Item 1. FINANCIAL STATEMENTS (UNAUDITED)

WILLIAMS-SONOMA, INC.

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS

(Unaudited)

			For the Thirteen Weeks Ended												For the Twenty-six Weeks Ended
(In thousands, except per share amounts)			August 2, 2026						August 3, 2025						August 2, 2026						August 3, 2025
Net revenues			$	1,959,757					$	1,836,760					$	3,765,213					$	3,566,873
Cost of goods sold			947,809						972,137						1,959,839						1,936,441
Gross profit			1,011,948						864,623						1,805,374						1,630,432
Selling, general and administrative expenses			563,153						536,564						1,064,891						1,011,660
Operating income			448,795						328,059						740,483						618,772
Interest income, net			12,412						9,080						19,319						18,613
Earnings before income taxes			461,207						337,139						759,802						637,385
Income taxes			123,098						89,577						190,331						158,560
Net earnings			$	338,109					$	247,562					$	569,471					$	478,825
Basic earnings per share			$	2.87					$	2.03					$	4.82					$	3.91
Diluted earnings per share			$	2.84					$	2.00					$	4.77					$	3.86
Shares used in calculation of earnings per share:
Basic			117,765						122,121						118,075						122,614
Diluted			118,892						123,595						119,375						124,163

See Notes to Condensed Consolidated Financial Statements.

WILLIAMS-SONOMA, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

			For the Thirteen Weeks Ended												For the Twenty-six Weeks Ended
(In thousands)			August 2, 2026						August 3, 2025						August 2, 2026						August 3, 2025
Net earnings			$	338,109					$	247,562					$	569,471					$	478,825
Other comprehensive income (loss):
Foreign currency translation adjustments			(1,727)						480						(966)						5,650
Comprehensive income			$	336,382					$	248,042					$	568,505					$	484,475

See Notes to Condensed Consolidated Financial Statements.

WILLIAMS-SONOMA, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

			As of
(In thousands, except per share amounts)			August 2, 2026						February 1, 2026						August 3, 2025
ASSETS
Current assets
Cash and cash equivalents			$	1,028,936					$	1,019,801					$	985,823
Accounts receivable, net			146,219						126,821						115,509
Merchandise inventories, net			1,447,423						1,462,849						1,433,605
Prepaid expenses			105,583						80,053						100,622
Other current assets			18,385						23,663						19,961
Total current assets			2,746,546						2,713,187						2,655,520
Property and equipment, net			1,121,677						1,095,158						1,029,526
Operating lease right-of-use assets			1,322,644						1,270,272						1,221,792
Deferred income taxes, net			74,433						99,161						95,797
Goodwill			77,369						77,398						77,374
Other long-term assets, net			163,637						156,736						148,359
Total assets			$	5,506,306					$	5,411,912					$	5,228,368
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable			$	703,822					$	637,985					$	601,661
Accrued expenses			207,857						314,588						202,914
Gift card and other deferred revenue			618,926						602,940						578,192
Income taxes payable			62,098						78,943						74,329
Operating lease liabilities			217,032						221,356						222,572
Other current liabilities			88,843						98,318						86,641
Total current liabilities			1,898,578						1,954,130						1,766,309
Long-term operating lease liabilities			1,310,914						1,235,549						1,171,675
Other long-term liabilities			155,900						139,674						140,688
Total liabilities			3,365,392						3,329,353						3,078,672
Commitments and contingencies – See Note F
Stockholders’ equity
Preferred stock: $0.01 par value; 7,500 shares authorized; none issued			—						—						—
Common stock: $0.01 par value; 253,125 shares authorized; 117,779, 118,770 and 121,790 shares issued and outstanding at August 2, 2026, February 1, 2026 and August 3, 2025, respectively			1,178						1,188						1,219
Additional paid-in capital			543,931						587,433						544,244
Retained earnings			1,611,605						1,509,129						1,622,191
Accumulated other comprehensive loss			(14,142)						(13,176)						(15,943)
Treasury stock, at cost: 11, 14 and 14 shares as of August 2, 2026, February 1, 2026 and August 3, 2025, respectively			(1,658)						(2,015)						(2,015)
Total stockholders’ equity			2,140,914						2,082,559						2,149,696
Total liabilities and stockholders’ equity			$	5,506,306					$	5,411,912					$	5,228,368

See Notes to Condensed Consolidated Financial Statements.

