# Designer Brands Inc.: Form 10-Q for the period ended Nov 1, 2025

- Company: [Designer Brands Inc.](/companies/dbi.md) (CIK 1319947)
- Form: 10-Q
- Filed: 2025-12-09
- Accepted by EDGAR: Dec 9, 2025, 16:14 ET
- Period: 2025-11-01
- Accession: 0001319947-25-000064
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/1319947/000131994725000064/dsw-20251101.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/1319947/000131994725000064/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2025-11-01.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2025-08-03 to 2025-11-01 | $752.4m | us-gaap:Revenues |
| Revenue | 9 months, 2025-02-02 to 2025-11-01 | $2.18bn | us-gaap:Revenues |
| Gross profit | 3 months, 2025-08-03 to 2025-11-01 | $339.6m | us-gaap:GrossProfit |
| Gross profit | 9 months, 2025-02-02 to 2025-11-01 | $957.7m | us-gaap:GrossProfit |
| Selling, general and administrative | 3 months, 2025-08-03 to 2025-11-01 | $300.1m | us-gaap:SellingGeneralAndAdministrativeExpense |
| Selling, general and administrative | 9 months, 2025-02-02 to 2025-11-01 | $899.4m | us-gaap:SellingGeneralAndAdministrativeExpense |
| Operating income | 3 months, 2025-08-03 to 2025-11-01 | $42.7m | us-gaap:OperatingIncomeLoss |
| Operating income | 9 months, 2025-02-02 to 2025-11-01 | $62.0m | us-gaap:OperatingIncomeLoss |
| Income tax | 3 months, 2025-08-03 to 2025-11-01 | $11.9m | us-gaap:IncomeTaxExpenseBenefit |
| Income tax | 9 months, 2025-02-02 to 2025-11-01 | $13.5m | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months, 2025-08-03 to 2025-11-01 | $18.2m | us-gaap:NetIncomeLoss |
| Net income | 9 months, 2025-02-02 to 2025-11-01 | $11.6m | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2025-08-03 to 2025-11-01 | $0.35 | us-gaap:EarningsPerShareDiluted |
| Diluted EPS | 9 months, 2025-02-02 to 2025-11-01 | $0.23 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2025-08-03 to 2025-11-01 | $0.37 | us-gaap:EarningsPerShareBasic |
| Basic EPS | 9 months, 2025-02-02 to 2025-11-01 | $0.24 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2025-08-03 to 2025-11-01 | 51,532,000 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Diluted shares (weighted) | 9 months, 2025-02-02 to 2025-11-01 | 49,998,000 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 9 months, 2025-02-02 to 2025-11-01 | $67.6m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Capital expenditure | 9 months, 2025-02-02 to 2025-11-01 | $25.8m | us-gaap:PaymentsToAcquirePropertyPlantAndEquipment |
| Dividends paid | 9 months, 2025-02-02 to 2025-11-01 | $7.2m | us-gaap:PaymentsOfDividends |
| Share repurchases | 9 months, 2025-02-02 to 2025-11-01 | $0 | us-gaap:PaymentsForRepurchaseOfCommonStock |
| Cash and equivalents | at 2025-11-01 | $51.4m | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | at 2025-11-01 | $772.4m | us-gaap:AssetsCurrent |
| Total assets | at 2025-11-01 | $2.05bn | us-gaap:Assets |
| Current liabilities | at 2025-11-01 | $610.3m | us-gaap:LiabilitiesCurrent |
| Total liabilities | at 2025-11-01 | $1.75bn | us-gaap:Liabilities |
| Long-term debt | at 2025-11-01 | $463.1m | us-gaap:LongTermDebt |
| Current portion of debt | at 2025-11-01 | $6.8m | us-gaap:LongTermDebtCurrent |
| Shareholders' equity | at 2025-11-01 | $298.6m | us-gaap:StockholdersEquityIncludingPortionAttributableToNoncontrollingInterest |

## Management's discussion and analysis

As filed, 40,200 characters.

### EXECUTIVE OVERVIEW AND TRENDS IN OUR BUSINESS

For the third quarter of 2025, net sales decreased 3.2% with a decrease in total comparable sales of 2.4% when compared to the same period last year. Gross profit as a percentage of net sales for the third quarter of 2025 was 45.1%, an increase of 210 basis points when compared to the same period last year.

### EFFECTS OF MACROECONOMIC CONDITIONS AND TARIFFS

Macroeconomic conditions influenced by uncertain tariff policies, stock market indices, interest rates, inflation and employment levels, along with geopolitical unrest, continue to persist and create a challenging retail environment. Consumer spending on discretionary items, including our products, generally declines during periods of economic uncertainty, when disposable income is reduced, or when there is a reduction in consumer confidence. These macroeconomic conditions have had a negative impact on our operating results and liquidity during 2025 and we may continue to experience the impact of decreased consumer demand for our products and lower direct-to-consumer traffic. We have enacted certain mitigating actions, including alignment of inventory with current demand levels, expense and capital expenditure reductions, and accelerating sourcing diversification efforts. Although we have made progress in mitigating the impacts of certain macroeconomic conditions, our actions are not necessarily complete and they should be viewed as part of the process in which we will continue our efforts to better align our cost structure with our operating results. We are unable to predict the severity of macroeconomic uncertainty, whether or when such circumstances may improve or worsen, including from one of our quarterly reporting periods to the next, or the full impact such circumstances could have on our business. These factors ultimately could require us to enact further mitigating operating efficiency measures that could have a material adverse effect on our business, results of operations, and liquidity.

