SPORTSMAN'S WAREHOUSE HOLDINGS, INC.

Previous wording

Our business was founded in 1986 as a single retail store in Midvale, Utah. Today, we operate 146 stores in 32 states, totaling approximately 5.4 million gross square feet. We also operate an e-commerce platform at www.sportsmans.com. We do not incorporate the information on or accessible through our website into this 10-Q, and you should not consider any information on, or that can be accessed through, our website as part of this 10-Q.

Current wording

Our business was founded in 1986 as a single retail store in Midvale, Utah. Today, we operate 147 stores in 32 states, totaling approximately 5.5 million gross square feet. We also operate an e-commerce platform at www.sportsmans.com. We do not incorporate the information on or accessible through our website into this 10-Q, and you should not consider any information on, or that can be accessed through, our website as part of this 10-Q.

Previous wording

Our financial results and operations have been, and will continue to be, impacted by events outside of our control. Global economic and business activities continue to face widespread macroeconomic uncertainties, including the impact of international trade policies and increased tariff rates, inflation, elevated interest rates, recession risks and rising global political tensions.

Current wording

Our financial results and operations have been, and will continue to be, impacted by events outside of our control.

Previous wording

In assessing the performance of our business, we consider a variety of performance and financial measures. The key measures for determining how our business is performing are net sales, same store sales, gross margin, selling, general and administrative expenses, income from operations and Adjusted EBITDA, which we define as net loss plus interest expense, income tax benefit, depreciation and amortization, stock-based compensation expense, transition and severance costs related to director and officer transitions, and expenses that we do not believe are indicative of our ongoing expenses.

Current wording

In assessing the performance of our business, we consider a variety of performance and financial measures. The key measures for determining how our business is performing are net sales, same store sales, gross margin, selling, general and administrative expenses, income from operations and Adjusted EBITDA, which we define as net loss plus interest expense, income tax expense (benefit), depreciation and amortization, stock-based compensation expense, management transition costs and executive retention costs.

Previous wording

We operate in a complex regulatory and legal environment that could negatively impact the demand for our products, which could significantly affect our operations and financial results. State, local, and federal laws and regulations relating to products that we sell may change, sometimes significantly, as a result of political, economic or social events.

Current wording

We operate in a complex and constantly shifting regulatory and legal environment that could negatively impact the demand for our products and significantly affect our operations and financial results. State, local, and federal laws and regulations relating to products that we sell may change, sometimes significantly, as a result of political, economic or social events.

Previous wording

For instance, in November 2022, Oregon passed a ballot measure that amended Oregon law to prohibit private citizens from manufacturing, importing, possessing, using, purchasing, selling or transferring a magazine capable of holding (or being readily converted to hold) over ten rounds of ammunition. Additionally, this ballot measure also imposed complex permitting and training requirements for the purchase and sale of firearms. On December 6, 2022, a state Circuit Court judge in Oregon preliminarily enjoined the implementation of the ballot measure. On November 21, 2023, the Circuit Court judge permanently enjoined implementation of the ballot measure upon a determination that the ballot measure was facially unconstitutional under Oregon's state constitution. On March 12, 2025, the Oregon Court of Appeals reversed the state Circuit Court judge's permanent injunction, holding that the ballot measure was in fact facially constitutional under Oregon's state constitution. The Oregon Court of Appeals ordered the Circuit Court judge to enter a declaratory judgment consistent with the Court of Appeals’ decision.

Current wording

For instance, in November 2022, Oregon passed a ballot measure that amended Oregon law to prohibit private citizens from manufacturing, importing, possessing, using, purchasing, selling or transferring a magazine capable of holding (or being readily converted to hold) over ten rounds of ammunition. Additionally, this ballot measure also imposed complex permitting and training requirements for the purchase and sale of firearms. On December 6, 2022, a state Circuit Court judge in Oregon preliminarily enjoined the implementation of the ballot measure. On November 21, 2023, the Circuit Court judge permanently enjoined implementation of the ballot measure upon a determination that the ballot measure was facially unconstitutional under Oregon's state constitution.

