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Item 2. Management’s Discussion and Analysis

2025-10-29 compared with 2025-04-29 · 96 added, 233 removed, 181 unchanged (65% of the section changed)

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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 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.

For an understanding of the significant factors that influenced our performance during the thirteen week periods ended September 24, 2025 and September 25, 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 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.

As of September 24, 2025, we owned, operated or franchised 1,630 restaurants, consisting of 1,161 Company-owned restaurants and 469 franchised restaurants, located in the United States, 28 other countries and two United States territories.

Our operating segments are Chili’s and Maggiano’s.

Operating Environment

During recent years, our operating results were impacted by geopolitical and other macroeconomic events, leading to higher than usual inflation on wages and food and beverage costs.

Geopolitical and other macroeconomic events have led, and in the future may lead to, wage inflation, staffing challenges, product cost inflation and/or disruptions in the supply chain that impact our restaurants’ ability to obtain the products needed to support their operation.

Geopolitical and other macroeconomic events have led, and in the future may lead to, wage inflation, staffing challenges, product cost inflation (inclusive of tariffs) and/or disruptions in the supply chain that impact our restaurants’ ability to obtain the products needed to support their operation.

Such events could also negatively affect consumer spending potentially reducing guest traffic and/or reducing the average amount guests spend in our restaurants.

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Our primary brand strategy is to make our guests feel special through great food and quality service so that they return to our restaurants.

Chili’s - Our strategy is to make everyone feel special through a fun atmosphere, delicious food and drinks and our Chili’s hospitality.

Chili’s - Our strategy is to make everyone feel special through a fun atmosphere, delicious food and drinks and Chilihead hospitality.

We are making work at Chili’s easier, more fun and more rewarding for our team members so that they are more engaged and provide a better experience for our guests.

One way we have done this is by eliminating tasks that were unnecessary and did not add value to our guests.

We have also simplified our menu to focus on core equities we believe can help grow sales—burgers, fajitas, Chicken Crispers ® , and margaritas, as well as other classic favorites.

We have also simplified our menu to focus on core equities we believe can help grow sales—burgers, fajitas, Chicken Crispers ® , margaritas, and the Triple Dipper ® .

Our team members can make our core menu items better and more consistently because we have fewer menu items that need to be perfected.

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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.

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.

Our My Chili’s Rewards loyalty program offers free chips and salsa or a non-alcoholic beverage to members based on their visit frequency and allows us to communicate and advertise to our guests through email and text.

Our My Chili’s rewards program offers free chips and salsa or a non-alcoholic beverage to members any time they visit our restaurants and allows us to communicate and advertise to our guests through email and text.

Our servers use handheld tablets to place orders for our guests, increasing the efficiency of our team members and allowing orders to reach our kitchen quicker for better service to our guests.

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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.

Franchise Partnerships - During the thirteen week period ended September 24, 2025, there were 5 new franchise restaurant openings and one new development agreement.

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 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 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 Development - The following table details the number of restaurant openings during the thirteen week periods ended September 24, 2025 and September 25, 2024, respectively, total full year projected openings in fiscal 2026 and the total restaurants open at each period end:

Openings During the Full Year Projected Openings

Thirteen Week Periods Ended Total Open Restaurants at

September 24, 2025 September 25, 2024 Fiscal 2026 September 24, 2025 September 25, 2024

Company-owned restaurants

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Total 7 15 32-38 1,630 1,625

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.

Additionally, the Company is relocating one Maggiano’s restaurant with an expected opening in the current year.

As of September 24, 2025, we own property for 54 of the 1,161 Company-owned restaurants and one closed restaurant.

The net book values associated with these restaurants included land of $44.8 million and buildings of $18.6 million.

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

Thirteen Week Period Ended September 24, 2025 compared to September 25, 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, 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.

• 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, gift card breakage, digital entertainment revenues, merchandise income and are net of gift card discount costs from third-party gift card sales.

• Franchise revenues include royalties, franchise advertising fees, franchise and development fees, and other service fees.

