Document And Entity Information
Document And Entity Information - shares | 9 Months Ended | |
Oct. 31, 2020 | Nov. 27, 2020 | |
Document And Entity Information | ||
Entity Central Index Key | 0000014707 | |
Entity Registrant Name | CALERES, INC | |
Amendment Flag | false | |
Current Fiscal Year End Date | --01-30 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2020 | |
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Oct. 31, 2020 | |
Document Transition Report | false | |
Entity File Number | 1-2191 | |
Entity Incorporation, State or Country Code | NY | |
Entity Tax Identification Number | 43-0197190 | |
Entity Address, Address Line One | 8300 Maryland Avenue | |
Entity Address, City or Town | St. Louis | |
Entity Address, State or Province | MO | |
Entity Address, Postal Zip Code | 63105 | |
City Area Code | 314 | |
Local Phone Number | 854-4000 | |
Title of 12(b) Security | Common Stock - par value of $0.01 per share | |
Trading Symbol | CAL | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 37,906,760 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Oct. 31, 2020 | Feb. 01, 2020 | Nov. 02, 2019 |
Current assets: | |||
Cash and cash equivalents | $ 124,330 | $ 45,218 | $ 52,502 |
Receivables, net | 141,059 | 162,181 | 156,253 |
Inventories, net | 507,365 | 618,406 | 644,646 |
Income taxes | 53,888 | 6,189 | 2,271 |
Prepaid expenses and other current assets | 45,513 | 50,305 | 45,974 |
Total current assets | 872,155 | 882,299 | 901,646 |
Other assets | 97,050 | 89,389 | 92,214 |
Goodwill | 4,956 | 245,275 | 245,275 |
Intangible assets, net | 262,118 | 294,304 | 297,570 |
Lease right-of-use assets | 601,574 | 695,594 | 704,244 |
Property and equipment | 562,003 | 593,979 | 591,370 |
Allowance for depreciation | (372,796) | (369,133) | (361,109) |
Property and equipment, net | 189,207 | 224,846 | 230,261 |
Total assets | 2,027,060 | 2,431,707 | 2,471,210 |
Current liabilities: | |||
Borrowings under revolving credit agreement | 300,000 | 275,000 | 295,000 |
Mandatory purchase obligation | 30,146 | 0 | 0 |
Trade accounts payable | 285,582 | 267,018 | 275,699 |
Income taxes | 7,053 | 7,186 | 13,979 |
Lease obligations | 156,200 | 127,869 | 144,501 |
Other accrued expenses | 180,927 | 173,877 | 165,051 |
Total current liabilities | 959,908 | 850,950 | 894,230 |
Other liabilities: | |||
Noncurrent lease obligations | 556,343 | 629,032 | 629,731 |
Long-term debt | 198,736 | 198,391 | 198,276 |
Income taxes | 7,786 | 7,786 | 7,786 |
Other liabilities | 42,632 | 96,418 | 87,837 |
Total other liabilities | 805,497 | 931,627 | 923,630 |
Equity: | |||
Common stock | 379 | 404 | 406 |
Additional paid-in capital | 159,327 | 153,489 | 152,214 |
Accumulated other comprehensive loss | (31,184) | (31,843) | (30,318) |
Retained earnings | 128,149 | 523,900 | 528,538 |
Total Caleres, Inc. shareholders' equity | 256,671 | 645,950 | 650,840 |
Noncontrolling interests | 4,984 | 3,180 | 2,510 |
Total equity | 261,655 | 649,130 | 653,350 |
Total liabilities and equity | $ 2,027,060 | $ 2,431,707 | $ 2,471,210 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (LOSS) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 31, 2020 | Nov. 02, 2019 | Oct. 31, 2020 | Nov. 02, 2019 | |
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (LOSS) | ||||
Net sales | $ 647,480 | $ 792,375 | $ 1,546,111 | $ 2,222,614 |
Cost of goods sold | 390,508 | 472,605 | 984,621 | 1,317,064 |
Gross profit | 256,972 | 319,770 | 561,490 | 905,550 |
Selling and administrative expenses | 236,901 | 275,330 | 663,425 | 804,972 |
Impairment of goodwill and intangible assets | 0 | 0 | 262,719 | 0 |
Restructuring and other special charges, net | 0 | 969 | 65,625 | 2,434 |
Operating earnings (loss) | 20,071 | 43,471 | (430,279) | 98,144 |
Interest expense, net | (10,881) | (10,559) | (33,747) | (25,288) |
Other income, net | 5,461 | 2,633 | 12,718 | 7,902 |
Earnings (loss) before income taxes | 14,651 | 35,545 | (451,308) | 80,758 |
Income tax benefit (provision) | 275 | (7,784) | 89,393 | (18,685) |
Net earnings (loss) | 14,926 | 27,761 | (361,915) | 62,073 |
Net earnings (loss) attributable to noncontrolling interests | 509 | (226) | 223 | (338) |
Net earnings (loss) attributable to Caleres, Inc. | $ 14,417 | $ 27,987 | $ (362,138) | $ 62,411 |
Basic earnings (loss) per common share attributable to Caleres, Inc. shareholders (in dollars per share) | $ 0.38 | $ 0.69 | $ (9.67) | $ 1.51 |
Diluted earnings (loss) per common share attributable to Caleres, Inc. shareholders (in dollars per share) | $ 0.38 | $ 0.69 | $ (9.67) | $ 1.51 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 31, 2020 | Nov. 02, 2019 | Oct. 31, 2020 | Nov. 02, 2019 | |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) | ||||
Net earnings (loss) | $ 14,926 | $ 27,761 | $ (361,915) | $ 62,073 |
Other comprehensive income (loss), net of tax: | ||||
Foreign currency translation adjustment | 401 | 582 | (409) | (397) |
Pension and other postretirement benefits adjustments | (67) | 429 | 1,057 | 1,285 |
Derivative financial instruments | 0 | 63 | 92 | 361 |
Other comprehensive income, net of tax | 334 | 1,074 | 740 | 1,249 |
Comprehensive income (loss) | 15,260 | 28,835 | (361,175) | 63,322 |
Comprehensive income (loss) attributable to noncontrolling interests | 590 | (239) | 304 | (372) |
Comprehensive income (loss) attributable to Caleres, Inc. | $ 14,670 | $ 29,074 | $ (361,479) | $ 63,694 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Oct. 31, 2020 | Nov. 02, 2019 | |
Operating Activities | ||
Net (loss) earnings | $ (361,915) | $ 62,073 |
Adjustments to reconcile net (loss) earnings to net cash provided by operating activities: | ||
Depreciation | 31,923 | 34,312 |
Amortization of capitalized software | 4,410 | 4,910 |
Amortization of intangible assets | 9,786 | 9,790 |
Amortization of debt issuance costs and debt discount | 1,016 | 979 |
Fair value adjustments to mandatory purchase obligation | 14,946 | 4,410 |
Share-based compensation expense | 6,920 | 8,933 |
Loss on disposal of property and equipment | 848 | 874 |
Impairment charges for property, equipment, and lease right-of-use assets | 35,620 | 5,105 |
Impairment of goodwill and intangible assets | 262,719 | 0 |
Provision for expected credit losses | 10,663 | 728 |
Changes in operating assets and liabilities: | ||
Receivables | 8,313 | 34,740 |
Inventories | 110,954 | 37,482 |
Prepaid expenses and other current and noncurrent assets | (60,300) | (7,819) |
Trade accounts payable | 18,592 | (37,537) |
Accrued expenses and other liabilities | 55,345 | (25,627) |
Income taxes, net | (47,833) | 12,470 |
Other, net | (241) | (86) |
Net cash provided by operating activities | 101,766 | 145,737 |
Investing Activities | ||
Purchases of property and equipment | (12,016) | (37,354) |
Disposals of property and equipment | 0 | 636 |
Capitalized software | (3,525) | (4,893) |
Net cash used for investing activities | (15,541) | (41,611) |
Financing Activities | ||
Borrowings under revolving credit agreement | 340,500 | 237,000 |
Repayments under revolving credit agreement | (315,500) | (277,000) |
Dividends paid | (8,148) | (8,631) |
Acquisition of treasury stock | (23,348) | (31,168) |
Issuance of common stock under share-based plans, net | (1,078) | (2,605) |
Contributions by noncontrolling interests | 1,500 | 1,500 |
Other | (980) | (1,022) |
Net cash used for financing activities | (7,054) | (81,926) |
Effect of exchange rate changes on cash and cash equivalents | (59) | 102 |
Increase in cash and cash equivalents | 79,112 | 22,302 |
Cash and cash equivalents at beginning of period | 45,218 | 30,200 |
Cash and cash equivalents at end of period | $ 124,330 | $ 52,502 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($) $ in Thousands | Cumulative Effect, Period of Adoption, AdjustmentRetained Earnings | Cumulative Effect, Period of Adoption, AdjustmentTotal Caleres, Inc. | Cumulative Effect, Period of Adoption, Adjustment | Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive (Loss) Income | Retained Earnings | Total Caleres, Inc. | Noncontrolling Interest | Total |
BALANCE (Accounting Standards Update 2016-02) at Feb. 02, 2019 | $ (13,436) | $ (13,436) | $ (13,436) | |||||||
BALANCE at Feb. 02, 2019 | $ 419 | $ 145,889 | $ (31,601) | $ 519,346 | $ 634,053 | $ 1,382 | $ 635,435 | |||
BALANCE (in shares) at Feb. 02, 2019 | 41,886,562 | |||||||||
Net earnings (loss) | 62,411 | 62,411 | (338) | 62,073 | ||||||
Foreign currency translation adjustment | (363) | (363) | (34) | (397) | ||||||
Gain (Loss) Recognized in OCL on Derivatives | 361 | 361 | 361 | |||||||
Pension and other postretirement benefits adjustments, net of tax | 1,285 | 1,285 | 1,285 | |||||||
Comprehensive income (loss) | 1,283 | 62,411 | 63,694 | (372) | 63,322 | |||||
Contributions by noncontrolling interests | 0 | 1,500 | 1,500 | |||||||
Dividends | (8,631) | (8,631) | (8,631) | |||||||
Acquisition of treasury stock | $ (16) | (31,152) | (31,168) | (31,168) | ||||||
Acquisition of treasury stock (in shares) | (1,588,741) | |||||||||
Issuance of common stock under share-based plans, net | $ 3 | (2,608) | (2,605) | (2,605) | ||||||
Issuance of common stock under share-based plans, net (in shares) | 295,466 | |||||||||
Share-based compensation expense | 8,933 | 8,933 | 8,933 | |||||||
BALANCE at Nov. 02, 2019 | $ 406 | 152,214 | (30,318) | 528,538 | 650,840 | 2,510 | 653,350 | |||
BALANCE (in shares) at Nov. 02, 2019 | 40,593,287 | |||||||||
BALANCE at Aug. 03, 2019 | $ 407 | 149,881 | (31,405) | 504,546 | 623,429 | 1,249 | 624,678 | |||
BALANCE (in shares) at Aug. 03, 2019 | 40,720,927 | |||||||||
Net earnings (loss) | 27,987 | 27,987 | (226) | 27,761 | ||||||
Foreign currency translation adjustment | 595 | 595 | (13) | 582 | ||||||
Gain (Loss) Recognized in OCL on Derivatives | 63 | 63 | 63 | |||||||
Pension and other postretirement benefits adjustments, net of tax | 429 | 429 | 429 | |||||||
Comprehensive income (loss) | 1,087 | 27,987 | 29,074 | (239) | 28,835 | |||||
Contributions by noncontrolling interests | 1,500 | 1,500 | ||||||||
Dividends | (2,823) | (2,823) | (2,823) | |||||||
Acquisition of treasury stock | $ (1) | (1,172) | (1,173) | (1,173) | ||||||
Acquisition of treasury stock (in shares) | (58,263) | |||||||||
Issuance of common stock under share-based plans, net | $ 0 | (58) | (58) | (58) | ||||||
Issuance of common stock under share-based plans, net (in shares) | (69,377) | |||||||||
Share-based compensation expense | 2,391 | 2,391 | 2,391 | |||||||
BALANCE at Nov. 02, 2019 | $ 406 | 152,214 | (30,318) | 528,538 | 650,840 | 2,510 | 653,350 | |||
BALANCE (in shares) at Nov. 02, 2019 | 40,593,287 | |||||||||
BALANCE (Accounting Standards Update 2016-13) at Feb. 01, 2020 | $ (2,146) | $ (2,146) | $ (2,146) | |||||||
BALANCE at Feb. 01, 2020 | $ 404 | 153,489 | (31,843) | 523,900 | 645,950 | 3,180 | 649,130 | |||
BALANCE (in shares) at Feb. 01, 2020 | 40,396,757 | |||||||||
Net earnings (loss) | (362,138) | (362,138) | 223 | (361,915) | ||||||
Foreign currency translation adjustment | (490) | (490) | 81 | (409) | ||||||
Gain (Loss) Recognized in OCL on Derivatives | 92 | 92 | 92 | |||||||
Pension and other postretirement benefits adjustments, net of tax | 1,057 | 1,057 | 1,057 | |||||||
Comprehensive income (loss) | 659 | (362,138) | (361,479) | 304 | (361,175) | |||||
Contributions by noncontrolling interests | 0 | 1,500 | 1,500 | |||||||
Dividends | (8,148) | (8,148) | (8,148) | |||||||
Acquisition of treasury stock | $ (29) | (23,319) | (23,348) | (23,348) | ||||||
Acquisition of treasury stock (in shares) | (2,902,122) | |||||||||
Issuance of common stock under share-based plans, net | $ 4 | (1,082) | (1,078) | (1,078) | ||||||
Issuance of common stock under share-based plans, net (in shares) | 449,539 | |||||||||
Share-based compensation expense | 6,920 | 6,920 | 6,920 | |||||||
BALANCE at Oct. 31, 2020 | $ 379 | 159,327 | (31,184) | 128,149 | 256,671 | 4,984 | 261,655 | |||
BALANCE (in shares) at Oct. 31, 2020 | 37,944,174 | |||||||||
BALANCE at Aug. 01, 2020 | $ 379 | 156,913 | (31,437) | 116,385 | 242,240 | 2,894 | 245,134 | |||
BALANCE (in shares) at Aug. 01, 2020 | 37,912,156 | |||||||||
Net earnings (loss) | 14,417 | 14,417 | 509 | 14,926 | ||||||
Foreign currency translation adjustment | 320 | 320 | 81 | 401 | ||||||
Gain (Loss) Recognized in OCL on Derivatives | 0 | |||||||||
Pension and other postretirement benefits adjustments, net of tax | (67) | (67) | (67) | |||||||
Comprehensive income (loss) | 253 | 14,417 | 14,670 | 590 | 15,260 | |||||
Contributions by noncontrolling interests | 0 | 1,500 | 1,500 | |||||||
Dividends | (2,653) | (2,653) | (2,653) | |||||||
Issuance of common stock under share-based plans, net | $ 0 | (104) | (104) | (104) | ||||||
Issuance of common stock under share-based plans, net (in shares) | 32,018 | |||||||||
Share-based compensation expense | 2,518 | 2,518 | 2,518 | |||||||
BALANCE at Oct. 31, 2020 | $ 379 | $ 159,327 | $ (31,184) | $ 128,149 | $ 256,671 | $ 4,984 | $ 261,655 | |||
BALANCE (in shares) at Oct. 31, 2020 | 37,944,174 |
CONDENSED CONSOLIDATED STATEM_5
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (Parentheticals) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 31, 2020 | Nov. 02, 2019 | Oct. 31, 2020 | Nov. 02, 2019 | |
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY | ||||
Pension and other postretirement benefits adjustments, tax | $ 44 | $ 149 | $ 336 | $ 448 |
Dividends, per share (in dollars per share) | $ 0.07 | $ 0.07 | $ 0.21 | $ 0.21 |
Unrealized gain (loss) on derivative financial instruments, tax | $ 4 | $ 31 | $ 83 |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 9 Months Ended |
Oct. 31, 2020 | |
BASIS OF PRESENTATION | |
BASIS OF PRESENTATION | Note 1 Basis of Presentation The accompanying condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q of the United States Securities and Exchange Commission (“SEC”) and reflect all adjustments and accruals of a normal recurring nature, which management believes are necessary to present fairly the financial position, results of operations, comprehensive income and cash flows of Caleres, Inc. ("the Company"). These statements, however, do not include all information and footnotes necessary for a complete presentation of the Company’s consolidated financial position, results of operations, comprehensive income and cash flows in conformity with accounting principles generally accepted in the United States. The condensed consolidated financial statements include the accounts of the Company and its wholly-owned and majority-owned subsidiaries, after the elimination of intercompany accounts and transactions. The Company’s business is seasonal in nature due to consumer spending patterns, with higher back-to-school and holiday season sales. Traditionally, the third fiscal quarter accounts for a substantial portion of the Company’s earnings for the year. Interim results may not necessarily be indicative of results which may be expected for any other interim period or for the year as a whole, particularly given the impact of the coronavirus pandemic on the results of operations for the thirteen and thirty-nine weeks ended October 31, 2020, as further discussed below. Certain prior period amounts in the condensed consolidated financial statements and footnotes have been reclassified to conform to the current period presentation. These reclassifications did not affect net (loss) earnings attributable to Caleres, Inc. The accompanying condensed consolidated financial statements and footnotes should be read in conjunction with the consolidated financial statements and footnotes included in the Company’s Annual Report on Form 10-K for the year ended February 1, 2020. COVID-19 Pandemic The United States and global economies continue to be adversely affected by the coronavirus (“COVID-19”) pandemic. Although the Company has reopened all retail stores from the temporary store closures in the first half of 2020, the Company’s financial results continue to be negatively impacted by COVID-19. Many of the retail stores have reduced operating hours and have experienced declines in foot traffic with stay-at-home orders and other government mandates, which has resulted in lower sales, despite the e-commerce business experiencing robust growth during this time. In addition, a small number of stores have temporarily closed again due to local government mandates. The Company has taken decisive actions to manage its resources conservatively to mitigate the adverse impact of the pandemic. These actions included reductions in the workforce, associate furloughs for a significant portion of the workforce, and reductions in salary for most remaining associates through the end of the second quarter, as well as a reduction in the cash retainers for the Board of Directors through the end of the fiscal year; reducing inventory purchases; reducing marketing expenses; and minimizing costs associated with the closed retail facilities. In addition, as a precautionary measure to increase its cash position and preserve financial flexibility given the uncertainty in the United States and global markets resulting from COVID-19, the Company increased the borrowings on its revolving credit facility in March 2020 to $440.0 million. In April, the Company entered into an amendment to its Fourth Amended and Restated Credit Agreement to increase its borrowing capacity, as further discussed in Note 10 to the condensed consolidated financial statements. During the third quarter of 2020, the Company continued to repay the incremental borrowings from March, with total net repayments of $138.5 million since the end of the first quarter of 2020. On March 27, 2020, the Coronavirus Aid, Relief and Economic Security ("CARES") Act was enacted. The CARES Act includes a provision that allows the Company to defer the employer portion of social security payroll tax payments that would have been paid between the enactment date and December 31, 2020, with 50% payable by December 31, 2021 and 50% payable by December 31, 2022. As of October 31, 2020, the Company has deferred approximately $7.0 million of employer social security payroll taxes, which are recorded in other liabilities on the condensed consolidated balance sheets. In addition, the CARES Act permits the carryback of certain current operating losses to prior years. As discussed in Note 16 to the condensed consolidated financial statements, this carryback provision resulted in approximately $6.6 million of incremental tax benefit, as current year losses are expected to be carried back to years with a higher federal corporate tax rate. Noncontrolling Interests During 2019, the Company entered into a joint venture with Brand Investment Holding Limited (“Brand Investment Holding”), a member of the Gemkell Group. The Company and Brand Investment Holding are each 50% owners of the joint venture, which is named CLT Brand Solutions (“CLT”). The Company consolidates CLT into its consolidated financial statements. Net earnings (loss) attributable to noncontrolling interests represents the share of net earnings or losses that are attributable to Brand Investment Holding equity. Transactions between the Company and the joint venture have been eliminated in the consolidated financial statements. During both the thirty-nine weeks ended October 31, 2020 and November 2, 2019, CLT was funded with $3.0 million in capital contributions, including $1.5 million from the Company and $1.5 million from Brand Investment Holding. Net sales and operating earnings were immaterial during the thirty-nine weeks ended October 31, 2020 and November 2, 2019. |
