Consolidated Financial Statements of Groupe Dynamite Inc.

January 31, 2026 and February 1, 2025

(Expressed in thousands of Canadian dollars, unless otherwise noted)

Independent Auditor's Report

To the Shareholders and the Board of Directors of Groupe Dynamite Inc.

Opinion

We have audited the consolidated financial statements of Groupe Dynamite Inc. (the "Company"), which comprise the consolidated statements of financial position as at January 31, 2026 and February 1, 2025, and the consolidated statements of net earnings and comprehensive income, consolidated statements of changes in equity and consolidated statements of cash flows for the years then ended, and notes to the consolidated financial statements, including material accounting policy information (collectively referred to as the "financial statements").

In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the Company as at January 31, 2026 and February 1, 2025, and its financial performance and its cash flows for the years then ended in accordance with IFRS Accounting Standards as issued by the International Accounting Standards Board ("IASB").

Basis for Opinion

We conducted our audit in accordance with Canadian generally accepted auditing standards ("Canadian GAAS"). Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in Canada, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matter

A key audit matter is a matter that, in our professional judgment, was of most significance in our audit of the consolidated financial statements for the year ended January 31, 2026. This matter was addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on this matter.

Inventories - Refer to Note 2 to the financial statements

Key Audit Matter Description

Inventories are geographically dispersed across Canada and the United States as a result of the Company having numerous stores in these locations as well as a warehouse in Canada and the United States. To validate the existence of the inventory, the Company performs a combination of annual physical inventory counts which take place before, at/or near year-end and cyclical physical inventory counts throughout the year.

Given the importance of inventories to the Company's operations and the performance of audit procedures over a large number of geographically dispersed locations, evaluating the sufficiency of audit evidence over the existence of inventories required an increased extent of audit effort to determine the nature, extent and timing of the physical inventory count procedures to be performed.

How the Key Audit Matter Was Addressed in the Audit

Our audit procedures over the existence of inventories included the following, among others:

Analyzed inventory locations to determine where to attend the Company's physical inventory counts.
Evaluated the effectiveness of certain internal controls over the Company's inventory cycle count process at the warehouse.
For the stores selected for physical inventory counts:
Physically observed management's count procedures over inventory, performed independent sample count procedures and investigated any discrepancies, and
For annual physical inventory counts conducted at a date other than year-end, tested inventory activity in the intervening period between the count date and the year-end date.
Evaluated the overall sufficiency of audit evidence obtained over the existence of inventories.

Other Information

Management is responsible for the other information. The other information comprises Management's Discussion and Analysis.

Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon. In connection with our audit of the financial statements, our responsibility is to read the other information identified above and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated.

We obtained Management's Discussion and Analysis prior to the date of this auditor's report. If, based on the work we have performed on this other information, we conclude that there is a material misstatement of this other information, we are required to report that fact in this auditor's report. We have nothing to report in this regard.

Responsibilities of Management and Those Charged with Governance for the Financial Statements

Management is responsible for the preparation and fair presentation of the financial statements in accordance with IFRS Accounting Standards as issued by the IASB, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, management is responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Those charged with governance are responsible for overseeing the Company's financial reporting process.

Auditor's Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's

report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Canadian GAAS will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

As part of an audit in accordance with Canadian GAAS, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Company to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Plan and perform the group audit to obtain sufficient appropriate audit evidence regarding the financial information of the entities or business units within the Company as a basis for forming an opinion on the financial statements. We are responsible for the direction, supervision and review of the audit work performed for purposes of the group audit. We remain solely responsible for our audit opinion.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated financial statements of the current

period and are therefore the key audit matters. We describe these matters in our auditor's report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

The engagement partner on the audit resulting in this independent auditor's report is Isabelle Brodeur.

/s/ Deloitte LLP¹

Montréal, Québec
March 31, 2026

¹ CPA auditor, public accountancy permit No. A131574

Groupe Dynamite Inc.
Consolidated Statements of Net Earnings and Comprehensive Income
For the Years Ended
(Expressed in thousands of Canadian dollars, except share and per share amounts)

| | Notes | January 31, 2026
$ | February 1, 2025
$ |
| --- | --- | --- | --- |
| Revenue | 5 | 1,310,234 | 958,525 |
| Cost of sales | 6 | 473,713 | 356,933 |
| Gross profit | | 836,521 | 601,592 |
| Selling, general and administrative expenses | 6 | 363,982 | 313,161 |
| Depreciation and amortization | 6 | 94,092 | 76,759 |
| Foreign exchange loss (gain) | | 760 | (534) |
| Operating income | | 377,687 | 212,206 |
| Finance expense | 7 | 30,787 | 34,409 |
| Finance income | 7 | (5,375) | (9,796) |
| Net financing expense | | 25,412 | 24,613 |
| Earnings before income taxes | | 352,275 | 187,593 |
| Income taxes | 8 | 100,102 | 51,825 |
| Net earnings | | 252,173 | 135,768 |
| Other comprehensive income | | | |
| Items that may be reclassified subsequently to net earnings | | | |
| Foreign currency translation adjustments | | (2,885) | 3,118 |
| Gains on cash flow hedges, net of income taxes | 21 | 5,480 | - |
| Total comprehensive income | | 254,768 | 138,886 |
| Earnings per share | | | |
| Basic net earnings per share | 9 | $2.33 | $1.26 |
| Diluted net earnings per share | 9 | $2.20 | $1.25 |
| Weighted average number of shares outstanding (thousands) | | 108,231 | 107,591 |
| Weighted average number of diluted shares outstanding (thousands) | | 114,491 | 108,758 |

The accompanying notes are an integral part of these consolidated financial statements.

Groupe Dynamite Inc.

Consolidated Statements of Financial Position

(Expressed in thousands of Canadian dollars)

	Notes	January 31, 2026	February 1, 2025
		$	$
Assets
Current assets
Cash		82,478	74,195
Receivables	10	21,649	12,993
Income taxes receivable	8	8,014	19,132
Inventories		51,219	44,952
Financial instruments	21	17,287	-
Prepaid expenses		26,142	10,296
Total current assets		206,789	161,568
Non-current assets
Property and equipment	11	164,675	107,465
Right-of-use assets	12	415,036	330,105
Intangible assets	13	14,949	13,049
Deferred tax assets	8	4,439	6,450
Total assets		805,888	618,637
Liabilities
Current liabilities
Accounts payable and accrued expenses	14	144,816	74,436
Income taxes payable	8	55,136	814
Deferred revenue	15	28,803	18,972
Notes payable to parent companies	16	-	10,520
Current portion of lease liabilities	12	32,968	32,479
Total current liabilities		261,723	137,221
Non-current liabilities
Lease liabilities	12	444,280	340,102
Other long-term liabilities	19	5,958	-
Total liabilities		711,961	477,323
Shareholders' equity
Share capital	18	16,663	1,491
Retained earnings		55,980	119,083
Contributed surplus		14,757	16,808
Accumulated other comprehensive income		6,527	3,932
Total shareholders' equity		93,927	141,314
Total liabilities and shareholders' equity		805,888	618,637

Commitments and contingencies 25

Guarantees 27

The accompanying notes are an integral part of these consolidated financial statements.

Approved by the Board of Directors

(signed) Andrew Lutfy

(signed) Linda Drysdale

Montreal, Canada

March 31, 2026

Groupe Dynamite Inc.
Consolidated Statements of Changes in Equity
For the Years Ended
(Expressed in thousands of Canadian dollars)

Notes	Share capital	Retained earnings	Contributed surplus	Accumulated other comprehensive income	Total
	$	$	$	$	$
Balance, February 3, 2024	-	(8,645)	12,759	814	4,928
Net earnings	-	135,768	-	-	135,768
Foreign currency translation adjustments	-	-	-	3,118	3,118
Total comprehensive income	-	135,768	-	3,118	138,886
Re-designation Class G shares	18	500	-	-	500
Stock-based compensation expense	19	-	5,557	-	5,557
Options cancelled	19	-	532	(532)	-
Exercise of stock options	19	991	-	(976)	15
Distribution to shareholders	-	(16,235)	-	-	(16,235)
Refundable taxes	8	-	7,663	-	7,663
Balance, February 1, 2025	1,491	119,083	16,808	3,932	141,314
Net earnings	-	252,173	-	-	252,173
Foreign currency translation adjustments	-	-	-	(2,885)	(2,885)
Gain on financial instruments designated as hedges, net of taxes	21	-	-	5,480	5,480
Total comprehensive income	-	252,173	-	2,595	254,768
Dividend declared	18	-	(252,389)	-	(252,389)
Stock-based compensation expense	19	-	3,904	-	3,904
Exercise of stock options	19	15,447	-	(5,955)	9,492
Shares purchased under normal course issuer bid, net of taxes	18	(275)	(35,108)	-	(35,383)
Provision for repurchase of shares under the automatic share purchase plan	18	-	(27,779)	-	(27,779)
Balance, January 31, 2026	16,663	55,980	14,757	6,527	93,927

The accompanying notes are an integral part of these consolidated financial statements.

Groupe Dynamite Inc.

