What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-05-07 compared with 2025-11-06 · 60 added, 108 removed, 200 unchanged (46% of the section changed)

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Information regarding reconciliations of and the rationale for these measures is discussed under “Non-GAAP Reconciliations” below.

Results of operations for the 13 weeks and 39 weeks ended September 27, 2025 are compared to the 13 weeks and 39 weeks ended September 28, 2024, unless specifically noted otherwise.

Results of operations for the 13 weeks ended March 28, 2026 are compared to the 13 weeks ended March 29, 2025, unless specifically noted otherwise.

At US Foods, we strive to inspire and empower chefs and foodservice operators to bring great food experiences to consumers.

This mission is supported by our brand promise of WE HELP YOU MAKE IT™.

This mission is supported by our strategy of WE HELP YOU MAKE IT ® .

Our Promise brings three key elements to the forefront for our customers;

(1) more quality products, like our large and diverse Exclusive Brand portfolio that is based on consistency, freshness and innovation, (2) more tools, centering on our best-in-industry ecommerce platform, MOXē, and (3) more deliveries, with expanded options for on-time delivery enabled by our traditional broadline services and our convenient and flexible Pronto™ program.

(1) more quality products, like our large and diverse portfolio of Exclusive Brands that is based on consistency, freshness and innovation, (2) more tools, centering on our MOXē ® business platform, and lastly, (3) more deliveries, with options for on-time deliveries enabled by our traditional broadline services and our flexible and convenient Pronto ® program.

We operate as one business with standardized business processes, shared systems infrastructure, and an organizational model that optimizes national scale with local execution, allowing us to manage our business as a single operating segment.

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We supply approximately 250,000 customer locations nationwide.

These customer locations include independent restaurants, chain restaurants, healthcare, hospitality, education and other customers.

These customer locations include independent restaurants, chain restaurants, healthcare, hospitality, government and education customers.

We provide fresh, frozen, and dry food products, as well as non-food items, sourced from thousands of suppliers.

Approximately 4,000 sales associates manage customer relationships at local, regional, and national levels.

Our sales associates are supported by sophisticated marketing and category management capabilities, as well as world-class chefs, new business development managers and others that help us provide more comprehensive service to our customers.

Over 4,000 sales associates manage customer relationships at local, regional, and national levels.

Our sales associates are supported by sophisticated marketing and category management capabilities, as well as world-class chefs, business development managers and others that help us to provide more comprehensive service to our customers.

Our relationship with our customers is further strengthened by our industry-leading MOXē ® digital platform that makes it easy for our customers to manage their orders and inventories, while also providing valuable support for their business.

Our extensive network of over 70 distribution facilities and fleet of over 6,500 trucks, along with over 90 cash and carry locations, allow us to operate efficiently and provide high levels of customer service.

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Organic growth —Organic growth includes growth from operating businesses that have been reflected in our results of operations for at least 12 months.

For the 13 weeks ended September 27, 2025, compared to the same period a year ago, total case volume increased 1.1%, driven by a 3.9% increase in independent restaurant case volume, a 3.9% increase in healthcare volume and a 2.4% increase in hospitality volume, partially offset by a 2.4% decrease in chain volume.

For the 39 weeks ended September 27, 2025, compared to the same period a year ago, total case volume increased 1.0%, driven by a 3.0% increase in independent restaurant case volume, a 4.9% increase in healthcare volume and a 2.8% increase in hospitality volume, partially offset by a 3.6% decrease in chain volume.

For the 13 weeks and 39 weeks ended September 27, 2025, compared to the same period a year ago, total organic case volume increased 0.8% and 0.5%, respectively, which includes 3.5% and 2.4% organic independent restaurant case volume growth for the 13 weeks and 39 weeks ended September 27, 2025, respectively.

Net sales increased $463 million, or 4.8%, and $1,238 million, or 4.4%, for the 13 weeks and 39 weeks ended September 27, 2025, respectively, driven by case volume growth and food cost inflation of 3.0% and 2.8% for the 13 weeks and 39 weeks ended September 27, 2025, respectively.

Gross profit increased $86 million, or 5.2%, to $1,753 million for the 13 weeks ended September 27, 2025, and increased $276 million or 5.7%, to $5,144 million for the 39 weeks ended September 27, 2025.

For the 13 weeks ended September 27, 2025 the increase was primarily a result of an increase in total case volume, improved cost of goods sold and inventory management, partially offset by an unfavorable year-over-year LIFO adjustment.

