Thank you, Krista, and good evening. By now, you should have access to our earnings release for the fourth quarter ended December 30th, 2025.

It may also be found on our website at texasroadhouse.com in the Investors 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 Lenihan, our Chief Financial Officer; and Keith Humpich, 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 non-profit organizations through their dedicated Dine to Donate fundraisers.

Finally, we remain proud to honor those who have served our nation by providing 1.2 million meals to veterans and 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. Our franchise partners opened four restaurants, including three international Texas Roadhouses and one domestic Jaggers.

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 and 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 Lenihan, 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.

Thanks, Jerry. I'm honored to have the privilege of joining Texas Roadhouse.

As a member of the restaurant community for the last 20-plus years and a longtime resident of Louisville, I've witnessed Texas Roadhouse's incredible journey to become a leader in the industry and our community. Since joining in December, I've immersed myself into the culture of the support center, learning about the incredible hard work, people-first approach, and teamwork needed to support our restaurants.

I would like to specifically thank Keith, along with the rest of team CFO, who have made my transition seamless and special. It's become clear that we have an incredible team, and I look forward to the opportunity to lead it while helping Texas Roadhouse on its growth journey.

Finally, as Jerry mentioned, I'm looking forward to spending the next several weeks in our restaurants, learning from the best operators in the industry. Now, I'd like to turn it over to Keith for some thoughts on our 2025 performance as well as comments on 2026.

Thanks, Mike. Along with the rest of the team, I would like to welcome you and your family to Texas Roadhouse.

We can't wait to support you further in your Texas Roadhouse journey. Moving on to our results, 2025 was another banner year for top-line growth in our restaurants.

Same-store sales increased 4.9% for the full year, including 2.8% traffic growth. Consolidated average unit volume exceeded $8.4 million, with average weekly sales of over $166,000 at Texas Roadhouse, $122,000 at Bubba's 33, and nearly $73,000 at Jaggers.

In addition, despite cost pressures, we still generated the second highest restaurant margin dollars, income from operations, and earnings per share in our history. While commodity inflation and the lapping of an additional week impacted our ability to generate earnings growth in 2025, we have not deviated from our strategy of serving more guests and expanding our restaurant base across the three brands.

We are confident in our long-term strategy and believe we are set up for continued success over the coming years. Additionally, we ended the year with over $130 million of cash, and cash flow from operations for the full year was over $730 million.

With this cash flow, we funded $388 million of capital expenditures, as well as the acquisition of 20 franchise restaurants for $108 million. We also returned $180 million to shareholders through dividends and another $150 million in share repurchases.

Moving on to 2026, our commodity inflation guidance of approximately 7% remains unchanged, with the continued expectation of being above the guidance in the first half of the year and below the guidance in the second half of the year. Beef inflation accounts for nearly all of the expected commodity inflation throughout the year.

Our guidance for wage and other labor inflation also remains unchanged at 3% to 4%. We expect the wage component of the inflation should moderate despite state-mandated increases, while cost pressures on insurance and other employee benefits will likely trend higher.

Our approach to capital allocation for 2026 remains consistent with our proven philosophy of prioritizing new restaurant development and maintaining the condition of our existing locations. As such, our capital expenditure guidance of approximately $400 million remains unchanged.

This amount does not include $72 million paid at the beginning of the year to complete the previously mentioned acquisition of five California franchise locations. As part of funding this acquisition, we borrowed $50 million on our credit facility.

Also, today we announced a 10% increase to our quarterly dividend, which brings it to 75 cents per quarter. Now, Michael will provide the fourth quarter financial update.

Thanks, Keith. Before I begin the discussion of results, I want to remind everyone that the fourth quarter of 2024 included an additional week.

Lapping the additional week negatively impacted fourth-quarter revenue growth by approximately 9% and earnings growth by approximately 12%. My discussion will be based on reported results, which includes the negative impact.

For the fourth quarter of 2025, we reported revenue growth of 3.1%, driven by a 4% increase in average weekly sales, partially offset by a 0.6% decline in store weeks. We also reported a restaurant margin dollar decrease of 15.6% to $205 million, and a diluted earnings per share decrease of 26.1% to $1.28.