Consolidated Statements of Cash Flows

For the Years Ended

(Expressed in thousands of Canadian dollars, unless noted otherwise)

	Notes	January 31,2026	February 1,2025
Operating activities		$	$
Net earnings for the period		252,173	135,768
Adjustments for:
Depreciation and amortization	6	94,092	76,759
Amortization of financing costs	7	765	855
Change in fair value of derivative financial instruments	21	(3,738)	(155)
Unrealized loss on foreign exchange		177	1,008
Deferred income taxes	8	(51)	(2,818)
Stock-based compensation expense	19	3,904	5,557
		347,322	216,974
Changes in non-cash working capital components	20	73,415	10,000
Cash generated from operating activities		420,737	226,974
Investing activities
Additions to property and equipment	11	(75,869)	(52,659)
Additions to intangible assets	13	(9,651)	(10,648)
Proceed from promissory note receivable from parent company		-	110,000
Cash from (used in) investing activities		(85,520)	46,693
Financing activities
Repayment of principal on lease liabilities, net of lease incentives received	12	(39,571)	(36,769)
Repayment of notes payable to parent companies	16	(10,520)	-
Proceeds from long-term debt	17	-	7,000
Repayment of long-term debt	17	-	(173,250)
Payment of financing fees		(343)	(181)
Proceeds from exercise of stock options	19	9,492	-
Dividend paid	18	(252,389)	-
Shares repurchased for cancellation	18	(34,689)	-
Redemption of retractable shares		-	(3,000)
Cash used in financing activities		(328,020)	(206,200)
Effect of foreign exchange rate changes on cash		1,086	(1,407)
Net increase in cash		8,283	66,060
Cash, beginning of year		74,195	8,135
Cash, end of period		82,478	74,195
Supplemental information(1)
Income taxes paid		(35,870)	(55,872)
Interest paid		(30,022)	(33,709)
Interest received		5,375	12,468

(1) Amounts paid or received for income taxes and interest were reflected as cash generated from operating activities in the consolidated statements of cash flows.
See additional information presented in Note 20.
The accompanying notes are an integral part of these consolidated financial statements

Groupe Dynamite Inc.

Notes to Consolidated Financial Statements

January 31, 2026 and February 1, 2025

(Expressed in thousands of Canadian dollars, unless noted otherwise)

1 Nature of operations and general information

Groupe Dynamite Inc. (the "Company") designs and distributes women's apparel under the brands Dynamite and Garage and sells its products to markets in Canada, the United States of America and the United Kingdom through corporate stores and online. The Company is indirectly controlled by the Chair and Chief Executive Officer, Andrew Lutfy, through ownership of Canadian entities.

The consolidated financial statements (the "financial statements") were authorized for issue in accordance with a resolution of the Board of Directors on March 31, 2026. The Company is incorporated under the Canada Business Corporations Act and domiciled in Canada. The registered office is located at 5592 Ferrier, Mont-Royal, Quebec, Canada, H4P 1M2. The Company's subordinate voting shares are listed on the Toronto Stock Exchange ("TSX") under the symbol "GRGD".

The Company's fiscal year ends the Saturday closest to January 31. The year ended January 31, 2026 (referred to as Fiscal 2025) and the year ended February 1, 2025 (referred to as Fiscal 2024) both cover a 52-week fiscal period.

2 Material accounting policies

The financial statements have been prepared in accordance with IFRS® Accounting Standards, as issued by the International Accounting Standards Board (IASB) ("IFRS Accounting Standards"). The financial statements have been prepared on the historical cost basis except for certain financial instruments and liabilities for stock-based compensation plan. Historical cost is generally based on the fair value of the consideration given in exchange for goods and services.

Going concern

The financial statements have been prepared on a going concern basis. The going concern basis of presentation assumes that the Company will continue to operate for the foreseeable future and be able to realize its assets and discharge its liabilities and commitments in the normal course of business.

Basis of consolidation

The financial statements include the accounts of the Company and its wholly-owned subsidiaries. Subsidiaries are consolidated from the date the Company obtains control until the date the Company ceases to have control. All intercompany transactions, balances, income and expenses are eliminated upon consolidation. The Company and all of its wholly-owned subsidiaries have the same reporting dates. As at January 31, 2026, and February 1, 2025, the Company had the following subsidiaries:

	Ownership interest
	Countries of incorporation	January 31, 2026	February 1, 2025
Groupe Dynamite Inc.		%	%
Le Garage Boutique Inc.	Canada	100	100
GRG USA Holdings Inc.	USA	100	100
GRG USA LLC	USA	100	100
Garage International (UK) Ltd	United Kingdom	100	100

Groupe Dynamite Inc.
Notes to Consolidated Financial Statements
January 31, 2026 and February 1, 2025
(Expressed in thousands of Canadian dollars, unless noted otherwise)

Functional and presentation currency

The financial statements are presented in Canadian dollars. The functional currency for each entity included in these financial statements is the currency of the primary economic environment in which the entity operates. The functional currency of the Company and its Canadian subsidiaries is the Canadian dollar. The functional currency of the Company's U.S. subsidiaries is the U.S. dollar. The functional currency of the Company's U.K. subsidiary is the British pound.

Translation of foreign currency transactions and items

Monetary assets and liabilities denominated in a foreign currency are translated at the exchange rate in effect on the reporting date, whereas non-monetary assets and liabilities denominated in a foreign currency are translated at the exchange rate in effect at the transaction date and thus at the historical rate. Transactions denominated in a foreign currency are translated at the exchange rate in effect on the transaction date with the exception of depreciation and amortization that are translated at the historical rate, with all gains and losses on exchange being recorded in net earnings.

Assets and liabilities of a foreign operation with a functional currency different from that of the Company are translated into Canadian dollars at the closing rate on the reporting date. Revenue and expenses are translated into Canadian dollars at the exchange rate in effect on the transaction date. Exchange differences are presented as other comprehensive income and recognized in the cumulative foreign currency translation adjustments reserve in accumulated other comprehensive income.

Inventories

Merchandise inventories are measured at the lower of cost, determined on a weighted average basis, and net realizable value. The Company estimates net realizable value as the amount that inventories are expected to be sold, in the ordinary course of business, less the estimated costs of completion and the estimated costs necessary to make the sale. Inventories include both finished goods and finished goods that are currently in transit. Inventory adjustments impacting cost of sales are discussed in Note 6.

Property and equipment

Property and equipment are recorded at cost, less accumulated depreciation and accumulated impairment losses, if any. The cost of an item of property and equipment consists of the purchase price and any costs directly attributable to bringing the asset to the location and condition necessary for its intended use. Purchased software that is integral to the functionality of the related equipment is capitalized as part of that equipment, if any. All day-to-day maintenance costs are recognized in net earnings in selling, general and administrative expenses in the period in which they are incurred.

Gains and losses arising on the disposal or derecognition of individual assets, or a part thereof, are recognized in the consolidated statements of earnings in the period of disposal. All the items of property and equipment in progress are not depreciated until they can be operated in the manner intended by management.

Depreciation is recognized on a straight-line basis using the cost of the item, less its estimated residual value, over its estimated useful life.

Groupe Dynamite Inc.

Notes to Consolidated Financial Statements

January 31, 2026 and February 1, 2025

(Expressed in thousands of Canadian dollars, unless noted otherwise)

Each asset's residual value, useful life and depreciation method are reassessed, and adjusted if appropriate, at the reporting date. The Company has applied the following estimated useful lives:

Computer equipment
3 to 5 years
Equipment
Up to 10 years
Furniture and fixtures
2 to 10 years
Leasehold improvements
Over the lesser of the useful life
and the term of the lease

Intangible assets

Intangible assets are measured at cost less any accumulated amortization and any accumulated impairment losses. Intangible assets are comprised of software and internally-generated intangible assets and their useful lives are assessed to be finite.

An internally-generated intangible asset arising from development (or from the development phase of an internal project) is recognized if, and only if all of the following conditions have been demonstrated:

the technical feasibility of completing the intangible asset so that it will be available for use or sale;
the intention to complete the intangible asset and use or sell it;
the ability to use or sell the intangible asset;
how the intangible asset will generate probable future economic benefits;
the availability of adequate technical, financial and other resources to complete the development and to use or sell the intangible asset; and
the ability to measure reliably the expenditure attributable to the intangible asset during its development.

Intangible assets that are acquired by the Company and have finite useful lives are measured at cost less accumulated amortization and accumulated impairment losses, if any. Amortization is recognized on a straight-line basis using the cost of the item, less its estimated residual value, over its estimated useful life. Amortization of intangible assets not in service begins when they are ready for their intended use. Intangible assets with finite lives are assessed for impairment whenever there is an indication that the intangible asset may be impaired.

The amount initially recognized for internally-generated intangible assets is the sum of the expenditure incurred from the date when the intangible asset first meets the recognition criteria listed above. Where no internally-generated intangible asset can be recognized, development expenditure is recognized in profit or loss in the period in which it is incurred. Subsequent to initial recognition, internally-generated intangible assets are reported at cost less accumulated amortization and accumulated impairment losses, on the same basis as intangible assets that are acquired separately.

The estimated useful lives for the current and comparative periods are as follows:

Software
Maximum of 5 years

Amortization methods, useful lives and residual values are reviewed at each annual reporting date and adjusted prospectively, if appropriate.

Groupe Dynamite Inc.
Notes to Consolidated Financial Statements
January 31, 2026 and February 1, 2025
(Expressed in thousands of Canadian dollars, unless noted otherwise)

Impairment of non-financial assets

All non-financial assets with finite lives are reviewed at each reporting date for indicators that the carrying amount may not be recoverable. When there is an indicator of impairment, an impairment test is carried out. For the purpose of impairment testing, assets that cannot be tested individually are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or groups of assets (defined as "cash-generating unit" or "CGU").

Leases

The Company evaluates whether a contract constitutes or includes a lease at its inception. The lease liability is calculated at the present value of the future fixed and in-substance fixed payments, and variable lease payments dependent on an index or rate over the lease term, minus any lease incentives receivable, discounted using the lessee's incremental borrowing rate, unless the lease's implicit interest rate is readily determinable. Lease liabilities are subsequently measured at amortized cost using the effective interest rate method.

Lease terms are the non-cancellable periods specified in the contract, plus any periods covered by renewal or termination options if the Company is reasonably certain to exercise those options. When the lease contract is modified and the lease modification is not accounted for as a separate lease, lease liabilities are remeasured with a corresponding adjustment to the right-of-use asset.

The cost of the right-of-use assets include the initial measurement of the corresponding lease liabilities, lease payments made at or before the commencement date, and any initial direct costs, less any lease incentives received before the commencement date. The right-of-use assets are subsequently measured at cost and depreciated on a straight-line basis from the date the underlying asset is available for use over the lease term.

