Catherine (on for Sarah)'s questions to Texas Roadhouse Inc (TXRH) leadership • Q3 2024
Question
Catherine, on behalf of Sarah, inquired about the drivers of labor leverage in the quarter, asking how long insurance-related adjustments would remain a headwind. She also questioned the 2025 commodity inflation guidance, which seems low despite concerns about beef herd sizes.
Answer
Executive Michael Bailen clarified that insurance claim adjustments are unpredictable but are separate from the underlying labor productivity improvements, which he expects to continue. CFO David Monroe added that labor hour growth relative to traffic was below 30% in Q3, a positive trend. Regarding commodities, CEO Gerald Morgan stated the 2025 guidance is based on a combination of locked prices and assumptions, with beef remaining the primary driver of inflation.