Financial Analysis

COMMITMENTS AND CONTINGENCIES The Company is subject to various claims and pending or threatened lawsuits in the normal course of business. The Company is not currently a party to any legal proceedings that it believes would have a material adverse effect on its financial position, results of operations, or cash flows. The Companys contractual obligations and commitments include obligations associated with leases, the ABL facility, senior notes, and employee benefit plans. For additional information, see Note 5, Leases, Note 10, Long-term Debt, and Note 17, Employee Benefit Plans. …

CommitmentsAndContingenciesDisclosureTextBlock · excerpt; the full note is in the filing

Disaggregated revenues from these sources were as follows: Fiscal year ended January 3, 2026 (53 weeks) (dollars in thousands) U.S. Retail U.S. Wholesale International Total Direct-to-consumer $ 1,466,128 $ $ 287,952 $ 1,754,080 Wholesale channel 1,001,338 143,008 1,144,346 $ 1,466,128 $ 1,001,338 $ 430,960 $ 2,898,426 Royalty income, net $ 4,653 $ 10,420 $ 3,029 $ 18,102 Fiscal year ended December 28, 2024 (52 weeks) (dollars in thousands) U.S. Retail U.S. Wholesale International Total Direct-to-consumer $ 1,417,108 $ $ 268,409 $ 1,685,517 Wholesale channel 1,021,396 137,189 1,158,585 $ 1,417,108 $ 1,021,396 $ 405,598 $ 2,844,102 Royalty income, net $ 5,365 $ 11,072 $ 2,814 $ 19,251 Fiscal year ended December 30, 2023 (52 weeks) (dollars in thousands) U.S. Retail U.S. Wholesale International Total Direct-to-consumer $ 1,501,780 $ $ 268,596 $ 1,770,376 Wholesale channel 1,014,584 160,634 1,175,218 $ 1,501,780 $ 1,014,584 $ 429,230 $ 2,945,594 Royalty income, net $ 6,549 $ 11,660 $ 3,201 $ 21,410 …

DisaggregationOfRevenueTableTextBlock · excerpt; the full note is in the filing

STOCK-BASED COMPENSATION Under the Companys Amended and Restated Equity Incentive Plan (the Equity Incentive Plan), the Compensation Committee of the Board may award incentive stock options, stock appreciation rights, restricted stock (including time-based awards, performance-based awards, and market-based awards), stock awards, and stock deliverable on a deferred basis (including restricted stock units). As of January 3, 2026, the maximum number of shares available under the Equity Incentive Plan was 18,778,392, and there were 1,336,742 remaining shares available for grant under the Equity Incentive Plan. The Equity Incentive Plan makes a provision for the treatment of awards upon termination of service or in the case of a merger or similar corporate transaction. Participation in the Equity Incentive Plan is limited to members of the Companys Board, executive officers and other key employees. The limit on shares available under the Equity Incentive Plan, the individual limits, and other award terms are subject to adjustment to reflect stock splits or stock dividends, combinations, and certain other events. All stock options issued under the Equity Incentive Plan expire no later than ten years from the date of grant. The Company periodically evaluates the sufficiency of shares available for issuance under the Plan and may seek shareholder approval to increase shares available for future grants, as needed. The Company recorded stock-based compensation cost as follows: Fiscal y …

DisclosureOfCompensationRelatedCostsShareBasedPaymentsTextBlock · excerpt; the full note is in the filing

FAIR VALUE MEASUREMENTS Investments In support of The William Carter Company Deferred Compensation Plan (the Deferred Compensation Plan), the Company invests comparable amounts in marketable securities, principally equity-based mutual funds, to approximate the participants investment return on employee deferrals of compensation. These investments are held in an irrevocable Rabbi Trust established to fund the Companys obligations under the Deferred Compensation Plan. The Rabbi Trust investments are restricted in their use to meet funding obligations to Plan participants. During the third quarter of fiscal 2025, the Board approved the termination of the Deferred Compensation Plan, effective as of September 30, 2025. See Note 17, Employee Benefit Plans, for additional information regarding the Deferred Compensation Plan termination and expected settlement. In connection with the Deferred Compensation Plans termination, the Company expects to liquidate the Rabbi Trust investments to fund the settlement of the related Deferred Compensation Plan obligations, with final settlement expected to occur in the fourth quarter of fiscal 2026. All of the marketable securities are included in Prepaid expenses and other current assets on the accompanying consolidated balance sheets as of January 3, 2026, and their aggregate fair value was $21.7 million. As of December 28, 2024, the aggregate fair value of the Rabbi Trust investments was $19.5 million and was included in Other assets. The chan …

