What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2025-04-30 compared with 2024-10-30 · 62 added, 168 removed, 198 unchanged (54% of the section changed)

7 unchanged sentences

From our founding in 2002, we have grown rapidly, significantly increasing our sales, store count and profitability.

Headquartered in Phoenix with 428 stores in 23 states as of September 29, 2024, we are one of the largest and fastest growing specialty retailers of fresh, natural and organic food in the United States.

Headquartered in Phoenix with 443 stores in 24 states as of March 30, 2025, we are one of the largest and fastest growing specialty retailers of fresh, natural and organic food in the United States.

Our Growth Strategy

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We believe our business can continue to grow by leveraging existing strengths in a unique assortment of better-for-you, quality products and by providing a full omnichannel offering through delivery or pickup via our website or the Sprouts app.

• Update Format and Expand in Select Markets .

• Market Expansion.

We are delivering unique smaller stores with expectations of stronger returns, while maintaining the approachable, fresh-focused farmer’s market heritage Sprouts is known for.

From 2021 through September 29, 2024, we opened 63 new stores and remodeled one store featuring our new format.

From 2021 through March 30, 2025, we have opened 78 new stores and remodeled one store featuring our updated format.

Our geographic store expansion and new store placement will intersect where our target customers live, in markets with growth potential and supply chain support, which we believe will provide a long runway of approximately 10% annual unit growth.

• Create an Advantaged Fresh Supply Chain .

We believe our network of fresh distribution centers can drive efficiencies across the chain and support our growth plans.

• Create an Advantaged Supply Chain.

We believe our network of distribution centers can drive efficiencies across the chain and support our growth plans.

To further deliver on our fresh commitment and reputation, as well as to increase our local offerings and improve financial results, we aspire to ultimately position fresh distribution centers within a 250-mile radius of stores.

Following the opening of two fresh distribution centers in fiscal 2021 and the relocation of our Southern California distribution center, closure of our Georgia distribution center and partnership with a third-party fresh distribution center in the Northeast in fiscal 2023, we are better leveraging our existing distribution center capacity, and approximately 80% of our stores were within 250 miles of a distribution center as of September 29, 2024.

• Refine Brand and Marketing Approach .

We are better leveraging our existing distribution center capacity, and approximately 80% of our stores were within 250 miles of a distribution center as of March 30, 2025.

• Customer Engagement and Personalization.

We believe we are elevating our national brand recognition and positioning by telling our unique brand story rooted in product innovation and differentiation.

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We believe this data-driven intelligence will increase customer engagement through personalization efforts with digital and social connections to drive additional sales growth and loyalty.

• Inspire and Engage Our Talent to Create a Best Place to Work .

• Inspire and Engage Our Talent to Make Sprouts a Best Place to Work .

Subsequent to the initial launch of our long-term growth strategy, we have added the focus area of inspiring and engaging our talent through our culture, acquisition and development and total rewards program to attract and retain the talent we believe we need to execute on our strategic goals and transform our company into a premier place to work.

• Deliver on Financial Targets and Box Economics .

• Invest in Technology for Growth .

We continue to make investments in technology in support of our strategy, with a focus on enhancing efficiency, scalability, and customer experience.

While we are showing positive outcomes on our strategic investments in inventory management and customer personalization, we believe that ongoing investments in our technology foundation will allow us to streamline operations and improve decision making to execute on our strategy.

• Deliver on Key Financial Metrics.

We are measuring and reporting on the success of this strategy against a number of long-term financial and operational targets.

With the implementation of our strategy beginning in 2020, we have significantly improved our margin structure above our 2019 baseline.

Results of Operations for Thirteen Weeks Ended September 29, 2024 and October 1, 2023

Since the implementation of our strategy beginning in 2020, we have significantly improved our margin structure above our 2019 baseline.

Results of Operations for Thirteen Weeks Ended March 30, 2025 and March 31, 2024

The following tables set forth our unaudited results of operations and other operating data for the periods presented.

