Quarterly Report for Quarter Ending August 1, 2026 (Form 10-Q)

Management's Discussion and Analysis of Financial Condition and Results of Operations

This section discusses management's view of the financial condition, results of operations and cash flows of the Company. This section should be read in conjunction with the information contained in our Annual Report on Form 10-K for the fiscal year ended January 31, 2026, including the Risk Factors section, and information contained elsewhere in this Quarterly Report on Form 10-Q, including the Condensed Consolidated Financial Statements and Notes to those financial statements. The results of operations for any interim period may not necessarily be indicative of the results that may be expected for any future interim period or the entire fiscal year.

Summary of Results of Operations

Our net sales decreased 3.0% to $529.9 million in the second quarter of Fiscal 2027 compared to $546.0 million in the second quarter of Fiscal 2026. The net sales decrease compared to last year's second quarter reflects the impact of net store closings resulting from our ongoing footprint optimization, decreased sales in Genesco Brands Group as we exited licenses, a 6% decrease in e-commerce comparable sales reflecting our prioritization of full-price selling at Schuh Group and an unfavorable foreign exchange impact, partially offset by a 1% increase in same store sales and higher sales from enlarged stores. The Journeys Group business had a strong second quarter of Fiscal 2027 with comparable sales up 2% on top of a 5% comparable gain last year, driven by strength in the product assortment and other initiatives. Schuh Group comparable sales were down 9% for the second quarter of Fiscal 2027 reflecting our decision to prioritize full-price selling over discounts and promotions. Johnston & Murphy Group also had a strong second quarter of Fiscal 2027 with comparable sales up 4% in the second quarter of Fiscal 2027 driven by increased store sales due to new and improved product assortments, both in apparel and footwear, benefitting from brand awareness through marketing and social media campaigns. By segment, Journeys Group sales were flat, Schuh Group sales decreased 10%, Johnston & Murphy Group sales increased 5% and Genesco Brands Group sales decreased 21% or $6.7 million in the second quarter of Fiscal 2027 compared to the second quarter of Fiscal 2026. Schuh Group's sales decreased 10% on a local currency basis for the second quarter of Fiscal 2027.

Gross margin increased 8.9% to $272.1 million in the second quarter of Fiscal 2027 from $249.9 million in the second quarter of Fiscal 2026 and increased 560 basis points as a percentage of net sales from 45.8% in the second quarter of Fiscal 2026 to 51.4% in the second quarter of Fiscal 2027. The overall increase in gross margin as a percentage of net sales in the second quarter of Fiscal 2027 is due primarily to tariff refunds of $21.8 million, less promotional activity and higher full-price selling at Schuh Group, favorable changes in sales mix, the license exit benefit and tariff mitigation actions across our branded businesses.

Selling and administrative expenses in the second quarter of Fiscal 2027 decreased 1.8% to $259.6 million from $264.3 million compared to the second quarter of Fiscal 2026. Selling and administrative expenses increased 60 basis points as a percentage of net sales in the second quarter of Fiscal 2027 compared to the second quarter of Fiscal 2026 from 48.4% to 49.0% as a result of the sales decline. The increase as a percentage of net sales reflects increased occupancy and performance-based compensation expense, partially offset by decreased selling salaries, marketing expenses and other ongoing cost savings initiatives.

Operating margin was 0.7% in the second quarter of Fiscal 2027 compared to (2.6)% in the second quarter of Fiscal 2026. The overall improvement in operating margin for the second quarter of Fiscal 2027 compared to the second quarter of Fiscal 2026 primarily reflects increased gross margin as a percentage of net sales, partially offset by a net loss of $8.9 million in asset impairment and other charges and deleverage in expenses as a percentage of net sales.

Earnings from continuing operations before income taxes ("pretax earnings") for the second quarter of Fiscal 2027 was $3.4 million compared to a loss from continuing operations before income taxes ("pretax loss") of $16.0 million for the second quarter of Fiscal 2026. Pretax earnings for the second quarter of Fiscal 2027 included an asset impairment and other charge of $8.9 million which included a $6.9 million charge for costs related to proxy contest, a $1.0 million charge for other legal matters, a $0.4 million charge for costs associated with information technology transformation, a $0.5 million charge for severance and other restructuring and a $0.1 million charge for store restructuring. The pretax loss for the second quarter of Fiscal 2026 included asset impairment and other charges of $0.1 million for severance.