IMPACT OF NEW ACCOUNTING PRONOU
IMPACT OF NEW ACCOUNTING PRONOUNCEMENTS | 9 Months Ended |
Oct. 31, 2020 | |
IMPACT OF NEW ACCOUNTING PRONOUNCEMENTS | |
IMPACT OF NEW ACCOUNTING PRONOUNCEMENTS | Note 2 Impact of New Accounting Pronouncements Impact of Recently Adopted Accounting Pronouncements In June 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2016-13, Financial Instruments - Credit Losses (Topic 326) The following table summarizes the activity in the Company’s allowance for expected credit losses during the thirty-nine weeks ended October 31, 2020: ($ thousands) Balance at February 1, 2020 $ 1,813 Adjustment upon adoption of ASU 2016-13 2,521 Provision for expected credit losses 10,663 Uncollectible accounts written off, net of recoveries 221 Balance at October 31, 2020 $ 15,218 In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework — Changes to the Disclosure Requirements for Fair Value Measurement In March 2020, the SEC issued SEC Release No. 33-10762, Financial Disclosures about Guarantors and Issuers of Guaranteed Securities and Affiliates Whose Securities Collateralize a Registrant’s Securities, Management’s Discussion and Analysis of Financial Condition and Results of Operations Debt (Topic 470): Amendments to SEC Paragraphs Pursuant to SEC Release No. 33-10762 In April 2020, the FASB issued interpretive guidance indicating that entities may elect not to evaluate whether a concession provided by lessors is a lease modification. Under existing lease guidance, an entity would be required to determine if a lease concession was the result of a new arrangement reached with the landlord, which would be accounted for under the lease modification framework, or if the concession was under the enforceable rights and obligations that existed in the original lease, which would be accounted for outside the lease modification framework. The FASB guidance provides entities with the option to elect to account for lease concessions as though the enforceable rights and obligations existed in the original lease. The Company has elected to treat lease concessions as variable rent. Accordingly, $1.7 million and $3.7 million in lease concessions for the thirteen and thirty-nine weeks ended, respectively, were recorded as a reduction of rent expense within selling and administrative expenses in the condensed consolidated statements of earnings (loss). Refer to Note 9 to the condensed consolidated financial statements for further discussion regarding the Company’s leases. Impact of Prospective Accounting Pronouncements In August 2018, the FASB issued ASU 2018-14, Compensation — Retirement Benefits — Defined Benefit Plans — General (Subtopic 715-20), Disclosure Framework — Changes to the Disclosure Requirements for Defined Benefit Plans In December 2019, the FASB issued ASU 2019-12, Simplifying the Accounting for Income Taxes |
REVENUES
REVENUES | 9 Months Ended |
Oct. 31, 2020 | |
REVENUES | |
REVENUES | Note 3 Revenues Disaggregation of Revenues The following table disaggregates revenue by segment and major source for the periods ended October 31, 2020 and November 2, 2019: Thirteen Weeks Ended October 31, 2020 Eliminations and ($ thousands) Famous Footwear Brand Portfolio Other Total Retail stores (2) $ 325,501 $ 14,291 $ — $ 339,792 Landed wholesale - e-commerce (1) — 42,001 — 42,001 Landed wholesale - e-commerce - drop ship (1) (2) — 21,256 — 21,256 Landed wholesale - other — 136,627 (11,813) 124,814 First-cost wholesale — 15,368 — 15,368 First-cost wholesale - e-commerce (1) (2) — 99 — 99 E-commerce - Company websites (1) (2) 66,058 35,100 — 101,158 Licensing and royalty — 2,809 — 2,809 Other (3) 147 36 — 183 Net sales $ 391,706 $ 267,587 $ (11,813) $ 647,480 Thirteen Weeks Ended November 2, 2019 Eliminations and ($ thousands) Famous Footwear Brand Portfolio Other Total Retail stores (2) $ 401,943 $ 40,621 $ — $ 442,564 Landed wholesale - e-commerce (1) — 27,304 — 27,304 Landed wholesale - e-commerce - drop ship (1) (2) — 58,653 — 58,653 Landed wholesale - other — 177,146 (14,071) 163,075 First-cost wholesale — 16,124 — 16,124 First-cost wholesale - e-commerce (1) (2) — 354 — 354 E-commerce - Company websites (1) (2) 44,489 36,692 — 81,181 Licensing and royalty — 2,908 — 2,908 Other (3) 151 61 — 212 Net sales $ 446,583 $ 359,863 $ (14,071) $ 792,375 Thirty-Nine Weeks Ended October 31, 2020 Eliminations and ($ thousands) Famous Footwear Brand Portfolio Other Total Retail stores (2) $ 712,761 $ 33,173 $ — $ 745,934 Landed wholesale - e-commerce (1) — 91,477 — 91,477 Landed wholesale - e-commerce - drop ship (1) (2) — 61,235 — 61,235 Landed wholesale - other — 327,322 (39,229) 288,093 First-cost wholesale — 39,139 — 39,139 First-cost wholesale - e-commerce (1) (2) — 601 — 601 E-commerce - Company websites (1) (2) 203,888 108,926 — 312,814 Licensing and royalty — 6,463 — 6,463 Other (3) 244 111 — 355 Net sales $ 916,893 $ 668,447 $ (39,229) $ 1,546,111 Thirty-Nine Weeks Ended November 2, 2019 Eliminations and ($ thousands) Famous Footwear Brand Portfolio Other Total Retail stores (2) $ 1,108,200 $ 115,819 $ — $ 1,224,019 Landed wholesale - e-commerce (1) — 64,182 — 64,182 Landed wholesale - e-commerce - drop ship (1) (2) — 148,745 — 148,745 Landed wholesale - other — 549,321 (56,463) 492,858 First-cost wholesale — 66,826 — 66,826 First-cost wholesale - e-commerce (1) (2) — 1,528 — 1,528 E-commerce - Company websites (1) (2) 109,954 102,637 — 212,591 Licensing and royalty — 11,234 — 11,234 Other (3) 435 196 — 631 Net sales $ 1,218,589 $ 1,060,488 $ (56,463) $ 2,222,614 (1) Collectively referred to as "e-commerce" below (2) Collectively referred to as “Direct-to-consumer” (3) Includes breakage revenue from unredeemed gift cards Retail stores Traditionally, the majority of the Company’s revenue is generated from retail sales where control is transferred and revenue is recognized at the point of sale. Retail sales are recorded net of estimated returns and exclude sales tax. The Company records a returns reserve and a corresponding return asset for expected returns of merchandise. Retail sales to members of the Company’s loyalty programs, including the Famously You Rewards program, include two performance obligations: the sale of merchandise and the delivery of points that may be redeemed for future purchases. The transaction price is allocated to the separate performance obligations based on the relative stand-alone selling price. The stand-alone selling price for the points is estimated using the retail value of the merchandise earned, adjusted for estimated breakage based upon historical redemption patterns. The revenue associated with the initial merchandise purchased is recognized immediately and the value assigned to the points is deferred until the points are redeemed, forfeited or expired. Landed wholesale Landed sales are wholesale sales in which the merchandise is shipped directly to the customer from the Company’s warehouses. Many landed customers arrange their own transportation of merchandise and, with limited exceptions, control is transferred at the time of shipment. First-cost wholesale First-cost sales are wholesale sales in which the Company purchases merchandise from an international factory that manufactures the product and subsequently sells to a customer at an overseas port. Revenue is recognized at the time the merchandise is delivered to the customer’s designated freight forwarder and control is transferred to the customer. E-commerce The Company also generates revenue from sales on websites maintained by the Company that are shipped from the Company’s distribution centers or retail stores directly to the consumer, picked up directly by the consumer from the Company’s stores and e-commerce sales from the Company’s wholesale customers’ websites that are fulfilled on a drop-ship or first-cost basis (collectively referred to as "e-commerce"). The Company transfers control and recognizes revenue for merchandise sold that is shipped directly to an individual consumer upon delivery to the consumer. Licensing and royalty The Company has license agreements with third parties allowing them to sell the Company’s branded product, or other merchandise that uses the Company’s owned or licensed brand names. These license agreements provide the licensee access to the Company’s symbolic intellectual property, and revenue is therefore recognized over the license term. For royalty contracts that do not have guaranteed minimums, the Company recognizes revenue as the licensee’s sales occur. For royalty contracts that have guaranteed minimums, revenue for the guaranteed minimum is recognized on a straight-line basis during the term, until such time that the cumulative royalties exceed the total minimum guarantee. Up-front payments are recognized over the contractual term to which the guaranteed minimum relates. Contract Balances Revenue is recorded at the transaction price, net of estimates for variable consideration for which reserves are established, including returns, allowances and discounts. Variable consideration is estimated using the expected value method and given the large number of contracts with similar characteristics, the portfolio approach is applied to determine the variable consideration for each revenue stream. Reserves for projected returns are based on historical patterns and current expectations. Information about significant contract balances from contracts with customers is as follows: ($ thousands) October 31, 2020 November 2, 2019 February 1, 2020 Customer allowances and discounts $ 22,182 $ 25,762 $ 26,200 Loyalty programs liability 14,634 17,274 16,405 Returns reserve 14,889 15,040 14,033 Gift card liability 4,909 4,794 5,742 Changes in contract balances with customers generally reflect differences in relative sales volume for the periods presented. In addition, during the thirty-nine weeks ended October 31, 2020, the loyalty programs liability increased $20.7 million due to points and material rights accrued for purchases and decreased $22.5 million due to expirations and redemptions. During the thirty-nine weeks ended November 2, 2019, the loyalty programs liability increased $24.2 million due to points and material rights accrued for purchases and decreased $21.6 million due to expirations and redemptions. |
EARNINGS (LOSS) PER SHARE
EARNINGS (LOSS) PER SHARE | 9 Months Ended |
Oct. 31, 2020 | |
EARNINGS (LOSS) PER SHARE | |
EARNINGS (LOSS) PER SHARE | Note 4 Earnings (Loss) Per Share The Company uses the two-class method to compute basic and diluted earnings (loss) per common share attributable to Caleres, Inc. shareholders. In periods of net loss, no effect is given to the Company’s participating securities since they do not contractually participate in the losses of the Company. The following table sets forth the computation of basic and diluted earnings (loss) per common share attributable to Caleres, Inc. shareholders for the periods ended October 31, 2020 and November 2, 2019: Thirteen Weeks Ended Thirty-Nine Weeks Ended ($ thousands, except per share amounts) October 31, 2020 November 2, 2019 October 31, 2020 November 2, 2019 NUMERATOR Net earnings (loss) $ 14,926 $ 27,761 $ (361,915) $ 62,073 Net (earnings) loss attributable to noncontrolling interests (509) 226 (223) 338 Net earnings allocated to participating securities (512) (946) — (2,042) Net earnings (loss) attributable to Caleres, Inc. after allocation of earnings to participating securities $ 13,905 $ 27,041 $ (362,138) $ 60,369 DENOMINATOR Denominator for basic earnings (loss) per common share attributable to Caleres, Inc. shareholders 36,554 39,258 37,439 39,983 Dilutive effect of share-based awards 176 55 — 57 Denominator for diluted earnings (loss) per common share attributable to Caleres, Inc. shareholders 36,730 39,313 37,439 40,040 Basic earnings (loss) per common share attributable to Caleres, Inc. shareholders $ 0.38 $ 0.69 $ (9.67) $ 1.51 Diluted earnings (loss) per common share attributable to Caleres, Inc. shareholders $ 0.38 $ 0.69 $ (9.67) $ 1.51 Options to purchase 24,667 shares of common stock for both the thirteen and thirty-nine weeks ended October 31, 2020, were not included in the denominator for diluted earnings (loss) per common share attributable to Caleres, Inc. shareholders because the effect would be anti-dilutive. Options to purchase 16,667 shares of common stock were excluded from the denominator for both the thirteen and thirty-nine weeks ended November 2, 2019. During the thirteen weeks ended October 31, 2020 and November 2, 2019, the Company repurchased zero and 58,263 shares, respectively, under the 2018 and 2019 publicly announced share repurchase programs, which permits repurchases of up to 2.5 million and 5.0 million shares, respectively. The Company repurchased 2,902,122 and 1,588,741 shares during the thirty-nine weeks ended October 31, 2020 and November 2, 2019, respectively. Refer to further discussion in Item 2, Unregistered Sales of Equity Securities and Use of Proceeds |
RESTRUCTURING AND OTHER SPECIAL
RESTRUCTURING AND OTHER SPECIAL CHARGES | 9 Months Ended |
Oct. 31, 2020 | |
RESTRUCTURING AND OTHER SPECIAL CHARGES | |
RESTRUCTURING AND OTHER SPECIAL CHARGES | Note 5 Restructuring and Other Special Charges Blowfish Mandatory Purchase Obligation In 2018, the Company acquired a controlling interest in Blowfish Malibu. The noncontrolling interest is subject to a mandatory purchase obligation after a three-year period based upon an earnings multiple formula as specified in the purchase agreement. Approximately $9.0 million was initially assigned to the mandatory purchase obligation, which will be paid upon settlement during the third quarter of 2021. Accretion and remeasurement adjustments on the mandatory purchase obligation are being recorded as interest expense. The fair value adjustments on the mandatory purchase obligation totaled $5.1 million ($3.8 million on an after-tax basis, or $0.10 per diluted share) and $14.9 million ($11.1 million on an after-tax basis, or $0.30 per diluted share) for the thirteen and thirty-nine weeks ended October 31, 2020, respectively. The fair value adjustment totaled $3.9 million ($2.9 million on an after-tax basis, or $0.07 per diluted share) in the thirteen and thirty-nine weeks ended November 2, 2019. Refer to further discussion regarding the mandatory purchase obligation in Note 15 to the condensed consolidated financial statements. COVID-19-Related Expenses The Company incurred costs associated with the COVID-19 pandemic and related impacts on the Company’s business, totaling $99.0 million ($78.0 million on an after-tax basis, or $2.08 per diluted share) during the thirty-nine weeks ended October 31, 2020. These costs included non-cash impairment of property and equipment and lease right-of-use assets, inventory markdowns, employee severance and other identified expenses that were specific to the impact of COVID-19 on the Company’s operations. Of the $99.0 million in charges, $65.6 million is presented as restructuring and other special charges, net and $33.4 million is reflected as cost of goods sold in the condensed consolidated statements of earnings (loss). Of the $65.6 million reflected as restructuring and other special charges, $48.4 million is reflected in the Brand Portfolio segment, $16.6 million is reflected in the Famous Footwear segment and $0.6 million is reflected within the Eliminations and Other category. The $33.4 million reflected as cost of goods sold represents inventory markdowns, of which $27.4 million is reflected in the Brand Portfolio segment and $6.0 million is reflected in the Famous Footwear segment. There were no corresponding charges for the thirteen weeks ended October 31, 2020. Refer to Note 9 to the condensed consolidated financial statements for additional information regarding the impact of COVID-19 on the Company’s leases. Impairment of Goodwill and Intangible Assets During the first quarter of 2020, the Company recorded non-cash impairment charges totaling $262.7 million ($218.5 million on an after-tax basis, or $5.84 per diluted share), including $240.3 million of impairment associated with the Company’s goodwill and $22.4 million associated with indefinite-lived trademarks. All of the charges are reflected in the Brand Portfolio segment. Refer to further discussion in Note 8 to the condensed consolidated financial statements. Brand Exits During the first quarter of 2020, the Company incurred costs of $1.6 million ($1.2 million on an after-tax basis, or $0.03 per diluted share) related to the decision to exit the Fergie brand. These charges represent inventory markdowns required to reduce the value of inventory to net realizable value and are presented in cost of goods sold on the condensed consolidated statements of earnings (loss) within the Brand Portfolio segment for the thirty-nine weeks ended October 31, 2020. There were no corresponding costs in the thirteen weeks ended October 31, 2020. The Company’s license agreement to sell Carlos by Carlos Santana footwear expired in December 2018. In connection with the decision to exit the Carlos brand, the Company incurred restructuring-related costs of $1.9 million ($1.4 million on an after-tax basis, or $0.03 per diluted share) during the thirty-nine weeks ended November 2, 2019. Of these charges included in the Brand Portfolio segment, $1.3 million ($1.0 million on an after-tax basis or $0.02 per diluted share) primarily represents incremental inventory markdowns required to reduce the value of inventory to net realizable value and is presented in cost of goods sold on the condensed consolidated statements of earnings (loss) and the remaining $0.6 million ($0.4 million on an after-tax basis, or $0.01 per diluted share) for severance and other related costs is presented in restructuring and other special charges. There were no corresponding costs in the thirty-nine weeks ended October 31, 2020 or the thirteen weeks ended November 2, 2019. Vionic Integration-Related Costs During the thirteen weeks ended November 2, 2019, the Company incurred integration-related costs associated with the acquisition of Vionic in October 2018, primarily for severance, totaling $1.0 million ($0.7 million on an after-tax basis, or $0.02 per diluted share). The costs are presented as restructuring and other special charges, net in the condensed consolidated statements of earnings (loss) within the Eliminations and Other category. During the thirty-nine weeks ended November 2, 2019, the Company incurred integration-related costs, primarily for severance, totaling $1.9 million ($1.4 million on an after-tax basis, or $0.03 per diluted share). Of the $1.9 million in costs, which are presented as restructuring and other special charges, net in the condensed consolidated statements of earnings (loss), $1.8 million are reflected within the Eliminations and Other category and $0.1 million are included in the Brand Portfolio segment. There were no corresponding costs in the thirty-nine weeks ended October 31, 2020. The integration of Vionic is ongoing and the Company anticipates additional integration-related costs as it completes this initiative in the fourth quarter of 2020. |
