BJ's Wholesale Club Holdings, Inc.

Previous wording

We report on the basis of a 52- or 53-week fiscal year, which ends on the Saturday closest to the last day of January. Accordingly, references herein to “fiscal year 2025” relate to the 52 weeks ending January 31, 2026, and references herein to “fiscal year 2024” relate to the 52 weeks ended February 1, 2025. The third quarter of fiscal year 2025 ended on November 1, 2025, and the third quarter of fiscal year 2024 ended on November 2, 2024, and both included thirteen weeks.

Current wording

We report on the basis of a 52- or 53-week fiscal year, which ends on the Saturday closest to January 31. Accordingly, references herein to “fiscal year 2026” relate to the 52 weeks ending January 30, 2027, and references herein to “fiscal year 2025” relate to the 52 weeks ended January 31, 2026. The first quarter of fiscal year 2026 ended on May 2, 2026, and the first quarter of fiscal year 2025 ended on May 3, 2025, and both included thirteen weeks.

Previous wording

Since pioneering the warehouse club model in New England in 1984, we have grown our footprint to 257 large-format, high volume warehouse clubs and 194 gas stations spanning 21 states as of the date of this filing. In our originating New England market, which has high population density and generates a disproportionate part of U.S. gross domestic product (“GDP”), we operate more than three times the number of clubs compared to the next largest warehouse club competitor. In addition to shopping in our clubs, members are able to shop when and how they want through our website, bjs.com, and our highly rated mobile app, which allows them to use our buy-online-pickup-in-club (“BOPIC”) service, curbside delivery, same-day delivery or traditional ship-to-home service, as well as through the DoorDash and Instacart marketplaces. We also offer Same-Day Select, which offers BJ’s members the ability to pay a one-time fee for unlimited same-day deliveries over a one-year period.

Current wording

Since pioneering the warehouse club model in New England in 1984, we have grown our footprint to 267 large-format, high-volume warehouse clubs and 205 gas stations spanning 22 states as of the date of this filing. In our originating New England market, which has high population density and generates a disproportionate part of U.S. gross domestic product (“GDP”), we operate nearly three times the number of clubs compared to the next largest warehouse club competitor. In addition to shopping in our clubs, members are able to shop when and how they want through our website, bjs.com, and our highly rated mobile app, which allows them to use our BOPIC service, curbside delivery, same-day delivery or traditional ship-to-home service, as well as through the DoorDash and Instacart marketplaces. We also offer Same-Day Select, which offers BJ’s members the ability to pay a one-time fee for unlimited same-day deliveries over a one-year period. Additionally, members may use ExpressPay® to skip checkout lines when they shop in club and pay via their mobile devices.

Previous wording

Our goal is to offer our members significant value and a meaningful return in savings on their annual membership fee. We have over 8 million members paying annual fees to gain access to savings on groceries, general merchandise, services, and gasoline. The annual membership fee for our Club membership is generally $60, and the annual membership fee for our Club+ membership, which offers additional value-enhancing features, is generally $120. Prior to January 1, 2025, the Club and Club+ membership fees were $55 and $110 per year, respectively. We believe that members can save over ten times their $60 Club membership fee versus what they would otherwise pay at traditional supermarket competitors when they spend $2,500 or more per year at BJ’s on manufacturer-branded groceries. In addition to providing significant savings on a representative basket of manufacturer-branded groceries, we accept all manufacturer coupons and also carry our own exclusive brands that enable members to save on price without compromising on quality. Our two private label brands, Wellsley Farms® and Berkley Jensen®, represented approximately 26% of our total net sales, excluding gasoline, for fiscal year 2024. Our customers recognize the relevance of our value proposition across economic environments, as demonstrated by over 25 consecutive years of membership fee income growth. Our membership fee income was $487.0 million for the trailing twelve-months ended November 1, 2025.

