US Foods Holding Corp.

Previous wording

The following discussion and analysis should be read together with the accompanying unaudited consolidated financial statements and the notes thereto included in this Quarterly Report and the audited consolidated financial statements and the notes thereto in the 2025 Annual Report. The following discussion and analysis contain certain financial measures that are not required by or presented in accordance with GAAP. We believe these non-GAAP measures provide meaningful supplemental information about our operating performance and liquidity. Information regarding reconciliations of and the rationale for these measures is discussed under “Non-GAAP Reconciliations” below. Results of operations for the 13 weeks and 26 weeks ended June 27, 2026 are compared to the 13 weeks and 26 weeks ended June 28, 2025, unless specifically noted otherwise.

Current wording

The following discussion and analysis should be read together with the accompanying unaudited consolidated financial statements and the notes thereto included in this Quarterly Report and the audited consolidated financial statements and the notes thereto in the 2025 Annual Report. The following discussion and analysis contain certain financial measures that are not required by or presented in accordance with GAAP. We believe these non-GAAP measures provide meaningful supplemental information about our operating performance and liquidity. Information regarding reconciliations of and the rationale for these measures is discussed under “Non-GAAP Reconciliations” below. Results of operations for the 13 weeks and 39 weeks ended September 26, 2026 are compared to the 13 weeks and 39 weeks ended September 27, 2025, unless specifically noted otherwise.

Previous wording

At US Foods, we strive to inspire and empower chefs and foodservice operators to bring great food experiences to consumers. This mission is supported by our strategy of WE HELP YOU MAKE IT®. Our Promise brings three key elements to the forefront for our customers: (1) more quality products, like our large and diverse portfolio of Exclusive Brands that is based on consistency, freshness and innovation; (2) more tools, centering on our MOXē®business platform, and lastly; (3) more deliveries, with options for on-time deliveries enabled by our traditional broadline services and our flexible and convenient Pronto® program. We operate as one business with standardized business processes, shared systems infrastructure, and an organizational model that optimizes national scale with local execution, allowing us to manage our business as a single operating segment. We have centralized activities where scale matters and our local field structure focuses on customer-facing activities.

Current wording

At US Foods, we strive to inspire and empower chefs and foodservice operators to bring great food experiences to consumers. This mission is supported by our strategy of WE HELP YOU MAKE IT®. Our Promise brings three key elements to the forefront for our customers: (1) more quality products, like our large and diverse portfolio of Exclusive Brands that is based on consistency, freshness and innovation; (2) more tools, centering on our MOXē®business platform; and (3) more deliveries, with options for on-time deliveries enabled by our traditional broadline services and our flexible and convenient Pronto® program. We operate as one business with standardized business processes, shared systems infrastructure, and an organizational model that optimizes national scale with local execution, allowing us to manage our business as a single operating segment. We have centralized activities where scale matters and our local field structure focuses on customer-facing activities.

Previous wording

For the 13 weeks ended June 27, 2026, compared to the same period a year ago, total case volume increased 1.9%, driven by a 5.1% increase in independent restaurant case volume, a 3.5% increase in healthcare volume and a 4.4% increase in hospitality volume, partially offset by a 1.5% decrease in chain volume.

Current wording

For the 13 weeks ended September 26, 2026, compared to the same period a year ago, total case volume increased 1.3%, driven by a 5.0% increase in independent restaurant case volume, a 3.3% increase in healthcare volume and a 3.7% increase in hospitality volume, partially offset by a 1.5% decrease in chain volume.

Previous wording

For the 13 weeks and 26 weeks ended June 27, 2026, compared to the same period a year ago, total organic case volume increased 1.7% and 1.4%, respectively, which includes 5.0% and 4.7% organic independent restaurant case volume growth for the 13 weeks and 26 weeks ended June 27, 2026, respectively.

Current wording

For the 13 weeks and 39 weeks ended September 26, 2026, compared to the same period a year ago, total organic case volume increased 1.2% and 1.3%, respectively, which includes 5.0% and 4.9% organic independent restaurant case volume growth for the 13 weeks and 39 weeks ended September 26, 2026, respectively.