BUSINESS SEGMENT INFORMATION
BUSINESS SEGMENT INFORMATION | 9 Months Ended |
Oct. 31, 2020 | |
BUSINESS SEGMENT INFORMATION | |
BUSINESS SEGMENT INFORMATION | Note 6 Business Segment Information Following is a summary of certain key financial measures for the Company’s business segments for the periods ended October 31, 2020 and November 2, 2019: Famous Brand Eliminations ($ thousands) Footwear Portfolio and Other Total Thirteen Weeks Ended October 31, 2020 Net sales $ 391,706 $ 267,587 $ (11,813) $ 647,480 Intersegment sales (1) — 11,813 — 11,813 Operating earnings (loss) 27,845 7,304 (15,078) 20,071 Segment assets 837,228 924,976 264,856 2,027,060 Thirteen Weeks Ended November 2, 2019 Net sales $ 446,583 $ 359,863 $ (14,071) $ 792,375 Intersegment sales (1) — 14,071 — 14,071 Operating earnings (loss) 27,681 19,398 (3,608) 43,471 Segment assets 973,272 1,360,445 137,493 2,471,210 Thirty-Nine Weeks Ended October 31, 2020 Net sales $ 916,893 $ 668,447 $ (39,229) $ 1,546,111 Intersegment sales (1) — 39,229 — 39,229 Operating loss (38,651) (352,556) (39,072) (430,279) Thirty-Nine Weeks Ended November 2, 2019 Net sales $ 1,218,589 $ 1,060,488 $ (56,463) $ 2,222,614 Intersegment sales (1) — 56,463 — 56,463 Operating earnings (loss) 70,036 46,225 (18,117) 98,144 (1) Included in net sales in the Brand Portfolio segment and eliminated in the Eliminations and Other category The Eliminations and Other category includes corporate assets, administrative expenses and other costs and recoveries, which are not allocated to the operating segments, as well as the elimination of intersegment sales and profit. Following is a reconciliation of operating earnings (loss) to earnings (loss) before income taxes: Thirteen Weeks Ended Thirty-Nine Weeks Ended October 31, November 2, October 31, November 2, ($ thousands) 2020 2019 2020 2019 Operating earnings (loss) $ 20,071 $ 43,471 $ (430,279) $ 98,144 Interest expense, net (10,881) (10,559) (33,747) (25,288) Other income, net 5,461 2,633 12,718 7,902 Earnings (loss) before income taxes $ 14,651 $ 35,545 $ (451,308) $ 80,758 |
INVENTORIES
INVENTORIES | 9 Months Ended |
Oct. 31, 2020 | |
INVENTORIES | |
INVENTORIES | Note 7 Inventories The Company’s net inventory balance was comprised of the following: ($thousands) October 31, 2020 November 2, 2019 February 1, 2020 Raw materials $ 14,907 $ 19,005 $ 18,455 Work-in-process 293 422 454 Finished goods 492,165 625,219 599,497 Inventories, net $ 507,365 $ 644,646 $ 618,406 |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS | 9 Months Ended |
Oct. 31, 2020 | |
GOODWILL AND INTANGIBLE ASSETS | |
GOODWILL AND INTANGIBLE ASSETS | Note 8 Goodwill and Intangible Assets Goodwill and intangible assets were as follows: ($thousands) October 31, 2020 November 2, 2019 February 1, 2020 Intangible Assets Famous Footwear $ 2,800 $ 2,800 $ 2,800 Brand Portfolio 365,888 388,288 388,288 Total intangible assets 368,688 391,088 391,088 Accumulated amortization (106,570) (93,518) (96,784) Total intangible assets, net 262,118 297,570 294,304 Goodwill Brand Portfolio 4,956 245,275 245,275 Total goodwill 4,956 245,275 245,275 Goodwill and intangible assets, net $ 267,074 $ 542,845 $ 539,579 The Company’s intangible assets as of October 31, 2020, November 2, 2019 and February 1, 2020 were as follows: ($thousands) October 31, 2020 Estimated Useful Lives Accumulated (In Years) Cost Basis Amortization Impairment Net Carrying Value Trademarks 15 - 40 $ 288,788 $ 99,376 $ — $ 189,412 Trademarks Indefinite 58,100 (1) — 22,400 35,700 Customer relationships 15 - 16 44,200 7,194 — 37,006 $ 391,088 $ 106,570 $ 22,400 $ 262,118 November 2, 2019 Estimated Useful Lives Accumulated (In Years) Cost Basis Amortization Impairment Net Carrying Value Trademarks 15 40 $ 288,788 $ 89,360 $ — $ 199,428 Trademarks Indefinite 58,100 (1) — — 58,100 Customer relationships 15 16 44,200 4,158 — 40,042 $ 391,088 $ 93,518 $ — $ 297,570 February 1, 2020 Estimated Useful Lives Accumulated (In Years) Cost Basis Amortization Impairment Net Carrying Value Trademarks 15 40 $ 288,788 $ 91,827 $ — $ 196,961 Trademarks Indefinite 58,100 (1) — — 58,100 Customer relationships 15 16 44,200 4,957 — 39,243 $ 391,088 $ 96,784 $ — $ 294,304 (1) Cost basis for indefinite-lived trademarks has been reduced by $60.0 million in impairment charges recognized in 2018 related to the Allen Edmonds tradename. Amortization expense related to intangible assets was $3.3 million for both the thirteen weeks ended October 31, 2020 and November 2, 2019 and $9.8 million for both the thirty-nine weeks ended October 31, 2020 and November 2, 2019. The Company estimates that amortization expense related to intangible assets will be approximately $13.1 million in 2020, $12.9 million in 2021, $12.5 million in 2022, $12.2 million in 2023 and $11.4 million in 2024. Goodwill is tested for impairment at least annually, or more frequently if events or circumstances indicate it might be impaired, using either the qualitative assessment or a quantitative fair value-based test. During the first quarter of 2020, as a result of the significant decline in the Company’s share price and market capitalization and the impact of COVID-19 on the Company’s business operations, the Company determined that an interim assessment of goodwill was required. A quantitative assessment was performed for all reporting units as of May 2, 2020. The assessment indicated that the carrying value of the goodwill associated with the Brand Portfolio and Vionic reporting units was impaired, resulting in total goodwill impairment charges of $240.3 million. The Company recorded no goodwill impairment charges during the thirteen weeks ended October 31, 2020 or the thirty-nine weeks ended November 2, 2019. Indefinite-lived intangible assets are tested for impairment as of the first day of the fourth quarter of each fiscal year unless events or circumstances indicate an interim test is required. As a result of the triggering event from the economic impacts of COVID-19, an interim assessment was performed as of May 2, 2020. The indefinite-lived intangible asset impairment review resulted in total impairment charges of $22.4 million for the thirteen weeks ended May 2, 2020, including $12.2 million associated with the indefinite-lived Allen Edmonds trademark and $10.2 million of impairment associated with the indefinite-lived Via Spiga trademark. The carrying value of the Via Spiga trademark of $0.5 million will be amortized over approximately two years. The Company recorded no impairment charges during the thirteen weeks ended October 31, 2020 or the thirty-nine weeks ended November 2, 2019. |
LEASES
LEASES | 9 Months Ended |
Oct. 31, 2020 | |
LEASES | |
LEASES | Note 9 Leases The Company leases all of its retail locations and certain manufacturing facilities, office locations, distribution centers and equipment. At contract inception, leases are evaluated and classified as either operating or finance leases. Leases with an initial term of 12 months or less are not recorded on the balance sheet. Lease right-of-use assets and lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term. The majority of the Company’s leases do not provide an implicit rate and therefore, the Company uses an incremental borrowing rate based on information available at the commencement date to determine the present value of future payments. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. Variable lease payments are expensed as incurred. The Company regularly analyzes the results of all of its stores and assesses the viability of underperforming stores to determine whether events or circumstances exist that indicate the stores should be closed or whether the carrying amount of their long-lived assets may not be recoverable. After allowing for an appropriate start-up period, unusual nonrecurring events or favorable trends, property and equipment at stores and the lease right-of-use assets indicated as impaired are written down to fair value as calculated using a discounted cash flow method. The Company recorded asset impairment charges of $0.4 million and $2.2 million during the thirteen weeks ended October 31, 2020 and November 2, 2019, respectively. The Company recorded asset impairment charges, primarily related to underperforming retail stores, of $35.6 million and $5.1 million in the thirty-nine weeks ended October 31, 2020 and November 2, 2019, respectively. The impairment charges recorded in the thirty-nine weeks ended October 31, 2020, including $21.1 million associated with operating lease right-of-use assets and $14.5 million associated with property and equipment, reflect the impact of the COVID-19 pandemic on the Company’s retail operations and estimates of remaining cash flows for each store. Refer to Note 5 and Note 15 to the condensed consolidated financial statements for further discussion on these impairment charges. As a result of the temporary store closures during the first half of 2020 associated with the COVID-19 pandemic, the Company is negotiating with landlords to modify payment terms for certain leases. Deferred payments for these leases are reflected in lease obligations on the condensed consolidated balance sheets. As further discussed in Note 2 to the condensed consolidated financial statements, under relief provided by the FASB, entities may make a policy election to account for the lease concessions as if the enforceable rights existed under the original contract, accounting for them as variable rent rather than lease modifications. The Company has made a policy election to account for rent abatements as variable rent. Accordingly, the Company recorded $1.7 million and $3.7 million in the thirteen and thirty-nine weeks ended October 31, 2020, respectively, in lease concessions as a reduction of rent expense within selling and administrative expenses in the condensed consolidated statements of earnings (loss). Rent deferrals for leases that were extended in connection with the rent concession will continue to be recognized consistent with the original lease agreement. During the thirty-nine weeks ended October 31, 2020, the Company entered into new or amended leases that resulted in the recognition of right-of-use assets and lease obligations of $63.1 million on the condensed consolidated balance sheets. As of October 31, 2020, the Company has entered into lease commitments for four retail locations for which the leases have not yet commenced. The Company anticipates that one lease will begin in the current fiscal year and three leases will begin in the next fiscal year. Upon commencement, right-of-use assets next The components of lease expense for the thirteen and thirty-nine weeks ended October 31, 2020 and November 2, 2019 were as follows: Thirteen Weeks Ended ($thousands) October 31, 2020 November 2, 2019 Operating lease expense $ 38,568 $ 47,068 Variable lease expense 12,739 11,794 Short-term lease expense 1,775 577 Sublease income (29) (73) Total lease expense $ 53,053 $ 59,366 Thirty-Nine Weeks Ended ($thousands) October 31, 2020 November 2, 2019 Operating lease expense $ 124,906 $ 139,380 Variable lease expense 36,090 35,277 Short-term lease expense 3,872 2,654 Sublease income (76) (220) Total lease expense $ 164,792 $ 177,091 Supplemental cash flow information related to leases is as follows: Thirty-Nine Weeks Ended ($thousands) October 31, 2020 November 2, 2019 Cash paid for lease liabilities $ 99,517 $ 136,497 Cash received from sublease income 76 220 |
LONG-TERM AND SHORT-TERM FINANC
LONG-TERM AND SHORT-TERM FINANCING ARRANGEMENTS | 9 Months Ended |
Oct. 31, 2020 | |
LONG-TERM AND SHORT-TERM FINANCING ARRANGEMENTS | |
LONG-TERM AND SHORT-TERM FINANCING ARRANGEMENTS | Note 10 Long-term and Short-term Financing Arrangements Credit Agreement The Company maintains a revolving credit facility for working capital needs. On December 18, 2014, the Company and certain of its subsidiaries (the “Loan Parties”) entered into a Fourth Amended and Restated Credit Agreement ("the Former Credit Agreement"), which was further amended on July 20, 2015 to release all of the Company’s subsidiaries that were borrowers under or that guaranteed the Former Credit Agreement other than Sidney Rich Associates, Inc. and BG Retail, LLC. Allen Edmonds and Vionic were joined to the Former Credit Agreement as guarantors on December 13, 2016 and October 31, 2018, respectively. After giving effect to the joinders, the Company is the lead borrower, and Sidney Rich Associates, Inc., BG Retail, LLC, Allen Edmonds and Vionic are each co-borrowers and guarantors under the Former Credit Agreement. On January 18, 2019, the Loan Parties entered into a Third Amendment to Fourth Amended and Restated Credit Agreement to extend the maturity date to January 18, 2024 and change the borrowing capacity under the Former Credit Agreement from an aggregate amount of up to $600.0 million to an aggregate amount of up to $500.0 million, with the option to increase by up to $250.0 million. On April 14, 2020, the Company entered into a Fourth Amendment to Fourth Amended and Restated Credit Agreement (as so amended, the "Credit Agreement") which, among other modifications, increased the amount available under the revolving credit facility by $100.0 million to an aggregate amount of up to $600.0 million, subject to borrowing base restrictions, and may be further increased by up to $150.0 million. The Credit Agreement increased the spread applied to the LIBOR or prime rate by a total of 75 basis points and increased the unused line fee by 5 basis points. Borrowing availability under the Credit Agreement is limited to the lesser of the total commitments and the borrowing base ("Loan Cap"), which is based on stated percentages of the sum of eligible accounts receivable, eligible inventory and eligible credit card receivables, as defined, less applicable reserves. Under the Credit Agreement, the Loan Parties’ obligations are secured by a first-priority security interest in all accounts receivable, inventory and certain other collateral. Interest on borrowings is at variable rates based on the London Interbank Offered Rate (“LIBOR”) (with a floor of 1.0% imposed by the Credit Agreement) or the prime rate, as defined in the Credit Agreement, plus a spread. The interest rate and fees for letters of credit vary based upon the level of excess availability under the Credit Agreement. There is an unused line fee payable on the unused portion under the facility and a letter of credit fee payable on the outstanding face amount under letters of credit. The Credit Agreement limits the Company’s ability to create, incur, assume or permit to exist additional indebtedness and liens, make investments or specified payments, give guarantees, pay dividends, make capital expenditures and merge or acquire or sell assets. In addition, if excess availability falls below the greater of 10.0% of the lesser of the Loan Cap and $40.0 million for three consecutive business days, and the fixed charge coverage ratio is less than 1.0 to 1.0, the Company would be in default under the Credit Agreement and certain additional covenants would be triggered. The Credit Agreement contains customary events of default, including, without limitation, payment defaults, breaches of representations and warranties, covenant defaults, cross-defaults to similar obligations, certain events of bankruptcy and insolvency, judgment defaults and the failure of any guaranty or security document supporting the agreement to be in full force and effect. If an event of default occurs, the collateral agent may assume dominion and control over the Company’s cash (a “cash dominion event”) until such event of default is cured or waived or the excess availability exceeds such amount for 30 consecutive days, provided that a cash dominion event shall be deemed continuing (even if an event of default is no longer continuing and/or excess availability exceeds the required amount for 30 consecutive business days) after a cash dominion event has occurred and been discontinued on two occasions in any 12-month period. The Credit Agreement also contains certain other covenants and restrictions. The Company was in compliance with all covenants and restrictions under the Credit Agreement as of October 31, 2020. At October 31, 2020, the Company had $300.0 million borrowings outstanding and $11.2 million in letters of credit outstanding under the Credit Agreement. Total additional borrowing availability was $170.6 million at October 31, 2020. $200 Million Senior Notes On July 27, 2015, the Company issued $200.0 million aggregate principal amount of 6.25% Senior Notes due 2023 (the "Senior Notes"). The Senior Notes are guaranteed on a senior unsecured basis by each of the Company’s subsidiaries that is a borrower or guarantor under the Credit Agreement. Interest on the Senior Notes is payable on February 15 and August 15 of each year. The Senior Notes will mature on August 15, 2023. If the Company experiences specific kinds of changes of control, it would be required to offer to purchase the Senior Notes at a purchase price equal to 101% of the principal amount, plus accrued and unpaid interest and Additional Interest, if any, to, but not including, the date of repurchase. The Senior Notes also contain certain other covenants and restrictions that limit certain activities including, among other things, levels of indebtedness, payments of dividends, the guarantee or pledge of assets, certain investments, common stock repurchases, mergers and acquisitions and sales of assets. As of October 31, 2020, the Company was in compliance with all covenants and restrictions relating to the Senior Notes. |
SHAREHOLDERS' EQUITY
SHAREHOLDERS' EQUITY | 9 Months Ended |
Oct. 31, 2020 | |
SHAREHOLDERS' EQUITY | |
