What changed in this filing

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Item 1. Financial Statements

2024-06-05 compared with 2024-03-06 · 132 added, 109 removed, 630 unchanged (28% of the section changed)

35 unchanged sentences

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

61.9 shares issued and 59.4 shares outstanding at January 27, 2024;

62.0 shares issued and 59.5 shares outstanding at April 27, 2024;

61.0 shares issued and 58.5 shares outstanding at July 29, 2023

14 unchanged sentences

13-Week Period Ended 39-Week Period Ended

2024 January 28,

2023 January 27,

2024 January 28,

2024 April 29,

2023 April 27,

2024 April 29,

Net sales $ 7,498 $ 7,507 $ 22,825 $ 22,855

2 unchanged sentences

Operating expenses 992 967 3,025 2,969

Restructuring, acquisition and integration related expenses 4 3 8 5

Loss (gain) on sale of assets and other asset charges 5 1 24 ( 4 )

Restructuring, acquisition and integration related expenses (benefits) 9 ( 4 ) 17 1

Loss on sale of assets and other asset charges 13 4 37 —

Operating income 6 33 6 195

21 unchanged sentences

13-Week Period Ended 39-Week Period Ended

2024 January 28,

2023 January 27,

2024 January 28,

2024 April 29,

2023 April 27,

2024 April 29,

Net (loss) income including noncontrolling interests $ ( 20 ) $ 8 $ ( 73 ) $ 97

Other comprehensive (loss) income:

Other comprehensive income (loss):

Recognition of pension and other postretirement benefit obligations, net of tax — — 1 1

4 unchanged sentences

— ( 2 ) — ( 4 )

Total other comprehensive (loss) income ( 2 ) ( 4 ) ( 7 ) 11

Total other comprehensive income (loss) 2 ( 6 ) ( 5 ) 5

Less comprehensive income attributable to noncontrolling interests ( 1 ) ( 1 ) ( 2 ) ( 5 )

1 unchanged sentence

$ ( 19 ) $ 1 $ ( 80 ) $ 97

(1) Amounts are net of tax (benefit) expense of $( 1 ) million and $( 1 ) million for the second quarters of fiscal 2024 and 2023, respectively, and $( 2 ) million and $ 5 million for fiscal 2024 and 2023 year-to-date, respectively.

(2) Amounts are net of tax (benefit) expense of $ 0 million and $( 1 ) million for the second quarters of fiscal 2024 and 2023, respectively, and $ 0 million and $( 1 ) million for fiscal 2024 and 2023 year-to-date, respectively.

(1) Amounts are net of tax expense (benefit) of $ 1 million and $( 1 ) million for the third quarters of fiscal 2024 and 2023, respectively, and $( 1 ) million and $ 4 million for fiscal 2024 and 2023 year-to-date, respectively.

(2) Amounts are net of tax expense (benefit) of $ 0 million and $ 0 million for the third quarters of fiscal 2024 and 2023, respectively, and $ 0 million and $( 1 ) million for fiscal 2024 and 2023 year-to-date, 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 27, 2024 and January 28, 2023

For the 13-week periods ended April 27, 2024 and April 29, 2023

(in millions)

4 unchanged sentences

Shares Amount Shares Amount

Balances at October 28, 2023 61.9 $ 1 2.5 $ ( 86 ) $ 606 $ ( 33 ) $ 1,211 $ 1,699 $ — $ 1,699

Balances at January 27, 2024 61.9 $ 1 2.5 $ ( 86 ) $ 616 $ ( 35 ) $ 1,196 $ 1,692 $ — $ 1,692

Restricted stock vestings 0.1 — — — — — — — — —

Share-based compensation — — — — 11 — — 11 — 11

Other comprehensive loss — — — — — ( 2 ) — ( 2 ) — ( 2 )

Other comprehensive income — — — — — 2 — 2 — 2

Acquisition of noncontrolling interests — — — — ( 3 ) — — ( 3 ) 1 ( 2 )

Distributions to noncontrolling interests — — — — — — — — ( 2 ) ( 2 )

Net (loss) income — — — — — — ( 21 ) ( 21 ) 1 ( 20 )

