Burlington Stores, Inc.

Previous wording

We are a nationally recognized off-price retailer of high-quality, branded merchandise at everyday low prices. We opened our first store in Burlington, New Jersey in 1972, selling primarily coats and outerwear. Since then, we have expanded our store base to 1,138 stores as of August 2, 2025 in 46 states, Washington D.C. and Puerto Rico. We have diversified our product categories by offering an extensive selection of in-season, high-quality branded merchandise at up to 60% off other retailers’ prices, including: fashion-focused women’s apparel, menswear, youth apparel, baby, beauty, footwear, accessories, home, toys, gifts and coats.

Current wording

We are a nationally recognized off-price retailer of high-quality, branded merchandise at everyday low prices. We opened our first store in Burlington, New Jersey in 1972, selling primarily coats and outerwear. Since then, we have expanded our store base to 1,211 stores as of November 1, 2025 in 46 states, Washington D.C. and Puerto Rico. We have diversified our product categories by offering an extensive selection of in-season, high-quality branded merchandise at up to 60% off other retailers’ prices, including: fashion-focused women’s apparel, menswear, youth apparel, baby, beauty, footwear, accessories, home, toys, gifts and coats.

Previous wording

Fiscal 2025 is defined as the 52-week year ended January 31, 2026. Fiscal 2024 is defined as the 52-week year ending February 1, 2025. The first and second quarters of Fiscal 2025 and Fiscal 2024 each consist of 13 weeks.

Current wording

Fiscal 2025 is defined as the 52-week year ended January 31, 2026. Fiscal 2024 is defined as the 52-week year ending February 1, 2025. The first, second, and third quarters of Fiscal 2025 and Fiscal 2024 each consist of 13 weeks.

Previous wording

During the six month period ended August 2, 2025, we opened 44 new stores, inclusive of eight relocations, and permanently closed six stores, exclusive of the aforementioned relocations, bringing our store count as of August 2, 2025 to 1,138 stores.

Current wording

During the nine month period ended November 1, 2025, we opened 129 new stores, inclusive of 18 relocations, and permanently closed eight stores, exclusive of the aforementioned relocations, bringing our store count as of November 1, 2025 to 1,211 stores.

Previous wording

Net income. We earned net income of $94.2 million during the three month period ended August 2, 2025 compared with net income of $73.8 million during the three month period ended August 3, 2024. We earned net income of $195.0 million during the six month period ended August 2, 2025 compared with a net income of $152.3 million during the six month period ended August 3, 2024. These increases were primarily driven by higher sales, as well as increased gross margin rate. Refer to the section below entitled “Results of Operations” for further explanation.

Current wording

Net income. We earned net income of $104.8 million during the three month period ended November 1, 2025 compared with net income of $90.6 million during the three month period ended November 2, 2024. We earned net income of $299.8 million during the nine month period ended November 1, 2025 compared with a net income of $242.9 million during the nine month period ended November 2, 2024. These increases were primarily driven by higher sales, as well as increased gross margin rate. Refer to the section below entitled “Results of Operations” for further explanation.

Previous wording

We define Adjusted Net Income as net income, exclusive of the following items, if applicable: (i) net favorable lease costs; (ii) costs related to debt amendments; (iii) impairment charges; (iv) amounts related to certain litigation matters; and (v) other unusual or non-recurring expenses, losses, charges or gains, all of which are tax effected to arrive at Adjusted Net Income.

Current wording

We define Adjusted Net Income as net income, exclusive of the following items, if applicable: (i) net favorable lease costs; (ii) loss on extinguishment of debt; (iii) costs related to debt amendments; (iv) impairment charges; (v) amounts related to certain litigation matters; and (vi) other unusual or non-recurring expenses, losses, charges or gains, all of which are tax effected to arrive at Adjusted Net Income.

Previous wording

We define Adjusted EBITDA as net income, exclusive of the following items, if applicable: (i) interest expense; (ii) interest income; (iii) costs related to debt amendments; (iv) income tax expense; (v) depreciation and amortization; (vi) net favorable lease costs; (vii) impairment charges; (viii) amounts related to certain litigation matters; and (ix) other unusual or non-recurring expenses, losses, charges or gains.

