What changed in this filing

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Item 1. Financial Statements

2025-04-29 compared with 2025-01-29 · 100 added, 85 removed, 445 unchanged (29% of the section changed)

3 unchanged sentences

(In millions, except per share amounts)

Thirteen Week Periods Ended Twenty-Six Week Periods Ended

2024 December 27,

2023 December 25,

2024 December 27,

Thirteen Week Periods Ended Thirty-Nine Week Periods Ended

2025 March 27,

2024 March 26,

2025 March 27,

Company sales $ 1,413.0 $ 1,108.9 $ 3,886.4 $ 3,174.6

66 unchanged sentences

$ 0.10 par value;

60.3 million shares issued and 44.4 million shares outstanding at December 25, 2024 and 60.3 million shares issued and 45.0 million shares outstanding at June 26, 2024)

60.3 million shares issued and 44.4 million shares outstanding at March 26, 2025 and 60.3 million shares issued and 45.0 million shares outstanding at June 26, 2024)

Additional paid-in capital 711.6 707.8

Accumulated other comprehensive loss ( 6.6 ) ( 6.3 )

Accumulated deficit ( 39.6 ) ( 196.6 )

Treasury stock, at cost ( 15.9 million shares at December 25, 2024, and 15.3 million shares at June 26, 2024)

Retained earnings (Accumulated deficit) 79.5 ( 196.6 )

Treasury stock, at cost ( 15.9 million shares at March 26, 2025, and 15.3 million shares at June 26, 2024)

( 531.5 ) ( 471.5 )

5 unchanged sentences

(In millions)

Twenty-Six Week Periods Ended

2024 December 27,

Thirty-Nine Week Periods Ended

2025 March 27,

Cash flows from operating activities

34 unchanged sentences

Payments for debt issuance costs ( 0.1 ) ( 0.7 )

Payments of dividends — ( 0.2 )

Net cash used in financing activities ( 354.7 ) ( 142.0 )

10 unchanged sentences

(In millions)

Twenty-Six Week Period Ended December 25, 2024

Thirty-Nine Week Period Ended March 26, 2025

Common Stock Additional

Capital Accumulated Deficit Treasury

Capital Retained Earnings (Accumulated Deficit) Treasury

Stock Accumulated

13 unchanged sentences

Balances at December 25, 2024 $ 6.0 $ 704.5 $ ( 39.6 ) $ ( 532.7 ) $ ( 6.7 ) $ 131.5

Twenty-Six Week Period Ended December 27, 2023

Net income — — 119.1 — — 119.1

Other comprehensive income — — — — 0.1 0.1

Stock-based compensation — 8.8 — — — 8.8

Purchases of treasury stock — ( 0.8 ) — ( 0.3 ) — ( 1.1 )

Issuances of treasury stock — ( 0.9 ) — 1.5 — 0.6

Balances at March 26, 2025 $ 6.0 $ 711.6 $ 79.5 $ ( 531.5 ) $ ( 6.6 ) $ 259.0

See accompanying Notes to Consolidated Financial Statements (Unaudited)

Thirty-Nine Week Period Ended March 27, 2024

Common Stock Additional

15 unchanged sentences

Balances at December 27, 2023 $ 6.0 $ 687.0 $ ( 302.6 ) $ ( 493.9 ) $ ( 6.0 ) $ ( 109.5 )

Net income — — 48.7 — — 48.7

Other comprehensive loss — — — — ( 0.2 ) ( 0.2 )

Stock-based compensation — 6.4 — — — 6.4

Purchases of treasury stock — ( 0.2 ) — ( 0.3 ) — ( 0.5 )

Issuances of treasury stock — 0.2 — 8.2 — 8.4

Balances at March 27, 2024 $ 6.0 $ 693.4 $ ( 253.9 ) $ ( 486.0 ) $ ( 6.2 ) $ ( 46.7 )

See accompanying Notes to Consolidated Financial Statements (Unaudited)

18 unchanged sentences

and its subsidiaries and any predecessor companies of Brinker International, Inc.

