BOOT 10-K & 10-Q changes, risk factors and insider trading

Investing in our common stock involves a high degree of risk. You should carefully consider the risks and uncertainties described below, together with all of the other information in this Form 10-K, including our consolidated financial statements and the related notes included elsewhere in this Form 10-K.10-K, and in our other public filings. The risks described below are not the only ones facing us. If any of the following risks or additional risks and uncertainties not presently known to us or that we currently believe to be immaterial were realized, our business, financial condition, results of operations and prospects could be materially and adversely affected. In that event, the price of our common stock could decline, and you could lose part or all of your investment. This Annual Report also contains forward-looking statements and estimates that involve risks and uncertainties. Our actual results could differ materially from those anticipated in the forward-looking statements as a result of specific factors, including the risks and uncertainties described below.

Our sales could be severely impacted by decreases in consumer spending due to declines in consumer confidence or local economic conditions in our markets.conditions.

We depend upon consumers feeling confident about spending discretionary income on our products to drive our sales. Consumer spending may be adversely impacted by economic conditions, such as consumer confidence in future economic conditions, income taxes, payroll taxes, continued uncertainty with respect to tariffs, rising or uncertain interest rates, continued inflation, employment levels, salary and wage levels, the availability of consumer credit, consumer debt, the level of housing, energy and food costs, general business conditions and other challenges affecting the global economy.economy or impacting levels of disposable income. A worsening of economic conditions could adversely affect discretionary consumer spending, which could, in turn, negatively impact our revenues and operating results. Declines in consumer spending may result in decreased demand for our products, increased inventories, lower revenues, higher discounts, pricing pressure and lower gross margins.

Most of our merchandise is produced in foreign countries, making the price and availability of our merchandise susceptible to international trade risks and other international conditions, including tariffs,the impact of the imposition, modification, or threat of imposition of new or increased tariffs by the U.S. or foreign governments, supply chain disruptionsdisruptions, orand geopolitical conditions including the ongoing conflict between Russia and the Ukraine.tensions.

The majority of our exclusive brand products are manufactured in foreign countries, including Mexico and China.countries. In addition, we purchase most of our third-party branded merchandise from domestic suppliers that have a large portion of their merchandise made in foreign countries.

See “Changes toin U.S.tariff orpolicy otherregarding countries’merchandise tradeproduced policiesin, and tariffraw materials sourced from, certain countries have and import/exportcould regulationscontinue orto adversely affect our failure to comply with such regulations may have an adverse effect on our business, financial condition, and results of operationsbusiness.” below for a description of risks associated with recentlynew announcedor increased tariffs and/or implementedreciprocal tariffs. In addition, the countries, specifically Mexico and China,countries in which our merchandise currently is manufactured or may be manufactured in the future could become subject to additional trade restrictions imposed by the United States, including increased tariffs or quotas, embargoes and customsimport restrictions, which could increase the cost or reduce the supply of products available to us and have a material adverse effect on our business, financial condition and results of operations. Additionally, anyAny tariffs by China or other foreign countries on imports of our products could also adversely affect our international e-commerce sales. Any increase in our manufacturing costs, the cost of our merchandise or limitation on the amount of merchandise we are able to purchase, or any decrease in our international e-commerce sales, could have a material adverse effect on our financial condition and results of operations.

Recent U.S. policies and actions may also jeopardize certain global alliances and/or create geopolitical uncertainty. Responses by countries, such as sanctions, boycotts, export controls and tariffs, will adversely affect the global economy and financial markets and could adversely affect our business, financial condition and results of operations or otherwise aggravate the other risk factors that we identify herein. We cannot predict the scope of macroeconomic factors because these measures are complex and evolving. We are actively monitoring the changes and events and assessing the impact on our business, if any. In addition to the general uncertainty and overall risk from potential changes in U.S. laws and policies, as we make business decisions in the face of such uncertainty, we may incorrectly anticipate the outcomes, miss out on business opportunities, or fail to effectively adapt our business strategies and manage the adjustments that are necessary in response to those changes. These risks could adversely affect our revenues, reduce our profitability, and negatively impact our business.

