What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-12-19 compared with 2025-06-13 · 74 added, 102 removed, 159 unchanged (53% of the section changed)

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(“AutoZone” or the “Company”).

The following MD&A discussion should be read in conjunction with our Condensed Consolidated Financial Statements, related notes to those statements and other financial information, including forward-looking statements and risk factors, that appear elsewhere in this Quarterly Report on Form 10-Q, our Annual Report on Form 10-K for the year ended August 31, 2024, and other filings we make with the SEC.

Forward-Looking Statements

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issues relating to the confidentiality, integrity or availability of information, including due to cyber-attacks;

historic growth rate sustainability;

historic sales and profit growth rate sustainability;

downgrade of our credit ratings;

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Except as required by applicable law, we undertake no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise .

We are the leading retailer and distributor of automotive replacement parts and accessories in the Americas.

We began operations in 1979 and at May 10, 2025, operated 6,537 stores in the U.S., 838 stores in Mexico and 141 stores in Brazil.

We are a leading retailer and distributor of automotive replacement parts and accessories in the Americas.

We began operations in 1979, and at November 22, 2025, operated 6,666 stores in the U.S., 895 stores in Mexico and 149 stores in Brazil.

Each store carries an extensive product line for cars, sport utility vehicles, vans and light duty trucks, including new and remanufactured automotive hard parts, maintenance items, accessories and non-automotive products.

At May 10, 2025, in 6,011 of our domestic stores as well as the vast majority of our stores in Mexico and Brazil, we had a commercial sales program that provides prompt delivery of parts and other products and commercial credit to local, regional and national repair garages, dealers, service stations, fleet owners and other accounts.

At November 22, 2025, in 6,182 of our domestic stores as well as the vast majority of our stores in Mexico and Brazil, we had a commercial sales program that provides prompt delivery of parts and other products and commercial credit to local, regional and national repair garages, dealers, service stations, fleet owners and other accounts.

We also sell automotive hard parts, maintenance items, accessories and non-automotive products through www.autozone.com, and our commercial customers can make purchases through www.autozonepro.com.

Additionally, we sell the ALLDATA brand automotive diagnostic, repair, collision and shop management software through www.alldata.com.

Additionally, we sell the ALLDATA brand of automotive diagnostic, repair, collision and shop management software through www.alldata.com.

We also provide product information on our Duralast branded products through www.duralastparts.com.

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Our websites and the information contained therein or linked thereto are not intended to be incorporated into this report.

Operating results for the twelve and thirty-six weeks ended May 10, 2025, are not necessarily indicative of the results that may be expected for the fiscal year ending August 30, 2025.

Operating results for the twelve weeks ended November 22, 2025, are not necessarily indicative of the results that may be expected for the fiscal year ending August 29, 2026.

Each of the first three quarters of our fiscal year consists of 12 weeks, and the fourth quarter consists of 16 or 17 weeks.

The fourth quarter of fiscal 2025 has 16 weeks, and the fourth quarter of fiscal 2024 had 17 weeks.

Our business is somewhat seasonal in nature, with the highest sales generally occurring during the months of February through September, and the lowest sales generally occurring in the months of December and January.

The fourth quarters of fiscal 2026 and 2025 each have 16 weeks.

Our business is somewhat seasonal in nature, with the highest sales generally occurring in the spring and summer months of February through September, and the lowest sales generally occurring in the months of December and January.

Executive Summary

Net sales increased to $4.5 billion, a 5.4% increase over the comparable prior year quarter.

Operating profit decreased 3.8% to $866.2 million, net income decreased 6.6% to $608.4 million and diluted earnings per share decreased 3.6% to $35.36 for the quarter.

The third quarter was negatively impacted by unfavorable foreign currency exchange rates which had an overall impact to net sales of $89.3 million.

Operating profit comparison was negatively impacted $27.1 million due to unfavorable foreign currency exchange rates and $8.0 million net due to an unfavorable non-cash LIFO impact.

During the third quarter of fiscal 2025, failure and maintenance related categories represented the largest portion of our sales mix at approximately 86% of total sales, whereas they represented approximately 85% of total sales in the comparable prior year period.

Net sales increased to $4.6 billion, an 8.2% increase over the prior year period.

