DBI filing — read by section

Item 8. Financial Statements and Supplementary Data

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA 

 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM 
 
 To the shareholders and the Board of Directors of Designer Brands Inc. 
 
 Opinions on the Financial Statements and Internal Control over Financial Reporting 
 
 We have audited the accompanying consolidated balance sheets of Designer Brands Inc. 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 
 
 The Company's management is responsible for these financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management's Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on these financial statements and an opinion on the Company's internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. 
 
 We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects. 
 
 Our audits of the financial statements included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures to respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions. 
 
 Definition and Limitations of Internal Control over Financial Reporting 
 
 A company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements. 
 
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 Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. 
 
 Critical Audit Matter 
 
 The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. 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 the Retail Segment Inventory Held in the U.S. – Refer to Note 1 to the financial statements 
 
 Critical Audit Matter Description 
 
 The U.S. 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. The cost basis of inventories reflected on the balance sheet is decreased by charges to cost of sales at the time the retail value of the inventory is lowered by markdowns. Earnings are negatively impacted as the merchandise is marked down prior to sale. 
 
 Inherent in the valuation of inventories are certain significant judgments and estimates, including estimating inventory markdowns, which can significantly impact the ending inventory valuation and the resulting gross profit. 
 
 Given the significant estimates and assumptions management utilizes to measure inventory markdowns at period end, a high degree of auditor judgment and an increased extent of effort is required when performing audit procedures to evaluate the reasonableness of estimates and assumptions. Such estimates rely on the completeness of recorded markdowns. 
 
 How the Critical Audit Matter Was Addressed in the Audit 
 
 Our audit procedures related to the completeness of estimated inventory markdowns included the following, among others: 
 • 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 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 January 31, 2026, and subsequent sell through of inventory. 
 • We tested the amount of estimated inventory markdowns by evaluating management's calculation. 
 • We developed an independent expectation for estimated inventory markdowns based on historical inventory balances and compared our expectation to the amount recorded by management. 
 
 /s/ DELOITTE & TOUCHE LLP 
 
 Columbus, Ohio 
 March 30, 2026 
 
 We have served as the Company's auditor since 1997. 
 
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 CONSOLIDATED STATEMENTS OF OPERATIONS 
 
 (in thousands, except per share amounts) 2025 2024 2023 
 Net sales $ 2,892,671 $ 3,009,262 $ 3,074,976 
 Cost of sales ( 1,632,281 ) ( 1,723,304 ) ( 1,750,981 ) 
 Gross profit 1,260,390 1,285,958 1,323,995 
 Operating expenses ( 1,219,233 ) ( 1,245,834 ) ( 1,256,150 ) 
 Income from equity investments 11,026 13,145 9,390 
 Impairment charges ( 4,419 ) ( 18,336 ) ( 4,834 ) 
 Operating profit 47,764 34,933 72,401 
 
 Interest expense, net ( 45,338 ) ( 45,291 ) ( 32,171 ) 
 
 Non-operating expenses, net ( 192 ) ( 372 ) ( 33 ) 
 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 income attributable to redeemable noncontrolling interest ( 2,803 ) ( 574 ) ( 154 ) 
 Net income (loss) attributable to Designer Brands Inc. $ ( 8,374 ) $ ( 10,549 ) $ 29,062 
 Earnings (loss) per share attributable to Designer Brands Inc.: 
 Basic earnings (loss) per share $ ( 0.17 ) $ ( 0.20 ) $ 0.47 
 Diluted earnings (loss) per share $ ( 0.17 ) $ ( 0.20 ) $ 0.46 
 Weighted average shares used in per share calculations: 
 Basic shares 49,136 53,657 61,296 
 Diluted shares 49,136 53,657 63,375 

 The accompanying notes are an integral part of the consolidated financial statements. 
 
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 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) 
 
 (in thousands) 2025 2024 2023 
 Net income (loss) $ ( 5,571 ) $ ( 9,975 ) $ 29,216 
 
 Other comprehensive income (loss) - Foreign currency translation gain (loss) 5,062 ( 5,412 ) ( 289 ) 
 
 Comprehensive income (loss) ( 509 ) ( 15,387 ) 28,927 
 Comprehensive income attributable to redeemable noncontrolling interest ( 2,803 ) ( 574 ) ( 154 ) 
 Comprehensive income (loss) attributable to Designer Brands Inc. $ ( 3,312 ) $ ( 15,961 ) $ 28,773 

 The accompanying notes are an integral part of the consolidated financial statements. 
 
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 CONSOLIDATED BALANCE SHEETS 
 
 (in thousands) January 31, 2026 February 1, 2025 
 ASSETS 
 Current assets: 
 Cash and cash equivalents $ 50,871 $ 44,752 
 Receivables, net 59,444 50,371 
 Inventories 563,547 599,751 
 Prepaid expenses and other current assets 34,286 39,950 
 Total current assets 708,148 734,824 
 Property and equipment, net 213,291 208,199 
 Operating lease assets 675,648 701,621 
 Goodwill 130,837 130,386 
 Intangible assets, net 81,242 84,639 
 Deferred tax assets 35,882 43,324 
 Equity investments 56,260 56,761 
 Other assets 46,325 49,470 
 Total assets $ 1,947,633 $ 2,009,224 
 LIABILITIES, REDEEMABLE NONCONTROLLING INTEREST, AND SHAREHOLDERS' EQUITY 
 Current liabilities: 
 Accounts payable $ 236,195 $ 271,524 
 Accrued expenses 170,014 152,153 
 Current maturities of long-term debt 6,750 6,750 
 Current operating lease liabilities 175,515 159,924 
 Total current liabilities 588,474 590,351 
 Long-term debt 428,206 484,285 
 Non-current operating lease liabilities 596,587 635,076 
 Other non-current liabilities 46,606 17,737 
 Total liabilities 1,659,873 1,727,449 
 Commitments and contingencies 
 Redeemable noncontrolling interest 5,274 3,284 
 Shareholders' equity: 
 Common shares paid in-capital, no par value 1,061,957 1,045,002 
 Treasury shares, at cost ( 833,351 ) ( 833,355 ) 
 Retained earnings 59,869 77,895 
 Accumulated other comprehensive loss ( 5,989 ) ( 11,051 ) 
 Total shareholders' equity 282,486 278,491 
 Total liabilities, redeemable noncontrolling interest, and shareholders' equity $ 1,947,633 $ 2,009,224 

 The accompanying notes are an integral part of the consolidated financial statements. 
 