Our failure to successfully address these challenges could have a material adverse effect on our financial condition and results of operations. We opened 80 stores in fiscal 2026, 60 stores in fiscal 2025, and 55 stores in fiscal 2024, and 45 stores in fiscal 2023.2024. We planintend to continue to openopening new stores in thefuture coming yearsperiods; however, there can be no assurance that we will opendo newso storesas in fiscal 2026 or thereafter,planned or that any such stores will be profitable. The expansion of our store base will place increased demands on our operational, managerial and administrative resources. These increased demands could cause us to operate our existing business less effectively, which in turn could cause the financial performance of our existing stores to deteriorate. Although we attempt to open new stores in prominent locations, it is possible that locations which were prominent when we opened our stores may lose favor over time. In addition, we plan to open some new stores within existing markets. Some of these new stores may open close enough to our existing stores that a segment of customers will stop shopping at our existing stores and instead shop at the new stores, causing sales and profitability at those existing stores to decline. If this were to occur with a number of our stores, this could have a material adverse effect on our financial condition and results of operations.

Our suppliers ship a portion of our in-store merchandise directly to our stores and a portion of our e-commerce merchandise to our e-commerce customers. In the future, as part of our long-term strategic planning, we may change our distribution model to increase the amount of merchandise that we self-distribute through a centralized distribution center or centers. Changing our distribution model to increase distributions from a centralized distribution center or centers to our stores and customers wouldcould initially involve significant capital expenditures, which could increase our borrowings and interest expense or temporarily reduce the rate at which we open new stores. In addition, if we are unable to successfully integrate a new distribution model into our operations in a timely manner, our supply chain could experience significant disruptions, which could reduce our sales and adversely impact our results of operations.

Increases in the price, and fluctuations in the availability and quality of fabrics and raw materials, such as cotton and leather, that our suppliers use to manufacture our products, as well as the cost of labor and transportation, due to inflation or otherwise, could have adverse impacts on our cost of merchandise and our ability to meet our customers’ demands. In particular, because key components of our products are cotton and leather, any increases in the cost of cotton or leather may significantly affect the cost of our products and could have an adverse impact on our cost of merchandise. The price and availability of such raw materials may fluctuate significantly, depending on many factors, including crop yields, weather patterns and other unforeseen events. For example, the frequency, severity and duration of extreme weather conditions and natural disasters, and water scarcity and poor water quality could adversely impact the cultivation of cotton, which is a key resource in the production of our merchandise. Additionally, significant inflationary pressures have and may continue to impact the cost of labor, cotton and other raw materials. Increased global uncertainty has also impacted and may in the future impact the cost, availability and quality of the fabrics or other raw materials used to manufacture our merchandise, and compliance with sanctions, customs trade orders and sourcing laws, such as those issued by the U.S. government related to the ongoing conflict in Russia and Ukraine and entities and individuals connected to China’s Xinjiang Uyghur Autonomous Region, could impact the price of cotton in the marketplace and the supply chain.

We must actively manage our purchase of inventory. We generally order our seasonal and exclusive brand merchandise several months in advance of it being received and offered for sale. If there is a significant decrease in demand for these products, or if we fail to accurately predict consumer demand, including by disproportionately increasing the penetration of our exclusive brand merchandise, we may be forced to rely on markdowns or promotional sales to dispose of excess inventory. This could have an adverse effect on our margins and operating income. Conversely, if we fail to purchase a sufficient quantity of merchandise, we may not have an adequate supply of products to meet consumer demand, thereby causing us to lose sales or adversely affecting our customer relationships. Any failure on our part to anticipate, identify and respond effectively to changing consumer demand and consumer shopping preferences could adversely affect our results of operations. If we are not able to adjust appropriately to such factors, our inventory management may be negatively affected, which could adversely impact our performance and our reputation.

We are the largest lifestyle retail chain devoted to western and work-related footwear, apparel and accessories in the United States. As of March 29,28, 2025,2026, we operated 459539 stores in 49 states, as well as anour e-commerce channel,platform, consistingwhich primarilyincludes ofour bootbarn.com,websites, sheplers.com,mobile countryoutfitter.com, idyllwind.comapp, and third-party marketplaces. Our stores feature a comprehensive assortment of brands and styles, coupled with attentive, knowledgeable store associates. Our product offering is anchored by an extensive selection of western and work boots and is complemented by a wide assortment of coordinating apparel and accessories. Many of the items that we offer are basics or necessities for our customers’ daily lives and typically represent enduring styles that are not meaningfully impacted by changing fashion trends.

