What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2025-11-04 compared with 2025-07-30 · 97 added, 85 removed, 310 unchanged (37% of the section changed)

12 unchanged sentences

We believe our asset-light, highly-franchised business model generates strong operating margins and requires low capital expenditures, creating stockholder value through strong and consistent free cash flow and capital-efficient growth.

Highlights for the fiscal second quarter 2025 compared to the fiscal second quarter 2024:

Highlights for the fiscal third quarter 2025 compared to the fiscal third quarter 2024:

• System-wide sales increased 10.0% to $1.4 billion;

• 129 net new openings in the fiscal second quarter 2025;

• 114 net new openings in the fiscal third quarter 2025;

• Domestic same store sales decreased 5.6%;

• Total revenue increased 8.1% to $175.7 million;

• Net income decreased 2.6% to $26.8 million, or $0.96 per diluted share;

• Net income increased 10.7% to $28.5 million, or $1.02 per diluted share;

• Adjusted net income and adjusted earnings per diluted share, both non-GAAP measures, increased 15.6% to $30.4 million, or $1.09 per diluted share;

• Adjusted EBITDA, a non-GAAP measure, increased 18.6% to $63.7 million.

Highlights for the year-to-date second quarter of 2025 compared to the year-to-date second quarter of 2024:

Highlights for the year-to-date third quarter of 2025 compared to the year-to-date third quarter of 2024:

• System-wide sales increased 13.1% to $4.0 billion;

• 255 net new openings in the year-to-date second quarter of 2025;

• 369 net new openings in the year-to-date third quarter of 2025;

• Domestic same store sales decreased 2.4%;

7 unchanged sentences

Management reviews the number of new restaurants, the number of closed restaurants, and the number of acquisitions and divestitures of restaurants to assess net new restaurant growth.

Thirteen Weeks Ended Twenty-Six Weeks Ended

2025 June 29,

2024 June 28,

2025 June 29,

Thirteen Weeks Ended Thirty-Nine Weeks Ended

September 27,

2025 September 28,

2024 September 27,

2025 September 28,

Domestic Franchised Activity:

44 unchanged sentences

For a reconciliation of net income to Adjusted net income and for further discussion of Adjusted net income and Adjusted earnings per diluted share as non-GAAP measures and how we utilize them, see footnote 3 below.

The following table sets forth our key performance indicators for the thirteen and twenty-six weeks ended June 28, 2025 and June 29, 2024 (in thousands, except unit data):

Thirteen Weeks Ended Twenty-Six Weeks Ended

June 28, 2025 June 29, 2024 June 28, 2025 June 29, 2024

The following table sets forth our key performance indicators for the thirteen and thirty-nine weeks ended September 27, 2025 and September 28, 2024 (in thousands, except unit data):

Thirteen Weeks Ended Thirty-Nine Weeks Ended

September 27, 2025 September 28, 2024 September 27, 2025 September 28, 2024

Number of system-wide restaurants open at end of period 2,932 2,458 2,932 2,458

10 unchanged sentences

$ 30,393 $ 26,285 $ 86,639 $ 82,517

(1) The percentage of system-wide sales attributable to company-owned restaurants was 2.4% and 2.5% for the thirteen and twenty-six weeks ended June 28, 2025 and June 29, 2024, respectively.

(1) The percentage of system-wide sales attributable to company-owned restaurants was 2.4% and 2.5% for the thirteen and thirty-nine weeks ended September 27, 2025 and September 28, 2024, respectively.

The remainder was generated by franchised restaurants, as reported by our franchisees.

25 unchanged sentences

Each of the normal recurring adjustments and other adjustments described in this paragraph and in the reconciliation table below help management measure our core operating performance over time by removing items that are not related to day-to-day operations.

The following table reconciles net income to EBITDA and Adjusted EBITDA for the thirteen and twenty-six weeks ended June 28, 2025 and June 29, 2024 (in thousands):

Thirteen Weeks Ended Twenty-Six Weeks Ended

2025 June 29,

2024 June 28,

2025 June 29,

The following table reconciles net income to EBITDA and Adjusted EBITDA for the thirteen and thirty-nine weeks ended September 27, 2025 and September 28, 2024 (in thousands):

Thirteen Weeks Ended Thirty-Nine Weeks Ended

September 27,

2025 September 28,

2024 September 27,

2025 September 28,

Net income $ 28,478 $ 25,732 $ 147,506 $ 81,964

10 unchanged sentences

2,063 727 4,909 727

Stock-based compensation expense (e)

Amortization of capitalized system implementation costs (e)

Stock-based compensation expense (f)

6,072 7,273 17,601 16,011

5 unchanged sentences

Refer to Note 9 in the Consolidated Financial Statements for additional information.

