The Company used the last in, first out (“LIFO”) method of accounting for approximately 92% of inventories as of April 25, 2026 and January 3, 2026, respectively. An actual valuation of inventory under the LIFO method is performed at the end of each fiscal year based on inventory levels and carrying costs at that time. Accordingly, interim LIFO calculations are based on the Company’s estimates of expected inventory levels and costs at the end of the year. The Company’s LIFO credit reserve balance was $121 million and $104 million as of April 25, 2026 and January 3, 2026, respectively, to state inventories at LIFO. Increases to the Company’s LIFO credit reserve balance are recorded as a non-cash charge to cost of sales and decreases are recorded as a non-cash benefit to cost of sales.

Purchasing and warehousing costs included in inventories as of April 25, 2026 and January 3, 2026 were $447 million and $426 million, respectively.