What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2026-09-10 compared with 2026-06-09 · 178 added, 107 removed, 197 unchanged (59% of the section changed)

2 unchanged sentences

We are a global footwear company that operates retail stores and e-commerce websites, and designs, develops, sources, manufactures and distributes footwear for people of all ages.

Our mission is to inspire people to feel great...feet first.

We offer retailers and consumers a diversified portfolio of leading footwear brands.

7 unchanged sentences

Macroeconomic Environment

Macroeconomic conditions continued to weigh on consumer discretionary spending and our financial results during the first quarter of 2026.

Macroeconomic conditions continued to weigh on consumer discretionary spending and our financial results during the second quarter of 2026.

Consumers remain impacted by elevated interest rates, persistent inflation, and expectations of future price increases, which have increased pressure on discretionary spending.

9 unchanged sentences

Customs and Border Protection Agency (“CBP”) to suspend collection of the invalidated tariffs and to establish a process to refund IEEPA tariffs previously collected.

While the timing remains uncertain, we currently estimate that we are eligible to receive approximately $57.9 million in refunds related to the invalidated tariffs.

Beginning in April 2026, we began filing refund claims with CBP related to eligible tariff payments made.

There can be no guarantee that a refund will equal the full amount of IEEPA tariffs paid, and any refund may be subject to further legal and regulatory developments that could delay, reduce, or eliminate any refund.

As a result of this uncertainty, as of May 2, 2026, we have not recorded a receivable related to the potential recovery of IEEPA tariffs paid.

Beginning on May 11, 2026, the Company has received cash of $16.8 million for a portion of its refunds claims, with applicable interest.

During the thirteen and twenty-six weeks ended August 1, 2026, we collected $57.4 million of tariff refunds and related interest.

The Company has received substantially all of the tariff refunds.

Additionally, following the Supreme Court’s ruling invalidating the IEEPA tariffs, the U.S.

imposed a temporary 10% general tariff under Section 122 of the Trade Act of 1974 and initiated additional trade actions, including investigations under Section 301 of the Trade Act of 1974, that may result in further tariffs..

imposed a temporary 10% general tariff under Section 122 of the Trade Act of 1974 and initiated additional trade actions, including the imposition of tariffs under Sections 301of the Trade Act of 1974, as well as other statutory authorities that may be used to impose tariffs or other import restrictions.

On July 24, 2026, new tariff rates were imposed under Section 301 of the Trade Act of 1974.

In addition, the U.S.

Trade Representative has indicated that additional Section 301 tariffs may be implemented in the coming months following investigations covering a broad range of countries, including major sourcing markets.

There remains substantial uncertainty regarding the potential changes or pauses to existing and newly announced tariffs, tariff levels, and whether additional tariffs or other reciprocal actions may be imposed, modified, or suspended.

2 unchanged sentences

trade policies may be reinstituted, paused, removed, or changed at any time, and to the extent we are unable to successfully mitigate any negative resulting impacts, it could adversely affect our business, financial condition, and results of operation.

Our liquidity position remains strong, with $37.7 million in cash and cash equivalents and excess availability on our revolving credit agreement of $191.5 million as of May 2, 2026.

During the first quarter of 2026, borrowings on our revolving credit agreement increased to $347.5 million, primarily driven by borrowings to fund the acquisition of Stuart Weitzman in the third quarter of 2025.

Refer to Note 3 to the condensed consolidated financial statements for further discussion of the acquisition.

Our liquidity position remains strong, with $50.9 million in cash and cash equivalents and excess availability on our revolving credit agreement of $357.3 million as of August 1, 2026.

During the second quarter of 2026, borrowings on our revolving credit agreement decreased to $288.0 million, primarily driven by repayments under our revolving credit agreement resulting from cash receipts from tariff refunds.

Financial Highlights

Highlights of our consolidated and segment results for the first quarter of 2026 and 2025 are as follows:

Highlights of our consolidated and segment results for the second quarter of 2026 and 2025 are as follows:

Thirteen Weeks Ended

($ millions, except per share amounts)

August 1, 2026

August 2, 2025

Consolidated net sales

31 unchanged sentences

Thirteen Weeks Ended

Twenty-Six Weeks Ended

August 1, 2026

August 2, 2025

August 1, 2026

August 2, 2025

Cost of goods sold

5 unchanged sentences

Earnings before income taxes

Income tax provision

Net loss attributable to noncontrolling interests

Income tax (provision) benefit

Net earnings (loss) attributable to noncontrolling interests

Net earnings attributable to Caleres, Inc.

Net sales increased $52.4 million, or 8.5%, to $666.6 million for the first quarter of 2026, compared to $614.2 million for the first quarter of 2025.

Net sales of our Brand Portfolio segment increased $60.9 million, or 20.6%, reflecting the impact of our Stuart Weitzman acquisition on August 4, 2025, which contributed net sales of $43.9 million, and organic growth in our owned e-commerce and wholesale businesses.

We saw strength in premium brands and growth in most of our more value-oriented brands.

Net sales increased $37.0 million, or 5.6%, to $695.5 million for the second quarter of 2026, compared to $658.5 million for the second quarter of 2025.

Net sales of our Brand Portfolio segment increased $65.0 million, or 23.6%.

