The discussion below contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of various factors, including those which are discussed in the “Risk Factors” section in Part I., Item 1A. of our Fiscal 2025 Form 10-K. Also see “Special Note Regarding Forward-Looking Statements” preceding Part I. of this 10-Q. Additionally, our historical results are not necessarily indicative of the results that may be expected or achieved for any future period. The following discussion and analysis should be read in conjunction with, and is qualified in its entirety by reference to, the unaudited condensed consolidated financial statements and the notes thereto included in this 10-Q. Overview We are an outdoor sporting goods retailer focused on meeting the everyday needs of the seasoned outdoor veteran, the first-time participant and everyone in between. Our mission is to provide outstanding gear and exceptional service to inspire outdoor memories. 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. Our stores and our e-commerce platform are aggregated into one operating and reportable segment. Impact of Macroeconomic Conditions Our financial results and operations have been, and will continue to be, impacted by events outside of our control. Our business continues to face widespread macroeconomic uncertainties, including the impact of changes to international trade policies and increased tariff rates, inflation, elevated interest rates, elevated fuel prices, recession risks and rising global political tensions. We continue to monitor the potential impact of these broader consumer spending pressures on our business. While we cannot predict the ultimate impact of such uncertainties on our financial results for fiscal year 2026 and beyond, we believe these factors could affect our sales in fiscal year 2026. We remain measured in our outlook for the year. During the fiscal year ended January 31, 2026, certain retail store locations experienced four-wall Adjusted EBITDA losses and declines in projected cash flows. As a result, we performed an impairment assessment for these locations and we recognized impairment losses of $17.8 million as of January 31, 2026 related to ten underperforming store locations. We anticipate closing approximately five of our underperforming stores within the next year. Store closures or other strategic actions may be taken in the future, which could result in additional impairment charges. We do not plan to open new stores in fiscal year 2026 as we assess our new store expansion strategy and prioritize capital allocation for critical technology investments and debt repayment. How We Assess the Performance of Our Business 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. Net Sales and Same Store Sales 21 Table of Contents Our net sales are primarily received from revenue generated in our stores and also include sales generated through our e-commerce platform. When measuring revenue generated from our stores, we review our same store sales as well as the performance of our stores that have not operated for a sufficient amount of time and include each in same store sales. We include net sales from a store in same store sales on the first day of the 13th full fiscal month following the store’s grand opening or acquisition by us. We exclude sales from stores that were closed during the period from our same store sales calculation. We include net sales from e-commerce in our calculation of same store sales. For fiscal years consisting of 53 weeks, we exclude net sales during the 53rd week from our calculation of same store sales. Some of our competitors and other retailers may calculate same store sales differently than we do. As a result, data regarding our same store sales may not be comparable to similar data made available by other retailers. Measuring the change in year-over-year same store sales allows us to evaluate how our retail store base is performing. Various factors affect same store sales, including: •macroeconomic factors, political trends, social unrest, inflationary pressures, recessionary trends, labor shortages, monetary supply shifts, elevated interest rates, tightening of credit markets, and potential disruptions from the ongoing Russia-Ukraine conflict and rising global political tensions; •consumer preferences, buying trends and overall economic trends; •changes or anticipated changes to laws and government regulations related to some of the products we sell, in particular regulations relating to the sale of firearms and ammunition; •our ability to identify and respond effectively to local and regional trends and customer preferences; •our ability to provide quality customer service that will increase our conversion of shoppers into paying customers; •the success of our omni-channel strategy and our e-commerce platform; •competition in the regional market of a store; •atypical weather; •new product introductions and changes in our product mix; and •changes in pricing and average ticket sales. 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. 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. 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 22 Table of Contents 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. As the Oregon Supreme Court is working on its decision in the case considering the constitutionality of the ballot measure, Oregon Governor Tina Kotek signed a bill into law on April 7, 2026 which, upon signature, delayed the implementation of the ballot measure until January 1, 2028. 