Following its January 2025 inauguration, the U.S. administration has taken action to increase tariffs assessed on most products imported into the U.S. The numerous announcements of changes to and delays of tariff policies has introduced heightened uncertainty regarding the future of global trade and the impact to our cost structure. All of the products manufactured through the Brand Portfolio segment come from third-party facilities outside of the U.S., with the majority of our units sourced from Asia. In addition to the merchandise sourced through our Brand Portfolio segment, our U.S. Retail and Canada Retail segments also source merchandise from domestic third-party suppliers, with many of these suppliers importing a large portion of their merchandise from Asia. We are closely monitoring this situation and evaluating the actions we have taken and additional actions we may take in the future, including cost mitigation measures and price adjustments. For our Brand Portfolio segment, we have adjusted our sourcing diversification by optimizing where we source from to mitigate the risk, maximize flexibility, and decrease costs. However, sourcing diversification could result in product quality issues, higher product costs, and/or not being able to source the quantity desired on a timely basis and there can be no assurance that we will be able to fully mitigate the impact of such tariffs or new tariffs in Asia or elsewhere.

Future impacts from macroeconomic conditions and tariffs are unknown at this time and could have a material adverse effect on our business, results of operations, and liquidity. Unfavorable developments may result in future write-downs or adjustments to inventories, receivables, the valuation allowance on deferred tax assets, and may also negatively impact the fair value of our reporting units, indefinite-lived tradenames, and long-lived assets, which could result in us recording impairment charges for amounts below their carrying value.

### FINANCIAL SUMMARY AND OTHER KEY METRICS

For the three months ended November 1, 2025:

- Net sales decreased to $752.4 million from $777.2 million for the same period last year.
- Gross profit as a percentage of net sales was 45.1% compared to 43.0% for the same period last year.
- Net income attributable to Designer Brands Inc. was $18.2 million, or $0.35 per diluted share, which included net after-tax charges of $1.4 million, or $0.03 per diluted share, primarily related to restructuring costs. For the three months ended November 2, 2024, net income attributable to Designer Brands Inc. was $13.0 million, or $0.24 per diluted share, which included net after-tax charges of $1.5 million, or $0.03 per diluted share, primarily related to impairment charges.

***Comparable Sales Performance Metric-*** The following table presents the percent change in comparable sales for each segment and in total:

| Change in comparable sales: | Three months ended November 1, 2025 | November 2, 2024 |
| --- | ---: | ---: |
| U.S. Retail segment | **(1.5)%** | (2.8)% |
| Canada Retail segment | **(6.6)%** | (4.6)% |
| Brand Portfolio segment - direct-to-consumer channel | **(21.5)%** | (7.5)% |
| Total | **(2.4)%** | (3.1)% |

We consider the percent change in comparable sales from the same previous year period, a primary metric commonly used throughout the retail industry, to be an important measurement for management and investors of the performance of our direct-to-consumer businesses. We include in our comparable sales metric sales from stores in operation for at least 14 months at the beginning of the applicable year. Stores are added to the comparable base at the beginning of the year and are dropped for comparative purposes in the quarter in which they are closed. Comparable sales include the e-commerce sales of the U.S. Retail and Canada Retail segments. Comparable sales for the Canada Retail segment exclude the impact of foreign currency translation and are calculated by translating current period results at the foreign currency exchange rate used in the comparable period of the prior year. Comparable sales include the e-commerce net sales of the Brand Portfolio segment from the direct-to-consumer e-commerce sites. The calculation of comparable sales varies across the retail industry and, as a result, the calculations of other retail companies may not be consistent with our calculation.

***Number of Stores-*** As of November 1, 2025 and November 2, 2024, we had the following number of stores:

|  | November 1, 2025 | November 2, 2024 |
| --- | ---: | ---: |
| U.S. Retail segment - DSW stores | **497** | 496 |
| Canada Retail segment: |  |  |
| The Shoe Co. stores | **120** | 125 |
| Rubino stores | **28** | 28 |
| DSW stores | **27** | 26 |
|  | **175** | 179 |
| Total number of stores | **672** | 675 |

