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SECOND QUARTER / FIRST HALF 2026 BUSINESS UPDATE JULY 31, 2026
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2 SECOND QUARTER 2026 RESULTS GAAP BASIS in millions, except EPS 1 Non-GAAP measure; see reconciliation to GAAP in Supplemental Information. Note: Results may not be additive due to rounding. Q2 2026 % of Net Sales Q2 2025 % of Net Sales Change Net sales $615 $585 5% Gross profit 413 67.0% 282 48.1% 46% Royalty income, net 3 0.5% 3 0.6% 3% SG&A 276 44.9% 281 48.0% (2%) Operating income 140 22.7% 4 0.7% n/m Interest expense 11 1.8% 8 1.3% 44% Interest income (8) (1.4%) (4) (0.7%) n/m Other expense (income), net - 0.0% (1) (0.2%) n/m Income before taxes 137 22.2% 2 0.3% n/m Income tax provision 32 5.1% 1 0.2% n/m Net income $105 17.1% $0.4 0.1% n/m Diluted EPS $2.87 $0.01 n/m Weighted-average shares outstanding 36 35 1% EBITDA1 $152 24.8% $19 3.2% n/m
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3 FIRST HALF 2026 RESULTS GAAP BASIS in millions, except EPS 1 Non-GAAP measure; see reconciliation to GAAP in Supplemental Information. Note: Results may not be additive due to rounding. 1H 2026 % of Net Sales 1H 2025 % of Net Sales Change Net sales $1,297 $1,215 7% Gross profit 706 54.5% 573 47.1% 23% Royalty income, net 8 0.6% 9 0.7% (7%) SG&A 546 42.1% 551 45.4% (1%) Operating income 168 13.0% 30 2.5% n/m Interest expense 23 1.8% 16 1.3% 47% Interest income (12) (0.9%) (7) (0.6%) 58% Other expense (income), net - 0.0% (1) (0.2%) n/m Income before taxes 157 12.1% 23 1.9% n/m Income tax provision 37 2.9% 7 0.6% n/m Net income $119 9.2% $16 1.3% n/m Diluted EPS $3.26 $0.43 n/m Weighted-average shares outstanding 36 35 1% EBITDA1 $194 15.0% $58 4.8% n/m
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4 NON - GAAP ADJUSTMENTS 1 1 Certain measures are presented on an adjusted basis, a non -GAAP presentation; see reconciliation to GAAP in Supplemental Informa tion. Note: Results may not be additive due to rounding. in millions, except EPS Second Quarter 2026 2025 Operating Income % Net Sales Net Income Diluted EPS Operating Income % Net Sales Net Income Diluted EPS As reported (GAAP) $140 22.7% $105 $2.87 $4 0.7% $0.4 $0.01 Tariff reimbursement (128) (100) (2.73) - - - Leadership transition costs 5 4 0.10 1 1 0.02 IP litigation 1 1 0.03 - - - Operating model improvement costs - - - 7 5 0.14 As adjusted $18 2.9% $9 $0.26 $12 2.0% $6.3 $0.17 First Half 2026 2025 Operating Income % Net Sales Net Income Diluted EPS Operating Income % Net Sales Net Income Diluted EPS As reported (GAAP) $168 13.0% $119 $3.26 $30 2.5% $16 $0.43 Tariff reimbursement (128) (100) (2.73) - - - Leadership transition costs 5 4 0.10 7 7 0.18 IP litigation 1 1 0.03 - - - Operating model improvement costs - - - 10 7 0.21 As adjusted $47 3.6% $24 $0.65 $47 3.9% $30 $0.83
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ADJUSTED SECOND QUARTER 2026 RESULTS 1 1 Certain measures are presented on an adjusted basis, a non -GAAP presentation; see reconciliation to GAAP in Supplemental Informa tion. Note: Results may not be additive due to rounding. in millions, except EPS Q2 2026 % of Net Sales Q2 2025 % of Net Sales Change Net sales $615 $585 5% Gross profit 285 46.3% 282 48.1% 1% Royalty income, net 3 0.5% 3 0.6% 3% SG&A 270 43.9% 273 46.7% (1%) Operating income 18 2.9% 12 2.0% 54% Interest expense and other, net 7 1.1% 2 0.6% n/m Income before taxes 11 1.8% 9 1.6% 16% Income tax provision 2 0.2% 3 0.5% (51%) Net income $9 1.5% $6 1.1% 49% Diluted EPS $0.26 $0.17 53% Weighted-average shares outstanding 36 35 1% EBITDA $31 5.0% $27 4.5% 16% 5
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6 SECOND QUARTER 2026 SEGMENT RESULTS Net Sales Operating Income Operating Margin 2026 2025 $ Change 2026 2025 $ Change 2026 2025 U.S. Retail $305 $300 $5 $4 $4 - 1.4% 1.3% U.S. Wholesale 216 193 23 30 27 3 13.8% 14.0% International 95 93 2 5 4 2 5.7% 3.9% Total before Corporate expenses 615 585 30 39 34 5 6.4% 5.9% Corporate expenses - - - (21) (23) 1 (3.5%) (3.9%) Total1 $615 $585 $30 $18 $12 $6 2.9% 2.0% in millions 1 See reconciliation of segment operating income and operating margin to consolidated operating income and operating margin in Sup plemental Information. Note: Results may not be additive due to rounding.
