DULUTH HOLDINGS INC. 10-Q

Item 1. Financial Statements DULUTH HOLDINGS INC. Condensed Co nsolidated Balance Sheets (Unaudited) (Amounts in thousands) May 3, 2026 February 1, 2026 ASSETS Current Assets: Cash and cash equivalents $ 6,134 $ 16,345 Receivables 1,754 2,710 Inventory 132,444 131,342 Prepaid expenses & other current assets 22,732 21,654 Total current assets 163,064 172,051 Property and equipment, net 91,909 96,913 Operating lease right-of-use assets 83,382 89,283 Finance lease right-of-use assets, net 28,733 29,577 Available-for-sale security 4,676 4,763 Other assets, net 8,886 10,022 Total assets $ 380,650 $ 402,609 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Trade accounts payable $ 40,072 $ 48,226 Accrued expenses and other current liabilities 34,370 39,871 Current portion of operating lease liabilities 16,562 16,449 Current portion of finance lease liabilities 2,711 2,681 Line of credit 6,009 — Current maturities of TRI long-term debt 1,043 1,020 Total current liabilities 100,767 108,247 Operating lease liabilities, less current maturities 72,015 76,008 Finance lease liabilities, less current maturities 27,251 27,940 TRI long-term debt, less current maturities 23,085 23,337 Deferred tax liabilities 962 962 Total liabilities 224,080 236,494 Shareholders' equity: Preferred stock, no par value; 10,000 shares authorized; no shares issued or outstanding as of May 3, 2026 and February 1, 2026 — — Common stock (Class A), no par value; 10,000 shares authorized; 3,364 shares issued and outstanding as of May 3, 2026 and February 1, 2026 — — Common stock (Class B), no par value; 200,000 shares authorized; 35,145 shares issued and 34,675 shares outstanding as of May 3, 2026 and 33,854 shares issued and 33,384 shares outstanding as of February 1, 2026 — — Treasury stock, at cost; 470 and 470 shares as of May 3, 2026 and February 1, 2026, respectively ( 3,156 ) ( 2,922 ) Capital stock 111,560 110,794 Retained earnings 51,231 61,332 Accumulated other comprehensive loss ( 260 ) ( 231 ) Total shareholders' equity of Duluth Holdings Inc. 159,375 168,973 Noncontrolling interest ( 2,805 ) ( 2,858 ) Total shareholders' equity 156,570 166,115 Total liabilities and shareholders' equity $ 380,650 $ 402,609 The accompanying notes are an integral part of these condensed consolidated financial statements. 3 Table of Contents DULUTH HOLDINGS INC. Condensed Consolidated Statements of Operations (Unaudited) (Amounts in thousands, except per share figures) Three Months Ended May 3, 2026 May 4, 2025 Net sales $ 98,594 $ 102,704 Cost of goods sold (excluding depreciation and amortization) 41,960 49,349 Gross profit 56,634 53,355 Selling, general and administrative expenses 61,802 65,158 Impairment of long-lived assets 2,709 549 Restructuring expense 1,354 — Operating loss ( 9,231 ) ( 12,352 ) Interest expense 790 1,481 Other (loss) income, net 93 ( 161 ) Loss before income taxes ( 9,928 ) ( 13,994 ) Income tax expense 120 1,270 Net loss ( 10,048 ) ( 15,264 ) Less: Net income attributable to noncontrolling interest 53 29 Net loss attributable to controlling interest $ ( 10,101 ) $ ( 15,293 ) Basic and diluted earnings per share (Class A and Class B): Weighted average shares of common stock outstanding 34,712 33,714 Net loss per share attributable to controlling interest $ ( 0.29 ) $ ( 0.45 ) The accompanying notes are an integral part of these condensed consolidated financial statements. 4 Table of Contents DULUTH HOLDINGS INC. Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) (Amounts in thousands) Three Months Ended May 3, 2026 May 4, 2025 Net loss $ ( 10,048 ) $ ( 15,264 ) Other comprehensive loss Securities available-for sale: Unrealized security gain (loss) arising during the period ( 29 ) 422 Income tax expense — — Other comprehensive income (loss) ( 29 ) 422 Comprehensive loss ( 10,077 ) ( 14,842 ) Comprehensive income attributable to noncontrolling interest 53 29 Comprehensive loss attributable to controlling interest $ ( 10,130 ) $ ( 14,871 ) The accompanying notes are an integral part of these condensed consolidated financial statements. 