BJs RESTAURANTS INC

Previous wording

“forward-looking” statements about our current and expected performance trends, growth plans, business goals and other matters. Words or phrases such as “believe,” “plan,” “will likely result,” “expect,” “intend,” “will continue,” “is anticipated,” “estimate,” “project,” “may,” “could,” “would,” “should,” and similar expressions are intended to identify “forward-looking” statements. These statements, and any other statements that are not historical facts, are “forward-looking” statements within the meaning of the Private Securities Litigation Reform Act of 1995, as codified in Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, as amended from time to time. The cautionary statements made in this Form 10-Q should be read as being applicable to all related “forward-looking” statements wherever they appear in this Form 10-Q. These forward-looking statements are based on information available to us as of the date any such statements are made, and we assume no obligation to update these forward-looking statements. These statements are subject to risks and uncertainties that could cause actual results to differ materially from those described in the statements. These risks and uncertainties include, but are not limited to, the risk factors described in Item 1A of our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, as updated in our Form 10-Q for the twenty-six weeks ended July 1, 2025, and in other reports filed subsequently with the SEC.

Current wording

Certain information included in this Form 10-Q and other filings with the Securities and Exchange Commission, in our press releases, in other written communications, and in oral statements made by or with the approval of one of our authorized officers may contain “forward-looking” statements about our current and expected performance trends, growth plans, business goals and other matters. Words or phrases such as “believe,” “plan,” “will likely result,” “expect,” “intend,” “will continue,” “is anticipated,” “estimate,” “project,” “may,” “could,” “would,” “should,” and similar expressions are intended to identify “forward-looking” statements. These statements, and any other statements that are not historical facts, are “forward-looking” statements within the meaning of the Private Securities Litigation Reform Act of 1995, as codified in Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, as amended from time to time. The cautionary statements made in this Form 10-Q should be read as being applicable to all related “forward-looking” statements wherever they appear in this Form 10-Q. These forward-looking statements are based on information available to us as of the date any such statements are made, and we assume no obligation to update these forward-looking statements. These statements are subject to risks and uncertainties that could cause actual results to differ materially from those described in the statements. These risks and uncertainties include, but are not limited to, the risk factors described in Item 1A of our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, as updated in our Form 10-Q for the thirty-nine weeks ended September 30, 2025, and in other reports filed subsequently with the SEC.

Previous wording

Restaurant opening expenses, which are expensed as incurred, consist of the costs of hiring and training the initial hourly work force for each new restaurant, travel, the cost of food and supplies used in training, grand opening promotional costs, the cost of the initial stock of operating supplies and other direct costs related to the opening of a restaurant, including rent during the construction and in-restaurant training period.

Current wording

Restaurant opening expenses, which are expensed as incurred, consist of the costs of hiring and training the initial hourly work force for each new restaurant, travel, the cost of food and supplies used in training, grand opening promotional costs, the cost of the initial stock of operating supplies and other direct costs related to the opening of a restaurant, including rent expense during the in-restaurant training period.

Previous wording

The following table provides, for the periods indicated, our unaudited Consolidated Statements of Operations expressed as percentages of total revenues. The results of operations for the thirteen and twenty-six weeks ended July 1, 2025 and July 2, 2024, are not necessarily indicative of the results to be expected for the full fiscal year. Percentages below may not reconcile due to rounding.

Current wording

The following table provides, for the periods indicated, our unaudited Consolidated Statements of Operations expressed as percentages of total revenues. The results of operations for the thirteen and thirty-nine weeks ended September 30, 2025 and October 1, 2024, are not necessarily indicative of the results to be expected for the full fiscal year. Percentages below may not reconcile due to rounding.