Average weekly sales in the fourth quarter were over $160,000, with to-go representing approximately $22,000 or 13.8% of these total weekly sales. Comparable sales increased 4.2% in the fourth quarter, driven by 1.9% traffic growth and a 2.3% increase in average check.

By month, comparable sales grew 6.1%, 4.8%, and 2.2% for our October, November, and December periods, respectively. Comparable sales for the first seven weeks of the first quarter were up 8.2%, with our restaurants averaging sales of approximately $170,000 per week during that period.

In the fourth quarter, restaurant margin dollars per store week decreased 15.1% to $22,200. Restaurant margin as a percentage of total sales decreased 309 basis points year-over-year to 13.9%.

The year-over-year decline included lapping an estimated 45 basis point benefit from the additional week. Food and beverage costs as a percentage of total sales were 36.4% for the fourth quarter.

The 281 basis point year-over-year increase was driven by 9.5% commodity inflation combined with shifts within the entrée category. This was partially offset by the benefit of a 2.3% check increase.

Commodity inflation for full year 2025 was 6.1%, which was in line with our guidance of approximately 6%. Labor as a percentage of total sales increased 18 basis points to 33.2% as compared to the fourth quarter of 2024.

Labor dollars per store week increased 4.3% due to wage and other labor inflation of 2.9% and growth in hours of 1.4%. For the full year, wage and other labor inflation came in at 3.7%, which was slightly below our guidance of approximately 4%.

Other operating costs were 14.9% of sales, which was 4 basis points better than the fourth quarter of 2024. While higher sales continue to generate leverage within some line items of other operating costs, it was almost fully offset this quarter by lapping the benefit of last year's additional week, as well as an increase in our quarterly reserve for general liability insurance.

These insurance adjustments included $3.5 million of additional expense this year as compared to $2.7 million of additional expense last year. Moving below restaurant margin, G&A dollars declined 6% as compared to the fourth quarter of 2024 and came in at 3.6% of revenue for the fourth quarter.

This was primarily driven by lapping approximately $3.7 million of higher expense related to last year's additional week. With our budgeting process for 2026 complete, we are currently forecasting a low double-digit percentage increase in G&A dollars for full year 2026.

Our effective tax rate for the quarter was 11.5%, and our full year 2025 income tax rate was 13.8%. At this time, we are updating our forecast for the full year 2026 income tax rate from approximately 15% to between 14% and 15%.

Now, I will turn the call back over to Jerry for final comments.

Thanks, Michael. I want to take a moment to thank our guests and our operators for their continued support of our recent Tinnitus Fundraiser in honor of our founder, Kent Taylor.

This year was our fifth annual event, and we raised over $1.1 million for the American Tinnitus Association. We are proud to raise funds for research, education, and awareness for this condition that impacts so many people.

Finally, 33 years ago, Kent opened the first Texas Roadhouse. While most milestone birthday celebrations end in a zero or a five, at our company, we believe 33 means something special.

When we celebrate our birthday, we are also celebrating opportunity, growth, and a commitment to operating at a high level. What started as Kent's dream on a napkin has grown to over 800 locations, three brands, and more than 100,000 Roadies.

I'll close with a happy 33rd birthday to Texas Roadhouse and all of Roadie Nation. On the count of three, can I get a big yee-haw?

One, two, three. Yee-haw!

That concludes our prepared remarks. Operator, please open the line for questions.

Thank you and congrats on a great year. I wanted to squeeze

two

two questions in. The one is just sort of about that fourth quarter and the fact that the sales slowed down in December.

We heard in the industry that there was some weather dislocation in that month, and so a lot of times when a chain gets caught with slow sales late in the quarter, it's tough to adjust the labor and to sort of save the budgets for the quarter, to speak. You did have a higher ratio of labor hours versus traffic than normal for you.

I suspect that was something and you're not one to make excuses, but maybe you could speak to what sort of a drag that noise or even just the fact that that happened late in the quarter might have had on your earnings that quarter. Then I'm just wondering also bigger picture question is just the long term when it comes to beef inflation, it feels weird this cycle where it's not getting better fast in terms of the number of cattle head out there, and the demand is remaining strong.

It feels like the relief may not be as fast as it was the last time we saw one of these cycles. I'm just wondering if you're thinking is there things that you could do besides have a food cost get down to 34 to get back to 17-plus?