SHAREHOLDERS' EQUITY | Note 11 Shareholders’ Equity Accumulated Other Comprehensive Loss The following table sets forth the changes in accumulated other comprehensive loss (OCL) by component for the periods ended October 31, 2020 and November 2, 2019: Pension and Derivative Other Financial Accumulated Foreign Postretirement Instrument Other Currency Transactions Transactions Comprehensive ($thousands) Translation (1) (2) (Loss) Income Balance at August 1, 2020 $ (1,390) $ (30,047) $ — $ (31,437) Other comprehensive income before reclassifications 320 — — 320 Reclassifications: Amounts reclassified from accumulated other comprehensive loss — (111) — (111) Tax provision (3) — 44 — 44 Net reclassifications — (67) — (67) Other comprehensive income 320 (67) — 253 Balance at October 31, 2020 $ (1,070) $ (30,114) $ — $ (31,184) Balance at August 3, 2019 $ (896) $ (30,199) $ (310) $ (31,405) Other comprehensive income before reclassifications 595 — 66 661 Reclassifications: Amounts reclassified from accumulated other comprehensive loss — 578 (4) 574 Tax (benefit) provision — (149) 1 (148) Net reclassifications — 429 (3) 426 Other comprehensive income 595 429 63 1,087 Balance at November 2, 2019 $ (301) $ (29,770) $ (247) $ (30,318) Balance at February 1, 2020 $ (580) $ (31,171) $ (92) $ (31,843) Other comprehensive (loss) income before reclassifications (490) — 87 (403) Reclassifications: — Amounts reclassified from accumulated other comprehensive loss — 1,393 6 1,399 Tax benefit (3) — (336) (1) (337) Net reclassifications — 1,057 5 1,062 Other comprehensive (loss) income (490) 1,057 92 659 Balance at October 31, 2020 $ (1,070) $ (30,114) $ — $ (31,184) Balance at February 2, 2019 $ 62 $ (31,055) $ (608) $ (31,601) Other comprehensive (loss) income before reclassifications (363) — 160 (203) Reclassifications: Amounts reclassified from accumulated other comprehensive loss — 1,733 254 1,987 Tax benefit — (448) (53) (501) Net reclassifications — 1,285 201 1,486 Other comprehensive (loss) income (363) 1,285 361 1,283 Balance at November 2, 2019 $ (301) $ (29,770) $ (247) $ (30,318) (1) Amounts reclassified are included in other income, net. Refer to Note 13 to the condensed consolidated financial statements for additional information related to pension and other postretirement benefits. (2) Amounts reclassified are included in net sales, costs of goods sold and selling and administrative expenses. Refer to Note 14 and Note 15 to the condensed consolidated financial statements for additional information related to derivative financial instruments. (3) Includes approximately $0.5 million of expense related to a valuation allowance on net deferred taxes, including those related to other comprehensive income, for the Company’s Canadian subsidiary. |
SHARE-BASED COMPENSATION
SHARE-BASED COMPENSATION | 9 Months Ended |
Oct. 31, 2020 | |
SHARE-BASED COMPENSATION | |
SHARE-BASED COMPENSATION | Note 12 Share-Based Compensation The Company recognized share-based compensation expense of $2.5 million and $2.4 million during the thirteen weeks and $6.9 million and $8.9 million during the thirty-nine weeks ended October 31, 2020 and November 2, 2019, respectively. The Company had net issuances (repurchases) of 32,018 and (69,377) shares of common stock during the thirteen weeks ended October 31, 2020 and November 2, 2019, respectively, for restricted stock grants, stock performance awards issued to employees, stock options exercised and common and restricted stock grants issued to non-employee directors, net of forfeitures and shares withheld to satisfy the tax withholding requirement. During the thirty-nine weeks ended October 31, 2020 and November 2, 2019, the Company issued 449,539 and 295,466 shares of common stock, respectively, related to the share-based plans. Restricted Stock The following table summarizes restricted stock activity for the periods ended October 31, 2020 and November 2, 2019: Thirteen Weeks Ended Thirteen Weeks Ended October 31, 2020 November 2, 2019 Weighted- Weighted- Total Number Average Total Number Average of Restricted Grant Date of Restricted Grant Date Shares Fair Value Shares Fair Value August 1, 2020 1,360,602 $ 17.81 August 3, 2019 1,433,470 $ 27.09 Granted 35,000 9.73 Granted 11,000 22.44 Forfeited (875) 14.51 Forfeited (78,000) 30.75 Vested (6,500) 25.18 Vested (10,000) 32.85 October 31, 2020 1,388,227 $ 17.57 November 2, 2019 1,356,470 $ 26.80 Thirty-Nine Weeks Ended Thirty-Nine Weeks Ended October 31, 2020 November 2, 2019 Weighted- Weighted- Total Number Average Total Number Average of Restricted Grant Date of Restricted Grant Date Shares Fair Value Shares Fair Value February 1, 2020 1,271,795 $ 26.77 February 2, 2019 1,249,223 $ 29.17 Granted 598,431 6.14 Granted 461,234 22.94 Forfeited (68,787) 23.11 Forfeited (135,425) 29.91 Vested (413,212) 28.23 Vested (218,562) 30.25 October 31, 2020 1,388,227 $ 17.57 November 2, 2019 1,356,470 $ 26.80 All of the restricted shares granted during the thirteen weeks ended October 31, 2020 have a graded-vesting term of three years. Of the 598,431 restricted shares granted during the thirty-nine weeks ended October 31, 2020, 585,683 shares have a graded-vesting term of three years and 12,748 shares have a cliff-vesting term of one year. All of the restricted shares granted during the thirteen weeks ended November 2, 2019 have a graded-vesting term of three years. Of the 461,234 restricted shares granted during the thirty-nine weeks ended November 2, 2019, 448,320 shares have a graded-vesting term of three years and 12,914 shares have a cliff-vesting term of one year. Share-based compensation expense for graded-vesting grants is recognized ratably over the respective vesting periods. Performance Share Awards During the thirteen and thirty-nine weeks ended October 31, 2020, the Company granted performance share awards for a targeted 87,750 shares, with a weighted-average grant date fair value of $7.47. During the thirty-nine weeks ended November 2, 2019, the Company granted performance share awards for a targeted 180,000 shares, with a weighted-average grant date fair value of $23.42. There were no performance-based share awards granted by the Company during the thirteen weeks ended November 2, 2019. Vesting of performance-based awards is generally dependent upon the financial performance of the Company and the attainment of certain financial goals during the three-year period following the grant. Vesting of performance-based awards for the performance share award granted during the thirteen weeks ended October 31, 2020 is dependent upon the attainment of certain financial goals during the second half of 2020. At the end of the vesting period, the employee will have earned an amount of shares or units between 0% and 200% of the targeted award, depending on the achievement of the specified financial goals for the service period. Compensation expense is recognized based on the fair value of the award and the anticipated number of shares or units to be awarded for each tranche in accordance with the vesting schedule of the units over the three-year service period. Restricted Stock Units for Non-Employee Directors Equity-based grants may be made to non-employee directors in the form of restricted stock units ("RSUs") payable in cash or common stock at no cost to the non-employee director. The RSUs earn dividend equivalents at the same rate as dividends on the Company’s common stock. The dividend equivalents, which vest immediately, are automatically re-invested in additional RSUs. Expense related to the initial grant of RSUs is recognized ratably over the vesting period based upon the fair value of the RSUs. The RSUs payable in cash are remeasured at the end of each period. Expense for the dividend equivalents is recognized at fair value when the dividend equivalents are granted. The Company granted 3,618 and 1,350 to non-employee directors for dividend equivalents, during the thirteen weeks ended October 31, 2020 and November 2, 2019, respectively, with weighted-average grant date fair values of $9.78 and $23.27, respectively. The Company granted 118,150 and 55,679 RSUs to non-employee directors, including 16,166 and 4,023 for dividend equivalents, during the thirty-nine weeks ended October 31, 2020 and November 2, 2019, respectively, with weighted-average grant date fair values of $10.01 and $19.59, respectively. |
RETIREMENT AND OTHER BENEFIT PL
RETIREMENT AND OTHER BENEFIT PLANS | 9 Months Ended |
Oct. 31, 2020 | |
RETIREMENT AND OTHER BENEFIT PLANS | |
RETIREMENT AND OTHER BENEFIT PLANS | Note 13 Retirement and Other Benefit Plans The following table sets forth the components of net periodic benefit income for the Company, including domestic and Canadian plans: Pension Benefits Other Postretirement Benefits Thirteen Weeks Ended Thirteen Weeks Ended ($ thousands) October 31, 2020 November 2, 2019 October 31, 2020 November 2, 2019 Service cost $ 2,005 $ 1,805 $ — $ — Interest cost 2,970 3,707 10 15 Expected return on assets (8,330) (6,933) — — Amortization of: Actuarial loss (gain) 240 977 (27) (27) Prior service income (324) (372) — — Total net periodic benefit income $ (3,439) $ (816) $ (17) $ (12) Pension Benefits Other Postretirement Benefits Thirty-Nine Weeks Ended Thirty-Nine Weeks Ended ($ thousands) October 31, 2020 November 2, 2019 October 31, 2020 November 2, 2019 Service cost $ 6,412 $ 5,414 $ — $ — Interest cost 9,252 11,112 31 45 Expected return on assets (23,205) (20,792) — — Amortization of: Actuarial loss (gain) 2,506 2,929 (82) (81) Prior service income (1,031) (1,115) — — Settlement cost 222 — — — Curtailment gain (189) — — — Total net periodic benefit income $ (6,033) $ (2,452) $ (51) $ (36) The non-service cost components of net periodic benefit income are included in other income, net in the condensed consolidated statements of earnings (loss). Service cost is included in selling and administrative expenses. |
RISK MANAGEMENT AND DERIVATIVES
RISK MANAGEMENT AND DERIVATIVES | 9 Months Ended |
Oct. 31, 2020 | |
RISK MANAGEMENT AND DERIVATIVES | |
RISK MANAGEMENT AND DERIVATIVES | Note 14 Risk Management and Derivatives In the normal course of business, the Company’s financial results are impacted by currency rate movements in foreign currency denominated assets, liabilities and cash flows as it makes a portion of its purchases and sales in local currencies. The Company has established policies and business practices that are intended to mitigate a portion of the effect of these exposures. The Company uses derivative financial instruments, primarily forward contracts, to manage its currency exposures. These derivative financial instruments are viewed as risk management tools and are not used for trading or speculative purposes. Derivatives entered into by the Company are designated as cash flow hedges of forecasted foreign currency transactions. Derivative financial instruments expose the Company to credit and market risk. The market risk associated with these instruments resulting from currency exchange movements is expected to offset the market risk of the underlying transactions being hedged. The Company does not believe there is a significant risk of loss in the event of non-performance by the counterparties associated with these instruments because these transactions are executed with major international financial institutions. Credit risk is managed through the continuous monitoring of exposures to such counterparties. The Company’s hedging strategy allows for the use of forward contracts as cash flow hedging instruments, which are recorded in the Company’s condensed consolidated balance sheets at fair value. The effective portion of gains and losses resulting from changes in the fair value of these hedge instruments are deferred in accumulated other comprehensive loss and reclassified to earnings in the period that the hedged transaction is recognized in earnings. The Company had no forward contracts as of October 31, 2020. As of November 2, 2019, and February 1, 2020, the Company had forward contracts maturing through May 2020. The contract amounts in the following table represent the net notional amount of all purchase and sale contracts of a foreign currency. (U.S. $equivalent in thousands) October 31, 2020 November 2, 2019 February 1, 2020 Financial Instruments U.S. dollars (purchased by the Company’s Canadian division with Canadian dollars) $ — $ 3,235 $ 3,963 Euro — 5,763 1,251 Chinese yuan — 2,905 2,355 New Taiwanese dollars — — — Other currencies — 139 69 Total financial instruments $ — $ 12,042 $ 7,638 The classification and fair values of derivative instruments designated as hedging instruments included within the condensed consolidated balance sheets as of October 31, 2020, November 2, 2019 and February 1, 2020 are as follows: Asset Derivatives Liability Derivatives ($ thousands) Balance Sheet Location Fair Value Balance Sheet Location Fair Value Foreign Exchange Forward Contracts October 31, 2020 Prepaid expenses and other current assets — Other accrued expenses — November 2, 2019 Prepaid expenses and other current assets 17 Other accrued expenses 325 February 1, 2020 Prepaid expenses and other current assets — Other accrued expenses 103 For the thirteen and thirty-nine weeks ended October 31, 2020 and November 2, 2019, the effect of derivative instruments in cash flow hedging relationships on the condensed consolidated statements of earnings (loss) was as follows: Thirteen Weeks Ended ($ thousands) October 31, 2020 November 2, 2019 Gain (Loss) Reclassified Loss Reclassified Gain (Loss) from (Loss) Gain from Recognized Accumulated Recognized Accumulated Foreign Exchange Forward Contracts: Income Statement in OCL on OCL into in OCL on OCL into Classification Gains (Losses) – Realized Derivatives Earnings Derivatives Earnings Net sales $ — $ — $ 69 $ 2 Cost of goods sold — — 38 — Selling and administrative expenses — — (33) 2 Thirty-Nine Weeks Ended ($ thousands) October 31, 2020 November 2, 2019 Loss Loss Reclassified Reclassified Gain from (Loss) Gain from Recognized Accumulated Recognized Accumulated Foreign Exchange Forward Contracts: Income Statement in OCL on OCL into in OCL on OCL into Classification Gains (Losses) – Realized Derivatives Earnings Derivatives Earnings Net sales $ 23 $ — $ (51) $ (3) Cost of goods sold 60 — 390 (38) Selling and administrative expenses 33 (6) (147) (213) Additional information related to the Company’s derivative financial instruments are disclosed within Note 15 to the condensed consolidated financial statements. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 9 Months Ended |
Oct. 31, 2020 | |
FAIR VALUE MEASUREMENTS | |
FAIR VALUE MEASUREMENTS | Note 15 Fair Value Measurements Fair Value Hierarchy Fair value measurement disclosure requirements specify a hierarchy of valuation techniques based upon whether the inputs to those valuation techniques reflect assumptions other market participants would use based upon market data obtained from independent sources (“observable inputs”) or reflect the Company’s own assumptions of market participant valuation (“unobservable inputs”). In accordance with the fair value guidance, the inputs to valuation techniques used to measure fair value are categorized into three levels based on the reliability of the inputs as follows: ● Level 1 – Quoted prices in active markets that are unadjusted and accessible at the measurement date for identical, unrestricted assets or liabilities; ● Level 2 – Quoted prices for identical assets and liabilities in markets that are not active, quoted prices for similar assets and liabilities in active markets or financial instruments for which significant inputs are observable, either directly or indirectly; and ● Level 3 – Prices or valuations that require inputs that are both significant to the fair value measurement and unobservable. In determining fair value, the Company uses valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible. The Company also considers counterparty credit risk in its assessment of fair value. Classification of the financial or non-financial asset or liability within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement. Measurement of Fair Value The Company measures fair value as an exit price, the price to sell an asset or transfer a liability in an orderly transaction between market participants at the measurement date, using the procedures described below for all financial and non-financial assets and liabilities measured at fair value. Money Market Funds The Company has cash equivalents consisting of short-term money market funds backed by U.S. Treasury securities. The primary objective of these investing activities is to preserve the Company’s capital for the purpose of funding operations, and it does not enter into money market funds for trading or speculative purposes. The fair value is based on unadjusted quoted market prices for the funds in active markets with sufficient volume and frequency (Level 1). Non-Qualified Deferred Compensation Plan Assets and Liabilities The Company maintains a non-qualified deferred compensation plan (the “Deferred Compensation Plan”) for the benefit of certain management employees. The investment funds offered to the participants generally correspond to the funds offered in the Company’s 401(k) plan, and the account balance fluctuates with the investment returns on those funds. The Deferred Compensation Plan permits the deferral of up to 50% of base salary and 100% of compensation received under the Company’s annual incentive plan. The deferrals are held in a separate trust, which has been established by the Company to administer the Deferred Compensation Plan. The assets of the trust are subject to the claims of the Company’s creditors in the event that the Company becomes insolvent. Consequently, the trust qualifies as a grantor trust for income tax purposes (i.e., a “Rabbi Trust”). The liabilities of the Deferred Compensation Plan are presented in other accrued expenses and the assets held by the trust are classified within prepaid expenses and other current assets in the accompanying condensed consolidated balance sheets. Changes in deferred compensation plan assets and liabilities are charged to selling and administrative expenses. The fair value is based on unadjusted quoted market prices for the funds in active markets with sufficient volume and frequency (Level 1). Deferred Compensation Plan for Non-Employee Directors Non-employee directors are eligible to participate in a deferred compensation plan with deferred amounts valued as if invested in the Company’s common stock through the use of phantom stock units (“PSUs”). Under the plan, each participating director’s account is credited with the number of PSUs equal to the number of shares of the Company’s common stock that the participant could purchase or receive with the amount of the deferred compensation, based upon the average of the high and low prices of the Company’s common stock on the last trading day of the fiscal quarter when the cash compensation was earned. Dividend equivalents are paid on PSUs at the same rate as dividends on the Company’s common stock and are re-invested in additional PSUs at the next fiscal quarter-end. The liabilities of the plan are based on the fair value of the outstanding PSUs and are presented in other accrued expenses (current portion) or other liabilities in the accompanying condensed consolidated balance sheets. Gains and losses resulting from changes in the fair value of the PSUs are presented in selling and administrative expenses in the Company’s condensed consolidated statements of earnings (loss). The fair value of each PSU is based on an unadjusted quoted market price for the Company’s common stock in an active market with