Document
Document - USD ($) | 12 Months Ended | ||
Jan. 29, 2022 | Mar. 25, 2022 | Jul. 31, 2020 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Jan. 29, 2022 | ||
Document Transition Report | false | ||
Entity File Number | 001-12107 | ||
Entity Registrant Name | Abercrombie & Fitch Co. | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 31-1469076 | ||
Entity Address, Address Line One | 6301 Fitch Path | ||
Entity Address, City or Town | New Albany | ||
Entity Address, State or Province | OH | ||
Entity Address, Postal Zip Code | 43054 | ||
City Area Code | 614 | ||
Local Phone Number | 283-6500 | ||
Title of 12(b) Security | Class A Common Stock, $0.01 Par Value | ||
Trading Symbol | ANF | ||
Security Exchange Name | NYSE | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 2,215,030,905 | ||
Entity Common Stock, Shares Outstanding | 50,625,727 | ||
Documents Incorporated by Reference | Portions of the Registrant’s definitive proxy statement for the Annual Meeting of Stockholders, scheduled to be held on June 8, 2022, are incorporated by reference into Part III of this Annual Report on Form 10-K. The Registrant expects to file such definitive proxy statement with the Securities and Exchange Commission within 120 days of its fiscal year ended January 29, 2022 . | ||
Entity Central Index Key | 0001018840 | ||
Amendment Flag | false | ||
Document Fiscal Year Focus | 2021 | ||
Document Fiscal Period Focus | FY | ||
Current Fiscal Year End Date | --01-29 | ||
ICFR Auditor Attestation Flag | true |
Audit Information
Audit Information | 12 Months Ended |
Jan. 29, 2022 | |
Audit Information [Abstract] | |
Auditor Name | PricewaterhouseCoopers LLP |
Auditor Firm ID | 238 |
Auditor Location | Columbus, Ohio |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Income (Loss) - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Jan. 29, 2022 | Jan. 30, 2021 | Feb. 01, 2020 | |
Income Statement [Abstract] | |||
Net sales | $ 3,712,768 | $ 3,125,384 | $ 3,623,073 |
Cost of sales, exclusive of depreciation and amortization | 1,400,773 | 1,234,179 | 1,472,155 |
Gross profit | 2,311,995 | 1,891,205 | 2,150,918 |
Stores and distribution expense | 1,429,476 | 1,391,584 | 1,551,243 |
Marketing, general and administrative expense | 536,815 | 463,843 | 464,615 |
Total flagship store exit (benefits) charges | (1,153) | (11,636) | 47,257 |
Asset impairment, exclusive of flagship store exit charges | 12,100 | 72,937 | 19,135 |
Other operating income, net | (8,327) | (5,054) | (1,400) |
Operating income (loss) | 343,084 | (20,469) | 70,068 |
Interest expense, net | 34,110 | 28,274 | 7,737 |
Income (loss) before income taxes | 308,974 | (48,743) | 62,331 |
Income tax expense | 38,908 | 60,211 | 17,371 |
Net income (loss) | 270,066 | (108,954) | 44,960 |
Less: Net income attributable to noncontrolling interests | $ 7,056 | 5,067 | 5,602 |
Net income (loss) attributable to A&F | $ (114,021) | $ 39,358 | |
Net income (loss) per share attributable to A&F | |||
Basic | $ 4.41 | $ (1.82) | $ 0.61 |
Diluted | $ 4.20 | $ (1.82) | $ 0.60 |
Weighted-average shares outstanding | |||
Basic | 59,597 | 62,551 | 64,428 |
Diluted | 62,636 | 62,551 | 65,778 |
Dividends declared per share | $ 0 | $ 0.28 | $ 0.80 |
Other comprehensive income (loss) | |||
Foreign currency translation, net of tax | $ (22,917) | $ 12,195 | $ (5,080) |
Derivative financial instruments, net of tax | 10,518 | (5,616) | (1,354) |
Other comprehensive (loss) income | (12,399) | 6,579 | (6,434) |
Comprehensive income (loss) | 257,667 | (102,375) | 38,526 |
Less: Comprehensive income attributable to noncontrolling interests | 7,056 | 5,067 | 5,602 |
Comprehensive Income (Loss), Net of Tax, Attributable to Parent | 250,611 | (107,442) | 32,924 |
Net sales | 3,712,768 | 3,125,384 | 3,623,073 |
Cost of Goods and Service, Excluding Depreciation, Depletion, and Amortization | 1,400,773 | 1,234,179 | 1,472,155 |
Gross Profit | 2,311,995 | 1,891,205 | 2,150,918 |
Stores And Distribution Expense | 1,429,476 | 1,391,584 | 1,551,243 |
Marketing General And Administrative Expense | 536,815 | 463,843 | 464,615 |
Total flagship store exit (benefits) charges | (1,153) | (11,636) | 47,257 |
Asset impairment, exclusive of flagship store exit charges | 12,100 | 72,937 | 19,135 |
Other Operating Income (Expense), Net | 8,327 | 5,054 | 1,400 |
Operating Income (Loss) | 343,084 | (20,469) | 70,068 |
Interest Income (Expense), Net | (34,110) | (28,274) | (7,737) |
Income from Continuing Operations Before Taxes | 308,974 | (48,743) | 62,331 |
Tax expense related to correction of errors | 38,908 | 60,211 | 17,371 |
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest | 270,066 | (108,954) | 44,960 |
Net income attributable to noncontrolling interests | $ 7,056 | 5,067 | 5,602 |
Net income attributable to A&F | $ (114,021) | $ 39,358 | |
Net income (loss) per basic share attributable to A&F | $ 4.41 | $ (1.82) | $ 0.61 |
Net income (loss) per diluted share attributable to A&F | $ 4.20 | $ (1.82) | $ 0.60 |
Basic | 59,597 | 62,551 | 64,428 |
Weighted Average Number of Shares Outstanding, Diluted | 62,636 | 62,551 | 65,778 |
Foreign currency translation adjustments, net of tax | $ (22,917) | $ 12,195 | $ (5,080) |
Derivative financial instruments, net of tax | 10,518 | (5,616) | (1,354) |
Other Comprehensive Income (Loss) | (12,399) | 6,579 | (6,434) |
Comprehensive income (loss) | 257,667 | (102,375) | 38,526 |
Less: Comprehensive income attributable to noncontrolling interests | 7,056 | 5,067 | 5,602 |
Comprehensive income (loss) attributable to A&F | 250,611 | (107,442) | 32,924 |
Retained earnings | |||
Income Statement [Abstract] | |||
Net income (loss) attributable to A&F | 263,010 | (114,021) | 39,358 |
Net income attributable to A&F | $ 263,010 | $ (114,021) | $ 39,358 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) shares in Thousands, $ in Thousands | Jan. 29, 2022 | Jan. 30, 2021 | |
Current assets: | |||
Cash and equivalents | $ 823,139 | $ 1,104,862 | |
Receivables | 69,102 | 83,857 | |
Inventories | [1] | 525,864 | 404,053 |
Other current assets | 89,654 | 68,857 | |
Total current assets | 1,507,759 | 1,661,629 | |
Property and equipment, net | 508,336 | 550,587 | |
Operating Lease, Right-of-Use Asset | 698,231 | 893,989 | |
Other assets | 225,165 | 208,697 | |
Total assets | 2,939,491 | 3,314,902 | |
Current liabilities: | |||
Accounts payable | 374,829 | 289,396 | |
Accrued expenses | 395,815 | 396,365 | |
Operating Lease, Liability, Current | 222,823 | 248,846 | |
Income taxes payable | 21,773 | 24,792 | |
Total current liabilities | 1,015,240 | 959,399 | |
Operating Lease, Liability, Noncurrent | 697,264 | 957,588 | |
Long-term liabilities: | |||
Long-term portion of borrowings, net | 303,574 | 343,910 | |
Other liabilities | 86,089 | 104,693 | |
Total long-term liabilities | 1,086,927 | 1,406,191 | |
Stockholders’ equity | |||
Class A Common Stock - $0.01 par value: 150,000 shares authorized and 103,300 shares issued for all periods presented | 1,033 | 1,033 | |
Paid-in capital | 413,190 | 401,283 | |
Retained earnings | 2,386,156 | 2,149,470 | |
Accumulated other comprehensive loss, net of tax (“AOCL”) | (114,706) | (102,307) | |
Treasury stock, at average cost: 50,315 and 40,901 shares at January 29, 2022 and January 30, 2021, respectively | (1,859,583) | (1,512,851) | |
Total A&F stockholders’ equity | 826,090 | 936,628 | |
Noncontrolling interests | 11,234 | 12,684 | |
Total stockholders’ equity | 837,324 | 949,312 | |
Total liabilities and stockholders’ equity | $ 2,939,491 | $ 3,314,902 | |
Treasury Stock, Shares | 50,315 | 40,901 | |
Common Stock, Shares, Issued | 103,300 | 103,300 | |
[1] | Includes $142.7 million and $106.0 million of inventory in transit, merchandise owned by the Company that has not yet been received at a Company distribution center, as of January 29, 2022 and January 30, 2021, respectively. |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares shares in Thousands | Jan. 29, 2022 | Jan. 30, 2021 |
Class of Stock [Line Items] | ||
Treasury Stock, Shares | 50,315 | 40,901 |
Common Stock, Shares, Issued | 103,300 | 103,300 |
Stockholders’ equity | ||
Treasury Stock shares, at Average Cost | 50,315 | 40,901 |
Common Stock, shares issued | 103,300 | 103,300 |
Common Class A | ||
Class of Stock [Line Items] | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common Stock, shares authorized | 150,000 | 150,000 |
Stockholders’ equity | ||
Common Stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common Stock, shares authorized | 150,000 | 150,000 |
Consolidated Statement of Stock
Consolidated Statement of Stockholders' Equity - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock | Paid-in capital | Noncontrolling interest | Retained earnings | Treasury stock | AOCI Including Portion Attributable to Noncontrolling Interest [Member] | |
Stockholders' Equity Attributable to Noncontrolling Interest | $ 9,721 | |||||||
Total stockholders’ equity | $ 1,218,621 | |||||||
Beginning Balance at Feb. 02, 2019 | $ 1,033 | $ 405,379 | $ 2,418,544 | $ (1,513,604) | $ (102,452) | |||
Beginning balance, shares outstanding at Feb. 02, 2019 | 66,227 | 37,073 | ||||||
Effect on Unearned Revenue Liabilities from New Accounting Principal in Period of Adoption | (75,165) | |||||||
Net income attributable to noncontrolling interests | 5,602 | |||||||
Net income attributable to A&F | 39,358 | 39,358 | ||||||
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest | 44,960 | |||||||
Purchase of common stock | (63,542) | |||||||
Purchase of common stock, shares | 3,957 | 3,957 | ||||||
Dividends | (51,510) | (51,510) | ||||||
Share-based compensation issuances and exercises | (6,804) | [1] | (14,403) | (17,482) | $ (25,081) | |||
Share-based compensation issuances and exercises, shares | (516) | (516) | ||||||
Share-based compensation expense | 14,007 | 14,007 | ||||||
Derivative financial instruments, net of tax | (1,354) | (1,354) | ||||||
Foreign currency translation adjustments, net of tax | (5,080) | (5,080) | ||||||
Distributions to noncontrolling interests, net | $ (2,955) | (2,955) | ||||||
Ending Balance at Feb. 01, 2020 | $ 1,033 | 404,983 | 2,313,745 | $ (1,552,065) | (108,886) | |||
Ending balance, shares outstanding at Feb. 01, 2020 | 62,786 | 40,514 | ||||||
Common stock, dividends declared (in dollars per share) | $ 0.80 | |||||||
Stockholders' Equity Attributable to Noncontrolling Interest | 12,368 | |||||||
Total stockholders’ equity | $ 1,071,178 | |||||||
Net income attributable to noncontrolling interests | 5,067 | |||||||
Net income attributable to A&F | (114,021) | (114,021) | ||||||
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest | (108,954) | |||||||
Purchase of common stock | $ (15,172) | |||||||
Purchase of common stock, shares | 15,172 | 1,397 | 1,397 | |||||
Dividends | $ (12,556) | (12,556) | ||||||
Share-based compensation issuances and exercises | (5,694) | [1] | (22,382) | (37,698) | $ (54,386) | |||
Share-based compensation issuances and exercises, shares | (1,010) | (1,010) | ||||||
Share-based compensation expense | 18,682 | 18,682 | ||||||
Derivative financial instruments, net of tax | (5,616) | (5,616) | ||||||
Foreign currency translation adjustments, net of tax | 12,195 | 12,195 | ||||||
Distributions to noncontrolling interests, net | (4,751) | (4,751) | ||||||
Ending Balance at Jan. 30, 2021 | $ 936,628 | $ 1,033 | 401,283 | 2,149,470 | $ (1,512,851) | (102,307) | ||
Ending balance, shares outstanding at Jan. 30, 2021 | 62,399 | 40,901 | ||||||
Common stock, dividends declared (in dollars per share) | $ 0.28 | |||||||
Stockholders' Equity Attributable to Noncontrolling Interest | $ 12,684 | 12,684 | ||||||
Total stockholders’ equity | 949,312 | |||||||
Net income attributable to noncontrolling interests | 7,056 | |||||||
Net income attributable to A&F | 263,010 | |||||||
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest | 270,066 | |||||||
Purchase of common stock | (377,290) | |||||||
Purchase of common stock, shares | 10,200 | 10,200 | ||||||
Dividends | 0 | 0 | ||||||
Share-based compensation issuances and exercises | (13,163) | [1] | (17,397) | (26,324) | $ (30,558) | |||
Share-based compensation issuances and exercises, shares | (786) | (786) | ||||||
Share-based compensation expense | 29,304 | |||||||
Derivative financial instruments, net of tax | 10,518 | |||||||
Foreign currency translation adjustments, net of tax | (22,917) | |||||||
Distributions to noncontrolling interests, net | (8,506) | (8,506) | ||||||
Ending Balance at Jan. 29, 2022 | $ 826,090 | $ 1,033 | $ 413,190 | $ 2,386,156 | $ (1,859,583) | $ (114,706) | ||
Ending balance, shares outstanding at Jan. 29, 2022 | 52,985 | 50,315 | ||||||
Common stock, dividends declared (in dollars per share) | $ 0 | |||||||
Stockholders' Equity Attributable to Noncontrolling Interest | $ 11,234 | $ 11,234 | ||||||
Total stockholders’ equity | $ 837,324 | |||||||
[1] | (1) Classified within other financing activities on the Consolidated Statements of Cash Flows. |
Consolidated Statement of Sto_2
Consolidated Statement of Stockholders' Equity (Parenthetical) - $ / shares | 12 Months Ended | ||
Jan. 29, 2022 | Jan. 30, 2021 | Feb. 01, 2020 | |
Statement of Stockholders' Equity [Abstract] | |||
Common stock, dividends declared (in dollars per share) | $ 0 | $ 0.28 | $ 0.80 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | ||
Jan. 29, 2022 | Jan. 30, 2021 | Feb. 01, 2020 | |
Operating activities | |||
Net income (loss) | $ 270,066,000 | $ (108,954,000) | $ 44,960,000 |
Adjustments to reconcile net income (loss) to net cash provided by operating activities | |||
Depreciation and amortization | 144,035,000 | 166,281,000 | 173,625,000 |
Asset impairment | 12,100,000 | 72,937,000 | 22,364,000 |
Loss on disposal | 5,020,000 | 16,353,000 | 6,298,000 |
Deferred income taxes | (31,922,000) | 23,986,000 | 9,150,000 |
Share-based compensation | 29,304,000 | 18,682,000 | 14,007,000 |
Changes in assets and liabilities | |||
Inventories | (123,221,000) | 33,312,000 | 2,270,000 |
Accounts payable and accrued expenses | 77,910,000 | 186,747,000 | 10,821,000 |
Increase decrease in operating lease liabilities | (93,827,000) | (55,700,000) | 46,442,000 |
Income taxes | (3,086,000) | 10,753,000 | (5,473,000) |
Other assets | 396,000 | 38,632,000 | (20,137,000) |
Other liabilities | (14,340,000) | 1,889,000 | (3,642,000) |
Net cash provided by operating activities | 277,782,000 | 404,918,000 | 300,685,000 |
Investing activities | |||
Purchases of property and equipment | (96,979,000) | (101,910,000) | (202,784,000) |
Net cash used for investing activities | (96,979,000) | (51,910,000) | (202,784,000) |
Financing activities | |||
Purchases of common stock | (377,290,000) | (15,172,000) | (63,542,000) |
Repayments of Lines of Credit | 0 | (233,250,000) | (20,000,000) |
Dividends paid | 0 | (12,556,000) | (51,510,000) |
Other financing activities | (20,623,000) | (11,987,000) | (12,821,000) |
Net cash (used for) provided by financing activities | (446,898,000) | 69,717,000 | (147,873,000) |
Effect of foreign currency exchange rates on cash | (23,694,000) | 9,168,000 | (3,593,000) |
Net (decrease) increase in cash and equivalents, and restricted cash and equivalents | (289,789,000) | 431,893,000 | (53,565,000) |
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents | 834,368,000 | 1,124,157,000 | 692,264,000 |
Supplemental information related to non-cash activities | |||
Purchases of property and equipment not yet paid at end of period | 29,932,000 | 16,250,000 | 44,199,000 |
Right-of-Use Asset Obtained in Exchange for Operating Lease Liability | 29,241,000 | (38,279,000) | 391,753,000 |
Supplemental information related to cash activities | |||
Cash paid for interest | 28,413,000 | 26,629,000 | 17,514,000 |
Cash paid for income taxes | 74,709,000 | 15,210,000 | 20,717,000 |
Cash received from income tax refunds | 2,292,000 | 4,650,000 | 8,773,000 |
Operating Lease, Payments | 364,842,000 | 316,992,000 | 422,850,000 |
Withdrawal from Rabbi Trust Assets | 0 | 50,000,000 | 0 |
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest | 270,066,000 | (108,954,000) | 44,960,000 |
Depreciation, Depletion and Amortization, Nonproduction | 144,035,000 | 166,281,000 | 173,625,000 |
Restructuring Costs and Asset Impairment Charges | 12,100,000 | 72,937,000 | 22,364,000 |
Gain (Loss) on Disposition of Property Plant Equipment | (5,020,000) | (16,353,000) | (6,298,000) |
Current Deferred Income Tax Expense (Benefit) | 31,922,000 | (23,986,000) | (9,150,000) |
Share-based Payment Arrangement, Noncash Expense | 29,304,000 | 18,682,000 | 14,007,000 |
Increase (Decrease) in Inventories | 123,221,000 | (33,312,000) | (2,270,000) |
Increase (Decrease) in Accounts Payable and Accrued Liabilities | 77,910,000 | 186,747,000 | 10,821,000 |
Increase decrease in operating lease liabilities | (93,827,000) | (55,700,000) | 46,442,000 |
Increase (Decrease) in Income Taxes Payable | (3,086,000) | 10,753,000 | (5,473,000) |
Increase (Decrease) in Other Operating Assets | (396,000) | (38,632,000) | 20,137,000 |
Other liabilities | (14,340,000) | 1,889,000 | (3,642,000) |
Net Cash Provided by (Used in) Operating Activities | 277,782,000 | 404,918,000 | 300,685,000 |
Payments to Acquire Property, Plant, and Equipment | 96,979,000 | 101,910,000 | 202,784,000 |
Withdrawal from Rabbi Trust Assets | 0 | 50,000,000 | 0 |
Net Cash Provided by (Used in) Investing Activities | (96,979,000) | (51,910,000) | (202,784,000) |
Repayments of Lines of Credit | 0 | 233,250,000 | 20,000,000 |
Payments for Repurchase of Common Stock | 377,290,000 | 15,172,000 | 63,542,000 |
Payments of Ordinary Dividends, Common Stock | 0 | 12,556,000 | 51,510,000 |
Change in Outstanding Checks and Other | 20,623,000 | 11,987,000 | 12,821,000 |
Net Cash Provided by (Used in) Financing Activities | (446,898,000) | 69,717,000 | (147,873,000) |
Effect of Exchange Rate on Cash and Cash Equivalents | (23,694,000) | 9,168,000 | (3,593,000) |
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents, Period Increase (Decrease), Including Exchange Rate Effect | (289,789,000) | 431,893,000 | (53,565,000) |
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents | 834,368,000 | 1,124,157,000 | 692,264,000 |
Construction in Progress Expenditures Incurred but Not yet Paid | 29,932,000 | 16,250,000 | 44,199,000 |
Right-of-Use Asset Obtained in Exchange for Operating Lease Liability | 29,241,000 | (38,279,000) | 391,753,000 |
Cash paid for interest | 28,413,000 | 26,629,000 | 17,514,000 |
Cash paid for income taxes | 74,709,000 | 15,210,000 | 20,717,000 |
Cash received from income tax refunds | 2,292,000 | 4,650,000 | 8,773,000 |
Operating Lease, Payments | 364,842,000 | 316,992,000 | 422,850,000 |
Proceeds from Notes Payable | 0 | 350,000,000 | 0 |
Proceeds from Short-term Debt | 0 | 210,000,000 | 0 |
Repayments of Short-term Debt | 0 | (210,000,000) | 0 |
Payments of Debt Issuance Costs | (2,016,000) | (7,318,000) | 0 |
Repayments of Notes Payable | (46,969,000) | 0 | 0 |
Gain (Loss) on Extinguishment of Debt | 5,347,000 | 0 | $ 0 |
RentAbatementsReceived | $ 17,900,000 | $ 30,700,000 |
NATURE OF BUSINESS
NATURE OF BUSINESS | 12 Months Ended |
Jan. 29, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
NATURE OF BUSINESS | NATURE OF BUSINESSAbercrombie & Fitch Co. (“A&F”), a company incorporated in Delaware in 1996, through its subsidiaries (collectively, A&F and its subsidiaries are referred to as “Abercrombie & Fitch” or the “Company”), is a global, digitally led omnichannel retailer. The Company offers a broad assortment of apparel, personal care products and accessories for men, women and kids, which are sold primarily through its digital channels and Company-owned stores, as well as through various third-party arrangements. The Company’s two brand-based operating segments are Hollister, which includes the Company’s Hollister, Gilly Hicks and Social Tourist brands, and Abercrombie, which includes the Company’s Abercrombie & Fitch and abercrombie kids brands. These five brands share a commitment to offering unique products of enduring quality and exceptional comfort that allow customers around the world to express their own individuality and style. The Company operates primarily in North America, Europe and Asia. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Jan. 29, 2022 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Principles of consolidation The accompanying Consolidated Financial Statements include historical financial statements of, and transactions applicable to, the Company and reflect its financial position, results of operations and cash flows. The Company has interests in an Emirati business venture and in a Kuwaiti business venture with Majid al Futtaim Fashion L.L.C. (“MAF”) and in a United States of America (the “U.S.”) business venture with Dixar L.L.C. (“Dixar”), each of which meets the definition of a variable interest entity (“VIE”). The purpose of the business ventures with MAF is to operate stores in the United Arab Emirates and Kuwait and the purpose of the business venture with Dixar is to hold the intellectual property related to the Social Tourist brand. The Company is deemed to be the primary beneficiary of these VIEs; therefore, the Company has consolidated the operating results, assets and liabilities of these VIEs, with the noncontrolling interests’ (“NCI”) portions of net income presented as net income attributable to NCI on the Consolidated Statements of Operations and Comprehensive Income (Loss) and MAF’s portion of equity presented as NCI on the Consolidated Balance Sheets. Fiscal year The Company’s fiscal year ends on the Saturday closest to January 31. This typically results in a 52 week year, but occasionally gives rise to an additional week, resulting in a 53 week year. Fiscal years are designated in the Consolidated Financial Statements and notes by the calendar year in which the fiscal year commences. All references herein to the Company’s fiscal years are as follows: Fiscal year Year ended/ ending Number of weeks Fiscal 2019 February 1, 2020 52 Fiscal 2020 January 30, 2021 52 Fiscal 2021 January 29, 2022 52 Fiscal 2022 January 28, 2023 52 Use of estimates The preparation of financial statements, in conformity with U.S. generally accepted accounting principles (“GAAP”), requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of net sales and expenses during the reporting period. Due to the inherent uncertainty involved with estimates, actual results may differ. The extent to which the current outbreak of coronavirus disease (“COVID-19”) continues to impact the Company’s business and financial results will depend on numerous evolving factors including, but not limited to: the duration and spread of COVID-19 and the emergence of new variants of coronavirus, the availability and acceptance of effective vaccines, boosters or medical treatments, the impact of COVID-19 on the length or frequency of store closures, and the extent to which COVID-19 impacts worldwide macroeconomic conditions including interest rates, the speed of the economic recovery, and governmental, business and consumer reactions to the pandemic. The Company’s assessment of these, as well as other factors, could impact management's estimates and result in material impacts to the Company’s consolidated financial statements in future reporting periods. Cash and equivalents A summary of cash and equivalents on the Consolidated Balance Sheets follows: (in thousands) January 29, 2022 January 30, 2021 Cash (1) $ 762,187 $ 796,994 Cash equivalents: (2) Time deposits 11,643 11,589 Money market funds 49,309 296,279 Cash and equivalents $ 823,139 $ 1,104,862 (1) Primarily consists of amounts on deposit with financial institutions. (2) Investments with original maturities of less than three months. Consolidated Statements of Cash Flows reconciliation The following table provides a reconciliation of cash and equivalents and restricted cash and equivalents to the amounts shown on the Consolidated Statements of Cash Flows: (in thousands) Location January 29, 2022 January 30, 2021 February 1, 2020 Cash and equivalents Cash and equivalents $ 823,139 $ 1,104,862 $ 671,267 Long-term restricted cash and equivalents Other assets 11,229 14,814 18,696 Short-term restricted cash and equivalents Other current assets — 4,481 2,301 Restricted cash and equivalents (1) $ 11,229 $ 19,295 $ 20,997 Cash and equivalents and restricted cash and equivalents $ 834,368 $ 1,124,157 $ 692,264 (1) Restricted cash and equivalents primarily consists of amounts on deposit with banks that are used as collateral for customary non-debt banking commitments and deposits into trust accounts to conform to standard insurance security requirements. Receivables Receivables on the Consolidated Balance Sheets primarily include credit card receivables, lessor construction allowances, value added tax (“VAT”) receivables, trade receivables, income tax receivables and other tax credits or refunds. As part of the normal course of business, the Company has approximately three to four days of proceeds from sales transactions outstanding with its third-party credit card vendors at any point. The Company classifies these outstanding balances as credit card receivables. Lessor construction allowances are recorded for certain store lease agreements for improvements completed by the Company. VAT receivables are payments the Company has made on purchases of goods that will be recovered as those goods are sold. Trade receivables are amounts billed by the Company to wholesale, franchise and licensing partners in the ordinary course of business. Income tax receivables represent refunds of certain tax payments along with net operating loss and credit carryback claims for which the Company expects to receive refunds within the next 12 months. Inventories Inventories on the Consolidated Balance Sheets are valued at the lower of cost and net realizable value on a weighted-average cost basis. The Company reduces the carrying value of inventory through a lower of cost and net realizable value adjustment, the impact of which is reflected in cost of sales, exclusive of depreciation and amortization, on the Consolidated Statements of Operations and Comprehensive Income (Loss). The lower of cost and net realizable value adjustment is based on the Company’s consideration of multiple factors and assumptions including demand forecasts, current sales volumes, expected sell-off activity, composition and aging of inventory, historical recoverability experience and risk of obsolescence from changes in economic conditions or customer preferences. Additionally, as part of inventory valuation, inventory shrinkage estimates based on historical trends from actual physical inventories are made each quarter that reduce the inventory value for lost or stolen items. The Company performs physical inventories on a periodic basis and adjusts the shrink estimate accordingly. Refer to Note 6, “ INVENTORIES .” The Company’s global sourcing of merchandise is generally negotiated and settled in U.S. Dollars. Other current assets Other current assets on the Consolidated Balance Sheets consists of: prepaid expenses including those related to rent, information technology maintenance and taxes; current store supplies; derivative contracts; short-term restricted cash and other. Property and equipment, net Depreciation of property and equipment is computed for financial reporting purposes on a straight-line basis using the following service lives: Category of property and equipment Service lives Information technology 3 - 7 years Furniture, fixtures and equipment 3 - 15 years Leasehold improvements 3 - 15 years Other property and equipment 3 - 20 years Buildings 30 years Leasehold improvements are amortized over either their respective lease terms or their service lives, whichever is shorter. The cost of assets sold or retired and the related accumulated depreciation are removed from the accounts with any resulting gain or loss included in net income on the Consolidated Statements of Operations and Comprehensive Income (Loss). Maintenance and repairs are charged to expense as incurred. Major remodels and improvements that extend the service lives of the related assets are capitalized. The Company capitalizes certain direct costs associated with the development and purchase of internal-use software within property and equipment. Capitalized costs are amortized on a straight-line basis over the estimated useful lives of the software, generally not exceeding seven years. Refer to Note 7, “ PROPERTY AND EQUIPMENT, NET .” Leases The Company determines if an arrangement is an operating lease at inception. For new operating leases, the Company recognizes an asset for the right to use a leased asset and a liability based on the present value of remaining lease payments over the lease term on the lease commencement date. The commencement date for new leases is when the lessor makes the leased asset available for use by the Company, typically the possession date. As the rates implicit in the Company’s leases are not readily determinable, the Company uses its incremental borrowing rate based on the transactional currency of the operating lease and the lease term for the initial measurement of the operating lease right-of-use asset and liability. For operating leases existing before the adoption of the current lease accounting standard, the Company used its incremental borrowing rate as of the date of adoption, determined using the remaining lease term as of the date of adoption. For operating leases commencing on or after the adoption of the current lease accounting standard, the incremental borrowing rate is determined using the remaining lease term as of the lease commencement date. The Company has elected to combine lease and nonlease components for all current classes of underlying leased assets. The measurement of operating lease right-of-use assets and liabilities includes amounts related to: • Lease payments made prior to the lease commencement date; • Incentives from landlords received by the Company for signing a lease, including construction allowances or deferred lease credits paid to the Company by landlords towards construction and tenant improvement costs, which are presented as a reduction to the right-of-use asset recorded; • Fixed payments related to operating lease components, such as rent escalation payments scheduled at the lease commencement date; • Fixed payments related to nonlease components, such as taxes, insurance, and maintenance costs; and • Unamortized initial direct costs incurred in conjunction with securing a lease, including key money, which are amounts paid directly to a landlord in exchange for securing the lease, and leasehold acquisition costs, which are amounts paid to parties other than the landlord, such as an existing tenant, to secure the desired lease. The measurement of operating lease right-of-use assets and liabilities excludes