Bloomin' Brands, Inc.
For the period ended Dec 28, 2025. Filed Feb 25, 2026.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2025 · Filed Feb 25, 2026
BLMN$9.75-6.9%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2024-12-29; filed 2025-02-26.
0001546417-25-000034
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2025-12-28; filed 2026-02-25.
0001546417-26-000009
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 170 previous paragraphs and 157 current paragraphs.
50 unchanged; 68 reworded; 35 added; 46 removed; 6 previous and 4 current paragraphs rearranged.
Tables are not compared: 15 previous and 14 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (35)
Current report
Our Turnaround Strategy -In November 2025, we announced a comprehensive turnaround strategy, with a key focus on Outback Steakhouse, to drive long-term sustainable and profitable growth. This strategy is based on four key platforms, including:
Current report
•Deliver a Remarkable Dine-In Experience: focus on operational excellence with center of the plate quality and service enhancements to deliver exceptional guest experience, which will drive in-restaurant traffic growth.
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•Drive Brand Relevancy: expand brand reach to recruit new guests and increase frequency of visits.
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•Reignite a Culture of Ownership and Fun: reinvest in our people and strengthen our Principles & Beliefs-based culture which will drive an enhanced guest experience.
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•Invest in Our Restaurants: refresh our existing asset base to ensure restaurants are updated and reflect brand standards.
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These platforms will be supported by:
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•Non-Guest Facing Productivity Savings: we are focused on cost savings in areas that will not impact the guest, such as indirect spend and contract negotiations.
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•Balanced Capital Allocation: we have a dual approach to invest in the base business and focus on debt paydown. To support the objectives, we suspended the dividend in October 2025. We have slowed down our new unit development to focus on refreshing our existing restaurants. While we still believe there are development opportunities for our concepts in the U.S., we remain focused on driving healthy traffic in our existing restaurants. We expect to use available free cash flow to pay down debt.
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•Strong Management Team: we have the right team in place to lead our brands through our turnaround initiatives, centered on an operational mindset and guest centricity.
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We believe our turnaround strategy, with consistent execution and disciplined investments, will firmly place Outback Steakhouse and more broadly, Bloomin’ Brands, on the right course for sustainable, long-term andprofitable growth.
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Operating Environment - In recent years, geopolitical and economic shifts have impacted our operations, primarily through labor and commodity inflation. These ongoing macroeconomic pressures have led, or in the future may lead to, supply chain impacts and staffing challenges. Furthermore, these external conditions may dampen consumer spending, leading to lower traffic and average check per person.
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(2)Includes restaurant sales from the closure of 86 restaurants since December 31, 2023.
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Less than 1/10th of one percent of Total revenues.
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•General and administrative expense increased primarily due to: (i) lapping 2024 gains and incurring 2025 costs associated with our foreign currency forward contracts and (ii) severance costs. These impacts were partially offset by lower compensation and related expenses.
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•Provision for impaired assets and restaurant closings decreased primarily due to lower impairment and closure charges related to restaurant closures and underperforming restaurants.
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•Goodwill impairment includes charges for the Bonefish Grill reporting unit of $28.2 million during 2025. See Note 9 -Goodwill and Intangible Assets, Net of the Notes to Consolidated Financial Statements for additional details.
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•Interest expense, netdecreased primarily due to $14.4 million of interest income on the final installment related to the Brazil Sale Transaction.
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The Benefit for income taxes in 2025 and 2024 includes the impact of the FICA tax credit, and for 2024, also includes the impact of the nondeductible losses associated with the partial repurchase of the 2025 Notes.
Current report
The decrease in U.S. Income from operations generated during 2025 as compared to 2024 was primarily due to: (i) higher labor, commodity and operating costs, primarily due to inflation, (ii) goodwill impairment related to Bonefish Grill and (iii) unfavorable product cost mix. These decreases were partially offset by: (i) an increase in average check per person, primarily due to menu pricing, (ii) lower advertising expense and (iii) lower General and administrative expense.
Current report
Following is a summary of international franchise segment financial data for the periods indicated:
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(3)Relates to goodwill impairment from the Bonefish Grill reporting unit. See Note 9 -Goodwill and Intangible Assets, Net of the Notes to Consolidated Financial Statements for additional details.
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(4)Includes severance, professional fees and other costs incurred as a result of transformational and restructuring activities.
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(3)The tax effect of non-GAAP adjustments is determined by recomputing the benefit for income taxes on an adjusted basis. The difference between the recomputed benefit for income taxes and the GAAP benefit for income taxes represents the tax effect of non-GAAP adjustments.
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(5)Amounts may not add due to rounding.
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The 2025 Notes matured on May 1, 2025 and were settled in cash for $20.7 million, excluding accrued interest. On May 16, 2025, the Company terminated the remaining warrants in cash for $0.4 million.
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In February 2024, our Board approved a share repurchase authorization of up to $350.0 million of our outstanding common stock as announced in our press release issued on February 23, 2024. The 2024 Share Repurchase Program expired on August 13, 2025.
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Financing activities -Net cash used in financing activities during 2025 was primarily due to: (i) net payments on the revolving credit facility, (ii) payments of cash dividends and (iii) maturity settlement for the 2025 Notes. Net cash used in financing activities during 2024 was primarily due to net draws on the revolving credit facility exceeding the aggregate of cash used to repurchase common stock, pay dividends on our common stock, and net cash received from the partial unwind agreements relating to a portion of the convertible note hedge and warrant transactions that were entered into in connection with the issuance of the 2025 Notes.