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Thirteen weeks ended

September 29, 2024 October 1, 2023

March 30, 2025 March 31, 2024

Unaudited Quarterly Consolidated Statement of Income Data:

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Thirteen weeks ended

September 29, 2024 October 1, 2023

March 30, 2025 March 31, 2024

Other Operating Data:

2 unchanged sentences

Stores at end of period 443 414

Comparison of Thirteen Weeks Ended September 29, 2024 to Thirteen Weeks Ended October 1, 2023

Comparison of Thirteen Weeks Ended March 30, 2025 to Thirteen Weeks Ended March 31, 2024

Thirteen weeks ended

September 29, 2024 October 1, 2023 Change % Change

March 30, 2025 March 31, 2024 Change % Change

Net sales $ 2,236,436 $ 1,883,808 $ 352,628 19 %

Comparable store sales growth 11.7 % 4.0 %

Net sales during the thirteen weeks ended September 29, 2024 totaled $1.9 billion, an increase of $232.5 million or 14%, compared to the thirteen weeks ended October 1, 2023.

Net sales during the thirteen weeks ended March 30, 2025 totaled $2.2 billion, an increase of $352.6 million or 19%, compared to the thirteen weeks ended March 31, 2024.

The sales increase was driven by sales from new stores opened in the last twelve months and a 11.7% increase in comparable store sales.

Comparable stores contributed approximately 94% of total sales for the thirteen weeks ended September 29, 2024 and approximately 95% of total sales for the thirteen weeks ended October 1, 2023.

Comparable stores contributed approximately 93% of total sales for the thirteen weeks ended March 30, 2025 and approximately 94% of total sales for the thirteen weeks ended March 31, 2024.

Cost of sales and gross profit

Thirteen weeks ended

September 29, 2024 October 1, 2023 Change % Change

March 30, 2025 March 31, 2024 Change % Change

Net sales $ 2,236,436 $ 1,883,808 $ 352,628 19 %

2 unchanged sentences

Gross margin 39.6 % 38.3 % 1.3 %

Gross profit totaled $740.9 million during the thirteen weeks ended September 29, 2024, an increase of $115.5 million or 18%, compared to the thirteen weeks ended October 1, 2023, driven by increased sales volume.

Gross margin increased by 1.6% to 38.1% for the thirteen weeks ended September 29, 2024, compared to 36.5% for the thirteen weeks ended October 1, 2023, primarily driven by improved inventory management and robust sales.

Gross profit totaled $886.4 million during the thirteen weeks ended March 30, 2025, an increase of $164.1 million or 23%, compared to the thirteen weeks ended March 31, 2024, driven by increased sales volume.

Gross margin increased by 1.3% to 39.6% for the thirteen weeks ended March 30, 2025, compared to 38.3% for the thirteen weeks ended March 31, 2024, primarily driven by improved inventory management.

Selling, general and administrative expenses

Thirteen weeks ended

September 29, 2024 October 1, 2023 Change

March 30, 2025 March 31, 2024 Change

Selling, general and administrative expenses $ 623,226 $ 539,771 $ 83,455 15 %

Percentage of net sales 27.9 % 28.7 % (0.8) %

Selling, general and administrative expenses increased $77.5 million or 15%, compared to the thirteen weeks ended October 1, 2023.

Selling, general and administrative expenses increased $83.5 million or 15%, compared to the thirteen weeks ended March 31, 2024.

The increase was primarily due to the increase in new stores opened since the comparable period last year.

As a percentage of net sales, selling, general and administrative expenses increased slightly as a result of higher incentive compensation costs and ecommerce fees due to strong sales performance and higher professional fees and other costs incurred related to strategic initiatives.

As a percentage of net sales, selling, general and administrative expenses improved slightly as a result of leverage gained from store compensation and occupancy costs.

Depreciation and amortization

Thirteen weeks ended

September 29, 2024 October 1, 2023 Change

March 30, 2025 March 31, 2024 Change

Depreciation and amortization $ 35,099 $ 32,232 $ 2,867 9 %

Percentage of net sales 1.6 % 1.7 % (0.1) %

Depreciation and amortization expense (exclusive of depreciation included in cost of sales) was $34.4 million for the thirteen weeks ended September 29, 2024, compared to $31.8 million for the thirteen weeks ended October 1, 2023.

