Cover Page
Cover Page - shares | 3 Months Ended | |
Mar. 26, 2023 | Apr. 20, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Entity Interactive Data Current | Yes | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity Central Index Key | 0001286681 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2023 | |
Document Period End Date | Mar. 26, 2023 | |
Entity Registrant Name | Domino’s Pizza, Inc. | |
Securities Act File Number | 001-32242 | |
Current Fiscal Year End Date | --01-01 | |
Entity Tax Identification Number | 38-2511577 | |
Entity Incorporation, State or Country Code | DE | |
Entity Current Reporting Status | Yes | |
Entity Shell Company | false | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Address, Address Line One | 30 Frank Lloyd Wright Drive | |
Entity Address, City or Town | Ann Arbor | |
Entity Address, State or Province | MI | |
Entity Address, Postal Zip Code | 48105 | |
City Area Code | 734 | |
Local Phone Number | 930-3030 | |
Trading Symbol | DPZ | |
Security Exchange Name | NYSE | |
Title of 12(b) Security | Common Stock | |
Entity Common Stock, Shares Outstanding | 35,339,030 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 26, 2023 | Jan. 01, 2023 | [1] |
Current assets: | |||
Cash and cash equivalents | $ 154,193 | $ 60,356 | |
Restricted cash and cash equivalents | 170,798 | 191,289 | |
Accounts receivable, net | 259,163 | 257,492 | |
Inventories | 69,278 | 81,570 | |
Prepaid expenses and other | 34,381 | 37,287 | |
Advertising fund assets, restricted | 139,926 | 162,660 | |
Total current assets | 827,739 | 790,654 | |
Property, plant and equipment: | |||
Land and buildings | 105,581 | 105,659 | |
Leasehold and other improvements | 173,959 | 172,725 | |
Equipment | 342,408 | 333,787 | |
Construction in progress | 19,192 | 22,536 | |
Property, plant and equipment, Gross | 641,140 | 634,707 | |
Accumulated depreciation and amortization | (342,262) | (332,472) | |
Property, plant and equipment, net | 298,878 | 302,235 | |
Other assets: | |||
Operating lease right-of-use assets | 219,630 | 219,202 | |
Goodwill | 11,688 | 11,763 | |
Capitalized software, net | 113,150 | 108,354 | |
Investments | 125,840 | 125,840 | |
Deferred income tax assets, net | 1,869 | 1,926 | |
Other assets | 42,596 | 42,247 | |
Total other assets | 514,773 | 509,332 | |
Total assets | 1,641,390 | 1,602,221 | |
Current liabilities: | |||
Current portion of long-term debt | 55,228 | 54,813 | |
Accounts payable | 93,547 | 89,715 | |
Operating lease liabilities | 36,847 | 34,877 | |
Insurance reserves | 30,309 | 31,435 | |
Dividends payable | 43,783 | 866 | |
Advertising fund liabilities | 136,578 | 157,909 | |
Other accrued liabilities | 160,073 | 167,006 | |
Total current liabilities | 556,365 | 536,621 | |
Long-term liabilities: | |||
Long-term debt, less current portion | 4,955,228 | 4,967,420 | |
Operating lease liabilities | 194,193 | 195,244 | |
Insurance reserves | 38,030 | 40,179 | |
Other accrued liabilities | 44,587 | 44,061 | |
Deferred income tax liabilities | 4,760 | 7,761 | |
Total long-term liabilities | 5,236,798 | 5,254,665 | |
Stockholders' deficit | |||
Common stock | 353 | 354 | |
Additional paid-in capital | 1,474 | 9,693 | |
Retained deficit | (4,148,455) | (4,194,418) | |
Accumulated other comprehensive loss | (5,145) | (4,694) | |
Total stockholders' deficit | (4,151,773) | (4,189,065) | |
Total liabilities and stockholders' deficit | $ 1,641,390 | $ 1,602,221 | |
[1] The condensed consolidated balance sheet at January 1, 2023 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. |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 26, 2023 | Mar. 27, 2022 | |
Revenues: | ||
Revenue | $ 1,024,398 | $ 1,011,149 |
Cost of sales: | ||
Cost of sales | 638,851 | 642,525 |
Gross margin | 385,547 | 368,624 |
General and administrative | 95,189 | 97,494 |
U.S. franchise advertising | 112,726 | 106,589 |
Income from operations | 177,483 | 164,541 |
Refranchising loss | 149 | |
Interest income | 2,391 | 49 |
Interest expense | (46,547) | (46,872) |
Income before provision for income taxes | 133,327 | 117,718 |
Provision for income taxes | 28,557 | 26,754 |
Net income | $ 104,770 | $ 90,964 |
Earnings per share: | ||
Common stock - basic | $ 2.96 | $ 2.53 |
Common stock - diluted | $ 2.93 | $ 2.50 |
U.S. Stores [Member] | U.S. Company-owned stores [Member] | ||
Revenues: | ||
Revenue | $ 84,911 | $ 103,895 |
Cost of sales: | ||
Cost of sales | 70,572 | 87,375 |
U.S. Stores [Member] | U.S. franchise stores [Member] | ||
Revenues: | ||
Revenue | 132,864 | 122,285 |
U.S. Stores [Member] | U.S. franchise advertising [Member] | ||
Revenues: | ||
Revenue | 112,726 | 106,589 |
Supply Chain [Member] | Supply Chain Center [Member] | ||
Revenues: | ||
Revenue | 624,226 | 609,547 |
Cost of sales: | ||
Cost of sales | 568,279 | 555,150 |
International Franchise [Member] | International franchise royalties and fees [Member] | ||
Revenues: | ||
Revenue | $ 69,671 | $ 68,833 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 26, 2023 | Mar. 27, 2022 | |
Statement of Comprehensive Income [Abstract] | ||
Net income | $ 104,770 | $ 90,964 |
Currency translation adjustment | (451) | 614 |
Comprehensive income | $ 104,319 | $ 91,578 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 26, 2023 | Mar. 27, 2022 | ||
Cash flows from operating activities: | |||
Net income | $ 104,770 | $ 90,964 | |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | 18,170 | 18,976 | |
Refranchising loss | 149 | 0 | |
Loss on sale/disposal of assets | 275 | 195 | |
Amortization of debt issuance costs | 1,292 | 1,319 | |
(Benefit) provision for deferred income taxes | (3,439) | 1,319 | |
Non-cash equity-based compensation expense | 7,538 | 7,265 | |
Excess tax deficiencies (benefits) from equity-based compensation | 298 | (86) | |
Provision for losses on accounts and notes receivable | 572 | 1,462 | |
Changes in operating assets and liabilities | 7,388 | (34,718) | |
Changes in advertising fund assets and liabilities, restricted | (22,331) | (7,907) | |
Net cash provided by operating activities | 114,682 | 78,789 | |
Cash flows from investing activities: | |||
Capital expenditures | (19,031) | (12,454) | |
Purchases of franchise operations and other assets | 0 | (6,814) | |
Other | (572) | (1,368) | |
Net cash used in investing activities | (19,603) | (20,636) | |
Cash flows from financing activities: | |||
Repayments of long-term debt and finance lease obligations | (13,899) | (13,861) | |
Proceeds from exercise of stock options | 343 | 266 | |
