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ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of the financial condition and results of operations should be read in conjunction with the consolidated financial statements and the accompanying notes and information contained in other sections included elsewhere in this annual report, particularly, “Risk Factors,” and “Business.” This discussion and analysis is based on the beliefs of our management, as well as assumptions made by, and information currently available to our management. The statements in this discussion and analysis concerning expectations regarding our future performance, liquidity and capital resources, as well as other non-historical statements in this discussion and analysis, are forward-looking statements. See “Forward-Looking Statements.” These forward-looking statements are subject to numerous risks and uncertainties, including those described under “Risk Factors.” Our actual results could differ materially from those suggested or implied by any forward-looking statements.

Management’s discussion focuses on fiscal 2025 results compared to fiscal 2024. Fiscal year 2025 was a 52-week period and 2024 was a 53-week period. For a discussion of fiscal 2024 results compared to fiscal 2023, refer to the Company’s Annual Report on Form 10-K for the year ended February 2, 2025.

Overview

We are a lifestyle brand of men’s and women’s workwear, casual wear, outdoor apparel and accessories sold primarily through our own omnichannel platform. We offer products nationwide through our website and direct mail. In 2010, we initiated our omnichannel platform with the opening of our first store. Since then, we have expanded our retail presence, and as of February 1, 2026, we operated 63 retail stores and three outlet stores.

We offer a comprehensive line of innovative, durable and functional products, such as our Longtail T® shirts, Buck Naked® underwear, Fire Hose® work pants and No-Yank® Tank, which reflect our position as the Modern, Self-Reliant American Lifestyle brand. Our brand has a heritage in workwear that transcends tradesmen and appeals to a broad demographic for everyday and on-the-job use.

From our heritage as a catalog for those working in the building trades, Duluth Trading has become a widely recognized brand and proprietary line of innovative and functional apparel and gear. Over the last decade, we have created strong brand

awareness, built a loyal customer base and generated sales growth. We have done so by sticking to our roots of “there’s gotta be a better way” and through our relentless focus on providing our customers with quality, functional products.

A summary of our financial results is as follows:

•

Net sales in fiscal 2025 decreased by 9.8% compared to the prior year to $565.2 million;

•

Net loss in fiscal 2025 was ($16.2) million compared to prior year net loss of ($43.6) million; and

•

Adjusted EBITDA in fiscal 2025 increased to $24.9 million compared to the prior year of $14.6 million.

See “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.

Our management’s discussion and analysis includes market sales metrics for our stores, website and direct mail sales. Market areas are determined by a third-party that divides the United States and Puerto Rico into 280 unique geographical areas. Our store market sales metrics include sales from our stores, website and direct mail. Our non-store market sales metrics include sales from our website, direct mail and orders placed through the call center.

How We Assess the Performance of Our Business

In assessing the performance of our business, we consider a variety of financial and operating measures that affect our operating results.

Net Sales

Net sales reflect our sale of merchandise plus shipping and handling revenue collected from our customers, less returns and discounts. Direct-to-consumer sales are recognized upon shipment to a customer, while store sales are recognized at the point of sale.

Gross Profit

Gross profit is equal to our net sales less cost of goods sold. Gross profit as a percentage of our net sales is referred to as gross margin. Cost of goods sold includes the direct cost of purchased merchandise; inventory shrinkage; inventory adjustments due to obsolescence, including excess and slow-moving inventory and lower of cost and net realizable reserves; inbound freight; and freight from our fulfillment centers to our retail stores. The primary drivers of the costs of individual goods are raw material costs. Depreciation and amortization are excluded from gross profit. Shipping and handling revenue is also reflected in our gross profit and gross profit margin. Our gross profit may not be comparable to other retailers, as we do not include distribution network and store occupancy expenses in calculating gross profit, but instead we include them in selling, general and administrative expenses.

Selling, General and Administrative Expenses

Selling, general and administrative expenses include all operating costs not included in cost of goods sold. These expenses include all payroll and payroll-related expenses and occupancy expenses related to our stores and to our operations at our headquarters, including utilities, depreciation and amortization. They also include marketing expense, which primarily includes television, digital and social media advertising, print production, mailing and print advertising costs, as well as all logistics costs associated with shipping product to our customers, consulting and software expenses and professional services fees. Selling, general and administrative expenses as a percentage of net sales is usually higher in lower-volume quarters and lower in higher-volume quarters because a portion of the costs are relatively fixed.

While we expect these expenses to increase as we continue to increase brand awareness and invest in infrastructure to support our business, we believe these expenses will decrease as a percentage of sales over time. Our shipping and handling expenses typically increase during the second half of the year due to additional surcharges during our peak selling season.

Adjusted EBITDA

We believe Adjusted EBITDA is a useful measure of operating performance, as it provides a clearer picture of operating results by excluding the effects of financing and investing activities by eliminating the effects of interest and depreciation costs and eliminating expenses that are not reflective of underlying business performance. We use Adjusted EBITDA to facilitate a

comparison of our operating performance on a consistent basis from period-to-period and to provide for a more complete understanding of factors and trends affecting our business.

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.

Free Cash Flow

We believe Free Cash Flow is a useful measure of performance as an indication of the Company’s ability to generate cash and provides additional perspective on our ability to efficiently use capital in executing our business strategy. We use Free Cash Flow to facilitate a comparison of our operating performance on a consistent basis from period-to-period and our ability to generate cash.

We define Free Cash Flow as net cash provided by operating activities less purchase of property and equipment. This non-GAAP measure may not be comparable to similarly titled measures used by other companies.

Results of Operations

The following table summarizes our consolidated results of operations for the periods indicated, both in dollars and as a percentage of net sales.

Fiscal Year Ended

(in thousands)

Cost of goods sold (excluding depreciation and amortization) 263,570 318,119

Less: Net income attributable to noncontrolling interest 139 59

Net loss attributable to controlling interest $ (16,388 ) $ (43,671 )

Percentage of Net sales:

Cost of goods sold (excluding depreciation and amortization) 46.6 % 50.8 %

Selling, general and administrative expenses 54.9 % 53.9 %

Restructuring expense 0.2 % 1.2 %

Operating loss (1.8 ) % (5.9 ) %

Interest expense 0.9 % 0.7 %

Other income, net 0.1 % — %

Loss before income taxes (2.7 ) % (6.6 ) %

Income tax expense 0.2 % 0.4 %

Net loss (2.9 ) % (7.0 ) %

Less: Net income attributable to noncontrolling interest — % — %

Net loss attributable to controlling interest (2.9 ) % (7.0 ) %

Fiscal 2025 Compared to Fiscal 2024

Net Sales

Net sales decreased $61.4 million, or 9.8%, to $565.2 million in fiscal 2025 compared to $626.6 million in fiscal 2024. The decrease in net sales was 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 decrease was also attributed to one less week in fiscal 2025 (52-weeks) compared to fiscal 2024 (53-weeks). The decline in direct-to-consumer net sales was partially offset by an increase in store net sales driven by improved shopper conversion, higher average order values, and the opening of two new stores.

Gross Profit

Gross profit decreased $6.9 million, or 2.2%, to $301.6 million in fiscal 2025 compared to $308.5 million in fiscal 2024. As a percentage of net sales, gross margin increased to 53.4% of net sales in fiscal 2025 compared to 49.2% of net sales in fiscal 2024. The increase in gross margin rate 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, partially offset by tariff costs.

Selling, General and Administrative Expenses

Selling, general and administrative expenses decreased $27.1 million, or 8.0%, to $310.5 million in fiscal 2025 compared to $337.6 million in fiscal 2024. Selling, general and administrative expenses as a percentage of net sales was 54.9% in fiscal 2025 compared to 53.9% in fiscal 2024.