Depreciation and amortization expense primarily consists of depreciation and amortization for buildings, store leasehold improvements, and equipment for new stores as well as remodel initiatives in older stores.

Depreciation and amortization expense (exclusive of depreciation included in cost of sales) was $35.1 million for the thirteen weeks ended March 30, 2025, compared to $32.2 million for the thirteen weeks ended March 31, 2024.

Depreciation and amortization expense primarily consists of depreciation and amortization for

buildings, store leasehold improvements, and equipment for new stores as well as remodel initiatives in older stores.

Store closure and other costs, net

Thirteen weeks ended

September 29, 2024 October 1, 2023 Change

March 30, 2025 March 31, 2024 Change

Store closure and other costs, net $ 1,706 $ 2,044 $ (338) (17) %

Percentage of net sales 0.1 % 0.1 % — %

Store closure and other costs, net for the thirteen weeks ended September 29, 2024 of $3.7 million and for the thirteen weeks ended October 1, 2023 of $3.2 million was primarily related to ongoing occupancy costs associated with our closed store locations.

Store closure and other costs, net for the thirteen weeks ended March 30, 2025 of $1.7 million primarily related to disaster recovery charges from the California wildfires as well as ongoing occupancy costs associated with our closed locations.

Store closure and other costs, net for the thirteen weeks ended March 31, 2024 of $2.0 million primarily related to ongoing occupancy costs associated with our closed store locations.

See Note 12, “Store Closures” of our unaudited consolidated financial statements.

1 unchanged sentence

Thirteen weeks ended

September 29, 2024 October 1, 2023 Change

March 30, 2025 March 31, 2024 Change

Long-term debt $ 210 $ 2,202 $ (1,992) (90) %

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Total interest (income) expense, net $ (924) $ 818 $ (1,742) (213) %

The decrease in interest (income) expense, net for the thirteen weeks ended September 29, 2024 compared to the thirteen weeks ended October 1, 2023 was primarily due to lower average debt outstanding and higher interest income driven by higher interest rates.

The decrease in interest (income) expense, net for the thirteen weeks ended March 30, 2025 compared to the thirteen weeks ended March 31, 2024 was primarily due to lower average debt outstanding.

See Note 4, “Long-Term Debt and Finance Lease Liabilities” of our unaudited consolidated financial statements.

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Thirteen weeks ended

September 29, 2024 October 1, 2023

March 30, 2025 March 31, 2024

Federal statutory rate 21.0 % 21.0 %

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Effective tax rate 20.8 % 22.6 %

The effective tax rate increased to 25.8% for the thirteen weeks ended September 29, 2024 from 24.0% for the thirteen weeks ended October 1, 2023.

The increase in the effective tax rate was primarily due to an increase in non-deductible executive compensation, an unfavorable current year return-to-provision true-up compared to the favorable prior year period true-up, and the increase in pre-tax income outpacing the increase to the benefit from enhanced inventory donations deductions.

The effective tax rate decreased to 20.8% for the thirteen weeks ended March 30, 2025 from 22.6% for the thirteen weeks ended March 31, 2024.

The decrease in the effective tax rate was primarily due to an

increase in benefit from current year stock-based compensation partially offset by an increase in non-deductible executive compensation.

Thirteen weeks ended

September 29, 2024 October 1, 2023 Change

March 30, 2025 March 31, 2024 Change

Net income $ 180,026 $ 114,100 $ 65,926 58 %

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Thirteen weeks ended

September 29, 2024 October 1, 2023 Change

Diluted earnings per share $ 0.91 $ 0.64 $ 0.27 42 %

Diluted weighted average shares outstanding

101,025 102,703 (1,678)

The increase in diluted earnings per share of $0.27 was driven by higher net income and fewer diluted shares outstanding compared to the prior year, due primarily to the share repurchase program.

Results of Operations for Thirty-nine Weeks Ended September 29, 2024 and October 1, 2023

The following tables set forth our unaudited results of operations and other operating data for the periods presented.