Current report
During the second quarter of 2025, we performed our annual impairment testing utilizing a quantitative analysis due to a decline in our stock price and market capitalization (the “Q2 analysis”). No impairment was recorded in relation to the Q2 analysis; however, the Company identified a triggering event during the fourth quarter of 2025 as a result of: (i) a sustained decline in our stock price and market capitalization and (ii) a recent decline in margins specific to the Bonefish Grill reporting unit. As a result, we performed an interim quantitative impairment analysis (the “Q4 analysis”). The Q4 analysis determined that the Bonefish Grill reporting unit was impaired and goodwill impairment of $28.2 million was recorded to fully impair the goodwill of the reporting unit.
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Goodwill Analysis -The Q2 analysis for goodwill indicated that all reporting units had fair values that exceeded their carrying values. However, the Outback Steakhouse and Bonefish Grill reporting units had fair values that decreased to approximately 10% above their respective carrying values (“cushion”) while the other reporting units had cushions that were above 20%. The fair values for the Outback Steakhouse and Bonefish Grill reporting units decreased primarily due to lower cash flow estimates, increased discount rates, lower market multiples and additionally for Bonefish Grill, a lower long-term growth rate. The discount rates for Outback Steakhouse and Bonefish Grill included an adjustment to the risk premium to reflect the elevated risk in management’s forecasted cash flows.
Current report
The Q4 analysis for goodwill indicated that all reporting units except Bonefish Grill had fair values that exceeded their carrying values. Additionally, the cushion for the Outback Steakhouse reporting unit decreased to approximately 3%. The cushions for all other reporting units remained above 20%. The fair value for the Outback Steakhouse reporting unit decreased compared to the Q2 analysis primarily due to lower market multiples and lower cash flow estimates. The fair value for the Bonefish Grill reporting unit decreased from the Q2 analysis primarily due to lower market multiples and lower cash flow estimates as a result of a recent decline in profit margins. Similar to the annual analysis, the discount rates for Outback Steakhouse and Bonefish Grill include an adjustment to the risk premium to reflect the elevated risk in management’s forecasted cash flows.
Current report
For both analyses, we used a combination of the income and market approaches, weighted 50% each, to determine the fair value of the reporting units. Some of the more significant estimates and assumptions included cash flow estimates (including sales and earnings before interest, taxes, depreciation and amortization), long-term growth rates, discount rates that appropriately reflect the risks inherent in cash flow estimates, and market multiples. These estimates are subjective, and our ability to achieve the forecasted cash flows used in our fair value calculations is affected by factors such as the success of strategic initiatives, changes in economic conditions, changes in our operating performance and changes in our business strategies.
Current report
In addition, for both the Q2 analysis and Q4 analysis, we considered the reasonableness of the fair value of the reporting units by assessing the implied enterprise value control premiums based on our market capitalization. We determined that the implied control premium was reasonable, which corroborates our fair value estimates for the reporting units.
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As a result of the decreased fair values, the goodwill associated with the Outback Steakhouse reporting unit is at a higher risk of future impairment if any assumptions, estimates, or market factors change in the future.
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Assumptions used in the goodwill quantitative approach are made at a point in time and require significant judgment. They are subject to change based on facts and circumstances present at the impairment test date. However, it is reasonably possible that changes in assumptions could occur, so we performed a sensitivity analysis on the discount rate and long-term growth rate for our Outback Steakhouse reporting unit. If the discount rate increased by 100 basis points, the fair value of the reporting unit would decrease by 8%, resulting in goodwill impairment of $36.1 million. If the long-term growth rate decreased by 50 basis points, the fair value of the Outback Steakhouse reporting unit would decrease by 3%, but the fair value would still exceed the carrying value. These sensitivities were only calculated utilizing the discounted cash flow method and the estimated changes in fair value are not necessarily representative of the actual impairment that would be recorded in the event of a fair value decline.
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Indefinite-Lived Intangible Assets Analysis -The Q2 analysis and Q4 analysis for indefinite-lived intangible assets indicated that all trade names had fair values exceeding their carrying values; however, the Outback Steakhouse trade name’s cushion decreased to approximately 15% and 5%, respectively. In the Q2 analysis, the fair value of the Outback Steakhouse trade name decreased primarily due to lower projected sales and an increased discount rate. The fair value declined further in the Q4 analysis due to lower projected sales and a decrease in the assumed royalty rate.
Removed paragraphs (46)
Previous report
Business Strategies - Our current key business strategies include:
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Simplifying the Agenda. We are focused on our operations, removing menu items and enabling our operators to deliver a great guest experience. Our transaction to re-franchise our Brazil business will allow our management team to focus on improvements in our domestic operations.
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Consistently Deliver Guest-Centric Experience. We are investing in our product quality, technology and operational execution to ensure guests consistently have a great experience when they interact with our brands across both in-restaurant and off-premises channels. We believe this will drive increased frequency.
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Refine Our Marketing Approach. We are refining our menu offerings to offer abundant, every day value, which we believe will resonate with the marketplace. We will continue to offer experiential-driven events with unique items as a way to drive trial to our brands.
