What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2025-12-10 compared with 2025-09-10 · 120 added, 112 removed, 398 unchanged (37% of the section changed)

8 unchanged sentences

Total current assets

Property and equipment, net of accumulated depreciation of $ 293,603 and $ 297,396 as of August 2, 2025 and February 1, 2025, respectively.

Property and equipment, net of accumulated depreciation of $ 298,162 and $ 297,396 as of November 1, 2025 and February 1, 2025, respectively.

Operating lease right of use assets

14 unchanged sentences

Authorized 32,000,000 shares;

16,505,718 shares issued as of August 2, 2025 and 16,497,092 shares issued as of February 1, 2025;

8,305,912 shares outstanding as of August 2, 2025 and 8,547,841 shares outstanding as of February 1, 2025

16,500,334 shares issued as of November 1, 2025 and 16,497,092 shares issued as of February 1, 2025;

8,300,528 shares outstanding as of November 1, 2025 and 8,547,841 shares outstanding as of February 1, 2025

Paid in capital

1 unchanged sentence

Treasury stock, at cost;

8,199,806 shares held as of August 2, 2025 and 7,949,251 shares held as of February 1, 2025

8,199,806 shares held as of November 1, 2025 and 7,949,251 shares held as of February 1, 2025

Total stockholders ’ equity

9 unchanged sentences

Asset impairment

Gain on sale of building

Income (loss) from operations

Loss from operations

Interest income

Interest expense

Income (loss) before income taxes

Loss before income taxes

Income tax benefit

Net income (loss)

Basic net earnings (loss)per common share

4 unchanged sentences

(in thousands, except per share amounts)

Twenty-Six Weeks Ended

Thirty-Nine Weeks Ended

Cost of sales (exclusive of depreciation)

2 unchanged sentences

Gain on sale of building

Income (loss) from operations

Loss from operations

Interest income

Interest expense

Income (loss) before income taxes

Loss before income taxes

Income tax benefit

Net income (loss)

Basic net earnings (loss)per common share

5 unchanged sentences

(in thousands)

Twenty-Six Weeks Ended

Thirty-Nine Weeks Ended

Operating activities:

Net income (loss)

Adjustments to reconcile net income (loss) to net cash used in operating activities:

Adjustments to reconcile net loss to net cash used in operating activities:

Asset impairment

11 unchanged sentences

Layaway deposits

Net cash used in operating activities

Net cash provided by (used in) operating activities

Investing activities:

1 unchanged sentence

Proceeds from sale of building

Net cash provided by (used in) investing activities

Net cash used in investing activities

Financing activities:

30 unchanged sentences

Balances — August 2, 2025

Forfeiture of restricted shares

Stock-based compensation expense

Shares withheld for settlement of employee taxes on vesting

Net income (loss)

Balances — November 1, 2025

Treasury Stock

Balances — February 3, 2024

Vesting of nonvested restricted stock units

Grant of restricted shares

12 unchanged sentences

Balances — August 3, 2024

Grant of restricted shares

Forfeiture of restricted shares

Stock-based compensation expense

Shares withheld for settlement of employee taxes on vesting

Net income (loss)

Balances — November 2, 2024

See accompanying notes to the condensed consolidated financial statements (unaudited).

1 unchanged sentence

Notes to the Condensed Consolidated Financial Statements (unaudited)

August 2, 2025

November 1, 2025

Significant Accounting Policies

2 unchanged sentences

and its subsidiary (the “ Company ” ) is a leading off-price value retailer of apparel, accessories and home trends primarily for African American families in the United States.

As of August 2, 2025, the Company operated 590 stores in urban, suburban and rural markets in 33 states.

As of November 1, 2025, the Company operated 593 stores in urban, suburban and rural markets in 33 states.

The condensed consolidated financial statements are prepared in accordance with U.S.

4 unchanged sentences

These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the 2024 Form 10-K.

Operating results for the first half of 2025 are not necessarily indicative of the results that may be expected for the fiscal year as a result of the seasonality of the business, and the current economic uncertainty.

Operating results for the first three quarters of 2025 are not necessarily indicative of the results that may be expected for the fiscal year as a result of the seasonality of the business, and the current economic uncertainty.

The following contains references to fiscal years 2025 and 2024, which represent fiscal years ending or ended on January 31, 2026 and February 1, 2025, respectively.