The period-to-period comparison of financial results is not necessarily indicative of financial results to be achieved in future periods.

All dollar amounts are in thousands, unless otherwise noted.

Thirty-nine weeks ended

September 29, 2024 October 1, 2023

Unaudited Quarterly Consolidated Statement of Income Data:

Net sales $ 5,723,062 $ 5,138,839

Cost of sales 3,541,461 3,237,371

Gross profit 2,181,601 1,901,468

Selling, general and administrative expenses 1,676,470 1,486,961

Depreciation and amortization (exclusive of depreciation included in cost of sales) 98,129 99,834

Store closure and other costs, net 8,968 33,880

Income from operations 398,034 280,793

Interest (income) expense, net (382) 6,058

Income before income taxes 398,416 274,735

Income tax provision 97,417 65,928

Net income $ 300,999 $ 208,807

Weighted average shares outstanding - basic 100,560 102,844

Diluted effect of equity-based awards 909 914

Weighted average shares and equivalent shares outstanding - diluted 101,469 103,758

Diluted net income per share $ 2.97 $ 2.01

Thirty-nine weeks ended

September 29, 2024 October 1, 2023

Other Operating Data:

Comparable store sales growth 6.4 % 3.4 %

Stores at beginning of period 407 386

Closed — (11)

Stores at end of period 428 401

Comparison of Thirty-nine Weeks Ended September 29, 2024 to Thirty-nine Weeks Ended October 1, 2023

Thirty-nine weeks ended

September 29, 2024 October 1, 2023 Change

Net sales $ 5,723,062 $ 5,138,839 $ 584,223 11 %

Comparable store sales growth 6.4 % 3.4 %

Net sales during the thirty-nine weeks ended September 29, 2024 totaled $5.7 billion, an increase of $584.2 million, or 11%, over the same period of the prior fiscal year.

The sales increase was primarily due to new stores opened in the last twelve months and a 6.4% increase in comparable store sales.

Comparable stores contributed approximately 94% of total sales for the thirty-nine weeks ended September 29, 2024 and approximately 96% of total sales for the thirty-nine weeks ended October 1, 2023.

Cost of sales and gross profit

Thirty-nine weeks ended

September 29, 2024 October 1, 2023 Change

Net sales $ 5,723,062 $ 5,138,839 $ 584,223 11 %

Cost of sales 3,541,461 3,237,371 304,090 9 %

Gross profit 2,181,601 1,901,468 280,133 15 %

Gross margin 38.1 % 37.0 % 1.1 %

Gross profit totaled $2.2 billion during the thirty-nine weeks ended September 29, 2024, an increase of $280.1 million, or 15%, compared to the thirty-nine weeks ended October 1, 2023, driven by increased sales volume.

Gross margin increased to 38.1% for the thirty-nine weeks ended September 29, 2024, compared to 37.0% for the thirty-nine weeks ended October 1, 2023, due to improved inventory management and continued promotional optimization efforts as well as leverage on our supply chain from higher sales.

Selling, general and administrative expenses

Thirty-nine weeks ended

September 29, 2024 October 1, 2023 Change

Selling, general and administrative expenses $ 1,676,470 $ 1,486,961 $ 189,509 13 %

Percentage of net sales 29.3 % 28.9 % 0.4 %

Selling, general and administrative expenses increased by $189.5 million , or 13%, compared to the thirty-nine weeks ended October 1, 2023.

The increase was primarily driven by the increase in new stores opened since the prior year period.

As a percentage of net sales, selling, general and administrative expenses increased due to higher incentive compensation costs and ecommerce fees driven by strong sales performance and higher professional fees and other costs incurred related to strategic initiatives.

Depreciation and amortization

Thirty-nine weeks ended

September 29, 2024 October 1, 2023 Change

Depreciation and amortization $ 98,129 $ 99,834 $ (1,705) (2) %

Percentage of net sales 1.7 % 1.9 % (0.2) %

Depreciation and amortization expense (exclusive of depreciation included in cost of sales) was $98.1 million for the thirty-nine weeks ended September 29, 2024, compared to $99.8 million for the thirty-nine weeks ended October 1, 2023.