FairValueDisclosuresTextBlock · excerpt; the full note is in the filing

GOODWILL AND OTHER INTANGIBLE ASSETS The balances and changes in the carrying amount of Goodwill attributable to each segment were as follows: (dollars in thousands) U.S. Retail U.S. Wholesale International Total Balance at December 30, 2023 (*) $ 83,934 $ 74,454 $ 52,149 $ 210,537 Foreign currency impact (3,662) (3,662) Balance at December 28, 2024 $ 83,934 $ 74,454 $ 48,487 $ 206,875 Foreign currency impact 2,119 2,119 Balance at January 3, 2026 $ 83,934 $ 74,454 $ 50,606 $ 208,994 (*) Goodwill attributable to the International segment is net of accumulated impairment losses of $17.7 million. A summary of the carrying value of the Companys intangible assets were as follows: January 3, 2026 December 28, 2024 (dollars in thousands) Weighted-average useful life Gross amount Accumulated amortization Net amount Gross amount Accumulated amortization Net amount Carters tradename Indefinite $ 220,233 $ $ 220,233 $ 220,233 $ $ 220,233 OshKosh tradename (1) Indefinite 40,000 40,000 40,000 40,000 Skip Hop tradename Indefinite 6,000 6,000 6,000 6,000 Finite-life tradenames (2) 5 - 20 years 4,783 2,357 2,426 3,911 2,136 1,775 Total tradenames, net $ 271,016 $ 2,357 $ 268,659 $ 270,144 $ 2,136 $ 268,008 Skip Hop customer relationships 15 years $ 47,300 $ 27,717 $ 19,583 $ 47,300 $ 24,540 $ 22,760 Carters Mexico customer relationships 10 years 3,246 2,701 545 3,145 2,362 783 Total customer relationships, net $ 50,546 $ 30,418 $ 20,128 $ 50,445 $ 26,902 $ 23,543 (1) A non-cash pre-tax impa …

GoodwillAndIntangibleAssetsDisclosureTextBlock · excerpt; the full note is in the filing

INCOME TAXES Provision for Income Taxes The provision for income taxes consisted of the following: Fiscal year ended January 3, 2026 December 28, 2024 December 30, 2023 (dollars in thousands) (53 weeks) (52 weeks) (52 weeks) Current tax provision: Federal $ 10,719 $ 33,397 $ 47,643 State 2,362 7,422 8,943 Foreign 9,119 10,903 13,756 Total current provision $ 22,200 $ 51,722 $ 70,342 Deferred tax (benefit) provision: Federal $ (16) $ (3,965) $ (148) State (444) (25) (512) Foreign 298 (2,432) 60 Total deferred benefit (162) (6,422) (600) Total provision $ 22,038 $ 45,300 $ 69,742 The foreign portion of the tax provision substantially relates to the Companys international operations in Canada, Hong Kong and Mexico, in addition to foreign tax withholdings related to the Companys foreign royalty income. The Company plans to repatriate undistributed earnings from Hong Kong and has provided for deferred income taxes related to these earnings. Since the current U.S. tax regime taxes foreign earnings in the year earned, taxes associated with repatriation are not material. Deferred income taxes have not been provided for undistributed foreign earnings from Canada or Mexico, or any additional outside basis difference inherent in all foreign entities, as these amounts continue to be indefinitely reinvested in foreign operations. Total undistributed earnings from the Companys subsidiaries in Canada and Mexico amounted to $75.9 million. Unrecognized deferred tax liability related to undist …