Purchases of common stock | (30,083) | (47,661) | |
Tax payments for restricted stock upon vesting | (1,553) | (789) | |
Payments of common stock dividends and equivalents | (89) | (51) | |
Net cash used in financing activities | (45,281) | (62,096) | |
Effect of exchange rate changes on cash | (186) | 374 | |
Change in cash and cash equivalents, restricted cash and cash equivalents | 49,612 | (3,569) | |
Cash and cash equivalents, beginning of period | 60,356 | [1] | 148,160 |
Restricted cash and cash equivalents, beginning of period | 191,289 | [1] | 180,579 |
Cash and cash equivalents included in advertising fund assets, restricted, beginning of period | 143,559 | 161,741 | |
Cash and cash equivalents, restricted cash and cash equivalents and cash and cash equivalents included in advertising fund assets, restricted, beginning of period | 395,204 | 490,480 | |
Cash and cash equivalents, end of period | 154,193 | 164,962 | |
Restricted cash and cash equivalents, end of period | 170,798 | 168,241 | |
Cash and cash equivalents included in advertising fund assets, restricted, end of period | 119,825 | 153,708 | |
Cash and cash equivalents, restricted cash and cash equivalents and cash and cash equivalents included in advertising fund assets, restricted, end of period | $ 444,816 | $ 486,911 | |
[1] The condensed consolidated balance sheet at January 1, 2023 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. |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Mar. 26, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation | 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. For further information, refer to the consolidated financial statements and footnotes for the fiscal year ended January 1, 2023 included in the Company’s 2022 Annual Report on Form 10-K, filed with the Securities and Exchange Commission on February 23, 2023 (the “2022 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 fiscal quarter ended March 26, 2023 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2023 . |
Segment Information
Segment Information | 3 Months Ended |
Mar. 26, 2023 | |
Segment Reporting [Abstract] | |
Segment Information | 2. Segment Information The following tables summarize revenues and earnings before interest, taxes, depreciation, amortization and other, which is the measure by which the Company allocates resources to its segments and which the Company refers to as Segment Income, for each of its reportable segments. Intersegment revenues are comprised of sales of food, equipment and supplies from the supply chain segment to the Company-owned stores in the U.S. stores segment. Intersegment sales prices are market based. The “Other” column as it relates to Segment Income below primarily includes corporate administrative costs that are not allocable to a reportable segment, including labor, computer expenses, professional fees, travel and entertainment, rent, insurance and other corporate administrative costs. Fiscal Quarters Ended March 26, 2023 and March 27, 2022 U.S. Supply International Intersegment Stores Chain Franchise Revenues Other Total Revenues 2023 $ 330,501 $ 650,124 $ 69,671 $ ( 25,898 ) $ — $ 1,024,398 2022 332,769 641,962 68,833 ( 32,415 ) — 1,011,149 Segment Income 2023 $ 112,683 $ 48,515 $ 58,139 N/A $ ( 15,722 ) $ 203,615 2022 97,292 46,349 55,046 N/A ( 7,710 ) 190,977 In the first quarter of 2023, the Company changed its allocation methodology for certain costs which support certain internally developed software used across the Company’s franchise system. This allocation methodology change was implemented in order to reflect the way the chief operating decision maker allocates resources to the Company’s reportable segments and evaluates segment profitability, including the costs of internally developed software. The change in allocation methodology of certain software development costs resulted in an estimated increase in U.S. stores Segment Income of $ 10.1 million, an estimated increase in international franchise Segment Income of $ 2.0 million and an estimated decrease in other Segment Income of $ 12.1 million in the first quarter of 2023. The change in allocation methodology of certain software development costs had no impact on revenues, supply chain Segment Income or total Segment Income. The change in allocation methodology for certain software development costs is a prospective change and the comparative information has not been restated. The following table reconciles total Segment Income to consolidated income before provision for income taxes. Fiscal Quarter Ended March 26, March 27, 2023 2022 Total Segment Income $ 203,615 $ 190,977 Depreciation and amortization ( 18,170 ) ( 18,976 ) Refranchising loss ( 149 ) — Loss on sale/disposal of assets ( 275 ) ( 195 ) Non-cash equity-based compensation expense ( 7,538 ) ( 7,265 ) Income from operations 177,483 164,541 Interest income 2,391 49 Interest expense ( 46,547 ) ( 46,872 ) Income before provision for income taxes $ 133,327 $ 117,718 |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Mar. 26, 2023 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | 3. Earnings Per Share Fiscal Quarter Ended March 26, March 27, 2023 2022 Net income available to common stockholders - basic and diluted $ 104,770 $ 90,964 Basic weighted average number of shares 35,391,624 36,000,896 Earnings per share – basic $ 2.96 $ 2.53 Diluted weighted average number of shares 35,708,938 36,435,038 Earnings per share – diluted $ 2.93 $ 2.50 The denominators used in calculating diluted earnings per share for common stock for the fiscal quarters ended March 26, 2023 and March 27, 2022 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 March 26, March 27, 2023 2022 Anti-dilutive shares underlying stock-based awards Stock options 231,459 74,152 Restricted stock awards and units 26,975 469 Performance condition not met Restricted stock awards and units 60,068 42,777 |
Stockholders' Deficit
Stockholders' Deficit | 3 Months Ended |
Mar. 26, 2023 | |
Federal Home Loan Banks [Abstract] | |