You talked about the handhelds, but is there anything that you're thinking about on the labor side and effectiveness there to really offset what might be higher for longer on beef? Thank you.

Hey David, it's Michael. Appreciate the question.

Hopefully I can touch on all the topics. You are correct.

For the fourth quarter, that labor hours ratio was 68%. For October and November, it was sub-50%, and that slowdown that the entire industry saw in December certainly resulted in an elevated number there.

I can tell you, so far the first quarter, we are back to sub-40%, so that does feel like it was a little bit of an anomaly given the results from December. Again, December was impacted by both holiday shifts and weather.

For 2026, I think we believe that we can continue to run in that sub-50% level. As far as beef inflation, yes, we're going to have that pressure here in '26.

Far too early to start predicting what may happen in '27, but I think the industry would say that it'll be certainly a little early to see the herd beginning to expand before late '27. In periods like this, we focus on the dollars and growing the top line and that's what flows through.

Certainly more dollars can help you leverage labor, can help you leverage other operating. We're going to stay true to who we are, and that's really going to be our approach to the business.

Great. Thanks.

Maybe just first, if you just quantify if you can the impact of Fern on the quarter to date. Obviously a very stellar number, but just curious with weather how much that impacted it.

My real question is really around now that you've fully rolled out the digital kitchens, how does it allow you to go on offense in 2026? Can we expect more advertising around carryout?

Could a market test with third-party delivery potentially be something you're focused on? Love to learn more about now the digital kitchen's over, what this allows you to do.

Thank you.

Hey Andrew, it's Michael. I'll certainly start with the question on Fern.

On the first seven weeks it had about a 2.5% negative impact. Now, we were lapping some weather from last year that offset some of that, I would say the net impact of weather on the seven weeks was about 1.5% negative for us.

Then when it relates to the digital kitchen, maybe I'll start there and if somebody else wants to join in. Certainly, it has led to that calmer, quieter kitchen experience.

I think it does free us up to do more to-go business, and I think we've seen that over the last several quarters. Don't know what else will change fundamentally about how we do the business, but I do believe that our operators know that it allows them to do some more to-go.

Andrew, this is Jerry. I would tell you we will continue to learn as we now have the whole concept on the digital kitchen what all it can do for us other than create a very calm environment that our cooks are really enjoying and just how we execute in the back.

It will not lead us to looking at a delivery service at this time.

Great. Thank you.

Just I guess first housekeeping, could you just let me know what price was for the quarter and also I know you talked about taking 1.9% in 2026 at least the first price, what should we expect for pricing, what does that mean on a quarterly basis pricing looks like? Then I do have a question.

Sara, it's Michael. We had 3.1% pricing for the fourth quarter.

We'll have that same 3.1% here in the first quarter, and then with the 1.9% rolling on, that means we'll have 3.6% in the menu for the second and third quarters before we have conversations about what we may do at the beginning of the fourth quarter.

Great. Thank you.

Then I guess as I think about the sort of price-cost dynamic, I know typically you price just for sort of structural changes. I guess as I think through the year ahead, I guess is your sense that part of the reason the traffic growth has accelerated so much is because you've maintained your pricing kind of substantially below the competitive set, or I guess trying to understand how you think about that elasticity, cuz certainly the quarter-to-date trends, again including weather, were very impressive.

Just the sort of philosophy as you think about the year ahead.

Thanks, Sara. This is Jerry.

I'll start it off a little bit on the pricing. We continue to try to be very conservative.

We believe that the full-service dining segment, we are still well underneath that, we continue to have great conversation with our operators. We look at it from the lens of our guest and our business and our shareholders and try to find a solid balance.

We also know beef is a challenge and we will continue to look at it, but we focus on a great experience, value in our menu that's built in throughout everything that we have, and it's been a great strategy. I believe we don't skimp on any of our portions.

We really focus on nothing has changed. All we try to do is get a little bit better for our guest experience.

Guys, good afternoon. Thanks for taking our question.

I wanted to ask around tax refunds. There's been a lot of conversations around that potentially driving some incremental consumption, particularly in, I guess it would be what, the second quarter.

