Krispy Kreme, Inc.

The following comparisons are historical results and are not indicative of future results which could differ materially from the historical financial information presented.

Fiscal Year ended December 28, 2025 compared to the Fiscal Year ended December 29, 2024

The following table presents our audited consolidated results of operations for fiscal 2025 and fiscal 2024:

The following table presents a further breakdown of total net revenue and organic revenue growth by segment for the periods indicated:

Total net revenue declined $142.8 million, or 8.6%, primarily impacted by the $138.5 million reduction associated with the divestiture of a controlling interest in Insomnia Cookies in the third quarter of fiscal 2024. Organic revenue declined by $20.0 million, or 1.3%, primarily driven by lower Doughnut Shop transaction volume impacted by consumer softness in a challenging macroeconomic environment and by Global Points of Access decline of 2,363, or 13.5%, impacted by the strategic closure of underperforming fresh delivery doors, including those associated with the termination of the Business Relationship Agreement with McDonald’s USA. The organic revenue decline was partially offset by increased pricing of approximately 2% (primarily driven by our planned reduced discounting).

Our U.S. segment net revenue declined $145.7 million, or 13.8%, from fiscal 2024 to fiscal 2025, primarily due to the$138.5 million reduction associated with the divestiture of a controlling interest in Insomnia Cookies in the third quarter of fiscal 2024. U.S. organic revenue declined $32.0 million, or 3.5%, from fiscal 2024 to fiscal 2025, primarily driven by lower Doughnut Shop transaction volume impacted by consumer softness in a challenging macroeconomic environment. The organic revenue decline was also driven by Points of Access decline of 2,488, or 25.0%, impacted by the strategic closure of underperforming fresh delivery doors, including those associated with the termination of the Business Relationship Agreement with McDonald’s USA. The organic revenue decline was partially offset by increased pricing of approximately 2% (primarily driven by our planned reduced discounting).

Our International segment net revenue grew $16.0 million, or 3.1%, from fiscal 2024 to fiscal 2025, in spite of foreign currency translation impacts of $4.0 million. International organic revenue grew $16.9 million or 3.3%, from fiscal 2024 to fiscal 2025, driven primarily by growth in Canada, Japan, and Mexico. The organic revenue growth was partially offset by lower transaction volume in the U.K.

Our Market Development segment net revenue declined $13.1 million, or 14.9%, from fiscal 2024 to fiscal 2025, due to the impact of franchise acquisitions in fiscal 2024 (the results of acquired franchise businesses are reported within the Market Development segment prior to the respective dates of acquisition, and are reported within the U.S. or International segments, as applicable, following the respective dates of acquisition). Market Development organic revenue declined $5.0 million, or 5.7%, from fiscal 2024 to fiscal 2025, as expansion of our international franchise business in new markets such as Brazil and Spain was more than offset by timing of shipments of equipment to franchisees.

Product and distribution costs (exclusive of depreciation and amortization): Product and distribution costs decreased $36.6 million, or 8.9%, from fiscal 2024 to fiscal 2025, driven mainly by a $31.0 million impact from the divestiture of a controlling interest in Insomnia Cookies. Product and distribution costs as a percentage of revenue remained largely consistent at 24.6% in fiscal 2024 and 24.5% in fiscal 2025.

Operating expenses: Operating expenses decreased $10.9 million, or 1.3%, from fiscal 2024 to fiscal 2025, driven mainly by a $66.4 million decrease resulting from the divestiture of a controlling interest in Insomnia Cookies that was partially offset by an increase of $55.5 million in operating expenses for the global Krispy Kreme brand primarily due to higher shop and delivery labor expenses, including logistics costs. Operating expenses as a percentage of revenue increased 390 basis points, from 48.6% in fiscal 2024 to 52.5% in fiscal 2025, primarily due to the impact of lower transaction volumes on operating leverage, operating costs associated with our now-ended McDonald’s USA partnership, and an estimated $5 million related to the 2024 Cybersecurity Incident, primarily related to operational inefficiencies.

Selling, general and administrative expense: Selling, general and administrative (“SG&A”) expenses decreased $48.0 million, or 17.5%, from fiscal 2024 to fiscal 2025, driven mainly by a $23.8 million impact from the divestiture of a controlling interest in Insomnia Cookies. As a percentage of revenue, SG&A decreased by 160 basis points, from 16.5% in fiscal 2024 to 14.9% in fiscal 2025, primarily driven by lower employee costs and share-based compensation expenses related to restructuring initiatives.

Goodwill and other asset impairments: For discussion of the $432.4 million non-cash goodwill and other asset impairments in fiscal 2025, refer to Note 1, Description of Business and Summary of Significant Accounting Policies, to the audited Consolidated Financial Statements.

Other income, net: Other income, net of $24.1 million in fiscal 2025 was primarily related to $16.5 million of cyber insurance proceeds related to the 2024 Cybersecurity Incident, which includes $14.1 million of business interruption insurance recoveries. Additionally, there were $6.7 million of gains on sale-leaseback transactions described in Note 10, Leases, to the audited Consolidated Financial Statements. Other income, net of $8.4 million in fiscal 2024 was primarily driven by a gain of $5.6 million related to the remeasurement of equity method investments to fair value immediately prior to the acquisition of Krispy Kreme shops referenced in Note 3, Acquisitions and Divestitures, to the audited Consolidated Financial Statements.

Depreciation and amortization expense: Depreciation and amortization expense increased $3.5 million, or 2.6%, from fiscal 2024 to fiscal 2025. As a percentage of revenue, depreciation and amortization expense increased 100 basis points, from 8.0% in fiscal 2024 to 9.0% in fiscal 2025, primarily driven by higher finance lease amortization expense and increased depreciation associated with capital assets placed into service to support our U.S. national expansion, including the McDonald’s USA rollout. We recorded long-lived asset and lease impairment charges during the second quarter of fiscal 2025, a portion of which related to assets supporting the U.S. national expansion, including the McDonald’s USA rollout, which we expect to impact the future rate of depreciation expense for these assets.

Interest expense, net: Interest expense, net increased $5.7 million, or 9.5%, from fiscal 2024 to fiscal 2025, primarily driven by higher finance lease interest expense and a higher average debt balance.

Loss/(gain) on divestiture of Insomnia Cookies: In the third quarter of fiscal 2024, we sold our controlling interest in Insomnia Cookies in exchange for cash proceeds. Following the transaction, we owned 34.7% of Insomnia Cookies and lost the ability to exercise control. Accordingly, we deconsolidated Insomnia Cookies and recorded a gain on divestiture of $90.5 million (gross of income taxes). In the second quarter of fiscal 2025, we sold the remainder of our ownership interest in Insomnia Cookies for cash proceeds and recognized a loss on divestiture of $11.5 million (gross of income taxes). Refer to Note 3, Acquisitions and Divestitures, to the audited Consolidated Financial Statements for further information.

Income tax (benefit)/expense: Income tax benefit was $20.8 million in fiscal 2025, while income tax expense was $16.0 million in fiscal 2024. The variance of $36.8 million from fiscal 2024 to fiscal 2025 was primarily driven by lower pre-tax results in fiscal 2025, offset by the tax effect of nondeductible goodwill impairment charges.

Results of Operations by Segment – Fiscal Year ended December 28, 2025 compared to the Fiscal Year ended December 29, 2024

The following table presents Adjusted EBIT and Adjusted EBITDA by segment for the periods indicated:

(1)Refer to “Key Performance Indicators and Non-GAAP Measures” above for a reconciliation of Adjusted EBIT and Adjusted EBITDA to net (loss)/income.

U.S. segment Adjusted EBIT decreased $36.2 million, or 69.2%, and Adjusted EBITDA decreased $33.1 million, or 29.4%. Of these decreases, $15.8 million of the reduction was associated with the divestiture of a controlling interest in Insomnia Cookies in the third quarter of fiscal 2024. The Adjusted EBITDA margin decline of 200 basis points to 8.7% in fiscal 2025 compared to fiscal 2024 was primarily driven by an estimated $13 million to $15 million adverse impact associated with our now-ended McDonald’s USA partnership, lower transaction volumes impacting operating leverage, and an estimated $5 million related to the 2024 Cybersecurity Incident, primarily related to operational inefficiencies. The U.S. Adjusted EBIT and Adjusted EBITDA decreases were partially offset by $14.1 million of business interruption insurance recoveries related to the 2024 Cybersecurity Incident.

International segment Adjusted EBIT decreased $9.3 million, or 15.6%, and Adjusted EBITDA decreased $7.6 million, or 8.4%. The Adjusted EBITDA margin declined 200 basis points to 15.5% in fiscal 2025 compared to fiscal 2024, as lower transaction volume continued to impact operating leverage for the International equity markets, particularly the U.K.

Market Development segment Adjusted EBIT and Adjusted EBITDA decreased $3.8 million, or 8.0%, with Adjusted EBITDA margin expansion of 450 basis points to 59.2% in fiscal 2025 compared to fiscal 2024, driven mainly by changes in the revenue mix, including fewer shipments of lower-margin equipment to franchisees, and growth in royalties.

Corporate expenses within Adjusted EBIT increased $6.5 million, or 9.3%, and corporate expenses within Adjusted EBITDA increased $8.7 million, or 15.0%, primarily reflecting a reduction in costs allocated to the business segments following the centralization of certain overhead functions.

Capital Resources and Liquidity

Our principal sources of liquidity to date have included cash from operating activities, cash on hand, amounts available under our credit facility, commercial trade financing including our structured payables programs, and proceeds from strategic transactions such as the divestiture of Insomnia Cookies. Our primary use of liquidity is to fund the cash requirements of our business operations, including working capital needs, capital expenditures, acquisitions, and other commitments.

Our future obligations primarily consist of our debt and lease obligations, as well as commitments under ingredient and other forward purchase contracts. As of December 28, 2025, we had the following future obligations:

•An aggregate principal amount of $900.3 million outstanding under the 2023 Facility;

•An aggregate principal amount of $2.5 million outstanding under short-term, uncommitted lines of credit;

•Non-cancellable future minimum operating lease payments totaling $641.6 million;

•Non-cancellable future minimum finance lease payments totaling $92.8 million; and

•Purchase commitments under ingredient and other forward purchase contracts of $74.0 million.

Refer to Note 9, Long-Term Debt, Note 10, Leases, and Note 16, Commitments and Contingencies, to the audited Consolidated Financial Statements for further information.

We had cash and cash equivalents of $42.4 million and $29.0 million as of December 28, 2025 and December 29, 2024, respectively. We believe that our existing cash and cash equivalents and available borrowing capacity under our credit facilities will be sufficient to fund our operating and capital needs for at least the next twelve months. In fiscal 2026, we expect to use our available cash to reduce debt and to continue to position the business for sustainable growth, including investing in shop improvements, ways to better serve our consumers, and ways to increase our omni-channel presence. Total capital expenditures for fiscal 2026 are expected to be between $50.0 million and $60.0 million, as we continue to deploy the capital-efficient Hub and Spoke model globally.

Our assessment of the period of time through which our financial resources will be adequate to support our operations could vary because of, and our future capital requirements will depend on, many factors, including our growth rate, the timing and extent of spending on business acquisitions, the growth of our presence in new markets, and the expansion of our omni-channel model in existing markets. We have based this estimate on assumptions that may prove to be wrong, and we could use our available capital resources sooner than we currently expect. We may be required to seek additional equity or debt financing. In the event that additional financing is required from outside sources, we may not be able to raise it on terms acceptable to us or at all. If we are unable to raise additional capital when desired, or if we cannot expand our operations or otherwise capitalize on our business opportunities because we lack sufficient capital, our business, results of operations, and financial condition would be adversely affected.

Cash Flows

We have historically generated significant cash from operations and have substantial credit availability and capacity to fund operating and discretionary spending such as capital expenditures and debt repayments. Our requirement for working capital is not significant because our consumers pay us in cash or on debit or credit cards at the time of the sale and we are able to sell many of our inventory items before payment is due to the vendors for the various inputs to such items. The following table and discussion present, for the periods indicated, a summary of our key cash flows from operating, investing and financing activities:

Operating Activities

Cash provided by operations totaled $33.9 million for fiscal 2025, a decrease of $11.9 million compared with fiscal 2024. Cash provided by operations declined primarily due to a larger operating loss in fiscal 2025 compared to fiscal 2024 and the impact of our receipt of $7.7 million in cash proceeds from the settlement of interest rate swap derivative contracts in fiscal 2024, partially offset by the intentional paydown of obligations due under our SCF programs (discussed in Note 8, Vendor Finance Programs, to the audited Consolidated Financial Statements) in fiscal 2024.

Investing Activities

Cash used for investing activities totaled $12.1 million for fiscal 2025, a fluctuation of $31.4 million compared with fiscal 2024. The cash used for investing activities in fiscal 2025 was primarily due to cash for capital expenditures. As part of our turnaround plan, we expect to reduce capital investment by leveraging existing capacity where available and focusing on franchise development. These outflows were partially offset by the divestiture of our remaining ownership interest in Insomnia Cookies for $75.0 million in aggregate cash proceeds (discussed in Note 3, Acquisitions and Divestitures, to the audited Consolidated Financial Statements) and proceeds from sale-leaseback transactions (discussed in Note 10, Leases, to the audited Consolidated Financial Statements).

The cash provided by investing activities in fiscal 2024 was primarily due to the receipt of net proceeds of $124.1 million from the divestiture of Insomnia Cookies and an additional $45.0 million from the repayment of an intercompany loan due from Insomnia Cookies. These proceeds were partially offset by our use of $31.9 million cash for the acquisition of franchised shops in fiscal 2024, discussed in Note 3, Acquisitions and Divestitures, to the audited Consolidated Financial Statements.

Financing Activities

Cash used for financing activities totaled $7.8 million for fiscal 2025, a fluctuation of $66.2 million compared with fiscal 2024, primarily driven by the pay down of long term debt balances with a portion of the net proceeds received from the divestiture of Insomnia Cookies.

Debt

Our long-term debt obligations consist of the following:

2023 Secured Credit Facility

The Company is party to a credit agreement (the “2023 Facility”) consisting of a $300.0 million senior secured revolving credit facility and a term loan with an original principal amount of $700.0 million. During the second quarter of fiscal 2025, the Company amended the 2023 Facility to, among other things, establish additional, incremental term loan commitments in an aggregate principal amount of $125.0 million. Refer to Note 9, Long-Term Debt, to the audited Consolidated Financial Statements for further information.

Under the terms of the 2023 Facility, we are subject to a requirement to maintain a leverage ratio of less than 5.00 to 1.00 as of the end of each quarterly Test Period (as defined in the 2023 Facility) through maturity in March 2028. The leverage ratio under the 2023 Facility is defined as the ratio of (a) Total Indebtedness (as defined in the 2023 Facility, which includes all debt and finance lease obligations) minus unrestricted cash and cash equivalents to (b) a defined calculation of Adjusted EBITDA (2023 Facility Adjusted EBITDA) for the most recently ended Test Period. Our leverage ratio was 4.4 to 1.00 as of the end of fiscal 2025 compared to 3.9 to 1.00 as of the end of fiscal 2024.

We were in compliance with the financial covenants related to the 2023 Facility as of December 28, 2025 and expect to remain in compliance over the next 12 months.

Short-Term Lines of Credit

We are party to two agreements with existing lenders providing for short-term, uncommitted lines of credit up to an aggregate of $25.0 million. Borrowings under these short-term lines of credit are payable to the lenders on a revolving basis for tenors up to three months and are subject to an interest rate of adjusted term SOFR plus a credit spread adjustment of 0.10% plus a margin of 1.75%. As of December 28, 2025, the Company had drawn $2.5 million under the agreements which is classified within the Current portion of long-term debt on the Consolidated Balance Sheets.

Critical Accounting Estimates

The financial information discussed in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” is based upon or derived from the audited Consolidated Financial Statements, which have been prepared in conformity with GAAP. The preparation of the financial statements requires the use of judgments, estimates, and assumptions that affect the reported amounts of assets, liabilities, revenues, and expenses as well as related disclosures. We consider an accounting judgment, estimate, or assumption to be critical when (1) the estimate or assumption is complex in nature or requires a high degree of judgment and (2) the use of different judgments, estimates, and assumptions could have a material impact on the audited Consolidated Financial Statements.

On an ongoing basis, we evaluate our estimates and judgments based on historical experience and various other factors that are believed to be reasonable under the circumstances. We review our financial reporting and disclosure practices and accounting policies quarterly to confirm that they provide accurate and transparent information relative to the current economic and business environment. A summary of our significant accounting policies is included in Note 1, Description of Business and Summary of Significant Accounting Policies, to the audited Consolidated Financial Statements. We believe that our critical accounting estimates are:

Self-Insurance Risks and Receivables from Insurers

We are subject to workers’ compensation, vehicle, and general liability claims and are self-insured for a significant portion of our workers’ compensation, vehicle, and general liability claims up to the amount of stop-loss insurance coverage purchased from commercial insurance carriers. We maintain accruals for the estimated cost of claims, without regard to the effects of stop-loss coverage, using actuarial methods which evaluate known open and incurred but not reported claims and consider historical loss development experience. In addition, we record receivables from the insurance carriers for claims amounts estimated to be recovered under the stop-loss insurance policies when these amounts are estimable and probable of collection. We estimate such stop-loss receivables using the same actuarial methods used to establish the related claims accruals and taking into account the amount of risk transferred to the carriers under the stop-loss policies. The stop-loss policies provide coverage for claims in excess of retained self-insurance risks, which are determined on a claim-by-claim basis. As of December 28, 2025 and December 29, 2024, we had $31.2 million and $34.8 million, respectively, reserved for such programs. Inclusive of the receivables from the stop-loss insurance policies, the Company’s limited liability balance was $22.6 million and $18.7 million as of December 28, 2025 and December 29, 2024, respectively.

Our estimated liability is not discounted and is based on a number of assumptions and factors. The critical assumptions used in determining these related expenses and obligations are future cost projections of claims, which include healthcare cost projections. These critical assumptions are calculated based on historical Company data and experience, as well as appropriate market indicators including inflation, societal attitudes toward legal action, and changes in law. The assumptions are evaluated at least semiannually by us in conjunction with outside actuaries and are closely monitored and adjusted when warranted by changing circumstances. If a greater amount of claims are reported, or if the nature of the claims, including medical costs, results in increased exposure beyond our expectations, our liabilities may not be sufficient, and we could recognize additional expense.

Income Taxes

Our provision for income taxes, deferred tax assets and liabilities including valuation allowances requires the use of estimates based on our management’s interpretation and application of complex tax laws and accounting guidance. We establish reserves for uncertain tax positions for material, known tax exposures in accordance with Accounting Standards Codification (“ASC”) 740, Income Taxes relating to deductions, transactions and other matters involving some uncertainty as to the measurement and recognition of the item. We may adjust these reserves when our judgment changes as a result of the evaluation of new information not previously available and will be reflected in the period in which the new information is available. While we believe that our reserves are adequate, issues raised by a tax authority may be resolved at an amount different than the related reserve and could materially increase or decrease our income tax provision in future periods.

Realization of deferred tax assets involves estimates regarding (i) the timing and amount of the reversal of taxable temporary differences, (ii) expected future taxable income, (iii) the ability to carry back or carry forward net operating losses and tax credits, and (iv) the impact of tax planning strategies. We believe that it is more likely than not that we will not realize the benefit of certain deferred tax assets and, accordingly, have established a valuation allowance against them. In assessing the need for a valuation allowance, we consider all available positive and negative evidence, including past operating results, projections of future taxable income and the feasibility of and potential changes to ongoing tax planning strategies. The projections of future taxable income include a number of estimates and assumptions regarding our volume, pricing and costs. Although realization is not assured for the remaining deferred tax assets, we believe it is more likely than not that the remaining deferred tax assets will be realized through future taxable earnings or alternative tax strategies. However, deferred tax assets could be reduced in the near term if our estimates of taxable income are significantly reduced or tax strategies are no longer viable.

Goodwill and Indefinite Lived Intangible Assets

For each reporting unit, we assess goodwill for impairment annually at the beginning of the fourth fiscal quarter or more frequently when impairment indicators are present. If the carrying value of the reporting unit exceeds its fair value, we recognize an impairment charge for the difference up to the carrying value of the allocated goodwill. The fair value is estimated using a combination of a discounted cash flow approach and a market approach.

When assessing goodwill for impairment, our decision to perform a qualitative impairment assessment for an individual reporting unit is influenced by a number of factors, inclusive of the carrying value of the reporting unit’s goodwill, the significance of the excess of the reporting unit’s estimated fair value over carrying value at the last quantitative assessment date, the amount of time in between quantitative fair value assessments and the date of acquisition. If we perform a quantitative assessment of an individual reporting unit’s goodwill, our impairment calculations contain uncertainties because they require management to make assumptions and to apply judgment when estimating future cash flows and asset fair values, including projected revenue growth and operating expenses related to existing businesses, product innovation and new shop concepts, as well as utilizing valuation multiples of similar publicly traded companies and selecting an appropriate discount rate. Estimates of revenue growth and operating expenses are based on internal projections considering the reporting unit’s past performance and forecasted growth, strategic initiatives, local market economics, and the local business environment impacting the reporting unit’s performance. The discount rate is selected based on the estimated cost of capital for a market participant to operate the reporting unit in the region. These estimates, as well as the selection of comparable companies and valuation multiples used in the market approaches are highly subjective, and our ability to realize the future cash flows used in our fair value calculations is affected by factors such as the success of strategic initiatives, changes in economic conditions, changes in our operating performance, and changes in our business strategies, including retail initiatives and international expansion.

In the quarter ended June 29, 2025, management identified impairment indicators that required a quantitative assessment of goodwill outside of management’s routine annual assessment. These indicators included that during the two quarters ended June 29, 2025, the Company experienced a decline in its stock price and market capitalization, which became significant and sustained during the quarter ended June 29, 2025. In addition, the Company’s operating results for the quarter were below previous forecasts. Lastly, the Company updated its forecasts for the full year following termination of the Business Relationship Agreement with McDonald’s USA during the quarter, and the updated forecasts were below previous forecasts. After completing the quantitative impairment test, management concluded that the estimated fair values of the U.S., Krispy Kreme Holding U.K. Ltd. (“KK U.K.”), and Krispy Kreme Holdings Pty Ltd. (“KK Australia”) reporting units had declined below their carrying values, and management recognized a cumulative, non-cash, partial goodwill impairment charge of $356.0 million (gross of income taxes) in the second quarter of fiscal 2025. As of September 29, 2025, we performed a quantitative impairment assessment for all of our reporting units. The estimated fair value of each reporting unit exceeded its carrying value and, therefore, no additional impairment was recorded.

For the fiscal years 2024 and 2023, there were no goodwill impairment charges. We believe the fair value of each of our reporting units is in excess of its carrying value, and absent a sustained multi-year global decline in our business in key markets such as the U.S., we do not anticipate incurring significant goodwill impairment in the next 12 months.

Other intangible assets, net primarily represent the trade names for our brands, franchise agreements (domestic and international), reacquired franchise rights, and customer relationships. The trade names have been assigned an indefinite useful life and are reviewed annually for impairment. The fair value calculation for the trade names includes estimates of revenue growth, which are based on past performance and internal projections for the intangible asset group’s forecasted growth and royalty rates, which are adjusted for our particular facts and circumstances. The discount rate is selected based on the estimated cost of capital that reflects the risk profile of the related business. These estimates are highly subjective, and our ability to achieve the forecasted cash flows used in our fair value calculations is affected by factors such as the success of strategic initiatives, changes in economic conditions, changes in our operating performance, and changes in our business strategies, including retail initiatives and international expansion. All other intangible assets are amortized on a straight-line basis over their estimated useful lives. Definite-lived intangible assets are assessed for impairment whenever triggering events or indicators of potential impairment occur. We did not have any impairment charges of indefinite-lived intangible assets during any of the periods presented, and we do not anticipate incurring significant impairment charges in the next 12 months.

Impairment of Long-Lived Assets

We evaluate property and equipment, lease right of use assets, and other definite lived assets for impairment whenever events or changes in circumstances indicate that the carrying amounts of such assets may not be recoverable. Expected cash flows associated with an asset are the key factor in determining the recoverability of the asset. For the recoverability evaluation, long-lived assets are grouped with other assets and liabilities at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. For Company-owned Hub and Spoke assets, the impairment test is performed at the individual Hub asset group level (which includes a Hub and its related Spokes), which is inclusive of property and equipment and lease right of use assets. If the carrying amount of the assets exceeds the sum of the undiscounted cash flows, the Company records an impairment charge in an amount equal to the excess of the carrying value of the assets over the estimated fair value. Significant judgment is involved in determining the assumptions used in estimating future cash flows, including projected revenue growth, operating margins, economic conditions, and changes in the operating environment. Changes in these assumptions could have a significant impact on the recoverability of the asset and may result in additional impairment charges. For those Hubs and any other asset groupings where the carrying amount of the assets exceeds the sum of the undiscounted cash flows, the Company must make additional assumptions to determine the related fair values of the assets, including selection of an appropriate discount rate when the income approach is used.

Impairment charges related to the Company’s long-lived fixed assets were $39.4 million, $4.6 million, and $18.1 million for the fiscal years ended December 28, 2025, December 29, 2024, and December 31, 2023, respectively. For the fiscal years ended December 28, 2025 and December 31, 2023 the Company recorded lease impairment and termination costs of $37.0 million and $6.6 million, respectively. For the fiscal year ended December 29, 2024 the Company recorded a net gain on lease termination of $0.1 million.

New Accounting Pronouncements

Refer to Note 1, Description of Business and Summary of Significant Accounting Policies, to the audited Consolidated Financial Statements for a detailed description of recent accounting pronouncements.