Stockholders' Deficit | 4. Stockholders’ Deficit The following table summarizes the changes in stockholders’ deficit for the first quarter of 2023. Accumulated Additional Other Common Stock Paid-in Retained Comprehensive Shares Amount Capital Deficit Loss Balance at January 1, 2023 35,419,718 $ 354 $ 9,693 $ ( 4,194,418 ) $ ( 4,694 ) Net income — — — 104,770 — Dividends declared on common stock and equivalents 1.21 per share) — — — ( 43,005 ) — Issuance and cancellation of stock awards, net 14,495 — — — — Tax payments for restricted stock upon vesting ( 5,073 ) — ( 1,553 ) — — Purchases of common stock ( 100,515 ) ( 1 ) ( 14,547 ) ( 15,802 ) — Exercise of stock options 1,508 — 343 — — Non-cash equity-based compensation expense — — 7,538 — — Currency translation adjustment — — — — ( 451 ) Balance at March 26, 2023 35,330,133 $ 353 $ 1,474 $ ( 4,148,455 ) $ ( 5,145 ) Subsequent to the end of the first quarter of 2023 , on April 25, 2023 , the Company’s Board of Directors declared a $ 1.21 per share quarterly dividend on its outstanding common stock for shareholders of record as of June 15, 2023 to be paid on June 30, 2023 . The following table summarizes the changes in stockholders’ deficit for the first quarter of 2022. Accumulated Additional Other Common Stock Paid-in Retained Comprehensive Shares Amount Capital Deficit Loss Balance at January 2, 2022 36,138,273 $ 361 $ 840 $ ( 4,207,917 ) $ ( 2,820 ) Net income — — — 90,964 — Dividends declared on common stock and equivalents 1.10 per share) — — — ( 39,765 ) — Issuance and cancellation of stock awards, net 340 — — — — Tax payments for restricted stock upon vesting ( 1,875 ) — ( 789 ) — — Purchases of common stock ( 100,810 ) ( 1 ) ( 4,037 ) ( 43,623 ) — Exercise of stock options 1,445 — 266 — — Non-cash equity-based compensation expense — — 7,265 — — Currency translation adjustment — — — — 614 Balance at March 27, 2022 36,037,373 $ 360 $ 3,545 $ ( 4,200,341 ) $ ( 2,206 ) |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 26, 2023 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | . 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 Investments 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. The fair value of the Company’s Level 3 investment is not readily determinable. The fair value represents its cost with adjustments for observable changes in prices resulting from orderly transactions for the identical or a similar investment of the same issuer or impairments. The following tables summarize the carrying amounts and fair values of certain assets at March 26, 2023 and January 1, 2023: At March 26, 2023 Fair Value Estimated Using Carrying Level 1 Level 2 Level 3 Amount Inputs Inputs Inputs Cash equivalents $ 112,975 $ 112,975 $ — $ — Restricted cash equivalents 122,896 122,896 — — Investments in marketable securities 14,622 14,622 — — Advertising fund cash equivalents, restricted 100,768 100,768 — — Investments 125,840 — — 125,840 At January 1, 2023 Fair Value Estimated Using Carrying Level 1 Level 2 Level 3 Amount Inputs Inputs Inputs Cash equivalents $ 23,779 $ 23,779 $ — $ — Restricted cash equivalents 117,212 117,212 — — Investments in marketable securities 13,395 13,395 — — Advertising fund cash equivalents, restricted 124,496 124,496 — — Investments 125,840 — — 125,840 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’s investment in DPC Dash’s senior ordinary shares, which are not in-substance common stock, represents an equity investment without a readily determinable fair value and is recorded at cost with adjustments for observable changes in prices resulting from orderly transactions for the identical or a similar investment of the same issuer or impairments. The Company did not record any adjustments to the carrying amount of its investment in DPC Dash of $ 125.8 million in the first quarter of 2023 or 2022. Subsequent to the end of the first quarter of 2023, on March 28, 2023, DPC Dash completed its initial public offering on the Hong Kong Exchange (HK: 1405) at a price of HK$ 46.00 per share, at which point the Company’s 18,101,019 senior ordinary shares automatically converted to ordinary shares pursuant to the terms of the investment. The Company is required to hold the ordinary shares for at least 360 days from the date of the initial public offering. Beginning in the second quarter of 2023, the Company will account for its investment as a trading security and will record 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. 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 debtholders 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 2015, 2017, 2018, 2019 and 2021 notes as follows: March 26, 2023 January 1, 2023 Principal Amount Fair Value Principal Amount Fair Value 2015 Ten-Year Notes $ 750,000 $ 730,500 $ 752,000 $ 717,408 2017 Ten-Year Notes 950,000 900,600 952,500 875,348 2018 7.5-Year Notes 406,938 393,102 408,000 385,968 2018 9.25-Year Notes 383,000 366,531 384,000 355,584 2019 Ten-Year Notes 654,750 588,620 656,438 564,536 2021 7.5-Year Notes 835,125 725,724 837,250 695,755 2021 Ten-Year Notes 982,500 828,248 985,000 792,925 The Company did not have any outstanding borrowings under its variable funding notes at March 26, 2023 or January 1, 2023 . |
Revenue Disclosures
Revenue Disclosures | 3 Months Ended |
Mar. 26, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Disclosures | 6. Revenue Disclosures Contract Liabilities Contract liabilities primarily consist of deferred franchise fees and deferred development fees. Deferred franchise fees and deferred development fees of $ 5.6 million and $ 5.5 million were included in current other accrued liabilities as of March 26, 2023 and January 1, 2023, respectively. Deferred franchise fees and deferred development fees of $ 22.3 million and $ 22.7 million were included in long-term other accrued liabilities as of March 26, 2023 and January 1, 2023, respectively. Changes in deferred franchise fees and deferred development fees for the first quarter of 2023 and the first quarter of 2022 were as follows: Fiscal Quarter Ended March 26, March 27, 2023 2022 Deferred franchise fees and deferred development fees, beginning of period $ 28,225 $ 29,694 Revenue recognized during the period ( 1,448 ) ( 1,420 ) New deferrals due to cash received and other 1,162 1,159 Deferred franchise fees and deferred development fees, end of period $ 27,939 $ 29,433 Advertising Fund Assets As of March 26, 2023, advertising fund assets, restricted of $ 139.9 million consisted of $ 119.8 million of cash and cash equivalents, $ 13.2 million of accounts receivable and $ 6.9 million of prepaid expenses. As of March 26, 2023, advertising fund cash and cash equivalents included $ 3.3 million of cash contributed from U.S. Company-owned stores that had not yet been expended. As of January 1, 2023, advertising fund assets, restricted of $ 162.7 million consisted of $ 143.6 million of cash and cash equivalents, $ 13.1 million of accounts receivable and $ 6.0 million of prepaid expenses. As of January 1, 2023, advertising fund cash and cash equivalents included $ 4.8 million of cash contributed from U.S. Company-owned stores that had not yet been expended. Change in Advertising Fund Contributions and Technology Fees Subsequent to the end of the first quarter of 2023, as of March 27, 2023, Domino's National Advertising Fund Inc., the Company’s consolidated not-for-profit advertising subsidiary , effectuated a temporary reduction of 0.25 % to its standard 6.0 % advertising contribution, which is anticipated to be in effect for at least one year. Concurrently, the Company also increased the U.S. digital per-transaction technology fees that are recognized as the related U.S. franchise retail sales occur by $ 0.08 to $ 0.395 for the same time period. |
