During the first quarter of fiscal 2026, the Company approved and initiated a multi-year business transformation and restructuring plan (the “Plan”) designed to enhance operational efficiency, improve execution across the organization and strengthen long-term performance. Developed in collaboration with leading third-party advisors, the Plan is structured around three strategic priorities: Operational Excellence, Commercial Excellence, and Asset and Network Optimization.

Implementation activities associated with the Plan began during the first quarter of fiscal 2026. Based on information currently available, management estimates that total costs associated with the Plan will be approximately $35 million to $40 million (primarily related to the U.S. segment), consisting largely of third-party consulting and advisory services and severance and related employee costs. These estimates are subject to change as implementation of the Plan progresses. During the third quarter of fiscal 2026, the Company recognized $6.1 million of third-party consulting fees and $1.6 million of severance and related employee costs. For the nine months ended July 3, 2026, the Company recognized $23.2 million of third-party consulting fees and $8.0 million of severance and related employee costs.

The following table summarizes the unpaid obligations related to the Plan (excluding severance and related employee costs) as of July 3, 2026. Such unpaid obligations are included in "Accounts Payable" on the Condensed Consolidated Balance Sheets and the related expenses are recorded within "Selling, general and administrative expenses" on the Condensed Consolidated Statements of Income (Loss). Payments during the period primarily relate to amounts accrued in prior periods as well as charges incurred during the quarter.

The Company undertook workforce reduction actions designed to improve operational efficiency and effectiveness during fiscal 2025 and, as part of the Plan, in the first quarter of fiscal 2026. Severance and related employee costs are recognized when the Company has committed to a workforce reduction plan, the plan has been communicated to affected employees, and the related obligations are reasonably estimable.

During the three months ended July 3, 2026 and June 27, 2025, the Company recognized severance and related employee costs of $1.6 million and $0.4 million, respectively, which were recorded within "Selling, general and administrative expenses." During the nine months ended July 3, 2026 and June 27, 2025, the Company recognized severance and related employee costs of $8.0 million and $12.4 million, respectively, which were recorded within "Selling, general and administrative expenses." As of July 3, 2026 and October 3, 2025, accrued severance and related employee obligations were $4.6 million and $7.4 million, respectively.

The following table summarizes the unpaid obligations for severance and related costs as of July 3, 2026, which are included in "Accrued payroll and related expenses" on the Condensed Consolidated Balance Sheets.