BLMN 10-K & 10-Q changes, risk factors and insider trading

Regardless of the source or cause, any report of food-borne illnesses and other food safety issues, whether at one of our restaurants orrestaurants, in the industry or supply chain, generally could have a negative impact on our traffic and sales and adversely affect the reputation of our brands. Food safety issues could be caused by suppliers or distributors and, as a result, be out of our control and this risk may be exacerbated by supply chain issues, which could delay deliveries and necessitate alternative sourcing on short notice. Health concerns or outbreaks of disease in a food product could also reduce demand for particular menu offerings. Even instances of food-borne illness, food tampering or food contamination occurring solely at restaurants of other companiescompany’s restaurants could result in negative publicity about the food service industry generally and adversely impact our sales. There is also the risk of allergen cross contamination in our restaurants despite precautionary measures to minimize the risk. Social media has dramatically increased the rate at which negative publicity, including as it relates to food-borne illnesses, can be disseminated before there is any meaningful opportunity to respond or address an issue. The occurrence of food-borne illnesses or food safety issues could also adversely affect the price and availability of affected ingredients, resulting in higher costs and lower margins.

A substantial number of restaurant operators compete directly and indirectly with us with respect to price, service, location and food quality, some of which are well-established with significant resources. There is also active competition for management, team members and other personnel, and attractive suitable real estate sites. Consumer tastes, nutritional and dietary trends, traffic patternspatterns, discretionary spending habits and the type, number and location of competing restaurants often affect the restaurant business, and our competitors may react more efficiently, creatively and effectively to those conditions. In addition, our competitors may generate or better implement business strategies that improve the value and relevance of their brands and reputation, relative to ours. For example, our competitors may more successfully implement menu or technology initiatives, such as remote ordering, social media or mobile technology platforms that expedite or enhance the customer experience, or artificial intelligence to develop new customer insights. Further, we face growing competition from quick service and fast-casual restaurants, the supermarket industry and meal kit and food delivery providers, with the improvement of prepared food offerings. and the trend towards convergence in grocery, deli, delivery, retail and restaurant services. Further, if this competitive environment and the breadth of alternatives resultsresult in a decline in casual dining customer traffic, it could make our financial operations dependent on our ability to increase our market share within the hyper-competitive casual dining segment. We believe all of the above factors have increased competitive pressures in the casual dining sector in recent periods and we believe they will continue to present a challenging competitive environment in future periods. If we are unable to continue to compete effectively, our traffic, sales and margins could decline and our business, financial condition and results of operations would be adversely affected.

Our success will continue to depend, to a significant extent, on our leadership team and other key management personnel. For example, during 2024,2025, we appointed a new chief executive officer and chief financial officer and made other changes to our senior leadership team. While some of these changes were reflective of ongoing succession-planning, leadership transition can create risks as individuals are integrated into new roles, onboarding shifts management attention from business concerns, we may fail to retain other key personnel, or we may lose institutional knowledge. These risks and uncertainties could result in operational and administrative inefficiencies and additional added costs, which could adversely impact our results of operations.

Our restaurant-level management and team members are largely responsible for the quality of our service. Our guests may be dissatisfied and our sales may decline if we fail to recruit, train and retain managers and team members that effectively implement our business strategy and provide high-quality guest service. There is active competition for quality management personnel and hourly team members, and such competition could require us to pay higher wages or incur higher costs for retaining and incentivizing our management personnel and hourly team members. If we experience high turnover, we may experience higher labor costs and have a shortage of adequate management personnel required for future growth. The tight labor market in the United States has further strained and could continue to strain our ability to keep our restaurants fully staffed. A shortage of team members also could cause our restaurants to operate with reduced staff, which could adversely affect our ability to provide high-quality guest service.service and cause our business and financial results to suffer.

