SHOE CARNIVAL INC

Previous wording

Management’s Discussion and Analysis of Financial Condition and Results of Operations is intended to provide information to assist the reader in better understanding and evaluating our financial condition and results of operations. We encourage you to read this in conjunction with our Condensed Consolidated Financial Statements and the notes thereto included in PART I, ITEM 1 of this Quarterly Report on Form 10-Q, as well as our Annual Report on Form 10-K for the fiscal year ended February 3, 2024 as filed with the SEC. This section of this Quarterly Report on Form 10-Q generally discusses our results for first quarter 2024 and first quarter 2023 and year-over-year comparisons between first quarter 2024 and first quarter 2023.

Current wording

Management’s Discussion and Analysis of Financial Condition and Results of Operations is intended to provide information to assist the reader in better understanding and evaluating our financial condition and results of operations. We encourage you to read this in conjunction with our Condensed Consolidated Financial Statements and the notes thereto included in PART I, ITEM 1 of this Quarterly Report on Form 10-Q, as well as our Annual Report on Form 10-K for the fiscal year ended February 3, 2024 as filed with the SEC. This section of this Quarterly Report on Form 10-Q generally discusses our results for second quarter 2024 and second quarter 2023 and year-over-year comparisons between second quarter 2024 and second quarter 2023, as well as year-to-date results for, and comparisons between, the two periods.

Previous wording

Referred to herein, first quarter 2024 is the thirteen weeks ended May 4, 2024 and first quarter 2023 is the thirteen weeks ended April 29, 2023.

Current wording

Referred to herein, second quarter 2024 is the thirteen weeks ended August 3, 2024 and second quarter 2023 is the thirteen weeks ended July 29, 2023. Also referred to herein, year-to-date 2024 is the twenty-six weeks ended August 3, 2024 and year-to-date 2023 is the twenty-six weeks ended July 29, 2023.

Previous wording

Comparable store sales is a key performance indicator for us. Comparable store sales include stores that have been open for 13 full months after such stores’ grand opening or acquisition prior to the beginning of the period, including those stores that have been relocated or remodeled. Therefore, stores recently opened, acquired or closed are not included in comparable store sales. We generally include e-commerce sales in our comparable store sales as a result of our omnichannel retailer strategy. Due to our omnichannel retailer strategy, we view e-commerce sales as an extension of our physical stores. E-commerce sales channels associated with a physical store acquisition will not be included in comparable store sales until the initial physical stores are included. The 21 original Shoe Station stores acquired and the www.shoestation.com e-commerce site that went live in early February 2023 were included in comparable store sales calculations beginning in first quarter 2023. All Rogan’s sales (physical stores and e-commerce) are excluded from our comparable store sales.

Current wording

Comparable stores Net Sales is a key performance indicator for us. Comparable stores Net Sales include stores that have been open for 13 full months after such stores’ grand opening or acquisition prior to the beginning of the period, including those stores that have been relocated, remodeled or rebannered. Therefore, stores recently opened, acquired or permanently closed are not included in comparable stores Net Sales. We generally include e-commerce sales in our comparable stores Net Sales as a result of our omnichannel retailer strategy. Due to our omnichannel retailer strategy, we view e-commerce sales as an extension of our physical stores. E-commerce sales channels associated with a physical store acquisition will not be included in comparable stores Net Sales until the initial physical stores are included. The 21 original Shoe Station stores acquired and the www.shoestation.com e-commerce site that went live in early February 2023 were included in comparable stores Net Sales calculations beginning in first quarter 2023. All Rogan’s sales (physical stores and e-commerce) are excluded from our comparable stores Net Sales.

Previous wording

Our fiscal year is a 52/53 week year ending on the Saturday closest to January 31. Fiscal 2023 consisted of the 53 weeks ended February 3, 2023, while Fiscal 2024 consists of the 52 weeks ending February 1, 2025. The 53rd week in Fiscal 2023 caused a one-week shift in our fiscal calendar. As a result, each of our first three quarters in Fiscal 2024 is shifted one week later compared to Fiscal 2023. This one-week shift impacts our year-over-year sales comparisons when there are seasonal sales influences that fall near the respective quarter-end dates. To minimize the effect of this fiscal calendar shift on comparable store sales, our reported comparable store sales results for first quarter 2024 in this Quarterly Report on Form 10-Q and our other public disclosures compare the 13-week period ended May 4, 2024 to the 13-week period ended May 6, 2023. As such, changes in comparable store sales may not be consistent with changes in Net Sales reported for the fiscal period.

Current wording

Our fiscal year is a 52/53 week year ending on the Saturday closest to January 31. Fiscal 2023 consisted of the 53 weeks ended February 3, 2023, while Fiscal 2024 consists of the 52 weeks ending February 1, 2025. The 53rd week in Fiscal 2023 caused a one-week shift in our fiscal calendar. As a result, each of our first three quarters in Fiscal 2024 is shifted one week later compared to Fiscal 2023. This one-week shift impacts our year-over-year sales comparisons when there are seasonal sales influences that fall near the respective quarter-end dates. To minimize the effect of this fiscal calendar shift on comparable stores Net Sales, our reported comparable stores Net Sales results for second quarter 2024 in this Quarterly Report on Form 10-Q and our other public disclosures compare the thirteen-week and twenty-six week periods ended August 3, 2024 to the thirteen-week and twenty-six week periods ended August 5, 2023. As such, changes in comparable stores Net Sales may not be consistent with changes in Net Sales reported for the fiscal period.

Previous wording

Executive Summary for First Quarter Ended May 4, 2024

Current wording

Executive Summary for Second Quarter Ended August 3, 2024

Previous wording

During first quarter 2024, Net Sales grew 6.8% compared to first quarter 2023, to $300.4 million, led by the following key drivers:

Current wording

During second quarter 2024, Net Sales grew 12.9% compared to second quarter 2023, to $332.7 million, a record level of second quarter Net Sales. The increase was led by the following key drivers:

Previous wording

Rogan’s, which was acquired on February 13, 2024, delivered first quarter Net Sales of $19.6 million; and

Current wording

Rogan’s, which was acquired on February 13, 2024, delivered second quarter Net Sales of $22.0 million;

Previous wording

Long-term gross profit margin expansion has been a key driver of our profit transformation, led by our targeted promotional plans, buying strategies and growth of our Shoe Perks membership. During first quarter 2024, our gross profit margin was above 35% for the 13th consecutive quarter at 35.6%, an increase of 60 basis points compared to first quarter 2023 and an increase of 600 basis points compared to the same period five years ago.

Current wording

Long-term gross profit margin expansion has been a key driver of our profit transformation, led by our targeted promotional plans, buying strategies and growth of our Shoe Perks membership. During second quarter 2024, our gross profit margin was above 35% for the 14 th consecutive quarter at 36.1%, an increase of 30 basis points compared to second quarter 2023.

Previous wording

First quarter 2024 Operating Income totaled $22.5 million and increased 7.5% versus first quarter 2023, driven by higher Net Sales and gross profit margin expansion. Operating Income in the first quarter 2024 included $485,000 in expenses related to the Rogan’s acquisition, of which $164,000 were in Cost of Sales and $321,000 were in Selling, General and Administrative Expenses (“SG&A”).

Current wording

Operating Income in second quarter 2024 included $430,000 in merger and integration expenses related to the Rogan’s acquisition, of which $333,000 were in Cost of Sales and $97,000 were in Selling, General and Administrative Expenses (“SG&A”).

Previous wording

Merchandise Inventories totaled $411.6 million at the end of first quarter 2024, an increase of approximately $22.1 million versus first the end of first quarter 2023. The increase reflected Rogan’s inventory of approximately $40 million acquired in February 2024 and the timing of purchases, partially offset by continued inventory efficiencies as part of our ongoing inventory optimization improvement plan. Excluding the inventory acquired in the Rogan’s acquisition, Merchandise Inventories at the end of first quarter 2024 were approximately 6% lower on a dollar basis compared to the end of first quarter 2023.

Current wording

Merchandise Inventories totaled $425.5 million at the end of second quarter 2024, an increase of approximately $16.1 million compared to the end of second quarter 2023. The increase reflected Rogan’s inventory, which was approximately $40 million when acquired in February 2024, partially offset by continued inventory efficiencies as part of our ongoing inventory optimization improvement plan. Excluding the inventory acquired in the Rogan’s acquisition, Merchandise Inventories at the end of second quarter 2024 were approximately 7% lower on a dollar basis compared to the end of second quarter 2023.

Previous wording

At the end of first quarter 2024, we had total Cash, Cash Equivalents and Marketable Securities of $69.5 million. Cash and Cash Equivalents increased $24.3 million compared to the end of first quarter 2023, and cash flows from operations in first quarter 2024 increased $15.0 million compared to first quarter 2023.

