What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-04-29 compared with 2025-11-04 · 71 added, 160 removed, 247 unchanged (48% 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 third quarter 2025 compared to the fiscal third quarter 2024:

Highlights for the fiscal first quarter 2026 compared to the fiscal first quarter 2025:

• System-wide sales increased 5.9% to $1.4 billion;

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

• 97 net new openings in the fiscal first quarter 2026;

• Domestic same store sales decreased 8.7%;

• Total revenue increased 7.4% to $183.7 million;

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

• Net income decreased 67.6% to $29.9 million, or $1.08 per diluted share;

• Adjusted net income and adjusted earnings per diluted share, both non-GAAP measures, increased 14.7% to $32.5 million, or $1.18 per diluted share;

• Adjusted EBITDA, a non-GAAP measure, increased 9.9% to $65.4 million.

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;

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

• Domestic same store sales decreased 2.4%;

• Total revenue increased 12.3% to $521.2 million;

• Net income increased 80.0% to $147.5 million, or $5.24 per diluted share;

• Adjusted net income and adjusted earnings per diluted share, both non-GAAP measures, were $86.6 million, or $3.08 per diluted share;

• Adjusted EBITDA, a non-GAAP measure, increased 17.1% to $182.4 million.

Key Performance Indicators

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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 Thirty-Nine Weeks Ended

September 27,

2025 September 28,

2024 September 27,

2025 September 28,

Thirteen Weeks Ended

2026 March 29,

Domestic Franchised Activity:

1 unchanged sentence

Openings 67 96

Closures — — — —

Acquired by Company — (3) (3) (4)

Restaurants end of period 2,596 2,250

1 unchanged sentence

Beginning of period 57 50

Openings 1 1 3 3

Closures — — (1) —

Acquired by Company — 3 3 4

Restaurants end of period 57 51

26 unchanged sentences

We define EBITDA as net income before interest expense, net, income tax expense (benefit), and depreciation and amortization.

We define Adjusted EBITDA as net income before interest expense, net, income tax expense (benefit), and depreciation and amortization, with further adjustments for losses on debt extinguishment and financing transactions, transaction costs, costs and fees associated with investments in our strategic initiatives, certain system implementation costs, gains and losses on non-recurring transactions, and stock-based compensation expense.

We define Adjusted EBITDA as net income before interest expense, net, income tax

expense (benefit), and depreciation and amortization, with further adjustments for losses on debt extinguishment and financing transactions, transaction costs, costs and fees associated with investments in our strategic initiatives, certain system implementation costs, gains and losses on non-recurring transactions, certain restructuring charges, and stock-based compensation expense.

Adjusted EBITDA may not be comparable to other similarly titled captions of other companies due to differences in methods of calculation.

1 unchanged sentence

Adjusted Net Income and Adjusted Earnings Per Diluted Share.

We define Adjusted net income as net income adjusted for losses on debt extinguishment and financing transactions, transaction costs, costs and fees associated with investments in our strategic initiatives, gains and losses on non-recurring transactions, certain system implementation costs, and related tax adjustments that management believes are not indicative of the Company’s core operating results or business outlook over the long term.

We define Adjusted net income as net income adjusted for losses on debt extinguishment and financing transactions, transaction costs, costs and fees associated with investments in our strategic initiatives, gains and losses on non-recurring transactions, certain system implementation costs, certain restructuring charges, and related tax adjustments that management believes are not indicative of the Company’s core operating results or business outlook over the long term.

We define Adjusted earnings per diluted share as Adjusted net income divided by weighted average diluted share count.

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 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

The following table sets forth our key performance indicators for the thirteen weeks ended March 28, 2026 and March 29, 2025 (in thousands, except unit data):

Thirteen Weeks Ended

March 28, 2026 March 29, 2025

Number of system-wide restaurants open at end of period 3,153 2,689

10 unchanged sentences

$ 32,469 $ 28,316

(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.

(1) The percentage of system-wide sales attributable to company-owned restaurants was 2.4% and 2.3% for the thirteen weeks ended March 28, 2026 and March 29, 2025, respectively.

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

22 unchanged sentences

We compensate for these limitations by relying primarily on our GAAP results and using these non-GAAP measures only as performance measures and supplementally.

As noted in the table below, Adjusted EBITDA includes adjustments for losses on debt extinguishment and financing transactions, transaction costs, costs and fees associated with investments in our strategic initiatives, certain system implementation costs, gains and losses on non-recurring transactions, and stock-based compensation expense.

We believe these adjustments are appropriate because the amounts recognized can vary significantly from period to period, do not directly relate to the ongoing operations of our restaurants, and complicate comparisons of our internal operating results and operating results of other restaurant companies over time.

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 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,

The following table reconciles net income to EBITDA and Adjusted EBITDA for the thirteen weeks ended March 28, 2026 and March 29, 2025 (in thousands):

Thirteen Weeks Ended

2026 March 29,

Net income $ 29,883 $ 92,265

7 unchanged sentences

Gain on sale of investment (c)

— — (92,485) —

System implementation costs (d)

2,063 727 4,909 727

Amortization of capitalized system implementation costs (e)

Stock-based compensation expense (f)

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

Restructuring charges (f)

Stock-based compensation expense (g)

Adjusted EBITDA $ 65,403 $ 59,497

6 unchanged sentences

(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.