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Drive Long-Term Shareholder Value. We plan to drive long-term shareholder value by reinvesting into our base business and addressing the state of our asset base, paying down debt and returning excess cash to shareholders through dividends. We have refined our pipeline to slow new unit growth beginning in 2026. While we still believe there are development opportunities for our concepts in the U.S., we remain focused on driving healthy traffic in our existing restaurants.
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We intend to fund our business strategies, drive revenue growth and margin improvement, in part by reinvesting savings generated by cost savings and productivity initiatives across our businesses.
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Selected Operating Data -The table below presents the number of our restaurants in operation (from both continuing and discontinued operations) as of the periods indicated:
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(1)The restaurant counts for Brazil, including Abbraccio and Aussie Grill restaurants within International Company-owned Other - Brazil, are reported as of November 30, 2024 and 2023, respectively, to correspond with the balance sheet dates of this subsidiary. Following the close of the Brazil Sale Transaction on December 30, 2024, all restaurants in that market operate as unconsolidated franchisees. See Note 3 -Discontinued Operations of the Notes to Consolidated Financial Statements for further details.
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(1)Fiscal year 2023 included restaurant sales from December 25, 2023 through December 31, 2023, which represents the 53rd week.
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(2)Fiscal years 2024 and 2023 include restaurant sales impact from the closure of 73 and 34 restaurants since December 25, 2022 and December 26, 2021, respectively.
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(1)Translated at average exchange rates of 5.29 and 5.02 for 2024 and 2023, respectively. Excludes the benefit of the Brazil value added tax exemptions discussed in Note 3 -Discontinued Operations of the Notes to Consolidated Financial Statements.
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(3)Excludes the effect of fluctuations in foreign currency rates and the benefit of the Brazil value added tax exemptions discussed in Note 3 -Discontinued Operations of the Notes to Consolidated Financial Statements.
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(4)Includes trading day impact from calendar period reporting.
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Food and beverage cost decreased as a percentage of Restaurant sales due to 1.3% from increases in menu pricing and 0.6% from cost-saving and productivity initiatives. These decreases were partially offset by increases as a percentage of Restaurant sales of 0.5% from unfavorable product mix and 0.5% from commodity inflation.
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Provision for impaired assets and restaurant closings increased primarily due to: (i) asset impairments during Q4 2024 related to 41 older, underperforming restaurants (the “Q4 2024 Restaurant Impairment”), and from the closure of (ii) nine restaurants in Hong Kong and (iii) 36 older, predominately underperforming restaurants within the U.S. segment (the “2023 Restaurant Closures”). These increases were partially offset by the Q4 2023 asset impairment and closure charges in connection with the 2023 Restaurant Closures.
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Interest expense, netincreased primarily due to higher balances and interest rates on the unhedged portion of our revolving credit facility partially offset by a decrease in interest expense from the Second 2025 Notes Partial Repurchase.
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The change in (Benefit) provision for income taxes is primarily due to FICA tax credits on certain tipped wages partially offset by the 2024 nondeductible losses associated with the Second 2025 Notes Partial Repurchase, relative to the 2024 pre-tax book loss.
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We have a blended federal and state statutory rate of approximately 26% for all periods presented. The effective income tax rate in 2024 was lower than the blended federal and state statutory rate primarily due to the federal and state impact of nondeductible losses associated with the Second 2025 Notes Partial Repurchase, partially offset by the FICA tax credits on certain tipped wages, relative to the 2024 pre-tax book loss. The effective income tax rate in 2023 was lower than the blended federal and state statutory rate primarily due to the benefit of FICA tax credits on certain tipped wages.
Previous report
Other restaurant operating expense decreased as a percentage of Restaurant sales primarily due to: (i) 0.6% from an increase in average check per person, (ii) 0.4% from the favorable settlement of certain collective action wage and hour lawsuits and (iii) 0.3% from certain cost saving and productivity initiatives. These decreases were partially offset by increases of 0.9% from higher operating expenses, including utilities, primarily due to inflation, and 0.3% from higher advertising expense.
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(Benefit) provision for income taxes includes a decrease in the effective income tax rate primarily due to the non-deductible losses recorded during 2022 associated with the First 2025 Notes Partial Repurchase, which is described in further detail within Note 11 -Convertible Senior Notes of the Notes to Consolidated Financial Statements.
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Income from continuing operations
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U.S.- The decrease in U.S. Income from operations generated during 2024 as compared to 2023 was primarily due to: (i) lower restaurant sales, as discussed above, (ii) higher labor, operating and commodity costs, primarily due to inflation, (iii) higher impairment and closure costs and (iv) higher advertising, depreciation and amortization expense. These decreases were partially offset by an increase in average check per person and the impact of certain cost-saving and produc tivity initiatives.
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(1)Reflects changes in legal reserves in connection with certain collective action wage and hour lawsuits.
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(4)No adjustments for the periods presented. Excludes intercompany royalty expense of $25.9 million and $26.4 million for 2024 and 2023, respectively, since the corresponding intercompany royalty revenue is included within Franchise and other revenues from continuing operations and is therefore already excluded from the calculation of restaurant-level operating income. See Note 3 -Discontinued Operations of the Notes to Consolidated Financial Statements for additional details.