Food service businesses are affected by changes in consumer tastes and demographic trends. For instance, if prevailing health or dietary preferences or initiatives cause consumers to avoid steak and other products we offer in any of our concepts in favor of foods or ingredients that are perceived as healthier or otherwise reflect popular demand, our business and operating results would be harmed. Various factors such as menu labeling rules, health initiatives, changes in diet or attitudes toward diet and health, new information about diets and health, nutritional guidelines and academic studies, whether issued by government agencies, research institutions, or advocacy organizations, may impact consumer choice and cause consumers to select foods other than those that are offered by our restaurants. Consumer preference on sourcing, or in response to environmental and animal welfare concerns may also cause some groups of consumers to select foods other than those that are offered by our restaurants. Our business may be negatively impacted by customer preferences regarding third-party delivery apps and services with which we engage, particularly if the availability, performance and reliability of the apps or services adversely impact customer satisfaction. If we are unable to anticipate or successfully respond to changes in consumer preferences, our results of operations could be adversely affected, generally or in particular concepts or markets.

We depend on frequent deliveries of fresh food products that meet our specifications, and we have a limited number of suppliers and distributors for our major products, such as beef. These factors subject us to the risk that shortages or interruptions in products could adversely affect the availability, quality or cost of products or require us to incur more costs to obtain adequate products if we are unable to manage supply chain risk. During 2024,2025, we purchased more than 90%80% of our U.S. beef raw materials from four beef suppliers that represent a significant portion of the total beef marketplace in the U.S.marketplace. Our dependence on a small number of suppliers subjects us to the risks of ingredient shortage, supply interruption, animal disease outbreak, and price volatility. An external disruption or an internal dispute could force us to sever ties with our suppliers,suppliers or distributors, and we may not be able to find a suitable replacement in a timely or cost-efficient manner. Beef is a significant cost to us, and we may also incur higher costs to secure adequate suppliers or make substantial changes to our menu offerings, at the risk of material adverse harm to our business. Due to the nature of our industry, we expect to continue to purchasepurchasing a substantial amount of our beef from a small number of suppliers. Global economic factors continue to place significant pressure on suppliers, making the supply environment more expensive and causing supply chain issues. Supply shortages or disruptions caused by inclement weather, climate change, natural disasters, pandemics, armed conflict, sanctions, government policy, financial or solvency issues of our suppliers or distributors, fuel increases or other conditions beyond our control could adversely affect our operations and operating results. In recent years, climate-related issues, including drought and flooding in our key supplier region, have led to volatility in the prices of our ingredients, such as produce and meats. In addition, if any of our suppliers or distributors were unable to fulfill their responsibilities or we were unable to maintain current purchasing terms or ensure service availability and we were unable to locate substitutes in a timely manner, we may encounter supply shortages, lose consumers and experience an increase in costs in seeking alternative supplier or distribution services. The failure to develop and maintain supplier and distributor relationships and any resulting disruptions to the provision of food and other supplies to our restaurant locations could adversely affect our operating results.

We and our vendors are subject to various employment and labor laws and regulations governing relationships with employees throughout the world and changes to laws and regulations may affect operating costs. These laws and regulations relate to matters including employment discrimination, pay transparency, minimum wage requirements, scheduling, overtime, tip credits, unemployment tax rates, workers’ compensation rates, working conditions, immigration status, tax reporting and other wage and benefit requirements. Any significant additional government regulationsregulations, enforcement initiatives and new laws governing relationships with employees, including minimum wage increases, regulations relating to union organizing rights and activities, the employment status of third-party delivery drivers, mandated benefitsbenefits, immigration status or other requirements that impose additional obligations on us, could increase our costs and adversely affect our business and results of operations.

We are subject to various federal, state, local and foreign laws affecting our business. Each of our restaurants is subject to licensing and regulation by a number of governmental authorities, which may include, among others, alcoholic beverage control, food safety, nutritional menu labeling, health care, sanitation, hazardous material, building, zoning, land use, traffic, environmental and fire agencies in the state, municipality or country in which the restaurant is located. Our suppliers are also subject to regulation in some of these areas. Any difficulties or inabilities to retain or renew licenses, or increased compliance costs due to changed regulations, could adversely affect operations at existing restaurants. Additionally, difficulties in obtaining or failing to obtain the required licenses or approvals could delay or prevent the development of new restaurants. We are subject to various U.S. federal, state and international laws and regulations related to the offer and sale of franchisees. Failure to comply with these laws could adversely affect the results we generate from franchisees or otherwise impose costs on us. Alcoholic beverage sales represent ten percent11% of our consolidated restaurant sales and are subject to extensive state and local licensing and other regulations. The failure of a restaurant to obtain or retain a liquor license would adversely affect that restaurant’s operations. In addition, we are subject to “dram shop” statutes in certain states. These statutes generally provide a person injured by an intoxicated person the right to recover damages from an establishment that wrongfully served alcoholic beverages to the intoxicated person. We may also incur costs of and challenges in ensuring compliance with measures implemented in response to a widespread illness or a pandemic, such as requirements for physical barriers or other preventative measures in restaurants or vaccination or testing requirements for our employees, which can vary by the location of the restaurant and may continue to change. We are subject to laws relating to information security, cashless payments and consumer credit, protection and fraud.

