What changed in this filing

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Item 1. Business

2025-03-17 compared with 2024-03-15 · 78 added, 86 removed, 474 unchanged (26% of the section changed)

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We define our fiscal year as the 52- or 53-week period ending on the Saturday closest to January 31.

This Annual Report covers the 53-week fiscal year ended February 3, 2024 (Fiscal 2023) and the 52-week fiscal years ended January 28, 2023 (Fiscal 2022) and January 29, 2022 (Fiscal 2021).

The fiscal year ending February 1, 2025 (“Fiscal 2024”) will have 52 weeks.

This Annual Report covers the 52-week fiscal year ended February 1, 2025 (Fiscal 2024), the 53-week fiscal year ended February 3, 2024 (Fiscal 2023), and the 52-week fiscal year ended January 28, 2023 (Fiscal 2022).

Over 99% of our net sales are derived from stores we operate as Burlington Stores.

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Stores (end of period)

(a) Exclusive of relocations.

(a) Exclusive of relocations during Fiscal 2024, Fiscal 2023 and Fiscal 2022 of 31, 13 and 22 stores, respectively.

(b) Stores opened during Fiscal 2024, Fiscal 2023 and Fiscal 2022 had an average size of approximately 27,000, 27,000 and 28,000 square feet, respectively.

The total gross square footage of all stores as of the end of Fiscal 2023, Fiscal 2022, and Fiscal 2021 were 51.5 million, 50.7 million, and 49.6 million, respectively.

Of this total square footage, the area that represents the total selling square footage for all stores as of the end of Fiscal 2023, Fiscal 2022, and Fiscal 2021 were 31.5 million, 31.0 million, and 30.0 million respectively.

The total gross square footage of all stores as of the end of Fiscal 2024, Fiscal 2023, and Fiscal 2022 was 51.8 million, 51.5 million, and 50.7 million, respectively.

Of this total square footage, the area that represents the total selling square footage for all stores as of the end of Fiscal 2024, Fiscal 2023, and Fiscal 2022 was 32.7 million, 31.5 million, and 31.0 million respectively.

Distribution and Warehousing

We have five distribution centers that shipped more than 99% of merchandise units to our stores in Fiscal 2023.

We have six distribution centers that shipped more than 99% of merchandise units to our stores in Fiscal 2024.

The remaining merchandise units are drop shipped by our vendors directly to our stores.

Our two east coast distribution centers are located in Edgewater Park, New Jersey and Burlington, New Jersey.

Our three west coast distribution centers are located in San Bernardino,

California, Redlands, California, and Riverside, California.

These five distribution centers occupy an aggregate of 4,106,000 square feet, and each includes processing, shipping and storage capabilities.

In addition, we entered into a lease during Fiscal 2021 for an additional distribution center in Logan, New Jersey occupying approximately 1,029,000 square feet.

This building was used for storage and basic manual processing during Fiscal 2023, and is expected to be fully operational during Fiscal 2024.

Lastly, we entered into a lease with a purchase option during Fiscal 2023 for an additional distribution center in Ellabell, Georgia occupying approximately 2,057,000 square feet.

Our three east coast distribution centers are located in Edgewater Park, New Jersey;

Burlington, New Jersey;

and Logan, New Jersey, which became fully operational in Fiscal 2024.

three west coast distribution centers are located in San Bernardino, California, Redlands, California, and Riverside, California.

These six distribution centers occupy an aggregate of 5,135,000 square feet, and each includes processing, shipping and storage capabilities.

In addition, we entered into a lease with a purchase option during Fiscal 2023 for an additional distribution center in Ellabell, Georgia occupying approximately 2,057,000 square feet.

The purchase option was exercised during Fiscal 2024.

This building is expected to be fully operational during Fiscal 2026.

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Redlands, California (Pioneer Ave.)

Riverside, California (Cactus Ave)

Ellabell, Georgia

Riverside, California (Cactus Ave.)(c)

Ellabell, Georgia(b)

Warehousing Facilities:

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(b) We entered into a lease with a purchase option during Fiscal 2023 for an additional distribution center in Ellabell, Georgia.

The purchase option was exercised during Fiscal 2024.