For the 39 weeks ended September 27, 2025, the increase was primarily a result of an increase in total case volume, improved cost of goods sold, inventory management and a favorable year-over-year LIFO adjustment.

Gross profit was negatively impacted by LIFO expense of $46 million and $65 million for the 13 weeks and 39 weeks ended September 27, 2025, respectively.

Gross profit was negatively impacted by LIFO expense of $23 million and $68 million for the 13 weeks and 39 weeks ended September 28, 2024.

As a percentage of net sales, gross profit was 17.2% and 17.1% for the 13 weeks ended September 27, 2025, and September 28, 2024, and 17.4% and 17.1% for the 39 weeks ended September 27, 2025, and September 28, 2024, respectively.

Total operating expenses increased $83 million, or 6.0%, to $1,471 million for the 13 weeks ended September 27, 2025, and increased $195 million, or 4.8%, to $4,266 million for the 39 weeks ended September 27, 2025.

For the 13 weeks and 39 weeks ended September 27, 2025, the increase was primarily a result of an increase in total case volume and higher distribution, selling and administrative costs, partially offset by continued distribution productivity improvement as well as actions to streamline administrative processes and costs.

As a percentage of net sales, operating expenses were 14.4% and 14.3% for the 13 weeks ended September 27, 2025 and September 28, 2024, respectively, and 14.4% and 14.3% for the 39 weeks ended September 27, 2025 and September 28, 2024, respectively.

For the 13 weeks ended March 28, 2026, compared to the same period a year ago, total case volume increased 1.4%, driven by a 4.6% increase in independent restaurant case volume, a 3.7% increase in healthcare volume and a 5.0% increase in hospitality volume, partially offset by a 2.3% decrease in chain volume.

For the 13 weeks ended March 28, 2026, compared to the same period a year ago, total organic case volume increased 1.1%, which includes 4.4% organic independent restaurant case volume growth for the 13 weeks ended March 28, 2026.

Net sales increased $259 million, or 2.8%, for the 13 weeks ended March 28, 2026, driven by case volume growth and food cost inflation of 1.0% for the 13 weeks ended March 28, 2026.

Gross profit increased $39 million, or 2.4%, to $1,653 million for the 13 weeks ended March 28, 2026.

For the 13 weeks ended March 28, 2026, the increase was primarily a result of an increase in total case volume and improved cost of goods sold, partially offset by an unfavorable year-over-year LIFO adjustment.

Gross profit was negatively impacted by LIFO expense of $38 million for the 13 weeks ended March 28, 2026.

Gross profit was negatively impacted by LIFO expense of $5 million for the 13 weeks ended March 29, 2025.

As a percentage of net sales, gross profit was 17.2% and 17.3% for the 13 weeks ended March 28, 2026, and March 29, 2025, respectively.

Total operating expenses increased $47 million, or 3.4%, to $1,437 million for the 13 weeks ended March 28, 2026.

For the 13 weeks ended March 28, 2026, the increase was primarily a result of an increase in total case volume and higher distribution, selling and administrative costs, partially offset by continued distribution productivity improvement as well as actions to streamline administrative processes and costs.

As a percentage of net sales, operating expenses were 15.0% and 14.9% for the 13 weeks ended March 28, 2026 and March 29, 2025, respectively.

Results of Operations

The following table presents selected historical results of operations for the periods indicated:

13 weeks ended 39 weeks ended

September 27, 2025 September 28, 2024 September 27, 2025 September 28, 2024

13 weeks ended

March 28, 2026 March 29, 2025

Consolidated Statements of Operations:

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Operating income 216 224

Other expense (income)—net — 3 (3) 5

Other income—net (1) (1)

Interest expense—net 75 77

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Operating income

2.8 % 2.9 % 3.0 % 2.8 %

1.5 % 1.5 % 1.7 % 1.5 %

Adjusted EBITDA (1)

5.0 % 4.7 % 4.9 % 4.6 %

Cash flows—operating activities

$ 351 $ 270 $ 1,076 $ 891

Cash flows—investing activities

(114) (79) (319) (447)

Cash flows—financing activities

(242) (515) (760) (632)

Capital expenditures

115 80 276 236

400 390 1,226 1,119

Adjusted EBITDA (1)

505 455 1,442 1,300

Adjusted Net Income (1)

245 208 681 573

Free Cash Flow (2)

237 191 806 658

(1) EBITDA is defined as net income, plus interest expense—net, income tax provision, and depreciation and amortization.

