Real-time Form 4 intelligence. Smarter insider tracking.
YoY shift: Neutral
Year-over-year tone shift - average net-tone change across Risk Factors and MD&A vs the prior 10-K. This filing is 0.13pp more bullish than last year's.
Why YoY instead of absolute: the LM lexicon has ~6.6× more negative words than positive (legal/risk-disclosure language is heavy on hedging), so every 10-K reads bearish on raw tone. Year-over-year change strips that bias and surfaces the actual shift in management's framing.
Tone shift by section
The two components the gauge averages: how Risk Factors and MD&A each shifted in net tone versus last year's 10-K. The headline above is their average, so a green needle over a soft section just means the other section carried it.
Risk Factors
+0.01pp
Flat
Net-tone change vs last year's 10-K.
MD&A
+0.24pp
Flat
Net-tone change vs last year's 10-K.
Per-snippet highlights
Sentence-level sentiment highlighting with category and subcategory filters is coming once the snippet-scoring pipeline lands. For now, dig into the actual section text on the Sections tab.
Language change vs prior 10-K
Risk Factors (Item 1A) - words with the biggest YoY frequency increase
Negative rising
damage+2
adverse+1
expose+1
loss+1
infringement+1
Positive rising
greater+1
benefit+1
enhance+1
superior+1
Risk Factors (Item 1A)
8,466 words
Item 1A.
Risk Factors:
An investment in our common stock involves numerous types of risks.
You
should carefully consider
the
following
risk
factors,
addition
the
other
information
contained
this
report,
including
the
disclosures
under
“Forward-looking
Information”
above
evaluating
our
Company
and
any
potential
investment
our
common
stock.
any
the
following
risks
uncertainties
occur
Language change vs prior 10-K
MD&A (Item 7) - words with the biggest YoY frequency increase
Negative rising
investigations+2
loss+1
unable+1
Positive rising
benefit+2
effective+1
beautiful+1
MD&A (Item 7)
3,318 words
Item 7.
Management's Discussion and Analysis of Financial Condition and Results
of Operations:
Management’s
Discussion and
Analysis of
Financial Condition
and Results
of Operations
is intended
to provide information to assist readers in better
understanding and evaluating our financial condition and
results
operations.
The
following
information
should
read
conjunction
with
the
Consolidated
Financial Statements, including the accompanying Notes appearing in
Part II, Item 8 of this
annual report
on Form 10-K.
This section of the annual report
on Form 10-K generally discusses fiscal 2025
and fiscal
and
year-to-year
comparisons
between
fiscal
and
fiscal
well
certain
fiscal
items.
Discussions
fiscal
items
and
year-to-year
comparisons
between
fiscal
and
fiscal
2023 that are not included
in this Form 10-K can
be found in “Management’s
Discussion and Analysis of
Financial
Condition
and
Results
Operations”
Part
Item
the
Company’s
annual
report
Form 10-K for the fiscal year ended February 1, 2025.
Recent Developments
Tariff
Uncertainties and Pressures
significant
quantity
our
products are
made
China
and
Southeast Asia.
These
products
were
subject
reciprocal
tariffs
throughout
fiscal
February
the
Supreme
Court
struck
down
these
tariffs.
The
ruling
does
not
establish
refund
process,
and
significant
uncertainty
remains
regarding how
and when
any amounts
may be
refunded.
are evaluating
the ruling
and any
potential
actions
available
are
unable
estimate
the
financial
impact,
any,
this
time
due
uncertainties regarding the process, timing and amounts of any
refunds.
On February 20, 2026,
after the Supreme Court
ruling, a 10% tariff
under Section 122 was
enacted for
150 days.
On March 11
2026, the U.S.
Trade Representative
announced Section 301
investigations into
various countries, including countries where much of our products are manufactured.
The extent to which
these Section
301 investigations will
result in
additional tariffs,
and the
timing of any
potential tariffs,
currently unknown.
Although the tariff amounts are reduced from their levels in the second half of 2025,
the
current
tariff
regime
higher
than
the
beginning
which
will
negatively
impact
our
acquisition costs in the first half of 2026 and possibly the second half
Results of Operations
The table below sets forth certain financial data of the Company
expressed as a percentage of
retail sales for the years indicated:
Fiscal Year Ended
January 31, 2026
February 1, 2025
Retail sales …………………………………………………………..