22

### RESULTS OF OPERATIONS

### THIRD QUARTER OF 2025 COMPARED WITH THIRD QUARTER OF 2024

*(amounts in thousands, except per share amounts)*

| November 1, 2025 | Three months ended Amount | % of Net Sales | November 2, 2024 Amount | % of Net Sales | Change Amount% |  |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| Net sales | **$752,411** | **100.0%** | $777,194 | 100.0% | $(24,783) | (3.2)% |
| Cost of sales | **(412,792)** | **(54.9)** | (443,379) | (57.0) | 30,587 | (6.9)% |
| Gross profit | **339,619** | **45.1** | 333,815 | 43.0 | 5,804 | 1.7% |
| Operating expenses | **(300,056)** | **(39.9)** | (296,827) | (38.2) | (3,229) | 1.1% |
| Income from equity investments | **3,100** | **0.5** | 3,584 | 0.5 | (484) | (13.5)% |
| Impairment charges | **—** | **—** | (17,756) | (2.3) | 17,756 | NM |
| Operating profit | **42,663** | **5.7** | 22,816 | 2.9 | 19,847 | 87.0% |
| Interest expense, net | **(11,420)** | **(1.5)** | (11,565) | (1.5) | 145 | (1.3)% |
| Non-operating expenses, net | **(34)** | **—** | (260) | — | 226 | (86.9)% |
| Income before income taxes | **31,209** | **4.2** | 10,991 | 1.4 | 20,218 | 184.0% |
| Income tax benefit (provision) | **(11,891)** | **(1.6)** | 2,223 | 0.3 | (14,114) | NM |
| Net income | **19,318** | **2.6** | 13,214 | 1.7 | 6,104 | 46.2% |
| Net income attributable to redeemable noncontrolling interest | **(1,103)** | **(0.2)** | (202) | — | (901) | 446.0% |
| Net income attributable to Designer Brands Inc. | **$18,215** | **2.4%** | $13,012 | 1.7% | $5,203 | 40.0% |
| Earnings per share attributable to Designer Brands Inc.: |  |  |  |  |  |  |
| Basic earnings per share | **$0.37** |  | $0.25 |  | $0.12 | 48.0% |
| Diluted earnings per share | **$0.35** |  | $0.24 |  | $0.11 | 45.8% |
| Weighted average shares used in per share calculations: |  |  |  |  |  |  |
| Basic shares | **49,556** |  | 52,083 |  | (2,527) | (4.9)% |
| Diluted shares | **51,532** |  | 53,486 |  | (1,954) | (3.7)% |

NM - Not meaningful

### NET SALES

The following table summarizes net sales by segment:

*(dollars in thousands)*

| Segment net sales: | Three months ended November 1, 2025 Amount | % of Segment Net Sales | November 2, 2024 Amount | % of Segment Net Sales | Change Amount% |  | Comparable Sales |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| U.S. Retail | **$610,462** | **77.3%** | $615,495 | 75.9% | $(5,033) | (0.8)% | (1.5)% |
| Canada Retail | **77,279** | **9.8** | 83,504 | 10.3 | (6,225) | (7.5)% | (6.6)% |
| Brand Portfolio | **101,923** | **12.9** | 111,492 | 13.8 | (9,569) | (8.6)% | (21.5)% |
| Total segment net sales | **789,664** | **100.0%** | 810,491 | 100.0% | (20,827) | (2.6)% | (2.4)% |
| Elimination of intersegment net sales | **(37,253)** |  | (33,297) |  | (3,956) | 11.9% |  |
| Consolidated net sales | **$752,411** |  | $777,194 |  | $(24,783) | (3.2)% |  |

23

For the three months ended November 1, 2025, net sales decreased in the U.S. Retail segment over the same period last year primarily driven by a decline in comparable sales of $9.0 million, largely driven by lower comparable transactions of approximately 8% due to reduced traffic, partially offset by an increase in comparable average sales amounts per transaction. The decline in comparable sales was partially offset by an increase in non-product sales activity. Net sales decreased in the Canada Retail segment primarily driven by a decline in comparable sales, also due to lower traffic. The decrease in net sales for the Brand Portfolio segment was primarily due to a shift in timing of wholesale revenue from the third quarter to the fourth quarter in the current year.

### GROSS PROFIT

The following table summarizes gross profit by segment:

*(dollars in thousands)*

| Segment gross profit: | Three months ended November 1, 2025 Amount | % of Segment Net Sales | November 2, 2024 Amount | % of Segment Net Sales | Change Amount% |  | Basis Points |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| U.S. Retail | **$275,635** | **45.2%** | $264,384 | 43.0% | $11,251 | 4.3% | 220 |
| Canada Retail | **34,340** | **44.4%** | 37,181 | 44.5% | (2,841) | (7.6)% | (10) |
| Brand Portfolio | **28,968** | **28.4%** | 31,313 | 28.1% | (2,345) | (7.5)% | 30 |
| Total segment gross profit | **338,943** | **42.9%** | 332,878 | 41.1% | 6,065 | 1.8% | 180 |
| Net recognition of intersegment gross profit | **676** |  | 937 |  | (261) |  |  |
| Consolidated gross profit | **$339,619** | **45.1%** | $333,815 | 43.0% | $5,804 | 1.7% | 210 |

For the three months ended November 1, 2025, the increase in gross profit for the U.S. Retail segment over the same period last year was primarily driven by the higher margin rates but on lower net sales. Gross profit as a percentage of net sales increased for the U.S. Retail segment when compared to the same period last year primarily due to significantly lower promotional activity and higher penetration of non-product sales activities. The decrease in gross profit for the Canada Retail segment was primarily driven by the decrease in net sales. The decrease in gross profit for the Brand Portfolio segment was primarily due to lower net sales, partially offset by slightly higher margin rates due to product mix.

The net recognition of intersegment gross profit consisted of the following:

*(in thousands)*

| Intersegment recognition and elimination activity: | Three months ended November 1, 2025 | November 2, 2024 |
| --- | ---: | ---: |
| Elimination of net sales recognized by Brand Portfolio segment | **$(37,253)** | $(33,297) |
| Cost of sales: |  |  |
| Elimination of cost of sales recognized by Brand Portfolio segment | **28,929** | 23,823 |
| Recognition of intersegment gross profit for inventory previously purchased that was subsequently sold to external customers during the current period | **9,000** | 10,411 |
|  | **$676** | $937 |

24

### OPERATING EXPENSES

The following table summarizes operating expenses by segment:

*(dollars in thousands)*

| Segment operating expenses: | Three months ended November 1, 2025 Amount | % of Segment Net Sales | November 2, 2024 Amount | % of Segment Net Sales | Change Amount% |  | Basis Points |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| U.S. Retail | **$209,433** | **34.3%** | $203,877 | 33.1% | $5,556 | 2.7% | 120 |
| Canada Retail | **27,584** | **35.7%** | 26,703 | 32.0% | 881 | 3.3% | 370 |
| Brand Portfolio | **23,812** | **23.4%** | 27,150 | 24.4% | (3,338) | (12.3)% | (100) |
| Total segment operating expenses | **260,829** | **33.0%** | 257,730 | 31.8% | 3,099 | 1.2% | 120 |
| Corporate | **39,227** |  | 39,097 |  | 130 | 0.3% |  |
| Consolidated operating expenses | **$300,056** | **39.9%** | $296,827 | 38.2% | $3,229 | 1.1% | 170 |

For the three months ended November 1, 2025, operating expenses increased in the U.S. Retail segment over the same period last year primarily due to higher distribution and fulfillment costs with the addition of our new distribution center. Operating expenses as a percentage of net sales increased in the U.S. Retail segment due to the deleverage impact of lower net sales. Operating expenses as a percentage of net sales increased in the Canada Retail segment due to the deleverage impact of lower net sales. Operating expenses decreased in the Brand Portfolio segment primarily due to managing costs in response to lower net sales, which resulted in lower operating expenses as a percentage of net sales. Operating expenses were relatively flat for corporate shared services primarily due to lower personnel and other costs offsetting higher severance charges and the impact of an incentive compensation accrual reversal recorded in the same period last year.

### IMPAIRMENT CHARGES

There were no impairment charges for the three months ended November 1, 2025. During the three months ended November 2, 2024, we recorded impairment charges of $17.8 million including charges to long-lived assets with $9.2 million due to a vacated leased corporate office, $1.0 million due to an underperforming Canada Retail segment store and $0.6 million due to an underperforming U.S. Retail segment store, and to our equity investment ownership interest in Le Tigre of $7.0 million, resulting in no remaining value, due to the inability of Le Tigre to generate earnings with expected future losses.

### OPERATING PROFIT

The following table summarizes operating profit by segment:

*(dollars in thousands)*

| Segment operating profit: | Three months ended November 1, 2025 Amount | % of Segment Net Sales | November 2, 2024 Amount | % of Segment Net Sales | Change Amount% |  | Basis Points |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| U.S. Retail | **$66,202** | **10.8%** | $60,507 | 9.8% | $5,695 | 9.4% | 100 |
| Canada Retail | **6,756** | **8.7%** | 10,478 | 12.5% | (3,722) | (35.5)% | (380) |
| Brand Portfolio | **8,256** | **8.1%** | 7,747 | 6.9% | 509 | 6.6% | 120 |
| Total segment operating profit | **81,214** | **10.3%** | 78,732 | 9.7% | 2,482 | 3.2% | 60 |
| Corporate/eliminations | **(38,551)** |  | (55,916) |  | 17,365 | (31.1)% |  |
| Consolidated operating profit | **$42,663** | **5.7%** | $22,816 | 2.9% | $19,847 | 87.0% | 280 |

25

For the three months ended November 1, 2025, operating profit for the U.S. Retail segment increased over the same period last year due to higher gross profit, slightly offset by higher operating expenses. Operating profit for the Canada Retail segment decreased due to lower gross profit. Operating profit for the Brand Portfolio segment increased due to lower operating expenses partially offset by lower gross profit. Corporate/eliminations were favorable to consolidated operating profit due to impairment charges incurred last year. These factors led to an increase in consolidated operating profit for the three months ended November 1, 2025 as compared the same period last year.

### INCOME TAXES

For the three months ended November 1, 2025 and November 2, 2024, our effective tax rate was positive 38.1% and negative 20.2%, respectively. The effective tax rate for the three months ended November 1, 2025 differed from the statutory rate primarily due to the impact of permanent non-deductible compensation. The negative effective tax rate for the three months ended November 2, 2024 is the result of the change from a positive tax rate through the second quarter of 2024 to a negative rate through the third quarter of 2024.

### NINE MONTHS OF 2025 COMPARED WITH NINE MONTHS OF 2024

*(amounts in thousands, except per share amounts)*

| November 1, 2025 | Nine months ended Amount | % of Net Sales | November 2, 2024 Amount | % of Net Sales | Change Amount% |  |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| Net sales | **$2,179,082** | **100.0%** | $2,295,690 | 100.0% | $(116,608) | (5.1)% |
| Cost of sales | **(1,221,404)** | **(56.1)** | (1,292,315) | (56.3) | 70,911 | (5.5)% |
| Gross profit | **957,678** | **43.9** | 1,003,375 | 43.7 | (45,697) | (4.6)% |
| Operating expenses | **(899,380)** | **(41.3)** | (933,851) | (40.7) | 34,471 | (3.7)% |
| Income from equity investments | **8,105** | **0.4** | 9,019 | 0.4 | (914) | (10.1)% |
| Impairment charges | **(4,419)** | **(0.2)** | (17,756) | (0.8) | 13,337 | (75.1)% |
| Operating profit | **61,984** | **2.8** | 60,787 | 2.6 | 1,197 | 2.0% |
| Interest expense, net | **(34,955)** | **(1.6)** | (34,161) | (1.5) | (794) | 2.3% |
| Non-operating expenses, net | **(104)** | **—** | (512) | — | 408 | (79.7)% |
| Income before income taxes | **26,925** | **1.2** | 26,114 | 1.1 | 811 | 3.1% |
| Income tax benefit (provision) | **(13,462)** | **(0.6)** | 2,067 | 0.1 | (15,529) | NM |
| Net income | **13,463** | **0.6** | 28,181 | 1.2 | (14,718) | (52.2)% |
| Net income attributable to redeemable noncontrolling interest | **(1,845)** | **(0.1)** | (562) | — | (1,283) | 228.3% |
| Net income attributable to Designer Brands Inc. | **$11,618** | **0.5%** | $27,619 | 1.2% | $(16,001) | (57.9)% |
| Earnings per share attributable to Designer Brands Inc.: |  |  |  |  |  |  |
| Basic earnings per share | **$0.24** |  | $0.50 |  | $(0.26) | (52.0)% |
| Diluted earnings per share | **$0.23** |  | $0.48 |  | $(0.25) | (52.1)% |
| Weighted average shares used in per share calculations: |  |  |  |  |  |  |
| Basic shares | **48,971** |  | 55,570 |  | (6,599) | (11.9)% |
| Diluted shares | **49,998** |  | 57,116 |  | (7,118) | (12.5)% |

