Burlington Stores, Inc.

August 1, 2026

1. Summary of Significant Accounting Policies

Basis of Presentation

As of August 1, 2026, Burlington Stores, Inc., a Delaware corporation (collectively with its subsidiaries, the Company), through its indirect subsidiary Burlington Coat Factory Warehouse Corporation (BCFWC), operated 1,287 retail stores.

These unaudited Condensed Consolidated Financial Statements include the accounts of Burlington Stores, Inc. and its subsidiaries. All inter-company accounts and transactions have been eliminated in consolidation. The Condensed Consolidated Financial Statements are unaudited, but in the opinion of management reflect all adjustments (which are of a normal and recurring nature) necessary for the fair presentation of the results of operations for the interim periods presented. Certain information and note disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) have been condensed or omitted. These Condensed Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended January 31, 2026 (Fiscal 2025 10-K). The balance sheet at January 31, 2026 presented herein has been derived from the audited Consolidated Financial Statements contained in the Fiscal 2025 10-K. Because the Company’s business is seasonal in nature, the operating results for the three and six month periods ended August 1, 2026 are not necessarily indicative of results for the fiscal year. Interest income was disaggregated from the financial statement line item other income, net on the Company’s Condensed Consolidated Statement of Income beginning in the fourth quarter of Fiscal 2025. The interest income and other income, net amounts for three and six months ended August 1, 2026 were retrospectively adjusted for comparability purposes.

Accounting policies followed by the Company are described in Note 1, “Summary of Significant Accounting Policies,” included in Part II, Item 8 of the Fiscal 2025 10-K.

Fiscal Year

The Company defines its fiscal year as the 52 or 53-week period ending on the Saturday closest to January 31. Fiscal 2026 is defined as the 52-week year ending January 30, 2027, and Fiscal 2025 is defined as the 52-week year ended January 31, 2026. The second quarters of Fiscal 2026 and Fiscal 2025 each consist of 13 weeks.

Segment Reporting

The Company reports segment information in accordance with ASC Topic No. 280 “Segment Reporting,” and hasone reportable segment. The Company derives all revenue in the United States and manages its business activities on a consolidated basis.

The Company is an off-price retailer that derives revenues from customers by providing a complete line of value-priced apparel, including: women’s ready-to-wear apparel, menswear, youth apparel, baby, beauty, footwear, accessories, home, toys, gifts and coats. The Company’s chief operating decision maker (CODM) is the Chief Executive Officer of the Company.

The CODM assesses performance for the segment and decides how to allocate resources based on net income that also is reported on the Condensed Consolidated Statements of Income. The measure of segment assets is reported on the Condensed Consolidated Balance Sheets as total assets. Net income is used to monitor budget versus actual results, as well as actual results compared to the prior period. These comparisons are used in assessing performance of the segment and in establishing management’s allocation of resources. Below is an extract of certain disaggregated expense information that is regularly provided to the CODM.

(a)

The other segment expenses category includes store related costs, store payroll costs, corporate costs, marketing & strategy costs, and other store & selling expenses.

New Accounting Pronouncements

In November 2024, the FASB issued ASU 2024-04, “Debt—Debt with Conversion and Other Options (Subtopic 470-20): Induced Conversions of Convertible Debt Instruments” (ASU 2024-04), which clarifies the requirements related to accounting for the settlement of a debt instrument as an induced conversion. The Company adopted ASU 2024-04 beginning in Fiscal 2026 and applied the accounting for induced conversions to the March 2026 exchange of certain of the 2027 Convertible Notes. Refer to Note 4, "Long Term Debt" for further discussion regarding this transaction.

There were no other new accounting standards that had a material impact on the Company’s Condensed Consolidated Financial Statements and notes thereto during the three and six month periods ended August 1, 2026.

Accounting Pronouncements Not Yet Adopted

In November 2024, the FASB issued ASU 2024-03, "Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of income statement expenses" (ASU 2024-03), which requires disaggregated disclosure of income statement expenses for public business entities. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the impact of ASU 2024-03 on its disclosures in the consolidated financial statements.