Balances at April 27, 2024 62.0 $ 1 2.5 $ ( 86 ) $ 624 $ ( 33 ) $ 1,175 $ 1,681 $ — $ 1,681

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

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 )

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 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

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 27, 2024 and January 28, 2023

For the 39-week periods ended April 27, 2024 and April 29, 2023

(in millions)

8 unchanged sentences

Other comprehensive loss — — — — — ( 5 ) — ( 5 ) — ( 5 )

Acquisition of noncontrolling interests — — — — ( 3 ) — — ( 3 ) 1 ( 2 )

Distributions to noncontrolling interests — — — — — — — — ( 4 ) ( 4 )

Net (loss) income — — — — — — ( 75 ) ( 75 ) 2 ( 73 )

Balances at January 27, 2024 61.9 $ 1 2.5 $ ( 86 ) $ 616 $ ( 35 ) $ 1,196 $ 1,692 $ — $ 1,692

Balances at April 27, 2024 62.0 $ 1 2.5 $ ( 86 ) $ 624 $ ( 33 ) $ 1,175 $ 1,681 $ — $ 1,681

Balances at July 30, 2022 58.9 $ 1 0.6 $ ( 24 ) $ 608 $ ( 20 ) $ 1,226 $ 1,791 $ 1 $ 1,792

5 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

See accompanying Notes to Condensed Consolidated Financial Statements.

3 unchanged sentences

39-Week Period Ended

(in millions) January 27,

2024 January 28,

(in millions) April 27,

2024 April 29,

CASH FLOWS FROM OPERATING ACTIVITIES:

Net (loss) income including noncontrolling interests $ ( 73 ) $ 97

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

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

Depreciation and amortization 228 224

8 unchanged sentences

Changes in operating assets and liabilities ( 165 ) ( 15 )

Net cash (used in) provided by operating activities

Net cash provided by operating activities

CASH FLOWS FROM INVESTING ACTIVITIES:

16 unchanged sentences

EFFECT OF EXCHANGE RATE ON CASH — —

NET DECREASE IN CASH AND CASH EQUIVALENTS ( 3 ) ( 4 )

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 2 ( 6 )

Cash and cash equivalents, at beginning of period 37 44

2 unchanged sentences

Cash paid for interest $ 118 $ 114

Cash (refunds) payments for federal, state, and foreign income taxes, net $ ( 13 ) $ 3

Cash refunds for federal, state, and foreign income taxes, net $ ( 10 ) $ ( 4 )

Leased assets obtained in exchange for new operating lease liabilities $ 317 $ 198

Leased assets obtained in exchange for new finance lease liabilities $ 6 $ —

Additions of property and equipment included in Accounts payable $ 29 $ 42

10 unchanged sentences

Fiscal 2024 will contain 53 weeks with the fourth quarter of fiscal 2024 containing 14 weeks.

References to the second quarter of fiscal 2024 and 2023 relate to the 13-week fiscal quarters ended January 27, 2024 and January 28, 2023, respectively.

References to fiscal 2024 and 2023 year-to-date relate to the 26-week fiscal periods ended January 27, 2024 and January 28, 2023, respectively.

References to the third quarter of fiscal 2024 and 2023 relate to the 13-week fiscal quarters ended April 27, 2024 and April 29, 2023, respectively.

References to fiscal 2024 and 2023 year-to-date relate to the 39-week fiscal periods ended April 27, 2024 and April 29, 2023, respectively.

Basis of Presentation

18 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 27, 2024 and July 29, 2023, the Company had net book overdrafts of $ 283 million and $ 308 million, respectively.

As of April 27, 2024 and July 29, 2023, the Company had net book overdrafts of $ 287 million and $ 308 million, respectively.

Inventories, Net

4 unchanged sentences

Allowances for inventory shortages are recorded based on the results of these counts.

The LIFO reserve was approximately $ 357 million and $ 344 million as of January 27, 2024 and July 29, 2023, respectively, which is recorded within Inventories, net on the Condensed Consolidated Balance Sheets.

The LIFO reserve was approximately $ 363 million and $ 344 million as of April 27, 2024 and July 29, 2023, respectively, which is recorded within Inventories, net on the Condensed Consolidated Balance Sheets.

