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BRINKER INTERNATIONAL, INC

BRINKER INTERNATIONAL, INCEATEarnings & Financial Report

NYSE · Consumer Discretionary · Retail-Eating Places

Brinker International, Inc. is an American multinational hospitality industry company that owns Chili's and Maggiano's Little Italy restaurant chains. Founded in 1975 and based in Dallas, Texas, Brinker currently owns, operates, or franchises 1,672 restaurants under the names Chili's Grill & Bar and Maggiano's Little Italy worldwide.

What changed in BRINKER INTERNATIONAL, INC's 10-K — 2024 vs 2025

Top changes in BRINKER INTERNATIONAL, INC's 2025 10-K

183 paragraphs added · 193 removed · 159 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

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The Company was organized under the laws of the State of Delaware in 1983 to succeed to the business operated by Chili’s, Inc., a Texas corporation, which was organized in 1977. We completed the acquisition of Maggiano’s in 1995. 3 Table of Contents References to “fiscal” or “fiscal year” are to the fiscal year ended of the applicable year.
The Company was organized under the laws of the State of Delaware in 1983 to 3 Table of Contents succeed to the business operated by Chili’s, Inc., a Texas corporation, which was organized in 1977. We completed the acquisition of Maggiano’s in 1995. References to “fiscal” or “fiscal year” are to the fiscal year ended of the applicable year.
Our domestic expansion efforts focus not only on major metropolitan areas in the United States but also on smaller market areas and partnerships with franchisees to enter non-traditional locations (such as airports) that can adequately support our restaurant brands.
Our domestic expansion efforts focus not only on major metropolitan areas in the United States but also in smaller market areas and partnerships with franchisees to enter non-traditional locations (such as airports) that can adequately support our restaurant brands.
Our servers use handheld tablets to place orders for our guests, increasing the efficiency of our team members and allowing orders to reach our kitchen quicker for better service to our guests. Maggiano’s Little Italy At Maggiano’s, we are focused making our guests feel special.
Our servers use handheld tablets to place orders for our guests, increasing the efficiency of our team members and allowing orders to reach our kitchen quicker for better service to our guests. Maggiano’s Little Italy At Maggiano’s, we are focused on making our guests feel special.
Our restaurant operators utilize our back office systems for inventory control, curbside management, forecasting, demand preparation and productivity. Our service desk supports the needs of both our restaurant support center and each of our restaurants. Our data centers are geographically dispersed, which helps support continuity of our operations and systems.
Our restaurant operators utilize our back office systems for inventory control, forecasting, demand preparation, and productivity. Our service desk supports the needs of both our restaurant support center and each of our restaurants. Our data centers are geographically dispersed, which helps support continuity of our operations and systems.
These requirements are intended to ensure high-quality products are served in each of our restaurants. We strategically negotiate directly with major suppliers to obtain competitive prices. We also use purchase commitment contracts when appropriate to stabilize the potentially volatile pricing associated with certain commodity items. All essential products are available from pre-qualified distributors to be delivered to our restaurant brands.
These requirements are intended to promote serving high-quality products in each of our restaurants. We strategically negotiate directly with major suppliers to obtain competitive prices. We also use purchase commitment contracts when appropriate to stabilize the potentially volatile pricing associated with certain commodity items. All essential products are available from pre-qualified distributors to be delivered to our restaurant brands.
Supply Chain and Quality Assurance Our ability to maintain consistent quality and continuity of supply throughout each restaurant brand depends upon acquiring products from reliable sources. Our approved suppliers and our restaurants are required to adhere to strict product and safety specifications established through our quality assurance and culinary programs.
Supply Chain and Quality Assurance Our ability to maintain consistent quality and continuity of supply throughout each restaurant brand depends upon acquiring products from reliable sources. Our approved suppliers and our restaurants are required to adhere to strict 7 Table of Contents product and safety specifications established through our quality assurance and culinary programs.
Information Technology We pride ourselves on being innovators in our field, striving to create and procure cutting edge technology to improve the guest experience and create operational efficiencies. We have created and implemented technologies to facilitate a contactless guest experience through apps, tabletop and handheld devices and QR code payment.
Information Technology We pride ourselves on being innovators in our field, striving to create and procure cutting edge technology to improve the guest experience and create operational efficiencies. We have created and implemented technologies to facilitate a contactless guest experience through apps and tabletop and handheld devices.
Chili’s has been operating restaurants for over 49 years and enjoys a global presence with restaurants in the United States, 27 other countries and two United States territories.
Chili’s has been operating restaurants for over 50 years and enjoys a global presence with restaurants in the United States, 27 other countries and two United States territories.
Domestic Franchises As of June 26, 2024, no active domestic development arrangements existed. Similar to our international agreements, a typical domestic franchise agreement provides for initial franchise fees revenues in addition to subsequent royalty and advertising fee revenues based on the gross sales of each restaurant. We remain committed to supporting the growth of our franchisees in existing territories.
Domestic Franchises As of June 25, 2025, no active domestic development arrangements existed. Similar to our international agreements, a typical domestic franchise agreement provides for initial franchise fees revenues in addition to subsequent royalty and advertising fee revenues based on the gross sales of each restaurant. We remain committed to supporting the growth of our franchisees in existing territories.
Routine restaurant visits by Regional Management and brand and executive leadership enforce strict adherence to our overall brand standards and operating procedures and also create an opportunity to capture and act on feedback so we continue to improve. Each brand is responsible for maintaining their operational training 7 Table of Contents program.
Routine restaurant visits by Regional Management and brand and executive leadership enforce strict adherence to our overall brand standards and operating procedures and also create an opportunity to capture and act on feedback so we continue to improve. Each brand is responsible for maintaining their operational training program.
The following table illustrates the franchise-operated restaurants opened during fiscal 2024 and the projected openings for fiscal 2025. The fiscal 2025 projected openings remain subject to change.
The following table illustrates the franchise-operated restaurants opened during fiscal 2025 and the projected openings for fiscal 2026. The fiscal 2026 projected openings remain subject to change.
For example, fiscal 2024 refers to the fiscal year ended June 26, 2024. Restaurant Brands Chili’s Grill & Bar Chili’s is a recognized leader in the casual dining industry and the flagship brand of Dallas-based Brinker International, Inc.
For example, fiscal 2025 refers to the fiscal year ended June 25, 2025. Restaurant Brands Chili’s Grill & Bar Chili’s is a recognized leader in the casual dining industry and the flagship brand of Dallas-based Brinker International, Inc.
The following table illustrates the Company-owned restaurants opened during fiscal 2024 and the projected openings for fiscal 2025. The fiscal 2025 projected openings remain subject to change: Fiscal 2024 Fiscal 2025 Fiscal Year Openings Projected Openings Chili’s domestic 9 7 We periodically evaluate the financial performance of Company-owned restaurants to assess whether performance has fallen below our minimum standards.
The following table illustrates the Company-owned restaurants opened during fiscal 2025 and the projected openings for fiscal 2026. The fiscal 2026 projections remain subject to change: Fiscal 2025 Fiscal 2026 Fiscal Year Openings Projected Openings Chili’s domestic 5 7 We periodically evaluate the financial performance of Company-owned restaurants to assess whether performance has fallen below our minimum standards.
Our Board’s Governance and Nominating Committee oversees and provides input on the sustainability strategic framework, 8 Table of Contents goals and initiatives, as well as reviews ESG metrics and results. For more information, please review our Sustainability report on our Sustainability page on our website at www.brinker.com .
Our Board’s Governance and Nominating Committee oversees and provides input on the sustainability strategic framework, goals and initiatives, as well as reviews sustainability metrics and results. For more information, please review our Sustainability report on our Sustainability page on our website at www.brinker.com .
Restaurant Management Our Chili’s and Maggiano’s brands have separate designated teams who support each brand, including operations, finance, marketing, human resources and culinary. We believe these strategic, brand-focused teams foster the identities of the individual and uniquely positioned brands.
Restaurant Management Our Chili’s and Maggiano’s brands have separate designated teams who support each brand, including operations, brand recruiting, finance, marketing, culinary innovation and franchise . We believe these strategic, brand-focused teams foster the identities of the individual and uniquely positioned brands.
Whether domestic, international, or franchised, Chili’s is dedicated to delivering delicious food & drink with value-centric offerings such as “3 for Me ® ” starting at only $10.99, as well as dining experiences in a vibrant atmosphere intended to make everyone feel special.
Whether domestic or international, or franchised, Chili’s is dedicated to delivering delicious and craveable food with value-centric offerings such as “3 for Me” starting at only $10.99, as well as dining experiences in a vibrant atmosphere intended to make everyone feel special.
Code of Conduct - Making People Feel Special, Brinker Reporting and Whistleblower Policy, Foreign Corrupt Practices Act and Anti-Corruption Policy, Policy Governing the Improper Use of Material Nonpublic Information and Trading in Brinker’s 10 Table of Contents Securities, Code of Conduct for the Board of Directors, Supplier Code of Conduct, Policy Regarding Shareholder Meetings, and Human Rights Policy.
Code of Conduct - Making People Feel Special, Brinker Reporting and Whistleblower Policy, Foreign Corrupt Practices Act and Anti-Corruption Policy, Policy Governing the Improper Use of Material Nonpublic Information and Trading in Brinker’s Securities, Supplier Code of Conduct, Policy Regarding Shareholder Meetings, and Human Rights Policy.
In fiscal 2024, we have continued various advertising campaigns in several platforms that highlights our different value offerings. Our domestic Chili’s franchise agreements generally require advertising contributions to us by the franchisees.
In fiscal 2024 and fiscal 2025, we have continued various advertising campaigns on several platforms that highlight our different value offerings. Our domestic Chili’s franchise agreements generally require advertising contributions to us by the franchisees.
These young families represent a significant percentage of our guest base today and, we believe, will only grow in importance in the years ahead. In order to reach that market we updated our strategy in fiscal 2023 to include significant investments in television, streaming, digital video and social media.
These two cohorts represent a significant percentage of our guest base today and, we believe, will only grow in importance in the years ahead. In order to reach these audiences, we updated our strategy in fiscal 2023 to include significant investments in television, streaming, digital video and social media.
We believe our focus on these four core equities, simplifying our menu, being intentional about our fun laid-back Chilihead culture, and maintaining our strong Chilihead hospitality allow Chili’s to differentiate its high-quality food and service from other casual dining restaurants. In fiscal 2024, entrée selections at our Company-owned restaurants ranged in average menu price from $10.19 to $24.06.
We believe our focus on these five core equities, simplifying our menu, being intentional about our fun laid-back Chilihead culture, and maintaining our strong Chilihead hospitality allow Chili’s to differentiate its high-quality food and service from other casual dining restaurants. In fiscal 2025, entrée selections at our Company-owned restaurants ranged in average menu price from $10.76 to $30.26.
The specific rate at which we are able to open new restaurants is determined, in part, by our success in locating satisfactory sites, negotiating acceptable lease or purchase terms, securing appropriate local governmental permits and approvals, our capacity to supervise construction and recruit and train team members.
The specific rate at which we are able to open new restaurants is determined, in part, by our success in locating satisfactory sites, negotiating acceptable lease or purchase terms, securing appropriate local governmental permits and approvals, and our capacity to supervise construction and efficiently staff our restaurant openings.
In some cases, the brand considers relocation to a proximate, more desirable site, or evaluates closing the restaurant if the brand’s measurement criteria, such as cash flow and area demographic trends, do not support relocation.
In some cases, the brand considers relocation to a proximate, more desirable site, or evaluates closing the restaurant if the brand’s measurement criteria, such as cash flow and area demographic trends, do not support relocation. The Company plans to relocate one Maggiano's in fiscal 2026.
We believe there is a high correlation between the quality of restaurant management and the long-term success of a brand. In that regard, we encourage longer tenure at all management positions through various short and long-term incentive programs, which may include equity ownership.
The level of restaurant supervision depends upon the operating complexity and traffic of individual locations. We believe there is a high correlation between the quality of restaurant management and the long-term success of a brand. In that regard, we encourage longer tenure at all management positions through various short and long-term incentive programs, which may include equity ownership.
Fiscal 2024 Fiscal 2025 Fiscal Year Openings Projected Openings Franchise-operated restaurants Chili’s domestic — 2-4 Chili’s international 20 19-24 Maggiano’s domestic — 1 Total openings 20 22-29 6 Table of Contents The following table illustrates the percentages of domestic, international and overall franchise-operated restaurants in relation to the total Company-owned and franchise operated restaurants as of June 26, 2024, by restaurant brand: Percentage of Franchise-Operated Restaurants Domestic (1) International (2) Overall (3) Chili’s 8 % 99 % 28 % Maggiano’s 4 % — % 4 % (1) Domestic franchise-operated restaurants as a percentage of total domestic restaurants.
Fiscal 2025 Fiscal 2026 Fiscal Year Openings Projected Openings Franchise-operated restaurants Chili’s domestic 3 2-4 Chili’s international 30 24-28 Maggiano’s domestic 1 — Total openings 34 26-32 The following table illustrates the percentages of domestic, international, and overall franchise-operated restaurants in relation to the total Company-owned and franchise-operated restaurants as of June 25, 2025, by restaurant brand: Percentage of Franchise-Operated Restaurants Domestic (1) International (2) Overall (3) Chili’s 8.2 % 99.0 % 29.4 % Maggiano’s 5.8 % — % 5.8 % (1) Domestic franchise-operated restaurants as a percentage of total domestic restaurants. 6 Table of Contents (2) International franchise-operated restaurants as a percentage of total international restaurants.
(2) International franchise-operated restaurants as a percentage of total international restaurants. (3) Franchise-operated restaurants (domestic and international) as a percentage of total system-wide restaurants. International Franchises Our international growth is driven by development agreements with new and existing franchise partners. This growth introduces Chili’s to new countries and expands the brand within our existing markets.
(3) Franchise-operated restaurants (domestic and international) as a percentage of total system-wide restaurants. International Franchises Our international growth is driven by development agreements with new and existing franchise partners. This growth introduces Chili’s to new countries and expands the brand within our existing markets. As of June 25, 2025, we have 18 active development arrangements.
To maximize efficiencies, brands continue to utilize common and shared infrastructure, including, among other services, accounting, information technology, supply chain, guest relations, legal, and restaurant development. At the restaurant level, management structure varies by brand.
To maximize efficiencies, brands continue to utilize common and shared infrastructure, including, among other services, information technology, human capital management, accounting, legal, purchasing, and restaurant development. At the restaurant level, management structure varies by brand.
Our menu features bold, Southwest inspired American favorites and Chili’s has built a reputation for big mouth burgers, full-on sizzling fajitas, crispy Chicken Crispers ® and hand-shaken margaritas.