Current wording

We define Adjusted EBITDA as net income, exclusive of the following items, if applicable: (i) interest expense; (ii) interest income; (iii) loss on extinguishment of debt; (iv) costs related to debt amendments; (v) income tax expense; (vi) depreciation and amortization; (vii) net favorable lease costs; (viii) impairment charges; (ix) amounts related to certain litigation matters; and (x) other unusual or non-recurring expenses, losses, charges or gains.

Previous wording

We define Adjusted EBIT as net income, exclusive of the following items, if applicable: (i) interest expense; (ii) interest income; (iii) costs related to debt amendments; (iv) income tax expense; (v) impairment charges; (vi) net favorable lease costs; (vii) amounts related to certain litigation matters; and (viii) other unusual or non-recurring expenses, losses, charges or gains.

Current wording

We define Adjusted EBIT as net income, exclusive of the following items, if applicable: (i) interest expense; (ii) interest income; (iii) loss on extinguishment of debt; (iv) costs related to debt amendments; (v) income tax expense; (vi) impairment charges; (vii) net favorable lease costs; (viii) amounts related to certain litigation matters; and (ix) other unusual or non-recurring expenses, losses, charges or gains.

Previous wording

During the three and six months ended August 2, 2025, Adjusted Net Income increased $24.3 million to $101.8 million and increased $40.0 million to $204.3 million, respectively, compared to the same periods in the prior year. These increases were primarily driven by higher sales, as well as increased gross margin rate. Refer to the section below entitled “Results of Operations” for further explanation.

Current wording

During the three and nine months ended November 1, 2025, Adjusted Net Income increased $7.6 million to $107.5 million and increased $47.6 million to $311.8 million, respectively, compared to the same periods in the prior year. These increases were primarily driven by higher sales, as well as increased gross margin rate. Refer to the section below entitled “Results of Operations” for further explanation.

Previous wording

The following table shows our reconciliation of net income to Adjusted Net Income for the three and six months ended August 2, 2025 compared with the three and six months ended August 3, 2024:

Current wording

The following table shows our reconciliation of net income to Adjusted Net Income for the three and nine months ended November 1, 2025 compared with the three and nine months ended November 2, 2024:

Previous wording

Relates to the settlement of the 2025 Convertible Notes during the first quarter of Fiscal 2025.

Current wording

Fiscal 2025 amount relates to the settlement of the 2025 Convertible Notes during the first quarter of Fiscal 2025. Fiscal 2024 amounts relate to the September 2024 extension and upsizing of the Term Loan Facility in the third quarter of Fiscal 2024.

Previous wording

During the three and six months ended August 2, 2025, Adjusted EBIT increased $35.7 million to $150.9 million and increased $52.6 million to $297.2 million, respectively, compared to the same periods in the prior year. During the three and six months ended August 2, 2025, Adjusted EBITDA increased $43.9 million to $245.7 million and increased $70.6 million to $483.8 million, respectively, compared to the same periods in the prior year. These increases were primarily driven by higher sales, as well as increased gross margin rate. Refer to the section below entitled “Results of Operations” for further explanation.

Current wording

During the three and nine months ended November 1, 2025, Adjusted EBIT increased $14.6 million to $155.9 million and increased $67.2 million to $453.1 million, respectively, compared to the same periods in the prior year. During the three and nine months ended November 1, 2025, Adjusted EBITDA increased $26.4 million to $255.2 million and increased $97.0 million to $739.0 million, respectively, compared to the same periods in the prior year. These increases were primarily driven by higher sales, as well as increased gross margin rate. Refer to the section below entitled “Results of Operations” for further explanation.