This building is expected to be fully operational during Fiscal 2026.

distribution center in Riverside, California.

In addition to the distribution centers that we operate, we have arrangements with third parties for the use of pool point facilities, which we believe streamline and optimize our distribution network.

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We are committed to providing our customers with an enjoyable shopping experience in stores that are clean, neat and easy to shop.

In training our associates, our goal is to emphasize knowledgeable, friendly customer service and a sense of professional pride.

We have empowered our store teams to provide an outstanding customer experience for every customer in every store, every day.

In training our associates, our goal is to emphasize friendly customer service and a sense of professional pride.

We have empowered our store teams to provide a satisfying customer experience for every customer in every store, every day.

We have and continue to streamline processes and strive to create opportunities for fast and friendly customer interactions.

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Our Off-Price Sourcing and Merchandising Model

We believe that our ability to chase sales within the off-price model enables us to provide our customers with products that are nationally branded, fashionable, high quality and priced right.

We believe that our ability to chase sales within the off-price model enables us to provide our customers with products that are nationally branded, fashionable, high quality and at a compelling value.

We have an experienced team of General Merchandise Managers, Divisional Merchandise Managers and buyers that are continually focused on improving comparable store inventory turnover, inventory age and freshness of merchandise.

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We carry many different brands, none of which accounted for more than 6% of our net purchases during Fiscal 2024, Fiscal 2023 or Fiscal 2022.

We have no long-term purchase commitments or arrangements with any of our suppliers, and believe that we are not dependent on any one supplier.

We have no long-term

purchase commitments or arrangements with any of our suppliers, and believe that we are not dependent on any one supplier.

We continue to have good working relationships with our suppliers.

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Attracting, developing and retaining top talent is key to our growth, and our success depends on cultivating an engaged and motivated workforce.

Our goal is to create a welcoming, diverse and inclusive environment where our associates can build a career for life.

Our goal is to create a welcoming and inclusive environment where our associates can build a career for life.

Oversight and Management

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For example, our Compensation Committee is responsible for, among other things, developing and reviewing executive management succession plans and reviewing our compensation policies for executives and associates generally to assess (i) whether the compensation structure establishes appropriate incentives and (ii) the risks associated with such policies and practices.

In addition, our Nominating and Corporate Governance Committee reviews environmental, social and governance (“ESG”) trends, issues and concerns, including legislative and regulatory developments, that could significantly affect our public affairs.

Our Audit Committee receives periodic reports from, and discusses related controls and procedures with, management regarding ESG reporting and disclosures.

Our Board of Directors provides oversight of ESG matters.

As of February 1, 2025, we employed 77,532 associates, of which 78% were part-time or seasonal associates.

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The survey results help us understand the associate experience, evaluate our performance, identify our strengths and pinpoint opportunities for improvement.

Diversity, Equity and Inclusion

As Burlington continues to grow, innovate, and thrive, we are integrating diversity, equity, and inclusion ("DEI") best practices across the entire spectrum of business functions.

Our DEI strategy consists of five pillars that support all areas of the business:

• Leadership & Workforce Diversity

• Inclusive & Equitable Environments for Associates and Customers

• Enhanced Education & Awareness

• Product, Vendor & Supplier Diversity

• Community Advocacy

Burlington has a DEI team that is further supported by an enhanced governance structure consisting of additional DEI councils to support corporate, merchandising, distribution centers, and field/store operations, along with expanded Associate Resource Groups, which gives associates more ways to participate in DEI efforts as members of an associate-led community.

Learning and Development

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Customer Demographic

Our core customer is 25-49 years old, has an average annual household income of $25,000-$100,000, and is more ethnically diverse than the general population.

Our core customer is 25-49 years old, is more ethnically diverse than the general population, and most have an annual household income of $25,000-$100,000.

The core customer is educated, resides in mid- to large-sized metropolitan areas and shops for themselves, their family, and their home.

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Broad-based strategies include television and radio, while our digital and streaming audio strategies allow for more personalized and targeted messaging.

Email reaches our best customers, while social marketing, including relationships with influencers, allows for authentic consumer engagement.

Email reaches our best customers, while social media marketing, including relationships with influencers, allows for authentic consumer engagement.

Burlington.com highlights our great merchandise values, while encouraging customers to visit our stores to discover fantastic deals on the brands and products they love - from stylish apparel to everything they need and want for their entire family and home.

retail apparel and home furnishings markets are highly fragmented and competitive.

We compete on the basis of a combination of factors, including, among others, price, breadth, quality and style of merchandise offered, in-store experience, level of

customer service, ability to identify and respond to new and emerging fashion trends, brand image and scalability.

We compete on the basis of a combination of factors, including, among others, price, breadth, quality and style of merchandise offered, in-store experience, level of customer service, ability to identify and respond to new and emerging fashion trends, brand image and scalability.

We compete for business with department stores, off-price retailers, specialty stores, online retailers, discount stores, wholesale clubs, and outlet stores, as well as with certain traditional, full-price retail chains that have developed off-price concepts.

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We are the owner of certain registered and common law trademarks, service marks and tradenames (collectively referred to as the Marks) that we use in connection with our business.

Our Marks include, but are not limited to, “Burlington Stores,” “BCF,” “Burlington,” “Burlington Coat Factory,” “Cohoes,” “B” and “Baby Depot.” We consider these Marks and the accompanying name recognition to be valuable to our business.

Our Marks include, but are not limited to, “Burlington,” “Burlington Coat Factory,” “B, stylized ” and “DEALS.

WOW!” We consider these Marks and the accompanying name recognition to be valuable to our business.

We believe that our rights to these properties are adequately protected.

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therefore, we encourage investors, the media, our customers, business partners and others interested in the Company to review the information posted on our website, as well as the following social media channels:

Facebook ( www.facebook.com/BurlingtonStores ) and X (formerly Twitter) ( www.twitter.com/burlington ).

Facebook ( www.facebook.com/BurlingtonStores ) and X (formerly Twitter) ( www.x.com/burlington ).

Any updates to the list of social media channels we may use to communicate material information will be posted on the Investor Relations page of our website at www.burlingtoninvestors.com .

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could lead to a decrease in spending by consumers.

In addition, natural disasters, industrial accidents, acts of war or global international conflicts (such as the conflict in Ukraine or the Hamas-Israel war), and public health issues (such as pandemics or epidemics) could have the effect of disrupting supplies and raising prices globally which, in turn, may have adverse effects on the world and U.S.

economies and lead to a downturn in consumer confidence and spending.

Certain of these risks, such as risks arising from political volatility, may be enhanced in 2024 and other election years.

We have also experienced inflationary pressure in our supply chain and with respect to raw materials and finished goods to a greater extent than we have in recent years due to current economic conditions.

In addition, natural disasters, industrial accidents, acts of war or global international conflicts (such as the conflict in Ukraine or the conflict in the Middle East), and public health issues (such as pandemics or epidemics) have in the past and may in the future have the effect of disrupting supplies and raising prices globally which, in turn, may have adverse effects on the world and U.S.

economies and lead to a

downturn in consumer confidence and spending.

Certain of these risks, such as risks arising from political volatility, may be enhanced in 2025 in light of the U.S.

administration’s change in trade and tariff policies.

There can be no assurance that we will be able to offset inflationary pressure and other fluctuations in costs in the future, or that consumer behavior or our business, operations, liquidity, and/or financial results, will not be negatively affected by continued inflation in the future.

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Failure to effectively meet these changing expectations and demands may adversely impact our reputation and our financial results.

We may be unable to meet our environmental, social or governance (“ESG”) goals or otherwise meet the expectations of our stakeholders with respect to ESG matters.

Many stakeholders, including investors, customers, employees, consumers and others, have increasingly focused on ESG topics, including environmental sustainability and corporate social responsibility matters such as climate change, packaging and waste reduction, energy consumption, and diversity, equity and inclusion in a variety of ways that are not necessarily consistent.

We may be unable to meet evolving regulatory requirements and stakeholder expectations regarding environmental, social or governance (ESG) matters.

Many stakeholders, including investors, customers, employees, consumers and others, have increasingly focused on ESG topics, including environmental sustainability and corporate social responsibility matters such as climate change, packaging and waste reduction, and energy consumption in a variety of ways that are not necessarily consistent.

