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

An investment in our common stock involves a high degree of risk. You should carefully consider the risks described below, together with the financial and other information contained in this Annual Report on Form 10-K, including our financial statements and the related notes and under "“Management's Discussion and Analysis of Financial Condition and Results of Operations,"” before you decide to purchase, hold or sell shares of our common stock. If any of the following risks actually occurs,occur, our business, financial condition, results of operations and cash flows could be materially and adversely affected. As a result, the trading price of our common stock could declinedecline, and you could lose all or part of your investment in our common stock. Additionally, the risks and uncertainties described in this Form 10-K or in any document incorporated by reference herein are not the only risks and uncertainties that we face. Additional risks and uncertainties not presently known to us or that we currently believe to be immaterial may become material and adversely affect our business.

•the interruption of the flow of merchandise from international manufacturers, including as a result of the imposition of additional duties, tariffs and other charges on imports and exportsmanufacturers;

•our inability or failure to identifyidentify, adapt or respond to new trends and consumer shopping preferences, including the increasing use of GLP-1 medications;

•our failure to successfully adapt to consumer shopping preferences and develop and maintain a relevant and reliable omni-channel experience for our customers;

•our failure to effectively utilize information systems and implement new technologies or misuse or unauthorized use of these systems and technologies, including artificial intelligence and machine learning technologies;

•ourexposure to risks inherent in doing business globally as a result of sourcing a significant amount of our products from Chinavarious countries;

Consumer purchases of discretionary items, including our products, generally decline during recessionary periods and other periods where disposable income is adversely affected. Our performance is subject to factors that affect domestic and worldwide economic conditions, particularly those that affect our target demographic. These factors may include unemployment rates, levels of consumer and student debt, the availability of consumer credit, healthcare costs, reductions in net worth, residential real estate and mortgage markets, taxation, fuel and energy prices, interest rates, inflation, consumer confidence, the value of the United States dollar versus foreign currencies and other macroeconomic factors, such as the economic disruption caused by a global pandemic such as COVID-19.pandemic. Deterioration in economic conditions or increasing unemployment levels may reduce the level of consumer spending and inhibit consumers’ use of credit, which may adversely affect our net sales and profits. In recessionary periods, we may have to increase the number of promotional sales or otherwise dispose of inventory for which we have previously paid to manufacture, which could adversely affect our profitability in those periods. Weakened economic conditions and a slowdown in the economy could also adversely affect shopping center traffic and new shopping center development, which could materially adversely affect us.

Our target market of approximately 30 to 44 year old44-year-old plus- and mid-size women has stylistic preferences that cannot be predicted with certainty and areis subject to change. Our success depends in large part upon our ability to effectively identify and respond to changing product trends and consumer demands among this segment, and to translate market trends into appropriate, salable product offerings. In particular, the increasing use of GLP-1 medications may impact demand for our plus-size products as consumer preferences and body shapes evolve, potentially leading to inventory management challenges, markdowns, or lost sales. Our failure to identify and react appropriately to new and changing product trends or tastes, to accurately forecast demand for certain product offerings or an overall decrease in the demand for plus- and mid-size products could lead to, among other things, excess or insufficient amounts of inventory, markdowns and write-offs, which could materially adversely affect our business and our brand image. Because our success depends significantly on our brand image among our target segment, damage to our brand image as a result of our failure to identify and respond to changing product trends could have a material negative impact on our business. Additionally, as a direct-to-consumer brand focusing on young, plus- and mid-size women, we may not effectively identify product trends that appeal to our target segment or successfully adapt product trends prevailing in the market more broadly to this target segment. While we believe we have a flexible supply chain, we often enter into agreements for the manufacture and purchase of merchandise well ahead of the season in which that merchandise will be sold. Therefore, we are vulnerable to changes in consumer preferences and demand between the time we design and order our merchandise and the season in which this merchandise will be sold. Inventory levels for certain merchandise styles may exceed planned levels, leading to higher markdowns to sell through excess inventory and, therefore, lower than planned margins. Conversely, if we underestimate consumer demand for our merchandise, or if our manufacturers fail to supply quality products in a timely manner, we may experience inventory shortages, which may negatively impact customer relationships, diminish brand loyalty and result in lost sales.

We also compete with other retailers for personnel.talent. The competition for retail talent is increasing, and we may not be able to secure the talent we need to operate our stores without increasing wages. We cannot assure you that we will continue to be able to compete successfully against existing or future competitors. Our expansion into markets served by our competitors and entry of new competitors or expansion of existing competitors into our markets could have a material adverse effect on us.

We are continuing to grow our omni-channel business model.model, Whileand as we interact with many ofoptimize our customersretail largelystore throughfootprint and enhance our stores,e-Commerce ourpresence, we must further anticipate and implement innovations in customer experience and logistics to appeal to customers who increasingly rely on multiple channels to meet their shopping needs. Our customers are increasingly using computers, tablets and smartphones to make purchases online and to help them in making purchasing decisions when in our stores. Our customers also engage with us online through our social media channels, including Facebook, Instagram, Pinterest, TikTok, YouTube and Twitter, by providing feedback and public commentary about all aspects of our business. Omni-channel retailing is rapidly evolvingevolving, and our success depends on our ability to anticipate and implement innovations in customer experience and logistics in order to appeal to customers who increasingly rely on multiple channels to meet their shopping needs. If for any reason we are unable to implement our omni-channel initiatives or provide a convenient and consistent experience for our customers across all channels that provides the products they want, when and where they want them, then our financial performance and brand image could be adversely affected.

