BUILD-A-BEAR WORKSHOP INC 10-Q

Item 1. Financial Statements BUILD-A-BEAR WORKSHOP, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (Dollars in thousands, except share and per share data) May 2, January 31, May 3, 2026 2026 2025 (Unaudited) (Unaudited) ASSETS Current assets: Cash, cash equivalents and restricted cash $ 26,247 $ 26,755 $ 44,342 Inventories, net 77,806 82,203 72,299 Receivables, net 31,630 21,459 13,800 Prepaid expenses and other current assets 12,149 9,603 12,156 Total current assets 147,832 140,020 142,597 Operating lease right-of-use asset 119,622 121,129 92,699 Property and equipment, net 73,778 70,926 59,260 Deferred tax assets 7,243 7,370 7,667 Other assets, net 5,610 6,008 6,080 Total Assets $ 354,085 $ 345,453 $ 308,303 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 15,994 $ 15,318 $ 15,890 Accrued expenses 33,932 26,104 24,273 Operating lease liability short term 28,276 28,651 26,507 Gift cards and customer deposits 14,260 15,289 14,851 Deferred revenue and other 4,142 5,264 3,830 Total current liabilities 96,604 90,626 85,351 Operating lease liability long term 97,414 98,647 72,957 Other long-term liabilities 1,048 1,152 1,313 Stockholders' equity: Preferred stock, par value $ 0.01 , Shares authorized: 15,000,000 ; No shares issued or outstanding at May 2, 2026, January 31, 2026 and May 3, 2025 - - - Common stock, par value $ 0.01 , Shares authorized: 50,000,000 ; Issued and outstanding: 12,628,877 , 12,808,954 , and 13,174,014 shares, respectively 126 128 132 Additional paid-in capital 59,919 60,821 61,602 Accumulated other comprehensive loss ( 10,939 ) ( 10,760 ) ( 11,295 ) Retained earnings 109,913 104,839 98,243 Total stockholders' equity 159,019 155,028 148,682 Total Liabilities and Stockholders' Equity $ 354,085 $ 345,453 $ 308,303 See accompanying notes to condensed consolidated financial statements. 4 Table of Contents BUILD-A-BEAR WORKSHOP, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (Unaudited) (Dollars in thousands, except share and per share data) Thirteen weeks ended May 2, May 3, 2026 2025 Revenues: Net retail sales $ 113,466 $ 119,589 Commercial revenue 10,948 7,623 International franchising 856 1,183 Total revenues 125,270 128,395 Costs and expenses: Cost of merchandise sold - retail 40,338 51,571 Cost of merchandise sold - commercial 4,419 3,014 Cost of merchandise sold - international franchising 641 824 Total cost of merchandise sold 45,398 55,409 Consolidated gross profit 79,872 72,986 Selling, general and administrative expense 56,126 53,555 Interest income, net ( 134 ) ( 200 ) Income before income taxes 23,880 19,631 Income tax expense 5,581 4,312 Net income $ 18,299 $ 15,319 Foreign currency translation adjustment ( 179 ) 1,259 Comprehensive income $ 18,120 $ 16,578 Income per common share: Basic $ 1.45 $ 1.17 Diluted $ 1.45 $ 1.17 Shares used in computing common per share amounts: Basic 12,584,388 13,080,301 Diluted 12,638,710 13,144,243 See accompanying notes to condensed consolidated financial statements. 5 Table of Contents BUILD-A-BEAR WORKSHOP, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (Dollars in thousands) Thirteen weeks ended May 2, May 3, 2026 2025 Cash flows provided by operating activities: Net income $ 18,299 $ 15,319 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 4,002 3,700 Share-based and performance-based stock compensation 629 1,546 Provision/adjustments for doubtful accounts ( 29 ) ( 111 ) Gain on disposal of property and equipment ( 4 ) ( 10 ) Net change in film costs and advances ( 33 ) ( 29 ) Deferred taxes 113 - Change in assets and liabilities: Inventories, net 4,300 ( 1,766 ) Receivables, net 3,004 2,730 IEEPA tariff refund receivable ( 13,175 ) - Prepaid expenses and other assets ( 2,508 ) 638 Accounts payable and accrued expenses 8,914 7,086 Operating leases ( 122 ) ( 121 ) Gift cards and customer deposits ( 1,025 ) ( 1,004 ) Deferred revenue ( 1,141 ) ( 175 ) Net cash provided by operating activities 21,224 27,803 Cash flows used in investing activities: Purchases of property and equipment ( 6,869 ) ( 2,907 ) Net cash used in investing activities ( 6,869 ) ( 2,907 ) Cash flows used in financing activities: Purchases of common stock for employee equity awards, net of tax ( 350 ) ( 1,266 ) Cash dividends paid on vested participating securities ( 2,895 ) ( 2,934 ) Purchases of Company’s common stock ( 11,509 ) ( 4,208 ) Net cash used in financing activities ( 14,754 ) ( 8,408 ) Effect of exchange rates on cash ( 109 ) 96 (Decrease)/Increase in cash, cash equivalents, and restricted cash ( 508 ) 16,584 Cash, cash equivalents and restricted cash, beginning of period 26,755 27,758 Cash, cash equivalents and restricted cash, end of period $ 26,247 $ 44,342 Supplemental disclosure of cash flow information: Cash and cash equivalents $ 25,843 $ 43,941 Restricted cash from long-term deposits $ 404 $ 401 Total cash, cash equivalents and restricted cash $ 26,247 $ 44,342 Net cash paid during the period for income taxes $ 286 $ 636 See accompanying notes to condensed consolidated financial statements. 