NM - Not meaningful

### NET SALES

The following table summarizes net sales by segment:

*(dollars in thousands)*

| Segment net sales: | Nine months ended November 1, 2025 Amount | % of Segment Net Sales | November 2, 2024 Amount | % of Segment Net Sales | Change Amount% |  | Comparable Sales |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| U.S. Retail | **$1,794,628** | **79.0%** | $1,878,556 | 78.1% | $(83,928) | (4.5)% | (4.6)% |
| Canada Retail | **206,261** | **9.1** | 213,813 | 8.9 | (7,552) | (3.5)% | (5.2)% |
| Brand Portfolio | **270,978** | **11.9** | 311,615 | 13.0 | (40,637) | (13.0)% | (25.9)% |
| Total segment net sales | **2,271,867** | **100.0%** | 2,403,984 | 100.0% | (132,117) | (5.5)% | (5.1)% |
| Elimination of intersegment net sales | **(92,785)** |  | (108,294) |  | 15,509 | (14.3)% |  |
| Consolidated net sales | **$2,179,082** |  | $2,295,690 |  | $(116,608) | (5.1)% |  |

For the nine months ended November 1, 2025, net sales decreased in the U.S. Retail segment over the same period last year primarily driven by the decline in comparable sales, largely driven by lower comparable transactions of approximately 9% due to reduced traffic, partially offset by an increase in comparable average sales amounts per transaction. Net sales also decreased by approximately $13.0 million in the U.S. Retail segment due to net store closures since the end of the third quarter of 2024, which was partially offset by an increase in shipping revenue and other non-product sales activity. Net sales decreased in the Canada Retail segment driven by a decline in comparable sales of $10.7 million, also due to lower traffic, and the unfavorable impact from foreign currency translation of $3.7 million, partially offset by an increase in net sales with the addition of Rubino. The decrease in net sales for the Brand Portfolio segment was primarily due to lower revenue from wholesale activity of $41.5 million (excluding Topo wholesale) as retail customers and the U.S. Retail segment pulled back on orders in the first half of the year and a shift in timing of wholesale revenue from the third quarter to the fourth quarter in the current year, partially offset by a $12.6 million increase in net sales from strong Topo wholesale activity, with the remaining decrease from direct-to-consumer sales, primarily from our Vince Camuto e-commerce site.

### GROSS PROFIT

The following table summarizes gross profit by segment:

*(dollars in thousands)*

| Segment gross profit: | Nine months ended November 1, 2025 Amount | % of Segment Net Sales | November 2, 2024 Amount | % of Segment Net Sales | Change Amount% |  | Basis Points |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| U.S. Retail | **$782,953** | **43.6%** | $821,708 | 43.7% | $(38,755) | (4.7)% | (10) |
| Canada Retail | **94,694** | **45.9%** | 98,642 | 46.1% | (3,948) | (4.0)% | (20) |
| Brand Portfolio | **74,147** | **27.4%** | 91,425 | 29.3% | (17,278) | (18.9)% | (190) |
| Total segment gross profit | **951,794** | **41.9%** | 1,011,775 | 42.1% | (59,981) | (5.9)% | (20) |
| Net recognition (elimination) of intersegment gross profit | **5,884** |  | (8,400) |  | 14,284 |  |  |
| Consolidated gross profit | **$957,678** | **43.9%** | $1,003,375 | 43.7% | $(45,697) | (4.6)% | 20 |

For the nine months ended November 1, 2025, the decrease in gross profit for the U.S. Retail and Canada Retail segments over the same period last year was primarily driven by the decrease in net sales at slightly lower margin rates. The decrease in gross profit for the Brand Portfolio segment was primarily due to the lower net sales at lower margin rates. Gross profit as a percentage of net sales decreased for the Brand Portfolio segment primarily due to unfavorable customer mix and the deleverage of fixed royalty expenses on lower net sales.