11 unchanged sentences

The Company includes the amount of compensation cost attributed to future services and not yet recognized as assumed proceeds.

For the second quarter of 2025 and 2024, there were 0 and 178,000 shares of nonvested restricted stock, respectively, excluded from the calculation of diluted earnings per share because of antidilution.

For the twenty-six weeks ended August 2, 2025 and August 3, 2024, there were 0 and 234,000 shares of nonvested restricted stock, respectively, excluded from the calculation of diluted earnings per share because of antidilution.

For the third quarter of 2025 and 2024, there were 410,000 and 258,000 shares of nonvested restricted stock, respectively, excluded from the calculation of diluted earnings per share because of antidilution.

For the thirty-nine weeks ended November 1, 2025 and November 2, 2024, there were 381,000 and 242,000 shares of nonvested restricted stock, respectively, excluded from the calculation of diluted earnings per share because of antidilution.

The following table provides the weighted average number of common shares outstanding used to calculate basic earnings per share to the number of common shares and common stock equivalents outstanding used in calculating diluted earnings per share:

Thirteen Weeks Ended

August 2, 2025

August 3, 2024

November 1, 2025

November 2, 2024

Weighted average number of common shares outstanding (basic)

1 unchanged sentence

Weighted average number of common shares and common stock equivalents outstanding (diluted)

Twenty-Six Weeks Ended

August 2, 2025

August 3, 2024

Thirty-Nine Weeks Ended

November 1, 2025

November 2, 2024

Weighted average number of common shares outstanding (basic)

9 unchanged sentences

Borrowings under the credit facility bear interest (a) for SOFR Loans, at a rate equal to the SOFR Rate plus a SOFR adjustment equal to 0.10 % plus either 1.50 % , 1.75 % or 2.00 % , or (b) for Base Rate Loans, at a rate equal to the highest of (i) the prime rate, (ii) the Federal Funds Rate plus 0.5 % and (iii) the Term SOFR Rate plus 1.0 % , plus, in each case either 0.50 % , 0.75 % or 1.00 % , based in any such case on the average daily availability for borrowings under the facility.

As of August 2, 2025, the Company had no borrowings under the credit facility and $ 2.2 million of letters of credit outstanding.

As of November 1, 2025, the Company had no borrowings under the credit facility and $ 2.2 million of letters of credit outstanding.

Impairment of Assets

1 unchanged sentence

If this review indicates that the carrying value of the asset will not be recovered as determined based on projected undiscounted cash flows related to the asset over its remaining life, the carrying value of the asset is reduced to its estimated fair value.

In the first half of 2025, non-cash impairment expense related to underperforming stores totaled $ 0.3 million, comprised of $ 0.2 million for leasehold improvements and fixtures and equipment, and $ 0.1 million for operating lease right of use assets.

In the first half of 2024, non-cash impairment expense related to underperforming stores totaled $ 1.3 million, comprised of $ 0.7 million for leasehold improvements and fixtures and equipment, and $ 0.6 million for operating lease right of use assets.

No impairments were recorded in the third quarter of 2025.

In the third quarter of 2024, non-cash impairment expense related to underperforming stores totaled $ 0.6 million, comprised of $ 0.3 million for leasehold improvements and fixtures and equipment, and $ 0.3 million for operating lease right of use assets.

In the thirty-nine weeks ended November 1, 2025, non-cash impairment expense related to underperforming stores totaled $ 0.3 million, comprised of $ 0.2 million for leasehold improvements and fixtures and equipment, and $ 0.1 million for operating lease right of use assets.

In the thirty-nine weeks ended November 2, 2024, non-cash impairment expense related to underperforming stores totaled $ 1.8 million, comprised of $ 0.9 million for leasehold improvements and fixtures and equipment, and $ 0.9 million for operating lease right of use assets.

Income taxes are accounted for under the asset and liability method.

2 unchanged sentences

The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some

portion or all of the deferred tax assets will not be realized.

In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized.

If realization of the deferred tax asset is not considered more likely than not, then a valuation allowance is recorded to reduce the deferred tax asset to its net realizable value.

17 unchanged sentences

Thirteen Weeks Ended

Twenty-Six Weeks Ended

August 2, 2025

August 3, 2024

August 2, 2025

August 3, 2024

Thirty-Nine Weeks Ended

November 1, 2025

November 2, 2024

November 1, 2025

November 2, 2024

Total number of shares purchased

4 unchanged sentences

The programs do not have expiration dates.

