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Item 7. Management’s Discussion and Analysis

2026-02-27 compared with 2025-02-27 · 153 added, 507 removed, 278 unchanged (70% of the section changed)

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In a 53-week fiscal year, the first, second, and third fiscal quarters each include 13 weeks of operations, and the fourth fiscal quarter includes 14 weeks of operations.

Fiscal year 2024, 2023, and 2022 results for AUV and Same-Store Sales Change have been adjusted.

See the subsections titled “—Key Performance Metrics” and “—Quarterly Results of Operations” for more information, including a description of the adjustments made to, and the unadjusted values for, AUV and Same-Store Sales Change for the periods presented.

A discussion regarding our financial condition and results of operations for the year ended December 28, 2025, compared to the year ended December 29, 2024, is presented below.

A discussion regarding our financial condition and results of operations for the year ended December 29, 2024, compared to the year ended December 31, 2023, can be found in Item 7.

“Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 29, 2024, filed with the SEC on February 27, 2025.

We are a mission-driven, next generation restaurant and lifestyle brand that serves healthy food at scale.

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As of December 28, 2025, we owned and operated 281 restaurants in 24 states and Washington, D.C.

Factors Affecting Our Business

Expanding Restaurant Footprint

Opening new restaurants, including those with Infinite Kitchen technology, is an important driver of our revenue growth.

In fiscal years 2024, 2023, and 2022, we had 25, 35, and 36 Net New Restaurant Openings, respectively, bringing our total count as of December 29, 2024 to 246 restaurants in 22 states and Washington, D.C.

We are still in the very nascent stages of our journey, and one of our greatest immediate opportunities is to grow our footprint in both existing and new U.S.

In fiscal years 2025, 2024, and 2023, we had 35, 25, and 35 Net New Restaurant Openings.

One of our strategies is to grow our footprint in both existing and new U.S.

markets and, over time, internationally.

Real Estate Selection

We utilize a rigorous, data-driven real estate selection process to identify the location and timing of opening new restaurants, both in new and existing U.S.

markets and in urban and suburban areas, with high anticipated foot or vehicle traffic and proximity to workplaces, residences and other restaurant and retail businesses that support our multi-channel approach, including our Native Delivery, Marketplace Delivery, and Outpost and Catering Channels.

Macroeconomic Conditions, Inflation, and Supply Chain Constraints

Consumer spending on food outside the home fluctuates with macroeconomic conditions.

Consumers tend to allocate higher spending to food outside the home when macroeconomic conditions are stronger, and reduce spending on food outside the home during weaker economies.

Our customers have in the past demonstrated a willingness to pay a premium for a craveable, convenient, and healthier alternative to traditional fast-food and

fast-casual offerings.

However, as a premium offering in the fast-casual industry, we are exposed both to consumers trading the convenience of food away from home for the cost benefit of cooking, and to consumers selecting less expensive fast-casual alternatives during weaker economic periods.

While we have historically been able to partially offset inflation and other increases in the costs of core operating resources, such as wage increases and increases in cost of goods sold, by gradually increasing menu prices or other customer fees, such as service fees and delivery fees, coupled with more efficient purchasing practices, productivity improvements, and greater economies of scale, there can be no assurance that we will be able to continue to do so in the current macroeconomic environment or regulatory environment or in the future.

In particular, current and future macroeconomic conditions could cause additional menu price increases to negatively impact our Same Store Sales Growth.

There can be no assurance that any future cost increases, including as a result of inflation, can be offset by increased menu prices or that our current or future menu prices will be fully absorbed by our customers without any resulting change to their demand for our products.

We continue to see variability in our customer traffic patterns, including as a result of fluctuations in return to office as a result of many workplaces adopting remote or hybrid models and we expect this variability to continue for the foreseeable future.

I n fiscal year 2023, we experienced supply chain disruptions for our bowls and plates, which resulted in the use of alternative packaging solutions.

Also, our bowls and plates are produced outside the United States, and may be subject to new or increased taxes, tariffs, or duties in connection with the importation of those items into the United States.

Any such new or increased taxes, tariffs, or duties may significantly increase the price that we must pay for such items.

During fiscal year 2024, we began offering steak as a new protein to our menu, which adds a new ingredient for our customer base.

With the introduction of beef on our menu, we have experienced and could continue to experience an increase in commodity costs.

Our revenue fluctuates as a result of seasonal factors and weather conditions.

Historically, our revenue has been lower in the first and fourth fiscal quarters of the year due, in part, to the holiday season and the fact that fewer people eat out during periods of inclement weather (generally the winter months, though inclement weather conditions may occur in certain markets at any time of the year) than during periods of mild to warm weather (the spring, summer, and fall months).

In addition, a core part of our menu, salads, has proven to be more popular among consumers in the warmer months.

In recent years, as consumer behavior trends have changed, due in part to the emergence of hybrid or remote work environments, the seasonality in our business has been less predictable than in prior years.

We have seen an increase and prolonged negative impact on our revenue around national holidays.

Additionally, we have seen extreme weather conditions and natural disasters, such as the wild fires in Los Angeles, cause disruptions to our operations and impact to our first quarter 2025 results.

As of the end of fiscal year 2025, we utilized the Infinite Kitchen, a kitchen automation technology in 30 of our 281 restaurants.

We incorporate the Infinite Kitchen technology into new and existing restaurants based, in large part, upon our evaluation of the potential economic and other benefits for those restaurants.

We deployed units of the Infinite Kitchen in 18 of our new restaurants during fiscal year 2025 and 10 of our restaurants during fiscal year 2024.

We continue to learn from these deployments and are incorporating our findings into future deployments.

As a premium offering in the fast-casual industry, we are exposed both to consumers trading the convenience of food away from home for the cost benefit of cooking, and to consumers selecting less expensive fast-casual alternatives during weaker economic periods.

We have been impacted by a decrease in consumer spending during fiscal year 2 025, which we expect to continue at least in the near term.

As we focus on discipline with respect to costs and allocation of capital in connection with the Sweet Growth Transformation Plan, we will be opening fewer restaurants in the near term.

In fiscal year 2026, we expect approximately 15 Net New Restaurant Openings, with about half featuring Infinite Kitchen units.

We have historically been able to partially offset rising costs - including inflation, tariffs, wage increases and increases in cost of goods sold - through gradual menu price increases, customer service and delivery fees, and operational efficiencies .

There can be no assurance that we will be able to continue this practice in the current or future macroeconomic or regulatory environment.

We also continue to see variability in our customer traffic patterns, including as a result of many workplaces adopting remote or hybrid models, which has shifted sales away from our In-Store Channel.

Our Native Delivery, Outpost and Catering, and Marketplace Channels carry

higher costs due to third-party fees, elevated refund rates, and promotional activity, and a continued shift in sales mix toward these channels could pressure margins.

However, we expect margins on these channels to improve over time as we achieve greater scale.

For fiscal year 2025, tariffs had minimal net impact on our average new unit development cost due to mitigation efforts including advance purchasing, strategic sourcing, and favorable trade policy changes.

We expect to continue to be able to mitigate most of these costs in future periods.

For Infinite Kitchen units, the impact of tariffs in fiscal year 2025 was mitigated, in part, by our prepurchase of certain key materials.

Tariffs increased the cost of Infinite Kitchen units by approximately 5% in fiscal year 2025.

Going forward, we expect the cost of Infinite Kitchen units to modestly increase when taking into account the expected continuing impact of tariffs and additional amounts due to Wonder pursuant to our supply agreement with Wonder described below.

Management remains committed to mitigating the impact of tariff costs across our supply chain, restaurant build-outs and equipment through ongoing sourcing and cost-optimization strategies that we and our suppliers have implemented.

Any future changes to the U.S.

government’s trade policies may impact these estimates.

Recent Developments

On December 29, 2025, subsequent to fiscal year 2025 year end, we sold Spyce and certain assets relating to the Infinite Kitchen and other related kitchen automation technology and agreed to provide certain transition services to Wonder (such transaction, the “Spyce Sale”).

At the time of the sale, we entered into a supply agreement and a license agreement in which Wonder has agreed to sell Infinite Kitchen units to us on a long-term basis and provide certain services related to the Infinite Kitchen units, including commissioning, support and maintenance.

Sales Channel Mix

Our revenue is derived from sales of food and beverage to customers through our five sales channels.

In-Store Channel, Pick-Up Channel, Native Delivery Channel, Marketplace Channel, and Outpost and Catering Channel.

There have been historical fluctuations in the mix of sales between our various channels.

Due to the fact that our Native Delivery, Outpost and Catering , and Marketplace Channels require the payment of third-party fees in order to fulfill deliveries, sales through these channels have historically negatively impacted our margins.

Additionally, historically, orders on our Native Delivery, Outpost and Catering and Marketplace Channels have resulted in a higher rate of refunds and credits than our In-Store and Pick-Up Channels, which has a negative impact on revenue from these channels.

We have also historically prioritized promotions and discounts on our Owned Digital Channels, which also reduces revenue from these channels.

If we see a shift in sales through the Native Delivery, Outpost and Catering , and Marketplace channels, our margins may decrease.

However, over time, we expect that our margins will improve on our Native Delivery, Outpost and Catering , and Marketplace Channels as we scale each of these channels.

Key Performance Metrics and Non-GAAP Financial Measures

We track the following key performance metrics and non-GAAP financial measures to evaluate our performance, identify trends, formulate financial projections, and make strategic decisions.

We believe that these key performance metrics, which include certain non-GAAP financial measures, provide useful information to investors and others in understanding and evaluating our results of operations in the same manner as our management team.