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(2)Fiscal year 2024 includes asset impairment, closure costs and severance primarily in connection with: (i) the 2023 Restaurant Closures, (ii) the closure of nine restaurants in Hong Kong and (iii) the Q4 2024 Restaurant Impairment. Fiscal year 2023 includes asset impairment, closure costs and severance primarily in connection with the 2023 Restaurant Closures.
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(3)Compensation costs and professional fees related to our CEO transition and severance related to other executive level changes.
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(4)Represents fees incurred in connection with a project-based strategic initiative. The costs incurred represent third-party consulting fees related to a strategic initiative to develop revenue growth management capabilities for Outback Steakhouse and are included in General and administrative expense. Given the magnitude and scope of this initiative and that it is not expected to recur after 2024, we consider these incremental expenses to be distinct from other consulting fees that we incur in the ordinary course of business and not reflective of the ongoing costs to operate our business or operating performance in the period.
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(6)Primarily includes professional fees, severance and other costs not correlated to our core operating performance during the period.
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(7)Includes operating income from our Brazil operations for the periods presented, including intercompany royalty expense. For 2024, includes non-GAAP adjustments of $68.3 million for impairment of assets held for sale, $3.3 million of transaction related professional fees and $1.5 million of other impairment. See Note 3 -Discontinued Operations of the Notes to Consolidated Financial Statements for additional details.
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(1)Represents net (loss) income from continuing operations less net income attributable to noncontrolling interests.
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(4)Includes the tax effects of non-GAAP adjustments determined based on the nature of the underlying non-GAAP adjustments and their relevant jurisdictional tax rates for all periods presented. The difference between GAAP and adjusted effective income tax rates during fiscal year 2024 primarily relates to nondeductible losses and other tax costs associated with the Second 2025 Notes Partial Repurchase.
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(6)Adjusted diluted weighted average common shares outstanding for the fiscal years 2024 and 2023 were calculated including the effect of 1.6 million and 5.1 million dilutive securities, respectively, for outstanding 2025 Notes and the effect of 1.0 million and 3.4 million dilutive securities, respectively, for the Warrant Transactions, as defined below. In connection with the offering of the 2025 Notes, we entered into convertible note hedge transactions (the “Convertible Note Hedge Transactions”) and concurrently entered into warrant transactions relating to the same number of shares of our common stock (the “Warrant Transactions”). If our stock price is in excess of the conversion price of the 2025 Notes ($10.60 and $11.14 as of December 29, 2024 and December 31, 2023, respectively), the Convertible Note Hedge Transactions deliver shares to offset dilution from the 2025 Notes, which, in combination with the Warrant Transactions, effectively offset dilution from the 2025 Notes up to the strike price of the Warrant Transactions ($14.84 and $15.60 as of December 29, 2024 and December 31, 2023, respectively). Adjusted diluted earnings per share and adjusted diluted weighted average common shares outstanding for the fiscal year 2023 have been recast to remove the 5.1 million share benefit of the Convertible Note Hedge Transactions which was previously included as a non-GAAP share adjustment.
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As of December 29, 2024, we had $70.1 million in cash and cash equivalents of which $10.0 million was held by foreign affiliates. The international jurisdictions in which we have significant cash do not have any known restrictions that would prohibit repatriation.
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(1)Subsequent to December 29, 2024, we repaid $140.0 million on our revolving credit facility, primarily with proceeds from the Brazil Sale Transaction.
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See Note 11 -Convertible Senior Notes of the Notes to Consolidated Financial Statements for additional details regarding the Second 2025 Notes Partial Repurchase and related 2024 Note Hedge Early Termination Agreements and 2024 Warrant Early Termination Agreements.
Previous report
In February 2025, our Board declared a quarterly cash dividend of $0.15 per share, payable on March 26, 2025. Future dividend payments are dependent on our earnings, financial condition, capital expenditure requirements, surplus and other factors that our Board considers relevant, as well as continued compliance with the financial covenants in our debt agreements.
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Following is a summary of our share repurchase programs active during the periods presented as of December 29, 2024 (dollars in thousands):
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(1)The 2024 Share Repurchase Program will expire on August 13, 2025.
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Our ability to pay dividends and make share repurchases is dependent on our ability to obtain funds from our subsidiaries, continued compliance with the financial covenants in our debt agreements and the existence of surplus, as well as our earnings, financial condition, capital expenditure requirements and other factors that our Board deems relevant.
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The increase in net cash provided by operating activities during 2023 as compared to 2022 was primarily due to: (i) higher net earnings, (ii) decreased employee compensation payments and (iii) lower income tax payments. These increases were partially offset by higher rent and interest payments.
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Reworded paragraphs (68)
Previous wording
Management’s discussion and analysis of financial condition and results of operations should be read in conjunction with our consolidated financial statements and the related notes. We have classified the results of operations, non-GAAP measures, and liquidity and capital resources of our Brazil operations as discontinued operations for all periods presented. Unless otherwise noted, this Management Discussion and Analysis of Financial Condition and Results of Operations does not include discontinued operations. For discussion of our consolidated and segment-level results of operations, non-GAAP measures, and liquidity and capital resources not included in this Annual Report for fiscal year 2022, see our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on February 28, 2024.
