Annual Report for Fiscal Year Ending 06-27, 2026 (Form 10-K)

Management's Discussion and Analysis of Financial Condition and Results of Operations

For a description of the Company's critical accounting policies and an understanding of Avnet and the significant factors that influenced the Company's performance during the past three fiscal years, the following discussion should be read in conjunction with the description of the business appearing in Item 1 of this Report and the consolidated financial statements, including the related notes and schedule, and other information appearing in Item 8 of this Report. Discussions of fiscal 2024 items and year-to-year comparisons between fiscal years 2025 and 2024 are not included in this Form 10-K and can be found in "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Part II, Item 7 of the Company's Annual Report on Form 10-K for the fiscal year ended June 28, 2025. The Company operates on a "52/53 week" fiscal year. Fiscal years 2026, 2025 and 2024 each contained 52 weeks.

The discussion of the Company's results of operations includes references to the impact of foreign currency translation. When the U.S. Dollar strengthens and the stronger exchange rates are used to translate the results of operations of Avnet's subsidiaries denominated in foreign currencies, the result is a decrease in U.S. Dollars of reported results. Conversely, when the U.S. Dollar weakens, the weaker exchange rates result in an increase in U.S. Dollars of reported results. In the discussion that follows, results excluding this impact, primarily for subsidiaries in EMEA and Asia, are referred to as "constant currency."

In addition to disclosing financial results that are determined in accordance with generally accepted accounting principles in the U.S. ("GAAP"), the Company also discloses certain non-GAAP financial information, including:

The following table provides a reconciliation of operating income to adjusted operating income:

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Management believes that providing this additional information is useful to financial statement users to better assess and understand operating performance, especially when comparing results with prior periods or forecasting performance for future periods, primarily because management typically monitors the business with and without these adjustments to GAAP results. Management also uses these non-GAAP measures to establish operational goals and, in many cases, for measuring performance for compensation purposes. However, any analysis of results on a non-GAAP basis should be used in conjunction with results presented in accordance with GAAP.

Industry outlook

The Company's operations subject it to tariffs and other trade protection measures. The U.S. administration has instituted certain changes, and may make additional changes, in trade policies that include the negotiation or termination of trade agreements, higher tariffs on imports into the U.S., and other measures affecting trade between the U.S. and other countries from which the Company imports. Due in part to these measures, some countries are changing their trade policies relating to goods imported from the U.S. These global trade disruptions and geopolitical tensions, together with

any related downturns in the global economy, could dampen customer demand, increase market volatility, and impact currency exchange rates, all of which could materially and adversely affect the Company's financial performance.

In February 2026, the U.S. Supreme Court issued a ruling striking down tariffs imposed under the International Emergency Economic Powers Act (IEEPA), including, among others, tariffs on imports of certain Canadian, Chinese, and Mexican goods, a universal baseline tariff on imports from most countries, and reciprocal tariffs on select countries. The global tariff landscape continues to shift rapidly, with changes impacting businesses and markets around the world.

The Company continues to monitor the situation, including any potential refunds of such tariffs, and evaluate the impact on its results of operations. No potential refunds have been recorded in the Consolidated Financial Statements as the Company cannot reasonably estimate the financial impact.

Sales related to customer billings for various tariffs were less than one percent of total sales for fiscal 2026, fiscal 2025 and fiscal 2024.

During fiscal 2026, the Company's financial performance improved as demand for electronic components strengthened resulting in year-over-year sales growth across all regions and improved days of inventory on hand. The Company expects sales in the first quarter of fiscal 2027 will grow approximately 10% compared to fourth quarter of fiscal 2026 sales with expected sales growth across all Electronic Components regions and Farnell.

Results of Operations

Sales

Analysis of Sales: By Operating Group and Geography

The table below provides sales change rates for fiscal 2026 as compared to fiscal 2025 as reported and on a constant currency basis by geographic region and operating group.

