Albertsons Companies, Inc.
For the period ended Feb 28, 2026. Filed Apr 27, 2026.
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A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2026 · Filed Apr 27, 2026
ACI$12.79-3.4%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2025-02-22; filed 2025-04-21.
0001646972-25-000052
Item 7. - Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2026-02-28; filed 2026-04-27.
0001646972-26-000032
Item 7. - Management's Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 135 previous paragraphs and 136 current paragraphs.
78 unchanged; 40 reworded; 18 added; 17 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 17 previous and 16 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (18)
Current report
Identical sales, excluding fuel, increased 2.0% during fiscal 2025. Our digital investments are continuing to drive engagement, customer acquisition and retention. During fiscal 2025, digital sales, which include Drive Up & Go curbside pickup and home delivery, increased 21% compared to fiscal 2024 as we continue to elevate our customer experience. In loyalty, membership grew 12% to 51.2 million in fiscal 2025 compared to fiscal 2024, while program enhancements and simplification continue to fuel deeper engagement through more frequent transactions and easier reward redemption. During fiscal 2025, in-store pharmacy sales were influenced by evolving regulatory and reimbursement dynamics, while management actions remained focused on improving underlying profitability, operational efficiency and customer engagement
Current report
Our customer value proposition focuses on making shopping more affordable, intuitive and personalized across our markets. By combining data-driven personalization with disciplined price investments, we aim to deliver clearer, more consistent value. Through targeted pricing actions, improved loyalty-driven promotions and continued Own Brands innovation, we are reinforcing trust with customers who increasingly expect transparency and consistency in their weekly shop. These efforts are designed to support both value perception and longer-term margin sustainability.
Current report
Technology and AI are an important component of our transformation and long-term growth strategy. In the digital customer experience, AI-driven capabilities are helping to modernize the way customers shop, delivering increased personalization intended to drive engagement, basket size and loyalty. Our AI-enabled shopping assistant continues to evolve as customer adoption increases. As part of our investments in an AI-enabled supply chain, we have launched a proprietary forecasting capability we call Gateway to enhance replenishment performance and improve efficiency across promotional center store SKUs. Execution of these initiatives occurs within a dynamic macroeconomic and competitive environment and requires continued investment, discipline and adaptability.
Current report
•Digital sales increased 21%
Current report
•Loyalty members increased 12% to 51.2 million
Current report
•Net income of $217 million, or $0.40 per Class A common share, inclusive of the $600 million charge, net of tax, or $(1.10) per Class A common share, related to the Opioid Settlement Framework (as defined herein)
Current report
•Adjusted net income of $1,209 million, or $2.18 per Class A common share
Current report
•Adjusted EBITDA of $3,902 million
Current report
(5) Fiscal 2025 includes an estimated $1.4 billion of incremental Net sales and other revenue due to the additional 53rd week.
Current report
(3) Includes the $773.8 million charge in the fourth quarter of fiscal 2025 related to the Opioid Settlement Framework. Refer to "Part II—Item 8. Financial Statements and Supplementary Data—Note 12" for additional information.
Current report
(5) Fiscal 2025 includes an estimated $68 million of incremental Adjusted EBITDA due to the impact of the additional 53rd week.
Current report
(9) Adjusted net income per share for fiscal 2025 includes an estimated incremental $0.03 per share due to the impact of the additional 53rd week.
Current report
As of February 28, 2026, there was $425.0 million outstanding under the ABL Facility and total availability of $3,562.3 million (net of letter of credit usage). On August 27, 2025, the existing ABL Facility was amended and restated to, among other things, extend the maturity date of the facility to August 27, 2030. The new ABL Facility has an interest rate of term SOFR plus a margin ranging from 1.25% to 1.50% and also provides for a letters of credit sub-facility of $1,500.0 million.
Current report
On February 2, 2026, the Company and certain of its subsidiaries (the "Subsidiary Co-Issuers") completed the issuance of $1,200.0 million in aggregate principal amount of 5.625% senior unsecured notes due March 31, 2032 (the "2032 Notes") and $900.0 million in aggregate principal amount of additional 5.750% 2034 Notes, as defined below (the "Additional 2034 Notes" and together with the 2032 Notes, the "New Notes"). The Additional 2034 Notes were issued as "additional securities" under the indenture governing the outstanding 2034 Notes. The Additional 2034 Notes are treated as a single class with the outstanding 2034 Notes for all purposes and have the same terms as those of the outstanding 2034 Notes. The New Notes are guaranteed on a senior unsecured basis by all of our existing and future direct and indirect domestic subsidiaries (other than the Subsidiary Co-Issuers) that are obligors under the ABL Facility. Interest on the 2032 Notes is payable semi-annually in arrears on January 15 and July 15 of each year, with the first payment commencing on July 15, 2026. Proceeds from the New Notes, together with approximately $20.7 million of cash on hand, were used to (i) redeem in full the $1,350.0 million outstanding of our 4.625% senior unsecured notes due January 15, 2027 (the "2027 Notes Refinancing"), (ii) redeem in full the $750.0 million outstanding of our 5.875% senior unsecured notes due February 15, 2028 (the "2028 Notes Refinancing" and together with the 2027 Notes Refinancing, the “Refinancing”); and (iii) pay fees and expenses related to the Refinancing and the issuance of the New Notes.
Current report
On November 10, 2025, the Company and the Subsidiary Co-Issuers completed the issuance of $700.0 million in aggregate principal amount of 5.500% senior unsecured notes due March 31, 2031 (the "2031 Notes") and $800.0 million in aggregate principal amount of 5.750% senior unsecured notes due March 31, 2034 (the "2034 Notes" and together with the 2031 Notes, the "Notes"). The Notes are guaranteed on a senior unsecured basis by all of our existing and future direct and indirect domestic subsidiaries (other than the Subsidiary Co-Issuers) that are obligors under the ABL Facility. Interest on the Notes is payable semi-annually in arrears on May 15 and November 15 of each year, with the first payment commencing on May 15, 2026. During fiscal 2025, the proceeds from the Notes were used to (i) redeem in full the $750.0 million outstanding of our 3.250% senior unsecured notes due March 15, 2026 (the "November Refinancing"); (ii) repay a portion of the borrowings under the ABL Facility; and (iii) pay fees and expenses related to the November Refinancing and the issuance of the Notes.