(f) Represents certain restructuring charges related to corporate realignment announced on January 13, 2026.

(g) 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 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,

The following table reconciles net income to Adjusted net income and calculates adjusted earnings per diluted share for the thirteen weeks ended March 28, 2026 and March 29, 2025 (in thousands):

Thirteen Weeks Ended

2026 March 29,

Net income $ 29,883 $ 92,265

2 unchanged sentences

Gain on sale of investment (c)

— — (92,485) —

System implementation costs (d)

2,063 727 4,909 727

Amortization of capitalized system implementation costs (e)

Tax effect of adjustments (f)

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

Restructuring charges (f)

Tax effect of adjustments (g)

Adjusted net income $ 32,469 $ 28,316

8 unchanged sentences

(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.

(f) Represents certain restructuring charges related to corporate realignment announced on January 13, 2026.

(g) Represents the tax effect of the aforementioned adjustments to reflect corporate income taxes at an assumed effective tax rate of 24% for the thirteen weeks ended March 28, 2026, 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 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 March 28, 2026 compared to Thirteen Weeks Ended March 29, 2025

The following table sets forth our results of operations for the thirteen weeks ended March 28, 2026 and March 29, 2025 (dollars in thousands):

Thirteen Weeks Ended Increase / (Decrease)

September 27,

2025 September 28,

2026 March 29,

Royalty revenue, franchise fees and other $ 87,470 $ 78,775 $ 8,695 11.0 %

8 unchanged sentences

Depreciation and amortization 6,841 6,228 613 9.8 %

Loss on disposal of assets — 6,535 (6,535) NM*

Total costs and expenses 133,317 132,833 484 0.4 %

1 unchanged sentence

Interest expense, net 9,764 8,910 854 9.6 %

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

Investment (income) expense 72 (93,839) 93,911 NM*

Income before income tax expense 40,572 123,190 (82,618) (67.1) %

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

*Not meaningful.

During the thirteen weeks ended March 28, 2026, total revenue was $183.7 million, an increase of $12.6 million, or 7.4%, compared to $171.1 million in the comparable period in 2025.

Royalty revenue, franchise fees and other increased $8.7 million, primarily driven by $12.2 million from net new franchise restaurant development and a $3.4 million increase in vendor rebates, partially offset by a $5.9 million decrease attributable to an 8.7% decline in domestic same store sales.

Company-owned restaurant sales increased $2.9 million, driven by six additional corporate stores opened or acquired since the prior year period.

Cost of sales

1 unchanged sentence

Thirteen Weeks Ended

September 27, 2025 September 28, 2024

March 28, 2026 March 29, 2025

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

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Total cost of sales $ 24,716 74.9 % $ 22,835 76.0 %

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.

Food, beverage and packaging costs as a percentage of company-owned restaurant sales were 35.8% in the thirteen weeks ended March 28, 2026, compared to 37.4% in the comparable period in 2025.

This decrease as a percentage of company-owned restaurant sales was primarily due to a 13.1% 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.

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 the national advertising fund contribution rate to 5.5%, effective the first day of the fiscal first quarter 2025.

Advertising expenses

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 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 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 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 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 %

Advertising fees 186,252 161,567 24,685 15.3 %

Company-owned restaurant sales 95,056 89,767 5,289 5.9 %

Total revenue 521,159 463,986 57,173 12.3 %

Costs and expenses:

Cost of sales (1)

71,582 68,311 3,271 4.8 %

Advertising expenses 196,869 172,705 24,164 14.0 %

Selling, general and administrative 95,036 85,569 9,467 11.1 %

Depreciation and amortization 18,681 13,625 5,056 37.1 %

Loss on disposal of assets 6,535 — 6,535 100.0 %

Total costs and expenses 388,703 340,210 48,493 14.3 %

Operating income 132,456 123,776 8,680 7.0 %

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

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

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

Income tax expense 52,081 28,512 23,569 82.7 %

Net income $ 147,506 $ 81,964 $ 65,542 80.0 %

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

*Not meaningful.

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 $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):

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

Food, beverage and packaging costs $ 34,960 36.8 % $ 32,186 35.9 %

Labor costs 22,096 23.2 % 21,017 23.4 %

Other restaurant operating expenses 16,840 17.7 % 17,438 19.4 %

Vendor rebates (2,314) (2.4) % (2,330) (2.6) %

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 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.

Labor costs as a percentage of company-owned restaurant sales were 23.9% for the thirteen weeks ended March 28, 2026, which was comparable to 23.8% for the thirteen weeks ended March 29, 2025.

Other restaurant operating expenses as a percentage of company-owned restaurant sales were 17.8% for the thirteen weeks ended March 28, 2026, compared to 17.3% for the thirteen weeks ended March 29, 2025.

