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

If we are unable to successfully design and execute aour business strategy plan, our gross sales and profitability may be adversely affected.

Changing health or dietary preferences and currentweight-management andmedications new medicalor treatments may cause consumers to avoid our products in favor of alternative foods and/orrestaurants to consume less of our products.products or to decrease the amount they eat at restaurants in general. The food service industry as a whole depends on consumer preferences at the local, regional, national, and international levels. New information or changes in dietary, nutritional or health insurancepublic-health guidelines, whether issued by government agencies, academic studies, advocacy organizations or similar groups, may cause consumers to select foods other than those that are offered by our restaurants. We may not be able to adequately predict these changes and adapt our menu offerings to keep pace with developments in current consumer preferences, which may result in reductions to the revenues generated by our Company-owned restaurants and the payments we receive from franchisees.

Regardless of the source or cause, any report of food-borne illnessesillnesses, food contamination or other food safety issuesissues, including allergen cross contamination at one of our restaurants or our franchisees’ restaurantsrestaurants, whether accurate or not, could irreparably damage our brand reputations and result in declines in guest traffic and sales at our restaurants. A food safety incident at one of our restaurants or our franchisees’ restaurants may subject us to regulatory actions and litigation, including criminal investigations, and we may be required to incur significant legal costs and other liabilities. Food safety incidents may also occur in our supply chain and be out of our control. Health concerns or outbreaks of disease in a food product could also reduce demand for particular menu offerings. EvenPublic instances of food-borne illness, food tampering or food contaminationcontamination, occurringeven solelyif atour restaurants ofare our competitorsunaffected, could result in negative publicity about the restaurant industry in generalgeneral, cause changes in consumer behavior, including reduced demand for particular menu offerings, and adversely affect our sales or cause us to incur additional costs to implement food safety protocols beyond industry standards. [This includes consumer concerns relating to pervasive chemicals such as phthalates, per- and polyfluoroalkyl substances (“PFAS”), microplastics, and heavy metals in the food supply.] The occurrence of food-borne illnesses or food safety issuesconcerns could also adversely affect the price and availability of affected ingredients, resulting in higher costs and lower margins.

Multi-unit restaurant businesses can be adversely affected by negative publicity resulting from poor customer service, food quality, customer complaints, litigation, illness or health concerns or other issues stemming from one or a limited number of restaurants, regardless of whether such events have a factual basis. In particular, sincebecause weour dependbusiness relies heavily on the Chili’s brand for a majority of our revenues,Chili’s, unfavorable publicity relating to one or more Chili’s restaurants could have a material adverse effect on the Chili’s brand, and consequently on our business, financial condition and results of operations. The speed at which negative publicity (whether or not accurate) can be disseminated has increased dramatically with the capabilities of social media and the internet. If we are unable to quickly and effectively respond to such reports, we may suffer declines in guest traffic which could materially impact our financial performance.

Additionally,The consumers’use of social media by our guests or team members could increase our costs, lead to litigation or result in negative publicity that could damage our reputation. Consumers’ or team members ability to immediately post opinions on social media platforms to a broad audience of consumers and other interested persons, often without filters or checks on accuracy of the content posted, may be adverse to our interests and may harm our performance, prospects or business, regardless of the information’s accuracy. The usespeed ofat social media vehicles by our guests or employees could increase our costs, lead to litigation or result inwhich negative publicity that(whether or not accurate) can be disseminated has increased drastically due to social media. If we are unable to quickly and effectively respond to any such negative publicity, we may suffer declines in guest traffic or reputational harm which could damagematerially impact our reputation.financial performance.

Delivery providers generally fulfill delivery orders through drivers that are independent contractors. These drivers may make errors, fail to make timely deliveries, damage our food or poorly represent our brands, which may lead to customer disappointment, reputational harm and unmet sales expectations. Our sales may also be adversely impacted if there is a shortage of drivers that are willing and available to make deliveries from our restaurants. If the third-party aggregators that we utilize for delivery cease or curtail their operations, fail to maintain a sufficient a labor force to satisfy demand, materially change fees, access or visibility to our products or give greater priority or promotions on their platforms to our competitors,competitors based on paid placements or otherwise, our business may be negatively impacted.

Failure to recruit, train and retain high-quality restaurant management and team members may result in lower guest satisfaction and lowersatisfaction, sales and profitability.

Our restaurant-level management and team members are largely responsible for the quality of our service.service and guest experience. Our guests may be dissatisfied and our sales may decline if we fail to recruit, train and retain managers and team members that effectively implement our business strategy and provide high quality guest service. There is active competition for quality management personnel and hourly team members.members Wein areour experiencingindustry. andThere mayis continuepotential in limited markets to experience challenges in recruiting and retaining team members in various locations as wethey are experiencing anexperience increasingly tight and competitive labor market.markets. These challenges have and may continue to result in higherincreased labor costs (such as increased overtime to meet demand and increased wages to attract and retain team members), increased turnover and a shortage of adequate management personnel and hourly team members required for operations and for future growth, which cancould lead to lower guest satisfaction and decreased profitability.

Our results can be adversely affected by events, such as adverse weather conditions, natural disasters, climate change, pandemics or other catastrophic events.

Adverse weather conditions, natural disasters, climate change or other catastrophic events, such as terrorist acts, can adversely impact restaurant sales. Natural disasters such as earthquakes, tornadoes, hurricanes, andwildfires, severe adverse weather conditions, which may occur more frequently in the future due to climate changechange, and health pandemics, whether occurring in the United States or abroad, canmay keepnegatively impact our business. These events could adversely affect consumer spending and confidence, prevent customers in the affected area from dining out, adverselyimpact affectour consumerability spendingto fulfill delivery orders, disrupt our supply chain and confidence levels and supply availability andincrease costs, cause damage to or closure of restaurants and result in other lost opportunities for our restaurants. Our receipt of proceeds under any insurance we maintain with respect to some of these risks may be denied or delayed or the proceeds may be insufficient to cover our losses fully. Moreover, we may be unable to obtain or maintain insurance in the amounts and on terms we view as appropriate and favorable for our operations.