The Trumpfederal administration and newly elected Congress and appointed agency chairsgovernment may seek further sweeping regulatory changes. Further,For theexample, Trumpthere administrationhave has takenbeen several executive actions and issued a number of executive orders in connection with, among other areas, energy production, trade, immigration and administrative agencies. The effects of these executive actions and executive orders, as well as any tandem regulatory changes pursued by the Trump administration and its appointees,pursued, are highly uncertain and may adversely impact our business.

We are subject to income and other taxes in the United States and numerous foreign jurisdictions. Our effective income tax rate and other taxes in the future could be adversely affected by a number of factors, including changes in the mix of earnings in countries with different statutory tax rates, changes in the valuation of deferred tax assets and liabilities, an “ownership change” as defined under Section 382 of the Internal Revenue Code, changes in U.S. or foreign tax laws, including the 15% global minimum tax under the Organization for Economic Co-operation and Development (“OECD”) Pillar Two (“Pillar Two”), Global Anti-Base Erosion rules, uncertainty in the interpretation of tax laws, comprehensive tax reform measures or other legislative changes, particularly as a result of the recent U.S. elections, and the outcome of income tax audits and tax litigation, such as in Brazil. Further, differences in interpretations of Pillar Two and other rules by multiple jurisdictions may cause increased complexities as to compliance and increased audit controversy with tax authorities in jurisdictions where we operate. Although we believe our tax estimates are reasonable, the final determination of tax audits and tax litigation could be materially different from our historical income tax provisions and accruals. These results could have a material effect on our results of operations or cash flows in the period or periods for which these determinations are made. In addition, our effective income tax rate and our results may be impacted by our ability to realize deferred tax benefits, including our FICA tip credit carryforwards, and by any increases or decreases of our valuation allowances applied to our existing deferred tax assets.

In recent years, there has been an increasing focus with often differing and competing expectations and standards from certain investors, customers, consumers, employees, state, federal and international governments and agencies, and other stakeholders concerning corporate citizenship and sustainability matters, including practices and disclosures related to environmental stewardship; social responsibility; diversity, equity and inclusion; and workplace rights. Companies across all industries are facing increasing scrutiny relating to their corporate citizenship and sustainability practices, including from opponents of these initiatives. We are also subject to corporate citizenship and sustainability disclosure rules and regulations and institutional investor voting policies that seek this information, making it more accessible for scrutiny. Changing consumer preferences may result in increased demands regarding our products and supply chain and their respective environmental and social impact, including on sustainability. These demands could require additional transparency, due diligence, and reporting and could cause us to incur additional costs or to make changes to our operations to comply with such demands. We may also determine that certain changes are required in anticipation of further evolution of consumer preferences and demands. Increased focus and activism related to corporate citizenship and sustainability may also result in investors reconsidering their investment decisions as a result of their assessment of a company’s corporate citizenship and sustainability practices. In addition, corporate diversity, equity and inclusion practices have recently come under increasing challenges from advocacy groups and federal and state officials through media campaigns, lawsuits and executive orders. Any failure or perceived failure by us to adequately address stakeholder expectations and legal requirements regarding corporate citizenship, including diversity, equity and inclusion, employee health, safety and welfare, and workplace rights, among others, may damage our reputation and adversely affect our business and results of operations. Further, concern over climate change and other environmental sustainability matters, has and may in the future result in new or increased legal and federal and state regulatory requirements to provide extensive disclosure regarding and to reduce or mitigate impacts to the environment, including greenhouse gas emissions, alternative energy policies, water consumption, packaging and waste management, responsible sourcing and other sustainability initiatives. For example, state, federal and international regulations on sustainability matters, including the recently enacted Climate Corporate Data Accountability Act and the Climate-Related Financial Risk Act in California, have been or may be implemented that will require reporting and third-party assurance on greenhouse gas emissions and other environmental matters.

