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The following discussion and analysis of financial condition and results of operations are based upon our Consolidated Financial Statements, which have been prepared in accordance with GAAP. The following information should be read in conjunction with our financial statements and the related notes included in Item 1. Financial Statements. References to “we,” “us,” “our,” or the “Company” mean Victoria’s Secret & Co. together with its subsidiaries. Our operating results are generally impacted by economic changes. Accordingly, we monitor the retail environment using certain key industry performance indicators including competitor performance and mall traffic data. These metrics can provide insight into consumer spending patterns and shopping behavior in the current retail environment and assist us in assessing our performance as well as the potential impact of industry trends on our future operating results. Additionally, we evaluate a number of key performance indicators including comparable sales, gross profit, operating income and other performance metrics such as sales per average selling square foot in assessing our performance. To evaluate our net sales, we utilize traffic, conversion (which we define as the percentage of customers who visit our stores or digital sites and make a purchase), units per transaction, average unit retail (which we define as the average price per unit purchased) and average transaction value (which we define as units per transaction multiplied by average unit retail). Executive Overview Victoria’s Secret & Co. operates two market-leading intimate apparel brands, Victoria’s Secret and PINK, complemented by an industry-leading beauty business, and Adore Me: •Victoria’s Secret – A sexy, glamorous and luxurious brand and global leader in women’s intimate apparel, renowned for its innovative, fashion-inspired collections for women around the world. •PINK – A playful, bold and irreverent lifestyle intimates and apparel brand for young women. •Adore Me – A direct-to-consumer lingerie and apparel brand focused on serving women across all budgets and phases of life. DailyLook, acquired through the Adore Me transaction, operates as a digitally-based, premium subscription styling service for women’s apparel and accessories. Our merchandise is available in our company-operated retail stores across the U.S., Canada and China, through our company-owned digital channels, and internationally through stores, websites and mobile applications operated by our partners. With a presence in approximately 70 countries, we benefit from strong global brand recognition, a compelling product assortment and a deep, lasting connection with our customers. We are dedicated to continuous growth and operational excellence, focusing on execution of our strategic plan to drive long-term, sustainable value for our stockholders. Net sales in the first quarter of 2026 increased 15%, to $1.560 billion, compared to the first quarter of 2025. In North America, net sales increased 11% in the stores channel and increased 8% in the direct channel compared to the first quarter of 2025. Traffic and average unit retail increased in our stores and direct channels compared to the first quarter of 2025. Net sales in our international channel increased 45% compared to the first quarter of 2025. Our operating income in the first quarter of 2026 increased $56 million, to $76 million, compared to the first quarter of 2025 and our operating income rate (expressed as a percentage of net sales) increased to 4.9% from 1.5% in the first quarter of 2025. The increase in operating income compared to the first quarter of 2025 was primarily driven by an increase in net sales and improved merchandise margins. 18 Table of Contents We continue to focus on the key priorities of our Path to Potential growth plan: Supercharge our Bra Authority; Recommit to PINK; Fuel Growth in Beauty; and Evolve Our Brand Projection and Go-To-Market Strategy. We remain focused on managing costs, while continuing to invest in product innovation, brand strength and the customer experience. Together with the solid operational foundation we have built, we believe these efforts position us to scale effectively and give us confidence in our ability to drive sustainable long‑term value for our stockholders. For additional information related to our first quarter of 2026 financial performance, see “Results of Operations.” Tariffs and Macro Environment Beginning in February 2025, the U.S. administration imposed tariffs on a broad range of imported goods under the International Emergency Economic Powers Act (“IEEPA”). On February 20, 2026, the U.S. Supreme Court ruled tariffs imposed under the IEEPA were not authorized, and on March 4, 2026, the U.S. Court of International Trade directed U.S. Customs and Border Protection (“CBP”) to refund amounts