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 CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY 
 
 Number of Shares Amounts 
 (in thousands, except per share amounts) Class A
Common
Shares Class B
Common
Shares Treasury Shares Common Shares Paid in Capital Treasury Shares Retained Earnings Accumulated Other Comprehensive Loss 

 Total 
 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. — — — — — 29,062 — 29,062 
 Stock-based compensation activity 3,248 — — 11,893 — — — 11,893 
 Repurchase of Class A common shares ( 9,678 ) — 9,678 — ( 102,188 ) — — ( 102,188 ) 
 Dividends paid ($ 0.20 per share) 
 — — — — — ( 12,159 ) — ( 12,159 ) 
 Foreign currency translation adjustment — — — — — — ( 289 ) ( 289 ) 
 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 ) 
 Stock-based compensation activity 1,062 — — 14,237 — — — 14,237 
 Repurchase of Class A common shares ( 10,342 ) — 10,342 — ( 68,553 ) — — ( 68,553 ) 
 Dividends paid ($ 0.20 per share) 
 — — — — — ( 10,452 ) — ( 10,452 ) 
 Foreign currency translation adjustment — — — — — — ( 5,412 ) ( 5,412 ) 
 Balance, February 1, 2025 40,211 7,733 52,902 1,045,002 ( 833,355 ) 77,895 ( 11,051 ) 278,491 
 Net loss attributable to Designer Brands Inc. — — — — — ( 8,374 ) — ( 8,374 ) 
 Stock-based compensation activity 1,851 — — 16,955 — — — 16,955 
 
 Dividends paid ($ 0.20 per share) 
 — — — — — ( 9,652 ) — ( 9,652 ) 
 Foreign currency translation adjustment — — — — — — 5,062 5,062 
 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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 CONSOLIDATED STATEMENTS OF CASH FLOWS 
 
 (in thousands) 2025 2024 2023 
 Cash flows from operating activities: 
 Net income (loss) $ ( 5,571 ) $ ( 9,975 ) $ 29,216 
 Adjustments to reconcile net income (loss) to net cash provided by operating activities: 
 Depreciation and amortization 59,079 63,821 66,140 
 Stock-based compensation expense 18,990 18,658 29,374 
 Deferred income taxes 7,442 ( 4,313 ) 9,124 
 Income from equity investments ( 10,179 ) ( 13,145 ) ( 9,390 ) 
 Distributions received from equity investments 15,328 12,254 10,353 
 Impairment charges 4,419 18,336 4,834 
 
 Other ( 93 ) 1,423 333 
 Change in operating assets and liabilities, net of acquired amounts: 
 Accounts receivables ( 8,969 ) ( 15,392 ) 3,345 
 Income tax receivable — 44,476 ( 455 ) 
 Inventories 39,212 ( 24,773 ) 76,223 
 Prepaid expenses and other current assets 9,791 34,868 ( 29,203 ) 
 Accounts payable ( 34,531 ) ( 20,903 ) 36,113 
 Accrued expenses 14,008 ( 15,245 ) ( 29,884 ) 
 Operating lease assets and liabilities, net 934 ( 7,854 ) ( 33,724 ) 
 Net cash provided by operating activities 109,860 82,236 162,399 
 Cash flows from investing activities: 
 Cash paid for property and equipment ( 31,605 ) ( 50,891 ) ( 54,997 ) 
 
 Cash paid for business acquisitions — ( 16,144 ) ( 127,496 ) 
 
 Other ( 1,916 ) 4,362 — 
 Net cash used in investing activities ( 33,521 ) ( 62,673 ) ( 182,493 ) 
 Cash flows from financing activities: 
 Borrowing on revolving credit facility 887,391 1,337,556 1,232,013 
 Payments on revolving credit facility ( 938,418 ) ( 1,268,536 ) ( 1,211,978 ) 
 Proceeds from the issuance of the Term Loan — — 135,000 
 Payments for borrowings under the Term Loan ( 6,750 ) ( 6,750 ) ( 1,875 ) 
 
 Payments of debt issuance costs — — ( 10,701 ) 
 Cash paid for treasury shares — ( 68,553 ) ( 102,188 ) 
 Dividends paid ( 9,652 ) ( 10,452 ) ( 12,159 ) 
 Cash paid for taxes for stock-based compensation shares withheld ( 2,035 ) ( 4,421 ) ( 17,481 ) 
 Other ( 3,068 ) ( 938 ) ( 152 ) 
 Net cash provided by (used in) financing activities ( 72,532 ) ( 22,094 ) 10,479 
 Effect of exchange rate changes on cash balances 2,312 ( 1,890 ) 22 
 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 
 Cash and cash equivalents, end of period $ 50,871 $ 44,752 $ 49,173 
 Supplemental disclosures of cash flow information: 
 Cash paid for interest on debt $ 39,083 $ 40,443 $ 29,564 
 Property and equipment purchases not yet paid $ 2,762 $ 5,038 $ 5,056 
 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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 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
 
 Note 1 
 Description of Business and Significant Accounting Policies 
 41 
 
 Note 2 
 Acquisition 
 46 
 
 Note 3 
 Revenue 
 47 
 
 Note 4 
 Related Party Transactions 
 48 
 
 Note 5 
 Earnings (Loss) Per Share 
 48 
 
 Note 6 
 Stock-Based Compensation 
 49 
 
 Note 7 
 Shareholders' Equity 
 49 
 
 Note 8 
 Receivables 
 50 
 
 Note 9 
 Property and Leases 
 50 
 
 Note 10 
 Goodwill and Intangible Assets 
 53 
 
 Note 11 
 Accrued Expenses 
 53 
 
 Note 12 
 Debt 
 54 
 
 Note 13 
 Commitments and Contingencies 
 55 
 
 Note 14 
 Income Taxes 
 56 
 
 Note 15 
 Segment Reporting 
 59 
 
 Note 16 
 Subsequent Events 
 62 
 
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 1. DESCRIPTION OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES 
 
 DESCRIPTION OF BUSINESS 
 
 Business Operations- Designer Brands Inc. ("we," "us," "our," and the "Company") is one of the world's largest designers, producers, and retailers of footwear and accessories. 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 Retail segment to expand into the province of Quebec. 
 
