Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended June 30, 2025 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number: 0-23406 SOUTHERN MISSOURI BANCORP, INC. (Exact name of registrant as specified in its charter) | Missouri | 43-1665523 | | --- | --- | | (State or other jurisdiction o ...

Part I. Financial Information (unaudited) This section presents the unaudited condensed consolidated financial statements and management's analysis of financial condition and results [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements and notes, highlighting growth in key financial metrics [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Condensed Consolidated Balance Sheet Highlights (Amounts in Thousands) | Metric | August 2, 2025 | February 1, 2025 | | :-------------------------------- | :------------- | :--------------- | | **ASSETS** | | | | Cash and cash equivalents | $297,811 | $266,929 | | Inventory | $142,486 | $120,789 | | Total current assets | $493,302 | $439,209 | | Total assets | $1,028,632 | $913,173 | | **LIABILITIES AND STOCKHOLDERS' EQUITY** | | | | Accounts payable | $72,630 | $45,982 | | Total current liabilities | $229,554 | $213,932 | | Total liabilities | $552,477 | $489,369 | | Total stockholders' equity | $476,155 | $423,804 | [Condensed Consolidated Statements of Income](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income) Condensed Consolidated Statements of Income Highlights (Amounts in Thousands, Except Per Share) | Metric | Thirteen Weeks Ended Aug 2, 2025 | Thirteen Weeks Ended Aug 3, 2024 | Twenty-Six Weeks Ended Aug 2, 2025 | Twenty-Six Weeks Ended Aug 3, 2024 | | :-------------------------------- | :------------------------------- | :------------------------------- | :--------------------------------- | :------------------------------- | | SALES, Net | $305,737 | $282,392 | $577,858 | $544,872 | | Gross profit | $145,009 | $132,534 | $271,985 | $253,231 | | INCOME FROM OPERATIONS | $56,341 | $48,260 | $99,887 | $90,656 | | NET INCOME | $45,006 | $39,255 | $80,199 | $74,098 | | EARNINGS PER SHARE: Basic | $0.90 | $0.79 | $1.60 | $1.49 | | EARNINGS PER SHARE: Diluted | $0.89 | $0.78 | $1.59 | $1.48 | [Condensed Consolidated Statements of Stockholders' Equity](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity) Stockholders' Equity Changes (Amounts in Thousands) | Metric | Fiscal 2025 (26 Weeks Ended Aug 2, 2025) | Fiscal 2024 (26 Weeks Ended Aug 3, 2024) | | :--------------------------------------- | :--------------------------------------- | :--------------------------------------- | | Balance, Beginning of Period | $423,804 | $413,220 | | Net income | $80,199 | $74,098 | | Dividends paid on common stock | ($35,810) | ($35,543) | | Amortization of non-vested stock grants | $7,962 | $6,869 | | Balance, End of Period | $476,155 | $458,644 | [Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Condensed Consolidated Statements of Cash Flows Highlights (Amounts in Thousands) | Metric | Twenty-Six Weeks Ended Aug 2, 2025 | Twenty-Six Weeks Ended Aug 3, 2024 | | :----------------------------------- | :------------------------------- | :------------------------------- | | Net cash flows from operating activities | $89,412 | $77,488 | | Net cash flows from investing activities | ($22,720) | ($22,892) | | Net cash flows from financing activities | ($35,810) | ($35,543) | | NET INCREASE IN CASH AND CASH EQUIVALENTS | $30,882 | $19,053 | | CASH AND CASH EQUIVALENTS, End of period | $297,811 | $287,266 | [Notes to Condensed Consolidated Financial Statements](index=7&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanations and disclosures supporting the condensed consolidated financial statements [1. Basis of Presentation](index=7&type=section&id=1.%20Basis%20of%20Presentation) - The unaudited condensed consolidated financial statements are prepared in accordance with GAAP for interim financial information and do not include all footnotes required for complete financial statements. Due to the seasonal nature of the business, interim results are not necessarily indicative of a full year's operations[13](index=13&type=chunk) [2. Revenues](index=7&type=section&id=2.%20Revenues) - The Company operates as a single reportable segment, retailing casual apparel, footwear, and accessories through 440 stores in 42 states and an e-Commerce platform[15](index=15&type=chunk) Online Revenues as Percentage of Net Sales | Period | August 2, 2025 | August 3, 2024 | | :----------------------- | :------------- | :------------- | | Thirteen Weeks Ended | 14.3% | 13.1% | | Twenty-Six Weeks Ended | 15.6% | 14.9% | Major Product Lines as Percentage of Net Sales | Merchandise Group | Thirteen Weeks Ended Aug 2, 2025 | Thirteen Weeks Ended Aug 3, 2024 | Twenty-Six Weeks Ended Aug 2, 2025 | Twenty-Six Weeks Ended Aug 3, 2024 | | :------------------ | :------------------------------- | :------------------------------- | :--------------------------------- | :------------------------------- | | Denims | 36.1% | 35.3% | 39.7% | 39.1% | | Tops (including sweaters) | 29.5% | 29.9% | 28.4% | 28.6% | | Accessories | 11.8% | 11.7% | 11.3% | 11.3% | | Sportswear/Fashions | 11.0% | 12.2% | 9.6% | 10.2% | | Footwear | 5.0% | 5.5% | 5.1% | 5.7% | | Casual bottoms | 1.7% | 1.1% | 1.6% | 1.3% | | Outerwear | 0.4% | 0.3% | 0.6% | 0.5% | | Kids | 4.5% | 4.0% | 3.7% | 3.3% | | Total | 100.0% | 100.0% | 100.0% | 100.0% | [3. Earnings Per Share](index=8&type=section&id=3.%20Earnings%20Per%20Share) Earnings Per Share (EPS) (Amounts in Thousands, Except Per Share) | Metric | Thirteen Weeks Ended Aug 2, 2025 | Thirteen Weeks Ended Aug 3, 2024 | Twenty-Six Weeks Ended Aug 2, 2025 | Twenty-Six Weeks Ended Aug 3, 2024 | | :---------------- | :------------------------------- | :------------------------------- | :--------------------------------- | :------------------------------- | | Basic EPS | $0.90 | $0.79 | $1.60 | $1.49 | | Diluted EPS | $0.89 | $0.78 | $1.59 | $1.48 | [4. Investments](index=9&type=section&id=4.%20Investments) Summary of Investments as of August 2, 2025 (Amounts in Thousands) | Investment Type | Amortized Cost or Par Value | Estimated Fair Value | | :------------------------ | :-------------------------- | :------------------- | | Held-to-Maturity Securities (State and municipal bonds) | $22,118 | $22,151 | | Trading Securities (Mutual funds) | $26,480 | $29,630 | - All held-to-maturity securities are classified as short-term investments, while trading securities, held in a Rabbi Trust for the deferred compensation plan, are classified as long-term investments[21](index=21&type=chunk) [5. Fair Value Measurements](index=10&type=section&id=5.%20Fair%20Value%20Measurements) - The Company's trading securities (mutual funds) are measured at fair value on a recurring basis and are classified as **Level 1**, indicating publicly traded quoted prices in active markets[23](index=23&type=chunk)[25](index=25&type=chunk) - Held-to-maturity securities, primarily state and municipal bonds, are not carried at fair value on the balance sheet but have fair values based on **Level 2** inputs (quoted market prices and yields for similar securities)[24](index=24&type=chunk)[25](index=25&type=chunk) [6. Leases](index=11&type=section&id=6.%20Leases) - The Company's lease portfolio primarily consists of retail store locations, with new store leases typically having a 10-year initial term and renewal options[27](index=27&type=chunk) Total Lease Cost (Amounts in Thousands) | Period | August 2, 2025 | August 3, 2024 | | :----------------------- | :------------- | :------------- | | Thirteen Weeks Ended | $30,702 | $29,721 | | Twenty-Six Weeks Ended | $62,561 | $60,944 | - As of August 2, 2025, the weighted-average remaining lease term was **6.2 years**, and the weighted-average discount rate was **6.4%**. The total operating lease liability was **$375.8 million**[31](index=31&type=chunk)[32](index=32&type=chunk) [7. Supplemental Cash Flow Information](index=12&type=section&id=7.%20Supplemental%20Cash%20Flow%20Information) - Cash paid for income taxes during the twenty-six week period ended August 2, 2025, was **$31.1 million**, compared to **$30.5 million** in the prior year[34](index=34&type=chunk) [8. Stock-Based Compensation](index=13&type=section&id=8.%20Stock-Based%20Compensation) - The Company has restricted stock plans for employees, executives, and non-employee directors, with **2,574,780 shares** available for grant as of August 2, 2025[35](index=35&type=chunk) Stock-Based Compensation Expense (Amounts in Thousands) | Period | August 2, 2025 | August 3, 2024 | | :------------------------------------ | :------------- | :------------- | | Stock-based compensation expense, before tax (13 weeks) | $3,780 | $3,343 | | Stock-based compensation expense, before tax (26 weeks) | $7,962 | $6,869 | - As of August 2, 2025, there was **$20.3 million** of unrecognized compensation expense related to non-vested shares, expected to be recognized over approximately **2.0 years**[41](index=41&type=chunk) [9. Recently Issued Accounting Pronouncements](index=14&type=section&id=9.%20Recently%20Issued%20Accounting%20Pronouncements) - The Company plans to adopt ASU 2023-09 (Income Taxes) effective for fiscal 2025, with no material impact anticipated on its consolidated financial statements[42](index=42&type=chunk) - The Company is evaluating ASU 2024-03/2025-01 (Expense Disaggregation Disclosures), effective for annual periods beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027[43](index=43&type=chunk) [10. Segment Reporting](index=14&type=section&id=10.%20Segment%20Reporting) - The Company operates as a single operating and reporting segment, with its President and CEO serving as the Chief Operating Decision Maker (CODM)[44](index=44&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=15&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the Company's financial condition, operational results, liquidity, and critical accounting policies [Executive Overview](index=15&type=section&id=EXECUTIVE%20OVERVIEW) - Management considers comparable store sales, merchandise margin, operating margin, and cash flow and liquidity as key performance indicators[48](index=48&type=chunk) - The Company believes existing cash, short-term investments, and cash flow from operations will be sufficient to fund current and long-term anticipated capital expenditures and working capital requirements for the next several years[52](index=52&type=chunk) [Results of Operations](index=16&type=section&id=RESULTS%20OF%20OPERATIONS) Key Financial Performance Metrics (Percentage of Net Sales and YoY Change) | Metric | 13 Weeks Ended Aug 2, 2025 (% of Net Sales) | 13 Weeks Ended Aug 3, 2024 (% of Net Sales) | 13 Weeks YoY Change | 26 Weeks Ended Aug 2, 2025 (% of Net Sales) | 26 Weeks Ended Aug 3, 2024 (% of Net Sales) | 26 Weeks YoY Change | | :-------------------------------------------------- | :----------------------------------------- | :----------------------------------------- | :------------------ | :----------------------------------------- | :----------------------------------------- | :------------------ | | Net sales | 100.0% | 100.0% | 8.3% | 100.0% | 100.0% | 6.1% | | Cost of sales | 52.6% | 53.1% | 7.3% | 52.9% | 53.5% | 4.9% | | Gross profit | 47.4% | 46.9% | 9.4% | 47.1% | 46.5% | 7.4% | | Selling expenses | 24.2% | 25.0% | 4.5% | 24.4% | 24.7% | 4.9% | | General and administrative expenses | 4.8% | 4.8% | 9.1% | 5.4% | 5.2% | 10.3% | | Income from operations | 18.4% | 17.1% | 16.7% | 17.3% | 16.6% | 10.2% | | Net income | 14.7% | 13.9% | 14.6% | 13.9% | 13.6% | 8.2% | - Net sales for the second quarter of fiscal 2025 increased by **8.3%** to **$305.7 million**, with comparable store net sales up **7.3%** and online sales up **17.7%**[53](index=53&type=chunk) - Year-to-date net sales increased by **6.1%** to **$577.9 million**, with comparable store net sales up **5.2%** and online sales up **10.5%**[54](index=54&type=chunk) - Gross profit as a percentage of net sales increased to **47.4%** for the second quarter and **47.1%** year-to-date, driven by higher merchandise margins and leveraged buying, distribution, and occupancy expenses[58](index=58&type=chunk)[59](index=59&type=chunk) - Selling, general, and administrative expenses decreased as a percentage of net sales due to reductions in non-recurring digital commerce investments and store labor expenses, partially offset by increased incentive compensation accruals[60](index=60&type=chunk)[61](index=61&type=chunk) [Liquidity and Capital Resources](index=18&type=section&id=LIQUIDITY%20AND%20CAPITAL%20RESOURCES) - As of August 2, 2025, the Company had working capital of **$263.7 million**, including **$297.8 million** in cash and cash equivalents and **$22.1 million** in short-term investments[64](index=64&type=chunk) - Cash flow from operations for the first two quarters of fiscal 2025 was **$89.4 million**, an increase from **$77.5 million** in the prior year[64](index=64&type=chunk) - Total capital expenditures for fiscal 2025 are estimated to be **$50.0 million to $55.0 million**, primarily for planned store projects and technology investments[67](index=67&type=chunk) - The Company has an available unsecured line of credit of **$25.0 million** with Wells Fargo Bank, N.A., which was not utilized during the first two quarters of fiscal 2025 or 2024[69](index=69&type=chunk) [Critical Accounting Policies and Estimates](index=19&type=section&id=CRITICAL%20ACCOUNTING%20POLICIES%20AND%20ESTIMATES) - Key accounting policies and estimates include revenue recognition (net of returns, gift cards, and rewards), inventory valuation (lower of cost or net realizable value), income taxes (deferred tax assets/liabilities), leases (right-of-use assets and liabilities), and investments (held-to-maturity and trading securities)[70](index=70&type=chunk)[74](index=74&type=chunk)[75](index=75&type=chunk) - The adjustment to inventory for markdowns and/or obsolescence was **$9.4 million** as of August 2, 2025[74](index=74&type=chunk) - The Company is currently evaluating the impact of the One Big Beautiful Bill Act (OBBBA) on its consolidated financial statements[73](index=73&type=chunk) [Off-Balance Sheet Arrangements, Contractual Obligations, and Commercial Commitments](index=21&type=section&id=OFF-BALANCE%20SHEET%20ARRANGEMENTS,%20CONTRACTUAL%20OBLIGATIONS,%20AND%20COMMERCIAL%20COMMITMENTS) Material Contractual Obligations as of August 2, 2025 (Amounts in Thousands) | Contractual Obligations | Total | 2025 (remaining) | 2026-2027 | 2028-2029 | Thereafter | | :------------------------ | :---- | :--------------- | :-------- | :-------- | :--------- | | Purchase obligations | $20,588 | $9,615 | $9,652 | $1,321 | $— | | Deferred compensation | $29,630 | $— | $— | $— | $29,630 | | Operating lease payments | $461,146 | $54,920 | $168,308 | $97,831 | $140,087 | | Total contractual obligations | $511,364 | $64,535 | $177,960 | $99,152 | $169,717 | - The Company had outstanding letters of credit totaling **$3.8 million** as of August 2, 2025, and has no other off-balance sheet arrangements[77](index=77&type=chunk) [Seasonality](index=21&type=section&id=SEASONALITY) - The Company's business is seasonal, with the holiday season (November 15 to December 30) and back-to-school season (July 15 to September 1) historically contributing approximately **35%** of the Company's fiscal year net sales[78](index=78&type=chunk) [Forward Looking Statements](index=22&type=section&id=FORWARD%20LOOKING%20STATEMENTS) - This section contains forward-looking statements subject to various risks and uncertainties, including changes in product mix, fashion trends, competitive factors, and general economic conditions. The Company does not undertake to update these statements[79](index=79&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=22&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Market risk primarily relates to interest rate fluctuations on cash and investments, with declines negatively impacting income - For each **one-quarter percent decline** in the interest/dividend rate earned on cash and investments, the Company's net income would decrease approximately **$0.5 million**, or less than **$0.01 per share**[80](index=80&type=chunk) [Item 4. Controls and Procedures](index=22&type=section&id=Item%204.%20Controls%20and%20Procedures) Disclosure controls were effective as of August 2, 2025, with no material changes to internal control over financial reporting - The Company's disclosure controls and procedures were effective as of August 2, 2025, providing reasonable assurance that material information is accumulated and communicated to management in a timely manner[81](index=81&type=chunk)[82](index=82&type=chunk) - There were no changes in the Company's internal control over financial reporting that materially affected, or are reasonably likely to materially affect, internal control over financial reporting during the last fiscal quarter[83](index=83&type=chunk) Part II. Other Information This section covers legal proceedings, risk factors, equity security sales, defaults, mine safety, and other disclosures [Item 1. Legal Proceedings](index=23&type=section&id=Item%201.%20Legal%20Proceedings) The Company reported no legal proceedings - No legal proceedings were reported[85](index=85&type=chunk) [Item 1A. Risk Factors](index=23&type=section&id=Item%201A.%20Risk%20Factors) No material changes to risk factors previously disclosed in the Company's Annual Report on Form 10-K were reported - No material changes from the risk factors disclosed in the Company's Annual Report on Form 10-K for the fiscal year ended February 1, 2025[85](index=85&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=23&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No common stock repurchases occurred, 410,655 shares remain under the plan, and no Rule 10b5-1 arrangements were modified - The Company did not purchase any shares of its common stock during the fiscal quarter ended August 2, 2025[86](index=86&type=chunk) - There are **410,655 shares** remaining to complete the **1,000,000 share** repurchase plan authorized on November 20, 2008[86](index=86&type=chunk) - No Rule 10b5-1 trading arrangements or non-Rule 10b5-1 trading arrangements were adopted, modified, or terminated by directors or officers during the quarter[87](index=87&type=chunk) [Item 3. Defaults Upon Senior Securities](index=23&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The Company reported no defaults upon senior securities - No defaults upon senior securities were reported[88](index=88&type=chunk) [Item 4. Mine Safety Disclosures](index=23&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) The Company reported no mine safety disclosures - No mine safety disclosures were reported[88](index=88&type=chunk) [Item 5. Other Information](index=23&type=section&id=Item%205.%20Other%20Information) No other information was reported under this item - No other information was reported under this item[88](index=88&type=chunk) [Item 6. Exhibits](index=24&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including the Revolving Line of Credit Note, CEO/CFO certifications, and XBRL financials - Key exhibits include the Amended and Restated Revolving Line of Credit Note (Exhibit 10.1), CEO and CFO certifications (Exhibits 31.1, 31.2, 32.1, 32.2), and XBRL formatted financial statements (Exhibit 101)[89](index=89&type=chunk)[95](index=95&type=chunk) [Signatures](index=25&type=section&id=SIGNATURES) This section provides the official signatures for the report, confirming its submission - The report was signed on September 11, 2025, by Dennis H. Nelson, President and CEO, and Thomas B. Heacock, Senior Vice President of Finance, Treasurer, and CFO[93](index=93&type=chunk)