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). 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. We are reviewing our store portfolio and estimate that approximately five underperforming stores may be closed. We do not plan to open new stores in fiscal year 2026 as we assess our new store expansion strategy and prioritize capital allocation for critical technology investments and debt repayment. However, opening new stores continues to be an important part of our long-term growth strategy. We also have been scaling our e-commerce platform and increasing sales through our website, www.sportsmans.com. We believe the key drivers to increasing our total net sales include: •increasing and improving same store sales in our existing markets; •increasing customer visits to our stores and improving our conversion rate through focused marketing efforts and continually high standards of customer service; •expanding our omni-channel capabilities through refined product assortment, expanded content and expertise and better user experience; •building strong community connections and establishing ourselves as the local choice for hunting and fishing solutions; •increasing our total gross square footage by opening new stores; and •growing our loyalty and credit card programs. Gross Margin Gross profit consists of our net sales less cost of goods sold. Gross margin measures our gross profit as a percentage of net sales. Our cost of goods sold primarily consists of merchandise acquisition costs, including freight-in costs, shipping costs, payment term discounts received from the vendor and vendor allowances and rebates associated directly with merchandise and shipping costs related to e-commerce sales. 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. 23 Table of Contents We believe this reflects our disciplined inventory management and positions us well to support growth in our key categories while continuing to improve productivity and inventory turns. Selling, General, and Administrative Expenses We closely manage our selling, general, and administrative expenses. Our selling, general, and administrative expenses are comprised of payroll, rent and occupancy, depreciation and amortization, acquisition expenses, pre-opening expenses and other operating expenses, including stock-based compensation expense. Pre-opening expenses include expenses incurred in the preparation and opening of a new store location, such as payroll, travel and supplies, but do not include the cost of the initial inventory or capital expenditures required to open a location. Our selling, general, and administrative expenses are primarily influenced by the volume of net sales of our locations, except for our corporate payroll, rent and occupancy and depreciation and amortization, which are generally fixed in nature. We control our selling, general, and administrative expenses through a budgeting and reporting process that allows our personnel to adjust our expenses as trends in net sales activity are identified. Income from Operations Income from operations is gross profit less selling, general, and administrative expenses. We use income from operations as an indicator of the productivity of our business and our ability to manage selling, general, and administrative expenses. Adjusted EBITDA 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.” Results of Operations The following table summarizes key components of our results of operations as a percentage of net sales during the periods presented: Thirteen Weeks Ended May 2, May 3, 2026 2025 Percentage of net sales: Net sales 100.0 % 100.0 % Cost of goods sold 70.4 69.6 Gross profit 29.6 30.4 Selling, general, and administrative expenses 36.7 38.2 Loss from operations (7.1 ) (7.8 ) Interest expense 1.0 1.3 Other losses 0.0 0.0 Loss before income taxes (8.1 ) (9.1 ) Income tax expense (benefit) 0.4 (0.5 ) Net loss (8.5 )% (8.6 )% Adjusted EBITDA (3.2 )% (3.6 )% 24 Table of Contents The following table shows our percentage of net sales by department during the periods presented: Thirteen Weeks Ended May 2, May 3, Department Product Offerings 2026 2025 Camping Backpacks, camp essentials, canoes and kayaks, coolers, outdoor cooking equipment, sleeping bags, tents and tools 7.1 % 8.5 % Apparel Camouflage, jackets, hats, outerwear, sportswear, technical gear and work wear 5.2 % 5.8 % Fishing Bait, electronics, fishing rods, flotation items, fly fishing, lines, lures, reels, tackle and small boats 12.4 % 12.1 % Footwear Hiking boots, socks, sport sandals, technical footwear, trail shoes, casual shoes, waders and work boots 4.5 % 5.2 % Hunting and Shooting Sports Ammunition, archery items, ATV accessories, blinds and tree stands, decoys, firearms, reloading equipment and shooting gear 66.4 % 63.6 % Optics, Electronics, Accessories, and Other Gift items, GPS devices, knives, lighting, optics, two-way radios, and other license revenue, net of revenue discounts 4.4 % 4.8 % Total 100.0 % 100.0 % Thirteen Weeks Ended May 2, 2026 Compared to Thirteen Weeks Ended May 3, 2025 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. 