NOTE 2—RECENTLY ADOPTED AND ISSUED ACCOUNTING PRONOUNCEMENTS

34 unchanged sentences

Net Sales for the 13-Week Period Ended

(in millions) January 27, 2024

(in millions) April 27, 2024

Customer Channel Wholesale Retail Other Eliminations (1)

7 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 39-Week Period Ended

(in millions) January 27, 2024

(in millions) April 27, 2024

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)

12 unchanged sentences

Accounts and notes receivable are as follows:

(in millions) January 27, 2024 July 29, 2023

(in millions) April 27, 2024 July 29, 2023

Customer accounts receivable $ 958 $ 887

5 unchanged sentences

In fiscal 2023, the Company entered into an agreement to sell, on a revolving basis, certain customer accounts receivable to a third-party financial institution.

Accounts receivable that the Company is servicing on behalf of the financial institution, which would have otherwise been outstanding as of January 27, 2024 and July 29, 2023, was approximately $ 333 million and $ 310 million, respectively.

Accounts receivable that the Company is servicing on behalf of the financial institution, which would have otherwise been outstanding as of April 27, 2024 and July 29, 2023, was approximately $ 342 million and $ 310 million, respectively.

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

The loss on sale of receivables was $ 5 million for the second quarters of fiscal 2024 and 2023, and $ 10 million and $ 5 million for fiscal 2024 and 2023 year-to-date, respectively, and is recorded within Loss (gain) on sale of assets and other asset charges in the Condensed Consolidated Statements of Operations.

The loss on sale of receivables was $ 6 million and $ 4 million for the third quarters of fiscal 2024 and 2023, respectively, and $ 16 million and $ 9 million for fiscal 2024 and 2023 year-to-date, respectively, and is recorded within Loss on sale of assets and other asset charges in the Condensed Consolidated Statements of Operations.

NOTE 4—PROPERTY AND EQUIPMENT, NET

2 unchanged sentences

The fair value utilized in the Company’s impairment review was determined based on the market approach.

The impairment charge is recorded within Loss (gain) on sale of assets and other asset charges in the Condensed Consolidated Statements of Operations.

There were no asset impairment charges recorded in the second quarter of fiscal 2024 and for fiscal 2023 year-to-date.

The impairment charge is recorded within Loss on sale of assets and other asset charges in the Condensed Consolidated Statements of Operations.

In the third quarter of fiscal 2024, the Company entered into an agreement to sell certain long-lived assets related to this corporate-owned office location, which is expected to close in the fourth quarter of fiscal 2024.

As a result, assets related to this location totaling $ 8 million are classified as held for sale within Prepaid expenses and other current assets in the Condensed Consolidated Balance Sheets as of April 27, 2024.

During the third quarter of fiscal 2024, the Company recorded a $ 7 million non-cash asset impairment charge related to the decision to close certain retail store locations.

The impairment charge is recorded within Loss on sale of assets and other asset charges in the Condensed Consolidated Statements of Operations.

There were no asset impairment charges recorded for fiscal 2023 year-to-date.

NOTE 5—GOODWILL AND INTANGIBLE ASSETS, NET

3 unchanged sentences

Change in foreign exchange rates — — —

Goodwill as of January 27, 2024

(1) Wholesale amounts are net of accumulated goodwill impairment charges of $ 717 million as of July 29, 2023 and January 27, 2024.

(2) Other amounts are net of accumulated goodwill impairment charges of $ 10 million as of July 29, 2023 and January 27, 2024.

Goodwill as of April 27, 2024

(1) Wholesale amounts are net of accumulated goodwill impairment charges of $ 717 million as of July 29, 2023 and April 27, 2024.

(2) Other amounts are net of accumulated goodwill impairment charges of $ 10 million as of July 29, 2023 and April 27, 2024.

