TARIFF REFUNDS

6 Months Ended

Aug. 02, 2026

Commitments and Contingencies Disclosure [Abstract]

TARIFF REFUNDS

TARIFF REFUND

In April 2026, we filed for a refund of the tariffs we paid in fiscal 2025 and fiscal 2026 assessed under International Emergency Economic Powers Act (“IEEPA”) in an aggregate amount of $197.8 million. During the second quarter of fiscal 2026, we applied the loss recovery model and determined that the receipt of the IEEPA refund was probable and estimable and we recorded a refund receivable.

During the second quarter of fiscal 2026, we recorded (i) a reduction of cost of goods sold of $167.8 million related to refunds received for tariffs that have been previously expensed and (ii) related interest income of $6.3 million. This income was partially offset by (i) a provision of $47.5 million to reimburse certain merchandise vendors that previously provided tariff-related concessions to the Company and (ii) a one-time tariff-related employee recognition cost of $10.0 million, in the form of a discretionary 401(k) contribution to all eligible employees.

As of August 2, 2026, we deferred $29.3 million of the tariff refund income as a reduction of merchandise inventories in our Condensed Consolidated Balance Sheet, which we anticipate recognizing as a reduction to cost of goods sold in the third quarter of fiscal 2026. In the second quarter of fiscal 2026, we collected cash refunds of $200.2 million, which includes related interest, and substantially all of our initial refund claim of $197.8 million has been collected as of August 2, 2026, with a remaining tariff refund receivable of $3.2 million in our Condensed Consolidated Balance Sheet.