The increase in selling, general and administrative expense as a percentage of net sales was mainly driven by the decrease in net sales. We are not able to reduce SG&A at the same pace as the decline in sales as a result of our fixed cost base.

Interest Expense

Interest expense increased $0.6 million to $5.2 million in fiscal 2025 compared to $4.6 million in fiscal 2024. The increase in interest expense was primarily attributable to higher outstanding debt throughout fiscal 2025 compared to fiscal 2024 partially offset by a decrease in interest rates.

Income Taxes

Income tax expense was $1.2 million in fiscal 2025 compared to income tax expense of $2.4 million in fiscal 2024. Our effective tax rate related to controlling interest was (7.8%) in fiscal 2025 compared to (5.7%) in fiscal 2024. The provision for fiscal 2025 and fiscal 2024 reflected the establishment of a valuation allowance against the net amount of deferred tax assets as well as pre-tax loss in the current and prior year.

Net Loss Attributable to Controlling Interest

Net loss attributable to controlling interest was ($16.4) million in fiscal 2025 compared to ($43.7) million in fiscal 2024, due to the factors discussed above.

Non-GAAP Financial Measures

See the above section titled “How We Assess the Performance of Our Business,” for our definition of Adjusted EBITDA and Free Cash Flow.

Reconciliation of Net Loss to EBITDA and EBITDA to Adjusted EBITDA

The following table represents reconciliations of net (loss) income to EBITDA and EBITDA to Adjusted EBITDA for the periods indicated below.

Fiscal Year Ended

(in thousands)

As a result of the factors discussed above in the “Results of Operations” section, Adjusted EBITDA increased to $24.9 million from $14.6 million in fiscal 2024. As a percentage of net sales, Adjusted EBITDA increased to 4.4% of net sales in fiscal 2025 compared to 2.3% of net sales in fiscal 2024.

Free Cash Flow

The following table represents a reconciliation of Net cash provided by operating activities, the most comparable U.S. GAAP financial measure, to free cash flow.

Fiscal Year Ended

(in thousands)

Net cash provided by (used in) operating activities $ 24,172 $ (16,917 )

Purchases of property and equipment (7,600 ) (8,329 )

Free cash flow increased $41.8 million to $16.6 million in fiscal 2025 compared to ($25.2) million in fiscal 2024. The increase was primarily driven by lower inventory levels compared to an increase in inventory in the prior year coupled with a decrease in purchases of property and equipment.

Liquidity and Capital Resources

General

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 February 1, 2026 our working capital was $63.8 million, which includes cash and cash equivalents of $16.3 million.

We spent $17.8 million in fiscal 2025 on capital expenditures, inclusive of investments in software hosting implementation costs, which are included in Prepaid expenses & other current assets on the Company’s Consolidated Balance Sheets. Due to the seasonality of our business, a significant amount of cash from operating activities is generated during the fourth quarter of our fiscal year. During the first three quarters of our fiscal year, we typically are net users of cash in our operating activities as we acquire inventory in anticipation of our peak selling season, which typically occurs in the fourth quarter of our fiscal year. We also use cash in our investing activities for capital expenditures throughout all four quarters of our fiscal year.

We believe that our cash flow from operating activities and the availability of cash under our credit facility will be sufficient to cover working capital requirements and anticipated capital expenditures for the foreseeable future.

Cash Flow Analysis

A summary of operating, investing and financing activities is shown in the following table.

Fiscal Year Ended

(in thousands)

Net cash provided by (used in) operating activities $ 24,172 $ (16,917 )

Net cash used in investing activities (7,380 ) (8,129 )

Net cash used in financing activities (3,782 ) (3,776 )

Increase (decrease) in cash and cash equivalents $ 13,010 $ (28,822 )

Net Cash (Used in) Provided by Operating Activities

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

For fiscal 2025, net cash provided by (used in) operating activities was $24.2 million, which primarily consisted of non-cash depreciation and amortization of $25.5 million, amortization of stock-based compensation of $2.5 million and cash provided by operating assets and liabilities of $11.3 million, partially offset by a net loss of ($16.2) million. The cash provided by operating assets and liabilities of $11.3 million primarily consisted of a $35.2 million decrease in inventory partially offset by a $24.9 million decrease in trade accounts payable.

The decrease in inventory and trade accounts payable was primarily driven by lower receipts in 2025 to better align with sales.

For fiscal 2024, net cash used in operating activities was $16.9 million, which primarily consisted of non-cash depreciation and amortization of $32.3 million and amortization of stock-based compensation of $4.0 million, offset by cash used in operating assets and liabilities of $12.0 million and net loss of ($43.6) million. The cash used in operating assets and liabilities of $12.0 million primarily consisted of a $40.8 million increase in inventory partially offset by a $22.9 million increase in trade accounts payable.

Net Cash Used in Investing Activities

Investing activities consist primarily of capital expenditures related to investments in infrastructure, retail stores and information technology.

For fiscal 2025, net cash used in investing activities was $7.4 million, driven by purchases of property and equipment of $7.6 million.

For fiscal 2024, net cash used in investing activities was $8.1 million, driven by purchases of property and equipment of $8.3 million.

Net Cash Used in Financing Activities

Financing activities consist primarily of borrowings and payments related to our revolving line of credit as well as payments on finance lease obligations.

For fiscal 2025 and fiscal 2024, net cash used in financing activities was $3.8 million, primarily consisting of payments on finance lease obligations.

Credit Agreement

$5.0 million sublimit for issuance of standby letters of credit, as well as a $10.0 million sublimit for swing line loans. At the Company’s option, the interest rate applicable to the revolving senior credit facility was a floating rate equal to: (i) the Bloomberg Short-Term Bank Yield Index rate (“BSBY”) plus the applicable rate of 1.25% to 2.00% determined based on the Company’s rent adjusted leverage ratio, or (ii) the base rate plus the applicable rate of 0.25% to 1.00% based on the Company’s rent adjusted leverage ratio. The Credit Agreement was secured by essentially all Company assets and required the Company to maintain compliance with certain financial and non-financial covenants, including a maximum rent adjusted leverage ratio and a minimum fixed charge coverage ratio as defined in the Credit Agreement.

On July 8, 2022, the Company entered into the First Amendment to the Credit Agreement (the “First Amendment”), which was treated as a modification for accounting purposes. The First Amendment amended the Credit Agreement in order to (i) increase the revolving commitment from $150.0 million to $200.0 million; (ii) extend the maturity date from May 14, 2026 to July 8, 2027; (iii) amend the pricing index to replace BSBY with the Term Secured Overnight Financing Rate; and (iv) reduce the commitment fee in some instances.

On January 31, 2025 the Company entered into the Second Amendment to the Credit Agreement (the “Second Amendment”). The Second Amendment amended the Credit Agreement, in part, to (i) decrease the revolving commitment from $200 million to $100 million; (ii) revise the definition of “Applicable Rate” to provide for pricing terms in the event of a Rent Adjusted Leverage Ratio greater than or equal to 3.50:1.0; (iii) limit the exceptions to the prohibition on restricted payments to (a) making dividends or distributions by any subsidiary to the Company, and (b) the acquisition of equity interests in satisfaction of tax withholding obligations associated with restricted stock or awards under employee incentive plans; and (iv) provide that the Maximum Rent Adjusted Leverage Ratio and the Minimum Fixed Charge Coverage Ratio would be measured commencing on the fiscal quarter ending May 2, 2021 and measured quarterly thereafter as of the last day of each fiscal quarter of the Company (other than for the fiscal quarter ending February 2, 2025). The reduction in the revolving commitment was intended to rightsize the credit facility with the Company’s cash needs to fund seasonal inventory builds and capital expenditure expectations and resulted in fee savings. The Credit Agreement was extinguished on April 28, 2025, resulting in a write down of $0.2 million of debt issuance costs related to the terminated line of credit.