previously collected, including applicable interest. The CBP has established a phased administrative process for submitting refund claims for certain IEEPA tariffs. We are in the process of requesting refunds for the IEEPA tariffs paid, however, the amount and timing of recoveries remain uncertain. As a result, as of May 2, 2026, we did not record a receivable related to potential IEEPA tariff refunds. Following the Supreme Court’s decision relating to the IEEPA tariffs, the U.S. administration announced a new 10% global tariff under Section 122 of the Trade Act of 1974, subject to certain exceptions. We estimate tariffs, net of mitigation efforts, negatively impacted operating income by approximately $85 million in fiscal year 2025. We estimate tariffs, net of mitigation efforts, negatively impacted operating income by an incremental approximately $14 million in the first quarter of 2026 compared to the first quarter of 2025. It is unclear at this time what impact these decisions will have on our future results of operations, including the amount of refunds for the IEEPA tariffs previously paid, any changes in tariff levels or the imposition of new tariffs through other means. We continue to identify and execute mitigation strategies as the tariff environment evolves. Proxy Contest Subsequent to the end of the first quarter of 2026, BBRC and its Chairman Brett Blundy initiated a proxy contest seeking to withhold votes against directors nominated for re-election at our upcoming 2026 Annual Meeting of Shareholders. We expect to incur additional professional and legal fees associated with the proxy contest in the second quarter of 2026. 19 Table of Contents Non-GAAP Financial Information In addition to our results provided in accordance with GAAP above and throughout this Quarterly Report on Form 10-Q, provided below are non-GAAP financial measures that present operating income, net income (loss) attributable to Victoria’s Secret & Co. and net income (loss) per diluted share attributable to Victoria’s Secret & Co. on an adjusted basis, which remove certain non-recurring, infrequent or unusual items that we believe are not indicative of the results of our ongoing operations due to their size and nature. The intangible asset amortization excluded in the first quarter of 2025 from these non-GAAP financial measures is excluded because the amortization, unlike the related revenue, is not affected by operations of any particular period unless an intangible asset becomes impaired or the estimated useful life of an intangible asset is revised. We use adjusted financial information as key performance measures of our results of operations for the purpose of evaluating performance internally. These non-GAAP measurements are not intended to replace the presentation of our financial results in accordance with GAAP. Instead, we believe that the presentation of adjusted financial information provides additional information to investors to facilitate the comparison of past and present operations. Further, our definition of non-GAAP financial measures may differ from similarly titled measures used by other companies. The table below reconciles the most directly comparable GAAP financial measure to each non-GAAP financial measure. First Quarter (in millions, except per share amounts) 2026 2025 Reconciliation of Reported to Adjusted Operating Income Reported Operating Income - GAAP $ 76 $ 20 Organizational Restructuring and Other One-time Items (a) 4 6 Amortization of Intangible Assets (b) — 6 Adjusted Operating Income $ 80 $ 32 Reconciliation of Reported to Adjusted Net Income (Loss) Attributable to Victoria’s Secret & Co. Reported Net Income (Loss) Attributable to Victoria’s Secret & Co. - GAAP $ 48 $ (2) Organizational Restructuring and Other One-time Items (a) 4 6 Amortization of Intangible Assets (b) — 6 Tax Effect of Adjusted Items (1) (3) Adjusted Net Income Attributable to Victoria’s Secret & Co. $ 51 $ 7 Reconciliation of Reported to Adjusted Net Income (Loss) Per Diluted Share Attributable to Victoria’s Secret & Co. Reported Net Income (Loss) Per Diluted Share Attributable to Victoria’s Secret & Co. - GAAP $ 0.56 $ (0.02) Organizational Restructuring and Other One-time Items (a) 0.04 0.05 Amortization of Intangible Assets (b) — 0.06 Adjusted Net Income Per Diluted Share Attributable to Victoria’s Secret & Co. $ 0.60 $ 0.09 ________________ (a)In the first quarter of 2026 and 2025, we recognized pre-tax net expense of $4 million and $6 million ($3 million and $4 million after-tax, respectively), $2 million and $2 million included in buying and occupancy expense and $2 million and $4 million included in general, administrative and store operating expense, related to activities to continue to restructure our executive leadership team and organizational structure, as well as other one-time items. (b)In the first quarter of 2025, we recognized amortization expense of $6 million ($5 million after-tax) included in general, administrative and store operating expense, related to our definite-lived intangible assets. 