Our menu features bold, Southwest inspired American favorites, and Chili’s has built a reputation for big mouth burgers, sizzling fajitas, crispy Chicken Crispers ® , hand-shaken margaritas, and the social-media-famous Triple Dipper.
Advertising and Marketing Chili’s primary focus for developing menu innovation and targeting our digital advertising and loyalty program direct promotions are the Generation X and Millennial families who desire quality food, good value and a service experience that allows them to connect with family and friends.
Advertising and Marketing Chili’s primary focus for developing menu innovation and targeting our digital advertising and loyalty program direct promotions are Millennial families and Gen Z – both of which desire quality food, abundant value and a service experience that allows them to connect with family and friends.
Our average annual net sales per Company-owned Chili’s restaurant during fiscal 2024 was $3.6 million, and the average revenue per meal, including alcoholic beverages, was approximately $20.28 per guest. Food and non-alcoholic beverage sales accounted for 89.7% of Chili’s Company sales in fiscal 2024 with alcoholic beverage sales accounting for the remainder.
Our average annual net sales per Company-owned Chili’s restaurant during fiscal 2025 was $4.5 million, and the average revenue per meal, including alcoholic beverages, was approximately $21.90 per guest. Food and non-alcoholic beverage sales accounted for 90.7% of Chili’s Company sales in fiscal 2025 with alcoholic beverage sales accounting for the remainder.
The contents of the Sustainability report and our website are not incorporated by reference into this Form 10-K. Human Capital Management Our employee base as of June 26, 2024, consisted of 68,852 team members, including 562 restaurant support center team members, 5,010 restaurant management team members, with the remainder being hourly team members.
The contents of the Sustainability report and our website are not incorporated by reference into this Form 10-K. Human Capital Management Our employee base as of June 25, 2025, consisted of 83,840 team members, including 667 restaurant support center team members, 5,069 restaurant management team members, with the remainder being hourly team members.
Our My Chili’s Rewards loyalty program offers free chips and salsa or a non-alcoholic beverage to members based on their visit frequency and allows us to communicate and advertise to our guests through email and text.
Our My Chili’s program offers free chips and salsa or a non-alcoholic beverage to members any time they visit our restaurants and allows us to communicate and advertise to our guests through email and text.
Sustainability Building sustainable value for all of our stakeholders has always been a key part of our business strategy. Our ability to sustainably deliver profits to shareholders is built on a foundation of investing in and caring for all of our team members, safely serving great quality food to our guests and acting responsibly in all that we do.
Our ability to sustainably deliver profits to shareholders is built on a foundation of our mission of investing in and caring for all of our team members, safely serving great quality food to our guests and acting responsibly in all that we do.
As of June 26, 2024, we have 17 active development arrangements. During fiscal 2024, we opened 20 new locations, and entered into three new development arrangements, both with existing and new franchise partners. We plan to strategically pursue expansion of Chili’s internationally in areas where we see the most growth opportunities.
During fiscal 2025, we opened 30 new locations, and we entered into two new development arrangements, both with new franchise partners. We plan to strategically pursue expansion of Chili’s internationally in areas where we see the most growth opportunities.
Maggiano’s Little Italy Maggiano’s is a full-service, national, polished casual restaurant brand offering Italian-American cuisine. With a passion for making people feel special, the brand is known for catering to special occasions and large parties. Each Maggiano’s location is uniquely designed and features open dining rooms with fresh flowers, warm carpets and soft lighting.
Maggiano’s Little Italy Maggiano’s is a full-service, national, polished casual restaurant brand offering Italian-American cuisine. With a passion for making people feel special, the brand is known for catering to special occasions and large parties.
During fiscal 2024, we permanently closed 23 Company-owned Chili’s, including one international Chili’s sold to a franchisee, that were performing below our standards or we were unable to negotiate additional lease terms for such location.
During fiscal 2025, we permanently closed 13 Company-owned Chili’s and one Company-owned Maggiano’s restaurants that were performing below our standards or we were unable to negotiate additional lease terms for such location.
We are currently investing in new enterprise resource planning (“ERP”) and human capital management to provide our restaurant management and restaurant support teams with the tools necessary to enhance our ability to record and track data, make more effective real-time decisions, and drive process efficiencies. We plan to implement these new systems over the next year.
In fiscal 2025, we implemented a new enterprise resource planning (“ERP”) system that encompasses human capital management to provide our restaurant management and restaurant support teams with the tools necessary to enhance our ability to record and track data, make more effective real-time decisions, and drive process efficiencies.
This program focuses on five areas of wellbeing: career, social, financial, physical/emotional and community. In addition to our career development programs discussed above, we provide resources and opportunities to raise millions of dollars annually for charitable causes, and we provide annual fitness reimbursements for salaried team members and free mental health counselling for those enrolled in our benefit plans.
These initiatives are focused around four key areas of wellbeing: career, financial, physical/emotional, and community. In addition to our career development programs, annual fitness reimbursements for salaried team members, 401(k) plan, and free mental health counselling for those enrolled in our benefits plans, we provide resources and opportunities to raise millions of dollars annually for charitable causes.
Each restaurant is overseen by a Director of Operations/Areas Director and Vice President of Operations/Regional Director, collectively “Regional Management”, who directly or indirectly report to our Chief Operating Officer/Chief Concept Officer. The level of restaurant supervision depends upon the operating complexity and traffic of individual locations.
Each Chili’s restaurant is overseen by a Director of Operations and Vice President of Operations, collectively “Regional Management”, who directly or indirectly report to our Chief Operating Officer. Each Maggiano’s restaurant is overseen by a Director of Operations and Regional Operations Chef, collectively “Regional Management”, who directly or indirectly report to our Vice President of Operations.
Company Development During fiscal 2024, we continued to develop our restaurant brands domestically through the opening of new Company-owned restaurants in strategically desirable markets. We concentrate on the development within certain identified markets that we believe are most likely to improve our competitive position and achieve the desired level of market share potential, profitability and return on invested capital.
We concentrate on development within certain identified markets that we believe are most likely to improve our competitive position and achieve the desired level of market share, profitability, and return on invested capital.
In addition, you may view and obtain, free of charge, at our website, copies of our corporate governance materials, including: Audit Committee Charter, Talent and Compensation Committee Charter, Governance and Nominating Committee Charter, Code of Conduct for the Board of Directors, Brinker International Inc.
The SEC also maintains a website, with the address of www.sec.gov, which contains reports, proxy and information statements, and other information filed electronically or furnished to the SEC. 9 Table of Contents In addition, you may view and obtain, free of charge, at our website, copies of our corporate governance materials, including: Corporate Governance Guidelines, Audit Committee Charter, Talent & Compensation Committee Charter, Governance & Nominating Committee Charter, Code of Conduct for the Board of Directors, Brinker International Inc.
Trademarks We have registered, among other marks, “Brinker International”, “Chili’s”, “Maggiano’s” and “It’s Just Wings” as trademarks with the United States Patent and Trademark Office. Available Information We maintain a website with the address of http://www.brinker.com.
Trademarks We have registered, among other marks, “Brinker International”, “Chili’s” and “Maggiano’s” as trademarks with the United States Patent and Trademark Office. Available Information We maintain a website with the address of http://www.brinker.com. You may obtain at our website, free of charge, copies of our reports filed with, or furnished to, SEC on Forms 10-K, 10-Q and 8-K.
Our “3 for Me” platform allows guests to enjoy a non-alcoholic drink, an appetizer and certain entrées starting at just $10.99. We believe our value offerings will continue to be an important traffic driver in the current economic circumstances and we will continue to highlight this value in our marketing efforts.
We have a flexible platform of value offerings at both lunch and dinner that we believe is compelling to our guests. Our “3 for Me” platform allows guests to enjoy a non-alcoholic drink, an appetizer and certain entrées starting at just $10.99.
Our restaurants also have banquet rooms to host large party events and we have begun to renovate these banquet rooms in certain restaurants to provide a better experience for this profitable revenue channel, particularly during the holiday season in the second and third quarters of the fiscal year.
Our restaurants also have banquet rooms, a profitable revenue channel, to host large special events, particularly during the holiday season in the second and third quarters of the fiscal year. Company Development During fiscal 2025, we continued to develop our restaurant brands domestically through the opening of new Company-owned restaurants in strategically desirable markets.
In dining rooms, we use tabletop devices with functionality for guests to pay at the table, provide guest feedback and interact with our My Chili’s Rewards ® program.
Our To-Go menu is available through the Chili’s mobile app, chilis.com, our delivery partners DoorDash, Uber Eats and Grubhub, Google Food Ordering or by calling the restaurant directly. In dining rooms, we use tabletop devices with functionality for guests to pay at the table, provide guest feedback and interact with our My Chili’s ® program.
Most locations feature designated banquet facilities and all offer catering for large parties at homes or local businesses. Our full carryout menu is also available for pick up or delivered through third-party delivery providers. Each Maggiano’s has an executive chef preparing authentic recipes from scratch ingredients. Dishes are served in abundant portions both à la carte and family style.
Each Maggiano’s location is uniquely designed and features open dining rooms with fresh flowers, warm carpets and soft lighting, and most locations feature designated banquet facilities and all offer catering for large parties at homes or local businesses. Our full carryout menu is also available for pick up or delivered through third-party delivery providers.
We believe that hiring, training, mentoring and supporting team members is the key to retention and living our culture. We strive to help our team members turn their restaurant jobs into lasting careers. We provide separate development programs for each of our new managers, managers preparing to become general managers and general managers preparing to become directors of operations.
We strive to help our team members turn their jobs into lasting careers by providing development programs for each of our new managers, managers preparing to become general managers, and general managers preparing to become directors of operations. During fiscal 2025, approximately 87% of our new general managers were promoted from our existing team members.
Our team members can make our core menu items better and more consistently because we have fewer menu items that need to be perfected. We are improving our hospitality by scheduling more team members per shift to serve our guests and by improving systems and technology that can help with our order accuracy and guest experience.
We are improving our hospitality by scheduling more team members per shift to serve our guests and by improving systems and technology that can help with our order accuracy and guest experience. Another priority is having clean and well-maintained restaurants that provide an inviting atmosphere for team members to work and guests to dine.
Business Strategy We are committed to strategies and a Company culture that we believe will grow sales, increase profits, bring back guests and engage team members. Our strategies and culture are intended to strengthen our position in casual dining and grow our core business over time.
Food and non-alcoholic beverage sales accounted for 86.9% of Maggiano’s Company sales for fiscal 2025 with alcoholic beverage sales accounting for the remainder. Business Strategy We are committed to strategies and a Company culture that we believe will grow sales, increase profits, bring back guests and engage team members.
Chili’s Our strategy is to make everyone feel special through a fun atmosphere, delicious food and drinks and our Chili’s hospitality. We are making work at Chili’s easier, more fun and more rewarding for our team members so that they are more engaged and provide a better experience for our guests.
We are making work at Chili’s easier, more fun and more rewarding for our team members so that they 4 Table of Contents are more engaged and provide a better experience for our guests. One way we have done this is by eliminating tasks that were unnecessary and did not add value to our guests.
We affectionately call them Brinkerheads, Chiliheads or Maggiano’s Teammates, and we know that when they feel their best, they provide great food and service to our guests. Our motto is “Life is Short, Work Happy” and we promote and nurture a corporate culture that promotes wellbeing, inclusion and growth.
For decades, our culture has been built on our purpose of making people feel special, and that starts with our team members. We affectionately call them Brinkerheads, Chiliheads or Maggiano’s Teammates, and we know that when they feel their best, they provide great food and service to our guests.
Sales from events at our banquet facilities made up 14.9% and 14.5% of Maggiano’s Company sales in fiscal 2024 and 2023, respectively. Food and non-alcoholic beverage sales accounted for 87.8% of Maggiano’s Company sales for fiscal 2024 with alcoholic beverage sales accounting for the remainder.
Our average annual sales per Maggiano’s restaurant in fiscal 2025 was $9.9 million and the average revenue per meal, including alcoholic beverages, was approximately $39.06 per guest. Sales from events at our banquet facilities made up 14.7% and 14.9% of Maggiano’s Company sales in fiscal 2025 and 2024, respectively.
We have increased menu pricing in other areas in light of the inflationary challenges and we have also improved menu offerings and merchandising to incentivize our guests to purchase higher priced items. In addition, Chili’s has focused on a seamless digital experience as our guests’ preferences and expectations around dining convenience have evolved in recent years.
We believe our value offerings will continue to be an important traffic driver in the current economic circumstances, and we will continue to highlight this value in our marketing efforts. We have increased menu pricing in other areas in light of the inflationary challenges, and we have also improved menu offerings to incentivize our guests to purchase higher-priced items.
Investments in our technology and off-premise options have enabled us to provide a faster, more convenient dine-in experience and to offer more To-Go and delivery options for our guests. Our To-Go menu is available through the Chili’s mobile app, chilis.com, our delivery partners DoorDash, Uber Eats and Grubhub, Google Food Ordering or by calling the restaurant directly.
In addition, Chili’s has focused on a seamless digital experience as our guests’ preferences and expectations around dining convenience have evolved in recent years. Investments in our technology and off-premise options have enabled us to provide a faster, more convenient dine-in experience and to offer more To-Go and delivery options for our guests.
One way we have done this is by eliminating tasks that were unnecessary and did not add value to our guests. We have also simplified our menu to focus on core equities we believe can help grow sales—burgers, fajitas, Chicken Crispers, and margaritas, as well as other classic 4 Table of Contents favorites.
We have also simplified our menu to focus on core equities we believe can help grow sales—burgers, fajitas, Chicken Crispers, margaritas, and the Triple Dipper. Our team members can make our core menu items better and more consistently because we have fewer menu items that need to be perfected.
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We offer a full range of lunch and dinner options, complimented by a premium wine list and handcrafted cocktails. In fiscal 2024, entrée selections ranged in menu price from $13.50 to $48.99. Our average annual sales per Maggiano’s restaurant in fiscal 2024 was $9.8 million and the average revenue per meal, including alcoholic beverages, was approximately $35.65 per guest.
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Each Maggiano’s has an executive chef preparing authentic recipes from scratch ingredients. Dishes are served in abundant portions both à la carte and family style. Maggiano’s offers a full range of lunch and dinner options, complimented by a premium wine list and handcrafted cocktails. In fiscal 2025, entrée selections ranged in menu price from $15.50 to $51.00.
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Another priority is having clean and well-maintained restaurants that provide an inviting atmosphere for team members to work and guests to dine. We have a flexible platform of value offerings at both lunch and dinner that we believe is compelling to our guests.
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Our strategies and culture are intended to strengthen our position in casual dining and grow our core business over time. Chili’s Our strategy is to make everyone feel special through a fun atmosphere, delicious food and drinks, and Chilihead hospitality.
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Our It’s Just Wings ® offering is available through the website, itsjustwings.com. The operating results for this virtual brand are included in the results of our Chili’s brand, based on the restaurants that prepared and processed the food orders.
