What changed in this filing

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Item 1. Financial Statements

2023-06-07 compared with 2023-03-08 · 125 added, 131 removed, 597 unchanged (30% of the section changed)

35 unchanged sentences

Common stock, $ 0.01 par value, authorized 100.0 shares;

60.9 shares issued and 59.6 shares outstanding at January 28, 2023;

60.9 shares issued and 59.2 shares outstanding at April 29, 2023;

58.9 shares issued and 58.3 shares outstanding at July 30, 2022

14 unchanged sentences

13-Week Period Ended 39-Week Period Ended

2023 January 29,

2022 January 28,

2023 January 29,

2023 April 30,

2022 April 29,

2023 April 30,

Net sales $ 7,507 $ 7,242 $ 22,855 $ 21,655

2 unchanged sentences

Operating expenses 967 969 2,969 2,845

Restructuring, acquisition and integration related expenses 3 5 5 8

Restructuring, acquisition and integration related (benefits) expenses ( 4 ) 8 1 16

Loss (gain) on sale of assets 4 ( 88 ) — ( 87 )

4 unchanged sentences

Income before income taxes 7 97 110 266

Provision for income taxes 9 25 14 24

(Benefit) provision for income taxes ( 1 ) 29 13 53

Net income including noncontrolling interests 8 68 97 213

15 unchanged sentences

13-Week Period Ended 39-Week Period Ended

2023 January 29,

2022 January 28,

2023 January 29,

2023 April 30,

2022 April 29,

2023 April 30,

Net income including noncontrolling interests $ 8 $ 68 $ 97 $ 213

10 unchanged sentences

$ 1 $ 98 $ 97 $ 270

(1) Amounts are net of tax (benefit) expense of $( 1 ) million and $ 6 million for the second quarters of fiscal 2023 and 2022, respectively, and $ 5 million and $ 10 million for fiscal 2023 and 2022 year-to-date, respectively.

(2) Amounts are net of tax (benefit) expense of $( 1 ) million and $ 1 million for the second quarters of fiscal 2023 and 2022, respectively, and $( 1 ) million and $ 1 million for fiscal 2023 and 2022 year-to-date, respectively.

(1) Amounts are net of tax (benefit) expense of $( 1 ) million, $ 11 million, $ 4 million and $ 21 million, respectively.

(2) Amounts are net of tax (benefit) expense of $ 0 million , $ 0 million , $( 1 ) million and $ 1 million, respectively.

See accompanying Notes to Condensed Consolidated Financial Statements.

2 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (unaudited)

For the 13-week periods ended January 28, 2023 and January 29, 2022

For the 13-week periods ended April 29, 2023 and April 30, 2022

(in millions)

1 unchanged sentence

Paid-in Capital Accumulated

Comprehensive Loss Retained Earnings Total United Natural Foods, Inc.

Comprehensive (Loss) Income Retained Earnings Total United Natural Foods, Inc.

Stockholders’ Equity Noncontrolling Interests Total Stockholders’ Equity

Shares Amount Shares Amount

Balances at October 29, 2022 60.9 $ 1 1.0 $ ( 36 ) $ 583 $ ( 5 ) $ 1,292 $ 1,835 $ — $ 1,835

Restricted stock vestings — — — — ( 2 ) — — ( 2 ) — ( 2 )

Balances at January 28, 2023 60.9 $ 1 1.3 $ ( 53 ) $ 592 $ ( 9 ) $ 1,311 $ 1,842 $ 3 $ 1,845

Share-based compensation — — — — 10 — — 10 — 10

1 unchanged sentence

Other comprehensive loss — — — — — ( 6 ) — ( 6 ) — ( 6 )

Distributions to noncontrolling interests — — — — — — — — ( 3 ) ( 3 )

Net income — — — — — — 7 7 1 8

Balances at April 29, 2023 60.9 $ 1 1.7 $ ( 65 ) $ 602 $ ( 15 ) $ 1,318 $ 1,841 $ 1 $ 1,842

Balances at January 29, 2022 58.8 $ 1 0.6 $ ( 24 ) $ 596 $ ( 9 ) $ 1,120 $ 1,684 $ ( 1 ) $ 1,683

Balances at October 30, 2021 58.7 $ 1 0.6 $ ( 24 ) $ 582 $ ( 24 ) $ 1,054 $ 1,589 $ ( 2 ) $ 1,587

Restricted stock vestings 0.2 — — — ( 7 ) — — ( 7 ) — ( 7 )

2 unchanged sentences

Distributions to noncontrolling interests — — — — — — — — ( 1 ) ( 1 )

Proceeds from issuance of common stock, net — — — — 4 — — 4 — 4

Net income — — — — — — 67 67 1 68

Balances at January 29, 2022 58.8 $ 1 0.6 $ ( 24 ) $ 596 $ ( 9 ) $ 1,120 $ 1,684 $ ( 1 ) $ 1,683

Balances at April 30, 2022 59.0 $ 1 0.6 $ ( 24 ) $ 599 $ 22 $ 1,187 $ 1,785 $ ( 1 ) $ 1,784

See accompanying Notes to Condensed Consolidated Financial Statements.

