NOTE 3 - COST-SAVINGS INITIATIVE

During fiscal year 2025, in light of the ongoing challenging consumer-spending environment, the Company committed to a cost-savings initiative to reduce operating expenses through headcount reductions, bringing them more in line with sales.

During the three months ended April 30, 2026 and 2025, the Company recorded zero and $0.6 million, respectively, in accruals for severance and employee-related charges which are included in Selling, general and administrative in the Consolidated Statements of Operations, and are included in the International locations in the Watch and Accessory segment.

During fiscal year 2026, the Company recorded $1.5 million in accruals for severance and employee-related charges which were included in Selling, general and administrative in the Consolidated Statements of Operations. During fiscal year 2025, the Company recorded $4.6 million in accruals for severance and employee-related charges and early lease termination charges which were included in Selling, general and administrative in the Consolidated Statements of Operations. The amounts recorded in fiscal year 2026 and 2025 are included in both the United States and International locations in the Watch and Accessory segment. Of the total amounts recorded in fiscal year 2026 and 2025, $4.8 million of severance and employee-related charges was paid through fiscal year 2026, and $0.5 million of early lease termination-related fees and costs was paid/utilized through fiscal year 2026. During the first quarter of fiscal year 2027, $0.3 million of severance and employee-related charges was paid. The remaining amount of $0.5 million is included in Accrued payroll and benefits in the Consolidated Balance Sheet at April 30, 2026 and is expected to be paid during the remainder of fiscal year 2027.