The Company is taking the exemption for low-value leases and short-term leases. Variable lease payments that do not depend on an index or rate are not included in the measurement of the lease liabilities and are recognized in cost of sales as incurred. Lease incentives received for variable payment leases, if any, are deferred and amortized as a reduction in recognized variable rent expenses over the related lease terms.

The Company will account for each lease component within the contract as a lease separately from non-lease components as it has not elected to apply the practical expedient available under IFRS 16.

Provisions

Provisions are recognized when the Company has a present legal or constructive obligation as a result of a past event, it is probable that an outflow of economic benefits will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation. If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, where appropriate, the risks specific to the liability.

Share capital

Multiple voting shares and subordinate voting shares are classified as share capital. Incremental costs directly attributable to the issuance of shares or options, if any, are recorded in share capital as a

Groupe Dynamite Inc.
Notes to Consolidated Financial Statements
January 31, 2026 and February 1, 2025
(Expressed in thousands of Canadian dollars, unless noted otherwise)

deduction, net of tax, from the proceeds of the issuance. When subordinate voting shares are repurchased for cancellation under the normal course issuer bid ("NCIB"), the portion of the consideration paid, including directly attributable costs, net of tax, that corresponds to the book value of the shares is recognized as a reduction of share capital. Any excess of the repurchase price over the carrying amount is charged to retained earnings.

Stock-based compensation

Equity-settled stock-based compensation awards are measured at fair value at the grant date using the Black-Scholes option-pricing model. Details regarding the significant inputs into the determination of the fair value of the awards are in Note 19. The fair value determined at the grant date of the equity-settled stock option awards is expensed using the graded vesting method over the vesting period and credited to contributed surplus. An estimate of forfeitures during the vesting period is made at the date of grant, which is adjusted to reflect actual forfeitures. Upon exercise of stock options, the proceeds received from the exercise price, together with the amount previously recognized in contributed surplus, are reclassified to share capital.

The fair value of cash-settled stock-based awards is measured based on the fair value of the liability at each reporting date until the awards are settled. The initial fair value is determined at the grant date by multiplying the number of units expected to vest by the market price of the Company's subordinate voting shares, considering progress toward vesting. Changes in fair value recognized as stock-based compensation expense in the consolidated statement of net earnings over the vesting period.

Revenue recognition

The Company's revenue comes from the sale of products that are recognized at a point in time. The Company recognizes revenue when control of the goods or services has been transferred to the customer. Revenue is measured at the fair value of the amount of consideration to which the Company expects to be entitled to, including variable consideration, if any, to the extent that it is highly probable that a significant reversal will not occur. Revenue reflects the Company's sale of merchandise, less returns and discounts. The Company is impacted by retail seasonality and has traditionally higher sales in the second half of the fiscal year.

Sales of merchandise

Retail revenue is measured at the fair value of the consideration received at the time the sale is made to the customer, net of discounts and an estimated allowance for returns.

Online revenue is recognized at the date of delivery to the customer and measured at the fair value of the consideration received, net of discounts and an estimated allowance for returns. Shipping fees charged to customers are recorded as revenue.

Reported sales exclude sales taxes.

Gift cards

Gift cards sold are accounted for as deferred revenue and the revenue is recognized when the gift cards are redeemed. The Company estimates gift card breakage, to the extent permissible under local laws, and recognizes in revenue the breakage in proportion to actual gift card redemptions.

Groupe Dynamite Inc.
Notes to Consolidated Financial Statements
January 31, 2026 and February 1, 2025
(Expressed in thousands of Canadian dollars, unless noted otherwise)

Loyalty points program

The Company has a loyalty points program that gives rise to a separate performance obligation as it provides a material right to the customer. Transaction price is allocated between the loyalty points and the goods on which the awards were earned based on their relative stand-alone selling prices taking into consideration the estimated redemption percentage. Loyalty points and awards granted under customer loyalty award programs as a result of a sales transaction are recorded as deferred revenue until the loyalty points and awards are redeemed by the customer.

Sales with a right of return

The Company grants rights of return on goods sold to customers. Revenue is reduced by the amount of expected returns, which is determined based on historical patterns of returns, and a related refund liability is recorded within Accounts payable and accrued expenses.

Cost of sales

Cost of sales includes the cost of inventories purchased, shipping and transportation costs, warehousing, distribution costs, credit card fees, labour and the variable and short-term occupancy costs that are excluded from the lease liabilities.

Government grants

Government grants are recorded at their fair value when there is reasonable assurance of receipt and compliance with all associated conditions. Grants that reimburse the Company for specific expenses are recognized in the consolidated statement of earnings and comprehensive income as a reduction of those expenses.

Selling, general and administrative expenses

Selling, general and administrative expenses include store and head office salaries and benefits, professional fees, repairs and maintenance, store supplies, marketing and other expenses.

Employee benefits

Short-term employee benefit obligations, including wages, salaries, compensated absences, and bonuses, are expensed through cost of sales and selling, general and administrative expenses as the related services are rendered. Termination benefits are recognized as an expense when the Company is demonstrably committed, with no realistic possibility of withdrawal, to a formal and detailed plan to terminate employment before the normal retirement date. Benefits payable are classified as current liabilities when payment is due or expected within one year or less; otherwise, they are presented as non-current liabilities within other long-term liabilities.

Income taxes

Income tax expense comprises current and deferred taxes. Current income taxes and deferred income taxes are recognized in net earnings except for items recognized directly in equity or in other comprehensive income.

Groupe Dynamite Inc.
Notes to Consolidated Financial Statements
January 31, 2026 and February 1, 2025
(Expressed in thousands of Canadian dollars, unless noted otherwise)

The Company's income tax expense is based on tax rules and regulations that are subject to interpretation and require estimates and assumptions that may be challenged by taxation authorities.

Current income tax is the expected tax payable or receivable on the taxable income or loss for the period, using tax rates enacted or substantively enacted at the reporting date, and any adjustment to taxes payable in respect of previous years. The Company's estimates of current income tax assets and liabilities are periodically reviewed and adjusted as circumstances warrant, such as for changes to tax laws and administrative guidance, and the resolution of uncertainties through either the conclusion of tax audits or expiration of prescribed time limits within the relevant statutes. The final results of government tax audits and other events may vary materially compared to estimates and assumptions used by management in determining the income tax expense and in measuring current income tax assets and liabilities.

Deferred income tax is recognized in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred income tax assets and liabilities are measured using enacted or substantively enacted income tax rates expected to apply to taxable income in the years in which temporary differences are expected to be recovered or settled. The effect on deferred income tax assets and liabilities of a change in tax rates is included in net earnings in the period that includes the enactment date, except to the extent that it relates to an item recognized either in other comprehensive income or directly in equity in the current or in a previous period.

The Company only offsets income tax assets and liabilities if it has a legally enforceable right to offset the recognized amounts and intends either to settle on a net basis, or to realize the asset and settle the liability simultaneously. A deferred income tax asset is recognized to the extent that it is probable that future taxable profits will be available against which they can be utilized. Deferred income tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realized. Deferred income tax assets and liabilities are recognized on the consolidated statement of financial position under non-current assets or liabilities, irrespective of the expected date of realization or settlement. Current and deferred taxes attributable to amounts recognized directly in equity are also recognized directly in equity.

Earnings per share

The Company presents basic and diluted earnings per share ("EPS") data for its shares. Basic EPS is calculated by dividing the net earnings of the Company by the weighted average number of multiple voting shares and subordinate voting shares outstanding during the period. Since all classes of equity shares have the same distribution rights, the Company calculates EPS as if all the equity shares belong to a single class. Diluted EPS is determined by adjusting the weighted average number of shares outstanding to include additional shares issued from the assumed exercise of share options and other dilutive stock-based awards, if dilutive. The treasury share method is used to evaluate the dilutive effect of share options. Under this method, instruments with a dilutive effect are considered to have been exercised at the beginning of the fiscal year, or at the time of issuance, if later, and the proceeds received are considered to have been used to purchase subordinate voting shares at the average market price during the period.

Groupe Dynamite Inc.
Notes to Consolidated Financial Statements
January 31, 2026 and February 1, 2025
(Expressed in thousands of Canadian dollars, unless noted otherwise)

Financial instruments

Financial assets

Financial assets are initially measured at fair value. On initial recognition, the Company classifies its financial assets as subsequently measured at either amortized cost, fair value through other comprehensive income (FVOCI) or fair value through profit or loss (FVTPL), depending on its business model for managing the financial assets and the contractual cash flow characteristics of the financial assets.

A financial asset is subsequently measured at amortized cost, using the effective interest method and net of any impairment loss, if:

The asset is held within a business model whose objective is to hold assets in order to collect contractual cash flows; and
The contractual terms of the financial asset give rise, on specified dates, to cash flows that are solely payments of principal and/or interest.

If these conditions are not met, the financial asset is subsequently measured at FVTPL or FVOCI, depending on whether hedge accounting is applied, with changes recognized in the consolidated statement of net earnings and comprehensive income in the period in which they arise.

Impairment of financial assets

The Company uses the “expected credit loss” model for calculating impairment and recognizes expected credit losses as a loss allowance in the consolidated statement of financial position if they relate to a financial asset measured at amortized cost. The Company’s receivables, typically short-term receivables with payments received within a 12-month period, do not have a significant financing component. Therefore, the Company recognizes impairment and measures expected credit losses as lifetime expected credit losses. The carrying amount of these assets in the consolidated statement of financial position is stated net of any loss allowance.

Financial liabilities

The Company classifies non-derivative financial liabilities as measured at amortized cost except for financial liabilities at FVTPL. Non-derivative financial liabilities are initially recognized at fair value less any directly attributable transaction costs. Subsequent to initial recognition, these liabilities are measured at amortized cost using the effective interest method or at fair value, depending on the classification of the financial instrument.

Embedded derivatives are separated from a host contract and accounted for separately if the economic characteristics and risks of the host contract and the embedded derivative are not closely related, the terms of the embedded derivative are the same as those of a standalone derivative and the host instrument itself is not recorded at fair value through profit or loss.