Other revenue…………………………………………………………
Total revenues ……………………………………………………….
Cost of goods sold …………………………………………………..
Selling, general and administrative………………………………….
Depreciation …………………………………………………………
Interest and other income ……………………………………………
Loss before income taxes …………………………………………
Net loss…………………………………………………………..
Fiscal 2025 Compared to Fiscal 2024
Retail sales
increased by
$646.8 million
in fiscal
2025 compared
million in
fiscal
2024. The increase in
retail sales in fiscal
2025 was primarily due
increase in same-store sales,
partially
offset
closed stores in
and
Same-store
sales
for
the
fiscal
year
increased
primarily due to
higher transactions volume and
slightly higher average sales
per transaction. Same-store
sales
includes
stores
that
have
been
open
more
than
months.
Stores
that
have
been
relocated
expanded
are
also
included in
the
same-store sales
calculation
after
they
have
been
open
more
than
months.
In fiscal 2025 and fiscal 2024, e-commerce sales were less than 5%
of total sales and same-store
sales. The
method of
calculating same-store sales
varies across the
retail industry.
result, our same-
store sales
calculation may
not be
comparable to
similarly titled
measures reported
by other
companies.
Total
revenues, comprised of
retail sales
and other
revenue (principally finance
charges and
late fees
customer accounts receivable,
gift card breakage, shipping
charges for e-commerce purchases
and layaway
fees), increased by 0.6%
million in fiscal
2025 compared to
$649.8 million in
fiscal 2024. The
Company
operated
stores
January
compared
stores
operated
February
In fiscal 2025, the Company opened no new stores and closed 48 stores.
Other
revenue,
component
total
revenues,
was
million
fiscal
compared
million in fiscal 2024.
Credit revenue
million represented 0.4%
of total
revenue in
fiscal 2025,
relatively
flat both in
dollars and percentage compared
fiscal
Credit
revenue
comprised
interest
earned
the
Company’s
private
label
credit
card
portfolio
and
related
fee
income.
Related
expenses
include
principally
payroll,
postage
and
other
administrative
expenses
and
totaled
million
fiscal
compared to
$1.6 million
in fiscal
Total
credit segment
income before
taxes
was $2.2
million in
fiscal 2025, relatively flat in dollars compared to fiscal 2024.
Cost
goods sold
was $431.6
million, or
retail
sales, in
fiscal
2025 compared
million, or 68.0% of retail sales, in fiscal 2024. The decrease in cost of goods sold as a percentage of sales
resulted primarily from lower buying, distribution and occupancy costs, partially offset by increased sales of
markdown
priced goods.
Cost of goods
sold includes merchandise
costs, net of
discounts and allowances,
buying costs,
distribution costs,
occupancy costs,
and freight
and inventory
shrinkage. Net
merchandise
costs
and
in-bound
freight
are
capitalized
inventory
costs.
Buying
and
distribution
costs
include
payroll, payroll-related
costs and
operating expenses
for the
buying departments
and distribution
center.
Occupancy
expenses
include
rent,
real
estate
taxes,
insurance,
common
area
maintenance,
utilities
and
maintenance for stores and distribution facilities. Total gross margin dollars (retail sales less cost of goods
sold and excluding
depreciation) increased by
million in fiscal
2025 from $205.7
million
in fiscal 2024. Gross margin as presented may not be comparable to that of other companies.
Selling, general
and administrative expenses
(“SG&A”), which
primarily include corporate
and store
payroll,
related
payroll
taxes
and
benefits,
insurance,
supplies,
advertising,
bank
and
credit
card
processing fees were
$226.4 million in
fiscal 2025 compared
to $231.5 million
in fiscal 2024,
a decrease
percent
retail
sales,
was
compared
the
prior
year.
The
decrease
expense
fiscal
was
primarily
attributable
lower
payroll
costs
and
lower
closed store and impairment expenses.
Depreciation
expense
was
million
fiscal
compared
million
fiscal
Depreciation
expense
increased
slightly
from
fiscal
due
additional
distribution
center
and
information
technology
depreciation,
partially
offset
decrease
leasehold
improvements
and
fixtures depreciation.
Interest and other income decreased
to $6.7 million in
fiscal 2025 compared to
$11.8 million in
fiscal
2024. The
decrease is
primarily attributable
gains on
the
sale of
land
held for
investment and
on the
disposal of the Company’s corporate aircraft in 2024.
