Financial Analysis

"Note 3 Acquisitions and Joint Ventures Acquisitions Acquisition of Kurt Geiger On May 6, 2025 (the Acquisition Date), the Company, through its wholly owned subsidiary, SML UK Holding Ltd, completed the acquisition of the entire issued share capital of Mercury Acquisitions Topco Limited (MATL) for an aggregate purchase price of $403,348, which includes cash consideration of $390,453 paid at closing and $12,895 of contingent consideration. The equity interests of MATL were previously held by various institutional shareholders, including the Fifth Cinven Fund, Bain & Company, Inc., and Squam Lake Investors X LP (BGPI), as well as certain management shareholders. MATL is the ultimate parent company of the Kurt Geiger business (Kurt Geiger), which operates primarily in the UK, U.S., and Europe. Kurt Geiger designs and sells footwear and accessories under its own brands including Kurt Geiger London, KG Kurt Geiger, and Carvela through retail stores, e-commerce, and wholesale partnerships, and operates third party concessions in luxury and premium department stores primarily in the UK. Since the Acquisition Date, the results of MATL have been allocated to the Companys existing reportable segments (Wholesale Footwear, Wholesale Accessories/Apparel, Direct-to-Consumer, and Licensing) based on the sales channel and product category that generated the revenue. Purchase Price Allocation The acquisition was accounted for in accordance with Accounting Standards Codification (""ASC"") …

BusinessCombinationDisclosureTextBlock · excerpt; the full note is in the filing

Note 12 Commitments, Contingencies, and Other Legal Proceedings The Company is involved in various legal matters in the ordinary course of business, including contractual disputes, employment-related matters, distribution issues, product liability claims, intellectual property infringement, and other matters. After consulting with legal counsel, management believes that any potential liabilities arising from these matters are not expected to have a material effect on the Company's financial position or results of operations. In accordance with company policy, management will disclose the amount or range of reasonably possible losses that exceed recorded amounts or expected cash flows. Letters of Credit As of June 30, 2026, the Company had $504 in letters of credit outstanding unrelated to the Company's Credit Agreement. Employee Agreements The Company has employment agreements with certain executives in the normal course of business which provide compensation and certain other benefits. These agreements also provide for severance payments under certain circumstances. Future Minimum Royalty and Advertising Commitment Obligations The Company has minimum commitments related to a license agreement. The agreement requires that the Company pay the licensor a royalty equal to a percentage of net revenues and a minimum royalty in the event that specified net sales targets are not achieved. In the first quarter of 2026, the Company entered into an amendment to extend the terms of this …

CommitmentsAndContingenciesDisclosureTextBlock · excerpt; the full note is in the filing

Note 14 Credit Agreement On May 6, 2025, the Company entered into an Amended and Restated Credit Agreement (the Credit Agreement) with various lenders and Citizens Bank, as administrative agent (in such capacity, the Agent), which provides for a term loan facility in the amount of $300,000 and a revolving credit facility with a total capacity of $250,000. The Credit Agreement amends and restates in its entirety the previous credit agreement, dated as of July 22, 2020, among the Company, the various lenders party thereto and Citizens Bank, as administrative agent. The Credit Agreement provides for a term loan facility and a revolving credit facility scheduled to mature on May 6, 2030. The Company may from time to time increase the revolving commitments and/or request incremental term loans in an aggregate principal amount of up to $275,000 if certain conditions are satisfied, including (i) the absence of any default under the Credit Agreement, and (ii) the Company obtaining the consent of the lenders participating in each such increase. Borrowings in U.S. Dollars under the Credit Agreement generally bear interest at a variable rate equal to, at the Companys election, (i) Term SOFR for the applicable interest period plus a specified margin, which is based upon the Companys Total Net Leverage Ratio (as defined in the Credit Agreement) or (ii) the base rate (which is the highest of (a) the prime rate announced by Citizens Bank or its parent company, (b) the sum of the federal fun …

DebtDisclosureTextBlock · excerpt; the full note is in the filing

Note 4 Fair Value Measurements The Company follows ASC Topic 820, Fair Value Measurement (ASC 820), which establishes a framework for measuring fair value and requires disclosures about fair value measurements. 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. It emphasizes that fair value should reflect the assumptions market participants would use in pricing an asset or liability. ASC 820 also establishes a three-tier fair value hierarchy that prioritizes the inputs used in valuation methodologies. A brief description of the fair value hierarchy is as follows: Level 1: Observable inputs such as quoted prices in active markets for identical assets or liabilities. Level 2: Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly. Level 3: Significant unobservable inputs; inputs to the valuation methodology based on unobservable prices or valuation techniques that are significant to the fair value measurement. The Companys financial assets and liabilities subject to fair value measurements as of June 30, 2026 and December 31, 2025 were as follows: June 30, 2026 December 31, 2025 Fair value Level 1 Level 2 Level 3 Fair value Level 1 Level 2 Level 3 Assets: Forward contracts $ 2,697 $ $ 2,697 $ $ 302 $ $ 302 $ Total assets $ 2,697 $ $ 2,697 $ $ 302 $ $ 302 $ Liabilities: Contingent paymen …

FairValueDisclosuresTextBlock · excerpt; the full note is in the filing

Note 10 Goodwill and Other Intangible Assets The following table provides a rollforward of the carrying amount of goodwill by reporting unit for the period ended June 30, 2026: Wholesale Footwear Wholesale Accessories/ Apparel Direct-to-Consumer Net Carrying Amount Balance at January 1, 2026 $ 104,378 $ 82,213 $ 67,927 $ 254,518 Acquisitions and purchase accounting adjustments (1) 538 269 1,965 2,772 Translation (174) (115) (660) (949) Balance at June 30, 2026 $ 104,742 $ 82,367 $ 69,232 $ 256,341 (1) During 2026, in connection with the Company's purchase price allocation for the acquisition of Mercury Acquisitions Topco Limited, the Company recognized a measurement period adjustment to goodwill of $2,690, of which $538 was allocated to the Wholesale Footwear, $269 was allocated to Wholesale Accessories/Apparel, and $1,883 was allocated to the Direct-to-Consumer segments. Refer to Note 3 Acquisitions and Joint Ventures for further information. The following table summarizes the Company's identifiable intangible assets as of June 30, 2026: Estimated Lives Gross Carrying Amount Accumulated Amortization Net Carrying Amount Trademarks 10-20 years $ 16,075 $ (16,075) $ Customer relationships 10-20 years 111,921 (38,059) 73,862 Re-acquired rights 2 years 1,450 (1,450) Total finite-lived other intangible assets 129,446 (55,584) 73,862 Re-acquired right indefinite 24,556 24,556 Trademarks indefinite 176,400 176,400 Total indefinite-lived other intangible assets 200,956 200,956 Total …

GoodwillAndIntangibleAssetsDisclosureTextBlock · excerpt; the full note is in the filing

Note 8 Income Taxes The Companys provision for income taxes for the three and six months ended June 30, 2026 and 2025 is based on the estimated annual effective tax rate, plus or minus discrete items. The following table presents the provision for income taxes and the effective tax rates for the three and six months ended June 30, 2026 and 2025: Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Income / (loss) before provision for income taxes $ 38,062 $ (34,801) $ 133,199 $ 19,527 Provision for income taxes $ 10,137 $ 3,911 $ 33,631 $ 16,979 Effective tax rate 26.6% (11.2)% 25.2% 87.0% The changes between the Companys effective tax rates of 26.6% and (11.2)% for the three months ended June 30, 2026 and June 30, 2025, were primarily due to non-deductible expenses treated as discrete items related to the acquisition of the Kurt Geiger business. The changes between the Companys effective tax rates of 25.2% and 87.0% for the six months ended June 30, 2026 and June 30, 2025, were primarily due to non-deductible expenses treated as discrete items related to the acquisition of the Kurt Geiger business. The Company recognizes interest and penalties, if any, related to uncertain income tax positions in income tax expense. Accrued interest and penalties on unrecognized tax benefits, and interest and penalty expense are immaterial to the Condensed Consolidated Financial Statements. The Company files income tax returns in the U.S. for federal, state, and local pu …

IncomeTaxDisclosureTextBlock · excerpt; the full note is in the filing

Note 5 Leases The Company leases office space, sample production space, warehouses, showrooms, storage units, and retail stores under operating lease arrangements. The Companys lease portfolio consists primarily of real estate. Since most of its leases do not provide a readily determinable implicit rate, the Company estimates its incremental borrowing rate at lease commencement to discount future lease payments. Certain of the Companys retail store leases include variable lease payments based on sales generated at the leased location. Because these payments are not measurable at lease commencement, they are excluded from the measurement of the right-of-use assets and lease liabilities. In accordance with ASC Topic 842, such variable lease costs are recognized as lease expense in the period incurred. The following table presents the lease-related assets and liabilities recognized on the Company's Condensed Consolidated Balance Sheets as of June 30, 2026 and December 31, 2025: Balance Sheet Classification June 30, 2026 December 31, 2025 Assets: Noncurrent Operating lease right-of-use asset $ 235,322 $ 235,855 Liabilities: Current Operating leases current portion $ 58,588 $ 58,827 Noncurrent Operating leases long-term portion 193,722 193,145 Total operating lease liabilities $ 252,310 $ 251,972 Weighted-average remaining lease term 5.7 years 5.6 years Weighted-average discount rate 5.5 % 5.4 % The following table presents the composition of lease costs during the three and six m …

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"Adopted In July 2025, the Financial Accounting Standards Board (""FASB"") issued Accounting Standards Update (""ASU"") 2025-05, ""Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets,"" which introduces a practical expedient for estimating credit losses on current accounts receivable and contract assets. The ASU is effective for fiscal years beginning after December 15, 2025, and interim periods within those annual reporting periods. We adopted the guidance in the first quarter of 2026 on a prospective basis and applied the practical expedient which assumes that current conditions as of the balance sheet date do not change over the remaining life of the asset when estimating expected credit losses for current accounts receivable and current contract assets. The adoption had no material impact on the Condensed Consolidated Financial Statements and related disclosures. Recently Issued Accounting Pronouncements Not Yet Adopted In November 2024, the FASB issued ASU No. 2024-03, ""Income Statement - Reporting Comprehensive Income -Expense Disaggregation Disclosures (Subtopic 220-40),"" which requires disaggregation of certain expense captions into specified categories in disclosures. This new standard is effective for annual reporting periods beginning after December 15, 2026, with early adoption permitted. Adoption of this ASU can be applied using either a prospective or a retrospective approach. The Company …

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Note 13 Operating Segment Information The Company has determined its reportable operating segments based on the internal management structure used by the Companys Chief Operating Decision Maker (or CODM), who is its Chief Executive Officer, to evaluate performance and allocate resources. This structure organizes the business into distinct categories based on product types and sales channels. The Companys reportable operating segments consist of the following: Wholesale Footwear. This segment designs, sources, and markets our brands and sells our products, consisting of footwear, to department stores, mass merchants, off-price retailers, shoe chains, online retailers, national chains, specialty retailers, independent stores, and clubs throughout the United States, the United Kingdom, Europe, Canada, and Mexico, and through our joint ventures and international distributor network. Wholesale Accessories/Apparel. This segment designs, sources, and markets our brands and sells our products, primarily consisting of handbags and apparel, to department stores, mass merchants, off-price retailers, online retailers, specialty retailers, independent stores, and clubs throughout the United States, the United Kingdom, Europe, Canada, and Mexico, and through our joint ventures and international distributor network. Direct-to-Consumer. This segment engages in the sale of footwear, handbags, apparel, and other accessories through Steve Madden, Kurt Geiger London, Dolce Vita, and Carvela full …

SegmentReportingDisclosureTextBlock · excerpt; the full note is in the filing