The following is a summary of the change in Total revenues:

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Chili’s Maggiano’s Total Revenues

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

Thirteen Week Period Ended September 25, 2024 $ 1,030.4 $ 108.6 $ 1,139.0

Comparable restaurant sales 214.2 (6.3) 207.9

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Gift card discounts (0.1) — (0.1)

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

Restaurant closures (8.9) — (8.9)

Company sales 303.8 0.3 304.1

Franchise revenues (1)

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

Total Revenues

Chili’s Maggiano’s Total Revenues

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

Restaurant openings 26.8 — 26.8

Digital entertainment revenues 1.7 — 1.7

Delivery service fee income 0.8 0.1 0.9

Merchandise income 0.1 — 0.1

Gift card breakage (2.2) (0.2) (2.4)

Maggiano's banquet income — (1.0) (1.0)

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Franchise revenues (1)

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)

Price Impact Mix-Shift Impact (2)

Traffic Impact Restaurant Capacity (3)

Company-owned 28.2 % 4.6 % 5.9 % 17.7 % (1.3) %

Chili’s 31.6 % 4.4 % 6.3 % 20.9 % (1.4) %

Maggiano’s 0.4 % 7.3 % 1.3 % (8.2) % — %

Franchise (4)

International 5.8 %

Chili’s domestic (5)

System-wide (6)

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

Thirteen Week Period Ended September 24, 2025 $ 1,249.7 $ 99.5 $ 1,349.2

(1) Franchise revenues increased in the thirteen week period ended September 24, 2025 compared to September 25, 2024 primarily because of higher royalties.

Our Chili’s and Maggiano’s franchisees generated sales of approximately $269.5 million and $4.6 million respectively for the thirteen week period ended September 24, 2025 compared to $225.7 million and $3.2 million respectively for the thirteen week period ended September 25, 2024.

The table below presents the percentage change in comparable restaurant sales and restaurant capacity for the thirteen week period ended September 24, 2025 compared to September 25, 2024:

Percentage Change in the Thirteen Week Period Ended September 24, 2025 versus September 25, 2024

Comparable Restaurant Sales (1)

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(3) Restaurant Capacity is measured by sales weeks and is calculated based on comparable periods year-over-year.

No adjustments have been made to capacity for temporary closures.

(4) Franchise sales generated by franchisees are not included in Total revenues in the Consolidated Statements of Comprehensive Income (Unaudited);

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Costs and Expenses

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

Thirteen Week Period Ended September 24, 2025 compared to September 25, 2024

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

Thirteen Week Periods Ended Favorable (Unfavorable) Variance

March 26, 2025 March 27, 2024

September 24, 2025 September 25, 2024

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

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As a percentage of Company sales:

• 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 3.3%, 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.

• Food and beverage costs were unfavorable 0.6%, due to 1.2% of unfavorable menu item mix and 0.4% of unfavorable commodity costs primarily driven by meat and seafood, partially offset by 1.0% from menu pricing.

• Restaurant labor was favorable 1.2%, due to 3.4% of sales leverage partially offset by 1.5% of higher hourly labor driven by increased staffing levels and wage rates, 0.6% of higher manager salaries, and 0.1% of higher other labor expenses.

• Restaurant expenses were favorable 2.1%, due to 3.1% of sales leverage and 0.3% of lower repairs and maintenance, partially offset by 0.4% of higher advertising, 0.3% of higher rent, 0.2% of higher workers' compensation and general liability insurance, 0.2% of higher delivery fees and to-go supplies, and 0.2% of higher supervision.

Depreciation and amortization increased $7.3 million as follows:

Depreciation and Amortization

Thirteen Week Period Ended March 27, 2024 $ 42.6

Thirteen Week Period Ended September 25, 2024 $ 46.3

Additions for new and existing restaurant assets 12.7

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Retirements and fully depreciated restaurant assets (7.0)

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.

Thirteen Week Period Ended September 24, 2025 $ 53.6

General and administrative expenses increased $5.4 million as follows:

General and Administrative

Thirteen Week Period Ended March 27, 2024 $ 46.1

Thirteen Week Period Ended September 25, 2024 $ 51.8

Payroll expenses 4.1

Corporate technology initiatives

Defined contribution plan employer expenses and other benefits 1.2

Stock-based compensation

Payroll expenses 2.1

Professional fees (0.9)

Performance-based compensation (3.5)

Defined contribution plan employer expenses and other benefits 1.1

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, including special performance share grants to certain officers in the second quarter of fiscal 2025..

