Texas Roadhouse, Inc.: Form 10-Q for the period ended Jul 1, 2025

CAUTIONARY STATEMENT

This report contains forward-looking statements based on our current expectations, estimates, and projections about our industry and certain assumptions made by us. Words such as "anticipates," "expects," "intends," "plans," "believes," "seeks," "estimates," "may," "will," and variations of these words or similar expressions are intended to identify forward-looking statements. In addition, any statements that refer to expectations, projections, or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. Such statements are not guarantees of future performance and are subject to certain risks, uncertainties, and assumptions that are difficult to predict. Therefore, our actual results could differ materially and adversely from those expressed in any forward-looking statements as a result of various factors. The section entitled "Risk Factors" in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, and in Part II, Item 1A in this Form 10-Q, along with disclosures in our other Securities and Exchange Commission ("SEC") filings discuss some of the important risk factors that may affect our business, results of operations, or financial condition. You should carefully consider those risks, in addition to the other information in this report, and in our other filings with the SEC, before deciding to invest in our Company or to maintain or increase your investment. We undertake no obligation to revise or update publicly any forward-looking statements, except as may be required by applicable law. The information contained in this Form 10-Q is not a complete description of our business or the risks associated with an investment in our common stock. We urge you to carefully review and consider the various disclosures made by us in this report and in our other reports filed with the SEC that discuss our business in greater detail and advise interested parties of certain risks, uncertainties, and other factors that may affect our business, results of operations, or financial condition.

Our Company

Texas Roadhouse, Inc. is a growing restaurant company operating predominantly in the casual dining segment. Our late founder, W. Kent Taylor, started the Company in 1993 with the opening of the first Texas Roadhouse restaurant in Clarksville, Indiana. Since then, we have grown to three concepts with 797 restaurants in 49 states, one U.S. territory, and ten foreign countries. As of July 1, 2025, our 797 restaurants included:

• 695 company restaurants, of which 676 were wholly-owned and 19 were majority-owned. The results of operations of company restaurants are included in our unaudited condensed consolidated statements of income. The portion of income attributable to noncontrolling interests in company restaurants that are majority-owned is reflected in the line item net income attributable to noncontrolling interests in our unaudited condensed consolidated statements of income. Of the 695 company restaurants, we operated 634 as Texas Roadhouse restaurants, 52 as Bubba’s 33 restaurants, and nine as Jaggers restaurants.
• 102 franchise restaurants, of which 17 we have a 5.0% to 10.0% ownership interest. The income derived from our minority interests in these franchise restaurants is reported in the line item equity income from investments in unconsolidated affiliates in our unaudited condensed consolidated statements of income. Of the 102 franchise restaurants, 39 were domestic Texas Roadhouse restaurants, five were domestic Jaggers restaurants, 57 were international Texas Roadhouse restaurants, including one restaurant in a U.S. territory, and one was an international Jaggers restaurant.

We have contractual arrangements that grant us the right to acquire at pre-determined formulas the equity interests in 17 of the 19 majority-owned company restaurants and 39 of the 44 systemwide domestic franchise restaurants.

Throughout this report, we use the term "restaurants" to include Texas Roadhouse and Bubba’s 33, unless otherwise noted.

Presentation of Financial and Operating Data

Throughout this report, the 13 weeks ended July 1, 2025 and June 25, 2024, are referred to as Q2 2025 and Q2 2024, respectively. The 26 weeks ended July 1, 2025 and June 25, 2024, are referred to as 2025 YTD and 2024 YTD, respectively. Fiscal year 2025 will be 52 weeks in length, with the quarters 13 weeks in length. Fiscal year 2024 was 53 weeks in length, with the fourth quarter 14 weeks in length.