amounts related to: • Costs expected to be incurred to return a leased asset to its original condition, also referred to as asset retirement obligations, which are classified within other liabilities on the Consolidated Balance Sheets; • Variable payments related to operating lease components, such as contingent rent payments made by the Company based on performance, the expense of which is recognized in the period incurred on the Consolidated Statements of Operations and Comprehensive Income (Loss); • Variable payments related to nonlease components, such as taxes, insurance, and maintenance costs, the expense of which is recognized in the period incurred in the Consolidated Statements of Operations and Comprehensive Income (Loss); and • Leases not related to Company-operated retail stores with an initial term of 12 months or less, the expense of which is recognized in the period incurred in the Consolidated Statements of Operations and Comprehensive Income (Loss). Certain of the Company’s operating leases include options to extend the lease or to terminate the lease. The Company assesses these operating leases and, depending on the facts and circumstances, may or may not include these options in the measurement of the Company’s operating lease right-of-use assets and liabilities. Generally, the Company’s options to extend its operating leases are at the Company’s sole discretion and at the time of lease commencement are not reasonably certain of being exercised. There may be instances in which a lease is being renewed on a month-to-month basis and, in these instances, the Company will recognize lease expense in the period incurred in the Consolidated Statements of Operations and Comprehensive Income (Loss) until a new agreement has been executed. Upon the signing of the renewal agreement, the Company recognizes an asset for the right to use the leased asset and a liability based on the present value of remaining lease payments over the lease term. Amortization and interest expense related to operating lease right-of-use assets and liabilities are generally calculated on a straight-line basis over the lease term. Amortization and interest expense related to previously impaired operating lease right-of-use assets are calculated on a front-loaded pattern. Depending on the nature of the operating lease, amortization and interest expense are primarily recorded within stores and distribution expense, marketing, general and administrative expense, or flagship store exit (benefits) charges on the Consolidated Statements of Operations and Comprehensive Income (Loss). The Company’s operating lease agreements do not contain any material residual value guarantees or material restrictive covenants. In addition, the Company does not have any sublease arrangements with any related party. The Company adopted Accounting Standards Update No. 2016-02, Leases (Topic 842) and its subsequent amendments effective February 3, 2019. Adoption of this standard resulted in the Company’s total assets and total liabilities on the Consolidated Balance Sheet each increasing by approximately $1.2 billion on the date of adoption, primarily due to the recognition of operating lease right-of-use assets and liabilities. Certain of these newly-established operating lease right-of-use assets related to previously impaired stores and, therefore, were assessed for impairment upon adoption. To the extent that the initial carrying amount for each such lease right-of-use asset was greater than its fair value, an asset impairment charge was recognized as an adjustment to the opening balance of retained earnings on the date of adoption. As a result, the Company recognized a cumulative adjustment decreasing the opening balance of retained earnings by $0.1 billion on the date of adoption. Refer to Note 8, “ LEASES .” Long-lived asset impairment For the purposes of asset impairment, the Company’s long-lived assets, primarily operating lease right-of-use assets, leasehold improvements, furniture, fixtures and equipment, are grouped with other assets and liabilities at the store level, which is the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. On at least a quarterly basis, management reviews the Company’s asset groups for indicators of impairment, which include, but are not limited to, material declines in operational performance, a history of losses, an expectation of future losses, adverse market conditions, store closure or relocation decisions, and any other events or changes in circumstances that would indicate the carrying amount of an asset group might not be recoverable. If an asset group displays an indicator of impairment, it is tested for recoverability by comparing the sum of the estimated future undiscounted cash flows attributable to the asset group to the carrying amount of the asset group. This recoverability test requires management to make assumptions and judgments related, but not limited, to management’s expectations for future cash flows from operating the store. The key assumption used in developing these projected cash flows used in the recoverability test is estimated sales growth rate. If the sum of the estimated future undiscounted cash flows attributable to an asset group is less than its carrying amount, and it is determined that the carrying amount of the asset group is not recoverable, management determines if there is an impairment loss by comparing the carrying amount of the asset group to its fair value. Fair value of an asset group is based on the highest and best use of the asset group, often using a discounted cash flow model that utilizes Level 3 fair value inputs. The key assumptions used in the Company’s fair value analysis are estimated sales growth rate and comparable market rents. An impairment loss is recognized based on the excess of the carrying amount of the asset group over its fair value. Refer to Note 9, “ ASSET IMPAIRMENT .” Other assets Other assets on the Consolidated Balance Sheets consist primarily of the Company’s trust-owned life insurance policies held in the irrevocable rabbi trust (the “Rabbi Trust”), deferred tax assets, long-term deposits, intellectual property, long-term restricted cash and equivalents, long-term supplies and various other assets. Rabbi Trust assets The Rabbi Trust includes amounts, restricted in their use, to meet funding obligations to participants in the Abercrombie & Fitch Co. Nonqualified Savings and Supplemental Retirement Plan I, the Abercrombie & Fitch Co. Nonqualified Savings and Supplemental Retirement Plan II and the Supplemental Executive Retirement Plan. The Rabbi Trust assets primarily consist of trust-owned life insurance policies which are recorded at cash surrender value and are included in other assets on the Consolidated Balance Sheets. The change in cash surrender value of the life insurance policies in the Rabbi Trust is recorded in interest expense, net on the Consolidated Statements of Operations and Comprehensive Income (Loss). Refer to Note 10, “ RABBI TRUST ASSETS .” Intellectual property Intellectual property primarily includes trademark assets associated with the Company’s international operations, consisting of finite-lived and indefinite-lived intangible assets. The Company’s finite-lived intangible assets are amortized over a useful life of 10 to 20 years. Income taxes Income taxes are calculated using the asset and liability method. Deferred tax assets and liabilities are recognized based on the difference between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using current enacted tax rates in effect for the years in which those temporary differences are expected to reverse. Inherent in the determination of the Company’s income tax liability and related deferred income tax balances are certain judgments and interpretations of enacted tax law and published guidance with respect to applicability to the Company’s operations. The Company is subject to audit by taxing authorities, usually several years after tax returns have been filed, and the taxing authorities may have differing interpretations of tax laws. Valuation allowances are established to reduce deferred tax assets to the amount expected to be realized when it is more likely than not that some portion or all of the deferred tax assets will not be realized. The Company records tax expense or benefit that does not relate to ordinary income in the current fiscal year discretely in the period in which it occurs. Examples of such types of discrete items include, but are not limited to: changes in estimates of the outcome of tax matters related to prior years, assessments of valuation allowances, return-to-provision adjustments, tax-exempt income, the settlement of tax audits and changes in tax legislation and/or regulations. Tax benefits from uncertain tax positions are recognized when it is more likely than not that the position will be sustained upon examination, including resolutions of any related appeals or litigation processes, based on the technical merits. The amount recognized is measured as the largest amount of tax benefit that is greater than 50 percent likely of being realized upon settlement. The Company’s effective tax rate includes the impact of reserve provisions and changes to reserves on uncertain tax positions that are not more likely than not to be sustained upon examination as well as related interest and penalties. A number of years may elapse before a particular matter, for which the Company has established a reserve, is audited and finally resolved. The number of years with open tax audits varies depending on the tax jurisdiction. While it is often difficult to predict the final outcome or the timing of resolution of any particular tax matter, the Company believes that its reserves reflect the probable outcome of known tax contingencies. Unfavorable settlement of any particular issue may require use of the Company’s cash. Favorable resolution would be recognized as a reduction to the Company’s effective tax rate in the period of resolution. The Company recognizes accrued interest and penalties related to uncertain tax positions as a component of income tax expense on the Consolidated Statements of Operations and Comprehensive Income (Loss). Refer to Note 12, “ INCOME TAXES .” Foreign currency translation and transactions The functional currencies of the Company’s foreign subsidiaries are generally the respective local currencies in the countries in which they operate. Assets and liabilities denominated in foreign currencies are translated into U.S. Dollars (the reporting currency) at the exchange rate prevailing at the balance sheet date. Equity accounts denominated in foreign currencies are translated into U.S. Dollars at historical exchange rates. Revenues and expenses denominated in foreign currencies are translated into U.S. Dollars at the monthly average exchange rate for the period. Gains and losses resulting from foreign currency transactions are included in other operating income, net; whereas, translation adjustments and gains and losses associated with measuring inter-company loans of a long-term investment nature are reported as an element of other comprehensive income (loss). Derivative instruments The Company is exposed to risks associated with changes in foreign currency exchange rates and uses derivative instruments, primarily forward contracts, to manage the financial impacts of these exposures. The Company does not use forward contracts to engage in currency speculation and does not enter into derivative financial instruments for trading purposes. In order to qualify for hedge accounting treatment, a derivative instrument must be considered highly effective at offsetting changes in either the hedged item’s cash flows or fair value. Additionally, the hedge relationship must be documented to include the risk management objective and strategy, the hedging instrument, the hedged item, the risk exposure, and how hedge effectiveness will be assessed prospectively and retrospectively. The extent to which a hedging instrument has been, and is expected to continue to be, effective at offsetting changes in fair value or cash flows is assessed and documented at least quarterly. If the underlying hedged item is no longer probable of occurring, hedge accounting is discontinued. For derivative instruments that either do not qualify for hedge accounting or are not designated as hedges, all changes in the fair value of the derivative instrument are recognized in earnings. For qualifying cash flow hedges, the change in the fair value of the derivative instrument is recorded as a component of other comprehensive income (loss) (“OCI”) and recognized in earnings when the hedged cash flows affect earnings. If the cash flow hedge relationship is terminated, the derivative instrument gains or losses that are deferred in OCI will be recognized in earnings when the hedged cash flows occur. However, for cash flow hedges that are terminated because the forecasted transaction is not expected to occur in the original specified time period, or a two-month period thereafter, the derivative instrument gains or losses are immediately recognized in earnings, except as allowable under certain extenuating circumstances. The Company uses derivative instruments, primarily forward contracts designated as cash flow hedges, to hedge the foreign currency exchange rate exposure associated with forecasted foreign-currency-denominated intercompany inventory transactions with foreign subsidiaries before inventory is sold to third parties. Fluctuations in exchange rates will either increase or decrease the Company’s intercompany equivalent cash flows and affect the Company’s U.S. Dollar earnings. Gains or losses on the foreign currency exchange forward contracts that are used to hedge these exposures are expected to partially offset this variability. Foreign currency exchange forward contracts represent agreements to exchange the currency of one country for the currency of another country at an agreed upon settlement date. These forward contracts typically have a maximum term of twelve months. The conversion of the inventory to cost of sales, exclusive of depreciation and amortization, will result in the reclassification of related derivative gains and losses that are reported in AOCL on the Consolidated Balance Sheets into earnings. The Company also uses foreign currency exchange forward contracts to hedge certain foreign-currency-denominated net monetary assets and liabilities, such as cash balances, receivables and payables. Fluctuations in foreign currency exchange rates result in transaction gains and losses being recorded in earnings as monetary assets and liabilities are remeasured at the spot exchange rate at the Company’s fiscal month-end or upon settlement. The Company has chosen not to apply hedge accounting to these foreign currency exchange forward contracts because there are no differences in the timing of gain or loss recognition on the hedging instruments and the hedged items. The Company presents its derivative assets and derivative liabilities at their gross fair values within other current assets and accrued liabilities, respectively, on the Consolidated Balance Sheets. However, the Company’s derivative instruments allow net settlements under certain conditions. Refer to Note 15, “ DERIVATIVE INSTRUMENTS . ” Stockholders’ equity A summary of the Company’s Class A Common Stock (the “Common Stock”), $0.01 par value, and Class B Common Stock, $0.01 par value, follows: (in thousands) January 29, 2022 January 30, 2021 Class A Common Stock Shares authorized 150,000 150,000 Shares issued 103,300 103,300 Shares outstanding 52,985 62,399 Class B Common Stock (1) Shares authorized 106,400 106,400 (1) No shares were issued or outstanding as of each of January 29, 2022 and January 30, 2021. Holders of Class A Common Stock generally have identical rights to holders of Class B Common Stock, except holders of Class A Common Stock are entitled to one vote per share while holders of Class B Common Stock are entitled to three votes per share on all matters submitted to a vote of stockholders. Revenue recognition The Company recognizes revenue from product sales when control of the good is transferred to the customer, generally upon pick up at, or shipment from, a Company location. The Company provides shipping and handling services to customers in certain transactions under its digital operations. Revenue associated with the related shipping and handling obligations is deferred until the obligation is fulfilled, typically upon the customer’s receipt of the merchandise. The related shipping and handling costs are classified in stores and distribution expense on the Consolidated Statements of Operations and Comprehensive Income (Loss). Revenue is recorded net of estimated returns, associate discounts, promotions and other similar customer incentives. The Company estimates reserves for sales returns based on historical experience among other factors. The sales return reserve is classified in accrued expenses on the Consolidated Balance Sheets. The Company accounts for gift cards sold to customers by recognizing an unearned revenue liability at the time of sale, which is recognized as net sales when redeemed by the customer or when the Company has determined the likelihood of redemption to be remote, referred to as gift card breakage. Gift card breakage is recognized proportionally with gift card redemptions in net sales. Gift cards sold to customers do not expire or lose value over periods of inactivity and the Company is not required by law to escheat the value of unredeemed gift cards to the jurisdictions in which it operates. The Company also maintains loyalty programs, which primarily provide customers with the opportunity to earn points toward future merchandise discount rewards with qualifying purchases. The Company accounts for expected future reward redemptions by recognizing an unearned revenue liability as customers accumulate points, which remains until revenue is recognized at the earlier of redemption or expiration. Unearned revenue liabilities related to the Company’s gift card program and loyalty programs are classified in accrued expenses on the Consolidated Balance Sheets and are typically recognized as revenue within a 12-month period. For additional details on the Company’s unearned revenue liabilities related to the Company’s gift card and loyalty programs, refer to Note 4, “ REVENUE RECOGNITION .” The Company also recognizes revenue under wholesale arrangements, which revenue is generally recognized upon shipment, when control passes to the wholesale partner. Revenue from the Company’s franchise and license arrangements, primarily royalties earned upon the sale of merchandise, is generally recognized at the time merchandise is sold to the franchisees’ retail customers or to the licensees’ wholesale customers. The Company does not include tax amounts collected from customers on behalf of third parties, including sales and indirect taxes, in net sales. All revenues are recognized in net sales in the Consolidated Statements of Operations and Comprehensive Income (Loss). For a discussion of the disaggregation of revenue, refer to Note 18, “ SEGMENT REPORTING . ” Cost of sales, exclusive of depreciation and amortization Cost of sales, exclusive of depreciation and amortization on the Consolidated Statements of Operations and Comprehensive Income (Loss), primarily consists of cost incurred to ready inventory for sale, including product costs, freight, and import costs, as well as provisions for reserves for shrink and lower of cost and net realizable value. Gains and losses associated with the effective portion of designated foreign currency exchange forward contracts related to the hedging of intercompany inventory transactions are also recognized in cost of sales, exclusive of depreciation and amortization, on the Consolidated Statements of Operations and Comprehensive Income (Loss). The Company’s cost of sales, exclusive of depreciation and amortization, and consequently gross profit, may not be comparable to those of other retailers, as inclusion of certain costs vary across the industry. Some retailers include all costs related to buying, design and distribution operations in cost of sales, while others may include either all or a portion of these costs in selling, general and administrative expenses. Stores and distribution expense Stores and distribution expense on the Consolidated Statements of Operations and Comprehensive Income (Loss) primarily consists of: store payroll; store management; operating lease costs; utilities and other landlord expenses; depreciation and amortization, except for those amounts included in marketing, general and administrative expense; repairs and maintenance and other store support functions; marketing and other costs related to the Company’s digital operations; shipping and handling costs; and distribution center (“DC”) expense. A summary of shipping and handling costs, which includes costs incurred to store, move and prepare product for shipment and costs incurred to physically move product to our customers across channels, follows: (in thousands) Fiscal 2021 Fiscal 2020 Fiscal 2019 Shipping and handling costs $ 306,222 $ 291,534 $ 224,604 Marketing, general and administrative expense Marketing, general and administrative expense on the Consolidated Statements of Operations and Comprehensive Income (Loss) primarily consists of: home office compensation and marketing, except for those departments included in stores and distribution expe |
IMPACT OF COVID-19
IMPACT OF COVID-19 | 12 Months Ended |
Jan. 29, 2022 | |
Unusual or Infrequent Items, or Both [Abstract] | |
Unusual or Infrequent Items, or Both, Disclosure | IMPACT OF COVID-19 In March 2020, the COVID-19 outbreak was declared to be a global pandemic by the World Health Organization. In response to COVID-19, certain governments imposed travel restrictions and local statutory quarantines and the Company experienced widespread temporary store closures. As of January 29, 2022, all U.S. Company-operated stores were fully open for in-store service; however, temporary store closures have subsequently been mandated in certain parts of the APAC region in response to COVID-19. During periods of temporary store closures, reductions in revenue have not been offset by proportional decreases in expense, as the Company continues to incur store occupancy costs such as operating lease costs, net of rent abatements agreed upon during the period, depreciation expense, and certain other costs such as compensation, net of government payroll relief, and administrative expenses resulting in a negative effect on the relationship between the Company’s costs and revenues. Although U.S. and global economies have begun to recover from the COVID-19 pandemic as many health and safety restrictions have been lifted and vaccine distribution has increased, certain adverse consequences of the pandemic continue to impact the macroeconomic environment and may persist for some time, including labor shortages and disruptions of global supply chains and temporary store closures. The extent of future impacts of COVID-19 on the Company’s business, including the duration and impact on overall customer demand, are uncertain as current circumstances are dynamic and depend on future developments, including, but not limited to, the emergence of new variants of coronavirus, such as the Delta and Omicron variants, and the availability and acceptance of effective vaccines, boosters or medical treatments. The Company plans to follow the guidance of local governments to evaluate whether future store closures will be necessary. During Fiscal 2020, the Company experienced a material adverse impact to net sales across brands and regions as a result of widespread temporary store closures in response to COVID-19, which was not offset by year-over-year digital sales growth. As a result, the Company recognized $14.8 million of charges to reduce the carrying value of inventory, primarily as a result of COVID-19 and the temporary closure of the Company’s stores, in cost of sales, exclusive of depreciation and amortization on the Consolidated Statements of Operations and Comprehensive Income (Loss). Further negative developments in the COVID-19 pandemic could result in additional charges to reduce the carrying value of inventory. As a result of COVID-19, the Company suspended certain rent payments for periods of store closures, and continues to engage with its landlords to find a mutually beneficial and agreeable path forward. As of January 29, 2022 and January 30, 2021, the Company had $13.5 million and $24.2 million, respectively, related to suspended rent payments classified within accrued expenses on the Consolidated Balance Sheets. The Company obtained rent abatements of $17.9 million and $30.7 million, respectively, during Fiscal 2021 and Fiscal 2020. The majority of the benefits related to these abatements was recognized within variable lease cost during the applicable periods. During Fiscal 2021 and Fiscal 2020, the Company recognized qualified payroll-related credits reducing payroll expenses by approximately $5.6 million and $18.1 millions, respectively, in the Consolidated Statements of Operations and Comprehensive Income. There are also instances where governments have provided wage subsidies through direct payments to the Company’s associates. In these instances, no benefits are recognized on the Consolidated Statements of Operations and Comprehensive Income (Loss), but the Company does see a reduction in expense incurred. The Company also intends to continue to defer qualified payroll and other tax payments as permitted by applicable government laws and regulations. The Company has recognized asset impairment charges related to the Company’s operating lease right-of-use assets and property and equipment, which were principally the result of the impact of COVID-19 on store cash flows. Refer to Note 9, “ ASSET IMPAIRMENT ,” for additional information. The Company has also experienced other material impacts as a result of COVID-19, such as the establishment of deferred tax valuation allowances and other tax charges. Refer to Note 12, “ INCOME TAXES ,” for additional information. In March 2020, in an effort to improve the Company’s near-term cash position, as a precautionary measure in response to COVID-19, the Company borrowed $210.0 million under its senior secured asset-based revolving credit facility (the “ABL Facility”) and withdrew the majority of excess funds from the overfunded Rabbi Trust assets, providing the Company with $50.0 million of additional cash. In July 2020, the Company took additional actions to preserve liquidity in light of the continued global uncertainty then presented by COVID-19, and completed a private offering of $350.0 million aggregate principal amount of senior secured notes (the “Senior Secured Notes”). The Company used the net proceeds of such offering to repay all outstanding borrowings under the Company’s term loan facility (the “Term Loan Facility”), to repay a portion of the outstanding borrowings under the ABL Facility and to pay fees and expenses in connection with such repayments and the offering. Refer to Note 13 “ BORROWINGS ,” for additional information. As of January 29, 2022, the Company had liquidity of $1.1 billion as compared to liquidity of $1.3 billion as of January 30, 2021, comprised of cash and equivalents and borrowing available to the Company under the ABL Facility. |
REVENUE RECOGNITION
REVENUE RECOGNITION | 12 Months Ended |
Jan. 29, 2022 | |
Revenue Recognition [Abstract] | |
Revenue Recognition, Deferred Revenue [Policy Text Block] | REVENUE RECOGNITION Disaggregation of revenue All revenues are recognized in net sales in the Consolidated Statements of Operations and Comprehensive Income (Loss). For information regarding the disaggregation of revenue, refer to Note 18, “ SEGMENT REPORTING . ” Contract liabilities The following table details certain contract liabilities representing unearned revenue as of January 29, 2022 and January 30, 2021: (in thousands) January 29, 2022 January 30, 2021 Gift card liability $ 36,984 $ 28,561 Loyalty programs liability 22,757 20,426 The following table details recognized revenue associated with the Company’s gift card program and loyalty programs for Fiscal 2021 and Fiscal 2020: (in thousands) Fiscal 2021 Fiscal 2020 Revenue associated with gift card redemptions and gift card breakage $ 80,088 $ 58,400 Revenue associated with reward redemptions and breakage related to the Company’s loyalty programs 45,417 37,042 Refer to Note 2, “ SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Revenue recognition ,” for discussion regarding significant accounting policies related to the Company’s revenue recognition. |
FAIR VALUE
FAIR VALUE | 12 Months Ended |
Jan. 29, 2022 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE | FAIR VALUE Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The inputs used to measure fair value are prioritized based on a three-level hierarchy. The three levels of inputs to measure fair value are as follows: • Level 1—inputs are unadjusted quoted prices for identical assets or liabilities that are available in active markets that the Company can access at the measurement date. • Level 2—inputs are other than quoted market prices included within Level 1 that are observable for assets or liabilities, directly or indirectly. • Level 3—inputs to the valuation methodology are unobservable. The lowest level of significant input determines the placement of the entire fair value measurement in the hierarchy. The three levels of the hierarchy and the distribution of the Company’s assets and liabilities that are measured at fair value on a recurring basis, were as follows: Assets and Liabilities at Fair Value as of January 29, 2022 (in thousands) Level 1 Level 2 Level 3 Total Assets: Cash equivalents (1) $ 49,309 $ 11,643 $ — $ 60,952 Derivative instruments (2) — 4,973 — 4,973 Rabbi Trust assets (3) 1 62,272 — 62,273 Restricted cash equivalents (1) 5,391 2,326 — 7,717 Total assets $ 54,701 $ 81,214 $ — $ 135,915 Assets and Liabilities at Fair Value as of January 30, 2021 (in thousands) Level 1 Level 2 Level 3 Total Assets: Cash equivalents (1) $ 296,279 $ 11,589 $ — $ 307,868 Derivative instruments (2) — 79 — 79 Rabbi Trust assets (3) 1 60,789 — 60,790 Restricted cash equivalents (1) 2,943 7,775 — 10,718 Total assets $ 299,223 $ 80,232 $ — $ 379,455 Liabilities: Derivative instruments (2) $ — $ 4,694 $ — $ 4,694 Total liabilities $ — $ 4,694 $ — $ 4,694 (1) Level 1 assets consisted of investments in money market funds and U.S. treasury bills. Level 2 assets consisted of time deposits. (2) Level 2 assets and liabilities consisted primarily of foreign currency exchange forward contracts. (3) Level 1 assets consisted of investments in money market funds. Level 2 assets consisted of trust-owned life insurance policies. The Company’s Level 2 assets and liabilities consisted of: • Trust-owned life insurance policies, which were valued using the cash surrender value of the life insurance policies; • Time deposits, which were valued at cost, approximating fair value, due to the short-term nature of these investments; and • Derivative instruments, primarily foreign currency exchange forward contracts, which were valued using quoted market prices of the same or similar instruments, adjusted for counterparty risk. Fair value of long-term borrowings The Company’s borrowings under the Senior Secured Notes are carried at historical cost in the Consolidated Balance Sheets. The carrying amount and fair value of the Company’s long-term gross borrowings were as follows: (in thousands) January 29, 2022 January 30, 2021 Gross borrowings outstanding, carrying amount $ 307,730 $ 350,000 Gross borrowings outstanding, fair value 327,732 389,813 |