6 Table of Contents Notes to Condensed Consolidated Financial Statements 1. Basis of Presentation The condensed consolidated financial statements included herein are unaudited and have been prepared by Build-A-Bear Workshop, Inc. and its subsidiaries (collectively, the “Company”) pursuant to the rules and regulations of the United States Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with United States ("U.S.") generally accepted accounting principles (“GAAP”) have been condensed or omitted pursuant to such rules and regulations. The condensed consolidated balance sheet of the Company as of January 31, 2026 , was derived from the Company’s audited consolidated balance sheet as of that date. All other condensed consolidated financial statements contained herein are unaudited and reflect all adjustments which are, in the opinion of management, necessary to summarize fairly the financial position of the Company and the results of the Company’s operations and cash flows for the periods presented. All of these adjustments are of a normal recurring nature. All significant intercompany balances and transactions have been eliminated in consolidation. Because of the seasonal nature of the Company’s operations, results of operations of any single reporting period should not be considered as indicative of results for a full year. These condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements for the fiscal year ended January 31, 2026 , which were included in the Company’s Annual Report on Form 10 -K filed with the SEC on April 16, 2026, as amended by Amendment No. 1 filed with the SEC on April 17, 2026 ( the "2025 Form 10 -K"). Significant Accounting Policies The Company's significant accounting policies are summarized in Note 2 to the consolidated financial statements included in its 2025 Form 10 -K. Recently Adopted Accounting Pronouncements In July 2025, the FASB issued ASU 2025 - 05, Financial Instruments—Credit Losses (Topic 326 ): Measurement of Credit Losses for Accounts Receivable and Contract Assets. ASU 2025 - 05 provides the option to apply a practical expedient to address implementation challenges related to the estimation of expected credit losses for current accounts receivable and current assets arising from transactions accounted for under revenue recognition (Topic 606 ) and assets acquired through business combinations. The practical expedient allows entities to assume that current conditions as of the balance sheet date remain unchanged over the life of these assets when developing forecasts. The guidance allows entities to bypass the requirement to incorporate macro-economic data into their forecast when such data is not expected to materially affect the estimate. The Company adopted the guidance in ASU 2025 - 05 effective February 1, 2026 prospectively and applied the practical expedient. The adoption of this new accounting standard did not have a material impact on the Company's condensed consolidated financial statements. 7 Table of Contents 2. Revenue Currently, most of the Company’s revenue is derived from direct-to-consumer ("DTC") retail sales (including from its e-commerce sites) and is recognized when control of the merchandise is transferred to the customer. The Company's disaggregated revenue is fully disclosed as net sales to external customers by reporting segment and by geographic area (See Note 11 — Segment Information for additional information). The Company's direct-to-consumer reporting segment represents 91 % of consolidated revenue for the first quarter of fiscal 2026 . The majority of these sales transactions were single performance obligations that were recorded when control of merchandise was transferred to the customer. The following is a description of principal activities from which the Company generates its revenue through three reportable segments. The Company’s direct-to-consumer segment includes the operating activities of corporately-managed stores, other retail-delivered operations and online sales. Direct-to-consumer revenue is recognized when control of the merchandise is transferred to the customer and for the Company's online sales, control generally transfers upon delivery to the customer. Revenue is measured as the amount of consideration, including any discounts or incentives, the Company expects to receive in exchange for transferring the merchandise. Product returns have historically averaged less than one -half of one percent due to the personalized and interactive nature of sales, where consumers customize their own