Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Forward Looking Statements

The following discussion and analysis should be read in conjunction with our Annual Report on Form 10-K for the fiscal year ended December 30, 2023 (the “2023 Form 10-K”) and subsequent Quarterly Reports on Form 10-Q. This Quarterly Report on Form 10-Q contains forward-looking statements and information. The forward-looking statements included herein are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 (the “PSLRA”). All statements, other than statements of historical facts, which address activities, events, or developments that we expect or anticipate will or may occur in the future, including sales and earnings growth, new store growth, estimated results of operations in future periods (including, but not limited to, sales, comparable store sales, operating margins, net income, and earnings per diluted share), the declaration and payment of dividends, the timing and amount of share repurchases, future capital expenditures (including their timing, amount and nature), sale-leasebacks, acquisitions, business strategy, strategic initiatives, expansion and growth of our business operations, and other such matters are forward-looking statements. Forward-looking statements are usually identified by or are associated with such words as “will,” “plan,” “intend,” “expect,” “believe,” “anticipate,” “optimistic,” “forecasted” and similar terminology. These forward-looking statements may be affected by certain risks and uncertainties, any one, or a combination of which, could materially affect the results of our operations. To take advantage of the safe harbor provided by the PSLRA, we have identified certain factors, in Part I, Item 1A. “Risk Factors” in our 2023 Form 10-K and in Part II, Item 1A of this Form 10-Q, which may cause actual results to differ materially from those expressed in any forward-looking statements. These “Risk Factors” may be updated from time to time in our quarterly reports on Form 10-Q or other subsequent filings with the SEC.

Forward-looking statements made by or on behalf of the Company are based on our knowledge of our business and the environment in which we operate, but because of the factors listed above or other factors, actual results could differ materially from those reflected by any forward-looking statements. Consequently, all of the forward-looking statements made are qualified by these cautionary statements and those contained in the Company’s 2023 Form 10-K and other filings with the Securities and Exchange Commission (the “SEC”). There can be no assurance that the actual results or developments anticipated by the Company will be realized or, even if substantially realized, that they will have the expected consequences to or effects on the Company or our business and operations. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. We do not undertake any obligation to release publicly any revisions to these forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events, except as required by law.

Seasonality and Weather

Our business is seasonal. Historically, our sales and profits are the highest in the second and fourth fiscal quarters due to the sale of seasonal products. We usually experience our highest inventory and accounts payable balances during our first fiscal quarter for purchases of seasonal products to support the higher sales volume of the spring selling season, and again during our third fiscal quarter to support the higher sales volume of the cold weather selling season. We believe that our business can be more accurately assessed by focusing on the performance of the halves, not the quarters, due to the fact that different weather patterns from year-to-year can shift the timing of sales and profits between quarters, particularly between the first and second fiscal quarters and the third and fourth fiscal quarters.

Historically, weather conditions, including unseasonably warm weather in the fall and winter months and unseasonably cool weather in the spring and summer months, have unfavorably affected the timing and volume of our sales and results of operations. In addition, extreme weather conditions, including snow and ice storms, flood and wind damage, hurricanes, tornadoes, extreme rain, and droughts have impacted operating results both negatively and positively, depending on the severity and length of these conditions. Our strategy is to manage product flow and adjust merchandise assortments and depth of inventory to capitalize on seasonal demand trends, but there is no guarantee that we will be able to successfully execute this strategy. For more information regarding the risks we face in this regard, see Item 1A. “Risk Factors—Weather and Climate Risks” in our 2023 Form 10-K.

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Performance Metrics

Comparable Store Metrics

Comparable store metrics are a key performance indicator used in the retail industry and by the Company to measure the performance of the underlying business. Our comparable store metrics are calculated on an annual basis using sales generated from all stores open at least one year and all online sales and exclude certain adjustments to net sales. Stores closed during either of the years being compared are removed from our comparable store metrics calculations. Stores relocated during either of the years being compared are not removed from our comparable store metrics calculations. If the effect of relocated stores on our comparable store metrics calculations became material, we would remove relocated stores from the calculations. An Orscheln store is considered a comparable store one year after its point-of-sale system conversion. Fiscal 2024 and fiscal 2023 each include 52 weeks. Comparable store sales is intended only as supplemental information and is not a substitute for net sales presented in accordance with U.S. GAAP.