Previous wording

The following table shows our reconciliation of net income to Adjusted EBIT and Adjusted EBITDA for the three and six months ended August 2, 2025 compared with the three and six months ended August 3, 2024:

Current wording

The following table shows our reconciliation of net income to Adjusted EBIT and Adjusted EBITDA for the three and nine months ended November 1, 2025 compared with the three and nine months ended November 2, 2024:

Previous wording

Gross margin as a percentage of net sales increased to 43.7% during the three month period ended August 2, 2025, compared with 42.8% during three month period ended August 3, 2024. Gross margin as a percentage of net sales increased to 43.8% during the six months ended August 2, 2025, compared with 43.2% during the six months ended August 3, 2024. These improvements were driven primarily by increased merchandise margin and decreased freight costs. The improvements in merchandise margin were driven by lower shortage and reduced markdowns, which more than offset lower markup due to tariffs. Product sourcing costs, which are included in selling, general and administrative expenses, were flat as a percentage of net sales during the three and six month periods ended August 2, 2025, compared with the three and six month periods ended August 3, 2024.

Current wording

Gross margin as a percentage of net sales increased to 44.2% during the three month period ended November 1, 2025, compared with 43.9% during the three month period ended November 2, 2024. Gross margin as a percentage of net sales increased to 43.9% during the nine months ended November 1, 2025, compared with 43.4% during the nine months ended November 2, 2024. These improvements were driven primarily by lower freight costs and higher merchandise margin. Product sourcing costs, which are included in selling, general and administrative expenses, improved 40 basis points and 10 basis points as a percentage of net sales during the three and nine month periods ended November 1, 2025, respectively, compared with the three and nine month periods ended November 2, 2024.

Previous wording

Inventory. Inventory at August 2, 2025 increased to $1,414.8 million compared with $1,222.7 million at August 3, 2024. The increase was attributable primarily to an increase in reserve inventory and 81 net new stores opened since the end of the second quarter of Fiscal 2024. Comparable store inventories decreased 8% compared to the second quarter of Fiscal 2024.

Current wording

Inventory. Inventory at November 1, 2025 increased to $1,658.4 million compared with $1,440.7 million at November 2, 2024. The increase was attributable primarily to an increase in reserve inventory and 108 net new stores opened since the end of the third quarter of Fiscal 2024. Comparable store inventories decreased 2% compared to the third quarter of Fiscal 2024.

Previous wording

Reserve inventory includes all inventory that is being stored for release either later in the season, or in a subsequent season. We intend to use our reserve merchandise to effectively chase sales trends. Reserve inventory was 50% of total inventory at the end of the second quarter of Fiscal 2025 compared to 41% at the end of the second quarter of Fiscal 2024.

Current wording

Reserve inventory includes all inventory that is being stored for release either later in the season, or in a subsequent season. We intend to use our reserve merchandise to effectively chase sales trends. Reserve inventory was 35% of total inventory at the end of the third quarter of Fiscal 2025 compared to 32% at the end of the third quarter of Fiscal 2024.

Previous wording

Liquidity. Liquidity measures our ability to generate cash. Management measures liquidity through cash flow, which is the measure of cash generated from or used in operating, financing, and investing activities. Cash and cash equivalents decreased $247.1 million during the six months ended August 2, 2025, compared with a decrease of $265.4 million during the six months ended August 3, 2024. Refer to the section below entitled “Liquidity and Capital Resources” for further explanation.

Current wording

Liquidity. Liquidity measures our ability to generate cash. Management measures liquidity through cash flow, which is the measure of cash generated from or used in operating, financing, and investing activities. Cash and cash equivalents decreased $410.6 million during the nine months ended November 1, 2025, compared with a decrease of $67.6 million during the nine months ended November 2, 2024. Refer to the section below entitled “Liquidity and Capital Resources” for further explanation.

Previous wording

The following table sets forth certain items in the Condensed Consolidated Statements of Income as a percentage of net sales for the three and six months ended August 2, 2025 and the three and six months ended August 3, 2024.

Current wording

The following table sets forth certain items in the Condensed Consolidated Statements of Income as a percentage of net sales for the three and nine months ended November 1, 2025 and the three and nine months ended November 2, 2024.

Previous wording

Net sales improved $239.8 million, or 9.7%, to $2,701.0 million during the second quarter of Fiscal 2025, primarily driven by net sales from our 81 net new stores opened since the end of the second quarter of Fiscal 2024 as well as an increase of 5% in comparable stores sales during the three month period ended August 2, 2025.