Depreciation and amortization expenses (exclusive of depreciation included in cost of sales) primarily consists of depreciation and amortization for buildings, store leasehold improvements, and equipment.

Depreciation and amortization for the thirty-nine weeks ended October 1, 2023 was inclusive of $5.9 million in accelerated depreciation in connection with the closing of certain underperforming stores during 2023.

See Note 12, “Store Closures” of our unaudited consolidated financial statements.

Store closure and other costs, net

Thirty-nine weeks ended

September 29, 2024 October 1, 2023 Change

Store closure and other costs, net $ 8,968 $ 33,880 $ (24,912) (74) %

Percentage of net sales 0.2 % 0.7 % (0.5) %

Store closure and other costs, net decreased $24.9 million to $9.0 million, compared to $33.9 million for the thirty-nine weeks ended October 1, 2023.

Store closure and other costs, net during the thirty-nine weeks ended September 29, 2024 was primarily related to ongoing occupancy costs associated with our closed store locations.

Store closure and other costs, net during the thirty-nine weeks ended October 1, 2023 primarily consisted of $27.8 million of impairment losses related to the write-down of leasehold improvements and right-of-use assets as well as other costs incurred in association with the closing of 11 underperforming stores during 2023.

See Note 12, “Store Closures” of our unaudited consolidated financial statements.

Interest (income) expense, net

Thirty-nine weeks ended

September 29, 2024 October 1, 2023 Change

Long-term debt $ 4,051 $ 9,488 $ (5,437) (57) %

Finance leases 569 604 (35) (6) %

Deferred financing costs 579 579 — 0 %

Interest income and other (5,581) (4,613) (968) 21 %

Total interest (income) expense, net $ (382) $ 6,058 $ (6,440) (106) %

Interest (income) expense, net decreased to $0.4 million for the thirty-nine weeks ended September 29, 2024, compared to $6.1 million for the thirty-nine weeks ended October 1, 2023 primarily due to lower average debt outstanding and higher interest income earned as a result of higher interest rates.

See Note 4, “Long-Term Debt and Finance Lease Liabilities” of our unaudited consolidated financial statements.

Income tax provision

Income tax provision differed from the amounts computed by applying the U.S.

federal income tax rate to pretax income as a result of the following:

Thirty-nine weeks ended

September 29, 2024 October 1, 2023

Federal statutory rate 21.0 % 21.0 %

Change in income taxes resulting from:

State income taxes, net of federal benefit 5.0 % 5.0 %

Enhanced charitable contributions (1.0) % (1.2) %

Federal Credits (0.3) % (0.4) %

Share-based payment awards (1.7) % (1.5) %

Return to Provision 0.1 % (0.3) %

Non-deductible Executive Compensation 1.3 % 1.3 %

Other, net 0.1 % 0.1 %

Effective tax rate 24.5 % 24.0 %

The effective tax rate increased to 24.5% for the thirty-nine weeks ended September 29, 2024 from 24.0% for the thirty-nine weeks ended October 1, 2023.

The increase in the effective tax rate was primarily due to an unfavorable current year return-to-provision true-up compared to the favorable prior year period true-up, a prior period refund of interest from amended returns, and the increase in pre-tax income outpacing the increase to the benefit from enhanced inventory donations deductions, partially offset by an increase in excess tax benefits associated with share-based payment awards.

Thirty-nine weeks ended

September 29, 2024 October 1, 2023 Change

Net income $ 300,999 $ 208,807 $ 92,192 44 %

Percentage of net sales 5.3 % 4.1 % 1.2 %

Net income increased $92.2 million primarily due to higher gross profit and lower store closure and other costs, partially offset by higher selling, general and administrative expenses for the reasons discussed above.

