Commitments

(a)Finance and operating lease commitments represent future undiscounted lease payments and include $40.3 million and $26.3 million, respectively, related to options to extend lease terms that are reasonably certain of being exercised.

Contingencies

We are currently a party to various claims and legal proceedings incidental to the conduct of our business. If management believes that a loss arising from any of these matters is probable and can reasonably be estimated, we will record the amount of the loss, or the minimum estimated liability when the loss is estimated using a range, and no point within the range is more probable than another. As additional information becomes available, any potential liability related to these matters is assessed and the estimates are revised, if necessary. Litigation is subject to inherent uncertainties, and unfavorable rulings could occur and may include monetary damages. If an unfavorable ruling were to occur, there exists the possibility of a material adverse impact on the financial position and results of operations of the period in which any such ruling occurs, or in future periods.

An action was filed against us in January 2026 in the U.S. District Court for the Western District of New York by two former Tire Choice employees who worked in Florida. The plaintiffs, former store managers, sought certification to represent similarly situated Tire Choice store managers in a collective action for unpaid overtime wages, damages and attorneys’ fees. Plaintiffs alleged violations of the Fair Labor Standards Act relating to overtime and unpaid wages. The parties conducted informal discovery, following which the parties agreed to resolve this matter for a limited subset of a potential collective. In anticipation of court approval, the Company included the settlement amount of approximately $1.7 million in OSG&A expenses in the Company’s Consolidated Statement of (Loss) Income and Comprehensive (Loss) Income during the second quarter of fiscal 2027. In resolving this matter, the Company believes the settlement is the best use of management’s time and resources.