Our Consolidated Financial Statements (Unaudited) as of December 25, 2024 and June 26, 2024, and for the thirteen and twenty-six week periods ended December 25, 2024 and December 27, 2023, have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”).

Our Consolidated Financial Statements (Unaudited) as of March 26, 2025 and June 26, 2024, and for the thirteen and thirty-nine week periods ended March 26, 2025 and March 27, 2024, have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”).

We own, develop, operate and franchise the Chili’s ® Grill & Bar (“Chili’s”) and Maggiano’s Little Italy ® (“Maggiano’s”) restaurant brands.

As of December 25, 2024, we owned, operated or franchised 1,624 restaurants, consisting of 1,164 Company-owned restaurants and 460 franchised restaurants, located in the United States, 27 other countries and two United States territories.

As of March 26, 2025, we owned, operated or franchised 1,626 restaurants, consisting of 1,163 Company-owned restaurants and 463 franchised restaurants, located in the United States, 28 other countries and two United States territories.

Use of Estimates

9 unchanged sentences

The Foreign currency translation adjustment represents the unrealized impact of translating the financial statements of our Canadian restaurants from their respective functional currency (Canadian dollars) to United States dollars and are reported as a component of Comprehensive income and recorded in Accumulated other comprehensive loss on our Consolidated Balance Sheets (Unaudited).

Recently Issued Accounting Standards or Disclosure Rules

Recently Issued Accounting Standards

In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-07, Segment Reporting (Topic 280):

10 unchanged sentences

Footnote Index

In March 2024, the SEC adopted the final rule under SEC Release No.

33-11275, The Enhancement and Standardization of Climate-Related Disclosures for Investors.

This rule will require registrants to disclose certain climate-related information in registration statements and annual reports.

In April 2024, the SEC voluntarily stayed the final rule as a result of pending legal challenges.

The disclosure requirements will apply to our fiscal year beginning June 26, 2025 (fiscal 2026 Form 10-K), pending resolution of the stay.

Management is currently evaluating the final rule to determine its impact on our disclosures.

In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40):

13 unchanged sentences

Deferred franchise and development fees are classified within Other accrued liabilities for the current portion expected to be recognized within the next 12 months, and Other liabilities for the long-term portion in the Consolidated Balance Sheets (Unaudited).

The following table reflects the changes in deferred franchise and development fees between June 26, 2024 and December 25, 2024:

The following table reflects the changes in deferred franchise and development fees between June 26, 2024 and March 26, 2025:

Deferred Franchise and Development Fees

2 unchanged sentences

Amount recognized to Franchise revenues ( 1.1 )

Balance as of December 25, 2024 $ 9.8

Footnote Index

The following table illustrates franchise and development fees expected to be recognized in the future related to performance obligations that were unsatisfied or partially unsatisfied as of December 25, 2024:

Balance as of March 26, 2025 $ 9.7

Fiscal Year Franchise and Development Fees Revenue Recognition

1 unchanged sentence

Thereafter 6.6

Footnote Index

Deferred Gift Card Revenues

Total deferred revenues related to our gift cards include the full value of unredeemed gift card balances less recognized breakage and the unamortized portion of third party fees.

The following table reflects the changes in the Gift card liability between June 26, 2024 and December 25, 2024:

The following table reflects the changes in the Gift card liability between June 26, 2024 and March 26, 2025:

Gift Card Liability

4 unchanged sentences

Other ( 0.2 )

Balance as of December 25, 2024

Balance as of March 26, 2025

FAIR VALUE MEASUREMENTS

9 unchanged sentences

The fair values of our notes are based on quoted market prices and are considered Level 2 fair value measurements.

Footnote Index

The carrying amounts of the notes, which are net of unamortized debt issuance costs and discounts, and fair values are as follows:

December 25, 2024 June 26, 2024

March 26, 2025 June 26, 2024

Carrying Amount Fair Value Carrying Amount Fair Value

7 unchanged sentences

We review the carrying amounts of non-financial assets, primarily long-lived property and equipment, finance lease assets, operating lease assets, reacquired franchise rights, goodwill and transferable liquor licenses annually or when events or circumstances indicate that the fair value may not substantially exceed the carrying amount.