These key performance metrics and non-GAAP financial measures are presented for supplemental informational purposes only, should not be considered a substitute for financial information presented in accordance with GAAP, and may be different from similarly titled metrics or measures presented by other companies.

We own and operate all of these channels other than our Marketplace Channel, which is operated by various third-party delivery marketplaces.

In-Store Channel.

Sales to customers who make in-store purchases in our restaurants.

Purchases made via cash or credit card are referred to as 'Non-Digital' transactions.

Purchases made via digital scan-to-pay or via digital scan-to-earn and scan-to-redeem associated with our SG Rewards loyalty program are included as part of our Owned Digital Channels (defined below) .

Marketplace Channel.

Sales to customers for delivery or pick-up made through third-party delivery marketplaces.

Native Delivery Channel.

Sales to customers for delivery made through the Sweetgreen website or mobile app.

Outpost and Catering Channel.

Sales to customers for delivery made through the Sweetgreen website or mobile app to our Outposts, which are our designated offsite drop-off points at offices, residential buildings, and hospitals.

In addition, our Outpost and Catering Channel includes our catering offerings, which refer to sales to customers made through our catering website for pickup at one of our restaurants or delivery to a customer-specified address.

Pick-Up Channel.

Sales to customers made for pick-up at one of our restaurants through the Sweetgreen website or mobile app.

Key Performance Metrics

We track the following key performance metrics to evaluate our performance, identify trends, formulate financial projections, and make strategic decisions.

We believe that these key performance metrics provide useful information to investors and others in understanding and evaluating our results of operations in the same manner as our management team.

These key performance metrics are presented for supplemental

informational purposes only, should not be considered a substitute for financial information presented in accordance with accounting principles generally accepted in the United States of America (“ GAAP”), and may be different from similarly titled metrics or measures presented by other companies.

Fiscal Year Ended

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Same-Store Sales Change (as adjusted) (%) (3)(4)

(7.9%) 6.2% 4.4%

Total Digital Revenue Percentage

61.8% 56.4% 58.6%

Owned Digital Revenue Percentage

34.6% 30.4% 36.4%

(1) We operate on a 52/53 week fiscal year end that ends on the last Sunday of the calendar year.

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Fiscal year 2023 was a 53-week year with the extra operating week (the “53rd week”) falling in our fourth fiscal quarter.

(2) As a result of material, temporary closures of certain stores during the applicable periods, we excluded one restaurant from the Comparable Restaurant Base as of the end of fiscal year 2024, no restaurants as of the end of fiscal year 2023, and two restaurants as of the end of fiscal year 2022.

(2) As a result of material, temporary closures of certain stores during the applicable periods, we excluded three restaurants from the Comparable Restaurant Base as of the end of fiscal year 2025 and one restaurant as of the end of fiscal year 2024.

Such adjustments did not result in a material change to AUV.

(3) For fiscal year 2023, Average Unit Volume and Same-Store Sales Change were adjusted to exclude the 53rd week of operations.

No restaurants were excluded as of the end of fiscal year 2023.

(3) For fiscal year 2023, Average Unit Volume and Same-Store Sales Change were adjusted to exclude the 53rd week of operations for comparative purposes.

See below under “Average Unit Volume” and “Same-Store Sales Change” additional details.

(4) Our results for the fiscal year ended December 28, 2025 have been adjusted to reflect the temporary closures of 15 restaurants and permanent closures of three restaurants, which were excluded from the calculation of Same-Store Sales change.

Our results for the fiscal year ended December 29, 2024 have been adjusted to reflect the temporary closures of 8 restaurants, which were excluded from the calculation of Same-Store Sales change.

Our results for the fiscal year ended December 31, 2023 have been adjusted to reflect the temporary closures of two restaurants, which were excluded from the calculation of Same-Store Sales change.

Our results for the fiscal year ended December 25, 2022, have been adjusted to reflect the temporary closures of 6 restaurants.

Such adjustments did not have a material impact on our Same-Store Sales Change for 2025, 2024, or 2023.

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Net New Restaurant Openings reflect the number of new Sweetgreen restaurant openings during a given reporting period, net of any permanent Sweetgreen restaurant closu res during the same given period.

Before we open new restaurants, we incur pre-opening costs, as further described below.

During fiscal year 2025, we plan to integrate our Infinite Kitchen into approximately half of our new restaurants.

Before we open new restaurants, we incur pre-opening costs.

Average Unit Volume

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Fiscal year 2023 was a 53-week year, and in order to provide a measurement period that is consistent with comparable periods that span a 52-week year, rather than simply excluding the extra week, we applied an averaging methodology to the last period of fiscal 2023 to adjust for the extra week.

Comparable Restaurant Base.

Comparable Restaurant Base for any measurement period is defined as all restaurants that have operated for at least twelve full months as of the end of such measurement per iod, other than any restaurants that had a material, temporary closure during the relevant measurement period.

We excluded one restaurant from the Comparable Restaurant Base as of the end of fiscal year 2024, no restaurants as of the end of fiscal year 2023, and two restaurants as of the end of fiscal year 2022.

A restaurant is considered to have had a material, temporary closure if it had no operations for a consecutive period of at least 30 days.

We excluded three restaurants from the Comparable Restaurant Base as of the end of fiscal year 2025, and one restaurant as of the end of fiscal year 2024.

Such exclusions did not result in a material change to AUV.

No restaurants were excluded from the Comparable Restaurant Base as of the end of fiscal year 2023.

Same-Store Sales Change

Same-Store Sales Change reflects the percentage change in year-over-year revenue for the relevant fiscal period for all restaurants that have operated for at least 13 full fiscal months as of the end of such fiscal period excluding the 53rd week in any 53-week fiscal year;

corresponding fiscal month for the prior or current fiscal year, as applicable, will be excluded when calculating Same-Store Sales Change for that restaurant.

provided, that for any restaurant that has had a temporary closure (which historically has been defined as a closure of at least five days during which the restaurant would have otherwise been open) during any prior or current fiscal month, such fiscal month, as well as the corresponding fiscal month for the prior or current fiscal year, as applicable, will be excluded when calculating Same-Store Sales Change for that restaurant.

Fiscal year 2023 was a 53-week year, which resulted in a misalignment in our comparable weeks in fiscal year 2024.

To adjust for this misalignment, in calculating Same-Store Sales Change for each fiscal quarter and the full fiscal year 2024, we shifted each week within fiscal year 2023 forward by one week to better align with the 2024 calendar year, specifically to match the timing of holidays and achieve a more accurate comparable Same-Store Sales Change to the prior period.

During fiscal year 2024, we excluded eight restaurants from our Same-Store Sales Change, du ring fiscal year 2023, we excluded two rest aurants from our Same-Store Sales Change, and during fiscal year 2022, we excluded six restaurants from our Same-Store Sales Change.

To adjust for this misalignment, in calculating Same-

Store Sales Change for each fiscal quarter and the full fiscal year 2024, we shifted each week within fiscal year 2023 forward by one week to better align with the 2024 calendar year, specifically to match the timing of holidays and achieve a more accurate comparable Same-Store Sales Change to the prior period.

During fiscal year 2025, we excluded 18 restaurants from our Same-Store-Sales Change, including 15 temporary closures and three permanent closures.

During fiscal year 2024, we excluded eight restaurants from our Same-Store Sales Change, and du ring fiscal year 2023, we excluded two rest aurants from our Same-Store Sales Change.

These adjustments d id not result in a material change to Same-Store Sales Change for 2025, 2024, or 2023.

Total Digital Revenue Percentage and Owned Digital Revenue Percentage

Our Total Digital Revenue Percentage is the percentage of our revenue attributed to purchases made through our Total Digital Channels.

Our Owned Digital Revenue Percentage is the percentage of our revenue attributed to purchases made through our Owned Digital Channels.

In recent years, we have experienced a reduction in our Owned Digital Revenue Percentage and our Total Digital Revenue percentage, which we believe is due to the continuing recovery of our In-Store Channel and growth in third party marketplace.

Non-GAAP Financial Measures

In addition to our consolidated financial statements, which are presented in accordance with GAAP, we present certain non-GAAP financial measures, including Restaurant-Level Profit, Restaurant-Level Profit Margin, Adjusted EBITDA, and Adjusted EBITDA Margin.

We believe these measures are useful to investors and others in evaluating our performance because these measures:

• facilitate operating performance comparisons from period to period by isolating the effects of some items that vary from period to period without any correlation to core operating performance or that vary widely among similar companies.

These potential differences may be caused by variations in capital structures (affecting interest expense), tax positions (such as the impact on periods or companies of changes in effective tax rates or NOL), and the age and book depreciation of facilities and equipment (affecting relative depreciation expense);

• are widely used by analysts, investors, and competitors to measure a company’s operating performance;

are used by our management and board of directors for various purposes, including as measures of performance and as a basis for strategic planning and forecasting;

• are used internally for a number of benchmarks, including to compare our performance to that of our competitors .

Restaurant-Level Profit, Restaurant-Level Profit Margin, Adjusted EBITDA, and Adjusted EBITDA Margin have limitations as analytical tools, and you should not consider them in isolation or as substitutes for analysis of our results as reported under GAAP.

In particular, Restaurant-Level Profit and Adjusted EBITDA should not be viewed as substitutes for, or superior to, loss from operations or net loss prepared in accordance with GAAP as a measure of profitability.