2 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (unaudited)

For the 26-week periods ended January 28, 2023 and January 29, 2022

For the 39-week periods ended April 29, 2023 and April 30, 2022

(in millions)

1 unchanged sentence

Paid-in Capital Accumulated

Comprehensive Loss Retained Earnings Total United Natural Foods, Inc.

Comprehensive (Loss) Income Retained Earnings Total United Natural Foods, Inc.

Stockholders’ Equity Noncontrolling Interests Total Stockholders’ Equity

7 unchanged sentences

Net income — — — — — — 92 92 5 97

Balances at January 28, 2023 60.9 $ 1 1.3 $ ( 53 ) $ 592 $ ( 9 ) $ 1,311 $ 1,842 $ 3 $ 1,845

Balances at April 29, 2023 60.9 $ 1 1.7 $ ( 65 ) $ 602 $ ( 15 ) $ 1,318 $ 1,841 $ 1 $ 1,842

Balances at July 31, 2021 57.0 $ 1 0.6 $ ( 24 ) $ 599 $ ( 39 ) $ 978 $ 1,515 $ ( 1 ) $ 1,514

5 unchanged sentences

Net income — — — — — — 209 209 4 213

Balances at January 29, 2022 58.8 $ 1 0.6 $ ( 24 ) $ 596 $ ( 9 ) $ 1,120 $ 1,684 $ ( 1 ) $ 1,683

Balances at April 30, 2022 59.0 $ 1 0.6 $ ( 24 ) $ 599 $ 22 $ 1,187 $ 1,785 $ ( 1 ) $ 1,784

See accompanying Notes to Condensed Consolidated Financial Statements.

3 unchanged sentences

39-Week Period Ended

(in millions) January 28,

2023 January 29,

(in millions) April 29,

2023 April 30,

CASH FLOWS FROM OPERATING ACTIVITIES:

Net income including noncontrolling interests $ 97 $ 213

Adjustments to reconcile net income to net cash provided by operating activities:

Adjustments to reconcile net income to net cash provided by (used in) operating activities:

Depreciation and amortization 224 210

Share-based compensation 33 33

(Gain) loss on sale of property and equipment ( 9 ) 1

Gain on sale of property and equipment ( 9 ) ( 87 )

Closed property and other restructuring charges — 1

2 unchanged sentences

LIFO charge 83 102

Provision for losses on receivables ( 3 ) 1

(Recoveries) provision for losses on receivables ( 2 ) 4

Non-cash interest expense and other adjustments 11 20

Changes in operating assets and liabilities ( 15 ) ( 497 )

Net cash provided by operating activities

Net cash provided by (used in) operating activities

CASH FLOWS FROM INVESTING ACTIVITIES:

2 unchanged sentences

Payments for investments ( 7 ) ( 28 )

Net cash used in investing activities

( 143 ) ( 129 )

Net cash (used in) provided by investing activities

CASH FLOWS FROM FINANCING ACTIVITIES:

8 unchanged sentences

Repayments of other loans ( 2 ) —

Net cash (used in) provided by financing activities

Net cash used in financing activities

( 197 ) ( 7 )

EFFECT OF EXCHANGE RATE ON CASH — —

4 unchanged sentences

Cash paid for interest $ 114 $ 110

Cash payments for federal, state, and foreign income taxes, net $ 3 $ —

Cash refunds for federal, state, and foreign income taxes, net $ ( 4 ) $ —

Leased assets obtained in exchange for new operating lease liabilities $ 198 $ 260

11 unchanged sentences

The Company’s fiscal years end on the Saturday closest to July 31 and contain either 52 or 53 weeks.

References to the second quarter of fiscal 2023 and 2022 relate to the 13-week fiscal quarters ended January 28, 2023 and January 29, 2022, respectively.

References to fiscal 2023 and 2022 year-to-date relate to the 26-week fiscal periods ended January 28, 2023 and January 29, 2022, respectively.

References to the third quarter of fiscal 2023 and 2022 relate to the 13-week fiscal quarters ended April 29, 2023 and April 30, 2022, respectively.

References to fiscal 2023 and 2022 year-to-date relate to the 39-week fiscal periods ended April 29, 2023 and April 30, 2022, respectively.

Basis of Presentation

15 unchanged sentences

Checks outstanding in excess of bank balances create book overdrafts, which are recorded in Accounts payable in the Condensed Consolidated Balance Sheets and are reflected as an operating activity in the Condensed Consolidated Statements of Cash Flows.

As of January 28, 2023 and July 30, 2022, the Company had net book overdrafts of $ 263 million and $ 266 million, respectively.

As of April 29, 2023 and July 30, 2022, the Company had net book overdrafts of $ 311 million and $ 266 million, respectively.

Reclassifications

7 unchanged sentences

Allowances for inventory shortages are recorded based on the results of these counts to provide for estimated variances as of the end of each fiscal year.

The LIFO reserve was approximately $ 275 million and $ 225 million as of January 28, 2023 and July 30, 2022, respectively, which is recorded within Inventories, net on the Condensed Consolidated Balance Sheets.

The LIFO reserve was approximately $ 308 million and $ 225 million as of April 29, 2023 and July 30, 2022, respectively, which is recorded within Inventories, net on the Condensed Consolidated Balance Sheets.

