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Item 1. Financial Statements

2026-08-12 compared with 2026-05-19 · 158 added, 73 removed, 376 unchanged (38% of the section changed)

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CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except for per share amounts) April 19, 2026 December 28, 2025

(in thousands, except for per share amounts) July 12, 2026 December 28, 2025

Current assets:

5 unchanged sentences

Restricted cash 9,675 9,615

Current assets held for sale 53,791 —

Total current assets $ 129,425 $ 88,943

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Intangible assets, net 7,952 9,155

Assets held for sale 2,263 2,263

Noncurrent assets held for sale — 2,263

Other assets, net 8,015 9,065

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22,050 shares issued;

18,252 and 18,009 shares outstanding as of April 19, 2026 and December 28, 2025

18,888 and 18,009 shares outstanding as of July 12, 2026 and December 28, 2025

Preferred stock, $ 0.001 par value:

3,000 shares authorized;

no shares issued and outstanding as of April 19, 2026 and December 28, 2025

no shares issued and outstanding as of July 12, 2026 and December 28, 2025

Treasury stock:

3,798 and 4,041 shares, at cost, as of April 19, 2026 and December 28, 2025

3,162 and 4,041 shares, at cost, as of July 12, 2026 and December 28, 2025

( 111,812 ) ( 143,247 )

9 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

Sixteen Weeks Ended

(in thousands, except for per share amounts) April 19, 2026 April 20, 2025

Twelve Weeks Ended Twenty-Eight Weeks Ended

(in thousands, except for per share amounts) July 12, 2026 July 13, 2025 July 12, 2026 July 13, 2025

Restaurant revenue $ 272,620 $ 279,305 $ 643,720 $ 665,115

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Depreciation and amortization 9,747 11,579 25,010 27,013

General and administrative (includes $ 1,664 and $ 2,589 of stock-based compensation)

General and administrative (includes $ 2,035 ;

and $ 4,078 of stock-based compensation)

17,627 17,418 40,719 44,408

Selling 10,366 6,350 23,613 15,726

Other (gains) charges, net (includes $ 0 and $( 225 ) of stock-based compensation)

Other (gains) charges, net (includes $ 0 ;

and $( 4,093 ) of stock-based compensation)

1,119 ( 256 ) 5,949 420

Total costs and expenses $ 271,397 $ 273,888 $ 644,172 $ 657,178

8 unchanged sentences

Income tax (benefit) expense

$ ( 9 ) $ ( 97 ) $ 20 $ ( 99 )

Net income (loss) $ 386 $ 3,993 $ ( 1,792 ) $ 5,242

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Balance, April 19, 2026 22,050 $ 22 3,798 $ ( 134,573 ) $ 206,377 $ ( 60 ) $ ( 178,421 ) $ ( 106,655 )

Issuance of restricted stock, shares exchanged for exercise and tax, and stock issued through employee stock purchase plan — — ( 636 ) 22,761 ( 22,575 ) — — 186

Non-cash stock compensation — — — — 495 — — 495

Net income (loss) — — — — — — 386 386

Other comprehensive income (loss) — — — — — ( 2 ) — ( 2 )

Balance, July 12, 2026 22,050 $ 22 3,162 $ ( 111,812 ) $ 184,297 $ ( 62 ) $ ( 178,035 ) $ ( 105,590 )

(1) Represents the reclassification of at-the-market equity offering issuance costs from equity to other (gains) charges upon termination of the offering.

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Other comprehensive income (loss) — — — — — 2 — 2

— — — — — 2 — 2

Balance, April 20, 2025 22,050 $ 22 4,312 $ ( 152,944 ) $ 224,280 $ ( 60 ) $ ( 151,710 ) $ ( 80,412 )

Issuance of restricted stock, shares exchanged for exercise and tax, and stock issued through employee stock purchase plan — — ( 148 ) 5,299 ( 5,069 ) — — 230

Non-cash stock compensation — — — — ( 2,454 ) — — ( 2,454 )

Net income (loss) — — — — — — 3,993 3,993

Balance, July 13, 2025 22,050 $ 22 4,164 $ ( 147,645 ) $ 216,757 $ ( 60 ) $ ( 147,717 ) $ ( 78,643 )

See Notes to Condensed Consolidated Financial Statements.