INVENTORIES
INVENTORIES | 12 Months Ended |
Jan. 29, 2022 | |
Inventories, Net [Abstract] | |
Inventory Disclosure [Text Block] | INVENTORIES Inventories consisted of: (in thousands) January 29, 2022 January 30, 2021 Inventories at original cost $ 549,030 $ 429,993 Less: Lower of cost and net realizable value adjustment (17,196) (21,076) Less: Shrink estimate (5,970) (4,864) Inventories (1) $ 525,864 $ 404,053 (1) Includes $142.7 million and $106.0 million of inventory in transit, merchandise owned by the Company that has not yet been received at a Company distribution center, as of January 29, 2022 and January 30, 2021, respectively. A summary of the Company’s vendors based on location and the percentage of dollar cost of merchandise receipts during Fiscal 2021, and Fiscal 2020 follows: % of Total Company Merchandise Receipts (1) Location Fiscal 2021 Fiscal 2020 Vietnam 36 % 41 % China (2) 14 12 Cambodia 16 15 Other (3) 34 32 Total 100 % 100 % (1) Calculated as the cost of merchandise receipts from all vendors within a country during the respective fiscal year divided by cost of total merchandise receipts during the respective fiscal year. (2) Only a portion of the Company’s total merchandise sourced from China is subject to the additional U.S. tariffs on imported consumer goods that were effective beginning in Fiscal 2019. The Company estimates approximately 9%, 7% and 15% of total merchandise receipts were directly imported to the U.S. from China in Fiscal 2021, Fiscal 2020 and Fiscal 2019, respectively. (3) No country included within this category sourced more than 10% of total merchandise receipts during any fiscal year presented above. Refer to Note 2, “ SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Inventories ,” for discussion regarding significant accounting policies related to the Company’s inventories. |
PROPERTY AND EQUIPMENT, NET
PROPERTY AND EQUIPMENT, NET | 12 Months Ended |
Jan. 29, 2022 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT, NET | PROPERTY AND EQUIPMENT, NET Property and equipment, net consisted of: (in thousands) January 29, 2022 January 30, 2021 Land $ 28,599 $ 28,599 Buildings 233,523 230,104 Furniture, fixtures and equipment 622,912 608,210 Information technology 643,244 607,062 Leasehold improvements 913,729 990,238 Construction in progress 9,483 22,744 Other 2,003 2,000 Total 2,453,493 2,488,957 Less: Accumulated depreciation (1,945,157) (1,938,370) Property and equipment, net $ 508,336 $ 550,587 Depreciation expense for Fiscal 2021, Fiscal 2020 and Fiscal 2019 was $141.4 million, $167.2 million and $172.6 million, respectively. Refer to Note 9, “ ASSET IMPAIRMENT ,” for details related to property and equipment impairment charges incurred during Fiscal 2021, Fiscal 2020 and Fiscal 2019. Refer to Note 2, “ SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Property and equipment, net ,” for discussion regarding significant accounting policies related to the Company’s property and equipment, net. |
LEASES
LEASES | 12 Months Ended |
Jan. 29, 2022 | |
Leases [Abstract] | |
Lessee, Operating Leases | LEASES The Company is a party to leases related to its Company-operated retail stores as well as for certain of its distribution centers, office space, information technology and equipment. The following table provides a summary of the Company’s operating lease costs for Fiscal 2021, Fiscal 2020 and Fiscal 2019 : (in thousands) Fiscal 2021 Fiscal 2020 Fiscal 2019 Single lease cost (1) $ 272,246 $ 346,178 $ 427,982 Variable lease cost (2) 110,889 65,310 143,472 Operating lease right-of-use asset impairment (3) 9,509 57,026 15,812 Sublease Income (4,292) — — Total operating lease cost $ 388,352 $ 468,514 $ 587,266 (1) Includes amortization and interest expense associated with operating lease right-of-use assets and the impact from remeasurement of operating lease liabilities. (2) Includes variable payments related to both lease and nonlease components, such as contingent rent payments made by the Company based on performance, and payments related to taxes, insurance, and maintenance costs, as well as $14.1 million and $30.1 million of rent abatements in Fiscal 2021 and Fiscal 2020, respectively, related to the effects of the COVID-19 pandemic that resulted in lease concessions with total payments required by the modified contract being substantially the same as or less than total payments required by the original contract. The total benefit related to rent abatements recognized during Fiscal 2021 and Fiscal 2020 was $17.9 million and $30.7 million respectively. (3) Refer to Note 9, “ ASSET IMPAIRMENT ,” for details related to operating lease right-of-use asset impairment charges. The following table provides the weighted-average remaining lease term of the Company’s operating leases and the weighted-average discount rate used to calculate the Company’s operating lease liabilities as of January 29, 2022 and January 30, 2021: January 29, 2022 January 30, 2021 Weighted-average remaining lease term (years) 5.3 5.7 Weighted-average discount rate 5.6 % 5.6 % The following table provides a maturity analysis of the Company’s operating lease liabilities, based on undiscounted cash flows, as of January 29, 2022: (in thousands) January 29, 2022 Fiscal 2022 $ 266,893 Fiscal 2023 215,464 Fiscal 2024 152,282 Fiscal 2025 131,972 Fiscal 2026 106,873 Fiscal 2027 and thereafter 190,984 Total undiscounted operating lease payments 1,064,468 Less: Imputed interest (144,381) Present value of operating lease liabilities $ 920,087 The Company has suspended rent payments for a number of stores that were closed as a result of COVID-19, and has been successful in obtaining certain rent abatements and landlord concessions of rent payable. Refer to Note 3. “ IMPACT OF COVID-19 ”, for additional details. During Fiscal 2020, the Company entered into a sublease agreement with a third party for the remaining lease term of one of its European Abercrombie & Fitch flagship store locations upon its closure. As of January 29, 2022, the Company's subleased property had a remaining lease term of 5.8 years with the sublease term from February 1, 2021 through November 30, 2027. Future minimum tenant operating lease payments remaining under this sublease as of January 29, 2022 were $24.0 million. |
ASSET IMPAIRMENT
ASSET IMPAIRMENT | 12 Months Ended |
Jan. 29, 2022 | |
Asset Impairment [Abstract] | |
Asset Impairment Charges [Text Block] | ASSET IMPAIRMENT The following table provides additional details related to long-lived asset impairment charges: (in thousands) Fiscal 2021 Fiscal 2020 Fiscal 2019 Operating lease right-of-use asset impairment (1) $ 9,509 $ 57,026 $ 15,812 Property and equipment asset impairment 2,591 15,911 6,552 Total asset impairment $ 12,100 $ 72,937 $ 22,364 (1) Includes $3.2 million of operating lease right-of-use asset impairment included in flagship store exit charges on the Consolidated Statement of Operations and Comprehensive Income for Fiscal 2019. Refer to Note 19, “ FLAGSHIP STORE EXIT (BENEFITS) CHARGES .” Asset impairment charges for Fiscal 2021 were related to certain of the Company’s stores across brands, geographies and store formats. The impairment charges for Fiscal 2021 reduced the then carrying amount of the impaired stores’ assets to their fair value of approximately $18.1 million, including $15.6 million related to operating lease right-of-use assets. Asset impairment charges for Fiscal 2020 were principally the result of the impact of COVID-19 and were related to certain of the Company’s stores across brands, geographies and store formats. The impairment charges for Fiscal 2020 reduced the then carrying amount of the impaired stores’ assets to their fair value of approximately $95.0 million, including $87.2 million related to operating lease right-of-use assets. Asset impairment charges for Fiscal 2019 primarily related to certain of the Company’s international flagship stores. The impairment charges for Fiscal 2019 reduced the then carrying amount of the impaired stores’ assets to their fair value of approximately $103.4 million, including $99.2 million related to operating lease right-of-use assets. Refer to Note 2, “ SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Long-lived asset impairment ,” for discussion regarding significant accounting policies related to impairment of the Company’s long-lived assets. |
RABBI TRUST ASSETS
RABBI TRUST ASSETS | 12 Months Ended |
Jan. 29, 2022 | |
Investments, Debt and Equity Securities [Abstract] | |
RABBI TRUST ASSETS | RABBI TRUST ASSETS Investments of Rabbi Trust assets consisted of the following as of January 29, 2022 and January 30, 2021: (in thousands) January 29, 2022 January 30, 2021 Trust-owned life insurance policies (at cash surrender value) $ 62,272 $ 60,789 Money market funds 1 1 Rabbi Trust assets $ 62,273 $ 60,790 Realized gains resulting from the change in cash surrender value of the Rabbi Trust assets for Fiscal 2021, Fiscal 2020 and Fiscal 2019 were as follows: (in thousands) Fiscal 2021 Fiscal 2020 Fiscal 2019 Realized gains related to Rabbi Trust assets $ 1,483 $ 1,740 $ 3,172 Refer to Note 2, “ SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Rabbi Trust assets ,” for further discussion related to the Company’s Rabbi Trust assets. |
ACCRUED EXPENSES
ACCRUED EXPENSES | 12 Months Ended |
Jan. 29, 2022 | |
Payables and Accruals [Abstract] | |
ACCRUED EXPENSES | ACCRUED EXPENSES Accrued expenses consisted of: (in thousands) January 29, 2022 January 30, 2021 Accrued payroll and related costs (1) $ 90,906 $ 119,978 Accrued costs related to the Company’s DCs and digital operations 48,395 56,135 Other (2) 256,514 220,252 Accrued expenses $ 395,815 $ 396,365 (1) Accrued payroll and related costs include salaries, incentive compensation, benefits, withholdings and other payroll-related costs. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Jan. 29, 2022 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES Impact of valuation allowances and other tax charges During Fiscal 2021, as a result of the improvement seen in business conditions, the Company recognized $42.5 million of tax benefits due to the release of valuation allowances, primarily in the U.S. and Germany, and a discrete tax benefit of $3.9 million due to a rate change in the United Kingdom The Company did not recognize income tax benefits on $25.3 million of pre-tax losses generated in Fiscal 2021, primarily in Switzerland, resulting in adverse tax impacts of $4.6 million. The Company’s effective tax rate for Fiscal 2020 was impacted by $101.4 million of adverse tax impacts, ultimately giving rise to income tax expense on a consolidated pre-tax loss. Further details regarding these adverse tax impacts are as follows: • Due to the significant adverse impacts of COVID-19, the Company did not recognize income tax benefits on $203.4 million of pre-tax losses during Fiscal 2020, resulting in an adverse tax impact of $39.5 million. • The Company recognized charges of $61.9 million related to the establishment of valuation allowances and other tax charges in certain jurisdictions during Fiscal 2020, including, but not limited to, the U.S., Switzerland, Germany and Japan, principally as a result of the significant adverse impacts of COVID-19. Swiss Tax Reform In May 2019, Switzerland voted to approve the Federal Act on Tax Reform and AHV Financing (“Swiss Tax Reform”), effective at the federal level beginning January 2020, which resulted in the abolishment of preferential tax regimes by the cantons. In addition to the abolishment of the preferential tax regimes, the cantons needed to implement new, mandatory tax provisions in their cantonal tax law which were subject to a referendum process as well. As a result of these changes and actions taken by the Company, both of which occurred in the third quarter of Fiscal 2019, the Company increased its deferred income tax assets and liabilities, which are recorded on the Consolidated Balance Sheets within other assets and other liabilities, respectively, by $38.0 million during the third quarter of Fiscal 2019. In the fourth quarter of Fiscal 2019, the canton of Ticino formally enacted the tax reform effective January 1, 2020. As a result, the tax reform went into effect on January 1, 2020. The Company decreased its deferred income tax assets and liabilities by $13.1 million during the fourth quarter of Fiscal 2019 for a net increase of deferred income tax assets and liabilities during Fiscal 2019 of $24.9 million as a result of Swiss Tax Reform. In addition, the Company incurred tax benefits in Fiscal 2019 of $2.9 million as a result of Swiss Tax Reform. Swiss Tax Reform did not have a material impact to the Consolidated Statements of Operations and Comprehensive Income (Loss) or the Company’s cash flows during Fiscal 2021, Fiscal 2020 or Fiscal 2019. Components of income taxes Income (loss) before income taxes consisted of: (in thousands) Fiscal 2021 Fiscal 2020 Fiscal 2019 Domestic (1) $ 283,793 $ (33,417) $ 17,590 Foreign 25,181 (15,326) 44,741 Income (loss) before income taxes $ 308,974 $ (48,743) $ 62,331 (1) Includes intercompany charges to foreign affiliates for management fees, cost-sharing, royalties and interest and excludes a portion of foreign income that is currently includable on the U.S. federal income tax return. Income tax expense (benefit) consisted of: (in thousands) Fiscal 2021 Fiscal 2020 Fiscal 2019 Current: Federal $ 51,321 $ 9,434 $ (2,193) State 14,061 3,751 1,893 Foreign 5,448 23,041 8,521 Total current $ 70,830 $ 36,226 $ 8,221 Deferred: Federal (1) $ (15,401) $ (73,104) $ 29,012 State (8,995) 8,828 (107) Foreign (1) (7,526) 88,261 (19,755) Total deferred (31,922) 23,985 9,150 Income tax expense $ 38,908 $ 60,211 $ 17,371 (1) Fiscal 2020 includes federal deferred tax benefit of $79.0 million and foreign deferred tax expense of $88.6 million due to the establishment of an additional valuation allowance in Switzerland. Fiscal 2019 federal deferred tax expense included charges of $24.9 million and foreign deferred tax expense included benefits of $24.9 million as a result of Swiss Tax Reform. The Company’s earnings and profits from its foreign subsidiaries may be repatriated to the U.S., without incurring additional U.S. federal income tax. The Company determined that the balance of the Company’s undistributed earnings and profits from its foreign subsidiaries as of February 2, 2019 are considered indefinitely reinvested outside of the U.S., and if these funds were to be repatriated to the U.S., the Company would expect to incur an insignificant amount of state income taxes and foreign withholding taxes. The Company accrues for both state income taxes and foreign withholding taxes with respect to earnings and profits earned after February 2, 2019, in such a manner that these funds may be repatriated without incurring additional tax expense. Reconciliation between the statutory federal income tax rate and the effective tax rate is as follows: Fiscal 2021 Fiscal 2020 Fiscal 2019 U.S. federal corporate income tax rate 21.0 % 21.0 % 21.0 % Audit and other adjustments to prior years’ accruals, net 4.7 2.6 0.8 State income tax, net of U.S. federal income tax effect 4.4 2.6 1.9 Foreign taxation of non-U.S. operations (1) 3.5 32.7 5.5 Internal Revenue Code Section 162(m) 1.6 (5.5) 2.2 Additional U.S. taxation of non-U.S. operations 0.6 (0.2) (1.4) Permanent items 0.2 — 0.3 Net change in valuation allowances (19.7) (177.2) 8.2 Tax (benefit) expense recognized on share-based compensation (2) (1.3) (7.5) (0.9) Other statutory tax rate and law changes (1.2) 2.3 (0.9) Credit for increasing research activities (0.6) 2.6 (3.6) Net income attributable to noncontrolling interests (0.5) 2.2 (1.9) Trust-owned life insurance policies (at cash surrender value) (0.1) 0.7 (1.1) Credit items — 0.2 (0.8) Write-off of stock basis in subsidiary — — 3.2 Statutory tax rate and law changes due to Swiss Tax Reform — — (4.6) Total 12.6 % (123.5) % 27.9 % (1) U.S. branch operations in Canada and Puerto Rico were subject to tax at the full U.S. tax rates. As a result, income from these operations do not create reconciling items. Effective in 2019, only Puerto Rico continues to be a branch of the U.S. (2) Refer to Note 14, “ SHARE-BASED COMPENSATION ,” for details on discrete income tax benefits and charges related to share-based compensation awards during Fiscal 2021, Fiscal 2020, and Fiscal 2019. The impact of various tax items on the Company's effective tax rate were amplified on a percentage basis at lower levels of consolidated pre-tax income (loss) in absolute dollars. The effective tax rate remains dependent on jurisdictional mix. The taxation of non-U.S. operations line items in the table above excludes items related to the Company's non-U.S. operations reported separately in the appropriate corresponding line items. For both Fiscal 2021 and Fiscal 2020, the impact of taxation of non-U.S. operations on the Company's effective income tax rate was related to the Company's jurisdictional mix driven primarily by the Company’s operations within Switzerland. For Fiscal 2019, the impact of taxation of non-U.S. operations on the Company's effective income tax rate was primarily related to the Company's Japan subsidiary, along with the Company’s NCI. For Fiscal 2019, the Company’s Japan subsidiary earned pre-tax income of $12.0 million with a jurisdictional effective tax rate of 35.1%. With respect to the NCI, the subsidiary incurred pre-tax income of $5.6 million with no jurisdictional tax effect. The Swiss earnings are subject to U.S. tax and the effect is included in the U.S. taxation of non-U.S. operations above. Components of deferred income tax assets and deferred income tax liabilities The effect of temporary differences which gives rise to deferred income tax assets (liabilities) were as follows: (in thousands) January 29, 2022 January 30, 2021 Deferred income tax assets: Operating lease liabilities $ 242,290 $ 311,286 Intangibles, foreign step-up in basis (1) 64,281 81,357 Net operating losses (NOL), tax credit and other carryforwards 52,970 56,341 Accrued expenses and reserves 30,026 32,649 Deferred compensation 16,050 16,294 Inventory 3,578 — Rent — 530 Other 45 2,171 Valuation allowances (110,057) (174,302) Total deferred income tax assets $ 299,183 $ 326,326 Deferred income tax liabilities: Operating lease right-of-use assets $ (202,916) $ (253,417) Property and equipment and intangibles (10,150) (15,328) Prepaid expenses (2,451) (387) Store supplies (1,811) (2,042) Undistributed profits of non-U.S. subsidiaries (1,082) (318) Rent (360) — Inventory — (1,499) U.S. offset to foreign deferred tax assets, excluding intangibles, foreign step-up in basis (2) — (183) Other (30) (3,499) Total deferred income tax liabilities $ (218,800) $ (276,673) Net deferred income tax assets (2) $ 80,383 $ 49,653 (1) The deferred tax asset relates to a step-up in basis associated with the intra-entity transfer of intangible assets to Switzerland which are being amortized for Swiss local tax purposes. As this subsidiary’s income is also taxable in the U.S., a corresponding U.S. deferred tax liability was recognized to reflect lower resulting foreign tax credit due to the amortization of the Swiss step-up in basis. Included in the liability section is the remaining portion of deferred tax liabilities which are properly categorized in the table above. In Fiscal 2020, a full valuation allowance was established in Switzerland and the corresponding US deferred tax liability was released. During Fiscal 2021 an agreement was reached with the Swiss taxing authorities to decrease the basis step up to be amortized in the future thus decreasing the deferred asset by $14.8 million. Because of the valuation allowance, there is no impact on consolidated tax expense for this agreement. (2) This table does not reflect deferred taxes classified within AOCL. As of January 29, 2022 and January 30, 2021, AOCL included deferred tax liabilities of $1.1 million and deferred tax assets of $0.9 million, respectively. As of January 29, 2022, the Company had deferred tax assets related to foreign and state NOL and credit carryforwards of $52.5 million and $0.4 million, respectively, that could be utilized to reduce future years’ tax liabilities. If not utilized, a portion of the foreign NOL carryforwards will begin to expire in 2025 and a portion of state NOL carryforwards will begin to expire in 2023. Some foreign NOLs have an indefinite carryforward period. As of January 29, 2022, the Company did not have any deferred tax assets related to federal NOL and credit carryforwards that could be utilized to reduce future years’ tax liabilities. As of January 29, 2022, valuation allowances of $110.1 million have been established against deferred tax assets. All valuation allowances have been reflected through the Consolidated Statements of Operations and Comprehensive (Loss) Income. The valuation allowances will remain until there is sufficient positive evidence to release them, such positive evidence would include having positive income within the jurisdiction. In such case, the Company will record an adjustment in the period in which a determination is made. The Company continues to review the need for valuation allowances on a quarterly basis. Share-based compensation Refer to Note 14, “ SHARE-BASED COMPENSATION ,” for details on income tax benefits and charges related to share-based compensation awards during Fiscal 2021, Fiscal 2020 and Fiscal 2019. Other The amount of uncertain tax positions as of January 29, 2022, January 30, 2021 and February 1, 2020, which would impact the Company’s effective tax rate if recognized and a reconciliation of the beginning and ending amounts of uncertain tax positions, excluding accrued interest and penalties, are as follows: (in thousands) Fiscal 2021 Fiscal 2020 Fiscal 2019 Uncertain tax positions, beginning of the year $ 995 $ 1,794 $ 478 Gross addition for tax positions of the current year 490 235 131 Gross (reduction) addition for tax positions of prior years (136) 395 1,349 Reductions of tax positions of prior years for: Lapses of applicable statutes of limitations (81) (48) (151) Settlements during the period (154) (1,381) (13) Uncertain tax positions, end of year $ 1,114 $ 995 $ 1,794 The IRS is currently conducting an examination of the Company’s U.S. federal income tax return for Fiscal 2021 as part of the IRS’ Compliance Assurance Process program. The IRS examinations for Fiscal 2020 and prior years have been completed. State and foreign returns are generally subject to examination for a period of three to five years after the filing of the respective return. The Company typically has various state and foreign income tax returns in the process of examination, administrative appeals or litigation. The outcome of the examinations is not expected to have a material impact on the Company’s financial statements. The Company believes that some of these audits and negotiations will conclude within the next 12 months and that it is reasonably possible the amount of uncertain income tax positions, including interest, may change by an immaterial amount due to settlement of audits and expiration of statues of limitations. The Company does not expect material adjustments to the total amount of uncertain tax positions within the next 12 months, but the outcome of tax matters is uncertain and unforeseen results can occur. Refer to Note 2, “ SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Income taxes ,” for discussion regarding significant accounting policies related to the Company’s income taxes. |
BORROWINGS
BORROWINGS | 12 Months Ended |
Jan. 29, 2022 | |
Debt Disclosure [Abstract] | |
BORROWINGS | BORROWINGS Details on the Company’s long-term borrowings, net, as of January 29, 2022 and January 30, 2021 are as follows: (in thousands) January 29, 2022 January 30, 2021 Long-term portion of borrowings, gross at carrying amount $ 307,730 $ 350,000 Unamortized fees (4,156) (6,090) Long-term portion of borrowings, net $ 303,574 $ 343,910 Senior Secured Notes On July 2, 2020, Abercrombie & Fitch Management Co. (“A&F Management”), a wholly-owned indirect subsidiary of A&F, completed the private offering of the Senior Secured Notes, with $350 million aggregate principal amount due in 2025 at an offering price of 100% of the principal amount thereof. The Senior Secured Notes will mature on July 15, 2025 and bear interest at a rate of 8.75% per annum, with semi-annual interest payments, which began in January 2021. The Senior Secured Notes were issued pursuant to an indenture, dated as of July 2, 2020, by and among A&F Management, A&F and certain of A&F’s wholly-owned subsidiaries, as guarantors, and U.S. Bank National Association (now known as U.S. Bank Trust National Association), as trustee, and as collateral agent. During Fiscal 2021, A&F Management purchased $42.3 million of its outstanding Senior Secured Notes and incurred $5.3 million of loss on extinguishment of debt, comprised of a repayment premium of $4.7 million and the write-off of unamortized fees of $0.6 million, in interest expense, net on the Consolidated Statements of Operations and Comprehensive Income (Loss). The Company used the net proceeds from the offering of the Senior Secured Notes to repay outstanding borrowings and accrued interest of $233.6 million and $110.8 million under the Term Loan Facility and the ABL Facility, respectively, with the remaining net proceeds used towards fees and expenses in connection with such repayments and the offering of the Senior Secured Notes. The Company recorded deferred financing fees associated with the issuance of the Senior Secured Notes, which are being amortized to interest expense over the contractual term of the Senior Secured Notes. ABL Facility On April 29, 2021, A&F Management, in A&F Management’s capacity as the lead borrower, and the other borrowers and guarantors party thereto, amended and restated in its entirety the Credit Agreement, dated as of August 7, 2014, as amended on September 10, 2015 and as further amended on October 19, 2017 (as amended and restated, the “Amended and Restated Credit Agreement”), among A&F Management, the other borrowers and guarantors party thereto, the lenders party thereto, Wells Fargo Bank, National Association, as administrative agent for the lenders, and the other parties thereto. The Amended and Restated Credit Agreement continues to provide for a senior secured revolving credit facility of up to $400.0 million (the “ABL Facility”), and (i) extends the maturity date of the ABL Facility from October 19, 2022 to April 29, 2026; and (ii) modifies the required fee on undrawn commitments under the ABL Facility from 0.25% per annum to either 0.25% or 0.375% per annum (with the ultimate amount dependent on the conditions detailed in the Amended and Restated Credit Agreement). The Company did not have any borrowings outstanding under the ABL Facility as of January 29, 2022 or as of January 30, 2021. The ABL Facility is subject to a borrowing base, consisting primarily of U.S. inventory, with a letter of credit sub-limit of $50 million and an accordion feature allowing A&F to increase the revolving commitment by up to $100 million subject to specified conditions. The ABL Facility is available for working capital, capital expenditures and other general corporate purposes. As of January 29, 2022, the Company had availability under the ABL Facility of $278.3 million, net of $0.8 million in outstanding stand-by letters of credit. As the Company must maintain excess availability equal to the greater of 10% of the loan cap or $30 million under the ABL Facility, borrowing available to the Company under the ABL Facility was $248.3 million as of January 29, 2022. Obligations under the Amended ABL Facility are unconditionally guaranteed by A&F and certain of A&F’s subsidiaries. The ABL Facility is secured by a first-priority security interest in certain working capital of the borrowers and guarantors consisting of inventory, accounts receivable and certain other assets. The Amended ABL Facility is also secured by a second-priority security interest in certain property and assets of the borrowers and guarantors, including certain fixed assets, intellectual property, stock of subsidiaries and certain after-acquired material real property. At the Company’s option, borrowings under the ABL Facility will bear interest at either (a) an adjusted LIBO rate plus a margin of 1.25% to 1.50% per annum, or (b) an alternate base rate plus a margin of 0.25% to 0.50% per annum. As of January 29, 2022, the applicable margins with respect to LIBO rate loans and base rate loans, including swing line loans, under the ABL Facility were 1.25% and 0.25% per annum, respectively, and are subject to adjustment each fiscal quarter based on average historical availability during the preceding quarter. Customary agency fees and letter of credit fees are also payable in respect of the ABL Facility. Representations, warranties and covenants The agreements related to the Senior Secured Notes and the ABL Facility contain various representations, warranties and restrictive covenants that, among other things and subject to specified exceptions, restrict the ability of the Company and its subsidiaries to: grant or incur liens; incur, assume or guarantee additional indebtedness; sell or otherwise dispose of assets, including capital stock of subsidiaries; make investments in certain subsidiaries; pay dividends, make distributions or redeem or repurchase capital stock; change the nature of their business; and consolidate or merge with or into, or sell substantially all of the Company’s or A&F Management’s assets to, another entity. The Senior Secured Notes are guaranteed on a senior secured basis, jointly and severally, by A&F and each of the existing and future wholly-owned domestic restricted subsidiaries of A&F that guarantee or will guarantee A&F Management’s ABL Facility or certain future capital markets indebtedness. The Company was in compliance with all debt covenants under the agreements related to the Senior Secured Notes and the ABL Facility as of January 29, 2022. |