Our retail and commercial sales in our domestic and international markets grew as we continue to make progress on our growth initiatives.

Operating profit decreased 6.8% to $784.2 million.

Operating profit comparisons were negatively impacted by an unfavorable non-cash LIFO impact of $98.0 million.

Net income decreased 6.0% to $530.8 million, and diluted earnings per share decreased 4.6% to $31.04.

During the first quarter of fiscal 2026, failure and maintenance related categories represented the largest portion of our sales mix at approximately 86% of total sales, which is consistent with the comparable prior year period.

Failure related categories continue to be the largest portion of our sales mix.

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Over the long-term, we believe the impact of weather on our sales mix is not significant.

Our business is impacted by various factors within the economy that affect both our consumers and our industry, including but not limited to inflation, interest rates, levels of consumer debt, fuel and energy costs, prevailing wage rates, foreign currency exchange rate fluctuations, supply chain disruptions, tariffs, trade policies and other geopolitical factors, hiring and other economic conditions.

Given the nature of these macroeconomic factors, we cannot predict whether or for how long certain trends will continue, nor can we predict to what degree these trends will impact us in the future.

Our business is impacted by various factors within the economy that affect both our consumers and our industry, including but not limited to inflation, interest rates, levels of consumer debt, fuel and energy costs, prevailing wage rates, foreign exchange rate fluctuations, supply chain disruptions, tariffs, trade policies and other geopolitical factors, hiring and other economic conditions.

Given the nature of these macroeconomic factors, which are generally outside of our control, we cannot predict whether or for how long certain trends will continue, nor can we predict to what degree these trends will impact us in the future.

The two statistics we believe have the closest correlation to our market growth over the long-term are miles driven and the number of seven year old or older vehicles on the road.

For the twelve-month period ended March 2025, miles driven in the U.S.

For the 12-month period ended in October 2025, miles driven in the U.S.

increased 1.0% compared to the same period in the prior year, based on the latest information available from the U.S.

Department of Transportation.

According to S&P Global Mobility, as of 2025 the average age of light vehicles on the road in the U.S.

was 12.8 years.

Twelve Weeks Ended May 10, 2025

Compared with Twelve Weeks Ended May 4, 2024

Net sales for the twelve weeks ended May 10, 2025, increased $228.9 million to $4.5 billion, or 5.4% over net sales of $4.2 billion for the comparable prior year period.

This growth was driven by an increase in total company same store sales of 5.4% on a constant currency basis and net sales of $97.2 million from new domestic and international stores, partially offset by a $89.3 million impact from unfavorable foreign currency exchange rates.

Domestic commercial sales increased $123.2 million to $1.3 billion, or 10.7% over the comparable prior year.

Same store sales, or sales for our domestic and international stores open at least one year, are as follows:

Twelve Weeks Ended

Constant Currency (1)

International

Total Company

(1) Constant currency same store sales exclude impacts from fluctuations of foreign currency exchange rates by converting both the current year and prior year international results at the prior year foreign currency exchange rate.

Gross profit for the twelve weeks ended May 10, 2025, was $2.4 billion, compared with $2.3 billion during the comparable prior year period.

Gross profit, as a percentage of sales, was 52.7% for the twelve weeks ended May 10, 2025, compared to 53.5% for the comparable prior year period.

The decrease in gross margin was negatively impacted by higher inventory shrink, higher commercial mix, new distribution center startup costs and an unfavorable 21-basis point ($8 million net) non-cash LIFO impact .

Operating, selling, general and administrative expenses for the twelve weeks ended May 10, 2025, were $1.5 billion compared with $1.4 billion during the comparable prior year period.

As a percentage of sales, these expenses were 33.3% compared with 32.2% during the comparable prior year period.

The increase was primarily driven by an increase in our self-insurance expense and investments to support our growth initiatives.

Net interest expense was $111.3 million and $104.4 million for the twelve weeks ended May 10, 2025, and May 4, 2024, respectively.

Average borrowings were $9.2 billion and $8.8 billion, and weighted average borrowing rates were 4.48% and 4.43% for the twelve weeks ended May 10, 2025, and May 4, 2024, respectively.

Our effective income tax rate was 19.4% and 18.1% of pretax income for the twelve weeks ended May 10, 2025, and May 4, 2024, respectively.