We had an effective income tax rate of (2.5)% and (15.0)% in the second quarter of Fiscal 2027 and Fiscal 2026, respectively. The higher effective tax rate in the second quarter of Fiscal 2027 compared to the second quarter of Fiscal 2026 is primarily a result of the impact of the OBBBA in the second quarter of Fiscal 2026 which did not have a recurring impact in the second quarter of Fiscal 2027, as well as the impact of the valuation allowance in certain jurisdictions on our effective tax rate as a result of changes in the mix of earnings and losses among jurisdictions.

Net earnings in the second quarter of Fiscal 2027 were $3.5 million, or $0.32 diluted earnings per share, compared to a net loss of $18.5 million, or $1.79 diluted loss per share, in the second quarter of Fiscal 2026.

Critical Accounting Estimates

We discuss our critical accounting estimates in Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations", in our Annual Report on Form 10-K for the fiscal year ended January 31, 2026. We describe our significant accounting policies in Note 1, "Summary of Significant Accounting Policies", of the Notes to Consolidated Financial Statements included in our Annual Report on

Form 10-K for the fiscal year ended January 31, 2026. There have been no significant changes in our definition of significant accounting policies or critical accounting estimates since the end of Fiscal 2026.

Key Performance Indicators

In assessing the performance of our business, we consider a variety of performance and financial measures. The key performance indicators we use to evaluate the financial condition and operating performance of our business are comparable sales, net sales, gross margin, operating income and operating margin. These key performance indicators should not be considered superior to, as a substitute for or as an alternative to, and should be considered in conjunction with, the U.S. GAAP financial measures presented herein. These measures may not be comparable to similarly titled performance indicators used by other companies.

Comparable Sales

We consider comparable sales to be an important indicator of our current performance, and investors may find it useful as such. Comparable sales results are important to achieve leveraging of our costs, including occupancy, selling salaries, depreciation, etc. Comparable sales also have a direct impact on our total net revenue, working capital and cash. We define "comparable sales" as sales from stores open longer than one year, beginning with the first day a store has comparable sales (which we refer to as "same store sales"), and sales from websites operated longer than one year and direct mail catalog sales (which we refer to in this report as "comparable e-commerce sales"). Temporarily closed stores are excluded from the comparable sales calculation if closed for more than seven days. Expanded stores are excluded from the comparable sales calculation until the first day an expanded store has comparable prior year sales. Current year foreign exchange rates are applied to both current year and prior year comparable sales to achieve a consistent basis for comparison.

Operating Margin

Operating margin is a ratio calculated by dividing operating income (loss) by net sales. We believe operating margin provides investors with useful information related to the profitability of our business after considering all of the selling, general and administrative expenses and other operating charges incurred. We use this measure in making financial, operating and planning decisions and in evaluating our overall performance.

Results of Operations - Second Quarter of Fiscal 2027 Compared to Second Quarter of Fiscal 2026

Journeys Group

Net sales from Journeys Group were essentially flat at $317.8 million in the second quarter of Fiscal 2027 compared to $318.2 million in the second quarter of Fiscal 2026. Journeys net sales for the second quarter of Fiscal 2027 reflects a 2% increase in comparable sales, with increases in both stores and e-commerce channels, and higher sales from enlarged stores, offset by a 5% decrease in the average number of stores in the second quarter of Fiscal 2027. The increased comparable sales in the second quarter of Fiscal 2027 was driven by the strong performance of our 4.0 store remodels and other initiatives as well as elevated product assortment across athletic and casual, achieving higher average transaction size and more full-price selling.

We closed 17 Journeys Group stores in the second quarter of Fiscal 2027. Journeys Group operated 924 stores at the end of the second quarter of Fiscal 2027, including 176 Journeys Kidz stores in the United States, 33 Journeys stores in Canada and 30 Little Burgundy stores in Canada, compared to 984 stores at the end of the second quarter of Fiscal 2026, including 200 Journeys Kidz stores in the United States, 33 Journeys stores in Canada and 30 Little Burgundy stores in Canada.