(d) System implementation costs represent non-recurring expenses incurred related to the development and implementation of new enterprise resource planning and human capital management technology, which are included in Selling, general and administrative on the Consolidated Statements of Comprehensive Income.

(e) Includes non-cash, stock-based compensation, net of forfeitures.

(d) System implementation costs represent non-recurring expenses incurred related to the development and implementation of new enterprise resource planning, human capital management, and global development technology, which are included in Selling, general and administrative on the Consolidated Statements of Comprehensive Income.

(e) Represents amortization associated with capitalized cloud computing costs related to our system implementation, which are included in Selling, general and administrative on the Consolidated Statements of Comprehensive Income.

(f) Includes non-cash, stock-based compensation, net of forfeitures.

(3) Adjusted net income and adjusted earnings per diluted share are supplemental measures of operating performance that do not represent and should not be considered alternatives to net income and earnings per share, as determined by GAAP.

2 unchanged sentences

Additionally, management believes adjusted net income and adjusted earnings per diluted share supplement GAAP measures and enable management to more effectively evaluate the Company’s performance period-over-period and relative to competitors.

The following table reconciles net income to Adjusted net income and calculates adjusted earnings per diluted share for the thirteen and twenty-six weeks ended June 28, 2025 and June 29, 2024 (in thousands):

Thirteen Weeks Ended Twenty-Six Weeks Ended

2025 June 29,

2024 June 28,

2025 June 29,

The following table reconciles net income to Adjusted net income and calculates adjusted earnings per diluted share for the thirteen and thirty-nine weeks ended September 27, 2025 and September 28, 2024 (in thousands):

Thirteen Weeks Ended Thirty-Nine Weeks Ended

September 27,

2025 September 28,

2024 September 27,

2025 September 28,

Net income $ 28,478 $ 25,732 $ 147,506 $ 81,964

5 unchanged sentences

2,063 727 4,909 727

Tax effect of adjustments (e)

Amortization of capitalized system implementation costs (e)

Tax effect of adjustments (f)

(605) (174) 19,221 (174)

7 unchanged sentences

Refer to Note 9 in the Consolidated Financial Statements for additional information.

(e) Represents the tax effect of the aforementioned adjustments to reflect corporate income taxes at an assumed effective tax rate of 24% for the thirteen and twenty-six weeks ended June 28, 2025, which includes provisions for U.S.

(f) Represents the tax effect of the aforementioned adjustments to reflect corporate income taxes at an assumed effective tax rate of 24% for the thirteen and thirty-nine weeks ended September 27, 2025, which includes provisions for U.S.

federal income taxes, and assumes the respective statutory rates for applicable state and local jurisdictions.

Results of Operations

Thirteen Weeks Ended June 28, 2025 compared to Thirteen Weeks Ended June 29, 2024

The following table sets forth our results of operations for the thirteen weeks ended June 28, 2025 and June 29, 2024 (dollars in thousands):

Thirteen Weeks Ended September 27, 2025 compared to Thirteen Weeks Ended September 28, 2024

The following table sets forth our results of operations for the thirteen weeks ended September 27, 2025 and September 28, 2024 (dollars in thousands):

Thirteen Weeks Ended Increase / (Decrease)

2025 June 29,

September 27,

2025 September 28,

Royalty revenue, franchise fees and other $ 81,187 $ 74,395 $ 6,792 9.1 %

11 unchanged sentences

Interest expense, net 9,201 5,130 4,071 79.4 %

Investment income, net — (471) 471 — %

Investment (income) expense 128 (800) 928 (116.0) %

Income before income tax expense 39,632 35,488 4,144 11.7 %

2 unchanged sentences

(1) Cost of sales includes all operating expenses of company-owned restaurants, including advertising expenses, but excludes depreciation and amortization, which are presented separately.

During the thirteen weeks ended June 28, 2025, total revenue was $174.3 million, an increase of $18.6 million, or 12.0%, compared to $155.7 million in the comparable period in 2024.