We face pressures from certain constituencies to meet our goals related to, and to make significant advancements toward achievements in, these areas.

Achievement of our goals is subject to risks and uncertainties, many of which are outside of our control, and it is possible that we may fail to achieve these goals or that these constituencies may not be satisfied with the goals we set or our efforts to achieve them.

Our disclosure on these matters and our failure, or perceived failure, to meet our goals and otherwise effectively address these matters, could harm our reputation, which could negatively impact our business, our relationship with our various stakeholders, and our results of operations.

Our disclosure on these matters and our failure, or perceived failure, to meet our goals and otherwise address these matters to our stakeholders’ satisfaction, could harm our reputation, which could negatively impact our business, our relationship with our various stakeholders, and our results of operations.

In addition, we could be criticized for the scope of our ESG initiatives.

Our failure to meet shifting stakeholder expectations could negatively impact our brand, image, reputation, credibility, and the willingness of our customers and suppliers to do business with us.

In addition, developing and acting on ESG initiatives, including collecting, measuring and reporting related data, can be costly, difficult and time consuming.

Significant expenditures and commitment of time by management, employees and outside advisors may be involved in developing, implementing and overseeing policies, practices and internal controls related to ESG risk and performance, and we may undertake additional costs to control, assess and report on ESG metrics as the nature, scope and complexity of ESG reporting, diligence and disclosure requirements expand.

For example, the State of California recently passed the Climate Corporate Data Accountability Act and the Climate-Related Financial Risk Act that will impose broad climate-related disclosure obligations on companies doing business in California.

In addition, the SEC has adopted final rulemaking on climate change disclosures that could increase compliance burdens and associated regulatory costs and complexity.

We also may face potential governmental enforcement actions or private litigation challenging our ESG and sustainability goals, or our disclosure of those goals and our metrics for measuring achievement of them, which may increase our costs of compliance, damage our reputation, or cause investors or consumers to lose confidence in us.

In addition, complying with ESG-related rules and regulations, including collecting, measuring and reporting related data, can be costly, difficult and time consuming.

Significant expenditures and commitment of time by management, employees and outside advisors may be involved in developing, implementing and overseeing policies, practices and internal controls related to ESG risk and performance, and we may undertake additional costs to meet our reporting and compliance obligations related to ESG matters.

We also may face stakeholder scrutiny, potential governmental enforcement actions or private litigation regarding our ESG initiatives and sustainability goals, or our disclosure of those goals and our metrics for measuring achievement of them, which may increase our costs of compliance, damage our reputation, or cause investors or consumers to lose confidence in us.

Extreme and/or unseasonable weather conditions caused by climate change or otherwise, or natural disasters, could have a significant adverse effect on our business.

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In addition, because higher net sales historically have occurred during the second half of the year, unseasonably warm weather during these months could have a disproportionately large effect on our business and materially adversely affect our financial condition and results of operations.

Public health crises, epidemics or pandemics, such as the COVID-19 pandemic have had, and could in the future have, a negative impact on the Company’s business and operations.

Public health crises, epidemics or pandemics have had, and could in the future have, a negative impact on the Company’s business and operations.

Public health crises, epidemics or pandemics have had, and could in the future have, a negative impact on our business and operations, including Company sales and cash flow.

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Establishing the “treasure hunt” nature of the off-price buying experience to drive traffic to our stores requires us to offer changing assortments of merchandise in our stores.

While opportunistic purchasing provides our buyers the ability to buy at desirable times and prices, in the

quantities we need and into market trends, it places considerable discretion with our buyers, which subjects us to risks related to the pricing, quantity, nature and timing of inventory flowing to our stores.

While opportunistic purchasing provides our buyers the ability to buy at desirable times and prices, in the quantities we need and into market trends, it places considerable discretion with our buyers, which subjects us to risks related to the pricing, quantity, nature and timing of inventory flowing to our stores.

If we are unable to provide frequent replenishment of fresh, high quality, attractively priced merchandise in our stores, it could adversely affect traffic to our stores as well as our sales and margins.

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Similar to other retailers, we face challenges in securing and retaining sufficient talent in management and other key areas for many reasons, including competition in the retail industry generally and for talent in various geographic markets.