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Sustainability Building sustainable value for all of our stakeholders has always been a key part of our business strategy.
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Of our hourly team members, approximately 28% are full-time and 72% are part-time employees. As of June 26, 2024, approximately 52% of our employees are women and approximately 58% of our employees (who self-identified as a race or ethnicity) are racially or ethnically diverse. Our team members are not covered by any collective bargaining agreements.
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Of our hourly team members, approximately 15% are full-time and 85% are part-time employees. Our team members 8 Table of Contents are not covered by any collective bargaining agreements. Our executive officers have an average of more than 20 years of experience in the restaurant industry.
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Our executive officers have an average of more than 19 years of experience in the restaurant industry. Culture and Wellbeing For decades, our culture has been built on our passion for making people feel special, and that starts with our team members.
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Our motto is “Life is Short, Work Happy” and we believe that attracting, developing, and retaining the best team members is a key component to our culture. We seek to attract team members with competitive pay and benefits and then support their wellbeing by providing resources and opportunities to help them be their best with our Be Well initiatives.
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During fiscal 2024, approximately 95% of our new general managers were promoted from our existing team members. Our no-cost education program, Best You EDU ™ , provides foundational learning, ESL, citizenship preparation courses, GED, associate degree programs and other educational benefits, such as Spanish and standard tuition reimbursement.
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Our no-cost education program, Best You EDU ™ , provides GED, associate degree programs, and other educational benefits. Best You EDU is available to all team members on their first day of employment. Our Board’s Talent and Compensation Committee reviews our talent management strategies and overall organization culture.
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During fiscal 2024 this program was available to all team members on their first day of employment. Brinker cares about the health and wellbeing of all team members and provides resources and opportunities to help team members be their best, while at work and at home with their family, with our Be Well program.
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We believe that every team member should feel valued and respected and know that their work is meaningful and makes a difference in our brands and our communities. We ask the team members to take a survey either as a new hire or after termination.
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These surveys allow us to gather more in the moment and real time feedback through a new hire survey or exit survey. The goal is that these Team Members provide meaningful feedback on how they felt about their overall experience, management, training, and the culture.
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Diversity, Equity and Inclusion (“DE&I”) Our restaurants are built on the foundation of a culture of inclusion. Our team members are diverse in gender, race, ethnicity, sexual orientation, disability, religion, age, cultural background and life experiences. We celebrate the differences that make us stronger.
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We are committed to a workplace environment where every team member feels that they belong and where every team member can succeed. Our Board’s Talent and Compensation Committee provides oversight for aspects of our culture, equity, and inclusion, in addition to quarterly and annual reviews by our Board of Directors.
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We are working to strengthen the foundation of our culture of inclusion and to build greater diverse leadership at Brinker through the following programs and initiatives: 9 Table of Contents • Women Taking the Lead – Development, mentoring and resources to help professionally develop female leaders. • Leaders Leading Through Diversity – A development program to increase diverse representation among restaurant operations leadership. • DE&I Training – Online learning paths on topics such as conscious and unconscious bias, as well as additional mandatory training programs for certain operations leaders. • Communities of Interest – Six resource groups providing safe spaces for underrepresented groups and allies to develop connections, share ideas and encourage diversity of thought in the organization. • Culture of Inclusion Activation Series – Events to help educate team members about inclusion and different cultures. • TM Highlights – Opportunities for team members to share their personal stories, experiences, and what inclusion and allyship means to them. • Serving it Forward – Allowing us to go out and support, learn and impact communities to help create a better more-inclusive tomorrow partnering with non-profits that align with our giveback pillars of education, kids and hunger.
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You may obtain at our website, free of charge, copies of our reports filed with, or furnished to, the SEC on Forms 10-K, 10-Q and 8-K. The SEC also maintains a website, with the address of www.sec.gov, which contains reports, proxy and information statements, and other information filed electronically or furnished to the SEC.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Failure to protect our service marks or other intellectual property could harm our business. We regard our Chili’s ® and Maggiano’s ® service marks, and other service marks and trademarks related to our restaurant businesses, as having significant value and being important to our marketing efforts.
Failure to protect our service marks or other intellectual property could harm our business. We regard our Chili’s ® and Maggiano’s ® trademarks and other trademarks related to our restaurant businesses, as having significant value and being important to our marketing efforts.
Natural disasters such as earthquakes, hurricanes, and severe adverse weather conditions, climate change and health pandemics, whether occurring in the United States or abroad, can keep customers in the affected area from dining out, adversely affect consumer spending and confidence levels and supply availability and costs, cause damage to or closure of restaurants and result in lost opportunities for our restaurants.
Natural disasters such as earthquakes, tornadoes, hurricanes, and severe adverse weather conditions, climate change and health pandemics, whether occurring in the United States or abroad, can keep customers in the affected area from dining out, adversely affect consumer spending and confidence levels and supply availability and costs, cause damage to or closure of restaurants and result in lost opportunities for our restaurants.
These demands could require additional transparency, due diligence, and reporting and could cause us to incur additional costs or to make changes to our operations to comply with such demands. We may also determine that certain changes are required in anticipation of further evolution of consumer preferences and demands.
These demands could require additional transparency, due diligence, and reporting and could cause us to incur additional costs or to make changes to our operations to comply with such demands. We may also determine that certain changes to our business are required in anticipation of further evolution of consumer preferences and demands.
If our technology systems, or those of third-party services providers we rely upon, are compromised as a result of a cyber-attack (including whether from circumvention of security systems, denial-of-service attacks, hacking, use of artificial intelligence, “phishing” attacks, computer viruses, ransomware, malware, or social engineering) or other external or internal method, it could result in an adverse and material impact on our reputation, operations, and financial condition.
If our technology systems, or those of third-party services providers we rely upon, are compromised as a result of a cyber-attack (including whether from circumvention of security systems, denial-of-service attacks, hacking, use of artificial intelligence, “phishing” attacks, computer viruses, ransomware, malware, or social engineering) or other external or internal methods, it could result in an adverse and material impact on our reputation, operations, and financial condition.
Our inability to effectively manage supply chain risk could increase our costs or reduce revenues and limit the availability of products critical to our restaurant operations. 16 Table of Contents Information and Technology Related Risks We are exposed to risks related to cybersecurity and protection of confidential information, and failure to protect the integrity and security of payment card or individually identifiable information of our guests and teammates or confidential and proprietary information of the Company could damage our reputation and expose us to loss of revenues, increased costs and litigation.
Our inability to effectively manage supply chain risk could increase our costs or reduce revenues and limit the availability of products critical to our restaurant operations. 15 Table of Contents Information and Technology Related Risks We are exposed to risks related to cybersecurity and protection of confidential information, and failure to protect the integrity and security of payment card or individually identifiable information of our guests and teammates or confidential and proprietary information of the Company could damage our reputation and expose us to loss of revenues, increased costs and litigation.
If we were required to write down a portion of our goodwill and record related non-cash impairment charges, our financial position and results of operations would be adversely affected. 18 Table of Contents Changes to estimates related to our property and equipment, or operating results that are lower than our current estimates at certain restaurant locations, may cause us to incur impairment charges on certain long-lived assets.
If we were required to write down a portion of our goodwill and record related non-cash impairment charges, our financial position and results of operations would be adversely affected. 17 Table of Contents Changes to estimates related to our property and equipment, or operating results that are lower than our current estimates at certain restaurant locations, may cause us to incur impairment charges on certain long-lived assets.
ITEM 1A. RISK FACTORS Various risks and uncertainties could affect our business. In addition to the information contained elsewhere in this report and other filings that we make with the SEC, the risk factors described below could have a material impact on our business, financial condition, results of operation, cash flows or the trading price of our common stock.
ITEM 1A. RISK FACTORS Various risks and uncertainties could affect our business. In addition to the information contained elsewhere in this report and other filings that we make with the SEC, the risk factors described below could have a material impact on our business, financial condition, results of operations, cash flows or the trading price of our common stock.
The availability of information on social media platforms is virtually immediate as is its impact. Many social media platforms immediately publish the content their subscribers and participants post (which may include influencers with large audiences), often without filters or checks on the accuracy of the content posted. Information concerning our Company may be posted on such platforms at any time.
The availability of information on social media platforms is virtually immediate as is its impact. Many social media platforms immediately publish the content their users and participants post (which may include influencers with large audiences), often without filters or checks on the accuracy of the content posted. Information concerning our Company may be posted on such platforms at any time.
Interim goodwill impairment tests are also required when events or circumstances change between annual tests that would more likely than not reduce the fair value of our reporting units below their carrying value. We performed our annual goodwill impairment test in the second quarter of fiscal 2024 and no indicators of impairment were identified.
Interim goodwill impairment tests are also required when events or circumstances change between annual tests that would more likely than not reduce the fair value of our reporting units below their carrying value. We performed our annual goodwill impairment test in the second quarter of fiscal 2025 and no indicators of impairment were identified.
Additionally, no indicators of impairment were identified through the end of fiscal 2024. This assessment is predicated on our ability to continue to operate dining and banquet rooms and generate off-premise sales at our restaurants. We will continue to monitor and evaluate our results and evaluate the likelihood of any potential impairment charges at our reporting units.
Additionally, no indicators of impairment were identified through the end of fiscal 2025. This assessment is predicated on our ability to continue to operate dining and banquet rooms and generate off-premise sales at our restaurants. We will continue to monitor and evaluate our results and evaluate the likelihood of any potential impairment charges at our reporting units.
The restaurant industry is dependent upon consumer discretionary spending, which is negatively affected by global and domestic economic conditions, such as: fluctuations in disposable income and changes in consumer confidence, 15 Table of Contents the price of gasoline, slow or negative growth, unemployment, credit conditions and availability, volatility in financial markets, inflationary pressures, weakness in the housing market, tariffs and trade barriers, wars or conflict in certain regions, pandemics or public health concerns, and changes in government and central bank monetary policies.
The restaurant industry is dependent upon consumer discretionary spending, which is negatively affected by global and domestic economic conditions, such as: fluctuations in disposable income and changes in consumer confidence, the price of gasoline, slow or negative growth, unemployment, credit conditions and availability, volatility in financial markets, inflationary pressures, weakness in the housing market, tariffs and trade barriers, wars or conflict in certain regions, pandemics or public health concerns, and changes in government and central bank monetary policies.
However, if we are unable to fully implement our disaster recovery plans, we may experience delays in recovery of data, inability to perform vital corporate functions, loss of productivity, tardiness in required reporting and compliance, failures to adequately 17 Table of Contents support field operations and other breakdowns in normal communication and operating procedures that could have a material adverse effect on our financial condition, results of operation and exposure to administrative and other legal claims.
However, if we are unable to fully implement our disaster recovery plans, we may experience delays in recovery of data, inability to perform vital corporate functions, loss of productivity, tardiness in required reporting and compliance, failures to adequately support field operations and other breakdowns in normal communication and operating procedures that could have a 16 Table of Contents material adverse effect on our financial condition, results of operations and exposure to administrative and other legal claims.
These risks include: • Difficulties in achieving consistency of product quality and service as compared to domestic operations; 13 Table of Contents • Changes to recipes and menu offerings to meet cultural norms; • Challenges to obtain adequate and reliable supplies necessary to provide menu items and maintain food quality; and • Differences, changes or uncertainties in economic, regulatory, legal, cultural, social and political conditions.
These risks include: • Difficulties in achieving consistency of product quality and service as compared to domestic operations; • Changes to recipes and menu offerings to meet cultural norms; • Challenges to obtain adequate and reliable supplies necessary to provide menu items and maintain food quality; and • Differences, changes or uncertainties in economic, regulatory, legal, cultural, social and political conditions.
Even instances of food-borne illness, food tampering or food contamination occurring solely at restaurants of our competitors could result in negative publicity 11 Table of Contents about the restaurant industry in general and adversely affect our sales or cause us to incur additional costs to implement food safety protocols beyond industry standards.
Even instances of food-borne illness, food tampering or food contamination occurring solely at restaurants of our competitors could result in negative publicity about the restaurant industry in general and adversely affect our sales or cause us to incur additional costs to implement food safety protocols beyond industry standards.
Failure of third parties to provide adequate services could have an adverse effect on our results of operations, financial condition or ability to accomplish our financial and management reporting. ESG matters, including those related to climate change and sustainability, may have an adverse effect on our business, financial condition, and operating results and may damage our reputation.
Failure of third parties to provide adequate services could have an adverse effect on our results of operations, financial condition or ability to accomplish our financial and management reporting. Corporate responsibility matters, including those related to climate change and sustainability, may have an adverse effect on our business, financial condition, and operating results and may damage our reputation.
We are subject to various federal, state and local employment and labor laws and regulations that govern employment and labor matters, including, employment discrimination, minimum wages, work scheduling, overtime, 19 Table of Contents tip credits, tax reporting, working conditions, safety standards, employment of minors, family leave and immigration status.
We are subject to various federal, state and local employment and labor laws and regulations that govern employment and labor matters, including, employment discrimination, minimum wages, work scheduling, overtime, tip credits, tax reporting, working conditions, safety standards, employment of minors, family leave and immigration status.
We are also impacted by settlements of pending or any future adjustments proposed by taxing and governmental authorities inside and outside of the United States in connection with our tax audits, all of which will depend on their timing, nature and scope.
We are also impacted by settlements of 19 Table of Contents pending or any future adjustments proposed by taxing and governmental authorities inside and outside of the United States in connection with our tax audits, all of which will depend on their timing, nature and scope.
Our reputation and financial results may be negatively impacted by: franchisee defaults in their obligations to us; limitations on our ability to enforce franchise obligations due to bankruptcy proceedings or differences in legal remedies in international markets; franchisee failures to participate in business strategy changes due to financial constraints; franchisee failures to meet obligations to pay employees; and franchisee failures to comply with food quality and preparation requirements.
Our reputation and financial results may be negatively impacted by: franchisee defaults in their obligations to us; limitations on our ability to enforce franchise obligations due to bankruptcy proceedings or differences in legal remedies in international markets; franchisee failures to participate in business strategy changes due to financial 12 Table of Contents constraints; franchisee failures to meet obligations to pay employees; and franchisee failures to comply with food quality and preparation requirements.
If we fail to achieve any goals, targets, or objectives we may set with respect to ESG matters, if we do not meet or comply with new regulations or evolving consumer, investor, industry, or stakeholder expectations and standards (which are not uniform), including those related to reporting, or if we are perceived to have not responded appropriately to the growing concern for ESG matters, we may face legal or regulatory actions, the imposition of fines, penalties, or other sanctions, adverse publicity, decreased demand from 14 Table of Contents consumers, or a decline in the price of our common shares, any of which could materially harm our reputation or have a material adverse effect on our business, financial condition, or operating results.