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Sixteen Weeks Ended

(in thousands) April 19, 2026 April 20, 2025

Twenty-Eight Weeks Ended

(in thousands) July 12, 2026 July 13, 2025

Cash Flows From Operating Activities:

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Non-cash other (gains) charges

( 1,224 ) ( 3,926 )

Stock-based compensation expense 3,699 ( 89 )

Gain on sale of restaurant property

( 900 ) ( 1,137 )

Amortization of debt issuance cost 1,912 2,021

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$ ( 5,434 ) $ ( 22,987 )

Effect of exchange rate changes on cash $ — $ 2

Net change in cash and cash equivalents, and restricted cash $ 2,985 $ ( 5,858 )

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Red Robin Gourmet Burgers, Inc., a Delaware corporation, is the parent company for Red Robin International, Inc., a Nevada corporation, that together with its subsidiaries ("Red Robin," "we," "us," "our," or the "Company"), primarily operates, franchises, and develops casual dining restaurants in North America.

As of April 19, 2026, the Company owned and operated 379 restaurants located in 39 states.

As of July 12, 2026, the Company owned and operated 375 restaurants located in 39 states.

The Company also had 90 casual dining restaurants operated by franchisees in 13 states and one Canadian province.

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and to disaggregate amortization of debt issuance costs from other, net.

Stock-based Compensation Awards Granted

During the first quarter of fiscal 2026, the Company issued 789,381 phantom award units under its 2024 Performance Incentive Plan Phantom Unit (Phantom RSU) Award Agreement, valued at $ 3.12 per unit.

These awards vest over two to three years and have a service based vesting condition.

The Company also issued 361,082 phantom award units under its 2024 Performance Incentive Plan Phantom Unit (Phantom PSU) Award Agreement in the first quarter of fiscal 2026, valued at $ 3.12 per unit.

These awards vest over three years and have performance based and service based vesting conditions.

Additionally, in the first quarter of fiscal 2026, the Company issued 100,000 cash-settled stock appreciation rights under its 2024 Performance Incentive Plan Stock Appreciation Rights (SAR) Award Agreement, valued at $ 4.05 per award.

These awards vest over one year and have performance based and service based vesting conditions.

Finally, the Company also issued 250,000 restricted stock units under its 2024 Performance Incentive Plan Restricted Stock Unit (RSU) Award Agreement in the first quarter of fiscal 2026, valued at $ 3.12 per unit.

These awards vest over one year and have a service based vesting condition.

The phantom award units and the cash-settled stock appreciation rights are liability-classified awards and are included within other non-current liabilities on the Company's Condensed Consolidated Balance Sheets.

The Restricted Stock Units are equity-classified awards and are included within paid-in capital on the Company's Condensed Consolidated Balance Sheets.

Recently Issued and Recently Adopted Accounting Standards

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The Company is currently evaluating the impact of the adoption of ASU 2025-06 to the Consolidated Financial Statements.

In November 2024, the FASB issued ASU 2024-03 which expands disclosures about specific expense categories presented on the face of the income statement.

ASU 2024-03 is effective for financial statements issued for annual periods beginning after December 15, 2026, with early adoption permitted.

In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income (Topic 220):

Expense Disaggregation Disclosures (Subtopic 220-40), which expands disclosures about specific expense categories presented on the face of the income statement.

ASU 2024-03 is effective for financial statements issued for annual periods beginning after December 15, 2026, with interim reporting requirements beginning after December 15, 2027, with early adoption permitted.

The Company is evaluating the impact of the adoption of ASU 2024-03 on the Consolidated Financial Statements.