If we do not continue to attract qualified individuals, train them in our business model, support their development and retain them, our performance could be adversely affected or our growth could be limited.

If we do not continue to attract qualified individuals, train

them in our business model, support their development and retain them, our performance could be adversely affected or our growth could be limited.

We are also dependent upon temporary personnel to adequately staff our distribution facilities, with heightened dependence during busy periods such as the holiday season.

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If any of the third parties with which we do business become subject to bankruptcy, receivership or similar insolvency proceedings, our rights and benefits in relation to our contracts, transactions and business relationships with such third parties could be terminated, modified in a manner adverse to us, or otherwise impaired.

We cannot make any assurances that we would be able to arrange for alternate or replacement contracts, transactions or business relationships on terms as favorable as our existing contracts,

transactions or business relationships, if at all.

We cannot make any assurances that we would be able to arrange for alternate or replacement contracts, transactions or business relationships on terms as favorable as our existing contracts, transactions or business relationships, if at all.

Any inability on our part to do so could negatively affect our cash flows, financial condition and results of operations.

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• fluctuation in our vendors’ local currency against the dollar, which may increase our cost of goods sold;

• changes in import duties, taxes, charges, quotas, loss of “most favored nation” trading status with the United States for a particular foreign country and trade restrictions (including the United States imposing antidumping or countervailing duty orders, safeguards, remedies or compensation and retaliation due to illegal foreign trade practices).

• changes in import duties, tariffs, taxes, charges, quotas, loss of “most favored nation” trading status with the United States for a particular foreign country and trade restrictions (including the United States imposing antidumping or countervailing duty orders, safeguards, remedies or compensation and retaliation due to illegal foreign trade practices).

Any of the foregoing factors, or a combination thereof, could have a material adverse effect on our business.

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A disruption within our distribution network, including the shutdown of or loss of significant capacity by one or more of our current primary distribution centers could adversely affect our ability to deliver inventory in a timely manner and significantly disrupt our business.

any failure to continue to add capacity to our existing distribution centers and build out planned additional distribution centers timely and cost effectively could adversely affect our business.

In addition, any failure to continue to add capacity to our existing distribution centers and build out planned additional distribution centers timely and cost effectively could adversely affect our business.

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In addition, some aspects of our business, like that of most retailers, involve the receipt, storage and transmission of customers’ personal information and consumer preferences, as well as confidential information about our employees, our vendors and our Company, some of which is entrusted to third-party service providers and vendors.

We are dependent on the integrity, security and consistent operations of these systems and related back-up systems, software, tools (including encryption technology) and monitoring to provide security and oversight for processing, transmission, storage and the protection of such confidential information.

Like most major corporations, we, our customers and our third-party services providers face an evolving, increasing threat landscape in which cybercriminals, among others, employ a complex array of techniques designed to access personal and other information, including, for example, the use of fraudulent or stolen access credentials, malware, ransomware, phishing, denial of service and other types of attacks.

security and oversight for processing, transmission, storage and the protection of confidential information, and to recover from unexpected outages.

Like most major corporations, we, our customers and our third-party services providers face an evolving, increasing threat landscape in which cybercriminals, among others, employ a complex array of techniques designed to disrupt operations and/or access personal and other sensitive information, including, for example, the use of fraudulent or stolen access credentials, malware, ransomware, phishing, denial of service and other types of attacks.

Hardware, software or applications we develop or obtain from third parties may contain defects in design or manufacture or other problems that are not presently known and could unexpectedly compromise information security.

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and design or usage errors by our employees or contractors.

Moreover, the rapid evolution and increased adoption of artificial intelligence technologies may intensify our cybersecurity risks.

If we or third parties with which we do business were to fall victim to successful cyber-attacks or experience other material cybersecurity incidents, including the loss of individually identifiable customer or other sensitive data, we may incur substantial costs and suffer other negative consequences, which may include:

Moreover, the rapid evolution and increased adoption of artificial intelligence, Software as a Service (SaaS) and cloud technologies may intensify our cybersecurity risks.

If we or third parties with which we do business were to fall victim to successful cyber-attacks or experience other material cybersecurity incidents, including the loss of individually identifiable customer or other confidential data or the inability to provide contracted services, we may incur substantial costs and suffer other negative consequences, which may include:

• remediation costs, such as liability for stolen assets or information, repairs of system damage or replacement of systems, and incentives to customers or business partners in an effort to maintain relationships after an attack;

• increased cybersecurity protection costs, which may include the cost of continuing to make organizational changes, deploy additional personnel and protection technologies, train employees, and engage third party consultants;

• lost revenues resulting from the unauthorized use of proprietary information or the failure to retain or attract customers following an attack;

• lost revenues resulting from operational disruption or the unauthorized use of proprietary information or the failure to retain or attract customers following an attack;

• litigation and legal risks, including regulatory actions by state and federal governmental authorities;

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• damage to our competitiveness, stock price, and long-term stockholder value.

We employ various security measures and technologies to actively monitor, prevent and mitigate cyber-attacks.

Despite advances in security hardware, software, and encryption technologies, the methods and tools used to obtain unauthorized access, disable or degrade service, or sabotage systems are constantly changing and evolving, and may be difficult to anticipate or detect, and there is no guarantee that the proactive measures we put in place will be adequate to safeguard against all data security breaches or misuses of data.

As many of our non-store associates continue to work remotely, we face an increased risk due to the potential interruptions to internal or external information technology infrastructure as well as ongoing threats and attempts to breach our security networks.

The Company carries information security risk insurance that is designed to mitigate against certain potential losses

arising from a cybersecurity incident.

We employ various security measures and technologies to actively monitor, prevent, mitigate, and recover from cyber-attacks.

Despite advances in security hardware, and software, the methods and tools used to obtain unauthorized access, disable or degrade service, or sabotage systems are constantly changing and evolving, and may be difficult to anticipate or detect, and there is no guarantee that the proactive measures we put in place will be adequate to safeguard against all data security breaches or misuses of data.

As many of our non-store associates continue to work in a hybrid model, we face an increased risk due to the potential interruptions to internal or external information technology infrastructure as well as ongoing threats and attempts to breach our security networks.

The Company carries information security risk insurance that is designed to mitigate against certain potential losses arising from a cybersecurity incident.

However, there is no guarantee that this insurance coverage will be sufficient to cover all possible claims and we could suffer losses that could have a material adverse effect on our business.

Although we endeavor to protect consumer identity and payment information through the implementation and modification of security technologies, processes and procedures, including training programs for employees to raise awareness about phishing, malware and other cyber risks, we could experience increased costs associated with maintaining these protections as threats of cyber-attacks increase in sophistication and complexity.

Although we endeavor to maintain reliable operations and protect consumer identity and payment information through the development of security talent and the implementation of technologies, processes and procedures, including training programs for employees to raise awareness about phishing, malware and other cyber risks, we could experience increased costs associated with maintaining these protections as threats of cyber-attacks increase in sophistication and complexity.

In addition, there are inherent risks associated with modifying or replacing systems, and with new or changed relationships, including accurately capturing and maintaining data, realizing the expected benefit of the change and managing the potential disruption of the operation of the systems as the changes are implemented.

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We accept payments using a variety of methods, including cash, checks, credit and debit cards, and gift cards, and we may offer new payment options over time.

Acceptance of these payment methods subjects us to rules, regulations, contractual obligations and compliance requirements, including payment network rules and operating guidelines, data security standards and certification requirements, and rules governing electronic funds transfers.

requirements, and rules governing electronic funds transfers.

These requirements may change over time or be reinterpreted, making compliance more difficult or costly.

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We are subject to federal, state and local laws, rules and regulations in the operation of our business.

In addition to complying with current laws, rules and regulations, we must also comply with new and changing laws and regulations, new regulatory initiatives, evolving interpretation of existing laws by judicial and regulatory authorities, and reforms in jurisdictions where we do business.

In addition to complying with current laws, rules and regulations, we must also comply with new and changing laws and regulations, executive orders and other directives, new regulatory initiatives, evolving interpretation of existing laws by judicial and regulatory authorities, and reforms in jurisdictions where we do business.

Complying with local zoning codes, real estate land use restrictions, employment-related laws, and other local laws across numerous jurisdictions is particularly challenging as we grow the number of our stores in new municipalities and need to stay abreast of changes in such local laws.