20 Table of Contents Store Data The following table compares U.S. company-operated store data for the first quarter of 2026 to the first quarter of 2025: First Quarter 2026 2025 % Change Sales per Average Selling Square Foot (a) $ 143 $ 128 12 % Sales per Average Store (in thousands) (a) $ 990 $ 880 13 % Average Store Size (selling square feet) 6,913 6,905 — % Total Selling Square Feet (in thousands) 5,323 5,365 (1 %) ________________ (a)Sales per average selling square foot and sales per average store, which are indicators of store productivity, are calculated based on store sales for the period divided by the average, including the beginning and end of period, of total square footage and store count, respectively. The following table represents store data for the first quarter of 2026: Stores at Stores at January 31, 2026 Opened Closed May 2, 2026 Company-Operated: U.S. 766 3 (2) 767 Canada 24 — — 24 Subtotal Company-Operated 790 3 (2) 791 China Joint Venture: Beauty & Accessories (a) 20 — (2) 18 Full Assortment 45 3 (2) 46 Subtotal China Joint Venture 65 3 (4) 64 Partner-Operated: Beauty & Accessories 350 7 (8) 349 Full Assortment 212 6 (2) 216 Subtotal Partner-Operated 562 13 (10) 565 Adore Me 3 — — 3 Total 1,420 19 (16) 1,423 ________________ (a)Includes five partner-operated stores as of May 2, 2026. 21 Table of Contents The following table represents store data for first quarter of 2025: Stores at Stores at February 1, 2025 Opened Closed May 3, 2025 Company-Operated: U.S. 782 1 (11) 772 Canada 24 — (1) 23 Subtotal Company-Operated 806 1 (12) 795 China Joint Venture: Beauty & Accessories (a) 30 — (2) 28 Full Assortment 40 — — 40 Subtotal China Joint Venture 70 — (2) 68 Partner-Operated: Beauty & Accessories 324 7 (6) 325 Full Assortment 181 7 (3) 185 Subtotal Partner-Operated 505 14 (9) 510 Adore Me 6 — (1) 5 Total 1,387 15 (24) 1,378 ________________ (a)Includes twelve partner-operated stores as of May 3, 2025. Results of Operations First Quarter of 2026 Compared to First Quarter of 2025 Operating Income For the first quarter of 2026, our operating income increased $56 million, to $76 million, compared to operating income of $20 million in the first quarter of 2025, and the operating income rate (expressed as a percentage of net sales) increased to 4.9% from 1.5%. The drivers of our operating income results are discussed in the following sections. Net Sales The following table provides net sales for the first quarter of 2026 in comparison to the first quarter of 2025: 2026 2025 % Change First Quarter (in millions) Stores – North America $ 803 $ 721 11 % Direct 469 433 8 % International (a) 288 199 45 % Total Net Sales $ 1,560 $ 1,353 15 % _______________ (a)Results include consolidated joint venture sales in China, royalties associated with franchise partners’ sales, wholesale sales, and beginning in the third quarter of 2025 direct sales in the European Union. Prior to the third quarter of 2025, direct sales in the European Union are reported in our Direct channel. Direct sales in the European Union reported in the International channel were $17 million in the first quarter of 2026. 22 Table of Contents The following table compares the first quarter of 2026 comparable sales to the first quarter of 2025: 2026 2025 Comparable Sales (Stores and Direct) (a) 13 % (1 %) Comparable Store Sales (a) 10 % (1 %) _______________ (a)The percentage change in comparable sales represents comparable store and direct sales. The percentage change in comparable store sales represents the change in sales at comparable stores only and excludes the change in sales from our direct channels. The change in comparable sales provides an indication of period over period growth (decline). A store is typically included in the calculation of comparable sales when it has been open 12 months or more and it has not had a change in selling square footage of 20% or more. Individual stores are excluded from the comparable sales calculation if they have been closed for four consecutive days or more and direct channels are excluded from the comparable sales calculation if they have been closed for 24 consecutive hours or more. Upon re-opening, the stores and direct channels are included in the calculation. Additionally, stores are excluded if total selling square footage in the mall changes by 20% or more through the opening or closing of a second store. The percentage change in comparable sales is calculated on a comparable calendar period as opposed to a fiscal basis. Comparable sales attributable to our international stores are calculated on a constant currency basis. Net sales in the first quarter of 2026 increased $207 million, or 15%, to $1.560 billion compared to $1.353 billion in the first quarter of 