Some of these limitations are:

• although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and Restaurant-Level Profit and Adjusted EBITDA do not reflect all cash capital expenditure requirements for such replacements or for new capital expenditure requirements;

• Restaurant-Level Profit and Adjusted EBITDA do not reflect changes in, or cash requirements for, our working capital needs;

• Restaurant-Level Profit and Adjusted EBITDA do not reflect the impact of the recording or release of valuation allowances or tax payments that may represent a reduction in cash available to us;

• Restaurant-Level Profit and Adjusted EBITDA do not consider the potentially dilutive impact of stock-based compensation;

• Restaurant-Level Profit is not indicative of overall results of the Company and does not accrue directly to the benefit of stockholders, as corporate-level expenses are excluded;

• Adjusted EBITDA does not take into account any income or costs that management determines are not indicative of ongoing operating performance, such as stock-based compensation;

loss on disposal of property and equipment;

other (income) expense;

Spyce acquisition costs;

enterprise resource planning system (“ERP”) implementation and related costs;

legal settlements;

and, certain other expenses as described in more detail below;

• other companies, including those in our industry, may calculate Restaurant-Level Profit and Adjusted EBITDA differently, which reduces their usefulness as comparative measures.

Because of these limitations, you should consider Restaurant-Level Profit, Restaurant-Level Profit Margin, Adjusted EBITDA, and Adjusted EBITDA Margin alongside other financial performance measures, loss from operations, net loss, and our other GAAP results.

Restaurant-Level Profit and Restaurant-Level Profit Margin

We define Restaurant-Level Profit as loss from operations adjusted to exclude general and administrative expense, depreciation and amortization, pre-opening costs, loss on disposal of property and equipment, and, in certain periods, impairment and closure costs and restructuring charges.

Restaurant-Level Profit Margin is Restaurant-Level Profit as a percentage of revenue.

As it excludes general and administrative expense, which is primarily attributable to our corporate headquarters, which we refer to as our Sweetgreen Support Center, we evaluate Restaurant-Level Profit and Restaurant-Level Profit Margin as a measure of profitability of our restaurants.

The following table sets forth a reconciliation of our loss from operations to Restaurant-Level Profit, as well as the calculation of loss from operations margin and Restaurant-Level Profit Margin for each of the periods indicated :

Fiscal Year Ended

(dollar amounts in thousands)

December 29, 2024 (1)

December 31, 2023 (1)

December 25, 2022 (1)

Loss from operations $ (95,704) $ (122,344) $ (193,337)

General and administrative 149,942 146,762 187,367

Depreciation and amortization 67,346 59,491 46,471

Pre-opening costs 6,616 9,263 11,523

Impairment and closure costs 2,218 624 2,542

Loss on disposal of property and equipment (2)

Restructuring charges (3)

2,276 7,437 14,442

Restaurant-Level Profit

$ 132,949 $ 101,920 $ 69,286

Loss from operations margin

(14) % (21) % (41) %

Restaurant-Level Profit Margin

20 % 17 % 15 %

(1) We operate on a 52/53 week fiscal year end that ends on the last Sunday of the calendar year.

Fiscal years 2024 and 2022 each contained 52 weeks.

Fiscal year 2023 was a 53-week year with the extra operating week (the “53rd week”) falling in our fourth fiscal quarter.

(2) Loss on disposal of property and equipment includes the loss on disposal of assets related to retirements and replacement or write-off of leasehold improvements or equipment.

(3) Restructuring charges are expenses that are paid in connection with reorganization of our operations.

These costs primarily include lease and related costs associated with our vacated former Sweetgreen Support Center, including the impairment and amortization of the operating lease asset, expenses from workforce reductions affecting approximately 5% of employees at our Sweetgreen Support Center, and contract termination costs, related to streamlining our future new restaurant openings.

Adjusted EBITDA and Adjusted EBITDA Margin

We define Adjusted EBITDA as net loss adjusted to exclude income tax (benefit) expense, interest income, interest expense, depreciation and amortization, stock-based compensation expense, loss on disposal of

property and equipment, other (income) expense, Spyce acquisition costs, our enterprise resource planning system (“ERP”) implementation and related costs, legal settlements, and certain other expenses during the period that management determines are not indicative of ongoing operating performance and, in certain periods, impairment and closure costs, restructuring charges, and employer portion of founder performance stock unit payroll taxes.

Adjusted EBITDA Margin is Adjusted EBITDA as a percentage of revenue.

The following table sets forth a reconciliation of our net loss to Adjusted EBITDA, as well as the calculation of net loss margin and Adjusted EBITDA Margin for each of the periods indicated:

Fiscal Year Ended

(dollar amounts in thousands)

December 29, 2024 (1)

December 31, 2023 (1)

December 25, 2022 (1)

Net loss $ (90,373) $ (113,384) $ (190,441)

Non-GAAP adjustments:

Income tax (benefit) expense

(1,301) 379 1,345

Interest income (10,942) (12,942) (5,143)

Interest expense 256 128 83

Depreciation and amortization 67,346 59,491 46,471

Stock-based compensation (2)

39,024 49,532 78,736

Loss on disposal of property and equipment (3)

Impairment and closure costs (4)

2,218 624 2,542

Other expense (5)

6,656 3,475 819

Spyce acquisition costs (6)

Restructuring charges (7)

2,276 7,437 14,442

ERP implementation and related costs (8)

Legal settlements (9)

Employer portion of the founder performance stock unit payroll taxes (10)

Adjusted EBITDA

$ 18,708 $ (2,795) $ (49,934)

Net loss margin

(13)% (19)% (41)%

Adjusted EBITDA Margin

(1) We operate on a 52/53 week fiscal year end that ends on the last Sunday of the calendar year.

Fiscal years 2024 and 2022 each contained 52 weeks.

Fiscal year 2023 was a 53-week year with the extra operating week (the “53rd week”) falling in our fourth fiscal quarter.

(2) Includes non-cash, stock-based compensation.

(3) Loss on disposal of property and equipment includes the loss on disposal of assets related to retirements and replacement or write-off of leasehold improvements or equipment.

(4) Includes costs related to impairment of long-lived and operating lease assets and store closures.

(5) Other expense includes the change in fair value of the contingent consideration issued as part of the Spyce acquisition.

For additional information, see Notes 1 and 3 to our audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K.

(6) Spyce acquisition costs includes one-time costs we incurred in order to acquire Spyce including severance payments, retention bonuses, and valuation and legal expenses.

(7) Restructuring charges are expenses that are paid in connection with the reorganization of our operations.

These costs primarily include lease and related non-cash expenses associated with our vacated former Sweetgreen Support Center, including the impairment and amortization of the operating lease asset.

See Note 1 to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K.

(8) Represents the amortization costs associated with the implementation of our cloud computing arrangements in relation to our ERP system.

(9) Expenses recorded for accruals related to the settlements of legal matters.

(10) Includes the employer portion of payroll taxes related to the vesting of 600,000 performance stock units released to each founder during the fiscal year ended December 29, 2024.

Components of Results of Operations

We recognize food and beverage revenue, net of discounts and incentives, when payment is tendered at the point of sale as the performance obligation has been satisfied, through our three disaggregated revenue channels:

Owned Digital Channels, In-Store-Channel (Non-Digital component), and Marketplace Channel.

Provisions for discounts are provided for in the same period the related sales are recorded.

Sales taxes and other taxes collected from customers and remitted to governmental authorities are presented on a net basis, and as such, are excluded from revenue.

We expect revenue to increase as we focus on opening additional restaurants, diversify and expand our menu, make investments in marketing to attract new customers and increase order frequency from our existing customers, as well as any increases in the price of our menu items.

We also sell gift cards that do not have an expiration date.

Upon sale, gift cards are recorded as unearned revenue and included within gift card liability in the accompanying audited consolidated balance sheets.

The revenue from gift cards is recognized when redeemed by customers.

Because we do not track addresses of gift card purchasers, the relevant jurisdiction related to the requirement for escheatment, the legal obligation to remit unclaimed assets to the state, is our state of incorporation, which is Delaware.

The state of Delaware requires escheatment after five years from issuance.

We do not recognize breakage income because of our requirements to escheat unredeemed gift card balances.

The majority of our restaurant locations offer a delivery option.

Delivery services are fulfilled by third-party service providers whether delivery is ordered through our Native Delivery Channel or Marketplace Channel.

With respect to Native Delivery Channel sales, we control the delivery services and recognize revenue, including delivery revenue, when the delivery partner transfers food or beverage to the customer.

For these sales, we receive payment directly from the customer at the time of sale.

With respect to Marketplace Channel sales, we recognize revenue, excluding delivery fees collected by the delivery partner as we do not control the delivery service, when control of the food or beverage is delivered to the end customer.

We receive payment from the delivery partner subsequent to the transfer of food and the payment terms are short-term in nature.

For all delivery sales, we are considered the principal and recognize the revenue on a gross basis.

For a more detailed discussion of our third-party delivery fees and our expectations regarding our margins, see the section titled “—Sales Channel Mix” above.

Restaurant Operating Costs, Exclusive of Depreciation and Amortization

Food, Beverage, and Packaging

Food, beverage, and packaging costs include the direct costs associated with food, beverage, and packaging of our menu items.

We anticipate food, beverage, and packaging costs on an absolute dollar basis will increase for the foreseeable future to the extent we experience additional customer orders, as we open additional restaurants, and as a result our revenue grows.

Food, beverage, and packaging costs as a percentage of revenue may vary, as these costs are impacted by menu mix and fluctuations in commodity costs, inflation, and availability, as well as geographic scale and proximity.

We will continue to innovate in key areas, including menu, which could lead to increases in commodity costs as we add items such as beef to our menu.