Do you have any historical precedent for in years where there's larger than expected tax refunds, do you see kind of an immediate flow-through into the restaurants and more engagement? If so, is that show up just purely in transactions, or do you maybe see higher attachments?

Any comments you could provide there would be helpful.

Hey Jim, it's Michael. Thanks for the question.

I would say historically if the timing of the refunds moves around, I think we can see it a little bit in our numbers, I do think refunds do have the potential to be a tailwind for us. Whether this time around, who may be getting these refunds will result in a benefit for us to be determined, but typically, yes, when people are getting a larger than normal refund, I would say it may result in them looking to spend some of that.

Hi, good afternoon. Michael, just a clarification on the recent comp trends.

Did you have a calendar impact in December from the shift of New Year's Eve, and if so can you quantify the impact of that on Q4 and on Q1 quarter to date? Then I have a follow-up to that.

David, definitely. We, we had a negative impact from, Christmas shifting and also the timing of our our year end.

The Those two on the quarter had about a little under Well, when you combine Halloween shifting as well, all of those had about a 1% negative impact on the the fourth quarter. The first quarter, or the sorry, the first seven weeks is benefiting from having New Year's Eve in the in in the first quarter, and that's had about a 1% a little over 1% benefit to our first quarter, first seven weeks, excuse me.

Great. That's helpful.

If I net out all the impacts from the calendar and the weather, it does look like Q1 has accelerated pretty meaningfully on the traffic side. I just wanted to get your thoughts on why that's occurred.

I guess, I know there's a lot of crosscurrents in the economy, but I guess, what are your thoughts on what's driving the recent strength?

Thanks, David. This is Jerry.

I do know there were some weather in that timeline, but I really do believe it is just about us operating at a high level. Our operators are out there hustling.

We're continuing to provide a great experience for the guest, and we benefited a little bit from some of that. It'd be hard to measure exactly what it is, but I just think we're out there hustling.

We're trying to make sure our employees have a great experience coming to work, and our guests are having a great experience dining with us, and we are very appreciative of their business.

Thanks. Good afternoon, guys.

Could you comment on just where you are with commodity contracting at this point? Then is your expectation that inflation in the first quarter could look similar to 4Q, and then it sort of comes down ratably from there?

Could you help us a little bit on that?

Sure, Brian, it's Michael. As far as locked, we're certainly more locked fixed price in the first half of the year, probably about 65% locked first half of the year, and only about 25% in the back half of the year.

That's probably not abnormal over the more recent years from that standpoint. As far as the cadence of the commodity inflation, we mentioned that the first half of the year would be probably above our 7% guidance.

I'd say within that, Q1 is probably in line with the guidance, and Q2 is probably where we expect to have our highest commodity inflation of the year, and that could be in the very high single-digit level. Then it should start to come down in the back half of the year.

Great. Thanks.

Jerry, I wanted to ask real quick on the expanding test of the handheld ordering in 2026. I think you guys have been testing this since 2024, I think it was in about 40 restaurants.

Can you maybe a little bit talk about what you're seeing, how much this test will expand and what you expect to see? Then, Michael, if you could just comment on the G&A and how that goes throughout the year, I think you said a low double-digit increase, any details you could provide there would be helpful.

Thanks.

Thanks, Peter. This is Jerry.

On the handhelds, we did absolutely have a test out there. We have pulled back on it just a little bit to rewrite some software.

We have had it in a store right before the holidays and learned a lot of things. We paused it for a minute.

We now have it back in that store, and we've just got a couple of more tweaks to make before I think we can offer it up to the operators. There's no doubt that the handheld and technology side of it does it make us a little bit quicker when it allows the server to take the order at the table, to press send, and obviously from an order accuracy standpoint.

There's a lot of things that we really like about it. What we have to have is it to be reliable.

We're just working through a few more things. We'll continue to get it out there and test, and then I think later on in the year, we should be ready to kind of offer it up for our operators to opt in if they want to do that.

We have made a lot of progress, and I feel good that a lot of focus on it right now.

Peter, this is Keith. On the G&A, I think we guided to low double-digit increases, and I think you can pretty much see that throughout the year, evenly throughout the year.

Thanks. You did touch on it, but with all the moving pieces, how should we be thinking about the restaurant-level margin for the full year 2026?