Thirteen Week Period Ended September 24, 2025 $ 57.2

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

Thirteen Week Periods Ended

2025 March 27,

Litigation & claims, net $ 2.5 $ 2.0

Enterprise system implementation costs 2.4 3.3

September 24,

2025 September 25,

Severance and other benefit charges $ 1.5 $ 0.3

Lease contingencies 1.5 0.3

Restaurant closure asset write-offs and charges 0.8 4.0

Lease modification gain, net (0.2) (0.1)

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:

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

Food and beverage costs $ 981.3 25.2 % $ 809.7 25.5 % $ (171.6) 0.3 %

Restaurant labor 1,250.6 32.2 % 1,074.8 33.9 % (175.8) 1.7 %

Restaurant expenses 979.2 25.2 % 888.9 28.0 % (90.3) 2.8 %

Depreciation and amortization 148.7 125.8 (22.9)

General and administrative 163.2 131.7 (31.5)

Other (gains) and charges 30.0 19.5 (10.5)

Interest expenses 42.2 49.9 7.7

Other income, net (0.7) (0.3) 0.4

As a percentage of Company sales:

• 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 2.8%, 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

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

Additions for new and existing restaurant assets 20.1

Finance leases (1)

Corporate assets 1.8

Retirements and fully depreciated restaurant assets (14.4)

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

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

Stock-based compensation (1)

Performance-based compensation (2)

Corporate technology initiatives (3)

Payroll expenses 4.7

Professional fees 3.6

Defined contribution plan employer expenses and other benefits 2.6

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):

Thirty-Nine Week Periods Ended

2025 March 27,

Enterprise system implementation costs $ 12.0 $ 7.4

Litigation & claims, net 0.7 2.5

Severance and other benefit charges 2.3 0.5

Restaurant closure asset write-offs and charges 0.6 0.7

Lease contingencies 1.5 0.8

Enterprise system implementation costs — 4.4

Loss from natural disasters, net (of insurance recoveries) (2.3) —

Lease modification gain, net (1.2) (0.2)

Other 0.4 1.0

$ 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,

Interest expenses decreased $3.8 million primarily due to the lower average outstanding debt balances.

Thirteen Week Periods Ended

September 24,

2025 September 25,

Effective income tax rate 7.5 % 9.0 %

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.

The federal statutory tax rate was 21.0% for the thirteen week periods ended September 24, 2025 and September 25, 2024.

The change in the effective income tax rate in the thirteen week period ended September 24, 2025 to the thirteen week period ended September 25, 2024 is primarily due to excess tax benefits from stock based compensation of $11.7 million in fiscal 2026, which were significantly higher in the current year.

1., also known as the One Big Beautiful Bill Act (OBBBA), was enacted on July 4, 2025.

The legislation included several provisions that impact the timing and magnitude of certain tax deductions, including restoring 100% bonus depreciation for qualifying property.

We have applied the key provisions impacting our financial position for the thirteen week period ended September 24, 2025, and will continue to assess the potential impacts on our financial position, results of operations and cash flows as additional guidance from the OBBBA is issued.

Segment Results

Chili’s Segment

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

Thirteen Week Period Ended September 24, 2025 compared to September 25, 2024

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

2025 March 27,

September 24,

2025 September 25,

Company sales $ 1,236.2 $ 1,018.9 $ 217.3 21.3 %

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Thirteen Week Periods Ended Favorable (Unfavorable) Variance

March 26, 2025 March 27, 2024

September 24, 2025 September 25, 2024

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

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As a percentage of Company sales:

• 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 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 Food and beverage costs were unfavorable 0.4%, due to 1.0% of unfavorable menu item mix and 0.4% of unfavorable commodity costs primarily driven by meat and seafood, partially offset by 1.0% from menu pricing.

• Chili’s Restaurant labor was favorable 1.5%, due to 3.9% of sales leverage, partially offset by 1.7% of higher hourly labor driven by increased staffing levels and wage rates, 0.6% of higher manager salaries, and 0.1% of higher other labor expenses.

• Chili’s Restaurant expenses were favorable 2.7%, due to 3.6% of sales leverage and 0.4% of lower repairs and maintenance, partially offset by 0.3% of higher advertising, 0.3% of higher rent, 0.3% of higher supervision, 0.2% of higher workers' compensation and general liability insurance, and 0.2% of higher delivery fees and to-go supplies.

Chili’s Depreciation and amortization increased $6.2 million as follows:

Depreciation and Amortization

Thirteen Week Period Ended March 27, 2024 $ 36.6

Thirteen Week Period Ended September 25, 2024 $ 40.5

Additions for new and existing restaurant assets 11.4

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Retirements and fully depreciated restaurant assets (5.9)

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.