Labor and Related Ex penses

Labor and related expenses include salaries, bonuses, benefits, payroll taxes, workers compensation expenses, and other expenses related to our restaurant employees.

As with other variable expense items, we expect labor costs to grow as our revenue grows.

Other factors that influence labor costs include each jurisdiction’s minimum wage and payroll tax legislation, inflation, the strength of the labor market for hourly employees, benefit costs, health care costs, and the size and location of our restaurants.

Occupancy and Related Expenses

Occupancy and related expenses consist of restaurant-level occupancy expenses (including rent, common area maintenance (“CAM”) expenses, and real estate taxes), and exclude occupancy expenses associated with unopened restaurants, which are recorded separately in pre-opening costs.

We anticipate occupancy and

related expenses on an absolute dollar basis will increase for the foreseeable future to the extent we continue to open new restaurants and revenue grows.

Occupancy and related expenses as a percentage of revenue are impacted by geographic location, type of restaurant build, and amount of revenue.

Other Restaurant Operating Costs

Other restaurant operating costs include other operating expenses incidental to operating our restaurants, such as repairs and maintenance, utilities, certain local taxes, third-party delivery fees, non-perishable supplies, restaurant-level marketing, credit card fees, and property insurance.

We expect that other restaurant operating costs will increase on an absolute dollar basis for the foreseeable future to the extent we continue to open new restaurants and our revenue grows.

Other restaurant operating costs as a percentage of revenue are expected to increase in line with growth in our Native Delivery, Outpost and Catering , and Marketplace Channels, as these channels require us to pay third-party delivery fees.

However, as revenue increases, we expect that other restaurant operating costs, such as repairs and maintenance and property insurance, as a percentage of revenue will decline.

Operating Expenses

General and Administrative

General and administrative expenses consist primarily of operations, technology, finance, legal, human resources, administrative personnel, and other personnel costs that support restaurant development and operations, as well as stock-based compensation expense and brand-related marketing.

As a percentage of revenue, we expect our general and administrative expenses to vary from period to period and to decrease over time.

Depreciation and Amortization

Depreciation and amortization include the depreciation of fixed assets, including leasehold improvements and equipment, amortization of external costs, certain internal costs directly associated with developing computer software applications for internal use, and developed technology acquired as part of our Spyce acquisition.

We expect that depreciation and amortization expenses will increase on an absolute dollar basis as we continue to build new restaurants and make investments in our digital platform.

Pre-Opening Costs

Pre-opening costs primarily consist of rent, wages, travel for training and restaurant opening teams, food, marketing, and other restaurant costs that we incur prior to the opening or during the major renovation of a restaurant.

These expenses will increase in proportion to the increase of our new restaurant openings and major renovations.

These costs are expensed as incurred.

Pre-opening costs depend on the number of new restaurants and major restaurant renovations we open during each period or are planning to open during future periods.

As a result, while we expect that pre-opening costs on an absolute dollar basis will fluctuate from period to period, we expect pre-opening costs to begin to increase in fiscal year 2025 in connection with the reacceleration of new restaurant growth as described above.

Impairment and Closure Costs

Impairment includes impairment charges related to our long-lived assets, which include property and equipment and operating lease assets.

Closure costs include lease and related costs associated with closed restaurants and our vacated former Sweetgreen Support Center, including the amortization of the operating lease asset, and expenses associated with CAM and real estate taxes for previously impaired stores.

Loss on Disposal of Property and Equipment

Loss on disposal of property and equipment includes the net book value of assets that have been retired and consists primarily of furniture, equipment, and fixtures that were replaced in the normal course of business.

Restructuring Charges

Restructuring charges are expenses that are paid in connection with the reorganization of our operations.

These costs primarily include operating lease asset impairment costs related to our vacated former Sweetgreen Support Center, as well as the amortization of the underlying operating lease asset and related real estate and CAM charge s, severance and related benefits from workforce reductions at our Sweetgreen Support Center, and costs related to abandoning certain potential future restaurant sites, which are a result of our efforts to streamline our future new restaurant openings, and other related expenses.

Interest Income and Interest Expense

Interest income consists of interest earned on our cash and cash equivalents.

Interest expense includes mainly amortization of deferred financing costs from our debt origination and commitment fees.

Other Expense

Other expense consists primarily of changes in the fair value of our contingent consideration liability in connection with the Spyce acquisition.

We will continue to remeasure the liability associated with our contingent consideration liability until the underlying service conditions are met, or the performance period expires.

Income Tax (Benefit) Expense

Income tax (benefit) expense consists of federal and state tax expense on our operating activity, and changes to our deferred tax asset and deferred tax liability.

For additional information, see Note 11 to our audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K.

Our Total Digital Revenue Percentage is the percentage of our revenue attributed to purchases made through all channels except Non-Digital transactions made through our In-Store Channel.

Our Owned Digital Revenue Percentage is the percentage of our revenue attributed to purchases made through our Owned Digital Channels, which include our Pick-Up Channel, Native Delivery Channel, Outpost and Catering Channel (excluding catering orders placed through third-party platforms), and purchases made in our In-Store Channel via digital scan-to-pay, or digital scan-to-earn and scan-to-redeem associated with our SG Rewards loyalty program.

With the introduction of our new loyalty program in the second quarter of fiscal year 2025, we have experienced and anticipate continuing to see an increase in Owned Digital sales, which is realized in our Owned Digital Revenue Percentage and our Total Digital Revenue Percentage.

Results of Operations

40 unchanged sentences

(134,019) (91,674) (42,345) 46.2 %

Income tax (benefit) expense

Income tax expense (benefit)

46 (1,301) 1,347 (103.5 %)

6 unchanged sentences

Same-Store Sales Change

The increase in revenue in fiscal year 2024 was primarily due to $64.5 million of incremental revenue associated with 60 Net New Restaurant Openings during fiscal years 2024 and 2023.

The increase in revenue was also impacted by an increase in Comparable Restaurant Base revenue of $34.8 million, resulting in a positive Same-Store Sales Change of 6%, consisting of a 4% benefit from menu price increases and a 2% increase due to traffic and favorable product mix.

The remaining $0.4 million of the increase was due to additional fiscal year-over-year comparable restaurant sales growth, which would have been reflected in our Same-Store Sales Change had we not adjusted for the misalignment in our comparable weeks resulting from fiscal year 2023 being a 53-week year, as described above.

These increases were partially offset by $6.4 million of additional revenue recognized in fiscal year 2023 resulting from the 53rd week.

(7.9%) 6.2% (14.1 %)

Revenue increased in fiscal year 2025 compared to fiscal year 2024, primarily due to $58.2 million of incremental revenue associated with 60 Net New Restaurant Openings during fiscal years 2025 and 2024.

This was partially offset by a decrease in Comparable Restaurant Base revenue of $53.0 million, resulting in a negative Same-Store Sales Change of 7.9%, primarily reflecting a 10.4% decrease in traffic, partially offset by a 2.5% benefit from menu price increases.

Traffic softness reflected a more selective consumer environment and the transition from our former Sweetpass+ program to SG Rewards.

While the loyalty transition created near-term headwinds, it positions us to drive more sustainable engagement over time.

In 2026, we anticipate full-year Same-Store Sales Change between (4.0)% to (2.0)%.

Restaurant Operating Costs

6 unchanged sentences

28.5% 27.4% 1.1 %

The increase in food, beverage, and packaging costs for fiscal year 2024 was primarily due to a $24.6 million increase in food and beverage costs, primarily due to the 60 Net New Restaurant Openings during fiscal years 2024 and 2023, and higher protein cost.

These increases were partially offset by a $1.4 million decrease in packaging costs, which were higher in the prior-year period due to a packaging supply chain disruption.

As a percentage of revenue, the slight decrease in food, beverage, and packaging costs for fiscal year 2024 was primarily due to an increase in revenue proportional to the increase in food, beverage and packaging costs, partially offset by a small decrease in the cost of packaging due to the supply chain disruptions experienced in the prior year.

As a percentage of revenue, food, beverage, and packaging costs in fiscal year 2025 increased compared to fiscal year 2024, primarily driven by higher protein costs resulting from higher overall ingredient usage and waste, including increased chicken and tofu portions, higher ingredient and packaging costs related to recently imposed tariffs and duties, as well as a one time write-off of discontinued materials.

These increases were partially offset by menu price increases.

For fiscal year 2025, we realized a tariff and duty impact from our food, beverage, and packaging supply chain of approximately 27 basis points.

As tariff costs are absorbed into our supplier pricing, the impact may not be separately identifiable in future periods, and may vary based on tariff policy changes.

Labor and Related Expenses

5 unchanged sentences

28.9% 27.9% 1.0 %

The increase in labor and related expenses for fiscal year 2024 was primarily due to the 60 Net New Restaurant Openings during fiscal years 2023 and 2024, as well as an increase in staffing expenses, primarily due to an increase in prevailing wage rates in many of our markets.

Most notable, as of April 1, 2024, California fast food wages increased as a result of AB 1228.

Additionally, the increase in labor and related expenses is attributed to the $1.8 million benefit related to refundable employee retention tax credits (“ERC”) received in fiscal year 2023, issued as part of the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”) as well as an improvement in labor optimization.

See Note 11 to our audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K for further details on the ERC.

As a percentage of revenue, the decrease in labor and related expenses for fiscal year 2024 was primarily due to higher revenue and improvement in labor optimization, partially offset by wage rate increases as discussed above.

This decrease was also partially offset by the $1.8 million benefit related to a refundable ERC issued as part of the CARES Act, as discussed above.