Current report
On October 14, 2025, the Board authorized an increase to the share repurchase program from $2.0 billion to $2.75 billion of our common stock. The share repurchase program could include open market repurchases, accelerated share repurchase programs, tender offers, block trades, potential privately negotiated transactions, or trading plans in compliance with the federal securities laws. Also on October 14, 2025, we entered into an accelerated share repurchase agreement (the "ASR Agreement") with JPMorgan Chase Bank, National Association ("JPMorgan") to repurchase $750 million of shares of our common stock. The ASR Agreement was funded with $750.0 million of borrowings under the ABL Facility. Pursuant to the ASR Agreement, on October 15, 2025, we paid JPMorgan $750.0 million in cash and received an initial delivery of 35.4 million shares of common stock with a value equal to $600.0 million as of the date the ASR Agreement was executed, representing an estimated 80% of the total shares initially underlying the ASR Agreement. Final settlement of the ASR Agreement occurred during the fourth quarter of fiscal 2025, and the Company received a final delivery of 7.3 million shares on January 8, 2026. The Company repurchased a total of 42.7 million shares under the ASR Agreement at an average price of $17.57 per share, based on the average of the volume-weighted average share price of the Company's common stock on specified dates during the term of the ASR Agreement, less a discount.
Current report
Based on an assessment of the most recent information available, we believe that a majority of the multiemployer plans to which we contribute are underfunded, which is the amount by which the actuarial determined plan liabilities exceed the value of the plan assets. We are only one of many employers that contribute to these plans, and we are neither obligated to fund nor act as a guarantor of any plan's underfunded status. Accordingly, the underfunding of these plans does not represent a liability of the Company.
Current report
The amount of underfunding is an estimate and may change based on factors including investment returns on plan assets, benefit payments, plan amendments, collective bargaining, trustee actions, or legislative changes. The Company's share of the underfunding could increase or decrease depending on changes in asset values, employer participation, or other actions affecting the plans. The Company continues to monitor its potential exposure to underfunded multiemployer pension plans.
Removed paragraphs (17)
Previous report
Identical sales, excluding fuel, increased 2.0% during fiscal 2024. We continued to invest in new merchandising initiatives and our loyalty offerings, and we also deepened digital connection and engagement with our customers. During fiscal 2024, digital sales, which include Drive Up & Go curbside pickup and home delivery, increased 24% compared to fiscal 2023, as the expansion of our services and continued innovation in digital offerings resonated with customers. Loyalty members increased 15% to 45.6 million in fiscal 2024 compared to fiscal 2023.
Previous report
Customer needs for value have evolved due to inflationary pressure and so have our strategies to address those needs as we work with our vendor partners to strategically invest in our customer value proposition in certain categories and markets. In Own Brands, we continue to focus on providing our customers with products they trust through innovation and offering products at an attractive price point. During fiscal 2024, we launched 279 new items, including new items in our Open Nature cauliflower pizza line and in our Signature Select ice cream assortment.
Previous report
We endeavor to use technology in everything we do and over the last few years we have invested strategically to build a best-in-class technology platform, with our core infrastructure in the Cloud and a modernized scalable network. This advanced technology platform, on which we will continue to innovate, powers our eCommerce, store, pharmacy, supply chain, merchandising and AMC operations, and will allow us to leverage emerging technologies to accelerate our operational transformation going forward.
Previous report
Termination of the Merger Agreement
Previous report
As previously disclosed, on October 13, 2022, the Company, The Kroger Co. ("Kroger") and Kettle Merger Sub, Inc., a wholly owned subsidiary of Kroger ("Merger Sub"), entered into an Agreement and Plan of Merger (the "Merger Agreement"), pursuant to which Merger Sub would have been merged with and into the Company (the "Merger"), with the Company surviving the Merger as the surviving corporation and a direct, wholly owned subsidiary of Kroger. On December 10, 2024, the United States District Court for the District of Oregon issued a preliminary injunction in the case Federal Trade Commission et al. v. The Kroger Company and Albertsons Companies, Inc. (Case No.: 3:24-cv-00347-AN), whereby the court enjoined the consummation of the Merger. In light of the preliminary injunction, and in accordance with Section 8.1(e) of the Merger Agreement, the Company exercised its right to terminate the Merger Agreement and sent a notice to Kroger on December 10, 2024 terminating the Merger Agreement. For additional information about the termination of the Merger Agreement and the Merger, see Part II—Item 8. Financial Statements and Supplementary Data—Note 2.
Previous report
•Digital sales increased 24%
Previous report
•Loyalty members increased 15% to 45.6 million
Previous report
•Net income of $959 million, or $1.64 per Class A common share
Previous report
•Adjusted net income of $1,382 million, or $2.34 per Class A common share
Previous report
•Adjusted EBITDA of $4,005 million
Previous report
(2) Represents incremental COVID-19 related pay legislatively required in certain municipalities in which we operate.
Previous report
(4) Related to the Combined Plan during the second quarter of fiscal 2022. See "Part II - Item 8. Financial Statements and Supplementary Data - Note 11" for more information.
Previous report
(d) Loss (gain) on interest rate swaps and energy hedges, net:
Previous report
During fiscal 2024, we repaid $200.0 million, net, of the ABL Facility. As of February 22, 2025, we had no borrowings outstanding under the ABL Facility and total availability of $3,972.6 million (net of letter of credit usage).
Previous report
During the first quarter of fiscal 2023, the conversion of the remaining Convertible Preferred Stock was completed. The holders of Convertible Preferred Stock were entitled to a quarterly dividend at a rate per annum of 6.75% of the liquidation preference per share of the Convertible Preferred Stock. In addition, the holders of Convertible Preferred
Previous report
Stock participated in cash dividends that we pay on our common stock to the extent that such cash dividends exceed $206.25 million per fiscal year and shares of Convertible Preferred Stock remain outstanding as of the applicable record date to participate in such dividends. Cash dividends paid to holders of the Convertible Preferred Stock were $0.8 million and $65.3 million during fiscal 2023 and fiscal 2022, respectively.
