Texas Roadhouse, Inc.

Good evening and welcome to the Texas Roadhouse fourth quarter earnings conference call. Today's call is being recorded. All participants are now in the listen only mode. After the speaker's remarks, there will be a question and answer session. At that time, if you would like to ask a question, please press star then the number one on your telephone keypad. Should anyone need assistance at any time during the conference, please press star zero and an operator will assist you. I would now like to introduce Michael Balin, Vice President of Investor Relations for Texas Roadhouse. You may begin your conference.

Thank you, Krista, and good evening. By now, you should have access to our earnings release for the fourth quarter and to December 30th, 2025. It may also be found on our website at TexasRoadhouse.com in the investor section. I would like to remind everyone that part of our discussion today will include forward-looking statements. These statements are not guarantees of future performance, and therefore, undue reliance should not be placed upon them. We refer all of you to our earnings release and our recent filings with the SEC. These documents provide a more detailed discussion of the relevant factors that could cause actual results to differ materially from those forward-looking statements. In addition, we may refer to non-GAAP measures. If applicable, reconciliations of the non-GAAP measures to the GAAP information can be found in our earnings release. On the call with me today is Jerry Morgan, Chief Executive Officer of Texas Roadhouse, Mike Lenahan, our Chief Financial Officer, and Keith Humpik, our Chief Accounting and Financial Services Officer. Following the prepared remarks, we will be available to answer your questions. In order to accommodate everyone that would like to ask a question, Could everyone please limit yourself to one question? Now I would like to turn the call over to Jerry.

Thanks, Michael, and good evening, everyone. 2025 was another successful year as revenue grew to nearly $5.9 billion, and all three brands delivered positive sales and traffic growth. We also just completed our 60th consecutive quarter of comparable restaurant sales growth, excluding 2020. That's 15 years of sales growth going back to 2010. 2025 included a number of company milestones and accomplishments. We opened our 800th system-wide restaurant and acquired 20 of our franchise locations. Over 70% of our restaurants set both daily and weekly sales records. We completed the rollout of our digital kitchen and upgraded guest management systems. We also solidified our home in Louisville by purchasing our support center buildings. Our operators continue to serve their communities by raising over $40 million for local schools and nonprofit organizations through their dedicated Dine to Donate fundraisers. And finally, we remain proud to honor those who have served our nation by providing 1.2 million meals to veterans in active military in honor of Veterans Day. On the development front, in 2025, we added 48 restaurants to our company-owned restaurant base. This included 28 new store openings and the previously mentioned acquisition of 20 franchise restaurants. And our franchise partners opened four restaurants, including three international Texas roadhouses, and one domestic Jagger's. For 2026, we continue to expect approximately 35 company restaurant openings across the three brands. 2026 will also benefit from the acquisition of five California franchise restaurants, which occurred on the first day of the fiscal year. Our outlook for franchise development also remains unchanged with the expectation of opening six international Texas roadhouses in four domestic Jaggers. For 33 years, our mission has been legendary food and legendary service with a focus on high level hospitality and value. This will remain the same in 2026 and beyond. While commodity inflation will continue to be a headwind this year, Our operators remain committed to driving growth over the long term by providing a legendary experience to every guest. We just completed menu pricing calls with our operators. As always, maintaining our value proposition was a big topic of conversation. Based on these calls, we will be implementing a 1.9% menu price increase at the beginning of the second quarter. We will also continue to focus on our lineup of beverages with all of our restaurants offering some combination of mocktails, dirty sodas, and a $5 all day, every day beverage special. Moving on to technology. As I mentioned earlier, in late 2025, we completed the rollout of our digital kitchen and upgraded guest management systems. We are pleased with the results and our technology priorities in 2026. will include the continued integration of these enhanced systems. Additionally, in 2026, we will expand the testing of a handheld tablet that our servers can use to input guest orders at the table. As our attention shifts to 2026 and beyond, we will remain relentless in our commitment to driving top-line growth, providing high-level hospitality and everyday value to our guests. and remaining a people-first company. Finally, I want to welcome Mike Lenahan, our new CFO, to the Texas Roadhouse family. For purposes of today's call, Mike is on for introductory purposes only. I will tell you that we are extremely excited to have Mike on the team. He's been getting to know us, and beginning next week, he will start his operations training at each of our brands. Mike, Please share some thoughts on your experience so far.