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In the following table, revenue is disaggregated by type of good or service (in thousands):

Sixteen Weeks Ended

April 19, 2026 April 20, 2025

Twelve Weeks Ended Twenty-Eight Weeks Ended

July 12, 2026 July 13, 2025 July 12, 2026 July 13, 2025

Restaurant revenue $ 272,620 $ 279,305 $ 643,720 $ 665,115

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Components of unearned revenue in the Condensed Consolidated Balance Sheets are as follows (in thousands):

April 19, 2026 December 28, 2025

July 12, 2026 December 28, 2025

Unearned gift card revenue $ 12,699 $ 24,096

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Revenue recognized in the Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) for the redemption and breakage of gift cards that were included in the liability balance at the beginning of the fiscal year was as follows (in thousands):

Sixteen Weeks Ended

April 19, 2026 April 20, 2025

Twelve Weeks Ended Twenty-Eight Weeks Ended

July 12, 2026 July 13, 2025 July 12, 2026 July 13, 2025

Gift card revenue $ 1,423 $ 1,812 $ 12,773 $ 12,516

Changes in our unearned revenue balance related to our Royalty program (in thousands):

Sixteen Weeks Ended

April 19, 2026 April 20, 2025

Twelve Weeks Ended Twenty-Eight Weeks Ended

July 12, 2026 July 13, 2025 July 12, 2026 July 13, 2025

Unearned Royalty revenue, beginning balance

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$ 3,169 $ 3,032 $ 3,169 $ 3,032

Significant Transactions

Pending Refranchising Transactions

During the second quarter of fiscal 2026, the Company entered into three separate asset purchase agreements ("APA") with unrelated franchisees for the sale of certain assets associated with 116 Company-owned restaurants.

On May 27, 2026, Red Robin International, Inc.

("RRI"), a wholly owned subsidiary of the Company, entered into an APA with Evergreen Dining LLC to sell certain restaurant assets associated with 30 Company-owned restaurants located in Washington and Western Idaho for aggregate consideration of $ 23.5 million.

On June 11, 2026, RRI entered into an APA with Op Burgers, LLC to sell certain restaurant assets associated with 69 Company-owned restaurants located in Indiana, Kentucky, Maryland, North Carolina, Ohio, Pennsylvania, South Carolina and Virginia for aggregate consideration of $ 62.5 million.

Also on June 11, 2026, RRI entered into an APA with Kuber Oregon, LLC and Kuber Washington, LLC to sell certain restaurant assets associated with 17 Company-owned restaurants located in Oregon and Washington for aggregate consideration of $ 10.0 million.

The transactions are subject to customary closing conditions, including, as applicable, required landlord consents, lease assignments, regulatory and licensing approvals, the receipt of any required lender consent, and other restaurant-specific closing requirements.

Each transaction is subject to separate closing conditions and may close independently or in phases.

The Company expects the transactions to close during fiscal 2026;

however, there can be no assurance that any or all of the transactions will be completed on the anticipated terms or within the anticipated timeframe.

The aggregate gross cash proceeds from each of the three transactions are subject to customary purchase-price and closing adjustments.

The Company intends to use the net proceeds primarily to repay outstanding borrowings and for general corporate purposes.

Upon closing, the restaurants will continue to operate as Red Robin restaurants pursuant to long-term franchise agreements with the respective purchasers, and the Company expects to receive ongoing royalty and advertising fund contributions under those franchise agreements.

The Company may retain certain obligations associated with assigned or subleased restaurant leases, including potential secondary lease or guarantee obligations.

The estimated amount of any liabilities to be recognized for such continuing obligations has not yet been determined.

As of July 12, 2026, none of the transactions had closed.

In connection with the execution of the APAs described above, the Company evaluated the related restaurant disposal groups under the held-for-sale guidance in ASC 360, Property, Plant and Equipment.

As of July 12, 2026, management concluded that the restaurant disposal groups met the criteria for classification as held for sale.