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. 25 Table of Contents 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. 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. Selling, General, and Administrative Expenses. Selling, general, and administrative expenses decreased by $1.4 million, or 1.4%, to $93.9 million during the 13 weeks ended May 2, 2026, compared to $95.3 million for the corresponding period of fiscal year 2025. This decrease was primarily the result of a decrease in payroll expense of $1.4 million as we emphasize disciplined cost control and decreased depreciation expense of $1.2 million during the 13 weeks ended May 2, 2026. As a percentage of net sales, selling, general, and administrative expenses decreased to 36.7% of net sales in the first quarter of fiscal year 2026, compared to 38.2% of net sales in the first quarter of fiscal year 2025, as a result of the factors noted above. 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. 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. Seasonality 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. The timing of our new retail store openings also may have an impact on our quarterly results. First, we incur certain non-recurring expenses related to opening each new retail store, which are expensed as they are incurred. Second, most store expenses generally vary proportionately with net sales, but there is also a fixed cost component, which includes occupancy costs. These fixed costs typically result in lower store profitability during the initial period after a new retail store opens. Due to both of these factors, new retail store openings may result in a temporary decline in operating profit, in dollars and/or as a percentage of net sales. Weather conditions affect outdoor activities and the demand for related apparel and equipment. Customers’ demand for our products, and, therefore, our net sales, can be significantly impacted by weather patterns on a local, regional and national basis. 26 Table of Contents Liquidity and Capital Resources Overview; Uses and Sources of Cash 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. We are reviewing our store portfolio and estimate that approximately five underperforming stores may be closed. We do not plan to open new stores in fiscal year 2026 as we assess our new store expansion strategy and prioritize capital allocation for critical technology investments and debt repayment. With no new stores planned for fiscal year 2026, we intend to prioritize the repayment of outstanding debt with any excess cash flow. If we close underperforming stores, such closures could result in additional expenses. For example, while we have the right to terminate some of our leases under specified conditions by making specified payments, we may not be able to terminate a particular lease if or when we would like to do so. In other cases, if we decide to close a store, we may be required to continue paying rent and operating expenses for the balance of the lease term. The performance of any of these obligations may be costly. Material Cash Requirements Our material cash requirements from known contractual and other obligations are primarily for general operating expenses and other expenses discussed below. Purchase Obligations. In the ordinary course of business, we enter into arrangements with vendors to purchase merchandise in advance of expected delivery. We or the vendor can generally terminate the purchase orders at any time. These purchase orders do not contain any termination payments or other penalties if cancelled. 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. 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. 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. 27 Table of Contents Cash Flows Cash flows provided by (used in) operating, investing and financing activities are shown in the following table: Thirteen Weeks Ended May 2, May 3, 2026 2025 (in thousands) Cash flows used in operating activities $ (55,370 ) $ (60,234 ) Cash flows used in investing activities (4,235 ) (3,804 ) Cash provided by financing activities 60,000 64,766 Cash at end of period 2,054 3,560 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. 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. 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. Indebtedness 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. Borrowings under the revolving credit facility bear interest based on either the base rate or Term SOFR (as defined by the credit agreement governing the revolving credit facility), at our option, in each case plus an applicable margin. The base rate is the greatest of (1) the floor rate (as defined in the credit agreement as a rate of interest equal to 0.0%) (2) Wells Fargo’s prime rate, (3) the federal funds rate (as defined in the applicable credit agreement) plus 0.50% or (4) the one-month Term SOFR (as defined in the applicable credit agreement) plus 1.00%. The applicable margin for loans under the revolving credit facility, which varies based on the average daily availability, ranges from 0.25% to 0.50% per year for base rate loans and from 1.35% to 1.60% per year for Term SOFR loans. We are required to pay a commitment fee for the unused portion of the revolving credit facility, which will range from 0.20% to 0.225% per annum, depending on the average daily availability under the revolving credit facility. Borrowings under the term loan facility bear interest at a rate equal to (i) a specified term secured overnight financing rate (SOFR), plus (ii) 0.10% as a SOFR adjustment, plus (iii) the applicable margin as specified in the term loan. The applicable margin means either 3.50% or 6.50% depending on the type of term loan. Under the term loan, loans may be required to be converted to base rate loans and in such case, the applicable margin rate will increase by 1.0%. 