The net recognition (elimination) of intersegment gross profit consisted of the following:

*(in thousands)*

| Intersegment recognition and elimination activity: | Nine months ended November 1, 2025 | November 2, 2024 |
| --- | ---: | ---: |
| Elimination of net sales recognized by Brand Portfolio segment | **$(92,785)** | $(108,294) |
| Cost of sales: |  |  |
| Elimination of cost of sales recognized by Brand Portfolio segment | **68,528** | 76,090 |
| Recognition of intersegment gross profit for inventory previously purchased that was subsequently sold to external customers during the current period | **30,141** | 23,804 |
|  | **$5,884** | $(8,400) |

### OPERATING EXPENSES

The following table summarizes operating expenses by segment:

*(dollars in thousands)*

| Segment operating expenses: | Nine months ended November 1, 2025 Amount | % of Segment Net Sales | November 2, 2024 Amount | % of Segment Net Sales | Change Amount% |  | Basis Points |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| U.S. Retail | **$616,932** | **34.4%** | $619,427 | 33.0% | $(2,495) | (0.4)% | 140 |
| Canada Retail | **79,075** | **38.3%** | 75,944 | 35.5% | 3,131 | 4.1% | 280 |
| Brand Portfolio | **75,011** | **27.7%** | 92,794 | 29.8% | (17,783) | (19.2)% | (210) |
| Total segment operating expenses | **771,018** | **33.9%** | 788,165 | 32.8% | (17,147) | (2.2)% | 110 |
| Corporate | **128,362** |  | 145,686 |  | (17,324) | (11.9)% |  |
| Consolidated operating expenses | **$899,380** | **41.3%** | $933,851 | 40.7% | $(34,471) | (3.7)% | 60 |

For the nine months ended November 1, 2025, operating expenses decreased in the U.S. Retail segment over the same period last year primarily due to lower store selling expenses and personnel overhead costs of $9.2 million in line with lower net sales, partially offset by an increase in distribution and fulfillment costs with the addition of our new distribution center. Operating expenses as a percentage of net sales increased in the U.S. Retail segment due to the deleverage impact of lower net sales. Operating expenses increased in the Canada Retail segment primarily due to the addition of Rubino. Operating expenses as a percentage of net sales in the Canada Retail segment increased due to lower net sales on higher operating expenses. Operating expenses decreased in the Brand Portfolio segment primarily due to an $8.5 million decrease in marketing expenses with the remaining decrease primarily due to lower personnel overhead and other costs, in line with lower net sales. Operating expenses as a percentage of net sales decreased in the Brand Portfolio segment as the decline in operating expenses leveraged even with lower net sales. Operating expenses decreased for corporate shared services primarily due to lower professional fees.

### IMPAIRMENT CHARGES

During the nine months ended November 1, 2025, we recorded impairment charges to long-lived assets of $1.5 million due to an underperforming U.S. Retail segment store and $1.0 million due to underperforming Canada Retail segment stores, and to a cost-basis investment of $2.0 million of an interest in an equity security without a readily determinable fair value held at cost, which resulted in no remaining value due to the lack of liquidity and the deterioration in the business prospects of the investee. During the nine months ended November 2, 2024, we recorded impairment charges of $17.8 million including charges to long-lived assets with $9.2 million due to a vacated leased corporate office, $1.0 million due to an underperforming Canada Retail segment store and $0.6 million due to an underperforming U.S. Retail segment store, and to our equity investment ownership interest in Le Tigre of $7.0 million, resulting in no remaining value, due to the inability of Le Tigre to generate earnings with expected future losses.

### OPERATING PROFIT

The following table summarizes operating profit by segment:

*(dollars in thousands)*

| Segment operating profit: | Nine months ended November 1, 2025 Amount | % of Segment Net Sales | November 2, 2024 Amount | % of Segment Net Sales | Change Amount% |  | Basis Points |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| U.S. Retail | **$166,021** | **9.3%** | $202,281 | 10.8% | $(36,260) | (17.9)% | (150) |
| Canada Retail | **15,619** | **7.6%** | 22,698 | 10.6% | (7,079) | (31.2)% | (300) |
| Brand Portfolio | **7,241** | **2.7%** | 7,650 | 2.5% | (409) | (5.3)% | 20 |
| Total segment operating profit | **188,881** | **8.3%** | 232,629 | 9.7% | (43,748) | (18.8)% | (140) |
| Corporate/eliminations | **(126,897)** |  | (171,842) |  | 44,945 | (26.2)% |  |
| Consolidated operating profit | **$61,984** | **2.8%** | $60,787 | 2.6% | $1,197 | 2.0% | 20 |

For the nine months ended November 1, 2025, operating profit for the U.S. Retail segment decreased over the same period last year primarily due to lower gross profit. Operating profit for the Canada Retail segment decreased due to lower gross profit and higher operating expenses. Operating profit for the Brand Portfolio segment was relatively flat due to lower gross profit offset by lower operating expenses. Corporate/eliminations were favorable to consolidated operating profit due to lower corporate operating expenses and favorable intersegment activity. These factors led to an increase in consolidated operating profit for the nine months ended November 1, 2025 as compared to the same period last year.

### INCOME TAXES

For the nine months ended November 1, 2025 and November 2, 2024, our effective tax rate was positive 50.0% and negative 7.9%, respectively. The positive effective tax rate for the nine months ended November 1, 2025 differed from the statutory rate primarily due to the impact of permanent non-deductible compensation. The negative effective tax rate for the nine months ended November 2, 2024 was due to discrete tax benefits recognized, primarily related to the release of tax reserves no longer deemed necessary and state tax planning initiatives, which partially offset the tax calculated on income before income taxes at statutory rates.

