Item 1. Financial Statements.

Domino’s Pizza, Inc. and Subsidiaries

Conden****sed Consolidated Balance Sheets

(Unaudited)

(In thousands)		March 22, 2026				December 28, 2025
Assets
Current assets:
Cash and cash equivalents		$	232,922			$	125,675
Restricted cash and cash equivalents			183,628				216,110
Accounts receivable, net			306,098				315,958
Inventories			69,154				79,189
Prepaid expenses and other			41,377				39,767
Advertising fund assets, restricted			115,814				117,502
Total current assets			948,993				894,201
Property, plant and equipment:
Land and buildings			171,913				105,559
Leasehold and other improvements			202,801				193,673
Equipment			397,671				413,303
Construction in progress			28,848				46,184
			801,233				758,719
Accumulated depreciation and amortization			(414,503	)			(434,697	)
Property, plant and equipment, net			386,730				324,022
Other assets:
Operating lease right-of-use assets			238,908				219,485
Goodwill			10,689				10,726
Capitalized software, net			158,768				159,256
Investment in DPC Dash			30,080				36,070
Deferred income tax assets, net			18,634				22,101
Other assets			51,686				50,598
Total other assets			508,765				498,236
Total assets		$	1,844,488			$	1,716,459
Liabilities and stockholders’ deficit
Current liabilities:
Current portion of long-term debt		$	7,411			$	6,131
Accounts payable			124,376				135,029
Operating lease liabilities			49,490				47,553
Insurance reserves			26,304				26,169
Dividends payable			68,533				2,714
Advertising fund liabilities			113,449				115,412
Other accrued liabilities			202,437				208,613
Total current liabilities			592,000				541,621
Long-term liabilities:
Long-term debt, less current portion			4,876,122				4,810,683
Operating lease liabilities			202,750				183,917
Insurance reserves			33,614				32,959
Other accrued liabilities			46,775				48,421
Total long-term liabilities			5,159,261				5,075,980
Stockholders’ deficit:
Common stock			335				336
Additional paid-in capital			161				1,910
Retained deficit			(3,902,172	)			(3,898,622	)
Accumulated other comprehensive loss			(5,097	)			(4,766	)
Total stockholders’ deficit			(3,906,773	)			(3,901,142	)
Total liabilities and stockholders’ deficit		$	1,844,488			$	1,716,459

The accompanying notes are an integral part of these condensed consolidated financial statements.

Domino’s Pizza, Inc. and Subsidiaries

Condense****d Consolidated Statements of Income

(Unaudited)

		Fiscal Quarter Ended
		March 22,				March 23,
(In thousands, except per share data)		2026				2025
Revenues:
U.S. Company-owned stores		$	82,098			$	91,598
U.S. franchise royalties and fees			158,014				151,000
Supply chain			698,973				669,924
International franchise royalties and fees			80,980				75,559
U.S. franchise advertising			130,529				123,975
Total revenues			1,150,594				1,112,056
Cost of sales:
U.S. Company-owned stores			72,046				76,911
Supply chain			614,036				591,998
Total cost of sales			686,082				668,909
Gross margin			464,512				443,147
General and administrative			111,406				109,077
U.S. franchise advertising			130,529				123,975
Gain on sale of assets			(7,780	)			—
Income from operations			230,357				210,095
Other (expense) income			(5,990	)			24,027
Interest income			2,502				3,945
Interest expense			(46,227	)			(45,585	)
Income before provision for income taxes			180,642				192,482
Provision for income taxes			40,831				42,831
Net income		$	139,811			$	149,651
Earnings per share:
Common stock - basic		$	4.16			$	4.37
Common stock - diluted		$	4.13			$	4.33

The accompanying notes are an integral part of these condensed consolidated financial statements.

Domino’s Pizza, Inc. and Subsidiaries

Condensed Consolida****ted Statements of Comprehensive Income

(Unaudited)

		Fiscal Quarter Ended
		March 22,				March 23,
(In thousands)		2026				2025
Net income		$	139,811			$	149,651
Currency translation adjustment			(331	)			343
Comprehensive income		$	139,480			$	149,994

The accompanying notes are an integral part of these condensed consolidated financial statements.

Domino’s Pizza, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(Unaudited)

		Fiscal Quarter Ended
		March 22,				March 23,
(In thousands)		2026				2025
Cash flows from operating activities:
Net income		$	139,811			$	149,651
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization			20,434				20,362
Gain on sale of assets			(7,780	)			—
Loss on disposal of assets			357				266
Amortization of debt issuance costs			1,485				1,210
Provision (benefit) for deferred income taxes			3,319				(2,290	)
Non-cash equity-based compensation expense			8,789				10,381
Excess tax benefits from equity-based compensation			(463	)			(1,569	)
Provision (benefit) for losses on accounts and notes receivable			44				(57	)
Unrealized loss (gain) on investments			5,990				(24,027	)
Changes in operating assets and liabilities			(370	)			34,244
Changes in advertising fund assets and liabilities, restricted			(9,661	)			(9,095	)
Net cash provided by operating activities			161,955				179,076
Cash flows from investing activities:
Capital expenditures			(15,043	)			(14,745	)
Proceeds from sale of assets			7,780				—
Other			(804	)			(1,225	)
Net cash used in investing activities			(8,067	)			(15,970	)
Cash flows from financing activities:
Repayments of long-term debt and finance lease obligations			(840	)			(646	)
Proceeds from exercise of stock options			1,892				7,529
Purchases of common stock			(75,098	)			(50,000	)
Tax payments for restricted stock upon vesting			(12,895	)			(8,158	)
Payments of common stock dividends and equivalents			(1,459	)			(617	)
Net cash used in financing activities			(88,400	)			(51,892	)
Effect of exchange rate changes on cash			(108	)			296
Change in cash and cash equivalents, restricted cash and cash equivalents			65,380				111,510
Cash and cash equivalents, beginning of period			125,675				186,126
Restricted cash and cash equivalents, beginning of period			216,110				195,370
Cash and cash equivalents included in advertising fund assets, restricted, beginning of period			92,200				80,928
Cash and cash equivalents, restricted cash and cash equivalents and cash and cash equivalents included in advertising fund assets, restricted, beginning of period			433,985				462,424
Cash and cash equivalents, end of period			232,922				304,320
Restricted cash and cash equivalents, end of period			183,628				197,412
Cash and cash equivalents included in advertising fund assets, restricted, end of period			82,815				72,202
Cash and cash equivalents, restricted cash and cash equivalents and cash and cash equivalents included in advertising fund assets, restricted, end of period		$	499,365			$	573,934

The accompanying notes are an integral part of these condensed consolidated financial statements.

Domino’s Pizza, Inc**. and Subsidiaries**

Notes to Condensed Consolidated Financial Statements

(Unaudited; tabular amounts in thousands, except share and per share amounts)

March 22, 2026

1. Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. Additionally, the condensed consolidated balance sheet at December 28, 2025 has been derived from the audited consolidated financial statements at that date but does not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. Certain captions have been conformed to the current period presentation. For further information, refer to the consolidated financial statements and footnotes for the fiscal year ended December 28, 2025 included in the Company’s 2025 Annual Report on Form 10-K, filed with the Securities and Exchange Commission on February 23, 2026 (the “2025 Form 10-K”).

In the opinion of management, all adjustments, consisting of normal recurring items, considered necessary for a fair statement have been included. Operating results for the first quarter ended March 22, 2026 are not necessarily indicative of the results that may be expected for the 53-week fiscal year ending January 3, 2027.

2. Segment Information

The Company has three reportable segments: (i) U.S. stores; (ii) supply chain; and (iii) international franchise.

The Company’s operations are organized by management on the combined basis of line of business and geography. The U.S. stores segment includes operations with respect to all franchised and Company-owned stores throughout the U.S. The supply chain segment primarily includes the distribution of food and, to a lesser extent, other products, from the Company’s supply chain center operations in the U.S. and Canada. The international franchise segment includes operations related to the Company’s franchising business in foreign markets. The Company’s chief operating decision maker is its Chief Executive Officer, and beginning in the first quarter of 2026, he evaluates the performance of the Company’s segments and allocates resources to them based on Segment Adjusted Income from Operations which represents income from operations for the reportable segments, excluding gains and losses from the sale of assets, refranchising gains and losses and certain corporate administrative costs that have not been allocated to a reportable segment. The Company’s chief operating decision maker uses Segment Adjusted Income from Operations to determine future business objectives and targets and for long-range planning for the reportable segments, as well as to evaluate their operating performance.

The tables below summarize the financial information, including revenues, significant segment expenses, Segment Adjusted Income from Operations, capital expenditures and depreciation and amortization, concerning the Company’s reportable segments for the first quarters ended March 22, 2026 and March 23, 2025. Intersegment revenues are comprised of sales of food and, to a lesser extent, other products, from the supply chain segment to the Company-owned stores in the U.S. stores segment. Intersegment sales prices are market based.

		Fiscal Quarter Ended March 22, 2026
		U.S. Stores				Supply Chain				International Franchise				Total
U.S. Company-owned stores		$	82,098			$	—			$	—			$	82,098
U.S. franchise royalties and fees			158,014				—				—				158,014
Supply chain			—				724,414				—				724,414
Supply chain - intersegment revenues			—				(25,441	)			—				(25,441	)
International franchise royalties and fees			—				—				80,980				80,980
U.S. franchise advertising			130,529				—				—				130,529
Segment revenues		$	370,641			$	698,973			$	80,980			$	1,150,594
Cost of sales - food			24,935				489,102				—				514,037
Cost of sales - labor			27,239				64,379				—				91,618
Cost of sales - other (1)			19,873				60,554				—				80,427
U.S. franchise advertising			130,529				—				—				130,529
General and administrative (2)			35,696				19,426				11,474				66,596
Segment Adjusted Income from Operations		$	132,369			$	65,512			$	69,506			$	267,387
Segment capital expenditures (3)		$	2,670			$	5,248			$	—			$	7,918
Segment depreciation and amortization (4)		$	2,558			$	9,753			$	18			$	12,329

Significant segment expenses and Segment Adjusted Income from Operations in the table below for the first quarter ended March 23, 2025 have been recast to reflect the change in the measure of segment profit used by the Company’s chief operating decision maker.

		Fiscal Quarter Ended March 23, 2025
		U.S. Stores				Supply Chain				International Franchise				Total
U.S. Company-owned stores		$	91,598			$	—			$	—			$	91,598
U.S. franchise royalties and fees			151,000				—				—				151,000
Supply chain			—				697,910				—				697,910
Supply chain - intersegment revenues			—				(27,986	)			—				(27,986	)
International franchise royalties and fees			—				—				75,559				75,559
U.S. franchise advertising			123,975				—				—				123,975
Segment revenues		$	366,573			$	669,924			$	75,559			$	1,112,056
Cost of sales - food			27,211				471,616				—				498,827
Cost of sales - labor			29,181				61,882				—				91,063
Cost of sales - other (1)			20,520				58,499				—				79,019
U.S. franchise advertising			123,975				—				—				123,975
General and administrative (2)			36,755				14,321				11,815				62,891
Segment Adjusted Income from Operations		$	128,931			$	63,606			$	63,744			$	256,281
Segment capital expenditures (3)		$	976			$	5,510			$	—			$	6,486
Segment depreciation and amortization (4)		$	2,820			$	9,212			$	35			$	12,067

(1)		Cost of sales - other, includes delivery, occupancy costs (including rent, telephone, utilities, depreciation and amortization) and insurance expense.

(2)		General and administrative expense consists primarily of labor cost, depreciation and amortization, computer expenses, professional fees, travel and entertainment, rent, insurance and other. Gains and losses from the sale of assets and refranchising gains and losses are not included in the measurement of Segment Adjusted Income from Operations. Non-cash equity-based compensation expense is not allocated to the reportable segments.

(3)		The Company also had $8.6 million and $8.7 million of other capital expenditures not attributable to the reportable segments primarily representing capitalized software in the first quarters of 2026 and 2025, respectively.
(4)		Segment depreciation and amortization reflects amounts included within cost of sales - other and general and administrative expenses. The Company also had $8.1 million and $8.3 million of depreciation and amortization expense included in general and administrative expense not allocated to the reportable segments in the first quarters of 2026 and 2025, respectively.

The following table reconciles Segment Adjusted Income from Operations to income before provision for income taxes:

		Fiscal Quarter Ended
		March 22, 2026				March 23, 2025
Segment Adjusted Income from Operations		$	267,387			$	256,281
General and administrative - unallocated (1)			(44,810	)			(46,186	)
Gain on sale of assets			7,780				—
Income from operations			230,357				210,095
Other (expense) income			(5,990	)			24,027
Interest income			2,502				3,945
Interest expense			(46,227	)			(45,585	)
Income before provision for income taxes		$	180,642			$	192,482

(1)		Represents corporate administrative costs that have not been allocated to a reportable segment including labor (including non-cash equity-based compensation expense), depreciation and amortization, computer expenses, professional fees, travel and entertainment, rent, insurance and other corporate administrative costs.

The Company’s chief operating decision maker is not regularly provided financial information related to the assets of the reportable segments, and he does not evaluate their performance or allocate resources to them based on assets. Therefore, total assets by reportable segment are not included in the Company’s segment disclosures.

3. Earnings Per Share

		Fiscal Quarter Ended
		March 22,				March 23,
		2026				2025
Net income available to common stockholders - basic and diluted		$	139,811			$	149,651
Basic weighted average number of shares			33,609,349				34,284,052
Earnings per share – basic		$	4.16			$	4.37
Diluted weighted average number of shares			33,815,028				34,553,820
Earnings per share – diluted		$	4.13			$	4.33

The denominators used in calculating diluted earnings per share for common stock for the first quarters ended March 22, 2026 and March 23, 2025 do not include the following because the effect of including them would be anti-dilutive or because the performance conditions had not yet been met:

		Fiscal Quarter Ended
		March 22,				March 23,
		2026				2025
Anti-dilutive shares underlying stock-based awards
Stock options			198,668				91,269
Restricted stock units			26,548				—
Performance condition not met
Performance-based restricted stock units			46,924				41,957

4. Stockholders’ Deficit

The following table summarizes the changes in stockholders’ deficit for the first quarter of 2026.

																		Accumulated
										Additional								Other
		Common Stock								Paid-in				Retained				Comprehensive
		Shares				Amount				Capital				Deficit				Loss
Balance at December 28, 2025			33,627,992			$	336			$	1,910			$	(3,898,622	)		$	(4,766	)
Net income			—				—				—				139,811				—
Dividends declared on common stock and equivalents ($1.99 per share)			—				—				—				(67,278	)			—
Issuance and cancellation of stock awards, net			89,881				1				—				—				—
Tax payments for restricted stock upon vesting			(32,337	)			—				(337	)			(12,558	)			—
Purchases of common stock			(188,304	)			(2	)			(12,093	)			(63,525	)			—
Exercise of stock options			6,091				—				1,892				—				—
Non-cash equity-based compensation expense			—				—				8,789				—				—
Currency translation adjustment			—				—				—				—				(331	)
Balance at March 22, 2026			33,503,323			$	335			$	161			$	(3,902,172	)		$	(5,097	)

Subsequent to the end of the first quarter of 2026, on April 21, 2026, the Company’s Board of Directors declared a $1.99 per share quarterly dividend on its outstanding common stock for shareholders of record as of June 15, 2026 to be paid on June 30, 2026.

Subsequent to the end of the first quarter of 2026 and through April 21, 2026, the Company repurchased and retired an additional 257,545 shares of common stock for a total of approximately $94.4 million. Subsequent to the end of the first quarter of 2026, on April 21, 2026, the Company’s Board of Directors authorized an additional share repurchase program to repurchase up to $1.0 billion of the Company’s common stock, in addition to the $290.2 million that was previously remaining for a total authorization of $1.29 billion for future share repurchases.

The following table summarizes the changes in stockholders’ deficit for the first quarter of 2025.

																		Accumulated
										Additional								Other
		Common Stock								Paid-in				Retained				Comprehensive
		Shares				Amount				Capital				Deficit				Loss
Balance at December 29, 2024			34,281,927			$	343			$	1,272			$	(3,956,474	)		$	(7,432	)
Net income			—				—				—				149,651				—
Dividends declared on common stock and equivalents ($1.74 per share)			—				—				—				(59,800	)			—
Issuance and cancellation of stock awards, net			54,516				—				—				—				—
Tax payments for restricted stock upon vesting			(18,630	)			—				(8,158	)			—				—
Purchases of common stock			(115,280	)			(1	)			(10,132	)			(40,210	)			—
Exercise of stock options			28,280				—				7,529				—				—
Non-cash equity-based compensation expense			—				—				10,381				—				—
Currency translation adjustment			—				—				—				—				343
Balance at March 23, 2025			34,230,813			$	342			$	892			$	(3,906,833	)		$	(7,089	)

5. Fair Value Measurements

Fair value measurements enable the reader of the financial statements to assess the inputs used to develop those measurements by establishing a hierarchy for ranking the quality and reliability of the information used to determine fair values. The Company classifies and discloses assets and liabilities carried at fair value in one of the following three categories:

Level 1: Quoted market prices in active markets for identical assets or liabilities.

Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data.

Level 3: Unobservable inputs that are not corroborated by market data.

Fair Value of Cash Equivalents and Marketable Securities

The fair values of the Company’s cash equivalents and investments in marketable securities are based on quoted prices in active markets for identical assets.

Fair Value of Investments

The Company holds a non-controlling interest in DPC Dash Ltd (“DPC Dash”), the Company’s master franchisee in China that owns and operates Domino’s Pizza stores in that market. DPC Dash is listed on the Hong Kong Exchange (HK: 1405) and the Company accounts for its investment as a trading security and records it at fair value at the end of each reporting period, with gains and losses recorded in other income or expense in its consolidated statements of income. As of March 22, 2026 and December 28, 2025, the fair value of the Company’s investment in DPC Dash is based on the active exchange quoted price for the equity security (HK$60.40 per share as of March 22, 2026 and HK$71.90 per share as of December 28, 2025). The Company owned 3,901,019 ordinary shares as of March 22, 2026 and December 28, 2025, representing 3.0% of DPC Dash's ordinary shares as of the respective dates.

The Company recorded a negative adjustment to the carrying amount of its investment in DPC Dash of $6.0 million in the first quarter of 2026, with the loss recorded in other expense in its condensed consolidated statements of income. The Company recorded a positive adjustment to the carrying amount of its investment in DPC Dash of $24.0 million in the first quarter of 2025 with the gain recorded in other income in its condensed consolidated statements of income.

The following tables summarize the carrying amounts and fair values of certain assets at March 22, 2026 and December 28, 2025:

		At March 22, 2026
						Fair Value Estimated Using
		Carrying				Level 1				Level 2				Level 3
		Amount				Inputs				Inputs				Inputs
Cash equivalents		$	138,976			$	138,976			$	—			$	—
Restricted cash equivalents			114,793				114,793				—				—
Investments in marketable securities			25,890				25,890				—				—
Advertising fund cash equivalents, restricted			61,749				61,749				—				—
Investment in DPC Dash			30,080				30,080				—				—

		At December 28, 2025
						Fair Value Estimated Using
		Carrying				Level 1				Level 2				Level 3
		Amount				Inputs				Inputs				Inputs
Cash equivalents		$	54,306			$	54,306			$	—			$	—
Restricted cash equivalents			146,517				146,517				—				—
Investments in marketable securities			24,971				24,971				—				—
Advertising fund cash equivalents, restricted			65,604				65,604				—				—
Investment in DPC Dash			36,070				36,070				—				—

Fair Value of Debt

The estimated fair values of the Company’s notes are classified as Level 2 measurements, as the Company estimates the fair value amount by using available market information. The Company obtained quotes from two separate brokerage firms that are knowledgeable about the Company’s notes and, at times, trade these notes. The Company also performed its own internal analysis based on the information gathered from public markets, including information on notes that are similar to those of the Company. However, considerable judgment is required to interpret market data to estimate fair value. Accordingly, the fair value estimates presented are not necessarily indicative of the amount that the Company or the noteholders could realize in a current market exchange. The use of different assumptions and/or estimation methodologies may have a material effect on the estimated fair values stated below.

Management estimated the approximate fair values of the Company’s notes as follows:

		March 22, 2026								December 28, 2025
		Principal Amount				Fair Value				Principal Amount				Fair Value
2017 Ten-Year Notes		$	940,000			$	932,480			$	940,000			$	934,360
2018 9.25-Year Notes			379,000				377,863				379,000				377,863
2019 Ten-Year Notes			648,000				620,784				648,000				624,024
2021 7.5-Year Notes			826,625				782,814				826,625				785,294
2021 Ten-Year Notes			972,500				883,030				972,500				893,728
2025 Five-Year Notes			500,000				494,500				500,000				503,000
2025 Seven-Year Notes			500,000				498,000				500,000				506,000

The Company had no outstanding borrowings under its variable funding notes at March 22, 2026 or December 28, 2025.

6. Leverage Ratio and Debt Classification

While the Company’s senior notes are outstanding, scheduled payments of principal and interest are required to be made on a quarterly basis. In accordance with the Company’s debt agreements, the payment of principal on the 2025 Five-Year Notes and the 2025 Seven-Year Notes may be suspended if either the Holdco Leverage Ratio or Senior Leverage Ratio is less than or equal to 5.5x total debt to either Consolidated Adjusted EBITDA or Securitized Net Cash Flow, each as defined in the indenture governing the securitized debt, and no catch-up provisions are applicable. In accordance with the Company’s debt agreements, the payment of principal on the 2021 7.5-Year Notes, 2021 Ten-Year Notes, 2019 Ten-Year Notes, 2018 9.25-Year Notes and 2017 Ten-Year Notes may be suspended if the Holdco Leverage Ratio is less than or equal to 5.0x total debt to Consolidated Adjusted EBITDA, each as defined in the indenture governing the securitized debt, and no catch-up provisions are applicable. As of the end of the first quarter of 2026 and the end of the fourth quarter of 2025, the Company satisfied the non-amortization tests for each respective series of notes, and accordingly, the outstanding principal amounts of the notes have been classified as long-term debt in the condensed consolidated balance sheets as of March 22, 2026 and December 28, 2025.

7. Revenue Disclosures

Contract Liabilities

Contract liabilities primarily consist of deferred franchise fees and deferred development fees. Deferred franchise fees and deferred development fees of $4.8 million were included in current other accrued liabilities as of both March 22, 2026 and December 28, 2025. Deferred franchise fees and deferred development fees of $11.4 million and $12.5 million were included in long-term other accrued liabilities as of March 22, 2026 and December 28, 2025, respectively.

Changes in deferred franchise fees and deferred development fees for the first quarters of 2026 and 2025 were as follows:

		Fiscal Quarter Ended
		March 22,				March 23,
		2026				2025
Deferred franchise fees and deferred development fees, beginning of period		$	17,318			$	20,946
Revenue recognized during the period			(1,686	)			(1,668	)
New deferrals due to cash received and other			592				726
Deferred franchise fees and deferred development fees, end of period		$	16,224			$	20,004

Advertising Fund Assets

As of March 22, 2026, advertising fund assets, restricted of $115.8 million consisted of $82.8 million of cash and cash equivalents, $20.6 million of accounts receivable and $12.4 million of prepaid expenses. As of March 22, 2026, advertising fund cash and cash equivalents included $2.4 million of cash contributed from U.S. Company-owned stores that had not yet been expended.

As of December 28, 2025, advertising fund assets, restricted of $117.5 million consisted of $92.2 million of cash and cash equivalents, $18.4 million of accounts receivable and $6.9 million of prepaid expenses. As of December 28, 2025, advertising fund cash and cash equivalents included $2.1 million of cash contributed from U.S. Company-owned stores that had not yet been expended.

8. Leases

The Company leases certain retail store and supply chain center locations, vehicles, equipment and its corporate headquarters with expiration dates through 2046. Rent expense totaled $22.7 million and $21.8 million in the first quarter of 2026 and the first quarter of 2025, respectively. Rent expense includes operating lease cost, as well as expense for non-lease components including common area maintenance, real estate taxes and insurance for the Company’s real estate leases. Rent expense also includes the variable rate per mile driven and fixed maintenance charges for the Company’s supply chain center tractors and trailers and expense for short-term rentals. Rent expense for certain short-term supply chain center tractor and trailer rentals was $1.0 million and $2.0 million in the first quarter of 2026 and the first quarter of 2025, respectively. Variable rent expense and rent expense for other short-term leases were immaterial in both the first quarter of 2026 and 2025.