We record an impairment charge for the excess of the carrying amount over the fair value.

Footnote Index

impairment charge for the excess of the carrying amount over the fair value.

Any impairment charges are included in Other (gains) and charges in the Consolidated Statements of Comprehensive Income (Unaudited).

During the thirteen and twenty-six week periods ended December 25, 2024 and December 27, 2023, no indicators of impairment were identified.

During the thirteen and thirty-nine week periods ended March 26, 2025 and March 27, 2024, no indicators of impairment were identified.

Intangibles, net in the Consolidated Balance Sheets (Unaudited) includes both indefinite-lived intangible assets such as transferable liquor licenses and definite-lived intangible assets such as reacquired franchise rights.

Accumulated amortization associated with definite-lived intangible assets at December 25, 2024 and June 26, 2024, was $ 17.7 million and $ 16.6 million, respectively.

Accumulated amortization associated with definite-lived intangible assets at March 26, 2025 and June 26, 2024, was $ 18.3 million and $ 16.6 million, respectively.

ACCRUED LIABILITIES

2 unchanged sentences

Insurance $ 34.3 $ 31.4

Property tax 27.5 24.6

Sales tax 26.8 18.4

Current installments of finance lease obligations 24.0 14.1

Interest 13.3 18.1

Property tax 20.5 24.6

Utilities and services 10.6 10.0

Interest 6.8 18.1

Other 27.5 28.1

2 unchanged sentences

In addition to our restaurant facilities, we also lease our corporate headquarters location and certain equipment.

Footnote Index

The components of lease expenses included in the Consolidated Statements of Comprehensive Income (Unaudited) were as follows:

Thirteen Week Periods Ended Twenty-Six Week Periods Ended

2024 December 27,

2023 December 25,

2024 December 27,

Thirteen Week Periods Ended Thirty-Nine Week Periods Ended

2025 March 27,

2024 March 26,

2025 March 27,

Operating lease cost $ 45.8 $ 45.7 $ 137.2 $ 136.9

6 unchanged sentences

Supplemental cash flow information related to leases:

Twenty-Six Week Periods Ended

2024 December 27,

Thirty-Nine Week Periods Ended

2025 March 27,

Operating lease assets obtained in exchange for operating lease liabilities

1 unchanged sentence

Finance lease assets obtained in exchange for finance lease liabilities

Finance lease assets are recorded in Property and equipment, at cost, and the net balance as of December 25, 2024 and June 26, 2024 was $ 97.7 million and $ 93.4 million, respectively.

Finance lease assets are recorded in Property and equipment, at cost, and the net balance as of March 26, 2025 and June 26, 2024 was $ 91.5 million and $ 93.4 million, respectively.

Footnote Index

Long-term debt consists of the following:

14 unchanged sentences

Revolving Credit Facility

In the twenty-six week period ended December 25, 2024, net borrowings of $ 215.0 million were drawn on our revolving credit facility.

As of December 25, 2024, $ 685.0 million of credit was available under the revolving credit facility.

Footnote Index

In the thirty-nine week period ended March 26, 2025, net borrowings of $ 90.0 million were drawn on our revolving credit facility.

As of March 26, 2025, $ 810.0 million of credit was available under the revolving credit facility.

The $ 900.0 million revolving credit facility matures on August 18, 2026 and bears interest at a rate of SOFR plus an applicable margin of 1.60 % to 2.35 % and an undrawn commitment fee of 0.25 % to 0.35 %, both based on a function of our debt-to-cash-flow ratio.

As of December 25, 2024, our interest rate was 5.94 % consisting of SOFR of 4.34 % plus the applicable margin and spread adjustment of 1.60 %.

As of March 26, 2025, our interest rate was 5.93 % consisting of SOFR of 4.33 % plus the applicable margin and spread adjustment of 1.60 %.

Financial Covenants

2 unchanged sentences

Our debt agreements contain various financial covenants that, among other things, require the maintenance of certain leverage ratios.

As of December 25, 2024, we were in compliance with our covenants pursuant to the $900.0 million revolving credit facility and under the terms of the indentures governing our 8.250% notes .

