# Unifirst Corp: Form 10-Q for the period ended Nov 29, 2025

- Company: [Unifirst Corp](/companies/unf.md) (CIK 717954)
- Form: 10-Q
- Filed: 2026-01-07
- Accepted by EDGAR: Jan 7, 2026, 17:30 ET
- Period: 2025-11-29
- Accession: 0001193125-26-006587
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/717954/000119312526006587/unf-20251129.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/717954/000119312526006587/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2025-11-29.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2025-08-31 to 2025-11-29 | $621.3m | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Cost of revenue | 3 months, 2025-08-31 to 2025-11-29 | $393.0m | us-gaap:CostOfRevenue |
| Selling, general and administrative | 3 months, 2025-08-31 to 2025-11-29 | $147.8m | us-gaap:SellingGeneralAndAdministrativeExpense |
| Operating income | 3 months, 2025-08-31 to 2025-11-29 | $45.3m | us-gaap:OperatingIncomeLoss |
| Income tax | 3 months, 2025-08-31 to 2025-11-29 | $12.6m | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months, 2025-08-31 to 2025-11-29 | $34.4m | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2025-08-31 to 2025-11-29 | $1.89 | us-gaap:EarningsPerShareDiluted |
| Diluted shares (weighted) | 3 months, 2025-08-31 to 2025-11-29 | 18,188,000 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 3 months, 2025-08-31 to 2025-11-29 | $14.9m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Capital expenditure | 3 months, 2025-08-31 to 2025-11-29 | $38.9m | us-gaap:PaymentsToAcquirePropertyPlantAndEquipment |
| Dividends paid | 3 months, 2025-08-31 to 2025-11-29 | $6.1m | us-gaap:PaymentsOfDividends |
| Share repurchases | 3 months, 2025-08-31 to 2025-11-29 | $32.7m | us-gaap:PaymentsForRepurchaseOfCommonStock |
| Cash and equivalents | at 2025-11-29 | $124.0m | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | at 2025-11-29 | $872.7m | us-gaap:AssetsCurrent |
| Total assets | at 2025-11-29 | $2.75bn | us-gaap:Assets |
| Current liabilities | at 2025-11-29 | $264.0m | us-gaap:LiabilitiesCurrent |
| Total liabilities | at 2025-11-29 | $590.1m | us-gaap:Liabilities |
| Shareholders' equity | at 2025-11-29 | $2.16bn | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 30,367 characters.

### SAFE HARBOR FOR FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q and any documents incorporated by reference may contain forward-looking statements within the meaning of the federal securities laws. Forward-looking statements contained in this Quarterly Report on Form 10-Q and any documents incorporated by reference are subject to the safe harbor created by the Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by words such as “estimates,” “anticipates,” “projects,” “plans,” “expects,” “intends,” “believes,” “seeks,” “could,” “should,” “may,” “will,” “strategy,” “objective,” “assume,” “strive,” “design,” “assumption,” “vision” or the negative versions thereof, and similar expressions and by the context in which they are used. Such forward-looking statements are based upon our current expectations and speak only as of the date made. Such statements are highly dependent upon a variety of risks, uncertainties and other important factors that could cause actual results to differ materially from those reflected in such forward-looking statements. Such factors include, but are not limited to, uncertainties caused by an economic recession or other adverse economic conditions, including, without limitation, as a result of elevated inflation or interest rates or extraordinary events or circumstances such as geopolitical conflicts like the conflict between Russia and Ukraine and disruption in the Middle East, and their impact on our customers’ businesses and workforce levels, disruptions of our business and operations, including limitations on, or closures of, our facilities, or the business and operations of our customers or suppliers in connection with extraordinary events or circumstances, uncertainties regarding our ability to consummate acquisitions and successfully integrate acquired businesses, and the performance of such businesses, uncertainties regarding any existing or newly-discovered expenses and liabilities related to environmental compliance and remediation, any adverse outcome of pending or future contingencies or claims, our ability to compete successfully without any significant degradation in our margin rates, seasonal and quarterly fluctuations in business levels, our ability to preserve positive labor relationships and avoid becoming the target of corporate labor unionization campaigns that could disrupt our business, the effect of currency fluctuations on our results of operations and financial condition, our dependence on third parties to supply us with raw materials, which such supply could be severely disrupted as a result of extraordinary events or circumstances such as the conflict between Russia and Ukraine, any loss of key management or other personnel, increased costs as a result of any changes in federal, state, international or other laws, rules and regulations or governmental interpretation of such laws, rules and regulations, uncertainties regarding, or adverse impacts from continued high price levels of natural gas, electricity, fuel and labor or increases in such costs, the negative effect on our business from sharply depressed oil and natural gas prices, the continuing increase in domestic healthcare costs, increased workers’ compensation claim costs, increased healthcare claim costs, our ability to retain and grow our customer base, demand and prices for our products and services, fluctuations in our nuclear business, political or other instability, supply chain disruption or infection among our employees in Mexico and Nicaragua where our principal garment manufacturing plants are located, our ability to properly and efficiently design, construct, implement and operate a new enterprise resource planning (“ERP”) computer system, interruptions or failures of our information technology systems, including as a result of cyber-attacks, additional professional and internal costs necessary for compliance with any changes in or additional Securities and Exchange Commission (“SEC”), New York Stock Exchange and accounting or other rules, strikes and unemployment levels, our efforts to evaluate and potentially reduce internal costs, the impact of U.S. and foreign trade policies and tariffs or other impositions on imported goods on our business, results of operations and financial condition, our ability to successfully implement our business strategies and processes, including our capital allocation strategies, our ability to successfully remediate the material weakness in internal control over financial reporting disclosed in our Annual Report on Form 10-K for the year ended August 30, 2025 and the other factors described under “Part I, Item 1A. Risk Factors” and elsewhere in our Annual Report on Form 10-K for the year ended August 30, 2025 and in our other filings with the SEC, including, without limitation, under Part II, Item 1A. “Risk Factors” and elsewhere in this Quarterly Report on Form 10-Q. We undertake no obligation to update any forward-looking statements to reflect events or circumstances arising after the date on which they are made.