Non-hedge derivative financial instruments measured at fair value

Non-hedge derivative financial instruments, including foreign exchange contracts, are recorded as either assets or liabilities measured initially at their fair value. Attributable transaction costs are

Groupe Dynamite Inc.
Notes to Consolidated Financial Statements
January 31, 2026 and February 1, 2025
(Expressed in thousands of Canadian dollars, unless noted otherwise)

recognized in profit or loss as incurred. All derivative financial instruments not designated in a hedge relationship are classified as financial instruments at fair value through profit and loss. Any subsequent change in the fair value of non-hedge foreign exchange contracts is accounted for in consolidated statement of net earnings and comprehensive income for the period in which it arises.

Hedge accounting on derivative financial instruments measured at fair value

The Company uses hedge accounting when it meets the rules for compliance with hedge accounting standards. At inception of the hedge relationship, the Company formally documents all relationships between hedging instruments and hedged items as well as its risk management objectives and its strategy for undertaking various hedge transactions. This process includes linking all hedging instruments to specific assets or liabilities in the consolidated statement of financial position or to specific future transactions. The Company also systematically determines, at the inception of the hedge and thereafter, whether the financial instruments designated as hedges meet the effectiveness requirements.

The Company uses hedge accounting to hedge the interest rate risk of a floating-rate loan. In addition, the Company uses hedge accounting to hedge the equity risk related to the unrecognized obligation of the Restricted Stock Unit (RSU) and Deferred Stock Unit (DSU) plans. When the anticipated transactions, which include the hedged items, result in the recognition of financial assets or liabilities, the change in fair value related to the effective portion of the hedge is recognized in other comprehensive income.

The amounts accumulated in other comprehensive income are reclassified to profit or loss in the period in which the underlying hedged item has an impact on profit or loss. Any ineffective portion is immediately recognized in profit or loss. When the hedging relationship no longer satisfies hedge accounting requirements or when the hedging instrument reaches maturity or is sold, terminated, or exercised, the Company ceases to prospectively apply hedge accounting to this relationship or instrument. If the hedged item is a financial asset or liability, accumulated gains or losses remain in the hedging reserve and are reclassified in profit or loss in the same period in which the underlying hedged item is recognized in profit or loss.

For the year ended January 31, 2026, the Company designated financial instruments as hedging instruments (note 21). The Company had no derivative financial instruments designated as hedging instruments at the end of the year ended February 1, 2025.

Fair Value Measurement

When measuring the fair value of an asset or liability the Company uses observable market data whenever available. Fair values are classified within the fair value hierarchy based on the lowest level input that is significant to the fair value measurement as a whole, as follows:

Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities;
Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices); and
Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).

Fair value estimates are made at a specific point in time, using available information about the asset or liability. These estimates are subjective in nature and often cannot be determined with precision. There was no change in the valuation techniques applied to financial instruments during the current year. Fair values have been determined for measurement and/or disclosure purposes based on recognized methods.

Groupe Dynamite Inc.
Notes to Consolidated Financial Statements
January 31, 2026 and February 1, 2025
(Expressed in thousands of Canadian dollars, unless noted otherwise)

3 Standards, interpretations and amendments adopted during the current fiscal year, or not yet effective

A number of new standards and amendments to standards and interpretations are effective for the current periods, and some are effective in future periods and have not been applied in preparing these consolidated financial statements.

Standards issued and not yet adopted

Amendments to the Classification and Measurement of Financial Instruments (IFRS 7 and IFRS 9)

In May 2024, the IASB issued IFRS 7 and IFRS 9 Amendments to the Classification and Measurement of Financial Instruments. The amendments clarify the date of recognition and derecognition of some financial assets and liabilities with a new exception for some financial liabilities settled through an electronic cash transfer system; clarify and add further guidance for assessing whether a financial asset meets the solely payments of principal and interest (SPPI) criterion; add new disclosures for certain instruments with contractual terms that can change cash flows such as instruments with features linked to the achievement of environment, social and governance (ESG) targets; and update the disclosures for equity instruments designated at fair value through other comprehensive income (FVOCI). IFRS 7 and IFRS 9 amendments applies for annual reporting periods beginning on or after January 1, 2026. Early adoption is permitted. The Company is currently evaluating the impact from the adoption of these amendments on its interim and annual financial statements. The Company doesn't expect the amendments to have a significant impact on its financial statements.

Presentation and Disclosure in Financial Statements (IFRS 18)

In April 2024, the IASB issued IFRS 18 Presentation and Disclosure in Financial Statements to improve reporting of financial performance. IFRS 18 replaces IAS 1, retaining many of its existing requirements while introducing additional guidance. Some paragraphs from IAS 1 have also been relocated to IAS 8 and IFRS 7. In addition, the IASB has made minor amendments to IAS 7 (Statement of Cash Flows) and IAS 33 (Earnings per Share). The new standard introduces requirements to present specified categories and defined subtotals in the statement of profit or loss, to disclose management-defined performance measures (MPMs) in the notes to the financial statements, and to enhance the aggregation and disaggregation of information. IFRS 18 applies for annual reporting periods beginning on or after January 1, 2027. Early adoption is permitted. The Company is currently evaluating the impact from the adoption of IFRS 18 on its interim and annual financial statements.

4 Significant accounting judgments and estimates

The preparation of the financial statements in accordance with IFRS Accounting Standards requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, the disclosure of contingent assets and contingent liabilities at the date of the financial statements and reported amounts of revenue and expenses during the period. These estimates and assumptions are based on historical experience, other relevant factors and expectations of the future and are reviewed regularly.

Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected. Actual results may differ from these estimates.

The judgments, estimates and assumptions, which could result in a material adjustment to the carrying amount of assets and liabilities are discussed below:

Groupe Dynamite Inc.

Notes to Consolidated Financial Statements

January 31, 2026 and February 1, 2025

(Expressed in thousands of Canadian dollars, unless noted otherwise)

Judgments

Lease terms: whether the Company is reasonably certain, at the lease commencement date, it will exercise available renewal or termination options and thus include such options in the lease terms.

Estimates

Return allowances: estimates of expected returns based on historical return patterns.

Inventories: estimates of net realizable value, which requires the Company to utilize estimates related to product quality, damages, future demand, selling prices, and market conditions. The Company periodically reviews its inventories and records a write-down if the cost exceeds net realizable value of inventory, based on the above factors.

Incremental borrowing rate: estimates of the incremental borrowing rate used for calculating lease liabilities and right-of-use-assets. The Company estimates the incremental borrowing rate of each leased asset as the rate of interest that the Company would have to pay to borrow, over a similar term with a similar security, the funds necessary to obtain an asset of similar value to the right-of-use asset in a similar economic environment.

Deferred income tax assets: Management is required to make subjective assessments to determine the amount of deferred income tax assets to be recognized. Deferred income tax assets are recorded to the extent that it is probable that there will be adequate taxable income in the future against which they can be utilized.

Other: other estimates include determining the useful lives and depreciation methods applied to property, plant and equipment and intangible assets with definite lives for the purposes of depreciation and amortization; in accounting for and measuring items such as deferred revenue and provisions; and in measuring certain fair values, stock-based payments, obligations related to the RSU and DSU plans and financial instruments.

5 Revenue

	January 31, 2026	February 1, 2025
	$	$
Retail	1,062,391	786,764
Online	247,843	171,761
	1,310,234	958,525

Groupe Dynamite Inc.

Notes to Consolidated Financial Statements

January 31, 2026 and February 1, 2025

(Expressed in thousands of Canadian dollars, unless noted otherwise)

6 Expenses by nature included in operating income

	January 31, 2026	February 1, 2025
	$	$
Cost of sales
Cost of goods sold, labour and transportation	395,945	300,171
Occupancy costs	77,768	56,762
Total cost of sales	473,713	356,933
Selling, general and administrative expenses
Selling and marketing	78,963	62,077
Wages, salaries and employee benefits	245,937	210,104
Administrative costs	39,082	40,980
Total selling, general and administrative expenses	363,982	313,161
Depreciation and amortization
Depreciation of property and equipment and right-of-use assets	86,047	71,409
Amortization of intangible assets	8,045	5,350
Total depreciation and amortization	94,092	76,759

During the year ended January 31, 2026, the Company recorded a write-down to value inventory to its estimated net realizable value. This resulted in an expense in cost of goods sold of $2,500 ($929 for the year ended February 1, 2025). No inventory adjustments recognized in previous periods were reversed.

7 Net financing expense

	January 31, 2026	February 1, 2025
	$	$
Interest expense	1,640	9,941
Interest on lease liabilities (note 12)	28,382	23,768
Change in fair value of derivative financial instruments (note 21)	-	(155)
Amortization of financing costs	765	855
Finance expense	30,787	34,409
Interest income	5,375	2,036
Interest income promissory note receivable from parent company	-	7,760
Finance income	5,375	9,796
Net financing expense	25,412	24,613

Groupe Dynamite Inc.

Notes to Consolidated Financial Statements

January 31, 2026 and February 1, 2025

(Expressed in thousands of Canadian dollars, unless noted otherwise)

8 Income taxes

The detail of income tax expense in the consolidated statements of earnings is as follows:

	January 31, 2026	February 1, 2025
	$	$
Current tax expense
Current tax on income for the year	99,727	54,265
Adjustments with respect to prior years	426	378
Deferred tax expense	100,153	54,643
Origination and reversal of temporary differences	247	(2,890)
Adjustments with respect to prior years	(298)	72
	(51)	(2,818)
Income tax expense	100,102	51,825

The Company's income tax expense differs from that calculated by applying the combined substantively enacted Canadian federal and provincial statutory income tax rates for the years ended January 31, 2026 and February 1, 2025 of $26.40\%$ and $26.39\%$ , respectively, as follows:

	January 31, 2026		February 1, 2025
	$	%	$	%
Earnings before income tax expense	352,275	-	187,593	-
Income tax using the Company's statutory rate	92,994	26.40	49,498	26.39
Expenses not deductible for tax purposes and other adjustments	2,287	0.65	1,577	0.84
Adjustment with respect of prior years	3,168	0.90	454	0.24
Difference in statutory tax rates of foreign subsidiaries	464	0.13	101	0.05
Effect of foreign exchange	(6)	0.00	195	0.10
Unrecognized tax attributes	457	0.13	-	-
Other	738	0.21	-	-
	100,102	28.42	51,825	27.63

Groupe Dynamite Inc.