Current wording
Management’s discussion and analysis of financial condition and results of operations should be read in conjunction with our consolidated financial statements and the related notes. We have classified the results of operations, non-GAAP measures, and liquidity and capital resources of our Brazil operations as discontinued operations for all periods presented. Unless otherwise noted, this Management Discussion and Analysis of Financial Condition and Results of Operations does not include discontinued operations.
Previous wording
We are one of the largest casual dining restaurant companies in the world with a portfolio of leading, differentiated restaurant concepts. As of December 29, 2024, we owned and operated 1,172 restaurants and franchised 291 restaurants across 46 states, Guam and 12 countries. Our restaurant portfolio includes: Outback Steakhouse, Carrabba’s Italian Grill, Bonefish Grill and Fleming’s Prime Steakhouse & Wine Bar.
Current wording
We are one of the largest casual dining restaurant companies in the world with a portfolio of leading, differentiated restaurant concepts. As of December 28, 2025, we owned and operated 967 restaurants and franchised 493 restaurants across 46 states, Guam and 12 countries. Our restaurant portfolio includes: Outback Steakhouse, Carrabba’s Italian Grill, Bonefish Grill and Fleming’s Prime Steakhouse & Wine Bar.
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Financial Overview -Our financial overview for 2024 from continuing operations includes the following:
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Financial Overview -Our financial overview for 2025 includes the following:
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•U.S. combined and Outback Steakhouse comparable restaurant sales of (1.1)% and (1.2)%, respectively;
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•U.S. combined and Outback Steakhouse comparable restaurant sales of 0.2% and (0.5)%, respectively;
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•Decrease in Total revenues of (5.2)% as compared to 2023;
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•Increase in Total revenues of 0.1% as compared to 2024;
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•Operating income and restaurant-level operating margins of 3.5% and 13.3%, respectively, as compared to 6.8% and 15.4%, respectively for 2023;
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•Operating income and restaurant-level operating margins of 0.9% and 11.7%, respectively, as compared to 3.5% and 13.3%, respectively for 2024;
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•Operating income of $139.8 million as compared to $282.8 million in 2023; and
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•Operating income of $37.2 million as compared to $139.8 million in 2024; and
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•Diluted (loss) earnings per share of $(0.61) as compared to $2.13 in 2023.
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•Diluted earnings per share of $0.10 as compared to diluted loss per share of $(0.61) in 2024.
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•Average restaurant unit volumes—average sales (excluding gift card breakage and, in our discontinued operations, the benefit of value added tax exemptions in Brazil) per restaurant to measure changes in customer traffic, pricing and development of the brand.
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•Average restaurant unit volumes—average sales (excluding gift card breakage) per restaurant to measure changes in customer traffic, pricing and development of the brand.
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•Comparable restaurant sales—year-over-year comparison of the change in sales volumes (excluding gift card breakage and, in our discontinued operations, the benefit of value added tax exemptions in Brazil) for Company-owned restaurants that are open 18 months or more in order to remove the impact of new restaurant openings in comparing the operations of existing restaurants.
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•Comparable restaurant sales—year-over-year comparison of the change in sales volumes (excluding gift card breakage) for Company-owned restaurants that are open 18 months or more in order to remove the impact of new restaurant openings in comparing the operations of existing restaurants.
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System-Wide Sales -System-wide sales is a non-GAAP financial measure that includes sales of all restaurants operating under our brand names, whether we own them or not. Management uses this information to make decisions about future plans for the development of additional restaurants and new concepts, as well as evaluation of current operations. System-wide sales comprise sales of Company-owned and franchised restaurants. For a summary of sales of Company-owned restaurants, refer to Note 4 -Revenue Recognition of the Notes to Consolidated Financial Statements.
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System-wide sales is a non-GAAP financial measure that includes sales of all restaurants operating under our brand names, whether we own them or not. Sales from restaurants we do not own are not included in our consolidated Restaurant sales. Management uses this information to make decisions about future plans for the development of additional restaurants and new concepts, as well as evaluation of current operations. System-wide sales comprise sales of Company-owned and franchised restaurants. For a summary of sales of Company-owned restaurants, refer to Note 4 -Revenue Recognition of the Notes to Consolidated Financial Statements. Franchise restaurant sales disclosed as system-wide sales do not represent our sales and are presented only as an indicator of changes in the restaurant system, which management believes is important information regarding the health of our restaurant concepts and in determining our royalties and/or service fees.
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•Restaurant-level operating margin, Income from operations, Net (loss) income and Diluted (loss) earnings per share—financial measures utilized to evaluate our operating performance.
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•Restaurant-level operating margin, Income from operations, Net income (loss) and Diluted earning (loss) per share—financial measures utilized to evaluate our operating performance.