The large number of Company-owned restaurants concentrated in Texas,certain Florida and Californiastates makes us susceptible to changes in economic and other trends in those regions.

A high concentration of ourOur Company-owned restaurants are locatedhighly concentrated in Texas, Florida and California comprising 18.9%,19.2%, 11.8% and 9.2%,9.2% of our restaurants, respectively, as of June 25,24, 2025.2026. As a result, we are particularly susceptible to adverse trends and economic conditions in those states, as well as toany laws and regulations in these states that have a direct or indirect impact on our operations. Negative publicity, local economic conditions, new local or state laws or regulations, health epidemics or pandemics, local strikes, energy shortages or extreme fluctuations in energy prices, droughts, earthquakes, hurricanes, fires or other natural disasters in regions where our restaurants are highly concentrated could have a material adverse effect on our business and operations.

ApproximatelyFranchisees own and operate approximately 29.0% of our system-wide restaurants are owned and operated by our franchisees.restaurants. Our franchise relatedfranchise-related revenue is not material to our total revenues; however, franchise agreements are designed to require our franchisees to maintain brand consistencyconsistency. andNevertheless, the franchise relationship reduces our direct day-to-day oversight of these restaurants and may expose us to risks we would not otherwise encounteredencounter if we maintained ownership and control. Our international restaurants are substantially all franchised and our ability to grow internationally is largely dependent on the success of our franchise partners in developing and maintaining new restaurants.

Our reputation and financial results may be negatively impacted by: franchisee defaults in their obligations to us; limitations on our ability to enforce franchise obligations due to bankruptcy proceedings or differences in legal remedies in international markets; franchisee failures to participate in business strategy changes due to financial constraints; franchisee failures to meet obligations to pay employees; and franchisee failures to comply with food quality and preparationpreparation, requirements.employment, and other federal, state, local, or foreign laws, rules and regulations.

We outsource certain business processes to third-party vendorsvendors, that subjectsubjecting us to risks, including disruptions in business and increased costs.

Some business processes are or may in the future be outsourced to third parties. Such processes include certain information technology processes, gift card tracking and authorization, credit card authorization and processing, insurance claims processing, certain payroll processing, tax filings and other accounting processes. We also continue to evaluate our other business processes to determine if additional outsourcing is a viable option to accomplish our goals. We make a diligent effort to ensure that all providers of outsourced services are observing proper internal control practices, such as redundant processing facilities and adequate security frameworks to guard against breaches or data loss; however, there are no guarantees that failures will not occur. Failure of third parties to provide adequate services or safeguard our data could have an adverse effect on our results of operations, financial condition or ability to accomplish our financial and management reporting.

Companies across all industries are facing stakeholder scrutiny relating to their sustainability practices. Changing consumer preferences or new regulations may result in increased demandsdemand for additional reporting regarding our products and supply chain and their respective environmental and social impact, including on sustainability.our sustainability practices. These demands could require additional transparency, due diligence, and reporting and could cause us to incur additional costs or require us to make changes to our operations to comply with such demands. We may also determine that certain changes to our business are required in anticipation of further evolution of consumer preferences and demands. Increased focus and activism related to corporate responsibility and sustainability may also result in investors reconsidering their investment decisions as a result of their or a third party’s assessment of a company’s sustainability practices. Further, concern over climate change and other environmental sustainability matters has and may in the future result in new or increased legal and regulatory requirements to reduce or mitigate impactsour toimpact on the environment, including greenhouse gas emissions regulations,regulations or disclosure requirements, alternative energy policies, and sustainability initiatives. At the same time, other stakeholders and regulators have increasingly expressed or pursued opposing views, legislation and investment expectations with respect to sustainability initiatives, including the enactment or proposal of "Anti-ESGanti-ESG" legislation orand policies, which may partially or wholly conflict with other stakeholder expectations or existing or future legislation, regulations or policies applicable to us. If we fail to achieve any goals, targets, or objectives we may set with respect to corporate responsibility matters, if we do not meet or comply with new regulations or evolving consumer, investor, industry, or stakeholder expectations and standards (which are not uniform), including those related to reporting, or if we are perceived to have not responded appropriately to the growing concern for sustainability matters, we may face legal or regulatory actions, the imposition of fines, penalties, or other sanctions, adverse publicity, decreased demand from consumers, or a decline in the price of our common shares, any of which could materially harm our reputation or have a material adverse effect on our business, financial condition, or operating results.

The restaurant business is highly competitive as to price, service, restaurant location, convenience, and type and quality of food. We compete within each market with locally-owned restaurants as well as national and regional restaurant chains. The casual dining segment of the restaurant industry has not seen significant growth in customer traffic in recent years. If these trends continue, our ability to grow customer traffic at our restaurants (including through off-premise) will depend on our ability to increase our market share within the casual dining segment. We also face competition from quick service and fast casual restaurants; the convergence in grocery, deli and restaurant services; and meal kit and food delivery providers. We compete primarily on the quality, variety and value perception of our menu items, as well as the quality and efficiency of service, the attractiveness of our facilities and the effectiveness of our advertising and marketing programs. A key component of our corporate strategy involves our brand value platform as it relates to our competition;competition, and any failure to maintain the customer perception of our brand value could negatively impact our sales. If we are unable to compete effectively, our gross sales, guest traffic and profitability may decline.

Our ability to reach consumers and drive results is heavily influenced by brand marketing and advertising and our ability to adapt to evolving consumer preferences. We rely on identifying trends and using data analytics to create successful advertising programs, including customer relationship management, social media, television and other digital marketing efforts. Increased advertising costs in advertising may limit the amount of coverage we are able to achieve with any given campaign. Our marketing and advertising programs may be negatively perceived or may not be as successful as intended, and thus, may adversely affect our reputation, business, our growth prospects and the strength of our brand. A failure to sufficiently innovate, develop guest relationship initiatives, or maintain adequate and effective advertising could inhibit our ability to maintain brand relevance or awareness and drive increased sales.