Income tax
benefit was
$1.6 million,
retail sales
fiscal 2025
compared to
income tax
expense of
$1.9 million, or
retail sales in
fiscal 2024.
The effective
income tax
rate was
(Benefit) in fiscal 2025 compared to
(Expense) in fiscal 2024.
The income tax expense decrease
was primarily due to a reduction in foreign income taxes and a larger release of reserves related to expired
statute of
limitations for
uncertain tax
positions in
fiscal 2025.
On July
the One
Big Beautiful
Bill Act (the “OBBBA”) was signed into law.
The Company considered the impact of the OBBBA in the
second quarter of fiscal 2025.
The changes do not have a material impact on the Company’s
effective tax
rate.
The
Company
continues
monitor
impacts
moving
forward.
See
Note
the
Consolidated
Financial Statements, “Income Taxes,” for further details.
Off-Balance Sheet Arrangements
Not applicable.
Critical Accounting Policies and Estimates
The Company’s
accounting policies are
more fully described
in Note
1 to the
Consolidated Financial
Statements.
disclosed
Note
the
Consolidated
Financial
Statements,
the
preparation
the
Company’s
financial
statements
conformity
with
generally
accepted
accounting
principles
the
United
States
(“GAAP”)
requires
management
make
estimates
and
assumptions
about
future
events
that
affect
the
amounts reported
the
financial statements
and
accompanying notes.
Future events
and
their
effects
cannot
determined
with
absolute
certainty.
Therefore,
the
determination
estimates
requires
the
exercise
judgment.
Actual
results
inevitably
will
differ
from
those
estimates,
and
such
differences
may
material
the
financial
statements.
The
most
significant
accounting
estimates
inherent in the preparation of the Company’s financial statements include the calculation of potential asset
impairment, income tax
valuation allowances, reserves relating
to self-insured health
insurance, workers’
compensation, general
and auto
insurance liabilities,
uncertain tax
positions, the
allowance for
customer
credit losses, and inventory shrinkage.
The Company’s critical accounting policies and estimates are discussed with the Audit Committee.
Allowance for Customer Credit Losses
The Company evaluates
the collectability
of customer
accounts receivable
and records
an allowance
for customer
credit losses
based on
the accounts
receivable aging and
estimates of
actual write-offs.
The
allowance is
reviewed for
adequacy and
adjusted, as
necessary,
quarterly basis.
The Company
also
provides
for
estimated
uncollectible
late
fees
charged
based
historical
write-offs.
The
Company’s
financial results
can be
impacted by
changes in
customer loss
write-off experience
and the
aging of
the
accounts receivable portfolio.
Merchandise Inventories
The Company’s
inventory is
valued using
the weighted-average
cost method
and is
stated at
the net
realizable value. Physical inventories
are conducted throughout the
year to calculate actual
shrinkage and
inventory on hand. Actual shrinkage results are used to estimate inventory shrinkage, which is accrued for
the
period between
the
last physical
inventory and
the
financial reporting
date. The
Company regularly
reviews
its
inventory
levels
identify
slow
moving
merchandise
and
uses
markdowns
clear
slow
moving inventory.
Lease Accounting
The Company determines whether an arrangement is a lease at inception. The Company has operating
leases for
stores,
offices,
warehouse space
and equipment.
Its leases
have remaining
lease terms
one
year to 10 years, some of which
include options to extend the lease term for
up to five years, and some of
which
include
options
terminate
the
lease
within
one
year.
The
Company considers
these
options
determining
the
lease term
used
establish its
right-of-use assets
and lease
liabilities. The
Company’s
lease agreements do not contain any material residual value guarantees or material
restrictive covenants.
most
the
Company’s
leases
not
provide
implicit
rate,
the
Company
uses
its
estimated
incremental
borrowing
rate
based
the
information
available
commencement
date
the
lease
determining the present
value of lease
payments.
See Note 11
to the
Consolidated Financial Statements,
“Leases,” for further information.
