Note F – Cloud Computing Arrangements

​

The Company capitalizes implementation costs associated with its cloud computing arrangements when incurred, consistent with the treatment of costs capitalized for internal use software. These costs begin amortization once the related software is placed in service and will be amortized over the remaining non-cancellable term of the hosting agreement, plus any renewal periods that are reasonably certain to be exercised, and are recorded within Operating, selling, general and administrative expenses in the Company’s Condensed Consolidated Statements of Income, the same line item as the related hosting fees. Amortization expense of $0.4 million and $0.7 million was recorded in the twelve

and thirty-six weeks ended May 9, 2026, respectively, with no amortization expense recorded in the comparable prior year periods. At May 9, 2026, and August 30, 2025, capitalized cloud-based enterprise resource planning (“ERP”) software implementation costs of $2.8 million and $1.6 million, respectively, were recorded within Other current assets, and $40.5 million and $29.6 million, respectively, were recorded within Other long-term assets on the Company's Condensed Consolidated Balance Sheets. Cloud computing arrangement implementation costs are classified within operating activities in the Company’s Condensed Consolidated Statements of Cash Flows.