Albertsons Companies, Inc.
For the period ended Jun 20, 2026. Filed Jul 28, 2026.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 20, 2026 · Filed Jul 28, 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-Q
Period ended 2025-11-29; filed 2026-01-07.
0001646972-26-000010
Item 2. - Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-06-20; filed 2026-07-28.
0001646972-26-000046
Item 2. - 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 121 previous paragraphs and 111 current paragraphs.
62 unchanged; 31 reworded; 16 added; 27 removed; 1 previous and 2 current paragraphs rearranged.
Tables are not compared: 14 previous and 13 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 (16)
Current report
•uncertainty regarding the geopolitical environment including armed hostilities, acts of war and disruption in the distribution of goods;
Current report
During the first quarter of fiscal 2026, we continued to execute our business strategy, including investments in our digital and loyalty platforms, media business, customer value proposition, technology capabilities, and productivity initiatives. Our growth initiatives remain focused on eCommerce, loyalty, pharmacy and health offerings, and digital tools that support both online and in-store customer experiences.
Current report
On July 23, 2026, we announced ACI Edge, an operating structure realignment intended to simplify operations, increase accountability, and more effectively leverage enterprise scale. As part of the realignment, we consolidated our 11 divisions into four regions and centralized center-store merchandising under a single enterprise team. The new structure aligns category management, supplier management, and merchandising functions across the enterprise and is intended to improve consistency and execution across banners and regions.
Current report
Identical sales, excluding fuel, decreased 0.8% during the first quarter of fiscal 2026. Digital sales, including Drive Up & Go curbside pickup and home delivery, increased 13% compared to the first quarter of fiscal 2025. Flash delivery continued to be the fastest-growing component of our digital offering during the quarter, and we continued to build our digital capabilities, personalization tools, and fulfillment operations. Our media business also grew during the quarter, driven primarily by increased monetization of existing and new advertising placements. During the quarter, we expanded our advertising offerings through the introduction of branded entertainment solutions for advertising partners.
Current report
We continue to invest in our customer value proposition through a combination of pricing, Own Brands offerings, personalized promotions, digital capabilities, and improving the customer experience. In response to a more pressured unit environment and increasingly value-conscious consumers, we are accelerating execution and making targeted investments in our customer value proposition. These investments are intended to improve customer engagement, traffic and unit trends, and strengthen customer loyalty over time.
Current report
Technology and artificial intelligence capabilities continue to be advanced across multiple areas of the business. Following the ACI Edge operating structure realignment, we expect to deploy technology-enabled tools and operating practices more consistently across the enterprise. During the quarter, we continued to enhance customer-facing digital capabilities by building AI-powered experiences that we believe will improve engagement, increase basket size, and create a more seamless shopping journey. Within supply chain operations, we are expanding the use of advanced analytics and machine learning to support forecasting, inventory management, and replenishment processes.
Current report
•Identical sales decreased 0.8%
Current report
•Digital sales increased 13%
Current report
•Net income of $85 million, or $0.17 per Class A common share
Current report
•Adjusted net income of $210 million, or $0.42 per Class A common share
Current report
•Adjusted EBITDA of $1,013 million
Current report
Net sales and other revenue increased 0.2% to $24,941.6 million for the first quarter of fiscal 2026 from $24,880.8 million for the first quarter of fiscal 2025. The increase in Net sales and other revenue was primarily driven by higher fuel sales, while identical sales declined 0.8%. Pharmacy and digital remained areas of strength, with pharmacy sales continuing to grow despite ongoing Inflation Reduction Act ("IRA") headwinds and digital sales increasing 13% during the first quarter of fiscal 2026.
Current report
Other Income, Net
Current report
For the first quarter of fiscal 2026, Adjusted EBITDA was $1,013.2 million, or 4.1% of Net sales and other revenue, compared to $1,111.0 million, or 4.5% of Net sales and other revenue, for the first quarter of fiscal 2025.
Current report
Net cash used in financing activities was $129.2 million during the first quarter of fiscal 2026 compared to net cash used in financing activities of $422.9 million during the first quarter of fiscal 2025.
Current report
We repaid the remaining $56.5 million in aggregate principal amount outstanding of New Albertsons L.P.'s 7.75% Notes due 2026 on their maturity date, June 15, 2026.