Impairment of Long-Lived Assets
The
Company invests
leaseholds,
right-of use
assets
and
equipment primarily
connection
with
the opening and remodeling of stores
and in computer software and hardware. The
Company periodically
reviews its store
locations and estimates
the recoverability of
its long-lived assets,
which primarily relate
Fixtures
and
equipment,
Leasehold
improvements,
Right-of-use
assets
net
Lease
liabilities
and
Information
technology
equipment
and
software.
impairment
charge
recorded
for
the
amount
which the
carrying value
exceeds the
estimated fair
value when
the Company
determines that
projected
cash flows associated with those long-lived assets will not be sufficient to recover the carrying value.
This
determination is based on a
number of factors, including the store’s
historical operating results and future
projected cash flows, which include contribution margin projections.
The Company assesses the fair value
of each lease
by considering market
rents and
any lease terms
that may adjust
market rents under
certain
conditions, such as the loss of
an anchor tenant or a leased
space in a shopping center not
meeting certain
criteria. Further,
in determining when
to close a
store, the Company considers
real estate development
the
area and
perceived local
market conditions,
which can
be difficult
predict and
may be
subject
change.
Insurance Liabilities
The
Company
primarily
self-insured
for
healthcare,
workers’
compensation
and
general
liability
costs. These costs are
significant primarily due to the
large number of the
Company’s retail locations
and
associates. The Company’s
self-insurance liabilities are
based on the
total estimated costs
of claims filed
and
estimates
claims
incurred
but
not
reported,
less
amounts
paid
against
such
claims,
and
are
not
discounted.
Management
reviews
current
and
historical
claims
data
developing
its
estimates.
The
Company
also
uses
information
provided
outside
actuaries
with
respect
healthcare,
workers’
compensation and general liability claims.
If the underlying facts and
circumstances of the claims change
the
historical
experience
upon
which
insurance
provisions
are
recorded
not
indicative
future
trends, then
the Company
may be
required to
make adjustments
to the
provision for
insurance costs
that
could
material
the
Company’s
reported
financial condition
and
results
operations.
Historically,
actual results have not significantly deviated from estimates.
Uncertain Tax Positions
The Company records
liabilities for
uncertain tax
positions primarily
related to
state income
taxes as
of the balance sheet
date.
These liabilities reflect the
Company’s best
estimate of its ultimate
income tax
liability
based
the
tax
codes,
regulations,
and
pronouncements
the
jurisdictions
which
business.
Estimating our ultimate tax liability involves significant judgments regarding the
application of
complex tax
regulations across
many jurisdictions.
Despite the
Company’s
belief that
the estimates
and
judgments
are
reasonable,
differences
between
the
estimated
and
actual
tax
liabilities
can
and
exist
from time to time.
These differences may arise from settlements
of tax audits, expiration of the statute of
limitations, and the evolution and application of the
various jurisdictional tax codes and regulations.
Any
differences will
be recorded
in the
period in
which they become
known and
could have
a material
effect
on the results of operations in the period the adjustment is recorded.
Deferred Tax Valuation
Allowance
The
Company
assesses
the
likelihood
that
deferred
tax
assets
will
realized
light
the
Company’s
current
financial
performance
and
projected
future
financial
performance.
Based
this
assessment, the
Company then
determines if
a valuation
allowance should
be recorded.
If the
Company
concludes
that
more
likely
than
not
that
the
Company
will
not
able
realize
its
tax
deferred
assets, a valuation allowance is recorded for the proportion of the deferred tax asset it determines may not
be realized.
This evaluation
requires significant
judgment and
involves the
consideration of
all available
positive
and
negative
evidence,
including
our
historical
operating
results,
the
existence
cumulative
losses
recent
years,
ongoing
prudent
and
feasible
tax
planning
strategies,
and
projections
future
taxable income.
Liquidity, Capital Resources and Market Risk
The Company
believes that
its cash,
cash equivalents
and short-term
investments, together
with cash
flows
from
operations
and
its
asset-backed
revolving
line
credit,
will
adequate
fund
the
Company’s
regular
operating
requirements,
including
million
lease
obligations
and
planned
investments of
$7.4 million of
capital expenditures,
for the
next twelve
months from the
issuance of
this
annual report on Form 10-K.
Cash
used
operating
activities
during
fiscal
was
million
compared
$19.7 million
used in fiscal 2024 and $0.5 million provided in fiscal 2023. Cash used in operating activities during 2025
was primarily attributable to
net loss adjusted for
depreciation,
stock-based compensation and changes
working
capital.
The
decrease
million
cash
used
for
fiscal
compared to
fiscal
primarily due to a lower net loss and a decrease
in merchandise inventory, partially offset by a decrease in
accounts payable.
