Modified · Executive Overview

Uncertainty remains regarding the potential impact of tariffs on consumer behavior and our business. Tariff rates on both direct imports and domestic purchases did not materially impact our financial results for the firstsecond quarter of 2026. The tariff environment remains dynamic, and the specific tariffs applicable to goods imported by us and our suppliers into the U.S. may continue to evolve. Tariff rate increases or expansions of tariff coverage affecting the products that we sell could have a significant impact on our business and on our customers’ budgets. We continue to monitor developments and will evaluate the impact of any tariff rate changes on our business and take action to mitigate such impact. There can be no assurance we will be successful in our efforts, or that price increasespricing actions, if they become necessaryincluding any future price increases, will not adversely affect customer behavior. FollowingDuring the February 20, second quarter of 2026 decision by the United States Supreme Court invalidating certain , we began receiving cash refunds related to IEEPA tariffs imposed under the International Emergency Economic Powers Act, we submitted claims with U.S. Customs and Border Protection seeking refunds for such tariffs that we previously paid. The exact timing and amount of refunds remain subject to uncertaintythat we had previously paid. We received the majority of the expected refunds during the quarter and reinvested a substantial portion of the refunds in our customer value proposition through targeted promotional activities and lower everyday prices.