What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2026-03-30 compared with 2025-03-24 · 252 added, 338 removed, 676 unchanged (47% of the section changed)

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We have audited the accompanying consolidated balance sheets of Designer Brands Inc.

and subsidiaries (the "Company") as of February 1, 2025 and February 3, 2024, the related consolidated statements of operations, comprehensive income (loss), shareholders' equity, and cash flows, for each of the three years in the period ended February 1, 2025, and the related notes (collectively referred to as the "financial statements").

We also have audited the Company's internal control over financial reporting as of February 1, 2025, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of February 1, 2025 and February 3, 2024, and the results of its operations and its cash flows for each of the three years in the period ended February 1, 2025, in conformity with accounting principles generally accepted in the United States of America.

Also, in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of February 1, 2025, based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO.

and subsidiaries (the "Company") as of January 31, 2026 and February 1, 2025, the related consolidated statements of operations, comprehensive income (loss), shareholders' equity, and cash flows, for each of the three years in the period ended January 31, 2026, and the related notes (collectively referred to as the "financial statements").

We also have audited the Company's internal control over financial reporting as of January 31, 2026, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of January 31, 2026 and February 1, 2025, and the results of its operations and its cash flows for each of the three years in the period ended January 31, 2026, in conformity with accounting principles generally accepted in the United States of America.

Also, in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of January 31, 2026, based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO.

Basis for Opinions

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The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Valuation of U.S.

Retail Segment Inventories – Refer to Note 1 to the financial statements

Valuation of the Retail Segment Inventory Held in the U.S.

– Refer to Note 1 to the financial statements

Critical Audit Matter Description

Retail segment, which includes stores operated in the U.S.

under the DSW Designer Shoe Warehouse banner and its related e-commerce site, accounts for inventory using the retail inventory method and is stated at the lower of cost or market.

DSW Designer Shoe Warehouse ("DSW") banner, included within the Retail Segment, accounts for inventory using the retail inventory method and is stated at the lower of cost or market.

Under the retail inventory method, the valuation of inventories at cost and the resulting gross profits are determined by applying a calculated cost-to-retail ratio to the retail value of inventories.

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• We tested the design and effectiveness of controls over the completeness of estimated inventory markdowns, including management's controls over the valuation of the estimated inventory markdown reserves, and the monitoring of aged inventory.

• We evaluated management's ability to accurately estimate inventory markdowns by comparing estimated inventory markdowns as of February 1, 2025 to subsequent sales of inventory that had been marked down.

• We evaluated management's ability to accurately estimate inventory markdowns by comparing estimated inventory markdowns as of January 31, 2026 to subsequent sales of inventory that had been marked down.

• We observed physical inventory counts throughout the fiscal year, including merchandise designated for markdown.

• We assessed inventory aging as of February 1, 2025, and subsequent sell through of inventory.

• We assessed inventory aging as of January 31, 2026, and subsequent sell through of inventory.

• We tested the amount of estimated inventory markdowns by evaluating management's calculation.

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Interest expense, net ( 45,338 ) ( 45,291 ) ( 32,171 )

Loss on extinguishment of debt and write-off of debt issuance costs — — ( 12,862 )

Non-operating expenses, net ( 192 ) ( 372 ) ( 33 )

Income (loss) before income taxes ( 10,730 ) 40,197 159,524

Income (loss) before income taxes and loss from equity investment 2,234 ( 10,730 ) 40,197

Income tax benefit (provision) ( 6,958 ) 755 ( 10,981 )

Loss from equity investment ( 847 ) — —

Net income (loss) ( 5,571 ) ( 9,975 ) 29,216

Net loss (income) attributable to redeemable noncontrolling interest ( 574 ) ( 154 ) 10

Net income attributable to redeemable noncontrolling interest ( 2,803 ) ( 574 ) ( 154 )

Net income (loss) attributable to Designer Brands Inc.

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Net income (loss) $ ( 5,571 ) $ ( 9,975 ) $ 29,216

Other comprehensive loss-

Foreign currency translation loss ( 5,412 ) ( 289 ) ( 1,733 )

Other comprehensive income (loss) - Foreign currency translation gain (loss) 5,062 ( 5,412 ) ( 289 )

Comprehensive income (loss) ( 509 ) ( 15,387 ) 28,927

Comprehensive loss (income) attributable to redeemable noncontrolling interest ( 574 ) ( 154 ) 10

Comprehensive income attributable to redeemable noncontrolling interest ( 2,803 ) ( 574 ) ( 154 )

Comprehensive income (loss) attributable to Designer Brands Inc.

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CONSOLIDATED BALANCE SHEETS

(in thousands) February 1, 2025 February 3, 2024

(in thousands) January 31, 2026 February 1, 2025

Current assets:

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Shares Class B

Shares Treasury Shares Common Shares Paid in Capital Treasury Shares Retained Earnings (Deficit) Accumulated Other Comprehensive Loss

Shares Treasury Shares Common Shares Paid in Capital Treasury Shares Retained Earnings Accumulated Other Comprehensive Loss

Balance, January 28, 2023 55,921 7,733 32,882 $ 1,018,872 $ ( 662,614 ) $ 81,993 $ ( 5,350 ) $ 432,901

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Foreign currency translation adjustment — — — — — — ( 289 ) ( 289 )

Balance, January 28, 2023 55,921 7,733 32,882 1,018,872 ( 662,614 ) 81,993 ( 5,350 ) 432,901

Net income attributable to Designer Brands Inc.

Balance, February 3, 2024 49,491 7,733 42,560 1,030,765 ( 764,802 ) 98,896 ( 5,639 ) 359,220

Net loss attributable to Designer Brands Inc.

— — — — — ( 10,549 ) — ( 10,549 )

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Stock-based compensation activity 1,851 — — 16,955 — — — 16,955

Repurchase of Class A common shares ( 10,342 ) — 10,342 — ( 68,553 ) — — ( 68,553 )

Dividends paid ($ 0.20 per share)

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Foreign currency translation adjustment — — — — — — 5,062 5,062

Balance, February 1, 2025 40,211 7,733 52,902 $ 1,045,002 $ ( 833,355 ) $ 77,895 $ ( 11,051 ) $ 278,491

Other — — — — 4 — — 4

Balance, January 31, 2026 42,062 7,733 52,902 $ 1,061,957 $ ( 833,351 ) $ 59,869 $ ( 5,989 ) $ 282,486

The accompanying notes are an integral part of the consolidated financial statements.

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Impairment charges 4,419 18,336 4,834

Loss on extinguishment of debt and write-off of debt issuance costs — — 12,862

Other ( 93 ) 1,423 333

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Cash paid for business acquisitions — ( 16,144 ) ( 127,496 )

Equity investment in Le Tigre — — ( 8,228 )

Other ( 1,916 ) 4,362 —

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Payments for borrowings under the Term Loan ( 6,750 ) ( 6,750 ) ( 1,875 )

Payments for borrowings and prepayment premium under Previous Term Loan — — ( 238,196 )

Payments of debt issuance costs — — ( 10,701 )

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Effect of exchange rate changes on cash balances 2,312 ( 1,890 ) 22

Net decrease in cash and cash equivalents ( 4,421 ) ( 9,593 ) ( 15,693 )

Net increase (decrease) in cash and cash equivalents 6,119 ( 4,421 ) ( 9,593 )

Cash and cash equivalents, beginning of period 44,752 49,173 58,766

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Cash paid for interest on debt $ 39,083 $ 40,443 $ 29,564

Cash paid for operating lease liabilities $ 205,226 $ 230,059 $ 222,956

Non-cash investing and financing activities:

Property and equipment purchases not yet paid $ 2,762 $ 5,038 $ 5,056

Operating lease liabilities arising from lease asset additions $ 13,703 $ 22,826 $ 23,496

Net increase to operating lease assets and lease liabilities for modifications $ 133,284 $ 166,992 $ 204,424

Contribution of intangible asset to equity investment $ 2,700 $ — $ —

The accompanying notes are an integral part of the consolidated financial statements.

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Shareholders' Equity

Property and Equipment

Property and Leases

Goodwill and Intangible Assets

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Segment Reporting

Quarterly Financial Data (Unaudited)

Subsequent Events

DESCRIPTION OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES

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("we," "us," "our," and the "Company") is one of the world's largest designers, producers, and retailers of footwear and accessories.

We operate in three reportable segments:

Retail segment, the Canada Retail segment, and the Brand Portfolio segment.

Retail segment operates the DSW Designer Shoe Warehouse ("DSW") banner through its direct-to-consumer stores and e-commerce site in the United States ("U.S.").

The Canada Retail segment operates The Shoe Co., DSW, and Rubino banners through its direct-to-consumer stores and e-commerce sites in Canada.

The Brand Portfolio segment earns revenue from the wholesale of our branded products to retailers and international distributors, the sale of our Vince Camuto, Keds, and Topo brands through direct-to-consumer e-commerce sites, and commissions for serving retailers as the design and buying agent for products under private labels.

On December 13, 2022, we acquired a 79.4 % ownership interest in Topo Athletic LLC ("Topo"), a designer of specialty athletic footwear that sells its Topo branded products at wholesale to retailers and international distributors and through its direct-to-consumer e-commerce site.

The Topo acquisition provides us with expanded capabilities within the athletic footwear market.

On February 4, 2023, we completed the acquisition of the Keds business ("Keds") from Wolverine World Wide, Inc.