### Business Overview

UniFirst Corporation, a corporation organized under the laws of the Commonwealth of Massachusetts in 1950, together with its subsidiaries, hereunder referred to as “we”, “our”, the “Company”, or “UniFirst”, is one of the leading providers of workplace uniforms and protective work wear clothing in North America. We design, manufacture, personalize, rent, clean, deliver, and sell a wide range of uniforms and protective clothing, including shirts, pants, jackets, coveralls, lab coats, smocks, aprons and specialized protective wear, such as flame resistant and high visibility garments. We also rent and sell industrial wiping products, floor mats, facility service products and other non-garment items, and provide restroom and cleaning supplies and first aid cabinet services and other safety supplies as well as provide certain safety training, to a variety of manufacturers, retailers and service companies. We serve businesses of all sizes across multiple industries and sectors. We provide our products and services to over 300,000 customer locations in the U.S., Canada and Europe.

As mentioned and described in Note 14, “Segment Reporting,” beginning with the fourth quarter of fiscal 2025, we reorganized our business into three reportable operating segments based on the information reviewed by our Chief Executive Officer: Uniform &

Facility Service Solutions, First Aid & Safety Solutions and Other. Refer to Note 14, “Segment Reporting” to our Consolidated Financial Statements for our disclosure of segment information. We have recast certain prior period segment results to conform with the current presentation.

The Uniform & Facility Service Solutions segment consolidates the former Corporate, Manufacturing (“MFG”) and U.S. and Canadian Rental and Cleaning operating segments and includes our cleanroom operations, which was previously part of the Specialty Garments Rental and Cleaning (“Specialty Garments”) reporting segment. The Uniform & Facility Service Solutions reporting segment designs, manufactures, purchases, rents, cleans, delivers and sells, uniforms and protective clothing and non-garment items in the U.S. and Canada. Certain operations of the Uniform & Facility Service Solutions reporting segment are referred to by the Company as “industrial laundry operations” and we refer to the locations related to this reporting segment as our “industrial laundries”. Additionally, the Uniform & Facility Service Solutions consists of our distribution center, sales and marketing, information systems, engineering, materials management, manufacturing planning, finance, budgeting, human resources, other general and administrative costs and interest expense. The segment, through the Company’s cleanroom operations, also purchases, rents, cleans, delivers and sells specialty garments and non-garment items primarily for cleanroom applications and provides cleanroom cleaning at limited customer locations.

We renamed our First Aid reporting segment as the First Aid & Safety Solutions reporting segment to better reflect the scope of services and products offered. The First Aid & Safety Solutions reporting segment sells first aid cabinet services and other safety supplies, provides certain safety training and maintains wholesale distribution and pill packaging operations for non-prescription medicines.