Current wording

Our goal is to offer our members significant value and a meaningful return in savings on their annual membership fee. We have over 8 million members paying annual fees to gain access to savings on groceries, general merchandise, services, and gasoline. The annual membership fee for our Club membership is generally $60, and the annual membership fee for our Club+ membership, which offers additional value-enhancing features, is generally $120. Prior to January 1, 2025, the Club and Club+ membership fees were $55 and $110 per year, respectively. We believe that members can save over ten times their $60 Club membership fee versus what they would otherwise pay at traditional supermarket competitors when they spend $2,500 or more per year at BJ’s on manufacturer-branded groceries. In addition to providing significant savings on a representative basket of manufacturer-branded groceries, we accept all manufacturer coupons and also carry our own exclusive brands that enable members to save on price without compromising on quality. Our two private label brands, Wellsley Farms® and Berkley Jensen®, represented approximately 27% of our total net sales, excluding gasoline, for fiscal year 2025. Our customers recognize the relevance of our value proposition across economic environments, as demonstrated by over 25 consecutive years of membership fee income growth. Our membership fee income was $511.7 million for the trailing twelve-months ended May 2, 2026.

Previous wording

Our business is subject to some seasonality. Historically, our business has realized a slightly higher portion of net sales, operating income, and cash flows from operations in the second and fourth fiscal quarters, attributable primarily to the impact of the summer and year-end holiday season, respectively. Our quarterly results have been, and will continue to be, affected by the timing of new club openings and their associated pre-opening expenses. As a result of these factors, our financial results for any single quarter or for periods of less than a year are not necessarily indicative of the results that may be achieved for a full fiscal year.

Current wording

Our business is subject to some seasonality. Historically, our business has generally realized a slightly higher portion of net sales and cash flows from operations in the second and fourth fiscal quarters, attributable primarily to the impact of the summer and year-end holiday season, respectively. Our quarterly results have been, and will continue to be, affected by the timing of new club openings and their associated pre-opening expenses. As a result of these factors, our financial results for any single quarter or for periods of less than a year are not necessarily indicative of the results that may be achieved for a full fiscal year.

Previous wording

The overall economic environment and related changes in consumer behavior have a significant impact on our business. In general, positive conditions in the broader economy promote customer spending in our clubs, while economic weakness, which generally results in a reduction of customer spending, may have a different or more extreme effect on spending at our clubs. Macroeconomic factors that can affect customer spending patterns, and thereby our results of operations, include, among others, employment rates, changes to the Supplemental Nutrition Assistance Program (SNAP), government stimulus programs, tax legislation, business conditions, changes in the housing market, the availability of credit, interest rates and inflation, tariffs, tax rates, and fuel and energy costs. In addition, unemployment rates and benefits may cause us to experience higher labor costs.

Current wording

The overall economic environment and related changes in consumer behavior have a significant impact on our business. In general, positive conditions in the broader economy promote customer spending in our clubs, while economic weakness, which generally results in a reduction of customer spending, may have a different or more extreme effect on spending at our clubs. Macroeconomic factors that can affect customer spending patterns, and thereby our results of operations, include, among others, employment rates, changes to the SNAP, government stimulus programs, tax legislation, business conditions, changes in the housing market, the availability of credit, interest rates and inflation, tariffs, tax rates, and fuel and energy costs. In addition, unemployment rates and benefits may cause us to experience higher labor costs.

Previous wording

The membership model is a critical element of our business. Members drive our results of operations through their membership fee income and their purchases. The majority of members renew within six months following their renewal date. Therefore, our renewal rate is a trailing calculation that captures renewals during the period seven to eighteen months prior to the reporting date. We have grown our membership fee income each year for over 25 consecutive years and the quality of our membership mix is strong as evidenced by our higher tier penetration growth in the first thirty-nine weeks of fiscal year 2025. Our tenured membership renewal rate, a key indicator of membership engagement, satisfaction and loyalty, was 90% at the end of fiscal year 2024.

Current wording

The membership model is a critical element of our business. Members drive our results of operations through their membership fee income and their purchases. The majority of members renew within six months following their renewal date. Therefore, our renewal rate is a trailing calculation that captures renewals during the period seven to eighteen months prior to the reporting date. We have grown our membership fee income each year for over 25 consecutive years and the quality of our membership mix is strong as evidenced by our higher tier penetration growth in the first thirteen weeks of fiscal year 2026. Our tenured membership renewal rate, a key indicator of membership engagement, satisfaction and loyalty, was 90% at the end of fiscal year 2025.

Previous wording

Our historical operating results reflect the impact of our ongoing investments to support our growth. We have made significant investments in our business that we believe have laid the foundation for continued profitable growth. We believe that expanding our club footprint, having substantially all of our end-to-end perishable supply chain in-house, enhancing our information systems, including our distribution center and transportation management systems, and investing in hardware, software, and digitally enabled shopping capabilities for convenience, such as BOPIC, curbside pickup, same-day delivery, ExpressPay, and a digital coupon gallery will enable us to replicate our profitable club format and provide a differentiated shopping experience. We expect these infrastructure investments to support our successful operating model across our club operations.