If we fail to achieve any goals, targets, or objectives we may set with respect to corporate responsibility matters, if we do not meet or comply with new regulations or evolving consumer, investor, industry, or stakeholder expectations and standards (which are not uniform), including those related to reporting, or if we are perceived to have not responded appropriately to the growing concern for sustainability matters, we may face legal or regulatory actions, the imposition of fines, penalties, or other sanctions, adverse publicity, decreased demand from consumers, or a decline in the price of our common shares, any of which could materially harm our reputation or have a material adverse effect on our business, financial condition, or operating results.
Companies across all industries are facing increasing scrutiny relating to their environmental, social, and governance practices. Changing consumer preferences may result in increased demands regarding our products and supply chain and their respective environmental and social impact, including on sustainability.
Companies across all industries are facing stakeholder scrutiny relating to their sustainability practices. Changing consumer preferences may result in increased demands regarding our products and supply chain and their respective environmental and social impact, including on sustainability.
Regardless of the source or cause, any report of food-borne illnesses or other food safety issues at one of our restaurants or our franchisees’ restaurants could irreparably damage our brand reputations and result in declines in guest traffic and sales at our restaurants.
Regardless of the source or cause, any report of food-borne illnesses or other food safety issues at one of our restaurants or our franchisees’ restaurants could irreparably damage our brand reputations and result in declines in 10 Table of Contents guest traffic and sales at our restaurants.
If we are unable to quickly and effectively respond to such reports, we may suffer declines in guest traffic. The impact may be immediate without affording us an opportunity for redress or correction. These factors could have a material adverse impact on our business.
If we are unable to quickly and effectively respond to such reports, we may suffer declines in guest traffic. The 14 Table of Contents impact may be immediate without affording us an opportunity for redress or correction. These factors could have a material adverse impact on our business.
Negative publicity, local economic conditions, health epidemics or pandemics, local strikes, energy shortages or extreme fluctuations in energy prices, droughts, earthquakes, fires or other natural disasters in regions where our restaurants are highly concentrated could have a material adverse effect on our business and operations.
Negative publicity, local economic conditions, new local or state laws or regulations, health epidemics or pandemics, local strikes, energy shortages or extreme fluctuations in energy prices, droughts, earthquakes, fires or other natural disasters in regions where our restaurants are highly concentrated could have a material adverse effect on our business and operations.
As we become increasingly reliant on digital ordering and payment as a sales channel, our business could be negatively impacted if we are unable to successfully implement, execute or maintain our consumer-facing digital initiatives, such as curbside pick-up, brand websites, and application based ordering.
As we become increasingly reliant on digital ordering and payment as a sales channel, our business could be negatively impacted if we are unable to successfully implement, execute or maintain our consumer-facing digital initiatives, such as application-based ordering and brand websites, as well as a user friendly pick up experience.
Fluctuations and increases in utility and energy costs have also increased our operating expenses at regional and national levels, including through suppliers increasing prices due to higher prices for petroleum-based fuels, and as a result, putting pressure on margins.
Inflation has caused added food, labor and benefits costs and increased our operating expenses. Fluctuations and increases in utility and energy costs have also increased our operating expenses at regional and national levels, including through suppliers increasing prices due to higher prices for petroleum-based fuels, and as a result, putting pressure on margins.
The operational success of our franchise system is important to our business and future international growth. A significant percentage of system-wide restaurants are owned and operated by our franchisees.
The operational success of our franchise system is important to our business and future international growth. Approximately 29.0% of system-wide restaurants are owned and operated by our franchisees.
We have been adversely impacted by, and may continue to be adversely impacted by, ongoing macroeconomic challenges in the U.S. and other regions of the world where our franchisees operate, including recent labor, commodity, transportation and other inflationary pressures, supply chain disruptions, military conflict and impacts arising from governmental restrictions implemented in certain regions to mitigate against the pandemic.
We have been adversely impacted by, and may continue to be adversely impacted by, ongoing macroeconomic challenges in the U.S. and other regions of the world where our franchisees operate, including recent labor, commodity, transportation and other inflationary pressures, supply chain disruptions, and military conflicts.
Increased focus and activism related to ESG may also result in investors reconsidering their investment decisions as a result of their assessment of a company’s ESG practices.
Increased focus and activism related to corporate responsibility and sustainability may also result in investors reconsidering their investment decisions as a result of their or a third party’s assessment of a company’s sustainability practices.
If the third-party aggregators that we utilize for delivery cease or curtail their operations, fail to maintain sufficient a labor force to satisfy demand, materially change fees, access or visibility to our products or give greater priority or promotions on their platforms to our competitors, our business may be negatively impacted.
If the third-party aggregators that we utilize for delivery cease or curtail their operations, fail to maintain sufficient a labor force to satisfy demand, materially change fees, access or visibility to our products or give greater priority or promotions on their platforms to our competitors, our business may be negatively impacted. 11 Table of Contents Loss of key management personnel could hurt our business and limit our ability to operate and grow successfully.
Failure to recruit, train and retain high-quality restaurant management and team members may result in lower guest satisfaction and lower sales and profitability. Our restaurant-level management and team members are largely responsible for the quality of our service.
If we are unable to attract and retain sufficiently experienced and capable key management personnel, our business and financial results may suffer. Failure to recruit, train and retain high-quality restaurant management and team members may result in lower guest satisfaction and lower sales and profitability. Our restaurant-level management and team members are largely responsible for the quality of our service.
At the same time, stakeholders and regulators have increasingly expressed or pursued opposing views, legislation and investment expectations with respect to sustainability initiatives, including the enactment or proposal of "Anti-ESG" legislation or policies.
At the same time, stakeholders and regulators have 13 Table of Contents increasingly expressed or pursued opposing views, legislation and investment expectations with respect to sustainability initiatives, including the enactment or proposal of "Anti-ESG" legislation or policies, which may partially or wholly conflict with existing or future legislation, regulations or policies applicable to us.
Failure to comply with the laws and regulatory requirements of federal, state, local, and international authorities could result in, among other things, revocation of required licenses, administrative enforcement actions, fines and civil and criminal liability.
Failure to comply with the laws and regulatory requirements of federal, state, local, and international authorities could result in, among other things, revocation of required licenses, administrative enforcement actions, fines and civil and criminal liability. Compliance with these laws and regulations can be costly and can increase our exposure to litigation or governmental investigations or proceedings.
General economic conditions, including inflation and fluctuations in energy costs, may continue to increase our operating expenses. We have in the past experienced, and are currently experiencing, the impacts of economic conditions, including inflation and fluctuations in utility and energy costs. Inflation has caused added food, labor and benefits costs and increased our operating expenses.
General economic conditions, including inflation and fluctuations in energy costs, and changes in U.S. or global trade policy may continue to increase our operating expenses. We have in the past experienced, and are currently experiencing, the impacts of economic conditions, including inflation and fluctuations in utility and energy costs.
We are also subject to federal and state environmental regulations, and although these have not had a material negative effect on our operations, we cannot ensure this will not occur in the future. In particular, the United States and other foreign governments have increased focus on environmental matters such as climate change, greenhouse gases and water conservation.
We are also subject to federal and state environmental regulations, and although these have not had a material negative effect on our operations, we cannot ensure this will not occur in the future.
We are subject to income and other taxes in the United States and foreign jurisdictions, and our operations, plans and results are affected by tax and other initiatives around the world. In particular, we are affected by the impact of changes to tax laws or policy or related authoritative interpretations.
Changes in tax laws and unanticipated tax liabilities could adversely affect the taxes we pay and our profitability. We are subject to income and other taxes in the United States and foreign jurisdictions, and our operations, plans and results are affected by tax and other initiatives around the world.
Compliance with these laws and regulations can be costly, and a failure or perceived failure to comply with these laws could result in negative publicity or litigation. We have been and are under investigation for compliance periodically, and we have been and will be fined for alleged violations of these regulations.
Compliance with these laws and regulations can be costly, and a failure or perceived failure to comply with these laws could result in negative publicity or litigation.
These efforts could result in increased taxation or in future restrictions on or increases in costs associated with food and other restaurant supplies, transportation costs and utility costs, any of which could decrease our operating profits and/or necessitate future investments in our restaurant facilities and equipment to achieve compliance.
For example, regulations by the United States and other foreign governments focused on environmental matters such as climate change, greenhouse gases and water conservation could result in increased taxation or in future restrictions on or increases in costs associated with food and other restaurant supplies, transportation costs and utility costs, any of which could decrease our operating profits and/or necessitate future investments in our restaurant facilities and equipment to achieve compliance.
A high concentration of our Company-owned restaurants are located in Texas, Florida and California comprising 18.8%, 11.8% and 9.2%, respectively, as of June 26, 2024. As a result, we are particularly susceptible to adverse trends and economic conditions in those states.
The large number of Company-owned restaurants concentrated in Texas, Florida and California makes us susceptible to changes in economic and other trends in those regions. A high concentration of our Company-owned restaurants are located in Texas, Florida and California comprising 18.9%, 11.8% and 9.2%, respectively, as of June 25, 2025.
We are subject to lawsuits, administrative proceedings and claims that arise in the regular course of business or out of special circumstances.
Legal and Regulatory Risks Litigation could have a material adverse impact on our business and our financial performance. We are subject to lawsuits, administrative proceedings and claims that arise in the regular course of business or out of special circumstances.
Some states and localities have, and many others are contemplating, increases to their minimum wage and tip credit wage, and such increases can have a significant impact on our labor costs.
We have been and are under investigation for compliance periodically, and we have been and will be fined for alleged violations of these regulations. 18 Table of Contents Some states and localities have, and many others are contemplating, increases to their minimum wage and tip credit wage, and such increases can have a significant impact on our labor costs.
As operating expenses rise, we, to the extent permitted by competition, recover costs by raising menu prices, or by implementing alternative products, processes or cost reduction procedures. We cannot ensure, however, we will be able to continue to recover some of the increases in operating expenses due to economic conditions, including inflation, in this manner.
As operating expenses rise, we, to the extent permitted by competition, recover costs by raising menu prices, or by implementing alternative products, processes or cost reduction procedures.
As with many public companies, our defenses are under attack regularly. There have been, and will be, minor intrusions from time-to-time. As a result of the incident, we have taken certain additional preventative measures to reduce cyber risks. However, we cannot provide assurance that our security frameworks and measures will be successful in preventing future significant cyber-attacks or data loss.
We regularly implement and monitor preventative measures to reduce cyber risks. However, we cannot provide assurance that our security frameworks and measures will be successful in preventing future significant cyber-attacks or data loss.
These personnel serve to maintain a corporate vision for our Company, execute our business strategy, and maintain 12 Table of Contents consistency in the operating standards of our restaurants. If we are unable to attract and retain sufficiently experienced and capable key management personnel, our business and financial results may suffer.
Our success depends, to a significant extent, on our leadership team and other key management personnel. These personnel serve to maintain a corporate vision for our Company, execute our business strategy, and maintain consistency in the operating standards of our restaurants.
As privacy and information security laws and regulations change, or cyber risks evolve pertaining to data, we may incur significant additional costs in technology, third-party services and personnel to maintain systems designed to anticipate and prevent cyber-attacks. For example, the Company experienced a cybersecurity incident at some Chili’s locations in fiscal 2018.
As privacy and information security laws and regulations change, or cyber risks evolve pertaining to data, we may incur significant additional costs in technology, third-party services and personnel to maintain systems designed to anticipate and prevent cyber-attacks. As with many public companies, our defenses are under attack regularly. There have been, and will be, minor intrusions from time-to-time.
Refer to Note 1 - Nature of Operations and Summary of Significant Accounting Policies within Part II, Item 8 - Financial Statements and Supplementary Data, Notes to Consolidated Financial Statements for more information. The projection of future cash flows used in the analyses requires the use of judgment and a number of estimates and projections of future operating results.
In fiscal 2025, we recognized $4.6 million of long-lived asset and liquor license impairment charges Refer to Note 1 - Nature of Operations and Summary of Significant Accounting Policies within Part II, Item 8 - Financial Statements and Supplementary Data, Notes to Consolidated Financial Statements for more information.
Shortages or interruptions in the availability and delivery of food and other products may increase costs or reduce revenues.
We cannot ensure we will be able to continue to recover some of the increases in operating expenses due to economic conditions, including inflation, in this manner. Shortages or interruptions in the availability and delivery of food and other products may increase costs or reduce revenues.
Our receipt of proceeds under any insurance we maintain with respect to some of these risks may be delayed or the proceeds may be insufficient to cover our losses fully. The large number of Company-owned restaurants concentrated in Texas, Florida and California makes us susceptible to changes in economic and other trends in those regions.
Our receipt of proceeds under any insurance we maintain with respect to some of these risks may be denied or delayed or the proceeds may be insufficient to cover our losses fully. Moreover, we may be unable to obtain or maintain insurance in the amounts and on terms we view as appropriate and favorable for our operations.
We make certain estimates and projections with respect to individual restaurant operations, as well as our overall performance in connection with our impairment analyses for long-lived assets. An impairment charge is required when the carrying value of the asset exceeds the estimated fair value.
In connection with our impairment analysis for long-lived assets, we may make certain estimates and projections with respect to individual restaurant future cash flows as well as overall performance. If actual results differ significantly from our estimates and projections, this could result in future impairments that, could adversely impact our results.
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Loss of key management personnel could hurt our business and limit our ability to operate and grow successfully. Our success depends, to a significant extent, on our leadership team and other key management personnel.
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As a result, we are particularly susceptible to adverse trends and economic conditions in those states, as well as to laws and regulations in these states that have a direct or indirect impact on our operations.
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For example, in fiscal 2024, we recognized $12.2 million of long-lived asset and lease asset impairment charges as a result of decreased cash flows, and it is possible that we may incur similar charges in greater amounts in the future.
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On a broader scale, shifts in U.S. trade policy and retaliatory measures by global trade partners may lead to widespread economic effects, including increased consumer prices and a reduction in discretionary income. As a result, consumer spending on non-essential categories such as dining out may decline.
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If actual results differ from our estimates, additional charges for asset impairments may be required in the future. If impairment charges are significant, our financial position and results of operations could be adversely affected. Legal and Regulatory Risks Litigation could have a material adverse impact on our business and our financial performance.
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Changes in U.S. or global trade policy, such as new or increased tariffs on certain food products or other imported goods could further elevate costs, disrupt supply availability, and constrain our ability to protect operating margins through pricing strategies or adjustments in purchasing practices.
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Compliance with these laws and regulations can be costly and can increase our exposure to litigation or governmental investigations or proceedings. 20 Table of Contents Changes in tax laws and unanticipated tax liabilities could adversely affect the taxes we pay and our profitability.
