Q1 delivered solid revenue growth from higher transactions partially offset by lower average check, but profitability declined due to cost pressures including legal proceedings, wage inflation, and reduced tax benefits.
Key takeaways
Revenue increased 7.4% to $3.1B attributable to higher transactions partially offset by lower average check.
Operating income declined 17.1% to $397.1M (12.9% margin) amid cost pressures from legal proceedings, wage inflation, and lower restaurant sales volumes.
Net income fell 21.7% to $302.8M with diluted EPS of $0.23, driven by reduced tax benefits from option exercises and equity vesting.
Operating cash flow rose to $651.4M primarily from timing of tax-related payments including a federal tax refund.
Free cash flow reached $471.0M after $180.3M capital expenditures mainly for new restaurant development.