As of March 26, 2025, we were in compliance with our covenants pursuant to the $900.0 million revolving credit facility and under the terms of the indentures governing our 8.250% notes .

COMMITMENTS AND CONTINGENCIES

1 unchanged sentence

We have, in certain cases, divested brands or sold restaurants to franchisees and have not been released from lease guarantees for the related restaurants.

As of December 25, 2024 and June 26, 2024, we have outstanding lease guarantees or are secondarily liable for an estimated $ 14.2 million and $ 15.7 million, respectively.

As of March 26, 2025 and June 26, 2024, we have outstanding lease guarantees or are secondarily liable for an estimated $ 13.0 million and $ 15.7 million, respectively.

These amounts represent the maximum known potential liability of rent payments under the leases, but outstanding rent payments can exist outside of our knowledge as a result of the landlord and tenant relationship being between two third parties.

These leases have been assigned to the buyers and expire at the end of the respective lease terms, which range from fiscal 2025 through fiscal 2035.

In the event of default under a lease by an owner of a divested brand, the indemnity and default clauses in our agreements with such third parties and applicable laws govern our ability to pursue and recover amounts we may pay on behalf of such parties.

In the event of default under a lease by an owner of a divested brand,

Footnote Index

the indemnity and default clauses in our agreements with such third parties and applicable laws govern our ability to pursue and recover amounts we may pay on behalf of such parties.

We have received notices of default and have been named a party in lawsuits pertaining to some of these leases in circumstances where the current lessee did not pay its rent obligations and management is closely monitoring any exposure.

In the thirty-nine week period ended March 26, 2025 we recorded a $ 1.5 million charge in Other (gains) and charges in the Consolidated Statements of Comprehensive Income (Unaudited) for lease contingencies.

Letters of Credit

We provide letters of credit to various insurers to collateralize obligations for outstanding claims.

As of December 25, 2024, we had $ 5.8 million in undrawn standby letters of credit outstanding.

As of March 26, 2025, we had $ 5.8 million in undrawn standby letters of credit outstanding.

All standby letters of credit are renewable within the next 7 months.

4 unchanged sentences

In the Litigation, plaintiffs assert various claims at the Company’s Chili’s restaurants involving customer payment card information and seek monetary damages in excess of $ 5.0 million, injunctive and declaratory relief, and attorney’s fees and costs.

On April 29, 2024, the US Supreme Court denied our petition for certiorari concerning review of the Eleventh Circuit’s decision to uphold plaintiff’s damages calculation.

Accordingly, the parties continue to await the trial court’s ruling on the issue of predominance as it relates to class certification in light of the Eleventh Circuit’s ruling on this issue.

On April 17, 2025, the district court heard oral argument on the issue of class certification.

Upon conclusion of the hearing, the court indicated it would take the matter under advisement.

The parties await the court’s ruling.

We believe we have defenses and intend to continue defending the Litigation.

As such, as of December 25, 2024, we have concluded that a loss, or range of loss, from this matter is not determinable, therefore, we have not recorded a liability related to the Litigation.

As such, as of March 26, 2025, we have concluded that a loss, or range of loss, from this matter is not determinable, therefore, we have not recorded a liability related to the Litigation.

We will continue to evaluate this matter based on new information as it becomes available.

Footnote Index

Legal Proceedings

4 unchanged sentences

Based upon consultation with legal counsel, management is of the opinion that there are no matters pending or threatened which are expected to have a material adverse effect, individually or in the aggregate, on the consolidated financial condition or results of operations.

Twenty-Six Week Periods Ended

2024 December 27,

Thirty-Nine Week Periods Ended

2025 March 27,

Effective income tax rate 15.8 % 8.3 %

The federal statutory tax rate was 21.0 % for the twenty-six week periods ended December 25, 2024 and December 27, 2023.

The change in the effective income tax rate in the twenty-six week period ended December 25, 2024 to the twenty-six week period ended December 27, 2023 is primarily due to higher Income before income taxes and the resulting deleverage of the FICA tip tax credit.