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The following table reconciles EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Net Income and Free Cash Flow to the most directly comparable GAAP financial performance and liquidity measures for the periods indicated:

13 weeks ended 39 weeks ended

September 27, 2025 September 28, 2024 September 27, 2025 September 28, 2024

13 weeks ended

March 28, 2026 March 29, 2025

Net income and Net income margin $ 116 1.2% $ 115 1.2%

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Share-based compensation expense (2)

LIFO reserve adjustment (3)

LIFO reserve adjustments (3)

Business transformation costs (4)

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Income tax provision, as adjusted (6)

(81) (73) (231) (204)

Adjusted Net Income $ 174 $ 159

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These costs generally relate to third party consulting and non-capitalizable technology.

For both the 13 weeks and 39 weeks ended September 27, 2025 and September 28, 2024, business transformation costs related to projects associated with information technology infrastructure initiatives and workforce efficiencies.

For both the 13 weeks ended March 28, 2026 and March 29, 2025, business transformation costs related to projects associated with information technology infrastructure initiatives and workforce efficiencies.

(5) Includes:

(i) aggregate acquisition, integration related costs and divestiture costs of $6 million and $6 million for the 13 weeks and 39 weeks ended September 27, 2025 and September 28, 2024, respectively, and $24 million and $17 million for the 39 weeks ended September 27, 2025 and September 28, 2024, respectively;

(i) aggregate acquisition, integration related costs and divestiture costs of $1 million and $13 million for the 13 weeks ended March 28, 2026 and March 29, 2025, respectively;

and (ii) other gains, losses or costs that we are permitted to addback for purposes of calculating Adjusted EBITDA under certain agreements governing our indebtedness.

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A reconciliation between the GAAP income tax provision and the income tax provision, as adjusted, is as follows:

13 weeks ended 39 weeks ended

September 27, 2025 September 28, 2024 September 27, 2025 September 28, 2024

13 weeks ended

March 28, 2026 March 29, 2025

GAAP income tax provision $ 26 $ 33

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Comparison of Results

13 weeks ended September 27, 2025 and September 28, 2024

13 weeks ended March 28, 2026 and March 29, 2025

• Net sales increased $259 million, or 2.8%, to $9,610 million in 2026.

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• Total organic case volum e increased 1.1% and organic independent restaurant case volume increased 4.4%.

• Operating income increased $3 million to $282 million in 2025.

• Operating income decreased $8 million to $216 million in 2026.

• Net income increased $1 million to $116 million in 2026.

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Organic broadline cases of private brands represented approximately 34% of total cases in 2026 and 2025.

Gros s profit increased $86 million, or 5.2%, to $1,753 million in 2025, primarily as a result of an increase in total case volume, improved cost of goods sold and inventory management, partially offset by an unfavorable year-over-year LIFO adjustment.

Gros s profit increased $39 million, or 2.4%, to $1,653 million in 2026, primarily as a result of an increase in total case volume and improved cost of goods sold, partially offset by a $33 million unfavorable year-over-year LIFO adjustment.

Our LIFO method of inventory costing resulted in an expense of $38 million in 2026 compared to $5 million expense i n 2025 , driven by inflation and an increase in inventory values in multiple categories.

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Our operating income was $216 million in 2026, compared to operating income of $224 million in 2025.

The increase in operating income was due to the factors discussed in the relevant sections above.

Other Expense —Net

Other expense—net includes components of net periodic pension benefit credits, exclusive of the service cost component associated with our defined benefit and other postretirement plans.

We did not recognize other expense (income)—net in 2025 and recognized other expense—net of $3 million in 2024.

Interest Expense—Net

Interest expense—net increased $1 million to $76 million in 2025 primarily due to higher borrowings under the ABL Facility revolver.

For the 13 weeks ended September 27, 2025, the Company’s effective income tax rate of 26% differed from the 21% federal corporate income tax rate primarily as a result of state income taxes and the recognition of various discrete tax items.

The discrete tax items were not material individually or in the aggregate.

For the 13 weeks ended September 28, 2024, the Company’s effective income tax rate of 26% differed from the 21% federal corporate income tax rate primarily as a result of state income taxes and the recognition of various discrete tax items.

These discrete tax items included a tax benefit of $1 million related to a decrease in an unrecognized tax benefit as a result of the expiration of the statute of limitations in several jurisdictions and a tax benefit of $1 million, primarily related to excess tax benefits associated with share-based compensation.

Our net income was $153 million in 2025, compared to a net income of $148 million in 2024.

The improvement in net income was due to the relevant factors discussed above.