Identifiable intangible assets, net consisted of the following:

January 27, 2024 July 29, 2023

April 27, 2024 July 29, 2023

(in millions) Gross Carrying

12 unchanged sentences

Intangibles assets, net $ 1,159 $ 491 $ 668 $ 1,160 $ 438 $ 722

Amortization expense was $ 18 million for the second quarters of fiscal 2024 and 2023, respectively, and $ 36 million for fiscal 2024 and 2023 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 27, 2024 is as shown below:

Amortization expense was $ 17 million and $ 18 million for the third quarters of fiscal 2024 and 2023, respectively, and $ 53 million and $ 54 million for fiscal 2024 and 2023 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 27, 2024 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 27, 2024

Condensed Consolidated Balance Sheets Location Fair Value at April 27, 2024

(in millions) Level 1 Level 2 Level 3

2 unchanged sentences

Fuel derivatives designated as hedging instruments Accrued expenses and other current liabilities $ — $ 1 $ —

Interest rate swaps designated as hedging instruments Other long-term liabilities $ — $ 1 $ —

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

5 unchanged sentences

The fair values of interest rate swap contracts are measured using Level 2 inputs.

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 27, 2024, a 100-basis point increase in forward SOFR interest rates would increase the fair value of the interest rate swaps by approximately $ 11 million;

The interest rate swap contracts are valued using an income approach interest rate swap valuation model incorporating observable market inputs including interest rates, Secured Overnight Financing Rate (“SOFR”) swap rates and credit default swap rates.

As of April 27, 2024, a 100-basis point increase in forward SOFR interest rates would increase the fair value of the interest rate swaps by approximately $ 9 million;

a 100-basis point decrease in forward SOFR interest rates would decrease the fair value of the interest rate swaps by approximately $ 9 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 27, 2024 July 29, 2023

April 27, 2024 July 29, 2023

(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 27, 2024.

The Company’s interest rate swap contracts are designated as cash flow hedges as of April 27, 2024.

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

Refer to Note 6—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 27, 2024, which are all pay fixed and receive floating, are as follows:

Details of active swap contracts as of April 27, 2024, 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

January 11, 2019 March 28, 2024 100 2.3600 % One-Month Term SOFR Monthly

January 23, 2019 March 28, 2024 100 2.4250 % One-Month Term SOFR Monthly

November 30, 2018 October 31, 2024 100 2.7385 % One-Month Term SOFR Monthly

14 unchanged sentences

13-Week Period Ended 39-Week Period Ended

January 27, 2024 January 28, 2023 January 27, 2024 January 28, 2023

April 27, 2024 April 29, 2023 April 27, 2024 April 29, 2023

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

6 unchanged sentences

(in millions) Average Interest Rate at

January 27, 2024

Fiscal Maturity Year January 27,

April 27, 2024

Fiscal Maturity Year April 27,

2024 July 29,

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 $ 6 million as of January 27, 2024 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 $ 6 million as of April 27, 2024 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

10 unchanged sentences

The assets included in the Condensed Consolidated Balance Sheets securing the outstanding obligations under the ABL Credit Facility on a first-priority basis were as follows:

(in millions) January 27,

(in millions) April 27,

2024 July 29,

3 unchanged sentences

Total $ 2,398 $ 2,443

As of January 27, 2024, the Borrowers’ Borrowing Base was $ 2,606 million, reflecting the advance rates described above and $ 105 million of reserves, which is above the $ 2,600 million limit of availability.

As of April 27, 2024, the Borrowers’ Borrowing Base was $ 2,427 million, reflecting the advance rates described above and $ 95 million of reserves, which is below the $ 2,600 million limit of availability.

This resulted in total availability of $ 2,427 million for loans and letters of credit under the ABL Credit Facility.

The Company’s unused credit under the ABL Credit Facility was as follows:

(in millions) January 27, 2024

(in millions) April 27, 2024

Total availability for ABL loans and letters of credit $ 2,427

3 unchanged sentences

The applicable interest rates, unutilized commitment fees and letter of credit fees under the ABL Credit Facility are variable and are dependent upon the prior fiscal quarter’s daily Average Availability (as defined in the ABL Loan Agreement), and were as follows:

Range of Facility Rates and Fees (per annum) January 27, 2024

Range of Facility Rates and Fees (per annum) April 27, 2024

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

4 unchanged sentences

Borrower utilizes SOFR-based loans and the Canadian Borrower utilizes bankers’ acceptance rate-based loans.

Subsequent to the end of the third quarter of fiscal 2024, the Company entered into an amendment to the ABL Loan Agreement.

Refer to Note 16—Subsequent Events for additional information.

