v3.26.3
Revenue Recognition
 9 Months Ended
Sep. 27, 2026
Revenue Recognition and Deferred Revenue [Abstract]  
Revenue Recognition Revenue Recognition
The following tables include the disaggregation of Restaurant sales and franchise revenues by restaurant concept and reportable segment for the periods indicated:
THIRTEEN WEEKS ENDED
SEPTEMBER 27, 2026SEPTEMBER 28, 2025
(dollars in thousands)RESTAURANT SALESFRANCHISE REVENUESRESTAURANT SALESFRANCHISE REVENUES
U.S.
Outback Steakhouse$547,163 $7,256 $531,165 $7,359 
Carrabba’s Italian Grill164,361 498 166,007 528 
Bonefish Grill122,407 47 119,976 69 
Fleming’s Prime Steakhouse & Wine Bar83,245 — 85,395 — 
U.S. total917,176 7,801 902,543 7,956 
International Franchise— 7,842 — 7,146 
Other (1)9,800 13 9,377 14 
Total$926,976 $15,656 $911,920 $15,116 
THIRTY-NINE WEEKS ENDED
SEPTEMBER 27, 2026SEPTEMBER 28, 2025
(dollars in thousands)RESTAURANT SALESFRANCHISE REVENUESRESTAURANT SALESFRANCHISE REVENUES
U.S.
Outback Steakhouse$1,723,751 $23,020 $1,700,543 $23,328 
Carrabba’s Italian Grill529,966 1,660 531,478 1,763 
Bonefish Grill395,972 188 382,638 262 
Fleming’s Prime Steakhouse & Wine Bar288,063 — 283,309 — 
U.S. total2,937,752 24,868 2,897,968 25,353 
International Franchise— 23,005 — 23,480 
Other (1)29,007 40 28,240 46 
Total$2,966,759 $47,913 $2,926,208 $48,879 
________________
(1)Includes Restaurant sales for Company-owned restaurants in Hong Kong.
The following table includes a detail of assets and liabilities from contracts with customers included on the Company’s Consolidated Balance Sheets as of the periods indicated:
(dollars in thousands)SEPTEMBER 27, 2026DECEMBER 28, 2025
Other current assets, net
Deferred gift card sales commissions$11,731 $17,155 
Unearned revenue
Deferred gift card revenue$273,895 $370,439 
Deferred loyalty revenue5,153 5,695 
Deferred franchise fees - current556 544 
Other2,515 1,255 
Total Unearned revenue$282,119 $377,933 
Other long-term liabilities, net
Deferred franchise fees - non-current$4,673 $4,408 
The following table is a rollforward of deferred gift card sales commissions for the periods indicated:
THIRTEEN WEEKS ENDEDTHIRTY-NINE WEEKS ENDED
(dollars in thousands)SEPTEMBER 27, 2026SEPTEMBER 28, 2025SEPTEMBER 27, 2026SEPTEMBER 28, 2025
Balance, beginning of the period$12,919 $12,554 $17,155 $16,935 
Deferred gift card sales commissions amortization(4,288)(4,260)(15,928)(16,027)
Deferred gift card sales commissions capitalization3,563 3,547 12,248 12,420 
Other(463)(552)(1,744)(2,039)
Balance, end of the period$11,731 $11,289 $11,731 $11,289 