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In particular, we are affected by the impact of changes to tax laws or policy or related authoritative interpretations.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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We have established and regularly test incident response processes and controls that identify and risk-rank incidents through a centralized system to promote timely escalation of cybersecurity incidents that exceed a particular level of risk. Incidents of sufficient magnitude or severity are escalated to the appropriate Company officers. 22 Table of Contents
We have established and regularly test incident response processes and controls that identify and risk-rank incidents through a centralized system to promote timely escalation of cybersecurity incidents that exceed a particular level of risk. Incidents of sufficient magnitude or severity are escalated to the appropriate Company officers. 21 Table of Contents
We remain vigilant in staying ahead of new and emerging risks utilizing our in-house tools, and security teams review and make strategic investments in our systems to keep the Company, our guests and our team members’ data secure.
We remain vigilant in staying ahead of new and emerging risks utilizing our in-house tools, and security teams review and make strategic investments in our systems to keep the Company, our guests and our team members’ data secure. The Company’s Vice President of Information Technology and Security is responsible for developing and implementing these controls and processes.
We believe that risks from prior cybersecurity threats, including as a result of any previous cybersecurity incident, including the 2018 malware incident, have not materially affected our results of operations or financial condition, including our business strategy, for the periods covered by this Annual Report on Form 10-K, and we do not believe that such risks are reasonably likely to have such an effect over the long term.
We believe that risks from prior cybersecurity threats have not materially affected our results of operations or financial condition, including our business strategy, for the periods covered by this Annual Report on Form 10-K.
Through our internal audit function, we also perform an annual risk analysis using a risk matrix to prioritize risks based on their potential impact and likelihood. There can be no guarantee that our policies and procedures will be effective. In addition, security controls, no matter how well designed or implemented, may only mitigate and not fully eliminate risks.
We maintain a Risk Register documenting identified risks, including those from cybersecurity threats, their potential impact, and mitigation strategies. Through our internal audit function, we also perform an annual risk analysis using a risk matrix to prioritize risks based on their potential impact and likelihood. There can be no guarantee that our policies and procedures will be effective.
We require third-party vendors and service providers to complete a security questionnaire or provide a security compliance report performed by a reputable third-party to assess their risk. We maintain a Risk Register documenting identified risks, including those from cybersecurity threats, their potential impact, and mitigation strategies.
We conduct annual cybersecurity audits using a reputable third-party security auditor. A third-party conducts regular network security reviews, scans and audits. We require third-party vendors and service providers to complete a security questionnaire or provide a security compliance report performed by a reputable third-party to assess their risk.
Relevant restaurant level personnel and employees at the restaurant support center receive periodic training to bring awareness on how they can help prevent and report potential cybersecurity incidents. We also provide credit card handling training following Payment Card Industry guidelines to team members that handle guest payment information.
We subscribe to multiple feeds and associations that discuss and monitor risks of any technology compromise at our business partners where relevant. Relevant restaurant level personnel and employees at the restaurant support center receive periodic training to bring awareness on how they can help prevent and report potential cybersecurity incidents.
In addition, key stakeholders involved with our cybersecurity risk management programs receive additional training and regularly participate in scenario-based training exercises to support the effective implementation of our programs. We maintain a disaster recovery plan and protect against business interruption by backing up our major systems. We routinely scan our environment for any vulnerabilities and perform penetration testing.
We maintain a disaster recovery plan and protect against 20 Table of Contents business interruption by backing up our major systems. We routinely scan our environment for any vulnerabilities and perform penetration testing. In addition to our internal processes and controls, we engage multiple third-parties to assess the effectiveness of our data security practices, including through an annual risk assessment.
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The Company’s Vice President of Information Technology and Security is responsible for developing and implementing these controls and processes. 21 Table of Contents We subscribe to multiple feeds and associations that discuss and monitor risks of any technology compromise at our business partners where relevant.
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We also provide credit card handling training following Payment Card Industry guidelines to team members that handle guest payment information. In addition, key stakeholders involved with our cybersecurity risk management programs receive additional training and regularly participate in scenario-based training exercises to support the effective implementation of our programs.
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In addition to our internal processes and controls, we engage multiple third parties to assess the effectiveness of our data security practices, including through an annual risk assessment. We conduct annual cybersecurity audits using a reputable third-party security auditor. A third-party conducts regular network security reviews, scans and audits.
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In addition, security controls, no matter how well designed or implemented, may only mitigate and not fully eliminate risks. We describe the risks from cybersecurity threats in Item 1A - Risk Factors, “Information and Technology Related Risks”.
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See Item 1A - Risk Factors for additional discussion of our cybersecurity risks.

Item 2. Properties

Properties — owned and leased real estate

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Our leased restaurants typically have an initial lease term of 10 to 20 years, with one or more renewal terms ranging from one to 10 years. The leases typically provide for a fixed rental or a fixed rental plus percentage rentals based on sales volume.
Our leased restaurants typically have an initial lease term of 10 to 20 years, with one or more renewal terms ranging from 3 to 10 years. The leases typically provide for a fixed rental or a fixed rental plus percentage rentals based on sales volume.
We and our franchisees also have Chili’s restaurants in two United States territories, Guam and Puerto Rico, and 27 other countries: Bahrain, Canada, Chile, China, Costa Rica, the Dominican Republic, Ecuador, Egypt, Germany, Guatemala, Honduras, India, Japan, Kuwait, Lebanon, Malaysia, Mexico, Morocco, Pakistan, Peru, Philippines, Qatar, Saudi Arabia, South Korea, Sri Lanka, Taiwan, and Tunisia.
Our franchisees also operate Chili’s restaurants in two United States territories, Guam and Puerto Rico, and 27 other countries: Bahrain, Canada, Chile, China, Costa Rica, the Dominican Republic, Ecuador, Egypt, Germany, Guatemala, Honduras, India, Japan, Kuwait, Lebanon, Malaysia, Mexico, Morocco, Peru, Philippines, Qatar, Saudi Arabia, South Korea, Sri Lanka, Taiwan, Tunisia, and the United Arab Emirates.
ITEM 2. PROPERTIES Restaurant Locations As of June 26, 2024, our system of Company-owned and franchise-operated restaurants included 1,614 restaurants.
ITEM 2. PROPERTIES Restaurant Locations As of June 25, 2025, our system of Company-owned and franchise-operated restaurants included 1,628 restaurants.
Our Maggiano’s Company-owned and franchise-operated restaurants are located in 22 states and Washington, D.C. As of June 26, 2024, 1,121 of the 1,171 Company-owned restaurant locations are leased.
Our Chili’s international Company-owned restaurants are all located in Canada. Our Maggiano’s Company-owned and franchise-operated restaurants are located in 23 states and Washington, D.C. As of June 25, 2025, 1,108 of the 1,162 Company-owned restaurant locations are leased, including 765 ground leases and 343 retail leases.
The below table contains a breakdown of our portfolio of restaurants: June 26, 2024 Domestic International Total Chili’s Company-owned 1,117 4 1,121 Franchise 97 344 441 1,214 348 1,562 Maggiano’s Company-owned 50 — 50 Franchise 2 — 2 52 — 52 System-wide 1,266 348 1,614 The square footage of our Company-owned Chili’s and Maggiano’s restaurants ranges between 3,200 to 8,000 square feet and 8,200 to 23,300 square feet, respectively.
The below table contains a breakdown of our portfolio of restaurants: June 25, 2025 Domestic International Total Chili’s Company-owned 1,109 4 1,113 Franchise 99 364 463 1,208 368 1,576 Maggiano’s Company-owned 49 — 49 Franchise 3 — 3 52 — 52 System-wide 1,260 368 1,628 The square footage of our Company-owned Chili’s and Maggiano’s restaurants ranges between 3,900 to 6,600 square feet and 8,200 to 24,800 square feet, respectively.
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These leased restaurant locations can be categorized as follows: 771 ground leases (where we lease land only, but construct the building and leasehold improvements) and 350 retail leases (where we lease the land/retail space and building, but construct the leasehold improvements).
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During fiscal 2024, we sold Land related to one closed restaurant, with a book value of $1.2 million and we purchased the Land and Buildings for one restaurant that was previously leased. As of June 26, 2024, the net book value of our owned restaurant locations includes Land of $41.6 million and Buildings of $13.7 million.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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The graph is based on $100 invested as of June 26, 2019 in the Company’s common stock and each index, including the reinvestment of all dividends. The values shown below are neither indicative nor determinative of future performance.
The graph is based on $100 invested as of June 24, 2020 in the Company’s common stock and each index, including the reinvestment of all dividends. The values shown below are neither indicative nor determinative of future performance.
Brands, Inc. Share Repurchase Program Our Board of Directors approved a $300.0 million share repurchase program in August 2021. The Company repurchased 0.7 million shares of our common stock for $21.0 million in fiscal 2024.
Brands, Inc. Share Repurchase Program Our Board of Directors approved a $300.0 million share repurchase program in August 2021. The Company repurchased 1.0 million shares of our common stock for $76.0 million in fiscal 2025 and 0.7 million shares of our common stock for $21.0 million in fiscal 2024.
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information Our common stock is traded on the New York Stock Exchange (“NYSE”) under the symbol “EAT”, and as of August 16, 2024, there were 345 holders of record of our common stock.
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information Our common stock is traded on the New York Stock Exchange (“NYSE”) under the symbol “EAT”, and as of August 7, 2025, there were 311 holders of record of our common stock.
Comparison of Five Year Cumulative Total Return The graph below presents Brinker International, Inc.’s cumulative 5-Year total shareholder return on common stock relative to the cumulative total returns of the S&P 500 index and the S&P Restaurants index for the period of June 26, 2019 through June 26, 2024.
Comparison of Five Year Cumulative Total Return The graph below presents Brinker International, Inc.’s cumulative 5-Year total shareholder return on common stock relative to the cumulative total returns of the S&P 500 index and the S&P Restaurants index for the period of June 24, 2020 through June 25, 2025.
The Company did not repurchase any shares under the repurchase program in fiscal 2023, and the Company repurchased 2.3 million shares of our common stock for $96.0 million in fiscal 2022. 24 Table of Contents During the thirteen week period ended June 26, 2024, we repurchased shares as follows (in millions, except per share amounts, unless otherwise noted): Total Number of Shares Purchased (1) Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Program Approximate Dollar Value that May Yet be Purchased Under the Program (2) March 28, 2024 through May 1, 2024 0.003 $ 49.45 — $ 183.0 May 2, 2024 through May 29, 2024 — — — 183.0 May 30, 2024 through June 26, 2024 — — — $ 183.0 Total 0.003 $ 49.45 — (1) These amounts include shares purchased as part of our publicly announced programs and shares owned and tendered by team members to satisfy tax withholding obligations on the vesting of restricted share awards, which are not deducted from shares available to be purchased under publicly announced programs.
The Company did not repurchase any shares under the repurchase program in fiscal 2023. 23 Table of Contents During the thirteen week period ended June 25, 2025, we repurchased shares as follows (in millions, except per share amounts, unless otherwise noted): Total Number of Shares Purchased (1) Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Program Approximate Dollar Value that May Yet be Purchased Under the Program (2) March 27, 2025 through April 30, 2025 0.004 $ 150.42 — $ 107.0 May 1, 2025 through May 28, 2025 — — — 107.0 May 29, 2025 through June 25, 2025 0.019 173.95 — $ 107.0 Total 0.023 $ 169.91 — (1) These amounts include shares purchased as part of our publicly announced programs and shares owned and tendered by team members to satisfy tax withholding obligations on the vesting of restricted share awards, which are not deducted from shares available to be purchased under publicly announced programs.
Shares owned and tendered by team members to satisfy tax withholding obligations were purchased at the average of the high and low prices of the Company’s shares on the date of vesting. In the fourth quarter of fiscal 2024, 3,316 shares were tendered by team members at an average price of $49.45.
Unless otherwise indicated, s hares owned and tendered by team members to satisfy tax withholding obligations were purchased at the average of the high and low prices of the Company’s shares on the date of vesting. In the fourth quarter of fiscal 2025, 23,133 shares were tendered by team members at an average price of $169.91.
Fiscal 2019 Fiscal 2020 Fiscal 2021 Fiscal 2022 Fiscal 2023 Fiscal 2024 Brinker International, Inc. $ 100.00 $ 63.32 $ 166.44 $ 60.30 $ 97.41 $ 196.09 S&P 500 $ 100.00 $ 107.51 $ 151.36 $ 135.29 $ 161.80 $ 201.54 S&P Restaurants (1) $ 100.00 $ 91.10 $ 127.82 $ 116.51 $ 150.89 $ 145.24 (1) The S&P Restaurants Index is comprised of Chipotle Mexican Grill, Inc., Darden Restaurants, Inc., Domino’s Pizza Inc., McDonald’s Corp., Starbucks Corp., and Yum!
Fiscal 2020 Fiscal 2021 Fiscal 2022 Fiscal 2023 Fiscal 2024 Fiscal 2025 Brinker International, Inc. $ 100.00 $ 262.86 $ 95.24 $ 153.85 $ 309.69 $ 750.83 S&P 500 $ 100.00 $ 140.79 $ 125.85 $ 150.51 $ 187.47 $ 215.89 S&P Restaurants (1) $ 100.00 $ 140.30 $ 127.89 $ 165.63 $ 159.43 $ 185.53 (1) The S&P Restaurants Index is comprised of Chipotle Mexican Grill, Inc., Darden Restaurants, Inc., Domino’s Pizza, Inc., DoorDash, Inc., McDonald’s Corp., Starbucks Corp., and Yum!
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(2) The final amount shown is as of June 26, 2024. ITEM 6. RESERVED
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(2) Subsequent to fiscal 2025 year end, our Board of Directors authorized an additional $400.0 million under our share repurchase program, allowing for a total available authority of $507.0 million. ITEM 6. RESERVED

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Geopolitical and other macroeconomic events have led, and in the future may lead to, wage inflation, staffing challenges, product cost inflation and/ disruptions in the supply chain that impact our restaurants’ ability to obtain the products needed to support their operation.
Geopolitical and other macroeconomic events have led, and in the future may lead to, wage inflation, staffing challenges, product cost inflation and/or disruptions in the supply chain that impact our restaurants’ ability to obtain the products needed to support their operation.
Our operations have typically not required significant working capital. Substantially all of our sales are tendered in cash and cash equivalents, which are received before related trade payables for food and beverage products, supplies, labor and services become due. Changes in our cash flows from operating, investing and financing activities during fiscal 2024 compared to fiscal 2023 are outlined below.
Our operations have typically not required significant working capital. Substantially all of our sales are tendered in cash and cash equivalents, which are received before related trade payables for food and beverage products, supplies, labor and services become due. Changes in our cash flows from operating, investing and financing activities during fiscal 2025 compared to fiscal 2024 are outlined below.