Our growth strategystrategy, including our retail store optimization strategy, is dependent on a number of factors, any of which could strain our resources or delay or prevent the successful penetration into new markets.

OurAs growthwe strategyclose isstores dependentand on a number of factors, including growingenhance our numbere-Commerce ofpresence, activewe customersface risks related to achieving expected cost savings, mitigating revenue impacts from reduced store presence, and thesuccessfully spendshifting percustomer customer.engagement to digital channels. Additional factors required for the successful implementation of our growth strategy include, but are not limited to, opening new stores and remodeling existing ones, continuing to operate an effective e-Commerce platform andplatform, implementing initiatives to improve our existing operations,operations and reduced store fleet, and to the extent we open new stores, obtaining desirable store locations, negotiating acceptable leases, completing projects on budget, supplying proper levels of merchandise and successfully hiring and training store managers and sales associates. In order to optimize profitability for newour stores,remaining store fleet, we must secure desirable retail lease space when opening stores in new and existing markets. We must choose store sites, execute favorable real estate transactions on terms that are acceptable to us, hire competent personnel and effectively open and operate these new stores. We historically have received landlord allowances for store build outs, which offset certain capital expenditures we must make to open a new store. If landlord allowances cease to be available to us in the future or are decreased, opening new stores or maintaining existing stores would require increased capital outlays, which could adversely affect our ability to continue openinginvesting newin stores.our business.

While we believe the opportunity exists to openoptimize aour substantialremaining numberstore of storesfootprint without competing with our existing units, to the extent we open new stores in markets where we have existing stores, our existing stores in those markets may experience reduced net sales. Moving or expanding store locations and operating stores in new markets may present competitive, merchandising and regulatory challenges we do not have experience in or know how to face. OurAny planned growth will also require additional infrastructure for the development, maintenance and monitoring of thosethe stores.selected Ingrowth addition, if our current management systems and information systems are insufficient to support this expansion, our ability to open new stores and to manage our existing stores would be adversely affected.strategy. If we fail to continue to improve our infrastructure, we may be unable to implement our growth strategystrategy, including our retail store optimization strategy, or maintain current levels of operating performance in our existing stores.

Our growth plans will place increased demands on our financial, operational, managerial and administrative resources. These increased demands may cause us to operate our business less efficiently, which in turn could cause deterioration in the performance of our e-Commerce operations or existing stores.

Executing our growth plans and achieving our objectives isare dependent upon our ability to successfully execute against such plans and objectives. There can be no guarantee that these plans or objectives will result in improved operating results or an increase in the value of the business.

We rely on third parties to provide us with certain key services for our business. If any of these third parties fails to perform itstheir obligations to us or declines to provide services to us in the future, we may suffer a disruption to our business. Furthermore, we may be unable to provide these services or implement substitute arrangements on a timely basis on terms favorable to us.

Failure to effectively utilize information systems andsystems, implement new technologiestechnologies, and manage AI-related risks could disrupt our business or reduce our sales or profitability.

We rely extensively on various information systems, including data centers, hardware and software and applications to manage many aspects of our business, including to process and record transactions in our stores, to enable effective communication systems, to track inventory flow, to manage logistics and to generate performance and financial reports. These various systems are substantially operated by our services provider, and we rely on them for efficient and consistent operations of these systems. We are dependent on the integrity, security and consistent operations of these systems and related back-up systems. Our computer systems and the third-party systems we rely on are also subject to damage or interruption from a number of causes, including power outages; computer and telecommunications failures; computer viruses, malware, phishing or distributed denial-of-service attacks; security breaches; cyber-attacks; catastrophic events such as fires, floods, earthquakes, tornadoes and hurricanes; acts of war or terrorism and design or usage errors by our associates or contractors. The increasing use of artificial intelligence (“AI”) and machine learning technologies also introduces new risks, such as AI-driven system failures, data biases, potential vulnerabilities to AI-specific threats, AI model drift, explainability issues, and potential liability for AI-related errors or biases. Compromises, interruptions or shutdowns of our systems, including those managed by third parties, whether intentional or inadvertent, could lead to delays in our business operations and, if significant or extreme, affect our results of operations.

Some aspects of our business, like that of most direct-to-consumer businesses, involvesinvolve the receipt, storage and transmission of customers’ personal information, consumer preferences and payment card information, including in relation to our private label credit card, as well as confidential information about our associates, our suppliers and our Company, some of which is entrusted to third-party service providers and vendors. We increasingly rely on commercially available systems, software, tools (including encryption technology) and monitoring to provide security and oversight for processing, transmission, storage and the protection of confidential information. Despite the security measures we have in place, our facilities and systems, and those of third parties with which we do business, may be vulnerable to security breaches, acts of vandalism and theft, computer viruses, misplaced or lost data, programming and/or human errors or other similar events. Additionally, as a result of state-sponsored cyber threats including those stemming from the Russian invasion of Ukraine, we may face increased cybersecurity risks as companies in the United States and its allied countries have become targets of malicious cyber activity.