The 140 basis point improvement in operating margin for Journeys Group for the second quarter of Fiscal 2027 compared to the second quarter of Fiscal 2026 was primarily due to a 180 basis point decrease in selling and administrative expenses as a percentage of net sales. This

improvement reflects leverage of expenses in the second quarter of Fiscal 2027, especially decreased selling salaries, marketing expense and other expenses and demonstrates the impact of our productivity efforts, cost savings initiatives and closing underperforming stores. The increase in operating margin was partially offset by a 40 basis point decrease in gross margin as a percentage of net sales, reflecting lower initial margins as a result of changes in brand mix, partially offset by lower markdowns.

Schuh Group

Net sales from Schuh Group decreased 10.1% to $113.8 million in the second quarter of Fiscal 2027 compared to $126.6 million in the second quarter of Fiscal 2026. The net sales decrease for the second quarter of Fiscal 2027 includes a 9% decrease in comparable sales, reflecting decreased e-commerce comparable sales and same store sales, a 7% decrease in the average number of stores in the second quarter of Fiscal 2027 and an unfavorable impact of $0.6 million due to changes in foreign exchange rates. We prioritized more full-priced selling over discounts and promotions in Schuh Group during the second quarter of Fiscal 2027 but this pressured sales in stores and online and especially affected the e-commerce channel which in particular attracts bargain seekers. Schuh Group's sales decreased 10% on a local currency basis for the second quarter of Fiscal 2027. Schuh Group operated 109 stores at the end of the second quarter of Fiscal 2027, compared to 120 stores at the end of the second quarter of Fiscal 2026.

The 30 basis point decrease in operating margin for Schuh Group for the second quarter of Fiscal 2027 compared to the second quarter of Fiscal 2026 was due to a 340 basis point increase in selling and administrative expenses as a percentage of net sales, reflecting deleverage of expenses in the second quarter of Fiscal 2027, as a result of lower revenue. The decrease in operating margin was partially offset by a 300 basis point increase in gross margin as a percentage of net sales, reflecting decreased promotional activity and more full-priced selling.

Johnston & Murphy Group

Johnston & Murphy Group net sales increased 5.5% to $72.5 million for the second quarter of Fiscal 2027 from $68.8 million for the second quarter of Fiscal 2026. The net sales increase for the second quarter of Fiscal 2027 includes a 4% increase in comparable sales, reflecting increased store sales, a 3% increase in the average number of stores in the second quarter of Fiscal 2027 and increased wholesale sales, partially offset by decreased e-commerce comparable sales reflecting fewer catalog drops. The performance of Johnston & Murphy's product assortment, both apparel and footwear, as a result of new and improved product offerings and increased brand awareness through marketing and social media campaigns contributed to increased store sales in the second quarter of Fiscal 2027. Retail operations accounted for 83.0% of Johnston & Murphy Group's sales in the second quarter of Fiscal 2027, up from 82.3% in the second quarter of Fiscal 2026. The store count for Johnston & Murphy Group's retail operations at the end of the second quarter of Fiscal 2027 was 153 Johnston & Murphy full-price retail and factory stores, compared to 149 Johnston & Murphy full-price retail and factory stores at the end of the second quarter of Fiscal 2026.

The significant improvement in operating margin for Johnston & Murphy Group for the second quarter of Fiscal 2027 compared to the second quarter of Fiscal 2026 was primarily due to increased gross margin as a percentage of net sales from 54.0% last year to 73.5% in the second quarter this year reflecting tariff refunds of $13.3 million for the Johnston & Murphy Group, tariff mitigation actions, a favorable mix change due to lower wholesale sales and decreased shipping and warehouse expense, partially offset by increased retail markdowns. In addition, selling and administrative expenses as a percentage of net sales decreased 90 basis points for the second quarter of Fiscal 2027 compared to the second quarter of Fiscal 2026 reflecting leverage of expenses, especially marketing and credit card expense, partially offset by increased performance-based incentive compensation expense, selling salaries and occupancy expense.