Current wording

Net sales improved $179.8 million, or 7.1%, to $2,706.0 million during the third quarter of Fiscal 2025, primarily driven by net sales from our 108 net new stores opened since the end of the third quarter of Fiscal 2024 as well as an increase of 1% in comparable stores sales during the three month period ended November 1, 2025.

Previous wording

Cost of sales as a percentage of net sales decreased to 56.3% during the second quarter of Fiscal 2025, compared to 57.2% during the second quarter of Fiscal 2024. This improvement was driven primarily by increased merchandise margin and decreased freight costs. The improvement in merchandise margin was driven by lower shortage and reduced markdowns, which more than offset lower markup due to tariffs. On a dollar basis, cost of sales increased $111.5 million, or 7.9%, primarily driven by our overall increase in sales.

Current wording

Cost of sales as a percentage of net sales decreased to 55.8% during the third quarter of Fiscal 2025, compared to 56.1% during the third quarter of Fiscal 2024. This improvement was driven primarily by lower freight costs and higher merchandise margin. On a dollar basis, cost of sales increased $91.7 million, or 6.5%, primarily driven by our overall increase in sales.

Previous wording

Selling, general and administrative expenses as a percentage of net sales increased to 35.2% during the second quarter of Fiscal 2025, compared to 35.1% during the second quarter of Fiscal 2024. The increase was primarily driven by an increase in incentive compensation, partially offset by improvement in store payroll costs. On a dollar basis, selling, general and administrative expenses increased by $86.0 million, or 9.9%, to $949.9 million during the second quarter of Fiscal 2025. The increase was primarily driven by our 81 net new stores opened since the end of the second quarter of Fiscal 2024.

Current wording

Selling, general and administrative expenses as a percentage of net sales decreased to 35.0% during the third quarter of Fiscal 2025, compared to 35.4% during the third quarter of Fiscal 2024. The decrease was primarily driven by leverage on product sourcing costs and store payroll, partially offset by deleverage on occupancy and corporate costs. On a dollar basis, selling, general and administrative expenses increased by $54.4 million, or 6.1%, to $947.5 million during the third quarter of Fiscal 2025. The increase was primarily driven by our 108 net new stores opened since the end of the third quarter of Fiscal 2024.

Previous wording

During the second quarter of Fiscal 2025 and Fiscal 2024, the Company incurred costs related to leases acquired through bankruptcy proceedings. The acquisition of these leases resulted in $10.8 million and $3.3 million of pre-opening costs that are recorded in the line item, “Selling, general and administrative expenses” in our Condensed Consolidated Statements of Income during the second quarter of Fiscal 2025 and Fiscal 2024, respectively.

Current wording

During the third quarter of Fiscal 2025, the Company incurred costs related to leases acquired through bankruptcy proceedings. The acquisition of these leases resulted in $10.9 million of pre-opening costs that are recorded in the line item, “Selling, general and administrative expenses” in our Condensed Consolidated Statements of Income during the third quarter of Fiscal 2025. There were none of these costs incurred during the third quarter of Fiscal 2024.

Previous wording

Depreciation and amortization expense amounted to $94.8 million during the second quarter of Fiscal 2025 compared with $86.7 million during the second quarter of Fiscal 2024. The increase in depreciation and amortization expense was primarily driven by new and non-comparable stores, as well as capital expenditures related to our supply chain.

Current wording

Depreciation and amortization expense amounted to $99.3 million during the third quarter of Fiscal 2025 compared with $87.5 million during the third quarter of Fiscal 2024. The increase in depreciation and amortization expense was primarily driven by new and non-comparable stores.

Previous wording

Impairment charges on long-lived assets were $1.6 million during the second quarter of Fiscal 2025, related to unrecoverable store assets. There were no impairment charges on long-lived assets during the second quarter of Fiscal 2024.

Current wording

Impairment charges on long-lived assets were $3.8 million during the third quarter of Fiscal 2025, primarily related to one owned store expected to sell below net carrying value. Impairment charges on long-lived assets were $3.0 million during the third quarter of Fiscal 2024, related to stores that relocated and closed before the end of the respective lease-end dates.