The increasing proliferation of local laws, some of which may be conflicting, further complicates our efforts to comply with all of the various laws, rules and regulations that apply to our business.

We could also be negatively impacted by changes in government regulations in areas including taxes, healthcare and environmental protection.

We could also be negatively impacted by changes in government regulations, initiatives or programs in areas including taxes, healthcare, immigration and environmental protection.

All of the above legal, regulatory and administrative requirements may, individually or collectively, affect multiple aspects of our business, including those involving labor and employment benefits;

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We rely on our vendors to provide quality merchandise that complies with applicable product safety laws and other applicable laws, but they may not comply with their obligations to do so.

Although our arrangements with our vendors frequently provide for

indemnification for product liabilities, the vendors may fail to honor those obligations to an extent we consider sufficient or at all.

Although our arrangements with our vendors frequently provide for indemnification for product liabilities, the vendors may fail to honor those obligations to an extent we consider sufficient or at all.

Issues with the safety of merchandise, and issues with the authenticity of merchandise, or customer concerns about such issues, regardless of our fault, could cause damage to our reputation and could result in lost sales, uninsured product liability claims or losses, merchandise recalls and increased costs, and regulatory, civil or criminal fines or penalties, any of which could have a material adverse effect on our financial results.

An unfavorable, uncertain or volatile economic environment, as we have experienced recently as a result of inflation, rising interest rates and supply chain disruptions, among other things, has and may continue to cause an increase in inventory shrinkage.

An unfavorable, uncertain or volatile economic environment, as we have experienced recently as a result of inflation, fluctuating interest rates and supply chain disruptions, among other things, has and may continue to cause an increase in inventory shrinkage.

Risk of loss or theft of assets, including inventory shrinkage, is inherent in the retail business, and we experienced increased shrinkage, as well as increased loss prevention costs, in recent years.

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Our ability to generate sufficient cash depends on numerous factors beyond our control, and we may be unable to generate sufficient cash flow to service our debt obligations.

As of February 3, 2024, our obligations include (i) $933.4 million, inclusive of original issue discount, under our $1,200.0 million senior secured term loan facility (Term Loan Facility) and (ii) $156.2 million under our 2.25% Convertible Notes due April 15, 2025 and $297.1 million under our 1.25% Convertible Notes due December 15, 2027 (collectively, our “Convertible Notes”).

As of February 1, 2025, our obligations include (i) $1,238.9 million, inclusive of original issue discount, under our senior secured term loan facility (Term Loan Facility) and (ii) $156.2 million under our 2.25% Convertible Notes due April 15, 2025 (our “2025 Convertible Notes”) and $297.1 million under our 1.25% Convertible Notes due December 15, 2027 (our “2027 Convertible Notes” and, together with our 2025 Convertible Notes, our “Convertible Notes”).

We had no outstanding balance on our $900.0 million asset-based lending facility (ABL Line of Credit) as of February 3, 2024.

Our debt obligations also include $25.0 million of finance lease obligations as of February 1, 2025.

Estimated cash required to make interest payments for these debt obligations, net of the impact of our interest rate swap, amounts to approximately $63.1 million in the aggregate for the fiscal year ending February 1, 2025.

Estimated cash required to make interest payments for these debt obligations, net of the impact of our interest rate swap, amounts to approximately $70.1 million in the aggregate for the fiscal year ending January 31, 2026.

Our ability to make payments on and to refinance our debt, and to fund planned capital expenditures, will depend on our ability to generate cash in the future, which is to some extent subject to general economic, financial, competitive, legislative, regulatory and other factors that are beyond our control.

If we are unable to generate sufficient cash flow to service our debt and meet our other commitments, we will be required to adopt one or more alternatives, such as refinancing all or a portion of our debt, selling material assets or operations or raising additional debt or equity capital.

assets or operations or raising additional debt or equity capital.

We may not be able to successfully carry out any of these actions on a timely basis, on commercially reasonable terms or at all, or be assured that these actions would be sufficient to meet our capital requirements.

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The conditional conversion feature of the 2027 Convertible Notes, if triggered, may adversely affect our financial condition and operating results.