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Restaurant-level operating margin is a non-GAAP financial measure widely regarded in the industry as a useful metric to evaluate restaurant-level operating efficiency and performance of ongoing restaurant-level operations, and we use it for these purposes. Our restaurant-level operating margin is expressed as the percentage of our Restaurant sales that Food and beverage costs, Labor and other related expense and Other restaurant operating expense (including advertising expenses) represent, in each case as such items are reflected in our Consolidated Statements of Operations and Comprehensive (Loss) Income. The following categories of revenue and operating expenses are not included in restaurant-level operating income and corresponding margin because we do not consider them reflective of operating performance at the restaurant-level within a period:
Current wording
Restaurant-level operating margin is a non-GAAP financial measure widely regarded in the industry as a useful metric to evaluate restaurant-level operating efficiency and performance of ongoing restaurant-level operations, and we use it for these purposes. Our restaurant-level operating margin is expressed as the percentage of our Restaurant sales that Food and beverage costs, Labor and other related expense and Other restaurant operating expense (including advertising expenses) represent, in each case as such items are reflected in our Consolidated Statements of Operations and Comprehensive Income (Loss). The following categories of revenue and operating expenses are not included in restaurant-level operating income and corresponding margin because we do not consider them reflective of operating performance at the restaurant-level within a period:
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(ii)Depreciation and amortization, which, although substantially all of which is related to restaurant-level assets, represent historical sunk costs rather than cash outlays for the restaurants;
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(ii)Depreciation and amortization, which, although substantially all of which is related to restaurant-level assets, represent historical sunk costs rather than current cash outlays for the restaurants;
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(iv)Asset impairment charges and restaurant closing costs, which are not reflective of ongoing restaurant performance in a period.
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(iv)Asset impairment charges and restaurant closing costs and Goodwill impairment, which are not reflective of ongoing restaurant performance in a period.
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Restaurant-level operating margin excludes various expenses, as discussed above, that are essential to supporting the operations of our restaurants and may materially impact our Consolidated Statements of Operations and Comprehensive (Loss) Income. As a result, restaurant-level operating margin is not indicative of our consolidated results of operations and is presented exclusively as a supplement to, and not a substitute for, Net (loss) income or Income from operations. In addition, our presentation of restaurant-level operating margin may not be comparable to similarly titled measures used by other companies in our industry.
Current wording
Restaurant-level operating margin excludes various expenses, as discussed above, that are essential to supporting the operations of our restaurants and may materially impact our Consolidated Statements of Operations and Comprehensive Income (Loss). As a result, restaurant-level operating margin is not indicative of our consolidated results of operations and is presented exclusively as a supplement to, and not a substitute for, Net income (loss) or Income from operations. In addition, our presentation of restaurant-level operating margin may not be comparable to similarly titled measures used by other companies in our industry.
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Restaurant Sales -Following is a summary of the change in Restaurant sales for the periods indicated:
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Restaurant Sales -Following is a summary of the change in Restaurant sales for the period indicated:
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(3)Fiscal years 2024 and 2023 include restaurant sales from 27 and 19 new restaurants, respectively, not included in our comparable restaurant sales base.
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(1)Includes restaurant sales from 38 new restaurants not included in our comparable restaurant sales base.
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Following is a summary of the average restaurant unit volumes and operating weeks for the periods indicated:
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Average Restaurant Unit Volumes and Operating Weeks -Following is a summary of the average restaurant unit volumes and operating weeks for the periods indicated:
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Following is a summary of comparable restaurant sales, traffic and average check per person (decreases) increases for the periods indicated:
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Comparable Restaurant Sales, Traffic and Average Check Per Person -Following is a summary of comparable restaurant sales, traffic and average check per person (decreases) increases for the periods indicated:
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(1)For 2024, U.S. comparable restaurant sales, traffic and average check per person compare the 52 weeks from January 1, 2024 through December 29, 2024 to the 52 weeks from January 2, 2023 through December 31, 2023. For 2023, U.S. comparable restaurant sales, traffic and average check per person compare the 53 weeks from December 26, 2022 through December 31, 2023 to the 53 weeks from December 27, 2021 through January 1, 2023.
Current wording
(1)As a result of the 53rd week in 2023, U.S. comparable restaurant sales, traffic and average check per person compare the 52 weeks from January 1, 2024 through December 29, 2024 to the 52 weeks from January 2, 2023 through December 31, 2023.
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(5)Includes the impact of menu pricing changes, product mix and discounts.
Current wording
(3)Includes the impact of menu pricing changes, product mix and discounts.
Previous wording
Fiscal year 2024 as compared to fiscal year 2023 - continuing operations
Current wording
Fiscal year 2025 as compared to fiscal year 2024
Previous wording
Food and beverage cost decreased as a percentage of Restaurant sales due to 2.0% from increases in average check per person, primarily driven by an increase in menu pricing, and 0.6% from certain cost saving and productivity initiatives, partially offset by an increase of 1.4% from commodity inflation.
Current wording
•Food and beverage cost increased as a percentage of Restaurant sales due to 1.1% from commodity inflation and 0.6% from unfavorable product mix. These impacts were partially offset by 1.0% from an increase in average check per person, primarily due to menu pricing.
Previous wording
Labor and other related expense increased as a percentage of Restaurant sales primarily due to 1.6% from higher hourly and field management labor costs, primarily due to wage rate inflation, partially offset by a decrease of 0.6% from an increase in average check per person.
Current wording
•Labor and other related expense increased as a percentage of Restaurant sales primarily due to 1.3% from higher hourly and field management labor costs, primarily due to wage rate inflation, partially offset by 0.3% from an increase in average check per person.
