What changed in this filing

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Item 1A. Risk Factors

2026-08-06 compared with 2026-05-07 · 45 added, 40 removed, 324 unchanged (21% of the section changed)

12 unchanged sentences

• Impair the financial health of certain of our wholesale customers (see "We are Subject to a Number of Risks Which May Adversely Affect Consumer and/or Wholesale Customer Demand for Our Products and Lead to a Decline in Sales and/or Earnings");

• Result in a misalignment between demand and supply, as has occurred in our cancellation of product orders in advance of the Fall 2025 season (see "Our Inability to Accurately Predict Consumer and/or Customer Demand for Our Products Could Lead to a Build-up of Inventory or a Lack of Inventory and Affect Our Gross Margin");

• Result in a misalignment between demand and supply (see "Our Inability to Accurately Predict Consumer and/or Customer Demand for Our Products Could Lead to a Build-up of Inventory or a Lack of Inventory and Affect Our Gross Margin");

• Impact global economic conditions and contribute to an economic slowdown (see "We are Subject to a Number of Risks Which May Adversely Affect Consumer and/or Wholesale Customer Demand for Our Products and Lead to a Decline in Sales and/or Earnings" and "We May Incur Additional Expenses, Be Unable to Obtain Financing, or Be Unable to Meet Financial Covenants of Our Financing Agreements as a Result of Downturns in the Global Markets");

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• Impact previous business assumptions (see "We May Have Additional Tax Liabilities or Experience Increased Volatility in Our Effective Tax Rate" and "Our Inability to Accurately Predict Consumer and/or Customer Demand for Our Products Could Lead to a Build-up of Inventory or a Lack of Inventory and Affect Our Gross Margin");

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global trade policy changes may also exacerbate other risks discussed in this Item 1A, any of which could have a material adverse effect on our results of operations, financial condition or cash flows.

New or increased tariffs or other alternative measures, retaliatory actions, or anti-American sentiment could also exacerbate the risks outlined above and in this Item 1A.

New or increased tariffs or other alternative

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measures, retaliatory actions, or anti-American sentiment could also exacerbate the risks outlined above and in this Item 1A.

The current trade environment is dynamic in nature.

Significant uncertainty remains regarding whether and how the prior incremental tariffs that we have paid will be refunded by the U.S.

government and the tariff rates that will apply to our U.S.

Significant uncertainty remains regarding tariff rates that will apply to our U.S.

imports in the near and long-term from additional alternative measures pursued by the U.S.

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Our DTC sales are dependent in part on the weather and our DTC sales growth is likely to be adversely impacted or may even decline in years in which weather conditions do not stimulate demand for our products.

Unseasonably warm weather also impacts future sales to and sell through of current orders at our

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wholesale customers, who may hold inventory into subsequent seasons in response to unseasonably warm weather and may not follow historical replenishment patterns.

Unseasonably warm weather also impacts future sales to and sell through of current orders at our wholesale customers, who may hold inventory into subsequent seasons in response to unseasonably warm weather and may not follow historical replenishment patterns.

Our results may be negatively impacted if management is not able to adjust expenses in a timely manner in response to unfavorable weather conditions and the resulting impact on consumer and customer demand.

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To distinguish our products in the marketplace and achieve commercial success, we rely on product innovations, including new or exclusive technologies, inventive and appealing design or other differentiating features.

If we fail to introduce innovative products that appeal to consumers and customers, we could suffer reputational damage to our brands and demand for our products could decline.

If we fail to introduce

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innovative products that appeal to consumers and customers, we could suffer reputational damage to our brands and demand for our products could decline.

Our Orders from Wholesale Customers are Subject to Cancellation, Which Could Lead to a Decline in Sales or Gross Profit, Write-downs of Excess Inventory, Increased Discounts or Extended Credit Terms to Our Wholesale Customers.

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Conversely, if we underestimate consumer and/or customer demand for our products or if our contract manufacturers or third-party logistics providers are unable to supply or deliver products when we need them, we may experience inventory shortages, which may prevent us from fulfilling product orders or having optimal inventory assortments for our DTC channels resulting in lost sales, negatively affect our wholesale customer and consumer relationships, result in increased costs to expedite production and delivery, or diminish our ability to build brand loyalty.