Previous wording

The plaintiffs filed a petition for review before the Oregon Supreme Court on April 14, 2025, preventing the Circuit Court judge from entering the declaratory judgment pending a decision of the Oregon Supreme Court on whether to grant the petition for review. On June 12, 2025, the Oregon Supreme Court granted the petition for review and the case is now in the process of being briefed by the parties to the litigation. Oral arguments in the case are scheduled for November 6, 2025, and we anticipate a decision in the case will be rendered by the Oregon Supreme Court in late 2026. The permanent injunction entered by the Circuit Court Judge will continue to remain in effect pending the decision of the Oregon Supreme Court in this case.

Current wording

On March 12, 2025, the Oregon Court of Appeals reversed the state Circuit Court judge’s permanent injunction, holding that the ballot measure was in fact facially constitutional under Oregon's state constitution. The Oregon Court of Appeals ordered the Circuit Court judge to enter a declaratory judgment consistent with the Court of Appeals’ decision. The plaintiffs filed a petition for review before the Oregon Supreme Court on April 14, 2025, preventing the Circuit Court judge from entering the declaratory judgment pending a decision of the Oregon Supreme Court on whether to grant the petition for review. The Oregon Supreme Court granted the petition for review on June 12, 2025 and heard oral arguments in the case on November 6, 2025. We anticipate a decision in the case will be rendered by the Oregon Supreme Court in late 2026. The permanent injunction entered by the Circuit Court Judge will continue to remain in effect pending the decision of the Oregon Supreme Court in this case.

Previous wording

We are aware that this ballot measure is also being challenged in a related case in federal court that is presently on appeal before the U.S. Court of Appeals for the Ninth Circuit. However, due to a ruling upholding a similar magazine capacity restriction case in California (Duncan, et al. v. Bonta, No. 23-55805 (9th Cir. 2023)), we believe it is unlikely that the Oregon ballot measure will be struck down by the U.S. Court of Appeals for the Ninth Circuit.

Current wording

The measure is also being challenged in a related case in federal court and is on appeal before the Ninth Circuit Court of Appeals. However, this case has been stayed for several years and we anticipate that it will likely be remanded to the lower court due to the recent ruling of a similar capacity restriction case in California (Duncan vs. Bonta).

Previous wording

We currently operate eight stores in the State of Oregon. If the Oregon Supreme Court upholds the Oregon Court of Appeals March 12, 2025 order and the ballot measure is allowed to take effect on or after March 15, 2026 , sales of firearms in Oregon may be halted or substantially diminished unless all permitting and training programs are fully developed by the state and/or law enforcement agencies at the time the ballot measure takes effect. If delays in establishing such permitting and training programs occur, it could result in a substantial decline in our sales of firearms and related products and reduce traffic to our stores in Oregon, which would significantly impact on our sales and gross margin. It is still unclear what measures the State of Oregon has undertaken thus far to set up the permitting and training infrastructure called for in the ballot measure.

Current wording

We currently operate eight stores in the State of Oregon. If the Oregon Supreme Court upholds the Oregon Court of Appeals March 12, 2025 order and the ballot measure is allowed to take effect on January 1, 2028, sales of firearms in Oregon may be halted or substantially diminished unless all permitting and training programs are fully developed by the state and/or law enforcement agencies at the time the ballot measure takes effect. If delays in establishing such permitting and training programs occur, it could result in a substantial decline in our sales of firearms and related products and reduce traffic to our stores in Oregon, which would significantly impact on our sales and gross margin.

Previous wording

building strong community connections and be the local choice for hunting and fishing solutions;

Current wording

building strong community connections and establishing ourselves as the local choice for hunting and fishing solutions;

Previous wording

We believe the key drivers to improving our gross margin are increasing the product mix to higher margin products, particularly fishing, increasing foot traffic within our stores and traffic to our website, improving buying opportunities with our vendor partners and coordinating pricing strategies among our stores and our merchandise group. Our ability to properly manage our inventory can also impact our gross margin. We focus our buying on core items, high-turning products and seasonally relevant merchandise, particularly in ammunition, fishing, camping and personal protection, as these are areas where customer demand is more predictable and where having products in stock matters most to our customers. Successful inventory management ensures we have sufficient high margin products in stock to meet customer demand, while overstocking of items can lead to markdowns in order to help a product sell. This is especially true with respect to our more in demand inventory, with approximately 20% of our products accounting for approximately 80% of our net sales. Despite our decision to pull forward inventory purchases, we anticipate ending fiscal year 2025 with lower total inventory than fiscal year 2024.