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77 SECOND QUARTER 2026 PERFORMANCE – U.S. RETAIL 2026 vs. 2025 • Net sales +2% vs. LY − Units +LSD, AUR comparable − Marketing investments drove increased consumer engagement; strong improvement in eCommerce traffic − Continued progress in new consumer acquisition; strongest growth in GenZ cohort • Continued comparable sales momentum − +5.1% vs. 2025, fifth consecutive quarter of growth − Third consecutive quarter of growth on a two-year basis (+4.7%) − Positive store and eCommerce comp growth − eCommerce comp accelerated vs. Q1 − Comp growth across all core age segments • Strength in Baby and destination categories, partially offset by soft performance of select seasonal product offerings • Operating margin 1.4% (+10 bps vs. LY) − Comp sales performance and benefits from productivity initiatives − Partially offset by higher tariffs Sales Profitability
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88 U.S. RETAIL - eCOMMERCE GROWTH DRIVERS eCommerce revenue grew double-digits in H1 FY26 — Digital investments driving improved consumer experience Passwordless log in removes checkout friction As of Q2, users can log in to carters.com with a quick SMS verification. Registered- consumer visits +8% vs. last year, reducing friction and improving conversion. New “Wear It With” feature delivers easy outfitting Shoppers who engage buy +22% more units per transaction as they "complete the look". Product Reviews reimagined builds consumer trust Our industry-leading 4.8 star average is now more prominent with AI Overviews. Review-engaged shoppers convert ~2x the average. Consumer Care transformation elevates service Improved AI chat now handles 30%+ of contacts at 80% satisfaction, funding premium, high-touch care for our best consumers. “Wear It With” on product pages enables you to buy a complete outfit from a single product page.
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Personalization events Carter’s Cup - Atlanta 9
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10 U.S. WHOLESALE • Net sales: +12% (units +LSD) ― Exclusive Wholesale Brands growth ― Earlier than planned demand for Fall product ― Little Planet growth, including expanded distribution ― Continued strength in Baby • Operating margin 13.8% (-20 bps vs. LY) ― Higher realized pricing, tariff mitigation initiatives, and expense leverage ― Offset by higher tariff and investments in product make INTERNATIONAL • Net sales: +3% (units -LSD) Comparable in constant currency ― Mexico total sales +22% ― Retail comp ~flat; +9% in 1H ― New store openings ― Favorable FX impact ― Canada total sales +1% ― Retail comp +1.3% ― Continued strength in Baby • Operating margin 5.7% (+180 bps vs. LY) ― Favorable product costs (FX) ― Productivity savings SECOND QUARTER 2026 SEGMENT PERFORMANCE 2026 vs. 2025
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11 BALANCE SHEET & CASH FLOW in millions 1 Sum of current and non-current operating lease liabilities. 2 Non-GAAP measure. Balance Sheet (Q2 End) 2026 2025 Cash $654 $338 Accounts receivable, net 168 140 Inventory, net 578 619 Accounts payable 324 306 Long-term debt, net 568 499 Operating lease liabilities1 617 626 Cash Flow (First Half) 2026 2025 Operating cash flow $202 ($8) Capital expenditures (13) (26) Free cash flow2 $189 ($35) Dividends $18 $38 Share repurchases - - Total capital distributed $18 $38 • Total liquidity $1.2 billion • Inventories (7%) vs. LY ― Tariff impact on ending inventory: +$18 million ― Inventory, excluding tariff impact, (10%) vs. LY • Long-term debt reflects senior notes refinancing in Q4 2025 • Improvement in operating cash flow reflects: ― Tariff recovery ― Improved working capital ― Favorable timing of interest payments vs. prior year • $18 million in dividends paid in first half