Previous wording

Net sales increased $450 million, or 4.5%, and $709 million, or 3.6%, for the 13 weeks and 26 weeks ended June 27, 2026, respectively, driven by case volume growth and food cost inflation of 2.3% and 1.7% for the 13 weeks and 26 weeks ended June 27, 2026, respectively.

Current wording

Net sales increased $211 million, or 2.1%, and $920 million, or 3.1%, for the 13 weeks and 39 weeks ended September 26, 2026, respectively, driven by case volume growth and food cost inflation of 0.4% and 1.3% for the 13 weeks and 39 weeks ended September 26, 2026, respectively.

Previous wording

Gross profit increased $142 million, or 8.0%, to $1,919 million for the 13 weeks ended June 27, 2026, and increased $181 million or 5.3%, to $3,572 million for the 26 weeks ended June 27, 2026. For the 13 weeks ended June 27, 2026, the increase was primarily a result of an increase in total case volume, improved cost of goods sold and a favorable year-over-year LIFO adjustment. For the 26 weeks ended June 27, 2026, the increase was primarily a result of an increase in total case volume and improved cost of goods sold, partially offset by an unfavorable year-over-year LIFO adjustment. Gross profit was positively impacted by a decrease to LIFO reserve of $5 million for the 13 weeks ended June 27, 2026 and negatively impacted by LIFO expense of $33 million for the 26 weeks ended June 27, 2026. Gross profit was negatively impacted by LIFO expense of $14 million and $19 million for the 13 weeks and 26 weeks ended June 28, 2025, respectively. As a percentage of net sales, gross profit was 18.2% and 17.6% for the 13 weeks ended June 27, 2026, and June 28, 2025, respectively, and 17.7% and 17.4% for the 26 weeks ended June 27, 2026 and June 28, 2025, respectively.

Current wording

Gross profit increased $151 million, or 8.6%, to $1,904 million for the 13 weeks ended September 26, 2026, and increased $332 million or 6.5%, to $5,476 million for the 39 weeks ended September 26, 2026. For the 13 weeks ended September 26, 2026, the increase was primarily a result of an increase in total case volume, improved cost of goods sold and a favorable year-over-year LIFO adjustment. For the 39 weeks ended September 26, 2026, the increase was primarily a result of an increase in total case volume, improved cost of goods sold, and a favorable year-over-year LIFO adjustment. Gross profit was positively impacted by a decrease to LIFO reserve of $3 million for the 13 weeks ended September 26, 2026 and negatively impacted by LIFO expense of $30 million for the 39 weeks ended September 26, 2026. Gross profit was negatively impacted by LIFO expense of $46 million and $65 million for the 13 weeks and 39 weeks ended September 27, 2025, respectively. As a percentage of net sales, gross profit was 18.3% and 17.2% for the 13 weeks ended September 26, 2026, and September 27, 2025, respectively, and 17.9% and 17.4% for the 39 weeks ended September 26, 2026 and September 27, 2025, respectively.

Previous wording

Total operating expenses increased $71 million, or 5.1%, to $1,476 million for the 13 weeks ended June 27, 2026, and increased $118 million, or 4.2%, to $2,913 million for the 26 weeks ended June 27, 2026. For the 13 weeks and 26 weeks ended June 27, 2026, the increase was primarily a result of an increase in total case volume and higher distribution, selling and administrative costs, partially offset by actions to streamline administrative processes and costs. As a percentage of net sales, operating expenses were 14.0% and 13.9% for the 13 weeks ended June 27, 2026 and June 28, 2025, respectively, and 14.5% and 14.4% for the 26 weeks ended June 27, 2026 and June 28, 2025, respectively.