Current wording

We believe the key drivers to improving our gross margin are increasing the product mix to higher margin products, particularly fishing, improving our seasonal inventory efficiency, strategic buying opportunities with our vendor partners and coordinating pricing strategies among our stores and our merchandise group. Successful inventory management ensures we have sufficient high margin products in stock to meet customer demand, while overstocking of items can lead to aggressive markdowns in order to help a product sell. We ended our fiscal first quarter of 2026 with $25.1 million less inventory than at the end of the fiscal first quarter of 2025, a 6.1% decrease.

Previous wording

We define Adjusted EBITDA as net loss plus interest expense, income tax benefit, depreciation and amortization, stock-based compensation expense, transition and severance costs related to director and officer transitions, and expenses that we do not believe are indicative of our ongoing expenses. We define Adjusted EBITDA margin as Adjusted EBITDA divided by net sales. In evaluating our business, we use Adjusted EBITDA and Adjusted

Current wording

We define Adjusted EBITDA as net loss plus interest expense, income tax benefit, depreciation and amortization, stock-based compensation expense, transition and severance costs related to director and officer transitions, and expenses that we do not believe are indicative of our ongoing expenses. We define Adjusted EBITDA margin as Adjusted EBITDA divided by net sales. In evaluating our business, we use Adjusted EBITDA and Adjusted EBITDA margin as additional measurement tools for purposes of business decision-making, including evaluating store performance, developing budgets and managing expenditures. See “—Non-GAAP Financial Measures.”

Previous wording

Net Sales and Same Store Sales. Net sales increased by $7.0 million, or 2.2%, to $331.3 million during the 13 weeks ended November 1, 2025 compared to $324.3 million in the corresponding period of fiscal year 2024. Our net sales increased primarily due to increased sales in our Hunting and Shooting, Fishing and Apparel departments as we continue to emphasize inventory in-stocks, and our focused strategy to win the seasons in hunting and fishing to ensure we have the right inventory at the right location at the right time. In addition, the sales growth was driven by our strategic decision to lean into personal protection, including less-lethal alternatives. E-commerce driven sales comprised approximately 19% of total sales for the 13 weeks ended November 1, 2025 and increased by more than 8% compared to the corresponding period in fiscal year 2024, led by our new digital-first marketing strategy. Same store sales increased by 2.2% during the 13 weeks ended November 1, 2025 compared to the corresponding 13-week period of fiscal year 2024, primarily as a result of our improved inventory management and digital marketing efforts.

Current wording

Net Sales and Same Store Sales. Net sales increased by $7.0 million, or 2.8%, to $256.1 million during the 13 weeks ended May 2, 2026 compared to $249.1 million in the corresponding period of fiscal year 2025. Our net sales increased primarily due to sales growth in our Hunting and Shooting Sports and Fishing departments. Hunting and Shooting Sports increases were led by firearms, ammunition, and less-lethal personal protection, partially aided by external event-driven demand. Fishing increases were driven by seasonal demands as customers prepared for the spring fishing season. These increases were partially offset by decreases in net sales across other departments, reflecting continued pressure on the U.S. consumer and a strategic pull down of inventory to align our complementary categories with our core pursuits. E-commerce driven sales comprised approximately 23% of total sales for the 13 weeks ended May 2, 2026. Same store sales increased by 2.1% during the 13 weeks ended May 2, 2026 compared to the corresponding 13 weeks ended May 3, 2025, primarily as a result of the factors discussed above that impacted net sales.