At August 2, 2025, $ 40.0 million remained available under the Company ’ s stock repurchase authorization.

At November 1, 2025, $ 40.0 million remained available under the Company ’ s stock repurchase authorization.

Recent Accounting Pronouncements

24 unchanged sentences

Thirteen Weeks Ended

Twenty-Six Weeks Ended

Thirty-Nine Weeks Ended

Accessories & Beauty

8 unchanged sentences

Thirteen Weeks Ended

Twenty-Six Weeks Ended

August 2, 2025

August 3, 2024

August 2, 2025

August 3, 2024

Thirty-Nine Weeks Ended

November 1, 2025

November 2, 2024

November 1, 2025

November 2, 2024

Operating lease cost

2 unchanged sentences

Total lease cost

Future minimum lease payments as of August 2, 2025 are as follows (in thousands):

Future minimum lease payments as of November 1, 2025 are as follows (in thousands):

Remainder of 2025

2 unchanged sentences

Total present value of lease liabilities

(1) Calculated using the incremental borrowing rate for each lease.

(1) Calculated using the incremental borrowing rate.

(2) Includes short-term and long-term portions of operating lease liabilities.

1 unchanged sentence

Supplemental cash flows and other information related to operating leases are as follows (in thousands, except for weighted average amounts):

Twenty-Six Weeks Ended

August 2, 2025

August 3, 2024

Thirty-Nine Weeks Ended

November 1, 2025

November 2, 2024

Cash paid for operating leases

7 unchanged sentences

This enables the Chief Executive Officer to assess the Company ’ s overall level of available resources and determine how best to deploy these resources across retail stores that are in line with the Company ’ s long-term company-wide strategic goals.

The Company ’ s retail stores sell similar products, use similar processes to sell those products, and sell their products to similar classes of customers.

The Company ’ s retail stores sell similar products, use similar processes to sell those products, and sell

their products to similar classes of customers.

All sales and assets are located within the United States.

4 unchanged sentences

Thirteen Weeks Ended

Twenty-Six Weeks Ended

August 2, 2025

August 3, 2024

August 2, 2025

August 3, 2024

Thirty-Nine Weeks Ended

November 1, 2025

November 2, 2024

November 1, 2025

November 2, 2024

Cost of sales (exclusive of depreciation shown separately below)

11 unchanged sentences

Interest expense

Income tax (provision) benefit

Net income (loss)

Income tax benefit

(1) Other segment expenses represent other store, corporate and distribution center expenses including utilities, repairs, supplies, insurance, professional fees and other miscellaneous fees.

14 unchanged sentences

uncertainty and economic impact of pandemics, epidemics or other public health emergencies;

transportation and distribution delays or interruptions;

transportation and

distribution delays or interruptions;

changes in freight rates;

10 unchanged sentences

risks related to cybersecurity, data privacy and intellectual property;

changes in demand due to weather patterns;

temporary changes in demand due to weather patterns;

seasonality of the Company ’ s business;

17 unchanged sentences

Consumer insights research validates that our unique culturally relevant styling, and strong value for the price, fosters deep customer loyalty and high shopping frequency in the neighborhoods in which we operate.

As of August 2, 2025, we operated 590 stores in urban, suburban and rural markets in 33 states.

As of November 1, 2025, we operated 593 stores in urban, suburban and rural markets in 33 states.

Uncertainties and Challenges

General Economic Conditions

We expect that our operations in the short-term will continue to be influenced by general economic conditions, including on-going inflationary pressures, new tariff programs and changes in consumer sentiment.

We continue to monitor the impacts on our business of unemployment levels, wage inflation, interest rates, inflation rates, housing costs, energy costs, consumer confidence, consumer perception of economic conditions, costs to source our merchandise and supply chain disruptions.

We are monitoring trends in general economic conditions including inflation, tariffs, and changes in consumer sentiment.

We also regularly monitor the impacts on our business of unemployment levels, wage inflation, interest rates, inflation rates, housing costs, energy costs, consumer confidence, consumer perception of economic conditions, costs to source our merchandise and supply chain disruptions.