Transaction Count and Transaction Value

Transaction count and transaction value metrics are used by the Company to measure sales performance. Transaction count represents the number of customer transactions during a given period. Transaction value represents the average amount paid per transaction and is calculated as net sales divided by the total number of customer transactions during a given period.

Results of Operations

The following table sets forth, for the periods indicated, certain items in the Consolidated Statements of Income expressed as a percentage of net sales.

			For the Fiscal Three												For the Fiscal Nine
			Months Ended												Months Ended
			September 28, 2024						September 30, 2023						September 28, 2024						September 30, 2023
Net sales			100.00		%				100.00		%				100.00		%				100.00		%
Cost of merchandise sold			62.79						63.35						63.39						63.88
Gross profit			37.21						36.65						36.61						36.12
Selling, general and administrative expenses			24.57						24.01						23.32						22.95
Depreciation and amortization			3.27						2.65						2.94						2.66
Operating income			9.36						9.99						10.34						10.51
Interest expense, net			0.40						0.28						0.34						0.32
Income before income taxes			8.96						9.71						10.01						10.19
Income tax expense			2.00						2.24						2.22						2.30
Net income			6.96		%				7.47		%				7.78		%				7.89		%

Note: Percent of net sales amounts may not sum to totals due to rounding.

Fiscal Three Months (Third Quarter) Ended September 28, 2024 and September 30, 2023

Net sales for the third quarter of fiscal 2024 increased 1.6% to $3.47 billion from $3.41 billion for the third quarter of fiscal 2023. The increase in net sales was driven by new store openings. Comparable store sales for the third quarter of fiscal 2024 decreased 0.2%, driven by a comparable average transaction count increase of 0.3%, offset by a comparable average ticket decrease of 0.5%. Comparable store sales results reflect continued strength in big ticket categories, partially offset by declines in year-round discretionary categories. As expected, consumable, usable and edible products were modestly negative with positive unit growth offset by average unit price pressure. In the third quarter of fiscal 2023, net sales increased 4.3% and comparable store sales decreased 0.4%.

Sales from new stores were $70.1 million for the third quarter of fiscal 2024, which represented 2.0 percentage points of the 1.6% net sales increase over third quarter fiscal 2023 net sales. For the third quarter of fiscal 2023, sales from stores open less

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than one year were $157.5 million, which represented 4.8 percentage points of the 4.3% increase over third quarter fiscal 2022 net sales.

The following table summarizes store growth for the fiscal three months ended September 28, 2024 and September 30, 2023:

			Fiscal Three Months Ended
Store Count Information:			September 28, 2024						September 30, 2023
Tractor Supply
Beginning of period			2,254						2,181
New stores opened			16						17
Stores closed			—						—
End of period			2,270						2,198
Petsense by Tractor Supply
Beginning of period			205						192
New stores opened			—						4
Stores closed			—						(1)
End of period			205						195
Consolidated end of period			2,475						2,393
Stores relocated			1						1

The following table indicates the percentage of net sales represented by each of our major product categories for the fiscal three months ended September 28, 2024 and September 30, 2023:

			Percent of Net Sales
			Fiscal Three Months Ended
Product Category:			September 28, 2024						September 30, 2023
Livestock, Equine, & Agriculture			28		%				29		%
Companion Animal			25		%				26		%
Seasonal & Recreation			22		%				20		%
Truck, Tool, & Hardware			17		%				17		%
Clothing, Gift, & Décor			8		%				8		%
Total			100		%				100		%

Gross profit increased 3.2% to $1.29 billion for the third quarter of fiscal 2024 from $1.25 billion for the third quarter of fiscal 2023. As a percent of net sales, gross margin in the third quarter of fiscal 2024 increased 56 basis points to 37.2% from 36.7% in the third quarter of fiscal 2023. The gross margin rate increase was primarily attributable to ongoing lower transportation costs along with disciplined product cost management and the continued execution of an everyday low price strategy. These improvements in gross margin rate were partially offset by growth in big ticket categories, which have below chain-average margins.