sufficient volume and frequency on each measurement date (Level 1). Restricted Stock Units for Non-Employee Directors Under the Company’s incentive compensation plans, cash-equivalent restricted stock units (“RSUs”) of the Company were previously granted at no cost to non-employee directors. These cash-equivalent RSUs are subject to a vesting requirement (usually one year), earn dividend-equivalent units, and are settled in cash on the date the director terminates service or such earlier date as a director may elect, subject to restrictions, based on the then current fair value of the Company’s common stock. The fair value of each cash-equivalent RSU is based on an unadjusted quoted market price for the Company’s common stock in an active market with sufficient volume and frequency on each measurement date (Level 1). Additional information related to RSUs for non-employee directors is disclosed in Note 12 to the condensed consolidated financial statements. Derivative Financial Instruments The Company uses derivative financial instruments, primarily foreign exchange contracts, to reduce its exposure to market risks from changes in foreign exchange rates. These foreign exchange contracts are measured at fair value using quoted forward foreign exchange prices from counterparties corroborated by market-based pricing (Level 2). Additional information related to the Company’s derivative financial instruments is disclosed in Note 14 to the condensed consolidated financial statements. Mandatory Purchase Obligation The Company recorded a mandatory purchase obligation of the noncontrolling interest in conjunction with the acquisition of Blowfish Malibu in July of 2018. The fair value of the mandatory purchase obligation is based on the earnings formula specified in the purchase agreement (Level 3). Accretion of the mandatory purchase obligation and fair value adjustments are recorded as interest expense. During the thirteen and thirty-nine weeks ended October 31, 2020, the Company recorded fair value adjustments of $5.1 million and $14.9 million, respectively. Accretion and remeasurement adjustments of $3.9 million and $4.4 million were recorded during the thirteen and thirty-nine weeks ended November 2, 2019, respectively. The earnings projections and discount rate utilized in the estimate of the fair value of the mandatory purchase obligation require management judgment and are the assumptions to which the fair value calculation is the most sensitive. Refer to further discussion of the mandatory purchase obligation in Note 5 to the condensed consolidated financial statements. The following table presents the Company’s assets and liabilities that are measured at fair value on a recurring basis at October 31, 2020, November 2, 2019 and February 1, 2020. Fair Value Measurements ($thousands) Total Level 1 Level 2 Level 3 Asset (Liability) October 31, 2020: Cash equivalents – money market funds $ 82,500 $ 82,500 $ — $ — Non-qualified deferred compensation plan assets 7,741 7,741 — — Non-qualified deferred compensation plan liabilities (7,741) (7,741) — — Deferred compensation plan liabilities for non-employee directors (813) (813) — — Restricted stock units for non-employee directors (840) (840) — — Mandatory purchase obligation - Blowfish Malibu (30,146) — — (30,146) November 2, 2019: Non-qualified deferred compensation plan assets $ 8,117 $ 8,117 $ — $ — Non-qualified deferred compensation plan liabilities (8,117) (8,117) — — Deferred compensation plan liabilities for non-employee directors (1,879) (1,879) — — Restricted stock units for non-employee directors (3,282) (3,282) — — Derivative financial instruments, net (308) — (308) — Mandatory purchase obligation - Blowfish Malibu (13,655) — — (13,655) February 1, 2020: Cash equivalents – money market funds $ 18,001 $ 18,001 $ — $ — Non-qualified deferred compensation plan assets 8,004 8,004 — — Non-qualified deferred compensation plan liabilities (8,004) (8,004) — — Deferred compensation plan liabilities for non-employee directors (1,536) (1,536) — — Restricted stock units for non-employee directors (2,572) (2,572) — — Derivative financial instruments, net (103) — (103) — Mandatory purchase obligation - Blowfish Malibu (15,200) — — (15,200) Impairment Charges The Company assesses the impairment of long-lived assets whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Factors the Company considers important that could trigger an impairment review include underperformance relative to historical or projected future operating results, a significant change in the manner of the use of the asset, or a negative industry or economic trend. When the Company determines that the carrying value of long-lived assets may not be recoverable based upon the existence of one or more of the aforementioned factors, impairment is measured based on a projected discounted cash flow method. Certain factors, such as estimated store sales and expenses, used for this nonrecurring fair value measurement are considered Level 3 inputs as defined by FASB ASC Topic 820, Fair Value Measurement Thirteen Weeks Ended Thirty-Nine Weeks Ended ($thousands) October 31, 2020 November 2, 2019 October 31, 2020 November 2, 2019 Impairment Charges Famous Footwear $ — $ 769 $ 14,896 $ 1,509 Brand Portfolio 398 1,382 20,724 3,596 Total impairment charges $ 398 $ 2,151 $ 35,620 $ 5,105 Fair Value of the Company’s Other Financial Instruments The fair values of cash and cash equivalents (excluding money market funds discussed above), receivables and trade accounts payable approximate their carrying values due to the short-term nature of these instruments. The carrying amounts and fair values of the Company’s other financial instruments subject to fair value disclosures are as follows: October 31, 2020 November 2, 2019 February 1, 2020 Carrying Carrying Carrying ($thousands) Value (1) Fair Value Value (1) Fair Value Value (1) Fair Value Borrowings under revolving credit agreement $ 300,000 $ 300,000 $ 295,000 $ 295,000 $ 275,000 $ 275,000 Long-term debt 200,000 188,750 200,000 206,200 200,000 205,000 Total debt $ 500,000 $ 488,750 $ 495,000 $ 501,200 $ 475,000 $ 480,000 (1) Excludes unamortized debt issuance costs and debt discount The fair value of borrowings under the revolving credit agreement approximates its carrying value due to its short-term nature (Level 1). The fair value of the Company’s long-term debt was based upon quoted prices in an inactive market as of the end of the respective periods (Level 2). |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Oct. 31, 2020 | |
INCOME TAXES | |
INCOME TAXES | Note 16 Income Taxes The Company’s consolidated effective tax rate can vary considerably from period to period, depending on a number of factors. The Company’s consolidated rate was (1.9%) for the thirteen weeks ended October 31, 2020, compared to 21.9% for the thirteen weeks ended November 2, 2019. The lower tax rate for the thirteen weeks ended October 31, 2020, primarily reflects the impact of a higher anticipated full year tax benefit, driven by the CARES Act, which permits the Company to carry back 2020 losses to years with a higher federal tax rate, and the mix of projected earnings between international and domestic jurisdictions. For the thirty-nine weeks ended October 31, 2020, the Company’s consolidated effective tax rate was 19.8%, compared to 23.1% for thirty-nine weeks ended November 2, 2019. The Company’s effective tax rate was impacted by several discrete tax items for the thirty-nine weeks ended October 31, 2020, including the non-deductibility of a portion of the Company’s intangible asset impairment charges, the provision of a valuation allowance related to certain state and Canada deferred tax assets and the incremental tax provision related to share-based compensation. As discussed above, the Company’s tax benefit also includes the favorable impact of the CARES Act, which permits the Company to carry back 2020 losses to years with a higher federal tax rate. If these discrete taxes had not been recognized during the thirty-nine weeks ended October 31, 2020, the Company’s effective tax rate would have been 23.5%. During the nine months ended November 2, 2019, the Company recognized an immaterial amount of discrete tax items. As of October 31, 2020, no deferred taxes have been provided on the accumulated unremitted earnings of the Company’s foreign subsidiaries that are not subject to United States income tax, beyond the amounts recorded for the one-time transition tax for the mandatory deemed repatriation of cumulative foreign earnings, as required by the Tax Cuts and Jobs Act. The Company periodically evaluates its foreign investment opportunities and plans, as well as its foreign working capital needs, to determine the level of investment required and, accordingly, determines the level of foreign earnings that is considered indefinitely reinvested. Based upon that evaluation, earnings of the Company’s foreign subsidiaries that are not otherwise subject to United States taxation are considered to be indefinitely reinvested, and accordingly, deferred taxes have not been provided. If changes occur in future investment opportunities and plans, those changes will be reflected when known and may result in providing residual United States deferred taxes on unremitted foreign earnings. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Oct. 31, 2020 | |
COMMITMENTS AND CONTINGENCIES | |
COMMITMENTS AND CONTINGENCIES | Note 17 Commitments and Contingencies Environmental Remediation Prior operations included numerous manufacturing and other facilities for which the Company may have responsibility under various environmental laws for the remediation of conditions that may be identified in the future. The Company is involved in environmental remediation and ongoing compliance activities at several sites and has been notified that it is or may be a potentially responsible party at several other sites. Redfield The Company is remediating, under the oversight of Colorado authorities, the groundwater and indoor air at its owned facility in Colorado (the “Redfield site” or, when referring to remediation activities at or under the facility, the “on-site remediation”) and residential neighborhoods adjacent to and near the property (the “off-site remediation”) that have been affected by solvents previously used at the facility. The on-site remediation calls for the operation of a pump and treat system (which prevents migration of contaminated groundwater off the property) as the final remedy for the site, subject to monitoring and periodic review of the on-site conditions and other remedial technologies that may be developed in the future. In 2016, the Company submitted a revised plan to address on-site conditions, including direct treatment of source areas, and received approval from the oversight authorities to begin implementing the revised plan. As the treatment of the on-site source areas progresses, the Company expects to convert the pump and treat system to a passive treatment barrier system. Off-site groundwater concentrations have been reducing over time since installation of the pump and treat system in 2000 and injection of clean water beginning in 2003. However, localized areas of contaminated bedrock just beyond the property line continue to impact off-site groundwater. The modified work plan for addressing this condition includes converting the off-site bioremediation system into a monitoring well network and employing different remediation methods in these recalcitrant areas. In accordance with the work plan, a pilot test was conducted of certain groundwater remediation methods and the results of that test were used to develop more detailed plans for remedial activities in the off-site areas, which were approved by the authorities and are being implemented in a phased manner. The results of groundwater monitoring are being used to evaluate the effectiveness of these activities. The Company continues to implement the expanded remedy work plan that was approved by the oversight authorities in 2015. Based on the progress of the direct remedial action of on-site conditions, the Company has submitted a request to the oversight authorities for permission to convert the perimeter pump and treat active remediation system to a passive one. During the fourth quarter of 2019, a final response was received from the oversight authorities, which allows the Company to proceed with implementation of the revised plan. The cumulative expenditures for both on-site and off-site remediation through October 31, 2020 were $31.8 million. The Company has recovered a portion of these expenditures from insurers and other third parties. The reserve for the anticipated future remediation activities at October 31, 2020 is $9.7 million, of which $8.9 million is recorded within other liabilities and $0.8 million is recorded within other accrued expenses. Of the total $9.7 million reserve, $5.0 million is for off-site remediation and $4.7 million is for on-site remediation. The liability for the on-site remediation was discounted at 4.8%. On an undiscounted basis, the on-site remediation liability would be $13.9 million as of October 31, 2020. The Company expects to spend approximately $0.6 million in 2 0 20 Other Various federal and state authorities have identified the Company as a potentially responsible party for remediation at certain other sites. However, the Company does not currently believe that its liability for such sites, if any, would be material. The Company continues to evaluate its remediation plans in conjunction with its environmental consultants and records its best estimate of remediation liabilities. However, future actions and the associated costs are subject to oversight and approval of various governmental authorities. Accordingly, the ultimate costs may vary, and it is possible costs may exceed the recorded amounts. Litigation The Company is involved in legal proceedings and litigation arising in the ordinary course of business. In the opinion of management, the outcome of such ordinary course of business proceedings and litigation currently pending is not expected to have a material adverse effect on the Company’s results of operations or financial position. Legal costs associated with litigation are generally expensed as incurred. |
SUBSEQUENT EVENT
SUBSEQUENT EVENT | 9 Months Ended |
Oct. 31, 2020 | |
SUBSEQUENT EVENT | |
SUBSEQUENT EVENT | Note 18 Subsequent Event On November 19, 2020, the Company announced that, with the exception of a limited number of flagship locations, it plans to close all Naturalizer retail stores in the United States and Canada by the end of fiscal 2020. In addition to the store closures, the Company anticipates aligning the back-office infrastructure to the reduced store footprint, shifting talent to amplify the digital presence, and reallocating capital to further enhance the Company’s ecommerce platform and capabilities. The Company expects pre-tax charges in the fourth quarter of 2020 of between $20 million and $25 million. When |
IMPACT OF NEW ACCOUNTING PRON_2
IMPACT OF NEW ACCOUNTING PRONOUNCEMENTS (Tables) | 9 Months Ended |
Oct. 31, 2020 | |
IMPACT OF NEW ACCOUNTING PRONOUNCEMENTS | |
Schedule of allowance for expected credit losses | ($ thousands) Balance at February 1, 2020 $ 1,813 Adjustment upon adoption of ASU 2016-13 2,521 Provision for expected credit losses 10,663 Uncollectible accounts written off, net of recoveries 221 Balance at October 31, 2020 $ 15,218 |
REVENUES (Tables)
REVENUES (Tables) | 9 Months Ended |
Oct. 31, 2020 | |
REVENUES | |
Schedule of disaggregation of revenue | Thirteen Weeks Ended October 31, 2020 Eliminations and ($ thousands) Famous Footwear Brand Portfolio Other Total Retail stores (2) $ 325,501 $ 14,291 $ — $ 339,792 Landed wholesale - e-commerce (1) — 42,001 — 42,001 Landed wholesale - e-commerce - drop ship (1) (2) — 21,256 — 21,256 Landed wholesale - other — 136,627 (11,813) 124,814 First-cost wholesale — 15,368 — 15,368 First-cost wholesale - e-commerce (1) (2) — 99 — 99 E-commerce - Company websites (1) (2) 66,058 35,100 — 101,158 Licensing and royalty — 2,809 — 2,809 Other (3) 147 36 — 183 Net sales $ 391,706 $ 267,587 $ (11,813) $ 647,480 Thirteen Weeks Ended November 2, 2019 Eliminations and ($ thousands) Famous Footwear Brand Portfolio Other Total Retail stores (2) $ 401,943 $ 40,621 $ — $ 442,564 Landed wholesale - e-commerce (1) — 27,304 — 27,304 Landed wholesale - e-commerce - drop ship (1) (2) — 58,653 — 58,653 Landed wholesale - other — 177,146 (14,071) 163,075 First-cost wholesale — 16,124 — 16,124 First-cost wholesale - e-commerce (1) (2) — 354 — 354 E-commerce - Company websites (1) (2) 44,489 36,692 — 81,181 Licensing and royalty — 2,908 — 2,908 Other (3) 151 61 — 212 Net sales $ 446,583 $ 359,863 $ (14,071) $ 792,375 Thirty-Nine Weeks Ended October 31, 2020 Eliminations and ($ thousands) Famous Footwear Brand Portfolio Other Total Retail stores (2) $ 712,761 $ 33,173 $ — $ 745,934 Landed wholesale - e-commerce (1) — 91,477 — 91,477 Landed wholesale - e-commerce - drop ship (1) (2) — 61,235 — 61,235 Landed wholesale - other — 327,322 (39,229) 288,093 First-cost wholesale — 39,139 — 39,139 First-cost wholesale - e-commerce (1) (2) — 601 — 601 E-commerce - Company websites (1) (2) 203,888 108,926 — 312,814 Licensing and royalty — 6,463 — 6,463 Other (3) 244 111 — 355 Net sales $ 916,893 $ 668,447 $ (39,229) $ 1,546,111 Thirty-Nine Weeks Ended November 2, 2019 Eliminations and ($ thousands) Famous Footwear Brand Portfolio Other Total Retail stores (2) $ 1,108,200 $ 115,819 $ — $ 1,224,019 Landed wholesale - e-commerce (1) — 64,182 — 64,182 Landed wholesale - e-commerce - drop ship (1) (2) — 148,745 — 148,745 Landed wholesale - other — 549,321 (56,463) 492,858 First-cost wholesale — 66,826 — 66,826 First-cost wholesale - e-commerce (1) (2) — 1,528 — 1,528 E-commerce - Company websites (1) (2) 109,954 102,637 — 212,591 Licensing and royalty — 11,234 — 11,234 Other (3) 435 196 — 631 Net sales $ 1,218,589 $ 1,060,488 $ (56,463) $ 2,222,614 (1) Collectively referred to as "e-commerce" below (2) Collectively referred to as “Direct-to-consumer” (3) Includes breakage revenue from unredeemed gift cards |
Schedule of contract balances from contract with customers | ($ thousands) October 31, 2020 November 2, 2019 February 1, 2020 Customer allowances and discounts $ 22,182 $ 25,762 $ 26,200 Loyalty programs liability 14,634 17,274 16,405 Returns reserve 14,889 15,040 14,033 Gift card liability 4,909 4,794 5,742 |
EARNINGS (LOSS) PER SHARE (Tabl
EARNINGS (LOSS) PER SHARE (Tables) | 9 Months Ended |
Oct. 31, 2020 | |
EARNINGS (LOSS) PER SHARE | |