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ADJUSTED FIRST HALF 2026 RESULTS 1 1 Certain measures are presented on an adjusted basis, a non -GAAP presentation; see reconciliation to GAAP in Supplemental Informa tion. Note: Results may not be additive due to rounding. in millions, except EPS H1 2026 % of Net Sales H1 2025 % of Net Sales Change Net sales $1,297 $1,215 7% Gross profit 579 44.6% 573 47.1% 1% Royalty income, net 8 0.6% 9 0.7% (7%) SG&A 540 41.7% 534 44.0% 1% Operating income 47 3.6% 47 3.9% (1%) Interest expense and other, net 16 1.2% 7 0.6% n/m Income before taxes 31 2.4% 40 3.3% (23%) Income tax provision 7 0.5% 10 0.8% (30%) Net income $24 1.8% $30 2.5% (21%) Diluted EPS $0.65 $0.83 (22%) Weighted-average shares outstanding 36 35 1% EBITDA $73 5.6% $75 6.2% (3%) 12
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13 FIRST HALF 2026 SEGMENT RESULTS 1 See reconciliation of segment operating income and operating margin to consolidated operating income and operating margin in Sup plemental Information. Note: Results may not be additive due to rounding. in millions Net Sales Operating Income Operating Margin 2026 2025 $ Change 2026 2025 $ Change 2026 2025 U.S. Retail $637 $594 $43 $13 $6 $7 2.1% 1.0% U.S. Wholesale 467 443 24 67 82 (16) 14.2% 18.6% International 193 178 15 10 3 6 5.0% 1.9% Total before Corporate expenses 1,297 1,215 81 89 92 (2) 6.9% 7.6% Corporate expenses - - - (43) (45) 2 (3.3%) (3.7%) Total1 $1,297 $1,215 $81 $47 $47 (1) 3.6% 3.9%
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2026 OUTLOOK 14
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15 FISCAL YEAR 2026 OUTLOOK 52 WEEKS vs. 53 WEEKS 2025 NET SALES • Net sales: +2% to 3% growth (FY2025: $2.898 billion) U.S. Retail U.S. Wholesale International Low single-digit growth Comp sales up mid-single-digits Low single-digit growth Mid single-digit growth PROFITABILITY & CASH FLOW Adjusted1 Operating Income Diluted EPS Operating Cash Flow CapEx Low to mid single-digit growth (FY2025: $176 million) High single-digit to low double-digit decline (FY2025: $3.47) ~$230 million to $240 million ~$50 million KEY ASSUMPTIONS 2 • Earnings contributions weighted to the second half (greater projected net tariff impacts and investment spending in the first half relative to the second half) • Lower gross margin rate (incremental tariff costs partially offset by higher pricing, tariff mitigation actions, and productivity savings) • Low single-digit increase in SG&A (organizational restructuring and store fleet rationalization savings offset by investments in demand creation, information technology, and cost inflation across the business) • Net interest expense ~$35 million (increase reflects Q4 2025 Senior Notes refinancing) • Effective tax rate ~23% • Average number of shares outstanding ~36 million 1 See prior year reconciliations to GAAP in Supplemental Information. 2 Comparisons vs. prior year unless otherwise noted.
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16 THIRD QUARTER 2026 OUTLOOK NET SALES • Net sales: ~$750 million (Q3 2025: $758 million) U.S. Retail U.S. Wholesale International Low single-digit growth Comp sales up low-single-digits High single-digit decline Mid to high single-digit growth PROFITABILITY 1 KEY ASSUMPTIONS 2 • Higher gross margin rate (greater mix of U.S. Retail sales and the anniversary of higher tariffs, which began in Q3 2025) • Comparable SG&A expense (organizational restructuring savings offset by investments in demand creation and other cost inflation across the business) • Net interest expense ~$9 million (increase reflects Q4 2025 Senior Notes refinancing) • Average number of shares outstanding ~36 million Adjusted Operating Income Adjusted Diluted EPS ~$50 million (Q3 2025: $39 million) ~$0.85 (Q3 2025: $0.74) 1 See prior year reconciliations to GAAP in Supplemental Information. 2 Comparisons vs. prior year unless otherwise noted.