Accordingly, $ 53.8 million of assets and $ 0.0 million of liabilities were classified as held for sale in the accompanying Condensed Consolidated Balance Sheet.

The Company evaluated the restaurant disposal groups at the lower of carrying amount or fair value less costs to sell in accordance with ASC 360.

Operating lease right-of-use assets and related lease liabilities were not classified as held for sale because the related lease assignment negotiations had not been completed as of July 12, 2026.

The Company continues to evaluate certain accounting effects of the transactions, including purchase price adjustments, transaction costs, lease-related balances and retained obligations.

The Company does not expect the transactions to qualify for discontinued operations presentation because they are not expected to represent a strategic shift that qualifies for discontinued operations presentation.

Sale-Leaseback Transactions

During the second quarter of fiscal 2026, the Company completed sale-leaseback transactions of two owned restaurant properties as part of its ongoing real estate optimization strategy.

Prior to closing, the Company evaluated the properties under the held-for-sale guidance in ASC 360, Property, Plant and Equipment, and measured each property at the lower of its carrying amount or fair value less costs to sell.

The Company determined that the transaction prices for both sales represented market value.

The Company recognized an impairment charge of $ 1.1 million related to one of the properties prior to closing, which had a carrying value of $ 3.2 million and generated gross proceeds of $ 2.1 million.

The second transaction had a carrying value of $ 2.3 million, generated gross proceeds of approximately $ 3.2 million, and resulted in a gain on sale, net of expenses, of $ 0.9 million.

Upon completion of the transactions, the Company derecognized the related assets and accounted for the resulting sale-leaseback transactions in accordance with ASC 842, Leases.

The net proceeds were included within cash flows from investing activities in the Condensed Consolidated Statements of Cash Flows and were used primarily for general corporate purposes.

The components of lease expense, including variable lease costs primarily consisting of common area maintenance charges and real estate taxes, are included in occupancy on our Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) as follows (in thousands):

Sixteen Weeks Ended

April 19, 2026 April 20, 2025

Twelve Weeks Ended Twenty-Eight Weeks Ended

July 12, 2026 July 13, 2025 July 12, 2026 July 13, 2025

Operating lease cost $ 16,437 $ 16,985 $ 38,428 $ 40,005

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Amortization of right of use assets (1)

215 216 502 454

Interest on lease liabilities (2)

69 91 180 218

Total finance lease cost $ 284 $ 307 $ 682 $ 672

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(2) Interest on finance lease liabilities is recorded to interest expense in our Condensed Consolidated Statements of Operations and Comprehensive Income (Loss).

Finance lease assets are recorded in other assets, net, and the net balance as of April 19, 2026 and April 20, 2025 were $ 4.2 million and $ 5.0 million, respectively.

Finance lease assets are recorded in other assets, net, and the net balances as of July 12, 2026 and July 13, 2025 were $ 4.0 million and $ 4.8 million, respectively.

Earnings (Loss) Per Share

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Potentially dilutive shares are excluded from the computation in periods in which they have an anti-dilutive effect.

Diluted earnings per share reflects the potential dilution that could occur if holders of unvested equity-classified awards vest and exercise their awards into common stock.

As the Company was in a net loss position for the sixteen week period ended April 19, 2026, all potentially dilutive common shares are considered anti-dilutive.

Diluted earnings per share amounts reflect the potential dilution that could occur if holders of unvested equity-classified awards vest and exercise their awards into common stock.

As the Company was in a net loss position for the twenty-eight weeks ended July 12, 2026, all potentially dilutive common shares for the year to date period are considered anti-dilutive.

The Company uses the treasury stock method to calculate the effect of outstanding stock options and awards.

