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

Dining out is a discretionary expenditure that is influenced by domestic and global economic conditions, including, but not limited to: geopolitical instability, including armed conflicts, supply shortages, interest rates, changes to the terms of international trade agreements, unemployment, significant cost inflation, public health emergencies, consumer confidence, consumer purchasing and saving habits, credit conditions, stock market performance, home values, population growth, household incomes and tax policy.

In recent years, our operating results were impacted by geopolitical and other macroeconomic events, causing supply chain challenges and significantly increased commodity and wage inflation. Our commodity and wage inflationary environment began returning to more historical levels in fiscal 2024. The impact of ongoing geopolitical and macroeconomic eventsevents, including evolving government policies, and global trade and tariff dynamics, could lead to further wage inflation, product and services cost inflation, disruptions in the supply chain, staffing challenges, shifts in consumer behavior, and delays in new restaurant openings. Any of these factors may have an adverse impact on our business and materially adversely affect our financial performance.

We strive to increase comparable restaurant sales by improving customer traffic trends and growing average check. Changes in customer traffic and average check amount may be impacted by a variety of factors, including, without limitation: macroeconomic conditions that impact consumer discretionary spending; perception of our concepts’ offerings in terms of quality, price, value and service; increasedthe competitioncompetitive environment; changes in consumer eating or drinking habits; the evolving retail landscape, which is becoming increasingly influenced by technology and a growing consumer preference for convenience, value and experience; adverse weather conditions; natural disasters; and demographic, economic and other adverse changes in the trade areas in which our restaurants are located and changes in the regulatory environment. (See the risk factor titled “The impact global and domestic economic conditions have on consumer discretionary spending and our costs of operations could materially adversely affect our financial performance.”)

We compete directly and indirectly for customer traffic with national and regional full-service dining restaurant chains as well as independently-ownedindependently owned restaurants. In addition, we face competition from fast casual and quick-servicequick service restaurants, grocery stores and meal kits that have increased the quality and variety of their food products in response to consumer demand. We believe that many consumers remain focused on value and if our competitors promote and deliver a higher degree of perceived value, our customer traffic could suffer.

We utilize menu price increases in an effort to help offset inflation of key operating costs. However, our menu price increases may be insufficient to meaningfully offset increased costs and may, if not accepted by customers, result in reduced customer traffic and unfavorable menu mix shifts (i.e., customers reducing their spend by purchasing fewer menu items or lower cost menu items). These risks became more pronounced beginning in 2022, when we began to implement menu price increases above our historical levels to help offset significant inflationary cost pressures. (See the risk factor titled “Our inability to anticipate and react effectively to changes in the costs of key operating resources may increase our cost of doing business, which could materially adversely affect our financial performance.”)

InWe recent years, we have generatedgenerate a higher mix of sales from off-premise channels as consumers have demonstrated a preference for convenience and at-home dining. Growing competition in off-premise channels, our inability to differentiate our concepts in these channels or a change in customers’ willingness to pay fees associated with third-party delivery could negatively impact our comparable restaurant sales performance.

Negative publicity directed at any of our brands, regardless of factual basis, such as relating to the quality of our restaurant food or consumer packaged goods, the quality and condition of our restaurant facilities, customer complaints or litigation alleging injury or food-borne illnesses, food tampering or contamination or poor health inspection scores, sanitary or other issues with respect to food processing by us or our suppliers, the condition of our restaurants, labor relations, any failure to comply with applicable regulations or standards, allegations of harassment or disparate treatment based upon race, gender, gender identity, national origin, religion or other class, allegations of sexual harassment, politically motivated accusations or other negative publicity could damage our reputation. Any failure of our third-party delivery provider to represent our brands in a favorable manner could damage our reputation. These concerns are exacerbated by the speed with which negative information can be disseminated through social media. (See the risk factor titled “Any inability to effectively use and manage social media could harm our marketing efforts as well as our reputation, which could materially adversely affect our financial performance.”) Negative publicity about us could harm our reputation and damage the value of our brands, which could materially adversely affect our financial performance.

Certain state and localities have significantly increased their minimum wage and/or tip credit wage (or have eliminated the tip credit wage), and require significantly more mandated benefits, and we believe it is becoming increasing likely that the United States federal government or certain other states and localities willmay also elect to do so. Should this occur, in addition to increasing the overall wages paid to our minimum wage and tip credit wage earners, these increases create pressure to increase wages paid to and other benefits provided to other staff members who, in recognition of their tenure, performance, job responsibilities and other similar considerations, historically received a rate of pay exceeding the applicable minimum wage or minimum tip credit wage. Because we employ a large workforce, any wage increases and/or expansion of benefits mandates will have a particularly significant impact on our labor costs. Increased restaurant labor costs could impact us more than others in our industry because we have a complex menu made fresh from scratch at our restaurants, requiring more labor at each restaurant location than some of our competitors who use processed foods or commissaries to prepare their foods. Our vendors, contractors and business partners are similarly impacted by wage and benefit cost inflation, and many have or will increase their prices for goods, construction and services in order to offset their increasing labor costs, resulting in higher operating costs for us.

While we seek to offset labor cost increases through menu price increases, more efficient purchasing practices, productivity improvements, greater economies of scale and by offering a variety of health plans to our staff members, including lower cost high deductiblehigh-deductible health plans, there can be no assurance that these efforts will be successful. If we are unable to effectively anticipate and respond to increased labor costs, our financial performance could be materially adversely affected.

We face food safety risk, including the risk of food-borne illness and food contamination (including allergen cross contamination), which are common both in the restaurant industry and the food supply chain.chain, including, those caused by pathogens, such as coronavirus, Ebola, mad cow disease, SARS, swine flu, avian influenza, norovirus or other virus or bacteria, such as hepatitis A, norovirus, listeria, Campylobacter, Clostridium perfringens, salmonella or E.coli, and those that may be caused by parasites, other toxins or food safety issues. While we dedicate substantial resources and provide training to help ensure the safety and quality of the food we serve, these risks cannot be completely eliminated. Additionally, we rely on our network of suppliers to properly handle, store and transport our ingredients for delivery to our restaurants. Any failure in our supply chain could cause our ingredients to be contaminated, which could be difficult to detect and jeopardize the safety of our food. We freshly prepare our menu items at our restaurants, which may put us at greater risk for food-borne illness and food contamination outbreaks than some of our competitors who use processed foods or commissaries to prepare their food. The risk of food-borne illness also may increase whenever our menu items are served outside of our control, such as by third-party food delivery services, customer take-out or at catered events.

Publicized food safety concerns, regardless of accuracy, whether specifically concerning food served at any of our restaurant brands, desserts produced at our bakeries, any products bearing our branding or regarding our third-party suppliers or service providers, or the food supply more generally, could negatively affect consumer demand for our restaurants and products, which in turn could materially adversely affect our financial performance. These concerns also extend to emerging consumer sentiments relating to phthalates, per- and polyfluoroalkyl substances, microplastics and heavy metals in the food supply.

The impacts of and our failure to effectively respond to pandemics, epidemics, endemics and other public health emergencies may also significantly disrupt our business, including, by adversely affecting, among other things, our ability to operate our business, consumer behavior, our supply chain, commodity prices, wage costs and our ability to timely open new restaurants. For example, we experienced these and other impacts to our business as a result of the COVID-19 pandemic.

The demand for and availability and price of certain food items may be adversely impacted if aany pathogen,food-borne such as coronavirus, Ebola, mad cow disease, SARS, swine flu, avian influenza, norovirusillness or other virusfood orcontamination bacteria, such as salmonella or E.coli, or if parasites or other toxins infectinfects or are believed to have infected the food supply, including the food supply chain for our restaurants or bakery facilities. For example, in 2024 we experienced challenges sourcing eggs as a result of an outbreak of avian influenza in poultry flocks. Additionally, customers may avoid our restaurantsrestaurants, our reputation may be damaged, and it may become difficult to adequately staff our restaurants if our food or customers or staff members become infected with a pathogen which was actually or alleged to be contracted at our restaurants. Any adverse food safety occurrence may result in litigation against us. Although we carry liability and other insurance coverage to mitigate costs we may incur as a result of these risks, not all risks of this nature are fully insurable. Even if insured, the negative publicity associated with such an event could damage our reputation and materially adversely affect our financial performance.

We are subject to numerous federal, state, local and foreign laws and regulations. Each of our restaurants is subject to various laws and regulations, including license and permit requirements, that regulate many aspects of our business, including, among other things, alcoholic beverage control, health, sanitation, labor, immigration, zoning and public safety. Our failure to obtain and/or retain licenses, permits or other regulatory approvals required to operate our business could delay or prevent the opening and/or continued operation of any of our restaurants or bakeries, materially adversely affecting that facility’s operations and profitability and our ability to obtain similar licenses, permits or approvals elsewhere, any of which could materially adversely affect our financial performance. We are also subject to various environmental regulations governing areas such as water usage, sanitation disposal and transportation mitigation. The United States, on the federal, state and local levels, and other countries are expanding the type, nature and scope of laws and regulations governing other environmental matters, such as reducing greenhouse gas emissions, use of natural gas and water consumption, including in some cases imposing disclosure requirements with respect to such matters. (See the risk factor titled “Failure to appropriately address environmental and social matters,matters could adversely affect our brand, business, results of operations and financial condition.”). We may incur significant additional costs and require operational changes to comply with these laws and regulations and may face fines, penalties or other sanctions, adverse publicity and incur legal liability in the event of our failure to do so.