Previous wording

Our Hunting and Shooting, Fishing and Apparel departments saw net sales increases of $17.8 million, $12.0 million and $0.8 million, respectively, during the 39 weeks ended November 1, 2025 compared to the corresponding period of fiscal year 2024 primarily driven by increased unit sales due to our continued emphasis on maintaining sufficient inventory in-stocks of core items. Additionally, this growth was driven by our focused strategy to win the seasons in hunting and fishing to ensure we have the right inventory at the right location at the right time and by our strategic decision to lean into personal protection, including less-lethal alternatives. Our Camping, Optics, Electronics, Accessories and Other and Footwear departments saw net sales decreases of $9.2 million, $3.2 million and $1.2 million, respectively, during the 39 weeks ended November 1, 2025 compared to the corresponding period of fiscal year 2024. We believe these decreases reflect the impact of broader macroeconomic conditions effecting the economy and US consumer, which includes categories that are highly discretionary in nature. Within our Hunting and Shooting department, our ammunition and firearm categories saw increases of $4.9 million and $2.9 million, or 3.9% and 1.4%, respectively, during the 39 weeks ended November 1, 2025 compared to the corresponding period of fiscal year 2024. The increase in these categories was primarily due to our efforts to ensure every day low pricing in key product groups within these categories, our bulk unit ammunition strategy, and improved in-stocks on core products. We continue to consistently outpace the adjusted NICS background check data, achieving unit sales increases, suggesting market share gains within the firearm space.

Current wording

Our Hunting and Shooting Sports and Fishing departments saw net sales increases of $11.7 million and $1.8 million, respectively, during the 13 weeks ended May 2, 2026 compared to the corresponding period of fiscal year 2025 primarily driven by increases in firearms, ammunition, and less-lethal personal protection, with some additional event-driven demand. Our Camping, Footwear, Apparel and Optics, Electronics, Accessories and Other departments saw net sales decreases of $2.9 million, $1.6 million, $1.3 million and $0.8 million, respectively, during the 13 weeks ended May 2, 2026 compared to the corresponding period of fiscal year 2025. These decreases reflect continued pressure on the U.S. consumer and a strategic pull down of inventory to align our complementary categories with our core pursuits. Within our Hunting and Shooting Sports department, sales from our ammunition and firearm categories increased by $5.4 million and $3.9 million, or 12.8% and 5.4%, respectively, for the first quarter of fiscal year 2026 compared to the corresponding fiscal period of 2025. The increase in these categories was primarily due to our change to every day low pricing in key product groups within the ammunition category, our bulk unit ammunition strategy, and improved in-stocks on core products.

Previous wording

With respect to same store sales, during the 13 weeks ended November 1, 2025, our Fishing, Hunting and Shooting and Apparel departments saw increases of 14.1%, 5.3% and 1.6%, respectively, compared to the corresponding period of fiscal year 2024. Our Optics, Electronics, Accessories and Other, Camping and Footwear departments saw same store sales decreases of 9.5%, 8.5% and 5.0%, respectively, during the 13 weeks ended November 1, 2025 compared to the corresponding period of fiscal year 2024. These changes were primarily driven by the items noted above for net sales. As of November 1, 2025, 146 stores were included in our same store sales calculation.

Current wording

With respect to same store sales, during the 13 weeks ended May 2, 2026, our Hunting and Shooting Sports and Fishing departments saw increases of 6.3% and 5.7%, respectively, compared to the corresponding period of fiscal year 2025. Our Camping, Footwear, Apparel and Optics, Electronics, Accessories and Other departments saw same store sales decreases of 14.0%, 12.3%, 9.3% and 1.8%, respectively, during the 13 weeks ended May 2, 2026 compared to the corresponding period of fiscal year 2025. These changes were primarily driven by the items noted above for net sales. As of May 2, 2026, 146 stores were included in our same store sales calculation.

Previous wording

Gross Profit. Gross profit increased by $5.6 million, or 5.5%, to $108.7 million during the 13 weeks ended November 1, 2025 compared to $103.1 million for the corresponding period of fiscal year 2024. As a percentage of net sales, gross profit increased to 32.8% during the 13 weeks ended November 1, 2025, compared to 31.8% for the corresponding period of fiscal year 2024. The margin improvement was primarily driven by stronger product margins from healthier inventory, improved shrink, and increased sales in the Fishing department, which has an overall higher margin profile. These gains were partially offset by a sales mix shift toward lower-margin firearms and ammunition, which have a lower gross margin, and lower Camping department sales, which has a higher gross margin.