Seasonality and Weather Patterns

14 unchanged sentences

Expenses and, to a greater extent, operating income, vary by quarter.

Results of a period shorter than a full

year may not be indicative of results expected for the entire year as a result of the seasonality of our business, and the current economic uncertainty.

Results of a period shorter than a full year may not be indicative of results expected for the entire year as a result of the seasonality of our business, and the current economic uncertainty.

Key Operating Statistics

9 unchanged sentences

Finally, we monitor corporate and distribution center expenses against budgeted amounts.

Thirteen Weeks Ended August 2, 2025 and August 3, 2024

Net sales increased $14.2 million, or 8.0%, to $190.8 million in the second quarter of 2025 from $176.6 million in the second quarter of 2024.

Thirteen Weeks Ended November 1, 2025 and November 2, 2024

Net sales increased $18.0 million, or 10.1%, to $197.1 million in the third quarter of 2025 from $179.1 million in the third quarter of 2024.

Comparable store sales increased 10.8%, resulting in an increase of $19.1 million in sales.

1 unchanged sentence

Cost of Sales (exclusive of depreciation).

Cost of sales (exclusive of depreciation) decreased $7.1 million, or 5.8%, to $114.5 million in the second quarter of 2025 from $121.6 million in the second quarter of 2024.

Cost of sales as a percentage of sales decreased to 60.0% in the second quarter of 2025 from 68.9% in the second quarter of 2024.

The 890 basis-point decrease was primarily driven by a 580 basis points decrease in markdowns, a 190 basis points decrease in shrink, and a 120 basis points decrease in other cost of sales.

Cost of sales (exclusive of depreciation) increased $12.7 million, or 11.7%, to $120.5 million in the third quarter of 2025 from $107.8 million in the third quarter of 2024.

Cost of sales as a percentage of sales was 61.1% in the third quarter of 2025 and 60.2% in the third quarter of 2024.

The 90 basis-point increase was primarily driven by a 50 basis points increase in markdowns, a 20 basis points increase in shrink, and a 20 basis points increase in other cost of sales.

Cost of sales as a percentage of sales in the third quarter of 2024 was positively impacted by low markdowns and shrink following the second quarter of 2024 strategic inventory reset.

Selling, General and Administrative Expenses.

Selling, general and administrative expenses increased $5.1 million, or 6.9%, to $78.9 million in the second quarter of 2025 from $73.8 million in the second quarter of 2024.

The increase was driven by corporate expense (primarily payroll and incremental incentive compensation) of $3.9 million and occupancy expense of $1.0 million.

As a percentage of sales, Selling, general and administrative expenses decreased to 41.4% in the second quarter of 2025 from 41.8% in the second quarter of 2024, primarily driven by the aforementioned items.

Selling, general and administrative expenses increased $4.6 million, or 6.2%, to $79.3 million in the third quarter of 2025 from $74.7 million in the third quarter of 2024.

The increase was driven by corporate expenses (primarily incremental incentive compensation) of $2.9 million and store expenses of $1.7 million.

As a percentage of sales, Selling, general and administrative expenses decreased to 40.3% in the third quarter of 2025 from 41.7% in the third quarter of 2024, primarily driven by the aforementioned items.

Depreciation.

Depreciation expense decreased $0.2 million, or 4.9%, to $4.5 million in the second quarter of 2025 from $4.8 million in the second quarter of 2024 due to the sale of our corporate office building.

Non-cash impairment expense related to underperforming stores totaled $0.2 million in the second quarter of 2025, comprised of leasehold improvements and fixtures and equipment.

Non-cash impairment expense related to underperforming stores totaled $1.3 million in the second quarter of 2024, comprised of $0.7 million for leasehold improvements and fixtures and equipment, and $0.6 million for operating lease right of use assets.

Gain on sale of building.

Gain on the sale of the corporate office building was $11.0 million in the second quarter of 2025.

Depreciation expense decreased $0.2 million, or 2.7%, to $4.6 million in the third quarter of 2025 from $4.8 million in the third quarter of 2024.

We did not incur any non-cash impairment expense in the third quarter of 2025.

Non-cash impairment expense related to underperforming stores totaled $0.6 million in the third quarter of 2024, comprised of $0.3 million for leasehold improvements and fixtures and equipment, and $0.3 million for operating lease right of use assets.

Income Tax Benefit.