SHARE-BASED COMPENSATION
SHARE-BASED COMPENSATION | 12 Months Ended |
Jan. 29, 2022 | |
Share-based Payment Arrangement [Abstract] | |
SHARE-BASED COMPENSATION | SHARE-BASED COMPENSATION Plans As of January 29, 2022, the Company had two primary share-based compensation plans: (i) the 2016 Directors LTIP, with 900,000 shares of the Company’s Common Stock authorized for issuance, under which the Company is authorized to grant restricted stock, restricted stock units, stock appreciation rights, stock options and deferred stock awards to non-associate members of the Company’s Board of Directors; and (ii) the 2016 Associates LTIP, with 10,350,000 shares of the Company’s Common Stock authorized for issuance, under which the Company is authorized to grant restricted stock, restricted stock units, performance share awards, stock appreciation rights and stock options to associates of the Company. The Company also has outstanding shares from four other share-based compensation plans under which the Company granted restricted stock units, performance share awards, stock appreciation rights and stock options to associates of the Company and restricted stock units, stock options and deferred stock awards to non-associate members of the Company’s Board of Directors in prior years. No new shares may be granted under these previously-authorized plans and any outstanding awards continue in effect in accordance with their respective terms. The 2016 Directors LTIP, a stockholder-approved plan, permits the Company to annually grant awards to non-associate directors, subject to the following limits: • For non-associate directors: awards with an aggregate fair market value on the date of the grant of no more than $300,000; • For the non-associate director occupying the role of Non-Executive Chairperson of the Board (if any): additional awards with an aggregate fair market value on the date of grant of no more than $500,000; and • For the non-associate director occupying the role of Executive Chairperson of the Board (if any): additional awards with an aggregate fair market value on the date of grant of no more than $2,500,000. Under the 2016 Directors LTIP, restricted stock units are subject to a minimum vesting period ending no sooner than the earlier of (i) the first anniversary of the grant date or (ii) the date of the next regularly scheduled annual meeting of stockholders held after the grant date. Any stock appreciation rights or stock options granted under this plan have the same minimum vesting period requirements as restricted stock units and, in addition, must have a term that does not exceed a period of ten years from the grant date, subject to forfeiture under the terms of the 2016 Directors LTIP. The 2016 Associates LTIP, a stockholder-approved plan, permits the Company to annually grant one or more types of awards covering up to an aggregate for all awards of 1.0 million of underlying shares of the Company’s Common Stock to any associate of the Company. Under the 2016 Associates LTIP, for restricted stock units that have performance-based vesting, performance must be measured over a period of at least one year and for restricted stock units that do not have performance-based vesting, vesting in full may not occur more quickly than in pro-rata installments over a period of three years from the date of the grant, with the first installment vesting no sooner than the first anniversary of the date of the grant. In addition, any stock options or stock appreciation rights granted under this plan must have a minimum vesting period of one year and a term that does not exceed a period of ten years from the grant date, subject to forfeiture under the terms of the 2016 Associates LTIP. Each of the 2016 Directors LTIP and the 2016 Associates LTIP provides for accelerated vesting of awards if there is a change of control and certain other conditions specified in each plan are met. Financial statement impact The following table details share-based compensation expense and the related income tax benefit for Fiscal 2021, Fiscal 2020 and Fiscal 2019: (in thousands) Fiscal 2021 Fiscal 2020 Fiscal 2019 Share-based compensation expense $ 29,304 $ 18,682 $ 14,007 Income tax benefit associated with share-based compensation expense recognized during the period (1) 3,338 — 2,649 (1) No income tax benefit was recognized during Fiscal 2020 due to the establishment of a valuation allowance. The following table details discrete income tax benefits and charges related to share-based compensation awards during Fiscal 2021, Fiscal 2020 and Fiscal 2019: (in thousands) Fiscal 2021 Fiscal 2020 Fiscal 2019 Income tax discrete benefits (charges) realized for tax deductions related to the issuance of shares during the period $ 4,198 $ (1,719) $ 1,156 Income tax discrete charges realized upon cancellation of stock appreciation rights during the period (204) (1,943) (611) Total income tax discrete benefits (charges) related to share-based compensation awards $ 3,994 $ (3,662) $ 545 The following table details the amount of employee tax withheld by the Company upon the issuance of shares associated with restricted stock units vesting and the exercise of stock appreciation rights for the Fiscal 2021, Fiscal 2020 and Fiscal 2019: (in thousands) Fiscal 2021 Fiscal 2020 Fiscal 2019 Employee tax withheld upon issuance of shares (1) $ 13,163 $ 5,694 $ 6,804 (1) Classified within other financing activities on the Consolidated Statements of Cash Flows. Restricted stock units The following table summarizes activity for restricted stock units for Fiscal 2021: Service-based Restricted Performance-based Restricted Market-based Restricted Number of Weighted- Number of Underlying Shares (1) Weighted- Number of Underlying Shares (1) Weighted- Unvested at January 30, 2021 3,037,098 $ 11.62 297,216 $ 22.43 721,879 $ 21.46 Granted 730,446 32.80 157,645 32.09 78,827 50.31 Adjustments for performance achievement — — (106,715) 29.92 (6,084) 33.69 Vested (1,089,706) 12.26 — — (100,634) 33.69 Forfeited (145,598) 16.67 (7,997) 29.92 (13,804) 25.13 Unvested at January 29, 2022 (1) 2,532,240 $ 17.16 340,149 $ 27.08 680,184 $ 22.81 (1) Unvested shares related to restricted stock units with performance-based and market-based vesting conditions are reflected at 100% of their target vesting amount in the table above. Unvested shares related to restricted stock units with performance-based and market-based vesting conditions can be achieved at up to 200% of their target vesting amount. The following table details unrecognized compensation cost and the remaining weighted-average period over which these costs are expected to be recognized for restricted stock units as of January 29, 2022: (in thousands) Service-based Restricted Performance-based Restricted Market-based Restricted Unrecognized compensation cost $ 28,333 $ — $ 14,173 Remaining weighted-average period cost is expected to be recognized (years) 1.2 0.0 0.8 Additional information pertaining to restricted stock units for Fiscal 2021, Fiscal 2020 and Fiscal 2019 follows: (in thousands) Fiscal 2021 Fiscal 2020 Fiscal 2019 Service-based restricted stock units: Total grant date fair value of awards granted $ 23,959 $ 19,843 $ 16,175 Total grant date fair value of awards vested 13,360 14,083 13,630 Total intrinsic value of awards vested 36,507 8,147 18,596 Performance-based restricted stock units: Total grant date fair value of awards granted 5,059 — 5,391 Total grant date fair value of awards vested — 4,635 — Market-based restricted stock units: Total grant date fair value of awards granted 3,966 8,443 4,176 Total grant date fair value of awards vested 3,390 4,132 511 Total intrinsic value of awards vested 3,335 3,263 181 The weighted-average assumptions used for market-based restricted stock units in the Monte Carlo simulation during Fiscal 2021, Fiscal 2020 and Fiscal 2019 were as follows: Fiscal 2021 Fiscal 2020 Fiscal 2019 Grant date market price $ 31.78 $ 12.31 $ 25.34 Fair value 49.81 16.24 36.24 Assumptions: Price volatility 66 % 67 % 57 % Expected term (years) 2.9 2.4 2.9 Risk-free interest rate 0.3 % 0.2 % 2.2 % Dividend yield — — 3.2 Average volatility of peer companies 72.0 % 66.0 % 40.0 % Average correlation coefficient of peer companies 0.4694 0.4967 0.2407 Stock appreciation rights The following table summarizes stock appreciation rights activity for Fiscal 2021: Number of Weighted-Average Aggregate Weighted-Average Outstanding at January 30, 2021 384,757 $ 33.04 Granted — — Exercised (111,868) 26.95 Forfeited or expired (36,750) 54.73 Outstanding at January 29, 2022 236,139 $ 32.55 $ 1,276,809 2.3 Stock appreciation rights exercisable at January 29, 2022 236,139 $ 32.55 $ 1,276,809 2.3 No stock appreciation rights were exercised during Fiscal 2020. The grant date fair value of awards exercised during Fiscal 2021 and Fiscal 2019 follows: (in thousands) Fiscal 2021 Fiscal 2019 Total grant date fair value of awards exercised $ 1,069 $ 626 Refer to Note 2, “ SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Share-based compensation ,” for discussion regarding significant accounting policies related to share-based compensation. |
DERIVATIVE INSTRUMENTS
DERIVATIVE INSTRUMENTS | 12 Months Ended |
Jan. 29, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVE INSTRUMENTS | DERIVATIVE INSTRUMENTS As of January 29, 2022, the Company had outstanding the following foreign currency exchange forward contracts that were entered into to hedge either a portion, or all, of forecasted foreign-currency-denominated intercompany inventory transactions, the resulting settlement of the foreign-currency-denominated intercompany accounts receivable, or both: (in thousands) Notional Amount (1) Euro $ 60,962 British pound 32,044 Canadian dollar 10,026 Japanese yen 4,471 (1) Amounts reported are the U.S. Dollar notional amounts outstanding as of January 29, 2022. The fair value of derivative instruments is determined using quoted market prices of the same or similar instruments, adjusted for counterparty risk. The location and amounts of derivative fair values of foreign currency exchange forward contracts on the Consolidated Balance Sheets as of January 29, 2022 and January 30, 2021 were as follows: (in thousands) Location January 29, 2022 January 30, 2021 Location January 29, 2022 January 30, 2021 Derivatives designated as cash flow hedging instruments Other current assets $ 4,973 $ 79 Accrued expenses $ — $ 4,694 Refer to Note 5, “ FAIR VALUE , ” for further discussion of the determination of the fair value of derivative instruments. Additional information pertaining to derivative gains or losses from foreign currency exchange forward contracts designated as cash flow hedging instruments for Fiscal 2021, Fiscal 2020 and Fiscal 2019 follows: (in thousands) Fiscal 2021 Fiscal 2020 Fiscal 2019 Gain recognized in AOCL (1) $ 11,987 $ 7,619 $ 7,495 Gain reclassified from AOCL into cost of sales, exclusive of depreciation and amortization (2) 1,263 13,235 9,160 (1) Amount represents the change in fair value of derivative instruments. As a result of COVID-19 in Fiscal 2020, there was a significant change in the expected timing of previously hedged intercompany sales transactions, resulting in a dedesignation of the related hedge instruments. At the time of dedesignation of these hedges, they were in a net gain position of approximately $12.6 million. Due to the extenuating circumstances leading to dedesignation, gains associated with these hedges at the time of dedesignation were deferred in AOCL until being reclassified into cost of goods sold, exclusive of depreciation and amortization when the originally forecasted transactions occurred and the hedged items affected earnings. During Fiscal 2020 and subsequent to the dedesignation of these hedges, these hedge contracts were settled. (2) Amount represents gain reclassified from AOCL to cost of sales, exclusive of depreciation and amortization, on the Consolidated Statements of Operations and Comprehensive Income (Loss) when the hedged item affected earnings, which was when merchandise was converted to cost of sales, exclusive of depreciation and amortization. Substantially all of the unrealized gains or losses related to foreign currency exchange forward contracts designated as cash flow hedging instruments as of January 29, 2022 will be recognized within the Consolidated Statements of Operations and Comprehensive Income (Loss) over the next 12 months. Additional information pertaining to derivative gains or losses from foreign currency exchange forward contracts not designated as hedging instruments for Fiscal 2021, Fiscal 2020 and Fiscal 2019 follows: (in thousands) Fiscal 2021 Fiscal 2020 Fiscal 2019 Gain (loss) recognized in other operating income, net $ 1,205 $ 742 $ (298) Refer to Note 2, “ SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Derivative instruments ,” for discussion regarding significant accounting policies related to the Company’s derivative instruments. |
ACCUMULATED OTHER COMPREHENSIVE
ACCUMULATED OTHER COMPREHENSIVE LOSS | 12 Months Ended |
Jan. 29, 2022 | |
Equity [Abstract] | |
ACCUMULATED OTHER COMPREHENSIVE LOSS | ACCUMULATED OTHER COMPREHENSIVE LOSS For Fiscal 2021, the activity in AOCL was as follows: Fiscal 2021 (in thousands) Foreign Currency Translation Adjustment Unrealized Gain (Loss) on Derivative Financial Instruments Total Beginning balance at January 30, 2021 $ (97,772) $ (4,535) $ (102,307) Other comprehensive (loss) income before reclassifications (22,917) 11,987 (10,930) Reclassified gain from AOCL (1) — (1,263) (1,263) Tax effect — (206) (206) Other comprehensive income (loss) after reclassifications (22,917) 10,518 (12,399) Ending balance at January 29, 2022 $ (120,689) $ 5,983 $ (114,706) (1) Amount represents gain reclassified from AOCL to cost of sales, exclusive of depreciation and amortization, on the Consolidated Statements of Operations and Comprehensive (Loss) Income. For Fiscal 2020, the activity in AOCL was as follows: Fiscal 2020 (in thousands) Foreign Currency Translation Adjustment Unrealized Gain (Loss) on Derivative Financial Instruments Total Beginning balance at February 1, 2020 $ (109,967) $ 1,081 $ (108,886) Other comprehensive income before reclassifications 12,195 7,619 19,814 Reclassified gain from AOCL (1) — (13,235) (13,235) Tax effect — — — Other comprehensive income (loss) after reclassifications (2) 12,195 (5,616) 6,579 Ending balance at January 30, 2021 $ (97,772) $ (4,535) $ (102,307) (1) Amount represents gain reclassified from AOCL to cost of sales, exclusive of depreciation and amortization, on the Consolidated Statements of Operations and Comprehensive Income (Loss). (2) No income tax benefit was recognized during Fiscal 2020 due to the establishment of a valuation allowance. For Fiscal 2019, the activity in AOCL was as follows: Fiscal 2019 (in thousands) Foreign Currency Translation Adjustment Unrealized Gain (Loss) on Derivative Financial Instruments Total Beginning balance at February 2, 2019 $ (104,887) $ 2,435 $ (102,452) Other comprehensive (loss) income before reclassifications (5,080) 7,495 2,415 Reclassified gain from AOCL (1) — (9,160) (9,160) Tax effect — 311 311 Other comprehensive (loss) income after reclassifications (5,080) (1,354) (6,434) Ending balance at February 1, 2020 $ (109,967) $ 1,081 $ (108,886) (1) Amount represents gain reclassified from AOCL to cost of sales, exclusive of depreciation and amortization, on the Consolidated Statements of Operations and Comprehensive Income (Loss). |
SAVINGS AND RETIREMENT PLANS
SAVINGS AND RETIREMENT PLANS | 12 Months Ended |
Jan. 29, 2022 | |
Retirement Benefits [Abstract] | |
Pension and Other Postretirement Benefits Disclosure [Text Block] | SAVINGS AND RETIREMENT PLANS The Company maintains the Abercrombie & Fitch Co. Savings and Retirement Plan, a qualified plan. All U.S. associates are eligible to participate in this plan if they are at least 21 years of age. In addition, the Company maintains the Abercrombie & Fitch Nonqualified Savings and Supplemental Retirement Plan, comprised of two sub-plans (Plan I and Plan II). Plan I contains contributions made through December 31, 2004, while Plan II contains contributions made on and after January 1, 2005. Participation in these plans is based on service and compensation. The Company’s contributions to these plans are based on a percentage of associates’ eligible annual compensation. The cost of the Company’s contributions to these plans was $15.4 million, $14.1 million and $14.8 million for Fiscal 2021, Fiscal 2020 and Fiscal 2019, respectively. In addition, the Company maintains the Supplemental Executive Retirement Plan which provides retirement income to its former Chief Executive Officer for life, based on averaged compensation before retirement, including base salary and cash incentive compensation. As of January 29, 2022 and January 30, 2021, the Company has recorded $8.4 million and $9.2 million, respectively, in other liabilities on the Consolidated Balance Sheets related to future Supplemental Executive Retirement Plan distributions. |
SEGMENT REPORTING
SEGMENT REPORTING | 12 Months Ended |
Jan. 29, 2022 | |
Segment Reporting [Abstract] | |
SEGMENT REPORTING | SEGMENT REPORTING The Company’s two operating segments are brand-based: Hollister, which includes the Company’s Hollister, Gilly Hicks and Social Tourist brands, and Abercrombie, which includes the Company’s Abercrombie & Fitch and abercrombie kids brands. These two operating segments have similar economic characteristics, classes of consumers, products, production and distribution methods, operate in the same regulatory environments, and have been aggregated into one reportable segment. Amounts shown below include net sales from wholesale, franchise and licensing operations, which are not a significant component of total revenue, and are aggregated within their respective operating segment and geographic area. The Company’s net sales by operating segment for Fiscal 2021, Fiscal 2020 and Fiscal 2019 were as follows: (in thousands) Fiscal 2021 Fiscal 2020 Fiscal 2019 Hollister $ 2,147,979 $ 1,834,349 $ 2,158,514 Abercrombie 1,564,789 1,291,035 1,464,559 Total $ 3,712,768 $ 3,125,384 $ 3,623,073 Net sales by geographic area are presented by attributing revenues to an individual country on the basis of the country in which the merchandise was sold for in-store purchases and on the basis of the shipping location provided by customers for digital orders. The Company’s net sales by geographic area for Fiscal 2021, Fiscal 2020 and Fiscal 2019 were as follows: (in thousands) Fiscal 2021 Fiscal 2020 Fiscal 2019 U.S. $ 2,652,158 $ 2,127,403 $ 2,410,802 EMEA 755,072 709,451 822,202 APAC 171,701 176,636 264,895 Other 133,837 111,894 125,174 Total international $ 1,060,610 $ 997,981 $ 1,212,271 Total $ 3,712,768 $ 3,125,384 $ 3,623,073 The Company’s long-lived assets and intellectual property, which primarily relates to trademark assets associated with the Company’s international operations, by geographic area as of January 29, 2022 and January 30, 2021 were as follows: (in thousands) January 29, 2022 January 30, 2021 U.S. $ 849,298 $ 963,555 EMEA 272,348 350,136 APAC 83,830 120,256 Other 23,599 33,575 Total international $ 379,777 $ 503,967 Total $ 1,229,075 $ 1,467,522 |
FLAGSHIP STORE EXIT (BENEFITS)
FLAGSHIP STORE EXIT (BENEFITS) CHARGES | 12 Months Ended |
Jan. 29, 2022 | |
Flagship Store Exit Charges [Abstract] | |
Restructuring and Related Activities Disclosure [Text Block] | FLAGSHIP STORE EXIT (BENEFITS) CHARGES Global Store Network Optimization Reflecting a continued focus on one of the Company’s key transformation initiatives ‘Global Store Network Optimization,’ the Company continues to pivot away from its large format flagship stores and strives to open smaller, more productive omnichannel focused brand experiences. As a result, the Company has closed certain of its flagship stores and may have additional closures as it executes against this strategy. The Company recognizes impacts related to the exit of its flagship stores in flagship store exit (benefits) charges on the Consolidated Statements of Operations and Comprehensive Income (Loss). Details of the (benefits) charges incurred during Fiscal 2021, Fiscal 2020 and Fiscal 2019 related to this initiative follow: (in thousands) Fiscal 2021 Fiscal 2020 Fiscal 2019 Operating lease cost $ (841) $ (6,959) $ 46,716 Gain on lease assignment — (5,237) — Asset disposals and other store-closure benefits (1) (514) (2,658) (1,687) Employee severance and other employee transition costs 202 3,218 2,228 Total flagship store exit (benefits) charges $ (1,153) $ (11,636) $ 47,257 (1) Amounts represent costs incurred in returning the store to its original condition, including updates to previous accruals for asset retirement obligations and costs to remove inventory and store assets. During Fiscal 2021, the Company finalized an agreement with and paid its landlord partner to settle all remaining obligations related to the SoHo Hollister flagship store in New York City, which closed during the second quarter of Fiscal 2019. Prior to this new agreement, the Company was required to make payments in aggregate of $80.1 million pursuant to the lease agreements through the fiscal year ending January 30, 2029 (“Fiscal 2028”). The new agreement resulted in an acceleration of payments and provided for a discount resulting in a reduction of operating lease liabilities of $65.0 million and a cash outflow of $63.8 million to settle all remaining obligations related to this location. This cash outflow was classified within operating lease right-of-use assets and liabilities within operating activities on the Consolidated Statement of Cash Flows. The Company recognized a gain of $0.9 million in flagship store exit benefits on the Consolidated Statement of Operations and Comprehensive Income (Loss) related to this transaction. As the Company continues its ‘Global Store Network Optimization’ efforts, it may incur future cash expenditures or incremental charges or realize benefits not currently contemplated due to events that may occur as a result of, or that are associated with, previously announced flagship store closures and flagship store closures that have not yet been finalized. At this time, the Company is not able to quantify the amount of future impacts, including any cash expenditures that may take place in future periods resulting from any potential flagship store closures given the unpredictable nature of lease exit negotiations and ultimate lease renewal decisions. |
CONTINGENCIES
CONTINGENCIES | 12 Months Ended |
Jan. 29, 2022 | |
Contingencies [Abstract] | |
Commitments and Contingencies Disclosure [Text Block] | CONTINGENCIES The Company is a defendant in lawsuits and other adversarial proceedings arising in the ordinary course of business. The Company’s legal costs incurred in connection with the resolution of claims and lawsuits are generally expensed as incurred, and the Company establishes estimated liabilities for the outcome of litigation where losses are deemed probable and the amount of loss, or range of loss, is reasonably estimable. The Company also determines estimates of reasonably possible losses or ranges of reasonably possible losses in excess of related accrued liabilities, if any, when it has determined that a loss is reasonably possible and it is able to determine such estimates. Based on currently available information, the Company cannot estimate a range of reasonably possible losses in excess of the accrued charges for legal contingencies. In addition, the Company has not established accruals for certain claims and legal proceedings pending against the Company where it is not possible to reasonably estimate the outcome or potential liability, and the Company cannot estimate a range of reasonably possible losses for these legal matters. Actual liabilities may differ from the amounts recorded, due to uncertainties regarding final settlement agreement negotiations, court approvals and the terms of any approval by the courts, and there can be no assurance that final resolution of legal matters will not have a material adverse effect on the Company’s financial condition, results of operations or cash flows. The Company’s assessment of the current exposure could change in the event of the discovery of additional facts. |
SUBSEQUENT EVENT
SUBSEQUENT EVENT | 12 Months Ended |
Jan. 29, 2022 | |
Subsequent Events [Abstract] | |
Subsequent Events [Text Block] | SUBSEQUENT EVENTSubsequent to end of Fiscal 2021 and through the period ending March 25, 2022, the Company repurchased 2.7 million shares of common stock at an average price of $30.14 per share. Shares were repurchased under the previously announced $500 million share repurchase authorization. The timing and amount of any future share repurchases will depend on various factors, including market and business conditions. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Jan. 29, 2022 | |
Accounting Policies [Abstract] | |
Principles of consolidation | Principles of consolidation The accompanying Consolidated Financial Statements include historical financial statements of, and transactions applicable to, the Company and reflect its financial position, results of operations and cash flows. The Company has interests in an Emirati business venture and in a Kuwaiti business venture with Majid al Futtaim Fashion L.L.C. (“MAF”) and in a United States of America (the “U.S.”) business venture with Dixar L.L.C. (“Dixar”), each of which meets the definition of a variable interest entity (“VIE”). The purpose of the business ventures with MAF is to operate stores in the United Arab Emirates and Kuwait and the purpose of the business venture with Dixar is to hold the intellectual property related to the Social Tourist brand. The Company is deemed to be the primary beneficiary of these VIEs; therefore, the Company has consolidated the operating results, assets and liabilities of these VIEs, with the noncontrolling interests’ (“NCI”) portions of net income presented as net income attributable to NCI on the Consolidated Statements of Operations and Comprehensive Income (Loss) and MAF’s portion of equity presented as NCI on the Consolidated Balance Sheets. |
Fiscal Year | Fiscal year The Company’s fiscal year ends on the Saturday closest to January 31. This typically results in a 52 week year, but occasionally gives rise to an additional week, resulting in a 53 week year. Fiscal years are designated in the Consolidated Financial Statements and notes by the calendar year in which the fiscal year commences. All references herein to the Company’s fiscal years are as follows: Fiscal year Year ended/ ending Number of weeks Fiscal 2019 February 1, 2020 52 Fiscal 2020 January 30, 2021 52 Fiscal 2021 January 29, 2022 52 Fiscal 2022 January 28, 2023 52 |
Use of estimates | Use of estimates The preparation of financial statements, in conformity with U.S. generally accepted accounting principles (“GAAP”), requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of net sales and expenses during the reporting period. Due to the inherent uncertainty involved with estimates, actual results may differ. The extent to which the current outbreak of coronavirus disease (“COVID-19”) continues to impact the Company’s business and financial results will depend on numerous evolving factors including, but not limited to: the duration and spread of COVID-19 and the emergence of new variants of coronavirus, the availability and acceptance of effective vaccines, boosters or medical treatments, the impact of COVID-19 on the length or frequency of store closures, and the extent to which COVID-19 impacts worldwide macroeconomic conditions including interest rates, the speed of the economic recovery, and governmental, business and consumer reactions to the pandemic. The Company’s assessment of these, as well as other factors, could impact management's estimates and result in material impacts to the Company’s consolidated financial statements in future reporting periods. |
Cash and equivalents | Cash and equivalents A summary of cash and equivalents on the Consolidated Balance Sheets follows: (in thousands) January 29, 2022 January 30, 2021 Cash (1) $ 762,187 $ 796,994 Cash equivalents: (2) Time deposits 11,643 11,589 Money market funds 49,309 296,279 Cash and equivalents $ 823,139 $ 1,104,862 (1) Primarily consists of amounts on deposit with financial institutions. (2) Investments with original maturities of less than three months. |
Receivables | Receivables Receivables on the Consolidated Balance Sheets primarily include credit card receivables, lessor construction allowances, value added tax (“VAT”) receivables, trade receivables, income tax receivables and other tax credits or refunds. As part of the normal course of business, the Company has approximately three to four days of proceeds from sales transactions outstanding with its third-party credit card vendors at any point. The Company classifies these outstanding balances as credit card receivables. Lessor construction allowances are recorded for certain store lease agreements for improvements completed by the Company. VAT receivables are payments the Company has made on purchases of goods that will be recovered as those goods are sold. Trade receivables are amounts billed by the Company to wholesale, franchise and licensing partners in the ordinary course of business. Income tax receivables represent refunds of certain tax payments along with net operating loss and credit carryback claims for which the Company expects to receive refunds within the next 12 months. |
Inventories | Inventories Inventories on the Consolidated Balance Sheets are valued at the lower of cost and net realizable value on a weighted-average cost basis. The Company reduces the carrying value of inventory through a lower of cost and net realizable value adjustment, the impact of which is reflected in cost of sales, exclusive of depreciation and amortization, on the Consolidated Statements of Operations and Comprehensive Income (Loss). The lower of cost and net realizable value adjustment is based on the Company’s consideration of multiple factors and assumptions including demand forecasts, current sales volumes, expected sell-off activity, composition and aging of inventory, historical recoverability experience and risk of obsolescence from changes in economic conditions or customer preferences. Additionally, as part of inventory valuation, inventory shrinkage estimates based on historical trends from actual physical inventories are made each quarter that reduce the inventory value for lost or stolen items. The Company performs physical inventories on a periodic basis and adjusts the shrink estimate accordingly. Refer to Note 6, “ INVENTORIES .” The Company’s global sourcing of merchandise is generally negotiated and settled in U.S. Dollars. |
