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

Jewelry is a discretionary purchase often perceived as a luxury, making it sensitive to economic downturns and declines in disposable income. During recessions or periods of high unemployment, consumers tend to reduce discretionary spending. To address demand fluctuations, we have historically adjusted pricing and promotions, but such measures can pressure margins and earnings. Additionally, competition from other discretionary spending categories such as electronics, entertainment, and travel (especially during the Holiday Season) can further shift consumer priorities.

Rising inflation and increased operating costs including but not limited to tariffs, materials, labor, fulfillment and advertising may negatively impact our business. If we are unable to adjust pricing to offset these cost increases without negatively impacting demand, profitability may decline. Sharp commodity cost increasesincreases, including the recent impacts of gold and silver pricing, may create a lag before they are reflected in retail prices, affecting margins. If sustained, these costs may require higher inventory funding or adjustments in product offerings, disrupting sales and liquidity.

Additionally, the ability of Signet’s customers to obtain credit from our private label credit card providers and the terms of such credit depends on many factors, including continued arrangements with the parties providing the credit financing and compliance with applicable laws and regulations in the US and Canada, any of which may change from time to time. As discussed further in Note 11 to the consolidated financial statements in Item 8, Signet has outsourced its third-party credit programs, however, if any of those third-party credit providersagreements were to terminate, Signet may need to enter into other arrangements with other third-parties.third parties. If Signet is unable to find other potential providers to supply a similar third-party credit program and alternative payment options, Signet’s ability to extend credit to customers could be impaired, which could have an adverse effect on our business.

New tariffs, trade embargoes, sanctions or other restrictions on foreign trade, if imposed against entire nations or specific goods, supplies or materials that the Company imports, could have an adverse effect on the Company’s results of operations.operations, cash flows or financial condition.

The escalation of trade tensions has had and could continue to have a significant, adverse effect on world trade and the world economy. While the Company does not believe that tariffs will materially impact its business, the imposition of additional or increased tariffs on jewelry or other supplies and materials that the Company imports from ChinaIndia or other countries, or the Company’s inability to successfully manage inventory from such countries, could require the Company to further increase prices to its customers or, if unable to do so, result in loweringreduced itssales or lower gross margin on products sold.margins.

Public health crisis or disease outbreak, epidemic or pandemic, such as COVID-19 have had and could continue to have a significant adverse impact on our business, and this outbreak, as well as other public health crises or disease outbreaks, epidemics or pandemics, hassuch as COVID-19, have had and couldmay continuein tothe adverselyfuture have a significant adverse impact on our business, financial condition, results of operations and cash flows and could continue tomay exacerbate the effect of other risk factors.factors on our business.

A public health crisis or disease outbreak, epidemic or pandemic, such as COVID-19, or the threat or fear of such an event, could adversely impact our business. COVID-19 significantly impacted consumer traffic and our retail sales during Fiscal 2021,2021 and had long-term impacts on consumer shopping habits and trends. OurThe businessscope, mayduration, beand furtherseverity impactedof ifany thefuture economypublic deteriorateshealth duecrisis, as well as related governmental, regulatory, or behavioral responses, are inherently uncertain and could result in disruptions to theour long-termoperations, effectssupply ofchain, COVID-19workforce pandemicavailability, orconsumer otherdemand, disease.and financial markets.

Additionally, because many Signet stores are located within shopping malls or shopping centers, our sales are derived, in part, from the volume of traffic generated by the other destination retailers and the anchor stores in the malls and shopping centers where our stores are located. Customer traffic to these shopping areas may be adversely affected by the closing of such destination retailers or anchor stores, or by a reduction in traffic to such stores resulting from a regional or global economic downturn, an outbreak of flu or other viruses, increased crime, a general downturn in the local area where our store is located, or a decline in the desirability of the shopping environment of a particular mall or shopping center. Such a reduction in customer traffic would reduce our sales and leave us with excess inventory, which could have a material adverse effect on our business, financial condition, profitability, and cash flows. We may respond by increasing markdowns, initiating marketing promotions, or transferring product to other stores to reduce excess inventory, which would further decrease our gross profitsmargins and netoperating income.

Signet prepares its consolidated financial statements in US dollars. At FebruaryJanuary 1,31, 2025,2026, Signet held approximately 91%90% of its total assets in entities whose functional currency is the US dollar and generated approximately 91% of its sales in US dollars for the fiscal year then ended. All the remaining assets and sales are primarily in British pounds and Canadian dollars. Therefore, the Company’s results of operations and balance sheet are subject to fluctuations in the exchange rates between the US dollar and both the British pound and Canadian dollar. Accordingly, any decrease in the weighted average value of the British pound or Canadian dollar against the US dollar would decrease reported sales and operating income.

Extreme weather conditions in the areas in which the Company’s stores are located have negatively impacted sales in the past and could negatively affect the Company’s business and results of operations in the future. For example, frequent or unusually heavy snowfall, ice storms, flooding, extreme heat, prolonged cold periods, or other extreme weather conditions, whether as a result of climate change or otherwise, over a prolonged period could make it difficult for the Company’s salesforcesales force or customers to travel to its stores and thereby reduce the Company’s sales and profitability, particularly if such events occur during the Company’s Holiday Season. In addition, natural disasters such as hurricanes, tornadoes, floods, earthquakes, or wildfires, or a combination of these or other factors, could damage or destroy the Company’s facilities or make it difficult for the salesforcesales force or customers to travel to its stores, thereby negatively affecting the Company’s business and results of operations.

Terrorism, armed conflict, and acts of war (or the expectation of such events), both in the US and abroad, could also have a significant impact on Signet’s business and the worldwide economy. At times throughout the past several years, volatile geopolitical conditions have impacted the financial markets. Significant market volatility, and government actions taken in response, may exacerbate some of the risks we face. Conflicts abroad could cause decreased demand for the Company’s products as consumers’ attention and interests are diverted from jewelry and become focused on issues relating to these events.events or may impact consumers’ ability to purchase discretionary items, including jewelry, due to prolonged macroeconomic effects such as the rising cost of energy. For instance, the Russia-Ukraine conflictand hasrecent Iran-Middle East conflicts have adversely impacted and could continue to adversely impact, among other things, certain of the Company’s local markets and suppliers, global and local macroeconomic conditions, foreign exchange rates and financial markets, raw material, energy and transportation costs, and cause further supply chain disruptions. In addition, Signet operates quality control and technology centers in Israel. The recent Middle East conflicts could cause a disruption to Signet’s operations including, but not limited to, delays in product quality certification, failure to maintain or timely update the eCommercee-commerce platform for itsour Digital brands or impact itsour supply chain with vendors located in the Middle East. An inability to receive products after quality control, shortages of products or difficulties in procuring Signet’s products, or a disruption or shutdown of itsour digital brand websites, among others, may adversely impact itsour ability to commercialize, manufacture or market itsour products in a timely manner, any of which could have an adverse effect on Signet’s results of operations. Furthermore, there have been travel advisories imposed related to travel to Israel, and restriction on travel, or delays and disruptions as related to imports and exports may be imposed in the future. Volatile geopolitical conditions give rise to regional instability and may result in heightened economic sanctions from the US and the international community in a manner that adversely affects Signet’s business and may impact its ability to manufacture and ship its merchandise for sale to customers. Given that Signet’s control over such issues, including both weather disasters and large-scale violence, is extremely limited, the Company may not have the ability to mitigate the impacts of such occurrences on its business and operations.