As part of our marketing strategy, weWe utilize social media platforms to promote our concepts and attract, engage and retain guests. Our strategy may not be successful,successful due to a variety of factors, including any changes in social media platforms, the loss or suspension of company accounts, government restrictions or changes in ownership of social media platforms, an increase in AI-generated or false content, and others resulting in expenses incurred without improvement in guest traffic or brand relevance. In addition, a variety of risks are associated with the use of social media, including negative comments about us, exposure of personally identifiable information, fraud, dissemination of false information, and copyright and trademark risks. The inappropriate use of social media vehicles by our guests or employees could increase our costs, lead to litigation or result in negative publicity that could damage our reputation and adversely affect our results of operations.

Global and domestic economic and geopolitical conditions may negatively impact consumer discretionary spending and our business operations and could have a material negative effect on our financial performance.

The restaurant industry is dependent upon consumer discretionary spending, which is negatively affected by global and domestic economic and geopolitical conditions, such as: fluctuations in disposable income and changes in consumer confidence, the price of gasoline, slow or negative growth, unemployment, credit conditions and availability, volatility in financial markets, inflationary pressures, weakness in the housing market, tariffs and trade barriers, wars or conflictconflict, insupply certainchain regions,disruptions pandemics or public health concerns, and changes in government and central bank monetary policies. When economic conditions negatively affect consumer spending, discretionary spending for restaurant visits will be challenged, our guest traffic may deteriorate and the average amount guests spend in our restaurants may be reduced. This will negatively impact our revenues and also result in lower royalties collected, spreading fixed costs across a lower level of sales, and in turn, causecausing downward pressure on our profitability. This could result in further reductions in staff levels, asset impairment charges and potential restaurant closures.

We have in the past experienced, and are currently experiencing, the impacts of economic conditions, including inflation and fluctuations in utility and energy costs. Inflation has caused added food, labor and benefits costs and increased our operating expenses. Fluctuations and increases in utility and energy costs on our business have also increased our operating expenses at regional and national levels,levels. includingWe throughhave experienced suppliers increasing commodity prices due to higher prices for petroleum-based fuels,fuels andwhich as a result, puttingincreases pressure on our margins. As operating expenses rise, we, to the extent permitted by competition, may recover costs by raising menu prices, or by implementing alternative products, processes or cost reduction procedures. Changes in U.S. or global trade policy, such as new or increased tariffs on certain food products or other imported goods could furthercontinue to elevate costs, disrupt supply availability, and constrain our ability to protect operating margins through pricing strategies or adjustments in purchasing practices. We cannot ensure we will be able to continue to recover some of the increases in operating expenses due to economic conditions, including inflation, in this manner.

Possible shortages or interruptions in the supply of food items and other products to our restaurants caused by inclement weather; natural disasters such as floods, droughtsdroughts, wildfires and hurricanes; health epidemics or pandemics; shortages in the availability of truck drivers; the inability of our suppliers to obtain credit in a tight credit market; trade barriers; food safety warnings or advisories or the prospect of such pronouncements; animal disease outbreaks; or other conditions beyond our control could adversely affect the availability, quality and cost of items we buy and the operations of our restaurants. Our inability to effectively manage supply chain risk could increase our costs or reduce revenues and limit the availability of products critical to our restaurant operations.

We are exposed to risks related to cybersecurity and protection of confidential information, and failure to protect the integrity and security of the payment cardcards or individually identifiable information of our guests and teammates or confidential and proprietary information of the Company could damage our reputation and expose us to loss of revenues, increased costs and litigation.

Our technology systems contain personal, financial and other information that is entrusted to us by our guests and team members, as well as financial, proprietary and other confidential information related to our business. In addition, a significant portion of our restaurant sales are by credit or debit cards. If our technology systems, or those of third-party services providers we rely upon, are compromised as a result of a cyber-attack (including whether from circumvention of security systems, denial-of-service attacks, hacking, use of artificial intelligence, “phishing” attacks, computer viruses, ransomware, malware, or social engineering) or other external or internal methods, it could result in an adverse and material impact on our reputation, operations, and financial condition. The cyber risks we face range from cyber-attacks common to most industries, to attacks that target us due to the confidential consumer information we obtain through our electronic processing of credit and debit card transactions. The rapid evolution and increased adoption of artificial intelligence technologies may also heighten our cybersecurity risks by making cyber-attacks more difficult to detect, contain, and mitigate. Such security breaches could also result in litigation or governmental investigation against us, as well as the imposition of penalties. These impacts could also occur if we are perceived either to have had an attack or to have failed to properly respond to an incident.

As privacy and information security laws and regulations change, or cyber risks evolve pertaining to data,data and artificial intelligence, we may incur significant additional costs in technology, third-party services and personnel to maintain systems designed to anticipate and prevent cyber-attacks. As with many public companies, our defenses are under attack regularly. There have been, and will continue to be, minor intrusions from time-to-time. We regularly implement and monitor preventative measures to reduce cyber risks. However, we cannot provide assurance that our security frameworks and measures will be successful in preventing future significant cyber-attacks or data loss.

These ratings and our current credit condition affect, among other things, our ability to access new capital. Negative changes to these ratings may result in more stringent covenants and higher interest rates under the terms of any new debt agreement. Our credit ratings could be further lowered, or rating agencies could issue adverse commentaries in the future, which could have a material adverse effect on our business, financial condition, results of operations and liquidity. In particular, a weakening of our financial condition, including any further increase in our leverage or decrease in our profitability or cash flows, could adversely affect our ability to obtain necessary funds, could result in a credit rating downgrade or change in outlook, or could otherwise increase our cost of borrowing.

We perform our annual goodwill impairment tests in the second quarter of each fiscal year. Interim goodwill impairment tests are also required when events or circumstances change between annual tests that would more likely than not reduce the fair value of our reporting units below their carrying value. We performed our annual goodwill impairment test in the second quarter of fiscal 2025 and no indicators of impairment were identified. Additionally, no indicators of impairment were identified through the end of fiscal 2025. This assessment is predicated on our ability to continue to operate dining and banquet rooms and generate off-premise sales at our restaurants. We will continue to monitor and evaluate our results and evaluate the likelihood of any potential impairment charges at our reporting units.