WILLIAMS-SONOMA, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(Unaudited)

			Common stock												Additional paid-in capital						Retained earnings						Accumulated other comprehensive income (loss)						Treasury stock						Total stockholders’ equity
(In thousands)			Shares						Amount
Balance at February 1, 2026			118,770						$	1,188					$	587,433					$	1,509,129					$	(13,176)					$	(2,015)					$	2,082,559
Net earnings			—						—						—						231,362						—						—						231,362
Foreign currency translation adjustments			—						—						—						—						761						—						761
Release of stock-based awards 1			581						6						(93,312)						—						—						(290)						(93,596)
Repurchases of common stock 2			(1,608)						(16)						(5,307)						(284,320)						—						—						(289,643)
Reissuance of treasury stock under stock-based compensation plans 1			—						—						(388)						(259)						—						647						—
Stock-based compensation expense			—						—						29,348						—						—						—						29,348
Dividends declared			—						—						—						(90,987)						—						—						(90,987)
Balance at May 3, 2026			117,743						$	1,178					$	517,774					$	1,364,925					$	(12,415)					$	(1,658)					$	1,869,804
Net earnings			—						—						—						338,109						—						—						338,109
Foreign currency translation adjustments			—						—						—						—						(1,727)						—						(1,727)
Release of stock-based awards 1			36						—						(5,500)						—						—						—						(5,500)
Repurchases of common stock 2			—						—						—						75						—						—						75
Stock-based compensation expense			—						—						31,657						—						—						—						31,657
Dividends declared			—						—						—						(91,504)						—						—						(91,504)
Balance at August 2, 2026			117,779						$	1,178					$	543,931					$	1,611,605					$	(14,142)					$	(1,658)					$	2,140,914

1**Amounts are shown net of shares withheld for employee taxes.

2**Repurchases of common stock include accrued excise taxes of $1.8 million as of August 2, 2026, which is recorded in retained earnings.

See Notes to Condensed Consolidated Financial Statements.

WILLIAMS-SONOMA, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(Unaudited)

			Common stock												Additional paid-in capital						Retained earnings						Accumulated other comprehensive income (loss)						Treasury stock						Total stockholders’ equity
(In thousands)			Shares						Amount
Balance at February 2, 2025			123,125						$	1,232					$	571,585					$	1,591,630					$	(21,593)					$	(435)					$	2,142,419
Net earnings			—						—						—						231,263						—						—						231,263
Foreign currency translation adjustments			—						—						—						—						5,170						—						5,170
Release of stock-based awards 1			468						5						(65,071)						—						—						(290)						(65,356)
Repurchases of common stock 2			(599)						(6)						(1,864)						(86,329)						—						(1,911)						(90,110)
Reissuance of treasury stock under stock-based compensation plans 1			—						—						(448)						(173)						—						621						—
Stock-based compensation expense			—						—						20,203						—						—						—						20,203
Dividends declared			—						—						—						(82,313)						—						—						(82,313)
Balance at May 4, 2025			122,994						$	1,231					$	524,405					$	1,654,078					$	(16,423)					$	(2,015)					$	2,161,276
Net earnings			—						—						—						247,562						—						—						247,562
Foreign currency translation adjustments			—						—						—						—						480						—						480
Release of stock-based awards 1			24						—						(2,548)						—						—						—						(2,548)
Repurchases of common stock 2			(1,228)						(12)						(3,916)						(197,159)						—						—						(201,087)
Stock-based compensation expense			—						—						26,303						—						—						—						26,303
Dividends declared			—						—						—						(82,290)						—						—						(82,290)
Balance at August 3, 2025			121,790						$	1,219					$	544,244					$	1,622,191					$	(15,943)					$	(2,015)					$	2,149,696

1**Amounts are shown net of shares withheld for employee taxes.

2**Repurchases of common stock include accrued excise taxes of $2.1 million as of August 3, 2025, which is recorded in retained earnings.

See Notes to Condensed Consolidated Financial Statements.