Notes to Consolidated Financial Statements

January 31, 2026 and February 1, 2025

(Expressed in thousands of Canadian dollars, unless noted otherwise)

As at January 31, 2026, the Company had unused tax losses of $457 available for offset against future profits in the UK. No deferred tax asset has been recognized in respect of these losses. Under current tax legislation, these losses do not expire.

The tax effects of temporary differences that give rise to deferred tax assets and deferred tax liabilities are as follows:

	January 31, 2026	February 1, 2025
	$	$
Accrued expenses and reserves	9,665	5,728
Lease obligations	20,283	11,254
Carrying value of property and equipment and intangible assets in excess of tax basis	504	739
Other	181	4,171
Total deferred tax assets	30,633	21,892
Deferred tax liabilities
Carrying value of property and equipment and intangible assets in excess of tax basis	25,242	15,442
Other	952	-
Total deferred tax liabilities	26,194	15,442
Net deferred tax assets	4,439	6,450
	January 31, 2026
---	---	---
	Balance as at February 1, 2025	Charged (credited) to consolidated statement of earnings
	$	$
Accrued expenses and reserves	5,728	3,937
Lease obligations	11,254	9,029
Carrying value of property and equipment and intangible	739	(235)
Other deferred tax assets	4,171	(3,990)
Carrying value of property and equipment and intangible	(15,442)	(9,800)
Other deferred tax liabilities	-	1,014
Net deferred tax assets	6,450	(45)

Groupe Dynamite Inc.

Notes to Consolidated Financial Statements

January 31, 2026 and February 1, 2025

(Expressed in thousands of Canadian dollars, unless noted otherwise)

	February 1, 2025
	Balance as at February 3, 2024	Charged (credited) to consolidated statement of earnings	Charged (credited) to other comprehensive income	Balance as at February 1, 2025
	$	$	$	$
Accrued expenses and reserves	3,871	1,857	-	5,728
Lease obligations	5,855	5,399	-	11,254
Carrying value of property and equipment and intangible	612	127	-	739
Other deferred tax assets	2,425	1,746	-	4,171
Carrying value of property and equipment and intangible	(9,161)	(6,281)	-	(15,442)
Other deferred tax liabilities	-	-	-	-
Net deferred tax assets	3,602	2,848	-	6,450

Prior to the Company losing its classification as a private corporation under the Income Tax Act following the Company's initial public offering ("IPO"), a portion of its income taxes was recoverable when taxable dividends were paid to shareholders. These taxes were charged to retained earnings and recoveries were credited to retained earnings. In the current year, the Company recorded a recovery of refundable income taxes in the amount of $nil (Fiscal 2024 – $16,235, relating to the period prior to the IPO). There were no accumulated refundable taxes as at January 31, 2026 or February 1, 2025.

9 Earnings per share

Basic and diluted net earnings per share ("EPS") are calculated by dividing the profit attributable to the Company's shareholders by the weighted average number of shares outstanding during the period, and by the diluted weighted average number of shares outstanding, respectively.

Basic

	January 31, 2026	February 1, 2025
	$	$
Net earnings attributable to shareholders of the Company	252,173	135,768
Weighted average number of shares outstanding (thousands)	108,231	107,591
Basic net earnings per share	$2.33	$1.26

Groupe Dynamite Inc.

Notes to Consolidated Financial Statements

January 31, 2026 and February 1, 2025

(Expressed in thousands of Canadian dollars, unless noted otherwise)

Diluted

	January 31, 2026	February 1, 2025
	$	$
Net earnings attributable to shareholders of the Company	252,173	135,768
Weighted average number of shares outstanding (thousands)	108,231	107,591
Dilutive share-based compensation instruments (thousands)	6,260	1,167
Diluted weighted average number of shares outstanding (thousands)	114,491	108,758
Diluted net earnings per share	$2.20	$1.25

During the year ended January 31, 2026, 77,919 RSUs and 14,617 DSUs were not included in the calculation of diluted weighted average number of shares outstanding as they were anti-dilutive.

10 Receivables

	January 31, 2026	February 1, 2025
	$	$
Credit cards receivables	9,698	6,701
Trade and other receivables	11,109	5,317
Government grant receivable	842	975
Total	21,649	12,993

11 Property and equipment

	Computer equipment	Equipment	Furniture and fixtures	Leasehold improvements	Total
	$	$	$	$	$
Cost
Balance, February 3, 2024^{1}	24,777	7,530	26,246	259,699	318,252
Additions	7,022	191	3,747	42,738	53,698
Disposals and write-offs^{1}	(4)	(132)	(660)	(7,359)	(8,155)
Effect of foreign exchange	348	40	710	12,477	13,575
Balance, February 1, 2025^{1}	32,143	7,629	30,043	307,555	377,370
Additions	12,431	312	6,186	69,179	88,108
Disposals and write-offs	(646)	(45)	(2,523)	(28,149)	(31,363)
Effect of foreign exchange	(383)	-	(642)	(11,338)	(12,363)
Balance, January 31, 2026	43,545	7,896	33,064	337,247	421,752

Groupe Dynamite Inc.

Notes to Consolidated Financial Statements

January 31, 2026 and February 1, 2025

(Expressed in thousands of Canadian dollars, unless noted otherwise)

Accumulated depreciation	Computer equipment	Equipment	Furniture and fixtures	Leasehold improvements	Total
	$	$	$	$	$
Balance, February 3, 2024^{1}	21,242	7,174	20,319	204,098	252,833
Depreciation	3,687	149	2,482	11,189	17,507
Disposals and write-offs^{1}	(4)	(132)	(660)	(7,359)	(8,155)
Effect of foreign exchange	242	40	476	6,962	7,720
Balance, February 1, 2025^{1}	25,167	7,231	22,617	214,890	269,905
Depreciation	6,050	160	3,465	15,158	24,833
Disposals and write-offs	(646)	(45)	(2,523)	(28,149)	(31,363)
Effect of foreign exchange	(258)	-	(409)	(5,631)	(6,298)
Balance, January 31, 2026	30,313	7,346	23,150	196,268	257,077
Carrying amounts
Balance, February 1, 2025	6,975	398	7,426	92,665	107,465
Balance, January 31, 2026	13,232	550	9,914	140,979	164,675

1 The comparative figures have been restated to account for the derecognition of previously disposed assets. This adjustment had no impact to the carrying amount of the related assets.

12 Leases

The Company has the right to use real estate properties for its stores, its two distribution centers and support offices under non-cancellable lease agreements, together with periods covered by an option to extend or terminate, if the Company is reasonably certain it will exercise those options. The initial lease term of stores typically runs for a period of up to approximately 10 years. Leases may include one or more options to renew the lease for additional periods of five years each after the end of the initial term.

Right-of-use assets:

	January 31, 2026	February 1, 2025
	$	$
Balance, beginning of year	330,105	246,240
Additions, net of lease incentives received	134,754	66,543
Modifications	24,501	57,626
Depreciation	(61,214)	(53,902)
Foreign exchange	(13,110)	13,598
Balance, end of year	415,036	330,105

Groupe Dynamite Inc.

Notes to Consolidated Financial Statements

January 31, 2026 and February 1, 2025

(Expressed in thousands of Canadian dollars, unless noted otherwise)

Lease liabilities:

	January 31, 2026	February 1, 2025
	$	$
Balance, beginning of year	372,581	268,336
Additions	133,569	67,100
Modifications	25,804	57,878
Interest expense on lease liabilities	28,382	23,768
Repayment of interest and principal on lease liabilities	(67,953)	(60,537)
Foreign exchange	(15,135)	16,036
Balance, end of year	477,248	372,581
Current portion	32,968	32,479
Long-term portion	444,280	340,102

During the year ended January 31, 2026, the Company expensed $16,358 ($9,386 for the year ended February 1, 2025) of variable lease payments in cost of sales, which are not included in the lease liabilities. The Company also expensed $2,726 ($1,642 for the year ended February 1, 2025) of lease payments relating to short-term leases or leases with underlying low-value asset in cost of sales for which the payments were not included in the lease liabilities.

13 Intangible assets

	January 31, 2026	February 1, 2025
	$	$
Cost
Balance, beginning of year	92,177	81,500
Additions	9,944	10,648
Disposals and write-offs	(386)	-
Effect of foreign exchange	21	29
Balance, end of year	101,756	92,177
Accumulated amortization
Balance, beginning of year	79,128	73,743
Amortization	8,045	5,350
Disposals and write-offs	(338)	-
Effect of foreign exchange	(28)	35
Balance, end of year	86,807	79,128
Carrying amounts	14,949	13,049

Groupe Dynamite Inc.