On April 28, 2025, the Company entered into a new credit agreement (the “New Credit Agreement”) among the Company, certain financial institutions as Lenders thereto, and BMO Bank N.A., as Administrative Agent, a Swing Line Lender and a Letter of Credit Issuer. The Credit Agreement provides for borrowings of up to $100.0 million in aggregate principal amount that are available under an asset-based revolving senior credit facility (the “Revolver”) with a $10.0 million sublimit for the issuance of standby letters of credit.

Under the New Credit Agreement, (i) each Secured Overnight Financing Rate (“SOFR”) loan will bear interest on the outstanding principal amount at a rate per annum equal to adjusted term SOFR plus 150 basis points; (ii) each base rate loan will bear interest on the outstanding principal amount from the applicable borrowing date at a rate per annum equal to the Base Rate (as defined in the New Credit Agreement) plus 50 basis points; (iii) each swing line loan will bear interest on the outstanding principal amount from the applicable borrowing date at a rate per annum equal to the base rate plus the applicable margin; and (iv) each other obligation will bear interest on the unpaid amount at a rate per annum equal to the base rate plus the applicable margin.

The Company is also permitted to voluntarily prepay the New Credit Agreement in whole or in part at any time, where borrowings bearing interest based on the base rate may be prepaid at any time without penalty and borrowings bearing interest based on SOFR may be prepaid, subject to payment of usual and customary breakage and redeployment costs. The revolver will mature on April 28, 2030. Pursuant to the New Credit Agreement, the Company may request an increase in the revolving credit commitments in the aggregate amount of up to $25.0 million during the term of the New Credit Agreement and with the consent of the Administrative Agent, subject to credit approval of the Lenders and the satisfaction of certain conditions. The New Credit Agreement contains customary events of default and financial, affirmative and negative covenants and is secured by a first-priority perfected security interest in substantially all of the tangible and intangible assets of the Company.

The new $100.0 million Revolver replaces the prior revolving credit facility at a lower interest rate and extends the availability of funds to April 28, 2030. The Company believes the New Credit Agreement will provide the Company with flexibility and liquidity to finance seasonal inventory builds.

On July 16, 2025, the Company entered into the First Amendment to the New Credit Agreement, pursuant to which all revolving credit loans advanced or prepaid pursuant to such Sweep to Loan Arrangement shall bear interest based on the Base Rate.

$100.0 million to $125.0 million, as allowed by the existing New Credit Agreement, beginning on October 1, 2025 until March 31, 2026, as of which date the revolving credit commitment returned to $100.0 million and (ii) permits the Company to request a second increase in the revolving credit commitment of $25.0 million during the term of the New Credit Agreement after March 31, 2026 with the consent of the Administrative Agent, subject to credit approval of the Lenders and satisfaction of certain conditions.

Contractual Obligations

In connection with our investing and operating activities, we have entered into certain contractual obligations. See Note 3 “Leases” of Notes to Consolidated Financial Statements for additional discussion of these obligations.

Off-Balance Sheet Arrangements

We are not a party to any significant off-balance sheet arrangements.

Critical Accounting Estimates

The preparation of financial statements in accordance with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect amounts reported in our consolidated financial statements and related notes, as well as the related disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. We evaluate our accounting policies, estimates, and judgments on an on-going basis. We base 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 under different assumptions and conditions and such differences could be material to the consolidated financial statements.

We evaluated the development and selection of our critical accounting estimates and believe that the following involves a higher degree of judgment or complexity and are most significant to reporting our results of operations and financial position, and are therefore discussed as critical.

Product Return Reserve

The Company currently estimates product return reserve using its own historical sales information. The Company regularly assesses and adjusts the estimate of accrued sales returns by updating return rates for actual company trends and projected costs. While returns have historically been within our expectations, future return rates may differ from those experienced in the past. Changes in these estimates can have a material impact on our financial statements. We believe the accounting estimate related to product returns is a critical accounting estimate because it requires us to make assumptions about future potential returns, which are highly uncertain.

Critical Accounting Policies

With respect to critical accounting policies, even a relatively minor variance between actual and expected experience can potentially have a materially favorable or unfavorable impact on subsequent results of operations. However, our historical results for the periods presented in the consolidated financial statements have not been materially impacted by such variances. More information on all of our significant accounting policies can be found in Note 2, “Summary of Significant Accounting Policies” of Notes to Consolidated Financial Statements included in this Annual Report on Form 10-K.

Leases

The Company recognizes ROU assets and lease liabilities related to leases on the Company’s consolidated balance sheets. The Company determines if an arrangement is, or contains, a lease at inception. ROU assets represent the right to use an underlying asset for the lease term and lease liabilities reflect the obligation to make lease payments arising from the lease. At any given time during the lease term, the lease liability represents the present value of the remaining lease payments and the ROU asset is measured at the amount of the lease liability, adjusted for pre-paid rent, unamortized initial direct costs and the remaining balance of lease incentives received. Both the lease ROU asset and liability are reduced to zero at the end of the lease. See Note 3 “Leases,” of Notes to Consolidated Financial Statements included in this Annual Report on Form 10‐K.

Revenue Recognition

Revenue for merchandise that is shipped to our customers from our fulfillment centers and stores is recognized upon shipment following customer payment, which is when the customer obtains control of the product and has the ability to direct

the use of the product, including, among other options, the ability to redirect the product to a different shipping destination. Store revenue is recognized at the point of sale. This represents the point at which the customer obtains control of the product and has the ability to direct the use of the product.

We recognize shipping and handling fees as revenue included in net sales when generated from a customer order upon shipment or at the point of sale. Costs of shipping and handling are included in selling, general and administrative expenses.

Sales tax collected is not recognized as revenue as it is ultimately remitted to governmental authorities.

We reserve for projected merchandise returns based on both historical and actual experience, as well as various other assumptions that we believe to be reasonable. Actual merchandise returns are monitored regularly and have not been materially different from the estimates recorded. Product returns often represent merchandise that can be resold. Amounts refunded to customers are generally made by issuing the same payment tender as used in the original purchase. Merchandise exchanges of the same product and price are not considered merchandise returns and are therefore excluded when calculating the sales returns reserve.

Inventories

Our inventories are composed of finished goods and are stated at the lower of cost or net realizable value, with cost determined using the first-in, first-out method. Net realizable value is defined as the “estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation.” The inventory value is adjusted periodically, if needed, to reflect current market conditions and inventory composition, which requires our judgments that may significantly affect the ending inventory valuation, as well as gross margin. The estimates used in inventory valuation are obsolescence (including excess and slow-moving inventory and lower of cost or market reserves) and estimates of inventory shrinkage. We adjust our inventory for obsolescence based on historical trends, aging reports, specific identification, current retail prices and our estimates of future retail sales prices.

The reserve for inventory shrinkage is adjusted to reflect the trend of historical physical inventory count results. The Company performs its retail store physical inventory counts in July and the difference between actual and estimated shrinkage, recorded in Cost of goods sold, may cause fluctuations, particularly in second fiscal quarter results.