Key Measures We Use to Evaluate Our Company

Key measures we use to evaluate and assess our business include the following:

• Comparable Restaurant Sales. Comparable restaurant sales reflect the change in sales for all company restaurants across all concepts, unless otherwise noted, over the comparable period of the prior year for the comparable restaurant base. We define the comparable restaurant base to include those restaurants open for a full 18 months before the beginning of the period measured excluding restaurants permanently closed during the period, if applicable. Comparable restaurant sales can be impacted by changes in guest traffic counts or by changes in the per person average check amount. Menu price changes, the mix of menu items sold, and the mix of dine-in versus to-go sales can affect the per person average check amount.
• Average Unit Volume. Average unit volume represents the average quarterly, year-to-date, or annual restaurant sales for Texas Roadhouse and Bubba’s 33 restaurants open for a full six months before the beginning of the period measured excluding sales of restaurants permanently closed during the period, if applicable. Historically, average unit volume growth is less than comparable restaurant sales growth which indicates that newer restaurants are operating with sales growth levels lower than the company average. At times, average unit volume growth may be more than comparable restaurant sales growth which indicates that newer restaurants are operating with sales growth levels higher than the company average.
• Store Weeks and New Restaurant Openings. Store weeks represent the number of weeks that all company restaurants across all concepts, unless otherwise noted, were open during the reporting period. Store weeks include weeks in which a restaurant is temporarily closed. Store week growth is driven by new restaurant openings and franchise acquisitions. New restaurant openings reflect the number of restaurants opened during a particular fiscal period, excluding store relocations. We consider store openings that occur simultaneously with a store closure in the same trade area to be a relocation.
• Restaurant Margin. Restaurant margin (in dollars, as a percentage of restaurant and other sales, and per store week) represents restaurant and other sales less restaurant-level operating costs, including food and beverage costs, labor, rent, and other operating costs. Restaurant margin is not a measurement determined in accordance with GAAP and should not be considered in isolation, or as an alternative, to income from operations. This non-GAAP measure is not indicative of overall company performance and profitability in that this measure does not accrue directly to the benefit of shareholders due to the nature of the costs excluded. Restaurant margin is widely regarded as a useful metric by which to evaluate core restaurant-level operating efficiency and performance over various reporting periods on a consistent basis.

In calculating restaurant margin, we exclude certain non-restaurant-level costs that support operations, including pre-opening and general and administrative expenses, but do not have a direct impact on restaurant-level operational efficiency and performance. We exclude pre-opening expenses as they occur at irregular intervals and would impact comparability to prior period results. We exclude depreciation and amortization expenses, substantially all of which relate to restaurant-level assets, as they represent a non-cash charge for the investment in our restaurants. We exclude impairment and closure expenses as we believe this provides a clearer perspective of the Company’s ongoing operating performance and a more useful comparison to prior period results. Restaurant margin as presented may not be comparable to other similarly titled measures of other companies in our industry. A reconciliation of income from operations to restaurant margin is included in the Results of Operations section below.

Other Key Definitions

• Restaurant and Other Sales. Restaurant sales include gross food and beverage sales, net of promotions and discounts, for all company restaurants. Sales taxes collected from customers and remitted to governmental authorities are accounted for on a net basis and therefore are excluded from restaurant sales in our unaudited condensed consolidated statements of income. Other sales primarily include the net impact of the amortization of third-party gift card fees and gift card breakage income and content revenue related to our tabletop kiosk devices.
• Royalties and Franchise Fees. Royalties consist of franchise royalties, as defined in our franchise agreement, paid to us by our domestic and international franchisees, as well as royalties related to our royalty-based retail products. Domestic and international franchisees also typically pay an initial franchise fee and/or development fee for each new restaurant or territory.
• Food and Beverage Costs. Food and beverage costs consist of the costs of raw materials and ingredients used in the preparation of food and beverage products sold in our company restaurants. Approximately half of our food and beverage costs relate to beef.
• Restaurant Labor Expenses. Restaurant labor expenses include all direct and indirect labor costs incurred in operations except for profit sharing incentive compensation expenses earned by our restaurant managing partners and market partners. These profit sharing expenses are reflected in restaurant other operating expenses. Restaurant labor expenses also include share-based compensation expense related to restaurant-level employees.
• Restaurant Rent Expense. Restaurant rent expense includes all rent, except pre-opening rent, associated with the leasing of real estate and includes base, percentage, and straight-line rent expense.
• Restaurant Other Operating Expenses. Restaurant other operating expenses consist of all other restaurant-level operating costs, the major components of which are supplies, profit sharing incentive compensation for our restaurant managing partners and market partners, utilities, credit card fees, general liability insurance, advertising, repairs and maintenance, property taxes, and outside services.
• Pre-opening Expenses. Pre-opening expenses, which are charged to operations as incurred, consist of expenses incurred before the opening of a new or relocated restaurant and consist principally of opening and training team compensation and benefits, travel expenses, rent, food, beverage, and other initial supplies and expenses. The majority of pre-opening costs incurred relate to the hiring and training of employees due to the significant investment we make in training our people. Pre-opening costs vary by location depending on a number of factors, including the size and physical layout of each location; the number of management and hourly employees required to operate each restaurant; the availability of qualified restaurant staff members; the cost of travel and lodging for different geographic areas; the timing of the restaurant opening; and the extent of unexpected delays, if any, in obtaining final licenses and permits to open each restaurant.
• Depreciation and Amortization Expenses. Depreciation and amortization expenses include the depreciation of fixed assets and amortization of intangibles with definite lives, substantially all of which relate to restaurant-level assets.
• Impairment and Closure Costs, Net. Impairment and closure costs, net include any impairment of long-lived assets, including property and equipment, operating lease right-of-use assets, and goodwill, and expenses associated with the closure of a restaurant. Closure costs also include any gains or losses associated with a relocated restaurant or the sale of a closed restaurant and/or assets held for sale as well as costs associated with closed or relocated restaurants.
• General and Administrative Expenses. General and administrative expenses comprise expenses associated with corporate and administrative functions that support development and restaurant operations and provide an