Removed paragraphs (27)
Previous report
•uncertainty regarding the geopolitical environment;
Previous report
•litigation in connection with the previously pending merger and the termination of the merger agreement, resulting in ongoing costs that we may be required to pay in connection with the lawsuit against Kroger, or our inability to collect the $600 million termination fee from Kroger, and negative reactions from the financial markets and our suppliers, customers, and associates as a result of the litigation;
Previous report
During the third quarter of fiscal 2025, we continued to execute on our Customers for Life strategy, which is centered around driving customer growth and engagement through digital connection, expanding our Media Collective, enhancing the customer value proposition, modernizing capabilities through technology 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 accelerating our ability to innovate, optimize marketing spend, and unlock new revenue streams.
Previous report
Identical sales, excluding fuel, increased 2.4% during the third quarter of fiscal 2025. Our digital investments are driving engagement, customer acquisition and retention. During the third quarter of fiscal 2025, digital sales, which include Drive Up & Go curbside pickup and home delivery, increased 21% compared to the third quarter of fiscal 2024. In loyalty, membership grew 12% to 49.8 million in the third quarter of fiscal 2025 compared to the third quarter of fiscal 2024, while program enhancements and simplification continue to fuel deeper engagement. Most recently, we again extended the value of our loyalty platform beyond grocery with the launch of a new offering with Uber One, offering members exclusive benefits and savings.
Previous report
In our customer value proposition, we continued to invest in value through loyalty enhancements, personalized promotions, and selective price investments in key categories. These actions, in addition to partnering with vendors and Own Brands innovation, are driving engagement and value creation. We also continue to carefully manage cost inflation to help stretch customers' wallets.
Previous report
Technology remains central to our long-term growth strategy, and this technology-first approach is enabling us to innovate faster, operate more efficiently and deliver greater value at lower cost. Our modern, cloud-native platform continues to power key operations across eCommerce, stores, pharmacy, supply chain, merchandising and Media Collective operations, and is positioning us to rapidly scale AI to enhance our core business functions and unlock new levels of speed, intelligence and personalization. In our integrated mobile app, AskAI delivers a conversational search experience for cross-category discovery and personalized recommendations, and we recently launched innovations like autonomous shopping assistants.
Previous report
•Identical sales increased 2.4%
Previous report
•Digital sales increased 21%
Previous report
•Loyalty members increased 12% to 49.8 million
Previous report
•Adjusted net income of $390 million, or $0.72 per Class A common share
Previous report
•Adjusted EBITDA of $1,039 million
Previous report
Net sales and other revenue increased 1.9% to $19,123.7 million for the third quarter of fiscal 2025 from $18,774.5 million for the third quarter of fiscal 2024. The increase in Net sales and other revenue was primarily driven by a 2.4% increase in identical sales, with strong growth in pharmacy sales being the primary driver of the identical sales increase. We also continued to grow our digital sales during the third quarter of 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 third quarter of fiscal 2024 and lower fuel sales.
Previous report
Net sales and other revenue increased 2.2% to $62,920.3 million for the first 40 weeks of fiscal 2025 from $61,591.4 million for the first 40 weeks of fiscal 2024. The increase in Net sales and other revenue was primarily driven by a 2.5% increase in identical sales, with strong growth in pharmacy sales being the primary driver of the identical sales increase. We also continued to grow our digital sales during the first 40 weeks of fiscal 2025. These increases in Net sales and other revenue were partially offset by lower fuel sales.
Previous report
Gross margin rate decreased to 27.2% during the first 40 weeks of fiscal 2025 compared to 27.8% during the first 40 weeks of fiscal 2024. Excluding the impact of fuel and LIFO expense, gross margin rate decreased 69 basis points compared to the first 40 weeks of fiscal 2024. This decrease in gross margin rate was 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 funded by the benefits from our productivity initiatives.
Previous report
Selling and administrative expenses decreased to 24.9% of Net sales and other revenue during the third quarter of fiscal 2025 compared to 25.1% during the third quarter of fiscal 2024. Excluding the impact of fuel, Selling and administrative expenses as a percentage of Net sales and other revenue decreased 33 basis points compared to the third quarter of fiscal 2024. This 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 report
For the first 40 weeks of fiscal 2025, net gain on property dispositions and impairment losses was $28.7 million, primarily driven by $48.8 million of net gains primarily from the sale of real estate assets, partially offset by $11.7 million from the impairment and disposal of certain technology assets and $8.4 million of retail store impairment losses. For the first 40 weeks of fiscal 2024, net loss on property dispositions and impairment losses was $59.4 million, primarily driven by $62.7 million of asset impairments including impairment losses of $39.8 million primarily related to equipment from the closing of our micro-fulfillment centers, $19.5 million of retail store impairment losses and $3.5 million related to certain technology assets, partially offset by $3.3 million of net gains from the sale of real estate assets.