Genesco Brands Group

Genesco Brands Group's net sales decreased 20.8% to $25.7 million for the second quarter of Fiscal 2027 from $32.4 million for the second quarter of Fiscal 2026 primarily due to decreased sales of Levi's as we exited that business, partially offset by increased footwear sales of Dockers.

The improvement in operating margin for Genesco Brands Group for the second quarter of Fiscal 2027 compared to the second quarter of Fiscal 2026 was primarily due to increased gross margin as a percentage of net sales from 25.3% last year to 67.4% in the second quarter this year reflecting tariff refunds of $8.5 million for the Genesco Brands Group, tariff mitigation efforts, higher closeout sales in the second quarter of Fiscal 2026 related to the exit of certain licenses and a favorable change in sales mix. Selling and administrative expenses increased as a percentage of net sales from 23.2% last year to 33.8% in the second quarter this year. The increase reflects deleverage of expenses as a result of decreased revenue in the second quarter of Fiscal 2027, especially increased performance-based compensation expense, other compensation expenses and royalty expense.

Corporate, Interest Expenses and Other Charges

Corporate and other expense for the second quarter of Fiscal 2027 was $16.9 million compared to $8.3 million for the second quarter of Fiscal 2026. Corporate expense in the second quarter of Fiscal 2027 included asset impairment and other charges of $8.9 million which included costs related to proxy contest, legal and other matters, costs associated with information technology transformation, severance and other restructuring and store restructuring. Corporate expense in the second quarter of Fiscal 2026 included asset impairment and other charges of $0.1 million for severance. The corporate expense decrease, excluding asset impairment and other charges, primarily reflects decreased compensation expense partially offset by additional information technology transformation expenses in the second quarter of Fiscal 2027 compared to the second quarter of Fiscal 2026.

Net interest decreased $1.5 million from $1.5 million in the second quarter of Fiscal 2026 to essentially zero net interest in the second quarter of Fiscal 2027 primarily reflecting decreased revolver borrowings in North America in the second quarter of Fiscal 2027 compared to the second quarter of Fiscal 2026 and increased interest income in the second quarter of Fiscal 2027 as a result of $0.7 million in interest income on tariff refunds during the second quarter this year.

Results of Operations - First Six Months of Fiscal 2027 Compared to First Six Months of Fiscal 2026

Our net sales were flat at $1.0 billion in the first six months of Fiscal 2027 compared to the first six months of Fiscal 2026. Net sales for the first six months this year reflects 67 net fewer stores than a year ago resulting from our ongoing footprint optimization, a 3% decrease in e-commerce comparable sales reflecting our prioritization of full-price selling at Schuh Group, and decreased wholesale sales primarily due to license exits, offset by a 2% increase in same store sales, higher sales from enlarged stores and a favorable foreign exchange impact. The Journeys Group business had a strong first six months of Fiscal 2027 with comparable sales up 3% on top of a 9% increase last year, driven by strength in the product assortment and other initiatives. Schuh Group comparable sales were down 9% for the first six months of Fiscal 2027 reflecting our decision to prioritize full-price selling. Johnston & Murphy Group also had a strong first six months with comparable sales up 5% in the first six months of Fiscal 2027, driven by increased store sales due to strength in product assortment, both in apparel and footwear, benefitting from increased brand awareness through marketing and social media campaigns. By segment, Journeys Group sales increased 2%, Schuh Group sales decreased 8%, Johnston & Murphy Group sales increased 6% and Genesco Brands Group sales decreased 9% in the first six months of Fiscal 2027 compared to the first six months of Fiscal 2026. Schuh Group's sales decreased 9% on a local currency basis for the first six months of Fiscal 2027.

Gross margin increased 6.3% to $501.0 million in the first six months of Fiscal 2027 from $471.1 million in the first six months of Fiscal 2026 and increased 310 basis points as a percentage of net sales from 46.2% in the first six months of Fiscal 2026 to 49.3% in the first six months of Fiscal 2027. The overall increase in gross margin as a percentage of net sales is due primarily to increased wholesale gross margin reflecting tariff refunds, less promotional activity and higher full-price selling at Schuh Group and favorable changes in sales mix.