If we fail to achieve goals, targets, or objectives we may set with respect to corporate citizenship and sustainability matters, if we do not meet or comply with new regulations or evolving government, consumer, investor, industry, or stakeholder expectations and standards, including those related to reporting, or if we are perceived to have not responded appropriately to the growing concern for corporate citizenship and sustainability matters, we may face legal or regulatory actions, the imposition of fines, penalties, or other sanctions, adverse publicity, and decreased demand from consumers, or the price of our common stock could decline, any of which could materially harm our reputation or have a material adverse effect on our business, financial condition, or operating results.

Challenging economic, political and social conditions may negatively impact consumer spending and thus cause a challenging sales environment in the casual dining sector and a decline in our financial results. For example, international, domestic and regional economic conditions, continued economic downturn or recession, or slowing or stalled recovery therefrom, unemployment levels, consumer income levels, financial market volatility, credit conditions and availability, consumer debt levels, inflation, increased energy prices, weakness in the housing market, stock market performance, rising interests rates, tariffs and trade barriers, pandemics or public health concerns, population growth, changes in government and central bank monetary policies, social unrest and governmental, political and budget matters may have a negative effect on consumer confidence and discretionary spending, which the restaurant industry depends upon. Further, it is difficult to predict what impact, if any, the U.S. presidential and congressional election outcomes could have on consumer confidence and discretionary spending. The effects of international trade policies, trade conflicts and tariffs between the U.S. and its global trade partners including, without limitation, China, Mexico and Canada, may have an adverse impact on economic conditions, commodity pricing and consumer spending. As a result of these events, we may seek alternative strategies to mitigate any negative impacts, including adjusting menu prices, negotiating with vendors, and seeking alternative sourcing, any of which could have a material adverse effect on our business and results of operations. In addition, the effects on the global economy from the ongoing conflicts in Israel and Ukraine, particularly if they escalate or broaden, are uncertain. Terrorist attacks, heightened security requirements, attacks of critical infrastructure, protests, demonstrations, riots, civil disturbance, disobedience, insurrection, customer intimidation, mass shootings or social and other political unrest, such as those seen in recent years, have and may continue to result in restrictions, curfews or other actions and give rise to significant changes in regional and global economic conditions. If such events or disruptions persist for a prolonged period of time, our overall business and results of operations may be adversely affected.

The performance of our restaurants depends on our ability to anticipate and react to changes in the price and availability of food commodities. Our business also incurs significant costs for energy, utilities, insurance, health care, labor, marketing and real estate over which we have little control. We have experienced and continue to experience the impact of inflation and fluctuations in costs on our operating expenses and anticipate the inflationary conditions will continue in the near future. We are anticipating 2.5%4.5% to 3.5%5.5% commodity inflation for 2025,2026, but there can be no assurance that our expectations will be accurate or that we will be able to efficiently pass through any increased costs in our prices. Increased prices or shortages could affect the cost and quality of the items we buy or require us to raise prices, limit our menu options or implement alternative processes or products. In response, customersconsumers may be less willing to patronize our restaurants in favor of our competitors or lower-priced alternatives. Prices may also be affected by supply, market changes, increased competition, changes in laws, shortages or interruptions in supply due to weather, disease or other conditions beyond our control, labor shortages, port disruptions and freight carrier stoppages, or other reasons. As a result, these events, individually or combined with other more general economic and demographic conditions, could impact our pricing and negatively affect our sales and profit margins.

Cybersecurity breaches of confidential consumer, personal employee and other material informationinformation, the use of artificial intelligence tools and other threats to our technological systems may adversely affect our business.

A cyber incident that compromises the information of our consumers or employees, whether affecting our technological systems or those of third-party service providers that we rely on, could result in widespread negative publicity, damage to the reputation of our brands, a loss of consumers, an interruption of our business and legal liabilities. The majority of our restaurant sales are by credit or debit cards, and we maintain certain personal information regarding our employees and confidential information about our customers, franchisees and suppliers. Although we segment our card data environment and employ a cybersecurity protection program based upon industry frameworks, as well as scan and improve our environment for any threats and identify and remediate vulnerabilities, perform penetration testing and engage third parties to assess effectiveness of our security measures with oversight by our Audit Committee, there are no assurances that such programs will prevent or detect all cybersecurity breaches or technological failures.

