Financial Analysis

Commitments, Contingencies and Related Parties Legal Proceedings We are subject to legal proceedings and claims that arise in the ordinary course of business, as well as certain other non-ordinary course proceedings, claims and investigations, as described below. We make a provision for a loss contingency when it is both probable that a material liability has been incurred and the amount of the loss can be reasonably estimated. If only a range of estimated losses can be determined, we accrue an amount within the range that, in our judgment, reflects the most likely outcome; if none of the estimates within that range is a better estimate than any other amount, we accrue the low end of the range. For proceedings in which an unfavorable outcome is reasonably possible but not probable and an estimate of the loss or range of losses arising from the proceeding can be made, we disclose such an estimate, if material. If such a loss or range of losses is not reasonably estimable, we disclose that fact. We review any such loss contingency provisions at least quarterly and adjust them to reflect the impacts of negotiations, settlements, rulings, advice of legal counsel and other information and events pertaining to a particular case. We recognize insurance recoveries, if any, when they are probable of receipt. All associated costs due to third-party service providers and consultants, including legal fees, are expensed as incurred. Legal proceedings are inherently unpredictable. It is po …

CommitmentsAndContingenciesDisclosureTextBlock · excerpt; the full note is in the filing

"Financing Arrangements Revolving Line of Credit On February 6, 2018, the Company established a $25.0 million line of credit with Wells Fargo Bank, National Association (""Wells""). On March 25, 2022, the Company amended the credit agreement to extend the maturity date to March 25, 2024, and among other things, increase the maximum revolver commitment from $25.0 million to $40.0 million, subject to borrowing base and availability restrictions. Availability is based on eligible accounts receivable and inventory. The amended agreement contains a financial covenant that requires us to maintain undrawn availability under the credit facility of at least 10% of the lesser of (i) the aggregate commitments in the amount of $40.0 million and (ii) the amounts available under the credit facility based on eligible accounts receivable and inventory. Our credit agreement includes a $1.0 million sublimit for the issuance of letters of credit and a $4.0 million sublimit for swing line loans. Under the amended line of credit, the Company may elect that revolving loans bear interest at either a base rate or a term SOFR based rate, plus, in either case, a margin determined by reference to our quarterly average excess availability under the line of credit and ranging from 0.50% to 0.75% for borrowings accruing interest at a base rate and from 1.625% to 1.850% for borrowings accruing interest at term SOFR. Swing line loans will at all times accrue interest at a base rate plus the applicable margi …

DebtDisclosureTextBlock · excerpt; the full note is in the filing

The following represents net sales disaggregated by channel: (in thousands) 2026 2025 2024 Showrooms $ 468,007 $ 425,863 $ 437,394 Internet 192,349 196,313 199,778 Other 36,759 58,452 63,093 Total net sales $ 697,115 $ 680,628 $ 700,265

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Income Taxes The Company is subject to federal, state and local corporate income taxes. The components of the provision for income taxes reflected on the statements of operations for fiscal 2026, 2025, and 2024 are set forth below (in thousands): 2026 2025 2024 Current taxes: U.S. federal $ (212) $ 6,767 $ 6,898 State and local 922 2,600 3,190 Total current tax expense $ 710 $ 9,367 $ 10,088 Deferred taxes: U.S. federal $ 2,106 $ (3,498) $ (1,238) State and local (216) (976) (888) Total deferred tax (benefit) expense 1,890 (4,474) (2,126) Total income tax expense $ 2,600 $ 4,893 $ 7,962 A reconciliation of income taxes at the federal statutory corporate rate to the effective rate for fiscal 2026, 2025, and 2024 after the adoption of ASU 2023-09 is as follows (dollar amounts in thousands): 2026 2025 2024 U.S. Federal tax at statutory rate $ 1,399 21.0 % $ 3,454 21.0 % $ 6,683 21.0 % State and local income taxes, net of federal effect (1) 512 7.7 % 1,078 6.6 % 1,632 5.1 % Tax Credits: R&D Tax Credit (233) (3.5) % (353) (2.2) % (1,131) (3.6) % Non-taxable or non-deductible items: Section 162(m) Limit on Compensation 262 3.9 % % 149 0.5 % Share-based compensation 577 8.7 % 442 2.7 % 81 0.3 % Penalties 10 0.1 % 316 1.9 % 8 % Meals and Entertainment 21 0.3 % 30 0.2 % 24 0.1 % Changes in unrecognized tax benefits 75 1.1 % (38) (0.2) % 452 1.4 % Other (23) (0.3) % (36) (0.2) % 64 0.2 % Total income tax expense $ 2,600 39.0 % $ 4,893 29.7 % $ 7,962 25.0 % (1) The following states …