[Forward-Looking Statements](index=4&type=section&id=FORWARD-LOOKING%20STATEMENTS) This section outlines forward-looking statements concerning the Company's financial condition and future performance, subject to various risks - This report contains forward-looking statements regarding the Company's financial condition, results of operations, plans, objectives, strategies, future performance, and business, which are subject to risks and uncertainties that may cause actual results to differ materially from expectations[10](index=10&type=chunk)[11](index=11&type=chunk)[13](index=13&type=chunk) - Key risks include the inability to successfully implement strategic plans, declines in comparable sales, inability to maintain brands, failure of the multi-channel distribution model, adverse economic conditions, and supply chain disruptions[14](index=14&type=chunk) Part I. Financial Information This part presents the Company's unaudited condensed consolidated financial statements and management's analysis of operations [Item 1. Financial Statements (Unaudited)](index=5&type=section&id=Item%201.%20Financial%20Statements%20(unaudited)) This section presents the unaudited condensed consolidated financial statements, including balance sheets, income statements, cash flows, and detailed notes [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Key Balance Sheet Data (in thousands) | Metric | August 2, 2025 | February 1, 2025 | | :-------------------------- | :------------- | :--------------- | | Cash and cash equivalents | $15,184 | $28,628 | | Accounts receivable, net | $16,983 | $13,797 | | Inventories | $96,685 | $91,430 | | Total current assets | $140,453 | $164,872 | | Total assets | $266,176 | $306,690 | | Accounts payable | $21,127 | $17,198 | | Total current liabilities | $57,724 | $57,993 | | Long-term debt | $10,000 | — | | Total liabilities | $125,690 | $127,735 | | Total shareholders' equity | $140,486 | $178,955 | - Total assets decreased by **$40.5 million** from February 1, 2025, to August 2, 2025, primarily due to a decrease in cash and cash equivalents and the reclassification of discontinued operations assets. Total shareholders' equity also decreased significantly by **$38.5 million**[16](index=16&type=chunk) [Condensed Consolidated Statements of Operations](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Key Income Statement Data (in thousands, except per share data) | Metric | Thirteen Weeks Ended Aug 2, 2025 | Thirteen Weeks Ended Aug 3, 2024 | Twenty-Six Weeks Ended Aug 2, 2025 | Twenty-Six Weeks Ended Aug 3, 2024 | | :-------------------------------------- | :------------------------------- | :------------------------------- | :--------------------------------- | :------------------------------- | | Net revenues | $70,858 | $94,003 | $122,510 | $161,951 | | Gross profit | $35,497 | $46,709 | $58,264 | $80,749 | | Operating (loss) income from continuing operations | $(4,592) | $2,393 | $(22,449) | $(8,224) | | Net (loss) income | $(4,672) | $5,706 | $(38,132) | $(2,415) | | Diluted net (loss) income per share | $(0.17) | $0.19 | $(1.37) | $(0.08) | - Net revenues decreased by **24.6%** for the thirteen weeks and **24.4%** for the twenty-six weeks ended August 2, 2025, compared to the prior year periods[18](index=18&type=chunk) - The Company reported a net loss of **$(4.7) million** for the thirteen weeks and **$(38.1) million** for the twenty-six weeks ended August 2, 2025, a significant decline from net income of **$5.7 million** and a net loss of **$(2.4) million**, respectively, in the comparable prior-year periods[18](index=18&type=chunk) [Condensed Consolidated Statements of Comprehensive (Loss) Income](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20(Loss)%20Income) Comprehensive (Loss) Income (in thousands) | Metric | Thirteen Weeks Ended Aug 2, 2025 | Thirteen Weeks Ended Aug 3, 2024 | Twenty-Six Weeks Ended Aug 2, 2025 | Twenty-Six Weeks Ended Aug 3, 2024 | | :-------------------------------- | :------------------------------- | :------------------------------- | :--------------------------------- | :------------------------------- | | Net (loss) income | $(4,672) | $5,706 | $(38,132) | $(2,415) | | Cumulative translation adjustment | $(64) | $(8) | $(108) | — | | Comprehensive (loss) income, net of tax | $(4,736) | $5,698 | $(38,240) | $(2,415) | - Comprehensive loss significantly widened for both the thirteen and twenty-six-week periods ended August 2, 2025, primarily reflecting the increased net loss and negative cumulative translation adjustments[21](index=21&type=chunk) [Condensed Consolidated Statements of Shareholders' Equity](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Shareholders'%20Equity) Shareholders' Equity Changes (in thousands) | Metric | Balance at Feb 1, 2025 | Net Loss (26 wks) | Balance at Aug 2, 2025 | | :----------------------- | :------------------- | :---------------- | :------------------- | | Total Shareholders' Equity | $178,955 | $(38,132) | $140,486 | - Total shareholders' equity decreased from **$178.9 million** at February 1, 2025, to **$140.5 million** at August 2, 2025, primarily due to the net loss incurred during the period[24](index=24&type=chunk) - In the prior year (twenty-six weeks ended August 3, 2024), treasury stock repurchases of **$15.9 million** significantly reduced shareholders' equity[26](index=26&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Cash Flow Summary (in thousands) | Activity | Twenty-Six Weeks Ended Aug 2, 2025 | Twenty-Six Weeks Ended Aug 3, 2024 | | :------------------------------------ | :--------------------------------- | :------------------------------- | | Net cash used in operating activities | $(23,298) | $(13,151) | | Net cash used in investing activities | $(1,576) | $(3,649) | | Net cash provided by (used in) financing activities | $9,800 | $(16,356) | | Cash and cash equivalents, end of period | $15,184 | $44,147 | - Net cash used in operating activities increased by **$10.1 million**, primarily due to a higher net loss in the current period[29](index=29&type=chunk)[188](index=188&type=chunk) - Financing activities shifted from a net use of cash of **$16.4 million** in the prior year to a net provision of cash of **$9.8 million** in the current year, driven by **$15.0 million** in borrowings and no common stock repurchases[29](index=29&type=chunk)[191](index=191&type=chunk) [Notes to the Condensed Consolidated Financial Statements](index=12&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) This section details the Company's accounting policies, revenue, leases, earnings per share, debt, taxes, stock compensation, and segment reporting [Note 1. Description of the Company and Basis of Presentation](index=12&type=section&id=1.%20Description%20of%20the%20Company%20and%20Basis%20of%20Presentation) - Vera Bradley is a leading designer of women's handbags, luggage, travel items, fashion and home accessories, and unique gifts, founded in 1982[36](index=36&type=chunk) - On March 31, 2025, the Company completed the sale of Creative Genius, Inc. (Pura Vida Bracelets), classifying its operations as discontinued in the consolidated financial statements[37](index=37&type=chunk)[38](index=38&type=chunk)[42](index=42&type=chunk) - The Company now operates with two reportable segments: Vera Bradley Direct (VB Direct), which includes full-line and outlet stores and e-commerce, and Vera Bradley Indirect (VB Indirect), which covers sales to specialty retailers, key accounts, and licensing royalties[38](index=38&type=chunk)[43](index=43&type=chunk) [Note 2. Revenue from Contracts with Customers](index=14&type=section&id=2.%20Revenue%20from%20Contracts%20with%20Customers) Net Revenues by Product Category (in thousands) - Thirteen Weeks Ended | Product Category | August 2, 2025 | August 3, 2024 | Change ($) | Change (%) | | :--------------- | :------------- | :------------- | :--------- | :--------- | | Bags | $36,598 | $45,509 | $(8,911) | -19.6% | | Travel | $16,774 | $21,939 | $(5,165) | -23.5% | | Accessories | $9,372 | $14,396 | $(5,024) | -34.9% | | Home | $3,928 | $6,889 | $(2,961) | -43.0% | | Apparel/Footwear | $1,729 | $2,719 | $(990) | -36.4% | | Other | $2,457 | $2,551 | $(94) | -3.7% | | **Total** | **$70,858** | **$94,003** | **$(23,145)**| **-24.6%** | Net Revenues by Product Category (in thousands) - Twenty-Six Weeks Ended | Product Category | August 2, 2025 | August 3, 2024 | Change ($) | Change (%) | | :--------------- | :------------- | :------------- | :--------- | :--------- | | Bags | $58,262 | $75,582 | $(17,320) | -22.9% | | Travel | $31,261 | $38,007 | $(6,746) | -17.7% | | Accessories | $17,360 | $25,894 | $(8,534) | -33.0% | | Home | $7,697 | $12,538 | $(4,841) | -38.6% | | Apparel/Footwear | $3,366 | $5,498 | $(2,132) | -38.8% | | Other | $4,564 | $4,432 | $132 | +3.0% | | **Total** | **$122,510** | **$161,951** | **$(39,441)**| **-24.4%** | - Contract liabilities, primarily unredeemed gift cards, were **$1.6 million** as of August 2, 2025, a slight decrease from **$1.7 million** at February 1, 2025[58](index=58&type=chunk) [Note 3. Leases](index=16&type=section&id=3.%20Leases) - The weighted-average discount rate for leases increased to **5.1%** as of August 2, 2025, from **4.9%** as of August 3, 2024[63](index=63&type=chunk) Total Net Lease Cost (in thousands) - Twenty-Six Weeks Ended | Lease Cost Type | August 2, 2025 | August 3, 2024 | | :----------------- | :------------- | :------------- | | Operating lease cost | $12,576 | $12,259 | | Variable lease cost | $2,096 | $2,233 | | Short-term lease cost| $195 | $388 | | Less: Sublease income| $(208) | $(210) | | **Total net lease cost** | **$14,659** | **$14,670** | - The weighted-average remaining lease term decreased to **4.4 years** as of August 2, 2025, from **4.9 years** as of August 3, 2024[66](index=66&type=chunk) [Note 4. Earnings Per Share](index=17&type=section&id=4.%20Earnings%20Per%20Share) Basic and Diluted Net (Loss) Income Per Share | Period | August 2, 2025 | August 3, 2024 | | :------------------------------- | :------------- | :------------- | | **Thirteen Weeks Ended** | | | | Basic net (loss) income per share| $(0.17) | $0.19 | | Diluted net (loss) income per share| $(0.17) | $0.19 | | **Twenty-Six Weeks Ended** | | | | Basic net (loss) income per share| $(1.37) | $(0.08) | | Diluted net (loss) income per share| $(1.37) | $(0.08) | - All potential common shares were excluded from diluted EPS calculations for the thirteen and twenty-six weeks ended August 2, 2025, and the twenty-six weeks ended August 3, 2024, because they were anti-dilutive due to net losses[70](index=70&type=chunk) [Note 5. Fair Value of Financial Instruments](index=18&type=section&id=5.%20Fair%20Value%20of%20Financial%20Instruments) - The Company recorded **$1.0 million** in impairment charges for store property, plant, and equipment for the twenty-six weeks ended August 2, 2025, which are included in selling, general, and administrative expenses[75](index=75&type=chunk) - Contingent consideration related to the sale of business was **$2.552 million** as of August 2, 2025, classified as a Level 3 fair value measurement due to the use of unobservable inputs[74](index=74&type=chunk)[125](index=125&type=chunk) [Note 6. Debt](index=19&type=section&id=6.%20Debt) - As of August 2, 2025, the Company had **$10.0 million** in borrowings outstanding under its asset-based revolving Credit Agreement, with **$65.0 million** in remaining availability, compared to no borrowings and **$75.0 million** availability as of February 1, 2025[89](index=89&type=chunk)[193](index=193&type=chunk) - The Credit Agreement, which matures in May 2028, was amended on March 11, 2025, to allow for the sale of Creative Genius and release it from loan documents[81](index=81&type=chunk)[87](index=87&type=chunk) [Note 7. Income Taxes](index=20&type=section&id=7.%20Income%20Taxes) Effective Tax Rate | Period | August 2, 2025 | August 3, 2024 | | :------------------------------- | :------------- | :------------- | | Thirteen Weeks Ended | 0.4% | (188.2)% | | Twenty-Six Weeks Ended | (1.7)% | 99.0% | - The significant year-over-year change in effective tax rates is primarily due to a full valuation allowance recorded against the Company's net deferred tax assets for the fiscal year ended February 1, 2025[91](index=91&type=chunk)[92](index=92&type=chunk) - The recently enacted One Big Beautiful Bill Act (OBBBA) on July 4, 2025, does not have a material impact on the consolidated financial statements due to the Company maintaining a full valuation allowance on its U.S. deferred tax assets[93](index=93&type=chunk) [Note 8. Stock-Based Compensation](index=20&type=section&id=8.%20Stock-Based%20Compensation) - During the thirteen weeks ended August 2, 2025, the Company granted **1,253,694** restricted stock units (time-based and performance-based) with an aggregate fair value of **$2.7 million**, a substantial increase from **14,612 units** (**$0.1 million** fair value) in the prior-year period[96](index=96&type=chunk) - For the twenty-six weeks ended August 2, 2025, **2,757,196** restricted stock units (**$5.9 million** fair value) were granted, compared to **755,647 units** (**$5.1 million** fair value) in the same period of the prior year[97](index=97&type=chunk) - As of August 2, 2025, total unrecognized compensation cost related to nonvested restricted stock units was **$4.3 million**, expected to be recognized over a weighted-average period of **2.1 years**[101](index=101&type=chunk) [Note 9. Commitments and Contingencies](index=21&type=section&id=9.%20Commitments%20and%20Contingencies) - In June 2025, the Company received a **$4.6 million** purchase price adjustment request from the buyer of Creative Genius, which the Company disputes and has filed a legal action in the Chancery Court of Delaware to declare improper[103](index=103&type=chunk) - Management believes that current claims and contingencies are not probable to have a material adverse effect on the Company's financial condition, results of operations, or cash flows[102](index=102&type=chunk) [Note 10. Common Stock](index=21&type=section&id=10.%20Common%20Stock) - The Company's board approved a new **$30.0 million** share repurchase plan (2024 Share Repurchase Program) in December 2024, expiring in December 2027, with no purchases made under this program as of August 2, 2025[105](index=105&type=chunk)[106](index=106&type=chunk) - As of August 2, 2025, the Company held **15,834,579 shares** of its common stock as treasury shares, with an aggregate carrying amount of **$156.8 million**[108](index=108&type=chunk) [Note 11. Cloud Computing Arrangements](index=22&type=section&id=11.%20Cloud%20Computing%20Arrangements) - Unamortized Cloud Computing Arrangement (CCA) implementation costs totaled **$0.4 million** as of August 2, 2025, down from **$0.6 million** at February 1, 2025[109](index=109&type=chunk) - Amortization expense for CCA costs is recorded within selling, general, and administrative expenses[109](index=109&type=chunk) [Note 12. Cost Savings Initiatives and Other Charges](index=22&type=section&id=12.%20Cost%20Savings%20Initiatives%20and%20Other%20Charges) - The Company incurred **$3.0 million** in severance charges for the thirteen weeks ended August 2, 2025, and **$3.3 million** for the twenty-six weeks ended August 2, 2025, primarily related to unallocated corporate expenses[111](index=111&type=chunk) - The remaining liability for severance charges and cash retention payments was **$2.0 million** as of August 2, 2025[113](index=113&type=chunk) - Additional cost reduction initiatives, identified in late fiscal 2025, are expected to be fully realized in fiscal 2026, targeting efficiencies across retail stores, marketing, IT, professional services, logistics, and corporate payroll[110](index=110&type=chunk) [Note 13. Segment Reporting](index=24&type=section&id=13.%20Segment%20Reporting) - The Company operates two reportable segments: VB Direct and VB Indirect, with the Chief Operating Decision Maker (CODM) evaluating segment operating results primarily using operating income[115](index=115&type=chunk)[119](index=119&type=chunk) Segment Net Revenues (in thousands) | Segment | Thirteen Weeks Ended Aug 2, 2025 | Thirteen Weeks Ended Aug 3, 2024 | Twenty-Six Weeks Ended Aug 2, 2025 | Twenty-Six Weeks Ended Aug 3, 2024 | | :---------- | :------------------------------- | :------------------------------- | :--------------------------------- | :------------------------------- | | VB Direct | $60,514 | $72,241 | $103,597 | $128,665 | | VB Indirect | $10,344 | $21,762 | $18,913 | $33,286 | | **Total** | **$70,858** | **$94,003** | **$122,510** | **$161,951** | Segment Operating Income (in thousands) | Segment | Thirteen Weeks Ended Aug 2, 2025 | Thirteen Weeks Ended Aug 3, 2024 | Twenty-Six Weeks Ended Aug 2, 2025 | Twenty-Six Weeks Ended Aug 3, 2024 | | :---------- | :------------------------------- | :------------------------------- | :--------------------------------- | :------------------------------- | | VB Direct | $9,335 | $13,433 | $3,799 | $17,426 | | VB Indirect | $2,190 | $4,743 | $4,170 | $8,569 | | **Total** | **$11,525** | **$18,176** | **$7,969** | **$25,995** | [Note 14. Discontinued Operations](index=25&type=section&id=14.%20Discontinued%20Operations) - The Company completed the sale of Creative Genius (Pura Vida Bracelets) on March 31, 2025, for a total consideration of **$3.5 million**, including cash proceeds and contingent consideration with an estimated fair value of **$2.5 million**[124](index=124&type=chunk)[125](index=125&type=chunk) - A net loss on disposal of **$15.2 million** was recorded for the twenty-six weeks ended August 2, 2025, presented as part of discontinued operations[127](index=127&type=chunk)[128](index=128&type=chunk) Discontinued Operations Results (in thousands) | Metric | Thirteen Weeks Ended Aug 2, 2025 | Thirteen Weeks Ended Aug 3, 2024 | Twenty-Six Weeks Ended Aug 2, 2025 | Twenty-Six Weeks Ended Aug 3, 2024 | | :-------------------------------------- | :------------------------------- | :------------------------------- | :--------------------------------- | :------------------------------- | | Net revenues | — | $16,819 | $5,553 | $29,474 | | Income (loss) from discontinued operations, net of income tax | $37 | $(1,821) | $(15,163) | $(2,338) | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=28&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the Company's financial performance, liquidity, and cash flows, covering strategic progress, macroeconomic factors, and segment-level results [Strategic Progress, Macroeconomic Factors, and Other Factors Impacting our Financial Condition and Results of Operations](index=28&type=section&id=Strategic%20Progress,%20Macroeconomic%20Factors,%20and%20Other%20Factors%20Impacting%20our%20Financial%20Condition%20and%20Results%20of%20Operations) - The Company is executing a comprehensive strategy to strengthen its market position, simplify decision-making, remove organizational complexity, and focus resources on high-impact initiatives, including investing in brand, innovation, and customer experiences[134](index=134&type=chunk) - Key strategic initiatives include Sharpening Brand Focus, Omnichannel Strategy, Outlet 2.0, Optimizing the Operating Model, and Reimagining How We Work[135](index=135&type=chunk)[136](index=136&type=chunk)[137](index=137&type=chunk)[138](index=138&type=chunk) - Ongoing macroeconomic factors, such as elevated tariff costs and inflationary pressures, continue to negatively impact consumer discretionary spending, leading to softer performance in Vera Bradley outlet and full-line stores[139](index=139&type=chunk) [Management Transition](index=28&type=section&id=Management%20Transition) - Jacqueline Ardrey, the former Chief Executive Officer, departed on June 11, 2025, and the Board of Directors has initiated a national search for a successor[140](index=140&type=chunk) - Ian Bickley assumed the newly created interim role of Executive Chairman, effective July 7, 2025, to provide leadership and strategic guidance during the CEO transition[140](index=140&type=chunk) - Martin Layding was appointed Chief Financial Officer, effective June 12, 2025[141](index=141&type=chunk) [Recent Transactions](index=28&type=section&id=Recent%20Transactions) - The Company completed the sale of Pura Vida on March 31, 2025, and its results of operations are now reflected as discontinued operations in the Consolidated Statement of Operations[142](index=142&type=chunk) [How We Assess the Performance of Our Business](index=29&type=section&id=How%20We%20Assess%20the%20Performance%20of%20Our%20Business) - Net revenues reflect sales of merchandise and revenue from distribution and shipping/handling fees, less returns and discounts, categorized by VB Direct and VB Indirect segments[144](index=144&type=chunk) - Comparable sales are calculated for stores open at least 12 full fiscal months and e-commerce operations to evaluate performance, with various factors affecting them including economic trends, consumer preferences, competition, and promotional activities[145](index=145&type=chunk)[146](index=146&type=chunk)[148](index=148&type=chunk) - Gross profit is net revenues less cost of sales, influenced by volume, sales price, freight, operational efficiencies, promotional activities, commodity prices, tariffs, and labor costs[146](index=146&type=chunk)[147](index=147&type=chunk) - Selling, General, and Administrative (SG&A) expenses encompass selling, advertising, marketing, product development, and administrative costs, including employee compensation, store occupancy, media costs, and corporate functions[148](index=148&type=chunk)[149](index=149&type=chunk)[150](index=150&type=chunk) [Results of Operations](index=30&type=section&id=Results%20of%20Operations) Consolidated Results of Operations (in thousands, except percentages) | Metric | Thirteen Weeks Ended Aug 2, 2025 | Thirteen Weeks Ended Aug 3, 2024 | Change ($) | Change (%) | | :---------------------------------------- | :------------------------------- | :------------------------------- | :--------- | :--------- | | Net revenues | $70,858 | $94,003 | $(23,145) | -24.6% | | Gross profit | $35,497 | $46,709 | $(11,212) | -24.0% | | SG&A expenses | $40,442 | $44,449 | $(4,007) | -9.0% | | Operating (loss) income from continuing operations | $(4,592) | $2,393 | $(6,985) | -291.9% | | Net (loss) income from continuing operations | $(4,709) | $7,527 | $(12,236) | -162.6% | | Net (loss) income | $(4,672) | $5,706 | $(10,378) | -181.9% | Consolidated Results of Operations (in thousands, except percentages) | Metric | Twenty-Six Weeks Ended Aug 2, 2025 | Twenty-Six Weeks Ended Aug 3, 2024 | Change ($) | Change (%) | | :---------------------------------------- | :--------------------------------- | :------------------------------- | :--------- | :--------- | | Net revenues | $122,510 | $161,951 | $(39,441) | -24.4% | | Gross profit | $58,264 | $80,749 | $(22,485) | -27.8% | | SG&A expenses | $81,246 | $89,544 | $(8,298) | -9.3% | | Operating (loss) income from continuing operations | $(22,449) | $(8,224) | $(14,225) | -173.0% | | Net (loss) income from continuing operations | $(22,969) | $(77) | $(22,892) | -29730% | | Net (loss) income | $(38,132) | $(2,415) | $(35,717) | -1479.0% | - VB Direct net revenues decreased by **16.2%** for the thirteen weeks and **19.5%** for the twenty-six weeks, with comparable sales down **17.3%** and **20.5%** respectively, primarily due to reduced conversion and traffic in all channels[153](index=153&type=chunk)[155](index=155&type=chunk)[170](index=170&type=chunk) - VB Indirect net revenues decreased by **52.5%** for the thirteen weeks and **43.2%** for the twenty-six weeks, mainly due to a decrease in key account orders and liquidation sales[156](index=156&type=chunk)[171](index=171&type=chunk) - Operating loss from continuing operations significantly worsened, increasing by **$7.0 million** for the thirteen weeks and **$14.2 million** for the twenty-six weeks, driven by decreased sales and gross profit, despite reductions in SG&A[160](index=160&type=chunk)[175](index=175&type=chunk) [Liquidity and Capital Resources](index=35&type=section&id=Liquidity%20and%20Capital%20Resources) - The Company's primary liquidity sources are cash on hand, cash equivalents, and cash flow from operations, supplemented by a **$75.0 million** asset-based revolving credit agreement[184](index=184&type=chunk) - Net cash used in operating activities increased to **$23.3 million** for the twenty-six weeks ended August 2, 2025, from **$13.2 million** in the prior-year period, primarily due to the higher net loss[188](index=188&type=chunk) - Net cash provided by financing activities was **$9.8 million** for the twenty-six weeks ended August 2, 2025, a significant shift from **$16.4 million** used in the prior year, mainly due to **$10.0 million** in net borrowings from the credit facility and no common stock repurchases[191](index=191&type=chunk) - As of August 2, 2025, the Company had **$10.0 million** in borrowings outstanding and **$65.0 million** in availability under the Credit Agreement[193](index=193&type=chunk) [Critical Accounting Policies and Estimates](index=36&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) - There were no significant changes to the Company's critical accounting policies and estimates as of August 2, 2025, compared to those described in the Annual Report on Form 10-K for the fiscal year ended February 1, 2025[197](index=197&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=37&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) No material changes in market risks were identified as of August 2, 2025, compared to the prior fiscal year's 10-K filing - No material changes in market risks were identified as of August 2, 2025, compared to the Company's Annual Report on Form 10-K[199](index=199&type=chunk) [Item 4. Controls and Procedures](index=37&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls and procedures were effective as of August 2, 2025, with no material changes in internal control over financial reporting - The Company's disclosure controls and procedures were effective as of August 2, 2025, based on an evaluation by management, including the CEO and CFO[200](index=200&type=chunk) - There has been no material change in the Company's internal control over financial reporting during the most recent fiscal quarter[201](index=201&type=chunk) Part II. Other Information This part covers legal proceedings, risk factors, equity sales, other information, and exhibits [Item 1. Legal Proceedings](index=38&type=section&id=Item%201.%20Legal%20Proceedings) The Company faces routine legal proceedings and disputes a **$4.6 million** purchase price adjustment request from the Creative Genius buyer - The Company is routinely involved in legal proceedings, including policing its intellectual property rights against trademark counterfeiting and infringement[202](index=202&type=chunk) - In June 2025, the Company received a **$4.6 million** purchase price adjustment request from the buyer of Creative Genius, which it disputes and has filed an action in the Chancery Court of Delaware to declare improper[203](index=203&type=chunk) [Item 1A. Risk Factors](index=38&type=section&id=Item%201A.%20Risk%20Factors) No material changes to the risk factors previously disclosed in the Company's Annual Report on Form 10-K were reported - No material changes to the risk factors previously set forth in the Company's Annual Report on Form 10-K for the fiscal year ended February 1, 2025, were reported[204](index=204&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=39&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) A new **$30.0 million** share repurchase plan was approved in December 2024, with no purchases made as of August 2, 2025 - A new **$30.0 million** share repurchase plan (2024 Share Repurchase Program) was approved in December 2024, effective from December 14, 2024, to December 2027[205](index=205&type=chunk) - As of August 2, 2025, no purchases have been made under the 2024 Share Repurchase Program[206](index=206&type=chunk) [Item 5. Other Information](index=39&type=section&id=Item%205.%20Other%20Information) No directors or executive officers adopted or terminated Rule 10b5-1 trading plans during the thirteen weeks ended August 2, 2025 - None of the Company's directors or executive officers adopted or terminated any Rule 10b5-1 trading plans during the thirteen weeks ended August 2, 2025[207](index=207&type=chunk) [Item 6. Exhibits](index=40&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including CEO and CFO certifications and XBRL documents - The exhibits include CEO Section 302 Certification, CFO Section 302 Certification, Section 906 Certifications, and various Inline XBRL documents (Instance, Schema, Calculation, Label, Presentation, Definition Linkbase Documents)[208](index=208&type=chunk)

PART I Covers the company's business operations, risk factors, and regulatory environment [ITEM 1. BUSINESS](index=4&type=section&id=ITEM%201.%20BUSINESS) IF Bancorp, Inc. is a Maryland corporation serving as the holding company for Iroquois Federal Savings and Loan Association. The company primarily engages in deposit-taking and investing in various mortgage, commercial, and consumer loans, alongside offering insurance and financial services through subsidiaries. It operates across seven full-service banking offices in Illinois and a loan production office in Missouri. The company's strategy involves increasing commercial real estate, multi-family, and commercial business loans, which generally offer higher returns and shorter durations - IF Bancorp, Inc. is the holding company for Iroquois Federal Savings and Loan Association, a federally chartered savings association headquartered in Watseka, Illinois[15](index=15&type=chunk) - The Association's primary business involves taking deposits and investing them in various loan types, including one- to four-family residential, multi-family, commercial real estate, commercial business, construction, land development, and consumer loans[17](index=17&type=chunk) - In addition to traditional banking, the company offers property and casualty insurance through L.C.I. Service Corporation and other financial services via Iroquois Financial, a division of Iroquois Federal[20](index=20&type=chunk) Consolidated Financial Highlights (June 30, 2025 vs. 2024) | Metric | June 30, 2025 | June 30, 2024 | | :--------------------- | :------------- | :------------- | | Consolidated Assets | $887.7 million | $887.7 million | | Consolidated Deposits | $721.3 million | $727.2 million | | Consolidated Equity | $81.8 million | $73.9 million | [General Business Overview](index=4&type=section&id=General) Provides an overview of the company's core business and strategic direction [Available Information](index=5&type=section&id=Available%20Information) Details where public information about the company can be accessed [Market Area and Demographics](index=5&type=section&id=Market%20Area) Describes the company's operational market and demographic characteristics [Competition](index=6&type=section&id=Competition) Analyzes the competitive landscape within the company's market [Lending Activities](index=6&type=section&id=Lending%20Activities) Details the company's various loan products and lending practices [Loan Portfolio Composition](index=7&type=section&id=Loan%20Portfolio%20Composition) Presents the breakdown of the company's loan portfolio by type Loan Portfolio Composition (June 30, 2025 vs. 2024) | Loan Type | June 30, 2025 (Amount) | June 30, 2025 (Percent) | June 30, 2024 (Amount) | June 30, 2024 (Percent) | | :------------------------ | :--------------------- | :---------------------- | :--------------------- | :---------------------- | | One- to four-family | $178,979 | 27.97% | $177,263 | 27.42% | | Multi-family | $126,127 | 19.71% | $126,031 | 19.50% | | Commercial | $201,550 | 31.50% | $200,017 | 30.94% | | Home equity lines of credit | $10,487 | 1.64% | $9,859 | 1.53% | | Construction | $22,927 | 3.58% | $33,708 | 5.21% | | Commercial Business | $93,961 | 14.68% | $91,784 | 14.20% | | Consumer | $5,855 | 0.92% | $7,727 | 1.20% | | **Total Loans** | **$639,886** | **100.00%** | **$646,389** | **100.00%** | [Loan Portfolio Maturities and Yields](index=7&type=section&id=Loan%20Portfolio%20Maturities%20and%20Yields) Outlines the maturity schedule and yield characteristics of the loan portfolio Loan Portfolio Maturities (June 30, 2025) | Due During the Years Ending June 30, | One- to four-family residential | Multi-family real estate | Commercial real estate | Home equity lines of credit | Construction | Commercial | Consumer | Total | | :----------------------------------- | :------------------------------ | :----------------------- | :--------------------- | :-------------------------- | :----------- | :--------- | :------- | :---------- | | 2026 | $18,443 | $35,906 | $99,234 | $1,413 | $2,722 | $72,686 | $909 | $231,313 | | 2027 | $21,517 | $43,504 | $37,072 | $596 | $6,155 | $2,441 | $1,058 | $112,343 | | 2028 to 2029 | $53,830 | $27,098 | $38,599 | $2,094 | $12,062 | $7,977 | $2,509 | $144,169 | | 2030 to 2034 | $20,271 | $19,619 | $18,958 | $1,236 | $625 | $10,857 | $1,379 | $72,945 | | 2035 to 2039 | $6,362 | — | $1,144 | $4,100 | — | — | — | $11,606 | | 2040 and beyond | $58,556 | — | $6,543 | $1,048 | $1,363 | — | — | $67,510 | | **Total** | **$178,979** | **$126,127** | **$201,550** | **$10,487** | **$22,927** | **$93,961**| **$5,855**| **$639,886**| [One- to Four-Family Residential Mortgage Loans](index=8&type=section&id=One-%20to%20Four-Family%20Residential%20Mortgage%20Loans) Focuses on the company's residential mortgage lending activities [Commercial Real Estate and Multi-family Real Estate Loans](index=9&type=section&id=Commercial%20Real%20Estate%20and%20Multi-family%20Real%20Estate%20Loans) Describes lending in commercial and multi-family real estate sectors [Home Equity Lines of Credit](index=10&type=section&id=Home%20Equity%20Lines%20of%20Credit) Details the company's home equity line of credit offerings [Commercial Business Loans](index=11&type=section&id=Commercial%20Business%20Loans) Covers the company's commercial business loan portfolio [Construction Loans](index=11&type=section&id=Construction%20Loans) Explains the company's construction loan activities [Consumer Loans](index=12&type=section&id=Consumer%20Loans) Describes the company's consumer loan products [Loan Originations, Purchases, Participations, Sales and Servicing](index=12&type=section&id=Loan%20Originations,%20Purchases,%20Participations,%20Sales%20and%20Servicing) Outlines processes for loan origination, acquisition, and servicing [Loan Approval Procedures and Authority](index=12&type=section&id=Loan%20Approval%20Procedures%20and%20Authority) Details the company's loan approval processes and authorization levels [Non-performing and Problem Assets](index=13&type=section&id=Non-performing%20and%20Problem%20Assets) Addresses assets with impaired credit quality and potential issues [Non-Performing Assets](index=14&type=section&id=Non-Performing%20Assets) Provides a breakdown of assets not generating expected income Non-Performing Assets (June 30, 2025 vs. 2024) | Category | June 30, 2025 (Amount) | June 30, 2024 (Amount) | | :--------------------------------------------------------------------- | :--------------------- | :--------------------- | | Total non-accrual loans | $17 | $150 | | Total loans delinquent 90 days or greater and still accruing | $29 | $23 | | **Total non-performing loans** | **$46** | **$173** | | Performing loan modifications for borrowers with financial difficulties | — | $385 | | Total other real estate owned and foreclosed assets | $165 | — | | **Total non-performing assets** | **$211** | **$173** | | Non-performing loans to total loans | 0.01% | 0.03% | | Non-performing assets to total assets | 0.02% | 0.02% | [Loan Modifications](index=15&type=section&id=Loan%20Modifications) Discusses changes made to loan terms for financially distressed borrowers - The Company had no loan modifications for borrowers experiencing financial difficulties at June 30, 2025, a decrease from **$385,000** at June 30, 2024[80](index=80&type=chunk) Gross Interest Income from Loan Modifications (FY2025 vs. FY2024) | Metric | FY2025 (Amount) | FY2024 (Amount) | | :------------------------------------------------------------------------------------------------- | :-------------- | :-------------- | | Gross interest income if performing per original terms | $38,000 | $29,000 | | Interest income recognized on modified loans | $38,000 | $29,000 | [Delinquent Loans](index=15&type=section&id=Delinquent%20Loans) Reports on loans that are past due on payments Delinquent Loans (June 30, 2025 vs. 2024) | Delinquency Period | June 30, 2025 (Amount) | June 30, 2024 (Amount) | | :----------------- | :--------------------- | :--------------------- | | 60 to 89 Days | $856 | $238 | | 90 Days or Greater | $46 | $173 | | **Total Loans** | **$902** | **$411** | - Total delinquent loans increased by **$491,000** to **$902,000** at June 30, 2025, primarily due to increases in one- to four-family loans, commercial real estate loans, and commercial business loans[83](index=83&type=chunk) [Real Estate Owned and Foreclosed Assets](index=15&type=section&id=Real%20Estate%20Owned%20and%20Foreclosed%20Assets) Details properties acquired through foreclosure or similar actions - Foreclosed assets increased to **$165,000** at June 30, 2025, from no foreclosed assets at June 30, 2024, consisting entirely of one- to four-family residential real estate[84](index=84&type=chunk) [Classification of Assets](index=15&type=section&id=Classification%20of%20Assets) Categorizes assets based on their credit risk and quality Classified and Watch Assets (June 30, 2025 vs. 2024) | Category | June 30, 2025 (Amount) | June 30, 2024 (Amount) | | :-------------------- | :--------------------- | :--------------------- | | Substandard | $7,437 | $3,165 | | Doubtful | — | — | | Loss | — | — | | **Total classified assets** | **$7,437** | **$3,165** | | Watch | $226 | $72 | | **Total criticized assets** | **$7,663** | **$3,237** | - Substandard assets at June 30, 2025, included **$202,000** in one- to four-family residential mortgage loans, **$225,000** in multi-family loans, **$1.3 million** in commercial real estate loans, **$5.5 million** in commercial business loans, **$17,000** in consumer loans, and **$165,000** in foreclosed residential properties[89](index=89&type=chunk) [Other Credit Risk](index=16&type=section&id=Other%20Credit%20Risk) Identifies additional credit-related risks beyond classified assets - The company retains servicing on **$98.7 million** of loans sold under the MPF Original Program, with a maximum potential credit risk of approximately **$2.3 million**[91](index=91&type=chunk) [Allowance for Credit Losses](index=17&type=section&id=Allowance%20for%20Credit%20Losses) Explains the reserve set aside for potential loan losses [Allowance for Credit Losses Activity](index=19&type=section&id=Allowance%20for%20Credit%20Losses%20Activity) Summarizes changes in the allowance for credit losses over time Allowance for Credit Losses Activity (FY2025 vs. FY2024) | Metric | FY2025 (Amount) | FY2024 (Amount) | | :-------------------------- | :-------------- | :-------------- | | Balance at beginning of period | $7,499 | $7,139 | | Total charge-offs | $(549) | $(49) | | Total recoveries | $355 | $259 | | Net recoveries (charge-offs) | $(194) | $210 | | Provision (credit) for credit losses | $(678) | $150 | | **Balance at end of period**| **$6,627** | **$7,499** | | Net charge-offs (recoveries) to average loans outstanding | 0.03% | (0.03)% | | Allowance for credit losses to non-performing loans at end of period | 14,406.52% | 4,329.57% | | Allowance for credit losses to total loans at end of period | 1.04% | 1.16% | [Allocation of Allowance for Credit Losses](index=20&type=section&id=Allocation%20of%20Allowance%20for%20Credit%20Losses) Shows how the allowance for credit losses is distributed across loan categories Allocation of Allowance for Credit Losses by Loan Category (June 30, 2025 vs. 2024) | Loan Category | June 30, 2025 (ACL) | June 30, 2025 (% of Total Loans) | June 30, 2024 (ACL) | June 30, 2024 (% of Total Loans) | | :------------------------ | :------------------ | :------------------------------- | :------------------ | :------------------------------- | | One- to four-family | $1,475 | 28.0% | $1,774 | 27.4% | | Multi-family | $1,513 | 19.7% | $1,764 | 19.5% | | Commercial | $2,252 | 31.5% | $2,358 | 31.0% | | Home equity lines of credit | $144 | 1.6% | $148 | 1.5% | | Construction | $206 | 3.6% | $337 | 5.2% | | Commercial Business | $985 | 14.7% | $1,053 | 14.2% | | Consumer | $52 | 0.9% | $65 | 1.2% | | **Total** | **$6,627** | **100.0%** | **$7,499** | **100.0%** | - The allowance for credit losses decreased by **$872,000 (11.6%)** to **$6.6 million** at June 30, 2025, from **$7.5 million** at June 30, 2024, attributed to reduced loan growth and an upgrade in a loan relationship's risk rating[112](index=112&type=chunk) [Investments](index=20&type=section&id=Investments) Details the company's investment portfolio and strategies [Portfolio Maturities and Yields](index=22&type=section&id=Portfolio%20Maturities%20and%20Yields) Presents the maturity profile and returns of the investment portfolio Investment Securities Portfolio Maturities and Yields (June 30, 2025) | Category | One Year or Less (Amortized Cost) | One Year or Less (Weighted Average Yield) | One Year through Five Years (Amortized Cost) | One Year through Five Years (Weighted Average Yield) | Five Years through Ten Years (Amortized Cost) | Five Years through Ten Years (Weighted Average Yield) | More than Ten Years (Amortized Cost) | More than Ten Years (Weighted Average Yield) | Total Securities (Amortized Cost) | Total Securities (Fair Value) | Total Securities (Weighted Average Yield) | | :-------------------------------------------------------------------- | :-------------------------------- | :---------------------------------------- | :------------------------------------------- | :--------------------------------------------------- | :-------------------------------------------- | :---------------------------------------------------- | :----------------------------------- | :------------------------------------------- | :-------------------------------- | :---------------------------- | :---------------------------------------- | | U.S. government, federal agency and government sponsored enterprises | $— | —% | $1,986 | 1.60% | $— | —% | $— | —% | $1,986 | $1,812 | 1.60% | | U.S. government sponsored mortgage-backed securities | $3,955 | 3.28% | $35,223 | 3.04% | $70,038 | 2.01% | $83,045 | 2.83% | $192,261 | $171,079 | 2.58% | | Small Business Administration | $— | —% | $1,134 | 2.86% | $4,964 | 2.50% | $8,796 | 1.86% | $14,894 | $13,114 | 2.15% | | State and political subdivisions | $— | —% | $662 | 4.15% | $1,086 | 4.31% | $— | —% | $1,748 | $1,748 | 4.25% | | **Total** | **$3,955** | **3.28%** | **$39,005** | **2.89%** | **$76,088** | **1.91%** | **$91,841** | **2.56%** | **$210,889** | **$187,753** | **2.40%** | [Sources of Funds](index=23&type=section&id=Sources%20of%20Funds) Identifies the primary sources of funding for the company's operations [Deposits](index=23&type=section&id=Deposits) Provides an overview of the company's deposit base by type and maturity Average Total Deposit Accounts by Type (FY2025 vs. FY2024) | Deposit Type | FY2025 (Average Balance) | FY2025 (Percent) | FY2025 (Weighted Average Rate) | FY2024 (Average Balance) | FY2024 (Percent) | FY2024 (Weighted Average Rate) | | :------------------------ | :----------------------- | :--------------- | :----------------------------- | :----------------------- | :--------------- | :----------------------------- | | Noninterest bearing demand | $47,674 | 6.97% | —% | $51,894 | 7.55% | —% | | Interest-bearing checking or NOW | $102,462 | 14.98% | 0.15% | $102,926 | 14.96% | 0.15% | | Savings accounts | $56,030 | 8.20% | 0.30% | $60,550 | 8.80% | 0.61% | | Money market accounts | $158,797 | 23.22% | 2.78% | $161,591 | 23.49% | 2.99% | | Certificates of deposit | $318,849 | 46.63% | 4.12% | $310,866 | 45.20% | 3.96% | | **Total deposits** | **$683,812** | **100.00%** | **2.61%** | **$687,827** | **100.00%** | **2.57%** | Uninsured Certificates of Deposit Maturity (June 30, 2025) | Maturity Period | Amount (In thousands) | | :------------------------------ | :-------------------- | | Three months or less | $17,951 | | Over three months through six months | $8,723 | | Over six months through 12 months | $27,658 | | Over 12 months | $1,040 | | **Total** | **$55,372** | [Borrowings](index=24&type=section&id=Borrowings) Details the company's various borrowing arrangements and capacities - At June 30, 2025, the company had access to an additional **$62.7 million** from FHLB-Chicago, **$14.0 million** from a correspondent bank, and **$35.3 million** from the Federal Reserve Discount Window[133](index=133&type=chunk) [Personnel](index=24&type=section&id=Personnel) Outlines information regarding company personnel [Subsidiaries](index=24&type=section&id=Subsidiaries) Describes the company's subsidiary entities and their operations [REGULATION AND SUPERVISION](index=24&type=section&id=REGULATION%20AND%20SUPERVISION) Covers the regulatory framework governing the company's operations [Federal Banking Regulation](index=25&type=section&id=Federal%20Banking%20Regulation) Details the federal regulations applicable to banking activities [Federal Reserve System](index=30&type=section&id=Federal%20Reserve%20System) Explains the role of the Federal Reserve System in the company's operations [Other Regulations](index=30&type=section&id=Other%20Regulations) Addresses additional regulatory requirements impacting the company [Holding Company Regulations](index=31&type=section&id=Holding%20Company%20Regulations) Outlines regulations specific to the company as a holding company [Federal Securities Laws](index=32&type=section&id=Federal%20Securities%20Laws) Covers compliance with federal securities laws [ITEM 1A. RISK FACTORS](index=33&type=section&id=ITEM%201A.%20RISK%20FACTORS) The company faces several key risks, including increased credit risk from its growing commercial real estate, multi-family, and commercial business loan portfolios, which are more sensitive to economic downturns. Funding sources may be insufficient for future growth, and loan participations carry higher risks due to limited control. Insufficient allowance for credit losses and stringent capital requirements could negatively impact earnings and dividend capacity. Operational risks, cyber-attacks, and system failures pose threats to operations and reputation. Furthermore, changes in interest rates, economic conditions, inflation, and regulatory policies could adversely affect profitability and financial stability - The company intends to increase its commercial real estate, multi-family, and commercial business loans, which generally carry higher credit risk due to larger balances and dependence on property/business operations[189](index=189&type=chunk) - Reliance on FHLB-Chicago advances, brokered certificates of deposit, and repurchase agreements for funding may increase, and adverse conditions could limit access or increase costs, impacting profitability[190](index=190&type=chunk) - Loan participations, especially outside the primary market, carry higher risk due to reliance on lead lenders for monitoring, potentially increasing non-performing loans and decreasing earnings[191](index=191&type=chunk) - Non-performing assets totaled **$211,000** at June 30, 2025, and an increase could reduce net income, require higher reserves, and divert management resources[193](index=193&type=chunk) - The allowance for credit losses (ACL) was **1.04%** of total loans at June 30, 2025, and if insufficient, additions would decrease net income, with regulatory reviews potentially mandating increases[195](index=195&type=chunk) - The company is subject to stringent capital requirements, including a capital conservation buffer, which may limit dividends and share repurchases if not met[198](index=198&type=chunk) - Cyber-attacks, system failures, and security breaches pose significant operational risks, potentially leading to financial loss, regulatory action, and reputational damage[201](index=201&type=chunk)[205](index=205&type=chunk)[208](index=208&type=chunk) - Interest rate changes significantly impact net interest income; a decline in rates could reduce asset yields faster than liability costs, while rising rates could increase liability costs faster than asset yields[210](index=210&type=chunk) - Economic slowdowns, particularly in local markets, could increase loan delinquencies, problem assets, and reduce demand for services, adversely affecting business[211](index=211&type=chunk)[213](index=213&type=chunk) - Elevated inflation could negatively affect business customers' ability to repay loans and increase the company's operating costs[214](index=214&type=chunk) - Declines in the value of investment securities, especially due to market factors, could adversely affect earnings, capital, and liquidity[215](index=215&type=chunk) - Monetary policies of the Federal Reserve Board and extensive government regulations (e.g., USA PATRIOT Act, Bank Secrecy Act) can significantly impact operations, compliance costs, and growth[216](index=216&type=chunk)[222](index=222&type=chunk)[223](index=223&type=chunk) [Operational Risks](index=33&type=section&id=Operational%20Risks) Identifies risks related to internal processes, people, and systems [Market and Industry Risks](index=36&type=section&id=Market%20and%20Industry%20Risks) Addresses risks stemming from market conditions and industry trends [ITEM 1B. UNRESOLVED STAFF COMMENTS](index=39&type=section&id=ITEM%201B.%20UNRESOLVED%20STAFF%20COMMENTS) There are no unresolved staff comments to report [ITEM 1C. CYBERSECURITY](index=39&type=section&id=ITEM%201C.%20CYBERSECURITY) The Company maintains an Information Security Program (ISP) based on the NIST Cybersecurity Framework, implementing various controls like computer scanning, intrusion prevention, and access controls. The ISP is reviewed annually, and the Board of Directors actively oversees cybersecurity risk tolerance, receiving annual reports from the Information Security Officer. Despite these measures, the threat of cyber-attacks remains severe, though to date, risks have not materially affected the Company - The Company's Information Security Program (ISP) is based on the National Institute of Standards and Technology Cybersecurity Framework[227](index=227&type=chunk) - Controls include computer scanning, intrusion prevention, firewalls, end-point detection, data loss prevention, access controls, penetration testing, and security monitoring[228](index=228&type=chunk) - The Board of Directors actively reviews and approves the ISP and receives annual reports on cybersecurity matters[229](index=229&type=chunk) - To date, risks from cybersecurity threats have not materially affected the Company[229](index=229&type=chunk) [ITEM 2. PROPERTIES](index=40&type=section&id=ITEM%202.%20PROPERTIES) The Company operates from a main office, six branch offices, an administrative office, and a data center in Illinois, along with a loan production office in Missouri. The net book value of premises, land, and equipment was $10.2 million at June 30, 2025. Most facilities are owned, with one data center leased until March 31, 2028 - The Company operates from a main office, six branch offices, an administrative office, and a data center in Illinois, and a loan production office in Missouri[231](index=231&type=chunk) - The net book value of premises, land, and equipment was **$10.2 million** at June 30, 2025[231](index=231&type=chunk) Company Properties (June 30, 2025) | Location | Year Opened | Owned/Leased | | :------------------------------------- | :---------- | :------------------------------ | | Main Office: 201 East Cherry Street, Watseka, Illinois | 1964 | Owned | | Branches: 619 North Gilbert Street, Danville, Illinois | 1973 | Owned | | Branches: 175 East Fourth Avenue, Clifton, Illinois | 1977 | Owned | | Branches: 655 South Dixie Highway, Hoopeston, Illinois | 2023 | Owned | | Branches: 108 Arbours Drive, Savoy, Illinois | 2014 | Owned | | Branches: 421 Brown Boulevard, Bourbonnais, Illinois | 2017 | Owned | | Branches: 2411 Village Green Place, Champaign, Illinois| 2018 | Owned | | Loan Production Office: 3535 Highway 54, Osage Beach, Missouri | 2006 | Owned | | Administrative Office: 204 East Cherry Street, Watseka, Illinois | 2001 | Owned | | Data Center: 183 Bethel Drive, Bourbonnais, Illinois | 2019 | Leased (expires March 31, 2028) | [ITEM 3. LEGAL PROCEEDINGS](index=41&type=section&id=ITEM%203.%20LEGAL%20PROCEEDINGS) The Company is not currently a party to any pending legal proceedings that are expected to have a material adverse effect on its financial condition, results of operations, or cash flows - The Company is not a party to any pending legal proceedings that are believed to have a material adverse effect on its financial condition, results of operations, or cash flows[233](index=233&type=chunk) [ITEM 4. MINE SAFETY DISCLOSURES](index=41&type=section&id=ITEM%204.%20MINE%20SAFETY%20DISCLOSURES) This item is not applicable to the Company PART II Covers market information, financial performance, and internal controls [ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES](index=41&type=section&id=ITEM%205.%20MARKET%20FOR%20REGISTRANT'S%20COMMON%20EQUITY,%20RELATED%20STOCKHOLDER%20MATTERS%20AND%20ISSUER%20PURCHASES%20OF%20EQUITY%20SECURITIES) The Company's common stock is listed on the Nasdaq Capital Market under the symbol "IROQ." As of September 1, 2025, there were 298 holders of record. The Company paid dividends of $0.20 per share in October 2023, April 2024, October 2024, and April 2025. Future dividend payments are subject to various factors, including financial condition, capital requirements, and regulatory limitations. No share repurchases occurred during the quarter ended June 30, 2025, and no active stock repurchase plan is in place - The Company's common stock is listed on the Nasdaq Capital Market under the trading symbol "**IROQ**"[236](index=236&type=chunk) - As of September 1, 2025, there were **298** holders of record of the Company's common stock[236](index=236&type=chunk) Dividends Paid Per Share | Period | Dividend Per Share | | :----------- | :----------------- | | October 2023 | $0.20 | | April 2024 | $0.20 | | October 2024 | $0.20 | | April 2025 | $0.20 | - No share repurchases occurred during the quarter ended June 30, 2025, and the Company does not have an active stock repurchase plan[239](index=239&type=chunk) [ITEM 6. [RESERVED]](index=41&type=section&id=ITEM%206.%20%5BRESERVED%5D) This item is reserved and contains no information [ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION](index=42&type=section&id=ITEM%207.%20MANAGEMENT'S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATION) The Company's financial performance is primarily driven by net interest income, which increased by 17.4% to $20.8 million in FY2025. Net income significantly rose by 140.4% to $4.3 million in FY2025, attributed to higher net interest income, increased noninterest income, and a decrease in credit loss provisions. Total assets remained stable at $887.7 million, while total equity increased by 10.7% to $81.8 million. The Company maintains strong asset quality with low non-performing assets and is well-capitalized under regulatory guidelines - The Company's assets grew to **$887.7 million** at June 30, 2025, from **$377.2 million** at June 30, 2009, primarily through increased investment securities and loan growth[241](index=241&type=chunk) - Net interest income increased by **$3.1 million**, or **17.4%**, to **$20.8 million** for the year ended June 30, 2025, from **$17.7 million** for the year ended June 30, 2024[271](index=271&type=chunk) - Net income for the year ended June 30, 2025, was **$4.3 million**, a **140.4%** increase from **$1.8 million** for the year ended June 30, 2024[245](index=245&type=chunk)[270](index=270&type=chunk) - Non-performing assets remained low at **$211,000**, or **0.1%** of total assets, at June 30, 2025[245](index=245&type=chunk) [Overview](index=42&type=section&id=Overview) Provides a high-level summary of the company's financial performance [Critical Accounting Policies](index=43&type=section&id=Critical%20Accounting%20Policies) Highlights key accounting policies requiring significant judgment [Selected Financial Data](index=44&type=section&id=Selected%20Financial%20Data) Presents a summary of key financial metrics over multiple periods Selected Financial Condition Data (June 30, 2025 vs. 2024 vs. 2023) | Metric | 2025 (In thousands) | 2024 (In thousands) | 2023 (In thousands) | | :-------------------------------------- | :------------------ | :------------------ | :------------------ | | Total assets | $887,659 | $887,745 | $848,976 | | Cash and cash equivalents | $20,092 | $9,571 | $10,988 | | Investment securities available for sale | $187,753 | $190,475 | $201,299 | | Loans receivable, net | $633,603 | $639,297 | $587,457 | | Deposits | $721,258 | $727,177 | $735,314 | | Federal Home Loan Bank of Chicago advances | $54,124 | $32,999 | $19,500 | | Total equity | $81,837 | $73,916 | $71,753 | Selected Operating Data (FY2025 vs. FY2024 vs. FY2023) | Metric | 2025 (In thousands) | 2024 (In thousands) | 2023 (In thousands) | | :----------------------------------------- | :------------------ | :------------------ | :------------------ | | Interest income | $43,417 | $40,984 | $32,072 | | Interest expense | $22,603 | $23,255 | $10,075 | | Net interest income | $20,814 | $17,729 | $21,997 | | Provision (credit) for credit losses | $(701) | $32 | $(228) | | Noninterest income | $4,944 | $4,386 | $4,069 | | Noninterest expense | $20,542 | $19,728 | $20,034 | | Net income | $4,304 | $1,790 | $4,660 | Selected Financial Ratios (FY2025 vs. FY2024 vs. FY2023) | Ratio | 2025 | 2024 | 2023 | | :---------------------------------------- | :------ | :------ | :------ | | Return on average assets | 0.49% | 0.20% | 0.56% | | Return on average equity | 5.52% | 2.54% | 6.56% | | Interest rate spread | 2.13% | 1.78% | 2.62% | | Net interest margin | 2.47% | 2.10% | 2.80% | | Efficiency ratio | 79.75% | 89.21% | 76.86% | | Non-performing assets to total assets | 0.02% | 0.02% | 0.02% | | Non-performing loans to total loans | 0.01% | 0.03% | 0.02% | | Allowance for credit losses to total loans | 1.04% | 1.16% | 1.20% | | Community Bank Leverage Ratio (Company) | 10.7% | 10.1% | 10.5% | | Community Bank Leverage Ratio (Association) | 10.0% | 9.2% | 9.5% | [Comparison of Financial Condition at June 30, 2025 and June 30, 2024](index=46&type=section&id=Comparison%20of%20Financial%20Condition%20at%20June%2030,%202025%20and%20June%2030,%202024) Analyzes changes in the company's financial position between two fiscal years - Total assets remained stable at **$887.7 million** at June 30, 2025, compared to June 30, 2024[261](index=261&type=chunk) - Cash and cash equivalents increased by **$10.5 million** to **$20.1 million** at June 30, 2025[262](index=262&type=chunk) - Net loans receivable decreased by **$5.7 million (0.9%)** to **$633.6 million**, primarily due to a **$10.8 million** decrease in construction loans and a **$1.9 million** decrease in consumer loans, partially offset by increases in other loan categories[263](index=263&type=chunk) - Deposits decreased by **$5.9 million (0.8%)** to **$721.3 million**, with decreases in savings, NOW, money market accounts, and non-brokered certificates of deposit, partially offset by an increase in noninterest-bearing demand accounts and brokered certificates of deposit[266](index=266&type=chunk) - Total equity increased by **$7.9 million (10.7%)** to **$81.8 million**, driven by net income and an increase in accumulated other comprehensive income (loss) due to decreased unrealized depreciation on available-for-sale securities[268](index=268&type=chunk) [Comparison of Operating Results for the Years Ended June 30, 2025 and 2024](index=47&type=section&id=Comparison%20of%20Operating%20Results%20for%20the%20Years%20Ended%20June%2030,%202025%20and%202024) Compares the company's operational performance across two fiscal years [Net Interest Income](index=47&type=section&id=Net%20Interest%20Income) Examines the primary driver of the company's profitability from lending - Net interest income increased by **$3.1 million (17.4%)** to **$20.8 million** for FY2025, driven by a **$2.4 million** increase in interest and dividend income and a **$652,000** decrease in interest expense[271](index=271&type=chunk) - The interest rate spread increased by **35 basis points** to **2.13%**, and the net interest margin increased by **37 basis points** to **2.47%** for FY2025[271](index=271&type=chunk) [Interest and Dividend Income](index=47&type=section&id=Interest%20and%20Dividend%20Income) Details income generated from interest-earning assets - Interest and dividend income increased by **$2.4 million (5.9%)** to **$43.4 million** for FY2025, primarily due to an **8.0%** increase in interest on loans[272](index=272&type=chunk) - The average yield on loans increased by **36 basis points** to **5.81%** for FY2025[272](index=272&type=chunk) [Interest Expense](index=47&type=section&id=Interest%20Expense) Analyzes costs associated with interest-bearing liabilities - Interest expense decreased by **$652,000 (2.8%)** to **$22.6 million** for FY2025, due to a **seven basis point** decrease in the cost of interest-bearing liabilities to **3.01%**[273](index=273&type=chunk) - Interest expense on borrowings decreased by **$864,000 (15.4%)** to **$4.7 million**, with a **55 basis point** decrease in the average cost of borrowings to **4.15%**[275](index=275&type=chunk) [Provision for Credit Losses](index=47&type=section&id=Provision%20for%20Credit%20Losses) Discusses the expense or credit related to potential loan defaults - The Company recorded a total credit for credit losses of **$701,000** for FY2025, compared to a provision of **$32,000** for FY2024[276](index=276&type=chunk) - Non-performing loans decreased to **$46,000** at June 30, 2025, from **$173,000** at June 30, 2024[276](index=276&type=chunk) - Net charge-offs of **$194,000** were recognized in FY2025, contrasting with **$210,000** in net recoveries in FY2024[276](index=276&type=chunk) [Noninterest Income](index=48&type=section&id=Noninterest%20Income) Covers income generated from non-lending activities - Noninterest income increased by **$558,000 (12.7%)** to **$4.9 million** for FY2025, driven by increases in customer service fees, insurance commissions, brokerage commissions, and other noninterest income[278](index=278&type=chunk) - Other noninterest income increased by **$457,000** to **$1.7 million**, largely due to an insurance settlement for HELOC check fraud[278](index=278&type=chunk) [Noninterest Expense](index=48&type=section&id=Noninterest%20Expense) Details operational costs not directly related to interest - Noninterest expense increased by **$814,000 (4.1%)** to **$20.5 million** for FY2025, primarily due to higher compensation and benefits (**$1.2 million** increase), equipment expense, and professional services[279](index=279&type=chunk) - Federal deposit insurance premium decreased by **$98,000 (17.1%)** due to an improved assessment multiplier[279](index=279&type=chunk) [Income Tax Expense](index=48&type=section&id=Income%20Tax%20Expense) Reports on the company's tax obligations and effective tax rates - Income tax expense was **$1.6 million** for FY2025, compared to **$565,000** for FY2024, reflecting effective tax rates of **27.2%** and **24.00%**, respectively[280](index=280&type=chunk) [Asset Quality and Allowance for Credit Losses](index=48&type=section&id=Asset%20Quality%20and%20Allowance%20for%20Credit%20Losses) Assesses the health of the loan portfolio and adequacy of loss reserves [Average Balances and Yields](index=49&type=section&id=Average%20Balances%20and%20Yields) Presents average asset and liability balances with their respective yields Average Balances, Interest, and Yields/Rates (FY2025 vs. FY2024) | Category | FY2025 Average Outstanding Balance | FY2025 Interest | FY2025 Yield/Rate | FY2024 Average Outstanding Balance | FY2024 Interest | FY2024 Yield/Rate | | :-------------------------------------- | :--------------------------------- | :-------------- | :---------------- | :--------------------------------- | :-------------- | :---------------- | | **Interest-earning assets:** | | | | | | | | Total loans | $647,588 | $37,628 | 5.81% | $638,754 | $34,826 | 5.45% | | Total securities | $186,539 | $5,124 | 2.75% | $193,896 | $5,542 | 2.86% | | Total interest-earning assets | $843,945 | $43,417 | 5.14% | $843,702 | $40,984 | 4.86% | | **Interest-bearing liabilities:** | | | | | | | | Total interest-bearing deposits | $636,138 | $17,865 | 2.81% | $635,933 | $17,653 | 2.78% | | Borrowings and repurchase agreements | $114,236 | $4,738 | 4.15% | $119,099 | $5,602 | 4.70% | | Total interest-bearing liabilities | $750,374 | $22,603 | 3.01% | $755,032 | $23,255 | 3.08% | | Net interest income | | $20,814 | | | $17,729 | | | Net interest rate spread | | | 2.13% | | | 1.78% | | Net interest margin | | | 2.47% | | | 2.10% | [Rate/Volume Analysis](index=50&type=section&id=Rate%20/%20Volume%20Analysis) Analyzes the impact of interest rate and volume changes on net interest income Effects of Changing Rates and Volumes on Net Interest Income (FY2025 vs. FY2024) | Category | Increase (Decrease) Due to Volume (In thousands) | Increase (Decrease) Due to Rate (In thousands) | Total Increase (Decrease) (In thousands) | | :---------------------------- | :----------------------------------------------- | :--------------------------------------------- | :--------------------------------------- | | **Interest-earning assets:** | | | | | Loans | $485 | $2,317 | $2,802 | | Securities | $(208) | $(210) | $(418) | | Other | $(74) | $123 | $49 | | Total interest-earning assets | $203 | $2,230 | $2,433 | | **Interest-bearing liabilities:** | | | | | Total interest-bearing deposits | $213 | $(1) | $212 | | Federal Home Loan Bank advances | $(224) | $(640) | $(864) | | Total interest-bearing liabilities | $(11) | $(641) | $(652) | | **Change in net interest income** | **$214** | **$2,871** | **$3,085** | [Management of Market Risk](index=50&type=section&id=Management%20of%20Market%20Risk) Describes strategies for managing exposure to market fluctuations [Interest Rate Risk Analysis](index=51&type=section&id=Interest%20Rate%20Risk%20Analysis) Evaluates the impact of interest rate changes on earnings and equity Earnings at Risk (June 30, 2025) | Change in Interest Rates (basis points) | One Year (% Change in Net Interest Income) | Two Years (% Change in Net Interest Income) | | :-------------------------------------- | :----------------------------------------- | :------------------------------------------ | | +400 | 0.56 | 3.36 | | +300 | 0.52 | 2.76 | | +200 | 0.48 | 2.02 | | +100 | 0.32 | 1.11 | | 0 | | | | -100 | (2.47) | (3.38) | | -200 | (2.93) | (4.87) | | -300 | (2.25) | (5.27) | | -400 | 0.01 | (4.07) | Net Economic Value of Equity (NEVE) at Risk (June 30, 2025) | Change in Interest Rates (basis points) | Estimated NEVE (In thousands) | % Change NEVE | | :-------------------------------------- | :---------------------------- | :------------ | | +400 | $111,526 | (6.63) | | +300 | $113,103 | (5.31) | | +200 | $114,794 | (3.90) | | +100 | $117,008 | (2.05) | | 0 | $119,451 | | | -100 | $120,541 | 0.91 | | -200 | $122,226 | 2.32 | | -300 | $123,057 | 3.02 | | -400 | $123,476 | 3.37 | [Liquidity and Capital Resources](index=52&type=section&id=Liquidity%20and%20Capital%20Resources) Assesses the company's ability to meet obligations and maintain capital levels - The Company's liquidity ratio averaged **24.1%** of total assets for FY2025, down from **25.9%** in FY2024[295](index=295&type=chunk) - Cash and cash equivalents totaled **$20.1 million** at June 30, 2025[297](index=297&type=chunk) - Certificates of deposit due within one year totaled **$272.6 million**, representing **37.8%** of total deposits at June 30, 2025[298](index=298&type=chunk) - Iroquois Federal exceeded all regulatory capital requirements at June 30, 2025, and is considered "**well capitalized**"[303](index=303&type=chunk) [Off-Balance Sheet Arrangements and Aggregate Contractual Obligations](index=53&type=section&id=Off-Balance%20Sheet%20Arrangements%20and%20Aggregate%20Contractual%20Obligations) Details commitments not recorded on the balance sheet and future obligations [Recent Accounting Pronouncements](index=53&type=section&id=Recent%20Accounting%20Pronouncements) Discusses the impact of newly issued accounting standards [Impact of Inflation and Changing Prices](index=53&type=section&id=Impact%20of%20Inflation%20and%20Changing%20Prices) Analyzes how inflation and price changes affect the company's financials [ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK](index=53&type=section&id=ITEM%207A.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) Information regarding quantitative and qualitative disclosures about market risk is incorporated by reference from Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operation" [ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA](index=54&type=section&id=ITEM%208.%20FINANCIAL%20STATEMENTS%20AND%20SUPPLEMENTARY%20DATA) This section presents the audited consolidated financial statements of IF Bancorp, Inc. for the years ended June 30, 2025 and 2024, including balance sheets, statements of income, comprehensive income, stockholders' equity, and cash flows, along with detailed notes. The independent auditor, Forvis Mazars, LLP, issued an unqualified opinion on these statements, highlighting the Allowance for Credit Losses as a critical audit matter due to its subjective nature - The consolidated financial statements for IF Bancorp, Inc. as of and for the years ended June 30, 2025 and 2024, are presented[341](index=341&type=chunk) - Forvis Mazars, LLP issued an unqualified opinion on the consolidated financial statements[341](index=341&type=chunk) - The valuation of the Allowance for Credit Losses (ACL) was identified as a critical audit matter due to the high degree of subjectivity in management's estimates[348](index=348&type=chunk)[349](index=349&type=chunk) [Report of Independent Registered Public Accounting Firm](index=61&type=section&id=Report%20of%20Independent%20Registered%20Public%20Accounting%20Firm) Presents the auditor's opinion on the financial statements [Critical Audit Matter](index=62&type=section&id=Critical%20Audit%20Matter) Highlights key audit areas requiring significant auditor judgment [Consolidated Balance Sheets](index=64&type=section&id=Consolidated%20Balance%20Sheets) Presents a snapshot of the company's assets, liabilities, and equity Consolidated Balance Sheets (June 30, 2025 vs. 2024) | Assets (in thousands) | 2025 | 2024 | | :---------------------------------------------------------------------------------------------------------------- | :-------- | :-------- | | Cash and cash equivalents | $20,092 | $9,571 | | Available-for-sale securities | $187,753 | $190,475 | | Loans, net of allowance for credit losses | $633,603 | $639,297 | | Federal Home Loan Bank stock, at cost | $5,174 | $4,499 | | Bank-owned life insurance | $15,348 | $14,892 | | Deferred income taxes | $8,656 | $10,483 | | **Total assets** | **$887,659**| **$887,745**| | Liabilities (in thousands) | | | | Total deposits | $721,258 | $727,177 | | Federal Home Loan Bank advances | $54,124 | $32,999 | | Other borrowings | — | $25,250 | | **Total liabilities** | **$805,822**| **$813,829**| | Stockholders' Equity (in thousands) | | | | Common stock | $33 | $33 | | Additional paid-in capital | $52,329 | $51,913 | | Retained earnings | $46,894 | $43,876 | | Accumulated other comprehensive loss, net of tax | $(16,264) | $(20,559) | | **Total stockholders' equity** | **$81,837** | **$73,916**| | **Total liabilities and stockholders' equity** | **$887,659**| **$887,745**| [Consolidated Statements of Income](index=66&type=section&id=Consolidated%20Statements%20of%20Income) Reports on the company's revenues, expenses, and net income over a period Consolidated Statements of Income (FY2025 vs. FY2024) | (in thousands) | 2025 | 2024 | | :-------------------------------------------- | :-------- | :-------- | | Interest Income | $43,417 | $40,984 | | Interest Expense | $22,603 | $23,255 | | **Net Interest Income** | **$20,814** | **$17,729** | | Provision (Credit) for Credit Losses | $(701) | $32 | | Net Interest Income After Provision (Credit) for Credit Losses | $21,515 | $17,697 | | Noninterest Income | $4,944 | $4,386 | | Noninterest Expense | $20,542 | $19,728 | | Income Before Income Tax Expense | $5,917 | $2,355 | | Provision for Income Taxes | $1,613 | $565 | | **Net Income** | **$4,304**| **$1,790**| | Earnings Per Share: Basic | $1.37 | $0.57 | | Earnings Per Share: Diluted | $1.37 | $0.57 | | Dividends Paid Per Share | $0.40 | $0.40 | [Consolidated Statements of Comprehensive Income](index=68&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income) Details all changes in equity during a period, including unrealized gains/losses Consolidated Statements of Comprehensive Income (FY2025 vs. FY2024) | (in thousands) | 2025 | 2024 | | :------------------------------------------------------------------------------------------------------------ | :-------- | :-------- | | Net Income | $4,304 | $1,790 | | Other Comprehensive Income: | | | | Unrealized appreciation on available-for-sale securities, net of taxes | $4,176 | $947 | | Less: reclassification adjustment for realized losses included in net income, net of taxes | $(51) | — | | Change in post-retirement health plan gains and losses, net of taxes | $68 | $142 | | **Other comprehensive income, net of tax** | **$4,295**| **$1,089**| | **Comprehensive Income** | **$8,599**| **$2,879**| [Consolidated Statements of Stockholders' Equity](index=69&type=section&id=Consolidated%20Statements%20of%20Stockholders'%20Equity) Shows changes in equity accounts over a period Consolidated Statements of Stockholders' Equity (FY2025 vs. FY2024) | (in thousands) | Balance, July 1, 2023 | Balance, June 30, 2024 | Balance, June 30, 2025 | | :-------------------------------------------- | :-------------------- | :--------------------- | :--------------------- | | Common Stock | $33 | $33 | $33 | | Additional Paid-In Capital | $51,543 | $51,913 | $52,329 | | Unearned ESOP Shares | $(1,540) | $(1,347) | $(1,155) | | Retained Earnings | $43,365 | $43,876 | $46,894 | | Accumulated Other Comprehensive Income (Loss) | $(21,648) | $(20,559) | $(16,264) | | **Total Stockholders' Equity** | **$71,753** | **$73,916** | **$81,837** | | Net income | | $1,790 | $4,304 | | Other comprehensive income | | $1,089 | $4,295 | | Dividends on common stock | | $(1,279) | $(1,286) | | ESOP shares earned | | $303 | $421 | [Consolidated Statements of Cash Flows](index=70&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Summarizes cash inflows and outflows from operating, investing, and financing activities Consolidated Statements of Cash Flows (FY2025 vs. FY2024) | (in thousands) | 2025 | 2024 | | :-------------------------------------------- | :-------- | :-------- | | Net cash provided by operating activities | $6,761 | $2,283 | | Net cash provided by (used in) investing activities | $14,063 | $(39,753) | | Net cash provided by (used in) financing activities | $(10,303) | $36,053 | | Increase (Decrease) in Cash and Cash Equivalents | $10,521 | $(1,417) | | Cash and Cash Equivalents, End of Year | $20,092 | $9,571 | [Notes to Financial Statements](index=72&type=section&id=Notes%20to%20Financial%20Statements) Provides detailed explanations and additional information for financial statement items [Note 1: Nature of Operations and Summary of Significant Accounting Policies](index=72&type=section&id=Note%201:%20Nature%20of%20Operations%20and%20Summary%20of%20Significant%20Accounting%20Policies) Describes the company's business and key accounting principles [Note 2: Securities](index=82&type=section&id=Note%202:%20Securities) Details the company's investment securities portfolio Available-for-sale Securities (June 30, 2025 vs. 2024) | Category | June 30, 2025 (Amortized Cost) | June 30, 2025 (Fair Value) | June 30, 2024 (Amortized Cost) | June 30, 2024 (Fair Value) | | :-------------------------------------------------------------------- | :----------------------------- | :------------------------- | :----------------------------- | :------------------------- | | U.S. Government and federal agency and Government sponsored enterprises | $1,986 | $1,812 | $6,979 | $6,609

[FORM 10-Q Filing Information](index=1&type=section&id=FORM%2010-Q%20Filing%20Information) This section provides key administrative details regarding the company's Form 10-Q filing and stock information - Genesco Inc. (GCO) is an accelerated filer on the New York Stock Exchange[2](index=2&type=chunk) - As of August 29, 2025, there were **10.8 million shares** of common stock outstanding[2](index=2&type=chunk) [Part I. Financial Information](index=2&type=section&id=Part%20I.%20Financial%20Information) This part presents the company's unaudited condensed consolidated financial statements and management's analysis [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements%3A) This section presents the unaudited condensed consolidated financial statements of Genesco Inc. and its subsidiaries, including balance sheets, statements of operations, comprehensive loss, cash flows, and equity, along with accompanying notes for the specified interim periods [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This section presents the company's financial position, including assets, liabilities, and equity at specific dates Condensed Consolidated Balance Sheet Highlights (in thousands) | Metric | August 2, 2025 | February 1, 2025 | August 3, 2024 | | :--- | :--- | :--- | :--- | | Cash and cash equivalents | $40,989 | $34,007 | $45,855 | | Total current assets | $645,891 | $608,756 | $606,720 | | Total Assets | $1,421,925 | $1,335,536 | $1,383,751 | | Total current liabilities | $414,355 | $379,782 | $395,663 | | Total liabilities | $915,553 | $788,566 | $851,129 | | Total equity | $506,372 | $546,970 | $532,622 | [Condensed Consolidated Statements of Operations](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) This section details the company's revenues, expenses, and net loss over specific interim periods Condensed Consolidated Statements of Operations Highlights (in thousands, except per share amounts) | Metric | Three Months Ended Aug 2, 2025 | Three Months Ended Aug 3, 2024 | Six Months Ended Aug 2, 2025 | Six Months Ended Aug 3, 2024 | | :--- | :--- | :--- | :--- | :--- | | Net sales | $545,965 | $525,188 | $1,019,938 | $982,785 | | Gross margin | $249,949 | $245,639 | $471,130 | $461,920 | | Operating loss | $(14,440) | $(10,274) | $(42,585) | $(42,402) | | Net Loss | $(18,471) | $(9,992) | $(39,698) | $(34,339) | | Basic loss per common share | $(1.79) | $(0.91) | $(3.82) | $(3.14) | | Diluted loss per common share | $(1.79) | $(0.91) | $(3.82) | $(3.14) | [Condensed Consolidated Statements of Comprehensive Loss](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Loss) This section presents the company's net loss and other comprehensive income or loss components Condensed Consolidated Statements of Comprehensive Loss Highlights (in thousands) | Metric | Three Months Ended Aug 2, 2025 | Three Months Ended Aug 3, 2024 | Six Months Ended Aug 2, 2025 | Six Months Ended Aug 3, 2024 | | :--- | :--- | :--- | :--- | :--- | | Net loss | $(18,471) | $(9,992) | $(39,698) | $(34,339) | | Total other comprehensive income | $280 | $1,393 | $7,004 | $458 | | Comprehensive Loss | $(18,191) | $(8,599) | $(32,694) | $(33,881) | - Foreign currency translation adjustments significantly increased to **$6,811 thousand** for the six months ended August 2, 2025, compared to **$399 thousand** for the same period in 2024[16](index=16&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This section outlines the company's cash inflows and outflows from operating, investing, and financing activities Condensed Consolidated Statements of Cash Flows Highlights (Six Months Ended, in thousands) | Cash Flow Activity | August 2, 2025 | August 3, 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(14,693) | $(6,029) | | Net cash used in investing activities | $(33,580) | $(14,274) | | Net cash provided by financing activities | $54,886 | $30,922 | | Net increase in cash | $6,982 | $10,700 | | Cash at end of period | $40,989 | $45,855 | - Capital expenditures more than doubled to **$33,580 thousand** for the six months ended August 2, 2025, from **$14,274 thousand** in the prior year[19](index=19&type=chunk) [Condensed Consolidated Statements of Equity](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Equity) This section details changes in the company's equity, including retained earnings and accumulated other comprehensive loss Condensed Consolidated Statements of Equity Highlights (in thousands) | Metric | Balance August 2, 2025 | Balance August 3, 2024 | | :--- | :--- | :--- | | Total Equity | $506,372 | $532,622 | | Retained Earnings | $212,977 | $251,351 | | Accumulated Other Comprehensive Loss | $(38,420) | $(39,166) | | Shares repurchased (6 months) | $(12,566) | $(9,349) | [Notes to Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed disclosures and explanations for the figures presented in the condensed consolidated financial statements, covering significant accounting policies, segment information, and other relevant financial details [Note 1: Summary of Significant Accounting Policies](index=10&type=section&id=Note%201%20Summary%20of%20Significant%20Accounting%20Policies) This note describes the company's key accounting principles, business segments, and recent tax law impacts - Genesco operates four reportable business segments: Journeys Group, Schuh Group, Johnston & Murphy Group, and Genesco Brands Group, distributing footwear, apparel, and accessories through retail stores and e-commerce[24](index=24&type=chunk)[25](index=25&type=chunk) - The company is exiting the licensed Levi's brand business during Fiscal 2026 due to license expiration[25](index=25&type=chunk) - A new multi-year licensing agreement was signed with Kontoor Brands, Inc. for Wrangler footwear, with the first collection launching in Fall 2026[26](index=26&type=chunk) - The One Big Beautiful Bill Act (OBBBA) was signed into law on July 4, 2025, which is expected to materially decrease the U.S. current tax liability and effective income tax rate for Fiscal 2026[34](index=34&type=chunk) - The effective income tax rate for the first six months of Fiscal 2026 was **13.2%**, down from **28.5%** in Q1 Fiscal 2026 before the OBBBA enactment[34](index=34&type=chunk) [Note 2: Goodwill and Other Intangible Assets](index=12&type=section&id=Note%202%20Goodwill%20and%20Other%20Intangible%20Assets) This note provides details on the company's goodwill and other intangible assets Goodwill and Net Other Intangibles (in thousands) | Metric | August 2, 2025 | February 1, 2025 | | :--- | :--- | :--- | | Goodwill | $9,336 | $8,863 | | Net Other Intangibles | $27,408 | $26,059 | [Note 3: Inventories](index=13&type=section&id=Note%203%20Inventories) This note details the composition and valuation of the company's inventory balances Total Inventories (in thousands) | Metric | August 2, 2025 | February 1, 2025 | | :--- | :--- | :--- | | Wholesale finished goods | $80,610 | $82,784 | | Retail merchandise | $420,398 | $342,440 | | Total Inventories | $501,008 | $425,224 | [Note 4: Fair Value](index=13&type=section&id=Note%204%20Fair%20Value) This note presents the fair value measurements of the company's financial instruments Fair Value of Long-Term Debt (in thousands) | Metric | August 2, 2025 (Fair Value) | February 1, 2025 (Fair Value) | | :--- | :--- | :--- | | U.S. Revolver Borrowings | $57,775 | $— | | U.K. Revolver Borrowings | $13,289 | $— | | Total Long-Term Debt | $71,064 | $— | - The company held **$6.7 million** in investments measured using Level 1 inputs within the fair value hierarchy as of August 2, 2025[38](index=38&type=chunk) [Note 5: Long-Term Debt](index=13&type=section&id=Note%205%20Long-Term%20Debt) This note outlines the company's long-term debt obligations and available credit facilities - Total revolver borrowings outstanding as of August 2, 2025, were **$70.952 million**, comprising **$53.4 million** U.S., **$4.3 million** CAD, and **$13.3 million** U.K. borrowings[39](index=39&type=chunk) - Excess availability under the Credit Facility was **$268.6 million** at August 2, 2025[39](index=39&type=chunk) [Note 6: Earnings Per Share](index=14&type=section&id=Note%206%20Earnings%20Per%20Share) This note details the calculation of basic and diluted earnings per share and share repurchase activity Weighted-Average Shares Outstanding (in thousands) | Period | August 2, 2025 | August 3, 2024 | | :--- | :--- | :--- | | Three Months Ended (Basic & Diluted) | 10,294 | 10,942 | | Six Months Ended (Basic & Diluted) | 10,394 | 10,936 | - The company repurchased **604,531 shares** of common stock for **$12.6 million** (average **$20.79/share**) during the first six months of Fiscal 2026[41](index=41&type=chunk) - As of August 2, 2025, **$29.8 million** remained under the expanded share repurchase authorization[41](index=41&type=chunk) [Note 7: Legal Proceedings](index=14&type=section&id=Note%207%20Legal%20Proceedings) This note discloses information regarding the company's legal and environmental contingencies - The company has accrued **$2.0 million** for environmental contingencies as of August 2, 2025[43](index=43&type=chunk) - Future obligations related to environmental matters are not expected to have a material effect on consolidated financial condition or results of operations[42](index=42&type=chunk)[44](index=44&type=chunk) [Note 8: Business Segment Information](index=16&type=section&id=Note%208%20Business%20Segment%20Information) This note provides detailed financial performance data for each of the company's operating segments Segment Sales and Operating Income (Loss) - Three Months Ended August 2, 2025 (in thousands) | Segment | Sales | Segment Operating Income (Loss) | | :--- | :--- | :--- | | Journeys Group | $318,189 | $(4,999) | | Schuh Group | $126,595 | $(11) | | Johnston & Murphy Group | $68,789 | $(1,782) | | Genesco Brands Group | $32,392 | $653 | | Corporate & Other | $— | $(8,301) | | Consolidated | $545,965 | $(14,440) | Segment Sales and Operating Income (Loss) - Six Months Ended August 2, 2025 (in thousands) | Segment | Sales | Segment Operating Income (Loss) | | :--- | :--- | :--- | | Journeys Group | $590,823 | $(20,282) | | Schuh Group | $222,510 | $(6,142) | | Johnston & Murphy Group | $145,628 | $(1,282) | | Genesco Brands Group | $60,977 | $1,351 | | Corporate & Other | $— | $(16,230) | | Consolidated | $1,019,938 | $(42,585) | - North America accounted for **77%** of net sales in Q2 FY26 and **78%** in the first six months of FY26, with the U.K. (including ROI) making up the remainder[45](index=45&type=chunk)[49](index=49&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=23&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the company's financial condition, results of operations, and cash flows, offering insights into performance drivers, key trends, and future outlook [Summary of Results of Operations](index=23&type=section&id=Summary%20of%20Results%20of%20Operations) This section summarizes the company's financial performance, including sales, margins, and net loss for the period - Net sales increased **4.0%** to **$546.0 million** in Q2 FY26, driven by a **4%** increase in comparable sales (**5%** store, **1%** e-commerce) and favorable foreign exchange[55](index=55&type=chunk) - Gross margin decreased as a percentage of net sales from **46.8%** in Q2 FY25 to **45.8%** in Q2 FY26, primarily due to increased promotional activity at Schuh Group and lower margins at Genesco Brands Group[56](index=56&type=chunk) - Operating margin was **(2.6)%** in Q2 FY26, down from **(2.0)%** in Q2 FY25, reflecting decreased gross margin as a percentage of net sales, partially offset by decreased expenses[58](index=58&type=chunk) - Net loss in Q2 FY26 was **$18.5 million**, or **$1.79** diluted loss per share, compared to a net loss of **$10.0 million**, or **$0.91** diluted loss per share, in Q2 FY25[61](index=61&type=chunk) - The effective income tax rate in Q2 FY26 was **(15.0)%**, compared to **15.2%** in Q2 FY25, due to the impact of the OBBBA tax law changes[60](index=60&type=chunk) [Critical Accounting Estimates](index=23&type=section&id=Critical%20Accounting%20Estimates) This section discusses the company's significant accounting estimates and policies - There have been no significant changes in critical accounting estimates or significant accounting policies since the end of Fiscal 2025[64](index=64&type=chunk) [Key Performance Indicators](index=25&type=section&id=Key%20Performance%20Indicators) This section defines and lists the primary metrics used to evaluate the company's operational performance - Key performance indicators include comparable sales, net sales, gross margin, operating income, and operating margin[65](index=65&type=chunk) - Comparable sales are defined as sales from stores open longer than one year ('same store sales') and sales from websites/catalogs operated longer than one year ('comparable e-commerce sales')[66](index=66&type=chunk) [Results of Operations – Second Quarter of Fiscal 2026 Compared to Second Quarter of Fiscal 2025](index=25&type=section&id=Results%20of%20Operations%20%E2%80%93%20Second%20Quarter%20of%20Fiscal%202026%20Compared%20to%20Second%20Quarter%20of%20Fiscal%202025) This section provides a detailed analysis of the financial performance of each business segment and corporate expenses for the second quarter of Fiscal 2026 compared to the prior year [Journeys Group](index=25&type=section&id=Journeys%20Group%20%28Q2%29) This section analyzes the Journeys Group's sales, gross margin, and operating income for the second quarter Journeys Group Performance (Three Months Ended, in thousands) | Metric | August 2, 2025 | August 3, 2024 | % Change | | :--- | :--- | :--- | :--- | | Net sales | $318,189 | $298,846 | 6.5% | | Gross margin % of sales | 48.8% | 48.6% | +0.2 pp | | Operating loss | $(4,999) | $(11,151) | 55.2% | | Operating margin | (1.6)% | (3.7)% | +2.1 pp | - Comparable sales increased **9%**, driven by strength in product assortment across athletic and casual brands, with noteworthy gains in conversion and transaction size[68](index=68&type=chunk) - Operating margin improved by **210 basis points**, primarily due to a **190 basis point** decrease in selling and administrative expenses as a percentage of net sales, reflecting expense leverage and cost savings initiatives[70](index=70&type=chunk) - The group operated **984 stores** at the end of Q2 FY26, a decrease from **1,039 stores** in Q2 FY25, reflecting store optimization efforts[69](index=69&type=chunk) [Schuh Group](index=27&type=section&id=Schuh%20Group%20%28Q2%29) This section analyzes the Schuh Group's sales, gross margin, and operating income for the second quarter Schuh Group Performance (Three Months Ended, in thousands) | Metric | August 2, 2025 | August 3, 2024 | % Change | | :--- | :--- | :--- | :--- | | Net sales | $126,595 | $124,561 | 1.6% | | Gross margin % of sales | 38.9% | 42.1% | -3.2 pp | | Operating income (loss) | $(11) | $7,339 | NM | | Operating margin | (0.0)% | 5.9% | -5.9 pp | - Net sales included a favorable foreign exchange impact of **$6.8 million**, but total comparable sales decreased **4%** (**4%** decrease on a local currency basis) due to a challenging U.K. retail environment[71](index=71&type=chunk) - Operating margin decreased by **590 basis points**, driven by a **320 basis point** decrease in gross margin (due to increased promotional activity and brand mix changes) and a **270 basis point** increase in selling and administrative expenses as a percentage of net sales (due to deleverage on lower store sales)[72](index=72&type=chunk) - E-commerce remains a key channel, accounting for over **40%** of sales[71](index=71&type=chunk) [Johnston & Murphy Group](index=27&type=section&id=Johnston%20%26%20Murphy%20Group%20%28Q2%29) This section analyzes the Johnston & Murphy Group's sales, gross margin, and operating income for the second quarter Johnston & Murphy Group Performance (Three Months Ended, in thousands) | Metric | August 2, 2025 | August 3, 2024 | % Change | | :--- | :--- | :--- | :--- | | Net sales | $68,789 | $71,037 | (3.2)% | | Gross margin % of sales | 54.0% | 52.5% | +1.5 pp | | Operating loss | $(1,782) | $(403) | (342.2)% | | Operating margin | (2.6)% | (0.6)% | -2.0 pp | - Net sales decreased primarily due to decreased wholesale sales and a **3%** decrease in average store count, despite a **1%** increase in total comparable sales[73](index=73&type=chunk) - Operating margin decreased by **200 basis points**, mainly due to a **360 basis point** increase in selling and administrative expenses as a percentage of net sales (deleverage from decreased revenue, higher depreciation, credit card, and occupancy expenses)[76](index=76&type=chunk) - Gross margin as a percentage of net sales increased by **150 basis points**, reflecting improved costs from sourcing optimization, lower retail markdowns, and price increases[76](index=76&type=chunk) [Genesco Brands Group](index=29&type=section&id=Genesco%20Brands%20Group%20%28Q2%29) This section analyzes the Genesco Brands Group's sales, gross margin, and operating income for the second quarter Genesco Brands Group Performance (Three Months Ended, in thousands) | Metric | August 2, 2025 | August 3, 2024 | % Change | | :--- | :--- | :--- | :--- | | Net sales | $32,392 | $30,744 | 5.4% | | Gross margin % of sales | 25.3% | 34.8% | -9.5 pp | | Operating income | $653 | $2,672 | (75.6)% | | Operating margin | 2.0% | 8.7% | -6.7 pp | - Net sales increased primarily due to higher sales of Levi's and private label footwear, partially offset by decreased Dockers and other licensed footwear sales[77](index=77&type=chunk) - Operating margin decreased by **670 basis points**, mainly due to a significant decrease in gross margin as a percentage of net sales from higher closeout sales related to license exits and tariff impacts[78](index=78&type=chunk) [Corporate, Interest Expenses and Other Charges](index=29&type=section&id=Corporate%2C%20Interest%20Expenses%20and%20Other%20Charges%20%28Q2%29) This section details corporate overhead, net interest expense, and other unallocated charges for the second quarter - Corporate and other expense was **$8.3 million** in Q2 FY26, a slight decrease from **$8.7 million** in Q2 FY25, excluding asset impairment and severance charges[79](index=79&type=chunk) - Net interest expense increased **8.5%** to **$1.5 million** in Q2 FY26, primarily due to increased revolver borrowings in the U.K.[80](index=80&type=chunk) [Results of Operations – First Six Months of Fiscal 2026 Compared to First Six Months of Fiscal 2025](index=31&type=section&id=Results%20of%20Operations%20%E2%80%93%20First%20Six%20Months%20of%20Fiscal%202026%20Compared%20to%20First%20Six%20Months%20of%20Fiscal%202025) This section provides a detailed analysis of the financial performance of each business segment and corporate expenses for the first six months of Fiscal 2026 compared to the prior year [Journeys Group](index=33&type=section&id=Journeys%20Group%20%286M%29) This section analyzes the Journeys Group's sales, gross margin, and operating income for the first six months Journeys Group Performance (Six Months Ended, in thousands) | Metric | August 2, 2025 | August 3, 2024 | % Change | | :--- | :--- | :--- | :--- | | Net sales | $590,823 | $558,291 | 5.8% | | Gross margin % of sales | 48.8% | 48.9% | -0.1 pp | | Operating loss | $(20,282) | $(29,973) | 32.3% | | Operating margin | (3.4)% | (5.4)% | +2.0 pp | - Comparable sales increased **9%**, with gains in both store and e-commerce channels, driven by strong product assortment and improved conversion and transaction size[88](index=88&type=chunk) - Operating margin improved by **200 basis points**, primarily due to decreased selling and administrative expenses as a percentage of net sales, reflecting expense leverage from increased revenue and cost savings initiatives[89](index=89&type=chunk) [Schuh Group](index=33&type=section&id=Schuh%20Group%20%286M%29) This section analyzes the Schuh Group's sales, gross margin, and operating income for the first six months Schuh Group Performance (Six Months Ended, in thousands) | Metric | August 2, 2025 | August 3, 2024 | % Change | | :--- | :--- | :--- | :--- | | Net sales | $222,510 | $216,910 | 2.6% | | Gross margin % of sales | 39.3% | 41.8% | -2.5 pp | | Operating income (loss) | $(6,142) | $1,443 | NM | | Operating margin | (2.8)% | 0.7% | -3.5 pp | - Net sales increased **2.6%**, including a **$9.1 million** favorable foreign exchange impact, but total comparable sales decreased **2%** (**2%** decrease on a local currency basis) due to a challenging U.K. retail environment[90](index=90&type=chunk) - Operating margin decreased by **350 basis points**, primarily due to decreased gross margin (increased promotional activity and brand mix changes) and increased selling and administrative expenses as a percentage of net sales (deleverage)[91](index=91&type=chunk) - E-commerce accounted for over **40%** of sales[90](index=90&type=chunk) [Johnston & Murphy Group](index=35&type=section&id=Johnston%20%26%20Murphy%20Group%20%286M%29) This section analyzes the Johnston & Murphy Group's sales, gross margin, and operating income for the first six months Johnston & Murphy Group Performance (Six Months Ended, in thousands) | Metric | August 2, 2025 | August 3, 2024 | % Change | | :--- | :--- | :--- | :--- | | Net sales | $145,628 | $150,244 | (3.1)% | | Gross margin % of sales | 53.8% | 53.2% | +0.6 pp | | Operating income (loss) | $(1,282) | $1,952 | NM | | Operating margin | (0.9)% | 1.3% | -2.2 pp | - Net sales decreased **3.1%** due to lower same-store sales, decreased wholesale sales, and a **3%** decrease in average store count, while total comparable sales were flat[92](index=92&type=chunk) - Operating margin decreased by **220 basis points**, primarily due to increased selling and administrative expenses as a percentage of net sales (deleverage from decreased revenue, higher depreciation, and compensation expenses, and increased marketing)[93](index=93&type=chunk) - Gross margin as a percentage of net sales increased, reflecting improved initial margins from sourcing optimization and price increases[93](index=93&type=chunk) [Genesco Brands Group](index=35&type=section&id=Genesco%20Brands%20Group%20%286M%29) This section analyzes the Genesco Brands Group's sales, gross margin, and operating income for the first six months Genesco Brands Group Performance (Six Months Ended, in thousands) | Metric | August 2, 2025 | August 3, 2024 | % Change | | :--- | :--- | :--- | :--- | | Net sales | $60,977 | $57,340 | 6.3% | | Gross margin % of sales | 27.8% | 32.4% | -4.6 pp | | Operating income | $1,351 | $1,686 | (19.9)% | | Operating margin | 2.2% | 2.9% | -0.7 pp | - Net sales increased **6.3%**, primarily driven by increased sales of Levi's and private label footwear[94](index=94&type=chunk) - Operating margin decreased by **70 basis points**, mainly due to decreased gross margin as a percentage of net sales from higher closeout sales related to license exits, tariff impacts, and unfavorable sales mix[95](index=95&type=chunk) [Corporate, Interest Expenses and Other Charges](index=36&type=section&id=Corporate%2C%20Interest%20Expenses%20and%20Other%20Charges%20%286M%29) This section details corporate overhead, net interest expense, and other unallocated charges for the first six months - Corporate and other expense was **$16.2 million** in the first six months of Fiscal 2026, a decrease from **$17.5 million** in the prior year, excluding asset impairment and severance charges, primarily due to decreased professional fees and performance-based compensation[96](index=96&type=chunk) - Net interest expense increased **25.2%** to **$2.8 million** in the first six months of Fiscal 2026, primarily due to increased revolver borrowings in the U.K. and North America[97](index=97&type=chunk) [Liquidity and Capital Resources](index=36&type=section&id=Liquidity%20and%20Capital%20Resources) This section discusses the company's liquidity sources, working capital trends, and future capital needs, including cash flow changes, credit facilities, tax refunds, capital expenditures, and share repurchases [Working Capital](index=36&type=section&id=Working%20Capital) This section discusses the company's working capital trends and cash flow activities - The business is seasonal, with working capital investment typically peaking in summer and fall for back-to-school and holiday selling seasons[98](index=98&type=chunk) Cash Flow Changes (Six Months Ended, in thousands) | Cash Flow Activity | August 2, 2025 | August 3, 2024 | Increase (Decrease) | | :--- | :--- | :--- | :--- | | Net cash used in operating activities | $(14,693) | $(6,029) | $(8,664) | | Net cash used in investing activities | $(33,580) | $(14,274) | $(19,306) | | Net cash provided by financing activities | $54,886 | $30,922 | $23,964 | | Net increase in cash | $6,982 | $10,700 | $(3,718) | - Cash used in investing activities increased by **$19.3 million**, primarily due to increased capital expenditures for retail stores[100](index=100&type=chunk) - Cash provided by financing activities increased by **$24.0 million**, reflecting increased net borrowings, partially offset by increased share repurchases[101](index=101&type=chunk) [Sources of Liquidity and Future Capital Needs](index=36&type=section&id=Sources%20of%20Liquidity%20and%20Future%20Capital%20Needs) This section identifies the company's primary liquidity sources and projected capital requirements - Principal sources of liquidity are cash flow from operations, cash on hand, and credit facilities[102](index=102&type=chunk) - As of August 2, 2025, the company had **$53.4 million** in U.S. revolver borrowings, **$4.3 million** in Canadian revolver borrowings, and **$13.3 million** in U.K. revolver borrowings[103](index=103&type=chunk) - The company received **$58.3 million** of a **$60.2 million** U.S. Federal tax refund during Q2 FY26, with the remaining **$1.9 million** expected within 12 months[107](index=107&type=chunk) - Management believes current liquidity sources will be sufficient to support needs in Fiscal 2026 and the foreseeable future[106](index=106&type=chunk) [Contractual Obligations](index=38&type=section&id=Contractual%20Obligations) This section outlines the company's contractual commitments and their changes over time - Contractual obligations increased **21%** at August 2, 2025, compared to February 1, 2025, primarily due to increased long-term debt and lease obligations[108](index=108&type=chunk) [Capital Expenditures](index=38&type=section&id=Capital%20Expenditures) This section details the company's planned capital investments for the current fiscal year - Total capital expenditures for Fiscal 2026 are expected to be approximately **$55 million to $65 million**, with **75%** allocated to new stores and renovations[109](index=109&type=chunk) [Common Stock Repurchases](index=38&type=section&id=Common%20Stock%20Repurchases) This section reports on the company's share repurchase activities and remaining authorization - The company repurchased **604,531 shares** of common stock for **$12.6 million** during the first six months of Fiscal 2026[110](index=110&type=chunk) - As of August 2, 2025, **$29.8 million** remained under the expanded share repurchase authorization[110](index=110&type=chunk) [Environmental and Other Contingencies](index=38&type=section&id=Environmental%20and%20Other%20Contingencies) This section addresses potential financial impacts from environmental and legal contingencies - The company is subject to loss contingencies related to environmental and legal matters, as disclosed in Note 7 of the financial statements[111](index=111&type=chunk) [New Accounting Pronouncements (MD&A)](index=38&type=section&id=New%20Accounting%20Pronouncements%20%28MD%26A%29) This section refers to disclosures on new accounting standards in the financial statements notes - Descriptions of recently issued and adopted accounting pronouncements are included in Note 1 to the Condensed Consolidated Financial Statements[112](index=112&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=39&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) This section incorporates by reference the market risk disclosures from the company's Annual Report on Form 10-K for Fiscal 2025, stating no material changes to market risk exposure - There have been no material changes to the company's exposure to market risks since the Annual Report on Form 10-K for Fiscal 2025[113](index=113&type=chunk) [Item 4. Controls and Procedures](index=39&type=section&id=Item%204.%20Controls%20and%20Procedures) This section confirms the effectiveness of the company's disclosure controls and procedures as of August 2, 2025, and reports no material changes in internal control over financial reporting during the second quarter of Fiscal 2026 [Evaluation of Disclosure Controls and Procedures](index=39&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) This section confirms the effectiveness of the company's disclosure controls and procedures - The principal executive officer and principal financial officer concluded that disclosure controls and procedures were effective as of August 2, 2025[115](index=115&type=chunk) [Changes in Internal Control Over Financial Reporting](index=39&type=section&id=Changes%20in%20Internal%20Control%20Over%20Financial%20Reporting) This section reports on any material changes to the company's internal control over financial reporting - No changes in internal control over financial reporting occurred during Q2 FY26 that materially affected, or are reasonably likely to materially affect, internal control over financial reporting[116](index=116&type=chunk) [Part II. Other Information](index=40&type=section&id=Part%20II.%20Other%20Information) This part includes additional disclosures on legal matters, risk factors, equity sales, and exhibits [Item 1. Legal Proceedings](index=40&type=section&id=Item%201.%20Legal%20Proceedings%20%28Part%20II%29) This section incorporates by reference the legal proceedings information from Note 7 of the Condensed Consolidated Financial Statements, which states that no material effect on financial condition or results of operations is expected from current legal matters - Information regarding legal proceedings is incorporated by reference from Note 7 to the Condensed Consolidated Financial Statements[119](index=119&type=chunk) [Item 1A. Risk Factors](index=40&type=section&id=Item%201A.%20Risk%20Factors) This section refers to the risk factors outlined in the company's Annual Report on Form 10-K for Fiscal 2025 and highlights new or updated risks, particularly concerning government actions and tariffs - Government actions and regulations, including tariffs, export restrictions, and other trade protection measures, may materially increase costs, reduce margins, and potentially reduce consumer demand[122](index=122&type=chunk) - The company is actively mitigating cost pressure by diversifying suppliers, re-sourcing to lower-tariff countries, identifying cost reductions, and planning strategic price increases[122](index=122&type=chunk) - The specific impact of current and potential tariffs on business, results of operations, cash flows, and financial condition is uncertain but could be material[123](index=123&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=41&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section details the company's equity security repurchases, specifically shares withheld for taxes, and the remaining authorization under its share repurchase program - **23,765 shares** were withheld from vested restricted stock to satisfy tax requirements in July 2025, at an average price of **$20.83 per share**[125](index=125&type=chunk) - As of August 2, 2025, **$29.755 million** remained under the share repurchase authorization[125](index=125&type=chunk) [Item 5. Other Information](index=41&type=section&id=Item%205.%20Other%20Information) This section states that no directors or officers adopted or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the second quarter of Fiscal 2026 - No directors or officers adopted or terminated any Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the second quarter of Fiscal 2026[126](index=126&type=chunk) [Item 6. Exhibits](index=43&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed as part of the Form 10-Q, including certifications, performance share unit agreements, and XBRL formatted financial data - Exhibits include certifications from the CEO and CFO pursuant to the Sarbanes-Oxley Act[127](index=127&type=chunk) - The financial statements are formatted in Inline XBRL (eXtensible Business Reporting Language)[127](index=127&type=chunk) [Signature](index=44&type=section&id=Signature) This section provides the official signature and date of filing for the Form 10-Q report - The report was signed by Cassandra E. Harris, Senior Vice President - Finance and Chief Financial Officer, on September 11, 2025[130](index=130&type=chunk)

[PART I – FINANCIAL INFORMATION](index=4&type=section&id=PART%20I%20%E2%80%93%20FINANCIAL%20INFORMATION) This section provides the unaudited condensed consolidated financial information, including statements, notes, management's discussion, market risk, and controls [Item 1. Financial Statements (Unaudited)](index=4&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) This section presents the unaudited condensed consolidated financial statements, including balance sheets, statements of operations and comprehensive income, and cash flows, along with detailed notes explaining the basis of presentation, revenue recognition, leases, and other financial details for the periods ended August 2, 2025, and August 3, 2024 [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This section provides a snapshot of the company's financial position, detailing assets, liabilities, and equity at specific reporting dates Condensed Consolidated Balance Sheet Highlights (Dollars in thousands) | Metric | August 2, 2025 | February 1, 2025 | August 3, 2024 | | :-------------------------- | :------------- | :--------------- | :------------- | | Cash and cash equivalents | $39,108 | $27,758 | $25,163 | | Inventories, net | $81,758 | $69,775 | $66,977 | | Total current assets | $144,418 | $126,298 | $117,473 | | Total Assets | $318,238 | $289,956 | $279,459 | | Total current liabilities | $81,072 | $79,394 | $80,313 | | Total stockholders' equity | $155,395 | $139,082 | $125,791 | [Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Income%20(Loss)) This section outlines the company's financial performance over specific periods, including revenues, gross profit, net income, and earnings per share Condensed Consolidated Statements of Operations Highlights (Dollars in thousands, except per share data) | Metric | 13 Weeks Ended Aug 2, 2025 | 13 Weeks Ended Aug 3, 2024 | 26 Weeks Ended Aug 2, 2025 | 26 Weeks Ended Aug 3, 2024 | | :---------------------------------- | :------------------------- | :------------------------- | :------------------------- | :------------------------- | | Total revenues | $124,247 | $111,798 | $252,642 | $226,528 | | Consolidated gross profit | $71,511 | $60,569 | $144,498 | $122,734 | | Net income | $12,367 | $8,778 | $27,686 | $20,237 | | Basic income per common share | $0.94 | $0.64 | $2.11 | $1.47 | | Diluted income per common share | $0.94 | $0.64 | $2.11 | $1.46 | - Total revenues increased by **11.1%** for the thirteen weeks ended August 2, 2025, and by **11.5%** for the twenty-six weeks ended August 2, 2025, compared to the prior year periods[14](index=14&type=chunk) - Net income increased by **40.9%** for the thirteen weeks ended August 2, 2025, and by **36.8%** for the twenty-six weeks ended August 2, 2025, compared to the prior year periods[14](index=14&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This section details the cash inflows and outflows from operating, investing, and financing activities for the reported periods Condensed Consolidated Statements of Cash Flows Highlights (Dollars in thousands) | Metric | 26 Weeks Ended Aug 2, 2025 | 26 Weeks Ended Aug 3, 2024 | | :-------------------------------------- | :------------------------- | :------------------------- | | Net cash provided by operating activities | $32,017 | $12,413 | | Net cash used in investing activities | $(6,328) | $(5,700) | | Net cash used in financing activities | $(14,425) | $(25,867) | | Increase/(Decrease) in cash, cash equivalents, and restricted cash | $11,350 | $(19,164) | | Cash, cash equivalents and restricted cash, end of period | $39,108 | $25,163 | - Net cash provided by operating activities increased by **$19.6 million** for the twenty-six weeks ended August 2, 2025, primarily due to increased net income and favorable changes in working capital[17](index=17&type=chunk) - Net cash used in financing activities decreased by **$11.4 million**, mainly due to a reduction in share repurchases compared to the prior year[17](index=17&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=7&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanations and additional information supporting the condensed consolidated financial statements [Note 1. Basis of Presentation](index=7&type=section&id=Note%201.%20Basis%20of%20Presentation) This note explains the accounting principles and conventions used in preparing the unaudited condensed consolidated financial statements - The condensed consolidated financial statements are unaudited and prepared in accordance with SEC rules, with certain GAAP disclosures condensed or omitted[19](index=19&type=chunk) - Due to the seasonal nature of operations, results from a single reporting period are not indicative of full-year results[19](index=19&type=chunk) [Note 2. Revenue](index=8&type=section&id=Note%202.%20Revenue) This note details the company's revenue recognition policies and segment-wise revenue breakdown - The Direct-to-Consumer (DTC) segment accounts for **92% of consolidated revenue** for the second quarter of fiscal 2025[23](index=23&type=chunk) - Revenue from gift cards is deferred until redemption, with unredeemed gift card breakage revenue recorded based on historical redemption patterns[26](index=26&type=chunk) - A hypothetical **1% change** in the fiscal 2024 gift card breakage rate would have resulted in a **$1.1 million change** in breakage revenue[26](index=26&type=chunk) [Note 3. Leases](index=10&type=section&id=Note%203.%20Leases) This note provides information on the company's operating lease arrangements, costs, and right-of-use assets Operating Lease Costs (Dollars in thousands) | Metric | 13 Weeks Ended Aug 2, 2025 | 13 Weeks Ended Aug 3, 2024 | 26 Weeks Ended Aug 2, 2025 | 26 Weeks Ended Aug 3, 2024 | | :---------------------- | :------------------------- | :------------------------- | :------------------------- | :------------------------- | | Operating lease costs | $10,765 | $10,021 | $21,208 | $19,605 | | Variable lease costs | $2,509 | $2,464 | $4,889 | $4,655 | | Short term lease costs | $21 | $33 | $49 | $58 | | **Total Operating Lease costs** | **$13,295** | **$12,518** | **$26,146** | **$24,318** | - The weighted-average remaining operating lease term was **6.1 years** as of August 2, 2025, up from 5.6 years in the prior year[38](index=38&type=chunk) - The operating lease right-of-use asset increased to **$101.0 million** as of August 2, 2025, from $94.2 million in the prior year, driven by new stores and longer-term extensions[39](index=39&type=chunk) [Note 4. Other Assets](index=12&type=section&id=Note%204.%20Other%20Assets) This note details the composition of prepaid expenses, other current assets, and other non-current assets Prepaid Expenses and Other Current Assets (Dollars in thousands) | Metric | August 2, 2025 | February 1, 2025 | August 3, 2024 | | :-------------------------------- | :------------- | :--------------- | :------------- | | Prepaid occupancy | $3,757 | $2,213 | $3,109 | | Prepaid insurance | $451 | $1,248 | $693 | | Prepaid gift card fees | $388 | $493 | $600 | | Prepaid royalties | $203 | $736 | $195 | | Prepaid taxes | $143 | $1,512 | $526 | | Other | $5,084 | $6,467 | $8,135 | | **Total** | **$10,026** | **$12,669** | **$13,258** | Other Non-Current Assets (Dollars in thousands) | Metric | August 2, 2025 | February 1, 2025 | August 3, 2024 | | :-------------------------- | :------------- | :--------------- | :------------- | | Entertainment production asset | $4,336 | $4,222 | $4,562 | | Deferred compensation | $1,549 | $1,684 | $1,017 | | Other | $136 | $195 | $252 | | **Total** | **$6,021** | **$6,101** | **$5,831** | [Note 5. Accrued Expenses](index=12&type=section&id=Note%205.%20Accrued%20Expenses) This note outlines the various categories of accrued expenses, including wages, taxes, and rent Accrued Expenses (Dollars in thousands) | Metric | August 2, 2025 | February 1, 2025 | August 3, 2024 | | :-------------------------------- | :------------- | :--------------- | :------------- | | Accrued wages, bonuses and related expenses | $12,122 | $13,268 | $9,896 | | Current income taxes payable | $2,156 | $580 | $35 | | Sales and value added taxes payable | $2,597 | $1,359 | $2,372 | | Accrued rent and related expenses | $885 | $1,002 | $1,040 | | Accrued expense - other | $1,350 | $0 | $0 | | **Total** | **$19,110** | **$16,209** | **$13,343** | [Note 6. Stock-based Compensation](index=13&type=section&id=Note%206.%20Stock-based%20Compensation) This note provides details on stock-based compensation expense, unrecognized compensation, and vested shares - Stock-based compensation expense included in SG&A was **$0.7 million** for the thirteen weeks ended August 2, 2025 (vs. $0.6 million in 2024) and **$1.2 million** for the twenty-six weeks ended August 2, 2025 (vs. $1.0 million in 2024)[51](index=51&type=chunk) - As of August 2, 2025, there was **$6.4 million** of total unrecognized compensation expense related to unvested restricted stock awards, expected to be recognized over a weighted-average period of **2.1 years**[51](index=51&type=chunk) - The total fair value of shares vested during the twenty-six weeks ended August 2, 2025, was **$2.5 million**, compared to $2.2 million in the prior year[53](index=53&type=chunk) [Note 7. Income Taxes](index=14&type=section&id=Note%207.%20Income%20Taxes) This note explains the company's effective tax rates and factors influencing tax expense Effective Tax Rates | Period | August 2, 2025 | August 3, 2024 | | :---------------------- | :------------- | :------------- | | 13 weeks ended | 19.3% | 24.0% | | 26 weeks ended | 20.8% | 23.8% | - The fiscal 2025 effective tax rate differed from the statutory rate of **21%** primarily due to state income tax expense offset by the tax impact of equity awards vesting, foreign-derived intangible income deduction, and discrete benefits from a prior period tax position settlement[56](index=56&type=chunk) - The 'One Big Beautiful Bill Act' (OBBB), signed July 4, 2025, is expected to have an immaterial impact on FY25 and FY26 effective tax rates[55](index=55&type=chunk) [Note 8. Stockholders' Equity](index=15&type=section&id=Note%208.%20Stockholders'%20Equity) This note details changes in stockholders' equity, including net income, share repurchases, and dividends Stockholders' Equity Changes (Dollars in thousands) | Metric | 13 Weeks Ended Aug 2, 2025 | 13 Weeks Ended Aug 3, 2024 | 26 Weeks Ended Aug 2, 2025 | 26 Weeks Ended Aug 3, 2024 | | :---------------------- | :------------------------- | :------------------------- | :------------------------- | :------------------------- | | Balance, beginning | $148,682 | $128,341 | $139,082 | $129,662 | | Net income | $12,367 | $8,778 | $27,686 | $20,237 | | Share repurchase | $(3,115) | $(9,149) | $(7,323) | $(18,347) | | Cash dividends | $(2,905) | $(2,755) | $(5,796) | $(5,565) | | Balance, ending | $155,395 | $125,791 | $155,395 | $125,791 | - The Company utilized **$7.3 million** in cash to repurchase **167,585 shares** during the twenty-six weeks ended August 2, 2025, under its September 2024 Stock Repurchase Program[58](index=58&type=chunk) - As of September 8, 2025, **$80.0 million** remained available for future repurchases under the September 2024 Stock Repurchase Program[58](index=58&type=chunk) [Note 9. Income per Share](index=16&type=section&id=Note%209.%20Income%20per%20Share) This note presents the basic and diluted income per common share for the reported periods Income per Common Share | Metric | 13 Weeks Ended Aug 2, 2025 | 13 Weeks Ended Aug 3, 2024 | 26 Weeks Ended Aug 2, 2025 | 26 Weeks Ended Aug 3, 2024 | | :-------------------------- | :------------------------- | :------------------------- | :------------------------- | :------------------------- | | Basic net income per common share | $0.94 | $0.64 | $2.11 | $1.47 | | Diluted net income per common share | $0.94 | $0.64 | $2.11 | $1.46 | [Note 10. Comprehensive Income](index=16&type=section&id=Note%2010.%20Comprehensive%20Income) This note explains the components of comprehensive income, primarily foreign currency translation adjustments - The difference between comprehensive income and net income is solely due to foreign currency translation adjustments on subsidiaries' balance sheets[61](index=61&type=chunk) - There were no reclassifications out of accumulated other comprehensive loss for the thirteen weeks ended August 2, 2025, and August 3, 2024[61](index=61&type=chunk) [Note 11. Segment Information](index=17&type=section&id=Note%2011.%20Segment%20Information) This note provides a breakdown of total revenue by reportable segment and geographic area Total Revenue by Reportable Segment (Dollars in thousands) | Segment | 13 Weeks Ended Aug 2, 2025 | 13 Weeks Ended Aug 3, 2024 | 26 Weeks Ended Aug 2, 2025 | 26 Weeks Ended Aug 3, 2024 | | :------------------------ | :------------------------- | :------------------------- | :------------------------- | :------------------------- | | Direct-to-Consumer | $114,635 | $103,455 | $234,224 | $211,323 | | Commercial | $8,629 | $7,294 | $16,251 | $13,278 | | International Franchising | $983 | $1,049 | $2,167 | $1,927 | | **Total Revenue** | **$124,247** | **$111,798** | **$252,642** | **$226,528** | Net Sales to External Customers by Geographic Area (Dollars in thousands) | Geographic Area | 13 Weeks Ended Aug 2, 2025 | 13 Weeks Ended Aug 3, 2024 | 26 Weeks Ended Aug 2, 2025 | 26 Weeks Ended Aug 3, 2024 | | :---------------------- | :------------------------- | :------------------------- | :------------------------- | :------------------------- | | North America | $107,066 | $96,766 | $218,339 | $196,217 | | Europe | $15,775 | $14,012 | $31,402 | $28,461 | | Other | $1,406 | $1,020 | $2,901 | $1,850 | | **Total Net Sales** | **$124,247** | **$111,798** | **$252,642** | **$226,528** | [Note 12. Contingencies](index=20&type=section&id=Note%2012.%20Contingencies) This note discusses ongoing legal disputes and their potential financial impact on the company - The Company is involved in an ongoing dispute with the U.K. customs authority (HMRC) regarding duty assessments since 2012[68](index=68&type=chunk) - As of August 2, 2025, the gross receivable balance related to the HMRC matter was **$5.1 million**, with a reserve of **$3.6 million**, resulting in a net receivable of **$1.5 million**[68](index=68&type=chunk) - Management believes the outcome of this dispute will not have a material adverse impact on the Company's results of operations, liquidity, or financial position[68](index=68&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=21&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides an overview of the company's business, recent updates, and a detailed analysis of its financial performance for the thirteen and twenty-six weeks ended August 2, 2025, compared to the prior year. It also discusses liquidity, capital resources, seasonality, inflation, and critical accounting estimates [Cautionary Notice Regarding Forward-Looking Statements](index=21&type=section&id=Cautionary%20Notice%20Regarding%20Forward-Looking%20Statements) This section warns that the report contains forward-looking statements subject to risks and uncertainties that could cause actual results to differ materially - The report contains forward-looking statements subject to risks and uncertainties, which could cause actual results to differ materially[70](index=70&type=chunk) - Key risks include global economic conditions, inflation, consumer spending, tariffs, competition, supply chain disruptions, and the ability to manage store leases and technology[70](index=70&type=chunk) [Business Overview](index=23&type=section&id=Business%20Overview) This section describes the company's brand evolution, strategic focus, and global operational footprint - Build-A-Bear has evolved into a multi-generational brand offering interactive experiences for creating stuffed animals, expanding into e-commerce, licensing, and entertainment content[72](index=72&type=chunk) - The company's strategy focuses on leveraging brand strength to evolve its brick-and-mortar footprint, expand internationally via partner-operated and franchise models, and grow its e-commerce business[74](index=74&type=chunk) - As of August 2, 2025, the company operated **368 corporately-managed stores**, **157 partner-operated locations**, and **102 international franchised stores** globally[75](index=75&type=chunk) [Business Update](index=24&type=section&id=Business%20Update) This section highlights the company's strategic priorities, including global expansion, digital transformation, and capital allocation - Strategic priorities include global expansion of experience locations, accelerating comprehensive digital transformation, and driving profitable growth through investment while returning capital to shareholders[81](index=81&type=chunk) - The company opened a net **29 retail experience locations** during the first twenty-six weeks of fiscal 2025 and expects at least **60 net new units** in fiscal 2025[81](index=81&type=chunk) - Over a third of total stores are now in non-traditional settings, reflecting a shift in location strategy[81](index=81&type=chunk) [Retail Stores](index=25&type=section&id=Retail%20Stores) This section provides an overview of the company's retail store strategy and operational models, including corporately-managed, partner-operated, and international franchise locations [Corporately-Managed Locations](index=25&type=section&id=Corporately-Managed%20Locations) This section details the number and format of stores directly managed by the company across different regions Corporately-Managed Store Count | Region | August 2, 2025 | August 3, 2024 | | :------------- | :------------- | :------------- | | North America | 327 | 321 | | Europe | 41 | 40 | | **Total** | **368** | **361** | - As of August 2, 2025, **53%** of corporately-managed stores were in an updated Discovery format[82](index=82&type=chunk) - Future expansion of the retail store fleet may include more non-traditional locations, such as concourse format shops[82](index=82&type=chunk) [Partner-Operated Locations](index=25&type=section&id=Partner-Operated%20Locations) This section describes the growth and capital-light nature of the company's partner-operated retail locations Partner-Operated Store Count | Metric | August 2, 2025 | August 3, 2024 | | :---------------- | :------------- | :------------- | | Beginning of period | 138 | 92 | | Opened | 19 | 15 | | Closed | 0 | 0 | | **End of period** | **157** | **107** | - The partner-operated model is capital-light for the Company, with partners building and operating the workshops, covering real estate, labor, and inventory costs[83](index=83&type=chunk) - These locations are heavily weighted towards the hospitality industry, advancing the focus on non-traditional and tourist areas[83](index=83&type=chunk) [International Franchise Stores](index=25&type=section&id=International%20Franchise%20Stores) This section outlines the expansion and operational model of the company's international franchise store network International Franchise Store Count | Metric | August 2, 2025 | August 3, 2024 | | :---------------- | :------------- | :------------- | | Beginning of periods | 92 | 83 | | Opened | 15 | 6 | | Closed | (5) | 0 | | **End of period** | **102** | **89** | - The Company leverages new formats developed for corporately-managed locations, such as concourses and shop-in-shops, with its franchisees[86](index=86&type=chunk) - Sourcing fixtures and other supplies for franchisees from China significantly reduces capital and expenses for opening new franchises[86](index=86&type=chunk) [Results of Operations](index=27&type=section&id=Results%20of%20Operations) This section analyzes the company's financial performance, including revenues, gross profit, and expenses, for the reported periods [Thirteen weeks ended August 2, 2025 compared to August 3, 2024](index=27&type=section&id=Thirteen%20weeks%20ended%20August%202,%202025%20compared%20to%20August%203,%202024) This section compares the company's financial results for the thirteen-week period, highlighting changes in revenue, gross margin, and SG&A expenses - Consolidated revenues increased by **$12.4 million (11.1%)** to **$124.2 million**, driven by a **$11.2 million (10.8%) increase** in Net Retail sales and a **$1.3 million (18%) increase** in Commercial revenue[88](index=88&type=chunk) - Retail gross margin increased by **$10.3 million** to **$66.1 million**, with the rate improving by **370 basis points** due to improved merchandise margin[93](index=93&type=chunk) - Selling, general and administrative (SG&A) expenses increased to **$56.4 million (45.4% of consolidated revenue)** from $49.2 million (44.0%), primarily due to higher store-level compensation, corporate costs, and general inflationary pressures[94](index=94&type=chunk) [Twenty-six weeks ended August 2, 2025 compared to August 3, 2024](index=29&type=section&id=Twenty-six%20weeks%20ended%20August%202,%202025%20compared%20to%20August%203,%202024) This section compares the company's financial results for the twenty-six-week period, detailing changes in revenue, gross margin, and SG&A expenses - Consolidated revenues increased by **$26.1 million (11.5%)** to **$252.6 million**, driven by a **$22.9 million (10.8%) increase** in Net Retail sales and a **$3.0 million (22%) increase** in Commercial revenue[97](index=97&type=chunk) - Retail gross margin increased by **$19.8 million** to **$134.1 million**, with the rate improving by **320 basis points** due to improved merchandise margin[101](index=101&type=chunk) - SG&A expenses increased to **$110.0 million (43.5% of consolidated revenue)** from $96.8 million (42.7%), driven by higher store-level compensation, corporate costs, and general inflationary pressures[102](index=102&type=chunk) [Earnings before Interest, Taxes, Depreciation, and Amortization (EBITDA)](index=30&type=section&id=Earnings%20before%20Interest,%20Taxes,%20Depreciation,%20and%20Amortization) This section presents the company's EBITDA and analyzes the factors contributing to its changes for the reported periods EBITDA (Dollars in millions) | Metric | 13 Weeks Ended Aug 2, 2025 | 13 Weeks Ended Aug 3, 2024 | 26 Weeks Ended Aug 2, 2025 | 26 Weeks Ended Aug 3, 2024 | | :------------------------------------------------ | :------------------------- | :------------------------- | :------------------------- | :------------------------- | | Income before income taxes (pre-tax) | $15,318 | $11,545 | $34,949 | $26,574 | | Interest income, net | $(206) | $(188) | $(406) | $(614) | | Depreciation and amortization expense | $3,668 | $3,636 | $7,368 | $7,294 | | **Earnings before interest, taxes, depreciation, and amortization** | **$18,780** | **$14,993** | **$41,911** | **$33,254** | - EBITDA increased by **$3.8 million (25.3%)** to **$18.8 million** for the thirteen weeks ended August 2, 2025, and by **$8.7 million (26.0%)** to **$41.9 million** for the twenty-six weeks ended August 2, 2025[105](index=105&type=chunk)[106](index=106&type=chunk) - The increase in EBITDA was driven by gross profit resulting from increased retail and commercial margins, partially offset by higher SG&A expenses[105](index=105&type=chunk)[106](index=106&type=chunk) [Seasonality and Quarterly Results](index=30&type=section&id=Seasonality%20and%20Quarterly%20Results) This section discusses the impact of seasonal factors and other variables on the company's operating results and quarterly performance - Operating results can fluctuate significantly due to factors such as economic conditions, consumer spending, timing of licensed product sales, marketing initiatives, and store operations[107](index=107&type=chunk)[108](index=108&type=chunk) - Sales historically peak in the fourth quarter due to the holiday season, and the timing of holidays and school vacations can impact quarterly results[110](index=110&type=chunk) [Liquidity and Capital Resources](index=32&type=section&id=Liquidity%20and%20Capital%20Resources) This section assesses the company's cash position, operating cash flows, inventory levels, and planned capital expenditures - As of August 2, 2025, the consolidated cash balance was **$39.1 million**, with **82%** domiciled within the U.S[112](index=112&type=chunk) - Net cash provided by operating activities increased by **$19.6 million** for the twenty-six weeks ended August 2, 2025, primarily due to increased net income and favorable working capital changes[113](index=113&type=chunk) - Total inventory at quarter-end was **$81.8 million**, a **22% increase** from the fiscal 2024 second quarter, driven by additional tariff costs and accelerated purchases for tariff-mitigation plans[120](index=120&type=chunk) - The Company expects to spend approximately **$20 to $25 million** on capital expenditures in fiscal 2025[119](index=119&type=chunk) [Off-Balance Sheet Arrangements](index=33&type=section&id=Off-Balance%20Sheet%20Arrangements) This section confirms the absence of any off-balance sheet arrangements for the company - The Company has no off-balance sheet arrangements[123](index=123&type=chunk) [Inflation](index=33&type=section&id=Inflation) This section addresses the impact of inflationary pressures on the company's costs and its strategies for mitigation - Inflationary pressures, particularly rising store labor costs and tariffs on inventory purchases, are expected to continue into fiscal 2025[124](index=124&type=chunk) - The Company is implementing mitigating actions, such as strategic price increases on highly sought-after products and leveraging distribution costs[124](index=124&type=chunk) - Failure to recover increased costs through price increases or a decrease in consumer spending due to inflation could adversely affect financial results[124](index=124&type=chunk) [Critical Accounting Estimates](index=33&type=section&id=Critical%20Accounting%20Estimates) This section reviews the company's significant accounting policies and estimates that require management's judgment - The Company's accounting policies and estimates, including those related to long-lived assets, leases, revenue recognition, and income taxes, are reevaluated on an ongoing basis[126](index=126&type=chunk) - There have been no material changes to the critical accounting estimates disclosed in the Annual Report on Form 10-K for the year ended February 1, 2025[127](index=127&type=chunk) [Recent Accounting Pronouncements](index=34&type=section&id=Recent%20Accounting%20Pronouncements) This section refers to disclosures regarding recent accounting pronouncements in the company's annual report - Information on recent accounting pronouncements is disclosed in Note 1 to the Condensed Consolidated Financial Statements in the Annual Report on Form 10-K for the year ended February 1, 2025[128](index=128&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=34&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section states that there have been no material changes to the company's quantitative and qualitative disclosures about market risk since its last Annual Report on Form 10-K - There have been no material changes to the Company's Quantitative and Qualitative Disclosures About Market Risk as disclosed in its Annual Report on Form 10-K for the fiscal year ended February 1, 2025[129](index=129&type=chunk) [Item 4. Controls and Procedures](index=34&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of August 2, 2025. No material changes in internal control over financial reporting occurred during the quarter - Management concluded that the Company's disclosure controls and procedures were effective as of August 2, 2025[130](index=130&type=chunk) - No material changes in internal control over financial reporting occurred during the quarter covered by this report[132](index=132&type=chunk) - Control systems provide reasonable, not absolute, assurance and are subject to inherent limitations such as faulty judgments, errors, collusion, or management override[131](index=131&type=chunk) [PART II – OTHER INFORMATION](index=35&type=section&id=PART%20II%20%E2%80%93%20OTHER%20INFORMATION) This section contains additional information not covered in the financial statements, including risk factors, equity sales, other disclosures, and exhibits [Item 1A. Risk Factors](index=35&type=section&id=Item%201A.%20Risk%20Factors) This section states that there have been no material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K - There have been no material changes to the Company's risk factors as disclosed in its Annual Report on Form 10-K for the year ended February 1, 2025[135](index=135&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=35&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section details the company's common stock repurchases under its September 2024 Stock Repurchase Program during the quarter ended August 2, 2025 Issuer Purchases of Equity Securities (May 4, 2025 - August 2, 2025) | Period | Total Number of Shares Purchased | Average Price Paid Per Share | Maximum Dollar Value Remaining Under Program | | :-------------------------- | :----------------------------- | :--------------------------- | :------------------------------------------- | | May 4, 2025 - May 31, 2025 | - | $ - | $84,992,834 | | June 1, 2025 - July 5, 2025 | 23,720 | $52.71 | $83,742,469 | | July 6, 2025 - August 2, 2025 | 35,363 | $52.08 | $81,900,801 | | **Total** | **59,083** | **$52.33** | **$81,900,801** | - The September 2024 Stock Repurchase Program, authorized for up to **$100 million**, allows repurchases through September 30, 2028[138](index=138&type=chunk) [Item 5. Other Information](index=35&type=section&id=Item%205.%20Other%20Information) This section discloses the adoption of Rule 10b5-1 trading plans by several directors and executive officers for the sale of company common stock - CFO Voin Todorovic adopted a Rule 10b5-1 Trading Plan on June 9, 2025, for the sale of up to **12,744 shares**, expiring December 11, 2025[139](index=139&type=chunk) - President and CEO Sharon John adopted a Rule 10b5-1 Trading Plan on June 13, 2025, for the sale of up to **42,643 shares**, expiring December 5, 2025[139](index=139&type=chunk) - Chairman of the Board Craig Leavitt adopted a Rule 10b5-1 Trading Plan on July 1, 2025, for the sale of up to **8,250 shares**, expiring December 5, 2025[139](index=139&type=chunk) [Item 6. Exhibits](index=37&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed as part of the quarterly report on Form 10-Q, including organizational documents, employment agreements, and various certifications - The exhibits include certifications pursuant to Section 302 and Section 906 of the Sarbanes-Oxley Act of 2002, executed by the President and CEO and the CFO[141](index=141&type=chunk) - Various Inline XBRL documents (Instance, Schema, Calculation, Definition, Label, Presentation Linkbase Documents) are filed as part of the report[141](index=141&type=chunk) [Signatures](index=38&type=section&id=Signatures) This section contains the official signatures of the company's President and Chief Executive Officer and Chief Financial Officer, certifying the quarterly report - The report was signed on September 11, 2025, by Sharon John, President and Chief Executive Officer, and Voin Todorovic, Chief Financial Officer[145](index=145&type=chunk)

OXFORD INDUSTRIES, INC. Table of Contents (Exact name of registrant as specified in its charter) UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended August 2, 2025 or o 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: 1-4365 Georgia 58-0831862 (State or ot ...

[FORM 8-K Filing Details](index=1&type=section&id=FORM%208-K%20Filing%20Details) This section details the Form 8-K filing, covering registrant information, securities registration, and general filing specifics [Registrant and Filing Information](index=1&type=section&id=Registrant%20and%20Filing%20Information) This section provides the administrative details of the Form 8-K filing, including the registrant's identity, incorporation state, address, and the report's filing date - Registrant: **PACS GROUP, INC.**, incorporated in Delaware[1](index=1&type=chunk) - Filing Date: **September 11, 2025**[1](index=1&type=chunk) - Registrant's principal executive offices: **262 N. University Ave., Farmington, Utah 84025**[1](index=1&type=chunk) [Securities Registration](index=1&type=section&id=Securities%20Registration) This part details the company's registered securities, their trading symbol, and the exchange on which they are listed, also indicating that the registrant is not an emerging growth company Securities Registration Details | Title of each class | Trading Symbol(s) | Name of each exchange on which registered | | :------------------ | :---------------- | :---------------------------------------- | | Common Stock, $0.001 par value per share | PACS | The New York Stock Exchange | - The registrant is not an emerging growth company[3](index=3&type=chunk) [Item 2.02 Results of Operations and Financial Condition](index=2&type=section&id=Item%202.02%20Results%20of%20Operations%20and%20Financial%20Condition) This section reports the announcement of preliminary operating metrics and clarifies the filing status and associated liabilities [Announcement of Preliminary Operating Metrics](index=2&type=section&id=Announcement%20of%20Preliminary%20Operating%20Metrics) PACS Group, Inc. issued a press release on September 11, 2025, announcing select unaudited preliminary operating metrics, which is furnished as Exhibit 99.1 to this Form 8-K - On **September 11, 2025**, PACS Group, Inc. issued a press release[4](index=4&type=chunk) - The press release announced select unaudited preliminary operating metrics[4](index=4&type=chunk) - A copy of the press release is furnished as **Exhibit 99.1** to this Current Report on Form 8-K[4](index=4&type=chunk) [Filing Status and Liabilities Disclaimer](index=2&type=section&id=Filing%20Status%20and%20Liabilities%20Disclaimer) This section clarifies that the information in this Form 8-K, including Exhibit 99.1, is furnished and not considered 'filed' for Section 18 liability purposes of the Exchange Act, nor is it automatically incorporated by reference into other filings - The information in this Form 8-K (including Exhibit 99.1) shall not be deemed 'filed' for purposes of **Section 18 of the Securities Exchange Act of 1934**[5](index=5&type=chunk) - It is not subject to the liabilities of that section[5](index=5&type=chunk) - It shall not be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, except as expressly set forth by specific reference[5](index=5&type=chunk) [Item 9.01 Financial Statements and Exhibits](index=2&type=section&id=Item%209.01%20Financial%20Statements%20and%20Exhibits) This section lists the financial statements and exhibits included in the Form 8-K filing [Exhibits List](index=2&type=section&id=Exhibits%20List) This section provides a table listing the exhibits accompanying the Form 8-K filing, specifically the press release and the interactive data file Form 8-K Exhibits | Exhibit No. | Description | | :---------- | :---------- | | 99.1 | Press Release of the Company dated September 11, 2025 | | 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) | [SIGNATURES](index=3&type=section&id=SIGNATURES) This section formally concludes the report with the authorized signature and date [Execution of Report](index=3&type=section&id=Execution%20of%20Report) This section formally concludes the report, confirming its execution on behalf of PACS Group, Inc. by its Chief Executive Officer - The report was duly caused to be signed on behalf of **PACS GROUP, INC.**[8](index=8&type=chunk)[9](index=9&type=chunk) - Signed by **Jason Murray**, Chief Executive Officer[10](index=10&type=chunk) - Date of signature: **September 11, 2025**[10](index=10&type=chunk)

Exhibit 99.1 Kroger Reports Second Quarter 2025 Results and Updates Guidance for 2025 Second Quarter Highlights CINCINNATI, September 11, 2025 – The Kroger Co. (NYSE: KR) today reported its second quarter 2025 results, updated guidance and shared progress on key priorities. Comments from Chairman and CEO Ron Sargent "Kroger delivered another quarter of strong results, which demonstrates the clear and measurable progress we've made on our priorities – to simplify our organization, to improve the customer exp ...

Bickley continued, "We are in the early stages of making meaningful adjustments to our product design and assortment, driving innovation back into our core DNA and what made Vera Bradley successful. As part of our fall and holiday assortments, we are bringing back iconic styles such as the Vera Tote along with exciting new product designs with great details. Our assortments will be more balanced across fabrications, silhouettes and prints. And we are super excited for the hero heritage re-issue of the origi ...