39 weeks ended September 27, 2025 and September 28, 2024

• Net sales increased $1,238 million, or 4.4%, to $29,624 million in 2025.

• Total case volume increased 1.0% and independent restaurant case volume increased 3.0%.

• Total organic case volume increased 0.5% and organic independent restaurant case volume increased 2.4%.

• Operating income increased $81 million to $878 million in 2025.

• Net income increased $64 million to $492 million in 2025.

• Adjusted EBITDA increased $142 million, or 10.9%, to $1,442 million in 2025.

• Adjusted EBITDA as a percentage of net sales was 4.9% in 2025, compared to 4.6% in 2024.

Net sales increased $1,238 million, or 4.4%, to $29,624 million in 2025, driven by case volume growth and food cost inflation of 2.8%.

Total case volume increased 1.0% driven by a 3.0% increase in independent restaurant case volume, a 4.9% increase in healthcare volume, a 2.8% increase in hospitality volume, partially offset by a 3.6% decrease in chain volume.

Total organic case volume increased 0.5% and organic independent restaurant case volume increased 2.4%.

Organic broadline cases of private brands represented approximately 35% and 34% of total cases in 2025 and 2024, respectively.

Gross profit increased $276 million, or 5.7%, to $5,144 million in 2025, primarily as a result of an increase in total case volume, improved cost of goods sold, pricing optimization, and a favorable year-over-year LIFO adjustment.

Our LIFO method of inventory costing resulted in an expense of $65 million in 2025 compared to an expense of $68 million in 2024 driven by inflation and an increase in inventory values in multiple categories.

Gross profit as a percentage of net sales was 17.4% in 2025, compared to 17.1% in 2024.

Operating Expenses

Operating expenses, comprised of distribution, selling and administrative costs, increased $195 million or 4.8%, to $4,266 million in 2025.

Operating expenses increased primarily as a result of an increase in total case volume and higher distribution, selling and administrative costs, partially offset by continued distribution productivity improvement as well as actions to streamline administrative processes and costs.

Operating expenses as a percentage of net sales were 14.4% in 2025, compared to 14.3% in 2024.

Operating Income

Our operating income was $878 million in 2025, compared to operating income of $797 million in 2024.

The increase in operating income was due to the factors discussed in the relevant sections above.

Other Expense (Income)—Net

Other expense (income)—net includes components of net periodic pension benefit credits, exclusive of the service cost component associated with our defined benefit and other postretirement plans.

We recognized other income—net of $3 million in 2025 and other expense—net $5 million in 2024.

The decrease in operating income was due to the factors discussed in the relevant sections above.

Other Income—Net

Other income—net includes components of net periodic pension benefit credits, exclusive of the service cost component associated with our defined benefit and other postretirement plans.

We recognized other income—net of $1 million in 2026 and $1 million in 2025.

Interest Expense—Net

Interest expense—net decreased $8 million to $227 million in 2025 primarily due to lower interest rates and a favorable refinancing in the third quarter of fiscal 2024.

For the 39 weeks ended September 27, 2025, the Company’s effective income tax rate of 25% differed from the 21% federal corporate income tax rate primarily as a result of state income taxes and the recognition of various discrete tax items.

Interest expense—net decreased $2 million to $75 million in 2026 primarily due to lower borrowings under the ABL Facility revolver and lower interest rates for our variable rate debt.

For the 13 weeks ended March 28, 2026, the Company’s effective income tax rate of 18% differed from the 21% federal corporate income tax rate primarily as a result of state income taxes and the recognition of various discrete tax items.

These discrete tax items included a tax expense of $4 million related to an increase in an unrecognized tax benefit due to tax positions taken in prior years and a tax benefit of $15 million, primarily related to excess tax benefits associated with share-based compensation.

For the 13 weeks ended March 29, 2025, the Company’s effective income tax rate of 22% differed from the 21% federal corporate income tax rate primarily as a result of state income taxes and the recognition of various discrete tax items.

These discrete tax items included a tax benefit of $6 million, primarily related to excess tax benefits associated with share-based compensation.

For the 39 weeks ended September 28, 2024, our effective income tax rate of 23% was equivalent to the 21% federal corporate income tax rate primarily as a result of state income taxes and the recognition of various discrete tax items.

These discrete tax items included a tax benefit of $17 million, primarily related to a decrease in an unrecognized tax benefit as a result of the expiration of the statute of limitations in several jurisdictions, a tax benefit of $8 million, primarily related to excess tax benefits associated with share-based compensation and a tax expense of $3 million, primarily related to adjustments to prior year tax provision estimates.