### LIQUIDITY AND CAPITAL RESOURCES

### OVERVIEW

Our primary ongoing operating cash flow requirements are for inventory purchases, payments on lease obligations and licensing royalty commitments, other working capital needs, capital expenditures, and debt service. Our working capital and inventory levels fluctuate seasonally. We are committed to a cash management strategy that maintains liquidity to adequately support the operation of the business, pursue our growth strategy, and withstand unanticipated business volatility, including the impacts of the current macroeconomic conditions on our results of operations. We believe that cash generated from our operations, together with our current levels of cash, as well as the availability under our ABL Revolver, are sufficient to maintain our ongoing operations, support seasonal working capital requirements, fund capital expenditures, and meet our debt service obligations over the next 12 months and beyond. As discussed above in the "*Executive Overview and Trends in Our Business*" section under the heading "*Effects of Macroeconomic Conditions and Tariffs*," current macroeconomic conditions have had a negative impact on our operating results and liquidity during 2025 and we may continue to experience the impact of decreased consumer demand for our products. Future impacts are unknown at this time and could have a material adverse effect on our business, operations, results of operations, and liquidity.

The following table presents the key categories of our condensed consolidated statements of cash flows:

*(in thousands)*

|  | Nine months ended November 1, 2025 | November 2, 2024 | Change |
| --- | ---: | ---: | ---: |
| Net cash provided by operating activities | **$67,607** | $12,137 | $55,470 |
| Net cash used in investing activities | **(27,700)** | (50,692) | 22,992 |
| Net cash provided by (used in) financing activities | **(34,053)** | 26,155 | (60,208) |
| Effect of exchange rate changes on cash balances | **746** | (546) | 1,292 |
| Net increase (decrease) in cash and cash equivalents | **$6,600** | $(12,946) | $19,546 |

### OPERATING CASH FLOWS

The increase in net cash provided by operating activities during the nine months ended November 1, 2025 as compared to the same period last year was primarily due to improved working capital management as we adjusted inventories in line with lower net sales and the timing of vendor payments, partially offset by a decrease in net income recognized after adjusting for non-cash activity, including impairment charges and depreciation and amortization, and the receipt of income tax refunds of over $40.0 million during the nine months ended November 2, 2024.

### INVESTING CASH FLOWS

The decrease in net cash used in investing activities for the nine months ended November 1, 2025 as compared to the same period last year was primarily due to the reduction in capital expenditures of $13.1 million in line with the decline in operating results along with the impact of the acquisition of Rubino of over $16.0 million during the nine months ended November 2, 2024.

### FINANCING CASH FLOWS

For the nine months ended November 1, 2025, we had net cash used in financing activities primarily due to net payments on debt of $22.5 million on our ABL Revolver and Term Loan and dividend payments of $7.2 million. For the nine months ended November 2, 2024, we had net cash provided by financing activities primarily due to the net receipts of $113.0 million from our ABL Revolver, partially offset by the repurchase of 10.3 million Class A common shares at an aggregate cost of $68.6 million, dividend payments of $8.1 million, and payments on our Term Loan of $5.1 million.

### DEBT

***ABL Revolver-*** The ABL Revolver provides a revolving line of credit of up to $600.0 million, including a Canadian sub-limit of up to $60.0 million, a $75.0 million sub-limit for the issuance of letters of credit, a $60.0 million sub-limit for swing-loan advances for U.S. borrowings, and a $6.0 million sub-limit for swing-loan advances for Canadian borrowings. In addition, the ABL Revolver includes borrowings of $30.0 million under a FILO Term Loan, which may be repaid in full, but not in part, so long as certain payment conditions are satisfied. Once repaid, no portion of the FILO Term Loan may be reborrowed. The ABL Revolver, which matures in 2027, may be used to provide funds for working capital, capital expenditures, share repurchases, other expenditures, and permitted acquisitions as defined by the credit facility agreement. The amount of credit available is limited to a borrowing base formulated on, among other things, a percentage of the book value of eligible inventory and credit card receivables, as reduced by certain reserves. As of November 1, 2025, the revolving line of credit (excluding the FILO Term Loan) had a borrowing base of $493.6 million, with $322.7 million in outstanding borrowings and $4.0 million in letters of credit issued, resulting in $166.9 million available for borrowings.

***Term Loan-*** On June 23, 2023, we entered into a Term Loan, which matures at the earliest of the date the ABL Revolver matures (currently March 2027) or five years from closing of the Term Loan (June 2028). As of November 1, 2025, the Term Loan had an outstanding balance of $121.3 million.

***Debt Covenants-*** The ABL Revolver requires us to maintain a fixed charge coverage ratio covenant of not less than 1:1 when availability is less than the greater of $47.3 million or 10.0% of the maximum borrowing amount. At any time that liquidity is less than $100.0 million, the Term Loan requires a maximum consolidated net leverage ratio as of the last day of each fiscal month of 2.50 to 1.00, calculated on a trailing twelve-month basis. Testing of the consolidated net leverage ratio ends after liquidity has been greater than or equal to $100.0 million for a period of 45 consecutive days. The ABL Revolver and the Term Loan also contain customary covenants restricting certain activities, including limitations on our ability to sell assets, engage in acquisitions, enter into transactions involving related parties, incur additional debt, grant liens on assets, pay dividends or repurchase stock, and make certain other changes. There are specific exceptions to these covenants including, in some cases, upon satisfying specified payment conditions based on availability. As of November 1, 2025, we were in compliance with all financial covenants contained in the ABL Revolver and the Term Loan.

Refer to Note 11, *Debt*, of the condensed consolidated financial statements of this Form 10-Q for further information about our debt arrangements.

