A. Nature of Operations

Duluth Holdings Inc. (“Duluth Trading” or the “Company”), a Wisconsin corporation, is a lifestyle brand of men’s and women’s workwear, casual wear, outdoor apparel 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.

The Company identifies its operating segments according to how its business activities are managed and evaluated. The Company continues to report 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.”

B. Basis of Presentation

The condensed consolidated financial statements are prepared in accordance with U.S. Generally Accepted Accounting Principles (“U.S. GAAP”). The Company consolidates TRI Holdings, LLC (“TRI”) as a variable interest entity (see Note 6 “Variable Interest Entity” for further information). 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 2026 is a 52-week period and ends on January 31, 2027. Fiscal 2025 was a 52-week period and ended on February 1, 2026. The three and six months of fiscal 2026 and fiscal 2025 represent the Company’s 13-week and 26-week periods ended August 2, 2026 and August 3, 2025, respectively.

The accompanying condensed consolidated financial statements as of and for the three and six months ended August 2, 2026 and August 3, 2025 have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) and, in the opinion of the Company, include all adjustments (which are normal and recurring in nature) necessary to present fairly the financial position, results of operations and cash flows of the Company for the interim periods presented. Certain information and footnote disclosures normally included in consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such SEC rules and regulations as of and for the three and six months ended August 2, 2026 and August 3, 2025. These interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes included in the Company’s annual report on Form 10-K for the fiscal year ended February 1, 2026.

C. Inventory

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 $5.8 million and $4.4 million as of August 2, 2026 and February 1, 2026, respectively.

D. Prepaid Expenses and Other Assets

E. Seasonality of Business

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

F. Cash and Cash Equivalents

The Company considers short-term investments with original maturities of three months or less when purchased to be cash equivalents. 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.

G. Reclassifications

Certain prior year amounts, which are not material, have been reclassified to conform to the current year presentation in the condensed consolidated financial statements and accompanying notes to the condensed consolidated financial statements.

H. Significant Accounting Policies

There have been no significant changes to the Company’s significant accounting policies as described in the Company’s Annual Report on Form 10-K for the year ended February 1, 2026 except as described below.

IEEPA Tariff Refunds

On February 20, 2026, the U.S. Supreme Court issued a ruling relating to tariffs imposed under the International Emergency Economic Powers Act ("IEEPA"). Following the ruling, the U.S. Customs and Border Protection and other federal agencies issued additional guidance and took actions affecting the assessment, collection, refund, and/or protest of certain tariffs. In March 2026, the U.S. Court of International Trade issued an additional ruling stating that importers that have paid tariffs under IEEPA are due refunds. The Company submitted its refund request in the first quarter of 2026 for reimbursement in the amount of $12.5 million, which reflected the amount of IEEPA tariffs the Company determined were paid while such tariffs were in effect from February 2025 through February 2026.

The Company received tariff refunds of $12.8 million for the three and six months ended August 2, 2026, which consisted of $12.4 million in tariff principal and $0.4 million in interest. The Company recorded a receivable of $0.1 million for the remaining uncollected tariff principal amount, which is included in prepaid expenses & other current assets on the condensed consolidated balance sheets as of August 2, 2026, as the Company believes it is probable that it will recover the remaining uncollected amount under the loss recovery accounting model due to the history of collecting substantially all of the submitted amounts as of period-end. The Company recorded a reduction to cost of goods sold of $12.5 million, which is consistent with the original accounting treatment of the underlying tariff costs, and $0.4 million in interest income in the condensed consolidated statement of operations for the three and six months ended August 2, 2026.

In July 2026, the Company also reached an agreement and obtained a credit memorandum from a vendor to collect $5.5 million in refunds of tariff charges that were previously passed through to the Company by the vendor. The Company recorded a receivable of $5.5 million, which is included in prepaid expenses & other current assets on the condensed consolidated balance sheet as of August 2, 2026. The Company recorded a reduction to cost of goods sold for $5.5 million for these refunds for the three and six months ended August 2, 2026, which is consistent with the original accounting treatment of the underlying tariff costs.

In addition, the Company expects to reimburse certain vendors for tariff charges that the Company previously passed through to those vendors, which the Company was refunded in the second quarter of 2026. The Company expects to pay approximately $2.0 million to such vendors and as such has recorded an accrual for this amount, which is included in accrued expenses & other current liabilities on the condensed consolidated balance sheet as of August 2, 2026. The accrual was recorded as a charge to cost of goods sold for the three and six months ended August 2, 2026, which is consistent with the original accounting treatment of the underlying tariff costs.