What changed in this filing

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Item 1. Financial Statements

2026-06-03 compared with 2025-12-11 · 131 added, 191 removed, 345 unchanged (48% of the section changed)

3 unchanged sentences

(In thousands, except share data)

November 1, 2025

February 1, 2025

January 31, 2026

(Fiscal 2026)

24 unchanged sentences

Preferred stock, $ 0.01 par value, 1,000,000 shares authorized, none issued

Common stock, $ 0.01 par value, 125,000,000 shares authorized, 80,461,305 and 79,403,349 shares issued at November 1, 2025 and February 1, 2025, respectively

Common stock, $ 0.01 par value, 125,000,000 shares authorized, 81,012,145 and 80,564,948 shares issued at May 2, 2026 and January 31, 2026, respectively

Additional paid-in capital

Treasury stock at cost, 25,908,533 shares at November 1, 2025 and February 1, 2025

Treasury stock at cost, 25,908,533 shares at May 2, 2026 and January 31, 2026

Accumulated deficit

6 unchanged sentences

For the Three Months Ended

For the Nine Months Ended

November 1, 2025

November 2, 2024

November 1, 2025

November 2, 2024

(Fiscal 2026)

(Fiscal 2025)

(Fiscal 2024)

Cost of goods sold including occupancy costs

Selling, general and administrative

Transaction-related costs

Depreciation and amortization

Total expenses

Operating income (loss)

Operating loss

Interest income, net

Income (loss) before provision (benefit) for income taxes

Loss before provision (benefit) for income taxes

Provision (benefit) for income taxes

Net income (loss)

Net income (loss) per share - basic

Net income (loss) per share - diluted

Net loss per share - basic and diluted

Weighted-average number of common shares outstanding:

Basic and diluted

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

3 unchanged sentences

Treasury Stock

Balance at February 1, 2025

Balance at January 31, 2026

Board of directors' compensation

Stock compensation expense

Restricted stock units (RSUs) granted for achievement of performance-based

compensation, reclassified from liability to equity

Issuance of common stock, upon RSUs release

Shares withheld for taxes related to net share settlement

Exercise of stock options

Balance at May 2, 2026

Board of directors' compensation

Stock compensation expense

Issuance of common stock, upon RSUs release

Balance at August 2, 2025

Board of directors' compensation

Stock compensation expense

Issuance of common stock, upon RSUs release

Shares withheld for taxes related to net share settlement

Balance at November 1, 2025

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

6 unchanged sentences

Stock compensation expense

Restricted stock units (RSUs) granted for achievement of performance-based

compensation, reclassified from liability to equity

Issuance of common stock, upon RSUs release

1 unchanged sentence

Exercise of stock options

Repurchase of common stock

Balance at May 3, 2025

Board of directors' compensation

Stock compensation expense

Exercise of stock options

Balance at August 3, 2024

Board of directors' compensation

Stock compensation expense

Issuance of common stock, upon RSUs release

Shares withheld for taxes related to net share settlement

Repurchase of common stock

Balance at November 2, 2024

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

2 unchanged sentences

(In thousands)

For the Nine Months Ended

November 1, 2025

November 2, 2024

(Fiscal 2026)

1 unchanged sentence

Cash flows from operating activities:

Net income (loss)

Adjustments to reconcile net income (loss) to net cash provided by (used for) operating activities:

Adjustments to reconcile net loss to net cash provided by (used for) operating activities:

Amortization and writeoff of deferred debt issuance costs

Gain from the sale of equipment

Depreciation and amortization

8 unchanged sentences

Accrued expenses and other liabilities

Net cash provided by (used for) operating activities

Net cash used for operating activities

Cash flows from investing activities:

Additions to property and equipment, net

Proceeds from sale of equipment

Purchase of short-term investments

2 unchanged sentences

Cash flows from financing activities:

Repurchase of common stock, excluding excise taxes

Debt issuance costs

Excise taxes paid on repurchase of common stock

Tax withholdings paid related to net share settlements

Proceeds from the exercise of stock options

Tax withholdings paid related to net share settlements

Net cash used for financing activities

Net increase (decrease) in cash and cash equivalents

Net decrease in cash and cash equivalents

Cash and cash equivalents:

2 unchanged sentences

Supplemental Disclosures of Cash Flow Information:

Cash paid during the period for income taxes

Cash paid (refunded) during the period for income taxes, net

Cash paid during the period for interest

6 unchanged sentences

In the opinion of management of Destination XL Group, Inc., a Delaware corporation (collectively with its subsidiaries, referred to as the “Company”), the accompanying unaudited Consolidated Financial Statements contain all adjustments necessary for a fair presentation of the interim financial statements.

These financial statements do not include all disclosures associated with annual financial statements and, accordingly, should be read in conjunction with the notes to the Company’s audited Consolidated Financial Statements for the fiscal year ended February 1, 2025 included in the Company’s Annual Report on Form 10-K, which was filed with the Securities and Exchange Commission ("SEC") on March 20, 2025.

These financial statements do not include all disclosures associated with annual financial statements and, accordingly, should be read in conjunction with the notes to the Company’s audited Consolidated Financial Statements for the fiscal year ended January 31, 2026 included in the Company’s Annual Report on Form 10-K, which was filed with the Securities and Exchange Commission ("SEC") on March 19, 2026.

The information set forth in these statements may be subject to normal year-end adjustments.

3 unchanged sentences

The Company’s fiscal year is a 52- or 53- week period ending on the Saturday closest to January 31.