### PLANS FOR CAPITALIZED COSTS

During 2025, we expect to spend approximately $35.0 million to $45.0 million that will be capitalized for property and equipment and implementation costs for cloud computing arrangements accounted for as service contracts, $32.6 million of which was spent during the nine months ended November 1, 2025. Our future investments will depend primarily on the number of stores we open and remodel, infrastructure and IT projects that we undertake, and the timing of these expenditures.

### RECENT ACCOUNTING PRONOUNCEMENTS

The information related to recent accounting pronouncements as set forth in Note 1, *Description of Business and Significant Accounting Policies - Recently Issued Accounting Pronouncements*, of the condensed consolidated financial statements included in this Form 10-Q is incorporated herein by reference.

### CRITICAL ACCOUNTING POLICIES AND ESTIMATES

The preparation of our condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, and disclosure of commitments and contingencies at the date of the condensed consolidated financial statements and reported amounts of revenue and expenses during the reporting period. We base these estimates and judgments on factors we believe to be relevant, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. The process of determining significant estimates is fact-specific and takes into account factors such as historical experience, current and expected economic conditions, product mix, and in some cases, actuarial and valuation techniques. We constantly re-evaluate these significant factors and make adjustments where facts and circumstances dictate. While we believe that the factors considered provide a meaningful basis for the accounting policies applied in the preparation of the condensed consolidated financial statements, we cannot guarantee that our estimates and assumptions will be accurate. As the determination of these estimates requires the exercise of judgment, actual results may differ from those estimates, and such differences may be material to our condensed consolidated financial statements. Except as noted below, there have been no material changes to the application of critical accounting policies and estimates disclosed in our 2024 Form 10-K.

***Impairment of Goodwill and Other Indefinite-Lived Intangible Assets-*** In 2024, we performed a quantitative impairment test for the goodwill assigned to the U.S. Retail, Keds, Rubino, and Topo reporting units as of our fourth quarter measurement date. We determined for each of the reporting units that the fair value was in excess of their carrying value and a 10% decrease in fair value would not result in an impairment. Also in 2024, we performed a quantitative impairment test of our indefinite-lived tradenames for Keds, The Shoe Co., and Rubino as of our fourth quarter measurement date. We determined that the fair value of each of the indefinite-lived tradenames was in excess of the carrying value and a 10% decrease in fair value would not result in an impairment charge. Due to the current macroeconomic conditions with the continued softness in consumer demand, growing concerns of a potential recession, the evolving trade policies and volatility in our stock price, there is a higher level of uncertainty associated with the assumptions used in our impairment tests. Although we do not believe it is more likely than not that we have an impairment of goodwill or other indefinite-lived tradenames as of November 1, 2025, we will continue to monitor these macroeconomic conditions, including the potential impacts from new tariffs or trade restrictions, which could adversely affect the financial performance and valuation of our reporting units and indefinite-lived intangible tradename assets. Should these conditions lead to a significant decline in projected financial results, there could be material impairment charges related to these assets in future periods.

## Market risk

As filed, 231 characters.

We have market risk exposure related to interest rates and foreign currency exchange rates. There have been no material changes in our primary risk exposures or management of market risks from those disclosed in our 2024 Form 10-K.

## Controls and procedures

As filed, 949 characters.

### EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

We, under the supervision and with the participation of our management, including our Chief Executive Officer and Interim Principal Financial Officer, performed an evaluation of the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended ("Exchange Act")). Based on that evaluation, our Chief Executive Officer and Interim Principal Financial Officer concluded, as of the end of the period covered by this Form 10-Q, that such disclosure controls and procedures were effective.

### CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING

No change was made in our internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f), during our last fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

## Risk factors

As filed, 2,325 characters.

Except as noted below, there have been no material changes to the risk factors as set forth in Part I, Item 1A., *Risk Factors*, in our 2024 Form 10-K.

***Recently announced changes to U.S. trade policy, including recently announced tariffs, could have a material adverse effect on our business, results of operations, and liquidity.***

Following its January 2025 inauguration, the U.S. administration has taken action to increase tariffs assessed on most products imported into the U.S. The numerous announcements of changes to and delays of tariff policies has introduced heightened uncertainty regarding the future of global trade and the impact to our cost structure. All of the products manufactured through the Brand Portfolio segment come from third-party facilities outside of the U.S., with the majority of our units sourced from Asia. In addition to the merchandise sourced through our Brand Portfolio segment, our U.S. Retail and Canada Retail segments also source merchandise from domestic third-party suppliers, with many of these suppliers importing a large portion of their merchandise from Asia. We are closely monitoring this situation and evaluating the actions we have taken and additional actions we may take in the future, including cost mitigation measures and price adjustments. For our Brand Portfolio segment, we have adjusted our sourcing diversification by optimizing where we source from to mitigate the risk, maximize flexibility, and decrease costs. However, sourcing diversification could result in product quality issues, higher product costs, and/or not being able to source the quantity desired on a timely basis and there can be no assurance that we will be able to fully mitigate the impact of such tariffs or new tariffs in Asia or elsewhere. Future impacts from macroeconomic conditions and tariffs are unknown at this time and could have a material adverse effect on our business, results of operations, and liquidity. Unfavorable developments may result in future write-downs or adjustments to inventories, receivables, the valuation allowance on deferred tax assets, and may also negatively impact the fair value of our reporting units, indefinite-lived tradenames, and long-lived assets, which could result in us recording impairment charges for amounts below their carrying value.

Filed Dec 9, 2025.
Source: SEC EDGAR, the filing index for accession 0001319947-25-000064. Last ingested by Listed: Nov 3, 2026, 19:27 ET. No prices; not investment advice.