2025. In the stores channel, our North America net sales increased $82 million, or 11%, to $803 million compared to the first quarter of 2025 driven by increases in traffic and average unit retail, while units per transaction and conversion remained flat. In the direct channel, net sales increased $36 million, or 8%, to $469 million compared to the first quarter of 2025 as increases in traffic and average unit retail were partially offset by decreases in conversion and units per order. In the international channel, net sales increased $89 million, or 45%, to $288 million compared to the first quarter of 2025. The increase in net sales in the first quarter of 2026 compared to the first quarter of 2025 was primarily driven by increases in net sales in China, sourcing sales to our partners, our wholesale arrangements and royalties earned associated with franchise sales in many countries outside of North America. Net sales in the direct and international channels in the first quarter of 2026 compared to the first quarter of 2025 were also impacted by a $17 million shift in the reporting of net sales to the international channel due to a change of fulfillment location whereby direct sales to customers in the European Union are now fulfilled by our distribution center in Europe as opposed to our distribution center in the Columbus, Ohio area. The following table provides a reconciliation of net sales from the first quarter of 2025 to the first quarter of 2026: (in millions) 2025 Net Sales $ 1,353 Sales Associated with Stores Included in the Comparable Stores Calculation 66 Sales Associated with New, Closed and Non-comparable Remodeled Stores, Net 20 Direct Channels (a) 84 Credit Card Programs 4 International Wholesale, Royalty and Sourcing 26 Foreign Currency Translation 7 2026 Net Sales $ 1,560 _______________ (a)Results include net sales for all direct channels operated by the Company (in North America and International) and the direct sales in China operated by our consolidated joint venture. Gross Profit For the first quarter of 2026, our gross profit increased $111 million compared to the first quarter of 2025 to $585 million, and our gross profit rate (expressed as a percentage of net sales) increased to 37.5% from 35.1%. The increase in gross profit dollars compared to the first quarter of 2025 was due to the increase in merchandise margin dollars which was driven by an increase in net sales, a decrease in promotional activity and an increase in regular-priced selling, partially offset by a $14 million increase in net tariff costs. The increase in gross profit dollars was also partially offset by an increase in buying and occupancy expenses primarily driven by increases in incentive compensation expenses associated with our improved results and fulfillment costs associated with our net sales increase. 23 Table of Contents The gross profit rate increase compared to the first quarter of 2025 was primarily driven by leverage in buying and occupancy expenses as a result of the increase in net sales, a decrease in promotional activity and an increase in regular-priced selling, partially offset by an increase in net tariff costs. General, Administrative and Store Operating Expenses For the first quarter of 2026, our general, administrative and store operating expenses increased $55 million, or 12%, to $509 million compared to the first quarter of 2025. The increase in general, administrative and store operating expenses compared to the first quarter of 2025 was primarily due to increases in store selling expenses, incentive compensation expenses associated with our improved results and marketing expenses. The general, administrative and store operating expense rate (expressed as a percentage of net sales) decreased to 32.6% from 33.6% compared to the first quarter of 2025 primarily due to leverage as a result of the increase in net sales. Interest Expense For the first quarter of 2026, our interest expense decreased $2 million to $15 million compared to the first quarter of 2025 primarily due to our lower average outstanding debt under our ABL Facility and Term Loan Facility and lower average borrowing rate for our Term Loan Facility. Provision for Income Taxes For the first quarter of 2026, our effective tax rate was 11.7% compared to 50.9% in the first quarter of 2025. The first quarter of 2026 rate differed from our combined estimated federal and state statutory rate primarily due to the recognition of excess tax benefits related to share-based compensation awards that vested in the period. The first quarter of 2025 rate differed from our combined estimated federal and state statutory rate primarily due to additional tax expense from share-based compensation awards that vested in the period. FINANCIAL CONDITION Liquidity and Capital Resources Liquidity, or access to cash, is an important factor in determining our financial stability. We are