We are also subject to the regulations of the Department of Homeland Security, the U.S. Citizenship and Immigration Services and U.S. Immigration and Customs Enforcement. Despite our efforts to maintain compliance with legal requirements, including implementation of electronic verification of legal work status, some of our staff members may not meet legal citizenship or residency requirements. In addition, immigration-related employment regulations may make it more difficult for us to identify and hire qualified staff members. Our inability to maintain an experienced and qualified work forceworkforce comprised of individuals who meet all legal citizenship or residency requirements could result in a disruption in our work force,workforce, sanctions against us and adverse publicity, any of which could materially adversely affect our financial performance.

Many laws and regulations governing our business and operations also extend to independent third-party service providers we engage to perform certain services. While we take precautions to help ensure that our third-party service providers comply with applicable laws and to maintain an independent contractor relationship, we cannot be assured such efforts will be successful, and we may incur liability as a joint employer for failures by our independent third-party service providers to comply with applicable laws. Additionally, some jurisdictions have introduced (or may be planning to introduce) legislation seeking to mandate an employment relationship between companies that facilitate third-party delivery services and their service personnel. The U.S. Department of Labor recently issued a final rule concerning independent contractor standards for employees nationwide, which took effect in March 2024. The extent to which this rule may impact our third-party delivery services and their service personnel is not yet known.

Adverse weather conditions, natural disasters and public health emergencies can impact customer traffic, make it more difficult to fully staff our restaurants and more severe events, such as hurricanes, earthquakes, tornadoes, blizzards, wildfires and other natural disasters and public health emergencies, such as the COVID-19 pandemic,emergencies have resulted in and may in the future result in restaurant closures, underutilization of outdoor patio dining and curtailed operations, impediments to availability of staff and supplies and increased commodity costs, sometimes for prolonged periods of time. These effects may become more pronounced in the future as climate change and global warming may cause extended droughts and certain adverse weather conditions and natural disasters to become more frequent, more severe and less predictable over time. Our cash flows may be negatively impacted by delay in the receipt of proceeds under any insurance policies or programs we maintain against certain of these risks or the proceeds may not fully offset any such losses. Any or all these situations could materially adversely affect our financial performance.

The cost of products and services used in our operations are subject to volatility due to the relative availability of labor and distribution, weather, natural disasters, inventory levels and other supply and/or demand impacting events such as tariffs, the terms of international trade agreements, geopolitical events, economic conditions, public health emergencies or other unforeseen circumstances. For example, as a result of historically low cattle herd in the United States, drought, high feed and production costs, tariffs and other circumstances during fiscal 2025, we, along with the restaurant industry and broader market for beef, experienced high inflation around beef prices compared to historical norms, and we expect this trend to continue into the foreseeable future. Furthermore, a significant portion of our imported items experienced price increases and volatility due to tariffs and regulatory changes in 2025. We expect this trend to continue into 2026.

We attempt to negotiate short-term and long-term agreements for some of our principal commodity, supply and equipment requirements, such as certain dairy products and poultry, depending on market conditions and expected demand. We are in the process of contracting for certain key food and non-food supplies for fiscal 2025,2026, and these efforts may not be successful or yield our intended benefits. Due to the inflationary cost pressures we experienced, beginning in 2022, we implemented price increases above our historical levels to help offset inflationary cost pressures. Our commodity inflationary environment began returning to more historical levels in 2024. We will continue to take the cost and inflationary environment into consideration when implementing future pricing decisions. In addition, on a regular basis, we carefully consider opportunities to adjust our menu offerings or ingredients to help manage product availability and cost. However, we can provide no assurance that these efforts will be successful.

We continue to evaluate the possibility of entering into similar short-term and long-term arrangements for other commodities and periodically evaluate hedging vehicles, such as direct financial instruments, to assist us in managing risk and variability associated with such commodities. As of the end of fiscal 2024,2025, we had no hedging contracts in place. Products and services for which we have not entered into contracts can be subject to unforeseen supply and cost fluctuations, which at times may be significant. Additionally, the cost of commodities subject to governmental regulation, such as dairy and corn, can be especially susceptible to price fluctuation. Goods we purchase on the international market may be subject to even greater fluctuations in cost and availability, which could result from a variety of factors, including the value of the U.S. dollar relative to other currencies, international trade disputes, tariffs, geopolitical unrest and varying global demand. New or increased tariffs and other changes in U.S. trade policy could trigger retaliatory actions, including increased tariffs, by affected countries.

Certain products and ingredients commonly used in food preparation are under scrutiny for possibly posing social and environmental risks, including from an animal welfare and environmental sustainability perspective. We use many of these products and ingredients and have adopted a comprehensive Sustainable Sourcing Policy under which, among other things, we have a buying preference for products and ingredients that meet our social, environmental and animal welfare qualifications (“sustainable products”). While we strive to source sustainable products, there is a risk that some of our products or ingredients may become the subject of adverse publicity or shareholder activism, regardless of factual basis. There is currently a smaller market for certain sustainable products, and any condition affecting the demand for or supply of these products may cause significant cost and supply volatility and prevent us from obtaining these products at a reasonable cost. For example, during fiscal 2023 and 2024, we experienced supply shortages with respect to certain sustainable products, which largely resulted from challenges related to a growing framework of laws mandating the use of sustainable products. This may become more prevalent as the European Union’s regulation of sustainably sourced commodities may cause limited inventories of sustainably sourced commodities to be diverted there. For these and other reasons, we cannot be certain that our supply and cost mitigation efforts or our efforts to purchase sustainable products will be successful. Our international licensees are also subject to commodity price fluctuations. Any strategies employed by our international licensees to mitigate the impact these fluctuations have on their businesses may not be successful. Commodity price fluctuations have and may continue to impede our international licensees’ profitability, which may hamper their ability to grow and negatively impact our ability to expand our brand internationally.

If we are unable to attract and retain qualified personnel, including due to increasingly competitive labor markets, our restaurants and bakery operations could be short staffed, we may be forced to incur overtime expenses, and our ability to operate and expand our concepts effectively, grow our business and revenues and meet our customers’ demand could be limited, any of which could materially adversely affect our financial performance. These risks may be exacerbated by anticipated changes to and the enforcement of immigration laws and regulations. (See the risk factor titled “Changes in, or any failure to comply with, applicable laws or regulations could materially adversely affect our ability to operate our restaurants and/or increase our cost to do so, which could materially adversely affect our financial performance.”)

In order to leverage our internal resources and information technology infrastructure, and to support our business continuity and disaster recovery planning efforts, we rely on third-party vendors to provide some of our essential business processes. For example, we rely on a network of third-party distribution warehouses to deliver ingredients and other materials to our restaurants. In some instances, these processes rely on technology and may be outsourced to the vendor in their entirety and in other instances we utilize these vendors’ externally-hostedexternally hosted business applications. Our vendors’ systems are vulnerable to a variety of risks, including, without limitation, theft, casualties such as fire, power loss, telecommunications failure or other catastrophic events, as well as from internal and external cybersecurity threats, including from diverse threat actors, such as state-sponsored organizations, opportunistic hackers and hacktivists, as well as through diverse attack vectors, such as malfeasance by insiders, human or technological error, malicious code embedded in open-source software, or misconfigurations, “bugs” or other vulnerabilities in or issues with commercial software that is integrated into our (or our suppliers’ or service providers’) network infrastructure, products or services, security breaches, denial of service attacks, viruses, worms, malware, ransomware, social engineering/phishing, breaches of the algorithms used to encrypt and protect data and other malicious, or disruptive or unauthorized events that jeopardize the confidentiality, integrity or availability of information systems or information residing therein, including confidential information and personal information (each, a “Cybersecurity Incident” and collectively, “Cybersecurity Incidents”), and have also experienced Cybersecurity Incidents, including credential stuffing attacks in which compromised user credentials were used to breach the system.Incidents. The failure of third-party vendors to provide adequate services,services (especially those that may be a sole source provider of certain services), including, as result of any Security Incident, or to generally fail to employ up-to-date and appropriate data security and internal control practices, could significantly harm our operations and reputation, which could materially adversely affect our financial performance. For example, in JulyOctober 20242025 we experienced limited disruptions to our information technology systems as part of the CrowdStrikeAmazon softwareWeb updateServices outage that resultedimpacted in global information technology outages, including disruptions to our ability to process customer payments at certainthousands of ourbusinesses. restaurants. While weWe experienced thisthese disruptiondisruptions for a limited period of time, theand incidentthey did not have a significant impact on our business. We also rely on third party services to effectively operate our restaurants including, for example, gift card distribution and transaction processing services, point-of-sale system services, online ordering services and food delivery services, and our Cheesecake Rewards® program. We derive substantial revenue from these aspects of our business, which could suffer in the event of any factor that adversely impacts our vendors’ ability to provide such services. Such factors include, without limitation, loss of, or significant change in contractual terms of, key vendor contracts, vendor or processor failures, technology failures, changes in applicable laws or regulations, Cybersecurity Incidents, damage to the reputation of any key vendor and mandated employment relationships between companies that facilitate third-party delivery services and their service personnel. (See the risk factor titled “Changes in, or any failure to comply with, applicable laws or regulations could materially adversely affect our ability to operate our restaurants and/or increase our cost to do so, which could materially adversely affect our financial performance.”)