Term Loan Facility

The term loan agreement dated as of October 22, 2018 (as amended, the “Term Loan Agreement”), by and among the Company and SUPERVALU INC.

(“Supervalu” and, collectively with the Company, the “Term Borrowers”), the financial institutions that are parties thereto as lenders (collectively, the “Term Lenders”), Credit Suisse, as administrative agent for the Term Lenders, and the other parties thereto, provides for a $ 1,800 million senior secured first lien term loan (the “Term Loan Facility”).

(“Supervalu” and, collectively with the Company, the “Initial Term Borrowers”), the financial institutions that are parties thereto as lenders (collectively, the “Term Lenders”), Credit Suisse, as administrative agent for the Term Lenders, and the other parties thereto, provides for a $ 1,800 million senior secured first lien term loan (the “Term Loan Facility”).

The net proceeds from the Term Loan Facility were used to finance the Supervalu acquisition and related transaction costs.

Any amounts then outstanding will be payable in full on October 22, 2025.

Any amounts then outstanding were to be payable in full on October 22, 2025.

The obligations under the Term Loan Facility are guaranteed by the Guarantors, subject to customary exceptions and limitations.

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 27, 2024 and July 29, 2023, there was $ 608 million and $ 617 million, respectively, of owned real property pledged as collateral that was included in Property and equipment, net in the Condensed Consolidated Balance Sheets.

The Initial 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 Initial Term Borrowers’ and the Guarantors’ assets other than the ABL Assets and (ii) a second-priority lien on substantially all of the Initial 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 or equal to $ 10 million.

As of April 27, 2024 and July 29, 2023, there was $ 604 million and $ 617 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.

The potential amount of prepayment from Excess Cash Flow in fiscal 2024 that may be required in fiscal 2025 is not reasonably estimable as of January 27, 2024.

As of January 27, 2024, the Company had borrowings of $ 645 million outstanding under the Term Loan Facility, which are presented in the Condensed Consolidated Balance Sheets net of debt issuance costs of $ 5 million and an original issue discount on debt of $ 5 million.

As of January 27, 2024, no amount of the Term Loan Facility was classified as current.

As of January 27, 2024, the borrowings under the Term Loan Facility bear interest at rates that, at the Term Borrowers’ option, can be either:

The potential amount of prepayment from Excess Cash Flow in fiscal 2024 that may be required in fiscal 2025 is not reasonably estimable as of April 27, 2024.

As of April 27, 2024, the Company had borrowings of $ 645 million outstanding under the Term Loan Facility, which are presented in the Condensed Consolidated Balance Sheets net of debt issuance costs of $ 7 million and an original issue discount on debt of $ 4 million.

As of April 27, 2024, no amount of the Term Loan Facility was classified as current.

As of April 27, 2024, the borrowings under the Term Loan Facility bear interest at rates that, at the Term Borrowers’ option, can be either:

(i) a base rate plus a margin of 2.25 % or (ii) a SOFR rate plus a margin of 3.25 %, provided that the SOFR rate shall never be less than 0.0 %.

Subsequent to the end of the third quarter of fiscal 2024, the Company entered into an amendment further amending the Term Loan Agreement.

Refer to Note 16—Subsequent Events for additional information.

NOTE 9—COMPREHENSIVE (LOSS) INCOME AND ACCUMULATED OTHER COMPREHENSIVE LOSS

2 unchanged sentences

Accumulated other comprehensive (loss) income at July 29, 2023 $ — $ ( 21 ) $ ( 21 ) $ 14 $ ( 28 )

Other comprehensive loss before reclassifications — — ( 1 ) — ( 1 )

Other comprehensive income (loss) before reclassifications 1 — ( 2 ) 7 6

Amortization of amounts included in net periodic benefit income — 1 — — 1

1 unchanged sentence

Net current period Other comprehensive income (loss) — 1 ( 2 ) ( 4 ) ( 5 )

Accumulated other comprehensive (loss) income at January 27, 2024 $ — $ ( 20 ) $ ( 22 ) $ 7 $ ( 35 )

Accumulated other comprehensive (loss) income at April 27, 2024 $ — $ ( 20 ) $ ( 23 ) $ 10 $ ( 33 )

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 )

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

Items reclassified out of Accumulated other comprehensive loss 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 27,

2024 January 28,

2023 January 27,

2024 January 28,

(in millions) April 27,

2024 April 29,

2023 April 27,

2024 April 29,

Pension and postretirement benefit plan net assets:

1 unchanged sentence

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

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

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

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

8 unchanged sentences

(1) Reclassification of amounts included in net periodic benefit income include reclassification of prior service cost as reflected in Note 11—Benefit Plans.