Current wording

Gross Profit. Gross profit increased by $0.2 million, or 0.2%, to $75.8 million during the 13 weeks ended May 2, 2026 compared to $75.6 million for the corresponding period of fiscal year 2025. As a percentage of net sales, gross profit decreased to 29.6% during the 13 weeks ended May 2, 2026, compared to 30.4% for the corresponding period of fiscal year 2025 primarily driven by category mix and lower sales in higher margin categories.

Previous wording

Interest Expense. Interest expense increased by $0.7 million, or 21.2%, to $4.1 million during the 13 weeks ended November 1, 2025, compared to $3.3 million for the corresponding period of fiscal year 2024. The increase in interest expense was primarily driven by increased borrowings under the revolving line of credit and term loan facilities during the third quarter of fiscal year 2025 compared to the corresponding period of fiscal year 2024.

Current wording

Interest Expense. Interest expense decreased by $0.3 million, or 11.7 %, to $2.6 million during the 13 weeks ended May 2, 2026, compared to $3.0 million for the corresponding period of fiscal year 2025. The decrease in interest expense was primarily driven by reduced debt during the first quarter of fiscal year 2026 compared to the corresponding period of fiscal year 2025.

Previous wording

Income Taxes. We recognized income tax expense of $0.2 million during the 13 weeks ended November 1, 2025 compared to an income tax expense of $0.2 million during the corresponding period of fiscal year 2024. Our effective tax rates during the 13 weeks ended November 1, 2025 and November 2, 2024 were 96.3% and -80.2%, respectively. Our effective tax rate will generally differ from the U.S. Federal statutory rate of 21.0%, due to state taxes, permanent items, and discrete items relating to stock award deductions.

Current wording

Income Taxes. We recognized income tax expense of $1.0 million during the 13 weeks ended May 2, 2026 compared to an income tax benefit of $1.3 million during the corresponding period of fiscal year 2025. Our effective tax rates during the 13 weeks ended May 2, 2026 and May 3, 2025 were -5.0% and 5.9%, respectively. Our effective tax rate will generally differ from the U.S. Federal statutory rate of 21.0%, due to state taxes, permanent items, and discrete items relating to stock award deductions.

Previous wording

Net sales are typically higher in our third and fourth fiscal quarters than in our first and second fiscal quarters because of the openings of hunting seasons across the country and consumer holiday buying patterns. We also incur additional expenses in our third and fourth fiscal quarters due to higher sales volume and increased staffing in our stores. We anticipate our net sales will continue to reflect this seasonal pattern. On average, over the last three fiscal years, we have generated approximately 26.4% and 28.0% of our net sales in the third and fourth fiscal quarters, respectively, which includes the holiday selling season as well as the opening of the Fall hunting season. We anticipate our net sales will continue to reflect this seasonal pattern. However, Spring hunting, Father’s Day and the availability of hunting and fishing throughout the year in many of our markets counterbalance this seasonality to a certain degree.

Current wording

Net sales are typically higher in our third and fourth fiscal quarters than in our first and second fiscal quarters because of the openings of hunting seasons across the country and consumer holiday buying patterns. We also incur additional expenses in our third and fourth fiscal quarters due to higher sales volume and increased staffing in our stores. We anticipate our net sales will continue to reflect this seasonal pattern. On average, over the last three fiscal years, we have generated approximately 27.0% and 28.3% of our net sales in the third and fourth fiscal quarters, respectively, which includes the holiday selling season as well as the opening of the Fall hunting season. We anticipate our net sales will continue to reflect this seasonal pattern. However, Spring hunting, Father’s Day and the availability of hunting and fishing throughout the year in many of our markets counterbalance this seasonality to a certain degree.

Previous wording

As of November 1, 2025, we had cash and cash equivalents of $2.2 million and working capital, consisting of current assets less current liabilities, of $75.5 million. We also had $109.7 million available for borrowing under our senior secured revolving credit facility as of November 1, 2025, calculated based upon borrowing base restrictions under our revolving credit facility.

Current wording

As of May 2, 2026, we had cash and cash equivalents of $2.1 million and working capital, consisting of current assets less current liabilities, of $61.9 million. We also had $114.6 million available for borrowing under our senior secured revolving credit facility as of May 2, 2026, calculated based upon borrowing base restrictions under our revolving credit facility.