The benefit from stock options exercised was $22.7 million and $38.1 million for the twelve weeks ended May 10, 2025 and the comparable prior year period, respectively.

Net income for the twelve weeks ended May 10, 2025, decreased by $43.3 million from the comparable prior year period to $608.4 million due to the factors set forth above, and diluted earnings per share decreased by 3.6% to $35.36 from $36.69.

The impact on current quarter diluted earnings per share from stock repurchases since the end of the comparable prior year period was an increase of $0.26 per share.

Thirty-six Weeks Ended May 10, 2025

Compared with Thirty-six Weeks Ended May 4, 2024

Net sales for the thirty-six weeks ended May 10, 2025, increased $411.1 million to $12.7 billion, or 3.3% over net sales of $12.3 billion for the comparable prior year period.

This growth was driven by an increase in total company same store sales of 3.4% on a constant currency basis and net sales of $233.5 million from new domestic and international stores, partially offset by a $238.4 million impact from unfavorable foreign currency exchange rates.

According to the latest data provided by S&P Global Mobility, the average age of light vehicles on the road was 12.8 years.

Twelve Weeks Ended November 22, 2025

Compared with Twelve Weeks Ended November 23, 2024

Net sales for the twelve weeks ended November 22, 2025, increased $349.0 million to $4.6 billion, or 8.2% over net sales for the comparable prior year period.

This growth was driven primarily by an increase in total company same store sales of 4.7% on a constant currency basis and net sales of $110.6 million from new domestic and international stores.

Domestic commercial sales increased $163.7 million to $1.3 billion, or 14.5% over the comparable prior year period.

Same store sales, or sales for our domestic and international stores open at least one year, are as follows:

Thirty-Six Weeks Ended

Twelve Weeks Ended

Constant Currency (1)

November 22, 2025

November 23, 2024

November 22, 2025

November 23, 2024

International

Total Company

Gross profit for the thirty-six weeks ended May 10, 2025, was $6.7 billion, compared with $6.6 billion during the comparable prior year period.

(1) Constant currency same store sales exclude impacts from fluctuations of foreign exchange rates by converting both the current year and prior year international results at the prior year foreign currency exchange rate.

Gross profit for the twelve weeks ended November 22, 2025, was $2.4 billion, compared with $2.3 billion during the comparable prior year period.

Gross profit, as a percentage of sales, was 51.0% compared to 53.0% during the comparable prior year period.

The decrease in gross margin was negatively impacted by higher supply chain costs, higher inventory shrink, and an unfavorable 20 basis point ($24.0 million net) non-cash LIFO impact, partially offset by higher merchandise margins.

Operating, selling, general and administrative expenses for the thirty-six weeks ended May 10, 2025, were $4.3 billion compared with $4.1 billion during the comparable prior year period.

As a percentage of sales, these expenses were 34.2% compared with 33.1% during the comparable prior year period.

The increase was primarily driven by an increase in our self-insurance expense and investments to support our growth initiatives.

Net interest expense was $327.7 million and $298.4 million for the thirty-six weeks ended May 10, 2025, and May 4, 2024, respectively.

Average borrowings were $9.1 billion and $8.5 billion, and weighted average borrowing rates were 4.45% and 4.35% for the thirty-six week periods ended May 10, 2025, and May 4, 2024, respectively.

Our effective income tax rate was 20.4% and 19.8% of pretax income for the thirty-six weeks ended May 10, 2025, and May 4, 2024, respectively.

The tax rate was impacted by an $18.4 million favorable valuation allowance adjustment related to our international business.

The benefit from stock options exercised for the thirty-six week period ended May 10, 2025, was $42.3 million compared to $72.3 million in the comparable prior year period.

Net income for the thirty-six weeks ended May 10, 2025, decreased by $98.9 million from the comparable prior year period to $1.7 billion due to the factors set forth above, and diluted earnings per share decreased by 2.0% to $96.17 from $98.11.

The impact on current year to date diluted earnings per share from stock repurchases since the end of the comparable prior year period was an increase of $0.38.

The decrease in gross margin was driven primarily by a 212 basis point unfavorable non-cash LIFO impact, partially offset by other net margin improvements.

Operating, selling, general and administrative expenses for the twelve weeks ended November 22, 2025, and the comparable prior year period were $1.6 billion and $1.4 billion, respectively.