As of January 27, 2024, the Company expects to reclassify $ 11 million related to unrealized derivative gains out of Accumulated other comprehensive loss and primarily into Interest expense, net during the following twelve-month period.

As of April 27, 2024, the Company expects to reclassify $ 11 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 10—SHARE-BASED AWARDS

In fiscal 2024 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 3.4 million shares.

As of January 27, 2024, there were 1.7 million shares available for issuance under the Third Amended and Restated 2020 Equity Incentive Plan.

As of April 27, 2024, there were 1.8 million shares available for issuance under the Third Amended and Restated 2020 Equity Incentive Plan.

NOTE 11—BENEFIT PLANS

2 unchanged sentences

Pension Benefits Other Postretirement Benefits

(in millions) January 27, 2024 January 28, 2023 January 27, 2024 January 28, 2023

(in millions) April 27, 2024 April 29, 2023 April 27, 2024 April 29, 2023

Interest cost $ 18 $ 16 $ — $ —

5 unchanged sentences

Pension Benefits Other Postretirement Benefits

(in millions) January 27, 2024 January 28, 2023 January 27, 2024 January 28, 2023

(in millions) April 27, 2024 April 29, 2023 April 27, 2024 April 29, 2023

Interest cost $ 55 $ 48 $ — $ —

8 unchanged sentences

Multiemployer Pension Plans

The Company contributed $ 13 million and $ 12 million in the second quarters of fiscal 2024 and 2023, respectively, and $ 26 million and $ 23 million in fiscal 2024 and 2023 year-to-date, respectively, to multiemployer pension plans, which contributions are included within Operating expenses.

The Company contributed $ 12 million and $ 13 million in the third quarters of fiscal 2024 and 2023, respectively, and $ 38 million and $ 36 million in fiscal 2024 and 2023 year-to-date, respectively, to multiemployer pension plans, which contributions are included within Operating expenses.

NOTE 12—INCOME TAXES

The effective tax rate for the second quarter of fiscal 2024 was a benefit rate of 26.3 % on pre-tax loss compared to an expense rate of 29.0 % on pre-tax income for the second quarter of fiscal 2023.

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

The effective tax rate for the third quarter of fiscal 2024 was a benefit rate of 23.1 % on pre-tax loss compared to a benefit rate of 14.3 % on pre-tax income for the third quarter of fiscal 2023.

The change from the third quarter of fiscal 2023 is 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 2024 year-to-date was a benefit rate of 21.5 % on pre-tax loss compared to an expense rate of 11.8 % on pre-tax income for fiscal 2023 year-to-date.

The change from fiscal 2023 year-to-date is primarily driven by the reduction of discrete tax benefits related to employee stock award vestings in the first quarter of fiscal 2024.

In addition, the first quarter of fiscal 2023 included a tax benefit from the release of reserves for unrecognized tax positions that did not recur in the first quarter of fiscal 2024.

The primary drivers for the variation between the Company’s statutory tax rate and its effective tax rate for fiscal 2024 and fiscal 2023 year-to-date were discrete tax detriments and benefits, respectively, resulting from share award vestings.

In addition, the first quarter of fiscal 2023 included a tax benefit from the release of reserves for unrecognized tax positions, while the third quarter of fiscal 2024 included a tax expense for the establishment of reserves for unrecognized tax positions.