In connection with our impairment analysis for long-lived assets, we may make certain estimates and projections with respect to individual restaurant future cash flows as well as overall performance. If actual results differ significantly from our estimates and projections, this could result in future impairments that, could adversely impact our results. In fiscal 2025, we recognized $4.6 million of long-lived asset and liquor license impairment charges Refer to Note 1 - Nature of Operations and Summary of Significant Accounting Policies within Part II, Item 8 - Financial Statements and Supplementary Data, Notes to Consolidated Financial Statements for more information.

Our business and operationoperations could be negatively affected if we become subject to any securities litigation or shareholder activism, which could cause us to incur significant expenses, hinder execution of investment strategy and impact our stock price.

In the past, followingFollowing periods of volatility in the market price of a company’s securities, it is not uncommon for securities class action litigation hasto often beenbe brought against thata company. Publicly traded companies also may become the target of shareholder activism, which could take many forms or arise in a variety of situations.activism. Due to the potential volatility of our stock price andor for a variety of other reasons, we may become the target of securities litigation or shareholder activism. Securities litigation and shareholder activism, including potential proxy contests, vote-no campaigns, or other efforts by activists, could result in substantial costs and legal fees and divert management’s and our Board of Directors’ attention and resources from our business. Additionally, such securities litigation and shareholder activism could give rise to perceived uncertainties as toabout our future, adversely affect our relationships with service providers and make it more difficult to attract and retain qualified personnel. Further, our stock price could be subject to significant fluctuation or otherwise be adversely affected by the events, risks and uncertainties of any securities litigation and shareholder activism.

We are subject to various federal, state and local employment and labor laws and regulations that govern employment and labor matters, including, employment discrimination, minimum wages,wage, work scheduling, overtime, tip credits, tax reporting, working conditions, safety standards, employment of minors, family leave and immigration status. Compliance with these laws and regulations can be costly, and a failure or perceived failure to comply with these laws could result in negative publicity or litigation. We have been and periodically are under investigation for compliance periodically,compliance, and we have been and will be fined for alleged violations of these regulations.regulations in the past.

Some states and localities have, and many others are contemplating, increases to their minimum wage and tip credit wage,wage including annual adjustments tied to changes in the applicable Consumer Price Index (CPI), and such increases can have a significant impact on our labor costs. For example, inseveral Septemberstates 2023,such Californiaas California, have passed legislationlaws settingrequiring employers to pay tipped employees the full minimum wage forregardless fastof foodhow restaurantmuch employeesthey atearn $20in per hour effective April 1, 2024 and establishing a council to set future wage increases and to make recommendations to state agencies for other sector-wide workplace standards.tips. In addition, new employment or labor laws may mandate additional benefits for employees or impose additional obligations that may adversely impact the costs of labor, the availability of labor and our business operations. In addition, our suppliers may be affected by higher minimum wage standards or availability of labor, which may increase the price of goods and services they supply to us. There are no assurances that a combination of cost management and price increases can offset costs associated with compliance.

We are also subject to federal and state environmental regulations, and although these have not had a material negative effect on our operations, we cannot ensure this will not occur in the future. For example, regulations by the United States and other foreign governments focused on environmental matters such as climate change, greenhouse gases and water conservation could result in increased disclosure requirements or taxation or in future restrictions on or increases in costs associated with food and other restaurant supplies, transportation costs and utility costs, any of which could decrease our operating profits and/or necessitate future investments in our restaurant facilities and equipment to achieve compliance.

Other risk factors that could cause our actual results to differ materially from those indicated in forward-looking statements, include, without limitation, changes in financial and credit markets (including rising interest rates); increased fuel costs and availability for our team members, customers and suppliers; increased health care costs; health epidemics or pandemics or the prospects of these events; changes in consumer behaviors; changes in demographic trends; labor shortages and availability of employees; union organization; strikes; wars or conflicts in certain regions; terrorist acts; energy shortages and rolling blackouts; weather and climate change (including, major hurricanes and regional winter storms); inadequate insurance coverage; and limitations imposed by our credit agreements.

The following MD&A includes a discussion comparing our results in fiscal 20252026 to fiscal 2024.2025. For a discussion comparing our results from fiscal 20242025 to fiscal 2023,2024, refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the fiscal year ended June 26,25, 2024,2025, filed with the SEC on August 21,15, 2024.2025.

The Company is principally engaged in the ownership, operation, development, and franchising of the Chili’s® Grill & Bar (“Chili’s”) and Maggiano’s Little Italy® (“Maggiano’s”) restaurant brands. Our two restaurant brands, Chili’s and Maggiano’s, are both operating segments and reporting units.segments. Refer to Part I, Item 1 - Business of this document for additional information about our business and operational strategies.

DuringGeopolitical the recent years, our operating results were impacted by geopoliticaltensions and otherbroader macroeconomic events, leading to higher than usual inflation on wages and food and beverage costs. Geopolitical and other macroeconomic eventspressures have led, and in the future may leadlead, to,to wage inflation, staffing challenges, product cost inflation (inclusive of tariffs), and/or disruptions in the supply chain thatdisruptions. We may also experience supply chain disruptions resulting from adverse weather conditions, climate change, or other catastrophic events beyond our control. These events may impact our restaurants’ ability to obtain the products needed to support theirour operation.operation Such events could alsoand/or negatively affect consumer spending potentially reducing guest traffic and/or reducing the average amount guests spend in our restaurants.

•Company sales include revenues generated by the operation of Company-owned restaurants including food and beverage sales, net of discounts, Maggiano’s banquet service charge income, delivery, gift card breakage, digital entertainment revenues, merchandise incomeincome, Maggiano’s banquet service charge income, and are net of gift card discount costs from third-party gift card sales.

•Food and beverage costs were flat,unfavorable 0.6%, due to 1.5% of favorable menu pricing, offset by 1.1% of unfavorable menu item mix and 0.4%0.9% of unfavorable commodity costs driven by poultry, meat, produce,meat and dairy.seafood and 0.8% of unfavorable menu item mix, partially offset by 1.1% of favorable menu pricing.

