RRGB Filings — Red Robin Gourmet Burgers, Inc.

RRGB Filings — Red Robin Gourmet Burgers, Inc. - FilingSpy

10-Q · Quarter ended Jul 12, 2026 · SEC filing ↗

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Management's Discussion and Analysis

Forward-Looking Statements Certain information and statements contained in this report are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 codified at Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Forward-looking statements include statements regarding our expectations, beliefs, intentions, plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements which are other than statements of historical facts. These statements may be identified, without limitation, by the use of forward-looking terminology such as "anticipate," "assume," "believe," "could," "estimate," "expect," "future," "intend," "may," "plan," "project," "will," "would," and similar expressions. Forward-looking statements in this report relate to, among other things: our business objectives and strategic plans; strategies with respect to financial flexibility and potential capital raising transactions; our refranchising transactions and initiatives; our refinancing efforts; our financial condition, including working capital, and the ability of our future cash flows from restaurant operations and our borrowing capacity to satisfy our anticipated cash requirements and fund capital expenditures; our expectations about pricing and restaurant operating costs, including labor, food, supplies, and other commodities, as well as interest rates, and our ability to mitigate potential increases in such costs; our expectations about anticipated uses of, and risks associated with, future cash flows, liquidity, capital expenditures, other capital deployment opportunities, and taxes; the seasonality of our business; and our purchase commitments and lease and litigation contingencies and the adequacy of our reserves for legal matters. Although we believe the expectations reflected in our forward-looking statements are based on reasonable assumptions, such expectations may prove to be materially incorrect due to known and unknown risks and uncertainties. In some cases, information regarding certain important factors that could cause actual results to differ materially from a forward-looking statement appears together with such statement. In addition, the factors described under Item 1A, Risk Factors, as well as other possible factors not listed, could cause actual results to differ materially from those expressed in forward-looking statements, including, without limitation, the effectiveness of the Company's strategic initiatives, including our First Choice plan, labor and service models, and operational improvement initiatives and our ability to execute on such strategic initiatives; the global and domestic economic and geopolitical environment; our ability to effectively compete in the industry and attract and retain guests; our ability to extend or refinance our maturing indebtedness; the adequacy of cash flows and the cost and availability of capital or credit facility borrowings; our ability to service our debt and comply with the covenants in our credit facility; a privacy or security breach or a failure of our information technology systems; the effectiveness and timing of the Company's marketing and branding strategies and impact on reputation, including the loyalty program and social media platforms; changes in consumer preferences; costs associated with our lease obligations, including those incurred through closures and sale-leaseback transactions, as well as potential contingent lease liability; changes in cost and availability of commodities and the uncertain impact of tariffs or other potential disruptions in the supply chain; interruptions in the delivery of food and other products from third parties; pricing increases and labor costs; changes in consumer behavior or preference; aging technology infrastructure; our ability to successfully complete tactical refranchising initiatives and on favorable terms; maintaining and improving our existing restaurants; potential acquisitions, dispositions, or refranchising of our restaurants; our geographic concentration in the Western United States; the retention of our management team; our compensation strategy including availability of equity-based compensation for our management team; our ability to recruit, staff, train, and retain our workforce; operating conditions, including adverse weather conditions, natural disasters, pandemics, and other events affecting the regions where our restaurants are operated; actions taken by our franchisees that could harm our business or reputation; negative publicity regarding food safety or health concerns; protection of our intellectual property rights; changes in laws and regulations affecting the operation of our restaurants; volatility in our stock price; and an increase in litigation or legal claims by team members, franchisees, customers, vendors, stockholders, and others; and the other Risk Factors described from time to time in our filings with the Securities and Exchange Commission, including our Annual Report on Form 10-K for the fiscal year ended December 28, 2025. All forward-looking statements speak only as of the date made. All subsequent written and oral forward-looking statements attributable to us, or persons acting on our behalf, are expressly qualified in their entirety by the cautionary statements. Except as required by law, we undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which it is made or to reflect the occurrence of anticipated or unanticipated events or circumstances. 17 Table of Contents Management's Discussion and Analysis of Financial Condition and Results of Operations provides a narrative of our financial performance and condition that should be read in conjunction with the accompanying Condensed Consolidated Financial Statements. References to the second quarter of fiscal 2026 and fiscal 2025 refer to the twelve weeks ended July 12, 2026 and July 13, 2025, respectively. Description of Business Red Robin Gourmet Burgers, Inc., a Delaware corporation, is the parent company for Red Robin International, Inc., a Nevada corporation, that together with its subsidiaries ("Red Robin," "we," "us," "our," or the "Company"), primarily operates, franchises, and develops casual dining restaurants with 465 locations in North America. As of July 12, 2026, the Company operated 375 Company-owned restaurants located in 39 states. The Company also had 90 franchised restaurants in 13 states and one Canadian province as of July 12, 2026. The Company operated its business as one operating and one reportable segment. Our primary source of revenue is from the sale of food and beverages at Company-owned restaurants. We also earn revenue from royalties and fees from franchised restaurants. Results for the Fiscal Second Quarter of 2026, Compared to the Fiscal Second Quarter of 2025: •Total revenues were $277.6 million, a decrease of $6.1 million. •Comparable restaurant revenue(1) increased 1.3%, excluding the impact of deferred loyalty revenue. •Net income was $0.4 million, compared to net income of $4.0 million last year, a $3.6 million decrease. •Adjusted EBITDA(2) was $18.9 million compared to $22.4 million last year, a 16% decrease. Results for the Year to Date Period of Fiscal 2026, Compared to the Year to Date Period of Fiscal 2025: •Total revenues were $655.9 million, a decrease of $20.2 million. •Comparable restaurant revenue(1) increased 0.2%, excluding the impact of deferred loyalty revenue. •Net loss was $1.8 million, compared to net income of $5.2 million last year, a $7.0 million decrease. •Adjusted EBITDA(2) was $46.2 million compared to $50.3 million last year, an 8% decrease. (1) Comparable restaurant revenue represents revenue from Company-owned restaurants that have operated for at least 18 months as of the beginning of the period presented, excluding the impact of deferred loyalty revenue. See below for reconciliation to restaurant revenues. (2) Adjusted EBITDA is a Non-GAAP measure. See "Non-GAAP Financial Measures" for more details and a reconciliation of Net Income (loss) to Adjusted EBITDA. 18 Table of Contents Key Performance Indicators Restaurant revenue, compared to the same quarter in the prior year, is presented in the table below: (Dollars in millions) Twelve Weeks Ended Twenty-Eight Weeks Ended Restaurant revenue for the period ended July 13, 2025 $ 279.3 $ 665.1 Change in comparable restaurant revenue 3.6 1.6 Change in non-comparable restaurant revenue (9.8) (23.2) Change in deferred loyalty revenue (0.5) 0.2 Total change $ (6.7) (21.4) Restaurant revenue for the period ended July 12, 2026 $ 272.6 $ 643.7 Restaurant Data The following table details restaurant unit data for our Company-owned and franchised locations for the periods presented: Twelve Weeks Ended Twenty-Eight Weeks Ended July 12, 2026 July 13, 2025 July 12, 2026 July 13, 2025 Company-owned: Beginning of period 379 401 385 407 Closed (4) (4) (10) (10) End of period 375 397 375 397 Franchised: Beginning of period 90 90 90 91 Closed — — — (1) End of period 90 90 90 90 Total number of restaurants, end of period 465 487 465 487 19 Table of Contents The following table presents total Company-owned and franchised restaurants by state or province as of July 12, 2026: Company-Owned Restaurants Franchised Restaurants State: Alabama 3 Alaska 3 Arizona 17 1 Arkansas 2 California 54 Colorado 21 Connecticut 3 Delaware 4 Florida 16 Georgia 6 Idaho 8 Illinois 11 Indiana 10 Iowa 5 Kansas 5 Kentucky 3 Louisiana 1 Maine 2 Maryland 9 Massachusetts 5 Michigan 19 Minnesota 3 Missouri 7 3 Montana 1 Nebraska 4 Nevada 6 New Hampshire 3 New Jersey 6 1 New Mexico 3 New York 14 North Carolina 16 Ohio 14 3 Oklahoma 4 Oregon 15 5 Pennsylvania 11 20 Rhode Island 1 South Carolina 4 South Dakota 1 Tennessee 7 Texas 16 9 Utah 1 5 Virginia 17 Washington 35 Wisconsin 11 Province: British Columbia 11 Total 375 90 20 Table of Contents Results of Operations Operating results for each fiscal period presented below are expressed as a percentage of total revenues, except for the components of restaurant operating costs, which are expressed as a percentage of restaurant revenue. Certain percentage amounts in the table below do not total due to rounding as well as restaurant operating costs being expressed as a percentage of restaurant revenue and not total revenues. This information has been prepared on a basis consistent with our audited fiscal 2025 annual financial statements, and, in the opinion of management, includes all adjustments necessary for a fair presentation of the information for the periods presented. Our operating results may fluctuate significantly as a result of a variety of factors, and operating results for any period presented are not necessarily indicative of results for a full fiscal year. Twelve Weeks Ended Twenty-Eight Weeks Ended July 12, 2026 July 13, 2025 July 12, 2026 July 13, 2025 Revenues: Restaurant revenue 98.2 % 98.5 % 98.1 % 98.4 % Franchise revenue 1.3 1.1 1.3 1.1 Other revenue 0.5 0.4 0.6 0.5 Total revenues 100.0 % 100.0 % 100.0 % 100.0 % Costs and expenses: Restaurant operating costs(1) (excluding depreciation and amortization shown separately below): Cost of sales 23.5 % 23.3 % 23.4 % 23.0 % Labor 35.6 35.7 35.6 36.5 Other operating 17.8 17.8 17.7 17.6 Occupancy 8.5 8.7 8.5 8.5 Total restaurant operating costs 85.3 % 85.5 % 85.3 % 85.6 % Depreciation and amortization 3.5 4.1 3.8 4.0 General and administrative 6.3 6.1 6.2 6.6 Selling 3.7 2.2 3.6 2.3 Other (gains) charges, net 0.4 (0.1) 0.9 0.1 Income (loss) from operations 2.2 % 3.5 % 1.8 % 2.8 % Other (income) expense: Interest expense 2.1 % 2.1 % 2.1 % 2.1 % Interest (income) and other, net 0.1 — — — Income (loss) before income taxes 0.1 % 1.4 % (0.3) % 0.8 % Income tax (benefit) expense — — — — Net income (loss) 0.1 % 1.4 % (0.3) % 0.8 % (1) Expressed as a percentage of restaurant revenue. 21 Table of Contents Revenues Twelve Weeks Ended Twenty-Eight Weeks Ended (Dollars in thousands, excluding average weekly net sales) July 12, 2026 July 13, 2025 Percent Change July 12, 2026 July 13, 2025 Percent Change Restaurant revenue $ 272,620 $ 279,305 (2.4) % $ 643,720 $ 665,115 (3.2) % Franchise revenue 3,638 3,186 14.2 % 8,570 7,675 11.7 % Other revenue 1,383 1,212 14.1 % 3,611 3,265 10.6 % Total revenues $ 277,641 $ 283,703 (2.1) % $ 655,901 $ 676,055 (3.0) % Average weekly net sales volumes in Company-owned restaurants(1) $ 60,315 $ 60,856 (0.9) % $ 60,540 $ 61,402 (1.4) % Total operating weeks 4,520 4,764 (5.1) % 10,633 11,281 (5.7) % (1) Average weekly net sales volumes represent the total restaurant revenue for all Company-owned Red Robin restaurants for each time period presented, divided by the number of operating weeks in the period. Restaurant revenue, which was comprised primarily of food and beverage sales, decreased $6.7 million, or 2.4%, in the second quarter of fiscal 2026, as compared to the comparable period of fiscal 2025. Comparable restaurant revenue increased $3.6 million, or 1.3%, inclusive of a 0.2% decrease in guest count, offset in part by a 1.5% increase in average guest check. The non-comparable portion of the decrease in restaurant revenue was $9.8 million, due to the closure of 22 locations since the second quarter of fiscal 2025. The impact of deferred loyalty revenue was a decrease of $0.5 million. Restaurant revenue decreased $21.4 million, or 3.2%, in the year to date period of fiscal 2026, as compared to the comparable period of fiscal 2025. Comparable restaurant revenue increased $1.6 million, or 0.2%, inclusive of a 1.0% decrease in guest count, offset by a 1.2% increase in average guest check. The non-comparable portion of the decrease in restaurant revenue was $23.2 million, due to the closure of 22 locations since the second quarter of fiscal 2025. The impact of deferred loyalty revenue was an increase of $0.2 million. Franchise revenue primarily included royalty income and advertising fund contributions. Franchise revenue increased by $0.5 million, or 14.2%, in the second quarter of fiscal 2026 compared to the same period of fiscal 2025, primarily due to an increase in the franchisee contribution rate for marketing programs. Franchise restaurants reported an increase in comparable restaurant revenue in the second quarter of fiscal 2026 compared to the same period in fiscal 2025. Franchise revenue increased by $0.9 million, or 11.7%, in the year to date period of fiscal 2026 compared to the year to date period of fiscal 2025, primarily due to an increase in the franchisee contribution rate for marketing programs. Franchise restaurants reported an increase in comparable restaurant revenue in the year to date of fiscal 2026 compared to the same period in fiscal 2025. Other revenue increased $0.2 million and $0.3 million in the second quarter and in the year to date period, respectively, of fiscal 2026 compared to the same periods of fiscal 2025. The increase for both periods was primarily related to higher gift card breakage in the current year. Cost of Sales Twelve Weeks Ended Twenty-Eight Weeks Ended (In thousands, except percentages) July 12, 2026 July 13, 2025 Percent Change July 12, 2026 July 13, 2025 Percent Change Cost of sales $ 64,086 $ 65,159 (1.6) % $ 150,686 $ 153,186 (1.6) % As a percent of restaurant revenue 23.5 % 23.3 % 0.2 % 23.4 % 23.0 % 0.4 % Cost of sales, which was comprised of food and beverage costs, was variable and generally fluctuated with sales volume. Cost of sales as a percentage of restaurant revenue increased 20 basis points in the second quarter of fiscal 2026 as compared to the corresponding period of fiscal 2025. The increase was primarily driven by commodity price inflation, partially offset by menu pricing, supply chain cost savings, and timing of vendor contributions to support our annual Partner recognition events, which are recorded as a reduction to cost of sales. Cost of sales as a percentage of restaurant revenue increased 40 basis points in the year to date period of fiscal 2026 as compared to the year to date period of fiscal 2025. The increase was primarily driven by commodity price inflation, partially offset by menu pricing and supply chain cost savings. 22 Table of Contents Labor Twelve Weeks Ended Twenty-Eight Weeks Ended (In thousands, except percentages) July 12, 2026 July 13, 2025 Percent Change July 12, 2026 July 13, 2025 Percent Change Labor $ 96,972 $ 99,709 (2.7) % $ 229,365 $ 242,767 (5.5) % As a percent of restaurant revenue 35.6 % 35.7 % (0.1) % 35.6 % 36.5 % (0.9) % Labor costs included restaurant-level hourly wages and management salaries as well as related taxes and benefits. Labor as a percentage of restaurant revenue decreased ten basis points in the second quarter of fiscal 2026 compared to the same period in fiscal 2025. The decrease was primarily driven by improved hourly labor efficiency and the increase in average guest check, partially offset by wage inflation. Labor as a percentage of restaurant revenue decreased 90 basis points in the year to date period of fiscal 2026 compared to the year to date period of fiscal 2025. The decrease was primarily driven by improved hourly and management labor efficiency and the increase in average guest check, partially offset by wage inflation and deleverage from reduced guest counts. Other Operating Twelve Weeks Ended Twenty-Eight Weeks Ended (In thousands, except percentages) July 12, 2026 July 13, 2025 Percent Change July 12, 2026 July 13, 2025 Percent Change Other operating $ 48,403 $ 49,600 (2.4) % $ 114,107 $ 117,132 (2.6) % As a percent of restaurant revenue 17.8 % 17.8 % — % 17.7 % 17.6 % 0.1 % Other operating costs included costs such as repair and maintenance costs, restaurant supplies, utilities, restaurant technology, and other miscellaneous costs. Other operating costs as a percentage of restaurant revenue remained flat in the second quarter of fiscal 2026 compared to the same period in fiscal 2025. This was primarily driven by an increase in average guest check, offset by higher restaurant supplies costs and increased utilities costs. Other operating costs as a percentage of restaurant revenue increased ten basis points in the year to date period of fiscal 2026 compared to the same period in fiscal 2025. The increase was primarily driven by higher restaurant supplies costs, increased utilities costs, and higher third-party commission expenses, partially offset by an increase in average guest check and cost savings initiatives. Occupancy Twelve Weeks Ended Twenty-Eight Weeks Ended (In thousands, except percentages) July 12, 2026 July 13, 2025 Percent Change July 12, 2026 July 13, 2025 Percent Change Occupancy $ 23,077 $ 24,329 (5.1) % $ 54,723 $ 56,526 (3.2) % As a percent of restaurant revenue 8.5 % 8.7 % (0.2) % 8.5 % 8.5 % — % Occupancy costs included fixed rents, property taxes, common area maintenance charges, general liability insurance, contingent rents, and other property costs. Occupancy costs as a percentage of restaurant revenue in the second quarter of fiscal 2026 decreased 20 basis points compared to the same period in fiscal 2025. The decrease was primarily driven by reduced rent associated with the closure of 22 locations since the second quarter of fiscal 2025 and an increase in average guest check, offset by higher general liability insurance claim activity. Occupancy costs as a percentage of restaurant revenue in the year to date period of fiscal 2026 remained flat compared to the same period in fiscal 2025. This was primarily driven by reduced rent associated with the closure of 22 locations since the year to date period of fiscal 2025 and an increase in average guest check, offset by higher general liability insurance claims activity. 