Stuart Weitzman, acquired on August 4, 2025, contributed net sales of $42.5 million.

Brand Portfolio net sales were up 8.2% on an organic growth basis, reflecting increases in our wholesale and international businesses.

We saw broad strength in our fashion footwear brands and growth in most of our more value-oriented brands.

Net sales in our Famous Footwear segment decreased $25.2 million, or 6.3%, and comparable sales declined 5.9%, reflecting less traffic in our retail stores.

Our direct-to-consumer sales represented approximately 67% of consolidated net sales for the first quarter of 2026, compared to 70% for the first quarter of 2025.

Our direct-to-consumer sales represented approximately 71% of consolidated net sales for the second quarter of 2026, compared to 75% for the second quarter of 2025.

We remain focused on international growth, direct-to-consumer penetration, elevating the consumer experience at Famous Footwear and maximizing the vertical opportunity between the Famous Footwear and Brand Portfolio segments, with Dr.

Scholl’s, LifeStride, Naturalizer, Blowfish Malibu, and Ryka representing five of Famous Footwear’s top 20 best-selling footwear brands during the quarter.

Gross profit increased $36.8 million, or 13.2%, to $315.5 million for the first quarter of 2026, compared to $278.7 million for the first quarter of 2025.

As a percentage of net sales, gross profit increased to 47.3% for the first quarter of 2026, compared to 45.4% for the first quarter of 2025, primarily reflecting lower ongoing tariffs, the continuation of our tariff mitigation efforts, lower markdowns, and favorable product mix.

Scholl’s, LifeStride, Naturalizer, and Blowfish Malibu representing four of Famous Footwear’s top 20 best-selling footwear brands during the quarter.

Net sales increased $89.4 million, or 7.0%, to $1,362.1 million for the six months ended August 1, 2026, compared to $1,272.7 million for the six months ended August 2, 2025.

Net sales of our Brand Portfolio segment increased $125.9 million, or 22.0%.

Stuart Weitzman contributed net sales of $86.4 million.

Brand Portfolio net sales were up 6.9% on an organic growth basis.

Net sales in our Famous Footwear segment decreased $33.6 million, or 4.6%, and comparable sales declined 4.3%, reflecting less traffic in our retail stores.

Our direct-to-consumer sales represented approximately 69% of consolidated net sales for the six months ended August 1, 2026, compared to 73% for the six months ended August 2, 2025.

Gross profit increased $95.2 million, or 33.3%, to $381.0 million for the second quarter of 2026, compared to $285.8 million for the second quarter of 2025.

As a percentage of net sales, gross profit increased to 54.8% for the second quarter of 2026, compared to 43.4% for the second quarter of 2025.

The increase primarily reflects $55.6 million of tariff refunds received in the second quarter of 2026.

The remaining increase is driven by lower ongoing tariffs and the continuation of our tariff mitigation efforts as well as favorable channel mix with more retail sales, which have a higher margin than wholesale, as a result of the Stuart Weitzman acquisition.

This was offset by clearance-related activity.

Gross profit increased $131.9 million, or 23.4%, to $696.4 million for the six months ended August 1, 2026, compared to $564.5 million for the six months ended August 2, 2025.

As a percentage of net sales, gross profit increased to 51.1% for the six months ended August 1, 2026, compared to 44.4% for the six months ended August 2, 2025.

The increase primarily reflects $55.6 million of tariff refunds received in the second quarter of 2026.

The remaining increase is driven by the same factors described above.

We classify certain warehousing, distribution, sourcing and other inventory procurement costs in selling and administrative expenses.

1 unchanged sentence

Selling and Administrative Expenses

Selling and administrative expenses increased $27.2 million, or 10.2%, to $293.7 million for the first quarter of 2026, compared to $266.5 million for the first quarter of 2025.

Selling and administrative expenses increased $33.7 million, or 12.5%, to $303.4 million for the second quarter of 2026, compared to $269.7 million for the second quarter of 2025.

The increase was driven by expenses associated with our acquired Stuart Weitzman brand, as well as higher expenses associated with our incentive compensation programs.

As a percentage of net sales, selling and administrative expenses increased to 44.1% for the first quarter of 2026, from 43.4% for the first quarter of 2025.

As a percentage of net sales, selling and administrative expenses increased to 43.6% for the second quarter of 2026, from 40.9% for the second quarter of 2025.

Selling and administrative expenses increased $60.9 million, or 11.4%, to $597.1 million for the six months ended August 1, 2026, compared to $536.2 million for the six months ended August 2, 2025.

The increase was driven by the same factors described above.

As a percentage of net sales, selling and administrative expenses increased to 43.8% for the six months ended August 1, 2026, from 42.1% for the six months ended August 2, 2025.

Restructuring and Other Special Charges, Net

Restructuring and other special charges, net resulted in income of $2.1 million for the first quarter of 2026, driven by a gain on the sale of one of the remaining parcels comprising the corporate headquarters and offset by Stuart Weitzman acquisition and integration costs.

Restructuring and other special charges, net resulted in income of $2.1 million for the six months ended August 1, 2026, driven by a gain on the sale of one of the remaining parcels comprising the corporate headquarters and offset by Stuart Weitzman acquisition and integration costs.

