During the 13 weeks ended August 2, 2025, the Company completed its annual evaluation of its indefinite-lived intangible assets, including goodwill and trade names. The Company utilized the quantitative assessment for all reporting units and indefinite-lived trade names. Through the quantitative assessments, management reevaluated its long-term cash flow projections, primarily related to sales growth and potential effects of tariffs.

Based on the results of these quantitative impairment assessments, the Company determined that no impairment was required for the Sterling, Zales and Diamonds Direct reporting units, nor was any impairment required for the Zales Jewelry, Zales Outlet, Piercing Pagoda, Peoples or Blue Nile indefinite-lived trade names, as the estimated fair values exceeded the carrying values.

During the second quarter of Fiscal 2026, the Company recognized total pre-tax impairment charges in the condensed consolidated statement of operations within its North America reportable segment of $69.6 million for the Digital brands reporting unit and the James Allen and Diamonds Direct trade names. The impairment charges consisted of $53.6 million for Digital brands goodwill, $13 million for the James Allen trade name and $3 million for the Diamonds Direct trade name. These impairment charges were driven primarily by the decline in long-term cash flow projections of this business, particularly in the James Allen brand due to continued challenges with assortment and its competitive position in the market. Management also determined an increase in discount rates was required to reflect the current interest rate environment at the valuation date, additional forecast risk for the Digital brands due to the challenges at James Allen noted above, and additional uncertainty related to potential tariff impacts on the business.

The Company completed its quarterly triggering event assessments and determined that no triggering events had occurred through the end of the second quarter of Fiscal 2026 requiring an interim impairment assessment for any reporting units with goodwill and indefinite-lived intangible assets.

During the 13 weeks ended August 1, 2026, the Company completed its annual evaluation of its indefinite-lived intangible assets, including goodwill and trade names. The Company utilized the qualitative assessment for all reporting units and trade names, except for the Diamonds Direct reporting unit and trade name, as well as the Piercing Pagoda trade name, for which quantitative assessments were utilized. Through the qualitative assessments performed, the Company did not identify any events or conditions that would indicate that it was more likely than not that the carrying values of the reporting units and indefinite-lived trade names exceeded their fair values.

As part of the quantitative assessments, management reevaluated its long-term cash flow projections, primarily related to sales growth, for both Diamonds Direct and Piercing Pagoda. Based on the results of these quantitative impairment assessments, the Company determined that no impairment was required for the Diamonds Direct reporting unit or for the Piercing Pagoda indefinite-lived trade name, as the estimated fair values exceeded the carrying values. During the second quarter of Fiscal 2027, the Company recognized a pre-tax impairment charge in the condensed consolidated statement of operations within its North America reportable segment related to the Diamonds Direct trade name of $19 million as its carrying value exceeded its estimated fair value.

The Company completed its quarterly triggering event assessments and determined that no triggering events had occurred through the end of the second quarter of Fiscal 2027 that would require an interim impairment assessment for any reporting units with goodwill and indefinite-lived intangible assets.

Management noted uncertainties exist related to the macroeconomic environment in the US and abroad, including energy prices, tariffs, economic and tax policy, affordability and interest rates. These factors could unfavorably impact the cost of the Company’s products, consumer confidence and discretionary spending, and thus may also have an impact on the key assumptions used to estimate fair value, such as sales trends, margin trends, long-term growth rates and discount rates. These factors could also negatively affect the share price of the Company’s common stock. An increase in the discount rate and/or a further softening of sales and operating income trends for any of the Company’s reporting units or related trade names, particularly during peak selling seasons, could result in a decline in the estimated fair values of the indefinite-lived intangible assets, including goodwill, which could result in future material impairment charges.

Definite-lived and indefinite-lived intangible assets consist primarily of trade names and are recorded within intangible assets, net, on the condensed consolidated balance sheets. Intangible liabilities, net consists of unfavorable contracts and are recorded within accrued expenses and other current liabilities on the condensed consolidated balance sheets.


	August 1, 2026						January 31, 2026						August 2, 2025
(in millions)	Gross carrying amount		Accumulated amortization		Net carrying amount		Gross carrying amount		Accumulated amortization		Net carrying amount		Gross carrying amount		Accumulated amortization		Net carrying amount
Intangible assets, net:
Definite-lived intangible assets	$	8.8	$	(6.6)	$	2.2	$	8.8	$	(6.4)	$	2.4	$	8.8	$	(6.2)	$	2.6
Indefinite-lived intangible assets (1)	264.7		—		264.7		284.0		—		284.0		288.9		—		288.9
Total intangible assets, net	$	273.5	$	(6.6)	$	266.9	$	292.8	$	(6.4)	$	286.4	$	297.7	$	(6.2)	$	291.5

Intangible liabilities, net	$	—	$	—	$	—	$	(38.0)	$	38.0	$	—	$	(38.0)	$	37.1	$	(0.9)

(1) The change in the indefinite-lived intangible asset balances during the periods presented was primarily due to the trade name impairment charges recorded during the second quarter of Fiscal 2027 as described above, as well as the fourth quarter of Fiscal 2026.