infrastructure to support future growth. This includes salary, incentive-based, and share-based compensation expense related to executive officers and Support Center employees, salary and share-based compensation expense related to market partners, software hosting fees, professional fees, group insurance, and the realized and unrealized holding gains and losses related to the investments in our deferred compensation plan.

• Interest Income, Net. Interest income, net includes earnings on cash and cash equivalents and is reduced by interest expense, net of capitalized interest, on our debt or financing obligations including the amortization of loan fees, as applicable.
• Equity Income from Investments in Unconsolidated Affiliates. Equity income includes our percentage share of net income earned by unconsolidated affiliates and our share of any gain on the acquisition of these affiliates. As of July 1, 2025, and June 25, 2024, we owned a 5.0% to 10.0% equity interest in 17 and 20 domestic franchise restaurants, respectively.
• Net Income Attributable to Noncontrolling Interests. Net income attributable to noncontrolling interests represents the portion of income attributable to the other owners of the majority-owned restaurants. Our consolidated subsidiaries include 19 majority-owned restaurants as of July 1, 2025 and June 25, 2024.

Q2 2025 Financial Highlights

Total revenue increased $170.9 million or 12.7% to $1,512.1 million in Q2 2025 compared to $1,341.2 million in Q2 2024 primarily due to an increase in store weeks and comparable restaurant sales. Store weeks and comparable restaurant sales increased 7.2% and 5.8%, respectively, at company restaurants in Q2 2025 compared to Q2 2024. The increase in store weeks was due to the acquisition of franchise restaurants and new store openings. The increase in comparable restaurant sales was due to an increase in guest traffic along with an increase in per person average check.

Net income increased $3.9 million or 3.3% to $124.1 million in Q2 2025 compared to $120.1 million in Q2 2024 primarily due to higher restaurant margin dollars, as described below, partially offset by higher depreciation and amortization expenses and higher general and administrative expenses. Diluted earnings per share increased 4.0% to $1.86 in Q2 2025 from $1.79 in Q2 2024 due to the increase in net income and the impact of share repurchases.

Restaurant margin dollars increased $14.7 million or 6.1% to $257.3 million in Q2 2025 compared to $242.6 million in Q2 2024 primarily due to higher sales. Restaurant margin, as a percentage of restaurant and other sales, decreased to 17.1% in Q2 2025 compared to 18.2% in Q2 2024. The decrease in restaurant margin, as a percentage of restaurant and other sales, was primarily due to commodity inflation of 5.2% and wage and other labor inflation of 3.8% partially offset by higher sales.