As a percentage of sales, expenses were 34.0% for the twelve weeks ended November 22, 2025, compared with 33.3% during the comparable prior year period.

The increase was primarily driven by investments to support our growth initiatives.

Net interest expense for the twelve weeks ended November 22, 2025, was $106.3 million compared to $107.6 million during the comparable prior year period.

Average borrowings were $8.7 billion and $8.9 billion, and weighted average borrowing rates were 4.5% and 4.4% for the twelve weeks ended November 22, 2025, and November 23, 2024, respectively.

Our effective income tax rate for the twelve weeks ended November 22, 2025, was 21.7% of pretax income compared to 23.0% for the comparable prior year period.

The benefit from stock options exercised for the twelve week period ended November 22, 2025, was $12.6 million compared to $5.3 million in the comparable prior year period.

Net income for the twelve weeks ended November 22, 2025, decreased by $34.1 million from the comparable prior year period to $530.8 million due to the factors set forth above, and diluted earnings per share decreased by 4.6% to $31.04 from $32.52.

Liquidity and Capital Resources

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We believe that our cash generated from operating activities and available credit, supplemented with our long-term borrowings will provide ample liquidity to fund our operations while allowing us to make strategic investments to support growth initiatives and return excess cash to shareholders in the form of share repurchases.

As of May 10, 2025, we held $268.6 million of cash and cash equivalents, as well as $2.2 billion in undrawn capacity on our Revolving Credit Agreement.

As of November 22, 2025, we held $287.6 million of cash and cash equivalents, as well as $2.2 billion in undrawn capacity on our Revolving Credit Agreement.

We believe our sources of liquidity will continue to be adequate to fund our operations and investments to grow our business, repay our debt as it becomes due and fund our share repurchases over the short-term and long-term.

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In the event our liquidity is insufficient, we may be required to limit our spending.

All of our material borrowing arrangements are described in greater detail in “Note H – Financing” in the Notes to Condensed Consolidated Financial Statements.

Except for the issuance of $500 million 5.125% Senior Notes due June 2030, repayments of the $400 million 3.250% Senior Notes due April 2025 and the $500 million 3.625% Senior Notes

due April 2025, and the $225.5 million increase in commercial paper, there have been no material changes to our contractual obligations as described in our Annual Report on Form 10-K for the year ended August 31, 2024.

For the thirty-six week periods ended May 10, 2025, and May 4, 2024, our net cash flows from operating activities provided $2.2 billion and $1.9 billion, respectively.

Cash flows from operations increased over last year primarily due to favorable changes in accounts payable and accrued expenses.

Our net cash flows used in investing activities for the thirty-six weeks ended May 10, 2025, were $917.3 million as compared with $916.3 million in the comparable prior year period.

Capital expenditures for the thirty-six weeks ended May 10, 2025, were $885.6 million compared to $725.9 million in the comparable prior year period.

All of our material borrowing arrangements are described in greater detail in “Note I – Financing” in the Notes to Condensed Consolidated Financial Statements.

There were no significant changes to our contractual obligations as described in our Annual Report on Form 10-K for the year ended August 30, 2025.

For the twelve week periods ended November 22, 2025, and November 23, 2024, our net cash flows from operating activities provided $944.2 million and $811.8 million, respectively.

The increase for the twelve weeks ended November 22, 2025, compared with the prior year period, was primarily due to higher net earnings adjusted for non-cash charges.

Our net cash flows used in investing activities for the twelve weeks ended November 22, 2025, were $326.7 million as compared with $265.7 million in the comparable prior year period.

Capital expenditures for the twelve weeks ended November 22, 2025, were $314.2 million compared to $247.0 million in the comparable prior year period.

The increase in capital expenditures was primarily driven by our growth initiatives, including new stores, and hub and mega hub store expansion projects.

During the thirty-six week periods ended May 10, 2025, and May 4, 2024, we opened 163 and 96 net new stores, respectively.

Investing cash flows were impacted by our wholly-owned captive, which purchased $54.3 million and $17.6 million, and sold $54.8 million and $21.2 million in marketable debt securities during the thirty-six weeks ended May 10, 2025, and the comparable prior year period, respectively.