 Fiscal Year- Our fiscal year ends on the Saturday nearest to January 31. References to a fiscal year (e.g., "2025") refer to the calendar year in which the fiscal year begins. This reporting schedule is followed by many national retail companies and typically results in a 52-week fiscal year (including 2025 and 2024), but occasionally will contain an additional week resulting in a 53-week fiscal year (including 2023). 
 
 SIGNIFICANT ACCOUNTING POLICIES 
 
 Principles of Consolidation- The consolidated financial statements include the accounts of Designer Brands Inc. and its subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. All amounts are in U.S. dollars. 
 
 Use of Estimates- The preparation of financial statements in conformity with accounting principles generally accepted in the U.S. requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and reported amounts of net sales and expenses during the repor ting periods. Certain estimates and assumptions use forecasted financial information based on information reasonably available to us. Significant estimates and assumptions are required as a part of accounting for customer returns and allowances, gift card breakage income, deferred revenue associated with reward programs, valuation of inventories, depreciation and amortization, impairments of long-lived assets, intangibles, goodwill and equity investments, lease accounting, redeemable noncontrolling interest, income taxes and valuation allowances on deferred tax assets, self-insurance reserves, and acquisitions. Although we believe that these estimates and assumptions are reasonable, they are based on management's knowledge of current events and actions we may undertake in the future. 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 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. Revenue from shipping and handling is recorded in net sales while the related costs are included in cost of sales on the consolidated statements of operations. For products shipped directly to our customers from our suppliers (referred to as "drop ship"), we record gross sales upon customer receipt based on the price paid by the customers as we have determined that we are the principal party responsible for the sale transaction. 
 
 Sales from the Brand Portfolio segment are recognized upon transfer of control. Generally, our wholesale customers arrange their own transportation of merchandise and control is transferred at the time of shipment. Sales are recorded at the transaction price, excluding sales tax, net of estimated returns and allowances. 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. 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. Based on historical information, the likelihood of a gift card remaining unredeemed (referred to as "breakage") can be reasonably estimated at the time of gift card issuance. Breakage income is recognized over the estimated average redemption period of redeemed gift cards. 
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 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. Upon reaching a specified point threshold, members receive reward certificates that may be redeemed for purchases made within the stated expiration date. We record a reduction of net sales when points are awarded based on an allocation of the initial customer purchase and the stand-alone value of the points earned. We maintain a deferred liability for the outstanding points and certificates based on historical conversion and redemption rates. The deferred liability is reduced and sales are recognized when certificates are redeemed or when points and certificates expire. 
 
 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. Cost of sales excludes depreciation and amortization expenses, which are included in operating expenses. 
 
 Operating Expenses- Operating expenses include expenses related to distribution and fulfillment, rent (net of sublease income) and other occupancy costs, store selling operations, marketing, design, sourcing, buying, customer service center, depreciation and amortization, and corporate expenses. Corporate expenses include expenses related to administration, information technology ("IT"), finance, human resources, legal, real estate, and other shared services performing corporate-level activities. 
 
 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 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 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 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. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and respective tax bases and operating loss and tax credit carryforwards, as measured using enacted tax rates expected to be in effect in the periods when temporary differences are expected to be realized or settled. 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. A valuation allowance is provided when it is more likely than not that some portion or all of a deferred tax asset will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become realizable. 
 
 We review and update our tax positions as necessary to add any new uncertain tax positions taken, or to remove previously identified uncertain positions that have been adequately resolved. Additionally, uncertain positions may be remeasured as warranted by changes in facts or law. Accounting for uncertain tax positions requires estimating the amount, timing and likelihood of ultimate settlement. 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. 
 
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 Cash and Cash Equivalents- Cash and cash equivalents represent cash, money market funds, and credit card receivables that generally settle within three days. 
 
 Investments - We determine the balance sheet classification of investments at the time of purchase and evaluate the classification at each balance sheet date. For the balance sheet dates presented, we did not hold any investments in securities other than cash equivalents. We account for investments using the equity method of accounting when we exercise significant influence over the investment. If we do not exercise significant influence, we account for the investment using the cost method of accounting. Cost method investments are included in other assets on the consolidated balance sheets. We evaluate our investments for impairment and whether impairment is other-than-temporary at each balance sheet date. 
 
 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: 
 
 (in thousands) 2025 2024 2023 
 Balance at beginning of period $ 56,761 $ 62,857 $ 63,820 
 
 Investment in Pro-Keds JV 4,616 — — 
 Impairment of Le Tigre equity investment — ( 6,987 ) — 
 Share of net earnings 10,179 13,145 9,390 
 Distributions received ( 15,328 ) ( 12,254 ) ( 10,353 ) 
 Other 32 — — 
 Balance at end of period $ 56,260 $ 56,761 $ 62,857 

 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. We monitor our exposure for credit losses based upon specific receivable balances and we record related allowances for credit losses for estimated losses resulting from the inability of our customers to make required payments. We utilize an unrelated third-party provider for credit and collection services for receivables from the sale of wholesale products to certain retailers. This third-party provider guarantees payment for the majority of the serviced receivables. 
 