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THANK YOU 17
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SUPPLEMENTAL INFORMATION 18
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RECONCILIATION OF REPORTED TO ADJUSTED EARNINGS Note: Results may not be additive due to rounding. 19 (a) In addition to the results provided in this earnings release in accordance with GAAP, the Company has provided adjusted, non-GAAP financial measurements that present SG&A, operating income, income taxes, net income, and net income on a diluted share basis excluding the adjustments discussed above. The Company believes these adjustments provide a meaningful comparison of the Company’s results and afford investors a view of what management considers to be the Company's core performance. The adjusted, non-GAAP financial measurements included in this earnings release should not be considered as an alternative to net income or as any other measurement of performance derived in accordance with GAAP. The adjusted, non-GAAP financial measurements are presented for informational purposes only and are not necessarily indicative of the Company’s future condition or results of operations. (b) Related to $128 million of IEEPA tariff recoveries, excluding interest received, which are reflected as a reduction of Cost of goods sold. (c) Related to costs associated with the retirement of Michael D. Casey, the Company’s former Chief Executive Officer, in the first quarter of fiscal 2025 and costs related to the departure of Douglas C. Palladini, the Company’s former Chief Executive Officer, in the second quarter of fiscal 2026. (d) Related legal defense costs arising from intellectual property litigation not in the ordinary course of business. Second Quarter Fiscal 2026 Cost of Goods Sold Gross Profit % of net sales SG&A % of net sales Operating Income % of net sales Interest Income Income Tax Provision Net Income Diluted EPS As reported (GAAP) $202.9 $412.6 67.0% $276.1 44.9% $139.8 22.7% $8.5 $31.7 $105.0 $2.87 Tariff refund recovery (b) 127.7 (127.7) - (127.7) (4) (31.6) (100.1) (2.73) Leadership transition costs (c) - - (4.7) 4.7 - 1.1 3.6 0.10 IP litigation (d) - - (1.2) 1.2 - 0.3 0.9 0.03 As adjusted (a) $330.6 $284.9 46.3% $270.2 43.9% $18.1 2.9% $4.5 $1.5 $9.4 $0.26 $ in millions, except EPS First Half of Fiscal 2026 Cost of Goods Sold Gross Profit % of net sales SG&A % of net sales Operating Income % of net sales Interest Income Income Tax Provision Net Income Diluted EPS As reported (GAAP) $590.1 $706.5 54.5% $546.2 42.1% $168.3 13.0% $11.7 $37.2 $119.3 $3.26 Tariff refund recovery (b) 127.7 (127.7) - (127.7) (4.0) (31.6) (100.1) (2.73) Leadership transition costs (c) - - (4.7) 4.7 - 1.1 3.6 0.10 IP litigation (d) - - (1.2) 1.2 - 0.3 0.9 0.03 As adjusted (a) $717.8 $578.8 44.6% 540.2 41.7% 46.5 3.6% 7.7 7.0 23.7 $0.65
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RECONCILIATION OF TOTAL SEGMENT OPERATING INCOME TO CONSOLIDATED OPERATING INCOME Note: Results may not be additive due to rounding. 20 (a) In fiscal 2024, the Company changed its measure of segment profitability to segment operating income. Segment operating income includes net sales, royalty income, and related cost of goods sold and selling, general, and administrative expenses attributable to each segment. Segment operating income excludes unallocated corporate expenses as well as specific charges that are not directly attributable to segment operations, including restructuring costs and impairment charges related to goodwill and indefinite-lived intangible assets, which were included in our previous measure of segment profitability. (b) Unallocated corporate expenses include corporate overhead expenses that are not directly attributable to one of our business segments and include unallocated accounting, finance, legal, human resources, and information technology expenses, occupancy costs for our corporate headquarters, and other benefit and compensation programs, including performance-based compensation. (c) Related to $128 million of IEEPA tariff recoveries, excluding interest received, which are reflected as a reduction of Cost of goods sold. (d) Related to costs associated with the retirement of Michael D. Casey, the Company’s former Chief Executive Officer, in the first quarter of fiscal 2025 and costs related to the departure of Douglas C. Palladini, the Company’s former Chief Executive Officer, in the second quarter of fiscal 2026. (e) Related legal defense costs arising from intellectual property litigation not in the ordinary course of business. (f) Primarily related to third-party consulting costs. $ in millions Fiscal Quarter Ended Two Fiscal Quarters Ended July 4, 2026 June 28, 2025 July 4, 2026 June 28, 2025 % of net sales % of net sales % of net sales % of net sales Total segment operating income (a) $39.4 6.4% $34.4 5.9% $89.4 6.9% $91.8 7.6% Unallocated corporate expenses (b) (21.3) (22.7) (42.8) (44.7) Subtotal $18.1 2.9% $11.7 2.0% $46.5 3.6% $47.1 3.9% Tariff refund recovery (c) 127.7 - 127.7 - Leadership transition costs (d) (4.7) (1.1) (4.7) (7.2) IP litigation (e) (1.2) - (1.2) - Operating model improvement costs (f) - (6.6) - (9.8) Consolidated operating income $139.8 22.7% $4.0 0.7% $168.3 13.0% $30.1 2.5%