Net sales reflect revenue from the sale of our merchandise at retail locations, as well as sales of merchandise through our e-commerce websites.platform. We recognize revenue upon the purchase of merchandise by customers at our stores and upon delivery of the product in the case of our e-commerce websites. Net sales also include shipping and handling fees for e-commerce shipments that have been delivered to our customers. Net sales are net of returns on sales during the period as well as an estimate of returns and award redemptions expected in the future stemming from current period sales. Revenue from the sale of gift cards is deferred until the gift cards are used to purchase merchandise.

Opening new stores is an important part of our growth strategy. We opened 60,80, 5560 and 4555 stores in fiscal 2025,2026, fiscal 20242025 and fiscal 2023,2024, respectively. We also closed one store in fiscal 2025 (and none in fiscal 20242026 or fiscal 20232024). Accordingly, same store sales areis only one measure we use to assess the success of our business and growth strategy. Some of our competitors and other retailers may calculate “same” or “comparable” store sales differently than we do. As a result, data in this annual report regarding our same store sales may not be comparable to similar data made available by other retailers.

Gross profit is equal to our net sales less our merchandise cost of goods sold, and buying, occupancy, and distribution center expenses. Merchandise cost of goods sold includes the cost of merchandise, inbound and outbound freight, obsolescence and shrinkage provisions, supplier allowances, and inventory acquisition-related costs. Buying, occupancy, and distribution center expenses include store and distribution center occupancy costs (including rent, depreciation and utilities), occupancy-related taxes, and compensation costs for merchandise purchasing, exclusive brand design and developmentdevelopment, sourcing, and distribution center personnel. These costs are significant and can be expected to continue to increase as we grow. The components of our reported cost of goods sold may not be comparable to those of other retail companies, including our competitors.

The components of our SG&A expenses may not be comparable to those of our competitors and other retailers. We expect our selling, general and administrative expenses will increase in future periods as a result of incremental share-basedstock-based compensation, legal, accounting and other compliance-related expenses and increases resulting from growth in the number of our stores.

We operate on a fiscal calendar which results in a 52- or 53-week fiscal year ending on the last Saturday of March unless April 1st is a Saturday, in which case the fiscal year ends on April 1st. In a 52-week fiscal year, each quarter includes thirteen weeks of operations; in a 53-week fiscal year, the first, second and third quarters each include thirteen weeks of operations, and the fourth quarter includes fourteen weeks of operations. Fiscal 20252026, 2025, and fiscal 2024 were each 52-week periods and fiscal 2023 was a 53-week period.periods. For ease of reference, we identify our fiscal years by reference to the calendar year in which the fiscal year ends.

Gross profit. Gross profit increased by $102.6$141.3 million, or 16.7%,19.7%, to $858.4 million in fiscal 2026 from $717.0 million in fiscal 2025 from $614.4 million in fiscal 2024.2025. As a percentage of net sales, gross profit was 37.5%38.1% and 36.9%37.5% for fiscal 20252026 and fiscal 2024,2025, respectively. Gross profit increased primarily due to an increase in sales and merchandise margin, partially offset by the occupancy costs of new stores. As a percentage of net sales, gross profit rate increased by 7060 basis points driven primarily by aan 13080 basis-point increase in merchandise margin rate partially offset by 6020 basis points of deleverage in buying, occupancy and distribution center costs. The increase in merchandise margin rate was primarily the result of supply chain efficiencies, lower shrink expense, better buying economies of scale, and growth in exclusive brand penetration.penetration, and supply chain efficiencies. The deleverage in buying, occupancy and distribution center costs was driven by the occupancy costs of new stores.

Selling, general and administrative expenses. SG&A expenses increased by $61.5$81.5 million, or 14.8%,17.1%, to $559.2 million in fiscal 2026 from $477.7 million in fiscal 20252025. fromAs $416.2a millionpercentage inof net sales, SG&A expenses were 24.8% for fiscal 2024.2026 compared to 25.0% for fiscal 2025. SG&A expenses increased primarily as a result of higher store payroll and store-related expenses associated with operating more stores, marketing expenses, and corporate general and administrative expenses, and marketing expenses in the current year. As a percentage of net sales, SG&A leveraged by 20 basis points primarily as a result of lower corporate general and administrative expenses were 25.0% in boththe fiscalcurrent-year 2025period. andIncluded fiscalin 2024.the prior-year period is a net benefit of $6.7 million related to the Company’s former Chief Executive Officer’s resignation.

