What changed in this filing

/stocks — the workspaceLOADING

Item 1. Business

2025-03-21 compared with 2024-03-22 · 172 added, 169 removed, 532 unchanged (39% of the section changed)

Shoe Carnival, Inc.

is one of the nation’s largest omnichannel sellers of family footwear.

is one of the nation’s largest omnichannel sellers of footwear for the family, and our goal is to be the leading family footwear retailer in the United States.

We operate a retail focused business model that aims to deliver the leading footwear shopping experience with the national name brands desired by our customers.

3 unchanged sentences

Since 1993, we have earned a profit in every year except 1995.

As part of our long-term growth strategy, we have invested significantly in customer relationship management (“CRM”) capabilities, e-commerce infrastructure, modernization of our store fleet, and acquisitions as key drivers of profitable growth.

Since Fiscal 2019, our Diluted Net Income per Share has increased 84%, Gross Profit margin expanded 570 basis points, and Net Sales grew 13%.

As of our Fiscal 2023 year end, we operated 400 stores across 35 states and Puerto Rico under our Shoe Carnival and Shoe Station banners.

As part of our long-term growth strategy, we have invested, and will continue to invest, significantly in acquisitions, our emerging rebanner strategy, our customer relationship management (“CRM”) capabilities, our e-commerce infrastructure and modernization of our store fleet as key drivers of profitable growth.

As of our Fiscal 2024 year end, we operated 430 stores across 36 states and Puerto Rico.

Including e-commerce sales in close proximity to a physical store, our comparable physical stores generated an average of $2.8 million in Net Sales in Fiscal 2024 and approximately $246 in Net Sales per square foot.

We believe there is potential within our existing markets to grow our store count to over 500 stores in 2028 through both organic and acquired store growth.

We believe this opportunity to increase our scale, together with stable operating income margins, will continue to drive shareholder value and our future earnings potential.

Subsequent to year end, on February 13, 2024, we furthered our acquisition strategy by acquiring all of the stock of Rogan Shoes, Incorporated, a Wisconsin corporation ("Rogan's").

Rogan’s adds 28 more physical stores and an additional distribution center to our portfolio.

Rogan's will be integrated into our Shoe Station banner and our current plan is to brand and operate these stores using both the Rogan’s and Shoe Station tradenames.

More information about this subsequent event can be found in Note 16 - “Subsequent Events” in our Notes to Consolidated Financial Statements contained in PART II, ITEM 8 of this Annual Report on Form 10-K.

In Fiscal 2023, our Net Sales were $1.18 billion and our ambition is to achieve omnichannel sales in excess of $2 billion in 2028.

Our fiscal year is a 52/53 week year ending on the Saturday closest to January 31.

Unless otherwise stated, references to years 2023, 2022 and 2021 relate to the fiscal years ended February 3, 2024 ("Fiscal 2023"), January 28, 2023 ("Fiscal 2022") and January 29, 2022 ("Fiscal 2021"), respectively.

Fiscal 2019 is the fiscal year ended February 1, 2020.

Fiscal 2020 is the fiscal year ended January 30, 2021.

Unless otherwise stated, references to years 2024, 2023 and 2022 relate to the fiscal years ended February 1, 2025 (“Fiscal 2024”), February 3, 2024 (“Fiscal 2023”) and January 28, 2023 (“Fiscal 2022”), respectively.

Fiscal 2021 is the fiscal year ended January 29, 2022, Fiscal 2020 is the fiscal year ended January 30, 2021 and Fiscal 2019 is the fiscal year ended February 1, 2020.

Fiscal 2023 consisted of 53 weeks while all other years presented and discussed consisted of 52 weeks.

References to our store banners “Shoe Carnival” and “Shoe Station” are to the individual banners, not the entire company.

References to “Shoe Carnival,” “Shoe Station” and “Rogan’s” are to the individual store sets, not the entire company.

References to “we,” “us,” “our” and the “Company” in this Annual Report on Form 10-K refer to Shoe Carnival, Inc.

10 unchanged sentences

As of our Fiscal 2024 year end, we operated 360 Shoe Carnival stores located across 35 states and Puerto Rico and offered online shopping at www.shoecarnival.com.

On December 3, 2021, we acquired the physical stores and substantially all of the other assets and liabilities of privately-held, family-owned Shoe Station, Inc.

("Shoe Station").

The Shoe Station assets were acquired for approximately $70.4 million, funded with cash on hand.

This acquisition was the first in our history.

As of our Fiscal 2023 year end, we operated 28 stores across six states in the Southeast under the Shoe Station banner, inclusive of the 21 stores acquired and seven additional stores opened since the acquisition.

The Shoe Station e-commerce website, www.shoestation.com, went live on our e-commerce platform in early February 2023.

The addition of this banner has created a complementary retail platform for us to serve a broader base of family footwear customers in both urban and suburban demographics.

Net Sales attributed to the Shoe Station banner were $104.5 million in Fiscal 2023, $99.9 million in Fiscal 2022 and $16.6 million from the acquisition date through January 29, 2022 in Fiscal 2021.

The Rogan's acquisition will be included as part of the Shoe Station banner, and with other planned new store growth, we expect our Net Sales from this banner to substantially grow in Fiscal 2024.

More information on the Shoe Station acquisition can be found in Note 3 - "Acquisition of Shoe Station" in our Notes to Consolidated Financial Statements contained in PART II, ITEM 8 of this Annual Report on Form 10-K.

Net Sales from our Shoe Carnival banner declined mid-single digits in Fiscal 2024 compared to Fiscal 2023.

This decline was in line with our view of family footwear industry trends.

In Fiscal 2021, we acquired our first 21 Shoe Station stores.

Our Shoe Station concept targets a more affluent footwear customer and has a strong track record of capitalizing on emerging footwear fashion trends and introducing new brands

that meet the needs of the target customer.

Our Shoe Station bannered stores’ Net Sales grew mid-single digits in Fiscal 2024 compared to Fiscal 2023, driven by new store growth and a low-single digit comparable stores Net Sales increase, outpacing our view of family footwear industry trends.

As of our Fiscal 2024 year end, we operated 42 Shoe Station bannered stores across seven states in the Southeast, inclusive of the 21 stores acquired in 2021, 11 additional stores opened since the acquisition and ten stores rebannered in Fiscal 2024, as described below, and offered online shopping at www.shoestation.com.

In February 2024, we acquired Rogan Shoes, Incorporated (“Rogan’s”).

The Rogan's acquisition immediately positioned us as the family footwear market leader in Wisconsin and established a store base in Minnesota, creating additional expansion opportunities.

Net Sales attributed to Rogan's were $80.3 million in Fiscal 2024, consistent with our expectations, and Operating Income attributed to Rogan’s in Fiscal 2024 exceeded our $10 million target by more than 20%.

As of our Fiscal 2024 year end, we operated the 28 Rogan’s stores we acquired, which are located in Wisconsin, Illinois and Minnesota.

More information about the Rogan’s acquisition can be found in Note 3 — “Acquisition of Rogan Shoes” in our Notes to Consolidated Financial Statements contained in PART II, ITEM 8 of this Annual Report on Form 10-K.

Rebanner Strategy

We have been evaluating customer analytics and market data and developing strategies to expand Shoe Station since we acquired the chain in December 2021.

For the past two fiscal years, Shoe Station has been a market leader in the Southeast, and, according to industry data, Shoe Station has been the industry’s fastest growing retailer.

During the same period, our Shoe Carnival banner and the family footwear industry experienced comparable stores Net Sales declines.

We believe that a national expansion opportunity exists in markets where the customer and/or market characteristics align better with our Shoe Station concept, rather than our Shoe Carnival concept.

A 10-store in-market test was completed during Fiscal 2024, where we closed underperforming Shoe Carnival stores and opened new Shoe Station stores in those markets.

The customer response and business results exceeded our success criteria on an aggregated basis, with sales and profit contribution over 10% higher at the new Shoe Station stores versus Shoe Carnival stores.

In March 2025, we announced a new long-term strategy to rapidly scale up Shoe Station into a national footwear and accessories leader.

The first investment phase will rebanner 175 stores to the Shoe Station banner over the next 24 months.

Once this phase is complete, we expect to operate 218 Shoe Station stores, representing 51% of our present store fleet.

We expect the long-term prospects of this strategy will result in significant market share growth in areas where we have underperformed with our Shoe Carnival concept.

We also expect to enter new markets where we do not compete today as a future phase of the expansion plan.

The Shoe Station rebanner strategy is expected to create significant financial leverage from a more productive store base.

During Fiscal 2025, we expect to rebanner between 50 to 75 Shoe Carnival stores to Shoe Station stores.

The Fiscal 2025 investment for the rebanners is forecasted to decrease Fiscal 2025 Operating Income by between $20 to $25 million, inclusive of store closing costs, amortization of new store construction costs, a four-to-six-week store closure period through each store’s grand opening and customer acquisition costs.

We expect that this Fiscal 2025 investment will be recovered over a two-to-three-year period following a store’s grand opening.

In Fiscal 2027, our expectation is that Net Sales from these rebannered stores will be over 10% higher and profit contribution will increase over 20% compared to the stores before they were rebannered.

In Fiscal 2026 and early Fiscal 2027, we plan to scale up further and complete 100 or more rebanners, with a first-year investment forecast of between approximately $22 to $27 million and a similar path to payback of the investment of approximately two-to-three years.

Our Diversified Sales Mix

3 unchanged sentences

Non-Athletics:

Our Strategic Growth Initiatives

Increasing market penetration by adding new stores is a key component of our growth strategy.

We believe our current store footprint provides for near-term fill-in opportunities within existing markets as well as longer-term growth to new markets within the United States.

In Fiscal 2023, we opened five new stores (one Shoe Carnival store and four Shoe Station stores) within existing markets.

We aim to operate approximately 30 new stores in Fiscal 2024, inclusive of integrating the 28 Rogan's stores acquired on February 13, 2024.

We are targeting operating at least 500 stores in 2028.

This increased scale will be accomplished through a combination of both organic and acquired store growth with particular focus on the Shoe Station banner.

Store Modernization

Another key component to growing our Net Sales is the modernization of our Shoe Carnival store fleet.

Other Initiatives

Store Growth and Modernization

In Fiscal 2024, we opened four new Shoe Station branded stores, permanently closed two Shoe Carnival branded stores and acquired 28 Rogan’s stores.

Increasing market penetration by adding new stores is a key component of our long-term growth strategy.

In the near-term, however, we expect new store openings may continue to be impacted by macroeconomic uncertainty, our ability to identify desirable locations, increased focus on our emerging rebanner strategy and focus on our acquisition strategy.

In Fiscal 2023 and Fiscal 2022, our capital expenditures were $56.3 million and $77.3 million, respectively, with a primary focus on store modernization and new stores.

Our new store design is viewed as a differentiator by certain strategic vendor partners and has provided us an opportunity to increase access to branded merchandise in the near term.

As of Fiscal 2023 year end, approximately 60% of our Shoe Carnival store modernization was complete.

We expect to continue to modernize additional Shoe Carnival stores in Fiscal 2024.

Total capital expenditures are expected to be in a range of $25 million to $35 million in Fiscal 2024 and lower than prior years as the store modernization program nears completion.

Our modernized store design has been viewed as a differentiator by certain strategic vendor partners and has provided us an opportunity to increase access to branded merchandise.

Total capital expenditures were $33.2 million in Fiscal 2024 and lower than prior years as our store modernization program was completed.

E-commerce Growth

5 unchanged sentences

We have completed the technology migration for both banners to a single platform hosted by a leading provider.

We anticipate these enhancements will increase user engagement and conversion, enhance the ease of navigation and improve overall functionality compared to the legacy website design.

We continue to expect our e-commerce platform to be a significant sales channel for us.

We continue to expect our e-commerce platform, which operates both our Shoe Carnival and Shoe Station websites, to be a significant sales channel for us.

Our goal is for our e-commerce sales channel to provide between 10% and 15% of enterprise-wide merchandise sales, versus a pre-pandemic 6% in Fiscal 2019.

E-commerce sales represented approximately 10% of our merchandise sales in Fiscal 2023 and Fiscal 2022, and 12% in Fiscal 2021.

E-commerce sales represented approximately 10% of our merchandise sales in each of Fiscal 2024, Fiscal 2023 and Fiscal 2022.

Customer Relationship Management (“CRM”)

4 unchanged sentences

Additionally, our CRM program allows us to gain a deeper understanding of the brands and categories that our high-value customers consistently purchase so that we can continue to meet customer needs and demand at a geographic and store level.

Our CRM program allows us to drive customer retention by delivering to each customer more individualized shopping opportunities and experiences and aids in gaining a better understanding of our existing customer base as well as

identifying new customers.

We expect segmentation and activation of our high-value customers through data analysis and targeting the broader market of ‘look-a-like’ customers to continue to play a key role in our growth.

3 unchanged sentences

We are focused on expanding our Shoe Perks enrollment.

In Fiscal 2023, our Shoe Perks membership, including Shoe Station customers, grew to 34.5 million members, representing an increase in new customers of 7% compared to Fiscal 2022 year end.

In Fiscal 2023, purchases from Shoe Perks members were approximately 71% of our comparable Net Sales through our Shoe Carnival bannered stores.

We believe our Shoe Perks program provides a tremendous opportunity to communicate, build relationships and engage with our most loyal shoppers and increase our customer touch points, which we believe will result in long-term sales gains.

In Fiscal 2024, our Shoe Perks membership, including Shoe Station and Rogan's customers, grew to 36.8 million members, representing an increase in customers of 7% compared to Fiscal 2023 year end.

In Fiscal 2024, purchases from Shoe Perks members were approximately 73% of our comparable stores Net Sales.

We believe our Shoe Perks program provides an opportunity to communicate, build relationships and engage with our most loyal shoppers and increase our customer touch points, which we believe will result in long-term sales gains.

Our most loyal customers, those who qualify for our “Gold” tier, receive additional rewards and incentives.

The average transaction value for our Gold tier customers was approximately 43% higher than non-Gold tier Shoe Perks members in Fiscal 2023.

The average transaction value for our Gold tier customers was significantly higher than non-Gold tier Shoe Perks members in Fiscal 2024.

Strong and Diversified Vendor Partnerships

We offer merchandise from a broad range of over 270 vendor partners.

In Fiscal 2023, Nike, Inc.

(“Nike”), Skechers U.S.A., Inc.

(“Skechers”) and Crocs, Inc.

("Crocs") collectively accounted for approximately 45% of our Net Sales in Fiscal 2023.

Nike and Skechers collectively accounted for approximately 27% in Fiscal 2022 and 39% in Fiscal 2021.

(“Crocs”) collectively accounted for approximately 48% of our Net Sales in Fiscal 2024 and 45% of our Net Sales in Fiscal 2023.

Nike accounted for approximately 24% of our Net Sales in Fiscal 2024, 20% in Fiscal 2023 and 14% in Fiscal 2022;

Skechers accounted for approximately 13% of our Net Sales in Fiscal 2024, 14% in Fiscal 2023 and 13% in Fiscal 2022;

and Crocs accounted for approximately 11% of our Net Sales in Fiscal 2023.

and Crocs accounted for approximately 11% of our Net Sales in both Fiscal 2024 and Fiscal 2023.

We continually work to strengthen our brand offerings and our relationships with our key vendors.

1 unchanged sentence

Our Competitive Strengths

We believe our operational and financial success is due to a number of key competitive strengths that make our Shoe Carnival and Shoe Station banners destinations of choice for our family channel footwear consumer.

We believe our operational and financial success is due to a number of key competitive strengths that make our stores destinations of choice for our family channel footwear consumer.

Digital Media to Build Brand Awareness

Our goal is to communicate a consistent brand image for both of our banners across all aspects of our operations and throughout our marketing strategies.

Our goal is to communicate a consistent brand image across all aspects of our operations and throughout our marketing strategies.

We highlight our banners and the name brands we carry, including specific styles of product, using lifestyle and product imagery to showcase merchandise brands.

7 unchanged sentences

Merchandise is typically shipped to each store location once per week.

within the continental United States, a dedicated carrier, with occasional use of common carriers, handles the majority of shipments.

For stores within the continental United States, a dedicated carrier, with occasional use of common carriers, handles the majority of shipments.

We leverage these investments with third-party managed software tailored to our specific needs to track merchandise during the transportation and distribution process.

During Fiscal 2023, 98% of merchandise was received into our Evansville distribution center, with a much smaller percentage of merchandise being either directly drop shipped to customers or sent directly to a store location.

During Fiscal 2024, over 90% of merchandise was received into our Evansville distribution center, with a much smaller percentage of merchandise being directly drop shipped to customers, sent directly to a store location or received into Rogan’s distribution process.

Effective beginning in February 2025, inbound shipments for the Rogan’s locations acquired in Fiscal 2024 were integrated into our centralized buying and distribution process.

Additional information about our Evansville distribution center can be found in PART I, ITEM 2, “Properties” of this Annual Report on Form 10-K.

6 unchanged sentences

Our stores are found in high traffic shopping areas and are generally located in open-air shopping centers.

On average, our Shoe Carnival physical stores are approximately 10,900 square feet and carry inventory of approximately 32,500 pairs of shoes per location.

On average, our Shoe Station physical stores are approximately 17,800 square feet and carry an average inventory of 43,100 pairs of shoes per location.

On average, our physical stores are approximately 11,400 square feet and carry inventory of approximately 28,000 pairs of shoes per location.

More information about our store locations and other properties can be found in PART I, ITEM 2, “Properties” of this Annual Report on Form 10-K.

5 unchanged sentences

These digital screens further enhance the in-store shopping experience and provide another opportunity for our vendors to compete for in-store advertising.

We believe our distinctive shopping experience gives us important competitive advantages, including the building of a loyal, repeat customer base, the creation of word-of-mouth advertising, and enhanced sell-through of in-season goods.

Broad Merchandise Assortment

Our product assortment is comprised primarily of on-trend branded footwear for the entire family and includes dress and casual shoes, sandals, boots and a wide assortment of athletic shoes.

Our physical stores carry shoes in two general categories – athletics and non-athletics with subcategories for men's, women's and children's shoes, as well as a broad range of accessories.

Our physical stores carry shoes in two

general categories – athletics and non-athletics with subcategories for men's, women's and children's shoes, as well as a broad range of accessories.

Our e-commerce platform offers customers a large assortment of products in all categories of footwear with an increased depth of sizes and colors that may not be available in all stores.

Although the core merchandise assortment tends to be similar for each store, there are differences between our store banners, and to some extent, there is further differentiation by store under each banner, reflecting each store’s unique demographics and customer preferences.

There are differences in merchandise between our store banners, and, to some extent, there is further differentiation by store under each banner, reflecting each store’s unique demographics and customer preferences.

Our knowledge of these customer preferences, combined with our vendor relationships and distribution process, allows us to react to emerging trends or special events.

5 unchanged sentences

Using this information, our merchandise managers meet regularly with vendors to compare product sales and margins and return on inventory investment against previously stated objectives.

We believe timely access to key business data has enabled us to drive our comparable store sales, manage our markdown activity and improve inventory turnover.

We believe timely access to key business data has enabled us to manage our promotional intensity and positively impact our comparable stores Net Sales and inventory turns.

Efficient E-commerce Order Management and Fulfillment (Ship-From-Store and Vendor Drop Ship Program)

9 unchanged sentences

Competitive Pricing For Our Customers

Our customer is primarily a value-conscious consumer seeking name brand footwear across all ages, with our Shoe Station banner targeting a higher price point and more suburban customer.

Our Shoe Carnival customer is primarily a value-conscious consumer seeking name brand footwear across all ages, with our Shoe Station and Rogan’s concepts targeting a higher price point and more affluent customer.

We believe that by offering a wide selection of popular styles of primarily name brand merchandise at competitive prices, we generate broad customer appeal.

5 unchanged sentences

We compete with off-price retailers, mass merchandisers and discount stores by offering a wider and deeper selection of merchandise.

Many of our competitors are significantly larger than we are in terms of Net Sales, and many can access the capital markets with greater speed and efficiency than we can.

our competitors are significantly larger than we are in terms of Net Sales, and many can access the capital markets with greater speed and efficiency than we can.

Culture and Human Capital Management

1 unchanged sentence

Our commitment to, and investment in, a strong performance culture is paramount to our long-term sustainability and success.

Workforce Diversity

We serve a diverse customer base and seek diversity in and among our workforce in all areas, from our stores to our Evansville distribution center and our corporate offices.

Our Workforce

We are firmly committed to providing equal opportunities in all aspects of employment and believe that all individuals should be treated with respect and dignity.

Diversity is an

important element in our ongoing annual mandatory training for all employees and managers.

We do not tolerate harassment or unlawful discrimination of any kind.

We are dedicated to attracting, developing, maintaining and supporting an inclusive workforce that includes individuals with a wide range of backgrounds, life experiences and cultures.

We believe that these varied experiences enhance our connection with our diverse customer base and enable us to better serve our customers.

We hire, promote and compensate our employees based on merit, experience or other work-related criteria.

We do not tolerate harassment or unlawful discrimination.

Mandatory annual training for all employees empowers our workforce and instills these virtues into our culture.

We have clear policies encouraging strong relationships and protecting open lines of communication with management at every level.

This, coupled with our non-retaliation policy, encourages employees to communicate issues and seek immediate redress of those issues if they should arise.

We understand the value of diversity at all levels, whether of gender, race, ethnicity, background or experience.

As of our Fiscal 2024 year end, our workforce identified as 63% female and 37% male.

1 unchanged sentence

With respect to ethnicity, our leadership team identified as 64% Caucasian and 36% non-Caucasian.

The diversity of our leadership team trends with the diversity of our customer base, which based on recent data from our Shoe Perks customer loyalty program, approximates 70% Caucasian and 30% non-Caucasian and is more female than male.

In our corporate leadership roles (senior director-level employees through our named executive officers), the percentage identifying as female has significantly increased over the last five years from 5% to 24% with several departments, such as human resources, buying and merchandising, technology and accounting, being led by those that identify as female.

We are also focused on the diversity of our Board.

Currently, two of four of our non-employee Board members and two of seven of our total Board identify as female.

We are continuing to refresh our Board and assess long-term succession as well as the diversity of the Board’s collective skill set.

Over the last four years, three board members have transitioned, creating opportunity for new directors who have enhanced our diversity.

We believe our employee-centric culture not only supports higher levels of execution and performance, but also has led to increased retention of key talent.

1 unchanged sentence

We support the first-time jobs for many of our associates where they gain workforce experiences that may grow into long-term careers.

Currently, all of the general managers who operate our Shoe Carnival bannered stores and 94% of our district managers who oversee those general managers were trained, developed and promoted from within.

As of our Fiscal 2023 year end, of our 32 district managers across both banners, 66% have been employed by us for more than 20 years.

The average tenure of the general managers who operate our Shoe Carnival and Shoe Station bannered stores was 14 years as of Fiscal 2023 year end.

Individuals who comprise our leadership team, which includes our named executive officers, vice presidents and senior director-level employees, have been employed by Shoe Carnival or Shoe Station for an average of 18 years.

Currently, nearly all of our general managers and nearly all of our district managers who oversee those general managers were trained, developed and promoted from within.

As of our Fiscal 2024 year end, of our 37 district managers, 68% have been employed by us for more than 20 years.

The average tenure of our general managers was 14 years as of Fiscal 2024 year end.

Individuals who comprise our leadership team, which includes our named executive officers, vice presidents and senior director-level employees, have been employed for an average of 18 years.

Annually we survey a cross-section of employees on matters involving policy and procedure, organizational structure, operating style, commitment to hiring a competent workforce and commitment to integrity and ethical values.

3 unchanged sentences

These include competitive wages and incentives;

an employee stock purchase plan with a discount off the fair value of our common stock;

an employee stock purchase plan with a discount off the fair value of our common

employer-subsidized medical plans with dental and vision benefits;

4 unchanged sentences

We are uniquely focused on training within our store-level, customer-facing operations.

Employees must obtain necessary

certifications in order to be responsible for the keys to a store and eventually to become a general manager.

Employees must obtain necessary certifications in order to be responsible for the keys to a store and eventually to become a general manager.

Our broad-based training program also engages and educates our employees on the following key topics:

6 unchanged sentences

Our Code of Ethics applies to all of our Board members, officers and employees, including our principal executive officer and our principal financial and accounting officer.

Our Code of Ethics is posted on our website at investors.shoecarnival.com/governance/governance-documents.

Our Code of Ethics is posted on the investor relations portion of our website at investors.shoecarnival.com/governance/governance-documents.

We intend to disclose any amendments to the Code of Ethics by posting such amendments on our website.

4 unchanged sentences

During calendar year 2024, we recorded 45 non COVID-related OSHA recordable incidents, an approximate 25% reduction in incidents compared to five years ago.

Excluding the Shoe Station operations, which continue to be integrated into our safety culture, the decrease compared to five years ago was 5%.

Our strategies to address the ever-expanding complexities of protecting customer and employee data and executing our business strategies in an increasingly digital world continue to advance.

3 unchanged sentences

As of our Fiscal 2024 year end, we had approximately 5,500 employees, of which approximately 3,000 were employed on a part-time basis.

The Rogan's acquisition added approximately 600 additional employees as of February 13, 2024.

The number of employees fluctuates during the year primarily due to seasonality.

3 unchanged sentences

Shoe Carnival ® and associated trade dress and related logos, Y-NOT?

® , UNR8ED ® , Solanz ® , Shoe Perks ® , SC Work Wear ® , A Surprise In Store ® , Shoes 2U ® , Laces for Learning ® , Princess Lacey’s Laces ® , Shoe Station ® , Shoe Station Super Store ® and Shoe Station Select ® .

® , UNR8ED ® , Solanz ® , Shoe Perks ® , SC Work Wear ® , Shoes 2U ® , Laces for Learning ® , UNBOX WHAT’S POSSIBLE ® , Shoe Station ® , Shoe Station Super Store ® , Shoe

Station Select ® and Rogan’s Shoes ® .

We believe these marks are valuable and, accordingly, we intend to maintain the marks and the related registrations.

1 unchanged sentence

Environmental

We seek to minimize our impact on the environment and reduce our carbon footprint by actively implementing environmentally-friendly processes throughout our business, including energy efficiency initiatives, waste minimization and the use of recycled materials within our supply chain.

We seek to minimize our impact on the environment by actively implementing environmentally-friendly processes throughout our business, including energy efficiency initiatives, waste minimization and the use of recycled materials within our supply chain.

Our most significant areas of focus are fuel and packaging material used to deliver merchandise to our Evansville distribution center and stores;

the HVAC and lighting systems in our stores, Evansville distribution center and corporate office;

the HVAC and lighting systems in our stores, Evansville distribution center and corporate offices;

and recycling methods.

3 unchanged sentences

We make available free of charge through the investor relations portion of our website at www.shoecarnival.com our Annual Reports on Form 10-K, our Quarterly Reports on Form 10-Q, our Current Reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC.

We have included our website address throughout this filing as textual references only.

The information contained on, or accessible through, our website is not incorporated into this Annual Report on Form 10-K.

We have included our website addresses throughout this filing as textual references only.

The information contained on, or accessible through, any of our websites is not incorporated into this Annual Report on Form 10-K.

This Annual Report on Form 10-K filed with the SEC, including the financial statements and schedules thereto, without the accompanying exhibits, is available without charge to shareholders, investment professionals and securities analysts upon written request.

7 unchanged sentences

Senior Executive Vice President - Chief Merchandising Officer

Executive Vice President - Chief Operating Officer

Senior Executive Vice President - Chief Operating Officer

Senior Vice President, Chief Financial Officer, Treasurer and Secretary

5 unchanged sentences

Weaver served as Chairman and Chief Executive Officer of Jacksonville Jaguars, LTD, a professional football franchise, until January 2012.

Sifford has been employed as Vice Chairman of the Board since October 2021.

Sifford has served as Vice Chairman of the Board since October 2021.

From September 2019 to September 2021, Mr.

30 unchanged sentences

Scibetta began his retail career with Wohl Shoe Company in 1980.

Chilton has been employed as Executive Vice President – Chief Operating Officer since February 2023.

Scibetta will be retiring from the Company, effective April 4, 2025.

Chilton has been employed as Senior Executive Vice President – Chief Operating Officer since February 20, 2025.

From February 2023 to February 20, 2025, Mr.

Chilton served as our Executive Vice President – Chief Operating Officer.

From April 2021 to February 2023, Mr.

15 unchanged sentences

There is no family relationship between any of our Directors or executive officers.

Effective on April 6, 2025, Tanya E.

Gordon will succeed Mr.

Scibetta as our Executive Vice President – Chief Merchandising Officer.

Gordon, age 60, has served as our Senior Vice President – General Merchandising Manager since March 2021.

From March 2020 to March 2021, Ms.

Gordon served as our Vice President – General Merchandising Manager and from March 2014 to March 2020, Ms.

Gordon served as our Vice President – Divisional Merchandising Manager.

In these roles of increasing responsibility, Ms.

Gordon was primarily responsible for our women’s, children’s and accessories merchandise.

Prior to joining the Company, Ms.

Gordon gained merchandising experience at retailers Kohl’s and Parisian, among others.

R isk Factors

6 unchanged sentences

Operational and Strategic Risks

A failure to increase sales at our existing stores may adversely affect our stock price and affect our results of operations.

A number of factors have historically affected, and will continue to affect, our comparable stores Net Sales results, including:

• competition;

• timing of holidays, including sales tax holidays;

• general regional and national economic conditions, including inflation;

• inclement weather and/or unseasonable weather patterns;

• consumer trends, including the impact of higher prices on consumer goods;

• the impact of and government response to pandemics;

• fashion trends;

• changes in our merchandise mix;

• our ability to efficiently distribute merchandise;

• timing and type of, and customer response to, sales events, promotional activities or other advertising;

• the effectiveness of our inventory management;

• new merchandise introductions;

• our ability to execute our business strategy effectively.

Our comparable stores Net Sales results have fluctuated in the past, and in recent years, our Shoe Carnival banner comparable stores Net sales have declined, and we believe such fluctuations or declines may continue.

The unpredictability of our comparable stores Net Sales may cause our revenue and results of operations to vary from quarter to quarter and year to year, and declines in Net Sales or Operating Income may cause our stock price to fluctuate significantly.

We may not realize the expected operating results from, and planned growth of, our Shoe Station banner, including planned growth from our rebanner strategy.

We have rebannered and are planning to continue to rebanner Shoe Carnival stores to Shoe Station stores where market data indicates the Shoe Station concept may perform better.

A significant portion of our growth strategy is based on growing our Shoe Station banner through rebannering stores into Shoe Station stores, acquisitions and organic growth.

Our ability to achieve our strategies will depend, in part, on our ability to realize the expected operating results from, and planned growth of, our Shoe Station banner, which we may not realize within our expected time frames, or at all.

The Shoe Station banner may underperform relative to our expectations.

In addition, the costs incurred to achieve these results may be greater than what we anticipate.

Any of these impacts could have an adverse effect on our growth, business, results of operations and financial condition.

We face significant competition in our markets, and we may be unable to compete favorably.

The retail footwear industry is highly competitive with few barriers to entry.

We compete primarily with department stores, shoe stores,

sporting goods stores, e-commerce retailers and mass merchandisers.

Many of our competitors are significantly larger and have substantially greater resources than we do.

Since Fiscal 2019, our Gross Profit margin has expanded and has been a key driver to the overall increase in our profitability.

If our competitors become more promotional than we are, or if we match our competitors’ promotional intensity, and lower margins are not offset with increased sales or lower operating expenses, our results of operations and financial condition may be adversely affected.

Adverse impacts on consumer spending may significantly harm our business and impact our promotional strategies and intensity.

The success of our business depends to a significant extent upon the level of consumer spending.

A number of factors may affect the level of consumer spending on merchandise that we offer, including, among other things:

• war, terrorism, civil unrest, other hostilities and security concerns;

Consumer confidence is hypersensitive to a wide variety of influences that may affect the level of consumer spending on merchandise that we offer, including, among other factors:

• military conflicts, including war, terrorism, civil unrest, other hostilities and security concerns;

• the timing and level of government stimulus payments;

• energy costs, which affect gasoline and home heating prices;

• general economic and industry conditions;

• general economic and industry conditions and recessionary fears;

• unemployment trends and salaries and wage rates;

2 unchanged sentences

• real estate values and foreclosure rates;

• consumer confidence in future economic conditions;

• consumer confidence in future economic conditions, including macroeconomic and political uncertainty and instability;

• interest rates;

1 unchanged sentence

• tax rates, policies and timing and amounts of tax refunds;

• natural disasters, changing weather patterns and catastrophic events.

Consumer confidence remains hypersensitive to a variety of uncertain factors, including inflation, recessionary fears, a pandemic resurgence and military conflicts, among other macroeconomic and political uncertainty and instability.

• natural disasters, changing weather patterns and catastrophic events, including the possibility of a pandemic resurgence.

Any adverse change in these factors could result in a decrease in consumer demand for our merchandise.

10 unchanged sentences

Our primary footwear manufacturers are located in China.

Any disruption in the supply chain may increase the cost of the goods we purchase, limit our ability to acquire merchandise and decrease our sales and profits.

Any disruption in the supply

chain may increase the cost of the goods we purchase, limit our ability to acquire merchandise and decrease our sales and profits.

If imported merchandise becomes more expensive or unavailable, the transition to alternative sources may not occur in time to meet our demands.

2 unchanged sentences

• disruptions in the flow of imported goods because of factors such as electricity or raw material shortages, work stoppages, strikes, political unrest, war, pandemics and natural disasters;

• changes in the political and economic environments in, the status of trade relations with, and the impact of changes in trade policies and tariffs impacting, China and other countries which are the major manufacturers of footwear;

• tariffs, import duties, import quotas, anti-dumping duties and other trade sanctions;

8 unchanged sentences

• increases in shipping rates imposed by the trans-Pacific shipping cartel;

• compliance with the laws and regulations, and changes to such laws and regulations, in the United States and the countries where our manufacturers are located, including but not limited to requirements relating to shipping security, product safety testing, environmental requirements and anti-corruption laws.

We may not realize the expected operating results from, and planned growth of, our Shoe Station banner.

A significant portion of our growth strategy is based on growing our Shoe Station banner.

The Shoe Station banner may underperform relative to our expectations.

Any of these impacts could have an adverse effect on our growth, business, results of operations and financial condition.

We face significant competition in our markets, and we may be unable to compete favorably.

The retail footwear industry is highly competitive with few barriers to entry.

We compete primarily with department stores, shoe stores, sporting goods stores, e-commerce retailers and mass merchandisers.

Many of our competitors are significantly larger and have substantially greater resources than we do.

Economic pressures or bankruptcies of our competition could result in increased pricing pressures.

This competition could adversely affect our results of operations and financial condition in the future.

• our non-compliance with the laws and regulations, and changes to such laws and regulations, in the United States and the countries where our manufacturers are located, including but not limited to requirements relating to shipping security, product safety testing, environmental requirements and anti-corruption laws.

Our failure to identify fashion trends could result in lower sales, higher markdowns and lower gross profits.

7 unchanged sentences

All of our stores are subject to leases and are primarily located in open-air shopping centers.

If we fail to effectively implement our real estate strategies or negotiate appropriate lease terms or if unforeseen changes arise, the consequences could have an adverse effect on our

profitability, cash flows and liquidity.

If we fail to effectively implement our real estate strategies or negotiate appropriate lease terms or if unforeseen changes arise, the consequences could have an adverse effect on our profitability, cash flows and liquidity.

The financial impact of exiting a leased location can vary greatly depending on, among other factors, the terms of the lease, the condition of the local real estate market, demand for the specific property and our relationship with the landlord, and influencing these factors is difficult.

1 unchanged sentence

We locate our stores primarily in open-air shopping centers where we believe our customers and potential customers shop.

The success of an individual store can depend on favorable placement within a given open-air shopping center and the volume of traffic generated by the other destination retailers and the anchor stores in the open-air shopping centers where our stores are located.

The success of an individual store can depend on favorable placement within a given open-air shopping center

and the volume of traffic generated by the other destination retailers and the anchor stores in the open-air shopping centers where our stores are located.

We cannot control the development of alternative shopping destinations near our existing stores or the availability or cost of real estate within existing or new shopping destinations.

5 unchanged sentences

We fulfill substantially all e-commerce orders from our store locations and from our Evansville distribution center.

If we are unable to continue to grow our e-commerce sales, our sales, comparable store sales and gross profit may decline, and our stock price may decrease, any of which could negatively impact our results of operations, cash flows and financial condition.

If we are unable to continue to grow our e-commerce sales or effectively manage the impact that rebannering our stores might have on our e-commerce sales channel, our sales, comparable stores Net Sales and Gross Profit may decline, and our stock price may decrease, any of which could negatively impact our results of operations, cash flows and financial condition.

Our e-commerce operations are subject to numerous other risks that could have an impact on our results of operations, including:

11 unchanged sentences

Any breach involving our customer information could harm our reputation or result in liability including, but not limited to, fines, penalties and costs of litigation, any of which could have an adverse effect on our operating results, financial condition and cash flows.

A failure to increase sales at our existing stores may adversely affect our stock price and affect our results of operations.

A number of factors have historically affected, and will continue to affect, our comparable store sales results, including:

• competition;

• timing of holidays, including sales tax holidays;

• general regional and national economic conditions, including inflation;

• inclement weather and/or unseasonable weather patterns;

• consumer trends, including the impact of higher prices on consumer goods;

• the impact of and government response to pandemics;

• fashion trends;

• changes in our merchandise mix;

• our ability to efficiently distribute merchandise;

• timing and type of, and customer response to, sales events, promotional activities or other advertising;

• the effectiveness of our inventory management;

• new merchandise introductions;

• our ability to execute our business strategy effectively.

Our comparable store sales results have fluctuated in the past, and we believe such fluctuations may continue.

The unpredictability of our comparable store sales may cause our revenue and results of operations to vary from quarter to quarter and year to year, and an unanticipated decline in revenues or operating income may cause our stock price to fluctuate significantly.

Members in our Shoe Perks customer loyalty program account for a significant portion of our sales, and any material decline in sales from our Shoe Perks members could have an adverse impact on our results of operations.

2 unchanged sentences

We remain focused on expanding our Shoe Perks enrollment.

In Fiscal 2023, purchases from Shoe Perks members were approximately 71% of our comparable Net Sales through our Shoe Carnival bannered stores.

In Fiscal 2024, purchases from Shoe Perks members were approximately 73% of our comparable stores Net Sales.

If our Shoe Perks members do not continue to shop with us, our sales may be adversely affected, which could have an adverse impact on our results of operations.

1 unchanged sentence

Our growth strategy requires that we continue to invest in omnichannel initiatives, which requires substantial investment in technology, to expand and improve our operating and financial systems and expand, train and manage our employee base.

In addition, as we create more opportunities to connect with our customers through our omnichannel initiatives and as we grow the number of our physical stores, we may be unable to hire a sufficient number of qualified personnel or successfully integrate the omnichannel initiatives or new or acquired stores into our business.

In addition, as we create more opportunities to connect

with our customers through our omnichannel initiatives and as we grow the number of our physical stores, we may be unable to hire a sufficient number of qualified personnel or successfully integrate the omnichannel initiatives or new or acquired stores into our business.

If we fail to successfully implement our growth strategy, our business, financial condition or results of operations could be adversely affected.

The success of our growth strategy will depend on a number of other factors, some of which are out of our control, including, among other things:

• the acceptance of our banners and concepts in new markets;

• the acceptance of our banners and concepts in new markets, including as a result of our rebanner strategy;

• our ability to provide adequate distribution to support growth;

7 unchanged sentences

• the impact of new stores on sales or profitability of existing stores in the same market.

We depend on our key suppliers for merchandise and advertising support and the loss of key suppliers could adversely affect our business.

We depend on our key suppliers for merchandise and advertising support and the loss of any of our key suppliers could adversely affect our business.

Our business depends upon our ability to purchase fashionable, name brand and other merchandise at competitive prices from our suppliers.

Three branded suppliers, Nike, Inc., Skechers U.S.A., Inc.

and Crocs, Inc.

collectively accounted for approximately 45% of our Net Sales in Fiscal 2023.

and Crocs, Inc., collectively accounted for approximately 48% of our Net Sales in Fiscal 2024 and 45% of our Net Sales in Fiscal 2023.

and Skechers U.S.A., Inc.

collectively accounted for approximately 27% of our Net Sales in Fiscal 2022 and 39% of our Net Sales in Fiscal 2021.

collectively accounted for approximately 27% of our Net Sales in Fiscal 2022.

Name brand suppliers also provide us with cooperative advertising and visual merchandising funds.

3 unchanged sentences

We may experience difficulties in integrating Rogan’s and realizing the expected operating results, synergies, growth opportunities and other benefits of the acquisition.

The success of the Rogan’s acquisition will depend, in part, on our ability to realize the expected operating results, synergies, growth opportunities and other benefits from acquiring Rogan’s.

We may not realize these operating results, synergies, growth opportunities or other benefits within the expected time frames, or at all.

The acquisition may disrupt our current plans and operations and may negatively impact our relationship with our vendors and other key suppliers.

We may not be able to successfully integrate Rogan’s operations, logistics, information technologies, communications, purchasing, accounting, marketing, administration and other systems, establish internal controls into Rogan’s operations or retain key Rogan’s employees.

Rogan’s may underperform relative to our expectations.

The success of the Rogan’s acquisition will depend, in part, on our ability to realize growth opportunities and achieve other benefits from acquiring Rogan’s.

We may not realize further synergies, maintain the synergies gained to date or maintain the operating results realized in Fiscal 2024 from the Rogan’s business, or grow those results in future periods, as Rogan’s may underperform relative to our expectations.

Any of these impacts could have an adverse effect on our growth opportunities, business, results of operations and financial condition.

32 unchanged sentences

Virtually all merchandise received by our physical stores is, and will be, shipped through this distribution center.

We fulfill substantially all of our e-commerce orders from our store locations and our primary distribution center.

We fulfill substantially all of our e-commerce orders from our store locations and our primary distribution

Given that we have one primary distribution center, virtually any technology disruption there could be significant to our operations.

8 unchanged sentences

• changes in the public’s perception of the reputation and brand of the business partner as a result of matters such as its labor and wage standards, business practices or marketing campaigns;

• our inability to properly manage a business partner;

• our inability to properly manage a business partner relationship;

• any data losses or information security lapses by a business partner that results in the compromise of personal information or the improper use or disclosure of sensitive information;

12 unchanged sentences

Our quarterly operating results can fluctuate due to seasonality, weather conditions and other factors.

Our quarterly results of operations have fluctuated and are expected to continue to fluctuate in the future, primarily as a result of seasonal variances, weather conditions and the timing of sales and costs associated with opening new stores and closing existing stores.

Our quarterly results of operations have fluctuated and are expected to continue to fluctuate in the future, primarily as a

result of seasonal variances, weather conditions and the timing of sales and costs associated with opening new stores and closing existing stores.

We have three distinct peak selling periods:

1 unchanged sentence

To prepare for our peak shopping seasons, we must order and keep in stock significantly more merchandise than we would carry during other periods of the year.

Reductions in demand for our merchandise during these peak shopping seasons could require us to sell excess inventory at a substantial markdown, which could reduce our Net Sales and margins and negatively affect our

profitability.

Our operating results depend significantly upon the sales generated during these periods, and our quarterly results may be impacted by calendar shifts of holiday or seasonal periods.

We also increase our inventory levels to offer styles particularly suited for the relevant season, such as sandals in the early summer season and boots during the winter season.

If the weather conditions for a particular season vary significantly from those typical for such season, such as an unusually cold early summer or an unusually warm winter, consumer demand for the seasonally appropriate merchandise that we have available in our stores could be adversely affected and negatively impact Net Sales and margins.

If the weather conditions for a particular season vary significantly from those typical for such season, such as an unusually cold early summer or an unusually warm winter, consumer demand for the seasonally appropriate merchandise that we have available in our stores has been in the past, and in the future could be, adversely affected and negatively impact Net Sales and margins.

Lower demand for seasonally appropriate merchandise may leave us with an excess inventory of our seasonally appropriate products, forcing us to sell these products at significantly discounted prices and adversely affecting our Net Sales, margins and operating cash flow.

21 unchanged sentences

Failure to protect the integrity and security of individually identifiable data of our customers and employees could expose us to litigation and damage our reputation.

We receive and maintain certain personal, sensitive and confidential information about our customers, vendors and employees.

We receive and maintain certain personal, sensitive and

confidential information about our customers, vendors and employees.

The collection and use of this information are regulated and are subject to certain contractual restrictions in third-party contracts.

2 unchanged sentences

Advanced cybersecurity threats are persistent and continue to evolve, making them increasingly difficult to identify and prevent.

If our security and information systems or the

systems of our employees or external business partners are compromised or our employees or external business partners fail to comply with these laws and regulations and this information is obtained by unauthorized persons, or collected or used inappropriately, our reputation, as well as our operations and financial results, could be negatively affected and litigation or regulatory action against us or the imposition of costs, fines or other penalties could also occur.

If our security and information systems or the systems of our employees or external business partners are compromised or our employees or external business partners fail to comply with these laws and regulations and this information is obtained by unauthorized persons, or collected or used inappropriately, our reputation, as well as our operations and financial results, could be negatively affected and litigation or regulatory action against us or the imposition of costs, fines or other penalties could also occur.

As privacy and information security laws and regulations change, we may incur additional costs to remain in compliance.

23 unchanged sentences

We may utilize our credit agreement to fund working capital, including inventory purchases, and special purpose standby letters of credit, as needed.

Significant decreases in cash flow from operations could result in our borrowing under the credit agreement to fund

operational needs.

Significant decreases in cash flow from operations could result in our borrowing under the credit agreement to fund operational needs.

If we borrow funds under our credit agreement and interest rates materially increase, our financial results could be adversely affected.

Continued financial market volatility could have an adverse effect on the sources and costs of financing available to us.

The capital and credit markets have experienced, and may continue to experience, volatility and disruption, which could have the following impacts, among other things:

• make obtaining other sources of debt more difficult;

• increase our borrowing costs or limit other potential sources of financing available to us.

Financial market volatility could have an adverse effect on the sources and costs of financing available to us.

The capital and credit markets have experienced, and may continue to experience, volatility and disruption, which could, among other impacts, make obtaining other sources of debt more difficult and increase our borrowing costs or limit other potential sources of financing available to us.

If our long-lived assets become impaired, we may need to record significant non-cash impairment charges.

Periodically, we review our long-lived assets for impairment whenever economic events or changes in circumstances indicate that the carrying value of an asset may not be recoverable, and certain intangible assets, such as goodwill and non-amortizing tradenames, are evaluated annually regardless of triggering events.

Periodically, we review our long-lived assets for impairment whenever economic events or changes in circumstances indicate that the carrying value of an asset may not be recoverable, and certain intangible assets, such as goodwill and non-amortizing trade names, are evaluated annually regardless of triggering events.

Significant negative industry or general economic trends, disruptions to our business and unexpected significant changes or planned changes in our use of the assets (such as store relocations or closures) have resulted, and in the future may result, in impairment charges.

8 unchanged sentences

The retail industry continues to evolve and undergo structural change.

This evolution and structural change has resulted in the bankruptcy and/or reorganization of various footwear specific and other publicly traded retailers.

This evolution and structural change have resulted in the bankruptcy and/or reorganization of various footwear specific and other publicly traded retailers.

Despite our best efforts to differentiate our business model and processes, our stock price has fluctuated as a result of perceptions of the overall retail environment and investor confidence in the retail sector.

10 unchanged sentences

In the past, companies that have experienced volatility in the market price of their stock have been the subject of securities class action litigation.

If we become involved in securities class action

litigation in the future, it could result in substantial costs and diversion of management attention and resources, thus harming our business.

We cannot guarantee that we will continue to make dividend payments or that we will continue to repurchase stock pursuant to our stock repurchase program.

If we become involved in securities class action litigation in the future, it could result in substantial costs and diversion of management attention and resources, thus harming our business.

We cannot guarantee that we will continue to make dividend payments or that we will repurchase stock pursuant to our stock repurchase program.

Our Board of Directors determines if it is in our best interest to pay a dividend to our shareholders and the amount of any dividend and declares all dividend payments.

10 unchanged sentences

Our Amended and Restated Articles of Incorporation, our By-Laws and Indiana corporate laws contain provisions that may discourage other persons from attempting to acquire control of us, including, without limitation, a Board of Directors that has staggered three-year terms for its members, supermajority voting provisions, restrictions on the ability of shareholders to call a special meeting of shareholders and advance notice requirements in connection with shareholder proposals or director nominations.

The Board of Directors has the authority to issue preferred stock in one or more series without the approval of the holders of our common stock.

Additionally, the Board of Directors has the authority to issue preferred stock in one or more series without the approval of the holders of our common stock.

Further, Indiana corporate law contains business combination provisions that, in general, prohibit for five years any business combination with a beneficial owner of 10% or more of our common stock unless the holder’s acquisition of the stock was approved in advance by our Board of Directors.

29 unchanged sentences

Our Board of Directors oversees and guides our business and oversees our exposure to major risks.

As stated in its charter, our Board of Directors has delegated to the Audit Committee the responsibility for Board-level oversight of cybersecurity risk.

As stated in its charter, our Board of Directors has delegated to the Audit Committee, which currently includes the Board members with cybersecurity acumen, the responsibility for Board-level oversight of cybersecurity risk.

As part of its oversight role, the Audit Committee receives reports about our protocols, material threats or incidents and other developments related to cybersecurity.

When these discussions occur, Board members with cybersecurity acumen that are not on the Audit Committee are present and active in those discussions.

These cybersecurity reports are provided to our Audit Committee at least annually, and these reports are delivered by our Senior Vice President and Chief Information Officer (“CIO”).

13 unchanged sentences

The ultimate effects of a breach or loss in function or confidential information are difficult to quantify with any certainty, but such loss may be partially limited through insurance.

See "Risk Factors—We could be adversely affected if our inventory technology systems fail to operate effectively, are disrupted or are compromised", "—Various risks associated with our e-commerce platform may adversely affect our business and results of operations" and "—We outsource certain business processes to third-party vendors and have certain business relationships that subject us to risks, including disruptions to our business and increased costs" in PART I, ITEM 1A of this Annual Report on Form 10-K, which risk factors are incorporated by reference into this section of this Annual Report on Form 10-K.

See “Risk Factors—We could be adversely affected if our information technology systems fail to operate effectively, are disrupted or are compromised”, “—Various risks associated with our e-commerce platform may adversely affect our business and results of operations” and “—We outsource certain business processes to third-party vendors and have certain business relationships that subject us to risks, including disruptions to our business and increased costs” in PART I, ITEM 1A of this Annual Report on Form 10-K, which risk factors are incorporated by reference into this section of this Annual Report on Form 10-K.

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

What changed 10-K

Item 1. Business