Current wording

Total operating expenses increased $62 million, or 4.2%, to $1,533 million for the 13 weeks ended September 26, 2026, and increased $180 million, or 4.2%, to $4,446 million for the 39 weeks ended September 26, 2026. For the 13 weeks and 39 weeks ended September 26, 2026, the increase was primarily a result of an increase in total case volume and higher distribution, selling and administrative costs, partially offset by actions to streamline administrative processes and costs. As a percentage of net sales, operating expenses were 14.7% and 14.4% for the 13 weeks ended September 26, 2026 and September 27, 2025, respectively, and 14.6% and 14.4% for the 39 weeks ended September 26, 2026 and September 27, 2025, respectively.

Previous wording

(4) Transformational costs represent non-recurring expenses prior to formal launch of strategic projects with anticipated long-term benefits to the Company. These costs generally relate to third party consulting and non-capitalizable technology. For both the 13 weeks and 26 weeks ended June 27, 2026 and June 28, 2025, business transformation costs related to projects associated with information technology infrastructure initiatives and workforce efficiencies.

Current wording

(4) Transformational costs represent non-recurring expenses prior to formal launch of strategic projects with anticipated long-term benefits to the Company. These costs generally relate to third party consulting and non-capitalizable technology. For both the 13 weeks and 39 weeks ended September 26, 2026 and September 27, 2025, business transformation costs related to projects associated with information technology infrastructure initiatives and workforce efficiencies.

Previous wording

(5) Includes: (i) aggregate acquisition, integration related costs and divestiture costs of $1 million and $7 million for the 13 weeks and 26 weeks ended June 27, 2026 and June 28, 2025, respectively, and $2 million and $20 million for the 26 weeks ended June 27, 2026 and June 28, 2025, respectively; and (ii) other gains, losses or costs that we are permitted to addback for purposes of calculating Adjusted EBITDA under certain agreements governing our indebtedness.

Current wording

(5) Includes: (i) aggregate acquisition, integration related costs and divestiture costs of $1 million and $6 million for the 13 weeks ended September 26, 2026 and September 27, 2025, respectively, and $3 million and $24 million for the 39 weeks ended September 26, 2026 and September 27, 2025, respectively; and (ii) other gains, losses or costs that we are permitted to addback for purposes of calculating Adjusted EBITDA under certain agreements governing our indebtedness.

Previous wording

•Adjusted EBITDA as a percentage of net sales was 5.0% in 2026, compared to 4.8% in 2025.

Current wording

•Adjusted EBITDA as a percentage of net sales was 5.3% in 2026, compared to 5.0% in 2025.

Previous wording

Net sales increased $709 million or 3.6%, to $20,142 million in 2026, driven by case volume growth and food cost inflation of 1.7%. Total case volume increased 1.6% driven by a 4.8% increase in independent restaurant case volume, a 3.6% increase in healthcare volume and a 4.8% increase in hospitality volume, partially offset by a 1.9% decrease in chain volume. Total organic case volume increased 1.4% and organic independent restaurant case volume increased 4.7%. Organic broadline cases of private brands represented approximately 35% of total cases in 2026 and 2025.

Current wording

Net sales increased$211 million, or 2.1%, to $10,402 million in 2026, driven by case volume growth and food cost inflation of 0.4%. Total case volume increased 1.3% driven by a 5.0%increase in independent restaurant case volume, a 3.3%increase in healthcare volume and a 3.7%increase in hospitality volume, partially offset by a 1.5%decrease in chain volume. Total organic case volume increased 1.2% and organic independent restaurant case volume increased 5.0%. Organic broadline cases of private brands represented approximately 35% of total cases in 2026 and 2025.

Previous wording

Gross profit increased $142 million, or 8.0%, to $1,919 million in 2026, primarily as a result of an increase in total case volume, improved cost of goods sold, and a $19 million favorable year-over-year LIFO adjustment. Our LIFO method of inventory costing resulted in a benefit of$5 million in 2026 compared to $14 million expense in 2025, driven by a reduction in inflation and an decrease in inventory values in multiple categories. Gross profit as a percentage of net sales was 18.2% in 2026, compared to 17.6% in 2025.