A claim or investigation resulting from a cyber or other security threat to our systems and data may have a material adverse effect on our business and distract management from running the business. Responses to cybersecurity incidents also have the potential of incurring significant remediation costs, to the extent such costs are not covered by our applicable insurance policies. As cybersecurity risks and applicable laws and regulations evolve, we may incur significant additional costs in technology, third-party services and personnel to maintain systems designed to anticipate and prevent cyber-attacks.cyber-attacks, as well as adequate insurance coverage for any incidents that may occur.

We currently have a substantial amount of outstanding indebtedness. Our leverage could have important consequences, including:

We may incur substantial additional indebtedness in the future, subject to the restrictions contained in our credit agreement. If new indebtedness is added to our current debt levels, the related risks that we now face could increase. We cannot be certain that our financial condition or credit and other market conditions will be favorable upon maturity of our unsecured notes or credit agreement in 2029, or at any earlier time we may seek to refinance our debt. Further, turmoil in global credit markets could adversely impact the availability and cost of credit. If we are unable to refinance our indebtedness on favorable terms, our financial condition and results of operations would be adversely affected.

Certain of our debt agreements limit our and our subsidiaries’ abilities to, among other things, incur or guarantee additional indebtedness, pay dividends above certain thresholds, redeem or repurchase our capital stock, make certain acquisitions or investments, incur or permit to exist certain liens, enter into transactions with affiliates or sell our assets to, merge or consolidate with or into, another company. Our debt agreements require us to satisfy certain financial tests and ratios. Our ability to satisfy such tests and ratios may be affected by events outside of our control. If we breach the covenants under our debt agreements, the lenders could elect to declare all amounts outstanding under the agreements to be immediately due and payable and terminate all commitments to extend further credit. If we are unable to repay those amounts, the lenders could proceed against the collateral granted to them to secure that indebtedness. We have pledged substantially all of our assets as collateral under our credit agreement. If our lenders accelerate the repayment of borrowings, we cannot be certain that we will have sufficient assets to repay them.

Our business and operations may consume resources faster than we anticipate. In the future, we may need to raise additional funds through the issuance of new equity securities, debt or a combination of both. Additional financing may not be available on favorable terms or at all. If adequate funds are not available on acceptable terms, we may be unable to fund our capital requirements. If we issue new debt securities, the debt holders would have rights senior to common stockholders to make claims on our assets, and the terms of any debt could restrict our operations, including our ability to pay dividends above certain thresholds on our common stock. If we issue additional equity securities, existing stockholders may experience dilution, and the new equity securities could have rights senior to those of our common stock. Because our decision to issue securities in any future offering will depend on market conditions and other factors beyond our control, we cannot predict or estimate the amount, timing or nature of our future offerings. Thus, our stockholders bear the risk of our future securities offerings reducing the market price of our common stock and diluting their interest.

Management’s discussion and analysis of financial condition and results of operations should be read in conjunction with our consolidated financial statements and the related notes. We have classified the results of operations, non-GAAP measures, and liquidity and capital resources of our Brazil operations as discontinued operations for all periods presented. Unless otherwise noted, this Management Discussion and Analysis of Financial Condition and Results of Operations does not include discontinued operations. For discussion of our consolidated and segment-level results of operations, non-GAAP measures, and liquidity and capital resources not included in this Annual Report for fiscal year 2022, see our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on February 28, 2024.

Financial Overview - Our financial overview for 2024 from continuing operations2025 includes the following:

•U.S. combined and Outback Steakhouse comparable restaurant sales of (1.1)%0.2% and (1.20.5)%, respectively;

•DecreaseIncrease in Total revenues of (5.2)%0.1% as compared to 20232024;

•Diluted (earnings per share of $0.10 as compared to diluted loss) earnings per share of $(0.61) as compared to $2.13 in 2023.2024.