 Inventories- All of our inventory is made up of finished goods. 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. 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. The cost basis of inventories is decreased by charges to cost of sales at the time the retail value of the inventory is lowered by markdowns. As a result, earnings are negatively impacted as the merchandise is marked down prior to sale. 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. Reductions to inventory values establish a new cost basis. Favorable changes in facts or circumstances do not result in an increase in the newly established cost basis. 
 
 We perform physical inventory counts or cycle counts on all inventory on hand throughout the year and adjust the recorded balance to reflect the results. We record estimated shrink between physical inventory counts, based on historical experience and recent results, less amounts realized. 
 
 Inherent in the calculation of inventories are certain significant judgments and estimates, including setting the original merchandise retail value, markdowns, shrink, and liquidation values. The ultimate amount realized from the sale of inventory and write-offs from counts could differ from management estimates. 
 
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 Concentration of Risks- We are subject to risks due to concentration of our merchandise coming from China. 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 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. We invest excess cash when available through financial institutions in money market accounts. At times, such amounts invested through banks may be in excess of Federal Deposit Insurance Corporation insurance limits, and we mitigate the risk by utilizing multiple banks. 
 
 Fair Value- Fair value is defined as the price that would be received in the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Assets and liabilities recorded at fair value are categorized using defined hierarchical levels related to the subjectivity associated with the inputs to fair value measurements as follows: 
 • Level 1 - Quoted prices in active markets for identical assets or liabilities. 
 • Level 2 - Quoted prices for similar assets or liabilities in active markets or inputs that are observable. 
 • Level 3 - Unobservable inputs in which little or no market activity exists. 
 
 The carrying value of cash and cash equivalents, receivables, and accounts payable approximated their fair values due to their short-term nature. 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, 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. 
 
 Internal Use Software Costs- Costs related to software developed or obtained for internal use are expensed as incurred until the application development stage has been reached. Once the application development stage has been reached, certain qualifying costs are capitalized until the software is ready for its intended use. Capitalized software costs and the related accumulated amortization are included in property and equipment, net, on the consolidated balance sheets. 
 
 Cloud Computing Arrangements- Capitalized implementation costs, net of accumulated amortization, for cloud computing arrangements accounted for as service contracts are included in other assets on the consolidated balance sheets. 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 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. 
 
 Leases- A lease liability for new and modified leases is recorded based on the present value of future fixed lease commitments with a corresponding lease asset. For leases classified as operating leases, we recognize a single lease cost on a straight-line basis based on the combined amortization of the lease liability and the lease asset. Other leases will be accounted for as finance arrangements. For real estate leases, we are generally required to pay base rent, real estate taxes, and insurance, which are considered lease components, and maintenance, which is a non-lease component. We have elected to not separate non-lease payment components from the associated lease component for all new and modified real estate leases. We determine the discount rate for each lease by estimating the rate that we would be required to pay on a secured borrowing for an amount equal to the lease payments over the lease term when the rate implicit in the lease cannot be readily determined. The majority of our real estate leases provide for renewal options, which are typically not included in the lease term used for measuring the lease assets and lease liabilities as it is not reasonably certain we will exercise renewal options. We monitor for events or changes in circumstances that may require a reassessment of our leases and determine if a remeasurement is required. 
 
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 Impairment of Long-Lived Assets- We periodically evaluate the carrying amount of our long-lived assets, primarily operating lease assets, property and equipment and definite-lived intangible assets, when events and circumstances warrant such a review to ascertain if any assets have been impaired. The reviews are conducted at the lowest identifiable level. The carrying amount of a long-lived asset or asset group is considered impaired when the carrying value of the asset or asset group exceeds the expected future cash flows from the asset or asset group. The impairment loss recognized is the excess of the carrying value of the asset or asset group over its fair value (categorized as Level 3 under the fair value hierarchy). Fair value at the store level is primarily based on projected discounted cash flows over the remaining lease term. 
 
 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. When evaluating for impairment, we may first perform a qualitative assessment to determine whether it is more likely than not that there is an impairment. If we do not perform a qualitative assessment, or if we determine that it is more likely than not that the carrying value exceeds its fair value, we will calculate the estimated fair value. Fair value is typically calculated using a discounted cash flow analysis. Where deemed appropriate, we may also utilize a market approach for estimating fair value. Impairment charges are calculated as the amount by which the carrying amount exceeds its fair value, but not to exceed the carrying value for goodwill. 
 
 Self-Insurance Reserves- We record estimates for certain health and welfare, workers' compensation and casualty insurance costs that are self-insured programs. Self-insurance reserves include actuarial estimates of both claims filed, carried at their expected ultimate settlement value, and claims incurred but not yet reported. The liability represents an estimate of the ultimate cost of claims incurred as of the balance sheet date. Estimates for self-insurance reserves are calculated utilizing claims development estimates based on historical experience and other factors. 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. The redemption price is based on the future performance of Topo. As a result of the redemption feature, we record the remaining interest in Topo as a redeemable noncontrolling interest in temporary equity on the consolidated balance sheets. The noncontrolling interest is adjusted each reporting period for the net income (loss) attributable to the noncontrolling interest. Each reporting period, a measurement period adjustment, if any, is then recorded to adjust the noncontrolling interest to the higher of either the redemption value, assuming it was redeemable at the reporting date, or its carrying value. Any adjustments are also recorded as net income (loss) attributable to the noncontrolling interest. 
 
 The following table presents activity related to our redeemable noncontrolling interest: 
 
 (in thousands) 2025 2024 2023 
 Balance at beginning of period $ 3,284 $ 3,288 $ 3,155 
 
 Net income attributable to redeemable noncontrolling interest 2,803 574 154 
 Distributions attributable to redeemable noncontrolling interest ( 813 ) ( 578 ) ( 21 ) 
 Balance at end of period $ 5,274 $ 3,284 $ 3,288 

 Foreign Currency Translation and Transactions- Our wholly owned Canadian subsidiary has Canadian dollars as its functional currency. Assets and liabilities of this business are translated into U.S. dollars at exchange rates in effect at the balance sheet date or historical rates as appropriate. Each quarter, amounts included in the consolidated statements of operations from this business are translated at the average exchange rate for the period. The cumulative translation adjustments resulting from changes in exchange rates are included as a component of accumulated other comprehensive loss on the consolidated balance sheets. Transaction gains and losses are included in non-operating expenses, net, on the consolidated statements of operations. 
 