The Other reporting segment currently consists of our nuclear business, which was previously part of the Specialty Garments reporting segment with our cleanroom operations. The segment purchases, rents, cleans, delivers and sells, specialty garments and non-garment items primarily for nuclear applications.

### Factors Affecting our Business

In general, we believe that our results of operations are not dependent on moderate changes in the inflation rate. Historically, we have been able to manage the impacts of more significant changes in inflation rates through our customer relationships, customer agreements that generally provide for price increases and continued focus on improvements in operational productivity. However, the inflationary environment in recent years had a negative impact on our margins, including increased energy costs for our vehicles and our plants, and increased wages in the labor markets in which we compete. While inflation has moderated recently, a period of sustained inflation could pressure our margins in future periods. Adverse economic conditions resulting from inflationary pressures, U.S. Federal Reserve actions, including elevated interest rates and/or increases in interest rates, geopolitical issues, U.S. and foreign tariffs or other impositions on imported goods or other causes are difficult to predict and may have a material adverse impact on our business, results of operations and financial condition.

We are also monitoring and evaluating the potential impact of recently announced new or increased tariffs on imported goods. If any such tariffs were to increase our cost or difficulty of obtaining raw materials or products from suppliers and we were unable to mitigate the impacts of any such increased costs or difficulties, it could have a material adverse impact on our business and our results of operations. In addition, any such tariffs or other impositions on imported goods could have a negative adverse impact on economic conditions generally and on the businesses of our customers, including decreases in wearer levels at our customers, which could have a material adverse impact on our business and our results of operations.

Please see Part I, Item 1A. “Risk Factors” in our Annual Report on Form 10-K for the year ended August 30, 2025 and Part II, Item 1A. “Risk Factors” in this Quarterly Report on Form 10-Q for an additional discussion of risks and potential risks of adverse economic conditions on our business, financial condition and results of operations, including, without limitation, as a result of inflation, elevated interest rates and/or increases in interest rates, geopolitical issues, U.S. and foreign tariffs or other impositions on imported goods.

### Results of Operations

The following table presents certain selected financial data, including the percentage of revenues represented by each item, for the thirteen weeks ended November 29, 2025 and November 30, 2024.

*(In thousands, except percentages)*

|  | Thirteen Weeks Ended November 29, 2025 | % of Revenues | November 30, 2024 | % of Revenues | % Change |
| --- | ---: | ---: | ---: | ---: | ---: |
| Revenues | $621,318 | 100.0% | $604,908 | 100.0% | 2.7% |
| **Operating expenses:** |  |  |  |  |  |
| Cost of revenues (1) | 393,029 | 63.3 | 381,054 | 63.0 | 3.1 |
| Selling and administrative expenses (1) | 147,806 | 23.8 | 133,515 | 22.1 | 10.7 |
| Depreciation and amortization | 35,175 | 5.7 | 34,808 | 5.8 | 1.1 |
| Total operating expenses | 576,010 | 92.8 | 549,377 | 90.9 | 4.8 |
| Operating income | 45,308 | 7.3 | 55,531 | 9.2 | (18.4) |
| Other income, net | (1,670) | (0.3) | (2,405) | (0.4) | (30.6) |
| Income before income taxes | 46,978 | 7.6 | 57,936 | 9.6 | (18.9) |
| Provision for income taxes | 12,615 | 2.0 | 14,831 | 2.5 | (14.9) |
| Net income | $34,363 | 5.5% | $43,105 | 7.1% | (20.3)% |

(1) Exclusive of depreciation on our property, plant and equipment and amortization on our intangible assets.

#### General

We derive our revenues from the services described under “Business Overview” above.

Cost of revenues include the amortization of rental merchandise in service and merchandise costs related to direct sales as well as labor and other production, service and delivery costs, and distribution costs associated with operating our Uniform & Facility Service Solutions operations, Other segment facilities, and First Aid & Safety Solutions locations. Selling and administrative costs include costs related to our sales and marketing functions as well as general and administrative costs associated with our corporate offices, non-operating environmental sites and operating locations including information systems, engineering, materials management, manufacturing planning, finance, budgeting, and human resources.

In fiscal 2022, we initiated a multiyear ERP project that we plan to continue through 2027, with early phases focused on master data management and finance capabilities followed by subsequent phases with a strong focus on supply chain and procurement automation and technology. We believe that this initiative will become the foundation of our systems technology footprint and will integrate and complement the capabilities of our other core systems. We expect the ERP system, and the new supply chain and procurement capabilities that it will provide to enable lower operating costs and contribute to the reduction of customer churn. Such benefits are expected to be delivered through enhanced inventory utilization and vendor management, improved response times to customer orders and more efficient back-end processes. As of November 29, 2025, we capitalized $51.5 million related to our ERP project. We refer to our ERP project as our “Key Initiative”.

