What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-04-29 compared with 2025-01-29 · 122 added, 119 removed, 292 unchanged (45% of the section changed)

1 unchanged sentence

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is intended to help you understand our Company, our operations and our current operating environment.

For an understanding of the significant factors that influenced our performance during the thirteen and twenty-six week periods ended December 25, 2024 and December 27, 2023, the MD&A should be read in conjunction with the Consolidated Financial Statements (Unaudited) and related Notes to Consolidated Financial Statements (Unaudited) included in this quarterly report.

For an understanding of the significant factors that influenced our performance during the thirteen and thirty-nine week periods ended March 26, 2025 and March 27, 2024, the MD&A should be read in conjunction with the Consolidated Financial Statements (Unaudited) and related Notes to Consolidated Financial Statements (Unaudited) included in this quarterly report.

All amounts within the MD&A are presented in millions unless otherwise specified.

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.

Our restaurant brands, Chili’s and Maggiano’s, are both operating segments and reporting units.

19 unchanged sentences

Our To-Go menu is available through the Chili’s mobile app, chilis.com, our delivery partners DoorDash, Uber Eats and Grubhub, Google Food Ordering or by calling the restaurant directly.

Our It’s Just Wings® offering is available through the website, itsjustwings.com.

The operating results for this virtual brand are included in the results of our Chili’s brand, based on the restaurants that prepared and processed the food orders.

The operating results for our virtual brand, It’s Just Wings®, are included in the results of our Chili’s brand, based on the restaurants that prepared and processed the food orders.

In dining rooms, we use tabletop devices with functionality for guests to pay at the table, provide guest feedback and interact with our My Chili’s Rewards ® program.

2 unchanged sentences

Maggiano’s - At Maggiano’s, we are focused on making our guests feel special.

This warm and generous hospitality creates an environment where guests come together to celebrate birthdays, weddings and many more special

This warm and generous hospitality creates an environment where guests come together to celebrate birthdays, weddings and many more special occasions.

While our dining rooms support the majority of our business, we also offer carry-out and delivery options through partnerships with delivery service providers that have made our restaurants more accessible to guests.

Our restaurants also have banquet rooms to host large party events and we have a begun to renovate these banquet rooms in certain restaurants to provide a better experience for this profitable revenue channel, particularly during the holiday season in the second and third quarters of the fiscal year.

Franchise Partnerships - During the twenty-six week period ended December 25, 2024, there were 21 new franchise restaurant openings and two new development agreements.

Our restaurants also have banquet rooms, a profitable revenue channel, to host large special events, particularly during the holiday season in the second and third quarters of the fiscal year.

Franchise Partnerships - During the thirty-nine week period ended March 26, 2025, there were 27 new franchise restaurant openings and two new development agreements.

We plan to strategically pursue expansion of Chili’s internationally through development agreements with new and existing franchise partners.

Company Development - The following table details the number of restaurant openings during the thirteen and twenty-six week periods ended December 25, 2024 and December 27, 2023, respectively, total full year projected openings in fiscal 2025 and the total restaurants open at each period end:

Company Development - The following table details the number of restaurant openings during the thirteen and thirty-nine week periods ended March 26, 2025 and March 27, 2024, respectively, total full year projected openings in fiscal 2025 and the total restaurants open at each period end:

Openings During the Openings During the Full Year Projected Openings

Thirteen Week Periods Ended Twenty-Six Week Periods Ended Total Open Restaurants at

December 25, 2024 December 27, 2023 December 25, 2024 December 27, 2023 Fiscal 2025 December 25, 2024 December 27, 2023

Thirteen Week Periods Ended Thirty-Nine Week Periods Ended Total Open Restaurants at

March 26, 2025 March 27, 2024 March 26, 2025 March 27, 2024 Fiscal 2025 March 26, 2025 March 27, 2024

Company-owned restaurants

13 unchanged sentences

Total 7 4 29 23 35-38 1,626 1,618

As of December 25, 2024, we own property for 50 of the 1,164 Company-owned restaurants and one closed restaurant.

During the third quarter of fiscal 2025, the Company acquired land and building valued at $3.1 million and $8.0 million, respectively, associated with four Company-owned restaurants that were previously leased.