committed to maintaining adequate liquidity. Cash generated from our operating activities provides the primary resources to support current operations, growth initiatives, seasonal funding requirements and capital expenditures. Net cash provided by (used for) operating activities is impacted by our net income (loss) and working capital changes. Our net income (loss) is impacted by, among other things, sales volume, seasonal sales patterns, success of new product introductions, profit margins and income taxes. Historically, sales are higher during the fourth quarter of the fiscal year due to seasonal and holiday-related sales patterns. Generally, our need for working capital peaks during the summer and fall months as inventory builds in anticipation of the holiday season. Our ability to fund our operating needs is primarily dependent upon our ability to continue to generate positive cash flow from operations, as well as borrowing capacity under our ABL Facility, which we rely on to supplement cash generated by our operating activities, particularly when our need for working capital peaks in the summer and fall months as discussed above. Management believes that our cash balances and funds provided by operating activities, along with the borrowing capacity under our ABL Facility, taken as a whole, provide (i) adequate liquidity to meet all of our current and long-term obligations when due, (ii) adequate liquidity to fund capital expenditures, and (iii) flexibility to consider investment opportunities that may arise. However, certain investment opportunities or seasonal funding requirements may require us to seek additional debt or equity financing, and there can be no assurance that we will be able to obtain additional debt or equity financing on acceptable terms, if at all, in the future. We expect to utilize our cash flows to continue to invest in our brands, talent, capabilities and growth strategies as well as to repay our indebtedness over time. We believe that our available short-term and long-term capital resources are sufficient to fund our working capital and other cash flow requirements over the next 12 months. Working Capital and Capitalization Based upon our cash balances and cash provided by our operating activities, along with the borrowing capacity under our ABL Facility, we believe we will be able to continue to meet our working capital needs. 24 Table of Contents The following table provides a summary of our working capital position and capitalization as of May 2, 2026, January 31, 2026 and May 3, 2025: May 2, 2026 January 31, 2026 May 3, 2025 (in millions) Net Cash Provided by (Used for) Operating Activities (a) $ (137) $ 499 $ (150) Capital Expenditures (a) 54 187 43 Working Capital 340 376 199 Capitalization: Long-term Debt 986 971 1,078 Victoria’s Secret & Co. Shareholders’ Equity 790 856 645 Total Capitalization $ 1,776 $ 1,827 $ 1,723 Amounts Available Under the ABL Facility (b) $ 685 $ 589 $ 509 _______________ (a)The May 2, 2026 and May 3, 2025 amounts represent thirteen-week periods and the January 31, 2026 amounts represent a fifty-two-week period. (b)For the reporting period ended May 2, 2026, the availability under the ABL Facility was limited by our borrowing base of $717 million, less outstanding borrowings of $15 million and letters of credit of $17 million. For the reporting period ended January 31, 2026, the availability was limited by our borrowing base of $606 million, less letters of credit of $17 million. For the reporting period ended May 3, 2025, the availability under the ABL Facility was limited by our borrowing base of $631 million, less outstanding borrowings of $105 million and letters of credit of $17 million. Cash Flow The following table provides a summary of our cash flow activity for the first quarter of 2026 and 2025: First Quarter 2026 2025 (in millions) Cash and Cash Equivalents, Beginning of Period $ 518 $ 227 Net Cash Used for Operating Activities (137) (150) Net Cash Used for Investing Activities (54) (43) Net Cash Provided by (Used for) Financing Activities (121) 106 Effects of Exchange Rate Changes on Cash and Cash Equivalents 1 (2) Net Decrease in Cash and Cash Equivalents (311) (89) Cash and Cash Equivalents, End of Period $ 207 $ 138 Operating Activities Net cash used for operating activities reflects net income (loss) adjusted for non-cash items, including depreciation and amortization, share-based compensation expense and deferred tax expense, as well as changes in working capital. Net cash used for operating activities in the first quarter of 2026 was $137 million, a decrease in net cash flows used for operating activities of $13 million compared to the first quarter of 2025. The decrease in net cash flows used for operating activities in the first quarter of 2026 was primarily driven by an increase in net income of $54 million, net of the non-cash items noted above, partially