### Thirteen weeks ended November 29, 2025 compared with thirteen weeks ended November 30, 2024

#### Revenues

*(In thousands, except percentages)*

|  | November 29, 2025 | November 30, 2024 | Dollar Change | Percent Change |
| --- | ---: | ---: | ---: | ---: |
| Uniform & Facility Service Solutions | $565,892 | $552,752 | $13,140 | 2.4% |
| First Aid & Safety Solutions | 30,244 | 26,222 | 4,022 | 15.3% |
| Other | 25,182 | 25,934 | (752) | (2.9)% |
| Total consolidated revenues | $621,318 | $604,908 | $16,410 | 2.7% |

The increase in consolidated revenues of 2.7% during the thirteen weeks ended November 29, 2025 compared to the prior year comparable period was due primarily to growth in our Uniform & Facility Service Solutions of 2.4%. The increase in our Uniform & Facility Service Solutions was due to organic growth of 2.4%. The Uniform & Facility Service Solutions organic growth rate was primarily the result of solid new account sales and benefited from improve customer retention. The effect of the Canadian dollar exchange rate resulted in changes in our revenues of (0.1)%.

First Aid & Safety Service Solutions revenues in the thirteen weeks ended November 29, 2025 increased 15.3% compared to the prior year comparable period due primarily to double-digit growth in our van business.

In the thirteen weeks ended November 29, 2025, Other segment revenues were impacted by the beginning of a wind-down of a large refurbishment project, as well as a lower number of reactor outages due to the cyclical nature of the nuclear business. Other segment results are often affected by seasonality and the timing and length of its customers’ power reactor outages as well as its project-based activities.

#### Cost of revenues

*(In thousands, except percentages)*

|  | November 29, 2025 | November 30, 2024 | Dollar Change | Percent Change |
| --- | ---: | ---: | ---: | ---: |
| Cost of revenues | $393,029 | $381,054 | $11,975 | 3.1% |
| % of Revenues | 63.3% | 63.0% |  |  |

The increase in consolidated cost of revenues during the thirteen weeks ended November 29, 2025 compared to the prior year comparable period was primarily attributable to investments in service staffing to drive continued improvement in our customer retention and higher healthcare claims expenses. These increases were partially offset by lower merchandise costs as a percentage of revenues compared to the prior year comparable period.

#### Selling and administrative expenses

*(In thousands, except percentages)*

|  | November 29, 2025 | November 30, 2024 | Dollar Change | Percent Change |
| --- | ---: | ---: | ---: | ---: |
| Selling and administrative expenses | $147,806 | $133,515 | $14,291 | 10.7% |
| % of Revenues | 23.8% | 22.1% |  |  |

The increase in selling and administrative costs during the thirteen weeks ended November 29, 2025 compared to the prior year comparable period was due primarily to anticipated investments in accelerating growth and our digital transformation. In addition, selling and administrative costs were affected by higher legal costs of $1.6 million and healthcare claims of $1.4 million. These increases were partially offset by lower costs related to the Company’s Key Initiative, which totaled $2.3 million during the thirteen weeks ended November 29, 2025 compared to $2.5 million during the prior year comparable period.

#### Depreciation and amortization

*(In thousands, except percentages)*

|  | November 29, 2025 | November 30, 2024 | Dollar Change | Percent Change |
| --- | ---: | ---: | ---: | ---: |
| Depreciation and amortization | $35,175 | $34,808 | $367 | 1.1% |
| % of Revenues | 5.7% | 5.8% |  |  |

Depreciation and amortization expense remained relatively consistent during the thirteen weeks ended November 29, 2025 compared to the prior year comparable period.

