Financial Performance - Net sales for the three months ended November 1, 2025, increased by $41.8 million, or approximately 3%, to $1,468.8 million compared to $1,427.0 million for the prior year[63] - Net income for the three months ended November 1, 2025, was $129.8 million ($8.31 per share), compared to $124.6 million ($7.73 per share) for the same period in 2024, reflecting a 2.6% increase in net income[59] - Comparable store sales increased by 3% for the third quarter of 2025, compared to a decrease of 4% in the prior year[58] - Gross margin increased to $637.1 million for the three months ended November 1, 2025, up from $607.7 million in the same period in 2024, representing a 4.8% increase[87] - Retail operations segment gross margin as a percentage of sales rose to 45.3% for the three months ended November 1, 2025, compared to 44.5% for the same period in 2024[88] Expenses and Costs - Selling, general and administrative expenses increased by $21.5 million to $440.4 million, representing 30.0% of sales, up from 29.4% in the prior year[59] - Total SG&A expenses increased by $21.5 million to $440.4 million for the three months ended November 1, 2025, representing 30.0% of sales, up from 29.4% in the same period in 2024[93] - Interest and debt income decreased by $1.4 million to $(3.1) million for the three months ended November 1, 2025, compared to $(4.5) million for the same period in 2024[99] - Other expenses decreased by $1.1 million to $5.0 million for the three months ended November 1, 2025, compared to $6.2 million for the same period in 2024[100] Cash Flow and Capital Expenditures - Cash flow provided by operating activities for the nine months ended November 1, 2025, was $505.9 million, an increase of $156.5 million from $349.4 million in the prior year[60] - Net cash flows from operations increased by $156.4 million to $505.9 million for the nine months ended November 1, 2025, compared to $349.4 million for the same period in 2024[106] - Capital expenditures were $73.8 million for the nine months ended November 1, 2025, down from $89.1 million in the same period in 2024[113] Debt and Financial Position - The company operated 272 stores as of November 1, 2025, including 28 clearance centers, with total debt outstanding of $521.6 million[61] - The Company had cash and cash equivalents of $1.149 billion as of November 1, 2025, with a credit facility providing a borrowing capacity of $800 million[118] Special Dividends and Share Repurchase - A special dividend of $30.00 per share was declared on November 20, 2025, payable on January 5, 2026[122] - The Company repurchased 0.3 million shares of Class A Common Stock at an average price of $359.16 per share for $107.8 million during the nine months ended November 1, 2025[121] Strategic Partnerships and Future Expectations - The Company recognized income of $28.5 million from the Citibank Alliance during the nine months ended November 1, 2025, compared to $37.6 million from the Wells Fargo Alliance in the same period in 2024[111] - The company expects income from the new Citibank Alliance to initially be less than historical earnings from the Wells Fargo Alliance[85] - The Company expects cash flows from the new credit program with Citi to initially be less than historical cash flows from the Wells Fargo Alliance[112] - The company plans to continue aligning expenses with sales performance[97] Taxation - The estimated federal and state effective income tax rate for the three months ended November 1, 2025, was approximately 23.1%[103] - The Company expects the fiscal 2025 federal and state effective income tax rate to approximate 19%, influenced by a special dividend of $30.00 per share[104] Inventory and Sales Transactions - The average dollars per sales transaction increased by 5% for the three months ended November 1, 2025, despite a 1% decrease in the number of sales transactions[77] - Total inventory increased by 2% at November 1, 2025, compared to November 2, 2024[91] Construction Segment Performance - The construction segment's net sales decreased by approximately 4% to $68.2 million for the three months ended November 1, 2025, due to reduced construction activity[79] - Remaining performance obligations related to executed construction contracts totaled $92.3 million as of November 1, 2025, a decrease of approximately 54% from February 1, 2025[79] Other Income - Service charges and other income decreased by $1.9 million to $22.2 million for the three months ended November 1, 2025, compared to $24.2 million for the same period in 2024, primarily due to lower finance charges and late fees[84]