Previous report
Interest expense, net was $363.1 million during the first 40 weeks of fiscal 2025 compared to $358.3 million during the first 40 weeks of fiscal 2024. The increase in Interest expense, net was primarily attributable to higher average outstanding borrowings. The weighted average interest rate during the first 40 weeks of fiscal 2025 was 5.5%, excluding amortization and write-off of deferred financing costs and original issue discount, compared to 5.6% during the first 40 weeks of fiscal 2024.
Previous report
Other (Income) Expense, Net
Previous report
Income tax expense was $84.4 million during the third quarter of fiscal 2025, representing a 22.3% effective tax rate. Income tax expense was $14.5 million during the third quarter of fiscal 2024, representing a 3.5% effective tax rate. The increase in the effective income tax rate 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.
Previous report
Net income was $293.3 million, or $0.55 per Class A common share, during the third quarter of fiscal 2025 compared to $400.6 million, or $0.69 per Class A common share, during the third quarter of fiscal 2024. The third quarter of 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 $390.3 million, or $0.72 per Class A common share, during the third quarter of fiscal 2025 compared to $420.3 million, or $0.71 per Class A common share, during the third quarter of fiscal 2024.
Previous report
Net income was $698.2 million, or $1.25 per Class A common share, during the first 40 weeks of fiscal 2025 compared to $786.8 million, or $1.35 per Class A common share, during the first 40 weeks of fiscal 2024. The first 40 weeks of 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 $957.6 million, or $1.69 per Class A common share, during the first 40 weeks of fiscal 2025 compared to $1,112.9 million, or $1.88 per Class A common share, during the first 40 weeks of fiscal 2024.
Previous report
For the third quarter of fiscal 2025, Adjusted EBITDA was $1,038.7 million, or 5.4% of Net sales and other revenue, compared to $1,065.1 million, or 5.7% of Net sales and other revenue, for the third quarter of fiscal 2024. For the first 40 weeks of fiscal 2025, Adjusted EBITDA was $2,998.1 million, or 4.8% of Net sales and other revenue, compared to $3,149.6 million, or 5.1% of Net sales and other revenue for the first 40 weeks of fiscal 2024.
Previous report
Net cash used in financing activities was $461.2 million during the first 40 weeks of fiscal 2025 compared to $492.3 million during the first 40 weeks of fiscal 2024.
Previous report
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, with the first payment commencing on September 15, 2025. On March 17, 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 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 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 the third quarter of fiscal 2025, 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.
Previous report
ASR Agreement. The delivery of any remaining shares will occur at the final settlement of the transactions under the ASR Agreement, which is expected to occur in the first calendar quarter of 2026. The number of shares to be delivered upon final settlement will be based on the average of the volume-weighted average share price of our common stock on specified dates during the term of the ASR Agreement, less a discount.
Previous report
During the first 40 weeks of fiscal 2025, we repurchased an aggregate of 64.1 million shares of common stock for a total of $1,211.6 million, inclusive of the $600.0 million of shares initially delivered under the ASR Agreement.
Reworded paragraphs (31)
Previous wording
•changes in consumer behavior and spending patterns resulting from macroeconomic conditions, including shifts in state and federal assistance programs;
Current wording
•changes in consumer behavior and spending patterns including those resulting from macroeconomic conditions such as inflation and shifts in state and federal assistance programs;
Previous wording
•our inability to execute on our standalone business and value-creating strategies following the termination of the merger agreement with Kroger due to prolonged uncertainties and restrictions on our business during the pendency of the merger;
Current wording
•our ability to execute on our business and value-creating strategies, including our operating structure realignment;
Previous wording
•our ability to recruit and retain qualified or specialized associates who are critical to the success of our Customers for Life strategy;
Current wording
•our ability to attract and retain qualified or specialized associates who are critical to the success of our business strategy;
Previous wording
THIRD QUARTER OF FISCAL 2025 OVERVIEW
Current wording
FIRST QUARTER OF FISCAL 2026 OVERVIEW
Previous wording
We are one of the largest food retailers in the United States, with 2,243 stores across 35 states and the District of Columbia as of November 29, 2025. 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 November 29, 2025, who serve on average 36.4 million customers each week. Additionally, as of November 29, 2025, we operated 1,708 pharmacies, 1,241 in-store branded coffee shops, 404 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 2,240 stores across 35 states and the District of Columbia as of June 20, 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 275,000 talented and dedicated employees, as of June 20, 2026, who serve on average 36.5 million customers each week. Additionally, as of June 20, 2026, we operated 1,708 pharmacies, 1,238 in-store branded coffee shops, 408 associated fuel centers, 22 dedicated distribution centers, 19 manufacturing facilities and various digital platforms.