In addition, during the 13 weeks ended July 1, 2025, capital allocation spend included capital expenditures of $92.5 million, franchise acquisitions of $15.5 million, dividends of $45.1 million, and repurchases of common stock of $9.8 million.

Results of Operations

(in thousands)

NM — Not meaningful

​

Reconciliation of Income from Operations to Restaurant Margin

($ In thousands, except restaurant margin $ per store week)

See above for the definition of restaurant margin.

Restaurant Unit Activity

(1) Includes a U.S. territory.

Q2 2025 compared to Q2 2024

Restaurant and Other Sales

Restaurant and other sales increased 12.8% in Q2 2025 compared to Q2 2024 and 11.2% in 2025 YTD compared to 2024 YTD. The following table summarizes certain key drivers and/or attributes of restaurant sales at company restaurants for the periods presented. Company restaurant count activity is shown in the restaurant unit activity table above.

(1) Average unit volume includes restaurants open a full six to 18 months before the beginning of the period measured, excluding sales from restaurants permanently closed during the period, if applicable.

The increase in restaurant sales for Q2 2025 and 2025 YTD was primarily due to an increase in store weeks and an increase in comparable restaurant sales. The increase in store weeks was driven by the acquisition of franchise restaurants and new store openings. The increase in comparable restaurant sales was driven by an increase in guest traffic counts along with an increase in our per person average check as shown in the table below.

To-go sales as a percentage of restaurant sales were 13.3% in Q2 2025 compared to 12.6% in Q2 2024. To-go sales as a percentage of restaurant sales were 13.4% in 2025 YTD compared to 12.8% in 2024 YTD.

Per person average check includes the benefit of a menu price increase of approximately 1.4% implemented in Q2 2025 and menu price increases of approximately 2.2% and 0.9% implemented in Q2 2024 and Q4 2024, respectively.

In 2025 YTD, we opened nine Texas Roadhouse company restaurants and three Bubba’s 33 company restaurants. In 2025, we expect store week growth of approximately 5% across all concepts, including a benefit of approximately 2% from the acquisitions of 17 domestic franchise restaurants in 2025 YTD, offset by the lapping of the additional week in 2024.

Other sales primarily include the net impact of the amortization of third-party gift card fees and gift card breakage income and content revenue related to our tabletop kiosk devices. The net impact of these amounts was a $3.9 million and $3.1 million reduction to other sales in Q2 2025 and Q2 2024, respectively, and a $10.0 million and $9.2 million reduction to other sales in 2025 YTD and 2024 YTD, respectively.

Royalties and Franchise Fees

Royalties and franchise fees increased by $0.5 million or 6.9% in Q2 2025 compared to Q2 2024 and increased by $0.8 million or 5.2% in 2025 YTD compared to 2024 YTD. The increases were due to increased royalties related to our royalty-based retail products and comparable franchise restaurant sales growth partially offset by decreased royalties related to the franchise stores that were acquired.

Food and Beverage Costs

Food and beverage costs, as a percentage of restaurant and other sales, increased to 34.0% in Q2 2025 compared to 32.7% in Q2 2024 and increased to 34.0% in 2025 YTD compared to 33.3% in 2024 YTD. The increases were primarily driven by commodity inflation of 5.2% in Q2 2025 and 3.7% in 2025 YTD, primarily driven by higher beef costs, and unfavorable shifts within the menu, partially offset by the benefit of a higher average guest check.

In 2025, we expect commodity inflation of approximately 5%, including the estimated impact of tariffs, with prices locked for approximately 65% of our remaining forecasted costs and the remainder subject to market rates.

Restaurant Labor Expenses

Restaurant labor expenses, as a percentage of restaurant and other sales, increased to 32.9% in Q2 2025 compared to 32.8% in Q2 2024 and increased to 33.1% in 2025 YTD compared to 32.7% in 2024 YTD. The increases were primarily driven by wage and other labor inflation of 3.8% in Q2 2025 and 4.2% in 2025 YTD partially offset by the benefit of a higher average guest check and labor productivity. Wage and other labor inflation was driven by higher wage and benefit expense due to labor market pressures along with increases in state-mandated minimum and tipped wage rates and increased investment in our people.

In 2025, we expect our labor costs to be pressured by wage and other labor inflation of approximately 4%.