Previous wording

Revenues. Total revenues increased by $15.7 million, or 4.5%, to $365.6 million during the thirteen weeks ended July 1, 2025, from $349.9 million during the comparable thirteen-week period of 2024. The increase in revenues primarily consisted of a 2.9%, or $10.2 million, increase in comparable restaurant sales, and $5.2 million related to sales from new restaurants not yet in our comparable restaurant sales base. The increase in comparable restaurant sales was due to an increase in guest traffic of approximately 3.3%, offset by an average check decrease of approximately 0.4%, resulting from changes in daypart and channel mix, partially mitigated by menu price increases.

Current wording

Revenues. Total revenues increased by $4.5 million, or 1.4%, to $330.2 million during the thirteen weeks ended September 30, 2025, from $325.7 million during the comparable thirteen-week period of 2024. The increase in revenues primarily consisted of $4.1 million related to sales from new restaurants not yet in our comparable restaurant sales base.

Previous wording

Cost of Sales. Cost of sales increased by $2.8 million, or 1.6%, to $177.6 million during the twenty-six weeks ended July 1, 2025, from $174.8 million during the comparable twenty-six-week period of 2024. This increase was primarily to support the higher sales at restaurants in our comparable restaurant sales base as well as our new restaurants. As a percentage of revenues, cost of sales decreased to 24.9% for the current twenty-six-week period from 25.4% for the prior year comparable period. This decrease was primarily due to lower commodity costs and the effectiveness of our cost savings initiatives.

Current wording

Cost of Sales. Cost of sales decreased by $1.8 million, or 2.0%, to $84.9 million during the thirteen weeks ended September 30, 2025, from $86.7 million during the comparable thirteen-week period of 2024. This decrease was primarily due to lower poultry and produce costs. As a percentage of revenues, cost of sales decreased to 25.7% for the current thirteen-week period from 26.6% for the prior year comparable period. This decrease was primarily due to lower commodity costs and the effectiveness of improved operations and our cost savings initiatives.

Previous wording

Labor and Benefits. Labor and benefit costs for our restaurants increased by $3.1 million, or 2.4%, to $129.4 million during the thirteen weeks ended July 1, 2025, from $126.3 million during the comparable thirteen-week period of 2024. This increase was primarily due to $1.8 million related to higher management compensation, $0.8 million related to higher hourly labor, and $0.3 million related to stock-based compensation. As a percentage of revenues, labor and benefit costs decreased to 35.4% for the current thirteen-week period from 36.1% for the prior year comparable period. This decrease was primarily due to leveraging our comparable restaurant growth and improved labor efficiency driven by our cost savings initiatives. Included in labor and benefits for the thirteen weeks ended July 1, 2025 and July 2, 2024, was approximately $0.9 million and $0.5 million, or 0.2% of revenues, of stock-based compensation expense related to equity awards granted in accordance with our Gold Standard Stock Ownership Program for certain restaurant management team members.

Current wording

Labor and Benefits. Labor and benefit costs for our restaurants increased by $1.6 million, or 1.3%, to $122.3 million during the thirteen weeks ended September 30, 2025, from $120.7 million during the comparable thirteen-week period of 2024. This increase was primarily due to $1.5 million related to higher workers' compensation insurance expense. Included in labor and benefits for the thirteen weeks ended September 30, 2025 and October 1, 2024, was approximately $0.6 million and $0.7 million, respectively, or 0.2% of revenues, of stock-based compensation expense related to equity awards granted in accordance with our Gold Standard Stock Ownership Program for certain restaurant management team members. As a percentage of revenues, labor and benefit costs remained consistent at 37.1% for the current thirteen-week period and the prior year comparable period.

Previous wording

Occupancy and Operating. Occupancy and operating expenses increased by $6.8 million, or 4.3%, to $163.2 million during the twenty-six weeks ended July 1, 2025, from $156.4 million during the comparable twenty-six-week period of 2024. This was primarily due to increases of $3.4 million in marketing-related expenses, $1.4 million in utilities, $1.3 million in delivery fees, $1.2 million in repairs and maintenance, and $0.6 million in credit card processing fees, offset by decreases of $1.3 million in supplies and $0.2 million in restaurant facility expenses. As a percentage of revenues, occupancy and operating expenses increased to 22.9% for the current twenty-six-week period from 22.8% for the prior year comparable period. This increase was primarily related to our investment in increased marketing with the goal of driving incremental sales.