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 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 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. 
 
 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. 
 
 2. ACQUISITION 
 
 ACQUISITION OF RUBINO 
 
 On April 8, 2024, we acquired Rubino for $ 16.1 million in cash, which was funded with available cash and borrowings on the ABL Revolver. The purchase price also included a contingent consideration with a maximum potential payment of $ 1.5 million, subject to Rubino's achievement of a defined average annual financial performance target for the 24-month period following the acquisition. 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 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: 
 Inventories $ 7,245 
 Operating lease assets 9,334 
 Goodwill 7,067 
 Intangible assets 5,116 
 Other assets 2,443 
 Accounts payable and other current liabilities ( 5,727 ) 
 Operating lease liabilities ( 9,334 ) 
 $ 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. The fair value measurements are based on significant unobservable inputs, including discounted future cash flows and an assumed royalty rate. The fair value of the operating lease assets was determined based on the market valuation approach. 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. 
 
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 3. REVENUE 
 
 DISAGGREGATION OF NET SALES 
 
 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 
 Net sales: 
 Retail segment: 
 Non-athletic footwear: 
 Women's $ 1,219,143 $ 1,293,965 $ 1,407,446 
 Men's 365,752 376,045 426,098 
 Kids' 112,866 120,202 100,156 
 Athletic footwear 784,997 809,019 717,462 
 Accessories and other 174,051 149,893 146,916 
 2,656,809 2,749,124 2,798,078 
 Brand Portfolio segment: 
 Wholesale 313,024 335,586 271,655 
 Direct-to-consumer 45,058 57,610 65,724 
 Other 4,779 5,685 11,597 
 362,861 398,881 348,976 
 Total segment net sales 3,019,670 3,148,005 3,147,054 
 Elimination of intersegment sales ( 126,999 ) ( 138,743 ) ( 72,078 ) 
 $ 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 activity related to gift cards and reward programs: 
 
 (in thousands) 2025 2024 2023 
 Gift cards: 
 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 
 Balance at end of period $ 27,730 $ 28,963 $ 31,662 
 Reward programs: 
 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 
 Balance at end of period $ 12,845 $ 14,126 $ 15,971 

 CUSTOMER RETURNS AND ALLOWANCES 
 
 We reduce sales by the amount of actual and remaining expected customer returns and allowances, and cost of sales by the amount of merchandise we expect to recover. Customer allowances may be provided to our wholesale customers for margin assistance, advertising support, and various other deductions. Customer returns and allowances are estimated based on anticipated future activity using historical experience and trends and existing arrangements with customers. 
 
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 The following table presents the activity related to customer returns and allowances: 
 
 (in thousands) 2025 2024 2023 
 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 ) 
 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. 
 
 4. RELATED PARTY TRANSACTIONS 
 
 SCHOTTENSTEIN AFFILIATES 
 
 We have transactions with entities owned or controlled by Jay L. Schottenstein, the executive chairman of our Board, and members of his family (the "Schottenstein Affiliates"). 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: 
 
 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. 
 
 Amounts Due to Related Parties - Amounts due to the Schottenstein Affiliates, other than operating lease liabilities, were immaterial for all periods presented. 
 
 ABG-CAMUTO 
 
 We have a 40.0 % ownership interest in ABG-Camuto. We have a licensing agreement with ABG-Camuto, pursuant to which we pay royalties on the net sales of the brands owned by ABG-Camuto, subject to guaranteed minimums. For 2025, 2024 and 2023, we recorded royalty expense for amounts paid to ABG-Camuto of $ 19.2 million, $ 19.2 million and $ 18.1 million, respectively. 
 
 5. EARNINGS (LOSS) PER SHARE 
 
 Basic earnings (loss) per share is based on net income (loss) attributable to Designer Brands Inc. and the weighted average of Class A and Class B common shares outstanding. 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., 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 
 Weighted average basic shares outstanding 
 49,136 53,657 61,296 
 Dilutive effect of stock-based compensation awards — — 2,079 
 Weighted average diluted shares outstanding 
 49,136 53,657 63,375 
 Anti-dilutive shares 5,358 5,304 2,646 

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 6. STOCK-BASED COMPENSATION 
 
 The Designer Brands Inc. 2014 Long-Term Incentive Plan, as amended and restated (the "Plan"), provides for the issuance of stock-based compensation awards to eligible recipients. Eligible recipients include associates, including executive officers, and non-employee directors. 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 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. 
 
 RESTRICTED STOCK UNITS 
 
 Grants of time-based RSUs generally cliff vest after three years , and performance-based RSUs generally vest based upon the achievement of pre-established goals and over the defined period of service. RSUs receive dividend equivalents in the form of additional RSUs, which are subject to the same restrictions and forfeiture provisions as the original award. 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 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 at beginning of period 4,743 $ 10.57 1,013 $ 11.75 
 Granted 6,638 $ 4.10 904 $ 4.05 
 Vested ( 1,233 ) $ 13.23 ( 269 ) $ 14.02 
 Forfeited ( 1,739 ) $ 6.18 ( 564 ) $ 6.55 
 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 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 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 
 
 We issue stock units to non-employee directors. Stock units are granted to each director on the date of each annual meeting of shareholders based on the closing market price of the Class A common shares. In addition, each director that is eligible to receive compensation for board service may elect to have the cash portion of such compensation paid in the form of stock units. 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 January 31, 2026, we had 1.1 million director stock units not yet settled. 
 