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WE ARE SUBJECT TO VARIOUS RISKS IN OUR SUPPLY CHAIN

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If we are unable to obtain necessary production capacities, we may be unable to meet consumer demand, resulting in lost sales.

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In addition, contract manufacturers may fail to perform as expected.

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Our Success Depends on Our Third-Party Logistics Providers and Our Third-Party Distribution Facilities.

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The majority of our products are manufactured outside of our principal sales markets, which requires these products to be consolidated and transported, sometimes over large geographical distances.

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Furthermore, increases in distribution costs, including but not limited to freight costs, could adversely affect our costs, which we may not be able to offset through price increases or decreased promotions.

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We receive our products from third-party logistics providers at our owned distribution centers in the U.S., Canada and France.

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If the third parties fail to manage these responsibilities, our international and domestic distribution operations could face significant disruptions or we could incur additional expense.

Transitions within our distribution network amongst third-party distribution partners, such as is currently occurring with the transition of the operation of our distribution center in France, exacerbates this risk.

Transitions within our distribution network to and amongst third-party distribution partners, such as is currently occurring with the transition of the operation of our distribution center in France, exacerbates this risk.

Our ability to meet consumer and customer expectations, manage inventory, complete sales, and achieve our objectives for operating efficiencies depends on the proper operation of our existing distribution facilities, as well as the facilities of third parties, the development or expansion of additional distribution capabilities and services, and the timely performance of services by third parties, including those involved in moving products to and from our distribution facilities and facilities operated by third parties.

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Implementation is also highly dependent on the coordination of numerous employees, contractors and software and system providers.

The interdependence of these processes and systems is a significant risk to the successful completion and continued refinement

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of these initiatives, and the failure of any aspect could have a material adverse effect on the functionality of our overall business.

The interdependence of these processes and systems is a significant risk to the successful completion and continued refinement of these initiatives, and the failure of any aspect could have a material adverse effect on the functionality of our overall business.

We may also experience difficulties in implementing or operating our new or upgraded business processes or information technology systems, including, but not limited to, ineffective or inefficient operations, significant system failures, system outages, delayed implementation and loss of system availability, which could lead to increased implementation and/or operational costs, loss or corruption of data, delayed shipments, excess inventory and interruptions of operations resulting in lost sales and/or profits.

In addition, our inability to keep up with rapid technological change (including the successful utilization of data analytics, artificial intelligence ("AI") and machine learning) could adversely impact our business.

We May Not Realize Returns on Our Fixed Cost Investments in Our DTC Business Operations.

2 unchanged sentences

We may not be able to exit DTC brick-and-mortar locations and related leases at all or without significant cost or loss, including impairment losses, renegotiate the terms thereof, or effectively manage the profitability of our existing brick-and-mortar stores.

In addition, obtaining real estate and effectively renewing real estate leases for our DTC brick-and-mortar operations is subject to the real estate market and we may not be able to secure adequate new locations or successfully renew leases for existing locations.

In addition, obtaining real

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estate and effectively renewing real estate leases for our DTC brick-and-mortar operations is subject to the real estate market and we may not be able to secure adequate new locations or successfully renew leases for existing locations.

WE ARE SUBJECT TO CERTAIN INFORMATION TECHNOLOGY RISKS

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While we maintain cyber liability insurance policies for coverage in the event of a cybersecurity incident, we cannot be certain that our existing coverage will continue to be available on acceptable terms or will be available, and in sufficient amount, to cover the potentially significant losses that could result from a cybersecurity incident or that the insurer will not deny coverage as to any future claims.

In addition, cybersecurity threat actors may use artificial intelligence ("AI") tools to deploy increasingly advanced attacks on our and our third-party cloud-based solution providers' information technology systems.

We face risks that we will fail to combat the offensive use of AI sufficiently or that we will fail to deploy defensive tools using AI adequately, either because we are unable to anticipate the risks accurately or because we lack the knowledge or resources to adequately address the cybersecurity threats and opportunities associates with AI.

If we and/or our cloud-based solution providers are not successful in preventing or effectively responding to outages or cyberattacks, our financial condition, results of operations and cash flow could be materially and adversely affected.

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A Security Breach of Our or Our Third Parties' Systems, Exposure of Personal or Confidential Information or Increased Government Regulation Relating to Handling of Personal Data, Could, Among Other Things, Disrupt Our Operations or Cause Us to Incur Substantial Costs or Negatively Affect Our Reputation.