Refer to Part I, Item 1 - Business of this document for additional information about our business and operational strategies. External Impacts to Our Operating Environment During the recent years, our operating results were impacted by geopolitical and other macroeconomic events, leading to higher than usual inflation on wages and food and beverage costs.
Refer to Part I, Item 1 - Business of this document for additional information about our business and operational strategies. Operating Environment During the recent years, our operating results were impacted by geopolitical and other macroeconomic events, leading to higher than usual inflation on wages and food and beverage costs.
Changing our breakage-rate assumption used to record breakage attributable to gift cards sold in fiscal 2024 by 50 basis points would result in an impact to the Consolidated Statements of Comprehensive Income of approximately $0.6 million on the current year.
Changing our breakage-rate assumption used to record breakage attributable to gift cards sold in fiscal 2025 by 50 basis points would result in an impact to the Consolidated Statements of Comprehensive Income of approximately $0.6 million on the current year.
All others are calculated as a percentage of Total revenues. 26 Table of Contents Revenues Revenues are presented in two separate captions in the Consolidated Statements of Comprehensive Income to provide more clarity around Company-owned restaurant revenues and operating expenses trends: • Company sales include revenues generated by the operation of Company-owned restaurants including food and beverage sales, net of discounts, Maggiano’s banquet service charge income, gift card breakage, delivery, digital entertainment revenues, merchandise income and are net of gift card discount costs from third-party gift card sales. • Franchise revenues include royalties, franchise advertising fees, franchise and development fees and gift card equalization.
All others are calculated as a percentage of Total revenues. 25 Table of Contents Revenues Revenues are presented in two separate captions in the Consolidated Statements of Comprehensive Income to provide more clarity around Company-owned restaurant revenues and operating expenses trends: • Company sales include revenues generated by the operation of Company-owned restaurants including food and beverage sales, net of discounts, Maggiano’s banquet service charge income, delivery, gift card breakage, digital entertainment revenues, merchandise income and are net of gift card discount costs from third-party gift card sales. • Franchise revenues include royalties, franchise advertising fees, franchise and development fees, and other service fees.
Off -Balance Sheet Arrangements We have entered into certain pre-commencement leases as disclosed in Note 6 - Leases and have obligations for guarantees on certain lease agreements and letters of credit as disclosed in Note 8 - Commitments and Contingencies included within Part II, Item 8 - Financial Statements and Supplementary Data, Notes to Consolidated Financial Statements of this Annual Report on Form 10-K.
Off -Balance Sheet Arrangements We have entered into certain pre-commencement leases as disclosed in Note 6 - Leases and have obligations for guarantees on certain lease agreements and letters of credit as disclosed in Note 8 - Commitments and Contingencies included within Part II, Item 8 - Financial Statements and Supplementary Data, Notes to Consolidated Financial Statements of this Annual Report on Form 10-K. 35 Table of Contents
The Consolidated Financial Statements are prepared in accordance with accounting principles generally accepted in the United States, and include the accounts of Brinker International, Inc. and our wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. We have a 52 or 53 week fiscal year ending on the last Wednesday in June.
The Consolidated Financial Statements are prepared in accordance with accounting principles generally accepted in the United States, and include the accounts of Brinker International, Inc. and our wholly-owned subsidiaries. All 24 Table of Contents intercompany accounts and transactions have been eliminated in consolidation. We have a 52 or 53 week fiscal year ending on the last Wednesday in June.
LIQUIDITY AND CAPITAL RESOURCES Our principal sources of liquidity are net cash provided by operating activities and borrowings if any, under our $900.0 million revolving credit facility as further discussed below. Our main requirements for liquidity are to support our working capital, capital expenditures for new and existing restaurants, obligations under our operating leases, and interest payments on our debt.
LIQUIDITY AND CAPITAL RESOURCES Our principal sources of liquidity are net cash provided by operating activities and borrowings if any, under our $1.0 billion revolving credit facility as further discussed below. Our main requirements for liquidity are to support our working capital, capital expenditures for new and existing restaurants, obligations under our operating leases, and interest payments on our debt.
Our purchase obligations primarily consist of long-term obligations for the purchase of fountain beverages, software and professional services contracts, as well as non-cancellable insurance premiums, and exclude agreements that are cancellable without significant penalty.
Our purchase obligations primarily consist of long-term obligations for software and professional services contracts, as well as non-cancellable insurance premiums, and exclude agreements that are cancellable without significant penalty.
We recognize breakage income in Franchise revenues in the Consolidated Statements of Comprehensive Income. We update our breakage rate estimate periodically and, if necessary, adjust the deferred revenues balance accordingly. If actual redemption patterns vary from our estimate, actual gift card breakage income may differ from 33 Table of Contents the amounts recorded.
We recognize breakage income in Company sales in the Consolidated Statements of Comprehensive Income. 32 Table of Contents We update our breakage rate estimate periodically and, if necessary, adjust the deferred revenues balance accordingly. If actual redemption patterns vary from our estimate, actual gift card breakage income may differ from the amounts recorded.
The following MD&A includes a discussion comparing our results in fiscal 2024 to fiscal 2023.
The following MD&A includes a discussion comparing our results in fiscal 2025 to fiscal 2024.
We utilize a 13 week accounting period for quarterly reporting purposes, 25 Table of Contents except in years containing 53 weeks when the fourth quarter contains 14 weeks. Fiscal 2024, Fiscal 2023 and Fiscal 2022 which ended on June 26, 2024, June 28, 2023 and June 29, 2022 respectively, each contained 52 weeks.
We utilize a 13 week accounting period for quarterly reporting purposes, except in years containing 53 weeks when the fourth quarter contains 14 weeks. Fiscal 2025, Fiscal 2024, and Fiscal 2023 which ended on June 25, 2025, June 26, 2024, and June 28, 2023, respectively, each contained 52 weeks.
For a discussion comparing our results from fiscal 2023 to fiscal 2022, refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the fiscal year ended June 28, 2023, filed with the SEC on August 23, 2023.
For a discussion comparing our results from fiscal 2024 to fiscal 2023, refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the fiscal year ended June 26, 2024, filed with the SEC on August 21, 2024.
As of June 26, 2024, we were in compliance with our covenants pursuant to the $900.0 million revolving credit facility and under the terms of the indentures governing our 5.000% and 8.250% notes. Refer to Note 7 - Debt within Part II, Item 8 - Financial Statements and Supplementary Data for further information about our notes and revolving credit facility.
As of June 25, 2025, we were in compliance with our covenants pursuant to the $1.0 billion revolving credit facility and under the terms of the indentures governing our 8.25% notes. Refer to Note 7 - Debt within Part II, Item 8 - Financial Statements and Supplementary Data for further information about our notes and revolving credit facility.
Our Chili’s and Maggiano’s franchisees generated sales of approximately $856.2 million and $11.8 million respectively in fiscal 2024 compared to $876.0 million and $10.6 million respectively in fiscal 2023. 27 Table of Contents The table below presents the percentage change in comparable restaurant sales and restaurant capacity for fiscal 2024 compared to fiscal 2023: Comparable Sales (1) Price Impact Mix-Shift Impact (2) Traffic Impact Restaurant Capacity (3) Company-owned 7.0 % 7.6 % 0.6 % (1.2) % (0.6) % Chili’s 7.4 % 7.4 % 0.6 % (0.6) % (0.6) % Maggiano’s 3.5 % 9.4 % 0.6 % (6.5) % (1.8) % Franchise (4) 1.2 % U.S. 7.1 % International (2.0) % Chili’s domestic (5) 7.4 % System-wide (6) 6.1 % (1) Comparable Restaurant Sales include all restaurants that have been in operation for more than 18 full months.
The table below presents the percentage change in comparable restaurant sales and restaurant capacity for fiscal 2025 compared to fiscal 2024: Comparable Sales (1) Price Impact Mix-Shift Impact (2) Traffic Impact Restaurant Capacity (3) Company-owned 22.7 % 4.8 % 4.4 % 13.5 % (1.1) % Chili’s 25.3 % 4.5 % 4.8 % 16.0 % (1.2) % Maggiano’s 1.5 % 7.8 % 1.2 % (7.5) % (0.3) % Franchise (4) 11.7 % U.S. 19.9 % International 6.8 % Chili’s domestic (5) 25.0 % System-wide (6) 21.0 % 26 Table of Contents (1) Comparable Restaurant Sales include all restaurants that have been in operation for more than 18 full months.
The following is a summary of the changes in Maggiano’s operating costs and expenses: Fiscal Years Ended Favorable (Unfavorable) Variance June 26, 2024 June 28, 2023 Dollars % of Company Sales Dollars % of Company Sales Dollars % of Company Sales Food and beverage costs $ 116.9 23.6 % $ 123.4 25.3 % $ 6.5 1.7 % Restaurant labor 158.3 32.0 % 157.0 32.3 % (1.3) 0.3 % Restaurant expenses 139.2 28.1 % 130.4 26.8 % (8.8) (1.3) % Depreciation and amortization 13.1 13.0 (0.1) General and administrative 10.2 7.8 (2.4) Other (gains) and charges 0.6 1.4 0.8 As a percentage of Company sales: • Maggiano’s Food and beverage costs were favorable 1.7%, due to 1.7% from increased menu pricing and 0.2% of favorable commodity pricing partially offset by 0.2% of unfavorable menu item mix. • Maggiano’s Restaurant labor was favorable 0.3%, due to 0.4% of sales leverage and 0.1% of lower other restaurant labor costs, partially offset by 0.2% of higher manager bonus. • Maggiano’s Restaurant expenses were unfavorable 1.3%, due to 0.8% of higher repairs and maintenance, 0.4% of higher supplies, 0.2% of higher workers’ compensation and general liability insurance, 0.2% of higher advertising, and 0.4% of higher other restaurant expenses partially offset by 0.4% of sales leverage and 0.3% of lower delivery fees and to-go supplies.
The following is a summary of the changes in Maggiano’s operating costs and expenses: Fiscal Years Ended Favorable (Unfavorable) Variance June 25, 2025 June 26, 2024 Dollars % of Company Sales Dollars % of Company Sales Dollars % of Company Sales Food and beverage costs $ 117.5 23.5 % $ 116.9 23.6 % $ (0.6) 0.1 % Restaurant labor 155.9 31.2 % 158.3 32.0 % 2.4 0.8 % Restaurant expenses 145.3 29.0 % 139.2 28.1 % (6.1) (0.9) % Depreciation and amortization 14.6 13.1 (1.5) General and administrative 9.7 10.2 0.5 Other (gains) and charges (1.8) 0.6 2.4 As a percentage of Company sales: • Maggiano’s Food and beverage costs were favorable 0.1%, due to 1.3% of favorable menu pricing partially offset by 0.8% of unfavorable commodity costs driven by dairy and poultry and 0.4% of unfavorable menu item mix. • Maggiano’s Restaurant labor was favorable 0.8%, due to 0.5% of lower hourly labor, 0.4% of lower manager bonus, 0.2% of sales leverage, and 0.1% of lower other labor expenses, partially offset by 0.4% of higher manager salaries. • Maggiano’s Restaurant expenses were unfavorable 0.9%, due to 0.5% of higher advertising, 0.3% of higher repairs and maintenance, 0.3% higher rent, and 0.1% of higher other restaurant expenses, partially offset by 0.3% of sales leverage.
RESULTS OF OPERATIONS The following table sets forth selected operating data: Fiscal Years Ended June 26, 2024 June 28, 2023 Dollars As a percentage (1) Dollars As a percentage (1) Revenues Company sales $ 4,371.1 99.0 % $ 4,093.2 99.0 % Franchise revenues 44.0 1.0 % 40.0 1.0 % Total revenues 4,415.1 100.0 % 4,133.2 100.0 % Operating costs and expenses Food and beverage costs 1,107.6 25.3 % 1,146.3 28.0 % Restaurant labor 1,467.3 33.6 % 1,389.3 34.0 % Restaurant expenses 1,212.9 27.8 % 1,097.5 26.8 % Depreciation and amortization 170.8 3.9 % 168.5 4.1 % General and administrative 183.7 4.2 % 154.5 3.7 % Other (gains) and charges 43.2 1.0 % 32.7 0.8 % Total operating costs and expenses 4,185.5 94.8 % 3,988.8 96.5 % Operating income 229.6 5.2 % 144.4 3.5 % Interest expenses 65.0 1.5 % 54.9 1.3 % Other income, net (0.3) 0.0 % (1.3) 0.0 % Income before income taxes 164.9 3.7 % 90.8 2.2 % Provision (benefit) for income taxes 9.6 0.2 % (11.8) (0.3) % Net income $ 155.3 3.5 % $ 102.6 2.5 % (1) Food and beverage costs, Restaurant labor and Restaurant expenses are calculated based on a percentage of Company sales.
RESULTS OF OPERATIONS The following table sets forth selected operating data: Fiscal Years Ended June 25, 2025 June 26, 2024 Dollars As a percentage (1) Dollars As a percentage (1) Revenues Company sales $ 5,335.3 99.1 % $ 4,371.1 99.0 % Franchise revenues 48.9 0.9 % 44.0 1.0 % Total revenues 5,384.2 100.0 % 4,415.1 100.0 % Operating costs and expenses Food and beverage costs 1,350.6 25.3 % 1,107.6 25.3 % Restaurant labor 1,717.3 32.2 % 1,467.3 33.6 % Restaurant expenses 1,333.9 25.0 % 1,212.9 27.8 % Depreciation and amortization 206.6 3.8 % 170.8 3.9 % General and administrative 222.0 4.1 % 183.7 4.2 % Other (gains) and charges 41.8 0.8 % 43.2 1.0 % Total operating costs and expenses 4,872.2 90.5 % 4,185.5 94.8 % Operating income 512.0 9.5 % 229.6 5.2 % Interest expenses 53.1 1.0 % 65.0 1.5 % Other income, net (1.1) — % (0.3) — % Income before income taxes 460.0 8.5 % 164.9 3.7 % Provision (benefit) for income taxes 76.9 1.4 % 9.6 0.2 % Net income $ 383.1 7.1 % $ 155.3 3.5 % (1) Food and beverage costs, Restaurant labor and Restaurant expenses are calculated based on a percentage of Company sales.
Our $900.0 million revolving credit facility, as amended, matures on August 18, 2026 and bears interest at a rate of SOFR plus an applicable margin of 1.60% to 2.35% and an undrawn commitment fee of 0.25% to 0.35%, both based on a function of our debt-to-cash-flow ratio.
The $1.0 billion revolving credit facility, as amended, matures on May 1, 2030 and bears interest at a rate of SOFR plus an applicable margin of 1.25% to 2.00% and an undrawn commitment fee of 0.20% to 0.30%, both based on a function of our debt-to-cash-flow ratio.