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 $1,413 million for the first 40 weeks of fiscal 2025, primarily including the completion of 74 remodels, the opening of five new stores and continued investment in our digital and technology platforms. Capital returns to shareholders during the first 40 weeks of fiscal 2025 included $246.7 million of common stock dividends ($0.45 per common share) and the investment of $1,361.6 million for the repurchase of common stock, inclusive of the $750.0 million ASR Agreement.
Current 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 $522 million for the first quarter of fiscal 2026, primarily including the completion of 15 remodels, the opening of four new stores and continued investment in our digital and technology platforms. 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. Capital returns to shareholders during the first quarter of fiscal 2026 included $84.0 million of common stock dividends ($0.17 per common share) and the repurchase of 13.4 million shares of common stock for a total of $226.5 million.
Previous wording
Third quarter of fiscal 2025 highlights
Current wording
First quarter of fiscal 2026 highlights
Previous wording
In summary, our financial and operating highlights for the third quarter of fiscal 2025 include:
Current wording
In summary, our financial and operating highlights for the first quarter of fiscal 2026 include:
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The following table shows stores operating, opened and closed during the periods presented:
Current wording
The following table shows stores operating, acquired, opened and closed during the periods presented:
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Comparison of the Third Quarter of Fiscal 2025 and the First 40 weeks of Fiscal 2025 to the Third Quarter of Fiscal 2024 and the First 40 weeks of Fiscal 2024.
Current wording
Comparison of the First Quarter of Fiscal 2026 to the First Quarter of Fiscal 2025.
Previous wording
The following tables and related discussion set forth certain information and comparisons regarding the components of our Condensed Consolidated Statements of Operations for the 12 and 40 weeks ended November 29, 2025 ("third quarter of fiscal 2025" and "first 40 weeks of fiscal 2025") and 12 and 40 weeks ended November 30, 2024 ("third quarter of fiscal 2024" and "first 40 weeks of fiscal 2024") (dollars in millions, except per share data).
Current wording
The following tables and related discussion set forth certain information and comparisons regarding the components of our Condensed Consolidated Statements of Operations for the 16 weeks ended June 20, 2026 ("first quarter of fiscal 2026") and 16 weeks ended June 14, 2025 ("first quarter of fiscal 2025") (dollars in millions, except per share data).
Previous wording
Identical sales include stores operating during the same period in both the current year and the prior year, comparing sales on a daily basis. Direct to consumer digital sales are included in identical sales, and fuel sales are excluded from identical sales. Acquired stores become identical on the one-year anniversary date of the acquisition. Identical sales for the 12 and 40 weeks ended November 29, 2025 and the 12 and 40 weeks ended November 30, 2024, respectively, were:
Current wording
Identical sales include stores operating during the same period in both the current year and the prior year, comparing sales on a daily basis. Direct to consumer digital sales are included in identical sales, and fuel sales are excluded from identical sales. Acquired stores become identical on the one-year anniversary date of the acquisition. Identical sales for the 16 weeks ended June 20, 2026 and the 16 weeks ended June 14, 2025, respectively, were:
Previous wording
(4) Consists primarily of wholesale revenue to third parties, commissions, rental income, media advertising revenue 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 27.4% during the third quarter of fiscal 2025 compared to 27.9% during the third quarter of fiscal 2024. Excluding the impact of fuel and LIFO expense, gross margin rate decreased 55 basis points compared to the third quarter of fiscal 2024. This decrease in gross margin rate was driven by increases in delivery and handling costs related to the continued growth in our digital sales, and strong growth in pharmacy sales, which carries an overall lower gross margin rate. We also continue to make incremental investments in our customer value proposition which were funded by the benefits from our productivity initiatives.