5 Table of Contents DULUTH HOLDINGS INC. Condensed Consolidated Statement of Shareholders’ Equity (Unaudited) (Amounts in thousands) Three Months Ended May 3, 2026 Accumulated Noncontrolling Capital stock other interest in Total Treasury Retained comprehensive variable interest shareholders' Shares Amount stock earnings (loss) income entity equity Balance at February 1, 2026 36,748 $ 110,794 $ ( 2,922 ) $ 61,332 $ ( 231 ) $ ( 2,858 ) $ 166,115 Issuance of common stock 1,413 57 — — — — 57 Stock-based compensation — 709 — — — — 709 Restricted stock forfeitures ( 17 ) — — — — — — Restricted stock surrendered for taxes ( 105 ) — ( 234 ) — — — ( 234 ) Other comprehensive income — — — — ( 29 ) — ( 29 ) Net (loss) income — — — ( 10,101 ) — 53 ( 10,048 ) Balance at May 3, 2026 38,039 $ 111,560 $ ( 3,156 ) $ 51,231 $ ( 260 ) $ ( 2,805 ) $ 156,570 The accompanying notes are an integral part of these condensed consolidated financial statements. 6 Table of Contents DULUTH HOLDINGS INC. Condensed Consolidated Statement of Shareholders’ Equity (Unaudited) (Amounts in thousands) Three Months Ended May 4, 2025 Accumulated Noncontrolling Capital stock other interest in Total Treasury Retained comprehensive variable interest shareholders' Shares Amount stock earnings loss entity equity Balance at February 2, 2025 35,177 $ 108,009 $ ( 2,332 ) $ 77,721 $ ( 722 ) $ ( 2,997 ) $ 179,679 Issuance of common stock 766 66 — — — — 66 Stock-based compensation — 254 — — — — 254 Restricted stock forfeitures ( 567 ) — — — — — — Restricted stock surrendered for taxes ( 122 ) — ( 264 ) — — — ( 264 ) Other comprehensive income — — — — 422 — 422 Net (loss) income — — — ( 15,293 ) — 29 ( 15,264 ) Balance at May 4, 2025 35,254 $ 108,329 $ ( 2,596 ) $ 62,428 $ ( 300 ) $ ( 2,968 ) $ 164,893 The accompanying notes are an integral part of these condensed consolidated financial statements. 7 Table of Contents DULUTH HOLDINGS INC. Condensed Consolidated Statements of Cash Flows (Unaudited) (Amounts in thousands) Three Months Ended May 3, 2026 May 4, 2025 Cash flows from operating activities: Net loss $ ( 10,048 ) $ ( 15,264 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 5,778 6,749 Stock based compensation 709 254 Impairment of long-lived assets 2,709 549 Deferred income taxes — 1,371 Loss on disposal of property and equipment 1,301 748 Non-cash lease expense 4,032 3,986 Changes in operating assets and liabilities: Receivables 956 ( 278 ) Inventory ( 1,102 ) ( 9,563 ) Prepaid expense & other current assets ( 2,026 ) ( 1,920 ) Software hosting implementation costs, net 1,859 ( 2,995 ) Trade accounts payable ( 8,123 ) ( 28,159 ) Accrued expenses and deferred rent obligations ( 4,659 ) ( 7,940 ) Operating lease liabilities ( 4,024 ) ( 3,808 ) Other assets ( 780 ) ( 193 ) Net cash used in operating activities ( 13,418 ) ( 56,463 ) Cash flows from investing activities: Purchases of property and equipment ( 1,779 ) ( 1,332 ) Principal receipts from available-for-sale security 58 53 Net cash used in investing activities ( 1,721 ) ( 1,279 ) Cash flows from financing activities: Proceeds from line of credit 13,093 64,450 Payments on line of credit ( 7,083 ) ( 450 ) Payments on TRI long-term debt ( 246 ) ( 225 ) Payments on finance lease obligations ( 659 ) ( 622 ) Payments of tax withholding on vested restricted shares ( 234 ) ( 264 ) Other 57 97 Net cash provided by financing activities 4,928 62,986 Increase (decrease) in cash and cash equivalents ( 10,211 ) 5,244 Cash and cash equivalents at beginning of period 16,345 3,335 Cash and cash equivalents at end of period $ 6,134 $ 8,579 Supplemental disclosure of cash flow information: Interest paid $ 790 $ 1,481 Income taxes paid $ — $ — Supplemental disclosure of non-cash information: Unpaid liability to acquire property and equipment $ 191 $ 1,271 The accompanying notes are an integral part of these condensed consolidated financial statements. 8 Table of Contents DULUTH HOLDINGS INC. Notes to Condensed Consolidated Financial Statements (Unaudited) 1. NATURE OF OPERATIONS AND BASIS OF PRESENTATION A. Nature of Operations Duluth Holdings Inc. (“Duluth Trading” or the “Company”), a Wisconsin corporation, is a lifestyle brand of men’s and women’s workwear, casual wear, outdoor apparel and accessories sold primarily through the Company’s own omnichannel platform. The Company’s products are marketed under the Duluth Trading Company brand, with the majority of products being exclusively developed and sold as Duluth Trading branded merchandise. The Company identifies its operating segments according to how its business activities are managed and evaluated. The Company continues to report one reportable external segment, consistent with the Company’s omnichannel business approach. The Company’s revenues generated outside the United States were insignificant. The Company has two classes of authorized common stock: Class A common stock and Class B common stock. The rights of holders of Class A common stock and Class B common stock are