Hey Jeff, this is Michael. Obviously, there are a lot of moving pieces.

I would say, with 7% commodity inflation, and if that's where we end up, and with the pricing that we're talking about taking and assuming that not all of it flows through the check, I think it's going to be a challenge to get leverage on the cost of sales line. Now, I do believe there is opportunity on the other components of restaurant margin, but that may not fully offset.

It is certainly possible that restaurant margin percents remain under pressure, but the restaurant margin dollars certainly have a path both on an absolute and a dollar per store week basis to go higher, and that's really where more of our focus is right now during this cattle cycle.

Great. Thank you very much.

Jerry, just curious your updated thoughts on Bubba's. Obviously, it's taking on a bigger role in the unit growth, and needless to say when your big brother is Texas Roadhouse, your results probably won't look as good in the short term.

I'm wondering, just because it is in a different category, you think that one day if you do the same focus on Bubba's that you do on Texas, it'll have the same level of resilience that Texas has had, or is Bubba's maybe in a different category in a different position where it'll never achieve something similar? Just trying to get your sense on Bubba's outlook.

Obviously, you're accelerating that growth the next few years, but how you vision that brand long term relative to Texas? Thank you.

Thanks, Jeff. I really like to compare it to the competitive set that it goes in it.

Obviously, at $6.4 million average unit volume, we have a lot of confidence in what Bubba's is doing and who it's competing with, and so we are very excited about it. We've got a great team over there.

We've got great people, great operators executing at a high level, we continue to lean into it and how we can support Bubba's to be as successful as they can be, and I am real proud of where we're at from that. We have done a lot of great things, getting some of the costs out of the building to make it a little more profitable for our operators as we go forward, and we'll continue to look at ways to offset some of the inflation and in other sides of it for that business.

We'll ramp up the growth on it. We'll get approximately 10 this year, and that's what's on schedule for the following year, and we believe that it will continue to add a lot of value to our company as we go forward from a sales and profit standpoint.

Great. Thanks for taking the question.

Mine is about mix, and there's two kind of mixes here that I want to ask about. One is on COGS.

Your COGS have been higher than one would think, given the pricing and the commodity inflation. You've mentioned that's a shift towards steak.

I think that differential increased in the fourth quarter. The question is, what should we expect from that dynamic in '26?

Is there a possibility that that reverses out? Should we continue to expect maybe an increased pressure on COGS from that dynamic?

Then if I look at just mix within check, it increased in the fourth quarter, a little bit kind of confusing to have that increase, or get more negative, yet the COGS impact getting bigger. The question on mix, what is driving the negative mix within same-store sales, and should that continue?

What are the dynamics there going into '26? Thank you.

Thanks, Jake. It's Michael.

First on that mix within our food cost, it was it was lower in the fourth quarter than it had been in the third. It probably was 30, maybe 35 basis points of of pressure where it had been, over 50 basis points in in the third quarter.

From what we're seeing so far, this year, it does seem like we have lapped a lot of that trade-up to the steak category. That doesn't mean that it couldn't re-accelerate, but right now my assumption is maybe 10 to 15 basis points of of of pressure, coming from that, call it usage, line within the cost of sales.

As far as the product mix, you are right, it did step up a little bit in the fourth quarter, and we saw that trend higher as we moved through throughout through the year through the last several months of the quarter. Some of that I think more of that came from the to-go side of it and the growth of our to-go putting a little bit of of pressure more pressure on that line.

As I've looked at the, beginning of this year, some of that pressure has abated. The, alcohol is still negative, but not as negative as it was at at any point last year, some encouraging signs within our mix.

We continue within the the dining room to see positive mix in entrées, appetizers, soft beverages, mocktails, but when the to-go business is growing at a slightly faster rate, and that comes with a lower average check, it it does continue to put a little bit of pressure on on mix.

Hi everyone. Good afternoon.

I just wanted to ask about share gains. You've shown super consistent traffic strengths and peers have shown less so, and restaurants, food, fast casual, QSR, etc.

What portion of the traffic outperformance do you view as structural share gains versus people trading between channels or in and out, and how should we view that durability if the consumer weakens further?

Jacob, I can start. It's hard to predict all of that.