offset by higher net operating cash outflows associated with working capital changes of $38 million. The most significant working capital driver resulting in the increase in net operating cash outflows in the first quarter of 2026 compared to the first quarter of 2025 is related to the timing of payments for the increase in inventory levels. The increase in inventory levels is primarily related to continued growth in the international channel and our European distribution center, as well as increased average unit costs driven by tariffs. Investing Activities Net cash used for investing activities in the first quarter of 2026 was $54 million, consisting solely of capital expenditures. The capital expenditures were primarily related to our store capital program and the customer experience, along with investments in technology and logistics to support our strategic initiatives to drive growth and operating efficiencies. 25 Table of Contents Net cash used for investing activities in the first quarter of 2025 was $43 million, consisting solely of capital expenditures. The capital expenditures were primarily related to our store capital program and investments in technology and logistics related to our strategic initiatives to drive growth and support productivity. We estimate capital expenditures in the range of $220 million to $240 million in fiscal year 2026. We expect that our capital expenditures will be focused on investing in our store capital program and the customer experience, along with investments in technology and logistics to support our strategic initiatives to drive growth and operating efficiencies. Financing Activities Net cash used for financing activities in the first quarter of 2026 was $121 million, consisting primarily of $100 million of share repurchases, $40 million of repayments under the ABL Facility and $28 million of payments for taxes on share-based compensation awards issued, partially offset by borrowings of $55 million under the ABL Facility. Net cash provided by financing activities in the first quarter of 2025 was $106 million, consisting primarily of borrowings of $160 million under the ABL Facility, partially offset by $55 million of repayments under the ABL Facility. Common Stock Share Repurchases Our Board determines share repurchase authorizations, giving consideration to our levels of profit and cash flows, capital requirements, current and forecasted liquidity, and restrictions placed upon us by our borrowing arrangements, as well as financial and other conditions existing at the time. We use cash flows generated from operating activities to fund any share repurchases. Once authorized by our Board, the timing and amount of any share repurchases are made at our discretion, taking into account a number of factors, including market conditions. In March 2024, our Board approved the March 2024 Share Repurchase Program, authorizing the repurchase of up to $250 million of our common stock, subject to market conditions and other factors, through open market, accelerated share repurchase or privately negotiated transactions, including pursuant to one or more Rule 10b5-1 trading plans. The March 2024 Share Repurchase Program is open-ended in term and will continue until exhausted. We repurchased the following shares of our common stock under the March 2024 Share Repurchase Program during the first quarter of 2026: Amount Authorized Shares Repurchased Amount Repurchased Average Stock Price (in millions) (in thousands) (in millions) March 2024 Share Repurchase Program $ 250 2,208 $ 100 $ 45.27 Shares repurchased under the March 2024 Share Repurchase Program were retired upon repurchase. As a result, in the first quarter of 2026 we retired 2.2 million shares repurchased under the March 2024 Share Repurchase Program, which resulted in reductions of less than $1 million in the par value of Common Stock, $9 million in Paid-in Capital and $91 million in Retained Earnings. As of May 2, 2026, we were authorized to repurchase up to $150 million of our common stock under the March 2024 Share Repurchase Program. Dividend Policy and Procedures We have not paid any cash dividends since becoming an independent, publicly traded company. We cannot guarantee that we will pay a dividend in the future or continue to pay any dividends if and when we commence paying dividends. The declaration and amount of any dividends to holders of our common stock will be at the discretion of our Board and will depend upon many factors, including our financial condition, earnings, cash flows, capital requirements of our business, covenants associated with our debt obligations, legal requirements, regulatory constraints, industry practice and any other factors the Board deems relevant. We would use cash flow generated from operating and financing activities to fund our dividends. 