As a percentage of revenue, labor and related expenses for fiscal year 2025 increased compared to fiscal year 2024, primarily due to deleverage from lower sales volume as well as wage inflation, partially offset by menu price increases.

Occupancy and Related Expenses

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As a percentage of total revenue

The increase in occupancy and related expenses for fiscal year 2024 was primarily due to the 60 Net New Restaurant Openings during fiscal years 2023 and 2024, partially offset by reduced occupancy rates across recently opened stores.

As a percentage of revenue , occupancy and related expenses for fiscal year 2024 was slightly below the prior year primarily due to higher revenue in the current year as well as reduced occupancy rates, as discussed above.

9.6 % 8.8 % 0.8 %

As a percentage of revenue, occupancy and related expenses for fiscal year 2025 increased compared to fiscal year 2024, primarily driven by deleverage associated with the change in sales volume.

Other Restaurant Operating Costs

5 unchanged sentences

17.7 % 16.3 % 1.4 %

The increase in other restaurant operating costs for fiscal year 2024 was primarily due to the 60 Net New Restaurant Openings during fiscal years 2023 and 2024.

This includes increases in delivery fees due to higher transaction volume, credit card and online processing fees related to the increases in revenue, and increases in utilities and repair and maintenance expenses to support the existing stores and Net New Restaurant Openings described above.

As a percentage of revenue, other restaurant operating costs during fiscal year 2024 remained consistent with the prior year, primarily due to higher revenue.

As a percentage of revenue, other restaurant operating costs during fiscal year 2025 increased compared to fiscal year 2024, primarily due to lower sales volume, as well as increases in restaurant-level advertising spend, catering fees, and repairs and maintenance for existing stores.

Operating Expenses

6 unchanged sentences

21.1 % 22.2 % (1.0 %)

The increase in general and administrative expenses for fiscal year 2024 was primarily due to a $5.1 million benefit received during fiscal year 2023 from the ERC.

General and administrative expense was also impacted by an increase in our investment in marketing and advertising, payroll taxes related to Founder PSUs released during the current year as discussed above, legal settlements, and an increase in spend across the Sweetgreen Support Center to support our restaurant growth.

These increases were partially offset by a decrease in stock-based compensation expense primarily related to the decrease in expense associated with restricted stock units and performance-based restricted stock units issued prior to our IPO.

As a percentage of revenue, general and administrative expenses for fiscal year 2024 decreased from fiscal year 2023, primarily due to the fluctuations noted above, as well as comparatively higher revenue in the current period.

General and administrative expenses on a dollar basis decreased in fiscal year 2025 compared to fiscal year 2024, primarily due to a $4.6 million decrease in bonus expense due to performance, as well as a $2.5 million decrease in stock-based compensation expense, primarily related to the decrease in expenses associated with restricted stock units and performance-based restricted stock units issued prior to our IPO.

These decreases were partially offset by an increase in other expenses across the Sweetgreen Support Center to support our restaurant growth.

As a percentage of revenue, general and administrative expenses for fiscal year 2025 decreased compared to fiscal year 2024, primarily due to the net effect of the fluctuations noted above.

Depreciation and Amortization

5 unchanged sentences

10.5 % 10.0 % 0.6 %

The increase in depreciation and amortization for fiscal year 2024 was primarily due to the 60 Net New Restaurant Openings during fiscal years 2023 and 2024, as well as the amortization of developed technology that was placed into service during the first half of fiscal year 2023.

As a percentage of revenue, depreciation and amortization for fiscal year 2024 was flat compared to fiscal year 2023, primarily due to comparatively higher revenue in fiscal year 2024, offset by the increases noted above.

As a percentage of revenue, depreciation and amortization for fiscal year 2025 increased compared to fiscal year 2024, primarily related to the increase in the total depreciable base, driven by our acceleration of new restaurant growth in fiscal year 2025 as well as the change in sales volume.

Pre-Opening Costs

5 unchanged sentences

1.6 % 1.0 % 0.6 %

The decrease in pre-opening costs for fiscal year 2024 was primarily due to 25 gross new restaurant openings in 2024 compared to 38 gross restaurant openings in 2023.

As a percentage of revenue, pre-opening costs decreased in fiscal year 2024 compared to fiscal year 2023 due to the variances noted above as well as comparatively higher revenue in the current year.

As a percentage of revenue, pre-opening costs for fiscal year 2025 increased compared to fiscal year 2024 due to the acceleration of net new restaurant growth as well as the change in sales volume.

Impairment and Closure Costs

4 unchanged sentences

As a percentage of total revenue

During fiscal year 2024 we recognized non-cash impairment charges and closure costs of $2.2 million, primarily related to the impairment of one restaurant’s property and equipment and the related operating lease asset.

During fiscal year 2023 we recorded closure costs of $0.6 million related to lease and related costs associated with previously closed stores, including the amortization of operating lease assets, and expenses associated with CAM and real estate taxes.

1.8 % 0.3 % 1.4 %

Impairment and closure costs on a dollar basis increased during fiscal year 2025 compared to fiscal year 2024, primarily due to non-cash impairment charges related to property and equipment and the related operating lease assets of twelve of our restaurants compared to one restaurant in the prior year, as well as closure costs associated with three stores that were impaired and closed during fiscal year 2025.

Loss on Disposal of Property and Equipment

4 unchanged sentences

As a percentage of total revenue

The decrease in loss on disposal of property and equipment was due to the timing of furniture, equipment, and fixture replacements at multiple restaurants, in addition to a fleet-wide replacement of kitchen equipment with more cost efficient items in fiscal year 2023 as compared to fiscal year 2024.

0.2 % — % 0.2 %

Loss on disposal of property and equipment increased in fiscal year 2025 compared to fiscal year 2024, primarily attributable to the disposal of specialized kitchen equipment.

Restructuring charges

5 unchanged sentences

0.5 % 0.3 % 0.2 %

During fiscal year 2022, we implemented the Plan to manage operating expenses at our Sweetgreen Support Center, including the reduction of our real estate footprint by vacating the premises of the existing Sweetgreen Support Center and moving to a smaller office space adjacent to the existing location, severance and related benefits from workforce reductions affecting approximately 5% of employees at the Sweetgreen Support Center, abandoning certain potential future restaurant sites in an effort to streamline our future new restaurant openings, and other related expenses.

During fiscal year 2024, stemming from the Plan, we recorded restructuring charges of $2.3 million primarily related to the amortization of the underlying operating lease asset and related real estate and CAM charges for our vacated former Sweetgreen Support Center.

During fiscal year 2023, stemming from the Plan, we recorded restructuring charges of $7.4 million primarily related to operating lease asset impairment costs from our vacated former Sweetgreen Support Center as well as the amortization of the underlying operating lease asset and related real estate and CAM charges.

Restructuring charges for both fiscal years 2025 and 2024 are primarily related to our former Sweetgreen Support Center, which we vacated in fiscal year 2022, including continued amortization of the operating lease asset and related real estate and common area maintenance (“ CAM”) charges.

Additionally, during fiscal year 2025, we experienced additional restructuring costs including severance and related benefits associated with a reduction in force at our Sweetgreen Support Center and costs associated with vacating our former New York office space.

We continue to evaluate our organizational structure and may implement additional changes to lower our administrative headcount in future periods.

Interest Income and Interest Expense

5 unchanged sentences

19 256 (92.6 %)

Total income expense

Total interest income, net

$ (6,529) $ (10,686) (38.9 %)

1 unchanged sentence

(1.0) % (1.6) % 0.6 %

The decrease in interest income, net, was primarily due to a lower cash balance in our money market accounts during fiscal year 2024 as compared to fiscal year 2023.

Other Expense

Fiscal Year Ended

(dollar amounts in thousands) December 29, 2024 December 31, 2023 Percentage

Interest income, net decreased in fiscal year 2025 compared to fiscal year 2024, primarily due to a lower cash balance and lower interest rate in our money market accounts during fiscal year 2025 as compared to fiscal year 2024.

Other Expense

$ 6,656 $ 3,475 92 %

As a percentage of total revenue

The change in other expense in fiscal year 2024 was primarily due to a change in the fair value of our contingent consideration compared to the prior year, which was issued as part of the Spyce acquisition in the third quarter of fiscal year 2021.

Income Tax (Benefit) Expense

Fiscal Year Ended

(dollar amounts in thousands) December 28, 2025 December 29, 2024 Percentage

Income tax (benefit) expense $ (1,301) $ 379 (443 %)

As a percentage of total revenue

Our effective tax rate for the fiscal years ended 2024 and 2023 was 1.4% and (0.3%), re spectively, primarily due to the full valuation allowance on our net deferred tax assets.