Basic weighted average shares outstanding is reconciled to diluted weighted average shares outstanding as follows (in thousands):

Sixteen Weeks Ended

April 19, 2026 April 20, 2025

Basic weighted-average shares outstanding are reconciled to diluted weighted-average shares outstanding as follows (in thousands):

Twelve Weeks Ended Twenty-Eight Weeks Ended

July 12, 2026 July 13, 2025 July 12, 2026 July 13, 2025

Basic weighted-average shares outstanding 18,727 17,799 18,380 17,655

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Other (gains) charges, net consisted of the following (in thousands):

Sixteen Weeks Ended

April 19, 2026 April 20, 2025

Twelve Weeks Ended Twenty-Eight Weeks Ended

July 12, 2026 July 13, 2025 July 12, 2026 July 13, 2025

Asset impairment and restaurant closure costs, net $ 641 $ ( 1,615 ) $ 2,394 $ ( 1,405 )

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Severance and executive transition (1)

1,112 459 1,182 1,339

Litigation contingencies 33 11 120 23

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Other (gains) charges, net $ 1,119 $ ( 256 ) $ 5,949 $ 420

(1) Severance and executive transition included $ 0 and $( 225 ) of stock-based compensation (benefit) expense in the sixteen weeks ended April 19, 2026 and April 20, 2025, respectively.

(1) Severance and executive transition included $ 0 and $( 3,868 ) of stock-based compensation (benefit) expense in the twelve weeks ended July 12, 2026 and July 13, 2025, respectively, and $ 0 and $( 4,093 ) of stock-based compensation (benefit) expense in the twenty-eight weeks ended July 12, 2026 and July 13, 2025, respectively.

Asset Impairment and Restaurant Closure Costs, net

Asset impairment and restaurant closure costs, net consisted of the following (in thousands, except for location data):

Sixteen Weeks Ended

April 19, 2026 April 20, 2025

Twelve Weeks Ended Twenty-Eight Weeks Ended

July 12, 2026 July 13, 2025 July 12, 2026 July 13, 2025

Number of non-operating locations

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Non-cash impairment

$ 1,124 $ 720 $ 1,673 $ 720

Number of locations with lease remeasurement

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Gain on Sale of Restaurant Property

During the first quarter of fiscal 2025, the Company sold three restaurant properties for total proceeds of $ 5.8 million that resulted in a gain, net of expenses, of $ 1.1 million.

The net proceeds were included within cash flows from investing activities on the Condensed Consolidated Statements of Cash Flows for the first quarter of fiscal 2025 and were used to repay long-term debt.

During the second quarter and year to date period of fiscal 2026, the Company completed sale-leaseback transactions for two restaurant properties.

One transaction resulted in an impairment of $ 1.1 million, and the other transaction resulted in a gain, net of expenses, of $ 0.9 million.

The net proceeds are included within cash flows from investing activities on the Condensed Consolidated Statements of Cash Flows and were used for general corporate purposes and to repay long-term debt.

Significant Transactions for additional information regarding these sale-leaseback transactions.

During the second quarter of fiscal 2025, the Company did not sell any restaurant properties.

During the year to date period of fiscal 2025, the Company sold three restaurant properties for total proceeds of $ 5.8 million that resulted in a gain, net of expenses, of $ 1.1 million.

The net proceeds were included within cash flows from investing activities on the Condensed Consolidated Statements of Cash Flows for the year to date period of fiscal 2025 and were used to repay long-term debt.

Severance and Executive Transition

Severance and executive transition consisted of the following (in thousands):

Sixteen Weeks Ended

April 19, 2026 April 20, 2025

Twelve Weeks Ended Twenty-Eight Weeks Ended

July 12, 2026 July 13, 2025 July 12, 2026 July 13, 2025

Executive severance

$ 80 $ 3,060 $ 131 $ 4,159

Stock-based compensation (1)

— ( 3,868 ) — ( 4,093 )

Team member severance (2)

1,032 1,267 1,051 1,273

Total severance and executive transition

As of April 19, 2026 and April 20, 2025, $ 1.4 million and $ 0.5 million, respectively, was included in accrued payroll and payroll related liabilities in the Condensed Consolidated Balance Sheet related to the executive transition costs described above.