Drive•Balanced Long-TermCapital ShareholderAllocation: Value.we Wehave plana dual approach to driveinvest long-termin shareholder value by reinvesting into ourthe base business and addressingfocus on debt paydown. To support the stateobjectives, ofwe oursuspended assetthe base,dividend payingin downOctober debt and returning excess cash to shareholders through dividends.2025. We have refinedslowed down our pipeline to slow new unit growthdevelopment beginningto infocus 2026.on refreshing our existing restaurants. While we still believe there are development opportunities for our concepts in the U.S., we remain focused on driving healthy traffic in our existing restaurants. We expect to use available free cash flow to pay down debt.

•Average restaurant unit volumes—average sales (excluding gift card breakage and, in our discontinued operations, the benefit of value added tax exemptions in Brazil) per restaurant to measure changes in customer traffic, pricing and development of the brand.

•Comparable restaurant sales—year-over-year comparison of the change in sales volumes (excluding gift card breakage and, in our discontinued operations, the benefit of value added tax exemptions in Brazil) for Company-owned restaurants that are open 18 months or more in order to remove the impact of new restaurant openings in comparing the operations of existing restaurants.

•Restaurant-level operating margin, Income from operations, Net income (loss) income and Diluted earning (loss) earnings per share—financial measures utilized to evaluate our operating performance.

Restaurant-level operating margin is a non-GAAP financial measure widely regarded in the industry as a useful metric to evaluate restaurant-level operating efficiency and performance of ongoing restaurant-level operations, and we use it for these purposes. Our restaurant-level operating margin is expressed as the percentage of our Restaurant sales that Food and beverage costs, Labor and other related expense and Other restaurant operating expense (including advertising expenses) represent, in each case as such items are reflected in our Consolidated Statements of Operations and Comprehensive Income (Loss) Income.. The following categories of revenue and operating expenses are not included in restaurant-level operating income and corresponding margin because we do not consider them reflective of operating performance at the restaurant-level within a period:

(ii)Depreciation and amortization, which, although substantially all of which is related to restaurant-level assets, represent historical sunk costs rather than current cash outlays for the restaurants;

(iii)General and administrative expense, which includes primarily non-restaurant-level costs associated with support of the restaurants and other activities at our corporate offices; and (iv)Asset impairment charges and restaurant closing costs,costs and Goodwill impairment, which are not reflective of ongoing restaurant performance in a period.

Restaurant-level operating margin excludes various expenses, as discussed above, that are essential to supporting the operations of our restaurants and may materially impact our Consolidated Statements of Operations and Comprehensive Income (Loss) Income.. As a result, restaurant-level operating margin is not indicative of our consolidated results of operations and is presented exclusively as a supplement to, and not a substitute for, Net income (loss) income or Income from operations. In addition, our presentation of restaurant-level operating margin may not be comparable to similarly titled measures used by other companies in our industry.

Restaurant Sales - Following is a summary of the change in Restaurant sales for the periodsperiod indicated:

(31)Fiscal years 2024 and 2023 includeIncludes restaurant sales from 27 and 1938 new restaurants, respectively,restaurants not included in our comparable restaurant sales base.

Average Restaurant Unit Volumes and Operating Weeks - Following is a summary of the average restaurant unit volumes and operating weeks for the periods indicated:

Comparable Restaurant Sales, Traffic and Average Check Per Person - Following is a summary of comparable restaurant sales, traffic and average check per person (decreases) increases for the periods indicated:

(1)ForAs 2024,a result of the 53rd week in 2023, U.S. comparable restaurant sales, traffic and average check per person compare the 52 weeks from January 1, 2024 through December 29, 2024 to the 52 weeks from January 2, 2023 through December 31, 2023. For 2023, U.S. comparable restaurant sales, traffic and average check per person compare the 53 weeks from December 26, 2022 through December 31, 2023 to the 53 weeks from December 27, 2021 through January 1, 2023.

Fiscal year 20242025 as compared to fiscal year 2023 - continuing operations2024

Labor•Food and otherbeverage related expensecost increased as a percentage of Restaurant sales primarily due to 1.6%1.1% from highercommodity hourlyinflation and field0.6% managementfrom laborunfavorable costs,product primarilymix. dueThese toimpacts wage rate inflation,were partially offset by a decrease of 0.6%1.0% from an increase in average check per person.person, primarily due to menu pricing.