Selling and administrative expenses in the first six months of Fiscal 2027 were essentially flat at $514.0 million compared to $513.3 million in the first six months of Fiscal 2026, but increased 20 basis points as a percentage of net sales in the first six months of Fiscal 2027 compared to the first six months of Fiscal 2026 from 50.3% to 50.5%. The increase as a percentage of net sales reflects increased performance-based compensation expense and costs associated with information technology transformation, partially offset by decreased selling salaries and other expenses as a result of our ongoing cost savings initiatives.

Operating margin was (1.2)% in the first six months of Fiscal 2027 compared to (4.2)% in the first six months of Fiscal 2026. The overall improvement in operating margin for the first six months of Fiscal 2027 compared to the first six months of Fiscal 2026 primarily reflects increased gross margin as a percentage of net sales and a net gain in asset impairment and other charges, partially offset by a small increase in selling and administrative expenses as a percentage of net sales.

The pretax loss for the first six months of Fiscal 2027 was $12.5 million compared to $45.7 million for the first six months of Fiscal 2026. The pretax loss for the first six months of Fiscal 2027 included an asset impairment and other gain of $1.2 million which included a gain of $13.4 million related to payment card interchange fee litigation, partially offset by a $6.9 million charge for costs related to proxy contest, a $3.1 million charge for store restructuring, a $1.0 million charge for other legal matters, a $0.6 million charge for costs associated with information technology transformation and a $0.6 million charge for severance and other restructuring. The pretax loss for the first six months of Fiscal 2026 included asset impairment and other charges of $0.4 million for severance.

We had an effective income tax rate of 9.3% and 13.2% in the first six months of Fiscal 2027 and Fiscal 2026, respectively. The lower effective tax rate in the first six months of Fiscal 2027 compared to the first six months of Fiscal 2026 primarily reflects a lower estimated annual effective tax rate for Fiscal 2027 versus our expectation for Fiscal 2026 as of the prior year first six months due to the impact of the valuation allowance in certain jurisdictions and changes in the mix of earnings and losses among jurisdictions.

The net loss in the first six months of Fiscal 2027 was $11.3 million, or $1.08 diluted loss per share, compared to a net loss of $39.7 million, or $3.82 diluted loss per share, in the first six months of Fiscal 2026.

Journeys Group

Net sales from Journeys Group increased 2.1% to $603.2 million in the first six months of Fiscal 2027, compared to $590.8 million in the first six months of Fiscal 2026. The net sales increase compared to the first six months of Fiscal 2026 reflects a 3% increase in comparable sales, with increases in both stores and e-commerce channels, and higher sales from enlarged stores, partially offset by a 5% decrease in the average number of stores in the first six months of Fiscal 2027. The increased comparable sales in the first six months of Fiscal 2027 was driven by the strong performance of our 4.0 store remodels and other initiatives as well as the continued strength in Journeys Group's product assortment with brands across athletic and casual achieving healthy growth.

The 140 basis point improvement in operating margin for Journeys Group for the first six months of Fiscal 2027 compared to the first six months of Fiscal 2026 was primarily due to a 180 basis point decrease in selling and administrative expenses as a percentage of net sales. This improvement reflects leverage of expenses in the first six months of Fiscal 2027, especially selling salaries and demonstrates the impact of our productivity efforts, cost savings initiatives and closing underperforming stores. The increase in operating margin was partially offset by a 40 basis point decrease in gross margin as a percentage of net sales, reflecting lower initial margins as a result of changes in brand mix, partially offset by lower markdowns.

Schuh Group

Net sales from Schuh Group decreased 8.1% to $204.5 million in the first six months of Fiscal 2027 compared to $222.5 million in the first six months of Fiscal 2026. The net sales decrease for the first six months of Fiscal 2027 includes a 9% decrease in comparable sales, reflecting decreased e-commerce comparable sales and same store sales, and a 7% decrease in the average number of stores in the first six months of Fiscal 2027, partially offset by a favorable impact of $3.0 million due to changes in foreign exchange rates. We prioritized more full-priced selling with less discounts and promotions in Schuh Group during the first six months of Fiscal 2027 but this pressured sales in stores and online and especially affected the e-commerce channel which in particular attracts bargain seekers. Schuh Group's sales decreased 9% on a local currency basis for the first six months of Fiscal 2027.