$ 1,112 $ 459 $ 1,182 $ 1,339

(1) For the twelve and twenty-eight weeks ended July 13, 2025, the Stock-based compensation benefit relates primarily to the forfeiture of unvested stock-based compensation by executive leadership.

(2) During the twenty-eight weeks ended July 12, 2026 and July 13, 2025, team member severance is primarily associated with a reduction in force, which occurred during the second quarter of fiscal 2026 and 2025.

For the twenty-eight weeks ended July 12, 2026 and July 13, 2025, $ 1.9 million and $ 4.3 million, respectively, were included in accrued payroll and payroll related liabilities in the Condensed Consolidated Balance Sheet related to the executive transition costs described above.

Litigation Contingencies

For the sixteen weeks ended April 19, 2026 and April 20, 2025, the Company recorded certain accruals associated with litigation contingencies.

For the twenty-eight weeks ended July 12, 2026 and July 13, 2025, the Company recorded certain accruals associated with litigation contingencies.

Commitments and Contingencies, for further discussion.

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No shares were issued or sold under the program.

The Company incurred $ 0.5 million of related stock issuance costs, which were initially recorded within paid-in capital on the December 28, 2025 Consolidated Balance Sheet, and subsequently reclassified to other (gains) charges, net within the Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) as of April 19, 2026 upon termination of the offering.

Borrowings as of April 19, 2026 and December 28, 2025 are summarized below (in thousands):

April 19, 2026 December 28, 2025

Borrowings as of July 12, 2026 and December 28, 2025 are summarized below (in thousands):

July 12, 2026 December 28, 2025

Borrowings Variable

Interest Rates

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Credit Facility

As of April 19, 2026, the Company's credit facility allowed for up to $ 225.0 million of borrowings and is comprised of a $ 25.0 million revolving line of credit and a $ 200.0 million term loan (collectively, the "Credit Facility").

As of April 19, 2026 and December 28, 2025, the Company had outstanding borrowings of $ 175.7 million and $ 170.2 million, respectively, inclusive of $ 8.5 million and $ 3.0 million drawn on its revolving line of credit, respectively, under its Credit Facility.

In addition, the Company had amounts issued under letters of credit of $ 9.3 million and $ 9.3 million as of April 19, 2026 and December 28, 2025, respectively.

As of July 12, 2026, the Company's credit facility allowed for up to $ 225.0 million of borrowings and is comprised of a $ 25.0 million revolving line of credit and a $ 200.0 million term loan (collectively, the "Credit Facility").

As of July 12, 2026 and December 28, 2025, the Company had outstanding borrowings of $ 167.2 million and $ 170.2 million, respectively, inclusive of $ 0.0 million and $ 3.0 million drawn on its revolving line of credit, respectively, under its Credit Facility.

In addition, the Company had amounts issued under letters of credit of $ 9.3 million and $ 9.3 million as of July 12, 2026 and December 28, 2025, respectively.

The Credit Facility will mature on September 3, 2027.

The term loans require quarterly principal payments in an aggregate annual amount equal to 1.0 % of the original principal amount of the term loan.

As of April 19, 2026, the Company has fulfilled this obligation for the duration of the Credit Facility via previous principal payments.

The term loan requires quarterly principal payments in an aggregate annual amount equal to 1.0 % of its original principal amount.

As of July 12, 2026, the Company has fulfilled this obligation for the duration of the Credit Facility via previous principal payments.

The Credit Facility's interest rate references the Secured Overnight Financing Rate ("SOFR"), which is an index calculated by short-term repurchase agreements and backed by U.S.

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The summary descriptions of the Credit Agreement, the Security Agreement, the First Amendment, the Second Amendment, the Third Amendment, and the Fourth Amendment do not purport to be complete and are qualified in their entirety by reference to the full text of each agreement, which are listed as exhibits to the Annual Report on Form 10-K filed February 25, 2026.