Schedule of computation of basic and diluted earnings (loss) per common share | Thirteen Weeks Ended Thirty-Nine Weeks Ended ($ thousands, except per share amounts) October 31, 2020 November 2, 2019 October 31, 2020 November 2, 2019 NUMERATOR Net earnings (loss) $ 14,926 $ 27,761 $ (361,915) $ 62,073 Net (earnings) loss attributable to noncontrolling interests (509) 226 (223) 338 Net earnings allocated to participating securities (512) (946) — (2,042) Net earnings (loss) attributable to Caleres, Inc. after allocation of earnings to participating securities $ 13,905 $ 27,041 $ (362,138) $ 60,369 DENOMINATOR Denominator for basic earnings (loss) per common share attributable to Caleres, Inc. shareholders 36,554 39,258 37,439 39,983 Dilutive effect of share-based awards 176 55 — 57 Denominator for diluted earnings (loss) per common share attributable to Caleres, Inc. shareholders 36,730 39,313 37,439 40,040 Basic earnings (loss) per common share attributable to Caleres, Inc. shareholders $ 0.38 $ 0.69 $ (9.67) $ 1.51 Diluted earnings (loss) per common share attributable to Caleres, Inc. shareholders $ 0.38 $ 0.69 $ (9.67) $ 1.51 |
BUSINESS SEGMENT INFORMATION (T
BUSINESS SEGMENT INFORMATION (Tables) | 9 Months Ended |
Oct. 31, 2020 | |
BUSINESS SEGMENT INFORMATION | |
Summary of certain key financial measures of business segments | Famous Brand Eliminations ($ thousands) Footwear Portfolio and Other Total Thirteen Weeks Ended October 31, 2020 Net sales $ 391,706 $ 267,587 $ (11,813) $ 647,480 Intersegment sales (1) — 11,813 — 11,813 Operating earnings (loss) 27,845 7,304 (15,078) 20,071 Segment assets 837,228 924,976 264,856 2,027,060 Thirteen Weeks Ended November 2, 2019 Net sales $ 446,583 $ 359,863 $ (14,071) $ 792,375 Intersegment sales (1) — 14,071 — 14,071 Operating earnings (loss) 27,681 19,398 (3,608) 43,471 Segment assets 973,272 1,360,445 137,493 2,471,210 Thirty-Nine Weeks Ended October 31, 2020 Net sales $ 916,893 $ 668,447 $ (39,229) $ 1,546,111 Intersegment sales (1) — 39,229 — 39,229 Operating loss (38,651) (352,556) (39,072) (430,279) Thirty-Nine Weeks Ended November 2, 2019 Net sales $ 1,218,589 $ 1,060,488 $ (56,463) $ 2,222,614 Intersegment sales (1) — 56,463 — 56,463 Operating earnings (loss) 70,036 46,225 (18,117) 98,144 (1) Included in net sales in the Brand Portfolio segment and eliminated in the Eliminations and Other category |
Reconciliation of operating earnings (loss) to earnings (loss) before income taxes | Thirteen Weeks Ended Thirty-Nine Weeks Ended October 31, November 2, October 31, November 2, ($ thousands) 2020 2019 2020 2019 Operating earnings (loss) $ 20,071 $ 43,471 $ (430,279) $ 98,144 Interest expense, net (10,881) (10,559) (33,747) (25,288) Other income, net 5,461 2,633 12,718 7,902 Earnings (loss) before income taxes $ 14,651 $ 35,545 $ (451,308) $ 80,758 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 9 Months Ended |
Oct. 31, 2020 | |
INVENTORIES | |
Schedule of net inventory balances | ($thousands) October 31, 2020 November 2, 2019 February 1, 2020 Raw materials $ 14,907 $ 19,005 $ 18,455 Work-in-process 293 422 454 Finished goods 492,165 625,219 599,497 Inventories, net $ 507,365 $ 644,646 $ 618,406 |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS (Tables) | 9 Months Ended |
Oct. 31, 2020 | |
GOODWILL AND INTANGIBLE ASSETS | |
Schedule of goodwill and intangible assets | ($thousands) October 31, 2020 November 2, 2019 February 1, 2020 Intangible Assets Famous Footwear $ 2,800 $ 2,800 $ 2,800 Brand Portfolio 365,888 388,288 388,288 Total intangible assets 368,688 391,088 391,088 Accumulated amortization (106,570) (93,518) (96,784) Total intangible assets, net 262,118 297,570 294,304 Goodwill Brand Portfolio 4,956 245,275 245,275 Total goodwill 4,956 245,275 245,275 Goodwill and intangible assets, net $ 267,074 $ 542,845 $ 539,579 |
Schedule of finite-lived and indefinite lived intangible assets | ($thousands) October 31, 2020 Estimated Useful Lives Accumulated (In Years) Cost Basis Amortization Impairment Net Carrying Value Trademarks 15 - 40 $ 288,788 $ 99,376 $ — $ 189,412 Trademarks Indefinite 58,100 (1) — 22,400 35,700 Customer relationships 15 - 16 44,200 7,194 — 37,006 $ 391,088 $ 106,570 $ 22,400 $ 262,118 November 2, 2019 Estimated Useful Lives Accumulated (In Years) Cost Basis Amortization Impairment Net Carrying Value Trademarks 15 40 $ 288,788 $ 89,360 $ — $ 199,428 Trademarks Indefinite 58,100 (1) — — 58,100 Customer relationships 15 16 44,200 4,158 — 40,042 $ 391,088 $ 93,518 $ — $ 297,570 February 1, 2020 Estimated Useful Lives Accumulated (In Years) Cost Basis Amortization Impairment Net Carrying Value Trademarks 15 40 $ 288,788 $ 91,827 $ — $ 196,961 Trademarks Indefinite 58,100 (1) — — 58,100 Customer relationships 15 16 44,200 4,957 — 39,243 $ 391,088 $ 96,784 $ — $ 294,304 (1) Cost basis for indefinite-lived trademarks has been reduced by $60.0 million in impairment charges recognized in 2018 related to the Allen Edmonds tradename. |
LEASES (Tables)
LEASES (Tables) | 9 Months Ended |
Oct. 31, 2020 | |
LEASES | |
Schedule of components of lease expense | Thirteen Weeks Ended ($thousands) October 31, 2020 November 2, 2019 Operating lease expense $ 38,568 $ 47,068 Variable lease expense 12,739 11,794 Short-term lease expense 1,775 577 Sublease income (29) (73) Total lease expense $ 53,053 $ 59,366 Thirty-Nine Weeks Ended ($thousands) October 31, 2020 November 2, 2019 Operating lease expense $ 124,906 $ 139,380 Variable lease expense 36,090 35,277 Short-term lease expense 3,872 2,654 Sublease income (76) (220) Total lease expense $ 164,792 $ 177,091 |
Schedule of supplemental cash flow information related to leases | Thirty-Nine Weeks Ended ($thousands) October 31, 2020 November 2, 2019 Cash paid for lease liabilities $ 99,517 $ 136,497 Cash received from sublease income 76 220 |
SHAREHOLDERS' EQUITY (Tables)
SHAREHOLDERS' EQUITY (Tables) | 9 Months Ended |
Oct. 31, 2020 | |
SHAREHOLDERS' EQUITY | |
Schedule of changes in accumulated other comprehensive income (loss) | Pension and Derivative Other Financial Accumulated Foreign Postretirement Instrument Other Currency Transactions Transactions Comprehensive ($thousands) Translation (1) (2) (Loss) Income Balance at August 1, 2020 $ (1,390) $ (30,047) $ — $ (31,437) Other comprehensive income before reclassifications 320 — — 320 Reclassifications: Amounts reclassified from accumulated other comprehensive loss — (111) — (111) Tax provision (3) — 44 — 44 Net reclassifications — (67) — (67) Other comprehensive income 320 (67) — 253 Balance at October 31, 2020 $ (1,070) $ (30,114) $ — $ (31,184) Balance at August 3, 2019 $ (896) $ (30,199) $ (310) $ (31,405) Other comprehensive income before reclassifications 595 — 66 661 Reclassifications: Amounts reclassified from accumulated other comprehensive loss — 578 (4) 574 Tax (benefit) provision — (149) 1 (148) Net reclassifications — 429 (3) 426 Other comprehensive income 595 429 63 1,087 Balance at November 2, 2019 $ (301) $ (29,770) $ (247) $ (30,318) Balance at February 1, 2020 $ (580) $ (31,171) $ (92) $ (31,843) Other comprehensive (loss) income before reclassifications (490) — 87 (403) Reclassifications: — Amounts reclassified from accumulated other comprehensive loss — 1,393 6 1,399 Tax benefit (3) — (336) (1) (337) Net reclassifications — 1,057 5 1,062 Other comprehensive (loss) income (490) 1,057 92 659 Balance at October 31, 2020 $ (1,070) $ (30,114) $ — $ (31,184) Balance at February 2, 2019 $ 62 $ (31,055) $ (608) $ (31,601) Other comprehensive (loss) income before reclassifications (363) — 160 (203) Reclassifications: Amounts reclassified from accumulated other comprehensive loss — 1,733 254 1,987 Tax benefit — (448) (53) (501) Net reclassifications — 1,285 201 1,486 Other comprehensive (loss) income (363) 1,285 361 1,283 Balance at November 2, 2019 $ (301) $ (29,770) $ (247) $ (30,318) (1) Amounts reclassified are included in other income, net. Refer to Note 13 to the condensed consolidated financial statements for additional information related to pension and other postretirement benefits. (2) Amounts reclassified are included in net sales, costs of goods sold and selling and administrative expenses. Refer to Note 14 and Note 15 to the condensed consolidated financial statements for additional information related to derivative financial instruments. (3) Includes approximately $0.5 million of expense related to a valuation allowance on net deferred taxes, including those related to other comprehensive income, for the Company’s Canadian subsidiary. |
SHARE-BASED COMPENSATION (Table
SHARE-BASED COMPENSATION (Tables) | 9 Months Ended |
Oct. 31, 2020 | |
SHARE-BASED COMPENSATION | |
Summary of restricted stock activity | Thirteen Weeks Ended Thirteen Weeks Ended October 31, 2020 November 2, 2019 Weighted- Weighted- Total Number Average Total Number Average of Restricted Grant Date of Restricted Grant Date Shares Fair Value Shares Fair Value August 1, 2020 1,360,602 $ 17.81 August 3, 2019 1,433,470 $ 27.09 Granted 35,000 9.73 Granted 11,000 22.44 Forfeited (875) 14.51 Forfeited (78,000) 30.75 Vested (6,500) 25.18 Vested (10,000) 32.85 October 31, 2020 1,388,227 $ 17.57 November 2, 2019 1,356,470 $ 26.80 Thirty-Nine Weeks Ended Thirty-Nine Weeks Ended October 31, 2020 November 2, 2019 Weighted- Weighted- Total Number Average Total Number Average of Restricted Grant Date of Restricted Grant Date Shares Fair Value Shares Fair Value February 1, 2020 1,271,795 $ 26.77 February 2, 2019 1,249,223 $ 29.17 Granted 598,431 6.14 Granted 461,234 22.94 Forfeited (68,787) 23.11 Forfeited (135,425) 29.91 Vested (413,212) 28.23 Vested (218,562) 30.25 October 31, 2020 1,388,227 $ 17.57 November 2, 2019 1,356,470 $ 26.80 |
RETIREMENT AND OTHER BENEFIT _2
RETIREMENT AND OTHER BENEFIT PLANS (Tables) | 9 Months Ended |
Oct. 31, 2020 | |
RETIREMENT AND OTHER BENEFIT PLANS | |
Schedule of components of net periodic benefit income | Pension Benefits Other Postretirement Benefits Thirteen Weeks Ended Thirteen Weeks Ended ($ thousands) October 31, 2020 November 2, 2019 October 31, 2020 November 2, 2019 Service cost $ 2,005 $ 1,805 $ — $ — Interest cost 2,970 3,707 10 15 Expected return on assets (8,330) (6,933) — — Amortization of: Actuarial loss (gain) 240 977 (27) (27) Prior service income (324) (372) — — Total net periodic benefit income $ (3,439) $ (816) $ (17) $ (12) Pension Benefits Other Postretirement Benefits Thirty-Nine Weeks Ended Thirty-Nine Weeks Ended ($ thousands) October 31, 2020 November 2, 2019 October 31, 2020 November 2, 2019 Service cost $ 6,412 $ 5,414 $ — $ — Interest cost 9,252 11,112 31 45 Expected return on assets (23,205) (20,792) — — Amortization of: Actuarial loss (gain) 2,506 2,929 (82) (81) Prior service income (1,031) (1,115) — — Settlement cost 222 — — — Curtailment gain (189) — — — Total net periodic benefit income $ (6,033) $ (2,452) $ (51) $ (36) |
RISK MANAGEMENT AND DERIVATIV_2
RISK MANAGEMENT AND DERIVATIVES (Tables) | 9 Months Ended |
Oct. 31, 2020 | |
RISK MANAGEMENT AND DERIVATIVES | |
Schedule of net notional amount of all purchase and sale contracts of a foreign currency | (U.S. $equivalent in thousands) October 31, 2020 November 2, 2019 February 1, 2020 Financial Instruments U.S. dollars (purchased by the Company’s Canadian division with Canadian dollars) $ — $ 3,235 $ 3,963 Euro — 5,763 1,251 Chinese yuan — 2,905 2,355 New Taiwanese dollars — — — Other currencies — 139 69 Total financial instruments $ — $ 12,042 $ 7,638 |
Schedule of classification and fair values of derivative instruments within condensed consolidated balance sheets | Asset Derivatives Liability Derivatives ($ thousands) Balance Sheet Location Fair Value Balance Sheet Location Fair Value Foreign Exchange Forward Contracts October 31, 2020 Prepaid expenses and other current assets — Other accrued expenses — November 2, 2019 Prepaid expenses and other current assets 17 Other accrued expenses 325 February 1, 2020 Prepaid expenses and other current assets — Other accrued expenses 103 |
Schedule of effect of derivative instruments in cash flow hedging relationships on condensed consolidated statements of earnings (loss) | Thirteen Weeks Ended ($ thousands) October 31, 2020 November 2, 2019 Gain (Loss) Reclassified Loss Reclassified Gain (Loss) from (Loss) Gain from Recognized Accumulated Recognized Accumulated Foreign Exchange Forward Contracts: Income Statement in OCL on OCL into in OCL on OCL into Classification Gains (Losses) – Realized Derivatives Earnings Derivatives Earnings Net sales $ — $ — $ 69 $ 2 Cost of goods sold — — 38 — Selling and administrative expenses — — (33) 2 Thirty-Nine Weeks Ended ($ thousands) October 31, 2020 November 2, 2019 Loss Loss Reclassified Reclassified Gain from (Loss) Gain from Recognized Accumulated Recognized Accumulated Foreign Exchange Forward Contracts: Income Statement in OCL on OCL into in OCL on OCL into Classification Gains (Losses) – Realized Derivatives Earnings Derivatives Earnings Net sales $ 23 $ — $ (51) $ (3) Cost of goods sold 60 — 390 (38) Selling and administrative expenses 33 (6) (147) (213) |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 9 Months Ended |
Oct. 31, 2020 | |
FAIR VALUE MEASUREMENTS | |
Schedule of assets and liabilities that are measured at fair value on a recurring basis | Fair Value Measurements ($thousands) Total Level 1 Level 2 Level 3 Asset (Liability) October 31, 2020: Cash equivalents – money market funds $ 82,500 $ 82,500 $ — $ — Non-qualified deferred compensation plan assets 7,741 7,741 — — Non-qualified deferred compensation plan liabilities (7,741) (7,741) — — Deferred compensation plan liabilities for non-employee directors (813) (813) — — Restricted stock units for non-employee directors (840) (840) — — Mandatory purchase obligation - Blowfish Malibu (30,146) — — (30,146) November 2, 2019: Non-qualified deferred compensation plan assets $ 8,117 $ 8,117 $ — $ — Non-qualified deferred compensation plan liabilities (8,117) (8,117) — — Deferred compensation plan liabilities for non-employee directors (1,879) (1,879) — — Restricted stock units for non-employee directors (3,282) (3,282) — — Derivative financial instruments, net (308) — (308) — Mandatory purchase obligation - Blowfish Malibu (13,655) — — (13,655) February 1, 2020: Cash equivalents – money market funds $ 18,001 $ 18,001 $ — $ — Non-qualified deferred compensation plan assets 8,004 8,004 — — Non-qualified deferred compensation plan liabilities (8,004) (8,004) — — Deferred compensation plan liabilities for non-employee directors (1,536) (1,536) — — Restricted stock units for non-employee directors (2,572) (2,572) — — Derivative financial instruments, net (103) — (103) — Mandatory purchase obligation - Blowfish Malibu (15,200) — — (15,200) |
Schedule of impairment of long-lived assets held and used by asset | Thirteen Weeks Ended Thirty-Nine Weeks Ended ($thousands) October 31, 2020 November 2, 2019 October 31, 2020 November 2, 2019 Impairment Charges Famous Footwear $ — $ 769 $ 14,896 $ 1,509 Brand Portfolio 398 1,382 20,724 3,596 Total impairment charges $ 398 $ 2,151 $ 35,620 $ 5,105 |
Schedule of carrying amounts and fair values of other financial instruments | October 31, 2020 November 2, 2019 February 1, 2020 Carrying Carrying Carrying ($thousands) Value (1) Fair Value Value (1) Fair Value Value (1) Fair Value Borrowings under revolving credit agreement $ 300,000 $ 300,000 $ 295,000 $ 295,000 $ 275,000 $ 275,000 Long-term debt 200,000 188,750 200,000 206,200 200,000 205,000 Total debt $ 500,000 $ 488,750 $ 495,000 $ 501,200 $ 475,000 $ 480,000 (1) Excludes unamortized debt issuance costs and debt discount |
BASIS OF PRESENTATION (Details)
BASIS OF PRESENTATION (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Oct. 31, 2020 | Oct. 31, 2020 | Nov. 02, 2019 | Mar. 31, 2020 | Feb. 01, 2020 | |
Basis of Presentation | |||||
Repayments of Lines of Credit | $ 315,500 | $ 277,000 | |||
Income Tax Benefit, CARES Act | 6,600 | ||||
Capital Contributions | 1,500 | 1,500 | |||
Other Noncurrent Liabilities | |||||
Basis of Presentation | |||||
Deferred employer social security payroll taxes, CARES Act | $ 7,000 | 7,000 | |||
Brand Investment Holding Ltd | |||||
Basis of Presentation | |||||
Capital Contributions | 1,500 | 1,500 | |||
CLT Brand Solutions | |||||
Basis of Presentation | |||||
Percentage of joint venture | 50.00% | ||||
Capital Contributions | $ 3,000 | $ 3,000 | |||
Revolving Credit Facility | |||||
Basis of Presentation | |||||
Long-term Line of Credit, Total | $ 440,000 | ||||
Repayments of Lines of Credit | $ 138,500 |
IMPACT OF NEW ACCOUNTING PRON_3
IMPACT OF NEW ACCOUNTING PRONOUNCEMENTS (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Oct. 31, 2020 | Oct. 31, 2020 | Nov. 02, 2019 | Feb. 02, 2020 | Feb. 01, 2020 | |
Impact of New Accounting Pronouncements | |||||
Retained Earnings (Accumulated Deficit), Ending Balance | $ 128,149 | $ 128,149 | $ 528,538 | $ 523,900 | |
Accounts Receivable, Credit Loss Expense (Reversal) | 10,663 | $ 728 | |||
Selling and Administrative Expenses | |||||
Impact of New Accounting Pronouncements | |||||
Variable Lease Reversal of Cost, Rent Abatement | $ 1,700 | $ 3,700 | |||
Accounting Standards Update 2016-13 | Cumulative Effect, Period of Adoption, Adjustment | |||||
Impact of New Accounting Pronouncements | |||||
Retained Earnings (Accumulated Deficit), Ending Balance | $ 2,100 | ||||
Retained Earnings, (Accumulated Deficit), Tax | $ 400 |
IMPACT OF NEW ACCOUNTING PRON_4
IMPACT OF NEW ACCOUNTING PRONOUNCEMENTS - Allowance for Expected Credit Losses (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Oct. 31, 2020 | Nov. 02, 2019 | |
Impact of New Accounting Pronouncements | ||
Balance, beginning of period | $ 1,813 | |
Provision for expected credit losses | 10,663 | $ 728 |
Uncollectible accounts written off, net of recoveries | 221 | |
Balance, end of period | 15,218 | |
Cumulative Effect, Period of Adoption, Adjustment | Accounting Standards Update 2016-13 | ||
Impact of New Accounting Pronouncements | ||
Balance, beginning of period | $ 2,521 |
REVENUES (Details)
REVENUES (Details) - Loyalty Program - USD ($) $ in Millions | 9 Months Ended | |
Oct. 31, 2020 | Nov. 02, 2019 | |
Revenues | ||
Contract with Customer, Liability, Increase Due to Points and Material Rights Accrued for Purchases | $ 20.7 | $ 24.2 |
Contract with Customer, Liability, Decrease Due to Expirations and Redemptions | $ 22.5 | $ 21.6 |
REVENUES - Disaggregation of Re
REVENUES - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 31, 2020 | Nov. 02, 2019 | Oct. 31, 2020 | Nov. 02, 2019 | |
Revenues | ||||
Net sales | $ 647,480 | $ 792,375 | $ 1,546,111 | $ 2,222,614 |
Famous Footwear | ||||
Revenues | ||||
Net sales | 391,706 | 446,583 | 916,893 | 1,218,589 |
Brand Portfolio | ||||
Revenues | ||||
Net sales | 267,587 | 359,863 | 668,447 | 1,060,488 |
Eliminations and Other | ||||
Revenues | ||||
Net sales | (11,813) | (14,071) | (39,229) | (56,463) |
Retail stores | ||||
Revenues | ||||
Net sales | 339,792 | 442,564 | 745,934 | 1,224,019 |
Retail stores | Famous Footwear | ||||
Revenues | ||||
Net sales | 325,501 | 401,943 | 712,761 | 1,108,200 |
Retail stores | Brand Portfolio | ||||
Revenues | ||||
Net sales | 14,291 | 40,621 | 33,173 | 115,819 |
Retail stores | Eliminations and Other | ||||
Revenues | ||||
Net sales | 0 | 0 | 0 | 0 |
Landed wholesale - e-commerce | ||||
Revenues | ||||
Net sales | 42,001 | 27,304 | 91,477 | 64,182 |
Landed wholesale - e-commerce | Famous Footwear | ||||
Revenues | ||||
Net sales | 0 | 0 | 0 | 0 |
Landed wholesale - e-commerce | Brand Portfolio | ||||
Revenues | ||||
Net sales | 42,001 | 27,304 | 91,477 | 64,182 |
Landed wholesale - e-commerce | Eliminations and Other | ||||
Revenues | ||||
Net sales | 0 | 0 | 0 | 0 |
Landed wholesale - e-commerce - drop ship | ||||
Revenues | ||||
Net sales | 21,256 | 58,653 | 61,235 | 148,745 |
Landed wholesale - e-commerce - drop ship | Famous Footwear | ||||
Revenues | ||||
Net sales | 0 | 0 | 0 | 0 |
Landed wholesale - e-commerce - drop ship | Brand Portfolio | ||||
Revenues | ||||
Net sales | 21,256 | 58,653 | 61,235 | 148,745 |
Landed wholesale - e-commerce - drop ship | Eliminations and Other | ||||
Revenues | ||||
Net sales | 0 | 0 | 0 | 0 |
Landed wholesale - other | ||||
Revenues | ||||
Net sales | 124,814 | 163,075 | 288,093 | 492,858 |
Landed wholesale - other | Famous Footwear | ||||
Revenues | ||||
Net sales | 0 | 0 | 0 | 0 |
Landed wholesale - other | Brand Portfolio | ||||
Revenues | ||||
Net sales | 136,627 | 177,146 | 327,322 | 549,321 |
Landed wholesale - other | Eliminations and Other | ||||
Revenues | ||||
Net sales | (11,813) | (14,071) | (39,229) | (56,463) |
First-cost wholesale | ||||
Revenues | ||||
Net sales | 15,368 | 16,124 | 39,139 | 66,826 |
First-cost wholesale | Famous Footwear | ||||
Revenues | ||||
Net sales | 0 | 0 | 0 | 0 |
First-cost wholesale | Brand Portfolio | ||||
Revenues | ||||
Net sales | 15,368 | 16,124 | 39,139 | 66,826 |
First-cost wholesale | Eliminations and Other | ||||
Revenues | ||||
Net sales | 0 | 0 | 0 | 0 |
First-cost wholesale - e-commerce | ||||
Revenues | ||||
Net sales | 99 | 354 | 601 | 1,528 |
First-cost wholesale - e-commerce | Famous Footwear | ||||
Revenues | ||||
Net sales | 0 | 0 | 0 | 0 |
First-cost wholesale - e-commerce | Brand Portfolio | ||||
Revenues | ||||
Net sales | 99 | 354 | 601 | 1,528 |
First-cost wholesale - e-commerce | Eliminations and Other | ||||
Revenues | ||||
Net sales | 0 | 0 | 0 | 0 |
E-commerce - Company websites | ||||
Revenues | ||||
Net sales | 101,158 | 81,181 | 312,814 | 212,591 |
E-commerce - Company websites | Famous Footwear | ||||
Revenues | ||||
Net sales | 66,058 | 44,489 | 203,888 | 109,954 |
E-commerce - Company websites | Brand Portfolio | ||||
Revenues | ||||
Net sales | 35,100 | 36,692 | 108,926 | 102,637 |
E-commerce - Company websites | Eliminations and Other | ||||
Revenues | ||||
Net sales | 0 | 0 | 0 | 0 |
Licensing and royalty | ||||
Revenues | ||||
Net sales | 2,809 | 2,908 | 6,463 | 11,234 |
Licensing and royalty | Famous Footwear | ||||
Revenues | ||||
Net sales | 0 | 0 | 0 | 0 |
Licensing and royalty | Brand Portfolio | ||||
Revenues | ||||
Net sales | 2,809 | 2,908 | 6,463 | 11,234 |
Licensing and royalty | Eliminations and Other | ||||
Revenues | ||||
Net sales | 0 | 0 | 0 | 0 |
Other | ||||
Revenues | ||||
Net sales | 183 | 212 | 355 | 631 |
Other | Famous Footwear | ||||
Revenues | ||||
Net sales | 147 | 151 | 244 | 435 |
Other | Brand Portfolio | ||||
Revenues | ||||
Net sales | 36 | 61 | 111 | 196 |
Other | Eliminations and Other | ||||
Revenues | ||||
Net sales | $ 0 | $ 0 | $ 0 | $ 0 |
REVENUES - Contract Balances (D
REVENUES - Contract Balances (Details) - USD ($) $ in Thousands | Oct. 31, 2020 | Feb. 01, 2020 | Nov. 02, 2019 |
REVENUES | |||
Customer allowances and discounts | $ 22,182 | $ 26,200 | $ 25,762 |
Loyalty programs liability | 14,634 | 16,405 | 17,274 |
Returns reserve | 14,889 | 14,033 | 15,040 |
Gift card liability | $ 4,909 | $ 5,742 | $ 4,794 |
EARNINGS (LOSS) PER SHARE (Deta
EARNINGS (LOSS) PER SHARE (Details) - shares | 3 Months Ended | 9 Months Ended | ||
Oct. 31, 2020 | Nov. 02, 2019 | Oct. 31, 2020 | Nov. 02, 2019 | |
Earnings (Loss) Per Share | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount (in shares) | 24,667 | 16,667 | 24,667 | 16,667 |
Stock Repurchase Program | ||||
Earnings (Loss) Per Share | ||||
Treasury Stock, Shares, Acquired (in shares) | 0 | 58,263 | 2,902,122 | 1,588,741 |
2018 Stock Repurchase Program | ||||
Earnings (Loss) Per Share | ||||
Stock Repurchase Program, Number of Shares Authorized to be Repurchased (in shares) | 2,500,000 | 2,500,000 | ||
2019 Stock Repurchase Program | ||||
Earnings (Loss) Per Share | ||||
Stock Repurchase Program, Number of Shares Authorized to be Repurchased (in shares) | 5,000,000 | 5,000,000 |
EARNINGS (LOSS) PER SHARE - Sch
EARNINGS (LOSS) PER SHARE - Schedule of Basic and Diluted Earnings Per Common Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 31, 2020 | Nov. 02, 2019 | Oct. 31, 2020 | Nov. 02, 2019 | |
EARNINGS (LOSS) PER SHARE | ||||
Net earnings (loss) | $ 14,926 | $ 27,761 | $ (361,915) | $ 62,073 |
Net (earnings) loss attributable to noncontrolling interests | (509) | 226 | (223) | 338 |
Net earnings allocated to participating securities | (512) | (946) | 0 | (2,042) |
Net earnings (loss) attributable to Caleres, Inc. after allocation of earnings to participating securities | $ 13,905 | $ 27,041 | $ (362,138) | $ 60,369 |
Denominator for basic earnings (loss) per common share attributable to Caleres, Inc. shareholders (in shares) | 36,554 | 39,258 | 37,439 | 39,983 |
Dilutive effect of share-based awards (in shares) | 176 | 55 | 0 | 57 |
Denominator for diluted earnings (loss) per common share attributable to Caleres, Inc. shareholders (in shares) | 36,730 | 39,313 | 37,439 | 40,040 |
Basic earnings (loss) per common share attributable to Caleres, Inc. shareholders (in dollars per share) | $ 0.38 | $ 0.69 | $ (9.67) | $ 1.51 |
Diluted earnings (loss) per common share attributable to Caleres, Inc. shareholders (in dollars per share) | $ 0.38 | $ 0.69 | $ (9.67) | $ 1.51 |
RESTRUCTURING AND OTHER SPECI_2
RESTRUCTURING AND OTHER SPECIAL CHARGES (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Oct. 31, 2020 | May 02, 2020 | Nov. 02, 2019 | Oct. 31, 2020 | Nov. 02, 2019 | Feb. 01, 2020 | Jul. 06, 2018 | |
Restructuring and Other Special Charges | |||||||
Restructuring Charges, Total | $ 0 | $ 969 | $ 65,625 | $ 2,434 | |||
Business Acquisitions, Purchase Obligation | 30,146 | 0 | 30,146 | 0 | $ 0 | ||
Fair Value Adjustments of Mandatory Purchase Obligation | 14,946 | 4,410 | |||||
Goodwill and Intangible Asset Impairment, Total | 0 | $ 262,700 | 0 | 262,719 | 0 | ||
Goodwill and Intangible Asset Impairment, Net | $ 218,500 | ||||||
Goodwill and Intangible Asset Impairment, Per Diluted Share (in dollars per share) | $ 5.84 | ||||||
Goodwill, Impairment Loss | 0 | $ 240,300 | 0 | ||||
Impairment of Intangible Assets, Indefinite-lived (Excluding Goodwill) | 0 | 22,400 | 22,400 | 0 | 0 | ||
Infinite-lived Trademarks | |||||||
Restructuring and Other Special Charges | |||||||
Impairment of Intangible Assets, Indefinite-lived (Excluding Goodwill) | $ 22,400 | 22,400 | 0 | $ 0 | |||
Blowfish, LLC | |||||||
Restructuring and Other Special Charges | |||||||
Business Acquisitions, Purchase Obligation | $ 9,000 | ||||||
Fair Value Adjustments of Mandatory Purchase Obligation | 5,100 | 3,900 | 14,900 | 3,900 | |||
Fair Value Adjustments of Mandatory Purchase Obligation, After Tax Basis | $ 3,800 | $ 2,900 | $ 11,100 | $ 2,900 | |||
Fair Value Adjustments of Mandatory Purchase Obligation, Per Diluted Share (in dollars per share) | $ 0.10 | $ 0.07 | $ 0.30 | $ 0.07 | |||
Vionic | |||||||
Restructuring and Other Special Charges | |||||||
Business Combination, Acquisition Related Costs | $ 0 | ||||||
Restructuring and Other Special Charges | Vionic | |||||||
Restructuring and Other Special Charges | |||||||
Business Combination, Acquisition Related Costs | $ 1,000 | $ 1,900 | |||||
Business Combination, Acquisition Related Costs, After-Tax Basis | $ 700 | $ 1,400 | |||||
Business Combination, Acquisition Related Costs Per Share, Diluted (in dollars per share) | $ 0.02 | $ 0.03 | |||||
Brand Portfolio | Fergie Brand Exit | Inventory Mark downs | |||||||
Restructuring and Other Special Charges | |||||||
Restructuring and Related Cost, Incurred Cost, Per Diluted Share (in dollars per share) | $ 0.03 | ||||||
Restructuring Costs, Total | $ 0 | $ 1,600 | |||||
Restructuring Costs, After-tax Basis | $ 1,200 | ||||||
Brand Portfolio | Carlos Brand Exit | |||||||
Restructuring and Other Special Charges | |||||||
Restructuring and Related Cost, Incurred Cost, Per Diluted Share (in dollars per share) | $ 0.03 | ||||||
Restructuring Costs, Total | $ 0 | 0 | $ 1,900 | ||||
Restructuring Costs, After-tax Basis | $ 1,400 | ||||||
Brand Portfolio | Carlos Brand Exit | Inventory Mark downs | |||||||
Restructuring and Other Special Charges | |||||||
Restructuring and Related Cost, Incurred Cost, Per Diluted Share (in dollars per share) | $ 0.02 | ||||||
Restructuring Costs, Total | $ 1,300 | ||||||
Restructuring Costs, After-tax Basis | $ 1,000 | ||||||
Brand Portfolio | Carlos Brand Exit | Restructuring and Other Special Charges | |||||||
Restructuring and Other Special Charges | |||||||
Restructuring and Related Cost, Incurred Cost, Per Diluted Share (in dollars per share) | $ 0.01 | ||||||
Restructuring Costs, Total | $ 600 | ||||||
Restructuring Costs, After-tax Basis | 400 | ||||||
Brand Portfolio | Restructuring and Other Special Charges | Vionic | |||||||
Restructuring and Other Special Charges | |||||||
Business Combination, Acquisition Related Costs | 100 | ||||||
Eliminations and Other | Restructuring and Other Special Charges | Vionic | |||||||
Restructuring and Other Special Charges | |||||||
Business Combination, Acquisition Related Costs | $ 1,800 | ||||||
COVID-19 | |||||||
Restructuring and Other Special Charges | |||||||
Restructuring and Related Costs, Incurred Cost, Total | $ 0 | 99,000 | |||||
Restructuring and Related Cost, Incurred Cost, After Tax | $ 78,000 | ||||||
Restructuring and Related Cost, Incurred Cost, Per Diluted Share (in dollars per share) | $ 2.08 | ||||||
Restructuring Charges, Total | $ 65,600 | ||||||
COVID-19 | Cost of Goods Sold | |||||||
Restructuring and Other Special Charges | |||||||
Inventory Write-down | 33,400 | ||||||
COVID-19 | Brand Portfolio | |||||||
Restructuring and Other Special Charges | |||||||
Restructuring Charges, Total | 48,400 | ||||||
COVID-19 | Brand Portfolio | Cost of Goods Sold | |||||||
Restructuring and Other Special Charges | |||||||
Inventory Write-down | 27,400 | ||||||
COVID-19 | Famous Footwear | |||||||
Restructuring and Other Special Charges | |||||||
Restructuring Charges, Total | 16,600 | ||||||
COVID-19 | Famous Footwear | Cost of Goods Sold | |||||||
Restructuring and Other Special Charges | |||||||
Inventory Write-down | 6,000 | ||||||
COVID-19 | Eliminations and Other | |||||||
Restructuring and Other Special Charges | |||||||
Restructuring Charges, Total | $ 600 |
BUSINESS SEGMENT INFORMATION -
BUSINESS SEGMENT INFORMATION - Key Financial Measures (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Oct. 31, 2020 | Nov. 02, 2019 | Oct. 31, 2020 | Nov. 02, 2019 | Feb. 01, 2020 | |
Business Segment Information | |||||
Net sales | $ 647,480 | $ 792,375 | $ 1,546,111 | $ 2,222,614 | |
Intersegment sales | 11,813 | 14,071 | 39,229 | 56,463 | |
Operating earnings (loss) | 20,071 | 43,471 | (430,279) | 98,144 | |
Segment assets | 2,027,060 | 2,471,210 | 2,027,060 | 2,471,210 | $ 2,431,707 |
Famous Footwear | |||||
Business Segment Information | |||||
Net sales | 391,706 | 446,583 | 916,893 | 1,218,589 | |
Operating earnings (loss) | 27,845 | 27,681 | (38,651) | 70,036 | |
Segment assets | 837,228 | 973,272 | 837,228 | 973,272 | |
Brand Portfolio | |||||
Business Segment Information | |||||
Net sales | 267,587 | 359,863 | 668,447 | 1,060,488 | |
Intersegment sales | 11,813 | 14,071 | 39,229 | 56,463 | |
Operating earnings (loss) | 7,304 | 19,398 | (352,556) | 46,225 | |
Segment assets | 924,976 | 1,360,445 | 924,976 | 1,360,445 | |
Eliminations and Other | |||||
Business Segment Information | |||||
Net sales | (11,813) | (14,071) | (39,229) | (56,463) | |
Operating earnings (loss) | (15,078) | (3,608) | (39,072) | (18,117) | |
Segment assets | $ 264,856 | $ 137,493 | $ 264,856 | $ 137,493 |
BUSINESS SEGMENT INFORMATION _2
BUSINESS SEGMENT INFORMATION - Reconciliation of Operating Earnings Before Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 31, 2020 | Nov. 02, 2019 | Oct. 31, 2020 | Nov. 02, 2019 | |
BUSINESS SEGMENT INFORMATION | ||||
Operating earnings (loss) | $ 20,071 | $ 43,471 | $ (430,279) | $ 98,144 |
Interest expense, net | (10,881) | (10,559) | (33,747) | (25,288) |
Other income, net | 5,461 | 2,633 | 12,718 | 7,902 |
Earnings (loss) before income taxes | $ 14,651 | $ 35,545 | $ (451,308) | $ 80,758 |
INVENTORIES - Schedule of Inven
INVENTORIES - Schedule of Inventories (Details) - USD ($) $ in Thousands | Oct. 31, 2020 | Feb. 01, 2020 | Nov. 02, 2019 |
INVENTORIES | |||
Raw materials | $ 14,907 | $ 18,455 | $ 19,005 |
Work-in-process | 293 | 454 | 422 |
Finished goods | 492,165 | 599,497 | 625,219 |
Inventories, net | $ 507,365 | $ 618,406 | $ 644,646 |
GOODWILL AND INTANGIBLE ASSET_2
GOODWILL AND INTANGIBLE ASSETS (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Oct. 31, 2020 | May 02, 2020 | Nov. 02, 2019 | Oct. 31, 2020 | Nov. 02, 2019 | Feb. 01, 2020 | Feb. 02, 2019 | |
Goodwill and Intangible Assets | |||||||
Impairment of Intangible Assets, Indefinite-lived (Excluding Goodwill) | $ 0 | $ 22,400 | $ 22,400 | $ 0 | $ 0 | ||
Amortization of Intangible Assets, Total | 3,300 | $ 3,300 | $ 9,786 | 9,790 | |||
Goodwill, Impairment Loss | $ 0 | 240,300 | $ 0 | ||||
Indefinite-lived Via Spiga Trademark | |||||||
Goodwill and Intangible Assets | |||||||
Indefinite-lived Intangible Assets (Excluding Goodwill), Ending Balance | 500 | ||||||
Allen Edmonds | |||||||
Goodwill and Intangible Assets | |||||||
Impairment of Intangible Assets, Indefinite-lived (Excluding Goodwill) | 12,200 | $ 60,000 | |||||
Via Spiga | |||||||
Goodwill and Intangible Assets | |||||||
Impairment of Intangible Assets, Indefinite-lived (Excluding Goodwill) | $ 10,200 |
GOODWILL AND INTANGIBLE ASSET_3
GOODWILL AND INTANGIBLE ASSETS - Amortization Expense Related to Intangible Assets (Details) $ in Millions | Oct. 31, 2020USD ($) |
GOODWILL AND INTANGIBLE ASSETS | |
Remainder of fiscal year | $ 13.1 |
2021 | 12.9 |
2022 | 12.5 |
2023 | 12.2 |
2024 | $ 11.4 |
GOODWILL AND INTANGIBLE ASSET_4
GOODWILL AND INTANGIBLE ASSETS - Schedule of Goodwill and Intangible Assets (Details) - USD ($) $ in Thousands | Oct. 31, 2020 | Feb. 01, 2020 | Nov. 02, 2019 |
Goodwill and Intangible Assets | |||
Intangible Assets | $ 368,688 | $ 391,088 | $ 391,088 |
Accumulated amortization | (106,570) | (96,784) | (93,518) |
Total intangible assets, net | 262,118 | 294,304 | 297,570 |
Goodwill | 4,956 | 245,275 | 245,275 |
Goodwill and intangible assets, net | 267,074 | 539,579 | 542,845 |
Famous Footwear | |||
Goodwill and Intangible Assets | |||
Intangible Assets | 2,800 | 2,800 | 2,800 |
Brand Portfolio | |||
Goodwill and Intangible Assets | |||
Intangible Assets | 365,888 | 388,288 | 388,288 |
Goodwill | $ 4,956 | $ 245,275 | $ 245,275 |
GOODWILL AND INTANGIBLE ASSET_5
GOODWILL AND INTANGIBLE ASSETS - Finite and Infinite-Lived Intangible Assets (Details) - USD ($) $ in Thousands | May 02, 2020 | Oct. 31, 2020 | May 02, 2020 | Oct. 31, 2020 | Nov. 02, 2019 | Feb. 01, 2020 | |
Goodwill and Intangible Assets | |||||||
Finite-Lived Intangible Assets, Accumulated Amortization | $ 106,570 | $ 106,570 | $ 93,518 | $ 96,784 | |||
Indefinite-Lived Intangible Assets, Impairment | 0 | $ 22,400 | 22,400 | 0 | 0 | ||
Intangible Assets, Cost Basis | 391,088 | 391,088 | 391,088 | 391,088 | |||
Intangible Assets, Net Carrying Value | 262,118 | 262,118 | 297,570 | 294,304 | |||
Infinite-lived Trademarks | |||||||
Goodwill and Intangible Assets | |||||||
Indefinite-Lived Intangible Assets, Cost Basis | [1] | 58,100 | 58,100 | 58,100 | 58,100 | ||
Indefinite-Lived Intangible Assets, Impairment | 22,400 | 22,400 | 0 | 0 | |||
Indefinite-Lived Intangible Assets, Net Carrying Value | 35,700 | 35,700 | 58,100 | 58,100 | |||
Indefinite-lived Via Spiga Trademark | |||||||
Goodwill and Intangible Assets | |||||||
Indefinite-Lived Intangible Assets, Impairment Period (in years) | 2 years | ||||||
Indefinite-Lived Intangible Assets, Net Carrying Value | $ 500 | $ 500 | |||||
Trademarks | |||||||
Goodwill and Intangible Assets | |||||||
Finite-Lived Intangible Assets, Cost Basis | 288,788 | 288,788 | 288,788 | 288,788 | |||
Finite-Lived Intangible Assets, Accumulated Amortization | 99,376 | 99,376 | 89,360 | 91,827 | |||
Finite-Lived Intangible Assets, Net Carrying Value | 189,412 | $ 189,412 | $ 199,428 | $ 196,961 | |||
Trademarks | Minimum | |||||||
Goodwill and Intangible Assets | |||||||
Finite-Lived Intangible Assets, Estimated Useful Life (Year) | 15 years | 15 years | 15 years | ||||
Trademarks | Maximum | |||||||
Goodwill and Intangible Assets | |||||||
Finite-Lived Intangible Assets, Estimated Useful Life (Year) | 40 years | 40 years | 40 years | ||||
Customer Relationships | |||||||
Goodwill and Intangible Assets | |||||||
Finite-Lived Intangible Assets, Cost Basis | 44,200 | $ 44,200 | $ 44,200 | $ 44,200 | |||
Finite-Lived Intangible Assets, Accumulated Amortization | 7,194 | 7,194 | 4,158 | 4,957 | |||
Finite-Lived Intangible Assets, Net Carrying Value | $ 37,006 | $ 37,006 | $ 40,042 | $ 39,243 | |||
Customer Relationships | Minimum | |||||||
Goodwill and Intangible Assets | |||||||
Finite-Lived Intangible Assets, Estimated Useful Life (Year) | 15 years | 15 years | 15 years | ||||
Customer Relationships | Maximum | |||||||
Goodwill and Intangible Assets | |||||||
Finite-Lived Intangible Assets, Estimated Useful Life (Year) | 16 years | 16 years | 16 years | ||||
[1] | Cost basis for indefinite-lived trademarks has been reduced by $60.0 million in impairment charges recognized in 2018 related to the Allen Edmonds tradename. |
LEASES (Details)
LEASES (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Oct. 31, 2020USD ($) | Nov. 02, 2019USD ($) | Oct. 31, 2020USD ($)leaselocation | Nov. 02, 2019USD ($) | Feb. 01, 2020USD ($) | |
Leases | |||||
Right-of-Use Asset Obtained in Exchange for Operating Lease Liability | $ 63,100 | ||||
Operating Lease, Right-of-Use Asset | $ 601,574 | $ 704,244 | $ 601,574 | $ 704,244 | $ 695,594 |
Current Fiscal Year | |||||
Leases | |||||
Number Of Locations Of Lease Commitments Not Yet Commenced In Current Fiscal Year | location | 4 | ||||
Number Of Anticipated Leases In Current Fiscal Year | lease | 1 | ||||
Operating Lease, Liability, Total | 900 | $ 900 | |||
Operating Lease, Right-of-Use Asset | 900 | $ 900 | |||
Next Fiscal Year | |||||
Leases | |||||
Number Of Anticipated Leases In Next Fiscal Year | lease | 3 | ||||
Operating Lease, Liability, Total | 3,900 | $ 3,900 | |||
Operating Lease, Right-of-Use Asset | 3,900 | 3,900 | |||
Selling and Administrative Expenses | |||||
Leases | |||||
Variable Lease Reversal of Cost, Rent Abatement | 1,700 | 3,700 | |||
COVID-19 | |||||
Leases | |||||
Operating Lease, Impairment Loss | 21,100 | ||||
Impairment of Long-Lived Assets Held-for-use | 14,500 | ||||
Retail Stores | |||||
Leases | |||||