Selling, general and administrative (“SG&A”) expenses, including depreciation and amortization, increased 6.2% to $965.8 million for the third quarter of fiscal 2024 from $909.6 million for the third quarter of fiscal 2023. As a percent of net sales, SG&A expenses increased 119 basis points to 27.8% from 26.7% in the third quarter of fiscal 2023. The increase in SG&A as a percent of net sales was primarily attributable to planned growth investments, which included the onboarding of a new distribution center, lapping a one-time depreciation expense benefit in the prior year of $11.3 million or approximately 35 basis points, as well as modest deleverage of the Company’s fixed costs given the slight decline in comparable store sales. These factors were partially offset by a disciplined focus on productivity, cost control and modest benefits from the Company’s sale-leaseback strategy.

Operating income for the third quarter of fiscal 2024 decreased 4.8% to $324.6 million from $340.9 million in the third quarter of fiscal 2023.

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The effective income tax rate was 22.3% in the third quarter of fiscal 2024 compared to 23.0% in the third quarter of fiscal 2023. The decrease in the effective income tax rate in the third quarter of fiscal 2024 compared to the third quarter of fiscal 2023 was driven primarily by a decrease in state income taxes and an increase in federal tax credits.

Net income for the third quarter of fiscal 2024 decreased 5.3% to $241.5 million, or $2.24 per diluted share, as compared to net income of $255.0 million, or $2.33 per diluted share, for the third quarter of fiscal 2023.

During the third quarter of fiscal 2024, we repurchased approximately 0.6 million shares of the Company’s common stock at a total cost of $149.8 million, excluding the 1% excise tax, as part of our share repurchase program and paid quarterly cash dividends totaling $117.8 million, returning $267.6 million to our stockholders.

Fiscal Nine Months Ended September 28, 2024 and September 30, 2023

Net sales for the first nine months of fiscal 2024 increased 2.0% to $11.11 billion from $10.90 billion for the first nine months of fiscal 2023. The increase in net sales was driven by growth in new store sales which increased 2.0%. Comparable store sales for the first nine months of fiscal 2024 were flat. The comparable store sales results for the first nine months of fiscal 2024 included an increase in comparable average transaction count of 0.3%, partially offset by a decrease in comparable average transaction value of 0.2%. In the first nine months of fiscal 2023, net sales increased 6.8% and comparable store sales increased 1.5%.

Sales from new stores were $219.1 million for the first nine months of fiscal 2024, which represented 2.0 percentage points of the 2.0% net sales increase over the first nine months of fiscal 2023 net sales. For the first nine months of fiscal 2023, sales from stores open less than one year were $498.2 million, which represented 4.9 percentage points of the 6.8% increase over the first nine months of fiscal 2022 net sales.

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The following table summarizes store growth for the fiscal nine months ended September 28, 2024 and September 30, 2023:

			Fiscal Nine Months Ended
Store Count Information:			September 28, 2024						September 30, 2023
Tractor Supply
Beginning of period			2,216						2,147
New stores opened			54						51
Stores closed			—						—
End of period			2,270						2,198
Petsense by Tractor Supply
Beginning of period			198						186
New stores opened			7						10
Stores closed			—						(1)
End of period			205						195
Consolidated, end of period			2,475						2,393
Stores relocated			4						5

The following table indicates the percentage of net sales represented by each of our major product categories for the fiscal nine months ended September 28, 2024 and September 30, 2023:

			Percent of Net Sales
			Fiscal Nine Months Ended
Product Category:			September 28, 2024						September 30, 2023
Livestock, Equine, & Agriculture			28		%				29		%
Companion Animal			24		%				25		%
Seasonal & Recreation			24		%				22		%
Truck, Tool, & Hardware			16		%				16		%
Clothing, Gift, & Décor			8		%				8		%
Total			100		%				100		%

Gross profit increased 3.3% to $4.07 billion for the first nine months of fiscal 2024 from $3.94 billion for the first nine months of fiscal 2023. As a percent of net sales, gross margin in the first nine months of fiscal 2024 increased 49 basis points to 36.6% from 36.1% in the first nine months of fiscal 2023. The gross margin rate increase was primarily attributable to lower transportation costs and disciplined product cost management. Additionally, gross margin continued to benefit from the Company’s ongoing execution of an everyday low price strategy.

Selling, general and administrative (“SG&A”) expenses, including depreciation and amortization, increased 4.6% to $2.92 billion for the first nine months of fiscal 2024 from $2.79 billion for the first nine months of fiscal 2023. As a percent of net sales, SG&A expenses increased 65 basis points to 26.3% for the first nine months of fiscal 2024 from 25.6% for the first nine months of fiscal 2023. The increase in SG&A as a percent of net sales was primarily attributable to the Company’s planned growth investments, which included higher depreciation and amortization. A modest deleverage of fixed costs given the level of comparable sales growth and start-up costs associated with the opening of a new distribution center also contributed to the increase in SG&A as a percent of net sales. These factors were partially offset by a disciplined focus on productivity, cost control and modest benefits from the Company’s sale-leaseback strategy.

Operating income for the first nine months of fiscal 2024 increased 0.4% to $1.15 billion compared to $1.14 billion in the first nine months of fiscal 2023.

The effective income tax rate was 22.2% in the first nine months of fiscal 2024 compared to 22.6% in the first nine months of fiscal 2023. The decrease in the effective income tax rate in the first nine months of fiscal 2024 compared to the first nine months of fiscal 2023 was driven primarily by a decrease in state income taxes.

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Net income for the first nine months of fiscal 2024 increased 0.6% to $864.8 million, or $8.00 per diluted share, as compared to net income of $859.3 million, or $7.81 per diluted share, for the first nine months of fiscal 2023.

During the first nine months of fiscal 2024, we repurchased approximately 1.6 million shares of the Company’s common stock at a total cost of $406.4 million, excluding the 1% excise tax, as part of our share repurchase program and paid quarterly cash dividends totaling $355.2 million, returning $761.6 million to our stockholders.

Liquidity and Capital Resources

In addition to normal operating expenses, our primary ongoing cash requirements are for new store expansion, existing store remodeling and improvements, store relocations, distribution facility capacity and improvements, information technology, inventory purchases, repayment of existing borrowings under our debt facilities, share repurchases, cash dividends, and selective acquisitions as opportunities arise.

Our primary ongoing sources of liquidity are existing cash balances, cash provided from operations, remaining funds available under our debt facilities, operating and finance leases, and normal trade credit. Our inventory and accounts payable levels typically build in the first and third fiscal quarters to support the higher sales volume of the spring and cold-weather selling seasons, respectively.

We plan to continue to leverage our sale-leaseback program on both existing owned stores and future new store openings in order to help fund our planned owned store development over the next several years.

We believe that our existing cash balances, expected cash flow from future operations, funds available under our debt facilities, operating and finance leases, normal trade credit, and access to the long-term debt capital markets will be sufficient to fund our operations and our capital expenditure needs, including new store openings, existing store remodeling and improvements, store relocations, distribution facility capacity and improvements, and information technology improvements, for the next 12 months and the longer term foreseeable future.

Debt

The following table summarizes the Company’s outstanding debt as of the dates indicated (in millions):

						September 28, 2024						December 30, 2023						September 30, 2023
5.25% Senior Notes						$	750.0					$	750.0					$	750.0
1.75% Senior Notes						650.0						650.0						650.0
3.70% Senior Notes (a)						150.0						150.0						150.0
Senior credit facilities:
Revolving Credit Facility						300.0						200.0						200.0
Total outstanding borrowings						1,850.0						1,750.0						1,750.0
Less: unamortized debt discounts and issuance costs						(18.8)						(21.0)						(21.7)
Total debt						1,831.2						1,729.0						1,728.3
Less: current portion of long-term debt						—						—						—
Long-term debt						$	1,831.2					$	1,729.0					$	1,728.3
Outstanding letters of credit						$	78.8					$	58.3					$	58.2

(a) Also referred to herein as the “Note Purchase Facility,” referring to the Note Purchase and Private Shelf Agreement dated as of August 14, 2017 by and among the Company, PGIM, Inc. and the noteholders party thereto, as amended through November 2, 2022, under which the notes were purchased.

For additional information about the Company’s debt and credit facilities, refer to Note 5 to the Consolidated Financial Statements.

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Cash Flows Provided by Operating Activities

Operating activities provided net cash of $903.6 million and $937.9 million in the first nine months of fiscal 2024 and fiscal 2023, respectively. The $34.3 million decrease in net cash provided by operating activities in the first nine months of fiscal 2024 compared to the first nine months of fiscal 2023 is due to changes in the following operating activities (in millions):

			Fiscal Nine Months Ended
			September 28, 2024						September 30, 2023						Variance
Net income			$	864.8					$	859.3					$	5.5
Depreciation and amortization			327.1						289.8						37.3
Gain on disposal of property and equipment			(38.8)						(27.5)						(11.3)
Share-based compensation expense			35.1						45.2						(10.1)
Deferred income taxes			(21.2)						8.1						(29.3)
Inventories and accounts payable			(266.7)						(134.0)						(132.7)
Prepaid expenses and other current assets			9.1						(28.6)						37.7
Accrued expenses			(38.6)						(126.8)						88.2
Income taxes			(11.9)						24.2						(36.1)
Other, net			44.7						28.2						16.5
Net cash provided by operating activities			$	903.6					$	937.9					$	(34.3)

Note: Amounts may not sum to totals due to rounding.

The $34.3 million decrease in net cash provided by operating activities in the first nine months of fiscal 2024 compared to the first nine months of fiscal 2023 was primarily driven by the increase in inventories and accounts payable due to overall Company growth, investments in both consumable, usable and edible products and big ticket inventory categories, and timing of accounts payable. This decrease was partially offset by changes in accrued expenses from timing of payments.

Cash Flows Used in Investing Activities

Investing activities used net cash of $460.1 million and $454.6 million in the first nine months of fiscal 2024 and fiscal 2023, respectively. The $5.5 million increase in net cash used in investing activities in the first nine months of fiscal 2024 compared to the first nine months of fiscal 2023 is due to changes in the following investing activities (in millions):

			Fiscal Nine Months Ended
			September 28, 2024						September 30, 2023						Variance
Existing stores			$	(209.8)					$	(246.2)					$	36.4
New stores, relocated stores and stores not yet opened			(178.8)						(72.3)						(106.5)
Information technology			(95.8)						(86.4)						(9.4)
Distribution center capacity and improvements			(45.2)						(120.4)						75.2
Corporate and other			(8.4)						(1.4)						(7.0)
Total capital expenditures			(538.0)						(526.7)						(11.3)
Proceeds from sale of property and equipment			77.9						57.8						20.1
Proceeds from Orscheln acquisition net working capital settlement			—						4.3						(4.3)
Proceeds from sale of Orscheln corporate headquarters and distribution center			—						10.0						(10.0)
Net cash used in investing activities			$	(460.1)					$	(454.6)					$	(5.5)

Note: Amounts may not sum to totals due to rounding.

The decrease in spending for existing stores in the first nine months of fiscal 2024 as compared to the first nine months of fiscal 2023 primarily reflects the ongoing completion of Orscheln store remodels throughout fiscal 2023. Adjusting for the

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completion of Orscheln store remodels, existing store capital spend reflects a continued commitment to strategic initiatives related to existing store remodels. This includes internal space productivity and side lot garden center transformations.

The increase in spending for new stores, relocated stores and stores not yet opened in the first nine months of fiscal 2024 as compared to the first nine months of fiscal 2023 is primarily attributable to increased capital outlay associated with our owned store development program. This program began in the third quarter of fiscal 2023.

The increase in spending for information technology in the first nine months of fiscal 2024 as compared to the first nine months of fiscal 2023 is attributable to continued support for improvements in mobility in our stores, our digital initiatives, increased security and compliance, and other strategic initiatives.

The decrease in spending for distribution center capacity and improvements in the first nine months of fiscal 2024 as compared to the first nine months of fiscal 2023 primarily reflects a reduction in distribution center construction projects. The first nine months of fiscal 2023 reflect construction costs associated with both the Navarre, Ohio distribution center, which opened during the first quarter of fiscal 2023, and the Maumelle, Arkansas distribution center, which opened during the second quarter of fiscal 2024. The first nine months of fiscal 2024 solely reflect construction costs associated with the Maumelle, Arkansas distribution center.

The increase in spending for corporate in the first nine months of fiscal 2024 as compared to the first nine months of fiscal 2023 is primarily attributable to an increase in spending on information technology projects at the Store Support Center related to supporting store efficiency initiatives.

In the first nine months of fiscal 2024, the Company opened 54 new Tractor Supply stores compared to 51 new Tractor Supply stores during the first nine months of fiscal 2023.

Our projected capital expenditures for fiscal 2024 are currently estimated to be in the range of $625.0 million to $700.0 million, net of proceeds from the sale of existing Company-owned stores as part of our sale-leaseback strategy. The capital expenditures include plans to open a total of approximately 80 new Tractor Supply stores, continue Project Fusion remodels and garden center transformations, and open a total of 10 to 15 new Petsense by Tractor Supply stores.

Cash Flows Used in Financing Activities

Financing activities used net cash of $654.3 million and $264.1 million in the first nine months of fiscal 2024 and fiscal 2023, respectively. The $390.2 million increase in net cash used in financing activities in the first nine months of fiscal 2024 compared to the first nine months of fiscal 2023 is due to changes in the following (in millions):

			Fiscal Nine Months Ended
			September 28, 2024						September 30, 2023						Variance
Net borrowings and repayments under debt facilities			$	100.0					$	572.0					$	(472.0)
Repurchase of common stock			(406.7)						(480.4)						73.7
Cash dividends paid to stockholders			(355.2)						(338.2)						(17.0)
Net proceeds from issuance of common stock			32.5						19.9						12.6
Other, net			(24.9)						(37.4)						12.5
Net cash used in financing activities			$	(654.3)					$	(264.1)					$	(390.2)

Note: Amounts may not sum to totals due to rounding.

The $390.2 million increase in net cash used in financing activities in the first nine months of fiscal 2024 compared to the first nine months of fiscal 2023 is primarily due to the reduced borrowing activity in the current period, partially offset by a decrease in the repurchase of common stock as compared to prior period.

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Dividends

During the first nine months of fiscal 2024 and fiscal 2023, the Company's Board of Directors declared the following cash dividends:

Date Declared						Dividend Amount Per Share of Common Stock						Record Date						Date Paid
August 7, 2024						$	1.10					August 26, 2024						September 10, 2024
May 8, 2024						$	1.10					May 28, 2024						June 11, 2024
February 5, 2024						$	1.10					February 26, 2024						March 12, 2024
August 9, 2023						$	1.03					August 28, 2023						September 12, 2023
May 10, 2023						$	1.03					May 30, 2023						June 13, 2023
February 8, 2023						$	1.03					February 27, 2023						March 14, 2023

It is the present intention of the Company’s Board of Directors to continue to pay a quarterly cash dividend; however, the declaration and payment of future dividends will be determined by the Company’s Board of Directors in its sole discretion and will depend upon the earnings, financial condition, and capital needs of the Company, along with any other factors that the Company’s Board of Directors deem relevant.