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Avnet's sales for fiscal 2026 were $27.63 billion, an increase of $5.43 billion, or 24.5%, from fiscal 2025 sales of $22.20 billion, with growth across all EC regions and Farnell. Sales in constant currency increased 22.4% year over year, driven by strong performance in both EC and Farnell operating groups across all end markets served.

EC sales in fiscal 2026 were $25.85 billion, representing a $5.10 billion increase, or 24.6% increase over prior year sales of $20.75 billion. EC sales increased 22.6% year over year in constant currency. All three EC regions contributed to this growth led by the Company's Asia region. The increase in EC sales was mainly attributable to increased sales volumes and the mix of higher-priced components and to a lesser extent from increase in prices for certain memory-related products.

Farnell sales in fiscal 2026 were $1.78 billion, representing an increase of $335.0 million or 23.2%, compared to prior year sales of $1.45 billion. The year-over-year increase in sales in fiscal 2026 is primarily due to improvement in demand for single board computers and on-the-board electronic components. The increase in sales at Farnell was primarily driven by an increase in volume as increases in components pricing including certain memory-related products was a smaller contributor to sales growth during fiscal 2026.

Gross Profit

The Company's gross profit and gross margin are primarily affected by sales volume, product mix, customer mix and pricing, and geographic sales mix. Gross profit increased $496.9 million, or 20.8% to $2.88 billion in fiscal 2026, compared to $2.38 billion in fiscal 2025. This increase was primarily driven by higher sales in both operating groups, partially offset by year-over-year lower gross profit margin in the EC operating group. Gross profit margin decreased to 10.4% in fiscal 2026 or 31 basis points from fiscal 2025 gross profit margin of 10.7%.

EC gross profit margin declined in fiscal 2026 compared with fiscal 2025 primarily due to a higher mix of sales from the lower-margin Asia region and changes in product and customer mix in the Western regions. Asia represented approximately 51% of EC sales in fiscal 2026, compared with 49% in fiscal 2025. EC gross profit margin decreased 44 basis points to 9.24% in fiscal 2026 from 9.68% in fiscal 2025.

Farnell gross profit margin was 27.73% in fiscal 2026, up 168 basis points year over year, primarily due to a higher mix of on-the-board electronic components and, to a lesser extent, an increase in component pricing for certain memory-related products during fiscal 2026.

Selling, General and Administrative Expenses

Selling, general and administrative expenses ("SG&A expenses") in fiscal 2026 were $2.02 billion, an increase of $260.0 million, or 14.8%, from fiscal 2025. The year-over-year increase in SG&A expenses is primarily due to increases in variable operating expenses associated with higher sales volumes and the impact of changes in foreign currency translation rates.

Metrics that management monitors with respect to its operating expenses are SG&A expenses as a percentage of sales and as a percentage of gross profit. In fiscal 2026, SG&A expenses were 7.3% of sales 70.2% of gross profit, compared with 7.9% and 73.9%, respectively, in fiscal 2025. The year-over-year decrease in SG&A expenses as a percentage of sales and gross profit was primarily due to increased sales without a corresponding increase in SG&A expenses, partially offset by the decline in gross profit margin in EC as discussed above.

See Note 16 "Segment information" to the Company's consolidated financial statements included in Item 8 of this Annual Report on Form 10-K for the amount of selling, general and administrative expenses by operating group.

Restructuring, Integration and Other Expenses

The Company recorded total restructuring, integration, and other expenses in fiscal 2026 of $134.7 million consisting of $87.7 million of severance and other restructuring related expenses, and $47.0 million of integration and other costs primarily related to start-up costs associated with a new distribution center in EMEA, partially offset by a benefit due to a change in estimate from the settlement of an audit in Mexico. The largest component of the severance expense in fiscal 2026, was due to the announced closure of a distribution center in Germany that impacted approximately 350 employees. The closure is expected to be completed in the third quarter of fiscal 2027.