The federal statutory tax rate was 21.0 % for the thirty-nine week periods ended March 26, 2025 and March 27, 2024.

The change in the effective income tax rate in the thirty-nine week period ended March 26, 2025 to the thirty-nine week period ended March 27, 2024 is primarily due to higher Income before income taxes and the resulting deleverage of the FICA tip tax credit.

Footnote Index

SHAREHOLDERS’ EQUITY

4 unchanged sentences

Repurchased shares are reflected as an increase in Treasury stock within Shareholder’s equity in the Consolidated Balance Sheets (Unaudited).

In the twenty-six week period ended December 25, 2024, we repurchased 1.2 million shares of our common stock for $ 85.2 million, including 1.0 million shares purchased for $ 76.0 million as part of our share repurchase program and 0.2 million shares purchased from team members to satisfy tax withholding obligations on the vesting of restricted shares.

In the thirty-nine week period ended March 26, 2025, we repurchased 1.2 million shares of our common stock for $ 86.3 million, including 1.0 million shares purchased for $ 76.0 million as part of our share repurchase program and 0.2 million shares purchased from team members to satisfy tax withholding obligations on the vesting of restricted shares.

These withheld shares of common stock are not considered common stock repurchases under our authorized common stock repurchase plan.

As of December 25, 2024, approximately $ 107.0 million of share repurchase authorization remains under the current share repurchase program.

As of March 26, 2025, approximately $ 107.0 million of share repurchase authorization remains under the current share repurchase program.

Stock-based Compensation

3 unchanged sentences

Our 1999 Stock Option and Incentive Plan for Non-Employee Directors and Consultants (the “1999 Plan”) remains in effect.

In November 2024, the Board of Directors approved the 2025 Executive Performance Share Retention Plan and the granting of performance-based restricted share awards to Kevin Hochman, our CEO and President of the Company and President of Chili’s Grill & Bar, and certain other executives of the Company at a total grant date fair value of

Footnote Index

$ 25.0 million.

Shares earned range from 0% to 200% of the target number of performance shares granted based on the Company’s total shareholder return (“TSR”) over a five -year period from September 26, 2024 through September 25, 2029, relative to the TSR of a peer group of companies as defined.

3 unchanged sentences

The following table presents restricted share awards granted under the Company’s various equity compensation plans and the related weighted average fair value per share amounts.

Twenty-Six Week Periods Ended

2024 December 27,

Thirty-Nine Week Periods Ended

2025 March 27,

Restricted share awards

4 unchanged sentences

Diluted net income per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock.

For the calculation of Diluted net income per share, the Basic weighted average shares outstanding is increased by the dilutive effect of stock options and restricted share awards.

For the calculation of Diluted net income per share, the Basic weighted average shares outstanding is increased by the dilutive effect of

Footnote Index

stock options and restricted share awards.

Stock options and restricted share awards with an anti-dilutive effect are not included in the Diluted net income per share calculation.

Basic weighted average shares outstanding are reconciled to Diluted weighted average shares outstanding as follows:

Thirteen Week Periods Ended Twenty-Six Week Periods Ended

2024 December 27,

2023 December 25,

2024 December 27,

Thirteen Week Periods Ended Thirty-Nine Week Periods Ended

2025 March 27,

2024 March 26,

2025 March 27,

Basic weighted average shares outstanding 44.4 44.3 44.6 44.4

1 unchanged sentence

Dilutive restricted shares 1.9 0.8 1.7 0.7

1.0 0.7 0.9 0.7

Total dilutive impact 2.0 0.9 1.8 0.8

1 unchanged sentence

Awards excluded due to anti-dilutive effect — 0.1 — 0.6

Footnote Index

OTHER GAINS AND CHARGES

Other (gains) and charges in the Consolidated Statements of Comprehensive Income (Unaudited) consist of the following:

Thirteen Week Periods Ended Twenty-Six Week Periods Ended

2024 December 27,

2023 December 25,

2024 December 27,

Thirteen Week Periods Ended Thirty-Nine Week Periods Ended

2025 March 27,

2024 March 26,

2025 March 27,

Litigation & claims, net $ 2.5 $ 2.0 $ 11.1 $ 5.2

Enterprise system implementation costs 2.4 3.3 12.0 7.4

Severance and other benefit charges 2.0 0.4 2.3 0.5

Lease contingencies 1.5 0.3 1.5 0.8

Restaurant closure asset write-offs and charges 0.8 4.0 2.3 4.8

5 unchanged sentences

• Enterprise system implementation costs primarily consists of software subscription fees and certain other costs prior to implementation and support of our new cloud-based Enterprise Resource Planning (“ERP”) system after implementation.