Current wording

Our historical operating results reflect the impact of our ongoing investments to support our growth. We have made significant investments in our business that we believe have laid the foundation for continued profitable growth. We believe that expanding our club footprint, bringing substantially all of our end-to-end perishable supply chain in-house, enhancing our information systems, including our distribution center and transportation management systems, and investing in hardware, software, and digitally enabled shopping capabilities for convenience, such as BOPIC, curbside pickup, same-day delivery, ExpressPay, and a digital coupon gallery will enable us to replicate our profitable club format and provide a differentiated shopping experience. We expect these infrastructure investments to support our successful operating model across our club operations.

Previous wording

The market price of gasoline impacts our net sales and comparable club sales, and large fluctuations in the price of gasoline may produce a short-term impact on our sales and margins. Retail gasoline prices are driven by daily crude oil and wholesale commodity market changes and are volatile, as they are influenced by factors that include changes in demand and supply of oil and refined products, global geopolitical events, regional market conditions, and supply interruptions caused by severe weather conditions. Typically, the change in crude oil prices impacts the purchase price of wholesale petroleum fuel products, which in turn impacts retail gasoline prices at the pump. During times when prices are particularly volatile, differences in pricing and procurement strategies between the Company and its competitors may lead to temporary margin contraction or expansion, depending on whether prices are rising or falling, and this impact could affect our overall results for a fiscal quarter.

Current wording

The market price of gasoline impacts our net sales and comparable club sales, and large fluctuations in the price of gasoline have a short-term impact on our sales and margins. Retail gasoline prices are driven by daily crude oil and wholesale commodity market changes and are volatile, as they are influenced by factors that include changes in demand and supply of oil and refined products, global geopolitical events, regional market conditions, and supply interruptions caused by severe weather conditions. The change in crude oil prices impacts the purchase price of wholesale petroleum fuel products, which in turn impacts retail gasoline prices at the pump. During times when prices are particularly volatile, differences in pricing and procurement strategies between the Company and its competitors lead to temporary margin contraction or expansion, depending on whether prices are rising or falling, and this impact affects our overall results for a fiscal quarter.

Previous wording

In addition, the relative level of gasoline prices from period to period may lead to differences in our net sales between those periods. Further, because we generally attempt to maintain a fairly stable gross profit per gallon, this variance in net sales, which may be substantial, may or may not have a significant impact on our operating income.

Current wording

In addition, the relative level of gasoline prices from period to period leads to differences in our net sales between those periods. Further, because we generally attempt to maintain a fairly stable gross profit per gallon on an absolute dollar basis, this variance in net sales, which may be substantial, may or may not have a significant impact on our operating income.

Previous wording

Our financial results can be directly impacted by substantial changes in product costs due to commodity cost fluctuations or general inflation, disinflation, or deflation, which could lead to a reduction in our sales, as well as greater margin pressure, as costs may not be able to be passed on to consumers. Changes in commodity prices and changes in inflation rates have impacted several categories of our business and may continue to do so. Inflationary volatility can be attributed to macro economic factors including supply chain disruptions, government stimulus, interest rates, tariffs, and other factors. In response to general inflationary volatility, we seek to minimize the impact of such events by sourcing our merchandise from different vendors, changing our product mix or increasing our pricing when necessary.

Current wording

Our financial results can be directly impacted by substantial changes in product costs due to commodity cost fluctuations or general inflation, disinflation, or deflation, which could lead to a reduction in our sales, as well as greater margin pressure, as costs may not be able to be passed on to consumers. Changes in commodity prices and changes in inflation rates have impacted several categories of our business and may continue to do so. Inflationary volatility can be attributed to macroeconomic factors including supply chain disruptions, government stimulus, interest rates, tariffs, and other factors. In response to general inflationary volatility, we seek to minimize the impact of such events by sourcing our merchandise from different vendors, changing our product mix, or increasing our pricing when necessary.

Previous wording

The increase for both comparative periods was due primarily to traffic and unit growth, particularly in the perishables, grocery, and sundries division, as well as a net increase of nine clubs from the prior year period. Net sales for the third quarter of fiscal year 2025 were also positively impacted by an increase in comparable gallons of gasoline sold compared to the third quarter of fiscal year 2024, while the increase in net sales for the first nine months of fiscal year 2025 was partially offset by a decrease in the average retail price-per-gallon of gasoline.