 7. SHAREHOLDERS' EQUITY 
 
 SHARES 
 
 Our Class A common shares are listed for trading under the ticker symbol "DBI" on the New York Stock Exchange. There is currently no public market for the Company's Class B common shares, but the Class B common shares can be converted into the Company's Class A common shares at the election of the holder on a share for share basis. Holders of Class A common shares are entitled to one vote per share and holders of Class B common shares are entitled to eight votes per share on matters submitted to shareholders for approval. 
 
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 The following table provides additional information for our common shares: 
 
 (in thousands) January 31, 2026 February 1, 2025 
 Class A Class B Class A Class B 
 Authorized shares 250,000 100,000 250,000 100,000 
 Issued shares 94,964 7,733 93,113 7,733 
 Outstanding shares 42,062 7,733 40,211 7,733 
 Treasury shares 52,902 — 52,902 — 

 We have authorized 100 million shares of no par value preferred shares, with no shares issued for any of the periods presented. 
 
 8. RECEIVABLES 
 
 Receivables, net, consisted of the following: 
 
 (in thousands) January 31, 2026 February 1, 2025 
 Customer accounts receivables: 
 Receivables with payment guarantee by third-party provider $ 22,514 $ 25,030 
 
 Receivables without payment guarantee 14,101 11,213 
 
 Other receivables 23,417 14,579 
 Total receivables 60,032 50,822 
 Allowance for credit losses ( 588 ) ( 451 ) 
 $ 59,444 $ 50,371 

 Activity for the allowance for credit losses was immaterial for all periods presented. 
 
 9. PROPERTY AND LEASES 
 
 PROPERTY AND EQUIPMENT 
 
 Property and equipment, net, consisted of the following: 
 
 (dollars in thousands) Useful Life (years) January 31, 2026 February 1, 2025 
 Land Indefinite $ 1,110 $ 1,110 
 Buildings 39 12,485 12,485 
 Building and leasehold improvements 3 - 20 or the lease term if shorter 
 471,814 457,795 
 Furniture, fixtures and equipment 3 - 15 
 467,734 463,120 
 Software 3 - 5 
 209,598 203,415 
 Finance leased equipment 3 - 10 or the lease term if shorter 
 32,836 — 
 Construction-in-progress 6,547 11,222 
 Total property and equipment 1,202,124 1,149,147 
 Accumulated depreciation and amortization ( 988,833 ) ( 940,948 ) 
 $ 213,291 $ 208,199 

 LEASES 
 
 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. 
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 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 
 Assets: 
 Operating lease assets Operating lease assets $ 675,648 $ 701,621 
 Finance lease assets Property and equipment, net $ 29,521 $ — 
 Liabilities: 
 Current: 
 Operating lease liabilities Current operating lease liabilities $ 175,515 $ 159,924 
 Finance lease liabilities Accrued expenses $ 2,946 $ — 
 Non-current: 
 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 % — % 

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 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 

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 10. GOODWILL AND INTANGIBLE ASSETS 
 
 GOODWILL 
 
 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 
 Balance at beginning of period: 
 Retail $ 138,297 $ ( 38,015 ) $ 100,282 $ 134,583 $ ( 40,928 ) $ 93,655 
 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 
 Retail segment activity: 
 
 Acquired Rubino goodwill — — — 7,067 — 7,067 
 Currency translation adjustment 3,039 ( 2,588 ) 451 ( 3,353 ) 2,913 ( 440 ) 
 
 3,039 ( 2,588 ) 451 3,714 2,913 6,627 
 Balance at end of period: 
 Retail 141,336 ( 40,603 ) 100,733 138,297 ( 38,015 ) 100,282 
 Brand Portfolio 50,093 ( 19,989 ) 30,104 50,093 ( 19,989 ) 30,104 
 $ 191,429 $ ( 60,592 ) $ 130,837 $ 188,390 $ ( 58,004 ) $ 130,386 

 INTANGIBLE ASSETS 
 
 Intangible assets, net, consisted of the following: 
 
 (in thousands) January 31, 2026 February 1, 2025 
 Cost Accumulated Amortization Net Cost Accumulated Amortization Net 
 Definite-lived customer relationships $ 14,327 $ ( 6,339 ) $ 7,988 $ 14,243 $ ( 5,104 ) $ 9,139 
 Definite-lived tradename 11,953 ( 2,692 ) 9,261 11,953 ( 1,895 ) 10,058 
 Indefinite-lived trademarks and tradenames 63,993 — 63,993 65,442 — 65,442 
 $ 90,273 $ ( 9,031 ) $ 81,242 $ 91,638 $ ( 6,999 ) $ 84,639 

 Definite-lived customer relationships and tradenames have a useful life of 10 and 15 years, respectively. 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. 
 
 11. ACCRUED EXPENSES 
 
 Accrued expenses consisted of the following: 
 
 (in thousands) January 31, 2026 February 1, 2025 
 Gift cards $ 27,730 $ 28,963 
 Accrued compensation and related expenses 29,294 16,969 
 Accrued taxes 21,096 22,843 
 Reward programs deferred revenue 12,845 14,126 
 Customer returns and allowances 16,294 18,053 
 
 Other 62,755 51,199 
 $ 170,014 $ 152,153 

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 12. DEBT 
 
 Debt consisted of the following: 
 
 (in thousands) January 31, 2026 February 1, 2025 
 ABL Revolver $ 319,063 $ 370,090 
 Term Loan 119,625 126,375 
 Total debt 438,688 496,465 
 Less unamortized Term Loan debt issuance costs ( 3,732 ) ( 5,430 ) 
 Less current maturities of long-term debt ( 6,750 ) ( 6,750 ) 
 Long-term debt $ 428,206 $ 484,285 

 As of January 31, 2026, future maturities of debt are as follows: 
 
 (in thousands) 
 2026 $ 6,750 
 2027 431,938 
 
 $ 438,688 

 ABL REVOLVER 
 
 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") 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 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 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: (A) a base rate per annum equal to the greatest of (i) the prime rate, (ii) the Fed Funds Rate (as defined in the credit facility agreement and subject to a floor of 0 %) plus 0.5 %, and (iii) Adjusted Term SOFR (as defined in the credit facility agreement) plus 1.0 %; or (B) a one-month, three-month or six-month Adjusted Term SOFR per annum (subject to a floor of 0 %), plus, in each instance, an applicable rate to be determined based on average availability. The FILO Term Loan accrues interest, at our option, at a rate equal to: (A) a fluctuating interest rate per annum equal to the greatest of (i) the prime rate, (ii) the Fed Funds Rate plus 0.5 %, or (iii) Adjusted Term SOFR plus 1.0 %, plus 2.5 %; or (B) Adjusted Term SOFR for the interest period in effect for such borrowing plus 3.5 %. 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 6.1 % as of January 31, 2026, commitment fees, and the amortization of debt issuance costs. 
 
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 TERM LOAN 
 
 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 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: (A) an adjusted three-month SOFR per annum (subject to a floor of 2.0 %), plus 7.0 %; 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 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 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 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 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. 
 
 13. COMMITMENTS AND CONTINGENCIES 
 
 LEGAL PROCEEDINGS 
 
 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 our results of operations or financial condition. 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 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. 
 
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 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 
 2027 2,879 14,184 19,650 33,834 
 2028 1,520 14,184 19,650 33,834 
 
 $ 14,077 $ 42,552 $ 58,950 $ 101,502 

 14. INCOME TAXES 
 
 Income (loss) before income taxes and loss from equity investment consisted of the following: 
 
 (in thousands) 
 2025 2024 2023 
 Domestic income (loss) $ ( 7,768 ) $ ( 23,549 ) $ 19,499 
 Foreign income 10,002 12,819 20,698 
 $ 2,234 $ ( 10,730 ) $ 40,197 

 Income tax provision (benefit) consisted of the following: 
 
 (in thousands) 
 2025 2024 2023 
 Current: 
 Federal $ ( 2,189 ) $ 2,852 $ ( 594 ) 
 State and local ( 1,091 ) 1,774 547 
 Foreign 2,134 ( 1,068 ) 1,904 
 ( 1,146 ) 3,558 1,857 
 Deferred: 
 Federal 4,933 ( 5,314 ) 3,766 
 State and local 2,422 ( 1,758 ) 5,362 
 Foreign 749 2,759 ( 4 ) 
 8,104 ( 4,313 ) 9,124 
 Income tax provision (benefit) $ 6,958 $ ( 755 ) $ 10,981 

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 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 
 Amount % Amount % Amount % 
 U.S. federal tax at statutory rate $ 469 21.0 % $ ( 2,253 ) 21.0 % $ 8,441 21.0 % 
 State and local income taxes, net of federal income tax effect 1,721 77.0 ( 353 ) 3.3 ( 92 ) ( 0.2 ) 
 Foreign tax effects: 
 Statutory tax rate difference between Canada and U.S. 443 19.8 573 ( 5.3 ) 882 2.2 
 
 Other 120 5.4 ( 333 ) 3.1 190 0.5 
 
 Nontaxable or nondeductible items: 
 Share-based payment awards 3,770 168.8 2,576 ( 24.0 ) ( 2,205 ) ( 5.5 ) 
 Limitation on executive compensation 937 41.9 1,432 ( 13.3 ) 5,783 14.4 
 Federal interest income — — ( 386 ) 3.5 ( 2,474 ) ( 6.2 ) 
 Other — — — — ( 258 ) ( 0.6 ) 
 Changes in unrecognized tax benefits ( 352 ) ( 15.8 ) ( 3,227 ) 30.0 1,540 3.8 
 Other adjustments: 
 Return to provision ( 348 ) ( 15.6 ) 980 ( 9.1 ) — — 
 Other 198 9.0 236 ( 2.2 ) ( 826 ) ( 2.1 ) 
 Effective tax rate $ 6,958 311.5 % $ ( 755 ) 7.0 % $ 10,981 27.3 % 

 The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and liabilities are as follows: 
 
 (in thousands) January 31, 2026 February 1, 2025 
 Deferred tax assets: 
 Operating lease liabilities $ 201,093 $ 201,167 
 Net operating losses 16,416 17,000 
 Inventories 8,718 8,502 
 Stock-based compensation 5,684 6,696 
 Accrued expenses 4,189 3,570 
 Interest 3,143 9,706 
 Reward programs deferred revenue 2,925 3,288 
 State bonus depreciation 2,373 2,869 
 Gift cards 2,219 2,146 
 Other 3,680 3,229 
 250,440 258,173 
 Less: valuation allowance ( 13,832 ) ( 12,478 ) 
 Total deferred tax assets, net of valuation allowance 236,608 245,695 
 Deferred tax liabilities: 
 Operating lease assets ( 183,080 ) ( 182,735 ) 
 Property and equipment ( 7,670 ) ( 11,284 ) 
 Intangible assets ( 4,696 ) ( 1,617 ) 
 Basis in subsidiary ( 4,592 ) ( 4,123 ) 
 Other ( 688 ) ( 2,612 ) 
 Total deferred tax liabilities ( 200,726 ) ( 202,371 ) 
 Net deferred tax assets $ 35,882 $ 43,324 

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 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 
 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 ) 
 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 
 the U.S. and we do not expect to incur any significant additional taxes related to such amounts. 
 
 Net cash paid (refunds received) for income taxes consisted of the following: 
 
 (in thousands) 2025 2024 2023 
 Federal $ 27 $ ( 62,059 ) $ 15,500 
 Aggregated state and local jurisdictions ( 330 ) ( 190 ) 1,853 
 Disaggregated state and local jurisdictions: 
 California ( 2,286 ) — 941 
 New York — — ( 2,534 ) 
 City of Columbus, Ohio — — 1,005 
 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 activity related to gross unrecognized tax benefits: 
 
 (in thousands) 2025 2024 2023 
 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 years — ( 3,531 ) — 
 Changes in estimates — ( 1,388 ) — 
 Lapses of applicable statues of limitations ( 684 ) ( 1,158 ) ( 2,323 ) 
 Settlements of tax positions taken in prior years ( 613 ) ( 912 ) ( 71 ) 
 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 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. 
 