Previous wording

Operating Lease Obligations. Operating lease commitments consist principally of leases for our retail stores, corporate office and distribution center. Our leases often include options which allow us to extend the terms beyond the initial lease term. As of November 1, 2025, our expected operating lease payments for the remainder of fiscal year 2025 and fiscal year 2026 are $18.9 million and $75.4 million, respectively. Our total committed operating lease payments are $434.3 million. Other operating lease obligations consist of distribution center equipment. See Note 6, “Leases” to our unaudited condensed consolidated financial statements included in this 10-Q.

Current wording

Lease Obligations. Lease commitments consist principally of leases for our retail stores, corporate office and distribution center. Our leases often include options which allow us to extend the terms beyond the initial lease term. As of May 2, 2026, our expected operating and finance lease payments for the remainder of fiscal year fiscal year 2026 are $57.6 million and $0.3 million, respectively. Our total committed operating and finance lease payments are $416.1 million. Other operating lease obligations consist of distribution center equipment. See Note 6, “Leases” to our unaudited condensed consolidated financial statements included in this 10-Q.

Previous wording

Capital Expenditures. During the 39 weeks ended November 1, 2025, we incurred approximately $18.7 million in capital expenditures primarily related to strategic technological investments and general store maintenance. We expect capital expenditures to be less than $25 million for fiscal year 2025 (inclusive of amounts spent during the 39 weeks ended November 1, 2025) primarily related to strategic technological investments, such as planogramming, merchandising and replenishment and store scheduling tools, and general store fleet maintenance. We intend to fund these capital expenditures with our operating cash flows, cash on hand and funds available under our revolving credit facility. Other investment opportunities, such as potential strategic acquisitions or store expansion rates in excess of those presently planned, may require additional funding.

Current wording

Capital Expenditures. During the 13 weeks ended May 2, 2026, we incurred approximately $4.2 million in capital expenditures, net of tenant allowances, primarily related to strategic technological investments and general store maintenance. We expect capital expenditures net of tenant allowances to be between $20 million and $25 million for fiscal year 2026 (inclusive of amounts spent during the 13 weeks ended May 2, 2026) primarily related to strategic technological investments, such as store scheduling tools and loyalty program technology, and general store fleet maintenance. We intend to fund these capital expenditures with our operating cash flows, existing cash and cash equivalents and funds available under our revolving credit facility. Other investment opportunities, such as potential strategic acquisitions or store expansion rates in excess of those presently planned, may require additional funding.

Previous wording

Principal and Interest Payments. We maintain a $350.0 million revolving credit facility and a $45.0 million term loan facility. As of November 1, 2025, $153.3 million was outstanding under the revolving credit facility and $45.0 million was outstanding under the term loan facility. Assuming no additional repayments or borrowings on our revolving credit facility after November 1, 2025, our interest payments would be approximately $3.3 million for the remainder of fiscal year 2025 and approximately $13.2 million for fiscal year 2026, in each case, based on the interest rate as of November 1, 2025. As of November 1, 2025, our weighted average interest rate on the amounts outstanding under our revolving credit facility and term loan facility was 6.68%. See below under “Indebtedness” for additional information regarding our revolving credit facility and term loan facility, including the interest rates applicable to any borrowing under such facilities.

Current wording

Principal and Interest Payments. We maintain a $350.0 million revolving credit facility and a $45.0 million term loan facility. As of May 2, 2026, $118.9 million was outstanding under the revolving credit facility and $45.0 million was outstanding under the term loan facility. Assuming no additional repayments or borrowings on our revolving credit facility after May 2, 2026, our interest payments would be approximately $8.3 million for the remainder of fiscal year 2026, based on the interest rate as of May 2, 2026. As of May 2, 2026, our weighted average interest rate on the amounts outstanding under our revolving credit facility and term loan facility was 6.74%. See below under “Indebtedness” for additional information regarding our revolving credit facility and term loan facility, including the interest rates applicable to any borrowing under such facilities.