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The methods 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 for long periods of time.

The ever-evolving threats mean we and our third parties must continually evaluate and adapt our systems and processes, and there is no guarantee that these efforts will be adequate to safeguard against all data security breaches or misuses of data.

The ever-evolving threats mean we and our third parties must continually evaluate and adapt our systems

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and processes, and there is no guarantee that these efforts will be adequate to safeguard against all data security breaches or misuses of data.

Any breaches of our or our third parties’ systems could expose us, our customers, our consumers, our suppliers, our employees, or other individuals to a risk of loss or misuse of this information, result in litigation and potential liability for us, damage our reputation, or otherwise harm our business.

11 unchanged sentences

Events that adversely affect that trust could adversely affect our brand and reputation.

Use or Misuse of Artificial Intelligence Technologies Could Adversely Affect Our Business, Reputation, Results of Operations, or Financial Condition.

The use of rapidly evolving technologies, such as AI technologies, by us and our third-party service providers presents risks and challenges to our business.

If we are unable to keep up with rapid technological change or fail to effectively adopt and integrate AI technologies at the pace of our competitors, our competitive position, operating efficiency, and ability to meet evolving consumer expectations could be adversely affected.

The rapid pace of AI development may also require significant investment, and we do not provide any assurance that our AI investments will deliver expected returns or keep pace with industry adoption.

Using AI and other machine learning technologies may expose us to unintended outcomes, liability, reputational harm, particularly if such technology produces errors or hallucinations, or results in content that is biased, misleading or unreliable, infringes on intellectual property or data privacy rights of third parties, or otherwise does not function as intended.

Moreover, use of AI in connection with the creation or development of intellectual property may present challenges in asserting ownership over the resulting output.

AI-generated or AI-assisted output may also incorporate elements derived from third-party content used to train or operate these technologies, which could expose us to claims of intellectual property infringement, misappropriation, or other violations of third-party rights.

The use of such technologies may also increase the risk that confidential information becomes accessible by third parties or results in legal or regulatory exposure.

Further, the increasing use of AI-powered bots and automated agents by third parties may distort traffic, consumer engagement metrics, and other data on our e-commerce sites which is used to evaluate consumer demand, measure performance, and make operational decisions.

If we are unable to accurately identify and account for such activity, we may make decisions based on inaccurate or misleading information, which could adversely affect our business, results of operations, or financial condition.

Our ability to effectively develop, deploy, govern, and realize the benefits of AI technologies depends in part on our ability to attract, retain, and develop employees with specialized technical, data, engineering, cybersecurity, and AI-related skills.

If we are unable to acquire, retain, or develop the necessary expertise, we may be unable to effectively implement AI technologies, manage associated risks, or remain competitive in a rapidly evolving technological environment.

We Depend on Certain Legacy Information Technology Systems, Which May Inhibit Our Ability to Operate Efficiently.

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WE ARE SUBJECT TO LEGAL AND REGULATORY RISKS

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Our Success Depends on the Protection of Our Intellectual Property Rights.

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Increased instances of counterfeit manufactured products and sales may adversely affect our sales and the reputation of our brands and result in a shift of consumer preference away from our products.

The actions we take to establish and protect trademarks and other proprietary rights may not be adequate to prevent imitation of our products by others or to prevent others from seeking to block sales of our

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products as violations of proprietary rights.

In markets outside of the U.S., it may be more difficult for us to establish our proprietary rights and to successfully challenge use of those rights by other parties.

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As jurisdictions implement these requirements, tax uncertainty may increase and could adversely affect our provision for income taxes.

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Due to the nature of the findings in the Korea 2009 through 2014 income tax audits, the Company has invoked the Mutual Agreement Procedures outlined in the U.S.-Korean income tax treaty.

4 unchanged sentences

These risks include, but are not limited to, the burden of complying with, and unexpected changes to, foreign and domestic laws and regulations, such as anti-corruption and forced labor regulations and sanctions regimes, sustainability regulations, the effects of fiscal and political crises and political and economic disputes, changes in diverse consumer preferences, foreign currency exchange rate fluctuations, managing a diverse and widespread workforce, political unrest, terrorist acts, military operations, disruptions or delays in shipments, disease outbreaks, natural disasters, and changes in economic conditions in countries in which we contract to manufacture, source raw materials or sell products.