Income tax expense. Income tax expense was $74.7 million in fiscal 2026 compared to $59.2 million in fiscal 2025 compared to $50.4 million in fiscal 2024.2025. Our effective tax rate was 24.6%24.9% and 25.4%24.6% for fiscal 20252026 and fiscal 2024,2025, respectively. The effective tax rate for fiscal 20252026 is lowerhigher than fiscal 20242025 primarily due to reductionsa decrease in nondeductibleexcess expenses,tax asbenefits well as an increase in pretax book income, partially offset by reducedon stock-based compensation tax benefits.compensation.

We rely on cash flows from operating activities and our credit facility as our primary sources of liquidity. Our primary cash needs are for inventories, operating expenses, occupancy expenses, capital expenditures associated with opening new stores and remodeling or refurbishing existing stores, improvements to our distribution facilities, marketing and information technology expenditures, debt service and taxes. We have historically used cash for acquisitions and the subsequent rebranding and integration of the stores acquired in those acquisitions. In addition to cash and cash equivalents, the most significant components of our working capital are accounts receivable, inventories, accounts payable and accrued expenses and other current liabilities. We also use cash to repurchase shares of our common stock under our authorized Repurchase Program. We believe that cash flows from operating activities and the availability of cash under our credit facility will be sufficient to cover working capital requirements, anticipated capital expenditures and other anticipated cash needs for at least the next 12 months.

Our liquidity is moderately seasonal. Our cash requirements generally increase in our third fiscal quarter as we incur additional marketing expenses and increase our inventory in advance of the Christmas shopping season. Our cash flows from operations decreasedincreased in fiscal 20252026 compared to fiscal 2024,2025, primarily as a result of ahigher $138.4net millionincome increase in cash paid for inventories year-over-year,and a $4.1$50.6 million decrease in cash paid for prepaidinventories expenses and other current assets, and a $24.0 million increase in cash provided by accounts payable and accrued expenses and other current liabilities.year-over-year.

As of March 29,28, 2025,2026, wethere didwere notno have an amountamounts outstanding under the Wells Fargo Revolver. The maturity date of the Wells Fargo Revolver is July 11, 2027.

Sales are recognized at the time of purchase by customers at our retail store locations. Sales are recorded net of taxes collected from customers. Transfer of control takes place at the point at which the customer receives and pays for the merchandise at the register. For e-commerce sales, revenue is recognized when control transfers to the customer, which generally occurs upon delivery of the product. On average, customers receive goods within approximately fivefour days of being ordered. The estimate of the transit times for these shipments is based on shipping terms and historical delivery times. Shipping and handling fees billed to customers for online sales are included in net sales and the related shipping and handling costs are classified as cost of goods sold in the consolidated statements of operations.

We reserve for projected merchandise returns based upon historical experience and various other assumptions that we believe to be reasonable. Customers can return merchandise purchased in-store within 30 days of the original purchase date and can return merchandise purchased aton bootbarn.com,our countryoutfitter.com,e-commerce sheplers.com and idyllwind.complatform within 60 days of the original purchase date. Merchandise returns are often resalable merchandise and the purchase price is generally refunded by issuing the same tender used in the original purchase. Merchandise exchanges of the same product and price are not considered merchandise returns and, therefore, are not included in the population when calculating our sales returns reserve. We record the impact of adjustments to our sales returns reserve quarterly within total net sales. Should the returns rate as a percentage of net sales significantly change in future periods, it could have a material impact on our results of operations.

We maintain a customer loyalty program atunder thewhich stores and bootbarn.com. Under the program, customersmembers accumulate points based on purchase activity. For customersmembers to maintain their active point balance, they must make a qualifying purchase of merchandise at least once in a 365-day period. Once a loyalty program member achieves a certain point level, the member earns awards that may be redeemed for credits on merchandise purchases. To redeem awards, the member must make a qualifying purchase of merchandise within 60 days of the date the award was granted. Unredeemed awards and accumulated partial points are accrued as unearned revenue until redemption or expiration and, upon redemption and expiration, as an adjustment to net sales using the relative standalone selling price method. If actual redemptions ultimately differ from accrued redemption levels, or if we further modify the terms of the program in a way that affects expected redemption value and levels, we could record adjustments to the unearned revenue accrual, which would affect net sales.