Due to these factors, our obsolescence and shrinkage reserves contain uncertainties. Both estimates have calculations that require us to make assumptions and to apply judgment regarding a number of factors, including market conditions, the selling environment, historical results and current inventory trends. If actual observed obsolescence or periodic updates of our shrinkage estimates differ from our original estimates, we adjust our inventory reserves accordingly throughout the period. We do not believe that changes in the assumptions used in these estimates would have a significant effect on our net income or inventory balances. We have not made any material changes to our assumptions included in the calculations of the obsolescence and shrinkage reserves during the periods presented, nor have we recorded significant adjustments related to the physical inventory process.

Income Taxes

We account for income taxes and the related accounts using the asset and liability method in accordance with ASC Topic 740, Income Taxes (“ASC 740”). Under this method, we accrue income taxes payable or refundable and recognize deferred tax assets and liabilities based on differences between U.S. GAAP and tax bases of assets and liabilities. We measure deferred tax assets and liabilities using enacted tax rates in effect for the years in which the differences are expected to reverse, and recognize the effect of a change in enacted rates in the period of enactment.

We record net deferred tax assets to the extent we believe these assets will more likely than not be realized. In making such determination, we consider all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax planning strategies and recent financial operations. A valuation allowance is established if it is more likely than not that some portion or all of the deferred income tax asset will not be realized. A valuation allowance was recognized for the years ended February 1, 2026 and February 2, 2025.

We establish assets and liabilities for uncertain tax positions taken or expected to be taken in income tax returns, using a more-likely-than-not recognition threshold. We recognize penalties and interest related to uncertain tax positions as income tax expense.

See Note 9 “Income Taxes,” of Notes to Consolidated Financial Statements included in this Annual Report on Form 10‐K.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Index to Consolidated Financial Statements

Page

Consolidated Balance Sheets as of February 1, 2026 and February 2, 2025 39

Notes to Consolidated Financial Statements 44

Schedule II Valuation and Qualifying Accounts 64

Report of Independent Registered Public Accounting Firm

To the Shareholders and Board of Directors

Duluth Holdings Inc.:

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheets of Duluth Holdings Inc. and subsidiaries (the Company) as of February 1, 2026 and February 2, 2025, the related consolidated statements of operations, comprehensive income, shareholders’ equity, and cash flows for the years then ended, and the related notes and financial statement schedule II - Valuation and Qualifying Accounts (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of February 1, 2026 and February 2, 2025, and the results of its operations and its cash flows for each of the years then ended, in conformity with U.S. generally accepted accounting principles.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Product return reserve

As discussed in Notes 2 and 5 to the consolidated financial statements, as of February 1, 2026, the Company recorded $4,529 thousand in reserves for product returns within accrued expenses and other current liabilities. Management estimates the product return reserve using its own historical sales and product return information.

We identified the assessment of the product return reserve as a critical audit matter. A high degree of auditor judgement was required to assess whether the historical return rate used to estimate the reserve for product returns is indicative of future returns.

The following are the primary procedures we performed to address this critical audit matter. We evaluated and tested the design and implementation of certain internal controls related to the product return reserve. This included controls related to determining the historical return rate used to estimate product returns. We assessed the Company’s ability to accurately estimate the product return rate by comparing prior period estimates to actual product return rates experienced. We analyzed the product return rate assumption by evaluating the consistency of the assumption with the trend of actual historical product return rates and by comparing the product return reserve to actual product returns received after the balance sheet date.

/s/ KPMG LLP

We have served as the Company’s auditor since 2021.

Milwaukee, Wisconsin

March 20, 2026

DULUTH HOLDINGS INC.

Consolidated Balance Sheets

(Amounts in thousands)

ASSETS

Current Assets:

Prepaid expenses & other current assets 21,654 17,781

Finance lease right-of-use assets, net 29,577 32,957

LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:

Accrued expenses and other current liabilities 39,693 35,684

Current portion of operating lease liabilities 16,449 15,534

Current portion of finance lease liabilities 2,681 2,541

Current maturities of TRI long-term debt 1,020 931

Operating lease liabilities, less current portion 76,008 89,222

Finance lease liabilities, less current portion 27,940 30,621

TRI long-term debt, less current maturities 23,337 24,283

Deferred tax liabilities 962 —

Commitments and contingencies

Shareholders' equity:

Accumulated other comprehensive income (231 ) (722 )

Total shareholders' equity of Duluth Holdings Inc. 168,973 182,676

Noncontrolling interest (2,858 ) (2,997 )

Total liabilities and shareholders' equity $ 402,609 $ 452,442

The accompanying notes are an integral part of these consolidated financial statements.

DULUTH HOLDINGS INC.

Consolidated Statements of Operations

(Amounts in thousands, except per share figures)

Fiscal Year Ended

Cost of goods sold (excluding depreciation and amortization) 263,570 318,119

Less: Net income attributable to noncontrolling interest 139 59

Net loss attributable to controlling interest $ (16,388 ) $ (43,671 )

Basic earnings per share (Class A and Class B):

Weighted average shares of common stock outstanding 34,619 33,368

Net loss per share attributable to controlling interest $ (0.47 ) $ (1.31 )

Diluted earnings per share (Class A and Class B):

Weighted average shares and equivalents outstanding 34,619 33,368

Net loss per share attributable to controlling interest $ (0.47 ) $ (1.31 )

The accompanying notes are an integral part of these consolidated financial statements.

DULUTH HOLDINGS INC.

Consolidated Statements of Comprehensive Income

(Amounts in thousands)

Fiscal Year Ended

Other comprehensive loss

Securities available-for-sale:

Unrealized security gain (loss) 491 (296 )

Income tax benefit — (1 )

Other comprehensive income (loss) 491 (295 )

Comprehensive income attributable to noncontrolling interest 139 59

Comprehensive loss attributable to controlling interest $ (15,897 ) $ (43,966 )

The accompanying notes are an integral part of these consolidated financial statements.

DULUTH HOLDINGS INC.

Consolidated Statements of Shareholders’ Equity

(Amounts in thousands)

Accumulated Noncontrolling

Capital stock other interest in Total

Treasury Retained comprehensive variable interest shareholders'

Shares Amount stock earnings loss entities equity

Stock-based compensation — 4,046 — — — — 4,046

Restricted stock forfeitures (239 ) — — — — — —

Restricted stock surrendered for taxes (156 ) — (594 ) — — — (594 )

Other comprehensive loss — — — — (295 ) — (295 )

Stock-based compensation — 2,506 — — — — 2,506

Restricted stock forfeitures (1,168 ) — — — — — —

Restricted stock surrendered for taxes (205 ) — (590 ) — — — (590 )

Other comprehensive income — — — — 491 — 491

The accompanying notes are an integral part of these consolidated financial statements.

DULUTH HOLDINGS INC.

Consolidated Statements of Cash Flows

(Amounts in thousands)

Fiscal Year Ended

Cash flows from operating activities:

Loss on disposal of property and equipment 170 473

Changes in operating assets and liabilities:

Income taxes receivable — 617

Prepaid expense & other assets 855 1,085

Software hosting implementation costs, net (5,575 ) (3,171 )

Income taxes payable 113 65

Accrued expenses and deferred rent obligations 3,412 2,059

Net cash provided by (used in) operating activities 24,172 (16,917 )

Cash flows from investing activities:

Purchases of property and equipment (7,600 ) (8,329 )

Principal receipts from available-for-sale security 220 200

Net cash used in investing activities (7,380 ) (8,129 )

Cash flows from financing activities:

Payments on TRI long term debt (930 ) (846 )

Payments on finance lease obligations (2,541 ) (2,721 )

Shares withheld for tax payments on vested restricted stock (590 ) (594 )

Net cash used in financing activities (3,782 ) (3,776 )

Increase (decrease) in cash and cash equivalents 13,010 (28,822 )

Cash and cash equivalents at beginning of period 3,335 32,157

Cash and cash equivalents at end of period $ 16,345 $ 3,335

Supplemental disclosure of cash flow information:

Supplemental disclosure of non-cash information:

Unpaid liability to acquire property and equipment $ 1,126 $ 1,285

The accompanying notes are an integral part of these consolidated financial statements.

