Financial Analysis

"(13) Commitments and Contingencies The estimated cost of completing capital project commitments at December 30, 2025 and December 31, 2024 was $234.2 million and $243.6 million, respectively. As of December 30, 2025 and December 31, 2024, we were contingently liable for $7.8 million for five lease guarantees and $9.4 million for seven lease guarantees, respectively. These amounts represent the maximum potential liability of future payments under the guarantees. In the event of default, the indemnity and default clauses in our assignment agreements govern our ability to pursue and recover damages incurred. No liabilities have been recorded as of December 30, 2025 or December 31, 2024, as the likelihood of default was deemed to be less than probable and the fair value of the guarantees is not considered significant. During the year ended December 30, 2025, we bought our beef primarily from four suppliers who represent a significant portion of the total beef marketplace. If one of these vendors was unable to fulfill their obligations, we believe that the remaining suppliers could meet our needs by supplying comparable products at potentially higher costs. Occasionally, we are a defendant in litigation arising in the ordinary course of business, including ""slip and fall"" accidents, employment related claims, dram shop statutes related to our service of alcohol, and claims from guests or employees alleging illness, injury or food quality, health, or operational concerns. None o …

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"(15) Employee Benefit Plans We have a defined contribution benefit plan (""401(k) Plan"") that is available to our Support Center employees and managers in our restaurants who meet certain compensation and eligibility requirements. The 401(k) Plan allows participating employees to defer the receipt of a portion of their compensation and contribute such amount to one or more investment options and the Company matches a certain percentage of the employee contributions. The following table summarizes the company contributions for the 401(k) Plan recorded in the accompanying consolidated statements of income: Fiscal Year Ended December 30, December 31, December 26, 2025 2024 2023 Labor expense $ 8,902 $ 8,364 $ 7,080 General and administrative expense 2,255 2,114 1,805 Total company contributions $ 11,157 $ 10,478 $ 8,885 We also have a deferred compensation plan which allows highly compensated employees to defer a portion of their compensation and contribute such amounts to one or more investment funds held in a rabbi trust and the Company matches a certain percentage of the employee contributions. The following table summarizes the company contributions for the deferred compensation plan recorded in the accompanying consolidated statements of income: Fiscal Year Ended December 30, December 31, December 26, 2025 2024 2023 Labor expense $ 2,371 $ 1,630 $ 1,625 General and administrative expense 1,752 1,469 1,493 Total company contributions $ 4,123 $ 3,099 $ 3,118 Refer to Note 1 …

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"(5) Long-term Debt On April 24, 2025, we entered into an agreement for a revolving credit facility (the ""credit facility"") with a syndicate of commercial lenders led by JPMorgan Chase Bank, N.A. and PNC Bank, N.A. This credit facility superseded and replaced our previous credit facility. The credit facility is an unsecured, revolving credit agreement and has a borrowing capacity of up to $450.0 million with the option to increase the capacity by an additional $250.0 million, subject to certain limitations, including approval by the syndicate of lenders. The credit facility has a maturity date of April 24, 2030. We are required to pay interest on outstanding borrowings at the Term Secured Overnight Financing Rate (""SOFR""), plus a fixed adjustment of 0.10% and a variable adjustment of 1.00% to 1.75% depending on our consolidated net leverage ratio. As of December 30, 2025, we had no outstanding borrowings under the credit facility and had $447.6 million of availability, net of $2.4 million of outstanding letters of credit. As of December 31, 2024, we had no outstanding borrowings under the previous credit facility and had $296.8 million of availability, net of $3.2 million of outstanding letters of credit. The interest rate for each credit facility as of December 30, 2025 and December 31, 2024 was 4.81% and 5.47% , respectively. The lenders obligation to extend credit pursuant to the credit facility depends on us maintaining certain financial covenants, including a minimum …

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Fiscal Year Ended December 30, 2025 December 31, 2024 December 26, 2023 Restaurant and other sales $ 5,847,234 $ 5,341,853 $ 4,604,554 Royalties 28,183 28,342 24,169 Franchise fees 2,658 3,137 2,949 Total revenue $ 5,878,075 $ 5,373,332 $ 4,631,672 …

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"(14) Share-based Compensation On May 13, 2021, our shareholders approved the Texas Roadhouse, Inc. 2021 Long-Term Incentive Plan (the ""Plan""). The Plan provides for the granting of various forms of equity awards including options, stock appreciation rights, full value awards, and performance-based awards. The Company provides restricted stock units (""RSUs"") to employees as a form of share-based compensation. A RSU is the conditional right to receive one share of common stock upon satisfaction of the vesting requirement. In addition to RSUs, the Company provides performance stock units (""PSUs"") to certain members of management as a form of share-based compensation. A PSU is the conditional right to receive one share of common stock upon meeting a performance obligation along with the satisfaction of the vesting requirement. The following table summarizes share-based compensation expense recorded in the accompanying consolidated statements of income: Fiscal Year Ended December 30, December 31, December 26, 2025 2024 2023 Labor expense $ 17,132 $ 16,277 $ 11,470 General and administrative expense 30,633 30,778 22,760 Total share-based compensation expense $ 47,765 $ 47,055 $ 34,230 We recognize expense for RSUs and PSUs over the vesting term based on the grant date fair value of the award. We record forfeitures as they occur. Activity for our share- based compensation by type of grant for the fiscal year ended December 30, 2025 is presented below. Summary Details for RSUs …