Notes to Consolidated Financial Statements

January 31, 2026 and February 1, 2025

(Expressed in thousands of Canadian dollars, unless noted otherwise)

14 Accounts payable and accrued expenses

	January 31, 2026	February 1, 2025
	$	$
Trade payables	24,321	19,466
Government remittances	6,700	3,199
Accrued expenses	56,921	30,438
Accrued employee benefits	29,095	21,333
Automatic share purchase plan (note 18)	27,779	-
Total	144,816	74,436

15 Deferred revenue

	January 31, 2026	February 1, 2025
	$	$
Unredeemed gift cards	15,253	12,450
Loyalty points	12,163	5,609
Online sales in transit	1,387	913
Total	28,803	18,972

16 Notes payable to parent companies

	January 31, 2026	February 1, 2025
	$	$
Notes payable to parent companies, non-interest bearing, payable on demand	-	10,520

17 Long-term debt

Credit agreement

The original credit agreement dated November 10, 2022 (the "Original Credit Agreement") was amended and restated on March 25, 2024 (the "Amended and Restated Credit Agreement"), and the maturity date was extended by one year to November 10, 2026. Under the terms of the Amended and Restated Credit Agreement, proceeds from the revolving facility were used to refinance the term facility, such that the total commitments of the revolving facility under the Original Credit Agreement

Groupe Dynamite Inc.
Notes to Consolidated Financial Statements
January 31, 2026 and February 1, 2025
(Expressed in thousands of Canadian dollars, unless noted otherwise)

were increased by an amount of $70,000, and the total commitments under the term facility were decreased by the same amount. As such, the Company was entitled to borrow up to an aggregate amount of $326,250 under the terms of the Amended and Restated Credit Agreement. The Amended and Restated Credit Agreement also allowed for an increase of the revolving facility (accordion feature) up to $100,000.

On November 20, 2024, the Amended and Restated Credit Agreement was further amended and restated (the "Second Amended and Restated Credit Agreement"). Under the terms of the Second Amended and Restated Credit Agreement, the outstanding balance of the term loan ($86,750) was fully repaid by using proceeds from the repayment of the promissory note receivable from a parent company, reducing the term loan borrowings to $nil. The outstanding balance of the revolving credit facility ($7,000) was also fully repaid, reducing the borrowings to $nil. Under the Second Amended and Restated Credit Agreement, the Company can borrow up to an aggregate amount of $312,000 in the form of a revolving credit facility, with up to $30,000 of letter of credit availability under the revolving credit facility, and swingline facilities of up to $30,000 under the revolving credit facility.

On June 16, 2025, the Second Amended and Restated Credit Agreement was further amended, extending the maturity date by 18 months to May 10, 2028.

Funds advanced under the Amended and Restated Credit Agreement bore interest at the Canadian bank prime rate and US bank base rate plus a margin, or at the CORRA rate and SOFR plus a margin (previously bore interest at the Canadian bank prime rate and U.S. bank base rate plus a margin, or at bankers' acceptances rate and CDOR plus a margin). The margin was determined based on a financial ratio. Post June 28, 2024, CDOR rates were no longer being published. As a result, in the second quarter of Fiscal 2024, the Company entered into amendments that included the transition from the CDOR to the CORRA.

During the year ended January 31, 2026, the Company did not borrow any amounts under the credit facility, hence the Company had no outstanding borrowing as of January 31, 2026 (nil as of February 1, 2025).

During the year ended February 1, 2025, the Company repaid $96,250 on its term loan, $77,000 on its revolving facility and had drawings of $7,000 under the revolving facility. The average interest rate for this period was 6.53%.

The credit facilities are secured by first ranking security on all the movable and immovable, present and future assets of the Company, including all cash on hand.

As at January 31, 2026, the Company was compliant with all of its financial ratio requirements.

For more information about the Company's exposure to interest rate and liquidity risks, please refer to note 22.

Groupe Dynamite Inc.

Notes to Consolidated Financial Statements

January 31, 2026 and February 1, 2025

(Expressed in thousands of Canadian dollars, unless noted otherwise)

18 Share capital

During the year ended January 31, 2026, a series of related-party transactions undertaken by the Company led to the conversion of 4,000,000 multiple voting shares into subordinate voting shares, without impacting the Company's total share capital. Following these transactions, 88,615,622 multiple voting shares and 4,000,000 subordinate voting shares were held as treasury shares at the end of the year and were immediately cancelled on February 1, 2026.

On December 8, 2025, the Board of Directors declared a one-time special cash dividend to shareholders of $2.30 per share on its subordinate voting shares and multiple voting shares for a total amount of $252,389. This dividend was paid on December 29, 2025 to shareholders of record at the close of business on December 19, 2025.

On or about November 20, 2024, as part of a Pre-Closing Reorganization, the Company amended its articles to create new share categories: preferred shares, multiple voting shares, and subordinate voting shares. Following this, the Company re-designated all issued and outstanding Class "A" shares as multiple voting shares on the basis of 4.249 Class "A" shares per multiple voting share (the "Share Consolidation"). Finally, 16084915 Canada Inc., 16084958 Canada Inc. and 16084834 Canada Inc. (collectively, the "Selling Shareholders") converted 14,285,715 multiple voting shares into subordinate voting shares to satisfy their obligations under the underwriting agreement entered into in connection with the Company's initial public offering ("IPO"). Following this, the shareholders also granted the underwriters an over-allotment option to purchase up to an additional 2,142,857 subordinate voting shares at a price of $21.00, which was partially exercised, resulting in additional gross proceeds of approximately $13.6 million and the issuance of 671,967 subordinate voting shares.

Prior to the Pre-Closing Reorganization, the authorized equity share capital, consisted of, without par value, an unlimited number of:

Class A shares, participating, voting
Class B shares, participating, non-voting
Class H shares, participating, voting

Since the Pre-Closing Reorganization, the authorized equity share capital, consists of, without par value, an unlimited number of:

Preferred shares, issuable in series, non-voting, entitled to preference over subordinated voting shares and multiple voting shares with respect to payment of dividends and distribution of assets
Multiple voting shares, voting rights at 10 votes per share, entitled to receive dividends on a share-for-share basis, but subject to the rights of the holders of any preferred shares, and convertible on a share-for-share basis into subordinate voting shares
Subordinate voting shares, voting rights at 1 vote per share, entitled to receive dividends on a share-for-share basis, but subject to the rights of the holders of any preferred shares, non-convertible into any other class of shares

Groupe Dynamite Inc.

Notes to Consolidated Financial Statements

January 31, 2026 and February 1, 2025

(Expressed in thousands of Canadian dollars, unless noted otherwise)

Equity shares are issued as fully paid and without par value

	January 31, 2026		February 1, 2025
	Number of shares	Carrying amount	Number of shares	Carrying amount
Class A shares
Beginning balance	-	-	456,977,801	-
Re-designation to multiple voting shares	-	-	(456,977,801)	-
Ending balance	-	-	-	-
Multiple voting shares
Beginning balance	92,615,622	500	-	-
Re-designation from Class A shares	-	-	107,549,494	-
Re-designation from Class G shares	-	-	23,810	500
Conversion to subordinate voting shares	(4,000,000)	(22)	(14,957,682)	-
Ending balance	88,615,622	478	92,615,622	500
Subordinate voting shares
Beginning balance	15,405,043	991	-	-
Conversion from multiple voting shares	4,000,000	22	14,957,682	-
Exercise of stock options	2,601,270	15,447	447,361	991
Purchased and cancelled	(883,100)	(275)	-	-
Ending balance	21,123,213	16,185	15,405,043	991
Equity shares	109,738,835	16,663	108,020,665	1,491

The table above is presented net of the 88,615,622 multiple voting shares and 4,000,000 subordinate voting shares held as treasury shares discussed previously.

Normal course issuer bid ("NCIB")

On April 14, 2025, the Company approved the NCIB, authorizing the purchase of approximately 1.3 million subordinate voting shares, representing approximately 10% of the public float, over the course of twelve months commencing on or around April 17, 2025, and ending at the latest on April 16, 2026. All subordinate voting shares repurchased under the NCIB are cancelled upon their repurchase.

During the year ended January 31, 2026, the Company repurchased 883,100 subordinate voting shares for cancellation under the NCIB at an average price of $39.28 per subordinate voting share for total cash consideration of approximately $34,689.

On April 21, 2025, the Company entered into an automatic share purchase plan ("ASPP") to facilitate repurchases of subordinate voting shares under its NCIB. Under the ASPP, the Company's broker may purchase subordinate voting shares from the effective date of the ASPP until the termination of the ASPP. All purchases of subordinate voting shares made under the ASPP will be included in determining the number of subordinate voting shares purchased under the NCIB. As at January 31, 2026, the Company recognized a provision of $27,779 for the repurchase of subordinate voting shares under the ASPP within accounts payables and accrued expenses as an estimate of the maximum number of shares that could be repurchased during the blackout period.

Groupe Dynamite Inc.

Notes to Consolidated Financial Statements

January 31, 2026 and February 1, 2025

(Expressed in thousands of Canadian dollars, unless noted otherwise)

19 Stock-based compensation

Commencing in 2021, the Company established a stock option plan whereby certain members of management were granted stock options (each, a "Legacy Option") to purchase Class "H" shares in the Company (the "Legacy Option Plan"). The options had a 5-year term, were granted annually, and vested in different tranches over a four-year period from the date of the grant.

In connection with the IPO, in Fiscal 2024, the Legacy Option Plan was amended and restated to extend the expiry date of outstanding options held by non-U.S. citizens such that each option now has a term of 10 years from its original grant date. Additionally, each Legacy Option allowed the holder to acquire 0.235 subordinate voting shares at an exercise price that is 4.249 times the original exercise price.

During Fiscal 2024, the Company established two new equity incentive plans.

The new omnibus equity incentive plan (the "Omnibus Plan") includes stock options, restricted share units ("RSUs"), deferred share units ("DSUs") and performance share units ("PSUs"). The units can be settled in cash or shares at the discretion of the Company. Settlement is currently anticipated to be in cash, with a vesting period of up to three years. The maximum number of subordinate voting shares available for issuance under the Omnibus Plan is 16,000,000. Following establishment of the Omnibus Plan, no additional options were granted under the Legacy Plan.

Under the new Shared Success Program, all of our then current eligible employees, and going forward, all of our newly-hired eligible employees, will receive a grant of DSUs. Each employee's vested DSUs will be settled for cash equal to the market value of the DSUs and related dividend share units when the employee ceases to hold all positions with the Company and its related entities. The units vest on the second anniversary of the grant date.