NOTE 2—RECENTLY ADOPTED AND ISSUED ACCOUNTING PRONOUNCEMENTS

10 unchanged sentences

• Chains , which consists of customer accounts that typically have more than 10 operating stores and excludes stores included within the Supernatural and Other channels defined below;

• Independent retailers , which includes smaller size accounts, including single store and multiple store locations, and group purchasing entities that are not classified within Chains above or Other discussed below;

• Supernatural , which consists of chain accounts that are national in scope and carry primarily natural products, and currently consists solely of one customer;

• Retail , which reflects the Company’s Retail segment, including Cub Foods and Shoppers stores, and

• Retail , which reflects the Company’s Retail segment, including Cub Foods and Shoppers stores;

• Other , which includes international customers outside of Canada, foodservice, eCommerce, conventional military business and other sales.

2 unchanged sentences

Net Sales for the 13-Week Period Ended

(in millions) January 28, 2023

(in millions) April 29, 2023

Customer Channel Wholesale Retail Other Eliminations (1)

7 unchanged sentences

Net Sales for the 13-Week Period Ended

(in millions) January 29, 2022

(in millions) April 30, 2022

Customer Channel Wholesale Retail Other Eliminations (1)

7 unchanged sentences

Net Sales for the 39-Week Period Ended

(in millions) January 28, 2023

(in millions) April 29, 2023

Customer Channel Wholesale Retail Other Eliminations (1)

7 unchanged sentences

Net Sales for the 39-Week Period Ended

(in millions) January 29, 2022

(in millions) April 30, 2022

Customer Channel Wholesale Retail Other Eliminations (1)

12 unchanged sentences

Accounts and notes receivable are as follows:

(in millions) January 28, 2023 July 30, 2022

(in millions) April 29, 2023 July 30, 2022

Customer accounts receivable $ 979 $ 1,213

4 unchanged sentences

Long-term notes receivable, net, included within Other long-term assets

During the second quarter of fiscal 2023, the Company entered into a purchase agreement with a third-party financial institution for the sale of certain customer accounts receivable up to a maximum outstanding amount of $ 300 million, without recourse, subject to eligibility criteria established by the financial institution.

On October 31, 2022, the Company entered into a purchase agreement with a third-party financial institution for the sale of certain customer accounts receivable up to a maximum outstanding amount of $ 300 million, without recourse, subject to eligibility criteria established by the financial institution.

Pursuant to the terms of the agreement, certain customer receivables are sold to the third-party financial institution on a revolving basis, subject to certain limitations.

1 unchanged sentence

The Company’s continuing involvement in transferred receivables is limited to servicing the receivables.

Accounts receivable that the Company is servicing on behalf of the financial institution, which would have otherwise been outstanding as of January 28, 2023, was approximately $ 292 million.

Accounts receivable that the Company is servicing on behalf of the financial institution, which would have otherwise been outstanding as of April 29, 2023, was approximately $ 286 million.

Net proceeds received are included within net cash provided by operating activities in the Condensed Consolidated Statements of Cash Flows in the period of sale.

The loss on sale of receivables was $ 5 million during the second quarter of fiscal 2023 and is recorded within Loss (gain) on sale of assets in the Condensed Consolidated Statements of Operations.

The loss on sale of receivables was $ 4 million and $ 9 million during the third quarter of fiscal 2023 and fiscal 2023 year-to-date, respectively, and is recorded within Loss (gain) on sale of assets in the Condensed Consolidated Statements of Operations.

NOTE 4—GOODWILL AND INTANGIBLE ASSETS, NET

3 unchanged sentences

Change in foreign exchange rates — — —

Goodwill as of January 28, 2023

(1) Wholesale amounts are net of accumulated goodwill impairment charges of $ 717 million as of July 30, 2022 and January 28, 2023.

(2) Other amounts are net of accumulated goodwill impairment charges of $ 10 million as of July 30, 2022 and January 28, 2023.

Goodwill as of April 29, 2023

(1) Wholesale amounts are net of accumulated goodwill impairment charges of $ 717 million as of July 30, 2022 and April 29, 2023.

(2) Other amounts are net of accumulated goodwill impairment charges of $ 10 million as of July 30, 2022 and April 29, 2023.

Identifiable intangible assets, net consisted of the following:

January 28, 2023 July 30, 2022

April 29, 2023 July 30, 2022

(in millions) Gross Carrying

12 unchanged sentences

Intangibles assets, net $ 1,186 $ 421 $ 765 $ 1,186 $ 367 $ 819

Amortization expense was $ 18 million and $ 18 million for the second quarters of fiscal 2023 and 2022, respectively, and $ 36 million and $ 36 million for fiscal 2023 and 2022 year-to-date, respectively.

The estimated future amortization expense for each of the next five fiscal years and thereafter on amortizing intangible assets existing as of January 28, 2023 is as shown below:

Amortization expense was $ 18 million and $ 18 million for the third quarters of fiscal 2023 and 2022, respectively, and $ 54 million and $ 54 million for fiscal 2023 and 2022 year-to-date, respectively.