Current wording

Net sales for the first quarter of fiscal year 2026 were $5.53 billion, a 9.9% increase from net sales reported for the first quarter of fiscal year 2025 of $5.03 billion. The increase was due primarily to growth in the general merchandise and services division, as well as a net increase of nine clubs from the prior year period. Additionally, net sales were positively impacted by an increase in average retail price-per-gallon compared to the first quarter of fiscal year 2025, as well as an increase in comparable gallons sold.

Previous wording

We believe net sales is an important driver of our profitability, particularly comparable club sales. Comparable club sales, a key performance indicator, also known as same-store sales in the retail industry, includes all clubs that were open for at least 13 months at the beginning of the period and were in operation during the entirety of both periods being compared, including relocated clubs and expansions. Comparable club sales allow us to evaluate how our club base is performing by measuring the change in period-over-period net sales in clubs that have been open for the applicable period.

Current wording

We believe net sales are an important driver of our profitability, particularly comparable club sales. Comparable club sales, a key performance indicator, also known as same-store sales in the retail industry, includes all clubs that were open for at least 13 months at the beginning of the period and were in operation during the entirety of both periods being compared, including relocated clubs and expansions. Comparable club sales allow us to evaluate how our club base is performing by measuring the change in period-over-period net sales in clubs that have been open for the applicable period.

Previous wording

Merchandise comparable club sales represents comparable club sales from all merchandise other than our gasoline operations for the applicable period. Merchandise comparable club sales increased 1.8% and 2.6% in the third quarter and the first nine months of fiscal year 2025, respectively, compared to the same periods in fiscal year 2024, primarily driven by increased sales in the perishables, grocery, and sundries division. Sales of general merchandise and services also increased during the third quarter of fiscal year 2025, while the first nine months of fiscal year 2025 showed a decline in sales.

Current wording

Merchandise comparable club sales represents comparable club sales from all merchandise other than our gasoline operations for the applicable period. Merchandise comparable club sales increased 1.5% in the first quarter of fiscal year 2026, compared to the first quarter of fiscal year 2025, driven by increased sales in the general merchandise and services division of 7.1% and the perishables, grocery, and sundries division of 0.7%.

Previous wording

General merchandise and services exhibited growth in the third quarter of fiscal year 2025 compared to the third quarter of fiscal year 2024 due to strength in services despite flat performance in general merchandise categories, while the division showed a slight decline for the first nine months of fiscal year 2025 compared to the same period in the prior year. For the third quarter and first nine months of 2025, growth in consumer electronics and apparel was partially offset by headwinds in large ticket discretionary items in home and seasonal categories.

Current wording

General merchandise and services exhibited growth in the first quarter of fiscal year 2026 compared to the first quarter of fiscal year 2025 due to strength in consumer electronics, partially offset by headwinds in home and fashion.

Previous wording

In the perishables, grocery, and sundries division, growth was led by fresh meat and produce, as well as dairy, nutrition, candy, and snack categories when compared to the third quarter and the first nine months of fiscal year 2024. Third quarter growth was partially offset by decreased demand for paper and household cleaning products.

Current wording

In the perishables, grocery, and sundries division, growth was led by fresh meat and produce, as well as non-alcoholic beverage, nutrition, candy, and snack categories when compared to the first quarter of fiscal year 2025. First quarter growth was partially offset by deflation in perishables, especially eggs, as well as decreases in household cleaning and health and beauty categories.

Previous wording

The impact of gasoline sales is primarily a result of a decrease in retail prices year-over-year for both comparative periods, partially offset by an increase in comparable gallons sold.

Current wording

The impact of gasoline sales is a result of an increase in retail prices year-over-year, as well as an increase in comparable gallons sold.

Previous wording

The increase for both comparative periods was primarily driven by strength in membership acquisition, retention and higher-tier membership penetration across both new and existing clubs, as well as the increase in annual membership fees which became effective in January 2025. We anticipate the annual membership fee increase will positively impact membership fee income for the remainder of fiscal year 2025.

Current wording

Membership fee income was $132.4 million in the first quarter of fiscal year 2026 compared to $120.4 million in the first quarter of fiscal year 2025, a 9.9% increase. The increase was primarily driven by strength in membership acquisition, retention and higher-tier membership penetration across both new and existing clubs.