Fluctuations in the pricing and availability of commodities, particularly polished diamonds and gold, which account for the majority of Signet’s merchandise costs, could adversely impact itsour earnings, inventory valuations and cash availability.

A material increase in the supply of gem quality lab-grown diamonds, combined with a material increase in consumer acceptance and demand thereof, has impacted and could continue to impact the cost and retail pricing of lab-grown and natural diamonds. Signet is a leading retailer of lab-grown diamonds and over the past several years the portion of our inventory, revenue and operating marginincome related to lab-grown diamonds has been increasing along with consumer demand and acceptance. In Fiscal 2025,2026, approximately 17%27% of Signet’s merchandise sales were products containing lab-grown diamonds. The costs of lab-grown diamonds have been declining over the past several years as more supply from producers becomes available. The increased supply and lower costs have and may continue to drive down retail prices of lab-grown diamonds, particularly those without specialty designs, cuts and brands, which may have a negative impact on our revenue, merchandise margins and operating results. Further, as retail prices of lab-grown diamonds decline, consumers who purchased lab-grown diamonds at higher prices may become disappointed in the relative value of their purchase which could negatively impact the reputation of Signet and the jewelry industry.

Alrosa, a Russian natural diamond mining and distribution company, supplies more than 30% of the world’s natural diamonds. Sanctions against Alrosa specifically or the Russian Oligarchs by the US government or other governments have limited and may further limit the supply of natural diamonds in the world.

The world’s sources of rough natural diamonds are highly concentrated in a limited number of countries. Varying degrees of political and economic risk exist in these countries. As a consequence, the natural diamond business is subject to various sovereign risks beyond Signet’s control, such as changes in laws and policies affecting foreign trade and investment. In addition, Signet is subject to various political and economic risks, including the instability of foreign economies and governments, labor disputes, war and civil disturbances and other risks that could cause production difficulties or stoppages, restrict the movement of inventory or result in the deprivation or loss of contract rights or the taking of property by nationalization or expropriation without fair compensation. Signet’s direct purchases from Alrosa and its sourcing arrangement in Russia ceased in February 2022 and did not represent a significant part of its operations. However, any further interruption in the total market supply of natural diamonds due to the ongoing Russia-Ukraine conflict or domestic or foreign government sanctions against Alrosa or Russian natural diamonds may impact the ability of Signet’s suppliers to provide Signet with responsibly sourced natural diamonds that were mined by other companies or in other countries. Beginning in March of 2024, leaders of the G7 nations announced they intend to phase-in further import restrictions against not only direct purchases of natural diamonds mined in Russia but also indirect purchases of natural diamonds mined in Russia (e.g. natural diamonds that were mined in Russia but then cut and polished in other countries). Any significant disruption of Signet’s sources of supply, or restriction of inventory movement could have a material adverse effect on Signet’s results of operations or cash flows.

In August 2012, the SEC, pursuant to the Dodd-Frank Act,Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”), issued final rules, which require annual disclosure and reporting on the source and use of certain minerals, including gold, from the Democratic Republic of Congo and adjoining countries. The gold supply chain is complex and, while management believes that the rules currently cover less than 1% of annual worldwide gold production, the final rules require Signet (and other affected companies that file with the SEC) to make specified country of origin inquiries of Signet’s suppliers, and otherwise to exercise reasonable due diligence in determining the country of origin and certain other information relating to any of the statutorily designated minerals (gold, tin, tantalum and tungsten), that are used in products sold by Signet in the US and elsewhere.

Signet’s business is highly seasonal, with a significant proportion of its salessales, operating income, and operatingcash profitflows generated during its fourth quarter, which includes the Holiday Season. Management expects Signet to continue to experience a seasonal fluctuation in its sales and earnings. Therefore, there is limited ability for Signet to compensate for shortfalls in fourth quarter sales or earnings by changes in its operations and strategies in other quarters, or to recover from any extensive disruption, for example, due to sudden adverse changes in consumer confidence, consumer spending ability, economic conditions, unexpected trends in merchandise demand, significant competitive and promotional activity by other retailers, inclement weather conditions having an impact on a significant number of stores, especially in the last few days immediately before Christmas Day or disruption to warehousing and store replenishment systems. Additionally, in anticipation of increased sales activity in the Holiday Season, Signet incurs certain significant incremental expenses prior to and during peak selling seasons, including advertising and costs associated with hiring a substantial number of temporary employees to supplement the Company’s existing workforce. A significant shortfall in results for the fourth quarter of any fiscal year would therefore be expected to have a material adverse effect on the annual results of operations and cash flows, as well as inventory levels. Disruption at lesser peaks in sales at Valentine’s Day and Mother’s Day would also be expected to adversely impact the results.

Any difficultydifficulty, delay or delayfailure in executing oracquisitions, integratingstrategic an acquisition, a business combinationinitiatives or atransformation major business or strategic initiativeplans could have a material adverse impact on expectedour returnsbusiness, results of operations and otherfinancial projected benefits from such an exercise.condition.

Consumer attitudes toward diamonds, gold and other precious metals and gemstones influence Signet’s sales. Attitudes could be affected by a variety of issues including: concern over the source of raw materials; the impact of mining and refining of minerals on the environment; the local community and the political stability of the producing country; labor conditions in the supply chain; changing perceptions related to the cultural custom of expressing commitments through engagements and weddings; and the availability of and consumer attitudes about substitute products such as cubic zirconia, moissanite and lab-grown diamonds. A negative change in consumer attitudes toward jewelry could adversely impact Signet’s sales and earnings. In addition, transparency regarding substitute products such as lab-grown diamonds is important to maintaining consumer confidence. If the Company does not appropriately and adequately identify the use of the substitute products in its jewelry, its reputation and results could be adversely impacted.