There was no income tax benefit in the second quarter of 2025 compared to a benefit of $6.0 million in the second quarter of 2024.

For the second quarter of 2025 and the second quarter of 2024, we used the annual effective tax rate to determine income tax benefit based upon interim period results.

There was no income tax benefit in the third quarter of 2025 compared to a benefit of $1.3 million in the third quarter of 2024.

For the third quarter of 2025 and the third quarter of 2024, we used the annual effective tax rate to determine income tax benefit based upon interim period results.

Net Income (Loss).

Net income was $3.8 million in the second quarter of 2025 compared to net loss of $18.4 million in the second quarter of 2024 due to the factors discussed above.

Twenty-Six Weeks Ended August 2, 2025 and August 3, 2024

Net sales increased $29.6 million, or 8.2%, to $392.5 million in the first twenty-six weeks of 2025 from $362.8 million in the same period of 2024.

Net loss was $6.9 million in the third quarter of 2025 compared to net loss of $7.2 million in the third quarter of 2024 due to the factors discussed above.

Thirty-Nine Weeks Ended November 1, 2025 and November 2, 2024

Net sales increased $47.7 million, or 8.8%, to $589.6 million in the first thirty-nine weeks of 2025 from $541.9 million in the same period of 2024.

Comparable store sales increased 10.0%, resulting in an increase of $53.2 million in sales.

1 unchanged sentence

Cost of Sales (exclusive of depreciation).

Cost of sales (exclusive of depreciation) increased $0.5 million, or 0.2%, to $236.4 million in the first twenty-six weeks of 2025 from $235.9 million in the same period of 2024.

Cost of sales as a percentage of sales decreased to 60.2% in the first twenty-six weeks of 2025 from 65.0% in the same period of 2024.

The 480 basis-point decrease was driven by a 250 basis points decrease in markdowns, a 130 basis points decrease in shrink, and a 100 basis points decrease in other cost of sales.

Cost of sales (exclusive of depreciation) increased $13.2 million, or 3.8%, to $356.9 million in the first thirty-nine weeks of 2025 from $343.7 million in the same period of 2024.

Cost of sales as a percentage of sales decreased to 60.5% in the first thirty-nine weeks of 2025 from 63.4% in the same period of 2024.

The 290 basis-point decrease was driven by a 150 basis points decrease in markdowns, an 80 basis points decrease in shrink, and a 60 basis points decrease in other cost of sales.

Selling, General and Administrative Expenses.

Selling, general and administrative expenses increased $5.8 million, or 3.9%, to $153.8 million in the first twenty-six weeks of 2025 from $148.0 million in the same period of 2024.

The increase was primarily driven by stores selling and advertising expenses of $2.2 million, distribution center costs of $2.2 million, and corporate expenses (primarily incentive compensation) of $1.4 million .

As a percentage of sales, Selling, general and administrative expenses decreased to 39.2% in the first twenty-six weeks of 2025 from 40.8% in the first twenty-six weeks of 2024, due to the aforementioned items.

Selling, general and administrative expenses increased $10.4 million, or 4.7%, to $233.1 million in the first thirty-nine weeks of 2025 from $222.7 million in the same period of 2024.

The increase was primarily driven by store expenses of $3.8 million, distribution center costs of $2.7 million, and corporate expenses (primarily incentive compensation) of $3.9 million.

As a percentage of sales, Selling, general and administrative expenses decreased to 39.5% in the first thirty-nine weeks of 2025 from 41.1% in the first thirty-nine weeks of 2024, due to the aforementioned items.

Depreciation.

Depreciation expense decreased $0.7 million, or 6.9%, to $8.9 million in the first twenty-six weeks of 2025 from $9.6 million in the same period last year due to the sale of the corporate office building.

Non-cash impairment expense related to underperforming stores totaled $0.3 million in the first twenty-six weeks of 2025, comprised of $0.2 million for leasehold improvements and fixtures and equipment, and $0.1 million for operating lease right of use assets.

Non-cash impairment expense related to underperforming stores totaled $1.3 million in the first twenty-six weeks of 2024, comprised of $0.7 million for leasehold improvements and fixtures and equipment, and $0.6 million for operating lease right of use assets.

Depreciation expense decreased $0.8 million, or 5.5%, to $13.5 million in the first thirty-nine weeks of 2025 from $14.3 million in the same period last year primarily due to the sale of the corporate office building.