Refer to Note 6 to the condensed consolidated financial statements for additional information related to these charges.

We incurred restructuring costs of $0.6 million for the first quarter of 2025, primarily for legal and other related costs associated with the acquisition of Stuart Weitzman.

We incurred restructuring costs of $7.4 million for the six months ended August 2, 2025, primarily for legal and other related costs associated with the acquisition of Stuart Weitzman and other related costs associated with our expense reduction initiatives.

Operating Earnings

Operating earnings increased $12.3 million to $23.9 million for the first quarter of 2026, compared to $11.6 million for the first quarter of 2025, reflecting the factors described above.

As a percentage of net sales, operating earnings were 3.6% for the first quarter of 2026, compared to 1.9% for the first quarter of 2025.

Operating earnings increased $68.3 million to $77.6 million for the second quarter of 2026, compared to $9.3 million for the second quarter of 2025, reflecting the factors described above.

As a percentage of net sales, operating earnings were 11.2% for the second quarter of 2026, compared to 1.4% for the second quarter of 2025.

Operating earnings increased $80.6 million to $101.5 million for the six months ended August 1, 2026, compared to $20.9 million for the six months ended August 2, 2025, reflecting the factors described above.

As a percentage of net sales, operating earnings were 7.5% for the six months ended August 1, 2026, compared to 1.7% for the six months ended August 2, 2025.

Interest Expense, Net

Interest expense, net increased $0.9 million, or 23.7%, to $4.7 million for the first quarter of 2026, compared to $3.8 million for the first quarter of 2025, reflecting higher average borrowings on our revolving credit facility.

As discussed above, we used the revolving credit facility to fund the acquisition of Stuart Weitzman that closed on August 4, 2025.

Interest expense, net decreased $0.1 million, or 2.5%, to $4.4 million for the second quarter of 2026, compared to $4.5 million for the second quarter of 2025, reflecting lower average borrowings on our revolving credit facility.

Interest expense, net increased $0.8 million, or 9.3%, to $9.1 million for the six months ended August 1, 2026, compared to $8.3 million for the six months ended August 2, 2025, reflecting higher average borrowings on our revolving credit facility.

Other Income, Net

Other income, net increased $0.5 million to $1.2 million for the first quarter of 2026, compared to $0.7 million for the first quarter of 2025, primarily reflecting higher income generated from our pension plan assets in the first quarter of 2026.

Other income, net increased $3.5 million to $4.5 million for the second quarter of 2026, compared to $1.0 million for the second quarter of 2025, and increased $4.0 million, to $5.7 million for the six months ended August 1, 2026, compared to $1.7 million for the six months ended August 2, 2025, primarily reflecting $1.8 million of interest received from tariff refunds, as well as higher income generated from our pension plan assets in the second quarter and six months ended August 1, 2026.

Refer to Note 14 of the condensed consolidated financial statements for further information.

1 unchanged sentence

Our effective tax rate can vary considerably from period to period, depending on a number of factors.

Our consolidated effective tax rates were 32.4% and 29.8% for the thirteen weeks ended May 2, 2026 and May 3, 2025, respectively.

The higher effective tax rate was driven by discrete tax provisions related to share-based compensation of $1.2 million and $0.3 million for the thirteen weeks ended May 2, 2026 and May 3, 2025, respectively.

Our consolidated effective tax rates were a provision of 23.6% and a benefit of 22.0% for the second quarter of 2026 and 2025, respectively.

Our consolidated effective tax rates were provisions of 25.4% and 8.8% for the six months ended August 1, 2026 and August 2, 2025, respectively.

The higher effective tax rate for the quarter was driven by the pre-tax income and tax provision associated with tariff refunds received during the second quarter of 2026 contrasted with a discrete tax benefit of $2.5 million associated with foreign earnings transition tax resolution during the second quarter of 2025.

Discrete tax provisions related to share-based compensation of $1.5 million and $0.4 million were also recorded for the six months ended August 1, 2026 and August 2, 2025, respectively.

In 2021, the Organization for Economic Cooperation and Development (OECD) released Pillar Two Global Anti-Base Erosion model rules, designed to ensure large corporations are taxed at a minimum rate of 15% in all countries of operation.

2 unchanged sentences

multinational regime would be considered a side-by-side regime that should prevent U.S.

companies from double taxation.

companies from double taxation, although the arrangement is still being reviewed and adopted by other countries who have enacted Pillar Two legislation.

We are continuing to evaluate the Pillar Two rules and their potential impact on future periods, but we do not expect the rules to have a material impact on our tax provision or effective tax rate.

1 unchanged sentence

Net earnings attributable to Caleres, Inc.

were $14.3 million for the first quarter of 2026 compared to $6.9 million for the first quarter of 2025, as a result of the factors described above.

was $58.6 million and $72.9 million for the second quarter and six months ended August 1, 2026, respectively, compared to $6.7 million and $13.7 million for the second quarter and six months ended August 2, 2025, respectively, as a result of the factors described above.