In September 2025, the FASB issued ASU 2025-06, "Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40)" (ASU 2025-06), which amends certain aspects of the accounting for and disclosure of software costs under ASC 350-40. ASU 2025-06 is effective for annual reporting periods beginning after December 15, 2027, and interim reporting periods within those annual reporting periods, with early adoption permitted. The Company is currently evaluating the impact of ASU 2025-06 on its consolidated financial statements and disclosures.

In May 2026, the FASB issued ASU 2026-02, "Environmental Credits and Environmental Credit Obligations (Topic 818)" (ASU 2026-02), which introduces a comprehensive model that establishes recognition, measurement, presentation, and disclosure requirements for environmental credits and compliance obligations that may be settled by using environmental credits. ASU 2026-02 is effective for annual reporting periods beginning after December 15, 2027, and interim reporting periods within those annual reporting periods, with early adoption permitted. The Company is currently evaluating the impact of ASU 2026-02 on its consolidated financial statements and disclosures.

2. Stockholders’ Equity

Activity forthe three and six month periods ended August 1, 2026 and August 2, 2025 in the Company’s stockholders’ equity is summarized below:

3. Lease Commitments

The Company’s leases primarily consist of stores, distribution facilities and office space under operating and finance leases that will expire principally during the next 30 years. The leases typically include renewal options atfive-year intervals and escalation clauses. Lease renewals are only included in the lease liability to the extent that they are reasonably assured of being exercised. The Company’s leases typically provide for contingent rentals based on a percentage of gross sales. Contingent rentals are not included in the lease liability, and they are recognized as variable lease cost when incurred.

The following is a schedule of the Company’s future lease payments:

The above schedule excludes approximately $610.5 million for 99 stores and an additional floor at the Company’s New York buying office that the Company has committed to open, expand or relocate but has not yet taken possession of the space. The discount rates used in valuing the Company’s leases are not readily determinable, and are based on the Company’s incremental borrowing rate on a fully collateralized basis.

The following is a schedule of net lease costs for the periods indicated:

(a)

Included in the line item “Depreciation and amortization” in the Company’s Condensed Consolidated Statements of Income.

(b)

Included in the line item “Interest expense” in the Company’s Condensed Consolidated Statements of Income.

(c)

Included in the line item “Selling, general and administrative expenses” in the Company’s Condensed Consolidated Statements of Income. Variable lease cost is primarily comprised of real estate taxes, common area maintenance, insurance and percentage rent.

(d)

Gain included in line item “Other income - net” in the Company’s Condensed Consolidated Statements of Income.

(e)

Included in the line item “Other revenue” in the Company’s Condensed Consolidated Statements of Income.

(f)

Excludes an immaterial amount of short-term lease cost.

Supplemental cash flow disclosures related to leases are as follows:

(a)

Included within operating activities in the Company’s Condensed Consolidated Statements of Cash Flows.

(b)

Included within financing activities in the Company’s Condensed Consolidated Statements of Cash Flows.

4. Long Term Debt

Long term debt consists of:

(a)

On December 23, 2025, the Company purchased 178 acres of land in Buckeye, AZ. As part of the consideration for this purchase, the Company entered into a promissory note with the seller for $50.6 million, which was included in the line item "Current maturities of long-term debt and other current debt" on the Consolidated Balance Sheet in the Fiscal 2025 10-K. The promissory note had a stated interest rate ofzero percent and was repaid on the maturity date of February 9, 2026. The $50.6 million short-term promissory note is excluded from the balance as of January 31, 2026 in the table above.

Term Loan Facility

BCFWC and certain of its subsidiaries and holding companies are party to a Credit Agreement (as amended, supplemented and otherwise modified, the Term Loan Facility) that provides for term loans in an aggregate principal amount as of August 1, 2026 of $1,721.8 million maturing on September 24, 2031.