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Note: Results may not be additive due to rounding. RECONCILIATION OF NET INCOME TO ADJUSTED EBITDA 21 $ in millions Fiscal Quarter Ended Two Fiscal Quarters Ended Four Fiscal Quarters Ended July 4, 2026 June 28, 2025 July 4, 2026 June 28, 2025 July 4, 2026 Net income $105.0 $0.4 $119.3 $16.0 $195.1 Interest expense 11.3 7.9 23.1 15.7 41.6 Interest income (8.5) (4.3) (11.7) (7.4) (17.8) Tax expense 31.7 1.3 37.2 7.1 52.2 Depreciation and amortization 13.0 13.6 26.6 26.8 55.1 EBITDA $152.5 $18.8 $194.5 $58.1 $326.2 Adjustments to EBITDA Tariff refund recovery (a) $ (127.7) - $ (127.7) - $ (127.7) Leadership transition costs (b) 4.7 1.1 4.7 7.2 5.6 IP litigation (c) 1.2 - 1.2 - 1.2 Operating model improvement costs (d) - 6.6 - 9.8 4.4 Organizational restructuring (e) - - - - 9.8 Loss on extinguishment of debt (f) - - - - 1.7 Pension plan settlement (g) - - - - 8.8 Total adjustments (121.7) 7.7 (121.7) 17.0 (96.2) Adjusted EBITDA $30.8 $26.5 $72.8 $75.1 $230.0 (a) Related to $128 million of IEEPA tariff recoveries, excluding $4 million of interest received. (b) Related to costs associated with the retirement of Michael D. Casey, the Company’s former Chief Executive Officer, in the first quarter of fiscal 2025 and costs related to the departure of Douglas C. Palladini, the Company’s former Chief Executive Officer, in the second quarter of fiscal 2026. (c) Related legal defense costs arising from intellectual property litigation not in the ordinary course of business. (d) Primarily related to third-party consulting costs. (e) Related to charges for severance and other termination benefits as a result of organizational restructuring. (f) Related to redemption of the $500 million senior notes due 2027 and cash-flow based revolving credit facility. (g) Non-cash charge for settlement of the OshKosh B’Gosh Pension Plan.
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Fiscal Quarter Ended $ in thousands, except EPS As reported on a GAAP Basis As adjusted (a) July 4, 2026 June 28, 2025 July 4, 2026 June 28, 2025 Basic net income per common share: Net income $104,958 $446 $9,411 $6,302 Income allocated to participating securities (2,846) (231) (229) (231) Net income available to common shareholders $102,112 $215 $9,182 $6,071 Basic net income per common share $2.87 $0.01 $0.26 $0.17 Diluted net income per common share: Net income $104,958 $446 $9,411 $6,302 Income allocated to participating securities (2,845) (231) (229) (231) Net income available to common shareholders $102,113 $215 $9,182 $6,071 Diluted net income per common share $2.87 $0.01 $0.26 $0.17 Fiscal Quarter Ended Weighted-average number of common and common equivalent shares outstanding: July 4, 2026 June 28, 2025 Basic number of common shares outstanding 35,591,295 35,409,988 Dilutive effect of equity awards 8,865 - Diluted number of common and common equivalent shares outstanding 35,600,160 35,409,988 SECOND QUARTER RECONCILIATION OF ADJUSTED NET INCOME ALLOCABLE TO COMMON SHAREHOLDERS (a) In addition to the results provided in this earnings release in accordance with GAAP, the Company has provided adjusted, non-GAAP financial measurements that present per share data excluding the adjustments discussed above. The Company has excluded $95.5 million in after-tax benefits from these results for the fiscal quarter and two fiscal quarters ended July 4, 2026. Additionally, the Company has excluded $5.9 million and $14.1 million in after-tax expenses from these results for the fiscal quarter and two fiscal quarters ended June 28, 2025, respectively. Note: Results may not be additive due to rounding. 22
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Two Fiscal Quarters Ended $ in thousands, except EPS As reported on a GAAP Basis As adjusted (a) July 4, 2026 June 28, 2025 July 4, 2026 June 28, 2025 Basic net income per common share: Net income $119,294 $15,985 $23,747 $30,052 Income allocated to participating securities (3,332) (866) (617) (866) Net income available to common shareholders $115,962 $15,119 $23,130 $29,186 Basic net income per common share $3.26 $0.43 $0.65 $0.83 Diluted net income per common share: Net income $119,294 $15,985 $23,747 $30,052 Income allocated to participating securities (3,332) (866) (617) (866) Net income available to common shareholders $115,962 $15,119 $23,130 $29,186 Diluted net income per common share $3.26 $0.43 $0.65 $0.83 Two Fiscal Quarters Ended Weighted-average number of common and common equivalent shares outstanding: July 4, 2026 June 28, 2025 Basic number of common shares outstanding 35,542,362 35,361,039 Dilutive effect of equity awards 5,093 605 Diluted number of common and common equivalent shares outstanding 35,547,455 35,361,644 FIRST HALF RECONCILIATION OF ADJUSTED NET INCOME ALLOCABLE TO COMMON SHAREHOLDERS (a) In addition to the results provided in this earnings release in accordance with GAAP, the Company has provided adjusted, non-GAAP financial measurements that present per share data excluding the adjustments discussed above. The Company has excluded $95.5 million in after-tax benefits from these results for the fiscal quarter and two fiscal quarters ended July 4, 2026. Additionally, the Company has excluded $5.9 million and $14.1 million in after-tax expenses from these results for the fiscal quarter and two fiscal quarters ended June 28, 2025, respectively. Note: Results may not be additive due to rounding. 23
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Note: Results may not be additive due to rounding. NET SALES CONSTANT CURRENCY RECONCILIATION $ in millions Fiscal Quarter Ended Reported Net Sales July 4, 2026 Impact of Foreign Currency Translation Constant- Currency Net Sales July 4, 2026 Reported Net Sales June 28, 2025 Reported Net Sales % Change Constant- Currency Net Sales % Change Consolidated net sales $615.5 $2.4 $613.1 $585.3 5.2% 4.7% International segment net sales $95.3 $2.4 $92.9 $92.8 2.7% 0.1% 24 The Company evaluates its net sales on both an “as reported” and a “constant currency” basis. The constant currency presentation, which is a non-GAAP measure, excludes the impact of fluctuations in foreign currency exchange rates that occurred between the comparative periods. Constant currency net sales results are calculated by translating current period net sales in local currency to the U.S. dollar amount by using the currency conversion rate for the prior comparative period. The Company consistently applies this approach to net sales for all countries where the functional currency is not the U.S. dollar. The Company believes that the presentation of net sales on a constant currency basis provides useful supplemental information regarding changes in our net sales that were not due to fluctuations in currency exchange rates and such information is consistent with how the Company assesses changes in its net sales between comparative periods. Two Fiscal Quarters Ended Reported Net Sales July 4, 2026 Impact of Foreign Currency Translation Constant- Currency Net Sales July 4, 2026 Reported Net Sales June 28, 2025 Reported Net Sales % Change Constant- Currency Net Sales % Change Consolidated net sales $1,296.6 $8.0 $1,288.6 $1,215.1 6.7% 6.0% International segment net sales $192.7 $8.0 $184.8 $178.1 8.2% 3.8%
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25 STORE COUNT RECONCILIATION U.S Canada Mexico Total Store count at January 3, 2026 804 192 72 1,068 Openings 3 0 1 4 Closings (9) (1) 0 (10) Store count at April 4, 2026 798 191 73 1,062 Openings 1 0 1 2 Closings (20) (1) (1) (22) Store count at July 4, 2026 779 190 73 1,042
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Statements in this press release that are not historical fact and use predictive words such as “estimates”, “outlook”, “guidance”, “expect”, “believe”, “intend”, “designed”, “target”, “plans”, “may”, “will”, “opportunities”, “are confident” and similar words are forward-looking statements (as such term is defined in the Private Securities Litigation Reform Act of 1995). These forward- looking statements and related assumptions involve risks and uncertainties that could cause actual results and outcomes to differ materially from any forward-looking statements or views expressed in this press release. These risks and uncertainties include, but are not limited to, those disclosed in Part II, Item 1A. “Risk Factors” of the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended July 4, 2026 and Part I, Item 1A. “Risk Factors” of the Company’s Annual Report on Form 10-K for the fiscal year ended January 3, 2026, and otherwise in our reports and filings with the Securities and Exchange Commission, as well as the following factors: changes in global economic and financial conditions, and the resulting impact on consumer confidence and consumer spending, as well as other changes in consumer discretionary spending habits; risks related to public health crises; risks related to the organizational restructuring plan, including, but not limited to, our ability to achieve the expected savings from the plan and to fully implement the plan; risks related to consumer tastes and preferences, as well as fashion trends; the failure to protect our intellectual property; the diminished value of