Interest rates and inflation

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277 paragraphs · Retail-Eating Places show all sectors

Restaurant dining generally is dependent upon consumer discretionary spending, which may be affected by macroeconomic conditions that are beyond our control. A prolonged economic downturn or slow recovery may reduce consumer spending, leading to lower demand or shifts to lower-priced options. Factors such as unemployment, inflation, interest rate changes, taxes, access to credit, public health crises, trade disputes, and geopolitical instability can all impact consumer behavior, including discretionary spending, potentially reducing demand for our products. A significant decrease in guest traffic or average transaction size would negatively impact our financial performance. If economic uncertainty persists, guests may adopt lasting changes in spending habits, potentially affecting our sales, profitability, and growth plans.

Read in the 10-K filed Feb 4, 2026 ↗

In addition, our ability to offset the effects of inflation through pricing actions may be constrained by competitive dynamics and consumer demand sensitivity, and if menu pricing does not sufficiently offset rising costs or adversely affects guest traffic, our operating margins and results of operation could be adversely affected.

Read in the 10-K filed Jul 24, 2026 ↗

As of December 31, 2025, our total outstanding short-term borrowings and long-term debt was approximately $12.0 billion. Subject to the limits contained in the agreements governing our outstanding indebtedness, we may incur additional debt from time to time, which would increase the risks related to our level of indebtedness. Our level of indebtedness could have important potential consequences, including, but not limited to: increasing our vulnerability to, and reducing our flexibility to plan for and respond to, adverse economic and industry conditions and changes in our business and the competitive environment; requiring the dedication of a substantial portion of our cash flow from operations to the payment of principal of, and interest on, indebtedness, thereby reducing or eliminating the availability of such cash flow to fund working capital, capital expenditures, acquisitions, dividends, share repurchases or other corporate purposes; increasing our vulnerability to a downgrade of our credit rating, which could adversely affect our cost of funds, liquidity and access to capital markets; restricting us from making strategic acquisitions or causing us to make non-strategic divestitures; placing us at a disadvantage compared to other less leveraged competitors or competitors with comparable debt at more favorable interest rates; increasing our exposure to the risk of increased interest rates insofar as current and future borrowings are subject to variable rates of interest or we are forced to refinance indebtedness at higher interest rates, which risks are heightened by the current elevated interest rate environment; increasing our exposure to the risk of discontinuance, replacement or modification of certain reference rates; limiting our ability to repay, refinance or satisfy our existing debt obligations, as well as to borrow additional funds in the future and increasing the cost of any such borrowing; imposing restrictive covenants on our operations due to the terms of our indebtedness, which, if not complied with, could result in an event of default, which if not cured or waived, could result in the acceleration of the applicable debt or the acceleration of any other debt to which a cross-acceleration or cross-default provision applies; and increasing our exposure to risks related to fluctuations in foreign currency as we earn profits in a variety of currencies around the world and our debt is primarily denominated in U.S. dollars.

Read in the 10-K filed Feb 20, 2026 ↗