FAMOUS FOOTWEAR

Thirteen Weeks Ended

Twenty-Six Weeks Ended

August 1, 2026

August 2, 2025

August 1, 2026

August 2, 2025

($ millions, except sales per square foot)

2 unchanged sentences

Restructuring and other special charges, net

Operating (loss) earnings

Operating earnings

Comparable sales % change

2 unchanged sentences

Impact of changes in Canadian exchange rate on sales

Sales per square foot, excluding e-commerce (thirteen weeks ended)

Sales per square foot, excluding e-commerce (thirteen and twenty-six weeks ended)

Sales per square foot, excluding e-commerce (trailing twelve months)

3 unchanged sentences

Ending stores

Net sales of $319.3 million in the first quarter of 2026 decreased $8.4 million, or 2.5%, compared to the first quarter of 2025.

Comparable sales decreased 2.3% for the first quarter of 2026 driven by a decline in consumer traffic in our retail stores.

We experienced strong growth in e-commerce sales and an increase in e-commerce penetration to 16% of net sales in the first quarter of 2026, from 14% in the first quarter of 2025.

Net sales of $374.4 million in the second quarter of 2026 decreased $25.2 million, or 6.3%, compared to the second quarter of 2025.

Comparable sales decreased 5.9% for the second quarter of 2026 driven by a decline in consumer traffic in our retail stores.

E-commerce sales were 14% of net sales in both the second quarter of 2026 and 2025.

Our kids category, which is a key differentiator for Famous Footwear, continued to outperform the total chain.

We opened one store and closed 10 stores during the first quarter of 2026, resulting in 812 stores and total square footage of 5.4 million at the end of the quarter, compared to 835 stores and total square footage of 5.5 million at the end of the first quarter of 2025.

Sales to members of our customer loyalty program, Famously You Rewards, continue to account for a majority of the segment’s sales with approximately 78% of our net sales made to program members in the first quarter of 2026, compared to 79% in the first quarter of 2025.

Gross profit decreased $8.4 million, or 5.7%, to $140.0 million for the first quarter of 2026, compared to $148.4 million for the first quarter of 2025.

As a percentage of net sales, our gross profit decreased to 43.8% for the first quarter of 2026, from 45.3% for the first quarter of 2025, reflecting higher levels of clearance-related promotional activity and inventory valuation adjustments.

We opened six stores and closed four stores during the second quarter of 2026, resulting in 814 stores and total square footage of 5.4 million at the end of the quarter, compared to 830 stores and total square footage of 5.5 million at the end of the second quarter of 2025.

Sales to members of our customer loyalty program, Famously You Rewards, continue to account for a majority of the segment’s sales with approximately 77% of our net sales made to program members in the second quarter of 2026, consistent with the second quarter of 2025.

Net sales of $693.7 million in the six months ended August 1, 2026 decreased $33.6 million, or 4.6%, compared to the six months ended August 2, 2025.

Comparable sales decreased 4.3% for the six months ended August 1, 2026 driven by a decline in consumer traffic in our retail stores.

During the first half of 2026, we opened seven stores and closed 14 stores.

Gross profit decreased $14.9 million, or 8.5%, to $159.8 million for the second quarter of 2026, compared to $174.7 million for the second quarter of 2025.

As a percentage of net sales, our gross profit decreased to 42.7% for the second quarter of 2026, from 43.7% for the second quarter of 2025, reflecting higher levels of clearance-related activity.

Gross profit decreased $23.3 million, or 7.2%, to $299.8 million for the six months ended August 1, 2026, compared to $323.1 million for the six months ended August 2, 2025.

As a percentage of net sales, our gross profit decreased to 43.2% for the six months ended August 1, 2026, from 44.4% for the six months ended August 2, 2025, reflecting higher levels of clearance-related activity.

Selling and Administrative Expenses

Selling and administrative expenses decreased $3.0 million, or 2.1%, to $140.4 million for the first quarter of 2026, compared to $143.4 million for the first quarter of 2025.

The decrease was primarily driven by lower warehouse and distribution costs and timing of marketing spend.

During the first quarter of 2026, we converted two stores to the FLAIR concept, ending the quarter with a total of 59 FLAIR stores.

These stores continue to outperform our traditionally designed retail stores.

As a percentage of net sales, selling and administrative expenses increased to 44.0% for the first quarter of 2026, compared to 43.8% for the first quarter of 2025.

Operating (Loss) Earnings

Operating (loss) earnings decreased $5.4 million to operating loss of $0.4 million for the first quarter of 2026, compared to operating earnings of $5.0 million for the first quarter of 2025, primarily reflecting the factors described above.

As a percentage of net sales, operating (loss) earnings declined to (0.1)% for the first quarter of 2026, compared to 1.5% for the first quarter of 2025.

Selling and administrative expenses decreased $1.4 million, or 0.9%, to $154.6 million for the second quarter of 2026, compared to $156.0 million for the second quarter of 2025.

The decrease was primarily driven by lower information technology costs and lower warehouse and distribution costs.

During the second quarter of 2026, we converted two stores to the FLAIR concept, ending the quarter with a total of 61 FLAIR stores.

As a percentage of net sales, selling and administrative expenses increased to 41.3% for the second quarter of 2026, compared to 39.1% for the second quarter of 2025.

Selling and administrative expenses decreased $4.4 million, or 1.5%, to $295.1 million for the six months ended August 1, 2026, compared to $299.5 million for the six months ended August 2, 2025.