#### Operating income

For the thirteen weeks ended November 29, 2025 and November 30, 2024, changes in our revenues and costs as discussed above resulted in the following changes in our operating income and margin:

*(In thousands, except percentages)*

|  | November 29, 2025 | November 30, 2024 | Dollar Change | Percent Change |
| --- | ---: | ---: | ---: | ---: |
| Uniform & Facility Service Solutions | $41,837 | $48,520 | $(6,683) | (13.8)% |
| First Aid & Safety Solutions | (402) | 341 | (743) | (217.9)% |
| Other | 3,873 | 6,670 | (2,797) | (41.9)% |
| Operating income | $45,308 | $55,531 | $(10,223) | (18.4)% |
| Operating income margin | 7.3% | 9.2% |  |  |

#### Other income, net

*(In thousands, except percentages)*

|  | November 29, 2025 | November 30, 2024 | Dollar Change | Percent Change |
| --- | ---: | ---: | ---: | ---: |
| Interest income, net | $(1,929) | $(2,695) | $766 | (28.4)% |
| Other expense, net | 259 | 290 | (31) | (10.7)% |
| Total other income, net | $(1,670) | $(2,405) | $735 | (30.6)% |

Other income, net, for the thirteen weeks ended November 29, 2025 decreased compared to the prior year comparable period, primarily reflecting lower cash reserves and lower interest rates, which reduced interest income, along with higher bank fees.

#### Provision for income taxes

*(In thousands, except percentages)*

|  | November 29, 2025 | November 30, 2024 | Dollar Change | Percent Change |
| --- | ---: | ---: | ---: | ---: |
| Provision for income taxes | $12,615 | $14,831 | $(2,216) | (14.9)% |
| Effective income tax rate | 26.9% | 25.6% |  |  |

The increase in the effective tax rate for the thirteen weeks ended November 29, 2025 as compared to the corresponding period in the prior year was due primarily to the timing and amount of excess tax benefits and deficiencies associated with employee share-based payments.

### Liquidity and Capital Resources

#### General

Cash and cash equivalents, and short-term investments totaled $129.5 million as of November 29, 2025, a decrease of $79.6 million from $209.2 million as of August 30, 2025. The decrease in cash and cash equivalents and short-term investments was largely driven by our continued investment in our business with capital expenditures totaling $38.9 million, $32.7 million of share repurchases, $13.3 million of First Aid & Safety Solutions acquisitions and $6.1 million of dividend payments. These decreases were partially offset by $14.9 million of cash provided from operating activities during the thirteen weeks ended November 29, 2025.

On April 8, 2025, our Board of Directors authorized a new share repurchase program to repurchase up to $100.0 million of our outstanding shares of Common Stock, inclusive of the amount which remained available under the existing share repurchase program approved in 2023.

Pursuant to the share repurchase program, we repurchased 194,100 shares of our Common Stock for an aggregate of approximately $31.7 million during the thirteen weeks ended November 29, 2025. As of November 29, 2025, we had $8.9 million remaining to repurchase shares under the share repurchase program.

We believe, although there can be no assurance, that our current cash and cash equivalents, our cash generated from future operations and amounts available under our Credit Agreement (as defined below) will be sufficient to meet our current anticipated working capital and capital expenditure requirements for at least the next 12 months and will enable us to manage the impacts of inflation and address related liquidity needs.

Cash flows provided by operating activities have historically been the primary source of our liquidity. We generally use these cash flows to fund most, if not all, of our operations, capital expenditure and acquisition activities as well as dividends on our Common Stock and stock repurchases. We may also use cash flows provided by operating activities, as well as proceeds from long-term debt, to fund growth and acquisition opportunities, as well as other cash requirements.

Sources and uses of cash flows for the thirteen weeks ended November 29, 2025 and November 30, 2024, respectively, are summarized as follows:

*(In thousands, except percentages)*

|  | November 29, 2025 | November 30, 2024 | Dollar Change | Percent Change |
| --- | ---: | ---: | ---: | ---: |
| Net cash provided by operating activities | $14,851 | $58,124 | $(43,273) | (74.4)% |
| Net cash used in investing activities | (52,100) | (37,460) | (14,640) | 39.1% |
| Net cash used in financing activities | (42,059) | (15,551) | (26,508) | 170.5% |
| Effect of exchange rate changes | (216) | (438) | 222 | (50.7)% |
| Net (decrease) increase in cash and cash equivalents | $(79,524) | $4,675 | $(84,199) | (1801.0)% |

#### Net Cash Provided by Operating Activities

The net cash provided by operating activities during the thirteen weeks ended November 29, 2025 decreased as compared to the prior year comparable period due primarily to unfavorable changes in rental merchandise in service of $12.9 million, prepaid and accrued income taxes of $10.2 million, accrued liabilities of $8.5 million and lower profitability.

The unfavorable impact from merchandise in service was due primarily to the installment of garments for several large customers during the thirteen weeks ended November 29, 2025. The increase in prepaid and accrued income taxes reflects the impact of federal and state tax payments made during the first quarter of fiscal 2026. The decrease in accrued liabilities was driven primarily by the payout of fiscal 2025 management bonuses during the period.