Stock options

The following number of stock options, along with their respective exercise prices, were issued and outstanding during the periods after giving effect, on a retrospective basis, to the Share Consolidation:

	January 31, 2026		February 1, 2025
	Number of stock options	Weighted average exercise price	Number of stock options	Weighted average exercise price
Outstanding, at beginning of period	7,441,441	$3.87	8,327,273	$3.85
Granted	742,074	$13.93	531,280	$4.29
Exercised	(2,634,765)	$3.78	(545,304)	$3.74
Cancelled	(210,342)	$3.99	(871,808)	$4.04
Outstanding, at the end of period	5,338,408	$5.30	7,441,441	$3.87

Groupe Dynamite Inc.

Notes to Consolidated Financial Statements

January 31, 2026 and February 1, 2025

(Expressed in thousands of Canadian dollars, unless noted otherwise)

Information relating to share options outstanding and vested as at January 31, 2026 is as follows:

Stock options outstanding					Stock options exercisable
Range of exercise prices	Number issued	Weighted average remaining contractual life (years)	Weighted average exercise price	Number issued	Weighted average remaining contractual life (years)	Weighted average exercise price
$0.01 – $4.00	3,195,650	4.4	$3.74	2,878,690	4.3	$3.74
$4.01 - $8.00	1,400,684	7.1	$4.29	586,365	7.1	$4.29
$8.01 - $14.00	737,691	9.2	$13.75	-	-	-
$14.01 - $82.00	4,383	9.9	$43.63	-	-	-
	5,338,408	5.8	$5.30	3,465,055	4.8	$3.83

Key inputs into the determination of the fair value of the stock options granted include the following:

	January 31, 2026	February 1, 2025
	$	$
Weighted average share price at grant date	$13.93	$4.29
Expected volatility(1)	59.3%	64.0%
Expected option life	7 years	5 years
Dividend yield	-	-
Risk-free interest rate	3.00%	2.90%

(1) The Company has determined expected volatility based on comparable entities from the fashion retail industry sector of the TMX and NYSE. Volatility has been calculated using the daily historical closing values of those entities selected for the period of time prior to the grant date of the equity share option, or similar instrument, that is equal in length to the expected term of the equity share option or similar instrument.

Groupe Dynamite Inc.

Notes to Consolidated Financial Statements

January 31, 2026 and February 1, 2025

(Expressed in thousands of Canadian dollars, unless noted otherwise)

Stock-based compensation awards

As of January 31, 2026 the following awards were granted under the new equity incentive plans.

	January 31, 2026
	RSUs		DSUs
	Number of awards	Weighted average grant date fair value $	Number of awards	Weighted average grant date fair value $
Outstanding, at beginning of period	-	-	-	-
Granted	290,363	$19.06	345,996	$19.88
Cancelled	(20,495)	$15.67	(111,947)	$15.52
Reinvested	7,477	$19.28	4,658	$19.26
Outstanding, at the end of period	277,345	$19.32	238,707	$21.92

As at January 31, 2026, the fair value of the RSU liability is $3,707 and the fair value of the DSU liability is $3,869. The long-term portion of these liabilities is presented under other long-term liabilities.

Stock-based compensation expense

Total compensation cost recognized for stock-based compensation awards is:

	January 31, 2026	February 1, 2025
	$	$
Equity-settled plans
Stock options	3,904	5,557
Cash-settled plans
Restricted share units	3,707	-
Deferred share units	3,869	-
Total return swap (note 21)	(3,738)	-
Total compensation cost	7,742	5,557

Groupe Dynamite Inc.

Notes to Consolidated Financial Statements

January 31, 2026 and February 1, 2025

(Expressed in thousands of Canadian dollars, unless noted otherwise)

20 Additional information relating to the consolidated statement of cash flows

The changes in operating assets and liabilities are detailed as follows:

	January 31, 2026	February 1, 2025
	$	$
Receivables	(9,657)	1,950
Inventories	(7,235)	(5,522)
Prepaid expenses and other financial instruments	(22,147)	2,693
Accounts payable and accrued expenses	37,600	12,900
Income taxes	64,286	(17,199)
Deferred revenue	10,568	4,658
Notes payable to parent companies	-	10,520
	73,415	10,000

The Company entered into the following transactions which had no impact on cash flows:

	January 31, 2026	February 1, 2025
	$	$
Acquisition of property and equipment and intangible assets included in accounts payable and accrued expenses	16,333	3,801

21 Fair value of financial instruments

The Company determines the fair value of its financial instruments using market-observable data to the extent it is available. These financial instruments include cash, receivables, total return swap receivable, accounts payable and accrued expenses, notes payable to parent companies and derivative financial instruments.

Cash, receivables, accounts payable and accrued expenses and notes payable to parent companies are all financial instruments measured at amortized cost. The fair value of these instruments approximate their carrying value due to their short-term maturities or market interest rates.

Total return swap receivable

The total return swap is a contractual agreement to exchange payments based on a specified notional amount and the underlying financial assets for a specific period. The total return to the Company comprises the return generated by the underlying notional shares of the Company, including any appreciation in their market value, net of any decline in value, if applicable. The total return swap agreement requires the exchange of net contractual payments periodically with the exchange of the notional principal amounts on which the payments are based. The method of recognizing the resulting gain or loss depends on the application of hedge accounting. The total return swap receivable reflects

Groupe Dynamite Inc.
Notes to Consolidated Financial Statements
January 31, 2026 and February 1, 2025
(Expressed in thousands of Canadian dollars, unless noted otherwise)

the market value of the swap agreement and is determined by reference to the value of the underlying notional shares of the Company at each reporting date. The total return swap receivable has been classified as level 2.

During the year ended January 31, 2026, the Company used total return swaps to hedge the risk of changes in future cash flows related to the RSU and DSU plans. The Company has funded the total return swap with prepayments to the counterparty of the initial notional amount of the swap. These financial instruments are designated as part of a cash flow hedge against the portion of the unrecognized obligation of the RSU and DSU plans. The total return swaps receivable is recorded in financial instruments. As at January 31, 2026, the carrying amount of the hedging instrument was $17,287 ($nil as at February 1, 2025).

During the year ended January 31, 2026, the effective portion of the changes in fair values of the hedging instrument resulted in a gain of $7,446 which has been recorded in other comprehensive income. There was no hedge ineffectiveness recorded in net earnings.

Derivative financial instruments

The Company may enter into foreign currency forward contracts and interest rate swaps. Derivative financial instruments are initially recognized at fair value on the date a derivative contract is entered into and are subsequently remeasured at their fair value. The fair value of foreign currency forward instruments is determined using valuation techniques and calculated as the present value of estimated future cash flows using interest rate yield curve as well as market data. The derivative financial instruments reflect the estimated amounts that the Company would receive or pay to transfer the contracts in an orderly transaction between market participants at each reporting date. The method of recognizing the resulting gain or loss depends on whether the derivative is designated as a hedging instrument and, if so, the nature of the item being hedged. The derivative financial instruments have been classified as level 2.

As at January 31, 2026, the carrying amount of the hedging instrument was $nil ($nil as at February 1, 2025).

During the year ended February 1, 2025, the Company recorded unrealized gains of $155 for the change in fair value for these contracts in net earnings and $200 realized losses arising from the settlement of derivative contracts.

There were no transfers between the levels of the fair value of hierarchy for the periods ended January 31, 2026 and February 1, 2025.

22 Financial risk management

The Company is exposed to a variety of financial risks in the normal course of operations including currency, interest rate, equity price, credit and liquidity risk, as described below. The Company's overall risk management program and business practices seek to minimize any potential adverse effects on the Company's consolidated financial performance.

Groupe Dynamite Inc.

Notes to Consolidated Financial Statements

January 31, 2026 and February 1, 2025

(Expressed in thousands of Canadian dollars, unless noted otherwise)

Currency risk

Currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. The Company's foreign exchange risk is largely limited to currency fluctuations between the Canadian and U.S. dollars. The exposure comes mainly from its operations in the United States and from other working capital balances denominated in U.S. dollars. The Company also has minimal exposure to the British pound, the euro, Chinese Renminbi, the Bangladeshi Taka and the Cambodian Riel.

The Company uses foreign currency forward contracts to manage foreign exchange risk relating to the U.S. dollars. As at January 31, 2026, the Company had no outstanding foreign currency forward contracts to purchase U.S. dollars ($nil as at February 1, 2025). Since the Company does not use hedge accounting for its foreign exchange contracts, these contracts, if any, are recorded on the consolidated balance sheet at fair value. The Company's foreign exchange exposure of monetary financial assets and financial liabilities denominated in U.S. dollars is as follows:

	January 31, 2026	February 1, 2025
	$	$
Cash	17,560	32,893
Receivables	5,453	305
Income taxes receivable	8,014	6,196
Accounts payable and accrued expenses	(23,191)	(8,403)
Income taxes payable	-	(445)
Lease liabilities	(279,135)	(214,067)
Net position	(271,299)	(183,521)

Interest rate risk

Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market interest rates. Financial instruments that potentially subject the Company to cash flow interest rate risk include financial assets and liabilities with variable interest rates and cash. The Company might be exposed to interest rate fluctuations due to its revolving facilities having floating interest rates. As of January 31, 2026, there was no outstanding balance, resulting in minimal risk exposure.

Equity price risk

The Company is exposed to equity price risk in connection with its cash-settled RSUs and DSUs, as an increase in the price of its subordinate voting shares results in a higher potential cash outflow. A liability is recognized for the estimated future settlement of these awards, measured at fair value at each reporting date. To mitigate the variability in cash flows associated with these obligations, the Company enters into total return swaps, which substantially offset the related exposure. Such contracts are entered into only with major financial institutions.

Groupe Dynamite Inc.
Notes to Consolidated Financial Statements
January 31, 2026 and February 1, 2025
(Expressed in thousands of Canadian dollars, unless noted otherwise)

Credit risk

Credit risk is the risk of an unexpected loss if a counterparty to a financial instrument fails to meet its contractual obligations. Financial instruments that potentially subject the Company to credit risk consist of cash, receivables and derivative contracts used to hedge for market risks. The Company offsets credit risks associated with cash and derivative contracts by dealing only with major financial institutions that have high credit ratings.