The decrease was primarily driven by lower information technology spend and lower warehouse and distribution costs.

As a percentage of net sales, selling and administrative expenses increased to 42.5% for the six months ended August 1, 2026, compared to 41.2% for the six months ended August 2, 2025.

Operating Earnings

Operating earnings decreased $13.4 million to $5.2 million for the second quarter of 2026, compared to $18.6 million for the second quarter of 2025, primarily reflecting the factors described above.

As a percentage of net sales, operating earnings declined to 1.4% for the second quarter of 2026, compared to 4.6% for the second quarter of 2025.

Operating earnings decreased $18.8 million to $4.7 million for the six months ended August 1, 2026, compared to $23.5 million for the six months ended August 2, 2025, primarily reflecting the factors described above.

As a percentage of net sales, operating earnings declined to 0.7% for the six months ended August 1, 2026, compared to 3.2% for the six months ended August 2, 2025.

BRAND PORTFOLIO

Thirteen Weeks Ended

Twenty-Six Weeks Ended

August 1, 2026

August 2, 2025

August 1, 2026

August 2, 2025

Cost of goods sold

17 unchanged sentences

(1) Direct-to-consumer includes sales of our retail stores and e-commerce sites and sales through our customers’ websites that we fulfill on a drop-ship basis.

(2) Includes 23 North America and 48 East Asia retail stores acquired from Stuart Weitzman.

Net sales of $356.3 million in the first quarter of 2026 increased $60.9 million, or 20.6%, compared to the first quarter of 2025.

The increase primarily reflects the acquisition of Stuart Weitzman on August 4, 2025, which contributed net sales of $43.9 million in the first quarter of 2026.

We experienced strong growth in our company-owned e-commerce business, which increased approximately 21% during the first quarter of 2026, and growth in our wholesale business.

We saw strength in premium brands and declines in our more value-oriented brands.

Our direct-to-consumer sales represented approximately 36% of net sales for the first quarter of 2026, compared to 35% for the first quarter of 2026.

During the first quarter of 2026, we did not open or close any stores in North America, resulting in a total of 85 stores, compared to 61 stores in the first quarter of 2025.

We remain focused on international growth and continue to evaluate expansion of our international presence during the first quarter of 2026.

There were 99 stores in East Asia at May 2, 2026, compared to 54 stores at May 3, 2025.

There were also 152 international branded stores owned and operated by third parties through franchise agreements at May 2, 2026, compared to 116 international branded stores at May 3, 2025.

Our unfilled order position for our wholesale sales increased $82.9 million, or 31.4%, to $346.5 million at May 2, 2026, compared to $263.6 million at May 3, 2025 .

Gross profit increased $45.2 million, or 35.0%, to $174.5 million for the first quarter of 2026, compared to $129.3 million for the first quarter of 2025, driven by net sales growth.

As a percentage of net sales, our gross profit increased to 49.0% for the first quarter of 2026, compared to 43.8% for the first quarter of 2025.

The increase was driven by lower ongoing tariffs, the continuation of our tariff mitigation efforts, lower markdowns, and favorable product mix.

(2) Ending stores for the period ended August 1, 2026, include 21 North America and 41 East Asia Stuart Weitzman retail stores.

Net sales of $340.6 million in the second quarter of 2026 increased $65.0 million, or 23.6%, compared to the second quarter of 2025.

The increase primarily reflects the acquisition of Stuart Weitzman on August 4, 2025.

Stuart Weitzman contributed net sales of $42.5 million in the second quarter of 2026.

The remaining 8.2% increase in net sales was driven by strong organic growth in our wholesale and international businesses.

We saw broad strength in our fashion footwear brands and growth in our more value-oriented brands.

Our direct-to-consumer sales represented approximately 37% of net sales for the second quarter of 2026, compared to 36% for the second quarter of 2025.

During the second quarter of 2026, opened two stores and closed four stores in North America, resulting in a total of 83 stores, compared to 63 stores in the second quarter of 2025.

We remain focused on international growth and continue to evaluate expansion of our international presence during the second quarter of 2026.

There were 91 stores in East Asia at August 1, 2026, compared to 55 stores at August 2, 2025.

There were also 151 international branded stores owned and operated by third parties through franchise agreements at August 1, 2026, compared to 145 international branded stores at August 2, 2025.

Net sales increased $125.9 million, or 22.0%, to $696.9 million for the six months ended August 1, 2026, compared to $571.0 for the six months ended August 2, 2025.

The increase primarily reflects the acquisition of Stuart Weitzman on August 4, 2025, which contributed net sales of $86.4 million in the six months ended August 1, 2026.

The remaining 6.9% increase in net sales was driven by organic growth.

Our unfilled order position for our wholesale sales increased $96.5 million, or 39.5%, to $340.7 million at August 1, 2026, compared to $244.2 million at August 2, 2025.

Gross profit increased $111.7 million, or 101%, to $222.8 million for the second quarter of 2026, compared to $111.1 million for the second quarter of 2025.

As a percentage of net sales, our gross profit increased to 65.4% for the second quarter of 2026, compared to 40.3% for the second quarter of 2025.

The increase was driven primarily by $55.6 million of tariff recoveries received in the current period.