Leases
Leases | 3 Months Ended |
Mar. 26, 2023 | |
Leases [Abstract] | |
Leases | 7. Leases The Company leases certain retail store and supply chain center locations, vehicles, equipment and its corporate headquarters with expiration dates through 2041. The components of operating and finance lease cost for the first quarter of 2023 and the first quarter of 2022 were as follows: Fiscal Quarter Ended March 26, March 27, 2023 2022 Operating lease cost $ 10,808 $ 10,275 Finance lease cost: Amortization of right-of-use assets 1,199 1,208 Interest on lease liabilities 983 1,104 Total finance lease cost $ 2,182 $ 2,312 Rent expense totaled $ 19.3 million and $ 18.9 million in the first quarter of 2023 and the first quarter of 2022, 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 $ 1.4 million and $ 2.2 million in the first quarter of 2023 and the first quarter of 2022, respectively. Variable rent expense and rent expense for other short-term leases were immaterial in both the first quarter of 2023 and the first quarter of 2022. Supplemental balance sheet information related to the Company’s finance leases as of March 26, 2023 and January 1, 2023 was as follows: March 26, January 1, 2023 2023 Land and buildings $ 83,824 $ 83,902 Equipment 2,501 1,606 Finance lease assets 86,325 85,508 Accumulated depreciation and amortization ( 20,591 ) ( 19,405 ) Finance lease assets, net $ 65,734 $ 66,103 Current portion of long-term debt $ 3,728 $ 3,313 Long-term debt , less current portion 70,276 70,886 Total principal payable on finance leases $ 74,004 $ 74,199 As of March 26, 2023 and January 1, 2023, the weighted average remaining lease term and weighted average discount rate for the Company’s operating and finance leases were as follows: March 26, 2023 January 1, 2023 Operating Finance Operating Finance Leases Leases Leases Leases Weighted average remaining lease term 7 years 14 years 7 years 14 years Weighted average discount rate 4.0 % 6.1 % 3.9 % 6.0 % Supplemental cash flow information related to leases for the first quarter of 2023 and the first quarter of 2022 were as follows: Fiscal Quarter Ended March 26, March 27, 2023 2022 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 10,320 $ 10,637 Operating cash flows from finance leases 983 1,104 Financing cash flows from finance leases 1,024 986 Right-of-use assets obtained in exchange for lease obligations: Operating leases 9,305 7,758 Finance leases 872 — Maturities of lease liabilities as of March 26, 2023 were as follows: Operating Finance Leases Leases 2023 $ 35,586 $ 5,893 2024 43,630 8,232 2025 38,817 8,048 2026 37,110 8,733 2027 30,478 8,008 Thereafter 85,253 68,420 Total future minimum rental commitments 270,874 107,334 Less, amounts representing interest ( 39,834 ) ( 33,330 ) Total lease liabilities $ 231,040 $ 74,004 As of March 26, 2023, the Company had additional leases for one storage warehouse facility and certain supply chain and U.S. Company-owned store vehicles that had not yet commenced with estimated future minimum rental commitments of $ 40.9 million. These leases are expected to commence in 2023 and 2024 with lease terms of up to 11 years . These undiscounted amounts are not included in the table above. The Company has guaranteed lease payments related to certain franchisees’ lease arrangements. The maximum amount of potential future payments under these guarantees was $ 23.3 million and $ 24.5 million as of March 26, 2023 and January 1, 2023 , 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. |
Supplemental Disclosures of Cas
Supplemental Disclosures of Cash Flow Information | 3 Months Ended |
Mar. 26, 2023 | |
Supplemental Cash Flow Elements [Abstract] | |
Supplemental Disclosures of Cash Flow Information | 8. Supplemental Disclosures of Cash Flow Information The Company had non-cash investing activities related to accruals for capital expenditures of $ 6.9 million at March 26, 2023 and $ 6.9 million at January 1, 2023. As of March 26, 2023 , the Company had $ 0.3 million in non-cash financing activity related to accruals for excise taxes on share repurchases during the first quarter of 2023. |
Company-owned Store Transaction
Company-owned Store Transactions | 3 Months Ended |
Mar. 26, 2023 | |
Business Combinations [Abstract] | |
Company-owned Store Transactions | 9. Company-owned Store Transactions During the first quarter of 2023, the Company refranchised one U.S. Company-owned store for proceeds of less than $ 0.1 million. The pre-tax refranchising loss associated with the sale of the related assets and liabilities, including goodwill, was approximately $ 0.1 million. The refranchising loss associated with the sale of this store was recorded in refranchising loss in the Company’s condensed consolidated statements of income. |
New Accounting Pronouncements
New Accounting Pronouncements | 3 Months Ended |
Mar. 26, 2023 | |
Accounting Changes and Error Corrections [Abstract] | |