Operating and finance lease liabilities are recognized at the lease commencement date based on the present value of the fixed lease payments using the Company's incremental borrowing rates for its population of leases. The Company does not separate lease and non-lease components for all of its leases, and leases with an initial term of 12 months or less are excluded from balance sheet capitalization.leases. Related operating and finance lease right-of-use assets are recognized based on the initial present value of the fixed lease payments, reduced by cash payments received from landlords as lease incentives, plus any prepaid rent and other direct costs from executing the leases. Amortization of both operating and finance lease right-of-use assets is performed on a straight-line basis and recorded as part of rent expense in cost of goods sold and selling, general and administrative expenses on the consolidated statements of operations.expense. The majority of total lease costs is recorded as part of cost of goods sold, with the balance recorded in selling, general and administrative expenses on the consolidated statements of operations. The interest expense amortization component of the finance lease liabilities is recorded within interest expense on the consolidated statements of operations.

Goodwill and indefinite-lived intangible assets. Goodwill is recorded as the difference, if any, between the aggregate consideration paid for an acquisition and the fair value of the acquired net tangible and intangible assets. Intangible assets with indefinite lives include the Boot Barn trademark that was acquired as part of the recapitalization with Freeman Spogli & Co. on December 12, 2011, the Sheplers trademark acquired as part of our acquisition of Sheplers, Inc. and Sheplers Holding Corporation in June of fiscal 2016, the cost to register the Boot Barn trademark in Hong Kong, and the www.countryoutfitter.com website trademark we acquired as part of our asset acquisition in February of fiscal 2017.2017, and the purchase of the codyjames.com domain in fiscal 2026. We test goodwill and indefinite-lived intangible assets for impairment at least annually on the first day of the fourth quarter or more frequently if indicators of impairment exist, in accordance with the provisions of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 350, Goodwill and Other. This guidance provides us the option to first assess qualitative factors such as macroeconomic conditions, industry and market considerations, cost factors, overall financial performance and other relevant entity-specific events to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value.

Definite-lived intangible assets and long-lived assets. Definite-lived intangible assets consisthistorically consisted of certain customer lists.lists, Customerwhich lists arewere amortized over a five-year useful life based on their estimated attrition rate.rates. As of March 28, 2026, these assets were fully amortized.

We operate in a rapidly changing environment that involves a number of risks that could materially and adversely affect our business, financial condition, prospects, operating results or cash flows, including the risks contained in “Item 1A—Risk Factors” in our Fiscal 20252026 10-K. As of DecemberJune 27, 2025,2026, there were no material changes to the risks described in our Fiscal 20252026 10-K.

We believe that Boot Barn is the largest lifestyle retail chain devoted to western and work-related footwear, apparel, and accessories in the U.S. As of DecemberJune 27, 2025,2026, we operated 514566 stores in 49 states, as well as our e-commerce websites consisting primarily of bootbarn.com, sheplers.com, countryoutfitter.com, idyllwind.com, and third-party marketplaces, as well as the Boot Barn app. Our product offering is anchored by an extensive selection of western and work boots and is complemented by a wide assortment of coordinating apparel and accessories. Our storesstores, which are typically freestanding or located in strip centers, average 11,400 selling square feet and feature a comprehensive assortment of brands and styles, coupled with attentive, knowledgeable store associates. Many of the items that we offer are basics or necessities for our customers’ daily lives and typically represent enduring styles that are not meaningfully impacted by changing fashion trends.

We strive to offer an authentic, one-stop shopping experience that fulfills the everyday lifestyle needs of our customers,customers andand, as a result, many of our customers make purchases in both the western and work wear sections of our stores. We target a broad and growing demographic, ranging from passionate western and country enthusiasts, to workers seeking dependable, high-quality footwear and apparel. Our broad geographic footprint, which comprises more than four times as many stores as our nearest direct competitor that sells primarily western and work wear, provides us with significant economies of scale, enhanced supplier relationships, the ability to recruit and retain high quality store associates, and the ability to reinvest in our business at levels that we believe exceed those of our competition.

Net sales reflect revenue from the sale of our merchandise at retail locations, as well as sales of merchandise through our e-commerce websites and app.platform. We recognize revenue upon the purchase of merchandise by customers at our stores and upon delivery of the product in the case of our e-commerce websites and app.websites. Net sales also include shipping and handling fees for e-commerce shipments that have been delivered to our customers. Net sales are net of estimatedreturns and actualon sales during the period, as well as an estimate of returns and deductionsaward forredemptions estimatedexpected in the future awardstemming redemptions.from current period sales. Revenue from the sale of gift cards is deferred until the gift cards are used to purchase merchandise.

Our business is moderately seasonal,seasonal andand, as a result, our revenues fluctuate from quarter to quarter. In addition, our revenues in any given quarter can be affected by a number of factors, including the timing of holidays,holidays and weather patterns, rodeos, and country concerts.patterns. The third quarter of our fiscal year, which includes the Christmas shopping season, has historically produced higher sales and disproportionately largerhigher operating incomeresults than the other quarters of our fiscal year. However, neither the western nor the work component of our business has been meaningfully impacted by fashion trends or seasonality historically. We believe that many of our customers are driven primarily by utility and brand, and our best-selling styles.

If the criteria described with respect to acquired stores above are met, then all net sales of suchan acquired store, excluding those net sales before our acquisition of that store, are included for the period presented. However, when an acquired store is included for the period presented, the net sales of such acquired store for periods before its acquisition are included (to the extent relevant) for purposes of calculating “same store sales growth” and illustrating the comparison between the applicable periods. Pre-acquisition net sales numbers are derived from the books and records of the acquired company, as prepared prior to the acquisition, and are not independently verified by us.

Gross profit is equal to our net sales less our merchandise cost of goods sold.sold, Costand buying, occupancy, and distribution center expenses. Merchandise cost, cost of goods sold includes the cost of merchandise, inbound and outbound freight, obsolescence and shrinkage provisions, supplier allowances, and inventory acquisition-related costs. Buying, occupancy, and distribution center expenses include store and distribution center occupancy costs (including rent, depreciation, and utilities), inbound and outbound freight, supplier allowances, occupancy-related taxes, and compensation costs for merchandise purchasing, exclusive brand design and development, sourcing, and distribution center personnel, and other inventory acquisition-related costs, and other inventory acquisition-related costs. These costs are significant and can be expected to continue to increase as we grow. The components of our reported cost of goods sold may not be comparable to those of other retail companies, including our competitors.

Our gross profit generally follows changes in net sales. We regularly analyze the components of gross profit, as well as gross profit as a percentage of net sales. Specifically, we examine the initial markup on purchases, markdowns and reserves, shrinkage, buying costs, distribution costs, and occupancy costs. Any inability to obtain acceptable levels of initial markups, or a significant increase in our use of markdowns or in inventory shrinkage, or a significant increase in freight and other inventory acquisition costs, could have an adverse impact on our gross profit and results of operations.

Gross profit is also impacted by shifts in the proportion of sales of our exclusive brand products compared to third-party brand products, as well as by sales mix changesshifts within and between brands and between major product categories such as footwear, apparel, or accessories.

The components of our SG&A expenses may not be comparable to those of our competitors and other retailers. We expect our SG&A expenses will increase in future periods as a result of incremental stock-based compensation, legal, and accounting-relatedaccounting and other compliance-related expenses and increases resulting from growth in the number of our stores.

Thirteen Weeks Ended DecemberJune 27, 20252026 Compared to Thirteen Weeks Ended DecemberJune 28, 20242025

Net sales. Net sales increased $97.5$89.4 million, or 16.0%,17.7%, to $705.6$593.5 million for the thirteen weeks ended DecemberJune 27, 20252026 from $608.2$504.1 million for the thirteen weeks ended DecemberJune 28, 2024.2025. Consolidated same store sales increased 5.7%.4.7%. Excluding the impact of the 19.6%13.4% increase in e-commerce same store sales, same store sales increased by 3.7%.3.8%. The increase in net sales was the result of incremental sales from new stores and the increase in consolidated same store sales.