Electronic security attacks designed to gain access to sensitive information by breaching mission critical systems of large organizations are constantly evolving, and high-profile electronic security breaches leading to unauthorized release of confidential information have occurred recently at a number of major U.S. companies. Attempts by computer hackers or other unauthorized third parties to penetrate or otherwise gain access to our computer systems or the systems of third parties with which we do business through fraud or other means of deceit, if successful, may result in the misappropriation of personal information, payment card or check information or confidential business information. Such incidents have been attempted orand have occurred in the past and may occur in the future. No incidents to date have had a material impact on the Company. Hardware, software or applications we utilize may contain defects in design or manufacture or other problems that could unexpectedly compromise information security. In addition, our associates, contractors or third parties with which we do business or to which we outsource business operations may attempt to circumvent our security measures in order to misappropriate such information and may purposefully or inadvertently cause a breach involving such information. Despite advances in security hardware, software and encryption technologies, the methods and tools used to obtain unauthorized access, disable or degrade service or sabotage systems are constantly changing and evolving, and may be difficult to anticipate or detect for long periods of time. We are implementing and updating our processes and procedures to protect against unauthorized access to or use of secured data and to prevent data loss. However, the ever- evolving threats mean we and our third-party service providers and vendors must continually evaluate and adapt our respective systems, procedures, controls and processes, and there is no guarantee that they will be adequate to safeguard against all data security breaches or misuses of data.

The interruption of the flow of merchandise from international manufacturers could disrupt our supply chain, including as a result of the imposition of additional duties, tariffstariffs, and other charges on imports and exports.

We source a significant amount ofSourcing our product receipts from China,various whichcountries exposes us to risks inherent in doing business there.globally.

Sourcing our product receipts from Chinathese countries exposes us to political, legal and economic risks. In particular, the political, legal and economic climate in China,these countries, both nationally and regionally, is fluid and unpredictable. Our ability to source product receipts from China may be adversely affected by changes in U.S. and Chineseforeign laws and regulations such as those related to, among other things, taxation, import and export tariffs, environmental regulations, land use rights, intellectual property, currency controls, network security, employee benefits, hygiene supervision and other matters. In addition, we may not obtain or retain the requisite legal permits to continue to source our product receipts from China,receipts, and costs or operational limitations may be imposed in connection with obtaining and complying with such permits. In addition, Chinese trade regulations are in a state of flux, and we may become subject to other forms of taxation, tariffs and duties in China. Furthermore, the third parties we rely on in Chinaother countries may disclose our confidential information or intellectual property to competitors or third parties, which could result in the illegal distribution and sale of counterfeit versions of our products.products Also,or outbreaksother misappropriation of epidemic,our pandemic,proprietary orrights. contagiousDisruptions diseases,to suchour assupply thechain COVID-19 outbreak originating in China, may adverselycould impact our ability to source products from China, including fabrics, or to source them in a timely manner. Such impacts on our sourcingdisruptions could result from, among other things, disruptions from the temporary closureclosures of third-party supplier and manufacturer facilities, restrictions on the export or shipment of our products or significant cutback of ocean container delivery from China.delivery. If any of these events occur, our business, financial condition and results of operations could be materially and adversely affected. See also "—The interruption of the flow of merchandise from international manufacturers could disrupt our supply chain, including as a result of the imposition of additional duties, tariffs and other charges on imports and exports" and "—Changes in tax laws or regulations or in our operations may impact our effective tax rate and may adversely affect our business, financial condition and results of operations."

In addition to our distribution facility, our corporate officesoffice areis also vulnerable to damage from natural disasters, fire, public health issues and other unexpected events which could cause us to experience significant disruption in our business, resulting in lost sales and productivity, and causing us to incur significant costs to repair, any of which could have a material adverse effect on our business.

We rely upon independent third-party transportation providers for substantially all of our product shipments and are subject to increased shipping costs as well as the potential inability of our third-party transportation providers to deliver on a timely basis.

We currently rely upon independent third-party transportation providers for substantially all of our product shipments, including shipments to our distribution center, to and from all of our stores and to our customers. Our utilization of these delivery services for shipments is subject to risks, including increases in fuel prices, which would increase our shipping costs, and employee strikes and inclement weather which may impact a shipping company's ability to provide delivery services that adequately meet our shipping needs. If we change the shipping companies we use, we could face logistical difficulties that could adversely affect deliveriesdeliveries, and we would incur costs and expend resources in connection with such change. Moreover, we may not be able to obtain terms as favorable as those received from our current independent third-party transportation providers which, in turn, would increase our costs.

Failure to comply with federalforeign and statedomestic laws and regulations and industry standards relating to privacy, data protection, advertising and consumer protection, or the expansion of current or the enactment of new laws, regulations or industry standards relating to privacy, data protection, advertising and consumer protection, could adversely affect our business, financial condition, and results of operations.