Previous report
On October 13, 2022, we declared the Special Dividend, payable to stockholders of record, including holders of Series A preferred stock on an as-converted basis, as of the close of business on October 24, 2022. On January 20, 2023, the Special Dividend of $3,916.9 million was paid.
Reworded paragraphs (40)
Previous wording
Our last three fiscal years consisted of the 52 weeks ended February 22, 2025 ("fiscal 2024"), the 52 weeks ended February 24, 2024 ("fiscal 2023") and the 52 weeks ended February 25, 2023 ("fiscal 2022"). In this Management's Discussion and Analysis of Financial Condition and Results of Operations of Albertsons Companies, Inc., the words "Albertsons," the "Company," "we," "us," "our" and "ours" refer to Albertsons Companies, Inc., together with its subsidiaries.
Current wording
Our last three fiscal years consisted of the 53 weeks ended February 28, 2026 ("fiscal 2025"), the 52 weeks ended February 22, 2025 ("fiscal 2024") and the 52 weeks ended February 24, 2024 ("fiscal 2023"). In this Management's Discussion and Analysis of Financial Condition and Results of Operations of Albertsons Companies, Inc., the words "Albertsons," the "Company," "we," "us," "our" and "ours" refer to Albertsons Companies, Inc., together with its subsidiaries.
Previous wording
We are one of the largest food retailers in the United States, with 2,270 stores across 34 states and the District of Columbia as of February 22, 2025. We operate more than 20 well known banners including Albertsons, Safeway, Vons, Pavilions, Randalls, Tom Thumb, Carrs, Jewel-Osco, ACME, Shaw's, Star Market, United Supermarkets, Market Street, Haggen, Kings Food Marketsand Balducci's Food Lovers Market, with approximately 285,000 talented and dedicated employees, as of February 22, 2025, who serve on average 36.2 million customers each week. Additionally, as of February 22, 2025, we operated 1,728 in-store pharmacies, 1,313 in-store branded coffee shops, 405 associated fuel centers, 22 dedicated distribution centers, 19 manufacturing facilities and various digital platforms.
Current wording
We are one of the largest food retailers in the United States, with 2,244 stores across 35 states and the District of Columbia as of February 28, 2026. We operate 22 well known banners including Albertsons, Safeway, Vons, Pavilions, Randalls, Tom Thumb, Carrs, Jewel-Osco, ACME, Shaw's, Star Market, United Supermarkets, Market Street, Haggen, Kings Food Marketsand Balducci's Food Lovers Market, with approximately 280,000 talented and dedicated employees, as of February 28, 2026, who serve on average 36.5 million customers each week. Additionally, as of February 28, 2026, we operated 1,713 in-store pharmacies, 1,240 in-store branded coffee shops, 405 associated fuel centers, 22 dedicated distribution centers, 19 manufacturing facilities and various digital platforms.
Previous wording
During fiscal 2024, we continued to execute on our Customers for Life strategy, which is centered around driving customer growth and engagement through digital connection, enhancing the customer value proposition, modernizing capabilities through technology and driving productivity. We continue to invest in growth through our four digital platforms of eCommerce, Loyalty, Pharmacy & Health and the use of our mobile app in our stores. Collectively, these digital platforms generate deeper customer engagement, increase digital inventory and enrich our data to accelerate growth in the Albertsons Media Collective ("AMC"). We continue to invest significantly in AMC, building industry-leading technologies to expand the reach of our brand and fuel one of the largest opportunities for reinvestment into our core business.
Current wording
During fiscal 2025, we continued to execute on our business strategy, which is centered around driving customer growth and engagement through digital connection and loyalty, expanding our Media Collective, enhancing the customer value proposition, modernizing capabilities through technology and AI, and driving transformational productivity. We continue to invest in growth through our four digital platforms of eCommerce, Loyalty, Pharmacy & Health and the use of our mobile app in our stores. This integrated ecosystem is intended to enhance our ability to innovate, improve marketing efficiency, and support revenue growth over time, while strengthening customer engagement and loyalty.
Previous wording
Our capital allocation strategy balances investing for the future, strengthening our balance sheet and returns to shareholders through a combination of dividends and opportunistic share repurchases. Capital expenditures were approximately $1,927.5 million during fiscal 2024, primarily including the completion of 127 remodels, the opening of 11 new stores and continued investment in our digital and technology platforms. Capital returns to shareholders during fiscal 2024 included $295.1 million of common stock dividends ($0.51 per common share) and the repurchase of 4.1 million shares of common stock for a total of $82.5 million.
Current wording
Our capital allocation strategy balances investing for the future, strengthening our balance sheet and returning capital to shareholders through a combination of dividends and opportunistic share repurchases. Capital expenditures were approximately $1,833.6 million during fiscal 2025, primarily including the completion of 94 remodels, the opening of nine new stores and continued investment in our digital and technology platforms. Capital returns to shareholders during fiscal 2025 included $322.7 million of common stock dividends ($0.60 per common share) and the investment of $1,492.5 million for the repurchase of common stock, inclusive of the $750 million ASR Agreement. On April 14, 2026, we increased the quarterly cash dividend from $0.15 per common share to $0.17 per common share. Also on April 14, 2026, we increased the remaining share repurchase authorization to $2.0 billion in total.
Previous wording
•Operating cash flows of $2,681 million
Current wording
•Operating cash flows of $2,367 million
Previous wording
•Continued modernization of our store fleet, including completing 127 remodels and opening 11 new stores
Current wording
•Continued modernization of our store fleet, including completing 94 remodels and opening nine new stores
Previous wording
Net sales and other revenue increased $1,153.2 million, or 1.5%, to $80,390.9 million in fiscal 2024 from $79,237.7 million in fiscal 2023. The increase in Net sales and other revenue in fiscal 2024 as compared to fiscal 2023 was driven by our 2.0% increase in identical sales, with growth in pharmacy sales being the primary driver of the identical sales increase, while our digital sales also increased 24% during fiscal 2024. The increase in Net sales and other revenue was partially offset by lower fuel sales. The components of the change in Net sales and other revenue for fiscal 2024 were as follows (in millions):
Current wording
Net sales and other revenue increased $2,781.6 million, or 3.5%, to $83,172.5 million in fiscal 2025 from $80,390.9 million in fiscal 2024. The increase in Net sales and other revenue in fiscal 2025 as compared to fiscal 2024 was driven by our 2.0% increase in identical sales, with growth in pharmacy sales being the primary driver of the identical sales increase, as well as the impact of the additional 53rd week. We also continued to grow our digital sales with a 21% increase during fiscal 2025. These increases in Net sales and other revenue were partially offset by a net reduction in sales driven by store closures since the fourth quarter of fiscal 2024 and lower fuel sales. The components of the change in Net sales and other revenue for fiscal 2025 were as follows (in millions):
Previous wording
(4) Consists primarily of wholesale sales to third parties, commissions, media advertising revenue, rental income and other miscellaneous revenue.
Current wording
(4) Consists primarily of wholesale sales to third parties, commissions, rental income, media advertising revenue and other miscellaneous revenue.
Previous wording
Gross margin rate decreased to 27.7% in fiscal 2024 compared to 27.8% in fiscal 2023. Excluding the impacts of fuel and LIFO, gross margin rate decreased 34 basis points. The strong growth in pharmacy sales, which carries an overall lower gross margin rate, increases in delivery and handling costs related to the 24% growth in our digital sales and investment in our customer value proposition were the primary drivers of the decrease, partially offset by the benefits from our productivity initiatives.
Current wording
Gross margin rate decreased to 27.2% in fiscal 2025 compared to 27.7% in fiscal 2024. Excluding the impacts of fuel and LIFO, gross margin rate decreased 59 basis points. This decrease in gross margin rate was primarily driven by strong growth in pharmacy sales, which carries an overall lower gross margin rate, and increases in delivery and handling costs related to the continued growth in our digital sales. We also continue to make incremental investments in our customer value proposition which were largely funded by the benefits from our productivity initiatives.
Previous wording
Selling and administrative expenses increased to 25.6% of Net sales and other revenue in fiscal 2024 compared to 25.2% in fiscal 2023. Excluding the impact of fuel, Selling and administrative expenses as a percentage of Net sales and other revenue increased 34 basis points during fiscal 2024 compared to fiscal 2023. The increase in Selling and administrative expenses as a percentage of Net sales and other revenue was primarily attributable to an increase in operating expenses related to the ongoing development of our digital and omnichannel capabilities, Merger-related costs, increased business transformation costs, higher employee costs and increased store occupancy costs including additional third-party store security services, partially offset by the benefits from our productivity initiatives.
Current wording
Selling and administrative expenses increased to 26.3% of Net sales and other revenue in fiscal 2025 compared to 25.6% in fiscal 2024. Excluding the impacts of fuel and the Opioid Settlement Framework, Selling and administrative expenses as a percentage of Net sales and other revenue decreased 38 basis points during fiscal 2025 compared to fiscal 2024. The decrease in Selling and administrative expenses as a percentage of Net sales and other revenue was primarily attributable to the sales leveraging of employee costs and lower Merger-related costs, partially offset by an increase in business transformation costs. The benefits from our productivity initiatives continue to partially offset increasing wage rates and other inflationary pressures on our operating expenses.
Previous wording
Loss (Gain) on Property Dispositions and Impairment Losses, Net
Current wording
(Gain) Loss on Property Dispositions and Impairment Losses, Net
Previous wording
For fiscal 2024, net loss on property dispositions and impairment losses was $95.8 million, primarily driven by $104.2 million of asset impairments including impairment losses of $60.9 million of retail store impairment losses, $39.8 million primarily related to equipment from the closing of our micro-fulfillment centers and $3.5 million related to certain technology assets, partially offset by $8.4 million of net gains from the sale of real estate assets. For fiscal 2023, net loss on property dispositions and impairment losses was $43.9 million, primarily driven by the impairment and disposal of certain technology assets, partially offset by net gains from the sale of assets.
Current wording
For fiscal 2025, net gain on property dispositions and impairment losses was $12.2 million, driven by $59.8 million of net gains primarily from the sale of real estate assets, partially offset by $28.4 million of retail store impairment losses and $19.2 million from the impairment and disposal of certain technology assets. For fiscal 2024, net loss on property dispositions and impairment losses was $95.8 million, primarily driven by $104.2 million of asset impairments including impairment losses of $60.9 million of retail store impairment losses, $39.8 million primarily related to equipment from the closing of our micro-fulfillment centers and $3.5 million related to certain technology assets, partially offset by $8.4 million of net gains from the sale of real estate assets.
Previous wording
Interest expense, net was $459.8 million in fiscal 2024 compared to $492.1 million in fiscal 2023. The decrease in Interest expense, net was primarily attributable to lower average outstanding borrowings. The weighted average interest rate was 5.6% during both fiscal 2024 and fiscal 2023, excluding amortization of debt discounts and deferred financing costs.
Current wording
Interest expense, net was $504.2 million in fiscal 2025 compared to $459.8 million in fiscal 2024. The increase in Interest expense, net was primarily attributable to higher average outstanding borrowings.
Previous wording
For fiscal 2024, Other income, net was $43.4 million primarily driven by unrealized gains from non-operating investments and non-service cost components of net pension and post-retirement income. For fiscal 2023, Other income, net was $12.2 million primarily driven by non-service cost components of net pension and post-retirement income, realized gains from non-operating investments and income related to our equity interest and gain on sale of El Rancho during fiscal 2023, partially offset by realized and unrealized losses from non-operating investments.
Current wording
For fiscal 2025, Other income, net was $44.4 million primarily driven by non-service cost components of net pension and post-retirement income, including $29.4 million of pension settlement income, and realized gains from non-operating investments, partially offset by unrealized losses from non-operating investments. For fiscal 2024, Other income, net was $43.4 million primarily driven by unrealized gains from non-operating investments and non-service cost components of net pension and post-retirement income.