Previous wording

Net cash used in operating activities was $70.5 million for the 39 weeks ended November 1, 2025, compared to net cash used in operating activities of $18.7 million for the corresponding period of fiscal year 2024, an increase of approximately $51.8 million. The increase in our cash flows used in operating activities was primarily driven by the timing of inventory purchases and the resulting payments related to accounts payable during the 39 weeks ended November 1, 2025 compared to the corresponding period of fiscal year 2024 done in an attempt to reduce our exposure to tariffs and ensure we have inventory on hand for hunting season and the holiday seasons.

Current wording

Net cash used in operating activities was $55.4 million for the 13 weeks ended May 2, 2026, compared to net cash used in operating activities of $60.2 million for the corresponding period of fiscal year 2025, a decrease of approximately $4.8 million. The decrease in our cash flows used in operating activities was primarily driven by the timing of inventory purchases and the resulting payments related to accounts payable during the 13 weeks ended May 2, 2026 compared to the corresponding period of fiscal year 2025.

Previous wording

Net cash used in investing activities was $18.7 million for the 39 weeks ended November 1, 2025, compared to net cash used in investing activities of $11.3 million for the corresponding period of fiscal year 2024, an increase of approximately $7.4 million, which was primarily driven by increased capital expenditures related to the construction of a new store and timing of technical investments during the 39 weeks ended November 1, 2025 compared to the corresponding period of fiscal year 2024.

Current wording

Net cash used in investing activities was $4.2 million for the 13 weeks ended May 2, 2026, compared to net cash used in investing activities of $3.8 million for the corresponding period of fiscal year 2025, an increase of approximately $0.4 million, which was primarily driven by increased capital expenditures related to the timing of technical investments and fleet maintenance during the 13 weeks ended May 2, 2026 compared to the corresponding period of fiscal year 2025.

Previous wording

Net cash provided by financing activities was $88.6 million for the 39 weeks ended November 1, 2025, compared to net cash provided by financing activities of $29.4 million for the corresponding period of fiscal year 2024, an increase of approximately $59.2 million. The increase in cash provided by financing activities was primarily the result of our borrowing of $20.0 million under our delayed draw ABL term loan and incremental borrowings under our revolving credit facility.

Current wording

Net cash provided by financing activities was $60.0 million for the 13 weeks ended May 2, 2026, compared to net cash provided by financing activities of $64.8 million for the corresponding period of fiscal year 2025, a decrease of approximately $4.8 million. The decrease in cash provided by financing activities was primarily the result of lower borrowings on our revolving credit facility.

Previous wording

We maintain a $350.0 million revolving credit facility, with $153.3 million outstanding as of November 1, 2025. Our revolving credit facility is governed by an amended and restated credit agreement with a consortium of banks led by Wells Fargo Bank, National Association (“Wells Fargo”). We additionally entered into a term loan credit facility on July 30, 2024 with $45.0 million outstanding as of November 1, 2025. Borrowings under our revolving credit facility are subject to a borrowing base calculation. As of November 1, 2025, we had an aggregate amount of $109.7 million available for borrowing under our revolving credit facility, calculated based upon certain borrowing base restrictions, and $2.6 million in stand-by commercial letters of credit.

Current wording

We maintain a $350.0 million revolving credit facility, with $118.9 million outstanding as of May 2, 2026. Our revolving credit facility is governed by an amended and restated credit agreement with a consortium of banks led by Wells Fargo Bank, National Association (“Wells Fargo”). Our term loan facility is governed by an ABL term loan credit agreement with PLC Agent, LLC, as administrative and collateral agent for various lenders affiliated with Pathlight Capital. Available borrowings under our revolving credit facility are subject to a borrowing base calculation. As of May 2, 2026, we had an aggregate amount of $114.6 million available for borrowing under our revolving credit facility, calculated based upon certain borrowing base restrictions, and $3.0 million in stand-by commercial letters of credit. We have no remaining amounts available for borrowing under our term loan facility.

Previous wording

Each of the subsidiaries of Holdings is a borrower under the revolving credit facility and the term loan, and all obligations under the revolving credit facility and the term loan are guaranteed by Holdings. All of the obligations under the revolving credit facility and the term loan are secured by a lien on substantially all of Holdings’ assets and assets of all of Holdings’ subsidiaries, including a pledge of all capital stock of each of Holdings’ subsidiaries. The lien securing the obligations under the revolving credit facility is a first priority lien as to certain liquid assets, including cash, accounts receivable, deposit accounts and inventory. The lien securing the obligations under the term loan facility is a first priority lien as to equipment, fixtures, intellectual property and equity interests.