Laws, regulations and industry standards (including, for example, the Payment Card Industry Data Security Standard, or “PCI-DSS”) relating to privacy, data protection, marketing and advertising and consumer protection continue to evolve as new, increasingly restrictive legislation and regulations are coming into force and subject to potentially differing interpretations. These requirements may be interpreted and applied in a manner that is inconsistent from one jurisdiction to another or may conflict with other rules or our practices. As a result, our practices may not have complied or may not comply in the future with all such laws, regulations, standards, requirements and obligations. Any failure, or perceived failure, by us to comply with our posted privacy policies or with any federal or state privacy or consumer protection-related laws, regulations, industry self-regulatory principles, industry standards or codes of conduct, regulatory guidance, orders to which we may be subject, contracts by which we are bound, or other obligations relating to privacy or consumer protection could adversely affect our reputation, brand and business, and may result in claims, proceedings or actions against us by governmental entities, customers, suppliers or others or other liabilities or may require us to change our operations and/or cease using certain data sets. Any such claims, proceedings or actions may also hurt our reputation, brand and business, force us to incur significant expenses in defense of such proceedings or actions, distract our management, increase our costs of doing business, result in a loss of customers, suppliers or vendors and result in the imposition of monetary penalties. We may also be contractually required to indemnify and hold harmless third parties from the costs or consequences of non-compliance with any laws, regulations or other legal obligations relating to privacy or consumer protection or any inadvertent or unauthorized use or disclosure of data that we store or handle as part of operating our business. Further, we may publish privacy policies, marketing materials, and other statements, such as compliance with certain certifications or self-regulatory principles, regarding data privacy and security. If these policies, materials or statements are found to be deficient, lacking in transparency, deceptive, unfair or misrepresentative of our practices, then we may be subject to investigation, enforcement actions by regulators or other adverse consequences. For example, our compliance with our privacy policies and our general consumer data privacy and security practices may be subject to review by the Federal Trade Commission ("FTC"),FTC, which may bring enforcement actions to challenge allegedly unfair and deceptive trade practices, including the violation of privacy policies and representations or material omissions therein.

The following discussion summarizes the significant factors affecting the consolidated operating results, financial condition, liquidity and cash flows of our Company as of and for the periods presented below. The following discussion and analysis should be read in conjunction with the consolidated financial statements and the related notes thereto included elsewhere in this Annual Report on Form 10-K. This discussion contains forward-looking statements that are based on the beliefs of our management, as well as assumptions made by, and information currently available to, our management. Actual results could differ materially from those discussed in or implied by forward-looking statements as a result of various factors, including those discussed below and elsewhere in this Annual Report on Form 10-K, particularly in the section entitled "“Risk Factors."”

(C)Please referRefer to "“Results of Operations"” for a reconciliation of net (loss) income to Adjusted EBITDA.

Active Customers. We define an active customer as a distinct, identifiable customer who has completed at least one purchase transaction either in-store or online in the preceding four quarters. We are able to identify the vast majority of our customers primarily through our robust loyalty program, which gives us access to extensive customer and sales data. We have improved our customer tracking capabilities and have maintained the proportion of our net sales attributable to active customers over time. The proportion of net sales, excluding PLCC Funds (as defined in “Note 2–Summary of Significant Accounting Policies”below), that we are able to attribute to active customers was 97% for each of fiscal years 2024,2025, 20232024 and 2022.2023. We view the number of active customers as a key indicator of our performance, the reach of our e-Commerce and stores platform, the value proposition and consumer awareness of our brand and our customers'customers’ desire to purchase our products.

Adjusted EBITDA. Adjusted EBITDA is a supplemental measure of our operating performance that is neither required by, nor presented in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and our calculation thereof may not be comparable to similarly titled measures reported by other companies. Adjusted EBITDA represents GAAP net income (loss) plus interest expense less interest income, net of other (income) expense, plus provision for less (benefit from) income taxes, depreciation and amortization ("“EBITDA"”), and share-based compensation, noncash deductions and charges and other expenses. We believe Adjusted EBITDA facilitates operating performance comparisons from period to period by isolating the effects of certain items that vary from period to period without any correlation to ongoing operating performance. We also use Adjusted EBITDA as one of the primary methods for planning and forecasting the overall expected performance of our business and for evaluating on a quarterly and annual basis actual results against such expectations. Further, we recognize Adjusted EBITDA as a commonly used measure in determining business value and, as such, use it internally to report and analyze our results and as a benchmark to determine certain non-equity incentive payments made to executives.

•(benefit from) provision for income taxes;

Material Events and UncertaintiesFactors Affecting Our Performance

We believe that our performance and future success depend on a number of factors that present significant opportunities for us but also pose risks and challenges, including those discussed below and elsewhere in this Annual Report on Form 10-K and in the section titled "“Risk Factors."”

Customer Acquisition and Retention. Our success is impacted not only by efficient and profitable customer acquisition, but also by our ability to retain customers and encourage repeat purchases. It is important to maintain reasonable costs for these marketing efforts relative to the net sales and profit we expect to derive from customers. Failure to effectively attract customers on a cost-efficient basis would adversely impact our profitability and operating results. New requirementsRequirements for consumer disclosures regarding privacy practices,practices and new application tracking transparency framework that requires opt-in consent for certain types of tracking were implemented by third party providers in 2021, which has increased the difficulty and cost of acquiring and retaining customers. These changes may adversely affect our results of operations.

Customer Migration from Single to Omni-channel. We have a history of converting customers from single-channel customers to omni-channel customers, defined as active customers who shopped both online and in-store within the last twelve12 months. Customers that shop across multiple channels purchase from us more frequently and spentspend approximately 3.5 times more per year than our single-channel customer.

Overall Economic Trends. Our results of operations during any given period are often impacted by the overall economic conditions in the markets in which we operate. Consumer purchases of clothing generally remain constant or may increase during stable economic periods and decline during recessionary periods, inflationary periods and other periods when disposable income is adversely affected. Recent historic high rates of inflation have led to a softening of consumer demand. We have encountered inflation on our wages, transportation and product costs, and a material increase in these costs without any meaningful offsetting price increases may reduce our future profits. Government actions in various countries relating to tariffs, particularly countries in the East and Southeast Asia region, have introduced significant uncertainty to the current U.S. trade environment resulting in increased cost of goods sold and impacted gross margins. Beginning in early 2025, the U.S. government announced a series of broad import tariff increases, including new and expanded duties on goods imported from major sourcing countries that collectively supply a significant portion of our imports. The tariff environment has remained highly fluid, with executive orders, temporary pauses, partial reversals, and ongoing negotiations between the U.S. and its trading partners creating continuing uncertainty. On February 20, 2026, the U.S. Supreme Court issued a ruling striking down certain tariffs previously imposed under the IEEPA and following the Supreme Court’s decision, the U.S. presidential administration announced its intention to invoke other laws to collect tariffs and announced new tariffs on imports from all countries, in addition to any existing non-IEEPA tariffs. The degree of our exposure is dependent on (among other things) the countries in which the merchandise is manufactured, rates imposed, and timing of the tariffs. Higher tariffs may adversely impact our results.

Demographic Changes. The growth of our business is impacted, in part, by the size of the plus- and mid-size population. Slower or negative growth in this demographic, specific to certain geographic markets, income levelslevels, the increasing use of GLP-1 medications or overall, could adversely affect our results of operations.

Investments. We have invested significantly to strengthen our business, including augmenting leadership across our organization and enhancing our infrastructure and technology in order to realize growth. We anticipate that a significant portion of our operating expenses will growbe as we continueattributable to increase our spending on advertising and marketing and hirehiring additional personnel primarily in marketing, product design and development, merchandising, technology, operations, customer service and general and administrative functions. We are strategically working to expand and rebalance our store footprint, aiming for an optimal split betweenamong mallsmalls, outdoor centers and outdoor centers.online. We will also continue to make investments to improve the customer experience both in-store and online. We believe that such investments will increase the number and loyalty of our customers and, as a result, yield positive financial performance in the long term.

Seasonality. While seasonality frequently impacts businesses in the retail sector, our business is generally not seasonal. Accordingly, our net sales do not fluctuate as significantly as those of other brands and retailers from quarter to quarter and any modest seasonal effect does not significantly change the underlying trends in our business. Additionally, we do not generate an outsized share of our net sales or Adjusted EBITDA during the holiday season. Typically, our Adjusted EBITDA generation is strongest in the first half of the year as we benefit from more favorable merchandiseproduct margins, lower advertising and lower shipping expenses relative to the second half of the year. The lack of net sales seasonality provides structural cost advantages relative to peers, including reduced staffing cyclicality and seasonal distribution capacity needs.

Net Sales. Net sales reflects our revenues from the sale of our merchandise, shipping and handling revenue received from e-Commerce sales, royalties, profit-sharing and marketing and promotional funds from the use of private label credit cards (“PLCC Funds (as defined in “Note 2–Summary of Significant Accounting Policies”), and gift card breakage income, less returns, discounts and loyalty points/awards. Revenue from our stores is recognized at the time of sale and revenue from our e-Commerce channel is recognized upon shipment of the merchandise to the customer; except in cases where the merchandise is shipped to a store and revenue is recognized when the customer retrieves the merchandise from the store. Net sales are impacted by the size of our active customer base, product assortment and availability, marketing and promotional activities and the spending habits of our customers. Net sales are also impacted by the migration of single-channel customers (i.e., customers shopping only in-store or online) to omni-channel customers (i.e., customers shopping both in-store and online), who on average spend significantly more than single-channel customers in a given year.

Interest Expense. Interest expense consists primarily of interest expense and other fees associated with our ABL Facility (as defined below) and Amended Term Loan Credit Agreement.Agreement (as defined below).

Provision for (Benefit from) Income Taxes. Our provision for (benefit from) income taxes consists of an estimate of federal and state income taxes based on enacted federal and state tax rates, as adjusted for allowable credits, deductions and uncertain tax positions.

The following table provides a reconciliation of net (loss) income to Adjusted EBITDA for the periods presented (in thousands):

(B)Share-based compensation in fiscal yearyears 2025 and 2024 includes $0.3 million and $3.0 millionmillion, respectively, for awards that will be settled in cash as they are accounted for assimilar share-basedto compensationawards settled in shares in accordance with ASC 718, Compensation—Stock Compensation, similar to awards settled in shares.Compensation.

(C)Noncash deductions and charges includes noncash losses on property and equipment disposals and the net impact of noncash rent expense.

Net sales for fiscal year 20242025 decreased by $48.2$103.6 million, or 4.2%,9.4%, to $1,103.7$1,000.1 million,million from $1,151.9$1,103.7 million for fiscal year 2023.2024. This decrease was primarily driven by a decrease in sales transaction values, a decrease in PLCC Fundstransactions and sales oftransaction $21.7 million attributable to the 53rd week in fiscal year 2023, partially offset by improved pricing strategies. Comparable sales decreased 5.0%.values. The total number of stores we operate decreased by 21151 stores, or 3.2%,23.8%, to 483 stores at the end of fiscal year 2025, from 634 stores at the end of fiscal year 2024, fromprimarily 655due stores atto the endimplementation of fiscalour yearretail 2023.store optimization strategy.

Gross profit for fiscal year 20242025 increaseddecreased by $7.5$65.5 million, or 1.8%,15.8%, to $413.5$348.0 million, from $406.0$413.5 million for fiscal year 2023. This increase was primarily due to reduced product costs, an increase in sales of regular-priced products and a decrease in store occupancy costs, partially offset by decreased net sales.2024. Gross profit as a percentage of net sales increaseddecreased by 2.3%2.7% to 34.8% in fiscal year 2025 from 37.5% in fiscal year 20242024. fromThe 35.2%decrease in fiscalgross year 2023. This increaseprofit was primarily driven by reduceda productdecrease in net sales. The decrease in gross profit as a percentage of net sales was primarily driven by a decrease in net sales, increased merchandising payroll costs and an increase in sales of regular-priced products, partially offset by decreased net sales, an increase in store depreciation expenseexpense, and the deleverage of store occupancy costs and merchandising payroll costs as a result of lower net sales. In addition, new and increased tariffs on goods from the countries where we manufacture our merchandise had a negative impact on our gross profit for fiscal year 2025.

Selling, general and administrative expenses for fiscal year 20242025 increaseddecreased by $8.7$32.9 million, or 3.0%,10.9%, to $302.0$269.2 million, from $293.3$302.0 million for fiscal year 2023.2024. The increasedecrease was primarily due to a $9.1 million increase in headquarter general and administrative expenses and an $8.6 million increase in performance bonuses, partially offset by a $7.0$14.4 million decrease in store and e-Commerce payroll costs andcosts, a $1.6$6.3 million decrease in performance bonuses, a $5.6 million decrease in other store pre-openingoperating costs.costs, a $4.1 million decrease in headquarters general and administrative expenses, and a $2.4 million decrease in share-based compensation. Selling, general and administrative expenses as a percentage of net sales increaseddecreased by 1.9%0.5% to 26.9% in fiscal year 2025 from 27.4% in fiscal year 20242024. fromThe 25.5% in fiscal year 2023. This increasedecrease was primarily driven by increased headquarter general and administrative expenses and performance bonuses, partially offset by decreased store and e-Commerce payroll costs.costs, performance bonuses, other store operating costs, and share-based compensation, partially offset by the deleverage of headquarters general and administrative expenses as a result of lower net sales.

Interest expense was $31.8 million for fiscal year 2025, compared to $35.6 million for fiscal year 2024, compared to $39.2 million for fiscal year 2023.2024. The decrease was primarily due to a decrease in the variable interest rate associatedand witha lower balance on the Amended Term Loan Credit Agreement,Agreement datedresulting asfrom ofprincipal May 24, 2023, during fiscal year 2024 compared to fiscal year 2023.payments.

Benefit from/Provision for Income Taxes

The benefit from income taxes for fiscal year 2025 was $2.5 million and the provision for income taxes for fiscal year 2024 decreased by $1.1 million towas $5.3 million, from $6.4 million for fiscal year 2023.million. Our effective tax rate was 26.4% for fiscal year 2025 and 24.5% for fiscal year 2024 as compared to 35.6% for fiscal year 2023.2024. The decreaseincrease in the effective tax rate for fiscal year 20242025 as compared to fiscal year 20232024 was primarily due to thea decrease in our uncertain tax benefits and increases in the amount of non-deductible stock-based compensation for covered employees and statenon-deductible incomeshare-based taxes relative to income before provision for income taxescompensation for fiscal year 2024.2025.

Our business relies on cash flows from operations as our primary source of liquidity. We do, however, have access to additional liquidity, if needed, through borrowings under our ABL Facility. Our primary cash needs are for merchandise inventories, payroll, rent for our stores, headquarters and distribution center, capital expenditures associated with opening new stores and updating existing stores, logistics and information technology. We also need cash to fund our interest and principal payments on the Amended Term Loan Credit Agreement and ABL Facility and make discretionary repurchases of our common stock. The most significant components of our working capital are cash and cash equivalents, merchandise inventories, prepaid expenses and other current assets, accounts payable, accrued and other current liabilities and operating lease liabilities. We believe that cash generated from operations and the availability of borrowings under our ABL Facility or other financing arrangements will be sufficient to meet working capital requirements and anticipated capital expenditures for at least the next 12 months. There can be no assurance, however, that our business will generate sufficient cash flows from operations or that future borrowings will be available under our ABL Facility or otherwise to enable us to service our indebtedness, or to make capital expenditures in the future. Our future operating performance and our ability to service or extend our indebtedness will be subject to future economic conditions and to financial, business and other factors, many of which are beyond our control.

In fiscal year 2025, we implemented a retail store optimization strategy to better align our distribution with the demands of our customers who have increasingly demonstrated a preference for our online experience. We believe this strategy will enhance our customer experience, significantly reduce our cost structure, and improve working capital and cash flow generation, allowing us to reinvest more aggressively in customer reactivation and acquisition initiatives to support long-term revenue growth. In connection with thisour strategy,store optimization program, we closed 151 stores in fiscal year 2025 and2025, 20 stores in the first quarter of fiscal year 2026,2026 and intendcompleted tothis closeprogram upwith tothe 10closure of an additional six stores in the second quarter of fiscal year 2026. As part of our normal operating cadence, we will continue to carefully evaluate store performance against minimum profitability thresholds, which may result in store closures in the future.