Previous wording

Interest expense increased $0.8 million during the second quarter of Fiscal 2025 to $17.4 million, compared to the same period in the prior year. Increases related to the upsize of the Term Loan Facility and ABL borrowings were offset by increased capitalized interest as a result of the ongoing construction of a distribution center. Additionally, the Company paid down the 2025 Convertible Notes during the first quarter of Fiscal 2025.

Current wording

Interest expense increased $1.4 million during the third quarter of Fiscal 2025 to $19.2 million, compared to the same period in the prior year. Increases related to the upsize of the Term Loan Facility were partially offset by increased capitalized interest as a result of the ongoing construction of a distribution center. Additionally, the Company paid down the 2025 Convertible Notes during the first quarter of Fiscal 2025.

Previous wording

The average interest rate on the Term Loan Facility was 6.1% and 7.4% for the second quarter of Fiscal 2025 and the second quarter of Fiscal 2024, respectively. The average balance on the Term Loan Facility, excluding the original issue discount, was $1,527.9 million and $934.0 million for the second quarter of Fiscal 2025 and the second quarter of Fiscal 2024, respectively.

Current wording

The average interest rate on the Term Loan Facility was 6.0% and 7.0% for the third quarter of Fiscal 2025 and the third quarter of Fiscal 2024, respectively. The average balance on the Term Loan Facility, excluding the original issue discount, was $1,737.8 million and $1,068.6 million for the third quarter of Fiscal 2025 and the third quarter of Fiscal 2024, respectively.

Previous wording

The average interest rate on the ABL Line of Credit was 5.5% for the second quarter of Fiscal 2025. The average balance on the ABL Line of Credit was $57.1 million for the second quarter of Fiscal 2025. There were no borrowings under the ABL Line of Credit during the second quarter of Fiscal 2024.

Current wording

There were no borrowings under the ABL Line of Credit during the third quarter of Fiscal 2025 and Fiscal 2024.

Previous wording

Income tax expense was $33.1 million during the second quarter of Fiscal 2025 compared with income tax expense of $25.9 million during the second quarter of Fiscal 2024. The effective tax rate for the second quarter of Fiscal 2025 was 26.0% compared with 26.0% during the second quarter of Fiscal 2024. The increase in tax expense is driven by higher pre-tax income while the effective tax rate remained consistent with prior year.

Current wording

Income tax expense was $33.3 million during the third quarter of Fiscal 2025 compared with income tax expense of $27.4 million during the third quarter of Fiscal 2024. The effective tax rate for the third quarter of Fiscal 2025 was 24.1% compared with 23.2% during the third quarter of Fiscal 2024. The increase in income tax expense is due to higher pre-tax income. The lower tax rate in the prior period was primarily attributable to a favorable adjustment related to adopting the foreign tax credit.

Previous wording

At the end of each interim period we are required to determine the best estimate of our annual effective tax rate and then apply that rate in providing for income taxes on a current year-to-date (interim period) basis. Use of this methodology during the second quarter of Fiscal 2025 resulted in an annual effective income tax rate of approximately 26% (before discrete items) as our best estimate.

Current wording

At the end of each interim period we are required to determine the best estimate of our annual effective tax rate and then apply that rate in providing for income taxes on a current year-to-date (interim period) basis. Use of this methodology during the third quarter of Fiscal 2025 resulted in an annual effective income tax rate of approximately 26% (before discrete items) as our best estimate.

Previous wording

We earned net income of $94.2 million for the second quarter of Fiscal 2025 compared with $73.8 million for the second quarter of Fiscal 2024. This increase was primarily driven by higher sales, as well as increased gross margin rate. Net income included $8.1 million and $2.5 million of expense, net of income taxes, for the second quarter of Fiscal 2025 and Fiscal 2024, respectively, related to the bankruptcy acquired leases.

Current wording

We earned net income of $104.8 million for the third quarter of Fiscal 2025 compared with $90.6 million for the third quarter of Fiscal 2024. This increase was primarily driven by higher sales, as well as increased gross margin rate. Net income included $8.2 million, net of income taxes, for the third quarter of Fiscal 2025 related to the bankruptcy acquired leases. There were no such costs during the third quarter of Fiscal 2024.