Our investment in tax credit equity investments was $50.4 million and $193.3 million during the thirty-six weeks ended May 10, 2025, and the comparable prior year period, respectively.

Our net cash flows used in financing activities for the thirty-six weeks ended May 10, 2025, were $1.3 billion compared to $1.0 billion in the comparable prior year period.

During the thirty-six weeks ended May 10, 2025, we had $500 million in debt issuances compared to $1.0 billion in debt issuances in the comparable prior year period, and $900 million in debt repayments compared to $300 million in debt repayments in the comparable prior year period.

Stock repurchases were $1.1 billion in the current thirty-six week period versus $2.4 billion in the comparable prior year period.

During the twelve weeks ended November 22, 2025, and November 23, 2024, we opened 53 and 34 net new stores, respectively.

Investing cash flows were impacted by our wholly owned captive, which purchased $12.6 million and $12.3 million, and sold $6.3 million and $12.6 million in marketable debt securities during the twelve weeks ended November 22, 2025 and the comparable prior year period, respectively.

Our investment in tax credit equity investments was $5.1 million during the twelve weeks ended November 22, 2025, compared to $31.0 million during the comparable prior year period.

Our net cash flows used in financing activities for the twelve weeks ended November 22, 2025, were $602.7 million compared to $538.1 million in the comparable prior year period.

Stock repurchases were $427.2 million in the current twelve week period as compared with $540.1 million in the comparable prior year period.

The treasury stock repurchases were primarily funded by cash flows from operations.

For the thirty-six week periods ended May 10, 2025, and May 4, 2024, we had $225.5 million and $631.3 million in net proceeds from commercial paper, respectively.

Proceeds from the issuance of common stock from exercises of stock options for the thirty-six weeks ended May 10, 2025, and May 4, 2024, provided $111.0 million and $154.4 million, respectively.

For the twelve week period ended November 22, 2025, and the comparable prior year period, we had $179.1 million and $15.0 million in net repayments of commercial paper, respectively.

Proceeds from the sale of common stock and exercises of stock options for the twelve weeks ended November 22, 2025, and November 23, 2024, provided $31.9 million and $36.0 million, respectively.

During fiscal 2026, we expect to increase the investment in our business as compared to fiscal 2025.

Our investments are expected to be directed primarily to our g rowth initiatives, which include new stores and hub and mega hub store expansion projects .

Our investments are expected to be directed primarily to our growth initiatives, which include new stores and hub and mega hub store expansion projects.

The amount of investments in our new stores is impacted by different factors, including whether the building and land are purchased (requiring higher investment) or leased (generally lower investment) and whether such buildings are located in the U.S., Mexico or Brazil, or located in urban or rural areas.

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We plan to continue negotiating extended terms with our suppliers, benefitting our working capital and resulting in a high accounts payable to inventory ratio.

We had an accounts payable to inventory ratio of 115.6% at May 10, 2025, and 119.7% at May 4, 2024.

We had an accounts payable to inventory ratio of 115.6% at November 22, 2025, and 119.5% at November 23, 2024.

Depending on the timing and magnitude of our future investments (either in the form of leased or purchased properties or acquisitions), we anticipate that we will rely primarily on internally generated funds and available borrowing capacity to support a majority of our capital expenditures, working capital requirements and stock repurchases.

The balance may

be funded through new borrowings.

The balance may be funded through new borrowings.

We anticipate that we will be able to obtain such financing based on our current credit ratings and favorable experiences in the debt markets in the past.

For the trailing four quarters ended May 10, 2025, our adjusted after-tax return on invested capital (“ROIC”), which is a non-GAAP measure, was 43.5% as compared to 51.4% for the comparable prior year period.

For the trailing four quarters ended November 22, 2025, our adjusted after-tax return on invested capital (“ROIC”), which is a non-GAAP measure, was 39.6% as compared to 47.7% for the comparable prior year period.

Adjusted ROIC is calculated as after-tax operating profit (excluding rent charges) divided by invested capital (which includes a factor to capitalize operating leases).

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Refer to the “Reconciliation of Non-GAAP Financial Measures” section for further details of our calculation.

Our adjusted debt to earnings before interest, taxes, depreciation, amortization, rent and share-based compensation expense (“EBITDAR”) ratio, which is a non-GAAP measure, was 2.5:1 as of May 10, 2025 and May 4, 2024.