Current wording

Occupancy and Operating. Occupancy and operating expenses increased by $1.3 million, or 1.6%, to $81.6 million during the thirteen weeks ended September 30, 2025, from $80.3 million during the comparable thirteen-week period of 2024. This was primarily due to increases of $1.0 million in property insurance, $0.9 million in utilities, $0.4 million in marketing-related expenses, and $0.3 million in credit card processing fees, offset by decreases of $0.8 million in supplies, $0.4 million in repairs and maintenance, and $0.2 million in delivery fees. As a percentage of revenues, occupancy and operating expenses remained consistent at 24.7% for the current thirteen-week period and the prior year comparable period.

Previous wording

General and Administrative. General and administrative expenses increased by $1.1 million, or 5.6%, to $21.8 million during the thirteen weeks ended July 1, 2025, from $20.6 million during the comparable thirteen-week period of 2024. This was primarily due to increases of $0.9 million in external services, including consulting fees, $0.9 million related to personnel costs, $0.5 million related to office related expenses, $0.3 million related to our deferred compensation liability, $0.3 million related to corporate expenses, and $0.1 million related to travel expenses, offset by decreases of $1.2 million in stock-based compensation and $0.9 million in legal fees. As a percentage of revenues, general and administrative expenses remained consistent at 5.9% for the current thirteen-week period and the prior year comparable period. Included in general and administrative costs was stock-based compensation expense of approximately $1.0 million and $2.2 million, or 0.3% and 0.6% of revenues for the thirteen weeks ended July 1, 2025 and July 2, 2024, respectively. This reduction was due to equity forfeitures associated with leadership changes during the period.

Current wording

General and Administrative. General and administrative expenses increased by $1.5 million, or 7.0%, to $22.4 million during the thirteen weeks ended September 30, 2025, from $21.0 million during the comparable thirteen-week period of 2024. This was primarily due to $1.4 million in stock-based compensation. General and administrative expenses during the thirteen weeks ended October 1, 2024 included a stock-based compensation credit related to the reversal of previously awarded stock-based compensation expense in conjunction with our leadership transition. Included in general and administrative costs for the thirteen weeks ended September 30, 2025 and October 1, 2024, was approximately $1.6 million and $0.2 million, or 0.5% and 0.1% of revenues, respectively, of stock-based compensation expense. This increase was primarily due to equity forfeitures associated with leadership changes during the thirteen-week period ended October 1, 2024. As a percentage of revenues, general and administrative expenses increased to 6.8% for the current thirteen-week period from 6.4% for the prior year comp arable period.

Previous wording

Depreciation and Amortization. Depreciation and amortization increased by $0.6 million, or 3.2%, to $18.7 million during the thirteen weeks ended July 1, 2025, compared to $18.2 million during the comparable thirteen-week period of 2024. This increase was primarily related to depreciation expense related to our restaurants opened since the thirteen weeks ended July 2, 2024, coupled with depreciation related to our remodeled restaurants. As a percentage of revenues, depreciation and amortization decreased to 5.1% for the current thirteen-week period from 5.2% for the prior year comparable period.

Current wording

Depreciation and Amortization. Depreciation and amortization increased by $1.1 million, or 6.1%, to $19.3 million during the thirteen weeks ended September 30, 2025, compared to $18.2 million during the comparable thirteen-week period of 2024. This increase was primarily due to depreciation expense related to our restaurants opened since the thirteen weeks ended October 1, 2024, coupled with depreciation related to our remodeled restaurants. As a percentage of revenues, depreciation and amortization increased to 5.8% for the current thirteen-week period from 5.6% for the prior year comparable period.