The 80 basis point decrease in operating margin for Schuh Group for the first six months of Fiscal 2027 compared to the first six months of Fiscal 2026 was due to a 310 basis point increase in selling and administrative expenses as a percentage of net sales, reflecting deleverage of expenses in the first six months of Fiscal 2027 as a result of lower revenue. The decrease in operating margin was partially offset by a 220 basis point increase in gross margin as a percentage of net sales, reflecting decreased promotional activity and more full-priced selling and lower shipping

and warehouse expense. In addition, the operating loss included an unfavorable impact of $0.4 million due to changes in foreign exchange rates compared to the first six months of Fiscal 2026.

Johnston & Murphy Group

Johnston & Murphy Group net sales increased 5.6% to $153.9 million for the first six months of Fiscal 2027 from $145.6 million for the first six months of Fiscal 2026. The net sales increase for the first six months of Fiscal 2027 includes a 5% increase in comparable sales, reflecting increased store sales, and a 3% increase in the average number of stores in the first six months of Fiscal 2027, partially offset by decreased wholesale sales. The performance of the Johnston & Murphy Group product assortment, both apparel and footwear, as a result of new and improved product offerings and increased brand awareness through marketing and social media campaigns contributed to increased sales in the first six months of Fiscal 2027. Retail operations accounted for 79.1% of Johnston & Murphy Group's sales in the first six months of Fiscal 2027, up from 77.3% in the first six months of Fiscal 2026.

The significant improvement in operating margin for Johnston & Murphy Group for the first six months of Fiscal 2027 compared to the first six months of Fiscal 2026 was primarily due to increased gross margin as a percentage of net sales from 53.8% in the first six months last year to 63.4% in the first six months this year reflecting tariff refunds of $13.3 million for the Johnston & Murphy Group, a favorable mix change due to lower wholesale sales and decreased shipping and warehouse expense. In addition, selling and administrative expenses as a percentage of net sales decreased 60 basis points for the first six months of Fiscal 2027 compared to the first six months of Fiscal 2026 reflecting leverage of expenses, especially decreased marketing expense, partially offset by increased performance-based incentive compensation expense.

Genesco Brands Group

Genesco Brands Group's net sales decreased 9.2% to $55.4 million for the first six months of Fiscal 2027 from $61.0 million for the first six months of Fiscal 2026 primarily due to decreased sales of Levi's as we exited that business, partially offset by increased footwear sales of Dockers and private label products.

The improvement in operating margin for Genesco Brands Group for the first six months of Fiscal 2027 compared to the first six months of Fiscal 2026 was primarily due to increased gross margin as a percentage of net sales from 27.8% in the first six months last year to 47.9% in the first six months this year reflecting tariff refunds of $8.5 million for the Genesco Brands Group, tariff mitigation efforts, higher closeout sales in the first six months of Fiscal 2026 related to the exit of certain licenses and a favorable change in sales mix. Selling and administrative expenses increased as a percentage of net sales from 25.5% in the first six months last year to 30.3% in the first six months this year. The increase reflects

deleverage of expenses as a result of decreased revenue in the first six months of Fiscal 2027, especially increased royalty expense, performance-based compensation expense and other compensation expense, partially offset by decreased shipping and warehouse and freight expenses.

Corporate, Interest Expenses and Other Charges

Corporate and other expense for the first six months of Fiscal 2027 was $16.4 million compared to $16.2 million for the first six months of Fiscal 2026. Corporate expenses in the first six months of Fiscal 2027 included an asset impairment and other gain of $1.2 million which included a gain from payment card interchange fee litigation, partially offset by costs related to proxy contest, other legal matters, store restructuring charges, costs associated with information technology transformation and severance and other restructuring. Corporate expense in the first six months of Fiscal 2026 included asset impairment and other charges of $0.4 million for severance. The corporate expense increase, excluding asset impairment and other charges, reflects additional information technology transformation expenses and increased performance-based incentive compensation expense, partially offset by lower professional fees and other expenses in the first six months of Fiscal 2027 compared to the first six months of Fiscal 2026.