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our workforce, and our cost of doing business (including the cost of freight and logistics and raw materials) may be impacted by these events should they occur and laws and regulations that are enacted in response to such events.

Our ability to sell products in certain markets, demand for our products in certain markets, our ability to collect accounts receivable, our contract manufacturers' ability to procure raw materials or manufacture products, distribution and logistics providers' ability to operate, our ability to operate brick-and-mortar stores, our workforce, and our cost of doing business (including the cost of freight and logistics and raw materials) may be impacted by these events should they occur and laws and regulations that are enacted in response to such events.

The current conflict in the Middle East has the potential to exacerbate these risks as it impacts the cost of oil throughout the globe.

5 unchanged sentences

or other countries, which could materially impact sales.

In connection with the United Kingdom's exit from the European Union (commonly referred to as "Brexit"), on December 24, 2020, the European Union ("E.U.") and the United Kingdom ("U.K.") reached an agreement, the E.U.-U.K.

Trade and Cooperation Agreement, to govern aspects of the relationship of the E.U.

following Brexit.

As a result of no longer having "free circulation" between the U.K.

and the E.U., we have incurred and will continue to incur additional duties.

We are investing in a third-party distribution center in the U.K.

to mitigate these additional costs beginning in the second quarter of 2026.

Fluctuations in Inflation and Currency Exchange Rates Could Result in Lower Revenues, Higher Costs and/or Decreased Margins and Earnings.

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We employ several strategies in an effort to mitigate this transactional currency risk, but these strategies may not fully mitigate the negative effects of adverse foreign currency exchange rate fluctuations on the cost of our finished goods in a given period and there is no assurance that price increases will be accepted by our wholesale customers, international distributors or consumers.

Our gross margins are adversely affected whenever we are not able to offset the full extent of finished goods cost increases caused by adverse fluctuations in foreign currency exchange rates.

Our gross margins are adversely

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affected whenever we are not able to offset the full extent of finished goods cost increases caused by adverse fluctuations in foreign currency exchange rates.

Currency exchange rate fluctuations may also create indirect risk to our business by disrupting the business of independent finished goods manufacturers from which we purchase our products.

1 unchanged sentence

Although each manufacturer bears the full risk of fluctuations in the value of its currency against other currencies, our business can be and has been indirectly affected when adverse fluctuations cause a manufacturer to raise the prices of goods it produces for us, disrupt the manufacturer's ability to purchase the necessary raw materials on a timely basis, or disrupt the manufacturer's ability to function as an ongoing business.

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WE ARE SUBJECT TO NUMEROUS OPERATIONAL RISKS

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Financing may not be available on terms that are acceptable or favorable to us, if at all.

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Our credit agreements have various financial and other covenants.

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Acquisitions are subject to many risks, including potential loss of significant customers or key personnel of the acquired business as a result of the change in ownership, difficulty integrating the operations of the acquired business or achieving targeted efficiencies, the incurrence of substantial costs and expenses related to the acquisition effort, and diversion of management's attention from other aspects of our business operations.

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Acquisitions may also cause us to incur debt or result in dilutive issuances of our equity securities.

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We face intense competition for these individuals worldwide, and there is a significant concentration of well-funded apparel and footwear competitors near our headquarters in Portland, Oregon.

We may not be able to attract qualified new employees or retain existing employees, which may have a material adverse effect on our financial condition, results of operations or cash flows.

We may not be able to attract qualified new employees or retain or develop existing employees, which may have a material adverse effect on our financial condition, results of operations or cash flows.

We Have Implemented a Shared Services Model.

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Over the last several years, we have invested in a shared services model under which certain of our operations, including certain finance and information technology functions, are performed by teams around the globe.

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We rely on our licensees to help preserve the value of our brands.

Although we attempt to protect our brands through approval rights,

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we cannot completely control the use of our licensed brands by our licensees.

Although we attempt to protect our brands through approval rights, we cannot completely control the use of our licensed brands by our licensees.

The misuse of a brand by or negative publicity involving a licensee could have a material adverse effect on that brand and on us.

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Certain Shareholders Have Substantial Control Over Us and Are Able to Influence Corporate Matters.

As of March 31, 2026, three related shareholders, Timothy P.

As of June 30, 2026, three related shareholders, Timothy P.

Boyle, Joseph P.

15 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 1A. Risk Factors