Stock Incentive Plans

The Company maintains the 2024 Performance Incentive Plan (the "2024 Stock Plan"), under which it may grant restricted stock units ("RSUs"), performance stock units ("PSUs"), phantom restricted stock units ("PRSUs"), phantom performance stock units ("PPSUs"), stock appreciation rights ("SARs"), and other stock-based awards to employees, non-employee directors and consultants.

Additional information regarding the Company's stock incentive plans is included in Note 14.

Stock Incentive Plans, in the Company's Annual Report on Form 10-K for the fiscal year ended December 28, 2025.

Awards Granted

The following table summarizes stock-based awards granted during the first and second quarters of fiscal 2026:

Sixteen Weeks Ended April 19, 2026

Twelve Weeks Ended July 12, 2026

Award Type Awards Granted Weighted-Average Grant-Date Fair Value Awards Granted Weighted-Average Grant-Date Fair Value

Equity-classified awards

Restricted stock units (RSUs) 250,000 $ 3.12 279,927 $ 4.08

Performance stock units (PSUs) — $ — 79,155 $ 5.64

Liability-classified awards

Phantom restricted stock units (PRSUs) 789,381 $ 3.12 1,231 $ 7.73

Phantom performance stock units (PPSUs) 361,082 $ 3.12 — $ —

Cash-settled stock appreciation rights (SARs) 100,000 $ 4.05 — $ —

During the first and second quarters of fiscal 2026, the Company granted equity-classified awards under the 2024 Stock Plan.

The RSUs vest over one to three years and have a service-based vesting condition.

The PSUs vest over three years and have performance-based and service-based vesting conditions.

Equity-classified awards are included within paid-in capital on the Company's Condensed Consolidated Balance Sheets.

During the first and second quarters of fiscal 2026, the Company also granted liability-classified awards under the 2024 Stock Plan.

The PRSUs vest over two to three years and have a service-based vesting condition.

The PPSUs vest over three years and have performance-based and service-based vesting conditions.

Cash-settled SARs vest over one year and have performance-based and service-based vesting conditions.

Liability-classified awards are included within accrued liabilities and other and other non-current liabilities on the Company's Condensed Consolidated Balance Sheets.

Fair Value Measurements

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The Company maintains a rabbi trust to fund obligations under a deferred compensation plan, which are designated as trading securities and carried at fair value.

The Company terminated its deferred compensation plan effective October 23, 2025, with no new deferral election allowed.

The Company terminated its deferred compensation plan effective October 23, 2025, with no new deferral elections allowed.

All assets will be fully distributed by the end of fiscal 2026.

Given the termination of the deferred compensation plan and scheduled distribution within this current fiscal year, the plan's assets and liabilities have been classified as current in the April 19, 2026 Condensed Consolidated Balance Sheets within prepaid expenses and other current assets and accrued liabilities and other, respectively.

The fair market value of the mutual funds is measured using Level 1 inputs (quoted prices for identical assets in active markets) and was $ 1.6 million and $ 1.9 million as of the first quarter of fiscal 2026 and the fourth quarter of fiscal 2025, respectively.

Given the termination of the deferred compensation plan and scheduled distribution within this current fiscal year, the plan's assets and liabilities have been classified as current in the July 12, 2026 Condensed Consolidated Balance Sheets within prepaid expenses and other current assets and accrued liabilities and other, respectively.

The fair market value of the mutual funds is measured using Level 1 inputs (quoted prices for identical assets in active markets) and was $ 1.8 million and $ 1.9 million as of the second quarter of fiscal 2026 and the fourth quarter of fiscal 2025, respectively.

The Company also has liability-classified stock compensation awards that are measured at fair value on a recurring basis and are included in accrued liabilities and other and other non-current liabilities in the Condensed Consolidated Balance Sheets.

PRSUs are measured using Level 1 inputs, and PPSUs and SARs are measured using Level 3 inputs.

The aggregate fair value of these liabilities was approximately $ 2.1 million and $ 0.3 million as of July 12, 2026 and December 28, 2025, respectively.

Refer to Note 8.

Stock Incentive Plans, for additional information regarding these awards and the related fair value measurements.

Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis

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These assets are measured at fair value if determined to be impaired.

During fiscal 2026 and fiscal 2025, the Company measured non-financial assets for impairment using continuing and projected future cash flows, which were based on significant inputs not observable in the market and thus represented a Level 3 fair value measurement.

During the first quarter of fiscal 2026, the Company impaired long-lived assets at one restaurant location with a carrying value of approximately $ 0.5 million.

During fiscal 2026 and fiscal 2025, the Company measured non-financial assets for impairment using either (i) projected future cash flows for assets held and used or (ii) the negotiated purchase price in executed asset purchase agreements with unrelated market participants, adjusted for estimated costs to sell, for assets classified as held for sale.

These valuation techniques incorporated significant unobservable inputs and therefore represented Level 3 fair value measurements.

During the second quarter of fiscal 2026, the Company recorded an impairment charge related to the sale of one restaurant location.

The carrying value of the restaurant's long-lived assets was approximately $ 3.2 million.

The net proceeds for this transaction were $ 2.1 million, resulting in a $ 1.1 million impairment charge.

During the second quarter of fiscal 2025, the Company impaired long-lived assets at one restaurant location with a carrying value of approximately $ 0.7 million.

The fair value of these long-lived assets was determined to be $ 0.0 million, resulting in a $ 0.7 million impairment charge.

There was no impairment recorded during the first quarter of fiscal 2025.

Disclosures of Fair Value of Other Assets and Liabilities

The carrying value of our variable rate Credit Facility, which utilizes Level 2 fair value inputs, approximated fair value as of April 19, 2026 and December 28, 2025, as such debt bears interest at floating rates which approximate market rates.

The carrying value of our variable rate Credit Facility, which utilizes Level 2 fair value inputs, approximated fair value as of July 12, 2026 and December 28, 2025, as such debt bears interest at floating rates which approximate market rates.

Commitments and Contingencies

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However, the ultimate resolution of litigated claims may differ from our current estimates.

As of April 19, 2026, we had reserves of $ 5.6 million for loss contingencies included within Accrued liabilities and other on our Condensed Consolidated Balance Sheet.

We increased our estimate of loss contingency liabilities by approximately $ 0.1 million in the first quarter of fiscal 2026 related to ongoing legal matters.

As of July 12, 2026, we had reserves of $ 5.6 million for loss contingencies included within Accrued liabilities and other on our Condensed Consolidated Balance Sheet.

We increased our estimate of loss contingency liabilities by approximately $ 0.1 million in the year to date period of fiscal 2026 related to ongoing legal matters.

In the normal course of business, there are various claims in process, matters in litigation, administrative proceedings, and other contingencies.

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We ultimately may be subject to greater or less than the accrued amount for this and other matters.

As of April 19, 2026, we had non-cancellable purchase commitments primarily related to certain vendors who provide food and beverage and other supplies to our restaurants, for an aggregate of $ 188.3 million.

As of July 12, 2026, we had non-cancellable purchase commitments primarily related to certain vendors who provide food and beverage and other supplies to our restaurants, for an aggregate of $ 194.2 million.

We expect to fulfill our commitments under these agreements in the normal course of business, and as such, no liability has been recorded.

The Company has a potential contingent lease liability for lease payments related to certain franchisees’ lease arrangements.

The maximum amount of potential future payments under the potential contingent lease liability was $ 2.8 million and $ 3.0 million as of April 19, 2026 and December 28, 2025, respectively.

The Company has a potential contingent lease liability for lease payments related to certain current franchisees’ lease arrangements.

The maximum amount of potential future payments under the potential contingent lease liability was $ 2.6 million and $ 3.0 million as of July 12, 2026 and December 28, 2025, respectively.

The Company does not believe these arrangements have or are likely to have a material effect on its results of operations, financial condition, revenues or expenses, capital expenditures or liquidity.

12 unchanged sentences

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What changed 10-Q

Item 1. Financial Statements