Previous wording
Other restaurant operating expense increased as a percentage of Restaurant sales primarily due to: (i) 1.1% from higher restaurant-level operating and supply expenses, primarily due to inflation, (ii) 0.5% from higher advertising expense and (iii) 0.4% from higher insurance and legal expense, primarily from lapping the 2023 favorable settlement of certain collective action wage and hour lawsuits. These increases were partially offset by decreases as a percentage of Restaurant sales of 0.3% from an increase in average check per person and 0.3% from certain cost-saving and productivity initiatives.
Current wording
•Other restaurant operating expense increased as a percentage of Restaurant sales primarily due to 0.7% from higher restaurant-level operating and supply expenses, primarily due to inflation, partially offset by 0.5% from lower advertising expense.
Previous wording
Depreciation and amortization expense increased primarily due to restaurant development and technology projects, partially offset by restaurant closures.
Current wording
•Depreciation and amortization expense increased primarily due to restaurant development partially offset by closed and impaired restaurants.
Previous wording
Loss on extinguishment of debt and Loss on fair value adjustment of derivatives, netduring 2024 were in connection with the repurchase of $83.6 million of the outstanding convertible senior notes due in 2025 (the “2025 Notes”) (the “Second 2025 Notes Partial Repurchase”), which is described in further detail within Note 11 -Convertible Senior Notes of the Notes to Consolidated Financial Statements.
Current wording
•Loss on extinguishment of debt during 2024 was in connection with the repurchase of $83.6 million of the outstanding convertible senior notes due in 2025 (the “2025 Notes”) (the “2025 Notes Partial Repurchase”), which is described in further detail within Note 11 -Convertible Senior Notes of the Notes to Consolidated Financial Statements.
Previous wording
(Benefit) provision for income taxes includes credits we and other restaurant company employers may claim against federal income taxes for FICA taxes paid on certain tipped wages (the “FICA tax credit”). The level of FICA tax credits is primarily driven by U.S. Restaurant sales and is not impacted by costs incurred that may reduce (Loss) income before (benefit) provision for income taxes.
Current wording
Benefit for income taxes includes credits we and other restaurant company employers may claim against federal income taxes for FICA taxes paid on certain tipped wages (the “FICA tax credit”). The level of FICA tax credits is primarily driven by U.S. Restaurant sales and is not impacted by costs incurred that may reduce (Loss) income before (benefit) provision for income taxes.
Previous wording
We consider each of our U.S. restaurant concepts and our international franchise business as operating segments, which reflects how we manage our business, review operating performance and allocate resources. All other operating segments, which include our operations in Hong Kong and China do not meet the quantitative thresholds for determining reportable operating segments.
Current wording
We consider each of our U.S. restaurant concepts and our international franchise business as operating segments, which reflects how we manage our business, review operating performance and allocate resources. All other operating segments, which include our operations in Hong Kong and the equity method investment in Brazil, do not meet the quantitative thresholds for determining reportable segments.
Previous wording
Revenues for both segments include only transactions with customers and exclude intersegment revenues. Excluded from Income from operations for U.S. are certain legal and corporate costs not directly related to the performance of the segments, most stock-based compensation expenses, a portion of insurance expenses and certain bonus expenses.
Current wording
Revenue for the U.S. reportable segment includes transactions with customers and revenues for both reportable segments include royalties from franchisees. There were no material transactions among reportable segments. Excluded from Income from operations for U.S. are certain legal and corporate costs not directly related to the performance of the segments, most stock-based compensation expenses, a portion of insurance expenses and certain bonus expenses.
Previous wording
Operating income is utilized by our CODM as the segment profit or loss measure and to manage the business, review operating performance and allocate resources.
Current wording
Operating income is utilized by the Company’s CODM as the primary segment profit or loss measure to allocate resources in the planning and forecasting process and also to review operating performance by monitoring actual results versus prior year and forecasts.
Previous wording
Refer to Note 19 -Segment Reportingof the Notes to Consolidated Financial Statements for reconciliation of segment income from operations to the consolidated operating results.
Current wording
Refer to Note 18 -Segment Reportingof the Notes to Consolidated Financial Statements for reconciliations of segment income from operations to the consolidated operating results.
Previous wording
Summary financial data - Following is a summary of financial data by segment for the periods indicated:
Current wording
Summary financial data - Following is a summary of U.S. segment financial data for the periods indicated:
Previous wording
(1)The decrease from 2023 to 2024 was primarily due to: (i) the restaurant sales during the 53rd week of 2023, (ii) the net impact of restaurant closures and openings and (iii) lower comparable restaurant sales. The increase from 2022 to 2023 was primarily due to the restaurant sales during the 53rd week of 2023 and higher comparable restaurant sales, partially offset by the net impact of restaurant closures and openings. See Results of Operations -Restaurant Salesfor a rollforward of consolidated Restaurant sales.
Current wording
(1)The increase from 2024 to 2025 was primarily due to: (i) the net impact of restaurant openings and closures and (ii) higher comparable restaurant sales.
Previous wording
(2)Includes international royalties from franchisees and royalties from our Brazil operations at our historical 5%intercompany rate. On December 30, 2024, we entered into franchise agreements in connection with the Brazil Sale Transaction that include royalty rates that are lower than our historical intercompany rates and on the low end of our international franchisee royalty percentage range.
Current wording
(1)On December 30, 2024, we entered into franchise agreements in connection with the Brazil Sale Transaction that include royalty rates that are lower than our 5% historical intercompany royalty rates and are on the low end of our international franchisee royalty percentage range.