In the event the conditional conversion feature of our Convertible Notes is triggered, holders of the Convertible Notes will be entitled to convert their notes at any time during specified periods at their option.

In the event the conditional conversion feature of our 2027 Convertible Notes is triggered, holders of our 2027 Convertible Notes will be entitled to convert their notes at any time during specified periods at their option.

If one or more holders elect to convert their 2027 Convertible Notes, we would be required to settle the principal portion of our conversion obligation in cash, which could adversely affect our liquidity.

In addition, even if holders of Convertible Notes do not elect to convert their notes, we could be required under applicable accounting rules to reclassify all or a portion of the outstanding principal of the Convertible Notes as a current rather than long-term liability, which would result in a material reduction of our net working capital.

In addition, even if holders of our 2027 Convertible Notes do not elect to convert their notes, we could be required under applicable accounting rules to reclassify all or a portion of the outstanding principal of the 2027 Convertible Notes as a current rather than long-term liability, which would result in a material reduction of our net working capital.

Our 2025 Convertible Notes are now convertible at any time until the close of business on the second scheduled trading day immediately preceding the maturity date of April 15, 2025.

Conversion of the Convertible Notes will dilute the ownership interest of existing stockholders, including holders who had previously converted their Convertible Notes, or may otherwise depress the price of our common stock.

The conversion of some or all of the Convertible Notes will dilute the ownership interests of existing stockholders, as we will deliver shares of our common stock with respect to any excess over principal upon conversion of any of the Convertible Notes.

The Convertible Notes may from time to time in the future be convertible at the option of their holders prior to their scheduled terms under certain circumstances.

Our Convertible Notes may from time to time in the future be convertible at the option of their holders prior to their scheduled terms under certain circumstances and our 2025 Convertible Notes are now convertible at any time until the close of business on the second scheduled trading day immediately preceding the maturity date of April 15, 2025.

Any sales in the public market of the common stock issuable upon such conversion could adversely affect prevailing market prices of our common stock.

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As a result, we are largely dependent upon cash dividends and distributions and other transfers from our subsidiaries to meet our obligations.

The deterioration of income from,

or other available assets of, our subsidiaries for any reason could limit or impair their ability to pay dividends or other distributions to us.

The deterioration of income from, or other available assets of, our subsidiaries for any reason could limit or impair their ability to pay dividends or other distributions to us.

Risks Related to Ownership of Our Common Stock

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Future announcements or disclosures concerning us or any of our competitors, our strategic initiatives, our sales and profitability, our financial condition, any quarterly variations in actual or anticipated operating results or comparable sales, any failure to meet analysts’ expectations and sales of large blocks of our common stock, among other factors, could cause the market price of our common stock to fluctuate substantially.

In addition, the stock market has experienced price and volume fluctuations that have affected the market price of many retail and other stocks that have often been unrelated or disproportionate to the operating performance of these companies.

addition, the stock market has experienced price and volume fluctuations that have affected the market price of many retail and other stocks that have often been unrelated or disproportionate to the operating performance of these companies.

Anti-takeover provisions in our charter documents and Delaware law might discourage or delay acquisition attempts for us that stockholders might consider favorable.

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• establish advance notice requirements for nominations for elections to our Board of Directors or for proposing matters that can be acted upon by stockholders at stockholder meetings;

• limit the ability of stockholders to remove directors only for cause and only upon the affirmative vote of at least 75% of the outstanding shares of our common stock;

• establish a classified Board of Directors, as a result of which our Board of Directors is divided into three classes, with each class serving for staggered three-year terms, which will be phased out by the time of the 2027 Annual Meeting of Stockholders, in accordance with an amendment to our Certificate of Incorporation, approved by our stockholders in 2024, to declassify the Board in phases and provide for the annual election of the entire Board for one-year terms;

• until the 2027 Annual Meeting of Stockholders, limit the ability of stockholders to remove directors only for cause and only upon the affirmative vote of at least 75% of the voting power of all outstanding shares of capital stock entitled to vote generally in the election of directors, voting together as a single class;

beginning with the 2027 Annual Meeting of Stockholders, when the Board will no longer be classified, directors may be removed with or without cause as required by Delaware law;

• prohibit stockholders from calling special meetings of stockholders;

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business