Thirteen Week Period Ended September 24, 2025 $ 46.7

Chili’s General and administrative increased $0.9 million as follows:

General and Administrative

Thirteen Week Period Ended March 27, 2024 $ 10.8

Performance-based compensation 0.6

Thirteen Week Period Ended September 25, 2024 $ 11.8

Defined contribution plan employer expenses and other benefits 0.5

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Stock-based compensation 0.2

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

2025 March 27,

Litigation & claims, net $ 2.0 $ 1.9

Restaurant closure asset write-offs and charges 0.8 4.0

Lease modification gain, net (0.2) (0.1)

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 %

Franchise revenues 35.3 31.8 3.5 11.0 %

Total revenues $ 3,543.3 $ 2,834.9 $ 708.4 25.0 %

Chili’s Total revenues increased by 25.0% primarily due to favorable comparable sales driven by higher traffic, menu pricing, and favorable menu item mix.

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

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

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

Food and beverage costs $ 893.7 25.5 % $ 721.6 25.7 % $ (172.1) 0.2 %

Restaurant labor 1,133.1 32.3 % 955.3 34.1 % (177.8) 1.8 %

Restaurant expenses 870.1 24.8 % 785.5 28.0 % (84.6) 3.2 %

Depreciation and amortization 131.2 108.3 (22.9)

General and administrative 36.7 31.0 (5.7)

Other (gains) and charges 11.8 10.3 (1.5)

As a percentage of Company sales:

• 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

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

Additions for new and existing restaurant assets 18.3

Finance leases (1)

Retirements and fully depreciated restaurant assets (10.9)

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

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

Performance-based compensation (0.8)

Stock-based compensation 1.4

Defined contribution plan employer expenses and other benefits 1.4

Payroll expenses 1.0

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

Thirteen Week Period Ended September 24, 2025 $ 12.7

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

Thirty-Nine Week Periods Ended

2025 March 27,

Thirteen Week Periods Ended

September 24,

2025 September 25,

Litigation & claims, net $ 0.7 $ 1.2

1 unchanged sentence

Loss from natural disasters, net (of insurance recoveries) (2.2) —

Lease modification gain, net (1.2) (0.2)

Other (0.1) 1.0

1 unchanged sentence

Maggiano’s Segment

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

Thirteen Week Period Ended September 24, 2025 compared to September 25, 2024

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

2025 March 27,

September 24,

2025 September 25,

Company sales $ 99.2 $ 108.4 $ (9.2) (8.5) %

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Total revenues $ 99.5 $ 108.6 $ (9.1) (8.4) %

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.

Maggiano’s Total revenues decreased 8.4% primarily due to unfavorable comparable restaurant sales driven by lower traffic partially offset by menu pricing, and the unfavorable impact of restaurant closures.

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

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Thirteen Week Periods Ended Favorable (Unfavorable) Variance

March 26, 2025 March 27, 2024

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

Food and beverage costs $ 28.6 23.7 % $ 28.5 23.7 % $ (0.1) — %

Restaurant labor 39.1 32.4 % 39.3 32.6 % 0.2 0.2 %

Restaurant expenses 35.8 29.6 % 34.6 28.7 % (1.2) (0.9) %

Depreciation and amortization 3.5 3.4 (0.1)

General and administrative 2.5 2.4 (0.1)

Other (gains) and charges 0.8 0.2 (0.6)

As a percentage of Company sales:

• 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 %

Franchise revenues 0.6 0.5 0.1 20.0 %

Total revenues $ 379.0 $ 372.0 $ 7.0 1.9 %

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:

Thirty-Nine Week Periods Ended Favorable (Unfavorable) Variance

March 26, 2025 March 27, 2024

September 24, 2025 September 25, 2024

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

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As a percentage of Company sales:

• 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 1.1%, 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.

• Maggiano’s Food and beverage costs were unfavorable 1.8%, due to 2.3% unfavorable menu item mix and 0.4% of unfavorable commodity costs primarily driven by meat and seafood, partially offset by 0.9% from menu pricing.

• Maggiano’s Restaurant labor was unfavorable 3.0%, due to 1.8% of sales deleverage, 0.5% of higher manager salaries, 0.3% of higher hourly labor, and 0.4% of higher other labor expenses.

• Maggiano’s Restaurant expenses were unfavorable 6.1%, due to 2.2% of sales deleverage, 1.3% of higher advertising, 1.0% of higher delivery fees and to-go supplies, 0.4% of higher repairs and maintenance, 0.4% of higher workers' compensation and general liability insurance, 0.3% of higher reimage related asset retirement loss, 0.2% of higher rent, and 0.3% of higher other restaurant expenses.