Comparison of Fiscal Year 2023 and Fiscal Year 2022

The following table summarizes our results of operations for fiscal year 2023 and fiscal year 2022:

Fiscal Year Ended

(dollar amounts in thousands) December 31, 2023 December 25,

Change Percentage

$ 584,041 $ 470,105 $ 113,936 24 %

Restaurant operating costs (exclusive of depreciation and amortization presented separately below):

Food, beverage, and packaging

161,725 130,136 31,589 24 %

Labor and related expenses

171,306 147,474 23,832 16 %

Occupancy and related expenses

54,281 45,238 9,043 20 %

Other restaurant operating costs

94,809 77,971 16,838 22 %

Total cost of restaurant operations

482,121 400,819 81,302 20 %

Operating expenses:

General and administrative

146,762 187,367 (40,605) (22 %)

Depreciation and amortization

59,491 46,471 13,020 28 %

Pre-opening costs

9,263 11,523 (2,260) (20 %)

Impairment and closure costs

624 2,542 (1,918) (75 %)

Loss on disposal of property and equipment

687 278 409 147 %

Restructuring charges

7,437 14,442 (7,005) (49 %)

Total operating expenses

224,264 262,623 (38,359) (15 %)

Loss from operations

(122,344) (193,337) 70,993 (37 %)

Interest income

(12,942) (5,143) (7,799) 152 %

Interest expense

128 83 45 54 %

Other expense

$ 1,230 $ 6,656 (81.5 %)

Loss from operations before income taxes

(113,005) (189,096) 76,091 (40 %)

Income tax provision

379 1,345 (966) (72 %)

$ (113,384) $ (190,441) $ 77,057 (40 %)

Fiscal Year Ended

(dollar amounts in thousands) December 31, 2023 December 25,

2022 Percentage

$ 584,041 $ 470,105 24 %

Average Unit Volume

$ 2,877 $ 2,905 (1 %)

Same-Store Sales Change

4 % 13 % (9 %)

The increase in revenue in fiscal year 2023 was primarily due to $92.2 million of incremental revenue associated with 71 Net New Restaurant Openings during fiscal years 2023 and 2022.

The increase in revenue was also impacted by an increase in Comparable Restaurant Base revenue of $21.3 million, resulting in a positive Same-Store Sales Change of 4%, consisting of a 4% benefit from menu price increases as traffic/product mix remained flat.

In addition, we had an additional week of revenue in fiscal year 2023.

The increase in revenue was partially offset by the negative impact of restaurant closures in fiscal year 2023, as well as an increase in discounts associated with the launch of our Sweetpass+ loyalty program.

Restaurant Operating Costs

Food, Beverage, and Packaging

Fiscal Year Ended

(dollar amounts in thousands) December 31, 2023 December 25,

2022 Percentage

Food, beverage, and packaging

$ 161,725 $ 130,136 24 %

As a percentage of total revenue

0.2 % 1.0 % (0.8 %)

The increase in food, beverage, and packaging costs for fiscal year 2023 was primarily due to a $26.6 million increase in food and beverage costs and a $5.0 million increase in packaging cost.

This was primarily due to the 71 Net New Restaurant Openings during fiscal years 2023 and 2022 as well as the use of higher-cost proteins.

In addition, during fiscal year 2023 , we experienced supply chain disruptions for our bowls and plates, which resulted in the use of alternative packaging solutions with higher costs of materials.

As a percentage of revenue, food, beverage, and packaging costs for fiscal year 2023 remained consistent with the prior year primarily as a result of the increase in costs of packaging, up streaming initiatives, and a larger mix of higher cost proteins, offset by menu pricing increases.

Labor and Related Expenses

Fiscal Year Ended

(dollar amounts in thousands) December 31, 2023 December 25,

2022 Percentage

Labor and related expenses

$ 171,306 $ 147,474 16 %

As a percentage of total revenue

29 % 31 % (2 %)

The increase in labor and related expenses for fiscal year 2023 was primarily due to the 71 Net New Restaurant Openings during fiscal years 2022 and 2023.

T he increase was also due to an increase in staffing expenses across all of our locations, primarily due to an increase in prevailing wage rates in many of our markets as a result of continued wage rate inflation in the industry.

These increases were partially offset by a $1.8 million benefit related to refundable employee retention tax credits (“ERC”) issued as part of the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”) as well as an improvement in labor optimization.

See Note 11 to our audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K for further details on the ERC.

As a percentage of revenue, the decrease in labor and related expenses for fiscal year 2023 was primarily due to higher revenue, improvement in labor optimization and the $1.8 million ERC benefit as discussed above.

Occupancy and Related Expenses

Fiscal Year Ended

(dollar amounts in thousands) December 31, 2023 December 25,

2022 Percentage

Occupancy and related expenses

$ 54,281 $ 45,238 20 %

As a percentage of total revenue

9 % 10 % (1 %)

The increase in occupancy and related expenses for fiscal year 2023 was primarily due to the 71 Net New Restaurant Openings during fiscal years 2023 and 2022.

As a percentage of revenue, the decrease in occupancy and related expenses for fiscal year 2023 was primarily due to an increase in locations in areas with lower occupancy cost as well as higher revenue.

Other Restaurant Operating Costs

Fiscal Year Ended

(dollar amounts in thousands) December 31, 2023 December 25,

2022 Percentage

Other restaurant operating costs

$ 94,809 $ 77,971 22 %

As a percentage of total revenue

16 % 17 % (1 %)

The increase in other restaurant operating costs for fiscal year 2023 was primarily due to the 71 Net New Restaurant Openings during fiscal years 2023 and 2022.

This includes increases in utilities and repair and maintenance expenses, delivery fees due to higher transaction volume, credit card and online processing fees related to the increases in revenue, and kitchen, cleaning and related supplies to support the Net New Restaurant Openings described above.

As a percentage of revenue, the decrease in other restaurant operating costs during fiscal year 2023 was primarily due to higher revenue.

Operating Expenses

General and Administrative

Fiscal Year Ended

(dollar amounts in thousands) December 31, 2023 December 25,

2022 Percentage

General and administrative

$ 146,762 $ 187,367 (22 %)

As a percentage of total revenue

25 % 40 % (15 %)

The decrease in general and administrative expenses for fiscal year 2023 was primarily due to a $29.2 million decrease in stock-based compensation expense, a $5.2 million decrease in management salaries and benefits, including bonus, the benefit of $5.1 million of ERC, and a $1.6 million decrease in liability insurance.

Additionally, we had decreases in research and prototyping costs, rent and related costs, travel-related expenses, and office systems.

These decreases were partially offset by an increase in consulting fees, non-income taxes, and expense related to the amortization of costs associated with the implementation of our cloud computing arrangements in relation to our new ERP system.

As a percentage of revenue, general and administrative expenses for fiscal year 2023 decreased from fiscal year 2022, primarily due to the fluctuations noted above, as well as comparatively higher revenue in the current period.

Depreciation and Amortization

Fiscal Year Ended

(dollar amounts in thousands) December 31, 2023 December 25,

2022 Percentage

Depreciation and amortization

$ 59,491 $ 46,471 28 %

As a percentage of total revenue

10 % 10 % — %

The increase in depreciation and amortization for fiscal year 2023 was primarily due to the 71 Net New Restaurant Openings during fiscal years 2023 and 2022.

As a percentage of revenue, depreciation and amortization for fiscal year 2023 was flat compared to fiscal year 2022, primarily due to comparatively higher revenue in fiscal year 2023, offset by the increases noted above.

Pre-Opening Costs

Fiscal Year Ended

(dollar amounts in thousands) December 31, 2023 December 25,

2022 Percentage

Pre-opening costs

$ 9,263 $ 11,523 (20 %)

As a percentage of total revenue

The decrease in pre-opening costs for fiscal year 2023 was primarily due to improved cost efficiencies across 38 new restaurant openings in 2023 compared to 39 new restaurant openings in 2022.

As a percentage of revenue, pre-opening costs were relatively flat in fiscal year 2023 compared to fiscal year 2022.

Impairment and Closure Costs

Fiscal Year Ended

(dollar amounts in thousands) December 31, 2023 December 25,

2022 Percentage

Impairment of long-lived assets

$ 624 $ 2,542 (75 %)

As a percentage of total revenue

— % 1 % (1 %)

During fiscal year 2023, we recognized non-cash impairment charges of $0.6 million related to lease and related costs associated with previously closed stores, including the amortization of operating lease asset, and expenses associated with CAM and real estate taxes.

During fiscal year 2022, we recognized non-cash impairment charges of $2.0 million related to the property and equipment of three of our restaurants and non-cash impairment charges of $0.4 million related to the operating lease assets of three of our restaurants, as well as $0.1 million of closure costs related to one store previously operated by Spyce.

Loss on Disposal of Property and Equipment

Fiscal Year Ended

(dollar amounts in thousands) December 31, 2023 December 25,

2022 Percentage

Loss on disposal of property and equipment

$ 687 $ 278 147 %

As a percentage of total revenue

The increase in loss on disposal of property and equipment was due to the timing of furniture, equipment and fixture replacements at multiple restaurants, in addition to a fleet-wide replacement of kitchen equipment with more cost efficient items in fiscal year 2023 as compared to fiscal year 2022.

Restructuring charges

Fiscal Year Ended

(dollar amounts in thousands) December 31, 2023 December 25,

2022 Percentage

Restructuring charges

$ 7,437 $ 14,442 (49 %)

As a percentage of total revenue

1 % 3 % (2 %)

During fiscal year 2022, we implemented the Plan to manage operating expenses at our Sweetgreen Support Center, and incurred total pre-tax restructuring and related charges of approximately $14.4 million.

This included a $13.0 million non-cash restructuring expense, due to a reduction of our real estate footprint by vacating the premises of the existing Sweetgreen Support Center and moving to a smaller office space adjacent to the existing location, of which $6.8 million related to impairment of the long-lived assets, $5.8 million and $0.4 million related to impairment of our operating lease asset and closure costs, respectively, associated with the Sweetgreen Support Center, $0.6 million of severance and related benefits from workforce reductions affecting approximately 5% of employees at the Sweetgreen Support Center, $0.6 million of costs related to abandoning certain potential future restaurant sites in an effort to streamline our future new restaurant openings, and $0.2 million of other related expenses.

Interest Income and Interest Expense

Fiscal Year Ended

(dollar amounts in thousands) December 31, 2023 December 25,

2022 Percentage

Interest income

$ (12,942) $ (5,143) 152 %

Interest expense

$ 128 $ 83 54 %

Total income expense

(12,814) (5,060) 153 %

As a percentage of total revenue

(2) % (1) % (1 %)

The increase in interest income, net was primarily due to higher interest rates on our money market accounts during fiscal year 2023.

Other Expense

Fiscal Year Ended

(dollar amounts in thousands) December 31, 2023 December 25,

2022 Percentage

Other expense

$ 3,475 $ 819 324 %

As a percentage of total revenue

The change in other expense in fiscal year 2023 was primarily due to a change in the fair value of our contingent consideration compared to the prior year, which was issued as part of the Spyce acquisition in the third quarter of fiscal year 2021.

Income Tax Expense

Other expense decreased in fiscal year 2025 compared to fiscal year 2024, primarily due to a change in the fair value of our contingent consideration compared to the prior year, which was issued as part of the Spyce acquisition in the third quarter of fiscal year 2021.

This decrease was partially offset by legal, advisory, and other transaction costs expensed as incurred in fiscal year 2025 in connection with the Spyce Sale completed subsequent to year end.

Income Tax Expense (Benefit)

Fiscal Year Ended

(dollar amounts in thousands) December 31, 2023 December 25,

2022 Percentage

Income tax expense

(dollar amounts in thousands) December 28, 2025 December 29, 2024 Percentage

Income tax expense (benefit) $ 46 $ (1,301) (103.5 %)

Effective income tax rate

— % 1.4 % (1.4 %)

As a percentage of total revenue

Our effective tax rate for the fiscal years ended 2023 and 2022 was (0.3%) and (0.7%), respectively, primarily due to the full valuation allowance on our net deferred tax assets

Our effective income tax rates for the fiscal years ended 2025 and 2024 were —% and 1.4%, respectively, primarily due to the full valuation allowance on our net deferred tax assets.

Seasonality and Quarterly Financial Data

Our revenue fluctuates as a result of seasonal factors and weather conditions.

Historically, our revenue has been lower in the first and fourth fiscal quarters of the year due, in part, to the holiday season and inclement weather (generally the winter months, though inclement weather conditions may occur in certain markets at any time of the year).

In addition, a core part of our menu, salads, has proven to be more popular among consumers in the warmer months .

In recent years, the prevalence of hybrid and remote work arrangements have made seasonality in our business less predictable, and we have experienced negative revenue impacts around national holidays.

Additionally, we have seen extreme weather conditions and natural disasters cause disruptions to our operations from time to time, including the wildfires in Los Angeles, which impacted our fiscal year 2025 results.

Our results are also influenced by a variety of other factors, including the amount and timing of non-cash stock-based compensation expense, litigation, settlement and other legal costs, impairment charges and other non-operating items, and the timing of marketing or promotional activities.

Quarterly performance may also be

affected by the number and timing of Net New Restaurant Openings and any restaurant closures during the period.

New restaurants typically operate at higher costs in the periods immediately following opening due to pre-opening expenses, training costs, and initial operating inefficiencies.

As a result, our operating results for any particular quarter are not necessarily indicative of results to be expected for any other quarter or for a full fiscal year.

Liquidity and Capital Resources

Sources and Material Cash Requirements

To date, we have funded our operations through proceeds received from previous common stock and preferred stock issuances, our ability to obtain lending commitments and through cash flow from operations.

Additionally, in November 2021, we completed our IPO, from which we received net proceeds of $384.7 million from sales of our shares of Class A common stock, after deducting underwriting discounts and commissions and offering expenses.

To date, we have funded our operations through proceeds received from common stock and preferred stock issuances and debt incurrences, and through cash flow from operations.

As of December 28, 2025 and December 29, 2024, we had $89.2 million and $214.8 million in cash and cash equivalents, respectively.

Subsequent to the fiscal year ended December 28, 2025, we completed the sale of Spyce to Wonder, consisting of $100 million in cash and shares of Series C Preferred Stock of Wonder with an implied value of $86.4 million.

Based on our current operating plan, we believe our existing cash and cash equivalents, will be sufficient to fund our operating lease obligations, capital expenditures, and working capital needs for at least the next 12 months.

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If we are unable to generate positive operating cash flows, additional debt and equity financings may be necessary to sustain future operations, and there can be no assurance that such financing will be available to us on commercially reasonable terms, or at all.

Our primary liquidity and capital requirements are for new restaurant development, including related to deployment of our Infinite Kitchen, initiatives to improve the customer experience in our restaurants, research and development costs, marketing-related costs, working capital and general corporate needs.

During the fiscal year ended December 29, 2024, we made a cash payment of approximately $3.9 million related to the Spyce milestone payment, which was included within contingent consideration in our consolidated balance sheets for the fiscal year ended December 31, 2023.

See Note 3 to our audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K for further details.

We have not required significant working capital because customers generally pay using cash or credit and debit cards and, as a result, our operations do not require significant receivables.

Our primary liquidity and capital requirements are funding the current operations in our restaurants and Sweetgreen Support Center, new restaurant development, including the deployment of Infinite Kitchen technology, initiatives to improve the customer experience in our restaurants, and general corporate needs.

During the fiscal year ended December 28, 2025, we made a cash payment of approximately $2.3 million related to the second Spyce milestone payment.

In connection with the aforementioned sale of Spyce to Wonder, and pursuant to the terms of the contingent consideration liability, the conditions for the third milestone payment were satisfied upon closing the sale, resulting in the acceleration of the final payment.

The remaining $7.0 million was paid out in January 2026 and is included within other current liabilities within the consolidated balance sheets as of December 28, 2025.

See Notes 3 and 16 to our audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K for further details.

We have not required significant working capital because customers generally pay using cash or credit and debit cards and, as a result, our operations do not result in significant receivables.

Additionally, our operations do not require significant inventories due, in part, to our use of numerous fresh ingredients.

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We did not renew the Credit Facility in 2024 and it expired pursuant to its terms on December 13, 2024.

As of December 28, 2025 and December 29, 2024, we had no outstanding debt obligations.

The following table summarizes our cash flows for the periods indicated:

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(in thousands) December 28, 2025 December 29, 2024 December 31, 2023

Net cash provided by (used in) operating activities

Net cash (used in) provided by operating activities

$ (12,696) $ 43,390 $ 26,480

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(114,251) (92,211) (95,665)

Net cash (used in) provided by financing activities

Net cash provided by (used in) financing activities

2,861 8,895 (5,199)

Net increase (decrease) in cash and cash equivalents and restricted cash

Net decrease in cash and cash equivalents and restricted cash

$ (124,086) $ (39,926) $ (74,384)

Operating Activities

For fiscal year 2024, cash provided by (used in) operating activities increased $16.9 million compared to fiscal year 2023, primarily due to a $20.9 million reduction in net loss after excluding non-cash items and a $4.0 million favorable working capital fluctuation, which is primarily related to the timing of payroll and other payments in the ordinary course of business, offset by the $3.4 million receipt of ERC in fiscal year 2023.

For fiscal year 2023 , cash provided by (used in) operating activities increased $69.6 million compared to fiscal year 2022, primarily due to a $54.1 million reduction in loss after excluding non-cash items, a $15.6 million favorable working capital fluctuation, which is primarily related to the timing of payroll and other payments in the ordinary course of business, and a $3.4 million receipt of our ERC.

For fiscal year 2025, cash used in operating activities increased $56.1 million compared to fiscal year 2024.

The increase was primarily due to the $20.4 million impact of unfavorable working capital fluctuations, driven by the timing of rent expense, payroll, and other payments in the ordinary course of business, as well as a $2.3 million Spyce milestone payment.

The remaining change was related to a $33.4 million decrease in income after excluding non-cash items .

For fiscal year 2024 , cash provided by operating activities increased $16.9 million compared to fiscal year 2023, primarily due to a $20.9 million reduction in net loss after excluding non-cash items and a $4.0 million favorable working capital fluctuation, which is primarily related to the timing of payroll and other payments in the ordinary course of business, offset by the $3.4 million receipt of Employee Retention Credit in fiscal year 2023.

Investing Activities

For fiscal year 2024, cash used in investing activities was $92.2 million, a decrease of $3.5 million compared to fiscal year 2023.

Investing activities in fiscal year 2024 consisted primarily of purchases of property and equipment of $84.5 million related to 25 gross new restaurant openings (excluding tenant improvement allowances), restaurants in process, renovations, and prepayments associated with the deployment of our Infinite Kitchen units and other restaurant-related equipment.

In addition we had cash outflow for fiscal year 2024 of $7.7 million related to purchase of intangible assets.

For fiscal year 2025, cash used in investing activities was $114.3 million, an increase of $22.0 million compared to fiscal year 2024.

Investing activities in fiscal year 2025 consisted primarily of purchases of property and equipment of $106.5 million related to 39 gross new restaurant openings (excluding tenant improvement allowances), restaurants in process, renovations, and prepayments associated with the deployment of Infinite Kitchen units and other restaurant-related equipment.

In addition, we had cash outflow for fiscal year 2025 of $7.8 million related to purchases of intangible assets.

For fiscal year 2024, cash used in investing activities was $92.2 million, a decrease of $3.5 million compared to fiscal year 2023.

Investing activities in fiscal year 2023 consisted primarily of purchases of property and equipment of $89.7 million related to 38 gross new restaurant openings (excluding tenant improvement allowances), restaurants in process, renovations, and prepayments associated with restaurant-related equipment.

In addition, we had a cash outflow for fiscal year 2023 of $6.1 million related to the purchase of intangible assets.