We currently lease all our restaurant premises and, although we may consider other arrangements, we currently plan to continue to lease our restaurant locations in the future. Some of our leases have terms that will expire in the next few years and beyond. Many of these leases include renewal options; some do not. While lease expirations allow us to opportunistically evaluate the possibility of relocating certain restaurants to higher quality sites and trade areas over time, doing so may involve additional costs, such as increased rent and other expenses related to renegotiating the terms of occupancy of an existing lease, and the costs to relocate and develop a replacement restaurant if we choose not to renew a lease, or are unable to do so, on favorable terms in a desirable location. Delay in delivery of leased premises from our landlords may also result in increased costs. In addition, changing consumer preferences and demographics in a given area have in the past and may in the future cause us to relocate or terminate a restaurant lease. We may elect to terminate certain leases prior to their expiration dates, and we may be unable to negotiate favorable terms for such early terminations. Additional costs related to expiring restaurant lease terms, our inability to terminate certain restaurant leases under favorable terms or the unavailability of suitable replacement locations could materially adversely affect our financial performance.

We are subject to lawsuits, administrative proceedings and claims that arise in the ordinary course of business. These matters typically involve claims by customers, staff members and others regarding issues such as food-borne illness, food safety, premises liability, dram shop liability, compliance with wage and hour requirements, compliance with pay transparency and secure scheduling requirements, work-related injuries, discrimination, harassment, disability and other operational issues common to the foodservice industry. We could be materially adversely affected by negative publicity and litigation costs resulting from these claims, regardless of their validity. Employment-related litigation, particularly with respect to claims styled as class actionor lawsuits,representative actions, such as those brought under statutes like the California Private Attorneys General Act, are especially costly to defend. Also, some employment-related claims in the area of wage and hour disputes are not insurable risks and many employment-related disputes involve uncertainty in judicial interpretation from state to state and from federal to state court with respect to the effectiveness of arbitration agreements with our staff members, particularly those which provide for class waivers.

We are involved in various legal proceedings, including litigation, arbitration and other claims, investigations, inspections, audits, inquiries and similar actions with private litigants and other government governmental authorities. LegalThese proceedings, includingespecially those involving class or collective actionsactions, can be expensiveexpensive, time consuming, and disruptive.disruptive Someto ofour theseoperations. suitsCertain cases may purport or may be determined to be class or collective actions and/or involve parties seekingseek large and/or indeterminate amounts and may remain unresolved for several years. For example, we are currently a defendant in a number of cases containingasserting class or collective-actioncollective allegations, or both, in which the plaintiffs have broughtaction claims under federal and state wage and hour laws. Significant legal fees and costscosts, inor adverse judgments and settlements arising from complex class actionor litigationrepresentative litigation, where such amounts are uninsured or anexceed adverse judgment or settlement that are not insured or are in excess ofavailable insurance coveragecoverage, can materially and adversely affect our financial performance.

All our core and critical applications are housed in an external tier 3 data center, which is a location with redundant and dual-powered servers, storage, network links and other information technology components. To mitigate business interruptions, we employ a disk-based data backup and replication infrastructure between our onsite and external data centers. We provide support for our restaurant operations, with the exception of FRC and the design and construction,construction department, from our corporate headquarters in Calabasas, California, an area that is prone to and has been impacted by natural disasters such as earthquakes and wildfires. Corporate support for our bakery operations is also performed from this centralized location. If we are unable to execute our disaster recovery procedures in whole or in part, we may experience delays in recovery and losses of data, inability to perform vital corporate functions, tardiness in required reporting and compliance, failures to adequately support field operations and other breakdowns in normal operating procedures that could expose us to administrative and other legal claims, any of which could materially adversely affect our financial performance.

A closure of or material damage to one or both of our bakery facilities could impede our ability to supply bakery products to our own and our international licensees’ restaurants as well as to other bakery customers. Such an incident could also result in the loss of critical data regarding our bakery operations. Any of these events could materially adversely affect our financial performance.

There has been an increasing focus from certain governmental and nongovernmental organizations, investors, customers, consumers, employees and others concerning environmental and social matters. Various regulatory authorities have imposed, and may continue to impose, mandatory substantive and/or disclosure requirements with respect to environmental and social matters. For example, we may beare subject to various disclosure requirements (such as information on greenhouse gas emissions, climate risks, use of offsets, and emissions reduction claims) from the State of California, theand Internationalmay Sustainabilitybe Standardssubject Boardto (ISSB)further globaldisclosure sustainability standards,requirements to the extent adopted by jurisdictions in which we operate, as well as the SEC’s climate disclosure rules, if they take effect, among other regulations or requirements.operate. These requirements may not always be uniform across jurisdictions and may have uncertain interpretation, which may result in increased complexity, and cost, for compliance. Any of the foregoing may require us to make additional investments in facilities and equipment, require us to incur additional costs for the collection of data and/or preparation of disclosures and associated internal controls, may impact the availability and cost of key products ingredients, and, in turn, may adversely impact our business, operating results, and financial condition. Environmental and social matters have also been the subject of increased scrutiny by regulators in different jurisdictions which may expose us to potential regulatory scrutiny or enforcement actions related to these activities.

Our actions and/or inactions with respect to environmental and social matters could negatively impact our reputation, which could adversely impact our ability to attract and retain customers, employees or business partners. Both advocates and opponents to certain environmental and social matters are increasingly resorting to a range of activism forms,activism, including media campaigns and litigation, to advance their perspectives. To the extent we are subject to such activism, itwe may requireexperience usreduced tosales, incurincreased costs or otherwiseother adverselyadverse impactimpacts to our business.

We rely heavily on our in-restaurant and enterprise-wide computer systems and network infrastructure across our operations (“Cyber Environment”), which are vulnerable to various risks. ThisOur reliancedependence hason grownour recentlyCyber Environment continues to grow as weour technology systems have hadexpanded to rely to a greater extent on systems such asinclude online ordering, contactless payments, our Cheesecake Rewards® program, systems supporting a remote and hybrid workforce and the like. Remote and hybrid working arrangements at our company (and at many third-party providers) also increase cybersecurity risks due to the challenges associated with managing remote computing assets and security vulnerabilities that are present in many non-corporate and home networks. (See the risk factor titled “If any of our third-party vendors experiences a failure that affects a significant aspect of our business, we may experience data loss, increased costs, operational disruption or other harm, any of which could materially adversely affect our financial performanceperformance.”). Additionally, we mayhave, incorporateto traditionala andlimited generativeextent, incorporated artificial intelligence (“AI”) solutions into our business, whichand may increaseexpand our cybersecurityuse of traditional and privacygenerative riskAI solutions in the future. In addition to risks generally applicable to the use of any information technology, AI solutions may be susceptible to a variety of additional risks, which include, without limitation, AI’s use and increasereliance expenses.on Ourlarge Cyberdatasets Environment,that could be the subject of breaches or misuse, potential liability associated with AI decision making and thebias informationin processedtraining therein,data, includingpotential confidentialliability informationfor andfailing personalto information,comply facewith numerous andrapidly evolving cybersecuritylaws risksregulating that threaten their confidentiality, integrity and availability, including from Cybersecurity Incidents. The efficient management of our operations depends upon our ability to protect our Cyber Environment against damage from theft, casualties such as fire, power loss, telecommunications failure or other catastrophic events,AI, as well as fromethical Cybersecurityconcerns Incidents.relating Weto employ both internal resourcesAI and externalmachine consultants to conduct auditing and testing for weaknesses in our Cyber Environment, intended to help us reduce the likelihood of any Cybersecurity Incident, and have developed a multi-discipline Cybersecurity Incident response plan designed to help ensure that our executives are accurately informed and manage, with the help of content experts, the discovery, investigation and auditing of, and recovery from any Cybersecurity Incidents that we become aware of. Despite these efforts, we can provide no assurance that these measures will successfully prevent all Cybersecurity Incidents or mitigate losses resulting from a Cybersecurity Incident. Cyberattacks are accelerating on a global basis in frequency and magnitude as threat actors are becoming increasingly sophisticated in using techniques and tools—including artificial intelligence— that circumvent security controls, evade detection and remove forensic evidence. As a result, we may be unable to detect, investigate, remediate or recover from future attacks or incidents, or to avoid a material adverse impact to our Cyber Environment, confidential information or business.learning.

We and our third-party vendors have experienced Cybersecurity Incidents and we expect such attacks and incidents to continue in varying degrees. We cannot provide assurances that future cyberCybersecurity incidentsIncidents will not occur or that they will not materially adversely affect our business and financial performance.

Any Cybersecurity Incident or adverse impact to the availability, integrity or confidentiality of our Cyber Environment (or information residing therein, including confidential information and personal information) could result in legal claims or proceedings (such as class actions and securities litigation), regulatory investigations and enforcement actions, fines and penalties, negative reputational impacts that cause us to lose existing or future customers (which may become more likely due to new data breach notification laws including the new cybersecurity incident disclosure rules promulgated by the SEC), and/or significant incident response, system restoration or remediation and future compliance costs. Any or all of the foregoing could materially adversely affect our business, operating results, and financial condition. Additionally, we are required to disclose material Cybersecurity Incidents pursuant to disclosure rules promulgated by the SEC. Any public disclosure relating to a material Cybersecurity Incident could harm our reputation, result in litigation and adversely affect our business, results of operations and financial condition. Finally, we cannot guarantee that any costs and liabilities incurred in relation to a Cybersecurity Incident will be covered by our existing insurance policies or that applicable insurance will be available to us in the future on economically reasonable terms or at all.

We and certain of our third-party vendors receive and maintain certain personal information about our customers, staff members, business partners and others. For example, we transmit confidential credit card information in connection with credit card transactions, we are required to collect and maintain certain personal information in connection with our employment practices, including the administration of our benefit plans, and we collect information for a variety of other reasons, including, in relationconnection towith our Cheesecake Rewards® program. Our collection, storage, handling, use, disclosure, processing and security of personal information is regulated by complex and continually evolving (and at times conflicting) U.S. (federal, state and local) and foreign laws, regulations, and industry standards. Many of these laws, regulations and standards are subject to change and uncertain interpretation and could result in claims, investigations or enforcement actions, changes to our business practices, penalties, increased cost of operations, or otherwise harm our business.