DULUTH HOLDINGS INC.

Notes to Consolidated Financial Statements

1. NATURE OF OPERATIONS AND BASIS OF PRESENTATION

Nature of Operations

Duluth Holdings Inc. (“Duluth Trading” or the “Company”), a Wisconsin corporation, is a lifestyle brand of men’s and women’s casual wear, workwear and accessories sold primarily through the Company’s own omnichannel platform. The Company’s products are marketed under the Duluth Trading Company brand, with the majority of products being exclusively developed and sold as Duluth Trading branded merchandise.

In 2010, the Company initiated its omnichannel platform with the opening of its first store. Since then, Duluth Trading has expanded its retail presence, and as of February 1, 2026, the Company operated 63 retail stores and three outlet stores. The Company identifies its operating segments according to how its business activities are managed and evaluated. The Company continues to grow its omnichannel distribution network which allows the consumer to interact with the Company through a consistent customer experience whether on the Company website or at Company stores. The Company has one reportable external segment, consistent with the Company’s omnichannel business approach. The Company’s revenues generated outside the United States were insignificant.

The Company has two classes of authorized common stock: Class A common stock and Class B common stock. The rights of holders of Class A common stock and Class B common stock are identical, except for voting and conversion rights. Each share of Class A common stock is entitled to ten votes per share and is convertible at any time into one share of Class B common stock. Each share of Class B common stock is entitled to one vote per share. The Company’s Class B common stock trades on the NASDAQ Global Select Market under the symbol “DLTH.”

Basis of Presentation

The consolidated financial statements are prepared in accordance with U.S. Generally Accepted Accounting Principles (“U.S. GAAP”). All significant intercompany balances and transactions have been eliminated in consolidation.

The Company’s fiscal year ends on the Sunday nearest to January 31 of the following year. Fiscal 2025 and Fiscal 2024 ended on February 1, 2026 and February 2, 2025, respectively. Fiscal 2025 was a 52-week period and Fiscal 2024 was a 53-week period.

Seasonality of Business

The Company’s business is affected by the pattern of seasonality common to most retail apparel businesses. Historically, the Company has recognized a significant portion of its revenue and operating profit in the fourth fiscal quarter of each year as a result of increased sales during the holiday season.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation

The accompanying consolidated financial statements consist of the accounts of Duluth Holdings Inc. and TRI Holdings, LLC (“TRI”) as a variable interest entity. See Note 6 “Variable Interest Entities” for further information.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Revenue Recognition

The Company’s revenue primarily consists of the sale of apparel, footwear and hard goods. Revenue for merchandise that is shipped to our customers from our fulfillment centers and stores is recognized upon shipment following customer payment, which is when the customer obtains control of the product and has the ability to direct the use of the product, including, among other options, the ability to redirect the product to a different shipping destination. Store revenue is recognized at the point of sale. The Company provides the customer the right of return on the product and revenue is adjusted based on an estimate of the

DULUTH HOLDINGS INC.

Notes to Consolidated Financial Statements

expected returns based on historical rates as well as events that may cause changes to historical rates. See Note 5 “Accrued Expense and Other Liabilities” for the Company’s product returns reserve. Shipping and processing revenue generated from customer orders are included as a component of net sales and shipping and processing expense, including handling expense, is included as a component of selling, general and administrative expenses. Sales tax collected from customers and remitted to taxing authorities is excluded from revenue and is included in accrued expenses. A liability is recognized at the time a gift card is sold, and revenue is recognized at the time the gift card is redeemed for merchandise. See Note 8 “Revenue” for further information.

Cost of Goods Sold and Selling, General and Administrative Expenses

The following table illustrates the primary costs classified in cost of goods sold and selling, general and administrative expenses:

Cost of Goods Sold Selling, General and Administrative Expenses

· Direct cost of purchased merchandise · Payroll and payroll-related expenses

· Inbound freight · Depreciation and amortization

· Logistical costs associated with shipping product to customers

· Consulting and software expenses and professional services fees

Advertising and Direct Mail Expenses

The Company’s advertising and direct mail expense primarily consists of web marketing programs, social media and radio and television advertisements, which are expensed as they are incurred. The Company’s direct-response advertising consists of producing, printing and mailing marketing materials, which are expensed upon receipt by customers.

Advertising and Direct Mail expenses were $58.4 million and $67.5 million for fiscal 2025 and fiscal 2024, respectively.

Shipping and Processing

Shipping and processing revenue generated from customer orders has been classified as a component of net sales. Shipping and processing expense, including handling expense, has been classified as a component of selling, general and administrative expenses. The Company incurred shipping and processing expenses of $34.7 million and $43.7 million for fiscal 2025 and fiscal 2024, respectively.

Income Taxes

The Company accounts for income taxes and related accounts using the asset/liability method in accordance with ASC Topic 740, Income Taxes (“ASC 740”). Under ASC 740, the Company accrues income taxes payable or refundable and recognizes deferred tax assets and liabilities based on differences between U.S. GAAP and tax bases of assets and liabilities. The Company measures deferred tax assets and liabilities using enacted tax rates in effect for the years in which the differences are expected to reverse, and recognizes the effect of a change in enacted rates in the period of enactment. A valuation allowance is established if it is more likely than not that some portion or all of the deferred income tax asset will not be realized.

The Company establishes assets and liabilities for uncertain tax positions taken or expected to be taken in income tax returns, using a more-likely-than-not recognition threshold. The Company recognizes penalties and interest related to uncertain tax positions as income tax expense. See Note 9 “Income Taxes,” of these Notes to Consolidated Financial Statements for further discussion.

DULUTH HOLDINGS INC.

Notes to Consolidated Financial Statements

Concentrations of Credit Risk

Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash deposits. At various times during the year, the Company has certain cash balances deposited in financial institutions in excess of federally insured limits. The Company has not experienced any losses in such accounts and management believes it is not exposed to any significant credit risk.

Cash and Cash Equivalents

The Company considers short-term investments with original maturities of three months or less when purchased to be cash equivalents. As of February 1, 2026, Cash and cash equivalents consisted of cash, amounts receivable from credit card issuers and money market funds. Amounts receivable from credit card issuers are typically converted to cash within 2 to 4 days of the original sales transaction and are considered to be cash equivalents.

Significant Suppliers

The Company’s principal supplier of inventory accounted for 38% and 43% of total inventory expenditures in fiscal 2025 and fiscal 2024, respectively.

Inventories

Inventory consists of finished goods stated at the lower of cost or net realizable value, with cost determined using the first-in, first-out valuation method. The Company records an inventory reserve for the anticipated loss associated with selling inventories below cost. Inventory reserve for excess, obsolete items and shrinkage was $4.4 million and $2.1 million as of February 1, 2026 and February 2, 2025, respectively.

Property and Equipment

Property and equipment consist of the following:

(in thousands)

Land and land improvements $ 4,486 $ 4,486

Accumulated depreciation and amortization (175,803 ) (159,450 )

DULUTH HOLDINGS INC.

Notes to Consolidated Financial Statements

The Company recorded depreciation expense of $21.9 million and $28.7 million for fiscal 2025 and fiscal 2024, respectively. The Company expenses as incurred all routine repair and maintenance costs that do not extend the estimated useful life of the asset.

Property and equipment are carried at cost and are generally depreciated using the straight-line method over the estimated useful lives. Leasehold improvements are depreciated over the shorter of the lease term or estimated useful life. Depreciable lives by major classification generally are as follows:

Years

Land improvements 15

Leasehold improvements 3 - 15

Buildings 39

Vehicles 5

Warehouse equipment 7 - 10

Office equipment and furniture 7 - 10

Computer equipment 3 - 5

Software 3 - 5

Prepaid Expenses and Other Assets

Prepaid expenses and other assets consist of the following:

(in thousands)

Prepaid expenses & other current assets

Pending returns inventory, net $ 2,020 $ 2,301

Current software hosting implementation costs, net 4,173 3,749

Prepaid expenses & other current assets $ 21,654 $ 17,781

Other assets, net

Non-current software hosting implementation costs 8,345 7,498

Software Hosting Implementation Costs

Software hosting implementation costs includes costs of implementation activities of certain cloud computing arrangements in accordance with Accounting Standards Update No. 2018-15, Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40). Amortization expense was $4.7 million and $5.3 million for fiscal 2025 and fiscal 2024, respectively. Accumulated amortization was $15.0 million and $12.4 million for fiscal 2025 and fiscal 2024, respectively. See Note 12 “Recent Accounting Pronouncements” for more information.

Goodwill

Goodwill represents the excess of purchase price over the fair value of net assets acquired. ASC Topic 350, Intangibles-Goodwill and Other, requires that goodwill be tested for impairment annually, or more often if an event or circumstance indicates that an impairment loss may have been incurred. The Company’s management uses its judgment in assessing whether goodwill may have become impaired between annual impairment tests. Indicators such as unexpected adverse business conditions, economic factors, competitive activities, loss of key personnel and acts by governments may signal that an asset has become impaired. The Company recognized a full impairment of goodwill for the year ended February 2, 2025.

Impairment of Long-Lived Assets

The Company’s long-lived assets are reviewed for impairment during the fourth quarter, or whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. If the sum of the expected undiscounted cash flows

DULUTH HOLDINGS INC.

Notes to Consolidated Financial Statements

is less than the carrying value of the related asset or group of assets, a loss is recognized for the difference between the fair value and the carrying value of the asset or group of assets. Such analyses necessarily involve judgment.

For fiscal 2025, the Company did not identify a triggering event within the annual impairment test. Thus the Company determined that no impairment was needed.

Store Pre-opening Costs

Store pre-opening costs are expensed as incurred and are included in selling, general and administrative expenses.

Stock-Based Compensation

In connection with the IPO, the Company adopted the 2015 Equity Incentive Plan of Duluth Holdings Inc. There are awards outstanding under the 2015 plan, but we do not grant new awards under the plan. We have adopted the 2024 Equity Incentive Plan of Duluth Holdings Inc. (“2024 Plan”), which provides compensation alternatives such as stock options, shares, restricted stock, restricted stock units, deferred stock and performance share units, using or based on the Company’s Class B common stock.

The Company accounts for its stock-based compensation plan in accordance with ASC Topic 718, Stock Compensation, which requires the Company to measure all share-based payments at grant date fair value and recognize the cost over the requisite service period of the award. Restricted stock issued to board members generally vests over a period of one year. Restricted stock issued to key employees and executives typically vests over a period of three years to four years based on the terms for each individual award. The fair value of the restricted stock is determined based on the market value of the Company’s Class B common stock on the grant date. Restricted stock forfeitures are recognized as incurred.

Total stock compensation expense associated with restricted stock recognized by the Company was $2.5 million and $4.0 million for fiscal 2025 and fiscal 2024, respectively, and is included in Selling, general and administrative expenses on the Consolidated Statements of Operations.

The following is a summary of the activity in the Company’s unvested restricted stock during the years ended February 1, 2026 and February 2, 2025:

Weighted average

grant date

fair value

Shares per share

At February 1, 2026, the Company had unrecognized compensation expense of $3.5 million related to the restricted stock awards, which is expected to be recognized over a weighted average period of 2.1 years.

Treasury Stock

Treasury stock consists of shares withheld in lieu of tax payments when restricted stock vests using the treasury cost method and is classified in the Consolidated Balance Sheets as a reduction to shareholders’ equity.

Taxes Collected from Customers

The Company presents all non-income government-assessed taxes (sales, use and value-added taxes) collected from its customers and remitted to governmental agencies on a net basis (excluded from revenue) in its consolidated financial statements.

DULUTH HOLDINGS INC.

Notes to Consolidated Financial Statements

Other Comprehensive Income

Other comprehensive income or loss represents the change in equity from non-shareholder or non-member transactions, which is not included in the statements of operations but is reported as a separate component of shareholders’ equity. For fiscal 2025 and fiscal 2024, other comprehensive income consists of changes in unrealized gains and losses on the Company’s available-for-sale security, net of taxes.

Fair Value Measurements

ASC Topic 820, Fair Value Measurements and Disclosures(“ASC 820”), defines fair value as the price that would be received to sell an asset, or paid to transfer a liability, in an orderly transaction between market participants at the measurement date (i.e., an exit price). The exit price is based on the amount that the holder of the asset or liability would receive or need to pay in an actual transaction (or in a hypothetical transaction if an actual transaction does not exist) at the measurement date. ASC 820 describes a fair value hierarchy based on three levels of inputs that may be used to measure fair value, of which the first two are considered observable and the last unobservable, as follows:

Level 1 – Quoted prices in active markets for identical assets or liabilities.

Level 2 – Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

The Company’s assets and liabilities measured at fair value are categorized as Level 1 or Level 3 instruments. The fair value of the Company’s money market account is obtained from real-time quotes for transactions in active exchange markets involving identical assets (Level 1). The fair value of the Company’s available-for-sale security was valued based on a discounted cash flow method (Level 3), which incorporates the U.S. Treasury yield curve, credit information and an estimate of future cash flows. During fiscal 2025, certain changes in the inputs did impact the fair value of the available-for-sale security. The calculated fair value is based on estimates that are subjective in nature and involve uncertainties and matters of significant judgment and, therefore, cannot be determined with precision. Changes in assumptions could significantly affect the estimates. Specifically, significant increases (decreases) in the discount rate—derived from the yield curve and credit information—in isolation would result in a significantly lower (higher) fair value measurement, while a significant increase (decrease) in estimated future cash flows would result in a higher (lower) fair value measurement.

The amortized cost and fair value of the Company’s money market account and available-for-sale security along with the corresponding amount of gross unrealized gains and losses recognized in accumulated other comprehensive income are as follows.

Cost or Gross Gross

Amortized Unrealized Unrealized Estimated

Cost Gains Losses Fair Value

(in thousands)

Level 1 security:

Level 3 security:

DULUTH HOLDINGS INC.

Notes to Consolidated Financial Statements

Cost or Gross Gross

Amortized Unrealized Unrealized Estimated

Cost Gains Losses Fair Value

(in thousands)

Level 1 security:

Money market funds $ — $ — $ — $ —

Level 3 security:

The following table presents a reconciliation of the beginning and ending balances of the Company's corporate trust security measured at fair value on a recurring basis using significant unobservable inputs (Level 3) :

(in thousands)

Corporate trust - (Level 3)

Total gains (losses) included in OCI (Change in value) $ 491 $ (295 )

Significant Unobservable Inputs February 1, 2026 February 2, 2025

Weighted Average Discount Rate 4.43% 4.73%

Future Cash Flows (in thousands) $ 7,030 $ 7,510

The Company does not intend to sell the available-for-sale-security in the near term and does not believe that it will be required to sell the security. The Company reviews its security on a quarterly basis to monitor its exposure to other-than-temporary impairment.

No other-than-temporary impairment was recorded in the Consolidated Statements of Operations in fiscal 2025 or fiscal 2024.

The following table presents the future receipts related to the Company’s available-for-sale security by contractual maturity as of February 1, 2026.

Amortized Estimated

Cost Fair Value

(in thousands)

After one year through five years 1,563 1,417

After five years through ten years 2,308 2,161

The carrying values and fair values of other financial instruments in the Consolidated Balance Sheets are as follows:

(in thousands) Carrying Amount Fair Value Carrying Amount Fair Value

DULUTH HOLDINGS INC.

Notes to Consolidated Financial Statements

The above long-term debt, including the short-term portion is attributable to the consolidation of TRI in accordance with ASC Topic 810, Consolidation. The fair value was also based on a discounted cash flow method (Level 3) based on credit information and an estimate of future cash flows.

3. LEASES

Based on the criteria set forth in ASC Topic 842, Leases (“ASC 842”), the Company recognizes ROU assets and lease liabilities related to leases on the Company’s Consolidated Balance Sheets. The Company determines if an arrangement is, or contains, a lease at inception. ROU assets represent the right to use an underlying asset for the lease term and lease liabilities reflect the obligation to make lease payments arising from the lease. At any given time during the lease term, the lease liability represents the present value of the remaining lease payments and the ROU asset is measured at the amount of the lease liability, adjusted for pre-paid rent, unamortized initial direct costs and the remaining balance of lease incentives received. Both the lease ROU asset and liability are reduced to zero at the end of the lease.

The Company leases retail space under non-cancelable lease agreements, which expire on various dates through 2041. Substantially all of these arrangements are store leases. Store leases generally have initial lease terms ranging from five years to fifteen years with renewal options and rent escalation provisions. At the commencement of a lease, the Company includes only the initial lease term as the option to extend is not reasonably certain. The Company does not record leases with a lease term of 12 months or less on the Company’s Consolidated Balance Sheets.

When calculating the lease liability on a discounted basis, the Company applies its estimated discount rate. The Company bases this discount rate on a collateralized interest rate as well as publicly available data for instruments with similar characteristics.

In addition to rent payments, leases for retail space contain payments for real estate taxes, insurance costs, common area maintenance, and utilities that are not fixed. The Company accounts for these costs as variable lease expenses and does not include such costs as a lease component.

The expense components of the Company’s leases reflected on the Company’s Consolidated Statement of Operations were as follows:

Consolidated Statement of Operations February 1, 2026 February 2, 2025

(in thousands)

Finance lease expense

Interest on lease liabilities Interest expense 1,430 1,564

Total finance lease expense $ 4,319 $ 4,661

DULUTH HOLDINGS INC.

Notes to Consolidated Financial Statements

Other information related to leases were as follows:

(in thousands)

Cash paid for amounts included in the measurement of lease liabilities:

Financing cash flows from finance leases $ 2,541 $ 2,721

Operating cash flows from finance leases $ 1,430 $ 1,564

Operating cash flows from operating leases $ 19,954 $ 21,030

Right-of-use assets obtained in exchange for lease liabilities:

Finance leases $ — $ —

Weighted-average remaining lease term (in years):

Finance leases 9 10

Operating leases 6 7

Weighted-average discount rate:

Finance leases 4.5 % 4.5 %

Operating leases 4.7 % 4.4 %

Future minimum lease payments under the non-cancellable leases are as follows as of February 1, 2026:

Finance Operating

Fiscal year Leases Leases

(in thousands)

Total rent expense under non-cancellable leases was $21.0 million and $21.9 million for fiscal 2025 and fiscal 2024, respectively.

4. DEBT AND CREDIT AGREEMENT

Debt consists of the following:

(in thousands)

TRI Holdings, LLC

TRI entered into a senior secured note (“TRI Senior Secured Note”) with an original balance of $26.7 million. The TRI Senior Secured Note is scheduled to mature on October 15, 2038 and requires installment payments with an interest rate of 4.95%. See Note 6 “Variable Interest Entities” for further information.

DULUTH HOLDINGS INC.

Notes to Consolidated Financial Statements

TRI entered into a promissory note (“TRI Note”) with an original balance of $3.5 million. The TRI Note is scheduled to mature in November 2038 and requires annual interest payments at a rate of 3.05%, with a final balloon payment due in November 2038.

While the above notes are consolidated in accordance with ASC Topic 810, Consolidation, the Company is not the guarantor nor the obligor of these notes.

Future principal maturities of all TRI debt, excluding unamortized financing fees of $0.9 million associated with the TRI debt are as follows as of February 1, 2026:

Fiscal year

(in thousands)

Credit Agreement

On May 14, 2021, the Company terminated its prior credit agreement, and entered into a credit agreement (the “Credit Agreement”), which was treated as a modification for accounting purposes. The Credit Agreement originally matured on May 14, 2026 and provided for borrowings of up to $150.0 million that were available under a revolving senior credit facility, with a $5.0 million sublimit for issuance of standby letters of credit, as well as a $10.0 million sublimit for swing line loans. At the Company’s option, the interest rate applicable to the revolving senior credit facility was a floating rate equal to: (i) the Bloomberg Short-Term Bank Yield Index rate (“BSBY”) plus the applicable rate of 1.25% to 2.00% determined based on the Company’s rent adjusted leverage ratio, or (ii) the base rate plus the applicable rate of 0.25% to 1.00% based on the Company’s rent adjusted leverage ratio. The Credit Agreement was secured by essentially all Company assets and required the Company to maintain compliance with certain financial and non-financial covenants, including a maximum rent adjusted leverage ratio and a minimum fixed charge coverage ratio as defined in the Credit Agreement.

On January 31, 2025, the Company entered into the Second Amendment to the Credit Agreement (the “Second Amendment”), which was treated as an extinguishment for accounting purposes. The Second Amendment amends the Credit Agreement in order to (i) decrease the revolving commitment from $200.0 million to $100.0 million (ii) revise the definition of “Applicable Rate” to provide for pricing terms in the event of a Rent Adjusted Leverage Ratio greater than or equal to 3.50:1.0; (iii) limit the exceptions to the prohibition on restricted payments to (a) making dividends or distributions by any subsidiary to the Company, and (b) the acquisition of equity interests in satisfaction of tax withholding obligations associated with restricted stock or awards under employee incentive plans; and (iv) provide that the Maximum Rent Adjusted Leverage Ratio and the Minimum Fixed Charge Coverage Ratio would be measured commencing on the fiscal quarter ending May 2, 2021 and measured quarterly thereafter as of the last day of each fiscal quarter of the Company (other than for the fiscal quarter ending February 2, 2025).

DULUTH HOLDINGS INC.

Notes to Consolidated Financial Statements

outstanding principal amount from the applicable borrowing date at a rate per annum equal to the base rate plus the applicable margin; and (iv) each other obligation will bear interest on the unpaid amount at a rate per annum equal to the base rate plus the applicable margin.

On October 1, 2025, the Company entered into the Second Amendment to the New Credit Agreement, which, among other things, (i) temporarily increased the aggregate revolving credit commitment under the Credit Agreement from $100.0 million to $125.0 million, as allowed by the existing New Credit Agreement, beginning on October 1, 2025 until March 31, 2026, as of which date the revolving credit commitment returned to $100.0 million and (ii) permits the Company to request a second increase in the revolving credit commitment of $25.0 million during the term of the New Credit Agreement after March 31, 2026 with the consent of the Administrative Agent, subject to credit approval of the Lenders and satisfaction of certain conditions.

DULUTH HOLDINGS INC.

Notes to Consolidated Financial Statements

5. ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

Accrued expenses and other current liabilities consist of the following:

(in thousands)

Unpaid purchases of property & equipment 1,775 1,264

Total accrued expenses and other current liabilities $ 39,693 $ 35,684

6. VARIABLE INTEREST ENTITIES

Based upon the criteria set forth in ASC 810, Consolidation, the Company consolidates variable interest entities (“VIEs”) in which it has a controlling financial interest and is therefore deemed the primary beneficiary. A controlling financial interest will have both of the following characteristics: (a) the power to direct the VIE activities that most significantly impact economic performance; and (b) the obligation to absorb the VIE losses and the right to receive benefits that are significant to the VIE. The Company has determined that it was the primary beneficiary of one VIE as of February 1, 2026 and February 2, 2025.

The Company leases the Company’s headquarters in Mt. Horeb, Wisconsin from TRI. In conjunction with the lease, the Company originally invested $6.3 million in a trust that loaned funds to TRI for the construction of the Company’s headquarters. TRI is a Wisconsin limited liability company whose primary purpose and activity is to own this real property. The Company considers itself the primary beneficiary for TRI as the Company has both the power to direct the activities that most significantly impact the entity’s economic performance and is expected to receive benefits that are significant to TRI. As the Company is the primary beneficiary, it consolidates TRI and the lease is eliminated in consolidation. The Company does not consolidate the trust as the Company is not the primary beneficiary.

The Consolidated Balance Sheets include the following amounts as a result of the consolidation of TRI as of February 1, 2026 and February 2, 2025.

(in thousands)

Other current liabilities $ 211 $ 115

Current maturities of TRI long-term debt 1,020 931

Noncontrolling interest in VIE (2,858 ) (2,997 )

Total liabilities and shareholders' equity $ 21,710 $ 22,332

While the Balance Sheet is consolidated in accordance with ASC Topic 810, Consolidation, the Company is not the guarantor nor the obligor of the TRI debt.

DULUTH HOLDINGS INC.

Notes to Consolidated Financial Statements

7. EARNINGS PER SHARE

Earnings per share is computed under the provisions of ASC 260, Earnings Per Share. Basic earnings per share is based on the weighted average number of common shares outstanding for the period. Diluted earnings per share is based on the weighted average number of common shares plus the effect of dilutive potential common shares outstanding during the period using the treasury stock method. Dilutive potential common shares include outstanding restricted stock and are considered only for dilutive earnings per share. The reconciliation of the numerator and denominator of the basic and diluted earnings per share calculation is as follows:

Fiscal Year Ended

(in thousands, except per share data)

Denominator - weighted average shares (Class A and Class B)

Dilutive shares — —

Earnings per share (Class A and Class B)

The computation of diluted loss per share excluded 0.6 million and 0.1 million shares of unvested restricted stock for the fiscal years ended February 1, 2026 and February 2, 2025, respectively, because their inclusion would be anti-dilutive due to a net loss.

8. REVENUE

The Company’s revenue primarily consists of the sale of apparel, footwear and hard goods. Revenue for merchandise that is shipped to our customers from our fulfillment centers and stores is recognized upon shipment. Store revenue is recognized at the point of sale, net of returns, and excludes taxes. Shipping and processing revenue generated from customer orders are included as a component of net sales and shipping and processing expense, including handling expense, is included as a component of selling, general and administrative expenses. Sales tax collected from customers and remitted to taxing authorities is excluded from revenue and is included in accrued expenses.

Sales disaggregated based upon sales channel is presented below.

Contract Assets and Liabilities

The Company’s contract assets primarily consist of the right of return for amounts of inventory to be returned that are expected to be resold and are recorded in Prepaid expenses and other current assets on the Company’s Consolidated Balance Sheets. The Company’s contract liabilities primarily consist of gift card liabilities and are recorded upon issuance in Accrued expenses and other current liabilities under deferred revenue (see Note 5 “Accrued Expenses and Other Current Liabilities”) on the Company’s Consolidated Balance Sheets. Upon issuance of a gift card, a liability is established for its cash value.

Contract assets and liabilities on the Company’s Consolidated Balance Sheets are presented in the following table:

(in thousands)

DULUTH HOLDINGS INC.

Notes to Consolidated Financial Statements

Revenue from gift cards is recognized when the gift card is redeemed by the customer for merchandise, or as gift card breakage, an estimate of gift cards which will not be redeemed. The Company does not record breakage revenue when escheat liability to the relevant jurisdictions exists. Gift card breakage is recorded within Net sales on the Company’s Consolidated Statement of Operations. The following table provides the reconciliation of the contract liability related to gift cards:

(in thousands)

Balance as of Beginning of Period $ 9,782 $ 9,579

Balance as of End of Period $ 9,192 $ 9,782

9. INCOME TAXES

The Company has adopted Accounting Standards Update (“ASU”) 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures,” on a prospective basis for the year ended February 1, 2026. See Note 2. “Summary of Significant Accounting Policies - Income Taxes,” of these Notes to the Consolidated Financial Statements for additional details on the adoption of ASU 2023-09.

The Company’s provision for income taxes consists of the following:

(in thousands)

Income tax expense / (benefit) from continuing operations

Current tax expense

Federal $ (3 )

State and local 262

Total current tax expense 259

Deferred tax expense

State and local (141 )

Total deferred tax expense (benefit) 926

Total income tax expense

State and local 121

Total income tax expense $ 1,185

As previously disclosed for the year ended February 2, 2025, prior to the adoption of ASU 2023-09, the Company's provision for income taxes consisted of the following:

(in thousands)

Income tax expense / (benefit) from continuing operations

Current:

Federal $ 1

Total current tax expense 427

Deferred:

Total deferred tax expense 1,943

Total income tax expense $ 2,370

DULUTH HOLDINGS INC.

Notes to Consolidated Financial Statements

A reconciliation of the U.S. federal statutory tax rate to the effective tax rate for the year ended February 1, 2026 is as follows:

(in thousands) Amount Percent

Tax provision at the U.S. federal statutory rate (3,192 ) 21.0 %

Federal

Tax Credits

Research and Development Credit (191 ) 1.3 %

Changes in valuation allowances 4,109 (27.0 ) %

Nontaxable or nondeductible items

Share -based compensation benefit 421 (2.8 ) %

Nondeductible U.S. compensation expense (117 ) 0.8 %

State and local income tax, net of federal income tax benefit* 76 (0.5 ) %

Changes in unrecognized tax benefits (16 ) 0.1 %

Income tax expense $ 1,185 (7.8 ) %

As previously disclosed for the year ended February 2, 2025, prior to the adoption of ASU 2023-09, the effective income tax rate differs from the statutory federal income tax rate as follows:

(in thousands) Amount Percent

Federal taxes at statutory rate $ (8,672 ) 21.0 %

State and local income taxes, net of federal benefit (1,333 ) 3.2 %

Stock compensation price difference 638 (1.6 ) %

Research and development tax credits (120 ) 0.3 %

Nondeductible compensation (160 ) 0.4 %

Adjustments to uncertain tax positions (4 ) — %

Total income tax expense $ 2,370 (5.8 ) %

DULUTH HOLDINGS INC.

Notes to Consolidated Financial Statements

The amount of cash taxes paid by the Company for fiscal year ending February 1, 2026 is as follows:

(in thousands)

U.S federal $ -

U.S. state

Kentucky $ 15

Minnesota 12

North Carolina 10

Tennessee 15

Total U.S. state and local 170

DLTH US Equity

DLTH · 10-K · period ended 2026-02-01

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

DLTH US Equity☆

DLTH · 10-K · period ended 2026-02-01

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

DLTH US Equity