Current wording

Gross profit increased $151 million, or 8.6%, to $1,904 million in 2026, primarily as a result of an increase in total case volume, improved cost of goods sold, and a $49 million favorable year-over-year LIFO adjustment. Our LIFO method of inventory costing resulted in a benefit of$3 million in 2026 compared to $46 million expense in 2025, driven by a reduction in inflation and a decrease in inventory values in multiple categories. Gross profit as a percentage of net sales was 18.3% in 2026, compared to 17.2% in 2025.

Previous wording

Operating expenses, comprised of distribution, selling and administrative costs, increased $118 million, or 4.2%, to $2,913 million in 2026. Operating expenses increased primarily as a result of an increase in total case volume and higher distribution, selling and administrative costs, partially offset by actions to streamline administrative processes and costs. Operating expenses as a percentage of net sales were 14.5% in 2026, compared to 14.4% in 2025.

Current wording

Operating expenses, consisting of distribution, selling and administrative costs and restructuring activity and asset impairment charges, increased $62 million, or 4.2%, to $1,533 million in 2026. Operating expenses increased primarily as a result of an increase in total case volume and higher distribution, selling and administrative costs, partially offset by actions to streamline administrative processes and costs. Operating expenses as a percentage of net sales were 14.7% in 2026, compared to 14.4% in 2025.

Previous wording

Our operating income was $443 million in 2026, compared to operating income of $372 million in 2025. Theincrease in operating income was due to the factors discussed in the relevant sections above.

Current wording

Our operating income was $371 million in 2026, compared to operating income of $282 million in 2025. Theincrease in operating income was due to the factors discussed in the relevant sections above.

Previous wording

Other income—net includes components of net periodic pension benefit credits, exclusive of the service cost component associated with our defined benefit and other postretirement plans. We recognized other income—net of$3 million in 2026 and$2 million in 2025.

Current wording

Other income—net includes components of net periodic pension benefit credits, exclusive of the service cost component associated with our defined benefit and other postretirement plans. We did not recognize other income—net in either 2026 or 2025.

Previous wording

Interest expense—netincreased $1 million to$152 million in 2026 primarily due to higher borrowings under the ABL Facility, partially offset by lower interest rates for our variable rate debt.

Current wording

Interest expense—netincreased $2 million to $78 million in 2026 primarily due to higher net borrowings under the ABL Facility, partially offset by lower interest rates for our variable rate debt.

Previous wording

For the 13 weeks ended June 27, 2026, the Company’s effective income tax rate of 25% differed from the 21% federal corporate income tax rate primarily as a result of state income taxes and the recognition of various discrete tax items. These discrete tax items included a tax benefit of $1 million, primarily related to excess tax benefits associated with share-based compensation. For the 13 weeks ended June 28, 2025, the Company’s effective income tax rate of 25% differed from the 21% federal corporate income tax rate primarily as a result of state income taxes and the recognition of various discrete tax items. These discrete tax items included a tax benefit of $2 million, primarily related to excess tax benefits associated with share-based compensation.

Current wording

For the 13 weeks ended September 26, 2026, the Company’s effective income tax rate of 26% differed from the 21% federal corporate income tax rate primarily as a result of state income taxes and the recognition of various discrete tax items. The discrete tax items were not material individually or in the aggregate. For the 13 weeks ended September 27, 2025, the Company’s effective income tax rate of 26% differed from the 21% federal corporate income tax rate primarily as a result of state income taxes and the recognition of various discrete tax items. The discrete tax items were not material individually or in the aggregate.

Previous wording

Our net income was $275 million in 2026, compared to a net income of $224 million in 2025. The improvement in net income was due to the relevant factors discussed above.

Current wording

Our net income was $218 million in 2026, compared to net income of $153 million in 2025. The improvement in net income was due to the relevant factors discussed above.

Previous wording

•Adjusted EBITDA as a percentage of net sales was 5.7% in 2026, compared to 5.4% in 2025.

Current wording

•Adjusted EBITDA as a percentage of net sales was 5.1% in 2026, compared to 4.9% in 2025.

