SEGMENT REPORTING

6 Months Ended

Aug. 16, 2025

SEGMENT REPORTING

SEGMENT REPORTING

8. SEGMENT REPORTING

The Company operates supermarkets, multi-department stores and fulfillment centers throughout the United States. The Company’s retail operations, which represent 99% of the Company’s consolidated sales, are its only reportable segment. The retail operations’ segment revenues are predominately earned as consumer products are sold to customers in our stores, fuel centers and via the Company’s eCommerce business. The Company aggregates its operating divisions into one reportable segment due to the operating divisions having similar economic characteristics with similar long-term financial performance. In addition, the Company’s operating divisions offer customers similar products, have similar distribution methods, operate in similar regulatory environments, purchase the majority of the merchandise for retail sale from similar (and in many cases identical) vendors on a coordinated basis from a centralized location, serve similar types of customers, and are allocated capital from a centralized location. Operating divisions are organized primarily on a geographical basis so the operating division management team can be responsive to local needs of the operating division and can execute company strategic plans and initiatives throughout the locations in their operating division. This geographical separation is the primary differentiation between these retail operating divisions. The geographical basis of organization reflects how the business is managed and how the Company’s Interim Chief Executive Officer, who acts as the Company’s chief operating decision maker (“CODM”), assesses performance internally. All of the Company’s operations are domestic.

The Company’s CODM assesses performance and allocates resources for the retail operations segment using segment FIFO earnings before net interest expense, income tax expense and depreciation and amortization (“EBITDA”). The Company defines FIFO EBITDA as EBITDA excluding the LIFO charge. The Company’s CODM also uses segment FIFO EBITDA to measure the operational effectiveness of the Company’s financial model, compare the performance of core operating results between periods, against budget and against competitors and evaluate whether to invest capital in the retail operations segment or in other parts of the Company, such as for share repurchases or dividend payments. The Company’s CODM is not provided asset information by reportable segment as asset information is provided to the CODM on a consolidated basis.

The following table presents the Company’s retail operations segment revenue, measure of segment profit or loss, significant segment expenses and reconciliation of retail operations segment FIFO EBITDA to consolidated net earnings before income tax expense and retail operations segment sales to consolidated sales for the second quarter and first two quarters of 2025 and 2024:

	Second Quarter Ended				Two Quarters Ended
	August 16,		August 17,		August 16,		August 17,
	2025		2024		2025		2024
Retail operations segment sales	$	33,670	$	32,942	$	78,451	$	76,951
Retail operations segment expenses:
Merchandise costs(1)		23,596		23,010		54,921		53,888
Expenses in gross(2)		2,470		2,535		5,653		5,852
Operating, general, and administrative		5,883		5,765		13,692		13,206
Rent		200		196		468		462
Retail operations segment FIFO EBITDA	$	1,521	$	1,436	$	3,717	$	3,543
Reconciliation of net earnings before income tax expense:
Retail operations segment FIFO EBITDA	$	1,521	$	1,436	$	3,717	$	3,543
Depreciation and amortization		(778)		(751)		(1,829)		(1,728)
LIFO charge		(62)		(21)		(102)		(62)
Other FIFO EBITDA(3)		182		151		399		356
Net interest expense		(144)		(84)		(343)		(207)
Non-service component of company-sponsored pension plan (expense) benefits		(3)		3		(4)		6
Gain (loss) on investments		56		(121)		37		(105)
Consolidated net earnings before income tax expense	$	772	$	613	$	1,875	$	1,803
Reconciliation of sales:
Retail operations segment sales	$	33,670	$	32,942	$	78,451	$	76,951
Other sales(3)		270		970		607		2,230
Consolidated sales	$	33,940	$	33,912	$	79,058	$	79,181

(1) Merchandise costs include product costs, net of discounts and allowances, and food production costs.

(2) Expenses in gross include advertising costs, warehousing costs, including receiving and inspection costs, and transportation costs.

(3) Other sales and other FIFO EBITDA primarily include other operating segments that are not part of the retail operations segment such as third-party media revenue, data analytic services, specialty pharmacy and in-store health clinics.