Financial Performance - Net sales for the thirteen weeks ended November 1, 2025, were $1,290,619, representing a 7% increase compared to $1,208,966 for the same period in 2024 [102]. - Comparable sales for the thirteen weeks increased by 3%, while the thirty-nine weeks saw a 4% increase compared to the previous year [104]. - Operating income for the thirteen weeks was $155,021, with an operating income margin of 12.0%, down from 14.8% in the prior year [102]. - Net income attributable to A&F for the thirteen weeks was $112,995, resulting in a net income per share of $2.36, compared to $2.50 in the same period last year [102]. - Net income for the thirteen weeks ended November 1, 2025, was $115,100, which is 8.9% of net sales, down from $133,864 or 11.1% for the same period in 2024 [151]. - Adjusted non-GAAP net income attributable to Abercrombie & Fitch for the year-to-date period of Fiscal 2025 was $306,046, representing 8.5% of net sales [125]. - Adjusted non-GAAP net income per diluted share for the thirty-nine weeks ended November 1, 2025, was $6.24, down 12.5% from $7.13 in the prior year [126]. - EBITDA for the thirteen weeks ended November 1, 2025, was $193.6 million, representing 15.0% of net sales, compared to $218.8 million or 18.1% of net sales in the same period of 2024 [127]. - Adjusted EBITDA for the thirty-nine weeks ended November 1, 2025, was $539,204, accounting for 15.0% of net sales, compared to $601,366 or 17.9% for the same period in 2024 [151]. Store Operations - The Company opened 48 new stores, remodeled 24 stores, and closed 10 stores through the end of the third fiscal quarter, with a plan for approximately 40 net store openings in Fiscal 2025 [96]. - The Company is focused on driving sales growth through marketing and store investments while pursuing new geographies via franchise, wholesale, and licensing partnerships [88]. Expenses and Costs - The Company expects to incur approximately $90 million of net tariff expense, or 170 basis points as a percent of net sales, negatively impacting operating profit in Fiscal 2025 [91]. - Cost of sales for the thirteen weeks was $483,670, representing 37.5% of net sales, an increase of 260 basis points from the previous year [108]. - Selling expenses for the thirteen weeks were $420,990, accounting for 35.6% of net sales, an increase of 80 basis points year-over-year [111]. - General and administrative expenses for the thirteen weeks ended November 1, 2025, were $188,246, a decrease of $5 million compared to the same period in 2024, with a percentage of net sales decreasing by 60 basis points to 15.0% [114]. - For the year-to-date period of Fiscal 2025, general and administrative expenses decreased by $12 million compared to the previous year, with a percentage of net sales decreasing by 140 basis points to 15.1% [115]. Cash Flow and Liquidity - Cash and equivalents decreased to $605,783 as of November 1, 2025, from $772,727 as of February 1, 2025 [102]. - For the thirty-nine weeks, net cash provided by operating activities was $313,000, down from $402,756 in the previous year [102]. - The company had cash and cash equivalents of $605.8 million and total liquidity of approximately $1.1 billion, down from $772.7 million and $1.2 billion at the beginning of Fiscal 2025 [131]. - The company expects primary cash requirements over the next twelve months to focus on investments in the business, including inventory acquisition and marketing [129]. Regional Performance - The Americas region saw a net sales increase of 7% for the thirteen weeks, with comparable sales growth of 4% [106]. - Operating income for the Americas region decreased by $16 million, or 360 basis points as a percentage of region net sales, compared to the third quarter of Fiscal 2024 [120]. - Operating income for the EMEA region decreased by $22 million, or 460 basis points as a percentage of region net sales, compared to the year-to-date period of Fiscal 2024 [120]. - Hollister brand net sales increased by 16% for the thirteen weeks, while Abercrombie brand sales decreased by 2% [107]. Tax and Interest - The effective tax rate for the thirteen weeks ended November 1, 2025, was 28.5%, compared to 28.8% for the same period in 2024 [123]. - Interest income, net for the thirteen weeks ended November 1, 2025, decreased by $2.8 million compared to the same period in 2024, primarily due to a reduction in interest income from time deposits and money market accounts [121]. Strategic Initiatives - The Company anticipates implementing new merchandising and human capital management systems in the first half of Fiscal 2026 as part of its multi-year ERP system transformation [88]. - The Company is implementing mitigation strategies to address the impact of tariffs, including evaluating supply chain changes and negotiating with vendors [91]. - The Company has a disciplined investment philosophy aimed at maintaining a durable balance sheet and consistent free cash flow [99]. - The Company continues to monitor global events and assess their potential impacts on business operations [94]. - The enactment of the One Big Beautiful Bill Act did not have a material impact on the Company's consolidated financial statements [98]. Foreign Currency and Risk Management - The company uses foreign currency exchange forward contracts to mitigate risks associated with foreign currency transactions and forecasted transactions [157]. - A hypothetical 10% devaluation of the U.S. dollar against foreign currencies could decrease the fair values of foreign currency exchange forward contracts by approximately $17.5 million [158]. - The company eliminated interest rate risk by redeeming all outstanding 8.75% Senior Secured Notes on July 15, 2024 [155]. - The impact of foreign currency exchange rates on net sales was neutral for the thirteen weeks ended November 1, 2025, with no significant changes reported [149]. Share Repurchase - The company repurchased approximately 4.5 million shares of its Common Stock for about $350 million during the year-to-date period ended November 1, 2025, with $950 million remaining under the $1.3 billion share repurchase program [133].

Company Segments - Cooper Companies operates through two segments: CooperVision, focusing on contact lenses, and CooperSurgical, specializing in fertility and women's health[21]. - CooperSurgical offers over 600 products and services, including medical devices for gynecology and obstetrics, and fertility products used in IVF processes[23][31]. Product Innovations - CooperVision's MiSight 1 day lens is the first FDA-approved product to slow myopia progression in children aged 8-12, with approvals in China and Japan expected in 2021 and 2025 respectively[22][30]. - CooperSurgical's Paragard IUD is a hormone-free contraceptive option available in the U.S., competing with hormonal IUDs and other birth control methods[36]. - CooperVision's Biofinity brand is its highest-grossing product, with a focus on silicone hydrogel lenses for various vision correction needs[26]. Research and Development - The company employs approximately 500 people in research and development, focusing on new contact lens designs and manufacturing technologies[44]. - CooperSurgical's research and development includes innovations in instruments, devices, and digital services to improve clinical outcomes[45]. - The company is committed to expanding its integrated solutions model in fertility and women's health through strategic transactions and product development[34]. Market Trends - The market for contact lenses is expanding, particularly in myopia management, with CooperVision investing in education to increase awareness among practitioners and families[29][30]. - CooperSurgical anticipates a shift towards group practices and corporate ownership in OB/GYN and fertility clinics, which may enhance supply chain control and vendor standardization[39]. - The contact lens industry is evolving with new distribution models and online services, which may conflict with CooperVision's strategy[145]. Regulatory Compliance - The majority of medical devices marketed by the company have received FDA clearance through the 510(k) process or approval through the PMA process[51]. - The company maintains ISO 13485 certification and CE marks for its products, which are necessary for marketing medical devices in the EU[61]. - Compliance with general safety and performance requirements is essential for obtaining CE marks, which are necessary for marketing in the EU[65]. - The company must undergo conformity assessments and audits by EU notified bodies to ensure compliance with the EU IVDR for current and future tests[69]. - The FDA's Cybersecurity requirements for medical devices include a comprehensive risk management plan and a Software Bill of Materials (SBOM) to support vulnerability tracking[58]. International Operations - The company derives approximately 50% of its net sales from international markets, indicating a strong reliance on foreign operations for growth[109]. - In Asia Pacific, regulatory approval processes for medical devices are complex and vary significantly by country, often requiring proof of home country approval prior to registration, which can delay product launches[73]. - The NMPA in China mandates physical testing and in-country clinical trials for medical device registrations, impacting the time to market[74]. Financial Risks - The company faces significant risks from current market conditions, including recessionary pressures that could adversely affect liquidity and financial condition[105]. - Inflationary pressures have led to increased costs, which may not be fully passed on to customers, impacting profitability[108]. - Pricing pressure from competitors and changes in third-party reimbursement could adversely affect demand for CooperSurgical products, impacting operating results[126]. Cybersecurity and IT Risks - Cybersecurity threats are increasing, with potential disruptions to information technology systems that could lead to significant financial and reputational harm[121]. - The company is in the process of implementing new ERP systems, which are costly and complex, potentially impacting financial reporting and commercial activities[123]. Employee and Workplace Culture - The company has implemented a Connection & Belonging strategy to foster an inclusive work environment, promoting diversity and innovation[98]. - The company emphasizes employee training and development, offering job-specific training and regular feedback to enhance workplace culture[100]. - The company is experiencing challenges in recruiting and retaining skilled personnel, which could disrupt operations[159]. Competition and Market Position - CooperVision operates in a highly competitive environment, facing significant competition from major players like Johnson & Johnson and Alcon, which may have greater resources[143]. - CooperSurgical competes in the family and women's health care market, focusing on technological and scientific advances, product quality, and customer service[146]. Regulatory Challenges - The evolving regulatory landscape in the EU and UK may significantly impact business operations and compliance costs[186]. - Changes in healthcare legislation, such as the ACA and recent EU regulations, could materially impact the company's revenue and operational costs[210][213]. - Compliance with evolving environmental, social, and governance (ESG) regulations may incur significant costs and affect the company's operations[156].

Financial Performance - ChargePoint had an accumulated deficit of $2,067.2 million as of October 31, 2025[163]. - The net loss for the nine months ended October 31, 2025, was $175.8 million, an improvement from a net loss of $218.3 million in the same period of 2024, indicating a 19.4% reduction in losses[235]. - For the nine months ended October 31, 2025, net cash used in operating activities was $(61.608) million, an improvement from $(144.265) million in 2024[233]. - For the nine months ended October 31, 2025, net cash used in operating activities was $61.6 million, compared to $144.3 million for the same period in 2024, representing a 57.3% decrease[234]. - Interest income decreased by 51.1% to $3.392 million for the nine months ended October 31, 2025, down from $6.930 million in 2024, primarily due to lower cash balances[209]. - Interest expense decreased by 5.1% to $21.346 million for the nine months ended October 31, 2025, compared to $22.486 million in 2024[211]. - Other income increased to $2.005 million for the nine months ended October 31, 2025, compared to a loss of $1.090 million in 2024, driven by favorable changes in foreign exchange rates[213]. - Non-cash charges for the nine months ended October 31, 2025, totaled $98.6 million, which included $51.5 million in stock-based compensation[234]. - Net cash used in investing activities was $3.4 million for the nine months ended October 31, 2025, down from $10.1 million in the same period of 2024, reflecting a 66.3% decrease[237]. - Net cash provided by financing activities increased to $18.1 million for the nine months ended October 31, 2025, compared to $16.4 million in the same period of 2024, marking a 10.4% increase[239]. Revenue Sources - ChargePoint's revenue is primarily generated from the sale of Networked Charging Systems, subscriptions to the ChargePoint Platform, and extended warranties, with revenue recognized ratably over the subscription period[161]. - ChargePoint's subscriptions revenue includes ChargePoint Platform software and CPaaS, recognized over time as services are delivered[179]. - ChargePoint's revenue from Networked Charging Systems includes AC and DC products, with revenue recognized upon shipment to customers[178]. - Networked Charging Systems revenue for the three months ended October 31, 2025, was $56,389,000, an increase of 7.1% compared to $52,662,000 for the same period in 2024[183]. - Subscriptions revenue for the three months ended October 31, 2025, was $42,004,000, reflecting a growth of 15.3% from $36,417,000 in the same period of 2024[184]. - Other revenue decreased by 30.9% to $7,281,000 for the three months ended October 31, 2025, down from $10,533,000 in the same period of 2024[185]. Expenses and Profitability - Gross profit for the three months ended October 31, 2025, was $32,486,000, representing a 42.6% increase from $22,786,000 in the same period of 2024[196]. - The gross margin for the three months ended October 31, 2025, improved to 30.7%, up from 22.9% in the same period of 2024[196]. - Research and development expenses decreased to $34,675,000 for the three months ended October 31, 2025, down 9.5% from $38,299,000 in the same period of 2024[199]. - Sales and marketing expenses for the three months ended October 31, 2025, were $24,500,000, a decrease of 29.4% compared to $34,678,000 in the same period of 2024[202]. - General and administrative expenses for the three months ended October 31, 2025, were $17,646,000, a slight decrease of 1.8% from $17,975,000 in the same period of 2024[206]. - General and administrative expenses increased by $15.0 million in non-recurring operating expenses and $3.9 million in other operating expenses for the nine months ended October 31, 2025, compared to the same period in 2024[207]. Market Position and Strategy - ChargePoint is a market leader in North America for commercial Level 2 AC charging and aims to expand its market share in EV charging solutions[172]. - The company targets three key verticals: commercial, fleet, and residential, focusing on various customer segments including retail, healthcare, and municipal fleets[162]. - ChargePoint expects long-term revenue growth in both Networked Charging Systems and subscriptions due to increased demand in the EV and charging infrastructure market[182]. - The company anticipates a decrease in research and development expenses as a percentage of revenue as it optimizes its activities[198]. Cash and Financing - As of October 31, 2025, ChargePoint had cash and cash equivalents of $180.9 million, down from $225.0 million as of January 31, 2025[219]. - ChargePoint expects to continue funding its operations primarily through equity and debt financing due to ongoing net losses and negative cash flows[228]. - The company anticipates that its cash on hand will satisfy its working capital and capital requirements for at least the next twelve months[219]. - ChargePoint entered into a new "at-the-market" sales agreement on September 8, 2025, allowing for the sale of up to $150 million in common stock[227]. - ChargePoint's 2028 Convertible Notes were amended in October 2023, increasing cash interest to 7.0% per annum and extending the maturity date to April 1, 2028[220]. Risks and Challenges - The company is subject to macroeconomic risks, including geopolitical events and inflation, which could impact customer behavior and demand for EV infrastructure[170]. - ChargePoint is exposed to foreign currency risks, particularly with revenue and operating expenses in euros, which may impact financial results as international operations expand[245]. - A hypothetical 10% decrease in foreign currencies against the U.S. dollar would not result in a material foreign currency loss on foreign-denominated balances as of October 31, 2025[246]. - ChargePoint does not currently hedge its foreign currency exchange risk but may consider doing so as international operations grow[247]. - The company has not entered into any off-balance sheet arrangements[240].

Financial Performance - For the three months ended November 1, 2025, the company reported revenue of $342.1 million, a year-over-year increase of 7.3%[79] - The net loss from continuing operations for the three months ended November 1, 2025, was $6.4 million, compared to a net loss of $6.3 million for the same period in the prior year[81] - Adjusted EBITDA for the three months ended November 1, 2025, was $13.4 million, slightly down from $13.5 million for the same period in the prior year[85] - Free Cash Flow for the three months ended November 1, 2025, was $5.6 million, down from $9.9 million for the same period in the prior year[86] - Revenue for the three months ended November 1, 2025, increased by $23.3 million, or 7.3%, compared to the same period in the prior year, primarily due to a 5.3% improvement in net revenue per active client[106] Client Metrics - The number of active clients decreased to approximately 2,307,000 as of November 1, 2025, representing a year-over-year decline of 5.2%[79] - Net revenue per active client increased to $559, reflecting a year-over-year increase of 5.3%[90] Expenses - Marketing expenses for the three months ended November 1, 2025, were $33.9 million, compared to $30.0 million for the same period in the prior year[94] - Cost of goods sold for the same period increased by 10.8% to $192.8 million, resulting in a gross margin decrease of 180 basis points to 43.6%[105][107] - Selling, general, and administrative expenses (SG&A) rose by $4.1 million to $157.9 million, with SG&A as a percentage of revenue decreasing to 46.2% from 48.2% year-over-year[108][109] Cash Flow and Liquidity - Cash provided by operating activities from continuing operations was $10.9 million, down from $14.3 million in the same period last year[118][120] - As of November 1, 2025, the company had $114.5 million in cash and cash equivalents and $129.7 million in investments[112] - The company entered into a $50.0 million revolving credit facility on December 4, 2023, with $31.3 million in excess availability as of November 1, 2025[113] - Cash used in investing activities was $5.7 million for the three months ended November 1, 2025, compared to $35.7 million in the prior year[121][122] Tax and Market Risk - The effective tax rate for the three months ended November 1, 2025, was (0.9)%, compared to (2.6)% for the same period in the prior year[110][111] - There were no material changes in market risk compared to the previous fiscal year[128] Strategic Focus - The company anticipates that macroeconomic uncertainty may negatively impact consumer discretionary spending in the remainder of fiscal 2026[91] - The company continues to focus on improving client retention and acquisition strategies to enhance overall client experience[80] - The company leverages AI and data science to optimize inventory management and enhance client engagement[92] Share Repurchase - The company repurchased 2,302,141 shares of Class A common stock for $30.0 million, with $120.0 million remaining under the share repurchase program[117]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Table of Contents For the quarterly period ended October 31, 2025 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-39504 SNOWFLAKE INC. (Exact name of registrant as specified in its charter) (State or other jurisdiction of ...

Sales Performance - Signet's total sales increased by 3.1% in Q3 Fiscal 2026 compared to the same period in Fiscal 2025, with same-store sales growth of 3.0%[123] - Total sales for the third quarter of Fiscal 2026 increased by 3.1% year over year to $1.39 billion, with same store sales rising by 3.0%[131] - Year-to-date sales increased by 2.7% to $4.47 billion, with same store sales up by 2.5%[137] - North America sales for the year-to-date were $4.18 billion, an increase of 2.4%, with same store sales also up by 2.4%[140] - International sales for the year-to-date increased by 4.8% to $258.9 million, with a 1.2% increase at constant exchange rates[141] Average Unit Retail (AUR) - Average unit retail (AUR) increased by 7.7% in North America and 3.0% in the International segment compared to Q3 Fiscal 2025, driven by a focus on lab-grown diamond fashion and higher gold prices[123] - The average unit retail (AUR) increased by approximately 7% in the third quarter compared to the prior year, driven by improved assortments in bridal and fashion categories[131] Strategic Initiatives - The Grow Brand Love strategy launched in Fiscal 2026 focuses on sustainable growth, product innovation, and brand loyalty, with three strategic imperatives identified[122] - The Company is strategically managing marketing spend to increase efficiency and capitalize on consumer demand during the holiday season[126] - The Company plans to continue focusing on organic growth and market share expansion in core areas such as Bridal, while optimizing its real estate footprint[176] Financial Performance - Gross margin for the third quarter was $518.8 million, representing 37.3% of sales, up from 36.0% in the prior year quarter[142] - Selling, general and administrative expenses (SG&A) were $485.3 million, or 34.9% of sales, nearly flat compared to 34.8% in the prior year[144] - Operating income for the third quarter was $23.9 million, or 1.7% of sales, compared to $9.2 million, or 0.7% of sales, in the prior year[147] - Adjusted operating income for Q3 was $32.0 million with an adjusted operating margin of 2.3%, compared to $16.2 million (1.2% margin) in the prior year[169] - Fiscal 2026 adjusted diluted EPS was $0.63, compared to $0.24 in Fiscal 2025, reflecting a significant increase of 162.5%[172] - Net income for the 39 weeks ended November 1, 2025, was $44.4 million, a turnaround from a net loss of $39.4 million in the prior year, representing an increase of $83.8 million[186] Cash Flow and Debt Management - The Company had $234.7 million in cash and cash equivalents as of November 1, 2025, with no outstanding borrowings on its asset-based revolving credit facility (ABL) which has a borrowing capacity of $1.2 billion[174] - Free cash flow for the 39 weeks ended November 1, 2025, was $(151.1) million, an improvement from $(304.2) million in the prior year[163] - The net cash used in operating activities was $58.0 million for the 39 weeks ended November 1, 2025, an improvement from $189.8 million in the prior year[185] - The adjusted leverage ratio was maintained at 1.1x through the end of Fiscal 2025, reflecting the retirement of all funded debt[179] - As of November 1, 2025, the Company had no outstanding debt and an available borrowing capacity of $1.2 billion under the ABL, compared to $253.0 million of debt outstanding in the prior year[193] - Net cash was $234.7 million as of November 1, 2025, a significant improvement from net debt of $95.3 million as of November 2, 2024[194] Store Operations - As of November 1, 2025, Signet operated 2,607 retail locations, including 2,262 in the US and 91 in Canada, alongside a digital presence[120] - The Company closed 46 stores and opened 11 stores during the 39 weeks ended November 1, 2025, resulting in a net decrease in selling square footage of 0.6% in North America and 2.7% internationally[188] Market Risks and Economic Factors - The Company continues to monitor macroeconomic factors, including inflation and geopolitical conflicts, which may affect operations and cash flows[128] - The Company is monitoring macroeconomic uncertainties, including tariffs and inflation, which could negatively impact merchandise costs and consumer spending, potentially affecting fair value estimates[200] - The Company uses derivative financial instruments to manage market risks related to foreign currency exchange rates, interest rates, and precious metal prices[202] - As of November 1, 2025, the Company's market risk profile has not materially changed since February 1, 2025, as disclosed in its Annual Report[205] Impairments and Restructuring - Asset impairments for the 39 weeks ended November 1, 2025, totaled $84.9 million, down from $169.3 million in the prior year[145] - The Company recorded restructuring and related charges of $26.1 million in Fiscal 2026, primarily due to its Grow Brand Love strategy initiatives[173] - Impairment charges of approximately $54 million, $13 million, and $3 million were recognized for Digital brands, James Allen, and Diamonds Direct trade names, respectively, due to declining cash flow projections[199]

Financial Performance - Net sales decreased from $1.51 billion to $1.46 billion, representing a period-over-period decrease of 3.1% and a comparable sales decrease of 2.2%[81] - Operating income increased to $29.2 million, compared to $4.0 million in the prior year period[81] - Net income attributable to Class A and B-1 common stockholders was $9.3 million, compared to a net loss of $16.7 million in the prior year period[81] - Adjusted EBITDA increased from $81.2 million to $98.6 million[81] - Gross profit margin improved to 38.9% for the thirteen weeks ended November 1, 2025, compared to 38.1% for the same period in 2024[85] - Selling, General and Administrative (SG&A) expenses as a percentage of net sales decreased to 36.9% for the thirteen weeks ended November 1, 2025, compared to 37.8% for the same period in 2024[86] - Comparable sales change was a decrease of 2.2% for the thirteen weeks ended November 1, 2025[82] - Services and other sales increased by 2.6% to $254.8 million for the thirteen weeks ended November 1, 2025[83] Cash Flow and Liquidity - Free Cash Flow improved to $70.6 million for the thirty-nine weeks ended November 1, 2025, compared to a negative $9.4 million for the same period in 2024[98] - Net cash provided by operating activities was $160.5 million for the thirty-nine weeks ended November 1, 2025, up from $81.7 million for the same period in 2024[104] - Liquidity as of November 1, 2025, was $732.9 million, including cash and cash equivalents of $237.4 million and $495.5 million available on the ABL Revolving Credit Facility[100] Debt and Interest - Interest expense decreased by $3.0 million, or 8.3%, to $32.8 million for the thirteen weeks ended November 1, 2025, compared to $35.8 million for the same period in 2024[87] - The company has a secured term loan facility maturing on March 4, 2028, and an ABL Revolving Credit Facility with availability of up to $581.0 million[108] - As of November 1, 2025, the company had $1,595.3 million outstanding under the First Lien Term Loan with no amounts outstanding under the ABL Revolving Credit Facility[117] - A 100 basis points increase in variable rates on the First Lien Term Loan and ABL Revolving Credit Facility would increase annual cash interest by approximately $16.2 million[117] Tax and Accounting - The effective tax rate for the thirteen weeks ended November 1, 2025, was (205.4)%, resulting in an income tax benefit of $6.3 million, compared to an effective tax rate of 4.9% and a benefit of $0.9 million for the same period in 2024[89] - There have been no material changes to critical accounting policies and estimates compared to the 2024 Form 10-K[113] - The company reviews accounting policies, assumptions, estimates, and judgments to ensure financial statements are presented fairly in accordance with GAAP[112] Market Risks - The company is subject to market risks primarily associated with interest rate fluctuations and changes in credit standing[116] - The company has entered into cash flow hedges to limit maximum interest rates on a portion of its variable-rate debt[117] - The company does not enter into forward currency contracts to hedge foreign currency exposure, and a hypothetical 10% change in foreign currency exchange rates would not materially affect operating results[120] - Future results may differ materially from estimated results due to adverse changes in interest rates or debt availability[118] - The company’s expenses are generally denominated in the currencies of the jurisdictions where it operates[120] - Substantially all cash and cash equivalents were maintained at major financial institutions in the U.S., with current deposits likely exceeding insured limits[119] Operational Changes - The sales decrease was primarily due to lower transaction volume and a lower pet care center count, alongside a focus on profitability and margin management[83] - Total pet care centers in the U.S. and Puerto Rico decreased to 1,389 at the end of the period, down from 1,413[82] - Other non-operating income was $0 for the thirteen and thirty-nine weeks ended November 1, 2025, compared to $8.5 million and $5.8 million for the same periods in 2024[88] - The company anticipates that current resources and cash flows will be sufficient to finance operations and capital investments for at least the next 12 months[101]

Financial Performance - Walmart accounted for 15.6% of consolidated gross sales less returns and allowances during fiscal 2025, with the top five customers representing approximately 38%[29] - The company reported a revenue of $1.5 billion for Q3 2023, representing a 15% year-over-year increase[217] - The company provided guidance for Q4 2023, expecting revenue to be between $1.6 billion and $1.8 billion, indicating a potential growth of 7% to 20%[217] - The gross margin for Q3 2023 was reported at 45%, a slight increase from 43% in Q2 2023[217] Debt and Assets - The Company's long-term debt had a fair value of $2.6 billion as of October 26, 2025, compared to $2.5 billion as of October 27, 2024[213] - The Company's net asset position in foreign currencies was $0.8 billion as of October 26, 2025, down from $1.2 billion as of October 27, 2024[214] - The balance of corporate-owned life insurance policies classified as trading securities totaled $219.2 million as of October 26, 2025, compared to $209.7 million as of October 27, 2024[215] Employee and Safety Metrics - Approximately 20% of the Company's employees were covered by collective bargaining agreements as of October 26, 2025[20] - The Company completed approximately 1,200 safety assessments each month during fiscal 2025[26] - As of October 26, 2025, approximately 50% of the Company's team members had five or more years of service[23] Innovation and R&D - The Company has thirteen U.S.-granted and six foreign-granted patents as of October 26, 2025[32] - Investment in R&D increased by 25% year-over-year, totaling $300 million, focusing on innovative technologies[217] - New product launch scheduled for Q1 2024, anticipated to contribute an additional $200 million in revenue[217] Market and Customer Metrics - User base grew to 10 million active users, a 20% increase compared to the previous quarter[217] - Customer retention rate improved to 85%, up from 80% in the previous quarter[217] - Market expansion efforts led to a 30% increase in sales in the Asia-Pacific region[217] - The company plans to enter the European market by mid-2024, targeting a revenue contribution of $100 million in the first year[217] Acquisitions and Investments - The company completed an acquisition of a tech startup for $500 million, expected to enhance product offerings[217] Commodity and Risk Management - The fair value of the Company's cash flow commodity contracts was $5.5 million as of October 26, 2025, compared to $(5.9) million as of October 27, 2024[212] - The Company employs hedging programs to manage commodity price risk, utilizing futures, swaps, and options contracts[212]

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period Ended November 1, 2025 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to . Commission File No. 001-31463 | Title of each class | Trading Symbol(s) | Name of Each Exchange on which Registered | | --- | --- | --- | | Comm ...