This acquisition expanded the reach of our Owned Brands offerings, which refers to those brands that we have rights to sell through ownership or license arrangements, into casual and athleisure footwear in the wholesale and direct-to-consumer e-commerce channels.

Topo and Keds are included within our Brand Portfolio segment.

We operate in two reportable segments:

the Retail segment and the Brand Portfolio segment.

The Retail segment operates the DSW Designer Shoe Warehouse ("DSW") banner through its direct-to-consumer stores and e-commerce sites in the United States ("U.S.") and Canada and The Shoe Co.

and Rubino banners through its direct-to-consumer stores and e-commerce sites in Canada.

The Brand Portfolio segment primarily earns revenue from the wholesale of our exclusive and licensed brands to retailers, our Retail segment, and international distributors and the sale of our Vince Camuto, Keds, and Topo brands through direct-to-consumer e-commerce sites.

On February 4, 2023, we completed the acquisition of the Keds business ("Keds").

This acquisition expanded the reach of our exclusive brands offerings within the Brand Portfolio segment into casual and athleisure footwear in the wholesale and direct-to-consumer e-commerce channels.

On April 8, 2024, we completed the acquisition of Rubino Shoes Inc.

("Rubino"), a retailer of branded footwear, handbags, and accessories that operates Rubino banner stores and an e-commerce site in Quebec, Canada.

The acquisition of Rubino has allowed our Canada Retail segment to expand into the province of Quebec.

The acquisition of Rubino has allowed our Retail segment to expand into the province of Quebec.

Fiscal Year- Our fiscal year ends on the Saturday nearest to January 31.

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Changes in facts and circumstances may result in revised estimates and assumptions, and actual results could differ from these estimates.

Revenue Recognition- Sales from the U.S.

Retail and Canada Retail segments are recognized upon customer receipt of merchandise, net of estimated returns and exclude sales tax.

Revenue Recognition- Sales from the Retail segment are recognized upon customer receipt of merchandise, net of estimated returns and exclude sales tax.

For products shipped directly to our customers, we recognize the sale upon the estimated customer receipt date based on historical delivery transit times.

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Direct-to-consumer online sales are recognized upon the estimated customer receipt date based on historical delivery transit times and are net of estimated returns and exclude sales tax.

Commission income is recognized at the point in time when a customer's freight forwarder takes control of the related merchandise.

Revenue from shipping and handling for direct-to-consumer online sales are recorded in net sales while the related costs are included in cost of sales on the consolidated statements of operations.

Gift Cards- Amounts received from the sale of gift cards are recorded as a liability and are recognized as sales when the cards are redeemed for merchandise.

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Breakage income is recognized over the estimated average redemption period of redeemed gift cards.

Reward Programs- We offer reward programs to our U.S.

Retail and Canada Retail segment customers.

Reward Programs- We offer reward programs to our Retail segment customers.

Members earn points based on their level of spending, as well as for various other activities.

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The deferred liability is reduced and sales are recognized when certificates are redeemed or when points and certificates expire.

Prior Period Reclassifications - Beginning with this 2024 Annual Report on Form 10-K, we changed our financial statement presentation related to expenses associated with distribution and fulfillment and store occupancy for the U.S.

Retail and Canada Retail segments.

These expenses were previously included within cost of sales and are now included within operating expenses in order to present all of our operating segments on a consistent basis.

Prior period reclassifications were made to conform to the current period presentation in the consolidated statements of operations.

For 2023 and 2022, the reclassification resulted in a $ 349.1 million and $ 375.5 million, respectively, decrease to cost of sales and increase to operating expenses.

These reclassifications did not change operating profit, net income attributable to Designer Brands Inc., earnings per share attributable to Designer Brands Inc., or any other consolidated financial statements.

Refer to Note 17, Quarterly Financial Data (Unaudited) , for the quarterly impact to 2024 and 2023.

Cost of Sales- Cost of sales consists primarily of the cost of merchandise sold, including freight and the impact of inventory valuation adjustments, net of estimated returns, and royalty expenses for licensed brands.

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Corporate expenses include expenses related to administration, information technology ("IT"), finance, human resources, legal, real estate, and other shared services performing corporate-level activities.

Interest Expense, net- Interest expense, net, is summarized in the following table:

(in thousands) 2024 2023 2022

Interest expense $ ( 46,439 ) $ ( 32,993 ) $ ( 15,099 )

Interest income 1,148 822 225

$ ( 45,291 ) $ ( 32,171 ) $ ( 14,874 )

Stock-Based Compensation- We recognize compensation expense for awards of restricted stock units ("RSUs") and director stock units based on the fair value on the grant date and on a straight-line basis over the requisite service period for the awards that are expected to vest, with forfeitures estimated based on our historical experience and future expectations.

Stock-based compensation is included in operating expenses on the consolidated statements of operations.

Chief Executive Officer Transition- In January 2023, we announced our succession process relating to the Company's Chief Executive Officer ("CEO") role, whereby our former CEO, Roger Rawlins, stepped down from his role as CEO and as a member of the Board of Directors (the "Board") effective April 1, 2023, at which time, Doug Howe, who previously served as Executive Vice President of the Company and President of DSW, assumed the CEO role and joined the Board.

In conjunction with the CEO transition, we recorded $ 8.1 million of CEO transition costs consisting of $ 2.2 million in severance costs, $ 2.8 million in accelerated stock-based compensation (net of stock awards forfeited), and $ 3.1 million in retention stock awards to certain members of our leadership team and other related professional fees.

During 2023 and 2022, we recognized CEO transition costs of $ 4.4 million and $ 3.7 million, respectively, in operating expenses on the consolidated statements of operations.

There were no CEO transition costs for 2024.

Chief Executive Officer Transition- In 2023, we completed the transition of the Company's Chief Executive Officer ("CEO") role.

During 2023, we recognized CEO transition costs of $ 4.4 million in operating expenses on the consolidated statements of operations.

There were no CEO transition costs for 2024 and 2025.

Severance- During 2025, 2024 and 2023, we incurred severance costs, excluding the severance related to the CEO transition, of $ 9.8 million, $ 5.8 million and $ 5.1 million, respectively.

These costs are included in operating expenses on the consolidated statements of operations and no amounts were material to any individual reportable segment.

As of February 1, 2025 and February 3, 2024, we had $ 1.3 million and $ 3.9 million, respectively, of severance liability included in accrued expenses on the consolidated balance sheets.

As of January 31, 2026 and February 1, 2025, we had $ 5.8 million and $ 1.3 million, respectively, of severance liability included in accrued expenses on the consolidated balance sheets.

Marketing Expense- The cost of advertising is generally expensed when the advertising first takes place or when mailed.

During 2025, 2024 and 2023, marketing costs were $ 163.7 million, $ 173.0 million and $ 176.4 million, respectively.

Income Taxes- We account for income taxes under the asset and liability method.

Income Tax es- We account for income taxes under the asset and liability method.

We determine the aggregate amount of income tax expense to accrue and the amount that will be currently payable based upon tax statutes of each jurisdiction in which we do business.

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Although we believe that these estimates are reasonable, actual results could differ from these estimates.

On July 4, 2025, new U.S.

tax legislation H.R.1, referred to as the One Big Beautiful Bill ("OBBB"), was signed into law.

OBBB contains several changes to corporate taxation including accelerated fixed asset depreciation, limitations on deductions of interest expense, and modifications to capitalization of research and development expenses.

We have determined that the impact of OBBB on our 2025 annual effective tax rate did not have a material impact on our financial statements.

Cash and Cash Equivalents- Cash and cash equivalents represent cash, money market funds, and credit card receivables that generally settle within three days.

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We have a 40 % ownership interest in ABG-Camuto, LLC ("ABG-Camuto"), a joint venture that owns the intellectual property rights of Vince Camuto and other brands, and a 33.3 % ownership interest in Le Tigre 360 Global LLC ("Le Tigre"), which manages the Le Tigre brand.

On July 28, 2025, we contributed cash of $ 1.9 million and the Pro-Keds tradename at a fair value of $ 2.7 million in exchange for a 45.0 % interest in Pro-Keds International S.r.l.

("Pro-Keds JV"), which manages the Pro-Keds brand.

We account for our investments in ABG-Camuto, Le Tigre, and Pro-Keds JV using the equity method.

Our equity investments in ABG-Camuto and Le Tigre are an integral part of the Brand Portfolio segment.

The following table presents activity related to our equity investments:

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Balance at beginning of period $ 56,761 $ 62,857 $ 63,820

Investment in Le Tigre — — 8,228

Investment in Pro-Keds JV 4,616 — —

Impairment of Le Tigre equity investment — ( 6,987 ) —

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Balance at end of period $ 56,260 $ 56,761 $ 62,857

During 2024, we recorded an impairment charge of our ownership interest in Le Tigre resulting in no remaining value due to the inability of Le Tigre to generate earnings with expected future losses.

During 2025, we recorded an impairment charge of $ 2.0 million of an equity security without a readily determinable fair value held at cost, which resulted in no remaining value due to the lack of liquidity and the deterioration in the business prospects of the investee.

During 2024, we recorded an impairment charge of $ 7.0 million of our ownership interest in the Le Tigre equity investment resulting in no remaining value due to the inability of Le Tigre to generate earnings with expected future losses.

Receivables, net - Receivables are classified as current assets because the average collection period is generally shorter than one year.

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Inventories- All of our inventory is made up of finished goods.

Retail segment inventory is accounted for using the retail inventory method and is stated at the lower of cost or market.

Inventory in the Retail segment held in the U.S.

is accounted for using the retail inventory method and is stated at the lower of cost or market.