IncomeTaxDisclosureTextBlock · excerpt; the full note is in the filing

LEASES The Company has operating leases for retail stores, distribution centers, corporate offices, data centers, and certain equipment. The Companys leases generally have initial terms ranging from 3 years to 10 years, some of which may include options to extend the leases for up to 5 years or to terminate the lease early. For the periods presented, the Companys finance leases were not material to the Companys consolidated financial statements. The following components of lease expense were recognized primarily in Selling, general, and administrative expenses, with immaterial amounts recognized in Cost of goods sold, on the Companys consolidated statements of operations for the fiscal periods indicated: Fiscal year ended January 3, 2026 December 28, 2024 December 30, 2023 (dollars in thousands) (53 weeks) (52 weeks) (52 weeks) Operating lease cost $ 182,495 $ 177,034 $ 171,072 Variable lease cost (*) 65,864 57,992 56,089 Net lease cost $ 248,359 $ 235,026 $ 227,161 (*) Includes short-term leases, which are not material, and any operating lease impairment charges. Supplemental balance sheet information related to leases was as follows: January 3, 2026 December 28, 2024 Weighted average remaining operating lease term (years) 5.7 5.9 Weighted average discount rate for operating leases 5.1% 5.0% Cash paid for amounts included in the measurement of operating lease liabilities in fiscal 2025 and fiscal 2024 was $181.9 million and $175.0 million, respectively. Operating lease asset …

LesseeOperatingLeasesTextBlock · excerpt; the full note is in the filing

LONG-TERM DEBT Long-term debt consisted of the following: (dollars in thousands) January 3, 2026 December 28, 2024 $575 million, 7.375% Senior Notes due 2031 $ 575,000 $ $500 million, 5.625% Senior Notes due 2027 500,000 Less: unamortized debt issuance-related costs (7,827) (1,873) Senior notes, net $ 567,173 $ 498,127 Secured revolving credit facility Total long-term debt, net $ 567,173 $ 498,127 Secured Revolving Credit Facility As of January 3, 2026, the Company had no outstanding borrowings under its secured asset-based revolving credit facility (ABL facility), exclusive of $6.3 million of outstanding letters of credit. As of December 28, 2024, the Company had no outstanding borrowings under its secured cash-flow-based revolving credit facility, exclusive of $4.7 million of outstanding letters of credit. As of January 3, 2026 and December 28, 2024, there was $743.7 million and $845.3 million available for future borrowing, respectively. All outstanding borrowings under the Companys ABL facility and secured cash-flow-based revolving credit facility are classified as non-current liabilities on the Companys consolidated balance sheets due to contractual repayment terms under the credit facilities. ABL Facility On November 17, 2025, the Company, through its wholly-owned subsidiary, The William Carter Company (TWCC), entered into a new five-year ABL facility of up to $750.0 million. The ABL facility replaced the Companys existing $850.0 million secured cash-flowbased revolving …

LongTermDebtTextBlock · excerpt; the full note is in the filing

Recent Accounting Pronouncements Adopted in Fiscal 2025 Income Taxes - Improvements to Income Tax Disclosures (ASU 2023-09) In December 2023, the FASB issued ASU No. 2023-09, Income Taxes - Improvements to Income Tax Disclosures. This new guidance requires consistent categories and greater disaggregation of information in the rate reconciliation and greater disaggregation of income taxes paid by jurisdiction. ASU 2023-09 was effective for fiscal years beginning after December 15, 2024. The amendments are required to be applied on a prospective basis; however retrospective application is permitted. The Company adopted ASU 2023-09 in fiscal 2025 and applied it prospectively. The effect of the adoption of ASU 2023-09 was not material to the Companys consolidated financial statements. Refer to Note 15, Income Taxes . To Be Adopted After Fiscal 2025 Disaggregation of Income Statement Expenses (ASU 2024-03) In November 2024, the FASB issued ASU No. 2024-03, Disaggregation of Income Statement Expenses . This new guidance is intended to increase transparency and comparability of financial statements by requiring disclosure of significant expense components for certain expenses on the face of the consolidated statement of operations. The ASU is effective for fiscal years beginning after December 15, 2026 and for interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted. The Company expects to adopt the ASU in the fourth quarter of fiscal 2027 …

NewAccountingPronouncementsPolicyPolicyTextBlock · excerpt; the full note is in the filing

EMPLOYEE BENEFIT PLANS The Company maintains defined contribution plans, a deferred compensation plan, and two defined benefit plans. The two defined benefit plans include the OshKosh BGosh pension plan and a post-retirement life and medical plan. OshKosh BGosh Pension Plan Pension Plan Settlement In fiscal 2024, the Board authorized the termination of the pension plan, with an effective date of November 30, 2024, through single-sum distributions and the purchase of annuity contracts. During the third quarter of fiscal 2025, the Company substantially completed the process of settling its pension obligations under the pension plan. In August 2025, the pension plan used existing pension plan assets to purchase non-participating annuity contracts from an insurance company and to make single-sum payments to certain plan participants, thereby settling its existing pension benefit obligations. In the first quarter of fiscal 2026, the Company distributed the surplus plan assets, net of final plan expenses and adjustments, in accordance with the terms of the plan and regulatory requirements. These settlement transactions had no cash impact on the Company (as they were funded by pension plan assets) but did result in a non-cash pre-tax pension settlement charge of $8.8 million in fiscal 2025, recorded within Pension plan settlement on the Companys consolidated statement of operations. The charge reflects the recognition of $5.4 million of deferred losses associated with its pension ob …