•Labor and other related expense increased as a percentage of Restaurant sales primarily due to 1.9%1.3% from higher hourly and field management labor costs, primarily due to wage rate inflation, partially offset by decreases of 0.9%0.3% from an increase in average check per person and 0.3% from certain cost saving and productivity initiatives.person.

(i)Our ability to execute and achieve the expected benefits of our actions to focus on operational priorities, including our turnaround plans and cost-savingproductivity initiatives to fund such plans;

(xi)The impacts of our operations in Brazil as a minority investor and franchisor following our sale transaction;

(xvi)Our costproductivity savings plansinitiatives to enable reinvestment in our business, due to uncertainty with respect to macroeconomic conditions and the efficiency that may be added by the actions we take, and the projected benefits of our reinvestments;

We are one of the largest casualfull-service dining restaurant companies in the world with a portfolio of leading, differentiated restaurant concepts. As of MarchJune 29,28, 2026, we owned and operated 962959 restaurants and franchised 490489 restaurants across 46 states, Guam and 12 countries. Our restaurant portfolio includes: Outback Steakhouse, Carrabba’s Italian Grill, Bonefish Grill and Fleming’s Prime Steakhouse & Wine Bar.

Financial Overview - Our financial overview for the thirteen weeks ended MarchJune 29,28, 2026 for continuing operations includes the following:

•U.S. combined and Outback Steakhouse comparable restaurant sales of 0.9%2.3% and (0.3)%,1.4%, respectively;

•Increase in Total revenues of 1.0%1.3% as compared to the firstsecond quarter of 2025;

•Operating income and restaurant-level operating margins of 5.6%3.8% and 14.0%,12.4%, respectively, as compared to 5.5%3.0% and 13.9%,12.0%, respectively, for the firstsecond quarter of 2025;

•Operating income of $59.1$38.3 million as compared to $57.2$29.7 million in the firstsecond quarter of 2025; and

•Diluted earnings per share from continuing operations of $0.64$0.37 as compared to $0.50$0.29 for the firstsecond quarter of 2025.

Restaurant Sales - Following is a summary of the change in Restaurant sales for the periodperiods indicated:

(1)IncludesThe thirteen and twenty-six weeks ended June 28, 2026 include restaurant sales from 2524 and 26 new restaurants, respectively, not included in our comparable restaurant sales base.

(2)IncludesThe thirteen and twenty-six weeks ended June 28, 2026 include restaurant sales from the closure of 38 and 42 restaurants since March 30, 2025 and December 29, 2024.2024, respectively.

Thirteen weeks ended MarchJune 29,28, 2026 as compared to thirteen weeks ended MarchJune 30,29, 2025

•Food and beverage cost increased as a percentage of Restaurant sales primarily due to 1.3%1.6% from commodity inflation.inflation This impact waspartially offset by 1.3%1.4% from an increase in average check per person, primarily due to menu pricing.

Other•Labor restaurantand operatingother related expense decreased as a percentage of Restaurant sales primarily due to: (i) 0.5% from cost-saving and productivity initiatives, (ii) 0.3% from lower advertising expense and (iii) 0.2%0.8% from an increase in average check per person.person and 0.2% from lower health insurance expense. These impacts were partially offset by 0.8%0.4% from higher restaurant-level operatinghourly and supplyfield expenses,management labor costs, mainly due to wage rate inflation.

•Depreciation and amortization expense increased primarily due to accelerated depreciation associated with equipment upgrades in connection with the turnaround strategy.

•General and administrative expense decreased primarily due to lapping severancecosts related to transformational and costsrestructuring associatedinitiatives with ourand foreign currency forward contracts incurred during the thirteen weeks ended March 30, 2025.contracts.

•Provision for impaired assets and restaurant closings increased primarily due to higher impairment and other costs related to restaurant closures and underperforming restaurants.

(1)The increaseincreases wasduring the periods presented were due to higher comparable restaurant sales and the impact of restaurant openings and higher comparable restaurant sales partially offset by restaurant closures.

U.S. - The increasedecrease in U.S. Income from operations generated during the thirteen weeks ended MarchJune 29,28, 2026 as compared to the thirteen weeks ended MarchJune 30,29, 2025 was primarily due to: (i) higher commodity, operating and labor costs, mainly due to inflation, (ii) higher advertising expense, (iii) higher costs from accelerated depreciation associated with equipment upgrades in connection with the turnaround strategy and (iv) higher impairment expense. These impacts were partially offset by: (i) an increase in average check per person, primarily due to pricing, (ii) cost-saving and productivity initiatives and (iii) lower advertisingpre-opening expense. These increases were partially offset by higher commodity, operating and labor costs, mainly due to inflation.