•Restaurant labor was favorable 1.4%,0.7%, due to 4.0%1.4% of sales leverage and 0.2% of lower othermanager labor expenses,bonus, partially offset by 2.1%0.4% of higher hourly laborlabor, driven by increased staffing levels and wage rates, 0.4%0.3% of higher manager salaries, and 0.3%0.2% of higher managerhealth bonus.insurance.

•Restaurant expenses were favorable 2.8%,0.2%, due to 3.8%1.3% of sales leverage and 0.1% of lower other restaurant expenses,leverage, partially offset by 0.5%0.3% of higher advertising, 0.2% of higher delivery fees and to-go supplies, 0.2% of higher rent, 0.1% of higher repairs and maintenance, 0.4%0.1% of higher advertising,workers' compensation and general liability insurance, and 0.2% of higher rent.other restaurant expenses.

(21)Other includesdecreased primarily due to accelerated depreciation of certain equipment overin the remainingprior expected useful lifeyear as a result of management’s decision to abandon and replace thecertain equipment.

Other (gains) and charges consisted of the following (for further details refer to Note 13 - Other Gains and Charges within Part II, Item 8 - Financial Statements and Supplementary Data):

Interest expenses decreased $11.9$12.6 million primarily due to lower average outstanding debt balances, partially offset by higher interest on financed leased equipment.balances.

The change in the effective income tax rate from fiscal 20242025 to fiscal 20252026 is primarily due to higher Income before income taxes and the resulting deleverage of the FICA tipexcess tax credit.benefits from stock based compensation. Refer to Note 9 - Income Taxes within Part II, Item 8 - Financial Statements and Supplementary Data for more information.

H.R. 1., also known as the One Big Beautiful Bill Act (“OBBBA”), was enacted on July 4, 2025. The legislation includesincluded several provisions that may impact the timing and magnitude of certain tax deductions.deductions, Keyincluding provisionsrestoring include100% bonus depreciation for qualifying property. The Company has evaluated the permanent extension of several business tax benefits originally introduced under the 2017 Tax Cuts and Jobs Act. We are currently evaluating the provisionsimpacts of the OBBBAOBBBA, toand assessthe theireffects potentialof impactthese onprovisions ourhave been incorporated into the accompanying financial position, results of operations and cash flows.statements.

Chili’s Total revenues increased 24.6%9.6% primarily due to favorable comparable restaurant sales driven by menu pricing, higher traffic, and favorable menu item mix, and menu pricing.mix. Refer to the “Revenues” section above for further details about Chili’s revenues changes.

•Chili’s Food and beverage costs were flat,unfavorable 0.4%, due to 1.5% of favorable menu pricing, offset by 1.1% of unfavorable menu item mix, and 0.4%0.9% of unfavorable commodity costs driven by higher poultry, meat, produce,meat and dairy.seafood and 0.6% of unfavorable menu item mix, partially offset by 1.1% of favorable menu pricing.

•Chili’s Restaurant labor was favorable 1.5%,0.9%, due to 4.5%1.7% of sales leverage, 0.2% of lower manager bonus, and 0.1% of lower other labor expenses, partially offset by 2.3%0.5% of higher hourly labor driven by increased staffing levels and wage rates andlabor, 0.4% of higher manager salariessalaries, and 0.3%0.2% of higher managerhealth bonus.insurance.

•Chili’s Restaurant expenses were favorable 3.1%,0.4%, due to 4.2%1.7% of sales leverage, partially offset by 0.5%0.3% of higher advertising, 0.3% of higher delivery fees and to-go supplies, 0.2% of higher rent, 0.1% of higher repairs and maintenance, 0.4%0.1% of higher advertising,workers' compensation and 0.2%general liability insurance, and 0.3% of higher rent.other restaurant expenses.

(21)Other includesdecreased primarily due to accelerated depreciation of certain equipment overin the remainingprior expected useful lifeyear as a result of management’s decision to abandon and replace thecertain equipment.

Chili’s Other (gains) and charges consisted of the following (for further details, refer to Note 13 - Other Gains and Charges within Part II, Item 8 - Financial Statements and Supplementary Data):

Maggiano’s Total revenues increaseddecreased 1.1%9.3% primarily due to favorableunfavorable comparable restaurant sales and unfavorable impact of restaurant closures, including one closure due to relocation. Unfavorable comparable restaurant sales was driven by increasedlower traffic partially offset by menu pricing and favorable menu item mix, partially offset by lower traffic.mix. Refer to the “Revenues” section above for further details about Maggiano’s revenues changes.

•Maggiano’s Food and beverage costs were favorableunfavorable 0.1%,1.6%, due to 1.3%1.4% of favorableunfavorable menu pricingitem partiallymix offsetand by 0.8%1.2% of unfavorable commodity costs driven by dairymeat and poultryseafood, andpartially 0.4%offset by 1.0% of unfavorablefavorable menu item mix.pricing.

•Maggiano’s Restaurant labor was favorableunfavorable 0.8%,1.5%, due to 0.5%1.7% of lowersales hourly labor, 0.4% of lower manager bonus,deleverage, 0.2% of saleshigher leverage,health insurance, and 0.1%0.3% of lowerhigher other labor expenses, partially offset by 0.4%0.5% of higherlower hourly labor and 0.2% of lower manager salaries.bonus.

•Maggiano’s Restaurant expenses were unfavorable 0.9%,3.1%, due to 2.0% of sales deleverage, 0.5% of higher delivery fees and to-go supplies, 0.3% of higher advertising, 0.3% higher pre-opening, 0.2% of higher repairs and maintenance, 0.3% higher rent, and 0.1% of higher otherworkers' restaurantcompensation expenses,and general liability insurance, partially offset by 0.3% of saleslower leverage.other restaurant expenses.

Proceeds from the sale of gift cards are recorded as deferred revenues and recognized as revenues when the gift cards are redeemed by the holders. Breakage income represents the value associated with the portion of gift cards sold that will most likely never be redeemed and is estimated based on our historical gift card redemption patterns and actuarial estimates. Breakage revenues are recognized proportionate to the pattern of related gift card redemptions. We recognize breakage income in Company sales in the Consolidated Statements of Comprehensive Income. We update our breakage rate estimate periodically and, if necessary, adjust the deferred revenues balance accordingly. If actual redemption patterns vary from our estimate, actual gift card breakage income may differ from the amounts recorded.