Previous wording

Restaurant Opening. Restaurant opening expense decreased by $0.1 million, or 25.0%, to $0.2 million during the thirteen weeks ended July 1, 2025, compared to $0.3 million during the comparable thirteen-week period of 2024. This decrease was primarily due to the timing of openings.

Current wording

Restaurant Opening. Restaurant opening expenses were zero during the thirteen weeks ended September 30, 2025, compared to $1.1 million during the comparable thirteen-week period of 2024. This decrease was primarily due to the timing of openings.

Previous wording

Loss on Disposal and Impairment of Assets, Net. Loss on disposal and impairment of assets, net, was $0.2 million during the thirteen weeks ended July 1, 2025, and $1.9 million during the comparable thirteen-week period of 2024. For the thirteen weeks ended July 1, 2025, these costs primarily related to disposals of assets in conjunction with initiatives to keep our restaurants up to date. For the thirteen weeks ended July 2, 2024, the cost primarily related to the impairment and reduction in the carrying value of the long-lived assets related to one of our restaurants.

Current wording

Loss on Disposal and Impairment of Assets, Net. Loss on disposal and impairment of assets, net, was $0.6 million during the thirteen weeks ended September 30, 2025, compared to $0.3 million during the comparable thirteen-week period of 2024. For the thirteen weeks ended September 30, 2025 and October 1, 2024, these costs primarily related to disposals of assets in conjunction with initiatives to keep our restaurants up to date.

Previous wording

Interest Expense, Net. Interest expense, net, remained consistent at $1.3 million during the thirteen weeks ended July 1, 2025, and the comparable thirteen-week period of 2024.

Current wording

Interest Expense, Net. Interest expense, net, was $1.2 million during the thirteen weeks ended September 30, 2025, compared to $1.3 million during the comparable thirteen-week period of 2024. This decrease was primarily due to a lower weighted average interest rate year over year.

Previous wording

Other Income, Net. Other income, net, was $3.7 million of expense during the twenty-six weeks ended July 1, 2025, compared to income of $3.5 million during the comparable twenty-six-week period of 2024. This change was primarily related to an increase in income related to a payroll tax credit, compared to prior period, offset by the change in the cash surrender value of certain life insurance policies under our deferred compensation plan.

Current wording

Other Income, Net. Other income, net, was $1.2 million during the thirteen weeks ended September 30, 2025, compared to $0.8 million during the comparable thirteen-week period of 2024. This change is primarily due to gains associated with the cash surrender value of certain life insurance policies.

Previous wording

Income Tax Expense (Benefit). Our effective income tax rate for the thirteen weeks ended July 1, 2025, was an expense of 6.3% compared to a benefit of 16.4% for the comparable thirteen-week period of 2024. The effective tax rate expense and benefit, respectively, for the thirteen weeks ended July 1, 2025 and July 2, 2024, was different than the statutory rate primarily due to FICA tax tip credits.

Current wording

Income Tax (Benefit) Expense. Our effective income tax rate for the thirteen weeks ended September 30, 2025, was a benefit of 146.5% compared to a benefit of 8.2% for the comparable thirteen-week period of 2024. The effective tax rate expense and benefit, respectively, for the thirteen weeks ended September 30, 2025 and October 1, 2024, was different than the statutory rate primarily due to FICA tax tip credits.

Previous wording

Revenues. Total revenues increased by $26.3 million, or 3.8%, to $713.6 million during the twenty-six weeks ended July 1, 2025, from $687.3 million during the comparable twenty-six-week period of 2024. The increase in revenues primarily consisted of a 2.3%, or $15.9 million, increase in comparable restaurant sales and $10.7 million related to sales from new restaurants not yet in our comparable restaurant sales base, offset by $1.3 million related to closed restaurants. The increase in comparable restaurant sales was due to an increase in guest traffic of approximately 3.0%, offset by an average check decrease of approximately 0.7%, resulting from changes in daypart and channel mix, partially mitigated by menu price increases.

Current wording

Revenues. Total revenues increased by $30.8 million, or 3.0%, to $1.04 billion during the thirty-nine weeks ended September 30, 2025, from $1.01 billion during the comparable thirty-nine-week period of 2024. The increase in revenues primarily consisted of a 1.8%, or $17.7 million, increase in comparable restaurant sales and $14.8 million related to sales from new restaurants not yet in our comparable restaurant sales base, offset by $1.5 million related to closed restaurants. The increase in comparable restaurant sales was due to an increase in guest traffic of approximately 2.2%, offset by an average check decrease of approximately 0.4%, resulting from changes in daypart and channel mix, partially mitigated by menu price increases.

Previous wording

Cost of Sales. Cost of sales increased by $1.0 million, or 1.1%, to $90.8 million during the thirteen weeks ended July 1, 2025, from $89.8 million during the comparable thirteen-week period of 2024. This increase was primarily to support the higher sales at restaurants in our comparable restaurant sales base as well as our new restaurants. As a percentage of revenues, cost of sales decreased to 24.8% for the current thirteen-week period from 25.7% for the prior year comparable period. This decrease was primarily due to lower commodity costs and the effectiveness of improved operations and our cost savings initiatives.

Current wording

Cost of Sales. Cost of sales increased by $1.1 million, or 0.4%, to $262.5 million during the thirty-nine weeks ended September 30, 2025, from $261.5 million during the comparable thirty-nine-week period of 2024. This increase was primarily to support the higher sales at restaurants in our comparable restaurant sales base as well as our new restaurants. As a percentage of revenues, cost of sales decreased to 25.2% for the current thirty-nine-week period from 25.8% for the prior year comparable period. This decrease was primarily due to lower commodity costs and the effectiveness of our cost savings initiatives.

Previous wording

Labor and Benefits. Labor and benefit costs for our restaurants increased by $3.7 million, or 1.5%, to $255.0 million during the twenty-six weeks ended July 1, 2025, from $251.3 million during the comparable twenty-six-week period of 2024. This increase was primarily due to $2.3 million related to higher management compensation, $1.1 million in taxes and benefits, and $0.4 million related to higher workers’ compensation costs, offset by $0.3 million related to lower hourly labor. As a percentage of revenues, labor and benefit costs decreased to 35.7% for the current twenty-six-week period from 36.6% for the prior year comparable period. This decrease was primarily due to leveraging our comparable restaurant growth and improved labor efficiency driven by our cost savings initiatives. Included in labor and benefits for the twenty-six weeks ended July 1, 2025 and July 2, 2024, was approximately $1.3 million and $1.0 million, or 0.2% of revenues, of stock-based compensation expense related to equity awards granted in accordance with our Gold Standard Stock Ownership Program for certain restaurant management team members.

Current wording

Labor and Benefits. Labor and benefit costs for our restaurants increased by $5.3 million, or 1.4%, to $377.4 million during the thirty-nine weeks ended September 30, 2025, from $372.0 million during the comparable thirty-nine-week period of 2024. This increase was primarily due to $2.3 million related to higher management compensation, $1.9 million related to higher workers’ compensation insurance expense, and $1.5 million in taxes and benefits, offset by $0.4 million related to lower hourly labor. Included in labor and benefits for the thirty-nine weeks ended September 30, 2025 and October 1, 2024, was approximately $1.9 million and $1.8 million, respectively, or 0.2% of revenues, of stock-based compensation expense related to equity awards granted in accordance with our Gold Standard Stock Ownership Program for certain restaurant management team members. As a percentage of revenues, labor and benefit costs decreased to 36.2% for the current thirty-nine-week period from 36.7% for the prior year comparable period. This decrease was primarily due to leveraging our comparable restaurant growth and improved labor efficiency driven by our cost savings initiatives.

Previous wording

Occupancy and Operating. Occupancy and operating expenses increased by $3.7 million, or 4.7%, to $83.3 million during the thirteen weeks ended July 1, 2025, from $79.6 million during the comparable thirteen-week period of 2024. This was primarily due to increases of $2.5 million in marketing-related expenses, $0.6 million in utilities, $0.5 million in delivery fees, $0.4 million in repairs and maintenance and $0.4 million in credit card processing fees, offset by decreases of $0.5 million in supplies and $0.2 million in rent and related. As a percentage of revenues, occupancy and operating expenses increased to 22.8% for the current thirteen-week period from 22.7% for the prior year comparable period. This increase was primarily related to our investment in increased marketing with the goal of driving incremental sales.

Current wording

Occupancy and Operating. Occupancy and operating expenses increased by $8.1 million, or 3.4%, to $244.8 million during the thirty-nine weeks ended September 30, 2025, from $236.7 million during the comparable thirty-nine-week period of 2024. This was primarily due to increases of $3.8 million in marketing-related expenses, $2.3 million in utilities, $1.6 million in repairs and maintenance, and $1.5 million in rent and related expenses, offset by decreases of $2.1 million in supplies. As a percentage of revenues, occupancy and operating expenses increased to 23.5% for the current thirty-nine-week period from 23.4% for the prior year comparable period. This increase was primarily related to our investment in increased marketing with the goal of driving incremental sales.

Previous wording

General and Administrative. General and administrative expenses decreased by $0.1 million, or 0.2%, to $43.5 million during the twenty-six weeks ended July 1, 2025, from $43.6 million during the comparable twenty-six-week period of 2024. This was primarily due to decreases of $2.1 million in legal fees, and $0.5 million related to our deferred compensation liability, offset by increases of $1.7 million in external services, including consulting fees, and $0.9 million related to office expenses. As a percentage of revenues, general and administrative expenses decreased to 6.1% for the current twenty-six-week period from 6.3% for the prior year comparable period. This decrease was primarily due to our ability to leverage our fixed costs over a higher revenue base. Included in general and administrative costs was stock-based compensation expense of approximately $2.6 million and $4.2 million, or 0.4% and 0.6% of revenues for the twenty-six weeks ended July 1, 2025 and July 2, 2024, respectively. This reduction was due to equity forfeitures associated with leadership changes during the period.

Current wording

General and Administrative. General and administrative expenses increased by $1.4 million, or 2.1%, to $65.9 million during the thirty-nine weeks ended September 30, 2025, from $64.6 million during the comparable thirty-nine-week period of 2024. This was primarily due to increases of $2.0 million in external services, including consulting fees, and $1.6 million related to office expenses, offset by decreases of $2.4 million in legal fees. Included in general and administrative costs for the thirty-nine weeks ended September 30, 2025 and October 1, 2024, was approximately $4.2 million and $4.4 million, respectively, or 0.4% of revenues of stock-based compensation expense. This reduction was due to equity forfeitures associated with leadership changes during the period. As a percentage of revenues, general and administrative expenses decreased to 6.3% for the current thirty-nine-week period from 6.4% for the prior year comparable period. This decrease was primarily due to our ability to leverage our fixed costs over a higher revenue base.

Previous wording

Depreciation and Amortization. Depreciation and amortization increased by $1.0 million, or 2.7%, to $37.0 million during the twenty-six weeks ended July 1, 2025, compared to $36.0 million during the comparable twenty-six-week period of 2024. This increase was primarily related to depreciation expense related to our restaurants opened since the twenty-six weeks ended July 2, 2024, coupled with depreciation related to our remodeled restaurants. As a percentage of revenues, depreciation and amortization remained consistent at 5.2% for the current twenty-six-week period and the prior year comparable period.