In addition, we utilize a third-party security operations center (“SOC”) provider to monitor and analyze internal network traffic for potential malicious content. However, we can provide no assurance that our security measures will be successful in the event of an attempted or actual Cybersecurity Incident. Any material interruptions or failures in our payment relatedpayment-related systems could have a material adverse effect on our business, results of operations and financial condition. If there are amendments to PCI DSS, the cost of compliance could increaseincrease, and we may suffer loss of critical data and interruptions or delays in our operations as a result. Further, we may become subject to litigation or the imposition of regulatory penalties, which could result in negative publicity and significantly harm our reputation, either of which could materially adversely affect our financial performance.

Under the Revolver Facility, we are subject to the following financial covenants as of the last day of each fiscal quarter: (i) a maximum ratio of net adjusted debt to EBITDAR (the “Amended Net Adjusted Leverage Ratio”) of 4.25 and (ii) a minimum ratio of EBITDAR to interest and rent expense of 1.90. The Loan Agreement also contains customary events of default that include, among others, non-payment of principal, interest or fees, violation of covenants, inaccuracy of representations and warranties, bankruptcy and insolvency events, material judgements, cross defaults to material indebtedness and events constituting a change of control. The occurrence of an event of default could result in the termination of commitments under the Loan Agreement, the declaration that all outstanding loans are immediately due and payable in whole or in part and the requirement of cash collateral deposits in respect of outstanding letters of credit.

Any failure to maintain financial covenants under the Loan Agreement or to have sufficient liquidity to either repay or refinance the then outstanding balance at expiration of the Loan Agreement, or upon any violation of the covenants, could materially adversely affect our financial performance. In addition, the Loan Agreement contains, and any future indebtedness that we may incur may contain, financial and other restrictive covenants that limit our ability to operate our business, raise capital or make payments under our other indebtedness. (See Note 10 of Notes to Consolidated Financial Statements in Part IV, Item 15 for further discussion of our long-term debt.)

As of December 31,30, 2024,2025, we had approximately $455.0$644.0 million in principal amount of consolidated indebtedness, including $345.0$69.0 million aggregate principal amount of convertible senior notes due 2026 (“2026 Notes”) and $575.0 million aggregate principal amount of convertible senior notes due 2030 (“2030 Notes”). The indenture2026 Notes and 2030 Notes are collectively referred to as the “Notes.” The indentures governing the Notes doesdo not contain any meaningful restrictive covenants and doesdo not prohibit us or our subsidiaries from incurring additional indebtedness in the future. Accordingly, we may incur a significant amount of additional indebtedness to meet future financing needs. The incurrence of indebtedness could have significant negative consequences for our security holders and our business, results of operations and financial condition by, among other things:

Noteholders of our outstanding Notes may, subject to limited exceptions, require us to repurchase their Notes following a “fundamental change” (which is defined in the indenture governing the Notes) at a cash repurchase price generally equal to the principal amount of the Notes to be repurchased, plus accrued and unpaid interest, if any. InAdditionally, addition,our all2026 conversionsNotes mature on June 15, 2026, unless earlier repurchased, redeemed or converted. Beginning on February 17, 2026, the noteholders may convert their 2026 Notes at any time at their election until the close of thebusiness Notes will be settled partially or entirely in cash. We may not have enough available cash or be able to obtain financing aton the timesecond wescheduled aretrading requiredday toimmediately repurchasebefore the Notesmaturity or pay the cash amounts due upon conversion. In addition, applicable law, regulatory authorities and the Loan Agreement or any future indebtedness may restrict our ability to repurchase the Notes or pay the cash amounts due upon conversion. For example, the Loan Agreement restricts us from paying cash upon conversion of the Notes in an amount that exceeds the sum of (i) the principal amount being converted and (ii) any payments received by us or any of our subsidiaries pursuant to the exercise, settlement or termination of any related permitted bond hedge transaction.date.

There are no assurances that our Board will continue to declare quarterly dividends. Our ability to pay or to increase dividends on our common stock will depend on our ability to do so under the Loan Agreement or any future credit agreement as well as our ability to generate sufficient cash flows from operations and capacity to borrow funds, which may be subject to economic, financial, competitive and other factors that are beyond our control. (See Note 10 of Notes to Consolidated Financial Statements in Part IV, Item 15 of this report for further discussion of our long-term debt.) Our failure to pay a dividend or to increase it over time may negatively impact investor confidence in us and may negatively impact our stock price.

OurAs of December 30, 2025, our Board of Directors has authorized a share repurchase program of up to 61.0 million shares, of which approximately 3.91.1 million shares remained available for repurchase as of December 31, 2024.repurchase. The share repurchase program does not have an expiration date, does not require the Company to purchase a specific number of shares and may be modified, suspended or terminated at any time, which may result in a decrease in the trading price of our common stock. The timing and total amount of share repurchases will depend upon market conditions and other factors and may be made from time to time in open market purchases, privately negotiated transactions, accelerated share repurchase programs, issuer self-tender offers or otherwise. Future decisions to repurchase shares are at the discretion of the Board of Directors and are based on several factors, including current and forecasted operating cash flows, capital needs associated with new restaurant development and maintenance of existing locations, dividend payments, debt levels and cost of borrowing, obligations associated with the Fox Restaurant Concepts LLC acquisition agreement (the “FRC Acquisition”), our share price and current market conditions. The timing and number of shares repurchased are also subject to legal constraints and covenants under the Loan Agreement that limit share repurchases based on a defined ratio. (See Note 10 of Notes to Consolidated Financial Statements in Part IV, Item 15 of this report for further discussion of our long-term debt.) In addition, the Inflation Reduction Act of 2022 introduced a 1% excise tax on share repurchases, which increases the costs associated with repurchasing shares of our common stock. Even if our share repurchase program is fully implemented, it may not enhance long-term stockholder value or may not prove to be the best use of our cash. Share repurchases could have an impact on the trading price of our common stock, increase the volatility of the price of our common stock or reduce our available cash balance such that we will be required to seek financing to support our operations.

We are subject to income and other taxes in the U.S.United States and foreign jurisdictions. Changes in applicable U.S. or foreign tax laws and regulations, such as the 2017 enactment of Federal legislation commonly referred to as the Tax Cuts and Jobs Act, The Coronavirus Aid, Relief, and Economic Security Act of 2020 , and2020, the Inflation Reduction Act of 20222022, and H.R. 1, commonly referred to as H.R.1, passed the 119th Congress and was signed into law on July 4, 2025 (collectively, the “Tax Acts”), or their interpretation and application, including the possibility of retroactive effect and changes to state tax laws that may occur in response to the Tax Acts, could affect our tax expense and profitability. In addition, we may be subject to tax audit and related litigation and the final determination of any tax audits or related litigation could be materially different from our historical income tax provisions and accruals. Changes in our tax provision or an increase in our tax liabilities, whether due to changes in applicable laws and regulations, the interpretation or application thereof, or a final determination of tax audits or litigation, could materially adversely affect our financial performance.

We utilize a 52/53-week fiscal year ending on the Tuesday closest to December 31 for financial reporting purposes. Fiscal years 2025, 2024 and 2023 each consisted of 52 weeks, while fiscal year 2022 consisted of 53 weeks. Fiscal year 20252026 will consist of 52 weeks. The following MD&A includes a discussion comparing our results in fiscal 20242025 to fiscal 2023.2024. For a discussion comparing our results from fiscal 20232024 to fiscal 2022,2023, refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of our Annual Report on Form 10-K for the fiscal year ended JanuaryDecember 2,31, 2024, filed with the SEC on February 26,24, 2024.2025.

The impact of ongoing geopolitical and macroeconomic eventsevents, including evolving government policies and global trade and tariff dynamics, could lead to further wage inflation, product and services cost inflation, disruptions in the supply chain, staffing challenges, shifts in consumer behavior, and delays in new restaurant openings. Adverse weather conditions and natural disasters may further exacerbate a number of these factors. Any of these factors may have an adverse impact on our business and materially adversely affect our financial performance.

The Cheesecake Factory Incorporated is a leader in experiential dining. We are culinary forward and relentlessly focused on hospitality. WeAs currentlyof ownFebruary 23, 2026, we owned and operateoperated 352368 restaurants throughout the United States and Canada under brands including The Cheesecake Factory® (215216 locations), North Italia® (4348 locations), Flower Child® (3843 locations) and additional brands within our FRC portfolio (4955 locations). Internationally, 3435 The Cheesecake Factory® restaurants operate under licensing agreements. Our bakery division operates two facilities that produce quality cheesecakes and other baked products for our restaurants, international licensees and third-party bakery customers.

Our strategy is driven by our commitment to customerdeliver satisfactionexceptional food and hospitality, and is focusedcentered primarily on menu innovation, service and operational execution to differentiate ourselvesour from other restaurant concepts,concepts and drive competitively strong performance that is sustainable.sustainable over the long-term. Financially, we are focused on prudently managing expenses at our restaurants, bakery facilities and corporate support center, andwhile leveraging our sizescale, purchasing power and operational discipline to makesupport thefinancial best use of our purchasing power.performance.