The estimated future amortization expense for each of the next five fiscal years and thereafter on amortizing intangible assets existing as of April 29, 2023 is as shown below:

(in millions)

4 unchanged sentences

The following tables provide the fair value hierarchy for financial assets and liabilities measured on a recurring basis:

Condensed Consolidated Balance Sheets Location Fair Value at January 28, 2023

Condensed Consolidated Balance Sheets Location Fair Value at April 29, 2023

(in millions) Level 1 Level 2 Level 3

Foreign currency derivatives designated as hedging instruments Prepaid expenses and other current assets $ — $ 1 $ —

Interest rate swaps designated as hedging instruments Prepaid expenses and other current assets $ — $ 15 $ —

10 unchanged sentences

The interest rate swap contracts are valued using an income approach interest rate swap valuation model incorporating observable market inputs including interest rates, SOFR swap rates and credit default swap rates.

As of January 28, 2023, a 100-basis point increase in forward SOFR interest rates would increase the fair value of the interest rate swaps by approximately $ 12 million;

As of April 29, 2023, a 100-basis point increase in forward SOFR interest rates would increase the fair value of the interest rate swaps by approximately $ 10 million;

a 100-basis point decrease in forward SOFR interest rates would decrease the fair value of the interest rate swaps by approximately $ 10 million.

5 unchanged sentences

In the table below, the carrying value of the Company’s long-term debt is net of original issue discounts and debt issuance costs.

January 28, 2023 July 30, 2022

April 29, 2023 July 30, 2022

(in millions) Carrying Value Fair Value Carrying Value Fair Value

5 unchanged sentences

Interest rate swap contracts are entered into for periods consistent with related underlying exposures and do not constitute positions independent of those exposures.

The Company’s interest rate swap contracts are designated as cash flow hedges as of January 28, 2023.

The Company’s interest rate swap contracts are designated as cash flow hedges as of April 29, 2023.

Interest rate swap contracts are reflected at their fair values in the Condensed Consolidated Balance Sheets.

Refer to Note 5—Fair Value Measurements of Financial Instruments for further information on the fair value of interest rate swap contracts.

Details of active swap contracts as of January 28, 2023, which are all pay fixed and receive floating, are as follows:

Details of active swap contracts as of April 29, 2023, which are all pay fixed and receive floating, are as follows:

Effective Date Swap Maturity Notional Value (in millions) Pay Fixed Rate Receive Floating Rate Floating Rate Reset Terms

November 16, 2018 March 31, 2023 150 2.7770 % One-Month Term SOFR Monthly

January 23, 2019 March 31, 2023 50 2.4245 % One-Month Term SOFR Monthly

November 30, 2018 September 30, 2023 50 2.6980 % One-Month Term SOFR Monthly

16 unchanged sentences

13-Week Period Ended 39-Week Period Ended

January 28, 2023 January 29, 2022 January 28, 2023 January 29, 2022

April 29, 2023 April 30, 2022 April 29, 2023 April 30, 2022

(in millions) Interest expense, net Interest expense, net

1 unchanged sentence

$ 35 $ 37 $ 109 $ 121

Loss on cash flow hedging relationships:

Loss reclassified from comprehensive income into earnings $ 4 $ ( 10 ) $ 4 $ ( 21 )

Gain (loss) on cash flow hedging relationships:

Gain (loss) reclassified from comprehensive income into earnings $ 3 $ ( 9 ) $ 7 $ ( 30 )

NOTE 7—LONG-TERM DEBT

1 unchanged sentence

(in millions) Average Interest Rate at

January 28, 2023

Fiscal Maturity Year January 28,

April 29, 2023

Fiscal Maturity Year April 29,

2023 July 30,

9 unchanged sentences

On October 22, 2020, the Company issued $ 500 million of unsecured 6.750 % senior notes due October 15, 2028 (the “Senior Notes”).

The Senior Notes, which are presented net of debt issuance costs of $ 7 million as of January 28, 2023 and July 30, 2022 in the Condensed Consolidated Balance Sheets, are guaranteed by each of the Company’s subsidiaries that are borrowers under or that guarantee the ABL Credit Facility or the Term Loan Facility (defined below).

The Senior Notes, which are presented net of debt issuance costs of $ 7 million as of April 29, 2023 and July 30, 2022 in the Condensed Consolidated Balance Sheets, are guaranteed by each of the Company’s subsidiaries that are borrowers under or that guarantee the ABL Credit Facility or the Term Loan Facility (defined below).

ABL Credit Facility

16 unchanged sentences

Total $ 2,641 $ 2,682

As of January 28, 2023, the Borrowers’ Borrowing Base, net of $ 95 million of reserves, was $ 2,740 million, which is above the $ 2,600 million limit of availability, resulting in total availability of $ 2,600 million for loans and letters of credit under the ABL Credit Facility.

As of January 28, 2023, the Borrowers had $ 923 million of loans outstanding under the ABL Credit Facility, which are presented net of debt issuance costs of $ 9 million and are included in Long-term debt in the Condensed Consolidated Balance Sheets.

As of January 28, 2023, the U.S.

As of April 29, 2023, the Borrowers’ Borrowing Base, net of $ 100 million of reserves, was $ 2,640 million, which is above the $ 2,600 million limit of availability, resulting in total availability of $ 2,600 million for loans and letters of credit under the ABL Credit Facility.

