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Q3 2026 RESULTS NOVEMBER 5 | 2026
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Forward Looking Statements and Non - GAAP 2 Certain statements herein are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are usually identifiable by words such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “forecast," “guidance,” “intend,” “likely,” “may,” “plan,” “position,” “possible,” “potential,” “probable,” “project,” “should,” “strategy,” “target,” “will,” or similar language. All statements other than statements of historical fact are forward-looking statements, including, but not limited to, statements about the Company’s strategic initiatives, future business and financial performance, revenue, earnings, cash flow, liquidity, restructuring and asset optimization plans, financial objectives, debt capital structure, operational plans and objectives, capital expenditures, organizational changes, cost reductions, expectations for macroeconomic conditions, marketing strategies, inflation, impairments, consumer behavior and preferences, labor costs and availability, supply chain and merchandising strategies and effects, technology investments, effective tax rates, regulatory changes and impacts, anticipated impacts of tariffs and other trade barriers, tariff refunds, compliance with debt covenants, statements about the status of, and capacity and utilization under, the Company’s supply chain financing arrangements and statements about the Company’s future credit ratings and outlook as well as statements regarding underlying assumptions related thereto. Forward-looking statements reflect the Company’s views based on historical results, current information and assumptions related to future developments. Except as may be required by law, the Company undertakes no obligation to update any forward-looking statements made herein. Forward-looking statements are subject to a number of risks and uncertainties that could cause actual results to differ materially from those projected or implied by the forward-looking statements. They include, among others, the Company’s ability to hire, train and retain qualified employees, the timing and implementation of strategic initiatives, risks associated with the Company’s restructuring and asset optimization plans, risks relating to incurrence of indebtedness and increased leverage, risks relating to the Company's credit ratings or perceived creditworthiness, the Company's ability to complete store openings, deterioration of general macroeconomic conditions, geopolitical factors, including tariffs, petroleum supply and prices, and trade restrictions, the highly competitive nature of the industry, demand for the Company’s products and services, risks relating to the impairment of assets, including intangible assets such as goodwill, access to financing on favorable terms, complexities in the Company’s inventory and supply chain, implementation and operation of information and technology systems and innovative technologies, and challenges with transforming and growing its business. Please refer to "Item 1A. Risk Factors" of the Company's most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission ("SEC"), as updated by the Company's subsequent filings with the SEC, for a description of these and other risks and uncertainties that could cause actual results to differ materially from those projected or implied by the forward-looking statements. Non-GAAP Financial Measures The Company's financial results include certain financial measures not derived in accordance with accounting principles generally accepted in the United States of America (“GAAP”). Non-GAAP financial measures, including Adjusted Net (loss) Income, Adjusted Diluted (loss) Earnings Per Share, Adjusted Gross Profit, Adjusted Gross Profit Margin, Adjusted Selling, General and Administrative (“SG&A”) Expense, Adjusted SG&A Margin, Adjusted Operating (loss) Income, Adjusted Operating (loss) Income Margin, Free Cash Flow and Adjusted Net Debt to Adjusted EBITDAR (“Net Leverage Ratio”) should not be used as a substitute for GAAP financial measures, or considered in isolation, for the purpose of analyzing our operating performance, financial position or cash flows. For additional information about these measures and a reconciliation to their most comparable GAAP measures, please refer to the Appendix in these materials.
