Restaurant company Texas Roadhouse (NASDAQ:TXRH) fell short of the market’s revenue expectations in Q4 CY2025 as sales rose 3.1% year on year to $1.48 billion. Its GAAP profit of $1.28 per share was 13.8% below analysts’ consensus estimates.

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Revenue: $1.48 billion vs analyst estimates of $1.49 billion (3.1% year-on-year growth, 0.8% miss)

EPS (GAAP): $1.28 vs analyst expectations of $1.49 (13.8% miss)

Operating Margin: 6.5%, down from 9.6% in the same quarter last year

Free Cash Flow Margin: 8.9%, similar to the same quarter last year

Locations: 1,242 at quarter end, up from 784 in the same quarter last year

Same-Store Sales rose 4.4% year on year (7.4% in the same quarter last year)

Market Capitalization: $12.36 billion

Jerry Morgan, Chief Executive Officer of Texas Roadhouse, Inc., commented, “We had a strong finish to the year thanks to the dedication of our operators who continued to drive traffic growth. While commodity inflation continues to pressure restaurant margin, we remain committed to preserving our value proposition and maintaining a relentless focus on operational excellence.”

With locations often featuring Western-inspired decor, Texas Roadhouse (NASDAQ:TXRH) is an American restaurant chain specializing in Southern-style cuisine and steaks.

A company’s long-term sales performance is one signal of its overall quality. Even a bad business can shine for one or two quarters, but a top-tier one grows for years.

With $5.88 billion in revenue over the past 12 months, Texas Roadhouse is one of the larger restaurant chains in the industry and benefits from a well-known brand that influences consumer purchasing decisions.

As you can see below, Texas Roadhouse’s 13.5% annualized revenue growth over the last six years was impressive as it opened new restaurants and increased sales at existing, established dining locations.

This quarter, Texas Roadhouse’s revenue grew by 3.1% year on year to $1.48 billion, falling short of Wall Street’s estimates.

Looking ahead, sell-side analysts expect revenue to grow 10.7% over the next 12 months, a slight deceleration versus the last six years. Still, this projection is commendable and indicates the market is baking in success for its menu offerings.

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A restaurant chain’s total number of dining locations influences how much it can sell and how quickly revenue can grow.

Texas Roadhouse operated 1,242 locations in the latest quarter. It has opened new restaurants at a rapid clip over the last two years, averaging 12.5% annual growth, much faster than the broader restaurant sector.

When a chain opens new restaurants, it usually means it’s investing for growth because there’s healthy demand for its meals and there are markets where its concepts have few or no locations.

A company's restaurant base only paints one part of the picture. When demand is high, it makes sense to open more. But when demand is low, it’s prudent to close some locations and use the money in other ways. Same-store sales provides a deeper understanding of this issue because it measures organic growth at restaurants open for at least a year.

Texas Roadhouse has been one of the most successful restaurant chains over the last two years thanks to skyrocketing demand within its existing dining locations. On average, the company has posted exceptional year-on-year same-store sales growth of 6.7%. This performance along with its meaningful buildout of new restaurants suggest it’s playing some aggressive offense.

In the latest quarter, Texas Roadhouse’s same-store sales rose 4.4% year on year. This growth was a deceleration from its historical levels, showing the business is still performing well but losing a bit of steam.

We struggled to find many positives in these results. Its EPS missed and its same-store sales fell slightly short of Wall Street’s estimates. Overall, this was a weaker quarter. The stock traded up 3.5% to $188.90 immediately following the results.

Is Texas Roadhouse an attractive investment opportunity at the current price? The latest quarter does matter, but not nearly as much as longer-term fundamentals and valuation, when deciding if the stock is a buy. We cover that in our actionable full research report which you can read here, it’s free.