Current wording

At the end of second quarter 2024, we had total Cash, Cash Equivalents and Marketable Securities of $84.5 million. Cash and Cash Equivalents increased $37.1 million compared to the end of second quarter 2023, and Cash Flows from Operations in year-to-date 2024 increased $18.4 million compared to year-to-date 2023. Fiscal 2023 year end marked the 19 th consecutive year we ended the fiscal year with no debt, and in year-to-date 2024, we continued to fund our operations and growth investments, including the purchase of Rogan’s, from operating cash flows and without incurring debt. In year-to-date 2024, we have paid $44.4 million for Rogan’s and, based on the current preliminary purchase price adjustment estimates, we will owe another $445,000 in the near term. Up to $5.0 million more in consideration will be due in 2027 if three-year performance targets are met.

Previous wording

Results of Operations for First Quarter Ended May 4, 2024 Compared to First Quarter Ended April 29, 2023

Current wording

Results of Operations for Second Quarter Ended August 3, 2024 Compared to Second Quarter Ended July 29, 2023

Previous wording

SG&A increased $6.7 million in first quarter 2024 to $84.3 million compared to $77.6 million in first quarter 2023. The increase was primarily due to higher selling expenses related to Rogan’s and increased marketing investment during first quarter 2024. As a percentage of Net Sales, SG&A were 28.1% in first quarter 2024 compared to 27.6% in first quarter 2023.

Current wording

SG&A increased $9.1 million in second quarter 2024 to $89.9 million compared to $80.8 million in second quarter 2023. The increase was primarily due to higher compensation-related costs, including compensation costs related to Rogan’s, and other Rogan’s-related operating expenses. As a percentage of Net Sales, SG&A were 27.1% in second quarter 2024 compared to 27.4% in second quarter 2023.

Previous wording

The effective income tax rate for first quarter 2024 was 25.4% compared to 22.6% for first quarter 2023. Our provision for income taxes is based on the current estimate of our annual effective tax rate and is adjusted as necessary for quarterly events. The higher effective tax rate in first quarter 2024 compared to the prior year was due to the decrease in tax benefits from share-settled equity awards. For the full 2024 fiscal year, we expect our tax rate to be between 25.5% and 26% compared to the 23.7% effective tax rate recognized during the full 2023 fiscal year.

Current wording

The effective income tax rate for second quarter 2024 was 26.3% compared to 22.3% for second quarter 2023. Our provision for income taxes is based on the current estimate of our annual effective tax rate and is adjusted as necessary for quarterly events. The higher effective tax rate in second quarter 2024 compared to second quarter 2023 was due to the decrease in tax benefits from share-settled equity awards in second quarter 2024 and a state deferred tax benefit included in second quarter 2023 that did not recur in Fiscal 2024. For the full 2024 fiscal year, we expect our tax rate to be between 25.5% and 26.0% compared to the 23.7% effective tax rate recognized during the full 2023 fiscal year.

Previous wording

Net Sales were $300.4 million during first quarter 2024 and increased 6.8% compared to first quarter 2023. The increase was due to the acquisition of Rogan’s, which added Net Sales of $19.6 million, and new store growth in the Shoe Station banner, partially offset by a 3.4% decrease in comparable store sales. E-commerce sales were approximately 9% of merchandise sales in first quarter 2024, compared to 8% in first quarter 2023, and were favorably impacted by the relaunch of www.shoecarnival.com in third quarter 2023 and the launch of www.shoestation.com in first quarter 2023.

Current wording

Net Sales were $633.1 million during year-to-date 2024 and increased 9.9% compared to year-to-date 2023. The increase was due to the acquisition of Rogan’s, which added Net Sales of $41.6 million, the effect of the calendar shift adding approximately $25 million of Net Sales to year-to-date 2024 results and new store growth in the Shoe Station banner, partially offset by a 2.8% decrease in comparable stores Net Sales. E-commerce sales were approximately 9% of merchandise sales in year-to-date 2024, compared to 8% in year-to-date 2023. Year-to-date 2024 e-commerce sales were favorably impacted by the relaunch of www.shoecarnival.com in third quarter 2023 and the launch of www.shoestation.com in first quarter 2023.