Previous wording
Income tax expense was $171.1 million, representing a 15.1% effective tax rate, in fiscal 2024, and $293.0 million, representing an 18.4% effective tax rate, in fiscal 2023. The decrease in the effective income tax rate during fiscal 2024 compared to fiscal 2023 was primarily driven by the recognition of $81.0 million of discrete state income tax benefits related to audit settlements, compared to a reduction of a reserve of $49.7 million for an uncertain tax position due to the expiration of a foreign statute during the first quarter of fiscal 2023.
Current wording
Income tax expense was $50.4 million in fiscal 2025, representing an 18.8% effective tax rate. Income tax expense was $171.1 million in fiscal 2024, representing a 15.1% effective tax rate. The increase in the effective income tax rate during fiscal 2025 compared to fiscal 2024 was primarily driven by the recognition of $81.0 million of discrete state income tax benefits related to the settlement of audits during the third quarter of fiscal 2024. Refer to "Part II—Item 8. Financial Statements and Supplementary Data—Note 9 - Income Taxes" for additional information on our effective tax rate.
Previous wording
Net income was $958.6 million or $1.64 per diluted share during fiscal 2024 compared to $1,296.0 million or $2.23 per diluted share during fiscal 2023. Fiscal 2024 included the $81.0 million or $0.14 per share benefit related to certain discrete state income tax benefits related to the settlement of audits, and fiscal 2023 included the $49.7 million or $0.09 per share benefit related to the reduction in the reserve for an uncertain tax position. Adjusted net income was $1,382.4 million, or $2.34 per share, during fiscal 2024 compared to $1,693.7 million, or $2.88 per share (which includes the $49.7 million tax benefit discussed above), during fiscal 2023.
Current wording
Net income was $217.4 million or $0.40 per diluted share during fiscal 2025 compared to $958.6 million or $1.64 per diluted share during fiscal 2024. Fiscal 2025 included the $599.8 million charge, net of tax, or $(1.10) per share loss related to the Opioid Settlement Framework. Fiscal 2024 included the $81.0 million or $0.14 per share benefit related to certain discrete state income tax benefits related to the settlement of audits. Adjusted net income was $1,209.3 million, or $2.18 per share, during fiscal 2025 compared to $1,382.4 million, or $2.34 per share, during fiscal 2024. Adjusted net income per share during fiscal 2025 includes an estimated incremental $0.03 per share related to the extra week in fiscal 2025.
Previous wording
Adjusted EBITDA was $4,004.7 million, or 5.0% of Net sales and other revenue, during fiscal 2024 compared to $4,317.7 million, or 5.4% of Net sales and other revenue, during fiscal 2023.
Current wording
Adjusted EBITDA was $3,901.5 million, or 4.7% of Net sales and other revenue, during fiscal 2025 compared to $4,004.7 million, or 5.0% of Net sales and other revenue, during fiscal 2024. The increase in Adjusted EBITDA reflects an estimated incremental $68 million related to the extra week in fiscal 2025.
Previous wording
(1) Includes costs associated with third-party consulting fees related to our Customers for Life strategy and employee termination costs related to our reduction in workforce during the fourth quarter of fiscal 2024, as follows (see table below):
Current wording
(1) Primarily includes costs associated with third-party consulting fees related to our business transformation strategy and costs related to employee terminations, as follows (see table below):
Previous wording
(3) Primarily relates to third-party legal and advisor fees and retention program expense related to the Merger and costs in connection with our previously-announced Board-led review of potential strategic alternatives.
Current wording
(2) Fiscal 2025 primarily relates to litigation costs and retention program expense related to the terminated merger. Fiscal 2024 and fiscal 2023 primarily include third-party legal and advisor fees and retention program expense related to the merger.
Previous wording
(i) Primarily includes adjustments for pension settlement loss, unconsolidated equity investments and other costs not considered in our core performance.
Current wording
(i) Primarily includes adjustments for unconsolidated equity investments and other costs not considered in our core performance.
Previous wording
(7) Represents the conversion of Convertible Preferred Stock to the fully outstanding as-converted Class A common shares as of the end of each respective period, for periods in which the Convertible Preferred Stock is antidilutive under GAAP. Fiscal 2022 reflects the impact of the Special Dividend (as defined below) that is attributable to the holders of Convertible Preferred Stock on an as-converted basis.
Current wording
(7) Represents the conversion of Convertible Preferred Stock to the fully outstanding as-converted Class A common shares as of the end of each respective period, for periods in which the Convertible Preferred Stock is antidilutive under GAAP.
Previous wording
Net cash provided by operating activities was $2,680.6 million during fiscal 2024 compared to $2,659.5 million during fiscal 2023. The increase in cash flow from operating activities during fiscal 2024 compared to fiscal 2023 was due to less cash paid for taxes, legal settlements, multiemployer pension plan withdrawal liabilities and interest, partially offset by a decrease in Adjusted EBITDA, higher Merger-related costs, changes in working capital and an increase in contributions to our defined benefit pension plans during fiscal 2024.
Current wording
Net cash provided by operating activities was $2,366.7 million during fiscal 2025 compared to $2,680.6 million during fiscal 2024. The decrease in cash flow from operating activities during fiscal 2025 compared to fiscal 2024 was primarily driven by a decrease in Adjusted EBITDA and increases in cash paid for income and indirect taxes, insurance claims, operating leases and business transformation costs, as well as changes in working capital related to inventory, accounts payable and other prepaids. These decreases in cash flow from operating activities were partially offset by lower Merger-related costs and contributions to our defined benefit pension plans.
Previous wording
Net cash used in investing activities during fiscal 2023 was $1,746.7 million primarily due to payments for property, equipment and intangibles of $2,036.6 million, partially offset by proceeds from the sale of assets of $217.6 million, which includes $166.1 million related to the sale of our equity interest in El Rancho during fiscal 2023. Payments for property, equipment and intangibles included the completion of 150 remodels, the opening of six new stores and continued investments in our digital and technology platforms.
Current wording
Net cash used in investing activities during fiscal 2025 was $1,679.4 million primarily due to payments for property, equipment and intangibles of $1,833.6 million, partially offset by proceeds from the sale of assets of $109.5 million, primarily related to real estate. Payments for property, equipment and intangibles included the completion of 94 remodels, the opening of nine new stores and continued investment in our digital and technology platforms.
