What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-07-09 compared with 2026-04-09 · 101 added, 97 removed, 250 unchanged (44% of the section changed)

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Business Trends

During the twenty-six weeks ended February 28, 2026, our results of operations were primarily driven by continued distribution-related declines for Atkins and recent velocity-related declines for OWYN, which were partially offset by Quest volume-driven growth.

During the thirty-nine weeks ended May 30, 2026, our results of operations were primarily driven by continued distribution-related declines for Atkins and velocity-related declines for OWYN, which were partially offset by Quest volume-driven growth.

In recent periods, retail distribution for the Atkins brand has been under pressure.

The Atkins brand has had, and continues to have, a large retail presence on-shelf, which is being reduced in the current fiscal year and could be reduced in future periods.

In response, during the current fiscal year, we are taking actions to bolster the highest performing Atkins products and simultaneously working with retailers to replace lower performing Atkins products with higher performing products.

In the second quarter of fiscal year 2026, OWYN experienced poor velocities, including on newly expanded distribution, which will result in distribution-related declines in the current fiscal year and could continue to be reduced in future periods.

In response, the Company is taking actions to increase consumer demand to restore velocities and growth for the brand.

The Company’s gross margin was affected by the unfavorable effects of higher commodity expenses and tariffs compared to the prior

year, with productivity a modest offset in the quarter.

Margins are expected to remain under pressure until the Company realizes the benefits expected from recently implemented pricing actions, productivity initiatives and other mitigating actions, which are expected to build as the fiscal year progresses.

In response, we have been taking action to bolster the highest performing Atkins products and simultaneously working with retailers to replace lower performing Atkins products with higher performing products.

In fiscal year 2026, OWYN experienced poor velocities, including on newly expanded distribution, which has resulted in distribution-related declines in the current fiscal year and could continue to be reduced in future periods.

In response, the Company has been taking actions to increase consumer demand to restore velocities and growth for the brand.

The Company’s gross margin was affected by the unfavorable effects of higher input costs compared to the prior year, with productivity a modest offset in the quarter.

Margins are expected to remain under pressure until the Company realizes the benefits expected

from recently implemented pricing actions, productivity initiatives and other mitigating actions, which are expected to build as the fiscal year progresses.

We continue to monitor macroeconomic trends and uncertainties such as consumer and economic uncertainty, key ingredient inflation, supply chain challenges, and the effects of tariffs, which may have adverse effects on net sales and profitability.

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We are continuing to evaluate the evolving macroeconomic environment, however at this time we do not expect these factors to result in a material negative effect on our business, financial condition and results of operations.

Intangible Assets

As a result of the declines of net sales and future revenue projections assessed during the second quarter of fiscal year 2026, the Company identified a triggering event indicating that it was more likely than not that the fair value of both the OWYN and Atkins brands and trademarks indefinite-lived intangible assets were less than their respective carrying amounts.

The Company conducted a quantitative assessment as of the last day of its second quarter, February 28, 2026, utilizing an income approach to estimate the fair value of the intangible assets.

Based on testing, the respective assets carrying values exceeded their fair values, resulting in a loss on impairment of $187.0 million for OWYN and $62.0 million for Atkins during the thirteen weeks ended February 28, 2026.

There were no impairment charges related to the Company’s indefinite-lived intangible assets during the twenty-six weeks ended March 1, 2025.

Goodwill and Intangible Assets

As a result of the sustained decline in the Company’s share price and declines in the Company’s market capitalization assessed during the third quarter of fiscal year 2026, the Company identified a triggering event indicating that it was more likely than not that the fair value of the goodwill reporting unit was less than its carrying amount.

The Company conducted a quantitative interim goodwill assessment as of the last day of its third quarter, May 30, 2026, utilizing a weighted combination of the discounted cash flow method under the income approach and the guideline public company method under the market approach to estimate the fair value of the equity of the Company.

Based on testing, the carrying value was greater than its fair value, resulting in an impairment of $38.0 million related to goodwill during the thirteen and thirty-nine weeks ended May 30, 2026.

There were no impairment charges related to goodwill during the thirty-nine weeks ended May 31, 2025.

As a result of the sustained decline in the Company’s stock price and declines in the Company’s market capitalization assessed during the third quarter of fiscal year 2026, the Company identified a triggering event indicating that it was more likely than not that the fair value of both the OWYN and Atkins brands and trademarks indefinite-lived intangible assets were less than their respective carrying amounts.

The Company conducted a quantitative assessment as of the last day of its third quarter, May 30, 2026, utilizing an income approach to estimate the fair value of the intangible assets.

Based on testing, the respective assets carrying values exceeded their fair values, resulting in a loss on impairment of $13.0 million for OWYN and $31.0 million for Atkins during the thirteen weeks ended May 30, 2026.