26 Table of Contents Long-term Debt and Borrowing Facilities The following table provides our outstanding Long-term Debt balance, net of unamortized debt issuance costs and discounts and any current portion, as of May 2, 2026, January 31, 2026 and May 3, 2025: May 2, 2026 January 31, 2026 May 3, 2025 (in millions) Senior Secured Debt with Subsidiary Guarantee $382 million Term Loan due August 2028 (“Term Loan Facility”) $ 378 $ 379 $ 381 Asset-based Revolving Credit Facility due May 2030 (“ABL Facility”) 15 — 105 Total Senior Secured Debt with Subsidiary Guarantee 393 379 486 Senior Debt with Subsidiary Guarantee $600 million, 4.625% Fixed Interest Rate Notes due July 2029 (“2029 Notes”) 597 596 596 Total Senior Debt with Subsidiary Guarantee 597 596 596 Total 990 975 1,082 Current Debt (4) (4) (4) Total Long-term Debt, Net of Current Portion $ 986 $ 971 $ 1,078 Cash paid for interest was $6 million and $8 million for the first quarter of 2026 and 2025, respectively. Issuance of 2029 Notes In July 2021, we issued $600 million of 4.625% notes due in July 2029 in a transaction exempt from registration under the Securities Act of 1933, as amended. The obligation to pay principal and interest on the 2029 Notes is jointly and severally guaranteed on a full and unconditional basis by certain of our wholly-owned subsidiaries. The issuance costs are being amortized through the maturity date and are included within Long-term Debt on the Consolidated Balance Sheets. Credit Facilities We have a senior secured term loan B credit facility with an original principal amount of $400 million, which will mature in August 2028. The discounts and issuance costs from the Term Loan Facility are being amortized through the maturity date and are included within Long-term Debt on the Consolidated Balance Sheets. We are required to make quarterly principal payments on the Term Loan Facility in an amount equal to 0.25% of the original principal amount of $400 million. We made principal payments for the Term Loan Facility of $1 million during both the first quarter of 2026 and 2025. Interest on the loans under the Term Loan Facility is calculated by reference to Term SOFR or an alternative base rate, plus an applicable interest rate (i) in the case of loans bearing interest based on Term SOFR, equal to 2.75% and (ii) in the case of alternate base rate loans, equal to 1.75%. The obligation to pay principal and interest on the loans under the Term Loan Facility is jointly and severally guaranteed on a full and unconditional basis by certain of our wholly-owned domestic subsidiaries. The loans under the Term Loan Facility are secured on a first-priority lien basis by certain assets of ours and our subsidiary guarantors that do not constitute priority collateral under the ABL Facility and on a second-priority lien basis by priority collateral under the ABL Facility, subject to customary exceptions. As of May 2, 2026, the interest rate on the loans under the Term Loan Facility was 6.42%. We also have a senior secured asset-based revolving credit facility, which will mature on the earlier of (a) May 2030 and (b) the date that is 91 days prior to the scheduled maturity date of certain outstanding material indebtedness with a principal balance exceeding $50 million to the extent that certain availability and financial covenant thresholds are not met on such date. The ABL Facility allows for borrowings and letters of credit in U.S. dollars or Canadian dollars and has aggregate commitments of $750 million. The availability under the ABL Facility is equal to the lesser of (i) the borrowing base, determined primarily based on our eligible U.S. and Canadian credit card receivables, eligible accounts receivable, eligible inventory and eligible real property, and (ii) the maximum aggregate commitment amount of $750 million. Interest on the loans under the ABL Facility is calculated by reference to Term SOFR or Term CORRA or an alternative base rate, plus an interest rate margin (i) in the case of Term SOFR or Term CORRA, ranging from 1.50% to 1.75%, and (ii) in the case of alternate base rate loans and Canadian base rate loans, ranging from 0.50% to 0.75%. 27 Table of Contents Unused commitments under the ABL Facility accrue an unused commitment fee ranging from 0.25% to 0.30%. The obligation to pay principal and interest on the loans under the ABL Facility is jointly and severally guaranteed on a full and unconditional basis by certain of our wholly-owned domestic and Canadian subsidiaries. The loans under the ABL Facility are secured on a first-priority lien basis by our eligible U.S. and Canadian credit card receivables, eligible accounts receivable, eligible inventory and eligible real property and on a second-priority lien basis on substantially all other assets of ours, subject to customary exceptions. We borrowed $55 million and $160 million from the ABL Facility during the first quarter of 2026 and 2025, respectively, and made repayments of $40 million and $55 million under the ABL Facility during the first quarter of 2026 and 2025, respectively. As of May 2, 2026, there were borrowings of $15 million outstanding under the ABL Facility and the interest rate on the borrowings was 7.15%. We had $17 million of outstanding letters of credit as of May 2, 2026 that further reduced our availability under the ABL Facility. As of May 2, 2026, our remaining availability under the ABL Facility was $685 million. Our long-term debt and borrowing facilities contain certain financial and other covenants, including, but not limited to, the maintenance of financial ratios. The 2029 Notes and the Term Loan Facility include the maintenance of a consolidated coverage ratio and a consolidated total leverage ratio, and the ABL Facility includes the maintenance of a fixed charge coverage ratio and a debt to EBITDAR ratio. The financial covenants could, within specific predefined circumstances, limit our ability to incur additional indebtedness, make certain investments, pay dividends or repurchase shares. As of May 2, 2026, we were in compliance with all covenants under our long-term debt and borrowing facilities. Credit Ratings The following table provides our credit ratings as of May 2, 2026: Moody’s S&P Corporate Ba3 BB- Senior Secured Debt with Subsidiary Guarantee Ba2 BB+ Senior Unsecured Debt with Subsidiary Guarantee B1 BB- Outlook Stable Stable Contingent Liabilities and Contractual Obligations Contractual Obligations Our contractual obligations primarily consist of long-term debt and the related interest payments, operating leases, purchase orders for merchandise inventory and other long-term obligations. These contractual obligations impact our short-term and long-term liquidity and capital resource needs. Except with respect to the additional $15 million of outstanding borrowings under the ABL Facility as of May 2, 2026, there have been no material changes in our contractual obligations since January 31, 2026, as discussed in “Contingent Liabilities and Contractual Obligations” in our 2025 Annual Report on Form 10-K. Certain of our contractual obligations may fluctuate during the normal course of business (primarily changes in our merchandise inventory-related purchase obligations, which fluctuate throughout the year as a result of the seasonal nature of our operations). RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS We did not adopt any new accounting standards during the first quarter of 2026 that had a material impact on our results of operations, financial position or cash flows. Disaggregation of Income Statement Expenses In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, which is intended to improve expense disclosures, primarily by requiring disclosure of disaggregated information about certain income statement expense line items on an annual and interim basis. This standard will be effective for annual reporting periods beginning in fiscal year 2027 and for interim periods beginning in fiscal year 2028, with early adoption permitted. The updates required by this standard should be applied prospectively, but retrospective application is permitted. We are currently evaluating the impact of adopting this standard on our disclosures. Internal-Use Software In September 2025, the FASB issued ASU 2025-06, Targeted Improvements to the Accounting for Internal-Use Software, which is intended to modernize the accounting for internal-use software costs, primarily by removing references to project stages from capitalization criteria and further clarifying the threshold entities apply to begin capitalizing costs. This standard will be effective for interim and annual reporting periods beginning in fiscal year 2028, with early adoption permitted. This standard may be applied prospectively, retrospectively or using a modified transition approach. We are currently evaluating the impacts of adopting this standard on our consolidated financial statements and related disclosures. 28 Table of Contents CRITICAL ACCOUNTING POLICIES AND ESTIMATES The preparation of financial statements in conformity with GAAP requires management to adopt accounting policies related to estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period, as well as the related disclosure of contingent assets and liabilities at the date of the financial statements. On an ongoing basis, management evaluates its accounting policies, estimates and judgments, including those related to inventories, long-lived assets, claims and contingencies, income taxes and revenue recognition. Management bases our estimates and judgments on historical experience and various other factors that are believed to be reasonable under the circumstances. Actual results may differ from these estimates. There have been no material changes to the critical accounting policies and estimates disclosed in our 2025 Annual Report on Form 10-K.