We reviewevaluate thelong-lived carryingassets, amountsuch ofas property, equipmentequipment, and lease assets onfor animpairment, annual basis or more often ifwhenever events or circumstances indicate that the carrying amount of a restaurant may not be recoverable. TheFor impairmentpurposes testof this evaluation, we define the asset group at the individual restaurant level. When we evaluate the restaurants, cash flows are the primary indicator of impairment. Recoverability of assets to be held and used is ameasured two-step process. Step one includesby comparing the operating cash flows of each restaurant (asset group) over its remaining service life to the carrying value of the asset group. If the cash flows exceed the carrying value, then the asset group is not impaired, and no further evaluation is required. If the carrying value of the asset group exceeds its cash flows, impairment may exist and performing step two is necessary to determine the impairment loss.exist. If the carrying amount is not recoverable, we record an impairment charge for the excess of the carrying amount over the fair value of the asset group. We determine fair value based on discounted projected future operating cash flows of each restaurant over its remaining service life using a risk adjusted discount rate. This process requires the use of estimates and assumptions, which are subject to a high degree of judgment.

Net cash provided by operating activities increased due to an increase in operating income and a decrease in interest paid, partially offset by an increase in payments of incomeperformance-based taxescompensation and the timing of other operational receipts and payments.

Net cash used in investing activities increaseddecreased primarily due to newdecreased spend on restaurant and IT equipment purchasesand andcapital maintenance, partially offset by increased spend on both Chili’s capitaland maintenance.Maggiano’s re-images.

Net cash used in financing activities increased slightly due to an increase in share repurchase activity in fiscal 2026 and a decrease in proceeds received from stock option exercises, partially offset by a decrease in net repayments of long-term debt primarily due to the payoff of theour $350.0 million 5.00% notes and an increase in share repurchases in fiscal 2025 compared to net repayment activity on the revolvingprior credit facility of $161.3 million in fiscal 2024.year.

The $1.0 billion revolving credit facility, as amended,facility matures on May 1, 2030 and bears interest at a rate of SOFR plus an applicable margin of 1.25% to 2.00% and an undrawn commitment fee of 0.20% to 0.30%, both based on a function of our debt-to-cash-flow ratio. As of June 25,24, 2025,2026, our interest rate was 5.82%4.90% consisting of SOFR of 4.32%3.65% plus the applicable margin and spread adjustment of 1.50%.1.25%. As of June 25,24, 2025, there were no amounts outstanding under2026, the revolving credit facility.facility had $969.9 million available, net of a $30.1 million letter of credit, pledged as collateral on insurance policies.

As of June 25,24, 2025,2026, we were in compliance with our covenants pursuant to the $1.0 billion revolving credit facility and under the terms of the indentures governing our 8.25% notes.facility. Refer to Note 7 - Debt within Part II, Item 8 - Financial Statements and Supplementary Data for further information about our notes and revolving credit facility.

Our Board of Directors approved a $300.0 million share repurchase program in August 2021. Our share repurchase program is used to return capital to shareholders and to minimize the dilutivedilution impactto ofour stockshares optionsoutstanding andthat otherresults share-basedfrom awards.equity compensation grants. We evaluate potential share repurchases under our plan based on several factors, including our cash position, share price, operational liquidity, proceeds from divestitures, borrowings and planned investment and financing needs. As part of our share repurchase program, we repurchased 1.0 million shares of our common stock for $76.0 million in fiscal 2025 and 0.7 million shares of our common stock for $21.0 million in fiscal 2024. As of June 25, 2025, we had $107.0 million of authorized repurchases remaining under the share repurchase program.

SubsequentDuring tothe first quarter of fiscal 2025 year end,2026, our Board of Directors authorized an additional $400.0 million under our existing share repurchase program,program. allowingUtilizing the increased availability, the Company repurchased 2.9 million shares of our common stock for a$400.0 totalmillion availableduring authorityfiscal 2026. As of $507.0June million.24, 2026, we had $107.0 million of authorized repurchases remaining under the share repurchase program.

BasedGiven on theour current level of operations, we believe that our currentexisting cash and cash equivalents, coupledtogether with cash generatedflows from operations and availabilityavailable borrowing capacity under our existing revolving credit facilityfacility, will be adequatesufficient to meetfund our capital expenditure and working capital needsrequirements for at least the next twelve months, including the repaymentsettlement of current debt obligations.

Payments due under our long-term contractual obligations for outstandingfinance indebtedness,and operating leases and certain purchase obligations as of June 25,24, 20252026 are as follows:

Off -BalanceOff-Balance Sheet Arrangements

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is intended to help you understand our Company, our operations and our current operating environment. For an understanding of the significant factors that influenced our performance during the thirteen and twenty-sixthirty-nine week periods ended DecemberMarch 24,25, 20252026 and DecemberMarch 25,26, 2024.2025. The MD&A should be read in conjunction with the Consolidated Financial Statements (Unaudited) and related Notes to Consolidated Financial Statements (Unaudited) included in this quarterly report. All amounts within the MD&A are presented in millions unless otherwise specified.

We own, develop, operate and franchise the Chili’s® Grill & Bar (“Chili’s”) and Maggiano’s Little Italy® (“Maggiano’s”) restaurant brands. As of DecemberMarch 24,25, 2025,2026, we owned, operated or franchised 1,6271,632 restaurants, consisting of 1,1601,162 Company-owned restaurants and 467470 franchised restaurants, located in the United States, 2728 other countries and two United States territories. Our operating segments are Chili’s and Maggiano’s.

Franchise Partnerships - During the twenty-sixthirty-nine week period ended DecemberMarch 24,25, 2025,2026, there were 1020 new franchise restaurant openings and onetwo new development agreement.agreements. We plan to strategically pursue expansion of Chili’s internationally through development agreements with new and existing franchise partners.

