Adjusted operating margins declined to 3.5% from 6.0% last year, impacted by inflation in COGS (3.3%), labor (3.4%), health insurance, and higher operating expenses.
GAAP diluted earnings per share were $0.29, up from $0.28 last year; adjusted diluted EPS was $0.32, above guidance range of $0.22 to $0.27 but down from $0.45 last year.
Net debt was $867 million with leverage at 2.7x net debt to adjusted EBITDA and 4.1x lease adjusted net leverage; company aims to reduce lease-adjusted leverage below 3.0x.
Quarterly dividend declared at $0.15 per share; share repurchases are not planned currently.
Total revenues for Q2 2025 were $1 billion, slightly up from $999 million last year, driven by restaurant openings and closures.
U.S. comparable restaurant sales declined by 10 basis points, with traffic down 200 basis points, but results exceeded company expectations.
Effective tax rate for the quarter was 14.9%, with full year 2025 guidance updated to approximately 15%.
Food and beverage costs increased by 131 basis points to 34% of sales due to 5.2% commodity inflation and entree mix shifts.
G&A expenses grew 7.9% year-over-year, representing 4.2% of revenue.
Labor costs as a percentage of sales increased slightly by 6 basis points to 32.9%, with labor dollars per store week up 5.4%.
Other operating costs improved by 32 basis points to 14.5% of sales, driven by leverage on operator bonuses and insurance reserve changes.
Restaurant margin dollars per store week decreased 1% to over $28,500, with restaurant margin as a percentage of sales declining 108 basis points to 17.1%.
Same-store sales increased by 5.8%, supported by 4% traffic growth and a 1.8% increase in average check.
Texas Roadhouse reported a 12.7% revenue growth in Q2 2025, driven by a 5.3% increase in average weekly sales and 7.2% store week growth.
Comparable store sales growth was driven by a 1% increase in transactions and a 0.5% increase in average ticket.
Diluted EPS was $0.81, reflecting a 2.8% increase year-over-year.
Gross margin expanded by 31 basis points to 36.9%, supported by disciplined product cost management and everyday low price strategy.
Merchandise inventories increased modestly by 1.5% per store to $3.1 billion to support improved in-stock levels and tariff impacts.
Operating income grew 2.9% to $577.8 million, and net income increased 1.1% to $430 million.
Returned $196 million to shareholders through dividends and share repurchases in the quarter.
Selling, general and administrative expenses increased by 51 basis points to 23.9%, reflecting planned investments and modest deleverage due to comparable sales levels.
Tractor Supply delivered record second quarter results with net sales growing 4.5% to $4.44 billion and comparable store sales increasing 1.5%.
Dafinchi