Signet depends on manufacturersmanufacturers, suppliers and suppliersbrand partners to timely provide it withtimely, sufficient quantities of quality and on-trend products.

TheIn growthaddition, inthe growing importance of other branded merchandise within the jewelry market maypresents adversely impact Signet’s salessupply and earningsexecution ifrisks. itIf Signet is unable to obtain suppliessufficient ofquantities of, develop, or further develop branded merchandise that the customer wishes to purchase. In addition, if Signet loses theretain distribution rights tofor anbrands importantthat brandedcustomers jewelry rangeprefer, or isif it remains committed to continue to carry a brandbrands that islose norelevance longeror viewedconsumer as on trend, it could adversely impactappeal, sales and earnings.earnings could be adversely affected.

Signet is in the process of substantially modifying its enterprise resource planning systems, inventory management systems, point of sale systems and certain web platforms, which involves updating or replacing legacy systems with successor systems and migrating some systems, data and functionality to cloud provider servers. These system changes and upgrades can require significant capital investments and dedication of resources. When evaluating and making such changes, there can be no assurances that the Company will successfully implement such changes, that significant additional investments will not be required beyond the project budget, that such changes will occur without disruptions to its operations or maintenance of its internal control compliance programs or that the new or upgraded systems will achieve the desired business objectives. Any damage, disruption or shutdown of the Company’s information systems, or the failure to successfully implement new or upgraded systems, could have a material adverse effect on Signet’s results of operations and its internal control over financial reporting.

In the ordinary course of business, Signet relies upon information technology networks and systems, some of which are managed by third parties, to process, transmit and store electronic information, and to manage or support a variety of business processes and activities, including eCommercee-commerce sales, supply chain, merchandise distribution, marketing, customer relationship management, customer invoicing and collection of payments. Our computer systems and those of our partners and third-party service providers have been and may be in the future vulnerable to physical or electronic intrusions, computer malware, malicious code or other attacks, system failures, programming errors, employee and third-party errors or wrongdoing, and similar disruption or adverse outcomes. In addition, as AI technologies develop rapidly, threat actors are using these technologies to create new sophisticated attack methods that are increasingly automated, targeted and coordinated, are both technology and social engineering oriented, and more difficult to defend against. The failure of theseour systemscomputer systems, manual processes and those of our partners and third-party service providers could cause significant interruptions to our operations, which could result in a material adverse effect on our business, financial condition or results of operations.

Signet also uses information technology systems to record, process and summarize financial information and results of operations for internal reporting purposes and to comply with regulatory financial reporting, legal and tax requirements. Signet collects and stores this financial and other sensitive data, including intellectual property, proprietary business information, the proprietary business information of its customers and suppliers, as well as personally identifiable information of Signet’s customers and employees, in data centerscenters, with cloud service providers, and on information technology networks. Although we have implemented and maintain what we believe to be reasonable security controls to seek to preventprevent, detect and detectrespond to attempts by unauthorized users to gain access to our ITinformation technology systems, and incur significant costs to do so, our information technology network infrastructure has in the past been and may in the future be vulnerable to attacks by hackers, including state-sponsored organizations with significant financial and technological resources, breaches due to employee error, fraud or malice or other disruptions (including, but not limited to, computer viruses and other malware, denial of service, data disclosure and ransomware), which may involve a privacy breach requiring us to notify regulators, customers or employees and enlist identity theft protection.

Signet and its third-party vendors have experienced successful attacks and breaches from time to time, however, to date, these attacks or breaches have not had a material impact on Signet’s business or operations. Any such malfunction, access, disclosure or other loss of information could result in legal claims or proceedings, liability or regulatory penalties under laws protecting the privacy of personal information, significant breach-notification costs, lost sales and a disruption to operations (including the Company’s ability to process consumer transactions and manage inventories), media attention, and damage to Signet’s reputation, which could adversely affect Signet’s business. In addition, it could harm Signet’s reputation and ability to execute its business through service and business interruptions, management distraction and/or damage to physical infrastructure, which could adversely impact sales, costs and earnings. If Signet is the target of a material cybersecurity attack resulting in unauthorized disclosure of its customer data, the Company may be required to undertake costly notification and credit monitoring procedures. Compliance with these lawsrequirements will likely increase the costs of doing business.

TheOur use of technology based on AI andAI, machine learning (“ML”), presentsand risksgenerative relatedAI (“Gen AI”) technologies, including customer-facing applications, may expose us to confidentiality, creationcybersecurity, ofoperational, inaccuratelegal, regulatory and flawedreputational outputs,risks and emerging regulatory risks which may result in reputational harm, competitive harm, or legal liability, and maycould adversely affect our business andbusiness, results of operations.operations and financial condition.

Refer to the “Results of Operations” section below for additional information on performance during the fourth quarter and full year Fiscal 2025.2026.

In Fiscal 2026, the Company launched its transformative Grow Brand Love strategy.strategy, This transformative strategywhich focuses on acceleratingdriving sustainable growth and builds on a strong core foundation to create shareholder value. In addition, this strategy emphasizes style and product innovation, captivating customer experiences, and Brandbrand loyalty while harnessing centralized core capabilities. In Fiscal 2027, we will be applying the learnings from year one to refine each of the strategy’s imperatives. The Company has identified three strategic imperatives as part of the Grow Brand Love framework have evolved into: shiftingshaping from banners to Brand mindset; growing our core businessdistinct and expandingcoveted intobrands; adjacentunlocking categoriesportfolio value; and organizationalstrengthening realignmentour tooperating accelerate strategy execution.model.

The Company also continues to monitorevaluate the impacts of certainother macroeconomic factors on its business, such as inflation and potential impacts of the Russia-Ukraineconflicts andin the Middle EastEast. conflicts.As previously discussed, Signet operates quality control and technology centers in Israel, and to date, these operations have not been impacted by the geopolitical conflict in the Middle East. While the Company currently does not expect disruptions to its operations in Israel to have a material impact on the Company’s results of operations, the Company will continue to closely monitor this conflict and any impacts on its business, as well as its team members in Israel. Uncertainties exist that could impact the Company’s results of operations or cash flows in the future, such as competitive pricing pressure, including on lab-grown diamonds, impacts of the US government shut down on consumer spending, continued inflationary impacts to the Company (including, but not limited to, materials, labor, fulfillment and advertising costs) or, adverse shifts in consumer discretionary spending, slower than anticipated recovery of engagements, deterioration of consumer credit, supply chain disruptions to the Company’s business, the Company’s ability to recruit and retain qualified team members, orand organized retail crime and its impact to mall traffic. In addition, the Company will monitor potential impacts of changes to US economic policy, including taxes and tariffs, as a result of the new administration. See “Forward-Looking Statements” above as well as the “Risk Factors” section within Item 1A.