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 15. SEGMENT REPORTING 
 
 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. The CODM uses segment operating profit (loss) predominantly in the annual budget and projection process and for considering variances with actual results when assessing performance and making decisions about the allocation of resources to each segment. Total assets by segment are not presented in the table below as the CODM does not evaluate, manage, or measure performance of segments using total assets. 
 
 The following table provides certain financial data by segment reconciled to the consolidated financial statements: 
 
 (in thousands) Retail Brand Portfolio Total 
 2025 
 Net sales: 
 External customer sales $ 2,656,809 $ 235,862 $ 2,892,671 
 Intersegment sales — 126,999 126,999 
 Segment net sales 2,656,809 362,861 3,019,670 
 Elimination of intersegment net sales ( 126,999 ) 
 Consolidated net sales $ 2,892,671 
 Less segment expenses: 
 Cost of sales, exclusive of expenses shown below ( 1,504,104 ) ( 260,070 ) 
 Store selling expenses ( 339,954 ) — 
 Occupancy costs ( 302,001 ) ( 4,742 ) 
 Marketing ( 149,034 ) ( 14,640 ) 
 Distribution and fulfillment costs ( 53,440 ) ( 12,603 ) 
 Personnel overhead costs ( 52,238 ) ( 45,504 ) 
 Depreciation and amortization ( 36,876 ) ( 7,122 ) 
 Other expense items (1) 
 ( 7,610 ) ( 18,298 ) 
 Plus income from equity investments — 11,026 
 Segment operating profit $ 211,552 $ 10,908 222,460 
 Net recognition of intersegment activity 4,894 
 Corporate shared services costs (2) 
 ( 175,171 ) 
 Impairment charges (2) 
 ( 4,419 ) 
 Consolidated operating profit 47,764 
 Interest expense, net ( 45,338 ) 
 Non-operating expenses, net ( 192 ) 
 Income before income taxes and loss from equity investment $ 2,234 
 Cash paid for segment property and equipment $ 26,429 $ 2,038 $ 28,467 

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 (in thousands) Retail Brand Portfolio Total 
 2024 
 Net sales: 
 External customer sales $ 2,749,124 $ 260,138 $ 3,009,262 
 Intersegment sales — 138,743 138,743 
 Segment net sales 2,749,124 398,881 3,148,005 
 Elimination of intersegment net sales ( 138,743 ) 
 Consolidated net sales $ 3,009,262 
 Less segment expenses: 
 Cost of sales, exclusive of expenses shown below ( 1,562,896 ) ( 289,067 ) 
 Store selling expenses ( 346,756 ) — 
 Occupancy costs ( 298,645 ) ( 6,021 ) 
 Marketing ( 149,712 ) ( 23,251 ) 
 Distribution and fulfillment costs ( 45,785 ) ( 13,452 ) 
 Personnel overhead costs ( 52,078 ) ( 49,949 ) 
 Depreciation and amortization ( 36,468 ) ( 6,811 ) 
 Other expense items (1) 
 ( 7,342 ) ( 20,250 ) 
 Plus income from equity investments — 13,145 
 Segment operating profit $ 249,442 $ 3,225 252,667 
 Net elimination of intersegment activity ( 10,084 ) 
 Corporate shared services costs (2) 
 ( 189,314 ) 
 Impairment charges (2) 
 ( 18,336 ) 
 Consolidated operating profit 34,933 
 Interest expense, net ( 45,291 ) 
 Non-operating expenses, net ( 372 ) 
 Loss before income taxes $ ( 10,730 ) 
 Cash paid for segment property and equipment $ 31,911 $ 2,414 $ 34,325 

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 (in thousands) Retail Brand Portfolio Total 
 2023 
 Net sales: 
 External customer sales $ 2,798,078 $ 276,898 $ 3,074,976 
 Intersegment sales — 72,078 72,078 
 Segment net sales 2,798,078 348,976 3,147,054 
 Elimination of intersegment net sales ( 72,078 ) 
 Consolidated net sales $ 3,074,976 
 Less segment expenses: 
 Cost of sales, exclusive of expenses shown below ( 1,569,909 ) ( 256,431 ) 
 Store selling expenses ( 347,283 ) — 
 Occupancy costs ( 296,686 ) ( 7,714 ) 
 Marketing ( 148,376 ) ( 27,987 ) 
 Distribution and fulfillment costs ( 48,523 ) ( 15,308 ) 
 Personnel overhead costs ( 58,350 ) ( 47,669 ) 
 Depreciation and amortization ( 33,428 ) ( 7,811 ) 
 Other expense items (1) 
 ( 9,216 ) ( 22,169 ) 
 Plus income from equity investments — 9,390 
 Segment operating profit (loss) $ 286,307 $ ( 26,723 ) 259,584 
 Net recognition of intersegment activity 3,281 
 Corporate shared services costs (2) 
 ( 185,630 ) 
 Impairment charges (2) 
 ( 4,834 ) 
 Consolidated operating profit 72,401 
 Interest expense, net ( 32,171 ) 
 
 Non-operating expenses, net ( 33 ) 
 Income before income taxes $ 40,197 
 Cash paid for segment property and equipment $ 33,696 $ 2,211 $ 35,907 

 (1) Other expense items include professional services fees, payment service fees, supplies, travel, and other administrative segment expenses. 
 (2) Corporate shared services costs and impairment charges are not attributed to any of our segments. 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) 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. 
 
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 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 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. 
 
 16. 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. 
 
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 ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE 

 None.
Designer Brands Inc. 10-K

Item 8. Financial Statements and Supplementary Data