Investing in new Company-owned restaurant development is our top long-term capital allocation priority, with a focus on opening our concepts in premier locations within both new and existing markets. We plan to continue expanding The Cheesecake Factory, North Italia and Flower Child concepts. In addition, our FRC subsidiary serves as an incubator, innovating new food, dining and hospitality experiences to create fresh,differentiated, excitinghigh-quality concepts.

For The Cheesecake Factory concept, our strategy is to increase comparable restaurant sales by growing average check andwhile maintaining customer traffic through (1) continuing to offer innovative, high quality menu items that offer customers a wide range of options in terms of flavor, price and value, (2) focusing on service and hospitality with the goal of delivering an exceptional dining experience and (3) continuing to provide our customers with convenient options for off-premise dining. We are continuing our efforts on a number of initiatives, including menu innovation, increasing customer throughput in our restaurants, leveraging our gift card program, partnering with a third party to provide delivery services for our restaurants, increasing customer awareness of our online ordering capabilities and improving the pick-up experience, augmenting our marketing programs, including our Cheesecake Rewards® program, enhancing our training programs and leveraging insights from our customer satisfaction measurement platform.

Average check variations are driven by menu price increases and/or changes in menu mix. We generally update The Cheesecake Factory menus twice a year, and our philosophy is to use price increases to help offset key operating cost increases in a manner that supports both our margin and customer traffic objectives. Prior to fiscal 2022, we targeted menu price increases of approximately 2% to 3% annually, utilizing a market-based strategy to help mitigate cost pressure in higher-wage geographies. In the last three fiscal years 2023 and 2024,years, we implemented price increases above our historical levels, to help offset significant inflationary cost pressures. We will continue to take the cost and inflationary environment into consideration when implementing future pricing decisions. In addition, on a regular basis, we carefully consider opportunities to adjust our menu offerings or ingredients to help manage product availability and cost.

Margins are subject to fluctuations in commodity costs, labor, restaurant-level occupancy expenses, general and administrative (“G&A”) expenses and preopening expenses. Our objective is to drive margin expansion,expansion over time by leveraging incremental sales to increase restaurant-level margins at The Cheesecake Factory concept, leveraging our bakery operations, international and consumer packaged goods royalty revenue streams and G&A expense over time,expense, and optimizing our restaurant portfolio.

We plan to employ a balanced capital allocation strategy, comprised of investing in new restaurants that are expected to meet our targeted returns, repaying borrowings undermanaging our Revolveraggregate Facilitydebt levels and returning capital to shareholders through our dividend and share repurchase programs, the latter of which offsets dilution from our equity compensation program and supports our earnings per share growth. Future decisions to pay or topay, increase or decrease dividends or to repurchase shares are at the discretion of the Board and will be dependent on a number of factors, including limitations pursuant to the terms and conditions of theour Loan Agreement and applicable law.

Longer-term, we believe our domestic revenue growth (comprised of our targeted annual unit growth of 7%,7% in aggregate across concepts,concepts and comparable sales growth), combined with margin expansion, planned debt repayments and an anticipated capital return program will support our long-term financial objective of 13%10% to 14%15% total return to shareholders, on average. We define our total return as earnings per share growth plus our dividend yield. (See Item 1A — Risk Factors — “Our stock price could be adversely affected if our performance falls short of our financial guidance and/or market expectations.”)

The Cheesecake Factory sales increased 2.6%1.0% to $2,688.8 million for fiscal 2025 compared to $2,661.6 million for fiscal 20242024. comparedExcluding tothe $2,595.1impact millionof forthe additional gift card breakage recognized in fiscal 2023.2025 (as discussed above), The Cheesecake Factory average sales per restaurant operating week increased 0.7%0.3% to $238,146 in fiscal 2025 from $237,349 in fiscal 2024 from $235,701 in fiscal 2023.2024. Total operating weeks at The Cheesecake Factory restaurants increasedremained 1.9%relatively toflat 11,214with 11,218 in fiscal 20242025 comparedand to 11,01011,214 in the comparable prior year period. The Cheesecake Factory comparable sales increased by 1.0%,0.1%, or $25.9$2.2 million, from fiscal 2023.2024. The increase from fiscal 20232024 was primarily driven by an increase in average check of 1.7%2.4% (based on an increase of 4.7%4.3% in menu pricing, partially offset by a 3.0%1.9% negative change from menu mix), partially offset by decreased customer traffic of 0.7%.2.3%. We implemented effective menu price increases of approximately 2.5%2.4% and 2.0%1.5% in the first and third quarters of fiscal 2024,2025, respectively. We are in the process of implementing an approximate 2.4%1.5% menu price increase in the first quarter of fiscal 2025.2026. Sales through the off-premise channel comprised approximately 21% of our restaurant sales during fiscal 2024 as compared to 22% inboth fiscal 2023.2025 and fiscal 2024. We account for each off-premise order as one customer for traffic measurement purposes. Therefore, average check is generally higher for off-premise orders as most of these orders are for more than one customer.

North Italia sales increased 15.7%15.5% to $345.9 million for fiscal 2025 compared to $299.6 million for fiscal 2024 compared to $258.9 million for fiscal 2023.2024. North Italia average sales per restaurant operating week decreased 1.0%0.9% to $146,877 in fiscal 2025 from $148,231 in fiscal 2024 from $149,727 in fiscal 2023.2024. Average sales per restaurant operating week arewere impacted by the acceleration of new restaurant openings that have not matured. Total operating weeks at North Italia increased 16.9%16.5% to 2,0212,355 in fiscal 20242025 compared to 1,7292,021 in the prior year. North Italia comparable sales increaseddecreased approximately 2% from fiscal 2023.2024. The increasedecrease from fiscal 20232024 was primarily driven by decreased customer traffic of 5%, partially offset by an increase in average check of approximately 3% (based on an increase of 6%4% in menu pricing, partially offset by a 3%1% negative impact from mix), partially offset by decreased customer traffic of 1%.. We implemented effective menu price increases of approximately 2.2%2.0% and 2.3%1.5% in the second and fourth quarters of fiscal 2024,2025, respectively.

Other FRC sales increased 13.7%18.4% to $355.1 million for fiscal 2025 compared to $300.0 million for the fiscal 2024 compared to $263.9 million for fiscal 2023.2024. Other FRC average sales per restaurant operating week decreasedincreased 4.3%0.2% to $132,733 in fiscal 2025 from $132,495 in fiscal 2024 from $138,469 in fiscal 2023.2024. Average sales per restaurant operating week are impacted by new restaurant openings as well as the concept mix.mix and a decrease in comparable sales. Total operating weeks at Other FRC increased 18.8%18.2% to 2,2642,675 in fiscal 20242025 compared to 1,9062,264 in the prior year.

Restaurants become eligible to enter the comparable sales base in their 19th month of operation. At December 31,30, 2024,2025, there were eightseven The Cheesecake Factory restaurants andrestaurants, nine North Italia restaurants and 11 Flower Child locations not yet in the comparable sales bases. International licensed locations and restaurants that are no longer in operation, including those which we have relocated, are excluded from comparable sales calculations.

Food and beverage costs consist of raw materials and ingredients used in the food and beverage products sold in our restaurants and to our third-party bakery customers. As a percentage of revenues, food and beverage costs were 21.7% for fiscal 2025 compared to 22.5% for fiscal 2024 compared to 23.4% for fiscal 2023,2024, due primarily to menufavorable price increases in excess ofcommodity inflation across most categories (0.5%) and a shift in sales mix (0.2%).

As a percentage of revenues, labor expenses, which include restaurant-level labor costs and bakery production labor, including associated fringe benefits, were 35.3%35.0% and 35.7%35.3% in fiscal 20242025 and fiscal 2023,2024, respectively. This decrease was primarily due to menu price increases in excess of wage rate inflation and improved staffing levels (0.6%0.5%) and the benefit from gift card breakage revenue (0.2%), partially offset by higher managementgroup salariesmedical cost due to improvedlarger staffingclaim levelsactivity (0.2%0.3%).

Other operating costs and expenses consist of all other restaurant-level operating costs, the major components of which are occupancy expenses (rent, common area expenses, insurance, licenses, taxes and utilities), dining room and to-go supplies, repairs and maintenance, janitorial expenses, credit card processing fees, marketing including delivery commissions, incentive compensation, and bakery production overhead. As a percentage of revenues, other operating costs and expenses were 26.7%27.0% and 26.8%26.7% in fiscal 20242025 and fiscal 2023,2024, respectively. This variance was primarily driven by higher facility-related costs (0.2%).

G&A expenses consist of the restaurant management recruiting and training program, restaurant field supervision, corporate support and bakery administrative organizations, as well as gift card commissions to third-party distributors. As a percentage of revenues, G&A expenses were 6.4%6.5% and 6.3%6.4% for fiscal 20242025 and fiscal 2023,2024, respectively. This variance was primarily driven by a write-down of gift card inventory in fiscal 2025 (0.2%).

We recorded $2.4$14.4 million and $11.7$2.4 million of expense during fiscal 20242025 and 2023,2024, respectively, of acquisition-related contingent consideration, compensation and amortization. In fiscal 2025, we recorded a $10.5 million increase in the fair value of the contingent consideration and compensation liability primarily stemming from updating the probability of achievement due to passage of time as well as recent performance and $3.9 million of amortization. In fiscal 2024, we recorded $4.3 million of amortization, partially offset by a $1.9 million decrease in the fair value of the contingent consideration and compensation liability primarily stemming from a change in the volatility factors, as well as a decrease in estimated fiscal 2025 revenues and estimated future revenues utilized in the calculation. In fiscal 2023, there was a $7.3 million increase in the fair value primarily stemming from a change in the volatility factors, as well as an increase in fiscal 2023 revenues and estimated future revenues utilized in the calculation and $4.4 million of amortization.

Preopening costs were $33.1 million for fiscal 2025 compared to $27.5 million for fiscal 20242024. We opened 25 restaurants in fiscal 2025 comprised of four The Cheesecake Factory, six North Italia, nine Other FRC, and six Flower Child locations compared to $25.4 million for fiscal 2023. We opened 23 restaurants in fiscal 2024 comprised of three The Cheesecake Factory (including two relocations), six North Italia, eight Other FRC, and six Flower Child locations compared to 16 restaurants in fiscal 2023 comprised of six The Cheesecake Factory, three North Italia, six Other FRC, and one Flower Child location.locations. Restaurant-level preopening costs include all costs to relocate and compensate restaurant management staff members during the preopening period, costs to recruit and train hourly restaurant staff members, and wages, travel and lodging costs for our opening training team and other support staff members. Also included in preopening costs are expenses for maintaining a roster of trained managers for pending openings, the associated temporary housing and other costs necessary to relocate managers in alignment with future restaurant opening and operating needs. Preopening costs can fluctuate significantly from period to period based on the number, mix and timing of restaurant openings and the specific preopening costs incurred for each restaurant.

Income Tax Provision/(Benefit)

In fiscal 2024,2025, we had an income tax provision of $14.5 million, an effective tax rate of 8.9%, compared to an income tax provision of $14.3 million, an effective tax rate of 8.3%, compared to an income tax benefit of $1.3 million, an effective tax rate of (1.3%) in fiscal 2023.2024. The increase was primarily due to leveragea on higher income before taxes, predominantly relatedchange to employmentour credits,reserve for uncertain tax positions (11.3%2.0%), non-deductible costs in fiscal 2025 associated with the repurchase of our 2026 Notes (1.6%) and a larger amount of non-deductible executive compensation (0.5%0.6%). These factors were offset by aleverage largeron reductionlower income before taxes, predominantly related to ouremployment reservecredits for(0.9%), uncertaina tax positionswindfall in fiscal 2025 as compared to a tax shortfall in fiscal 2024 related to equity compensation (0.7%2.2%) and alower higherstate amounttaxes ofin employmentrelation taxto creditsincome before taxes (1.5%0.3%). (See Note 17 of Notes to Consolidated Financial StatementStatements in Part IV, Item 15 of this report for further discussion of income taxes.)

Cash flows from operations increased by $49.9$33.0 million from fiscal 20232024 primarily due to higher net income after excluding non-cash activity, timing of operating lease commencements and a decrease in inventory levels, partially offset by lower gift card liabilities, a decrease in prepaid expenses during fiscal 2024 due to a higher balance in fiscal 2023 related to the timing of January rent payments, partially offset by lower impairment of assetspayments and leasehigher terminationincome expenses,tax a payment of deferred consideration and compensation related to the FRC acquisition in excess of acquisition-date fair value and an increase in inventory levels.payments. Typically, our requirement for working capital has not been significant since our restaurant customers pay for their food and beverage purchases in cash or cash equivalents at the time of sale, and we are able to sell many of our restaurant inventory items before payment is due to the suppliers of such items.

We opened 25 restaurants in fiscal 2025 comprised of four The Cheesecake Factory, six North Italia, nine Other FRC and six Flower Child locations compared to 23 restaurants in fiscal 2024 comprised of three The Cheesecake Factory, six North Italia, eight Other FRC and six Flower Child locations compared to 16 restaurants in fiscal 2023 comprised of six The Cheesecake Factory, three North Italia, six Other FRC and one Flower Child location.locations. We expect to open as many as 2526 new restaurants in fiscal 20252026 across our portfolio of concepts, with approximately halfone third of the openings occurring in the first half of fiscal 2025.2026. We anticipate approximately $190 million to $210 million in capital expenditures to support this level of unit development, as well as required maintenance on our restaurants. This estimate includes new restaurant construction expenses, some of which may be classified as operating lease assets instead of additions to property and equipment in the statement of cash flows.

On October 6, 2022, we entered into a Fourth Amended and Restated Loan Agreement (the “Loan Agreement” and the revolving credit facility provided thereunder, the “Revolver Facility”). The Loan Agreement amends and restates in its entirety our prior credit agreement. The Revolver Facility, which terminates on October 6, 2027, provides us with revolving loan commitments that total $400 million, of which $50 million may be used for issuances of letters of credit. The Revolver Facility contains a commitment increase feature that, subject to certain conditions precedent, could provide for an additional $200 million in revolving loan commitments. Our obligations under the Revolver Facility are unsecured. Certain of our material subsidiaries have guaranteed our obligations under the Revolver Facility. In the fourth quarter of fiscal 2023, we borrowed and then repaid $15.0 million on the Revolver Facility. In the fourth quarter of fiscal 2024, we repaid $20.0 million on the Revolver Facility. In the first quarter of fiscal 2025, we repaid $110.0 million on the Revolver Facility. As of December 31,30, 2024,2025, we had net availability for borrowings of $256.5$366.5 million, based on a $110.0 millionno outstanding debt balance and $33.5 million in standby letters of credit under the Revolver Facility.

Under the Revolver Facility, we are subject to financial covenants, as well as to customary events of default that, if triggered, could result in acceleration of the maturity of the Revolver Facility. Subject to certain exceptions, the Revolver Facility also limits distributions with respect to our equity interests, such as cash dividends and share repurchases, based on a defined ratio, and also sets forth negative covenants that restrict indebtedness, liens, investments, sales of assets, fundamental changes and other matters. AtAs of December 31,30, 2024,2025, we were in compliance with all covenants in effect at that date. (See Note 10 of Notes to Consolidated Financial Statements in Part IV, Item 15 of this report for further discussion of our long-term debt.)

OnUnder Octoberauthorization 26, 2022,by our Board increased the authorization to repurchase our common stock by 5.0 million sharesup to 61.0 million shares.shares Underof thisour authorization,common stock, we have cumulatively repurchased 57.159.9 million shares at a total cost of $1,829.7$1,983.6 million, excluding excise tax through December 31,30, 2024.2025. In the first quarter of fiscal 2025, we used approximately $130.0 million of the net proceeds from the 2030 Note issuance to repurchase approximately 2.4 million shares of our common stock. In total, we repurchased 2.9 million shares at a cost of $153.9 million, excluding excise tax, during fiscal 2025. We repurchased 0.5 million shares at a cost of $18.0 million, excluding excise tax, during fiscal 2024 compared to 1.4 million shares at a cost of $46.1 million, excluding excise tax, during fiscal 2023.2024.

Our objectives with regard to share repurchases have been to offset the dilution to our shares outstanding that results from equity compensation grants and to supplement our earnings per share growth. Our share repurchase program does not have an expiration date, does not require us to purchase a specific number of shares and may be modified, suspended or terminated at any time. Future decisions to repurchase shares are at the discretion of the Board and are based on several factors, including current and forecasted operating cash flows, capital needs associated with new restaurant development and maintenance of existing locations, dividend payments, debt levels and cost of borrowing, obligations associated with the FRC acquisition, our share price and current market conditions. The timing and number of shares repurchased are also subject to legal constraints and financial covenants under our credit facility that limit share repurchases based on a defined ratio. (See NoteNotes 14 and 19 of Notes to Consolidated Financial Statements in Part IV, Item 15 of this report for further discussion of our repurchase authorization and methods.methods and increased authorized amount under our share repurchase program, respectively.)

In fiscal 2025, we recorded $23.0 million of expense primarily related to the impairment of long-lived assets for one North Italia, one Grand Lux Cafe and four Other FRC locations (one previously partially impaired) and lease termination related to two Grand Lux Cafes (one that closed in fiscal 2023 and one that closed in early 2026) and one Other FRC (that closed in early 2026). In fiscal 2024, we recorded impairment of assets and lease termination expenses of $13.6 million primarily related to impairment of long-lived assets for one The Cheesecake Factory (previously partially impaired) and six Other FRC locations (one previously partially impaired) and lease termination income, net for four The Cheesecake Factory restaurants, one Grand Lux Cafe location, one Flower Child location, one Social Monk location and one Other FRC location (that closed in early fiscal 2025). In fiscal 2023, we recorded $29.5 million of expense primarily related to the impairment of three The Cheesecake Factory (one previously impaired), one North Italia (previously impaired), one Other FRC and two Grand Lux Cafe lease terminations. In fiscal 2022, we recorded $31.4 million of expense primarily related to the impairment of three The Cheesecake Factory, one Other FRC and three Grand Lux Cafe locations. (See Note 1 in Notes to Consolidated Financial Statements in Part IV, Item 15 of this report for further discussion related to long-lived asset impairment.)