Liquidity and Capital Resources

Cash Flows from Operating Activities

Thirty-Nine Week Periods Ended Favorable (Unfavorable) Variance

2025 March 27,

Thirteen Week Periods Ended Favorable (Unfavorable) Variance

September 24,

2025 September 25,

Net cash provided by operating activities $ 120.8 $ 62.8 $ 58.0

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.

Net cash provided by operating activities increased due to an increase in operating income partially offset by an increase in payments of performance-based compensation and the timing of other operational receipts and payments.

Cash Flows from Investing Activities

Thirty-Nine Week Periods Ended Favorable (Unfavorable) Variance

2025 March 27,

Thirteen Week Periods Ended Favorable (Unfavorable) Variance

September 24,

2025 September 25,

Net cash used in investing activities $ (57.9) $ (56.5) $ (1.4)

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

Net cash used in investing activities increased compared to the prior year primarily due to increased spend on construction of new restaurants and spend related to Maggiano’s reimages, partially offset by decreased spend on capital maintenance and equipment.

Cash Flows from Financing Activities

Thirty-Nine Week Periods Ended Favorable (Unfavorable) Variance

2025 March 27,

Thirteen Week Periods Ended Favorable (Unfavorable) Variance

September 24,

2025 September 25,

Net cash used in financing activities $ (48.2) $ (54.7) $ 6.5

Net cash used in financing activities increased primarily due to increases in net repayments of long-term debt and share repurchase activity in fiscal 2025 compared to fiscal 2024.

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

Net cash used in financing activities decreased primarily due to an increase in net borrowings of long-term debt, partially offset by an increase in share repurchase activity in fiscal 2026 compared to fiscal 2025.

During the thirteen week period ended September 24, 2025, net borrowings of $90.0 million were drawn on the revolving credit facility.

As of September 24, 2025, $910.0 million of credit was available under the revolving credit facility.

Our $1.0 billion revolving credit facility, as amended, matures on May 1, 2030 and bears interest at a rate of SOFR plus an applicable margin of 1.25% to 2.00% and an undrawn commitment fee of 0.20% to 0.30%, both based on a function of our debt-to-cash-flow ratio.

As of September 24, 2025, our interest rate was 5.41% consisting of SOFR of 4.16% plus the applicable margin of 1.25%.

As of September 24, 2025, we were in compliance with our covenants pursuant to the $1.0 billion revolving credit facility and under the terms of the indentures governing our 8.25% notes.

We expect to remain in compliance with our covenants during the remainder of fiscal 2026.

Share Repurchase Program

Our Board of Directors approved a $300.0 million share repurchase program during fiscal 2022.

Our Board of Directors approved a $400.0 million increase in our share repurchase program in August 2025 allowing for a total available authority of $507.0 million.

Our share repurchase program is used to return capital to shareholders and to minimize the dilution to our shares outstanding that results from equity compensation grants.

We evaluate potential share repurchases under our plan based on several factors, including our cash position, share price, operational liquidity, proceeds from divestitures,

borrowings and planned investment and financing needs.

We evaluate potential share repurchases under our plan based on several factors, including our cash position, share price, operational liquidity, proceeds from divestitures, borrowings and planned investment and financing needs.

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

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.

In the thirteen week period ended September 24, 2025, we repurchased 0.9 million shares of our common stock for $134.5 million, including 0.6 million shares purchased for $92.0 million as part of our share repurchase program and 0.3 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 March 26, 2025, approximately $107.0 million of share repurchase authorization remains under the current share repurchase program.

As of September 24, 2025, approximately $415.0 million of share repurchase authorization remains under the current share repurchase program.

Cash Flow Outlook

In light of an unpredictable macroeconomy, including commodity and labor inflation and supply chain disruption, we continue to focus on cash flow generation and maintaining a solid and flexible financial position to execute our long-term strategy of investing in our business.

We continue to assess the macro environment and will adjust our overall approach to capital allocation, including share repurchases, based on market conditions and trends.

Based on the current level of operations, we believe that our current cash and cash equivalents, coupled with cash generated from operations and availability under our existing revolving credit facility will be adequate to meet our capital expenditure and working capital needs for at least the next twelve months.

Future Commitments and Contractual Obligations

In the thirteen week period ended September 24, 2025, we entered into long-term purchase obligations for various marketing programs, primarily media purchases.

Payments under these contracts are $18.0 million in fiscal 2026, $21.2 million in fiscal 2027, $21.1 million in fiscal 2028, and $4.4 million in fiscal 2029.

Critical Accounting Estimates

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What changed 10-Q

Item 2. Management’s Discussion and Analysis