New Accounting Pronouncements | . New Accounting Pronouncements Accounting Standards Not Yet Adopted The Company has considered all new accounting standards issued by the Financial Accounting Standards Board (“FASB”). The Company has not yet completed its assessment of the following standards. Accounting Standards Update (“ASU”) 2020-04, Facilitation of the Effects of Reference Rate Reform on Financial Reporting, updated by ASU 2022-06, Deferral of the Sunset Date of Topic 848 (“ASU 2022-06”) In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting (“ASU 2020-04”) , which provides temporary optional expedients and exceptions for applying generally accepted accounting principles to contracts, hedging relationships and other transactions affected by reference rate reform. The Company’s 2021 variable funding notes bear interest at fluctuating interest rates based on LIBOR. However, the associated loan documents provide that after the date on which the administrator for LIBOR permanently or indefinitely ceases to provide all available settings of U.S. dollar LIBOR, any new advances under the 2021 variable funding notes that would otherwise have borne interest based on LIBOR, as well as any existing LIBOR advances for which the interest period has expired, will instead bear interest at a forward-looking term rate based on the Secured Overnight Financing Rate (“Term SOFR”), plus a spread adjustment. The loan documents also permit the lenders to affect a transition from LIBOR to Term SOFR at an earlier date, subject to certain conditions. The Company’s 2022 variable funding notes bear interest at fluctuating interest rates based on Term SOFR. ASU 2020-04, as updated by ASU 2022-06, may currently be adopted and may be applied prospectively to contract modifications made on or before December 31, 2024. The Company does not expect the adoption of this guidance to have a material impact on its condensed consolidated financial statements. ASU 2022-03, Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions In June 2022, the FASB issued ASU 2022-03, Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions (“ASU 2022-03”) , which clarifies and amends the guidance of measuring the fair value of equity securities subject to contractual sale restrictions. ASU 2022-03 also requires disclosure of the fair value of equity securities subject to contractual sale restrictions, the nature and remaining duration of the restrictions and the circumstances that could cause a lapse in the restrictions. The Company’s investment in DPC Dash (Note 5) is subject to contractual restrictions that prohibit the sale of the security for 360 days following its initial public offering. ASU 2022-03 is effective for fiscal years beginning after December 15, 2023, including applicable interim periods and early adoption is permitted. The Company will adopt this accounting standard in the second quarter of 2023 and does not expect the adoption of this guidance to have a material impact on its condensed consolidated financial statements. |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Mar. 26, 2023 | |
Segment Reporting [Abstract] | |
Financial Information by Operating Segment | The following tables summarize revenues and earnings before interest, taxes, depreciation, amortization and other, which is the measure by which the Company allocates resources to its segments and which the Company refers to as Segment Income, for each of its reportable segments. Intersegment revenues are comprised of sales of food, equipment and supplies from the supply chain segment to the Company-owned stores in the U.S. stores segment. Intersegment sales prices are market based. The “Other” column as it relates to Segment Income below primarily includes corporate administrative costs that are not allocable to a reportable segment, including labor, computer expenses, professional fees, travel and entertainment, rent, insurance and other corporate administrative costs. Fiscal Quarters Ended March 26, 2023 and March 27, 2022 U.S. Supply International Intersegment Stores Chain Franchise Revenues Other Total Revenues 2023 $ 330,501 $ 650,124 $ 69,671 $ ( 25,898 ) $ — $ 1,024,398 2022 332,769 641,962 68,833 ( 32,415 ) — 1,011,149 Segment Income 2023 $ 112,683 $ 48,515 $ 58,139 N/A $ ( 15,722 ) $ 203,615 2022 97,292 46,349 55,046 N/A ( 7,710 ) 190,977 |
Reconciliation of Total Segment Income to Consolidated Income Before Provision for Income Taxes | The following table reconciles total Segment Income to consolidated income before provision for income taxes. Fiscal Quarter Ended March 26, March 27, 2023 2022 Total Segment Income $ 203,615 $ 190,977 Depreciation and amortization ( 18,170 ) ( 18,976 ) Refranchising loss ( 149 ) — Loss on sale/disposal of assets ( 275 ) ( 195 ) Non-cash equity-based compensation expense ( 7,538 ) ( 7,265 ) Income from operations 177,483 164,541 Interest income 2,391 49 Interest expense ( 46,547 ) ( 46,872 ) Income before provision for income taxes $ 133,327 $ 117,718 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Mar. 26, 2023 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Fiscal Quarter Ended March 26, March 27, 2023 2022 Net income available to common stockholders - basic and diluted $ 104,770 $ 90,964 Basic weighted average number of shares 35,391,624 36,000,896 Earnings per share – basic $ 2.96 $ 2.53 Diluted weighted average number of shares 35,708,938 36,435,038 Earnings per share – diluted $ 2.93 $ 2.50 |
Schedule of Denominators Used in Calculating Earning Per Common Share | The denominators used in calculating diluted earnings per share for common stock for the fiscal quarters ended March 26, 2023 and March 27, 2022 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 March 26, March 27, 2023 2022 Anti-dilutive shares underlying stock-based awards Stock options 231,459 74,152 Restricted stock awards and units 26,975 469 Performance condition not met Restricted stock awards and units 60,068 42,777 |
Stockholders' Deficit (Tables)
Stockholders' Deficit (Tables) | 3 Months Ended |
Mar. 26, 2023 | |
Federal Home Loan Banks [Abstract] | |
Changes in Stockholders' Deficit | The following table summarizes the changes in stockholders’ deficit for the first quarter of 2023. Accumulated Additional Other Common Stock Paid-in Retained Comprehensive Shares Amount Capital Deficit Loss Balance at January 1, 2023 35,419,718 $ 354 $ 9,693 $ ( 4,194,418 ) $ ( 4,694 ) Net income — — — 104,770 — Dividends declared on common stock and equivalents 1.21 per share) — — — ( 43,005 ) — Issuance and cancellation of stock awards, net 14,495 — — — — Tax payments for restricted stock upon vesting ( 5,073 ) — ( 1,553 ) — — Purchases of common stock ( 100,515 ) ( 1 ) ( 14,547 ) ( 15,802 ) — Exercise of stock options 1,508 — 343 — — Non-cash equity-based compensation expense — — 7,538 — — Currency translation adjustment — — — — ( 451 ) Balance at March 26, 2023 35,330,133 $ 353 $ 1,474 $ ( 4,148,455 ) $ ( 5,145 ) The following table summarizes the changes in stockholders’ deficit for the first quarter of 2022. Accumulated Additional Other Common Stock Paid-in Retained Comprehensive Shares Amount Capital Deficit Loss Balance at January 2, 2022 36,138,273 $ 361 $ 840 $ ( 4,207,917 ) $ ( 2,820 ) Net income — — — 90,964 — Dividends declared on common stock and equivalents 1.10 per share) — — — ( 39,765 ) — Issuance and cancellation of stock awards, net 340 — — — — Tax payments for restricted stock upon vesting ( 1,875 ) — ( 789 ) — — Purchases of common stock ( 100,810 ) ( 1 ) ( 4,037 ) ( 43,623 ) — Exercise of stock options 1,445 — 266 — — Non-cash equity-based compensation expense — — 7,265 — — Currency translation adjustment — — — — 614 Balance at March 27, 2022 36,037,373 $ 360 $ 3,545 $ ( 4,200,341 ) $ ( 2,206 ) |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 26, 2023 | |