Company Development - The following table details the number of restaurant openings during the thirteen and twenty-sixthirty-nine week periods ended DecemberMarch 24,25, 20252026 and DecemberMarch 25,26, 2024,2025, respectively, total full year projected openings in fiscal 2026 and the total restaurants open at each period end:

During the thirteenthirty-nine week period ended DecemberMarch 24,25, 2025,2026, we purchased the land and buildings for onetwo restaurantrestaurants that waswere previously leased. As of DecemberMarch 24,25, 2025,2026, we own property for 5556 of the 1,1601,162 Company-owned restaurants and one closed restaurant. The net book values associated with these restaurants included land of $45.2$46.0 million and buildings of $19.6$24.5 million.

Thirteen and Twenty-SixThirty-Nine Week Periods Ended DecemberMarch 24,25, 20252026 compared to DecemberMarch 25,26, 20242025

(2)Franchise revenues increased in the thirteen and twenty-sixthirty-nine week periods ended DecemberMarch 24,25, 20252026 compared to DecemberMarch 25,26, 20242025 primarily because of higher royalties. The table below presents sales from our franchisees:

The table below presents the percentage change in comparable restaurant sales and restaurant capacity for the thirteen and twenty-sixthirty-nine week periods ended DecemberMarch 24,25, 20252026 compared to DecemberMarch 25,26, 20242025:

Thirteen Week Period Ended DecemberMarch 24,25, 20252026 compared to DecemberMarch 25,26, 20242025

•Food and beverage costs were unfavorable 0.2%,0.6%, due to 1.2% of unfavorable menu item mix and 0.2%1.3% of unfavorable commodity costs primarily driven by higher meatmeat, seafood, and seafood,poultry and 0.5% of unfavorable menu item mix, partially offset by lower poultry and 1.2% from favorable menu pricing.

•Restaurant labor was favorable 0.3%,0.6%, due to 1.3%0.5% of sales leverageleverage, 0.4% of lower hourly labor, 0.2% of lower manager bonus, and 0.1% of lower other labor expenses, partially offset by 0.6%0.4% of higher hourlymanager labor driven by increased staffing levels and wage rates, 0.3% of higher health insurance,salaries and 0.2% of higher managerhealth salaries.insurance.

•Restaurant expenses were unfavorable 0.4%,0.5%, due to 0.6% of higher advertising, 0.4%0.3% of higher repairs and maintenance, 0.4%0.3% of higher delivery fees and to-go supplies, 0.2% of higher workers' compensationrent, and general liability insurance, and 0.1% of0.2% higher rent,other restaurant expenses, partially offset by 1.1%0.5% of sales leverage and 0.2% lower other restaurant expenses.leverage.

Twenty-SixThirty-Nine Week Period Ended DecemberMarch 24,25, 20252026 compared to DecemberMarch 25,26, 20242025

•Restaurant labor was favorable 0.7%, due to 2.2%1.5% of sales leverageleverage, 0.1% of lower manager bonus, and 0.1%0.2% of lower other labor expenses, partially offset by 1.1%0.5% of higher hourly laborlabor, driven by increased staffing levels and wage rates, 0.3%0.4% of higher manager salaries, and 0.2% of higher health insurance.

•Restaurant expenses were favorable 0.7%,0.2%, due to 2.0%1.5% of sales leverage and 0.1% of lower other restaurant expenses,leverage, partially offset by 0.5%0.3% of higher advertising, 0.5%0.2% of higher delivery fees and to-go supplies, 0.2% of higher repairs and maintenance, 0.2% of higher rent, 0.1% of higher workers' compensation and general liability insurance, and 0.2%0.3% of higher rent.other restaurant expenses.

The federal statutory tax rate was 21.0% for the thirteen and twenty-sixthirty-nine week periods ended DecemberMarch 24,25, 20252026 and DecemberMarch 25,26, 2024.2025.

The change in the effective income tax rate in the thirteen week period ended DecemberMarch 24,25, 20252026 to the thirteen week period ended DecemberMarch 25,26, 20242025 is primarily due to higher Income before income taxes and resulting deleverage of the FICA tip tax credit. The change in the effective income tax rate in the twenty-sixthirty-nine week period ended DecemberMarch 24,25, 20252026 to the twenty-sixthirty-nine week period ended DecemberMarch 25,26, 20242025 is primarily due to significantly higher excess tax benefits from stock based compensation of $11.9$12.4 million in fiscal 2026, partially offset by higher Income before income taxes and resulting deleverage of the FICA tip tax credit.

H.R. 1., also known as the One Big Beautiful Bill Act (OBBBA), was enacted on July 4, 2025. The legislation included several provisions that impact the timing and magnitude of certain tax deductions, including restoring 100% bonus depreciation for qualifying property. We have applied the key provisions impacting our financial position for the thirteen and twenty-sixthirty-nine week periods ended DecemberMarch 24,25, 2025,2026, and will continue to assess the potential impacts on our financial position, results of operations and cash flows as additional guidance from the OBBBA is issued.

Thirteen Week Period Ended DecemberMarch 24,25, 20252026 compared to DecemberMarch 25,26, 20242025

Chili’s Total revenues increased by 9.0%4.5% primarily due to favorable comparable restaurant sales driven by menu pricing, higherpartially traffic,offset andby favorablelower menu item mix.traffic. Refer to “Revenues” section above for further details about Chili’s revenues changes.

•Chili’s Food and beverage costs were favorableunfavorable 0.1%,0.6%, due to 1.2% from favorable menu pricing, partially offset by 0.9% of unfavorable menu item mix and 0.2%1.4% of unfavorable commodity costs primarily driven by meatmeat, seafood, and seafood,poultry and 0.4% of unfavorable menu item mix, partially offset by lower1.2% poultry.from favorable menu pricing.

•Chili’s Restaurant labor was favorable 0.4%,0.8%, due to 1.6%0.8% of sales leverage, 0.3% of lower hourly labor, and 0.3% of lower other labor expenses, partially offset by 0.6% of higher hourly labor driven by increased staffing levels and wage rates, 0.3%0.4% of higher manager salaries,salaries and 0.3%0.2% of higher health insurance.

•Chili’s Restaurant expenses were unfavorable 0.1%,0.5%, due to 0.6% of higher advertising, 0.4% of higher repairs and maintenance, 0.3% of higher delivery fees and to-go supplies, and 0.3%0.2% of higher rent, and 0.4% of higher other restaurant expenses, partially offset by 1.5%0.7% of sales leverage.leverage and 0.1% of lower workers' compensation and general liability insurance.

Twenty-SixThirty-Nine Week Period Ended DecemberMarch 24,25, 20252026 compared to DecemberMarch 25,26, 20242025

•Chili’s Food and beverage costs were unfavorable 0.1%,0.3%, due to 0.9% of unfavorable menu item mix and 0.3%0.8% of unfavorable commodity costs primarily driven by higher meat and seafood, 0.6% of unfavorable menu item mix, partially offset by 1.1% from favorable menu pricing.

•Chili’s Restaurant labor was favorable 0.9%, due to 2.6%2.1% of sales leverage,leverage and 0.1% of lower other labor expenses, partially offset by 1.2%0.6% of higher hourly laborlabor, driven by increased staffing levels and wage rates, 0.3%0.5% of higher manager salaries, and 0.2% of higher health insurance.

•Chili’s Restaurant expenses were favorable 1.1%,0.5%, due to 2.5%1.9% of sales leverage, partially offset by 0.5%0.3% of higher advertising, 0.4%0.3% of higher delivery fees and to-go supplies, 0.2% of higher repairs and maintenance, 0.2% of higher rent, 0.1% of higher workers' compensation and general liability insurance, 0.2% of higher rent, and 0.1%0.3% of higher other restaurant expenses.

Thirteen Week Period Ended DecemberMarch 24,25, 20252026 compared to DecemberMarch 25,26, 20242025

Maggiano’s Total revenues decreased 9.7%11.1% primarily due to unfavorable comparable restaurant sales and unfavorable impact of restaurant closuresclosures. and unfavorableUnfavorable comparable restaurant sales were driven by lower traffic partially offset by menu pricing. Refer to “Revenues” section above for further details about Maggiano’s revenues changes.

•Maggiano’s Food and beverage costs were unfavorable 2.6%,1.3%, due to 3.0%1.5% unfavorable menu item mix and 0.7%0.8% of unfavorable commodity costs primarily driven by meatmeat, poultry, and seafood, partially offset by lower dairy and 1.1%1.0% from favorable menu pricing.

•Maggiano’s Restaurant labor was unfavorable 0.9%,0.8%, due to 1.6%2.1% of sales deleverage and 0.3%0.2% of higher health insurance, partially offset by 0.7%0.9% of lower hourly labor and 0.6% of lower manager bonus and 0.3% of lower other labor expenses.bonus.

•Maggiano’s Restaurant expenses were unfavorable 3.2%,2.6%, due to 1.8%2.5% of sales deleverage, 0.7%0.5% of higher delivery fees and to-go supplies, 0.5%partially offset by 0.3% of higherlower workers' compensation and general liability insurance,insurance and 0.3% of higher repairs and maintenance, partially offset by 0.1% of lower other restaurant expenses.

Twenty-SixThirty-Nine Week Period Ended DecemberMarch 24,25, 20252026 compared to DecemberMarch 25,26, 20242025

•Maggiano’s Restaurant labor was unfavorable 1.9%,1.5%, due to 1.7% of sales deleverage, 0.2% of higher health insurance, and 0.4% of higher other labor expenses, partially offset by 0.4%0.5% of lower manager bonus.bonus and 0.3% of lower hourly labor.

•Maggiano’s Restaurant expenses were unfavorable 4.3%,3.8%, due to 1.8%2.0% of sales deleverage, 0.9%0.7% of higher delivery fees and to-go supplies, 0.6%0.5% of higher advertising, 0.5%0.3% of higher workers' compensation and general liability insurance, 0.4%and 0.3% of higher repairs and maintenance, and 0.1% of higher other restaurant expenses.maintenance.

Net cash provided by operating activities increased due to an increase in operating income and a decrease in interest paid, partially offset by an increase in payments of performance-based compensation and the timing of other operational receipts and payments.

Net cash used in investing activities increaseddecreased compared to the prior year primarily due to decreased spend on restaurant and IT equipment and capital maintenance, partially offset by increased spend on Maggiano’s reimages and the construction of new restaurants and spend related to Maggiano’s reimages, partially offset by decreased spend on capital maintenance and equipment.restaurants.

Our $1.0 billion revolving credit facility, as amended, matures on May 1, 2030 and bears interest at a rate of SOFR plus an applicable margin of 1.25% to 2.00% and an undrawn commitment fee of 0.20% to 0.30%, both based on a function of our debt-to-cash-flow ratio. As of DecemberMarch 24,25, 2025,2026, our interest rate was 4.98%4.93% consisting of SOFR of 3.73%3.68% plus the applicable margin of 1.25%. As of March 25, 2026, $969.9 million of credit was available under the revolving credit facility. Availability under the revolving credit facility was reduced by a $30.1 million letter of credit as of March 25, 2026. Refer to Note 7 - Commitments and Contingencies for further information about our letters of credit.

As of DecemberMarch 24,25, 2025,2026, we were in compliance with our covenants pursuant to the $1.0 billion revolving credit facility and under the terms of the indentures governing our 8.25% notes. We expect to remain in compliance with our covenants during the remainder of fiscal 2026.

In the twenty-sixthirty-nine week period ended DecemberMarch 24,25, 2025,2026, we repurchased 1.82.5 million shares of our common stock for $235.0$343.4 million, including 1.52.2 million shares purchased for $192.0$300.0 million as part of our share repurchase program and 0.3 million shares purchased from team members to satisfy tax withholding obligations on the vesting of restricted shares. These withheld shares of common stock are not considered common stock repurchases under our authorized common stock repurchase plan. As of DecemberMarch 24,25, 2025,2026, approximately $315.0$207.0 million of share repurchase authorization remains under the current share repurchase program.