DULUTH HOLDINGS INC.

Previous wording

Adjusted EBITDA increased to $2.6 million in fiscal 2026 first quarter compared to the prior year first quarter Adjusted EBITDA of ($3.8) million.

Current wording

Adjusted EBITDA increased to $27.0 million in fiscal 2026 second quarter compared to the prior year second quarter Adjusted EBITDA of $12.0 million, and Adjusted EBITDA in the first six months of fiscal 2026 of $29.7 million compared to $8.2 million in the first six months of fiscal 2025. Adjusted EBITDA includes the impact of $16.3 million in tariff refunds for the three and six months ended August 2, 2026.

Previous wording

See the “Reconciliation of Net (Loss) Income to EBITDA and EBITDA to Adjusted EBITDA” section for a reconciliation of our net loss to EBITDA and EBITDA to Adjusted EBITDA, both of which are non-U.S. GAAP financial measures. See also the information under the heading “Adjusted EBITDA” in the section “How We Assess the Performance of Our Business” for our definition of Adjusted EBITDA.

Current wording

See the “Reconciliation of Net Income (Loss) to EBITDA and EBITDA to Adjusted EBITDA” section for a reconciliation of our net income (loss) to EBITDA and EBITDA to Adjusted EBITDA, both of which are non-U.S. GAAP financial measures. See also the information under the heading “Adjusted EBITDA” in the section “How We Assess the Performance of Our Business” for our definition of Adjusted EBITDA.

Previous wording

On February 20, 2026, the U.S. Supreme Court issued a ruling relating to tariffs imposed under the International Emergency Economic Powers Act ("IEEPA"). Following the ruling, the U.S. Customs and Border Protection and other federal agencies issued additional guidance and took actions affecting the assessment, collection, refund, and/or protest of certain tariffs. We are evaluating the impact of these developments on previously paid tariffs and related matters, including the potential for refunds or other recovery. At this time, we cannot reasonably estimate the amount or timing of any recovery, if any, or the ultimate impact of these developments on our condensed consolidated financial statements.

Current wording

We are continuing to evaluate the impact of these developments on previously paid tariffs and related matters, including the potential for additional recovery. At this time, we cannot reasonably estimate the amount or timing of any further recovery, if any, or the ultimate impact of these developments on our condensed consolidated financial statements.

Previous wording

We define Adjusted EBITDA as consolidated net (loss) income before depreciation and amortization, and interest expense, including non-cash and other items we do not consider representative of our ongoing operating performance. We believe Adjusted EBITDA is less susceptible to variances in actual performance resulting from depreciation, amortization and other items. This non-GAAP measure may not be comparable to similarly titled measures used by other companies.

Current wording

We define Adjusted EBITDA as consolidated net income (loss) before depreciation and amortization, and interest expense, including non-cash items, and other charges or benefits resulting from transactions or events that are highly variable, significant in size, and that we do not believe are indicative of ongoing or future business operations. We believe Adjusted EBITDA is less susceptible to variances in actual performance resulting from depreciation, amortization and other items. This non-GAAP measure may not be comparable to similarly titled measures used by other companies.

Previous wording

The decrease in net sales for the three months ended May 3, 2026 was primarily driven by a decline in direct-to-consumer net sales resulting from declines in web traffic and web conversion due to reduced promotional activity partially offset by higher average order values. The decline in direct-to-consumer net sales was partially offset by an increase in store net sales driven by improved shopper conversion and higher average order values.

Current wording

The decrease in net sales for the three months ended August 2, 2026 was primarily driven by a decline in direct-to-consumer net sales resulting from declines in web traffic and web conversion due to reduced promotional activity partially offset by higher average order values.

Previous wording

The increase in gross profit and gross margin rate for the three months ended May 3, 2026 was primarily driven by an increase in average unit retail sales from reduced promotional activity coupled with an improvement in product costs from our direct to factory sourcing initiative.

Current wording

The increase in gross profit and gross margin rate for the three months ended August 2, 2026 was primarily driven by a net reduction of cost of goods sold of $16.0 million related to refunds of previously incurred tariff charges as discussed in further detail above. The gross margin rate was also favorably impacted by an increase in average unit retail sales from reduced promotional activity coupled with an improvement in product costs from our direct to factory sourcing initiative. Excluding the impact of tariff refunds, gross margin was 59.6% for the three months ended August 2, 2026, compared to 54.7% for the three months ended August 3, 2025.

Previous wording

The decrease in selling, general and administrative expense and as a percentage of net sales for the three months ended May 3, 2026 was mainly driven by leverage on outbound shipping costs due to higher average order values coupled with a reduction in personnel and marketing related expenses.

