Total Revenue

Declined by 7.7% (from $309.03M to $285.27M)

Total revenue fell by 7.7% YoY largely due to a decline in restaurant sales that were not fully offset by the strong performance in franchise revenue. This decline is consistent with the company’s previous challenges in driving guest traffic and potential adjustments in promotional strategies seen in earlier quarters. " "

Restaurant Revenue

Declined by 6.7% (from $300.99M to $280.67M)

Restaurant revenue dropped by 6.7% YoY, reflecting lower guest counts and possible pricing or promotion adjustments, similar to patterns observed in prior periods when discount promotions were curtailed and operational changes were implemented. " "

Franchise Revenue

Increased by 220% (from $3.64M to $11.66M)

Franchise revenue surged by 220% YoY thanks to a significant increase in franchisee contributions and potentially revised fee structures, marking a notable turnaround from the previous period despite overall revenue pressures on company-operated locations. " "

Operating Income

Deteriorated from a loss of $7.96M to $33.53M

Operating income worsened dramatically (over 320% deterioration) due to higher labor, occupancy, and general administrative expenses, as well as the absence of one-time gains (like sale-leaseback gains) that had previously helped cushion losses. This sharp decline mirrors adverse trends seen earlier when cost pressures intensified. " "

Net Income

Worsened from $13.73M profit to a loss of $39.72M

Net income reversed sharply (a 189% decline YoY) as the operating challenges escalated without the benefit of prior period gains, indicating that higher costs and lower operating profitability have significantly impacted the bottom line compared to the healthy performance seen previously. " "

EPS – Basic

Dropped from -$0.87 to -$2.48

EPS declined by approximately 185% YoY in line with the larger net losses, reflecting the compounded impact of worsening operating performance and increased expenses that adversely affected per-share earnings compared to the prior quarter. " "

Total Revenue

FY 2025

no prior guidance

Between $1.225 billion and $1.25 billion "

no prior guidance

Restaurant-Level Operating Profit

FY 2025

no prior guidance

12% to 13% "

no prior guidance

Adjusted EBITDA (excluding noncash stock-based compensation)

FY 2025

no prior guidance

Between $60 million and $65 million "

no prior guidance

Capital Expenditures

FY 2025

no prior guidance

Between $25 million and $30 million "

no prior guidance

Noncash Stock-Based Compensation Expense

FY 2025

no prior guidance

Estimated at $9 million to $10 million "

no prior guidance

Cash Interest Expense

FY 2025

no prior guidance

Approximately $24 million "

no prior guidance

Restaurant Closures

FY 2025

no prior guidance

10 to 15 restaurants " "

no prior guidance

Comparable Sales and Traffic Trends

Q1 saw a significant decline in comparable sales followed by sequential improvements with traffic stabilization ( " " ). In Q2, there were modest increases mixed with industry challenges ( " ). Q3 featured modest growth driven by guest check increases and efforts to close a traffic gap ( " " ).

In Q4, a solid 3.4% increase in comparable restaurant revenue, driven by a higher guest check average and a 600 basis point improvement in traffic trends were reported ( " " ).

Positive momentum with consistent focus on reversing earlier soft performance. The narrative shifts from modest or mixed results to robust sequential improvements.

Loyalty Programs and Customer Engagement

In Q1, the program was revamped with features like bottomless rewards and a 10% membership growth ( " ). Q2 emphasized a relaunched loyalty program with significantly higher sign-ups and enhanced engagement metrics ( " ). Q3 showed strong sign-up momentum and impressive reengagement numbers with targeted initiatives ( " ).

Q4 continued this trajectory with a 13% increase in loyalty transactions, a significant membership base (14.9 million), and enhanced personalized communication driving traffic growth ( " " " ).

Consistent and accelerating growth. Both engagement and membership expansion have improved over time through enhanced personalization and data-driven initiatives.

Margin Improvement Strategies and Cost Optimization

Q1 detailed aggressive cost savings initiatives that generated incremental savings and debt reduction efforts ( " " ). Q2 discussed efforts around labor investments, supply chain rationalization, and cost structure adjustments ( " " ). Q3 focused on tools like Hot Schedules and supply chain efficiency to bolster margins ( " ).

Q4 emphasized labor efficiency as the primary margin driver, outlined operational tools and dashboards, and noted complementary pricing actions to offset inflation ( " " " ).

Ongoing focus with increased emphasis on labor efficiency. Cost optimization initiatives have evolved and remain central to the strategy across all periods.

Underperforming Restaurant Performance and Store Closures

Q3 identified approximately 70 underperforming restaurants dragging down operating profit (215–210 basis points) with limited mention in Q1 and Q2 ( " " ).

Q4 provided more detailed disclosures on these 70 restaurants causing a loss and laid out plans to close 10–15 stores in 2025, including impairments and sale agreements for select locations ( " " ).

From identification to action planning. The discussion has evolved from noting underperformance in Q3 to detailing concrete closure plans in Q4.

Debt Management, Free Cash Flow Generation and Refinancing

Q1 highlighted sale-leaseback transactions to reduce debt and maintained a solid cash position ( " ). Q2 detailed a credit amendment to expand the revolver and set the stage for refinancing ( " " ). Q3 focused on further credit agreement amendments to extend flexibility ( " ).

Q4 reiterated a strong focus on debt reduction by using free cash flow, exploring real estate monetization, and positioning for refinancing as the term loan maturity approaches ( " " ).

Consistent focus on deleveraging and liquidity. The approach has remained steady while evolving with strategic free cash flow initiatives to support refinancing efforts.

Operational Initiatives and Employee Compensation Programs

Q1 emphasized robust operational improvements—with service enhancements, the addition of servers, bussers, and over 250 kitchen managers—and introduced a new partner compensation program to drive accountability ( " " ). Q2 reinforced food quality enhancements, improved staffing, and the reduction in incentive accruals ( " " ). Q3 noted further investments in labor productivity and operational tools ( " ).

Q4 lacks detailed updates on employee compensation programs; instead, it broadly mentions ongoing operational improvements focused on labor efficiency with less emphasis on compensation specifics ( " " ).

Recurring operational improvements persist while detailed updates on employee compensation are less emphasized in Q4. The focus remains on efficiency without granular compensation detail.

Cost Pressures from Labor, Commodities, and Discounting

Q1 acknowledged rising labor costs due to strategic staffing investments and noted near-term pressures from additional claims ( " " " ). Q2 provided a detailed discussion on labor cost pressures, commodity inflation (notably for ground beef and produce), and efforts to reduce deep discounting ( " " " ). Q3 continued highlighting labor pressures, supply chain savings, and the impact of higher discounting ( " " ).

Q4 revisited these themes by noting ongoing labor efficiency improvements, projecting a 3% inflation in the commodity basket (with offsetting trends), and mentioning an increase in discounting by about 120 basis points ( " " " ).

Continued cost challenges with evolving mitigation strategies. While inflation and discounting pressures persist, operational efficiencies and supplier consolidation efforts are actively offsetting these challenges.

Guest Satisfaction and Service Quality

Q1 reported significant increases in satisfaction scores across platforms with strong operational and marketing initiatives, including improved wait times and manager engagement ( " " ). Q2 saw satisfaction scores at parity with the industry along with marked improvements in service quality ( " " ). Q3 described record-high OSAT scores fueled by loyalty program impacts ( " " ).

Q4 highlighted that dine-in guest satisfaction scores improved by approximately 8 percentage points versus 2023, achieving the highest levels since 2017 with better scores on value metrics ( " " ).

Robust and continuous improvements. Guest satisfaction and service quality have steadily risen, validating the consistent operational enhancements over all periods.