs incurred for each restaurant, the number and timing of restaurant openings, and the number and timing of restaurant managers hired.

Current wording

Pre-opening expenses were $27.5 million in 2025 compared to $28.1 million in 2024. Pre-opening costs will fluctuate from period to period based on the specific pre-opening costs incurred for each restaurant, the number and timing of restaurant openings, and the number and timing of restaurant managers hired.

Previous wording

Depreciation and amortization expenses, as a percentage of revenue, were 3.3% in both 2024 and in 2023. The increase in average unit volume was offset by higher depreciation expense at our newer restaurants.

Current wording

Depreciation and amortization expenses, as a percentage of revenue, increased to 3.5% in 2025 compared to 3.3% in 2024. The increase was driven by higher depreciation at our newer restaurants and intangible asset amortization expense related to the acquisition of franchise rights, partially offset by the increase in average unit volume.

Previous wording

Impairment and closure costs, net were $1.2 million and $0.3 million in 2024 and 2023, respectively. In 2024, impairment and closure costs, net included $0.8 million related to the impairment of a building at a previously relocated store and $0.4 million related to ongoing closure costs for stores which have been relocated. In 2023, impairment and closure costs, net primarily related to ongoing closure costs for stores which have been relocated.

Current wording

Impairment and closure costs, net were $0.3 million and $1.2 million in 2025 and 2024, respectively. In 2025, impairment and closure costs, net related to restaurant relocations. In 2024, impairment and closure costs, net included $0.8 million related to the impairment of a building at a previously relocated store and $0.4 million related to ongoing closure costs for stores which have been relocated.

Previous wording

General and administrative expenses, as a percentage of total revenue, decreased to 4.2% in 2024 compared to 4.3% in 2023. The decrease was driven by the increase in average unit volume and a separation payout of $2.6 million in Q1 2023, related to the retirement of an executive officer, partially offset by higher restricted stock expense and incentive compensation expense. The increase in restricted stock expense was primarily due to shifting our restricted stock grants from quarterly to annually.

Current wording

General and administrative expenses, as a percentage of total revenue, decreased to 3.9% in 2025 compared to 4.2% in 2024. The decrease was driven by the increase in average unit volume, lower incentive compensation expense, and lower restricted stock expense due to lapping the impact of the shift in the timing of our restricted stock grants from quarterly to annually.

Previous wording

Interest income, net was $6.8 million in 2024 compared to $3.0 million in 2023. The increase was driven by increased earnings on our cash and cash equivalents and decreased borrowings on our revolving credit facility in 2024.

Current wording

Interest income, net was $3.1 million in 2025 compared to $6.8 million in 2024. The decrease was driven by decreased earnings on our cash and cash equivalents.

Previous wording

Equity income was $1.2 million in 2024 compared to $1.4 million in 2023. The decrease in 2024 was primarily driven by a $0.6 million gain on the acquisition of four of these affiliates in 2023 partially offset by increased earnings on these remaining affiliates.

Current wording

Equity income was $2.9 million in 2025 compared to $1.2 million in 2024. The increase in 2025 was driven by a $2.2 million gain on the acquisition of six of these affiliates partially offset by decreased earnings from fewer affiliates.

Previous wording

Our effective tax rate increased to 15.3% in 2024 compared to 12.5% in 2023. The increase was driven by a decrease in the impact of the FICA tip tax credit, due to increased profitability. In 2025, we expect an effective tax rate of 15% to 16% based on forecasted operating results.

Current wording

Our effective tax rate decreased to 13.8% in 2025 compared to 15.3% in 2024. The decrease was driven by an increase in the impact of the FICA tip tax credit.

Previous wording

We manage our restaurant and franchising operations by concept and as a result have identified Texas Roadhouse, Bubba's 33, Jaggers, and our retail initiatives as separate operating segments. Our reportable segments are Texas Roadhouse and Bubba's 33. The Texas Roadhouse reportable segment includes the results of our company and franchise Texas Roadhouse restaurants. The Bubba's 33 reportable segment includes the results of our company Bubba's 33 restaurants. Our remaining operating segments, which include the results of our company and franchise Jaggers restaurants and our retail initiatives, are included in Other. In addition, corporate-related assets, depreciation and amortization, and capital expenditures are also included in Other.

Current wording

We manage our restaurant and franchising operations by concept and as a result have identified Texas Roadhouse, Bubba’s 33, and Jaggers as separate operating segments. In addition, we have identified our retail initiatives as a separate operating segment. Finally, we have identified Texas Roadhouse and Bubba's 33 as reportable segments. The Texas Roadhouse reportable segment includes the results of our company and franchise Texas Roadhouse restaurants. The Bubba's 33 reportable segment includes the results of our company Bubba's 33 restaurants. Our remaining operating segments, which include the results of our company and franchise Jaggers restaurants and our retail initiatives, are included in Other. In addition, corporate-related assets, depreciation and amortization, and capital expenditures are also included in Other.

Previous wording

Management uses restaurant margin as the primary measure for assessing performance of our segments. Restaurant margin (in dollars and as a percentage of restaurant and other sales) represents restaurant and other sales less restaurant-level operating costs, including food and beverage costs, labor, rent, and other operating costs. Restaurant margin is used by our chief operating decision maker to evaluate restaurant-level operating efficiency and performance. A reconciliation of income from operations to restaurant margin is included in the Results of Operations section above.

Current wording

The chief operating decision maker ("CODM") uses restaurant margin as the primary measure for assessing performance of our segments. Restaurant margin (in dollars and as a percentage of restaurant and other sales) represents restaurant and other sales less restaurant-level operating costs, including food and beverage costs, labor, rent, and other operating costs. Restaurant margin is used by our CODM to evaluate restaurant-level operating efficiency and performance, assist in the evaluation of operating trends over time, and in making capital allocation decisions. Capital allocation decisions include approving new store openings and the refurbishment, expansion, or relocation of existing restaurants. A reconciliation of income from operations to restaurant margin is included in the Results of Operations section above.

Previous wording

In our Bubba’s 33 reportable segment, restaurant margin dollars increased $12.5 million or 36.8% in 2024. The increase was primarily due to higher sales and improved labor productivity partially offset by wage and other labor inflation.

Current wording

In our Bubba’s 33 reportable segment, restaurant margin dollars increased $2.8 million or 6.0% in 2025. The increase was primarily due to higher sales partially offset by higher food and beverage costs driven by commodity inflation, an increase in general liability insurance expense, and lapping the benefit of the additional week in the prior year.

Previous wording

Net cash provided by operating activities was $753.6 million in 2024 compared to $565.0 million in 2023. The increase was primarily due to an increase in net income, an increase in depreciation and amortization expense, and a favorable change in working capital.

Current wording

Net cash provided by operating activities was $730.1 million in 2025 compared to $753.6 million in 2024. The decrease was primarily due to a decrease in net income and an unfavorable change in working capital partially offset by an increase in depreciation and amortization expense.