WILLIAMS-SONOMA, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

			For the Twenty-six Weeks Ended
(In thousands)			August 2, 2026						August 3, 2025
Cash flows from operating activities:
Net earnings			$	569,471					$	478,825
Adjustments to reconcile net earnings to net cash provided by (used in) operating activities:
Depreciation and amortization			112,683						113,165
Loss on disposal/impairment of assets			1,108						3,599
Non-cash lease expense			127,380						121,936
Deferred income taxes			12,884						14,658
Tax benefit related to stock-based awards			11,650						11,423
Stock-based compensation expense			61,530						46,974
Other			(898)						(1,275)
Changes in:
Accounts receivable			(19,495)						2,411
Merchandise inventories			15,000						(98,562)
Prepaid expenses and other assets			(27,704)						(37,959)
Accounts payable			49,314						(48,962)
Accrued expenses and other liabilities			(89,166)						(78,142)
Gift card and other deferred revenue			16,197						(7,069)
Operating lease liabilities			(127,247)						(125,977)
Income taxes payable			(16,845)						6,633
Net cash provided by operating activities			695,862						401,678
Cash flows from investing activities:
Purchases of property and equipment			(116,434)						(110,293)
Other			62						(1,195)
Net cash used in investing activities			(116,372)						(111,488)
Cash flows from financing activities:
Repurchases of common stock			(287,805)						(289,108)
Payment of dividends			(175,444)						(155,994)
Tax withholdings related to stock-based awards			(99,095)						(67,903)
Debt issuance costs			—						(1,187)
Other			(7,658)						(6,941)
Net cash used in financing activities			(570,002)						(521,133)
Effect of exchange rates on cash and cash equivalents			(353)						3,789
Net increase (decrease) in cash and cash equivalents			9,135						(227,154)
Cash and cash equivalents at beginning of period			1,019,801						1,212,977
Cash and cash equivalents at end of period			$	1,028,936					$	985,823

See Notes to Condensed Consolidated Financial Statements.

WILLIAMS-SONOMA, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE A. FINANCIAL STATEMENTS - BASIS OF PRESENTATION

These financial statements include Williams-Sonoma, Inc. and its wholly owned subsidiaries (“Company,” “we,” “us” or “our”). The Condensed Consolidated Balance Sheets as of August 2, 2026, February 1, 2026 and August 3, 2025, the Condensed Consolidated Statements of Earnings, the Condensed Consolidated Statements of Comprehensive Income, and the Condensed Consolidated Statements of Stockholders’ Equity for the thirteen and twenty-six weeks then ended and the Condensed Consolidated Statements of Cash Flows for the twenty-six weeks then ended, have been prepared by us, and have not been audited. In our opinion, the financial statements include all adjustments (which include normal recurring adjustments) necessary to present fairly the financial position at the balance sheet dates and the results of operations for the thirteen and twenty-six weeks then ended. Intercompany transactions and accounts have been eliminated in our consolidation. The balance sheet as of February 1, 2026, presented herein, has been derived from our audited Consolidated Balance Sheet included in our Annual Report on Form 10-K for the fiscal year ended February 1, 2026.

The Company's fiscal year ends on the Sunday closest to January 31. All references to “fiscal 2026” represent the 52-week fiscal year that will end on January 31, 2027 and all references to “fiscal 2025” represent the 52-week fiscal year that ended February 1, 2026.

The results of operations for the thirteen and twenty-six weeks ended August 2, 2026 are not necessarily indicative of the operating results of the full year.

Certain information and footnote disclosures normally included in the annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) have been omitted. These financial statements should be read in conjunction with the Consolidated Financial Statements and notes thereto included in our Annual Report on Form 10-K for the fiscal year ended February 1, 2026.

Recently Issued Accounting Pronouncements

In November 2024, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses and ASU 2025-01*, Income Statement—Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date*. The ASU requires public business entities to disclose in the notes to the financial statements, among other things, specific information about certain costs and expenses including purchases of inventory, employee compensation, and depreciation and amortization. This ASU is effective for fiscal years beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027, with early adoption permitted. We are currently evaluating the impact of this ASU on our Consolidated Financial Statements and related disclosures.

In September 2025, the FASB issued ASU 2025-06, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40). The ASU amends certain aspects of the accounting for and disclosure of software costs under ASC 350-40. This ASU is effective for fiscal years and interim reporting periods beginning after December 15, 2027, with early adoption permitted. We are currently evaluating the impact of this ASU on our Consolidated Financial Statements and related disclosures.

In December 2025, the FASB issued ASU 2025-10, Government Grants (Topic 832): Accounting for Government Grants Received by Business Entities. The ASU establishes the recognition, measurement and presentation of government grants received by a business entity, including guidance for a grant related to an asset and a grant related to income. This ASU is effective for fiscal years beginning after December 15, 2028, and interim reporting periods within those annual reporting periods. We are currently evaluating the impact of this ASU on our Consolidated Financial Statements and related disclosures.