During the thirteen weeks ended September 27, 2025, total revenue was $175.7 million, an increase of $13.2 million, or 8.1%, compared to $162.5 million in the comparable period in 2024.

Royalty revenue, franchise fees and other increased $6.8 million, of which $10.6 million was due to net new franchise restaurant development, partially offset by a decrease of $3.6 million due to a decline in domestic same store sales growth of 5.6%.

Advertising fees increased $7.3 million primarily due to a 13.9% increase in system-wide sales during the fiscal second quarter 2025.

Advertising fees increased $5.3 million primarily due to a 10.0% increase in system-wide sales during the fiscal third quarter 2025.

$2.3 million of the increase was due to an increase in the national advertising fund contribution rate to 5.5%, effective the first day of the fiscal first quarter 2025.

Company-owned restaurant sales increased $2.6 million, of which $1.8 million was related to company-owned same store sales growth of 3.6%, driven primarily by an increase in transactions, and $0.8 million was related to company-owned restaurants opened and acquired since the prior fiscal second quarter.

Company-owned restaurant sales increased $1.2 million, primarily due to company-owned same store sales growth of 3.8%, driven primarily by an increase in transactions.

Cost of sales

1 unchanged sentence

Thirteen Weeks Ended

June 28, 2025 June 29, 2024

September 27, 2025 September 28, 2024

In dollars As a % of company-owned restaurant sales In dollars As a % of company-owned restaurant sales

4 unchanged sentences

Total cost of sales $ 24,342 74.8 % $ 24,367 77.8 %

Food, beverage and packaging costs as a percentage of company-owned restaurant sales were 36.8% in the thirteen weeks ended June 28, 2025, compared to 35.8% in the comparable period in 2024.

This increase as a percentage of company-owned restaurant sales was primarily due to a shift in mix to bone-in from boneless products during the second fiscal quarter 2025, partially offset by a 6.0% decrease in the cost of bone-in chicken wings as compared to the prior year period.

Labor costs as a percentage of company-owned restaurant sales were 22.9% for the thirteen weeks ended June 28, 2025, compared to 23.4% for the thirteen weeks ended June 29, 2024.

The decrease as a percentage of company-owned restaurant sales was primarily due to sales leverage as a result of the sale of corporate restaurants in the New York market to an existing franchisee during the fiscal fourth quarter 2024, partially offset by an increase in company-owned restaurant wages.

Other restaurant operating expenses as a percentage of company-owned restaurant sales were 17.9% for the thirteen weeks ended June 28, 2025, compared to 19.3% for the thirteen weeks ended June 29, 2024.

Food, beverage and packaging costs as a percentage of company-owned restaurant sales were 36.2% in the thirteen weeks ended September 27, 2025, compared to 37.0% in the comparable period in 2024.

This decrease as a percentage of company-owned restaurant sales was primarily due to a 15.9% decrease in the cost of bone-in chicken wings as compared to the prior year period.

Labor costs as a percentage of company-owned restaurant sales were 23.1% for the thirteen weeks ended September 27, 2025, compared to 23.5% for the thirteen weeks ended September 28, 2024.

Other restaurant operating expenses as a percentage of company-owned restaurant sales were 17.9% for the thirteen weeks ended September 27, 2025, compared to 20.0% for the thirteen weeks ended September 28, 2024.

Advertising expenses

During the thirteen weeks ended June 28, 2025, advertising expenses were $65.5 million, an increase of $7.0 million compared to $58.5 million in the comparable period in 2024.

During the thirteen weeks ended September 27, 2025, advertising expenses were $65.5 million, an increase of $4.6 million compared to $61.0 million in the comparable period in 2024.

Advertising expenses are recognized at the same time the related revenue is recognized, which does not necessarily correlate to the actual timing of the related advertising spend.

Selling, general and administrative (“SG&A”)

During the thirteen weeks ended June 28, 2025, SG&A expense was $32.9 million, an increase of $4.8 million compared to $28.1 million in the comparable period in 2024.

The increase in SG&A expense was driven by an increase in headcount related expenses, inclusive of stock-based compensation, of $3.8 million to support the growth in our business and system implementation costs of $1.5 million during the fiscal second quarter 2025, partially offset by a decrease of $2.0 million in professional and other fees.

