Form 10-K
Please provide a period to period comparative analysis and discussion of changes in cash flows from operating activities, including changes in working capital components, in your annual and interim period reports. In doing so, explain the underlying business reasons and implications of material changes between periods to provide investors with an understanding of variability and potential trends in cash flows.Rest of the question
Ensure your discussion and analysis is not merely a recitation of changes evident from the consolidated statements of cash flows. Refer to Item 303(a) and (b) of Regulation S-K and SEC Release No. 33-8350.
We respectfully acknowledge the Staff’s comments and will expand our disclosures to include a comparative analysis and discussion of changes in cash flows from operating activities in future filings. The following is an example of the future disclosure:
Cash Flows from Operating Activities
Our cash flow provided by operations is primarily from net sales and membership fees.Read in the reply ↗Rest of the answer
Cash flow used in operations generally consists of payments to merchandise suppliers, warehouse operating costs, including wages and employee benefits, utilities, credit and debit card processing fees, and operating leases. Cash used in operations also includes payments for income taxes. Changes in our net investment in merchandise inventories (the difference between merchandise inventories and accounts payable) is impacted by several factors, including inventory levels and turnover, payment terms with suppliers, and early payments to obtain discounts. Net cash provided by operating activities totaled $13,335 in 2025, compared to $11,339 in 2024. The increase was primarily due to higher cash flow provided from operating income, as well as reduced net investment in merchandise inventories. The latter was a result of faster inventory turns and improved payment terms with suppliers.
First report after the company's reply of 2026-03-23: 10-Q filed 2026-06-03 ↗, against the 10-Q filed 2025-12-17 ↗.
Cash Flows from Operating Activities: 10 paragraphs changed; the 3 closest in words to the question are below.
The preparation of our consolidated financial statements in accordance with U.S. GAAP requires that we make estimates and judgments. We base these on historical experience and on assumptions that we believe to be reasonable. Our critical accounting policies are discussed in Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section of our Annual Report on Form 10-K, for the fiscal year ended August 31, 2025. There have been no material changes to the critical accounting estimates previously disclosed in that Report.
On January 19, 2023, the Board of Directors authorized a share repurchase program in the amount of $4,000, which expires in January 2027. During the first quarter thirty-six weeks of 2026 and 2025, we repurchased 225,000 638,000 and 230,000 658,000 shares of common stock, at an average price per share of $932.02 $945.46 and $899.23, $946.64, totaling approximately $210 $603 and $206. $623. These amounts may differ from the accompanying condensed consolidated statements of cash flows due to changes in unsettled repurchases at the end of a quarter. Purchases are made from time to time, as conditions warrant, in potentially including the open market or in market, block purchases, purchases and pursuant to plans under SEC Rule 10b5-1. Repurchased shares are retired, in accordance with the Washington Business Corporation Act. The remaining amount available to be purchased under our approved plan was $1,752 $1,359 at the end of the first third quarter.
Net cash provided by operating activities totaled $4,688 in the first quarter of 2026, compared to $3,260 in the first quarter of 2025. Our cash flow provided by operations is primarily from net sales and membership fees. Cash flow used in operations generally consists of payments to suppliers, warehouse operating costs, including wages and employee benefits, utilities, credit and debit card processing fees, and operating leases. Cash used in operations also includes payments for income taxes. Changes in our net investment in merchandise inventories (the difference between merchandise inventories and accounts payable) is impacted by several factors, including inventory levels and turnover, payment terms with suppliers, and early payments to obtain discounts. Net cash provided by operating activities totaled $11,133 in the first thirty-six weeks of 2026, compared to $9,468 in the first thirty-six weeks of 2025. The increase was primarily due to higher cash flow provided from operating income, as well as reduced net investment in merchandise inventories. The latter was a result of faster inventory turns and improved payment terms with suppliers.
Paragraphs where only numbers, dates or period words changed are not shown. Cut words struck through, new words highlighted and underlined.
You disclose the CODM utilizes operating income in evaluating performance and allocating resources but not how the measure is used for these purposes. Refer to ASC 280-10-50-29(f) and ASC 280-10-55-47(bb). Please revise as appropriate.Rest of the question
In closing, we remind you that the company and its management are responsible for the accuracy and adequacy of their disclosures, notwithstanding any review, comments, action or absence of action by the staff.
We will revise our disclosure in our future filings to include how the CODM utilizes operating income as described below:
The CODM uses the metrics outlined in the table below, along with internal management reports, to evaluate performance, monitor actual results versus budget and prior year results, and make strategic and operational resource allocation decisions. Read in the reply ↗
First report after the company's reply of 2026-03-23: 10-Q filed 2026-06-03 ↗, against the 10-Q filed 2025-12-17 ↗.
The part of the filing the question names could not be found in both reports. Read them on sec.gov.
Also in this review: closing letter, 2026-03-26