Fair Value Disclosures [Abstract] | |
Carrying Amounts and Fair Values of Certain Assets | The following tables summarize the carrying amounts and fair values of certain assets at March 26, 2023 and January 1, 2023: At March 26, 2023 Fair Value Estimated Using Carrying Level 1 Level 2 Level 3 Amount Inputs Inputs Inputs Cash equivalents $ 112,975 $ 112,975 $ — $ — Restricted cash equivalents 122,896 122,896 — — Investments in marketable securities 14,622 14,622 — — Advertising fund cash equivalents, restricted 100,768 100,768 — — Investments 125,840 — — 125,840 At January 1, 2023 Fair Value Estimated Using Carrying Level 1 Level 2 Level 3 Amount Inputs Inputs Inputs Cash equivalents $ 23,779 $ 23,779 $ — $ — Restricted cash equivalents 117,212 117,212 — — Investments in marketable securities 13,395 13,395 — — Advertising fund cash equivalents, restricted 124,496 124,496 — — Investments 125,840 — — 125,840 |
Schedule of Estimated Fair Value | Management estimated the approximate fair values of the Company's 2015, 2017, 2018, 2019 and 2021 notes as follows: March 26, 2023 January 1, 2023 Principal Amount Fair Value Principal Amount Fair Value 2015 Ten-Year Notes $ 750,000 $ 730,500 $ 752,000 $ 717,408 2017 Ten-Year Notes 950,000 900,600 952,500 875,348 2018 7.5-Year Notes 406,938 393,102 408,000 385,968 2018 9.25-Year Notes 383,000 366,531 384,000 355,584 2019 Ten-Year Notes 654,750 588,620 656,438 564,536 2021 7.5-Year Notes 835,125 725,724 837,250 695,755 2021 Ten-Year Notes 982,500 828,248 985,000 792,925 |
Revenue Disclosures (Tables)
Revenue Disclosures (Tables) | 3 Months Ended |
Mar. 26, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Contract Liabilities Consist of Deferred Franchise Fees and Deferred Development Fees | Changes in deferred franchise fees and deferred development fees for the first quarter of 2023 and the first quarter of 2022 were as follows: Fiscal Quarter Ended March 26, March 27, 2023 2022 Deferred franchise fees and deferred development fees, beginning of period $ 28,225 $ 29,694 Revenue recognized during the period ( 1,448 ) ( 1,420 ) New deferrals due to cash received and other 1,162 1,159 Deferred franchise fees and deferred development fees, end of period $ 27,939 $ 29,433 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 26, 2023 | |
Leases [Abstract] | |
Components Of Operating And Finance Lease Cost | The components of operating and finance lease cost for the first quarter of 2023 and the first quarter of 2022 were as follows: Fiscal Quarter Ended March 26, March 27, 2023 2022 Operating lease cost $ 10,808 $ 10,275 Finance lease cost: Amortization of right-of-use assets 1,199 1,208 Interest on lease liabilities 983 1,104 Total finance lease cost $ 2,182 $ 2,312 |
Schedule of Supplemental Balance Sheet Information Related To Finance Leases | Supplemental balance sheet information related to the Company’s finance leases as of March 26, 2023 and January 1, 2023 was as follows: March 26, January 1, 2023 2023 Land and buildings $ 83,824 $ 83,902 Equipment 2,501 1,606 Finance lease assets 86,325 85,508 Accumulated depreciation and amortization ( 20,591 ) ( 19,405 ) Finance lease assets, net $ 65,734 $ 66,103 Current portion of long-term debt $ 3,728 $ 3,313 Long-term debt , less current portion 70,276 70,886 Total principal payable on finance leases $ 74,004 $ 74,199 As of March 26, 2023 and January 1, 2023, the weighted average remaining lease term and weighted average discount rate for the Company’s operating and finance leases were as follows: March 26, 2023 January 1, 2023 Operating Finance Operating Finance Leases Leases Leases Leases Weighted average remaining lease term 7 years 14 years 7 years 14 years Weighted average discount rate 4.0 % 6.1 % 3.9 % 6.0 % |
Schedule Of Supplemental Cash Flow Information Related To Leases | Supplemental cash flow information related to leases for the first quarter of 2023 and the first quarter of 2022 were as follows: Fiscal Quarter Ended March 26, March 27, 2023 2022 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 10,320 $ 10,637 Operating cash flows from finance leases 983 1,104 Financing cash flows from finance leases 1,024 986 Right-of-use assets obtained in exchange for lease obligations: Operating leases 9,305 7,758 Finance leases 872 — |
Schedule Of Maturities Of Operating And Finance Leases Liabilities | Maturities of lease liabilities as of March 26, 2023 were as follows: Operating Finance Leases Leases 2023 $ 35,586 $ 5,893 2024 43,630 8,232 2025 38,817 8,048 2026 37,110 8,733 2027 30,478 8,008 Thereafter 85,253 68,420 Total future minimum rental commitments 270,874 107,334 Less, amounts representing interest ( 39,834 ) ( 33,330 ) Total lease liabilities $ 231,040 $ 74,004 |
Segment Information - Financial
Segment Information - Financial Information by Operating Segment (Detail) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | |
Mar. 27, 2022 | Mar. 26, 2023 | Mar. 27, 2022 | |
Segment Reporting Information [Line Items] | |||
Revenues | $ 1,024,398 | $ 1,011,149 | |
Segment Income | $ 190,977 | 203,615 | 190,977 |
Operating Segments [Member] | U.S. Stores [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenues | 330,501 | 332,769 | |
Segment Income | 112,683 | 97,292 | |
Operating Segments [Member] | Supply Chain [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenues | 650,124 | 641,962 | |
Segment Income | 48,515 | 46,349 | |
Operating Segments [Member] | International Franchise [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenues | 69,671 | 68,833 | |
Segment Income | 58,139 | 55,046 | |
Intersegment Revenues [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenues | (25,898) | (32,415) | |
Segment Reconciling [Member] | |||
Segment Reporting Information [Line Items] | |||
Segment Income | $ (15,722) | $ (7,710) |
Segment Information (Additional
Segment Information (Additional Information) (Details) $ in Millions | 3 Months Ended |
Mar. 26, 2023 USD ($) | |
U S Stores [Member] | |
Segment Reporting Information [Line Items] | |
Increase Decrease in Segment Income | $ 10.1 |
International Franchise [Member] | |
Segment Reporting Information [Line Items] | |
