Cost Inflation Isn’t a Big Problem at Texas Roadhouse

Texas Roadhouse Inc. consistently outperforms the rest of its industry and generates superior returns amidst ongoing revenue and earnings growth.

The firm’s focus on value positioning has proven resilient during economic uncertainty, with the brand continuing to gain market share in the casual dining segment. What’s more, the company’s same-store sales growth of 5.8% in the most recent quarter outpaced the commodity inflation it faced, demonstrating effective cost management.

Management’s commitment to returning capital to shareholders through dividends and share repurchases further enhances its appeal. The company increased its quarterly dividend by 11% to $0.68 per share earlier this year and maintains an active share repurchase program.

TEXAS ROADHOUSE INC. (Symbol TXRH on Nasdaq) is a full-service, casual-dining restaurant chain with 797 locations spread across 49 U.S. states and 10 foreign countries. Each of those restaurants operates under one of three banners—Texas Roadhouse (730 locations), sports restaurant Bubba’s 33 (52), and Jaggers (15). Jaggers is a new fast-food concept featuring hamburgers, chicken, milkshakes and salads made from scratch.

The company continues to innovate to attract and retain customers

For instance, Texas Roadhouse and West Madison Foods have just announced the launch of Texas Roadhouse Dairy Dips.

West Madison Foods, based in Chicago, was formed by Brynwood Partners in July 2023 to acquire a portfolio of brands from Ventura Foods. The portfolio includes the exclusive U.S. rights to the iconic Dean’s brand’s dairy dips and Marie’s category-leading salad dressings, dips and spreads.

The new line features three dips that aim to pay tribute to Texas Roadhouse’s iconic appetizers. These ready-to-eat, refrigerated dips went on sale only at Walmart this week.

The dip lineup includes three authentic varieties, each available in 12-ounce tubs:

Cactus Blossom Dip—This dip tastes like fried onion dipped in Texas Roadhouse’s famous Blossom sauce—a Cajun style blend of onion, spices, and garlic.

Rattlesnake Bites Dip—This dip tastes like the restaurant’s jalapeno and cheese appetizer—with a spicy kick of cheddar cheese, garlic, cayenne and bell peppers.

Fried Pickle Dip—Tastes like the fried pickles appetizer, with a flavour of golden-fried pickles in a dip form.

The new dips are manufactured and distributed under license by West Madison Foods.

Sales and profits rise despite lower consumer confidence

In the quarter ended July 1, 2025, overall sales rose 12.7%, to $1.51 billion from $1.34 billion a year earlier. Same-store sales rose 5.8% for company-owned restaurants and 7.0% for U.S. franchise locations. Some four company restaurants and one franchise restaurant were opened in the quarter.

Texas Roadhouse made $124.1 million, or $1.87 a share. That was up 3.3% from $120.1 million, or $1.80.

During the pandemic, the company successfully expanded its takeout, pick-up and delivery business. Its own mobile ordering app has also encouraged repeat business. Not only that, the addition of new delivery channels and digital capabilities puts Texas Roadhouse—with its winning formula of moderately priced but high-quality food—in position to move even higher as the economy normalizes.

Texas Roadhouse raised its quarterly dividend by 11.5% with the April 2025 payment, to $0.68 from $0.61. The stock now yields 1.5%.

Recommendation in Power Growth Investor: Texas Roadhouse Inc. is a buy.

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Scott Clayton

Scott is an associate editor at TSI Network. He is the lead reporter and analyst for Dividend Advisor, Power Growth Investor and Canadian Wealth Advisor and a member of the Investment Planning Committee. Scott began his investment and financial career working with Pat McKeough at The Investment Reporter in the 1980s. Subsequently, he worked at the Financial Post Corporation Service for 10 years. He joined TSI Network in 1998. He is a Bachelor of Economics graduate of York University, and he also has an M.B.A. from the Schulich School of Business.

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