Current wording
Gross margin rate decreased to 26.6% during the first quarter of fiscal 2026 compared to 27.1% during the first quarter of fiscal 2025. Excluding the impact of fuel and LIFO expense, gross margin rate decreased 23 basis points compared to the first quarter of fiscal 2025. This decrease was primarily driven by increases in delivery and handling costs related to the continued growth in digital sales, as well as higher fuel costs. These impacts were partially offset by improvements in pharmacy margins, primarily related to the impact of the IRA. The Company also continued to make incremental investments in its customer value proposition, funded by productivity initiatives.
Previous wording
Selling and administrative expenses decreased to 25.3% of Net sales and other revenue during the first 40 weeks of fiscal 2025 compared to 25.6% of Net sales and other revenue for the first 40 weeks of fiscal 2024. Excluding the impact of fuel, Selling and administrative expenses as a percentage of Net sales and other revenue decreased 50 basis points compared to the first 40 weeks of fiscal 2024. This decrease in Selling and administrative expenses as a percentage of Net sales and other revenue was primarily attributable to lower Merger-related costs and the sales leveraging of employee 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.
Current wording
Selling and administrative expenses increased to 25.6% of Net sales and other revenue during the first quarter of fiscal 2026 compared to 25.4% of Net sales and other revenue for the first quarter of fiscal 2025. Excluding the impact of fuel, Selling and administrative expenses as a percentage of Net sales and other revenue increased 42 basis points during the first quarter of fiscal 2026 compared to the first quarter of fiscal 2025. This increase in Selling and administrative expenses as a percentage of Net sales and other revenue was primarily attributable to increases in rent and occupancy costs, merger-related litigation costs, business transformation costs and depreciation and amortization, partially offset by a decrease in employee costs. Despite disciplined productivity and cost management initiatives, the rate was negatively impacted by lower identical sales, including the effect of the IRA on pharmacy sales growth.
Previous wording
(Gain) Loss on Property Dispositions and Impairment Losses, Net
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Gain on Property Dispositions and Impairment Losses, Net
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For the third quarter of fiscal 2025, net gain on property dispositions and impairment losses was $1.2 million, primarily driven by $1.3 million of net gains primarily from the sale of real estate assets. For the third quarter of fiscal 2024, net loss on property dispositions and impairment losses was $10.2 million, primarily driven by $6.0 million of retail store impairment losses and $4.2 million of net losses from the sale of real estate assets and equipment disposals.
Current wording
For the first quarter of fiscal 2026, net gain on property dispositions and impairment losses was $4.7 million, primarily driven by net gains from the sale of real estate assets. For the first quarter of fiscal 2025, net gain on property dispositions and impairment losses was $31.9 million, primarily driven by $45.5 million of net gains from the sale of real estate assets, partially offset by $11.4 million from the impairment and disposal of certain technology assets and $2.2 million of retail store impairment losses.
Previous wording
Interest expense, net was $116.0 million during the third quarter of fiscal 2025 compared to $109.0 million during the third quarter of fiscal 2024. The increase in Interest expense, net was primarily attributable to higher average outstanding borrowings. The weighted average interest rate during the third quarter of fiscal 2025 was 5.5%, excluding amortization and write-off of deferred financing costs and original issue discount, compared to 5.6% during the third quarter of fiscal 2024.
Current wording
Interest expense, net was $166.7 million during the first quarter of fiscal 2026 compared to $141.8 million during the first quarter of fiscal 2025. The increase in interest expense, net was primarily attributable to higher average outstanding borrowings.
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For the third quarter of fiscal 2025, other income, net was $4.0 million compared to $5.6 million for the third quarter of fiscal 2024. Other income, net during the third quarter of fiscal 2025 was primarily driven by non-service cost components of net pension and post-retirement income and realized gains from non-operating investments, partially offset by unrealized losses from non-operating investments. Other income, net during the third quarter of fiscal 2024 was primarily driven by unrealized gains from non-operating investments and non-service cost components of net pension and post-retirement expense.
Current wording
For the first quarter of fiscal 2026, other income, net was $16.8 million compared to other income, net of $3.9 million for the first quarter of fiscal 2025. Other income, net during the first quarter of fiscal 2026 was primarily driven by realized gains from non-operating investments and non-service cost components of net pension and post-retirement income, partially offset by unrealized losses from non-operating investments. Other income, net during the first quarter of fiscal 2025 was primarily driven by non-service cost components of net pension and post-retirement income, partially offset by unrealized losses from non-operating investments.
Previous wording
Income tax expense was $210.6 million during the first 40 weeks of fiscal 2025, representing a 23.2% effective tax rate. Income tax expense was $124.7 million during the first 40 weeks of fiscal 2024, representing a 13.7% effective tax rate. The increase in the effective income tax rate 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.
Current wording
Income tax expense was $29.0 million during the first quarter of fiscal 2026, representing a 25.5% effective tax rate. Income tax expense was $75.0 million during the first quarter of fiscal 2025, representing a 24.1% effective tax rate. The increase in the effective income tax rate was primarily driven by the legislative expiration of federal employment tax credits.
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•Net income of $293 million, or $0.55 per Class A common share
Current wording
Net income was $84.7 million, or $0.17 per Class A common share, during the first quarter of fiscal 2026 compared to $236.4 million, or $0.41 per Class A common share, during the first quarter of fiscal 2025. Adjusted net income was $210.3 million, or $0.42 per Class A common share, during the first quarter of fiscal 2026 compared to $318.9 million, or $0.55 per Class A common share, during the first quarter of fiscal 2025.
Previous wording
(1) Primarily includes costs associated with third-party consulting fees related to our Customers for Life strategy and costs related to employee terminations, as follows (see table below):
Current wording
(1) Includes costs related to the Company's business transformation, including third-party consulting fees and certain integration and employee termination costs, as follows (see table below):
Previous wording
(2) The 12 and 40 weeks ended November 29, 2025 primarily relates to litigation costs and retention program expense related to the terminated merger. The 12 and 40 weeks ended November 30, 2024 primarily includes third-party legal and advisor fees and retention program expense related to the Merger.
Current wording
(2) Primarily includes litigation costs related to the terminated merger. The first quarter of fiscal 2025 also includes retention program expense related to the terminated merger.
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Net cash provided by operating activities was $1,649.6 million for the first 40 weeks of fiscal 2025 compared to $1,922.1 million for the first 40 weeks of fiscal 2024. The decrease in cash flow from operating activities during the first 40 weeks of fiscal 2025 compared to the first 40 weeks of fiscal 2024 was primarily driven by a decrease in Adjusted EBITDA and changes in working capital related to inventory and accounts payable, as well as increases in business transformation costs and cash paid for insurance claims, partially offset by lower Merger-related costs and contributions to our defined benefit pension plans.
Current wording
Net cash provided by operating activities was $728.9 million for the first quarter of fiscal 2026 compared to $754.4 million for the first quarter of fiscal 2025. The decrease in cash flow from operations compared to the first quarter of fiscal 2025 was primarily driven by a decrease in Adjusted EBITDA and increases in cash paid for interest, as well as higher merger-related and business transformation costs, partially offset by changes in working capital and lower cash paid for indirect taxes during the first quarter of fiscal 2026.
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Net cash used in investing activities was $1,285.4 million for thefirst 40 weeks of fiscal 2025 compared to $1,416.5 million for the first 40 weeks of fiscal 2024.
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Net cash used in investing activities was $507.7 million for thefirst quarter of fiscal 2026 compared to $474.1 million for the first quarter of fiscal 2025.
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For the first 40 weeks of fiscal 2025, cash used in investing activities consisted primarily of payments for property, equipment and intangibles of $1,412.8 million, partially offset by proceeds from the sale of assets of $85.2 million, primarily related to real estate. Payments for property, equipment and intangibles in the first 40 weeks of fiscal 2025 included the completion of 74 remodels, the opening of five new stores and continued investment in our digital and technology platforms. For the first 40 weeks of fiscal 2024, cash used in investing activities consisted primarily of payments for property, equipment and intangibles of $1,446.7 million, partially offset by proceeds from the sale of assets of $24.1 million, primarily related to real estate. Payments for property, equipment and intangibles in the first 40 weeks of fiscal 2024 included the completion of 84 remodels, the opening of nine new stores and continued investment in our digital and technology platforms.
Current wording
For the first quarter of fiscal 2026, cash used in investing activities consisted primarily of payments for property, equipment and intangibles of $522.1 million and the Hames acquisition of $28.0 million, partially offset by proceeds from the sale of assets of $25.8 million, primarily related to real estate. Payments for property, equipment and intangibles in the first quarter of fiscal 2026 included the completion of 15 remodels, the opening of four new stores and continued investment in our digital and technology platforms.