The Company facesoperates ain the highly competitive jewelry industry and faces a dynamic retail landscape and challenging global macro-economic environment throughout the geographies where it does business, as well as a challenging global macro-economic environmentbusiness as described above impacting the jewelry industry.above. Refer to Item 1 for additional information on the Company’s business, markets and strategy.

Similar to many other retailers, Signet follows the retail 4-4-5 reporting calendar,calendar. which included an extra week in the fourth quarter and fiscal year periods ofBoth Fiscal 2024 (the “14th week”2026 and “53rd week”, respectively). The extra week added $103.2 million in sales in the fourth quarter and full year Fiscal 2024. Fiscal 2025 was awere 52-week reporting period.periods.

Management considers same store sales useful as it is a major benchmark used by investors to judge performance within the retail industry. Same store sales is calculated by comparison of sales in stores that were open in both the current and the prior fiscal year.year, excluding the impacts of changes in foreign exchanges rates, as further described below. Sales from stores that have been open for less than 12 months are excluded from the comparison until their 12-month anniversary. Similarly, sales from acquired businesses made within the last 12 months are excluded from the comparison until their 12-month anniversary. Sales from stores that were acquired during the period and have not been included in the Company’s results for both the current and prior period presented are also excluded from same store sales. Sales after the 12-month anniversary are compared against the equivalent prior period sales within the comparable store sales comparison. Stores closed in the current financial period are included up to the date of closure and the comparative period is correspondingly adjusted. Stores that have been relocated or expanded, but remain within the same local geographic area, are included within the comparison with no adjustment to either the current or comparative period. Stores that have been refurbished are also included within the comparison except for the period when the refurbishment was taking place, when those stores are excluded from the comparison both for the current year and for the comparative period. Same store sales are also impacted by certain accounting adjustments to sales, primarily related to the deferral of revenue from the Company’s extended service plans.

eCommerceE-commerce sales include all sales with customers that originate online, including direct to customer, ship to store, and BOPIS. eCommerceE-commerce sales are included in the calculation of same store sales for the period and the comparative figures from the 12-month anniversary of the launch of the relevant website. Brick and mortar same store sales are calculated by removing the eCommercee-commerce sales from the same store sales calculation described above. Comparisons at the divisional level are made in local currency and consolidated comparisons are made at constant exchange rates and exclude the effect of exchange rate movements by recalculating the prior period results as if they had been generated at the weighted average exchange rate for the current period.

TheIn a 53-week reporting period, the 14th week in the fourth quarter and 53rd weeksweek for the full year are excluded from same store sales in the fiscal year in which itthey occurs.occur. In the subsequent fiscal year, same store sales is calculated by aligning the sales weeks of the current period to the equivalent sales weeks in the prior fiscal year period.

Factors that influence gross margin include pricing, promotional environment, changes in merchandise costs,costs (including the underlying costs of diamond, gold and other precious metals and gemstones), changes in non-merchandise components of cost of sales (as described above), changes in sales mix, foreign exchange, and the economics of services such as repairs and extended service plans. The price of diamonds varies depending on their size, cut, color and clarity.

SG&A is mostly composed of store staff and store administrative costs as well as advertising and promotional costs. ItSG&A also includes centralized administrative expenses such as information technology, credit costs and other administrative operating expenses not specifically categorized elsewhere in the consolidated statements of operations.

The primary drivers of staffing costs are the number of full-time equivalent team members and the level of compensation, payroll taxes, benefits and incentives. Management varies, on a store by store basis, the hours worked based on the expected level of selling activity, subject to minimum staffing levels required to operate the store. Non-store staffing levels are less variable. A significant element of compensation is performance-based and is primarily dependent on sales and operating profit.income.

The level of advertising expenditures can vary year over year. In order to evolve its marketing allocations based on consumer habits, business needs, and maximize return on its advertising investments, the Company primarily focuses its spend on digital and social marking,marketing, supplemented by targetedadvertising nationalon televisionpremium advertising.video across both linear and streaming platforms.

Other operating (expense) income, net primarily consists of miscellaneous operating income and expense items such as litigation settlements, restructuring charges, gains or losses on the sale of assets (including divestitures), foreign currency gains and losses, and gains and losses from undesignated derivative contracts. See Note 21 inof Item 8 for further detail on the Company’s other operating (expense) income, net.

Signet’s total sales decreasedincreased 5.8% year over year1.6% to $2.4$6.81 billion compared to $6.70 billion in the fourthprior quarter.year. Same store sales decreasedincreased 1.1%,1.3%, compared to a decrease of 9.6%3.4% in the prior year quarter.year. These decreasesincreases were primarily thedriven resultby offilling merchandise assortment gaps at key gifting price points,points which were partially offset by increased AURboth in fashion and bridal.in Additionally,bridal, particularly in the decreaselargest inbrands, totalwhich reportedled salesto washigher AUR compared to the prior year. Services also continued to grow year over year, increasing approximately $58 million compared to the prior year, primarily due to higher extended service plan attachment rates. These increases were unfavorably impacted by same store closuressales declines in the James Allen and theDiamonds impactDirect ofbrands in the 14thcurrent weekyear ascompared notedto above.the prior year.

eCommerceE-commerce sales were $1.49 billion in the fourth quarter of Fiscal 2025 were $562.3 million,2026, down $31.1$36.0 million or 5.2%2.4%, compared to $593.4$1.52 millionbillion in the prior yearyear. fourth quarter, primarily due to lower traffic post re-platforming related to search engine optimization at the Digital brands noted above. eCommerceE-commerce sales accounted for 23.9%21.8% of fourth quartertotal sales, updown slightly from 23.8%22.7% of total sales in the prior yearyear. fourthThe quarter.decrease in total e-commerce sales was driven by the underperformance in the James Allen brand noted above. Brick and mortar same store sales decreasedincreased 1.4%2.3% from the prior year fourth quarter.period.

The breakdown of theFiscal fourth quarter2026 sales performance by reportable segment is set out in the table below:

The International reportable segment’s total sales decreasedincreased 10.9%,10.0% during Fiscal 2026, or 11.0%5.3% at constant exchange rates, to $126.2$410.4 million compared to $141.7$373.2 million in the prior year quarter, primarily due to the impact of store closures.year. The number of units decreased 6.1%2.8% and AUR increased 7.0% year4.2% over prior year. Same store sales decreasedincreased 1.5%2.6% compared to a decrease of 1.0%0.5% in the prior yearyear. quarter.Reported sales were favorably impacted by a change in estimate in the product protection plan commissions revenue recognized of approximately $15 million, as further discussed in Note 3 of Item 8.