Non-cash impairment expense related to underperforming stores totaled $0.3 million in the first thirty-nine weeks of 2025, comprised of $0.2 million for leasehold improvements and fixtures and equipment, and $0.1 million for operating lease right of use assets.

Non-cash impairment expense related to underperforming stores totaled $1.8 million in the first thirty-nine weeks of 2024, comprised of $0.9 million for leasehold improvements and fixtures and equipment, and $0.9 million for operating lease right of use assets.

Gain on sale of building.

Gain on sale of the corporate office building was $11.0 million in the first twenty-six weeks of 2025.

Gain on sale of the corporate office building was $11.0 million in the first thirty-nine weeks of 2025.

Income Tax Benefit.

There was no income tax benefit in the first twenty-six weeks of 2025 compared to $8.7 million in the first twenty-six weeks of 2024.

For the second half of 2025 and the second half of 2024, we used the annual effective tax rate to determine income tax benefit based upon interim period results.

There was no income tax benefit in the first thirty-nine weeks of 2025 compared to $10.0 million in the first thirty-nine weeks of 2024.

We used the annual effective tax rate to determine income tax benefit based upon interim period results.

Net Income (Loss).

Net income was $4.7 million in the first twenty-six weeks of 2025 compared to net loss of $21.8 million in the same period of 2024 due to the factors discussed above.

Net loss was $2.2 million in the first thirty-nine weeks of 2025 compared to net loss of $29.0 million in the same period of 2024 due to the factors discussed above.

Liquidity and Capital Resources

1 unchanged sentence

Our capital allocation strategy is to maintain adequate liquidity to prioritize investments in opportunities to profitably grow our business and maintain current operations, then to return excess cash to stockholders through our repurchase programs.

Our quarter-end cash and cash equivalents balance was $50.4 million compared to cash and cash equivalents of $59.3 million at the end of the second quarter last year.

Our quarter-end cash and cash equivalents balance was $51.1 million compared to cash and cash equivalents of $38.9 million at the end of the third quarter last year.

Until required for other purposes, we maintain cash and cash equivalents in deposit or money market accounts.

4 unchanged sentences

and (iv) a revolving credit facility with a $75 million credit commitment.

Our quarter-end inventory balance was $117.6 million, down 12.9% compared to $135.0 million at the end of the second quarter last year.

Our quarter-end inventory balance was $123.5 million, down 3.1% compared to $127.5 million at the end of the third quarter last year.

Capital Expenditures

Capital expenditures in the first twenty-six weeks of 2025 were $7.7 million, an increase of $2.1 million over the first twenty-six weeks of 2024, as we increased our investments in new stores and remodels.

We anticipate capital expenditures in fiscal 2025 to be in the range of $22 million to $25 million, primarily for the opening of three new stores and remodeling existing stores, combined with ongoing investments in our systems.

Capital expenditures in the first thirty-nine weeks of 2025 were $15.5 million, an increase of $7.9 million over the first thirty-nine weeks of 2024, as we increased our investments in new stores and remodels.

We anticipate capital expenditures in fiscal 2025 to be approximately 23 million, primarily for the opening of three new stores and remodeling existing stores, combined with ongoing investments in our systems.

Share Repurchases

In the first half of fiscal 2025, we returned $6.3 million to stockholders through share repurchases.

In the first thirty-nine weeks of fiscal 2025, we returned $6.3 million to stockholders through share repurchases.

See Part II, Item 2 of this Report and Note 8 to the Financial Statements for more information.

2 unchanged sentences

Additional details of the credit facility are in Note 4 to the Financial Statements .

At the end of the second quarter of 2025, we had no borrowings under the credit facility and $2.2 million in letters of credit outstanding.

At the end of the third quarter of 2025, we had no borrowings under the credit facility and $2.2 million in letters of credit outstanding.

Cash Flows From Operating Activities .

Net cash used in operating activities was $7.1 million in the first twenty-six weeks of 2025 compared to $14.0 million in the same period of 2024.

Significant sources of cash for the first twenty-six weeks of 2025 included net income adjusted for non-cash items totaling $29.9 million (compared to net loss adjusted for non-cash items of $6.6 million in the first twenty-six weeks of 2024) and a decrease in inventory of $5.1 million in the first twenty-six weeks of 2025 (compared to an increase of $4.6 million in the first twenty-six weeks of 2024).