Previous wording

Net sales increased $450 million or 4.5%, to $10,532 million in 2026, driven by case volume growth and food cost inflation of 2.3%. Total case volume increased 1.9% driven by a 5.1%increase in independent restaurant case volume, a 3.5%increase in healthcare volume and a 4.4%increase in hospitality volume, partially offset by a 1.5%decrease in chain volume. Total organic case volume increased 1.7% and organic independent restaurant case volume increased 5.0%. Organic broadline cases of private brands represented approximately 35% of total cases in 2026 and 2025.

Current wording

Net sales increased $920 million or 3.1%, to $30,544 million in 2026, driven by case volume growth and food cost inflation of 1.3%. Total case volume increased 1.5% driven by a 5.0% increase in independent restaurant case volume, a 3.5% increase in healthcare volume and a 4.5% increase in hospitality volume, partially offset by a 1.8% decrease in chain volume. Total organic case volume increased 1.3% and organic independent restaurant case volume increased 4.9%. Organic broadline cases of private brands represented approximately 35% of total cases in 2026 and 2025.

Previous wording

Gross profit increased$181 million, or 5.3%, to$3,572 million in 2026, primarily as a result of an increase in total case volume and improved cost of goods sold, partially offset by a$14 million unfavorable year-over-year LIFO adjustment. Our LIFO method of inventory costing resulted in an expense of $33 million in 2026 compared to $19 million expense in 2025, driven by inflation and an increase in inventory values in multiple categories. Gross profit as a percentage of net sales was 17.7% in 2026, compared to 17.4% in 2025.

Current wording

Gross profit increased$332 million, or 6.5%, to$5,476 million in 2026, primarily as a result of an increase in total case volume, improved cost of goods sold, and a$35 million favorable year-over-year LIFO adjustment. Our LIFO method of inventory costing resulted in an expense of $30 million in 2026 compared to $65 million expense in 2025, driven by a reduction in inflation and a decrease in inventory values in multiple categories. Gross profit as a percentage of net sales was 17.9% in 2026, compared to 17.4% in 2025.

Previous wording

Operating expenses, comprised of distribution, selling and administrative costs, increased $71 million, or 5.1%, to $1,476 million in 2026. Operating expenses increased primarily as a result of an increase in total case volume and higher distribution, selling and administrative costs, partially offset by actions to streamline administrative processes and costs. Operating expenses as a percentage of net sales were 14.0% in 2026, compared to 13.9% in 2025.

Current wording

Operating expenses, consisting of distribution, selling and administrative costs and restructuring activity and asset impairment charges, increased $180 million, or 4.2%, to $4,446 million in 2026. Operating expenses increased primarily as a result of an increase in total case volume and higher distribution, selling and administrative costs, partially offset by actions to streamline administrative processes and costs. Operating expenses as a percentage of net sales were 14.6% in 2026, compared to 14.4% in 2025.

Previous wording

Our operating income was $659 million in 2026, compared to operating income of $596 million in 2025. Theincrease in operating income was due to the factors discussed in the relevant sections above.

Current wording

Our operating income was $1,030 million in 2026, compared to operating income of $878 million in 2025. Theincrease in operating income was due to the factors discussed in the relevant sections above.

Previous wording

Interest expense—netincreased $3 million to $77 million in 2026 primarily due to higher borrowings under the ABL Facility, partially offset by lower interest rates for our variable rate debt.

Current wording

Interest expense—netincreased $3 million to$230 million in 2026 primarily due to higher borrowings under the ABL Facility, partially offset by lower interest rates for our variable rate debt.

Previous wording

For the 26 weeks ended June 27, 2026, the Company’s effective income tax rate of 23% differed from the 21% federal corporate income tax rate primarily as a result of state income taxes and the recognition of various discrete tax items. These discrete tax items included a tax expense of $4 million related to an unrecognized tax benefit due to tax positions taken in prior years and a tax benefit of $16 million, primarily related to excess tax benefits associated with share-based compensation. For the 26 weeks ended June 28, 2025, the Company’s effective income tax rate of 24% differed from the 21% federal corporate income tax rate primarily as a result of state income taxes and the recognition of various discrete tax items. These discrete tax items included a tax benefit of $8 million, primarily related to excess tax benefits associated with share-based compensation.