Previous wording

Gross Profit was $106.8 million during first quarter 2024, an increase of $8.3 million compared to first quarter 2023. Gross profit margin in first quarter 2024 was 35.6% compared to 35.0% in first quarter 2023. Merchandise margin increased 50 basis points primarily due to stable product margins and lower inbound freight and e-commerce shipping costs. Buying, distribution and occupancy (“BDO”) costs were higher in first quarter 2024 compared to first quarter 2023 due to rent associated with operating more stores; however, BDO costs increased gross profit margin by 10 basis points due to the higher Net Sales in first quarter 2024.

Current wording

Gross Profit was $226.7 million during year-to-date 2024, an increase of $22.8 million compared to year-to-date 2023. Gross profit margin in year-to-date 2024 was 35.8% compared to 35.4% in year-to-date 2023. BDO costs were higher in year-to-date 2024 compared to year-to-date 2023 due to occupancy costs associated with operating more stores; however, BDO costs increased gross profit margin by 50 basis points due to the higher Net Sales in year-to-date 2024. Merchandise margin decreased 10 basis points.

Previous wording

Our primary sources of liquidity are $69.5 million of Cash, Cash Equivalents and Marketable Securities on hand at the end of the first quarter 2024, cash generated from operations and availability under our $100 million Credit Agreement. We believe our resources will be sufficient to fund our cash needs, as they arise, for at least the next 12 months. Our primary uses of cash are normally for working capital, which are principally inventory purchases, investments in our stores, such as new stores, modernization/remodels and relocations, distribution center initiatives, lease payments associated with our real estate leases, potential dividend payments, potential share repurchases under our share repurchase program and the financing of capital projects, including investments in new systems. As part of our growth strategy, we have also pursued strategic acquisitions of other footwear retailers.

Current wording

Our primary sources of liquidity are $84.5 million of Cash, Cash Equivalents and Marketable Securities on hand at the end of second quarter 2024, cash generated from operations and availability under our $100 million Credit Agreement. We believe our resources will be sufficient to fund our cash needs, as they arise, for at least the next 12 months. Our primary uses of cash are normally for working capital, which are principally inventory purchases, investments in our stores, such as new stores, modernization/remodels, relocations, rebannered stores, distribution center initiatives, lease payments associated with our real estate leases, potential dividend payments, potential share repurchases under our share repurchase program and the financing of capital projects, including investments in new systems. As part of our growth strategy, we have also pursued strategic acquisitions of other footwear retailers.

Previous wording

Net cash generated from operating activities was $17.1 million in first quarter 2024 compared to $2.1 million in first quarter 2023. The change in operating cash flow was primarily driven by the timing of inventory purchases.

Current wording

Net cash generated from operating activities was $40.7 million in year-to-date 2024 compared to $22.4 million in year-to-date 2023. The change in operating cash flow was primarily driven by the timing of inventory, tax and prepaid contracts payments and higher earnings.

Previous wording

Working capital increased on a year-over-year basis and totaled $355.8 million at May 4, 2024 compared to $318.3 million at April 29, 2023. The increase was primarily attributable to a higher cash balance and higher Merchandise Inventories levels due to the acquisition of Rogan’s, partially offset by increased Accounts Payable. Our current ratio was 3.4 as of May 4, 2024 and as of April 29, 2023.

Current wording

Working capital increased on a year-over-year basis and totaled $377.1 million at August 3, 2024 compared to $330.6 million at July 29, 2023. The increase was primarily attributable to a higher cash balance and higher Merchandise Inventories levels due to the acquisition of Rogan’s. Our current ratio was 3.4 as of August 3, 2024 compared to 3.1 as of July 29, 2023.

Previous wording

Our cash outflows for investing activities are normally for capital expenditures. During the first quarters of 2024 and 2023, we expended $10.2 million and $15.0 million, respectively, for the purchase of Property and Equipment, primarily related to store modernization.

Current wording

Our cash outflows for investing activities are normally for capital expenditures. During year-to-date 2024 and 2023, we expended $15.7 million and $30.6 million, respectively, for the purchase of Property and Equipment, primarily related to store modernization and opening new Shoe Station stores.

Previous wording

During first quarter 2024, our Rogan’s acquisition resulted in the payment of initial cash consideration of $44.6 million, net of cash acquired. Additional information regarding the Rogan’s acquisition, including information on the additional contingent consideration of up to $5.0 million, can be found in Note 2 — “Acquisition of Rogan Shoes” to our Notes to Condensed Consolidated Financial Statements contained in PART I, ITEM 1 of this Quarterly Report on Form 10-Q.

Current wording

Our Rogan’s acquisition in first quarter 2024 resulted in the payment of initial cash consideration of $44.4 million, net of cash acquired, during year-to-date 2024. Additional information regarding the Rogan’s acquisition, including information on the additional contingent consideration of up to $5.0 million, can be found in Note 2 — “Acquisition of Rogan Shoes” to our Notes to Condensed Consolidated Financial Statements contained in PART I, ITEM 1 of this Quarterly Report on Form 10-Q.

Previous wording

We invest in publicly traded mutual funds designed to mitigate income statement volatility associated with our non-qualified deferred compensation plan. The balance of these Marketable Securities was $12.6 million at May 4, 2024, compared to $12.2 million at February 3, 2024 and $11.5 million at April 29, 2023. Additional information can be found in Note 5 — “Fair Value Measurements” to our Notes to Condensed Consolidated Financial Statements contained in PART I, ITEM 1 of this Quarterly Report on Form 10-Q.

Current wording

We invest in publicly traded mutual funds designed to mitigate income statement volatility associated with our non-qualified deferred compensation plan. The balance of these Marketable Securities was $12.8 million at August 3, 2024, compared to $12.2 million at February 3, 2024 and July 29, 2023. Additional information can be found in Note 5 — “Fair Value Measurements” to our Notes to Condensed Consolidated Financial Statements contained in PART I, ITEM 1 of this Quarterly Report on Form 10-Q.

Previous wording

During first quarter 2024, net cash used in financing activities was $4.4 million compared to $5.8 million during first quarter 2023. The decrease in net cash used in financing activities was primarily due to the decrease in shares surrendered by employees to pay taxes on stock-based compensation awards, partially offset by increased dividend payments.

Current wording

During year-to-date 2024, net cash used in financing activities was $8.0 million compared to $8.5 million during year-to-date 2023. The decrease in net cash used in financing activities was primarily due to the decrease in shares surrendered by employees to pay taxes on stock-based compensation awards, partially offset by increased dividend payments.

Previous wording

The Credit Agreement bears interest, at our option, at (1) the agent bank’s base rate plus 0.0% to 1.0% or (2) Adjusted Term SOFR plus 0.9% to 1.9%, depending on our achievement of certain performance criteria. A commitment fee is charged at 0.2% to 0.3% per annum, depending on our achievement of certain performance criteria, on the unused portion of the lenders’ commitment. During first quarter 2024, we did not borrow or repay funds under the Credit Agreement. Letters of credit outstanding were $1.0 million at May 4, 2024 and our borrowing capacity was $99.0 million.

Current wording

The Credit Agreement bears interest, at our option, at (1) the agent bank’s base rate plus 0.0% to 1.0% or (2) Adjusted Term SOFR plus 0.9% to 1.9%, depending on our achievement of certain performance criteria. A commitment fee is charged at 0.2% to 0.3% per annum, depending on our achievement of certain performance criteria, on the unused portion of the lenders’ commitment. During year-to-date 2024, we did not borrow or repay funds under the Credit Agreement. Letters of credit outstanding were $1.0 million at August 3, 2024 and our borrowing capacity was $99.0 million.

Previous wording

Capital expenditures for fiscal 2024, including actual expenditures in first quarter 2024, are expected to be between $25 million and $35 million, with approximately $15 million to $20 million to be used for new stores and modernization and approximately $10 million to $15 million for upgrades to our Evansville distribution center and e-commerce sales channels, various other store improvements, continued investments in technology and normal asset replacement activities. The resources allocated to projects are subject to near-term changes depending on the supply chain and potential inflationary and other macroeconomic impacts. Furthermore, the actual amount of cash required for capital expenditures for store operations depends in part on the number of stores opened, relocated, and remodeled, and the amount of lease incentives, if any, received from landlords. The number of new store openings and relocations will be dependent upon, among other things, the availability of desirable locations, the negotiation of acceptable lease terms and general economic and business conditions affecting consumer spending.

Current wording

Capital expenditures for Fiscal 2024, including actual expenditures in year-to-date 2024, are expected to be between $30 million and $35 million, with approximately $20 million to $25 million to be used for new and rebannered stores and modernization and approximately $10 million to $15 million for upgrades to our Evansville distribution center and e-commerce sales channels, various other store improvements, continued investments in technology and normal asset replacement activities. The resources allocated to projects are subject to near-term changes depending on the supply chain and potential inflationary and other macroeconomic impacts. Furthermore, the actual amount of cash required for capital expenditures for store operations depends in part on the number of stores opened, relocated, and remodeled, and the amount of lease incentives, if any, received from landlords. The number of new store openings and relocations will be dependent upon, among other things, the availability of desirable locations, the negotiation of acceptable lease terms and general economic and business conditions affecting consumer spending.