The remaining increase is driven by lower ongoing tariffs and the continuation of our tariff mitigation efforts, as well as favorable channel mix with more retail sales, which have a higher margin than wholesale, as a result of the Stuart Weitzman acquisition.

Gross profit increased $157.0 million, or 65.3%, to $397.3 million for the six months ended August 1, 2026, compared to $240.3 million for the six months ended August 2, 2025.

As a percentage of net sales, our gross profit increased to 57.0% for the six months ended August 1, 2026, compared to 42.1% for the six months ended August 2, 2025.

The increase was driven by the same factors described above.

Selling and Administrative Expenses

Selling and administrative expenses increased $23.1 million, or 20.6%, to $135.0 million for the first quarter of 2026, compared to $111.9 million for the first quarter of 2025 driven by expenses related to our acquired Stuart Weitzman brand and growth in our international

As a percentage of net sales, selling and administrative expenses was consistent with the prior comparable period, 37.9% for the first quarter of 2026, compared to 37.9% for the first quarter of 2025.

Selling and administrative expenses increased $28.9 million, or 28.2%, to $131.5 million for the second quarter of 2026, compared to $102.6 million for the second quarter of 2025 driven by expenses related to our acquired Stuart Weitzman brand and growth in our international business.

As a percentage of net sales, selling and administrative expenses increased to 38.6% for the second quarter of 2026, compared to 37.2% for the second quarter of 2025.

Selling and administrative expenses increased $52.1 million, or 24.2%, to $266.6 million for the six months ended August 1, 2026, compared to $214.5 million for the six months ended August 2, 2025 driven by expenses related to our acquired Stuart Weitzman brand and growth in our international business.

As a percentage of net sales, selling and administrative expenses increased to 38.3% for the six months ended August 1, 2026, compared to 37.6% for the six months ended August 2, 2025.

Restructuring and Other Special Charges, Net

Restructuring and other special charges of $0.4 million for the thirteen weeks ended May 2, 2026 were primarily associated Stuart Weitzman acquisition and integration costs.

There were no restructuring and other special charges during the second quarter of 2026.

Restructuring and other special charges of $0.4 million for the six months ended August 1, 2026 were primarily associated Stuart Weitzman acquisition and integration costs.

Refer to Note 6 to the condensed consolidated financial statements for additional information related to these charges.

There were no Restructuring and other special charges during the thirteen weeks ended May 3, 2025.

Restructuring and other special charges of $1.8 million for the three and six months ended August 2, 2025 were associated with expense reduction initiatives, primarily severance.

Operating Earnings

Operating earnings increased to $39.1 million for the first quarter of 2026, from $17.4 million for the first quarter of 2025, as a result of the factors described above.

As a percentage of net sales, operating earnings were 11.0% for the first quarter of 2026, compared to 5.9% for the first quarter of 2025.

Operating earnings increased to $91.2 million for the second quarter of 2026, from $6.7 million for the second quarter of 2025, as a result of the factors described above.

As a percentage of net sales, operating earnings were 26.8% for the second quarter of 2026, compared to 2.4% for the second quarter of 2025.

Operating earnings increased to $130.3 million for the six months ended August 1, 2026, compared to $24.0 million for the six months ended August 2, 2025, as a result of the factors described above.

As a percentage of net sales, operating earnings were 18.7% for the six months ended August 1, 2026, compared to 4.3% in the six months ended August 2, 2025.

ELIMINATIONS AND OTHER

Thirteen Weeks Ended

Twenty-Six Weeks Ended

August 1, 2026

August 2, 2025

August 1, 2026

August 2, 2025

Cost of goods sold

3 unchanged sentences

The Eliminations and Other category includes the elimination of intersegment sales and profit, unallocated corporate administrative expenses, and other costs and recoveries.

The net sales elimination of $9.0 million for the first quarter of 2026 is $0.1 million, or 1.1%, higher than the first quarter of 2025, reflecting a slight increase in product sold from our Brand Portfolio segment to Famous Footwear compared to the prior comparable period.

Selling and administrative expenses increased $7.2 million, to $18.3 million in the first quarter of 2026, compared to $11.1 million for the first quarter of 2025, primarily reflecting higher expenses related to our incentive compensation programs and employee benefits costs.

Restructuring and other special income of $2.6 million for the first quarter of 2026 was driven by a gain of $3.9 million for the sale of one of the remaining parcels comprising our corporate headquarters in Clayton, Missouri, partially offset by $1.3 million of technology, office relocation and other related costs associated with the acquisition of Stuart Weitzman.

Restructuring and other special charges of $0.6 million for the first quarter of 2025 were for legal and other related costs associated with the acquisition of Stuart Weitzman.

Refer to Note 6 to the condensed consolidated financial statements for additional information related to these charges.

The net sales elimination of $19.5 million for the second quarter of 2026 is $2.8 million, or 16.8%, higher than the second quarter of 2025, reflecting an increase in product sold from our Brand Portfolio segment to Famous Footwear compared to the prior comparable period.

The net sales elimination of $28.5 million for the six months ended August 1, 2026 is $3.0 million, or 11.8%, higher than the six months ended August 2, 2025, reflecting an increase in product sold from our Brand Portfolio segment to Famous Footwear compared to the prior comparable period.