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As a result, earnings are negatively impacted as the merchandise is marked down prior to sale.

The Canada Retail segment and the Brand Portfolio segment inventory is accounted for using the moving average cost method and is stated at the lower of cost or net realizable value.

Inventory in the Retail segment held in Canada and in the Brand Portfolio segment is accounted for using the moving average cost method and is stated at the lower of cost or net realizable value.

We monitor aged inventory for obsolete and slow-moving inventory that may need to be liquidated in the future at amounts below cost.

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All of the products manufactured through the Brand Portfolio segment come from third-party facilities outside of the U.S., with 60 % of units sourced from China during 2025.

In addition to the merchandise sourced through our Brand Portfolio segment, our U.S.

Retail and Canada Retail segments also source merchandise from domestic third-party suppliers with many of these suppliers importing a large portion of their merchandise from China.

We are also subject to risks due to the concentration of suppliers within the U.S.

Retail and Canada Retail segments.

During 2024, three key national brand suppliers together supplied approximately 25 % of our retail merchandise, with no individual supplier providing more than 10% of our retail merchandise.

In addition to the merchandise sourced through our Brand Portfolio segment, our Retail segment also sources merchandise from third-party suppliers with many of these suppliers importing a large portion of their merchandise from China.

We are also subject to risks due to the concentration of suppliers within the Retail segment.

During 2025, three key national brand suppliers together supplied approximately 24 % of our Retail segment merchandise, with no individual supplier providing more than 10% of our Retail segment merchandise.

Financial instruments, which principally subject us to concentration of credit risk, consist of cash and cash equivalents.

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The carrying value of borrowings under our senior secured asset-based revolving credit facility ("ABL Revolver") and our senior secured term loan credit agreement, as amended, ("Term Loan") approximated fair value based on the terms and variable interest rates.

Property and Equipment, net- Property and equipment, net, are stated at cost less accumulated depreciation determined by the straight-line method over the expected useful life of assets.

Property and Equipment, net- Property and equipment, net, is stated at cost less accumulated depreciation determined by the straight-line method over the expected useful life of assets.

The net book value of property or equipment sold or retired is removed from the asset and related accumulated depreciation accounts with any resulting net gain or loss included in results of operations.

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Capitalized implementation costs are amortized, once the implementation is complete, over the term of the service contract to operating expenses on the consolidated statements of operations.

As of February 1, 2025 and February 3, 2024, we had $ 21.3 million and $ 16.4 million, respectively, of unamortized capitalized costs, and $ 7.5 million and $ 4.5 million, respectively, of accumulated amortization related to the capitalized costs.

As of January 31, 2026 and February 1, 2025, we had $ 22.5 million and $ 21.3 million, respectively, of unamortized capitalized costs, and $ 13.3 million and $ 7.5 million, respectively, of accumulated amortization related to the capitalized costs.

During 2025, 2024 and 2023, we had amortization expense related to capitalized costs of $ 7.3 million, $ 5.2 million and $ 2.4 million, respectively.

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Fair value at the store level is primarily based on projected discounted cash flows over the remaining lease term.

During 2024, we recorded impairment charges of $ 9.4 million due to a vacated leased corporate office and other corporate assets, $ 1.3 million due to two underperforming Canada Retail segment stores, and $ 0.6 million due to an underperforming U.S.

Retail segment store.

During 2023, we recorded impairment charges of $ 4.8 million, primarily due to a vacated leased space.

During 2022, we recorded impairment charges of $ 4.3 million, primarily resulting from subleases of vacated leased spaces.

During 2025, we recorded impairment charges to long-lived assets of $ 2.4 million due to underperforming stores in the Retail segment.

During 2024, we recorded impairment charges of $ 9.4 million due to a vacated leased corporate office and other corporate assets, and $ 1.9 million due to underperforming Retail segment stores.

During 2023, we recorded impairment charges of $ 4.8 million, primarily due to a vacated corporate leased space.

Goodwill and Other Indefinite-Lived Intangible Assets- We evaluate goodwill and other indefinite-lived intangible assets for impairment annually during our fourth quarter, or more frequently if an event occurs or circumstances change that would indicate that impairment may exist.

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We have purchased stop loss insurance to limit our exposure on a per person basis for health and welfare and on a per claim basis for workers' compensation and general liability, as well as on an aggregate annual basis.

Redeemable noncontrolling interest- We have an exclusive call option and the noncontrolling interest holders have a put option with respect to our purchase of the remaining 20.6 % ownership interest in Topo upon the occurrence of certain events or after a period of three years following the transaction close on December 13, 2022.

The redemption price is based on the future performance of Topo.

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Balance at beginning of period $ 3,284 $ 3,288 $ 3,155

Acquisition fair value of redeemable noncontrolling interest — — 3,165

Net income (loss) attributable to redeemable noncontrolling interest 574 154 ( 10 )

Net income attributable to redeemable noncontrolling interest 2,803 574 154

Distributions attributable to redeemable noncontrolling interest ( 813 ) ( 578 ) ( 21 )

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Transaction gains and losses are included in non-operating expenses, net, on the consolidated statements of operations.

Deferred Compensation Plans - We provide deferred compensation plans, including defined contribution plans, to eligible associates and a non-qualified deferred compensation plan for certain executives and members of the Board.

Participants may elect to defer and contribute a portion of their eligible compensation to the plans up to limits stated in the plan documents, not to exceed the dollar amounts set by applicable laws.

Deferred Compensation Plans - We provide defined contribution plans to eligible associates where participants may elect to defer and contribute a portion of their eligible compensation to the plans up to limits stated in the plan documents, not to exceed the dollar amounts set by applicable laws.

During 2025, 2024 and 2023, we recognized costs associated with matching contributions of $ 7.2 million, $ 7.0 million and $ 6.9 million, respectively.

Recently Issued Accounting Pronouncements- In November 2023, the Financial Accounting Standards Board (the "FASB") issued Accounting Standards Update ("ASU") 2023-07, Improvements to Reportable Segment Disclosures , which updates reportable segment disclosure requirements including, among other things, enhanced disclosures about significant segment expenses and information used to assess segment performance.

In this 2024 Annual Report on Form 10-K, we adopted ASU 2023-07 on a retrospective basis.

Refer to Note 16, Segment Reporting .

In November 2024, the FASB issued ASU 2024-03, Income Statement Expense Disaggregation Disclosures, which requires disaggregated disclosures for specific cost and expense categories such as inventory purchases, employee compensation, depreciation, and amortization, as well as other disclosures.

Recently Issued Accounting Pronouncements- In November 2024, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2024-03, Income Statement Expense Disaggregation Disclosures, which requires disaggregated disclosures for specific cost and expense categories such as inventory purchases, employee compensation, depreciation, and amortization, as well as other disclosures.

ASU 2024-03 is effective either on a retrospective basis to all prior periods presented or on a prospective basis beginning with our 2027 Annual Report on Form 10-K and subsequent interim periods.

We are currently evaluating the impact of adopting ASU 2024-03 to the notes of the consolidated financial statements.

ACQUISITION OF KEDS

On February 4, 2023, we acquired Keds, including the Keds brand, inventory, and inventory-related accounts payable.

The cash consideration was funded with available cash and borrowings on the ABL Revolver.

The final purchase price and the allocation of the total consideration to the fair values of the assets and liabilities was finalized as of February 3, 2024, and consisted of the following:

(in thousands) Final Purchase Price and Allocation

Purchase price:

Cash consideration $ 127,304

Due from Seller for estimated contingent consideration ( 8,899 )

Fair value of assets and liabilities acquired:

Inventories $ 42,516

Goodwill 25,776

Intangible assets 53,500

Accounts payable ( 3,387 )

The purchase price was subject to adjustments primarily based upon estimated contingent considerations as provided by the purchase agreement, which were based on recognized sales and incurred marketing costs for certain identified aged inventories.

We recorded an estimated amount due from Seller at fair value based on our estimated probability of the conditions being met requiring payment.

Changes to the estimated amount due from Seller after we have finalized the purchase price were recorded to earnings and were immaterial.

The fair value of inventories, which were made up of finished goods, was determined based on market assumptions for realizing a reasonable profit after selling costs.

The fair value of the intangible assets relates to $ 46.9 million of an indefinite-lived tradename and $ 6.6 million of customer relationships, which is amortized over a useful life of 10 years, and are based on the excess earnings method under the income approach, with the relief from royalty method for the tradename.

The fair value measurements were based on significant unobservable inputs, including discounted future cash flows, market-based assumed royalty rates, and customer attrition rates.

The goodwill, included within the Brand Portfolio segment, represents the excess of the purchase price over the fair value of the net assets acquired and was primarily attributable to acquiring an established design and sourcing process for casual footwear, including kids' footwear, with international distribution.

Goodwill is not expected to be deductible for income tax purposes.

In September 2025, the FASB issued ASU 2025-06, Intangibles - Goodwill and Other - Internal Use Software (Subtopic 350-40):

Targeted Improvements to the Accounting for Internal-Use Software, which eliminates accounting consideration of software project development stages and instead requires capitalization to begin when management authorizes and commits to funding the project and it is probable the software will be completed and used as intended.

ASU 2025-06 is effective for us in the first quarter of 2028 and early adoption is permitted either on a retrospective, prospective, or modified prospective approach.

We are currently evaluating the impact of ASU 2025-06 on the consolidated financial statements and related disclosures.

