We initiated a restructuring plan during the fourth quarter of fiscal 2024, with continuing implementation in fiscal 2025, intended to improve our long-term profitability, cash flow generation and return on invested capital, optimize the footprint of new store growth, and lower our cost base (the "Restructuring Plan"). Under the Restructuring Plan:

•We are optimizing new store growth in the next several years to increase efficiencies for distribution and optimize brand awareness and marketing. Specifically, we have narrowed our focus on our future new store openings to target existing markets and a smaller set of high-priority adjacent new markets to improve new store sales productivity and return on invested capital. As such we determined to terminate a total of 28 leases for unopened stores in suboptimal locations which we had planned to open in the next several years and to discontinue development of certain future store sites where we had incurred initial costs, but leases had not yet been signed.

•We have shifted our planned investments in our distribution infrastructure in fiscal 2025 and fiscal 2026 away from highly capital-intensive projects. We have instead, and plan to continue to, invest in lower cost distribution centers for dry goods to enhance capacity and improve inventory management and overall execution. During the first quarter of fiscal 2025, we cancelled certain warehouse projects in connection with such strategy.

The following table summarizes charges incurred related to the Restructuring Plan for the 13 and 26 weeks ended June 28, 2025 and for the cumulative-to-date period ended June 28, 2025 since the initiation of the Restructuring Plan (in thousands):


	13 Weeks Ended (1)		26 Weeks Ended (1)		Cumulative (2)
	June 28, 2025		June 28, 2025		June 28, 2025
Cash restructuring charges:
Lease termination costs	$	5,019	$	34,112	$	34,112
Employee severance and benefit costs	—		1,532		1,532
Legal, professional and other costs	—		1,522		1,522
Total cash restructuring costs	5,019		37,166		37,166

Non-cash impairment and disposal of long-lived assets	6,138		7,866		23,754

Total restructuring charges	$	11,157	$	45,032	$	60,920

(1)All costs incurred related to the Restructuring Plan during the 13 and 26 weeks ended June 28, 2025 are included in Restructuring charges on the condensed consolidated statements of operations and comprehensive income (loss).

As of June 28, 2025, we estimate that we will incur total costs under the Restructuring Plan of approximately $63 million, of which approximately $39 million is expected to be cash expenditures. The estimated total costs include charges incurred cumulative-to-date since the initiation of the Restructuring Plan, along with an additional approximately $2 million estimated to be incurred in the third quarter of fiscal 2025, primarily for cash lease termination costs. The actions under the Restructuring Plan were substantially completed in the second quarter of fiscal 2025.

The following table summarizes the restructuring liability activity for the Restructuring Plan during the 26 weeks ended June 28, 2025 (in thousands):


	Lease Termination Costs		Employee Severance and Benefit Costs		Legal, Professional and Other Costs		Total
Balance at December 28, 2024	$	—	$	—	$	—	$	—
Cash restructuring charges	34,112		1,532		1,522		37,166
Cash payments	(33,573)		(1,532)		(1,177)		(36,282)
Balance at June 28, 2025	$	539	$	—	$	345	$	884