Quarterly report [Sections 13 or 15(d)]

Impairments, Store Closing, and Other Costs

v3.25.4
Impairments, Store Closing, and Other Costs
 3 Months Ended
Jan. 03, 2026
Asset Impairment Charges [Abstract]  
Impairments, Store Closing, and Other Costs

Note 4—Impairments, Store Closing, and Other Costs

On November 25, 2025, management committed to a strategic plan to improve operational efficiency by closing 80 underperforming stores and one distribution center (the “Plan”). The process of closing these locations began in early December 2025 and was substantially completed as of the end of the first fiscal quarter of 2026.

As a result of this Plan, the Company recognized $18.5 million in charges during the three months ended January 3, 2026. These charges are included in our consolidated statements of operations and are comprised of the following components (in thousands):

 

Financial Statement Line Item

 

Charge

 

Amount

 

Cost of merchandise and services sold

 

Non-cash inventory impairment

 

$

6,371

 

Selling, general and administrative expense

 

Wind down and other costs (1)

 

 

1,975

 

Impairment

 

Non-cash property and equipment impairments

 

 

5,353

 

Impairment

 

Non-cash right-of-use asset impairment

 

 

4,795

 

Total

 

 

 

$

18,494

 

 

(1)
Includes $1.3 million of construction and other costs related to store closures, $0.5 million in severance costs, and $0.2 million in ongoing occupancy costs.
No costs related to store closures were recognized during the three months ended December 28, 2024. Management will continue to monitor the progress of the store closures and evaluate the impact on the Company’s financial results. Any future expenses associated with these ongoing exit activities will be disclosed upon recognition.