ACQUISITION OF RUBINO

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Based on Rubino's projected performance, we have estimated at fair value no contingent consideration to be recorded.

The final purchase price and the allocation of the total consideration to the fair values of the assets and liabilities consisted of the following:

(in thousands) Preliminary Purchase Price and Allocation as of April 8, 2024 Measurement Period Adjustments Final Purchase Price and Allocation as of November 2, 2024

Purchase Price:

Cash consideration $ 16,674 $ ( 530 ) $ 16,144

Contingent consideration 1,472 ( 1,472 ) —

$ 18,146 $ ( 2,002 ) $ 16,144

The final purchase price and the allocation of the total consideration to the fair values of the assets and liabilities was finalized as of November 2, 2024, and consisted of the following:

(in thousands) Final Purchase Price and Allocation

Purchase price cash consideration $ 16,144

Fair value of assets and liabilities acquired:

6 unchanged sentences

Operating lease liabilities ( 9,334 )

$ 18,146 $ ( 2,002 ) $ 16,144

The fair value of the intangible asset relates to an indefinite-lived tradename and was estimated using the relief from royalty method of the income approach.

1 unchanged sentence

The fair value of the operating lease assets was determined based on the market valuation approach.

The goodwill, included within the Canada Retail segment, represents the excess of the purchase price over the fair value of the net assets acquired and was primarily attributable to acquiring an established retail banner in a province in Canada we did not previously have a presence in.

Goodwill is not expected to be deductible for income tax purposes.

The results of operations for Rubino for 2024 were not material and are included in the consolidated statements of operations within the Canada Retail segment.

Supplemental pro forma results of operations reflecting the acquisition are not presented as the impact on our consolidated financial results would not have been material.

The goodwill, included within the Retail segment, represents the excess of the purchase price over the fair value of the net assets acquired and was primarily attributable to acquiring an established retail banner in a province in Canada we did not previously have a presence in.

Goodwill is not deductible for income tax purposes.

DISAGGREGATION OF NET SALES

Beginning with this 2024 Annual Report on Form 10-K, we changed the presentation of disaggregation of net sales for all periods presented to include net sales by product and service categories with an athletic footwear category and excluded the previously presented disaggregation of net sales by brand categories.

This change aligns with how management of the Company evaluates the net sales performance of our segments.

The following table presents net sales disaggregated by product and service categories for each segment:

The following table presents net sales disaggregated by product and service categories for the Retail segment and sales channel for the Brand Portfolio segment:

(in thousands) 2025 2024 2023

7 unchanged sentences

2,656,809 2,749,124 2,798,078

Canada Retail segment:

Non-athletic footwear:

Women's 114,008 111,233 115,424

Men's 42,215 42,168 45,769

Kids' 19,619 17,256 20,279

Athletic footwear 96,839 83,496 90,319

Accessories and other 10,342 10,076 11,450

283,023 264,229 283,241

Brand Portfolio segment:

1 unchanged sentence

Direct-to-consumer 45,058 57,610 65,724

Commission income and other 5,685 11,597 12,988

Other 4,779 5,685 11,597

362,861 398,881 348,976

1 unchanged sentence

Elimination of intersegment sales ( 126,999 ) ( 138,743 ) ( 72,078 )

Total net sales $ 3,009,262 $ 3,074,976 $ 3,315,428

$ 2,892,671 $ 3,009,262 $ 3,074,976

DEFERRED REVENUE LIABILITIES

We record deferred revenue liabilities, included in accrued expenses on the consolidated balance sheets, for remaining obligations we have to our customers.

The following table presents the changes and total balances for gift cards and reward programs:

The following table presents the activity related to gift cards and reward programs:

(in thousands) 2025 2024 2023

Beginning of period $ 31,662 $ 35,121 $ 36,783

Balance at beginning of period $ 28,963 $ 31,662 $ 35,121

Gift cards redeemed and breakage recognized to net sales ( 59,361 ) ( 62,379 ) ( 66,466 )

Gift cards issued 58,128 59,680 63,007

End of period $ 28,963 $ 31,662 $ 35,121

Balance at end of period $ 27,730 $ 28,963 $ 31,662

Reward programs:

Beginning of period $ 15,971 $ 16,900 $ 15,736

Balance at beginning of period $ 14,126 $ 15,971 $ 16,900

Reward certificates redeemed and expired and other adjustments recognized to net sales ( 26,451 ) ( 30,326 ) ( 31,712 )

Deferred revenue for reward points issued 25,170 28,481 30,783

End of period $ 14,126 $ 15,971 $ 16,900

Balance at end of period $ 12,845 $ 14,126 $ 15,971

CUSTOMER RETURNS AND ALLOWANCES

2 unchanged sentences

Customer returns and allowances are estimated based on anticipated future activity using historical experience and trends and existing arrangements with customers.

The following table presents the changes and total balances for customer returns and allowances:

The following table presents the activity related to customer returns and allowances:

(in thousands) 2025 2024 2023

Beginning of period $ 19,569 $ 19,337 $ 20,671

Balance at beginning of period $ 18,053 $ 19,569 $ 19,337

Net sales reduced for estimated returns and allowances 435,225 477,516 489,375

Actual returns and allowances during the period ( 436,984 ) ( 479,032 ) ( 489,143 )

End of period $ 18,053 $ 19,569 $ 19,337

As of February 1, 2025 and February 3, 2024, the asset for recovery of merchandise returns was $ 8.9 million and $ 10.0 million, respectively, and is included in prepaid expenses and other current assets on the consolidated balance sheets.

Balance at end of period $ 16,294 $ 18,053 $ 19,569

As of January 31, 2026 and February 1, 2025, the asset for recovery of merchandise returns was $ 7.9 million and $ 8.9 million, respectively, and is included in prepaid expenses and other current assets on the consolidated balance sheets.

RELATED PARTY TRANSACTIONS

2 unchanged sentences

Schottenstein, the executive chairman of our Board, and members of his family (the "Schottenstein Affiliates").

As of February 1, 2025, the Schottenstein Affiliates beneficially owned approximately 31 % of the Company's outstanding common shares, representing approximately 67 % of the combined voting power, consisting of, in the aggregate, 7.2 million Class A common shares and 7.7 million Class B common shares.

As of January 31, 2026, the Schottenstein Affiliates beneficially owned approximately 30 % of the Company's outstanding common shares, representing approximately 66 % of the combined voting power, consisting of, in the aggregate, 7.4 million Class A common shares and 7.7 million Class B common shares.

The following summarizes the related party transactions with the Schottenstein Affiliates for the relevant periods:

Leases- We lease certain store and office locations that are owned by the Schottenstein Affiliates.

We also leased a fulfillment center from a Schottenstein Affiliate through September 2022 that was not renewed.

See Note 13 , Leases , for rent expense and future minimum lease payment requirements associated with the Schottenstein Affiliates.

Operating and Variable Leases- We lease certain store and office locations that are owned by the Schottenstein Affiliates under operating and variable leases.

See Note 9 , Property and Leases , for rent expense and future minimum lease payment requirements associated with the Schottenstein Affiliates.

Other Purchases and Services- During 2025, 2024 and 2023, we had other purchases and services we incurred from the Schottenstein Affiliates of $ 1.4 million, $ 2.8 million and $ 2.7 million, respectively.

Due to Related Parties- Amounts due to the Schottenstein Affiliates, other than operating lease liabilities, were immaterial for all periods presented.

Amounts Due to Related Parties - Amounts due to the Schottenstein Affiliates, other than operating lease liabilities, were immaterial for all periods presented.

We have a 40.0 % ownership interest in ABG-Camuto.

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Diluted earnings per share reflects the potential dilution of common shares adjusted for outstanding stock-based compensation awards calculated using the treasury stock method.

The following is a reconciliation between basic and diluted weighted average shares outstanding, as used in the calculation of earnings (loss) per share attributable to Designer Brands Inc.:

The following is a reconciliation between basic and diluted weighted average shares outstanding, as used in the calculation of earnings (loss) per share attributable to Designer Brands Inc., and the anti-dilutive shares excluded from the calculation of diluted earnings (loss) per share attributable to Designer Brands Inc.:

(in thousands) 2025 2024 2023

4 unchanged sentences

49,136 53,657 63,375

For 2024, 2023 and 2022, the number of shares relating to potentially dilutive stock-based compensation awards that were excluded from the computation of diluted earnings (loss) per share due to their anti-dilutive effect was 5.3 million, 2.6 million and 2.9 million, respectively.

Anti-dilutive shares 5,358 5,304 2,646

STOCK-BASED COMPENSATION

3 unchanged sentences

The maximum number of shares of Class A common shares underlying awards that may be issued over the term of the Plan cannot exceed 43.5 million shares.

As of February 1, 2025, 29.6 million Class A common shares remain available for future stock-based compensation grants under the Plan.

As of January 31, 2026, 23.9 million Class A common shares remain available for future stock-based compensation grants under the Plan.

During 2025, 2024 and 2023, we recorded stock-based compensation expense of $ 19.0 million, $ 18.7 million and $ 29.4 million, respectively.

3 unchanged sentences

The grant date fair value of RSUs is based on the closing market price of the Class A common shares on the date of the grant.

The following table summarizes the RSU activity for 2024:

The following table presents activity related to RSUs for 2025:

Time-Based RSUs Performance-Based RSUs

(shares in thousands) Number of Shares Weighted Average Grant Date Fair Value Number of Shares Weighted Average Grant Date Fair Value

Outstanding - beginning of period 4,383 $ 11.31 1,236 $ 11.26

Outstanding at beginning of period 4,743 $ 10.57 1,013 $ 11.75

Granted 6,638 $ 4.10 904 $ 4.05

1 unchanged sentence

Forfeited ( 1,739 ) $ 6.18 ( 564 ) $ 6.55

Outstanding - end of period 4,743 $ 10.57 1,013 $ 11.75

Outstanding at end of period 8,409 $ 5.98 1,084 $ 7.47

The total fair value of time-based RSUs that vested during 2025, 2024 and 2023, was $ 16.3 million, $ 14.2 million and $ 35.5 million, respectively.

As of February 1, 2025, the total compensation cost related to unvested time-based RSUs not yet recognized was $ 16.9 million, with a weighted average expense recognition period remaining of 1.7 years.

As of January 31, 2026, the total compensation cost related to unvested time-based RSUs not yet recognized was $ 15.8 million, with a weighted average expense recognition period remaining of 1.7 years.

The total fair value of performance-based RSUs that vested during 2025, 2024 and 2023 was $ 3.8 million, $ 4.4 million and $ 4.6 million, respectively.

As of February 1, 2025, the total compensation cost related to unvested performance-based RSUs not yet recognized was approximately $ 0.2 million, with a weighted average expense recognition period remaining of less than one year .

As of January 31, 2026, the total compensation cost related to unvested performance-based RSUs not yet recognized was approximately $ 2.0 million, with a weighted average expense recognition period remaining of 1.8 years.

DIRECTOR STOCK UNITS

3 unchanged sentences

Director stock units vest immediately, and directors are given the option to settle their units 30 days after the grant date, at a specified date more than 30 days following the grant date, or defer receipt until completion of board service.

Director stock

units not yet settled, which are not subject to forfeiture, are considered to be outstanding for the purposes of computing basic earnings per share.

As of February 1, 2025, we had 0.7 million director stock units not yet settled.

Director stock units not yet settled, which are not subject to forfeiture, are considered to be outstanding for the purposes of computing basic earnings per share.

As of January 31, 2026, we had 1.1 million director stock units not yet settled.

SHAREHOLDERS' EQUITY

3 unchanged sentences

The following table provides additional information for our common shares:

(in thousands) February 1, 2025 February 3, 2024

(in thousands) January 31, 2026 February 1, 2025

Class A Class B Class A Class B

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We have authorized 100 million shares of no par value preferred shares, with no shares issued for any of the periods presented.

On March 13, 2025, the Board declared a quarterly cash dividend payment of $ 0.05 per share for both Class A and Class B common shares.

The dividend will be paid on April 11, 2025 to shareholders of record as of the close of business on March 28, 2025.

SHARE REPURCHASES

On August 17, 2017, the Board authorized the repurchase of an additional $ 500.0 million of Class A common shares under our share re purchase program, which was added to the $ 33.5 million remaining from the previous authorization.

During 2024, we repurchased 10.3 million Class A common shares at an aggregate cost of $ 68.6 million.

As of February 1, 2025, $ 19.7 million of Class A common shares remained available for repurchase under the share repurchase program.

The share repurchase program may be suspended, modified, or discontinued at any time, and we have no obligation to repurchase any amount of our Class A common shares under the program.

Under the share repurchase program, shares will be repurchased in the open market at times and in amounts considered appropriate based on price and market conditions.

Receivables, net, consisted of the following:

(in thousands) February 1, 2025 February 3, 2024

(in thousands) January 31, 2026 February 1, 2025

Customer accounts receivables:

1 unchanged sentence

Receivables without payment guarantee 14,101 11,213

Income tax receivable — 44,476

Other receivables 23,417 14,579

3 unchanged sentences

Activity for the allowance for credit losses was immaterial for all periods presented.

PROPERTY AND LEASES

PROPERTY AND EQUIPMENT

Property and equipment, net, consisted of the following:

(dollars in thousands) Useful Life (years) February 1, 2025 February 3, 2024

(dollars in thousands) Useful Life (years) January 31, 2026 February 1, 2025

Land Indefinite $ 1,110 $ 1,110

6 unchanged sentences

209,598 203,415

Finance leased equipment 3 - 10 or the lease term if shorter

Construction-in-progress 6,547 11,222

2 unchanged sentences

$ 213,291 $ 208,199

We lease our stores, our distribution center located in New Jersey, and other facilities under operating lease arrangements with unrelated parties and related parties owned by the Schottenstein Affiliates.

We pay variable amounts for certain lease and non-lease components, contingent rent based on sales for certain leases where the sales are in excess of specified levels, and leases that have certain contingent triggering events that are in effect.

We also lease equipment under operating leases.

We receive operating sublease income from unrelated third parties for leasing portions or all of certain properties.

In addition, during 2025, we commenced operations of a new distri bution center, which resulted in an additional operating lease of $ 22.4 million and additional finance leases for equipment of $ 32.8 million.

The following table presents the classification and amounts for operating and finance leases on the consolidated balance sheets:

(in thousands) Classification January 31, 2026 February 1, 2025

Operating lease assets Operating lease assets $ 675,648 $ 701,621

Finance lease assets Property and equipment, net $ 29,521 $ —

Operating lease liabilities Current operating lease liabilities $ 175,515 $ 159,924

Finance lease liabilities Accrued expenses $ 2,946 $ —

Operating lease liabilities Non-current operating lease liabilities $ 596,587 $ 635,076

Finance lease liabilities Other non-current liabilities $ 27,845 $ —

Lease expense, net, includes the following:

(in thousands) 2025 2024 2023

Operating lease expense:

Unrelated parties $ 202,515 $ 191,134 $ 190,497

Related parties 5,645 5,727 6,622

Variable lease expense:

Unrelated parties 62,080 67,822 69,324

Related parties 1,366 1,503 1,460

Finance lease expense:

Amortization of leased assets 3,315 — —

Interest on lease liabilities 2,593 — —

Operating sublease income ( 1,846 ) ( 5,636 ) ( 7,916 )

Total lease expense, net $ 275,668 $ 260,550 $ 259,987

Lease term and discount rate for our leases were as follows:

January 31, 2026 February 1, 2025

Weighted-average remaining lease term (years):

Operating leases 5.3 5.8

Finance leases 8.7 —

Weighted-average discount rate:

Operating leases 6.3 % 5.9 %

Finance leases 9.0 % — %

As of January 31, 2026, our future f ixed minimum lease payments are as follows:

Operating Leases

(in thousands) Unrelated Parties Related Parties Total Finance Leases

2026 $ 208,370 $ 5,054 $ 213,424 $ 5,818

2027 186,994 4,899 191,893 5,370

2028 146,755 3,232 149,987 5,091

2029 108,351 1,812 110,163 5,041

2030 75,627 1,065 76,692 4,749

Future fiscal years thereafter 187,358 2,392 189,750 18,527

913,455 18,454 931,909 44,596

Less discounting impact on leases ( 157,064 ) ( 2,743 ) ( 159,807 ) ( 13,805 )

Total lease liabilities 756,391 15,711 772,102 30,791

Less current lease liabilities ( 171,008 ) ( 4,507 ) ( 175,515 ) ( 2,946 )

Non-current lease liabilities $ 585,383 $ 11,204 $ 596,587 $ 27,845

As of January 31, 2026, we had entered into lease commitments for ten new store locations and one store relocation, where the leases have not yet commenced, and therefore the lease liabilities have not yet been recorded .

We anticipate recording additional operating lease liabilities of approximately $ 15.0 million for these lease commitments, with approximately $ 11.0 million in 2026 and the remaining in 2027.

The following table presents supplemental cash flow information related to leases:

(in thousands) 2025 2024 2023

Cash paid for lease liabilities:

Operating cash flows for operating leases $ 199,961 $ 205,226 $ 230,059

Operating cash flows for finance leases $ 2,363 $ — $ —

Financing cash flows for finance leases $ 2,045 $ — $ —

Non-cash activities:

Operating lease liabilities arising from lease asset additions $ 42,923 $ 13,703 $ 22,826

Finance lease liabilities arising from lease asset additions $ 32,836 $ — $ —

Net increase to operating lease assets and lease liabilities for modifications $ 84,189 $ 133,284 $ 166,992

GOODWILL AND INTANGIBLE ASSETS

The following table presents the changes to goodwill by segment:

(in thousands) February 1, 2025 February 3, 2024

The following table presents activity related to goodwill by segment:

(in thousands) January 31, 2026 February 1, 2025

Goodwill Accumulated Impairments Net Goodwill Accumulated Impairments Net

Beginning of period by segment:

Balance at beginning of period:

Retail $ 138,297 $ ( 38,015 ) $ 100,282 $ 134,583 $ ( 40,928 ) $ 93,655

Canada Retail 40,928 ( 40,928 ) — 41,357 ( 41,357 ) —

Brand Portfolio 50,093 ( 19,989 ) 30,104 50,093 ( 19,989 ) 30,104

188,390 ( 58,004 ) 130,386 184,676 ( 60,917 ) 123,759

Activity by segment:

Canada Retail:

Retail segment activity:

Acquired Rubino goodwill — — — 7,067 — 7,067

Currency translation adjustment 3,039 ( 2,588 ) 451 ( 3,353 ) 2,913 ( 440 )

Brand Portfolio:

Acquired Keds goodwill — — — 25,776 — 25,776

Other adjustments — — — 868 — 868

3,039 ( 2,588 ) 451 3,714 2,913 6,627

End of period by segment:

Balance at end of period:

Retail 141,336 ( 40,603 ) 100,733 138,297 ( 38,015 ) 100,282

Canada Retail 44,642 ( 38,015 ) 6,627 40,928 ( 40,928 ) —

Brand Portfolio 50,093 ( 19,989 ) 30,104 50,093 ( 19,989 ) 30,104

2 unchanged sentences

Intangible assets, net, consisted of the following:

(in thousands) February 1, 2025 February 3, 2024

(in thousands) January 31, 2026 February 1, 2025

Cost Accumulated Amortization Net Cost Accumulated Amortization Net

4 unchanged sentences

Definite-lived customer relationships and tradenames have a useful life of 10 and 15 years, respectively.

During 2024, 2023 and 2022, amortization expense for intangible assets was $ 1.9 million, $ 1.9 million and $ 0.4 million, respectively, included within operating expenses on the consolidated statements of operations.

As of February 1, 2025, the estimated future annual amortization expense for the intangible assets is $ 1.9 million over the next five years.

During each of 2025, 2024 and 2023, amortization expense for intangible assets was $ 1.9 million and included within operating expenses on the consolidated statements of operations.

As of January 31, 2026, the estimated future annual amortization expense for the intangible assets is $ 1.9 million for each of the next five years.

ACCRUED EXPENSES

Accrued expenses consisted of the following:

(in thousands) February 1, 2025 February 3, 2024

(in thousands) January 31, 2026 February 1, 2025

Gift cards $ 27,730 $ 28,963

6 unchanged sentences

Debt consisted of the following:

(in thousands) February 1, 2025 February 3, 2024

(in thousands) January 31, 2026 February 1, 2025

ABL Revolver $ 319,063 $ 370,090

4 unchanged sentences

Long-term debt $ 428,206 $ 484,285

As of February 1, 2025, future maturities of debt are as follows:

As of January 31, 2026, future maturities of debt are as follows:

(in thousands)

Total $ 496,465

On March 30, 2022, we replaced our previous senior secured asset-based revolving credit facility with our current ABL Revolver, which was subsequently amended on February 28, 2023 and June 23, 2023.

On March 30, 2022, we replaced our previous senior secured asset-based revolving credit facility with our current ABL Revolver, which was subsequently amended on February 28, 2023, June 23, 2023, and February 27, 2026.

The amended ABL Revolver provides a revolving line of credit of up to $ 600.0 million, including a Canadian sub-limit of up to $ 60.0 million, a $ 75.0 million sub-limit for the issuance of letters of credit, a $ 60.0 million sub-limit for swing-loan advances for U.S.

borrowings, and a $ 6.0 million sub-limit for swing-loan advances for Canadian borrowings.

In addition, the ABL Revolver includes a first-in last-out term loan ("FILO Term Loan") of up to $ 30.0 million, which was drawn in full on February 28, 2023.

In addition, the ABL Revolver includes a first-in last-out term loan ("FILO Term Loan") with $ 30.0 million borrowed.

The FILO Term Loan may be repaid in full, but not in part, so long as certain payment conditions are satisfied.

Once repaid, no portion of the FILO Term Loan may be reborrowed.

Our ABL Revolver matures in March 2027 and is secured by a first-priority lien on substantially all of our personal property assets, including credit card receivables and inventory.

Our ABL Revolver is secured by a first-priority lien on substantially all of our personal property assets, including credit card receivables and inventory.

The ABL Revolver may be used to provide funds for working capital, capital expenditures, share repurchases, other expenditures, and permitted acquisitions as defined by the credit facility agreement.

The amount of credit available is limited to a borrowing base formulated on, among other things, a percentage of the book value of eligible inventory and credit card receivables, as reduced by certain reserves.

As of February 1, 2025, the revolving line of credit (excluding the FILO Term Loan) had a borrowing base of $ 471.4 million, with $ 340.1 million in outstanding borrowings and $ 4.0 million in letters of credit issued, resulting in $ 127.3 million available for borrowings.

As of January 31, 2026, the revolving line of credit (excluding the FILO Term Loan) had a borrowing base of $ 394.2 million, with $ 289.1 million in outstanding borrowings and $ 4.0 million in letters of credit issued, resulting in $ 101.1 million available for borrowings.

See Note 16, Subsequent Events , for the subsequent changes to the ABL Revolver due to the amendment entered into on February 27, 2026.

Borrowings under the revolving line of credit and letters of credit issued under the ABL Revolver accrue interest, at our option, at a rate equal to:

5 unchanged sentences

Commitment fees are based on the unused portion of the ABL Revolver available for borrowings.

Interest expense related to the ABL Revolver includes interest on borrowings and letters of credit, with an interest rate of 6.7 % as of February 1, 2025, commitment fees, and the amortization of debt issuance costs.

Interest expense related to the ABL Revolver includes interest on borrowings and letters of credit, with an interest rate of 6.1 % as of January 31, 2026, commitment fees, and the amortization of debt issuance costs.

On June 23, 2023, we entered into the Term Loan and have since borrowed the maximum aggregate amount of $ 135.0 million during 2023, consisting of $ 121.5 million in U.S.

loans and $ 13.5 million in Canadian loans (denominated in USD).

The Term Loan matures at the earliest of the date the ABL Revolver matures (currently March 2027) or five years from closing of the Term Loan (June 2028).

The Term Loan is collateralized by a first priority lien on substantially all of our personal, real, and intellectual property and by a second priority lien on the assets used as collateral for the ABL revolver, primarily credit card receivables, accounts receivable, and inventory.

The Term Loan matures at the earliest of the date the ABL Revolver matures or June 2028.

The Term Loan is collateralized by a first-priority lien on substantially all of our real and intellectual property and by a second-priority lien on the assets used as collateral for the ABL revolver, primarily credit card receivables and inventory.

Borrowings under the Term Loan bear interest at a per annum rate equal to:

1 unchanged sentence

or if (A) is not available, then (B) a base rate per annum equal to the greater of (i) 2.0 %, (ii) the prime rate, (iii) the Fed Funds Rate plus 0.5 %, and (iv) the Adjusted Term SOFR plus 1.0 %;

plus, in each instance, 6.0 %, with an interest rate of 11.4 % (effective interest rate of 12.8 % when including the amortization of debt issuance costs) as of February 1, 2025.

plus, in each instance, 6.0 %, with an interest rate of 10.8 % (effective interest rate of 12.1 % when including the amortization of debt issuance costs) as of January 31, 2026.

DEBT COVENANTS

The ABL Revolver requires us to maintain a fixed charge coverage ratio covenant of not less than 1 :1 when availability is less than the greater of $ 47.3 million or 10.0 % of the maximum borrowing amount.

At any time that liquidity is less than $ 100.0 million, the Term Loan requires a maximum consolidated net leverage ratio as of the last day of each fiscal month of 2.50 to 1.00, calculated on a trailing twelve-month basis.

At any time that liquidity is less than $ 100.0 million, the Term Loan requires the consolidated net leverage ratio to be no greater than 2.50 to 1.00, calculated on a trailing twelve-month basis and measured on the last day of each fiscal month.

Testing of the consolidated net leverage ratio ends after liquidity has been greater than or equal to $ 100.0 million for a period of 45 consecutive days.

The ABL Revolver and the Term Loan also contain customary covenants restricting certain activities, including limitations on our ability to sell assets, engage in acquisitions, enter into transactions involving related parties, incur additional debt, grant liens on assets, pay dividends or repurchase stock, and make certain other changes.

The ABL Revolver and Term Loan also contain customary covenants restricting certain activities, including limitations on our ability to sell assets, engage in acquisitions, enter into transactions involving related parties, incur additional debt, grant liens on assets, pay dividends or repurchase stock, and make certain other changes.

There are specific exceptions to these covenants including, in some cases, upon satisfying specified payment conditions based on availability.

The ABL Revolver and the Term Loan contain customary events of default, including failure to comply with certain financial and other covenants.

Upon an event of default that is not cured or waived within the cure periods, in addition to other remedies that may be available to the lenders, our obligations may be accelerated, outstanding letters of credit may be required to be cash collateralized, and remedies may be exercised against the collateral.

As of February 1, 2025, we were in compliance with all financial covenants contained in the ABL Revolver and the Term Loan.

TERMINATION OF PREVIOUS TERM LOAN

On February 8, 2022, we settled in full the $ 231.3 million principal amount outstanding on that date under our previous senior secured term loan agreement ("Previous Term Loan").

In connection with this settlement, during 2022 we incurred a $ 12.7 million loss on extinguishment of debt, composed of $ 6.9 million prepayment premium and a $ 5.7 million write-off of unamortized debt issuance costs.

We also lease equipment under operating leases.

We receive operating sublease income from unrelated third parties for leasing portions or all of certain properties.