Net interest decreased $2.6 million to $0.2 million in the first six months of Fiscal 2027 compared to $2.8 million in the first six months of Fiscal 2026 primarily reflecting decreased revolver borrowings in North America in the first six months of Fiscal 2027 compared to the first six months of Fiscal 2026 and increased interest income in the first six months of Fiscal 2027 as a result of $0.7 million in interest income on tariff refunds and increased investments during the first six months this year.

Liquidity and Capital Resources

Working Capital

Our business is seasonal, with our investment in working capital normally reaching peaks in the summer and fall of each year in anticipation of the back-to-school and holiday selling seasons. Historically, cash flows from operations typically have been generated principally in the fourth quarter of each fiscal year.

Reasons for the major variances in cash provided by (used in) the table above are as follows:

Cash used in operating activities was $11.7 million higher in the first six months of Fiscal 2027 compared to the first six months of Fiscal 2026, reflecting primarily the following factors:

Cash used in investing activities was $1.8 million lower for the first six months of Fiscal 2027 as compared to the first six months of Fiscal 2026 reflecting decreased capital expenditures primarily related to omni-channel capabilities, partially offset by increased investments in retail stores.

Cash provided by financing activities was $44.8 million lower in the first six months of Fiscal 2027 as compared to the first six months of Fiscal 2026 primarily reflecting decreased net borrowings, partially offset by decreased share repurchases.

Sources of Liquidity and Future Capital Needs

We have three principal sources of liquidity: cash flow from operations, cash on hand and our credit facilities discussed in Item 8, Note 8, "Long-Term Debt", to our Consolidated Financial Statements included in our Annual Report on Form 10-K for Fiscal 2026.

As of August 1, 2026, we have borrowed $9.1 million (CAD $12.7 million) revolver borrowings related to GCO Canada ULC and $6.7 million (£5.0 million) related to Schuh revolver borrowings. We were in compliance with all the relevant terms and conditions of the Credit Facility and the Facility Agreement as of August 1, 2026.

We believe that cash on hand, cash provided by operations and borrowings under our Credit Facility and the Facility Agreement will be sufficient to support our liquidity needs in Fiscal 2027 and the foreseeable future.

In addition, as discussed in Item 1, Note 7, "Legal Proceedings," to our Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q, we received tariff refunds of $21.8 million, not including interest, related to tariffs previously collected under IEEPA.

Contractual Obligations

Our contractual obligations at August 1, 2026 increased 13% compared to January 31, 2026, primarily due to increased lease obligations and long-term debt.

Capital Expenditures

Total capital expenditures in Fiscal 2027 are expected to be approximately $65 to $70 million of which approximately 95% is for new stores and renovations and 5% is for other initiatives. We do not currently have any longer-term capital expenditures or other cash requirements other than as set forth above and in the contractual obligations table as disclosed in Item 7 of our Annual Report on Form 10-K for the fiscal year ended January 31, 2026. We also do not currently have any off-balance sheet arrangements.

Common Stock Repurchases

We did not repurchase any shares of our common stock during the second quarter and first six months of Fiscal 2027. We repurchased 604,531 shares of our common stock during the first six months of Fiscal 2026 at a cost of $12.6 million, or an average cost of $20.79 per share. We had $29.8 million remaining as of August 1, 2026 under our expanded share repurchase authorization announced in June 2023. During the third quarter of Fiscal 2027, through September 9, 2026, we have repurchased 317,503 shares of our common stock at a cost of $11.0 million, or an average cost of $34.65 per share. As of September 9, 2026, we have $18.8 million remaining under our expanded share repurchase authorization. We continue to view share repurchases as an important component of our balanced capital allocation strategy and are committed to deploying excess capital.

Environmental and Other Contingencies

We are subject to certain loss contingencies related to environmental proceedings and other legal matters, including those disclosed in Item 1, Note 7, "Legal Proceedings", to our Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q.

New Accounting Pronouncements

Descriptions of recently issued accounting pronouncements, if any, and the accounting pronouncements adopted by us during the second quarter of Fiscal 2027 are included in Note 1 to our Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q.