For fiscal year 2022, cash used in investing activities was $102.0 million.

Investing activities in fiscal year 2022 consisted primarily of purchases of property and equipment of $96.9 million related to 39 gross new restaurant openings (excluding tenant improvement allowances), restaurants in process, renovations, and prepayments associated with restaurant-related equipment.

In addition, we had a cash outflow for fiscal year 2022 of $5.4 million related to purchase of intangibles assets.

Investing activities in fiscal year 2024 consisted primarily of purchases of property and equipment of $84.5 million related to 25 gross new restaurant openings (excluding tenant improvement allowances), restaurants in process, renovations, and prepayments associated with the deployment of Infinite Kitchen units and restaurant-related equipment.

In addition, we had cash outflow for fiscal year 2024 of $7.7 million related to purchases of intangible assets.

Financing Activities

For fiscal year 2024, cash (used in) provided by financing activities increased $14.1 million compared to fiscal year 2023, primarily due to the in crease in proceeds received from stock option exercises of $7.4 million and a $6.6 million decrease in Spyce milestone payments .

For fiscal year 2023, cash (used in) provided by financing activities increased $9.8 million compared to fiscal year 2022, primarily due to the $10.4 million Spyce milestone true-up payment, offset by an in crease in proceeds received from stock option exercises of $0.6 million.

For fiscal year 2025, cash provided by financing activities decreased $6.0 million compared to fiscal year 2024, primarily due to the $9.6 million de crease in proceeds received from stock option exercises, partially offset by the $3.9 million Spyce milestone payment made in 2024 .

For fiscal year 2024, cash provided by financing activities increased $14.1 million compared to fiscal year 2023, primarily due to the $7.4 million in crease in proceeds received from stock option exercises, and a $6.6 million decrease in Spyce milestone payments .

Critical Accounting Estimates

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These estimates and assumptions affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the balance sheet date, as well as reported amounts of revenue and expenses during the reporting period.

Our most significant estimates and judgments involve difficult, subjective, or complex judgements made by management.

Our most significant estimates and judgments involve difficult, subjective, or complex judgments made by management.

Actual results may differ from these estimates.

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We believe that the accounting policies described below involve a greater degree of judgment and complexity.

Accordingly, these are the policies we believe are the most critical to aid in fully understanding and evaluating

our financial condition and results of operations.

Accordingly, these are the policies we believe are the most critical to aid in fully understanding and evaluating our financial condition and results of operations.

For further information, see Note 1 to our audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K.

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Operating lease liabilities represent the present value of lease payments not yet paid.

We made the policy election to combine lease and non-lease components, and we also consider fixed common area maintenance (“CAM”) part of our fixed future lease payments.

We made the policy election to combine lease and non-lease components, and we also consider fixed CAM part of our fixed future lease payments.

Fixed CAM is also included in our operating lease liability.

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A number of significant assumptions and estimates are involved in the application of the model to forecast operating cash flows, which are largely unobservable inputs and, accordingly, are classified as Level 3 inputs within the fair value hierarchy.

Assumptions used in these forecasts are consistent with internal planning, and include revenue growth rates, gross margins, and operating expense in relation to the current economic environment and our incremental borrowing rate, future expectations, competitive factors in its various markets, inflation, revenue trends, market rents for the operating lease and other relevant economic factors that may impact the store under evaluation.

Assumptions used in these forecasts are consistent with internal planning, and include revenue growth rates, gross margins and operating expense in relation to the current economic environment, the discount rate, future expectations, competitive factors in its various markets, inflation, revenue trends, market rents for the operating lease and other relevant economic factors that may impact the store under evaluation.

Additionally, for corporate-level corporate assets for operating lease assets, assumptions used include monthly market rent, annual rent increases, cash flow period, free rent period, estimated tenant improvements and discount rate.

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Our projections are estimates, which could vary significantly, either favorably or unfavorably, from actual results if future economic conditions, consumer demand and competitive environments differ from our expectations.

At this time, we do not believe that there is a reasonable likelihood that there will be a material change in the future estimates or assumptions that we use to calculation our impairment charge.

We recorded non-cash impairment charges of $1.7 million during fiscal year December 29, 2024 associated with’ one location, of which $1.3 million related to certain property and equipment and $0.4 million related to the

operating use asset .

We recorded non-cash impairment charges of $4.3 million during the fiscal year ended December 31, 2023, wherein the entire $4.3 million balance was related to the operating lease asset for our former Sweetgreen Support Center previously vacated during fiscal year 2022, and was recorded under restructuring charges within the consolidated statement of operations.

Contingent Consideration

Due to certain conversion features, the contingent consideration issued as part of the Spyce acquisition is considered a liability in accordance with ASC 480.

The liability associated with the contingent consideration is initially recorded at fair value upon issuance date and is subsequently re-measured to fair value at each reporting date.

For additional information, see Note 3 to our audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K.

The initial fair value of the liability for the contingent consideration was $16.4 million and was included as part of the purchase price for the Spyce acquisition.

The contingent consideration as of December 29, 2024 and December 31, 2023 wa s $15.0 million a nd $8.4 million, respectively.

Additionally, for the fiscal year ended December 31, 2023, we recorded the current portion of the contingent consideration of $6.0 million within other current liabilities in the consolidated balance sheet within this Annual Report on Form 10-K.

Changes in fair value of the contingent consideration are recognized within other expense, net in the accompanying consolidated statement of operations.

At this time, we do not believe that there is a reasonable likelihood that there will be a material change in the future estimates or assumptions that we use to calculate our impairment charge.

We recorded non-cash impairment charges of $11.3 million during fiscal year December 28, 2025 associated with twelve store locations, of which $9.7 million related to certain property and equipment and $1.6 million related to operating lease assets.

We recorded non-cash impairment charges of $1.7 million during the fiscal year ended December 29, 2024 associated with one location, of which $1.3 million related to certain property and equipment and $0.4 million related to operating lease assets.

Recent Accounting Pronouncements

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We are exposed to commodity price risks.

Many of the ingredients we use to prepare our food, as well as our packaging materials and utilities to run our restaurants, are ingredients or commodities that are affected by the price of other commodities, exchange rates, inflation, foreign demand, weather, seasonality, production, availability and other factors outside our control.

Many of the ingredients we use to prepare our food, as well as our packaging materials and utilities to run our restaurants, are ingredients or commodities that are affected by the price of other commodities, exchange rates, inflation, foreign demand, weather, trade tariffs, seasonality, production, availability and other factors outside our control.

We work closely with our suppliers and use a mix of forward pricing protocols under which we agree with our supplier on fixed prices for deliveries at some time in the future, fixed pricing protocols under which we agree on a fixed price with our supplier for the duration of that protocol, formula pricing protocols under which the prices we pay are based on a specified formula related to the prices of the goods, such as spot prices, and range forward protocols under which we agree on a price range for the duration of that protocol.

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In some cases, we have minimum purchase obligations.

We have tried to increase, where practical, the number of suppliers for our ingredients, which we believe can help mitigate pricing volatility, and we follow industry news, trade issues, exchange rates, foreign demand, weather, crises, and other world events that may affect our ingredient prices.

We have tried to increase, where practical, the number of suppliers for our ingredients, which we believe can help mitigate pricing volatility, and we follow industry news, trade issues, exchange rates, f oreign demand, weather, crises, and other world events that may affect our ingredient prices.

Increases in ingredient prices could adversely affect our results if we choose for competitive or other reasons not to increase menu prices at the same rate at which ingredient costs increase, or if menu price increases result in customer resistance.

We also could experience shortages of key ingredients if our suppliers need to close or restrict operations due to unforeseen events.

Due to the recent pace of inflation and other global supply chain risks, including extreme weather conditions, suppliers and distributors have, and could continue to, attempt to renegotiate our existing contracts to increase prices, as well as assess certain fuel surcharges.

These changes could have a negative impact on our

commodity prices.

Due to the recent pace of inflation and other global supply chain risks, including extreme weather conditions, suppliers and distributors have renegotiated, and could continue to attempt to renegotiate, our existing contracts to increase prices, as well as assess certain fuel surcharges.

These changes could have a negative impact on our commodity prices.

For example, in the fourth quarter of fiscal year 2024, as a result of extreme weather conditions, we experienced supply chain disruptions for tomatoes and cucumbers, which resulted in higher prices for those products or resulted in temporarily discontinuing those products in certain geographic markets.

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Changes in interest rates affect the interest income we earn, and therefore impact our cash flows and results of operations.

As of December 29, 2024 and December 31, 2023, we ha d $214.8 million and $257.2 million of cash and cash equivalents, respectively, consisting of bank accounts and money market funds, and $2.6 million and $0.1 million, respectively, o f restricted cash relating to certificates of deposit that are collateral for letters of credit to our lease agreements and cash from the Spyce acquisition.

As of December 28, 2025 and December 29, 2024, we ha d $89.2 million and $214.8 million of cash and cash equivalents, respectively, consisting of bank accounts and money market funds, and $4.2 million and $2.6 million, respectively, o f restricted cash relating to certificates of deposit that are collateral for letters of credit to our lease agreements.

Interest-earning instruments carry a degree of interest rate risk.

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An economic downturn could increase unemployment and lower consumer confidence.

Macroeconomic conditions also negatively impact consumer discretionary spending and could negatively impact our Restaurant Level Profit.

Macroeconomic conditions also negatively impact consumer discretionary spending and have negatively impacted our Restaurant Level Profit and results of operations in recent periods.

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-K

Item 7. Management’s Discussion and Analysis