Other current assets | Other current assets Other current assets on the Consolidated Balance Sheets consists of: prepaid expenses including those related to rent, information technology maintenance and taxes; current store supplies; derivative contracts; short-term restricted cash and other. |
Property and equipment | Property and equipment, net Depreciation of property and equipment is computed for financial reporting purposes on a straight-line basis using the following service lives: Category of property and equipment Service lives Information technology 3 - 7 years Furniture, fixtures and equipment 3 - 15 years Leasehold improvements 3 - 15 years Other property and equipment 3 - 20 years Buildings 30 years Leasehold improvements are amortized over either their respective lease terms or their service lives, whichever is shorter. The cost of assets sold or retired and the related accumulated depreciation are removed from the accounts with any resulting gain or loss included in net income on the Consolidated Statements of Operations and Comprehensive Income (Loss). Maintenance and repairs are charged to expense as incurred. Major remodels and improvements that extend the service lives of the related assets are capitalized. The Company capitalizes certain direct costs associated with the development and purchase of internal-use software within property and equipment. Capitalized costs are amortized on a straight-line basis over the estimated useful lives of the software, generally not exceeding seven years. Refer to Note 7, “ PROPERTY AND EQUIPMENT, NET .” |
Long-Lived asset impairment | Long-lived asset impairment For the purposes of asset impairment, the Company’s long-lived assets, primarily operating lease right-of-use assets, leasehold improvements, furniture, fixtures and equipment, are grouped with other assets and liabilities at the store level, which is the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. On at least a quarterly basis, management reviews the Company’s asset groups for indicators of impairment, which include, but are not limited to, material declines in operational performance, a history of losses, an expectation of future losses, adverse market conditions, store closure or relocation decisions, and any other events or changes in circumstances that would indicate the carrying amount of an asset group might not be recoverable. If an asset group displays an indicator of impairment, it is tested for recoverability by comparing the sum of the estimated future undiscounted cash flows attributable to the asset group to the carrying amount of the asset group. This recoverability test requires management to make assumptions and judgments related, but not limited, to management’s expectations for future cash flows from operating the store. The key assumption used in developing these projected cash flows used in the recoverability test is estimated sales growth rate. If the sum of the estimated future undiscounted cash flows attributable to an asset group is less than its carrying amount, and it is determined that the carrying amount of the asset group is not recoverable, management determines if there is an impairment loss by comparing the carrying amount of the asset group to its fair value. Fair value of an asset group is based on the highest and best use of the asset group, often using a discounted cash flow model that utilizes Level 3 fair value inputs. The key assumptions used in the Company’s fair value analysis are estimated sales growth rate and comparable market rents. An impairment loss is recognized based on the excess of the carrying amount of the asset group over its fair value. Refer to Note 9, “ ASSET IMPAIRMENT .” |
Restricted cash | Consolidated Statements of Cash Flows reconciliation The following table provides a reconciliation of cash and equivalents and restricted cash and equivalents to the amounts shown on the Consolidated Statements of Cash Flows: (in thousands) Location January 29, 2022 January 30, 2021 February 1, 2020 Cash and equivalents Cash and equivalents $ 823,139 $ 1,104,862 $ 671,267 Long-term restricted cash and equivalents Other assets 11,229 14,814 18,696 Short-term restricted cash and equivalents Other current assets — 4,481 2,301 Restricted cash and equivalents (1) $ 11,229 $ 19,295 $ 20,997 Cash and equivalents and restricted cash and equivalents $ 834,368 $ 1,124,157 $ 692,264 |
Intellectual property | Intellectual property Intellectual property primarily includes trademark assets associated with the Company’s international operations, consisting of finite-lived and indefinite-lived intangible assets. The Company’s finite-lived intangible assets are amortized over a useful life of 10 to 20 years. |
Income taxes | Income taxes Income taxes are calculated using the asset and liability method. Deferred tax assets and liabilities are recognized based on the difference between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using current enacted tax rates in effect for the years in which those temporary differences are expected to reverse. Inherent in the determination of the Company’s income tax liability and related deferred income tax balances are certain judgments and interpretations of enacted tax law and published guidance with respect to applicability to the Company’s operations. The Company is subject to audit by taxing authorities, usually several years after tax returns have been filed, and the taxing authorities may have differing interpretations of tax laws. Valuation allowances are established to reduce deferred tax assets to the amount expected to be realized when it is more likely than not that some portion or all of the deferred tax assets will not be realized. The Company records tax expense or benefit that does not relate to ordinary income in the current fiscal year discretely in the period in which it occurs. Examples of such types of discrete items include, but are not limited to: changes in estimates of the outcome of tax matters related to prior years, assessments of valuation allowances, return-to-provision adjustments, tax-exempt income, the settlement of tax audits and changes in tax legislation and/or regulations. Tax benefits from uncertain tax positions are recognized when it is more likely than not that the position will be sustained upon examination, including resolutions of any related appeals or litigation processes, based on the technical merits. The amount recognized is measured as the largest amount of tax benefit that is greater than 50 percent likely of being realized upon settlement. The Company’s effective tax rate includes the impact of reserve provisions and changes to reserves on uncertain tax positions that are not more likely than not to be sustained upon examination as well as related interest and penalties. A number of years may elapse before a particular matter, for which the Company has established a reserve, is audited and finally resolved. The number of years with open tax audits varies depending on the tax jurisdiction. While it is often difficult to predict the final outcome or the timing of resolution of any particular tax matter, the Company believes that its reserves reflect the probable outcome of known tax contingencies. Unfavorable settlement of any particular issue may require use of the Company’s cash. Favorable resolution would be recognized as a reduction to the Company’s effective tax rate in the period of resolution. The Company recognizes accrued interest and penalties related to uncertain tax positions as a component of income tax expense on the Consolidated Statements of Operations and Comprehensive Income (Loss). Refer to Note 12, “ INCOME TAXES .” |
Foreign currency translation and transactions | Foreign currency translation and transactions The functional currencies of the Company’s foreign subsidiaries are generally the respective local currencies in the countries in which they operate. Assets and liabilities denominated in foreign currencies are translated into U.S. Dollars (the reporting currency) at the exchange rate prevailing at the balance sheet date. Equity accounts denominated in foreign currencies are translated into U.S. Dollars at historical exchange rates. Revenues and expenses denominated in foreign currencies are translated into U.S. Dollars at the monthly average exchange rate for the period. Gains and losses resulting from foreign currency transactions are included in other operating income, net; whereas, translation adjustments and gains and losses associated with measuring inter-company loans of a long-term investment nature are reported as an element of other comprehensive income (loss). |
Derivative instruments | Derivative instruments The Company is exposed to risks associated with changes in foreign currency exchange rates and uses derivative instruments, primarily forward contracts, to manage the financial impacts of these exposures. The Company does not use forward contracts to engage in currency speculation and does not enter into derivative financial instruments for trading purposes. In order to qualify for hedge accounting treatment, a derivative instrument must be considered highly effective at offsetting changes in either the hedged item’s cash flows or fair value. Additionally, the hedge relationship must be documented to include the risk management objective and strategy, the hedging instrument, the hedged item, the risk exposure, and how hedge effectiveness will be assessed prospectively and retrospectively. The extent to which a hedging instrument has been, and is expected to continue to be, effective at offsetting changes in fair value or cash flows is assessed and documented at least quarterly. If the underlying hedged item is no longer probable of occurring, hedge accounting is discontinued. For derivative instruments that either do not qualify for hedge accounting or are not designated as hedges, all changes in the fair value of the derivative instrument are recognized in earnings. For qualifying cash flow hedges, the change in the fair value of the derivative instrument is recorded as a component of other comprehensive income (loss) (“OCI”) and recognized in earnings when the hedged cash flows affect earnings. If the cash flow hedge relationship is terminated, the derivative instrument gains or losses that are deferred in OCI will be recognized in earnings when the hedged cash flows occur. However, for cash flow hedges that are terminated because the forecasted transaction is not expected to occur in the original specified time period, or a two-month period thereafter, the derivative instrument gains or losses are immediately recognized in earnings, except as allowable under certain extenuating circumstances. The Company uses derivative instruments, primarily forward contracts designated as cash flow hedges, to hedge the foreign currency exchange rate exposure associated with forecasted foreign-currency-denominated intercompany inventory transactions with foreign subsidiaries before inventory is sold to third parties. Fluctuations in exchange rates will either increase or decrease the Company’s intercompany equivalent cash flows and affect the Company’s U.S. Dollar earnings. Gains or losses on the foreign currency exchange forward contracts that are used to hedge these exposures are expected to partially offset this variability. Foreign currency exchange forward contracts represent agreements to exchange the currency of one country for the currency of another country at an agreed upon settlement date. These forward contracts typically have a maximum term of twelve months. The conversion of the inventory to cost of sales, exclusive of depreciation and amortization, will result in the reclassification of related derivative gains and losses that are reported in AOCL on the Consolidated Balance Sheets into earnings. The Company also uses foreign currency exchange forward contracts to hedge certain foreign-currency-denominated net monetary assets and liabilities, such as cash balances, receivables and payables. Fluctuations in foreign currency exchange rates result in transaction gains and losses being recorded in earnings as monetary assets and liabilities are remeasured at the spot exchange rate at the Company’s fiscal month-end or upon settlement. The Company has chosen not to apply hedge accounting to these foreign currency exchange forward contracts because there are no differences in the timing of gain or loss recognition on the hedging instruments and the hedged items. The Company presents its derivative assets and derivative liabilities at their gross fair values within other current assets and accrued liabilities, respectively, on the Consolidated Balance Sheets. However, the Company’s derivative instruments allow net settlements under certain conditions. Refer to Note 15, “ DERIVATIVE INSTRUMENTS . ” |
Stockholders' equity | Stockholders’ equity A summary of the Company’s Class A Common Stock (the “Common Stock”), $0.01 par value, and Class B Common Stock, $0.01 par value, follows: (in thousands) January 29, 2022 January 30, 2021 Class A Common Stock Shares authorized 150,000 150,000 Shares issued 103,300 103,300 Shares outstanding 52,985 62,399 Class B Common Stock (1) Shares authorized 106,400 106,400 (1) No shares were issued or outstanding as of each of January 29, 2022 and January 30, 2021. |
Revenue recognition | Revenue recognition The Company recognizes revenue from product sales when control of the good is transferred to the customer, generally upon pick up at, or shipment from, a Company location. The Company provides shipping and handling services to customers in certain transactions under its digital operations. Revenue associated with the related shipping and handling obligations is deferred until the obligation is fulfilled, typically upon the customer’s receipt of the merchandise. The related shipping and handling costs are classified in stores and distribution expense on the Consolidated Statements of Operations and Comprehensive Income (Loss). Revenue is recorded net of estimated returns, associate discounts, promotions and other similar customer incentives. The Company estimates reserves for sales returns based on historical experience among other factors. The sales return reserve is classified in accrued expenses on the Consolidated Balance Sheets. The Company accounts for gift cards sold to customers by recognizing an unearned revenue liability at the time of sale, which is recognized as net sales when redeemed by the customer or when the Company has determined the likelihood of redemption to be remote, referred to as gift card breakage. Gift card breakage is recognized proportionally with gift card redemptions in net sales. Gift cards sold to customers do not expire or lose value over periods of inactivity and the Company is not required by law to escheat the value of unredeemed gift cards to the jurisdictions in which it operates. The Company also maintains loyalty programs, which primarily provide customers with the opportunity to earn points toward future merchandise discount rewards with qualifying purchases. The Company accounts for expected future reward redemptions by recognizing an unearned revenue liability as customers accumulate points, which remains until revenue is recognized at the earlier of redemption or expiration. Unearned revenue liabilities related to the Company’s gift card program and loyalty programs are classified in accrued expenses on the Consolidated Balance Sheets and are typically recognized as revenue within a 12-month period. For additional details on the Company’s unearned revenue liabilities related to the Company’s gift card and loyalty programs, refer to Note 4, “ REVENUE RECOGNITION .” The Company also recognizes revenue under wholesale arrangements, which revenue is generally recognized upon shipment, when control passes to the wholesale partner. Revenue from the Company’s franchise and license arrangements, primarily royalties earned upon the sale of merchandise, is generally recognized at the time merchandise is sold to the franchisees’ retail customers or to the licensees’ wholesale customers. The Company does not include tax amounts collected from customers on behalf of third parties, including sales and indirect taxes, in net sales. All revenues are recognized in net sales in the Consolidated Statements of Operations and Comprehensive Income (Loss). For a discussion of the disaggregation of revenue, refer to Note 18, “ SEGMENT REPORTING . |
Cost of sales, exclusive of depreciation and amortization | Cost of sales, exclusive of depreciation and amortization Cost of sales, exclusive of depreciation and amortization on the Consolidated Statements of Operations and Comprehensive Income (Loss), primarily consists of cost incurred to ready inventory for sale, including product costs, freight, and import costs, as well as provisions for reserves for shrink and lower of cost and net realizable value. Gains and losses associated with the effective portion of designated foreign currency exchange forward contracts related to the hedging of intercompany inventory transactions are also recognized in cost of sales, exclusive of depreciation and amortization, on the Consolidated Statements of Operations and Comprehensive Income (Loss). The Company’s cost of sales, exclusive of depreciation and amortization, and consequently gross profit, may not be comparable to those of other retailers, as inclusion of certain costs vary across the industry. Some retailers include all costs related to buying, design and distribution operations in cost of sales, while others may include either all or a portion of these costs in selling, general and administrative expenses. |
Stores and distribution expense | Stores and distribution expense Stores and distribution expense on the Consolidated Statements of Operations and Comprehensive Income (Loss) primarily consists of: store payroll; store management; operating lease costs; utilities and other landlord expenses; depreciation and amortization, except for those amounts included in marketing, general and administrative expense; repairs and maintenance and other store support functions; marketing and other costs related to the Company’s digital operations; shipping and handling costs; and distribution center (“DC”) expense. A summary of shipping and handling costs, which includes costs incurred to store, move and prepare product for shipment and costs incurred to physically move product to our customers across channels, follows: (in thousands) Fiscal 2021 Fiscal 2020 Fiscal 2019 Shipping and handling costs $ 306,222 $ 291,534 $ 224,604 |
Marketing, general & administrative expense | Marketing, general and administrative expense Marketing, general and administrative expense on the Consolidated Statements of Operations and Comprehensive Income (Loss) primarily consists of: home office compensation and marketing, except for those departments included in stores and distribution expense; information technology; outside services, such as legal and consulting; depreciation, primarily related to IT and other home office assets; amortization related to trademark assets; costs to design and develop the Company’s merchandise; relocation; recruiting; and travel expenses. |
Other operating income, net | Other operating income, net Other operating income, net on the Consolidated Statements of Operations and Comprehensive Income (Loss) primarily consists of gains and losses resulting from foreign-currency-denominated transactions. A summary of foreign-currency-denominated transactions, including those related to derivative instruments, follows: (in thousands) Fiscal 2021 Fiscal 2020 Fiscal 2019 Foreign-currency-denominated transaction gains $ 4,232 $ 3,933 $ 348 |
Interest Expense | Interest expense, net Interest expense primarily consisted of interest expense on the Company’s long-term borrowings outstanding. Interest income primarily consisted of interest income earned on the Company’s investments and cash holdings and realized gains from the Rabbi Trust assets. A summary of interest expense, net follows: (in thousands) Fiscal 2021 Fiscal 2020 Fiscal 2019 Interest expense $ 37,958 $ 31,726 $ 19,908 Interest income (3,848) (3,452) (12,171) Interest expense, net $ 34,110 $ 28,274 $ 7,737 |
Advertising costs | Advertising costs Advertising costs consist primarily of paid media advertising, direct digital advertising, including e-mail distribution, digital content and in-store photography and signage. Advertising costs related specifically to digital operations are expensed as incurred and the production of in-store photography and signage is expensed when the marketing campaign commences as components of stores and distribution expense. All other advertising costs are expensed as incurred as components of marketing, general and administrative expense. A summary of advertising costs follows: (in thousands) Fiscal 2021 Fiscal 2020 Fiscal 2019 Advertising costs $ 204,575 $ 118,537 $ 134,058 |
Leased facilities | Leases The Company determines if an arrangement is an operating lease at inception. For new operating leases, the Company recognizes an asset for the right to use a leased asset and a liability based on the present value of remaining lease payments over the lease term on the lease commencement date. The commencement date for new leases is when the lessor makes the leased asset available for use by the Company, typically the possession date. As the rates implicit in the Company’s leases are not readily determinable, the Company uses its incremental borrowing rate based on the transactional currency of the operating lease and the lease term for the initial measurement of the operating lease right-of-use asset and liability. For operating leases existing before the adoption of the current lease accounting standard, the Company used its incremental borrowing rate as of the date of adoption, determined using the remaining lease term as of the date of adoption. For operating leases commencing on or after the adoption of the current lease accounting standard, the incremental borrowing rate is determined using the remaining lease term as of the lease commencement date. The Company has elected to combine lease and nonlease components for all current classes of underlying leased assets. The measurement of operating lease right-of-use assets and liabilities includes amounts related to: • Lease payments made prior to the lease commencement date; • Incentives from landlords received by the Company for signing a lease, including construction allowances or deferred lease credits paid to the Company by landlords towards construction and tenant improvement costs, which are presented as a reduction to the right-of-use asset recorded; • Fixed payments related to operating lease components, such as rent escalation payments scheduled at the lease commencement date; • Fixed payments related to nonlease components, such as taxes, insurance, and maintenance costs; and • Unamortized initial direct costs incurred in conjunction with securing a lease, including key money, which are amounts paid directly to a landlord in exchange for securing the lease, and leasehold acquisition costs, which are amounts paid to parties other than the landlord, such as an existing tenant, to secure the desired lease. The measurement of operating lease right-of-use assets and liabilities excludes amounts related to: • Costs expected to be incurred to return a leased asset to its original condition, also referred to as asset retirement obligations, which are classified within other liabilities on the Consolidated Balance Sheets; • Variable payments related to operating lease components, such as contingent rent payments made by the Company based on performance, the expense of which is recognized in the period incurred on the Consolidated Statements of Operations and Comprehensive Income (Loss); • Variable payments related to nonlease components, such as taxes, insurance, and maintenance costs, the expense of which is recognized in the period incurred in the Consolidated Statements of Operations and Comprehensive Income (Loss); and • Leases not related to Company-operated retail stores with an initial term of 12 months or less, the expense of which is recognized in the period incurred in the Consolidated Statements of Operations and Comprehensive Income (Loss). Certain of the Company’s operating leases include options to extend the lease or to terminate the lease. The Company assesses these operating leases and, depending on the facts and circumstances, may or may not include these options in the measurement of the Company’s operating lease right-of-use assets and liabilities. Generally, the Company’s options to extend its operating leases are at the Company’s sole discretion and at the time of lease commencement are not reasonably certain of being exercised. There may be instances in which a lease is being renewed on a month-to-month basis and, in these instances, the Company will recognize lease expense in the period incurred in the Consolidated Statements of Operations and Comprehensive Income (Loss) until a new agreement has been executed. Upon the signing of the renewal agreement, the Company recognizes an asset for the right to use the leased asset and a liability based on the present value of remaining lease payments over the lease term. Amortization and interest expense related to operating lease right-of-use assets and liabilities are generally calculated on a straight-line basis over the lease term. Amortization and interest expense related to previously impaired operating lease right-of-use assets are calculated on a front-loaded pattern. Depending on the nature of the operating lease, amortization and interest expense are primarily recorded within stores and distribution expense, marketing, general and administrative expense, or flagship store exit (benefits) charges on the Consolidated Statements of Operations and Comprehensive Income (Loss). The Company’s operating lease agreements do not contain any material residual value guarantees or material restrictive covenants. In addition, the Company does not have any sublease arrangements with any related party. The Company adopted Accounting Standards Update No. 2016-02, Leases (Topic 842) and its subsequent amendments effective February 3, 2019. Adoption of this standard resulted in the Company’s total assets and total liabilities on the Consolidated Balance Sheet each increasing by approximately $1.2 billion on the date of adoption, primarily due to the recognition of operating lease right-of-use assets and liabilities. Certain of these newly-established operating lease right-of-use assets related to previously impaired stores and, therefore, were assessed for impairment upon adoption. To the extent that the initial carrying amount for each such lease right-of-use asset was greater than its fair value, an asset impairment charge was recognized as an adjustment to the opening balance of retained earnings on the date of adoption. As a result, the Company recognized a cumulative adjustment decreasing the opening balance of retained earnings by $0.1 billion on the date of adoption. Refer to Note 8, “ LEASES .” |