As of March 26, 2025, we own property for 54 of the 1,163 Company-owned restaurants and one closed restaurant.

The net book values associated with these restaurants included land of $44.8 million and buildings of $19.0 million.

Thirteen and Twenty-Six Week Periods Ended December 25, 2024 compared to December 27, 2023

Thirteen and Thirty-Nine Week Periods Ended March 26, 2025 compared to March 27, 2024

Revenues are presented in two separate captions in the Consolidated Statements of Comprehensive Income (Unaudited) to provide more clarity around Company-owned restaurant revenues and operating expenses trends:

• Company sales 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 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 include royalties, franchise advertising fees, franchise and development fees, and gift card equalization.

2 unchanged sentences

Chili’s Maggiano’s Total Revenues

Thirteen Week Period Ended December 27, 2023 $ 927.2 $ 146.9 $ 1,074.1

Thirteen Week Period Ended March 27, 2024 $ 999.6 $ 120.7 $ 1,120.3

Comparable restaurant sales 304.5 0.4 304.9

3 unchanged sentences

Gift card discounts (0.2) — (0.2)

Merchandise income 0.1 — 0.1

Maggiano's banquet income — (0.1) (0.1)

Gift card breakage (0.9) (0.1) (1.0)

2 unchanged sentences

Franchise revenues (1)

Thirteen Week Period Ended December 25, 2024 $ 1,208.8 $ 149.4 $ 1,358.2

Thirteen Week Period Ended March 26, 2025 $ 1,304.1 $ 121.0 $ 1,425.1

Total Revenues

Chili’s Maggiano’s Total Revenues

Twenty-Six Week Period Ended December 27, 2023 $ 1,835.3 $ 251.3 $ 2,086.6

Thirty-Nine Week Period Ended March 27, 2024 $ 2,834.9 $ 372.0 $ 3,206.9

Comparable restaurant sales 708.6 7.3 715.9

2 unchanged sentences

Delivery service fee income 0.8 0.1 0.9

Gift card discounts 0.2 — 0.2

Merchandise income 0.1 — 0.1

4 unchanged sentences

Franchise revenues (1)

Twenty-Six Week Period Ended December 25, 2024 $ 2,239.2 $ 258.0 $ 2,497.2

(1) Franchise revenues increased in the thirteen and twenty-six week periods ended December 25, 2024 compared to December 27, 2023 primarily because of higher royalties and franchise advertising fees.

Our Chili’s and Maggiano’s franchisees generated sales of approximately $232.3 million and $4.2 million and $458.0 million and $7.3 million respectively for the thirteen and twenty-six week periods ended December 25, 2024 compared to $216.9 million and $2.8 million and $426.2 million and $5.6 million respectively in sales for the thirteen and twenty-six week periods ended December 27, 2023.

The table below presents the percentage change in comparable restaurant sales and restaurant capacity for the thirteen and twenty-six week periods ended December 25, 2024 compared to December 27, 2023:

Percentage Change in the Thirteen Week Period Ended December 25, 2024 versus December 27, 2023

Thirty-Nine Week Period Ended March 26, 2025 $ 3,543.3 $ 379.0 $ 3,922.3

(1) Franchise revenues increased in the thirteen and thirty-nine week periods ended March 26, 2025 compared to March 27, 2024 primarily because of higher royalties.

Our Chili’s and Maggiano’s franchisees generated sales of approximately $237.4 million and $5.0 million and $700.1 million and $12.2 million respectively for the thirteen and thirty-nine week periods ended March 26, 2025 compared to $216.2 million and $2.9 million and $644.3 million and $8.5 million respectively in sales for the thirteen and thirty-nine week periods ended March 27, 2024.