Our adjusted debt to earnings before interest, taxes, depreciation, amortization, rent and share-based compensation expense (“EBITDAR”) ratio as of November 22, 2025, and November 23, 2024, was 2.5:1.

We calculate adjusted debt as the sum of total debt, financing lease liabilities and rent times six;

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Debt Facilities

On November 15, 2024, we amended the Revolving Credit Agreement, extending the termination date by one year.

As amended, the Revolving Credit Agreement will terminate, and all amounts borrowed will be due and payable, on November 15, 2028.

The Senior Notes contain a provision that repayment may be accelerated if we experience both a change of control and a rating event (both as defined in the agreements).

Our borrowings under our Senior Notes contain minimal covenants, primarily restrictions on liens.

All of the repayment obligations under our borrowing arrangements may be accelerated and come due prior to the scheduled payment date if covenants are breached or an event of default occurs.

As of May 10, 2025, we were in compliance with all covenants and expect to remain in compliance with all covenants under our borrowing arrangements.

See “Note H – Financing” in the Notes to the Condensed Consolidated Financial Statements for additional information concerning our revolving credit agreement, outstanding letters of credit, surety bonds commitment and Senior Notes.

See “Note I – Financing” in the Notes to the Condensed Consolidated Financial Statements for information concerning our Senior Notes, Revolving Credit Agreement, commercial paper borrowings, outstanding letters of credit and surety bonds commitment.

Stock Repurchases

See “Note I – Stock Repurchase Program” in the Notes to the Condensed Consolidated Financial Statements for information on our share repurchases.

See “Note J – Stock Repurchase Program” in the Notes to the Condensed Consolidated Financial Statements for information on our share repurchases.

Reconciliation of Non-GAAP Financial Measures

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Adjusted After-Tax ROIC

The following tables calculate the percentages of adjusted ROIC for the trailing four quarters ended May 10, 2025, and May 4, 2024.

The following tables calculate the percentages of adjusted ROIC for the trailing four quarters ended November 22, 2025, and November 23, 2024.

Trailing Four

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(in thousands, except percentage)

Interest expense

Interest expense, net

Rent expense (1)

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(in thousands, except percentage)

Interest expense

Interest expense, net

Rent expense (1)

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Adjusted Debt to EBITDAR

The following tables calculate the ratio of adjusted debt to EBITDAR for the trailing four quarters ended May 10, 2025, and May 4, 2024.

The following tables calculate the ratio of adjusted debt to EBITDAR for the trailing four quarters ended November 22, 2025, and November 23, 2024.

Trailing Four

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(in thousands, except ratio)

Interest expense

Interest expense, net

Income tax expense

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(in thousands, except ratio)

Interest expense

Interest expense, net

Income tax expense

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Adjusted debt to EBITDAR

(1) The table below outlines the calculation of rent expense and reconciles rent expense to total lease cost, per ASC 842, the most directly comparable GAAP financial measure, for the trailing four quarters ended May 10, 2025, and May 4, 2024.

Trailing Four Quarters Ended

(in thousands)

November 22, 2025

November 23, 2024

Total lease cost, per ASC 842

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Variable operating lease components, related to insurance and common area maintenance

(2) Effective tax rate over trailing four quarters ended May 10, 2025, and May 4, 2024, was 20.6%.

(2) Effective tax rate over trailing four quarters ended November 22, 2025, and November 23, 2024, was 20.0% and 20.5%, respectively.

(3) All averages are computed based on trailing five quarter balances.

Recent Accounting Pronouncements

Refer to “Note A – General” in the Notes to Condensed Consolidated Financial Statements for the discussion of recently issued accounting pronouncements.

Critical Accounting Policies and Estimates

Our critical accounting policies are described in Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the year ended August 31, 2024.

There have been no significant changes to our critical accounting policies since the filing of our Annual Report on Form 10-K for the year ended August 31, 2024.

Refer to “Note A – General” in the Notes to Condensed Consolidated Financial Statements for the discussion of recent accounting pronouncements.

Critical Accounting Estimates

Our critical accounting estimates are described in Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the year ended August 30, 2025.

There have been no significant changes to our critical accounting estimates since the filing of our Annual Report on Form 10-K for the year ended August 30, 2025.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis