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Item 1. Business

2026-03-26 compared with 2025-03-21 · 312 added, 311 removed, 393 unchanged (61% of the section changed)

Shoe Carnival, Inc.

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.

Our “bricks” first, omnichannel approach provides customers easy access to our wide assortment of branded footwear for athletics, daily activities and special events via their choice of delivery channel.

We have a proven track record selling branded footwear, such as Nike, Skechers, Crocs, adidas, Puma, HEYDUDE, Converse and Vans, and generating profits without incurring debt.

We have been in business for 46 years and have been a public company subject to SEC reporting requirements since 1993.

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

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.

is one of the nation’s largest omnichannel retailers of footwear and accessories for the family.

Our goal is to be the leading family footwear retailer in the United States.

We operate a retail-focused business model designed to deliver a differentiated footwear shopping experience featuring national name brands.

Our omnichannel approach provides customers easy access to our broad assortment of branded footwear for athletics, daily activities, special events and work through the customer’s preferred delivery channel.

We have a demonstrated track record of selling branded footwear, including Nike, Skechers, Crocs, adidas, Puma, HEYDUDE, HOKA, Birkenstock, Converse and Brooks, and of generating profits without incurring debt.

We have been in operation for 47 years and have been subject to SEC reporting requirements as a public company since 1993.

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

As part of our long-term growth strategy, we have invested, and will continue to invest, significantly in our rebanner strategy, acquisitions, 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 2025 year end, we operated 426 stores across 35 states and Puerto Rico, consisting of 144 Shoe Station locations and 282 Shoe Carnival locations.

During Fiscal 2025, we initiated a Shoe Station rebanner growth strategy, which has evolved over time, as described below.

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

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.

Unless otherwise stated, references to years 2025, 2024 and 2023 relate to the fiscal years ended January 31, 2026 (“Fiscal 2025”), February 1, 2025 (“Fiscal 2024”), and February 3, 2024 (“Fiscal 2023”), respectively.

Fiscal 2026 refers to our fiscal year ending January 30, 2027.

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

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

References to “Shoe Station” and “Shoe Carnival” are to the individual store banners, 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.

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References to the “SEC” refer to the United States Securities and Exchange Commission.

See PART II, ITEM 7, “Management's Discussion and Analysis of Financial Condition and Results of Operations” in this Annual Report on Form 10-K for more information regarding the trends impacting our Fiscal 2024 operating results.

See PART II, ITEM 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this Annual Report on Form 10-K for additional information regarding the trends affecting our operating results.

Our Store Banners

As of our Fiscal 2025 year end, we operated 426 stores under two banners:

Shoe Carnival and Shoe Station.

The following sections describe each banner and its role in the Company’s strategic direction.

Shoe Carnival

Our Shoe Carnival retail concept has developed over our 46-year history and is differentiated from competitors by our distinctive, fun and promotional marketing efforts.

Our Shoe Carnival retail concept has developed over our 47-year history and is differentiated from our competitors by our distinctive, fun and promotional marketing efforts.

Shoe Carnival stores combine competitive pricing with a high-energy in-store environment that encourages customer participation.

Unique features of our store experience include upbeat music, opportunities for customers to spin our spin-n-win wheel and a mic-person who runs in-store specials.

Unique features of our Shoe Carnival store experience include upbeat music, opportunities for customers to spin our spin-n-win wheel and a mic-person who runs in-store specials.

These specials include contests, games and hot deals of the moment to encourage customers to take immediate advantage of our special, in-store pricing.

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.

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.

Footwear in our Shoe Carnival physical stores is organized by category and brand, creating strong brand statements within the aisles.

These brand statements are underscored by branded signage on endcaps and in-line signage throughout the store.

Our signage may highlight a vendor’s product offerings or sales promotions or may highlight seasonal or lifestyle statements by grouping similar footwear from multiple vendors.

Shoe Carnival’s primary customers are moderate to low-income families.

Our Shoe Carnival bannered stores serve families with children through moderate-income brands and a value-oriented selection, with entry-level price points.

As of our Fiscal 2025 year end, we operated 282 Shoe Carnival bannered stores located across 31 states and Puerto Rico and offered online shopping at www.shoecarnival.com.

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

We sell broadly across the family footwear channel, with balanced distribution among type of customer (men, women and children), product (athletics and non-athletics) and age (senior citizens to infants) and with no singular reliance on any particular segment.

The products we offer are a broad mix of footwear for sport, daily activities and special events.

The table below sets forth our percentage of sales by product category over the last five fiscal years.

Non-Athletics:

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 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

Our e-commerce platform is an extension of our physical stores and is designed to improve our customer’s shopping experience.

We are committed to providing a personalized, seamless customer experience across all channels, and we believe that our ongoing omnichannel initiatives are aligned with changing consumer behavior.

We delivered a new online experience to our customers in Fiscal 2023.

We launched our www.shoestation.com website in February 2023 and relaunched our www.shoecarnival.com website in late October 2023.

This marked the first major redesign of our Shoe Carnival website since 2016.

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

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 each of Fiscal 2024, Fiscal 2023 and Fiscal 2022.

Customer Relationship Management (“CRM”)

Our CRM program continues to provide valuable customer insights to our business, resulting in more efficient and effective marketing outreach.

Our CRM program provides our marketing, merchandising, analytics and real estate teams with a better and more complete view of our customer’s shopping behaviors and forms the foundation of our digital marketing efforts and our Shoe Perks loyalty program (“Shoe Perks”).

Our view into customer data allows us to more effectively communicate with our customers on a segmented basis through all owned and paid media channels and tailor the merchandise mix at an individual store level.

Through transaction data, we gain useful insights into our customers’ shopping habits, including where, when and how they shop our stores and navigate our online presence.

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.

The Shoe Station banner and retail locations serve a broader base of footwear customer.

Our Shoe Station concept targets a more affluent footwear customer than our Shoe Carnival banner 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.

While value-conscious, our view is that these customers are not totally driven by price.

Shoe Station serves this demographic through a differentiated assortment of premium brands and an enhanced in-store experience.

Shoe Station stores feature a modern and approachable shopping environment designed around accessibility and ease of navigation.

Product is presented in curated displays that allow customers to shop our merchandise with or without assistance from our staff.

The product assortment in our Shoe Station bannered stores includes higher end athletics and non-athletics shoes and more accessories.

Our Shoe Station bannered stores require approximately 20 to 25 percent less inventory per store, on average, compared to our Shoe Carnival bannered stores.

In Fiscal 2024, we acquired Rogan Shoes, Incorporated (“Rogan’s”), a privately-held 53-year-old work and family footwear retailer incorporated in Wisconsin.

At the time of acquisition, Rogan’s operated 28 store locations in Wisconsin, Minnesota and Illinois.

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

During the fourth quarter of Fiscal 2025, we completed the integration of Rogan’s operations and its 28 stores into our Shoe Station banner.

As of our Fiscal 2025 year end, we operated 144 Shoe Station bannered stores across 19 states and offered online shopping at www.shoestation.com.

Our Banner Strategy

Since the acquisition of Shoe Station in Fiscal 2021, we have been evaluating customer analytics and market data and developing strategies to expand the Shoe Station banner.

For the past three fiscal years, Shoe Station has been a market leader in the Southeast, and, according to our view of available industry data, Shoe Station has been the fastest growing retailer in our industry in terms of Net Sales growth.

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

As previously disclosed, 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.

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

Based on the customer response and business results from those rebanners, in March 2025, we announced a long-term strategy to scale up Shoe Station into a national footwear and accessories leader.

During Fiscal 2025, we rebannered 101 stores, consisting of 73 Shoe Carnival stores and all 28 Rogan’s stores.

At the end of Fiscal 2025, Shoe Station bannered stores represented approximately 34% of our total store fleet, compared to approximately 10% at the end of Fiscal 2024.

Our Shoe Station banner, excluding Rogan’s stores which were not included in our comparable stores in Fiscal 2025, achieved Net Sales growth of 2.7% compared to Fiscal 2024.

The Net Sales gain of 2.7% outpaced Shoe Carnival banner Net Sales declines by 10.4 percentage points.

In evaluating the performance of the 101 rebannered stores, particularly Net Sales in the second-half of Fiscal 2025, we observed that, while Shoe Station's e-commerce results have been a meaningful contributor to banner-level sales

growth, demonstrating strong consumer response to the Shoe Station brand and assortment online, there was significant variability in in-store sales performance across rebannered locations, with some stores performing well and others not achieving anticipated results.

As a result, we made the strategic decision to slow the pace of store rebanners in Fiscal 2026 from our previously announced timelines to allow time to identify which consumer demographics are responding most favorably to the Shoe Station format, to determine which marketing channels are most effective in driving new customer acquisition, and to refine product mix in rebannered stores to improve in-store conversion.

We now expect to rebanner approximately 21 stores during the first half of Fiscal 2026 while this evaluation is conducted.

The Shoe Station banner is expected to continue as our primary growth banner as we leverage our CRM customer data to identify opportunities both within our current markets as well as new markets outside of our current footprint that are best suited for the Shoe Station format.

However, in markets where Shoe Carnival has historically been a dominant family footwear retailer, we expect that those stores will continue to operate under the Shoe Carnival banner.

The Shoe Carnival banner continues to serve an important customer base in a meaningful number of locations, and we expect to manage both banners accordingly.

As a result of the rebannering completed in Fiscal 2025, our Fiscal 2025 Operating Income decreased by approximately $24.1 million compared to Fiscal 2024 due to lost sales during a four-to-six-week store closure period through each store’s grand opening, store closing costs and asset write-offs, additional depreciation of new store construction costs, customer acquisition costs and other costs.

In Fiscal 2026 we expect $10 to $15 million of continued rebanner investment impacting Operating Income to support stores rebannered in Fiscal 2025 and those that are planned to rebanner in Fiscal 2026, inclusive of expected lower margins to work through excess inventory as more stores rebanner.

Capital expenditures supporting the rebanner initiative totaled approximately $37.1 million in Fiscal 2025.

We anticipate additional capital expenditures in Fiscal 2026 of between $5 to $7 million to support the rebanner initiative.

Though impacting near-term profitability and liquidity, we expect these investments will position us for more sustainable future performance.

On November 13, 2025, we announced that our Board of Directors unanimously approved changing our corporate name to Shoe Station Group, Inc., subject to shareholder approval at our Annual Meeting of Shareholders in June 2026.

That proposed name change remains on the June 2026 agenda.

The proposed corporate name change to Shoe Station Group, Inc.

reflects the Board’s conviction that the Shoe Station concept is our primary long-term growth vehicle.

See PART I, ITEM 1A, “Risk Factors” for a discussion of risks associated with our rebanner strategy and PART II, ITEM 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” for additional discussion of the financial impact of our banner strategy.

Our Omnichannel Platform

Distinctive In-Store Shopping Experience

Across both of our banners, our in-store merchandise is displayed directly on the selling floor in an open stock format, allowing customers to serve themselves if they choose.

Trained staff is dedicated to customer service and assists customers with merchandise features, sizes, styles and colors.

Our store design incorporates digital screens that are centrally controlled and adaptable, enhancing the in-store shopping experience.

Our e-commerce platform is an extension of our physical stores and is designed to enhance our customer’s shopping experience.

We are committed to providing a personalized, seamless customer experience across all channels, and management believes that our ongoing omnichannel initiatives are aligned with changing consumer behavior.

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

E-commerce sales represented approximately 10 percent of merchandise sales in each of Fiscal 2025 and Fiscal 2024.

Order Management and Fulfillment

We have implemented a third-party hosted order management system designed to our specifications, which has enabled us to meet the complex demands of omnichannel fulfillment and has positioned us to further scale our e-commerce capabilities as our business grows.

Ship-From-Store.

Our Ship-From-Store program is a core element of our omnichannel strategy.

Online orders are primarily fulfilled using physical store inventory and staff.

By fulfilling e-commerce orders principally from store-level inventory and overhead, we are able to minimize out-of-stocks, offer customers an expanded online assortment and leverage existing store infrastructure.

E-commerce orders can also be fulfilled from our distribution center in Evansville, Indiana, which is utilized during periods of peak demand.

Vendor Drop-Ship Program.

We also maintain a vendor drop-ship program with select business partners.

This program offers our customers an expanded online assortment of styles and colors that we do not carry in our stores.

While our customers benefit from expanded item assortment, the functionality of this program is seamless, and our customer’s online experience is not impacted by the vendor drop-ship fulfillment option.

As an additional benefit, we do not need to make a capital investment in this expanded inventory assortment, as our vendors participating in this program carry and fulfill the merchandise.

Customer Relationship Management

Our CRM program continues to provide valuable customer insights, resulting in more efficient and effective marketing outreach.

Our CRM program provides our marketing, merchandising, analytics and real estate teams with a comprehensive view of our customer’s shopping behaviors, forms the foundation of our marketing efforts and our Shoe Perks loyalty program (“Shoe Perks”) and has been used to support our rebanner strategy.

Our access to customer data allows us to communicate with customers on a segmented basis through owned and paid media channels and to tailor the merchandise mix at the individual store level.

Through transaction data, we gain insights into our customers’ shopping habits, including where, when and how they shop our stores and navigate our online presence.

Additionally, the CRM program allows us to gain a deeper understanding of the brands and categories that our high-value customers consistently purchase, enabling us to meet customer demand at the 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.

Once a customer enrolls in Shoe Perks and provides a means for digital communication, the customer will begin receiving personalized communications from us.

These communications afford us additional opportunities to highlight our broad product assortment and promotional programs.

Shoe Perks provides customers with a heightened shopping experience, which includes exclusive offers and rewards that are earned by making purchases either in-store or online and through participating in other point earning opportunities that facilitate engagement with our brand and the national name brands we offer.

We are focused on expanding our Shoe Perks enrollment.

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 expect segmentation and activation of our high-value customers through data analysis and targeting the broader market of customers similar to those already in our CRM program to continue to play a key role in our growth.

Once a customer enrolls in Shoe Perks and provides a means for digital communication, the customer begins receiving personalized communications from us.

These communications provide additional opportunities to highlight our broad product assortment and promotional programs.

Shoe Perks provides customers with a heightened shopping experience, which includes exclusive offers and rewards earned by making purchases either in-store or online and through participating in other engagement activities.

In Fiscal 2025, purchases from Shoe Perks members represented approximately 78% of 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 significantly higher than non-Gold tier Shoe Perks members in Fiscal 2024.

Building Brand Awareness

Our goal is to communicate a consistent brand image across 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.

We utilize digital media, video, television, radio, print media (including inserts, direct mail and newspaper advertising) and outdoor advertising to communicate with our customers and build brand awareness.

Digital media comprises a substantial portion of our marketing investment, particularly as

we leverage data that comes directly from our customers as part of our CRM solution, allowing us to directly communicate with our core customers.

Our Product Assortment and Vendor Partnerships

Diversified Sales Mix

We sell broadly across the family footwear channel, with meaningful distribution among type of customer (men, women and children), product category (athletics and non-athletics), and age (senior citizens to infants).

The products offered are a broad mix of footwear for sport, daily activities, special events and work.

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

The following table sets forth our percentage of sales by product category over the last five fiscal years:

Non-Athletics:

Strong and Diversified Vendor Partnerships

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

We offer merchandise from a broad range of vendor partners.

(“Nike”), Skechers U.S.A., Inc.

(“Skechers”) and Crocs, Inc.

(“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 both Fiscal 2024 and Fiscal 2023.

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

While we have no long-term contracts in place with any of our vendors, we anticipate that Nike, Skechers and Crocs will continue to be high-volume vendors for us in Fiscal 2025.

Our Competitive Strengths

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 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.

The use of digital media comprises the substantial portion of our marketing investment, particularly as we leverage data that comes directly from our customers as part of our CRM solution, allowing us to directly communicate with our core customers.

Television, radio, print media (including inserts, direct mail and newspaper advertising) and outdoor advertising accounted for the balance of our total advertising investment.

(“Crocs”) collectively accounted for approximately 46% of our Net Sales in Fiscal 2025 and 48% of Net Sales in Fiscal 2024.

Nike accounted for approximately 24% of Net Sales in Fiscal 2025, Skechers accounted for approximately 13%, and Crocs accounted for approximately 9%.

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

While we have no long-term contracts in place with any of our vendors, we anticipate that Nike, Skechers and Crocs will continue to be high-volume vendors in Fiscal 2026.

Centralized Distribution Process

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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 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.

During Fiscal 2025, 97% of merchandise was received into the Evansville distribution center, with a smaller percentage being drop-shipped directly to customers or shipped directly to store locations.

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

Leased Store Portfolio

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

All stores are leased, providing flexibility in our real estate portfolio.

On average, our physical stores are approximately 11,600 square feet.

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

Disciplined Approach to Capital Management

We remain focused on funding our normal operations without debt.

We ended Fiscal 2024 with no debt and $123.1 million of Cash and Cash Equivalents and Marketable Securities.

Over the last five fiscal years, we have had no debt outstanding and Cash, Cash Equivalents and Marketable Securities of $62 million to $132 million at the end of each fiscal year.

We believe this approach increases our ability to make impactful, long-term decisions and enhances our stakeholder relationships.

Leased Stores

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

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.

All stores are currently leased and more information on our leases can be found in Note 11 - “Leases” in our Notes to Consolidated Financial Statements contained in PART II, ITEM 8 of this Annual Report on Form 10-K.

Distinctive In-Store Shopping Experience

Our in-store merchandise is displayed directly on the selling floor in an open stock format, allowing customers to serve themselves, if they choose.

Our trained staff is dedicated to customer service and assists and educates customers with the features and location of merchandise, as well as finding sizes, styles and colors.

Our new store design incorporates the use of digital screens that are centrally controlled and are more adaptable than printed visual in-store advertising.

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

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 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.

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.

We remain focused on funding normal operations without debt.

We ended Fiscal 2025 with no debt and $130.7 million of Cash, Cash Equivalents and Marketable Securities.

Over the last five fiscal years, we have had no debt outstanding and have maintained Cash, Cash Equivalents and Marketable Securities of $62 million to $132 million at the end of each fiscal year.

Management believes this approach increases our ability to make impactful, long-term decisions and enhances stakeholder relationships.

Information Technology

Our proprietary inventory management and advanced point-of-sale (“POS”) systems provide us with the timely information necessary to monitor and control all phases of operations.

The POS provides, in addition to other features, full price management, promotion tracking capabilities (in support of the spontaneous nature of the in-store price promotions), real-time sales and cost of sales by product category at the store level and customer tracking.

Using the POS, both store personnel and centralized merchandising staff are able to monitor sales, cost of sales and the success of product promotions in real-time.

Our systems provide up-to-date sales and inventory information, and our data warehouse enables our merchandising and store operations staff to analyze sales, margin and inventory levels by store.

Our proprietary inventory management and point-of-sale systems (“POS”) provide timely information necessary to monitor and control all phases of operations.

The POS provides, in addition to other features, full price management, real-time sales and product margins (merchandise selling price less the vendor purchase order cost) by product category at the store level and customer tracking.

Using the POS, both store personnel and centralized merchandising staff are able to monitor sales, merchandise margins and promotional effectiveness in real-time.

Management believes timely access to key business data has enabled the Company to manage promotional intensity effectively and positively impact comparable stores Net Sales and inventory turns.

Our systems provide up-to-date sales and inventory information, and our data warehouse enables our merchandising and store operations staff to analyze sales, margin and inventory levels.

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 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)

We have implemented a third-party hosted order management system designed to our specific needs, which has enabled us to meet the complex demands of omnichannel fulfillment and has positioned us to further scale our e-commerce capabilities as we grow.

Our Ship-From-Store program is a core element of our omnichannel strategy.

Online orders are primarily fulfilled using physical stores.

By fulfilling e-commerce orders principally from our store level inventory and staff, we are able to minimize out-of-stocks, offer our customers an expanded online assortment and leverage store level inventory and overhead.

E-commerce orders can also be fulfilled from our distribution center in Evansville, Indiana, and this distribution center is used in times of peak demand.

We also maintain a vendor drop-ship program with select business partners.

This program offers our customers an expanded online assortment of styles and colors that we do not carry in store.

While our customers benefit from expanded item assortment, the functionality of this program is seamless, and our customers’ online experience is not impacted by the vendor drop-ship fulfillment option.

As a benefit of this program, we do not need to make a capital investment in the expanded inventory assortment, which is carried and fulfilled by our business partners participating in this program.

Competitive Pricing For Our Customers

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.

Additionally, the time-conscious customer appreciates the convenience of one-stop shopping for the entire family, whether this occurs at our store locations or through our other omnichannel choices.

The retail footwear business is highly competitive.

We believe the principal competitive factors in our industry are merchandise selection, price, fashion, quality, location, shopping environment and service.

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

We compete with most department stores and traditional shoe stores by offering competitive prices.

We compete with mass merchandisers who offer footwear at aggressive price points, off-price retailers who compete on branded product at discount prices, department stores, shoe stores, sporting goods stores and e-commerce retailers.

We compete with most department stores and traditional shoe stores by offering competitive prices combined with our assortment of national brands.

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

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.

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.

Culture and Human Capital Management

We have intentionally built an employee-centric, customer-focused organization designed to compete at the highest levels in the retail industry.

We have built an employee-centric, customer-focused organization designed to compete at the highest levels in the retail industry.

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

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We do not tolerate harassment or unlawful discrimination.

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

Mandatory annual training for all employees empowers the 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.

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

Our broad-based leadership team, including those who manage and lead our stores and those who lead our Company, identified as 60% female and 40% male.

As of our Fiscal 2025 year end, our workforce identified as 62% female, 37% male and 1% did not identify.

Our broad-based leadership team, including those who manage and lead our stores and those who lead the Company, identified as 50% female and 50% male.

With respect to ethnicity, our leadership team identified as 74% Caucasian and 26% non-Caucasian.

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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.

As of our Fiscal 2025 year end, of our district managers, 67% have been employed by the Company for more than 20 years.

The average tenure of our general managers was 13 years as of Fiscal 2025 year end.

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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.

Since 2004, responses to this survey have had an average score of 4.0 to 4.3, with 5 being “strongly agree.”

Since 2004, responses to this survey have had an average score of 4.0 to 4.3, with 4 being “agree” and 5 being “strongly agree.”

During Fiscal 2025, we successfully integrated employees from the Rogan’s acquisition into our workforce and training programs.

Employee Benefits

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These include competitive wages and incentives;

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

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

employer-subsidized medical plans with dental and vision benefits;

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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:

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

Code of Business Conduct and Ethics (“Code of Ethics”);

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Cybersecurity awareness and responsibility;

• Supply chain security.

More information regarding our approach to conducting business responsibly, including our guidelines on discrimination and harassment, can be found in our Code of Ethics.

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.

and Supply chain security.

More information regarding our approach to conducting business responsibly, including the Company’s guidelines on discrimination and harassment, can be found in our Code of Ethics.

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

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.

We intend to disclose any amendments to the Code of Ethics by posting such

amendments on our website.

In addition, any waivers of the Code of Ethics for our Board members or executive officers will be disclosed in a Current Report on Form 8-K.

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We strive to provide our associates with a safe and healthy work environment.

We measure OSHA recordable incidents to gauge the success of our safety protocol.

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

We measure OSHA recordable incidents to gauge the success of our safety protocols.

During calendar year 2025, we recorded 52 OSHA recordable incidents compared to our average incidents over the last five years (2021 to 2025) of 56.2.

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.

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None of our employees are represented by a labor union.

For a discussion of the impact of seasonality on our operating results and our business, see PART II, ITEM 7, “Management's Discussion and Analysis of Financial Condition and Results of Operations - Impact of Store Count and Seasonality on Quarterly Results.”

For a discussion of the impact of seasonality on our operating results and business, see PART II, ITEM 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Impact of Store Count and Seasonality on Quarterly Results.”

As of our Fiscal 2025 year end, we own the following federally registered trademarks and service marks:

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

® , 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.

Shoe Carnival and associated trade dress and related logos, Y-NOT?, 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, intend to maintain the marks and the related registrations.

We are not aware of any pending claims of infringement or other challenges to our right to use these marks.

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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 addresses throughout this filing as textual references only.

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.

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Requests should be directed to Investor Relations at our corporate address.

A list of exhibits is included in this Annual Report on Form 10-K, and exhibits are available from us upon payment to us of the cost of furnishing them.

A list of exhibits is included in this Annual Report on Form 10-K, and exhibits are available from the Company upon payment to the Company of the cost of furnishing them.

Information about our Executive Officers

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Chairman of the Board and Director

Vice Chairman of the Board and Director

President and Chief Executive Officer and Director

Senior Executive Vice President - Chief Merchandising Officer

Vice Chairman of the Board, Interim President and

Chief Executive Officer and Director

Senior Executive Vice President - Chief Operating Officer

Senior Vice President, Chief Financial Officer, Treasurer and Secretary

Weaver has served as Chairman of the Board since March 1988.

Kerry Jackson

Executive Vice President - Chief Financial Officer

Executive Vice President - Chief Merchandising Officer

Weaver has served as our Chairman of the Board since March 1988.

From 1978 until February 1993, Mr.

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

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

Sifford has served as our Vice Chairman of the Board since October 2021 and as our Interim President and Chief Executive Officer since February 24, 2026.

From September 2019 to September 2021, Mr.

Sifford served as Vice Chairman of the Board and Chief Executive Officer.

Sifford also served as President and Chief Executive Officer from October 2012 to September 2019 and has been a Director since October 2012.

Sifford served as Chief Merchandising Officer from October 2012 to March 2016.

Sifford served as our Vice Chairman of the Board and Chief Executive Officer.

Sifford also served as our President and Chief Executive Officer from October 2012 to September 2019 and has been a Director since October 2012.

Sifford served as our Chief Merchandising Officer from October 2012 to March 2016.

From June 2001 to October 2012, Mr.

Sifford served as Executive Vice President – General Merchandise Manager and from April 1997 to June 2001, Mr.

Sifford served as Senior Vice President – General Merchandise Manager.

Sifford served as our Executive Vice President – General Merchandise Manager and from April 1997 to June 2001, Mr.

Sifford served as our Senior Vice President – General Merchandise Manager.

Prior to joining us, Mr.

Sifford served as Merchandise Manager – Shoes for Belk, Inc.

Worden has been employed as President and Chief Executive Officer and a Director of the Company since October 2021.

From September 2019 to September 2021, Mr.

Worden served as President and Chief Customer Officer and from September 2018 to September 2019, Mr.

Worden served as Executive Vice President – Chief Strategy and Marketing Officer.

Prior to joining the Company, Mr.

Worden led the Northern European region for S.

Johnson & Son, Inc.

(“SC Johnson”), a manufacturer of household cleaning supplies and products, and was responsible for revenue and share growth objectives across six countries from May 2014 to July 2018.

Prior to that, Mr.

Worden served as Assistant to the Chairman and Chief Executive Officer of SC Johnson from May 2012 to May 2014 and as a Senior Marketing Director from 2009 to 2012.

Worden also served as a Senior Brand Manager at Kimberly-Clark Corporation and held multiple marketing roles across its flagship brands during his tenure there from 2003 through 2009.

Scibetta has been employed as Senior Executive Vice President – Chief Merchandising Officer since March 2021.

From March 2016 to March 2021, Mr.

Scibetta served as Executive Vice President – Chief Merchandising Officer.

From December 2012 to March 2016, Mr.

Scibetta served as General Merchandise Manager.

Prior to joining us, Mr.

Scibetta served as Vice President, Divisional Merchandise Manager– Footwear for Belk, Inc.

From 2004 to 2007, Mr.

Scibetta served as Vice President, Divisional Merchandise Manager – Footwear for Parisian Department Stores.

From 1998 to 2000, Mr.

Scibetta served as Vice President, Divisional Merchandise Manager for Shoe Corporation of America.

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

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.

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

From February 2023 to February 2025, Mr.

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Chilton started with the Company in 1994 as a store manager and has served in roles of increasing responsibility in store management and operations since that time, including serving as the Vice President of our Northern Division, with approximately one-third of our stores reporting to him, from April 2012 until March 2019.

Edwards has been employed as Senior Vice President, Chief Financial Officer and Treasurer since September 2023.

He has also served as our Secretary since June 2021 and served as our Assistant Secretary from December 2019 to June 2021.

Edwards served as our Vice President and Corporate Controller from October 2019 until September 2023 and was appointed an executive officer in March 2021 as our Chief Accounting Officer, serving in that role until September 2023.

Prior to joining us, Mr.

Edwards was Vice President of Accounting for CenterPoint Energy, Inc., a publicly traded utility company, from February 2019 to August 2019 following its acquisition of Vectren Corporation (“Vectren”), also a publicly traded utility company.

For Vectren, Mr.

Edwards held various leadership roles in the accounting, audit and finance functions from February 2001 through February 2019, including Vice President and Treasurer from April 2017 to February 2019 and Vice President of Corporate Audit from August 2013 to April 2017.

Prior to joining Vectren, Mr.

Edwards worked in public accounting.

Edwards is a Certified Public Accountant.

Our executive officers serve at the discretion of the Board of Directors.

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.

Jackson has been employed as our Executive Vice President – Chief Financial Officer since September 2025.

Jackson served as our Chief Financial Officer for 27 years prior to his retirement from the Company in May 2023.

Jackson rejoined the Company in June 2025 and served as our Senior Vice President – New Business Development from June 2025 until September 2025.

Before his retirement in 2023, Mr.

Jackson was our Senior Executive Vice President, Chief Financial and Administrative Officer and Treasurer from September 2019 until April 2023 and our Chief Administrative Officer from April 2023 until May 2023.

Prior to that, Mr.

Jackson served as our Senior Executive Vice President – Chief Operating and Financial Officer and Treasurer from October 2012 to September 2019, as our Executive Vice President – Chief Financial Officer and Treasurer from August 2004 to October 2012, as our Senior Vice President – Chief Financial Officer and Treasurer from June 2001 to August 2004, as our Vice

President – Chief Financial Officer and Treasurer from September 1996 to June 2001, and as our Vice President – Controller and Chief Accounting Officer from January 1993 to September 1996.

Prior to January 1993, Mr.

Jackson held various accounting positions with us.

Prior to joining the Company in 1988, Mr.

Jackson was associated with a public accounting firm.

Gordon has been employed as our Executive Vice President – Chief Merchandising Officer since April 2025.

From March 2021 to April 2025, Ms.

Gordon served as our Senior Vice President – General Merchandising Manager.

From March 2020 to March 2021, Ms.

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

Our executive officers serve at the discretion of the Board of Directors.

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

R isk Factors

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Operational and Strategic Risks

We may not realize the expected operating results from, and planned growth of, our Shoe Station banner, including planned growth and expected inventory reductions, cost savings and synergies from our evolving rebanner strategy.

Our current growth strategy is based on growing our Shoe Station banner through rebannering stores into Shoe Station stores, acquisitions and organic growth and continuing to operate Shoe Carnival stores where customer data supports it.

We have rebannered, and are planning to continue to rebanner, Shoe Carnival stores to Shoe Station stores.

Over time this rebanner strategy has evolved.

Previous expectations were that approximately 70 additional stores would rebanner before Back-to-School in Fiscal 2026, with Shoe Station stores then representing 51% of the current store fleet and that over 90% of our fleet would operate as a Shoe Station store by the end of Fiscal 2028 with remaining locations to be evaluated for potential rebannering, outlet repositioning, or closure.

This transition to substantially all Shoe Station stores was expected to generate both inventory reductions, as Shoe Station’s merchandising model requires less inventory per store, as well as cost savings from reduced dual-brand complexity across merchandising, marketing, systems, supply chain and back office.

In evaluating the performance of the 101 stores that were rebannered in Fiscal 2025, particularly Net Sales in the second-half of Fiscal 2025, we observed significant variability in in-store sales performance across rebannered locations, with some stores performing well and others not achieving anticipated results.

As a result, we made the strategic decision to slow the pace of store rebanners in Fiscal 2026 from our previously announced timelines, and we now expect to rebanner approximately 21 stores during the first half of Fiscal 2026 and to utilize Shoe Station as our primary growth vehicle.

We also now expect to continue to operate legacy Shoe Carnival stores in locations supported by our CRM customer data.

We continue to expect cost savings and synergies as Shoe Station grows, by incurring less rebanner costs and through disciplined expense management.

We also continue to expect inventory reduction as Shoe Station grows and as excess inventory not part of our ongoing assortment is sold, of which $50 to $65 million in inventory reduction is expected in Fiscal 2026.

Our ability to execute this evolved strategy will depend, in part, on our ability to:

• identify Shoe Carnival stores that will operate better as Shoe Station stores;

• realize the expected operating results from rebannered stores;

• organically grow our Shoe Station physical stores and e-commerce sales channel;

• find suitable acquisition partners that fit into the Shoe Station model;

• continue to operate our legacy Shoe Carnival physical stores and e-commerce sales channel, efficiently and effectively.

The objectives of this strategy may not be realized within our expected time frames, or at all, and the strategy may further evolve.

In addition, the costs incurred to implement this strategy and the promotional intensity required to sell through our excess inventory not part of our ongoing assortment may be greater than we anticipate.

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

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

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

• the impact of and government response to pandemics;

• the impact of, and regional and national government response to, a crisis;

• fashion trends;

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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.

We compete primarily with department stores, shoe stores, sporting goods stores, e-commerce retailers, off-price 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.

Our Gross Profit margin has been a key driver of 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.

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

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:

Consumer confidence is hypersensitive to a wide variety of influences that may affect the level of consumer spending for 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;

• inflation and tariffs;

• gasoline prices;

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

• general economic and industry conditions and recessionary fears;

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• health care costs;

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

• tax rates, policies and timing and amounts of tax refunds and other government stimulus;

• 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.

Reduced consumer demand could result in reduced traffic in our physical stores and to our e-commerce platform, increased selling and promotional expenses and inventory markdowns, and could cause us to close underperforming stores, which could result in higher than anticipated closing costs.

Any adverse change in these factors, such as a significant increase in gasoline and/or other energy-related prices, could result in a decrease in consumer demand for our merchandise.

Reduced consumer demand could result in reduced traffic in our stores and to our e-commerce platform and increased selling and promotional expenses and inventory markdowns, and could cause us to close underperforming stores, which could result in higher than anticipated closing costs.

Reduced demand may result in higher than normal inventory positions across our competitive landscape and may limit the prices we can charge for our merchandise and force us to adjust our promotional intensity.

Adverse changes in these factors, such as a significant increase in gasoline and/or other energy-related prices, could also negatively impact our operating expenses.

Any of these factors, including becoming more promotional, could have an adverse effect on our business, results of operations and financial condition.

Failure to successfully manage and execute our marketing and pricing strategies could have a negative impact on our business .

Our success and growth are partially dependent on generating customer traffic in order to gain sales momentum in our physical stores and drive traffic to our e-commerce platform.

Our success and growth are partially dependent on generating customer traffic in order to gain sales momentum in our stores and drive traffic to our e-commerce platform.

Effective use of CRM data and successful marketing efforts are necessary for us to reach customers through their desired mode of communication.

Our inability to accurately predict our customers’ preferences, to utilize their desired mode of communication, or to ensure availability of advertised products at effective price points could adversely affect our business and results of operations.

An increase in the cost, or a disruption in the flow, of imported goods may decrease our sales and profits.

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, Skechers and Crocs, collectively accounted for approximately 46% of our Net Sales in Fiscal 2025, 48% of our Net Sales in Fiscal 2024 and 45% of our Net Sales in Fiscal 2023.

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

Certain key suppliers’ business models are changing and such changes include, but are not limited to, increased direct-to-consumer initiatives, changes in planned product allocations and reductions in the number of retailers with which they are choosing to do business.

A loss of any of our key suppliers in certain product categories or our inability to obtain name brand or other merchandise from suppliers at competitive prices could have an adverse effect on our business.

As is common in the industry, we do not have any long‑term contracts with our suppliers.

Changes in the cost, or a disruption in the flow, of imported goods as a result of trade policy and/or tariffs may impact our sales and profits.

We rely on imported merchandise to sell in our stores.

Substantially all of our footwear product is manufactured overseas, including the merchandise we purchase from domestic vendors and the smaller portion we import directly from overseas manufacturers.

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.

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

Products from alternative sources may be of lesser quality and more expensive than those we currently import.

Other risks associated with our use of imported goods include:

Our primary footwear manufacturers are located in China and Vietnam.

In 2025, the United States government’s executive branch announced additional tariffs on goods imported from countries that manufacture footwear, including China and Vietnam.

These United States tariffs and the response by impacted countries has caused, and may continue to cause, uncertainty and disruption in our supply chain.

While we took actions in Fiscal 2025 to mitigate this uncertainty and disruption, including actions impacting our inventory purchases and the prices we charged our customers, there can be no assurance that these pricing and purchasing strategies will have similar impacts in future periods or that we will be able to timely implement other strategies or that any strategies implemented will be successful.

The United States Supreme Court’s recent ruling regarding tariffs and the United States executive branch’s reaction to that ruling has resulted in considerable uncertainty regarding the scope and duration of current and potential tariffs and the impact on us.

This uncertainty may result in future increases in the cost of the goods we purchase, changes in our ability to acquire merchandise, decreases in our sales and profits, and/or a decrease in our liquidity.

It is also possible that if imported merchandise becomes more expensive or unavailable, the transition to alternative sources may not occur in time to meet our demands.

Products from alternative sources may be of lesser quality and more expensive than those we currently purchase and import.

Any of these impacts could be material to our results of operations, cash flow and stock price.

Our reliance on imported goods is subject to a number of other risks that could impact our sales and profits.

Other risks associated with our use of imported goods include, but are not limited to:

• 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;

• changes in the political and economic environments in China, Vietnam and other countries which are the major manufacturers of footwear;

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

• modifications to international trade policy and/or existing trade agreements and other changes affecting United States trade relations with other countries;

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• 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.

Any of these risks could impact our ability to acquire merchandise or increase the cost of goods we purchase, which could have an adverse effect on our sales and profits.

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

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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 retailers 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.

If one or more of the destination retailers or anchor stores located in the open-air shopping centers where our stores are located close or leave, or if there is significant deterioration of the surrounding areas in which our stores are located, our business may be adversely affected.

If one or more of the other retailers located in the open-air shopping centers where our stores are located close or leave, or if there is significant deterioration of the surrounding areas in which our stores are located, our business may be adversely affected.

In addition, if our store locations fail to attract sufficient customer traffic or we are unable to locate replacement locations on terms acceptable to us, our business could suffer.

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E-commerce has been an important sales channel for us.

We sell shoes and related accessories through websites that we control, including www.shoecarnival.com and www.shoestation.com and through our related mobile app.

We sell shoes and related accessories through websites that we control, and that are hosted by a leading provider, including www.shoecarnival.com and www.shoestation.com and through our related mobile app.

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

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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.

We may not be able to successfully execute our growth strategy, which could have an adverse effect on our business, financial condition and results of operations.

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.

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:

We may not be able to successfully execute our strategies to grow our business, which could have an adverse effect on our business, financial condition and results of operations.

We plan to continue to invest in omnichannel initiatives, which requires a 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 omnichannel initiatives and as we grow the number of our 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 grow our business, our business, financial condition or results of operations could be adversely affected.

Success 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, including as a result of our rebanner strategy;

• our ability to provide adequate distribution to support growth;

• our ability to source sufficient levels of inventory;

• our ability to source sufficient levels of inventory and profitably sell through existing inventory;

• our ability to resolve downtime or technical issues related to our e-commerce platform, our order management and fulfillment systems and all other related systems that support our omnichannel strategy;

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• 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 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 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.

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

As is common in the industry, we do not have any long‑term contracts with our suppliers.

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 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.

We may not be able to identify or consummate future acquisitions or achieve expected benefits from or effectively integrate future acquisitions.

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• other events outside of our control.

We currently operate a primary distribution center located in Evansville, Indiana.

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

We currently operate a single distribution center located in Evansville, Indiana.

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

A disaster occurring at this distribution center would be significant and we could be unable to effectively deliver merchandise to our stores for an extended period.

Disasters occurring at our distribution center located in Evansville, Indiana, our corporate headquarters and other offices, our retail stores or the infrastructure of a key third-party vendor or service provider also could impact our reputation and our customers’ perception of our brand.

Disasters occurring at this distribution center, our corporate headquarters and other offices, our retail stores or the infrastructure of a key third-party vendor or service provider also could impact our reputation and our customers’ perception of our brand.

In the event of a severe disruption resulting from such events, we have contingency plans and employ crisis management to respond and recover operations.

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Any delays or difficulties with such projects could have an adverse effect on our operational results, financial position and cash flows.

The reliability and capacity of our information technology systems, and in particular our distribution technology operations, are critical to our continued operations.

We currently operate a primary distribution center in Evansville, Indiana.

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

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

The reliability and capacity of our information technology systems, and in particular our distribution technology operations, are critical to our continued operations, and we rely on both internally developed software and third party software and software-as-a-service arrangements to operate it.

Virtually all merchandise received by our stores is, and will be, shipped through our distribution center located in Evansville, Indiana.

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

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

Our corporate computer network is essential to our distribution process.

In addition, we routinely possess sensitive consumer and employee information.

Customers are also increasingly using mobile devices and applications to shop online and do comparison shopping.

Despite our precautionary efforts, our information technology systems are vulnerable from time to time to damage or interruption from, among other things, natural or man-made disasters, technical malfunctions, inadequate systems capacity, power outages, terrorist attacks, computer viruses and security breaches, which may require significant investment to fix or replace.

If our primary distribution center is shut down for any reason, if our information technology systems do not operate effectively or if we are the target of attacks or security breaches, we may suffer the loss of critical data, we could incur significantly higher costs and longer lead times associated with distributing our products to our stores, our ability to operate our e-commerce platform may be impacted and we could experience other interruptions or delays to our operations, which could have an adverse effect on our operating and financial performance.

In addition, we are required to comply with increasingly complex regulations designed to protect our business and personal data.

If our distribution center is shut down for any reason, if our information technology systems do not operate effectively or if we are the target of attacks or security breaches, we may suffer the loss of critical data and/or our customers’ or employees’ personal information, we could incur increased costs associated with implementing additional protections and processes, we could incur significantly higher costs and longer lead times associated with distributing our products to our stores, our ability to operate our e-commerce platform may be impacted, we could experience other interruptions or delays to our operations, we could receive negative media attention or be the subject of lawsuits or regulatory actions against us, and our relationships with our customers and employees and our reputation may be harmed, any of which could have an adverse effect on our operating and financial performance.

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.

We rely on third-party suppliers for our merchandise and outsource some of our business processes to third-party vendors.

We rely on third-party suppliers for our merchandise and outsource some of our business processes to third-party vendors, including processes involving our e-commerce platform and supply chain.

Our relationships with these business partners expose us to risks, including disruptions in our business and increased costs.

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These include, but are not limited to:

• 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;

• 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, including their use or misuse of artificial intelligence (“AI”) or marketing campaigns;

• 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;

• any misconduct by a business partner involving matters such as fraud or other improper or unethical activities conducted by the business partner or its non-compliance with our policies and procedures or with laws and regulations, including laws and regulations regarding the use and safeguarding of information, labor practices, environmental, health or safety matters and lobbying or similar activities.

Failure of our business partners to provide adequate services or our inability to arrange for alternative providers on favorable terms in a timely manner could disrupt our business, increase our costs or otherwise adversely affect our business and our financial results.

• any misconduct by a business partner involving matters such as fraud or other improper or unethical activities conducted by the business partner or its non-compliance with our policies and procedures or with laws and regulations, including laws and regulations regarding the use and safeguarding of information and AI, labor practices, environmental, health or safety matters and lobbying or similar activities.

Failure to maintain positive brand perception and recognition could have a negative impact on our business.

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The popularity of social media and other consumer-oriented technologies has increased the speed and accessibility of information dissemination.

If we are unable to quickly and effectively respond to the dissemination of negative information about us via social media or any other incidents negatively impacting our reputation and brand, we may suffer declines in customer loyalty and traffic and we may experience vendor relationship issues and other issues, regardless of the information’s accuracy, all of which could negatively affect our financial results.

information’s accuracy, all of which could negatively affect our financial results.

In addition, we frequently use social media to communicate with customers and the public in general.

Failure to use social media effectively could negatively impact our brand value and revenues.

Emerging technologies may create disruption to the retail industry.

New and emerging technology may enable new approaches or choices for how our customers procure goods and services and pay for those goods and services.

We may be unable to quickly adapt to rapid change resulting from artificial intelligence, blockchain, Internet of Things, including voice and smart home devices, and other advanced technologies that may result in changes to our supply chain, distribution channels and point-of-sale capabilities.

Emerging technologies may create disruption to our operations and the retail industry.

New and emerging technologies may enable new approaches or choices for how our customers procure goods and services and pay for those goods and services and how we serve our customers.

We may be unable to quickly adapt to rapid change resulting from AI, blockchain, Internet of Things, including voice and smart home devices, and other advanced technologies.

We may not timely or effectively develop or enhance our business processes to take advantage of these emerging technological trends, or our competitors may be able to develop or enhance their business processes sooner or more effectively, which could have an adverse effect on our business, reputation, results of operations, financial position and cash flows.

In addition, we are making investments in certain AI tools and solutions to utilize in our business.

The rapid advancement of these technologies presents opportunities for us, but there are risks associated with the development and deployment of AI.

Our AI-related efforts, including those of our business partners, may give rise to risks related to accuracy, harmful bias, discrimination, intellectual property infringement, data privacy and cybersecurity, among others.

In addition, we may be subject to new or enhanced governmental or regulatory scrutiny, litigation or other liability and ethical concerns, and negative consumer perceptions as to the use of automation and AI, which could adversely affect our business, reputation or financial results.

Any inadequacy in or failure to comply with our AI policies and procedures, which are continuing to develop as AI evolves and our use of it evolves, or with emerging laws, regulations and standards governing AI use could cause our technology not to operate as intended or to produce outcomes that could have an adverse effect on our business, reputation, results of operations, financial position and cash flows.

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:

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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 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.

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• the timing and amount of income tax refunds to customers;

• the effectiveness of our inventory management;

• changes in general economic conditions, including inflation and consumer spending patterns;

• the effectiveness of our inventory management and promotional intensity;

• changes in general economic conditions, including inflation, gasoline and energy prices, and consumer spending patterns;

• actions of competitors or co-tenants.

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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.

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A claim for which we are not adequately insured could have an adverse effect on our financial condition.

Further, due to the cyclical nature and current hardening of the insurance markets, we cannot provide assurance that insurance coverage will continue to be available on terms similar to those presently in place.

Further, due to the cyclical nature and a hardening of the insurance markets, we cannot provide assurance that insurance coverage will continue to be available on terms similar to those presently in place.

We are subject to periodic litigation and other regulatory proceedings, which could result in the unexpected expenditure of time and resources.

We are a defendant from time to time in lawsuits and regulatory actions relating to our business.

We are a defendant from time to time in lawsuits and regulatory actions relating

to our business.

Due to the inherent uncertainties of litigation and regulatory proceedings, we cannot accurately predict the ultimate outcome of such proceedings.

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Our failure to manage key executive succession and retention could adversely affect our business.

Our business would be adversely affected if we fail to retain key executives, or to adequately plan for the succession of members of our executive management team.

While we have succession plans in place for members of our executive management team, and continue to review and update those plans, and we have employment agreements with certain key executive officers, these plans and agreements do not guarantee that the services of our executive officers will continue to be available to us or that we will be able to find suitable management personnel to replace departing executives on a timely basis.

Our business would be adversely affected if we fail to retain key executives, to adequately plan for the succession of members of our executive management team, or attract new members to our executive management team, including a permanent Chief Executive Officer.

Clifton E, Sifford, the Vice Chairman of our Board and our former President and Chief Executive Officer, has served as our Interim President and Chief Executive Officer since February 24, 2026.

Sifford was appointed to this role following the separation of our previous President and Chief Executive Officer.

Sifford is expected to continue to serve in this role until a permanent successor is identified.

This change in executive leadership may result in changes and/or disruptions to our operations, including organizational changes or changes in business strategy.

We can provide no assurances that any such changes will be beneficial or will have the desired impact.

Additionally, during this transition period, substantial effort and time will be invested by our Board and by our executive management team in finding a permanent President and Chief Executive Officer, which may divert attention from other matters.

We have succession plans in place for other members of our executive management team, which we continue to review and update, and we have employment agreements with certain key executive officers.

These plans and agreements do not guarantee the continued employment of current executive officers or that we will be able to find suitable management personnel to replace departing executive officers on a timely basis.

Our failure to attract and retain qualified personnel and control labor costs could adversely affect our business.

Our business model requires us to train, motivate and manage our employees and to attract, motivate and retain additional qualified managerial and merchandising personnel.

Our ability to control costs and meet our labor needs in a rising wage and inflationary environment is subject to external factors such as unemployment levels, prevailing wage rates paid by those with whom we compete for talent, health care and minimum wage legislation, and changing demographics.

Our ability to control costs and meet our labor needs is subject to external factors such as unemployment levels, prevailing wage rates paid by those with whom we compete for talent, health care and minimum wage legislation, changing demographics and general wage inflationary pressure.

If we are unable to attract and retain quality sales associates and management, embrace automation, such as robot, artificial intelligence, and self-checkout technology, as necessary, or if market conditions or changes to minimum wage laws result in the need for higher wages paid to employees, our ability to meet our growth goals or to sustain expected levels of profitability may be compromised and our financial condition, results of operations and cash flows may be adversely affected.

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We will require significant funds to implement our business strategy and meet our other liquidity needs.

We may not generate sufficient cash flow from operations or obtain sufficient borrowings under our credit agreement to finance our business strategy and meet our other liquidity needs.

We may not generate sufficient cash flow from operations or obtain sufficient borrowings under our credit agreement to finance our business strategy, including our rebanner strategy, and meet our other liquidity needs.

Failure to generate or raise sufficient funds may require us to modify, delay or abandon some of our future growth or expenditure plans.

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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 trade names, 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.

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Risks Relating to the Ownership of Our Common Stock

We are controlled by our principal shareholders.

Wayne Weaver, our Chairman of the Board of Directors, and his spouse together beneficially own approximately 31.7% of our outstanding common stock.

In addition, Mr.

Weaver's adult daughter is the sole trustee of several grantor retained annuity trusts and, as a result, beneficially owns less than 5% of our outstanding common stock held by such trusts.

Accordingly, the Weaver family is able to exert substantial influence over our management and operations.

In addition, their interests may differ from, or be opposed to, the interests of our other shareholders, and their ownership may have the effect of delaying or preventing a change in control that may be favored by other shareholders.

Perception of the overall retail industry and other macroeconomic conditions may impact our stock price and operations.

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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.

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.

In the future, our results of operations and financial condition may not allow for a dividend to be declared, or the Board of Directors may decide not to continue to declare dividends.

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However, we are not obligated to make any purchases under the share repurchase program and the program may be amended, suspended or discontinued at any time.

We are controlled by our principal shareholders.

Wayne Weaver, our Chairman of the Board of Directors, and his spouse together beneficially own approximately 33.8% of our outstanding common stock.

In addition, Mr.

Weaver's adult daughter is the sole trustee of several grantor retained annuity trusts and, as a result, beneficially owns less than 5% of our outstanding common stock held by such trusts.

Accordingly, the Weaver family is able to exert substantial influence over our management and operations.

Provisions of our organizational documents and Indiana law might deter acquisition bids for us.

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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, which currently includes the Board members with cybersecurity acumen, 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.

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”).

Our CIO has over 30 years of experience with our information systems and is versed in cybersecurity frameworks and best practices.

Our CIO has over 35 y ears of experience with our information systems and is versed in cybersecurity frameworks and best practices.

A security committee assists the CIO with developing controls, selecting vendor partners, identifying emerging threats and implementing best practices within our risk-based framework.

Our security team is comprised of professionals with cybersecurity certifications and specialized training.

The CIO addresses how we allocate capital resources to our cybersecurity processes with our executive leadership team, which includes our Chief Executive Officer, Chief Operating Officer, Chief Merchandising Officer and Chief Financial Officer.

Our CIO addresses how we allocate capital resources to our cybersecurity processes with our executive leadership team, which includes our Interim Chief Executive Officer, Chief Operating Officer, Chief Merchandising Officer and Chief Financial Officer.

The CIO reports directly to our Chief Operating Officer.

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If a breach of our control structure were to occur, our executive leadership team, Audit Committee and counsel would be briefed by the CIO and a determination would be made on whether such issue is material to warrant disclosure.

As of February 1, 2025, we have not identified any risks from cybersecurity threats that have materially affected or are reasonably likely to materially affect us, including our operations, business strategy, results of operations, cash flow or financial condition.

As of January 31, 2026, we have not identified any risks from cybersecurity threats that have materially affected or are reasonably likely to materially affect us, including our operations, business strategy, results of operations, cash flow or financial condition.

Even with our current control processes and a continuous improvement mindset, cybersecurity threats constantly evolve.

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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 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.

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”, “—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” and “—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” 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