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(16) Fair Value Measurement At December 30, 2025 and December 31, 2024, the fair values of cash and cash equivalents, accounts receivable, and accounts payable approximated their carrying values based on the short-term nature of these instruments. There were no transfers among levels within the fair value hierarchy during the year ended December 30, 2025. The following table presents the fair values for our financial assets and liabilities measured on a recurring basis: Fair Value Measurements Level December 30, 2025 December 31, 2024 Deferred compensation planassets 1 $ 134,347 $ 101,071 Deferred compensation planliabilities 1 $ (134,158) $ (101,071) Debt securities 2 $ 4,188 $ - We report the accounts of the deferred compensation plan in other assets and the corresponding liability in other liabilities in our consolidated balance sheets. These investments are considered trading securities and are reported at fair value based on quoted market prices. The realized and unrealized holding gains and losses related to these investments, as well as the offsetting compensation expense, are recorded in general and administrative expense in the consolidated statements of income. Debt security investments are held by our wholly-owned captive insurance company as collateral for certain insurance coverages. These investments, which are classified as available for sale, are primarily comprised of corporate bonds and are recorded in other long-term assets on the balance sheet. The fair va …

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(7) Goodwill and Intangible Assets All of our goodwill and intangible assets reside within the Texas Roadhouse reportable segment. A summary of changes to goodwill were as follows: Fiscal Year Ended December 30, 2025 December 31, 2024 Beginning balance $ 169,684 $ 169,684 Additions 72,536 Ending balance $ 242,220 $ 169,684 Intangible assets, net consists of reacquired franchise rights. The following table presents the balance of intangible assets: Fiscal Year Ended December 30, 2025 December 31, 2024 Gross carrying value $ 47,353 $ 24,412 Accumulated amortization (29,611) (23,147) Net carrying value $ 17,742 $ 1,265 We amortize reacquired franchise rights on a straight-line basis over the remaining term of the related franchise agreement. The following table presents the aggregate expense related to the amortization of the Company's intangible assets for the years ended December 30, 2025, December 31, 2024, and December 26, 2023 Fiscal Year Ended December 30, 2025 December 31, 2024 December 26, 2023 Amortization expense $ 6,463 $ 2,218 $ 3,024 The following table presents the expected annual amortization expense for the Company's intangible assets for the next five years and thereafter: 2026 $ 4,931 2027 3,823 2028 2,720 2029 2,054 2030 1,364 Thereafter 2,850 $ 17,742 …

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(9) Income Taxes All income before taxes is generated by domestic entities. Components of our income tax expense (benefit) for the years ended December 30, 2025, December 31, 2024, and December 26, 2023 were as follows: Fiscal Year Ended December 30, 2025 December 31, 2024 December 26, 2023 Current: Federal $ 32,027 $ 63,816 $ 21,694 State 26,205 28,992 19,105 Foreign 1,164 1,140 735 Total current 59,396 93,948 41,534 Deferred: Federal 8,046 (11,096) 4,518 State (1,021) (2,707) (1,403) Total deferred 7,025 (13,803) 3,115 Total Income tax expense: Federal 40,073 52,720 26,212 State 25,184 26,285 17,702 Foreign 1,164 1,140 735 Income tax expense $ 66,421 $ 80,145 $ 44,649 A reconciliation of the statutory federal income tax rate to our effective tax rate for the years ended December 30, 2025, December 31, 2024, and December 26, 2023 is as follows: Fiscal Year Ended December 30, 2025 December 31, 2024 December 26, 2023 Amount Percent Amount Percent Amount Percent Tax at statutory federal rate $ 100,959 21.0 % $ 110,143 21.0 % $ 75,248 21.0 % Domestic federal: Tax credits: FICA tip tax credit (49,672) (10.3) (45,425) (8.7) (39,714) (11.1) Work opportunity tax credit (3,999) (0.8) (2,867) (0.5) (3,697) (1.0) Nontaxable and nondeductible items 877 0.1 (1,492) (0.3) (661) (0.2) State and local tax, net of federal benefit (1) 17,091 3.6 18,646 3.6 12,738 3.6 Foreign 1,165 0.2 1,140 0.2 735 0.2 Total $ 66,421 13.8 % $ 80,145 15.3 % $ 44,649 12.5 % (1) For the year ended December 30, 2 …