Restaurant Rent Expense

Restaurant rent expense, as a percentage of restaurant and other sales, was 1.5% for all periods presented. In Q2 2025 and 2025 YTD, higher rent expense at our recently acquired restaurants and newer restaurants was offset by the increase in average unit volume.

Restaurant Other Operating Expenses

Restaurant other operating expenses, as a percentage of restaurant and other sales, decreased to 14.5% in Q2 2025 compared to 14.8% in Q2 2024 and decreased to 14.5% in 2025 YTD compared to 14.7% in 2024 YTD. The decreases were driven by lower general liability insurance expense of $1.8 million and $5.1 million in Q2 2025 and 2025 YTD, respectively, as compared to the prior year period, as well as lower incentive compensation expense and the increase in average unit volume. The decreases were partially offset by increases in utilities expense and credit card fee expense.

Pre-opening Expenses

Pre-opening expenses were $5.5 million in Q2 2025 compared to $6.2 million in Q2 2024 and $12.3 million in 2025 YTD compared to $14.3 million in 2024 YTD. Pre-opening costs will fluctuate from quarter to quarter based on specific pre-opening costs incurred for each restaurant, the number and timing of restaurant openings, and the number and timing of restaurant managers hired.

Depreciation and Amortization Expenses

Depreciation and amortization expenses, as a percentage of total revenue, increased to 3.4% in Q2 2025 compared to 3.2% in Q2 2024 and increased to 3.4% in 2025 YTD compared to 3.2% in 2024 YTD. The increases were driven by an increase in depreciation expense at our newer restaurants and an increase in intangible asset amortization expense related to the acquisition of franchise restaurants partially offset by the increase in average unit volume.

Impairment and Closure Costs, Net

Impairment and closure costs, net were $0.1 million in both Q2 2025 and Q2 2024 and were $0.1 million in 2025 YTD compared to $0.3 million in 2024 YTD. Impairment and closure costs, net in all periods presented included closure costs related to restaurant relocations.

General and Administrative Expenses

General and administrative expenses, as a percentage of total revenue, decreased to 4.2% in Q2 2025 compared to 4.3% in Q2 2024 and decreased to 4.0% in 2025 YTD compared to 4.2% in 2024 YTD. The decreases were driven by the increase in average unit volume and lower incentive compensation expense partially offset by higher restricted stock expense due to the long-term grant of performance based restricted stock to our executive team and a favorable legal settlement received in Q2 2024.

Interest Income, Net

Interest income, net was $1.0 million and $1.7 million in Q2 2025 and Q2 2024, respectively, and was $2.3 million and $3.1 million in 2025 YTD and 2024 YTD, respectively. The decreases were driven by decreased earnings on our cash and cash equivalents.

Equity Income from Investments in Unconsolidated Affiliates

Equity income was $1.4 million in Q2 2025 compared to $0.3 million Q2 2024 and was $1.7 million in 2025 YTD compared to $0.5 million in 2024 YTD. The increases were driven by a $1.2 million gain on the acquisition of three of these affiliates in Q2 2025.

Income Tax Expense

Our effective tax rate was 14.9% in Q2 2025 compared to 15.0% in Q2 2024 and was 14.8% in 2025 YTD compared to 14.5% in 2024 YTD. The decrease in the tax rate in Q2 2025, as compared to Q2 2024, was primarily due to an increase in the impact of the FICA tip tax credit partially offset by a reduction in the stock compensation benefit. The increase in 2025 YTD, as compared to 2024 YTD, was primarily due a reduction in the stock compensation benefit.

In 2025, we expect an effective tax rate of approximately 15% based on forecasted operating results.

Segment Information

We manage our restaurant and franchising operations by concept and as a result have identified Texas Roadhouse, Bubba's 33, Jaggers, and our retail initiatives as separate operating segments. Our reportable segments are Texas Roadhouse and Bubba's 33. The Texas Roadhouse reportable segment includes the results of our company Texas Roadhouse restaurants and domestic and international franchise Texas Roadhouse restaurants. The Bubba's 33 reportable segment includes the results of our domestic company Bubba's 33 restaurants. Our remaining operating segments, which include the results of our company and franchise Jaggers restaurants and the results of our retail initiatives, are included in Other. In addition, corporate-related assets, depreciation and amortization, and capital expenditures are also included in Other.

