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 fully covered under our insurance policies and accordingly all associated legal fees and settlement costs will be paid by the insurer. As a result, we have recorded accrued expenses for the estimated settlement obligations with corresponding receivables on the consolidated balance sheets. As additional information becomes available, we will assess any potential liabilities related to pending litigation and revise the estimates as needed. IEEPA TARIFF RECOVERY On February 20, 2026, the U.S. Supreme Court rendered a decision invalidating tariffs imposed under the International Emergency Economic Powers Act (the ""IEEPA""). During April 2026, the CBP launched the Consolidated Administration and Processing of Entries (""CA …

CommitmentsAndContingenciesDisclosureTextBlock · excerpt; the full note is in the filing

"DEBT Debt consisted of the following: (in thousands) May 2, 2026 January 31, 2026 May 3, 2025 ABL Revolver $ 360,656 $ 319,063 $ 403,255 Term Loan 117,938 119,625 124,687 Total debt 478,594 438,688 527,942 Less unamortized Term Loan debt issuance costs (3,323) (3,732) (5,000) Less current maturities of long-term debt (6,750) (6,750) (6,750) Long-term debt $ 468,521 $ 428,206 $ 516,192 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 receivab …

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 (in thousands) May 2, 2026 May 3, 2025 Net sales: Retail segment: Non-athletic footwear: Women's $ 297,705 $ 294,733 Men's 80,171 78,444 Kids' 22,413 24,434 Athletic footwear 183,672 197,229 Accessories and other 42,723 32,305 626,684 627,145 Brand Portfolio segment: Wholesale 102,946 84,498 Direct-to-consumer 10,547 10,355 Other 1,025 1,045 114,518 95,898 Total segment net sales 741,202 723,043 Elimination of intersegment sales (44,852) (36,134) Total net sales $ 696,350 $ 686,909

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"STOCK-BASED COMPENSATION For the three months ended May 2, 2026 and May 3, 2025, we recorded stock-based compensation expense of $6.5 million and $6.1 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 three months ended May 2, 2026: (in thousands) Shares of Time-Based RSUs Shares of Performance-Based RSUs Outstanding - beginning of period 8,409 1,084 Granted 3,434 2,876 Vested (1,811) Forfeited (96) (271) Outstanding - end of period 9,936 3,689"

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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 May 2, 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 the three months ended May 2, 2026 and May 3, 2025, we recorded lease expense from th e leases with Schottenstein Affiliates of $1.7 million and $1.8 million, respectively. As of May 2, 2026, January 31, 2026 and May 3, 2025, we had related party current operating lease liabilities of $4.1 million, $4.5 million and $4.0 million, respectively, and non-current operating lease liabilities of $10.8 million, $11.2 million and $16.5 million, respectively. Other Purchases and Services and Due to Related Parties- Amounts for other purchases and services we incurred from the Schottenstein Affiliates and the amounts due to the Schottenstein Affiliates, other than operating lease liabilities, were immaterial for all periods …

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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 (in thousands) May 2, 2026 May 3, 2025 Net sales: Retail segment: Non-athletic footwear: Women's $ 297,705 $ 294,733 Men's 80,171 78,444 Kids' 22,413 24,434 Athletic footwear 183,672 197,229 Accessories and other 42,723 32,305 626,684 627,145 Brand Portfolio segment: Wholesale 102,946 84,498 Direct-to-consumer 10,547 10,355 Other 1,025 1,045 114,518 95,898 Total segment net sales 741,202 723,043 Elimination of intersegment sales (44,852) (36,134) Total net sales $ 696,350 $ 686,909 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 (in thousands) May 2, 2026 May 3, 2025 Gift cards: Beginning of period $ 27,730 $ 28,963 Gift cards redeemed and breakage recognized to net sales (13,990) (14,562) Gift cards issued 10,779 11,428 Balance at end of period $ 24,519 $ 25,829 Reward programs: Beginning of period $ 12,845 $ 14,126 Reward certificates redeemed and expired and other adjustments recognized to net sales (6,024) (6,710) Deferred revenue for reward points issued 5,728 6,478 Balance at end of period $ 12,549 $ …

RevenueFromContractWithCustomerTextBlock · excerpt; the full note is in the filing

"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) Retail Brand Portfolio Total Three months ended May 2, 2026 Net sales: External customer sales $ 626,684 $ 69,666 $ 696,350 Intersegment sales 44,852 44,852 Segment net sales 626,684 114,518 741,202 Elimination of intersegment net sales (44,852) Consolidated net sales $ 696,350 Less segment expenses: Cost of sales, exclusive of expenses shown below (342,388) (75,641) Store selling expenses (83,052) Occupancy costs (75,485) (1,130) Marketing (36,380) (4,150) Distribution and fulfillment costs (13,227) (3,427) Personnel overhead costs (13,644) (11,265) Depreciation and amortization (9,277) (1,806) Other expense items (1 …

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