Significant uses of cash from operating activities in the first twenty-six weeks of 2025 included (1) a $29.6 million decrease in accrued expenses and other long-term liabilities (compared to a $21.9 million decrease in the first twenty-six weeks of 2024) due primarily to payments of operating lease liabilities;

(2) a $9.4 million increase in prepaid and other current assets (compared to a $6.1 million dollar increase in the first twenty-six weeks of 2024);

Net cash provided by operating activities was $1.5 million in the first thirty-nine weeks of 2025 compared to net cash used in operating activities of $32.3 million in the same period of 2024.

Significant sources of cash for the first thirty-nine weeks of 2025 included net loss adjusted for non-cash items totaling $40.4 million (compared to net loss adjusted for non-cash items of $16.1 million in the first thirty-nine weeks of 2024) and an increase in accrued compensation of $7.5 million in the first thirty-nine weeks of 2025 (compared to an increase of $2.9 million in the first thirty-nine weeks of 2024).

Significant uses of cash from operating activities in the first thirty-nine weeks of 2025 included (1) a $37.0 million decrease in accrued expenses and other long-term liabilities (compared to a $35.9 million decrease in the first thirty-nine weeks of 2024) due primarily to payments of operating lease liabilities;

(2) a $5.9 million increase in prepaid and other current assets (compared to a $2.3 million dollar increase in the first thirty-nine weeks of 2024);

and (3) a $5.1 million decrease in accounts payable (compared to a $17.9 million increase in the same period last year).

Cash Flows From Investing Activities.

Cash provided by investing activities was $3.5 million in the first twenty-six weeks of 2025 compared to cash used of $5.6 million in the same period last year.

Sources of cash of $11.2 million in the first 26 weeks of 2025 was from the sale of a building.

Cash used of $7.7 million in the first twenty-six weeks of fiscal 2025 and $5.6 million in the first twenty-six weeks of fiscal 2024 consisted of purchases of property and equipment.

Cash used in investing activities was $4.3 million in the first thirty-nine weeks of 2025 compared to $7.6 million in the same period last year.

Source of cash of $11.2 million in the first thirty-nine weeks of 2025 was from the sale of a building.

Cash used of $15.5 million in the first thirty-nine weeks of fiscal 2025 and $7.6 million in the first thirty-nine weeks of fiscal 2024 consisted of purchases of property and equipment.

Cash Flows From Financing Activities.

Cash used in financing activities was $7.1 million in the first twenty-six weeks of 2025 compared to $0.9 million in the same period last year.

Cash used in the first twenty-six weeks of fiscal 2025 was $0.8 million to settle withholding taxes on the vesting of restricted stock and $6.3 million for share repurchases, compared to $0.9 million used in the first twenty-six weeks of fiscal 2024 to settle withholding taxes on the vesting of restricted stock.

Cash used in financing activities was $7.1 million in the first thirty-nine weeks of 2025 compared to $0.9 million in the same period last year.

Cash used in the first thirty-nine weeks of fiscal 2025 was $0.8 million to settle withholding taxes on the vesting of restricted stock and $6.3 million for share repurchases, compared to $0.9 million used in the first thirty-nine weeks of fiscal 2024 to settle withholding taxes on the vesting of restricted stock.

Cash Requirements and Commitments

4 unchanged sentences

Historically, we have met these cash requirements using cash flow from operations and short-term trade credit.

As of August 2, 2025, our contractual commitments for operating leases totaled $217.5 million (with $36.2 million due within 12 months).

As of November 1, 2025, our contractual commitments for operating leases totaled $218.0 million (with $64.1 million due within 12 months).

See Note 11 to the Financial Statements for more information regarding lease commitments.

4 unchanged sentences

Quantitative and Qualitative Disclosures About Market Risk.

There have been no material changes in our market risk during the twenty-six weeks ended August 2, 2025 compared to the disclosures in Part II, Item 7A of our Annual Report on Form 10-K for the fiscal year ended February 1, 2025 .

There have been no material changes in our market risk during the thirty-nine weeks ended November 1, 2025 compared to the disclosures in Part II, Item 7A of our Annual Report on Form 10-K for the fiscal year ended February 1, 2025 .

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 1. Financial Statements