Current wording

The increase in selling, general and administrative expense and as a percentage of sales for the three months ended August 2, 2026 was mainly driven by an increase in advertising and shipping expenses, which was partially offset by leverage in variable expenses in our fulfillment centers and stores coupled with lower overhead expenses.

Previous wording

The impairment charge recorded during the three months ended May 3, 2026 related to the closure of our Salt Lake City fulfillment center and corresponding leasehold improvements, which is discussed in further detail in Note 2 of our Notes to Condensed Consolidated Financial Statements. The impairment charge recorded during the three months ended May 4, 2025 related to certain software that was no longer utilized in our operations.

Current wording

The impairment charge recorded during the six months ended August 2, 2026 related to the closure of our Salt Lake City fulfillment center and corresponding leasehold improvements, which is discussed in further detail in Note 2 of our Notes to Condensed Consolidated Financial Statements. The impairment charge recorded during the six months ended August 3, 2025 related to certain software that was no longer utilized in our operations.

Previous wording

The restructuring expenses incurred for the three months ended May 3, 2026 related to the closure of our Salt Lake City fulfillment center. Refer to Note 13 of our Notes to Condensed Consolidated Financial Statements for further information on the closure of the fulfillment center.

Current wording

The restructuring expenses incurred for the six months ended August 2, 2026 related to the closure of our Salt Lake City fulfillment center. The restructuring expenses incurred for the six months ended August 3, 2025 related to a reduction in force to right-size our expense structure. Refer to Note 13 of our Notes to Condensed Consolidated Financial Statements for further information on the restructuring expenses incurred.

Previous wording

The following table presents reconciliations of net loss to EBITDA and EBITDA to Adjusted EBITDA, both of which are non-U.S. GAAP financial measures, for the periods indicated below. See the above section titled “How We Assess the Performance of Our Business,” for our definition of Adjusted EBITDA.

Current wording

The following table presents reconciliations of net income (loss) to EBITDA and EBITDA to Adjusted EBITDA, both of which are non-U.S. GAAP financial measures, for the periods indicated below. See the above section titled “How We Assess the Performance of Our Business,” for our definition of Adjusted EBITDA.

Previous wording

The increase in Adjusted EBITDA was primarily due to leverage across our cost of goods sold and operating expenses as discussed above in the “Results of Operations” section.

Current wording

The increase in Adjusted EBITDA was primarily due to tariff refunds received in the second quarter of 2026 along with leverage across our cost of goods sold and operating expenses as discussed above in the “Results of Operations” section.

Previous wording

Our business relies on cash from operating activities and a credit facility as our primary sources of liquidity. Our primary cash needs have been for inventory, marketing and advertising, payroll, store leases, and capital expenditures associated with infrastructure and information technology. The most significant components of our working capital are cash, inventory, accounts payable and other current liabilities. At May 3, 2026, our net working capital was $62.3 million, including $6.1 million of cash and cash equivalents.

Current wording

Our business relies on cash from operating activities and a credit facility as our primary sources of liquidity. Our primary cash needs have been for inventory, marketing and advertising, payroll, store leases, and capital expenditures associated with infrastructure and information technology. The most significant components of our working capital are cash, inventory, accounts payable and other current liabilities. As of August 2, 2026, our net working capital was $85.7 million, including $26.8 million of cash and cash equivalents.

Previous wording

Operating activities consist primarily of net loss adjusted for non-cash items that include depreciation and amortization, stock-based compensation and the effect of changes in operating assets and liabilities.

Current wording

Operating activities consist primarily of net income (loss) adjusted for non-cash items that include depreciation and amortization, stock-based compensation and the effect of changes in operating assets and liabilities.

Previous wording

The decrease in cash used in operating activities for the three months ended May 3, 2026 was primarily due to the increase in gross margin rate, decrease in selling, general and administrative expenses as discussed in further detail above, and decreased trade payables and accrued expenses primarily from improved inventory management.

Current wording

The increase in cash provided by operating activities for the six months ended August 2, 2026 was primarily due to the tariff refunds received, increase in gross margin rate, lower net outflows on trade payables and accrued expenses, and a decrease in selling, general and administrative expenses as discussed in further detail above.

Previous wording

The increase in cash used in investing activities was primarily driven by an increase in purchases of property and equipment.

Current wording

The decrease in cash used in investing activities was primarily driven by a decrease in purchases of property and equipment.

Previous wording

The decrease in cash provided by financing activities for the three months ended May 3, 2026 was primarily due to lower proceeds from our line of credit as a result of lower use of cash in our operations.

Current wording

The decrease in cash provided by financing activities for the six months ended August 2, 2026 was primarily due to lower proceeds from our line of credit as a result of lower use of cash in our operations.