Item 3. Quantitative and Qualitative Disclosures About Market Risk

There have been no material changes to our market risk exposure during the three months ended October 3, 2025 from those disclosed in Part II, Item 7A, Quantitative and Qualitative Disclosures About Market Risk in our 2025 Annual Report on Form 10-K.

Foreign Currency Risk

We performed sensitivity analyses as of October 3, 2025, using a modeling technique that measures the change in the fair values arising from a hypothetical 10% adverse movement in the levels of foreign currency exchange rates relative to the U.S. dollar, with all other variables held constant. The analyses cover all of our foreign currency derivative contracts used to offset the underlying exposures. The foreign currency exchange rates used in performing the sensitivity analyses were based on market rates in effect at October 3, 2025. The sensitivity analyses indicated that a hypothetical 10% adverse movement in foreign currency exchange rates relative to the U.S. dollar would result in a foreign exchange fair value loss of $70 million at October 3, 2025.

Interest Rate Risk

We have generally held a balance of fixed and variable rate debt. As of October 3, 2025, our variable rate debt outstanding consisted of our Term Loan A-3, which is based on various index rates as discussed further in Part II, Item 8, Note 8, Debt, of the Notes to Consolidated Financial Statements included in our 2025 Annual Report on Form 10-K. As of October 3, 2025, the outstanding balance on our variable rate debt was $1.62 billion and a one percent increase in the variable rate of interest would increase our annual interest expense by $16 million.