We open up our doors, and we serve our guests and represent our communities all across America and the world, and I think the guest has to make a choice, and they choice is where do they get quality food, where do they get great value, and where do they get hospitality at a high level. I do believe that that's where we continue to win, and that reputation that we have in the industry for consistently providing a great service, great food, and what we call legendary food and legendary service, and that just resonates with our consumer.

They want to spend money, but they want to spend money where they're getting a great product with value, and I believe that's where we settle in nicely.

Great. Thanks, guys, and welcome, Mike.

Just wondering if you guys could break down the G&A increase a bit more. Is it a compensation dynamic, is it related to the acquisitions, anything more you could say there?

Then I guess longer term, and does anything change on how you think about G&A beyond this year? I know you've kind of given some targets in the past for the long term as a percent basis.

Thank you.

Hey, Dennis, it's Keith. Thanks for the question.

In December, we completed our 2026 budget process that included our finalizing our incentive plans for the year. As part of that, we did increase our G&A forecast, and this was mainly due to the new long-term management equity grants that we announced in late December, and then also some higher forecasted incentive compensation.

I can tell you that when we look at G&A as a percentage of sales though, I think we see it coming in very very similar and consistent to what our recent years have been, and we're comfortable with that level.

Hey guys, one question, a quick follow-up. Just can you give us a little better sense on sort of what the guest management software is potentially driving this year?

Is it table yields, or wait time quotes, or how is that kind of up and running?

Thanks, Andy. This is Jerry.

I think it helps in all categories. To be able to manage your floor plan with the amount of consumers that are on the wait list, and for them to be able to navigate a little bit on their own to get on the wait list and allowing us to if folks aren't there.

There's so many components that can help us be faster not only in managing how table turns work, how we get guests on the list, how we get them sat, and then how do we accurately quote them when we're on longer waits. We just went through a tremendous weekend over Valentine's Day, and what a success.

I think it all contributes to the ability to handle that kind of volume. We believe that there's so many little things that all add up to additional success.

It's about all I can share on that, but it's about really being bigger, faster, and stronger, and getting more people sat accurately from that standpoint. Thank you, Andy.

Very helpful. Then on the headquarters acquisition, I assume that's a benefit to G&A this year versus last, but maybe I'm thinking about it wrong.

No, Andy, this is Keith. You are correct.

It will definitely be a benefit for us this year.

Thank you. Jerry, just a quick question for you.

The past year, year and a half or so, you've focused some time on innovating around and focusing on beverage in the menu. I think mocktails, dirty sodas are a couple things, and then having the $5 draft on tap and messaging that to the guests.

Is there anything else on your menu that you see today as an opportunity, either it's not either on the menu today, or it's something that's underperforming your internal expectations, or anything you're hearing from your operators that says, "Hey, this would be a nice area we should be focusing more on"?

Thanks, John. I think on the beverage side, obviously mocktails have become very popular out there, dirty sodas, the five-day $5 all-day, every day.

It is about the beer, but it's really also about that margarita, and really Roadhouse was built on an ice-cold beer and a legendary margarita, and having that 10 $5 10-ounce margarita back in the system has been really, really popular. On the food side, we're always looking at some innovative ideas and talking with our operators about trying different things, whether it be a menu item, whether it be the ability to add on a different kind of smother or even a sidekick of some sort.

We are constantly out there looking at things. We have some things that are out there in test.

We'll continue to monitor and look at them and make a decision down the road if we think it goes regionally or nationwide could be impactful. Yes, we're constantly kind of testing and looking and talking with our operators about what we might look at on the menu.

We don't have a lot that underperform at the level that they would be replaced, it would be a tough one for us to take anything off. It really have to be a superstar to get added to it.

Hey, good afternoon. Thanks for taking the question.

Going back to the beef topic and appreciate some of the color you gave on the cattle cycle dynamics, there's been some optimism, I guess, around beef inflation easing at some point in '26 because of demand destruction at retail. I guess I was curious if you've seen any evidence in any of the data that you've looked at or any of your discussions around that dynamic that maybe does offer a little bit of optimism as the year progresses?

Thanks.

Hey Andrew, it's Michael. Thanks for the question.

I think we've certainly seen at retail some trade away from beef over the last several quarters to whether it be pork or chicken, other proteins. That has been in effect.