The CODM uses restaurant margin as the primary measure for assessing performance of our segments. Restaurant margin (in dollars and as a percentage of restaurant and other sales) represents restaurant and other sales less restaurant-level operating costs, including food and beverage costs, labor, rent, and other operating costs. Restaurant margin is used by our CODM to evaluate core restaurant-level operating efficiency and performance, assist in the evaluation of operating trends over time, and in making capital allocation decisions. A reconciliation of income from operations to restaurant margin is included in the Results of Operations section above.

The following table presents a summary of restaurant margin by segment (in thousands):

In our Texas Roadhouse reportable segment, restaurant margin dollars increased $13.0 million or 5.7% in Q2 2025 and $23.1 million or 5.2% in 2025 YTD. The increases were due to higher sales partially offset by commodity inflation and wage and other labor inflation. In addition, restaurant margin, as a percentage of restaurant and other sales, decreased to 17.1% in Q2 2025 from 18.3% in Q2 2024 and decreased to 16.9% in 2025 YTD from 17.8% in 2024 YTD. Restaurant margin percentage was primarily impacted by commodity inflation and wage and other labor inflation which was partially offset by higher sales.

In our Bubba’s 33 reportable segment, restaurant margin dollars increased $1.8 million or 14.3% in Q2 2025 and $2.4 million or 9.7% in 2025 YTD. The increases were due to higher sales partially offset by commodity inflation and an increase in general liability insurance expense. In addition, restaurant margin, as a percentage of restaurant and other sales, decreased to 16.7% in Q2 2025 from 17.1% in Q2 2024 and decreased to 16.4% in 2025 YTD from 17.2% in 2024

YTD. Restaurant margin percentage was primarily impacted by the increased expenses noted above, which were partially offset by higher sales.

Liquidity and Capital Resources

The following table presents a summary of our net cash provided by (used in) operating, investing, and financing activities (in thousands):

Net cash provided by operating activities was $366.0 million in 2025 YTD compared to $377.3 million in 2024 YTD. This decrease was primarily due to an unfavorable change in working capital partially offset by an increase in depreciation and amortization expense.

Our operations have not required significant working capital and, like many restaurant companies, we have been able to operate with negative working capital, if necessary. Sales are primarily for cash, and restaurant operations do not require significant inventories or receivables. In addition, we receive trade credit for the purchase of food, beverages, and supplies, thereby reducing the need for incremental working capital to support growth.

Net cash used in investing activities was $259.5 million in 2025 YTD compared to $146.2 million in 2024 YTD. The increase was primarily due to the acquisition of 17 franchise restaurants in 2025 YTD and an increase in restaurant relocations partially offset by a decrease in the timing of new company restaurant spend.

We require capital principally for the development of new company restaurants, the refurbishment or relocation of existing restaurants, and the acquisition of franchise restaurants, as applicable. We either lease our restaurant site locations under operating leases for periods of five to 30 years (including renewal periods) or purchase the land when appropriate. As of July 1, 2025, we had developed 155 of the 695 company restaurants on land that we own.

The following table presents a summary of capital expenditures (in thousands):

Our future capital requirements will primarily depend on the number and mix of new restaurants we open, the timing of those openings, the restaurant prototype developed in a given fiscal year, and potential franchise acquisitions. These requirements will include costs directly related to opening, maintaining, or relocating restaurants and may also include costs necessary to ensure that our infrastructure is able to support a larger restaurant base.

We intend to satisfy our capital requirements over the next 12 months with cash on hand, net cash provided by operating activities and, if needed, funds available under our revolving credit facility. In 2025, we expect capital expenditures of approximately $400 million.

Net cash used in financing activities was $174.9 million in 2025 YTD compared to $138.0 million in 2024 YTD. The increase is primarily due to an increase in share repurchases and an increase in our quarterly dividend payment in 2025 YTD.

