For the first quarter, North American net sales were $155.6 million, an increase of 3.9% from fiscal 2025. Other international net sales, which consists of Europe and Australia, were $37.8 million, up 9.1% from last year. Excluding the impact of foreign currency translation, North American net sales increased 3.7% and other international net sales were down 0.1% year over year. Comparable sales for North America were up 4.4%, marking the ninth consecutive quarter of comparable sales growth in this region.

Other international comparable sales increased 2.2% in the first quarter, representing a significant improvement from recent quarters and reflecting the traction we're gaining with our strategic initiatives in Europe. From a category perspective, men's was our largest positive comping category, followed by hard goods, women's and accessories. Footwear was our only negative comping category. The consolidated increase in comparable sales was driven by an increase in dollars per transaction partially offset by a decrease in transactions.

Dollars per transaction were up for the quarter driven by an increase in average unit retail and an increase in units per transaction. First quarter gross Profit increased to $61.3 million compared to $55.3 million in the first quarter of last year. Gross margin was 31.7% of sales for the quarter compared with 30% in the first quarter of fiscal 2025. The 170 basis point increase in gross margin was primarily driven by 70 basis points increase in product margin, 50 basis points of leverage in store occupancy costs, 30 basis points of benefit in web shipping costs, and 20 basis points of benefit from decreased inventory shrinkage.

SGA expense in the first quarter of fiscal 2026 was $76.5 million or 39.6% of net sales compared with $75.2 million or 40.8% of net sales in fiscal 2025. 120 basis point improvement in SGA as a percentage of net sales was driven by 150 basis points related to a one time 2.9 million litigation settlement that occurred in the first quarter of fiscal 2025. 50 basis points of efficiency in store wages, 40 basis points in non wage store operating cost leverage partially offset by 70 basis points detriment from vendor credits received in the first quarter of 2025, 20 basis points increase in non store wages and 20 basis points of increase in other corporate

costs. Operating loss in the first quarter was $15.2 million or 7.9% of net sales compared to prior year operating loss of $19.9 million or 10.8% net sales. This represents a 290 basis point improvement in operating margin. Net loss for the first quarter was $13.3 million or $0.82 per share. In the year ago period we reported a net loss of $14.3 million or $0.79 per share. As a reminder, the prior year first quarter included the 2.9 million legal settlement which negatively impacted earnings per share by approximately $0.13 as well as 3.4 million favorable charges to the foreign exchange valuation and interest income items that did not Repeat

in the first quarter of 2026. Our effective tax rate for the current quarter was 8.2% versus 9.1% a year ago. Lastly, due to our repurchase activity over the past 12 months. Our share count is down approximately 11% since the first quarter last year, which will positively benefit full year EPS but is a headwind in quarters where we record a loss. Turning to the balance sheet, the business ended the quarter in a strong financial position. We had cash and current marketable securities of $124.2 million as of May 2, 2026, up from $101 million as of May 3, 2025.

The increase in cash and current marketable securities from the first quarter of last year was primarily driven by $47.5 million in cash flow from operations and the release of $3 million in restricted cash, partially offset by $19 million in share repurchases and $10.5 million of capital expenditures as of May 2, 2026. We have no debt on the balance sheet and we continue to maintain our full $25 million unused credit facility. During the first quarter, we repurchased 0.3 million shares at a total cost of $6.2 million.

Under the authorization approved by the Board of directors on March 11, 2026, we ended the quarter with $153.2 million in inventory, up 2.2% compared with $149.9 million last year. On a constant currency basis, our inventory levels were up 0.7% from last year. We feel good about our current inventory position and the quality of our inventory on hand. Now to our May sales results. Net sales for the four week period ended May 30, 2026 increased 0.1% compared to the four week period ended May 31.

Comparable sales for the period decreased 0.1% for the comparable period in the prior year. From a regional perspective, North America net sales for the four weeks ended May 30, 2026 decreased 1.9% compared to the four week period ended May 31, 2025 while our other international business increased 10.7%. Excluding the impact of foreign currency translation, North America net sales for the period decreased 2% from the prior year while other international net sales increased 5.3% compared to 2025.

Comparable sales for North America decreased 1.5% during the period while comparable sales for our other International business increased 7.2%. From a category perspective, quarter to date, men's was our largest positive comping category followed by accessories, women's and hard goods Footwear was earned negative comping category. The consolidated increase in comparable sales was driven by an increase in dollars per transaction, partially offset by a decrease in transactions.

This is particularly true in the current environment where we're seeing increased pressure on consumer discretionary spending. While our business continued to perform well in Q1, we are taking a measured approach to our outlook. Given the evolving macroeconomic pressures we observed building as the first quarter progressed and continuing into May, we believe it's prudent to look forward with an appropriate level of conservatism. Given these consumer headwinds, we are anticipating total sales to be between $210 million and $215 million for the 13 weeks ended August 1, 2026, representing growth of negative 2% to positive 0.5% compared to the prior

year. Comparable sales for the same time period are expected to be consistent with the overall sales trend for the second quarter. We are expecting product margin to be down slightly to up slightly from the second quarter of last year. Consolidated operating income for the second quarter is expected to be between negative 1.5% of sales and breakeven. We anticipate earnings per share will be between a loss of $0.23 and $0.08 compared to a loss of $0.06 in the prior year.