Share-based compensation | Share-based compensation The Company issues shares of Common Stock from treasury stock upon exercise of stock appreciation rights and vesting of restricted stock units, including those converted from performance share awards. As of January 29, 2022, the Company had sufficient treasury stock available to settle restricted stock units and stock appreciation rights outstanding. Settlement of stock awards in Common Stock also requires that the Company have sufficient shares available in stockholder-approved plans at the applicable time. In the event, at each reporting date as of which share-based compensation awards remain outstanding, there are not sufficient shares of Common Stock available to be issued under the Abercrombie & Fitch Co. 2016 Long-Term Incentive Plan for Directors (as amended effective May 20, 2020, the “2016 Directors LTIP”) and the Abercrombie & Fitch Co. 2016 Long-Term Incentive Plan for Associates (as amended effective June 9, 2021, the “2016 Associates LTIP”), or under a successor or replacement plan, the Company may be required to designate some portion of the outstanding awards to be settled in cash, which would result in liability classification of such awards. The fair value of liability-classified awards would be re-measured each reporting date until such awards no longer remain outstanding or until sufficient shares of Common Stock become available to be issued under the existing plans or under a successor or replacement plan. As long as the awards are required to be classified as a liability, the change in fair value would be recognized in current period expense based on the requisite service period rendered. Fair value of both service-based and performance-based restricted stock units is calculated using the market price of the underlying Common Stock on the date of grant reduced for anticipated dividend payments on unvested shares. In determining fair value, the Company does not take into account performance-based vesting requirements. Performance-based vesting requirements are taken into account in determining the number of awards expected to vest. For market-based restricted stock units, fair value is calculated using a Monte Carlo simulation with the number of shares that ultimately vest dependent on the Company’s total stockholder return measured against the total stockholder return of a select group of peer companies over a three-year period. For awards with performance-based or market-based vesting requirements, the number of shares that ultimately vest can vary from 0% to 200% of target depending on the level of achievement of performance criteria. The Company estimates the fair value of stock appreciation rights using the Black-Scholes option-pricing model, which requires the Company to estimate the expected term of the stock appreciation rights and expected future stock price volatility over the expected term. Estimates of expected terms, which represent the expected periods of time the Company believes stock appreciation rights will be outstanding, are based on historical experience. Estimates of expected future stock price volatility are based on the volatility of the Company’s Common Stock price for the most recent historical period equal to the expected term of the stock appreciation rights, as appropriate. The Company calculates the volatility as the annualized standard deviation of the differences in the natural logarithms of the weekly closing price of the Common Stock, adjusted for stock splits and dividends. Service-based restricted stock units are expensed on a straight-line basis over the award’s requisite service period. Performance-based restricted stock units subject to graded vesting are expensed on an accelerated attribution basis. Performance share award expense is primarily recognized in the performance period of the award’s requisite service period. Market-based restricted stock units without graded vesting features are expensed on a straight-line basis over the award’s requisite service period. Compensation expense for stock appreciation rights is recognized on a straight-line basis over the award’s requisite service period. The Company adjusts share-based compensation expense on a quarterly basis for actual forfeitures. For awards that are expected to result in a tax deduction, a deferred tax asset is recorded in the period in which share-based compensation expense is recognized. A current tax deduction arises upon the issuance of restricted stock units and performance share awards or the exercise of stock options and stock appreciation rights and is principally measured at the award’s intrinsic value. If the tax deduction differs from the recorded deferred tax asset, the excess tax benefit or deficit associated with the tax deduction is recognized within income tax expense. Refer to Note 14, “ SHARE-BASED COMPENSATION .” Plans As of January 29, 2022, the Company had two primary share-based compensation plans: (i) the 2016 Directors LTIP, with 900,000 shares of the Company’s Common Stock authorized for issuance, under which the Company is authorized to grant restricted stock, restricted stock units, stock appreciation rights, stock options and deferred stock awards to non-associate members of the Company’s Board of Directors; and (ii) the 2016 Associates LTIP, with 10,350,000 shares of the Company’s Common Stock authorized for issuance, under which the Company is authorized to grant restricted stock, restricted stock units, performance share awards, stock appreciation rights and stock options to associates of the Company. The Company also has outstanding shares from four other share-based compensation plans under which the Company granted restricted stock units, performance share awards, stock appreciation rights and stock options to associates of the Company and restricted stock units, stock options and deferred stock awards to non-associate members of the Company’s Board of Directors in prior years. No new shares may be granted under these previously-authorized plans and any outstanding awards continue in effect in accordance with their respective terms. The 2016 Directors LTIP, a stockholder-approved plan, permits the Company to annually grant awards to non-associate directors, subject to the following limits: • For non-associate directors: awards with an aggregate fair market value on the date of the grant of no more than $300,000; • For the non-associate director occupying the role of Non-Executive Chairperson of the Board (if any): additional awards with an aggregate fair market value on the date of grant of no more than $500,000; and • For the non-associate director occupying the role of Executive Chairperson of the Board (if any): additional awards with an aggregate fair market value on the date of grant of no more than $2,500,000. Under the 2016 Directors LTIP, restricted stock units are subject to a minimum vesting period ending no sooner than the earlier of (i) the first anniversary of the grant date or (ii) the date of the next regularly scheduled annual meeting of stockholders held after the grant date. Any stock appreciation rights or stock options granted under this plan have the same minimum vesting period requirements as restricted stock units and, in addition, must have a term that does not exceed a period of ten years from the grant date, subject to forfeiture under the terms of the 2016 Directors LTIP. The 2016 Associates LTIP, a stockholder-approved plan, permits the Company to annually grant one or more types of awards covering up to an aggregate for all awards of 1.0 million of underlying shares of the Company’s Common Stock to any associate of the Company. Under the 2016 Associates LTIP, for restricted stock units that have performance-based vesting, performance must be measured over a period of at least one year and for restricted stock units that do not have performance-based vesting, vesting in full may not occur more quickly than in pro-rata installments over a period of three years from the date of the grant, with the first installment vesting no sooner than the first anniversary of the date of the grant. In addition, any stock options or stock appreciation rights granted under this plan must have a minimum vesting period of one year and a term that does not exceed a period of ten years from the grant date, subject to forfeiture under the terms of the 2016 Associates LTIP. Each of the 2016 Directors LTIP and the 2016 Associates LTIP provides for accelerated vesting of awards if there is a change of control and certain other conditions specified in each plan are met. |
Net income per share | Net income (loss) per share attributable to A&F Net income (loss) per basic and diluted share attributable to A&F is computed based on the weighted-average number of outstanding shares of Class A Common Stock. Additional information pertaining to net income (loss) per share attributable to A&F follows: (in thousands) Fiscal 2021 Fiscal 2020 Fiscal 2019 Shares of Common Stock issued 103,300 103,300 103,300 Weighted-average treasury shares (43,703) (40,749) (38,872) Weighted-average — basic shares 59,597 62,551 64,428 Dilutive effect of share-based compensation awards 3,039 — 1,350 Weighted-average — diluted shares 62,636 62,551 65,778 Anti-dilutive shares (1) 1,002 3,270 1,462 (1) Reflects the total number of shares related to outstanding share-based compensation awards that have been excluded from the computation of net income (loss) per diluted share because the impact would have been anti-dilutive. Unvested shares related to restricted stock units with performance-based and market-based vesting conditions can achieve up to 200% of their target vesting amount and are reflected at the maximum vesting amount less any dilutive portion. |
Recent accounting pronouncements | Recent accounting pronouncements The Company reviews recent accounting pronouncements on a quarterly basis and has excluded discussion of those not applicable to the Company and those not expected to have or that did not have a material impact on the Company’s consolidated financial statements. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Jan. 29, 2022 | |
Accounting Policies [Abstract] | |
Cash, Cash Equivalents and Investments | A summary of cash and equivalents on the Consolidated Balance Sheets follows: (in thousands) January 29, 2022 January 30, 2021 Cash (1) $ 762,187 $ 796,994 Cash equivalents: (2) Time deposits 11,643 11,589 Money market funds 49,309 296,279 Cash and equivalents $ 823,139 $ 1,104,862 (1) Primarily consists of amounts on deposit with financial institutions. (2) Investments with original maturities of less than three months. |
Schedule of Cash Flow, Supplemental Disclosures | Consolidated Statements of Cash Flows reconciliation The following table provides a reconciliation of cash and equivalents and restricted cash and equivalents to the amounts shown on the Consolidated Statements of Cash Flows: (in thousands) Location January 29, 2022 January 30, 2021 February 1, 2020 Cash and equivalents Cash and equivalents $ 823,139 $ 1,104,862 $ 671,267 Long-term restricted cash and equivalents Other assets 11,229 14,814 18,696 Short-term restricted cash and equivalents Other current assets — 4,481 2,301 Restricted cash and equivalents (1) $ 11,229 $ 19,295 $ 20,997 Cash and equivalents and restricted cash and equivalents $ 834,368 $ 1,124,157 $ 692,264 |
Schedule of Stock by Class | A summary of the Company’s Class A Common Stock (the “Common Stock”), $0.01 par value, and Class B Common Stock, $0.01 par value, follows: (in thousands) January 29, 2022 January 30, 2021 Class A Common Stock Shares authorized 150,000 150,000 Shares issued 103,300 103,300 Shares outstanding 52,985 62,399 Class B Common Stock (1) Shares authorized 106,400 106,400 (1) No shares were issued or outstanding as of each of January 29, 2022 and January 30, 2021. |
Shipping & Handling Costs | A summary of shipping and handling costs, which includes costs incurred to store, move and prepare product for shipment and costs incurred to physically move product to our customers across channels, follows: (in thousands) Fiscal 2021 Fiscal 2020 Fiscal 2019 Shipping and handling costs $ 306,222 $ 291,534 $ 224,604 |
Other operating income, net | A summary of foreign-currency-denominated transactions, including those related to derivative instruments, follows: (in thousands) Fiscal 2021 Fiscal 2020 Fiscal 2019 Foreign-currency-denominated transaction gains $ 4,232 $ 3,933 $ 348 |
Interest Income and Interest Expense Disclosure | A summary of interest expense, net follows: (in thousands) Fiscal 2021 Fiscal 2020 Fiscal 2019 Interest expense $ 37,958 $ 31,726 $ 19,908 Interest income (3,848) (3,452) (12,171) Interest expense, net $ 34,110 $ 28,274 $ 7,737 |
Advertising Cost | A summary of advertising costs follows: (in thousands) Fiscal 2021 Fiscal 2020 Fiscal 2019 Advertising costs $ 204,575 $ 118,537 $ 134,058 |
Schedule of Weighted Average Number of Shares | Additional information pertaining to net income (loss) per share attributable to A&F follows: (in thousands) Fiscal 2021 Fiscal 2020 Fiscal 2019 Shares of Common Stock issued 103,300 103,300 103,300 Weighted-average treasury shares (43,703) (40,749) (38,872) Weighted-average — basic shares 59,597 62,551 64,428 Dilutive effect of share-based compensation awards 3,039 — 1,350 Weighted-average — diluted shares 62,636 62,551 65,778 Anti-dilutive shares (1) 1,002 3,270 1,462 |
REVENUE RECOGNITION (Tables)
REVENUE RECOGNITION (Tables) | 12 Months Ended |
Jan. 29, 2022 | |
Revenue Recognition, Multiple-deliverable Arrangements [Line Items] | |
Deferred Revenue, by Arrangement, Disclosure [Table Text Block] | The following table details certain contract liabilities representing unearned revenue as of January 29, 2022 and January 30, 2021: (in thousands) January 29, 2022 January 30, 2021 Gift card liability $ 36,984 $ 28,561 Loyalty programs liability 22,757 20,426 The following table details recognized revenue associated with the Company’s gift card program and loyalty programs for Fiscal 2021 and Fiscal 2020: (in thousands) Fiscal 2021 Fiscal 2020 Revenue associated with gift card redemptions and gift card breakage $ 80,088 $ 58,400 Revenue associated with reward redemptions and breakage related to the Company’s loyalty programs 45,417 37,042 |
FAIR VALUE (Tables)
FAIR VALUE (Tables) | 12 Months Ended |
Jan. 29, 2022 | |
Fair Value Disclosures [Abstract] | |
Schedule of the Company's Assets and Liabilities measured at Fair Value | The three levels of the hierarchy and the distribution of the Company’s assets and liabilities that are measured at fair value on a recurring basis, were as follows: Assets and Liabilities at Fair Value as of January 29, 2022 (in thousands) Level 1 Level 2 Level 3 Total Assets: Cash equivalents (1) $ 49,309 $ 11,643 $ — $ 60,952 Derivative instruments (2) — 4,973 — 4,973 Rabbi Trust assets (3) 1 62,272 — 62,273 Restricted cash equivalents (1) 5,391 2,326 — 7,717 Total assets $ 54,701 $ 81,214 $ — $ 135,915 Assets and Liabilities at Fair Value as of January 30, 2021 (in thousands) Level 1 Level 2 Level 3 Total Assets: Cash equivalents (1) $ 296,279 $ 11,589 $ — $ 307,868 Derivative instruments (2) — 79 — 79 Rabbi Trust assets (3) 1 60,789 — 60,790 Restricted cash equivalents (1) 2,943 7,775 — 10,718 Total assets $ 299,223 $ 80,232 $ — $ 379,455 Liabilities: Derivative instruments (2) $ — $ 4,694 $ — $ 4,694 Total liabilities $ — $ 4,694 $ — $ 4,694 |
Fair Value, Assets and Liabilities Measured on Nonrecurring Basis, Valuation Techniques [Table Text Block] | The carrying amount and fair value of the Company’s long-term gross borrowings were as follows: (in thousands) January 29, 2022 January 30, 2021 Gross borrowings outstanding, carrying amount $ 307,730 $ 350,000 Gross borrowings outstanding, fair value 327,732 389,813 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 12 Months Ended |
Jan. 29, 2022 | |
Inventories, Net [Abstract] | |
Schedule of Inventory, Current [Table Text Block] | Inventories consisted of: (in thousands) January 29, 2022 January 30, 2021 Inventories at original cost $ 549,030 $ 429,993 Less: Lower of cost and net realizable value adjustment (17,196) (21,076) Less: Shrink estimate (5,970) (4,864) Inventories (1) $ 525,864 $ 404,053 |
Schedules of Concentration of Risk, by Risk Factor | A summary of the Company’s vendors based on location and the percentage of dollar cost of merchandise receipts during Fiscal 2021, and Fiscal 2020 follows: % of Total Company Merchandise Receipts (1) Location Fiscal 2021 Fiscal 2020 Vietnam 36 % 41 % China (2) 14 12 Cambodia 16 15 Other (3) 34 32 Total 100 % 100 % (1) Calculated as the cost of merchandise receipts from all vendors within a country during the respective fiscal year divided by cost of total merchandise receipts during the respective fiscal year. (2) Only a portion of the Company’s total merchandise sourced from China is subject to the additional U.S. tariffs on imported consumer goods that were effective beginning in Fiscal 2019. The Company estimates approximately 9%, 7% and 15% of total merchandise receipts were directly imported to the U.S. from China in Fiscal 2021, Fiscal 2020 and Fiscal 2019, respectively. (3) No country included within this category sourced more than 10% of total merchandise receipts during any fiscal year presented above. |
PROPERTY AND EQUIPMENT, NET (Ta
PROPERTY AND EQUIPMENT, NET (Tables) | 12 Months Ended |
Jan. 29, 2022 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment, Net | Property and equipment, net consisted of: (in thousands) January 29, 2022 January 30, 2021 Land $ 28,599 $ 28,599 Buildings 233,523 230,104 Furniture, fixtures and equipment 622,912 608,210 Information technology 643,244 607,062 Leasehold improvements 913,729 990,238 Construction in progress 9,483 22,744 Other 2,003 2,000 Total 2,453,493 2,488,957 Less: Accumulated depreciation (1,945,157) (1,938,370) Property and equipment, net $ 508,336 $ 550,587 |
LEASES (Tables)
LEASES (Tables) | 12 Months Ended |
Jan. 29, 2022 | |
Leases [Abstract] | |
Lease, Cost [Table Text Block] | The following table provides a summary of the Company’s operating lease costs for Fiscal 2021, Fiscal 2020 and Fiscal 2019 : (in thousands) Fiscal 2021 Fiscal 2020 Fiscal 2019 Single lease cost (1) $ 272,246 $ 346,178 $ 427,982 Variable lease cost (2) 110,889 65,310 143,472 Operating lease right-of-use asset impairment (3) 9,509 57,026 15,812 Sublease Income (4,292) — — Total operating lease cost $ 388,352 $ 468,514 $ 587,266 (1) Includes amortization and interest expense associated with operating lease right-of-use assets and the impact from remeasurement of operating lease liabilities. (2) Includes variable payments related to both lease and nonlease components, such as contingent rent payments made by the Company based on performance, and payments related to taxes, insurance, and maintenance costs, as well as $14.1 million and $30.1 million of rent abatements in Fiscal 2021 and Fiscal 2020, respectively, related to the effects of the COVID-19 pandemic that resulted in lease concessions with total payments required by the modified contract being substantially the same as or less than total payments required by the original contract. The total benefit related to rent abatements recognized during Fiscal 2021 and Fiscal 2020 was $17.9 million and $30.7 million respectively. (3) Refer to Note 9, “ ASSET IMPAIRMENT ,” for details related to operating lease right-of-use asset impairment charges. |
Lessee, Operating Lease, Liability, Maturity [Table Text Block] | The following table provides the weighted-average remaining lease term of the Company’s operating leases and the weighted-average discount rate used to calculate the Company’s operating lease liabilities as of January 29, 2022 and January 30, 2021: January 29, 2022 January 30, 2021 Weighted-average remaining lease term (years) 5.3 5.7 Weighted-average discount rate 5.6 % 5.6 % The following table provides a maturity analysis of the Company’s operating lease liabilities, based on undiscounted cash flows, as of January 29, 2022: (in thousands) January 29, 2022 Fiscal 2022 $ 266,893 Fiscal 2023 215,464 Fiscal 2024 152,282 Fiscal 2025 131,972 Fiscal 2026 106,873 Fiscal 2027 and thereafter 190,984 Total undiscounted operating lease payments 1,064,468 Less: Imputed interest (144,381) Present value of operating lease liabilities $ 920,087 |
ASSET IMPAIRMENT (Tables)
ASSET IMPAIRMENT (Tables) | 12 Months Ended |
Jan. 29, 2022 | |
Asset Impairment [Abstract] | |
Asset Impairment Charges [Table Text Block] | The following table provides additional details related to long-lived asset impairment charges: (in thousands) Fiscal 2021 Fiscal 2020 Fiscal 2019 Operating lease right-of-use asset impairment (1) $ 9,509 $ 57,026 $ 15,812 Property and equipment asset impairment 2,591 15,911 6,552 Total asset impairment $ 12,100 $ 72,937 $ 22,364 (1) Includes $3.2 million of operating lease right-of-use asset impairment included in flagship store exit charges on the Consolidated Statement of Operations and Comprehensive Income for Fiscal 2019. Refer to Note 19, “ FLAGSHIP STORE EXIT (BENEFITS) CHARGES .” |
RABBI TRUST ASSETS (Tables)
RABBI TRUST ASSETS (Tables) | 12 Months Ended |
Jan. 29, 2022 | |
Investments, Debt and Equity Securities [Abstract] | |
Components of Rabbi Trust Assets | Investments of Rabbi Trust assets consisted of the following as of January 29, 2022 and January 30, 2021: (in thousands) January 29, 2022 January 30, 2021 Trust-owned life insurance policies (at cash surrender value) $ 62,272 $ 60,789 Money market funds 1 1 Rabbi Trust assets $ 62,273 $ 60,790 Realized gains resulting from the change in cash surrender value of the Rabbi Trust assets for Fiscal 2021, Fiscal 2020 and Fiscal 2019 were as follows: (in thousands) Fiscal 2021 Fiscal 2020 Fiscal 2019 Realized gains related to Rabbi Trust assets $ 1,483 $ 1,740 $ 3,172 |
ACCRUED EXPENSES (Tables)
ACCRUED EXPENSES (Tables) | 12 Months Ended |
Jan. 29, 2022 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Expenses | Accrued expenses consisted of: (in thousands) January 29, 2022 January 30, 2021 Accrued payroll and related costs (1) $ 90,906 $ 119,978 Accrued costs related to the Company’s DCs and digital operations 48,395 56,135 Other (2) 256,514 220,252 Accrued expenses $ 395,815 $ 396,365 (1) Accrued payroll and related costs include salaries, incentive compensation, benefits, withholdings and other payroll-related costs. (2) Other primarily includes the Company’s gift card and loyalty programs liabilities, accrued taxes, accrued rent and expenses incurred but not yet paid primarily related to outside services associated with store and home office operations and construction in progress. Refer to Note 4, “ REVENUE RECOGNITION .” |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Jan. 29, 2022 | |
Income Tax Disclosure [Abstract] | |
Schedule of Income before Income Tax, Domestic and Foreign | Components of income taxes Income (loss) before income taxes consisted of: (in thousands) Fiscal 2021 Fiscal 2020 Fiscal 2019 Domestic (1) $ 283,793 $ (33,417) $ 17,590 Foreign 25,181 (15,326) 44,741 Income (loss) before income taxes $ 308,974 $ (48,743) $ 62,331 (1) Includes intercompany charges to foreign affiliates for management fees, cost-sharing, royalties and interest and excludes a portion of foreign income that is currently includable on the U.S. federal income tax return. |
Schedule of Components of Income Tax Expense (Benefit) | Income tax expense (benefit) consisted of: (in thousands) Fiscal 2021 Fiscal 2020 Fiscal 2019 Current: Federal $ 51,321 $ 9,434 $ (2,193) State 14,061 3,751 1,893 Foreign 5,448 23,041 8,521 Total current $ 70,830 $ 36,226 $ 8,221 Deferred: Federal (1) $ (15,401) $ (73,104) $ 29,012 State (8,995) 8,828 (107) Foreign (1) (7,526) 88,261 (19,755) Total deferred (31,922) 23,985 9,150 Income tax expense $ 38,908 $ 60,211 $ 17,371 |
Schedule of Effective Income Tax Rate Reconciliation | Reconciliation between the statutory federal income tax rate and the effective tax rate is as follows: Fiscal 2021 Fiscal 2020 Fiscal 2019 U.S. federal corporate income tax rate 21.0 % 21.0 % 21.0 % Audit and other adjustments to prior years’ accruals, net 4.7 2.6 0.8 State income tax, net of U.S. federal income tax effect 4.4 2.6 1.9 Foreign taxation of non-U.S. operations (1) 3.5 32.7 5.5 Internal Revenue Code Section 162(m) 1.6 (5.5) 2.2 Additional U.S. taxation of non-U.S. operations 0.6 (0.2) (1.4) Permanent items 0.2 — 0.3 Net change in valuation allowances (19.7) (177.2) 8.2 Tax (benefit) expense recognized on share-based compensation (2) (1.3) (7.5) (0.9) Other statutory tax rate and law changes (1.2) 2.3 (0.9) Credit for increasing research activities (0.6) 2.6 (3.6) Net income attributable to noncontrolling interests (0.5) 2.2 (1.9) Trust-owned life insurance policies (at cash surrender value) (0.1) 0.7 (1.1) Credit items — 0.2 (0.8) Write-off of stock basis in subsidiary — — 3.2 Statutory tax rate and law changes due to Swiss Tax Reform — — (4.6) Total 12.6 % (123.5) % 27.9 % (1) U.S. branch operations in Canada and Puerto Rico were subject to tax at the full U.S. tax rates. As a result, income from these operations do not create reconciling items. Effective in 2019, only Puerto Rico continues to be a branch of the U.S. (2) Refer to Note 14, “ SHARE-BASED COMPENSATION ,” for details on discrete income tax benefits and charges related to share-based compensation awards during Fiscal 2021, Fiscal 2020, and Fiscal 2019. |
Schedule of Deferred Tax Assets and Liabilities | The effect of temporary differences which gives rise to deferred income tax assets (liabilities) were as follows: (in thousands) January 29, 2022 January 30, 2021 Deferred income tax assets: Operating lease liabilities $ 242,290 $ 311,286 Intangibles, foreign step-up in basis (1) 64,281 81,357 Net operating losses (NOL), tax credit and other carryforwards 52,970 56,341 Accrued expenses and reserves 30,026 32,649 Deferred compensation 16,050 16,294 Inventory 3,578 — Rent — 530 Other 45 2,171 Valuation allowances (110,057) (174,302) Total deferred income tax assets $ 299,183 $ 326,326 Deferred income tax liabilities: Operating lease right-of-use assets $ (202,916) $ (253,417) Property and equipment and intangibles (10,150) (15,328) Prepaid expenses (2,451) (387) Store supplies (1,811) (2,042) Undistributed profits of non-U.S. subsidiaries (1,082) (318) Rent (360) — Inventory — (1,499) U.S. offset to foreign deferred tax assets, excluding intangibles, foreign step-up in basis (2) — (183) Other (30) (3,499) Total deferred income tax liabilities $ (218,800) $ (276,673) Net deferred income tax assets (2) $ 80,383 $ 49,653 |
Summary of Positions for which Significant Change in Unrecognized Tax Benefits is Reasonably Possible | The amount of uncertain tax positions as of January 29, 2022, January 30, 2021 and February 1, 2020, which would impact the Company’s effective tax rate if recognized and a reconciliation of the beginning and ending amounts of uncertain tax positions, excluding accrued interest and penalties, are as follows: (in thousands) Fiscal 2021 Fiscal 2020 Fiscal 2019 Uncertain tax positions, beginning of the year $ 995 $ 1,794 $ 478 Gross addition for tax positions of the current year 490 235 131 Gross (reduction) addition for tax positions of prior years (136) 395 1,349 Reductions of tax positions of prior years for: Lapses of applicable statutes of limitations (81) (48) (151) Settlements during the period (154) (1,381) (13) Uncertain tax positions, end of year $ 1,114 $ 995 $ 1,794 |
BORROWINGS (Tables)
BORROWINGS (Tables) | 12 Months Ended |
Jan. 29, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of Borrowings | Details on the Company’s long-term borrowings, net, as of January 29, 2022 and January 30, 2021 are as follows: (in thousands) January 29, 2022 January 30, 2021 Long-term portion of borrowings, gross at carrying amount $ 307,730 $ 350,000 Unamortized fees (4,156) (6,090) Long-term portion of borrowings, net $ 303,574 $ 343,910 |
SHARE-BASED COMPENSATION (Table
SHARE-BASED COMPENSATION (Tables) | 12 Months Ended |
Jan. 29, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Share-based Payment Arrangement, Expensed and Capitalized, Amount | The following table details share-based compensation expense and the related income tax benefit for Fiscal 2021, Fiscal 2020 and Fiscal 2019: (in thousands) Fiscal 2021 Fiscal 2020 Fiscal 2019 Share-based compensation expense $ 29,304 $ 18,682 $ 14,007 Income tax benefit associated with share-based compensation expense recognized during the period (1) 3,338 — 2,649 (1) No income tax benefit was recognized during Fiscal 2020 due to the establishment of a valuation allowance. The following table details discrete income tax benefits and charges related to share-based compensation awards during Fiscal 2021, Fiscal 2020 and Fiscal 2019: (in thousands) Fiscal 2021 Fiscal 2020 Fiscal 2019 Income tax discrete benefits (charges) realized for tax deductions related to the issuance of shares during the period $ 4,198 $ (1,719) $ 1,156 Income tax discrete charges realized upon cancellation of stock appreciation rights during the period (204) (1,943) (611) Total income tax discrete benefits (charges) related to share-based compensation awards $ 3,994 $ (3,662) $ 545 The following table details the amount of employee tax withheld by the Company upon the issuance of shares associated with restricted stock units vesting and the exercise of stock appreciation rights for the Fiscal 2021, Fiscal 2020 and Fiscal 2019: (in thousands) Fiscal 2021 Fiscal 2020 Fiscal 2019 Employee tax withheld upon issuance of shares (1) $ 13,163 $ 5,694 $ 6,804 (1) Classified within other financing activities on the Consolidated Statements of Cash Flows. |
Schedule of Restricted Stock Unit Activity | The following table summarizes activity for restricted stock units for Fiscal 2021: Service-based Restricted Performance-based Restricted Market-based Restricted Number of Weighted- Number of Underlying Shares (1) Weighted- Number of Underlying Shares (1) Weighted- Unvested at January 30, 2021 3,037,098 $ 11.62 297,216 $ 22.43 721,879 $ 21.46 Granted 730,446 32.80 157,645 32.09 78,827 50.31 Adjustments for performance achievement — — (106,715) 29.92 (6,084) 33.69 Vested (1,089,706) 12.26 — — (100,634) 33.69 Forfeited (145,598) 16.67 (7,997) 29.92 (13,804) 25.13 Unvested at January 29, 2022 (1) 2,532,240 $ 17.16 340,149 $ 27.08 680,184 $ 22.81 (1) Unvested shares related to restricted stock units with performance-based and market-based vesting conditions are reflected at 100% of their target vesting amount in the table above. Unvested shares related to restricted stock units with performance-based and market-based vesting conditions can be achieved at up to 200% of their target vesting amount. The following table details unrecognized compensation cost and the remaining weighted-average period over which these costs are expected to be recognized for restricted stock units as of January 29, 2022: (in thousands) Service-based Restricted Performance-based Restricted Market-based Restricted Unrecognized compensation cost $ 28,333 $ — $ 14,173 Remaining weighted-average period cost is expected to be recognized (years) 1.2 0.0 0.8 |
Schedule of Stock Appreciation Rights Activity | The following table summarizes stock appreciation rights activity for Fiscal 2021: Number of Weighted-Average Aggregate Weighted-Average Outstanding at January 30, 2021 384,757 $ 33.04 Granted — — Exercised (111,868) 26.95 Forfeited or expired (36,750) 54.73 Outstanding at January 29, 2022 236,139 $ 32.55 $ 1,276,809 2.3 Stock appreciation rights exercisable at January 29, 2022 236,139 $ 32.55 $ 1,276,809 2.3 No stock appreciation rights were exercised during Fiscal 2020. The grant date fair value of awards exercised during Fiscal 2021 and Fiscal 2019 follows: (in thousands) Fiscal 2021 Fiscal 2019 Total grant date fair value of awards exercised $ 1,069 $ 626 |
Market-based Restricted Stock Units (RSUs) | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Schedule of Weighted-Average Estimated Fair Value and Assumptions of Market-based Restricted Stock Units | The weighted-average assumptions used for market-based restricted stock units in the Monte Carlo simulation during Fiscal 2021, Fiscal 2020 and Fiscal 2019 were as follows: Fiscal 2021 Fiscal 2020 Fiscal 2019 Grant date market price $ 31.78 $ 12.31 $ 25.34 Fair value 49.81 16.24 36.24 Assumptions: Price volatility 66 % 67 % 57 % Expected term (years) 2.9 2.4 2.9 Risk-free interest rate 0.3 % 0.2 % 2.2 % Dividend yield — — 3.2 Average volatility of peer companies 72.0 % 66.0 % 40.0 % Average correlation coefficient of peer companies 0.4694 0.4967 0.2407 |
DERIVATIVE INSTRUMENTS (Tables)
DERIVATIVE INSTRUMENTS (Tables) | 12 Months Ended |
Jan. 29, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Outstanding Foreign Exchange Forward Contracts | As of January 29, 2022, the Company had outstanding the following foreign currency exchange forward contracts that were entered into to hedge either a portion, or all, of forecasted foreign-currency-denominated intercompany inventory transactions, the resulting settlement of the foreign-currency-denominated intercompany accounts receivable, or both: (in thousands) Notional Amount (1) Euro $ 60,962 British pound 32,044 Canadian dollar 10,026 Japanese yen 4,471 (1) Amounts reported are the U.S. Dollar notional amounts outstanding as of January 29, 2022. |
Schedule of Locations and Amounts of Derivative Fair Values on the Consolidated Balance Sheets | The location and amounts of derivative fair values of foreign currency exchange forward contracts on the Consolidated Balance Sheets as of January 29, 2022 and January 30, 2021 were as follows: (in thousands) Location January 29, 2022 January 30, 2021 Location January 29, 2022 January 30, 2021 Derivatives designated as cash flow hedging instruments Other current assets $ 4,973 $ 79 Accrued expenses $ — $ 4,694 |