During the thirteen weeks ended September 27, 2025, SG&A expense was $30.7 million, a decrease of $1.6 million compared to $32.3 million in the comparable period in 2024.

The decrease in SG&A expense was driven by a decrease in headcount-related expenses, inclusive of stock-based compensation, of $3.2 million, partially offset by system implementation costs of $2.1 million during the fiscal third quarter 2025.

Depreciation and amortization

During the thirteen weeks ended June 28, 2025, depreciation and amortization was $6.2 million, an increase of $1.1 million compared to $5.2 million in the comparable period in 2024.

During the thirteen weeks ended September 27, 2025, depreciation and amortization was $6.2 million, an increase of $1.2 million compared to $5.1 million in the comparable period in 2024.

The increase in depreciation and amortization was primarily due to capital expenditures related to our technology investments.

Interest expense, net

During the thirteen weeks ended June 28, 2025, interest expense, net was $8.5 million, an increase of $3.3 million compared to $5.2 million of interest expense, net in the comparable period in 2024.

During the thirteen weeks ended September 27, 2025, interest expense, net was $9.2 million, an increase of $4.1 million compared to $5.1 million of interest expense, net in the comparable period in 2024.

The increase was primarily driven by $7.3 million in interest expense related to the securitized financing transaction completed on December 3, 2024, which increased our outstanding debt by $500 million, partially offset by additional interest income earned on our cash balances, as compared to the prior year period.

Income tax expense

During the thirteen weeks ended June 28, 2025, we recognized income tax expense of $10.0 million, yielding an effective tax rate of 27.2%, comparable to an effective tax rate of 24.7% in the prior year period.

The increase in the effective tax rate is primarily related to the impact of nondeductible expenses for executive compensation during the thirteen weeks ended June 28, 2025.

Twenty-Six Weeks Ended June 28, 2025 compared to Twenty-Six Weeks Ended June 29, 2024

The following table sets forth our results of operations for the twenty-six weeks ended June 28, 2025 and June 29, 2024 (dollars in thousands):

Twenty-Six Weeks Ended Increase / (Decrease)

2025 June 29,

During the thirteen weeks ended September 27, 2025, we recognized income tax expense of $11.2 million, yielding an effective tax rate of 28.1%, compared to an effective tax rate of 27.5% in the prior year period.

The increase in the effective tax rate is primarily related to the impact of nondeductible expenses for executive compensation during the thirteen weeks ended September 27, 2025.

Thirty-Nine Weeks Ended September 27, 2025 compared to Thirty-Nine Weeks Ended September 28, 2024

The following table sets forth our results of operations for the thirty-nine weeks ended September 27, 2025 and September 28, 2024 (dollars in thousands):

Thirty-Nine Weeks Ended Increase / (Decrease)

September 27,

2025 September 28,

Royalty revenue, franchise fees and other $ 239,851 $ 212,652 $ 27,199 12.8 %

12 unchanged sentences

Interest expense, net 26,580 14,874 11,706 78.7 %

Investment income, net (93,839) (774) (93,065) NM*

Investment (income) expense (93,711) (1,574) (92,137) NM*

Income before income tax expense 199,587 110,476 89,111 80.7 %

3 unchanged sentences

*Not meaningful.

During the twenty-six weeks ended June 28, 2025, total revenue was $345.4 million, an increase of $43.9 million, or 14.6%, compared to $301.5 million in the comparable period in 2024.

During the thirty-nine weeks ended September 27, 2025, total revenue was $521.2 million, an increase of $57.2 million, or 12.3%, compared to $464.0 million in the comparable period in 2024.

Royalty revenue, franchise fees and other increased $27.2 million, of which $31.3 million was due to net new franchise restaurant development, partially offset by a decrease of $4.5 million due to a decline in domestic same store sales growth of 2.4%.

Advertising fees increased $19.4 million due to a 14.8% increase in system-wide sales during the twenty-six weeks ended June 28, 2025, and $7.9 million of the increase was due to an increase in the national advertising fund contribution rate to 5.5%, effective the first day of the fiscal first quarter 2025.

Company-owned restaurant sales increased $4.1 million, primarily due to company-owned same store sales growth of 2.5%, which was driven primarily by an increase in transactions.