The following table is a rollforward of unearned gift card revenue for the periods indicated:
THIRTEEN WEEKS ENDEDTHIRTY-NINE WEEKS ENDED
(dollars in thousands)SEPTEMBER 27, 2026SEPTEMBER 28, 2025SEPTEMBER 27, 2026SEPTEMBER 28, 2025
Balance, beginning of the period$302,404 $299,636 $370,439 $366,059 
Gift card sales42,379 41,891 147,263 146,452 
Gift card redemptions & breakage (1)(70,888)(56,357)(243,807)(227,341)
Balance, end of the period$273,895 $285,170 $273,895 $285,170 
________________
(1)The thirteen and thirty-nine weeks ended September 27, 2026 include $13.2 million of gift card breakage as a result of a change in accounting estimate. See below for additional details.
Gift card breakage - The amount of gift cards that will not be redeemed is estimated based on historical redemption patterns and is recognized over time in proportion to actual gift card redemptions. If actual redemptions vary from assumptions used to estimate breakage, gift card breakage revenue may differ from the amount recorded. Establishing breakage rates requires significant judgment and estimates, therefore the Company periodically updates its breakage assumptions. During the thirteen weeks ended September 27, 2026, the Company updated estimated redemption patterns for gift cards that were impacted by the COVID-19 pandemic, which have experienced a sustained decline in redemptions. Based on current redemption data, long-term redemption trends and other qualitative factors affecting customer behavior, the Company now estimates that a greater portion of these gift cards will not be redeemed than reflected in its previous estimates. Accordingly, the Company recorded a change in accounting estimate that increased revenue by $13.2 million and net income by $9.9 million during the thirteen weeks ended September 27, 2026. The Company will continue to monitor redemption activity and may record adjustments in the future related to changes in estimated redemption patterns which could be material.
Franchise Revenue - On November 2, 2026, Cerca Trova Restaurant Group Holdings, Inc. d/b/a Out West Restaurant Group and its subsidiaries ("Out West"), an independently owned franchisee currently operating 61 Outback Steakhouse restaurants in the western United States, filed voluntary petitions for relief under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the District of Delaware (“Bankruptcy Court”). The filing relates solely to Out West and does not involve the Company’s operations, financing or liquidity.

In connection with the Chapter 11 proceedings, the Company entered into an Asset Purchase Agreement (the “Asset Purchase Agreement”) pursuant to which the Company agreed to serve as the stalking horse bidder for the acquisition of substantially all of Out West’s assets, for purchase price of (1) $26.3 million (a) less amounts owed under the DIP Facility (defined below) and (b) plus a dollar-for-dollar increase to the extent the aggregate amount of specified vendor liabilities assumed by the Company at closing is less than $6.1 million (with no increase if such specified liabilities equal or exceed $6.1 million) and (2) the assumption of certain liabilities including lease obligations for future periods, unredeemed gift cards and specified vendor liabilities. The Asset Purchase Agreement is subject to Bankruptcy Court approval and a competitive bidding process. The Company also agreed to provide up to $5.5 million of financing to support Out West’s operations (the “DIP Facility”) during the Chapter 11 proceedings, as needed to maintain minimum liquidity amounts, which was approved through an interim order of
the Bankruptcy Court on November 4, 2026 allowing Out West to make an initial draw of $2.5 million. Repayment of any amounts drawn under the financing by Out West will occur through reduction of the purchase price under the Asset Purchase Agreement, proceeds of the sale of Out West’s assets to another party if the Asset Purchase Agreement is terminated or upon any earlier event of default or termination of the financing agreement.

The bankruptcy filing also was an event of default under Out West’s franchise agreements with the Company and trigger for the automatic termination of the Amended and Restated Holistic Resolution Agreement, dated December 31, 2023, which would result in a priority right of repayment in favor of Out West’s lenders; however, the filing resulted in an automatic stay of these provisions and the parties’ rights and remedies under these agreements are subject to resolution through the Chapter 11 proceedings.

The Chapter 11 proceedings remain ongoing, and there can be no assurance that the Company will complete the contemplated asset acquisition or as to the ultimate outcome of Out West’s Chapter 11 bankruptcy proceedings. Additional information regarding the Chapter 11 proceedings, the Asset Purchase Agreement and the debtor-in-possession financing arrangement was previously included in the Company’s Current Report on Form 8-K filed on November 2, 2026. A copy of the Asset Purchase Agreement is filed as Exhibit 10.3 to this Quarterly Report on Form 10-Q.