In addition, net cash provided by operating activities was negatively impacted by a $5.4 million increase in prepaid expenses and other current assets and a $4.9 million increase in accounts receivable during the thirteen weeks ended November 29, 2025 compared to the prior year comparable period. The increase in prepaid expenses and other current assets was driven primarily by higher prepayments for annual renewals of information technology contracts and insurance policies, while the increase in accounts receivable was due primarily to higher volume of revenue during the thirteen weeks ended November 29, 2025.

These increases were partially offset by a $5.1 million increase in accounts payable due primarily to the timing of cash payments and a $1.2 million decrease in inventories, driven by the timing of shipments.

#### Net Cash Used in Investing Activities

The net cash used in investing activities during the thirteen weeks ended November 29, 2025 increased as compared to the prior year comparable period due primarily to an increase in cash paid for acquisitions of $11.0 million and increase in capital expenditures of $5.3 million. Offsetting these increases was a decrease in net investment in certificates of deposit of $1.7 million

#### Net Cash Used in Financing Activities

The net cash used in financing activities during the thirteen weeks ended November 29, 2025 increased as compared to the prior year comparable period due primarily to a $26.4 million increase in the repurchase of Common Stock during the period.

#### Long-term Debt and Borrowing Capacity

See Note 12, “Long-Term Debt” to our Consolidated Financial Statements included in this Quarterly Report on Form 10-Q for more information on long-term debt and borrowing capacity.

#### Derivative Instruments and Hedging Activities

See Item 3. “Quantitative and Qualitative Disclosures About Market Risk” in this Quarterly Report on Form 10-Q for information regarding our derivative instruments and hedging activities.

#### Environmental and Legal Contingencies

We are involved with environmental investigation, monitoring and remediation activities at certain sites. In addition, from time to time, we are also subject to legal and regulatory proceedings and claims arising from the conduct of our business operations, including but not limited to, personal injury, customer contract, employment claims and environmental and tax matters as described. We maintain insurance coverage providing indemnification against many of such claims, and we do not expect, although there can be no assurance, that we will sustain any material loss as a result thereof. Refer to Note 10, “Commitments and Contingencies,” to the Consolidated Financial Statements, as well as Part II, Item 1A. “Risk Factors” below and in our Annual Report on Form 10-K for the year ended August 30, 2025, for further discussion.

In addition, in the fourth quarter of fiscal 2022, the Mexican federal tax authority issued a tax assessment on our subsidiary in Mexico for fiscal 2016 import taxes, value added taxes and custom processing fees of over $17.0 million, plus surcharges, fines and penalties of over $67.7 million for a total assessment of over $84.7 million. We challenged the validity of the tax assessment through an appeal process. In the first quarter of fiscal 2025, the Federal Tax Court in Mexico made a determination partially in our favor. Following the Federal Tax Court’s determination, we filed a constitutional action before the Federal Administrative Court. In addition, the federal tax authority appealed the determination of the Federal Tax Court. While we are unable to ascertain the ultimate outcome of this matter, based on the information currently available, we believe that a loss with respect to this matter is neither probable nor remote. Given the uncertainty associated with the ultimate resolution of this matter, we are unable to reasonably assess an estimate or range of estimates of any potential losses.

While it is impossible for us to ascertain the ultimate legal and financial liability with respect to contingent liabilities, including lawsuits and environmental contingencies, we believe that the aggregate amount of such liabilities, if any, in excess of amounts covered by insurance have been properly accrued in accordance with accounting principles under U.S. GAAP. It is possible, however, that the future financial position and/or results of operations for any particular future period could be materially affected by changes in our assumptions or strategies related to these contingencies or changes out of our control.

#### Contractual Obligations and Other Commercial Commitments

As of November 29, 2025, there were no material changes to our contractual obligations that were disclosed in our Annual Report on Form 10-K for the year ended August 30, 2025. As of November 29, 2025, we did not have any off-balance sheet arrangements.

### Critical Accounting Policies and Estimates

The discussion of our financial condition and results of operations is based upon the Consolidated Financial Statements, which have been prepared in conformity with U.S. GAAP. As such, management is required to make certain estimates, judgments and assumptions that are believed to be reasonable based on the information available. These estimates and assumptions affect the reported amount of assets and liabilities, revenues and expenses, and disclosure of contingent assets and liabilities at the date of the financial statements. Actual results may differ from these estimates under different assumptions or conditions.

Critical accounting estimates are defined as those that are reflective of significant judgments and uncertainties, the most important and pervasive accounting estimates used and areas most sensitive to material changes from external factors. The critical accounting estimates that we believe affect our more significant judgments and estimates used in the preparation of our Consolidated Financial Statements presented in this report are described in Part II, Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and in the Notes to the Consolidated Financial Statements that are each included in our Annual Report on Form 10-K for the year ended August 30, 2025. There have been no significant changes in our critical accounting estimates since the year ended August 30, 2025.

### Recent Accounting Pronouncements

See Note 2, “Recent Accounting Pronouncements” to our Consolidated Financial Statements included in this Quarterly Report on Form 10-Q for more information on recently implemented and issued accounting standards.

## Market risk

As filed, 4,984 characters.

#### Foreign Currency Exchange Risk

We have determined that all of our foreign subsidiaries operate primarily in local currencies that represent the functional currencies of such subsidiaries. All assets and liabilities of our foreign subsidiaries are translated into U.S. dollars using the exchange rate prevailing at the balance sheet date. The effects of exchange rate fluctuations on the translation of assets and liabilities are recorded as a component of shareholders’ equity. Revenues and expenses are translated at the average exchange rates in effect during each month of the fiscal year. As such, our financial condition and operating results are affected by fluctuations in the value of the U.S. dollar as compared to currencies in foreign countries. Revenues denominated in currencies other than the U.S. dollar represented approximately 7.3% of total consolidated revenues for the thirteen weeks ended November 29, 2025. Total assets denominated in currencies other than the U.S. dollar represented approximately 7.0% of our total consolidated assets for both November 29, 2025 and August 30, 2025. If exchange rates had increased or decreased by 10% from the actual rates in effect during the thirteen weeks ended November 29, 2025, our revenues would have increased or decreased by $4.5 million, and total assets as of November 29, 2025 would have increased or decreased by approximately $19.4 million.

In August 2021, we entered into twenty forward contracts to exchange CAD for U.S. dollars at fixed exchange rates in order to manage our exposure related to certain forecasted CAD denominated sales of one of our subsidiaries. The hedged transactions are specified as the first amount of CAD denominated revenues invoiced by one of our domestic subsidiaries each fiscal quarter, beginning in the first fiscal quarter of 2022 and continuing through the fourth fiscal quarter of 2026. In total, we will sell approximately 14.1 million CAD at an average Canadian-dollar exchange rate of 0.7861 over these quarterly periods. We concluded that the forward contracts met the criteria to qualify as a cash flow hedge under U.S. GAAP.

As of November 29, 2025, we had forward contracts with a notional value of approximately 1.4 million CAD outstanding and recorded the fair value of the contracts of $0.1 million in prepaid expenses and other current assets with a corresponding gain of $0.1 million in accumulated other comprehensive loss, which was recorded net of tax. During the thirteen weeks ended November 29, 2025, we reclassified a nominal amount from accumulated other comprehensive loss to revenue related to the derivative financial instruments. The gain on these forward contracts that resulted in a decrease to accumulated other comprehensive loss as of November 29, 2025 is expected to be reclassified to revenues prior to their maturity on August 29, 2026.

Other than the forward contracts, discussed above, we do not operate a hedging program to mitigate the effect of a significant change in the value of the functional currencies of our foreign subsidiaries, which include the Canadian dollar, euro, British pound, Mexican peso and Nicaraguan cordoba, as compared to the U.S. dollar. Any losses or gains resulting from unhedged foreign currency transactions, including exchange rate fluctuations on intercompany accounts are reported as transaction losses (gains) in our other income, net. The intercompany payables and receivables are denominated in Canadian dollars, euros, British pounds, Mexican pesos and Nicaraguan cordobas. During the thirteen weeks ended November 29, 2025, transaction gains included in other income, net were approximately $0.1 million. If exchange rates had increased or decreased by 10% during the thirteen weeks ended November 29, 2025, we would have recognized exchange gains or losses of approximately $0.1 million.

#### Interest Rate Sensitivity

We are exposed to market risk from changes in interest rates, which may adversely affect our financial position, results of operations and cash flows. In seeking to minimize the risks from interest rate fluctuations, we manage exposures through our operating and financing activities. We are exposed to interest rate risk primarily through borrowings under our Credit Agreement. During the thirteen weeks ended November 29, 2025, we had no outstanding borrowings under the Credit Agreement. Under the Credit Agreement, we borrow funds at variable interest rates based on, at our election, the SOFR rate or a base rate, plus in each case a spread based on our consolidated funded debt ratio. To the extent we have borrowings outstanding under the Credit Agreement, changes in interest rates result in changes in our interest expense.