identical, except for voting and conversion rights. Each share of Class A common stock is entitled to ten votes per share and is convertible at any time into one share of Class B common stock. Each share of Class B common stock is entitled to one vote per share. The Company’s Class B common stock trades on the NASDAQ Global Select Market under the symbol “DLTH.” B. Basis of Presentation The condensed consolidated financial statements are prepared in accordance with U.S. Generally Accepted Accounting Principles (“U.S. GAAP”). The Company consolidates TRI Holdings, LLC (“TRI”) as a variable interest entity (see Note 6 “Variable Interest Entity” for further information). All significant intercompany balances and transactions have been eliminated in consolidation. The Company’s fiscal year ends on the Sunday nearest to January 31 of the following year. Fiscal 2026 is a 52-week period and ends on January 31 , 2027. Fiscal 2025 was a 52-week period and ended on February 1, 2026. The three months of fiscal 2026 and fiscal 2025 represent the Company’s 13-week periods ended May 3, 2026 and May 4, 2025, respectively. The accompanying condensed consolidated financial statements as of and for the three months ended May 3, 2026 and May 4, 2025 have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) and, in the opinion of the Company, include all adjustments (which are normal and recurring in nature) necessary to present fairly the financial position, results of operations and cash flows of the Company for the interim periods presented. Certain information and footnote disclosures normally included in consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such SEC rules and regulations as of and for the three months ended May 3, 2026 and May 4, 2025. These interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes included in the Company’s annual report on Form 10-K for the fiscal year ended February 1, 2026. C. Inventory Inventory consists of finished goods stated at the lower of cost or net realizable value, with cost determined using the first-in, first-out valuation method. The Company records an inventory reserve for the anticipated loss associated with selling inventories below cost. Inventory reserve for excess, obsolete items, and shrinkage was $ 5.5 million and $ 4.4 million as of May 3, 2026 and February 1, 2026, respectively. 9 Table of Contents DULUTH HOLDINGS INC. Notes to Condensed Consolidated Financial Statements (Unaudited) D. Prepaid Expenses and Other Assets Prepaid expenses and other assets consist of the following: May 3, 2026 February 1, 2026 (in thousands) Prepaid expenses & other current assets Pending returns inventory, net $ 1,293 $ 2,020 Current software hosting implementation costs, net 3,552 4,173 Other prepaid expenses 17,887 15,461 Prepaid expenses & other current assets $ 22,732 $ 21,654 Other assets, net Intangible assets, net $ 393 $ 397 Non-current software hosting implementation costs 7,106 8,345 Other assets, net 1,387 1,280 Other assets, net $ 8,886 $ 10,022 E. Seasonality of Business The Company’s business is affected by the pattern of seasonality common to most apparel businesses. Historically, the Company has recognized a significant portion of its revenue and operating profit in the fourth fiscal quarter of each year due to increased sales during the holiday season. F. Cash and Cash Equivalents The Company considers short-term investments with original maturities of three months or less when purchased to be cash equivalents. Amounts receivable from credit card issuers are typically converted to cash within 2 to 4 days of the original sales transaction and are considered to be cash equivalents. G. Reclassifications Certain prior year amounts, which are not material, have been reclassified to conform to the current year presentation in the condensed consolidated financial statements and accompanying notes to the condensed consolidated financial statements. H. Significant Accounting Policies There have been no significant changes to the Company’s significant accounting policies as described in the Company’s Annual Report on Form 10-K for the year ended February 1, 2026. 10 Table of Contents DULUTH HOLDINGS INC. Notes to Condensed Consolidated Financial Statements (Unaudited) 2. LEASES The expense components of the Company’s leases reflected on the Company’s condensed consolidated statement of operations were as follows: Consolidated Statement Three Months Ended of Operations May 3, 2026 May 4, 2025 (in thousands) Finance lease expense Amortization of right-of- use assets Selling, general and administrative expenses $ 722 $ 722 Interest on lease liabilities Interest expense 339 368 Total finance lease expense $ 1,061 $ 1,090 Operating lease expense Selling, general and administrative expenses $ 4,871 $ 4,898 Amortization of build-to- suit leases capital contribution Selling, general and administrative expenses 321 321 Variable lease expense Selling, general and administrative expenses 3,061 2,801 Total lease expense $ 9,314 $ 9,110 Other information related to leases were as follows: Three Months Ended May 3, 2026 May 4, 2025 (in thousands) Cash paid for amounts included in the measurement of lease liabilities: Financing cash flows from finance leases $ 659 $ 622 Operating cash flows from finance leases $ 339 $ 368 Operating cash flows from operating leases $ 5,061 $ 4,921 Right-of-use assets obtained in exchange for lease liabilities: Operating leases $ 144 $ 1,398 Weighted-average remaining lease term (in years): Finance leases 9 10 Operating leases 6 6 Weighted-average discount rate: Finance leases 4.5 % 4.5 % Operating leases 4.7 % 4.4 % Future minimum lease payments under the non-cancellable leases are as follows as of May 3, 2026: Fiscal year Finance Operating (in thousands) 2026 (remainder of fiscal year) $ 2,995 $ 15,288 2027 3,993 19,182 2028 4,017 17,276 2029 4,217 14,638 2030 4,369 13,470 Thereafter 16,628 20,947 Total future minimum lease payments $ 36,219 $ 100,801 Less – Discount ( 6,257 ) ( 12,224 ) Lease liability $ 29,962 $ 88,577 11 Table of Contents DULUTH HOLDINGS INC. Notes to Condensed Consolidated Financial Statements (Unaudited) In the first quarter of 2026, the Company recorded an impairment charge of $ 2.7 million, which consisted of a right-of-use asset of $ 2.0 million and associated leasehold improvements of $ 0.7 million relating to the closure of the Salt Lake City fulfillment center as discussed in further detail in Note 13. The Company performed a recoverability test on the asset group. This test indicated that the carrying amount of the asset was not recoverable, as it exceeded the sum of the future undiscounted cash flows expected to result from the use and eventual disposition of the assets. Consequently, the Company proceeded to measure the impairment loss by comparing the asset group's carrying amount to its fair value. The fair value, which is considered to be a level 3 non-recurring fair value measurement, was determined using a discounted cash flow analysis (an income approach). The discounted cash flow analysis utilized level 3 fair value inputs including cash flow projections and discount rates. The resulting impairment charge of $ 2.7 million represents the amount by which the carrying value exceeded the calculated fair value. The impairment charge recorded is included in impairment of long-lived assets in the Company's condensed consolidated statement of operations for the three months ended May 3, 2026. 3. DEBT AND CREDIT AGREEMENT Debt consists of the following: May 3, 2026 February 1, 2026 (in thousands) TRI Senior Secured Note $ 20,628 $ 20,857 TRI Note 3,500 3,500 $ 24,128 $ 24,357 Less: current maturities 1,043 1,020 TRI long-term debt $ 23,085 $ 23,337 Duluth Line of credit $ 6,009 $ — Less: current maturities 6,009 — Duluth long-term debt $ — $ — TRI Holdings, LLC TRI entered into a senior secured note (“TRI Senior Secured Note”) with an original balance of $ 26.7 million. The TRI Senior Secured Note is scheduled to mature on October 15, 2038 and requires installment payments with an interest rate of 4.95 %. See Note 6 “Variable Interest Entities” for further information. TRI entered into a promissory note (“TRI Note”) with an original balance of $ 3.5 million. The TRI Note is scheduled to mature in November 2038 and requires annual interest payments at a rate of 3.05 %, with a final balloon payment due in November 2038 . While the above notes are consolidated in accordance with ASC Topic 810, Consolidation , the Company is not the guarantor nor the obligor of these notes. Credit Agreement On April 28, 2025, the Company entered into a credit agreement (the “Credit Agreement”) among the Company, certain financial institutions as Lenders thereto, and BMO Bank N.A., as Administrative Agent, a Swing Line Lender and a Letter of Credit Issuer. The Credit Agreement provides for borrowings of up to $ 100.0 million in aggregate principal amount that are available under an asset-based revolving senior credit facility (the “Revolver”) with a $ 10.0 million sublimit for the issuance of standby letters of credit. Under the Credit Agreement, (i) each Secured Overnight Financing Rate (“SOFR”) loan will bear interest on the outstanding principal amount at a rate per annum equal to adjusted term SOFR plus 150 basis points; (ii) each base rate loan will bear interest on the outstanding principal amount from the applicable borrowing date at a rate per annum equal to the Base Rate (as defined in the Credit Agreement) plus 50 basis points; (iii) each swing line loan will bear interest on the outstanding principal amount from the applicable borrowing date at a rate per annum equal to the base rate plus the applicable margin; and (iv) each other obligation will bear interest on the unpaid amount at a rate per annum equal to the base rate plus the applicable margin. 12 Table of Contents DULUTH HOLDINGS INC. Notes to Condensed Consolidated Financial Statements (Unaudited) The Company is also permitted to voluntarily prepay the Credit Agreement in whole or in part at any time, where borrowings bearing interest based on the base rate may be prepaid at any time without penalty and borrowings bearing interest based on SOFR may be prepaid, subject to payment of usual and customary breakage and redeployment costs. The revolver will mature on April 28, 2030 . Pursuant to the Credit Agreement, the Company may request an increase in the revolving credit commitments in the aggregate amount of up to $ 25.0 million during the term of the Credit Agreement and with the consent of the Administrative Agent, subject to credit approval of the Lenders and the satisfaction of certain conditions. The Credit Agreement contains customary events of default and financial, affirmative and negative covenants and is secured by a first-priority perfected security interest in substantially all of the tangible and intangible assets of the Company. The new $ 100.0 million Revolver replaced the prior revolving credit facility at a lower interest rate and extends the availability of funds to April 28, 2030 . The Company believes the Credit Agreement will provide the Company with flexibility and liquidity to finance seasonal inventory builds. On July 16, 2025, the Company entered into the First Amendment to the Credit Agreement, pursuant to which all revolving credit loans advanced or prepaid pursuant to such Sweep to Loan Arrangement shall bear interest based on the Base Rate. On October 1, 2025, the Company entered into the Second Amendment to the Credit Agreement, which, among other things, (i) temporarily increased the aggregate revolving credit commitment under the Credit Agreement from $ 100.0 million to $ 125.0 million, as allowed by the existing Credit Agreement, beginning on October 1, 2025 until March 31, 2026 , as of which date the revolving credit commitment returned to $ 100.0 million. As of May 3, 2026, the Company had drawn $ 6.0 million and had issued and outstanding letters of credit of $ 0.7 million under the Revolver, which reduced the amount available for cash advances under the facility to $ 93.3 million. 4. ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES Accrued expenses and other current liabilities consist of the following: May 3, 2026 February 1, 2026 (in thousands) Salaries and benefits $ 12,960 $ 14,120 Deferred revenue 7,883 9,192 Freight 689 2,186 Product returns 3,226 4,529 Unpaid purchases of property & equipment 576 1,775 Accrued advertising 1,209 671 Other 7,827 7,398 Total accrued expenses and other current liabilities $ 34,370 $ 39,871 5. FAIR VALUE ASC Topic 820, Fair Value Measurements and Disclosures (“ASC 820”), defines fair value as the price that would be received to sell an asset, or paid to transfer a liability, in an orderly transaction between market participants at the measurement date (i.e., an exit price). The exit price is based on the amount that the holder of the asset or liability would receive or need to pay in an actual transaction (or in a hypothetical transaction if an actual transaction does not exist) at the measurement date. ASC 820 describes a fair value hierarchy based on three levels of inputs that may be used to measure fair value, of which the first two are considered observable and the last unobservable, as follows: Level 1 – Quoted prices in active markets for identical assets or liabilities. Level 2 – Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. 13 Table of Contents DULUTH HOLDINGS INC. Notes to Condensed Consolidated Financial Statements (Unaudited) The Company’s assets and liabilities measured at fair value are categorized as Level 3 instruments. The fair value of the Company’s available-for-sale security was valued based on a discounted cash flow method (Level 3), which incorporates the U.S. Treasury yield curve, credit information and an estimate of future cash flows. During the three months ended May 3, 2026, certain changes in the inputs did impact the fair value of the available-for-sale security. The calculated fair value is based on estimates that are subjective in nature and involve uncertainties and matters of significant judgment and, therefore, cannot be determined with precision. Changes in assumptions could significantly affect the estimates. The amortized cost and fair value of the Company’s available-for-sale security and the corresponding amount of gross unrealized gains and losses recognized in accumulated other comprehensive income are as follows: May 3, 2026 Cost or Gross Gross Amortized Unrealized Unrealized Estimated Cost Gains Losses Fair Value (in thousands) Level 3 security: Corporate trust $ 5,079 $ — $ ( 403 ) $ 4,676 February 1, 2026 Cost or Gross Gross Amortized Unrealized Unrealized Estimated Cost Gains Losses Fair Value (in thousands) Level 1 security: Money market funds $ 12,158 $ — $ — $ 12,158 Level 3 security: Corporate trust $ 5,137 $ — $ ( 374 ) $ 4,763 The following table presents a reconciliation of the beginning and ending balances of the Company's corporate trust security measured at fair value on a recurring basis using significant unobservable inputs (Level 3): Three Months Ended May 3, 2026 May 4, 2025 (in thousands) Corporate trust - (Level 3) Beginning balance $ 4,763 $ 4,491 Total gains (losses) included in OCI (Change in value) ( 29 ) 421 Settlements ( 58 ) ( 52 ) Ending balance $ 4,676 $ 4,860 Significant Unobservable Inputs May 3, 2026 February 1, 2026 Weighted Average Discount Rate 4.56 % 4.43 % Own credit risk 1.50 % 1.50 % Future Cash Flows (in thousands) $ 6,908 $ 7,030 The Company does not intend to sell the available-for-sale-security in the near term and does not believe that it will be required to sell the security. The Company reviews its securities on a quarterly basis to monitor its exposure to other-than-temporary impairment. No other-than-temporary impairment was recorded in the unaudited condensed consolidated statements of operations for the three months ended May 3, 2026 or May 4, 2025. 14 Table of Contents DULUTH HOLDINGS INC. Notes to Condensed Consolidated Financial Statements (Unaudited) The following table presents future principal receipts related to the Company’s available-for-sale security by contractual maturity as of May 3, 2026. Amortized Estimated Cost Fair Value (in thousands) Within one year $ 246 $ 214 After one year through five years 1,596 1,434 After five years through ten years 2,351 2,190 After ten years 886 838 Total $ 5,079 $ 4,676 The carrying values and fair values of other financial instruments in the Consolidated Balance Sheets are as follows: May 3, 2026 February 1, 2026 Carrying Amount Fair Value Carrying Amount Fair Value (in thousands) TRI Long-term debt, including short-term portion $ 24,128 $ 22,381 $ 24,357 $ 22,810 The above long-term debt, including short-term portion is attributable to the consolidation of TRI in accordance with ASC Topic 810, Consolidation . The fair value was also based on a discounted cash flow method (Level 3) based on credit information and an estimate of future cash flows. 6. VARIABLE INTEREST ENTITIES Based upon the criteria set forth in ASC 810, Consolidation , the Company consolidates variable interest entities (“VIEs”) in which it has a controlling financial interest and is therefore deemed the primary beneficiary. A controlling financial interest will have both of the following characteristics: (a) the power to direct the VIE activities that most significantly impact economic performance; and (b) the obligation to absorb the VIE losses and the right to receive benefits that are significant to the VIE. The Company has determined that it was the primary beneficiary of one VIE as of May 3, 2026 and February 1, 2026. The Company leases the Company’s headquarters in Mt. Horeb, Wisconsin from TRI. In conjunction with the lease, the Company originally invested $ 6.3 million in a trust that loaned funds to TRI for the construction of the Company’s headquarters. TRI is a Wisconsin limited liability company whose primary purpose and activity is to own this real property. The Company considers itself the primary beneficiary for TRI as the Company has both the power to direct the activities that most significantly impact the entity’s economic performance and is expected to receive benefits that are significant to TRI. As the Company is the primary beneficiary, it consolidates TRI and the lease is eliminated in consolidation. The Company does not consolidate the trust as the Company is not the primary beneficiary. The condensed consolidated balance sheets include the following amounts as a result of the consolidation of TRI as of May 3, 2026 and February 1, 2026: May 3, 2026 February 1, 2026 (in thousands) Cash $ 13 $ 8 Property and equipment, net 21,547 21,702 Total assets $ 21,560 $ 21,710 Other current liabilities $ 237 $ 211 Current maturities of long-term debt 1,043 1,020 TRI long-term debt 23,085 23,337 Noncontrolling interest in VIE ( 2,805 ) ( 2,858 ) Total liabilities and shareholders' equity $ 21,560 $ 21,710 15 Table of Contents DULUTH HOLDINGS INC. Notes to Condensed Consolidated Financial Statements (Unaudited) 7. EARNINGS PER SHARE Earnings per share is computed under the provisions of ASC 260 , Earnings Per Share . Basic earnings per share is based on the weighted average number of common shares outstanding for the period. Diluted earnings per share is based on the weighted average number of common shares plus the effect of dilutive potential common shares outstanding during the period using the treasury stock method. Dilutive potential common shares include outstanding restricted stock and are considered only for dilutive earnings per share unless considered anti-dilutive. The reconciliation of the numerator and denominator of the basic and diluted earnings per share calculation is as follows: Three Months Ended May 3, 2026 May 4, 2025 (in thousands, except per share data) Numerator - net loss attributable to controlling interest $ ( 10,101 ) $ ( 15,293 ) Denominator - weighted average shares (Class A and Class B) Basic 34,712 33,714 Dilutive shares — — Diluted 34,712 33,714 Loss per share (Class A and Class B) Basic and diluted $ ( 0.29 ) $ ( 0.45 ) The computation of diluted loss per share excluded 1.5 million and 0.8 million of unvested restricted stock for the three months ended May 3, 2026 and May 4, 2025, respectively, because their inclusion would be anti-dilutive due to a net loss. 8. STOCK-BASED COMPENSATION The Company accounts for its stock-based compensation plan in accordance with ASC 718, Stock Compensation , which requires the Company to measure all share-based payments at grant date fair value and recognize the cost over the requisite service period of the award. Total stock compensation expense associated with restricted stock recognized by the Company was $ 0.7 million and $ 0.3 million for the three months ended May 3, 2026 and May 4, 2025, respectively. The Company’s total stock compensation expense is included in selling, general and administrative expenses on the Condensed Consolidated Statements of Operations. A summary of the activity in the Company’s unvested restricted stock during the three months ended May 3, 2026 is as follows: Weighted average fair value Shares per share Outstanding at February 1, 2026 2,311,132 $ 2.47 Granted 1,389,208 3.14 Vested ( 269,748 ) 4.31 Forfeited ( 16,818 ) 5.71 Outstanding at May 3, 2026 3,413,774 $ 2.58 At May 3, 2026, the Company had unrecognized compensation expense of $ 7.1 million related to the restricted stock awards, which is expected to be recognized over a weighted average period of 2.4 years. 16 Table of Contents DULUTH HOLDINGS INC. Notes to Condensed Consolidated Financial Statements (Unaudited) 9. PROPERTY AND EQUIPMENT Property and equipment consist of the following: May 3, 2026 February 1, 2026 (in thousands) Land and land improvements $ 4,486 $ 4,486 Leasehold improvements 59,552 59,828 Buildings 36,326 36,298 Vehicles 84 84 Warehouse equipment 63,156 65,608 Office equipment and furniture 55,698 55,651 Computer equipment 9,293 9,328 Software 39,167 38,872 267,762 270,155 Accumulated depreciation and amortization ( 178,739 ) ( 175,803 ) 89,023 94,352 Construction in progress 2,886 2,561 Property and equipment, net $ 91,909 $ 96,913 10. REVENUE The Company’s revenue primarily consists of the sale of apparel, footwear and hard goods. Sales disaggregated based upon sales channel is presented below. Three Months Ended May 3, 2026 May 4, 2025 (in thousands) Direct-to-consumer $ 57,133 $ 62,552 Stores 41,461 40,152 $ 98,594 $ 102,704 Contract Assets and Liabilities Contract assets and liabilities on the Company’s consolidated balance sheets are presented in the following table: May 3, 2026 February 1, 2026 (in thousands) Contract assets $ 1,293 $ 2,020 Contract liabilities $ 7,883 $ 9,192 The following table provides the reconciliation of the contract liability related to gift cards for the three months ended: May 3, 2026 May 4, 2025 (in thousands) Balance as of beginning of period $ 9,192 $ 9,782 Gift cards sold 2,085 2,797 Gift cards redeemed ( 3,314 ) ( 4,034 ) Gift card breakage ( 80 ) ( 31 ) Balance as of end of period $ 7,883 $ 8,514 17 Table of Contents DULUTH HOLDINGS INC. Notes to Condensed Consolidated Financial Statements (Unaudited) 11. INCOME TAXES The Company’s provision for income taxes during the interim reporting periods has historically been calculated by applying an estimate of the annual effective tax rate for the full year to “ordinary” income or loss (pre-tax income or loss excluding unusual or infrequently occurring discrete items) for the reporting period. The effective tax rate related to controlling interest was ( 1.2 %) and ( 9.0 %) for the three months ended May 3, 2026 and May 4, 2025, respectively. The income from TRI was excluded from the calculation of the Company’s effective tax rate, as TRI is a limited liability company and not subject to income tax. The Company maintains a valuation allowance against its deferred tax assets as of the three months period ended May 3, 2026. 12. SEGMENT REPORTING As of May 3, 2026 and May 4, 2025, the Company had one reportable segment. The Company’s operating segment is based on how the Chief Operating Decision Maker (“CODM”) makes decisions about allocating resources and assessing performance. The Company's CODM is its Chief Executive Officer . The CODM has the ultimate decision-making authority for resource allocation and assessing the performance of the Company. Thereby, the CODM regularly reviews consolidated net income as the measure of segment profit or loss, as well as significant segment expenses included in the below table, to evaluate operating performance, generate future operating plans and make strategic decisions regarding the allocation of capital. The CODM also uses these measures in monitoring plan versus actual results. The CODM does not review segment assets at a different level or category than those disclosed in the condensed consolidated balance sheets. The following table summarizes the Company’s gross margin and selling, general and administrative expenses. Three Months Ended May 3, 2026 May 4, 2025 (13 weeks) (13 weeks) (in thousands) Net sales $ 98,594 $ 102,704 Cost of goods sold 41,960 49,349 Gross margin $ 56,634 $ 53,355 Less: Outbound shipping expenses $ 5,302 $ 6,186 Advertising expenses 9,426 10,076 Variable expenses 9,849 10,886 Overhead expenses 37,225 38,010 Total selling, general and administrative 61,802 65,158 Impairment of long-lived assets 2,709 549 Restructuring expense 1,354 — Operating loss ( 9,231 ) ( 12,352 ) Interest expense 790 1,481 Other (loss) income, net 93 ( 161 ) Loss before income taxes ( 9,928 ) ( 13,994 ) Income tax expense 120 1,270 Net loss ( 10,048 ) ( 15,264 ) Less: Net income attributable to noncontrolling interest 53 29 Net loss attributable to controlling interest $ ( 10,101 ) $ ( 15,293 ) 18 Table of Contents DULUTH HOLDINGS INC. Notes to Condensed Consolidated Financial Statements (Unaudited) 13. RESTRUCTURING On January 8, 2026, as a result of additional analysis of the Company's fulfillment center network, the Company communicated its intent to close the Salt Lake City fulfillment center, as such, the Company recorded employment related termination benefits and other restructuring related expenses beginning in the fourth quarter of 2025. Three Months Ended May 3, 2026 May 4, 2025 (in thousands) Disposals of property and equipment $ 1,316 $ — Employee termination benefit expense 8 — Other restructuring expense 30 — Total restructuring expenses $ 1,354 $ — 14. RECENT ACCOUNTING PRONOUNCEMENTS Recent Accounting Pronouncements Not Yet Adopted Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures In November 2024, the FASB issued ASU No. 2024-03, “Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures.” This ASU requires that each interim and annual reporting period an entity disclose more information about the components of certain expense captions that is currently disclosed in the financial statements. This update is effective for annual reporting periods beginning after December 15, 2027. Early adoption is permitted. Management is currently evaluating the effects this guidance will have on its consolidated financial statements. 19 Table of Contents