Schedule of Locations and Amounts of Derivative Gains (Losses) on the Consolidated Statements of Operations and Comprehensive Income | Additional information pertaining to derivative gains or losses from foreign currency exchange forward contracts designated as cash flow hedging instruments for Fiscal 2021, Fiscal 2020 and Fiscal 2019 follows: (in thousands) Fiscal 2021 Fiscal 2020 Fiscal 2019 Gain recognized in AOCL (1) $ 11,987 $ 7,619 $ 7,495 Gain reclassified from AOCL into cost of sales, exclusive of depreciation and amortization (2) 1,263 13,235 9,160 (1) Amount represents the change in fair value of derivative instruments. As a result of COVID-19 in Fiscal 2020, there was a significant change in the expected timing of previously hedged intercompany sales transactions, resulting in a dedesignation of the related hedge instruments. At the time of dedesignation of these hedges, they were in a net gain position of approximately $12.6 million. Due to the extenuating circumstances leading to dedesignation, gains associated with these hedges at the time of dedesignation were deferred in AOCL until being reclassified into cost of goods sold, exclusive of depreciation and amortization when the originally forecasted transactions occurred and the hedged items affected earnings. During Fiscal 2020 and subsequent to the dedesignation of these hedges, these hedge contracts were settled. (2) Amount represents gain reclassified from AOCL to cost of sales, exclusive of depreciation and amortization, on the Consolidated Statements of Operations and Comprehensive Income (Loss) when the hedged item affected earnings, which was when merchandise was converted to cost of sales, exclusive of depreciation and amortization. Substantially all of the unrealized gains or losses related to foreign currency exchange forward contracts designated as cash flow hedging instruments as of January 29, 2022 will be recognized within the Consolidated Statements of Operations and Comprehensive Income (Loss) over the next 12 months. Additional information pertaining to derivative gains or losses from foreign currency exchange forward contracts not designated as hedging instruments for Fiscal 2021, Fiscal 2020 and Fiscal 2019 follows: (in thousands) Fiscal 2021 Fiscal 2020 Fiscal 2019 Gain (loss) recognized in other operating income, net $ 1,205 $ 742 $ (298) |
ACCUMULATED OTHER COMPREHENSI_2
ACCUMULATED OTHER COMPREHENSIVE LOSS (Tables) | 12 Months Ended | ||
Jan. 29, 2022 | Jan. 30, 2021 | Feb. 01, 2020 | |
Equity [Abstract] | |||
Schedule of Accumulated Other Comprehensive (Loss) Income | For Fiscal 2021, the activity in AOCL was as follows: Fiscal 2021 (in thousands) Foreign Currency Translation Adjustment Unrealized Gain (Loss) on Derivative Financial Instruments Total Beginning balance at January 30, 2021 $ (97,772) $ (4,535) $ (102,307) Other comprehensive (loss) income before reclassifications (22,917) 11,987 (10,930) Reclassified gain from AOCL (1) — (1,263) (1,263) Tax effect — (206) (206) Other comprehensive income (loss) after reclassifications (22,917) 10,518 (12,399) Ending balance at January 29, 2022 $ (120,689) $ 5,983 $ (114,706) (1) Amount represents gain reclassified from AOCL to cost of sales, exclusive of depreciation and amortization, on the Consolidated Statements of Operations and Comprehensive (Loss) Income. | For Fiscal 2020, the activity in AOCL was as follows: Fiscal 2020 (in thousands) Foreign Currency Translation Adjustment Unrealized Gain (Loss) on Derivative Financial Instruments Total Beginning balance at February 1, 2020 $ (109,967) $ 1,081 $ (108,886) Other comprehensive income before reclassifications 12,195 7,619 19,814 Reclassified gain from AOCL (1) — (13,235) (13,235) Tax effect — — — Other comprehensive income (loss) after reclassifications (2) 12,195 (5,616) 6,579 Ending balance at January 30, 2021 $ (97,772) $ (4,535) $ (102,307) (1) Amount represents gain reclassified from AOCL to cost of sales, exclusive of depreciation and amortization, on the Consolidated Statements of Operations and Comprehensive Income (Loss). (2) No income tax benefit was recognized during Fiscal 2020 due to the establishment of a valuation allowance. | r Fiscal 2019, the activity in AOCL was as follows: Fiscal 2019 (in thousands) Foreign Currency Translation Adjustment Unrealized Gain (Loss) on Derivative Financial Instruments Total Beginning balance at February 2, 2019 $ (104,887) $ 2,435 $ (102,452) Other comprehensive (loss) income before reclassifications (5,080) 7,495 2,415 Reclassified gain from AOCL (1) — (9,160) (9,160) Tax effect — 311 311 Other comprehensive (loss) income after reclassifications (5,080) (1,354) (6,434) Ending balance at February 1, 2020 $ (109,967) $ 1,081 $ (108,886) (1) Amount represents gain reclassified from AOCL to cost of sales, exclusive of depreciation and amortization, on the Consolidated Statements of Operations and Comprehensive Income (Loss). |
SEGMENT REPORTING (Tables)
SEGMENT REPORTING (Tables) | 12 Months Ended |
Jan. 29, 2022 | |
Segment Reporting [Abstract] | |
Schedule of Net Sales by Brand [Table Text Block] | The Company’s net sales by operating segment for Fiscal 2021, Fiscal 2020 and Fiscal 2019 were as follows: (in thousands) Fiscal 2021 Fiscal 2020 Fiscal 2019 Hollister $ 2,147,979 $ 1,834,349 $ 2,158,514 Abercrombie 1,564,789 1,291,035 1,464,559 Total $ 3,712,768 $ 3,125,384 $ 3,623,073 |
Schedule of Revenue from External Customers Attributed to Foreign Countries by Geographic Area [Table Text Block] | Net sales by geographic area are presented by attributing revenues to an individual country on the basis of the country in which the merchandise was sold for in-store purchases and on the basis of the shipping location provided by customers for digital orders. The Company’s net sales by geographic area for Fiscal 2021, Fiscal 2020 and Fiscal 2019 were as follows: (in thousands) Fiscal 2021 Fiscal 2020 Fiscal 2019 U.S. $ 2,652,158 $ 2,127,403 $ 2,410,802 EMEA 755,072 709,451 822,202 APAC 171,701 176,636 264,895 Other 133,837 111,894 125,174 Total international $ 1,060,610 $ 997,981 $ 1,212,271 Total $ 3,712,768 $ 3,125,384 $ 3,623,073 |
Schedule of Disclosure on Geographic Areas, Long-Lived Assets in Individual Foreign Countries by Country [Table Text Block] | The Company’s long-lived assets and intellectual property, which primarily relates to trademark assets associated with the Company’s international operations, by geographic area as of January 29, 2022 and January 30, 2021 were as follows: (in thousands) January 29, 2022 January 30, 2021 U.S. $ 849,298 $ 963,555 EMEA 272,348 350,136 APAC 83,830 120,256 Other 23,599 33,575 Total international $ 379,777 $ 503,967 Total $ 1,229,075 $ 1,467,522 |
FLAGSHIP STORE EXIT (BENEFITS_2
FLAGSHIP STORE EXIT (BENEFITS) CHARGES (Tables) | 12 Months Ended |
Jan. 29, 2022 | |
Flagship Store Exit Charges [Abstract] | |
Restructuring and Related Costs [Table Text Block] | Details of the (benefits) charges incurred during Fiscal 2021, Fiscal 2020 and Fiscal 2019 related to this initiative follow: (in thousands) Fiscal 2021 Fiscal 2020 Fiscal 2019 Operating lease cost $ (841) $ (6,959) $ 46,716 Gain on lease assignment — (5,237) — Asset disposals and other store-closure benefits (1) (514) (2,658) (1,687) Employee severance and other employee transition costs 202 3,218 2,228 Total flagship store exit (benefits) charges $ (1,153) $ (11,636) $ 47,257 (1) Amounts represent costs incurred in returning the store to its original condition, including updates to previous accruals for asset retirement obligations and costs to remove inventory and store assets. |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | |||||
Jan. 29, 2022 | Jan. 30, 2021 | Feb. 01, 2020 | Feb. 02, 2019 | Feb. 03, 2019 | ||
Cash and Cash Equivalents [Line Items] | ||||||
Cash | [1] | $ 762,187 | $ 796,994 | |||
Time Deposits | [2] | 11,643 | 11,589 | |||
Money Market Funds, at Carrying Value | [2] | 49,309 | 296,279 | |||
Cash and Cash Equivalents, at Carrying Value | 823,139 | 1,104,862 | $ 671,267 | |||
Restricted Cash and Cash Equivalents Items [Line Items] | ||||||
Cash and Cash Equivalents, at Carrying Value | 823,139 | 1,104,862 | 671,267 | |||
Restricted Cash and Cash Equivalents, Noncurrent | 11,229 | 14,814 | 18,696 | |||
Restricted Cash and Cash Equivalents, Current | 0 | 4,481 | 2,301 | |||
Restricted cash and equivalents (1) | [3] | 11,229 | 19,295 | 20,997 | ||
Shipping & Handling [Line Items] | ||||||
Shipping and handling costs | $ 306,222 | $ 291,534 | 224,604 | |||
Class of Stock [Line Items] | ||||||
Common Stock, Shares, Issued | 103,300 | 103,300 | ||||
Accounting Policies [Line Items] | ||||||
Interest Expense | $ 37,958 | $ 31,726 | 19,908 | |||
Interest Income, Other | (3,848) | (3,452) | (12,171) | |||
Interest Income (Expense), Net | (34,110) | (28,274) | (7,737) | |||
Advertising expense | 204,575 | 118,537 | 134,058 | |||
Foreign currency transaction gain (loss), before tax | 4,232 | 3,933 | $ 348 | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Total assets | 2,939,491 | 3,314,902 | ||||
Total stockholders’ equity | $ 837,324 | $ 949,312 | $ 1,071,178 | $ 1,218,621 | ||
Intellectual property | Intellectual property Intellectual property primarily includes trademark assets associated with the Company’s international operations, consisting of finite-lived and indefinite-lived intangible assets. The Company’s finite-lived intangible assets are amortized over a useful life of 10 to 20 years. | |||||
Weighted Average Number of Shares Outstanding Reconciliation [Abstract] | ||||||
Anti-Dilutive shares (in shares) | [4] | 1,002 | 3,270 | 1,462 | ||
Shares of Common Stock issued (in shares) | 103,300 | 103,300 | 103,300 | |||
Treasury shares (in shares) | (43,703) | (40,749) | (38,872) | |||
Weighted-Average - basic shares (in shares) | 59,597 | 62,551 | 64,428 | |||
Dilutive effect of share-based compensation awards (in shares) | 3,039 | 0 | 1,350 | |||
Weighted-Average - diluted shares (in shares) | 62,636 | 62,551 | 65,778 | |||
Building [Member] | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Useful life | 30 years | |||||
Minimum [Member] | ||||||
Accounting Policies [Line Items] | ||||||
Finite-Lived Intangible Asset, Useful Life | 10 years | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Finite-Lived Intangible Asset, Useful Life | 10 years | |||||
Minimum [Member] | Information Technology [Member] | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Useful life | 3 years | |||||
Minimum [Member] | Furniture and Fixtures [Member] | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Useful life | 3 years | |||||
Minimum [Member] | Leasehold Improvements and Furniture and Fixtures [Member] | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Useful life | 3 years | |||||
Minimum [Member] | Other Property and Equipment [Member] | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Useful life | 3 years | |||||
Maximum [Member] | ||||||
Accounting Policies [Line Items] | ||||||
Finite-Lived Intangible Asset, Useful Life | 20 years | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Finite-Lived Intangible Asset, Useful Life | 20 years | |||||
Maximum [Member] | Information Technology [Member] | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Useful life | 7 years | |||||
Maximum [Member] | Furniture and Fixtures [Member] | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Useful life | 15 years | |||||
Maximum [Member] | Leasehold Improvements and Furniture and Fixtures [Member] | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Useful life | 15 years | |||||
Maximum [Member] | Other Property and Equipment [Member] | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Useful life | 20 years | |||||
Common Class A | ||||||
Class of Stock [Line Items] | ||||||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | ||||
Common Stock, shares authorized | 150,000 | 150,000 | ||||
Common stock, shares outstanding | 52,985 | 62,399 | ||||
Common Class B [Member] | ||||||
Class of Stock [Line Items] | ||||||
Common stock, par value (in dollars per share) | $ 0.01 | |||||
Common Stock, shares authorized | [5] | 106,400 | 106,400 | |||
Accounting Standards Update 2016-02 [Member] | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Total assets | $ 1,200,000 | |||||
Total stockholders’ equity | $ 100,000 | |||||
[1] | (1) Primarily consists of amounts on deposit with financial institutions. | |||||
[2] | (2) Investments with original maturities of less than three months. | |||||
[3] | Restricted cash and equivalents primarily consists of amounts on deposit with banks that are used as collateral for customary non-debt banking commitments and deposits into trust accounts to conform to standard insurance security requirements. | |||||
[4] | Reflects the total number of shares related to outstanding share-based compensation awards that have been excluded from the computation of net income (loss) per diluted share because the impact would have been anti-dilutive. Unvested shares related to restricted stock units with performance-based and market-based vesting conditions can achieve up to 200% of their target vesting amount and are reflected at the maximum vesting amount less any dilutive portion. | |||||
[5] | (1) No shares were issued or outstanding as of each of January 29, 2022 and January 30, 2021 |
IMPACT OF COVID-19 (Details)
IMPACT OF COVID-19 (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 29, 2022 | Jan. 30, 2021 | Feb. 01, 2020 | |
Unusual or Infrequent Items, or Both [Abstract] | |||
Inventory Write-down | $ 14,800 | ||
Government Payroll Subsidies in response to COVID-19 | $ 5,600 | 18,100 | |
Accrued Rent, Current | 13,500 | 24,200 | |
RentAbatementsReceived | 17,900 | 30,700 | |
Withdrawal from Rabbi Trust Assets | 0 | 50,000 | $ 0 |
Liquidity | 1,100,000 | 1,300,000 | |
Proceeds from Short-term Debt | 0 | 210,000 | 0 |
Proceeds from Notes Payable | $ 0 | $ 350,000 | $ 0 |
REVENUE RECOGNITION (Details)
REVENUE RECOGNITION (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jan. 29, 2022 | Jan. 30, 2021 | |
Revenue Recognition [Abstract] | ||
Gift card liability | $ 36,984 | $ 28,561 |
Loyalty programs liability | 22,757 | 20,426 |
Revenue associated with gift card redemptions and gift card breakage | 80,088 | 58,400 |
Revenue associated with reward redemptions and breakage related to the Company’s loyalty programs | $ 45,417 | $ 37,042 |
FAIR VALUE (Schedule of Assets
FAIR VALUE (Schedule of Assets and Liabilities by Fair Value by Hierarchy) (Details) - USD ($) $ in Thousands | Jan. 29, 2022 | Jan. 30, 2021 | |
ASSETS: | |||
Time Deposits | [1] | $ 11,643 | $ 11,589 |
LIABILITIES: | |||
Money Market Funds, at Carrying Value | [1] | 49,309 | 296,279 |
Fair Value, Recurring [Member] | |||
ASSETS: | |||
Derivative financial instruments | [2] | 4,973 | 79 |
Restricted Investments, Noncurrent | [3] | 62,273 | 60,790 |
Total assets measured at fair value | 135,915 | 379,455 | |
LIABILITIES: | |||
Derivative instruments (2) | [2] | 4,694 | |
Cash and Cash Equivalents, Fair Value Disclosure | [4] | 60,952 | 307,868 |
Derivative Asset | [2] | 4,973 | 79 |
Restricted Investments, Noncurrent | [3] | 62,273 | 60,790 |
Restricted Cash Equivalents, Noncurrent | [4] | 7,717 | 10,718 |
Total assets measured at fair value | 135,915 | 379,455 | |
Derivative instruments (2) | [2] | 4,694 | |
Financial Liabilities Fair Value Disclosure | 4,694 | ||
Fair Value, Recurring [Member] | Level 1 [Member] | |||
ASSETS: | |||
Derivative financial instruments | [2] | 0 | 0 |
Restricted Investments, Noncurrent | [3] | 1 | 1 |
Total assets measured at fair value | 54,701 | 299,223 | |
LIABILITIES: | |||
Derivative instruments (2) | [2] | 0 | |
Cash and Cash Equivalents, Fair Value Disclosure | [4] | 49,309 | 296,279 |
Derivative Asset | [2] | 0 | 0 |
Restricted Investments, Noncurrent | [3] | 1 | 1 |
Restricted Cash Equivalents, Noncurrent | [4] | 5,391 | 2,943 |
Total assets measured at fair value | 54,701 | 299,223 | |
Derivative instruments (2) | [2] | 0 | |
Financial Liabilities Fair Value Disclosure | 0 | ||
Fair Value, Recurring [Member] | Level 2 [Member] | |||
ASSETS: | |||
Derivative financial instruments | [2] | 4,973 | 79 |
Restricted Investments, Noncurrent | [3] | 62,272 | 60,789 |
Total assets measured at fair value | 81,214 | 80,232 | |
LIABILITIES: | |||
Derivative instruments (2) | [2] | 4,694 | |
Cash and Cash Equivalents, Fair Value Disclosure | [4] | 11,643 | 11,589 |
Derivative Asset | [2] | 4,973 | 79 |
Restricted Investments, Noncurrent | [3] | 62,272 | 60,789 |
Restricted Cash Equivalents, Noncurrent | [4] | 2,326 | 7,775 |
Total assets measured at fair value | 81,214 | 80,232 | |
Derivative instruments (2) | [2] | 4,694 | |
Financial Liabilities Fair Value Disclosure | 4,694 | ||
Fair Value, Recurring [Member] | Level 3 [Member] | |||
ASSETS: | |||
Derivative financial instruments | [2] | 0 | 0 |
Restricted Investments, Noncurrent | [3] | 0 | 0 |
Total assets measured at fair value | 0 | 0 | |
LIABILITIES: | |||
Derivative instruments (2) | [2] | 0 | |
Cash and Cash Equivalents, Fair Value Disclosure | [4] | 0 | 0 |
Derivative Asset | [2] | 0 | 0 |
Restricted Investments, Noncurrent | [3] | 0 | 0 |
Restricted Cash Equivalents, Noncurrent | [4] | 0 | 0 |
Total assets measured at fair value | $ 0 | 0 | |
Derivative instruments (2) | [2] | 0 | |
Financial Liabilities Fair Value Disclosure | $ 0 | ||
[1] | (2) Investments with original maturities of less than three months. | ||
[2] | Level 2 assets and liabilities consisted primarily of foreign currency exchange forward contracts. | ||
[3] | Level 1 assets consisted of investments in money market funds. Level 2 assets consisted of trust-owned life insurance policies. | ||
[4] | Level 1 assets consisted of investments in money market funds and U.S. treasury bills. Level 2 assets consisted of time deposits. |
FAIR VALUE (Textual) (Details)
FAIR VALUE (Textual) (Details) - USD ($) $ in Thousands | Jan. 29, 2022 | Jan. 30, 2021 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Gross borrowings outstanding, carrying amount | $ 307,730 | $ 350,000 |
Gross borrowings outstanding, fair value | $ 327,732 | $ 389,813 |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) $ in Thousands | Jan. 29, 2022 | Jan. 30, 2021 | |
Inventory [Line Items] | |||
Inventories at original cost | $ 549,030 | $ 429,993 | |
Less: Lower of cost and net realizable value adjustment | (17,196) | (21,076) | |
Less: Shrink estimate | (5,970) | (4,864) | |
Inventories | [1] | 525,864 | 404,053 |
Inventory in Transit | $ 142,700 | $ 106,000 | |
[1] | Includes $142.7 million and $106.0 million of inventory in transit, merchandise owned by the Company that has not yet been received at a Company distribution center, as of January 29, 2022 and January 30, 2021, respectively. |
INVENTORIES Sourcing concentrat
INVENTORIES Sourcing concentration risk (Details) | 12 Months Ended | |||
Jan. 29, 2022 | Jan. 30, 2021 | Feb. 01, 2020 | ||
Concentration Risk [Line Items] | ||||
Percentage of Inventory Imported to U.S. from China | 9.00% | 7.00% | 15.00% | |
Vietnam [Domain] | ||||
Concentration Risk [Line Items] | ||||
Concentration Risk, Geographic | [1] | 36.00% | 41.00% | |
CAMBODIA | ||||
Concentration Risk [Line Items] | ||||
Concentration Risk, Geographic | [1] | 16.00% | 15.00% | |
CHINA | ||||
Concentration Risk [Line Items] | ||||
Concentration Risk, Geographic | [1],[2] | 14.00% | 12.00% | |
Other Locations [Member] | ||||
Concentration Risk [Line Items] | ||||
Concentration Risk, Geographic | [1],[3] | 34.00% | 32.00% | |
[1] | Calculated as the cost of merchandise receipts from all vendors within a country during the respective fiscal year divided by cost of total merchandise receipts during the respective fiscal year | |||
[2] | Only a portion of the Company’s total merchandise sourced from China is subject to the additional U.S. tariffs on imported consumer goods that were effective beginning in Fiscal 2019. The Company estimates approximately 9%, 7% and 15% of total merchandise receipts were directly imported to the U.S. from China in Fiscal 2021, Fiscal 2020 and Fiscal 2019, respectively. | |||
[3] | No country included within this category sourced more than 10% of total merchandise receipts during any fiscal year presented above |
PROPERTY AND EQUIPMENT, NET (De
PROPERTY AND EQUIPMENT, NET (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 29, 2022 | Jan. 30, 2021 | Feb. 01, 2020 | |
Property and equipment, net | |||
Land | $ 28,599 | $ 28,599 | |
Buildings | 233,523 | 230,104 | |
Furniture, fixtures and equipment | 622,912 | 608,210 | |
Information technology | 643,244 | 607,062 | |
Leasehold improvements | 913,729 | 990,238 | |
Construction in progress | 9,483 | 22,744 | |
Other | 2,003 | 2,000 | |
Total | 2,453,493 | 2,488,957 | |
Less: Accumulated depreciation and amortization | (1,945,157) | (1,938,370) | |
Property and equipment, net | 508,336 | 550,587 | |
Depreciation | 141,400 | 167,200 | $ 172,600 |
Depreciation, Depletion and Amortization, Nonproduction | $ 144,035 | $ 166,281 | $ 173,625 |
LEASES (Details)
LEASES (Details) - USD ($) $ in Thousands | 12 Months Ended | |||||||||
Jan. 29, 2022 | Jan. 30, 2021 | Feb. 01, 2020 | [4] | Feb. 02, 2019 | Oct. 30, 2021 | |||||
Leases [Abstract] | ||||||||||
Operating Lease, Weighted Average Remaining Lease Term | 5 years 3 months 18 days | 5 years 8 months 12 days | ||||||||
Lessee, Operating Lease, Liability, Payments, Due Year Two | $ 266,893 | |||||||||
LesseeOperatingLeaseLeasesNotYetCommencedLiability | $ 17,400 | |||||||||
Operating Lease, Cost | [1] | 272,246 | $ 346,178 | $ 427,982 | ||||||
Variable Lease, Cost | [2] | 110,889 | 65,310 | 143,472 | ||||||
Other Asset Impairment Charges | 9,509 | [3],[4] | 57,026 | [3],[4] | $ 15,812 | 15,812 | [3] | |||
Lease, Cost | 388,352 | $ 468,514 | 587,266 | |||||||
Fiscal 2024 | 215,464 | |||||||||
Fiscal 2025 | 152,282 | |||||||||
Fiscal 2026 | 131,972 | |||||||||
Fiscal 2026 | 106,873 | |||||||||
Fiscal 2027 and thereafter | 190,984 | |||||||||
Total undiscounted operating lease payments | 1,064,468 | |||||||||
Less: Imputed interest | (144,381) | |||||||||
Operating Lease, Liability | $ 920,087 | |||||||||
Operating Lease, Weighted Average Discount Rate, Percent | 5.60% | 5.60% | ||||||||
Sublease Income | $ (4,292) | $ 0 | $ 0 | |||||||
Rent Abatement Benefit to Variable Lease Cost | 14,100 | $ 30,100 | ||||||||
Operating Leases, Future Minimum Payments Due, Future Minimum Sublease Rentals | $ 24,000 | |||||||||
Operating Lease, Sublease, Weighted Average Remaining Lease Term | 5 years 9 months 18 days | |||||||||
[1] | Includes amortization and interest expense associated with operating lease right-of-use assets and the impact from remeasurement of operating lease liabilities. | |||||||||
[2] | Includes variable payments related to both lease and nonlease components, such as contingent rent payments made by the Company based on performance, and payments related to taxes, insurance, and maintenance costs, as well as $14.1 million and $30.1 million of rent abatements in Fiscal 2021 and Fiscal 2020, respectively, related to the effects of the COVID-19 pandemic that resulted in lease concessions with total payments required by the modified contract being substantially the same as or less than total payments required by the original contract. The total benefit related to rent abatements recognized during Fiscal 2021 and Fiscal 2020 was $17.9 million and $30.7 million respectively. | |||||||||
[3] | Refer to Note 9, “ ASSET IMPAIRMENT ,” for details related to operating lease right-of-use asset impairment charges. | |||||||||
[4] | Includes $3.2 million of operating lease right-of-use asset impairment included in flagship store exit charges on the Consolidated Statement of Operations and Comprehensive Income for Fiscal 2019. Refer to Note 19, “ FLAGSHIP STORE EXIT (BENEFITS) CHARGES .” |
Asset Impairment (Details)
Asset Impairment (Details) - USD ($) $ in Thousands | 12 Months Ended | |||||||
Jan. 29, 2022 | Jan. 30, 2021 | Feb. 01, 2020 | Feb. 02, 2019 | [1] | ||||
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value [Line Items] | ||||||||
Other Asset Impairment Charges | $ 9,509 | [1],[2] | $ 57,026 | [1],[2] | $ 15,812 | [2] | $ 15,812 | |
Tangible Asset Impairment Charges | 2,591 | 15,911 | 6,552 | |||||
Asset Impairment Charges | 12,100 | 72,937 | 22,364 | |||||
Operating Lease, Right-of-Use Asset | 698,231 | 893,989 | ||||||
Fair Value, Recurring [Member] | ||||||||
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value [Line Items] | ||||||||
Store Assets, including property and equipment and operating lease right-of-use assets | 18,100 | 95,000 | 103,400 | |||||
Operating Lease, Right-of-Use Asset | $ 15,600 | $ 87,200 | $ 99,200 | |||||
[1] | Refer to Note 9, “ ASSET IMPAIRMENT ,” for details related to operating lease right-of-use asset impairment charges. | |||||||
[2] | Includes $3.2 million of operating lease right-of-use asset impairment included in flagship store exit charges on the Consolidated Statement of Operations and Comprehensive Income for Fiscal 2019. Refer to Note 19, “ FLAGSHIP STORE EXIT (BENEFITS) CHARGES .” |
RABBI TRUST ASSETS (Schedule of
RABBI TRUST ASSETS (Schedule of Investments) (Details) - Rabbi Trust - USD ($) $ in Thousands | Jan. 29, 2022 | Jan. 30, 2021 |
Defined Benefit Plan, Plan Assets, Category [Line Items] | ||
Restricted Investments, Noncurrent | $ 62,273 | $ 60,790 |
Money market funds | ||
Defined Benefit Plan, Plan Assets, Category [Line Items] | ||
Restricted Investments, Noncurrent | 1 | 1 |
Trust-owned life insurance policies (at cash surrender value) | ||
Defined Benefit Plan, Plan Assets, Category [Line Items] | ||
Restricted Investments, Noncurrent | $ 62,272 | $ 60,789 |
RABBI TRUST ASSETS (Textual) (D
RABBI TRUST ASSETS (Textual) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 29, 2022 | Jan. 30, 2021 | Feb. 01, 2020 | |
Investments, Debt and Equity Securities [Abstract] | |||
Realized gains resulting from change in cash surrender value of insurance policies | $ 1,483 | $ 1,740 | $ 3,172 |
Withdrawal from Rabbi Trust Assets | $ 0 | $ 50,000 | $ 0 |
ACCRUED EXPENSES (Details)
ACCRUED EXPENSES (Details) - USD ($) $ in Thousands | Jan. 29, 2022 | Jan. 30, 2021 | |
Payables and Accruals [Abstract] | |||
Accrued payroll and related costs | [1] | $ 90,906 | $ 119,978 |
Distribution center and Digital operation Liabilities, Current | 48,395 | 56,135 | |
Other | [2] | 256,514 | 220,252 |
Accrued expenses | $ 395,815 | $ 396,365 | |
[1] | Accrued payroll and related costs include salaries, incentive compensation, benefits, withholdings and other payroll-related costs. | ||
[2] | Other primarily includes the Company’s gift card and loyalty programs liabilities, accrued taxes, accrued rent and expenses incurred but not yet paid primarily related to outside services associated with store and home office operations and construction in progress. Refer to Note 4, “ REVENUE RECOGNITION .” |
Income Taxes (Textual) (Details
Income Taxes (Textual) (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||
Feb. 01, 2020 | Nov. 02, 2019 | Jan. 29, 2022 | Jan. 30, 2021 | Feb. 01, 2020 | |
Valuation Allowance [Line Items] | |||||
Valuation Allowance, Deferred Tax Asset, Increase (Decrease), Amount | $ 42,500,000 | $ (61,900,000) | |||
Unrecognized Tax Benefits that Would Impact Effective Tax Rate | 4,600,000 | $ 39,500,000 | |||
Income Tax Expense Benefit Continuing Operations Discrete Items | 101,400,000 | ||||
Income (Loss) from Continuing Operations before Income Taxes, Noncontrolling Interest | 5,600,000 | ||||
Income Tax Expense (Benefit), Continuing Operations, Adjustment of Deferred Tax (Asset) Liability | $ 3,900,000 | ||||
Effective Income Tax Rate Reconciliation, Percent | 12.60% | (123.50%) | 27.90% | ||
Effective Income Tax Rate Reconciliation, Percent | 12.60% | (123.50%) | 27.90% | ||
Income Tax Expense Benefit Continuing Operations Discrete Items | $ 101,400,000 | ||||
Pre-tax Losses Without Tax Benefits Recognized [Line Items] | 25,300,000 | $ 203,400,000 | |||
Income Tax Expense (Benefit), Continuing Operations, Adjustment of Deferred Tax (Asset) Liability | 3,900,000 | ||||
Tax expense related to correction of errors | 38,908,000 | 60,211,000 | $ 17,371,000 | ||
Valuation Allowance, Deferred Tax Asset, Increase (Decrease), Amount | (42,500,000) | 61,900,000 | |||
Unrecognized Tax Benefits that Would Impact Effective Tax Rate | 4,600,000 | $ 39,500,000 | |||
SWITZERLAND | |||||
Valuation Allowance [Line Items] | |||||
Valuation Allowance, Deferred Tax Asset, Increase (Decrease), Amount | $ 13,100,000 | $ (38,000,000) | (24,900,000) | ||
Income Tax Expense (Benefit), Continuing Operations, Adjustment of Deferred Tax (Asset) Liability | 2,900,000 | ||||
Income Tax Expense (Benefit), Continuing Operations, Adjustment of Deferred Tax (Asset) Liability | 2,900,000 | ||||
Valuation Allowance, Deferred Tax Asset, Increase (Decrease), Amount | $ (13,100,000) | $ 38,000,000 | $ 24,900,000 | ||
JAPAN | |||||
Valuation Allowance [Line Items] | |||||
Income (Loss) from Subsidiaries, Net of Tax | $ 12,000,000 | ||||
Effective Income Tax Rate Reconciliation, Percent | 35.10% | ||||
Effective Income Tax Rate Reconciliation, Percent | 35.10% |
INCOME TAXES (Earnings from Con
INCOME TAXES (Earnings from Continuing Operations before taxes) (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Jan. 29, 2022 | Jan. 30, 2021 | Feb. 01, 2020 | ||
Income Tax Disclosure [Abstract] | ||||
Domestic (1) | [1] | $ 283,793 | $ (33,417) | $ 17,590 |
Foreign | 25,181 | (15,326) | 44,741 | |
Income (loss) before income taxes | $ 308,974 | $ (48,743) | $ 62,331 | |
[1] | Includes intercompany charges to foreign affiliates for management fees, cost-sharing, royalties and interest and excludes a portion of foreign income that is currently includable on the U.S. federal income tax return. |
INCOME TAXES (Provisions for In
INCOME TAXES (Provisions for Income Taxes from Continuing Operations) (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Jan. 29, 2022 | Jan. 30, 2021 | Feb. 01, 2020 | ||
Current: | ||||
Federal | $ 51,321 | $ 9,434 | $ (2,193) | |
State | 14,061 | 3,751 | 1,893 | |
Foreign | 5,448 | 23,041 | 8,521 | |
Total current income tax | 70,830 | 36,226 | 8,221 | |
Deferred: | ||||
Federal (1) | [1] | (15,401) | (73,104) | 29,012 |
State | (8,995) | 8,828 | (107) | |
Foreign (1) | [1] | (7,526) | 88,261 | (19,755) |
Total deferred income tax | (31,922) | 23,985 | 9,150 | |
Income tax expense | $ 38,908 | $ 60,211 | $ 17,371 | |
[1] | Fiscal 2020 includes federal deferred tax benefit of $79.0 million and foreign deferred tax expense of $88.6 million due to the establishment of an additional valuation allowance in Switzerland. Fiscal 2019 federal deferred tax expense included charges of $24.9 million and foreign deferred tax expense included benefits of $24.9 million as a result of Swiss Tax Reform. |
INCOME TAXES (Reconciliation of
INCOME TAXES (Reconciliation of Federal Income Tax Rate) (Details) | 12 Months Ended | |||
Jan. 29, 2022 | Jan. 30, 2021 | Feb. 01, 2020 | ||
Income Tax Disclosure [Abstract] | ||||
U.S. federal corporate income tax rate | 21.00% | 21.00% | 21.00% | |
Audit and other adjustments to prior years’ accruals, net | 4.70% | 2.60% | 0.80% | |
State income tax, net of U.S. federal income tax effect | 4.40% | 2.60% | 1.90% | |
Foreign taxation of non-U.S. operations (1) | [1] | 3.50% | 32.70% | 5.50% |