Fiscal 2025 and fiscal 2024 are both 52-week periods ending on January 31, 2026 and February 1, 2025, respectively.

Fiscal 2026 and fiscal 2025 are both 52-week periods ending on January 30, 2027 and January 31, 2026, respectively.

Reclassifications

For comparability with the current period presentation, certain costs in the Consolidated Statement of Operations for the three months ended May 3, 2025 were reclassified from selling, general and administrative expenses to transaction-related costs.

Segment Information

37 unchanged sentences

Actual results and future changes in estimates may differ from the Company’s current estimates.

There were no grants of stock options in the first nine months of fiscal 2025 and fiscal 2024.

There were no grants of stock options in the first three months of fiscal 2026 and fiscal 2025.

Impairment of Long-Lived Assets

1 unchanged sentence

The Company’s judgment regarding the identification of impairment indicators is based on operational performance at the store level.

Factors considered by the Company that could result in an impairment triggering event include significant changes in the use of assets, a current period operating or cash flow loss, underperformance of a store relative to historical or expected operating results, and an accumulation of costs significantly in excess of the amount originally expected for the construction of the long-lived store assets.

Factors considered by the Company that could result in an impairment triggering event include significant changes in the use of assets, a current period operating or cash flow loss, the underperformance of a store relative to historical or expected operating results, and an accumulation of costs significantly in excess of the amount originally expected for the construction of the long-lived store assets.

The Company assesses the recoverability of the assets by determining whether the carrying value of such assets over their respective remaining lives can be recovered through projected undiscounted future cash flows.

The model for undiscounted future cash flows includes assumptions, at the individual store level, with respect to expectations for future sales and gross margin rates as well as an estimate for occupancy costs used to estimate the fair value of the respective store’s operating lease right-of-use ("ROU") asset.

The amount of impairment, if any, is measured based on projected discounted future cash flows using a discount rate reflecting the Company’s average cost of funds.

There were no impairments or non-cash gains recognized in the first nine months of fiscal 2025 and fiscal 2024.

The model for undiscounted future cash flows includes assumptions, at the individual store level, with respect to expectations for future sales and gross margin rates as well as an estimate for occupancy costs, excluding rental payments related to the respective store’s operating lease right-of-use ("ROU") asset.

If the first step of the long-lived asset impairment test concludes that the carrying amount of the asset group, which includes any ROU asset, is not recoverable, the Company performs the second step of the long-lived asset impairment test by comparing the fair value of the asset group to its carrying amount and recognizing an impairment charge for the amount by which the carrying amount exceeds the fair value.

The amount of impairment, if any, is measured based on projected discounted future cash flows using a discount rate reflecting the Company’s average cost of funds and is limited to the amount by which the asset group’s carrying value exceeds the fair value of its individual assets.

The fair value of ROU assets is estimated using an income approach based on management’s forecast of future cash flows that could be derived based on the sublease market rent.

With respect to the impairment charges taken on operating lease ROU assets, if the Company subsequently makes a decision to close previously impaired stores and a gain is realized as a result of the reevaluation of the existing lease liabilities, to the extent the gain related to previously recorded impairment charges against the ROU assets, the gain will be included as an offset to asset impairment charges originally recorded on that ROU asset, with the remainder included as a reduction in store occupancy costs.

There were no impairments or non-cash gains recognized in the first three months of fiscal 2026 and fiscal 2025.

Advertising Costs

2 unchanged sentences

Direct response advertising costs, if any, are expensed in the period in which the mailing occurs.

Advertising expense, which is included in selling, general and administrative expenses, was $ 6.2 million and $ 6.1 million for the third quarter of fiscal 2025 and fiscal 2024, respectively, and was $ 19.6 million and $ 24.4 million for the first nine months of fiscal 2025 and fiscal 2024, respectively.

Advertising expense, which is included in selling, general and administrative expenses, was $ 6.7 million and $ 6.4 million for the first quarter of fiscal 2026 and fiscal 2025, respectively.

The Company determines if an arrangement contains a lease at the inception of a contract.

ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease.

ROU assets and lease liabilities are recognized at the commencement date based on the present value of the remaining future minimum lease payments and initial direct costs.

Lease incentives are included in the value of the ROU assets.

As the interest

rate implicit in the Company’s leases is not readily determinable, the Company utilizes its incremental borrowing rate, based on information available at the lease measurement date, to determine the present value of future payments.

ROU assets and lease liabilities are recognized at the commencement date based on the present value of the remaining future minimum lease payments;

initial direct costs and any lease incentives are included in the value of those ROU assets.

As the interest rate implicit in the Company’s leases is not readily determinable, the Company utilizes its incremental borrowing rate, based on information available at the lease measurement date, to determine the present value of future payments.

The Company elected the lessee non-lease component separation practical expedient, which permits the Company to not separate non-lease components from the lease components to which they relate.

The Company also made an accounting policy election that the recognition requirement of ASC 842 will not be applied to certain, if any, non-store leases, with a term of 12 months or less, recognizing those lease payments on a straight-line basis over the lease term.

At November 1, 2025 , the Company had no short-term leases.

The Company also made an accounting policy election that the recognition requirement of ASC Topic 842, Lessors – Certain Leases with Variable Lease Payments will not be applied to certain, if any, non-store leases, with a term of 12 months or less, recognizing those lease payments on a straight-line basis over the lease term.

At May 2, 2026 , the Company had no short-term leases.

The Company’s store leases typically contain options that permit renewals for additional periods of up to five years each.

2 unchanged sentences

Renewal options are not included in the lease term for automobile and equipment leases because they are not considered reasonably certain of being exercised at lease commencement.

As discussed in Note 4, Leases , during the second quarter of fiscal 2025, the Company amended its lease agreement for the Company's corporate headquarters and distribution center to extend the lease term from February 1, 2026 to January 31, 2033 .

At the end of the first extension term, the Company will have the opportunity to extend this lease for three additional successive periods of five years.

The renewal options were not considered reasonably certain at the time of the lease remeasurement.

In the second quarter of fiscal 2025, the Company amended the lease agreement for its corporate headquarters and distribution center to extend the initial term for an additional period of seven years commencing on February 1, 2026 and ending on January 31, 2033 .

At the end of the extension term, the Company will have the option to further extend the term for three additional successive periods of five years each.

The extension options were not considered reasonably certain at the time of the lease remeasurement .

For store leases, the Company accounts for lease components and non-lease components as a single lease component.

6 unchanged sentences

In October 2023, the Financial Accounting Standards Board (“FASB”) issued ASU 2023-06, Disclosure Improvements:

Codification Amendment in Response to the SEC ’ s Disclosure Update and Simplification Initiative .

Codification Amendment in Response to the SEC ’ s Disclosure Update and Simplification Initiative (“ ASU-2023-06”) .

ASU-2023-06 incorporates several disclosure and presentation requirements currently residing in SEC Regulations S-X and S-K.

2 unchanged sentences

The ASU is not expected to have a material impact on the Company’s Consolidated Financial Statements or related disclosures because the Company is currently subject to the reporting requirements of Regulations S-X and S-K.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740) , which enhances transparency about income tax information through improvements to income tax disclosures primarily related to the rate reconciliation and income taxes paid and to improve the effectiveness of income tax disclosu res.

This ASU will be effective with the Company's annual disclosures for fiscal 2025.

The ASU allows for adoption on a prospective basis, with a retrospective option.

The Company is currently evaluating the impact of adopting this accounting standard on its financial statements and related disclosures but expects to adopt this ASU on a prospective basis.

In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40 ) ("ASU 2024-03"), which will require disclosure, in the notes to financial statements, of specified information about certain costs and expenses, including disclosure of amounts for (a) purchases of inventory, (b) employee compensation, (c) depreciation and (d) intangible asset amortization, included in each relevant expense caption.

3 unchanged sentences

The Company is currently evaluating the impact of this accounting standard on its financial statement presentation and related disclosures.

There were no other new accounting pronouncements, issued or effective during the first nine months of fiscal 2025 , which had or are expected to have a significant impact on the Company’s Consolidated Financial Statements.

There were no other new accounting pronouncements, issued or effective during the first three months of fiscal 2026 , which had or are expected to have a significant impact on the Company’s Consolidated Financial Statements.

Revenue Recognition

The Company operates as a retailer of big and tall men’s clothing, which includes stores and direct.

The Company operates as a retailer of big + tall men’s clothing, which includes stores and direct.

Revenue is recognized by the operating segment that initiates a customer’s order.

7 unchanged sentences

Based o n historical redemption patterns, the Company can reasonably estimate the amount of gift cards, gift certificates, and credit vouchers for which redemption is remote, which is referred to as “breakage.” Breakage is recognized over two years in proportion to historical redemption trends and is recorded as sales in the Consolidated Statements of Operations.

The gift card liability, net of breakage, was $ 2.0 million and $ 3.3 million at November 1, 2025 and February 1, 2025, respectively.

The gift card liability, net of breakage, was $ 2.3 million and $ 3.1 million at May 2, 2026 and January 31, 2026, respectively.

Unredeemed Loyalty Coupons.

The Company offers a free loyalty program to its customers for which points accumulate based on the purchase of merchandise.

Under ASC 606, Revenue from Contracts with Customers , these loyalty points provide the customer with a material rig ht and a distinct performance obligation with revenue deferred and recognized when the points are expected to be redeemed or expire.

Under ASC Topic 606, Revenue from Contracts with Customers , these loyalty points provide the customer with a material rig ht and a distinct performance obligation with revenue deferred and recognized when the points are expected to be redeemed or expire.

The cycle of earning and redeeming loyalty points is generally under one year in duration.

The Company's legacy loyalty program ended at th e end of fiscal 2024, and all unused loyalty points and certificates were expired.

The Company's new loyalty program launched at the start of fiscal 2025.

As such, at February 1, 2025 there was no outstanding loyalty accrual.

The loyalty accrual, net of breakage, was $ 0.7 million at November 1, 2025.

The loyalty accrual, net of breakage, was $ 0.4 million at May 2, 2026 and $ 0.4 million at January 31, 2026.

Shipping and handling costs are accounted for as fulfillment costs and are included in cost of sales for all periods presented.

5 unchanged sentences

For the Three Months Ended

For the Nine Months Ended

(in thousands)

November 1, 2025

November 2, 2024

November 1, 2025

November 2, 2024

Credit Agreement with Citizens Bank, N.A.

The Company has a credit facility with Citizens Bank, N.A., which was amended during the third quarter of fiscal 2025 (as amended, the "Credit Facility").

As amended, the borrowing commitment under the Credit Facility was reduced from $ 125.0 million to $ 100.0 million and the maturity date of the Credit Facility was extended to August 13, 2030 .

The Credit Facility includes a sublimit of $ 20.0 million for commercial and standby letters of credit and a sublimit of up to $ 10.0 million for swing line loans, which was reduced from $ 15.0 million as part of the amendment on August 13, 2025.

The Company has a revolving credit agreement with Citizens Bank, N.A., which was most recently amended in the third quarter of fiscal 2025 (as amended, the "Credit Facility").

The Credit Facility, which expires August 13, 2030 , provides a revolving commitment of $ 100.0 million.

The Credit Facility includes a sublimit of $ 20.0 million for commercial and standby letters of credit and a sublimit of up to $ 10.0 million for swing line loans.

The Company’s ability to borrow under the Credit Facility is determined using an availability formula based on eligible assets .

B orrowings under the Credit Facility bear interest at either a Base Rate or Daily Simple SOFR rate, at the Company's option.

Borrowings under the Credit Facility bear interest at either a Base Rate (as defined in the Credit Facility) or Daily Simple Secured Overnight Financing Rate (“SOFR”) rate, at the Company's option.

Base Rate loans will bear interest at a rate equal to (i) the greater of:

(a) the Prime Rate, (b) the Federal Funds effective rate plus 0.50 % per annum and (c) the Daily Simple SOFR rate plus 1.00 % per annum (provided the Base Rate shall never be less than the Floor (as defined in the Credit Facility)), plus (ii) a varying percentage, based on the Company’s average excess availability, of either 0.25 % or 0.50 % (the “Applicable Margin”).

(a) the Prime Rate (as defined in the Credit Facility), (b) the Federal Funds (as defined in the Credit Facility) effective rate plus 0.50 % per annum and (c) the Daily Simple SOFR rate plus 1.00 % per annum (provided the Base Rate shall never be less than the Floor (as defined in the Credit Facility)), plus (ii) a varying percentage, based on the Company’s average excess availability, of either 0.25 % or 0.50 % (the “Applicab le Margin”).

Daily Simple SOFR loans will bear interest at a rate equal to (i) the Daily Simple SOFR rate plus an adjustment of 0.10 % (provided the Daily Simple SOFR rate shall never be less than the Floor), plus (ii) the Applicable Margin.

2 unchanged sentences

The Company’s obligations under the Credit Facility are secured by a lien on substantially all of its assets.

If the Company’s availability under the Credit Facility at any time is less than the greater of (i) 10 % of the Revolving Loan Cap (the lesser of the aggregate revolving commitments or the borrowing base) and (ii) $ 7.5 million, then the Company is required to maintain a minimum consolidated fixed charge coverage ratio of 1.0 :1.0 until such time as availability has exceeded the greater of (1) 10 % of the Revolving Loan Cap and (2) $ 7.5 million for 30 consecutive days.

At November 1, 2025 , the Company had no borrowings outstanding under the Credit Facility and unused availability was $ 73.6 million.

The Company had no borrowings during the first nine months of fiscal 2025, resulting in an average unused excess availability of approximately $ 71.1 million.

Outstanding standby letters of credit were $ 3.6 million at November 1, 2025.

At November 1, 2025, the Company’s prime-based interest rate was 7.25 % .

If the Company’s availability under the Credit Facility at any time is less than the greater of (i) 10 % of the Revolving Loan Cap (the lesser of the

aggregate revolving commitments or the borrowing base) and (ii) $ 7.5 million, then the Company is required to maintain a minimum consolidated fixed charge coverage ratio of 1.0 :1.0 until such time as availability has exceeded the greater of (1) 10 % of the Revolving Loan Cap and (2) $ 7.5 million for 30 consecutive days.

At May 2, 2026 , the Company had no borrowings outstanding under the Credit Facility and unused availability was $ 70.0 million.

The Company had no borrowings during the first three months of fiscal 2026, resulting in an average unused excess availability of approximately $ 73.6 million.

Outstanding standby letters of credit were $ 3.6 million at May 2, 2026.

At May 2, 2026, the Company’s prime-based interest rate was 7.00 % .

The Company leases all of its store locations and its corporate headquarters, which also includes its distribution center, under operating leases.

1 unchanged sentence

In the second quarter of fiscal 2025, the Company extended the term of its corporate lease from February 1, 2026 to January 31, 2033 , with the opportunity to extend for three additional consecutive periods of five years .

In connection with the lease amendment to extend the term of the lease, the landlord provided the Company with an improvement allowance in an amount up to $ 4.7 million, which has been included as an offset to the ROU asset and will be amortized as a reduction to rent expense over the lease term.

In connection with the lease amendment to extend the term of the lease, the landlord provided the Company with an improvement allowance in an amount up to $ 4.7 million, which has been included as an offset to the ROU assets and will be amortized as a reduction to rent expense over the lease term.

The Company also leases certain equipment and other assets under operating leases, typically with initial terms of 3 to 5 years .

2 unchanged sentences

Lease modification accounting requires the recalculation of the ROU asset, lease liability and lease expense over the respective lease term.

As of November 1, 2025, the Company’s operating leases liabilities represent the present value of the remaining future minimum lease payments updated based on concessions and lease modifications.

As of May 2, 2026, the Company’s operating leases liabilities represent the present value of the remaining future minimum lease payments updated based on concessions and lease modifications.

Lease costs related to store locations are included in cost of goods sold, including occupancy costs on the Consolidated Statements of Operations, and expenses and lease costs related to the corporate headquarters and equipment leases are included in selling, general and administrative expenses on the Consolidated Statements of Operations.

The following table is a summary of the Company’s components of net lease cost for the three and nine months ended November 1, 2025 and November 2, 2024, respectively:

The following table is a summary of the Company’s components of net lease cost for the three months ended May 2, 2026 and May 3, 2025, respectively:

For the Three Months Ended

For the Nine Months Ended

November 1, 2025

November 2, 2024

November 1, 2025

November 2, 2024

(in thousands)

2 unchanged sentences

Total lease costs

(1) During the first quarter of fiscal 2026, the l andlord for one of the Company's store locations exercised their right to terminate the lease agreement .

As consideration for the landlord's right to terminate prior to the end of the lease term, the landlord paid the Company a termination fee of $ 1.4 million, which was recognized as a gain in accordance with ASC 842 and not included in the above operating lease cost for the first quarter of fiscal 2026.

The gain from the early termination of the lease was recognized as an offset to cost of goods sold, including occupancy costs, on the Consolidated Statements of Operations for the first three months of fiscal 2026.

(2) Variable lease costs include the cost of property taxes, insurance and common area maintenance fees related to leases.

Supplemental cash flow and balance sheet information related to leases as of and for the first nine months ended November 1, 2025 and November 2, 2024 was as follows:

Supplemental cash flow and balance sheet information related to leases as of and for the first three months ended May 2, 2026 and May 3, 2025 was as follows:

(dollars in thousands)

For the Nine Months Ended

For the Three Months Ended

Cash paid for amounts included in the measurement of lease liabilities:

November 1, 2025

November 2, 2024

Operating cash flows for operating leases (1)

1 unchanged sentence

Right-of-use assets obtained in exchange for operating lease liabilities

November 1, 2025

November 2, 2024

Weighted average remaining lease term

Weighted average discount rate

(1) The cash paid for the first nine months of fiscal 2025 and fiscal 2024 included prepaid rent of $ 4.7 million and $ 4.4 million, respectively.

The table below reconciles the undiscounted cash flows for each of the first five years and total of the remaining years to the operating lease liabilities recorded on the Consolidated Balance Sheet as of November 1, 2025:

(1) The cash paid for the first three months of fiscal 2026 and fiscal 2025 included prepaid rent of $ 4.7 million and $ 4.5 million, respectively.

The cash paid for the three months of fiscal 2026 does not include the cash received of $ 1.4 million for the early lease termination, as discussed above.

(in thousands)

5 unchanged sentences

Long-term lease obligations

During the third quarter of fiscal 2025, the l andlord for one of the store locations exercised its right under the lease agreement, as amended, to terminate the lease agreement effective April 1, 2026 .

As consideration for the landlord's right to terminate prior to the end of the lease term, the landlord will pay the Company a termination fee of approximately $ 1.4 million, which will be recognized by the Company at the time of the lease termination.

Long-Term Incentive Plans

6 unchanged sentences

Awards for any achievement of performance targets are not granted until the performance targets are achieved and then are subject to additional vesting through August 31 following the end of the applicable performance period.

2022-2024 LTIP

The performance target for the Company’s 2022-2024 LTIP was approved by the Compensation Committee of the Board of Directors (the "Compensation Committee”) on April 9, 2022, and covered a three-year period performance period, which ended on February 1, 2025.

The time-vested portion of the 2022-2024 LTIP vests in four annual installments, with the remaining installment vesting on April 1, 2026.

On March 19, 2025, the Compensation Committee approved a grant of awards, effective April 1, 2025, equal to $ 2.4 million for the achievement of the performance target for the 2022-2024 LTIP.

The award was granted in a combination of 50 % cash and 50 % restricted stock units ("RSUs").

All awards were subject to further vesting through August 31, 2025.

In connection with the grant of 799,349 RSUs, the Company reclassified $ 1.0 million of its liability accrual from “Accrued expenses and other current liabilities” to “Additional paid-in capital” in the first quarter of fiscal 2025.

See the Consolidated Statement of Changes in Stockholders’ Equity.

At November 1, 2025 , the Company had three active LTIPs:

the 2023-2025 LTIP, the 2024-2026 LTIP and the 2025-2027 LTIP.

At May 2, 2026 , the Company had two LTIPs with active performance periods:

the 2024-2026 LTIP and the 2025-2027 LTIP.

While the performance period under the 2023-2025 LTIP was completed at the end of fiscal 2025, the remaining tranche of the time-based awards will not vest until April 1, 2027.

The time-based awards under each LTIP were granted in a combination of 50 % RSUs and 50 % cash.

Performance targets for the 2023-2025 LTIP, the 2024-2026 LTIP and the 2025-2027 LTIP were established and approved by the Compensation Committee with an effective date of May 1, 2023, April 1, 2024, and April 1, 2025, respectively.

Performance targets for the 2024-2026 LTIP and the 2025-2027 LTIP were established and approved by the Compensation Committee with an effective date of April 1, 2024, and April 1, 2025, respectively.

The performance period for each LTIP is three years .

Awards for any achievement of performance targets will not be granted until the performance targets are achieved and then will be subject to an additional service requirement through A ugust 31, 2026, August 31, 2027 and August 31, 2028, respectively.

The time-based awards under the 2023-2025 LTIP, the 2024-2026 LTIP, and the 2025-2027 LTIP vest in four equal installments through April 1, 2027, April 1, 2028 and April 1, 2029, respectively.

Assuming that the Company achieves the performance targets at target levels and all time-based awards vest, the compensation expense associated with the 2023-2025 LTIP, 2024-2026 LTIP and 2025-2027 LTIP is estimated to be approximately $ 4.8 million, $ 4.9 million and $ 4.9 million, respectively.

Approximately half of the compensation expense for each LTIP relates to the time-based awards, which are being expensed straight-line over 48 months, 49 months and 49 months, respectively.

At November 1, 2025 , the Company had accrued $ 0.3 million under the 2024-2026 LTIP and $ 0.1 million under the 2025-2027 LTIP for performance-based awards.

There was no accrual for performance-based awards under the 2023-2025 LTIP.

If the Company completes the Merger, as discussed in Note 12, Agreement and Plan of Merger , the performance-based awards would be cancelled and a payout equal to actual achievement, on a pro-rated basis, on the date of closing would be made to eligible participants.

The time-based awards under the 2024-2026 LTIP and the 2025-2027 LTIP vest in four equal installments through April 1, 2028 and April 1, 2029, respectively.

Assuming that the Company achieves the performance targets at target levels and all time-based awards vest, the compensation expense associated with the 2024-2026 LTIP and 2025-2027 LTIP is estimated to be approximately $ 4.9 million for each LTIP.

Approximately half of the compensation expense for each LTIP relates to the time-based awards and is being expensed straight-line over 49 months.

At May 2, 2026 , there was no accrual for performance-based awards under either LTIP.

Stock-Based Compensation

3 unchanged sentences

A grant of a full-value award, including, but not lim ited to, restricted stock, restricted stock units and deferred stock, will reduce the outstanding reserve by a fixed ratio of 1.9 shares for every share granted.

At the Company's Annual Meeting of Stockholders held on August 8, 2024, the Company's stockholders approved an increase of 6,150,000 shares authorized for future grant under the 2016 Plan.

At November 1, 2025 , 21,270,538 shares were authorized under the 2016 Plan, of which 4,266,280 shares remained available for grant.

At May 2, 2026 , 21,270,538 shares were authorized under the 2016 Plan, of which 3,700,396 shares remained available for grant.

The 2016 Plan is administered by the Compensation Committee.

2 unchanged sentences

Except with respect to 5 % of the shares available for awards under the 2016 Plan, no award will become exercisable unless such award has been outstanding for a minimum period of one year from its date of grant.

The following tables summarize the share activity and stock option activity for the first nine months of fiscal 2025:

The following tables summarize the share activity and stock option activity for the first three months of fiscal 2026:

Share Units (3)

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Outstanding non-vested shares at end of quarter

(1) During the first nine months of fiscal 2025, grants primarily related to the grant of time-based RSUs under its 2025-2027 LTIP and the grants of awards under the 2022-2024 LTIP in connection with the achievement of the performance target.

See Note 5, Long-Term Incentive Plans .

Vested and expected to vest at end of year

(1) As a result of net share settlements, of the 406,963 RSUs that vested, 293,100 shares of common stock were issued.

(2) The 53,074 shares of deferred stock, with a fair value of $ 36,250 , represent director compensation in lieu of cash in accordance with the director's irrevocable election.

The shares of deferred stock will be issued upon the director's separation from service.

(3) On August 11, 2023, the Company granted 573,000 performance share units ("PSUs") in connection with the extension of Mr.

The shares of deferred stock will be issued upon the earlier of the director's separation from service or a change in control.

(3) On August 11, 2023, the Company granted 573,000 PSUs in connection with the extension of Mr.

Kanter's employment agreement.

The award consists of nine tranches, with the first tranche vesting if and when the 3 0-

d ay volume-weighted closing price of the Company's common stock is equal to or greater than $ 6.50 per share.

The award consists of nine tranches, with the first tranche vesting if and when the 30-day volume-weighted closing price of the Company's common stock is equal to or greater than $ 6.50 per share.

Each subsequent tranche will vest upon achievement of the 30-day volume-weighted closing price of the Company's common stock in $0.25 increments with the ninth tranche vesting when such price is equal to or greater than $ 8.50 per share.

Any unvested PSUs will expire on August 11, 2026.

The $ 2.4 million grant-date fair value was expensed over the respective derived service periods of each tranche which ranged from 12 to 13 months.

The respective fair value and derived service periods assigned to the PSUs were determined using a Monte Carlo model based on:

a weighted historical volatility of 57.8 %, a term of 3 years, stock price on the date of grant of $ 4.98 per share, a risk-free rate of 4.6 % and a cost of equity of 11.0 %.

Any unvested PSUs will expire on August 11, 2026, or earlier if there is a separation of service in accordance with the terms of the agreement.

The $ 2.4 million fair value was expensed over the respective derived service periods of each tranche which ranged from 12 to 13 months.

The respective fair value and derived service periods assigned to the PSUs were determined using a Monte Carlo model based on a weighted historical volatility of 57.8 %, a term of 3 years, stock price on the date of grant of $ 4.98 per share, a risk-free rate of 4.6 % and a cost of equity of 11.0 %.

(4) Represented compensation, with a fair value of $ 101,248 , to certain directors, who are required to receive shares in lieu of cash, in order to satisfy their minimum equity ownership under the Non-Employee Director Compensation Plan.

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Non-Employee Director Compensation Plan

The Company granted 52,013 shares of common stock, with a fair value of approximately $ 84,555 , to certain of its non-employee directors as compensation in lieu of cash in the first nine months of fiscal 2025.

The Company granted 5,856 shares of common stock, with a fair value of approximately $ 4,000 , to certain of its non-employee directors as compensation in lieu of cash in the first three months of fiscal 2026.

These shares are in addition to any shares that may be granted under the 2016 Plan related to the requirement to receive equity if a director has not yet satisfied his or her minimum equity ownership requirement under the Non-Employee Director Compensation Plan.

Stock Compensation Expense

The Company recognized total stock-based compensation expense of $ 1.1 million and $ 2.3 million for the first nine months of fiscal 2025 and fiscal 2024, respectively.

The total compensation cost related to awards not yet recognized as of November 1, 2025 was approximately $ 2.1 million, net of estimated forfeitures, which will be expensed over a weighted average remaining life of 32 months.

The Company recognized total stock-based compensation expense of $ 0.3 million and $ 0.3 million for the first three months of fiscal 2026 and fiscal 2025, respectively.

The total compensation cost related to awards not yet recognized as of May 2, 2026 was approximately $ 1.4 million, net of estimated forfeitures, which will be expensed over a weighted average remaining life of 28 months.

Equity and Earnings per Share

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For the Three Months Ended

For the Nine Months Ended

November 1, 2025

November 2, 2024

November 1, 2025

November 2, 2024

(in thousands )

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Diluted weighted average common shares outstanding

(1) Common stock equivalents of 2.2 million and 2.3 million for the third quarter and first nine months of fiscal 2025, respectively, and 2.7 million for the third quarter of fiscal 2024 were excluded from the determination of diluted weighted average common shares outstanding due to the net loss reported in each period.

(1) Common stock equivalents of 0.7 million and 2.5 million for the first three months of fiscal 2026 and fiscal 2025, respectively, were excluded from the determination of diluted weighted average common shares outstanding due to the net loss reported in each period.

The following potential common stock equivalents were excluded from the computation of diluted earnings per share in each period, because the exercise price of such options was greater than the average market price per share of common stock for the respective periods or because the unearned compensation associated with stock options and restricted stock units had an anti-dilutive effect.

For the Three Months Ended

For the Nine Months Ended

November 1, 2025

November 2, 2024

November 1, 2025

November 2, 2024

(in thousands, except exercise prices)

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$ 1.85 - $ 6.59

$ 4.48 - $ 6.59

The above options, which were outstanding at November 1, 2025, expire from September 11, 2026 to March 20, 2033 .

Excluded from the computation of basic and diluted earnings per share for the third quarter and first nine months of fiscal 2025 and fiscal 2024 were 573,000 performance stock units.

The above options, which were outstanding at May 2, 2026, expire from September 11, 2026 to March 20, 2033 .

Excluded from the computation of basic and diluted earnings per share for the first quarter of fiscal 2026 and fiscal 2025 were 573,000 performance stock units.

These performance-based awards will be included in the computation of basic and diluted earnings per share if, and when, the respective performance targets are achieved.

In addition, 553,078 shares and 466,225 shares of deferred stock at November 1, 2025 and November 2, 2024 , respectively, were excluded from the computation of basic earnings per share.

In addition, 642,431 shares and 493,327 shares of deferred stock at May

2, 2026 and May 3, 2025 , respectively, were excluded from the computation of basic earnings per share.

Shares of deferred stock are not considered issued and outstanding until the vesting date of the deferral period.

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Each quarter, the Company updates its estimate of the annual effective tax rate and makes a year-to-date adjustment to the provision.

For the first nine months of fiscal 2025 and 2024, the Company’s effective tax rate was 19.8 % and 38.8 % , respectively.

The effective tax rate for the first nine months of fiscal 2025 reflects an annual effective tax rate estimate of 18.3 %, net of discrete items and the impact of permanent book-to-tax differences as well as the impact of adjustments to our net operating losses reflected in our recently filed tax returns.

On July 4, 2025, the One Big Beautiful Bill Act (the “OBBBA”) was enacted in the U.S.

The legislation permanently extends certain expiring provisions of the Tax Cuts and Jobs Act, alters aspects of the U.S.

international tax regime, and reinstates certain business tax provisions, among other changes.

The OBBBA has multiple effective dates, with provisions becoming effective in 2025 through 2027.

There was no impact to the consolidated financial statements for the third quarter and first nine months of fiscal 2025 .

The Company is assessing OBBBA but does not expect it to have a material impact on the Company's consolidated financial statements.

The Company’s deferred tax assets primarily relate to federal and state net operating loss carryforwards.

Realization of these assets depends on the generation of future taxable income.

During the fourth quarter of fiscal 2025, the Company recorded a full valuation reserve against its net deferred assets.

While the Company believed that profitability would return over the long term, the Company was forecasting operating losses in the near term.

At May 2, 2026, management continues to conclude that the negative evidence outweighs available positive evidence regarding realizability of its deferred tax assets and that the full valuation allowance should remain against its net deferred tax assets.

For the first quarter of fiscal 2026, the Comp any’s effective tax rate was ( 1.1 )% as compared to an effective tax rate of 39.7 % , for the first quarter of fiscal 2025.

Because of the full valuation allowance against the net deferred tax assets, the effective tax rate for the first quarter of fiscal 2026 primarily reflects a provision for state margin tax, based on gross receipts less certain deductions.

The effective tax rate for the first three months of fiscal 2025 reflected the impact of permanent book-to-tax differences.

Fair Value Measurement

At November 1, 2025 and February 1, 2025, the Company held U.S.

At May 2, 2026 and January 31, 2026, the Company held U.S.

treasury bills, which were classified as held-to-maturity and carried at amortized cost.

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Inputs (Level 3)

At May 2, 2026:

Short-term investments

At November 1, 2025

At February 1, 2025

At January 31, 2026:

Cash and cash equivalents:

Short-term investments

Commitments and Contingencies

On February 20, 2026, the U.S.

Supreme Court ruled that certain tariffs imposed by the current administration under the International Emergency Economic Powers Act were unlawful.

Following this ruling, the U.S.

Court of International Trade directed U.S.

Customs and Border Protection ("CBP") to establish a process for the submission and review of refund claims related to affected tariffs.

In April 2026, CBP launched an online portal through which companies may submit refund requests.

During the first quarter of fiscal 2026, the Company submitted a claim seeking a refund of approximately $ 4.0 million related to tariffs previously paid.

The claim is subject to review and validation by CBP, and the approval, timing, and amount of any potential refund and recovery remain uncertain.

The Company expects to recognize any recovery when receipt is considered realizable.

Tariffs subject to the refund claim were previously recorded as a component of cost of goods sold or capitalized into inventory, as applicable.

Upon recognition of any approved refund, the portion attributable to inventory previously sold will be recognized as a reduction of cost of goods sold, with any remaining amount recognized as a reduction of inventory.

The scope, duration, and rates of existing and proposed tariff measures, as well as the potential for modifications, suspensions, or retaliatory trade actions, remain uncertain.

These actions could impact the Company’s operations, supply chain, and cost structure.

The Company is continuing to monitor these developments and assessing the potential impact on its business, financial condition, and results of operations.

Segment Disclosures

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The CODM evaluates the performance of the Company's operating segments and allocates resources based on sales performance, merchandise margins and 4-wall contribution, a non-GAAP measure.

The accounting policies are the same as those described in Note A, Summary of Significant Accounting Policies included in the Company's consolidated financial statements for the year ended February 1, 2025.

The Company defines 4-wall contribution, which the CODM considers the performance measure for segment profitability, as segment revenues less cost of goods sold, occupancy costs and selling expenses.

We aggregate our two operating segments because they are economically similar.

Both segments sell the same merchandise, at the

same pricing, and share the same customer base, production, advertising spend and distribution.

Both segments sell the same merchandise, at the same pricing, and share the same customer base, production, advertising spend and distribution.

Our distribution channels are available to our customers regardless of how they initiate their transaction.

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The 4-wall contribution margin for each segment is materially similar, further supporting the economic similarity of these two operating segments and that no additional value would be provided by reporting the segments separately.

The following table is a summary of our segment disclosures and a reconciliation of 4-wall contribution to net income:

The following table is a summary of our segment disclosures and a reconciliation of 4-wall contribution to net loss:

For the Three Months Ended

For the Nine Months Ended

November 1, 2025

November 2, 2024

November 1, 2025

November 2, 2024

(in thousands)

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Distributing and supporting G&A

Transaction-related costs

Depreciation and amortization

Interest income, net

Income (loss) before provision (benefit) for income taxes

Loss before provision (benefit) for income taxes

Provision (benefit) for income taxes

Net income (loss)

The CODM does not receive information about assets at the segment level because the Company's assets are managed at a consolidated level by department as opposed to by segment.

Subsequent Event

Agreement and Plan of Merger

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The Merger Agreement provides that, on the terms and subject to the conditions set forth therein, Merger Sub will merge with and into FBB, with FBB continuing as the surviving corporation as a wholly owned subsidiary of the Company (the “Merger”).

FullBeauty Brands, a private company, is a leading retailer in size inclusive fashions for plus-size women and big + tall men.

At the effective time of the Merger, each share of common stock, par value $ 0.01 per share, of FBB (“FBB Common Stock”) will be converted into the right to receive that number of fully paid and nonassessable shares of the common stock, par value $ 0.01 per share, of the Company (the “DXL Common Stock”) equal to the Exchange Ratio, as defined in the Merger Agreement.

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Following the consummation of the Merger, holders of FBB Common Stock will own 55 % of the combined company and holders of DXL Common Stock will own 45 % of the combined company.

The consummation of the Merger is subject to DXL and FBB stockholder approval and other customary closing conditions and is expected to close in the first half of 2026.

On June 3, 2026, subsequent to the end of the first quarter of fiscal 2026, the Company issued a press release to provide an update on the status of its Merger with FullBeauty Brands.

The Company's Board of Directors (the "Board") has reevaluated the previously announced Merger and is engaging with FullBeauty Brands in constructive discussions to determine the best path forward.

As part of its ongoing fiduciary duties to the Company's stockholders, the Board, with the assistance of external financial and legal advisors, has conducted a comprehensive reevaluation of the Merger.

The Board continues to believe in the industrial logic of the combination.

However, given the increasingly challenging consumer environment since the execution of the Merger Agreement on December 11, 2025 and FullBeauty Brands' indebtedness, the Board believes that the existing terms of the Merger Agreement are not in the best interests of the Company's stockholders.

Costs incurred in connection with this Merger, primarily related to professional service fees, of $ 1.2 million and $ 0.1 million, were included in "Transaction-related costs" on the Consolidated Statement of Operations for the first quarter of fiscal 2026 and fiscal 2025, respectively.

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

What changed 10-Q

Item 1. Financial Statements