Previous wording

Net sales improved $382.6 million, or 7.9%, to $5,201.1 million during the six month period ended August 2, 2025, primarily driven by the net sales of 81 net new stores opened since the end of the second quarter of Fiscal 2024, as well as an increase of 2% in comparable stores sales during the six month period ended August 2, 2025.

Current wording

Net sales improved $562.4 million, or 7.7%, to $7,907.1 million during the nine month period ended November 1, 2025, primarily driven by the net sales of 108 net new stores opened since the end of the third quarter of Fiscal 2024, as well as an increase of 2% in comparable stores sales during the nine month period ended November 1, 2025.

Previous wording

Cost of sales as a percentage of net sales decreased to 56.2% during the six month period ended August 2, 2025, compared to 56.8% during the six month period ended August 3, 2024. This improvement was driven primarily by increased merchandise margin and decreased freight costs. The improvement in merchandise margin was primarily driven by lower shortage. On a dollar basis, cost of sales increased $185.9 million, or 6.8%, primarily driven by our overall increase in sales.

Current wording

Cost of sales as a percentage of net sales decreased to 56.1% during the nine month period ended November 1, 2025, compared to 56.6% during the nine month period ended November 2, 2024. This improvement was driven primarily by lower freight costs and higher merchandise margin. On a dollar basis, cost of sales increased $277.6 million, or 6.7%, primarily driven by our overall increase in sales.

Previous wording

Selling, general and administrative expenses as a percentage of net sales decreased to 35.0% during the six month period ended August 2, 2025, compared to 35.1% during the six month period ended August 3, 2024. The decrease was primarily driven by an improvement in store payroll costs, partially offset by an increase in incentive compensation. On a dollar basis, selling, general and administrative expenses increased by $128.8 million, or 7.6%, to $1,818.0 million during the six month period ended August 2, 2025. The increase was primarily driven by our 81 net new stores opened since the end of the second quarter of Fiscal 2024.

Current wording

Selling, general and administrative expenses as a percentage of net sales decreased to 35.0% during the nine month period ended November 1, 2025, compared to 35.2% during the nine month period ended November 2, 2024. The decrease was primarily driven by leverage in store payroll costs and product sourcing costs, partially offset by deleverage in occupancy. On a dollar basis, selling, general and administrative expenses increased by $183.2 million, or 7.1%, to $2,765.5 million during the nine month period ended November 1, 2025. The increase was primarily driven by our 108 net new stores opened since the end of the third quarter of Fiscal 2024.

Previous wording

During the six month periods ended August 2, 2025 and August 3, 2024, the Company incurred costs related to leases acquired through bankruptcy proceedings. The acquisition of these leases resulted in $16.6 million and $9.4 million of pre-opening costs that are recorded in the line item, “Selling, general and administrative expenses” in our Condensed Consolidated Statements of Income during the six month periods ended August 2, 2025 and August 3, 2024, respectively.

Current wording

During the nine month periods ended November 1, 2025 and November 2, 2024, the Company incurred costs related to leases acquired through bankruptcy proceedings. The acquisition of these leases resulted in $27.5 million and $9.4 million of pre-opening costs that are recorded in the line item, “Selling, general and administrative expenses” in our Condensed Consolidated Statements of Income during the nine month periods ended November 1, 2025 and November 2, 2024, respectively.

Previous wording

Depreciation and amortization expense amounted to $186.6 million during the six month period ended August 2, 2025 compared with $168.6 million during the six month period ended August 3, 2024. The increase in depreciation and amortization expense was primarily driven by capital expenditures related to our supply chain, as well as new and non-comparable stores.

Current wording

Depreciation and amortization expense amounted to $285.9 million during the nine month period ended November 1, 2025 compared with $256.1 million during the nine month period ended November 2, 2024. The increase in depreciation and amortization expense was primarily driven by new and non-comparable stores, as well as capital expenditures related to investments in our supply chain infrastructure.

