Financial Analysis

Net Sales and percentage of Net Sales, disaggregated by product category, for the thirteen weeks ended May 2, 2026 and May 3, 2025 were as follows: (In thousands) Thirteen Weeks Ended May 2, 2026 Thirteen Weeks Ended May 3, 2025 Non-Athletics: Womens $ 63,434 24 % $ 67,138 24 % Mens 44,197 16 49,122 18 Childrens 20,149 7 19,119 7 Total 127,780 47 135,379 49 Athletics: Womens 46,941 18 47,697 17 Mens 54,252 20 50,101 18 Childrens 27,743 10 29,932 11 Total 128,936 48 127,730 46 Accessories 12,756 5 13,357 5 Other 1,258 0 1,249 0 Total $ 270,730 100 % $ 277,715 100 % …

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Note 6 - Stock-Based Compensation Stock-based compensation includes share-settled awards issued pursuant to the Shoe Carnival, Inc. Amended and Restated 2017 Equity Incentive Plan in the form of restricted stock units, performance stock units, and restricted and other stock awards. Additionally, we recognize stock-based compensation expense for the discount on shares sold to employees through our Employee Stock Purchase Plan and for cash-settled stock appreciation rights. For the thirteen weeks ended May 2, 2026 and May 3, 2025, stock-based compensation expense was comprised of the following: (In thousands) Thirteen Weeks Ended May 2, 2026 Thirteen Weeks Ended May 3, 2025 Share-settled equity awards $ 3,364 $ 1,537 Employee Stock Purchase Plan 9 9 Total stock-based compensation expense $ 3,373 $ 1,546 Income tax benefit at statutory rates $ 820 $ 376 Additional income tax (shortfall) on vesting of share-settled awards $ ( 541 ) $ ( 455 ) As of May 2, 2026 , approximately $ 14.4 million of unrecognized compensation expense remained related to our share-settled equity awards. The cost is expected to be recognized over a weighted average period of approximately 1.9 years. Share-Settled Equity Awards The following table summarizes transactions for our restricted stock units and performance stock units: Number of Shares Weighted- Average Grant Date Fair Value Outstanding at January 31, 2026 796,409 $ 25.67 Granted 531,796 20.16 Vested ( 283,448 ) 27.86 Forfeited ( 77,944 ) 21.52 O …

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Note 5 - Fair Value Measurements Financial Instruments The following table presents financial instruments that are measured at fair value on a recurring basis at May 2, 2026, January 31, 2026 and May 3, 2025: Fair Value Measurements (In thousands) Level 1 Level 2 Level 3 Total As of May 2, 2026 Cash equivalents - money market mutual funds $ 101,610 $ 0 $ 0 $ 101,610 Marketable securities - mutual funds that fund deferred compensation 13,248 0 0 13,248 Total $ 114,858 $ 0 $ 0 $ 114,858 As of January 31, 2026 Cash equivalents - money market mutual funds $ 109,149 $ 0 $ 0 $ 109,149 Marketable securities - mutual funds that fund deferred compensation 13,636 0 0 13,636 Total $ 122,785 $ 0 $ 0 $ 122,785 As of May 3, 2025 Cash equivalents - money market mutual funds $ 68,330 $ 0 $ 0 $ 68,330 Marketable securities - mutual funds that fund deferred compensation 14,477 0 0 14,477 Total $ 82,807 $ 0 $ 0 $ 82,807 We invest in publicly traded mutual funds with readily determinable fair values. These Marketable Securities are designed to mitigate volatility in our Consolidated Statements of Income associated with our non-qualified deferred compensation plan. As of May 2, 2026, these Marketable Securities were principally invested in equity-based mutual funds, consistent with the allocation in our deferred compensation plan. To the extent there is a variation in invested funds compared to the total non-qualified deferred compensation plan liability, such fund variance is managed through a s …

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Note 9 Leases We lease all of our physical stores, our Evansville, Indiana distribution center, which has a current lease term expiring in 2034 , our Fort Mill, South Carolina corporate headquarters and other warehousing space. We also enter into leases of equipment and other assets. Substantially all of our leases are operating leases; however, as a result of the acquisition of Rogans, we also acquired certain assets subject to finance leases. The finance lease assets and related current liabilities and noncurrent liabilities were recorded in Other Noncurrent Assets, Accrued and Other Liabilities and Other long-term liabilities, respectively. Leases with terms of twelve months or less are immaterial and are expensed as incurred, and we did not have any leases with related parties or any sublease arrangements with any related party or third party as of May 2, 2026, January 31, 2026 or May 3, 2025. Lease costs, including other related occupancy costs, reported in our Condensed Consolidated Statements of Income were as follows for the thirteen weeks ended May 2, 2026 and May 3, 2025: (In thousands) Thirteen Weeks Ended May 2, 2026 Thirteen Weeks Ended May 3, 2025 Operating lease cost $ 17,968 $ 17,891 Variable lease cost Occupancy costs 5,621 5,885 Percentage rent and other variable lease costs 498 272 Finance lease cost Amortization of leased assets 8 8 Interest on lease liabilities 3 3 Total $ 24,098 $ 24,059 …

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Note 7 Revenue Disaggregation of Net Sales by Product Category Net Sales and percentage of Net Sales, disaggregated by product category, for the thirteen weeks ended May 2, 2026 and May 3, 2025 were as follows: (In thousands) Thirteen Weeks Ended May 2, 2026 Thirteen Weeks Ended May 3, 2025 Non-Athletics: Womens $ 63,434 24 % $ 67,138 24 % Mens 44,197 16 49,122 18 Childrens 20,149 7 19,119 7 Total 127,780 47 135,379 49 Athletics: Womens 46,941 18 47,697 17 Mens 54,252 20 50,101 18 Childrens 27,743 10 29,932 11 Total 128,936 48 127,730 46 Accessories 12,756 5 13,357 5 Other 1,258 0 1,249 0 Total $ 270,730 100 % $ 277,715 100 % Accounting Policy and Performance Obligations We operate as an omnichannel, family footwear retailer and provide the convenience of shopping at our physical stores or shopping online through our e-commerce platform. As part of our omnichannel strategy, we offer Shoes 2U, a program that enables us to ship product to a customers home or selected store if the product is not in stock at a particular store. We also offer buy online, pick up in store services for our customers. Buy online, pick up in store provides the convenience of local pickup for our customers. For our physical stores, we satisfy our performance obligation and control is transferred at the point of sale when the customer takes possession of the products. This also includes the buy online, pick up in store scenario described above and includes sales made via our Shoes 2U program when custom …

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Note 8 Segment Reporting Shoe Carnival, Inc. sells footwear and related merchandise for the family across our retail banners and sales channels. With respect to our omnichannel strategy, our e-commerce sales channel is integrated with our Shoe Carnival and Shoe Station physical store locations across 35 states and Puerto Rico and is fundamentally inseparable in how we serve our target customers. Our chief operating decision maker (CODM) is our Interim President and Chief Executive Officer . The CODM assesses the performance of our single reportable segment and decides how to allocate resources based on Net Income that is also reported on the income statement as our consolidated Net (Loss) Income. The CODM uses Net (Loss) Income to evaluate performance in deciding whether to reinvest profits, facilitate acquisitions or return funds to shareholders through dividends or share repurchases. Net (Loss) Income is used to monitor budget versus actual results and in competitive analysis by benchmarking to our peers and competitors. The benchmarking analysis and the monitoring of budgeted versus actual results are used in assessing our performance and in establishing managements compensation. We have concluded that, on the basis of the principles in FASB ASU 2023-07, Segment Reporting (Topic 280), the expenses below require disclosure under the significant expense principle. The CODM does not review assets in evaluating results. Therefore, such information is not provided. Operating fi …

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