Financial Analysis

"COMMITMENTS AND CONTINGENCIES LEGAL MATTERS We are involved in various legal proceedings that are incidental to the conduct of our business. Although it is not possible to predict with certainty the eventual outcome of any litigation, we believe the amount of any potential liability with respect to current legal proceedings will not be material to our results of operations or financial condition. However, legal proceedings are inherently uncertain. As a result, the outcome of a particular matter or a combination of matters may be material to our results of operations for a particular period. We are also involved in certain legal matters in which we have agreed to settlement terms with the plaintiffs, which remain subject to court approval, and such matters are covered under our insurance policies and accordingly associated legal fees and settlement costs will be paid by the insurer. As a result, we have recorded accrued expenses for estimated settlement obligations covered by insurance with corresponding receivables on the condensed consolidated balance sheets of $25.3 million, $10.6 million and $12.4 million as of August 1, 2026, January 31, 2026 and August 2, 2025, respectively. As additional information becomes available, we will assess any potential liabilities related to pending litigation and revise the estimates as needed. IEEPA TARIFF RECOVERIES On February 20, 2026, the U.S. Supreme Court rendered a decision invalidating tariffs imposed under the International Emerg …

CommitmentsAndContingenciesDisclosureTextBlock · excerpt; the full note is in the filing

"DEBT Debt consisted of the following: (in thousands) August 1, 2026 January 31, 2026 August 2, 2025 ABL Revolver $ 309,723 $ 319,063 $ 397,914 Term Loan 116,250 119,625 123,000 Total debt 425,973 438,688 520,914 Less unamortized Term Loan debt issuance costs (2,914) (3,732) (4,571) Less current maturities of long-term debt (6,750) (6,750) (6,750) Long-term debt $ 416,309 $ 428,206 $ 509,593 On March 30, 2022, we replaced our previous senior secured asset-based revolving credit facility with our current ABL Revolver, which was subsequently amended on February 28, 2023, June 23, 2023, and February 27, 2026. The amended ABL Revolver provides a revolving line of credit of up to $600.0 million, including a Canadian sub-limit of up to $60.0 million, a $75.0 million sub-limit for the issuance of letters of credit, a $60.0 million sub-limit for swing-loan advances for U.S. borrowings, and a $6.0 million sub-limit for swing-loan advances for Canadian borrowings. In addition, the ABL Revolver includes a first-in last-out term loan (""FILO Term Loan"") with $29.5 million borrowed. The FILO Term Loan may be repaid in full, but not in part, so long as certain payment conditions are satisfied. Once repaid, no portion of the FILO Term Loan may be reborrowed. The ABL Revolver matures on the earlier of the maturity date of the Term Loan (currently June 2028) or February 2031 and is secured by a first-priority lien on substantially all of our personal property assets, including credit card re …

DebtDisclosureTextBlock · excerpt; the full note is in the filing

The following table presents net sales disaggregated by product and service categories for the Retail segment and sales channel for the Brand Portfolio segment: Three months ended Six months ended (in thousands) August 1, 2026 August 2, 2025 August 1, 2026 August 2, 2025 Net sales: Retail segment: Non-athletic footwear: Women's $ 308,307 $ 312,130 $ 606,012 $ 606,863 Men's 94,616 96,475 174,787 174,919 Kids' 23,834 25,829 46,247 50,263 Athletic footwear 196,753 208,897 380,425 406,126 Accessories and other 47,552 42,672 90,275 74,977 671,062 686,003 1,297,746 1,313,148 Brand Portfolio segment: Wholesale 74,721 62,211 177,667 146,709 Direct-to-consumer 10,233 9,812 20,780 20,167 Other 1,325 1,134 2,350 2,179 86,279 73,157 200,797 169,055 Total segment net sales 757,341 759,160 1,498,543 1,482,203 Elimination of intersegment sales (26,710) (19,398) (71,562) (55,532) Total net sales $ 730,631 $ 739,762 $ 1,426,981 $ 1,426,671

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"STOCK-BASED COMPENSATION For the three months ended August 1, 2026 and August 2, 2025, we recorded stock-based compensation expense of $8.0 million and $6.0 million, respectively. For the six months ended August 1, 2026 and August 2, 2025, we recorded stock-based compensation expense of $14.5 million and $12.1 million, respectively. These costs are included in operating expenses on the condensed consolidated statements of operations. The following table summarizes the restricted stock units (""RSU"") activity for the six months ended August 1, 2026: (in thousands) Shares of Time-Based RSUs Shares of Performance-Based RSUs Outstanding - beginning of period 8,409 1,084 Granted 3,560 2,908 Vested (1,967) Forfeited (242) (343) Outstanding - end of period 9,760 3,649"

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"Recently Issued Accounting Pronouncements- In November 2024, the Financial Accounting Standards Board (""FASB"") issued Accounting Standards Update (""ASU"") 2024-03, Income Statement Expense Disaggregation Disclosures, which requires disaggregated disclosures for specific cost and expense categories such as inventory purchases, employee compensation, depreciation, and amortization, as well as other disclosures. ASU 2024-03 is effective either on a retrospective basis to all prior periods presented or on a prospective basis beginning with our 2027 Annual Report on Form 10-K and subsequent interim periods. We are currently evaluating the impact of adopting ASU 2024-03 to the notes of the consolidated financial statements. In September 2025, the FASB issued ASU 2025-06, Intangibles - Goodwill and Other - Internal Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software, which eliminates accounting consideration of software project development stages and instead requires capitalization to begin when management authorizes and commits to funding the project and it is probable the software will be completed and used as intended. ASU 2025-06 is effective for us in the first quarter of 2028 and early adoption is permitted either on a retrospective, prospective, or modified prospective approach. We are currently evaluating the impact of ASU 2025-06 on the consolidated financial statements and related disclosures."

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"RELATED PARTY TRANSACTIONS SCHOTTENSTEIN AFFILIATES We have transactions with entities owned or controlled by Jay L. Schottenstein, the executive chairman of our Board of Directors (the ""Board""), and members of his family (the ""Schottenstein Affiliates""). As of August 1, 2026, the Schottenstein Affiliates beneficially owned approximately 27% of the Company's outstanding common shares, representing approximately 64% of the combined voting power, consisting of, in the aggregate, 6.0 million Class A common shares and 7.7 million Class B common shares. The following summarizes the related party transactions with the Schottenstein Affiliates for the relevant periods: Leases- We lease certain store and office locations that are owned by the Schottenstein Affiliates. For both the three months ended August 1, 2026 and August 2, 2025, we recorded lease expense from the leases with Schottenstein Affiliates of $1.7 million. For the six months ended August 1, 2026 and August 2, 2025, we recorded lease expense from the leases with Schottenstein Affiliates of $3.4 million and $3.5 million, respectively. As of August 1, 2026, January 31, 2026 and August 2, 2025, we had related party current operating lease liabilities of $4.7 million, $4.5 million and $4.1 million, respectively, and non-current operating lease liabilities of $9.6 million, $11.2 million and $15.4 million, respectively. Other Purchases and Services and Due to Related Parties- Amounts for other purchases and services we i …

RelatedPartyTransactionsDisclosureTextBlock · excerpt; the full note is in the filing

REVENUE DISAGGREGATION OF NET SALES The following table presents net sales disaggregated by product and service categories for the Retail segment and sales channel for the Brand Portfolio segment: Three months ended Six months ended (in thousands) August 1, 2026 August 2, 2025 August 1, 2026 August 2, 2025 Net sales: Retail segment: Non-athletic footwear: Women's $ 308,307 $ 312,130 $ 606,012 $ 606,863 Men's 94,616 96,475 174,787 174,919 Kids' 23,834 25,829 46,247 50,263 Athletic footwear 196,753 208,897 380,425 406,126 Accessories and other 47,552 42,672 90,275 74,977 671,062 686,003 1,297,746 1,313,148 Brand Portfolio segment: Wholesale 74,721 62,211 177,667 146,709 Direct-to-consumer 10,233 9,812 20,780 20,167 Other 1,325 1,134 2,350 2,179 86,279 73,157 200,797 169,055 Total segment net sales 757,341 759,160 1,498,543 1,482,203 Elimination of intersegment sales (26,710) (19,398) (71,562) (55,532) Total net sales $ 730,631 $ 739,762 $ 1,426,981 $ 1,426,671 DEFERRED REVENUE LIABILITIES We record deferred revenue liabilities, included in accrued expenses on the condensed consolidated balance sheets, for remaining obligations we have to our customers. The following table presents the changes and total balances for gift cards and reward programs: Three months ended Six months ended (in thousands) August 1, 2026 August 2, 2025 August 1, 2026 August 2, 2025 Gift cards: Beginning of period $ 24,519 $ 25,829 $ 27,730 $ 28,963 Gift cards redeemed and breakage recognized to net sales …

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"SEGMENT REPORTING Our two reportable segments are the Retail segment and the Brand Portfolio segment. Beginning with the 2025 Form 10-K, we aggregated our previously reported U.S. Retail operating segment and Canada Retail operating segment into a single reportable segment, the Retail segment, due to the similar nature of their operations and economic characteristics. Prior period segment information has been recast to conform to the current reporting segment presentation. We have determined that the Chief Operating Decision Maker (""CODM"") is our Chief Executive Officer. The following tables provide certain financial da ta by segment reconciled to the condensed consolidated financial statements (total assets by segment are not presented in the table below as the CODM does not evaluate, manage, or measure segment performance using total assets): (in thousands) Three months ended August 1, 2026 Three months ended August 2, 2025 Retail Brand Portfolio Total Retail Brand Portfolio Total Net sales: External customer sales $ 671,062 $ 59,569 $ 730,631 $ 686,003 $ 53,759 $ 739,762 Intersegment sales 26,710 26,710 19,398 19,398 Segment net sales 671,062 86,279 757,341 686,003 73,157 759,160 Elimination of intersegment net sales (26,710) (19,398) Consolidated net sales $ 730,631 $ 739,762 Less segment expenses: Cost of sales, exclusive of expenses shown below (369,593) (60,586) (386,531) (55,089) Store selling expenses (86,320) (86,013) Occupancy costs (76,976) (1,075) (75,501) (91 …

SegmentReportingDisclosureTextBlock · excerpt; the full note is in the filing

"DESCRIPTION OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES DESCRIPTION OF BUSINESS Business Operations- Designer Brands Inc. is one of the world's largest designers, producers, and retailers of footwear and accessories. We operate in two reportable segments: the Retail segment and the Brand Portfolio segment. The Retail segment operates the DSW Designer Shoe Warehouse (""DSW"") banner through its direct-to-consumer stores and e-commerce sites in the United States (""U.S."") and Canada and The Shoe Co. and Rubino banners through its direct-to-consumer stores and e-commerce sites in Canada. The Brand Portfolio segment primarily earns revenue from the wholesale of our exclusive and licensed brands to retailers, our Retail segment, and international distributors and the sale of our Vince Camuto, Keds, and Topo brands through direct-to-consumer e-commerce sites. Basis of Presentation- The accompanying unaudited, condensed consolidated financial statements have been prepared by management in accordance with accounting principles generally accepted in the U.S. (""GAAP"") for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, we do not include all of the information and footnotes required by GAAP for complete financial statements. The accompanying financial statements reflect all adjustments that are, in the opinion of management, necessary for a fair presentation of the results for the interim periods presented. All …

SignificantAccountingPoliciesTextBlock · excerpt; the full note is in the filing