The after-tax impact of restructuring, integration, and other expenses were $96.1 million and $1.15 per share on a diluted basis.

During fiscal 2025 the Company recorded restructuring, integration, and other expenses of $108.3 million, which consists of restructuring costs of $56.1 million, integration and other costs of $14.5 million, a benefit of $6.0 million for changes in estimates for costs associated with prior year restructuring actions, and $43.7 million of other costs primarily related to the estimated contingent liability associated with the consumption tax audit in Mexico.

See Note 17, "Restructuring expenses" to the Company's consolidated financial statements included in Item 8 of this Annual Report on Form 10-K for additional information related to restructuring expenses.

Operating Income

Operating income increased $210.5 million, or 40.9%, to $724.8 million in fiscal 2026, compared with $514.3 million in fiscal 2025. Operating income margin increased 30 basis points to 2.6% in fiscal 2026 from 2.3% in fiscal

2025. Adjusted operating income for fiscal 2026 was $860.9 million, an increase of $236.9 million or 38.0%, from fiscal 2025 adjusted operating income. Adjusted operating income margin increased 31 basis points to 3.1% in fiscal 2026 compared to 2.8% in fiscal 2025. These increases were primarily driven by operating leverage from higher sales.

EC operating income increased 26.9% to $898.5 million, and EC operating income margin increased 7 basis points to 3.5% in fiscal 2026. Farnell operating income increased 221.7% to $105.7 million in fiscal 2026. Farnell operating income margin increased 366 basis points to 5.9% in fiscal 2026. The increases in operating income and operating income margin in Farnell are due to higher sales and higher gross profit margin.

Interest and Other Financing Expenses, Net and Other Expense, Net

Interest and other financing expenses for fiscal 2026 was $250.7 million, an increase of $4.3 million, or 1.8%, compared with interest and other financing expenses of $246.4 million in fiscal 2025. The increase in interest and other financing expenses in fiscal 2026 compared to fiscal 2025 is primarily a result of higher average borrowings.

The Company had other expenses of $6.6 million in fiscal 2026, compared to other expenses of $17.3 million in fiscal 2025. The decrease in other expenses is primarily due to differences in foreign currency translation losses between the years.

Income Tax

Income tax expenses were $133.0 million in fiscal 2026, reflecting an effective tax rate of 28.5% as compared to income tax expenses of $10.4 million in fiscal 2025, reflecting an effective tax rate of 4.1%. The increase in the effective tax rate in fiscal 2026 as compared to fiscal 2025 was primarily related to the tax attribute carryforwards that were generated in fiscal 2025, but not in fiscal 2026.

See Note 9, "Income taxes" to the Company's consolidated financial statements included in Item 8 of this Annual Report on Form 10-K for further discussion on the effective tax rate.

Net Income

As a result of the factors described in the preceding sections of this MD&A, the Company's net income in fiscal 2026 was $334.4 million, or earnings per share on a diluted basis of $4.01, compared with fiscal 2025 net income of $240.2 million, or earnings per share on a diluted basis of $2.75.

Liquidity and Capital Resources

Cash Flows

Operating Activities

Net cash used for operating activities was $280.9 million in fiscal 2026, compared with net cash provided by operating activities of $724.5 million in fiscal 2025. The $1.01 billion year-over-year decrease in operating cash flow was primarily due to cash used for working capital in fiscal 2026 to support sales growth. Cash used for working capital and other was $802.4 million during fiscal 2026, compared with cash generated from working capital of $402.2 million in fiscal 2025, primarily reflecting higher inventory purchases, the timing of payments for inventory purchases and higher accounts receivable due to increased sales and cash collection timing. The Company used $61.4 million of cash from operations to settle the consumption tax audit in Mexico during fiscal 2026. Other, net in fiscal 2025 included a $9.2 million gain recognized on the sale of a building during fiscal 2025.