Increase Decrease in Segment Income | 2 |
Segment Reconciling Items [Member] | |
Segment Reporting Information [Line Items] | |
Increase Decrease in Segment Income | $ 12.1 |
Segment Information - Reconcili
Segment Information - Reconciliation of Total Segment Income to Consolidated Income Before Provision for Income Taxes (Detail) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | |
Mar. 27, 2022 | Mar. 26, 2023 | Mar. 27, 2022 | |
Segment Reconciliation [Abstract] | |||
Total Segment Income | $ 190,977 | $ 203,615 | $ 190,977 |
Depreciation and amortization | (18,976) | (18,170) | (18,976) |
Refranchising loss | (149) | 0 | |
Loss on sale/disposal of assets | (195) | (275) | (195) |
Non-cash equity-based compensation expense | 7,265 | (7,538) | (7,265) |
Income from operations | 164,541 | 177,483 | 164,541 |
Interest income | 49 | 2,391 | 49 |
Interest expense | (46,872) | (46,547) | (46,872) |
Income before provision for income taxes | $ 117,718 | $ 133,327 | $ 117,718 |
Earnings Per Share - Summary of
Earnings Per Share - Summary of Computation of Basic and Diluted Earning per Share (Detail) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 26, 2023 | Mar. 27, 2022 | |
Earnings Per Share [Abstract] | ||
Net income available to common stockholders - basic and diluted | $ 104,770 | $ 90,964 |
Basic weighted average number of shares | 35,391,624 | 36,000,896 |
Earnings per share – basic | $ 2.96 | $ 2.53 |
Diluted weighted average number of shares | 35,708,938 | 36,435,038 |
Earnings Per Share - Diluted | $ 2.93 | $ 2.50 |
Earnings Per Share - Schedule o
Earnings Per Share - Schedule of Denominators Used in Calculating Earning Per Common Share (Detail) - shares | 3 Months Ended | |
Mar. 26, 2023 | Mar. 27, 2022 | |
Stock Option [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive Securities Excluded from Computation of Earnings Per Share | 231,459 | 74,152 |
Restricted Stock [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive Securities Excluded from Computation of Earnings Per Share | 26,975 | 469 |
Restricted Performance Shares [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Securities excluded from computation of earnings per share, amount unvested | 60,068 | 42,777 |
Stockholders' Deficit - Additio
Stockholders' Deficit - Additional Information (Detail) - $ / shares | 3 Months Ended | ||
Apr. 25, 2023 | Mar. 26, 2023 | Mar. 27, 2022 | |
Dividends declared per share | $ 1.21 | $ 1.10 | |
Subsequent Event [Member] | |||
Dividends declared per share | $ 1.21 | ||
Record date of dividend | Jun. 15, 2023 | ||
Dividend declared date | Apr. 25, 2023 | ||
Dividend payable date | Jun. 30, 2023 |
Stockholders' Deficit (Detail)
Stockholders' Deficit (Detail) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 26, 2023 | Mar. 27, 2022 | ||
Stockholders' Deficit [Line Items] | |||
Balance | [1] | $ (4,189,065) | |
Net income | 104,770 | $ 90,964 | |
Balance | $ (4,151,773) | ||
Common Stock [Member] | |||
Stockholders' Deficit [Line Items] | |||
Balance (in shares) | 35,419,718 | 36,138,273 | |
Balance | $ 354 | $ 361 | |
Issuance and cancellation of stock awards, net (in shares) | 14,495 | 340 | |
Tax payments for restricted stock upon vesting, (in shares) | (5,073) | (1,875) | |
Purchases of common stock, (in shares) | (100,515) | (100,810) | |
Purchases of common stock | $ (1) | $ (1) | |
Exercises of stock options, (in shares) | 1,508 | 1,445 | |
Balance (in shares) | 35,330,133 | 36,037,373 | |
Balance | $ 353 | $ 360 | |
Additional Paid-in Capital [Member] | |||
Stockholders' Deficit [Line Items] | |||
Balance | 9,693 | 840 | |
Tax payments for restricted stock upon vesting | (1,553) | (789) | |
Purchases of common stock | (14,547) | (4,037) | |
Exercises of stock options | 343 | 266 | |
Non-cash equity-based compensation expense | 7,538 | 7,265 | |
Balance | 1,474 | 3,545 | |
Retained Deficit [Member] | |||
Stockholders' Deficit [Line Items] | |||
Balance | (4,194,418) | (4,207,917) | |
Net income | 104,770 | 90,964 | |
Dividends declared on common stock and equivalents | (43,005) | (39,765) | |
Purchases of common stock | (15,802) | (43,623) | |
Balance | (4,148,455) | (4,200,341) | |
Accumulated Other Comprehensive Income (Loss) [Member] | |||
Stockholders' Deficit [Line Items] | |||
Balance | (4,694) | (2,820) | |
Currency translation adjustment | (451) | 614 | |
Balance | $ (5,145) | $ (2,206) | |
[1] The condensed consolidated balance sheet at January 1, 2023 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. |
Stockholders' Deficit (Parenthe
Stockholders' Deficit (Parenthetical) (Detail) - $ / shares | 3 Months Ended | |
Mar. 26, 2023 | Mar. 27, 2022 | |
Dividends declared per share | $ 1.21 | $ 1.10 |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Detail) - Dash Brands Ltd [Member] - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | ||
Mar. 28, 2023 | Mar. 26, 2023 | Mar. 27, 2022 | |
Investments at carrying value | $ 125.8 | $ 125.8 | |
Subsequent Event [Member] | |||
initial public offering, per share | $ 46 | ||
senior ordinary shares into ordinary shares | 18,101,019 |
Carrying Amounts and Fair Value
Carrying Amounts and Fair Values of Certain Assets (Detail) - USD ($) $ in Thousands | Mar. 26, 2023 | Jan. 01, 2023 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cash equivalents, carrying amount | $ 112,975 | $ 23,779 |
Restricted cash equivalents, carrying amount | 122,896 | 117,212 |
Investments in marketable securities, carrying amount | 14,622 | 13,395 |
Advertising fund cash equivalents, restricted, carrying amount | 100,768 | 124,496 |
Investments | 125,840 | 125,840 |
Fair Value, Inputs, Level 1 [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cash equivalents, carrying amount | 112,975 | 23,779 |
Restricted cash equivalents, carrying amount | 122,896 | 117,212 |
Investments in marketable securities, carrying amount | 14,622 | 13,395 |
Advertising fund cash equivalents, restricted, fair value | 100,768 | 124,496 |
Fair Value, Inputs, Level 3 [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Investments | $ 125,840 | $ 125,840 |
Schedule of Estimated Fair Valu
Schedule of Estimated Fair Value (Detail) - USD ($) $ in Thousands | Mar. 26, 2023 | Jan. 01, 2023 |
2015 Ten-Year Notes [Member] | ||
Debt Instrument [Line Items] | ||
Principal Amount | $ 750,000 | $ 752,000 |
Fair Value | 730,500 | 717,408 |
2017 Ten-Year Notes [Member] | ||
Debt Instrument [Line Items] | ||
Principal Amount | 950,000 | 952,500 |
Fair Value | 900,600 | 875,348 |
2018 7.5-Year Notes [Member] | ||