On November 6, 2024, the Company’s Board of Directors declared a quarterly cash dividend of $1.10 per share of the Company’s outstanding common stock. The dividend will be paid on December 10, 2024 to stockholders of record as of the close of business on November 25, 2024.

Share Repurchase Program

The Company’s Board of Directors has authorized common stock repurchases under a share repurchase program which was announced in February 2007. The total authorized amount of the program, which has been increased from time to time, is currently $6.50 billion, exclusive of any fees, commissions, or other expenses related to such repurchases. The share repurchase program does not have an expiration date. The repurchases may be made from time to time on the open market or in privately negotiated transactions. The timing and amount of any shares repurchased under the program will depend on a variety of factors, including price, corporate and regulatory requirements, capital availability, and other market conditions. Repurchased shares are accounted for at cost and will be held in treasury for future issuance. The program may be limited, temporarily paused, or terminated at any time without prior notice. As of September 28, 2024, the Company had remaining authorization under the share repurchase program of $641.7 million, exclusive of any fees, commissions, or other expenses.

The following table provides the number of shares repurchased, average price paid per share, and total cost of share repurchases pursuant to our publicly announced repurchase plan during the fiscal three and nine months ended September 28, 2024 and September 30, 2023, respectively (in thousands, except per share amounts):

			Fiscal Three Months Ended												Fiscal Nine Months Ended
			September 28, 2024						September 30, 2023						September 28, 2024						September 30, 2023
Total number of shares repurchased			561						632						1,568						2,190
Average price paid per share			$	267.12					$	214.45					$	259.22					$	222.20
Total cost of share repurchases (a)			$	151,342					$	136,778					$	410,431					$	491,394

(a) Effective January 1, 2023, the Company’s share repurchases are subject to a 1% excise tax as a result of the Inflation Reduction Act of 2022. Excise taxes incurred on share repurchases represent direct costs of the repurchase and are recorded as a part of the cost basis of the shares within treasury stock. The cost of shares repurchased may differ from the repurchases of common stock amounts in the consolidated statements of cash flows due to unsettled share repurchases at the end of a period and excise taxes incurred on share repurchases.

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Significant Contractual Obligations and Commercial Commitments

For a description of the Company’s significant contractual obligations and commercial commitments, refer to Note 12 to the Consolidated Financial Statements included under Part II, Item 8 in our 2023 Form 10-K. As of September 28, 2024, there has been no other material change in the information disclosed in the 2023 Form 10-K.

Critical Accounting Policies and Estimates

Management’s discussion and analysis of the Company’s financial position and results of operations are based upon its Consolidated Financial Statements, which have been prepared in accordance with U.S. GAAP. The preparation of these financial statements requires management to make informed estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. The Company’s critical accounting policies, including areas of critical management judgments and estimates, have primary impact on the following financial statement areas:

-			Inventory valuation
-			Self-insurance reserves
-			Impairment of long-lived assets
-			Impairment of goodwill and other indefinite-lived intangible assets

See Note 1 to the Consolidated Financial Statements in our 2023 Form 10-K for a discussion of the Company’s critical accounting policies. The Company’s financial position and/or results of operations may be materially different when reported under different conditions or when using different assumptions in the application of such policies. In the event estimates or assumptions prove to be different from actual amounts, adjustments are made in subsequent periods to reflect more current information. There have been no changes to our critical accounting policies and estimates as previously disclosed in our 2023 Form 10-K.

New Accounting Pronouncements

For recently adopted accounting pronouncements and recently issued accounting pronouncements not yet adopted as of September 28, 2024, refer to Note 1 to the Consolidated Financial Statements included under Part I, Item 1 of this Quarterly Report on Form 10-Q.