IncomeTaxDisclosureTextBlock · excerpt; the full note is in the filing

Leases Components of lease expense were as follows (in thousands): 2026 2025 2024 Operating lease expense $ 37,629 $ 34,469 $ 30,305 Variable and short term lease expense 5,877 7,465 13,290 Total lease expense $ 43,506 $ 41,934 $ 43,595 Variable lease expense includes percentage rent, maintenance, real estate taxes, insurance and other variable charges included in the lease as well as rental expenses related to short term leases. During fiscal 2026, 2025, and 2024, we did not recognize any impairment charges associated with showroom-level right-of-use assets. Future minimum lease payments under non-cancelable leases as of February 1, 2026 were as follows (in thousands): 2027 $ 35,232 2028 36,770 2029 33,588 2030 31,690 2031 26,436 Thereafter 74,481 Total undiscounted future minimum lease payments 238,197 Less: imputed interest (45,686) Total present value of lease obligations 192,511 Less: current operating lease liability (24,111) Operating lease liability- long term $ 168,400 Supplemental cash flow information related to our operating leases is as follows (in thousands): 2026 2025 2024 Operating cash flow information: Amounts paid on operating lease liabilities $ 39,043 $ 34,651 $ 29,748 Non-cash activities: Right-of-use assets obtained in exchange for lease obligations $ 28,840 $ 22,639 $ 42,064 Weighted average remaining lease term - operating leases 6.9 years 6.9 years 7.5 years Weighted average discount rate - operating leases 5.59% 5.23% 4.97%

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"Recent Accounting Pronouncements The Company has considered all recent accounting pronouncements issued by the Financial Accounting Standards Board (""FASB"") and they were considered to be not applicable or the adoption of such pronouncements will not have a material impact on the financial statements. Recent Accounting Pronouncements Adopted Income Taxes. In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, amending existing income tax disclosure guidance, primarily requiring more detailed disclosure for income taxes paid and the effective tax rate reconciliation. We adopted this ASU for fiscal 2026, on a retroactive basis. See Note 4. Income Taxes. Recent Accounting Pronouncements Not Yet Adopted Intangibles-Goodwill and Internal-Use Software. In September 2025, the FASB issued ASU 2025-06 Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40), which updates the cost capitalization threshold for internal-use software developments costs by removing all references to software project development stages and providing new guidance on how to evaluate whether the probable-to-complete recognition threshold has been met. This ASU is effective for annual periods beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating this ASU to determine the impact of adoption on its Condensed Financial Statements and related disclosures. Disaggregation of income statement …

NewAccountingPronouncementsPolicyPolicyTextBlock · excerpt; the full note is in the filing

"Segment Information Segments are reflective of how the chief operating decision maker (""CODM"") reviews operating results for the purpose of allocating resources and assessing performance. The CODM group of the Company is comprised of the Chief Executive Officer and the President. The Company markets and sells its products through an omni-channel platform that provides a seamless and meaningful experience to its customers across multiple channels. The Company has one operating segment which aligns with the way our CODM group evaluates performance and allocates resources within the Company. As the Company's products and sales channels are complementary and analyzed in the same manner, the Company operates its business as one operating segment and therefore it has one reportable segment. The CODM group regularly receives financial information presented on an entity-wide basis. The CODM group uses net sales and net income as reported on the statements of operations to allocate resources, assess performance of our business, and evaluate earnings generated in deciding where to reinvest profits into its single reportable segment. Net sales and net income are used to monitor budget versus actual results. The significant expenses considered by the CODM group in evaluating the performance of our business are consistent with the financial information included on the Company's statements of operations. There are no additional expense categories and amounts that meet the definition of …