• Severance and other benefit charges relates to changes in our management team and organizational structure.

• Lease contingencies includes expenses related to certain lease guarantees and sublease receivables for divested brands when we have determined it is probable that the current lessee will default on the lease obligation.

Refer to Note 7 - Contingencies for additional information about our secondarily liable lease guarantees.

• Restaurant closure asset write-offs and charges includes costs associated with the closure of certain Chili’s restaurants.

• Loss from natural disasters, net (of insurance recoveries) in the current quarter consists of costs incurred related to Hurricane Helene and Hurricane Milton.

• Loss from natural disasters, net (of insurance recoveries) in the current year consists of costs incurred related to Hurricane Helene and Hurricane Milton.

• Lease modification gain, net relates to the reduction of lease liabilities of certain closed Chili’s restaurants.

Footnote Index

SEGMENT INFORMATION

5 unchanged sentences

The Corporate segment includes costs related to the common and shared infrastructure, including accounting, information technology, purchasing, guest relations, legal and restaurant development.

Company sales for each segment include revenues generated by the operation of Company-owned restaurants including food and beverage sales, net of discounts, Maggiano’s banquet service charge income, delivery service fee income, gift card breakage, digital entertainment revenues, merchandise income and are net of gift card discounts from third-party gift card sales.

Company sales for each segment include revenues generated by the operation of Company-owned restaurants including food and beverage sales, net of discounts, Maggiano’s banquet service charge income, gift card breakage, delivery service fee income, digital entertainment revenues, merchandise income, and are net of gift card discounts from third-party gift card sales.

Franchise revenues for each operating segment include royalties, franchise advertising fees, franchise and development fees, and gift card equalization.

1 unchanged sentence

There were no material transactions amongst our operating segments.

Footnote Index

Our chief operating decision maker uses Operating income as the measure for assessing performance of our segments.

Operating income includes revenues and expenses directly attributable to segment-level results of operations.

Restaurant expenses during the periods presented primarily include restaurant rent, repairs and maintenance, supplies, advertising, utilities, delivery fees, payment processing fees, to-go supplies, and workers’ compensation and general liability insurance.

Restaurant expenses during the periods presented primarily include restaurant rent, repairs and maintenance, advertising, supplies, delivery fees, utilities, payment processing fees, and workers’ compensation and general liability insurance.

The following tables reconcile our segment results to our consolidated results reported in accordance with GAAP:

Thirteen Week Period Ended December 25, 2024

Thirteen Week Period Ended March 26, 2025

Chili's Maggiano's Corporate Consolidated

13 unchanged sentences

Income (loss) before income taxes $ 196.4 $ 10.6 $ ( 63.2 ) $ 143.8

Thirteen Week Period Ended December 27, 2023

Footnote Index

Thirteen Week Period Ended March 27, 2024

Chili's Maggiano's Corporate Consolidated

13 unchanged sentences

Income (loss) before income taxes $ 96.4 $ 12.2 $ ( 54.7 ) $ 53.9

Footnote Index

Twenty-Six Week Period Ended December 25, 2024

Thirty-Nine Week Period Ended March 26, 2025

Chili’s Maggiano's Corporate Consolidated

13 unchanged sentences

Income (loss) before income taxes $ 462.6 $ 46.5 $ ( 181.3 ) $ 327.8

Twenty-Six Week Period Ended December 27, 2023

Footnote Index

Thirty-Nine Week Period Ended March 27, 2024

Maggiano's Corporate Consolidated

16 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements