Item 1. Financial Statements.

Domino’s Pizza, Inc. and Subsidiaries

Conden****sed Consolidated Balance Sheets

(Unaudited)

(In thousands)		September 6, 2026				December 28, 2025
Assets
Current assets:
Cash and cash equivalents		$	229,035			$	125,675
Restricted cash and cash equivalents			167,958				216,110
Accounts receivable, net			286,489				315,958
Inventories			89,535				79,189
Prepaid expenses and other			45,775				39,767
Advertising fund assets, restricted			97,983				117,502
Total current assets			916,775				894,201
Property, plant and equipment:
Land and buildings			174,501				105,559
Leasehold and other improvements			186,562				193,673
Equipment			386,709				413,303
Construction in progress			35,110				46,184
			782,882				758,719
Accumulated depreciation and amortization			(407,467	)			(434,697	)
Property, plant and equipment, net			375,415				324,022
Other assets:
Operating lease right-of-use assets			225,213				219,485
Goodwill			7,870				10,726
Capitalized software, net			163,513				159,256
Investment in DPC Dash			15,175				36,070
Deferred income tax assets, net			9,941				22,101
Other assets			52,471				50,598
Total other assets			474,183				498,236
Total assets		$	1,766,373			$	1,716,459
Liabilities and stockholders’ deficit
Current liabilities:
Current portion of long-term debt		$	1,326,786			$	6,131
Accounts payable			132,253				135,029
Operating lease liabilities			46,150				47,553
Insurance reserves			25,822				26,169
Dividends payable			67,553				2,714
Advertising fund liabilities			96,639				115,412
Other accrued liabilities			184,247				208,613
Total current liabilities			1,879,450				541,621
Long-term liabilities:
Long-term debt, less current portion			3,559,118				4,810,683
Operating lease liabilities			189,769				183,917
Insurance reserves			36,419				32,959
Other accrued liabilities			56,715				48,421
Total long-term liabilities			3,842,021				5,075,980
Stockholders’ deficit:
Common stock			329				336
Additional paid-in capital			377				1,910
Retained deficit			(3,950,373	)			(3,898,622	)
Accumulated other comprehensive loss			(5,431	)			(4,766	)
Total stockholders’ deficit			(3,955,098	)			(3,901,142	)
Total liabilities and stockholders’ deficit		$	1,766,373			$	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								Three Fiscal Quarters Ended
		September 6,				September 7,				September 6,				September 7,
(In thousands, except per-share data)		2026				2025				2026				2025
Revenues:
U.S. Company-owned stores		$	61,432			$	82,749			$	225,359			$	266,803
U.S. franchise royalties and fees			165,638				157,155				487,817				464,416
Supply chain			746,154				696,959				2,176,835				2,053,945
International franchise royalties and fees			83,700				78,549				246,502				231,272
U.S. franchise advertising			128,674				131,642				394,106				387,818
Total revenues			1,185,598				1,147,054				3,530,619				3,404,254
Cost of sales:
U.S. Company-owned stores			54,090				69,258				198,653				224,242
Supply chain			655,129				617,894				1,912,847				1,815,993
Total cost of sales			709,219				687,152				2,111,500				2,040,235
Gross margin			476,379				459,902				1,419,119				1,364,019
General and administrative			105,726				105,092				332,505				321,777
U.S. franchise advertising			128,674				131,642				394,106				387,818
Refranchising loss (gain)			206				—				(3,881	)			(3,883	)
Gain on sale of assets			—				—				(7,780	)			—
Income from operations			241,773				223,168				704,169				658,307
Other (expense) income			(2,539	)			(3,017	)			(20,895	)			5,036
Interest income			2,067				4,060				6,182				11,834
Interest expense			(46,227	)			(45,012	)			(138,511	)			(135,245	)
Income before provision for income taxes			195,074				179,199				550,945				539,932
Provision for income taxes			42,895				39,880				123,205				119,871
Net income		$	152,179			$	139,319			$	427,740			$	420,061
Earnings per share:
Common stock – basic		$	4.61			$	4.11			$	12.85			$	12.31
Common stock – diluted		$	4.60			$	4.08			$	12.80			$	12.22

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								Three Fiscal Quarters Ended
		September 6,				September 7,				September 6,				September 7,
(In thousands)		2026				2025				2026				2025
Net income		$	152,179			$	139,319			$	427,740			$	420,061
Currency translation adjustment			626				(618	)			(665	)			2,187
Comprehensive income		$	152,805			$	138,701			$	427,075			$	422,248

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)

		Three Fiscal Quarters Ended
		September 6,				September 7,
(In thousands)		2026				2025
Cash flows from operating activities:
Net income		$	427,740			$	420,061
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization			61,501				61,128
Refranchising gain			(3,881	)			(3,883	)
Gain on sale of assets			(7,780	)			—
Loss on disposal of assets			1,181				703
Amortization of debt issuance costs			4,455				3,768
Provision for deferred income taxes			12,009				9,255
Non-cash equity-based compensation expense			30,843				31,681
Excess tax benefits from equity-based compensation			(1,026	)			(2,751	)
Provision (benefit) for losses on accounts and notes receivable			418				(49	)
Unrealized and realized loss (gain) on investments			20,895				(5,036	)
Changes in operating assets and liabilities			(5,126	)			10,242
Changes in advertising fund assets and liabilities, restricted			(20,628	)			27,137
Net cash provided by operating activities			520,601				552,256
Cash flows from investing activities:
Capital expenditures			(60,829	)			(56,667	)
Proceeds from sale of assets			27,623				8,458
Sale of investments			—				44,085
Other			(961	)			(1,939	)
Net cash used in investing activities			(34,167	)			(6,063	)
Cash flows from financing activities:
Proceeds from issuance of long-term debt			—				1,000,000
Repayments of long-term debt and finance lease obligations			(4,097	)			(1,147,773	)
Proceeds from exercise of stock options			9,205				12,882
Purchases of common stock			(308,239	)			(277,698	)
Tax payments for restricted stock upon vesting			(14,204	)			(10,862	)
Payments of common stock dividends and equivalents			(134,331	)			(119,503	)
Cash paid for financing costs			—				(15,287	)
Net cash used in financing activities			(451,666	)			(558,241	)
Effect of exchange rate changes on cash			(338	)			1,487
Change in cash and cash equivalents, restricted cash and cash equivalents			34,430				(10,561	)
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			229,035				139,728
Restricted cash and cash equivalents, end of period			167,958				202,501
Cash and cash equivalents included in advertising fund assets, restricted, end of period			71,422				109,634
Cash and cash equivalents, restricted cash and cash equivalents and cash and cash equivalents included in advertising fund assets, restricted, end of period		$	468,415			$	451,863

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)

September 6, 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”).

The 2026 and 2025 third quarters and three fiscal quarters referenced herein represent the twelve-week and thirty-six-week periods ended September 6, 2026 and September 7, 2025, respectively. 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 third quarter and three fiscal quarters ended September 6, 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 in 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 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. Beginning in the first quarter of 2026, the measure used by the chief operating decision maker to evaluate segment performance and allocate resources changed to 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 third quarters and three fiscal quarters ended September 6, 2026 and September 7, 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 September 6, 2026
		U.S. Stores				Supply Chain				International Franchise				Total
U.S. Company-owned stores		$	61,432			$	—			$	—			$	61,432
U.S. franchise royalties and fees			165,638				—				—				165,638
Supply chain			—				764,781				—				764,781
Supply chain – intersegment revenues			—				(18,627	)			—				(18,627	)
International franchise royalties and fees			—				—				83,700				83,700
U.S. franchise advertising			128,674				—				—				128,674
Segment revenues		$	355,744			$	746,154			$	83,700			$	1,185,598
Cost of sales – food			18,624				525,015				—				543,639
Cost of sales – labor			19,330				62,382				—				81,712
Cost of sales – other (1)			16,137				67,731				—				83,868
U.S. franchise advertising			128,674				—				—				128,674
General and administrative (2)			35,241				18,489				11,960				65,690
Segment Adjusted Income from Operations		$	137,738			$	72,537			$	71,740			$	282,015
Segment capital expenditures (3)		$	871			$	9,296			$	24			$	10,191
Segment depreciation and amortization (4)		$	1,750			$	11,101			$	12			$	12,863

		Three Fiscal Quarters Ended September 6, 2026
		U.S. Stores				Supply Chain				International Franchise				Total
U.S. Company-owned stores		$	225,359			$	—			$	—			$	225,359
U.S. franchise royalties and fees			487,817				—				—				487,817
Supply chain			—				2,246,054				—				2,246,054
Supply chain – intersegment revenues			—				(69,219	)			—				(69,219	)
International franchise royalties and fees			—				—				246,502				246,502
U.S. franchise advertising			394,106				—				—				394,106
Segment revenues		$	1,107,282			$	2,176,835			$	246,502			$	3,530,619
Cost of sales – food			68,342				1,527,841				—				1,596,183
Cost of sales – labor			71,870				190,275				—				262,145
Cost of sales – other (1)			58,441				194,731				—				253,172
U.S. franchise advertising			394,106				—				—				394,106
General and administrative (2)			110,203				49,577				36,940				196,720
Segment Adjusted Income from Operations		$	404,320			$	214,411			$	209,562			$	828,293
Segment capital expenditures (3)		$	5,850			$	24,451			$	24			$	30,325
Segment depreciation and amortization (4)		$	6,479			$	31,820			$	49			$	38,348

Significant segment expenses and the measure of segment profit in the tables below for the third quarter and three fiscal quarters ended September 7, 2025 have been recast to reflect the change in the measure of segment profit used by the Company’s chief operating decision maker. Segment Adjusted Income from Operations 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.

		Fiscal Quarter Ended September 7, 2025
		U.S. Stores				Supply Chain				International Franchise				Total
U.S. Company-owned stores		$	82,749			$	—			$	—			$	82,749
U.S. franchise royalties and fees			157,155				—				—				157,155
Supply chain			—				722,597				—				722,597
Supply chain – intersegment revenues			—				(25,638	)			—				(25,638	)
International franchise royalties and fees			—				—				78,549				78,549
U.S. franchise advertising			131,642				—				—				131,642
Segment revenues		$	371,546			$	696,959			$	78,549			$	1,147,054
Cost of sales – food			24,613				495,249				—				519,862
Cost of sales – labor			25,541				61,887				—				87,428
Cost of sales – other (1)			19,104				60,758				—				79,862
U.S. franchise advertising			131,642				—				—				131,642
General and administrative (2)			37,010				18,402				11,266				66,678
Segment Adjusted Income from Operations		$	133,636			$	60,663			$	67,283			$	261,582
Segment capital expenditures (3)		$	2,629			$	8,248			$	139			$	11,016
Segment depreciation and amortization (4)		$	2,588			$	9,503			$	14			$	12,105

		Three Fiscal Quarters Ended September 7, 2025
		U.S. Stores				Supply Chain				International Franchise				Total
U.S. Company-owned stores		$	266,803			$	—			$	—			$	266,803
U.S. franchise royalties and fees			464,416				—				—				464,416
Supply chain			—				2,135,164				—				2,135,164
Supply chain – intersegment revenues			—				(81,219	)			—				(81,219	)
International franchise royalties and fees			—				—				231,272				231,272
U.S. franchise advertising			387,818				—				—				387,818
Segment revenues		$	1,119,037			$	2,053,945			$	231,272			$	3,404,254
Cost of sales – food			79,103				1,454,349				—				1,533,452
Cost of sales – labor			82,353				183,793				—				266,146
Cost of sales – other (1)			62,786				177,851				—				240,637
U.S. franchise advertising			387,818				—				—				387,818
General and administrative (2)			113,205				49,025				34,875				197,105
Segment Adjusted Income from Operations		$	393,772			$	188,927			$	196,397			$	779,096
Segment capital expenditures (3)		$	5,588			$	22,834			$	139			$	28,561
Segment depreciation and amortization (4)		$	8,144			$	28,169			$	125			$	36,438

(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 $11.3 million and $11.0 million of other capital expenditures not attributable to the reportable segments primarily representing capitalized software in the third quarters of 2026 and 2025, respectively. The Company had $32.2 million and $29.8 million of other capital expenditures not attributable to the reportable segments primarily representing capitalized software in the three fiscal 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 $7.9 million and $8.3 million of depreciation and amortization expense included in general and administrative expense not allocated to the reportable segments in the third quarters of 2026 and 2025, respectively. The Company also had $23.2 million and $24.7 million of depreciation and amortization expense included in general and administrative expense not allocated to the reportable segments in the three fiscal 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								Three Fiscal Quarters Ended
		September 6, 2026				September 7, 2025				September 6, 2026				September 7, 2025
Segment Adjusted Income from Operations		$	282,015			$	261,582			$	828,293			$	779,096
General and administrative – unallocated (1)			(40,036	)			(38,414	)			(135,785	)			(124,672	)
Refranchising (loss) gain			(206	)			—				3,881				3,883
Gain on sale of assets			—				—				7,780				—
Income from operations			241,773				223,168				704,169				658,307
Other (expense) income			(2,539	)			(3,017	)			(20,895	)			5,036
Interest income			2,067				4,060				6,182				11,834
Interest expense			(46,227	)			(45,012	)			(138,511	)			(135,245	)
Income before provision for income taxes		$	195,074			$	179,199			$	550,945			$	539,932

(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								Three Fiscal Quarters Ended
		September 6,				September 7,				September 6,				September 7,
		2026				2025				2026				2025
Net income available to common stockholders – basic and diluted		$	152,179			$	139,319			$	427,740			$	420,061
Basic weighted average number of shares			33,035,670				33,919,706				33,288,988				34,122,385
Earnings per share – basic		$	4.61			$	4.11			$	12.85			$	12.31
Diluted weighted average number of shares			33,114,893				34,146,418				33,416,210				34,366,396
Earnings per share – diluted		$	4.60			$	4.08			$	12.80			$	12.22

The denominators used in calculating diluted earnings per share for common stock for the third quarters and three fiscal quarters each ended September 6, 2026 and September 7, 2025 do not include the following because the effect of including these shares would be anti-dilutive or because the performance targets for these awards had not yet been met:

		Fiscal Quarter Ended								Three Fiscal Quarters Ended
		September 6,				September 7,				September 6,				September 7,
		2026				2025				2026				2025
Anti-dilutive shares underlying stock-based awards
Stock options			250,330				85,428				250,330				89,147
Restricted stock units			61,024				2,360				61,810				2,360
Performance condition not met
Performance-based restricted stock units			44,102				41,957				44,102				41,957

4. Stockholders’ Deficit

The following tables summarize the changes in stockholders’ deficit for the third quarter and three fiscal quarters of 2026.

																		Accumulated
										Additional								Other
		Common Stock								Paid-in				Retained				Comprehensive
		Shares				Amount				Capital				Deficit				Loss
Balance at June 14, 2026			33,068,845			$	331			$	841			$	(3,977,546	)		$	(6,057	)
Net income			—				—				—				152,179				—
Dividends declared on common stock and equivalents ($1.99 per share)			—				—				—				(65,729	)			—
Issuance and cancellation of stock awards, net			15,656				—				—				—				—
Tax payments for restricted stock upon vesting			(4,289	)			—				(1,341	)			—				—
Purchases of common stock			(216,282	)			(2	)			(15,047	)			(59,277	)			—
Exercise of stock options			30,803				—				6,227				—				—
Non-cash equity-based compensation expense			—				—				9,697				—				—
Currency translation adjustment			—				—				—				—				626
Balance at September 6, 2026			32,894,733			$	329			$	377			$	(3,950,373	)		$	(5,431	)

																		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			—				—				—				427,740				—
Dividends declared on common stock and equivalents ($5.97 per share)			—				—				—				(199,169	)			—
Issuance and cancellation of stock awards, net			108,524				1				—				—				—
Tax payments for restricted stock upon vesting			(36,789	)			—				(1,646	)			(12,558	)			—
Purchases of common stock			(848,503	)			(8	)			(39,935	)			(267,764	)			—
Exercise of stock options			43,509				—				9,205				—				—
Non-cash equity-based compensation expense			—				—				30,843				—				—
Currency translation adjustment			—				—				—				—				(665	)
Balance at September 6, 2026			32,894,733			$	329			$	377			$	(3,950,373	)		$	(5,431	)

Subsequent to the end of the third quarter of 2026, on October 6, 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 December 15, 2026 to be paid on December 30, 2026.

On April 21, 2026, the Company’s Board of Directors approved an addition of $1.0 billion to the $290.2 million that was previously remaining under the Company’s share repurchase program for a total authorization of $1.29 billion for future share repurchases as of that date. As of September 6, 2026, $1.15 billion remained available for future purchases of the Company’s common stock under this share repurchase program.

The following tables summarize the changes in stockholders’ deficit for the third quarter and three fiscal quarters of 2025.

																		Accumulated
										Additional								Other
		Common Stock								Paid-in				Retained				Comprehensive
		Shares				Amount				Capital				Deficit				Loss
Balance at June 15, 2025			33,937,222			$	339			$	843			$	(3,971,182	)		$	(4,627	)
Net income			—				—				—				139,319				—
Dividends declared on common stock and equivalents ($1.74 per share)			—				—				—				(59,184	)			—
Issuance and cancellation of stock awards, net			17,498				1				—				—				—
Tax payments for restricted stock upon vesting			(5,287	)			—				(2,390	)			—				—
Purchases of common stock			(165,778	)			(2	)			(8,722	)			(66,624	)			—
Exercise of stock options			1,490				—				563				—				—
Non-cash equity-based compensation expense			—				—				10,325				—				—
Currency translation adjustment			—				—				—				—				(618	)
Balance at September 7, 2025			33,785,145			$	338			$	619			$	(3,957,671	)		$	(5,245	)

																		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			—				—				—				420,061				—
Dividends declared on common stock and equivalents ($5.22 per share)			—				—				—				(178,441	)			—
Issuance and cancellation of stock awards, net			75,668				1				—				—				—
Tax payments for restricted stock upon vesting			(24,590	)			—				(10,862	)			—				—
Purchases of common stock			(596,754	)			(6	)			(34,354	)			(242,817	)			—
Exercise of stock options			48,894				—				12,882				—				—
Non-cash equity-based compensation expense			—				—				31,681				—				—
Currency translation adjustment			—				—				—				—				2,187
Balance at September 7, 2025			33,785,145			$	338			$	619			$	(3,957,671	)		$	(5,245	)

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. The Company accounts for its investment in DPC Dash 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 condensed consolidated statements of income. As of September 6, 2026 and December 28, 2025, the fair value of the Company’s investment in DPC Dash ordinary shares is based on the active exchange quoted price for the equity security (HK$30.50 per share as of September 6, 2026 and HK$71.90 per share as of December 28, 2025). The Company owned 3,901,019 ordinary shares as of September 6, 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 of $2.5 million in the third quarter of 2026 and a negative adjustment of $20.9 million in the three fiscal quarters of 2026 to the carrying amount of its investment in DPC Dash, with the unrealized losses recorded in other (expense) income in the Company’s condensed consolidated statements of income. The Company sold 4,200,000 ordinary shares of its investment in DPC Dash in the second quarter of 2025 for net proceeds of $44.1 million. The Company recorded a negative adjustment of $3.0 million in the third quarter of 2025 and a total net positive adjustment of $5.0 million in the three fiscal quarters of 2025 to the carrying amount of its investment in DPC Dash, with the net realized and unrealized losses and gains recorded in other (expense) income in the Company’s condensed consolidated statements of income.

The following tables summarize the carrying amounts and fair values of certain assets at September 6, 2026 and December 28, 2025:

		At September 6, 2026
						Fair Value Estimated Using
		Carrying				Level 1				Level 2				Level 3
		Amount				Inputs				Inputs				Inputs
Cash equivalents		$	101,988			$	101,988			$	—			$	—
Restricted cash equivalents			113,493				113,493				—				—
Investments in marketable securities			28,079				28,079				—				—
Advertising fund cash equivalents, restricted			57,259				57,259				—				—
Investment in DPC Dash			15,175				15,175				—				—

		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 fixed rate 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 fixed rate 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:

		September 6, 2026								December 28, 2025
		Principal Amount				Fair Value				Principal Amount				Fair Value
2017 Ten-Year Notes		$	940,000			$	933,420			$	940,000			$	934,360
2018 9.25-Year Notes			379,000				377,484				379,000				377,863
2019 Ten-Year Notes			648,000				620,136				648,000				624,024
2021 7.5-Year Notes			826,625				785,294				826,625				785,294
2021 Ten-Year Notes			972,500				885,948				972,500				893,728
2025 Five-Year Notes			500,000				494,000				500,000				503,000
2025 Seven-Year Notes			500,000				493,500				500,000				506,000

The Company had no outstanding borrowings under its variable funding notes at September 6, 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 (refer to Note 5, above) 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 (refer to Note 5, above) 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 third quarter of 2026, the Company satisfied the non-amortization tests for each respective series of notes, and has classified the outstanding principal amounts of the 2025 Five-Year Notes, 2025 Seven-Year Notes, 2021 7.5-Year Notes, 2021 Ten-Year Notes and 2019 Ten-Year Notes as long-term debt in the condensed consolidated balance sheets as of September 6, 2026. As of 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 December 28, 2025.

The legal final maturity dates of the 2018 9.25-Year Notes and the 2017 Ten-Year Notes are July 2048 and October 2047, respectively. However, the anticipated repayment date for the 2018 9.25-Year Notes and 2017 Ten-Year Notes is July 2027, and accordingly, the outstanding principal amounts for these notes have been classified as the current portion of long-term debt in the condensed consolidated balance sheet as of September 6, 2026. The Company expects to refinance the 2018 9.25-Year Notes and 2017 Ten-Year Notes prior to the anticipated repayment date. If the Company does not repay or refinance the 2018 9.25-Year Notes and 2017 Ten-Year Notes prior to the anticipated repayment date, additional interest of at least 5% per annum will accrue, and the Company’s securitized cash flows other than a weekly management fee to cover certain operating expenses would be directed to the repayment of the securitized debt.

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 $4.5 million and $4.8 million were included in current other accrued liabilities as of September 6, 2026 and December 28, 2025, respectively. Deferred franchise fees and deferred development fees of $13.0 million and $12.5 million were included in long-term other accrued liabilities as of September 6, 2026 and December 28, 2025, respectively.

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

		Three Fiscal Quarters Ended
		September 6,				September 7,
		2026				2025
Deferred franchise fees and deferred development fees, beginning of period		$	17,318			$	20,946
Revenue recognized during the period			(4,565	)			(4,316	)
New deferrals due to cash received and other			4,752				3,297
Deferred franchise fees and deferred development fees, end of period		$	17,505			$	19,927

Advertising Fund Assets

As of September 6, 2026, advertising fund assets, restricted of $98.0 million consisted of $71.4 million of cash and cash equivalents, $19.0 million of accounts receivable and $7.6 million of prepaid expenses. As of September 6, 2026, advertising fund cash and cash equivalents included $1.4 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 2047. Rent expense totaled $22.8 million and $67.7 million in the third quarter and three fiscal quarters of 2026, respectively. Rent expense totaled $21.8 million and $65.9 million in the third quarter and three fiscal quarters 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 $0.6 million and $2.4 million in the third quarter and three fiscal quarters of 2026, respectively. Rent expense for certain short-term supply chain center tractor and trailer rentals was $1.4 million and $5.0 million in the third quarter and three fiscal quarters of 2025, respectively. Variable rent expense and rent expense for other short-term leases were immaterial in both the third quarter and three fiscal quarters of 2026 and 2025.

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

		Fiscal Quarter Ended								Three Fiscal Quarters Ended
		September 6,				September 7,				September 6,				September 7,
		2026				2025				2026				2025
Operating lease cost		$	12,111			$	11,991			$	36,921			$	36,213
Finance lease cost:
Amortization of right-of-use assets			2,096				1,239				5,489				3,737
Interest on lease liabilities			2,019				844				5,243				2,571
Total finance lease cost		$	4,115			$	2,083			$	10,732			$	6,308

Supplemental balance sheet information related to the Company’s finance leases as of September 6, 2026 and December 28, 2025 was as follows:

		September 6, 2026				December 28, 2025
Land and buildings		$	149,087			$	80,457
Equipment			3,151				4,225
Finance lease assets			152,238				84,682
Accumulated depreciation and amortization			(36,613	)			(32,908	)
Finance lease assets, net		$	115,625			$	51,774
Current portion of long-term debt		$	7,681			$	6,017
Long-term debt, less current portion			118,932				55,991
Total principal payable on finance leases		$	126,613			$	62,008

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

		Three Fiscal Quarters Ended
		September 6,				September 7,
		2026				2025
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases		$	37,707			$	35,123
Operating cash flows from finance leases			5,243				2,571
Financing cash flows from finance leases			4,020				3,022
Cash paid for amounts included in the measurement of financing obligation from sale leaseback:
Operating cash flows from sale leaseback			889				792
Financing cash flows from sale leaseback			77				63
Right-of-use assets obtained in exchange for lease obligations:
Operating leases			49,689				46,300
Finance leases			69,116				—

As of September 6, 2026, the Company had additional leases for certain supply chain real estate and certain supply chain vehicles that had not yet commenced with estimated future minimum rental commitments of $90.7 million. These leases are expected to commence in 2026 and 2027 with lease terms of up to 21 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 $18.4 million and $12.6 million as of September 6, 2026 and December 28, 2025, respectively. The Company does not believe these arrangements have had 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 $4.2 million at September 6, 2026 and $2.4 million at December 28, 2025. The Company had $2.8 million in non-cash financing activity related to accruals for excise taxes on share repurchases as of September 6, 2026. The Company had $3.3 million in non-cash financing activity related to accruals for excise taxes on share repurchases as of December 28, 2025, which was paid in the second quarter of 2026.

10. Asset Acquisitions and Dispositions

During the second quarter of 2026, the Company refranchised 77 U.S. Company-owned stores in Virginia and Michigan for proceeds of $19.8 million. The pre-tax refranchising gain associated with the sale of the related assets and liabilities, including a $2.8 million reduction in goodwill, was $3.9 million and recorded in refranchising gain in the Company’s condensed consolidated statements of income.

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 second quarter of 2025, the Company refranchised 36 U.S. Company-owned stores in Maryland for proceeds of $8.5 million. The pre-tax refranchising gain associated with the sale of the related assets and liabilities, including a $1.4 million reduction in goodwill, was $3.9 million and was recorded in refranchising gain in the Company’s condensed consolidated statements of income.

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. 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”) and adopted the following accounting standard:

Recently Adopted Accounting Standards

Accounting Standards Update (“ASU”) 2026-02, Environmental Credits and Environmental Credit Obligations (Topic 818)

In May 2026, the FASB issued ASU 2026-02, Environmental Credits and Environmental Credit Obligations (Topic 818) (“ASU 2026-02”), which establishes guidance on the recognition, measurement, presentation and disclosure of environmental credits and related obligations. ASU 2026-02 provides a framework for accounting for environmental credit assets, including those generated, purchased or received, and environmental credit obligations. It also requires entities to assess the intended use of environmental credits, and, in certain cases, evaluate such credits for impairment. In addition, ASU 2026-02 introduces enhanced annual disclosure requirements related to environmental credits and associated obligations.

The Company early adopted ASU 2026-02 in the third quarter of 2026 in connection with the commencement of a new virtual power purchase agreement, and adoption did not have a material impact on the Company’s condensed consolidated financial statements.

Accounting Standards Not Yet Adopted

The Company has considered all new accounting standards issued by the FASB. The Company has not yet adopted the following accounting standards:

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, of 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, and early adoption is permitted. 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.