Internal Revenue Code Section 162(m) | 1.60% | (5.50%) | 2.20% | |
Additional U.S. taxation of non-U.S. operations | 0.60% | (0.20%) | (1.40%) | |
Permanent items | 0.20% | 0.00% | 0.30% | |
Net change in valuation allowances | (19.70%) | (177.20%) | 8.20% | |
Tax (benefit) expense recognized on share-based compensation (2) | [2] | (1.30%) | (7.50%) | (0.90%) |
Other statutory tax rate and law changes | (1.20%) | 2.30% | (0.90%) | |
Credit for increasing research activities | (0.60%) | 2.60% | (3.60%) | |
Net income attributable to noncontrolling interests | (0.50%) | 2.20% | (1.90%) | |
Trust-owned life insurance policies (at cash surrender value) | (0.10%) | 0.70% | (1.10%) | |
Credit items | 0.00% | 0.20% | (0.80%) | |
Write-off of stock basis in subsidiary | 0.00% | 0.00% | 3.20% | |
Statutory tax rate and law changes due to Swiss Tax Reform | 0.00% | 0.00% | (4.60%) | |
Total | 12.60% | (123.50%) | 27.90% | |
[1] | U.S. branch operations in Canada and Puerto Rico were subject to tax at the full U.S. tax rates. As a result, income from these operations do not create reconciling items. Effective in 2019, only Puerto Rico continues to be a branch of the U.S. | |||
[2] | Refer to Note 14, “ SHARE-BASED COMPENSATION ,” for details on discrete income tax benefits and charges related to share-based compensation awards during Fiscal 2021, Fiscal 2020, and Fiscal 2019. |
INCOME TAXES (Deferred Income T
INCOME TAXES (Deferred Income Tax Assets (Liabilities)) (Details) - USD ($) $ in Thousands | Jan. 29, 2022 | Jan. 30, 2021 | |
Deferred income tax assets: | |||
Operating lease liabilities | $ 242,290 | $ 311,286 | |
Intangibles, foreign step-up in basis (1) | [1] | 64,281 | 81,357 |
Net operating losses (NOL), tax credit and other carryforwards | 52,970 | 56,341 | |
Accrued expenses and reserves | 30,026 | 32,649 | |
Deferred compensation | 16,050 | 16,294 | |
Inventory | 3,578 | 0 | |
Rent | 0 | 530 | |
Other | 45 | 2,171 | |
Valuation allowances | (110,057) | (174,302) | |
Total deferred income tax assets | 299,183 | 326,326 | |
Deferred income tax liabilities: | |||
Operating lease right-of-use assets | (202,916) | (253,417) | |
Property and equipment and intangibles | (10,150) | (15,328) | |
Prepaid expenses | (2,451) | (387) | |
Store supplies | (1,811) | (2,042) | |
Undistributed profits of non-U.S. subsidiaries | (1,082) | (318) | |
Rent | (360) | 0 | |
Inventory | 0 | (1,499) | |
U.S. offset to foreign deferred tax assets, excluding intangibles, foreign step-up in basis (2) | [2] | 0 | (183) |
Other | (30) | (3,499) | |
Total deferred income tax liabilities | (218,800) | (276,673) | |
Net deferred income tax assets (2) | $ 80,383 | $ 49,653 | |
[1] | The deferred tax asset relates to a step-up in basis associated with the intra-entity transfer of intangible assets to Switzerland which are being amortized for Swiss local tax purposes. As this subsidiary’s income is also taxable in the U.S., a corresponding U.S. deferred tax liability was recognized to reflect lower resulting foreign tax credit due to the amortization of the Swiss step-up in basis. Included in the liability section is the remaining portion of deferred tax liabilities which are properly categorized in the table above. In Fiscal 2020, a full valuation allowance was established in Switzerland and the corresponding US deferred tax liability was released. During Fiscal 2021 an agreement was reached with the Swiss taxing authorities to decrease the basis step up to be amortized in the future thus decreasing the deferred asset by $14.8 million. Because of the valuation allowance, there is no impact on consolidated tax expense for this agreement. | ||
[2] | During Fiscal 2021 an agreement was reached with the Swiss taxing authorities to decrease the basis step up to be amortized in the future thus decreasing the deferred asset by $14.8 million. Because of the valuation allowance, there is no impact on consolidated tax expense for this agreement. (2) This table does not reflect deferred taxes classified within AOCL. As of January 29, 2022 and January 30, 2021, AOCL included deferred tax liabilities of $1.1 million and deferred tax assets of $0.9 million, respectively. |
INCOME TAXES (Roll Forward of U
INCOME TAXES (Roll Forward of Uncertain Tax Positions) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 29, 2022 | Jan. 30, 2021 | Feb. 01, 2020 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||
Uncertain tax positions, beginning of the year | $ 995 | $ 1,794 | $ 478 |
Gross addition for tax positions of the current year | 490 | 235 | 131 |
Gross (reduction) addition for tax positions of prior years | (136) | (395) | (1,349) |
Reductions of tax positions of prior years for: | |||
Lapses of applicable statutes of limitations | (81) | (48) | (151) |
Settlements during the period | (154) | (1,381) | (13) |
Uncertain tax positions, end of year | $ 1,114 | $ 995 | $ 1,794 |
INCOME TAXES (Deferred Tax Asse
INCOME TAXES (Deferred Tax Assets, Net operating losses (NOL) and credit carryforwards) (Details) - USD ($) $ in Thousands | Jan. 29, 2022 | Jan. 30, 2021 |
Tax Credit Carryforward [Line Items] | ||
Deferred Tax Liabilities, Undistributed Foreign Earnings | $ 1,082 | $ 318 |
Deferred Tax Assets, Valuation Allowance | 110,057 | $ 174,302 |
Foreign Tax Authority [Member] | ||
Tax Credit Carryforward [Line Items] | ||
Deferred Tax Assets, Operating Loss and Tax Credit Carryforwards | 52,500 | |
State and Local Jurisdiction [Member] | ||
Tax Credit Carryforward [Line Items] | ||
Deferred Tax Assets, Operating Loss and Tax Credit Carryforwards | $ 400 |
BORROWINGS (Details)
BORROWINGS (Details) - USD ($) | 6 Months Ended | 12 Months Ended | ||
Jul. 31, 2021 | Jan. 29, 2022 | Jan. 30, 2021 | Feb. 01, 2020 | |
Long-Term Borrowings [Line Items] | ||||
Maximum borrowing capacity | $ 400,000,000 | |||
Line of Credit Facility, Remaining Borrowing Capacity | 278,300,000 | |||
Deferred financing fees | $ 600,000 | |||
Borrowings, gross at carrying amount | 307,730,000 | $ 350,000,000 | ||
Long-term portion of borrowings, net | 303,574,000 | 343,910,000 | ||
Schedule of Future Payments of the Term Loan Facility | ||||
Letters of Credit Outstanding, Amount | $ (800,000) | |||
Long-term Debt, Percentage Bearing Fixed Interest, Percentage Rate | 8.75% | |||
Proceeds from Notes Payable | $ 0 | 350,000,000 | $ 0 | |
Debt Instrument, Repurchased Face Amount | 42,300,000 | |||
Gain (Loss) on Extinguishment of Debt | 5,300,000 | 5,347,000 | 0 | 0 |
Repayments of Notes Payable | 46,969,000 | 0 | 0 | |
Repayments of Lines of Credit | $ 0 | 233,250,000 | $ 20,000,000 | |
Debt Instrument, Unamortized Premium | $ 4,700,000 | |||
Payment for Debt Extinguishment or Debt Prepayment Cost | 233,600,000 | |||
Long-term Debt, Percentage Bearing Fixed Interest, Percentage Rate | 8.75% | |||
London Interbank Offered Rate (LIBOR) Minimum ABL Facility [Domain] | ||||
Long-Term Borrowings [Line Items] | ||||
Basis spread on variable rate | 1.25% | |||
London Interbank Offered Rate (LIBOR) Maximum ABL Facility [Domain] | ||||
Long-Term Borrowings [Line Items] | ||||
Basis spread on variable rate | 1.50% | |||
London Interbank Offered Rate (LIBOR) Initial Applicable Margin ABL Facility [Domain] | ||||
Long-Term Borrowings [Line Items] | ||||
Basis spread on variable rate | 1.25% | |||
Base Rate Initial Applicable Margin ABL Facility [Domain] | ||||
Long-Term Borrowings [Line Items] | ||||
Basis spread on variable rate | 0.25% | |||
Term Loan Facility [Member] [Domain] | ||||
Long-Term Borrowings [Line Items] | ||||
Borrowings, gross at carrying amount | 350,000,000 | |||
Unamortized fees paid to lenders | (6,090,000) | |||
Borrowings, net | $ 343,910,000 | |||
ABL Facility [Member] [Domain] | ||||
Long-Term Borrowings [Line Items] | ||||
Maturity date | Apr. 29, 2026 | |||
ABL Facility, unused capacity, commitment fee percentage | 0.25% | |||
Schedule of Future Payments of the Term Loan Facility | ||||
Line of Credit Facility, Current Borrowing Capacity | $ 248,300,000 | |||
Repayments of Lines of Credit | $ 110,800,000 | |||
Line of Credit Facility, Current Borrowing Capacity | 248,300,000 | |||
Amended and Restated Credit Agreement [Member] | ||||
Long-Term Borrowings [Line Items] | ||||
Credit facility, amount outstanding | 0 | $ 0 | ||
Senior Notes | ||||
Long-Term Borrowings [Line Items] | ||||
Borrowings, gross at carrying amount | 307,730,000 | |||
Unamortized discount | $ (4,156,000) | |||
Base Rate Minimum ABL Facility | ||||
Long-Term Borrowings [Line Items] | ||||
Basis spread on variable rate | 0.25% | |||
Base Rate Minimum ABL Facility | ABL Facility [Member] [Domain] | ||||
Long-Term Borrowings [Line Items] | ||||
ABL Facility, unused capacity, commitment fee percentage | 0.25% | |||
Base Rate Maximum ABL Facility | ||||
Long-Term Borrowings [Line Items] | ||||
Basis spread on variable rate | 0.50% | |||
Base Rate Maximum ABL Facility | ABL Facility [Member] [Domain] | ||||
Long-Term Borrowings [Line Items] | ||||
ABL Facility, unused capacity, commitment fee percentage | 0.375% |
SHARE-BASED COMPENSATION (Textu
SHARE-BASED COMPENSATION (Textual) (Details) shares in Thousands | 12 Months Ended | |||
Jan. 29, 2022USD ($)share_based_compensation_planshares | Jan. 30, 2021USD ($) | Feb. 01, 2020USD ($) | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based Issued, Value, Share-based Payment Arrangement, after Forfeiture | [1] | $ 13,163,000 | $ 5,694,000 | $ 6,804,000 |
Share-based Payment Arrangement, Exercise of Option, Tax Benefit | 4,198,000 | (1,719,000) | 1,156,000 | |
Share-based compensation expense | 29,304,000 | 18,682,000 | 14,007,000 | |
Tax benefits related to share-based compensation | $ 3,338,000 | 0 | 2,649,000 | |
Number of primary share based compensation plans | share_based_compensation_plan | 2 | |||
Number of other share based compensation plans | share_based_compensation_plan | 4 | |||
Share-based Payment Arrangement, Cancellation of Option, Tax Charge | $ (204,000) | (1,943,000) | (611,000) | |
Share-based Payment Arrangement, Discrete Income Tax Benefit (Charge) | 3,994,000 | (3,662,000) | 545,000 | |
LTIP Directors 2016 [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Market Value Authorized | $ 300,000 | |||
Maximum number of shares approved for grant | shares | 900 | |||
Non-Executive Chairman [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Market Value Authorized | $ 500,000 | |||
Non Associate Director [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Market Value Authorized | $ 2,500,000 | |||
LTIP Associates 2016 [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Maximum number of shares approved for grant | shares | 10,350 | |||
Stock Appreciation Rights (SARs) [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Grant date fair value of award other than options vested during period | 1,069,000 | 626,000 | ||
Service-based Restricted Stock Unit (RSUs) [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total unrecognized compensation cost, net of estimated forfeitures | $ 28,333,000 | |||
Unrecognized compensation cost, weighted-average period of recognition | 1 year 2 months 12 days | |||
Grant date fair value of award other than options vested during period | $ 13,360,000 | 14,083,000 | 13,630,000 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Aggregate Intrinsic Value, Vested | 36,507,000 | 8,147,000 | 18,596,000 | |
Total fair value of restricted stocks | 23,959,000 | 19,843,000 | 16,175,000 | |
Performance-based Restricted Stock Units (RSUs) [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Grant date fair value of award other than options vested during period | 0 | 4,635,000 | 0 | |
Total fair value of restricted stocks | 5,059,000 | 0 | 5,391,000 | |
Market-based Restricted Stock Units (RSUs) [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total unrecognized compensation cost, net of estimated forfeitures | $ 14,173,000 | |||
Unrecognized compensation cost, weighted-average period of recognition | 9 months 18 days | |||
Grant date fair value of award other than options vested during period | $ 3,390,000 | 4,132,000 | 511,000 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Aggregate Intrinsic Value, Vested | 3,335,000 | 3,263,000 | 181,000 | |
Total fair value of restricted stocks | $ 3,966,000 | $ 8,443,000 | $ 4,176,000 | |
[1] | (1) Classified within other financing activities on the Consolidated Statements of Cash Flows. |
SHARE-BASED COMPENSATION (SARs
SHARE-BASED COMPENSATION (SARs Assumptions) (Details) | 12 Months Ended |
Jan. 29, 2022$ / shares | |
Stock Appreciation Rights (SARs) [Member] | |
The weighted-average fair value and assumptions (stock appreciation rights) | |
Fair value (in dollars per share) | $ 0 |
SHARE-BASED COMPENSATION (SAR_2
SHARE-BASED COMPENSATION (SARS Activity) (Details) - Stock Appreciation Rights (SARs) [Member] - USD ($) | 12 Months Ended | |
Jan. 29, 2022 | Jan. 30, 2021 | |
Number of Underlying Shares Outstanding [Roll Forward] | ||
Number of Underlying Shares, Outstanding (in shares) | 236,139 | 384,757 |
Number of Underlying Shares, Granted (in shares) | 0 | |
Number of Underlying Shares, Exercised (in shares) | (111,868) | |
Number of Underlying Shares, Forfeited or expired (in shares) | (36,750) | |
Weighted-Average Exercise Price [Roll Forward] | ||
Weighted-Average Exercise Price, Outstanding (in dollars per share) | $ 32.55 | $ 33.04 |
Weighted-Average Grant Date Fair Value, Granted (in dollars per share) | 0 | |
Weighted-Average Exercise Price, Exercised (in dollars per share) | 26.95 | |
Weighted-Average Exercise Price, Forfeited or exercised (in dollars per share) | $ 54.73 | |
Aggregate Intrinsic Value, Outstanding | $ 1,276,809 | |
Weighted-Average Remaining Contractual Life, Outstanding | 2 years 3 months 18 days | |
Number of Underlying Shares, Stock appreciation rights exercisable (in shares) | 236,139 | |
Weighted-Average Exercise Price, Stock appreciation rights exercisable (in dollars per share) | $ 32.55 | |
Aggregate Intrinsic Value, Stock appreciation rights exercisable | $ 1,276,809 | |
Weighted- Average Remaining Contractual Life, Stock appreciation rights exercisable | 2 years 3 months 18 days |
SHARE-BASED COMPENSATION (Restr
SHARE-BASED COMPENSATION (Restricted Stock Unit Activity) (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |||
Jan. 29, 2022 | Jan. 30, 2021 | Feb. 01, 2020 | ||
Weighted-Average Grant Date Fair Value [Roll Forward] | ||||
Target percentage of equity awards earned | 100.00% | |||
Service-based restricted stock units [Member] | ||||
Weighted-Average Grant Date Fair Value [Roll Forward] | ||||
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount | $ 0 | |||
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition | 0 years | |||
Market-based Restricted Stock Units (RSUs) [Member] | ||||
Number of Underlying Shares Outstanding [Roll Forward] | ||||
Number of Underlying Shares, Outstanding, Ending Balance (in shares) | 680,184 | [1] | 721,879 | |
Number of Underlying Shares, Granted (in shares) | 78,827 | |||
Number of Underlying Shares, Change due to performance criteria achievement (in shares) | (6,084) | |||
Number of Underlying Shares, Vested (in shares) | (100,634) | |||
Number of Underlying Shares, Forfeited (in shares) | (13,804) | |||
Weighted-Average Grant Date Fair Value [Roll Forward] | ||||
Weighted-Average Grant Date Fair Value, Granted (in dollars per share) | $ 50.31 | |||
Weighted-Average Grant Date Fair Value, Change due to performance achievement criteria (in dollars per share) | 33.69 | |||
Weighted-Average Grant Date Fair Value, Vested (in dollars per share) | 33.69 | |||
Weighted-Average Grant Date Fair Value, Forfeited (in dollars per share) | 25.13 | |||
Weighted-Average Grant Date Fair Value, Unvested, Outstanding (in dollars per share) | $ 22.81 | $ 21.46 | ||
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount | $ 14,173 | |||
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition | 9 months 18 days | |||
Service-based Restricted Stock Unit (RSUs) [Member] | ||||
Number of Underlying Shares Outstanding [Roll Forward] | ||||
Number of Underlying Shares, Outstanding, Ending Balance (in shares) | 2,532,240 | 3,037,098 | ||
Number of Underlying Shares, Granted (in shares) | 730,446 | |||
Number of Underlying Shares, Change due to performance criteria achievement (in shares) | 0 | |||
Number of Underlying Shares, Vested (in shares) | (1,089,706) | |||
Number of Underlying Shares, Forfeited (in shares) | (145,598) | |||
Weighted-Average Grant Date Fair Value [Roll Forward] | ||||
Weighted-Average Grant Date Fair Value, Granted (in dollars per share) | $ 32.80 | |||
Weighted-Average Grant Date Fair Value, Change due to performance achievement criteria (in dollars per share) | 0 | |||
Weighted-Average Grant Date Fair Value, Vested (in dollars per share) | 12.26 | |||
Weighted-Average Grant Date Fair Value, Forfeited (in dollars per share) | 16.67 | |||
Weighted-Average Grant Date Fair Value, Unvested, Outstanding (in dollars per share) | $ 17.16 | $ 11.62 | ||
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount | $ 28,333 | |||
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition | 1 year 2 months 12 days | |||
Performance-based Restricted Stock Units (RSUs) [Member] | ||||
Number of Underlying Shares Outstanding [Roll Forward] | ||||
Number of Underlying Shares, Outstanding, Ending Balance (in shares) | 340,149 | [1] | 297,216 | |
Number of Underlying Shares, Granted (in shares) | 157,645 | |||
Number of Underlying Shares, Change due to performance criteria achievement (in shares) | (106,715) | |||
Number of Underlying Shares, Vested (in shares) | 0 | |||
Number of Underlying Shares, Forfeited (in shares) | (7,997) | |||
Weighted-Average Grant Date Fair Value [Roll Forward] | ||||
Weighted-Average Grant Date Fair Value, Granted (in dollars per share) | $ 32.09 | |||
Weighted-Average Grant Date Fair Value, Change due to performance achievement criteria (in dollars per share) | 29.92 | |||
Weighted-Average Grant Date Fair Value, Vested (in dollars per share) | 0 | |||
Weighted-Average Grant Date Fair Value, Forfeited (in dollars per share) | 29.92 | |||
Weighted-Average Grant Date Fair Value, Unvested, Outstanding (in dollars per share) | 27.08 | $ 22.43 | ||
Market Vesting Conditions [Member] | Market-based Restricted Stock Units (RSUs) [Member] | ||||
Weighted-Average Grant Date Fair Value [Roll Forward] | ||||
Weighted-Average Grant Date Fair Value, Granted (in dollars per share) | $ 49.81 | $ 16.24 | $ 36.24 | |
[1] | Unvested shares related to restricted stock units with performance-based and market-based vesting conditions are reflected at 100% of their target vesting amount in the table above. Unvested shares related to restricted stock units with performance-based and market-based vesting conditions can be achieved at up to 200% of their target vesting amount. |
SHARE-BASED COMPENSATION (RSUs
SHARE-BASED COMPENSATION (RSUs Assumptions) (Details) - Market-based Restricted Stock Units (RSUs) [Member] - $ / shares | 12 Months Ended | ||
Jan. 29, 2022 | Jan. 30, 2021 | Feb. 01, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Fair value (in dollars per share) | $ 50.31 | ||
Market Vesting Conditions [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Grant date market price (in dollars per share) | 31.78 | $ 12.31 | $ 25.34 |
Fair value (in dollars per share) | $ 49.81 | $ 16.24 | $ 36.24 |
Price volatility | 66.00% | 67.00% | 57.00% |
Expected term (years) | 2 years 10 months 24 days | 2 years 4 months 24 days | 2 years 10 months 24 days |
Risk-free interest rate | 0.30% | 0.20% | 2.20% |
Dividend yield | 0.00% | 0.00% | 3.20% |
Average volatility of peer companies | 72.00% | 66.00% | 40.00% |
Average correlation coefficient of peer companies | 0.4694 | 0.4967 | 0.2407 |
DERIVATIVE INSTRUMENTS (Textual
DERIVATIVE INSTRUMENTS (Textual) (Details) $ in Millions | 12 Months Ended |
Jan. 29, 2022USD ($) | |
Derivatives (Textuals) [Abstract] | |
Derivative Instruments Not Designated as Hedging Instruments, Gain | $ 12.6 |
DERIVATIVE INSTRUMENTS (Outstan
DERIVATIVE INSTRUMENTS (Outstanding Foreign Exchange Forward Contracts) (Details) - Inter-company Inventory and Accounts Receivables [Member] - Cash Flow Hedging [Member] - Forward Contracts [Member] $ in Thousands | Jan. 29, 2022USD ($) | |
Euro Member Countries, Euro | ||
Derivative [Line Items] | ||
Derivative, Notional Amount | $ 60,962 | [1] |
Japan, Yen | ||
Derivative [Line Items] | ||
Derivative, Notional Amount | 4,471 | |
British Pound [Member] | ||
Derivative [Line Items] | ||
Derivative, Notional Amount | 32,044 | [1] |
Canadian Dollar [Member] | ||
Derivative [Line Items] | ||
Derivative, Notional Amount | $ 10,026 | [1] |
[1] | Amounts reported are the U.S. Dollar notional amounts outstanding as of January 29, 2022. |
DERIVATIVE INSTRUMENTS (Locatio
DERIVATIVE INSTRUMENTS (Location and Amounts of Derivative Fair Values - Statements of Operations and Comprehensive Income) (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Jan. 29, 2022 | Jan. 30, 2021 | Feb. 01, 2020 | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Foreign Currency Cash Flow Hedge Asset at Fair Value | $ 4,973 | $ 79 | ||
Gain/(Loss) | 1,205 | 742 | $ (298) | |
Amount of (Loss) Gain Recognized in OCI on Derivative Contracts (Effective Portion) | [1] | 11,987 | 7,619 | 7,495 |
Amount of (Loss) Gain Reclassified from AOCL into Earnings (Effective Portion) | [2] | 1,263 | 13,235 | $ 9,160 |
Foreign Currency Cash Flow Hedge Liability at Fair Value | 0 | 4,694 | ||
Derivative Instruments Not Designated as Hedging Instruments, Gain | 12,600 | |||
Fair Value, Recurring [Member] | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Derivative Asset | [3] | 4,973 | 79 | |
Derivative Liability | [3] | 4,694 | ||
Fair Value, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Derivative Asset | [3] | $ 4,973 | 79 | |
Derivative Liability | [3] | $ 4,694 | ||
[1] | Amount represents the change in fair value of derivative instruments. As a result of COVID-19 in Fiscal 2020, there was a significant change in the expected timing of previously hedged intercompany sales transactions, resulting in a dedesignation of the related hedge instruments. At the time of dedesignation of these hedges, they were in a net gain position of approximately $12.6 million. Due to the extenuating circumstances leading to dedesignation, gains associated with these hedges at the time of dedesignation were deferred in AOCL until being reclassified into cost of goods sold, exclusive of depreciation and amortization when the originally forecasted transactions occurred and the hedged items affected earnings. During Fiscal 2020 and subsequent to the dedesignation of these hedges, these hedge contracts were settled. | |||
[2] | Amount represents gain reclassified from AOCL to cost of sales, exclusive of depreciation and amortization, on the Consolidated Statements of Operations and Comprehensive Income (Loss) when the hedged item affected earnings, which was when merchandise was converted to cost of sales, exclusive of depreciation and amortization. | |||
[3] | Level 2 assets and liabilities consisted primarily of foreign currency exchange forward contracts. |
ACCUMULATED OTHER COMPREHENSI_3
ACCUMULATED OTHER COMPREHENSIVE LOSS (Details) - USD ($) $ in Thousands | 12 Months Ended | |||||
Jan. 29, 2022 | Jan. 30, 2021 | Feb. 01, 2020 | ||||
Accumulated Other Comprehensive (Loss) Income [Roll Forward] | ||||||
Beginning balance | $ (102,307) | $ (108,886) | $ (102,452) | |||
Other comprehensive (loss) income before reclassifications | (10,930) | 19,814 | 2,415 | |||
Reclassification from Accumulated Other Comprehensive Income, Current Period, before Tax | (1,263) | [1] | (13,235) | [2] | (9,160) | [3] |
Other Comprehensive Income (Loss), Derivatives Qualifying as Hedges, Tax | (206) | 0 | 311 | |||
Other comprehensive (loss) income | (12,399) | 6,579 | (6,434) | |||
Ending balance | (114,706) | (102,307) | (108,886) | |||
Derivative Financial Instruments | ||||||
Accumulated Other Comprehensive (Loss) Income [Roll Forward] | ||||||
Beginning balance | (4,535) | 1,081 | 2,435 | |||
Other comprehensive (loss) income before reclassifications | 11,987 | 7,619 | 7,495 | |||
Reclassification from Accumulated Other Comprehensive Income, Current Period, before Tax | (1,263) | [1] | (13,235) | [2] | (9,160) | [3] |
Other Comprehensive Income (Loss), Derivatives Qualifying as Hedges, Tax | 0 | 0 | 311 | |||
Other comprehensive (loss) income | 10,518 | (5,616) | (1,354) | |||
Ending balance | 5,983 | (4,535) | 1,081 | |||
Foreign Currency Translation | ||||||
Accumulated Other Comprehensive (Loss) Income [Roll Forward] | ||||||
Beginning balance | (97,772) | (109,967) | (104,887) | |||
Other comprehensive (loss) income before reclassifications | (22,917) | 12,195 | (5,080) | |||
Reclassification from Accumulated Other Comprehensive Income, Current Period, before Tax | 0 | [1] | 0 | [2] | 0 | [3] |
Other Comprehensive Income (Loss), Derivatives Qualifying as Hedges, Tax | (206) | 0 | 0 | |||
Other comprehensive (loss) income | (22,917) | 12,195 | (5,080) | |||
Ending balance | $ (120,689) | $ (97,772) | $ (109,967) | |||
[1] | Amount represents gain reclassified from AOCL to cost of sales, exclusive of depreciation and amortization, on the Consolidated Statements of Operations and Comprehensive (Loss) Income. | |||||
[2] | Amount represents gain reclassified from AOCL to cost of sales, exclusive of depreciation and amortization, on the Consolidated Statements of Operations and Comprehensive Income (Loss). (2) No income tax benefit was recognized during Fiscal 2020 due to the establishment of a valuation allowance. | |||||
[3] | Amount represents gain reclassified from AOCL to cost of sales, exclusive of depreciation and amortization, on the Consolidated Statements of Operations and Comprehensive Income (Loss). |
SAVINGS AND RETIREMENT PLANS (D
SAVINGS AND RETIREMENT PLANS (Details) $ in Millions | 12 Months Ended | ||
Jan. 29, 2022USD ($)yr | Jan. 30, 2021USD ($) | Feb. 01, 2020USD ($) | |
Defined Benefit Plan Disclosure [Line Items] | |||
SERP Liability | $ 8.4 | $ 9.2 | |
Supplemental Employee Retirement Plan [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Retirement benefits, participant age requirement | yr | 21 | ||
Defined Benefit Plan, Plan Assets, Contributions by Employer | $ 15.4 | $ 14.1 | $ 14.8 |
SEGMENT REPORTING (Segment Info
SEGMENT REPORTING (Segment Information, by Segment) (Details) $ in Thousands | 12 Months Ended | ||
Jan. 29, 2022USD ($) | Jan. 30, 2021USD ($) | Feb. 01, 2020USD ($) | |
Segment Reporting Information [Line Items] | |||
Net sales | $ 3,712,768 | $ 3,125,384 | $ 3,623,073 |
Number of reportable segments | 1 |
SEGMENT REPORTING (Net Sales an
SEGMENT REPORTING (Net Sales and Long-lived Assets) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 29, 2022 | Jan. 30, 2021 | Feb. 01, 2020 | |
Net Sales | $ 3,712,768 | $ 3,125,384 | $ 3,623,073 |
United States | |||
Net Sales | 2,652,158 | 2,127,403 | 2,410,802 |
EMEA | |||
Net Sales | 755,072 | 709,451 | 822,202 |
Asia Pacific | |||
Net Sales | 171,701 | 176,636 | 264,895 |
Other Locations [Member] | |||
Net Sales | 133,837 | 111,894 | 125,174 |
International [Member] | |||
Net Sales | $ 1,060,610 | $ 997,981 | $ 1,212,271 |
SEGMENT REPORTING (Net Sales by
SEGMENT REPORTING (Net Sales by Brand) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 29, 2022 | Jan. 30, 2021 | Feb. 01, 2020 | |
Schedule of Revenue by Brand [Line Items] | |||
Net Sales | $ 3,712,768 | $ 3,125,384 | $ 3,623,073 |
Abercrombie [Member] | |||
Schedule of Revenue by Brand [Line Items] | |||
Net Sales | 1,564,789 | 1,291,035 | 1,464,559 |
Hollister [Member] | |||
Schedule of Revenue by Brand [Line Items] | |||
Net Sales | $ 2,147,979 | $ 1,834,349 | $ 2,158,514 |
SEGMENT REPORTING Long-lived as
SEGMENT REPORTING Long-lived assets (Details) - USD ($) $ in Thousands | Jan. 29, 2022 | Jan. 30, 2021 |
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Long-Lived Assets | $ 1,229,075 | $ 1,467,522 |
United States | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Long-Lived Assets | 849,298 | 963,555 |
EMEA | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Long-Lived Assets | 272,348 | 350,136 |
Other Locations [Member] | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Long-Lived Assets | 23,599 | 33,575 |
Asia Pacific | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Long-Lived Assets | 83,830 | 120,256 |
International [Member] | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Long-Lived Assets | $ 379,777 | $ 503,967 |
FLAGSHIP STORE EXIT (BENEFITS_3
FLAGSHIP STORE EXIT (BENEFITS) CHARGES (Details) - USD ($) $ in Thousands | 12 Months Ended | ||||
Jan. 29, 2022 | Jan. 30, 2021 | Feb. 01, 2020 | Apr. 29, 2021 | ||
Restructuring Cost and Reserve [Line Items] | |||||
Total flagship store exit (benefits) charges | $ (1,153) | $ (11,636) | $ 47,257 | ||
Operating Lease, Liability | 920,087 | ||||
Operating Lease, Payments | 364,842 | 316,992 | 422,850 | ||
SoHo New York City Flagship Store [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Gain on lease assignment | 900 | ||||
Operating Lease, Liability | $ 80,100 | ||||
Reduction of Operating Lease Liability | 65,000 | ||||
Operating Lease, Payments | 63,800 | ||||
Flagship Store [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Operating lease cost | (841) | (6,959) | 46,716 | ||
Gain on lease assignment | 0 | (5,237) | 0 | ||
Asset disposals and other store-closure benefits (1) | [1] | (514) | (2,658) | (1,687) | |
Employee severance and other employee transition costs | 202 | 3,218 | 2,228 | ||
Total flagship store exit (benefits) charges | $ (1,153) | $ (11,636) | $ 47,257 | ||
[1] | Amounts represent costs incurred in returning the store to its original condition, including updates to previous accruals for asset retirement obligations and costs to remove inventory and store assets. |
SUBSEQUENT EVENT (Details)
SUBSEQUENT EVENT (Details) - USD ($) $ / shares in Units, $ in Thousands | 2 Months Ended | 12 Months Ended | ||
Mar. 25, 2022 | Jan. 29, 2022 | Jan. 30, 2021 | Feb. 01, 2020 | |
Subsequent Event [Line Items] | ||||
Purchase of common stock, shares | 15,172,000 | |||
Treasury Stock, Value, Acquired, Cost Method | $ 377,290 | $ 15,172 | $ 63,542 | |
Subsequent Event Type [Domain] | Common Class A | ||||
Subsequent Event [Line Items] | ||||
Purchase of common stock, shares | 2,700,000 | |||
Average Shares Repurchased Price Paid Per Share | $ 30.14 |
Subsequent Events (Textuals) (D
Subsequent Events (Textuals) (Details) $ in Millions | Jan. 29, 2022USD ($) |
Subsequent Events [Abstract] | |
Stock Repurchase Program, Authorized Amount | $ 500 |
Uncategorized Items - anf-20220
Label | Element | Value |
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents | us-gaap_CashCashEquivalentsRestrictedCashAndRestrictedCashEquivalents | $ 745,829,000 |