Previous wording
Net cash used in investing activities during fiscal 2024 was $1,891.8 million primarily due to payments for property, equipment and intangibles of $1,927.5 million, partially offset by proceeds from the sale of assets of $31.4 million, primarily related to real estate. Payments for property, equipment and intangibles included the completion of 127 remodels, the opening of 11 new stores and continued investment in our digital and technology platforms.
Current wording
Net cash used in investing activities during fiscal 2024 was $1,891.8 million primarily due to payments for property, equipment and intangibles of $1,927.5 million, partially offset by proceeds from the sale of assets of $31.4 million, primarily related to real estate. Payments for property, equipment and intangibles included the completion of 127 remodels, the opening of 11 new stores and continued investments in our digital and technology platforms.
Previous wording
In fiscal 2025, we expect capital expenditures to be in the range of $1.7 billion to $1.9 billion.
Current wording
In fiscal 2026, we expect capital expenditures to be in the range of $2.0 billion to $2.2 billion.
Previous wording
Net cash used in financing activities was $1,183.4 million in fiscal 2023 primarily consisting of the $950.0 million partial repayment of the ABL Facility, dividends paid on our Class A common stock, payments of obligations under finance leases and tax withholding payments on vesting of RSUs, partially offset by $150.0 million of proceeds from the issuance of debt under the ABL Facility.
Current wording
Net cash used in financing activities was $782.2 million in fiscal 2025 primarily consisting of the repurchase of common stock, dividends paid on our Class A common stock, payments for debt financing costs, payments of obligations under finance leases and tax withholding payments on vesting of RSUs, partially offset by $4,200.0 million of issuances and subsequent $3,450.0 million of redemptions of senior unsecured notes (as further discussed below under the caption Debt Management). Net proceeds from the issuance of long-term debt also includes $425.0 million from the asset-based loan facility (as amended, the "ABL Facility"), including the $750 million of borrowings related to the ASR Agreement and subsequent repayment using proceeds from the issuance of senior unsecured notes in fiscal 2025.
Previous wording
Net cash used in financing activities was $684.1 million in fiscal 2024 primarily consisting of the $250.0 million repayment of the asset-based loan facility (as amended, the "ABL Facility"), dividends paid on our Class A common stock, the repurchase of common stock, payments of obligations under finance leases and tax withholding payments on vesting of RSUs, partially offset by $50.0 million of proceeds from the issuance of debt under the ABL Facility.
Current wording
Net cash used in financing activities was $684.1 million in fiscal 2024 primarily consisting of the $250.0 million repayment of the ABL Facility, dividends paid on our Class A common stock, the repurchase of common stock, payments of obligations under finance leases and tax withholding payments on vesting of RSUs, partially offset by $50.0 million of proceeds from the issuance of debt under the ABL Facility.
Previous wording
Total debt, including both the current and long-term portions of finance lease obligations, net of debt discounts and deferred financing costs, decreased $248.5 million to $7,820.1 million as of the end of fiscal 2024 compared to $8,068.6 million as of the end of fiscal 2023.
Current wording
Total debt, including both the current and long-term portions of finance lease obligations, net of debt discounts and deferred financing costs, increased $1,126.5 million to $8,946.6 million as of the end of fiscal 2025 compared to $7,820.1 million as of the end of fiscal 2024.
Previous wording
On March 11, 2025, subsequent to the end of fiscal 2024, we completed the issuance of $600.0 million in aggregate principal amount of 6.250% senior unsecured notes due March 15, 2033 (the "2033 Notes"). Interest on the 2033 Notes is payable semi-annually in arrears on March 15 and September 15 of each year, with the first payment commencing on September 15, 2025. On March 17, 2025, subsequent to the end of fiscal 2024, proceeds from the 2033 Notes, together with approximately $5.6 million of cash on hand, were used to (i) redeem in full the $600.0 million outstanding of our 7.500% senior unsecured notes due March 15, 2026 and (ii) pay fees and expenses related to the issuance of the 2033 Notes.
Current wording
On March 11, 2025, the Company and the Subsidiary Co-Issuers completed the issuance of $600.0 million in aggregate principal amount of 6.250% senior unsecured notes due March 15, 2033 (the "2033 Notes"). The 2033 Notes are guaranteed on a senior unsecured basis by all of our existing and future direct and indirect domestic subsidiaries (other than the Subsidiary Co-Issuers) that are obligors under the ABL Facility. Interest on the 2033 Notes is payable semi-annually in arrears on March 15 and September 15 of each year, and the first payment commenced on September 15, 2025. Proceeds from the 2033 Notes, together with approximately $5.7 million of cash on hand, were used to (i) redeem in full the $600.0 million outstanding of our 7.500% senior unsecured notes due March 15, 2026 (the "March Refinancing") and (ii) pay fees and expenses related to the March Refinancing and the issuance of the 2033 Notes.
Previous wording
We have established a dividend policy pursuant to which we intend to pay a quarterly dividend on our Class A common stock. Cash dividends paid on our Class A common stock were $295.1 million ($0.51 per common share), $276.2 million ($0.48 per common share) and $255.1 million ($0.48 per common share) during fiscal 2024, fiscal 2023 and fiscal 2022, respectively. On December 11, 2024, the Board increased the quarterly cash dividend 25% from $0.12 per common share to $0.15 per common share. On April 15, 2025, we announced the next quarterly dividend payment of $0.15 per share of Class A common stock to be paid on May 9, 2025 to stockholders of record as of the close of business on April 25, 2025.
Current wording
We have established a dividend policy pursuant to which we intend to pay a quarterly dividend on our Class A common stock. Cash dividends paid on our Class A common stock were $322.7 million ($0.60 per common share), $295.1 million ($0.51 per common share) and $276.2 million ($0.48 per common share) during fiscal 2025, fiscal 2024 and fiscal 2023, respectively. On April 14, 2026 subsequent to the end of fiscal 2025, we announced that the Board of Directors (the "Board") increased the quarterly cash dividend 13% from $0.15 per common share to $0.17 per common share. Also on April 14, 2026, we announced the next quarterly dividend payment of $0.17 per share of Class A common stock to be paid on May 8, 2026 to stockholders of record as of the close of business on April 24, 2026.
Previous wording
On December 11, 2024, the Board authorized a share repurchase program of up to $2.0 billion of our common stock. The share repurchase program could include open market repurchases, accelerated share repurchase programs, tender offers, block trades, potential privately negotiated transactions, or trading plans in compliance with the federal securities laws. Subsequent to the Board authorization, during the fourth quarter of fiscal 2024, we repurchased an aggregate of 4.1 million shares of our common stock for a total of $82.5 million pursuant to such share repurchase authorization. We did not repurchase any shares of our common stock during fiscal 2023 and fiscal 2022.
Current wording
During fiscal 2025 and fiscal 2024, we repurchased an aggregate of 78.7 million shares and 4.1 million shares of our common stock for a total of $1,492.5 million and $82.5 million, respectively. We did not repurchase any shares of our common stock during fiscal 2023. On April 14, 2026, the Board authorized an increase to the remaining share repurchase authorization of $900 million, resulting in a total remaining authorization of $2.0 billion as of April 14, 2026.
Previous wording
Based on current operating trends, we believe that we have significant sources of cash to meet our liquidity needs for the next 12 months and for the foreseeable future, including cash on hand, cash flows from operating activities and other sources of liquidity, including the ABL Facility. We estimate our liquidity needs over the next 12 months to be approximately $5.5 billion, which includes anticipated requirements for incremental working capital, capital expenditures, pension obligations, interest payments, quarterly dividends on Class A common stock, common stock repurchases, operating leases and finance leases. In addition, we may enter into refinancing and sale leaseback transactions from time to time. We believe we have adequate cash flow to continue to maintain our current debt ratings and to respond effectively to competitive conditions.
Current wording
Based on current operating trends, we believe that we have significant sources of cash to meet our liquidity needs for the next 12 months and for the foreseeable future, including cash on hand, cash flows from operating activities and other sources of liquidity, including the ABL Facility. We estimate our liquidity needs over the next 12 months to be in the range of $6.0 billion to $6.5 billion. This includes $425.0 million related to the outstanding borrowings under our ABL Facility for which we may, at our discretion, elect to pay all or a portion of the outstanding balance within the next 12 months, and anticipated requirements for working capital, capital expenditures, pension obligations, interest payments and scheduled principal payments of debt, operating leases, finance leases, legal settlements, quarterly dividends on Class A common stock and common stock repurchases. In addition, we may enter into refinancing and sale leaseback transactions from time to time. We believe we have adequate cash flow to continue to maintain our current debt ratings and to respond effectively to competitive conditions.
Previous wording
(1) The cash requirements table excludes funding of pension and other postretirement benefit obligations, which totaled $91.3 million in fiscal 2024 and is expected to total approximately $57 million in fiscal 2025. This table also excludes recurring contributions under various multiemployer pension plans, which totaled $547.7 million in fiscal 2024 and is expected to total approximately $560 million in fiscal 2025.
Current wording
(1) The cash requirements table excludes funding of pension and other postretirement benefit obligations, which totaled $56.9 million in fiscal 2025 and is expected to total approximately $50 million in fiscal 2026. This table also excludes recurring contributions under various multiemployer pension plans, which totaled $583.3 million in fiscal 2025 and is expected to total approximately $610 million in fiscal 2026.
Previous wording
(5) Consists of self-insurance liabilities, which have not been reduced by insurance-related receivables, as well as payment obligations related to the Combined Plan. The table excludes the unfunded pension and postretirement benefit obligation of $170.3 million. The potential settlement payments related to unrecognized tax benefits have been excluded from the contractual obligations table because a reasonably reliable estimate of the timing of future tax settlements cannot be determined. Also excludes deferred tax liabilities and certain other deferred liabilities that will not be settled in cash.
Current wording
(5) Consists of self-insurance liabilities, which have not been reduced by insurance-related receivables, as well as payment obligations related to withdrawal liabilities. The table also includes expected cash outflows related to the Opioid Settlement Framework estimated liability. The table excludes the unfunded pension and postretirement benefit obligation of $98.8 million. The potential settlement payments related to unrecognized tax benefits have been excluded from the contractual obligations table because a reasonably reliable estimate of the timing of future tax settlements cannot be determined. Also excludes deferred tax liabilities and certain other deferred liabilities that will not be settled in cash.
Previous wording
We currently contribute to 27 multiemployer plans which provide retirement benefits to participants based on their service to contributing employers. The benefits are paid from assets held in trust for that purpose and the respective plan trustees are responsible for determining the level of benefits to be provided to participants, the management of the plan assets and plan administration. We continue to monitor any potential exposure to underfunded multiemployer plans for our associates who are beneficiaries of these plans.
Current wording
We currently contribute to 28 multiemployer pension plans for a substantial majority of employees represented by unions pursuant to collective bargaining agreements that require us to contribute to these plans. The benefits are paid from assets held in trust for that purpose and the respective plan trustees are responsible for determining the level of benefits to be provided to participants, the management of the plan assets and plan administration. We continue to monitor any potential exposure to underfunded multiemployer plans for our associates who are beneficiaries of these plans.
Previous wording
The American Rescue Plan Act ("ARP Act") establishes a special financial assistance program for financially troubled multiemployer pension plans. Under the ARP Act, eligible multiemployer plans can apply to receive a one-time cash payment in the amount projected by the PBGC to pay pension benefits through the plan year ending 2051. The payment received by the multiemployer plan under this special financial assistance program would not be considered a loan and would not need to be paid back. Any financial assistance received by the multiemployer plan would need to be segregated from the other assets of the multiemployer plans and invested in investment grade bonds or other investments permitted by the PBGC.
Current wording
The American Rescue Plan Act ("ARP Act") establishes a special financial assistance program for financially troubled multiemployer pension plans. Under the ARP Act, eligible multiemployer plans can apply to receive a one-time cash payment in the amount projected by the Pension Benefit Guaranty Corporation ("PBGC") to pay pension benefits through the plan year ending 2051. The payment received by the multiemployer plan under this special financial assistance program would not be considered a loan and would not need to be paid back. Any financial assistance received by the multiemployer plan would need to be segregated from the other assets of the multiemployer plans and invested in investment grade bonds or other investments permitted by the PBGC.
Previous wording
The underfunding of any of these plans to which we contribute are not our liability and though we are not obligated nor the guarantor for any of the underfunding, we have estimated, based on the ratio of our contributions to the total of all contributions to these plans, our allocable share of the underfunding (the amount by which the actuarial determined plan liabilities exceed the value of the plan assets) of these multiemployer plans to which we contribute to be approximately $4.9 billion. Of the 27 multiemployer plans to which we contribute, 15 plans are classified as "Critical" or "Critical and Declining" and eligible for relief under the special financial assistance program through the ARP Act. As of February 22, 2025, four of these 15 plans have received special financial assistance funds, reducing our estimated $4.9 billion allocable share of underfunding to approximately $3.6 billion. The remaining 11 plans have applied for special financial assistance and though the amounts each plan could receive will vary, we currently estimate that these 11 plans represent over 85% of our remaining $3.6 billion allocable share of underfunding. We expect the special financial assistance program under these regulations to provide the funding for these plans to remain solvent for at least the next 25 to 30 years and continue to provide benefits to our associates who are beneficiaries of these multiemployer plans.
Current wording
Of the 28 multiemployer plans to which we contribute, 16 plans are classified as "Critical" or "Critical and Declining" and eligible for relief under the special financial assistance program through the ARP Act. A substantial majority of the eligible multiemployer plans have either received, or have been approved to receive, special financial assistance funds, which have already resulted in, or are expected to result in, a significant reduction in the underfunding of these plans. Based on current expectations and the plans' funding status, we expect the special financial assistance provided under these regulations will allow these plans to remain solvent for at least the next 30 years and continue to provide benefits to our associates who are beneficiaries of these multiemployer plans.
Previous wording
We will continue to make our contributions based on collective bargaining agreements for each of the multiemployer plans to which we contribute. Our contributions to multiemployer plans were $547.7 million, $545.5 million and $546.5 million during fiscal 2024, fiscal 2023 and fiscal 2022, respectively, and we expect to contribute approximately $560 million in fiscal 2025. Refer to "Part I—Item 1A. Risk Factors" and "Part II—Item 8. Financial Statements and Supplementary Data—Note 11" for additional information.
Current wording
We will continue to make our contributions based on collective bargaining agreements for each of the multiemployer plans to which we contribute. Our contributions to multiemployer plans were $583.3 million, $547.7 million and $545.5 million during fiscal 2025, fiscal 2024 and fiscal 2023, respectively, and we expect to contribute approximately $610 million in fiscal 2026. In the event we were to exit certain markets or otherwise cease contributing to certain multiemployer plans, such actions could result in a substantial withdrawal liability. Any resulting withdrawal liability is recognized when it is probable that a liability has been incurred and the amount can be reasonably estimated. Refer to "Part II—Item 8. Financial Statements and Supplementary Data—Note 10" for additional information.
Previous wording
We had letters of credit of $27.4 million outstanding as of February 22, 2025. The letters of credit are maintained primarily to support our performance, payment, deposit or surety obligations. We typically pay bank fees of 1.25% plus a fronting fee of 0.125% on the face amount of the letters of credit.
Current wording
We had letters of credit of $12.7 million outstanding as of February 28, 2026. The letters of credit are maintained primarily to support our performance, payment, deposit or surety obligations. We typically pay bank fees of 1.25% plus a fronting fee of 0.125% on the face amount of the letters of credit.
Previous wording
We are involved in a number of legal proceedings and certain regulatory matters. We record a liability when it is probable that a loss has been incurred and the amount is reasonably estimable. We also perform an assessment of the materiality of loss contingencies where a loss is either reasonably possible or it is reasonably possible that an estimated liability could materially change. If a loss or change in the estimated liability has at least a reasonable possibility of occurring and the impact on the financial statements would be material, we provide disclosure of the nature of the uncertainty and estimate of possible loss or range of loss to the extent such estimate can be made. We review all contingencies at least quarterly to determine whether the likelihood of loss has changed and whether a reasonable estimate of the loss can be made. The assessment of the outcome of litigation can be very difficult to predict as it is subject to legal processes that are highly complex, subject to many factors, including those that are not within our control, and highly dependent on individual facts and circumstances. While management currently believes that the estimated liabilities currently recorded are reasonable, it remains possible that differences in actual outcomes or changes in management's evaluation or predictions could arise that could be material to our financial condition, results of operations or cash flows. In addition, although we are not able to predict the outcome or reasonably estimate a range of possible losses in certain matters described in Part II—Item 8. Financial Statements and Supplementary Data—Note 13" and have not recorded an associated accrual related to these matters, an adverse judgment or negotiated settlement in these matters could be material to our financial condition, results of operations or cash flows.
Current wording
We are involved in a number of legal proceedings and certain regulatory matters. We record a liability when it is probable that a loss has been incurred and the amount is reasonably estimable. We also perform an assessment of the materiality of loss contingencies where a loss is either reasonably possible or it is reasonably possible that an estimated liability could materially change. If a loss or change in the estimated liability has at least a reasonable possibility of occurring and the impact on the financial statements would be material, we provide disclosure of the nature of the uncertainty and estimate of possible loss or range of loss to the extent such estimate can be made. We review all contingencies at least quarterly to determine whether the likelihood of loss has changed and whether a reasonable estimate of the loss can be made. The assessment of the outcome of litigation can be very difficult to predict as it is subject to legal processes that are highly complex, subject to many factors, including those that are not within our control, and highly dependent on individual facts and circumstances. While management currently believes that the estimated liabilities currently recorded are reasonable, it remains possible that differences in actual outcomes or changes in management's evaluation or predictions could arise that could be material to our financial condition, results of operations or cash flows. In addition, although we are not able to predict the outcome or reasonably estimate a range of possible losses in certain matters described in "Part II—Item 8. Financial Statements and Supplementary Data—Note 12" and have not recorded an associated estimated liability related to these matters, an adverse judgment or negotiated settlement in these matters could be material to our financial condition, results of operations or cash flows.