Previous wording
Net cash used in financing activities during the first 40 weeks of fiscal 2025 consisted primarily 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 $2,100.0 million of issuances and subsequent $1,350.0 million of redemptions of senior unsecured notes (as further discussed below under the caption Debt Management). Proceeds from the issuance of long-term debt also includes $485.0 million of net proceeds from the ABL Facility, including the $750.0 million of borrowings related to the ASR Agreement and subsequent repayment using proceeds from the issuance of senior unsecured notes in the third quarter of fiscal 2025. Net cash used in financing activities during the first 40 weeks of fiscal 2024 consisted primarily of the $250.0 million 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 $50.0 million of proceeds from the issuance of long-term debt under the ABL Facility.
Current wording
Net cash used in financing activities during the first quarter of fiscal 2026 consisted primarily of the repurchase of common stock, dividends paid on our Class A common stock, payments on long-term borrowings and tax withholding payments on vesting of RSUs, partially offset by $275.0 million of proceeds from the issuance of long-term debt under the ABL Facility.
Previous wording
As of November 29, 2025, there was $485.0 million outstanding under our ABL Facility and total availability of $3,504.8 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 LOC sub-facility of $1,500.0 million.
Current wording
As of June 20, 2026, there was $700.0 million outstanding under our ABL Facility and total availability of $3,287.4 million (net of letter of credit usage).
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 $246.7 million ($0.45 per common share) and $208.5 million ($0.36 per common share) during the first 40 weeks of fiscal 2025 and first 40 weeks of fiscal 2024, respectively. On January 7, 2026, we announced the next quarterly dividend payment of $0.15 per share of Class A common stock to be paid on February 6, 2026 to stockholders of record as of the close of business on January 23, 2026.
Current wording
We have established a dividend policy pursuant to which we intend to pay a quarterly dividend on our Class A common stock. On April 14, 2026, the Board of Directors (the "Board") increased the quarterly cash dividend 13% from $0.15 per common share to $0.17 per common share. Cash dividends paid on our Class A common stock were $84.0 million ($0.17 per common share) and $85.7 million ($0.15 per common share) during the first quarter of fiscal 2026 and first quarter of fiscal 2025, respectively. On July 14, 2026, we announced the next quarterly dividend payment of $0.17 per share of Class A common stock to be paid on August 7, 2026 to stockholders of record as of the close of business on July 24, 2026.
Previous wording
The Board has authorized a multi-year share repurchase program of up 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. On October 14, 2025, we entered into the ASR Agreement with 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
Current wording
On April 14, 2026, the Board increased the remaining share repurchase authorization to $2.0 billion in total. 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. During the first quarter of fiscal 2026, we repurchased 13.4 million shares of common stock for a total of $226.5 million pursuant to the existing multi-year repurchase authorization.
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 in the range of $5.5 billion to $6.0 billion. This includes $485.0 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, 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.
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 $6.7 billion. This includes $700.0 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.
Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
For the first quarter of fiscal 2025, cash used in investing activities consisted primarily of payments for property, equipment and intangibles of $584.6 million, partially offset by proceeds from the sale of assets of $78.2 million, primarily related to real estate. Payments for property, equipment and intangibles in the first quarter of fiscal 2025 included the completion of 36 remodels, the opening of three new stores and continued investment in our digital and technology platforms.
Current report — wording carried from elsewhere
Net cash used in financing activities during the first quarter of fiscal 2025 consisted primarily of the repurchase of common stock, dividends paid on our Class A common stock and tax withholding payments on vesting of RSUs, partially offset by $25.0 million of proceeds from the ABL Facility. Proceeds from the issuance of long-term debt and payments on long-term borrowings also included a $600 million issuance and subsequent $600 million redemption of senior unsecured notes.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
For the first 40 weeks of fiscal 2025, other income, net was $37.6 million compared to other expense, net of $0.3 million for the first 40 weeks of fiscal 2024. Other income, net during the first 40 weeks of fiscal 2025 was primarily driven by non-service cost components of net pension and post-retirement income, including $26.8 million of pension settlement income, and realized gains from non-operating investments, partially offset by unrealized losses from non-operating investments. Other expense, net during the first 40 weeks of fiscal 2024 was primarily driven by non-service cost components of net pension and post-retirement expense and unrealized gains and losses from non-operating investments.