Impairment charges were $200.0 million for OWYN and $93.0 million for Atkins for the thirty-nine weeks ended May 30, 2026.

In addition, the Company included the Quest brand and trademark indefinite-lived intangible asset within the quantitative assessment;

utilizing an income approach to estimate the fair value of the intangible asset.

Based on testing, its fair value exceeded its carrying value, resulting in no impairment.

There were no impairment charges related to the Company’s indefinite-lived intangible assets during the thirty-nine weeks ended May 31, 2025.

We believe the estimates and assumptions utilized in our impairment assessments are reasonable and are comparable to those that would be used by other marketplace participants.

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Restructuring and Other

For the twenty-six weeks ended February 28, 2026, the Company incurred $4.5 million of costs for restructuring activities which have been included within General and administrative on the Consolidated Statements of Operations and Comprehensive Income (Loss).

As of February 28, 2026, the outstanding restructuring liability was $1.1 million.

For the thirteen and thirty-nine week periods ended May 30, 2026, the Company incurred $13.5 million and $18.1 million of costs for restructuring activities, of which $6.2 million and $6.2 million have been included within Cost of goods sold and $6.2 million and $10.8 million have been included within General and administrative on the Consolidated Statements of Operations and Comprehensive Income (Loss), respectively.

As of May 30, 2026, the outstanding restructuring liability was $12.2 million.

Refer to Note 14, Restructuring and Other, of our Notes to Unaudited Consolidated Financial Statements in this Report for additional information regarding restructuring and other activities.

The Company has also announced certain future restructuring activities in conjunction with the implementation of the Company’s modified organization design and actions to streamline its operations, which will create a more efficient organization that will continue to support and build its business.

These restructuring plans primarily include workforce reductions, changes in management structure, actions to streamline its operations and other cost savings initiatives.

While early in the process, the Company expects to incur approximately $15.0 million, including the $4.5 million referenced above, in restructuring and other costs, which are to be paid throughout fiscal 2026 and fiscal 2027.

In connection with the restructuring activities, the Company recorded incremental stock-based compensation expense of $1.0 million in connection with the separation of the Company’s prior President and Chief Executive Officer in January 2026.

During the second quarter of fiscal year 2026 the Company announced certain restructuring activities in conjunction with the implementation of the Company’s modified organization design and actions to streamline its operations, which will create a more efficient organization that will continue to support and build its business.

These restructuring plans primarily included workforce reductions, changes in management structure, actions to streamline its operations and other cost savings initiatives.

As of May 30, 2026, the Company expects to incur approximately $25.0 million, including the $18.1 million referenced above, in restructuring and other costs, which are to be paid throughout fiscal 2026 and fiscal 2027.

In connection with the restructuring activities, the Company recorded incremental stock-based compensation expense of $1.0 million in the second quarter of fiscal year 2026 related to the separation of the Company’s prior President and Chief Executive Officer in January 2026.

Refer to Note 12, Omnibus Incentive Plan, of our Notes to Unaudited Consolidated Financial Statements in this Report for additional information.

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• Loss on impairment.

Loss on impairment is comprised of impairment charges related to our brands and trademarks indefinite-lived intangible asset.

Loss on impairment is comprised of impairment charges related to goodwill and our brands and trademarks indefinite-lived intangible asset.

Results of Operations

During the thirteen weeks ended February 28, 2026, our net sales decreased 9.4% to $326.0 million compared to $359.7 million for the thirteen weeks ended March 1, 2025, driven by distribution-related declines for Atkins and velocity-related declines for OWYN.

Gross profit decreased and gross profit margin decreased 460 basis points, primarily as a result of unfavorable commodity expenses and tariffs compared to the prior period.

During the thirteen weeks ended May 30, 2026, our net sales decreased 6.3% to $357.0 million compared to $381.0 million for the thirteen weeks ended May 31, 2025, driven by distribution-related declines for Atkins which were partially offset by Quest and OWYN volume-driven growth.

Gross profit decreased and gross profit margin decreased 390 basis points, primarily as a result of higher input costs and current period restructuring costs compared to the prior period.

We expect to continue building on our existing capabilities and strengthening the position of our brands in the marketplace, and will continue to invest in our business and improve our operating efficiencies.

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See “ Reconciliation of EBITDA and Adjusted EBITDA ” below for a reconciliation of EBITDA and Adjusted EBITDA to net income for each applicable period.