(A)Refer to “Results of Operations” for a reconciliation of net income to Adjusted EBITDA. As discussed further below, net income and Adjusted EBITDA were benefited in each of the three and six months ended August 1, 2026 by $11.1 million from IEEPA tariff refunds.

Overall Economic Trends. Our results of operations during any given period are often impacted by the overall economic conditions in the markets in which we operate. Consumer purchases of clothing generally remain constant or may increase during stable economic periods and decline during recessionary periods, inflationary periods and other periods when disposable income is adversely affected. Recent historic high rates of inflation have led to a softening of consumer demand. We have encountered inflation on our wages, transportation and product costs, and a material increase in these costs without any meaningful offsetting price increases may reduce our future profits. Government actions in various countries relating to tariffs, particularly countries in the East and Southeast Asia region, have introduced significant uncertainty to the current U.S. trade environment resulting in increased cost of goods sold and impacted gross margins. Beginning in early 2025, the U.S. government announced a series of broad import tariff increases, including new and expanded duties on goods imported from major sourcing countries that collectively supply a significant portion of our imports. The tariff environment has remained highly fluid, with executive orders, temporary pauses, partial reversals, and ongoing negotiations between the U.S. and its trading partners creating continuing uncertainty. In early 2026, the U.S. Supreme Court issued a ruling striking downthat certain tariffs previously imposed under the International Emergency Economic Powers Act (“IEEPA”) andwere other laws to collect certain tariffs.unauthorized. Following that ruling, the U.S. Customs and Border Protection was directed to process refunds of the IEEPA tariffs which remain subject to ongoing litigation. On April 20, 2026, we submitted a refund application seeking the first phase of reimbursement of certain previously paid IEEPA tariff amounts totaling approximately $11.4$11.3 million. During the three-month period ended August 1, 2026, we received refunds of a portion of these previously paid IEEPA tariffs totaling approximately $11.1 million and associated interest totaling approximately $0.3 million. The degree of our exposure is dependent on (among other things) the countries in which the merchandise is manufactured, rates imposed, timing of the tariffs and potential refunds of such tariffs. Higher tariffs may adversely impact our results.

Our fiscal year ends on the Saturday nearest to January 31 and each fiscal year is generally comprised of four 13-week quarters (although in years with 53 weeks, the fourth quarter is comprised of 14 weeks). Fiscal years 2026 and 2025 are 52-week years. Fiscal years are identified according to the calendar year in which they begin. For example, references to “fiscal year 2026” or similar references refer to the fiscal year ending January 30, 2027. References to the firstsecond quarter of fiscal years 2026 and 2025 and to the three-monththree- and six-month periods ended MayAugust 2,1, 2026 and MayAugust 3,2, 2025, respectively, refer to the 13-week13- and 26-week periods then ended.

Three Months Ended MayAugust 2,1, 2026 Compared to Three Months Ended MayAugust 3,2, 2025

(B)During the three months ended May 2, 2026 and May 3, 2025, share-basedShare-based compensation includes $0.8$1.2 million and $0.2 million, respectively, for awards that will be settled in cash asduring theythe three months ended August 1, 2026 and was not material during the three months ended August 2, 2025. These awards are accounted for similar to awards settled in shares in accordance with ASC 718, Compensation—Stock Compensation.

(D)Other expenses include severance costs for certain key management positions, certain transaction and litigation fees,fees (including certain settlement costs), and the reimbursement of certain management expenses, primarily for travel, incurred by Sycamore on our behalf, which are not considered to be part of our core business.

Net sales decreased $20.2$31.1 million, or 7.6%,11.8%, to $245.8$231.7 million for the three months ended MayAugust 2,1, 2026, from $266.0$262.8 million for the three months ended MayAugust 3,2, 2025. This decrease was primarily driven by decreasesa decrease in sales transactions and sales transaction values primarily due to the implementation of our retail store optimization strategy.values. The total number of stores we operate decreased by 169118 stores, or 26.7%,20.5%, to 463457 stores as of MayAugust 2,1, 2026, from 632575 stores as of MayAugust 3,2, 2025, primarily due to the implementation of our retail store optimization strategy.

Gross profit for the three months ended MayAugust 2,1, 2026 decreased $14.6$3.7 million, or 14.4%,4.0%, to $86.8$89.7 million, from $101.4$93.5 million for the three months ended MayAugust 3,2, 2025. Gross profit as a percentage of net sales decreasedincreased 2.8%3.1% to 35.3%38.7% for the three months ended MayAugust 2,1, 2026 from 38.1%35.6% for the three months ended MayAugust 3,2, 2025. The decrease in gross profit was primarily driven by a decrease in net sales and increased promotional activity, partially offset by refunds of previously paid IEEPA tariffs of approximately $11.1 million and decreased store occupancy costs, store depreciation expense and distribution center expenses. The decreaseincrease in gross profit as a percentage of net sales was primarily driven by higherrefunds costsof frompreviously paid IEEPA tariffs imposed under IEEPA and increased promotional activity, partially offset by decreased store occupancy costs, store depreciation expense and distribution center expenses.expenses, partially offset by increased promotional activity.

Selling, general and administrative expenses for the three months ended MayAugust 2,1, 2026 decreased $6.3$8.6 million, or 9.0%,12.2%, to $63.7$61.9 million, from $70.0$70.5 million for the three months ended MayAugust 3,2, 2025. The decrease was primarily due to a $5.4$6.2 million decrease in store and e-Commerce payroll costs,costs primarily due to the implementation of our retail store optimization strategy, a $1.0$2.1 million decrease in performance bonuses and a $1.1 million decrease in headquarters general and administrative expenses, and a $0.4 million decrease in performance bonuses, partially offset by a $0.6 million increase in share-based compensation.expenses. Selling, general and administrative expenses as a percentage of net sales decreased 0.4%0.1% to 25.9%26.7% for the three months ended MayAugust 2,1, 2026 from 26.3%26.8% for the three months ended MayAugust 3,2, 2025. The decrease was primarily driven by decreased store and e-Commerce payroll costs,costs primarily due to the implementation of our retail store optimization strategy, and a decrease in performance bonuses, partially offset by increased share-based compensation and the deleverage of headquarters general and administrative expenses and other store operating costs as a result of lower net sales.

Marketing expenses for the three months ended MayAugust 2,1, 2026 decreasedincreased $0.8$0.5 million, or 5.3%,4.0%, to $14.5$13.3 million, from $15.4$12.8 million for the three months ended MayAugust 3,2, 2025. Marketing expenses as a percentage of net sales increased 0.1%0.9% to 5.9% for the three months ended May 2, 2026 from 5.8% for the three months ended MayAugust 3,1, 2026 from 4.9% for the three months ended August 2, 2025. The decrease in marketing expenses was primarily driven by decreases in social media and retargeting, partially offset by increased spend on photographic production, direct mail and models. The increase in both marketing expenses and marketing expenses as a percentage of net sales waswere primarily driven by theincreased deleveragespend ofon online marketing, models/model search, direct mail, photography and payroll and benefits expenses associated with our marketing expensesteam, aspartially aoffset resultby ofdecreases lowerin netsocial sales.media and retargeting.

Interest expense was $7.7$7.8 million for the three months ended MayAugust 2,1, 2026, compared to $8.2$8.1 million for the three months ended MayAugust 3,2, 2025. The decrease was primarily due to a decrease in the variable interest rate and a lower balance on the Amended Term Loan Credit Agreement resulting from principal payments, partially offset by an increase resulting from increased borrowing under the ABL Facility.

The provision for income taxes was $1.4 million for the three months ended August 1, 2026 and $0.5 million for the three months ended MayAugust 2, 2026 and $2.6 million for the three months ended May 3, 2025. Our effective tax rate was 52.5%21.0% for the three months ended MayAugust 2,1, 2026 and 30.7%23.7% for the three months ended MayAugust 3,2, 2025. The increasedecrease in the effective tax rate for the three months ended MayAugust 2,1, 2026 as compared to the three months ended MayAugust 3,2, 2025 was primarily due to the discrete recognition of refunds of previously paid IEEPA tariffs, partially offset by a decrease in the amount of non-deductible compensation for covered employees relative to income before income taxes for the three months ended MayAugust 2,1, 2026.

As of MayAugust 2,1, 2026, we had $22.8$22.0 million in cash and cash equivalents and $301.2$304.0 million of outstanding indebtedness, net of unamortized original issue discount and financing costs, of which $32.8$39.7 million consists of borrowings on our ABL Facility, which is accruing interest at an underlying variable rate of 7%, and $268.4$264.3 million consists of term loans under the Amended Term Loan Credit Agreement, which is accruing interest at an underlying variable rate of 9%. As of MayAugust 2,1, 2026, we had access to $77.2$52.4 million in additional liquidity from our ABL Facility, net of outstanding letters of credit.

As of MayAugust 2,1, 2026, we did not trigger a covenant compliance event and were compliant with our covenants under the ABL Facility.

As of MayAugust 2,1, 2026, we were compliant with our covenants under the Amended Term Loan Credit Agreement.

A summary of operating, investing and financing activities areis shown in the following table (in thousands):

Net cash provided by operating activities during the threesix months ended MayAugust 2,1, 2026 was $11.2$10.1 million compared to net cash used of $18.0$2.3 million during the threesix months ended MayAugust 3,2, 2025. The increase in net cash provided by operating activities during the threesix months ended MayAugust 2,1, 2026 was primarily as a result of an increase in accounts payable andcompared to a decrease in accounts payable in the six months ended August 2, 2025, partially offset by a lower decrease in accrued expenses and other current liabilities, partially offset by an increase in inventory and a decrease in net income.inventory.

Net cash used in investing activities during the threesix months ended MayAugust 2,1, 2026 was $5.5$7.4 million compared to $2.5$3.7 million during the threesix months ended MayAugust 3,2, 2025. The increase in net cash used in investing activities was primarily a result of an increase in capital expenditures due to an increased investment in store fixtures and equipmentequipment, and an increase in capital expenditures in our West Jefferson, Ohio distribution center during the threesix months ended MayAugust 2,1, 2026, compared to the threesix months ended MayAugust 3,2, 2025.

Net cash used in financing activities during the threesix months ended MayAugust 2,1, 2026 was $2.9$0.4 million compared to $4.7$21.5 million during the threesix months ended MayAugust 3,2, 2025. The decrease in net cash used in financing activities is primarily due to anthe increaseabsence inof neta borrowingsrepurchase relatedof toour common stock during the ABLsix Facility.months ended August 1, 2026.