Previous wording

Cost of sales was $12.9 billion, or 83.1% of net sales, in the first nine months of fiscal year 2025 compared to $12.4 billion, or 83.4% of net sales, in the first nine months of fiscal year 2024. Merchandise gross margin rate, which excludes gasoline sales and membership fee income, increased 10 basis points compared to the first nine months of fiscal year 2024. The Company continues to manage the business to drive profitable growth across the broader merchandise assortment.

Current wording

Cost of sales was $4.63 billion, or 83.8% of net sales, in the first quarter of fiscal year 2026 compared to $4.18 billion, or 83.1% of net sales, in the first quarter of fiscal year 2025. Merchandise gross margin rate, which excludes gasoline sales and membership fee income, decreased by approximately 10 basis points compared to the first quarter of fiscal year 2025, primarily driven by the Company’s continued investments in pricing, partially offset by tariff refund benefits recognized in the quarter.

Previous wording

The increase in SG&A for both comparative periods was primarily driven by increased labor and occupancy costs as a result of new club and gas station openings, as well as increased advertising costs. Additionally, an increase in the number of owned clubs has resulted in increased depreciation expense year-over-year. In the third quarter of fiscal year 2024, the Company benefitted from the net impact of legal settlements reached of approximately $20 million, which contributed to the increase in SG&A expenses year-over-year.

Current wording

SG&A increased by 5.9% to $806.0 million in the first quarter of fiscal year 2026 from $760.9 million in the first quarter of fiscal year 2025. The increase in SG&A was primarily driven by increased labor, occupancy, and operational costs mainly as a result of new club and gas station openings. Additionally, an increase in the number of owned clubs has resulted in increased depreciation expense year-over-year.

Previous wording

Pre-opening expenses fluctuated due to timing of spend and the number of club openings year-over-year.

Current wording

Pre-opening expenses were $14.0 million in the first quarter of fiscal year 2026 compared to $5.0 million in the first quarter of fiscal year 2025. Pre-opening expenses fluctuated due to timing of spend and the number of club openings year-over-year.

Previous wording

The decrease for both comparative periods was primarily due to fluctuations in outstanding borrowings and interest rates year-over-year.

Current wording

Interest expense, net was $12.4 million in the first quarter of fiscal year 2026 compared to $11.1 million in the first quarter of fiscal year 2025. The increase was primarily due to incremental interest expense on finance leases compared to the first quarter of fiscal year 2025, partially offset by a decrease in interest expense related to fluctuations in outstanding borrowings and interest rates year-over-year.

Previous wording

Our primary sources of liquidity are cash flows generated from club operations and borrowings from our ABL Revolving Facility. As of November 1, 2025, cash and cash equivalents totaled $45.1 million and we had $989.5 million of unused capacity under our ABL Revolving Facility. Our principal liquidity needs for the next twelve months and beyond are to fund normal recurring operational expenses and anticipated capital expenditures, fund share repurchases, and meet debt service and principal repayment obligations. We believe that our current resources, together with anticipated cash flows from operations and borrowing capacity under our ABL Revolving Facility, will be sufficient to finance our operations for at least the next twelve months.

Current wording

Our primary sources of liquidity are cash flows generated from club operations and borrowings from our ABL Revolving Facility. As of May 2, 2026, cash and cash equivalents totaled $27.8 million and we had $816.2 million of unused capacity under our ABL Revolving Facility. Our principal liquidity needs for the next twelve months and beyond are to fund normal recurring operational expenses and anticipated capital expenditures, fund share repurchases, and meet debt service and principal repayment obligations. We believe that our current resources, together with anticipated cash flows from operations and borrowing capacity under our ABL Revolving Facility, will be sufficient to finance our operations for at least the next twelve months.

Previous wording

In the first nine months of fiscal year 2025, we repurchased 1,335,000 shares under the 2024 Repurchase Program for a total purchase price of $134.7 million, inclusive of associated costs.

Current wording

During the thirteen weeks ended May 2, 2026, we repurchased 2,114,000 shares under the 2024 Repurchase Program for a total purchase price of $206.6 million, inclusive of associated costs. We continue to prioritize disciplined capital allocation, balancing reinvestment in growth, and returns to shareholders through share repurchases.