NOTE 13—EARNINGS PER SHARE

1 unchanged sentence

13-Week Period Ended 39-Week Period Ended

(in millions, except per share data) January 27,

2024 January 28,

2023 January 27,

2024 January 28,

(in millions, except per share data) April 27,

2024 April 29,

2023 April 27,

2024 April 29,

Basic weighted average shares outstanding 59.4 59.4 59.2 59.3

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13-Week Period Ended 39-Week Period Ended

(in millions) January 27, 2024 January 28, 2023 January 27, 2024 January 28, 2023

(in millions) April 27, 2024 April 29, 2023 April 27, 2024 April 29, 2023

Wholesale (1)

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LIFO charge ( 6 ) ( 33 ) ( 19 ) ( 83 )

Restructuring, acquisition and integration related expenses ( 4 ) ( 3 ) ( 8 ) ( 5 )

(Loss) gain on sale of assets and other asset charges ( 5 ) ( 1 ) ( 24 ) 4

Restructuring, acquisition and integration related (expenses) benefits ( 9 ) 4 ( 17 ) ( 1 )

Loss on sale of assets and other asset charges ( 13 ) ( 4 ) ( 37 ) —

Business transformation costs

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Total capital expenditures $ 76 $ 67 $ 217 $ 218

(1) As presented in Note 3—Revenue Recognition, the Company recorded $ 330 million and $ 353 million for the second quarters of fiscal 2024 and 2023, respectively, and $ 651 million and $ 687 million in fiscal 2024 and 2023 year-to-date, respectively, within Net sales in its Wholesale reportable segment attributable to Wholesale to Retail sales that have been eliminated upon consolidation.

(1) As presented in Note 3—Revenue Recognition, the Company recorded $ 300 million and $ 319 million for the third quarters of fiscal 2024 and 2023, respectively, and $ 951 million and $ 1,006 million in fiscal 2024 and 2023 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 27, 2024 July 29, 2023

(in millions) April 27, 2024 July 29, 2023

Wholesale $ 6,635 $ 6,405

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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 27, 2024.

The Company has outstanding guarantees related to certain leases, fixture financing loans and other debt obligations of various retailers as of April 27, 2024.

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

The guarantees are generally for the entire terms of the leases, fixture financing loans or other debt obligations with remaining terms that range from less than one year to seven years , with a weighted average remaining term of approximately four years .

The guarantees are generally for the entire terms of the leases, fixture financing loans or other debt obligations with remaining terms that range from less than one year to six years , with a weighted average remaining term of approximately four years .

For each guarantee issued, if the wholesale customer or other third-party defaults on a payment, the Company would be required to make payments under its guarantee.

1 unchanged sentence

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

As of January 27, 2024, the maximum amount of undiscounted payments the Company would be required to make in the event of default of all guarantees was $ 11 million ($ 9 million on a discounted basis).

Based on the indemnification agreements, personal guarantees and results of the reviews of performance risk, as of January 27, 2024, a total estimated loss of less than $ 1 million is recorded in the Condensed Consolidated Balance Sheets.

As of April 27, 2024, the maximum amount of undiscounted payments the Company would be required to make in the event of default of all guarantees was $ 10 million ($ 8 million on a discounted basis).

Based on the indemnification agreements, personal guarantees and results of the reviews of performance risk, as of April 27, 2024, a total estimated loss of less than $ 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.

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

As of January 27, 2024, the Company had approximately $ 657 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 27, 2024, the Company had commitments of $ 323 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 27, 2024, the Company had approximately $ 577 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 27, 2024, the Company had commitments of $ 336 million for future undiscounted minimum lease payments on leases signed but not yet commenced with terms of up to 21 years from commencement date.

A lease agreement for a facility in Manchester, Pennsylvania entered into in fiscal 2023 commenced in the second quarter of fiscal 2024 resulting in the recognition of a $ 205 million right-of-use asset and operating lease liability in the Condensed Consolidated Balance Sheets.

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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.

On May 19, 2023, the Company provided an initial production in response to the subpoena and is in the process of gathering additional responsive documents.

On May 19, 2023, the Company provided an initial production in response to the subpoena and is waiting for further direction from the Maryland Attorney General on additional documents requested.

At an April 24, 2024 status conference, the MDL Court directed that the plaintiffs and non-litigating defendants, which includes the Company, determine whether the cases will be dismissed, litigated or mediated by the next status conference on June 10, 2024.

The Company believes these claims are without merit and intends to vigorously defend this matter.

32 unchanged sentences

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 which was denied on December 3, 2021.

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.

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.