Debt Instrument [Line Items] | ||
Principal Amount | 406,938 | 408,000 |
Fair Value | 393,102 | 385,968 |
2018 9.25-Year Notes [Member] | ||
Debt Instrument [Line Items] | ||
Principal Amount | 383,000 | 384,000 |
Fair Value | 366,531 | 355,584 |
2019 Ten-Year Notes [Member] | ||
Debt Instrument [Line Items] | ||
Principal Amount | 654,750 | 656,438 |
Fair Value | 588,620 | 564,536 |
2021 7.5-Year Notes [Member] | ||
Debt Instrument [Line Items] | ||
Principal Amount | 835,125 | 837,250 |
Fair Value | 725,724 | 695,755 |
2021 Ten-Year Notes [Member] | ||
Debt Instrument [Line Items] | ||
Principal Amount | 982,500 | 985,000 |
Fair Value | $ 828,248 | $ 792,925 |
Revenue Disclosures - Additiona
Revenue Disclosures - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Thousands | Mar. 27, 2023 | Mar. 26, 2023 | Jan. 01, 2023 | |
Contract liability, Current | $ 5,600 | $ 5,500 | ||
Contract liability, Noncurrent | 22,300 | 22,700 | ||
Advertising fund assets, restricted | 139,926 | 162,660 | [1] | |
Subsequent Event [Member] | ||||
Temporary reduction | 0.25% | |||
Advertising contribution | 6% | |||
Subsequent Event [Member] | Maximum [Member] | ||||
Digital Per Transaction Technology Fees | $ 0.395 | |||
Subsequent Event [Member] | Minimum [Member] | ||||
Digital Per Transaction Technology Fees | $ 0.08 | |||
U S Stores [Member] | Domestic Franchise [Member] | Cash, cash equivalents and investments [Member] | ||||
Advertising fund assets, restricted | 119,800 | 143,600 | ||
U S Stores [Member] | Domestic Franchise [Member] | Accounts receivable [Member] | ||||
Advertising fund assets, restricted | 13,200 | 13,100 | ||
U S Stores [Member] | Domestic Franchise [Member] | Prepaid expenses [Member] | ||||
Advertising fund assets, restricted | 6,900 | 6,000 | ||
U S Stores [Member] | U.S. Company-owned stores [Member] | Cash, cash equivalents and investments [Member] | ||||
Cash contributed from Company-owned stores | $ 3,300 | $ 4,800 | ||
[1] The condensed consolidated balance sheet at January 1, 2023 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. |
Revenue Disclosures - Schedule
Revenue Disclosures - Schedule of Contract Liabilities Consist of Deferred Franchise Fees and Deferred Development Fees (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 26, 2023 | Mar. 27, 2022 | |
Revenue from Contract with Customer [Abstract] | ||
Deferred franchise fees and deferred development fees at beginning of period | $ 28,225 | $ 29,694 |
Revenue recognized during the period | (1,448) | (1,420) |
New deferrals due to cash received and other | 1,162 | 1,159 |
Deferred franchise fees and deferred development fees at end of period | $ 27,939 | $ 29,433 |
Components of Operating and Fin
Components of Operating and Finance Lease Cost (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 26, 2023 | Mar. 27, 2022 | |
Operating lease cost | $ 10,808 | $ 10,275 |
Finance lease cost: | ||
Amortization of right-of-use assets | 1,199 | 1,208 |
Interest on lease liabilities | 983 | 1,104 |
Total finance lease cost | $ 2,182 | $ 2,312 |
Supplemental balance sheet info
Supplemental balance sheet information related to the Company's leases (Detail) - USD ($) $ in Thousands | Mar. 26, 2023 | Jan. 01, 2023 |
Land and buildings | $ 83,824 | $ 83,902 |
Equipment | 2,501 | 1,606 |
Finance lease assets | 86,325 | 85,508 |
Accumulated depreciation and amortization | (20,591) | (19,405) |
Finance lease assets, net | 65,734 | 66,103 |
Current portion of long-term debt | $ 3,728 | $ 3,313 |
Finance Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration] | Long-Term Debt and Lease Obligation, Current | Long-Term Debt and Lease Obligation, Current |
Long-term debt, less current portion | $ 70,276 | $ 70,886 |
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible Enumeration] | Long-Term Debt and Lease Obligation | Long-Term Debt and Lease Obligation |
Total principal payable on finance leases | $ 74,004 | $ 74,199 |
Finance Lease, Weighted Average Remaining Lease Term | 14 years | 14 years |
Finance Lease, Weighted Average Discount Rate, Percent | 6.10% | 6% |
Operating Lease, Weighted Average Remaining Lease Term | 7 years | 7 years |
Operating Lease, Weighted Average Discount Rate, Percent | 4% | 3.90% |
Supplemental Cash Flow Informat
Supplemental Cash Flow Information Related To Leases (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 26, 2023 | Mar. 27, 2022 | |
Cash paid for amounts included in the measurement of lease liabilities: | ||
Operating cash flows from operating leases | $ 10,320 | $ 10,637 |
Operating cash flows from finance leases | 983 | 1,104 |
Financing cash flows from finance leases | 1,024 | 986 |
Right-of-use assets obtained in exchange for lease obligations: | ||
Operating leases | 9,305 | 7,758 |
Finance leases | $ 872 | $ 0 |
Maturities of Lease Liabilities
Maturities of Lease Liabilities (Detail) - USD ($) $ in Thousands | Mar. 26, 2023 | Jan. 01, 2023 |
Leases [Abstract] | ||
2023 | $ 35,586 | |
2024 | 43,630 | |
2025 | 38,817 | |
2026 | 37,110 | |
2027 | 30,478 | |
Thereafter | 85,253 | |
Total future minimum rental commitments | 270,874 | |
Less – amounts representing interest | (39,834) | |
Total lease liabilities | 231,040 | |
2023 | 5,893 | |
2024 | 8,232 | |
2025 | 8,048 | |
2026 | 8,733 | |
2027 | 8,008 | |
Thereafter | 68,420 | |
Total future minimum rental commitments | 107,334 | |
Less – amounts representing interest | (33,330) | |
Total principal payable on finance leases | $ 74,004 | $ 74,199 |
Leases - Additional Information
Leases - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 26, 2023 | Mar. 27, 2022 | Jan. 01, 2023 | |
Rent Expense | $ 19.3 | $ 18.9 | |
Finance Lease | 1.4 | $ 2.2 | |
Lessee, operating lease, lease not yet commenced, future minimum rental commitments | 40.9 | ||
Potential future payments | $ 23.3 | $ 24.5 | |
Operating Lease [Member] | |||
Lease Term | 11 years |
Supplemental Disclosures of C_2
Supplemental Disclosures of Cash Flow Information - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended |
Mar. 26, 2023 | Jan. 01, 2023 | |
Schedule of Cash Flow, Supplemental [Line Items] | ||
Capital expenditure accrual | $ 6.9 | $ 6.9 |
Accruals for Excise Taxes, Non-cash financing activity | $ 0.3 |
Company-owned Store Transacti_2
Company-owned Store Transactions - Additional Information (Detail) - US Franchisee [Member] $ in Millions | 3 Months Ended |
Mar. 26, 2023 USD ($) | |
Business Acquisition [Line Items] | |
Receipts from sale of franchisees | $ 0.1 |
Reduction of goodwill related to sale of stores | $ 0.1 |