Diluted earnings per share

Thirty-nine weeks ended

September 29, 2024 October 1, 2023 Change

March 30, 2025 March 31, 2024 Change

Diluted earnings per share $ 1.81 $ 1.12 $ 0.69 62 %

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Rolling Four Quarters Ended

September 29, 2024 October 1, 2023

March 30, 2025 March 31, 2024

(dollars in thousands)

2 unchanged sentences

Special items, net of tax (2), (3)

Interest expense, net of tax (3)

Interest (income) expense, net of tax (3)

(3,003) 3,852

Net operating profit after tax (NOPAT) $ 443,524 $ 308,400

16 unchanged sentences

(1) Net income amounts represent total net income for the past four trailing quarters.

(2) Special items related to store closure, supply chain transition and acquisition related charges net of tax.

(2) Special items related to store closure and supply chain transition, net of tax.

(3) Net of tax amounts are calculated using the normalized effective tax rate for the periods presented.

3 unchanged sentences

The following table sets forth the major sources and uses of cash for each of the periods set forth below, as well as our cash, cash equivalents and restricted cash at the end of each period (in thousands):

Thirty-nine weeks ended

September 29, 2024 October 1, 2023

Thirteen weeks ended

March 30, 2025 March 31, 2024

Cash, cash equivalents and restricted cash at end of period $ 287,735 $ 314,354

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Operating Activities

Cash flows from operating activities increased $111.4 million to $520.4 million for the thirty-nine weeks ended September 29, 2024 compared to $409.0 million for the thirty-nine weeks ended October 1, 2023.

Cash flows from operating activities increased $79.4 million to $299.1 million for the thirteen weeks ended March 30, 2025 compared to $219.7 million for the thirteen weeks ended March 31, 2024.

The increase in cash flows from operating activities was primarily a result of higher net income adjusted for non-cash items of $75.3 million and favorable changes in working capital of $9.9 million, partially offset by higher payments on our operating lease liabilities of $4.7 million due to growth.

Cash flows provided by operating activities from changes in working capital were $114.2 million in the thirty-nine weeks ended September 29, 2024 compared to $70.8 million in the thirty-nine weeks ended October 1, 2023.

This $43.4 million increase in cash flows from changes in working capital was primarily attributable to a $20.2 million change in accounts receivable driven by the timing of collections as well as $17.0 million change in accounts payable and accrued liabilities, primarily due to timing differences of payments for goods and services.

Cash flows provided by operating activities from changes in working capital were $77.9 million in the thirteen weeks ended March 30, 2025 compared to $68.0 million in the thirteen weeks ended March 31, 2024.

This $9.9 million increase in cash flows from changes in working capital was primarily attributable to $25.1 million change in accrued income taxes, $13.6 million change in accounts payable and accrued liabilities primarily due to timing differences of payments for goods and services and $2.2 million change in accounts receivable driven by the timing of collections.

These increases were partially offset by $14.9 million change in prepaid expenses and other current assets primarily driven by switching from a new prepaid tax position to a net payable position and $12.1 million change in accrued salaries and benefits primarily driven by increased corporate bonuses.

Certain other immaterial items combined to result in an additional $4.0 million net increase in cash flows from changes in working capital.

1 unchanged sentence

Cash flows used in investing activities consist primarily of capital expenditures in new stores, including leasehold improvements and store equipment, capital expenditures to maintain the appearance of our stores, sales enhancing initiatives and other corporate investments as well as cash outlays for acquisitions.

Cash flows used in investing activities were $161.7 million and $178.0 million, for the thirty-nine weeks ended September 29, 2024 and thirty-nine weeks ended October 1, 2023, respectively.

Cash flows used in investing activities during the thirty-nine weeks ended October 1, 2023 included our acquisition of Ronald Cohn, Inc.

See Note 13, "Business Combination" of our unaudited consolidated financial statements.

Cash flows used in investing activities were $59.5 million and $51.2 million, for the thirteen weeks ended March 30, 2025 and thirteen weeks ended March 31, 2024, respectively.

We expect capital expenditures to be in the range of $230 - 250 million in 2025, including expenditures incurred to date, net of estimated landlord tenant improvement allowances, primarily to fund investments in new stores, remodels, maintenance capital expenditures and corporate capital expenditures.