Previous wording

Net cash provided by operating activities was $639.1 million for the first nine months of fiscal year 2025 compared to $629.0 million for the first nine months of fiscal year 2024. The increase was primarily due to a $40.8 million increase in net income, inclusive of a $19.7 million increase in depreciation and amortization and a net increase in deferred income tax provisions of $20.9 million. Also impacting net operating cash flows were fluctuations in working capital, including a positive impact of $80.4 million related to merchandise inventories, primarily driven by changes in inventory levels in our general merchandise and grocery divisions; $22.1 million related to accounts receivable due to timing of vendor and customer cash receipts; offset by $114.6 million related to accounts payable as a result of timing and volume of inventory purchases and vendor payments; $50.4 million related to accrued expenses, primarily driven by accruals for vendor invoices and the change in accrued incentive compensation as a result of differences in the expected achievement from period-to-period; and $29.3 million of lease-related activity primarily due to an increase in prepaid rent based on the timing of quarter-end.

Current wording

Net cash provided by operating activities was $140.0 million for the thirteen weeks ended May 2, 2026 compared to $208.1 million for the thirteen weeks ended May 3, 2025. The decrease was primarily due to fluctuations in working capital including $91.0 million related to accounts receivable due to timing of vendor, customer, and other cash receipts, including tariff refunds; $54.7 million related to merchandise inventories, primarily driven by changes in inventory levels in our perishables and grocery divisions and gas inventory due primarily to increased cost per gallon; and $46.3 million related to prepaid expenses and other current assets, primarily driven by increases in income taxes receivable as a result of purchased tax credits. These negative working capital fluctuations were partially offset by $129.2 million related to accounts payable as a result of timing and volume of inventory purchases and vendor payments.

Previous wording

Our net cash from operating activities can fluctuate from period to period due to several factors, including: the timing and mix of sales, which are typically higher in the second and fourth quarters due to seasonality; the timing and volume of inventory purchases as the Company prepares for holiday seasons; lease-related activity; and income tax and other payments.

Current wording

Our net cash from operating activities can fluctuate from period to period due to several factors, including: the timing and mix of sales, the timing and volume of inventory purchases as the Company prepares for holiday seasons, lease-related activity, income tax and other payments.

Previous wording

Net cash used in investing activities was $501.2 million for the first nine months of fiscal year 2025 compared to $427.6 million for the first nine months of fiscal year 2024. This fluctuation is primarily driven by an increase in capital spending of $73.4 million as we continue to execute on our growth strategy with new clubs in our pipeline.

Current wording

Net cash used in investing activities was $184.6 million for the thirteen weeks ended May 2, 2026 compared to $142.3 million for the thirteen weeks ended May 3, 2025. This fluctuation is primarily driven by an increase in capital spending of $41.5 million as we continue to execute on our growth strategy through investment in new clubs in our pipeline, as well as strategic enhancements across our distribution network.

Previous wording

Net cash used in financing activities for the first nine months of fiscal year 2025 was $121.1 million compared to $203.6 million for the first nine months of fiscal year 2024. The decrease in cash used is primarily due to $25.0 million of net borrowings on our ABL Revolving Facility for the first nine months of fiscal year 2025 compared to net payments of $74.0 million in the first nine months of fiscal year 2024, partially offset by a $12.2 million increase in the acquisition of treasury stock compared to the prior year period.

Current wording

Net cash provided by financing activities for the thirteen weeks ended May 2, 2026 was $26.3 million compared to $54.6 million used in financing activities for the thirteen weeks ended May 3, 2025. The increase in cash provided is primarily due to $255.0 million of net borrowings on our ABL Revolving Facility for the thirteen weeks ended May 2, 2026 compared to net payments of $25.0 million in the thirteen weeks ended May 3, 2025, partially offset by a $184.4 million increase in the acquisition of treasury stock compared to the prior year period.

Previous wording

Adjusted free cash flow decreased during third quarter of fiscal year 2025 compared to the third quarter of fiscal year 2024. The fluctuation is primarily the result of unfavorable changes in working capital and an increase in capital spending.

Current wording

Adjusted free cash flow decreased $109.6 million during the first quarter of fiscal year 2026 compared to the first quarter of fiscal year 2025. The decrease is driven by a decrease in cash provided by operating activities, primarily due to unfavorable fluctuations in working capital, and an increase in capital spending.

Previous wording

On July 28, 2022, we entered into the ABL Revolving Facility with an aggregate ABL Revolving Commitment of $1.2 billion pursuant to that certain credit agreement with Bank of America, N.A., as administrative agent and collateral agent, and other lenders party thereto. The maturity date of the ABL Revolving Facility is July 28, 2027.

Current wording

On July 28, 2022, we entered into the ABL Revolving Facility with an aggregate ABL Revolving Commitment of $1.20 billion pursuant to that certain credit agreement with Bank of America, N.A., as administrative agent and collateral agent, and other lenders party thereto. The maturity date of the ABL Revolving Facility is July 28, 2027.

Previous wording

The Fifth Amendment, among other things, provided for a new tranche of term loans in an aggregate principal amount of $400.0 million, which refinanced and replaced in full the existing Tranche B term loans outstanding under the First Lien Term Loan Credit Agreement immediately prior to the effectiveness of the Fifth Amendment. In addition, the Fifth Amendment reduced applicable margin in respect of the interest rate from SOFR plus 200 basis points per annum to SOFR plus 175 basis points per annum. The maturity date of the First Lien Term Loan is February 3, 2029.

Current wording

Loan Credit Agreement immediately prior to the effectiveness of the Fifth Amendment. In addition, the Fifth Amendment reduced applicable margin in respect of the interest rate from SOFR plus 200 basis points per annum to SOFR plus 175 basis points per annum. The maturity date of the First Lien Term Loan is February 3, 2029.

Previous wording

At November 1, 2025, there was $200.0 million outstanding in loans under the ABL Revolving Facility and $10.5 million in outstanding letters of credit. The interest rate on the revolving credit facility was 5.07% and unused capacity was $989.5 million.

Current wording

At May 2, 2026, there was $375.0 million outstanding in loans under the ABL Revolving Facility and $8.8 million in outstanding letters of credit. The interest rate on the revolving credit facility was 4.75% and unused capacity was $816.2 million.

Previous wording

At November 1, 2025, the interest rate for the First Lien Term Loan was 5.88% and there was $400.0 million outstanding.

Current wording

At May 2, 2026, the interest rate for the First Lien Term Loan was 5.41% and there was $400.0 million outstanding.

Previous wording

Our material cash commitments consist primarily of debt obligations, interest payments, leases, and purchase orders for merchandise inventory, agreements for capital items, gasoline, products and services used in our business, information technology, executive employment, transferable tax credits, and other agreements. These material cash commitments impact our short-term and long-term liquidity and capital needs. As of November 1, 2025, other than a cash commitment of approximately $87 million, expected to be paid in the first half of fiscal year 2026, related to the purchase of transferable tax credits, and those items related to the ordinary course of operations of our business such as inventory purchases, agreements for capital items, and new leases and lease amendments, there were no material changes to our material cash commitments from those described in our Annual Report on Form 10-K for fiscal year 2024.

Current wording

Our material cash commitments consist primarily of debt obligations, interest payments, leases, and purchase orders for merchandise inventory, agreements for capital items, gasoline, products and services used in our business, information technology, executive employment, transferable tax credits, and other agreements. These material cash commitments impact our short-term and long-term liquidity and capital needs. As of May 2, 2026, other than a cash commitment of approximately $85 million, expected to be paid in the first quarter of fiscal year 2027, related to the purchase of transferable tax credits, and those items related to the ordinary course of operations of our business such as inventory purchases, agreements for capital items, and new leases and lease amendments, there were no material changes to our material cash commitments from those described in our Annual Report on Form 10-K for fiscal year 2025.

Previous wording

Our accounting policies are set forth in the audited financial statements included in the Company’s Annual Report on Form 10-K for fiscal year 2024. There have been no material changes to these accounting policies and no accounting pronouncements adopted that had a material impact on the Company’s financial statements.

Current wording

Our accounting policies are set forth in the audited financial statements included in the Company’s Annual Report on Form 10-K for fiscal year 2025. There have been no material changes to these accounting policies and no accounting pronouncements adopted that had a material impact on the Company’s financial statements aside from the adoption of ASU 2025-12, which impacts the accounting for treasury shares upon retirement.

Previous wording

Refer to “Note 2. Summary of Significant Accounting Policies” included in this Quarterly Report on Form 10-Q for additional information regarding recently issued accounting pronouncements.

Current wording

Refer to “Note 2. Summary of Significant Accounting Policies” included in this Quarterly Report on Form 10-Q for additional information regarding recently issued and recently adopted accounting pronouncements.