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3 AGENDA Financial Update Ryan Grimsland Executive Vice President and Chief Financial Officer Q&A Business Update Shane O’Kelly President and Chief Executive Officer
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4 4 BUSINESS UPDATE Shane O’Kelly 4
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5 Strong Profitability In A Dynamic Environment DIY And Pro Sales Trends Improved Through Q3 Q3 2026 SUMMARY
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Assortment Availability PRIORITIZING KEY INITIATIVES TO DRIVE GROWTH Expand SKU coverage. Secure competitive costs. Field team partnership. Supply Chain Productivity Improve DC operations. Optimize transportation. Inventory management. Store Execution & DIY Sales Drive selling culture. Improve labor allocation. Technology tools to drive frontline productivity. Pro Sales Main Street growth. Increase Pro wallet share. 6
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7 7 FINANCIAL UPDATE Ryan Grimsland 7
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Adjusted Gross Margin 44.7% (16) bps YoY 8 Q3 2026 RESULTS Comparable Store Sales Growth (1.2%) YoY Net Sales $2.0B (1.2%) YoY Adjusted SG&A Margin 40.2% (26) bps YoY Adjusted Diluted Earnings Per Share $0.79 Adjusted Operating Income Margin 4.5% 10 bps YoY Net Leverage Ratio 2.2x Adj. Net Debt/ TTM Adj. EBITDAR Further discussion regarding our use of Non-GAAP financial measures and reconciliations between GAAP and non-GAAP results, including YoY changes, are included in this presentation.
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FY 2026 GUIDANCE SUMMARY 9 (1) Includes pre-tax interest expense of approximately $210 million and pre-tax interest income of approximately $105 million. The Company is not able to provide a reconciliation of these forward-looking non-GAAP measures presented herein because it is unable to predict with reasonable accuracy the value of certain adjustments and as a result, the comparable GAAP measures are unavailable without unreasonable efforts. ($ in million, except margins and per share data) Current - As of November 5, 2026 Prior Guidance Net sales Approx. $8,500 $8,485 - $8,575 Comparable store sales growth Approx. 1.00% 1.00% - 2.00% Adjusted operating income margin 4.00% - 4.30% 3.80% - 4.50% Adjusted diluted EPS (1) $2.75 - $3.10 $2.60 - $3.30 Capital expenditures Approx. $300 Approx. $300 Free cash flow Approx. $150 Approx. $100 Store growth New store openings 30 – 35 30 – 35 Market hub openings 15 – 20 15 – 20
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10 Q&A 10
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11 APPENDIX 11
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RECONCILIATION OF NON - GAAP FINANCIAL MEASURES The Company uses certain Non-GAAP financial measures described below to supplement the Company's unaudited condensed consolidated financial statements prepared and presented in accordance with GAAP and to understand and evaluate the Company's core operating performance. These Non-GAAP financial measures, which may be different than similarly titled measures used by other companies, are presented as the Company believes that such Non-GAAP financial measures provide useful information about our financial performance, enhance the overall understanding of our past performance and future prospects, and allow for greater transparency with respect to important metrics used by management for financial and operational decision-making. The Company is presenting these Non-GAAP metrics to provide investors insight to the information used by our management to evaluate our business and financial performance. The Company believes that these measures provide investors increased comparability of our core financial performance over multiple periods with other companies in our industry. The Company's Non-GAAP financial measures include Adjusted Gross Profit, Adjusted Gross Profit Margin, Adjusted Selling, General and Administrative expense (“Adjusted SG&A”), Adjusted SG&A Margin, Adjusted Operating Income (loss), Adjusted Operating Income (loss) Margin, Adjusted Net Income (loss), Adjusted Diluted Earnings (loss) Per Share (“Adjusted Diluted EPS”), Free Cash Flow and Adjusted Net Debt to Adjusted EBITDAR ("Net Leverage Ratio"), and should not be used as a substitute for GAAP financial measures, or considered in isolation, for the purpose of analyzing operating performance, financial position or cash flows. The Company has presented these Non-GAAP financial measures as the Company believes that the presentation of the financial results that exclude the categories of expenses and income listed below provide useful and indicative information about the performance of the of the Company’s base operations because the expenses and income vary from period to period in terms of size, nature and significance. The Company also adjusts for the income tax impact of these Non-GAAP adjustments using the estimated tax rate in effect for the respective Non-GAAP adjustments. Included below is a description of the categories of expenses and income that the Company has determined are not normal, recurring cash operating expenses necessary to operate the Company’s business. • Restructuring and other related expenses: Expenses directly incurred relating to announced restructuring initiatives. These expenses include severance expense, retention bonuses, incremental reserves related to the collectibility of receivables (inclusive of notes receivable) and third-party professional services expenses incurred for services provided in assisting in the development and execution of the plan(s). These expenses also include certain costs related to the distribution network optimization plan for the conversion of the stores and distribution centers to market hubs, including, realized losses on liquidated inventory, temporary labor, nonrecurring professional service fees and team member severance. • Impairments and write-down of assets: Expenses relating to the impairment of certain assets, including operating lease right-of-use ("ROU") assets, property and equipment, goodwill and intangible assets. These expenses also include incremental depreciation as a result of accelerating long-lived assets over a shorter useful life, ROU asset amortization after store closure, and incremental lease abandonment expenses as a result of accelerating ROU asset amortization for leases the Company expects to exit before the end of the contractual term, net of gains on lease terminations. • Other items: Expenses primarily relating to nonrecurring services rendered by third-party vendors engaged to perform strategic business review and transformational activities, expense incurred related to acquisitions and divestitures including third-party transaction related expenses, transition services agreement expenses and income, and certain other expenses not viewed as normal cash operating expenses. In fiscal 2025, these expenses also included a non-cash charge related to expected future credit losses on vendor receivables due from a vendor that filed voluntary petitions for Chapter 11 bankruptcy protection. Other items also include certain tax items, both expenses and benefits, that are unrelated to the fiscal year in which they are recorded and are excluded in order to provide a clearer understanding of the Company’s ongoing Non-GAAP tax rate and after-tax earnings. 12
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RECONCILIATION OF Q3 2026 GAAP RESULTS TO NON - GAAP RESULTS 13 (1) These GAAP and Non-GAAP measures are calculated as a percentage of net sales. (2) Restructuring and other related expenses included expenses associated with location closures. (3) The Company recorded incremental accelerated depreciation and amortization for property and equipment and ROU assets of $2 million and impairment charges for property and equipment and ROU assets of $36 million, net of gains on sale. (4) The income tax impact of Non-GAAP adjustments is calculated using the estimated tax rate in effect for the respective Non-GAAP adjustments.
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RECONCILIATION OF Q3 2025 GAAP RESULTS TO NON - GAAP RESULTS 14 (1) These GAAP and Non-GAAP measures are calculated as a percentage of net sales. Details of Non-GAAP adjustment amounts included in the Non-GAAP reconciliation for the prior period are included in the press release for that period
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(1) Management believes its Adjusted Net Debt to Adjusted EBITDAR ratio (“net leverage ratio”) is a key financial metric for debt securities, as reviewed by rating agencies, and believes its debt levels are best analyzed using this measure. The Company’s goal is to re-establish an investment grade rating. The Company's credit rating could impact the Company's ability to obtain additional funding. A negative change in the Company's investment rating, could negatively impact future performance and limit growth opportunities. The net leverage ratio calculated by the Company is a Non-GAAP measure and should not be considered a substitute for debt to net income, as determined in accordance with GAAP . The Company adjusts the calculation to deduct available cash & cash equivalents and to add back the Company’s existing operating lease liabilities related to their right-of-use assets to provide a more meaningful comparison with the Company’s peers and to account for differences in debt structures and leasing arrangements. The Company also adjusts the calculation to remove rent expense and transformational and other non- cash charges. The Company’s calculation of its net leverage ratio may not be calculated in the same manner as other companies, and thus may not be comparable to similarly titled measures used by other companies. (2) Excludes Net loss from discontinued operations recorded in the fourth quarter of fiscal 2025. (3) The adjustments to the four quarters ended October 10, 2026 primarily include expenses associated with restructuring and related activities, including non-cash impairments, in addition to other items, the Company's material weakness remediation efforts, professional fees and executive turnover. RECONCILIATION OF 2026 YTD FREE CASH FLOW RECONCILIATION OF ADJUSTED NET DEBT TO ADJUSTED EBITDAR 15 (1) The forty weeks ended October 10, 2026 and October 4, 2025, included approximately $19 million and $130 million, respectively, of cash charges related to restructuring and other related expenses under our 2024 Restructuring Plan. (1)