Operating sublease income and lease expense consisted of the following:

(in thousands) 2024 2023 2022

Operating sublease income $ 5,636 $ 7,916 $ 10,077

Operating lease expense:

Lease expense to unrelated parties $ 191,134 $ 190,497 $ 187,372

Lease expense to related parties 5,727 6,622 7,783

Variable lease expense to unrelated parties 67,822 69,324 71,830

Variable lease expense to related parties 1,503 1,460 1,422

$ 266,186 $ 267,903 $ 268,407

Lease term and discount rate for our operating leases were as follows:

February 1, 2025 February 3, 2024

Other operating lease information:

Weighted-average remaining lease term 5.8 years 5.9 years

Weighted-average discount rate 5.9 % 4.9 %

As of February 1, 2025, our future f ixed minimum lease payments are as follows:

(in thousands) Unrelated Parties Related Parties Total

2025 $ 193,893 $ 4,753 $ 198,646

2026 182,810 4,523 187,333

2027 155,263 4,390 159,653

2028 117,533 2,851 120,384

2029 82,893 1,431 84,324

Future fiscal years thereafter 200,084 3,526 203,610

932,476 21,474 953,950

Less discounting impact on operating leases ( 155,374 ) ( 3,576 ) ( 158,950 )

Total operating lease liabilities 777,102 17,898 795,000

Less current operating lease liabilities ( 155,470 ) ( 4,454 ) ( 159,924 )

Non-current operating lease liabilities $ 621,632 $ 13,444 $ 635,076

As of February 1, 2025, we had entered into lease commitments for six new store locations, one store relocation, and one new distribution center where the leases have not yet commenced, and therefore the lease liabilities have not yet been recorded.

We expect the store lease commencements to begin over the next three fiscal quarters for these locations, and we will record additional operating lease liabilities of approximately $ 15.0 million.

As it relates to the new distribution center, the lease for the facility commenced in March 2025 and we recorded an additional operating lease liability of $ 22.4 million in the first quarter of 2025.

We have also entered into lease commitments for the equipment that will be used to operate the distribution center, which also commenced in March 2025, and we recorded additional finance lease liabilities of $ 31.8 million in the first quarter of 2025.

The ABL Revolver and Term Loan contain customary events of default, including failure to comply with certain financial and other covenants.

Upon an event of default that is not cured or waived within the applicable cure period, in addition to other remedies that may be available to the lenders, our obligations may be accelerated, outstanding letters of credit may be required to be cash collateralized, and remedies may be exercised against the collateral.

As of January 31, 2026, we were in compliance with all financial covenants contained in the ABL Revolver and the Term Loan.

COMMITMENTS AND CONTINGENCIES

1 unchanged sentence

We are involved in various legal proceedings that are incidental to the conduct of our business.

Although it is not possible to predict with certainty the eventual outcome of any litigation, we believe the amount of any potential liability with respect to current legal proceedings will not be material to the results of operations or financial condition.

As additional information becomes available, we will assess any potential liability related to pending litigation and revise the estimates as needed.

However, legal proceedings are inherently uncertain.

As a result, the outcome of a particular matter or a combination of matters may be material to our results of operations for a particular period.

We are also involved in certain legal matters in which we have agreed to settlement terms with the plaintiffs, which remain subject to court approval, and such matters are fully covered under our insurance policies and accordingly all associated legal fees and settlement costs will be paid by the insurer.

As a result, we have recorded accrued expenses for the estimated settlement obligations with corresponding receivables on the consolidated balance sheets.

As additional information becomes available, we will assess any potential liabilities related to pending litigation and revise the estimates as needed.

CONTRACTUAL OBLIGATIONS

As of February 1, 2025, we had entered into various noncancelable purchase and service agreements, including agreements with remaining terms in excess of one year and construction commitments for capital items to be purchased for projects that were under construction or for which a lease has been signed.

In addition, we have license agreements that allow us to use brands owned by third parties, including a license agreement with our equity investments (related parties), that have guaranteed minimum royalty payments.

As of February 1, 2025, our noncancelable purchase obligations and future guaranteed minimum royalty payments are as follows:

(in thousands) Noncancelable Purchase Obligations Guaranteed Minimum Royalties

Unrelated Parties Related Parties Total

2025 $ 12,715 $ 16,184 $ 20,225 $ 36,409

As of January 31, 2026, we had entered into various noncancelable purchase and service agreements, including agreements with remaining terms in excess of one year and construction commitments for capital items to be purchased for projects that were under construction or for which a lease has been signed.

In addition, we have license agreements that allow us to use brands owned by third parties, including a license agreement with our related party ABG-Camuto, that have guaranteed minimum royalty payments.

As of January 31, 2026, our noncancelable purchase obligations and future guaranteed minimum royalty payments are as follows:

Noncancelable Purchase Obligations Guaranteed Minimum Royalties

(in thousands) Unrelated Parties Related Parties Total

2026 $ 9,678 $ 14,184 $ 19,650 $ 33,834

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$ 14,077 $ 42,552 $ 58,950 $ 101,502

Income (loss) before income taxes consisted of the following:

Income (loss) before income taxes and loss from equity investment consisted of the following:

(in thousands)

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Foreign 2,134 ( 1,068 ) 1,904

Total current tax expense 3,558 1,857 48,587

( 1,146 ) 3,558 1,857

Federal 4,933 ( 5,314 ) 3,766

1 unchanged sentence

Foreign 749 2,759 ( 4 )

Total deferred tax expense (benefit) ( 4,313 ) 9,124 ( 51,729 )

8,104 ( 4,313 ) 9,124

Income tax provision (benefit) $ 6,958 $ ( 755 ) $ 10,981

The following presents a reconciliation of the income tax provision based on the U.S.

federal statutory tax rate to the total effective tax rate:

The following presents a reconciliation of the income tax provision (benefit) from the U.S.

federal statutory tax rate to the total effective tax rate calculated based on income (loss) before income taxes and loss from equity investment:

(dollars in thousands) 2025 2024 2023

5 unchanged sentences

443 19.8 573 ( 5.3 ) 882 2.2

Changes in valuation allowances — — — — ( 19,408 ) ( 12.2 )

Other 120 5.4 ( 333 ) 3.1 190 0.5

Changes in valuation allowances ( 420 ) 3.9 ( 588 ) ( 1.5 ) ( 28,870 ) ( 18.1 )

Nontaxable or nondeductible items:

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The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and liabilities are as follows:

(in thousands) February 1, 2025 February 3, 2024

(in thousands) January 31, 2026 February 1, 2025

Deferred tax assets:

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Net operating losses 16,416 17,000

Interest 9,706 4,409

Inventories 8,718 8,502

1 unchanged sentence

Accrued expenses 4,189 3,570

Interest 3,143 9,706

Reward programs deferred revenue 2,925 3,288

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Property and equipment ( 7,670 ) ( 11,284 )

Intangible assets ( 4,696 ) ( 1,617 )

Basis in subsidiary ( 4,592 ) ( 4,123 )

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Net deferred tax assets $ 35,882 $ 43,324

As of February 1, 2025, the remaining valuation allowance was primarily related to state deferred tax assets.

Additionally, there were $ 15.0 million state, $ 1.6 million foreign, and $ 0.3 million federal net operating losses, which, if not utilized, a portion of the carryovers will begin to expire in 2025, 2038, and 2036, respectively.

During 2020, a valuation allowance was recognized as a reserve on the total deferred tax asset balance and was maintained until the end of 2022.

This valuation allowance was the result of losses incurred in 2020 due to the impacts of the coronavirus pandemic that resulted in a three-year cumulative loss position, which was significant objective negative evidence in considering whether deferred tax assets were realizable.

During 2022, we released the valuation allowance on the majority of the U.S.

and Canada deferred tax assets given the continued realization of income since 2020, being in a three-year cumulative adjusted earnings position, and having projected future income.

These factors provided sufficient evidence to conclude that it is more likely than not that the majority of the U.S.

and Canada deferred tax assets are realizable.

The following table presents the changes in valuation allowance:

As of January 31, 2026, the remaining valuation allowance was primarily related to state deferred tax assets.

Additionally, there were $ 15.3 million state, $ 0.9 million foreign, and $ 0.2 million federal net operating losses and credits, which, if not utilized, a portion of the carryovers will begin to expire in 2026, 2038 and 2036, respectively.

The following table presents activity related to the valuation allowance:

(in thousands) 2025 2024 2023

Valuation allowance - beginning of period $ 12,131 $ 14,027 $ 70,762

Additions charged to income tax benefit 768 — —

Balance at beginning of period $ 12,478 $ 12,131 $ 14,027

Additions charged to income tax provision (benefit) 1,354 768 —

Allowances taken or written off — — ( 666 )

Other adjustments — ( 421 ) ( 1,230 )

Valuation allowance - end of period $ 12,478 $ 12,131 $ 14,027

Balance at end of period $ 13,832 $ 12,478 $ 12,131

We intend to continue to invest all of the earnings of foreign subsidiaries, as well as our capital in these subsidiaries, outside of

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City of Columbus, Ohio — — 1,005

Foreign 334 307 555

Aggregated foreign jurisdictions 242 334 307

Disaggregated foreign jurisdiction - Canada 1,928 — —

Net cash paid (refunds received) for income taxes

$ ( 419 ) $ ( 61,915 ) $ 17,072

The following table presents the changes in gross unrecognized tax benefits:

The following table presents the activity related to gross unrecognized tax benefits:

(in thousands) 2025 2024 2023

Unrecognized tax benefits - beginning of period $ 16,433 $ 15,785 $ 11,108

Balance at beginning of period $ 10,184 $ 16,433 $ 15,785

Additions for tax positions taken in the current year 450 740 3,042

Reductions for tax positions taken in prior year ( 3,531 ) — —

Reductions for tax positions taken in prior years — ( 3,531 ) —

Changes in estimates — ( 1,388 ) —

1 unchanged sentence

Settlements of tax positions taken in prior years ( 613 ) ( 912 ) ( 71 )

Unrecognized tax benefits - end of period $ 10,184 $ 16,433 $ 15,785

Balance at end of period $ 9,337 $ 10,184 $ 16,433

We recognize interest and penalties related to unrecognized tax benefits as a component of the income tax provision (benefit).