Regarding our full year fiscal 2026 outlook, as we discussed in our fourth quarter fiscal 2025 earnings call, we remain confident in our strategy and execution. However, with the increased consumer pressures we're observing, we believe appropriate caution is warranted. We will refrain from providing specific full year earnings guidance at this time, but we'll provide some context around how we see the business trending throughout the year. With the momentum we've built over eight consecutive quarters of positive comparable sales, we believe we can grow total sales for the year inclusive of the negative impact of closed stores worth approximately

12 million in sales. This directional guidance is inclusive of our softer starts, the second quarter, the difficult macro environment and an assumption the back half of the year is down slightly from our original expectations. We believe we will continue to grow product margin year over year in fiscal 2026 through steady improvements in North America and continued pricing discipline and full price selling in our international entities. Our private label business, now at over 30% of sales, will continue to be an important driver of margin expansion.

In addition to product margin growth, we believe further leverage exists that will drive modest growth margin expansion for the year. With anticipated sales growth, we expect to generate some leverage of our SGA costs. Further contributing to operating margin expansion through this will be dependent on the pace of sales growth throughout the year. With the previously mentioned assumptions and barring significant deterioration in the consumer environment, we continue to anticipate operating margin growth in the 50 to 100 basis point range in fiscal 2026 as we outlined on our fourth quarter call.

While effective tax rates will fluctuate by quarter, we anticipate that our full year effective tax rate will be roughly 40 to 45% in fiscal 2026 compared to an effective tax rate of 44.4% in fiscal 2025. We are planning to open five new stores in fiscal 2026, all within the U.S. we plan to close approximately 26 stores during fiscal 2026, including 20 in North America and six internationally. We expect our capital expenditures for fiscal 2026 to be between $14 million and $16 million compared to $11 million in the prior year.

We expect that depreciation and amortization, excluding non cash lease expense will be approximately $19.1 million, down from $21.3 million in fiscal 2025. We are currently projecting our diluted share count for the full year to be approximately 16.9 million shares. The share count does not include the impact of any potential share repurchases after May 2, 2026 under the $40 million repurchase program approved by the Board on March 11, 2026. We will continue to monitor the consumer environment closely and provide updates as we progress through the year.

Yes, thanks for taking my questions. I guess to start on the 2Q guide, Chris, I think you said that same store sales is basically in line with your projected sales growth. Is there any way you can maybe kind of parse that out between North America and other international what kind of underlying comps are you expecting for those regions in the quarter? Sure, and I'll just kind of back up a little bit and talk about the overall guide and then make sure I cover that.

Mitch, obviously, as we've laid out today, this is below, I think, what the expectations were out there and our own expectations, obviously, as we look at Q2 for the last couple years, I will tell you it's been a really challenging quarter for us to guide. If we look back on 2024 and 2025, we have just seen the slow start to Q2 highlighted by pretty strong closes, and then really phenomenal back to schools. I mean, if we look back to 2024, May was down 0.2%, June was up 2.4%, July was up 7.6%.

We ended up right around 3.6% comp for the quarter, and then we were up 12.3 in August. If I look at last year, we started May at 1.4%, June was 1.5%, July was 4.3, 2.5% for the quarter, and then we were up 11.4% back to school. So, you know, as we approach this guide and our Q2, I mean, we took our normal approach of kind of looking at the trend lines of the business and trying to think about some forward looking estimates, you know, obviously based on how the categories are performing, which we're pretty happy with, really.

All categories up except for footwear. We thought through kind of the newness that we're bringing to the market and then the comparable metrics from the prior year. So that kind of put us at the guide you'd laid out, which is sales growth of negative 2 to 5. We believe the comp growth is going to play right around in that same spot. The reason that is is because we are assuming a total comp growth of 0.5%. Our closed stores are worth about 0.5% in the quarter and then FX is a positive 0.5%.

Now, obviously, you know, our goal is to, you know, beat our guidance. You know, we've run eight positive quarters of comps now across our consolidated business. We've run nine positive quarters of comp across our North America business. You know, as Rick laid out in his commentary, we really believe in kind of the progress we're making in Europe. That said, we know our consumer is pushed right now in regards to discretionary income and things are just tighter.

And just to be clear, the expected improvement in the US really hinges on back to school, I assume. And can you say, you know, what, what percent of the quarter is back to school? I assume you're kind of thinking the last two weeks of July. But what is that, you know, what is that as a percentage of the quarter? Yeah, I mean we have 75% of the way to go and as we think about kind of the sales and the mix, you know, those last couple weeks, it's going to keep building all the way through.

Okay. And then I think, I can't remember if it was your prepared remarks or Rick's, but there was a comment that I think it was yours, Chris, that you now are assuming that the back half is worse than your prior expectations. Can you just elaborate on that and can you kind of say how much worse? Because I think previously on the year you were seeing the sales be up low single digits and you're still expecting positive sales growth for the year. It seems like there's a pretty fine line between those two assumptions.

Yeah, yeah. I think that your call out from the script is appropriate and kind of how we're thinking through things. You know, when we put the full year thoughts, obviously not total guidance here together in March, what we talked about was sales growth in the low single digit range. And that was inclusive of the closures that had out there, which we've identified of about $12 million. And in all transparency that would have put us right about at that 3% level.

Obviously this quarter guide is below where our expectations are and in reformulating our thoughts and seeing some of the softness we saw during Q1 and to start this quarter, if we kind of keep that same trajectory, we took some dollars out of the back half as well, but still ended up with a sales gain. And I think that's the important piece we're driving to. I think what's unique about our business here, especially as we look at the last two years of our recovery, is kind of what I laid out in your previous question of, you know, we've done okay in these off cycles, we've done really well and back to school and done pretty well in holidays.

Let me ask one last one. As far as the Middle east conflict is concerned and the related inflationary pressures, are you seeing a big, bigger impact on the consumer in the US or in Europe? I mean, you're from a top line standpoint, your European numbers seem to be better, but it would seem like maybe that consumer was more pressured. But what are your thoughts there? Yeah, it's a really good call out and it's one. Obviously we're spending a lot of thinking too, because if you look at the more macro data, the European customer definitely seems more challenged.

Right, right. And that would be our assumption as well. Mitch. I think what's hard with retail, and obviously this given point in time would add to this, is there's not always one variable that you're managing. And if you think about what we talked about in March and what we've been talking about for Europe, we've got a lot of different things going on in Europe in regards to how we're managing that business, how we're thinking about product, how we're moving to full price selling, how we've, you know, really brought new product into that business, how we're managing inventory, the teams are just doing a much stronger job.

And I think you've seen that result here now in Q4 of last year and into the first quarter of this year. So we would agree with your assessment. The consumer is looking from a macro data, more pressured in Europe than here in North America. And our European results are better. So I think that that's how we're seeing it too. I think it's probably a combination of some of the other things we're doing in Europe that are hopefully kind of bucking that trend.

Even though the consumer might be more pressured there, we're performing better in Europe. I think on the North America side, our business really slowed when we started to see this conflict escalate. And so we definitely feel like there's some correlation there. We do know that we're higher price and have some discretionary elements to what we're doing. So we'll see what that means as we get to the more peak season that people have more reason to go out and buy.

Okay, good to hear. And then I think you said the private label was at 34% in Q1. Just wondering where do you go from here with private label penetration? Yeah, I think, Jeff, what we'd say with private label is we're going to go where the consumer wants us to go. Obviously there are certain parts of our mix that private label just doesn't play as deeply in. So it's not something where we look at private label taking over the entire business by any means.

But I think what you're seeing in the current private label trends and the growth we've seen there is really a testament to our teams in capturing trend right and really kind of having their pulse out there to where the customer wants to ago and maybe taking private label to like even a different approach than where we've been in historical peaks where it was maybe just more off brand cycles and people cared more about colors to the point of, you know, I think our private label has some brand appeal and people are recognizing what we're doing.

Okay. And then if we could turn to real estate for a minute. Just wondering, do you think that the net closure trend will continue into 2027? Not asking you to give guidance for 27 specifically, but just wondering kind of where, I guess what your thought process is around what's the right number of stores. Are you still a net closer going forward? Yeah. And I think in any time we're talking through closures, we just have to separate from kind of the North America versus the international market.

I think what you're going to see is two different cycles on the North America side. I mean, this is really about just kind of refining the portfolio and looking at some of the lower performing stores and moving past how they're working. And so I think we've seen kind of, we believe we've kind of gotten to the peak of closures and we'll start to see we'll still have closures in 27 and beyond, but not at the levels that we've had more recently. And I think on the international side, this is really a function of trying to make these entities profitable.

And as we've kind of laid out in our European remarks in the past, you know, we are pushing really hard to get new product and drive through the existing units and comp and make all these markets we've moved into work. But to the extent they don't, we will have to retract some. And we have some markets that are definitely tougher than others. So our intention is to continue to grow there and maximize what we have. But if things are not able to turn in some markets, you'll see us close a few more internationally.

Disclaimer: This transcript is provided for informational purposes only. While we strive for accuracy, there may be errors or omissions in this automated transcription. For official company statements and financial information, please refer to the company's SEC filings and official press releases. Corporate participants' and analysts' statements reflect their views as of the date of this call and are subject to change without notice.