At January
2026, the
Company had
working
capital
$37.4 million compared
$34.9 million
and $55.1 million at
February 1, 2025 and
February 3, 2024, respectively.
The increase
in working
capital
in fiscal
2025 compared
to the
prior year
is primarily
due to
lower accounts
payable, accrued
liabilities and
current lease liability, partially offset by
lower cash and cash equivalents and merchandise
inventory.
The
ABL
Credit
Agreement
(“ABL
Facility”)
million
committed
through
March
2028 and is secured primarily by inventory
and third-party credit card receivables. The proceeds
from the
ABL
Facility
may
used
provide
funding
for
ongoing
working
capital
and
general
corporate
purposes. There were
no borrowings outstanding and
the availability under the
facility was $30.0
million
before
giving effect
million
outstanding letter
credit
that
reduced
borrowing availability
million
January
The
weighted
average
interest
rate
under
the
credit
facility
was
zero at January 31, 2026 due to no outstanding borrowings.
Expenditures for property and equipment totaled $3.8 million, $7.9 million
and $12.5 million in fiscal
and
respectively.
The
decrease
expenditures
for
fiscal
was
primarily
due to
finishing projects related to investments in
the distribution center and information technology.
Net
cash
used
investing
activities
totaled
million
for
fiscal
compared to
million
provided in
fiscal
2024 and
million provided
fiscal
In fiscal
2025, the
decrease in
cash
provided
was
primarily
attributable
lower
sales
other
assets
and
short-term investments,
partially
offset by a decrease in expenditures for property and equipment and purchases of short-term
investments.
Net cash
used in financing
activities totaled
$0.9 million in
fiscal 2025
compared to net
cash used of
million
for
fiscal
and
million
for
fiscal
The decrease in
cash used during
fiscal
2025 was primarily due to the
elimination of dividend payments and a
decrease in share repurchases.
The Company does not use derivative financial instruments.
See
Note
the
Consolidated
Financial
Statements,
“Fair
Value
Measurements,”
for
information
regarding the Company’s financial assets that are measured at fair value.
The
Company’s
investment
portfolio
was
primarily
invested
corporate
bonds
and
taxable
governmental debt
securities held in
managed accounts with
underlying ratings of
better at
January
2026. The
corporate bonds
have contractual
maturities which
range
from 14
days
years.
The
U.S. Treasury notes have a contractual maturity of 15 days.
Level
investment
securities
January
primarily
include
corporate
bonds
for
which
quoted
prices
may
not
available
active
exchanges
for
identical
instruments.
Their
fair
value
principally
based on market values determined by management with the assistance of a third-party pricing service.
Since
quoted
prices
active
markets
for
identical
assets
are
not
available,
these
prices
are
determined
the
pricing service
using observable
market information
such as
quotes from
less active
markets and/or
quoted
prices of securities with similar characteristics,
among other factors.
Deferred
compensation plan
assets
consist
primarily of
life
insurance
policies. These
life
insurance
policies are valued based on the cash surrender value of the insurance contract, which is determined based
such
factors
the
fair
value
the
underlying
assets
and
discounted
cash
flow
and
are
therefore
classified
within
Level
the
valuation
hierarchy.
The
Level
liability
associated
with
the
life
insurance
policies
represents
deferred
compensation
obligation,
the
value
which
tracked
via
underlying
insurance
funds’
net
asset
values,
recorded
Other
noncurrent
liabilities
the
Consolidated Balance Sheets. These
funds are designed
to mirror the
return of existing
mutual funds and
money market funds that are observable and actively traded.
Contractual Obligations
Contractual
obligations
for
future
payments
January
relate
primarily
operating
lease
commitments for
store leases.
Operating leases
represent minimum
required lease
payments under
non-
cancellable
lease
terms.
Most
store
leases
also
require
payment
related
operating
expenses
such
taxes, utilities, insurance and maintenance, which are not included in our estimated lease obligations.
See
Note
the
Consolidated
Financial
Statements,
“Leases”,
for
the
maturities
our
operating
lease
obligations.
Recent Accounting Pronouncements
See Note 1 to
the Consolidated Financial Statements,
“Summary of Significant Accounting Policies—
Recently Adopted Accounting Policies” and “—Recently Issued Accounting
