Financial Analysis

Net Sales and percentage of Net Sales, disaggregated by product category, for the thirteen and twenty-six weeks ended August 1, 2026 and August 2, 2025 were as follows: (In thousands) Thirteen Weeks Ended August 1, 2026 Thirteen Weeks Ended August 2, 2025 Non-Athletics: Womens $ 64,267 23 % $ 74,254 24 % Mens 46,727 17 54,837 18 Childrens 20,501 7 20,047 7 Total 131,495 47 149,138 49 Athletics: Womens 46,711 16 47,827 16 Mens 58,803 21 54,874 18 Childrens 31,777 11 37,739 12 Total 137,291 48 140,440 46 Accessories 14,178 5 15,950 5 Other 1,345 0 860 0 Total $ 284,309 100 % $ 306,388 100 % (In thousands) Twenty-six Weeks Ended August 1, 2026 Twenty-six Weeks Ended August 2, 2025 Non-Athletics: Womens $ 127,702 23 % $ 141,392 24 % Mens 90,924 17 103,959 18 Childrens 40,650 7 39,166 7 Total 259,276 47 284,517 49 Athletics: Womens 93,652 17 95,524 16 Mens 113,055 20 104,975 18 Childrens 59,520 11 67,671 12 Total 266,227 48 268,170 46 Accessories 26,934 5 29,307 5 Other 2,602 0 2,109 0 Total $ 555,039 100 % $ 584,103 100 % …

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Note 6 - Stock-Based Compensation Stock-based compensation includes share-settled awards issued pursuant to the Shoe Station Group, 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 and twenty-six weeks ended August 1, 2026 and August 2, 2025, stock-based compensation expense was comprised of the following: (In thousands) Thirteen Weeks Ended August 1, 2026 Thirteen Weeks Ended August 2, 2025 Twenty-six Weeks Ended August 1, 2026 Twenty-six Weeks Ended August 2, 2025 Share-settled equity awards $ 1,809 $ 2,091 $ 5,173 $ 3,629 Employee Stock Purchase Plan 9 9 18 17 Total stock-based compensation expense $ 1,818 $ 2,100 $ 5,191 $ 3,646 Income tax benefit at statutory rates $ 442 $ 511 $ 1,262 $ 887 Additional income tax (shortfall) on vesting of share-settled awards $ 0 $ ( 14 ) $ ( 541 ) $ ( 469 ) As of August 1, 2026 , approximately $ 9.0 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 1.6 years. Share-Settled Equity Awards The following table summarizes transactions for our restricted stock units and performance stock units: Numbe …

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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 August 1, 2026, January 31, 2026 and August 2, 2025: Fair Value Measurements (In thousands) Level 1 Level 2 Level 3 Total As of August 1, 2026 Cash equivalents - money market mutual funds $ 92,128 $ 0 $ 0 $ 92,128 Marketable securities - mutual funds that fund deferred compensation 13,630 0 0 13,630 Total $ 105,758 $ 0 $ 0 $ 105,758 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 August 2, 2025 Cash equivalents - money market mutual funds $ 53,882 $ 0 $ 0 $ 53,882 Marketable securities - mutual funds that fund deferred compensation 13,198 0 0 13,198 Total $ 67,080 $ 0 $ 0 $ 67,080 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 August 1, 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 manage …

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Note 9 Leases We lease all of our physical stores, our Evansville, Indiana distribution center, 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, we also have 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 August 1, 2026, January 31, 2026 or August 2, 2025. Lease costs, including other related occupancy costs, reported in our Condensed Consolidated Statements of Income were as follows for the thirteen and twenty-six weeks ended August 1, 2026 and August 2, 2025: (In thousands) Thirteen Weeks Ended August 1, 2026 Thirteen Weeks Ended August 2, 2025 Twenty-six Weeks Ended August 1, 2026 Twenty-six Weeks Ended August 2, 2025 Operating lease cost $ 17,633 $ 17,787 $ 35,588 $ 35,678 Variable lease cost Occupancy costs 5,874 5,653 11,495 11,539 Percentage rent and other variable lease costs 261 176 759 448 Finance lease cost Amortization of leased assets 18 8 36 16 Interest on lease liabilities 5 3 11 5 Total $ 23,791 $ 23,627 $ …

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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 and twenty-six weeks ended August 1, 2026 and August 2, 2025 were as follows: (In thousands) Thirteen Weeks Ended August 1, 2026 Thirteen Weeks Ended August 2, 2025 Non-Athletics: Womens $ 64,267 23 % $ 74,254 24 % Mens 46,727 17 54,837 18 Childrens 20,501 7 20,047 7 Total 131,495 47 149,138 49 Athletics: Womens 46,711 16 47,827 16 Mens 58,803 21 54,874 18 Childrens 31,777 11 37,739 12 Total 137,291 48 140,440 46 Accessories 14,178 5 15,950 5 Other 1,345 0 860 0 Total $ 284,309 100 % $ 306,388 100 % (In thousands) Twenty-six Weeks Ended August 1, 2026 Twenty-six Weeks Ended August 2, 2025 Non-Athletics: Womens $ 127,702 23 % $ 141,392 24 % Mens 90,924 17 103,959 18 Childrens 40,650 7 39,166 7 Total 259,276 47 284,517 49 Athletics: Womens 93,652 17 95,524 16 Mens 113,055 20 104,975 18 Childrens 59,520 11 67,671 12 Total 266,227 48 268,170 46 Accessories 26,934 5 29,307 5 Other 2,602 0 2,109 0 Total $ 555,039 100 % $ 584,103 100 % 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 stor …

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Note 8 Segment Reporting Shoe Station Group, 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 Income. The CODM uses Net Income to evaluate performance in deciding whether to reinvest profits, facilitate acquisitions or return funds to shareholders through dividends or share repurchases. Net 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 Topic 280 Segment Reporting, 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 financial results of our segment …

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