Financial Analysis

3. DEBT AND CREDIT AGREEMENT Debt consists of the following: August 2, 2026 February 1, 2026 (in thousands) TRI Senior Secured Note $ 20,395 $ 20,857 TRI Note 3,500 3,500 $ 23,895 $ 24,357 Less: current maturities 1,066 1,020 TRI long-term debt $ 22,829 $ 23,337 Duluth Line of credit $ $ Less: current maturities Duluth long-term debt $ $ TRI Holdings, LLC TRI entered into a senior secured note (TRI Senior Secured Note) with an original balance of $ 26.7 million. The TRI Senior Secured Note is scheduled to mature on October 15, 2038 and requires installment payments with an interest rate of 4.95 %. See Note 6 Variable Interest Entities for further information. TRI entered into a promissory note (TRI Note) with an original balance of $ 3.5 million. The TRI Note is scheduled to mature in November 2038 and requires annual interest payments at a rate of 3.05 %, with a final balloon payment due in November 2038 . While the above notes are consolidated in accordance with Accounting Standards Codification (ASC) Topic 810, Consolidation , the Company is not the guarantor nor the obligor of these notes. Credit Agreement On April 28, 2025, the Company entered into a credit agreement (the Credit Agreement) among the Company, certain financial institutions as Lenders thereto, and BMO Bank N.A., as Administrative Agent, a Swing Line Lender and a Letter of Credit Issuer. The Credit Agreement provides for borrowings of up to $ 100.0 million in aggregate principal amount that are available un …

DebtDisclosureTextBlock · excerpt; the full note is in the filing

Sales disaggregated based upon sales channel is presented below. Three Months Ended Six Months Ended August 2, 2026 August 3, 2025 August 2, 2026 August 3, 2025 (in thousands) Direct-to-consumer $ 70,058 $ 79,135 $ 127,191 $ 141,687 Stores 51,331 52,581 92,792 92,733 $ 121,389 $ 131,716 $ 219,983 $ 234,420

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8. STOCK-BASED COMPENSATION The Company accounts for its stock-based compensation plan in accordance with ASC 718, Stock Compensation , which requires the Company to measure all share-based payments at grant date fair value and recognize the cost over the requisite service period of the award. Total stock compensation expense associated with restricted stock recognized by the Company was $ 0.9 million and $ 1.1 million for the three months ended August 2, 2026 and August 3, 2025, respectively. Total stock compensation expense associated with restricted stock recognized by the Company was $ 1.6 million and $ 1.3 million for the six months ended August 2, 2026 and August 3, 2025, respectively. The Companys total stock compensation expense is included in selling, general and administrative expenses on the Condensed Consolidated Statements of Operations. A summary of the activity in the Companys unvested restricted stock during the six months ended August 2, 2026 is as follows: Weighted average fair value Shares per share Outstanding at February 1, 2026 2,311,132 $ 2.47 Granted 1,544,414 3.18 Vested ( 979,578 ) 2.57 Forfeited ( 16,818 ) 5.71 Outstanding at August 2, 2026 2,859,150 $ 2.80 At August 2, 2026 , the Company had unrecognized compensation expense of $ 6.7 million related to the restricted stock awards, which is expected to be recognized over a weighted average period of 2.1 years. …

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5. FAIR VALUE ASC Topic 820, Fair Value Measurements and Disclosures (ASC 820), defines fair value as the price that would be received to sell an asset, or paid to transfer a liability, in an orderly transaction between market participants at the measurement date (i.e., an exit price). The exit price is based on the amount that the holder of the asset or liability would receive or need to pay in an actual transaction (or in a hypothetical transaction if an actual transaction does not exist) at the measurement date. ASC 820 describes a fair value hierarchy based on three levels of inputs that may be used to measure fair value, of which the first two are considered observable and the last unobservable, as follows: Level 1 Quoted prices in active markets for identical assets or liabilities. Level 2 Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. The Companys assets and liabilities measured at fair value are categorized as Level 3 instruments. The fair value of the Companys available-for-sale security was valued based on a discounted cash flow method (Leve …

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11. INCOME TAXES The Companys provision for income taxes during the interim reporting periods has historically been calculated by applying an estimate of the annual effective tax rate for the full year to ordinary income or loss (pre-tax income or loss excluding unusual or infrequently occurring discrete items) for the reporting period. The effective tax rate related to controlling interest was 2.1 % and ( 6.0 %) for the six months ended August 2, 2026 and August 3, 2025, respectively. The income from TRI was excluded from the calculation of the Companys effective tax rate, as TRI is a limited liability company and not subject to income tax. The Company maintains a valuation allowance against its deferred tax assets as of August 2, 2026 . …

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2. LEASES The expense components of the Companys leases reflected on the Companys condensed consolidated statement of operations were as follows: Consolidated Statement Three Months Ended Six Months Ended of Operations August 2, 2026 August 3, 2025 August 2, 2026 August 3, 2025 (in thousands) Finance lease expense Amortization of right-of- use assets Selling, general and administrative expenses $ 723 $ 723 $ 1,445 $ 1,445 Interest on lease liabilities Interest expense 332 362 671 730 Total finance lease expense $ 1,055 $ 1,085 $ 2,116 $ 2,175 Operating lease expense Selling, general and administrative expenses $ 4,816 $ 4,908 $ 9,687 $ 9,806 Amortization of build-to- suit leases capital contribution Selling, general and administrative expenses 321 321 642 642 Variable lease expense Selling, general and administrative expenses 2,955 2,855 6,016 5,656 Total lease expense $ 9,147 $ 9,169 $ 18,461 $ 18,279 Other information related to leases were as follows: Six Months Ended August 2, 2026 August 3, 2025 (in thousands) Cash paid for amounts included in the measurement of lease liabilities: Financing cash flows from finance leases $ 1,325 $ 1,251 Operating cash flows from finance leases $ 671 $ 730 Operating cash flows from operating leases $ 10,129 $ 9,873 Right-of-use assets obtained in exchange for lease liabilities: Operating leases $ 3,547 $ 2,689 Weighted-average remaining lease term (in years): Finance leases 8 9 Operating leases 5 6 Weighted-average discount rate: Finance …

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"H. Significant Accounting Policies There have been no significant changes to the Companys significant accounting policies as described in the Companys Annual Report on Form 10-K for the year ended February 1, 2026 except as described below. IEEPA Tariff Refunds On February 20, 2026, the U.S. Supreme Court issued a ruling relating to tariffs imposed under the International Emergency Economic Powers Act (""IEEPA""). Following the ruling, the U.S. Customs and Border Protection and other federal agencies issued additional guidance and took actions affecting the assessment, collection, refund, and/or protest of certain tariffs. In March 2026, the U.S. Court of International Trade issued an additional ruling stating that importers that have paid tariffs under IEEPA are due refunds. The Company submitted its refund request in the first quarter of 2026 for reimbursement in the amount of $ 12.5 million, which reflected the amount of IEEPA tariffs the Company determined were paid while such tariffs were in effect from February 2025 through February 2026. The Company received tariff refunds of $ 12.8 million for the three and six months ended August 2, 2026 , which consisted of $ 12.4 million in tariff principal and $ 0.4 million in interest. The Company recorded a receivable of $ 0.1 million for the remaining uncollected tariff principal amount, which is included in prepaid expenses & other current assets on the condensed consolidated balance sheets as of August 2, 2026 , as the C …

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13. RESTRUCTURING On January 8, 2026, as a result of additional analysis of the Company's fulfillment center network, the Company communicated its intent to close the Salt Lake City fulfillment center, as such, the Company recorded employment related termination benefits and other restructuring related expenses beginning in the fourth quarter of 2025. On June 4, 2025, as a result of right-sizing the expense structure of the Company, the Company voluntarily underwent a reduction in force. Three Months Ended Six Months Ended August 2, 2026 August 3, 2025 August 2, 2026 August 3, 2025 (in thousands) Disposals of property and equipment $ $ $ 1,316 $ Employee termination benefit expense 850 8 850 Other restructuring expense 30 Total restructuring expenses $ $ 850 $ 1,354 $ 850 …

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10. REVENUE The Companys revenue primarily consists of the sale of apparel, footwear and hard goods. Sales disaggregated based upon sales channel is presented below. Three Months Ended Six Months Ended August 2, 2026 August 3, 2025 August 2, 2026 August 3, 2025 (in thousands) Direct-to-consumer $ 70,058 $ 79,135 $ 127,191 $ 141,687 Stores 51,331 52,581 92,792 92,733 $ 121,389 $ 131,716 $ 219,983 $ 234,420 Contract Assets and Liabilities Contract assets and liabilities on the Companys consolidated balance sheets are presented in the following table: August 2, 2026 February 1, 2026 (in thousands) Contract assets $ 1,393 $ 2,020 Contract liabilities $ 7,344 $ 9,192 The following table provides the reconciliation of the contract liability related to gift cards for the six months ended: August 2, 2026 August 3, 2025 (in thousands) Balance as of beginning of period $ 9,192 $ 9,782 Gift cards sold 4,553 5,318 Gift cards redeemed ( 6,215 ) ( 7,240 ) Gift card breakage ( 186 ) ( 145 ) Balance as of end of period $ 7,344 $ 7,715 …

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12. SEGMENT REPORTING As of August 2, 2026 and August 3, 2025 , the Company had one reportable segment. The Companys operating segment is based on how the Chief Operating Decision Maker (CODM) makes decisions about allocating resources and assessing performance. The Company's CODM is its Chief Executive Officer . The CODM has the ultimate decision-making authority for resource allocation and assessing the performance of the Company. Thereby, the CODM regularly reviews consolidated net income as the measure of segment profit or loss, as well as significant segment expenses included in the below table, to evaluate operating performance, generate future operating plans and make strategic decisions regarding the allocation of capital. The CODM also uses these measures in monitoring plan versus actual results. The CODM does not review segment assets at a different level or category than those disclosed in the condensed consolidated balance sheets. The following table summarizes the Companys gross margin and selling, general and administrative expenses. Three Months Ended Six Months Ended August 2, 2026 August 3, 2025 August 2, 2026 August 3, 2025 (13 weeks) (13 weeks) (26 weeks) (26 weeks) (in thousands) Net sales $ 121,389 $ 131,716 $ 219,983 $ 234,420 Cost of goods sold (1) 33,028 59,697 74,988 109,046 Gross margin $ 88,361 $ 72,019 $ 144,995 $ 125,374 Less: Outbound shipping expenses $ 6,517 $ 5,976 $ 11,819 $ 12,162 Advertising expenses 13,270 11,756 22,696 21,832 Variable exp …

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