As of April 29, 2023, the Borrowers had $ 879 million of loans outstanding under the ABL Credit Facility, which are presented net of debt issuance costs of $ 8 million and are included in Long-term debt in the Condensed Consolidated Balance Sheets.

As of April 29, 2023, the U.S.

Borrowers had $ 144 million in letters of credit outstanding under the ABL Credit Facility.

The Company’s resulting remaining availability under the ABL Credit Facility was $ 1,533 million as of January 28, 2023.

The Company’s resulting remaining availability under the ABL Credit Facility was $ 1,577 million as of April 29, 2023.

Availability under the ABL Credit Facility (in millions):

January 28, 2023

April 29, 2023

Total availability for ABL loans and letters of credit $ 2,600

4 unchanged sentences

Interest rates and fees under the ABL Credit Facility:

Range of Facility Rates and Fees (per annum) January 28, 2023

Range of Facility Rates and Fees (per annum) April 29, 2023

Borrowers’ applicable margin for base rate loans 0.00 % - 0.25 %

11 unchanged sentences

The Term Borrowers’ obligations under the Term Loan Facility and the Guarantors’ obligations under the related guarantees are secured by (i) a first-priority lien on substantially all of the Term Borrowers’ and the Guarantors’ assets other than the ABL Assets and (ii) a second-priority lien on substantially all of the Term Borrowers’ and the Guarantors’ ABL Assets, in each case, subject to customary exceptions and limitations, including an exception for owned real property with net book values of less than $ 10 million.

As of January 28, 2023 and July 30, 2022, there was $ 618 million and $ 629 million, respectively, of owned real property pledged as collateral that was included in Property and equipment, net in the Condensed Consolidated Balance Sheets.

As of April 29, 2023 and July 30, 2022, there was $ 615 million and $ 629 million, respectively, of owned real property pledged as collateral that was included in Property and equipment, net in the Condensed Consolidated Balance Sheets.

The Company must prepay loans outstanding under the Term Loan Facility no later than 130 days after the fiscal year end in an aggregate principal amount equal to a specified percentage (which percentage ranges from 0 to 75 percent depending on the Consolidated First Lien Net Leverage Ratio as of the last day of such fiscal year) of Excess Cash Flow (as defined in the Term Loan Agreement), minus certain types of voluntary prepayments of indebtedness made during such fiscal year.

As of January 28, 2023, there is no Excess Cash Flow payment expected to be required in fiscal 2024.

As of January 28, 2023, the Company had borrowings of $ 670 million outstanding under the Term Loan Facility, which are presented in the Condensed Consolidated Balance Sheets net of debt issuance costs of $ 9 million and an original issue discount on debt of $ 7 million.

As of January 28, 2023, no amount of the Term Loan Facility was classified as current.

In the second quarter of fiscal 2023, the Company made a $ 125 million voluntary prepayment on the Term Loan Facility with a portion of the proceeds received from monetizing certain receivables within Accounts receivable, net associated with the Company’s purchase agreement with a third-party financial institution as previously discussed within Note 3—Revenue Recognition.

As of April 29, 2023, there is no Excess Cash Flow payment expected to be required in fiscal 2024.

As of April 29, 2023, the Company had borrowings of $ 670 million outstanding under the Term Loan Facility, which are presented in the Condensed Consolidated Balance Sheets net of debt issuance costs of $ 8 million and an original issue discount on debt of $ 7 million.

As of April 29, 2023, no amount of the Term Loan Facility was classified as current.

On November 7, 2022, the Company made a $ 125 million voluntary prepayment on the Term Loan Facility with a portion of the proceeds received from monetizing certain receivables within Accounts receivable, net associated with the Company’s purchase agreement with a third-party financial institution as previously discussed within Note 3—Revenue Recognition.

This voluntary prepayment will count towards any requirement to prepay the Term Loan Facility from Excess Cash Flow (as defined in the Term Loan Agreement) generated during fiscal 2023, which would be due in fiscal 2024.

NOTE 8—COMPREHENSIVE INCOME AND ACCUMULATED OTHER COMPREHENSIVE LOSS

NOTE 8—COMPREHENSIVE INCOME AND ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME

Changes in Accumulated other comprehensive loss by component, net of tax, for fiscal 2023 year-to-date were as follows:

5 unchanged sentences

Net current period Other comprehensive (loss) income ( 4 ) 1 ( 4 ) 12 5

Accumulated other comprehensive income (loss) at January 28, 2023 $ — $ ( 2 ) $ ( 21 ) $ 14 $ ( 9 )

Changes in Accumulated other comprehensive loss by component, net of tax, for fiscal 2022 year-to-date were as follows:

Accumulated other comprehensive (loss) income at April 29, 2023 $ ( 2 ) $ ( 2 ) $ ( 23 ) $ 12 $ ( 15 )

Changes in Accumulated other comprehensive (loss) income by component, net of tax, for fiscal 2022 year-to-date were as follows:

(in millions) Other Cash Flow Derivatives Benefit Plans Foreign Currency Translation Swap Agreements Total