23 Table of Contents Depreciation and Amortization Twelve Weeks Ended Twenty-Eight Weeks Ended (In thousands, except percentages) July 12, 2026 July 13, 2025 Percent Change July 12, 2026 July 13, 2025 Percent Change Depreciation and amortization $ 9,747 $ 11,579 (15.8) % $ 25,010 $ 27,013 (7.4) % As a percent of total revenues 3.5 % 4.1 % (0.6) % 3.8 % 4.0 % (0.2) % Depreciation and amortization included depreciation on capital expenditures for restaurants and corporate assets as well as amortization of reacquired franchise rights, leasehold interests, and certain liquor licenses. Depreciation and amortization expense as a percentage of revenue decreased 60 basis points and 20 basis points in the second quarter and year to date periods of fiscal 2026, respectively, compared to the corresponding periods in fiscal 2025. The decrease was primarily driven by the suspension of depreciation on assets classified as held for sale, as well as restaurant closures and asset impairments. General and Administrative Expenses Twelve Weeks Ended Twenty-Eight Weeks Ended (In thousands, except percentages) July 12, 2026 July 13, 2025 Percent Change July 12, 2026 July 13, 2025 Percent Change General and administrative $ 17,627 $ 17,418 1.2 % $ 40,719 $ 44,408 (8.3) % As a percent of total revenues 6.3 % 6.1 % 0.2 % 6.2 % 6.6 % (0.4) % General and administrative costs included all corporate and administrative functions. Components of this category include restaurant support center, regional, and franchise support salaries and benefits, travel and meetings, professional and consulting fees, corporate information systems, legal expenses, and office rent. General and administrative costs in the second quarter of fiscal 2026 were $17.6 million, an increase of $0.2 million compared to the comparable period in fiscal 2025. The increase was primarily driven by liability classified award stock-based compensation expense and the timing of corporate events, partially offset by a reduction in team member costs associated with lower headcount. General and administrative costs in the year to date period of fiscal 2026 were $40.7 million, a decrease of $3.7 million compared to the comparable period in fiscal 2025. The decrease was primarily driven by a reduction in corporate expenses and a reduction in team member costs associated with lower headcount. Selling Expenses Twelve Weeks Ended Twenty-Eight Weeks Ended (In thousands, except percentages) July 12, 2026 July 13, 2025 Percent Change July 12, 2026 July 13, 2025 Percent Change Selling $ 10,366 $ 6,350 63.2 % $ 23,613 $ 15,726 50.2 % As a percent of total revenues 3.7 % 2.2 % 1.5 % 3.6 % 2.3 % 1.3 % Selling costs were comprised of all marketing and advertising costs. Selling costs in the second quarter and year to date periods of fiscal 2026 were $10.4 million and $23.6 million, respectively, representing an increase of $4.0 million and $7.9 million compared to the corresponding periods in fiscal 2025. The increase in both periods was primarily driven by paid media spend in the current fiscal quarter as we continue to support our ongoing marketing strategy, partially offset by lower production costs. Other (Gains) Charges, net Twelve Weeks Ended Twenty-Eight Weeks Ended (In thousands) July 12, 2026 July 13, 2025 July 12, 2026 July 13, 2025 Asset impairment and restaurant closure costs, net $ 641 $ (1,615) $ 2,394 $ (1,405) Gain on sale of restaurant property (900) — (900) (1,137) Severance and executive transition 1,112 459 1,182 1,339 Litigation contingencies 33 11 120 23 Asset disposal and other, net 233 889 3,153 1,600 Other (gains) charges, net $ 1,119 $ (256) $ 5,949 $ 420 For further information on other (gains) charges line items, refer to Note 6. Other (Gains) Charges, net and Note 9. Fair Value Measurements of the Notes to the Condensed Consolidated Financial Statements. 24 Table of Contents Interest Expense Interest expense for the second quarter of fiscal 2026 and fiscal 2025 was $5.7 million and $5.8 million, respectively. The $0.1 million decrease was primarily due to a decrease in the weighted-average effective interest rate to 13.5% in the second quarter of fiscal 2026 compared to 14.3% in the second quarter of fiscal 2025. Average outstanding debt was $178.4 million and $176.2 million for the second quarter of fiscal 2026 and fiscal 2025, respectively. Interest expense for the year to date period of fiscal 2026 and fiscal 2025 was $13.5 million and $13.9 million, respectively. The $0.4 million decrease was primarily due to lower outstanding debt, which was $179.8 million in the year to date period of fiscal 2026 compared to $182.8 million in the year to date period of fiscal 2025. Additionally, the weighted-average effective interest rate decreased to 13.5% in the year to date period of 2026 from 14.2% in the year to date period of fiscal 2025. Income Tax (Benefit) Expense The taxes recognized in the second quarter and year to date periods of fiscal 2026 and fiscal 2025 were immaterial as the Company has net operating losses and tax credits to reduce current taxes and a full valuation allowance against all deferred taxes, which collectively minimize the taxes paid and recognized. 25 Table of Contents Non-GAAP Financial Measures In addition to the results provided in accordance with accounting principles generally accepted in the United States of America ("GAAP"), we provide certain non-GAAP measures, which present operating results on an adjusted basis. These are supplemental measures of performance that are not required by or presented in accordance with GAAP and include the following: (i) Restaurant level operating profit, (ii) net income (loss) before interest expense, income taxes, and depreciation and amortization ("EBITDA"), (iii) adjusted EBITDA, and (iv) adjusted net income (loss) per diluted share. We believe that our use of non-GAAP financial measures permits investors to assess the operating performance of our business relative to our performance based on GAAP results and relative to other companies within the restaurant industry by isolating the effects of certain items that may vary from period to period without correlation to core operating performance or that vary widely among similar companies. We believe that the disclosure of these non-GAAP measures is useful to investors as they form part of the basis for how our management team and our Board of Directors evaluate our operating performance, allocate resources and establish employee incentive plans. Determination of these adjustments involves the application of judgment, therefore these non-GAAP financial measures are not intended to replace GAAP financial measures, and they are not necessarily standardized or comparable to similarly titled measures used by other companies. Refer to the reconciliations of non-GAAP measures for descriptions of the actual adjustments made in the current period and the corresponding prior period. Restaurant Level Operating Profit The Company believes restaurant level operating profit is an important measure for management and investors because it is widely regarded in the restaurant industry as a useful metric by which to evaluate restaurant level operating efficiency and performance. The Company defines restaurant level operating profit to be income from operations less franchise revenue and other revenue, plus other (gains) charges, net, selling, general and administrative, and depreciation and amortization. The measure includes restaurant level occupancy costs that include fixed rents, percentage rents, common area maintenance charges, real estate and personal property taxes, general liability insurance, and other property costs, but excludes depreciation and amortization expense, substantially all of which is related to restaurant level assets, because such expenses represent historical sunk costs which do not reflect current cash outlay for the restaurants. The measure also excludes costs associated with selling, general and administrative functions, as well as other (gains) charges, net because these costs are non-operating and therefore not related to the ongoing operations of its restaurants. Restaurant level operating profit is not a measurement determined in accordance with GAAP and should not be considered in isolation, or as an alternative, to income (loss) from operations as an indicator of financial performance. Restaurant level operating profit as presented may not be comparable to other similarly titled measures of other companies in the Company's industry. The following table reconciles income (loss) from operations to restaurant level operating profit in thousands and, except as noted, in percent of total revenue for the periods presented: Twelve Weeks Ended Twenty-Eight Weeks Ended (Dollars in thousands) July 12, 2026 July 13, 2025 July 12, 2026 July 13, 2025 Income (loss) from operations $ 6,244 2.2% $ 9,815 3.5% $ 11,729 1.8% $ 18,877 2.8% Less: Franchise revenue $ 3,638 1.3% $ 3,186 1.1% $ 8,570 1.3% $ 7,675 1.1% Other revenue 1,383 0.5 1,212 0.4 3,611 0.6 3,265 0.5 Add: Other (gains) charges, net $ 1,119 0.4% $ (256) (0.1)% $ 5,949 0.9% $ 420 0.1% General and administrative 17,627 6.3 17,418 6.1 40,719 6.2 44,408 6.6 Selling 10,366 3.7 6,350 2.2 23,613 3.6 15,726 2.3 Depreciation and amortization 9,747 3.5 11,579 4.1 25,010 3.8 27,013 4.0 Restaurant level operating profit $ 40,082 14.7% $ 40,508 14.5% $ 94,839 14.7% $ 95,504 14.4% Income (loss) from operations as a percentage of total revenues 2.2% 3.5% 1.8% 2.8% Restaurant level operating profit margin (as a percentage of restaurant revenue) 14.7% 14.5% 14.7% 14.4% 26 Table of Contents A summary view of restaurant level operating profit by financial statement line item and related restaurant level operating expenses as a percentage of restaurant revenue are presented in the tables below: Twelve Weeks Ended Twenty-Eight Weeks Ended (Dollars in thousands) July 12, 2026 July 13, 2025 Increase(Decrease) July 12, 2026 July 13, 2025 Increase(Decrease) Restaurant revenue $ 272,620 $ 279,305 (2.4) % $ 643,720 $ 665,115 (3.2) % Restaurant operating costs: Cost of sales $ 64,086 $ 65,159 (1.6) % $ 150,686 $ 153,186 (1.6) % Labor 96,972 99,709 (2.7) 229,365 242,767 (5.5) Other operating 48,403 49,600 (2.4) 114,107 117,132 (2.6) Occupancy 23,077 24,329 (5.1) 54,723 56,526 (3.2) Total restaurant operating costs $ 232,538 $ 238,797 (2.6) % $ 548,881 $ 569,611 (3.6) % Restaurant level operating profit $ 40,082 $ 40,508 (1.1) % $ 94,839 $ 95,504 (0.7) % Twelve Weeks Ended Twenty-Eight Weeks Ended (Dollars in thousands) July 12, 2026 July 13, 2025 Increase (Decrease) July 12, 2026 July 13, 2025 Increase (Decrease) Restaurant revenue $ 272,620 $ 279,305 (2.4) % $ 643,720 $ 665,115 (3.2) % Restaurant operating costs: (Percentage of Restaurant Revenue) (Basis Points) (Percentage of Restaurant Revenue) (Basis Points) Cost of sales 23.5 % 23.3 % 20 23.4 % 23.0 % 40 Labor 35.6 35.7 (10) 35.6 36.5 (90) Other operating 17.8 17.8 — 17.7 17.6 10 Occupancy 8.5 8.7 (20) 8.5 8.5 — Total restaurant operating costs 85.3 % 85.5 % (20) 85.3 % 85.6 % (30) Restaurant level operating profit 14.7 % 14.5 % 20 14.7 % 14.4 % 30 Certain percentage and basis point amounts in the table above do not total due to rounding as well as restaurant operating costs being expressed as a percentage of restaurant revenue and not total revenues. 27 Table of Contents EBITDA and Adjusted EBITDA We define EBITDA as net income (loss) before interest expense, income taxes, and depreciation and amortization. Adjusted EBITDA is EBITDA, further adjusted to exclude the impact of non-operating items including changes in estimates, asset impairments, litigation contingencies, gains (losses) on debt extinguishment, restaurant and office closure costs, gains (losses) on restaurant sales, severance and executive transition costs, stock-based compensation expense and other non-cash or discrete items. EBITDA and adjusted EBITDA are supplemental measures of our performance that we believe give the reader additional insight into the ongoing operational results of the Company. The following table reconciles net income (loss) to adjusted EBITDA in thousands for the periods presented: Twelve Weeks Ended Twenty-Eight Weeks Ended (Dollars in thousands) July 12, 2026 July 13, 2025 July 12, 2026 July 13, 2025 Net income (loss) as reported $ 386 $ 3,993 $ (1,792) $ 5,242 Interest expense, net(1) 5,644 5,721 13,348 13,685 Income tax (benefit) expense (9) (97) 20 (99) Depreciation and amortization 9,747 11,579 25,010 27,013 EBITDA $ 15,768 $ 21,196 $ 36,586 $ 45,841 Stock-based compensation expense(2) $ 2,035 $ 1,489 $ 3,699 $ 4,078 Other (gains) charges, net: Asset impairment and restaurant closure costs, net $ 641 $ (1,615) $ 2,394 $ (1,405) Gain on sale of restaurant property (900) — (900) (1,137) Severance and executive transition 1,112 459 1,182 1,339 Litigation contingencies 33 11 120 23 Asset disposal and other, net 233 889 3,153 1,600 Adjusted EBITDA $ 18,922 $ 22,429 $ 46,234 $ 50,339 (1) Interest expense, net was comprised of interest expense and interest income, the latter of which was included in interest (income) and other, net on the Condensed Consolidated Statements of Operations and Comprehensive Income (Loss). (2) Consists of compensation expense associated with stock-based awards including phantom awards that may be settled in stock or cash at the Company’s option and SARs, which are settled in cash. 28 Table of Contents Adjusted Net Income (loss) Per Diluted Share We define adjusted net income (loss) per diluted share as net income (loss) excluding the impact of non-operating items including changes in estimates, asset impairments, litigation contingencies, gains (losses) on debt extinguishment, restaurant and office closure costs, gains (losses) on restaurant sales, severance and executive transition costs, stock-based compensation expense and other non-cash or discrete items; net of income tax impacts. Adjusted net income (loss) per share - diluted is a supplemental measure of our performance that we believe gives the reader additional insight into the ongoing operational results of the Company. The following table reconciles net income (loss) per share - diluted to adjusted net income (loss) per share - diluted: Twelve Weeks Ended Twenty-Eight Weeks Ended (Dollars and shares in thousands, except per share amounts) July 12, 2026 July 13, 2025 July 12, 2026 July 13, 2025 Net income (loss) as reported $ 386 $ 3,993 $ (1,792) $ 5,242 Adjusted net income (loss) per diluted share: Net income (loss) as reported $ 0.02 $ 0.21 $ (0.10) $ 0.28 Effect of dilutive securities excluded under GAAP(1) — — 0.02 — Stock-based compensation expense(2) 0.09 0.08 0.17 0.22 Other (gains) charges, net: Asset impairment and restaurant closure costs, net 0.03 (0.09) 0.11 (0.08) Gain on sale of restaurant property (0.04) — (0.04) (0.06) Severance and executive transition 0.05 0.02 0.05 0.07 Litigation contingencies — — 0.01 — Asset disposal and other, net 0.01 0.06 0.15 0.09 Income tax effect(3) (0.04) (0.02) (0.12) (0.06) Adjusted net income (loss) per share - diluted $ 0.12 $ 0.26 $ 0.25 $ 0.46 Weighted-average shares outstanding: Basic 18,727 17,799 18,380 17,655 Adjusted diluted(1) 21,870 18,925 21,679 18,598 (1) Dilutive securities were included in the computation of adjusted net income (loss) per share - diluted for the twenty-eight weeks ended July 12, 2026, because the Company reported an adjusted net income for the period. This differs from the GAAP net income (loss) per share - diluted calculation seen on the Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) as the Company reported a net loss for the twenty-eight weeks ended July 12, 2026. (2) Consists of compensation expense associated with stock-based awards including phantom awards that may be settled in stock or cash at the Company’s option and SARs, which are settled in cash. (3) Assumed a 26% income tax rate, representing a blended average of federal and state statutory rates. 29 Table of Contents Liquidity and Capital Resources Cash and cash equivalents, and restricted cash increased $3.0 million to $32.5 million as of July 12, 2026, from $29.5 million at the beginning of the fiscal year. As of July 12, 2026, the Company had approximately $47.8 million in liquidity, including cash and cash equivalents and $25.0 million available borrowing capacity under our credit facility. Our primary sources of liquidity were cash flows generated from operating activities, availability under our revolving credit facility, and proceeds from restaurant sales, as discussed further below. Our main requirements for liquidity included operating expenses, capital expenditures for restaurant investment, investments in technology, and interest payments on our debt. We have, and in the future may continue to have, negative working capital balances, which is common for many restaurant companies. We can operate with a working capital deficit because cash from restaurant sales is usually received before the related payables for food inventory, supplies, and labor become due. From time to time, the Company considers and evaluates financial and capital raising transactions related to its portfolio, including debt refinancing or new debt issuances, equity issuances, sales of owned properties and tactical refranchising, and other transactions. During the second quarter of fiscal 2026, the Company entered into three asset purchase agreements to refranchise 116 Company-owned restaurants for aggregate consideration of approximately $96.0 million, subject to customary closing adjustments and conditions. The transactions are expected to close during fiscal 2026. Upon closing, the restaurants will continue operating as Red Robin restaurants under franchise agreements. The Company expects to use the net proceeds primarily to repay outstanding borrowings under its Credit Facility and enhance financial flexibility. We believe that our current cash and cash equivalents, our future cash flows generated from restaurant operations and gift card sales, and our borrowing capacity under the credit facility, will be sufficient to meet our anticipated working capital and capital expenditure needs for the next 12 months. Cash Flows The table below summarizes our cash flows from operating, investing, and financing activities for each period presented (in thousands): Twenty-Eight Weeks Ended July 12, 2026 July 13, 2025 Net cash provided by (used in) operating activities $ 14,501 $ 29,511 Net cash provided by (used in) investing activities (6,082) (12,382) Net cash provided by (used in) financing activities (5,434) (22,987) Net change in cash and cash equivalents, and restricted cash $ 2,985 $ (5,858) Operating Cash Flows Net cash flows provided by operating activities decreased $15.0 million to $14.5 million for the year to date period of fiscal 2026 compared to $29.5 million for the comparable period in fiscal 2025. The decrease in net cash provided by operating activities is primarily attributable to the decrease in working capital. 30 Table of Contents Investing Cash Flows Net cash flows used in investing activities was $6.1 million for the year to date period of fiscal 2026, as compared to net cash flows used in investing activities of $12.4 million for the comparable period in fiscal 2025. The $6.3 million decrease in cash flows used in investing activities is primarily due to lower capital expenditures in fiscal 2026 compared to the year to date period of fiscal 2025. The following table lists the components of our capital expenditures for the periods presented (in thousands): Twenty-Eight Weeks Ended July 12, 2026 July 13, 2025 Restaurant improvement capital and other(1) $ 8,621 $ 9,648 Technology, infrastructure, and other(2) 2,482 8,815 Restaurant refreshes and remodels 403 37 Total capital expenditures $ 11,506 $ 18,500 (1) Restaurant improvement capital and other consisted of capital equipment for our restaurants. (2) Technology, infrastructure and other consisted of capital costs related to restaurant technology assets, capital overhead, and other centrally developed assets. Financing Cash Flows Net cash flows used in financing activities was $5.4 million for the year to date period of fiscal 2026, as compared to net cash flows used in financing activities of $23.0 million for the comparable period in fiscal 2025. Cash flows used in financing activities in the year to date period of fiscal 2026 primarily relate to the net repayments of debt under our revolving credit facility. Cash flows used in financing activities in the comparable period in fiscal 2025 primarily relate to the net repayments of debt under our credit facility with cash flow from operations and the net proceeds from the sale of three restaurant locations. Credit Facility As of July 12, 2026, the Company's credit facility allowed for up to $225.0 million of borrowings and is comprised of a $25.0 million revolving line of credit and a $200.0 million term loan (collectively, the "Credit Facility"). As of July 12, 2026 and December 28, 2025, the Company had outstanding borrowings of $167.2 million and $170.2 million, respectively, inclusive of $0.0 million and $3.0 million drawn on its revolving line of credit, respectively, under its Credit Facility. In addition, the Company had amounts issued under letters of credit of $9.3 million and $9.3 million as of July 12, 2026 and December 28, 2025, respectively. The Credit Facility will mature on September 3, 2027. The term loan requires quarterly principal payments in an aggregate annual amount equal to 1.0% of its original principal amount. As of July 12, 2026, the Company has fulfilled this obligation for the duration of the Credit Facility via previous principal payments. The Credit Facility's interest rate references the Secured Overnight Financing Rate ("SOFR"), which is an index calculated by short-term repurchase agreements and backed by U.S. Treasury securities, or the Alternate Base Rate ("ABR"), which represents the highest of (a) the Prime Rate, (b) the Federal Funds Rate plus 0.5% per annum, or (c) one-month term SOFR plus 1.0% per annum. For additional information regarding our Credit Facility, see Note 7. Borrowings included within the Notes to the Condensed Consolidated Financial Statements. Debt Covenants We are subject to a number of customary covenants under our Credit Facility, including limitations on additional borrowings, acquisitions, stock repurchases, sales of assets, and dividend payments, as well as a net total leverage ratio covenant. As of July 12, 2026, we were in compliance with all debt covenants. Sale and Purchases of Equity Securities On November 10, 2025, the Company entered into the Distribution Agreement with Evercore to establish an at-the-market equity offering program. The Company voluntarily terminated the program on February 23, 2026, without any issuances or sales. 31 Table of Contents On August 9, 2018, the Company's board of directors authorized the Company's current share repurchase program of up to a total of $75 million of the Company's common stock. The share repurchase authorization will terminate upon completing repurchases of $75 million of common stock unless otherwise terminated by the board. Pursuant to the repurchase program, purchases may be made from time to time at the Company's discretion and the Company is not obligated to acquire any particular amount of common stock. From the date of the current program approval through July 12, 2026, we have repurchased a total of 1,088,588 shares at an average price of $15.18 per share for an aggregate amount of $16.5 million. The Company completed no share repurchases during the periods presented. Accordingly, as of July 12, 2026, we had $58.5 million of availability under the current share repurchase program. Our Credit Agreement limits our ability to repurchase shares to certain conditions set forth by the lenders in the Credit Facility. Seasonality Our business is subject to seasonal fluctuations. Sales in most of our restaurants have historically been higher during the spring and summer months and winter holiday season. The timing of holidays and school vacations, as well as severe storms, extended periods of inclement weather, or climate extremes, may affect the seasonal operating results in the areas impacted. As a result, our quarterly operating results may fluctuate significantly due to seasonality, and the seasonal patterns of sales may shift over time. Accordingly, results for any one quarter or year are not necessarily indicative of results to be expected for any other quarter or year. Contractual Obligations There were no other material changes outside the ordinary course of business to our contractual obligations since the filing of the Annual Report on Form 10-K for the fiscal year ended December 28, 2025. See Note 10. Commitments and Contingencies for further information. Critical Accounting Estimates Critical accounting estimates are those we believe are both significant and that require us to make difficult, subjective, or complex judgments, often because we need to estimate the effect of inherently uncertain matters. We base our estimates and judgments on historical experiences and various other factors we believe to be appropriate under the circumstances. Actual results may differ from these estimates, including our estimates of future restaurant level cash flows, which are subject to the current economic environment and potentially unknown future events, and we might obtain different results if we use different assumptions or conditions. We had no significant changes in our critical accounting estimates which were disclosed in our Annual Report on Form 10-K for the fiscal year ended December 28, 2025. 32 Table of Contents

Quantitative and Qualitative Disclosures About Market Risk

Interest Rate Risk Under our Credit Facility, we are exposed to market risk from changes in interest rates on borrowings. Borrowings under the Credit Facility are subject to rates based on SOFR plus a spread based on leverage or a base rate plus a spread based on leverage. The base rate is the highest of (a) the Prime Rate, (b) the Federal Funds Rate plus 0.5% per annum, or (c) one-month term SOFR plus 1.0% per annum. As of July 12, 2026, we had $167.2 million of borrowings subject to variable interest rates. A 1.0% change in the effective interest rate applied to these loans would have resulted in a pre-tax interest expense fluctuation of $1.7 million on an annualized basis. We continue to monitor our interest rate risk on an ongoing basis and may use interest rate swaps or similar instruments in the future to manage our exposure to interest rate changes related to our borrowings as the Company deems appropriate. Commodity Price Risks We purchase food, supplies and other commodities for use in our operations based on prices established with our suppliers. Many of the commodities purchased by us are subject to volatility due to market supply and demand factors outside of our control, including the price of other commodities, weather, seasonality, production, trade policy, and other factors. To manage this risk in part, we enter into fixed-price purchase commitments for certain commodities. We believe that substantially all of our food and supplies meeting our specifications are available from alternate sources, which we have identified to diversify our supply chain to mitigate our overall commodity risk. We may or may not have the ability to increase menu prices, or vary menu items, in response to commodity price increases. There has been no material change in the interest rate risk or commodity price risk since the filing of the Company's Annual Report on Form 10-K for the fiscal year ended December 28, 2025.

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Risk Factors

Risk factors associated with our business are contained in Item 1A, "Risk Factors," of our Annual Report on Form 10-K for the fiscal year ended December 28, 2025, filed with the SEC on February 25, 2026. Except as set forth below, there have been no material changes from the risk factors disclosed in our Annual Report on Form 10-K. The risk factors set forth below amend and restate in their entirety the corresponding risk factors disclosed in our Annual Report on Form 10-K. Our tactical refranchising initiatives, including our pending refranchising transactions, may not be completed on favorable terms or completed at all and may not result in the anticipated financial benefits. As part of our First Choice plan, we are pursuing tactical refranchising opportunities to optimize our overall financing structure and strengthen our balance sheet. During the second quarter of fiscal 2026, we entered into three asset purchase agreements to sell restaurant assets associated with 116 of our 375 Company-owned restaurants for aggregate consideration of approximately $96.0 million in cash. None of the transactions had closed as of July 12, 2026, and each is subject to separate closing conditions, including required landlord consents, liquor license transfers, any required lender consent, and each purchaser obtaining financing. See Note 3. Significant Transactions. Tactical refranchising initiatives require significant management time and resources and may divert attention from day-to-day operations and other strategic priorities. The timing, pricing, and structure of any tactical refranchising transactions depend on market conditions. There are a number of risks associated with these transactions, including the difficulty of predicting the ultimate costs and net proceeds of the sales, employee termination costs, the retention of restaurant team members through the transition to franchisee management, the results of negotiations with landlords, the effect of the sales on our ongoing operations, the tax consequences of the sales, and the future effect on our revenues, operating income, cash flows, and depreciation. If a transaction is delayed or terminated, we would continue to operate the affected restaurants and bear the related costs and lease obligations, and assets classified as held for sale would be reclassified. We may also remain primarily or secondarily liable on restaurant leases assigned or subleased to the purchasers, including where a purchaser is unable to obtain a full release from the landlord, and the amount of any liabilities to be recognized for those continuing obligations has not yet been determined. Substantially all of our revenues are currently derived from sales at Company-owned restaurants. Any such transactions are expected to result in a shift from Company-owned restaurant revenues to franchise royalty income and advertising fund contributions, and we expect our total revenues to decrease as a result. Because the royalty and advertising fund contributions we will receive will represent a percentage of franchisee sales rather than the restaurant-level operating profit those restaurants previously generated, and because a substantial portion of our general and administrative expenses may not decline in proportion to the reduction in the number of restaurants we operate, the effect of the transactions on our operating income may be greater than their effect on our revenues. If our tactical refranchising initiatives are unsuccessful or do not achieve intended objectives, including improvements in liquidity and reductions in general and administrative expenses and long term debt, our business, financial condition, and results of operations could be materially adversely affected. 34 Table of Contents Our franchisees could take actions that could harm our business, expose us to liability, or damage our reputation. Franchisees are independent entities and are not our employees, partners, or affiliates. If our pending refranchising transactions are completed, our franchised restaurant base will increase from 90 to 206 restaurants and we will rely more on franchisees to operate restaurants in compliance with our brand standards, operating procedures, and applicable law. If our franchisees are not successful, then our business, results of operations, and reputation could be disproportionately adversely affected by the relative scale of such franchise operations. We share with our franchisees what we believe to be best practices in the restaurant industry; however, franchisees operate their restaurants as independent businesses. Consequently, the quality of franchised restaurant operations may be diminished by any number of factors beyond our control. Moreover, franchisees may not successfully operate restaurants in a manner consistent with our standards and requirements or may not hire and train qualified managers and other restaurant team members. In addition, as independent businesses, franchisees may not be required to comply with the same levels of business or regulatory compliance we are. While we try to ensure the quality of our brand and compliance with our operating standards, and the confidentiality thereof, are maintained by all of our franchisees, we cannot provide assurance our franchisees will avoid actions that negatively affect the reputation of Red Robin or the value of our proprietary information. Our image and reputation and the image and reputation of other franchisees may suffer materially, and system-wide sales could significantly decline if our franchisees do not operate restaurants according to our standards. Following the refranchising transactions we will receive a greater portion of our revenues in the form of royalties and advertising fund contributions based on a percentage of sales at franchised restaurants, and a majority of our franchised restaurants would be operated by a small number of franchisees, several of which would each operate a significant number of our franchised restaurants. Accordingly, our financial results will to a greater extent depend upon the operational and financial success of our franchisees. If a significant franchisee, or a number of our franchisees in the aggregate, becomes financially distressed, our royalty and other revenues may decline, our receivables from franchisees and the related allowance for credit losses may increase, and advertising fund contributions supporting the Red Robin brand may be reduced. Our ability to enforce our rights under the franchise agreements may also be limited in the event of a franchisee bankruptcy or insolvency proceeding. We are subject to federal and state laws that regulate the offer and sale of franchises and aspects of the licensor-licensee relationship. Further, there have been historical actions before the National Labor Relations Board ("NLRB") where it was alleged that a parent company could be held liable for the actions of its franchisees, including potentially jointly liable for labor and wage violations by its franchisees. Failure to comply with the laws and regulations governing our franchisee relationships or adverse decisions similar to the above-described NLRB actions could subject us to liability for actions of the franchisees, or expose us to liability to franchisees, or fines and penalties for non-compliance.