28 Table of Contents 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. 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. Our revolving credit facility and term loan facility each require us to maintain a minimum availability at all times of not less than the greater of $30.0 million and 10% of the gross borrowing base. In addition, the credit agreements governing each of our revolving credit facility and our term loan facility contain customary affirmative and negative covenants, including covenants that limit our ability to incur, create or assume certain indebtedness, to create, incur or assume certain liens, to make certain investments, to make sales, transfers and dispositions of certain property and to undergo certain fundamental changes, including certain mergers, liquidations and consolidations. The revolving credit facility and term loan facility also contain customary events of default, including defaults triggered by defaults under the other facility. As of May 2, 2026, we were in compliance with all covenants under the credit agreements governing each of our revolving credit facility and our term loan facility. Critical Accounting Estimates Our financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). In connection with the preparation of the financial statements, we are required to make assumptions, make estimates and apply judgment that affect the reported amounts of assets, liabilities, revenue, expenses and the related disclosures. We base our assumptions, estimates and judgments on historical experience, current trends and other factors that we believe to be relevant at the time the condensed consolidated financial statements are prepared. On a regular basis, we review the accounting policies, assumptions, estimates and judgments to ensure that our financial statements are presented fairly and in accordance with GAAP. However, because future events and their effects cannot be determined with certainty, actual results could differ from our assumptions and estimates, and such differences could be material. There have been no significant changes to our critical accounting estimates as described in “Part II., Item 7., Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Fiscal 2025 Form 10-K. Non-GAAP Financial Measures 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 29 Table of Contents 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. Adjusted EBITDA is not defined under GAAP and is not a measure of operating income, operating performance or liquidity presented in accordance with GAAP. Adjusted EBITDA has limitations as an analytical tool, and when assessing our operating performance, you should not consider Adjusted EBITDA in isolation or as a substitute for net income or other condensed consolidated statement of operations data prepared in accordance with GAAP. Some of these limitations include, but are not limited to: •Adjusted EBITDA does not reflect our cash expenditures or future requirements for capital expenditures or contractual commitments; •Adjusted EBITDA does not reflect changes in, or cash requirements for, our working capital needs; •Adjusted EBITDA may be defined differently by other companies, and, therefore, it may not be directly comparable to the results of other companies in our industry; •Adjusted EBITDA does not reflect the interest expense, or the cash requirements necessary to service interest or principal payments, on our debt; and •Adjusted EBITDA does not reflect income taxes or the cash requirements for any tax payments. A reconciliation of net income (loss) to Adjusted EBITDA and a calculation of Adjusted EBITDA margin is set forth below for the periods presented: Thirteen Weeks Ended May 2, May 3, 2026 2025 (dollars in thousands) Net loss $ (21,848 ) $ (21,254 ) Interest expense 2,624 2,971 Income tax expense (benefit) 1,043 (1,330 ) Depreciation and amortization 8,633 9,860 Stock-based compensation expense (1) 779 793 Management transition costs (2) 368 — Executive retention (3) 275 — Adjusted EBITDA $ (8,126 ) $ (8,960 ) Net sales $ 256,078 $ 249,103 Net loss margin (8.5 )% (8.6 )% Adjusted EBITDA margin (4) (3.2 )% (3.6 )% (1)Represents non-cash expenses related to equity instruments granted to employees under our equity incentive plan and employee stock purchase plan. (2)Represents expenses incurred relating to the departure and recruitment of key members of our management team. (3)Represents an executive retention bonus implemented to maintain leadership continuity and organizational stability throughout the turnaround process. (4)We calculate net income margin as net income divided by net sales and we define Adjusted EBITDA margin as Adjusted EBITDA divided by net sales. 30 Table of Contents