These statements may be contained in our filings with the SEC, in our press releases, in other written communications, and in oral statements made by or with the approval of one of our authorized officers. These statements are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, as codified in Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (together with the Securities Act, the “Acts”). This includes, without limitation, statements regarding corporate social responsibility (“CSR”), andincluding in our CSR report, the effects of geopolitical and macroeconomic factors, including evolving government policies and global trade dynamics, on our financial condition and our results of operations, financial guidance and projections, as well as expectations of our future financial condition, results of operations, sales, target growth rates, cash flows, quarterly dividends, share repurchases, capital structure and leverage, corporate strategy, potential price increases, plans, targets, goals, objectives, performance, growth potential, competitive position and business, and statements regarding our ability to: leverage our competitive strengths, including developing and investing in new restaurant concepts and expanding The Cheesecake Factory® brand to other retail opportunities; maintain our aggregate sales volumes; deliver comparable sales growth; provide a differentiated experience to customers; outperform the casual dining industry and increase our market share; leverage sales increases and manage flow through; manage market risks and cost pressures, including increasing wage rates and insurance costs, and increase margins; grow earnings; remain relevant to consumers; attract and retain qualified management and other staff; increase shareholder value; find suitable sites and manage increasing construction costs; profitably expand our concepts domestically and in Canada, and work with our licensees to expand The Cheesecake Factory internationally; support the growth of North Italia, Flower Child and additional brands within our Fox Restaurant Concepts (“Other FRC”) restaurants; and utilize our capital effectively. These forward-looking statements may be affected by various factors including: economic, public health and political conditions that impact consumer confidence and spending, including government shutdowns, trade policy, changes in interest rates, periods of heightened inflation and market instability, and armed conflicts; supply chain disruptions; demonstrations, political unrest, potential damage to or closure of our restaurants and potential reputational damage to us or any of our brands; pandemics and related containment measures, including the potential for quarantines or restriction on in-person dining; acceptance and success of The Cheesecake Factory in international markets; acceptance and success of North Italia, Flower Child and Other FRC restaurants; the risks of doing business abroad through Company-owned restaurants and/or licensees; foreign exchange rates, tariffs and cross border taxation; changes in unemployment rates; increases in minimum wages and benefit costs; the economic health of our landlords and other tenants in retail centers in which our restaurants are located, and our ability to successfully manage our lease arrangements with landlords; the economic health of suppliers, licensees, vendors and other third parties providing goods or services to us; the timing of our new unit development and related permitting; compliance with debt covenants; strategic capital allocation decisions including with respect to share repurchases or dividends; the ability to achieve projected financial results; the resolution of uncertain tax positions with the Internal Revenue Service and the impact of tax reform legislation; changes in laws impacting our business; adverse weather conditions and natural disasters in regions in which our restaurants are located; factors that are under the control of government agencies, landlords and other third parties; the risks, costs and uncertainties associated with opening new restaurants; and other risks and uncertainties detailed from time to time in our filings with the SEC. Such forward-looking statements include all other statements that are not historical facts, as well as statements that are preceded by, followed by or that include words or phrases such as “believe,” “plan,” “will likely result,” “expect,” “intend,” “will continue,” “is anticipated,” “estimate,” “project,” “may,” “could,” “would,” “should” and similar expressions. These statements are based on our current expectations and involve risks and uncertainties whichthat may cause results to differ materially from those set forth in such statements.

The impact of ongoing geopolitical and macroeconomic events, including evolving government policies and global trade and tariff dynamics, could lead to issues such as further wage inflation, product and services cost inflation, disruptions in the supply chain, staffing challenges, shifts in consumer behavior and delays in new restaurant openings. Adverse weather conditions and natural disasters may further exacerbate a number of these factors. For more information regarding the risks to our business relating to the geopolitical and macroeconomic events, see Part II, Item 1A of this report, “Risk Factors,” and “Risk Factors” in Item 1A of our Annual Report on Form 10-K for the fiscal year ended December 30, 2025.

Thirteen Weeks Ended MarchJune 31,30, 2026 Compared to Thirteen Weeks Ended AprilJuly 1, 2025

Revenues increased 5.6%7.7% to $978.8$1,029.6 million for the fiscal quarter ended MarchJune 31,30, 2026 compared to $927.2$955.8 million for the comparable prior year period, primarily due to an increase in comparable restaurant sales and additional revenue related to new restaurant openings and an increase in comparable restaurant sales.openings.

The Cheesecake Factory Restaurants sales increased 2.6%6.8% to $690.5$729.5 million for the firstsecond quarter of fiscal 2026, compared to $672.7$683.3 million for the firstsecond quarter of fiscal 2025. Average sales per restaurant operating week increased 1.9%6.2% to $245,196$259,785 in the firstsecond quarter of fiscal 2026 from $240,692$244,544 in the firstsecond quarter of fiscal 2025. Total operating weeks at The Cheesecake Factory Restaurants increased 0.8%0.5% to 2,8162,808 in the firstsecond quarter of fiscal 2026 compared to 2,7952,794 in the prior year. The Cheesecake Factory comparable sales increased by 1.6%,5.8%, or $10.3$38.9 million, from the firstsecond quarter of fiscal 2025. The increase from firstthe second quarter of fiscal 2025 was primarily driven by an increase in average check of 3.0%3.1% (based on an increase of 3.3%3.0% in menu pricing,pricing partially offset byand a 0.3%0.1% negativepositive change from menu mix), partiallyand offset by decreasedhigher customer traffic of 1.4%.2.7%. We implemented effective menu price increases of approximately 1.5% in both the first quarter of fiscal 2026 and the third quarter of fiscal 2025, respectively. We are in the process of implementing approximately a 1.5% menu price increase in the third quarter of fiscal 2026. Sales through the off-premise channel comprised approximately 22%21% of our restaurant sales during both the firstsecond quarter of fiscal 2026 and fiscal 2025.

North Italia sales increased 7.3%8.4% to $89.5$98.4 million for the firstsecond quarter of fiscal 2026, compared to $83.4$90.8 million for the firstsecond quarter of fiscal 2025. Average sales per restaurant operating week decreased 3.9%1.6% to $143,167$151,446 in the firstsecond quarter of fiscal 2026 from $148,947$153,949 in the firstsecond quarter of fiscal 2025. Total operating weeks at North Italia increased 11.6%10.2% to 625650 in the firstsecond quarter of fiscal 2026 compared to 560590 in the prior year. North Italia comparable sales decreased approximately 2%3% from the firstsecond quarter of fiscal 2025. The decrease from fiscal 2025 was primarily driven by decreased customer traffic of 6%,5%, partially offset by an increase in average check of 4%2% (based on an increase of 3% in menu pricing and a 1% positivenegative impact from mix). We implemented effective menu price increases of approximately 2.0%1.0% and 1.5% in the second and fourth quarters of fiscal 2025, respectively. We are in the process of implementing a 1.0% menu price increase in the second quarter of fiscal 2026.2026 and fourth quarter of fiscal 2025, respectively.

Flower Child sales increased 21.1%17.5% to $52.6$56.6 million for the firstsecond quarter of fiscal 2026, compared to $43.5$48.2 million for the firstsecond quarter of fiscal 2025. Flower Child sales per restaurant operating week increased 7.0%10.8% to $94,524$101,252 in the firstsecond quarter of fiscal 2026 from $88,335$91,400 in the firstsecond quarter of fiscal 2025. Total operating weeks at Flower Child increased 13.2%6.1% to 557559 in the firstsecond quarter of fiscal 2026 compared to 492527 in the prior year. Flower Child comparable sales increased approximately 10%13% from the firstsecond quarter of fiscal 2025. The increase from the firstsecond quarter of fiscal 2025 includes an increase of 2%3% in menu pricing.

Other FRC sales increased 19.6%15.4% to $104.5$104.0 million for the firstsecond quarter of fiscal 2026, compared to $87.4$90.2 million for the firstsecond quarter of fiscal 2025. Other FRC average sales per restaurant operating week increased 3.9% to $145,169$142,120 in the firstsecond quarter of fiscal 2026 from $139,655$136,841 in the firstsecond quarter of fiscal 2025. Total operating weeks at Other FRC increased 15.0%11.1% to 720732 in the firstsecond quarter of fiscal 2026 compared to 626659 in the prior year.

Restaurants become eligible to enter the comparable sales base in their 19th month of operation. As of MarchJune 31,30, 2026, there were six The Cheesecake Factory Restaurants, 10nine North Italia restaurants and 10eight Flower Child locations not yet in their respective comparable sales bases. International licensed locations and restaurants that are no longer in operation, including those which we have relocated, are excluded from comparable sales calculations.

Food and beverage costs consist of raw materials and ingredients used in the food and beverage products sold in our restaurants and to our third-party bakery customers. As a percentage of revenues cost of sales were 21.7%21.8% and 21.8%21.6% in the firstsecond quarters of fiscal 2026 and 2025, respectively, primarily due to favorablehigher commoditymeat, inflationproduce particularlyand inseafood costs (0.7%), partially offset by lower dairy pricing (0.7%0.4%) partially offset by higher meat and seafood costs (0.6%).

As a percentage of revenues, labor expenses, which include restaurant-level labor costs and bakery production labor, including associated fringe benefits, were 35.5%34.1% and 35.7%34.9% in the firstsecond quarters of fiscal 2026 and 2025, respectively. This decrease was primarily due to menusales price increases in excess of wage rate inflationleverage and associated productivity (0.4%), partially offset by higher group medical cost due to increased claim activitygains (0.3%0.6%).

Other operating costs and expenses consist of all other restaurant-level operating costs, the major components of which are occupancy expenses (rent, common area expenses, insurance, licenses, taxes and utilities), dining room and to-go supplies, repairs and maintenance, janitorial expenses, credit card processing fees, marketing including delivery commissions, and incentive compensation, as well as bakery production overhead. As a percentage of revenues, other operating costs and expenses were 27.0%26.5% and 26.6%26.8% in the firstsecond quarter of fiscal 2026 and 2025, respectively. This variance was primarily driven by highersales utility costs due to higher ratesleverage (0.2%0.3%) and lower insurance costs (0.3%), partially offset by higher bakerymarketing production overhead expensecosts (0.2%0.3%).

