Director/CEO
Team,
Congratulations on a terrific year of serving those who serve! Throughout 2025, you went above and beyond to support our Nation’s Soldiers, Airmen, Guardians and families.
As a result of your amazing work, the Exchange is set to exceed earnings targets for FY25 (final results will be available after the third-party audit is finished this spring), allowing higher-than-planned dividends for critical Quality-of-Life programs essential to military recruiting, readiness, resiliency and lethality.
Team Exchange continuously produces extraordinary results. Your unwavering commitment to advancing the Exchange’s strategic priorities is key to strengthening our military community.
Staying strong for military families
During the six-week government shutdown in October and November, the longest in our Nation’s history, the Exchange was a lifeline. As soon as the shutdown began, the Exchange stepped up to supplement support of all authorized shoppers.
The MILITARY STAR® card rolled out a 90-days-no-interest relief offer for all Defense Commissary Agency purchases, enabling 188,000 cardholders to purchase more than $68 million in interest-free groceries between Oct. 6 and Nov. 30, delivering a combined $2.7 million benefit directly to the military community.
Additionally, MILITARY STAR waived more than 440,000 minimum payments for more than 260,000 Active Duty, National Guard, and Reserve accounts during the shutdown, helping service members avoid penalties and negative credit reporting while providing critical financial flexibility.
The Exchange also worked with U.S. Financial Management Command to provide prepaid gift cards to Army trainees at Forts Benning, Jackson, Leonard Wood and Sill. These cards allowed recruits to obtain essential training supplies throughout the shutdown. More than 15,500 gift cards (a total value of $6.9 million) were issued through the end of the fiscal year.
Force multipliers for the Department of War
During August, select Exchange restaurants at Fort Hood completed a two-week test of the Army’s Flexible Eating & Expanded Dining (FEED) initiative. The Exchange’s Fort Hood, IT, accounting, policy and food teams worked in lockstep with Army leadership to deliver a campus-style dining experience to a select group of Soldiers, who used their meal entitlements at Burger King, Freshens, Qdoba, Subway and Starbucks. All Exchange platforms worked as planned throughout the highly successful test. The assessment found that almost 80% of participating Soldiers chose healthier options. The Army is evaluating next steps for the pilot and Team Exchange stands ready to fully support this critical food security initiative.
Since 2019, the Exchange has participated in a Joint Buying Alliance with the Navy Exchange Service Command, Marine Corps Exchange, Coast Guard Exchange and the Defense Commissary Agency. This purchasing alliance, involving retail merchandise and any other items sold by two or more of the organizations, has created greater efficiencies the collective businesses and added value for authorized exchange and commissary shoppers. The alliance has achieved more than $308 million in value for the military community since 2019.
The best tastes of home
Worldwide, the Exchange opened more than 35 restaurants throughout the year, including Panda Express locations at Osan Air Base and Kadena AB, where opening-day sales topped $30,000, breaking the international Panda Express opening-day record. Panda locations also opened at Fort Campbell, USAG Stuttgart in Germany and Joint Base McGuire-Dix-Lakehurst.
Another popular brand, Panera Bread, opened locations at Forts Belvoir, Benning, Bliss and Jackson, and at Joint Base Lewis-McChord and JBSA-Lackland AFB.
Fast-casual Mexican restaurant Qdoba opened three Exchange locations in 2025, including one that opened in late January at MacDill AFB. Qdobas also opened at JBLM-McChord AFB and JB McGuire-Dix-Lakehurst
Restaurants in Expresses offer grab-and-go convenience to service members and families. A new concept, Express Kitchen, opened in July at Fort Riley’s Big Red 1 Express. Hunt Brothers Pizza opened at 14 more Expresses; eight Chopz locations opened; and Hot Stuff Kitchen added a location at Joint Base Lewis-McChord’s renovated North Express. The Consumables team plans an aggressive expansion of Express restaurants in 2026.
Exchange restaurants are about more than food—they are places for families and friends to come together, strengthening community connections and Quality of Life.
MILITARY STAR rising
MILITARY STAR delivered strong growth in 2025, generating $1.9 billion in sales and opening more than 111,000 new accounts. Driven by the first full year of expanded on-installation acceptance, the program added 13,000 new accepting facilities, contributing to $30 million in incremental sales. This expansion also unlocked a new interchange income stream, producing more than $7 million in additional revenue and strengthening the long-term financial performance of the portfolio.=
MILITARY STAR continued its mission of delivering meaningful value to the military community in 2025, providing $483 million in total cardmember benefits. Key highlights included more than $340 million in APR savings, $31 million in 0% financing offers, and $39 million in rewards returned directly to cardholders. Exclusive deployment and Military Clothing plans contributed an additional $9 million in direct support to service members. The program also generated $28 million in merchant fee savings for Military Resale, helping avoid high industry credit card costs while reinforcing overall value to the military community.
Leveraging technology, improving efficiency
Ensuring associates have the right tools to do their jobs is key to the Exchange’s success.
In the fall, the Dan Daniel Distribution Center and IT teams launched a goods-to-person automation center. Shuttles and conveyor systems bring merchandise to associates, saving time, reducing physical strain and optimizing workflow.
Since the successful launch of self-checkout in 2022, IT’s point-of-sale team has fined-tuned the process. In 2025, the team made improvements in registers’ processing of add-ons such as AppleCare and gift card purchases—major steps toward faster checkout. An updated checkout dashboard has a streamlined menu and is more specific to the items carried by each store. These improvements not only benefit customers—they help store teams manage traffic and free up associates to assist customers.
The Merchandising team is in the early stages of its Merchandise Modernization Project (MMP), a long-term initiative designed to get the right product in the right place at the right time, in the right quantity and at the right price. One way of doing that is assortment optimization—aligning the product mix with local demand. Additionally, MMP will be utilized to improve the customer experience for ShopMyExchange.com customers.
Innovative services
The Services team aggressively expanded 24/7 self-service stores, adding 65 to bring the total to more than 716. These markets offer an assortment found in most convenience stores, including snacks, drinks and better-for-you options. They are especially well-received at smaller installations or inside barracks, hospitals and large headquarters, providing 24/7 access at locations such as Fort Carson, where the team has opened a total of 34 markets on the post and nearby Peterson SFB.
The Exchange is fully invested in keeping the military community connected, adding 17 new cell towers and 74 mobile centers worldwide. The infrastructure provides broadband services to more than 390,000 customers and 1,000 government business customers daily. The telecom team is working on more than 50 infrastructure projects to improve cellular and broadband internet connectivity.
Reinvesting in the shopping experience
The Real Estate directorate completed more than $110 million in projects, working with regions, store teams and other directorates as well as military commands to prioritize projects that will provide the greatest benefit for the heroes the Exchange serves. Openings included:
- A renovated BX at Laughlin AFB in south Texas
- A renovated mini-mall at Fort Jackson in South Carolina
- An upgraded Camp Walker Exchange in South Korea
- An upgrade of the White Sands Missile Range Troop Store, done in partnership with the Army as part of the Exchange’s Quality-of-Life initiative for remote and isolated locations
- A renovated Express at Dugway Proving Ground Express, a major Quality-of-Life milestone for the remote Utah installation
- An Express upgrade at Minot AFB in North Dakota.
Family serving family
The Exchange is focused on maintaining the family, sustaining the family and investing in our Nation’s military family. Your commitment to the best customers in the world is a true force multiplier to our Nation’s military mission.
Your steadfast service is a daily illustration of our family serving family core value.
It is an honor to serve those who serve and have served with you.
Veteran for Life!
Very best,
Tom
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