Texas Roadhouse, Inc.

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 $400 million, inclusive of this transaction. Going forward, our capital allocation philosophy remains unchanged. Our first priority remains the funding of new restaurant development and taking care of our existing restaurant base. We also expect our dividend will continue to increase annually at a measured rate. And at a minimum, we will repurchase shares to offset deletion. Beyond that, we will continue to look at opportunities to acquire additional domestic Texas Roadhouse franchise restaurants, as well as repurchase additional shares as appropriate. And now, Michael will walk us through the second quarter results.

Thanks, Keith. For the second quarter of 2025, we reported revenue growth of 12.7%, primarily driven by a .3% increase in average weekly sales and .2% store week growth. We also reported a restaurant margin dollar increase of .1% to $257 billion and a diluted -per-share increase of 4% to $1.86. Average weekly sales in the second quarter were over $167,000, with ToGo representing approximately $22,000, or .3% of these total weekly sales. Comparable sales increased .8% in the second quarter, driven by 4% traffic growth and a .8% increase in average check. By month, comparable sales grew 4.3%, 7.2%, and .8% for our April, May, and June periods, respectively. And comparable sales for the first five weeks of the third quarter were up 5.3%, with our restaurants averaging sales of over $158,000 per week during that period. In the second quarter, restaurant margin dollars per store week decreased 1% to over $28,500. Restaurant margin as a percentage of total sales decreased 108 basis points year over year to 17.1%. Food and beverage costs as a percentage of total sales were 34% for the second quarter. The 131 basis point year over year increase was driven by .2% commodity inflation, combined with shifts within the entree category, which was partially offset by the benefit of a .8% check increase. Labor as a percentage of total sales increased six basis points to .9% as compared to the second quarter of 2024. Labor dollars per store week increased .4% due to wage and other labor inflation of .8% and growth in hours of 1.6%. Other operating costs were .5% of sales, which was 32 basis points better than the second quarter of 2024. The improvement was driven by leverage on operator bonuses as well as the year over year change in our quarterly reserve for general liability insurance. These insurance adjustments include $300,000 of additional expense this year as compared to $2.1 billion of additional expense last year. Moving below restaurant margin, G&A dollars grew .9% year over year and came in at .2% of revenue for the second quarter. Our effective tax rate for the quarter was 14.9%. Based on our outlook for the remainder of the year, we are updating the guidance for our full year 2025 income tax rate to approximately 15%. Now I will turn the call back over to Jerry for final comments.

Thanks, Michael. I am so proud of our operators and support center roadies who work together as one team to deliver great results. I'm also excited to spend time with our managing partners on our annual fall tour. As always, we look forward to getting feedback on how we can better support them or remove any obstacles so they can focus on partnering with roadies, serving their guests, and growing the business.