NOTE B. BORROWING ARRANGEMENTS

Credit Facility

We have a credit facility (the “Credit Facility”) which provides for a $600 million unsecured revolving line of credit. Our Credit Facility may be used to borrow revolving loans or to request the issuance of letters of credit. We may, upon notice to the administrative agent, request existing or new lenders, at such lenders’ option, to increase the Credit Facility by up to $250 million to provide for a total of $850 million of unsecured revolving credit.

During the thirteen and twenty-six weeks ended August 2, 2026 and August 3, 2025, we had no borrowings under our Credit Facility. Additionally, as of August 2, 2026, issued but undrawn standby letters of credit of $13.6 million were outstanding under our Credit Facility. The standby letters of credit were primarily issued to secure the liabilities associated with workers’ compensation and other insurance programs. Our Credit Facility matures on June 26, 2030, at which time all outstanding

borrowings must be repaid and all outstanding letters of credit must be cash collateralized. We may elect to extend the maturity date, subject to lender approval.

The interest rate applicable to the Credit Facility is variable and may be elected by us as: (i) the Secured Overnight Financing Rate (“SOFR”) and an applicable margin based on our leverage ratio, ranging from 0.91% to 1.55% or (ii) a base rate as defined in the Credit Facility, plus an applicable margin based on our leverage ratio, ranging from 0% to 0.55%.

Our Credit Facility contains certain restrictive loan covenants, including, among others, a financial covenant requiring a maximum leverage ratio (funded debt adjusted for operating lease liabilities to earnings before interest, income tax, depreciation, amortization and rent expense), and covenants limiting our ability to incur indebtedness, grant liens, make acquisitions, merge or consolidate, and dispose of assets. As of August 2, 2026, we were in compliance with our financial covenants under our Credit Facility and, based on our current projections, we expect to remain in compliance throughout the next 12 months.

Letter of Credit Facilities

We have three unsecured letter of credit facilities for a total of $35 million. Our letter of credit facilities contain covenants that are consistent with our Credit Facility. Interest on unreimbursed amounts under our letter of credit facilities accrues at a base rate as defined in the Credit Facility, plus an applicable margin based on our leverage ratio. As of August 2, 2026, no amounts were outstanding under our letter of credit facilities. On August 6, 2026, we renewed two of our letter of credit facilities totaling $30 million on substantially similar terms. The two letter of credit facilities mature on August 18, 2027, and the latest expiration date possible for future letters of credit issued under these facilities is January 15, 2028. One of the letter of credit facilities totaling $5 million matures on June 26, 2030, which is also the latest expiration date possible for future letters of credit issued under the facility.

NOTE C. STOCK-BASED COMPENSATION

Equity Award Programs

Our Amended and Restated 2001 Long-Term Incentive Plan (the “Plan”) provides for grants of incentive stock options, nonqualified stock options, stock-settled stock appreciation rights, restricted stock awards, restricted stock units (including those that are performance-based), deferred stock awards (collectively, “stock awards”) and dividend equivalents up to an aggregate of 85.4 million shares. As of August 2, 2026, there were approximately 6.1 million shares available for future grant. Awards may be granted under our Plan to officers, employees and non-employee members of the Board of Directors of the Company or any parent or subsidiary. Shares issued as a result of award exercises or releases are primarily funded with the issuance of new shares.

Stock Awards

Annual grants of stock awards are limited to two million shares on a per person basis. Stock awards granted to employees generally vest evenly over a period of four years for service-based awards. Certain performance-based awards, which have variable payout conditions based on predetermined financial targets, generally vest three years from the date of grant. Certain stock awards and other agreements contain vesting acceleration clauses which cover events including, but not limited to, retirement, disability, death, merger or a similar corporate event. Stock awards granted to non-employee Board of Directors members generally vest in one year. Non-employee directors automatically receive stock awards on the date of their initial election to the Board of Directors and annually thereafter on the date of the annual meeting of stockholders (so long as they continue to serve as a non-employee Board of Directors member). Non-employee directors may also elect, on terms prescribed by the Company, to receive all of their annual cash compensation to be earned in respect of the applicable fiscal year either in the form of (i) fully vested stock units or (ii) fully vested deferred stock units.