Financing Activities

Net cash provided by debt financing activities was $568.9 million in fiscal 2026, primarily reflecting $633.8 million of net proceeds from the issuance of Convertible Notes, $270.2 million of proceeds from term loans, $157.9 million of net borrowings under the Credit Facility, and $57.0 million of proceeds from other debts. These cash inflows were partially offset by the repayment of the $550.0 million 4.63% Notes in April 2026. In comparison, net debt repayments were $274.9 million in fiscal 2025.

The Company repurchased $138.3 million of common stock under its share repurchase plan during fiscal 2026, compared with $303.5 million during fiscal 2025. The Company paid cash dividends of $1.40 per share, or $114.4 million, during fiscal 2026, compared with $1.32 per share, or $113.3 million, during fiscal 2025.

Investing Activities

Net cash used in investing activities decreased by $65.7 million during fiscal 2026, compared to fiscal 2025, primarily due to lower capital expenditures.

Financing Transactions

The Company maintains a diversified financing structure, including both short-term and long-term arrangements to support its operating requirements and supplement cash generated from operating activities. The Company seeks to reduce reliance on any single source of financing and to lower overall funding costs. These arrangements include public debt ("Notes"), convertible debt, short-term and long-term bank and term loans, a revolving credit facility (the "Credit Facility"), and an accounts receivable securitization program (the "Securitization Program").

The Company has various lines of credit, financing arrangements, and other forms of bank debt in the U.S. and various foreign locations to fund the working capital, foreign exchange, overdraft, capital expenditure, and letter of credit needs of its wholly owned subsidiaries. Outstanding borrowings under such forms of debt at the end of fiscal 2026 was $162.6 million.

As an alternative form of liquidity outside of the United States, primarily in the Asia region, the Company sells certain of its trade accounts receivable on a non-recourse basis to financial institutions pursuant to factoring agreements. The Company accounts for these transactions as sales of receivables and presents cash proceeds as cash provided by operating activities in the consolidated statements of cash flows. Fees for the sales of trade accounts receivable are classified within "Interest and other financing expenses, net" in the consolidated financial statements.

See Note 7, "Debt" to the Company's consolidated financial statements included in Item 8 of this Annual Report on Form 10-K for additional information on financing transactions including the Credit Facility, the Securitization Program and the outstanding Notes as of June 27, 2026.

Covenants and Conditions

The Company's Credit Facility includes covenants that limit, among other items, the Company's ability to incur debt, repurchase shares, pay dividends, make investments and incur capital expenditures. The Credit Facility also includes a financial covenant requiring the Company to maintain a leverage ratio below a specified threshold. The Company was in compliance with all such covenants as of June 27, 2026.

The Company's Securitization Program includes covenants related to the quality of the receivables sold. If these covenants are not satisfied, the Company may be unable to borrow additional funds, and the financial institutions may

deem the noncompliance an amortization event under the Securitization Program agreements, which would permit the financial institutions to liquidate the accounts receivables to cover any outstanding borrowings. Circumstances that could affect the Company's ability to satisfy these covenants and related conditions may be affected by the Company's ongoing profitability, as well as other economic, market, and industry factors. The Company was in compliance with all such covenants as of June 27, 2026.

Management does not believe that the covenants under the Credit Facility or Securitization Program limit the Company's ability to pursue its intended business strategy or its future financing needs.

See Liquidity below for further discussion of the Company's availability under these various facilities.

Liquidity

The Company held cash and cash equivalents of $155.4 million as of June 27, 2026, of which $146.4 million was held outside the United States. As of June 28, 2025, the Company held cash and cash equivalents of $192.4 million, of which $181.8 million was held outside of the United States.

During periods of weakening demand in the electronic components industry, the Company typically generates cash from operating activities. Conversely, during periods of higher growth, the Company generally uses cash to fund working capital requirements. For the fiscal year ended June 27, 2026, the Company used $280.9 million of cash in operating activities.