Advertising fees increased $24.7 million due to a 13.1% increase in system-wide sales during the thirty-nine weeks ended September 27, 2025, and $10.2 million of the increase was due to an increase in the national advertising fund contribution rate to 5.5%, effective the first day of the fiscal first quarter 2025.

Company-owned restaurant sales increased $5.3 million, of which $2.7 million was related to company-owned same store sales growth of 3.0%, which was driven primarily by an increase in transactions, and $2.6 million was related to company-owned restaurants opened and acquired since the prior fiscal third quarter.

Cost of sales

The table below presents the major components of cost of sales (dollars in thousands):

Twenty-Six Weeks Ended

June 28, 2025 June 29, 2024

Thirty-Nine Weeks Ended

September 27, 2025 September 28, 2024

In dollars As a % of company-owned restaurant sales In dollars As a % of company-owned restaurant sales

4 unchanged sentences

Total cost of sales $ 71,582 75.3 % $ 68,311 76.1 %

Food, beverage and packaging costs as a percentage of company-owned restaurant sales were 37.1% in the twenty-six weeks ended June 28, 2025, compared to 35.3% in the comparable period in 2024.

The increase as a percentage of company-owned restaurant sales was primarily due to a shift in mix to bone-in from boneless products during the second fiscal quarter 2025, as well as a 2.6% increase in the cost of bone-in chicken wings as compared to the prior year period.

Labor costs as a percentage of company-owned restaurant sales were 23.3% for the twenty-six weeks ended June 28, 2025, compared to 23.4% in the comparable period in 2024.

The decrease as a percentage of company-owned restaurant sales was primarily due to sales leverage as a result of the sale of corporate restaurants in the New York market to an existing franchisee during the fiscal fourth quarter 2024, offset by an increase in company-owned restaurant wages.

Other restaurant operating expenses as a percentage of company-owned restaurant sales were 17.6% for the twenty-six weeks ended June 28, 2025, comparable to 19.1% in the prior fiscal year period in 2024.

Food, beverage and packaging costs as a percentage of company-owned restaurant sales were 36.8% in the thirty-nine weeks ended September 27, 2025, compared to 35.9% in the comparable period in 2024.

The increase as a percentage of company-owned restaurant sales was primarily due to an increase in other food costs during the third fiscal quarter 2025, partially offset by a 4.5% decrease in the cost of bone-in chicken wings as compared to the prior year period.

Labor costs as a percentage of company-owned restaurant sales were 23.2% for the thirty-nine weeks ended September 27, 2025, compared to 23.4% in the comparable period in 2024.

Other restaurant operating expenses as a percentage of company-owned restaurant sales were 17.7% for the thirty-nine weeks ended September 27, 2025, compared to 19.4% in the prior fiscal year period in 2024.

Advertising expenses

During the twenty-six weeks ended June 28, 2025, advertising expenses were $131.3 million, an increase of $19.6 million compared to $111.7 million in the comparable period in 2024.

During the thirty-nine weeks ended September 27, 2025, advertising expenses were $196.9 million, an increase of $24.2 million compared to $172.7 million in the comparable period in 2024.

Advertising expenses are recognized at the same time the related revenue is recognized, which does not necessarily correlate to the actual timing of the related advertising spend.

Selling, general and administrative (SG&A)

During the twenty-six weeks ended June 28, 2025, SG&A expense was $64.4 million, an increase of $11.1 million compared to $53.3 million in the comparable period in 2024.

The increase in SG&A expense was driven by an increase in headcount related expenses, inclusive of stock-based compensation, of $7.5 million to support the growth in our business, and an increase in consulting and other professional fees of $3.3 million associated with our strategic initiatives, which includes $2.8 million of system implementation costs.

During the thirty-nine weeks ended September 27, 2025, SG&A expense was $95.0 million, an increase of $9.5 million compared to $85.6 million in the comparable period in 2024.

The increase in SG&A expense was driven by an increase in headcount-related expenses, inclusive of stock-based compensation, of $5.2 million to support the growth in our business and system implementation costs of $4.9 million during the thirty-nine weeks ended September 27, 2025.

Depreciation and amortization

During the twenty-six weeks ended June 28, 2025, depreciation and amortization was $12.4 million, an increase of $3.9 million compared to $8.6 million in the comparable period in 2024.

During the thirty-nine weeks ended September 27, 2025, depreciation and amortization was $18.7 million, an increase of $5.1 million compared to $13.6 million in the comparable period in 2024.

