On November 13, 2024, the Company’s Board of Directors approved the 2024 Restructuring Plan, a restructuring and asset optimization plan designed to improve the Company’s profitability and growth potential and streamline its operations. This plan contemplated the closure of approximately 500 stores, approximately 200 independent locations and four distribution centers by mid-2025, as well as headcount reductions. The Company completed the closure of all of these locations during the first quarter of 2025.

Expenses associated with the 2024 Restructuring Plan included: (1) inventory write down of inventory to net realizable value due to liquidation sales as a result of store closures and streamlining assortment associated with the 2024 Restructuring Plan, (2) non-cash asset impairment and accelerated amortization and depreciation of operating lease right-of-use (“ROU”) assets and property and equipment, (3) personnel expenses related to severance and transition expenses, which were offered to certain employees who would provide services through key dates to ensure completion of closure activities and (4) other location closure-related activity, including nonrecurring services rendered by third-party vendors assisting with the turnaround initiatives and other related expenses, including incremental revisions to receivable collectability due to termination of contracts with independents associated with the 2024 Restructuring Plan.

In November 2023, the Company announced a strategic and operational plan with anticipated savings of $150 million of which $50 million would be reinvested into frontline team members. In addition to a reduction in workforce, this plan streamlines the Company’s supply chain by configuring a multi-echelon supply chain by leveraging current assets and operating fewer, more productive distribution centers that focus on replenishment and move more parts closer to the customer. In achieving this plan, the Company is in

process of converting certain distribution centers and stores into market hubs. In addition to providing replenishment to near-by stores, market hubs support retail operations. In addition to the distribution network optimization costs, other restructuring expenses include certain other items as further detailed in the table below. The Company continues to incur charges associated with this plan and expects to incur additional charges through the end of fiscal 2026, primarily consisting of conversion costs associated with the conversion of certain distribution centers and severance and other personnel expenses.

The Company has recorded all restructuring and related expenses as a component of selling, general and administrative expenses in the condensed consolidated statement of operations, with the exception of inventory related expenses that are recorded as a component of cost of sales in the condensed consolidated statement of operations.

Restructuring and related expenses for the periods presented was as follows:


	Sixteen Weeks Ended
2024 Restructuring Plan Expenses:	April 25, 2026			April 19, 2025
Cost of sales:
Inventory (recovery) write-down	$	(6	)	$	—
Selling, general and administrative expenses:
Impairment and write-down of long-lived assets		5			41
Severance and other personnel expenses		—			15
Other location closure related expenses(1)		15			49
2024 Restructuring Plan Expenses	$	14		$	105

Other Restructuring Plan Expenses:
Cost of sales expenses:
Distribution network optimization	$	4		$	—
Selling, general and administrative expenses:
Distribution network optimization		3			3
Impairment and write-down of long-lived assets		4			4
Worldpac post transaction-related expenses		—			3
Other restructuring expenses(2)		5			3
Other Restructuring Plan Expenses	$	16		$	13

(1)

Other location closure related activity for the sixteen weeks ended April 25, 2026 includes $13 million for reserves on independent loans and the remaining of other related expenses are associated with location closures, including the transfer of assets. Other location closure related activity for the sixteen weeks ended April 19, 2025 includes $30 million of nonrecurring services rendered by third-party vendors assisting with the 2024 Restructuring Plan, $7 million for reserves on independent loans and the remaining other related expenses are associated with location closures, including the transfer of assets.

(2)

Other restructuring expenses primarily consists of nonrecurring services rendered by third-party vendors, severance and other personnel expenses.

Restructuring liabilities were immaterial as of April 25, 2026 and January 3, 2026.

As of April 25, 2026, the cumulative amount incurred to date for active restructuring plans totaled $1.0 billion, consisting of write-down of inventory to net realizable value, lease termination impacts, other exit-related expenses related to ceased use buildings, professional service fees and certain employee termination benefits. Substantially all of the costs under the restructuring plans have been incurred as of April 25, 2026. The Company estimates that it will incur additional expenses of approximately $20 million to $30 million through fiscal 2026.