Our net income was $492 million in 2025, compared to net income of $428 million in 2024.

Our net income was $116 million in 2026, compared to a net income of $115 million in 2025.

The improvement in net income was due to the relevant factors discussed above.

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Our primary sources of liquidity include cash provided by operations, as well as access to capital from bank borrowings and other types of debt and financing arrangements.

As of September 27, 2025, the Company had approximately $1.9 billion in cash and available liquidity.

Debt Description Maturity Interest Rate as of September 27, 2025

Carrying Value as of September 27, 2025

As of March 28, 2026, the Company had approximately $1.6 billion in cash and available liquidity.

Debt Description Maturity Interest Rate as of March 28, 2026

Carrying Value as of March 28, 2026

Carrying Value as of December 27, 2025

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Long-term debt $ 5,025 $ 5,063

We had outstanding borrowings totaling $162 million and had issued letters of credit totaling $315 million under the ABL Facility as of September 27, 2025.

There was remaining capacity of $1,822 million under the ABL Facility as of September 27, 2025.

During the 39 weeks ended September 27, 2025, outstanding letters of credit were reduced by approximately $254 million after additional surety bonds were issued in the first and second quarter of fiscal year 2025 to secure the Company’s obligations with respect to its insurance program.

We had outstanding borrowings totaling $388 million and had issued letters of credit totaling $315 million under the ABL Facility as of March 28, 2026.

There was remaining capacity of $1,597 million under the ABL Facility as of March 28, 2026.

As economic conditions permit, we will consider opportunities to repurchase, refinance or otherwise reduce our debt obligations on favorable terms.

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The agreements governing our indebtedness contain customary covenants.

These include, among other things, covenants that restrict our ability to incur certain additional indebtedness, create or permit liens on our assets, pay dividends, or engage in mergers or consolidations.

The Company had approximately $2.7 billion of restricted payment capacity under these covenants and approximately $1.7 billion of its net assets were restricted after taking into consideration the net deferred tax assets and intercompany balances that eliminate in consolidation as of September 27, 2025.

These include, among other things, covenants that may restrict our ability to incur certain additional indebtedness, create or permit liens on our assets, pay dividends, or engage in mergers or consolidations.

The Company had approximately $2.9 billion of restricted payment capacity under these covenants and approximately $1.4 billion of its net assets were restricted after taking into consideration the net deferred tax assets and intercompany balances that eliminate in consolidation as of March 28, 2026.

We believe that the combination of cash generated from operations, together with borrowing capacity under the agreements governing our indebtedness and other financing arrangements, will be adequate to permit us to meet our debt service obligations, ongoing costs of operations, working capital needs, and capital expenditure requirements for the next 12 months.

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13 weeks ended

September 27, 2025 September 28, 2024

March 28, 2026 March 29, 2025

Net income $ 116 $ 115

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Operating Activities

Cash flows provided by operating activities was $1,076 million for the 39 weeks ended September 27, 2025, representing an increase of $185 million as compared to cash flows provided by operating activities of $891 million for the 39 weeks ended September 28, 2024, driven by higher net income and a reduction in tax payments f or the 39 weeks ended September 27, 2025 compared to the 39 weeks ended September 28, 2024.

Cash flows provided by operating activities was $294 million for the 13 weeks ended March 28, 2026, representing a decrease of $97 million as compared to cash flows provided by operating activities of $391 million for the 13 weeks ended March 29, 2025, driven by changes in operating assets and liabilities including an increase in tax payments f or the 13 weeks ended March 28, 2026 compared to the 13 weeks ended March 29, 2025.

Investing Activities

During the 39 weeks ended September 27, 2025, the Company completed the asset acquisition of Jake’s Finer Foods.

Cash paid for the acquisition of Jake’s Finer Foods consisted of cash of approximately $87 million.

Investing activities for the 39 weeks ended September 27, 2025 , also included the cash proceeds from the sale of Freshway of $38 million .

In addition, c ash flows used in investing activities in the 39 weeks ended September 27, 2025 and September 28, 2024 included cash expenditures of $276 million and $236 million, respectively, related to investments in information technology, property and equipment and construction of and improvements to distribution facilities.

C ash flows used in investing activities in the 13 weeks ended March 28, 2026 and March 29, 2025 included cash expenditures of $98 million and $84 million, respectively, related to investments in information technology, property and equipment and construction of and improvements to distribution facilities.

During the 13 weeks ended March 29, 2025 , the Company completed the asset acquisition of Jake’s Finer Foods.

Cash paid for the acquisition of Jake’s Finer Foods was approximately $85 million.

Investing activities for the 13 weeks ended March 29, 2025, also included cash proceeds from the sale of Freshway of $38 million .

We expect total cash capital expenditures in fisc al year 2026 to be between $400 million and $450 million.

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Financing Activities

Cash flows used in financing activities in the 39 weeks ended September 27, 2025 included $61 million in net payments under the ABL Facility and $86 million in scheduled payments under our financing leases.

Financing activities in the 39 weeks ended September 27, 2025 also included $602 million common stock repurchased under the Original Share Repurchase Program and the New Share Repurchase Program, $22 million of proceeds received from stock purchases under our employee stock purchase plan, $6 million of proceeds from the exercise of employee stock options, which were offset by $35 million of employee tax withholdings paid in connection with the vesting of stock awards.

Cash flows used by financing activities in the 39 weeks ended September 28, 2024 included $91 million of scheduled payments under our Term Loan Facilities and financing leases, $75 million in net proceeds under the ABL Facility, $14 million for repricing of the 2021 Incremental Term Loan Facility, $1 million of financing fees related to the 2021 Incremental Term Loan Facility repricing and no net payments under the ABL Facility.

Financing activities in the 39 weeks ended September 28, 2024 also included $628 million common stock repurchased under the Amended Share Repurchase Program, $19 million of proceeds received from stock purchases under our employee stock purchase plan, $14 million of proceeds from the exercise of employee stock options and $20 million of employee tax withholdings paid in connection with the vesting of stock awards.

Cash flows used in financing activities in the 13 weeks ended March 28, 2026 included $41 million in net payments under the ABL Facility and $35 million in scheduled payments under our financing leases.

Financing activities in the 13 weeks ended March 28, 2026 also included $75 million common stock repurchased under the May 2025 Repurchase Program, $7 million of proceeds received from stock purchases under our employee stock purchase plan, $7 million of proceeds from the exercise of employee stock options, which were offset by $51 million of employee tax withholdings paid in connection with the vesting of stock awards.

Cash flows used by financing activities in the 13 weeks ended March 29, 2025 included $147 million in net payments under the ABL Facility and $23 million in scheduled payments under our financing leases.

Financing activities in the 13 weeks ended March 29, 2025 also included $23 million common stock repurchased under the Amended Share Repurchase Program, $6 million of proceeds received from stock purchases under our employee stock purchase plan, $1 million of proceeds from the exercise of employee stock options, which were offset by $33 million of employee tax withholdings paid in connection with the vesting of stock awards.

Other Obligations and Commitments

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Off-Balance Sheet Arrangements

We had $315 million of letters of credit outstanding primarily securing the Company’s obligations with respect to certain real estate leases, under the ABL Facility as of September 27, 2025.

We held approximately $327 million and $58 million of surety bonds, as of September 27, 2025 and year ended December 28, 2024, respectively, primarily in favor of certain commercial insurers to secure obligations with respect to our insurance programs .

We had $315 million of letters of credit outstanding primarily securing the Company’s obligations with respect to certain real estate leases, under the ABL Facility as of March 28, 2026.

We held approximately $377 million of surety bonds, as of March 28, 2026 and $362 million as of December 27, 2025 , primarily in favor of certain commercial insurers to secure obligations with respect to our insurance programs.

In certain cases, surety bonds may be used as an alternative to letters of credit.

For the 39 weeks ended September 27, 2025, outstanding letters of credit were reduced by approximately $254 million after additional surety bonds were issued in the first and second quarter of 2025 to secure the Company’s obligations with respect to its insurance program.

Except as disclosed above, we have no off-balance sheet arrangements that currently have or are reasonably likely to have a material effect on our consolidated financial condition, changes in financial condition, results of operations, liquidity, capital expenditures or capital resources.

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Part II, Item 7—“Management’s Discussion and Analysis of Financial Condition and Results of Operations” of the 2025 Annual Report includes a summary of the critical accounting policies we believe are the most important to aid in understanding our financial results.

There have been no changes to those critical accounting policies that have had a material impact on our reported amounts of assets, liabilities, revenue, or expenses during the 39 weeks ended September 27, 2025.

There have been no changes to those critical accounting policies that have had a material impact on our reported amounts of assets, liabilities, revenue, or expenses during the 13 weeks ended March 28, 2026.

Recent Accounting Pronouncements

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis