Document And Entity Information
Document And Entity Information - shares | 6 Months Ended | |
Jan. 27, 2018 | Mar. 01, 2018 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jan. 27, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q2 | |
Trading Symbol | asna | |
Entity Registrant Name | Ascena Retail Group, Inc. | |
Entity Central Index Key | 1,498,301 | |
Current Fiscal Year End Date | --08-04 | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 196,194,560 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Jan. 27, 2018 | Jul. 29, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 413.5 | $ 325.6 |
Inventories | 600.3 | 639.3 |
Prepaid expenses and other current assets | 172.3 | 157.4 |
Total current assets | 1,186.1 | 1,122.3 |
Property and equipment, net | 1,319 | 1,437.6 |
Goodwill | 683 | 683 |
Other intangible assets, net | 524.2 | 532.4 |
Other assets | 58.7 | 96.2 |
Total assets | 3,771 | 3,871.5 |
Current liabilities: | ||
Accounts payable | 380.3 | 411.6 |
Accrued expenses and other current liabilities | 352.9 | 360 |
Deferred income | 143.9 | 121.5 |
Current portion of long-term debt | 44 | 44 |
Total current liabilities | 921.1 | 937.1 |
Long-term debt, less current portion | 1,477.6 | 1,494.1 |
Lease-related liabilities | 330.5 | 348.3 |
Deferred income taxes | 52.5 | 79.3 |
Other non-current liabilities | 189.8 | 191.7 |
Total Liabilities | 2,971.5 | 3,050.5 |
Commitments and contingencies (Note 13) | ||
Equity: | ||
Common stock, par value $0.01 per share; 196.2 million and 195.1 million shares issued and outstanding as of January 27, 2018 and July 29, 2017, respectively | 2 | 2 |
Additional paid-in capital | 1,079 | 1,068.2 |
Accumulated deficit | (271.8) | (238.8) |
Accumulated other comprehensive loss | (9.7) | (10.4) |
Total equity | 799.5 | 821 |
Total liabilities and equity | $ 3,771 | $ 3,871.5 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares shares in Millions | Jan. 27, 2018 | Jul. 29, 2017 |
Statement of Financial Position [Abstract] | ||
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, issued | 196.2 | 195.1 |
Common stock, outstanding | 196.2 | 195.1 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jan. 27, 2018 | Jan. 28, 2017 | Jan. 27, 2018 | Jan. 28, 2017 | ||
Income Statement [Abstract] | |||||
Net sales | $ 1,719 | $ 1,748.2 | $ 3,308.7 | $ 3,426.6 | |
Cost of goods sold | (790.4) | (802.4) | (1,415) | (1,466.8) | |
Gross margin | 928.6 | 945.8 | 1,893.7 | 1,959.8 | |
Other operating expenses: | |||||
Buying, distribution and occupancy expenses | (326.1) | (320.1) | (644.2) | (640.7) | |
Selling, general and administrative expenses | (526.2) | (538.1) | (1,019) | (1,062.5) | |
Acquisition and integration expenses | (3.3) | (15.8) | (5.4) | (27.8) | |
Restructuring and other related charges | [1] | (18.8) | (20.2) | (41) | (32.1) |
Depreciation and amortization expense | (89.8) | (96.3) | (179.8) | (190.2) | |
Total other operating expenses | (964.2) | (990.5) | (1,889.4) | (1,953.3) | |
Operating (loss) income | (35.6) | (44.7) | 4.3 | 6.5 | |
Interest expense | (27.2) | (25) | (53.8) | (50.3) | |
Interest income and other income, net | 1.6 | 0.4 | 1.8 | 0.3 | |
Loss before benefit for income taxes | (61.2) | (69.3) | (47.7) | (43.5) | |
Benefit for income taxes | 21.9 | 34.1 | 15 | 22.7 | |
Net loss | $ (39.3) | $ (35.2) | $ (32.7) | $ (20.8) | |
Net loss per common share: | |||||
Basic | $ (0.20) | $ (0.18) | $ (0.17) | $ (0.11) | |
Diluted | $ (0.20) | $ (0.18) | $ (0.17) | $ (0.11) | |
Weighted average common shares outstanding: | |||||
Basic | 196.1 | 194.8 | 195.8 | 194.6 | |
Diluted | 196.1 | 194.8 | 195.8 | 194.6 | |
[1] | Restructuring and other related charges are as follows: Three Months Ended Six Months Ended January 27, 2018 January 28, 2017 January 27, 2018 January 28, 2017 (millions)Cash related charges(i): Restructuring charges: Premium Fashion$0.3 $1.2 $1.7 $1.2 Value Fashion(0.1) 2.7 (1.3) 5.0 Plus Fashion0.7 4.6 5.4 6.3 Kids Fashion— 1.4 (0.3) 2.1 Corporate1.8 2.3 1.1 5.7Total Severance and benefit costs:2.7 12.2 6.6 20.3Professional fees and other related charges: Plus Fashion1.0 — 2.2 —Corporate11.9 8.0 27.9 11.8Total Professional fees and other related charges12.9 8.0 30.1 11.8Total Cash related charges15.6 20.2 36.7 32.1 Non-cash charges: Impairment of assets: Value Fashion— — 1.1 —Plus Fashion3.2 — 3.2 —Total Non-cash charges3.2 — 4.3 —Total restructuring and other related charges$18.8 $20.2$41.0 $32.1 (i) The charges incurred under the Company's Change for Growth program are more fully described in Note 6. |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jan. 27, 2018 | Jan. 28, 2017 | Jan. 27, 2018 | Jan. 28, 2017 | |
Statement of Comprehensive Income [Abstract] | ||||
Net loss | $ (39.3) | $ (35.2) | $ (32.7) | $ (20.8) |
Other comprehensive income (loss), net of tax: | ||||
Net actuarial loss on defined benefit plan, net of income tax benefit of $0.4 million | 0 | 0 | 0 | (0.7) |
Foreign currency translation adjustment | 2.7 | 1.1 | 0.7 | 0.3 |
Total other comprehensive income (loss) before reclassification | 2.7 | 1.1 | 0.7 | (0.4) |
Reclassification of settlement charges for ANN's pension plan, net of income tax benefit of $1.6 million and $2.9 million, respectively | 0 | 2.5 | 0 | 4.5 |
Total comprehensive loss | $ (36.6) | $ (31.6) | $ (32) | $ (16.7) |
CONDENSED CONSOLIDATED STATEME6
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended |
Jan. 28, 2017 | Jan. 28, 2017 | |
Statement of Comprehensive Income [Abstract] | ||
Net actuarial loss on a defined benefit plan, tax benefit | $ 0.4 | |
Reclassification for settlement of ANN's pension plan, tax benefit | $ 1.6 | $ 2.9 |
CONDENSED CONSOLIDATED STATEME7
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 6 Months Ended | |
Jan. 27, 2018 | Jan. 28, 2017 | |
Cash flows from operating activities: | ||
Net loss | $ (32.7) | $ (20.8) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Depreciation and amortization expense | 179.8 | 190.2 |
Deferred income tax (benefit) expense | (26.7) | 2.1 |
Amortization of deferred rent and occupancy costs | (24.6) | (32.9) |
Stock-based compensation expense | 10.8 | 13.5 |
Impairments of tangible assets | 15.1 | 7.7 |
Non-cash interest expense | 6 | 6 |
Gain on sale of fixed assets | (2) | 0 |
Other non-cash (income) expense, net | (3.1) | 4.5 |
Changes in operating assets and liabilities: | ||
Inventories | 39 | (26.8) |
Accounts payable, accrued liabilities and income tax liabilities | (36.9) | (14.6) |
Deferred income | 32.2 | 34.5 |
Lease-related liabilities | 10.4 | 18.9 |
Other balance sheet changes, net | (11.8) | 32.7 |
Net cash provided by operating activities | 155.5 | 215 |
Cash flows from investing activities: | ||
Capital expenditures | (91.8) | (155.1) |
Payments to Acquire Intangible Assets | 0 | (11.3) |
Proceeds from Sales of Assets | 9.7 | 0 |
Proceeds from the settlement of corporate-owned life insurance policies | 37.2 | 0 |
Proceeds from Sale, Maturity and Collection of Investments | 0 | 0.8 |
Payments for (Proceeds from) Other Investing Activities | 0.1 | 0 |
Net cash used in investing activities | (44.8) | (165.6) |
Cash flows from financing activities: | ||
Redemptions and repayments of term loan | (22.5) | (122.5) |
Proceeds from revolver borrowings | 295.5 | 628.4 |
Repayments of revolver borrowings | (295.5) | (628.4) |
Tax payments related to share-based awards | (0.3) | 0 |
Proceeds from stock options exercised and employee stock purchases | 0 | 0.8 |
Net cash used in financing activities | (22.8) | (121.7) |
Net increase (decrease) in cash and cash equivalents | 87.9 | (72.3) |
Cash and cash equivalents at beginning of period | 325.6 | 371.8 |
Cash and cash equivalents at end of period | $ 413.5 | $ 299.5 |
Description of Business
Description of Business | 6 Months Ended |
Jan. 27, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of Business | Description of Business ascena retail group, inc., a Delaware corporation (“ascena” or the “Company”), is a leading national specialty retailer of apparel for women and tween girls. The Company's operations consist of its ecommerce operations and approximately 4,700 stores throughout the United States, Canada and Puerto Rico. The Company had annual revenues for the fiscal year ended July 29, 2017 of approximately $6.6 billion . The Company and its subsidiaries are collectively referred to herein as the “Company,” “ascena,” “we,” “us,” “our” and “ourselves,” unless the context indicates otherwise. The Company operates its business in four operating segments: Premium Fashion , Value Fashion , Plus Fashion and Kids Fashion . All of our segments sell fashion merchandise to the women's and girls' apparel market across a wide range of ages, sizes and demographics. Our segments consist of specialty retail, outlet and ecommerce as well as licensed franchises in international territories at our Kids Fashion segment. Our Premium Fashion segment consists of our Ann Taylor and LOFT brands; our Value Fashion segment consists of our maurices and dressbarn brands; our Plus Fashion segment consists of our Lane Bryant and Catherines brands; and our Kids Fashion segment consists of our Justice brand. For a more detailed description of each brand's products and markets in which they serve, see Part I, Item 1 "Business" in our Annual Report on Form 10-K for the fiscal year ended July 29, 2017 (the "Fiscal 2017 10-K"). The Company's brands had the following store counts as of January 27, 2018 : Ann Taylor 309 stores; LOFT 679 stores; maurices 993 stores; dressbarn 741 stores; Lane Bryant 754 stores; Catherines 352 stores; and Justice 862 stores. |
Basis of Presentation
Basis of Presentation | 6 Months Ended |
Jan. 27, 2018 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation Basis of Consolidation These unaudited interim consolidated financial statements present all the assets, liabilities, revenues, expenses and cash flows of entities in which the Company has a controlling financial interest and is determined to be the primary beneficiary. All intercompany balances and transactions have been eliminated in consolidation. Interim Financial Statements These interim condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) and are unaudited. In the opinion of management, such condensed consolidated financial statements contain all normal and recurring adjustments necessary to present fairly the condensed consolidated financial condition, results of operations, comprehensive income and cash flows of the Company for the interim periods presented. In addition, certain information and footnote disclosures normally included in financial statements prepared in accordance with the accounting principles generally accepted in the United States of America (“US GAAP”) have been condensed or omitted from this report as permitted by the SEC’s rules and regulations. However, the Company believes that the disclosures herein are adequate to ensure that the information is fairly presented. The condensed consolidated balance sheet data as of July 29, 2017 is derived from the audited consolidated financial statements included in the Company’s Fiscal 2017 10-K, which should be read in conjunction with these interim financial statements. Reference is made to the Fiscal 2017 10-K for a complete set of financial statements. Fiscal Period Fiscal year 2018 will end on August 4, 2018 and will be a 53-week period ("Fiscal 2018") as the Company conforms its fiscal periods to the National Retail Federation calendar. Fiscal year 2017 ended on July 29, 2017 and was a 52-week period (“Fiscal 2017”). The Company's Premium Fashion segment, which historically has followed the National Retail Federation calendar, recognized an extra week during the second quarter of Fiscal 2018, consistent with other retail companies already on that calendar. The Company's Value Fashion , Plus Fashion , and Kids Fashion segments will recognize the extra week in the fourth quarter of Fiscal 2018 due to reporting systems constraints. As a result, the three and six months ended January 27, 2018 include the results of the Value Fashion , Plus Fashion , and Kids Fashion segments for 13 and 26-weeks, respectively, while the results of the Premium Fashion segment are included for 14 and 27-weeks, respectively. The three and six months ended January 28, 2017 were 13 and 26-week periods, respectively, for all segments. The Company's Premium Fashion segment recognized Net sales and Operating income from the extra week of approximately $25 million and $3 million , respectively. |
Recently Issued Accounting Stan
Recently Issued Accounting Standards | 6 Months Ended |
Jan. 27, 2018 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
Recently Issued Accounting Standards | Recently Issued Accounting Standards Recently adopted standards In March 2016, the FASB issued ASU 2016-09, “Improvements to Employee Share-Based Payment Accounting.” The guidance simplifies the accounting for employee share-based payment transactions, including the accounting for income taxes, forfeitures, statutory tax withholding requirements and the classification in the statement of cash flows. The new standard requires excess tax benefits and shortfalls to be recorded within the provision for income taxes in the condensed consolidated statements of operations in the period they are realized. The impact of this change will depend on changes in the Company's stock price and the timing of the exercise of stock options and the vesting of restricted stock units, so the full effect of the standard is not able to be quantified. However, the recognition of these changes within the condensed consolidated statements of operations will likely result in increased volatility of our provision for income taxes and earnings. The Company adopted the guidance on a prospective basis in the first quarter of Fiscal 2018, and has recognized additional non-cash income tax expense of approximately $1.5 million and $4.7 million in the three and six months ended January 27, 2018, respectively. Finally, in connection with the new standard, the Company has elected to maintain its practice of estimating forfeitures when recognizing expense for share-based payment awards rather than accounting for forfeitures when they occur. The other amendments of the standard are not expected to have a material impact on the Company's condensed consolidated financial statements. Recently issued standards In February 2016, the FASB issued ASU 2016-02, "Leases." The guidance requires the lessee to recognize the assets and liabilities for the rights and obligations created by leases with terms of 12 months or more. The guidance is effective for fiscal years beginning after December 15, 2018 and interim periods therein, with early adoption permitted. Adoption of the standard requires a modified retrospective approach where the guidance is applied to the earliest comparative period presented. The Company does not expect that the guidance will have a significant impact on its condensed consolidated statements of cash flows and is currently evaluating the guidance and its impact on its other condensed consolidated financial statements, but expects that it will result in a significant increase to its long-term assets and liabilities. The Company is also in the process of implementing a new lease administration system and identifying changes to its business processes and controls to support adoption of the new standard in Fiscal 2020. In May 2014, the FASB issued ASU 2014-09, "Revenue from Contracts with Customers," which supersedes the revenue recognition requirements in FASB Accounting Standards Codification, "Revenue Recognition (Topic 605)." The guidance requires that an entity recognize revenue in a way that depicts the transfer of promised goods or services to customers in the amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods and services. The guidance is effective for annual reporting periods beginning after December 15, 2017 and interim periods therein, and will be adopted by the Company in Fiscal 2019. The guidance may be applied retrospectively to each period presented or with the cumulative effect recognized as of the initial date of application. The Company is currently in the process of evaluating the impact that adopting ASU 2014-09 will have on its consolidated financial statements and notes thereto. Based on these efforts, the Company currently anticipates that the performance obligations underlying its core revenue streams (its retail store and ecommerce businesses) and related timing of revenue recognition thereof, will remain substantially unchanged. The Company is in the process of evaluating the impact of the new standard on ancillary sources of revenue, such as its loyalty and credit card programs, which represented approximately 2% of total net sales in Fiscal 2017. The Company has not yet determined whether the guidance will be adopted using the full retrospective restatement of all prior periods presented, or using the modified retrospective basis with a cumulative adjustment to opening retained earnings in the year of initial adoption. Finally, the Company is also analyzing the impact of the new standard on its current accounting policies and internal controls. Upon completion of these assessments, the Company will evaluate the impact of adopting the new standard on the Company's condensed consolidated financial statements. |
Inventories
Inventories | 6 Months Ended |
Jan. 27, 2018 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories Inventories substantially consist of finished goods merchandise. Inventory by segment is set forth below: January 27, July 29, (millions) Premium Fashion $ 192.2 $ 208.2 Value Fashion 183.7 180.6 Plus Fashion 152.9 161.9 Kids Fashion 71.5 88.6 Total inventories $ 600.3 $ 639.3 |
Long-Lived Assets Impairment
Long-Lived Assets Impairment | 6 Months Ended |
Jan. 27, 2018 | |
Property, Plant and Equipment [Abstract] | |
Long-Lived Assets Impairment | Long-lived Asset Impairments The charges below reduced the net carrying value of certain long-lived assets to their estimated fair value, as determined using discounted expected cash flows, which are classified as Level 3 measurements in the fair value measurements hierarchy. These impairment charges arose from the Company's routine assessment of under-performing retail stores and are included as a component of Selling, general and administrative expenses in the accompanying condensed consolidated statements of operations for all periods. Impairment charges related to retail store assets by segment are as follows: Three Months Ended Six Months Ended January 27, January 28, January 27, January 28, (millions) Premium Fashion $ — $ — $ — $ 0.7 Value Fashion (a) 2.3 1.2 5.5 3.3 Plus Fashion (a) 1.3 1.5 3.0 2.6 Kids Fashion 0.6 0.3 1.2 1.1 Total impairment charges $ 4.2 $ 3.0 $ 9.7 $ 7.7 ________ (a) The Company incurred additional impairment charges in the three and six months ended January 27, 2018 of $4.3 million and $5.4 million respectively, in connection with the Change for Growth program which are considered to be outside the Company’s typical quarterly real-estate review, and are included within Restructuring and other related charges, as more fully described in Note 6. No such expenses were recorded in the three and six months ended January 28, 2017. |
Restructuring and Other Related
Restructuring and Other Related Charges | 6 Months Ended |
Jan. 27, 2018 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and Other Related Charges | Restructuring and Other Related Charges In October 2016, the Company initiated a transformation plan with the objective of supporting sustainable long-term growth and increasing shareholder value (the "Change for Growth" program). The Change for Growth program is expected to (i) refine the Company's operating model to increase its focus on key customer segments, (ii) reduce the time to bring product to market, (iii) reduce working capital requirements and (iv) enhance the Company's ability to serve customers on any purchasing platform, all while better leveraging the Company's shared service platform. The Company's new operating model is designed to focus on enhancing customer-facing capabilities while eliminating organizational inefficiencies. Activities under the Change for Growth program during the first six months of Fiscal 2018 included the continued transition of certain transaction processing functions in Human Resources and Finance within its brand services group to an independent third-party managed service provider. Other activities during the first half of Fiscal 2018 included the ongoing fleet optimization store program, as the Company continues to renegotiate leases and close stores. In addition, during the second quarter of Fiscal 2018, the Company completed its previously announced relocation of the Catherines brand to Columbus, Ohio and wrote down their former headquarters building in Bensalem, Pennsylvania to fair market value. These charges were recorded within Restructuring and other related charges. The building was sold in the third quarter of Fiscal 2018. As the Company continues to execute on the initiatives identified under the Change for Growth program, we currently expect to incur additional charges in the remainder of Fiscal 2018 of approximately $15 - $25 million . In addition, we have identified capital projects of approximately $40 million , which are expected to be incurred during Fiscal 2018. Of that amount, approximately $20 million was spent in the first six months of Fiscal 2018. The Company may incur significant additional charges and capital expenditures in future periods as it more fully defines incremental Change for Growth program initiatives, and moves into the execution phases of those projects. Actions associated with the Change for Growth program are currently expected to continue through Fiscal 2019. As a result of the Change for Growth program, the Company incurred the following charges, which are included within Restructuring and other related charges, for all periods presented: Three Months Ended Six Months Ended January 27, January 28, January 27, January 28, (millions) Cash restructuring charges: Severance and benefit costs (a) $ 2.7 $ 12.2 $ 6.6 $ 20.3 Professional fees and other related charges (b) 12.9 8.0 30.1 11.8 Total cash charges 15.6 20.2 36.7 32.1 Non-cash charges: Impairment of assets (c) 3.2 — 4.3 — Total non-cash charges 3.2 — 4.3 — Total restructuring and other related charges $ 18.8 $ 20.2 $ 41.0 $ 32.1 _______ (a) Severance and benefit costs in Fiscal 2018 reflect additional severance accruals associated with previously announced initiatives as well as adjustments to true up estimates of previously accrued severance-related costs to reflect amounts actually paid. Fiscal 2017 amounts reflect accruals associated with restructuring announcements made during that period. (b) Professional fees and other related charges in both periods consist of third-party costs incurred in connection with the identification and implementation of transformation initiatives associated with the Change for Growth program as well as third-party costs associated with the relocation of the Catherines brand to Ohio. (c) Includes charges for non-cash asset impairments of $4.3 million and $5.4 million during the three and six months ended January 27, 2018 , respectively, which primarily reflect the write-down of the Bensalem building to fair market value. The amounts for both the three and six months ended January 27, 2018 were offset in part by the write-off of $1.1 million of tenant allowances during the second quarter of Fiscal 2018 as program stores were vacated. A summary of activity for the six months ended January 27, 2018 in the restructuring-related liabilities associated with the Change for Growth program, which is included within Accrued expenses and other current liabilities, is as follows: Severance and benefit costs Professional fees and other related charges Total (millions) Balance at July 29, 2017 $ 17.3 $ 5.1 $ 22.4 Additions charged to expense 6.6 30.1 36.7 Cash payments (14.6 ) (29.0 ) (43.6 ) Balance at January 27, 2018 $ 9.3 $ 6.2 $ 15.5 |
Debt
Debt | 6 Months Ended |
Jan. 27, 2018 | |
Debt Disclosure [Abstract] | |
Debt | Debt Debt consists of the following: January 27, July 29, (millions) Revolving credit facility $ — $ — Less: unamortized debt issuance costs (a) (3.7 ) (4.4 ) (3.7 ) (4.4 ) Term loan 1,574.0 1,596.5 Less: unamortized original issue discount (b) (22.7 ) (25.2 ) unamortized debt issuance costs (b) (26.0 ) (28.8 ) 1,525.3 1,542.5 Less: current portion (44.0 ) (44.0 ) Total long-term debt $ 1,477.6 $ 1,494.1 _______ (a) The unamortized debt issuance costs are amortized on a straight-line basis over the life of the amended revolving credit agreement. (b) The original issue discount and debt issuance costs for the term loan are amortized over the life of the term loan using the interest method based on an imputed interest rate of approximately 6.3% . Amended Revolving Credit Agreement The Company amended its revolving credit facility in August 2015 (the "Amended Revolving Credit Agreement"). The Amended Revolving Credit Agreement provides aggregate revolving commitments up to $600 million , with an optional increase of up to $200 million and expires in August 2020. In February 2018, the Company amended and restated its revolving credit agreement. Reference is made to Note 16 of these condensed consolidated financial statements for more information. As of January 27, 2018 , there were no borrowings under the Amended Revolving Credit Agreement and the Company had $422.0 million of availability under the Amended Revolving Credit Agreement. Under the Amended Revolving Credit Agreement, the Company is required to maintain a fixed charge coverage ratio, as defined in the Amended Revolving Credit Agreement, of at least 1.00 any time in which the Company is in a covenant period, as defined in the Amended Revolving Credit Agreement (the "Covenant Period"). Such Covenant Period is in effect if Availability is less than the greater of (a) 10% of the Credit Limit (the lesser of total Revolving Commitments and the Borrowing Base) and (b) $45 million for three consecutive business days and ends when Availability is greater than these thresholds for thirty consecutive days. The Covenant Period was not in effect as of January 27, 2018 . For a more detailed description of the Company’s Amended Revolving Credit Agreement and restrictions thereunder, refer to Note 12 to the audited consolidated financial statements included in the Fiscal 2017 10-K. Term Loan In connection with the August 2015 acquisition of ANN INC., the Company entered into a $1.8 billion variable-rate term loan (the "Term Loan"), which was issued at a 2% discount and provides for an additional term facility of $200 million . The Term Loan matures on August 21, 2022 and requires quarterly repayments of $22.5 million with a remaining balloon payment of approximately $1.2 billion required at maturity. The Company repaid $22.5 million at the beginning of Fiscal 2018, which was applied to the next future quarterly scheduled payment such that the Company is not required to make its next quarterly payment until August 2018. The Company is also required to make mandatory prepayments in connection with certain prepayment events. As of January 27, 2018 , borrowings under the Term Loan consisted entirely of Eurodollar Borrowings at a rate of 6.125% . For a more detailed description of the Company’s Term Loan and restrictions thereunder, refer to Note 12 to the audited consolidated financial statements included in the Fiscal 2017 10-K. Maturities of Debt The Company's debt matures as follows: Fiscal Year Amount (millions) 2018 $ 21.5 2019 90.0 2020 67.5 2021 90.0 2022 90.0 Thereafter 1,215.0 Total maturities $ 1,574.0 |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jan. 27, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements Fair value is the price that would be received to sell an asset, or paid to transfer a liability, in an orderly transaction between market participants at the measurement date. In evaluating the fair value measurement techniques for recording certain financial assets and liabilities, there is a three-level valuation hierarchy under which financial assets and liabilities are designated. The determination of the applicable level within the hierarchy of a particular financial asset or liability depends on the lowest level of inputs used that are significant to the fair value measurement as of the measurement date as follows: Level 1 Quoted prices for identical instruments in active markets; Level 2 Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are recently traded (not active); and Level 3 Instruments with little, if any, market activity are valued using significant unobservable inputs or valuation techniques. As of January 27, 2018 and July 29, 2017, the Company believes that the carrying values of cash and cash equivalents approximate its estimated fair value based on Level 1 measurements. As the Company’s revolving credit facility is variable rate, the Company believes that there is no significant difference between the estimated fair value and the carrying value as of January 27, 2018 and July 29, 2017. The fair value of the Term Loan was determined to be $1.417 billion as of January 27, 2018 and $1.345 billion as of July 29, 2017 based on quoted market prices from recent transactions, which are considered Level 2 inputs within the fair value hierarchy. The Company’s non-financial instruments, which primarily consist of goodwill, other intangible assets and property and equipment, are not required to be measured at fair values on a recurring basis and are reported at their carrying values. However, on a periodic basis whenever events or changes in circumstances indicate that their carrying value may not be recoverable (and at least annually for goodwill and other indefinite-lived intangible assets), non-financial instruments are assessed for impairment and, if applicable, written-down to (and recorded at) fair values. For further discussion of the determination of the fair value of non-financial assets, see Note 5. |
Income Taxes Income Taxes
Income Taxes Income Taxes | 6 Months Ended |
Jan. 27, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Tax Cuts and Jobs Act - Overview In December 2017, the 2017 Tax Cuts and Jobs Act (the "2017 Act") was signed into law. The 2017 Act makes broad and complex changes to the U.S. tax code that will affect the Company in Fiscal 2018, including, but not limited to: (1) reducing the U.S. federal corporate tax rate; (2) requiring a one-time transition tax on certain unrepatriated earnings of foreign subsidiaries that is payable over eight years at the election of the taxpayer; and (3) bonus depreciation that will allow for full expensing of qualified property placed in service after September 27, 2017. The 2017 Act also establishes new tax laws that could affect the Company in future fiscal years, including, but not limited to: (1) a general elimination of U.S. federal income taxes on dividends from foreign subsidiaries; (2) a new provision that could increase the Company's tax liability on its offshore business (Global Intangible Low Taxed Income, or "GILTI"); (3) creation of the base erosion anti-abuse tax (BEAT), a new minimum tax; (4) a new limitation on deductible interest; (5) elimination and/or limitations on the deductibility of certain benefits; (6) elimination of the Company’s ability to carryback net operating losses ("NOLs"), annual limitation on use of NOLs to 80% and extending the carryforward period from 20 years to an indefinite carryforward; and (7) increased limitations on the deductibility of certain executive compensation. The SEC staff issued Staff Accounting Bulletin Number 118 ("SAB 118"), which provides guidance on accounting for the tax effects of the 2017 Act. SAB 118 provides a measurement period that should not extend beyond one year from the 2017 Act enactment date of December 22, 2017 for companies to complete the accounting under Accounting Standards Codification Topic 740, “Income Taxes” ("ASC 740"). In accordance with SAB 118, a company must reflect the income tax effects of those aspects of the 2017 Act for which the accounting under ASC 740 is complete. To the extent that a company’s accounting for certain income tax effects of the 2017 Act is incomplete, but it is able to determine a reasonable estimate, it must record a provisional estimate in its financial statements. If a company cannot determine a provisional estimate to be included in the financial statements, it should continue to apply ASC 740 on the basis of the provisions of the tax laws that were in effect immediately before the enactment of the 2017 Act. For various reasons that are discussed in greater detail below, the Company has not completed its accounting for the income tax effects of certain elements of the 2017 Act. In cases where the Company was able to make reasonable estimates of the effects of elements for which its analysis is not yet complete, the Company recorded provisional adjustments. If the Company was not yet able to make reasonable estimates of the impact of certain elements, the Company has not recorded any adjustments related to those elements and has continued accounting for them in accordance with ASC 740 on the basis of the tax laws in effect before the 2017 Act. The Company is still in the process of determining the full impact of the 2017 Act, however, based on its current interpretation of the 2017 Act, the Company made reasonable estimates to record provisional amounts during the second quarter of Fiscal 2018, which are discussed in more detail below. However, the Company's accounting for those elements of the 2017 Act is incomplete. Since the Company is still evaluating the provisions of the 2017 Act and expect regulators to issue further guidance, among other things, the Company believes its estimates may change during the remainder of Fiscal 2018. The Company continues to refine such amounts within the measurement period allowed, which will be completed no later than December 2018. A summary of the provisional amounts recorded under the 2017 Act in the second quarter, and described in more detail below, is as follows: Benefit / (Expense) Reduction of U.S. federal corporate tax rate $ 38.6 Transition tax - federal (24.1 ) Transition tax - state (0.7 ) Foreign tax credits valuation allowance (22.6 ) Executive compensation limitation (2.8 ) Indefinite reinvestment assertion 46.5 Estimated Impact of Tax Reform $ 34.9 Provisional adjustments recorded The Company was able to make reasonable estimates of certain effects and, therefore, recorded provisional adjustments that resulted in a $34.9 million net benefit in the second quarter of Fiscal 2018, which is the Company's initial estimate of the following impacts of the 2017 Act: Reduction of U.S. federal corporate tax rate As a result of enactment of the 2017 Act, the Company revised its estimated annual effective tax rate to reflect a change in the U.S. statutory tax rate. The 2017 Act reduces the U.S. federal corporate tax rate to 21% in its fiscal year; however, Section 15 of the Internal Revenue Code stipulates that the reduction in the corporate tax rate is applied to fiscal year taxpayers by computing a blended tax rate, based on the applicable tax rates before and after the effective date of the change in the statutory rate. When applied to the Company’s fiscal year, this blended rate is estimated at 27% for Fiscal 2018. In addition, the Company has recorded a provisional discrete tax benefit of $38.6 million in the second quarter of Fiscal 2018 attributable to remeasuring the Company’s accrued income taxes, deferred tax liabilities and deferred tax assets. Transition Tax The Company recorded a provisional discrete federal tax expense of $24.1 million and a provisional discrete state tax expense of $0.7 million in the second quarter of Fiscal 2018 attributable to the provisional impact of the transition tax. The transition tax is payable at the election of the taxpayer in eight annual installments, with the Company's first payment to be made by the due date of its Federal tax return of November 15, 2018. However, the Company reasonably estimates that it has sufficient NOLs and foreign tax credits to fully offset the federal tax payable for Fiscal 2018. As a result of changes in the federal tax treatment of the Company's offshore entities, the Company feels it is appropriate to provide a valuation allowance against an estimated $22.6 million of foreign tax credits that cannot be used in Fiscal 2018. These excess credits will be instead carried over to Fiscal 2019 and the applicable deferred tax asset ("DTA") will be recorded in the Company's financial statements subject to a valuation allowance. Due to uncertainty about aspects of the tax law, the Company made various assumptions to determine its reasonable estimate that will be refined as additional guidance is issued. Executive Compensation Limitation The 2017 Act expands the definition under Section 162(m) of the Internal Revenue Code (“Section 162(m)”) of a covered employee and provides that, for specified employees, status as a covered employee continues for all subsequent tax years, including years after the death of the individual, and, among other modifications, repeals the exception for performance-based compensation and commissions from the $1 million deduction limitation. In addition, the 2017 Act provides for transitional guidance that will allow certain payments made under written and binding agreements entered into prior to November 2, 2017 to be treated as if they were made under the provisions of Section 162(m) that were in effect prior to enactment of the 2017 Act. The Company, after an initial analysis and using available guidance, has recorded a provisional discrete tax expense of $2.8 million in the second quarter of Fiscal 2018 related to the executive compensation provisions of the 2017 Act. Further revisions to the Company's estimate may be made once additional clarification of the new rules is available. Indefinite Reinvestment Assertion As a result of U.S. tax reform legislation, distributions of profits from non-U.S. subsidiaries are not expected to cause a significant U.S. tax impact in the future. However, these distributions may be subject to U.S. state income taxes and non-U.S. withholding taxes if profits are distributed in future years. The Company has provisionally estimated a deferred tax liability ("DTL") of $1 million for U.S. state taxes and withholding taxes in non-U.S. jurisdictions where earnings are not considered indefinitely reinvested. The Company has reflected a provisional discrete tax benefit of $46.5 million in the second quarter of Fiscal 2018 to reduce the DTL to the provisional amount computed after considering the implications of tax reform. Additional information and analysis is needed before the Company can finalize the DTL attributable to unrepatriated earnings. Provisional adjustments not recorded The Company's accounting for the following elements of the 2017 Act is incomplete, and the Company was not able to make reasonable estimates of the effects, therefore, no provisional adjustments were recorded: GILTI The 2017 Act creates a new requirement that certain income earned by controlled foreign corporations (CFCs) must be included currently in the gross income of the CFCs’ U.S. shareholder. GILTI is the excess of the shareholder’s “net CFC tested income” over the net deemed tangible income return, which is currently defined as the excess of (1) 10% of the aggregate of the U.S. shareholder’s pro rata share of the qualified business asset investment of each CFC with respect to which it is a U.S. shareholder over (2) the amount of certain interest expense taken into account in the determination of net CFC-tested income. The Company will not be subject to the GILTI provisions until Fiscal 2019. Because of the complexity of the new GILTI tax rules, the Company is continuing to evaluate this provision of the 2017 Act and the application of ASC 740. Under U.S. GAAP, the Company is allowed to make an accounting policy choice of either (1) treating taxes due on future U.S. inclusions in taxable income related to GILTI as a current-period expense when incurred (the “period cost method”) or (2) factoring such amounts into a Company’s measurement of its deferred taxes (the “deferred method”). The Company’s selection of an accounting policy with respect to the new GILTI tax rules will depend, in part, on analyzing its global income to determine whether the Company expects to have future U.S. inclusions in taxable income related to GILTI and, if so, what the impact is expected to be. Because whether the Company expects to have future U.S. inclusions in taxable income related to GILTI depends not only on its current structure and estimated future results of global operations but also the Company’s intent and ability to modify its structure and/or its business, the Company is not yet able to reasonably estimate the effect of this provision of the 2017 Act. Therefore, the Company has not made any adjustments related to potential GILTI tax in its financial statements and has not made a policy decision regarding whether to record deferred taxes on GILTI. Other items Deductibility of Interest Expense The 2017 Act provides for a limitation on the deduction of business interest beginning with the Company's 2019 fiscal tax year. The Company believes that for the initial four years that the limitation is applicable, which are fiscal years 2019-2022, a limitation should not apply. After Fiscal 2022, because of the scheduled statutory changes in the computation of adjusted taxable income, a limitation is more likely to apply. Effective Tax Rate The Company’s effective tax rate is reflective of the jurisdictions where the Company has operations. The effective tax rates for the second quarter and first 26 weeks of Fiscal 2018 were 35.8% and 31.4% , respectively. The effective tax rates were impacted by the provisional net discrete tax benefit from the 2017 Tax Act as discussed above. This was offset by the discrete tax expense for the valuation allowance on the Company’s net state DTA discussed below and accounting for share-based compensation payments which is discussed in Note 3 to the unaudited condensed consolidated financial statements. As a result of the Company’s recent financial performance and the limitations placed on the use of state income tax NOLs, the Company has determined it is appropriate to place a valuation allowance on certain of the Company’s net state DTAs. This discrete tax expense in the second quarter of Fiscal 2018 is $23.3 million after the federal income tax effect. The 2017 Act passed into law an indefinite lived carryover of federal NOLs. For certain states that automatically conform to the 2017 Act, the NOL carryovers automatically become indefinite lived unless those states pass legislation to decouple from the federal provisions. The Company believes that individual states are still assessing the impact of the 2017 Act and to the extent states conform to the federal indefinite lived carryover of NOLs, the conformity could have an impact on the Company’s need for the valuation allowance on the state income tax DTA. As discussed above, in total, the Company has increased its valuation allowance by $45.9 million as a result of its recent financial performance and limitations that will be placed on the use of foreign tax credits after Fiscal 2018. Any portion of this valuation allowance attributable to the 2017 Act will continue to be reassessed during the measurement period provided by SAB 118 and adjusted if appropriate. |
Equity
Equity | 6 Months Ended |
Jan. 27, 2018 | |
Equity [Abstract] | |
Equity | Equity Six Months Ended Summary of Changes in Equity : January 27, January 28, (millions) Balance at beginning of period $ 821.0 $ 1,863.3 Net loss (32.7 ) (20.8 ) Total other comprehensive income 0.7 4.1 Common stock issued and equity grants made pursuant to stock-based compensation plans 10.8 13.2 Other (0.3 ) (0.3 ) Balance at end of period $ 799.5 $ 1,859.5 Common Stock Repurchase Program In December 2015, the Company’s Board of Directors authorized a $200 million share repurchase program (the “2016 Stock Repurchase Program”). There were no repurchases of common stock by the Company during the six months ended January 27, 2018 and the remaining availability was approximately $181.4 million at January 27, 2018 . Net Loss per Common Share Basic net loss per common share is computed by dividing the net loss applicable to common shares after preferred dividend requirements, if any, by the weighted-average number of common shares outstanding during the period. Diluted net loss per common share adjusts basic net loss per common share for the effects of outstanding stock options, restricted stock units and any other potentially dilutive financial instruments, only in the periods in which such effect is dilutive under the treasury stock method. The weighted-average number of common shares outstanding used to calculate basic net loss per common share is reconciled to those shares used in calculating diluted net loss per common share as follows: Three Months Ended Six Months Ended January 27, January 28, January 27, January 28, (millions) Basic 196.1 194.8 195.8 194.6 Dilutive effect of stock options and restricted stock units (a) — — — — Diluted shares 196.1 194.8 195.8 194.6 (a) There was no dilutive effect of stock options and restricted stock units for the three and six months ended January 27, 2018 and January 28, 2017 as the impact of these items was anti-dilutive using the treasury stock method. Options to purchase shares of common stock at an exercise price greater than the average market price of the common stock during the reporting period are anti-dilutive, and therefore not included in the computation of diluted net loss per common share. Any performance or market-based restricted stock units outstanding are included in the computation of diluted shares only to the extent the underlying performance or market conditions (a) are satisfied prior to the end of the reporting period or (b) would be satisfied if the end of the reporting period was the end of the related contingency period, and the result would be dilutive under the treasury stock method. For the three and six months ended January 27, 2018 and January 28, 2017 , 24.3 million and 21.2 million shares, respectively, of anti-dilutive options and/or restricted stock units were excluded from the diluted share calculations. |
Stock-based Compensation
Stock-based Compensation | 6 Months Ended |
Jan. 27, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-based Compensation | Stock-based Compensation As of January 27, 2018 , there were approximately 8.4 million shares remaining under the 2016 Omnibus Incentive Plan available for future grants. The Company issues new shares of common stock when stock option awards are exercised and restricted stock units vest. Impact on Results A summary of the total compensation expense and associated income tax benefit recognized related to stock-based compensation arrangements is as follows: Three Months Ended Six Months Ended January 27, January 28, January 27, January 28, (millions) Compensation expense $ 4.8 $ 6.5 $ 10.8 $ 13.5 Income tax benefit $ (0.9 ) $ (2.5 ) $ (3.2 ) $ (5.1 ) Stock Options The Company’s weighted-average assumptions used to estimate the fair value of stock options granted during the periods presented were as follows: Six Months Ended January 27, January 28, Expected term (years) 5.1 5.1 Expected volatility 43.7 % 37.3 % Risk-free interest rate 1.9 % 1.2 % Expected dividend yield — % — % Weighted-average grant date fair value $ 0.98 $ 1.95 A summary of the stock option activity under all plans during the six months ended January 27, 2018 is as follows: Number of Shares Weighted- Average Exercise Price Weighted- Average Remaining Contractual Terms Aggregate Intrinsic Value (a) (thousands) (years) (millions) Options outstanding – July 29, 2017 16,413.7 $ 11.42 4.5 $ 0.2 Granted 5,066.8 2.40 Exercised — — Canceled/Forfeited (1,623.8 ) 11.29 Options outstanding – January 27, 2018 19,856.7 $ 9.13 4.7 $ 0.1 Options vested and expected to vest at January 27, 2018 (b) 19,423.0 $ 9.24 4.7 $ 0.1 Options exercisable at January 27, 2018 10,364.0 $ 13.17 3.5 $ — _______ (a) The intrinsic value is the amount by which the market price at the end of the period of the underlying share of stock exceeds the exercise price of the stock option. (b) The number of options expected to vest takes into consideration estimated expected forfeitures. As of January 27, 2018 , there was $12.7 million of total unrecognized compensation cost related to non-vested options, which is expected to be recognized over a remaining weighted-average vesting period of 1.5 years. There were no options exercised during the three and six months ended January 27, 2018 and January 28, 2017 . The total grant date fair value of options that vested during the six months ended January 27, 2018 and January 28, 2017 was approximately $11.0 million and $13.1 million , respectively. Of these amounts, $0.3 million was vested during the three months ended January 27, 2018 and January 28, 2017 . Restricted Equity Awards A summary of restricted equity awards activity during the six months ended January 27, 2018 is as follows: Service-based Restricted Equity Awards Number of Shares Weighted- Average Grant Date Fair Value Per Share (thousands) Nonvested at July 29, 2017 3,110.0 $ 8.05 Granted 2,531.9 2.47 Vested (1,100.8 ) 8.61 Canceled/Forfeited (137.4 ) 7.39 Nonvested at January 27, 2018 4,403.7 $ 4.72 As of January 27, 2018 , there was $11.2 million of total unrecognized compensation cost related to the service-based Restricted Equity Awards, which is expected to be recognized over a remaining weighted-average vesting period of 2.0 years . |
Employee Benefit Plans
Employee Benefit Plans | 6 Months Ended |
Jan. 27, 2018 | |
Employee Benefit Plans [Abstract] | |
Employee Benefit Plans | Employee Benefit Plans Long-Term Incentive Plan During Fiscal 2016, the Company created a long-term incentive program ("LTIP") for vice presidents and above under the 2016 Omnibus Incentive Plan. The LTIP entitles the holder to either a cash payment, or a stock payment for certain officers at the Company's option, equal to a predetermined target amount earned at the end of a performance period and is subject to (a) the grantee’s continuing employment and (b) the Company’s achievement of certain performance and market-based goals over the performance period. Compensation expense for the LTIP is recognized over the related performance periods based on the expected achievement of the performance goals. The Company recognized $(10.0) million in compensation expense for the six months ended January 27, 2018 and $6.4 million for the six months ended January 28, 2017 , which was recorded within Selling, general and administrative expenses in the condensed consolidated financial statements. Of these amounts, $(3.9) million was recognized during the three months ended January 27, 2018 and $2.7 million was recognized during the three months ended January 28, 2017 . The net credits recorded in Fiscal 2018 primarily reflect (1) the Compensation Committee of the Board of Directors' determination in late September 2017 that although the metrics within the 2017 LTIP were achieved, negative discretion should be applied based upon the overall performance of the Company, thus the LTIP amounts were not distributed and (2) the Company's determination in the second quarter of Fiscal 2018 that certain performance targets for the 2018 LTIP would not be achieved. As of January 27, 2018 , there was $34.6 million of expected unrecognized compensation cost related to the LTIP, which is expected to be recognized over a remaining weighted-average vesting period of 2.2 years . As of January 27, 2018 , the liability for LTIP Awards was $12.7 million , of which $6.5 million was classified within Accrued expenses and other current liabilities and $6.2 million was classified within Other non-current liabilities in the condensed consolidated balance sheets. No amounts were paid during the six months ended January 27, 2018 . The Company paid $10.4 million to settle such liabilities during the six months ended January 28, 2017 . Defined Benefit Plan In connection with the August 2015 acquisition of ANN INC., the Company assumed a pension plan which was frozen and then decided in Fiscal 2016 to terminate the plan. Under the terms of liquidation, some participants elected to receive lump-sum payments while the others elected to remain in the plan. The remaining obligations under the plan were transferred to a third-party and settled through a non-participating annuity contract in the second quarter of Fiscal 2017. During the first quarter of Fiscal 2017, lump sum payments were made to its participants, and the associated accumulated actuarial loss of $2.0 million , net of an income tax benefit of $1.3 million , was reclassified from Accumulated other comprehensive loss to Acquisition and integration expenses. During the second quarter of Fiscal 2017, the remaining accumulated actuarial loss of $4.1 million (less an income tax benefit of $1.6 million ) was reclassified from Accumulated other comprehensive loss to Acquisition and integration expenses. For the six months ended January 28, 2017, the Company expensed $8.0 million reflecting settlement charges and professional fees, which is included within Acquisition and integration expenses in the condensed consolidated statement of operations. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jan. 27, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Legal Matters Justice Pricing Litigation The Company is a defendant in class action lawsuits that allege that Justice ’s promotional practices violated state comparative pricing and other laws. A description of the lawsuits comprising the Justice pricing litigation is discussed in the Fiscal 2017 10-K and should be read in conjunction with the update below. On September 24, 2015, a formal settlement agreement was signed with the plaintiffs in the Rougvie case to settle the lawsuit on a class basis for the period of January 1, 2012 through February 28, 2015 for approximately $51 million , including payments to members of the class and payment of legal fees and expenses of settlement administration. On July 29, 2016, the Court granted the parties’ joint motion for final approval of settlement and dismissed the case with prejudice. After an appeal to the United States Court of Appeals for the Third Circuit was dismissed, distributions to class members pursuant to the settlement took place in the fall of 2017. To the extent some of the pricing lawsuits previously discussed are still stayed, it is likely that they will be formally dismissed within the coming months. If the pricing lawsuits are not finally resolved on a class basis for approximately $51 million in accordance with the settlement, the ultimate resolution of these matters may or may not result in an additional material loss which cannot be reasonably estimated at this time. There is some possibility that individual class members who excluded themselves from the settlement may seek to pursue their own or additional claims, although the Company believes that the liability associated with those cases would not be material. Other litigation The Company is involved in routine litigation arising in the normal course of business. In the opinion of management, such litigation is not expected to have a material adverse effect on the Company’s condensed consolidated financial statements. |
Segment Information
Segment Information | 6 Months Ended |
Jan. 27, 2018 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information The Company's segment reporting structure reflects an approach designed to optimize the operational coordination and resource allocation of its businesses across multiple functional areas including specialty retail, ecommerce and licensing. The Company classifies its businesses into four operating segments: Premium Fashion , Value Fashion , Plus Fashion and Kids Fashion . Each segment is reviewed by the Company's Chief Executive Officer, who functions as the chief operating decision maker (the "CODM"), and is responsible for reviewing the operating activities, financial results, forecasts and business plans of the segment. Accordingly, the Company's CODM evaluates performance and allocates resources at the segment level. The four operating segments are as follows: • Premium Fashion segment – consists primarily of the specialty retail, outlet and ecommerce operations of the Ann Taylor and LOFT brands. • Value Fashion segment – consists of the specialty retail, outlet and ecommerce operations of the maurices and dressbarn brands. • Plus Fashion segment – consists of the specialty retail, outlet and ecommerce operations of the Lane Bryant and Catherines brands. • Kids Fashion segment – consists of the specialty retail, outlet, ecommerce and licensing operations of the Justice brand. The accounting policies of the Company’s operating segments are consistent with those described in the Fiscal 2017 10-K. All intercompany revenues are eliminated in consolidation. Corporate overhead expenses are allocated to the segments based upon specific usage or other reasonable allocation methods. Certain expenses, including acquisition and integration expenses and restructuring and other related charges, have not been allocated to the segments, which is consistent with the CODM's evaluation of the segments. Net sales, operating (loss) income and depreciation and amortization expense for each operating segment are as follows: Three Months Ended Six Months Ended January 27, January 28, January 27, January 28, (millions) Net sales: Premium Fashion (a) $ 609.6 $ 608.2 $ 1,164.7 $ 1,187.4 Value Fashion 439.3 481.6 910.6 985.7 Plus Fashion 340.5 347.3 644.7 665.0 Kids Fashion 329.6 311.1 588.7 588.5 Total net sales $ 1,719.0 $ 1,748.2 $ 3,308.7 $ 3,426.6 Operating (loss) income: Premium Fashion (a) $ 4.5 $ 22.7 $ 43.0 $ 66.3 Value Fashion (38.4 ) (19.8 ) (27.5 ) (7.7 ) Plus Fashion 1.0 (10.0 ) 0.1 (3.8 ) Kids Fashion 19.4 (1.6 ) 35.1 11.6 Unallocated acquisition and integration expenses (3.3 ) (15.8 ) (5.4 ) (27.8 ) Unallocated restructuring and other related charges (b) (18.8 ) (20.2 ) (41.0 ) (32.1 ) Total operating (loss) income $ (35.6 ) $ (44.7 ) $ 4.3 $ 6.5 Depreciation and amortization expense: Premium Fashion (a) $ 31.6 $ 34.8 $ 64.5 $ 69.0 Value Fashion 26.7 27.0 53.0 53.4 Plus Fashion 15.7 16.7 31.1 32.8 Kids Fashion 15.8 17.8 31.2 35.0 Total depreciation and amortization expense $ 89.8 $ 96.3 $ 179.8 $ 190.2 _______ (a) The results of the Premium Fashion segment are included within the Company's condensed consolidated results of operations for the three months ended January 27, 2018 from October 29, 2017 to February 3, 2018 and for the six months ended January 27, 2018 from July 30, 2017 to February 3, 2018. b) Restructuring and other related charges are as follows: Three Months Ended Six Months Ended January 27, January 28, January 27, January 28, (millions) Cash related charges (i) : Restructuring charges: Premium Fashion $ 0.3 $ 1.2 $ 1.7 $ 1.2 Value Fashion (0.1 ) 2.7 (1.3 ) 5.0 Plus Fashion 0.7 4.6 5.4 6.3 Kids Fashion — 1.4 (0.3 ) 2.1 Corporate 1.8 2.3 1.1 5.7 Total Severance and benefit costs: 2.7 12.2 6.6 20.3 Professional fees and other related charges: Plus Fashion 1.0 — 2.2 — Corporate 11.9 8.0 27.9 11.8 Total Professional fees and other related charges 12.9 8.0 30.1 11.8 Total Cash related charges 15.6 20.2 36.7 32.1 Non-cash charges: Impairment of assets: Value Fashion — — 1.1 — Plus Fashion 3.2 — 3.2 — Total Non-cash charges 3.2 — 4.3 — Total restructuring and other related charges $ 18.8 $ 20.2 $ 41.0 $ 32.1 (i) The charges incurred under the Company's Change for Growth program are more fully described in Note 6. |
Additional Financial Informatio
Additional Financial Information | 6 Months Ended |
Jan. 27, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Additional Financial Information | Additional Financial Information Six Months Ended Cash Interest and Taxes: January 27, January 28, (millions) Cash paid for interest $ 54.6 $ 52.3 Cash paid for income taxes $ 5.7 $ 6.1 Non-cash Transactions Non-cash investing activities include accrued purchases of fixed assets in the amount of $15.3 million as of January 27, 2018 and $17.8 million as of January 28, 2017 . |
Subsequent Events Subsequent Ev
Subsequent Events Subsequent Events | 6 Months Ended |
Jan. 27, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events [Text Block] | Subsequent Events On February 27, 2018, the Company and certain of its domestic subsidiaries entered into an amendment and restatement agreement (the “2018 Amended and Restated Revolving Credit Agreement") to amend the Company’s existing revolving credit agreement dated as of August 21, 2015, as amended October 31, 2016, among the lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent. The 2018 Amended and Restated Revolving Credit Agreement provides a senior secured asset based revolving credit facility up to $500 million with an optional increase of up to $200 million . The revolving credit facility may be used for the issuance of letters of credit, to fund working capital requirements and capital expenditures, and for general corporate purposes. The revolving credit facility also includes a $200 million letter of credit sublimit, of which $100 million can be used for standby letters of credit, and a $30 million swingline loan sublimit. The interest rates, pricing and fees under the agreement fluctuate based on average daily availability, as defined therein. The 2018 Amended and Restated Revolving Credit Agreement extends the maturity of the Company’s revolving credit facility from August 2020 to the earlier of (i) five years from the closing date (or February 2023) or (ii) 91 days prior to the maturity date of the Term Loans (unless (a) the outstanding principal amount of the Term Loans is $150 million or less and (b) the Company maintains liquidity (which can include (1) availability under the revolving credit facility in excess of the greater of $100 million and 20% of the credit limit and (2) cash held in a controlled account of the administrative agent of the revolving credit facility) in an amount equal to the outstanding principal amount of the remaining Term Loans. There are no mandatory reductions in aggregate revolving commitments throughout the term of the 2018 Amended and Restated Revolving Credit Agreement. However, availability under the revolving credit facility is limited to a percentage of the amount of eligible cash, eligible inventory and eligible credit card accounts receivable as defined in the 2018 Amended and Restated Revolving Credit Agreement. |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 6 Months Ended |
Jan. 27, 2018 | |
Accounting Policies [Abstract] | |
Interim Financial Statements | Interim Financial Statements These interim condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) and are unaudited. In the opinion of management, such condensed consolidated financial statements contain all normal and recurring adjustments necessary to present fairly the condensed consolidated financial condition, results of operations, comprehensive income and cash flows of the Company for the interim periods presented. In addition, certain information and footnote disclosures normally included in financial statements prepared in accordance with the accounting principles generally accepted in the United States of America (“US GAAP”) have been condensed or omitted from this report as permitted by the SEC’s rules and regulations. However, the Company believes that the disclosures herein are adequate to ensure that the information is fairly presented. The condensed consolidated balance sheet data as of July 29, 2017 is derived from the audited consolidated financial statements included in the Company’s Fiscal 2017 10-K, which should be read in conjunction with these interim financial statements. Reference is made to the Fiscal 2017 10-K for a complete set of financial statements. |
Fiscal Period | Fiscal Period Fiscal year 2018 will end on August 4, 2018 and will be a 53-week period ("Fiscal 2018") as the Company conforms its fiscal periods to the National Retail Federation calendar. Fiscal year 2017 ended on July 29, 2017 and was a 52-week period (“Fiscal 2017”). The Company's Premium Fashion segment, which historically has followed the National Retail Federation calendar, recognized an extra week during the second quarter of Fiscal 2018, consistent with other retail companies already on that calendar. The Company's Value Fashion , Plus Fashion , and Kids Fashion segments will recognize the extra week in the fourth quarter of Fiscal 2018 due to reporting systems constraints. As a result, the three and six months ended January 27, 2018 include the results of the Value Fashion , Plus Fashion , and Kids Fashion segments for 13 and 26-weeks, respectively, while the results of the Premium Fashion segment are included for 14 and 27-weeks, respectively. The three and six months ended January 28, 2017 were 13 and 26-week periods, respectively, for all segments. The Company's Premium Fashion segment recognized Net sales and Operating income from the extra week of approximately $25 million and $3 million , respectively. |
Recently Issued Accounting St25
Recently Issued Accounting Standards Recently Issued Accounting Standards (Policies) | 6 Months Ended |
Jan. 27, 2018 | |
Accounting Policies [Abstract] | |
Recently Issued Accounting Standards | Recently Issued Accounting Standards Recently adopted standards In March 2016, the FASB issued ASU 2016-09, “Improvements to Employee Share-Based Payment Accounting.” The guidance simplifies the accounting for employee share-based payment transactions, including the accounting for income taxes, forfeitures, statutory tax withholding requirements and the classification in the statement of cash flows. The new standard requires excess tax benefits and shortfalls to be recorded within the provision for income taxes in the condensed consolidated statements of operations in the period they are realized. The impact of this change will depend on changes in the Company's stock price and the timing of the exercise of stock options and the vesting of restricted stock units, so the full effect of the standard is not able to be quantified. However, the recognition of these changes within the condensed consolidated statements of operations will likely result in increased volatility of our provision for income taxes and earnings. The Company adopted the guidance on a prospective basis in the first quarter of Fiscal 2018, and has recognized additional non-cash income tax expense of approximately $1.5 million and $4.7 million in the three and six months ended January 27, 2018, respectively. Finally, in connection with the new standard, the Company has elected to maintain its practice of estimating forfeitures when recognizing expense for share-based payment awards rather than accounting for forfeitures when they occur. The other amendments of the standard are not expected to have a material impact on the Company's condensed consolidated financial statements. Recently issued standards In February 2016, the FASB issued ASU 2016-02, "Leases." The guidance requires the lessee to recognize the assets and liabilities for the rights and obligations created by leases with terms of 12 months or more. The guidance is effective for fiscal years beginning after December 15, 2018 and interim periods therein, with early adoption permitted. Adoption of the standard requires a modified retrospective approach where the guidance is applied to the earliest comparative period presented. The Company does not expect that the guidance will have a significant impact on its condensed consolidated statements of cash flows and is currently evaluating the guidance and its impact on its other condensed consolidated financial statements, but expects that it will result in a significant increase to its long-term assets and liabilities. The Company is also in the process of implementing a new lease administration system and identifying changes to its business processes and controls to support adoption of the new standard in Fiscal 2020. In May 2014, the FASB issued ASU 2014-09, "Revenue from Contracts with Customers," which supersedes the revenue recognition requirements in FASB Accounting Standards Codification, "Revenue Recognition (Topic 605)." The guidance requires that an entity recognize revenue in a way that depicts the transfer of promised goods or services to customers in the amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods and services. The guidance is effective for annual reporting periods beginning after December 15, 2017 and interim periods therein, and will be adopted by the Company in Fiscal 2019. The guidance may be applied retrospectively to each period presented or with the cumulative effect recognized as of the initial date of application. The Company is currently in the process of evaluating the impact that adopting ASU 2014-09 will have on its consolidated financial statements and notes thereto. Based on these efforts, the Company currently anticipates that the performance obligations underlying its core revenue streams (its retail store and ecommerce businesses) and related timing of revenue recognition thereof, will remain substantially unchanged. The Company is in the process of evaluating the impact of the new standard on ancillary sources of revenue, such as its loyalty and credit card programs, which represented approximately 2% of total net sales in Fiscal 2017. The Company has not yet determined whether the guidance will be adopted using the full retrospective restatement of all prior periods presented, or using the modified retrospective basis with a cumulative adjustment to opening retained earnings in the year of initial adoption. Finally, the Company is also analyzing the impact of the new standard on its current accounting policies and internal controls. Upon completion of these assessments, the Company will evaluate the impact of adopting the new standard on the Company's condensed consolidated financial statements. |
Inventories (Tables)
Inventories (Tables) | 6 Months Ended |
Jan. 27, 2018 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventories by Brand | Inventories substantially consist of finished goods merchandise. Inventory by segment is set forth below: January 27, July 29, (millions) Premium Fashion $ 192.2 $ 208.2 Value Fashion 183.7 180.6 Plus Fashion 152.9 161.9 Kids Fashion 71.5 88.6 Total inventories $ 600.3 $ 639.3 |
Long-Lived Assets Impairment (T
Long-Lived Assets Impairment (Tables) | 6 Months Ended |
Jan. 27, 2018 | |
Property, Plant and Equipment [Abstract] | |
Impairment charges related to long-lived tangible assets by segment | Impairment charges related to retail store assets by segment are as follows: Three Months Ended Six Months Ended January 27, January 28, January 27, January 28, (millions) Premium Fashion $ — $ — $ — $ 0.7 Value Fashion (a) 2.3 1.2 5.5 3.3 Plus Fashion (a) 1.3 1.5 3.0 2.6 Kids Fashion 0.6 0.3 1.2 1.1 Total impairment charges $ 4.2 $ 3.0 $ 9.7 $ 7.7 ________ (a) The Company incurred additional impairment charges in the three and six months ended January 27, 2018 of $4.3 million and $5.4 million respectively, in connection with the Change for Growth program which are considered to be outside the Company’s typical quarterly real-estate review, and are included within Restructuring and other related charges, as more fully described in Note 6. No such expenses were recorded in the three and six months ended January 28, 2017. |
Restructuring and Other Relat28
Restructuring and Other Related Charges Restructuring and Other Related Charges (Tables) | 6 Months Ended |
Jan. 27, 2018 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and other related charges | As a result of the Change for Growth program, the Company incurred the following charges, which are included within Restructuring and other related charges, for all periods presented: Three Months Ended Six Months Ended January 27, January 28, January 27, January 28, (millions) Cash restructuring charges: Severance and benefit costs (a) $ 2.7 $ 12.2 $ 6.6 $ 20.3 Professional fees and other related charges (b) 12.9 8.0 30.1 11.8 Total cash charges 15.6 20.2 36.7 32.1 Non-cash charges: Impairment of assets (c) 3.2 — 4.3 — Total non-cash charges 3.2 — 4.3 — Total restructuring and other related charges $ 18.8 $ 20.2 $ 41.0 $ 32.1 _______ (a) Severance and benefit costs in Fiscal 2018 reflect additional severance accruals associated with previously announced initiatives as well as adjustments to true up estimates of previously accrued severance-related costs to reflect amounts actually paid. Fiscal 2017 amounts reflect accruals associated with restructuring announcements made during that period. (b) Professional fees and other related charges in both periods consist of third-party costs incurred in connection with the identification and implementation of transformation initiatives associated with the Change for Growth program as well as third-party costs associated with the relocation of the Catherines brand to Ohio. (c) Includes charges for non-cash asset impairments of $4.3 million and $5.4 million during the three and six months ended January 27, 2018 , respectively, which primarily reflect the write-down of the Bensalem building to fair market value. The amounts for both the three and six months ended January 27, 2018 were offset in part by the write-off of $1.1 million of tenant allowances during the second quarter of Fiscal 2018 as program stores were vacated. Restructuring and other related charges are as follows: Three Months Ended Six Months Ended January 27, January 28, January 27, January 28, (millions) Cash related charges (i) : Restructuring charges: Premium Fashion $ 0.3 $ 1.2 $ 1.7 $ 1.2 Value Fashion (0.1 ) 2.7 (1.3 ) 5.0 Plus Fashion 0.7 4.6 5.4 6.3 Kids Fashion — 1.4 (0.3 ) 2.1 Corporate 1.8 2.3 1.1 5.7 Total Severance and benefit costs: 2.7 12.2 6.6 20.3 Professional fees and other related charges: Plus Fashion 1.0 — 2.2 — Corporate 11.9 8.0 27.9 11.8 Total Professional fees and other related charges 12.9 8.0 30.1 11.8 Total Cash related charges 15.6 20.2 36.7 32.1 Non-cash charges: Impairment of assets: Value Fashion — — 1.1 — Plus Fashion 3.2 — 3.2 — Total Non-cash charges 3.2 — 4.3 — Total restructuring and other related charges $ 18.8 $ 20.2 $ 41.0 $ 32.1 (i) The charges incurred under the Company's Change for Growth program are more fully described in Note 6. |
Restructuring and Other Relat29
Restructuring and Other Related Charges Restructuring - Related Liabilities (Tables) | 6 Months Ended |
Jan. 27, 2018 | |
Restructuring - Related Liabilities [Abstract] | |
Schedule of Restructuring Reserve by Type of Cost [Table Text Block] | A summary of activity for the six months ended January 27, 2018 in the restructuring-related liabilities associated with the Change for Growth program, which is included within Accrued expenses and other current liabilities, is as follows: Severance and benefit costs Professional fees and other related charges Total (millions) Balance at July 29, 2017 $ 17.3 $ 5.1 $ 22.4 Additions charged to expense 6.6 30.1 36.7 Cash payments (14.6 ) (29.0 ) (43.6 ) Balance at January 27, 2018 $ 9.3 $ 6.2 $ 15.5 |
Debt (Tables)
Debt (Tables) | 6 Months Ended |
Jan. 27, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | Debt consists of the following: January 27, July 29, (millions) Revolving credit facility $ — $ — Less: unamortized debt issuance costs (a) (3.7 ) (4.4 ) (3.7 ) (4.4 ) Term loan 1,574.0 1,596.5 Less: unamortized original issue discount (b) (22.7 ) (25.2 ) unamortized debt issuance costs (b) (26.0 ) (28.8 ) 1,525.3 1,542.5 Less: current portion (44.0 ) (44.0 ) Total long-term debt $ 1,477.6 $ 1,494.1 _______ (a) The unamortized debt issuance costs are amortized on a straight-line basis over the life of the amended revolving credit agreement. (b) The original issue discount and debt issuance costs for the term loan are amortized over the life of the term loan using the interest method based on an imputed interest rate of approximately 6.3% . |
Schedule of Maturities of Long-term Debt | The Company's debt matures as follows: Fiscal Year Amount (millions) 2018 $ 21.5 2019 90.0 2020 67.5 2021 90.0 2022 90.0 Thereafter 1,215.0 Total maturities $ 1,574.0 |
Income Taxes Income Taxes (Tabl
Income Taxes Income Taxes (Tables) | 6 Months Ended |
Jan. 27, 2018 | |
Income Tax Disclosure [Abstract] | |
Provisional adjustments | Benefit / (Expense) Reduction of U.S. federal corporate tax rate $ 38.6 Transition tax - federal (24.1 ) Transition tax - state (0.7 ) Foreign tax credits valuation allowance (22.6 ) Executive compensation limitation (2.8 ) Indefinite reinvestment assertion 46.5 Estimated Impact of Tax Reform $ 34.9 |
Equity (Tables)
Equity (Tables) | 6 Months Ended |
Jan. 27, 2018 | |
Equity [Abstract] | |
Summary of Changes in Equity | Six Months Ended Summary of Changes in Equity : January 27, January 28, (millions) Balance at beginning of period $ 821.0 $ 1,863.3 Net loss (32.7 ) (20.8 ) Total other comprehensive income 0.7 4.1 Common stock issued and equity grants made pursuant to stock-based compensation plans 10.8 13.2 Other (0.3 ) (0.3 ) Balance at end of period $ 799.5 $ 1,859.5 |
Schedule of Weighted Average Number of Shares | Three Months Ended Six Months Ended January 27, January 28, January 27, January 28, (millions) Basic 196.1 194.8 195.8 194.6 Dilutive effect of stock options and restricted stock units (a) — — — — Diluted shares 196.1 194.8 195.8 194.6 (a) There was no dilutive effect of stock options and restricted stock units for the three and six months ended January 27, 2018 and January 28, 2017 as the impact of these items was anti-dilutive using the treasury stock method. |
Stock-based Compensation (Table
Stock-based Compensation (Tables) | 6 Months Ended |
Jan. 27, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Summary of Total Compensation Expense and Associated Income Tax Benefit | A summary of the total compensation expense and associated income tax benefit recognized related to stock-based compensation arrangements is as follows: Three Months Ended Six Months Ended January 27, January 28, January 27, January 28, (millions) Compensation expense $ 4.8 $ 6.5 $ 10.8 $ 13.5 Income tax benefit $ (0.9 ) $ (2.5 ) $ (3.2 ) $ (5.1 ) |
Weighted-Average Assumptions used to Estimate Fair Value of Stock Options Granted | The Company’s weighted-average assumptions used to estimate the fair value of stock options granted during the periods presented were as follows: Six Months Ended January 27, January 28, Expected term (years) 5.1 5.1 Expected volatility 43.7 % 37.3 % Risk-free interest rate 1.9 % 1.2 % Expected dividend yield — % — % Weighted-average grant date fair value $ 0.98 $ 1.95 |
Summary of Stock Option Activity under all Plans | A summary of the stock option activity under all plans during the six months ended January 27, 2018 is as follows: Number of Shares Weighted- Average Exercise Price Weighted- Average Remaining Contractual Terms Aggregate Intrinsic Value (a) (thousands) (years) (millions) Options outstanding – July 29, 2017 16,413.7 $ 11.42 4.5 $ 0.2 Granted 5,066.8 2.40 Exercised — — Canceled/Forfeited (1,623.8 ) 11.29 Options outstanding – January 27, 2018 19,856.7 $ 9.13 4.7 $ 0.1 Options vested and expected to vest at January 27, 2018 (b) 19,423.0 $ 9.24 4.7 $ 0.1 Options exercisable at January 27, 2018 10,364.0 $ 13.17 3.5 $ — _______ (a) The intrinsic value is the amount by which the market price at the end of the period of the underlying share of stock exceeds the exercise price of the stock option. (b) The number of options expected to vest takes into consideration estimated expected forfeitures. |
Summary of Restricted Equity Awards Activity | A summary of restricted equity awards activity during the six months ended January 27, 2018 is as follows: Service-based Restricted Equity Awards Number of Shares Weighted- Average Grant Date Fair Value Per Share (thousands) Nonvested at July 29, 2017 3,110.0 $ 8.05 Granted 2,531.9 2.47 Vested (1,100.8 ) 8.61 Canceled/Forfeited (137.4 ) 7.39 Nonvested at January 27, 2018 4,403.7 $ 4.72 |
Segment Information (Tables)
Segment Information (Tables) | 6 Months Ended |
Jan. 27, 2018 | |
Segment Reporting [Abstract] | |
Segment reporting disclosure | Net sales, operating (loss) income and depreciation and amortization expense for each operating segment are as follows: Three Months Ended Six Months Ended January 27, January 28, January 27, January 28, (millions) Net sales: Premium Fashion (a) $ 609.6 $ 608.2 $ 1,164.7 $ 1,187.4 Value Fashion 439.3 481.6 910.6 985.7 Plus Fashion 340.5 347.3 644.7 665.0 Kids Fashion 329.6 311.1 588.7 588.5 Total net sales $ 1,719.0 $ 1,748.2 $ 3,308.7 $ 3,426.6 Operating (loss) income: Premium Fashion (a) $ 4.5 $ 22.7 $ 43.0 $ 66.3 Value Fashion (38.4 ) (19.8 ) (27.5 ) (7.7 ) Plus Fashion 1.0 (10.0 ) 0.1 (3.8 ) Kids Fashion 19.4 (1.6 ) 35.1 11.6 Unallocated acquisition and integration expenses (3.3 ) (15.8 ) (5.4 ) (27.8 ) Unallocated restructuring and other related charges (b) (18.8 ) (20.2 ) (41.0 ) (32.1 ) Total operating (loss) income $ (35.6 ) $ (44.7 ) $ 4.3 $ 6.5 Depreciation and amortization expense: Premium Fashion (a) $ 31.6 $ 34.8 $ 64.5 $ 69.0 Value Fashion 26.7 27.0 53.0 53.4 Plus Fashion 15.7 16.7 31.1 32.8 Kids Fashion 15.8 17.8 31.2 35.0 Total depreciation and amortization expense $ 89.8 $ 96.3 $ 179.8 $ 190.2 _______ (a) The results of the Premium Fashion segment are included within the Company's condensed consolidated results of operations for the three months ended January 27, 2018 from October 29, 2017 to February 3, 2018 and for the six months ended January 27, 2018 from July 30, 2017 to February 3, 2018. b) Restructuring and other related charges are as follows: Three Months Ended Six Months Ended January 27, January 28, January 27, January 28, (millions) Cash related charges (i) : Restructuring charges: Premium Fashion $ 0.3 $ 1.2 $ 1.7 $ 1.2 Value Fashion (0.1 ) 2.7 (1.3 ) 5.0 Plus Fashion 0.7 4.6 5.4 6.3 Kids Fashion — 1.4 (0.3 ) 2.1 Corporate 1.8 2.3 1.1 5.7 Total Severance and benefit costs: 2.7 12.2 6.6 20.3 Professional fees and other related charges: Plus Fashion 1.0 — 2.2 — Corporate 11.9 8.0 27.9 11.8 Total Professional fees and other related charges 12.9 8.0 30.1 11.8 Total Cash related charges 15.6 20.2 36.7 32.1 Non-cash charges: Impairment of assets: Value Fashion — — 1.1 — Plus Fashion 3.2 — 3.2 — Total Non-cash charges 3.2 — 4.3 — Total restructuring and other related charges $ 18.8 $ 20.2 $ 41.0 $ 32.1 (i) The charges incurred under the Company's Change for Growth program are more fully described in Note 6. |
Restructuring and other related charges | As a result of the Change for Growth program, the Company incurred the following charges, which are included within Restructuring and other related charges, for all periods presented: Three Months Ended Six Months Ended January 27, January 28, January 27, January 28, (millions) Cash restructuring charges: Severance and benefit costs (a) $ 2.7 $ 12.2 $ 6.6 $ 20.3 Professional fees and other related charges (b) 12.9 8.0 30.1 11.8 Total cash charges 15.6 20.2 36.7 32.1 Non-cash charges: Impairment of assets (c) 3.2 — 4.3 — Total non-cash charges 3.2 — 4.3 — Total restructuring and other related charges $ 18.8 $ 20.2 $ 41.0 $ 32.1 _______ (a) Severance and benefit costs in Fiscal 2018 reflect additional severance accruals associated with previously announced initiatives as well as adjustments to true up estimates of previously accrued severance-related costs to reflect amounts actually paid. Fiscal 2017 amounts reflect accruals associated with restructuring announcements made during that period. (b) Professional fees and other related charges in both periods consist of third-party costs incurred in connection with the identification and implementation of transformation initiatives associated with the Change for Growth program as well as third-party costs associated with the relocation of the Catherines brand to Ohio. (c) Includes charges for non-cash asset impairments of $4.3 million and $5.4 million during the three and six months ended January 27, 2018 , respectively, which primarily reflect the write-down of the Bensalem building to fair market value. The amounts for both the three and six months ended January 27, 2018 were offset in part by the write-off of $1.1 million of tenant allowances during the second quarter of Fiscal 2018 as program stores were vacated. Restructuring and other related charges are as follows: Three Months Ended Six Months Ended January 27, January 28, January 27, January 28, (millions) Cash related charges (i) : Restructuring charges: Premium Fashion $ 0.3 $ 1.2 $ 1.7 $ 1.2 Value Fashion (0.1 ) 2.7 (1.3 ) 5.0 Plus Fashion 0.7 4.6 5.4 6.3 Kids Fashion — 1.4 (0.3 ) 2.1 Corporate 1.8 2.3 1.1 5.7 Total Severance and benefit costs: 2.7 12.2 6.6 20.3 Professional fees and other related charges: Plus Fashion 1.0 — 2.2 — Corporate 11.9 8.0 27.9 11.8 Total Professional fees and other related charges 12.9 8.0 30.1 11.8 Total Cash related charges 15.6 20.2 36.7 32.1 Non-cash charges: Impairment of assets: Value Fashion — — 1.1 — Plus Fashion 3.2 — 3.2 — Total Non-cash charges 3.2 — 4.3 — Total restructuring and other related charges $ 18.8 $ 20.2 $ 41.0 $ 32.1 (i) The charges incurred under the Company's Change for Growth program are more fully described in Note 6. |
Additional Financial Informat35
Additional Financial Information (Tables) | 6 Months Ended |
Jan. 27, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Cash Interest and Taxes | Six Months Ended Cash Interest and Taxes: January 27, January 28, (millions) Cash paid for interest $ 54.6 $ 52.3 Cash paid for income taxes $ 5.7 $ 6.1 |
Description of Business (Narrat
Description of Business (Narrative) (Details) $ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jan. 27, 2018USD ($)Store | Jan. 28, 2017USD ($) | Jan. 27, 2018USD ($)Storesegment | Jan. 28, 2017USD ($) | Jul. 29, 2017USD ($) | |
Segment Reporting Information [Line Items] | |||||
Number of stores | 4,700 | 4,700 | |||
Net sales | $ | $ 1,719 | $ 1,748.2 | $ 3,308.7 | $ 3,426.6 | $ 6,600 |
Number of Reportable Segments | segment | 4 | ||||
ANN | |||||
Segment Reporting Information [Line Items] | |||||
Number of stores | 309 | 309 | |||
Loft | |||||
Segment Reporting Information [Line Items] | |||||
Number of stores | 679 | 679 | |||
Maurices | |||||
Segment Reporting Information [Line Items] | |||||
Number of stores | 993 | 993 | |||
dressbarn | |||||
Segment Reporting Information [Line Items] | |||||
Number of stores | 741 | 741 | |||
Lane Bryant | |||||
Segment Reporting Information [Line Items] | |||||
Number of stores | 754 | 754 | |||
Catherines | |||||
Segment Reporting Information [Line Items] | |||||
Number of stores | 352 | 352 | |||
Justice | |||||
Segment Reporting Information [Line Items] | |||||
Number of stores | 862 | 862 |
Basis of Presentation Basis of
Basis of Presentation Basis of Presentation (Narrative) (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jan. 27, 2018 | Jan. 28, 2017 | Jan. 27, 2018 | Jan. 28, 2017 | Jul. 29, 2017 | |
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | |||||
Net sales | $ 1,719 | $ 1,748.2 | $ 3,308.7 | $ 3,426.6 | $ 6,600 |
Operating (loss) income | $ (35.6) | $ (44.7) | 4.3 | $ 6.5 | |
Extra week [Member] | Premium Fashion | |||||
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | |||||
Net sales | 25 | ||||
Operating (loss) income | $ 3 |
Recently Issued Accounting St38
Recently Issued Accounting Standards Accounting Policies (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended |
Jan. 27, 2018 | Jan. 27, 2018 | Jul. 29, 2017 | |
Accounting Policies [Abstract] | |||
Other Noncash Income Tax Expense | $ 1.5 | $ 4.7 | |
Loyalty and credit card programs, percent, net sales | 2.00% |
Inventories (Schedule of Invent
Inventories (Schedule of Inventories by Brand) (Details) - USD ($) $ in Millions | Jan. 27, 2018 | Jul. 29, 2017 |
Inventory [Line Items] | ||
Total inventories | $ 600.3 | $ 639.3 |
Premium Fashion | ||
Inventory [Line Items] | ||
Total inventories | 192.2 | 208.2 |
Value Fashion | ||
Inventory [Line Items] | ||
Total inventories | 183.7 | 180.6 |
Plus Fashion | ||
Inventory [Line Items] | ||
Total inventories | 152.9 | 161.9 |
Kids Fashion | ||
Inventory [Line Items] | ||
Total inventories | $ 71.5 | $ 88.6 |
Long-Lived Assets Impairment (I
Long-Lived Assets Impairment (Impairment Charges) (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jan. 27, 2018 | Jan. 28, 2017 | Jan. 27, 2018 | Jan. 28, 2017 | ||
Impaired Long-Lived Assets Held and Used [Line Items] | |||||
Other Asset Impairment Charges | $ 4.2 | $ 3 | $ 9.7 | $ 7.7 | |
Premium Fashion | |||||
Impaired Long-Lived Assets Held and Used [Line Items] | |||||
Other Asset Impairment Charges | 0 | 0 | 0 | 0.7 | |
Value Fashion | |||||
Impaired Long-Lived Assets Held and Used [Line Items] | |||||
Other Asset Impairment Charges | [1] | 2.3 | 1.2 | 5.5 | 3.3 |
Plus Fashion | |||||
Impaired Long-Lived Assets Held and Used [Line Items] | |||||
Other Asset Impairment Charges | [1] | 1.3 | 1.5 | 3 | 2.6 |
Kids Fashion | |||||
Impaired Long-Lived Assets Held and Used [Line Items] | |||||
Other Asset Impairment Charges | $ 0.6 | $ 0.3 | $ 1.2 | $ 1.1 | |
[1] | The Company incurred additional impairment charges in the three and six months ended January 27, 2018 of $4.3 million and $5.4 million respectively, in connection with the Change for Growth program which are considered to be outside the Company’s typical quarterly real-estate review, and are included within Restructuring and other related charges, as more fully described in Note 6. No such expenses were recorded in the three and six months ended January 28, 2017. |
Restructuring and Other Relat41
Restructuring and Other Related Charges Restructuring Related Liabilities (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jan. 27, 2018 | Jan. 28, 2017 | Jan. 27, 2018 | Jan. 28, 2017 | ||
Restructuring Cost and Reserve [Line Items] | |||||