Stock-Based Compensation Expense

During the thirteen and twenty-six weeks ended August 2, 2026, we recognized total stock-based compensation expense, as a component of selling, general and administrative expenses (“SG&A”) of $32.0 million and $61.5 million, respectively. During the thirteen and twenty-six weeks ended August 3, 2025, we recognized total stock-based compensation expense, as a component of SG&A of $26.6 million and $47.0 million, respectively.

NOTE D. EARNINGS PER SHARE

Basic earnings per share is computed as net earnings divided by the weighted-average number of common shares outstanding for the period. Diluted earnings per share is computed as net earnings divided by the weighted-average number of common shares outstanding and common stock equivalents outstanding for the period using the treasury stock method. Common stock equivalents consist of shares subject to stock-based awards to the extent their inclusion would be dilutive.

The following is a reconciliation of net earnings and the number of shares used in the basic and diluted earnings per share computations:

(In thousands, except per share amounts)			Net earnings						Weighted average shares						Earnings per share
Thirteen weeks ended August 2, 2026
Basic			$	338,109					117,765						$	2.87
Effect of dilutive stock-based awards									1,127
Diluted			$	338,109					118,892						$	2.84
Thirteen weeks ended August 3, 2025
Basic			$	247,562					122,121						$	2.03
Effect of dilutive stock-based awards									1,474
Diluted			$	247,562					123,595						$	2.00
Twenty-six weeks ended August 2, 2026
Basic			$	569,471					118,075						$	4.82
Effect of dilutive stock-based awards									1,300
Diluted			$	569,471					119,375						$	4.77
Twenty-six weeks ended August 3, 2025
Basic			$	478,825					122,614						$	3.91
Effect of dilutive stock-based awards									1,549
Diluted			$	478,825					124,163						$	3.86

The effect of anti-dilutive stock-based awards was not material for the thirteen and twenty-six weeks ended August 2, 2026 and August 3, 2025.

NOTE E. SEGMENT REPORTING

We identify our operating segments according to how our business activities are managed and evaluated. Each of our brands are operating segments. Because they share similar economic and other qualitative characteristics, we have aggregated our operating segments into a single reportable segment.

Our single reportable segment derives revenues from sales of merchandise through our e-commerce websites and retail stores, and includes shipping fees received from customers for delivery of merchandise to their homes. The accounting policies of our single reportable segment are described in the Summary of Significant Accounting Policies within Part II, Item 8 of our Annual Report on Form 10-K for the fiscal year ended February 1, 2026.

Our chief operating decision maker (“CODM”) is our Chief Executive Officer. The CODM assesses performance for our single reportable segment and decides how to allocate resources based on operating income, which is reported on the Condensed Consolidated Statements of Earnings. Segment balance sheet information is not regularly provided to the CODM. The CODM uses operating income to decide whether to reinvest profits into our operating segments or allocate to other purposes, such as for repurchases of common stock, payment of dividends or acquisitions.

Operating income is used to monitor budget versus actual results. The CODM also uses operating income in competitive analysis by benchmarking to our peers. The competitive analysis, along with the monitoring of budget versus actual results, is used in assessing performance of the segment.

The following table summarizes reported net revenues, significant segment expenses, operating income and earnings before income taxes for the thirteen and twenty-six weeks ended August 2, 2026 and August 3, 2025.

			For the Thirteen Weeks Ended												For the Twenty-six Weeks Ended
(In thousands)			August 2, 2026						August 3, 2025						August 2, 2026						August 3, 2025
Net revenues			$	1,959,757					$	1,836,760					$	3,765,213					$	3,566,873
Less:
Cost of merchandise and shipping			739,807						770,759						1,548,282						1,537,395
Occupancy, excluding depreciation			152,104						145,396						300,388						287,225
Employment			319,777						312,467						606,464						582,897
Advertising			143,945						133,419						265,746						251,169
Other segment items 1			99,355						89,798						192,529						176,675
Depreciation and amortization expense			55,974						56,862						111,321						112,740
Operating income			448,795						328,059						740,483						618,772
Interest income, net			12,412						9,080						19,319						18,613
Earnings before income taxes			$	461,207					$	337,139					$	759,802					$	637,385

1**Other segment items within operating income include general expenses, which consist primarily of credit card fees, data processing expenses and administrative expenses.

The following table summarizes our net revenues by brand for the thirteen and twenty-six weeks ended August 2, 2026 and August 3, 2025.