Cash Flows from Operating Activities Fiscal Years Ended Favorable (Unfavorable) Variance June 26, 2024 June 28, 2023 Net cash provided by operating activities $ 421.9 $ 256.3 $ 165.6 Net cash provided by operating activities increased due to an increase in operating income and the timing of other operational receipts and payments, partially offset by an increase in the payment of income taxes in the current year.
Cash Flows from Operating Activities Fiscal Years Ended Favorable (Unfavorable) Variance June 25, 2025 June 26, 2024 Net cash provided by operating activities $ 679.0 $ 421.9 $ 257.1 Net cash provided by operating activities increased due to an increase in operating income partially offset by an increase in payments of income taxes and the timing of other operational receipts and payments.
We continue to monitor the macro environment and will adjust our overall approach to capital allocation, including share repurchases, as events and macroeconomic trends unfolds. 35 Table of Contents Based on the current level of operations, we believe that our current cash and cash equivalents, coupled with cash generated from operations and availability under our existing revolving credit facility will be adequate to meet our capital expenditure and working capital needs for at least the next twelve months, including the repayment of current debt obligations.
Based on the current level of operations, we believe that our current cash and cash equivalents, coupled with cash generated from operations and availability under our existing revolving credit facility will be adequate to meet our capital expenditure and working capital needs for at least the next twelve months, including the repayment of current debt obligations.
Income Taxes Fiscal Years Ended June 26, 2024 June 28, 2023 Effective income tax rate 5.8 % (13.0) % The change in the effective income tax rate from fiscal 2023 to fiscal 2024 is primarily due to higher Income before income taxes and the resulting deleverage of the FICA tip tax credit, which did not change significantly in fiscal 2024 compared to fiscal 2023.
Income Taxes Fiscal Years Ended June 25, 2025 June 26, 2024 Effective income tax rate 16.7 % 5.8 % The change in the effective income tax rate from fiscal 2024 to fiscal 2025 is primarily due to higher Income before income taxes and the resulting deleverage of the FICA tip tax credit.
The following is a summary of the change in Total revenues: Total Revenues Chili’s Maggiano’s Total Revenues Fiscal year ended June 28, 2023 $ 3,646.1 $ 487.1 $ 4,133.2 Change from: Comparable restaurant sales (1) 264.2 16.4 280.6 Restaurant openings 45.8 — 45.8 Restaurant acquisitions 0.6 — 0.6 Gift card discounts 0.4 0.2 0.6 Maggiano's banquet income — 0.2 0.2 Delivery service fee income (0.5) 0.4 (0.1) Merchandise income (0.1) (0.1) (0.2) Digital entertainment revenues (0.4) — (0.4) Gift card breakage (2) (4.7) (0.7) (5.4) Restaurant closures (36.0) (7.8) (43.8) Company sales 269.3 8.6 277.9 Franchise revenues (3) 3.9 0.1 4.0 Fiscal year ended June 26, 2024 $ 3,919.3 $ 495.8 $ 4,415.1 (1) Comparable restaurant sales increased due to menu price increases and favorable menu item mix, partially offset by lower traffic.
The following is a summary of the change in Total revenues: Total Revenues Chili’s Maggiano’s Total Revenues Fiscal year ended June 26, 2024 $ 3,919.3 $ 495.8 $ 4,415.1 Change from: Comparable restaurant sales (1) 958.3 7.0 965.3 Restaurant openings 36.3 — 36.3 Maggiano's banquet income — (0.3) (0.3) Gift card breakage (1.0) (0.1) (1.1) Merchandise income 0.1 — 0.1 Digital entertainment revenues 2.1 — 2.1 Delivery service fee income 1.0 0.1 1.1 Restaurant closures (38.0) (1.3) (39.3) Company sales 958.8 5.4 964.2 Franchise revenues (2) 4.8 0.1 4.9 Fiscal year ended June 25, 2025 $ 4,882.9 $ 501.3 $ 5,384.2 (1) Comparable restaurant sales increased due to higher traffic, favorable menu item mix, and menu price increases.
Cash Flow Outlook As a result of uncertainties in the near-term macro environment, including supply chain challenges, and commodity and labor inflation, we continue to focus on cash flow generation and maintaining a solid and flexible financial position to execute our long-term strategy of investing in our business.
Cash Flow Outlook In light of an unpredictable macroeconomy, including commodity and labor inflation and supply chain disruptions, we continue to focus on cash flow generation and maintaining a solid and flexible financial position to execute our 34 Table of Contents long-term strategy of investing in our business.
Costs and Expenses The following is a summary of the changes in Costs and Expenses: Fiscal Years Ended Favorable (Unfavorable) Variance June 26, 2024 June 28, 2023 Dollars % of Company Sales Dollars % of Company Sales Dollars % of Company Sales Food and beverage costs $ 1,107.6 25.3 % $ 1,146.3 28.0 % $ 38.7 2.7 % Restaurant labor 1,467.3 33.6 % 1,389.3 34.0 % (78.0) 0.4 % Restaurant expenses 1,212.9 27.8 % 1,097.5 26.8 % (115.4) (1.0) % Depreciation and amortization 170.8 168.5 (2.3) General and administrative 183.7 154.5 (29.2) Other (gains) and charges 43.2 32.7 (10.5) Interest expenses 65.0 54.9 (10.1) Other income, net (0.3) (1.3) (1.0) As a percentage of Company sales: 28 Table of Contents • Food and beverage costs were favorable 2.7%, due to 2.1% from increased menu pricing, 0.4% of favorable commodity costs driven by lower poultry and meat costs, and 0.2% of favorable menu item mix. • Restaurant labor was favorable 0.4%, due to 1.9% of sales leverage and 0.3% of lower other restaurant labor costs, partially offset by 1.1% of higher hourly labor driven by both wage rates and staffing levels, 0.4% of increased manager salaries, and 0.3% of higher manager bonus expense. • Restaurant expenses were unfavorable 1.0%, due to 1.7% of higher advertising, 0.7% of higher repairs and maintenance, 0.2% of higher workers’ compensation and general liability insurance, and 0.5% of higher other restaurant expenses, partially offset by 1.3% of sales leverage and 0.8% of lower delivery fees and to-go supplies.
Costs and Expenses The following is a summary of the changes in Costs and Expenses: Fiscal Years Ended Favorable (Unfavorable) Variance June 25, 2025 June 26, 2024 Dollars % of Company Sales Dollars % of Company Sales Dollars % of Company Sales Food and beverage costs $ 1,350.6 25.3 % $ 1,107.6 25.3 % $ (243.0) — % Restaurant labor 1,717.3 32.2 % 1,467.3 33.6 % (250.0) 1.4 % Restaurant expenses 1,333.9 25.0 % 1,212.9 27.8 % (121.0) 2.8 % Depreciation and amortization 206.6 170.8 (35.8) General and administrative 222.0 183.7 (38.3) Other (gains) and charges 41.8 43.2 1.4 Interest expenses 53.1 65.0 11.9 Other income, net (1.1) (0.3) 0.8 As a percentage of Company sales: • Food and beverage costs were flat, due to 1.5% of favorable menu pricing, offset by 1.1% of unfavorable menu item mix and 0.4% of unfavorable commodity costs driven by poultry, meat, produce, and dairy. • Restaurant labor was favorable 1.4%, due to 4.0% of sales leverage and 0.2% of lower other labor expenses, partially offset by 2.1% of higher hourly labor driven by increased staffing levels and wage rates, 0.4% of higher manager salaries, and 0.3% of higher manager bonus. • Restaurant expenses were favorable 2.8%, due to 3.8% of sales leverage and 0.1% of lower other restaurant expenses, partially offset by 0.5% of higher repairs and maintenance, 0.4% of higher advertising, and 0.2% of higher rent. 27 Table of Contents Depreciation and amortization increased $35.8 million as follows: Depreciation and Amortization Fiscal year ended June 26, 2024 $ 170.8 Change from: Additions for existing and new restaurant assets 28.0 Finance leases (1) 11.8 Corporate assets 2.2 Retirements and fully depreciated restaurant assets (14.5) Other (2) 8.3 Fiscal year ended June 25, 2025 $ 206.6 (1) Finance lease amortization increased primarily due to new tabletop and tablet devices in our restaurants.
Chili’s Other (gains) and charges consisted of the following (for further details, refer to Note 13 - Other Gains and Charges): Fiscal Years Ended June 26, 2024 June 28, 2023 Restaurant level impairment charges $ 11.9 $ 12.1 Restaurant closure asset write-offs and charges 10.1 7.3 Litigation & claims, net 6.2 2.0 Remodel-related asset write-offs — 1.1 Severance 0.1 1.9 Gain on sale of assets, net (2.6) (3.7) Other 1.2 1.3 $ 26.9 $ 22.0 32 Table of Contents Maggiano’s Segment Fiscal Years Ended Favorable (Unfavorable) Variance June 26, 2024 June 28, 2023 Dollars % Company sales $ 495.1 $ 486.5 $ 8.6 1.8 % Franchise revenues 0.7 0.6 0.1 16.7 % Total revenues $ 495.8 $ 487.1 $ 8.7 1.8 % Maggiano’s Total revenues increased 1.8% primarily due to favorable comparable restaurant sales driven by increased menu pricing partially offset by lower traffic.
Chili’s General and administrative increased $7.6 million as follows: General and Administrative Fiscal year ended June 26, 2024 $ 42.8 Change from: Performance-based compensation 2.1 Defined contribution plan employer expenses and other benefits 1.9 Payroll expenses 1.4 Stock-based compensation 1.4 Other 0.8 Fiscal year ended June 25, 2025 $ 50.4 Chili’s Other (gains) and charges consisted of the following (for further details, refer to Note 13 - Other Gains and Charges): Fiscal Years Ended June 25, 2025 June 26, 2024 Litigation & claims, net $ 20.0 $ 6.2 Restaurant-level impairment charges 4.6 11.9 Restaurant closure asset write-offs and charges 3.6 10.1 Loss from natural disasters, net (of insurance recoveries) (3.5) (0.4) Lease modification gain, net (1.6) (0.3) Gain on sale of assets, net (0.5) (2.6) Other 1.1 2.0 $ 23.7 $ 26.9 31 Table of Contents Maggiano’s Segment Fiscal Years Ended Favorable (Unfavorable) Variance June 25, 2025 June 26, 2024 Dollars % Company sales $ 500.5 $ 495.1 $ 5.4 1.1 % Franchise revenues 0.8 0.7 0.1 14.3 % Total revenues $ 501.3 $ 495.8 $ 5.5 1.1 % Maggiano’s Total revenues increased 1.1% primarily due to favorable comparable restaurant sales driven by increased menu pricing and favorable menu item mix, partially offset by lower traffic.
Refer to the “Revenues” section above for further details about Chili’s revenues changes. 30 Table of Contents The following is a summary of the changes in Chili’s operating costs and expenses: Fiscal Years Ended Favorable (Unfavorable) Variance June 26, 2024 June 28, 2023 Dollars % of Company Sales Dollars % of Company Sales Dollars % of Company Sales Food and beverage costs $ 990.7 25.5 % $ 1,022.9 28.3 % $ 32.2 2.8 % Restaurant labor 1,309.0 33.8 % 1,232.3 34.2 % (76.7) 0.4 % Restaurant expenses 1,073.2 27.7 % 966.2 26.8 % (107.0) (0.9) % Depreciation and amortization 147.7 145.3 (2.4) General and administrative 42.8 35.5 (7.3) Other (gains) and charges 26.9 22.0 (4.9) As a percentage of Company sales: • Chili’s Food and beverage costs were favorable 2.8%, due to 2.2% from increased menu pricing, 0.4% of lower commodity costs driven by poultry and meat, and 0.2% of favorable menu item mix. • Chili’s Restaurant labor was favorable 0.4%, due to 2.2% of sales leverage and 0.3% of lower other restaurant labor costs, partially offset by 1.3% of higher restaurant hourly labor driven by both wage rates and staffing levels and 0.5% of higher manager salaries and 0.3% of higher manager bonus expenses. • Chili’s Restaurant expenses were unfavorable 0.9%, due to 2.0% of higher advertising, 0.7% of higher repairs and maintenance, 0.2% of higher workers’ compensation and general liability insurance, and 0.2% of higher other restaurant expense, partially offset by 1.4% of sales leverage and 0.8% of lower delivery fees and to-go supplies.
The following is a summary of the changes in Chili’s operating costs and expenses: Fiscal Years Ended Favorable (Unfavorable) Variance June 25, 2025 June 26, 2024 Dollars % of Company Sales Dollars % of Company Sales Dollars % of Company Sales Food and beverage costs $ 1,233.1 25.5 % $ 990.7 25.5 % $ (242.4) — % Restaurant labor 1,561.4 32.3 % 1,309.0 33.8 % (252.4) 1.5 % Restaurant expenses 1,187.8 24.6 % 1,073.2 27.7 % (114.6) 3.1 % Depreciation and amortization 182.5 147.7 (34.8) General and administrative 50.4 42.8 (7.6) Other (gains) and charges 23.7 26.9 3.2 As a percentage of Company sales: • Chili’s Food and beverage costs were flat, due to 1.5% of favorable menu pricing, offset by 1.1% of unfavorable menu item mix, and 0.4% of unfavorable commodity costs driven by higher poultry, meat, produce, and dairy. • Chili’s Restaurant labor was favorable 1.5%, due to 4.5% of sales leverage, partially offset by 2.3% of higher hourly labor driven by increased staffing levels and wage rates and 0.4% of higher manager salaries and 0.3% of higher manager bonus. • Chili’s Restaurant expenses were favorable 3.1%, due to 4.2% of sales leverage, partially offset by 0.5% of higher repairs and maintenance, 0.4% of higher advertising, and 0.2% of higher rent. 30 Table of Contents Chili’s Depreciation and amortization increased $34.8 million as follows: Depreciation and Amortization Fiscal year ended June 26, 2024 $ 147.7 Change from: Additions for new and existing restaurant assets 25.1 Finance leases (1) 11.9 Retirements and fully depreciated restaurant assets (10.6) Other (2) 8.4 Fiscal year ended June 25, 2025 $ 182.5 (1) Finance lease amortization increased primarily due to new tabletop and tablet devices in our restaurants.
Increased spend on Chili’s capital maintenance, new equipment purchases and Maggiano’s remodels were partially offset by decreased spend on Chili’s remodels and construction of new restaurants. 34 Table of Contents Cash Flows from Financing Activities Fiscal Years Ended Favorable (Unfavorable) Variance June 26, 2024 June 28, 2023 Net cash used in financing activities $ (180.2) $ (80.5) $ (99.7) Net cash used in financing activities increased primarily due to $161.3 million of net repayment activity in fiscal 2024 compared to $110.0 million of net repayment activity in fiscal 2023 on the revolving credit facility.
Cash Flows from Investing Activities Fiscal Years Ended Favorable (Unfavorable) Variance June 25, 2025 June 26, 2024 Net cash used in investing activities $ (263.4) $ (192.2) $ (71.2) Net cash used in investing activities increased primarily due to new equipment purchases and increased spend on Chili’s capital maintenance. 33 Table of Contents Cash Flows from Financing Activities Fiscal Years Ended Favorable (Unfavorable) Variance June 25, 2025 June 26, 2024 Net cash used in financing activities $ (461.3) $ (180.2) $ (281.1) Net cash used in financing activities increased primarily due to the payoff of the $350.0 million 5.00% notes and an increase in share repurchases in fiscal 2025 compared to net repayment activity on the revolving credit facility of $161.3 million in fiscal 2024.
We evaluate potential share repurchases under our plan based on several factors, including our cash position, share price, operational liquidity, proceeds from divestitures, borrowings and planned investment and financing needs. The Company repurchased 0.7 million shares of our common stock for $21.0 million in fiscal 2024. The Company did not repurchase any shares under the repurchase program in fiscal 2023.
We evaluate potential share repurchases under our plan based on several factors, including our cash position, share price, operational liquidity, proceeds from divestitures, borrowings and planned investment and financing needs.
Future Commitments and Contractual Obligations Payments due under our contractual obligations for outstanding indebtedness, leases and purchase obligations as of June 26, 2024 are as follows: Payments Due by Period Less than 1 Year 1-3 Years 3-5 Years More than 5 Years Total Long-term debt (1) $ 350.0 $ — $ — $ 350.0 $ 700.0 Interest (2) 55.6 85.8 57.8 43.3 242.5 Finance leases (3) 19.8 45.7 31.3 33.4 130.2 Operating leases (3) 180.7 332.4 267.9 917.0 1,698.0 Purchase obligations (4) 33.4 49.7 8.5 — 91.6 (1) Long-term debt consists of principal amounts owed on the 5.000% and 8.250% notes and the revolving credit facility.
Future Commitments and Contractual Obligations Payments due under our contractual obligations for outstanding indebtedness, leases and purchase obligations as of June 25, 2025 are as follows: Payments Due by Period Less than 1 Year 1-3 Years 3-5 Years More than 5 Years Total Long-term debt (1) $ — $ — $ — $ 350.0 $ 350.0 Interest (2) 28.9 57.7 57.8 14.4 158.8 Finance leases (3) 22.7 52.5 14.5 27.9 117.6 Operating leases (3) 186.1 334.1 296.3 952.4 1,768.9 Purchase obligations (4) 21.5 22.1 2.5 — 46.1 (1) Long-term debt consists of principal amounts owed on the 8.25% notes which mature on July 15, 2030.
Segment Results Chili’s Segment Fiscal Years Ended Favorable (Unfavorable) Variance June 26, 2024 June 28, 2023 Dollars % Company sales $ 3,876.0 $ 3,606.7 $ 269.3 7.5 % Franchise revenues 43.3 39.4 3.9 9.9 % Total revenues $ 3,919.3 $ 3,646.1 $ 273.2 7.5 % Chili’s Total revenues increased 7.5% primarily due to favorable comparable restaurant sales driven by increased menu pricing and favorable menu item mix, partially offset by lower traffic.
We are currently evaluating the provisions of the OBBBA to assess their potential impact on our financial position, results of operations and cash flows. 29 Table of Contents Segment Results Chili’s Segment Fiscal Years Ended Favorable (Unfavorable) Variance June 25, 2025 June 26, 2024 Dollars % Company sales $ 4,834.8 $ 3,876.0 $ 958.8 24.7 % Franchise revenues 48.1 43.3 4.8 11.1 % Total revenues $ 4,882.9 $ 3,919.3 $ 963.6 24.6 % Chili’s Total revenues increased 24.6% primarily due to favorable comparable restaurant sales driven by higher traffic, favorable menu item mix, and menu pricing.
The cumulative expense for this grant was reversed in fiscal 2023 based on forecasted business performance being well below the minimum target. 29 Table of Contents Other (gains) and charges consisted of the following (for further details refer to Note 13 - Other Gains and Charges): Fiscal Years Ended June 26, 2024 June 28, 2023 Enterprise system implementation costs $ 14.0 $ 4.7 Restaurant level impairment charges 12.3 12.1 Restaurant closure asset write-offs and charges 10.1 8.3 Litigation & claims, net 6.6 2.5 Lease contingencies 0.8 2.0 Severance 0.5 3.7 Remodel-related asset write-offs 0.5 1.1 Gain on sale of assets, net (2.7) (3.7) Other 1.1 2.0 $ 43.2 $ 32.7 Interest expenses increased $10.1 million primarily due to a higher interest rate on the 8.250% notes issued on June 27, 2023 , compared to the interest rate on the 3.875% notes which matured and were repaid on May 15, 2023, partially offset by the lower average revolver balance during fiscal 2024.
General and administrative expenses increased $38.3 million as follows: General and Administrative Fiscal year ended June 26, 2024 $ 183.7 Change from: Corporate technology initiatives (1) 8.6 Payroll expenses 7.4 Performance-based compensation 6.5 Stock-based compensation 5.4 Defined contribution plan employer expenses and other benefits 4.0 Professional fees 3.3 Other 3.1 Fiscal year ended June 25, 2025 $ 222.0 (1) Corporate technology initiatives increased primarily due to ERP system subscription costs and amortization of software implementation costs. 28 Table of Contents Other (gains) and charges consisted of the following (for further details refer to Note 13 - Other Gains and Charges): Fiscal Years Ended June 25, 2025 June 26, 2024 Litigation & claims, net (1) $ 22.4 $ 6.6 Enterprise system implementation costs 14.1 14.0 Restaurant-level impairment charges 4.6 12.3 Restaurant closure asset write-offs and charges 4.1 10.1 Severance and other benefit charges 2.4 0.5 Lease contingencies 1.7 0.8 Gain on sale of assets, net (0.5) (2.7) Loss from natural disasters, net (of insurance recoveries) (3.7) (0.4) Lease modification gain, net (5.1) (0.3) Other 1.8 2.3 $ 41.8 $ 43.2 (1) Litigation & claims, net in the current year primarily relates to legal contingencies, inclusive of certain extraordinary one-time settlements related to employment and intellectual property claims, and alcohol service-related cases.
On June 26, 2024, we had $183.0 million of authorized repurchases remaining under the share repurchase program. Dividend Program There were no dividends declared in fiscal 2024 or fiscal 2023.
Subsequent to fiscal 2025 year end, our Board of Directors authorized an additional $400.0 million under our share repurchase program, allowing for a total available authority of $507.0 million. Dividend Program There were no dividends declared in fiscal 2025 or fiscal 2024.
The $350.0 million 5.000% notes mature on October 1, 2024, and the $350.0 million 8.250% notes mature on July 15, 2030. As of June 26, 2024, there was no outstanding balance on the $900.0 million credit facility.
As of June 25, 2025, there was no outstanding balance on the $1.0 billion revolving credit facility. (2) Interest consists of remaining interest payments on the 8.25% fixed rate notes.
Additionally in fiscal 2023, proceeds from issuance of the $350.0 million 8.250% notes were partially offset by the payoff of the $300.0 million 3.875% notes. Debt On June 27, 2023, we issued $350.0 million of 8.250% senior notes due July 15, 2030 . The 2030 Notes require semi-annual interest payments in arrears, on each January 15 and July 15.
Our $350.0 million 8.25% notes mature July 15, 2030, and require semi-annual interest payments in arrears, on each January 15 and July 15. In October 2024, the $350.0 million of 5.00% senior notes matured and were repaid in full using borrowings under the revolving credit facility.
Removed
(2) Gift card breakage decreased primarily due to a change in estimate related to a higher forecasted gift card redemption rates. (3) Franchise revenues increased primarily due to higher franchise advertising fees.
Added
(2) Franchise revenues increased primarily due to higher royalties. Our Chili’s and Maggiano’s franchisees generated sales of approximately $967.4 million and $16.9 million respectively in fiscal 2025 compared to $856.2 million and $11.8 million respectively in fiscal 2024.
Removed
Depreciation and amortization increased $2.3 million as follows: Depreciation and Amortization Fiscal year ended June 28, 2023 $ 168.5 Change from: Additions for existing and new restaurant assets 26.3 Corporate assets 2.7 Finance leases (5.5) Retirements and fully depreciated restaurant assets (21.2) Fiscal year ended June 26, 2024 $ 170.8 General and administrative expenses increased $29.2 million as follows: General and Administrative Fiscal year ended June 28, 2023 $ 154.5 Change from: Performance-based compensation (1) 13.0 Stock-based compensation (2) 11.7 Payroll expenses 2.5 Corporate technology initiatives 1.8 Recruiting (1.6) Other 1.8 Fiscal year ended June 26, 2024 $ 183.7 (1) Performance-based compensation increased in fiscal 2024 due to higher business performance compared to targets in the current fiscal year.
Added
(2) Other includes accelerated depreciation of certain equipment over the remaining expected useful life as a result of management’s decision to abandon and replace the equipment.
Removed
(2) Stock-based compensation increased primarily due to an increase in expense related to the fiscal 2023 performance share grant, as business performance is expected to exceed the plan target.
Added
Interest expenses decreased $11.9 million primarily due to lower average outstanding debt balances, partially offset by higher interest on financed leased equipment.
Removed
Additionally, incremental expenses were incurred in fiscal 2024 related to the fiscal 2022 performance share grant as business performance above expectations resulted in achievement of the minimum performance target for the grant.
Added
Refer to Note 9 - Income Taxes for more information. H.R. 1., also known as the One Big Beautiful Bill Act (“OBBBA”), was enacted on July 4, 2025. The legislation includes several provisions that may impact the timing and magnitude of certain tax deductions.
Removed
Refer to Note 9 - Income Taxes for more information.
Added
Key provisions include the permanent extension of several business tax benefits originally introduced under the 2017 Tax Cuts and Jobs Act.
Removed
Chili’s Depreciation and amortization increased $2.4 million as follows: Depreciation and Amortization Fiscal year ended June 28, 2023 $ 145.3 Change from: Additions for new and existing restaurant assets 23.2 Finance leases (5.5) Retirements and fully depreciated restaurant assets (15.6) Other 0.3 Fiscal year ended June 26, 2024 $ 147.7 31 Table of Contents Chili’s General and administrative increased $7.3 million as follows: General and Administrative Fiscal year ended June 28, 2023 $ 35.5 Change from: Performance-based compensation (1) 3.6 Stock-based compensation 1.9 Defined contribution plan employer expenses and other benefits 1.7 Payroll expenses 0.8 Recruiting (1.0) Other 0.3 Fiscal year ended June 26, 2024 $ 42.8 (1) Performance-based compensation increased in fiscal 2024 due to higher business performance compared to targets in the current fiscal year.
Added
Refer to the “Revenues” section above for further details about Chili’s revenues changes.
Removed
Cash Flows from Investing Activities Fiscal Years Ended Favorable (Unfavorable) Variance June 26, 2024 June 28, 2023 Net cash used in investing activities $ (192.2) $ (174.2) $ (18.0) Net cash used in investing activities increased compared to the prior year.
Added
(2) Other includes accelerated depreciation of certain equipment over the remaining expected useful life as a result of management’s decision to abandon and replace the equipment.
Removed
As of June 26, 2024, there was $900.0 million of borrowing capacity under the revolving credit facility. On October 1, 2024, our $350.0 million of 5.000% senior notes will mature.
Added
Debt On May 1, 2025, we amended our $900.0 million revolving credit facility to increase the capacity to $1.0 billion. The Company incurred and capitalized $3.6 million of debt issuance costs associated with the revolving credit facility during fiscal 2025, which are included in Other assets in the Consolidated Balance Sheets.
Removed
As a result of our intent and ability to refinance these notes through our existing revolving credit facility, the notes are classified as long-term debt in the Consolidated Balance Sheets on June 26, 2024.
Added
As of June 25, 2025, our interest rate was 5.82% consisting of SOFR of 4.32% plus the applicable margin and spread adjustment of 1.50%. As of June 25, 2025, there were no amounts outstanding under the revolving credit facility.
Removed
(2) Interest consists of remaining interest payments on the 5.000% and 8.250% fixed rate notes totaling $196.5 million and remaining interest payments on the variable rate revolver totaling $46.0 million.
Added
As part of our share repurchase program, we repurchased 1.0 million shares of our common stock for $76.0 million in fiscal 2025 and 0.7 million shares of our common stock for $21.0 million in fiscal 2024. As of June 25, 2025, we had $107.0 million of authorized repurchases remaining under the share repurchase program.
Removed
We have assumed that there will be no outstanding balance on the revolver until October 1, 2024 when the 5.000% notes will be paid using availability under the revolver, increasing the outstanding balance to $350.0 million until the maturity date of August 18, 2026 using our variable interest rate of 6.94% as of June 26, 2024.
Added
We continue to assess the macro environment and will adjust our overall approach to capital allocation, including share repurchases, based on market conditions and trends.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

4 edited+0 added−0 removed1 unchanged
While our purchasing commitments partially mitigate the risk of such fluctuations, there is no assurance that supply and demand factors such as disease, inclement weather or recent geopolitical unrest, will not cause the prices of the commodities used in our restaurant operations to fluctuate. The aggregate impact of these and other factors contributed to cost inflation in recent years.
While our purchasing commitments partially mitigate the risk of such fluctuations, there is no assurance that supply and demand factors such as disease, inclement weather, tariffs, or recent geopolitical unrest, will not cause the prices of the commodities used in our restaurant operations to fluctuate. The aggregate impact of these and other factors contributed to cost inflation in recent years.
Additionally, if there is a time lag between the increasing commodity prices and our ability to increase menu prices or if we believe the commodity price increase to be short in duration and we choose not to pass on the cost increases, our short-term financial results could be negatively affected. 37 Table of Contents
Additionally, if there is a time lag between the increasing commodity prices and our ability to increase menu prices or if we believe the commodity price increase to be short in duration and we choose not to pass on the cost increases, our short-term financial results could be negatively affected. 36 Table of Contents
Interest Rate Risk The terms of our revolving credit facility require us to pay interest on outstanding borrowings at SOFR plus an applicable margin based on a function of our debt-to-cash-flow ratio.
Interest Rate Risk The terms of our revolving credit facility require us to pay interest on outstanding borrowings at SOFR plus an applicable margin based on a function of our debt-to-cash-flow ratio. As of June 25, 2025, there was no outstanding balance on the revolving credit facility which is our only debt instrument with a variable interest rate.
As of June 26, 2024, there were no 36 Table of Contents outstanding borrowings under the revolving credit facility which is our only debt instrument with a variable interest rate. Commodity Price Risk We purchase food and other commodities for use in our operations based on market prices established with our suppliers.
Commodity Price Risk We purchase food and other commodities for use in our operations based on market prices established with our suppliers.

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