SegmentReportingDisclosureTextBlock · excerpt; the full note is in the filing

"Stockholders' Equity Equity Incentive Plan The Company adopted the Second Amended and Restated 2017 Equity Incentive Plan (the ""2017 Equity Plan"") which provides for awards in the form of stock options, stock appreciation rights, restricted stock awards, restricted stock units, performance shares, performance based restricted stock units, cash-based awards and other stock-based awards. All awards shall be granted within 10 years from the effective date of the 2017 Equity Plan. In fiscal 2025, the 2017 Equity Plan was amended to increase the shares of our common stock authorized and reserved for issuance by 1,100,000 shares, which increased the number of shares of common stock reserved for issuance under the 2017 Equity Plan to 3,979,889 shares of common stock. Performance-Based Restricted Stock Units Performance-based restricted stock units (""PSU awards"") granted under the 2017 Equity Plan are generally subject to both a service-based vesting condition and a performance-based vesting condition. PSU awards will vest upon the achievement of specified performance targets established at the beginning of the performance period and subject to continued service through the applicable vesting date. The stock-based compensation expense relating to PSU awards is recognized over the requisite service period when it is probable that the performance condition will be satisfied. In March 2023, Shawn Nelson, our Chief Executive Officer, received a one-time performance and retention lon …

StockholdersEquityNoteDisclosureTextBlock · excerpt; the full note is in the filing

"Subsequent Events Supreme Court Tariff Ruling In February 2026, the Supreme Court of the U.S. issued a ruling striking down certain tariffs previously imposed under the International Emergency Economic Powers Act (""IEEPA""). The ultimate availability, timing, and amount of any potential refunds of such tariffs remain highly uncertain and are subject to further legal, regulatory, and administrative developments. To preserve its rights to recover such duties, the Company has filed a complaint and a protective action with the U.S. Court of International Trade (""CIT"") seeking a full refund of all tariffs paid under the invalidated IEEPA authorities. Following the Supreme Court decision, the U.S. Administration announced a new 10% global tariff under Section 122 of the Trade Act of 1974, subject to certain carveouts. At this time the Company cannot reasonably estimate the total financial impact of this ruling, however it, and any additional tariffs, may materially affect the Companys future results of operations and cash flows. In the event the Company receives a refund of tariffs previously paid, it may elect to return a portion of such amounts to vendors that provided the Company tariff relief and/or price concessions. Any such obligations would be assessed based on commercial considerations, and could reduce any benefit from a refund."

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Commitments and Contingencies Legal Proceedings We are subject to legal proceedings and claims that arise in the ordinary course of business, as well as certain other non-ordinary course proceedings, claims and investigations, as described below. We make a provision for a loss contingency when it is both probable that a material liability has been incurred and the amount of the loss can be reasonably estimated. If only a range of estimated losses can be determined, we accrue an amount within the range that, in our judgment, reflects the most likely outcome; if none of the estimates within that range is a better estimate than any other amount, we accrue the low end of the range. For proceedings in which an unfavorable outcome is reasonably possible but not probable and an estimate of the loss or range of losses arising from the proceeding can be made, we disclose such an estimate, if material. If such a loss or range of losses is not reasonably estimable, we disclose that fact. We review any such loss contingency provisions at least quarterly and adjust them to reflect the impacts of negotiations, settlements, rulings, advice of legal counsel and other information and events pertaining to a particular case. We recognize insurance recoveries, if any, when they are probable of receipt. All associated costs due to third-party service providers and consultants, including legal fees, are expensed as incurred. Legal proceedings are inherently unpredictable. It is possible that our c …

CommitmentsAndContingenciesDisclosureTextBlock · excerpt; the full note is in the filing

"Financing Arrangements Revolving Line of Credit We are party to a credit agreement providing for an asset-based revolving credit facility with the lenders party thereto, and Wells Fargo Bank, National Association (""Wells""), as administrative agent, that matures July 29, 2029. The maximum revolver commitment is $40.0 million, subject to borrowing base and availability restrictions, and also includes an uncommitted accordion feature that allows the Company, subject to certain customary conditions, to increase the size of the revolving credit facility by $10.0 million. Our credit agreement includes a $1.0 million sublimit for the issuance of letters of credit and a $4.0 million sublimit for swing line loans. As of May 3, 2026 and February 1, 2026, the Companys borrowing availability under the line of credit with Wells was $34.9 million and $36.0 million, respectively, and there were no borrowings outstanding on this line of credit."

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The following represents net sales disaggregated by channel: Thirteen weeks ended (amounts in thousands) May 3, 2026 May 4, 2025 Showrooms $ 97,052 $ 96,470 Internet 35,682 33,328 Other 5,462 8,575 Total net sales $ 138,196 $ 138,373

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Income Taxes For the thirteen weeks ended May 3, 2026 and May 4, 2025, the Company recorded an income tax benefit of $5.6 million and $3.8 million, respectively, which reflects an effective tax rate of 33.6% and 25.9%, respectively. The effective tax rate for the thirteen weeks ended May 3, 2026 and May 4, 2025 varies from the 21% federal statutory tax rate primarily due to income state taxes and covered employees compensation limitation under Section 162m. The Company does not anticipate any material adjustments relating to unrecognized tax benefits within the next twelve months; however, the ultimate outcome of tax matters is uncertain and unforeseen results can occur. The Company had no material interest or penalties during the thirteen weeks ended May 3, 2026 and May 4, 2025, and does not anticipate any such items during the next twelve months. The Company's policy is to record interest and penalties directly related to uncertain tax positions as income tax expense in the condensed statements of operations. On July 4, 2025, the One Big Beautiful Bill Act (the OBBBA) was signed into law. The OBBBA includes various changes to U.S. federal income tax law, including extensions of several expiring provisions from the Tax Cuts and Jobs Act of 2017. The OBBBA has multiple effective dates, with certain provisions effective in 2025. The OBBBA did not have a material impact on the Companys effective tax rate for the thirteen weeks ended May 3, 2026. …

IncomeTaxDisclosureTextBlock · excerpt; the full note is in the filing

Leases Components of lease expense were as follows (in thousands): Thirteen weeks ended May 3, 2026 May 4, 2025 Operating lease expense $ 9,955 $ 9,302 Variable and short term lease expense 867 973 Total lease expense $ 10,822 $ 10,275 Variable lease expense includes percentage rent, maintenance, real estate taxes, insurance and other variable charges included in the lease as well as rental expenses related to short term leases. During the thirteen weeks ended May 3, 2026 and May 4, 2025, we did not recognize any impairment charges associated with showroom-level right-of-use assets. Supplemental information related to our operating leases is as follows (in thousands): Thirteen weeks ended (amounts in thousands) May 3, 2026 May 4, 2025 Operating cash flow information: Amounts paid on operating lease liabilities $ 9,901 $ 9,411 Non-cash activities: Right-of-use assets obtained in exchange for lease obligations $ 4,911 $ 12,232 Weighted average remaining lease term - operating leases 6.8 years 7.2 years Weighted average discount rate - operating leases 5.63 % 5.38 %

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Recent Accounting Pronouncements Recent Accounting Pronouncements Adopted Credit Losses. In July 2025, the FASB issued ASU 2025-05, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets. This ASU provides a practical expedient that allows entities to assume that current conditions do not change for the remaining life of the asset when developing reasonable and supportable forecasts for expected credit losses. The Company adopted this ASU effective February 2, 2026, and elected to apply the practical expedient. Due to the nature of the Company's trade receivable balance, the adoption of this ASU did not have a material impact on its condensed financial statements. Recent Accounting Pronouncements Not Yet Adopted Intangibles-Goodwill and Internal-Use Software. In September 2025, the FASB issued ASU 2025-06 Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40), which updates the cost capitalization threshold for internal-use software developments costs by removing all references to software project development stages and providing new guidance on how to evaluate whether the probable-to-complete recognition threshold has been met. This ASU is effective for annual periods beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating this ASU to determine the impact of adoption on its Condensed Financial Statements and related disclosures. Disaggregatio …

NewAccountingPronouncementsPolicyPolicyTextBlock · excerpt; the full note is in the filing

Revenue Recognition The Companys revenue consists substantially of product net sales. The Company reports product net sales net of discounts and recognizes them at the point in time when control transfers to the customer, which generally occurs upon our delivery to a third-party carrier. Shipping and handling charges billed to customers are included in revenue. The Company recognizes shipping and handling expense as fulfillment activities (rather than a promised good or service) when the activities are performed. Accordingly, the Company records the expenses for shipping and handling activities at the same time the Company recognizes revenue. Shipping and handling costs incurred are included in cost of merchandise sold and include inbound freight and tariff costs relative to inventory sold, warehousing, and last mile shipping to our customers. Shipping and handling costs were $34.0 million and $27.2 million during the thirteen weeks ended May 3, 2026 and May 4, 2025, respectively. Estimated refunds for returns and allowances are recorded using our historical return patterns, adjusting for any changes in returns policies. The Company records estimated refunds for net sales returns on a monthly basis as a reduction to net sales and cost of sales on the condensed statement of operations and an increase in inventory and customer returns liability on the condensed balance sheet. As of May 3, 2026 and February 1, 2026, there was a returns allowance recorded on the condensed balance …

RevenueFromContractWithCustomerTextBlock · excerpt; the full note is in the filing

"Segment Information Segments are reflective of how the chief operating decision maker (""CODM"") reviews operating results for the purpose of allocating resources and assessing performance. The CODM group of the Company is comprised of the Chief Executive Officer and the President. The Company markets and sells its products through an omni-channel platform that provides a seamless and meaningful experience to its customers across multiple channels. The Company has one operating segment which aligns with the way our CODM group evaluates performance and allocates resources within the Company. As the Company's products and sales channels are complementary and analyzed in the same manner, the Company operates its business as one operating segment and therefore it has one reportable segment. The CODM group regularly receives financial information presented on an entity-wide basis. The CODM group uses net sales and net income (loss) as reported on the condensed statements of operations to allocate resources, assess performance of our business, and evaluate earnings generated in deciding where to reinvest profits into its single reportable segment. Net sales and net income (loss) are used to monitor budget versus actual results. The significant expenses considered by the CODM group in evaluating the performance of our business are consistent with the financial information included on the Company's condensed statements of operations. There are no additional expense categories and am …

SegmentReportingDisclosureTextBlock · excerpt; the full note is in the filing

"Stockholders' Equity Equity Incentive Plan The Company adopted the Second Amended and Restated 2017 Equity Incentive Plan (the 2017 Equity Plan) which provides for awards in the form of stock options, stock appreciation rights, restricted stock awards, restricted stock units, performance shares, performance based restricted stock units, cash-based awards and other stock-based awards. All awards shall be granted within 10 years from June 2, 2022, the effective date of the 2017 Equity Plan. In fiscal 2025, the 2017 Equity Plan was amended to increase the shares of our common stock authorized and reserved for issuance by 1,100,000 shares, which increased the number of shares of common stock reserved for issuance under the 2017 Equity Plan to 3,979,889 shares of common stock. Performance Based Restricted Stock Units Performance based restricted stock units (""PSU awards"") granted under the 2017 Equity Plan are generally subject to both a service-based vesting condition and a performance-based vesting condition. PSU awards generally vest over a one to three year period on the anniversaries of the grant date, contingent upon the achievement of specified performance targets established at the beginning of the performance period and continued service through the applicable vesting date. The stock-based compensation expense relating to PSU awards is recognized over the requisite service period when it is probable that the performance condition will be satisfied. In March 2023, Shawn …

StockholdersEquityNoteDisclosureTextBlock · excerpt; the full note is in the filing