Additions charged to expense | [1] | $ 18.8 | $ 20.2 | $ 41 | $ 32.1 |
Change for Growth Program [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Balance at July 29, 2017 | 22.4 | ||||
Additions charged to expense | 18.8 | 20.2 | 41 | 32.1 | |
Cash payments | (43.6) | ||||
Balance at January 27, 2018 | 15.5 | 15.5 | |||
Employee Severance [Member] | Change for Growth Program [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Balance at July 29, 2017 | 17.3 | ||||
Additions charged to expense | 6.6 | ||||
Cash payments | (14.6) | ||||
Balance at January 27, 2018 | 9.3 | 9.3 | |||
Other Restructuring [Member] | Change for Growth Program [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Balance at July 29, 2017 | 5.1 | ||||
Additions charged to expense | 30.1 | ||||
Cash payments | (29) | ||||
Balance at January 27, 2018 | 6.2 | 6.2 | |||
Cash-related restructuring charges [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Additions charged to expense | 15.6 | 20.2 | 36.7 | 32.1 | |
Cash-related restructuring charges [Member] | Change for Growth Program [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Additions charged to expense | $ 15.6 | $ 20.2 | $ 36.7 | $ 32.1 | |
[1] | Restructuring and other related charges are as follows: Three Months Ended Six Months Ended January 27, 2018 January 28, 2017 January 27, 2018 January 28, 2017 (millions)Cash related charges(i): Restructuring charges: Premium Fashion$0.3 $1.2 $1.7 $1.2 Value Fashion(0.1) 2.7 (1.3) 5.0 Plus Fashion0.7 4.6 5.4 6.3 Kids Fashion— 1.4 (0.3) 2.1 Corporate1.8 2.3 1.1 5.7Total Severance and benefit costs:2.7 12.2 6.6 20.3Professional fees and other related charges: Plus Fashion1.0 — 2.2 —Corporate11.9 8.0 27.9 11.8Total Professional fees and other related charges12.9 8.0 30.1 11.8Total Cash related charges15.6 20.2 36.7 32.1 Non-cash charges: Impairment of assets: Value Fashion— — 1.1 —Plus Fashion3.2 — 3.2 —Total Non-cash charges3.2 — 4.3 —Total restructuring and other related charges$18.8 $20.2$41.0 $32.1 (i) The charges incurred under the Company's Change for Growth program are more fully described in Note 6. |
Restructuring and Other Relat42
Restructuring and Other Related Charges Restructuring and Other Related Charges (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jan. 27, 2018 | Jan. 28, 2017 | Jan. 27, 2018 | Jan. 28, 2017 | Aug. 04, 2018 | ||
Restructuring Cost and Reserve [Line Items] | ||||||
Additions charged to expense | [1] | $ 18.8 | $ 20.2 | $ 41 | $ 32.1 | |
Impairment of retail store assets | 15.1 | 7.7 | ||||
Capital Expenditures Incurred but Not yet Paid | 15.3 | 17.8 | ||||
Write-off of Tenant Allowance | 1.1 | |||||
Change for Growth Program [Member] | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Additions charged to expense | 18.8 | 20.2 | 41 | 32.1 | ||
Non-cash charges [Member] | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Additions charged to expense | 3.2 | 0 | 4.3 | 0 | ||
Non-cash charges [Member] | Change for Growth Program [Member] | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Additions charged to expense | 3.2 | 0 | 4.3 | 0 | ||
Impairment of retail store assets | [2] | 3.2 | 0 | 4.3 | 0 | |
Cash-related restructuring charges [Member] | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Severance Costs | 2.7 | 12.2 | 6.6 | 20.3 | ||
Professional Fees | 12.9 | 8 | 30.1 | 11.8 | ||
Additions charged to expense | 15.6 | 20.2 | 36.7 | 32.1 | ||
Cash-related restructuring charges [Member] | Change for Growth Program [Member] | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Severance Costs | [3] | 2.7 | 12.2 | 6.6 | 20.3 | |
Professional Fees | [4] | 12.9 | 8 | 30.1 | 11.8 | |
Additions charged to expense | 15.6 | 20.2 | 36.7 | 32.1 | ||
Capital Expenditures Incurred but Not yet Paid | 20 | |||||
Scenario, Forecast [Member] | Cash-related restructuring charges [Member] | Change for Growth Program [Member] | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Capital Expenditures Incurred but Not yet Paid | $ 40 | |||||
Minimum [Member] | Scenario, Forecast [Member] | Cash-related restructuring charges [Member] | Change for Growth Program [Member] | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Additions charged to expense | 15 | |||||
Maximum [Member] | Scenario, Forecast [Member] | Cash-related restructuring charges [Member] | Change for Growth Program [Member] | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Additions charged to expense | $ 25 | |||||
Plus Fashion | Change for Growth Program [Member] | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Impairment of retail store assets | 4.3 | 5.4 | ||||
Plus Fashion | Non-cash charges [Member] | Change for Growth Program [Member] | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Impairment of retail store assets | $ 3.2 | $ 0 | $ 3.2 | $ 0 | ||
[1] | Restructuring and other related charges are as follows: Three Months Ended Six Months Ended January 27, 2018 January 28, 2017 January 27, 2018 January 28, 2017 (millions)Cash related charges(i): Restructuring charges: Premium Fashion$0.3 $1.2 $1.7 $1.2 Value Fashion(0.1) 2.7 (1.3) 5.0 Plus Fashion0.7 4.6 5.4 6.3 Kids Fashion— 1.4 (0.3) 2.1 Corporate1.8 2.3 1.1 5.7Total Severance and benefit costs:2.7 12.2 6.6 20.3Professional fees and other related charges: Plus Fashion1.0 — 2.2 —Corporate11.9 8.0 27.9 11.8Total Professional fees and other related charges12.9 8.0 30.1 11.8Total Cash related charges15.6 20.2 36.7 32.1 Non-cash charges: Impairment of assets: Value Fashion— — 1.1 —Plus Fashion3.2 — 3.2 —Total Non-cash charges3.2 — 4.3 —Total restructuring and other related charges$18.8 $20.2$41.0 $32.1 (i) The charges incurred under the Company's Change for Growth program are more fully described in Note 6. | |||||
[2] | Includes charges for non-cash asset impairments of $4.3 million and $5.4 million during the three and six months ended January 27, 2018, respectively, which primarily reflect the write-down of the Bensalem building to fair market value. The amounts for both the three and six months ended January 27, 2018 were offset in part by the write-off of $1.1 million of tenant allowances during the second quarter of Fiscal 2018 as program stores were vacated. | |||||
[3] | Severance and benefit costs in Fiscal 2018 reflect additional severance accruals associated with previously announced initiatives as well as adjustments to true up estimates of previously accrued severance-related costs to reflect amounts actually paid. Fiscal 2017 amounts reflect accruals associated with restructuring announcements made during that period. | |||||
[4] | Professional fees and other related charges in both periods consist of third-party costs incurred in connection with the identification and implementation of transformation initiatives associated with the Change for Growth program as well as third-party costs associated with the relocation of the Catherines brand to Ohio. |
Debt (Schedule of Debt) (Detail
Debt (Schedule of Debt) (Details) - USD ($) $ in Millions | Jan. 27, 2018 | Jul. 29, 2017 | Aug. 21, 2015 | |
Debt Instrument [Line Items] | ||||
Long-term debt, including unamortized original issue discount and debt issuance costs | $ 1,574 | |||
Total long-term debt | 1,477.6 | $ 1,494.1 | ||
Less: current portion | (44) | (44) | ||
Term loan [Member] | ||||
Debt Instrument [Line Items] | ||||
Long-term debt, including unamortized original issue discount and debt issuance costs | 1,574 | 1,596.5 | $ 1,800 | |
Less: unamortized original issue discount | [1] | (22.7) | (25.2) | |
unamortized debt issuance costs | [1] | (26) | (28.8) | |
Long-term debt | $ 1,525.3 | 1,542.5 | ||
Debt effective interest rate (percent) | 6.30% | |||
Revolving Credit Facility [Member] | ||||
Debt Instrument [Line Items] | ||||
Long-term debt, including unamortized original issue discount and debt issuance costs | $ 0 | 0 | ||
unamortized debt issuance costs | [2] | (3.7) | (4.4) | |
Long-term debt | $ (3.7) | $ (4.4) | ||
[1] | The original issue discount and debt issuance costs for the term loan are amortized over the life of the term loan using the interest method based on an imputed interest rate of approximately 6.3%. | |||
[2] | The unamortized debt issuance costs are amortized on a straight-line basis over the life of the amended revolving credit agreement. |
Debt (Amended Revolving Credit
Debt (Amended Revolving Credit Agreement) (Details) - Revolving Credit Facility [Member] | 6 Months Ended |
Jan. 27, 2018USD ($) | |
Debt Instrument [Line Items] | |
Debt maximum borrowing capacity | $ 600,000,000 |
Optional additional increase in credit facility | 200,000,000 |
Line of credit facility, remaining borrowing availability | $ 422,000,000 |
Debt Instrument, Covenant, Percentage of Credit Limit | 10.00% |
Line of Credit Facility, Covenant Terms, Remaining Borrowing Capacity | $ 45,000,000 |
Minimum [Member] | |
Debt Instrument [Line Items] | |
Debt Instrument, Covenant, Fixed Charge Coverage Ratio | 1 |
Debt Instrument, Covenant, Days of Availability | 3 days |
Maximum [Member] | |
Debt Instrument [Line Items] | |
Debt Instrument, Covenant, Days of Availability | 30 days |
Debt (Term Loan) (Details)
Debt (Term Loan) (Details) - USD ($) | 6 Months Ended | ||
Jan. 27, 2018 | Jul. 29, 2017 | Aug. 21, 2015 | |
Debt Instrument [Line Items] | |||
Long-term Debt, gross | $ 1,574,000,000 | ||
Term loan [Member] | |||
Debt Instrument [Line Items] | |||
Long-term Debt, gross | $ 1,574,000,000 | $ 1,596,500,000 | $ 1,800,000,000 |
Debt instrument, discount percentage | 2.00% | ||
Debt instrument, additional term facility borrowing capacity | $ 200,000,000 | ||
Debt instrument, periodic payment | 22,500,000 | ||
Debt balloon payment to be paid | 1,200,000,000 | ||
Repayment of debt | $ 22,500,000 | ||
Debt effective interest rate (percent) | 6.30% | ||
Term loan [Member] | Eurodollar Borrowings [Member] | |||
Debt Instrument [Line Items] | |||
Debt effective interest rate (percent) | 6.125% |
Debt (Maturities of Debt) (Deta
Debt (Maturities of Debt) (Details) $ in Millions | Jan. 27, 2018USD ($) |
Debt Disclosure [Abstract] | |
2,018 | $ 21.5 |
2,019 | 90 |
2,020 | 67.5 |
2,021 | 90 |
2,022 | 90 |
Thereafter | 1,215 |
Total maturities | $ 1,574 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Millions | Jan. 27, 2018 | Jul. 29, 2017 |
Term Loan Facility [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Long-term debt, fair value | $ 1,417 | $ 1,345 |
Income Taxes Income Taxes (Deta
Income Taxes Income Taxes (Details) | 6 Months Ended |
Jan. 27, 2018USD ($) | |
Income Tax Disclosure [Abstract] | |
Tax Cuts and Jobs Act, NOLs annual limitation, pecentage | 80.00% |
Operating Loss Carryforwards Expiration Period | 20 years |
Tax Cuts and Jobs Act, Change in Tax Rate, Income Tax Benefit (Expense), Federal | $ 38,600,000 |
Tax Cuts and Jobs Act, Incomplete Accounting, Provisional Income Tax Benefit (Expense), Federal | (24,100,000) |
Tax Cuts and Jobs Act, Incomplete Accounting, Provisional Income Tax Benefit (Expense), State | (700,000) |
Tax Cuts and Jobs Act, Incomplete Accounting, Provisional Income Tax Benefit (Expense), Foreign tax credits valuation allowance | (22,600,000) |
Tax Cuts and Jobs Act, Incomplete Accounting, Provisional Income Tax Benefit (Expense), Executive compensation limitation | (2,800,000) |
Tax Cuts and Jobs Act, Incomplete Accounting, Provisional Income Tax Benefit (Expense), Indefinite reinvestment assertion | 46,500,000 |
Tax Cuts and Jobs Act, Incomplete Accounting, Provisional Income Tax Benefit (Expense), Tax reform impact | $ 34,900,000 |
Income Taxes Provisional Adjust
Income Taxes Provisional Adjustments Recorded (Details) | 6 Months Ended |
Jan. 27, 2018USD ($) | |
Income Tax Disclosure [Abstract] | |
Tax Cuts and Jobs Act, Incomplete Accounting, Provisional Income Tax Benefit (Expense), Tax reform impact | $ 34,900,000 |
Tax Cuts and Jobs Act, New Tax Rate, Federal | 21.00% |
Tax Cuts and Jobs Act, Blended Tax Rate, Federal | 27.00% |
Tax Cuts and Jobs Act, Change in Tax Rate, Income Tax Benefit (Expense), Federal | $ 38,600,000 |
Tax Cuts and Jobs Act, Incomplete Accounting, Provisional Income Tax Benefit (Expense), Federal | 24,100,000 |
Tax Cuts and Jobs Act, Incomplete Accounting, Provisional Income Tax Benefit (Expense), State | 700,000 |
Tax Cuts and Jobs Act, Incomplete Accounting, Provisional Income Tax Benefit (Expense), Foreign tax credits valuation allowance | 22,600,000 |
Tax Cuts and Jobs Act, Executive Compensation Deduction Limitation | 1,000,000 |
Tax Cuts and Jobs Act, Incomplete Accounting, Provisional Income Tax Benefit (Expense), Executive compensation limitation | 2,800,000 |
Tax Cuts and Jobs Act, Deferred Tax Liability, estimate | 1,000,000 |
Tax Cuts and Jobs Act, Incomplete Accounting, Provisional Income Tax Benefit (Expense), Indefinite reinvestment assertion | $ 46,500,000 |
Income Taxes Provisional Adju50
Income Taxes Provisional Adjustments Not Recorded (Details) | Jan. 27, 2018 |
Income Tax Disclosure [Abstract] | |
Tax Cuts and Jobs Act, GILTI, US shareholder's pro rata share of CFC, percentage | 10.00% |
Income Taxes Other Items (Detai
Income Taxes Other Items (Details) $ in Millions | 3 Months Ended | 6 Months Ended |
Jan. 27, 2018USD ($) | Jan. 27, 2018USD ($) | |
Income Tax Disclosure [Abstract] | ||
Effective Income Tax Rate Reconciliation, Percent | 35.80% | 31.40% |
Deferred Tax Assets, Valuation Allowance | $ 23.3 | $ 23.3 |
Valuation Allowance, Deferred Tax Asset, Increase (Decrease), Amount | $ 45.9 |
Equity (Summary of Changes in E
Equity (Summary of Changes in Equity) (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jan. 27, 2018 | Jan. 28, 2017 | Jan. 27, 2018 | Jan. 28, 2017 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Balance at beginning of period | $ 821 | $ 1,863.3 | ||
Net loss | $ (39.3) | $ (35.2) | (32.7) | (20.8) |
Total other comprehensive income | 0.7 | 4.1 | ||
Common stock issued and equity grants made pursuant to stock-based compensation plans | 10.8 | 13.2 | ||
Other | (0.3) | (0.3) | ||
Balance at end of period | $ 799.5 | $ 1,859.5 | $ 799.5 | $ 1,859.5 |
Equity (Narrative) (Details)
Equity (Narrative) (Details) - USD ($) shares in Millions | 3 Months Ended | 6 Months Ended | |
Jan. 27, 2018 | Jan. 27, 2018 | Dec. 31, 2015 | |
Class of Stock [Line Items] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 24.3 | 21.2 | |
2016 Stock Repurchase Program [Member] | |||
Class of Stock [Line Items] | |||
Share repurchase program authorized amount | $ 200,000,000 | ||
Stock repurchase program remaining authorized repurchase amount | $ 181,400,000 | $ 181,400,000 |
Equity (Net Income per Common S
Equity (Net Income per Common Share) (Details) - shares shares in Millions | 3 Months Ended | 6 Months Ended | |||
Jan. 27, 2018 | Jan. 28, 2017 | Jan. 27, 2018 | Jan. 28, 2017 | ||
Earnings Per Share [Abstract] | |||||
Basic | 196.1 | 194.8 | 195.8 | 194.6 | |
Dilutive effect of stock options and restricted stock units (a) | [1] | 0 | 0 | 0 | 0 |
Diluted shares | 196.1 | 194.8 | 195.8 | 194.6 | |
[1] | There was no dilutive effect of stock options and restricted stock units for the three and six months ended January 27, 2018 and January 28, 2017 as the impact of these items was anti-dilutive using the treasury stock method. |