The Company's liquidity is affected by a variety of factors, including normal business operations and general economic, financial, competitive, legislative and regulatory conditions, many of which are outside the Company's control. Cash balances held outside the United States that cannot be remitted in a tax-efficient manner are generally used to support local working capital requirements, including inventory purchases, capital expenditures and other foreign business needs. In addition, local government regulations may restrict the Company's ability to transfer funds among jurisdictions under certain circumstances. Management does not believe these restrictions would limit the Company's ability to execute its intended business strategy.

In September 2025, the Company issued $650 million aggregate principal amount of convertible senior notes due 2030. The Company used the net proceeds to (i) reduce the Credit Facility by $533.8 million and (ii) repurchase $100 million of the Company's common stock in privately negotiated transactions entered into in connection with the convertible debt offering.

In July 2026, subsequent to the end of fiscal 2026, the Company amended and extended its trade accounts receivable securitization program for two years. The amendment increased the maximum purchase limit under the Receivables Purchase Agreement from $500.0 million to $700.0 million, extended the facility termination date to July 1, 2028, and excluded certain receivables from the agreement. On August 12, 2026, subsequent to the end of fiscal 2026, the Company entered into a credit agreement ("2026 Term Loan") for $375 million. The loan is priced at a variable interest rate and matures in July 2028. See Item 9B (other information) of this Annual Report for additional information regarding the 2026 Term Loan.

As of June 27, 2026, there were $557.0 million of borrowings outstanding under the Credit Facility and $0.8 million in letters of credit issued, and $500.0 million outstanding under the Securitization Program. During fiscal 2026, the Company had an average daily balance outstanding under the Credit Facility of approximately $744.8 million and $476.8 million under the Securitization Program. During fiscal 2025, the Company had an average daily balance outstanding under the Credit Facility of approximately $1.00 billion and $490.5 million under the Securitization

Program. As of June 27, 2026, the combined availability under the Credit Facility and the Securitization Program was $1.19 billion. Availability under the Securitization Program is subject to the Company having sufficient eligible trade accounts receivable in the United States to support desired borrowings.

The Company has the following contractual obligations outstanding as of June 27, 2026 (in millions):

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The Company purchases inventories in the normal course of business throughout the year through the issuance of purchase orders to suppliers. During fiscal 2026, the Company's cost of sales, substantially all of which related to the underlying purchase of inventories was $24.8 billion and the Company had $6.1 billion of inventories as of June 27, 2026. The Company expects to continue to purchase sufficient inventory to meet its customers' demands in fiscal year 2027, some of which relates to outstanding purchase orders at the end of fiscal 2026. Outstanding purchase orders with suppliers may be non-cancellable/non-returnable at the point where such orders are issued or may become non-cancellable at some point in the future, typically within 30 days to 90 days from the requested delivery date of inventories.

At June 27, 2026, the Company had an estimated liability for income tax contingencies of $123.9 million, which is not included in the above table. The settlement period for the remaining amount of the unrecognized tax benefits, including related accrued interest and penalties, cannot be determined, and therefore was not included in the table.

As of June 27, 2026, the Company may repurchase up to an aggregate of $225.8 million of shares of the Company's common stock through the share repurchase program approved by the Board of Directors. The Company may repurchase stock from time to time at the discretion of management, subject to strategic considerations, market conditions including share price and other factors. The Company may terminate or limit the share repurchase program at any time without prior notice. During fiscal 2026, the Company repurchased $138.3 million of common stock.

The Company has historically paid quarterly cash dividends on shares of its common stock, and future dividends are subject to approval by the Board of Directors. During the fourth quarter of fiscal 2026, the Board of Directors approved a dividend of $0.35 per share, which resulted in $28.7 million of dividend payments during the quarter.