Current wording

Depreciation and Amortization. Depreciation and amortization increased by $2.1 million, or 3.9%, to $56.3 million during the thirty-nine weeks ended September 30, 2025, compared to $54.2 million during the comparable thirty-nine-week period of 2024. This increase was primarily related to depreciation expense related to our restaurants opened since the thirty-nine weeks ended October 1, 2024, coupled with depreciation related to our remodeled restaurants. As a percentage of revenues, depreciation and amortization remained consistent at 5.4% for the current thirty-nine-week period and the prior year comparable period.

Previous wording

Restaurant Opening. Restaurant opening expense decreased by $0.2 million, or 25.5%, to $0.7 million during the twenty-six weeks ended July 1, 2025, compared to $0.9 million during the comparable twenty-six-week period of 2024. This decrease was primarily due to the timing of openings.

Current wording

Restaurant Opening. Restaurant opening expense decreased by $1.3 million, or 66.9%, to $0.7 million during the thirty-nine weeks ended September 30, 2025, compared to $2.0 million during the comparable thirty-nine-week period of 2024. This decrease was primarily due to the timing of openings.

Previous wording

Loss on Disposal and Impairment of Assets, Net. Loss on disposal and impairment of assets, net, was $0.4 million during the twenty-six weeks ended July 1, 2025, and $2.7 million during the comparable twenty-six-week period of 2024. For the twenty-six weeks ended July 1, 2025, these costs primarily related to disposals of assets in conjunction with initiatives to keep our restaurants up to date. For the twenty-six weeks ended July 2, 2024, the cost primarily related to the impairment and reduction in the carrying value of the long-lived assets related to one of our restaurants, coupled with the disposals of assets in conjunction with initiatives to keep our restaurants up to date.

Current wording

Loss on Disposal and Impairment of Assets, Net. Loss on disposal and impairment of assets, net, was $0.9 million during the thirty-nine weeks ended September 30, 2025, compared to $3.0 million during the comparable thirty-nine-week period of 2024. For the thirty-nine weeks ended September 30, 2025, these costs primarily related to disposals of assets in conjunction with initiatives to keep our restaurants up to date. For the thirty-nine weeks ended October 1, 2024, the cost primarily related to the impairment and reduction in the carrying value of the long-lived assets related to one of our restaurants, coupled with the disposals of assets in conjunction with initiatives to keep our restaurants up to date.

Previous wording

Interest Expense, Net. Interest expense, net, decreased by $0.2 million to $2.5 million during thet wenty-six weeks ended July 1, 2025, compared to $2.7 million during the comparable twenty-six-week period of 2024. This decrease was primarily due to a lower weighted average interest rate year over year, coupled with a lower average outstanding debt balance.

Current wording

Interest Expense, Net. Interest expense, net, decreased by $0.3 million to $3.7 million during the thirty-nine weeks ended September 30, 2025, compared to $4.0 million during the comparable thirty-nine-week period of 2024. This decrease was primarily due to a lower weighted average interest rate year over year.

Previous wording

Other Income, Net. Other income, net, was $3.8 million during the thirteen weeks ended July 1, 2025, compared to $2.8 million during the comparable thirteen-week period of 2024. This change was primarily related to an increase in income related to a payroll tax credit, compared to prior period.

Current wording

Other Income, Net. Other income, net, was $4.9 million during the thirty-nine weeks ended September 30, 2025, compared to $4.2 million during the comparable thirty-nine-week period of 2024. This change is primarily related to an increase in income related to a payroll tax credit, compared to prior period, coupled with lower net loss due to our reduced equity investment ownership.

Previous wording

Income Tax Expense (Benefit). Our effective income tax rate for the twenty-six weeks ended July 1, 2025, was an expense of 4.4% compared to a benefit of 11.7% for the comparable twenty-six-week period of 2024. The effective tax rate expense and benefit, respectively, for the twenty-six weeks ended July 1, 2025 and July 2, 2024, was different than the statutory rate primarily due to FICA tax tip credits.

Current wording

Income Tax Expense (Benefit). Our effective income tax rate for the thirty-nine weeks ended September 30, 2025, was an expense of 0.5% compared to a benefit of 15.0% for the comparable thirty-nine-week period of 2024. The effective tax rate expense and benefit, respectively, for the thirty-nine weeks ended September 30, 2025 and October 1, 2024, was different than the statutory rate primarily due to FICA tax tip credits.

Previous wording

Our capital requirements are driven by our fundamental financial objective to improve total shareholder return through a balanced approach of new restaurant expansion plans, enhancements and initiatives focused on existing restaurants and return of capital to our shareholders through our share repurchase program. We expect to accelerate restaurant openings in 2026. Our capital expenditures in 2025, related to future restaurant openings, will depend on the speed at which we can develop a more robust and targeted pipeline that aligns with our refined criteria for new locations. In addition, we want to maintain a flexible balance sheet to provide the financial resources necessary to manage the risks and uncertainties of conducting our business operations in the restaurant industry. In order to achieve these objectives, we use a combination of operating cash flows, debt, and landlord allowances.

Current wording

Our capital requirements are driven by our fundamental financial objective to improve total shareholder return through a balanced approach of new restaurant expansion plans, enhancements and initiatives focused on existing restaurants and return of capital to our shareholders through our share repurchase program. We expect to accelerate restaurant openings in 2026 with two restaurant openings planned for the second half of the year. In addition, we want to maintain a flexible balance sheet to provide the financial resources necessary to manage the risks and uncertainties of conducting our business operations in the restaurant industry. In order to achieve these objectives, we use a combination of operating cash flows, debt, and landlord allowances.

Previous wording

Net cash provided by operating activities was $66.9 million during the twenty-six weeks ended July 1, 2025, representing a $24.4 million increase from the $42.5 million provided during the twenty-six weeks ended July 2, 2024. The increase over prior year is primarily due to the timing of accounts payable and accrued expenses, coupled with improved net income.

Current wording

Net cash provided by operating activities was $92.0 million during the thirty-nine weeks ended September 30, 2025, representing a $22.1 million increase from the $69.8 million provided during the thirty-nine weeks ended October 1, 2024. The increase over prior year is primarily due to improved net income, the timing of accounts payable payments and accounts receivable receipts.

Previous wording

Net cash used in investing activities was $37.0 million during the twenty-six weeks ended July 1, 2025, representing a $4.3 million decrease from the $41.3 million used during the twenty-six weeks ended July 2, 2024. The decrease over prior year is primarily due to the number of new restaurant openings coupled with the timing of restaurant remodel activity.

Current wording

Net cash used in investing activities was $58.5 million during the thirty-nine weeks ended September 30, 2025, representing a $2.6 million decrease from the $61.0 million used during the thirty-nine weeks ended October 1, 2024. The decrease over prior year is primarily due to the number of new restaurant openings offset by the timing of restaurant remodel activity.

Previous wording

Net cash used in financing activities was $30.0 million during the twenty-six weeks ended July 1, 2025, representing a $15.9 million increase from the $14.1 million used during the twenty-six weeks ended July 2, 2024. The increase over prior year is primarily due to the increase in share repurchases, partially offset by the increase in proceeds from stock option exercises.

Current wording

Net cash used in financing activities was $34.2 million during the thirty-nine weeks ended September 30, 2025, representing a $14.7 million increase from the $19.5 million used during the thirty-nine weeks ended October 1, 2024. The increase over prior year is primarily due to the increase in share repurchases, partially offset by the increase in proceeds from stock option exercises and higher borrowings under our credit facility.

Previous wording

A summary of our other critical accounting policies is included in Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024. During the twenty-six weeks ended July 1, 2025, there were no significant changes in our critical accounting policies.

Current wording

A summary of our other critical accounting policies is included in Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024. During the thirty-nine weeks ended September 30, 2025, there were no significant changes in our critical accounting policies.