Current wording

For the 39 weeks ended September 26, 2026, the Company’s effective income tax rate of 24% differed from the 21% federal corporate income tax rate primarily as a result of state income taxes and the recognition of various discrete tax items. These discrete tax items included a tax expense of $4 million related to an unrecognized tax benefit due to tax positions taken in prior years and a tax benefit of $18 million, primarily related to excess tax benefits associated with share-based compensation. For the 39 weeks ended September 27, 2025, the Company’s effective income tax rate of 25% differed from the 21% federal corporate income tax rate primarily as a result of state income taxes and the recognition of various discrete tax items. These discrete tax items included a tax benefit of $8 million, primarily related to excess tax benefits associated with share-based compensation.

Previous wording

Our net income was $391 million in 2026, compared to a net income of $339 million in 2025. The improvement in net income was due to the relevant factors discussed above.

Current wording

Our net income was $609 million in 2026, compared to net income of $492 million in 2025. The improvement in net income was due to the relevant factors discussed above.

Previous wording

Our ongoing operations and strategic objectives require working capital and continuing capital investment. Our primary sources of liquidity include cash provided by operations, as well as access to capital from bank borrowings and other types of debt and financing arrangements. As of June 27, 2026, the Company had approximately $1.8 billion in cash and available liquidity.

Current wording

Our ongoing operations and strategic objectives require working capital and continuing capital investment. Our primary sources of liquidity include cash provided by operations, as well as access to capital from bank borrowings and other types of debt and financing arrangements. As of September 26, 2026, the Company had approximately $1.9 billion in cash and available liquidity.

Previous wording

We had outstanding borrowings totaling $433 million and had issued letters of credit totaling $315 million under the ABL Facility as of June 27, 2026. There was remaining capacity of $1,752 million under the ABL Facility as of June 27, 2026.

Current wording

We had outstanding borrowings totaling $304 million and had issued letters of credit totaling $315 million under the ABL Facility as of September 26, 2026. There was remaining capacity of $1,881 million under the ABL Facility as of September 26, 2026.

Previous wording

The agreements governing our indebtedness contain customary covenants. These include, among other things, covenants that may restrict our ability to incur certain additional indebtedness, create or permit liens on our assets, pay dividends, or engage in mergers or consolidations. The Company had approximately $3.1 billion of restricted payment capacity under these covenants and approximately $1.2 billion of its net assets were restricted after taking into consideration the net deferred tax assets and intercompany balances that eliminate in consolidation as of June 27, 2026.

Current wording

The agreements governing our indebtedness contain customary covenants. These include, among other things, covenants that may restrict our ability to incur certain additional indebtedness, create or permit liens on our assets, pay dividends, or engage in mergers or consolidations. The Company had approximately $3.2 billion of restricted payment capacity under these covenants and approximately $1.1 billion of its net assets were restricted after taking into consideration the net deferred tax assets and intercompany balances that eliminate in consolidation as of September 26, 2026.

Previous wording

Cash flows used in investing activities in the 26 weeks ended June 27, 2026 and June 28, 2025 included cash expenditures of $174 million and $161 million, respectively, related to investments in information technology, property and equipment and construction of and improvements to distribution facilities.

Current wording

Cash flows used in investing activities in the 39 weeks ended September 26, 2026 and September 27, 2025 included cash expenditures of $266 million and $276 million, respectively, related to investments in information technology, property and equipment and construction of and improvements to distribution facilities.

Previous wording

During the 26 weeks ended June 28, 2025, the Company completed the asset acquisition of Jake’s Finer Foods. Cash paid for the acquisition of Jake’s Finer Foods was approximately $87 million. Investing activities for the 26 weeks ended June 28, 2025, also included cash proceeds from the sale of Freshway of$38 million.

Current wording

During the 39 weeks ended September 27, 2025, the Company completed the asset acquisition of Jake’s Finer Foods. Cash paid for the acquisition of Jake’s Finer Foods was approximately $87 million. Investing activities for the 39 weeks ended September 27, 2025, also included cash proceeds from the sale of Freshway of$38 million.

Previous wording

We expect total cash capital expenditures in fiscal year 2026 to be between $400 million and $440 million. We expect to fund our capital expenditures with available cash or cash generated from operations.

Current wording

We expect total cash capital expenditures in fiscal year 2026 to be between $410 million and $430 million. We expect to fund our capital expenditures with available cash or cash generated from operations.

Previous wording

Cash flows used in financing activities in the 26 weeks ended June 27, 2026 included $4 million in net borrowings under the ABL Facility and $63 million in scheduled payments under our financing leases. The Company incurred approximately $4 million of lender fees and third-party costs in connection with the ABL Facility amendment, which were capitalized as deferred financing costs. Financing activities in the 26 weeks ended June 27, 2026 also included $445 million common stock repurchased under the May 2025 Share Repurchase Program and the November 2025 Share Repurchase Program, $17 million of proceeds received from stock purchases under our employee stock purchase plan, $10 million of proceeds from the exercise of employee stock options, which were offset by $51 million of employee tax withholdings paid in connection with the vesting of stock awards.

Current wording

Cash flows used in financing activities in the 39 weeks ended September 26, 2026 included $125 million in net repayments under the ABL Facility and $96 million in scheduled payments under our financing leases. The Company incurred approximately $4 million of lender fees and third-party costs in connection with the ABL Facility amendment, which were capitalized as deferred financing costs. Financing activities in the 39 weeks ended September 26, 2026 also included $635 million common stock repurchased under the Company’s share repurchase programs, $23 million of proceeds received from stock purchases under our employee stock purchase plan and $11 million of proceeds from the exercise of employee stock options, which were partially offset by $51 million of employee tax withholdings paid in connection with the vesting of stock awards.

Previous wording

Cash flows used by financing activities in the 26 weeks ended June 28, 2025 included $175 million in net payments under the ABL Facility and $77 million in scheduled payments under our financing leases. Financing activities in the 26 weeks ended June 28, 2025 also included $270 million common stock repurchased under the Company’s prior and original share repurchase program initially approved in November 2022, $16 million of proceeds received from stock purchases under our employee stock purchase plan, $5 million of proceeds from the exercise of employee stock options, which were offset by $34 million of employee tax withholdings paid in connection with the vesting of stock awards.

Current wording

Cash flows used in financing activities in the 39 weeks ended September 27, 2025 included $61 million in net payments under the ABL Facility and $86 million in scheduled payments under our financing leases. Financing activities in the 39 weeks ended September 27, 2025 also included $602 million of common stock repurchased under the Company’s prior share repurchase program initially approved in November 2022 and the November 2025 Share Repurchase Program, $22 million of proceeds received from stock purchases under our employee stock purchase plan and $6 million of proceeds from the exercise of employee stock options, which were partially offset by $35 million of employee tax withholdings paid in connection with the vesting of stock awards.

Previous wording

We have prepared the financial information in this Quarterly Report in accordance with GAAP. Preparing the Company’s consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during these reporting periods. We base our estimates and judgments on historical experience and other factors we believe are reasonable under the circumstances. These assumptions form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Part II, Item 7—“Management’s Discussion and Analysis of Financial Condition and Results of Operations” of the 2025 Annual Report includes a summary of the critical accounting policies we believe are the most important to aid in understanding our financial results. There have been no changes to those critical accounting policies that have had a material impact on our reported amounts of assets, liabilities, revenue, or expenses during the 26 weeks ended June 27, 2026.

Current wording

We have prepared the financial information in this Quarterly Report in accordance with GAAP. Preparing the Company’s consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during these reporting periods. We base our estimates and judgments on historical experience and other factors we believe are reasonable under the circumstances. These assumptions form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Part II, Item 7—“Management’s Discussion and Analysis of Financial Condition and Results of Operations” of the 2025 Annual Report includes a summary of the critical accounting policies we believe are the most important to aid in understanding our financial results. There have been no changes to those critical accounting policies that have had a material impact on our reported amounts of assets, liabilities, revenue, or expenses during the 39 weeks ended September 26, 2026.