2 unchanged sentences

On October 11, 2023, each of the Company and the relators filed a motion for summary judgment.

Briefing is complete and oral argument is scheduled for May 20, 2024.

On February 16, 2024, the defendants filed a motion to reconsider the Court’s August 5, 2019 partial grant of summary judgment to the relators and to continue the trial date.

On February 27, 2024, the Court granted the defendants’ motion for a trial date continuance and vacated the April 29, 2024 trial date.

On April 26, 2024, the Court denied the defendants’ motion to reconsider the partial grant of summary judgment.

On May 20, 2024, the District Court heard oral argument on the pending motions for summary judgment.

The trial is now scheduled to begin September 30, 2024.

9 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 27, 2024, no material accrued obligations, individually or in the aggregate, have been recorded for these legal proceedings.

As of April 27, 2024, 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.

The occurrence of any of the foregoing could have a material adverse effect on the Company’s financial condition, results of operations or cash flows.

NOTE 16—SUBSEQUENT EVENTS

On May 1, 2024, the Company entered into an amendment (the “First ABL Amendment”) to the ABL Loan Agreement.

The First ABL Amendment provides for (i) the creation of a First In, Last Out (“FILO”) tranche of incremental loans of $ 130 million under the ABL Loan Agreement (the “ABL FILO Loan”) with an Applicable Margin (as defined in the ABL Loan Agreement) equal to SOFR plus 2.50 % per annum (or a base rate plus 1.5 % per annum), (ii) the removal of the obligation of the Canadian Obligors (as defined in the ABL Loan Agreement) to provide credit support for U.S.

Revolver Loans (as defined in the ABL Loan Agreement) and (iii) other administrative changes.

The ABL FILO Loan is subject to a borrowing base which is based on 5 % of eligible accounts receivable, plus 5 % of eligible credit card receivables, plus 5 % of the net orderly liquidation value of eligible inventory, plus 5 % of the value of eligible pharmacy receivables of each U.S.

Obligor (as defined in the ABL Loan Agreement).

On May 1, 2024, the $ 130 million of ABL FILO Loan proceeds were used to make a voluntary prepayment on the Term Loan Facility as further described below.

On May 1, 2024, the Company entered into an amendment (the “Fourth Term Loan Amendment”) further amending the Term Loan Agreement.

The Fourth Term Loan Amendment provides for the refinancing of the existing term loans that resulted in (i) the reduction of the principal amount of the Term Loan Facility to $ 500 million, (ii) the extension of the maturity to May 1, 2031 (but with a springing maturity to (a) the date 91 days prior to the expiration of the Company’s distribution contract with Whole Foods Market Distribution, Inc.

(“Whole Foods Market”) if such agreement shall not have been extended beyond the term of the Term Loan Facility, and (b) 91 days prior to the maturity of the Senior Notes, in the event that at least $ 100 million in principal amount outstanding of such Senior Notes remains outstanding on such date), (iii) a change in the applicable margin over (a) a base rate from 2.25 % to 3.75 % per annum, or (b) a SOFR rate from 3.25 % to 4.75 % per annum, (iv) the appointment of JPMorgan Chase Bank, N.A., as replacement administrative and collateral agent, (v) the addition of UNFI Wholesale, Inc.

(“UNFI Wholesale”) and UNFI Distribution Company, LLC (“UNFI Distribution”) as co-borrowers (the Company, UNFI Wholesale, UNFI Distribution, and Supervalu collectively, the “Term Borrowers”), and (vi) other administrative changes.

In conjunction with the Fourth Term Loan Amendment, the Company made a voluntary prepayment of $ 145 million on the Term Loan Facility funded with the $ 130 million of ABL FILO Loan proceeds (described above) and incremental borrowings under the ABL Credit Facility.

In connection with the Fourth Term Loan Amendment and prepayment, the Company expects to incur a loss on debt extinguishment of $ 10 million in the fourth quarter of fiscal 2024 related to unamortized debt issuance costs and a loss on unamortized original issue discount.

On May 21, 2024, the Company entered into an amended and restated distribution agreement with Whole Foods Market, which, among other things, extended the term of the agreement from September 27, 2027 to May 20, 2032, and which satisfies the extension requirement in the Term Loan Agreement.

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