The components of operating and finance lease cost for the first quarters of 2026 and 2025 were as follows:

		Fiscal Quarter Ended
		March 22,				March 23,
		2026				2025
Operating lease cost		$	12,574			$	12,112
Finance lease cost:
Amortization of right-of-use assets			1,373				1,258
Interest on lease liabilities			1,220				871
Total finance lease cost		$	2,593			$	2,129

Supplemental balance sheet information related to the Company’s finance leases as of March 22, 2026 and December 28, 2025 was as follows:

		March 22, 2026				December 28, 2025
Land and buildings		$	146,638			$	80,457
Equipment			4,169				4,225
Finance lease assets			150,807				84,682
Accumulated depreciation and amortization			(34,178	)			(32,908	)
Finance lease assets, net		$	116,629			$	51,774
Current portion of long-term debt		$	7,294			$	6,017
Long-term debt, less current portion			119,965				55,991
Total principal payable on finance leases		$	127,259			$	62,008

Supplemental cash flow information related to leases for the first quarters of 2026 and 2025 were as follows:

		Fiscal Quarter Ended
		March 22,				March 23,
		2026				2025
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases		$	11,211			$	10,113
Operating cash flows from finance leases			1,220				871
Financing cash flows from finance leases			823				631
Cash paid for amounts included in the measurement of financing obligation from sale leaseback:
Operating cash flows from sale leaseback			197				198
Financing cash flows from sale leaseback			17				15
Right-of-use assets obtained in exchange for lease obligations:
Operating leases			30,377				15,967
Finance leases			65,589				—

As of March 22, 2026, the Company had additional leases for certain supply chain vehicles that had not yet commenced with estimated future minimum rental commitments of $12.6 million. These leases are expected to commence in 2026 with lease terms of up to 9 years. These undiscounted amounts will be included in the Company’s condensed consolidated balance sheet at the respective commencement dates.

The Company has guaranteed lease payments related to certain franchisees’ lease arrangements. The maximum amount of potential future payments under these guarantees was $11.1 million and $12.6 million as of March 22, 2026 and December 28, 2025, respectively. The Company does not believe these arrangements have or are likely to have a material effect on its results of operations, financial condition, revenues, expenses or liquidity.

9. Supplemental Disclosures of Cash Flow Information

The Company had non-cash investing activities related to accruals for capital expenditures of $4.0 million at March 22, 2026 and $2.4 million at December 28, 2025. The Company also had $0.5 million and $3.3 million in non-cash financing activity related to accruals for excise taxes on share repurchases as of March 22, 2026 and December 28, 2025, respectively.

10. Asset Acquisitions and Dispositions

During the first quarter of 2026, the Company sold its fully depreciated corporate aircraft for net proceeds and a pre-tax realized gain of $7.8 million.

During the first quarter of 2025, the Company purchased two U.S. franchised stores from one of the Company’s former U.S. franchisees for $0.9 million, which was paid in the second quarter of 2025. The Company recorded $0.3 million of intangibles, $0.1 million of equipment and leasehold improvements and $0.5 million of goodwill.

11. New Accounting Pronouncements

The Company has considered all new accounting standards issued by the Financial Accounting Standards Board (“FASB”). The Company has not yet adopted the following standards:

Accounting Standards Update (“ASU”) 2024-03, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40)

In November 2024, the FASB issued ASU 2024-03, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40) (“ASU 2024-03”), which requires disclosure in the notes to the consolidated financial statements on an annual and interim basis, amounts of purchases of inventory, employee compensation, depreciation and intangible asset amortization for all expense captions presented on the face of the consolidated statements of income. The standard also requires a qualitative description of the amounts remaining in those expense captions that are not separately disaggregated. The standard also requires disclosure of the composition and amount of selling expenses.

ASU 2024-03 is effective for annual reporting fiscal years beginning after December 15, 2026 and interim periods within fiscal years beginning after December 15, 2027, and early adoption is permitted. The standard may be adopted either prospectively or retrospectively. The Company is currently evaluating the impact of this accounting standard on its condensed consolidated financial statements.

ASU 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software

In September 2025, the FASB issued ASU 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software (“ASU 2025-06”), to modernize the accounting guidance for the costs to develop software for internal use. The standard applies to costs incurred to develop or obtain software for internal use. ASU 2025-06 amends the existing standard that refers to various stages of a software development project to align better with current software development methods, such as agile programming. Under the new standard, entities will commence capitalizing eligible costs when (i) management has authorized and committed to funding the software project, and (ii) it is probable that the project will be completed and the software will be used to perform the function intended. The new standard also supersedes the guidance related to costs incurred to develop a website.

ASU 2025-06 guidance is effective for annual periods beginning after December 15, 2027. The guidance can be applied on a prospective basis, a modified basis for in-process projects or on a retrospective basis. The Company is currently evaluating the impact of this accounting standard on its condensed consolidated financial statements.