The Company continually monitors and reviews its liquidity position and funding needs. Management believes that the Company's ability to generate operating cash flows through the liquidation of working capital in the future and available borrowing capacity, including capacity for the non-recourse sale of trade accounts receivable, will be sufficient to meet its future liquidity needs. Additionally, the Company believes that it has sufficient access to additional liquidity from the capital markets if necessary.

During fiscal 2027 the Company may use cash for investing and financing activities including the payment of cash dividends and capital expenditures for distribution centers and information systems including digital tools and capabilities. The Company may also use cash in fiscal 2027 for share repurchases and for acquisitions.

Critical Accounting Policies

The Company's consolidated financial statements have been prepared in accordance with GAAP. The preparation of these consolidated financial statements requires the Company to make estimates and assumptions that affect the reported amounts of assets, liabilities, sales and expenses. These estimates and assumptions are based upon the Company's continual evaluation of available information, including historical results and anticipated future events. Actual results may differ materially from these estimates.

The Securities and Exchange Commission defines critical accounting policies as those that are, in management's view, most important to the portrayal of the Company's financial condition and results of operations and that require significant judgments and estimates. Management believes the Company's most critical accounting policies at the end of fiscal 2026 relate to the valuation of inventories and accounting for income taxes.

Valuation of Inventories

Inventories are recorded at the lower of cost or estimated net realizable value. Inventory cost includes the purchase price of finished goods, and any freight cost incurred to receive the inventory into the Company's distribution centers. The Company's inventories include electronic components sold into changing, cyclical, and competitive markets, so inventories may decline in market value or become obsolete.

The Company regularly evaluates inventories for expected customer demand, obsolescence, current market prices, and other factors that may render inventories less marketable. Write-downs are recorded so that inventories reflect the estimated net realizable value and take into account the Company's contractual provisions with its suppliers, which may provide certain protections to the Company for product obsolescence and price erosion in the form of rights of return, stock rotation rights, obsolescence allowances, industry specific supplier rebate programs and price protections. Because of the large number of products and suppliers and the complexity of managing the process around price protections, supplier rebate programs and stock rotations, estimates are made regarding the net realizable value of inventories. Additionally, assumptions about future demand and market conditions, as well as decisions to discontinue certain product lines, impact the evaluation of whether to write-down inventories. If future demand changes or actual market conditions are less favorable than assumed, then management evaluates whether additional write-downs of inventories are required. In any case, actual net realizable values could be different from those currently estimated.

Accounting for Income Taxes

Management's judgment is required in determining income tax expense, unrecognized tax benefit liabilities, deferred tax assets and liabilities, and valuation allowances recorded against net deferred tax assets. Recovering net deferred tax assets depends on the Company's ability to generate sufficient future taxable income in certain jurisdictions. In addition, when assessing the need for valuation allowances, the Company considers historic levels and types of income, expectations and risk associated with estimates of future taxable income, and ongoing prudent and feasible tax planning strategies. If the Company determines that it cannot realize all or part of its deferred tax assets in the future, it may record additional valuation allowances against the deferred tax assets with a corresponding increase to income tax expense in the period such determination is made. Similarly, if the Company determines that it can realize all or part of its deferred tax assets that have an associated valuation allowance established, the Company may release a valuation allowance with a corresponding benefit to income tax expense in the period such determination is made.

The Company establishes contingent liabilities for potentially unfavorable outcomes of positions taken on certain tax matters. These liabilities are based on management's assessment of whether a tax benefit is more likely than not to be sustained upon examination by tax authorities. The anticipated and actual outcomes of these matters may differ, which may result in changes in estimates to such unrecognized tax benefit liabilities. To the extent such changes in estimates are necessary, the Company's effective tax rate may fluctuate. In accordance with the Company's accounting policy, accrued interest and penalties related to unrecognized tax benefits are recorded as a component of income tax expense.