4 unchanged sentences

Net current period Other comprehensive income (loss) 4 2 ( 3 ) 58 61

Accumulated other comprehensive income (loss) at January 29, 2022 $ 2 $ 39 $ ( 18 ) $ ( 32 ) $ ( 9 )

Items reclassified out of Accumulated other comprehensive loss had the following impact on the Condensed Consolidated Statements of Operations:

Accumulated other comprehensive income (loss) at April 30, 2022 $ 4 $ 39 $ ( 19 ) $ ( 2 ) $ 22

Items reclassified out of Accumulated other comprehensive (loss) income had the following impact on the Condensed Consolidated Statements of Operations:

13-Week Period Ended 39-Week Period Ended Affected Line Item on the Condensed Consolidated Statements of Operations

(in millions) January 28,

2023 January 29,

2022 January 28,

2023 January 29,

(in millions) April 29,

2023 April 30,

2022 April 29,

2023 April 30,

Pension and postretirement benefit plan net assets:

1 unchanged sentence

$ — $ — $ 1 $ 2 Net periodic benefit income, excluding service cost

Income tax benefit — — — — Provision for income taxes

Income tax benefit — — — — (Benefit) provision for income taxes

Total reclassifications, net of tax $ — $ — $ 1 $ 2

1 unchanged sentence

Reclassification of cash flow hedges $ ( 3 ) $ 9 $ ( 7 ) $ 30 Interest expense, net

Income tax expense (benefit) 1 ( 3 ) 1 ( 6 ) Provision for income taxes

Income tax expense (benefit) 1 ( 2 ) 2 ( 8 ) (Benefit) provision for income taxes

Total reclassifications, net of tax $ ( 2 ) $ 7 $ ( 5 ) $ 22

1 unchanged sentence

Reclassification of cash flow hedge $ 1 $ 2 $ 3 $ 4 Cost of sales

Income tax benefit ( 1 ) ( 1 ) ( 1 ) ( 1 ) Provision for income taxes

Income tax benefit — — ( 1 ) ( 1 ) (Benefit) provision for income taxes

Total reclassifications, net of tax $ 1 $ 2 $ 2 $ 3

(1) Reclassification of amounts included in net periodic benefit income include reclassification of prior service cost and reclassification of net actuarial loss as reflected in Note 10—Benefit Plans.

As of January 28, 2023, the Company expects to reclassify $ 16 million related to unrealized derivative gains on interest rate swap hedges out of Accumulated other comprehensive loss and primarily into Interest expense, net during the following twelve-month period.

As of April 29, 2023, the Company expects to reclassify $ 13 million related to unrealized derivative gains out of Accumulated other comprehensive loss and primarily into Interest expense, net during the following twelve-month period.

NOTE 9—SHARE-BASED AWARDS

In fiscal 2023 year-to-date, the Company granted restricted stock units and performance share units to its directors, executive officers and certain employees representing a right to receive an aggregate of 1.6 million shares.

As of January 28, 2023, there were 1.6 million shares available for issuance under the Amended and Restated 2020 Equity Incentive Plan.

As of April 29, 2023, there were 1.6 million shares available for issuance under the Amended and Restated 2020 Equity Incentive Plan.

NOTE 10—BENEFIT PLANS

2 unchanged sentences

Pension Benefits Other Postretirement Benefits

(in millions) January 28, 2023 January 29, 2022 January 28, 2023 January 29, 2022

(in millions) April 29, 2023 April 30, 2022 April 29, 2023 April 30, 2022

Net Periodic Benefit (Income) Cost

1 unchanged sentence

Expected return on plan assets ( 24 ) ( 20 ) — —

Amortization of prior service cost — — 1 1

Net periodic benefit (income) cost $ ( 8 ) $ ( 11 ) $ 1 $ 1

Net periodic benefit income $ ( 8 ) $ ( 10 ) $ — $ —

Contributions to benefit plans $ ( 1 ) $ ( 1 ) $ — $ —

1 unchanged sentence

Pension Benefits Other Postretirement Benefits

(in millions) January 28, 2023 January 29, 2022 January 28, 2023 January 29, 2022

(in millions) April 29, 2023 April 30, 2022 April 29, 2023 April 30, 2022

Net Periodic Benefit (Income) Cost

9 unchanged sentences

Multiemployer Pension Plans

The Company contributed $ 12 million and $ 11 million in the second quarters of fiscal 2023 and 2022, respectively, and $ 23 million and $ 22 million in fiscal 2023 and 2022 year-to-date, respectively, to multiemployer pension plans, which are included within Operating expenses.

The Company contributed $ 13 million and $ 12 million in the third quarters of fiscal 2023 and 2022, respectively, and $ 36 million and $ 34 million in fiscal 2023 and 2022 year-to-date, respectively, to multiemployer pension plans, which contributions are included within Operating expenses.

NOTE 11—INCOME TAXES

The effective tax rate for the second quarter of fiscal 2023 was 29.0 % compared to 26.9 % for the second quarter of fiscal 2022.

The change was driven primarily by the reduction in pre-tax income during the second quarter of fiscal 2023.

The effective tax rate for the third quarter of fiscal 2023 was a benefit rate of 14.3 % compared to an expense rate of 29.9 % for the third quarter of fiscal 2022.

The change was primarily driven by the impact of a partnership investment entered into in the third quarter of fiscal 2023, and the reduction in pre-tax income during the third quarter of fiscal 2023.

The effective tax rate for fiscal 2023 year-to-date was 11.8 % compared to 19.9 % for fiscal 2022 year-to-date.

The effective tax rate for both fiscal 2023 and fiscal 2022 year-to-date was reduced by the impact of discrete tax benefits related to the vesting of employee stock awards.

The change was driven primarily by the impact of a partnership investment entered into in the third quarter of fiscal 2023, and the reduction in pre-tax income in fiscal 2023 year-to-date as compared to fiscal 2022 year-to-date.

This was partially offset by the lower discrete tax benefits in fiscal 2023 year-to-date related to the vesting of employee stock awards as compared to fiscal 2022 year-to-date.

NOTE 12—EARNINGS PER SHARE

1 unchanged sentence

13-Week Period Ended 39-Week Period Ended

(in millions, except per share data) January 28,

2023 January 29,

2022 January 28,

2023 January 29,

(in millions, except per share data) April 29,

2023 April 30,

2022 April 29,

2023 April 30,

Basic weighted average shares outstanding 59.4 58.4 59.3 57.9

17 unchanged sentences

Reportable segments are reviewed on an annual basis, or more frequently if events or circumstances indicate a change in reportable segments has occurred.

In fiscal 2022, the Company changed its measure of segment profit to exclude the impact of the non-cash LIFO charge or benefit from Adjusted EBITDA.

Prior period Adjusted EBITDA amounts and the reconciliation to Income before income taxes have been recast to reflect this change in the measure of segment profit.

The following table provides Net sales and Adjusted EBITDA by reportable segment and reconciles that information to consolidated Net sales and Income before income taxes, respectively:

In the third quarter of fiscal 2023, the Company reversed previously accrued incentive compensation expense due to changes in expected financial performance in the third quarter of fiscal 2023 and recorded this adjustment within its business segments.

This had the effect of removing previously allocated incentive compensation expense from fiscal 2023 year-to-date reportable segment Adjusted EBITDA.

The following table provides information by reportable segment, including Net sales, Adjusted EBITDA, with a reconciliation to Income before income taxes, depreciation and amortization, and payments for capital expenditures:

13-Week Period Ended 39-Week Period Ended

(in millions) January 28, 2023 January 29, 2022 January 28, 2023 January 29, 2022

(in millions) April 29, 2023 April 30, 2022 April 29, 2023 April 30, 2022

Wholesale (1)

6 unchanged sentences

Wholesale $ 143 $ 171 $ 451 $ 522

$ 137 $ 176 $ 308 $ 351

Retail 18 14 66 68

Other ( 1 ) 11 33 27

7 unchanged sentences

LIFO charge ( 33 ) ( 72 ) ( 83 ) ( 102 )

( 29 ) ( 19 ) ( 50 ) ( 30 )

Restructuring, acquisition and integration related expenses ( 3 ) ( 5 ) ( 5 ) ( 8 )

Restructuring, acquisition and integration related benefits (expenses) 4 ( 8 ) ( 1 ) ( 16 )

(Loss) gain on sale of assets ( 4 ) 88 — 87

13 unchanged sentences

Total capital expenditures $ 67 $ 52 $ 218 $ 158

(1) As presented in Note 3—Revenue Recognition, the Company recorded $ 353 million and $ 356 million for the second quarters of fiscal 2023 and 2022, respectively, and $ 687 million and $ 695 million in fiscal 2023 and 2022 year-to-date, respectively, within Net sales in its Wholesale reportable segment attributable to Wholesale to Retail sales that have been eliminated upon consolidation.

(2) As a result of the segment profit measurement revision discussed above, previously reported Adjusted EBITDA disclosures by segment and the reconciliation to Income before income taxes has been recast to exclude the impact of the non-cash LIFO charge.

(1) As presented in Note 3—Revenue Recognition, the Company recorded $ 319 million and $ 337 million for the third quarters of fiscal 2023 and 2022, respectively, and $ 1,006 million and $ 1,032 million in fiscal 2023 and 2022 year-to-date, respectively, within Net sales in its Wholesale reportable segment attributable to Wholesale to Retail sales that have been eliminated upon consolidation.

Total assets by reportable segment were as follows:

(in millions) January 28,

2023 July 30,

(in millions) April 29, 2023 July 30, 2022

Wholesale $ 6,656 $ 6,733

5 unchanged sentences

Guarantees and Contingent Liabilities

The Company has outstanding guarantees related to certain leases, fixture financing loans and other debt obligations of various retailers as of January 28, 2023.

The Company has outstanding guarantees related to certain leases, fixture financing loans and other debt obligations of various retailers as of April 29, 2023.

These guarantees were generally made to support the business growth of wholesale customers.

3 unchanged sentences

The Company reviews performance risk related to its guarantee obligations based on internal measures of credit performance.

As of January 28, 2023, the maximum amount of undiscounted payments the Company would be required to make in the event of default of all guarantees was $ 16 million ($ 14 million on a discounted basis).

Based on the indemnification agreements, personal guarantees and results of the reviews of performance risk, as of January 28, 2023, a total estimated loss of $ 1 million is recorded in the Condensed Consolidated Balance Sheets.

As of April 29, 2023, the maximum amount of undiscounted payments the Company would be required to make in the event of default of all guarantees was $ 16 million ($ 14 million on a discounted basis).

Based on the indemnification agreements, personal guarantees and results of the reviews of performance risk, as of April 29, 2023, a total estimated loss of $ 1 million is recorded in the Condensed Consolidated Balance Sheets.

The Company is a party to a variety of contractual agreements under which it may be obligated to indemnify the other party for certain matters in the ordinary course of business, which indemnities may be secured by operation of law or otherwise.

19 unchanged sentences

These contracts typically include either volume commitments or fixed expiration dates, termination provisions and other standard contractual considerations.

As of January 28, 2023, the Company had approximately $ 562 million of non-cancelable future purchase obligations, most of which will be paid and utilized in the ordinary course within one year.

As of January 28, 2023, the Company had commitments of $ 755 million for future undiscounted minimum lease payments on leases signed but not yet commenced with terms of up to 21 years from commencement date.

As of April 29, 2023, the Company had approximately $ 524 million of non-cancelable future purchase obligations, most of which will be paid and utilized in the ordinary course within one year.

As of April 29, 2023, the Company had commitments of $ 772 million for future undiscounted minimum lease payments on leases signed but not yet commenced with terms of up to 20 years from commencement date.

Legal Proceedings

8 unchanged sentences

The Company produced the data in compliance with the order.

On March 8, 2023, the Company received a subpoena from the Consumer Protection Division of the Maryland Attorney General’s Office seeking records related to the distribution and dispensing of opioids.

The Company is in the process of gathering responsive documents and responding to the subpoena.

The Company believes these claims are without merit and is vigorously defending this matter.

10 unchanged sentences

The hearing on the remand motion and motions to dismiss occurred on May 20, 2021.

On September 21, 2021, the Federal District Court remanded the case to Minnesota state court and did not rule on the motion to dismiss, which was refiled in state court.

On September 21, 2021, the Federal District Court remanded the

case to Minnesota state court and did not rule on the motion to dismiss, which was refiled in state court.

On February 1, 2022, the state court denied the motion to dismiss.

15 unchanged sentences

On July 2, 2020, the Court granted the defendants’ summary judgment motion and denied the relators’ motion, dismissing the case.

On July 9, 2020, the relators filed a notice of appeal with the 7th Circuit Court of Appeals, and on September 30, 2020 filed an appellate brief.

On November 30, 2020, the Company filed its response.

The hearing before the 7th Circuit Court of Appeals occurred on January 19, 2021.

On August 12, 2021, the 7th Circuit affirmed the District Court’s decision granting summary judgment in defendants’ favor.

On September 23, 2021, the relators filed a petition for rehearing and defendants filed a response on November 9, 2021.

On December 3, 2021, the 7th Circuit denied the petition for rehearing.

On April 1, 2022, the relators filed a petition for a writ of certiorari with the United States Supreme Court.

The Company filed its response on June 20, 2022.

On August 22, 2022, the Supreme Court issued an order inviting the Solicitor General to file a brief setting forth the views of the government on the petition for a writ of certiorari.

On December 6, 2022, the Solicitor General submitted its brief recommending that the Supreme Court grant the petition for certiorari.

On January 13, 2023, the Supreme Court granted the petition for certiorari and oral argument is set for April 18, 2023.

On July 9, 2020, the relators filed a notice of appeal with the Seventh Circuit Court of Appeals.

On August 12, 2021, the Seventh Circuit affirmed the District Court’s decision granting summary judgment in defendants’ favor.

On September 23, 2021, the relators filed a petition for rehearing.

On December 3, 2021, the Seventh Circuit denied the petition for rehearing.

On April 1, 2022, the relators filed a petition for a writ of certiorari with the United States Supreme Court which was granted on January 13, 2023.

Oral argument took place in the Supreme Court on April 18, 2023.

On June 1, 2023, the Supreme Court reversed and vacated the lower court’s judgment and remanded the case to the Seventh Circuit for further proceedings.

From time to time, the Company receives notice of claims or potential claims or becomes involved in litigation, alternative dispute resolution, such as arbitration, or other legal and regulatory proceedings that arise in the ordinary course of its business, including investigations and claims regarding employment law, including wage and hour (including class actions);

8 unchanged sentences

Management regularly monitors the Company’s exposure to the loss contingencies associated with these matters and may from time to time change its predictions with respect to outcomes and estimates with respect to related costs and exposures.

As of January 28, 2023, no material accrued obligations, individually or in the aggregate, have been recorded for these legal proceedings.

As of April 29, 2023, no material accrued obligations, individually or in the aggregate, have been recorded for these legal proceedings.

Although management believes it has made appropriate assessments of potential and contingent loss in each of these cases based on current facts and circumstances, and application of prevailing legal principles, there can be no assurance that material differences in actual outcomes from management’s current assessments, costs and exposures relative to current predictions and estimates, or material changes in such predictions or estimates will not occur.

1 unchanged sentence

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 1. Financial Statements