stuffed animal. The Company has elected to exclude from revenue all collected sales, value add, and other taxes paid by its customers. For the Company’s gift cards, revenue is deferred for single transactions until redemption including any related gift card discounts. Approximately 80 % of gift cards issued are redeemed within three years of issuance and over the last three years, approximately 65 % of gift cards issued have been redeemed within the first twelve months. In addition, unredeemed gift cards or breakage revenue is recorded in proportion to the consumers’ redemption pattern using an estimated breakage rate based on historical experience. Following the reopening of stores after the pandemic, the Company experienced lower gift card redemption rates for all periods of outstanding activated cards compared to historical redemption patterns observed prior to fiscal year 2020, which impacted the gift card breakage rate. Management believes that the redemption behavior observed during the pandemic was not indicative of long-term customer behavior and accordingly adjusted the historical redemption data used to calculate the breakage rate. In more recent periods, gift card redemption patterns have generally returned to levels consistent with pre- 2020 experience. The Company continues to evaluate expected breakage annually and adjusts the breakage rates in the fourth quarter of each year, or at other times if significant changes in consumer behavior are detected. Changes to breakage estimates impact revenue recognition prospectively. Further, given the magnitude of the Company's gift card liability, the changes in breakage rates could have a significant impact on the amount of breakage revenue recognized in future periods. As a matter of sensitivity, a hypothetical 1% change in our gift card breakage rate in fiscal 2025 would have resulted in a change in breakage revenue of $ 1.3 million. For certain qualifying transactions, a portion of revenue transactions are deferred for the obligation related to the Company’s loyalty program or when a material right in the form of a future discount is granted. In these transactions, the transaction price is allocated to the separate performance obligations based on the relative standalone selling price. The standalone selling price for the points earned for the Company’s loyalty program is estimated using the net retail value of the merchandise purchased, adjusted for estimated breakage based on historical redemption patterns. The revenue associated with the initial merchandise purchased is recognized immediately and the value assigned to the points is deferred until the points are redeemed, forfeited or expired. Loyalty program points expire if there is no qualifying account activity for a period of 12 months. The Company issues certificates daily to loyalty program members who have earned 100 or more points in North America and 50 points or more in the United Kingdom (the "U.K.") with certificates historically expiring in four months if not redeemed. The Company assesses the redemption rates of its certifications on a quarterly basis to update the rate at which loyalty program points turn into certifications and the rate that certifications are redeemed. The Company classifies contract liabilities related to the loyalty program as deferred revenue and other on the condensed consolidated balance sheet. The Company’s commercial segment includes transactions with other businesses and is mainly comprised of wholesale sales of merchandise, supplies and fixtures, licensing the Company's intellectual properties for third -party use, and revenues generated from entertainment activities. Revenue for wholesale sales is recognized when the control of the merchandise or fixtures is transferred to the customer, which generally occurs upon shipment to the customer. The license agreements provide the customer with highly interrelated rights, including the Build-A-Bear retail operations proprietary process, that are not distinct in the context of the contract and therefore, have been accounted for as a single performance obligation and recognized as licensee sales occur. If the contract includes a guaranteed minimum, the minimum guarantee is recognized on a straight-line basis over the guarantee term until such time as royalties earned through licensee sales exceed the minimum guarantee. The Company classifies these guaranteed minimum contract liabilities as deferred revenue and other on the condensed consolidated balance sheet. Entertainment revenue is generated through the sale of entertainment assets directly to customers or through licensing agreements. The Company’s international franchising segment includes the activities with franchisees who operate store locations in certain countries and includes development fees, sales-based royalties and merchandise, including supplies and fixture sales. The Company's obligations under the franchise agreements are ongoing and include operations and product development support and training, generally concentrated around initial store openings. These obligations are highly interrelated rights that are not distinct in the context of the contract and, therefore, have been accounted for as a single performance obligation and recognized as franchisee sales occur. If the contract includes an initial, one -time nonrefundable development fee, this fee is recognized on a straight-line basis over the term of the franchise agreement, which may extend for periods up to 25 years. The Company classifies these initial, one -time nonrefundable franchise fee contract liabilities as deferred revenue and other on its condensed consolidated balance sheet. Revenue from merchandise and fixture sales is recognized when control is transferred to the franchisee, which generally occurs upon delivery. The Company also incurs expenses directly related to the startup of new franchises, which may include finder’s fees, legal and travel costs, expenses related to its ongoing support of the franchises and employee compensation. Accordingly, the Company’s policy is to capitalize any finder’s fee, as an incremental cost, and expense all other costs as incurred. The Company amortizes these capitalized costs into expense in the same pattern as the development fee as described previously. These capitalized costs for the thirteen weeks ended May 2, 2026 are not material to the financial statements. The Company reserves for “expected” credit losses on financial instruments and other commitments to extend credit rather than the “incurred loss” model. These expected credit losses for financial assets held at the reporting date are to be based on historical experience, current conditions and reasonable and supportable forecasts. For the thirteen weeks ended May 2, 2026 and May 3, 2025 , the Company's accounts receivable are net of $ 4.1 million and $ 7.0 million, inclusive of the allowance for credit losses and the reserve for the UK's customs authority "HMRC" matter of $ 0.6 million and $ 3.6 million, respectively. See Note 12 for further discussion of the HMRC matter. On February 20, 2026, the U.S. Supreme Court issued a ruling striking down certain tariffs previously imposed under the International Emergency Economic Powers Act ("IEEPA"). Further, on March 4, 2026, the Court of International Trade ruled that U.S. Customs and Border Protection must refund the IEEPA tariffs that were collected. Based on these court rulings affirming the Company's legal right to recover IEEPA tariffs, the Company determined that it is entitled to a tariff refund of approximately $ 13.2 million, which was recorded in receivables, net on the condensed consolidated balance sheet. For the thirteen weeks ended May 2, 2026, the Company recorded a $ 10.4 million benefit for these tariffs in cost of merchandise sold-retail on the condensed consolidated statements of operations and comprehensive income and reduced the carrying value of inventory by $ 2.8 million on the condensed consolidated balance sheet as of May 2, 2026. 8 Table of Contents 3. Leases The majority of the Company's leases relate to retail stores and corporate offices. For leases with terms greater than 12 months, the Company records the related asset and obligation at the present value of lease payments over the term. Most new retail store leases have an original term of a five to ten -year base period and may include renewal options to extend the lease term beyond the initial base period. The extension periods are typically much shorter than the original lease term given the Company's strategic decision to maintain a high level of lease optionality. Some leases also include early termination options, which can be exercised under specific conditions. Additionally, the Company may operate stores for a period of time on a month-to-month basis after the expiration of the lease term. The Company's lease agreements do not contain any material residual value guarantees or material restrictive covenants. Additionally, certain leases contain incentives, such as construction allowances from landlords and/or rent abatements subsequent to taking possession of the leased property. The table below presents certain information related to the lease costs for operating leases for the thirteen weeks ended May 2, 2026 and May 3, 2025 (in thousands). Thirteen weeks ended May 2, 2026 May 3, 2025 Operating lease costs $ 11,409 $ 10,443 Variable lease costs (1) 2,214 2,380 Short term lease costs 27 28 Total Operating Lease costs $ 13,650 $ 12,851 ( 1 ) Variable lease costs consist of leases with variable rent structures, which are intended to increase flexibility in an environment with expected high sales volatility and provide a natural hedge against potential sales declines. Other information The table below presents supplemental cash flow information related to leases for the thirteen weeks ended May 2, 2026 and May 3, 2025 (in thousands). Thirteen weeks ended May 2, 2026 May 3, 2025 Operating cash flows for operating leases $ 11,062 $ 10,216 As of May 2, 2026 and May 3, 2025 , the weighted-average remaining operating lease term was 6.3 years and 6.1 years, respectively, and the weighted-average discount rate was 6.9 % and 7.2 %, respectively, for operating leases recognized on the Company's condensed consolidated balance sheets. The value of our operating lease asset was $ 119.6 million and $ 92.7 million as of May 2, 2026 and May 3, 2025 , respectively. The increase was driven by the Company entering into leases for new stores as well as securing longer-term extensions for existing stores resulting in contracts with more favorable terms. For the thirteen weeks ended May 2, 2026 and the thirteen weeks ended May 3, 2025 the Company incurred no impairment charges against its right-of-use operating lease assets. Undiscounted cash flows The table below reconciles the undiscounted cash flows for each of the first five years and total of the remaining years to the operating lease liabilities recorded on the condensed consolidated balance sheet (in thousands). Operating Leases 2026 $ 31,978 2027 27,801 2028 22,270 2029 17,569 2030 13,816 Thereafter 41,129 Total minimum lease payments 154,563 Less: amount of lease payments representing interest ( 28,873 ) Present value of future minimum lease payments 125,690 Less: current obligations under leases ( 28,276 ) Long-term lease obligations $ 97,414 As of May 2, 2026, the Company had additional executed leases that had not yet commenced with operating lease liabilities of $ 4.4 million. These leases are expected to commence in the second quarter of fiscal 2026 with lease terms of 10 years. 9 Table of Contents 4. Other Assets Prepaid expenses and other current assets consist of the following (in thousands): May 2, January 31, May 3, 2026 2026 2025 Prepaid occupancy (1) $ 4,284 $ 2,570 $ 4,570 Prepaid insurance 655 1,068 512 Prepaid taxes (2) 43 81 181 Prepaid gift card fees 448 511 411 Prepaid royalties 376 111 285 Other (3) 6,343 5,262 6,197 Total $ 12,149 $ 9,603 $ 12,156 ( 1 ) Prepaid occupancy consists of prepaid expenses related to variable non-lease components. ( 2 ) Prepaid taxes consist of prepaid federal and state income tax. ( 3 ) Other consists primarily of prepaid expense related to information technology maintenance contracts and software as a service. Other non-current assets consist of the following (in thousands): May 2, January 31, May 3, 2026 2026 2025 Entertainment assets (1) $ 4,164 $ 4,493 $ 4,251 Deferred compensation 1,322 1,356 1,665 Other (2) 124 159 164 Total $ 5,610 $ 6,008 $ 6,080 ( 1 ) Entertainment assets includes the direct costs, production overhead and development costs in producing entertainment assets such as films or music. ( 2 ) Other consists primarily of deferred financing costs related to the Company's credit facility. 5. Accrued Expenses Accrued expenses consist of the following (in thousands): May 2, January 31, May 3, 2026 2026 2025 Accrued wages, bonuses and related expenses $ 20,837 $ 16,824 $ 18,351 Sales and value added taxes payable 2,184 3,341 2,219 Current income taxes payable 9,086 3,943 2,921 Accrued rent and related expenses (1) 875 1,046 782 Accrued expense - other (2) 950 950 - Total $ 33,932 $ 26,104 $ 24,273 ( 1 ) Accrued rent and related expenses consist of accrued costs associated with non-lease components. ( 2 ) Accrued expense - other consists of costs associated with legal accruals. 10 Table of Contents 6. Stock-based Compensation On April 14, 2020, the Company's Board of Directors (the “Board”) adopted, subject to stockholder approval, the Build-A-Bear Workshop, Inc. 2020 Omnibus Incentive Plan (the “2020 Incentive Plan”). On June 11, 2020, the Company’s stockholders approved the 2020 Incentive Plan. On April 11, 2023, the Board adopted, subject to stockholder approval, the Build-A-Bear Workshop, Inc. Amended and Restated 2020 Omnibus Incentive Plan (the “Restated 2020 Incentive Plan”). On June 8, 2023, at the Company’s 2023 Annual Meeting of Stockholders, the Company’s stockholders approved the Restated 2020 Incentive Plan. The Restated 2020 Incentive Plan, which is administered by the Compensation and Human Capital Committee of the Board, permits the grant of stock options (including both incentive and non-qualified stock options), stock appreciation rights, other stock-based awards, including restricted stock and restricted stock units, cash-based awards, and performance awards pursuant to the terms of the Restated 2020 Incentive Plan. The Restated 2020 Incentive Plan will terminate on April 11, 2033, unless earlier terminated by the Board. The total number of shares of the Company’s common stock authorized for issuance under the Restated 2020 Incentive Plan increased by 800,000 to a maximum of 1,800,000 since its inception as the 2020 Incentive Plan, subject to customary capitalization adjustments, substitutions of acquired company awards and certain additions of acquired company plan shares, plus shares that are subject to outstanding awards made under the Build-A-Bear Workshop, Inc. 2017 Omnibus Incentive Plan (the “2017 Plan”) that on or after April 14, 2020, may be forfeited, expire or be settled for cash. For the thirteen weeks ended May 2, 2026 and May 3, 2025, selling, general and administrative expense included stock-based compensation expense of $ 0.7 million and $ 0.5 million, respectively. As of May 2, 2026 , there was $ 5.6 million of total unrecognized compensation expense related to unvested restricted stock awards which is expected to be recognized over a weighted-average period of 1.6 years. As of May 2, 2026 and January 31, 2026 the Company had no outstanding stock options. The following table is a summary of the balances and activity related to time-based and performance-based restricted stock for the thirteen weeks ended May 2, 2026 Time-Based Restricted Stock Performance-Based Restricted Stock Shares Weighted Average Grant Date Fair Value Shares Weighted Average Grant Date Fair Value Outstanding, January 31, 2026 (1) 73,588 $ 37.97 156,665 $ 32.82 Granted (1) 67,707 38.04 99,826 38.04 Vested ( 21,397 ) 26.11 - - Adjustment for performance achievement - - ( 40,494 ) 24.75 Earned and vested - - ( 9,810 ) 24.75 Forfeited (1) - - - - Outstanding, May 2, 2026 (1) 119,898 $ 36.44 206,187 $ 33.20 ( 1 ) Performance-based restricted stock outstanding, granted, and forfeited are presented at 100% of target. The total fair value of shares vested during the thirteen weeks ended May 2, 2026 and May 3, 2025 was $ 0.8 million and $ 2.0 million, respectively. The outstanding performance shares as of May 2, 2026 consist of the following: Performance Shares Unearned shares subject to performance-based restrictions at target: 2024 - 2026 consolidated, cumulative EBITDA objectives 44,171 2024 - 2026 consolidated cumulative revenue objectives 14,724 2025 - 2027 consolidated, consolidated revenue growth objectives 47,466 2026 - 2028 consolidated, consolidated revenue growth objectives 99,826 Performance shares outstanding, May 2, 2026 206,187 7. Income Taxes The Company's effective tax rate was 23.4 % for the thirteen weeks ended May 2, 2026 compared to 22.0 % for the thirteen weeks ended May 3, 2025 . In the first quarter of fiscal 2026, the effective tax rate differed from the statutory rate of 21 % primarily due to state income tax expense offset by the tax impact of equity awards vesting and the foreign-derived deduction eligible income (formerly foreign derived intangible income). In the first quarter of fiscal 2025, the effective tax rate differed from the statutory rate of 21 % primarily due to state income tax expense partially offset by the tax impact of equity awards vesting and foreign derived intangible income. In addition, in the first quarter of fiscal 2026 and 2025, the Company remains in a full valuation allowance in certain foreign jurisdictions. 11 Table of Contents 8. Stockholders’ Equity The following table sets forth the changes in stockholders’ equity (in thousands) for the thirteen weeks ended May 2, 2026 and May 3, 2025 (in thousands). For the thirteen weeks ended May 2, 2026 For the thirteen weeks ended May 3, 2025 Common Retained Common Retained stock APIC (1) AOCI (2) earnings Total stock APIC (1) AOCI (2) earnings Total Balance, beginning $ 128 $ 60,821 $ ( 10,760 ) $ 104,839 $ 155,028 $ 133 $ 61,987 $ ( 12,554 ) $ 89,516 $ 139,082 Shares issued under employee stock plans 243 243 1,103 1,103 Stock-based compensation 381 381 284 284 Shares withheld in lieu of tax withholdings - ( 350 ) ( 350 ) ( 1,266 ) ( 1,266 ) Share repurchase ( 2 ) ( 1,176 ) ( 10,331 ) ( 11,509 ) ( 1 ) ( 506 ) ( 3,701 ) ( 4,208 ) Cash dividends ( 2,894 ) ( 2,894 ) ( 2,891 ) ( 2,891 ) Other - - - Other comprehensive income ( 179 ) ( 179 ) 1,259 1,259 Net income 18,299 18,299 15,319 15,319 Balance, ending $ 126 $ 59,919 $ ( 10,939 ) $ 109,913 $ 159,019 $ 132 $ 61,602 $ ( 11,295 ) $ 98,243 $ 148,682 ( 1 ) Additional paid-in capital (“APIC”) ( 2 ) Accumulated other comprehensive loss (“AOCI”) During the thirteen weeks ended May 2, 2026 , the Company utilized $ 11.4 million in cash to repurchase 248,118 shares under its $ 100 million stock repurchase program that was authorized by the Board on September 11, 2024 ( the "September 2024 Stock Repurchase Program"). Between the end of the first fiscal quarter of 2026 and June 9, 2026, the Company utilized an additional $ 3.8 million in cash to repurchase 103,064 shares under the September 2024 Stock Repurchase Program, leaving an aggregate of $ 46.5 million available for future repurchases under that plan. For the thirteen weeks ended May 2, 2026 , the Board authorized cash dividends to shareholders of $ 2.9 million on March 11, 2026, as the Board declared a quarterly cash dividend of $ 0.23 per share on the issued and outstanding common stock of the company. The dividend was paid on April 9, 2026, to all stockholders of record as of March 26, 2026. During the thirteen weeks ended May 3, 2025 , the Company utilized $ 4.2 million in cash to repurchase 108,502 shares under the September 2024 Stock Repurchase Program. The Company's Board of Directors also declared a quarterly cash dividend of $ 0.22 per share that was paid on April 10, 2025, to shareholders of record as of March 27, 2025. 12 Table of Contents 9. Income per Share The following table sets forth the computation of basic and diluted net income per share (in thousands, except share and per share data): Thirteen weeks ended May 2, May 3, 2026 2025 NUMERATOR: Net income $ 18,299 $ 15,319 DENOMINATOR: Weighted average number of common shares outstanding - basic 12,584,388 13,080,301 Dilutive effect of share-based awards: 54,322 63,942 Weighted average number of common shares outstanding - dilutive 12,638,710 13,144,243 Basic net income per common share $ 1.45 $ 1.17 Diluted net income per common share $ 1.45 $ 1.17 In calculating the diluted income per share for the thirteen weeks ended May 2, 2026 , there were 19,214 shares of common stock that were outstanding at the end of the period that were not included in the computation of diluted income per share due to their anti-dilutive effect. For the thirteen weeks ended May 3, 2025, there were zero shares of common stock that were outstanding at the end of the period that were not included in the computation of diluted income per share due to their anti-dilutive effect. 10. Comprehensive Income The difference between comprehensive income or loss and net income or loss is the result of foreign currency translation adjustments on the balance sheets of subsidiaries whose functional currency is not the U.S. dollar. The accumulated other comprehensive loss balance on May 2, 2026 and May 3, 2025 was comprised entirely of foreign currency translation. For the thirteen weeks ended May 2, 2026 and May 3, 2025 , the Company had no reclassifications out of accumulated other comprehensive loss. 13 Table of Contents 11. Segment Information The Company’s operations are conducted through three operating segments, consisting of DTC, commercial and international franchising. The DTC segment includes the operating activities of corporately-managed locations and other retail delivery operations in the U.S., Canada, Puerto Rico, the Republic of Ireland and the U.K., including the Company’s e-commerce sites and temporary stores. The commercial segment includes the Company’s transactions with other businesses, mainly comprised of wholesale sales of merchandise, supplies and fixtures, licensing the Company's intellectual properties for third party use, and revenues generated from entertainment activities. The international franchising segment includes the licensing activities of the Company’s franchise agreements with store locations in select countries in Asia, Australia, the Middle East, Africa, and South America. The operating segments have discrete sources of revenue, different capital structures and different cost structures. These operating segments represent the basis on which the Company’s chief operating decision maker regularly evaluates the business in assessing performance, determining the allocation of resources and the pursuit of future growth opportunities. Accordingly, the Company has determined that each of its operating segments represent a reportable segment. The three reportable segments follow the same accounting policies used for the Company’s consolidated financial statements. The following is a summary of the financial information for the Company’s reportable segments (in thousands): Direct-to- International Consumer Commercial Franchising Total Thirteen weeks ended May 2, 2026 Total Revenue $ 113,466 $ 10,948 $ 856 $ 125,270 Cost of Goods Sold 40,338 4,419 641 45,398 Gross Profit 73,128 6,529 215 79,872 Selling, General & Administrative 36,080 103 - 36,183 Contribution Margin 37,048 6,426 215 43,689 Overhead Expenses (1) 19,943 Interest Income ( 134 ) Income before income taxes $ 23,880 Thirteen weeks ended May 3, 2025 Total Revenue $ 119,589 $ 7,623 $ 1,183 $ 128,395 Cost of Goods Sold 51,571 3,014 824 55,409 Gross Profit 68,018 4,609 359 72,986 Selling, General & Administrative 34,352 96 - 34,448 Contribution Margin 33,666 4,513 359 38,538 Overhead Expenses (1) 19,107 Interest Income ( 200 ) Income before income taxes $ 19,631 ( 1 ) Overhead expenses contain selling, general and administrative expenses not attributable to a segment. 