In determining the Company's income tax expense, management considers current tax regulations in the numerous jurisdictions in which it operates, including the impact of tax law and regulation changes in the jurisdictions the Company operates in. The Company exercises judgment for interpretation and application of such current tax regulations. Changes to such tax regulations or disagreements with the Company's interpretation or application by tax authorities in any of the Company's major jurisdictions may have a significant impact on the Company's income tax expense.

See Note 9, "Income taxes" to the Company's consolidated financial statements included in Item 8 of this Annual Report on Form 10-K for further discussion on income tax expense, valuation allowances and unrecognized tax benefits.

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Recently Issued Accounting Pronouncements

In November 2024, the FASB issued ASU 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses ("ASU 2024-03"), and in January 2025, the FASB issued ASU 2025-01, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures: Clarifying the Effective Date ("ASU 2025-01"). The guidance is designed to improve financial reporting by requiring public business entities to disclose additional information about specific expense categories in the financial statement notes at interim and annual reporting periods. ASU No. 2024-03, as clarified by ASU 2025-01, will be effective for the Company in fiscal year 2028 and early adoption is permitted. The Company is currently evaluating the impact of adopting ASU No. 2024-03 on its disclosures.

In July 2025, the FASB issued ASU 2025-05, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets ("ASU No. 2025-05"). This update introduces a practical expedient available to all entities when estimating expected credit losses on current accounts receivable and contract assets arising from revenue recognized under ASC 606, Revenue from Contracts with Customers. With this expedient, entities may assume that the current conditions used to determine credit loss allowances for these assets will remain unchanged for the remainder of their lives. ASU 2025-05 will be effective for the Company starting in fiscal 2027, including interim periods in that year. Entities that choose to apply the practical expedient, along with any related accounting policy elections, must do so prospectively. The Company is currently assessing the potential effects of adopting ASU 2025-05 on its consolidated financial statements and disclosures.

In September 2025, the FASB issued ASU 2025-06, Intangibles - Goodwill and Other - Internal-Use Software, (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software ("ASU No. 2025-06"). This update modernizes the outdated guidance for accounting for software costs by aligning the accounting with how software is developed today. The effective date for the standard is for fiscal years beginning after December 15, 2027, the Company's Fiscal 2029, and interim periods within those fiscal years. Early adoption is permitted. The amendments in this ASU should be applied either prospectively, retrospectively, or utilizing a modified transition approach. The Company is in the process of analyzing the impact of ASU No. 2025-06 on its consolidated financial statements and related disclosures.

In November 2025, the FASB issued ASU 2025-09, Derivatives and Hedging (Topic 815): Hedge Accounting Improvements ("ASU No. 2025-09"), which make certain targeted improvements to simplify the application of the hedge accounting guidance and to address several incremental hedge accounting issues arising from the global reference rate reform initiative. Among other amendments, these improvements include expanding the hedged risks permitted to be aggregated in a group of individual forecasted transactions in a cash flow hedge and clarifying the circumstance under which a group of individual forecasted transactions can be considered to have a similar risk exposure. The amendments in ASU 2025-09 are effective for annual periods beginning after December 15, 2026, and interim periods within those annual reporting periods, which for the Company would be the fiscal first quarter ending September 25, 2027. Early adoption is permitted and the amendments should be applied on a prospective basis for all hedging relationships. The Company is currently evaluating the impact the new accounting standard could have on its hedge accounting policies and related disclosures.

In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements ("ASU No. 2025-11"). This update enhances the clarity and organization of interim reporting and the applicability of Topic 270. It also clarifies the required form and content of interim financial statements, including requiring entities to disclose events since the end of the last annual reporting period that have a material impact on the entity. The standard is effective for interim reporting periods within annual periods beginning after December 15, 2027, which for the Company would be the first quarter of fiscal 2029, with early adoption permitted. Entities may apply the update either prospectively or retrospectively. The Company is in the process of evaluating the impact of adopting ASU No. 2025-11 on its consolidated financial statements and related disclosures.

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