Previous wording

During first quarter 2024, we opened two Shoe Station branded stores and acquired 28 Rogan’s stores, which are being integrated into our Shoe Station banner. Increasing market penetration by adding new stores is a key component of our growth strategy. We currently have 430 stores and are targeting operating over 500 stores in 2028. We believe our current store footprint provides for growth in new markets within the United States as well as fill-in opportunities within existing markets. We aim to grow the Shoe Station banner to over 100 stores over the same time period. Future store growth may continue to be impacted by macroeconomic uncertainty and our ability to identify desirable locations and/or acquisition partners.

Current wording

We opened three new Shoe Station branded stores, permanently closed one Shoe Carnival branded store, and acquired 28 Rogan’s stores, which are being integrated into our Shoe Station banner, in year-to-date 2024. Increasing market penetration by adding new stores is a key component of our growth strategy. We currently have 430 stores and are targeting operating over 500 stores in 2028. We believe our current store footprint provides for growth in new markets within the United States as well as fill-in opportunities within existing markets. We aim to grow the Shoe Station banner to over 100 stores over the same time period. Since our acquisition of Shoe Station in December 2021, we have gained insights about the Shoe Station customer base and have defined markets where we believe a Shoe Station bannered store may outperform our current Shoe Carnival bannered store located in those markets. In year-to-date 2024, we have closed a Shoe Carnival bannered store and opened a Shoe Station bannered store in three test markets, and each test market has grown comparable stores Net Sales since transition. To further test and learn, we plan to close five to ten additional Shoe Carnival bannered stores in the second half of Fiscal 2024 and open Shoe Station bannered stores in those markets. Future store growth may continue to be impacted by macroeconomic uncertainty and our ability to identify desirable locations and/or acquisition partners.

Previous wording

On March 13, 2024, the Board of Directors approved a 12.5% increase in our cash dividend paid to shareholders in first quarter 2024. The quarterly cash dividend of $0.135 per share was paid on April 22, 2024 to shareholders of record as of the close of business on April 8, 2024. In first quarter 2023, the dividend paid was $0.100 per share. During the first quarters of 2024 and 2023, we returned $3.7 million and $2.9 million, respectively, to our shareholders through our quarterly cash dividends. The declaration and payment of any future dividends are at the discretion of the Board of Directors and will depend on our results of operations, financial condition, business conditions and other factors deemed relevant by our Board of Directors.

Current wording

On June 25, 2024, the Board of Directors approved the payment of a second quarter 2024 cash dividend paid to our shareholders. The quarterly cash dividend of $0.135 per share was paid on July 22, 2024 to shareholders of record as of the close of business on July 8, 2024. In second quarter 2023, the dividend paid was $0.100 per share. During year-to-date 2024 and 2023, we returned $7.4 million and $5.7 million, respectively, to our shareholders through our quarterly cash dividends. The declaration and payment of any future dividends are at the discretion of the Board of Directors and will depend on our results of operations, financial condition, business conditions and other factors deemed relevant by our Board of Directors.

Previous wording

No share repurchases have been made to date in Fiscal 2024 and no share repurchases were made during first quarter 2023.

Current wording

No share repurchases have been made to date in Fiscal 2024 and no share repurchases were made during year-to-date 2023.

Previous wording

Our Credit Agreement permits the payment of dividends and repurchase of shares, subject to certain covenants and restrictions. See “Credit Agreement” above and Note 9 — “Debt” to our Notes to Consolidated Financial Statements contained in PART II, ITEM 8 of our Annual Report on Form 10-K for the fiscal year ended February 3, 2024 for a further discussion of the Credit Agreement, its covenants and restrictions regarding dividends and share repurchases and other matters. The Credit Agreement’s covenants and restrictions did not change during first quarter 2024.

Current wording

Our Credit Agreement permits the payment of dividends and repurchase of shares, subject to certain covenants and restrictions. See “Credit Agreement” above and Note 9 — “Debt” to our Notes to Consolidated Financial Statements contained in PART II, ITEM 8 of our Annual Report on Form 10-K for the fiscal year ended February 3, 2024 for a further discussion of the Credit Agreement, its covenants and restrictions regarding dividends and share repurchases and other matters. The Credit Agreement’s covenants and restrictions did not change during year-to-date 2024.