On June 11, 2025, the Company entered into an amendment to the Term Loan Facility, which among other things, incurred $500.0 million of incremental term loans under the Term Loan Credit Agreement as additional Term B-7 Loans. The incremental term loans were issued with an original issue discount of 99.0 and are otherwise on terms identical to the existing Term B-7 Loans and are fungible with the existing Term B-7 Loans.

The Term Loan Facility is collateralized by a first lien on BCFWC’s and each guarantor’s equity interests, equipment, intellectual property, and certain favorable leases and real estate, and certain related assets and proceeds thereof (subject to certain exceptions), and a second lien on BCFWC’s and each guarantor’s other assets and proceeds thereof (subject to certain exceptions).

At August 1, 2026 and August 2, 2025, the interest rate related to the Term Loan Facility was 5.5% and 6.1%, respectively.

2025 Convertible Notes

On April 16, 2020, the Company issued its 2.25% Convertible Senior Notes due 2025 (the "2025 Convertible Notes"), which matured on April 15, 2025. The 2025 Convertible Notes were general unsecured obligations of the Company and bore interest at a rate of 2.25% per year, payable semi-annually in cash, in arrears, on April 15 and October 15 of each year.

Prior to maturity, holders of the 2025 Convertible Notes submitted conversion notices with respect to approximately $155.5 million aggregate principal amount of the 2025 Convertible Notes. On the conversion settlement date, the Company paid to the converting holders the aggregate principal amount of 2025 Convertible Notes subject to conversion, and issued and delivered to such holders 57,149 shares of common stock, in respect of the remainder of its conversion obligation in excess of such aggregate principal amount. At maturity, the Company paid in cash the principal balance and related accrued and unpaid interest on the 2025 Convertible Notes not previously converted. There wasno resulting debt extinguishment charge from this transaction.

2027 Convertible Notes

On September 12, 2023, the Company closed the issuance of approximately $297.1 million aggregate principal amount of its 1.25% Convertible Senior Notes due 2027 (the "2027 Convertible Notes" and, together with the 2025 Convertible Notes, the "Convertible Notes"). The 2027 Convertible Notes bear interest at a rate of 1.25% per year, payable semi-annually in arrears on June 15 and December 15 of each year. The 2027 Convertible Notes will mature on December 15, 2027, unless earlier converted, redeemed or repurchased.

Prior to the close of business on the business day immediately preceding September 15, 2027, the 2027 Convertible Notes will be convertible at the option of the holders only upon the occurrence of certain events and during certain periods. Thereafter, the 2027 Convertible Notes will be convertible at the option of the holders at any time until the close of business on the second scheduled trading day immediately preceding the maturity date. The 2027 Convertible Notes have an initial conversion rate of 4.8560 shares per $1,000 principal amount of 2027 Convertible Notes (equivalent to an initial conversion price of approximately $205.93 per share of the Company’s common stock), subject to adjustment if certain events occur. The initial conversion price represents a conversion premium of approximately 32.50% over $155.42 per share, the last reported sale price of the Company’s common stock on September 7, 2023 on The New York Stock Exchange. Upon conversion, the Company will pay cash for the aggregate principal amount of 2027 Convertible Notes being converted, and pay (and deliver, if applicable) cash, shares of the Company’s common stock or a combination thereof, at its election, in respect of the remainder (if any) of the Company’s conversion obligation in excess of such aggregate principal amount. On or after December 20, 2025 and prior to the 21st scheduled trading day immediately preceding December 15, 2027, the Company will be able to redeem for cash all or any portion of the 2027 Convertible Notes, at its option, if the last reported sale price of the Company’s common stock is equal to or greater than 130% of the conversion price for a specified period of time, at a redemption price equal to 100% of the aggregate principal amount of the 2027 Convertible Notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date.

If the Company undergoes a fundamental change, subject to certain conditions, holders of the 2027 Convertible Notes may require the Company to repurchase for cash all or any portion of their 2027 New Convertible Notes. The fundamental change repurchase price will be 100% of the aggregate principal amount of the 2027 Convertible Notes to be repurchased plus any accrued and unpaid interest to, but excluding, the fundamental change repurchase date. The effective interest rate is 1.7%.

During the first quarter of Fiscal 2026, the Company entered into separate, privately negotiated exchange agreements with certain holders of the 2027 Convertible Notes. Under the terms of the Exchange Agreements, the holders agreed to exchange $111.0 million in aggregate principal amount of 2027 Convertible Notes held by them for a combination of an aggregate of $128.6 million in cash and 150,831 shares of the Company's common stock. These exchange transactions closed on March 19, 2026. The Company evaluated the accounting for this transaction under ASC 470‑20, “Debt—Debt with Conversion and Other Options,” as amended by ASU 2024‑04, “Clarifying the Accounting for Induced Conversions of Convertible Debt Instruments,” which was effective beginning in Fiscal 2026. These exchanges resulted in an inducement charge of $14.6 million, as well as legal and other transaction related fees of $0.7 million.

ABL Line of Credit

BCFWC and certain of its subsidiaries and holding companies are party to a Second Amended and Restated Credit Agreement (as amended, supplemented and otherwise modified, the ABL Line of Credit) that provides for $1,000.0 million of revolving commitments (subject to a borrowing base limitation) maturing on July 25, 2030, and, subject to the satisfaction of certain conditions, BCFWC can increase the aggregate amount of commitments up to an amount not to exceed the sum of (i) the greater of (x) $300.0 million and (y) the amount by which the Borrowing Base exceeds the aggregate Commitments, plus (iii) the amount of all permanent reductions in commitments after July 25, 2025. The interest rate margin applicable under the ABL Line of Credit is 1.125% to 1.375% in the case of a daily SOFR rate or a term SOFR rate, and 0.125% to 0.375% in the case of a prime rate, depending on the average daily availability of the lesser of (a) the total commitments or (b) the borrowing base. The ABL Line of Credit is collateralized by a first priority lien on BCFWC’s and each guarantor's inventory, receivables, bank accounts, and certain related assets and proceeds thereof (subject to certain exceptions), and a second priority lien on BCFWC’s and each guarantor's other assets and proceeds thereof (other than real estate and subject to certain exceptions).

On July 25, 2025, the Company entered into an amendment to the ABL Line of Credit in order to, among other things, (i) increase the aggregate principal amount of the commitments from $900.0 million to $1,000.0 million and (ii) extend the maturity date of the commitments and loans from December 22, 2026 to July 25, 2030.

On August 2, 2025, the Company had $945.7 million available under the ABL Line of Credit. Average borrowings during thethree and six months ended August 2, 2025 amounted to $57.1 million and $40.4 million, respectively, at an average interest rate of 5.5% for both periods.

On August 1, 2026, the Company had $942.0 million available under the ABL Line of Credit. There wereno borrowings under the ABL Line of Credit during the three and six months ended August 1, 2026.

5. Derivative Instruments and Hedging Activities

The Company accounts for derivatives and hedging activities in accordance with ASC 815, “Derivatives and Hedging” (ASC 815). As required by ASC 815, the Company records all derivatives on the balance sheet at fair value and adjusts to market on a quarterly basis. In addition, to comply with the provisions of ASC 820, “Fair Value Measurements” (ASC 820), credit valuation adjustments, which consider the impact of any credit enhancements to the contracts, are incorporated in the fair values to account for potential nonperformance risk. In adjusting the fair value of its derivative contracts for the effect of nonperformance risk, the Company has considered any applicable credit enhancements such as collateral postings, thresholds, mutual puts, and guarantees. In accordance with ASC 820, the Company made an accounting policy election to measure the credit risk of its derivative financial instruments that are subject to master netting agreements on a net basis by counterparty portfolio. The Company classifies its derivative valuations in Level 2 of the fair value hierarchy.

On September 27, 2024, the Company terminated the previous $450.0 million interest rate swap, and entered into a new interest rate swap in the notional amount of $500.0 million with a blended interest rate of 2.83%. On this same date, the Company also entered into a new interest rate swap for $300.0 million with an interest rate of 3.37%. These interest rate swap agreements are designated as cash flow hedges.

On June 12, 2025, the Company entered into an interest rate swap agreement with a notional amount of $200.0 million and a fixed interest rate of 3.76%. On the same date, the Company also entered into an interest rate swap agreement with a notional amount of $100.0 million and a fixed interest rate of 3.73%. These interest rate swap agreements are designated as cash flow hedges.

Cash Flow Hedges of Interest Rate Risk

The Company’s objectives in using interest rate derivatives are to add stability to interest expense and to manage its exposure to interest rate movements. To accomplish these objectives, the Company primarily uses interest rate swaps as part of its interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of variable-rate amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount.

As of August 1, 2026, the Company had the following outstanding interest rate derivatives that were designated as cash flow hedges of interest rate risk:

Tabular Disclosure

The table below presents the fair value of the Company’s derivative financial instruments on a gross basis as well as their classification on the Company’s Condensed Consolidated Balance Sheets:

The following table presents the unrealized gains and losses deferred to accumulated other comprehensive income resulting from the Company’s derivative financial instruments for each of the reporting periods:

The following table presents information about the reclassification of gains and losses from accumulated other comprehensive income into earnings related to the Company’s derivative instruments for each of the reporting periods:

The Company estimates that approximately $14.2 million will be reclassified from accumulated other comprehensive income as a reduction to interest expense during the next twelve months.

6. Fair Value Measurements

The Company accounts for fair value measurements in accordance with ASC 820, which defines fair value, establishes a framework for measurement and expands disclosure about fair value measurements. 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 (exit price), and classifies the inputs used to measure fair value into the following hierarchy:

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

Level 2: Quoted market prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value drivers are observable.

Level 3: Pricing inputs that are unobservable for the assets and liabilities and include situations where there is little, if any, market activity for the assets and liabilities.

The inputs into the determination of fair value require significant management judgment or estimation.

The carrying amounts of cash equivalents, accounts receivable and accounts payable approximate fair value due to the short-term nature of these instruments.

Refer to Note 5, “Derivative Instruments and Hedging Activities,” for further discussion regarding the fair value of the Company’s interest rate swap contracts.

Financial Assets

The fair values of the Company’s financial assets and the hierarchy of the level of inputs as of August 1, 2026, January 31, 2026 and August 2, 2025 are summarized below:

Long-lived assets are measured at fair value on a non-recurring basis for purposes of calculating impairment using the fair value hierarchy of ASC 820. The fair value of the Company’s long-lived assets is calculated using a discounted cash-flow model that uses level 3 inputs. In calculating future cash flows, the Company makes estimates regarding future operating results and market rent rates, based on its experience and knowledge of market factors in which the retail location is located.

Impairment charges on long-lived assets were $3.6 million during thethree month period ended August 1, 2026, primarily related to unrecoverable store assets at underperforming stores and impairment of assets held-for-sale. Impairment charges on long-lived assets were $1.6 million during thethree month period ended August 2, 2025, related to unrecoverable assets at underperforming stores.

Impairment charges on long-lived assets were $4.4 million duringthe six month period ended August 1, 2026, primarily related to unrecoverable store assets at underperforming stores and impairment of assets held-for-sale. Impairment charges on long-lived assets were $2.1 million duringthe six month period ended August 2, 2025, related to unrecoverable assets at underperforming stores. During the six month period ended August 1, 2026 and the six month period ended August 2, 2025, the assets impaired had a remaining carrying value after impairments of $24.2 million and $18.4 million, respectively.

Financial Liabilities

The fair values of the Company’s financial liabilities are summarized below:

(a)

To the extent the Company has any outstanding borrowings under the ABL Line of Credit, the fair value would approximate its reported value, because the interest rate is variable and reflects current market rates, due to its short term nature.

(b)

The table above excludes finance lease obligations, debt discount and deferred debt costs.

The fair values presented herein are based on pertinent information available to management as of the respective period end dates. The estimated fair values of the Company’s debt are classified as Level 2 in the fair value hierarchy, and are based on current market quotes received from inactive markets.

7. Income Taxes

Income tax expense was $57.8 million during the second quarter of Fiscal 2026 compared with $33.1 million duringthe second quarter of Fiscal 2025. The effective tax rate for the second quarter of Fiscal 2026 was 23.9% compared with 26.0% duringthe second quarter of Fiscal 2025. The increase in income tax expense is due to higher pre-tax income. The lower effective tax rate is primarily driven by the purchase of federal energy tax credits.

Income tax expense was $85.7 million duringthe six month period ended August 1, 2026 compared with $65.2 million duringthe six month period ended August 2, 2025. The effective tax rate for the six month period ended August 1, 2026 was 22.3% compared with 25.0% duringthe six month period ended August 2, 2025. The increase in income tax expense is due to higher pre-tax income. The lower effective tax rate is mainly driven by the tax benefit from stock-based compensation and purchase of federal energy tax credits.

Net deferred taxes are as follows:

Net deferred tax assets relate to Puerto Rico deferred balances that have a future net benefit for tax purposes. Net deferred tax liabilities primarily relate to intangible assets and depreciation expense where the Company has a future obligation for tax purposes.

As of August 1, 2026, the Company had a $3.0 million deferred tax asset related to net operating losses, which relates to state net operating losses that expire at various dates between 2036 and 2040.

As of August 1, 2026, the Company has tax credit carry-forwards totaling $10.9 million, inclusive of $10.6 million in foreign tax credits which will begin to expire in Fiscal 2033 and $0.3 million of state tax credit carry-forwards that have an indefinite life.

As of August 1, 2026, January 31, 2026 and August 2, 2025, valuation allowances totaled $10.7 million, $8.4 million and $9.8 million, respectively. These valuation allowances relate to foreign tax credit carry-forwards and state tax credit carry-forwards. The Company believes it is more likely than not that this portion of the deferred tax assets will not be realized.

8. Capital Stock

Treasury Stock

The Company accounts for treasury stock under the cost method.

Shares Used to Satisfy Tax Withholding

During the six month period ended August 1, 2026, the Company acquired 172,566 shares of common stock from employees for approximately $54.9 million to satisfy their minimum statutory tax withholdings related to the vesting of restricted stock unit awards, which was recorded in the line item “Treasury stock, at cost” on the Company’s Condensed Consolidated Balance Sheets, and the line item “Purchase of treasury shares” on the Company’s Condensed Consolidated Statements of Cash Flows.

Share Repurchase Program

On May 20, 2025, the Company's Board of Directors authorized the repurchase of up to an additional $500.0 million of common stock, which is authorized to be executed through May 20, 2027.

During the six month period ended August 1, 2026, the Company repurchased 528,185 shares of common stock for $167.4 million under its repurchase programs, which was recorded in the line item “Treasury stock, at cost” on the Company’s Condensed Consolidated Balance Sheets, and the line item “Purchase of treasury shares” on the Company’s Condensed Consolidated Statements of Cash Flows. As of August 1, 2026, the Company had $217.6 million remaining under its share repurchase authorizations.

9. Net Income Per Share

Basicnet income per share is calculated by dividing net income by the weighted-average number of common shares outstanding. Diluted net income per share is calculated by dividing net income by the weighted-average number of common shares and potentially dilutive securities outstanding during the period using the treasury stock method for the Company’s stock option and restricted stock unit awards, and the if-converted method for the Convertible Notes. The following table presents the computation of basic and diluted net income per share:

Approximately 95,000 and 98,000 shares of the Company’s stock-based compensation grants were excluded from diluted net income per share for the three and six month periods ended August 1, 2026, respectively, since their effect was anti-dilutive.

Approximately 180,000 and 201,000 shares related to the Company’s stock-based compensation grants were excluded from diluted net income per share for the three and six month periods ended August 2, 2025, respectively, since their effect was anti-dilutive.

10. Stock Based Compensation

As of August 1, 2026, there were 5,159,514 shares of common stock available for issuance under the 2022 Omnibus Incentive Plan.

Non-cash stock compensation expense is as follows:

(a)

Included in the line item “Selling, general and administrative expenses” in the Company’s Condensed Consolidated Statements of Income.

(b)

The amounts presented in the table above exclude taxes. For the three and six month periods ended August 1, 2026, the tax benefit related to the Company’s non-cash stock compensation was approximately $5.7 million and $12.9 million, respectively. For the three and six month periods ended August 2, 2025, the tax benefit related to the Company’s non-cash stock compensation was approximately $5.9 million and $10.1 million, respectively.

Stock Options

Stock option transactions duringthe six month period ended August 1, 2026 are summarized as follows:

(a)

Options exercised duringthe six month period ended August 1, 2026 had a total intrinsic value of $27.4 million.

The following table summarizes information about the stock options vested and expected to vest during the contractual term of such options as of August 1, 2026:

Restricted Stock Units

Restricted stock unit transactions duringthe six month period ended August 1, 2026 are summarized as follows:

(a)

Restricted stock units vested duringthe six month period ended August 1, 2026 had a total intrinsic value of $81.3 million.

The fair value of each share of restricted stock granted during the six month period ended August 1, 2026 was based upon the closing price of the Company’s common stock on the grant date.

Performance Stock Units

The Company grants performance-based restricted stock units to its senior executives. Vesting of the performance stock units is based on continued service and the achievement of specified pre-established adjusted net income per share growth over a three-year performance period, as applicable for each grant. Based on the Company’s achievement of these goals, each award may be earned up to 200% of the target award. In the event that actual performance is below threshold, no award will be made. Compensation costs recognized on the performance stock units are adjusted, as applicable, for performance above or below the target specified in the award.

Performance stock unit transactions duringthe six month period ended August 1, 2026 are summarized as follows:

(a)

Performance-based stock awards vested duringthe six month period ended August 1, 2026 had a total intrinsic value of $62.3 million.

11. Commitments and Contingencies

Legal

In the course of business, the Company is party to class or collective actions alleging violations of federal and state wage and hour and other labor statutes, representative claims under the California Private Attorneys’ General Act and various other lawsuits and regulatory proceedings from time to time including, among others, commercial, product, employee, customer, intellectual property, privacy and other claims. Actions against us are in various procedural stages. Many of these proceedings raise factual and legal issues and are subject to uncertainties. While no assurance can be given as to the ultimate outcome of these matters, the Company believes that the final resolution of these actions will not have a material adverse effect on the Company’s results of operations, financial position, liquidity or capital resources.

Letters of Credit

The Company had letters of credit arrangements with various banks in the aggregate amount of $58.0 million, $50.4 million and $54.3 million as of August 1, 2026, January 31, 2026 and August 2, 2025, respectively. Among these arrangements, as of August 1, 2026, January 31, 2026 and August 2, 2025, the Company had letters of credit outstanding in the amount of $57.9 million, $49.8 and $51.8 million, respectively, guaranteeing performance under various lease agreements, insurance contracts, and utility agreements. In addition, the Company had outstanding letters of credit arrangements related to certain merchandising agreements in the amounts of $0.1 million, $0.5 million and $2.6 million as of August 1, 2026, January 31, 2026 and August 2, 2025, respectively. Based on the terms of the agreement governing the ABL Line of Credit, the Company had the ability to enter into letters of credit up to $142.0 million, $149.6 million and $145.7 million as of August 1, 2026, January 31, 2026 and August 2, 2025, respectively.

Purchase Commitments

The Company had $2,558.5 million of purchase commitments related to goods that were not received as of August 1, 2026.

Tariff Refunds

On February 20, 2026, the U.S. Supreme Court issued a ruling limiting the authority to impose tariffs under the International Emergency Economic Powers Act (IEEPA). In April, US Customs launched a system to allow importers of record to file IEEPA tariff refunds. The Company received tariff refunds during the three month period ended August 1, 2026 resulting in a $55.5 million reduction tothe line item “Cost of sales” in our Condensed Consolidated Statements of Income.