Krispy Kreme, Inc.
For the period ended Jun 28, 2026. Filed Aug 6, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 28, 2026 · Filed Aug 6, 2026
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Item 2. Results of Operations
Results of Operations
The following comparisons are historical results and are not indicative of future results, which could differ materially from the historical financial information presented.
Quarter ended June 28, 2026 compared to the Quarter ended June 29, 2025
The following table presents our unaudited condensed consolidated results of operations for the quarter ended June 28, 2026 and the quarter ended June 29, 2025:
| Quarter Ended | ||||||
|---|---|---|---|---|---|---|
| June 28, 2026 · June 29, 2025 · Change | ||||||
| (in thousands, except percentages) | Amount | % of Revenue | Amount | % of Revenue | $ | % |
| Net revenues | ||||||
| Product sales | $315,674 | 95.4% | $371,377 | 97.8% | $(55,703) | -15.0% |
| Royalties and other revenues | 15,321 | 4.6% | 8,390 | 2.2% | 6,931 | 82.6% |
| Total net revenues | 330,995 | 100.0% | 379,767 | 100.0% | (48,772) | -12.8% |
| Product and distribution costs | 86,037 | 26.0% | 92,627 | 24.4% | (6,590) | -7.1% |
| Operating expenses | 158,869 | 48.0% | 210,712 | 55.5% | (51,843) | -24.6% |
| Selling, general and administrative expense | 53,695 | 16.2% | 62,920 | 16.6% | (9,225) | -14.7% |
| Marketing expenses | 11,086 | 3.3% | 12,185 | 3.2% | (1,099) | -9.0% |
| Pre-opening costs | — | —% | 1,471 | 0.4% | (1,471) | -100.0% |
| Goodwill and other asset impairments | 4,238 | 1.3% | 406,932 | 107.2% | (402,694) | -99.0% |
| Other income (expense), net | 1,039 | 0.3% | (8,311) | -2.2% | 9,350 | 112.5% |
| Depreciation and amortization expense | 27,007 | 8.2% | 35,782 | 9.4% | (8,775) | -24.5% |
| Operating loss | (10,976) | -3.3% | (434,551) | -114.4% | 423,575 | 97.5% |
| Interest expense, net | 13,375 | 4.0% | 16,696 | 4.4% | (3,321) | -19.9% |
| Loss on divestiture of Insomnia Cookies | — | —% | 11,501 | 3.0% | (11,501) | 100.0% |
| Other non-operating income, net | (261) | -0.1% | (1,177) | -0.3% | 916 | 77.8% |
| Loss before income taxes | (24,090) | -7.3% | (461,571) | -121.5% | 437,481 | 94.8% |
| Income tax expense/(benefit) | (4,259) | -1.3% | (20,453) | -5.4% | 16,194 | 79.2% |
| Net loss | (19,831) | -6.0% | (441,118) | -116.2% | 421,287 | 95.5% |
| Net income/(loss) attributable to noncontrolling interest | 480 | 0.1% | (5,858) | -1.5% | 6,338 | 108.2% |
| Net loss attributable to Krispy Kreme, Inc. | $(20,311) | -6.1% | $(435,260) | -114.6% | $414,949 | 95.3% |
The following table presents a further breakdown of total net revenue and organic revenue growth by segment for the quarter ended June 28, 2026 compared to the quarter ended June 29, 2025:
| (in thousands, except percentages) | U.S. | International | MarketDevelopment | TotalCompany |
|---|---|---|---|---|
| Total net revenues in second quarter of fiscal 2026 | $172,680 | $117,342 | $40,973 | $330,995 |
| Total net revenues in second quarter of fiscal 2025 | 230,099 | 132,755 | 16,913 | 379,767 |
| Total Net Revenues (Decline)/Growth | (57,419) | (15,413) | 24,060 | (48,772) |
| Total Net Revenues (Decline)/Growth % | (25.0)% | (11.6)% | 142.3% | (12.8)% |
| Less: Impact of refranchising | (57,526) | (16,342) | 17,990 | (55,878) |
| Adjusted net revenues in second quarter of fiscal 2025 | 172,573 | 116,413 | 34,903 | 323,889 |
| Adjusted net revenue (decline)/growth | 107 | 929 | 6,070 | 7,106 |
| Adjusted Net Revenue (Decline)/Growth % | 0.1% | 0.8% | 17.4% | 2.2% |
| Impact of acquisitions | — | — | (1,039) | (1,039) |
| Impact of foreign currency translation | — | (6,893) | (3) | (6,896) |
| Organic Revenue (Decline)/Growth | $107 | $(5,964) | $5,028 | $(829) |
| Organic Revenue (Decline)/Growth % | 0.1% | (5.1)% | 14.4% | (0.3)% |
Total net revenue declined $48.8 million, or 12.8%, from the second quarter of fiscal 2025 to the second quarter of fiscal 2026, primarily due to the $55.9 million reduction associated with refranchising efforts taken in the U.S. and International segments. The results of refranchised businesses are reported within the U.S. or International segments, as applicable, prior to the respective dates of divestiture, and are reported within the Market Development segment, following the respective dates of divestiture. Organic revenue decreased by 0.3%, primarily driven by a decline in Global Points of Access and in the International segment, partially offset by growth in the Market Development segment. The organic revenue decrease reflects a Global Points of Access decline of 2,448, or 13.5%, primarily impacted by the strategic closure of underperforming fresh delivery doors that was completed in the third quarter of 2025, including those associated with the termination of the Business Relationship Agreement with McDonald’s USA.
Our U.S. segment net revenue declined $57.4 million, or 25.0%, from the second quarter of fiscal 2025 to the second quarter of fiscal 2026, primarily due to the $57.5 million reduction associated with refranchising of the U.S. business and the strategic closure of underperforming fresh delivery doors. U.S. organic revenue increased by 0.1%, primarily driven by the strategic closure of underperforming fresh delivery doors in the second quarter of fiscal 2025.
Our International segment net revenue declined $15.4 million, or 11.6%, from the second quarter of fiscal 2025 to the second quarter of fiscal 2026, due primarily to the impacts of the refranchising of Japan, partially offset by foreign currency translation impacts of $6.9 million. International organic revenue decreased by 5.1%, driven primarily by declines in the U.K. and Australia, partially offset by growth in Canada.
Our Market Development segment net revenue increased $24.1 million, or 142.3%, from the second quarter of fiscal 2025 to the second quarter of fiscal 2026, primarily due to the $18.0 million benefit from refranchising in the first quarter of fiscal 2026. Market Development organic revenue increased by 14.4%, primarily due to an increase in royalty revenues primarily from the Middle East, Japan, and Brazil.
Operating expenses: Operating expenses decreased $51.8 million, or 24.6%, from the second quarter of fiscal 2025 to the second quarter of fiscal 2026, driven mainly by refranchising transactions completed in the first quarter of fiscal 2026, coupled with an increase in operational efficiencies. Operating expenses as a percentage of revenue decreased by 750 basis points, from 55.5% in the second quarter of fiscal 2025 to 48.0% in the second quarter of fiscal 2026, primarily due to increased operational efficiencies as we continue to deliver on our turnaround plan.
Selling, general and administrative expense: Selling, general and administrative (“SG&A”) expense decreased $9.2 million, or 14.7%, from the second quarter of fiscal 2025 to the second quarter of fiscal 2026, driven mainly by lower employee costs. As a percentage of revenue, SG&A expense remained relatively consistent with the comparable period.
Goodwill and other asset impairments: Goodwill and other asset impairments decreased $402.7 million, or 99.0%, from the second quarter of fiscal 2025 to the second quarter of fiscal 2026, driven mainly by the $406.9 million non-cash goodwill and other asset impairments charge in the second quarter of fiscal 2025. As a percentage of revenue, goodwill and other asset impairments decreased from 107.2% in the second quarter of fiscal 2025 to 1.3% in the fiscal quarter of 2026. This decrease was offset by other asset impairments of $4.2 million related to long-lived asset impairments incurred in the second quarter of fiscal 2026.
Other income (expense), net: Other income (expense), net increased $9.4 million, or 112.5%, from the second quarter of fiscal 2025 to the second quarter of fiscal 2026, primarily driven by gains on sale-leaseback transactions in the second quarter of fiscal 2025. As a percentage of revenue, other income (expense), net increased 250 basis points, from (2.2)% in the second quarter of fiscal 2025 to 0.3% in the second quarter of fiscal 2026.
Depreciation and amortization expense: Depreciation and amortization expense decreased $8.8 million, or 24.5%, from the second quarter of fiscal 2025 to the second quarter of fiscal 2026, primarily driven by lower finance lease amortization expense and fixed asset impairments taken in the second quarter of fiscal 2025 following the termination of the Business Relationship Agreement with McDonald’s USA. As a percentage of revenue, Depreciation and amortization expense decreased 120 basis points, from 9.4% in the second quarter of fiscal 2025 to 8.2% in the second quarter of fiscal 2026.
Interest expense, net: Interest expense, net decreased $3.3 million, or 19.9%, from the second quarter of fiscal 2025 to the second quarter of fiscal 2026 primarily driven by a lower average debt balance.
Loss on divestiture of Insomnia Cookies: 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) with no comparable activity in the second quarter of fiscal 2026.
Income tax (benefit)/expense: Income tax benefit was$4.3 million in thesecond quarter of fiscal 2026, while income tax benefit was$20.5 million in the second quarter of fiscal 2025. The variancewas primarily driven by the tax effect of nondeductible goodwill impairment charges in thesecond quarter of fiscal 2025.
Results of Operations by Segment – Quarter ended June 28, 2026 compared to the Quarter ended June 29, 2025
The following table presents Adjusted EBITDA by segment for the periods indicated:
| Quarter Ended · Change | ||||
|---|---|---|---|---|
| (in thousands, except percentages) | June 28, 2026 | June 29, 2025 | $ | % |
| Adjusted EBITDA | ||||
| U.S. | $13,752 | $9,930 | $3,822 | 38.5% |
| International | 14,182 | 18,221 | (4,039) | -22.2% |
| Market Development | 19,386 | 8,948 | 10,438 | 116.7% |
| Corporate | (18,513) | (16,988) | (1,525) | -9.0% |
| Total Adjusted EBITDA (1) | $28,807 | $20,111 | $8,696 | 43.2% |
(1) Refer to “Key Performance Indicators and Non-GAAP Measures” above for a reconciliation of Adjusted EBITDA to net loss.
U.S. segment Adjusted EBITDA increased $3.8 million, or 38.5%, with margin expansion of 370 basis points to 8.0% in the second quarter of fiscal 2026 compared to the second quarter of fiscal 2025, primarily driven by operational efficiencies, and SG&A savings as we continue to deliver on our turnaround plan.
International segment Adjusted EBITDA decreased $4.0 million, or 22.2%, primarily due to refranchising of the Japan business. The margin decline of 160 basis points to 12.1% in the second quarter of fiscal 2026 compared to the second quarter of fiscal 2025 was due to lower Adjusted EBITDA in the U.K. and Australia and the refranchising of Japan.
Market Development segment Adjusted EBITDA increased $10.4 million, or 116.7%, with margin decline of 560 basis points to 47.3% in the second quarter of fiscal 2026 compared to the second quarter of fiscal 2025, driven mainly by changes in the regional mix of U.S. sales associated with the WKS Refranchising, and to a lesser degree the refranchising of Japan.
Two Quarters ended June 28, 2026 compared to the Two Quarters ended June 29, 2025
The following table presents our unaudited condensed consolidated results of operations for the two quarters ended June 28, 2026 and the two quarters ended June 29, 2025:
| Two Quarters Ended | ||||||
|---|---|---|---|---|---|---|
| June 28, 2026 · June 29, 2025 · Change | ||||||
| (in thousands, except percentages) | Amount | % of Revenue | Amount | % of Revenue | $ | % |
| Net revenues | ||||||
| Product sales | $673,112 | 96.4% | $737,856 | 97.7% | $(64,744) | -8.8% |
| Royalties and other revenues | 24,917 | 3.6% | 17,095 | 2.3% | 7,822 | 45.8% |
| Total net revenues | 698,029 | 100.0% | 754,951 | 100.0% | (56,922) | -7.5% |
| Product and distribution costs | 174,367 | 25.0% | 183,363 | 24.3% | (8,996) | -4.9% |
| Operating expenses | 346,975 | 49.7% | 409,555 | 54.2% | (62,580) | -15.3% |
| Selling, general and administrative expense | 111,728 | 16.0% | 122,325 | 16.2% | (10,597) | -8.7% |
| Marketing expenses | 21,205 | 3.0% | 22,424 | 3.0% | (1,219) | -5.4% |
| Pre-opening costs | 194 | —% | 2,400 | 0.3% | (2,206) | -91.9% |
| Goodwill and other asset impairments | 6,126 | 0.9% | 407,094 | 53.9% | (400,968) | -98.5% |
| Gain on refranchising, net | (8,885) | -5.1% | — | —% | (8,885) | nm |
| Other income (expense), net | 1,798 | 0.3% | (7,073) | -0.9% | 8,871 | 125.4% |
| Depreciation and amortization expense | 59,122 | 8.5% | 69,683 | 9.2% | (10,561) | -15.2% |
| Operating (loss)/income | (14,601) | -2.1% | (454,820) | -60.2% | 440,219 | 96.8% |
| Interest expense, net | 28,999 | 4.2% | 32,892 | 4.4% | (3,893) | -11.8% |
| Loss on divestiture of Insomnia Cookies | — | —% | 11,501 | 1.5% | (11,501) | -100.0% |
| Other non-operating (income)/expense, net | (420) | -0.1% | (1,570) | -0.2% | 1,150 | 73.2% |
| Loss before income taxes | (43,180) | -6.2% | (497,643) | -65.9% | 454,463 | 91.3% |
| Income tax (benefit)/expense | (676) | -0.1% | (23,120) | -3.1% | 22,444 | 97.1% |
| Net loss | (42,504) | -6.1% | (474,523) | -62.9% | 432,019 | 91.0% |
| Net (loss)/income attributable to noncontrolling interest | 591 | 0.1% | (5,979) | -0.8% | 6,570 | 109.9% |
| Net loss attributable to Krispy Kreme, Inc. | $(43,095) | -6.2% | $(468,544) | -62.1% | $425,449 | 90.8% |
The following table presents a further breakdown of total net revenue and organic revenue growth by segment for the two quarters ended June 28, 2026 compared to the two quarters ended June 29, 2025:
| (in thousands, except percentages) | U.S. | International | MarketDevelopment | TotalCompany |
|---|---|---|---|---|
| Total net revenues in first two quarters of fiscal 2026 | $394,230 | $242,600 | $61,199 | $698,029 |
| Total net revenues in first two quarters of fiscal 2025 | 466,643 | 252,390 | 35,918 | 754,951 |
| Total Net Revenues (Decline)/Growth | (72,413) | (9,790) | 25,281 | (56,922) |
| Total Net Revenues (Decline)/Growth % | -15.5% | -3.9% | 70.4% | -7.5% |
| Less: Impact of refranchising | (63,386) | (21,694) | 20,117 | (64,963) |
| Adjusted net revenues in first two quarters of fiscal 2025 | 403,257 | 230,696 | 56,035 | 689,988 |
| Adjusted net revenue growth/(decline) | (9,027) | 11,904 | 5,164 | 8,041 |
| Impact of acquisitions | — | — | (1,039) | (1,039) |
| Impact of foreign currency translation | — | (17,353) | (3) | (17,356) |
| Organic Revenue (Decline)/Growth | $(9,027) | $(5,449) | $4,122 | $(10,354) |
| Organic Revenue (Decline)/Growth % | -2.2% | -2.4% | 7.4% | -1.5% |
Total net revenue declined $56.9 million, or 7.5%, from the first two quarters of fiscal 2025 to the first two quarters of fiscal 2026, primarily due to the $65.0 million reduction associated with refranchising efforts taken in the U.S. and International segments, partially offset by an increase in royalty revenue. Organic revenue declined $10.4 million, or 1.5%, 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 2,448, or 13.5%, impacted by the strategic closure of underperforming fresh delivery doors.
Our U.S. segment net revenue declined $72.4 million, or 15.5%, from the first two quarters of fiscal 2025 to the first two quarters of fiscal 2026, primarily due to the divestiture of a controlling interest in Insomnia Cookies in the third quarter of fiscal 2024. U.S. organic revenue declined $9.0 million, or 2.2%, 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 3,768, or 37.0%, impacted by the strategic closure of underperforming fresh delivery doors.
Our International segment net revenue declined $9.8 million, or 3.9%, from the first two quarters of fiscal 2025 to the first two quarters of fiscal 2026, driven by the $21.7 million impact of refranchising transactions in fiscal 2026. International organic revenue declined $5.4 million, or 2.4%, driven primarily by adverse foreign currency impacts.
Our Market Development segment net revenue increased $25.3 million, or 70.4%, from the first two quarters of fiscal 2025 to the first two quarters of fiscal 2026, primarily due to the $20.1 million impact of refranchising transactions in fiscal 2026. Market Development organic revenue increased $4.1 million, or 7.4%, primarily driven by an increase in royalty revenues.
Operating expenses: Operating expenses decreased $62.6 million, or 15.3%, from the first two quarters of fiscal 2025 to the first two quarters of fiscal 2026, driven mainly by refranchising transactions and the decrease resulting from the reduction in costs associated with the transition to third-party logistics. Operating expenses as a percentage of revenue decreased 450 basis points, from 54.2% in the first two quarters of fiscal 2025 to 49.7% in the first two quarters of fiscal 2026, primarily due to operational efficiencies as we continue to deliver on our turnaround plan.
Selling, general and administrative expense: SG&A expense decreased $10.6 million, or 8.7%, from the first two quarters of fiscal 2025 to the first two quarters of fiscal 2026, driven mainly by a $6.9 million reduction in legal professional fees, coupled with a $3.7 million reduction in employee costs. As a percentage of revenue, SG&A expense remained relatively consistent with the comparable period.
Goodwill and other asset impairments: Goodwill and other asset impairments of $6.1 million consists primarily of truck impairments resulting from the transition to third-party logistics. As a percentage of revenue, Goodwill and other asset impairments decreased 5,300 basis points, from 53.9% in the first two quarters of fiscal 2025 to 0.9% in the first two quarters of 2026.
Gain on refranchising, net: In the first quarter of fiscal 2026, the Company completed two refranchising transactions, one each impacting the U.S. and International business segments resulting in a net gain of $8.9 million. Refer to Note 3, Acquisitions and Divestitures, to the Condensed Consolidated Financial Statements for further information.
Other income (expense), net: Other income (expense), net of $1.8 million in the first two quarters of fiscal 2026 was primarily related to miscellaneous corporate expenses. Other income (expense), net of $7.1 million in the first two quarters of fiscal 2025 was driven by gains on sale-leaseback transactions. As a percentage of revenue, other income (expense), net remained consistent with the comparable period.
Depreciation and amortization expense: Depreciation and amortization expense decreased $10.6 million, or 15.2%, from the first two quarters of fiscal 2025 to the first two quarters of fiscal 2026. As a percentage of revenue, Depreciation and amortization expense decreased 70 basis points, from 9.2% in the first two quarters of fiscal 2025 to 8.5% in the first two quarters of fiscal 2026, primarily driven by lower finance lease amortization expense and fixed asset impairments taken in the second quarter of fiscal 2025 following the termination of the Business Relationship Agreement with McDonald’s USA.
Interest expense, net: Interest expense, net decreased $3.9 million, or 11.8%, from the first two quarters of fiscal 2025 to the first two quarters of fiscal 2026, primarily driven by a lower average debt balance.
Loss on divestiture of Insomnia Cookies: 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) with no comparable activity in the first two quarters of fiscal 2026.
Income tax (benefit)/expense: Income tax benefit was $0.7 million in the firsttwo quarters of fiscal 2026, while income tax benefit was $23.1 million in the firsttwo quarters of fiscal 2025. The variance was primarily driven by the WKS Refranchising and the refranchising of Japan and an increase in pre-tax results in the first two quarters of fiscal 2026.
Results of Operations by Segment – Two Quarters ended June 28, 2026 compared to the Two Quarters ended June 29, 2025
The following table presents Adjusted EBITDA by segment for the periods indicated:
| Two Quarters Ended · Change | ||||
|---|---|---|---|---|
| (in thousands, except percentages) | June 28, 2026 | June 29, 2025 | $ | % |
| U.S. | $39,301 | $25,841 | $13,460 | 52.1% |
| International | 28,654 | 33,118 | (4,464) | -13.5% |
| Market Development | 31,020 | 19,995 | 11,025 | 55.1% |
| Corporate | (37,073) | (34,863) | (2,210) | -6.3% |
| Total Adjusted EBITDA (1) | $61,902 | $44,091 | $17,811 | 40.4% |
(1) Refer to “Key Performance Indicators and Non-GAAP Measures” above for a reconciliation of Adjusted EBITDA to net loss.
U.S. segment Adjusted EBITDA increased $13.5 million, or 52.1%, primarily driven by increased operational efficiencies. The margin increase of 450 basis points to 10.0% in the first two quarters of fiscal 2026 compared to the first two quarters of fiscal 2025 was primarily driven by increased operational efficiencies across operating expenses and SG&A as we continue to deliver on our turnaround plan.
International segment Adjusted EBITDA decreased $4.5 million, or 13.5%, with margin decline of 130 basis points to 11.8% in the first two quarters of fiscal 2026 compared to the first two quarters of fiscal 2025, as lower transaction volume continued to impact operating leverage for the International equity markets, particularly the U.K.
Market Development segment Adjusted EBITDA increased $11.0 million, or 55.1%, impacted by franchise acquisitions in fiscal 2026. The margin decrease of 500 basis points to 50.7% in the first two quarters of fiscal 2026 compared to the first two quarters of fiscal 2025 was driven mainly by increased revenues from the WKS Refranchising and the refranchising of Japan.
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. 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.
As of June 28, 2026, the principal amount outstanding under our 2023 Facility was $791.9 million. The decrease from the 2023 Facility balance as of December 28, 2025 was primarily driven by proceeds from the refranchising transactions completed in the first quarter of fiscal 2026 which were used to pay down debt. Refer to Note 10, Long-Term Debt, to the Condensed Consolidated Financial Statements for further information.
We had cash and cash equivalents of $21.8 million and $42.4 million as of June 28, 2026 and December 28, 2025, respectively. We believe that our existing cash and cash equivalents and available borrowing capacity under our credit facilities discussed above will be sufficient to fund our operating and capital needs for at least the next twelve months. 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 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.
Dividend Policy
In line with our capital allocation priorities and growth strategy, the Company does not currently pay cash dividends to holders of the Company’s common stock.
Cash Flows
We have historically generated cash from operations and have 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:
| Two Quarters Ended | ||
|---|---|---|
| (in thousands) | June 28, 2026 | June 29, 2025 |
| Net cash provided by/(used for) operating activities | $9,961 | $(53,377) |
| Net cash provided by/(used for) investing activities | 67,989 | 30,937 |
| Net cash (used for)/provided by financing activities | $(98,902) | $16,248 |
Operating Activities
Cash provided by operations totaled $10.0 million for the first two quarters of fiscal 2026, a fluctuation of $63.3 million compared with the first two quarters of fiscal 2025, primarily due to an increase in operational efficiencies as we continue to deliver on our turnaround plan.
Investing Activities
Cash provided by investing activities totaled $68.0 million for the first two quarters of fiscal 2026, an increase of $37.1 million compared with the first two quarters of fiscal 2025. The cash provided by investing activities in the first two quarters of fiscal 2026 was primarily due to the refranchising transactions discussed in Note 3, Acquisitions and Divestitures, to the Condensed Consolidated Financial Statements, partially offset by the settlement of the liability to KK Canada discussed in Note 18, Redeemable Noncontrolling Interests, to the Condensed Consolidated Financial Statements, and cash for capital expenditures. As part of our turnaround plan, we expect to reduce capital investment by using existing assets and focusing on franchise development.
Financing Activities
Cash used for financing activities totaled $98.9 million for the first two quarters of fiscal 2026, a fluctuation of $115.2 million compared with the first two quarters of fiscal 2025, primarily driven by the repayment of long-term debt balances with a portion of the net proceeds received from the refranchising transactions discussed in Note 3, Acquisitions and Divestitures, to the Condensed Consolidated Financial Statements.
Debt
Our long-term debt obligations consist of the following:
| (in thousands) | June 28, 2026 | December 28, 2025 |
|---|---|---|
| 2023 Facility — term loan | $721,901 | $742,825 |
| 2023 Facility — revolving credit facility | 70,000 | 157,500 |
| Short-term lines of credit | 12,892 | 2,514 |
| Less: Debt issuance costs | (2,234) | (2,904) |
| Deferred financing obligations | 1,024 | — |
| Finance lease obligations | 61,667 | 77,894 |
| Total long-term debt | 865,250 | 977,829 |
| Less: Current portion of long-term debt | (71,036) | (65,977) |
| Long-term debt, less current portion | $794,214 | $911,852 |
2023 Secured Credit Facility
As of June 28, 2026, the 2023 Facility consisted 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 10, Long-Term Debt, to the Condensed 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 3.9 to 1.00 as of the end of the second quarter of fiscal 2026 compared to 4.4 to 1.00 as of the end of fiscal 2025.
We were in compliance with the financial covenants related to the 2023 Facility as of June 28, 2026. If we are unable to meet the 2023 Facility financial or other covenants in future periods, it could limit our ability to draw on the revolving credit facility, could result in the lenders accelerating the maturity of such indebtedness and foreclosing upon the collateral pledged thereunder, and could require the replacement of the 2023 Facility with new sources of financing, which we may be unable to secure on favorable terms or at all, any of which could negatively impact our liquidity.
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%.
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