G&A expenses consist of the restaurant management recruiting and training program, restaurant field supervision, corporate support and bakery administrative organizations, as well as gift card commissions to third - partythird-party distributors. As a percentage of revenues, G&A expenses were 6.5%6.4% and 6.1% in both the firstsecond quarter of fiscal 2026 and 2025, respectively. This variance was primarily reflectingdriven by higher legal fees (0.2%0.1%), partiallyand offset by lowerhigher stock-based compensation expense (0.1%).

During the firstsecond quarter of fiscal 2026, we recorded impairment of assets and lease termination expenses of $0.8$0.1 million primarily related to lease termination costs for two The Cheesecake Factory, one Grand Lux Cafe and one Other FRC location. During the firstsecond quarter of fiscal 2025, we recorded impairment of assets and lease termination expenses of $0.4$0.2 million primarily related to lease termination costs for one OtherThe FRCCheesecake Factory location.

Preopening costs were $5.5$7.0 million and $8.1$9.0 million in the firstsecond quarter of fiscal 2026 and 2025, respectively. We opened onetwo North Italia, one Flower Child and one Other FRC locationlocations in the firstsecond quarter of fiscal 2026 compared to threetwo The Cheesecake Factory, one North Italia, three Flower Child and two Other FRC locations in the firstsecond quarter of fiscal 2025. Restaurant-level preopening costs include all costs to relocate and compensate restaurant management staff members during the preopening period, costs to recruit and train hourly restaurant staff members, and wages, travel and lodging costs for our opening training team and other support staff members. Preopening costs also include expenses for maintaining a roster of trained managers for pending opening and the associated temporary housing and other costs necessary to relocate managers in alignment with future restaurant opening and operating needs. Preopening costs can fluctuate significantly from period to period based on the number, mix and timing of restaurant openings and the specific preopening costs incurred for each restaurant.

Our effective income tax rate was 7.1%9.5% and 4.5%9.3% for the first quartersix months of fiscal 2026 and 2025, respectively. The increase was primarily due to leverage on higher annual forecasted income before taxes, predominantlyprimarily relateddue to employment credits and(2.4%), a change to our reserve for uncertain tax windfall related to equity compensationpositions (3.3%0.6%) and an increase in non-deductible executive compensation (1.4%0.5%),. These factors were partially offset by non-deductible costs in fiscal 2025 associated with the repurchase of our 2026 Notes (1.2%), a highergreater tax windfall in the first six months of fiscal 2026 as compared to the comparable prior period related to equity compensation (1.2%) and higher non-taxable gains in the first quartersix months of fiscal 2026 as compared to the comparable prior period on our investments in variable life insurance contracts used to support our non-qualified deferred compensation plan (2.3%0.6%).

During the first quartersix months of fiscal 2026, our cash and cash equivalents increaseddecreased by $19.4$20.5 million to $235.1$195.2 million. The following table presents, for the periods indicated, a summary of our key cash flows from operating, investing and financing activities (in millions):

Cash flows from operations increased by $17.8$53.1 million from the first quartersix months of fiscal 2025 primarily due to net income after excluding the non-cash activity, lower accounts and other receivable balances, timing of operating lease commencements, higher payables,payables and inventory movement, lower accounts and other receivable balances, partially offset by higherincreased prepaidpayment expensesof deferred consideration and compensation related to the timingFRC acquisition in excess of Aprilacquisition-date 2026fair rentvalue payments.and higher income taxes paid. Typically, our requirement for working capital has not been significant since our restaurant customers pay for their food and beverage purchases in cash or cash equivalents at the time of sale, and we are able to sell many of our restaurant inventory items before payment is due to the suppliers of such items.

Capital expenditures for new restaurants, including locations under development, were $24.6$46.7 million and $22.9$44.0 million for the first quartersix months of fiscal 2026 and 2025, respectively. Capital expenditures also included $16.4$35.1 million and $17.1$33.6 million for our existing restaurants and $2.4$4.5 million and $2.8$6.8 million for bakery and corporate capacity and infrastructure investments, in the first quartersix months of fiscal 2026 and 2025, respectively.

We opened threeseven restaurants in the first quartersix months of fiscal 2026 comprised of onethree North Italia, onetwo Flower Child and onetwo Other FRC locationlocations compared to eight16 restaurants in the first quartersix months of fiscal 2025 comprised of threetwo The Cheesecake Factory, four North Italia, threesix Flower Child and twofour Other FRC locations. We expect to open as many as 26 new restaurants in fiscal 2026 across our portfolio of concepts. We anticipate approximately $210 million in capital expenditures to support this level of unit development, as well as required maintenance on our restaurants. This estimate includes new restaurant construction expenses, some of which may be classified as operating lease assets instead of additions to property and equipment in the statement of cash flows.

On March 26, 2026, we entered into a Fifth Amended and Restated Loan Agreement (the “Loan Agreement” and the revolving credit facility provided thereunder, the “Revolver Facility”). The Revolver Facility, which terminatesmatures on March 26, 2031, provides us with revolving loan commitments that total $400 million, of which $85 million may be used for issuances of letters of credit and $10 million for swingline loans. The Revolver Facility contains (i) a commitment increase feature that, subject to certain conditions precedent, could provide for an additional $200 million in revolving loan commitments and (ii) a feature that permits the letter of credit issuers thereunder to increase their letter of credit sublimits by $25 million in the aggregate. Our obligations under the Revolver Facility are unsecured. Certain of our material subsidiaries have guaranteed our obligations under the Revolver Facility. As of MarchJune 31,30, 2026, we had net availability for borrowings of $366.5 million, based on no outstanding debt balance and $33.5 million in standby letters of credit under the Revolver Facility.

On February 28, 2025, we issued $575.0 million in aggregate principal amount of convertible senior notes (“2030 Notes”), which will mature on March 15, 2030, unless earlier repurchased, redeemed or converted. The net proceeds from the sale of the 2030 Notes were approximately $558.5 million after deducting issuance costs of $16.5 million. As of MarchJune 31,30, 2026, the 2030 Notes had a balance of $562.1$562.9 million, net of unamortized issuance costs of $12.9$12.1 million. As of MarchJune 31,30, 2026, the conversion rate for the 2030 Notes was 14.144414.1514 shares of common stock per $1,000 principal amount of the 2030 Notes, which represents a conversion price of approximately $70.70$70.66 per share of common stock. (See Note 5 of Notes to Condensed Consolidated Financial Statements in Part I, Item 1 of this report for further discussion on our debt.) In connection with the cash dividend that was declared by our Board on AprilJuly 23, 2026, we will, on MayAugust 13,11, 2026, adjust the conversion rate (which is expected to increase) and the conversion price (which is expected to decrease) of the 2030 Notes in accordance with the terms. (See Note 5 of Notes to Condensed Consolidated Financial Statements in Part I, Item 1 of this report for further discussion on our debt.)

On June 15, 2021, we issued $345.0 million in aggregate principal amount of convertible senior notes (“2026 Notes”), which will mature on June 15, 2026, unless earlier repurchased, redeemed or converted.. The net proceeds from the sale of the 2026 Notes were approximately $334.9 million after deducting issuance costs of $10.1 million. On February 28, 2025, we used part of the net proceeds from the issuance of the 2030 Notes to repurchase approximately $276.0 million aggregate principal amount of the 2026 Notes in a privately-negotiated transaction for aggregate consideration of $289.8 million, which included a premium of $13.8 million. AsDuring the second quarter of March 31,fiscal 2026, thenoteholders 2026converted Notes had a gross principal balance of $69.0$0.1 million and a balance of $68.9 million, net of unamortized issuance costs of $0.1 million. As of March 31, 2026, the conversion rate for the 2026 Notes was 14.2316 shares of common stock per $1,000aggregate principal amount of the 2026 Notes,Notes which representswe asettled conversionin pricecash, including payment of approximatelyaccrued $70.27interest. per share of common stock. In connection with the cash dividend that was declared by our Board on April 23, 2026, we will, on May 13, 2026, adjust the conversion rate (which is expected to increase) and the conversion price (which is expected to decrease) of theThe 2026 Notes matured on June 15, 2026 and we repaid in accordancecash the remaining outstanding principal balance of $69.0 million, together with theall terms.accrued interest. (See Note 5 of Notes to Condensed Consolidated Financial Statements in Part I, Item 1 of this report for further discussion on our debt.)

Common stock dividends of $14.2$29.9 million and $12.5$26.8 million were paid in the firstsix quartermonths of fiscal 2026 and 2025, respectively. As further discussed in Note 12 of Notes to Condensed Consolidated Financial Statements in Part I, Item 1 of this report, in AprilJuly 2026, our Board declared a quarterly dividend to be paid in MayAugust 2026. Future decisions to pay or to increase or decrease dividends are at the discretion of the Board and will be dependent on our operating performance, financial condition, capital expenditure requirements, limitations on cash distributions pursuant to the terms and conditions of the Loan Agreement and applicable law, and other such factors that the Board considers relevant.

On February 12, 2026, our Board increased the authorization to repurchase our common stock by 5.0 million shares to 66.0 million shares. Under this authorization, we have cumulatively repurchased 60.260.4 million shares at a total cost of $2,002.8$2,012.1 million, excluding excise tax, through MarchJune 31,30, 2026. We repurchased 0.30.5 million shares at a cost of $19.2$28.5 million, excluding excise tax, during the first quartersix months of fiscal 2026. We repurchased 2.6 million shares at a cost of $141.4$141.5 million, excluding excise tax, during the first quartersix months of fiscal 2025.

As of MarchJune 31,30, 2026, we had no financing transactions, arrangements or other relationships with any unconsolidated entities or related parties. Additionally, we had no financing arrangements involving synthetic leases or trading activities involving commodity contracts.