On February 19, 2025, our Board approved the payment of a quarterly cash dividend of $0.68 per share of common stock compared to the quarterly dividend of $0.61 per share of common stock declared in 2024. The payments of quarterly dividends totaled $90.3 million and $81.5 million in 2025 YTD and 2024 YTD, respectively.

On August 6, 2025, our Board approved the payment of the third quarter 2025 cash dividend of $0.68 per share of common stock. This payment will be distributed on September 30, 2025, to shareholders of record at the close of business on September 2, 2025.

On February 19, 2025, our Board approved a stock repurchase program for the repurchase of up to $500.0 million of our common stock. This stock repurchase program has no expiration date and replaces the previous stock repurchase program which was approved in 2022.

During 2025 YTD, we paid $60.0 million, excluding excise taxes, to repurchase 342,789 shares of our common stock. This includes $30.0 million repurchased under our prior authorization and $30.0 million repurchased under our current authorization. During 2024 YTD, we paid $35.1 million, excluding excise taxes, to repurchase 222,666 shares of our common stock. As of July 1, 2025, $470.0 million remained under our authorized stock repurchase program.

On April 24, 2025, we entered into an agreement for a revolving credit facility with a syndicate of commercial lenders led by JPMorgan Chase Bank, N.A. and PNC Bank, N.A. This credit facility superseded and replaced our previous credit facility.

The credit facility is an unsecured, revolving credit agreement and has a borrowing capacity of up to $450.0 million with the option to increase the capacity by an additional $250.0 million subject to certain limitations, including approval by the syndicate of commercial lenders. The credit facility has a maturity date of April 24, 2030.

As of July 1, 2025, we had no outstanding borrowings under the credit facility and had $446.8 million of availability, net of $3.2 million of outstanding letters of credit, respectively. As of December 31, 2024, we had no outstanding borrowings under the previous credit facility and had $296.8 million of availability, net of $3.2 million of outstanding letters of credit.

The interest rate for each credit facility as of July 1, 2025 and June 25, 2024 was 5.42% and 6.21%, respectively.

The lenders’ obligation to extend credit pursuant to the credit facility depends on us maintaining certain financial covenants, including a minimum consolidated fixed charge coverage ratio and a maximum consolidated leverage ratio. The credit facility permits us to incur additional secured or unsecured indebtedness, except for the incurrence of secured indebtedness that in the aggregate is equal to or greater than $125.0 million and 20% of our consolidated tangible net worth. We were in compliance with all financial covenants as of July 1, 2025.

Guarantees

As of July 1, 2025 and December 31, 2024, we were contingently liable for $8.9 million and $9.4 million, respectively, for seven lease guarantees. These amounts represent the maximum potential liability of future payments under the guarantees. In the event of default, the indemnity and default clauses in our assignment agreements govern our ability to pursue and recover damages incurred. No material liabilities have been recorded as of July 1, 2025 and December 31, 2024 as the likelihood of default was deemed to be less than probable and the fair value of the guarantees is not considered significant.

Information regarding market risk appears in our Annual Report on Form 10-K for the year ended December 31, 2024 in Part II, Item 7A, Quantitative and Qualitative Disclosures About Market Risk. There have been no material changes in market risk previously disclosed in our Form 10-K for the fiscal year ended December 31, 2024.

Evaluation of Disclosure Controls and Procedures

We have evaluated the effectiveness of the design and operation of our disclosure controls and procedures pursuant to, and as defined in, Rules 13a-15(e) and 15d-15(e) under the Exchange Act as of the end of the period covered by this report. Based on the evaluation, performed under the supervision and with the participation of our management, including the Chief Executive Officer (the "CEO") and the Chief Financial Officer (the "CFO"), our management, including the CEO and CFO, concluded that our disclosure controls and procedures were effective as of July 1, 2025.

Changes in Internal Control

There were no changes in the Company’s internal control over financial reporting that occurred during the 13 weeks ended July 1, 2025 that materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

Information regarding risk factors appears in our Annual Report on Form 10-K for the year ended December 31, 2024, under the heading "Special Note Regarding Forward-looking Statements" and in the Form 10-K Part I, Item 1A, Risk Factors. There have been no material changes from the risk factors previously disclosed in our Form 10-K for the fiscal year ended December 31, 2024.