Asset Impairment Charges, Total | $ 400 | $ 2,200 | $ 35,600 | $ 5,100 |
LEASES - Components of Lease Ex
LEASES - Components of Lease Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 31, 2020 | Nov. 02, 2019 | Oct. 31, 2020 | Nov. 02, 2019 | |
LEASES | ||||
Operating lease expense | $ 38,568 | $ 47,068 | $ 124,906 | $ 139,380 |
Variable lease expense | 12,739 | 11,794 | 36,090 | 35,277 |
Short-term lease expense | 1,775 | 577 | 3,872 | 2,654 |
Sublease income | (29) | (73) | (76) | (220) |
Total lease expense | $ 53,053 | $ 59,366 | $ 164,792 | $ 177,091 |
LEASES - Supplemental Cash Flow
LEASES - Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 31, 2020 | Nov. 02, 2019 | Oct. 31, 2020 | Nov. 02, 2019 | |
LEASES | ||||
Cash paid for lease liabilities | $ 99,517 | $ 136,497 | ||
Cash received from sublease income | $ 29 | $ 73 | $ 76 | $ 220 |
LONG-TERM AND SHORT-TERM FINA_2
LONG-TERM AND SHORT-TERM FINANCING ARRANGEMENTS (Details) - USD ($) $ in Millions | Apr. 14, 2020 | Oct. 31, 2020 | Mar. 31, 2020 | Jan. 18, 2019 | Jan. 17, 2019 | Jul. 27, 2015 |
Senior Notes due 2023 | ||||||
Long-term and Short-term Financing Arrangements | ||||||
Senior Notes, Total | $ 200 | |||||
Debt Instrument, Interest Rate, Stated Percentage | 6.25% | |||||
Senior Notes, Repurchase Price, Change of Control | 101.00% | |||||
Revolving Credit Facility | ||||||
Long-term and Short-term Financing Arrangements | ||||||
Long-term Line of Credit, Total | $ 440 | |||||
Revolving Credit Facility | Fourth Amendment to Fourth Amended and Restated Credit Agreement | ||||||
Long-term and Short-term Financing Arrangements | ||||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 600 | $ 500 | $ 600 | |||
Line of Credit Facility, Option to Increase, Amount | 150 | $ 250 | ||||
Line of Credit Facility, Additional Maximum Borrowing Capacity | $ 100 | |||||
Debt Instrument, Increase in Basis Spread on Variable Rate | 0.75% | |||||
Line of Credit Facility, Unused Capacity, Commitment Fee Percentage Increase | 0.05% | |||||
Line of Credit Facility, Excess Availability, Percent to Trigger Debt Restrictions | 10.00% | |||||
Line of Credit Facility, Excess Availability to Trigger Debt Restrictions | $ 40 | |||||
Line of Credit Facility, Fixed Charge Coverage Ratio to Trigger Debt Restrictions | 1 | |||||
Long-term Line of Credit, Total | $ 300 | |||||
Letters of Credit Outstanding, Amount | 11.2 | |||||
Line of Credit Facility, Remaining Borrowing Capacity | $ 170.6 | |||||
Revolving Credit Facility | Fourth Amendment to Fourth Amended and Restated Credit Agreement | Minimum | ||||||
Long-term and Short-term Financing Arrangements | ||||||
Debt Instrument, Basis Spread on Variable Rate | 1.00% |
SHAREHOLDERS' EQUITY (Details)
SHAREHOLDERS' EQUITY (Details) $ in Millions | Aug. 01, 2020USD ($) |
Canada Revenue Agency | |
Deferred Tax Assets, Valuation Allowance, Total | $ 0.5 |
SHAREHOLDERS' EQUITY - Accumula
SHAREHOLDERS' EQUITY - Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 31, 2020 | Nov. 02, 2019 | Oct. 31, 2020 | Nov. 02, 2019 | |
Balance | $ (31,843) | |||
Other comprehensive income, net of tax | $ 334 | $ 1,074 | 740 | $ 1,249 |
Balance | (31,184) | (30,318) | (31,184) | (30,318) |
Foreign Currency Translation | ||||
Balance | (1,390) | (896) | (580) | 62 |
Other comprehensive (loss) income before reclassifications | 320 | 595 | (490) | (363) |
Amounts reclassified from accumulated other comprehensive loss | 0 | 0 | 0 | 0 |
Tax (benefit) provision | 0 | 0 | 0 | 0 |
Net reclassifications | 0 | 0 | 0 | 0 |
Other comprehensive income, net of tax | 320 | 595 | (490) | (363) |
Balance | (1,070) | (301) | (1,070) | (301) |
Pension and Other Postretirement Transactions | ||||
Balance | (30,047) | (30,199) | (31,171) | (31,055) |
Other comprehensive (loss) income before reclassifications | 0 | 0 | 0 | 0 |
Amounts reclassified from accumulated other comprehensive loss | (111) | 578 | 1,393 | 1,733 |
Tax (benefit) provision | 44 | (149) | (336) | (448) |
Net reclassifications | (67) | 429 | 1,057 | 1,285 |
Other comprehensive income, net of tax | (67) | 429 | 1,057 | 1,285 |
Balance | (30,114) | (29,770) | (30,114) | (29,770) |
Derivative Financial Instrument Transactions | ||||
Balance | 0 | (310) | (92) | (608) |
Other comprehensive (loss) income before reclassifications | 0 | 66 | 87 | 160 |
Amounts reclassified from accumulated other comprehensive loss | 0 | (4) | 6 | 254 |
Tax (benefit) provision | 0 | 1 | (1) | (53) |
Net reclassifications | 0 | (3) | 5 | 201 |
Other comprehensive income, net of tax | 0 | 63 | 92 | 361 |
Balance | 0 | (247) | 0 | (247) |
Accumulated Other Comprehensive (Loss) Income | ||||
Balance | (31,437) | (31,405) | (31,843) | (31,601) |
Other comprehensive (loss) income before reclassifications | 320 | 661 | (403) | (203) |
Amounts reclassified from accumulated other comprehensive loss | (111) | 574 | 1,399 | 1,987 |
Tax (benefit) provision | 44 | (148) | (337) | (501) |
Net reclassifications | (67) | 426 | 1,062 | 1,486 |
Other comprehensive income, net of tax | 253 | 1,087 | 659 | 1,283 |
Balance | $ (31,184) | $ (30,318) | $ (31,184) | $ (30,318) |
SHARE-BASED COMPENSATION (Detai
SHARE-BASED COMPENSATION (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Oct. 31, 2020 | Nov. 02, 2019 | Oct. 31, 2020 | Nov. 02, 2019 | |
Share-based Compensation | ||||
Share-based Payment Arrangement, Expense | $ 2.5 | $ 2.4 | $ 6.9 | $ 8.9 |
Share-based Compensation Arrangement by Share-based Payment Award, Shares Purchased for Award (in shares) | 69,377 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Shares Issued in Period (in shares) | 32,018 | 449,539 | 295,466 | |
Restricted Stock | ||||
Share-based Compensation | ||||
Granted (in shares) | 35,000 | 11,000 | 598,431 | 461,234 |
Granted (in dollars per share) | $ 9.73 | $ 22.44 | $ 6.14 | $ 22.94 |
Restricted Stock | Share-based Compensation Award, Cliff-vesting, Tranche One | ||||
Share-based Compensation | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period (in years) | 1 year | 1 year | ||
Granted (in shares) | 12,748 | 12,914 | ||
Restricted Stock | Share-based Compensation Award, Graded-vesting | ||||
Share-based Compensation | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period (in years) | 3 years | 3 years | 3 years | 3 years |
Granted (in shares) | 585,683 | 448,320 | ||
Performance Share Awards | ||||
Share-based Compensation | ||||
Granted (in shares) | 87,750 | 0 | 87,750 | 180,000 |
Granted (in dollars per share) | $ 7.47 | $ 7.47 | $ 23.42 | |
Performance Share Awards | Minimum | ||||
Share-based Compensation | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Performance Percentage Earned | 0.00% | |||
Performance Share Awards | Maximum | ||||
Share-based Compensation | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Performance Percentage Earned | 200.00% | |||
Restricted Stock Units ("RSUs") | ||||
Share-based Compensation | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period (in years) | 1 year | |||
Restricted Stock Units ("RSUs") | Non-Employee Directors | ||||
Share-based Compensation | ||||
Granted (in shares) | 118,150 | 55,679 | ||
Granted (in dollars per share) | $ 9.78 | $ 23.27 | $ 10.01 | $ 19.59 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Dividend Equivalent (in shares) | 3,618 | 1,350 | 16,166 | 4,023 |
SHARE-BASED COMPENSATION - Rest
SHARE-BASED COMPENSATION - Restricted Stock Activity (Details) - Restricted Stock - $ / shares | 3 Months Ended | 9 Months Ended | ||
Oct. 31, 2020 | Nov. 02, 2019 | Oct. 31, 2020 | Nov. 02, 2019 | |
Share-based Compensation | ||||
Beginning balance (in shares) | 1,360,602 | 1,433,470 | 1,271,795 | 1,249,223 |
Granted (in shares) | 35,000 | 11,000 | 598,431 | 461,234 |
Forfeited (in shares) | (875) | (78,000) | (68,787) | (135,425) |
Vested (in shares) | (6,500) | (10,000) | (413,212) | (218,562) |
Ending balance (in shares) | 1,388,227 | 1,356,470 | 1,388,227 | 1,356,470 |
Beginning balance (in dollars per share) | $ 17.81 | $ 27.09 | $ 26.77 | $ 29.17 |
Granted (in dollars per share) | 9.73 | 22.44 | 6.14 | 22.94 |
Forfeited (in dollars per share) | 14.51 | 30.75 | 23.11 | 29.91 |
Vested (in dollars per share) | 25.18 | 32.85 | 28.23 | 30.25 |
Ending balance (in dollars per share) | $ 17.57 | $ 26.80 | $ 17.57 | $ 26.80 |
RETIREMENT AND OTHER BENEFIT _3
RETIREMENT AND OTHER BENEFIT PLANS - Components of Net Periodic Benefit Income (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 31, 2020 | Nov. 02, 2019 | Oct. 31, 2020 | Nov. 02, 2019 | |
Pension Benefits | ||||
Retirement and Other Benefit Plans | ||||
Service cost | $ 2,005 | $ 1,805 | $ 6,412 | $ 5,414 |
Interest cost | 2,970 | 3,707 | 9,252 | 11,112 |
Expected return on assets | (8,330) | (6,933) | (23,205) | (20,792) |
Actuarial loss (gain) | 240 | 977 | 2,506 | 2,929 |
Prior service income | (324) | (372) | (1,031) | (1,115) |
Settlement cost | 222 | 0 | ||
Curtailment gain | (189) | 0 | ||
Total net periodic benefit income | (3,439) | (816) | (6,033) | (2,452) |
Other Postretirement Benefits | ||||
Retirement and Other Benefit Plans | ||||
Service cost | 0 | 0 | 0 | 0 |
Interest cost | 10 | 15 | 31 | 45 |
Expected return on assets | 0 | 0 | 0 | 0 |
Actuarial loss (gain) | (27) | (27) | (82) | (81) |
Prior service income | 0 | 0 | 0 | 0 |
Settlement cost | 0 | 0 | ||
Curtailment gain | 0 | 0 | ||
Total net periodic benefit income | $ (17) | $ (12) | $ (51) | $ (36) |
RISK MANAGEMENT AND DERIVATIV_3
RISK MANAGEMENT AND DERIVATIVES - Net Notional Amount of All Purchase and Sale Contracts of a Foreign Currency (Details) - USD ($) $ in Thousands | Oct. 31, 2020 | Feb. 01, 2020 | Nov. 02, 2019 |
Foreign Exchange Forward, U.S. dollars | |||
Foreign Currency Fair Value Hedge Derivative | |||
Net notional amount | $ 0 | $ 3,963 | $ 3,235 |
Foreign Exchange Forward, Euro | |||
Foreign Currency Fair Value Hedge Derivative | |||
Net notional amount | 0 | 1,251 | 5,763 |
Foreign Exchange Forward, Chinese yuan | |||
Foreign Currency Fair Value Hedge Derivative | |||
Net notional amount | 0 | 2,355 | 2,905 |
Foreign Exchange Forward, New Taiwanese dollars | |||
Foreign Currency Fair Value Hedge Derivative | |||
Net notional amount | 0 | 0 | |
Foreign Exchange Forward, Other currencies | |||
Foreign Currency Fair Value Hedge Derivative | |||
Net notional amount | 0 | 69 | 139 |
Foreign Exchange Forward Contracts | |||
Foreign Currency Fair Value Hedge Derivative | |||
Net notional amount | $ 0 | $ 7,638 | $ 12,042 |
RISK MANAGEMENT AND DERIVATIV_4
RISK MANAGEMENT AND DERIVATIVES - Schedule of Fair Values of Derivative Instruments Designated as Hedging Instruments (Details) - Prepaid Expenses and Other Current Assets - Foreign Exchange Forward Contracts - USD ($) $ in Thousands | Oct. 31, 2020 | Feb. 01, 2020 | Nov. 02, 2019 |
Derivatives, Fair Value | |||
Asset Derivatives | $ 0 | $ 0 | $ 17 |
Liability Derivatives | $ 0 | $ 103 | $ 325 |
RISK MANAGEMENT AND DERIVATIV_5
RISK MANAGEMENT AND DERIVATIVES - Effect of Derivative Instruments in Cash Flow Hedging Relationships (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 31, 2020 | Nov. 02, 2019 | Oct. 31, 2020 | Nov. 02, 2019 | |
Derivative Instruments, Gain (Loss) | ||||
Gain (Loss) Recognized in OCL on Derivatives | $ 0 | $ 63 | $ 92 | $ 361 |
Foreign Exchange Forward Contracts | Net Sales | ||||
Derivative Instruments, Gain (Loss) | ||||
Gain (Loss) Recognized in OCL on Derivatives | 0 | 69 | 23 | (51) |
Gain (Loss) Reclassified from Accumulated OCL into Earnings | 0 | 2 | 0 | (3) |
Foreign Exchange Forward Contracts | Cost of Goods Sold | ||||
Derivative Instruments, Gain (Loss) | ||||
Gain (Loss) Recognized in OCL on Derivatives | 0 | 38 | 60 | 390 |
Gain (Loss) Reclassified from Accumulated OCL into Earnings | 0 | 0 | (38) | |
Foreign Exchange Forward Contracts | Selling and Administrative Expenses | ||||
Derivative Instruments, Gain (Loss) | ||||
Gain (Loss) Recognized in OCL on Derivatives | 0 | (33) | 33 | (147) |
Gain (Loss) Reclassified from Accumulated OCL into Earnings | $ 0 | $ 2 | $ (6) | $ (213) |
FAIR VALUE MEASUREMENTS (Detail
FAIR VALUE MEASUREMENTS (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Oct. 31, 2020 | Nov. 02, 2019 | Oct. 31, 2020 | Nov. 02, 2019 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Deferred Compensation Plan, Maximum Percentage of Deferral of Base Salary | 50.00% | 50.00% | ||
Deferred Compensation Plan, Maximum Percentage of Deferral of Annual Incentive Compensation | 100.00% | 100.00% | ||
Accretion and Remeasurement Adjustments | $ 5.1 | $ 3.9 | $ 14.9 | $ 4.4 |
Long-lived Assets, Held and Used | $ 657.6 | $ 658.1 | $ 657.6 | $ 658.1 |
Restricted Stock Units ("RSUs") | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period (in years) | 1 year |
FAIR VALUE MEASUREMENTS - Asset
FAIR VALUE MEASUREMENTS - Assets and Liabilities Measured on a Recurring Basis (Details) - Fair Value Measurements on a recurring basis - USD ($) $ in Thousands | Oct. 31, 2020 | Feb. 01, 2020 | Nov. 02, 2019 |
Fair Value Measurements - Assets and Liabilities Measured on a Recurring Basis | |||
Cash equivalents - money market funds | $ 82,500 | $ 18,001 | |
Non-qualified deferred compensation plan assets | 7,741 | 8,004 | $ 8,117 |
Non-qualified deferred compensation plan liabilities | (7,741) | (8,004) | (8,117) |
Deferred compensation plan liabilities for non-employee directors | (813) | (1,536) | (1,879) |
Restricted stock units for non-employee directors | (840) | (2,572) | (3,282) |
Mandatory purchase obligation - Blowfish Malibu | (30,146) | (15,200) | (13,655) |
Derivative financial instruments, net | (103) | (308) | |
Fair Value Measurements, Level 1 | |||
Fair Value Measurements - Assets and Liabilities Measured on a Recurring Basis | |||
Cash equivalents - money market funds | 82,500 | 18,001 | |
Non-qualified deferred compensation plan assets | 7,741 | 8,004 | 8,117 |
Non-qualified deferred compensation plan liabilities | (7,741) | (8,004) | (8,117) |
Deferred compensation plan liabilities for non-employee directors | (813) | (1,536) | (1,879) |
Restricted stock units for non-employee directors | (840) | (2,572) | (3,282) |
Mandatory purchase obligation - Blowfish Malibu | 0 | 0 | 0 |
Derivative financial instruments, net | 0 | 0 | |
Fair Value Measurements, Level 2 | |||
Fair Value Measurements - Assets and Liabilities Measured on a Recurring Basis | |||
Cash equivalents - money market funds | 0 | 0 | |
Non-qualified deferred compensation plan assets | 0 | 0 | 0 |
Non-qualified deferred compensation plan liabilities | 0 | 0 | 0 |
Deferred compensation plan liabilities for non-employee directors | 0 | 0 | 0 |
Restricted stock units for non-employee directors | 0 | 0 | 0 |
Mandatory purchase obligation - Blowfish Malibu | 0 | 0 | 0 |
Derivative financial instruments, net | (103) | (308) | |
Fair Value Measurements, Level 3 | |||
Fair Value Measurements - Assets and Liabilities Measured on a Recurring Basis | |||
Cash equivalents - money market funds | 0 | 0 | |
Non-qualified deferred compensation plan assets | 0 | 0 | 0 |
Non-qualified deferred compensation plan liabilities | 0 | 0 | 0 |
Deferred compensation plan liabilities for non-employee directors | 0 | 0 | 0 |
Restricted stock units for non-employee directors | 0 | 0 | 0 |
Mandatory purchase obligation - Blowfish Malibu | $ (30,146) | (15,200) | (13,655) |
Derivative financial instruments, net | $ 0 | $ 0 |
FAIR VALUE MEASUREMENTS - Impai
FAIR VALUE MEASUREMENTS - Impairment Charges (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 31, 2020 | Nov. 02, 2019 | Oct. 31, 2020 | Nov. 02, 2019 | |
Fair Value Measurements - Assets and Liabilities Measured on a Recurring Basis | ||||
Impairment charges for property, equipment, and lease right-of-use assets | $ 398 | $ 2,151 | $ 35,620 | $ 5,105 |
Famous Footwear | Selling and Administrative Expenses | ||||
Fair Value Measurements - Assets and Liabilities Measured on a Recurring Basis | ||||
Impairment charges for property, equipment, and lease right-of-use assets | 0 | 769 | 14,896 | 1,509 |
Brand Portfolio | Selling and Administrative Expenses | ||||
Fair Value Measurements - Assets and Liabilities Measured on a Recurring Basis | ||||
Impairment charges for property, equipment, and lease right-of-use assets | $ 398 | $ 1,382 | $ 20,724 | $ 3,596 |
FAIR VALUE MEASUREMENTS - Fair
FAIR VALUE MEASUREMENTS - Fair Value of Financial Instruments (Details) - USD ($) $ in Thousands | Oct. 31, 2020 | Feb. 01, 2020 | Nov. 02, 2019 | |
Carrying Value | ||||
Fair Value of Financial Instruments | ||||
Borrowings under revolving credit agreement | [1] | $ 300,000 | $ 275,000 | $ 295,000 |
Long-term debt | [1] | 200,000 | 200,000 | 200,000 |
Total debt | [1] | 500,000 | 475,000 | 495,000 |
Fair Value | ||||
Fair Value of Financial Instruments | ||||
Borrowings under revolving credit agreement | 300,000 | 275,000 | 295,000 | |
Long-term debt | 188,750 | 205,000 | 206,200 | |
Total debt | $ 488,750 | $ 480,000 | $ 501,200 | |
[1] | Excludes unamortized debt issuance costs and debt discount |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 31, 2020 | Nov. 02, 2019 | Oct. 31, 2020 | Nov. 02, 2019 | |
INCOME TAXES | ||||
Effective Income Tax Rate Reconciliation, Percent, Total | (1.90%) | 21.90% | 19.80% | 23.10% |
Effective Income Tax Rate, Before Discrete Benefits of Provisions | 23.50% | |||
Deferred Income Taxes and Tax Credits | $ 0 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) - Redfield Site $ in Millions | 9 Months Ended |
Oct. 31, 2020USD ($) | |
Commitments and Contingencies | |
Cumulative Environmental Remediation Expense | $ 31.8 |
Environmental Exit Costs, Assets Previously Disposed, Liability for Remediation | 9.7 |
Reserve For Anticipated Future Remediation Activities For Off Site Remediation | 5 |
Reserve For Anticipated Future Remediation Activities For On Site Remediation | $ 4.7 |
Accrual for Environmental Loss Contingencies, Discount Rate | 4.80% |
Accrual for Environmental Loss Contingencies, Gross, Total | $ 13.9 |
Accrual for Environmental Loss Contingencies, Undiscounted, Next Twelve Months | 0.6 |
Accrual for Environmental Loss Contingencies, Undiscounted, Second Year | 0.1 |
Accrual for Environmental Loss Contingencies, Undiscounted, Third Year | 0.1 |
Accrual for Environmental Loss Contingencies, Undiscounted, Fourth Year | 0.1 |
Accrual for Environmental Loss Contingencies, Undiscounted, Fifth Year | 0.1 |
Accrual for Environmental Loss Contingencies, Undiscounted, after Fifth Year | 12.9 |
Other Noncurrent Liabilities | |
Commitments and Contingencies | |
Environmental Exit Costs, Assets Previously Disposed, Liability for Remediation | 8.9 |
Other Accrued Expenses | |
Commitments and Contingencies | |
Environmental Exit Costs, Assets Previously Disposed, Liability for Remediation | $ 0.8 |
SUBSEQUENT EVENT (Details)
SUBSEQUENT EVENT (Details) - Subsequent Event - Naturalizer Retail Stores Closing $ in Millions | Nov. 19, 2020USD ($) |
Minimum | |
Subsequent Event | |
Expected pre-tax charges | $ 20 |
Annual pre-tax benefit | 10 |
Maximum | |
Subsequent Event | |
Expected pre-tax charges | 25 |
Annual pre-tax benefit | $ 12 |