1 unchanged sentence

Financing Activities

Cash flows used in financing activities were $250.8 million for the thirty-nine weeks ended September 29, 2024 compared to $272.3 million for the thirty-nine weeks ended October 1, 2023.

During the thirty-nine weeks ended September 29, 2024, cash flows used in financing activities primarily consisted of $125.0 million in payments on our Credit Agreement and $129.7 million for stock repurchases, partially offset by $4.7 million in proceeds from the exercise of stock options.

During the thirty-nine weeks ended October 1, 2023, cash flows used in financing activities primarily consisted of $180.4 million for stock repurchases and $100.0 million in payments on our Credit Agreement, partially offset by $8.8 million in proceeds from the exercise of stock options.

Cash flows used in financing activities were $219.1 million for the thirteen weeks ended March 30, 2025 compared to $58.0 million for the thirteen weeks ended March 31, 2024.

During the thirteen weeks ended March 30, 2025, cash flows used in financing activities primarily consisted of $218.8 million for stock repurchases.

During the thirteen weeks ended March 31, 2024, cash flows used in financing activities primarily consisted of $60.0 million for stock repurchases, partially offset by $2.3 million in proceeds from the exercise of stock options.

Long-Term Debt and Credit Facilities

The Company had no long-term debt outstanding as of September 29, 2024.

Long-term debt outstanding as of December 31, 2023 was $125.0 million.

The Company had no long-term debt outstanding as of March 30, 2025 and December 29, 2024.

See Note 4, “Long-Term Debt and Finance Lease Liabilities” of our unaudited consolidated financial statements for a description of our Credit Agreement and our Former Credit Facility (each as defined therein).

1 unchanged sentence

Our board of directors from time to time authorizes share repurchase programs for our common stock.

The following table outlines the share repurchase program authorized by our board, and the related repurchase activity and available authorization as of September 29, 2024:

The following table outlines the share repurchase program authorized by our board, and the related repurchase activity and available authorization as of March 30, 2025:

Effective date Expiration date Amount

6 unchanged sentences

Share repurchase activity under our repurchase program for the periods indicated was as follows (total cost in thousands):

Thirteen weeks ended Thirty-nine weeks ended

September 29, 2024 October 1, 2023 September 29, 2024 October 1, 2023

Thirteen weeks ended

March 30, 2025 March 31, 2024

Number of common shares acquired 1,568,017 957,780

3 unchanged sentences

The cost of common shares repurchased included the 1% excise tax imposed as part of the Inflation Reduction Act of 2022.

Subsequent to September 29, 2024 and through the date of this filing, we repurchased an additional 0.1 million shares of common stock for $5.6 million, excluding excise tax.

Subsequent to March 30, 2025 and through April 28, 2025, we repurchased an additional 0.3 million shares of common stock for $53.0 million, excluding excise tax.

Contractual Obligations

Our principal contractual obligations and commitments arising in the normal course of business consist of obligations under our Credit Agreement, interest on our Credit Agreement, operating and finance leases, purchase commitments and self-insurance liabilities.

Except as otherwise disclosed in Note 4, “Long-Term Debt and Finance Lease Liabilities” of our unaudited consolidated financial statements, there have been no material changes outside the normal course of business as of September 29, 2024 in our contractual obligations and commitments from those reported in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023.

Except as otherwise disclosed in Note 4, “Long-Term Debt and Finance Lease Liabilities” of our unaudited consolidated financial statements, there have been no material changes outside the normal course of business as of March 30, 2025 in our contractual obligations and commitments from those reported in our Annual Report on Form 10-K for the fiscal year ended December 29, 2024.

Impact of Inflation and Deflation

13 unchanged sentences

To the extent that there are material differences between these estimates and our actual results, our future financial statements will be affected.

There have been no substantial changes to these estimates, or the policies related to them during the thirteen and thirty-nine weeks ended September 29, 2024.

There have been no substantial changes to these estimates, or the policies related to them during the thirteen weeks ended March 30, 2025.

For a full discussion of these estimates and policies, see “Critical Accounting Estimates” in Item 7 of our Annual Report on Form 10-K for the fiscal year ended December 29, 2024.

2 unchanged sentences

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