Selling and administrative expenses increased $6.1 million, to $17.2 million in the second quarter of 2026, compared to $11.1 million for the second quarter of 2025.

Selling and administrative expenses increased $15.9 million, to $38.1 million in the six months ended August 1, 2026, compared to $22.2 million in the six months ended August 2, 2025.

The increase for both the quarter and six months primarily reflect higher expenses related to our incentive compensation programs.

Restructuring and other special charges, net consisted of $2.6 million of income for the six months ended August 1, 2026, driven by a gain of $3.9 million for the sale of one of the remaining parcels comprising our corporate headquarters in Clayton, Missouri, partially offset by $1.3 million of technology, office relocation and other related costs associated with the acquisition of Stuart Weitzman.

Restructuring and other special charges of $5.5 million for the six months ended August 2, 2025 were for legal and other related costs associated with the acquisition of Stuart Weitzman.

Refer to Note 6 to the condensed consolidated financial statements for additional information.

LIQUIDITY AND CAPITAL RESOURCES

2 unchanged sentences

Interest on the borrowings is at variable rates based on the SOFR, or the prime rate (as defined in the Credit Agreement), plus a spread.

Total debt obligations of $347.5 million at May 2, 2026 increased $89.0 million, from $258.5 million at May 3, 2025, and $51.0 million, from $296.5 million at January 31, 2026.

On August 4, 2025, we completed the acquisition of Stuart Weitzman, as further discussed in Note

3 to the condensed consolidated financial statements.

The increase in borrowings at May 2, 2026 primarily reflects borrowings to fund the acquisition, to fund business operations and inventory purchases.

Net interest expense for the first quarter of 2026 increased $0.9 million to $4.7 million, compared to $3.8 million for the first quarter of 2025, reflecting higher average borrowings on our revolving credit facility.

At May 2, 2026, we had $347.5 million in borrowings and $8.5 million in letters of credit outstanding under the Credit Agreement.

Total borrowing availability was $191.5 million at May 2, 2026.

We were in compliance with all covenants and restrictions under the Credit Agreement as of May 2, 2026.

Total debt obligations of $288.0 million at August 1, 2026 decreased $99.5 million, from $387.5 million at August 2, 2025, and $8.5 million, from $296.5 million at January 31, 2026.

On August 4, 2025, we completed the acquisition of Stuart Weitzman, as further discussed in Note 3 to the condensed consolidated financial statements.

The decrease in borrowings at August 1, 2026 primarily reflects repayments of borrowings at the end of the second quarter of 2025 to fund the acquisition.

Net interest expense for the second quarter of 2026 decreased $0.1 million to $4.4 million, compared to $4.5 million for the second quarter of 2025, reflecting lower average borrowings on our revolving credit facility.

At August 1, 2026, we had $288.0 million in borrowings and $7.6 million in letters of credit outstanding under the Credit Agreement.

Total borrowing availability was $357.3 million at August 1, 2026.

We were in compliance with all covenants and restrictions under the Credit Agreement as of August 1, 2026.

Working Capital and Cash Flow

Thirteen Weeks Ended

Net cash used for operating activities

Twenty-Six Weeks Ended

August 1, 2026

August 2, 2025

Net cash provided by operating activities

Net cash used for investing activities

Net cash provided by financing activities

Net cash (used for) provided by financing activities

Effect of exchange rate changes on cash and cash equivalents

1 unchanged sentence

Reasons for the major variances in cash provided in the table above are as follows:

Cash used for operating activities was $22.1 million higher in the thirteen weeks ended May 2, 2026 as compared to the thirteen weeks ended May 3, 2025, primarily reflecting the following factors, which includes cash used for Stuart Weitzman operating activities:

● A larger increase in accounts receivable during the thirteen weeks ended May 2, 2026, compared to the thirteen weeks ended May 3, 2025,

● A larger decrease in accrued expenses and other liabilities during the thirteen weeks ended May 2, 2026, compared to the thirteen weeks ended May 3, 2025, and

● A larger increase in prepaid expenses and other current assets during the thirteen weeks ended May 2, 2026, compared to the thirteen weeks ended May 3, 2025, partially offset by

● Higher net earnings in the thirteen weeks ended May 2, 2026, compared to the thirteen weeks ended May 3, 2025,

● A smaller decrease in trade accounts payable during the thirteen weeks ended May 2, 2026, compared to the thirteen weeks ended May 3, 2025, and

● A smaller decrease in inventories during the thirteen weeks ended May 2, 2026, compared to the thirteen weeks ended May 3, 2025

Cash used for investing activities was $12.5 million lower for the thirteen weeks ended May 2, 2026 as compared to the thirteen weeks ended May 3, 2025, reflecting lower capital expenditures, due in part to less Famous Footwear remodel spending.

We had 59 FLAIR stores as of May 2, 2026 and expect to add two more FLAIR stores during the second quarter of 2026.

The capital expenditures are offset by a $4.0 million of cash received for the sale of one of the remaining parcels comprising the Company’s corporate headquarters.

Cash provided by financing activities was $14.0 million higher for the thirteen weeks ended May 2, 2026 as compared to the thirteen weeks ended May 3, 2025, primarily due to net borrowings on our revolving credit agreement of $51.0 million in the thirteen weeks ended May 2, 2026, compared to net borrowings of $39.0 million in the comparable period in 2025.