During Fiscal 2026, the Company recorded non-cash, pre-tax asset impairments related to the impairment of long-lived assets and intangible assets of $91.6 million, of which $74.6 million was related to the impairment of the goodwill and indefinite-lived trade names, primarily related to the Digital brands, and $17.0 million related to the impairment of long-lived assets and cloud computing arrangements. During Fiscal 2025, the Company recorded non-cash, pre-tax asset impairments related to the impairment of long-lived assets and intangible assets of $372.0 million, of which $366.5 million was related to the impairment of the goodwill and indefinite-lived trade names for Diamonds Direct and the Digital brands and $5.5 million was related to the impairment of long-lived assets. DuringSee Note 14 of Item 8 for additional information on the fourth quarter of Fiscal 2025, the Company recorded pre-tax asset impairments of $202.7 million, primarily related to the impairment of the goodwill of the Digital brands and indefinite-lived trade names for the Digital brands and Diamonds Direct.impairments.

This management's discussion and analysis provides comparisons of material changes in the condensed consolidated financial statements for the 13 and 26 weeks ended MayAugust 2,1, 2026 and MayAugust 3,2, 2025.

This Quarterly Report on Form 10-Q contains statements which are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based upon management's beliefs and expectations as well as on assumptions made by and data currently available to management, appear in a number of places throughout this document and include statements regarding, among other things, results of operations, financial condition, liquidity, prospects, growth, strategies and the industry in which we operate. The use of the words “guidance,” “expects,” “continue,” “intends,” “anticipates,” “enhance,” “estimates,” “predicts,” “believes,” “could,” “should,” “potential,” “may,” “preliminary,” “forecast,” “objective,” “opportunity,” “plan,” “progress,” “strategy,” “target,” or “will” and other similar expressions are intended to identify forward-looking statements. These forward-looking statements are not guarantees of future performance and are subject to a number of risks and uncertainties which could cause the actual results to not be realized, including, but not limited to: executing or optimizing major business or strategic initiatives, such as expansion of the services business or realizing the benefits of our restructuring plans or transformation strategies, including those that the Company may develop in the future; attracting and retaining key executive talent during periods of leadership transition, such as the recent changes in our senior leadership from the reorganization under our Grow Brand Love strategy; the failure to adequately mitigate the impact of existing tariffs and/or the imposition of additional duties, tariffs, taxes and other charges or other barriers to trade or impacts from trade relations; impacts of US government shutdowns on consumer spending; difficulty or delay in executing or integrating an acquisition; the impact of the conflicts in the Middle East on financial markets and consumer spending, such as from the impact of higher oil and gas prices, as well as on ourthe operations of our quality control and technology centers in Israel; the negative impacts that public health crisis, disease outbreak, epidemic or pandemic has had, and could have in the future, on our business, financial condition, profitability and cash flows; risks relating to shifts in consumer spending away from the jewelry category or away from the cultural customs of expressing commitments through engagements and weddings; trends toward more experiential purchases such as travel; general economic or market conditions, including impacts of inflation or other pricing environment factors on our merchandise costs or other operating costs; a prolonged slowdown in the growth of the jewelry market or a recession in the overall economy; financial market risks; a decline in consumer discretionary spending or deterioration in consumer financial position; disruptions in our supply chain; our ability to attract and retain labor; changes to regulations relating to customer credit; disruption in the availability of credit for customers and customer inability to meet credit payment obligations, which has occurred and may continue to deteriorate; our ability to achieve the benefits related to the outsourcing of the credit portfolio, including duethe toimpacts of technology disruptions and/or disruptions arising from changes to or termination of the relevant outsourcing agreements, as well as a potential increase in credit costs due to the current interest rate environment; deterioration in the performance of individual businesses or of the Company’s market value relative to its book value, resulting in further impairments of long-lived assets or intangible assets or other adverse financial consequences; the volatility of our stock price; the impact of financial covenants, credit ratings or interest volatility on our ability to borrow; our ability to maintain adequate levels of liquidity for our cash needs, including debt obligations, payment of dividends, planned share repurchases (including execution of accelerated share repurchases and the payment of related excise taxes) and capital expenditures as well as the ability of our customers, suppliers and lenders to access sources of liquidity to provide for their own cash needs; potential regulatory changes; future legislative and regulatory requirements in the US and globally relating to climate change, including any new climate related disclosure or compliance requirements, such as those issued in the state of California; exchange rate fluctuations; the cost, availability of and demand for diamonds, gold and other precious metals, including any impact on the global market supply of diamonds due to the ongoing conflicts in the Middle East, the potential sale or divestiture of the De Beers Diamond Company and its natural diamond mining operations by parent company Anglo-American plc, and the ongoing Russia-Ukraine conflict or related sanctions; stakeholder reactions to disclosure regarding the source and use of certain minerals; scrutiny or detention of goods produced in certain territories resulting from trade restrictions; seasonality of our business; the merchandising, pricing and inventory policies followed by us and our ability to manage inventory levels; our relationships with suppliers including the ability to continue to utilize extended payment terms and the ability to obtain merchandise that customers wish to purchase; the level of competition and promotional activity in the jewelry sector; our ability to optimize our multi-year strategy to gain market share, expand and improve existing services, innovate and achieve sustainable, long-term growth; the maintenance and continued innovation of our OmniChannel retailing and ability to increase digital sales, as well as management of digital marketing costs; failure to anticipate and keep pace with changing fashion trends; changes in the costs, retail prices, supply and consumer acceptance of, and demand for gem quality lab-grown diamonds and adequate identification of the use of substitute products in our jewelry; ability to execute successful marketing programs and manage social media; the ability to optimize our real estate footprint, including operating in attractive trade areas and effectively monitoring changes in consumer traffic in mall locations; the performance of and ability to recruit, train, motivate and retain qualified team members - particularly store associates in regions experiencing low unemployment rates; management of social, ethical and environmental risks; ability to deliver on our corporate sustainability goals or our environmental, social and governance goals; the reputation of Signet and its brands; inadequacy in and disruptions to internal controls and systems, including related to the migration to new information technology systems which impact financial reporting; risks associated with the Company’s and its third-party service providers’ use of artificial intelligence; security breaches and other disruptions to our or our third-party providers’ information technology infrastructure and databases; an adverse development in legal or regulatory proceedings or tax matters, including any new claims or litigation brought by employees, suppliers, consumers or shareholders, regulatory initiatives or investigations, assessments or penalties levied by tax authorities, and ongoing compliance with regulations and any consent orders or other legal or regulatory decisions; failure to comply with labor regulations; collective bargaining activity; changes in corporate taxation rates, laws, rules or practices in the US and other jurisdictions in which our subsidiaries are incorporated, including developments related to the tax treatment of companies engaged in internet commerce or deductions associated with payments to foreign related parties that are subject to a low effective tax rate; risks related to international laws and Signet being domiciled in Bermuda; risks relating to the outcome of pending litigation; our ability to protect our intellectual property or assets including cash which could be affected by failure of a financial institution or conditions affecting the banking system and financial markets as a whole; changes in assumptions used in making accounting estimates relating to items such as extended service plans or asset impairments; or the impact of weather-related incidents, natural disasters, organized crime or theft, increased security costs, strikes, protests, riots or terrorism, or acts of war (including the ongoing Russia-Ukraine and conflicts in the Middle East).