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(8) Leases We recognize right-of-use assets and lease liabilities for both real estate and equipment leases that have a term in excess of one year. As of December 30, 2025 and December 31, 2024, these amounts were as follows: December 30, 2025 Real estate Equipment Total Operating lease right-of-use assets $ 873,287 $ 6,234 $ 879,521 Current portion of operating lease liabilities 29,084 1,869 30,953 Operating lease liabilities, net of current portion 939,711 3,359 943,070 Total operating lease liabilities $ 968,795 $ 5,228 $ 974,023 December 31, 2024 Real estate Equipment Total Operating lease right-of-use assets $ 764,135 $ 5,730 $ 769,865 Current portion of operating lease liabilities 26,501 1,671 28,172 Operating lease liabilities, net of current portion 823,240 3,060 826,300 Total operating lease liabilities $ 849,741 $ 4,731 $ 854,472 Information related to our real estate operating leases for the fiscal years ended December 30, 2025, December 31, 2024, and December 26, 2023 were as follows: Fiscal Year Ended Real estate costs December 30, 2025 December 31, 2024 December 26, 2023 Operating lease $ 93,564 $ 82,739 $ 75,068 Variable lease 8,291 7,007 5,079 Total lease costs $ 101,855 $ 89,746 $ 80,147 Real estate lease liabilities maturity analysis December 30, 2025 2026 $ 90,829 2027 92,919 2028 94,367 2029 95,616 2030 96,749 Thereafter 1,241,520 Total 1,712,000 Less interest 743,205 Total discounted operating lease liabilities $ 968,795 Fiscal Year Ended Real estate leas …

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In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures . This ASU primarily provides enhanced disclosures about an entitys income tax including consistent categories and greater disaggregation of the information included in the rate reconciliation and income taxes paid disaggregated by jurisdiction. The amendments in this update are effective for fiscal years beginning after December 15, 2024, and interim periods within fiscal years beginning after December 15, 2025. We adopted this guidance retrospectively for all reporting periods presented as of December 30, 2025, and provided additional details and disclosures in our income taxes disclosure. Refer to Note 9 for further discussion of income taxes. Recently Issued Accounting Pronouncements In November 2024, the FASB issued ASU 2024-03, Income Statement Reporting Comprehensive Income (Subtopic 220-40): Disaggregation of Income Statement Expenses. This ASU primarily provides enhanced disclosures about the components of expenses within the income statement including purchases of inventory, employee compensation, depreciation, and intangible asset amortization. The amendments in this update are effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, and may be applied either prospectively or retrospectively for all prior periods presented. We are currently assessing the impact of this new sta …

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(18) Related Party Transactions As of December 30, 2025, December 31, 2024 and December 26, 2023, we had five franchise restaurants and one majority-owned company restaurant owned in part by current officers of the Company. We recognized revenue of $2.5 million, $2.5 million, and $2.3 million for the years ended December 30, 2025, December 31, 2024, and December 26, 2023, respectively, related to the five franchise restaurants.

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(3) Revenue The following table disaggregates our revenue by major source: Fiscal Year Ended December 30, 2025 December 31, 2024 December 26, 2023 Restaurant and other sales $ 5,847,234 $ 5,341,853 $ 4,604,554 Royalties 28,183 28,342 24,169 Franchise fees 2,658 3,137 2,949 Total revenue $ 5,878,075 $ 5,373,332 $ 4,631,672 The following table presents a rollforward of deferred revenue-gift cards: Fiscal Year Ended December 30, 2025 December 31, 2024 Beginning balance $ 401,198 $ 373,913 Gift card activations, net of third-party fees 514,276 479,244 Gift card redemptions and breakage (466,730) (451,959) Ending balance $ 448,744 $ 401,198 We recognized restaurant sales of $253.2 million for the year ended December 30, 2025 related to amounts in deferred revenue as of December 31, 2024. We recognized restaurant sales of $234.0 million for the year ended December 31, 2024 related to amounts in deferred revenue as of December 26, 2023. …

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(19) Segment Information The Chief Executive Officer is our CODM. The CODM assesses the performance of the business and allocates resources at the concept level and as a result we have identified Texas Roadhouse, Bubba's 33, and Jaggers as separate operating segments. In addition, we have identified our retail initiatives as a separate operating segment. Finally, we have identified Texas Roadhouse and Bubba's 33 as reportable segments. The Texas Roadhouse reportable segment includes the results of our company and franchise Texas Roadhouse restaurants. The Bubba's 33 reportable segment includes the results of our company Bubba's 33 restaurants. Our remaining operating segments, which include the results of our company and franchise Jaggers restaurants and the results of our retail initiatives, are included in Other. In addition, corporate-related assets, depreciation and amortization, and capital expenditures are also included in Other. The CODM uses restaurant margin as the primary financial measure for assessing the performance of our segments. Restaurant margin represents restaurant and other sales less restaurant-level operating costs, including food and beverage costs, labor, rent, and other operating costs. Restaurant margin is also used by our CODM to evaluate core restaurant-level operating efficiency and performance, assist in the evaluation of operating trends over time, and in making capital allocation decisions. Capital allocation decisions include approving new st …

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(20) Subsequent Events On December 31, 2025, subsequent to the end of our 2025 fiscal year, we completed the acquisitions of five domestic franchise restaurants of which a current officer of the Company had a 2% ownership interest in two of these restaurants. Pursuant to the terms of the acquisition agreements, we paid an aggregate purchase price of approximately $72 million. We borrowed $50.0 million available under our credit facility to partially fund the acquisition. We expect to complete the preliminary purchase price allocations relating to these transactions in the first quarter of fiscal year 2026. …

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