14 Table of Contents Total assets, depreciation and amortization, and capital expenditures for the Company's segments, as well as for Corporate and support, are as follows (in thousands): Direct-to- International Consumer Commercial Franchising Corporate Total Thirteen weeks ended May 2, 2026 Total Assets $ 258,483 $ 15,627 $ 1,446 $ 78,529 $ 354,085 Depreciation and amortization 2,564 358 - 1,080 4,002 Capital Expenditures 5,411 - 1,458 6,869 Thirteen weeks ended May 3, 2025 Total Assets $ 209,280 $ 11,605 $ 1,831 $ 85,587 $ 308,303 Depreciation and amortization 2,734 39 - 927 3,700 Capital Expenditures 1,354 - - 1,553 2,907 The Company’s reportable segments are primarily determined by the types of products and services that they offer. Each reportable segment may operate in many geographic areas. Revenues are recognized in the geographic areas based on the location of the customer or franchisee. The following schedule is a summary of the Company’s sales to external customers and long-lived assets by geographic area (in thousands): North America (1) Europe (2) Other (3) Total Thirteen weeks ended May 2, 2026 Net sales to external customers $ 107,498 $ 14,335 $ 3,437 $ 125,270 Thirteen weeks ended May 3, 2025 Net sales to external customers $ 111,273 $ 15,627 $ 1,495 $ 128,395 For purposes of this table only: ( 1 ) North America includes corporately-managed locations and sales to wholesale customers in the United States and Canada. ( 2 ) Europe includes corporately-managed locations in the U.K. and the Republic of Ireland and sales to wholesale customers in Europe. ( 3 ) Other includes wholesale and franchise businesses outside of North America and Europe. 15 Table of Contents 12. Contingencies In the normal course of business, the Company is subject to legal proceedings, government inquiries and claims, and other commercial disputes. If one or more of these matters has an unfavorable resolution, it is possible that the results of operations, liquidity or financial position of the Company could be materially affected in any particular period. The Company accrues a liability for these types of contingencies when it believes that it is both probable that a liability has been incurred and that it can reasonably estimate the amount of the loss. Gain contingencies are recorded when the underlying uncertainty has been settled. Assessments made by the U.K. customs authority in 2012 were appealed by the Company, which has paid the disputed duty, strictly under protest, pending the outcome of the continuing dispute, and this is included in receivables, net in the DTC segment. The U.K. customs authority contested the Company's appeal. Rulings by the First Tier Tribunal in November 2019 and Upper Tribunal in March 2021 held that duty was due on some, but not all, of the products at issue. The Company petitioned the Court of Appeal for permission to appeal certain elements of the Upper Tribunal decision, and in early November 2021, a judge granted the Company's petition for permission to appeal those elements of the Upper Tribunal decision on some, but not all, of the grounds of appeal that the Company had put forward. An appeal was heard by the Court of Appeal during the first quarter of fiscal 2022, and the Court of Appeal dismissed the appeal in the third quarter of fiscal 2022. During the fourth quarter of fiscal 2022 , the UK Supreme Court declined to hear the appeal. The Company is engaging with the customs authority to attempt to resolve all outstanding issues following the application of the determined principles. The case will return to the lower tribunal for a final ruling if outstanding issues cannot be resolved. The Company maintains a provision against the related receivable, based on a current evaluation of collectability, using the latest facts available in the dispute. During the first quarter of fiscal 2026, the Company received approximately $ 0.6 million from His Majesty's Revenue and Customs (HMRC). Following this receipt, the Company reassessed the collectability of the related receivable and adjusted both the gross receivable balance and the associated reserve by $ 3.2 million, leaving a gross receivable balance of $ 0.8 million, a reserve of $ 0.6 million, and a net receivable of $ 0.2 million. The Company believes that the outcome of this dispute will not have a material adverse impact on the results of operations, liquidity, or financial position of the Company. 16 Table of Contents