The Company is exposed to credit risk on receivables from trade and other receivables (note 10). There is also minimal credit risk from retail customers who pay by credit card, recoveries of credits from suppliers for returned or damaged products, and receivables from other companies for sales of products, gift cards and other services. The amounts disclosed in the consolidated statements of financial position are net of allowance for expected credit losses, if any. Credit card payments have minimal credit risk, and the limited number of corporate receivables is closely monitored. The Company did not recognize any allowance for credit losses in either Fiscal 2025 or Fiscal 2024.

Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting obligations associated with financial liabilities. The Company's approach to managing liquidity risk is to ensure, to the extent possible, that it will always have sufficient liquidity to meet liabilities when due and does so by monitoring its cash balances and cash flows generated from operations to meet its requirements. The Company's liquidity follows a seasonal pattern based on the timing of inventory purchases and capital expenditures. The Company is exposed to this risk mainly in respect of its accounts payable and accrued expenses and lease liabilities. As disclosed in note 17, the Company has access to credit facilities totaling $312,000 ($312,000 as at February 1, 2025), of which $nil was drawn as at January 31, 2026 ($nil as at February 1, 2025).

The Company expects to finance its growth in store base and its store renovations through cash on hand, cash flows from operations, as well as its credit facilities.

Groupe Dynamite Inc.

Notes to Consolidated Financial Statements

January 31, 2026 and February 1, 2025

(Expressed in thousands of Canadian dollars, unless noted otherwise)

The following table summarizes the obligations, and the effect such obligations are expected to have on liquidity and cash flows in future periods.

	Total	Less than 1 year	Between 1 and 3 years	Between 3 and 5 years	More than 5 years
January 31, 2026	$	$	$	$	$
Accounts payable and accrued expenses	144,816	144,816	-	-	-
Other long-term liabilities	5,958	-	5,958	-	-
Lease liabilities obligations^{1}	759,475	91,351	182,216	156,897	329,011
	910,249	236,167	188,174	156,897	329,011
February 1, 2025
Accounts payable and accrued expenses	74,436	74,436	-	-	-
Notes payable to parent companies	10,520	10,520	-	-	-
Lease liabilities obligations^{1}	505,767	64,469	132,039	104,464	204,795
	590,723	149,425	132,039	104,464	204,795

(1) Lease liabilities obligations include interest and principal amounts.

23 Capital management

The Company's objectives when managing capital are to ensure sufficient liquidity to enable the financing of capital projects thereby facilitating its growth and maintaining a flexible capital structure that optimizes the cost of capital and preserves the ability to meet financial obligations. The Company defines capital as its credit facility and shareholders' equity. The Company's primary uses of capital are to finance new store and renovation projects and other investment projects. The Company currently funds these requirements out of its internally generated cash flows. The Company is subject to financial covenants pursuant to its revolving credit facility presented in note 17.

24 Related party transactions

The Company leases certain locations, including its head office and specific retail sites, from entities under common control. As at January 31, 2026, lease liabilities owing to these entities totaled $18,698 ($21,167 as at February 1, 2025). During the year ended January 31, 2026, occupancy costs charged by entities under common control that were not included in lease liabilities totaled $1,607 ($835 for the year ended February 1, 2025).

The Company also recognized $nil ($7,760 for the year ended February 1, 2025) for interest received on a promissory note receivable and $89 ($527 for the year ended February 1, 2025) for the administrative services rendered to a parent entity.

These transactions are recorded at the amount of consideration paid as established and agreed to by the related parties, which approximate market value. The related parties and the parent company are

Groupe Dynamite Inc.

Notes to Consolidated Financial Statements

January 31, 2026 and February 1, 2025

(Expressed in thousands of Canadian dollars, unless noted otherwise)

entities under the control of the Chair and Chief Executive Officer, Andrew Lutfy.

Remuneration of the key management of the Company

Key management consists of individuals holding the title of Senior Vice President or higher. Their remuneration is as follows:

	January 31, 2026	February 1, 2025
	$	$
Wages and salaries	5,572	3,009
Stock-based compensation expense	5,158	1,976
	10,730	4,985

25 Commitments and contingencies

Commitments

In the normal course of business, the Company delivered irrevocable standby letters of credit issued by highly rated financial institutions to various third parties to indemnify them in the event the Company does not perform its contractual obligations. As at January 31, 2026, standby letters of credit outstanding amounted to $10,364 ($11,140 as at February 1, 2025).

Our third-party manufacturers acquire raw materials on our behalf for use in upcoming production in the normal course of business. As of January 31, 2026, we have purchase obligations totaling $19,036 ($16,202 as at February 1, 2025), which reflect commitments for fabric expected to be utilized in the next seasons.

Contingencies

In the ordinary course of business, the Company is exposed to various proceedings and claims. The Company assesses the validity of these proceedings and claims. Provisions are made whenever a penalty seems probable and a reliable estimate of the amount can be made. Management believes that any settlement arising from claims will not have a significant effect on the Company's consolidated financial position or overall trends in consolidated results of operations.

26 Segmented information

The Company defines an operating segment on the same basis that it uses to evaluate performance internally and to allocate resources by the Chief Operating Decision Maker (the "CODM"). The Company has determined that the Chief Executive Officer with the Chief Operating Officer, and Chief

Groupe Dynamite Inc.

Notes to Consolidated Financial Statements

January 31, 2026 and February 1, 2025

(Expressed in thousands of Canadian dollars, unless noted otherwise)

Financial Officer, are its CODM and there is one operating segment. Therefore, the Company reports as a single segment. This includes all sales channels accessed by the Company's clients, including sales through the Company's website and sales at the Company's boutiques.

The following table summarizes revenue by geographic location of the Company's customers:

	January 31, 2026	February 1, 2025
	$	$
Canada	573,455	473,878
United States	736,779	484,647
Revenue	1,310,234	958,525

The Company's non-current, non-financial assets (property and equipment, intangible assets and right-of-use assets) are geographically located as follows:

	January 31, 2026	February 1, 2025
	$	$
Canada	208,718	183,889
United States	353,595	266,730
United Kingdom	32,347	-
	594,660	450,619

27 Guarantees

Some agreements to which the Company is a party, specifically those related to the leasing of its premises, include indemnification provisions that may require the Company to make payments to a third party for a breach of fundamental representation and warranty terms in the agreements, with respect to matters such as corporate status, title of assets, environmental issues, consents to transfer, employment matters, litigation, taxes payable and other potential material obligations. The maximum potential number of future payments that the Company could be required to make under these indemnification provisions is not reasonably quantifiable as certain indemnifications are not subject to a monetary limitation. As at January 31, 2026, management does not believe that these indemnification provisions would require any material cash payment by the Company nor insurance coverage, estimated by management to be reasonable and sufficient, in order to minimize the previously mentioned risks.

As many of these guarantees will not be drawn upon, these amounts are not indicative of future cash requirements. No material loss is anticipated by reason of such agreements and guarantees and no amounts have been accrued in the Company's financial statements with respect to these guarantees.

The Company indemnifies its directors and officers against claims reasonably incurred and resulting

Groupe Dynamite Inc.
Notes to Consolidated Financial Statements
January 31, 2026 and February 1, 2025
(Expressed in thousands of Canadian dollars, unless noted otherwise)

from the performance of their services to the Company, and maintains liability insurance for its directors and officers as well as those of its subsidiaries.

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Groupe Dynamite Inc. — Audit Report / Information 2026

48545_rns_2026-04-01_adcf282b-eb3b-4b83-abaf-8033c12dc91d.pdf

Consolidated Financial Statements of Groupe Dynamite Inc.

Independent Auditor's Report

Opinion

Basis for Opinion

Key Audit Matter

Inventories - Refer to Note 2 to the financial statements

Key Audit Matter Description

How the Key Audit Matter Was Addressed in the Audit

Other Information

Responsibilities of Management and Those Charged with Governance for the Financial Statements

Auditor's Responsibilities for the Audit of the Financial Statements

1 Nature of operations and general information

2 Material accounting policies

Going concern

Basis of consolidation

Functional and presentation currency

Translation of foreign currency transactions and items

Inventories

Property and equipment

Intangible assets

Impairment of non-financial assets

Leases

Provisions

Share capital

Stock-based compensation

Revenue recognition

Sales of merchandise

Gift cards

Loyalty points program

Sales with a right of return

Cost of sales

Government grants

Selling, general and administrative expenses

Employee benefits

Income taxes

Earnings per share

Financial instruments

Financial assets

Impairment of financial assets

Financial liabilities

Non-hedge derivative financial instruments measured at fair value

Hedge accounting on derivative financial instruments measured at fair value

Fair Value Measurement

3 Standards, interpretations and amendments adopted during the current fiscal year, or not yet effective

Amendments to the Classification and Measurement of Financial Instruments (IFRS 7 and IFRS 9)

Presentation and Disclosure in Financial Statements (IFRS 18)

4 Significant accounting judgments and estimates

Judgments

Estimates

5 Revenue

6 Expenses by nature included in operating income

7 Net financing expense

8 Income taxes

9 Earnings per share

10 Receivables

11 Property and equipment

12 Leases

Right-of-use assets:

Lease liabilities:

13 Intangible assets

14 Accounts payable and accrued expenses

15 Deferred revenue

16 Notes payable to parent companies

17 Long-term debt

Credit agreement

18 Share capital

Normal course issuer bid ("NCIB")

19 Stock-based compensation

Stock options

Stock-based compensation awards

Stock-based compensation expense

20 Additional information relating to the consolidated statement of cash flows

21 Fair value of financial instruments

Total return swap receivable

Derivative financial instruments

22 Financial risk management

Currency risk

Groupe Dynamite Inc. Audit Report / Information 2026