(1)The thirteentwenty-six weeks ended MarchJune 30,29, 2025 includes one additional month of pre-Brazil Sale Transaction intercompany royalties from Brazil.royalties.

(1)Costs for the thirteen and twenty-six weeks ended MarchJune 29,28, 2026 relate to accelerated depreciation associated with equipment upgrades in connection with the turnaround strategy. Costs for the thirteen and twenty-six weeks ended MarchJune 30,29, 2025 include severance, professional fees and other costs incurred as a result of transformational and restructuring activities.

(3)Primarily includes gains from certain lease terminations for the thirteen weeks ended March 30, 2025.terminations.

(2)The tax effect of non-GAAP adjustments is determined by recomputing the (benefit) provisionBenefit for income taxes on an adjusted basis. The difference between the recomputed (benefit) provisionBenefit for income taxes and the GAAP (benefit) provisionBenefit for income taxes represents the tax effect of non-GAAP adjustments. The thirteen and twenty-six weeks ended MarchJune 30,29, 2025 also includesinclude an adjustment to (benefit) provisionBenefit for income taxes related to foreign currency gains on the Brazil Sale Transaction installment receivable.

System-Wide Sales - The following table provides a summary of sales of franchised restaurants by reportable segment for the periods indicated:

As of MarchJune 29,28, 2026, we had $71.3$66.6 million in cash and cash equivalents, of which $5.4$5.9 million was held by foreign affiliates, and did not have aggregate undistributed foreign earnings from our consolidated foreign subsidiaries.

(1)Interest rate for revolving credit facility represents the weighted average interest rate as of MarchJune 29,28, 2026.

As of MarchJune 29,28, 2026, we had $728.7$774.2 million in available unused borrowing capacity under our revolving credit facility, net of letters of credit of $16.3$20.8 million.

As of MarchJune 29,28, 2026 and December 28, 2025, we were in compliance with our debt covenants. We believe that we will remain in compliance with our debt covenants during the next 12 months and beyond.

Operating Activities - The increase in net cash provided by operating activities during the thirteentwenty-six weeks ended MarchJune 29,28, 2026 as compared to the thirteentwenty-six weeks ended MarchJune 30,29, 2025 was primarily due to higher cash earnings partially offset byand changes in working capital.

Investing Activities - Net cash used in investing activities during the thirteentwenty-six weeks ended MarchJune 29,28, 2026 was due to capital expenditures. Net cash provided by investing activities during the thirteentwenty-six weeks ended MarchJune 30,29, 2025 was primarily due to proceeds from the Brazil Sale Transaction, net of taxes withheld, partially offset by capital expenditures and payments on foreign currency forward contracts.

Financing Activities - Net cash used in financing activities during the thirteentwenty-six weeks ended MarchJune 29,28, 2026 was primarily due to net payments on the revolving credit facility. Net cash used in financing activities during the thirteentwenty-six weeks ended MarchJune 30,29, 2025 was primarily due to: (i) net payments on the revolving credit facility from the Brazil Sale Transaction proceeds.proceeds, (ii) payments of cash dividends and (iii) maturity settlement for the convertible senior notes due in 2025.

Working capital (deficit) includes: (i) Unearned revenue primarily from unredeemed gift cards of $321.4$310.1 million and $377.9 million as of MarchJune 29,28, 2026 and December 28, 2025, respectively, and (ii) current operating lease liabilities of $177.0$176.8 million and $176.3 million as of MarchJune 29,28, 2026 and December 28, 2025, respectively, with the corresponding operating right-of-use assets recorded as non-current on our Consolidated Balance Sheets. We have, and in the future may continue to have, negative working capital balances (as is common for many restaurant companies). We operate successfully with negative working capital because cash collected on restaurant sales is typically received before payment is due on our current liabilities, and our inventory turnover rates require relatively low investment in inventories. Additionally, ongoing cash flows from restaurant operations and gift card sales are typically used to service debt obligations and to make capital expenditures.