Previous wording

Impairment charges on long-lived assets were $2.1 million during the six month period ended August 2, 2025, related to unrecoverable store assets. Impairment charges on long-lived assets were $8.2 million during the six month period ended August 3, 2024, related to a sale-leaseback transaction at one owned store sold below net carrying value.

Current wording

Impairment charges on long-lived assets were $5.9 million during the nine month period ended November 1, 2025, primarily related to two owned stores expected to sell below net carrying value as well as stores with unrecoverable assets. Impairment charges on long-lived assets were $11.3 million during the nine month period ended November 2, 2024, primarily related to a sale-leaseback transaction at one owned store sold below net carrying value and stores relocated and closed before the end of the respective lease-end dates.

Previous wording

Interest expense remained flat during the six month period ended August 2, 2025 at $33.2 million, compared to the same period in the prior year. Increases related to the upsize of the Term Loan Facility and ABL borrowings were offset by increased capitalized interest as a result of the ongoing construction of a distribution center. Additionally, the Company paid down the 2025 Convertible Notes during the first quarter of Fiscal 2025.

Current wording

Interest expense increased $1.4 million during the nine month period ended November 1, 2025 to $52.4 million, compared to the same period in the prior year. Increases related to the upsize of the Term Loan Facility were partially offset by increased capitalized interest as a result of the ongoing construction of a distribution center. Additionally, the Company paid down the 2025 Convertible Notes during the first quarter of Fiscal 2025.

Previous wording

The average interest rate on the Term Loan Facility was 6.1% and 7.4% for the six month period ended August 2, 2025 and the six month period ended August 3, 2024, respectively. The average balance on the Term Loan Facility, excluding the original issue discount, was $1,386.8 million and $935.3 million for the six month period ended August 2, 2025 and the six month period ended August 3, 2024, respectively.

Current wording

The average interest rate on the Term Loan Facility was 6.1% and 7.3% for the nine month period ended November 1, 2025 and the nine month period ended November 2, 2024, respectively. The average balance on the Term Loan Facility, excluding the original issue discount, was $1,503.8 million and $979.7 million for the nine month period ended November 1, 2025 and the nine month period ended November 2, 2024, respectively.

Previous wording

The average interest rate on the ABL Line of Credit was 5.5% for the six month period ended August 2, 2025. The average balance on the ABL Line of Credit was $40.4 million for the six month period ended August 2, 2025. There were no borrowings under the ABL Line of Credit during the six month period ended August 3, 2024.

Current wording

The average interest rate on the ABL Line of Credit was 5.5% for the nine month period ended November 1, 2025. The average balance on the ABL Line of Credit was $26.9 million for the nine month period ended November 1, 2025. There were no borrowings under the ABL Line of Credit during the nine month period ended November 2, 2024.

Previous wording

Income tax expense was $65.2 million during the six month period ended August 2, 2025 compared with income tax expense of $57.0 million during the six month period ended August 3, 2024. The effective tax rate for the six month period ended August 2, 2025 was 25.0% compared with 27.2% during the six month period ended August 3, 2024. The increase in income tax expense is due to higher pre-tax income. The lower effective tax rate is mainly driven by the tax benefit from stock-based compensation.

Current wording

Income tax expense was $98.5 million during the nine month period ended November 1, 2025 compared with income tax expense of $84.5 million during the nine month period ended November 2, 2024. The effective tax rate for the nine month period ended November 1, 2025 was 24.7% compared with 25.8% during the nine month period ended November 2, 2024. The increase in income tax expense is due to higher pre-tax income. The lower effective tax rate is primarily driven by the tax benefit from stock-based compensation.

Previous wording

At the end of each interim period we are required to determine the best estimate of our annual effective tax rate and then apply that rate in providing for income taxes on a current year-to-date (interim period) basis. Use of this methodology during the six month period ended August 2, 2025 resulted in an annual effective income tax rate of approximately 26% (before discrete items) as our best estimate.

Current wording

At the end of each interim period we are required to determine the best estimate of our annual effective tax rate and then apply that rate in providing for income taxes on a current year-to-date (interim period) basis. Use of this methodology during the nine month period ended November 1, 2025 resulted in an annual effective income tax rate of approximately 26% (before discrete items) as our best estimate.