Comparison of Unaudited Results for the Thirteen Weeks Ended February 28, 2026, and the Thirteen Weeks Ended March 1, 2025

Comparison of Unaudited Results for the Thirteen Weeks Ended May 30, 2026, and the Thirteen Weeks Ended May 31, 2025

The following unaudited table presents, for the periods indicated, selected information from our Consolidated Statements of Operations and Comprehensive Income (Loss), including information presented as a percentage of net sales:

Thirteen Weeks Ended Thirteen Weeks Ended

(In thousands) February 28, 2026 % of Net Sales March 1, 2025 % of Net Sales

(In thousands) May 30, 2026 % of Net Sales May 31, 2025 % of Net Sales

Net sales $ 356,983 100.0 % $ 380,956 100.0 %

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Depreciation and amortization 4,337 1.2 % 4,171 1.1 %

Business transaction costs — — % 177 — %

Loss on impairment 82,000 23.0 % — — %

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See “Reconciliation of EBITDA and Adjusted EBITDA” below for a reconciliation of net income to EBITDA and Adjusted EBITDA for each applicable period.

Net sales were $326.0 million for the thirteen weeks ended February 28, 2026, compared to $359.7 million for the thirteen weeks ended March 1, 2025, representing a decrease of $33.6 million, or 9.4%, driven by distribution-related declines for Atkins and velocity-related declines for OWYN.

Net sales were $357.0 million for the thirteen weeks ended May 30, 2026, compared to $381.0 million for the thirteen weeks ended May 31, 2025, representing a decrease of $24.0 million, or 6.3%, driven by distribution-related declines for Atkins which were partially offset by Quest and OWYN volume-driven growth.

Cost of goods sold .

Cost of goods sold decreased $6.5 million, or 2.8%, for the thirteen weeks ended February 28, 2026, compared to the thirteen weeks ended March 1, 2025.

The cost of goods sold decrease was driven primarily by the decrease of net sales compared to the prior year period.

Cost of goods sold decreased $1.6 million, or 0.6%, for the thirteen weeks ended May 30, 2026, compared to the thirteen weeks ended May 31, 2025.

The cost of goods sold decrease was driven primarily by the decrease of net sales compared to the prior year period and partially offset by higher input costs and restructuring costs compared to the prior year period.

Gross profit.

Gross profit decreased $27.1 million, or 20.8%, to $103.0 million for the thirteen weeks ended February 28, 2026, compared to the thirteen weeks ended March 1, 2025.

Gross profit margin was 31.6% of net sales for the thirteen weeks ended February 28, 2026, a decrease of 460 basis points from 36.2% of net sales for the thirteen weeks ended March 1, 2025.

The decrease in gross profit margin was primarily driven by unfavorable commodity expenses compared to the prior year period.

Gross profit decreased $22.4 million, or 16.2%, to $116.1 million for the thirteen weeks ended May 30, 2026, compared to the thirteen weeks ended May 31, 2025.

Gross profit margin was 32.5% of net sales for the thirteen weeks ended May 30, 2026, a decrease of 390 basis points from 36.4% of net sales for the thirteen weeks ended May 31, 2025.

The decrease in gross profit margin was primarily driven by volume declines, higher input costs, and restructuring costs compared to the prior year period.

Operating expenses .

Operating expenses increased $240.9 million, or 319.5%, for the thirteen weeks ended February 28, 2026, compared to the thirteen weeks ended March 1, 2025, due to the following:

Operating expenses increased $86.8 million, or 109.6%, for the thirteen weeks ended May 30, 2026, compared to the thirteen weeks ended May 31, 2025, due to the following:

• Selling and marketing.

Selling and marketing expenses decreased $6.9 million, or 19.7%, for the thirteen weeks ended February 28, 2026, compared to the thirteen weeks ended March 1, 2025.

The decrease was primarily related to a planned decrease in Atkins marketing spend partially offset by increases for Quest.

Selling and marketing expenses increased $5.4 million, or 15.9%, for the thirteen weeks ended May 30, 2026, compared to the thirteen weeks ended May 31, 2025.

The increase was primarily driven by investments in our selling capability and increased marketing spend to support longer-term brand growth and restructuring costs.

• General and administrative.

General and administrative expenses decreased $1.1 million, or 3.2%, for the thirteen weeks ended February 28, 2026, compared to the thirteen weeks ended March 1, 2025.

The decrease was primarily attributable to a decrease of $3.8 million in employee-related costs, a decrease of $1.2 million in integration expenses related to the OWYN Acquisition, and a decrease of $0.5 million in term loan transaction fees, partially offset by an increase of $4.5 million in restructuring costs primarily related to the separation of the Company’s prior President and Chief Executive Officer.

General and administrative expenses decreased $0.8 million, or 1.9%, for the thirteen weeks ended May 30, 2026, compared to the thirteen weeks ended May 31, 2025.

The decrease was primarily attributable to a decrease of $5.2 million in integration expenses related to the OWYN Acquisition, a decrease of $1.8 million in employee-related costs, and lower general corporate expenses, partially offset by an increase of $6.2 million in restructuring costs.

• Depreciation and amortization.

Depreciation and amortization expense was $4.3 million for the thirteen weeks ended February 28, 2026, and $4.1 million for the thirteen weeks ended March 1, 2025, respectively.

• Business transaction costs.

Business transaction costs were zero for the thirteen weeks ended February 28, 2026, compared to $0.2 million for the thirteen weeks ended March 1, 2025, and were comprised of expenses related to the OWYN Acquisition.

Depreciation and amortization expense was $4.3 million for the thirteen weeks ended May 30, 2026, and $4.2 million for the thirteen weeks ended May 31, 2025, respectively.

• Loss on impairment.

Loss on impairment charges were $249.0 million for the thirteen weeks ended February 28, 2026 and zero for the thirteen weeks ended March 1, 2025.

Loss on impairment charges were $82.0 million for the thirteen weeks ended May 30, 2026 and zero for the thirteen weeks ended May 31, 2025.

Refer to Note 4, Goodwill and Intangibles, for additional information regarding the Company’s impairment assessments.

Interest income.

Interest income of $0.9 million increased $0.2 million for the thirteen weeks ended February 28, 2026, compared to the thirteen weeks ended March 1, 2025.

Interest income was $0.7 million for both the thirteen weeks ended May 30, 2026 and May 31, 2025.

Interest expense .

Interest expense of $5.8 million decreased $0.5 million for the thirteen weeks ended February 28, 2026, compared to the thirteen weeks ended March 1, 2025, primarily due to the decrease in interest rates on our Term Facility to 5.7% as of February 28, 2026 from 6.3% as of March 1, 2025.

Interest expense of $5.8 million increased $0.9 million for the thirteen weeks ended May 30, 2026, compared to the thirteen weeks ended May 31, 2025, primarily due to a higher term loan balance.

Gain (loss) on foreign currency transactions.

Foreign currency transactions resulted in a $0.2 million gain for the thirteen weeks ended February 28, 2026, and a $0.1 million loss for the thirteen weeks ended March 1, 2025.

Foreign currency transactions resulted in an immaterial gain for the thirteen weeks ended May 30, 2026, and a $0.3 million loss for the thirteen weeks ended May 31, 2025.

Income tax (benefit) expense.

Income tax benefit was $58.3 million for the thirteen weeks ended February 28, 2026, compared to income tax expense of $12.2 million during the thirteen weeks ended March 1, 2025.

The change in our income tax (benefit) expense was primarily driven by lower income from operations, primarily the loss on impairment.

Income tax benefit was $3.0 million for the thirteen weeks ended May 30, 2026, compared to income tax expense of $13.6 million during the thirteen weeks ended May 31, 2025.

The change in our income tax (benefit) expense was primarily driven by lower income from operations and changes in permanent differences, primarily the non-deductible goodwill impairment.

Net (loss) income .

Net loss was $159.7 million for the thirteen weeks ended February 28, 2026, a decrease of $196.4 million, compared to net income of $36.7 million for the thirteen weeks ended March 1, 2025.

Net loss was primarily driven by higher operating expenses, primarily the loss on impairment, and was partially offset by lower income tax (benefit) expense and other expense.

Net loss was $52.0 million for the thirteen weeks ended May 30, 2026, a decrease of $93.1 million, compared to net income of $41.1 million for the thirteen weeks ended May 31, 2025.

Net loss was primarily driven by higher operating expenses, primarily the loss on impairment, and was partially offset by lower income tax (benefit) expense.

Adjusted EBITDA.

Adjusted EBITDA decreased $12.5 million, or 18.4%, for the thirteen weeks ended February 28, 2026, compared to the thirteen weeks ended March 1, 2025, driven primarily by lower gross profit.

Adjusted EBITDA decreased $16.6 million, or 22.5%, for the thirteen weeks ended May 30, 2026, compared to the thirteen weeks ended May 31, 2025, driven primarily by lower gross profit.

For a reconciliation of Adjusted EBITDA to its most directly comparable GAAP measure, see “Reconciliation of EBITDA and Adjusted EBITDA” below.

Comparison of Unaudited Results for the Twenty-Six Weeks Ended February 28, 2026, and the Twenty-Six Weeks Ended March 1, 2025

Comparison of Unaudited Results for the Thirty-Nine Weeks Ended May 30, 2026, and the Thirty-Nine Weeks Ended May 31, 2025

Twenty-Six Weeks Ended Twenty-Six Weeks Ended

(In thousands) February 28, 2026 % of Net Sales March 1, 2025 % of Net Sales

Thirty-Nine Weeks Ended Thirty-Nine Weeks Ended

(In thousands) May 30, 2026 % of Net Sales May 31, 2025 % of Net Sales

Net sales $ 1,023,194 100.0 % $ 1,081,879 100.0 %

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See “Reconciliation of EBITDA and Adjusted EBITDA” below for a reconciliation of net income to EBITDA and Adjusted EBITDA for each applicable period.

Net sales were $666.2 million for the twenty-six weeks ended February 28, 2026, compared to $700.9 million for the twenty-six weeks ended March 1, 2025, representing a decrease of $34.7 million, or 5.0%, driven by the distribution-related declines for Atkins and velocity-related declines for OWYN, which were partially offset by Quest volume-driven growth.

Net sales were $1,023.2 million for the thirty-nine weeks ended May 30, 2026, compared to $1,081.9 million for the thirty-nine weeks ended May 31, 2025, representing a decrease of $58.7 million, or 5.4%, driven by the distribution-related declines for Atkins and velocity-related declines for OWYN, which were partially offset by Quest volume-driven growth.

Cost of goods sold .

Cost of goods sold increased $13.0 million, or 2.9%, for the twenty-six weeks ended February 28, 2026, compared to the twenty-six weeks ended March 1, 2025.

The cost of goods sold increase was driven primarily by higher ingredient and packaging costs compared to the prior year period.

Cost of goods sold increased $11.4 million, or 1.7%, for the thirty-nine weeks ended May 30, 2026, compared to the thirty-nine weeks ended May 31, 2025.

The cost of goods sold increase was driven primarily by higher input costs and restructuring costs compared to the prior year period.

Gross profit.

Gross profit decreased $47.7 million, or 18.3%, to $212.9 million for the twenty-six weeks ended February 28, 2026, compared to the twenty-six weeks ended March 1, 2025.

Gross profit margin was 32.0% of net sales for the twenty-six weeks ended February 28, 2026, a decline of 520 basis points from 37.2% of net sales for the twenty-six weeks ended March 1, 2025.

The decline in gross profit margin was primarily driven by unfavorable commodity expenses compared to the prior year period.

Gross profit decreased $70.1 million, or 17.6%, to $329.0 million for the thirty-nine weeks ended May 30, 2026, compared to the thirty-nine weeks ended May 31, 2025.

Gross profit margin was 32.2% of net sales for the thirty-nine weeks ended May 30, 2026, a decrease of 470 basis points from 36.9% of net sales for the thirty-nine weeks ended May 31, 2025.

The decrease in gross profit margin was primarily driven by higher input costs and restructuring costs compared to the prior year period.

Operating expenses .

Operating expenses increased $237.4 million, or 156.9%, for the twenty-six weeks ended February 28, 2026, compared to the twenty-six weeks ended March 1, 2025, due to the following:

Operating expenses increased $324.2 million, or 140.6%, for the thirty-nine weeks ended May 30, 2026, compared to the thirty-nine weeks ended May 31, 2025, due to the following:

• Selling and marketing.

Selling and marketing expenses decreased $10.2 million, or 15.0%, for the twenty-six weeks ended February 28, 2026, compared to the twenty-six weeks ended March 1, 2025 The decrease was primarily related to a planned decrease in Atkins marketing spend partially offset by increases for Quest.

Selling and marketing expenses decreased $4.9 million, or 4.8%, for the thirty-nine weeks ended May 30, 2026, compared to the thirty-nine weeks ended May 31, 2025 The decrease was primarily related to a planned decrease in Atkins marketing spend partially offset by increases for Quest and OWYN.

• General and administrative.

General and administrative expenses decreased $1.2 million, or 1.6%, for the twenty-six weeks ended February 28, 2026, compared to the twenty-six weeks ended March 1, 2025.

The decrease was primarily attributable to a decrease of $3.6 million in employee-related costs, a decrease of $2.8 million in integration expenses related to the OWYN Acquisition, and lower general corporate expenses, partially offset by an increase of $4.5 million in restructuring costs primarily related to the separation of the Company’s prior President and Chief Executive Officer, and an increase of $2.3 million in term loan transaction fees.

General and administrative expenses decreased $2.0 million, or 1.7%, for the thirty-nine weeks ended May 30, 2026, compared to the thirty-nine weeks ended May 31, 2025.

The decrease was primarily attributable to a decrease of $8.0 million in integration expenses related to the OWYN Acquisition, a decrease of $5.4 million in employee-related costs, and lower general corporate expenses, partially offset by an increase of $10.8 million in restructuring costs, and an increase of $2.3 million in term loan transaction fees.

• Depreciation and amortization.

Depreciation and amortization expense was $8.9 million and $8.3 million for the twenty-six weeks ended February 28, 2026, compared to the twenty-six weeks ended March 1, 2025, respectively.

Depreciation and amortization expense was $13.3 million and $12.5 million for the thirty-nine weeks ended May 30, 2026, compared to the thirty-nine weeks ended May 31, 2025, respectively.

• Business transaction costs.

Business transaction costs were zero for the twenty-six weeks ended February 28, 2026, compared to $0.8 million for the twenty-six weeks ended March 1, 2025, and were comprised of expenses related to the OWYN Acquisition.

Business transaction costs were zero for the thirty-nine weeks ended May 30, 2026, compared to $0.8 million for the thirty-nine weeks ended May 31, 2025.

• Loss on impairment.

Loss on impairment charges were $249.0 million for the twenty-six weeks ended February 28, 2026 and zero for the twenty-six weeks ended March 1, 2025.

Loss on impairment charges were $331.0 million for the thirty-nine weeks ended May 30, 2026 and zero for the thirty-nine weeks ended May 31, 2025.

Refer to Note 4, Goodwill and Intangibles, for additional information regarding the Company’s impairment assessments.

Interest income.

Interest income of $1.4 million decreased $0.1 million for the twenty-six weeks ended February 28, 2026, compared to the twenty-six weeks ended March 1, 2025.

Interest income of $2.1 million decreased $0.1 million for the thirty-nine weeks ended May 30, 2026, compared to the thirty-nine weeks ended May 31, 2025.

Interest expense .

Interest expense of $10.1 million decreased $4.1 million for the twenty-six weeks ended February 28, 2026, compared to the twenty-six weeks ended March 1, 2025, primarily due to the decrease in interest rates on our Term Facility to 5.7% as of February 28, 2026 from 6.3% as of March 1, 2025.

Interest expense of $15.9 million decreased $3.2 million for the thirty-nine weeks ended May 30, 2026, compared to the thirty-nine weeks ended May 31, 2025, primarily due to the decrease in interest rates on our Term Facility to 5.7% as of May 30, 2026 from 6.3% as of May 31, 2025.

Gain (loss) on foreign currency transactions.

Foreign currency transactions resulted in a $0.1 million gain and an immaterial loss for the twenty-six weeks ended February 28, 2026, and March 1, 2025, respectively.

Foreign currency transactions resulted in a $0.1 million gain and an $0.3 million loss for the thirty-nine weeks ended May 30, 2026, and May 31, 2025, respectively.

Income tax (benefit) expense.

Income tax benefit was $49.8 million for the twenty-six weeks ended February 28, 2026, compared to income tax expense of $21.8 million during the twenty-six weeks ended March 1, 2025.

The change in our income tax (benefit) expense was primarily driven by lower income from operations, primarily the loss on impairment.

Income tax benefit was $52.7 million for the thirty-nine weeks ended May 30, 2026, compared to income tax expense of $35.4 million during the thirty-nine weeks ended May 31, 2025.

The change in our income tax (benefit) expense was primarily driven by lower income from operations and changes in permanent differences, primarily the non-deductible goodwill impairment.

Net (loss) income .

Net loss was $134.4 million for the twenty-six weeks ended February 28, 2026, a decrease of $209.3 million compared to net income of $74.9 million for the twenty-six weeks ended March 1, 2025.

Net loss was $186.4 million for the thirty-nine weeks ended May 30, 2026, a decrease of $302.4 million compared to net income of $116.0 million for the thirty-nine weeks ended May 31, 2025.

Net loss was primarily driven by higher operating expenses, primarily the loss on impairment, and was partially offset by lower income tax (benefit) expense and other expense.

Adjusted EBITDA.

Adjusted EBITDA decreased $26.9 million, or 19.5% for the twenty-six weeks ended February 28, 2026, compared to the twenty-six weeks ended March 1, 2025, driven primarily by lower gross profit.

Adjusted EBITDA decreased $43.5 million, or 20.5% for the thirty-nine weeks ended May 30, 2026, compared to the thirty-nine weeks ended May 31, 2025, driven primarily by lower gross profit.

For a reconciliation of Adjusted EBITDA to its most directly comparable GAAP measure, see “Reconciliation of EBITDA and Adjusted EBITDA” below.

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EBITDA and Adjusted EBITDA may not be comparable to other similarly titled captions of other companies due to differences in the non-GAAP calculation.

The following unaudited table provides a reconciliation of EBITDA and Adjusted EBITDA to its most directly comparable GAAP measure, which is net income, for the thirteen and twenty-six weeks ended February 28, 2026, and March 1, 2025:

(In thousands) Thirteen Weeks Ended Twenty-Six Weeks Ended

February 28, 2026 March 1, 2025 February 28, 2026 March 1, 2025

The following unaudited table provides a reconciliation of EBITDA and Adjusted EBITDA to its most directly comparable GAAP measure, which is net income, for the thirteen and thirty-nine weeks ended May 30, 2026, and May 31, 2025:

(In thousands) Thirteen Weeks Ended Thirty-Nine Weeks Ended

May 30, 2026 May 31, 2025 May 30, 2026 May 31, 2025

Net (loss) income $ (51,972) $ 41,102 $ (186,401) $ 115,971

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Our principal uses of cash have been working capital, debt service, repurchases of our common stock, and acquisition opportunities.

We had $107.4 million in cash as of February 28, 2026.

We had $123.9 million in cash as of May 30, 2026.

We believe our sources of liquidity and capital will be sufficient to finance our continued operations, growth strategy and additional expenses we expect to incur for at least the next twelve months.

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Any failure to comply with the restrictions of the credit facilities may result in an event of default.

We were in compliance with all covenants as of February 28, 2026, and August 30, 2025, respectively.

As of February 28, 2026, the outstanding balance of the Term Facility was $400.0 million.

We are not required to make principal payments on the Term Facility over the twelve months following the period ended February 28, 2026.

We were in compliance with all covenants as of May 30, 2026, and August 30, 2025, respectively.

As of May 30, 2026, the outstanding balance of the Term Facility was $400.0 million.

We are not required to make principal payments on the Term Facility over the twelve months following the period ended May 30, 2026.

The outstanding balance of the Term Facility is due upon its maturity in March 2030.

As of February 28, 2026, there were no amounts drawn against the Revolving Credit Facility.

As of May 30, 2026, there were no amounts drawn against the Revolving Credit Facility.

Stock Repurchase Program

The Company adopted a stock repurchase program in November 2018.

On January 6, 2026, the Company announced that its Board of Directors approved a $200.0 million repurchase authorization under its stock repurchase program (the “Current Authorization”).

On January 6, 2026, the Company announced that its Board of Directors approved a $200.0 million increase in its repurchase authorization under its stock repurchase program (the “Current Authorization”).

Under the stock repurchase program, the Company may repurchase shares from time to time in the open market or in privately negotiated transactions.

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The stock repurchase program may be suspended or discontinued at any time by the Company and does not have an expiration date.

During the thirteen weeks ended February 28, 2026, the Company repurchased 4,606,990 shares of common stock at an average price of $19.21 per share, inclusive of commissions and exclusive of accrued excise tax.

During the twenty-six weeks ended February 28, 2026, the Company repurchased 9,590,504 shares of common stock at an average price of $19.62 per share, inclusive of commissions and exclusive of accrued excise tax.

During the thirteen and thirty-nine weeks ended May 30, 2026, the Company repurchased 2,061,263 and 11,651,767 shares of common stock at an average price of $12.14 and $18.29 per share, respectively, inclusive of commissions and exclusive of accrued excise tax.

During the thirteen and thirty-nine weeks ended May 31, 2025, the Company repurchased 693,375 shares of common stock at an average price of $35.10 per share, inclusive of commissions and exclusive of accrued excise tax.

Inflation Reduction Act of 2022 requires a 1% excise tax on the net amount of share repurchases.

The Company did not repurchase any shares of common stock during the thirteen and twenty-six weeks ended March 1, 2025.

As of February 28, 2026, approximately $182.5 million remained available under the Current Authorization.

As of May 30, 2026, approximately $157.5 million remained available under the Current Authorization.

The following table sets forth the major sources and uses of cash for each of the periods set forth below (in thousands):

Twenty-Six Weeks Ended

February 28, 2026 March 1, 2025

Thirty-Nine Weeks Ended

May 30, 2026 May 31, 2025

Net cash provided by operating activities

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Operating activities.

Our net cash provided by operating activities decreased $5.1 million to $58.2 million for the twenty-six weeks ended February 28, 2026, compared to $63.3 million for the twenty-six weeks ended March 1, 2025.

The decrease in cash provided by operating activities was primarily attributable to changes in working capital for the twenty-six weeks ended February 28, 2026, as compared to the twenty-six weeks ended March 1, 2025.

Changes in working capital, comprised of changes in accounts receivable, net, inventories, prepaid expenses, other current assets, accounts payable, accrued interest, accrued expenses and other current liabilities, and other assets and liabilities, were driven by the timing of payments and receipts, which provided cash of $23.0 million in the twenty-six weeks ended February 28, 2026, compared to $41.6 million of cash used in the twenty-six weeks ended March 1, 2025, a difference of $18.5 million.

Loss from operations was $175.7 million for the twenty-six weeks ended February 28, 2026, as compared to income from operations of $109.3 million for the twenty-six weeks ended March 1, 2025.

Our net cash provided by operating activities decreased $30.9 million to $102.2 million for the thirty-nine weeks ended May 30, 2026, compared to $133.1 million for the thirty-nine weeks ended May 31, 2025.

The decrease in cash provided by operating activities was primarily attributable to changes in working capital for the thirty-nine weeks ended May 30, 2026, as compared to the thirty-nine weeks ended May 31, 2025.

Changes in working capital, comprised of changes in accounts receivable, net, inventories, net, prepaid expenses, other current assets, accounts payable, accrued interest, accrued expenses and other current liabilities, and other assets and liabilities, were driven by the timing of payments and receipts, which was $24.4 million of cash used in the thirty-nine weeks ended May 30, 2026, compared to $29.9 million of cash used in the thirty-nine weeks ended May 31, 2025, a difference of $5.5 million.

Loss from operations was $225.6 million for the thirty-nine weeks ended May 30, 2026, as compared to income from operations of $168.7 million for the thirty-nine weeks ended May 31, 2025.

The decrease was driven by higher operating expenses, primarily the loss on impairment.

Additionally, cash paid for interest was $9.8 million in the twenty-six weeks ended February 28, 2026, which was a decrease of $3.7 million as compared to the $13.5 million paid for interest in the twenty-six weeks ended March 1, 2025.

Additionally, cash paid for interest was $15.4 million in the thirty-nine weeks ended May 30, 2026, which was a decrease of $2.6 million as compared to the $18.0 million paid for interest in the thirty-nine weeks ended May 31, 2025.

Investing activities .

Our net cash used in investing activities was $7.6 million for the twenty-six weeks ended February 28, 2026, compared to an immaterial amount for the twenty-six weeks ended March 1, 2025.

Our net cash used in investing activities for the twenty-six weeks ended February 28, 2026, was primarily comprised of $7.6 million of purchases of property and equipment.

The immaterial amount of net cash used in investing activities for the twenty-six weeks ended March 1, 2025, was primarily comprised of $0.8 million of purchases of property and equipment and $0.9 million of investments in intangible and other assets, and was offset by $1.7 million of cash proceeds received from escrow related to net working capital adjustments related to the OWYN Acquisition.

Our net cash used in investing activities was $10.1 million for the thirty-nine weeks ended May 30, 2026, compared to $2.2 million for the thirty-nine weeks ended May 31, 2025.

Our net cash used in investing activities for the thirty-nine weeks ended May 30, 2026, was primarily comprised of $10.1 million of purchases of property and equipment.

The $2.2 million of net cash used in investing activities for the thirty-nine weeks ended May 31, 2025, was primarily comprised of $2.5 million of purchases of property and equipment and $1.4 million of investments in intangible and other assets, and was offset by $1.7 million of cash proceeds received from escrow related to net working capital adjustments related to the OWYN Acquisition.

Financing activities .

Our net cash used in financing activities was $41.8 million for the twenty-six weeks ended February 28, 2026, compared to $92.4 million for the twenty-six weeks ended March 1, 2025.

Net cash used in financing activities for the twenty-six weeks ended February 28, 2026, primarily consisted of $188.2 million in repurchases of common stock, inclusive of commissions and exclusive of accrued excise tax, and $2.0 million in tax payments related to the issuance of restricted stock units and performance stock units, partially offset by $150.0 million in proceeds from issuance of long-term debt and $1.1 million of cash proceeds received from option exercises.

Net cash used in financing activities for the twenty-six weeks ended March 1, 2025, primarily consisted of $100.0 million in principal payments on the Term Facility, and $2.5 million in tax payments related to issuance of restricted stock units and performance stock units, partially offset by $10.1 million of cash proceeds received from option exercises.

Our net cash used in financing activities was $66.9 million for the thirty-nine weeks ended May 30, 2026, compared to $165.2 million for the thirty-nine weeks ended May 31, 2025.

Net cash used in financing activities for the thirty-nine weeks ended May 30, 2026, primarily consisted of $213.2 million in repurchases of common stock, inclusive of commissions and exclusive of accrued excise tax, and $2.2 million in tax payments related to the issuance of restricted stock units and performance stock units, partially offset by $150.0 million in proceeds from issuance of long-term debt and $1.1 million of cash proceeds received from option exercises.

Net cash used in financing activities for the thirty-nine weeks ended May 31, 2025, primarily consisted of $150.0 million in principal payments on the Term Facility, $24.3 million in repurchases of common stock, inclusive of commissions and exclusive of accrued excise tax, and $2.8 million in tax payments related to issuance of restricted stock units and performance stock units, partially offset by $12.0 million of cash proceeds received from option exercises.

New Accounting Pronouncements

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Quantitative and Qualitative Disclosures about Market Risk

There were no material changes in our market risk exposure during the thirteen-week period ended February 28, 2026.

There were no material changes in our market risk exposure during the thirteen-week period ended May 30, 2026.

For a discussion of our market risks, see “Quantitative and Qualitative Disclosures About Market Risk” in Part II, Item 7A of our Annual Report.

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What changed 10-Q

Item 2. Management’s Discussion and Analysis