The increase in borrowings during the thirteen weeks ended May 2, 2026 reflects the use of the revolving credit agreement to fund the Stuart Weitzman acquisition in Q3 2025 as well as to fund normal business operations, including inventory purchases.

The increase in borrowings is partially offset by lower purchases of $3.1 million of shares of our common stock under our share repurchase program in the thirteen weeks ended May 2, 2026, compared to $5.0 million of purchases in the comparable period in 2025.

Cash provided by operating activities was $14.1 million higher in the twenty-six weeks ended August 1, 2026 as compared to the twenty-six weeks ended August 2, 2025, primarily reflecting the following factors, including cash used for Stuart Weitzman operating activities:

● Net earnings of $73.2 million for the twenty-six weeks ended August 1, 2026, compared to $13.0 million for the twenty-six weeks ended August 2, 2025,

● A larger increase in trade accounts payable during the twenty-six weeks ended August 1, 2026, compared to the twenty-six weeks ended August 2, 2025, partially offset by,

● An increase in accounts receivable of $13.5 million during the twenty-six weeks ended August 1, 2026, compared to a decrease of $18.4 million during twenty-six weeks ended August 2, 2025,

● A decrease in accrued expenses and other liabilities during the twenty-six weeks ended August 1, 2026, compared to an increase during the twenty-six weeks ended August 2, 2025, and

● A larger increase in inventory during the twenty-six weeks ended August 1, 2026, compared to the twenty-six weeks ended August 2, 2025.

Cash used for investing activities was $17.2 million lower for the twenty-six weeks ended August 1, 2026 as compared to the twenty-six weeks ended August 2, 2025, reflecting lower capital expenditures, due in part to less Famous Footwear remodel spending.

We had 61 FLAIR stores as of August 1, 2026 and expect to add three to five more FLAIR stores during the second half of 2026.

The lower capital expenditures are offset by $4.0 million of cash received for the sale of one of the remaining parcels comprising the Company’s corporate headquarters.

Cash used for financing activities was $17.6 million for the twenty-six weeks ended August 1, 2026, as compared to cash provided by financing activities of $154.2 million for the twenty-six weeks ended August 2, 2025.

The primary driver of the change is due to net repayments on our revolving credit agreement of $8.5 million for the twenty-six weeks ended August 1, 2026, compared to net borrowings on our revolving credit agreement of $168.0 million for the twenty-six weeks ended August 2, 2025.

The decrease in borrowings at August 1, 2026 primarily reflects repayments of borrowings at the end of the second quarter of 2025.

A summary of key financial data and ratios at the dates indicated is as follows:

August 1, 2026

August 2, 2025

January 31, 2026

6 unchanged sentences

Total capitalization is defined as total debt and total equity .

Working capital at May 2, 2026 was $29.4 million, which was a decrease of $46.7 million from May 3, 2025 and a $12.2 million increase from January 31, 2026.

The decrease in working capital from May 3, 2025 primarily reflects higher borrowings under our revolving credit agreement and higher accrued expenses, partially offset by higher inventory, higher receivables and lower trade accounts payable.

Working capital at August 1, 2026 was $105.6 million, which was an increase of $21.3 million from August 2, 2025 and an increase of $88.1 million from January 31, 2026.

The increase in working capital from August 2, 2025 to August 1, 2026 primarily reflects a decrease in

borrowings under our revolving credit agreement.

The revolver was used to fund the acquisition of Stuart Weitzman, as further described in Note 3 to the condensed consolidated financial statements.

The increase in working capital from January 31, 2026 primarily reflects higher receivables and prepaid and other current assets, partially offset by higher borrowings under our revolving credit agreement.

Our current ratio was 1.03:1 as of May 2, 2026, compared to 1.10:1 at May 3, 2025 and 1.02:1 at January 31, 2026.

Our debt-to-capital ratio was 35.9% as of May 2, 2026, compared to 29.7% as of May 3, 2025 and 32.7% at January 31, 2026.

The higher debt-to-capital ratio as of May 2, 2026 reflects the increase in borrowings under our revolving credit agreement as a result of the Stuart Weitzman acquisition.

We declared and paid dividends of $0.07 per share in the first quarter of both 2026 and 2025.

The increase was further driven by increases in net receivables and net inventories.

The increase in working capital from January 31, 2026 primarily reflects higher net inventories.

Our current ratio was 1.11:1 at August 1, 2026, compared to 1.08:1 at August 2, 2025 and 1.02:1 at January 31, 2026.

Our debt-to-capital ratio was 29.7% as of August 1, 2026, compared to 38.4% as of August 2, 2025 and 32.7% at January 31, 2026.

The lower debt-to-capital ratio as of August 1, 2026 reflects the decrease in borrowings under our revolving credit agreement from the previous year, which was higher as a result of the Stuart Weitzman acquisition.

We declared and paid dividends of $0.07 per share in the second quarter of both 2026 and 2025.

The declaration and payment of any future dividend is at the discretion of the Board of Directors and will depend on our results of operations, financial condition, business conditions and other factors deemed relevant by our Board of Directors.

35 unchanged sentences

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-Q

Item 2. Management’s Discussion and Analysis