Stock-based Compensation (Narra
Stock-based Compensation (Narrative) (Details) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | |
Jan. 27, 2018 | Jan. 27, 2018 | Jan. 28, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total unrecognized compensation costs related to non-vested options | $ 12.7 | $ 12.7 | |
Weighted-average years expected to be recognized | 1 year 5 months 15 days | ||
Total fair value of options vested | 0.3 | $ 11 | $ 13.1 |
Service-based Restricted Equity Awards [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Weighted-average years expected to be recognized | 2 years | ||
Total unrecognized compensation | $ 11.2 | $ 11.2 | |
2016 Omnibus Incentive Plan [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Shares available for future grants under Stock Incentive Plan | 8.4 | 8.4 |
Stock-based Compensation (Summa
Stock-based Compensation (Summary of Total Compensation Expense and Associated Income Tax Benefit) (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jan. 27, 2018 | Jan. 28, 2017 | Jan. 27, 2018 | Jan. 28, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||
Compensation expense | $ 4.8 | $ 6.5 | $ 10.8 | $ 13.5 |
Income tax benefit | $ (0.9) | $ (2.5) | $ (3.2) | $ (5.1) |
Stock based Compensation (Weigh
Stock based Compensation (Weighted-Average Assumptions used to Estimate Fair Value of Stock Options Granted) (Details) - $ / shares | 6 Months Ended | |
Jan. 27, 2018 | Jan. 28, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||
Expected term (years) | 5 years 1 month | 5 years 1 month |
Expected volatility | 43.70% | 37.30% |
Risk-free interest rate | 1.90% | 1.20% |
Expected dividend yield | 0.00% | 0.00% |
Weighted-average grant date fair value | $ 0.98 | $ 1.95 |
Stock-based Compensation (Sum58
Stock-based Compensation (Summary of Stock Option Activity under all Plans) (Details) - USD ($) $ / shares in Units, $ in Millions | 6 Months Ended | 12 Months Ended | |
Jan. 27, 2018 | Jul. 29, 2017 | ||
Number of Shares | |||
Options outstanding – July 29, 2017 | 16,413,700 | ||
Granted | 5,066,800 | ||
Exercised | 0 | ||
Canceled/Forfeited | (1,623,800) | ||
Options outstanding – January 27, 2018 | 19,856,700 | 16,413,700 | |
Options vested and expected to vest at January 27, 2018 (b) | [1] | 19,423,000 | |
Options exercisable at January 27, 2018 | 10,364,000 | ||
Weighted-Average Exercise Price (in dollars per share) | |||
Options outstanding – July 29, 2017 | $ 11.42 | ||
Granted | 2.40 | ||
Exercised | 0 | ||
Canceled/Forfeited | 11.29 | ||
Options outstanding – January 27, 2018 | 9.13 | $ 11.42 | |
Options vested and expected to vest at January 27, 2018 (b) | 9.24 | ||
Options exercisable at January 27, 2018 | $ 13.17 | ||
Weighted-Average Remaining Contractual Terms (years) | |||
Options outstanding, weighted-average remaining contractual terms | 4 years 7 months 25 days | 4 years 5 months 13 days | |
Options vested and expected to vest at January 27, 2018, weighted-average remaining contractual terms | 4 years 7 months 25 days | ||
Options exercisable at January 27, 2018, weighted-average remaining contractual terms | 3 years 5 months 15 days | ||
Aggregate Intrinsic Value | |||
Options outstanding, aggregate intrinsic value | [2] | $ 0.1 | $ 0.2 |
Options vested and expected to vest at January 27, 2018 aggregate intrinsic value | [2] | 0.1 | |
Options exercisable at January 27, 2018, aggregate intrinsic value | [2] | $ 0 | |
[1] | The number of options expected to vest takes into consideration estimated expected forfeitures. | ||
[2] | The intrinsic value is the amount by which the market price at the end of the period of the underlying share of stock exceeds the exercise price of the stock option. |
Stock-based Compensation (Sum59
Stock-based Compensation (Summary of Restricted Equity Awards Activity) (Details) - Service-based Restricted Equity Awards [Member] | 6 Months Ended |
Jan. 27, 2018$ / sharesshares | |
Number of shares | |
Nonvested at July 29, 2017 | shares | 3,110,000 |
Granted | shares | 2,531,900 |
Vested | shares | (1,100,800) |
Cancelled/Forfeited | shares | (137,400) |
Nonvested at January 27, 2018 | shares | 4,403,700 |
Weighted Average Grant Date Fair Value Per Share | |
Nonvested at July 29, 2017 | $ / shares | $ 8.05 |
Granted | $ / shares | 2.47 |
Vested | $ / shares | 8.61 |
Cancelled/Forfeited | $ / shares | 7.39 |
Nonvested at January 27, 2018 | $ / shares | $ 4.72 |
Employee Benefit Plans (Details
Employee Benefit Plans (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||||
Jan. 27, 2018 | Jan. 28, 2017 | Jan. 27, 2018 | Jan. 28, 2017 | Jul. 29, 2017 | Oct. 29, 2016 | |
Employee Benefit Plans [Abstract] | ||||||
Compensation expense | $ (3.9) | $ 2.7 | $ (10) | $ 6.4 | ||
Unrecognized compensation expense | 34.6 | $ 34.6 | ||||
Weighted-average vesting period | 2 years 2 months | |||||
Liability for LTIP Awards | 12.7 | $ 12.7 | ||||
Liability for LTIP Awards, current | 6.5 | 6.5 | ||||
Liability for LTIP Awards, non-current | $ 6.2 | $ 6.2 | ||||
Cash settlement for liabilities | 10.4 | |||||
Recognized expense due to settlements | $ (8) | |||||
Net actuarial loss | $ (4.1) | $ 2 | ||||
Income tax benefit | $ (1.6) | $ (1.3) |
Commitments and Contingencies (
Commitments and Contingencies (Narrative) (Details) $ in Millions | 12 Months Ended |
Jul. 25, 2015USD ($) | |
Commitments and Contingencies Disclosure [Abstract] | |
Litigation settlement amount | $ 51 |
Segment Information (Net Sales
Segment Information (Net Sales and Operating Income) (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||||
Jan. 27, 2018 | Jan. 28, 2017 | Jan. 27, 2018 | Jan. 28, 2017 | Jul. 29, 2017 | ||||
Segment Reporting Information [Line Items] | ||||||||
Total net sales | $ 1,719 | $ 1,748.2 | $ 3,308.7 | $ 3,426.6 | $ 6,600 | |||
Total operating (loss) income | (35.6) | (44.7) | 4.3 | 6.5 | ||||
Unallocated acquisition and integration expenses | (3.3) | (15.8) | (5.4) | (27.8) | ||||
Unallocated restructuring and other related charges | [1] | (18.8) | (20.2) | (41) | (32.1) | |||
Restructuring Costs and Asset Impairment Charges | 18.8 | 20.2 | 41 | 32.1 | ||||
Total depreciation and amortization expense | 89.8 | 96.3 | 179.8 | 190.2 | ||||
Impairment of retail store assets | 15.1 | 7.7 | ||||||
Operating Segments [Member] | Premium Fashion | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Total net sales | 609.6 | [2] | 608.2 | 1,164.7 | [2] | 1,187.4 | ||
Total operating (loss) income | 4.5 | [2] | 22.7 | 43 | [2] | 66.3 | ||
Total depreciation and amortization expense | 31.6 | [2] | 34.8 | 64.5 | [2] | 69 | ||
Operating Segments [Member] | Value Fashion | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Total net sales | 439.3 | 481.6 | 910.6 | 985.7 | ||||
Total operating (loss) income | (38.4) | (19.8) | (27.5) | (7.7) | ||||
Total depreciation and amortization expense | 26.7 | 27 | 53 | 53.4 | ||||
Operating Segments [Member] | Plus Fashion | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Total net sales | 340.5 | 347.3 | 644.7 | 665 | ||||
Total operating (loss) income | 1 | (10) | 0.1 | (3.8) | ||||
Total depreciation and amortization expense | 15.7 | 16.7 | 31.1 | 32.8 | ||||
Operating Segments [Member] | Kids Fashion | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Total net sales | 329.6 | 311.1 | 588.7 | 588.5 | ||||
Total operating (loss) income | 19.4 | (1.6) | 35.1 | 11.6 | ||||
Total depreciation and amortization expense | 15.8 | 17.8 | 31.2 | 35 | ||||
Change for Growth Program [Member] | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Unallocated restructuring and other related charges | (18.8) | (20.2) | (41) | (32.1) | ||||
Change for Growth Program [Member] | Plus Fashion | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Impairment of retail store assets | 4.3 | 5.4 | ||||||
Cash-related restructuring charges [Member] | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Severance Costs | 2.7 | 12.2 | 6.6 | 20.3 | ||||
Unallocated restructuring and other related charges | (15.6) | (20.2) | (36.7) | (32.1) | ||||
Other related charges | 12.9 | 8 | 30.1 | 11.8 | ||||
Cash-related restructuring charges [Member] | Operating Segments [Member] | Premium Fashion | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Severance Costs | [3] | 0.3 | 1.2 | 1.7 | 1.2 | |||
Cash-related restructuring charges [Member] | Operating Segments [Member] | Value Fashion | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Severance Costs | [3] | (0.1) | 2.7 | (1.3) | 5 | |||
Cash-related restructuring charges [Member] | Operating Segments [Member] | Plus Fashion | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Severance Costs | [3] | 0.7 | 4.6 | 5.4 | 6.3 | |||
Other related charges | 1 | 0 | 2.2 | 0 | ||||
Cash-related restructuring charges [Member] | Operating Segments [Member] | Kids Fashion | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Severance Costs | [3] | 0 | 1.4 | (0.3) | 2.1 | |||
Cash-related restructuring charges [Member] | Corporate, Non-Segment [Member] | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Severance Costs | [3] | 1.8 | 2.3 | 1.1 | 5.7 | |||
Other related charges | 11.9 | 8 | 27.9 | 11.8 | ||||
Cash-related restructuring charges [Member] | Change for Growth Program [Member] | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Severance Costs | [4] | 2.7 | 12.2 | 6.6 | 20.3 | |||
Unallocated restructuring and other related charges | (15.6) | (20.2) | (36.7) | (32.1) | ||||
Other related charges | [5] | 12.9 | 8 | 30.1 | 11.8 | |||
Non-cash charges [Member] | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Unallocated restructuring and other related charges | (3.2) | 0 | (4.3) | 0 | ||||
Non-cash charges [Member] | Change for Growth Program [Member] | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Unallocated restructuring and other related charges | (3.2) | 0 | (4.3) | 0 | ||||
Impairment of retail store assets | [6] | 3.2 | 0 | 4.3 | 0 | |||
Non-cash charges [Member] | Change for Growth Program [Member] | Value Fashion | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Impairment of retail store assets | 0 | 0 | 1.1 | 0 | ||||
Non-cash charges [Member] | Change for Growth Program [Member] | Plus Fashion | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Impairment of retail store assets | $ 3.2 | $ 0 | $ 3.2 | $ 0 | ||||
[1] | Restructuring and other related charges are as follows: Three Months Ended Six Months Ended January 27, 2018 January 28, 2017 January 27, 2018 January 28, 2017 (millions)Cash related charges(i): Restructuring charges: Premium Fashion$0.3 $1.2 $1.7 $1.2 Value Fashion(0.1) 2.7 (1.3) 5.0 Plus Fashion0.7 4.6 5.4 6.3 Kids Fashion— 1.4 (0.3) 2.1 Corporate1.8 2.3 1.1 5.7Total Severance and benefit costs:2.7 12.2 6.6 20.3Professional fees and other related charges: Plus Fashion1.0 — 2.2 —Corporate11.9 8.0 27.9 11.8Total Professional fees and other related charges12.9 8.0 30.1 11.8Total Cash related charges15.6 20.2 36.7 32.1 Non-cash charges: Impairment of assets: Value Fashion— — 1.1 —Plus Fashion3.2 — 3.2 —Total Non-cash charges3.2 — 4.3 —Total restructuring and other related charges$18.8 $20.2$41.0 $32.1 (i) The charges incurred under the Company's Change for Growth program are more fully described in Note 6. | |||||||
[2] | The results of the Premium Fashion segment are included within the Company's condensed consolidated results of operations for the three months ended January 27, 2018 from October 29, 2017 to February 3, 2018 and for the six months ended January 27, 2018 from July 30, 2017 to February 3, 2018. | |||||||
[3] | The charges incurred under the Company's Change for Growth program are more fully described in Note 6. | |||||||
[4] | Severance and benefit costs in Fiscal 2018 reflect additional severance accruals associated with previously announced initiatives as well as adjustments to true up estimates of previously accrued severance-related costs to reflect amounts actually paid. Fiscal 2017 amounts reflect accruals associated with restructuring announcements made during that period. | |||||||
[5] | Professional fees and other related charges in both periods consist of third-party costs incurred in connection with the identification and implementation of transformation initiatives associated with the Change for Growth program as well as third-party costs associated with the relocation of the Catherines brand to Ohio. | |||||||
[6] | Includes charges for non-cash asset impairments of $4.3 million and $5.4 million during the three and six months ended January 27, 2018, respectively, which primarily reflect the write-down of the Bensalem building to fair market value. The amounts for both the three and six months ended January 27, 2018 were offset in part by the write-off of $1.1 million of tenant allowances during the second quarter of Fiscal 2018 as program stores were vacated. |
Additional Financial Informat63
Additional Financial Information (Cash Interest and Taxes) (Details) - USD ($) $ in Millions | 6 Months Ended | |
Jan. 27, 2018 | Jan. 28, 2017 | |
Supplemental Cash Flow Information [Abstract] | ||
Cash paid for interest | $ 54.6 | $ 52.3 |
Cash paid for income taxes | $ 5.7 | $ 6.1 |
Additional Financial Informat64
Additional Financial Information (Non-Cash Transactions) (Details) - USD ($) $ in Millions | 6 Months Ended | |
Jan. 27, 2018 | Jan. 28, 2017 | |
Supplemental Cash Flow Information [Abstract] | ||
Accrued purchases of fixed assets | $ 15.3 | $ 17.8 |
Subsequent Events Subsequent 65
Subsequent Events Subsequent Events (Details) - USD ($) | 9 Months Ended | |
Apr. 28, 2018 | Jan. 27, 2018 | |
Revolving Credit Facility [Member] | ||
Subsequent Event [Line Items] | ||
Line of Credit Facility, Maximum Borrowing Capacity | $ 600,000,000 | |
Line Of Credit Facility Additional Borrowing Capacity | $ 200,000,000 | |
Revolving Credit Facility [Member] | Subsequent Event [Member] | ||
Subsequent Event [Line Items] | ||
Line of Credit Facility, Maximum Borrowing Capacity | $ 500,000,000 | |
Line Of Credit Facility Additional Borrowing Capacity | $ 200,000,000 | |
Line of credit facility, maturity, extension, years from closing date | 5 years | |
Line of credit facility, maturity, extension,days prior to term loan maturity | 91 days | |
Line of credit available, in excess of | $ 100,000,000 | |
Line of credit available, in excess of, percentage of credit limit | 20.00% | |
Letter of Credit [Member] | Subsequent Event [Member] | ||
Subsequent Event [Line Items] | ||
Line of Credit Facility, Maximum Borrowing Capacity | $ 200,000,000 | |
Standby Letters of Credit [Member] | Subsequent Event [Member] | ||
Subsequent Event [Line Items] | ||
Line of Credit Facility, Maximum Borrowing Capacity | 100,000,000 | |
Swingline Loans [Member] | Subsequent Event [Member] | ||
Subsequent Event [Line Items] | ||
Line of Credit Facility, Maximum Borrowing Capacity | 30,000,000 | |
Maximum [Member] | Term Loan Facility [Member] | Subsequent Event [Member] | ||
Subsequent Event [Line Items] | ||
Term loan, outstanding principal amount | $ 150,000,000 |