our brands, potentially as a result of negative publicity or unsuccessful branding and marketing efforts; delays, product recalls, or loss of revenue due to a failure to meet our quality standards; risks related to uncertainty regarding the future of international trade agreements and the United States’ position on international trade, as well as significant political, trade, and regulatory developments and other circumstances beyond our control; the roll-back of incremental tariffs imposed under the International Emergency Economic Powers Act (the “incremental tariffs”) and any additional actions taken in response to their roll-back, including, but not limited to, tariffs imposed pursuant to Section 122 of the Trade Act of 1974 and tariffs imposed under Section 301 of the Trade Act of 1974; our ability to recover refunds of incremental tariff amounts or other tariff amounts paid; increased competition in the marketplace; ongoing political and economic conflicts that could impact our global and domestic operations, including, but not limited to, the conflict between the United States, Israel, and Iran; financial difficulties for one or more of our major customers; identification of locations and negotiation of appropriate lease terms for our retail stores; distinct risks facing our eCommerce business; failure to forecast demand for our products and our failure to manage our inventory; increased margin pressures, including increased cost of materials and labor and our inability to successfully increase prices to offset these increased costs; continued inflationary pressures with respect to labor and raw materials and global supply chain constraints that have, and could continue, to affect freight, transit, and other costs; fluctuations in foreign currency exchange rates; unseasonable or extreme weather conditions; risks associated with corporate responsibility issues; our foreign sourcing arrangements; a relatively small number of vendors supply a significant amount of our products; disruptions in our supply chain, including increased transportation and freight costs; our ability to effectively source and manage inventory; problems with our Braselton, Georgia distribution facility; pending and threatened lawsuits; a breach of our information technology systems and the loss of personal data or a failure to implement new information technology systems successfully; unsuccessful expansion into international markets; failure to comply with various laws and regulations; failure to properly manage strategic initiatives; retention of key individuals; acquisition and integration of other brands and businesses; failure to achieve sales growth plans and profitability objectives to support the carrying value of our intangible assets; our continued ability to meet obligations related to our debt; changes in our tax obligations, including additional customs, duties or tariffs; our continued ability to declare and pay a dividend; volatility in the market price of our common stock; and the cost or effort required for our shareholders to bring certain claims or actions against us, as a result of our designation of the Court of Chancery of the State of Delaware as the sole and exclusive forum for certain types of actions and proceedings. Except for any ongoing obligations to disclose material information as required by federal securities laws, the Company does not undertake any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. The inclusion of any statement in this press release does not constitute an admission by the Company or any other person that the events or circumstances described in such statement are material. The Company’s outlook (and related assumptions) for the third quarter 2026 include an anticipated non-GAAP adjustment related to IP litigation costs of approximately $1 million. The Company’s full-year fiscal 2026 outlook (and related assumptions) includes an anticipated non-GAAP adjustment related to leadership transition costs and IP litigation costs of approximately $8 million and a recovery of previously paid import duties of $132 million. We do not reconcile forward-looking adjusted operating income or adjusted diluted earnings per share to their most directly comparable GAAP measures because we cannot predict with reasonable certainty the ultimate outcome of certain components of such reconciliations that are not within our control due to factors described above, or others that may arise, without unreasonable effort. For these reasons, we are unable to assess the probable significance of the unavailable information, which could materially impact the amount of future operating income or diluted EPS, the most directly comparable GAAP metrics to adjusted operating income and adjusted diluted earnings per share, respectively. FORWARD LOOKING STATEMENTS & OTHER INFORMATION 26