The increase as a percentage of company-owned restaurant sales was due to repairs and maintenance costs.

Advertising expenses

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.

During the thirteen weeks ended March 28, 2026, advertising expenses were $67.3 million, an increase of $1.5 million compared to $65.8 million in the comparable period in 2025.

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 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.

During the thirteen weeks ended March 28, 2026, SG&A expense was $34.4 million, an increase of $3.0 million compared to $31.4 million in the comparable period in 2025.

The increase in SG&A expense was primarily driven by $2.4 million in restructuring charges during the fiscal first quarter 2026 related to the corporate realignment announced in January 2026, partially offset by lower system implementation costs and other expenses compared to the prior year period.

Depreciation and amortization

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.

During the thirteen weeks ended March 28, 2026, depreciation and amortization was $6.8 million, an increase of $0.6 million compared to $6.2 million in the comparable period in 2025.

The increase in depreciation and amortization was primarily due to capital expenditures placed in service during the period related to our technology investments.

Interest expense, net

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 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.

During the thirteen weeks ended March 28, 2026, interest expense, net increased to $9.8 million from $8.9 million in the prior year period, primarily driven by a $0.6 million decline in interest income due to lower average cash balances and $0.3 million of additional interest expense.

Investment (income) expense

Investment income decreased by $93.8 million compared to the prior year period, which reflected a gain recorded on the sale of the Company’s unconsolidated equity method investment in LPH, its United Kingdom master franchisee, during the fiscal first quarter 2025.

See Note 9 of the Consolidated Financial Statements for further discussion.

Income tax expense

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.

During the thirteen weeks ended March 28, 2026, we recognized income tax expense of $10.7 million, yielding an effective tax rate of 26.3%, compared to an effective tax rate of 25.1% in the prior year period.

T he increase in the effective tax rate was primarily due to an increase in state income taxes and other non-deductible items.

Liquidity and Capital Resources

Our primary sources of liquidity and capital resources are cash provided from operating activities, cash and cash equivalents on hand, and borrowings available under our securitized financing facility.

Our primary requirements for liquidity and capital are working capital, general corporate needs, capital expenditures, income tax payments, debt service requirements, dividend payments, and the repurchase of shares of our common stock (if any).

Historically, we have operated with minimal positive working capital or with negative working capital.

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

Our primary requirements for liquidity and capital are working capital, general corporate needs, capital expenditures, income tax payments, debt service requirements, dividend payments.

We generally utilize available cash flows from operations to invest in our business, service our debt obligations, pay dividends, and execute our share repurchase program.

As of March 28, 2026, the Company had $176.6 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 thirty-nine weeks ended September 27, 2025 and September 28, 2024 (in thousands):

Thirty-Nine Weeks Ended

September 27,

2025 September 28,

The following table shows summary cash flows information for the thirteen weeks ended March 28, 2026 and March 29, 2025 (in thousands):

Thirteen Weeks Ended

2026 March 29,

Net cash provided by (used in):

2 unchanged sentences

Financing activities (95,478) (140,415)

Net change in cash and cash equivalents $ (86,954) $ 11,460

Net change in cash, cash equivalents, and restricted cash $ (51,822) $ (74,626)

Operating activities .

2 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 $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.

Net cash provided by operating activities was $61.4 million in the thirteen weeks ended March 28, 2026, an increase of $36.1 million from net cash provided by operating activities of $25.3 million in the thirteen weeks ended March 29, 2025, 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 $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.

Our net cash used in investing activities was $17.7 million in the thirteen weeks ended March 28, 2026, a change of $58.2 million from net cash provided by investing activities of $40.5 million in the thirteen weeks ended March 29, 2025.

The increase in capital expenditures primarily relates to our investments in technology.

The prior year period included 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 in the prior year period.

Financing activities .

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.

Our net cash used in financing activities was $95.5 million in the thirteen weeks ended March 28, 2026, a decrease of $44.9 million from net cash used in financing activities of $140.4 million in the thirteen weeks ended March 29, 2025.

The decrease is primarily related to an additional $41.9 million in common stock repurchased under our share repurchase program in the prior year period compared to the current year period.

Securitized financing facility .

4 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 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.

During the fiscal first quarter of 2026, 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, 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 paid a quarterly cash dividend of $0.30 per share of common stock resulting in aggregate declared dividends of $8.2 million during the thirteen weeks ended March 28, 2026.

On April 28, 2026 the Company’s Board of Directors declared a dividend of $0.30 per share, to be paid on June 5, 2026 to stockholders of record as of May 15, 2026, totaling approximately $8.2 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.

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Share Repurchase Program.

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 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.

On March 5, 2026, the Company’s Board of Directors authorized the repurchase of up to an additional $300.0 million of its outstanding shares of common stock under its existing share repurchase program (the “Share Repurchase Program”).

During the thirteen weeks ended March 28, 2026, the Company repurchased and retired 374,324 shares of its common stock at an average price of $208.08 per share.

As of March 28, 2026, $313.4 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.

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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