Previous wording
Consolidated Restaurant-level Operating Income and Adjusted Restaurant-level Operating Income and Corresponding Margins Non-GAAP Reconciliations - Restaurant-level operating margin is calculated as Restaurant sales after deduction of the main restaurant-level operating costs, which includes Food and beverage cost, Labor and other related expense and Other restaurant operating expense. Adjusted restaurant-level operating margin is Restaurant-level operating margin adjusted for certain items. The following table reconciles consolidated Income from continuing operations and the corresponding margin to restaurant-level operating income from continuing operations and consolidated adjusted restaurant-level operating income and the corresponding margins for the periods indicated:
Current wording
Consolidated Restaurant-level Operating Income and Adjusted Restaurant-level Operating Income and Corresponding Margins Non-GAAP Reconciliations - Restaurant-level operating margin is calculated as Restaurant sales after deduction of the main restaurant-level operating costs, which includes Food and beverage cost, Labor and other related expense and Other restaurant operating expense. Adjusted restaurant-level operating margin is Restaurant-level operating margin adjusted for certain items. The following table reconciles consolidated Income and the corresponding margin to restaurant-level operating income and consolidated adjusted restaurant-level operating income and the corresponding margins for the periods indicated:
Previous wording
(3)Costs incurred in connection with the transition to a new partner compensation program.
Current wording
(1)Represents costs associated with updated field PTO policy in connection with the transition to a new human resources and payroll system.
Previous wording
Adjusted Income from Operations Non-GAAP Reconciliations - The following table reconciles Income from continuing operations and the corresponding margin to adjusted income from operations and the corresponding margin for the periods indicated:
Current wording
Adjusted Income from Operations Non-GAAP Reconciliations - The following table reconciles Income from operations and the corresponding margin to adjusted income from operations and the corresponding margin for the periods indicated:
Previous wording
(2)For 2023, includes lease remeasurement gains in connection with the 2023 Restaurant Closures. See Note 5 -Impairments and Exit Costs of the Notes to Consolidated Financial Statements for additional details regarding the 2023 Restaurant Closures.
Current wording
(2)Fiscal year 2025 primarily includes costs related to the closure of 21 U.S. restaurants and the decision not to renew the leases of 22 restaurants and asset impairments related to five underperforming U.S. restaurants. Fiscal year 2024 primarily includes asset impairment related to older, underperforming restaurants and other asset impairment and closure-related costs in connection with previous restaurant closures. See Note 5 - Impairments and Exit Costs of the Notes to Consolidated Financial Statements for additional details.
Showing the first 40 of 68 pairs. Open the source sections for the rest.
Rearranged current paragraphs (4)
Current report — wording carried from elsewhere
We utilize a 52-53-week year ending on the last Sunday in December. In a 52-week fiscal year, each quarterly period is comprised of 13 weeks. The additional week in a 53-week fiscal year is added to the fourth quarter. Fiscal years 2025 and 2024 both consisted of 52 weeks. For discussion of our consolidated and segment-level results of operations, non-GAAP measures, and liquidity and capital resources not included in this Annual Report for fiscal year 2023, see our Annual Report on Form 10-K for the year ended December 29, 2024, filed with the SEC on February 26, 2025.
Current report — wording carried from elsewhere
See Note 11 -Convertible Senior Notes of the Notes to Consolidated Financial Statements for additional details.
Current report — wording carried from elsewhere
During the thirteen weeks ended December 28, 2025, we received cash proceeds, net of withheld income taxes and inclusive of accumulated interest income, of $123.5 million in U.S. dollars, representing the remaining 48% of total proceeds from the Brazil Sale Transaction, and applied the proceeds to our revolving credit facility.
Current report — wording carried from elsewhere
The remaining 33% ownership interest is subject to a put-call mechanism contained in the shareholders agreement whereby the buyer may cause us to sell or we may cause the buyer to purchase the totality of the remaining interest during the fourth quarter of 2028 at a multiple of earnings defined in the shareholders agreement.
Rearranged previous paragraphs (6)
Previous report — wording carried elsewhere
Average Restaurant Unit Volumes and Operating Weeks
Previous report — wording carried elsewhere
Comparable Restaurant Sales, Traffic and Average Check Per Person (Decreases) Increases
Previous report — wording carried elsewhere
Fiscal year 2023 as compared to fiscal year 2022 - continuing operations
Previous report — wording carried elsewhere
Labor and other related expense increased as a percentage of Restaurant sales primarily due to 1.9% from higher hourly and field management labor costs, primarily due to wage rate inflation, partially offset by decreases of 0.9% from an increase in average check per person and 0.3% from certain cost saving and productivity initiatives.
Previous report — wording carried elsewhere
2025 Notes Partial Repurchase - On February 29, 2024, we and certain holders entered into exchange agreements (the “2024 Exchange Agreements”) in which the holders agreed to exchange $83.6 million in aggregate principal amount of our outstanding 2025 Notes for approximately 7.5 million shares of our common stock and $3.3 million in cash, including accrued interest (the “Second 2025 Notes Partial Repurchase”).
Previous report — wording carried elsewhere
We estimate the fair value of trade names using the relief-from-royalty method, which requires assumptions related to projected sales for each reporting unit, assumed market royalty rates applicable to the trade names, and discount rates.