The increase in depreciation and amortization was primarily due to capital expenditures related to our technology investments.

Interest expense, net

During the twenty-six weeks ended June 28, 2025, interest expense, net was $17.4 million, an increase of $7.6 million compared to $9.7 million of interest expense, net in the comparable period in 2024.

The increase was primarily driven by $15.0 million in interest expense related to the securitized financing transaction completed on December 3, 2024, which increased our outstanding debt by $500 million, partially offset by additional interest income earned on our cash balances and interest earned on our investments as compared to the twenty-six weeks ended June 29, 2024.

During the thirty-nine weeks ended September 27, 2025, interest expense, net was $26.6 million, an increase of $11.7 million compared to $14.9 million of interest expense, net in the comparable period in 2024.

The increase was primarily driven by $21.9 million in interest expense related to the securitized financing transaction completed on December 3, 2024, which

increased our outstanding debt by $500 million, partially offset by additional interest income earned on our cash balances and interest earned on our investments as compared to the thirty-nine weeks ended September 28, 2024.

Investment income, net

During the twenty-six weeks ended June 28, 2025, investment income, net was $93.8 million, an increase of $93.1 million compared to $0.8 million in the comparable period in 2024.

During the thirty-nine weeks ended September 27, 2025, investment income, net was $93.7 million, an increase of $92.1 million compared to $1.6 million in the comparable period in 2024.

The increase was driven almost entirely by a gain recorded on the sale of the Company’s unconsolidated equity method investment in its United Kingdom franchisee during the fiscal first quarter 2025.

Income tax expense

During the twenty-six weeks ended June 28, 2025, we recognized income tax expense of $40.9 million yielding an effective tax rate of 25.6%, which is comparable to an effective tax rate of 25.0% in the prior year period.

During the thirty-nine weeks ended September 27, 2025, we recognized income tax expense of $52.1 million yielding an effective tax rate of 26.1%, compared to an effective tax rate of 25.8% in the prior year period.

The increase in the effective tax rate is primarily related to the impact of nondeductible expenses for executive compensation during the thirty-nine weeks ended September 27, 2025.

Liquidity and Capital Resources

3 unchanged sentences

We generally utilize available cash flows from operations to invest in our business, service our debt obligations, pay dividends, and repurchase shares of our common stock (if any).

As of June 28, 2025, the Company had $227.9 million of cash and cash equivalents on its balance sheet.

As of September 27, 2025, the Company had $237.6 million of cash and cash equivalents on its balance sheet.

Based upon current levels of operations and anticipated growth, we expect that cash flows from operations, combined with our securitized financing facility, including our Variable Funding Notes, will be sufficient to meet our capital expenditure, working capital and debt service requirements for at least the next twelve months and the foreseeable future.

The following table shows summary cash flows information for the twenty-six weeks ended June 28, 2025 and June 29, 2024 (in thousands):

Twenty-Six Weeks Ended

2025 June 29,

The following table shows summary cash flows information for the thirty-nine weeks ended September 27, 2025 and September 28, 2024 (in thousands):

Thirty-Nine Weeks Ended

September 27,

2025 September 28,

Net cash provided by (used in):

7 unchanged sentences

Restaurant-level operating costs at our company-owned restaurants, unearned franchise and development fees, and corporate overhead costs also impact our cash flow from operating activities.

Net cash provided by operating activities was $31.9 million in the twenty-six weeks ended June 28, 2025, a decrease of $49.0 million from net cash provided by operating activities of $80.8 million in the twenty-six weeks ended June 29, 2024.

Net cash provided by operating activities was $95.8 million in the thirty-nine weeks ended September 27, 2025, a decrease of $54.1 million from net cash provided by operating activities of $149.9 million in the thirty-nine weeks ended September 28, 2024.

The decrease is primarily related to changes in Ad Fund cash and cash equivalents, directly related to the timing of payments for expenses incurred for national advertising, as well as changes in working capital.

Investing activities .

Our net cash provided by investing activities was $16.9 million in the twenty-six weeks ended June 28, 2025, a change of $42.2 million from net cash used in investing activities of $25.3 million in the twenty-six weeks ended June 29, 2024.

The change is primarily due to proceeds from the sale of our non-controlling interest in LPH of $107.7 million offset by reinvestment in the newly formed entity of $75.4 million, as well as proceeds from the sale of an office building of $17.3 million.