Gross profit. Gross profit increased $114.1$42.7 million, or 20.8%,21.6%, to $662.6$239.9 million for the thirty-ninethirteen weeks ended DecemberJune 27, 20252026 from $548.5$197.2 million for the thirty-ninethirteen weeks ended DecemberJune 28, 2024.2025. As a percentage of net sales, gross profit increased by 100130 basis points to 38.6%40.4% for the thirteen weeks ended DecemberJune 27, 20252026 from 37.6%39.1% for the thirty-ninethirteen weeks ended DecemberJune 28, 2024.2025. GrossIncluded in gross profit increasedis primarily$14.7 duemillion toof tariff refunds recognized in cost of goods sold during the current-year period. The remaining increase was driven by an increase in sales and merchandise margin,sales, partially offset by the occupancy costs of new stores. The 130 basis-point increase in gross profit rate was driven primarily by a 120220 basis-point increase in merchandise margin rate,rate partially offset by 2090 basis points of deleverage in buying, occupancy and distribution center costs. The 220 basis-point increase in merchandise margin rate was primarily thedriven resultby a 250 basis-point of betterbenefit buyingfrom economiestariff refunds recognized during the current-year period and 60 basis points of scale,product growthmargin expansion, partially offset by a 90 basis-point decrease due to higher freight expense in exclusivethe brandcurrent-year penetration, and supply chain efficiencies.period. The deleverage in buying, occupancy and distribution center costs was primarily driven by the occupancy costs of new stores.

Selling, general and administrative expenses. SG&A expenses increased $61.9$22.9 million, or 17.2%,18.1%, to $420.7$149.4 million for the thirty-ninethirteen weeks ended DecemberJune 27, 20252026 from $358.8$126.5 million for the thirty-ninethirteen weeks ended DecemberJune 28, 2024.2025. The increase in SG&A expenses compared to the prior-year period was primarily the result of higher store payroll and store-related expenses associated with operating more stores, corporate general and administrative expenses, and marketing expenses in the current-year period. As a percentage of net sales, SG&A leverageddeleveraged by 10 basis points to 25.2% compared to 25.1% in the prior-year period, primarily as a result of lower corporate general and administrative expenses and legal expenses in the current-year period. Included in the prior-year period is a net benefittiming of $6.7marketing million related to the Company’s former Chief Executive Officer’s resignation. Excluding this benefit in the prior-year period, SG&A expenses as a percentage of net sales leveraged by 60 basis points.expenses.

Income from operations. Income from operations increased $52.3$19.8 million, or 27.6%,28.0%, to $241.9$90.5 million for the thirty-ninethirteen weeks ended DecemberJune 27, 20252026 from $189.7$70.7 million for the thirty-ninethirteen weeks ended DecemberJune 28, 2024.2025. The increase in income from operations was attributable to the factors noted above. As a percentage of net sales, income from operations was 14.1%15.3% and 13.0%14.0% for the thirteen weeks ended DecemberJune 27, 20252026 and DecemberJune 28, 2024,2025, respectively.

Interest expense. Interest expense was $1.2$0.3 million for both the thirty-ninethirteen weeks ended DecemberJune 27, 20252026 and DecemberJune 28, 2024.2025.

Income tax expense. Income tax expense was $61.5$22.3 million for the thirty-ninethirteen weeks ended DecemberJune 27, 20252026 compared to $46.8$17.9 million for the thirty-ninethirteen weeks ended DecemberJune 28, 2024.2025. Our effective tax rate was 25.3%24.1% and 24.6%25.1% for the thirty-ninethirteen weeks ended DecemberJune 27, 20252026 and DecemberJune 28, 2024,2025, respectively. The income tax rate for the thirty-ninethirteen weeks ended DecemberJune 27, 20252026 was higherlower than the income tax rate for the thirty-ninethirteen weeks ended DecemberJune 28, 2024,2025, primarily due to a lowerhigher income tax benefit from income tax accounting for stock-based compensation in the current-year period and changes to state enacted tax rates for the period ended December 27, 2025.period.

Net income. Net income was $181.4$70.1 million for the thirty-ninethirteen weeks ended DecemberJune 27, 20252026 compared to $143.4$53.4 million for the thirty-ninethirteen weeks ended DecemberJune 28, 2024.2025. The increase in net income was primarily attributable to the factors noted above.

Our primary ongoing sources of liquidity include funds provided by operations and borrowings under our revolving credit facility. We areexpect planningour tocash from operations will continue to openbe newsufficient stores,to remodelsupport our operations and refurbish our existing stores, make continued investments in our distribution centers, and make improvements to our e-commerce and information technology infrastructure, which will result in increasedanticipated capital expenditures.expenditures for the foreseeable future. We estimate that our total capital expenditures in fiscal 20262027 will be between approximately $125.0 million and $130.0 million (including the capital expenditures made during the thirty-ninethirteen weeks ended DecemberJune 27, 20252026), which is net of estimated landlord tenant allowances of $45.0$47.6 million. We anticipate that we will use cash flows from operations to fund these expenditures.

The amounts outstanding under the Wells Fargo Revolver and letter of credit commitments as of Decemberboth June 27, 20252026 and March 28, 2026 were zero and $4.0 million, respectively. The amounts outstanding under the Wells Fargo Revolver and letter of credit commitments as of March 29, 2025 were zero and $2.9 million, respectively. Total interest expense incurred on the Wells Fargo Revolver during the thirteen and thirty-nine weeks ended DecemberJune 27, 20252026 was $0.3$0.2 million and $0.6 million, respectively, and the weighted average interest rate for the thirteen weeks ended DecemberJune 27, 20252026 was 7.1%.6.8%. Total interest expense incurred on the Wells Fargo Revolver during the thirteen and thirty-nine weeks ended DecemberJune 28, 20242025 was $0.2 million and $0.6 million, respectively, and the weighted average interest rate for the thirteen weeks ended DecemberJune 28, 20242025 was 7.8%.7.5%.

The Wells Fargo Revolver contains customary provisions relating to mandatory prepayments, restricted payments, voluntary payments, affirmative and negative covenants, and events of default. In addition, the terms of the Wells Fargo Revolver require the Company to maintain, on a consolidated basis, a Consolidated Fixed Charge Coverage Ratio (as defined in the Wells Fargo Revolver) of at least 1.00:1.00 during such times as a covenant trigger event shall exist. The Wells Fargo Revolver also requires the Company to pay additional interest of 2.0% per annum upon triggering certain specified events of default set forth therein. For financial accounting purposes, the requirement for the Company to pay a higher interest rate upon an event of default is an embedded derivative. As of DecemberJune 27, 20252026 and March 29,28, 2025,2026, the fair value of this embedded derivative was estimated and was not significant.

As of DecemberJune 27, 2025,2026, the Company was in compliance with the Wells Fargo Revolver debt covenants.

Cash and cash equivalents were $200.1$139.3 million as of DecemberJune 27, 20252026 compared to $69.8$141.0 million as of March 29,28, 2025.2026.

Net cash provided by operating activities was $309.3$83.8 million for the thirty-ninethirteen weeks ended DecemberJune 27, 2025.2026. The significant components of cash flows provided by operating activities were net income of $181.4$70.1 million, the add-back of non-cash lease expense of $56.6$22.3 million, depreciation of $57.1$22.3 million, and stock-based compensation expense of $12.5$4.5 million. Accounts payable and accrued expenses and other current liabilities increased by $91.6$41.9 million due to the timing of payments. Inventory increased by $58.3$55.4 million as a result of an increase in purchases.

Net cash provided by operating activities was $190.7$73.9 million for the thirty-ninethirteen weeks ended DecemberJune 28, 2024.2025. The significant components of cash flows provided by operating activities were net income of $143.4$53.4 million, the add-back of non-cash lease expense of $49.3$17.9 million, depreciation and intangible asset amortization expense of $45.8$17.5 million, and stock-based compensation expense of $8.2$3.7 million. Accounts payable and accrued expenses and other current liabilities increaseddecreased by $77.3$6.5 million due to the timing of payments. Inventory increased by $91.2$26.9 million as a result of an increase in purchases.

Net cash used in investing activities was $136.7$51.1 million for the thirty-ninethirteen weeks ended DecemberJune 27, 2025,2026, which was primarily attributable to capital expenditures related to store construction and investments in our new Store Support Center.construction.

Net cash used in investing activities was $108.3$31.5 million for the thirty-ninethirteen weeks ended DecemberJune 28, 2024,2025, which was primarily attributable to capital expenditures related to store construction,construction and investments in our Kansasnew City,Store MissouriSupport distribution center, improvements to our e-commerce information technology infrastructure, and improvements to our distribution facilities.Center.

Net cash used in financing activities was $42.3$34.5 million for the thirty-ninethirteen weeks ended DecemberJune 27, 2025.2026. We paid $37.5$25.0 million to repurchase shares of our common stock under our authorized Repurchase Program and $4.3$9.5 million in taxes related to the vesting of restricted stock.

Net cash used in financing activities was $5.3$16.8 million for the thirty-ninethirteen weeks ended DecemberJune 28, 2024.2025. We paid $7.6$12.5 million to repurchase shares of our common stock under our authorized Repurchase Program and $4.2 million in taxes related to the vesting of restricted stock. We also received $2.9 million from the exercise of stock options.