Current wording

Each of the subsidiaries of Holdings is a borrower under the revolving credit facility and the term loan facility, and all obligations under the revolving credit facility and the term loan facility are guaranteed by Holdings. All of the obligations under the revolving credit facility and the term loan facility are secured by a lien on substantially all of Holdings’ assets and assets of all of Holdings’ subsidiaries, including a pledge of all capital stock of each of Holdings’ subsidiaries. The lien securing the obligations under the revolving credit facility is a first priority lien as to certain liquid assets, including cash, accounts receivable, deposit accounts and inventory. The lien securing the obligations under the term loan facility is a first priority lien as to equipment, fixtures, intellectual property and equity interests.

Previous wording

We may be required to make mandatory prepayments under the revolving credit facility and the term loan in the event of a disposition of certain property or assets, in the event of receipt of certain insurance or condemnation proceeds, upon the issuance of certain debt or equity securities, upon the incurrence of certain indebtedness for borrowed money or upon the receipt of certain payments not received in the ordinary course of business.

Current wording

We may be required to make mandatory prepayments under the revolving credit facility and the term loan facility in the event of a disposition of certain property or assets, in the event of receipt of certain insurance or condemnation proceeds, upon the issuance of certain debt or equity securities, upon the incurrence of certain indebtedness for borrowed money or upon the receipt of certain payments not received in the ordinary course of business.

Previous wording

In evaluating our business, we use Adjusted EBITDA and Adjusted EBITDA margin as supplemental measures of our operating performance. We define Adjusted EBITDA as net income (loss) plus interest expense, income tax expense (benefit), depreciation and amortization, stock-based compensation expense, transition and severance costs related to director and officer transitions, and expenses that we do not believe are indicative of our ongoing expenses. Net income (loss) is the most comparable GAAP financial measure to Adjusted EBITDA. We define Adjusted EBITDA margin as, for any period, the Adjusted EBITDA for that period divided by the net sales for that period. We consider Adjusted EBITDA and Adjusted EBITDA margin important supplemental measures of our operating performance and believe they are frequently used by analysts, investors and other interested parties in the evaluation of companies in our industry. Other companies in our industry, however, may calculate Adjusted EBITDA and Adjusted EBITDA margin differently than we do. Management also uses Adjusted EBITDA and Adjusted EBITDA margin as additional measurement tools for purposes of business decision-making, including evaluating store performance, developing budgets and managing expenditures. Management believes Adjusted EBITDA and Adjusted EBITDA margin allow investors to evaluate our operating performance and compare our results of operations from period to period on a consistent basis by excluding items that management does not believe are indicative of our core operating performance.

Current wording

In evaluating our business, we use Adjusted EBITDA and Adjusted EBITDA margin as supplemental measures of our operating performance. We define Adjusted EBITDA as net loss plus interest expense, income tax expense (benefit), depreciation and amortization, stock-based compensation expense, management transition costs and executive retention costs. Net income (loss) is the most comparable GAAP financial measure to Adjusted EBITDA. We define Adjusted EBITDA margin as, for any period, the Adjusted EBITDA for that period divided by the net sales for that period. We consider Adjusted EBITDA and Adjusted EBITDA margin important supplemental measures of our operating performance and believe they are frequently used by analysts, investors and other interested parties in the evaluation of companies in our industry. Other companies in our industry, however, may calculate Adjusted EBITDA and Adjusted EBITDA margin differently than we do. Management also uses Adjusted EBITDA and Adjusted EBITDA margin as additional measurement tools for purposes of business decision-making, including evaluating store performance, developing budgets and managing expenditures. Management believes Adjusted EBITDA and Adjusted EBITDA margin allow investors to evaluate our operating performance and compare our results of operations from period to period on a consistent basis by excluding items that management does not believe are indicative of our core operating performance.

Previous wording

Represents expenses incurred relating to the departure of directors and officers and the recruitment of directors and key members of our senior management team.

Current wording

Represents expenses incurred relating to the departure and recruitment of key members of our management team.