Our net cash provided by investing activities was $14.7 million in the thirty-nine weeks ended September 27, 2025, a change of $64.8 million from net cash used in investing activities of $50.1 million in the thirty-nine weeks ended September 28, 2024.

The change is primarily due to proceeds of $107.7 million from the sale of our non-controlling interest in LPH, partially offset by reinvestment in the newly formed entity of $75.4 million, as well as proceeds from the sale of an office building of $17.3 million.

Financing activities .

Our net cash used in financing activities was $149.2 million in the twenty-six weeks ended June 28, 2025, an increase of $104.0 million from net cash used in financing activities of $45.2 million in the twenty-six weeks ended June 29, 2024.

Our net cash used in financing activities was $197.4 million in the thirty-nine weeks ended September 27, 2025, an increase of $109.1 million from net cash used in financing activities of $88.3 million in the thirty-nine weeks ended September 28, 2024.

The increase is primarily related to an additional $96.5 million in common stock repurchased under our share repurchase program as compared to the prior fiscal year period.

5 unchanged sentences

In addition to the 2024 Notes, the Company’s outstanding debt consists of its existing Series 2022-1 3.734% Fixed Rate Senior Secured Notes, Class A-2 (the “2022 Class A-2 Notes”) and Series 2020-1 2.84% Fixed Rate Senior Secured Notes, Class A-2 (the “2020 Class A-2 Notes”).

During the fiscal second quarter of 2025, the Company continued to have a leverage ratio under the 2020 Class A-2 Notes, the 2022 Class A-2 Notes, and 2024 Class A-2 Notes of less than 5.0x.

During the fiscal third quarter of 2025, the Company continued to have a leverage ratio under the 2020 Class A-2 Notes, the 2022 Class A-2 Notes, and 2024 Class A-2 Notes of less than 5.0x.

Per the terms of the Company’s debt agreements, principal payments can be suspended at the borrower’s election until the repayment date, as long as the Company maintains a leverage ratio of less than 5.0x.

Accordingly, the Company elected to suspend payments, and the entire outstanding balance of the 2020 Class A-2 Notes, the 2022 Class A-2 Notes, and the 2024 Class A-2 Notes has been classified as long-term debt due after fiscal year 2026.

We paid a quarterly cash dividend of $0.27 per share of common stock in each of the first two quarters of 2025, aggregating $15.1 million in the twenty-six weeks ended June 28, 2025.

On July 29, 2025 the Company’s Board of Directors declared a dividend of $0.30 per share, to be paid on September 5, 2025 to stockholders of record as of August 15, 2025, totaling approximately $8.4 million.

We paid a quarterly cash dividend of $0.27 per share of common stock in each of the first two quarters of 2025, and a quarterly dividend of $0.30 in the third quarter of 2025, resulting in aggregate declared dividends of $23.5 million, or $0.84 per share of common stock, during the thirty-nine weeks ended September 27, 2025.

On November 3, 2025 the Company’s Board of Directors declared a dividend of $0.30 per share, to be paid on December 12, 2025 to stockholders of record as of November 21, 2025, totaling approximately $8.4 million.

We do not currently expect the restrictions in our debt instruments to impact our ability to make regular quarterly dividends pursuant to our quarterly dividend program.

2 unchanged sentences

On December 5, 2024, the Company’s Board of Directors authorized the repurchase of up to an additional $500.0 million of its outstanding shares of common stock under its existing share repurchase program (the “Share Repurchase Program”).

During the twenty-six weeks ended June 28, 2025, the Company repurchased and retired 830,012 shares of its common stock at an average price of $257.40 per share, inclusive of common stock received as part of the final settlement under an accelerated share repurchase agreement.

As of June 28, 2025, $191.3 million remained available under the Share Repurchase Program.

During the thirty-nine weeks ended September 27, 2025, the Company repurchased and retired 970,115 shares of its common stock at an average price of $261.42 per share, inclusive of common stock received as part of the final settlement under an accelerated share repurchase agreement.

As of September 27, 2025, $151.3 million remained available under the Share Repurchase Program.

The authorization for the repurchase continues until all such shares have been repurchased or the repurchase plan is terminated by action of the Company’s Board of Directors.

48 unchanged sentences

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis