Financial Performance - Total revenue for the first quarter decreased by 5.7% compared to the same period in the prior year, amounting to $797,188,000[98]. - Comparable store restaurant sales decreased by 4.7%, while comparable store retail sales decreased by 8.5%[99]. - Operating income for the quarter was a loss of 4.1% of total revenue, compared to a gain of 0.8% in the prior year[97]. - Operating loss for the first quarter of 2026 was $(32,797), a significant decline from operating income of $7,071 in the same period of 2025, attributed to decreased total revenue and higher expenses[122]. - Net loss for the first quarter of 2026 was $(24,622), compared to net income of $4,844 in the prior year, primarily due to the operating loss[127]. - Cash used in operations was $53,430 in the first quarter of 2026, a substantial increase from $4,395 in the same period of 2025, driven by operating losses and timing of payments[130]. Cost and Expenses - The cost of goods sold increased to 31.2% of total revenue, up from 30.6% in the previous year[97]. - Labor and related expenses rose to 37.8% of total revenue, compared to 36.4% in the prior year[97]. - Other store operating expenses rose to 28.7% of total revenue in the first quarter of 2026, compared to 25.0% in the prior year, primarily due to increased occupancy and advertising costs[113]. - Labor and related expenses increased to 37.8% of total revenue in the first quarter of 2026, up from 36.4% in the same period of 2025, driven by higher store management compensation and hourly labor costs[108]. Strategic Initiatives - The company plans to refine its brand identity and enhance its menu offerings as part of its multi-year strategic plan[93]. - Negative publicity from recent brand initiatives contributed to a decrease in guest traffic, impacting overall sales[102]. Capital and Financing - Capital expenditures for the first quarter of 2026 were $34,165, down from $38,887 in the prior year, with expectations of $110,000 to $125,000 for the full year[131][132]. - The Company issued the 2030 Notes with a cash interest rate of 1.75% per annum, maturing on September 15, 2030, and net proceeds of approximately $335 million after fees[136]. - Approximately $145.9 million of the net proceeds from the 2030 Notes were used to repurchase $150 million of the 2026 Notes, which bear a cash interest rate of 0.625% per annum[137]. - The Company had negative working capital of $288.3 million as of October 31, 2025, an improvement from negative working capital of $312.5 million on August 1, 2025[144]. - Outstanding borrowings under the 2025 Revolving Credit Facility totaled $65 million as of October 31, 2025, with interest rate risk managed through a mix of fixed and variable rate debt[154]. - A one-percentage point change in the $65 million outstanding borrowings would impact pre-tax annualized costs by approximately $657[155]. Dividends and Share Repurchase - During the first three months of 2026, the Company paid a regular dividend of $0.25 per share and declared another dividend of $0.25 per share for payment on February 11, 2026[140]. - The Board of Directors approved a share repurchase authorization of up to $100 million, although no shares were repurchased in the first quarter of 2026[141]. Tax and Credit Risk - The effective tax rate for the first quarter of 2026 was 32.6%, an increase from (287.8)% in the prior year, primarily due to the benefit of employment credits in the previous period[124]. - The Company believes it does not have a material exposure to credit risk related to its Capped Call Transactions and Convertible Note Hedge Transactions at this time[156]. Store Operations - The number of Cracker Barrel locations decreased from 658 to 656, while Maple Street Biscuit Company locations decreased from 69 to 54[97]. - The company operates 656 Cracker Barrel stores in 43 states and 54 Maple Street Biscuit Company locations in ten states as of October 31, 2025[88].

Financial Performance - Revenues for Q3 fiscal 2026 were approximately $9.7 million, down 28.7% from $13.6 million in Q2 fiscal 2026 and down 19.5% from $12.1 million in Q3 fiscal 2025[2] - Operating income for Q3 fiscal 2026 was $774,000, a decrease of 71.5% from $2.7 million in Q2 fiscal 2026 and down 59.3% from $1.9 million in Q3 fiscal 2025[3] - Net income for Q3 fiscal 2026 was $62,000, compared to $1.9 million in Q2 fiscal 2026 and approximately $1.3 million in Q3 fiscal 2025, resulting in a net income per share of $0.01[3] - Adjusted EBITDA for Q3 fiscal 2026 was approximately $1.3 million, down 58.1% from $3.1 million in Q2 fiscal 2026 and down 35% from $2.0 million in Q3 fiscal 2025[4] - For the nine months ended October 31, 2025, net income was $1,021 million, a decrease from $3,043 million in the same period of 2024, representing a decline of approximately 66.5%[23] - EBITDA for the nine months ended October 31, 2025, was $3,355 million, down from $5,080 million in 2024, reflecting a decrease of about 34%[24] - Adjusted EBITDA for the nine months ended October 31, 2025, was $4,191 million, down from $5,221 million in 2024, reflecting a decrease of approximately 19.8%[24] Cash Flow and Working Capital - The company generated approximately $11.0 million in cash through its ATM program during the quarter, ending with nearly $36.0 million in working capital, of which $19.4 million was cash[7] - Net cash provided by operating activities for the nine months ended October 31, 2025, was $3,803 million, compared to a net cash used of $1,407 million in 2024, indicating a significant turnaround[23] - Cash and cash equivalents at the end of the period were $19,387 million, up from $3,505 million at the end of the same period in 2024, showing an increase of approximately 453%[23] - The company reported a net cash used in investing activities of $512 million for the nine months ended October 31, 2025, compared to a net cash provided of $244 million in 2024[23] Assets and Equity - Total current assets increased to $42.8 million as of October 31, 2025, compared to $32.1 million as of January 31, 2025[19] - Total stockholders' equity rose to $39.9 million as of October 31, 2025, up from $27.3 million as of January 31, 2025[19] Backlog and Future Expectations - The backlog of Marine Technology Products was approximately $7.2 million as of October 31, 2025, down from $12.8 million at July 31, 2025 and $26.2 million at October 31, 2024[5] - The company expects an improved fourth quarter based on the anticipated delivery schedule of its backlog and recent orders[6] Stock-Based Compensation and Foreign Exchange - Stock-based compensation for the nine months ended October 31, 2025, was $836 million, significantly higher than $141 million in 2024, marking an increase of about 493%[23] - The company experienced a foreign exchange rate effect of $6 million on cash and cash equivalents for the nine months ended October 31, 2025, compared to a negative effect of $2 million in 2024[23] Accounts Receivable Changes - Changes in accounts receivable for the nine months ended October 31, 2025, resulted in a cash inflow of $1,228 million, compared to a cash outflow of $3,006 million in 2024[23] Common Stock Issuance - The net proceeds from the issuance of common stock amounted to $10,754 million in the nine months ended October 31, 2025, while there were no proceeds in the same period of 2024[23]

Financial Performance - Total net revenue increased by 6% to $1.363 billion for the 13 weeks ended November 1, 2025, compared to $1.289 billion for the same period last year[155] - Gross profit for the same period was $552 million, reflecting a 5% year-over-year increase[155] - Operating income rose by 6% to $113 million, with an operating margin of 8.3%, up 10 basis points from the previous year[155] - Aerie revenue increased by 12% year-over-year, while American Eagle revenue grew by 3%[155] - Total comparable sales increased by 4%, compared to a 3% increase in the prior year[158] - Total net revenue for the 13 weeks ended November 1, 2025, was $1,362,701, representing a 6% increase from $1,289,094 for the same period last year[159] - American Eagle comparable sales increased by 1%, while Aerie comparable sales increased by 11%[160] - Gross profit increased by 5% year-over-year to $551,877, with a gross margin of 40.5%, down 40 basis points from the previous year[161] - Net income for the 13 weeks ended November 1, 2025, was $91,344, a 14% increase from $80,019, with net income per diluted share rising to $0.53 from $0.41[174] - Total net revenue for the 39 weeks ended November 1, 2025, was relatively flat, with digital revenue increasing by 2% and store revenue decreasing by 1%[175] - Total net revenue for the 39 weeks ended November 1, 2025, was $3,735,970, a slight increase of $11,957 or 0% compared to $3,724,010 for the same period in 2024[176] - Net income for the 39 weeks ended November 1, 2025, was $104,078, a decrease of $120,956 or 54% compared to $225,034 in 2024[195] - For the 39 weeks ended November 1, 2025, the company reported a net income of $104.1 million, with earnings per diluted share of $0.59 on a GAAP basis, and $117.2 million, with earnings per diluted share of $0.66 on a non-GAAP basis[199] Expenses and Margins - Selling, general and administrative (SG&A) expenses rose by 10% to $386,340, accounting for 28.4% of net revenue, an increase of 110 basis points[164] - Operating income increased by 6% to $112,574, with an operating margin of 8.3%, up 10 basis points from the previous year[168] - Interest expense increased to $2,144, compared to a net income of $(1,246) in the previous year, reflecting a 272% increase[171] - The provision for income taxes was $33,238, an 18% increase from $28,211, with an effective tax rate of 26.7%[173] - Gross profit decreased by $115,499, or 8%, to $1,374,260, primarily due to a $99 million decline in merchandise margin year-over-year[178] - Selling, general and administrative expenses increased by $37,152, or 4%, to $1,067,338, driven by planned investments in advertising[181] - Operating income decreased by $154,557, or 54%, to $130,477, primarily due to lower gross profit and higher SG&A expenses[186] - Interest expense increased by $9,258, or 171%, to $3,844, primarily due to increased borrowings on the Credit Facility[191] - The effective tax rate increased to 26.3% for the 39 weeks ended November 1, 2025, compared to 23.6% for the same period in 2024[194] Store Operations and Expansion - The number of stores at the end of the period was 1,190, with 8 new stores opened and 3 closed during the quarter[157] - International licensed retail stores increased to 368, up from 310 year-over-year[157] - The company had a total of 368 licensed retail stores and concessions operated by international licensing partners across approximately 30 countries as of November 1, 2025[206] - The company remodeled 35 stores and opened 26 new stores during the 39 weeks ended November 1, 2025[219] Shareholder Returns and Capital Expenditures - The company repurchased $231 million worth of shares, reducing diluted shares outstanding by approximately 12%[155] - The company repurchased approximately 2.0 million shares during the 39 weeks ended November 1, 2025, as part of its share repurchase program[221] - The company declared a quarterly cash dividend of $0.125 per share on September 16, 2025, which was paid on October 29, 2025[226] - Capital expenditures for the 39 weeks ended November 1, 2025, totaled $202.2 million, a 28% increase from $157.7 million in the same period of the previous year[218] - The company expects capital expenditures for Fiscal 2025 to be approximately $275 million to support expansion efforts and technology upgrades[218] Cash Flow and Other Income - The company reported a decrease in cash provided by operating activities, totaling $40.3 million, down from $93.0 million in the previous year[210] - Other income increased by $10,669, or 266%, to $(14,675), driven by a $13 million unrealized gain on equity method investments[192] - The company experienced an unrealized gain of $25 million included in accumulated other comprehensive income during the 39 weeks ended November 1, 2025, due to foreign exchange rate risk[229]

Media Contact: Heidi Pearce (615) 235-4135 CRACKER BARREL REPORTS FIRST QUARTER FISCAL 2026 RESULTS AND UPDATES FISCAL 2026 OUTLOOK LEBANON, Tenn. – December 9, 2025 – Cracker Barrel Old Country Store, Inc. ("Cracker Barrel" or the "Company") (Nasdaq: CBRL) today reported its financial results for the first quarter of fiscal 2026 ended October 31, 2025. Exhibit 99.1 Investor Contact: Adam Hanan (615) 443-9887 Cracker Barrel President and Chief Executive Officer Julie Masino said, "First quarter results were ...

Financial Performance - Net revenue for the Third Quarter 2025 was $317.5 million, a slight decrease of 0.4% compared to $318.6 million in the same quarter of the previous year[101]. - Year-to-Date 2025 net revenue was $872.8 million, down 5.3% from $921.3 million in Year-to-Date 2024[102]. - Net revenue for Q3 2025 was $317.5 million, a decrease of $1.1 million or 0.3% from Q3 2024[112]. - U.S. eCommerce net revenue decreased by $6.3 million or 3.4% to $179.8 million in Q3 2025[113]. - U.S. eCommerce net revenue decreased by $27.1 million or 5.0% to $517.8 million in Year-to-Date 2025, despite continued strength in outerwear and transitional key items[134]. - Europe eCommerce net revenue decreased by $15.6 million or 21.4% to $57.3 million in Year-to-Date 2025, primarily due to new leadership and macroeconomic pressures[137]. - Net revenue from the Europe eCommerce distribution channel represented approximately 7% of total net revenue during Year-to-Date 2025[177]. Profitability - Gross profit margin improved to 51.8% in the Third Quarter 2025 from 50.6% in the Third Quarter 2024[101]. - Operating income increased to $16.8 million, representing 5.3% of net revenue, compared to $9.3 million (2.9% of net revenue) in the prior year[101]. - The company experienced a net income of $5.2 million in the Third Quarter 2025, compared to a net loss of $0.6 million in the same quarter of the previous year[101]. - Adjusted net income for Q3 2025 was $6.5 million, compared to $1.8 million in Q3 2024, with adjusted diluted earnings per share increasing to $0.21[127]. - Gross profit was $440.6 million for Year-to-Date 2025, a decrease of $11.4 million or 2.5%, but gross margin improved by approximately 140 basis points to 50.5%[139]. - Adjusted EBITDA for Q3 2025 was $25.9 million, an increase of 28% compared to $20.3 million in Q3 2024[128]. - Adjusted EBITDA was $49.5 million in Year-to-Date 2025, compared to $48.9 million in Year-to-Date 2024[149]. Expenses - The company incurred $1.5 million in restructuring costs during the Third Quarter 2025, compared to $1.8 million in the same quarter of the previous year[97]. - Total restructuring costs for Year-to-Date 2025 reached $7.2 million, up from $4.5 million in Year-to-Date 2024[97]. - Selling and administrative expenses decreased by $2.3 million to $138.6 million, representing 43.7% of net revenue in Q3 2025[119]. - Selling and administrative expenses decreased by $12.4 million to $391.4 million, representing 44.8% of net revenue in Year-to-Date 2025[140]. Cash Flow and Financing - Net cash used in operating activities was $15.2 million during Year-to-Date 2025, an increase from $12.2 million in Year-to-Date 2024, primarily due to tariffs[167]. - Net cash used in investing activities was $23.9 million in Year-to-Date 2025, compared to $22.1 million in Year-to-Date 2024, mainly for updating digital information technology infrastructure[168]. - Net cash provided by financing activities was $58.4 million during Year-to-Date 2025, up from $39.4 million in Year-to-Date 2024, driven by increased borrowings under the ABL Facility[169]. - As of October 31, 2025, the outstanding balance on the ABL Facility was $75.0 million, an increase from $60.0 million on November 1, 2024[171]. Market Conditions - Macroeconomic challenges, including inflation and high interest rates, continue to impact consumer discretionary spending and may require higher promotional efforts[94]. - A 10% change in foreign currency exchange rates could have resulted in a $5.7 million increase or decrease in net revenue for Year-to-Date 2025[177]. - Each one percentage point change in interest rates associated with the Term Loan Facility would result in a $2.3 million change in annual cash interest expenses[179]. Segment Performance - U.S. Digital Segment net revenue increased by $4.0 million or 1.5% to $277.5 million in Q3 2025[112]. - Outfitters net revenue increased by $5.4 million or 7.4% to $78.8 million in Q3 2025, driven by a strong back-to-school season[114]. - Third Party net revenue increased by $4.8 million or 34.0% to $18.9 million in Q3 2025, primarily due to strength in marketplace partners[115]. - U.S. Digital Segment variable profit increased by $8.0 million to $71.4 million in Q3 2025, representing 25.7% of net revenue[129]. - Outfitters net revenue increased by $8.9 million or 5.0% to $188.1 million in Year-to-Date 2025, driven by a strong back-to-school season and new customer acquisitions[135]. - Third Party net revenue increased by $6.2 million or 12.8% to $54.6 million in Year-to-Date 2025, attributed to curated product assortments[136].

Store Operations and Expansion - Ollie's operates 645 retail stores across 34 states as of November 1, 2025[82] - The average store size is slightly above 32,000 square feet, with a target upfront cash investment of approximately $1 million per new store[83] - The company aims for new stores to achieve net sales of approximately $4 million and a four-wall profit margin in the mid-teens percentage rate[83] - Ollie's plans to expand its distribution capabilities to support up to approximately 750 stores with the addition of a fourth distribution center[84] - The growth strategy includes opening new stores and acquiring locations from distressed retailers, focusing on contiguous market expansion[82] - Ollie's anticipates that new store growth will be the primary driver of sales growth, with initial lease terms averaging seven years[92] - The company opened 32 stores in Q3 fiscal 2025, compared to 24 store openings in Q3 fiscal 2024, with 23 of the new stores being bankruptcy acquired leases[113] Financial Performance - Net sales increased by 18.6% to $613.6 million in Q3 fiscal 2025 from $517.4 million in Q3 fiscal 2024, driven by new store growth and an increase in comparable store sales[120] - Comparable store sales rose by 3.3% in Q3 fiscal 2025 compared to a 0.5% decrease in Q3 fiscal 2024, primarily due to an increase in the number of transactions[121] - Gross profit increased by 18.3% to $253.7 million in Q3 fiscal 2025, while gross margin decreased by 10 basis points to 41.3%[122] - Net sales increased 16.6% to $1.870 billion for the thirty-nine weeks ended November 1, 2025, compared to $1.605 billion for the same period in 2024[129] - Comparable store sales rose 3.7% in the thirty-nine weeks ended November 1, 2025, compared to a 2.8% increase in the prior year[130] - Gross profit increased 18.6% to $762.0 million, with gross margin rising 70 basis points to 40.8%[131] - Net income increased by 28.7% to $46.2 million in Q3 fiscal 2025 from $35.9 million in Q3 fiscal 2024[127] - Net income rose 18.2% to $155.0 million for the thirty-nine weeks ended November 1, 2025, compared to $131.2 million in the prior year[137] - Adjusted EBITDA rose to $72.9 million in Q3 fiscal 2025, an increase of 21.8% from $59.8 million in Q3 fiscal 2024[128] - Adjusted EBITDA increased 17.3% to $238.8 million for the thirty-nine weeks ended November 1, 2025[138] Expenses and Profitability - Selling, General, and Administrative (SG&A) expenses are expected to increase as the store base grows, with a focus on maintaining discipline in monitoring SG&A as a percentage of net sales[103] - SG&A expenses rose to $180.3 million in Q3 fiscal 2025, an increase of 16.7%, but decreased as a percentage of net sales to 29.4%[123] - SG&A expenses increased 17.6% to $520.6 million, representing 27.8% of net sales, up from 27.6%[132] - Pre-opening expenses increased by 3.2% to $7.4 million in Q3 fiscal 2025, driven by new store growth and dark rent associated with bankruptcy acquired stores[124] - Pre-opening expenses surged 58.9% to $23.0 million, driven by new store growth and dark rent expenses[133] Cash Flow and Capital Management - Net cash provided by operating activities was $114.2 million, up from $79.7 million in the prior year[148] - Capital expenditures for the thirty-nine weeks ended November 1, 2025, were $83.9 million, down from $96.2 million in the previous year[139] - The company repurchased 346,032 shares for $40.2 million during the thirty-nine weeks ended November 1, 2025[146] Tax and Interest - Income tax expense increased to $13.8 million in Q3 fiscal 2025, with an effective tax rate of 23.0% compared to 26.1% in Q3 fiscal 2024[126] - Interest income, net increased to $4.5 million in Q3 fiscal 2025 from $4.0 million in Q3 fiscal 2024, attributed to higher average cash and cash equivalent balances[125] Profitability Metrics - Gross profit is calculated as net sales minus cost of sales, with gross margin being a key performance indicator[98]

Financial Performance - Net sales for the three months ended October 31, 2025, were $57.2 million, a decrease of $3.0 million or 5.0% compared to the same quarter last year[88] - Gross margin for the same period was 45.6%, down 240 basis points from the prior year[88] - Net income for the three months ended October 31, 2025, was $2.1 million, or $0.16 per diluted share, compared to $3.1 million, or $0.24 per diluted share, in the same quarter last year[88] - For the six months ended October 31, 2025, total net sales were $86.9 million, a decrease of $15.0 million or 14.7% from the prior year[94] - Gross margin for the six months ended October 31, 2025, was 46.0%, a decrease of 100 basis points from the prior year[94] - Operating income for the three months ended October 31, 2025 was $2.1 million, a decrease of $979,000 or 31.9% compared to the same period in 2024[101] - For the six months ended October 31, 2025, the company recorded an operating loss of $4.7 million, a decline of $5.2 million or 1,051.1% from an operating income of $497,000 in the prior year[102] - Net income for the three months ended October 31, 2025 was $2.1 million, down $1.036 million or 33.3% from $3.1 million in the same quarter of 2024[105] - The net loss for the six months ended October 31, 2025 was $4.8 million, a decrease of $5.5 million or 737.3% compared to net income of $746,000 in the prior year[106] Sales Channels - E-commerce channel net sales decreased by $3.9 million, or 15.9%, primarily due to lower sales to the world's largest online retailer[91] - Traditional channel net sales increased by $828,000, or 2.3%, driven by stronger sales in hunting and outdoor cooking products[92] - New products represented 31.4% of net sales for the three months ended October 31, 2025[92] Expenses and Cash Flow - Research and development expenses for the three months ended October 31, 2025, decreased by $644,000, or 34.5%[99] - Total operating expenses for the three months ended October 31, 2025, were $24.0 million, a decrease of $1.8 million or 7.1%[99] - Cash used in operating activities was $15.0 million for the six months ended October 31, 2025, an increase of $2.7 million or 22.1% from $12.3 million in the same period of 2024[112] - Total cash flow for the six months ended October 31, 2025 was $(20.3) million, a decline of $4.8 million or 31.3% compared to $(15.5) million in the prior year[112] Future Outlook - The company expects to spend approximately $4.0 million to $4.5 million on capital expenditures in fiscal 2026, compared to $3.9 million in fiscal 2025[115] - The company plans to utilize cash flows for business investments, including research and development for new product initiatives and potential acquisitions[111] Cash Position - As of October 31, 2025, the company had $3.1 million in cash equivalents on hand[118] Adjusted EBITDA - Adjusted EBITDA for the three months ended October 31, 2025 was $6.5 million, down from $7.5 million in the same period of 2024[110]

Revenue Growth - Total revenue for Q3 2025 was $83.5 million, a 117% increase from $38.4 million in Q3 2024[5] - Prenatal clinical testing revenue reached $74.1 million, up 102% year-over-year, while oncology clinical testing revenue surged to $8.7 million, a 664% increase compared to $1.1 million in the same period last year[5] - The company expects full-year 2025 revenue to be between $293 million and $299 million, representing a growth of 92% to 96% compared to 2024[12] - Fourth quarter 2025 revenue is projected to be between $84 million and $90 million, indicating an 86% to 100% growth compared to Q4 2024[12] Profitability - Gross margin improved to 70% in Q3 2025, up from 53% in Q3 2024, reflecting a 17 percentage-point increase year-over-year[5] - Operating income was $9.6 million in Q3 2025, a significant turnaround from an operating loss of $12.6 million in Q3 2024[10] - Net income available to common shareholders for Q3 2025 was $1.5 million, or $0.10 per diluted share, compared to a net loss of $14.9 million, or ($1.47) per diluted share, in Q3 2024[10] - Positive cash flow of $6.2 million was reported in Q3 2025[5] Asset and Liability Management - Total assets increased to $327,521 million as of September 30, 2025, up from $302,059 million on December 31, 2024, representing an increase of 8.5%[19] - Total current assets rose to $251,716 million, compared to $227,817 million at the end of 2024, marking an increase of 10.5%[19] - Total liabilities increased to $147,625 million from $134,306 million, reflecting a rise of 9.9%[19] - Cash and cash equivalents grew to $195,152 million, up from $191,477 million, indicating a 3.5% increase[19] - Accounts receivable surged to $34,646 million, a significant increase from $24,709 million, representing a growth of 40.2%[19] - Inventories increased to $17,389 million, compared to $8,733 million, showing a substantial rise of 99.0%[19] - Long-term debt rose to $54,986 million, up from $51,481 million, which is an increase of 10.0%[19] Stockholder Equity - Total stockholders' deficit improved to $(239,513) million from $(251,656) million, indicating a reduction of 4.8%[19] - Additional paid-in capital increased to $41,211 million from $30,545 million, reflecting a growth of 35.0%[19] - Accumulated deficit slightly improved to $(280,724) million from $(282,201) million, showing a minor reduction of 0.5%[19] Testing Volume - Total tests accessioned in Q3 2025 were 162,900, a 51% increase from 107,900 tests in Q3 2024[7] IPO and Funding - The company raised gross proceeds of $314.0 million from its initial public offering[11]

Financial Performance - Net sales for the three months ended November 1, 2025, were $752,411,000, a decrease of 3.2% compared to $777,194,000 for the same period in 2024[11] - Gross profit for the three months ended November 1, 2025, was $339,619,000, slightly up from $333,815,000 in the prior year, resulting in a gross margin of 45.1%[11] - Net income attributable to Designer Brands Inc. for the three months ended November 1, 2025, was $18,215,000, representing a 40.0% increase from $13,012,000 in the same period of 2024[11] - Basic earnings per share for the three months ended November 1, 2025, increased to $0.37 from $0.25 in the prior year, reflecting a 48.0% growth[11] - Comprehensive income for the three months ended November 1, 2025, was $18,008,000, compared to $12,687,000 in the same period of 2024, reflecting a 42.0% increase[12] - Operating profit for the three months ended November 1, 2025, was $42,663,000, significantly higher than $22,816,000 in the prior year, indicating an increase of 87.0%[11] - For the nine months ended November 1, 2025, consolidated net sales were $2,179,082,000, compared to $2,295,690,000 for the same period last year, indicating a decline of approximately 5.1%[66][67] - Gross profit for the nine months ended November 1, 2025, was $957.7 million, a decrease of 4.6% compared to $1.00 billion last year[90] Assets and Liabilities - Total assets as of November 1, 2025, were $2,052,989,000, compared to $2,080,764,000 as of November 2, 2024, indicating a decrease of 1.3%[14] - Current liabilities totaled $610,261,000 as of November 1, 2025, up from $567,611,000 a year prior, marking a 7.5% increase[14] - Total debt decreased to $473,989,000 as of November 1, 2025, from $496,465,000 on February 1, 2025, reflecting a reduction of about 4.1%[55] - Total receivables as of November 1, 2025, were $64.4 million, an increase from $50.4 million at the end of the previous quarter[50] Cash Flow - Cash and cash equivalents increased to $51,352,000 as of November 1, 2025, from $36,227,000 a year earlier, showing a growth of 41.8%[14] - Net cash provided by operating activities increased significantly to $67,607,000 from $12,137,000 year-over-year[17] - Cash paid for operating lease liabilities was $145,517,000 for the nine months ended November 1, 2025, compared to $157,435,000 for the same period in the previous year[53] - The company recorded a net increase in cash and cash equivalents of $6.600 million for the nine months ended November 1, 2025, compared to a decrease of $12.946 million in the same period last year[98] Segment Performance - U.S. Retail segment net sales for the nine months ended November 1, 2025, were $1.79 billion, down 4.5% from $1.88 billion in the prior year[36] - Athletic footwear sales in the U.S. Retail segment for the three months ended November 1, 2025, increased to $188.6 million, up 1.4% from $185.3 million in the same period last year[36] - Comparable sales for the U.S. Retail segment decreased by 1.5%, while the Canada Retail segment saw a decline of 6.6% for the three months ended November 1, 2025[74] - The Brand Portfolio segment's net sales decreased by 8.6% to $101.9 million, with comparable sales down 21.5% due to a shift in timing of wholesale revenue[77][78] Expenses and Costs - Operating expenses as a percentage of net sales increased to 39.9% from 38.2% in the prior year, reflecting a rise in total operating expenses[81] - The company incurred severance costs of $7.3 million for the nine months ended November 1, 2025, compared to $5.5 million for the same period in 2024[24] - Interest expense for the third quarter of 2025 was $11,420,000, reflecting ongoing financial obligations[64] Tax and Impairment - The effective tax rate for the nine months ended November 1, 2025, was 50.0%, compared to a negative 7.9% for the same period in 2024[26] - The effective tax rate for the three months ended November 1, 2025, was 38.1%, compared to a negative 20.2% in the same period last year[86] - The company recorded impairment charges of $4.4 million during the nine months ended November 1, 2025, compared to $17.8 million for the same period in 2024[30] Shareholder Actions - The company declared a quarterly cash dividend of $0.05 per share for both Class A and Class B common shares, payable on December 19, 2025[49] - As of November 1, 2025, the company has $19.7 million remaining authorized for repurchase under its share repurchase program, with no shares repurchased during the nine months ended[117] Legal and Compliance - The company is involved in various legal proceedings, but potential liabilities are not expected to be material to financial results[61] - The company maintained compliance with all financial covenants in the ABL Revolver and Term Loan as of November 1, 2025[60] - The company has not made any changes to its internal control over financial reporting that materially affect its reporting[112] Market Conditions - The company is closely monitoring the impact of increased tariffs and macroeconomic conditions on its cost structure and future operations[71][72] - Recent changes to U.S. trade policy, including increased tariffs, could materially adversely affect the company's business and liquidity, particularly due to sourcing from Asia[116] - The company continues to monitor macroeconomic conditions and potential impacts from new tariffs or trade restrictions on financial performance and asset valuation[109]

Financial Performance - Third quarter revenue was $448.2 million, a slight decrease compared to the third quarter of 2024[82] - Net loss totaled $42.1 million, or $1.22 per diluted share, an increase of 28.7% from a net loss of $32.7 million, or $0.84 per diluted share in the third quarter of 2024[82] - Adjusted EBITDA was $59.4 million, a decrease of 13.0%, or $8.9 million, from the third quarter of 2024[82] - Total revenues for the third quarter of 2025 decreased by $4.8 million to $448.2 million compared to $453.0 million for the third quarter of 2024, primarily due to a $16.4 million decrease in comparable store sales[107] - Comparable store revenues were $389.6 million, down from $406.0 million, reflecting a reduction in walk-in business relative to the prior year[107] - Entertainment revenues accounted for 62.3% of total revenues in the third quarter of 2025, down from 65.0% in the same period of 2024[107] - Adjusted EBITDA for the third quarter of 2025 was $59.4 million, or 13.3% of total revenues, compared to $68.3 million, or 15.1%, in the same period of 2024[104] - The net loss for the third quarter of 2025 was $42.1 million, or 9.4% of total revenues, compared to a net loss of $32.7 million, or 7.2%, in the third quarter of 2024[104] Store Operations - For fiscal 2025, the comparable store base consists of 210 stores, including 153 Dave & Buster's and 57 Main Event stores[85] - Six new Dave & Buster's branded stores and three new Main Event locations were opened in the nine months ended November 4, 2025[86] - The company operates stores averaging 36,800 square feet for Dave & Buster's and 53,300 square feet for Main Event[84] - Company-owned stores increased to 241 at the end of the third quarter of 2025, up from 227 in the prior year[104] Revenue Trends - Seasonal factors historically lead to higher revenues in spring and year-end holidays, with lower revenues typically in the third quarter[99] - Comparable store sales decreased by 4.0% compared to the same period in 2024[82] - Total revenues for the nine months ended November 4, 2025, decreased by $25.0 million, or 1.6%, to $1,573.2 million compared to $1,598.2 million for the same period in 2024[124] - Comparable store revenues decreased by $81.5 million to $1,397.2 million, while noncomparable store revenues increased by $54.6 million to $149.3 million[124] - Entertainment revenues accounted for 64.2% of total revenues in the 2025 period, down from 66.1% in the 2024 period[124] Cost and Expenses - Total cost of products decreased to $63.5 million, representing 14.2% of total revenues, down from 15.0% in the prior year[108] - Operating payroll and benefits increased to $124.9 million, accounting for 27.9% of total revenues, compared to 26.7% in the third quarter of 2024[111] - General and administrative expenses rose to $32.9 million, representing 7.3% of total revenues, up from 5.4% in the prior year[113] - Total operating payroll and benefits increased to $398.6 million, representing 25.3% of total revenues, compared to 24.6% in 2024[128] - Other store operating expenses increased to $550.1 million, or 35.0% of total revenues, compared to 32.4% in 2024[129] - Cost of food and beverage products decreased to $140.7 million, with a percentage of 25.0% of food and beverage revenues, down from 26.9% in the 2024 period[127] - General and administrative expenses increased to $89.2 million in 2025 from $80.6 million in 2024, representing an increase of 8.0%[130] - Depreciation and amortization expense rose to $191.4 million in 2025, up from $174.2 million in 2024, primarily due to new store openings and remodels[131] - Pre-opening costs increased to $14.8 million in 2025 compared to $12.6 million in 2024, reflecting the timing of costs for new stores[132] Financial Position - Interest expense, net increased to $40.2 million in the third quarter of 2025, compared to $32.9 million in the prior year[116] - Interest expense, net increased to $115.7 million in 2025 from $99.9 million in 2024, primarily due to incremental interest from sale-leaseback transactions[134] - The effective tax rate for 2025 was 42.7%, significantly higher than 19.9% in 2024, influenced by a shift from pre-tax income to a pre-tax loss[136] - The Net Total Leverage Ratio as of November 4, 2025, was 3.3x, calculated using net debt of $1,593.1 million and Credit Adjusted EBITDA[150] Cash Flow and Capital Expenditures - Cash flow from operating activities decreased to $187.8 million for the 2025 period compared to $203.4 million for the 2024 period, primarily due to a decrease in net income and changes in working capital timing[155] - Total capital additions for the nine months ended November 4, 2025, were $268.3 million, down from $364.0 million for the same period in 2024, reflecting a decrease in new store and remodel expenditures[157] - Cash flow provided by financing activities was $136.8 million in the 2025 period, primarily from net debt proceeds and sale-leaseback transactions, partially offset by share repurchases[157] - Cash flow used in investing activities decreased to $317.9 million for the 2025 period from $359.9 million for the 2024 period, mainly due to reduced expenditures on new stores and remodels[155] - New store expenditures were $142.6 million for the nine months ended November 4, 2025, compared to $155.6 million for the same period in 2024[157] - The company reported maintenance capital expenditures of $30.8 million for the nine months ended November 4, 2025, down from $44.3 million in the prior year[157] Market Conditions - Economic conditions may impact supplier pricing and consumer spending, with potential for selective price increases to offset costs[100] - The company is exposed to commodity price fluctuations, which can materially impact food costs, and there is no assurance that these costs can be passed on to customers[161] - Severe inflation increases could adversely affect the company's business and financial condition, particularly if multiple cost factors rise simultaneously[163] - A hypothetical one percentage point interest rate change on the outstanding balance of the Credit Facility would impact annual results by approximately $15.9 million[162] Shareholder Actions - The company repurchased 1.04 million shares at an average price of $23.03 per share, with a remaining authorized limit of $104.1 million for future repurchases[151] - As of November 4, 2025, the company had cash and cash equivalents of $13.6 million, sufficient to meet operating requirements and capital allocation strategy for the next twelve months[153]