The table below presents the percentage change in comparable restaurant sales and restaurant capacity for the thirteen and thirty-nine week periods ended March 26, 2025 compared to March 27, 2024:

Percentage Change in the Thirteen Week Period Ended March 26, 2025 versus March 27, 2024

Comparable Restaurant Sales (1)

8 unchanged sentences

System-wide (6)

Percentage Change in the Twenty-Six Week Period Ended December 25, 2024 versus December 27, 2023

Percentage Change in the Thirty-Nine Week Period Ended March 26, 2025 versus March 27, 2024

Comparable Restaurant Sales (1)

19 unchanged sentences

Costs and Expenses

Thirteen Week Period Ended December 25, 2024 compared to December 27, 2023

Thirteen Week Period Ended March 26, 2025 compared to March 27, 2024

The following is a summary of the changes in Costs and Expenses:

Thirteen Week Periods Ended Favorable (Unfavorable) Variance

December 25, 2024 December 27, 2023

March 26, 2025 March 27, 2024

Dollars % of Company Sales Dollars % of Company Sales Dollars % of Company Sales

8 unchanged sentences

As a percentage of Company sales:

• Food and beverage costs were favorable 0.2%, due to 1.2% from menu pricing, partially offset by 0.5% of unfavorable menu item mix and 0.5% of unfavorable commodity costs primarily driven by produce and poultry.

• Food and beverage costs were favorable 0.1%, due to 1.1% from menu pricing, partially offset by 0.7% of unfavorable menu item mix and 0.3% of unfavorable commodity costs primarily driven by meat and poultry, partially offset by favorable rebate impact.

• Restaurant labor was favorable 1.4%, due to 4.9% of sales leverage and 0.2% of lower other labor expenses, partially offset by 2.9% of higher hourly labor driven by increased staffing levels and wage rates, 0.4% of higher manager salaries, and 0.4% of higher manager bonus.

• Restaurant expenses were favorable 3.6%, due to 4.2% of sales leverage and 0.2% of lower delivery fees, partially offset by 0.4% of higher repairs and maintenance, 0.3% of higher workers’ compensation and general liability insurance, and 0.1% of higher other restaurant expenses.

• Restaurant expenses were favorable 3.3%, due to 4.4% of sales leverage and 0.2% of lower delivery fees, partially offset by 0.4% of higher repairs and maintenance, 0.4% of higher advertising, 0.3% of higher workers' compensation and general liability insurance, and 0.2% of higher rent.

Depreciation and amortization increased $12.1 million as follows:

Depreciation and Amortization

Thirteen Week Period Ended December 27, 2023 $ 41.3

Thirteen Week Period Ended March 27, 2024 $ 42.6

Additions for new and existing restaurant assets 6.3

2 unchanged sentences

Retirements and fully depreciated restaurant assets (3.4)

Thirteen Week Period Ended December 25, 2024 $ 47.7

(1) Finance leases increased primarily due to additional amortization for new tabletop devices and iPad equipment in our restaurants.

Thirteen Week Period Ended March 26, 2025 $ 54.7

(1) Finance lease amortization increased primarily due to new tabletop and tablet devices in our restaurants.

General and administrative expenses increased $12.2 million as follows:

General and Administrative

Thirteen Week Period Ended December 27, 2023 $ 43.2

Thirteen Week Period Ended March 27, 2024 $ 46.1

Corporate technology initiatives (1)

Stock-based compensation (2)

Payroll expenses 2.1

Professional fees 2.1

Performance-based compensation 1.4

Defined contribution plan employer expenses and other benefits 1.1

Payroll expenses 0.7

Thirteen Week Period Ended December 25, 2024 $ 53.1

Thirteen Week Period Ended March 26, 2025 $ 58.3

(1) Corporate technology initiatives increased primarily due to ERP system subscription costs and amortization of software implementation costs.

(2) Stock-based compensation increased primarily due to higher overall equity compensation levels to our officers, a special performance share grant to certain executives during the current quarter, and higher expected payout on certain performance share grants compared to the prior year.

(2) Stock-based compensation increased primarily due to higher overall equity compensation levels to our officers, including special performance share grants to certain officers in the second quarter of fiscal 2025..

Other (gains) and charges consisted of the following (for further details, refer to Note 11 - Other Gains and Charges):

Thirteen Week Periods Ended

2024 December 27,

2025 March 27,

Litigation & claims, net $ 2.5 $ 2.0

Enterprise system implementation costs 2.4 3.3

Severance and other benefit charges 2.0 0.4

Lease contingencies 1.5 0.3

Restaurant closure asset write-offs and charges 0.8 4.0

Loss from natural disasters, net (of insurance recoveries) 0.7 (0.6)

Lease modification gain, net (0.2) (0.1)

Interest expenses decreased $2.0 million primarily due to the maturity of our 5.000%, $350.0 million notes on October 1, 2024, partially offset by higher average revolver balance during the quarter.

Twenty-Six Week Period Ended December 25, 2024 compared to December 27, 2023

Interest expenses decreased $3.0 million primarily due to the lower average outstanding debt balances, partially offset by higher interest on financed leased equipment.

Thirty-Nine Week Period Ended March 26, 2025 compared to March 27, 2024

The following is a summary of the changes in Costs and Expenses:

Twenty-Six Week Periods Ended Favorable (Unfavorable) Variance

December 25, 2024 December 27, 2023

Thirty-Nine Week Periods Ended Favorable (Unfavorable) Variance

March 26, 2025 March 27, 2024

Dollars % of Company Sales Dollars % of Company Sales Dollars % of Company Sales

8 unchanged sentences

As a percentage of Company sales:

• Food and beverage costs were favorable 0.4%, due to 1.5% from menu pricing, partially offset by 0.6% of unfavorable commodity costs primarily driven by poultry and produce and 0.5% of unfavorable menu item mix.

• Food and beverage costs were favorable 0.3%, due to 1.4% from menu pricing, partially offset by 0.7% of unfavorable menu item mix and 0.4% of unfavorable commodity costs primarily driven by poultry and produce.

• Restaurant labor was favorable 1.7%, due to 4.1% of sales leverage and 0.2% of lower other labor expenses, partially offset by 2.0% of higher hourly labor driven by increased staffing levels and wage rates, 0.4% of higher manager salaries, and 0.2% of higher manager bonus.

• Restaurant expenses were favorable 2.5%, due to 3.3% of sales leverage and 0.3% of lower delivery fees, partially offset by 0.9% of higher repairs and maintenance and 0.2% of higher rent.

• Restaurant expenses were favorable 2.8%, due to 3.9% of sales leverage and 0.2% of lower delivery fees, partially offset by 0.7% of higher repairs and maintenance, 0.2% of higher advertising, 0.2% of higher workers' compensation and general liability insurance, and 0.2% of higher rent.

Depreciation and amortization increased $22.9 million as follows:

Depreciation and Amortization

Twenty-Six Week Period Ended December 27, 2023 $ 83.2

Thirty-Nine Week Period Ended March 27, 2024 $ 125.8

Additions for new and existing restaurant assets 20.1

2 unchanged sentences

Retirements and fully depreciated restaurant assets (14.4)

Twenty-Six Week Period Ended December 25, 2024 $ 94.0

(1) Finance leases increased primarily due to additional amortization for new tabletop devices and iPad equipment in our restaurants.

Thirty-Nine Week Period Ended March 26, 2025 $ 148.7

(1) Finance lease amortization increased primarily due to new tabletop and tablet devices in our restaurants.

General and administrative expenses increased $31.5 million as follows:

General and Administrative

Twenty-Six Week Period Ended December 27, 2023 $ 85.6

Performance-based compensation (1)

Thirty-Nine Week Period Ended March 27, 2024 $ 131.7

Stock-based compensation (1)

Performance-based compensation (2)

Corporate technology initiatives (3)

2 unchanged sentences

Defined contribution plan employer expenses and other benefits 2.6

Twenty-Six Week Period Ended December 25, 2024 $ 104.9

Thirty-Nine Week Period Ended March 26, 2025 $ 163.2

(1) Stock-based compensation increased primarily due to higher overall equity compensation levels to our officers, including special performance share grants to certain officers in the second quarter of fiscal 2025.

(2) Performance-based compensation increased primarily due to higher expected annual performance compared to target in the current year.

(3) Corporate technology initiatives increased primarily due to ERP system subscription costs and amortization of software implementation costs.

Other (gains) and charges consisted of the following (for further details, refer to Note 11 - Other Gains and Charges):

Twenty-Six Week Periods Ended

2024 December 27,

Thirty-Nine Week Periods Ended

2025 March 27,

Enterprise system implementation costs $ 12.0 $ 7.4

Litigation & claims, net 11.1 5.2

Severance and other benefit charges 2.3 0.5

Restaurant closure asset write-offs and charges 2.3 4.8

Lease contingencies 1.5 0.8

Loss from natural disasters, net (of insurance recoveries) 0.7 (0.4)

1 unchanged sentence

Other 1.3 1.4

Interest expenses decreased $4.7 million primarily due to the maturity of our 5.000%, $350.0 million notes on October 1, 2024 and a lower average balance and lower average interest rate on our revolving credit facility compared to the prior year.

Thirteen Week Periods Ended Twenty-Six Week Periods Ended

2024 December 27,

2023 December 25,

2024 December 27,

$ 30.0 $ 19.5

Interest expenses decreased $7.7 million primarily due to the lower average outstanding debt balances, partially offset by higher interest on financed leased equipment.

Thirteen Week Periods Ended Thirty-Nine Week Periods Ended

2025 March 27,

2024 March 26,

2025 March 27,

Effective income tax rate 17.2 % 9.6 % 15.8 % 8.3 %

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

The change in the effective income tax rate in the thirteen and twenty-six week periods ended December 25, 2024 to the thirteen and twenty-six week periods 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 thirteen and thirty-nine week periods ended March 26, 2025 and March 27, 2024.

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

Segment Results

Chili’s Segment

Thirteen Week Period Ended December 25, 2024 compared to December 27, 2023

Thirteen Week Period Ended March 26, 2025 compared to March 27, 2024

Thirteen Week Periods Ended Favorable (Unfavorable) Variance Variance as percentage

2024 December 27,

2025 March 27,

Company sales $ 1,292.2 $ 988.4 $ 303.8 30.7 %

5 unchanged sentences

Thirteen Week Periods Ended Favorable (Unfavorable) Variance

December 25, 2024 December 27, 2023

March 26, 2025 March 27, 2024

Dollars % of Company Sales Dollars % of Company Sales Dollars % of Company Sales

6 unchanged sentences

As a percentage of Company sales:

• Chili’s Food and beverage costs were favorable 0.2%, due to 1.2% from menu pricing, partially offset by 0.6% of unfavorable commodity costs primarily driven by produce and poultry and 0.4% of unfavorable menu item mix.

• Chili’s Food and beverage costs were favorable 0.1%, due to 1.1% from menu pricing, partially offset by 0.8% of unfavorable menu item mix and 0.2% of unfavorable commodity costs primarily driven by meat and poultry, partially offset by favorable rebate impact.

• Chili’s Restaurant labor was favorable 1.5%, due to 5.5% of sales leverage and 0.1% of lower other labor expenses, partially offset by 3.3% of higher hourly labor driven by increased staffing levels and wage rates, 0.4% of higher manager salaries, and 0.4% of higher manager bonus.

• Chili’s Restaurant expenses were favorable 4.4%, due to 4.9% of sales leverage and 0.3% lower delivery fees, partially offset by 0.5% of higher repairs and maintenance and 0.3% of higher workers’ compensation and general liability insurance.

• Chili’s Restaurant expenses were favorable 3.7%, due to 4.9% of sales leverage and 0.2% of lower delivery fees, partially offset by 0.5% of higher repairs and maintenance, 0.4% of higher advertising, 0.4% of higher workers' compensation and general liability insurance, and 0.1% of higher other restaurant expenses.

Chili’s Depreciation and amortization increased $12.3 million as follows:

Depreciation and Amortization

Thirteen Week Period Ended December 27, 2023 $ 35.5

Thirteen Week Period Ended March 27, 2024 $ 36.6

Additions for new and existing restaurant assets 5.7

1 unchanged sentence

Retirements and fully depreciated restaurant assets (2.5)

Thirteen Week Period Ended December 25, 2024 $ 41.8

(1) Finance leases increased primarily due to additional amortization for new tabletop devices and iPad equipment in our restaurants.

Thirteen Week Period Ended March 26, 2025 $ 48.9

(1) Finance lease amortization increased primarily due to new tabletop and tablet devices in our restaurants.

Chili’s General and administrative increased $1.9 million as follows:

General and Administrative

Thirteen Week Period Ended December 27, 2023 $ 10.2

Defined contribution plan employer expenses and other benefits 0.5

Thirteen Week Period Ended March 27, 2024 $ 10.8

Performance-based compensation 0.6

Defined contribution plan employer expenses and other benefits 0.5

Payroll expenses 0.4

Stock-based compensation 0.4

Thirteen Week Period Ended December 25, 2024 $ 12.2

Thirteen Week Period Ended March 26, 2025 $ 12.7

Chili’s Other (gains) and charges consisted of the following (for further details, refer to Note 11 - Other Gains and Charges):

Thirteen Week Periods Ended

2024 December 27,

2025 March 27,

Litigation & claims, net $ 2.0 $ 1.9

Restaurant closure asset write-offs and charges 0.8 4.0

Loss from natural disasters, net (of insurance recoveries) 0.7 (0.6)

Lease modification gain, net (0.2) (0.1)

Twenty-Six Week Period Ended December 25, 2024 compared to December 27, 2023

Twenty-Six Week Periods Ended Favorable (Unfavorable) Variance Variance as percentage

2024 December 27,

Other 0.1 (0.1)

Thirty-Nine Week Period Ended March 26, 2025 compared to March 27, 2024

Thirty-Nine Week Periods Ended Favorable (Unfavorable) Variance Variance as percentage

2025 March 27,

Company sales $ 3,508.0 $ 2,803.1 $ 704.9 25.1 %

4 unchanged sentences

The following is a summary of the changes in Chili’s operating costs and expenses:

Twenty-Six Week Periods Ended Favorable (Unfavorable) Variance

December 25, 2024 December 27, 2023

Thirty-Nine Week Periods Ended Favorable (Unfavorable) Variance

March 26, 2025 March 27, 2024

Dollars % of Company Sales Dollars % of Company Sales Dollars % of Company Sales

6 unchanged sentences

As a percentage of Company sales:

• Chili’s Food and beverage costs were favorable 0.3%, due to 1.5% from menu pricing, partially offset by 0.7% of unfavorable commodity costs primarily driven by poultry and produce and 0.5% of unfavorable menu item mix.

• Chili’s Restaurant labor was favorable 1.9%, due to 4.2% of sales leverage and 0.2% of lower other labor expenses, partially offset by 1.9% of higher hourly labor driven by increased staffing levels and wage rates, 0.3% of higher manager salaries, and 0.3% of higher manager bonus.

• Chili’s Restaurant expenses were favorable 3.0%, due to 3.9% of sales leverage and 0.4% lower delivery fees, partially offset by 1.0% of higher repairs and maintenance, 0.2% of higher workers’ compensation and general liability insurance, and 0.1% of higher other restaurant expenses.

Chili’s Depreciation and amortization decreased $10.6 million as follows:

• Chili’s Food and beverage costs were favorable 0.2%, due to 1.4% from menu pricing, partially offset by 0.9% of unfavorable menu item mix and 0.3% of unfavorable commodity costs primarily driven by poultry and produce.

• Chili’s Restaurant labor was favorable 1.8%, due to 4.7% of sales leverage and 0.2% of lower other labor expenses, partially offset by 2.4% of higher hourly labor driven by increased staffing levels and wage rates, 0.4% of higher manager bonus, and 0.3% of higher manager salaries.

• Chili’s Restaurant expenses were favorable 3.2%, due to 4.3% of sales leverage and 0.3% lower delivery fees, partially offset by 0.8% of higher repairs and maintenance, 0.2% of higher workers' compensation and general liability insurance, 0.2% of higher rent, and 0.2% of higher other restaurant expenses.

Chili’s Depreciation and amortization increased $22.9 million as follows:

Depreciation and Amortization

Twenty-Six Week Period Ended December 27, 2023 $ 71.7

Thirty-Nine Week Period Ended March 27, 2024 $ 108.3

Additions for new and existing restaurant assets 18.3

1 unchanged sentence

Retirements and fully depreciated restaurant assets (10.9)

Twenty-Six Week Period Ended December 25, 2024 $ 82.3

(1) Finance leases increased primarily due to additional amortization for new tabletop devices and iPad equipment in our restaurants.

Thirty-Nine Week Period Ended March 26, 2025 $ 131.2

(1) Finance lease amortization increased primarily due to new tabletop and tablet devices in our restaurants.

Chili’s General and administrative increased $5.7 million as follows:

General and Administrative

Twenty-Six Week Period Ended December 27, 2023 $ 20.2

Thirty-Nine Week Period Ended March 27, 2024 $ 31.0

Performance-based compensation 1.8

2 unchanged sentences

Payroll expenses 1.0

Twenty-Six Week Period Ended December 25, 2024 $ 24.0

Thirty-Nine Week Period Ended March 26, 2025 $ 36.7

Chili’s Other (gains) and charges consisted of the following (for further details, refer to Note 11 - Other Gains and Charges):

Twenty-Six Week Periods Ended

2024 December 27,

Thirty-Nine Week Periods Ended

2025 March 27,

Litigation & claims, net $ 8.6 $ 4.9

3 unchanged sentences

Other 1.4 1.2

$ 11.8 $ 10.3

Maggiano’s Segment

Thirteen Week Period Ended December 25, 2024 compared to December 27, 2023

Thirteen Week Period Ended March 26, 2025 compared to March 27, 2024

Thirteen Week Periods Ended Favorable (Unfavorable) Variance Variance as a percentage

2024 December 27,

2025 March 27,

Company sales $ 120.8 $ 120.5 $ 0.3 0.2 %

1 unchanged sentence

Total revenues $ 121.0 $ 120.7 $ 0.3 0.2 %

Maggiano’s Total revenues increased 1.7% primarily due to favorable comparable restaurant sales driven by menu pricing, partially offset by lower traffic.

Maggiano’s Total revenues increased 0.2% primarily due to favorable comparable restaurant sales driven by menu pricing and favorable menu item mix, partially offset by lower traffic.

Refer to “Revenues” section above for further details about Maggiano’s revenues changes.

1 unchanged sentence

Thirteen Week Periods Ended Favorable (Unfavorable) Variance

December 25, 2024 December 27, 2023

March 26, 2025 March 27, 2024

Dollars % of Company Sales Dollars % of Company Sales Dollars % of Company Sales

6 unchanged sentences

As a percentage of Company sales:

• Maggiano’s Food and beverage costs were favorable 0.5%, due to 1.0% from menu pricing, partially offset by 0.5% of unfavorable commodity costs primarily driven by poultry and dairy.

• Maggiano’s Restaurant labor was favorable 0.7%, due to 0.7% of lower hourly labor, 0.4% of sales leverage, and 0.3% of lower other labor expenses, partially offset by 0.7% of higher manager salaries.

• Maggiano’s Restaurant expenses were unfavorable 1.4%, due to 0.8% of higher advertising, 0.5% of higher repairs and maintenance, and 0.5% of higher other restaurant expenses, partially offset by 0.4% of sales leverage.

Twenty-Six Week Period Ended December 25, 2024 compared to December 27, 2023

Twenty-Six Week Periods Ended Favorable (Unfavorable) Variance Variance as a percentage

2024 December 27,

• Maggiano’s Food and beverage costs were flat, due to 1.2% from menu pricing, partially offset by 0.9% of unfavorable commodity costs primarily driven by poultry, dairy, and seafood and 0.3% unfavorable menu item mix.

• Maggiano’s Restaurant labor was favorable 0.2%, due to 0.3% of lower hourly labor, 0.2% of lower manager bonus, and 0.2% of lower other labor expenses, partially offset by 0.5% of higher manager salaries.

• Maggiano’s Restaurant expenses were unfavorable 0.9%, due to 0.6% of higher advertising and 0.5% of higher repairs and maintenance, partially offset by 0.1% of sales leverage and 0.1% of lower other restaurant expenses.

Thirty-Nine Week Period Ended March 26, 2025 compared to March 27, 2024

Thirty-Nine Week Periods Ended Favorable (Unfavorable) Variance Variance as a percentage

2025 March 27,

Company sales $ 378.4 $ 371.5 $ 6.9 1.9 %

1 unchanged sentence

Total revenues $ 379.0 $ 372.0 $ 7.0 1.9 %

Maggiano’s Total revenues increased 2.7% primarily due to favorable comparable restaurant sales driven by menu pricing, partially offset by lower traffic.

Maggiano’s Total revenues increased 1.9% primarily due to favorable comparable restaurant sales driven by menu pricing and favorable menu item mix, partially offset by lower traffic.

Refer to “Revenues” section above for further details about Maggiano’s revenues changes.

The following is a summary of the changes in Maggiano’s operating costs and expenses:

Twenty-Six Week Periods Ended Favorable (Unfavorable) Variance

December 25, 2024 December 27, 2023

Thirty-Nine Week Periods Ended Favorable (Unfavorable) Variance

March 26, 2025 March 27, 2024

Dollars % of Company Sales Dollars % of Company Sales Dollars % of Company Sales

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• Maggiano’s Food and beverage costs were favorable 0.5%, due to 1.4% from menu pricing, partially offset by 0.8% of unfavorable commodity costs primarily driven by dairy and poultry and 0.1% of unfavorable menu item mix.

• Maggiano’s Restaurant labor was favorable 1.6%, due to 1.1% of lower hourly labor, 0.6% of sales leverage, and 0.3% of lower other labor expenses, partially offset by 0.4% of higher manager salaries.

• Maggiano’s Restaurant expenses were unfavorable 0.8%, due to 0.6% of higher advertising, 0.4% of higher repairs and maintenance, 0.3% of higher rent, and 0.3% of higher other restaurant expenses, partially offset by 0.4% lower supervision and 0.4% of sales leverage.

• Maggiano’s Restaurant labor was favorable 1.1%, due to 0.9% of lower hourly labor, 0.3% of lower other labor expenses, and 0.2% of sales leverage, partially offset by 0.3% of higher manager salaries.

• Maggiano’s Restaurant expenses were unfavorable 0.8%, due to 0.6% of higher advertising, 0.4% of higher repairs and maintenance, 0.3% of higher rent, partially offset by 0.3% of lower other restaurant expenses and 0.2% of sales leverage.

Liquidity and Capital Resources

Cash Flows from Operating Activities

Twenty-Six Week Periods Ended Favorable (Unfavorable) Variance

2024 December 27,

Thirty-Nine Week Periods Ended Favorable (Unfavorable) Variance

2025 March 27,

Net cash provided by operating activities $ 493.0 $ 280.4 $ 212.6

Net cash provided by operating activities increased due to an increase in operating income partially offset by an increase in payments of interest on the 8.250% notes and income taxes in the current year, and the timing of other operational receipts and payments.

Net cash provided by operating activities increased due to an increase in operating income partially offset by an increase in payments of income taxes and interest on the 8.250% notes in the current year, and the timing of other operational receipts and payments.

Cash Flows from Investing Activities

Twenty-Six Week Periods Ended Favorable (Unfavorable) Variance

2024 December 27,

Thirty-Nine Week Periods Ended Favorable (Unfavorable) Variance

2025 March 27,

Net cash used in investing activities $ (185.4) $ (138.0) $ (47.4)

Net cash used in investing activities increased compared to the prior year.

Increased spend on Chili’s capital maintenance and equipment were partially offset by decreased spend on new restaurant construction.

Net cash used in investing activities increased compared to the prior year primarily due to increased spend on Chili’s equipment and capital maintenance.

Cash Flows from Financing Activities

Twenty-Six Week Periods Ended Favorable (Unfavorable) Variance

2024 December 27,

Thirty-Nine Week Periods Ended Favorable (Unfavorable) Variance

2025 March 27,

Net cash used in financing activities $ (354.7) $ (142.0) $ (212.7)

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We refinanced our $350.0 million 5.000% notes, which matured in October 2024, through our existing revolving credit facility.

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

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

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

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

Our $900.0 million revolving credit facility, as amended, 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 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, our interest rate was 5.93% consisting of SOFR of 4.33% plus the applicable margin and spread adjustment of 1.60%.

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.

We expect to remain in compliance with our covenants during the remainder of fiscal 2025.

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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.

Cash Flow Outlook

8 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 2. Management’s Discussion and Analysis