Signet Jewelers Limited (“Signet” or the “Company”) is a specialty jewelry retailer incorporated in Bermuda. The Company operated 2,5592,534 retail locations as of MayAugust 2,1, 2026, which when combined with the Company’s digital capabilities, provides customers the opportunity to use both online and in-store experiences as part of their shopping journey. Signet manages its business by geography, a description of which follows:

•The North America reportable segment operates seven brands, with the majority operating through both online and brick and mortar retail operations. As previously announced, the James Allen brand transitioned to a proprietary collection within the Blue Nile website during May 2026. The segment had 2,2172,191 locations in the US and 91 locations in Canada as of MayAugust 2,1, 2026.

•The International reportable segment had 251252 locations in the UK and Republic of Ireland as of MayAugust 2,1, 2026, and maintains an online retail presence for its brands, H.Samuel and Ernest Jones.

In Fiscal 2026, the Company launched its transformative Grow Brand Love strategy, which focuses on driving sustainable growth and builds on a strong core foundation to create shareholder value. In addition, this strategy emphasizes style and product innovation, captivating customer experiences, and brand loyalty while harnessing centralized core capabilities. In Fiscal 2027, we will beare applying the learnings from year one to refine each of the strategy’s imperatives. The three strategic imperatives of the Grow Brand Love framework have evolved in Fiscal 2027 into: brand distinction; unlocking portfolio value; and strengthening our operating model. The Grow Brand Love strategy is further described in the Purpose and Strategy section within Item 1 of Signet’s Fiscal 2026 Annual Report on Form 10-K filed with the SEC on March 19, 2026.

Overall performance - FirstSecond quarter Fiscal 2027

Signet’s total sales increaseddecreased by 0.8%0.5% during the firstsecond quarter of Fiscal 2027 compared to the same period in Fiscal 2026. The Company saw positive same stores sales growth of 1.8%2.2% during the quarter, withled low single-digitby growth in both bridal and fashion, and stronger growth in watches and services. ThisSame growthstore wassales impactedin bysecond aquarter oneexcluded pointJames dragAllen fromand Blue Nile due to the impacts of the transition and repositioning of the James Allen brand.brand into Blue Nile in May. Merchandise average unit retail (“AUR”) grew acrossmid all categories as well, particularlysingle-digits in bridal.both the bridal and fashion categories. During the firstsecond quarter of Fiscal 2027, AUR was up 5.1%7.8% in the North America reportable segment and up 3.4%3.8% in the International reportable segment compared to the firstsecond quarter of Fiscal 2026. Same store sales in the International reportable segment were up 5.6%6.0% in the firstsecond quarter.

Refer to the “Results of Operations” section below for additional information on performance during the firstsecond quarter of Fiscal 2027.

The Company anticipates same store sales in the range of down 0.75%flat to up 2.5% for Fiscal 2027. This range is driven by the performance during the first quarterhalf of the year and momentumaccelerating thusbrand farequity ininitiatives, including brand relaunches, merchandise refreshes, transforming our marketing playbook and customer experience redesigns. As noted above, the second quarter, despite a low single-digit decline in square footage due to anticipated store closures. The Company willhas also excludeexcluded the James Allen and Blue Nile brands from thisthe estimate of same store sales beginning in the second quarter of Fiscal 2027, following the transition and repositioning of the James Allen brand into Blue Nile in May. The Company believesexpects that it canto build on itsKay’s imperativesstrong underfoundation with the Grownew Brand “Love strategyAll inIn” yearcreative twoplatform, bybringing shapinga distinctfresh andexpression covetedof brands,love unlockingto additionalthe portfolioKay valuecustomer andexperience. The Company also is leaning further strengtheninginto itssocial operatingmedia model.as a way to build emotional connections with customers with stronger storytelling to drive stronger brand engagement. The Company is sharpening its go-to-market strategy for each of its four largest brands, and we will be taking actions to improve the customer experience, both in-store and online. ThisThe includesrecent websiteredesign redesignslaunches, tospecifically definefor brand identities, shifting toward social-first storytelling to better connect with youngerKay and moreJared, diversecreate audiencesa foundation for digital growth by including deeper personalization, agentic discovery, and improvinggreater theomnichannel efficiency of its media investments. The Company is also continuing to make progress in unlocking portfolio value with the transition of James Allen within Blue Nile, the centralization of diamond sourcing across all North America brands and further back office integrations.connectivity.

The Company continues to closely monitor ongoing activities related to changes to US economic policy, including impacts from both taxes and tariffs. TheAs secondpreviously quarterdisclosed, of Fiscal 2026 saw significant activity on new tariff announcements on countries such as India and Italy, where the Company purchases significant amounts of merchandise and diamonds. Wewe were able to mitigate the majority of the higher tariffs announced in Fiscal 2026 through strategic sourcing initiatives by working with vendors to maximize production timing and country of origin, as well as by value engineering merchandise at the right price points. In February 2026, the US Supreme Court struckissued downa certaindecision invalidating the broad-based tariffs implementedimposed under IEEPA, and the Court of International trade has ordered CBP to refund the tariffs directly incurred by the Company imposed under IEEPA. Beginning in AprilFiscal 2025 under2027, the InternationalCompany Emergencysubmitted Economicour Powersclaim Actfor (“refunds of the IEEPA”). Whiletariffs U.S.previously Customspaid through the CBP portal established to process such claims. The Company applied a gain contingency model to determine the timing of recognition of the refunds of the previously paid IEEPA tariffs, and Border Protectionthus has been actively reviewing and processing refund requests followingrecognized the Supremerefunds Courtas ruling,they managementbecome realized or realizable based on the approval status in the CBP portal. As of the end of the second quarter of Fiscal 2027, the Company has received approximately $20 million of refunds for tariffs previously paid. However, we have not currently forecasted any significantmaterial impactsimpact fromof future expected refunds, nor have we forecasted the impact of potential refunds ofnew tariffs paid under IEEPA or alternative tariff structures that may be implemented by the current administration, as the timing and amount of such impacts remain uncertain.assessed.

Comparison of FirstSecond Quarter Fiscal 2027 to FirstSecond Quarter Fiscal 2026

FirstSecond quarter sales

Signet's total sales increaseddecreased 0.8%0.5% year over year to $1.55$1.53 billion in the 13 weeks ended MayAugust 2,1, 2026. Total sales were negatively impacted primarily by the decommissioning of the James Allen website and transition into Blue Nile in May. Same store sales increased 1.8%2.2% compared to the prior year firstsecond quarter. TheseThe increasessame reflectstore sales growth acrossreflects allincreases categoriesfrom our three largest brands - Kay, Zales and theJared majority of brands- and growthstrong performance in offeredthe collections.UK. AUR grew 4.5%6.4% compared to the prior year firstsecond quarter despite a decrease in the number of units sold partially attributablebecause toof strength in the higher-end consumer and better performance at higher price points. These increases were negatively impacted by underperformance in the James Allen brand.

E-commerceSignet’s e-commerce sales in the firstsecond quarter of Fiscal 2027 were $322.1$300.0 million, down $16.6$17.6 million or 4.9%,5.5%, compared to $338.7$317.6 million in the prior year firstsecond quarter. This decrease was primarily due to the underperformancedecommissioning of the James Allen brand.website. E-commerce sales accounted for 20.7%19.6% of firstsecond quarter sales, a decreasedown compared to 22.0%20.7% of total sales in the prior year firstsecond quarter. Brick and mortar same store sales increased 3.8%2.3% from the prior year firstsecond quarter.

The breakdown of the firstsecond quarter sales performance by reportable segment is set out in the table below:

The North America reportable segment’s total sales were $1.46$1.43 billionbillion, comparedflat to $1.45 billion in the prior year quarter, or an increase of 0.9%.quarter. Same store sales increased 1.6%1.9% compared to the prior year firstsecond quarter. TheseThe increasessame reflectstore sales increase reflects the focus on theour fourthree largest brands across all categories,categories as welldescribed asabove. growthThe same store sales performance was offset by the decline in services.reported Thesales improvedfrom assortmentJames Allen due to the decommissioning of the website and transition to Blue Nile in second quarter. Assortment improvements across the bridal and fashion categories drove strong AUR growth of 5.1%7.8% compared to the prior year firstsecond quarter.quarter Thedespite the number of units sold having decreased 4.5%8.3% year over year. The overall increase was negatively impacted by the underperformance of the James Allen brand as noted above.

The International reportable segment’s total sales increased 9.2%,5.2%, or 4.8%5.8% at constant exchange rates, to $87.5$96.6 million compared to $80.1$91.8 million in the prior year quarter. The number of units sold increased 1.5%2.0% and AUR increased 3.4%3.8% year over year. Same store sales increased 5.6%6.0% compared to the prior year firstsecond quarter. The increase in total sales at constant exchange rates was slightly lower than the increase in same store sales due to store closures.

In the firstsecond quarter of Fiscal 2027, gross margin was $556.5$602.4 million, or 35.8%39.4% of sales, compared to $598.8$591.9 million, or 38.8%38.6% of sales, in the prior year quarter. GrossFor the 26 weeks ended August 1, 2026, gross margin was $1.16 billion, or 37.6% of sales, compared to $1.19 billion, or 38.7% of sales in the prior year comparable period. For the second quarter, gross margin increased in total dollars and as a percentage of sales, primarily reflecting the favorable tariff refunds of approximately $15 million and lower scrap due to stronger recoveries year over year from gold prices, slightly offset by margin pressure from gold prices. For the year to date period, gross margin decreased in total dollars and as a percentage of sales for the 13 weeks ended May 2, 2026 primarily reflecting merchandise margin decline due to increases in gold prices, accelerated melt particularly from trade-in and clearance product, asand well$31.3 asmillion of charges for inventory write-down charges of $32.7 millionwrite-downs related to the decommissioning of the James Allen and Rocksbox websites.websites, partially offset by tariff refunds.

In the firstsecond quarter of Fiscal 2027, SG&A was $509.6$493.6 million, or 32.8%32.3% of sales, compared to $526.0$505.3 million, or 34.1%32.9% of sales, in the prior year quarter. For the 26 weeks ended August 1, 2026, SG&A was $1.00 billion, or 32.6% of sales, compared to $1.03 billion, or 33.5% of sales, in the prior year comparable period. The decrease in SG&A asfor aboth percentagethe of13 salesand 26 weeks ended August 1, 2026 was driven by the previous year’s reorganization of the operating model andmodel, ongoing spend discipline.discipline and lower advertising primarily as a result of the transition of James Allen described above.

In the firstsecond quarter of Fiscal 2027, other operating expense was $10.0$1.8 million, compared to $24.7$3.6 million in the prior year quarter. In the first half of Fiscal 2027, other operating expense was $10.3 million, compared to $25.1 million in the prior year comparable period. The 13 and 26 weeks ended MayAugust 2,1, 2026 primarily included restructuring and asset impairment charges of $9.0$1.8 million and $9.3 million, respectively, related to the actions under the Company’s Grow Brand Love strategy. The 13 and 26 weeks ended MayAugust 3,2, 2025 primarily included restructuring and asset impairment charges of $22.2$2.8 million.million and $21.8 million, respectively. See Note 15 and Note 16 for additional information.

For the firstsecond quarter of Fiscal 2027, operating income was $36.9$87.5 million, or 2.4%5.7% of sales, compared to $48.1$2.8 million, or 3.1%0.2% of sales, in the prior year quarter. In the first half of Fiscal 2027, operating income was $124.4 million, or 4.0% of sales, compared to $50.9 million, or 1.7% of sales, in the prior year comparable period. The decreaseincrease in operating income for both the 13 and 26 weeks ended August 1, 2026 was primarily driven by inventory write-down charges, accelerated scrap and lower merchandiseasset margins,impairment partiallycharges offsetnoted by stronger sales performance.above.

In the firstsecond quarter, operating income in the North America reportable segment was $60.4$103.5 million, or 4.1%7.2% of segment sales, and includes $39.5 million of restructuring and related charges, including inventory write-down charges of $32.7 million, and $1.5$19.5 million of asset impairment charges primarily related to long-livedindefinite-lived intangible assets. In the prior year quarter, operating income in the North America reportable segment was $83.0$23.0 million, or 5.7%1.6% of segment sales, and included $10.9$80.2 million of asset impairment charges primarily related to goodwill and indefinite-lived intangible assets and $1.0 million of restructuring and related charges and $3.2 million of asset impairment charges related to long-lived assets.charges.

In the firstsecond quarter, operating loss in the International reportable segment was $6.6$1.6 million, or (7.51.7)% of segment sales. In the prior year quarter, operating loss in the International reportable segment was $7.0$2.2 million, or (8.72.4)% of segment sales.

In the firstsecond quarter, corporate and unallocated expenses were $13.5$13.9 million, compared to $24.0$17.6 million in the prior year quarter. TheIn decreasethe wasfirst half of Fiscal 2027, corporate and unallocated expenses were $27.4 million, compared to $41.6 million in the first half of Fiscal 2026. These decreases were driven primarily by lower restructuring and related charges in the current year quarter. Corporate and unallocated expenses included restructuring and related charges of $0.7 million in the first26 quarterweeks ofended Fiscalweeks 2027,ended August 1, 2026, compared to $8.1$1.7 million and $9.8 million in the13 priorand year26 quarter.weeks ended August 2, 2025, respectively.

Interest income,income (expense), net

In the first13 quarterand of26 Fiscalweeks 2027,ended August 1, 2026, net interest income was $3.6$2.3 million and $5.9 million, respectively, compared to $0.8net interest expense of $0.1 million and net interest income of $0.7 million in the prior13 yearand quarter.26 weeks ended August 2, 2025. The increaseincreases in net interest income for the current year quarter wasand year to date period are the result of higher invested cash balances generating interest when compared withto the prior year quarter.comparable periods.

In the firstsecond quarter of Fiscal 2027, income tax expense was $9.1$20.8 million, with an effective tax rate (“ETR”) of 22.3%,28.5%, compared to income tax expense of $12.1$14.2 million, with an ETR of 26.5%,278.4%, in the prior year comparable period. The ETR for the firstsecond quarter of Fiscal 2027 was higher than the Bermuda corporate income tax rate, primarily as a result of the unfavorable impact of foreign rate differences (primarily in the US).

The ETR for the firstsecond quarter of Fiscal 2026 was higher than the Bermuda corporate income tax rate primarily as a result of the unfavorable impact of foreign rate differences (primarily in the US) and unfavorable discrete tax items recognized in the 13 weeks ended May 3, 2025,recognized, including thenon-deductible taxgoodwill shortfallimpairment for share-based compensation which vested during the yearcharges of $0.8$53.6 million.

Free cash flow is a non-GAAP measure defined as the net cash provided by (used in) operating activities less capital expenditures. Management considers this metric to be helpful in understanding how the business is generating cash from its operating and investing activities that can be used to meet the financing needs of the business. Free cash flow is an indicator frequently used by management to measure the efficiency of converting operating income to cash, as well as evaluate its overall liquidity needs and determine appropriate capital allocation strategies. Free cash flow does not represent the residual cash flow available for discretionary purposes.

(12) RestructuringFiscal 2027 and Fiscal 2026 restructuring and related charges and asset impairment charges during the 13 weeks ended May 2, 2026 and May 3, 2025 were incurred primarily as a result of the Company’s Grow Brand Love strategy initiatives. Restructuring and related charges during the 13 and 26 weeks ended MayAugust 2,1, 2026 include $32.7a $1.4 million credit and charges of inventory$31.3 write-downsmillion, respectively, related to the planned disposal of inventory in connection with the discontinuance of James Allen and Rocksbox as separately operated brands and the decommissioning of their respective websites. See Note 16 for additional information.

(1) RestructuringFiscal 2027 and Fiscal 2026 restructuring and related charges and asset impairment charges during the 13 weeks ended May 2, 2026 and May 3, 2025 were incurred primarily as a result of the Company’s Grow Brand Love strategy initiatives. Restructuring and related charges during the 13 and 26 weeks ended MayAugust 2,1, 2026 includesinclude $32.7a $1.4 million credit and charges of inventory$31.3 write-downsmillion, respectively, related to the planned disposal of inventory in connection with the discontinuance of James Allen and Rocksbox as separately operated brands and the decommissioning of their respective websites. See Note 16 for additional information.

(1) RestructuringFiscal 2027 and Fiscal 2026 restructuring and related charges and asset impairment charges during the 13 weeks ended May 2, 2026 and May 3, 2025 were incurred primarily as a result of the Company’s Grow Brand Love strategy initiatives. See Note 16 for additional information.

The Company’s primary sources of liquidity are cash on hand, cash provided by operations and availability under its senior secured asset-based revolving credit facility (the “ABL”). As of MayAugust 2,1, 2026, the Company had $602.8$526.8 million of cash and cash equivalents and no outstanding borrowings on the ABL. The available borrowing capacity on the ABL was $1.1 billion as of MayAugust 2,1, 2026.

The strategic imperatives of the Company’s Grow Brand Love transformation strategy have been designed to drive sustainable growth by building on a strong core foundation to create shareholder value and coveted brands. In order to achieve these goals, the Company has reorganized strategic areas of our business such as marketing and sourcing to streamline operations, increase efficiencies, improve accountability and reduce costs. This reorganization has already begun to enable our go-to-market strategies and contribute towards our efforts to strengthen our brand portfolio, andas well as builds a strong foundation as we go intocontinue year two of Grow Brand Love to take actions to improve the customer experience and further transform our approach to marketing. We are also continuing to optimize our real estate footprint to support the positioning of our brands and modernizing our stores through capital improvements. These real estate initiatives will include the closure of underperforming stores, repositioning stores out of declining venues, renovation of stores and an increased focus on transference from closed locations to capitalize on brand equity across the portfolio. The Company invested $153.5 million for capital expenditures in Fiscal 2026 and has planned for capital expenditures of up to $180 million in Fiscal 2027, reflecting primarily investments in new stores and renovations as described above, as well as additional digital and technology advancements.

The Company had no outstanding debt as of MayAugust 2,1, 2026 or MayAugust 3,2, 2025. The Company has the $1.2 billion ABL, expiring in August 2029, with the option to increase the size of the ABL by up to an additional $600 million. There were no borrowings under the ABL during the 1326 weeks ended MayAugust 2,1, 2026 and MayAugust 3,2, 2025. Available borrowing capacity under the ABL was $1.1 billion as of MayAugust 2,1, 2026.