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RELATED PARTY TRANSACTIONS In August 2025, the Company appointed Emily D. Evert to its executive leadership team as Chief Strategy Officer. Prior to joining the Company, Ms. Evert was a managing director and partner at The Boston Consulting Group, Inc. (BCG). The Company engaged BCG to provide general consulting services in fiscal 2024 and to support operating model improvement initiatives in fiscal 2025. Aggregate fees paid to BCG were approximately $14.8 million and $4.9 million in fiscal 2025 and fiscal 2024, respectively. As of January 3, 2026, the Company had no outstanding payables to BCG related to these engagements. As of December 28, 2024, outstanding payables to BCG related to these engagements were $0.1 million. BCG is considered a related party as a result of Ms. Everts employment with the Company. These arrangements were entered into with BCG prior to Ms. Everts joining the Company and the engagements with BCG were entered into on terms Management believes to be consistent with those negotiated in an arms-length transaction with an unrelated third party. …

RelatedPartyTransactionsDisclosureTextBlock · excerpt; the full note is in the filing

ORGANIZATIONAL RESTRUCTURING In the third quarter of fiscal 2025, the Company initiated an organizational restructuring of its offices-based workforce to right-size its cost structure and improve future profitability. In connection with this restructuring, the Company recorded charges of $9.8 million in Selling, general and administrative expenses, primarily related to severance and other termination benefits. As of January 3, 2026, the Company had an accrual of $8.8 million related to these actions recorded in Other current liabilities on the consolidated balance sheets. The Company expects to pay substantially all of the remaining severance and other termination benefits during the first two quarters of fiscal 2026.

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REVENUE RECOGNITION The Company generates revenue primarily from the sale of products to retail and wholesale customers and from royalties earned under licensing arrangements. Contracts with customers include written agreements as well as arrangements that are implied by customary business practices or law. The Companys revenue recognition policies are described in Note 2, Summary of Significant Accounting Policies . Disaggregation of Revenue The Company sells products directly to consumers (direct-to-consumer) through its retail stores, eCommerce websites, and mobile app, and to other retailers and partners that in turn sell the products to their own customers (wholesale channel). The Company also earns royalties from certain of its licensees that sell products under the Companys brands. Disaggregated revenues from these sources were as follows: Fiscal year ended January 3, 2026 (53 weeks) (dollars in thousands) U.S. Retail U.S. Wholesale International Total Direct-to-consumer $ 1,466,128 $ $ 287,952 $ 1,754,080 Wholesale channel 1,001,338 143,008 1,144,346 $ 1,466,128 $ 1,001,338 $ 430,960 $ 2,898,426 Royalty income, net $ 4,653 $ 10,420 $ 3,029 $ 18,102 Fiscal year ended December 28, 2024 (52 weeks) (dollars in thousands) U.S. Retail U.S. Wholesale International Total Direct-to-consumer $ 1,417,108 $ $ 268,409 $ 1,685,517 Wholesale channel 1,021,396 137,189 1,158,585 $ 1,417,108 $ 1,021,396 $ 405,598 $ 2,844,102 Royalty income, net $ 5,365 $ 11,072 $ 2,814 $ 19,251 Fiscal …

RevenueFromContractWithCustomerTextBlock · excerpt; the full note is in the filing

SEGMENT INFORMATION The Company reports segment information based upon a management approach. The management approach refers to the internal reporting that is used by management for making operating decisions and assessing the performance of the Companys reportable segments. The Company has three operating and reportable segments: U.S. Retail, U.S. Wholesale, and International. The U.S. Retail segment consists of revenue primarily from sales of products in the United States through our retail stores, eCommerce websites, and mobile app. Similarly, the U.S. Wholesale segment consists of revenue primarily from sales in the United States of products to our wholesale partners. The International segment consists of revenue primarily from sales of products outside the United States, largely through our retail stores and eCommerce websites in Canada and Mexico, and sales to our international wholesale customers and licensees. The Company sells similar products in each of its three segments. The Companys chief operating decision maker is the Chief Executive Officer. The chief operating decision maker evaluates the operating performance of the segments based upon each segments net sales and segment operating income. Segment operating income includes net sales, royalty income, and related cost of goods sold and selling, general, and administrative expenses attributable to each segment. Segment operating income excludes unallocated corporate expenses as well as specific charges that are …

SegmentReportingDisclosureTextBlock · excerpt; the full note is in the filing

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation Principles of Consolidation The accompanying consolidated financial statements include the accounts of Carters, Inc. and its wholly owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. Fiscal Year The Companys fiscal year ends on the Saturday in December or January nearest December 31. Every five or six years, our fiscal year includes an additional 53 rd week of results. Fiscal 2025 ended on January 3, 2026, and contained 53 calendar weeks. Fiscal 2024 ended on December 28, 2024, and fiscal 2023 ended on December 30, 2023, both contained 52 calendar weeks. Certain expenses increased in relationship to the additional net sales from the 53rd week, while other expenses, such as fixed costs and expenses incurred on a calendar-month basis, did not increase. The consolidated gross margin for the additional net sales from the 53rd week is comparable to the consolidated gross margin for fiscal 2025. Use of Estimates in the Preparation of the Consolidated Financial Statements The preparation of these consolidated financial statements in conformity with accounting principles generally accepted in the United States (U.S. GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expe …

SignificantAccountingPoliciesTextBlock · excerpt; the full note is in the filing

COMMON STOCK Open Market Share Repurchases The Companys Board has authorized the repurchase of shares of the Companys common stock under share repurchase programs with an aggregate authorization of up to $1.00 billion. As of January 3, 2026, the total remaining capacity under outstanding repurchase authorizations was $599.0 million, based on settled repurchase transactions. The share repurchase authorizations have no expiration dates. The Company repurchased and retired shares in open market transactions in the following amounts for the fiscal periods indicated: Fiscal year ended January 3, 2026 December 28, 2024 December 30, 2023 Number of shares repurchased (1) 736,423 1,446,269 Aggregate cost of shares repurchased (dollars in thousands) (2) $ $ 50,526 $ 100,034 Average price per share (2) $ $ 68.61 $ 69.17 (1) Share repurchases were made in compliance with all applicable rules and regulations and in accordance with share repurchase authorizations. The Company did not repurchase and retire shares through open market transactions in fiscal 2025. (2) The aggregate cost of share repurchases and average price paid per share exclude excise tax on share repurchases imposed as part of the Inflation Reduction Act of 2022. Future repurchases may occur from time to time in the open market, in privately negotiated transactions, or otherwise. The timing and amount of any repurchases will be at the discretion of the Company subject to restrictions under the Companys secured asset-based …

StockholdersEquityNoteDisclosureTextBlock · excerpt; the full note is in the filing

COMMITMENTS AND CONTINGENCIES The Company is subject to various claims and pending or threatened lawsuits in the normal course of business. The Company is a defendant in a legal matter related to allegations of intellectual property infringement. Given the inherent uncertainty of litigation, it is reasonably possible that we may incur a loss; however, the Company is unable to estimate the likelihood of a loss or the range of possible loss at this time. The ultimate outcome of this matter, including our estimate that it is reasonably possible a loss could be incurred, is inherently uncertain and the ultimate outcome of the litigation could be materially different from our current estimates. The Companys contractual obligations and commitments include obligations associated with leases, the secured revolving credit agreement, senior notes, and employee benefit plans. …

CommitmentsAndContingenciesDisclosureTextBlock · excerpt; the full note is in the filing

Fiscal quarter ended July 4, 2026 (dollars in thousands) U.S. Retail U.S. Wholesale International Total Direct-to-consumer $ 304,677 $ $ 63,288 $ 367,965 Wholesale channel 215,552 31,973 247,525 $ 304,677 $ 215,552 $ 95,261 $ 615,490 Royalty income, net $ 753 $ 1,793 $ 816 $ 3,362 Two fiscal quarters ended July 4, 2026 (dollars in thousands) U.S. Retail U.S. Wholesale International Total Direct-to-consumer $ 636,925 $ $ 127,165 $ 764,090 Wholesale channel 466,959 65,554 532,513 $ 636,925 $ 466,959 $ 192,719 $ 1,296,603 Royalty income, net $ 2,194 $ 4,682 $ 1,105 $ 7,981 Fiscal quarter ended June 28, 2025 (dollars in thousands) U.S. Retail U.S. Wholesale International Total Direct-to-consumer $ 299,549 $ $ 60,619 $ 360,168 Wholesale channel 192,998 32,147 225,145 $ 299,549 $ 192,998 $ 92,766 $ 585,313 Royalty income, net $ 407 $ 2,119 $ 723 $ 3,249 Two fiscal quarters ended June 28, 2025 (dollars in thousands) U.S. Retail U.S. Wholesale International Total Direct-to-consumer $ 593,980 $ $ 114,442 $ 708,422 Wholesale channel 443,094 63,623 506,717 $ 593,980 $ 443,094 $ 178,065 $ 1,215,139 Royalty income, net $ 1,926 $ 5,441 $ 1,213 $ 8,580 The components of Accounts receivable, net were as follows: (dollars in thousands) July 4, 2026 January 3, 2026 June 28, 2025 Trade receivables from wholesale customers, net $ 167,728 $ 174,566 $ 138,164 Royalties receivable 2,918 4,011 3,802 Other receivables (1) 9,010 11,705 7,479 Total gross receivables $ 179,656 $ 190,282 $ 149,445 Less: …

DisaggregationOfRevenueTableTextBlock · excerpt; the full note is in the filing

STOCK-BASED COMPENSATION The Company recorded stock-based compensation expense as follows: Fiscal quarter ended Two fiscal quarters ended (dollars in thousands) July 4, 2026 June 28, 2025 July 4, 2026 June 28, 2025 Restricted stock: Time-based awards (1)(2) $ 2,537 $ 3,268 $ 5,845 $ 12,341 Performance-based awards (2) 153 149 296 431 Market-based awards (2) (153) 171 80 569 Stock awards 1,152 1,600 1,152 1,600 Total $ 3,689 $ 5,188 $ 7,373 $ 14,941 (1) First two quarters of fiscal 2025 include accelerated vesting of outstanding time-based restricted stock awards related to the retirement of Michael D. Casey, the Companys former Chief Executive Officer, in the first quarter of fiscal 2025. (2) Second quarter and first two quarters of fiscal 2026 include forfeitures of outstanding time-based, performance-based, and market-based restricted stock awards related to the departure of Douglas C. Palladini, the Companys former Chief Executive Officer, in the second quarter of fiscal 2026. The Company recognizes compensation cost ratably over the applicable performance periods based on the estimated probability of achievement of its performance targets at the end of each period. On April 28, 2026, Douglas C. Palladini departed the Company as Chief Executive Officer (CEO) and President and resigned as a member of the Board. In connection with his departure, his outstanding restricted stock awards were forfeited, resulting in a reversal of previously recognized stock-based compensation e …

DisclosureOfCompensationRelatedCostsShareBasedPaymentsTextBlock · excerpt; the full note is in the filing

FAIR VALUE MEASUREMENTS Investments In support of The William Carter Company Deferred Compensation Plan (the Deferred Compensation Plan), the Company invests comparable amounts in marketable securities, principally equity-based mutual funds, to approximate the participants investment return on employee deferrals of compensation. These investments are held in an irrevocable Rabbi Trust established to fund the Companys obligations under the Deferred Compensation Plan. The Rabbi Trust investments are restricted in their use to meet funding obligations to Plan participants. In fiscal 2025, the Board approved the termination of the Deferred Compensation Plan, effective as of September 20, 2025. In connection with the Deferred Compensation Plans termination, the Company expects to liquidate the Rabbi Trust investments to fund the settlement of the related Deferred Compensation Plan obligations, with final settlement expected to occur in the fourth quarter of fiscal 2026. All of the marketable securities are included in Prepaid expenses and other current assets on the Companys condensed consolidated balance sheets as of July 4, 2026 and January 3, 2026, and their aggregate fair values were $23.0 million and $21.7 million, respectively. As of June 28, 2025, the aggregate fair value of the Rabbi Trust investments was $20.0 million and was included in Other assets. The change in classification reflects the Companys expectation to liquidate the Rabbi Trust investments to fund the settle …

FairValueDisclosuresTextBlock · excerpt; the full note is in the filing

INCOME TAXES The Companys income tax provision and effective tax rates for the fiscal periods indicated were as follows: Fiscal quarter ended Two fiscal quarters ended (dollars in thousands) July 4, 2026 June 28, 2025 July 4, 2026 June 28, 2025 Income tax provision $ 31,687 $ 1,257 $ 37,207 $ 7,067 Effective income tax rate 23.2 % 73.8 % 23.8 % 30.7 % The Companys effective income tax rate was 23.2% for the second fiscal quarter ended July 4, 2026, compared to 73.8% for the second fiscal quarter ended June 28, 2025. The Companys effective income tax rate was 23.8% for the first two fiscal quarters ended July 4, 2026, compared to 30.7% for the first two fiscal quarters ended June 28, 2025. The decrease in the effective tax rate for each period was driven by discrete tax items recognized in the prior-year periods, including incremental tax expense related to expiring stock-based compensation, which had a disproportionate impact on those rates given the lower level of pre-tax income in the prior year. As of July 4, 2026, the Company had gross unrecognized income tax benefits of $6.0 million, of which $5.0 million, if ultimately recognized, may affect the Companys effective income tax rate in the periods settled. The Company has recorded tax positions for which the ultimate deductibility is more likely than not, but for which there is uncertainty about the timing of such deductions. …

IncomeTaxDisclosureTextBlock · excerpt; the full note is in the filing

LONG-TERM DEBT Long-term debt consisted of the following: (dollars in thousands) July 4, 2026 January 3, 2026 June 28, 2025 $575 million 7.375% Senior Notes due 2031 $ 575,000 $ 575,000 $ $500 million 5.625% Senior Notes due 2027 500,000 Less unamortized debt issuance-related costs (7,192) (7,827) (1,469) Senior notes, net $ 567,808 $ 567,173 $ 498,531 Secured revolving credit facility Total long-term debt, net $ 567,808 $ 567,173 $ 498,531 Secured Revolving Credit Facility As of July 4, 2026 and January 3, 2026, the Company had no outstanding borrowings under its secured asset-based revolving credit facility (ABL facility), exclusive of $5.8 million and $6.3 million of outstanding letters of credit, respectively. As of June 28, 2025, the Company had no outstanding borrowings under its secured cash-flow-based revolving credit facility, exclusive of $6.9 million of outstanding letters of credit. As of July 4, 2026, January 3, 2026, and June 28, 2025, there was approximately $568.6 million, $743.7 million, and $843.1 million available for future borrowing, respectively. Any outstanding borrowings under the Companys ABL facility and secured cash-flow-based revolving credit facility are classified as non-current liabilities on the Companys condensed consolidated balance sheets due to contractual repayment terms under the credit facility. However, these repayment terms also allow us to repay some or all of the outstanding borrowings at any time. ABL Facility On November 17, 2025, …

LongTermDebtTextBlock · excerpt; the full note is in the filing

Recent Accounting Pronouncements Disaggregation of Income Statement Expenses (ASU 2024-03) In November 2024, the FASB issued ASU No. 2024-03, Disaggregation of Income Statement Expenses. The ASU is intended to increase transparency and comparability of financial statements by requiring public business entities to disclose in the notes to the financial statements additional information about specified expense components included in certain expense captions presented on the face of the consolidated statement of operations. The ASU is effective for fiscal years beginning after December 15, 2026 and for interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted. The Company expects to adopt the ASU for its fiscal 2027 annual reporting period using a prospective transition method. The Company does not expect adoption of ASU to have a material impact on amounts reported in its consolidated financial statements; however, adoption will require additional disclosures in the notes to the consolidated financial statements. Internal-Use Software (ASU 2025-06) In September 2025, the FASB issued ASU No. 2025-06, IntangiblesGoodwill and OtherInternal-Use Software: Targeted Improvements to the Accounting for Internal-Use Software. The ASU modernizes the accounting for internal-use software by removing the existing software development stages model and instead requiring capitalization of internal-use software costs when (1) management has authorized a …

NewAccountingPronouncementsPolicyPolicyTextBlock · excerpt; the full note is in the filing

ORGANIZATIONAL RESTRUCTURING In fiscal 2025, the Company initiated an organizational restructuring of its offices-based workforce to right-size its cost structure and improve future profitability. In connection with this restructuring, the Company recorded charges of $9.8 million in Selling, general, and administrative expenses in fiscal 2025, primarily related to severance and other termination benefits. As of January 3, 2026, the Company had an accrual of $8.8 million related to these actions recorded in Other current liabilities on the condensed consolidated balance sheets. During the first two quarters of fiscal 2026, the Company paid substantially all of the remaining severance and other termination benefits and completed the restructuring. The Company recorded no charges related to this restructuring during the second quarter or the first two quarters of fiscal 2026

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REVENUE RECOGNITION The Company generates revenue primarily from the sale of products to retail and wholesale customers and from royalties earned under licensing arrangements. Contracts with customers include written agreements as well as arrangements that are implied by customary business practices or law. Disaggregation of Revenue The Company sells its products directly to consumers (direct-to-consumer) through its retail stores, eCommerce websites, and mobile app, and to other retailers and partners that in turn sell the products to their own customers (wholesale channel). The Company also earns royalties from certain of its licensees that sell products under the Companys brands. Disaggregated revenues from these sources were as follows: Fiscal quarter ended July 4, 2026 (dollars in thousands) U.S. Retail U.S. Wholesale International Total Direct-to-consumer $ 304,677 $ $ 63,288 $ 367,965 Wholesale channel 215,552 31,973 247,525 $ 304,677 $ 215,552 $ 95,261 $ 615,490 Royalty income, net $ 753 $ 1,793 $ 816 $ 3,362 Two fiscal quarters ended July 4, 2026 (dollars in thousands) U.S. Retail U.S. Wholesale International Total Direct-to-consumer $ 636,925 $ $ 127,165 $ 764,090 Wholesale channel 466,959 65,554 532,513 $ 636,925 $ 466,959 $ 192,719 $ 1,296,603 Royalty income, net $ 2,194 $ 4,682 $ 1,105 $ 7,981 Fiscal quarter ended June 28, 2025 (dollars in thousands) U.S. Retail U.S. Wholesale International Total Direct-to-consumer $ 299,549 $ $ 60,619 $ 360,168 Wholesale channel …

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SEGMENT INFORMATION The Company reports segment information based upon a management approach. The management approach refers to the internal reporting that is used by management for making operating decisions and assessing the performance of the Companys reportable segments. The Company has three operating and reportable segments: U.S. Retail, U.S. Wholesale, and International. The U.S. Retail segment consists of revenue primarily from sales of products in the United States through our retail stores, eCommerce websites, and mobile app. Similarly, the U.S. Wholesale segment consists of revenue primarily from sales in the United States of products to our wholesale partners. The International segment consists of revenue primarily from sales of products outside the United States, largely through our retail stores and eCommerce websites in Canada and Mexico, and sales to our international wholesale customers and licensees. The Company sells similar products in each of its three segments. The Companys chief operating decision maker is the Chief Executive Officer. The chief operating decision maker evaluates the operating performance of the segments based upon each segments net sales and segment operating income. Segment operating income includes net sales, royalty income, and related cost of goods sold and selling, general, and administrative expenses attributable to each segment. Segment operating income excludes unallocated corporate expenses and the impact of tariff refund recov …

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COMMON STOCK Open Market Share Repurchases The Companys Board of Directors (the Board) has authorized share repurchase programs providing for the repurchase of up to an aggregate of $1.00 billion of the Companys common stock. As of July 4, 2026, the total remaining capacity under outstanding repurchase authorizations, based on settled repurchase transactions, was $599.0 million. The share repurchase authorizations have no expiration dates. The Company did not repurchase and retire any shares of its common stock through open market transactions during the first two quarters of fiscal 2026 and 2025. Future repurchases may occur from time to time in the open market, in privately negotiated transactions, or otherwise. The timing and amount of any repurchases will be at the discretion of the Company subject to restrictions under the Companys secured asset-based revolving credit facility and considerations given to market conditions, stock price, other investment priorities, excise taxes, and other factors. Dividends In each of the first two quarters of fiscal 2026, the Companys Board declared, and the Company paid, a cash dividend per common share of $0.25 (for an aggregate of $0.50 per common share for the first two quarters of fiscal 2026). In the first and second quarters of fiscal 2025, the Board declared, and the Company paid, a cash dividend per common share of $0.80 and $0.25, respectively (for an aggregate of $1.05 per common share for the first two quarters of fiscal 2025 …

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