To the level that may or may not continue, it is hard for us to know. In our forecast, we aren't trying to predict what the demand side might be.

If there was further, call it demand destruction or trade away from beef, then maybe there is some potential for our numbers to come down. A lot of things to learn about there.

What we do know is what's going on with the size of the herd and what that takes for a rebuild. The demand will really play into how things fully play out.

Good afternoon, guys. Can you update us on the build cost inflation and how it is tracking at both Roadhouse and Bubba's, and especially how you're thinking about cash-on-cash returns for both these concepts as we go forward?

I have a follow-up on the company versus franchise mix. I've seen this slowly tick up over time from low 80s company mix to the high 80s we are currently.

Is there a conscious goal to get to a certain level over time? Can you share some of your thoughts here?

Thank you.

Sure. Hey, this is Michael.

I'll start with the investment cost. On the Roadhouse side, we are expecting our average all-in investment cost that includes 10 times rent factor will be increasing to around $8.9 million.

We think we're around $8.3 to $8.4 million here in 2025. Some of that increase is coming from higher rents.

Certainly, it is not getting any cheaper to build a building, and we also have a handful of restaurants in California that we will be opening in '26, and that probably adds a few hundred thousand dollars to that cost for Roadhouse. On the Bubba's side, the opposite is expected.

We're expecting to see maybe a little more than a half-million dollar reduction in our investment cost going from around $9 million down to $8.5 million, $8.4 million for 2026. We've done a lot of work on the building and getting the prototype to where we want it to be, and we also have a handful of conversions that we are going to be doing, taking an existing building and turning it into a Bubba's.

We've done two of those so far that have opened and definitely seen some cost savings by doing that, we are hopeful and expectant that that can continue with some more of these conversions. As far as returns, we look at it more as an IRR.

We're targeting a mid-teen IRR for our new restaurants, and I'd say we are achieving or exceeding that expectation as an overall portfolio.

thanks and good evening. Most of mine have been asked, but just two nitpicks if I could.

Within the other OpEx line, I'm curious what you're seeing just from an underlying inflation perspective within that line, and any changes in the outlook related to utilities or other areas we should be mindful of. On the acquisition of the five units for $72 million, was there acquired real estate within that acquisition price?

Thank you.

Hey Brian, I'll start with the second one first. There is no acquired real estate within that acquisition price for those California stores.

As far as the other OpEx, I think certainly there is an expectation that utility costs will continue to go higher, but I do think there's still opportunity to potentially get some leverage on other Op in 2026. Probably low single-digit growth in dollars per store week is probably the best guidance I can give you.

Don't think I have an inflationary percentage to throw out at this time, we do think we're going to continue to see some cost pressures, but nothing other than utilities too out of the ordinary.

Hey, maybe sticking with expenses, just labor inflation running under 3% this quarter, I guess is there anything that maybe there were less overtime hours just given the sales, or I guess I'm trying to figure out why that might ramp next year or I guess this year in '26. Thanks.

There are several components. We talk about a wage and other inflation, and so the wage component certainly we have seen that trend down and stabilize, and that's kind of the expectation that we have into 2026.

We do think that there's still going to be some pressures on insurance costs and other components within labor that may be a little bit higher than what we saw in 2025. We guided to 3% to 4% wage and other.

I think the underlying wage component is probably down year-over-year, and the overall could be a little bit down versus 2025.

Hey, thanks for the question. I wanted to talk a little bit more about pricing.

Given the 3.6% you'll have in the second quarter, how you see yourself positioned with respect to top competitors if you feel that your value gap is just as strong or compelling, and maybe if you have any consumer feedback about how the consumer perceives the brand on a value basis, if that's improving.

Thanks, Jim. Absolutely, we will keep a close eye on any conversation that comes up, but obviously after these first seven weeks as we continue to roll, but again, we're built on a conservative approach to pricing.

We still believe we're well under our competitors and a full-service dining average 12-month rolling. We will continue to look at that, but if we get feedback, we absolutely will consider and talk with that.

We really feel like we've got such a great value and we're continuing to operate at a high level and that's the approach that we'll continue to take, and we feel great about it.

Thank you all for your time with us tonight. To Roadie Nation, stay focused on high-level hospitality.

Let's go, Roadhouse!