As of February 1, 2025, February 3, 2024 and January 28, 2023, interest and penalties w ere $ 5.6 million, $ 5.6 million, and $ 4.7 million, respectively.

As of January 31, 2026, February 1, 2025 and February 3, 2024, interest and penalties w ere $ 5.8 million, $ 5.6 million and $ 5.6 million, respectively.

SEGMENT REPORTING

Our three reportable segments, which are also operating segments, are the U.S.

Retail segment, the Canada Retail segment, and the Brand Portfolio segment.

Our two reportable segments are the Retail segment and the Brand Portfolio segment.

Beginning with this 2025 Annual Report on Form 10-K, we aggregated our previously reported U.S.

Retail operating segment and Canada Retail operating segment into a single reportable segment, the Retail segment, due to the similar nature of their operations and economic characteristics.

All prior period segment information has been recast to conform to the current reporting segment presentation.

We have determined that the Chief Operating Decision Maker ("CODM") is our CEO and we have identified such segments based on internal management reporting and responsibilities.

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The following table provides certain financial data by segment reconciled to the consolidated financial statements:

(in thousands) U.S.

Retail Canada Retail Brand Portfolio Total

(in thousands) Retail Brand Portfolio Total

External customer sales $ 2,656,809 $ 235,862 $ 2,892,671

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Segment operating profit $ 211,552 $ 10,908 222,460

Net elimination of intersegment activity ( 10,084 )

Corporate shared service costs (2)

Net recognition of intersegment activity 4,894

Corporate shared services costs (2)

Impairment charges (2)

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Non-operating expenses, net ( 192 )

Loss before income taxes $ ( 10,730 )

Income before income taxes and loss from equity investment $ 2,234

Cash paid for segment property and equipment $ 26,429 $ 2,038 $ 28,467

(in thousands) U.S.

Retail Canada Retail Brand Portfolio Total

(in thousands) Retail Brand Portfolio Total

External customer sales $ 2,749,124 $ 260,138 $ 3,009,262

14 unchanged sentences

Plus income from equity investments — 13,145

Segment operating profit (loss) $ 261,675 $ 24,632 $ ( 26,723 ) 259,584

Net recognition of intersegment activity 3,281

Corporate shared service costs (2)

Segment operating profit $ 249,442 $ 3,225 252,667

Net elimination of intersegment activity ( 10,084 )

Corporate shared services costs (2)

Impairment charges (2)

2 unchanged sentences

Non-operating expenses, net ( 372 )

Income before income taxes $ 40,197

Loss before income taxes $ ( 10,730 )

Cash paid for segment property and equipment $ 31,911 $ 2,414 $ 34,325

(in thousands) U.S.

Retail Canada Retail Brand Portfolio Total

(in thousands) Retail Brand Portfolio Total

External customer sales $ 2,798,078 $ 276,898 $ 3,074,976

16 unchanged sentences

Net recognition of intersegment activity 3,281

Corporate shared service costs (2)

Corporate shared services costs (2)

Impairment charges (2)

1 unchanged sentence

Interest expense, net ( 32,171 )

Loss on extinguishment of debt and write-off of debt issuance costs ( 12,862 )

Non-operating expenses, net ( 33 )

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Corporate shared services costs primarily relate to corporate administration, IT, finance, human resources, legal, real estate, and other shared services performing corporate-level activities.

We also do not allocate amounts related to restructuring and integration charges (including severance), CEO transition costs, and acquisition-related costs.

Retail and Brand Portfolio segments net sales recognized were primarily based on sales to customers in the U.S., and the Canada Retail segment net sales recognized were based on sales to customers in Canada.

Net sales realized from geographic markets outside of the U.S.

and Canada were collectively immaterial.

Beginning in 2024, we changed how the Brand Portfolio segment sources certain Owned Brands for the U.S.

Retail segment by transacting using a wholesale model, where intersegment sales and cost of sales are recorded, whereas in 2023 and prior we transacted on a commission model, where intersegment sales were based on a percentage of product cost.

This change results in an increase in Brand Portfolio intersegment net sales, cost of sales, and gross profit and a corresponding increase in the amount of eliminated intersegment net sales, cost of sales, and gross profit with no impact to consolidated net sales, cost of sales, and gross profit.

As of February 1, 2025 and February 3, 2024, long-lived assets, consisting of property and equipment and operating lease assets, included $ 837.6 million and $ 879.2 million, respectively, in the U.S.

We also do not allocate amounts related to restructuring and integration charges (including severance) and acquisition-related costs.

The following table provides net sales by geography:

(in thousands) 2025 2024 2023

United States $ 2,599,401 $ 2,709,443 $ 2,792,593

Canada and other international 293,270 299,819 282,383

$ 2,892,671 $ 3,009,262 $ 3,074,976

Beginning in 2024, we changed how the Brand Portfolio segment sources certain exclusive brands for the Retail segment by transacting using a wholesale model, where intersegment net sales and cost of sales are recorded, whereas in 2023 we transacted on a commission model, where intersegment net sales were based on a percentage of product cost.

This change resulted in an increase in Brand Portfolio intersegment net sales, cost of sales, and gross profit and a corresponding increase in the amount of eliminated intersegment net sales, cost of sales, and gross profit with no impact to consolidated net sales, cost of sales, and gross profit when comparing 2025 and 2024 to 2023.

As of January 31, 2026 and February 1, 2025, long-lived assets, consisting of property and equipment and leased assets, included $ 804.7 million and $ 837.6 million, respectively, in the U.S.

and $ 84.0 million and $ 71.6 million, respectively, in Canada, with only an immaterial amount in other countries.

No single customer accounted for 10% or more of consolidated total net sales.

However, the Brand Portfolio segment has five customers that make up 38 % of its segment net sales, excluding intersegment net sales, and the loss of any or all of these customers could have a material adverse effect on the Brand Portfolio segment.

QUARTERLY FINANCIAL DATA (UNAUDITED)

As discussed in Note 1, Description of Business and Significant Accounting Policies - Prior Period Reclassifications , we reclassified expenses associated with distribution and fulfillment and store occupancy from cost of sales to operating expenses within the consolidated statements of operations.

These reclassifications did not change operating profit, net income (loss) attributable to Designer Brands Inc., or earnings (loss) per share attributable to Designer Brands Inc.

The following tables present the summarized financial information for each of the quarters of 2024 and 2023 as recast for such reclassifications as well as the amounts reclassified:

Three months ended

(in thousands, except per share data) May 4, 2024 August 3, 2024 November 2, 2024 February 1, 2025

Net sales $ 746,596 $ 771,900 $ 777,194 $ 713,572

Cost of sales (1)

( 416,585 ) ( 432,351 ) ( 443,379 ) ( 430,989 )

Gross profit $ 330,011 $ 339,549 $ 333,815 $ 282,583

Operating expenses (1)

$ ( 323,493 ) $ ( 313,531 ) $ ( 296,827 ) $ ( 311,983 )

Operating profit (loss) $ 9,382 $ 28,589 $ 22,816 $ ( 25,854 )

Net income (loss) attributable to Designer Brands Inc.

$ 783 $ 13,824 $ 13,012 $ ( 38,168 )

Earnings (loss) per share attributable to Designer Brands Inc.:

Basic earnings (loss) per share $ 0.01 $ 0.24 $ 0.25 $ ( 0.80 )

Diluted earnings (loss) per share $ 0.01 $ 0.24 $ 0.24 $ ( 0.80 )

(1) Amount reclassified from cost of sales to operating expenses

$ 84,942 $ 86,635 $ 86,370 $ 86,494

Three months ended

(in thousands, except per share data) April 29, 2023 July 29, 2023 October 28, 2023 February 3, 2024

Net sales $ 742,082 $ 792,217 $ 786,329 $ 754,348

Cost of sales (1)

( 418,174 ) ( 430,454 ) ( 440,596 ) ( 461,757 )

Gross profit $ 323,908 $ 361,763 $ 345,733 $ 292,591

Operating expenses (1)

$ ( 306,288 ) $ ( 302,906 ) $ ( 320,115 ) $ ( 326,841 )

Operating profit (loss) $ 19,610 $ 60,687 $ 28,121 $ ( 36,017 )

Net income (loss) attributable to Designer Brands Inc.

$ 11,415 $ 37,204 $ 10,141 $ ( 29,698 )

Earnings (loss) per share attributable to Designer Brands Inc.:

Basic earnings (loss) per share $ 0.18 $ 0.57 $ 0.17 $ ( 0.52 )

Diluted earnings (loss) per share $ 0.17 $ 0.56 $ 0.17 $ ( 0.52 )

(1) Amount reclassified from cost of sales to operating expenses

$ 86,169 $ 88,376 $ 89,327 $ 85,237

However, the Brand Portfolio segment has five customers that make up approximately 38 % of its segment net sales, excluding intersegment net sales, and the loss of any or all of these customers could have a material adverse effect on the Brand Portfolio segment.

SUBSEQUENT EVENTS

ABL Revolver Amendment- On February 27, 2026, the ABL Revolver was amended to, among other things, extend the maturity date such that the ABL Revolver matures at the earliest of the date the Term Loan matures (currently June 2028) or February 2031.

Dividends- On March 12, 2026, the Board declared a quarterly cash dividend payment of $ 0.05 per share for both Class A and Class B common shares.

The dividend will be paid on April 10, 2026 to shareholders of record as of the close of business on March 26, 2026.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

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

What changed 10-K

Item 8. Financial Statements and Supplementary Data