Please see Item 1A. “Risk Factors” in our Annual Report on Form 10-K for the year ended August 30, 2025 for an additional discussion of risks and potential risks on our business, financial performance and the market price of our Common Stock.

## Controls and procedures

As filed, 5,150 characters.

#### Disclosure Controls and Procedures

As required by Rule 13a-15 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), we carried out an evaluation under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this report. Based upon their evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, solely as a result of the material weakness previously identified by management and described in our Annual Report on Form 10-K for the year ended August 30, 2025, our disclosure controls and procedures were not effective to ensure that material information relating to the Company required to be disclosed by the Company in reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms and to ensure that such information is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. In designing and evaluating our disclosure controls and procedures, our management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurances of achieving the desired control objectives, and management necessarily was required to apply our judgment in designing and evaluating the controls and procedures. We continue to review our disclosure controls and procedures, and our internal control over financial reporting, and may from time to time make changes aimed at enhancing their effectiveness and to ensure that our systems evolve with our business.

#### Changes in Internal Control over Financial Reporting

Other than the remediation measures with respect to the material weakness described below, there were no changes in our internal control over financial reporting during the first quarter of fiscal 2026 that have materially affected, or that are reasonably likely to materially affect, our internal control over financial reporting.

#### Previously Identified Material Weakness

As described in Part II, Item 9A of our Annual Report on Form 10-K for the year ended August 30, 2025, we previously identified a material weakness related to our CRM system which affected revenue and receivables as well as a group of legacy applications which affected revenue and receivables, supply inventory and merchandise in service. Consequently, our automated and manual business process controls that rely upon information from our IT systems were also deemed ineffective because they could have been adversely impacted.

#### Remediation

Our management is committed to maintaining a strong internal control environment. In response to the material weakness described in Part II, Item 9A of our Annual Report on Form 10-K for the year ended August 30, 2025, we implemented a number of remedial actions, including (i) redesigning our manage change and manage access processes and controls, (ii) investing additional resources to enhance oversight and involvement from our recently created Process, Risk and Controls group, (iii) strengthening our internal policies related to IT general controls (“ITGCs”), (iv) enhancing training and awareness programs addressing ITGCs and policies, including further education of control owners regarding the principles and requirements of each control, and (v) progressing our implementation of an Identity and Access Management (IAM) system, which will provide enhanced control over the provisioning of user access.

As a result of these efforts, we have made significant progress in remediating the design and operating effectiveness of our control environment and successfully addressed ITGCs for several key financial systems, including our legacy ERP platform and supporting tools and utilities.

We also advanced remediation efforts related to deficiencies in change management and access management for our CRM system and certain legacy applications, though some action items remained incomplete at the end of fiscal 2025.

Our focus remains on resolving the design and operational issues tied to change and access management in both the CRM and other legacy applications. At the same time, we are investing in broader IT system improvements, including the implementation of Oracle Cloud ERP. While unanticipated delays and complexities may extend the timeline, our plan at this time is to fully remediate the identified material weakness by the end of fiscal 2026.

Our Chief Executive Officer and Chief Financial Officer have certified in certifications furnished with this Quarterly Report on Form 10-Q that, to the best of their knowledge, the information contained in this Quarterly Report on Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company as of, and for, the periods presented in this Quarterly Report on Form 10-Q.

## Risk factors

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In addition to the other information set forth in this report, you should carefully consider the factors discussed in Part I, Item 1A. “Risk Factors” in our Annual Report on Form 10-K for the year ended August 30, 2025, which could materially affect our business, financial condition, and future results. The risks described in our Annual Report on Form 10-K for the year ended August 30, 2025 are not the only risks that we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition, and operating results. Except to the extent previously updated or to the extent additional factual information disclosed elsewhere in this Quarterly Report on Form 10-Q relates to such risk factors (including, without limitation, the matters discussed in Part I, Item 2 – “Management’s Discussion and Analysis of Financial Condition and Results of Operations”), there have been no material changes to the risk factors set forth in our Annual Report on Form 10-K for the year ended August 30, 2025.

Filed Jan 7, 2026.
Source: SEC EDGAR, the filing index for accession 0001193125-26-006587. Last ingested by Listed: Nov 3, 2026, 21:35 ET. No prices; not investment advice.