			For the Thirteen Weeks Ended 1												For the Twenty-six Weeks Ended 1
(In thousands)			August 2, 2026						August 3, 2025						August 2, 2026						August 3, 2025
Pottery Barn			$	770,808					$	724,579					$	1,479,255					$	1,419,671
West Elm			496,251						468,550						967,425						905,635
Williams Sonoma 2			268,828						249,053						540,370						506,546
Pottery Barn Kids and Teen			297,438						286,749						537,587						516,465
Other 3			126,432						107,829						240,576						218,556
Total 4			$	1,959,757					$	1,836,760					$	3,765,213					$	3,566,873
1**Includes business-to-business net revenues within each brand.
2**Includes Williams Sonoma Home net revenues.
3**Primarily consists of net revenues from Rejuvenation, Mark and Graham, our international franchise operations, GreenRow and Dormify.
4**Includes net revenues related to our international operations (including our operations in Canada, Australia, the United Kingdom, and our franchise businesses) of $80.7 million and $78.0 million for the thirteen weeks ended August 2, 2026 and August 3, 2025, respectively, and approximately $154.1 million and $155.8 million for the twenty-six weeks ended August 2, 2026 and August 3, 2025, respectively.

Long-lived assets by geographic location, which excludes deferred income taxes, goodwill, and intangible assets, are as follows:

			As of
(In thousands)			August 2, 2026						February 1, 2026						August 3, 2025
U.S.			$	2,536,840					$	2,448,273					$	2,320,554
International			53,929						57,552						63,590
Total			$	2,590,769					$	2,505,825					$	2,384,144

NOTE F. COMMITMENTS AND CONTINGENCIES

We are involved in lawsuits, claims and proceedings incident to the ordinary course of our business. These disputes, which are not currently material, have increased and continue to increase in number as our business expands and we grow as a company. We review the need for any loss contingency reserves and establish reserves when, in the opinion of management, it is probable that a matter would result in liability, and the amount of loss, if any, can be reasonably estimated. In view of the inherent difficulty of predicting the outcome of these matters, it may not be possible to determine whether any loss is probable or to reasonably estimate the amount of the loss until the case is close to resolution, in which case no reserve is established until that time. Any claims against us, whether meritorious or not, could result in costly litigation, require significant amounts of management time and result in the diversion of significant operational resources. The results of these lawsuits, claims and proceedings cannot be predicted with certainty. However, we believe that the ultimate resolution of these current matters will not have a material adverse effect on our Condensed Consolidated Financial Statements when taken as a whole.

NOTE G. STOCK REPURCHASE PROGRAM AND DIVIDENDS

Stock Repurchase Program

During the thirteen weeks ended August 2, 2026, we did not repurchase any shares of our common stock. During the twenty-six weeks ended August 2, 2026, pursuant to our stock repurchase program we repurchased 1,608,253 shares of our common stock at an average cost of $178.96 per share for an aggregate cost of $287.8 million, excluding excise taxes of $1.8 million. As of August 2, 2026, there was $50.8 million remaining under our September 2024 stock repurchase authorization. In November 2025, our Board of Directors approved a new $1.0 billion stock repurchase authorization, which will become effective once our September 2024 authorization is fully utilized. As of August 2, 2026, the total stock repurchase authorization remaining under the program was approximately $1.1 billion.

During the thirteen weeks ended August 3, 2025, we repurchased 1,227,599 shares of our common stock at an average cost of $162.22 per share for an aggregate cost of $199.1 million, excluding excise taxes of $2.0 million. During the twenty-six weeks ended August 3, 2025, we repurchased 1,826,790 shares of our common stock at an average cost of $158.26 per share for an aggregate cost of $289.1 million, excluding excise taxes of $2.1 million.

As of August 2, 2026, February 1, 2026 and August 3, 2025, we held treasury stock of $1.7 million, $2.0 million and $2.0 million, respectively. We intend to satisfy future stock-based award settlements in certain foreign jurisdictions using this treasury stock.

Stock repurchases under our program may be made through open market and privately negotiated transactions at times and in such amounts as management deems appropriate. The timing and actual number of shares repurchased will depend on a variety of factors including price, corporate and regulatory requirements, capital availability and market conditions.

Dividends

We declared cash dividends of $0.76 and $0.66 per common share during the thirteen weeks ended August 2, 2026 and August 3, 2025, respectively.

We declared cash dividends of $1.52 and $1.32 during the twenty-six weeks ended August 2, 2026 and August 3, 2025, respectively. Our quarterly cash dividend may be limited or terminated at any time.

NOTE H. FAIR VALUE MEASUREMENTS

Fair value is the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

We determine the fair value of financial and non-financial assets and liabilities using the fair value hierarchy established by Accounting Standards Codification 820, Fair Value Measurement, which defines three levels of inputs that may be used to measure fair value, as follows:

• Level 1: inputs which include quoted prices in active markets for identical assets or liabilities;

• Level 2: inputs which include observable inputs other than Level 1 inputs, such as quoted prices in active markets for similar assets or liabilities; quoted prices for identical or similar assets or liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the asset or liability; and

• Level 3: inputs which include unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the underlying asset or liability.

The fair values of our cash and cash equivalents are based on Level 1 inputs, which include quoted prices in active markets for identical assets.

Long-lived Assets

We review the carrying value of all long-lived assets for impairment, primarily at an individual store level, whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. We measure property and equipment at fair value on a nonrecurring basis using Level 3 inputs as defined in the fair value hierarchy. We measure right-of-use assets on a nonrecurring basis using Level 2 inputs that are corroborated by market data. Where Level 2 inputs are not readily available, we use Level 3 inputs. Fair value of these long-lived assets is based on the present value of estimated future cash flows using a discount rate commensurate with the risk.

The significant unobservable inputs used in the fair value measurement of our store assets are sales growth/decline, gross margin, employment costs, lease escalations, market rental rates, changes in local real estate markets in which we operate, inflation and the overall economics of the retail industry. Significant fluctuations in any of these inputs individually could significantly impact our measurement of fair value.

During the thirteen weeks ended August 2, 2026, no impairment charges were recognized. During the twenty-six weeks ended August 2, 2026, we recognized impairment charges, as a component of SG&A, of $0.3 million. During the thirteen and twenty-six weeks ended August 3, 2025, we recognized impairment charges of $0.3 million.

There were no transfers in and out of Level 3 categories during the thirteen and twenty-six weeks ended August 2, 2026 and August 3, 2025.

NOTE I. ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

Changes in accumulated other comprehensive income (loss) by component, net of tax, are as follows:

(In thousands)			Foreign currency translation												Accumulated other comprehensive income (loss)
Balance at February 1, 2026			$	(13,176)											$	(13,176)
Foreign currency translation adjustments			761												761
Other comprehensive income (loss)			761												761
Balance at May 3, 2026			$	(12,415)											$	(12,415)
Foreign currency translation adjustments			(1,727)												(1,727)
Other comprehensive income (loss)			(1,727)												(1,727)
Balance at August 2, 2026			$	(14,142)											$	(14,142)
Balance at February 2, 2025			$	(21,593)											$	(21,593)
Foreign currency translation adjustments			5,170												5,170
Other comprehensive income (loss)			5,170												5,170
Balance at May 4, 2025			$	(16,423)											$	(16,423)
Foreign currency translation adjustments			480												480
Other comprehensive income (loss)			480												480
Balance at August 3, 2025			$	(15,943)											$	(15,943)

NOTE J. REVENUE

Merchandise Sales

Revenues from the sale of our merchandise through our e-commerce business, at our retail stores as well as to our business-to-business customers and franchisees are, in each case, recognized at a point in time when control of merchandise is transferred to the customer. Merchandise can either be picked up in our stores or delivered to the customer. For merchandise picked up in the store, control is transferred at the time of the sale to the customer. For merchandise delivered to the customer, control is transferred either when delivery has been completed, or when we have a present right to payment which, for certain merchandise, occurs upon conveyance of the merchandise to the carrier for delivery. We exclude from revenue any taxes assessed by governmental authorities, including value-added and other sales-related taxes, that are imposed on and are concurrent with revenue-generating activities. Our payment terms are primarily at the point of sale for merchandise sales and for most services. We have elected to account for shipping and handling as fulfillment activities, and not as a separate performance obligation.

Revenue from the sale of merchandise is reported net of sales returns. We estimate future returns based on historical return trends together with current product sales performance. As of August 2, 2026, February 1, 2026 and August 3, 2025, we recorded a liability for expected sales returns of $30.5 million, $40.1 million and $30.5 million, respectively, within other current liabilities and a corresponding asset for the expected net realizable value of the merchandise inventory to be returned of $8.3 million, $11.9 million and $8.5 million, respectively, within other current assets in our Condensed Consolidated Balance Sheets.

See Note E for the disclosure of our net revenues by operating segment.

Gift Card and Other Deferred Revenue

We defer revenue and record a liability when cash payments are received in advance of satisfying performance obligations, primarily associated with our merchandise sales, stored-value cards, customer loyalty programs and incentives received from credit card issuers.

We issue stored-value cards that may be redeemed on future merchandise purchases. Our stored-value cards have no expiration dates. Revenue from stored-value cards is recognized at a point in time upon redemption of the card and as control of the merchandise is transferred to the customer. Breakage is recognized in a manner consistent with our historical redemption patterns taking into consideration escheatment laws as applicable. Breakage is recognized over the estimated period of redemption of our cards of approximately four years, the majority of which is recognized within one year of the card issuance. Breakage income is not material to our Condensed Consolidated Financial Statements.

We offer a customer loyalty program, The Key Rewards, that allows members to earn points on qualifying purchases. Customers can earn points through spend on our private label and co-branded credit cards, or through non-credit card qualifying purchases. Points earned through either method enable members to receive certificates that may be redeemed on future merchandise purchases. This customer option is a material right and, accordingly, represents a separate performance obligation to the customer. The allocated consideration for the points or certificates earned by our loyalty program members is deferred based on the standalone selling price of the points and recorded within gift card and other deferred revenue within our Condensed Consolidated Balance Sheets. The measurement of standalone selling prices takes into consideration the discount the customer would receive in a separate transaction for the delivered item, as well as our estimate of certificates expected to be issued and redeemed, based on historical patterns. This measurement is applied to our portfolio of performance obligations for points or certificates earned, as all obligations have similar economic characteristics. We believe the impact to our Condensed Consolidated Financial Statements would not be materially different if this measurement was applied to each individual performance obligation. Revenue is recognized for these performance obligations at a point in time when certificates are redeemed by the customer. These obligations relate to contracts with terms less than one year, as our certificates generally expire within six months of issuance.

We enter into agreements with credit card issuers in connection with our private label and co-branded credit cards, whereby we receive cash incentives in exchange for promised services, such as licensing our brand names and marketing the credit card program to customers. These separate non-loyalty program related services promised under these agreements are interrelated and are thus considered a single performance obligation. Revenue is recognized over time as we transfer promised services throughout the contract term.

As of August 2, 2026, February 1, 2026 and August 3, 2025, we had recorded $618.9 million, $602.9 million and $578.2 million, respectively, for gift card and other deferred revenue within current liabilities in our Condensed Consolidated Balance Sheets. We expect that substantially all of the gift card and other deferred revenue as of August 2, 2026 will be recognized into net revenues within the next 12 months.

NOTE K. INCOME TAXES

The effective tax rate was 25.1% for the first half of fiscal 2026, compared to 24.9% for the first half of fiscal 2025. This increase was primarily driven by (i) a higher disallowed executive compensation deduction in fiscal 2026, partially offset by (ii) higher excess tax benefit from stock-based compensation in the first half of fiscal 2026 and (iii) the tax effect of earnings mix change.

NOTE L. TARIFF REFUND

In April 2026, we filed for a refund of the tariffs we paid in fiscal 2025 and fiscal 2026 assessed under International Emergency Economic Powers Act (“IEEPA”) in an aggregate amount of $197.8 million. During the second quarter of fiscal 2026, we applied the loss recovery model and determined that the receipt of the IEEPA refund was probable and estimable and we recorded a refund receivable.

During the second quarter of fiscal 2026, we recorded (i) a reduction of cost of goods sold of $167.8 million related to refunds received for tariffs that have been previously expensed and (ii) related interest income of $6.3 million. This income was partially offset by (i) a provision of $47.5 million to reimburse certain merchandise vendors that previously provided tariff-related concessions to the Company and (ii) a one-time tariff-related employee recognition cost of $10.0 million, in the form of a discretionary 401(k) contribution to all eligible employees.

As of August 2, 2026, we deferred $29.3 million of the tariff refund income as a reduction of merchandise inventories in our Condensed Consolidated Balance Sheet, which we anticipate recognizing as a reduction to cost of goods sold in the third quarter of fiscal 2026. In the second quarter of fiscal 2026, we collected cash refunds of $200.2 million, which includes related interest, and substantially all of our initial refund claim of $197.8 million has been collected as of August 2, 2026, with a remaining tariff refund receivable of $3.2 million in our Condensed Consolidated Balance Sheet.